3-Storey Semi-Detached Houses

Transcription

1

2 Lincolnshire

3 3-Storey Semi-Detached Houses

4 VISION To be an internationally recognised premier integrated building materials producer, infrastructure & building contractor, property developer, innovative products provider and power producer. MISSION To provide excellent quality products and services through innovative use of leading edge technology, dedicated employees and competitive sales and marketing strategies.

5 CONTENTS 02 Corporate Structure 03 Corporate Information 04 Profile of Directors 08 Chairman s Statement 11 Statement on Corporate Governance 20 Statement on Risk Management & Internal Control 23 Audit Committee Report 27 Sustainability Policy 28 Diversity Policy 30 Other Compliance Information 31 Financial Statements 106 List of Properties 107 Analysis of Shareholdings 113 Analysis of Warrant Holdings 115 Notice of Annual General Meeting Proxy Form

6 CORPORATE STRUCTURE 2 DOLOMITE CORPORATION BERHAD ( W) 100% Dolomite Berhad 100% Dolomite Industries Company Sdn Bhd 100% Dolomite Properties Sdn Bhd 100% Dolomite Readymixed Concrete Sdn Bhd 100% Dolomite Hotmixes Sdn Bhd 100% Dolomite Transport Sdn Bhd 100% Dolomite-CM Quarries Sdn Bhd 100% Orris Capital Sdn Bhd 100% Dolomite Engineering Sdn Bhd 100% Dolomite Industrial Park Sdn Bhd 50% + 1 share D Marina Sdn Bhd 100% Dolomite Homes Sdn Bhd (Formerly known as Glam & Glitter Projects Sdn Bhd) 100% Dolomite Technology Sdn Bhd 100% Dolomite Biotech Sdn Bhd 100% Dolomite Technology (HK) Limited 100% Dolomite Power- Shandong (HK) Limited 100% Shandong Dolomite Thermal Power Co Limited Building Materials Construction Property Development Biotechnology Steam and Power Generation

7 3 Annual Report 2014 CORPORATE INFORMATION Board of Directors Tan Sri Dato Seri Mohd Jamil Bin Johari Chairman & Independent Non-Executive Director Lew Choong Keong Managing Director Lim Beng Keat Non-Independent Non-Executive Director Huang Jen Soong Non-Independent Non-Executive Director Jeffrey Gerard Gomez Senior Independent Non-Executive Director Dominic Aw Kian-Wee Non-Independent Non-Executive Director Seow Yoo Lin Independent Non-Executive Director JOINT COMPANY SECRETARIES Tai Yit Chan (MAICSA ) Chan Su San (MAICSA ) Lo Sze Min (MIA 3439) REGISTERED OFFICE Lot 6.05, Level 6, KPMG Tower 8 First Avenue, Bandar Utama Petaling Jaya Selangor Darul Ehsan Tel : Fax : PRINCIPAL OFFICE 19 Dolomite Park Avenue Jalan Batu Caves Batu Caves Selangor Darul Ehsan Tel : Fax : Website : business@dolomite.com.my SHARE REGISTRAR Tricor Investor Services Sdn Bhd Level 17, The Gardens North Tower Mid Valley City Lingkaran Syed Putra Kuala Lumpur Tel : Fax : AUDITORS Crowe Horwath (AF 1018) Chartered Accountants Level 16, Tower C, Megan Avenue II 12, Jalan Yap Kwan Seng Kuala Lumpur Tel : Fax : SOLICITORS Shearn Delamore & Co Mazlan & Associates Guok Partnership PRINCIPAL BANKERS Malayan Banking Berhad Public Bank Berhad AmBank (M) Berhad RHB Bank Berhad STOCK EXCHANGE LISTING Bursa Malaysia Securities Berhad Stock Code : 5835 Stock Short Name : DOLMITE

