TRC SYNERGY BERHAD annual report 2012 - …ir.chartnexus.com/trc/docs/ar/2012.pdfas the electrified double-tracking between Ipoh – Padang Besar, LDT2 Jabur – Kuala Terengganu,

TRC SYNERGY BERHAD (413192-D)

TRC Business Centre,

Jalan Andaman Utama,

68000 Ampang, Selangor

Tel : 03 4103 8000

Fax : 03 4108 7016

www.trc.com.m

y


annual report 2012

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To become a large and diversified conglomerate

with core business in construction, property development,

privatization of government projects and oil and gas.

Our VisiOn

Chairman’s Statement

Corporate Information

Profile of Directors

Corporate Structure

Statement on Corporate Governance

Statement on Risk Management and Internal Control

Audit Committee Report

Financial Statements

List of Properties

Analysis of Shareholdings

Analysis of Warrant A Holdings

Analysis of Warrant B Holdings

Notice of Sixteenth Annual General Meeting

Statement Accompanying Notice of Annual General Meeting

Proxy Form

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06

08

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18

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25

106

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110

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114

117

COntents

Overview

The construction industry is expected to remain robust in the immediate future, eventhough, challenging. As we continue to expand our operations, amidst the challenging landscape, we are mindful of the importance of putting a structured system that will facilitate its growth. In this respect, the group is committed to continually review its organizational process so that it can achieve a leaner and optimal cost structure. We believe that this process will gradually translate into higher efficiency and productivity for the group.

We will also reinforce our risk management strategies so as to cushion against the inherent competition and uncertainties. While we are not immune to changes and competition, we can mitigate the impact by putting in place appropriate contingency plan so as to achieve business sustainability and deliver our promises.

GrOup perfOrmance

For the year under review, the group turnover increase to RM566.1million from RM400.7million in the preceding year, representing an increase of 41%. The profit after tax however, registered a reduction of 29% from RM12.9million in the year 2011 to RM9.2million in 2012. The reduction in profit after tax despite the higher turnover, was due to the higher tax payment.

We are however, optimistic that despite the demanding and competitive operating environment, going forward, the group is expected to perform better in the subsequent years. This is in view of the fact that the group has an outstanding orderbook of about RM2.3billion which will provide forward visibility for at least the next 3 years.

cOnstructiOn

In the year 2012, this division performed well in terms of project procurement, riding on the strong construction demand from the implementation of mega projects under the Tenth Malaysia Plan and the Economic Transformation Programme.

Dear shareholders,On behalf of the Board of Directors, i am pleased to present the Annual report and Audited Financial statement of trC synergy Berhad for the financial year ended 31 December 2012.

ChAirmAn’s stAtement

Dato’ Sri Sufri Bin Hj MoHD Zin

Executive Chairman

02 TRC SYNERGY BERHADAnnual Report 2012

ChAirmAn’s stAtement (COnt’D)

The current project on Lot 196, Taman Ukay Tropika, Ulu Klang, Selangor which consist of 83 units of 3-storey houses and a club house will generate a GDV of approximately RM91 million to the company. The sales have now exceeded 85% and the construction work has reached 75% completion. We are expected to deliver the units much earlier than the contractual obligation date of March 2015.

We are also expected to launch the development, Impian Senibong – Phase 2, in Johor Bahru in the year 2013. This development will comprise 243 units of apartments and SOHO’s with an anticipated GDV of RM90million. The necessary submission has been put forward to the relevant authorities for approvals. We anticipated a strong demand for this project based on our preliminary surveys and the bookings received.

The division is expected to contribute a combined revenue of RM50 million in 2013 from the above projects. Besides this, other land bank which will be developed in the medium term is the 27 acres piece of land in Bandar Seri Alam, Johor Bahru. To provide more sustainability, the division will continue to look for good land banks throughout the country and also explore potential joint venture with credible partners for development.

trc (aust) ptY Ltd.

For the period under review, the revenue for this division experience a decline of 43.4% from RM22.6million in the year 2011 to RM12.8million in the year 2012. Likewise, the profit after tax, also registered a decline from RM6.7million in 2011 to RM0.4million in 2012. The less than satisfactory result is largely due to the soft property market in Melbourne, Australia. However, going forward, we expect the sentiment to improve in 2013 due to the reduction in interest rate by the Reserve Bank of Australia and the gradual stock depletion. We believe our development in Springridge, Wallan would benefit from this trend reversal.

Our recent acquisition of a commercial building in Swan Street, about 5 kilometres from Melbourne Central Business District, is expected to contribute positively to the group profitability in the future. We have plans to redevelop the building to maximize its return in the near future.

cOnstructiOn (cOnt’d)

Our proven track record and established position in the construction industry has enabled us to secure some sizeable projects such as the MRT-Construction and Completion of 3 elevated stations in Sg. Buloh and Kota Damansara (RM283.6million), MRT – Construction and Completion of Sg. Buloh Depot (RM458.9million) and the Sangan Sungei Anap road package, Sarawak (RM169.9million). To date our order book stands at RM2.3billion of which approximately RM1.8billion has yet to be recognized as revenue in our books. This will provide sustainability to the group for at least the next 3 years.

In the near future, we expect this division to continue providing the impetus to drive the group forward as we believe operation is our strength. While this strength will continue to lead us to a healthy growth, we will also channel our focus towards a more sustainable business model to provide better value to our shareholders.

prOpertY

The year 2012 saw an anticipated potential expansion of this division after it has successfully secured an award from Syarikat Prasarana Negara Berhad (SPNB) in September 2012 to jointly develop a piece of land belonging to SPNB measuring 49,776 square metres surrounding the Station 2 LRT, Ara Damansara, Subang. A newly incorporated company, ADS Projek Sdn Bhd, which is wholly owned by TRC Synergy Berhad will undertake this development. The development will comprise a mixed development of service apartments, offices, hotel, malls, retail outlets, SOHO’s, and is fully integrated with the LRT station, and is expected to generate a Gross Development Value (GDV) of RM687 million with a span of 5 years development period. The project will also provide opportunities for the division to venture into property management, managing the property together with SPNB. Preliminary works are underway and it is expected that construction and sales to commence by the first quarter of 2014. Moving forward, this project is expected to contribute positively to the profitability of this division in the near future.

03TRC SYNERGY BERHAD Annual Report 2012

manufacturinG

Contribution from this division continue to remain insignificant. We do not foresee this division to have a significant impact on the group’s revenue and profitability in the immediate future.

enerGY

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

ecOnOmic OutLOOk

Under the Economic Report 2012/2013, the government has envisaged the construction sector to expand by 11.2% with all subsectors registering steady growth. The sector is expected to benefit from the acceleration of ongoing construction activities, particularly the ETP and RP2 construction – related projects, of significances, exploration activities in the O&G industries and major projects such as the electrified double-tracking between Ipoh – Padang Besar, LDT2 Jabur – Kuala Terengganu, MRT and the River of Life are expected to drive the growth of the civil engineering subsector.

ChAirmAn’s stAtement (COnt’D)

The group is expected to benefit from the robust future growth in the construction sector.

dividend

After a lengthy deliberation by the Board, taking into consideration the group’s year 2012 performance and the resources required for the new and existing projects, the Board has recommended a first and final gross dividend of 0.48 sen less income tax of 25% for the 2012 financial year amounting to RM1,714,575. This amount is in line with the company’s dividend policy of at least 25% of the profit after tax.

acknOwLedGement and appreciatiOn

I would like to take this opportunity to thank our management and staff for their hard work, dedication and commitment to the group. Our shareholders, customers, bankers, suppliers and partners play an extremely vital role in our business and I would like to thank them for their continuous support. Together we shall launch the group to the next level of growth and development.

Dato’ Sri Sufri B. Mhd. ZinExecutive Chairman

08 09 10 11 12 08 09 10 11 12 08 09 10 11 12 08 09 10 11 12

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266,

867

286,

343

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575

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229 1.

51

1.40

1.56

0.66

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REVENUE(RM’000)

SHAREHOLDERS’SFUND(RM’000)

NET TANGIBLE ASSETS PER SHARE(RM)

NOMINAL VALUE(RM)

year 2008 - 2010 RM1.00year 2011 - 2012 RM0.50

PROFIT/(LOSS) BEFORE TAXATION(RM’000)


COrpOrAte inFOrmAtiOn

BOard Of directOrs

Dato’ Sri Sufri Bin Hj MoHD Zin(Executive Chairman)

Dato’ aBDul aZiZ Bin MoHaMaD(Executive Director)

General (r) tan Sri MoHD SHaHroM Bin Dato’ Hj norDin(Senior Independent Non-Executive Director)

cOmpanY secretarYAbdul Aziz bin Mohamed(LS 007370)

reGistered Office /principaL pLace Of BusinessTRC Business CentreJalan Andaman Utama68000 Ampang, SelangorTel No. : 603-41038000Fax No. : 603-41087016e-mail : [email protected]

Branch OfficeLot 3626, Block 16, KCLDTaman Timberland, Lorong Rock 293200 Kuching, Sarawak

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

weBsitewww.trc.com.my

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

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

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

sOLicitOrsMessrs Noorzilan & PartnersMessrs C.C. Choo, Hazila & TeongMessrs Zain Megat & MuradMessrs Adam Bachek & Associates

stOck exchanGe ListinGBursa Malaysia Securities BerhadMain Market (Construction)Stock No.s : 5054 5054 WA 5054 WB

noor Zilan Bin MoHaMeD noor(Independent Non-Executive Director)

aBDul raHMan Bin ali(Independent Non-Executive Director)


1

2

note:-

Save as disclosed,

1. none of the Directors have:-

i. any family relationship with any director and/or substantial shareholders of the Company;

ii. any conflict of interest with the Company; and

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

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

prOFile OF DireCtOrs

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

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

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

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

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

During the Financial year ended 31 December 2012 he attended all five Board of Directors Meetings.

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

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

YBhg Dato’ Abdul Aziz attended all five Board of Directors Meetings held during the financial year ended 31 December 2012. He does not have any personal interest in any business arrangement involving the Company.

datO’ sri sufri Bin hj mOhd ZinExecutive Chairman, 57 years of age – Malaysian

datO’ aBduL aZiZ Bin mOhamadExecutive Director, 54 years of age – Malaysian

1.

2.


3

4

5

prOFile OF DireCtOrs (COnt’D)

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

General (R) Tan Sri Mohd Shahrom is the Chairman to the Audit Committee and the Senior Independent Non Executive Director of the Company. During the financial year ended 31 December 2012 he attended four out of five Board of Directors Meetings held.

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

Noor Zilan is a member of the Audit Committee and the Chairman to the Nomination Committee and Remuneration Committee. He attended all five Board of Directors Meetings held during the financial year ended 31 December 2012.

Abdul Rahman Bin Ali was appointed as a Director of the Company on 13 May 2002. He graduated from University of Malaya in 1982 with a Degree in Accounting. He is currently a Chartered Accountant of the Malaysian Institute of Accountants. Upon graduated, he started his training with financial institution for a number of years before joining public accountancy practice. In 1994, he set up his own accounting firm by the name A. Rahman & Associates and later become a partner of AKN Arif in 1996. Abdul Rahman is a member of the Audit Committee, Nomination Committee and Remuneration Committee. He attended all five Board of Directors Meetings held during the financial year ended 31 December 2012.

GeneraL (r) tan sri mOhd shahrOm Bin datO’ hj nOrdinSenior Independent, Non-Executive Director, 65 years of age – Malaysian

nOOr ZiLan Bin mOhamed nOOrIndependent, Non–Executive Director, 53 years of age – Malaysian

aBduL rahman Bin aLiIndependent, Non–Executive Director, 56 years of age – Malaysian

3.

4.

5.


Trans resources corporaTion sdn Bhd(120265 P)

Trc energy sdn Bhd (616448 K)

Trc infra sdn Bhd(645178 P)

Trc (ausT) pTy LTd(137500611)

Trc inTernaTionaL pTe LTd (LL04510)

swan synergy deveLopmenTs pTy LTd(151511018)

ads proJeK sdn Bhd(1021828-M)

Trc (sarawaK) sdn Bhd(621714 W)

Trc concreTe indusTries sdn Bhd (151401 V)

Trc (B) sdn Bhd(RC/00008574)

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

preTTy saLLy hoLdings pTy LTd(137500611)

LipuTan suTera sdn Bhd(637939-H)

peTroBru BuiLd sdn Bhd(RC/00007517)

mae synergy pTy LTd

100%

100%

100%

100%

100%

100%

100%

100%

100%

90%

26%

33.33%

100% 60%

56.7%

Trc Land sdn Bhd(444162 W)

Trc deveLopmenT sdn Bhd(309248 U)

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

deLTa garden LimiTed(11524/08P)

100%

100%

100% 34%

COrpOrAte struCture


STATEMENT ON CORPORATE GOVERNANCE

The Board of Directors of TRC Synergy Berhad (“the Board”) recognizes the importance of maintaining a high standard of

corporate governance as set out in the Malaysian Code on Corporate Governance 2012 (“The Code”) and the Main Market

Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) and committed to ensure the same are

practiced throughout the Company and its subsidiaries (“TRC Group” or “the Group”). This has been accepted by the Board

as the Group’s key responsibilities in order to protect and enhance long term shareholder value and the fi nancial performance

of TRC group. The Board will continuously evaluate the Group’s corporate governance practices and procedures, and where

appropriate will adopt and implement all the eight (8) Principles as enshrined in the Code (“the Principles”).

The Board is pleased to disclose below how the Group has applied the Principles and the extent to which it has complied with

the recommendations set out in the Code.

DIRECTORS

The Board of Directors (“the Board”)

The Company is led and governed by the Board of Directors headed by the Executive Chairman who has detailed knowledge

and vast experience in the construction industry. The rest of the Board members possess a wide range of skill and experiences

ranging from construction, fi nance, legal and general management discipline suitable for managing the Group businesses. A

brief profi le of each Director is presented in this Annual Report on pages 6 and 7.

The Board has overall responsibility in the stewardship of the Group’s direction and its performance inclusive of corporate

governance, strategic planning and maintaining effective control over fi nancial and operational matters. In this regard the Board

is guided by the Board Charter which sets out a list of specifi c functions that are reserved for the Board.

Board Composition and Balance

The Board currently consists of fi ve (5) members comprising two (2) Executive Directors and three (3) Independent Non-

Executive Directors. The Company fulfi lls the prescribed requirement of having at least one-third (1/3) of the Board Members

as Independent Non-Executive Directors as stated in Paragraph 15.02 of the Listing Requirements of Bursa Malaysia.

The Independent Non-Executive Directors provide broad, unbiased and balanced assessment on proposals initiated by the

Executive Directors and the senior management of the Group. They also contribute by the exercise of independent judgment

and objective participation in the proceeding and decision making process of the Board. Their differing backgrounds collectively

bring with them extensive experience augur well with this process.

In view of this composition, the Board of the view that the present members of the Board are considered suffi cient in addressing

the issues affecting the Group.

Board Meeting

Board meetings are scheduled in advance and the Board agreed to meet at least four (4) times in a year and additional

meetings are convened as and when necessary. During the fi nancial year ended 31 December 2012, the Board met fi ve (5)

times and the attendance record for each Director is as follows:-

Name No. of Meeting Attended % of Attendance

Dato’ Sri Sufri Bin Hj Mohd Zin 5/5 100

Dato’ Abdul Aziz Bin Mohamad 5/5 100

Jen (B) Tan Sri Mohd Shahrom Bin Dato’ Hj Nordin 4/5 80

Noor Zilan Bin Mohamed Noor 5/5 100

Abdul Rahman Bin Ali 5/5 100

In the meetings, the Board deliberated and considered matters relating to the fi nancial performance, key business and

operational issues and business plans of the Group.

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

MMLR.

09TRC SYNERGY BERHAD

Annual Report 2012

STATEMENT ON CORPORATE GOVERNANCE (CONT’D)

DIRECTORS (CONT’D)

Board Meeting (cont’d)

Prior to the Board meetings, the agenda for each meeting together with detailed Board papers as well as minutes of previous

meetings are circulated to all Board members for their prior review in advance of the meeting dates. The Directors will have

suffi cient time to deliberate on the issues to be raised at the Board Meetings.

The meetings are chaired by the Executive Chairman while the Executive Director leads the presentation on the Board papers

and reports. Senior management staffs as well as External and Internal Auditors and independent advisors may be invited to

attend the meetings and brief the Board members on relevant agenda that are tabled to the Board to enable them to make

fair and well-informed decisions.

The Company Secretary attends all Board meetings and the meetings of the committees appointed by the Board. He will

advise the Board and the committee members on procedures of the meeting and other relevant rules and regulations.

All proceedings of the Board are minuted and signed by the Chairman of the meetings in accordance with the provision of

Section 156 of the Companies Act 1965.

Besides attending Board meetings, the Directors also would have special sessions with the Group’s operation unit whereby

the necessary briefi ng and updates on issues and progress of the projects undertaken by the Group will be discussed and

disseminated.

Supply of Information to the Board

In performing their duties, all Directors have, unrestricted and timely access to all information pertaining the Group’s business

and affairs whether as a full Board or in their individual capacity in carrying out their duties and responsibilities effectively. The

Chairman undertakes primary responsibility for organizing information to be distributed to the Board. They also have direct

access to the advice and services of the Company Secretary, senior management, internal and external auditors and other

independent professional at all times and at the Company’s expense.

Appointment and Re-election of the Board

The Company has a formal and transparent procedure for the appointment of new Directors and re-election of Directors.

These aspects are spelt out clearly in the Company’s Articles of Association. Besides, The Nomination Committee reviews and

recommends any proposed appointments before the same are approved by the Board.

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

appointment.

As for the re-election of Directors, the Articles of Association of the Company provides at least one-third (1/3) of the Directors

are required to retire by rotation at each fi nancial year and are eligible to offer themselves for re-election at the Annual General

Meeting. All Directors shall retire from offi ce once at least in each three (3) years.

At the last Annual General Meeting held on 27 June 2012, Dato Sri Sufri bin Hj Mohd Zin retired and was elected to the Board.

At this AGM, two (2) Directors namely Dato’ Abdul Aziz bin Mohamad and Jen (B) Tan Sri Mohd Shahrom bin Dato’ Hj Nordin

shall retire from offi ce and be eligible for re-election pursuant to Article 84 of the Company’s Article of Association.

Directors’ Training

All Directors have successfully attended the Mandatory Accreditation Programme prescribed by Bursa Malaysia.

The Board believes that continuous training is essential to the Board members to ensure that they are updated with appropriate

skills and knowledge to enable them to discharge their duties effectively. Therefore, they are encouraged to attend training

programmes to supplement their knowledge in various fi elds relevant to them.

10 TRC SYNERGY BERHAD

Annual Report 2012



Directors’ Training (cont’d)

During the fi nancial year ended 31 December 2012, the Directors have attended among others the following training

programmes and seminars:-

Directors Training Programme1 Dato’ Sri Sufri Bin Hj Mohd Zin i) Seminar in Transforming the Transportation Sector – CIDB, 8th Construction

Review & Outlook

ii) Seminar in Infrastructure Investment Through Public Private Partnership

iii) Seminar Working Committee Meeting – CIDB International Construction

Week (ICW)

iv) Understanding Financial Statement – Use of Healthy Scepticism

2 Dato’ Abdul Aziz Bin Mohamad Nil

3 General (R) Tan Sri Mohd Shahrom

Bin Dato’ Hj Nordin

Decision Making Process Seminar 2012

4 Noor Zilan Bin Mohamed Noor Nil

5 Abdul Rahman Bin Ali i) Seminar Juruaudit Koperasi – Memperkasakan Kualiti Pengauditan Koperasi

ii) Workshop on tax planning on individuals’ income from employment and

statutory requirement by employer

iii) Bengkel Cukai : Cukai Pendapatan Koperasi

iv) Seminar on MFRS for SMPs

v) Optomising Corporate tax planning strategies by MIA

vi) Seminar Bajet 2013

vii) The MIA Conference 2012

viii) Seminar on Enhancing to face new challenges in public sector auditing

Dato’ Abdul Aziz Bin Mohamad and Noor Zilan bin Mohamed Noor did not attend any training programme during the year due

to work commitments.

Apart from that, frequent visit to the operational projects sites and occasional trips to meet overseas suppliers and consultants

and active participation on the relevant association have equipped the Executive Directors with the latest information and

technologies in the industry.

Board Committees

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

and functions effectivelly:-

i) Audit Committee

The details of the Audit Committee are mentioned in the Audit Committee Report on page 21 of this Annual Report.

ii) Nominating Committee

The Company has established its Nominating Committee in May 2002 which currently comprises of two (2) members all

of whom are Independent Non-Executive Directors. The members of the Nominating Committee are as follows:-

a) Noor Zilan Bin Mohamed Noor

b) Abdul Rahman Bin Ali

During the year 2012, the Committee has convened one (1) meeting to review the performance of the Board for the year

2012.

The Nominating Committee which has been appointed by the Board, is primarily empowered by its terms of reference in

carrying out the function amongst others, to review annually the required mixed of skills, experience and other qualities

of the Directors and to recommend new appointments, if any, to the Board. The Committee is also set for assessing the

effectiveness and continually seek ways to upgrade the effectiveness of the Board as a whole, the committees of the

Board and the contribution of each existing individual Director.


Annual Report 2012


Board Committees (cont’d)

iii) Remuneration Committee

The Company has also established the Remuneration Committee in May 2002 which currently comprises of two (2)

members, all of whom are Independent Non-Executive Directors. The members of the Remuneration Committee are as

follows:-

a) Noor Zilan Bin Mohamed Noor

b) Abdul Rahman Bin Ali

The Committee is primarily responsible in the development, review and recommendation of fair remuneration package

for Executive Directors in all its forms, drawing from outside advice as necessary.

The duties of the Remuneration Committee are among others, to review the remuneration package of each individual

Executive Directors in order to attract and retain competent executives who can add value to the Company. The

determination of remuneration packages of non-executive directors, should be a matter of the Board. The individuals

concerned should abstain from discussion of their own remuneration.

iv) Employees’ and Directors’ Share Option Scheme (ESOS) Committee

The Company has established ESOS Committee pursuant to ESOS By-Laws approved by the Shareholders at the

Extraordinary General Meeting in April 2004. The Committee which comprises of the following members shall administer

the ESOS Scheme in such manner as it shall in its discretion deem fi t and within such powers and duties as are conferred

upon it by the Board pursuant to the provisions of Bye-Laws:-

a) Dato’ Sri Sufri Bin Hj Mohd Zin

b) Dato’ Abdul Aziz Bin Mohamad

c) Dato’ Richard Khoo Teng San

d) Mr Yeoh Sook Keng

The statement by the Audit Committee in relation to the allocation of the ESOS Scheme is reported on page 24 of this

Annual Report.

DIRECTORS’ REMUNERATION

The Board acknowledges that the level or remuneration of the Directors and senior management should refl ect the level of

responsibility and contributions toward the successful and effi cient running of the Group’s activities.

To assist the Board in the discharge of its duties, the Board has established a Remuneration Committee. The affairs of the

Committee inclusive of its duties and responsibilities are spelt out on page 12 if this Annual Report.

Disclosure

The aggregate remuneration of the Directors received and receivable from the Company and its subsidiaries during the fi nancial

year ended 31 December 2012 are as follows:-

Category Fees (RM) Salaries (RM) EPF & SOCSO (RM) BonusExecutive Directors - 2,145,000.00 347,120.00 480,000.00

Non-Executive Director 84,000.00 - - -

Total 84,000.00 2,145,000.00 347,120.00 480,000.00



Annual Report 2012

DIRECTORS’ REMUNERATION (CONT’D)

Disclosure (cont’d)

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

Range of remuneration Number of Executive Directors Number of Non-Executive DirectorsLess than RM 50,000 - 3

RM50,001 – RM1,050,000* - -

RM1,050,001 – RM1,100,000 1 -

RM1,150,001 - RM1,850,000* - -

RM1,850,001 – RM1,900,000 1 -

* No Directors within this range of remuneration.

RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS

COMMUNICATION

Effective Communication

The Board is fully aware that the key element of good corporate governance is the effective communication and proper

dissemination of all important issues and major development concerning the Company to all shareholders and investors.

Effective communication channels with the Company’s shareholders, investors and the public are maintained through the

dissemination of press releases, timely announcement and disclosures made to Bursa Malaysia.

During the fi nancial year ended 31 December 2012, the Company organized a number of meetings and briefi ngs with fi nancial

analysts to establish better understanding of the Company’s objective and performance and to convey other information that

may affect shareholders interest.

The Company also has a cordial relationship with reporters who have been playing a very effective role in conveying the Group’s

information to the public, shareholders and investors. Press releases are also occasionally organized to clarify on certain

matters related to the Company and its operating unit.

Besides, shareholders, investors and members of the public may also obtain updated information on the Group by accessing

to the Company’s website at www.trc.com.my.

General Meeting

The Company’s Annual general Meeting (“AGM”) remains the primary channel of communication with the Company’s

shareholders in particular private investors. At each AGM and Extraordinary General Meeting shareholders are encouraged

and given suffi cient time and opportunity to participate in the proceedings, to raise questions and participate in discussions

pertaining the operation and fi nancial aspects of the Group. They may seek clarifi cations on the Group’s performance, major

development as well as on the resolutions being proposed. All Board members, senior management as well as the Company’s

external auditors are available to respond to shareholders relevant questions raised at the meeting.

A press conference is held after AGM where the Executive Chairman with other Directors as well as the Senior Management

of the Company will answer questions posed by the media on various issues convening the Group.

Annual Report

A key channel of communication used to provide the Company’s shareholders and investors with information which include

its business, fi nancials and other key activities is the Annual Report. The Company’s Annual Report, the content of which are

prescribed by the MMLR surely will provide its shareholders and investors with the overview of the Company’s performance

and will be the basis of further communication and dialogue between the Company and the shareholders during the AGM.



Annual Report 2012

ACCOUNTABILITY AND AUDIT

Financial Reporting

In presenting the Company’s fi nancial statements and quarterly results to shareholders and other interested parties, the Board

aims to present a balanced and understandable assessment of the Group’s fi nancial position and prospects.

The Board is responsible for ensuring that the fi nancial statements give a true and fair view of the fi nancial position of the

Group and of the Company as at the accounting period. In preparing the fi nancial statements, the Directors have ensured

that fi nancial statements have been drawn up in accordance with Financial Reporting Standard and the Companies Act 1965.

The Audit Committee assists the Board by reviewing the Group’s annual fi nancial statements and quarterly results to ensure

completeness, accuracy and adequacy prior to release to Bursa Malaysia and Securities Commission.

The Statement explaining the Directors’ responsibilities for preparing the annual audited fi nancial statements pursuant to

paragraph 15.27(a) of the Listing Requirements is set out on page 17 of the Annual Report.

Internal Control.

The Board acknowledges and placed strong emphasis in maintaining a sound system of internal control which provides

reasonable assurance of effective and effi cient operations and compliance with regulations as well as with internal procedures

and guidelines. Details of the Group’s internal control system is presented in the Statement on Risk Management and Internal

Control and Audit Committee Report set out on pages 18 to 20 and pages 21 to 24 respectively.

Relationship with External Auditors

Through the Audit Committee, the Board has established a transparent and appropriate relationship with the Group’s internal

and external auditors in seeking their advice and towards ensuring compliance with the applicable Approved Accounting

Standards. The external auditors are invited to attend the Audit Committee meeting and to the Board meeting on a need basis

as and when deemed appropriate.

Corporate Social Responsibility (“CSR”)

The Board recognizes the importance of the CSR the framework of which has been launched by the Bursa Malaysia on 15

September 2006. The move by Bursa Malaysia is seems to be in line with the decent intention of the Government to inculcate

the culture of corporate social responsibility among the public listed companies. Therefore, the Board has agreed to beef up

the Company’s social activities with an intention to share the company’s profi tability with the public in forms of contribution on

social responsibility activities.

During the fi nancial year ended 31 December 2012, the Group continued to support worthy causes which involve the society,

welfare and charitable organization as well the Group’s staffs by donating various amounts to various parties and bodies within

the country. These include contributions to the welfare bureau fund of Persatuan Kontraktor Melayu Malaysia, Persatuan

Kebajikan Keluarga Bekas Polis dan Tentera (POLTERA), Majlis Paralimpik Malaysia and few other contributions and donations.

As a continuous effort to strive for better, convenient and conducive working environment for the staffs, the Company provided

free daily meals for its headquarter staffs. This practice has been ongoing since September 2009.

During the year under review, the Group had also organized Safety Day programme at Putrajaya and Bangunan Dayabumi

project sites. Among the objectives of the programme was to enhance safety awareness and to promote safety culture among

the workers.

In addition to that, the Company also offered opportunity to undergraduate and diploma students of various public and private

university and colleges especially those who are from construction related courses to undergo practical training at the Group

headquarters and site offi ces with the prospect of employment with the Group upon completion of their studies. During 2012

twenty seven practical trainees had been attached to the Group and RM26,000 had been paid to them in form of allowances.



Annual Report 2012

ACCOUNTABILITY AND AUDIT (CONT’D)

Corporate Social Responsibility (“CSR”) (cont’d)

In order to provide better welfare to the staffs, the Company had incorporated a foundation which is known as Yayasan TRC.

The primary objective of Yayasan TRC is to encourage TRC Group’s employees where education is concerned to continuously

upgrade themselves and to give better educational opportunity to their family members as well as to assist them in form of

monetary such as donation, scholarship and/or educational tools and equipment to their eligible family members. Besides

providing immediate assistance and relief to the employees who suffer losses from any sort of misfortune, the Yayasan would

also assist members of society particularly those from areas in which the TRC Group has business activities, in form of

providing contribution and donation to educational institutions, orphanage, local association/clubs and other suitable bodies

in upholding their activities and objectives.

STATEMENT OF COMPLIANCE WITH THE EIGHT PRINCIPLES OF THE

CODE ON CORPORATE GOVERNANCE 2012 (THE CODE)

Save as disclosed below, the group has substantially applied all the eight (8) Principles of the Code:-

Principles of the Code Details Explanation

Recommendation 3.2

and 3.3

The tenure of an independent directors

should not exceed 9 years. The Board

is recommended to justify and seek

shareholders approval in the event it

retains independent directors, persons

who have served in that capacity for

more than 9 years.

All independent directors of the Company have served

as independent directors for more than 9 years.

The Company agreed to retain them in that capacity

due to the following reasons:-

i. They are independent of management and free from

any business or other kind of relationship which

could interfere with the exercise of independent

judgment or the ability to act in the best interest of

the Company;

ii. They do not have direct or indirect interest in the

Company and its subsidiaries; and

iii. They are fully complied with the criteria as

independent directors prescribed under the MMLR.

Recommendation 3.4 The position of Chairman and CEO

should be held by different individuals

and the Chairman must be a Non-

Executive members of the Board.

The Company is headed by an Executive Chairman

and therefore, the roles of the Chairman and the Chief

Executive Offi cer are not separate. The Board is of

the opinion that the check and balance of power is

undertaken by the strong presence of Independent

Non-Executive Directors in the Board whereby majority

of them are Independent Directors. Furthermore,

the Chairman encourages all Directors to participate

actively in all deliberation of issues that concern the

Group.

Hence, the Board maintains the view that this combined

arrangement will not hamper the Board from making

fair decisions for the best interest of the Group.



Annual Report 2012

ADDITIONAL COMPLIANCE INFORMATION

In compliance with the MMLR, the following information is provided:-

Utilization of Proceeds

For the fi nancial year ended 31 December 2012, there was no proceed raised from any exercise.