8 PROFILE OF DIRECTORS 4 DOLOMITE CORPORATION BERHAD ( W) Tan Sri Dato Seri Mohd Jamil Bin Johari, a Malaysian aged 68, was appointed to the Board of Directors on 25 July 2005 as the Chairman of Dolomite Corporation Berhad. Tan Sri Dato Seri Mohd Jamil holds a Bachelor of Arts (Hons) degree and a Diploma in Education from the University of Malaya. He also obtained a Master of Arts in Political Science from the University of Washington, Seattle, Washington, United States of America. Tan Sri Dato Seri Mohd Jamil Bin Johari Chairman & Independent Non-Executive Director Tan Sri Dato Seri Mohd Jamil joined the Royal Malaysia Police in January 1971 as Chief Inspector and retired with the rank of Deputy Inspector General of Police in May Thereafter, he was appointed as High Commissioner of Malaysia to Brunei until July Tan Sri Dato Seri Mohd Jamil is a member of the Audit Committee and the Nomination Committee. He is also an Independent Non-Executive Director of TAS Offshore Berhad. Mr Lew Choong Keong Managing Director Mr Lew Choong Keong, a Malaysian aged 56, was appointed the Managing Director of Dolomite Corporation Berhad and Dolomite Group on 17 July A civil engineer by training, Mr Lew graduated from the University of Malaya with a Bachelor of Civil Engineering (Hons) degree. He is also a Registered Professional Engineer with the Board of Engineers, Malaysia, a Fellow of the Institute of Engineers, Malaysia, a Fellow of the Institute of Quarry, Malaysia and a registered ASEAN Engineer. Mr Lew has over 31 years of experience in the quarry and construction sectors. Since joining the Group in 1983, he progressed through a range of senior management positions. He was promoted to Executive Director in 2002 with expanded responsibilities for the Group s overall operations. Mr Lim Beng Keat, a Malaysian aged 69, is a Non- Independent & Non-Executive Director of Dolomite Corporation Berhad. Mr Lim was appointed a Director of the Company on 17 July Mr Lim holds a Bachelor of Science (Honours) degree from Queen Mary's College, University of London and a Master's degree in Civil Engineering from the Massachusetts Institute of Technology, United States of America. Mr Lim has over 46 years of experience in the construction and property development industries. He has been a Director of Dolomite Group since 1972 and Chairman of the subsidiary companies of Dolomite Corporation Berhad since Mr Lim served as Executive Vice Chairman of Dolomite Corporation Berhad from 17 July 2003 to 12 October Prior to joining Dolomite Group, Mr Lim worked as General Manager of People's Park Development Pte. Ltd. in Singapore from 1969 to He is currently Chairman of Lim Housing Sdn Bhd, Lim Quee & Sons Sdn Bhd and Boulevard Realty Sdn Bhd. As Managing Director, Mr Lew is responsible for the Group s business direction, operational performance and strategic management of the Group s resources. Mr Lew also serves as a member of the Remuneration Committee. Mr Lim Beng Keat Non-Independent Non-Executive Director Mr Lim is a member of the Remuneration Committee and Audit Committee.

9 5 Annual Report 2014 PROFILE OF DIRECTORS (cont d) Mr Huang Jen Soong, a Malaysian aged 66, was appointed to the Board of Directors on 17 July 2003 as a Non-Independent Non-Executive Director of Dolomite Corporation Berhad. Mr Huang graduated from the University of Malaya in 1973 with a Bachelor of Science (Hons) degree and subsequently obtained his Master in Business Administration degree from the University of North Carolina, United States of America in He is also a fellow member of the Institute of Quarry, Malaysia. Mr Huang Jen Soong Non-Independent Non-Executive Director Mr Huang has been a Director of Dolomite Group since 1977 and was the Managing Director of the Group from 1980 to During his tenure as Managing Director, Mr Huang brought to the Group his entrepreneurship and was key driver of the Group s transformation from a mere quarry operator in its early days to an integrated group specializing in building materials, construction and property development. He currently sits on the Board of Directors of several subsidiary companies of Dolomite Corporation Berhad and a few other private companies. He is also the Managing Director of Bong Sin Rubber Estates Co Sdn Berhad. Mr Huang is the Chairman of both the Remuneration Committee and the Nomination Committee. Mr Jeffrey Gerard Gomez Senior Independent Non-Executive Director Mr Jeffrey Gerard Gomez, a Malaysian aged 55, was appointed to the Board of Directors on 17 July 2003 as an Independent Non-Executive Director of Dolomite Corporation Berhad. He was designated as the Senior Independent Non- Executive Director on 28 February Mr Jeffrey Gerard Gomez is a Fellow of the Institute of Chartered Accountants in England and Wales, United Kingdom. He is also a member of the Malaysian Institute of Accountants and the Malaysian Institute of Certified Public Accountants. Upon qualifying as a Chartered Accountant in London, England, he returned to Malaysia and currently heads Gomez and Co, a firm of Chartered Accountants. Mr Jeffrey Gerard Gomez is the Chairman of the Audit Committee and a member of the Nomination Committee. Mr Dominic Aw Kian-Wee, a Malaysian aged 43, was appointed as a Non-Independent Non-Executive Director of Dolomite Corporation Berhad on 1 September Mr Dominic Aw holds a Bachelor of Law (Hons) degree from the University of Hull, North Humberside, England and a Barrister-at-Law (Middle Temple) from the University of Westminster, London, England. He is currently a partner of Mazlan & Associates and has over 21 years of working experience as an advocate and solicitor. Mr Dominic Aw Kian-Wee Non-Independent Non-Executive Director Mr Dominic Aw is also an Independent Non-Executive Director of Ajinomoto (Malaysia) Berhad.

10 PROFILE OF DIRECTORS (cont d) 6 DOLOMITE CORPORATION BERHAD ( W) Mr Seow Yoo Lin Independent Non-Executive Director Mr Seow Yoo Lin, a Malaysian aged 59, was appointed to the Board of Directors of Dolomite Corporation Berhad on 1 January 2014 as an Independent Non-Executive Director. He is a member of the Audit Committee and Nomination Committee. Mr Seow is a member of the Malaysian Institute of Certified Public Accountants and Malaysian Institute of Accountants and holds a Master of Business Administration from International Management Centre, Buckingham. Mr Seow joined KPMG Malaysia in 1977 and was admitted as a Partner in He was the Managing Partner from 2007 to 2010 and retired in Mr Seow is an Independent Non-Executive Director of Southern Steel Berhad and Narra Industries Berhad which are listed on the Main Market of Bursa Malaysia Securities Berhad. He also is an Independent Non-Executive Director of HSBC Amanah Berhad. Other Information on Directors: 1. Save for the disclosures mentioned below, none of the Directors of the Company has any family relationship with any director and/or major shareholder of the Company. Madam Yap Koon Wah, a substantial shareholder of Dolomite Corporation Berhad is the spouse of Mr Huang Jen Soong. 2. None of the Directors of the Company has any conflict of interest and/or personal interest in any business arrangement involving the Company or its subsidiaries. 3. None of the Directors of the Company has any conviction of offences other than traffic offences, if any, within the past ten (10) years. 4. The details of attendance at Board meetings are set out on page 12 of the Annual Report.

11 Dolomite Rawang

12 CHAIRMAN S STATEMENT 8 DOLOMITE CORPORATION BERHAD ( W) Dear valued shareholders, On behalf of the Board of Directors of Dolomite Corporation Berhad, I am pleased to present the Annual Report and the Audited Financial Statements of the Company and the Group for the financial year ended 31 December OPERATING ENVIRONMENT The global economy expanded at a moderate pace in 2014 with uneven growth across and within the region with the US economy continuing to show broader signs of improvement while the economic activities in the Euro area and Japan remain subdued. In the Asian region, most economies benefited from higher external demand particularly from the US. On the local front, the Malaysian economy grew by 6.0% in 2014 driven mainly by strong private domestic demand and improved external trade. The construction sector expanded at the rate of 11.6% in 2014 owing mainly to stronger growth in both the residential and non-residential sub-sectors. The civil engineering sub-sector provided further support to the construction sector underpinned by the implementation of the existing multibillion projects under the Economic Transformation Programme, the My Rapid Transit Project ( MRT ) and new infrastructure projects. (Source : Bank Negara Malaysia Annual Report 2014) FINANCIAL PERFORMANCE The financial year under review saw the Group s revenue declined by 12.58% to RM million against RM million registered in The Group posted a lower pre-tax profit of RM million compared to the pretax profit of RM million recorded in 2013 on the back of lower revenue. OPERATIONS REVIEW Building Materials The financial year ended 31 December 2014 has been a good year for the Group s building materials segment which contributed significantly to the Group s revenue and profit. The revenue of the building materials segment increased by 58.34% to RM million compared to RM million recorded in 2013 on the back of greater demand for building materials by the construction sector. In line with the increased turnover, profit before interest and tax increased significantly to RM4.678 million compared to a loss before interest and tax of RM6.082 million registered in Construction The year 2014 saw the Group s construction segment registered weaker results. Total revenue derived from construction of in-house property development projects and external projects for 2014 declined by 49.61% to RM million from RM million registered in As a result, loss before interest and tax widened to RM4.167 million from RM3.636 million recorded in The weaker results were largely due to delay in the commencement of the Group s Dolomite Templer Phase 3 property development project. Moving forward, the Group s construction entities will continue to be the in-house main contractor for the Group s property development projects. The Group will also strive to secure new external projects by participating in both Government and private tenders.