Share Buybacks

The Company has not undertaken any share buyback exercise during the fi nancial year ended 31 December 2012.

Option, Warrants or Convertible Securities.

During the fi nancial year ended 31 December 2012, the Company issued 5,903,280 ordinary shares of RM0.50 each pursuant

to the exercise of options under the Employees Share Option Scheme which was implemented in June 2004.

2,603,849 ordinary shares of RM0.50 each were issued by virtue of the conversion of Irredeemable Convertible Unsecured

Loan Stocks 2007/2012 (ICULS). Pursuant to the Trust Deed dated 15 November 2006, the ICULS had attained its maturity

on 20 February 2012.

1,152 ordinary shares of RM0.50 each were issued through the exercise of Warrant A at an exercise price of RM0.50 each.

921 ordinary shares of RM0.50 each were issued through the exercise of Warrant B at an exercise price of RM0.61 each.

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

The Company has not sponsored any ADR or GDR Programme.

Sanctions and / or Penalties

There were no sanction and/or penalty imposed on the Company and its subsidiaries, Directors or Management by the relevant

regulatory bodies during the fi nancial year ended 31 December 2012.

Non-Audit Fees

The non-audit fees paid to external auditors amounting to RM7,000.00 for the fi nancial year ended 31 December 2012.

Variation of Results

There was no material variation between the audited results for the fi nancial year ended 31 December 2012 with the unaudited

results announced.

Profit Guarantee

There was no profi t guarantee given by the Company during the fi nancial year ended 31 December 2012.

Material Contracts

There was no material contracts between the Company and its subsidiaries involving Directors and major shareholders’

interests during the fi nancial year ended 31 December 2012.

Recurrent Related Party Transaction

The Company did not enter into any recurrent related party transaction which requires the shareholders’ mandate during the

fi nancial year ended 31 December 2012.



Annual Report 2012

ADDITIONAL COMPLIANCE INFORMATION (CONT’D)

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

Further to the statement by the Audit Committee in relation to the allocation of share option scheme as reported in the Audit

Committee Report, explained below are the additional information on ESOS.

The Company only has one share option scheme during the fi nancial year ended 31 December 2012, the details of which are

as follows:-

i) Total number of ESOS granted 15,981,000

ii) Total number of ESOS exercised before adjustment due to share split and bonus issue exercise

(“Adjustment”)

9,273,000

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

In consequences to the share split and bonus issue exercise which was completed in July 2011, the employees’ and directors’

entitlements had been adjusted pursuant to the ESOS By-Laws. Highlighted below are the information on ESOS after

Adjustment.

i) Total number of ESOS after Adjustment 16,099,200

ii) Total number of ESOS exercised after Adjustment (As at 26 April 2013) 6,184,280

iii) Total outstanding ESOS after Adjustment (As at 26 April 2013) 9,914,920

ESOS granted to Directors

i) Total number of ESOS granted to Directors 1,750,000

ii) Total number of ESOS exercised by Directors before Adjustment 500,000

iii) Balance number of ESOS held by Directors after Adjustment 3,000,000

iv) Total number of ESOS exercised by Directors after Adjustment (As at 26 April 2013) 1,840,000

v) Outstanding ESOS yet to be exercise by the Directors after Adjustment (As at 26 April 2013) 1,160,000

ESOS granted to Directors and Senior Management

Pursuant to the Company’s ESOS By-Laws, not more than fi fty percent (50%) of the Company’s shares available under the

scheme shall be allocated to Directors and senior management. As at 26 April 2013, the Company has granted 32.9% of

ESOS to its Directors and senior management staffs.

STATEMENT OF DIRECTORS’ RESPONSIBILITY IN RELATION TO THE

FINANCIAL STATEMENTS

The Board is responsible to ensure that the fi nancial statements are prepared in accordance with the provision of the Companies

Act, 1965 and applicable approved accounting standards in Malaysia so as to ensure a true and fair view of the state of affairs

of the Group and the Company as at the end of each fi nancial year and of their results and their cash fl ows for that fi nancial

year then ended. The Board is also responsible to maintain accounting records that disclose with reasonable accuracy the

fi nancial position of the Group and the Company, and which enable them to ensure that the fi nancial statements comply with

the Companies Act, 1965.

The Directors have general responsibilities for taking such steps that are reasonably available to them to safeguard the assets

of the Group, and to prevent and detect fraud and other irregularities.

The Directors are satisfi ed that in preparing the fi nancial statements of the Group for the fi nancial year ended 31 December

2012, the Group has adopted appropriate accounting policies and applied them prudently and consistently. They are also

satisfi ed that reasonable and prudent judgments and estimates were made and all applicable Approved Accounting Standards

in Malaysia have been followed accordingly.



Annual Report 2012

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

BOARD RESPONSIBILITY

The Board of Directors of the Company (“the Board”) is responsible for maintaining the effectiveness and adequacy of the

Company’s Group (“the Group”) system of Internal Control and risk management which involved reviewing and monitoring the

adequacy and integrity of these systems. The internal control system involves the core business and its key management,

including the Board, and is designed to safeguard the Group’s business objectives and to manage the risk to which it is

exposed. The system of Internal Control aims to :-

i) safeguard shareholders’ interest and the assets of the Group;

ii) ensure that proper documentation and accounting records are maintained; and

iii) ensure that the documentation and fi nancial information generated by the system is reliable.

The Board is fully aware that this system, by its nature, can only provide reasonable and not absolute assurance against the risk

of material misstatement of fi nancial information and records or against fi nancial losses due to fraud and error. These systems

are designed to manage and mitigate, rather than eliminate, the risk of failure to achieve business objectives of the Group.

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

RISK MANAGEMENT

The Board views risk management as an important process in the pursuit of the group’s corporate governance agenda. It is

an ongoing process which involves different levels of management to identify, evaluate, monitor and manage and mitigate the

risks that may affect the achievement of its business and corporate objectives.

The Group has in place an on-going process for identifying, evaluating, monitoring and managing the signifi cant risks affecting

the achievement of its business objectives. This is an on-going process, subject to regular review by the Board, and accords

with the “Statement on Internal Control: Guidance for Directors of Public Listed Companies”.

The Group adopts a decentralised approach to risk management by encouraging participation of all employees in such a manner

that the employees take ownership and responsibility for risks at their respective levels. The process of risk management and

policy implementation is overseen by the senior management and report to the Board through the Audit Committee. The risk

management framework is also embodied in the Quality Policy in accordance with ISO 9001 : 2008 practised by a wholly-

owned subsidiary of the Company.

INTERNAL CONTROL

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

Internal Audit Function

The Board is fully aware of the importance of the internal audit function and has established the Internal Audit Department

for the Group in 2004. The main objective of this department is to review the key business processes and controls and to

assists the Audit Committee in the discharge of its duties and responsibilities. Its role is to provide independent and objective

reports on the organization, management, accounting and other records, accounting policies and internal controls to the Audit

Committee and the Board. As required by the Main Market Listing Requirements, the Internal Auditors report directly to the

Audit Committee and is independent of the activities its audits. They provide periodic reports to the Audit Committee on the

outcome of the audit works conducted by them which would be reviewed and evaluated by the Audit Committee.

During the fi nancial year ending 31 December 2012, the internal audit function of the Group is carried out as per the annual

audit plan approved by the Audit Committee. The internal audit process provides an assessment of the adequacy, effi ciency

and effectiveness of the Group’s existing internal control system and recommends improvements in control. The results of the

audit reviews are reported periodically to the Audit Committee. In addition, the internal auditors also carried out follow-up visits

to ensure recommendations for improving control systems are implemented.

Throughout the earlier-mentioned fi nancial year, the Internal Audit Department has undertaken several independent audit

assignments pursuant the approved audit plan. The details of the internal audit activities are reported on page 23 of this Annual

report.


Annual Report 2012

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONT’D)

INTERNAL CONTROL (CONT’D)

Internal Audit Function (cont’d)

None of the weaknesses or issues identifi ed during the review for the fi nancial year ended 31 December 2012 has resulted in

non-compliance with any relevant policies or procedures, listing requirements and other recommended industry practices that

require disclosure in the Company’s Annual Report.

The presence of the internal audit function has provided the necessary level of assurance as to the effectiveness and credibility

of the Group’s system of internal control.

Quality Policy

The construction arm of the Group has a clear and well documented Quality Policy in accordance with ISO 9001 : 2008. This

policy and the related procedures are communicated to the respective staff members. Amongst the salient features of the

Quality Policy are as follows:-

i) Internal Quality Audits are conducted at planned intervals to determine whether the Quality Management System is

effectively implemented and maintained and conforms to the established system requirements of Internal Standard, ISO

9001:2008.

ii) On an annual basis, an overall Internal Quality Audit Plan is devised encompassing every departments and projects,

taking into consideration the status and importance of relevant process, areas to be audited as well as results of previous

audits.

iii) Qualifi ed Internal Quality Auditors will be assigned with audit works in accordance with the Internal Quality Audit Plan

where the reports shall be examined and analyzed and reported to the management during Management Review Board

Meeting.

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

issues relating to the business of the Group.

v) The Audit Committee is accessible to the relevant reports produced in relation to the Quality Management and if the need

arise, the matter shall be further discussed in the Board Meeting.

Line of Reporting

Clearly defi ned delegation of responsibilities from the Board to its committees operating units, including authorisation levels

for all aspects of the business. This also includes detailed job description and specifi cation provided to each employee of the

Group which is further reiterated through a well-defi ned organizational structure.

Dissemination of Information within the Group

Regular and comprehensive information is provided to management covering fi nancial performance and key business

indicators, key operating statistics/ indicators, key business risks, legal, environmental and regulatory matters. Key matters

affecting the Group are brought to the attention of the Audit Committee and are reported to the Board on a regular basis.

Detail Budgeting Process

A detailed budgeting process has been implemented where operating units prepare budgets for their project which will be

deliberated in the management meeting. A monthly monitoring of results against budget, with major variances being explained

and deliberated. If necessary, management action and follow up would be initiated.

Audit Committee

The Audit Committee, on behalf of the Board, regularly reviews and holds discussions with the management on the matters

relating to internal control, the external auditors and the management.

The Report on the Audit Committee set out on pages 21 to 24 of this Annual Report contains further details on the activities

undertaken by the Audit Committee in 2012.


Annual Report 2012

INTERNAL CONTROL (CONT’D)

Board

The Board holds regular discussions with the Audit Committee, management and external auditors and reads their reports on

matters relating to internal controls and deliberates their recommendations for implementation.

The Directors have taken the necessary steps, as are reasonably open to them, to ensure that adequate systems of internal

controls are in place to adequately safeguard the assets of the Group through the prevention and detection of fraud and other

irregularities and material misstatements in the fi nancial statements.

The Directors believe that the system of internal control is operating effectively and considered adequate to safeguard the

Group business operations, and that the risks taken are at an acceptable level within the context of the business environment

of the Group.

The Board is not aware of signifi cant weaknesses in the internal control system that will substantially affect the business

operations which could result in material losses to the Group.

Pursuant to paragraph 15.23 of the Main Market Listing Requirements the external auditors have reviewed this statement for

inclusion in the Annual Report.

This statement is made in accordance with the resolution given by the Board of Directors on 22 April 2013.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONT’D)


Annual Report 2012

AUDIT COMMITTEE REPORT

The Board of Directors of TRC Synergy Berhad is pleased to present the report of the Audit Committee for the fi nancial year

ended 31 December 2012.

1. MEMBERS OF THE AUDIT COMMITTEE

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

Directors.

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

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

ii) Abdul Rahman Bin Ali (Independent Non-Executive Director)

(Member of the Malaysian Institute of Accountants)

Secretary : Abdul Aziz Bin Mohamed (Company Secretary)

2. TERMS OF REFERENCE

i. Composition

The Board of Directors shall elect an Audit Committee from amongst themselves (pursuant to a resolution of the

Board of Directors) comprising of not less than three (3) members all of them must be Non-Executive Directors with

a majority of them being Independent Directors.

The members of the Audit Committee shall elect a Chairman from amongst themselves. All members of the

Audit Committee, including the Chairman, will hold offi ce only so long as they serve as Directors of the Company.

Should any member of the Audit Committee cease to be a Director of the Company, his membership in the Audit

Committee would cease forthwith.

If the members of the Audit Committee for any reason be reduced to below three (3), the Board of Directors shall

within three (3) months of that event, appoint such number of the new members as may be required to make up

the minimum number of three (3) members.

ii. Objectives

The primary objectives of the Audit Committee are:

a. To provide assistance to the Board in fulfi lling its fi duciary responsibilities particularly relating to business

ethics, policies and practices and fi nancial management and control.

b. To provide greater emphasis on the audit functions by increasing the objectivity and independence of external

and internal auditors and providing a forum for discussion that is independent of the management.

c. To maintain through regularly scheduled meetings a direct line of communication between the Board and the

external auditors, internal auditors and fi nancial management.


Annual Report 2012

AUDIT COMMITTEE REPORT (CONT’D)

2. TERMS OF REFERENCE (CONT’D)

iii. Duties and Responsibilities

The duties and responsibilities of the Audit Committee shall be:

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

b. To discuss with the external auditor before the audit commences the nature and scope of the audit, and

ensure co-ordination where more than one audit fi rm is involved.

c. To review the quarterly results and year end fi nancial statements before submission to the board, focusing

particularly on:

i. any changes in accounting policies and practices

ii. major judgmental areas

iii. signifi cant adjustments resulting from the audit

iv. the going concern assumption

v. compliance with accounting standards

vi. compliance with the stock exchange and legal requirements

d. To discuss problems and reservations arising from the interim and fi nal audits, and any matters the auditor

may wish to discuss (in the absence of management where necessary).

e. To review the internal audit programme, consider the major fi ndings of internal audit investigations and

management’s response, and ensure co-ordination between the internal and external auditors.

f. To keep under review the effectiveness of the internal control systems and in particular review the external

auditor’s management letter and management’s response.

g. to review any related party transactions and confl ict of interest situations that may arise within the Group

including any transactions, procedure or course of conduct that raises questions of management integrity.

h. To carry out such other functions as stipulated in the Bursa Securities Listing Requirements and other

functions as may be agreed to by the Audit Committee and the Board of Directors.

iv. Authority

The Committee is authorised by the Board to investigate any activity within the terms of reference. It is authorized

to seek any information it requires from any employee and all employees are directed to co-operate with any

request made by the Committee.

The Committee is empowered by the Board to retain persons having special competence as necessary to assist

the Committee in fulfi lling its responsibilities.

v. Meeting and Minutes

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

two (2) members.

Minutes of each meeting shall be kept and distributed to each member of the Committee and also to the other

members of the Board. The Committee Chairman shall report on each meeting to the Board.

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


Annual Report 2012


3. SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE

During the fi nancial year ended 31 December 2012, the Audit Committee met fi ve times. The Company Secretary acted

as the secretary for the Committee at all the meetings held. Other Directors and senior management of the Group were

also present at the meeting upon invitation. The Committee also invited the representative of the External Auditors to

attend the meeting whenever necessary so that private session independent of the management could be held. The

details of the attendance of the members of the Audit Committee are as follows:-

No. Audit Committee Attendance1 Noor Zilan bin Mohamed Noor 5/5

2 Abdul Rahman Bin Ali 5/5

3 General (R) Tan Sri Mohd Shahrom Bin Dato’ Hj Nordin 4/5

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

• The quarterly unaudited fi nancial results and the annual audited fi nancial statements of the Company and Group. The

review was to ensure compliance with statutory reporting requirements and appropriate resolution of all accounting

and audit matters requiring signifi cant judgment and where appropriate, made recommendations to the Board.

• The external auditors’ fees and to recommend their reappointment to the Board.

• Measures implemented by management with regard to risk management and internal control.

• The statement of Corporate Governance and Statement on Internal Controls which are prepared in accordance

with the provisions set out under the Malaysian Code on Corporate Governance, the extent of compliance with the

said Code and recommend to the Board action plan to address further compliance matters.

• The annual internal audit plan to ensure adequate scope and comprehensiveness of the activities and coverage

on auditable entities with signifi cant high risk.

• The internal audit reports issued by internal auditors and thereafter discuss the management’s actions taken to

improve the system of internal control and any outstanding matters.

• Reviewed with the external auditors their audit plan and scope of works for the year and the results of the annual

audit, their audit reports and Management Letter together with Management’s responses for the fi ndings of the

external auditors.

4. INTERNAL AUDIT FUNCTION

The Group’s internal audit function is performed in house by its Internal Audit Department. The Internal Audit Department

reports directly to the Audit Committee. The principal objective of the Department is to provide independent and objective

reports on the effectiveness of the system of internal control within the business units and projects of the Group. It also to

ascertain that adequate internal control is maintained to safeguard the assets of the Group and the shareholders interest.

Throughout the fi nancial year, the Internal Audit Department has undertaken several independent audit assignments

in accordance with the approved annual audit plan. Details of the activities performed by the Department during the

fi nancial year are as follow:-

• Examine and reviewed the existing control over all signifi cant Group operation and systems to ascertain reasonable

assurance that the Group’s objective and goals are met effi ciently and economically.

• Carry out operational audit and recommend appropriate control measures for improvement where weaknesses or

defi ciencies are found.

• Reviewed the adequacy of scope, functions, competences and resources of Internal Audit which is necessary to

carried out the audit.

• Reviewed the adequacy of control for procurement and material handling at all project sites.

• Reviewed the effectiveness of management and utilization of fi xed assets within the Group.


Annual Report 2012

4. INTERNAL AUDIT FUNCTION (CONT’D)

• Prepared the annual audit plan for consideration by Audit Committee.

• To complement with the Quality Management System in accordance with ISO 9001:2008.

• Continuous follow up of reviews on recommendation and outstanding issues to ensure both are implemented and

resolved accordingly.

From the internal audit fi ndings, the Internal Audit Department will prepare independent opinion and reports accordingly

to the Audit Committee on risks area, weaknesses identifi ed and the relevant recommendations. All recommendations

shall be reviewed and discussed accordingly and communicated to the management to rectify the identifi ed weaknesses.

The Department also established follow–up reviews to monitor and ensure that the recommendations agreed by the

Audit Committee have been effectively implemented.

Going forward the Internal Audit Department will strengthen its capacity and effi ciency for the better contribution to the

Group pursuant to the Audit Charter and Internal Audit Plan which have been approved by the Audit Committee.

Total cost incurred for the Internal Audit Department for the fi nancial year ended 31 December 2012 was RM169,285.

5. STATEMENT IN RELATION TO THE ALLOCATION OF SHARE OPTION

SCHEME

The Audit Committee noted that the Company had established Share Option Scheme for Employees and Directors (“The

Scheme”) pursuant to the By-Laws which were approved by the shareholders at the Extraordinary General Meeting held

on 30 April 2004. The Scheme shall remain in force for a duration of fi ve (5) years commencing from 22 June 2004 and

could be extended for another fi ve (5) years at the discretion of the ESOS Committee. On 27 August 2008, the ESOS

Committee had approved the extension of the Scheme for another fi ve (5) years commencing from its expiry date of 21

June 2009. Therefore, the Scheme will expire on 20 June 2014.

The salient terms of the Scheme are as follows:-

i) the maximum number of the Company’s new shares to be made available under the Scheme shall not exceed

fi fteen percent (15%) of the issued and paid up capital of the Company;

ii) not more than fi fty percent (50%) of the Company’s shares available under the Scheme shall be allocated to

Directors and senior management;

iii) not more than ten percent (10%) of the Company’s shares available under the Scheme shall be allocated to

individual Director or eligible employees, who either singly or collectively through person connected to them holds

twenty percent (20%) or more of the issued and paid up capital of the Company;

iv) The eligible participants shall include eligible employees and Directors who as at the offer date have satisfi ed the

following criteria :-

a) is a confi rmed employee or appointed director within the Group;

b) has attained at least age of eighteen (18);

c) is employed full time and on the payroll of the Group;

d) is under such category and of such criteria that the option committee may from time to time decide.

v) The Scheme shall remain in force for a duration of fi ve (5) years from the effective date of the launch and could be

extended for another fi ve (5) years at the discretion of the ESOS Committee.

vi) The option price for each share shall be based on the weighted average market price (WAMP) of the Company’s

share traded on the Exchange for the fi ve (5) trading days preceding the date of offer with a discount if any, that

does not exceed ten percent (10%) from the fi ve (5) day of the Company’s shares.

The option under the Scheme was initially offered to the eligible employees and Directors at an offer price of RM1.70

per option share. Subsequently, consequent to the Rights Issue exercise which was completed on 31 January 2007,

the exercise price of the Scheme was adjusted to RM1.47 per option share. The exercise price was further adjusted in

2008 to RM1.23 per option share in consequence to the Bonus Issue Exercise undertaken by the Company which was

completed on 11 April 2008. In 2011, the exercise price was further adjusted to RM0.52 due to share split and Bonus

Issue exercise undertaken by the Company. The staff’s entitlements had also been adjusted due to the earlier-mentioned

exercises.



Annual Report 2012

FINANCIAL STATEMENTS

Directors’ Report

Statement by Directors

Statutory Declaration

Independent Auditors’ Report

Statements of Comprehensive Income

Consolidated Statement of Financial Position

Company Statement of Financial Position

Statement of Changes in Equity - Group

Statement of Changes in Equity - Company

Statements of Cash Flows

Notes to the Financial Statements

26

32

32

33

35

36

37

38

39

40

42

The directors have pleasure in presenting their report together with the audited fi nancial statements of the Group and of the

Company for the fi nancial year ended 31 December 2012.

PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding, general contractors for supplying labour and provision of

corporate, administrative and fi nancial support services to its subsidiaries.

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

There have been no signifi cant changes in the nature of the principal activities during the fi nancial year.

Results Group CompanyRM RM

Profi t net of tax 9,230,722 303,416

Profi t attributable to:

Equity holders of the Company 9,230,722 303,416

Non-controlling interests - -

9,230,722 303,416

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the fi nancial year other than as disclosed in the

fi nancial statements.

In the opinion of the directors, the results of the operations of the Group and of the Company during the fi nancial year were not

substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS

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

RM

In respect of the fi nancial year ended 31 December 2011 as reported in the directors' report of that year:

First and fi nal dividend of 2 sen per share less 25% taxation, on 476,199,403 ordinary shares,

paid on 13 July 2012. 7,142,992

At the forthcoming Annual General Meeting, a provisional dividend in respect of the fi nancial year ended 31 December 2012,

of 0.48 sen per share less 25% taxation on 476,270,903 ordinary shares amounting to a dividend payable of RM1,714,575

(0.36 sen net per ordinary share) will be proposed for shareholders' approval. The fi nancial statements for the current fi nancial

year do not refl ect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as

an appropriation of retained earnings in the fi nancial year ending 31 December 2013.

DIRECTORS' REPORT


Annual Report 2012

DIRECTORS

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

Dato' Sri Sufri Bin Hj Mohd Zin

Dato' Abdul Aziz Bin Mohamad

Gen. (R) Tan Sri Mohd Shahrom Bin Dato' Hj Nordin

Abdul Rahman Bin Ali

Noor Zilan Bin Mohamed Noor

DIRECTORS' BENEFITS

During and at the end of the fi nancial year, no arrangements subsisted to which the Company is a party, with the object or

objects of enabling Directors of the Company to acquire benefi ts by means of the acquisition of shares in or debentures of

the Company or any other body corporate, other than those share options granted pursuant to the Employee Share Options

Scheme.

Since the end of the previous fi nancial year, no director has received or become entitled to receive a benefi t (other than benefi ts

included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 10 of the

fi nancial statements or the fi xed salary of a full time employee) by reason of a contract made by the Company or a related

corporation with any director or with a fi rm of which he is a member, or with a company in which he has a substantial fi nancial

interest, as required by Section 169 (8) of the Companies Act, 1965.

DIRECTORS' INTERESTS

According to the register of directors' shareholdings, the interests of directors in offi ce at the end of the fi nancial year in shares

in the Company and its related corporations during the fi nancial year were as follows:

Number of Ordinary Shares of RM0.50 The Company At 1.1.2012 Acquired Sold At 31.12.2012

Direct Interest:

Dato' Sri Sufri Bin Hj Mohd Zin 45,371,517 1,000,000 - 46,371,517

Dato' Abdul Aziz Bin Mohamad 14,028,681 840,000 - 14,868,681

Deemed Interest:

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

Dato' Abdul Aziz Bin Mohamad# 118,075,200 - - 118,075,200

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

Number of ESOS Options The Company At 1.1.2012 Granted Exercised At 31.12.2012

Dato' Sri Sufri Bin Hj Mohd Zin 2,160,000 - (1,000,000) 1,160,000

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

DIRECTORS' REPORT (CONT’D)


Annual Report 2012

DIRECTORS' INTERESTS (CONT'D)

Number of Warrants A (2007/2017) The Company At 1.1.2012 Granted Exercised At 31.12.2012

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

Dato' Abdul Aziz Bin Mohamad 2,349,014 - - 2,349,014

Number of Warrants B (2011/2016) The Company At 1.1.2012 Granted Exercised At 31.12.2012

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

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

Dato' Sri Sufri Bin Hj Mohd Zin and Dato' Abdul Aziz Bin Mohamad by virtue of their interest in shares in the Company are also

deemed interested in shares of all the Company's subsidiaries to the extent the Company has an interest.

None of the other directors in offi ce at the end of the fi nancial year had any interest in shares in the Company or its related

corporations during the fi nancial year.

ISSUE OF SHARES

During the fi nancial year, the Company increased its issued and paid-up ordinary share capital from RM233,870,851 to

RM238,125,452 by way of:

(i) the issuance of 2,603,849 ordinary shares of RM0.50 each arising from conversion of Irredeemable Convertible

Unsecured Loan Stocks ("ICULS");

(ii) the issuance of 5,903,280 ordinary shares of RM0.50 each for cash pursuant to the Company's Employee Share Options

Scheme ("ESOS") at an exercise price of RM0.52 per ordinary share respectively;

(iii) the issuance of 1,152 ordinary shares of RM0.50 each through the exercise of Warrants A 2007/2017 at an exercise

price of RM0.50 per share for cash.

(iv) the issuance of 921 ordinary shares of RM0.50 each through the exercise of Warrants B 2011/2016 at an exercise price

of RM0.61 per share for cash.

The new ordinary shares issued during the fi nancial year shall rank pari passu in all respect with the existing ordinary shares

of the Company.

WARRANTS A 2007/2017

A total of 30,800,000 free warrants were issued by the Company in conjunction with the Rights Issue in 2007. Each warrant is

convertible into one new ordinary share of RM1.00 each at the exercise price of RM1.00 per ordinary share.

Consequential to the Bonus Issue in 2008, the Company had issued an additional 6,101,520 new Warrants 2007/2017

pursuant to the adjustments in accordance with the provision under the Deed Poll executed by the Company on 15 November

2006 constituting the Warrants ("Deed Poll"). The warrants are valid for a period of ten years and shall expire on 21 January

2017.

The exercise price of the existing Warrants A 2007/2017 were adjusted to RM0.50 each pursuant to the Share Split and

Bonus Issue of shares in 2011. 1,152 Warrants A were exercised during the fi nancial year and a total of 86,738,717 warrants

remained outstanding as at 31 December 2012.

DIRECTORS’ REPORT (CONT’D)


Annual Report 2012

WARRANTS B 2011/2016

Consequential to the Share Split and Bonus Issue Exercise in 2011, the shareholders gave their approval for the Company

to issue a bonus issue of warrants (Warrants B). Pursuant to the Deed Poll executed by the Company on 12 July 2011,

93,495,995 warrants were issued, and the said warrants are valid for a period of fi ve years and shall expire on 25 July 2016.

Each warrants is exercisable into one new ordinary share of RM0.50 each at the exercise price of RM0.61 per ordinary share.

921 Warrants B 2011/2016 were exercised during the fi nancial year and a total of 93,495,074 warrants remained outstanding

as at 31 December 2012.

IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS

On 22 January 2007, the Company issued RM30,800,000 nominal value of 5 - year 5% Irredeemable Convertible Unsecured

Loan Stocks ("ICULS") at a nominal value of RM1.00 each for additional working capital purposes.

Pursuant to the condition stipulated under the Trust Deed executed by the Company on 15 November 2006 constituting the

ICULS ("Trust Deed"), the ICULS were matured on 20 January 2012.

All outstanding ICULS were automatically converted into new ordinary stock units of RM0.50 each at the conversion price of

RM1.00 for every 2.88 new stock units at the maturity date. With respects to this, 2,603,849 ordinary shares of RM0.50 each

were allotted on 26 January 2012 for conversion of all outstanding ICULS to ordinary shares.

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

TREASURY SHARES

The Board obtained shareholders' approval to undertake the purchase of up to 10% of the issued and paid up share capital of

the Company. The shareholders of the Company, by a special resolution passed in a general meeting held on 27 June 2012,

renewed their approval for the Company's plan to repurchase its own ordinary shares. The directors of the Company are

committed to enhancing the value of the Company for its shareholders and believe that the repurchase plan can be applied in

the best interests of the Company and its shareholders.

EMPLOYEE SHARE OPTIONS SCHEME

The TRC Synergy Berhad Employee Share Options Scheme ("ESOS") is governed by the by-laws approved by the shareholders

at an Extraordinary General Meeting held on 30 April 2004. The ESOS was implemented on 22 June 2004 and is to be in force

for a period of 5 years from the date of implementation. The Board of Directors has approved the extension of the duration of

ESOS for another fi ve years from the expiry date of the initial ESOS period (21 June 2009).

Consequential to the Share Split and Bonus Issue in 2011, the holder of each ESOS Option is entitled to subscribe for 2.40

New Subdivided Shares for the exercise of each ESOS Option at the Exercise Price of RM0.52 each.

The Company issued 5,903,280 ordinary shares of RM0.50 each for cash pursuant to the Company's ESOS at the exercise

price of RM0.52 per ordinary share during the fi nancial year.

As at 31 December 2012, the total number of ordinary shares issued by the Company pursuant to the ESOS Scheme were

15,437,280 and a total of 9,934,920 ESOS remained unexercised.

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

The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the names

of option holders, including directors, who have been granted option to subscribe for less than 480,000 ordinary shares. The

names of option holders granted option to subscribe for 480,000 or more ordinary shares during the fi nancial year are as

follows:-



Annual Report 2012

EMPLOYEE SHARE OPTIONS SCHEME (CONT'D)

Number of ESOS Options Grant Expiry Exercise

Name Date Date Price Granted Exercised 31.12.2012RM

Abdul Aziz Bin Mohamed 22.06.2004 21.06.2014 0.52 1,696,800 (745,000) 951,800

Dato' Khoo Teng San 22.06.2004 21.06.2014 0.52 760,000 - 760,000

Loh Leh Wong 22.06.2004 21.06.2014 0.52 1,056,000 (1,056,000) -

Yeoh Sook Keng 22.06.2004 21.06.2014 0.52 1,080,000 (500,000) 580,000

Muhamad Shahaizi Bin Abdul Hai 22.06.2004 21.06.2014 0.52 912,000 (400,000) 512,000

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

OTHER STATUTORY INFORMATION

(a) Before the statements of comprehensive income and statements of fi nancial position of the Group and of the Company

were made out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of

allowance for doubtful debts and satisfi ed themselves that all known bad debts had been written off and that

adequate allowance had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in

the ordinary course of business had been written down to an amount which they might be expected so to realise.