13 9 Annual Report 2014 CHAIRMAN S STATEMENT (cont d) Property Development The financial year under review marked a sharp fall in contribution by the property segment to the Group s revenue. The property segment posted revenue of RM million compared to RM million registered in 2013 due to delay in the commencement of the Group s Dolomite Templer Phase 3 property development project. Despite lower revenue, profit before interest and tax increased to RM million compared to RM million in 2013 mainly attributable to a gain on fair value changes on investment properties. CORPORATE SOCIAL RESPONSIBILITY While pursuing its business goal in enhancing and upholding the bottomline and shareholders value, the Group withholds its principle of maintaining a balance between its economic, social and environmental responsibilities to the community, environment, workplace and marketplace in its business dealings and operating environments. In maintaining and preserving the corporate culture of contributing back to the society, the Group remains consistent in undertaking various corporate social responsibility programmes each year. On 27 November 2014, the Company in collaboration with the Selangor Forestry Department, PUSPANITA Selangor and the Selangor Forestry Department Cooperative had successfully organised a Love the Environment Programme at the Templer Forest Reserve adjacent to the Group s Dolomite Templer project. The objective of the programme is to foster cooperation among government agencies with non-government organisations and private entities in order to preserve green earth and environmental sustainability. A total of 250 seedings of various species were planted during the event. Among the species planted were Beruas, Kalumpang Burung, Sentang, Kelat Paya, Keruing Gombang, Merawan Meranti and others. During the financial year under review, the Group had donated to the needy and less fortunate and was involved in various programmes organized by charitable organizations.

14 CHAIRMAN S STATEMENT (cont d) 10 DOLOMITE CORPORATION BERHAD ( W) PROSPECT For the new financial year 2015, the Group remains focussed on its existing core business activities. The uptrend in the demand for building materials produced by the Group is expected to remain a significant contributor to the Group s results. In 2014, the Group launched Phase 3 of its flagship residential development project of Dolomite Templer comprising 57 units of 2 and 3-storey superlink and Phase 4 of the project comprising 30 units of 3-storey semi-detached houses. Dolomite Templer is an exclusive low density gated and guarded enclave spanning an area of 80 acres of freehold land located between the Commonwealth Park and the pristine Bukit Lagong Forest Reserve which makes living next to nature possible at the fringe of Kuala Lumpur city centre. The project includes a private clubhouse, a multi-tiered security system featuring smart card access, CCTV surveillance, 2-tiered perimeter fencing with one electrified layer and round the clock surveillance by security guards. The take-up rate for the houses offered has been encouraging. The Group is slated to launch its midpriced range condominium project in Rawang, Selangor in This project which comprises a 17-storey condominium with 130 units will be the first condominium project in Rawang town. The coal-fired thermal power plant in Shandong, China which generates steam and electricity has been successfully tested and commissioned by independent specialists. Commercial production will commence after approvals have been obtained from the relevant authorities. It is expected to generate a new stream of recurrent income to the Group upon commercial operation. APPRECIATION On behalf of the Board of Directors, I wish to take this opportunity to extend our sincere appreciation to our shareholders, customers, business associates and the regulatory authorities for their continued support, trust and commitment to work with us. I would also like to thank the management and staff for their sound advice and guidance throughout the period and to all employees of the Group for their loyalty, dedication and commitment. Thank you. Tan Sri Dato Seri Mohd Jamil Bin Johari Chairman May 2015

15 11 Annual Report 2014 Statement on Corporate Governance The Board of Directors of Dolomite Corporation Berhad ( the Board ) is pleased to disclose to the shareholders on the manner which it has applied the principles and recommendations as set out in the Malaysian Code on Corporate Governance 2012 ( the Code ) pursuant to Paragraph of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ( the Listing Requirements ). Any specific principle and recommendation of the Code that was not observed including the reasons are stated in this statement. A. BOARD OF DIRECTORS The Board has always recognised the need for good corporate governance to protect and enhance long term shareholders value and the financial performance of the Company. An indication of the Board s commitment is reflected in the conduct of regular Board meetings and their incorporation of various processes and systems as well as the establishment of relevant committees which also meet regularly. The Board always takes into account the interests of all stakeholders in their decision making. 1. COMPOSITION OF THE BOARD The Company is managed and led by an effective Board which comprises seven (7) directors, one (1) of whom is executive and six (6) are non-executive. There are three (3) independent directors including the Chairman of the Board. This composition complies with the Listing Requirements. The profile of each Director is set out in the Profile of Directors of this Annual Report. The current Board brings with them years of experience in various fields of expertise, ranging from business, accountancy and legal to engineering and manufacturing of building materials in order to reach effective decisions in governing the Group. The presence of the Independent Directors is essential as they provide unbiased and independent view, advice and judgment as well as safeguard the interests of other parties like minority shareholders. They are independent of both the management and shareholders of the Company, and are free from any business or other conflict of interests which may interfere with the discharge of their duties and in making independent judgment. The Board has also appointed the Audit Committee Chairman as the Senior Independent Non-Executive Director to whom concerns of individuals, internal and external, may be conveyed. The Board supports the initiative to include woman representation on the Board to achieve a more gender diversified Board. The Board is of the view that, while it is important to promote boardroom diversity in terms of gender, age and ethnicity, the normal selection criteria based on an effective blend of competencies, skills, extensive experience and knowledge to strengthen the Board should remain a priority. The Group is an equal opportunity employer and all appointments and employments are based strictly on merits. In its commitment to achieve Board Diversity, the Board has adopted the Diversity Policy and this policy is disclosed on pages 28 and 29 of this annual report. In line with the Code, the Board will consider appointing females to the Board in due course to bring about a more diverse perspective. New candidature would be evaluated by the Nomination Committee based on the candidates suitability, competency, character, time commitment, integrity, skills and experience in meeting the Group s needs regardless of age, gender, race and nationality before presenting its recommendation to the Board for approval on the appointment of new members to the Board. As Directors should devote sufficient time to carry out their responsibilities, the Director will notify the Board before being appointed as director in other public listed companies. The Director should notify the Chairman before accepting any new directorships in public listed companies. The notification will include an indication of time that will be spent on appointment in the new public listed companies. 2. BOARD CHARTER The Company has in place a Board Charter that sets out, among others, the roles of the Board, division of responsibilities between the Chairman and the Managing Director, structures of the Board Committees, procedures for the conduct of meetings, conflict of interest, etc. More information on the Board Charter can be found on the Company s website at The Board of Directors is responsible for supervising the management of the business and affairs of the Company in a way which ensures that the interests of shareholders and stakeholders are promoted and protected. In discharging this duty, the principal responsibilities of the Board are set out in the Board Charter.

16 Statement on Corporate Governance (cont d) 12 DOLOMITE CORPORATION BERHAD ( W) 3. BOARD RESPONSIBILITIES A clear division of responsibility between the Chairman and the Managing Director exists to ensure a balance of authority and precludes any one director from exercising unfettered powers and decision making. Tan Sri Dato Seri Mohd Jamil Bin Johari was appointed to the Board on 25 July 2005 as the Chairman of the Board and his responsibilities include the following: Leading the Board in its duties to the Group; Ensuring there are processes and procedures in place to evaluate the performance of the Board, its committees and its individual directors; Facilitating effective review, analysis and discussion at Board meetings; and Ensuring effective communication with shareholders and stakeholders. Mr Lew Choong Keong, the Managing Director is responsible for the Group s business direction, operational performance and strategic management of the Group s resources. 4. BOARD MEETINGS The schedule of Board meetings for the next financial year are planned in advance prior to the end of the current financial year so that the Members of the Board are able to plan ahead and can have sufficient time placed to serve the Board. The Board meets quarterly to review the financial, operational and business performance. In addition, the Board meeting may convene as and when necessary to discuss any matters of urgency and importance. The Board met six (6) times during the financial year ended 31 December 2014 and the attendance of the respective Directors was as follows:- Total Number of Percentage of Attendance Directors Meetings Attended (%) Tan Sri Dato Seri Mohd Jamil Bin Johari 6/6 100 Lew Choong Keong 6/6 100 Lim Beng Keat 6/6 100 Huang Jen Soong 6/6 100 Jeffrey Gerard Gomez 6/6 100 Dominic Aw Kian-Wee 6/6 100 Seow Yoo Lin 6/6 100 The Board had made themselves available during the financial year ended 31 December 2014 to serve the Group effectively. The Directors are committed to the collective decision making process of the Board and deliberated and discussed on issues openly and constructively. The Directors may seek clarification or raise comments on the deliberation of the issues. The proceedings of and resolutions passed at each Board and Board Committee meetings are minuted by the Company Secretary and kept in the statutory register at the registered office of the Company.