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

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

extent; and

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

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render

adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or

inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the

fi nancial statements of the Group and of the Company which would render any amount stated in the fi nancial statements

misleading.

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

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the fi nancial year which

secures the liabilities of any other person; or

(ii) any contingent liability of the Group or of the Company which has arisen since the end of the fi nancial year, except

as disclosed in Note 37 to the fi nancial statements.

DIRECTORS’ REPORT (CONT’D)


Annual Report 2012

OTHER STATUTORY INFORMATION (CONT'D)

(f) In the opinion of the directors:

(i) no contingent liability or other liability has become enforceable or is likely to become enforceable within the period

of twelve months after the end of the fi nancial year which will or may affect the ability of the Group or of the

Company to meet their obligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the

fi nancial year and the date of this report which is likely to affect substantially the results of the operations of the

Group and of the Company for the fi nancial year in which this report is made.

SIGNIFICANT AND SUBSEQUENT EVENTS

The signifi cant and subsequent events are disclosed in Note 43 and 44 to the fi nancial statements.

AUDITORS

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

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

………………………………………….….

DATO' SRI SUFRI BIN HJ MOHD ZIN

………………………………………….….

DATO' ABDUL AZIZ BIN MOHAMAD

Kuala Lumpur, Malaysia.

Date: 26 April 2013



Annual Report 2012

We, DATO' SRI SUFRI BIN HJ MOHD ZIN and DATO' ABDUL AZIZ BIN MOHAMAD, being two of the directors of TRC SYNERGY BERHAD, state that in the opinion of the directors, the accompanying fi nancial statements set out on pages 35

to 105 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards

and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the fi nancial position of the Group and of the

Company as at 31 December 2012 and of the results and the cash fl ows of the Group and of the Company for the year then

ended.

The information set out in Note 46 of the fi nancial statements have been presented in accordance with the directive issued

by Bursa Malaysia Securities Berhad and prepared in accordance with Guidance on Special Matter No. 1, Determination of

Realised and Unrealised Profi ts or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing

Requirements, as issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa

Malaysia Securities Berhad.

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

………………………………………….… …………………………………...………

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

Kuala Lumpur, Malaysia.

Date: 26 April 2013

STATUTORY DECLARATION PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965

I, YEOH SOOK KENG, being the offi cer primarily responsible for the fi nancial management of TRC SYNERGY BERHAD,

do solemnly and sincerely declare that the accompanying fi nancial statements set out on pages 35 to 105 are in my opinion

correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the

Statutory Declarations Act, l960.

Subscribed and solemnly declared by the

abovenamed YEOH SOOK KENG at Kuala Lumpur …………………………………...………

in the Federal Territory on 26 April 2013 YEOH SOOK KENG

Before me,

………………………………………….…

Commissioner for Oath

STATEMENT BY DIRECTORS PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965


Annual Report 2012

REPORT ON THE FINANCIAL STATEMENTS

We have audited the fi nancial statements of TRC Synergy Berhad which comprise the statements of fi nancial position as at

31 December 2012 of the Group and of the Company, and the comprehensive income statements, statements of changes in

equity and statements of cash fl ows of the Group and of the Company for the fi nancial year then ended, and a summary of

signifi cant accounting policies and other explanatory notes, as set out on pages 35 to 105.

Directors' Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of fi nancial statements that give a true and fair view in

accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the Companies

Act, 1965 in Malaysia, and for such internal control as the Directors determine are necessary to enable the preparation of

fi nancial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in

accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements

and plan and perform the audit to obtain reasonable assurance whether the fi nancial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements.

The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the fi nancial

statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the

Company's preparation of the fi nancial statements that give a true and fair view in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's

internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of

accounting estimates made by the directors, as well as evaluating the overall presentation of the fi nancial statements.

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

Opinion

In our opinion, the fi nancial statements have been properly drawn up in accordance with Malaysian Financial Reporting

Standards, International Financial Reporting Standards in Malaysia and the Companies Act, 1965 so as to give a true and fair

view of the fi nancial position of the Group and of the Company as of 31 December 2012 and of their fi nancial performance and

cash fl ows for the fi nancial year then ended.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and

its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the fi nancial statements and the auditors' reports of all the subsidiaries of which we have not acted

as auditors, which are indicated in Note 17 to the fi nancial statements.

(c) We are satisfi ed that the fi nancial statements of the subsidiaries that have been consolidated with the Company's

fi nancial statements are in form and content appropriate and proper for the purposes of the preparation of the fi nancial

statements of the Group and we have received satisfactory information and explanations required by us for those

purposes.

(d) The auditors' reports on the fi nancial statements of the subsidiaries were not subject to any qualifi cation or any adverse

comment required to be made under Section 174(3) of the Act.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF TRC SYNERGY BERHAD


Annual Report 2012

OTHER REPORTING RESPONSIBILITIES

The supplementary information set out in Note 46 disclosed to meet the requirement of Bursa Malaysia Securities Berhad. The

Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter

No. 1, Determination of Realised and Unrealised Profi ts or Losses in the Context of Disclosure Pursuant to Bursa Malaysia

Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ("MIA Guidance") and the directive

of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in

accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

OTHER MATTERS

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act,

1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

…………………………………………… ………………………………………………

ALJEFFRIDEAN T. NAGARAJAN KMNA.F. No. 1366 No: 824/04/14 (J)

Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia

Date: 26 April 2013

INDEPENDENT AUDITORS’ REPORT (CONT’D)TO THE MEMBERS OF TRC SYNERGY BERHAD


Annual Report 2012

Group CompanyNote 2012 2011 2012 2011

RM RM RM RM

Revenue 3 566,101,880 400,763,258 9,437,213 50,580,438

Cost of sales 4 (520,471,106) (371,086,121) (5,747,379) (3,101,382)

Gross profi t 45,630,774 29,677,137 3,689,834 47,479,056

Other income 5 5,211,195 8,596,346 926,571 2,691,318

Administrative expenses (32,603,674) (28,011,337) (6,443,591) (5,807,171)

Operating profi t/(loss) 18,238,295 10,262,146 (1,827,186) 44,363,203

Finance income 6 5,936,178 6,994,857 2,899,117 2,811,533

Finance costs 7 (1,506,205) (404,998) (168,732) (16,517)

Share of profi t/(loss) of associates 175,753 (293,832) - -

Profi t before tax 8 22,844,021 16,558,173 903,199 47,158,219

Income tax expense 11 (13,613,299) (3,576,678) (599,783) (368,841)

Profi t net of tax 9,230,722 12,981,495 303,416 46,789,378

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

foreign operations (593,477) 207,491 - -

Fair value of available-for-sale fi nancial asset

- Gain on fair value changes - 362,611 - -

- Transfer to profi t or loss upon disposal 26,730 - - -

- Gain on disposal of available-for-sale

fi nancial asset (1,105,638) - - -

Other comprehensive (loss)/income for the year, net of tax (1,672,385) 570,102 - -

Total comprehensive income for the year 7,558,337 13,551,597 303,416 46,789,378

Profi t attributable to:Equity holders of the Company 9,230,722 12,981,495 303,416 46,789,378

Minority interests - - - -

Profi t for the year 9,230,722 12,981,495 303,416 46,789,378

Total comprehensive income attributable to:Equity holders of the Company 7,558,337 13,551,597 303,416 46,789,378

Minority interests - - - -

Total comprehensive income for the year 7,558,337 13,551,597 303,416 46,789,378

Earning per share attributable to equity holders

of the Company (sen)

- Basic 12 1.94 2.79

- Diluted 12 1.90 2.64

The accompanying notes form an integral part of the fi nancial statements.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2012


Annual Report 2012

Note 31.12.2012 31.12.2011 1.1.2011RM RM RM

ASSETS

Non-current assetsInvestment properties 13 17,089,674 17,791,674 18,563,332

Property, plant and equipment 14 38,744,912 23,350,226 21,639,998

Properties held for development 15 12,068,603 20,043,169 20,032,709

Intangible assets 16 9,177 9,177 9,177

Investment in Subsidiaries 17 - - -

Investment in Associates 18 11,845,933 12,034,750 11,749,188

Other investments 19 28,988,934 53,369,583 40,508,127

Other receivables 20 33,985,664 - -

Deferred tax assets 21 596,673 1,191,505 843,658

143,329,570 127,790,084 113,346,189

Current assetsProperty development costs 15 22,936,820 10,351,571 10,228,616

Inventories 22 1,914,420 1,943,621 1,215,490

Trade and other receivables 20 253,404,304 121,765,485 113,064,099

Other current assets 24 87,503,040 53,807,806 19,547,248

Cash and bank balances 25 123,982,952 129,273,428 200,680,081

489,741,536 317,141,911 344,735,534

TOTAL ASSETS 633,071,106 444,931,995 458,081,723

EQUITY AND LIABILITIES

Equity attributable to equity holders of the CompanyShare capital 26 238,125,452 233,870,851 190,247,839

Share premium 26 123,187 5,020 102,350

ICULS - equity component 27 - 736,554 862,317

Other reserves 28 417,171 2,089,556 1,519,454

Retained earnings 29 74,563,048 72,873,126 105,503,517

Total equity 313,228,858 309,575,107 298,235,477

Non-current liabilitiesBorrowings 30 27,604,012 - -

ICULS - liability component 27 - 3,840 13,512

Deferred tax liabilities 21 1,991,287 1,255,735 1,192,041

29,595,299 1,259,575 1,205,553

Current liabilitiesBorrowings 30 87,252,047 4,595,053 366,519

Trade and other payables 31 143,220,630 91,808,159 75,115,430

Other current liabilities 32 56,570,220 37,694,101 83,158,744

Taxation 3,204,052 - -

290,246,949 134,097,313 158,640,693

Total liabilities 319,842,248 135,356,888 159,846,246

TOTAL EQUITY AND LIABILITIES 633,071,106 444,931,995 458,081,723


CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2012


Annual Report 2012

Note 31.12.2012 31.12.2011 1.1.2011RM RM RM

ASSETS

Non-current assetsInvestment properties 13 - - -

Property, plant and equipment 14 3,102,759 3,653,593 4,172,758

Properties held for development 15 - - -

Intangible assets 16 - - -

Investment in Subsidiaries 17 76,718,234 75,155,098 74,946,519

Investment in Associates 18 - - -

Other investments 19 - - -

Other receivables 20 158,363,261 160,240,598 124,160,475

Deferred tax assets 21 - 168,445 83,521

238,184,254 239,217,734 203,363,273

Current assetsProperty development costs 15 - - -

Inventories 22 - - -

Trade and other receivables 20 129,859 108,805 11,578

Other current assets 24 - - -

Cash and bank balances 25 6,783,472 9,319,839 702,608

6,913,331 9,428,644 714,186

TOTAL ASSETS 245,097,585 248,646,378 204,077,459

EQUITY AND LIABILITIES

Equity attributable to equity holders of the CompanyShare capital 26 238,125,452 233,870,851 190,247,839

Share premium 26 123,187 5,020 102,350

ICULS - equity component 27 - 736,554 862,317

Other reserves 28 - - -

Retained earnings 29 6,468,769 13,706,153 12,528,661

Total equity 244,717,408 248,318,578 203,741,167

Non-current liabilitiesBorrowings 30 - - -

ICULS - liability component 27 - 3,840 13,512

Deferred tax liabilities 21 12,146 - -

12,146 3,840 13,512

Current liabilitiesBorrowings 30 - - -

Trade and other payables 31 368,031 323,960 300,172

Other current liabilities 32 - - -

Taxation - - 22,608

368,031 323,960 322,780

Total liabilities 380,177 327,800 336,292

TOTAL EQUITY AND LIABILITIES 245,097,585 248,646,378 204,077,459


COMPANY STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2012


Annual Report 2012

Attributable to Equity Holders of the Company Non-Distributable Distributable

ShareCapital

SharePremium

ICULS (Equity

Component)Other

ReservesRetainedEarnings

Non-Controlling Total

EquityTotal InterestsRM RM RM RM RM RM RM RM

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

At 1 January 2012 233,870,851 5,020 736,554 2,089,556 72,873,126 309,575,107 - 309,575,107

Total comprehensive

income - - - (1,672,385) 9,230,722 7,558,337 - 7,558,337

Dividends 35 - - - - (7,142,992) (7,142,992) - (7,142,992)

Issue of ordinary

shares pursuant to:

Bonus issue - - - - - - - -

ESOS 2,951,640 118,066 - - - 3,069,706 - 3,069,706

ICULS 904,116 - - - - 904,116 - 904,116

ICULS adjustment 397,808 - - - (397,808) - - -

Warrants A 576 - - - - 576 - 576

Warrants B 461 101 - - - 562 - 562

Equity component of

ICULS - - (736,554) - - (736,554) - (736,554)

At 31 December 2012 238,125,452 123,187 - 417,171 74,563,048 313,228,858 - 313,228,858

Attributable to Equity Holders of the Company Non-Distributable Distributable

ShareCapital

SharePremium

ICULS (Equity

Component)Other

ReservesRetainedEarnings

Non-Controlling Total

EquityTotal InterestsRM RM RM RM RM RM RM RM

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

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

Total comprehensive

income - - - 570,102 12,981,495 13,551,597 - 13,551,597

Dividends 35 - - - - (7,302,730) (7,302,730) - (7,302,730)

Issue of ordinary

shares pursuant to:

Bonus issue 38,956,712 (668,606) - - (38,288,106) - - -

ESOS 4,072,500 911,880 - - - 4,984,380 - 4,984,380

ICULS 105,250 - - - - 105,250 - 105,250

ICULS adjustment 21,050 - - - (21,050) - - -

Warrants 467,500 - - - - 467,500 - 467,500

Equity component of

ICULS - - (125,763) - - (125,763) - (125,763)

Expenditure written

off - (340,604) - - - (340,604) - (340,604)

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


STATEMENT OF CHANGES IN EQUITY - GROUP FOR THE YEAR ENDED 31 DECEMBER 2012


Annual Report 2012

Non-distributable Distributable

ShareCapital

RM

SharePremium

component)RM

ICULS(Equity

EarningsRM

RetainedEquity

RMTotal

RMNote (Note 26) (Note 26) (Note 27) (Note 29)

At 1 January 2012 233,870,851 5,020 736,554 13,706,153 248,318,578

Total comprehensive income - - - 303,416 303,416

Dividends 35 - - - (7,142,992) (7,142,992)

Issue of ordinary shares

pursuant to:

ESOS 2,951,640 118,066 - - 3,069,706

ICULS 904,116 - - - 904,116

ICULS Adjustment 397,808 - - (397,808) -

Warrants A 576 - - - 576

Warrants B 461 101 - - 562

Equity component of ICULS - - (736,554) - (736,554)

At 31 December 2012 238,125,452 123,187 - 6,468,769 244,717,408

Non-distributable Distributable

ShareCapital

RM

SharePremium

component)RM

ICULS(Equity

EarningsRM

RetainedEquity

RMTotal

RMNote (Note 26) (Note 26) (Note 27) (Note 29)

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

Total comprehensive income - - - 46,789,378 46,789,378

Dividends 35 - - - (7,302,730) (7,302,730)

Issue of ordinary shares

pursuant to:

Bonus Issue 38,956,712 (668,606) - (38,288,106) -

ESOS 4,072,500 911,880 - - 4,984,380

ICULS 105,250 - - - 105,250

ICULS Adjustment 21,050 - - (21,050) -

Warrants 467,500 - - - 467,500

Equity component of ICULS - - (125,763) - (125,763)

Expenditure written off - (340,604) - - (340,604)

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


STATEMENT OF CHANGES IN EQUITY - COMPANYFOR THE YEAR ENDED 31 DECEMBER 2012


Annual Report 2012


RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

Profi t before taxation 22,844,021 16,558,173 903,199 47,158,219

Adjustments for:-

Realised gain on disposal of other

investment (1,105,638) - - -

Loss on disposal of investment properties 10,400 - - -

Unrealised loss/(gain) on foreign exchange 1,244,013 (2,636,165) 2,168,549 (1,764,742)

Gain on disposal of other investment (12,310) - - -

Dividend income - (942,599) - (45,000,000)

Finance cost on ICULS 166,324 15,751 166,324 15,751

Impairment on revaluation of investment

properties - 888,731 - -

Exchange reserve arising due to retranslation

of fi nancial statements in foreign currency (592,466) 207,491 - -

Depreciation of property, plant and

equipment 5,597,487 5,348,434 550,834 549,447

Amortisation of leasehold land 5,891 5,891 - -

Gain on disposal of property,

plant and equipment (407,053) (72,971) - -

Share of results of associates (175,753) 293,832 - -

Interest expense 1,150,275 142,243 - -

Interest income (5,928,313) (6,052,258) (2,899,117) (2,811,533)

Property, plant and equipment written off 674 175,653 - -

Negative goodwill on acquisition of

subsidiary company (1,943) - - -

OPERATING PROFIT/(LOSS) BEFORE WORKING CAPITAL CHANGES 22,795,609 13,932,206 889,789 (1,852,858)

Inventories 29,201 (728,131) - -

Receivables (167,332,813) (35,865,207) (8,996) 9,078

Payables 69,067,353 (28,817,202) 41,469 (21,500)

Property development project costs (12,585,249) (122,955) - -

Cash (used in)/generated from operations (88,025,899) (51,601,289) 922,262 (1,865,280)

Taxation paid (7,686,837) (8,606,418) (431,250) (583,326)

Interest paid (1,150,275) (142,243) - -

Interest received 5,928,313 6,052,258 2,899,117 2,811,533

Net cash (used in)/generated from

operating activities (90,934,698) (54,297,692) 3,390,129 362,927

STATEMENTS OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2012


Annual Report 2012


RM RM RM RM

CASH FLOWS FROM INVESTING ACTIVITIES

Dividend received - 942,482 - 45,000,000

Associate company 364,570 (579,394) - -

Additional investment in subsidiaries - - (1,563,136) (208,579)

Proceed from disposal/purchase of

investment properties 691,600 (117,073) - -

Proceed from disposal/purchase of investment 24,419,690 (12,498,845) - -

Purchase of property, plant and equipment (21,092,425) (8,157,859) - (30,282)

Proceeds from disposal of property,

plant and equipment 600,656 990,624 - -

Land held for development 7,873,639 (10,460) - -

Other receivables (33,985,664) - (256,045) (34,350,381)

Net cash infl ow from acquisition of

subsidiary company 17 1,943 - - -

Net cash (used in)/generated from

investing activities (21,125,991) (19,430,525) (1,819,181) 10,410,758

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds on share premium from ESOS

and warrants exercised 118,167 571,276 118,167 571,276

Proceeds from ESOS exercised 2,951,640 4,072,500 2,951,640 4,072,500

Proceeds from warrants exercised 1,037 467,500 1,037 467,500

Fixed deposits (5,581,017) (16,022,274) (149,244) (5,120,259)

Proceeds/(Repayment) of short term

borrowings 73,493,107 1,846,481 - -

Repayment of long term borrowings 27,604,012 - - -

Dividend paid (7,142,992) (7,302,730) (7,142,992) (7,302,730)

Net cash generated from/(used in)

fi nancing activities 91,443,954 (16,367,247) (4,221,392) (7,311,713)

Net (decrease)/increase in cash and cash equivalents (20,616,735) (90,095,464) (2,650,444) 3,461,972

Effects of foreign exchange rate changes 581,355 284,484 (35,167) 35,000

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

Cash and cash equivalents at the end of the year 25 41,988,420 62,023,800 1,513,969 4,199,580


STATEMENTS OF CASH FLOWS (CONT’D)FOR THE YEAR ENDED 31 DECEMBER 2012


Annual Report 2012

1. CORPORATE INFORMATION

The principal activities of the Company are investment holding, general contractors for supplying labour and provision of

corporate, administrative and fi nancial support services to its subsidiaries. The principal activities of the subsidiaries are

disclosed in Note 17 to the fi nancial statements.

The number of employees of the Company as at year end is 43 (2011: 46). The number of employees of the Group as

at year end is 931 (2011: 509).

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

The Company is listed on the Main Market of Bursa Malaysia Securities Berhad and produces fi nancial statements

available for the public use.

The registered offi ce and principal place of business of the Company is located at TRC Business Centre, Jalan Andaman

Utama, 68000 Ampang, Selangor Darul Ehsan.

The fi nancial statements were authorised for issue by the Board of Directors in accordance with a resolution of the

directors on 26 April 2013.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation

The fi nancial statements of the Group and of the Company have been prepared in accordance with Malaysian

Financial Reporting Standards ("MFRS") , International Financial Reporting Standards and the Companies Act,

1965 in Malaysia. These are the Group's and the Company's fi rst fi nancial statements prepared in accordance with

MFRSs and MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards has been applied.

In the previous years, the fi nancial statements of the Group and of the Company were prepared in accordance

with Financial Reporting Standards (FRSs) in Malaysia. There are no fi nancial impacts to the fi nancial statements

on transition to MFRSs during the fi nancial year.

The Group and the Company have prepared fi nancial statements which comply with MFRS together with the

comparative period data as at, and for the year ended 31 December 2011, as described in the accounting policies.

In preparing these fi nancial statements, the Group's and the Company's opening statements of fi nancial position

were prepared as at 1 January 2011, being the date of transition to MFRS. No adjustments were required to be

made to the FRS statement of fi nancial position as at 1 January 2011 and the previously published FRS fi nancial

statement as at, and for the year ended 31 December 2011. Hence, the following are not presented:

(a) Reconciliations of equity reported under FRS to equity reported under MFRS as at 1 January 2011 and 31

December 2011; and

(b) Reconciliations of profi t or loss reported under FRS for the fi nancial year ended 31 December 2011 to profi t

or loss reported under MFRS for the same period.

The fi nancial statements have been prepared on the historical cost basis except as disclosed in the accounting

policies below.

The fi nancial statements are presented in Ringgit Malaysia (RM).

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2012


Annual Report 2012

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)31 DECEMBER 2012

2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.2 Statement of Compliance

The following are accounting standards, amendments and interpretations of the MFRS framework that have been

issued by the Malaysian Accounting Standards Board ("MASB") but have not been adopted by the Group and the

Company.

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 July 2012

• Amendments to MFRS 101, Presentation of Financial Statements - Presentation of Items of Other

Comprehensive Income

• Amendments to IC Interpretation 15, Agreements for Construction of Real Estate

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2013

• MFRS 10, Consolidated Financial Statements

• MFRS 11, Joint Arrangements

• MFRS 12, Disclosure of Interest in Other Entities

• MFRS 13, Fair Value Measurement

• MFRS 119, Employee Benefi ts (2011)

• MFRS 127, Separate Financial Statements (2011)

• MFRS 128, Investment in Associates and Joint Venture (2011)

• IC Interpretation 20, Stripping Costs in the Production Phase of a Surface Mine

• Amendments to MFRS 7, Financial Instruments Disclosures - Offsetting Financial Assets and Financial

Liabilities

• Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards - Government

Loans

• Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual

Improvements 2009-2011 Cycle)

• Amendments to MFRS 101, Presentation of Financial Statements (Annual Improvements 2009-2011 Cycle)

• Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2009-2011 Cycle)

• Amendments to MFRS 132, Financial Instruments: Presentation (Annual Improvements 2009-2011 Cycle)

• Amendments to MFRS 134, Interim Financial Reporting (Annual Improvements 2009-2011 Cycle)

• Amendments to MFRS 10, Consolidated Financial Statements: Transition Guidance

• Amendments to MFRS 11, Joint Arrangements: Transition Guidance

• Amendments to MFRS 12, Disclosure of Interests in Other Entities: Transition Guidance


• Amendments to MFRS 132, Financial Instruments: Presentation - Offsetting Financial Assets and Financial

Liabilities


• MFRS 9, Financial Instruments (2009)

• MFRS 9, Financial Instruments (2010)

• Amendments to MFRS 7, Financial Instruments: Disclosures - Mandatory Date of MFRS 9 and Transition

Disclosures

The Group and the Company plan to apply the abovementioned standards, amendments and interpretations:-

• from the annual period beginning on 1 January 2013 for those standards, amendments or interpretations

that are effective for annual periods beginning on or after 1 January 2013, except for IC Interpretation 20 and

Amendments to MFRS 1 - Government Loans, which are not applicable to the Group and the Company.


Annual Report 2012



2.2 Statement of Compliance (Cont’d)

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2015 (cont’d)


that are effective for annual periods beginning on or after 1 January 2014.


that are effective for annual periods beginning on or after 1 January 2015.

Material impacts of initial application of a standard, an amendment or an interpretation are discussed below:

MFRS 9, Financial Instruments

MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the

classifi cation and measurement of fi nancial assets. Upon adoption of MFRS 9, fi nancial assets will be measured at

either fair value or amortised cost.

The adoption of MFRS 9 will result in a change in accounting policy. The Group and the Company is currently

assessing the fi nancial impact of adopting MFRS 9.

MFRS 10, Consolidated Financial Statements

MFRS 10 replaces part of MFRS 127 Consolidated and Separate Financial Statements that deals with consolidated

fi nancial statements and IC Interpretation 112 Consolidation - Special Purpose Entities.

Under MFRS 10, an investor controls an investee when (a) the investor has power over an investee, (b) the investor

has exposure, or rights, to variable returns from its involvement with the investee, and (c) the investor has ability to

use its power over the investee to affect the amount of the investor's returns. Under MFRS 127 Consolidated and

Separate Financial Statements, control was defi ned as the power to govern the fi nancial and operating policies of

an entity so as to obtain benefi ts from its activities.

MFRS 10 includes detailed guidance to explain when an investor has control over the investee. MFRS 10 requires

the investor to take into account all relevant facts and circumstances.

The adoption of MFRS 10 may change which entities are within the Group. The Group is in the process of assessing

the effect of the new requirements.

MFRS 13, Fair Value Measurement

MFRS 13, Fair Value Measurement establishes the principles for fair value measurement and replaces the existing

guidance in different MFRSs. The Group and the Company is currently assessing the fi nancial impact of adopting

MFRS 13.

The initial application of other standards, amendments and interpretations is not expected to have any material

fi nancial impacts to the current and prior periods fi nancial statements upon their fi rst adoption.


Annual Report 2012


2. SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

2.3 Summary of Significant Accounting Policies

(a) Basis of Consolidation

(i) Subsidiaries

Subsidiaries are entities, including unincorporated entities, controlled by the Group. Control exists when

the Group has the ability to exercise its power to govern the fi nancial and operating policies of an entity

so as to obtain benefi ts from its activities. In assessing control, potential voting rights that presently are

exercisable are taken into account.

Investments in subsidiaries are measured in the Company's statement of fi nancial position at cost less

any impairment losses. The cost of investments includes transaction costs.

The accounting policies of subsidiaries are changed when necessary to align them with the policies

adopted by the Group.

(ii) Accounting for business combinations

Business combinations are accounted for using the acquisition method from the acquisition date, which

is the date on which control is transferred to the Group.

Acquisitions on or after 1 January 2011

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

• the fair value of the consideration transferred; plus

• the recognised amount of any non-controlling interests in the acquiree; plus

• if the business combination is achieved in stages, the fair value of the existing equity interest in the

acquiree; less

• the net recognised amount (generally fair value) of the identifi able assets acquired and liabilities

assumed.

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

For each business combination, the Group elects whether it measures the noncontrolling interest in

the acquiree either at fair value or at proportionate share of the acquiree's identifi able net assets at the

acquisition date.

Transaction costs, other than those associated with the issue of debts or equity securities, that the

Group incurs in connection with a business combination are expensed as incurred.

Acquisitions before 1 January 2011

As part of its transition to MFRS, the Group elected not to restate those business combination that

occurred before the date of transition to MFRS, i.e. 1 January 2011. Goodwill arising from acquisition

before 1 January 2011 has been carried forward from the previous FRS framework as at the date of

transition.


Annual Report 2012



2.3 Summary of Significant Accounting Policies (Cont’d)

(a) Basis of Consolidation (Cont’d)

(iii) Accounting for acquisitions of non-controlling interests

The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of

control as equity transactions between the Group and its noncontrolling interest holders. Any differences

between the Group's share of net assets before and after the change, and any consideration received

or paid, is adjusted to or against Group reserves.

(iv) Loss of control

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary,

any non-controlling interests and the other components of equity related to the subsidiary. Any surplus

or defi cit arising on the loss of control is recognised in profi t or loss. If the Group retains any interest

in the previous subsidiary, then such interest is measured at fair value at the date that control is lost.

Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale fi nancial

asset depending on the level of infl uence retained.

(v) Non-controlling interests

Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable

directly or indirectly to the equity holders of the Company, are presented in the consolidated statement

of fi nancial position and statement of changes in equity within equity, separately from equity attributable

to the owners of the Company. Non-controlling interests in the results of the Group is presented in

the consolidated statement of comprehensive income as an allocation of the profi t or loss and the

comprehensive income for the year between non-controlling interests and the owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling

interests even if doing so causes the non-controlling interests to have a defi cit balance.

(vi) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-

group transactions, are eliminated in preparing the consolidated fi nancial statements.

Unrealised gains arising from transactions with associates are eliminated against the investment to the

extent of the Group's interest in the associates. Unrealised losses are eliminated in the same way as

unrealised gains, but only to the extent that there is no evidence of impairment.

(b) Associates

An associate is an entity, not being a subsidiary or a joint venture, in which the Group has signifi cant infl uence.

An associate is equity accounted for from the date the Group obtains signifi cant infl uence until the date the

Group ceases to have signifi cant infl uence over the associate.

The Group's investments in associates are accounted for using the equity method. Under the equity method,

the investment in associates is measured in the statement of fi nancial position at cost plus post-acquisition

changes in the Group's share of net assets of the associates. Goodwill relating to associates is included

in the carrying amount of the investment. Any excess of the Group's share of the net fair value of the

associate's identifi able assets, liabilities and contingent liabilities over the cost of the investment is excluded

from the carrying amount of the investment and is instead included as income in the determination of the

Group's share of the associate's profi t or loss for the period in which the investment is acquired.

When the Group's share of losses in an associate equals or exceeds its interest in the associates, the Group

does not recognise further losses, unless it has incurred obligations or made payments on behalf of the

associate.


Annual Report 2012



2.3 Summary of Significant Accounting Policies (Cont'd)

(b) Associates (Cont'd)

After application of the equity method, the Group determines whether it is necessary to recognise an

additional impairment loss on the Group's investment in its associates. The Group determines at each

reporting date whether there is any objective evidence that the investment in associate is impaired. If this is

the case, the Group calculates the amount of impairment as the difference between the recoverable amount

of the associate and its carrying value and recognises the amount in profi t or loss.

The fi nancial statements of the associates are prepared as of the same reporting date as the Company.

Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

In the Company's separate fi nancial statements, investment in associates are stated at cost less impairment

losses. On disposal of such investment, the difference between net disposal proceeds and their carrying

amounts is included in profi t or loss.

(c) Goodwill

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

accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of

the Group's cash-generating units that are expected to benefi t from the synergies of the combination.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and

whenever there is an indication that the cash-generating unit be impaired, by comparing the carrying amount

of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-

generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying amount,

an impairment loss is recognised in the profi t or loss. Impairment losses recognised for goodwill are not

reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating

unit is disposed off, the goodwill associated with the operation disposed off is included in the carrying

amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed

off in this circumstance is measured based on the relative fair values of the operations disposed off and the

portion of the cash-generating unit retained.

(d) Inventories

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

Cost is determined using the fi rst in, fi rst out method. The cost of raw materials comprises costs of purchase.

The costs of fi nished goods and work-in-progress comprise costs of raw materials, direct labour, other

direct costs and appropriate proportions of manufacturing overheads based on normal operating capacity.

The cost of unsold properties comprises cost associated with the acquisition of land, direct costs and

appropriate proportions of common costs.

Net realisable value represents the estimated selling price in the ordinary course of business, less all estimated

costs of completion and applicable variable selling expenses. In arriving at the net realisable value, due

allowances is made for all obsolete and slow moving items.


Annual Report 2012




(e) Property, Plant and Equipment and Depreciation

All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in

the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable

that future economic benefi ts associated with the item will fl ow to the Group and the cost of the item

can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and

maintenance are charged to the income statement during the fi nancial period in which they are incurred.

Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation

and impairment losses, if any. The policy for recognition and measurement of impairment losses is in

accordance with No. 2.3 (j).

Certain freehold and leasehold land and buildings are stated at revalued amount, which is the fair value at the

date of the revaluation less any accumulated impairment losses. Fair value is determined from market-based

evidence by appraisal that is undertaken by professionally qualifi ed valuers. Revaluations are performed

with suffi cient regularity to ensure that the fair value of a revalued asset does not differ materially from

that which would be determined using fair values at the balance sheet date. Any revaluation surplus is

credited to the revaluation reserve included within equity, except to the extent that it reverses a revaluation

decrease for the same asset previously recognised in profi t or loss, in which case the increase is recognised

in profi t or loss to the extent of the decrease previously recognised. A revaluation defi cit is fi rst offset against

unutilised previously recognised revaluation surplus in respect of the same asset and the balance is thereafter

recognised in profi t or loss. Upon disposal or retirement of an asset, any revaluation reserve relating to the

particular asset is transferred directly to retained earnings.

Freehold land is not depreciated as it has an infi nite life. Leasehold land is amortised over the maximum

period of 99 years. Building under construction are not depreciated as these assets are not yet available for

use. Other property, plant and equipment are depreciated on a straight line basis to write off the cost of the

assets to their residual values over their estimated useful lives, at the following annual rates:

Renovation - 10%

Buildings - 2%

Plant, machinery and tools - 10%

Furniture and fi ttings - 10%

Motor vehicles - 20%

Offi ce equipment and computers - 20%

Telecommunication equipment - 20%

The residual values, useful life and depreciation method are reviewed at each fi nancial year end to ensure

that the amount, method and period of depreciation are consistent with previous estimates and the expected

pattern of consumption of the future economic benefi ts embodied in the items of property, plant and

equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic

benefi ts are expected from its use or disposal. Gains or losses on disposal are determined by comparing the

proceeds with the carrying amount of the related asset and are included in the profi t or loss.

(f) Leases

Assets acquired by way of hire purchase or fi nance leases are stated at an amount equal to the lower of

their fair values and the present value of the minimum lease payments at the inception of the leases, less

accumulated depreciation and impairment losses. The corresponding liability is included in the balance sheet

as borrowings.

In calculating the present value of the minimum lease payments, the discount factor used is the interest rate

implicit in the lease, when it is practicable to determine; otherwise, the Group's incremental borrowing rate is

used. Any initial direct costs are also added to the carrying amount of such assets.


Annual Report 2012




(f) Leases (Cont’d)

Lease payments are apportioned between the fi nance costs and the reduction of the outstanding liability.

Finance costs, which represent the difference between the total leasing commitments and the fair value of

the assets acquired, are recognised in the profi t or loss over the term of the relevant lease so as to produce

a constant periodic rate of charge on the remaining balance of the obligations for each accounting period.

The depreciation policy for leased assets is in accordance with that for depreciable property, plant and

equipment as described in Note 2.3(e).

(g) Investment Properties

Investment properties principally comprise buildings, are held for long term rental yields or for capital

appreciation or both, and are not occupied by the Group.

Investment properties are initially measured at its cost, including transaction costs. Subsequent to initial

recognition, investment properties are stated at fair value, representing open-market value determined by

external valuers. Fair value is based on active market prices, adjusted, if necessary, for any differences in

the nature, location or condition of the specifi c asset. Gains or losses arising from change in fair value of

investment properties are recognised in profi t or loss in the period in which they arise.

A property interest under an operating lease is classifi ed and accounted for as an investment property on a

property-by-property basis when the Group holds it to earn rentals or for capital appreciation or both. Any

such property interest under an operating lease classifi ed as an investment property is carried at fair value.

An investment property is derecognised on its disposal, or when it is permanently withdrawn from use and no

future economic benefi ts are expected from its disposal. The difference between the net disposal proceeds

and the carrying amount is recognised in profi t or loss in the period of the retirement or disposal.

Transfers are made to or from investment property only when there is a change in use. For a transfer from

investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair

value at the date of change in use. For a transfer from owner-occupied property to investment property, the

property is accounted for in accordance with the accounting policy for property, plant and equipment set out

in Note 2.3(e) up to date of change in use.

(h) Foreign Currencies

(i) Functional and presentation currency

The individual fi nancial statements of each entity in the Group are measured using the currency of the

primary economic environment in which the entity operates ("the functional currency"). The consolidated

fi nancial statements are presented in Ringgit Malaysia ("RM"), which is also the Company's functional

currency.

(ii) Foreign currency transactions

In preparing the fi nancial statements of the individual entities, transactions in currencies other than

the entity’s functional currency (foreign currencies) are recorded in the functional currencies using the

exchange rates prevailing at the dates of the transactions. At each balance sheet date, monetary items

denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date.

Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated

at the rates prevailing on the date when the fair value was determined. Non-monetary items that are

measured in terms of historical cost in a foreign currency are not retranslated.


Annual Report 2012




(h) Foreign Currencies (Cont'd)

(ii) Foreign currency transactions (Cont'd)

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary

items, are included in profi t or loss for the period except for exchange differences arising on monetary

items that form part of the Group's and the Company’s net investment in foreign operation. Exchange

differences arising on monetary items that form part of the Group's and the Company’s net investment

in foreign operation, where that monetary item is denominated in either the functional currency of the

reporting entity or the foreign operation, are initially taken directly to the foreign currency translation

reserve within equity until the disposal of the foreign operations, at which time they are recognised in

profi t or loss. Exchange differences arising on monetary items that form part of the Group's and the

Company’s net investment in foreign operation, where that monetary item is denominated in a currency

other than the functional currency of either the reporting entity or the foreign operation, are recognised in

profi t or loss for the period. Exchange differences arising on monetary items that form part of the Group's

and the Company’s net investment in foreign operation, regardless of the currency of the monetary item,

are recognised in profi t or loss in the Group's and the Company’s fi nancial statements or the individual

fi nancial statements of the foreign operation, as appropriate.

Exchange differences arising on the retranslation of non-monetary items carried at fair value are included

in profi t or loss for the period except for the differences arising on the retranslation of non-monetary

items in respect of which gains and losses are recognised directly in equity. Exchange differences arising

from such non-monetary items are also recognised directly in equity.

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

follows:-

2012 2011RM RM

United States Dollar 3.05 3.18

Euro Dollar 4.04 4.11

Australian Dollar 3.16 3.23

Brunei Dollar 2.49 2.44

(iii) Foreign operations

The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the

reporting date and income and expenses are translated at exchange rates at the dates of the transactions.

The exchange differences arising on the translation are taken directly to other comprehensive income.

On disposal of a foreign operations, the cumulative amount recognised on other comprehensive income

and accumulated in equity under foreign currency translation reserve relating to that particular foreign

operation is recognised in the profi t or loss.

(i) Borrowing Costs

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying

asset are recognised in profi t or loss using the effective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which

are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are

capitalised as part of the cost of those assets.


Annual Report 2012




(i) Borrowing Costs (Cont’d)

The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure

for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare

the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or

ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or

sale are interrupted or completed.

Investment income earned on the temporary investment of specifi c borrowings pending their expenditure on

qualifying assets is deducted from the borrowing costs eligible for capitalisation.

(j) Impairment of Non-Financial Assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired.

If any such indication exists, or when an annual impairment assessment for an asset is required, the Group

makes an estimate of the assets's recoverable amount.

An asset's recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. For

the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately

identifi able cash fl ows (cash-generating units ("CGU").

In assessing value in use, the estimated future cash fl ows expected to be generated by the asset are

discounted to their present value using a pre-tax discount rate that refl ects current market assessments of

the time value of money and the risks specifi c to the asset. Where the carrying amount of an asset exceeds

its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised

in respect of a CGU or groups of CGUs are allocated fi rst to reduce the carrying amount of any goodwill

allocated to those units of groups of units and then, to reduce the carrying amount of the other assets in the

unit or groups of units on a pro-rate basis.

Impairment losses are recognised in profi t or loss except for assets that are previously revalued where the

revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other

comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised

impairment losses may no longer exist or may have decreased. A previously recognised impairment loss

is reversed only if there has been a change in the estimates used to determine the assets's recoverable

amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset

is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have

been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is

recognised in profi t or loss unless the asset is measured at revalued amount, in which case the reversal is

treated as a revaluation increase. Impairment loss on goodwill is not reversed in a subsequent period.

(k) Financial Assets

Financial assets are recognised in the statements of fi nancial position when, and only when, the Group and

the Company become a party to the contractual provisions of the fi nancial instrument.

When fi nancial assets are recognised initially, they are measured at fair value, plus, in the case of fi nancial

assets not at fair value through profi t or loss, directly attributable transaction costs.

The Group and the Company determine the classifi cation of their fi nancial assets at initial recognition, and

the categories include fi nancial assets at fair value through profi t or loss, loans and receivables and available-

for-sale fi nancial assets.


Annual Report 2012




(k) Financial Assets (Cont’d)

(i) Financial assets at fair value through profi t or loss

Financial assets are classifi ed as fi nancial assets at fair value through profi t or loss if they are held for

trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives

(including separated embedded derivatives) or fi nancial assets acquired principally for the purpose of

selling in the near term.

Subsequent to initial recognition, fi nancial assets at fair value through profi t or loss are measured at fair

value. Any gains or losses arising from changes in fair value are recognised in profi t or loss. Net gains

or net losses on fi nancial assets at fair value through profi t or loss do not include exchange differences,

interest and dividend income. Exchange difference, interest and dividend income on fi nancial assets at

fair value through profi t or loss are recognised separately in profi t or loss as part of other losses or other

income.

Financial assets at fair value through profi t or loss could be presented as current or non-current. Financial

assets that is held primarily for trading purposes are presented as current whereas fi nancial assets that is

not held primarily for trading purposes are presented as current or non-current based on the settlement

date.

(ii) Loans and receivables

Financial assets with fi xed or determinable payments that are not quoted in an active market are classifi ed

as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective

interest method. Gains and losses are recognised in profi t or loss when the loans and receivables are

derecognised or impaired, and through the amortisation process.

Loans and receivables are classifi ed as current assets, except for those having maturity dates later than

12 months after the reporting date which are classifi ed as non-current.

(iii) Available-for-sale fi nancial assets

Available-for-sale fi nancial assets are fi nancial assets that are designated as available for sale or are not

classifi ed as fi nancial assets at fair value through profi t or loss, loans and receivables or held to maturity.

After initial recognition, available-for-sale fi nancial assets are measured at fair value. Any gains or losses

from changes in fair value of the fi nancial assets are recognised in other comprehensive income, except

that impairment losses, foreign exchange gains and losses on monetary instruments and interest

calculated using the effective interest method are recognised in profi t or loss. The cumulative gain or

loss previously recognised in other comprehensive income is reclassifi ed from equity to profi t or loss as

a reclassifi cation adjustment when the fi nancial asset is derecognised. Interest income calculated using

the effective interest method is recognised in profi t or loss. Dividends on an available-for-sale equity

instrument are recognised in profi t or loss when the Group and the Company's right to receive payment

is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost

less impairment loss.

Available-for-sale fi nancial assets are classifi ed as non-current assets unless they are expected to be

realised within 12 months after the reporting date.


Annual Report 2012




(k) Financial Assets (Cont'd)

A fi nancial asset is derecognised when the contractual right to receive cash fl ows from the asset has expired.

On derecognition of a fi nancial asset in its entirety, the difference between the carrying amount and the sum of

the consideration received and any cumulative gain or loss that had been recognised in other comprehensive

income is recognised in profi t or loss.

Regular way purchases or sales are purchases or sales of fi nancial assets that require delivery of assets

within the period generally established by regulation or convention in the marketplace concerned. All regular

way purchases and sales of fi nancial assets are recognised or derecognised on the trade date i.e the date

that the Group and the Company commit to purchase or sell the asset.

(l) Impairment of Financial Assets

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

fi nancial asset is impaired.

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

To determine whether there is objective evidence that an impairment loss on fi nancial assets has been

incurred, the Group and the Company consider factors such as the probability of insolvency or signifi cant

fi nancial diffi culties of the debtor and default or signifi cant delay in payments. For certain categories of

fi nancial assets, such as trade receivables, assets that are assessed not to be impaired individually

are subsequently assessed for impairment on a collective basis based on similar risk characteristics.

Objective evidence of impairment for a portfolio of receivables could include the Group's and the

Company's past experience of collecting payments, an increase in the number of delayed payments

in the portfolio past the average credit period and observable changes in national or local economic

conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between the

asset's carrying amount and the present value of estimated future cash fl ows discounted at the fi nancial

asset's original effective interest rate. The impairment loss is recognised in profi t or loss.

The carrying amount of the fi nancial asset is reduced by the impairment loss directly for all fi nancial

assets with the exception of trade receivables, where the carrying amount is reduced through the use

of an allowance account. When a trade receivable becomes uncollectible, it is written off against the

allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be

related objectively to an event occurring after the impairment was recognised, the previously recognised

impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its

amortised cost at the reversal date. The amount of reversal is recognised in profi t or loss.

(ii) Unquoted equity securities carried at cost

If there is objective evidence (such as signifi cant adverse changes in the business environment where

the issuer operates, probability of insolvency or signifi cant fi nancial diffi culties of the issuer) that an

impairment loss on fi nancial assets carried at cost has been incurred, the amount of the loss is measured

as the difference between the asset's carrying amount and the present value of estimated future cash

fl ows discounted at the current market rate of return for a similar fi nancial asset. Such impairment losses

are not reversed in subsequent periods.


Annual Report 2012




(m) Cash and Cash Equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term,

highly liquid investments that are readily convertible to known amount of cash and which are subject to

an insignifi cant risk of changes in value. These also include bank overdraft that form an integral part of the

Group's cash management.

(n) Construction Contract

Where the outcome of a contract can be reliably estimated, contract revenue and contract costs are

recognised as revenue and expenses respectively by using the stage of completion method. The stage of

completion is measured by reference to the proportion of contract costs incurred for work performed to date

to the estimated total contract costs.

Where the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised

to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised

as expenses in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised

as an expense immediately.

Contract revenue comprises the initial amount of revenue agreed in the contract and variations in contract

work, claims and incentive payments to the extent that it is probable that they will result in revenue and they

are capable of being reliably measured.

When the total of costs incurred on construction contracts plus, recognised profi ts (less recognised losses),

exceeds progress billings, the balance is classifi ed as amount due from customers on contracts. When

progress billings exceed costs incurred plus, recognised profi ts (less recognised losses), the balance is

classifi ed as amount due to customers on contracts.

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

(i) Land held for property development

Land held for property development consists of land where no development activities have been carried

out or where development activities are not expected to be completed within the normal operating cycle.

Such land is classifi ed within non-current assets and is stated at cost less any accumulated impairment

losses, if any.

Land held for property development is reclassifi ed as property development costs at the point when

development activities have commenced and where it can be demonstrated that the development

activities can be completed within the normal operating cycle.

(ii) Property development costs

Property development costs comprise all costs that are directly attributable to development activities or

that can be allocated on a reasonable basis to such activities.

When the fi nancial outcome of a development activity can be reliably estimated, property development

revenue and expenses are recognised in the profi t or loss by using the stage of completion method. The

stage of completion is determined by the proportion that property development costs incurred for work

performed to date bear to the estimated total property development costs.

Where the fi nancial outcome of a development activity cannot be reliably estimated, property development

revenue is recognised only to the extent of property development costs incurred that is probable will be

recoverable, and property development costs on properties sold are recognised as an expense in the

period in which they are incurred.


Annual Report 2012




(o) Land Held For Property Development and Property Development Costs (Cont’d)

(ii) Property development costs (Cont’d)

Any expected loss on a development project, including costs to be incurred over the defects liability

period, is recognised as an expense immediately.

Property development costs not recognised as an expense are recognised as an asset, which is

measured at the lower of cost and net realisable value.

The excess of revenue recognised in the profi t or loss over billings to purchasers is classifi ed as accrued

billings within trade receivables and the excess of billings to purchasers over revenue recognised in profi t

or loss is classifi ed as progress billings within trade payables.

(p) Financial Liabilities

Financial liabilities are classifi ed according to the substance of the contractual arrangements entered into and

the defi nitions of a fi nancial liability.

Financial liabilities, are recognised in the statement of fi nancial position when, and only when, the Group and

the Company become a party to the contractual provisions of the fi nancial instrument. Financial liabilities are

classifi ed as either fi nancial liabilities at fair value through profi t or loss or other fi nancial liabilities.

(i) Financial liabilities at fair value through profi t or loss

Financial liabilities at fair value through profi t or loss include fi nancial liabilities held for trading and fi nancial

liabilities designated upon initial recognition as at fair value through profi t or loss.

Financial liabilities held for trading include derivatives entered into by the Group and the Company that

do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and

subsequently stated at fair value, with any resultant gains or losses recognised in profi t or loss. Net gains

or losses on derivatives include exchange differences.

The Group and the Company have not designated any fi nancial liabilities as at fair value through profi t

or loss.

(ii) Other fi nancial liabilities

The Group's and the Company's other fi nancial liabilities include trade payables, other payables and

loans and borrowings.

Trade and other payables are recognised initially at fair value, plus directly attributable transaction costs

and subsequently measured at amortised cost using the effective interest method.

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and

subsequently measured at amortised cost using the effective interest method. Borrowings are classifi ed

as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at

least 12 months after the reporting date.

For other fi nancial liabilities, gains and losses are recognised in profi t or loss when the liabilities are

derecognised, and through the amortisation process.

A fi nancial liability is derecognised when the obligation under the liability is extinguished. When an existing

fi nancial liability is replaced by another from the same lender on substantially different terms, or the terms of

an existing liability are substantially modifi ed, such an exchange or modifi cation is treated as a derecognition

of the original liability and the recognition of new liability, and the difference in the respective carrying amounts

is recognised in profi t or loss.


Annual Report 2012




(q) Equity Instruments

Ordinary shares are classifi ed as equity. Dividends on ordinary shares are recognised in equity in the period

in which they are declared.

The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax.

Equity transaction costs comprise only those incremental external costs directly attributable to the equity

transaction which would otherwise have been avoided.

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

The ICULS are regarded as compound fi nancial instruments, consisting of a liability component and an equity

component. At the date of issue, the fair value of the liability component is estimated using the prevailing

market interest rate for a similar non-convertible borrowings. The difference between the proceeds of issue

of the ICULS and the fair value assigned to the liability component, representing the conversion option is

included in equity. The liability component is subsequently stated at amortised cost using the effective interest

rate method until extinguished on conversion, whilst the value of the equity component is not adjusted in

subsequent periods.

Under the effective interest rate method, the interest expense on the liability component is calculated by

applying the prevailing market interest rate for a similar non-convertible borrowings to the instrument at the

date of issue. The difference between this amount and the interest paid is added to the carrying amount of

the ICULS.

(s) Warrants

Issue of ordinary shares upon exercise of the warrant are treated as new subscription of ordinary shares for

the consideration equivalent to the exercise price of the warrants.

(t) Share Based Payments

The Group and the Company recognised an increase in share capital and share premium when the options

were exercised as the ESOS Scheme was implemented in 2004 before the effective date of implementation

of MFRS 2, Share-based Payment.

(u) Employee Benefi ts

(i) Short term benefi ts

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in

which the associated services are rendered by employees of the Group and the Company. Short term

accumulating compensated absences such as paid annual leave are recognised when services are

rendered by employees that increase their entitlement to future compensated absences, and short term

non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(ii) Defi ned contribution plans

Defi ned contribution plans are post-employment benefi t plans under which the Group and the Company

pays fi xed contributions into separate entities or funds and will have no legal or constructive obligation

to pay further contributions if any of the funds do not hold suffi cient assets to pay all employee benefi ts

relating to employee services in the current and preceding fi nancial years. Such contributions are

recognised as and expense in the statement of comprehensive income as incurred. As required by law,

companies in Malaysia make such contributions to the Employees Provident Fund ("EPF").


Annual Report 2012




(v) Revenue

Revenue is recognised to the extent that it is probable that the economic benefi ts will fl ow to the Group and

the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or

receivable.

(i) Sale of goods

Revenue from sale of goods is recognised upon the transfer of signifi cant risk and rewards of ownership

of the goods to the customer. Revenue is not recognised to the extent where there are signifi cant

uncertainties regarding recovery of the consideration due, associated costs or the possible return of

goods.

(ii) Construction contracts

Revenue from construction contracts is accounted for by the stage of completion method as described

in Note 2.3(n).

(iii) Sale of development properties

Revenue from sale of properties is accounted for by the stage of completion method as described in

Note 2.3(o)(ii).

(iv) Interest income

Interest income is accrued on a time basis, by reference to the principal outstanding and at effective

interest rate applicable, which is the rate that exactly discount estimated future cash receipts through

the expected life of the fi nancial asset to that asset's net carrying amount.

(v) Rental income

Rental income is accounted for on a straight-line basis over the lease terms. The aggregate cost of

incentives provided to lessees are recognised as a reduction of rental income over the lease term on a

straight-line basis.

(vi) Dividend income

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

(vii) Management fees

Management fees are recognised when services are rendered.

(viii) Rendering of services

Revenue from services rendered is recognised in profi t or loss in proportion to the stage of completion

of the transaction at the end of the reporting period. The stage of completion is assessed by reference

to surveys of work performed.

(w) Income Taxes

(i) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid

to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are

enacted or substantively enacted by the reporting date.


Annual Report 2012




(w) Income Taxes (Cont'd)

(i) Current tax (Cont'd)

Current taxes are recognised in profi t or loss except to the extent that the tax relates to items recognised

outside profi t or loss, either in other comprehensive income or directly in equity.

(ii) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between

the tax bases of assets and liabilities and their carrying amounts for fi nancial reporting purposes.

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

- where deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in

a transaction that is not a business combination and, at the time of the transaction, affects neither

accounting profi t nor taxable profi t or loss.

- in respect of taxable temporary differences associated with investments in subsidiaries, associates

and interests in joint ventures, where the timing of the reversal of the temporary differences can be

controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax

credits and unused tax losses, to the extent that it is probable that taxable profi t will be available against

which the deductible temporary differences, and the carry forward of unused tax credits and unused tax

losses can be utilised except:

- where the deferred tax asset relating to the deductible temporary difference arises from the initial

recognition of an asset or liability in a transaction that is not a business combination and, at the time

of the transaction, affects neither the accounting profi t nor taxable profi t or loss; and

- in respect of deductible temporary differences associated with investmentsin subsidiaries, associates

and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable

that temporary differences will reverse in the foreseeable future and taxable profi t will be available

against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent

that it is no longer probable that suffi cient taxable profi t will be available to allow all or part of the deferred

tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and

are recognised to the extent that it has become probable that future taxable profi t will allow the deferred

tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year

when the asset is realised or the liability is settled, based on tax rates and tax laws that have been

enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profi t or loss is recognised outside profi t or loss. Deferred

tax items are recognised in correlation to the underlying transaction either in other comprehensive

income or directly in equity and deferred tax arising from a business combination is adjusted against

goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off

current tax assets against current tax liabilities and the deferred tax relate to the same taxable entity and

the same taxation authority.


Annual Report 2012




(x) Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose

existence will be confi rmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly

within the control of the Group.

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

(y) Provision for Liabilities

Provision for liabilities are recognised when the Group has a present obligation as a result of a past event

and it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle the

obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each balance

sheet date and adjusted to refl ect the current best estimate. Where the effect of the time value of money is

material, the amount of a provision is the present value of the expenditure expected to be required to settle

the obligation. Provision are discounted using a current pre-tax rate that refl ects, where appropriate the

risks specifi c to the liability. When discounting is used, the increase in provision due to passage of time is

recognised as fi nance cost.

(z) Financial Guarantee Contracts

A fi nancial guarantee contract is a contract that requires the issuer to make specifi ed payments to reimburse

the holder for a loss it incurs because a specifi ed debtor fails to make payment when due.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs.

Subsequent to initial recognition, fi nancial guarantee contracts are recognised as income in profi t or loss over

the period of the guarantee. If the debtor fails to make payment relating to fi nancial guarantee contract when

it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability

is measured at the higher of the best estimate of the expenditure required to settle the present obligation at

the reporting date and the amount initially recognised less cumulative amortisation.

As at reporting date, no values are placed on corporate guarantees provided by the Group to secure bank

loans and other banking facilities granted to its subsidiaries where such loans and banking facilities are fully

collateralised by fi xed and fl oating charges over the property, plant and equipment and other assets of the

subsidiaries and where the directors regard the value of the credit enhancement provided by the corporate

guarantees is minimal.

2.4 Significant Accounting Estimates and Judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of the fi nancial

statements. They affect the application of the Group's accounting policies, reported amounts of assets, liabilities,

income and expenses, and disclosures made. They are assessed on an on-going basis and are based on historical

experience and other relevant factors, including expectations of future events that are believed to be reasonable

under the circumstances.

The key assumptions concerning the future and other key source of estimation or uncertainty at the balance sheet

date, that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities

within the next fi nancial year are set out below.

(i) Depreciation of Property, Plant and Equipment

The costs of property, plant and equipment of the Group and of the Company are depreciated on a straight-

line basis over the useful lives of the assets. Management estimates the useful lives of the plant and equipment

as disclosed in Note 2.3(e). These are common life expectancies applied in the industry. Changes in the

expected level of usage could have impact the useful lives and the residual values of these assets, therefore

future depreciation charges could be revised. The carrying amounts of the Group's and of the Company's

property, plant and equipment at 31 December 2012 are disclosed in Note 14 to the fi nancial statements.


Annual Report 2012



2.4 Significant Accounting Estimates and Judgements (Cont’d)

(ii) Estimation of Fair Value of Properties

In the absence of current prices in an active market for similar properties, the Group considers information

from a variety of sources, including:

(a) current prices in an active market for properties of a different nature, condition or location (or subject to

different lease or other contracts), adjusted to refl ect differences; or

(b) recent prices of similar properties based on less active market, with adjustments to refl ect any changes

in economic conditions since the date of the transactions that occurred at those prices.

(iii) Impairment of Goodwill on Consolidation

The Group determines whether goodwill is impaired at least on an annual basis, in accordance with the

accounting policy disclosed in Note 2(j). This requires an estimation of the value in use of the cash-generating

units to which the goodwill is allocated. Estimating the value in use requires the Group to make an estimate

of the expected future cash fl ows from the cash-generating unit and also to choose a suitable discount rate

in order to calculate the present value of those cash fl ows. The carrying amount of the Group's goodwill on

consolidation at 31 December 2012 is disclosed in Note 16 to the fi nancial statements.

(iv) Income Taxes

The Group has exposure to income taxes in numerous jurisdictions. There are certain transactions and

computations for which the ultimate tax determination is uncertain during the ordinary course of business.

Signifi cant judgement is involved especially in determining tax base allowances and deductibility of certain

expenses in determining the Group-wide provision for income taxes. The Group recognises liabilities for

expected tax issues based on estimates of whether additional taxes will be due. Where the fi nal tax outcome

of these matters is different from the amounts that were initially recognised, such differences will impact the

income tax and deferred tax provisions in the period in which such determination is made.

(v) Property Development

The Group recognises property development revenue and expenses in the statement of comprehensive

income by using the stage of completion method. The stage of completion is determined by the proportion

that property development costs incurred for work performed to date bear to the estimated total property

development costs.

Signifi cant judgment is required in determining the stage of completion, the extent of the property development

costs incurred, the estimated total property development revenue and costs, as well the recoverability of the

property development costs. In making the judgement, the Group evaluates based on past experience and

by relying on the work of specialists.

(vi) Impairment of Property Development Cost and Investment Properties

The Group and the Company carried out the impairment test based on a variety of estimation including

the value-in-use of the investment properties and property development costs. Estimating the value-in-use

required the Group to make an estimate of the expected future cash fl ows from these assets and also to

choose a suitable discount rate in order to calculate the present value of those cash fl ows. The carrying

amount of investment properties and property development costs of the Group and the Company as at 31

December 2012 were disclosed in Note 13 and 15 to the fi nancial statements respectively.


Annual Report 2012



2.4 Significant Accounting Estimates and Judgements (Cont’d)

(vii) Deferred Tax Assets

Deferred tax assets are recognised for all unabsorbed tax losses and deductible temporary differences to the

extent it is probable that taxable profi t will be available against which the losses and deductible temporary

differences can be utilised. Signifi cant management judgment is required to determine the amount of deferred

tax assets that can be recognised, based upon the likely timing and level of future taxable profi ts together

with future tax planning strategies. The total carrying values of unrecognised tax losses and deductible

temporary differences of the Group were disclosed in Note 21 to the fi nancial statements.

(viii) Construction Contracts

The Group and the Company recognises contract revenue and contract costs as revenue and expenses

respectively in the income statement using the stage of completion method. The stage of completion is

determined by reference to the proportion of contract costs incurred for work performed to date to the

estimated total contract costs.

Signifi cant judgment is required in determining the stage of completion, the extent of the contract costs

incurred, the estimated total contract revenue and costs, as well as the recoverability of the construction

contracts. In making the judgment, the Group evaluate based on past experience and by relying on the work

of specialists.

(ix) Contingent Liabilities

Determination of the treatment of contingent liabilities in the fi nancial statements is based on the management's

view of the expected outcome of the applicable contingency.

3. REVENUE

Group Company2012 2011 2012 2011

RM RM RM RM

Construction contracts 456,615,212 337,469,145 - -

Sales of construction materials and others 61,407,002 41,746,083 - -

Development revenue 43,965,425 18,948,866 - -

Rental of motor vehicle and machinery 3,796,795 1,975,682 - -

Servicing of motor vehicle 317,446 623,482 - -

Rendering of services - - 5,897,213 3,240,438

Dividend income from subsidiaries - - - 45,000,000

Management fees from subsidiaries - - 3,540,000 2,340,000

566,101,880 400,763,258 9,437,213 50,580,438


Annual Report 2012


4. COST OF SALES

Group Company2012 2011 2012 2011

RM RM RM RM

Construction contract costs 424,015,732 302,909,577 - -

Sales of construction materials and others 72,369,684 47,056,977 - -

Property development costs 18,338,311 18,018,185 - -

Cost of services rendered 5,747,379 3,101,382 5,747,379 3,101,382

520,471,106 371,086,121 5,747,379 3,101,382

Included in the property development costs are fi nance costs amounting RM357,935 (2011: RM Nil).