17 13 Annual Report 2014 Statement on Corporate Governance (cont d) 5. SUPPLY OF INFORMATION The Board has unrestricted and timely access to all information necessary for the discharge of its responsibilities. Notices, together with the agenda of meetings were given to the Board at least seven (7) days before the meetings whilst the relevant Board papers, whenever possible, were given three (3) days prior to the meetings to accord sufficient time to the Directors to study and evaluate the matters to be discussed and to seek any clarification. All directors have direct access to the advice and services of the joint company secretaries. The Directors may also obtain independent professional advice whenever deemed necessary at the Company s expense. The Chairman for each meeting is responsible for ensuring there is sufficient and adequate time for discussion of each item on the agenda. The Board, in carrying out its tasks under the terms of reference, may obtain outside or other independent professional advice as it considers necessary to carry out its duties. The Managing Director, namely Mr Lew Choong Keong is responsible to brief and provide details to the Board on the Group s business direction and operational performance. The Financial Controller, namely Mr Lo Sze Min is invited to attend the Board meetings to update the Board on the Group s financial performance. 6. COMPANY SECRETARIES The Members of the Board have unrestricted access to the advice and services of the appointed Company Secretaries to enable them to discharge their duties effectively. The Secretaries appointed are qualified and are the members of the Malaysian Institute of Chartered Secretaries and Administrators ( MAICSA ). They play a supportive role by ensuring the Board adheres to the Board policies and procedures and regularly update the Board with new statutes and guidelines issued by the regulatory authorities. In addition, the Company also has an in-house company secretary who is a member of the Malaysian Institute of Accountants. 7. CODE OF CONDUCT & ETHICS, WHISTLEBLOWING POLICY AND SUSTAINABILITY POLICY In line with the recommendations of the Code, the Code of Conduct & Ethics, Whistleblowing Policy and Sustainability Policy have been established and approved by the Board on 25 April The Code of Conduct & Ethics and Whistleblowing Policy can be viewed at the Company s website at The Company s Sustainability Policy can be referred on page 27 of this annual report. The Code of Conduct & Ethics describes the behaviour expected of our employees and how they relate to our business principles and core values whilst the Whistleblowing Policy is designed to create a positive environment in which employees can raise genuine concerns without fear of recrimination and enable prompt corrective action to be taken where appropriate. 8. DIRECTORS TRAINING As an integral part of the process of appointing new Directors, the Nomination Committee ensures that there is an orientation programme for new Board members to familiarise themselves with the Company s businesses, their roles and responsibilities. In compliance with the Listing Requirements, all members of the Board have attended the required Mandatory Accreditation Programme. The directors continue to identify and attend appropriate training that may be required from time to time to keep themselves abreast with current developments in the industry as well as the current changes in laws and regulations.