5. OTHER INCOME

Group Company2012 2011 2012 2011

RM RM RM RM

Gain on disposal of unit trust 1,105,638 - - -

Gain on disposal of quoted investment 12,310 - - -

Unrealised gain on foreign exchange 1,724,568 2,636,165 - 1,764,742

Gain on disposal of property, plant and

equipment 407,053 72,971 - -

Rental income 642,195 581,660 925,596 925,596

Miscellaneous 1,319,431 609,918 975 980

Distribution from partnership - 4,695,632 - -

5,211,195 8,596,346 926,571 2,691,318

6. FINANCE INCOME

Group Company2012 2011 2012 2011

RM RM RM RM

Interest from subsidiary company - - 2,719,952 2,671,601

AmCash interest 13,269 172,442 - -

Short term deposit 238,785 793,984 - -

Fixed deposit 1,829,980 2,710,429 179,165 139,932

Unit trust interest 15,908 273,703 - -

Dividend income on equity investment, quoted

in Malaysia - 467 - -

Interest overdue account 3,292,916 1,296,165 - -

Loan interest from associate 545,320 805,535 - -

Dividend from associate - 942,132 - -

5,936,178 6,994,857 2,899,117 2,811,533


Annual Report 2012


7. FINANCE COSTS

Group Company2012 2011 2012 2011

RM RM RM RM

Interest on irredeemable convertible unsecured

loan stocks (ICULS) 166,324 15,751 166,324 15,751

Bank overdraft interest 644,641 135,907 - -

Hire purchase interest 168,442 3,665 - -

Term loan interest 161,556 - - -

Loan interest - others 9,312 2,671 - -

Others 355,930 247,004 2,408 766

1,506,205 404,998 168,732 16,517

8. PROFIT BEFORE TAXATION

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

Group Company2012 2011 2012 2011

RM RM RM RM

Directors' remuneration 3,597,156 3,167,084 725,200 761,600

Auditors' remuneration

- statutory audit 190,000 160,900 20,000 16,000

- other services 7,000 7,000 7,000 7,000

- (over)/under provision (15,000) 31,500 - -

Depreciation of property, plant and equipment 5,597,487 5,348,434 550,834 549,447

Property, plant and equipment written off 674 175,653 - -

Rental of premises 2,176,384 1,963,908 394,368 394,368

Rental of vehicle, heavy machinery and

equipment 6,036,532 936,408 56,000 40,000

Impairment on revaluation of investment

properties - 888,731 - -

Distribution of loss from partnership 1,522,503 - - -

Amortisation of leasehold land 5,891 5,891 - -

Unrealised loss/(gain) on foreign exchange 1,244,013 (2,636,165) 2,168,549 (1,764,742)

Employees benefi ts expense 44,769,108 29,564,583 8,315,271 7,366,049

Non - executive directors'remuneration 84,000 91,000 84,000 91,000

Rental income (642,195) (581,660) (925,596) (925,596)

Gain on disposal of property, plant and

equipment (407,053) (72,971) - -


Annual Report 2012


9. EMPLOYEE BENEFITS EXPENSES

Group Company2012 2011 2012 2011

RM RM RM RM

Wages and salaries 40,966,021 26,962,140 7,468,134 6,750,897

Social security contributions 214,001 175,383 18,958 19,997

Contributions to defi ned contribution plan 3,589,086 2,427,060 828,179 595,155

44,769,108 29,564,583 8,315,271 7,366,049

Included in employee benefi ts expenses of the Group and of the Company are executive directors’ remuneration

amounting to RM3,597,156 (2011: RM3,167,084) and RM725,200 (2011: RM761,600) respectively as further disclosed

in Note 10.

10. DIRECTORS' REMUNERATION

Group Company2012 2011 2012 2011

RM RM RM RM

Executive directors' remuneration (Note 9):

Salary 2,729,476 2,187,200 520,000 520,000

Other emoluments 867,680 979,884 205,200 241,600

3,597,156 3,167,084 725,200 761,600

Non-executive directors' remuneration (Note 8):

Fees 84,000 84,000 84,000 84,000

Other emoluments - Bonus - 7,000 - 7,000

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

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

below:

Number of Directors2012 2011

Executive directors:

RM1,000,001 - RM1,500,000 1 1

RM1,500,001 - RM2,000,000 1 1

Non-executive directors:

RM20,001 - RM30,000 2 2

RM30,001 - RM40,000 1 1


Annual Report 2012


11. INCOME TAX EXPENSE

Group Company2012 2011 2012 2011

RM RM RM RM

Current income tax 5,240,200 3,060,105 419,192 482,311

Foreign taxation (91,455) 1,364,220 - -

Transferred to deferred taxation (Note 21) 1,327,040 (284,801) 180,591 (85,572)

Under/(Over) provision in prior years:

Deferred taxation (Note 21) 1,789 - - -

Malaysian income tax 7,135,725 (562,846) - (27,898)

Total income tax expense 13,613,299 3,576,678 599,783 368,841

Current income tax is calculated at the statutory tax rate of 25% (2011: 25%) of the estimated assessable profi t for

the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. During the

current fi nancial year, the income tax rate applicable to subsidiaries in Australia is at 30% (2011: 30%) and subsidiaries

in Cambodia and Brunei is at 20% (2011: 20%).

The Company has unabsorbed tax losses and unabsorbed capital allowances of approximately RM78,758 (2011:

RM78,758) and RM211,308 (2011: RM1,008,836) respectively as at 31 December 2012 for offsetting against future

taxable income.

A reconciliation of income tax expense applicable to profi t before taxation at the statutory income tax rate to income tax

expense at the effective income tax rate of the Group and of the Company is as follows:

2012 2011RM RM

GroupProfi t before taxation 22,844,021 16,558,173

Taxation at Malaysian statutory tax rate of 25% (2011: 25%) 5,101,800 13,664,625

Foreign tax 457,694 1,364,220

Under/(Over) provision in prior years 7,135,725 (562,846)

Income not subject to tax (1,035,185) (12,466,638)

Expenses not deductible for tax purposes 1,998,843 1,579,952

Underprovision of deferred tax 1,789 (3,445)

Deferred tax asset not recognised in respect of current year's tax losses - 810

Effect of changes in tax rate (45,534) -

Utilisation of tax losses and capital allowances (1,833) -

Income tax expense for the year 13,613,299 3,576,678

CompanyProfi t before taxation 903,199 47,158,219

Taxation at Malaysian statutory tax rate of 25% (2011: 25%) 225,800 11,789,555

Group relief claim - 287,558

Income not subject to tax - (11,691,186)

Over provision in prior years - (27,898)

Expenses not deductible for tax purposes 373,983 10,812

Income tax expense for the year 599,783 368,841


Annual Report 2012


12. EARNINGS PER SHARE

(a) Basic

Basic earnings per share amounts are calculated by dividing profi t for the year attributable to ordinary equity

holders of the Company by the weighted average number of ordinary shares in issue during the fi nancial year.

2012 2011RM RM

Profi t attributable to ordinary equity holders of the Company 9,230,722 12,981,495

Weighted average number of ordinary shares in issue 475,118,467 465,670,518

2012 2011sen sen

Basic earning per share for:

Profi t for the year 1.94 2.79

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

during the fi nancial year.

(b) Diluted

For the purposes of calculating diluted earnings per share, the profi t for the year attributable to ordinary equity

holders of the Company and the weighted average number of ordinary shares in issue during the fi nancial year

have been adjusted for the dilutive effects of all potential ordinary shares, i.e. warrants and share options granted

to employees and directors.

2012 2011RM RM

Profi t from continuing operations attributable to ordinary

equity holders of the Company 9,230,722 12,981,495

After-tax effect of interest on ICULS - 726

Profi t attributable to ordinary equity holders of the Company 9,230,722 12,982,221

Weighted average number of ordinary shares in issue 475,118,467 465,670,518

Effects of dilution:

ICULS - 2,603,849

Share options 709,637 2,497,210

Warrants 9,293,434 20,866,830

Adjusted weighted average number of ordinary shares in issue and issuable 485,121,538 491,638,407

The average market value of the Company's shares for purpose of calculating the dilutive effect of share options

and warrants was based on quoted market prices for the period during which the share options and warrants were

outstanding.

2012 2011sen sen

Diluted earnings per share for:

Profi t for the year 1.90 2.64


Annual Report 2012


13. INVESTMENT PROPERTIES

Group2012 2011

RM RM

At 1 January 17,791,674 18,563,332

Net loss from fair value adjustments - (888,731)

Additions - 117,073

Disposal (702,000) -

At 31 December 17,089,674 17,791,674

Investment properties comprise a number of commercial properties that are leased to the Company, subsidiary

companies and third parties, and residential properties that are leased to third parties. The subsequent renewal of the

leases are negotiated with the lessee and on average renewal period of 3 years.

Valuation of Investment Properties

Investment properties are stated at fair value, which has been determined based on valuations performed on 20 and 26

July 2011 by KGV-Lambert Smith Hampton (Johor) Sdn. Bhd., accredited independent valuers with recent experience

in the location and category of properties being valued. The valuations are based on the income method that makes

reference to estimated market rental values and equivalent yields.

2012 2011RM RM

At fair valueFreehold land and building 11,873,674 11,873,674

Leasehold land and building with unexpired lease period of more than 50 years 5,216,000 5,918,000

17,089,674 17,791,674

None of the properties are pledged as securities (2011:RM4,746,000) to secure bank facilities.

The following are recognised in profi t or loss in respect of investment properties:

2012 2011RM RM

Rental income 870,308 827,218

Direct operating expenses:

- income generating properties 223,931 204,997

- non income generating properties - -


Annual Report 2012


14

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Annual Report 2012


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523,3

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26


Annual Report 2012


14. PROPERTY, PLANT AND EQUIPMENT (CONT'D)

At 31 December 2012 - Company

Furniture Offi ceand fi ttings equipment Renovation Total

RM RM RM RM

At 1 January 2012 2,055,408 757,959 1,937,019 4,750,386

Additions - - - -

Reversal - - - -

Disposal - - - -

Reclassifi cation - - - -

At 31 December 2012 2,055,408 757,959 1,937,019 4,750,386

Accumulated DepreciationAt 1 January 2012 375,122 351,515 370,156 1,096,793

Charge for the year 205,541 151,591 193,702 550,834

Reversal - - - -

Disposal - - - -

Reclassifi cation - - - -

At 31 December 2012 580,663 503,106 563,858 1,647,627

Net Carrying Amount At 31 December 2012 1,474,745 254,853 1,373,161 3,102,759

At 31 December 2011 - Company

Furniture Offi ceand fi ttings equipment Renovation Total

RM RM RM RM

At 1 January 2011 2,043,088 692,406 1,923,604 4,659,098

Additions 6,560 10,307 13,415 30,282

Reversal - - - -

Disposal - - - -

Reclassifi cation 5,760 55,246 - 61,006

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

Accumulated DepreciationAt 1 January 2011 164,040 145,192 177,108 486,340

Charge for the year 205,322 151,077 193,048 549,447

Reversal - - - -

Disposal - - - -

Reclassifi cation 5,760 55,246 - 61,006

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

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


Annual Report 2012


14. PROPERTY, PLANT AND EQUIPMENT (CONT'D)

(a) Revaluation

Certain freehold and leasehold land and buildings of a subsidiary company were revalued by an independent

professional valuer using the open market valuation basis in year 2009 and 2000. The carrying amount of land and

buildings were adjusted to refl ect the revaluations and the resultant surpluses were credited to revaluation reserve.

Had the land and building affected been carried at their historical costs less accumulated depreciation, the carrying

amounts of the revalued assets that would have been included in the fi nancial statements at the end of the year

are as follows:-

2012 2011RM RM

Leasehold land 441,327 452,815

Freehold land and buildings 223,200 229,400

Leasehold land and buildings 482,397 496,897

1,146,924 1,179,112

(b) Security

Certain land and buildings of a subsidiary company with a net carrying value of RM1,332,908 (2011:RM1,364,394)

have been charged to fi nancial institutions as security for various credit facilities granted to the subsidiary company.

(c) Assets Acquired Under Hire Purchase Arrangements

The net carrying amounts of property, plant and equipment of the Group acquired under hire purchase arrangements

are as follows:-

2012 2011RM RM

Plant and machinery 6,070,287 -

Motor vehicles 3,572,785 -

9,643,072 -

15. PROPERTIES HELD FOR DEVELOPMENT AND PROPERTY DEVELOPMENT

COSTS

(a) Land Held for Property Development

Freehold Freehold landGroup land and Building Total

RM RM RM

CostAt 1 January 2012 19,716,726 326,443 20,043,169

Reclassifi cations 74,785 (74,785) -

Additions 11,700 - 11,700

Transfer to property development costs (7,885,339) - (7,885,339)

Transfer to property, plant and equipment (100,927) - (100,927)

At 31 December 2012 11,816,945 251,658 12,068,603


Annual Report 2012


15. PROPERTIES HELD FOR DEVELOPMENT AND PROPERTY DEVELOPMENT

COSTS (CONT’D)

(a) Land Held for Property Development (Cont’d)

Freehold Freehold landGroup land and Building Total

RM RM RM

CostAt 1 January 2011 19,706,266 326,443 20,032,709

Additions 10,460 - 10,460

Transfer to property development costs - - -

At 31 December 2011 19,716,726 326,443 20,043,169

(b) Property Development Costs

Group2012 2011

RM RM

Brought forward

- Land 5,943,000 5,943,000

- Development costs 103,345,571 103,222,616

109,288,571 109,165,616

Incurred during the year

- Transfer from land held for property development 7,885,339 -

- Development costs 26,606,753 -

- Additional cost incurred in respect of acquisition of land 2,431,500 122,955

146,212,163 109,288,571

Recognised in income statement

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

- Current year (24,338,343) -

(123,275,343) (98,937,000)

Total 22,936,820 10,351,571

Included in property developments cost incurred during the fi nancial year is profi t sharing cost amounting to

RM344,927 (2011: RM Nil).


Annual Report 2012


16. INTANGIBLE ASSETS

Group Goodwill TotalRM RM

At 1 January 2012 9,177 9,177

Amortisation - -

At 31 December 2012 9,177 9,177

At 1 January 2011 9,177 9,177

Amortisation - -

At 31 December 2011 9,177 9,177

(a) Impairment Test for Goodwill on Consolidation

Goodwill on consolidation has been allocated for impairment testing purposes to the individual entities which is

also the cash-generating units ("CGUs") identifi ed.

(b) Key Assumptions Used to Determine Recoverable Amount

The recoverable amount of a CGU is determined based on value-in-use calculations using cash fl ow projections

based on fi nancial budgets approved by the Directors covering a fi ve-year term. Cash fl ows beyond fi ve year are

projected based on assumptions that the fi fth year cash fl ow will be generated by the respective CGUs perpetually.

Discounts rate used is based on the pre-tax weighted average cost of capital.

17. INVESTMENT IN SUBSIDIARIES

Group Company2012 2011 2012 2011

RM RM RM RM

Unquoted shares, at cost - - 69,420,654 69,420,640

Amounts due from subsidiaries - - 7,297,580 5,734,458

- - 76,718,234 75,155,098

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

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

Country of Incorporation

EffectiveInterest (%) Principal Activities

2012 2011

Held by the Company:

Trans Resources Corporation Sdn. Bhd. Malaysia 100 100 Construction

TRC Land Sdn. Bhd. Malaysia 100 100 Property development

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

17. INVESTMENT IN SUBSIDIARIES (CONT’D)


Annual Report 2012


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

Country of incorporation

Effectiveinterest (%) Principal activities

2012 2011

Held by the Company: (Cont’d)

TRC Infra Sdn. Bhd. Malaysia 100 100 Dormant

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

development

ADS Projek Sdn. Bhd. Malaysia 100 - Property development

* Swan Synergy Developments Pty Ltd

(formerly known as WWCC Holdings

Pty Ltd and Swan Synergy Holdings

Pty Ltd)

Australia 100 - Construction and property

development

** TRC International Pte Ltd

***

Malaysia 100 100 Investment holding

Held through Subsidiaries:

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

project management

** TRC Land (Cambodia) Limited Kingdom of

Combodia

100 100 Commercial and trading

operations, property

investment and construction

Liputan Sutera Sdn. Bhd. Malaysia 100 100 Dormant

TRC Concrete Industries Sdn. Bhd. Malaysia 100 100 Manufacture of ready mixed

concrete

** TRC (B) Sdn. Bhd. Brunei

Darussalam

100 100 Construction and property

development

** Petrobru Build Sdn. Bhd.

***

Brunei

Darussalam

60 60 Dormant

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

* The fi nancial statements of TRC (Aust) Pty Ltd and Swan Synergy Developments Pty Ltd have not been

audited due to certain exemptions given under the Australian Corporations Act, 2001.

** Audited by another fi rm of auditors.

*** The fi nancial statements of TRC International Pte Ltd, and Petrobru Build Sdn. Bhd. have not been consolidated

with the fi nancial statements of the Group as the Directors are of the opinion that there will be of no real value

in view of the insignifi cant effect on the fi nancial statements of the Group.


Annual Report 2012


17. INVESTMENT IN SUBSIDIARIES (CONT'D)

Acquisition of Subsidiaries

(a) The Company had on 8 February 2012 acquired six hundred (600) ordinary shares in Swan Synergy Holdings Pty

Ltd ("SSHPL", formerly known as WWCC Holdings Pty Ltd), a company incorporated in Australia from Majestic

Way Pty Ltd for a cash consideration of AUD 1.00. SSHPL is a wholly-owned subsidiary of the Company and

currently dormant. The acquisition of SSHPL was primarily to undertake construction and property development

activities in Australia.

On 31 October 2012, SSHPL changed its name to Swan Synergy Developments Pty Ltd. The fair values of the

identifi able assets and liabilities of Swan Synergy Developments Pty Ltd as at the date of acquisition were:

Carrying amount

RM

Investment in unit trust 65

Cash in hand 1,946

2,011

Amount owing to a director 65

65

Net identifi able assets 1,946

Goodwill arising on acquisition:

Fair value of net identifi able assets 1,946

Less: Minority interests -

Group's interest in fair value of net identifi able assets 1,946

Capital reserve on acquisition (1,943)

Cost of business combination 3

The effect of the acquisition on cash fl ows is as follows:

Total cost of the business combination 3

Less: Cash and cash equivalents of subsidiary acquired (1,946)

Net cash infl ow on acquisition (1,943)

(b) In addition, during the fi nancial year the Company had incorporated a new wholly-owned subsidiary company

under the Companies Act 1965 known as ADS Projek Sdn. Bhd. ("ADSPSB"). The authorised share capital of

ADSPSB is RM100,000.00 divided into 100,000 ordinary shares of RM1.00 each, RM10.00 of which has already

fully paid. ADSPSB was primarily incorporated to undertake property development and other related activities.


Annual Report 2012


18. INVESTMENT IN ASSOCIATES

Group Company2012 2011 2012 2011

RM RM RM RM

Unquoted shares, at cost 13,875,049 14,157,599 - -

Share of post - acquisition reserves:

Share of loss of associates (2,025,860) (2,201,613) - -

Share of exchange reserve (3,256) 78,764 - -

11,845,933 12,034,750 - -

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

Name of Company Country of incorporation Principal activity Equity interest2012 2011

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

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

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

MAE Synergy Pty Ltd Australia Dormant - 22.22%

PSH Investment Pty Ltd Australia Dormant 33.33% -

During the fi nancial year, Pretty Sally Holdings Pty Ltd ("PSH") has disposed off 10% equity interest in MAE Synergy Pty

Ltd. which resulted in the Group effective shareholding being reduced from 22.22% to 18.89%.

On 27 July 2012, PSH has acquired 100% equity interest in PSH Investment Pty Ltd. Under the Australian Standards,

PSH is not required to prepare a group consolidated fi nancial statements because it is a proprietary limited company in

Australia.

The fi nancial year end of PetroBru (B) Sdn. Bhd. and Pretty Sally Holdings Pty Ltd is on 30 September and 30 June

respectively. For the purpose of applying the equity method of accounting, the unaudited fi nancial statements of the

associates have been used and appropriate adjustments have been made for the effects of signifi cant transaction

between their fi nancial periods to 31 December 2012. All the associates except those incorporated in Australia (exempted

from being audit under Australia law) are audited by other fi rm of auditors.

The summarised fi nancial information of the associates, not adjusted for the proportion of ownership interest held by the

Group, is as follows:

Group2012 2011

RM RM

Assets and liabilities:

Total assets 97,862,350 51,652,461

Total liabilities (93,273,329) (62,728,820)

Results:

Revenue 23,730,571 25,596,789

Profi t/(loss) for the year 3,628,159 (1,015,496)


Annual Report 2012


19. OTHER INVESTMENTS

Group Company2012 2011 2012 2011

RM RM RM RM

Investment in partnership 28,844,934 31,028,486 - -

Corporate membership, at cost 144,000 144,000 - -

28,988,934 31,172,486 - -

Available-for-sale fi nancial assets:

Unit trust in Malaysia - 22,183,657 - -

Equity investments (quoted shares in

Malaysia) - 13,440 - -

- 22,197,097 - -

28,988,934 53,369,583 - -

20. TRADE AND OTHER RECEIVABLES

Group Company2012 2011 2012 2011

RM RM RM RM

Current

Trade receivablesThird parties 176,225,298 66,406,451 - -

Construction contracts:

Retention sums (Note 23) 50,354,660 18,066,229 - -

226,579,958 84,472,680 - -

Group Company2012 2011 2012 2011

RM RM RM RM

Other receivablesDeposits 3,180,209 5,442,356 2,000 2,000

Prepayments 4,844,013 294,915 - -

Tax recoverable 2,773,392 7,766,169 118,362 106,304

Loans to associates 4,575,623 10,040,179 - -

Other receivables 11,451,109 13,749,186 9,497 501

Other receivables, net 26,824,346 37,292,805 129,859 108,805

Total 253,404,304 121,765,485 129,859 108,805

Non-current

Other receivablesLoan to Unit Trust 33,985,664 - - -

Subsidiaries - - 158,363,261 160,240,598

33,985,664 - 158,363,261 160,240,598


Annual Report 2012


20. TRADE AND OTHER RECEIVABLES (CONT’D)

(a) Trade Receivables

Trade receivables are non-interest bearing except for an amount of RM39,710,537 (2011: RM26,984,574) which is

subject to 7% (2011: 7%) interest per annum and are repayable generally on 30 to 90 days (2011: 30 to 90 days)

terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

Ageing analysis of trade receivables

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

2012 2011RM RM

Neither past due nor impaired 106,781,913 49,665,001

1 to 30 days past due not impaired 66,514,980 12,594,351

31 to 60 days past due not impaired 16,499,816 15,146,225

61 to 90 days past due not impaired 14,639,611 835,511

Over 90 days past due not impaired 22,143,638 6,231,592

226,579,958 84,472,680

Impaired - -

226,579,958 84,472,680

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM119,798,045 (2011: RM34,807,679) that are past due at the

reporting date but not impaired.

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

Amount due from subsidiaries are unsecured, repayable on demand and are subject to interest of 2% - 3% (2011:

2% - 3%) per annum.

(c) Amount Due from Associates

Amount due from associates are unsecured, non-interest bearing and are repayable on demand except for the

amount due from Delta Garden Limited which is subject to interest of 11% (2011: 11%) per annum and is repayable

within fi ve years.

(d) Other Receivables

(i) Included in the other receivables is an amount of RM Nil (2011:RM3,740,919) being deposit paid for a landed

property acquired by the Group as disclosed in Note 36 to the fi nancial statements.

(ii) Loan to Unit Trust represents advances by TRC (Aust) Pty Ltd to The Swan Synergy Unit Trust which is

established in Australia. The amount is unsecured, repayable on demand and is subject to interest of 3% per

annum.


Annual Report 2012


21

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Annual Report 2012


22. INVENTORIES

Group2012 2011

RM RM

CostRaw materials 1,378,961 759,645

Completed properties 535,459 1,183,976

1,914,420 1,943,621

During the year, the amount of inventories recognised as an expense in cost of sales of the Group was RM648,517

(2011: RM Nil). Included in cost of sales of the Group is fi nance cost amounting to RM13,008 (2011: RM Nil).

23. DUE FROM/(TO) CUSTOMERS ON CONTRACTS

Group2012 2011

RM RM

Construction costs incurred to date 2,378,298,319 2,049,120,992

Attributable profi ts 284,166,773 254,133,588

2,662,465,092 2,303,254,580

Less: Provision for foreseeable losses - -

2,662,465,092 2,303,254,580

Less: Progress billings (2,655,223,337) (2,287,140,875)

7,241,755 16,113,705

Due from customers on contract (Note 24) 63,811,975 53,807,806

Due to customers on contract (Note 32) (56,570,220) (37,694,101)

7,241,755 16,113,705

Advances received on contracts, included within trade payables (Note 31) 11,672,788 -

Retention sums on contract, included within trade receivables (Note 20) 50,354,660 18,066,229

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

Group2012 2011

RM RM

Depreciation of property, plant and equipment 2,942,317 3,043,212

Project fi nance charges 2,160,333 1,023,282

Rental of premises 669,732 531,512

Hiring and transport charges 6,560,681 5,642,148

Property, plant and equipment written off 604 170,269


Annual Report 2012


24. OTHER CURRENT ASSETS

Group Company2012 2011 2012 2011

RM RM RM RM

Amount due from customers on contract

(Note 23) 63,811,975 53,807,806 - -

Accrued billings in respect of property

development costs 23,691,065 - - -

87,503,040 53,807,806 - -

25. CASH AND CASH EQUIVALENTS

Group Company2012 2011 2012 2011

RM RM RM RM

Cash on hand and at banks 45,316,885 30,800,500 513,969 4,199,580

Deposits:

Short term deposits with licensed banks - 11,700,000 - -

Fixed deposits with licensed banks 78,666,067 86,772,928 6,269,503 5,120,259

Total cash and cash equivalents 123,982,952 129,273,428 6,783,472 9,319,839

Cash at banks earns interest at fl oating rates based on daily bank deposit rates. Short-term deposits are placed for

varying periods of between one day and one month depending on the immediate cash requirements of the Group,

and earn interests at the respective short-term deposit rates. The weighted average effective interest rates as at 31

December 2012 for the Group were NIL (2011: 2.6%).

Fixed deposits are placed for varying periods of between one month and twelve months (2011: one month and twelve

months) depending on the immediate cash requirements of the Group and the Company, and earn interests at the

respective fi xed deposit rates. The weighted average effective interest rate as at 31 December 2012 for the Group and

the Company ranges from 0.10% - 3.29% (2011: 2.14% - 3.35%).

Included in cash at banks of the Group are amounts of RM422,288 (2011: RM118,069) held pursuant to Section 7A of

the Housing Developers (Control and Licensing) Act, 1966 and are restricted from use in other operations.

Deposits with other fi nancial institutions of the Group and the Company amounting to RM70,448,592 (2011:

RM64,867,575) and RM5,269,503 (2011: RM5,120,259) respectively are pledged as securities for borrowings (Note 30).

For the purpose of the cash fl ow statements, cash and cash equivalents comprise the following as at the statement of

fi nancial position date:

Group Company2012 2011 2012 2011

RM RM RM RM

Cash and bank balances 45,316,885 30,800,500 513,969 4,199,580

Fixed deposits with licensed banks 8,217,475 33,605,353 1,000,000 -

Bank overdrafts (11,545,940) (2,382,053) - -

Total cash and cash equivalents 41,988,420 62,023,800 1,513,969 4,199,580


Annual Report 2012


26. SHARE CAPITAL AND SHARE PREMIUM

Number of ordinary shares of AmountRM0.50 each RM0.50 each

2012 2011 2012 2011RM RM

Authorised share capitalAt 1 January 1,000,000,000 500,000,000 500,000,000 500,000,000

Share split - 500,000,000 - -

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

Number of ordinaryShares of RM0.50 each Amount

Sharecapital

(issued andfully paid)

Sharecapital

(issued andfully paid)

Sharepremium

Totalshare

capitaland sharepremium

RM RM RM

1 January 2012 467,741,701 233,870,851 5,020 233,875,871

Ordinary shares issued during the year:

Pursuant to Warrant A 1,152 576 - 576

Pursuant to Warrant B 921 461 101 562

Pursuant to ESOS 5,903,280 2,951,640 118,066 3,069,706

Pursuant to ICULS 2,603,849 1,301,924 - 1,301,924

At 31 December 2012 476,250,903 238,125,452 123,187 238,248,639

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

Ordinary shares issued during the year:

Pursuant to Warrants 467,500 467,500 - 467,500

Pursuant to ESOS 3,942,000 3,942,000 906,660 4,848,660

Pursuant to ICULS 126,300 126,300 - 126,300

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

Number of ordinaryShares of RM0.50 each Amount

After Share Split and Bonus Issue 389,567,278 194,783,639 1,009,010 195,792,649

Bonus Issue 77,913,423 38,956,712 (668,606) 38,288,106

Pursuant to ESOS 261,000 130,500 5,220 135,720

Expenditure written off - - (340,604) (340,604)

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


Annual Report 2012


26. SHARE CAPITAL AND SHARE PREMIUM (CONT'D)

During the fi nancial year, the Company increased its issued and paid-up ordinary share capital from RM233,870,851 to

RM238,125,452 by way of:

(i) the issuance of 2,603,849 ordinary shares of RM0.50 each arising from conversion of Irredeemable Convertible

Unsecured Loan Stocks ("ICULS");

(ii) the issuance of 5,903,280 ordinary shares of RM0.50 each for cash pursuant to the Company's Employee Share

Options Scheme ("ESOS") at an exercise price of RM0.52 per ordinary share respectively;

(iii) the issuance of 1,152 ordinary shares of RM0.50 each through the exercise of Warrants A 2007/2017 at an

exercise price of RM0.50 per share for cash.

(iv) the issuance of 921 ordinary shares of RM0.50 each through the exercise of Warrants B 2011/2016 at an exercise

price of RM0.61 per share for cash.

The new ordinary shares issued during the fi nancial year shall rank pari passu in all respect with the existing ordinary

shares of the Company.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote

per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.

Warrants A 2007/2017

A total of 30,800,000 free warrants were issued by the Company in conjunction with the Rights Issue in 2007. Each

warrant is exercisable into one new ordinary share of RM1.00 each at the exercise price of RM1.00 per ordinary share.

Consequential to the Bonus Issue in 2008, the Company had issued an additional 6,101,520 new Warrants 2007/2017

pursuant to the adjustments in accordance with the provision under the Deed Poll executed by the Company on 15

November 2006 constituting the Warrants ("Deed Poll").

The exercise price of the existing Warrants A 2007/2017 were adjusted to RM0.50 each pursuant to the Share Split and

Bonus Issue of shares in 2011. During the fi nancial year, 1,152 Warrants A were exercised during the fi nancial year and

a total of 86,738,717 warrants remained outstanding as at 31 December 2012.

The warrants are valid for a period of ten years and shall expire on 21 January 2017.

The salient features of the Warrants 2007/2017 are as follows:-

(i) 30,800,000 free Warrants are issued in conjunction with the Rights Issue to the Entitled Shareholders on the

basis of 1 free Warrant attached to every 1 Rights Share and RM1.00 nominal value of ICULS subscribed. The

warrants are immediately detached upon issuance and traded on Bursa Malaysia Securities Berhad separately.

The warrants are traded in board lots of 100 units each carrying the right to subscribe for 100 new TRCS shares;

(ii) each Warrants entitles the registered holders at any time during the exercise period of ten (10) years from the date

of fi rst issue of the Warrants to subscribe for one (1) ordinary share of RM1.00 at an exercise price of RM1.00;

(iii) the exercise price and/or the number of the Warrants outstanding may be adjusted in accordance with the

provisions set out in the Deed Poll;

(iv) upon expiry of the exercise period, any unexercised rights will lapsed and ceased to be valid for any purposes; and

(v) The new ordinary shares to be allotted and issued upon exercise of the Warrants shall rank pari passu in all

respects with the existing ordinary shares of the Company except that they will not be entitled to any dividends,

rights, allotments and other distributions the entitlement date of which precedes or falls on the relevant conversion

date.


Annual Report 2012


26. SHARE CAPITAL AND SHARE PREMIUM (CONT’D)

Warrants A 2007/2017 (Cont’d)

Set out below are details of the free warrants issued by the Company:

Number of warrants A 2007/2017 Issuance date Expiry date Exercise price At 1.1.2012 Exercised At 31.12.2012

RM/share

20.1.2007 21.1.2017 0.50 86,739,869 (1,152) 86,738,717

Warrants B 2011/2016

Consequential to the Share Split and Bonus Issue Exercise in 2011, the shareholders gave their approval for the Company

to issue a bonus issue of warrants (Warrants B). Pursuant to the Deed Poll executed by the Company on 12 July 2011,

93,495,995 warrants were issued, and the said warrants are valid for a period of fi ve years and shall expire on 25 July

2016.

Each warrants is exercisable into one new ordinary share of RM0.50 each at the exercise price of RM0.61 per ordinary

share. During the fi nancial year, 921 Warrants B 2011/2016 were exercised and a total of 93,495,074 warrants remained

outstanding as at 31 December 2012.

The salient features of the Warrants B 2011/2016 are as follows:-

(i) 93,495,995 free Warrants are issued in registered form and constituted by a Deed Poll dated 12 July 2011 executed

by the Company ("Deed Poll"). Each Warrant carries the entitlement, at any time during the Exercise Period, to

subscribe for one (1) new Subdivided Shares at the Exercise Price of RM0.61, subject to adjustment in accordance

with the provisions of the Deed Poll;

For the purpose of trading on the Bursa Securities, one (1) board lot of Warrants shall comprise 100 Warrants

carrying the right to subscribe for 100 new Subdivided Shares at any time during the Exercise Period;

(ii) each Warrants entitles the registered holders at any time during the exercise period of fi ve (5) years from the date of

fi rst issue of the Warrants to subscribe for one (1) new subdivided share of RM0.50 at an exercise price of RM0.61;

(iii) the exercise price and/or the number of the Warrants outstanding may be adjusted in accordance with the

provisions set out in the Deed Poll;

(iv) upon expiry of the exercise period, any unexercised rights will lapsed and ceased to be valid for any purposes; and

(v) The new ordinary shares to be allotted and issued upon exercise of the Warrants shall rank pari passu in all

respects with the existing ordinary shares of the Company except that they will not be entitled to any dividends,

rights, allotments and other distributions the entitlement date of which precedes or falls on the relevant conversion

date.

Set out below are details of the bonus issue of warrants issued by the Company:

Number of warrants 2011/2016Issuance date Expiry date Exercise price At 1.1.2012 Exercised At 31.12.2012

RM/share

25.7.2011 25.7.2016 0.61 93,495,995 (921) 93,495,074


Annual Report 2012


27. IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS

On 22 January 2007, the Company issued RM30,800,000 nominal value of 5 - year 5% Irredeemable Convertible

Unsecured Loan Stocks ("ICULS") at a nominal value of RM1.00 each for working capital purposes.

Consequential to the Bonus Issue in 2008, an additional 247,433 new TRC ordinary shares would be issued by the

Company upon the full conversion of the existing ICULS pursuant to the adjustments in accordance with the provision

under the Trust Deed executed by the Company on 15 November 2006 constituting the ICULS ("Trust Deed").

Consequential to Share Split and Bonus Issue in 2011, the conversion ratio for every RM1.00 nominal value of ICULS

was adjusted from 1.20 to 2.88. The ICULS holders shall be entitled to the issuance of 1.44 new Subdivided Shares

upon conversion of every RM1.00 nominal value of ICULS at the revised conversion price of RM0.50.

All outstanding ICULS were automatically converted into new ordinary stock units of RM0.50 each at the conversion

price of RM1.00 for every 2.88 new stocks units at the maturity date. With respects to this, 2,603,849 ordinary shares

of RM0.50 each were allotted on 26 January 2012 for automatic and mandatory conversion of all outstanding ICULS to

ordinary shares.

The principal terms of the ICULS are as follows:-

(i) Conversion rights - The registered holders will have the right at any time during the Conversion Period to convert

the ICULS into fully paid new TRCS ordinary shares at the Conversion Price.

(ii) Conversion price and mode - Conversion can be done by surrendering the ICULS with an aggregate nominal value

equivalent to the conversion price of RM1.00 per share. Consequential to the Share Split and Bonus Issue, the

conversion price has been adjusted to RM0.50 per share. There will be no cash element involved.

(iii) Conversion period - The conversion of the ICULS into new ordinary shares of the Company may take place at the

option of the holders during the tenure of the ICULS.

(iv) The ICULS shall bear a coupon rate of 5% per annum payable annually in arrears on 31 December.

(v) The ICULS is unsecured and not redeemable for cash. All remaining ICULS at the end of the 5 year tenure shall be

automatically and mandatorily converted into new ordinary shares of the Company at the conversion price.

(vi) The new ordinary shares to be allotted and issued upon conversion of the ICULS shall rank pari passu in all respects

with the existing ordinary shares of the Company except that they will not be entitled to any dividends, rights,

allotments and other distributions the entitlement date of which precedes or falls on the relevant conversion date.

The proceeds received from the issue of the ICULS have been split between the liability component and the equity

component, representing the fair value of the conversion option. The ICULS are accounted for in the balance sheets of

the Group and of the Company as follows:

The movements of the ICULS during the year are as follows:

Group/Company Equity

componentLiability

componentTotal

RM RM RM

Balance at 1 January 2011 862,317 61,077 923,394

Conversion of ICULS into ordinary shares (125,763) (14,853) (140,616)

Balance at 31 December 2011 736,554 46,224 782,778

Balance at 1 January 2012 736,554 46,224 782,778

Conversion of ICULS into ordinary shares (736,554) (46,224) (782,778)

Balance at 31 December 2012 - - -


Annual Report 2012


27. IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (CONT'D)

The liability component is further analysed as follows:-

Group/Company 2012 2011

RM RM

Current (Note 31):

- not later than one year - 42,384

Non-current:

- later than one year but not later than fi ve years - 3,840

- 46,224

The interest charged for the year is calculated by applying an effective interest rate of 8% (2011: 8%) to the liability

component for the twelve month period since the loan stocks were issued.

28. OTHER RESERVES

Group

Foreign currency

translationreserve

Assetrevaluation

reserveFair value

reserve TotalRM RM RM RM

At 1 January 2012 362,625 648,023 1,078,908 2,089,556

Other comprehensive income:Group (511,457) - (1,078,908) (1,590,365)

Associates (82,020) - - (82,020)

At 31 December 2012 (230,852) 648,023 - 417,171

At 1 January 2011 155,134 648,023 716,297 1,519,454

Other comprehensive income:Group 234,976 - 362,611 597,587

Associates (27,485) - - (27,485)

At 31 December 2011 362,625 648,023 1,078,908 2,089,556

(a) Asset Revaluation Reserve

The asset revaluation reserve is used to record increases in the fair value of the asset and decreases to the extent

that the such decrease relates to an increase on the same asset previously recognised in equity.


Annual Report 2012


28. OTHER RESERVES (CONT’D)

(b) Foreign Currency Translation Reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of

the fi nancial statements of foreign operations whose functional currencies are different from that of the Group's

presentation currency. It is also used to record the exchange differences arising from monetary items which form

part of the Group's net investment in foreign operations, where the monetary item is denominated in either the

functional currency of the reporting entity or the foreign operation.

(c) Fair Value Reserve

Fair value reserve represents the cumulative fair value changes, net of tax, of available-for-sale fi nancial assets until

they are disposed or impaired.

29. RETAINED EARNINGS

As at 31 December 2012, the Company has tax exempt profi ts available for distribution of approximately RM5,242,666

(2011: RM5,242,666), subject to the agreement of the Inland Revenue Board.

Effective 1 January 2008, the Company is given the option to make an irrevocable election to move to a single tier system

or continue to use its credit under Section 108 of the Income Tax Act, 1967 for purpose of dividend distribution until the

tax credit is fully utilised or latest by 31 December 2013. The Company has not opted to move to a single tier system

and as a result, the Company can utilise the tax credit balance in the Section 108 of the Income Tax Act, 1967 as at 31

December 2012 to frank the payment of net dividends out of its retained earnings.

As at 31 December 2012, the Company has suffi cient tax credit under Section 108 of the Income Tax, 1967 to frank the

payment of dividends out of its retained profi ts.

30. BORROWINGS

Group Company2012 2011 2012 2011

RM RM RM RM

Secured:

Short term borrowingsBankers' acceptance 35,359,321 2,213,000 - -

Bank overdrafts 11,545,940 2,382,053 - -

Revolving credit 4,942,990 - - -

Revolving loan 15,000,000 - - -

Invoice fi nancing 14,143,761 - - -

Term loan 1,200,000 - - -

Promissory note fi nancing 1,847,092 - - -

Hire purchase payables (Note 33) 3,212,943 - - -

87,252,047 4,595,053 - -

Long term borrowingsTerm loan 23,800,000 - - -

Hire purchase payables (Note 33) 3,804,012 - - -

27,604,012 - - -

Total borrowings 114,856,059 4,595,053 - -


Annual Report 2012


30. BORROWINGS (CONT’D)

(i) Bank Overdrafts

The bank overdrafts of the subsidiary companies are subject to interest at rates ranging from 1.0% to 1.5% (2011:

1.0% to 1.25%) per annum above the banks' base lending rates.

(ii) Bankers' Acceptance

The bankers' acceptance are subject to commissions at rates of approximately 0.75% to 1.0% (2011: 0.75%) per

annum and interest rates of 1.5% (2011: 1.5%) per annum above the banks' base lending rate.

(iii) Other Short Term Trade Facilities

The domestic factoring facility is subject to a fl at charge of RM10,000 (2011: RM Nil). The above facilities are

secured by:-

(a) Existing Open All Monies Facilities Agreement;

(b) Legal Deed of Assignment of Contract Proceeds;

(c) Letter of Irrevocable Instruction by the subsidiary ;

(d) Certain fi xed deposits of the subsidiary;

(e) A freehold land and building and a leasehold land and building belonging to the subsidiary;

(f) A corporate guarantee by the Company; and

(g) Jointly and personal guarantee by the directors of the subsidiary.

(iv) Obligations under Finance Leases

These obligations are secured by a charge over the leased assets (Note 14). The average discount rate implicit in

the leases ranges from 2.21% to 3.23% (2011: 2.20% -3.75%) per annum.

(v) Term loan

The term loan is subject to interest rates of 2.20% (2011: Nil) per annum above the banks' base lending rates. The

term loan is secured by:-

(a) Facilities Agreement;

(b) Charge over Cash Deposit of RM5,800,000;

(c) All Monies Corporate Guaratee from the Company;

(d) Letter of Negative Pledge; and

(e) Letter of Undertaking from the Company

(vi) Revolving Loan

The revolving loan is subject to interest rate of 0.75% (2011: Nil) per annum above the bank'sbase lending rates.

The revolving loan is secured by:-

(a) Corporate Guarantee from the Company;

(b) Blanket Counter Indemnity from the subsidiary;

(c) Third Party Blanket Counter Indemnity from TRC Land Sdn. Bhd.;

(d) Letter of Negative Pledge from the subsidiary; and

(e) Letter of Undertaking from the Company.


Annual Report 2012


30. BORROWINGS (CONT’D)

(vii) Revolving Credit

The revolving credit is subject to interest rate of 1.00% (2011: Nil) per annum above the bank’s base lending rates.

The revolving credit is secured by:-

(a) Corporate Guarantee from the Company;

(b) Trade fi nance general agreement;

(c) Master trust receipt agreement;

(d) Irrevocable and unconditional letter of instruction;

(e) Irrevocable letter of payment notifi cation;

(f) Certain fi xed deposits of the subsidiary; and

(g) Assignment of performance bonds.

(viii) Promissory Note Financing

The promissory note fi nancing is subject to interest rate of 1.00% (2011: Nil) per annum above the bank's base

lending rates.

The promissory note fi nancing is secured by:-

(a) Existing Open All Monies Facilities Agreement;

(b) Corporate guarantee from the Company;

(c) Existing letter of set off over 1st party fi xed deposits; and

(d) Certain fi xed deposits of the Company.

(ix) Invoice Financing

The invoice fi nancing is subject to interest rates of 0.85% to 1.50% (2011: Nil) per annum plus bank's cost of funds.

The invoice fi nancing is secured by:-

(a) Existing Letter of Set - Off;

(b) Existing All Monies Corporate Guarantee; and

(c) Existing Letter of Negative Pledge.

31. TRADE AND OTHER PAYABLES

Group Company2012 2011 2012 2011

RM RM RM RM

Trade payablesThird parties 117,730,848 76,847,736 - -

Advances received (Note 23) 11,672,788 - - -

Trade payables, net 129,403,636 76,847,736 - -


Annual Report 2012


31. TRADE AND OTHER PAYABLES (CONT’D)

Group Company2012 2011 2012 2011

RM RM RM RM

Other payablesVendor - associate acquired ICULS 5,865,000 5,865,000 - -

- liability component (Note 27) - 42,384 - 42,384

Accruals 1,840,517 542,709 152,156 95,397

Other payables 6,111,477 8,510,330 215,875 186,179

13,816,994 14,960,423 368,031 323,960

Total trade and other payables 143,220,630 91,808,159 368,031 323,960

Trade payables are non - interest bearing and the normal trade credit terms granted to the Group range from one month

to three months.

32. OTHER CURRENT LIABILITIES

Group2012 2011

RM RM

Amount due to customers for contract (Note 23) 56,570,220 37,694,101

Progress billings in respect of property development - -

56,570,220 37,694,101

33. HIRE PURCHASE PAYABLES

Future minimum lease payments under fi nance leases together with the present value of the net minimum lease payments

are as follows:

Group2012 2011

RM RM

Future minimum lease payments:

Not later than one year 3,509,593 -

Later than one year and not later than two years 2,995,218 -

Later than two years and not later than fi ve years 946,873 -

Total future minimum lease payments 7,451,684 -

Less: Future fi nance charges (434,729) -

Present value of fi nance lease liabilities 7,016,955 -


Annual Report 2012


33. HIRE PURCHASE PAYABLES (CONT’D)

Group2012 2011

RM RM

Analysis of present value of fi nance lease liabilities:

Not later than one year 3,212,943 -

Later than one year and not later than two years 2,879,819 -

Later than two years and not later than fi ve years 924,193 -

7,016,955 -

Amount due within 12 months (3,212,943) -

Amount due after 12 months 3,804,012 -

34. EMPLOYEE BENEFITS

Employee Share Options Scheme

The Company has established a Share Options Scheme for Employees and Directors ("The Scheme") pursuant to the

By-Laws which was approved by the shareholders at the Extraordinary General Meeting held on 30 April 2004. The

Scheme shall remain in force for a duration of fi ve (5) years commencing from 22 June 2004. The Board of Directors

has approved the extension of the duration of ESOS for another fi ve years from the expiry of the initial ESOS period (21

June 2009).

The salient features and other terms of the Scheme are as follows:

(i) The maximum number of the Company's new shares to be made available under the Scheme shall not exceed

fi fteen percent (15%) of the issued and paid up capital of the Company;

(ii) Not more than fi fty percent (50%) of the Company's shares available under the Scheme shall be allocated to

Directors and senior management;

(iii) Not more than ten percent (10%) of the Company's shares available under the Scheme shall be allocated to

individual Director or eligible employees, who either singly or collectively through person connected to them holds

twenty percent (20%) or more of the issued and paid-up capital of the Company.

(iv) The eligible participants shall include eligible employees and Directors who as at the offer date have satisfi ed the

following criteria:-

a) is a confi rmed employee or appointed director within the Group;

b) has attained at least age of eighteen (18);

c) is employed full time and on the payroll of the Group;

d) is under such category and of such criteria that the option committee may from time to time decide.

(v) The option price for each share shall be based on the weighted average market price (WAMP) of the Company's

share traded on Main Market of Bursa Malaysia Securities Berhad for the fi ve (5) trading days preceding the date

of offer with a discount if any, that does not exceed ten percent (10%) from the fi ve (5) day of the Company's share

price.

(vi) Upon exercise of the options, the new ordinary shares of the Company to be issued pursuant to the Scheme will,

upon allotment and issue, rank pari passu in all respects with the existing ordinary shares of the Company; and

(vii) The persons to whom the options have been granted have no right to participate by virtue of the option in any share

issue of any other company.


Annual Report 2012


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Annual Report 2012


34. EMPLOYEE BENEFITS (CONT'D)

Employee Share Options Scheme (Cont'd)

Consequent to the Bonus Issue exercise completed in 2008, the exercise price of the Company's Employees and

Directors' Share Option Scheme had been adjusted from RM1.47 per share to RM1.23 per share.

Consequent to the Share Split and Bonus Issue exercise on 15 July 2011, the exercise price of the Company's Employees

and Directors' Share Option Scheme had been adjusted from RM1.23 per share to RM0.52 per share.

Options exercisable in a particular year but not exercised can be carried forward to the subsequent years provided they

are exercised prior to the expiry date of the Scheme on 21 June 2014.

The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the list

of option holders, including directors, holding share options of less than 480,000 shares.

The eligible employees who have been granted share options of 480,000 or more are as follows:-

Number of No. Name of options holders share options

1. Dato' Sri Sufri Bin Hj Mohd Zin 1,160,000

2. Dato' Khoo Teng San 760,000

3. Yeoh Sook Keng 580,000

4. Abdul Aziz Bin Mohamed 951,800

5. Muhamad Shahaizi Bin Abdul Hai 512,000

Details relating to options exercised during the period are as follows:

Exercise periodFair value of sharesat share issue date

Exerciseprice

Number of shares issued2012 2011

RM/share RM/share

1 January 2012 to 31 December 2012 0.55 - 0.80 0.52 5,903,280 4,203,000

Group/Company2012 2011

RM RM

Ordinary share capital - at par 2,951,640 4,072,500

Share premium 118,066 911,880

Proceeds received on exercise of options 3,069,706 4,984,380

Fair value at exercise date of shares issued 4,014,230 6,235,110

The fair value of shares issued on the exercise of options is the mean market price at which the Company's shares were

traded on the Main Market of Bursa Malaysia Securities Berhad on the day prior to the exercise of the options.


Annual Report 2012


35. DIVIDENDS

Dividends in respectof year

Dividendsrecognised in year

2012 2011 2012 2011RM RM RM RM

Recognised during the year:

First and fi nal dividend for 2011: 2 sen per

share less 25% taxation on 476,199,403

ordinary shares (1.5 sen net per ordinary

share) - 7,142,992 7,142,992 7,302,730

At the forthcoming Annual General Meeting, a provisional dividend in respect of the fi nancial year ended 31 December

2012, of 0.48 sen per share less 25% taxation on 476,270,903 ordinary shares amounting to a dividend payable of

RM1,714,575 (0.36 sen net per ordinary share) will be proposed for shareholders' approval. The fi nancial statements for

the current fi nancial year do not refl ect this proposed dividend. Such dividend, if approved by the shareholders, will be

accounted for in equity as an appropriation of retained earnings in the fi nancial year ending 31 December 2013.

36. CAPITAL COMMITMENTS

Group Company2012 2011 2012 2011

RM RM RM RM

Approved and contracted for:

Purchase of landed property in Australia - 33,435,675 - -

37. CONTINGENCIES

(a) Contingent Liabilities

Group Company2012 2011 2012 2011

RM RM RM RM

SecuredBank guarantees

Performance bond 204,478,610 195,399,623 49,775,000 49,775,000

Advance bond 25,620,900 - - -

Tender bond 250,000 1,000,000 - -

Supplier / Maintenance / Securities 1,288,625 372,500 - -

231,638,135 196,772,123 49,775,000 49,775,000

The bank guarantees are secured by fi xed deposits of the Group and the Company and a corporate guarantee by

the Company and a subsidiary company.

As at the date of the statements of fi nancial position, the Group and the Company has unutilised bank guarantees

facilities amounting to RM225,248,844 (2011: RM124,941,456) and RM225,000 (2011: RM225,000).


Annual Report 2012


37. CONTINGENCIES (CONT’D)

(a) Contingent Liabilities (Cont’d)

Group Company2012 2011 2012 2011

RM RM RM RM

Unsecured:

Corporate guarantees given to banks

for credit facilities 114,651,790 4,595,053 114,161,351 4,595,053

The total exposure of corporate guarantee given to the Group and the Company amounting to RM246,234,540

(2011:RM283,600,000) and RM244,234,540 (2011: RM283,600,000).

The corporate guarantee does not have a determinable effect on the terms of the credit facilities due to the bank

requiring parent guarantee as a pre-condition for approving the credit facilities granted to the subsidiaries. The

actual terms of the credit facilities are likely to be the best indicator of "at market" terms and hence the fair value of

the credit facilities amount received by the subsidiaries. As such, there is no value on the corporate guarantee to

be recognised in the fi nancial statements.

(b) Contingent Asset

This represents the award granted by the Arbitrator to the Group amounting RM2,209,335.05 against Carmichael

Asia Sdn. Bhd. as mentioned in Note 45 of the fi nancial statements. This amount has not been recognised in the

fi nancial statements.

38. RELATED PARTY TRANSACTIONS

(a) Sale and Purchase of Goods and Services

In addition to the related party information disclosed elsewhere in the fi nancial statements, the following signifi cant

transactions between the Group and related parties took place at terms agreed between the parties during the

fi nancial year.

Group Company2012 2011 2012 2011

RM RM RM RM

SubsidiariesSale of fi nished goods and services 15,603,291 7,858,431 - -

Infrastructural and external work 16,278,055 - - -

Sub-contractors costs 916,166 442,690 - -

Supply of labour 6,960,621 1,055,755 5,897,213 3,240,438

Management fees received 3,546,704 2,354,641 3,540,000 2,340,000

Rental charges 2,996,600 1,622,342 925,596 925,596

Food allowance 12,334 - - -

Interest charges 3,363,052 2,688,050 2,719,952 2,671,601

Dividend - 45,000,000 - 45,000,000

AssociatesManagement fees 126,759 396,958 - -

Interest charges 2,649,834 2,101,700 - -

Dividend paid by associate - 942,132 - -

The directors are of the opinion that all the transactions above have been entered into in the normal course of

business and have been established on terms and conditions that are not materially different from those obtainable

in transactions with unrelated parties.


Annual Report 2012


38. RELATED PARTY TRANSACTIONS (CONT'D)

(b) Compensation of Key Management Personnel

Group Company2012 2011 2012 2011

RM RM RM RM

Salary 2,729,476 2,187,200 520,000 520,000

Other emoluments 867,680 979,884 205,200 241,600

Directors' interest in employee share options scheme

During the fi nancial year, both of the directors have exercised the options for 1,840,000 (2011: 500,000)

ordinary shares of the Company at a price of RM0.52 (2011: RM1.23) with a total consideration of RM956,800

(2011:RM615,000) paid to the Company.

At the fi nancial year end, the total number of outstanding balance of share options granted by the Company to the

above-mentioned directors amounted to 1,160,000 (2011: 3,000,000) units. No share options have been granted

to the Company's non-executive directors.

(c) Sales of Development Properties

Group Company2012 2011 2012 2011

RM RM RM RM

Family members of directors 5,215,030 - - -

39. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group and the Company are exposed to fi nancial risks arising from their operations and the use of fi nancial

instruments. The key fi nancial risks include credit risk, liquidity risk, market risk and foreign currency risk.

The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are

executed by the Chief Financial Offi cer. The audit committee provides independent oversight to the effectiveness of the

risk management process.

The following section provides details regarding the Group and the Company's exposure to the above mentioned fi nancial

risks and the objectives, policies and process for the management of these risks.

(a) Market Risk

i) Interest Rate Risk

Interest rate risk is the risk that fair value or future cash fl ows of the Group and the Company's fi nancial

instruments will fl uctuate because of changes in market interest rates.

The Group's exposure to interest rate risk arises primarily from its loans and borrowings. The loans and

borrowings are subject to fl uctuation in the bank base lending rate.


Annual Report 2012


39. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT'D)

(a) Market Risk (Cont'd)

i) Interest Rate Risk (Cont'd)

The interest rate profi le of the Group and the Company's interest bearing fi nancial instruments based on the

carrying amounts as at the end of the reporting period is as follows:

Group Company2012 2011 2012 2011

RM RM RM RM

Fixed rate instrumentsFinancial assets 157,139,136 103,059,130 6,269,503 5,120,259

Financial liabilities 7,016,956 3,840 - -

Floating rate instruments Financial liabilities 107,839,104 4,595,053 - -

Fair value sensitivity analysis for fi xed rate instruments

The Group and the Company do not account for any fi xed rate fi nancial assets and liabilities at fair value

through profi t or loss, and the Company do not designate derivatives as hedging instruments under a fair

value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would

not affect profi t or loss.

Cash fl ow sensitivity analysis for variable rate instruments

An increase of 25 basis point at the end of the reporting period would have decreased profi t before tax by

the amount shown below and a decrease would have an equal but opposite effect. This analysis assumes

that all other variables, in particular foreign currency rates, remain constant.

2012 2011RM RM

Decrease in profi t before taxation 269,598 11,488

ii) Equity Price Risk

Market price is the risk that the fair value future cash fl ows of the Group and the Company fi nancial instruments

will fl uctuate because of changes in market prices (other than interest or exchange rates).

The Group and the Company do not have any quoted equity investments and hence is not exposed to equity

price risk.

(b) Credit Risk

Credit risk is the risk of loss that may arise on outstanding fi nancial instruments should a counterparty default

on its obligations. The Group and the Company's exposure to credit risk arises primarily from trade and other

receivables. For other fi nancial assets (including investment securities and cash and bank balances) the Group and

the Company minimises credit risk by dealing exclusively with high credit rating counterparties.

The Group and the Company's objective is to seek continual revenue growth while minimising losses incurred due

to increased credit risk exposure. The Group and the Company trades only with recognised and creditworthy third

parties. It is the Group and the Company's policy that all customers who wish to trade on credit terms are subject

to credit verifi cation procedures. In addition, receivable balances are monitored on an ongoing basis with the result

that the Group and the Company's exposure to bad debts is not signifi cant.


Annual Report 2012


39. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)

(b) Credit Risk (Cont’d)

Exposure to credit risk

At the reporting date, the Group and the Company's maximum exposure to credit risk is represented by the

carrying amount of each class of fi nancial assets recognised in the statements of fi nancial position with positive

fair values.

Information regarding credit enhancements for trade and other receivables is disclosed in Note 20.

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note

20. Deposits with banks and other fi nancial institutions and investments securities that are neither past due nor

impaired are placed with or entered into with reputable fi nancial institutions or companies with high credit ratings

and no history of default.

Financial assets that are either past due or impaired

Information regarding fi nancial assets that either past due or impaired is disclosed in Note 20.

Financial guarantees

The Group provides unsecured fi nancial guarantees to banks in respect of borrowing facilities granted to certain

subsidiaries. The Group monitors on an ongoing basis the results of the subsidiaries and repayments made by the

subsidiaries.

Intercompany balances

The Company provides advances to its subsidiaries. The Company monitors the results of the subsidiaries regularly.

The maximum exposure to credit risk is represented by its carrying amount in the Company's statement of fi nancial

position.

As at the end of the reporting period, there was no indication that the advances to those subsidiaries are not

recoverable. The Company does not specifi cally monitor the ageing of the advances to its subsidiaries.

(c) Liquidity Risk

Liquidity risk is the risk that the Group and the Company will encounter diffi culty in meeting fi nancial obligations due

to shortage of funds. The Group and the Company's exposure to liquidity risk arises primarily from mismatches of

the maturities of fi nancial assets and liabilities. The Group and the Company's objective is to maintain a balance

between continuity of funding and fl exibility through the fi nancial support from related and holding company.

Analysis of fi nancial instruments by remaining contractual maturities

The table below summarises the maturity profi le of the Group and the Company's liabilities at the reporting date

based on contractual undiscounted repayment obligations.


Annual Report 2012


39. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)

(c) Liquidity Risk (Cont’d)

Analysis of fi nancial instruments by remaining contractual maturities (Cont’d)

2012 RM

On demand or withinone year

One tofi ve years

Over fi veyears Total

RM RM RM RM

Group

Financial liabilitiesTrade and other payables 143,220,630 - - 143,220,630

Other current liabilities 56,570,220 - - 56,570,220

Loans and borrowings 87,252,047 27,604,012 - 114,856,059

Total undiscounted fi nancial liabilities 287,042,897 27,604,012 - 314,646,909

Company

Financial liabilitiesTrade and other payables 368,031 - - 368,031

Other current liabilities - - - -

Loans and borrowings - - - -

Total undiscounted fi nancial liabilities 368,031 - - 368,031

2011RM

On demand or withinone year

One tofi ve years

Over fi veyears Total

RM RM RM RM

Group

Financial liabilitiesTrade and other payables 91,808,159 - - 91,808,159

Other current liabilities 37,694,101 - - 37,694,101

Loans and borrowings 4,595,053 3,840 - 4,598,893

Total undiscounted fi nancial liabilities 134,097,313 3,840 - 134,101,153

Company

Financial liabilitiesTrade and other payables 323,960 - - 323,960

Other current liabilities - - - -

Loans and borrowings - 3,840 - 3,840

Total undiscounted fi nancial liabilities 323,960 3,840 - 327,800


Annual Report 2012


39. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT'D)

(d) Foreign Currency Risk

Foreign currency risk is the risk that the fair value of future cash fl ows of a fi nancial instruments will fl uctuate

because of changes in foreign exchange rates.

The Company has transactional currency exposure arising from advances to subsidiary that are denominated in a

currency other than the respective functional currency of Company. The Group and Company also hold cash and

cash equivalents denominated in foreign currencies for working capital purposes. The currencies giving rise to this

risk are primarily USD Dollar ("USD"), Euro Dollar ("EURO"), Australian Dollar ("AUD") and Brunei Dollar ("BND").

Denominated in Denominated inGroup Company

USD EURO BND AUDRM RM RM RM

2012Other receivables - - - 94,247,409

Cash and bank balances 12,033 744,093 - 7,221

Net exposure 12,033 744,093 - 94,254,630

2011Other receivables - - - 55,690,755

Cash and bank balances 12,661 3,566,791 - 3,230,500

Net exposure 12,661 3,566,791 - 58,921,255

Sensitivity analysis for foreign currency risk

Below demonstrates the sensitivity to a reasonably possible change in the foreign currency exchange rates against

Ringgit Malaysia, with all other variables held constant, of the Group's and Company's profi t before taxation.

A 10% strengthening of the RM against the following currencies at the end of the reporting period would have

increased profi t before taxation by the amount shown below and a corresponding decrease would have an equal

but opposite effect.