18 Statement on Corporate Governance (cont d) 14 DOLOMITE CORPORATION BERHAD ( W) The types of training attended by the Directors for the financial year ended 31 December 2014 are as follows:- Directors Tan Sri Dato Seri Mohd Jamil Bin Johari Programme Be prepared. Success is only for those who are ready! Lew Choong Keong 1) Advocacy Sessions on Corporate Disclosure for Directors 2) Workshop on GST Impacts Construction and Property Developers: Managing the Implementation Costs 3) GST for Property Development and Construction Lim Beng Keat Huang Jen Soong Jeffrey Gerard Gomez None Advocacy Sessions on Corporate Disclosure for Directors Advocacy Sessions on Corporate Disclosure for Directors Dominic Aw Kian-Wee 1) Managing in Uncertainty: Surviving the Turbulence 2) Advocacy Sessions on Corporate Disclosure for Directors Seow Yoo Lin 1) KPMG MFRS/IFRS Update Seminar 2) FIDE Forum: Building a Talent Pool of Directors Directors Register 3) Advocacy Sessions on Corporate Disclosure for Directors 4) PWC GST Talk 5) FIDE Directors Programme 6) HSBC Forum: China Globalising RMB Rising 7) FIDE Events: Risk From Whereof: Andrew Sheng 8) ICLIF Leadership Energy Summit Asia ) ICLIF/Bursa Nominating Committee Programme 2 10) KPMG Tax Seminar 11) Audit Committee Institute The Impact of Cyber Security at Board level Mr Lim Beng Keat was unable to attend any training due to his busy work schedule. However, he has kept himself abreast on financial and business matters as well as changes in requirements and regulations to enable him to contribute to the Board effectively. 9. RETIREMENT BY ROTATION AND RE-ELECTION In accordance with the Articles of Association of the Company, all Directors are subject to retirement by rotation at regular intervals of at least three (3) years at the Annual General Meeting and they shall be eligible for re-election. The performance of the Directors who are subject to re-appointment and re-election at the Annual General Meeting will be assessed by the Nomination Committee and the recommendations will be submitted to the Board for decision on the tabling of the proposed re-appointment and re-election of the Director concerned for shareholders approval at the next Annual General Meeting. B. BOARD COMMITTEES The Board of Directors delegates certain responsibilities to Board Committees below and will periodically review their terms of reference. The Committees are required to report to the Board on their deliberations and recommendations. 1. AUDIT COMMITTEE The Company has in place an Audit Committee which comprises all Non-Executive Directors, the majority of whom are independent. The Audit Committee holds quarterly meetings to review matters including the Group s financial reporting, the nature and scope of audit reviews and the effectiveness of risk management framework and internal control system as well as to deliberate the findings of the internal and external auditors. In addition, the Audit Committee will meet as and when required to discuss any other matters of importance. The terms of reference of the Audit Committee are set out in the Company s website at

19 15 Annual Report 2014 Statement on Corporate Governance (cont d) 2. NOMINATION COMMITTEE The Nomination Committee s responsibility, among others, is to recommend the right candidate with the necessary skills, experience and competencies to be filled in the Board. The Board as a whole makes the decisions on the new appointments and is also responsible for assessing the performance of each existing Director. The Nomination Committee comprises four (4) Non-Executive Directors, the majority of whom are independent. The members are as follows:- Directors Huang Jen Soong (Chairman and Non-Independent Non-Executive Director) Tan Sri Dato Seri Mohd Jamil Bin Johari (Independent Non-Executive Director) Jeffrey Gerard Gomez (Senior Independent Non-Executive Director) Seow Yoo Lin (Independent Non-Executive Director) Although the Company has not met Recommendation 2.1 of the Code that recommends the Chair of the Nomination Committee to be the Senior Independent Director identified by the Board, the Board is satisfied that there is an appropriate mix of experience in the composition of the Committee. Mr Huang Jen Soong, a director of the Group since 1977, was the key driver that transformed the Group from a mere quarry operator into an integrated group specialising in building materials, construction and property development. With such extensive experience, the Board believes that Mr Huang would be able to lead the Committee and assess better the skills, experience and competencies of the candidate to be filled in the Board. Each year, the Nomination Committee assesses the effectiveness of the Board and Board Committees, contributions and performance of each individual Director, as well as Managing Director, and the independence of the Independent Directors. Based on recommendations made by the Nomination Committee, the Board carries out its own assessment on the adequacy of the contributions made by each existing Director. The Nomination Committee meets at least once a year. During the financial year ended 31 December 2014, the Nomination Committee held one (1) meeting to carry out assessment on the contribution and performance of each individual Director and this includes an assessment on the independence of the Independent Directors as well as noted the trainings attended by each individual Director. The Board is satisfied with the contribution and performance of each individual Director as well as the Independent Directors which complies with the criteria of independence set out in the Listing Requirements. Recommendation 3.2 of the Code recommends that the tenure of an Independent Director shall not exceed a cumulative term of nine (9) years. Upon attaining the tenure of nine (9) years, an Independent Director may continue to serve on the Board subject to his re-designation as a Non-Independent Director. However, based on the annual assessment conducted by the Nomination Committee, the Nomination Committee and the Board have determined that Tan Sri Dato Seri Mohd Jamil bin Johari and Mr Jeffrey Gerard Gomez, who have served as Independent Directors for more than nine (9) years, to be independent in character and judgement, independent of management and free from any relationships or circumstances which are likely to affect or could appear to affect their judgement of the Board and Board Committees. The Board views that a Director s independence cannot be determined with reference to a set period of time. The Group benefits from long serving Directors, such as Tan Sri Dato Seri Mohd Jamil bin Johari and Mr Jeffrey Gerard Gomez, who possess detailed knowledge of the Group s businesses and have proven commitment, experience and competence to effectively advise the management. The Nomination Committee also discussed the succession planning of the Group. The terms of reference of the Nomination Committee are set out in the Company s website at