Group Company2012 2011 2012 2011

RM RM RM RM

AUD 722 323,050 9,425,463 5,892,125

USD 1,203 1,266 - -

EURO 74,409 356,679 - -

BND - - - -

Increase in profi t before taxation 76,334 680,995 9,425,463 5,892,125


Annual Report 2012


40. FAIR VALUE OF FINANCIAL INSTRUMENTS

Group Company2012 2011 2012 2011

RM RM RM RM

Financial assetsInvestment in associates 11,845,933 12,034,750 - -

Investment in subsidiaries - - 76,718,234 75,155,098

Other investments 28,988,934 53,369,583 - -

Other receivables 33,985,664 - 158,363,261 160,240,598

Trade and other receivables 253,404,304 113,999,316 11,497 2,501

Other current assets 87,503,040 53,807,806 - -

Cash and bank balances 123,982,952 129,273,428 6,783,472 9,319,839

Financial liabilitiesTrade and other payables 143,220,630 91,808,159 368,031 323,960

Other current liabilities 56,570,220 37,694,101 - -

Loans and borrowings 114,856,059 4,598,893 - 3,840

Determination of Fair Value

Fair value is defi ned as the amount for which the fi nancial instrument could be exchanged in a current transaction

between knowledgeable willing parties in an arm's length transaction, other than in a forced sale or liquidation.

The carrying amounts of fi nancial instruments reported in the fi nancial statements approximate their fair values.

41. CAPITAL MANAGEMENT

The primary objective of the Group's and the Company's capital management is to ensure that they maintain a strong

credit rating and healthy capital ratios in order to support their business and maximise shareholder value.

The Group and the Company manages their capital structure and makes adjustments to it, in light of changes in economic

conditions. To maintain or adjust the capital structure, the Group and the Company may adjust the dividend payment to

shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or

processes during the years ended 31 December 2012 and 31 December 2011.

The Group and the Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net

debt. The Group and the Company did not maintain specifi c policy on the capital management because the Group and

the Company is currently in net cash position. Furthermore, in the event that there is any shortfall in working capital

requirement, the Group and the Company could rely on funding from other subsidiaries which are in net cash position.

The Group and the Company includes within net cash, loans and borrowings less cash and bank balances. Capital

includes equity attributable to the owners of the Group and the Company less the fair value adjustment reserve.

Group Company2012 2011 2012 2011

RM RM RM RM

Loans and borrowings 114,856,059 4,598,893 - 3,840

Less: Cash and bank balances (123,982,952) (129,273,428) (6,783,472) (9,319,839)

Net cash (9,126,893) (124,674,535) (6,783,472) (9,315,999)


Annual Report 2012


41. CAPITAL MANAGEMENT (CONT’D)

Group Company2012 2011 2012 2011

RM RM RM RM

Equity attributable to the owners of the

Company 313,228,858 309,575,107 244,717,408 248,318,578

Less: - Fair value adjustment reserve (417,171) (2,089,556) - -

Total capital 312,811,687 307,485,551 244,717,408 248,318,578

Capital and net cash 321,938,580 432,160,086 251,500,880 257,634,577

Gearing ratio - - - -

Under the requirement of Bursa Malaysia Practice Note No.17/2005, the Company is required to maintain a consolidated

shareholders' equity equal to or not less than the 25% of the issued and paid up capital (excluding treasury shares) and

such shareholders' equity is not less than RM60 million. The Company has complied with this requirement.

42. SEGMENTAL INFORMATION

The Group's reportable segments, as described below, are the Group's strategic business units. The strategic business

units offer different services and are managed separately because they require different marketing strategies. For each

of the strategic business units, the Group's Chief Executive Offi cer reviews internal management reports on at least a

quarterly basis. Other business units are reported as 'others'. The following summary describes the operations in each

of the Group's reportable segments:

• Construction activity

• Property development

Performance is measured based on segment profi t before tax, interest, depreciation and amortisation. Segment profi t

is used to measure performance as management believes that such information is the most relevant in evaluating the

results of certain segments relative to other entities that operate within these industries.

Segment Assets

Segment asset is measured based on all assets (including goodwill) of a segment and is used to measure the return of

assets of each segment.

Operating segment information for the current fi nancial year ended 31 December 2012 is as follows:

Construction Property Consolidatedactivity development Others adjustments Total

RM RM RM RM RM

2012

REVENUE 473,395,807 44,465,425 92,250,717 (44,010,069) 566,101,880

PROFIT BEFORE TAX 13,194,166 5,530,945 3,747,387 371,523 22,844,021

SEGMENT ASSETS 390,372,287 160,042,369 82,656,450 - 633,071,106

2011

REVENUE 339,296,862 18,948,866 103,676,146 (61,158,616) 400,763,258

PROFIT BEFORE TAX 9,394,915 7,051,665 47,291,135 (47,179,542) 16,558,173

SEGMENT ASSETS 228,337,432 89,714,996 126,879,567 - 444,931,995


Annual Report 2012


42. SEGMENTAL INFORMATION (CONT'D)

Geographical Segments

Malaysia Australia Brunei Cambodia TotalRM RM RM RM RM

2012Revenue 476,631,177 10,580,568 78,876,489 13,646 566,101,880

Non Current Assets 63,809,795 - 4,102,571 - 67,912,366

2011Revenue 382,510,059 14,774,760 - 3,478,439 400,763,258

Non Current Assets 61,194,246 - - - 61,194,246

Non current assets information presented above consist of the following items as presented in the consolidated statement

of fi nancial position.

2012 2011RM RM

Property, plant and equipment 38,744,912 23,350,226

Properties held for development 12,068,603 20,043,169

Investment properties 17,089,674 17,791,674

Intangible assets 9,177 9,177

67,912,366 61,194,246

The construction activity and property development segments are managed on a worldwide basis. In presenting

information on the basis of geographical segments, segment revenue is based on geographical location of customers.

Segment assets are based on the geographical location of the assets. The amounts of non-current assets do not include

fi nancial instruments (including investments in associates) and deferred tax assets.

43. SIGNIFICANT EVENTS

(a) The wholly-owned subsidiary of the Group, Trans Resources Corporation Sdn. Bhd. ("TRC") had on 12 March

2012 received the Letter of Award from Kompleks Dayabumi Sdn Bhd, in relation to the contract known as 'The

Construction and Completion of the Main Contract and Associated Works for the Proposed Alteration and Addition

Works to Existing Kompleks Dayabumi (Phase 2), on Lot 45, Jalan Sultan Hishamuddin, Kuala Lumpur for a

contract sum of RM36,000,000.

(b) TRC had also on 18 May 2012 received the Letter of Acceptance from Mass Rapid Transit Corporation Sdn. Bhd.,

in relation to the contract known as 'Package DPT1: Construction and Completion of Sungai Buloh Maintenance

Depot, Administration Building, External Works and Other Associated Works for Projek Mass Rapid Transit Lembah

Kelang: Jajaran Sungai Buloh - Kajang for a contract sum of RM458,980,000.

(c) In addition, TRC had on 13 June 2012 accepted the offer from Bintulu Port Holdings Berhad, in relation to the

contract known as "The Construction and Completion of The Proposed Samalaju Port Development Project at

Samalaju, Bintulu, Sarawak - Interim Port Facility Package (Contract No. SPMU/01/2012)" for a contract sum of

RM193,980,000. The project is expected to strengthen the operations of the Group in East Malaysia.

(d) Further, TRC had on 5 September 2012 received the letter of award from Syarikat Muhibah Perniagaan &

Pembinaan Sdn. Bhd., in relation to the contract known as 'Construction and Completion of Elevated Stations and

Other Associated Works at Sungai Buloh, Kampung Baru Sungai Buloh and Kota Damansara (Package S1)' for a

contract sum of RM283,668,000.


Annual Report 2012


43. SIGNIFICANT EVENTS (CONT'D)

(e) The Company had on 8 February 2012 acquired six hundred (600) ordinary shares in Swan Synergy Holdings Pty

Ltd ("SSHPL", formerly known as WWCC Holdings Pty Ltd) , a company incorporated in Australia from Majestic

Way Pty Ltd for a cash consideration of AUD 1.00. SSHPL is a wholly-owned subsidiary of the Company and

currently dormant. The acquisition of SSHPL was primarily to undertake construction and property development

activities in Australia.

On 31 October 2012, SSHPL changed its name to Swan Synergy Developments Pty Ltd.

(f) In addition, the Company had incorporated a new wholly-owned subsidiary company under the Companies Act

1965 known as ADS Projek Sdn. Bhd. ("ADSPSB"). The authorised share capital of ADSPSB is RM100,000.00

divided into 100,000 ordinary shares of RM1.00 each, RM10.00 of which has already fully paid. ADSPSB was

primarily incorporated to undertake property development and other related activities.

44. SUBSEQUENT EVENTS

(a) New Projects Secured

(i) TRC has secured a new project from Jabatan Kerja Raya Sarawak known as "Jalan Akses Awam dari Sangan

ke Kapit melalui Kawasan Perlombongan Arang Batu Nanga Merit, Bahagian Kapit, Sarawak (Pakej A: Dari

Sangan ke Sungai Anap) - Section 1A: From KM0 to KM18.2)" for a contract sum of RM169,898,000. This

project is part of the Sarawak Corridor of Renewable Energy (SCORE) infrastructure development projects

announced by the Government earlier. The Contract Document on the Project was signed on 15 January

2013.

(ii) The Company's wholly-owned subsidiary, ADS Projek Sdn Bhd had on 11 March 2013 entered into a Joint

Land Development Agreement with Syarikat Prasarana Negara Berhad for the proposed joint development

of a portion of land identifi ed as Lots 59216, 59215, PT1 & PT3, TK-1 Jalan Lapangan Terbang Subang,

Petaling Jaya, Selangor surrounding Station 2 of the Kelana Jaya Line Extension Project with a total land area

available for Development of not less than 49,776 square meters. The Proposed Development is estimated

to generate a Gross Development Value of RM687,597,220.00.

(b) Employee Share Option Scheme

The Company issued 20,000 ordinary shares of RM0.50 each for cash pursuant to the Company's ESOS at

exercise price of RM0.52 per ordinary share.

45. LITIGATIONS

Save as disclosed below, the Company and its subsidiary companies are not involved in any material litigation, either

as plaintiff or defendant, claims or arbitration and the Board does not have knowledge of any proceedings, pending

or threatened against the Company and its subsidiary companies, or of any facts likely to give rise to any proceedings

which might materially and adverse affect the fi nancial position and business of the Company and/or its subsidiaries

companies:-

(i) Arbitration between the Company's subsidiary, Trans Resources Corporation Sdn. Bhd. ("TRC") and Carmichael

Asia Sdn. Bhd. ("Carmichael")

On 18 August 2008, TRC, the wholly owned subsidiary of the Company, entered into a contract with Carmichael whereby TRC employed Carmichael for the manufacturer/procurement of two (2) units of fi re-fi ghting engines ("Fire Fighting Units") for the Sultan Mahmud Airport situated in Kuala Terengganu ("the Agreement"). Carmichael was

to deliver the Fire Fighting Units by January 2009. However, they were only able to supply one (1) Fire Fighting Units.

This has caused TRC to sources and obtain supply from another supplier, CME Edaran Sdn. Bhd., at a higher cost.

TRC is claiming an amount of RM2,209,335.05 from Carmichael for breach of contract due to Carmichael's failure

to deliver the remaining Fire Fighting Unit within the prescribed date, resulting in TRC incurring additional cost for

engaging another supplier. Carmichael is disputing the amount and both parties have agreed to proceed with the

matter by way of arbitration as provided for in clause 25 of the Agreement.


Annual Report 2012


45. LITIGATIONS (CONT’D)

(i) Arbitration between the Company’s subsidiary, Trans Resources Corporation Sdn. Bhd. (“TRC”) and Carmichael

Asia Sdn. Bhd. (“Carmichael”) (Con’t)

The Arbitration process has just been completed whereby the Arbitrator has handed down an award in favour of

TRC on 17 August 2012, together with cost of RM46,552.20.

On 23 January 2013, a formal demand was sent to Carmichael. The amount is yet to be settled.

(ii) Calling for the Performance Bond from AL-Hidayah Investment Bank (Labuan) Limited.

On July 2006, Trans Resources Corporation Sdn. Bhd. ('TRC'), the wholly owned subsidiary of the Company

entered into a contract with Syarikat Elektrik RBA Sdn. Bhd. (the "Sub Contractor") whereby the Sub-Contractor

was to design, contruct, install, test, commission and maintain the Kopleks Penjara Baru Bentong in Pahang Darul

Makmur (the "Contract"). The Sub-Contractor has provided TRC with a performance bond dated 7 July 2006

form AL-Hidayah Investment Bank (Labuan) Limited (the "Bank") ("Performance Bond") whereby the Bank will

pay TRC an amount of RM2,321,850.00 if the Sub-contractor is unable to perform the contract. Due to the non-

performance of the contract on the part of the Sub-Contractor, TRC has called on the Performance Bond of an

amount of RM2,321,850.00. The Bank disputed liability.

The necessary legal action has been initiated and TRC has obtained Judgement in Default against the Bank. Since

there was no payment made, TRC had initiated the Writ of Seizure and Sale against the Bank. The Bank, at the

same time had fi led an application to set aside judgement and stay application to the Court.

46. SUPPLEMENTARY FINANCIAL INFORMATION ON THE BREAKDOWN

OF REALISED AND UNREALISED PROFITS OR LOSSES

The breakdown of the retained earnings of the Group and of the Company as at 31 December 2012 into realised and

unrealised earnings is presented as follows, in accordance with the directive issued by Bursa Malaysia Securities Berhad

and prepared in accordance with Guidance on Special Matter No.1, Determination of Reliased and Unrealised Profi ts or

Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by

the Malaysian Institute of Accountants:-

Group Company2012 2011 2012 2011

RM RM RM RM

Total retained earnings of the Company

and its subsidiaries:

Realised 124,688,627 118,755,730 4,097,961 8,986,205

Unrealised 1,687,126 6,282,123 2,370,808 4,719,948

Total share of retained earnings from

associates:

Realised (2,989,045) (2,201,613) - -

Unrealised 38,565 - - -

123,425,273 122,836,240 6,468,769 13,706,153

Less: Consolidation adjustments (48,862,225) (49,963,114) - -

Retained earnings as per fi nancial statements 74,563,048 72,873,126 6,468,769 13,706,153


Annual Report 2012

LIST OF PROPERTIES

No Location TenureDescription/existing use

Approx ageof

buildingsLand area/

build up area

Net book value

31 December 2012

Date ofvaluation

RM

1 Lot No.3626

Section 16

Kuching Central Land District

Sarawak

60-year

leasehold

expiring

18/4/2059

4-storey

shop/offi ce

14 years 2,214.2 sq ft/

8,856.8 sq ft

1,078,246.44 30/11/2009

2 Lot No.PT19447

Mukim of Ampangan

District of Seremban

Negeri Sembilan

99-year

leasehold

expiring

18/9/2095

Agricultural Land - 9.516 acres 482,324.44 21/9/2000

3 Developer's Parcel No. 47(218)

First and Second Floors of an

Intermediate 4-storey

shop/offi ce building

Taman Melawati Metro 1

Phase 4 Town Centre

Selangor

Freehold First and Second

Floors of 4-storey

shop/offi ce

22 years 1,760.0 sq ft

each

571,926.13 30/11/2009

4 47 Units of Apartments

Idaman Senibong Apartment

Taman Bayu Senibong

Johor Bahru, Johor

Leasehold

expiring

21/1/2097

Apartments 7 1/2 years Varying from

808.0 sq ft,

815.0 sq ft &

868.0 sq ft

5,216,000.00 20/07/2011

5 HS(D) 346773 PTD 166642

Mukim of Plentung, District of

Johor Bahru, State of Johor

(together with a double storey

terrace house erected thereon)

Freehold Double storey

terrace

9 years 239.6606 sq

metres

251,658.00 -

6 A part of HS(D) 310780

PTD 158256

Mukim of Plentong, District of

Johor Bahru, State of Johor

Freehold Residential

land

- 27.636 acres 11,816,945.05 -

7 Lot No.196, Bandar Ulu Klang

71/2 Mile, Ulu Klang

Gombak, Selangor

Freehold Residential

land

- 3.5132 hectares 7,986,266.00 -

8 Mukim 2908, Lot 2265

Mukim Dengkil, Daerah Sepang

Selangor Darul Ehsan

Freehold Agriculture

land

- 2.6052 hectares 1,080,155.00 -

9 Shop Offi ce & Corporate

Building

TRC Business Centre

Jalan Andaman Utama

68000 Ampang


Freehold Shop Offi ce 4 years Varying from

1121sq ft,

1209 sq ft,

1319 sq ft,

1344 sq ft,

1370 sq ft,

1469 sq ft,

1533 sq ft,

1775sq ft &

2922.71 sq ft

15,233,312.84 26/07/2011


Annual Report 2012

ANALYSIS OF SHAREHOLDINGS AS AT 26 APRIL 2013

Authorised Share Capital : RM 500,000,000 divided into 1,000,000,000 shares of RM 0.50 each

Fully Paid-Up Capital : RM 238,135,451.50

Issued Share Capital : 476,270,903 shares

Class of Shares : Ordinary Shares of RM0.50 each

Voting Rights : One Vote Per ordinary Share

No. of Shareholders : 4,047

DISTRIBUTION OF SHAREHOLDINGS

Category No.of Holders % No.of Shares %

Less than 100 56 1.38 2,582 0.00

100 - 1,000 173 4.27 92,982 0.02

1,001 - 10,000 1,923 47.52 11,768,692 2.47

10,001 - 100,000 1,694 41.86 50,477,307 10.60

100,001 and less than 5% of issued shares 196 4.84 195,430,584 41.03

5% and above of the issued shares 5 0.12 218,498,756 45.88

Total 4,047 100.00 476,270,903 100.00

LIST OF SUBSTANTIAL SHAREHOLDERS

Direct IndirectNo. Name No. of Shares % No. of Shares %

1 TRC Capital Sdn Bhd 59,553,600 12.50 - -

2 Kolektif Aman Sdn Bhd 58,521,600 12.29 - -

3 Dato’ Sri Sufri Bin Hj Mohd Zin 46,371,517 9.74 118,075,200* 24.79

4 Leong Kam Heng 45,371,947 9.53 - -

5 Lembaga Tabung Haji 44,849,952 9.42 - -

6 Khoo Tew Choon 32,374,372 6.80 - -

DIRECTORS’ INTEREST IN SHARES

Direct IndirectNo. Name No. of Shares % No. of Shares %

1 Dato’ Sri Sufri Bin Hj Mohd Zin 46,371,517 9.74 118,075,200* 24.79

2 Dato’ Abdul Aziz Bin Mohamad 14,868,681 3.12 118,075,200* 24.79

* Deemed interested by virtue of his shareholdings in Kolektif Aman Sdn Bhd and TRC Capital Sdn Bhd


Annual Report 2012

ANALYSIS OF SHAREHOLDINGS (CONT’D)AS AT 26 APRIL 2013

LIST OF 30 LARGEST SHAREHOLDERS

No Name of Shareholder Shares %

1. Kenanga Nominees (Tempatan) Sdn Bhd 59,553,600 12.50

Pledged Securities Account For TRC Capital Sdn Bhd


Pledged Securities Account For Kolektif Aman Sdn Bhd

3. Lembaga Tabung Haji 44,849,952 9.42


Pledged Securities Account For Khoo Tew Choon


Pledged Securities Account For Sufri Bin Mhd Zin


Pledged Securities Account For Leong Kam Heng

7. Muhamad Shahaizi Bin Abdul Hai 20,400,000 4.28


Pledged Securities Account For Yap Yon Tai

9. Cimsec Nominees (Tempatan) Sdn Bhd 17,499,197 3.67

CIMB Bank For Sufri Bin Mhd Zin (M28002)

10. RHB Capital Nominees (Tempatan) Sdn Bhd 17,376,800 3.65


11. Abdul Aziz Bin Mohamad 12,000,000 2.52

12. Amanahraya Trustees Berhad 7,161,800 1.50

Public Islamic Select Treasures Fund

13. Ngiam Buey Buey 4,620,297 0.97

14. Khoo Teng San 3,847,647 0.81

15. Malacca Equity Nominees (Tempatan) Sdn Bhd 3,608,020 0.76

Exempt An For Philip Capital Management Sdn Bhd


17. Citigroup Nominees (Tempatan) Sdn Bhd 2,733,120 0.57

Pledges Securities Account For Sufri Bin Mhd Zin (473402)


Pledged Securities Account For Leong Kam Heng (473525)

19. Amanahraya Trustees Berhad 2,262,500 0.48

Public Islamic Treasures Growth Fund


Annual Report 2012

ANALYSIS OF SHAREHOLDINGS (CONT’D)AS AT 26 APRIL 2013

LIST OF 30 LARGEST SHAREHOLDERS (CONT’D)

No Name of Shareholder Shares %

20. Ooi Cheng Huat @ Ooi Peng Huat 2,102,120 0.44

21. HLB Nominees (Tempatan) Sdn Bhd 2,028,000 0.43

Pledged Securities Account For Lee Chiah Cheang

22. EB Nominees (Tempatan) Sendirian Berhad 1,939,680 0.41

Pledged Securities Account For Khoo Tew Choon (SFC)

23. Cimsec Nominees (Tempatan) Sdn Bhd 1,887,120 0.40

CIMB Bank For Leong Kam Heng (M28001)

24. EB Nominees (Tempatan) Sendirian Berhad 1,753,344 0.37

Pledged Securities Account For Leong Kam Heng (SFC)

25. Chin Yu Nominees Pty Ltd 1,515,744 0.32

26. Kong Kim Sing 1,500,000 0.31

27. Ooi Chin Seng 1,300,040 0.27


Pledged Securities Account For Wong Chong Che (471772)

29. Sufri Bin Mhd Zin 1,000,000 0.21

30. Malacca Equity Nominees (Tempatan) Sdn Bhd 983,520 0.21

Exemptan For Philip Capital Management Sdn Bhd (EPF)

Total 373,575,405 78.44


Annual Report 2012

ANALYSIS OF WARRANT A HOLDINGS AS AT 26 APRIL 2013

Number of Warrant : 86,738,717 10 years free detachable warrants

Exercise Price : RM0.50 per the Company’s Share

Voting Rights : Nil

No. of Warrants Holders : 708

DISTRIBUTION OF WARRANT HOLDINGS

Category No.of Holders % No.of Warrant %

Less than 100 38 5.37 2,037 0.00

100 - 1,000 21 2.97 8,669 0.01

1,001 - 10,000 197 27.82 1,082,539 1.25

10,001 - 100,000 372 52.54 12,670,066 14.61

100,001 and less than 5% of issued Warrants 76 10.73 32,629,412 37.62

5% and above of the issued Warrants 4 0.56 40,345,994 46.51

Total 708 100.00 86,738,717 100.00

LIST OF 30 LARGEST WARRANT HOLDERS

No Name Of Warrant Holder Warrants %

1. Kolektif Aman Sdn. Bhd. 17,510,400 20.19

2. Sufri Bin Mhd Zin 11,059,200 12.75

3. TRC Capital Sdn. Bhd. 7,430,400 8.57





6. Leong Kam Heng 2,852,253 3.29

7. Khoo Teng San 2,759,609 3.18




10. Khoo Shiau Hoon 1,082,818 1.25

11. CIMSEC Nominees (Tempatan) Sdn Bhd 1,055,037 1.22


12. Yeoh Sook Keng 891,072 1.03

13. Khoo Tat Wai 837,320 0.97


Annual Report 2012

ANALYSIS OF WARRANT A HOLDINGS (CONT’D)AS AT 26 APRIL 2013

LIST OF 30 LARGEST WARRANT HOLDERS (CONT’D)


14. Chin Yu Nominees Pty Ltd 703,872 0.81

15. Yap Swee Hang 654,480 0.75

16. Public Nominees (Tempatan) Sdn Bhd 636,200 0.73

Pledged Securities Account For Tan Siew Cheng (E-IMO)

17. JF Apex Nominees (Tempatan) Sdn Bhd 543,600 0.63

Pledged Securities Account For Chia Yong Fei (STA 1)

18. Maybank Secrities Nominees (Tempatan) Sdn Bhd 513,700 0.59

Pledged Securities Account For Tan Lam An (MARGIN)

19. Loh Leong Kong 484,900 0.56

20. Maybank Nominees (Tempatan) Sdn Bhd 462,700 0.53

Woon Chee Keong

21. Amsec Nominees (Tempatan) Sdn Bhd 415,300 0.48

Pledged Securities Account For Ooi Khoon Im

22. Ngiam Buey Buey 366,278 0.42

23. RHB Capital Nominees (Tempatan) Sdn Bhd 365,000 0.42

Pledged Securities Account For Ngu Ting Tong (LBU)

24. Maybank Securities Nominess (Asing) Sdn Bhd 350,000 0.40

Maybank Kim Eng Securities Pte Ltd For Yeo Thong Hiang

25. TA Nominees (Tempatan) Sdn Bhd 344,000 0.40

Pledged Securities Account For Chua Kian Lam

26. Ng Kok Cheng @ Ng Kee Seng 336,960 0.39

27. TA Nominees (Tempatan) Sdn Bhd 310,000 0.36

Pledged Securities Account For Ngu Ting Tong

28. Tiew Shwu Ping 270,000 0.31

29. Ang Hioh 259,200 0.30

30. Lee Kok Hin 240,000 0.28

Total 65,152,790 75.11


Annual Report 2012

ANALYSIS OF WARRANT B HOLDINGS AS AT 26 APRIL 2013

Number of Warrant : 93,495,074 5 years free detachable warrants

Exercise Price : RM0.61 per the Company’s Share

Voting Rights : Nil

No. of Warrants Holders : 2,220

DISTRIBUTION OF WARRANT HOLDINGS

Category No.of Holders % No.of Warrant %

Less than 100 250 11.26 12,160 0.01

100 - 1,000 435 19.59 287,441 0.31

1,001 - 10,000 1,112 50.09 4,152,459 4.44

10,001 - 100,000 364 16.40 12,495,603 13.36

100,001 and less than 5% of issued Warrants 53 2.39 27,838,318 29.78

5% and above of the issued Warrants 6 0.27 48,709,093 52.10

Total 2,220 100.00 93,495,074 100.00

LIST OF 30 LARGEST WARRANT HOLDERS



Pledged Securities Account For TRC Capital Sdn Bhd


Pledged Securities Account For Kolektif Aman Sdn Bhd

3. Lembaga Tabung Haji 8,969,990 9.59






Pledged Securities Account For Sufri Bin Mhd Zin

7. Muhamad Shahaizi Bin Abdul Hai 4,080,000 4.36



9. CIMSEC Nominees (Tempatan) Sdn Bhd 3,579,839 3.83


10. RHB Capital Nominees (Tempatan) Sdn Bhd 2,775,360 2.97




Annual Report 2012

ANALYSIS OF WARRANT B HOLDINGS (CONT’D)AS AT 26 APRIL 2013

LIST OF 30 LARGEST WARRANT HOLDERS (CONT’D)


12. Ngiam Buey Buey 924,059 0.99

13. Citigroup Nominees (Tempatan) Sdn Bhd 546,624 0.58

Pledged Securities Account For Sufri Bin Mhd Zin (473402)

14. CIMSEC Nominees (Tempatan) Sdn Bhd 529,700 0.57

CIMB Bank For Len Book Learn (M66002)

15. Citigroup Nominees(Tempatan) Sdn Bhd 477,100 0.51

Pledged Securities Account For Leong Kam Heng (473525)

16. Abdul Aziz Bin Mohamad 405,736 0.43

17. HLB Nominees (Tempatan) Sdn Bhd 405,600 0.43

Pledged Securities Account For Lee Chiah Cheang

18. EB Nominees (Tempatan) Sendirian Berhad 387,936 0.41

Pledged Securities Account For Khoo Tew Choon (SFC)

19. CIMSEC Nominees (Tempatan) Sdn Bhd 377,424 0.40

CIMB Bank For Leon Kam Heng(M28001)

20. EB Nominees (Tempatan) Sendirian Berhad 350,668 0.38

Pledged Securities Account For Leong Kam Heng (SFC)

21. Chin Yu Nominees Pty Ltd 303,148 0.32

22. Yeo Eng Chong @ Yeo Yong Chong 288,600 0.31

23. Tan Khoo Kian 269,101 0.29

24. SJ SEC Nominees (Tempatan) Sdn Bhd 255,700 0.27

Pledged Securities Account For Yong Fee Ming (SMT)

25. Tan Gim Guan 250,000 0.27


Pledged Securities Account For Hew Choong Hee (E-TSA/UTM)

27. RHB Capital Nominees (Tempatan) Sdn Bhd 247,800 0.27

Pledged Securities Account For Low Bee Kiew (CEB)

28. KTC Holdings Sdn Bhd 245,337 0.26

29. ECML Nominees (Tempatan) Sdn Bhd 220,000 0.24

Pledged Securities Account For Lim Ai Leng


Pledged Securities Account For Lee Bui Chiung (E-PLT/CST)

Total 72,334,452 77.37


Annual Report 2012

NOTICE OF SIXTEENTH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Sixteenth Annual General Meeting of the Company will be held at Indah Ballroom,

Flamingo Hotel, 5, Tasik Ampang, Hulu Kelang, 68000 Ampang, Selangor on Wednesday, the 26th day of June, 2013 at 10.30

a.m. for the purpose of transacting the following businesses:-

AGENDA

ORDINARY BUSINESS

1 To receive and adopt the Audited Financial Statements, Report of the Directors and Report of the

Auditors thereon for the year ended 31 December 2012 Resolution 1

2 To approve the payment of fi rst and fi nal gross dividend of 0.48 sen per share less 25% tax for the year

ended 31 December 2012 Resolution 2

3 To approve the payment of Directors’ Fees in respect of the fi nancial year ended 31 December 2012 Resolution 3

4 To re-elect Dato’ Abdul Aziz bin Mohamad who shall retire as Director of the Company pursuant to

Articles 84 of the Company's Articles of Association. Resolution 4

5 To re-elect Gen (R) Tan Sri Mohd Shahrom Bin Dato’ Hj Nordin who shall retire as Director of the Company

pursuant to Articles 84 of the Company's Articles of Association. Resolution 5

6 To re-appoint Messrs AljeffriDean as Auditors of the Company to hold offi ce until the conclusion of the

next Annual General Meeting and to authorise the Directors to fi x their remuneration. Resolution 6

SPECIAL BUSINESS

To consider and if thought fi t, to pass the following ordinary resolution, with or without modifi cation:-

7 AUTHORITY TO ISSUE SHARES

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised

to issue shares in the Company at any time until the conclusion of the next Annual General Meeting and

upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion,

deem fi t provided that the aggregate number of shares to be issued does not exceed ten per centum

(10%) of the issued and paid-up ordinary share capital of the Company for the time being, subject always

to the approvals of the relevant regulatory authorities.” Resolution 7

8 PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN SHARES

“THAT subject to compliance with all applicable rules, regulations and orders made pursuant to the

Companies Act, 1965 (“Act”), provisions in the Company’s Memorandum and Articles of Association,

the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and any other relevant

authorities, the Company be and is hereby authorised to purchase such number of ordinary shares of

the company as may be determined by the Directors of the Company from time to time through Bursa

Securities upon such terms and conditions as the Directors may deem fi t and expedient in the interest of

the Company PROVIDED THAT:-

(1) the aggregate number of shares purchased does not exceed ten per centum (10%) of the issued

and paid-up share capital of the Company as quoted on Bursa Securities as at the point of

purchase;

(2) the maximum fund to be allocated by the Company for the purpose of purchasing such number of

ordinary shares shall not exceed the retained profi t and share premium account of the Company.

As at the fi nancial year ended 31 December 2012, the audited retained profi t and share premium

of the Company stood at RM6,468,769 and RM123,187 respectively;


Annual Report 2012

NOTICE OF SIXTEENTH ANNUAL GENERAL MEETING (CONT’D)

(3) The renewal of authority conferred by this resolution will commence immediately upon passing of

this resolution and will continue to be in force until:-

(a) at the conclusion of the next AGM of the Company following the general meeting in which the

authorization is obtained, at which time it shall lapse unless by ordinary resolution passed at

that meeting, the authority is renewed either unconditionally or subject to conditions; or

(b) the expiration of the period within which the next AGM of the Company is required by law to

be held; or

(c) revoked or varied by ordinary resolution passed by the shareholders of the Company in a

general meeting.

whichever occurs fi rst;

AND THAT upon completion of the purchase(s) of the ordinary shares of the Company, the Directors of

the Company be and are hereby authorised to deal with the ordinary shares so purchased in the following

manners:-

(a) to cancel the ordinary shares so purchased; or

(b) to retain the ordinary shares so purchased as treasury shares for distribution as dividend to

shareholders and/or resell on Bursa Securities or subsequently cancelled; or

(c) to retain part of the ordinary shares so purchased as treasury shares and cancel the remainder; and

(d) in any other manner prescribed by the Act, rules, regulations and orders made pursuant to the Act,

the Listing Requirements of Bursa Securities and any other relevant authorities for the time being

in force.

AND THAT the Directors of the Company be and are hereby authorised to act and to take all such

steps as they may deem necessary or expedient in order to implement, fi nalise and give full effect to the

aforesaid share buy-back with full powers to assent to any conditions, modifi cations, variations, and/

or amendments as may be required or imposed by the relevant authorities and to do all such acts and

things (including executing all documents) as the Board may deem fi t and expedient in the best interest

of the Company.” Resolution 8

9. To transact any other business of which due notice shall be given in accordance with the Articles of

Association of the Company and the Companies Act, 1965.

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS HEREBY GIVEN, that a fi rst and fi nal gross dividend of 0.48 sen per share less 25% tax in respect of the fi nancial

year ended 31 December 2012 will be paid on 15 July 2013 to shareholders whose names appear on the Company’s Register

of Depositors on 28 June 2013.

A Depositor shall qualify for entitlement to the dividend only in respect:-

(a) Shares transferred into the Depositor’s Securities Account before 4.00pm on 28 June 2013 in respect of ordinary

transfers; and

(b) Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa

Malaysia Securities Berhad.


Annual Report 2012

BY ORDER OF THE BOARD

ABDUL AZIZ MOHAMED (LS 007370)

Secretary


4th June 2013

Notes:

1. A proxy may but need not be a member of the Company and the provision of section 149 (1) (b) of the Act shall not apply to the Company.

2. To be valid the proxy form duly completed must be deposited at the registered offi ce of the Company not less than forty-eight (48) hours

before the time for holding the meeting or any adjournment thereof.

3. A member holding one thousand (1,000) ordinary shares or less may appoint only one (1) proxy to attend and vote at the meeting.

4. A member holding more than one thousand (1,000) ordinary shares may appoint up to two (2) proxies to attend and vote at the meeting.

5. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifi es the proportions of his holdings to

be represented by each proxy.

6. Where a member is an authorised nominee as defi ned under the Central Depositories Act, it may appoint at least one (1) proxy in respect

of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.

7. If the appointer is a corporation, the proxy form must be executed under its Common Seal or under the hand of its attorney.

8. Only members whose names appears in the Record of Depositors as at 19 June 2013 will be entitled to attend and vote at the meeting.

EXPLANATORY NOTES TO THE SPECIAL BUSINESS

Ordinary Resolution No. 7 – Authority for allotment of shares

The proposed Ordinary Resolution 7 is a renewal of the General Mandate for the Directors to issue shares pursuant to Section 132D of the

Companies Act, 1965.

The proposed Ordinary Resolution 7, if passed, will authorize the Directors of the Company, from the date of the above Annual General

Meeting, to issue shares up to ten per centum (10%) of the issued and paid-up capital of the Company for the time being for such purposes

as the Directors consider would be in the best interest of the Company. This authority, unless revoked or varied by the Company in general

meeting, will expire at the conclusion of the next Annual General Meeting of the Company.

As at the date of this Notice, no new shares in the Company were issued pursuant to the authority granted to the Directors at the Fifteenth

Annual General Meeting held on 27 June 2012 and which will lapse at the conclusion of the Sixteenth Annual General Meeting to be held on

26 June 2013.

The authority will provide fl exibility to the Company for any possible fund raising activities, including but not limited to further placing of shares,

for purpose of funding future investment project(s), working capital and/or acquisitions.

The rationale for this resolution is to eliminate the need to convene separate general meeting(s) from time to time to seek Shareholder approval

as and when the Company issues new shares and thereby reducing administrative time and costs associated with the convening of such

meeting(s).

Ordinary Resolution No. 8 - Proposed renewal of authority for the Company to purchase its own shares

The proposed adoption of the Ordinary Resolution 8 is to renew the authority granted by the shareholders of the Company at the Annual

General Meeting held on 27 June 2012 to empower the Directors of the Company to purchase not more than 10% of the issued and paid-

up share capital of the Company for the time being, for such purposes as they consider would be in the best interest of the Company. This

authority, unless revoked or varied at a general meeting will expire at the conclusion of the next Annual General Meeting of the Company.

Further information is set out in the Share Buy-Back Statement dated 4th June 2013 which is dispatched together with the Company’s 2012

Annual Report.

NOTICE OF SIXTEENTH ANNUAL GENERAL MEETING (CONT’D)


Annual Report 2012

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

1. Directors who are standing for re-election at the 16th Annual General Meeting of TRC Synergy Berhad are Dato’ Abdul

Aziz Bin Mohamad and General (R) Tan Sri Mohd Shahrom Bin Dato’ Hj Nordin.

2. Details of Board of Directors’ Meeting:–

Five (5) Board Meetings were held during the fi nancial year ended 31 December 2012, details of which are set out in the

Statement on Corporate Governance.

3. Particulars of Directors standing for re-election at the 16th Annual General Meeting of TRC Synergy Berhad:-

Name Dato’ Abdul Aziz Bin Mohamad

Age 54

Nationality Malaysian

Position in the Company Executive Director

Working experience/Qualifi cation/Occupation Dato’ Abdul Aziz Bin Mohamad is a graduate of Trent Polytechnic in

Nottingham, England. He is a Quantity Surveyor by profession and a

member of the Institution of Surveyors, Malaysia. He joined TRC Group

as a Senior Contract Executive in 1994 and was later promoted to

Deputy General Manager (Contracts) in 1997. He started his career

as an Assistant Quantity Surveyor in England with Rider Hunt and

Partners in 1982. He later joined Jabatan Kerja Raya (JKR) Kuala

Lumpur in 1983 as a Quantity Surveyor where he administered the

contractual aspects of projects. The details of his profi le can be viewed

on pages 6 of this Annual Report.

Other directorship of public companies Nil

Securities holdings in the Company and its

subsidiaries as at 26 April 2013

14,868,681 ordinary shares of RM0.50 each (Direct)

118,075,200 ordinary shares of RM0.50 each (Indirect)

Family relationship with any director and/or

substantial shareholder of the Company.

Nil

Any confl ict of interest with the Company Nil

List of convictions for offences (other than

traffi c offences) within the past 10 years

Nil

Name General (R) Tan Sri Mohd Shahrom Bin Dato’ Hj Nordin

Age 65

Nationality Malaysian

Position in the Company Senior Independent, Non-Executive Director

Working experience/Qualifi cation/Occupation Gen. (R) Tan Sri Mohd Shahrom is a graduate of the Royal Military

College, Sungai Besi in 1996. Gen (R) Dato’ Seri Shahrom has served

in various appointments at command, staff, training and the diplomatic

services levels and he was the Chief of the Malaysia Army from 1st

January 2003 to 15 September 2003. Prior to that appointment he was

the Chief of staff at the Armed Forces Headquarters. Currently he is the

Senior Vive President Defence of the National Aerospace & Defence of

the National Aerospace & Defence Industries Sdn Bhd (NADI). He is also

the Chairman of SME Aerospace Sdn Bhd (SMEA) and Director of SME

Ordinance Sdn Bhd (SMEO). Both SMEA and SMEO are subsidiary

companies of the NADI Group of Companies. The details of his profi le

can be viewed on page 7 of this Annual Report.

Other directorship of public companies Nil

Securities holdings in the Company and its

subsidiaries as at 26 April 2013

Nil

Family relationship with any director and/or

substantial shareholder of the Company.

Nil

Any confl ict of interest with the Company Nil

List of convictions for offences (other than

traffi c offences) within the past 10 years

Nil


Annual Report 2012

This page has been intentionally left blank

No. of Ordinary Shares held

I/We, of

being a member/members of the above-named Company, hereby appoint

of or failing whom,

of as my/our proxy to vote for me/us and on my/our behalf

at the Sixteenth Annual General Meeting of the Company, to be held at Indah Ballroom, Flamingo Hotel, 5, Tasik Ampang, Hulu Kelang, 68000 Ampang, Selangor on Wednesday, 26 June 2013 at 10.30 a.m and at every adjournment thereof.

I/We direct my/our proxy to vote for or against the resolutions to be tabled at the Sixteenth Annual General Meeting as hereunder

indicated.

RESOLUTIONS FOR AGAINSTORDINARY

RESOLUTION 1

Receive and adopt the Audited Financial Statements for the year ended 31

December 2012

ORDINARY

RESOLUTION 2

Payment of fi rst and fi nal dividend for the year ended 31 December 2012

ORDINARY

RESOLUTION 3

Payment of Directors’ Fees

ORDINARY

RESOLUTION 4

Re-election of Dato’ Abdul Aziz bin Mohamad as Director of the Company

ORDINARY

RESOLUTION 5

Re-election of Gen (R) Tan Sri Mohd Shahrom bin Dato’ Hj Nordin as Director

of the Company

ORDINARY

RESOLUTION 6

Reappointment of Messrs AljeffriDean as the Auditors of the Company and

to authorise the Directors to fi x their remuneration

ORDINARY

RESOLUTION 7

Authority to Issue Shares

ORDINARY

RESOLUTION 8

Renewal of authority for the Company to purchase its own shares

(Please indicate with an X in the space provided how you wish your vote to be cast on the resolution specifi ed in the Notice of the

Sixteenth Annual General Meeting. If this form of proxy is returned without any indication as to how the proxy shall vote, the proxy

will vote or abstain from voting at his/her discretion.)

……………………………………………….. Dated this _______ day of June 2013.

Signature(s)/Common Seal of Member

Notes:

1. A proxy may but need not be a member of the Company and the provision of section 149 (1) (b) of the Act shall not apply to the Company.

2. To be valid the proxy form duly completed must be deposited at the registered offi ce of the Company not less than forty-eight (48) hours before

the time for holding the meeting or any adjournment thereof.

3. A member holding one thousand (1,000) ordinary shares or less may appoint only one (1) proxy to attend and vote at the meeting.

4. A member holding more than one thousand (1,000) ordinary shares may appoint up to two (2) proxies to attend and vote at the meeting.

5. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifi es the proportions of his holdings to be

represented by each proxy.

6. Where a member is an authorised nominee as defi ned under the Central Depositories Act, it may appoint at least one (1) proxy in respect of each

Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.

7. If the appointer is a corporation, the proxy form must be executed under its Common Seal or under the hand of its attorney.

8. Only members whose names appears in the Record of Depositors as at 19 June 2013 will be entitled to attend and vote at the meeting.

Incorporated in Malaysia

PROXY FORM

postage

The Company Secretary


TRC Business Centre

Jalan Andaman Utama

68000 Ampang

Selangor

Please fold here

Please fold here


TRC Business Centre,

Jalan Andaman Utama,

68000 Ampang, Selangor

Tel : 03 4103 8000

Fax : 03 4108 7016

www.trc.com.m

y


annual report 2012

AN

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(41

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THIS STATEMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to the course of action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately. Bursa Malaysia Securities Berhad (“Bursa Securities”) has not perused this Circular prior to its issuance and takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular. Shareholders should rely on their own evaluation to assess the merits and risks of the proposal as set out herein.

TRC SYNERGY BERHAD

(Company No.: 413192-D) (Incorporated in Malaysia under the Companies Act 1965)

SHARE BUY-BACK STATEMENT

in relation to the:

PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN SHARES

The Notice of the Sixteenth Annual General Meeting (“AGM”) of the Company to be held at Indah Ballroom, Flamingo Hotel, 5, Tasik Ampang, Hulu Kelang, 68000 Ampang, Selangor on Wednesday, 26 June 2013 at 10.30 a.m or any adjournment (as the case may be) together with the Proxy Form are enclosed in the 2012 Annual Report, which is dispatched together with this Circular. If you are unable to attend and vote at the meeting, you may complete the Form of Proxy and deposit it at the Registered Office of the Company at TRC Business Centre, Jalan Andaman Utama, 68000 Ampang Selangor, not later than 48 hours before the time of the meeting. The return of the completed Form of Proxy will not preclude you from attending and voting in person at the meeting should you subsequently wish to do so. Last date and time for lodging the Form of Proxy : 24 June 2013 at 10.30 a.m. Date and time of the Sixteenth Annual General Meeting : 26 June 2013 at 10.30 a.m.

This Statement is dated 4th June 2013


DEFINITION

Except where the context otherwise requires, the following definitions shall apply throughout this Circular and the accompanying appendices:

“Act” : Companies Act, 1965 as may be amended, modified or re-enacted from time to time

“AGM” : Annual General Meeting

“Articles” : Articles of Association of the Company

“Board” : Board of Directors

“Bursa Depository” / : Bursa Malaysia Depository Sdn. Bhd. (165570-W) “Depository”

“Bursa Securities” : Bursa Malaysia Securities Berhad (635998-W)

“Bursa Securities LR” or : Bursa Securities Main Market Listing Requirements, as “Listing Requirements” amended from time to time

“Code” : Malaysian Code on Take-Overs and Mergers 2010 and any amendments made from time to time

“Director(s)” : Director(s) of TRC Synergy Berhad

“EGM” : Extraordinary General Meeting

“EPS” : Earnings per share

“ESOS” : Employees Share Option Scheme implemented by the Company

“ESOS Option” : Right of a grantee to subscribe for new TRC Shares under the ESOS

“Market Day” : Any day between Monday and Friday (both days inclusive) which is not a public holiday and on which Bursa Securities is open for trading of securities

“NA” : Net assets

“Proposed Renewal” : Proposed renewal of authority to enable TRC to purchase up to 10% of its issued and paid-up share capital at the point of purchase pursuant to Section 67A of the Act

“RM and sen” : Ringgit Malaysia and sen respectively

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“TRC” or “the Company” : TRC Synergy Berhad

“TRC Group” or “the Group” : TRC and its subsidiaries

“TRC Share(s)” or “shares” : Ordinary shares(s) of RM0.50 each in TRC

For the purpose of this definition, “interest in shares” shall have the meaning given in Section 6A of the Act.

“Warrants A” : 30,800,000 free detachable warrants issued by the Company with a tenure of ten (10) years expiring in 2017

“Warrants B” : 93,495,995 bonus issue of free warrants issued by the Company with a tenure of five (5) years expiring in 2016

Any reference to “we”, “us” and “our” in this Statement is a reference to our Company, our Group or any member of our Group as the context requires.

Words importing the singular shall, where applicable include the plural and vice versa, and words importing the masculine gender shall, where applicable, include the feminine gender and vice versa. References to persons shall include corporations.

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CONTENTS

PAGE

LETTER TO THE SHAREHOLDERS OF TRC CONTAINING:

1. INTRODUCTION 1

2. PROPOSED RENEWAL 2 2.1 Details of the Proposed Renewal 2 2.2 Amount of Funds to be Allocated and Source of Funds 2

3. REASONS FOR THE PROPOSED RENEWAL 2 4. POTENTIAL ADVANTAGES AND DISADVANTAGES OF THE PROPOSED RENEWAL 3

5. EFFECTS OF THE PROPOSED RENEWAL 3 5.1 Issued and paid-up Share Capital 3 5.2 NA 4 5.3 Working Capital 5 5.4 Earnings 5 5.5 Dividends 5

6. SHAREHOLDINGS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS 5 6.1 Directors’ Shareholdings 5 6.2 Substantial shareholders Shareholdings 7

7. PUBLIC SHAREHOLDING SPREAD 8

8. IMPLICATION ON THE CODE 8

9. TREASURY SHARES, RESALE OF TREASURY SHARES AND CANCELLATION OF TREASURY SHARES 8

10. CONDITION TO THE PROPOSED RENEWAL 8

11. DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS 8

12. DIRECTORS RECOMMENDATION 9

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TRC SYNERGY BERHAD

(Company No.: 413192-D) (Incorporated in Malaysia)

Registered Office: TRC Business Centre Jalan Andaman Utama 68000 Ampang Selangor Darul Ehsan

4th June 2013 Board of Directors: Dato’ Sri Sufri bin Haji Mohd Zin (Executive Chairman) Dato’ Abdul Aziz bin Mohamad (Executive Director) Gen (R) Tan Sri Mohd Shahrom bin Dato’ Haji Nordin (Senior Independent Non-Executive Director) Noor Zilan bin Mohamed Noor (Independent Non-Executive Director) Abdul Rahman bin Ali (Independent Non-Executive Director) To: The Shareholders of TRC SYNERGY BERHAD Dear Sir/Madam, PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN SHARES 1. INTRODUCTION On 29 April 2013, TRC announced to Bursa Securities the Company’s intention to seek a renewal of an existing authorization from its shareholders to purchase the Company’s own shares up to 10% of its issued and paid-up share capital of the Company. At the AGM held on 27 June 2012, the Board obtained shareholders’ approval on the renewal of authority for the Company to purchase up to 10% of it issued and paid up share capital. The aforesaid approval will continue to be in force until the conclusion of the forthcoming AGM of the Company which will be held on 26 June 2013 unless a renewal of authority for the Company to purchase its own shares is obtained from shareholders of TRC. Therefore, the purpose of this Statement is to provide you with the details of the Proposed Renewal and to seek your approval for the ordinary resolution pertaining to the Proposed Renewal to be tabled at the forthcoming AGM of TRC to be convened at Indah Ballroom, Flamingo Hotel, 5, Tasik Ampang, Hulu Kelang, 68000 Ampang, Selangor on 26 June 2013 at 10.30 a.m.

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SHAREHOLDERS OF TRC ARE ADVISED TO READ THIS STATEMENT CAREFULLY BEFORE VOTING ON THE RESOLUTION PERTAINING TO THE PROPOSED RENEWAL.

2. PROPOSED RENEWAL

2.1 Details of the Proposed Renewal

TRC proposes to seek approval of its shareholders for the renewal of authority for TRC to purchase and/or hold from time to time and at any time up to ten per centum (10%) of its issued and paid-up share capital for the time being quoted on the Bursa Securities through stockbroker(s) subject to compliance with Section 67A of the Act and any prevailing laws, rules, regulations, guidelines and requirements issued by the relevant authorities at the time of purchase.

As at 26 April 2013 the total issued and paid-up share capital of the Company is RM-238,135,451.50 comprising 476,270,903 TRC Shares. Therefore, as at 26 April 2013, the maximum number of shares to be purchased pursuant to the Proposed Renewal will amount to a maximum of 47,627,090 ordinary shares.

The authority from shareholders shall be effective upon the passing of the ordinary resolution for the Proposed Renewal, and will remain in effect until the conclusion of the next AGM of the Company, or until the expiry of the period within which the next AGM is required by law to be held, unless earlier revoked or varied by an ordinary resolution of the shareholders of the Company in general meeting.

2.2 Amount of Funds to be Allocated and Source of Funds

The maximum amount of funds to be allocated for the Proposed Renewal will be subject to the Retained Profits and/or Share Premium Accounts of the Company. The Proposed Renewal will be funded from internally generated funds and/or bank borrowings. In the event that the Company intends to purchase its own shares using bank borrowings, the Board shall ensure that the Company shall have sufficient funds to repay the bank borrowings and interest expense and that the repayment would not have any material effect on the cash flow of the Company. As at 31 December 2012 being the latest available audited financial statements, the audited Retained Profits and Share Premium of the Company stood at RM6,468,769 and RM123,187 respectively.

3. REASONS FOR THE PROPOSED RENEWAL

The Proposed Renewal will enable TRC Group to utilize surplus financial resources to purchase its own Shares when appropriate, and at prices which the Board views as favourable. It may stabilize the supply and demand as well as the price of the TRC Shares traded on the Main Market of Bursa Securities. The Company may also be able to reduce any unwarranted volatility of its shares which could support its fundamental value.

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4. POTENTIAL ADVANTAGES AND DISADVANTAGES OF THE PROPOSED RENEWAL

The Proposed Renewal, if implemented, will benefit the Company and its shareholders in the following manner:-

• If TRC Shares bought back are cancelled, the Company expects to enhance the EPS of the Group as a result of the reduction in the issued and paid-up shares capital of the Company, thereby enabling long term and genuine investors to enjoy any potential corresponding increase in the value of their investments in the Company;

• If the Shares bought back are retained as treasury shares, the Directors would have an option either to distribute these shares as dividends to reward shareholders or to resell at prices higher than their purchase price which will provide potential gain to the Company.

The Proposed Renewal, if implemented would however reduce the financial resources of the Company and may result in the Company having to forgo other better investment opportunities that may emerge in the future or at least deprive the Company and the Group of interest income that can be derived from the funds utilized for the Proposed Renewal. It may also result in a lower amount of cash reserves available for dividends to be declared to shareholders as funds are utilised to purchase shares.

The working capital of the Group may also be affected, as any purchase of TRC Shares will reduce the Group’s available funds depending on the actual number of shares purchased and their purchase price. However, the working capital of TRC Group may be restored upon the resale of the Purchased Shares held as treasury shares.

5. EFFECTS OF THE PROPOSED RENEWAL

On the assumption that the Proposed Renewal is carried out in full, the effects of the Proposed Renewal on the share capital, NA, working capital and earnings of TRC are set out below:-

5.1 Issued and paid-up Share Capital

The maximum number of TRC Shares that may be purchased pursuant to the Proposed Renewal are as follows:

(1) Minimum Scenario

No. of TRC Shares

Issued and paid-up capital as at 26 April 2013 476,270,903

Maximum number of TRC Shares that may be purchased under the Proposed Renewal 47,627,090

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(2) Maximum Scenario No. of

TRC Shares

Issued and paid-up capital as at 26 April 2013 476,270,903 Shareholding arising from the full exercise of ESOS Options 9,914,920 486,185,823

Shareholding arising from the full exercise of Warrants A 86,738,717 Shareholding arising from the full exercise of Warrant B 93,495,074

Enlarged issued and paid-up share capital 666,419,614

Maximum number of TRC Shares that may be purchased under the Proposed Renewal 66,641,961

Under the minimum scenario, if TRC purchases 47,627,090 TRC Shares representing approximately 10% of TRC share capital as at 26 April 2013 and such TRC Shares purchased are cancelled, the Proposed Renewal will result in TRC issued and fully paid-up share capital being reduced from RM238,135,451.50 comprising of 476,270,903 TRC Shares to RM214,321,906.50 comprising of 428,643,813 TRC Shares.

Under the maximum scenario, if TRC purchases 66,641,961 TRC Shares representing approximately 10% of TRC enlarged issued and paid-up share capital and such TRC Shares purchased are cancelled, the Proposed Share Buy-Back will result in TRC issued and fully paid-up share capital being reduced from RM333,209,807 comprising of 666,419,614 TRC Shares to RM299,888,826.50 comprising of 599,777,653 TRC Shares.

However, the Proposed Renewal will have no effect on our issued and paid-up share capital if the TRC Shares purchased under the Proposed Renewal are held as treasury shares and are not cancelled. However, the rights of the treasury shares as to voting, dividend and participation in other distribution or otherwise, are suspended and the treasury shares shall not be taken into account in calculating the number of percentage of TRC shares or of a class of shares in the Company for any purpose including substantial shareholding, takeovers, notices, the requisition of meetings, the quorum for a meeting and the result of a vote on a resolution at a meeting.

5.2 NA

The Proposed Renewal is likely to reduce the NA per share of the Company and the Group if the purchase price exceeds the audited NA per share of the Group at the time of purchase, and will increase the NA per share of the Group if the purchase price is less than the audited NA per share of the Group at the time of purchase.

For shares so purchased which are retained as treasury shares, the NA of the Group will increase upon the resale of these shares, assuming that a gain has been realised. Again, the quantum of the increase in NA will depend on the actual selling price of the treasury shares and the number of treasury shares resold.

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5.3 Working Capital

The Proposed Renewal if exercised, will result in an outflow of cash and thereby will reduce the working capital of the Group, the quantum of which depends on, amongst others, the purchase price of TRC Shares and the number of TRC Shares, to be purchased and the funding cost, if any. However, the working capital and cash flow of the Company will increase upon reselling the Purchased Shares which are retained as treasury shares. Again, the quantum of the increase in the working capital and cash flow will depend on the actual selling price of the treasury shares and the number of treasury shares resold.

5.4 Earnings

Depending on the number of shares purchased and purchase prices of the shares, the Proposed Renewal may increase the EPS of the Group. Similarly, on the assumption that the Shares so purchased are treated as treasury shares, the extent of the effect on the earnings of the Group will depend on the actual selling price, the number of treasury shares resold and the effective gain or interests savings arising.

5.5 Dividends

Assuming the Proposed Renewal is carried out, it may have an impact on TRC’s dividend policy as it may reduce the cash available, which may otherwise be used for the dividend payment. Nonetheless, if the shares so purchased are retained as Treasury Shares, the dividend rate will also be increased with the suspension of the rights attaching to the Treasury Shares as to dividend entitlement. Moreover, the Treasury Shares so purchased may be distributed as dividends to shareholders of the Company if the Company so decides.

6. SHAREHOLDING OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

6.1 Directors’ Shareholdings

Based on the Register of Directors’ Shareholdings as at 26 April 2013 the effect of the Proposed Renewal on the shareholdings of the Directors of TRC is as follows:-

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(i) minimum scenario (as explained in Section 5.1 above)

As at 26 April 2013 After the Proposed Renewal Direct Indirect Direct Indirect

Directors No of TRC Shares held

% No of TRC Shares held



%

Dato’ Sri Sufri bin Haji Mohd Zin*

46,371,517 9.74 118,075,200* 24.79 46,371,517 10.82 118,075,200* 27.55

Dato’ Abdul Aziz bin Mohamad

14,868,681 3.12 118,075,200* 24.79 14,868,681 3.47 118,075,200* 27.55

Gen (R) Tan Sri Mohd Shahrom bin Dato’ Haji Nordin

- - - - - - - -

Noor Zilan bin Mohamed Noor

- - - - - - - -

Abdul Rahman bin Ali

- - - - - - - -

Notes : * Deemed interested by virtue of his substantial shareholding in TRC Capital Sdn Bhd and Kolektif Aman Sdn Bhd

(ii) maximum scenario (as explained in Section 5.1 above)


Directors No of TRC Shares held




%

Dato’ Sri Sufri bin Haji Mohd Zin

46,371,517 6.96 118,075,200* 17.72 46,371,517 7.73 118,075,200* 19.69

Dato’ Abdul Aziz bin Mohamad

14,868,681 2.23 118,075,200* 17.72 14,868,681 2.48 118,075,200* 19.69

Gen (R) Tan Sri Mohd Shahrom bin Dato’ Haji Nordin

- - - - - - - -

Noor Zilan bin Mohamed Noor

- - - - - - - -

Abdul Rahman bin Ali

- - - - - - - -


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6.2 Substantial Shareholders Shareholdings

Based on the Register of Substantial Shareholders’ Shareholdings as at 26 April 2013, the effect of the Proposed Renewal on the shareholdings of the substantial shareholders of TRC is as follows:-

(i) minimum scenario (as explained in Section 5.1 above)


Substantial shareholders

No of TRC Shares held




%


46,371,517 9.74 118,075,200* 24.79 46,371,517 10.82 118,075,200* 27.55

TRC Capital Sdn Bhd

59,553,600 12.50 - - 59,553,600 13.89 - -

Kolektif Aman Sdn Bhd

58,521,600 12.29 - - 58,521,600 13.65 - -

Dato’ Leong Kam Heng

45,371,947 9.53 - - 45,371,947 10.58 - -

Lembaga Tabung Haji

44,849,952 9.42 - - 44,849,952 10.46 - -

Khoo Tew Choon 32,374,372 6.80 - - 32,374,372 7.55 - -


(ii) maximum scenario (as explained in Section 5.1 above)


Substantial shareholders

No of TRC Shares held




%


46,371,517 6.96 118,075,200* 17.72 46,371,517 7.73 118,075,200* 19.69

TRC Capital Sdn Bhd

59,553,600 8.94 - - 59,553,600 9.93 - -

Kolektif Aman Sdn Bhd

58,521,600 8.78 - - 58,521,600 9.76 - -

Dato’ Leong Kam Heng

45,371,947 6.81 - - 45,371,947 7.56 - -

Lembaga Tabung Haji

44,849,952 6.73 - - 44,849,952 7.48 - -

Khoo Tew Choon 32,374,372 4.86 - - 32,374,372 5.40 - -


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7. PUBLIC SHAREHOLDING SPREAD

According to the Record of Depositors of the Company, the total percentage of the issued and paid-up capital of TRC which is held by the public (in accordance with the public shareholding spread requirements of Bursa Securities) as at 26 April 2013 was 46.03% represented by 4,031 public shareholders holding 219,209,186 TRC Shares, with each shareholder holding not less than 100 shares each. The Board is mindful of the requirements that any purchase of TRC Shares by the Company must not result in the public shareholding spread of the Company falling below 25% of its issued and paid-up capital share capital.

8. IMPLICATION ON THE CODE

The Board has agreed that it is not intended for the Proposed Renewal to trigger the obligation to undertake a mandatory general offer under the Code by any of its shareholders and/or parties acting in concert with them. Therefore, the Board will ensure that such number of shares are purchased, retained as treasury shares, cancelled or distributed such that the Code will not resulting in triggering any mandatory offer obligation of the part of the substantial shareholders and/or parties acting in concert with them. In this connection, the Board is mindful of the requirements when making any purchase of TRC Shares pursuant to the Proposed Renewal.

9. TREASURY SHARES, RESALE OF TREASURY SHARES AND CANCELLATION OF TREASURY SHARES

The Company has not purchased, cancelled and/or resold any of its shares in the previous twelve (12) months preceding to this Statement.

10. CONDITION TO THE PROPOSED RENEWAL

The Proposed Renewal is conditional upon approval being obtained from the shareholders of TRC at the forthcoming AGM. The Proposed Renewal being procured from the shareholders of the Company at the forthcoming AGM is subject to annual renewal.

11. DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS

Save as disclosed under Section 6.1 and 6.2 above, none of the Directors or substantial shareholders of TRC or persons connected to them has any interest in the Proposed Renewal and the resale of treasury shares, if any.

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12. DIRECTORS’ RECOMMENDATION

The Directors having considered all aspects of the Proposed Renewal, are of the opinion that the Proposed Renewal is fair, reasonable and in the best interest of the Company and its shareholders. Therefore, the Board recommends that you vote in favour of the ordinary resolution pertaining to the Proposed Renewal to be tabled at the forthcoming AGM.

Yours faithfully, For and on behalf of the Board of TRC SYNERGY BERHAD

DATO’ SRI SUFRI BIN HJ MOHD ZIN Executive Chairman


TRC SYNERGY BERHAD annual report 2012 - …ir.chartnexus.com/trc/docs/ar/2012.pdfas the electrified double-tracking between Ipoh – Padang Besar, LDT2 Jabur – Kuala Terengganu,

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