20 Statement on Corporate Governance (cont d) 16 DOLOMITE CORPORATION BERHAD ( W) 3. REMUNERATION COMMITTEE The Remuneration Committee comprises mainly Non-Executive Directors, all of whom are non-independent. The members are as follows:- Directors Huang Jen Soong (Chairman and Non-Independent Non-Executive Director) Lim Beng Keat (Non-Independent Non-Executive Director) Lew Choong Keong (Non-Independent Executive Director) The primary role of the Remuneration Committee is to recommend to the Board the remuneration for Directors with the aim of ensuring that the Company attracts and retains the Directors needed to run the Group successfully. The remuneration of the Executive Director is structured on basis of linking rewards to corporate and individual performance. For Non-Executive Directors, the level of remuneration reflects the experience and degree of responsibilities. The Directors do not participate in decisions on their own remuneration packages. During the financial year ended 31 December 2014, two (2) meetings were held, which were attended by all members of the Remuneration Committee. The Remuneration Committee reviewed and recommended to the Board the remuneration of the Directors. The Company complies with the Code as it has a Remuneration Policy & Procedure to provide a framework for remuneration paid to the members of the Board of the Company. The remuneration policy recognises the need for the Company to attract, motivate and retain qualified members of the Board as well as to align the interests of the Board with the interests of the Company s shareholders. The remuneration of the Board shall be designed to support the strategic goals of the Company and to promote value creation for the benefit of the shareholders of the Company. To this end the remuneration policy embodies the following principles: Providing fair, consistent and competitive rewards to attract and retain high calibre executives. Motivating the Company s directors and executives to achieve superior performance. A remuneration framework that incorporates both short and long term incentives linked to the Company s performance and total shareholder return. Building a partnership between the Company and its directors by encouraging share ownership in the Company by directors. Remuneration Procedure The Board establishes the Remuneration Committee and it operates under a Terms of Reference approved by the Board. The Committee oversees the remuneration arrangements for directors of the Company within this Policy. The Remuneration Committee assesses the appropriateness of directors remuneration on an annual basis by reference to the principles of this Policy, overall employment market conditions, scope of work and the Company s financial position. The Remuneration Committee recommends remuneration for the directors to the Board for approval. Remuneration of the Board The members of the Board shall be remunerated with fixed annual fees approved at the Annual General Meeting and shall not be covered by incentive programs or be entitled to variable remuneration. All members of the Board who are also members of the committees established by the Board shall receive an additional fixed fee as remuneration for their contribution to the committee. The size of the fixed committee fee depends on the competencies, effort and scope of work required by the members of each committee. The Directors fees for the current financial year shall be approved at the Annual General Meeting of the Company.

21 17 Annual Report 2014 Statement on Corporate Governance (cont d) The directors are reimbursed expenses and may be supported in their role through Company sponsored professional development activities, Company supplied technology, insurance and indemnity cover and other benefits. The aggregate remuneration of Directors received/receivable from the Company and its subsidiaries for the financial year ended 31 December 2014 categorised in the following components are: EXECUTIVE NON-EXECUTIVE DIRECTORS DIRECTORS TOTAL RM 000 RM 000 RM 000 Fees Salaries & other emoluments Short term benefits Total The number of Directors whose remuneration falls within each of the following successive band of RM50,000 are: EXECUTIVE NON-EXECUTIVE RANGE OF REMUNERATION DIRECTORS DIRECTORS TOTAL Below RM50, RM50,001 to RM100, RM450,001 to RM500, Total Details of Directors Remuneration for each Director are not disclosed as the Company is of the view that the disclosure in the above band width shall be sufficient. The terms of reference of the Remuneration Committee are set out in the Company s website at C. ENSURE TIMELY AND HIGH QUALITY DISCLOSURE The Company complies with the Code through the establishment of Corporate Disclosure Policy. The aim of this Policy is to proactively communicate with the investors and shareholders to ensure that investors/shareholders are informed of balanced and understandable information about the Company (including Group s business, major developments and financial performance) in a factual and timely manner. Apart from the announcements published through the website of Bursa Securities, the Company also maintains a website at where shareholders as well as members of the public can access the latest information on the Company. D. RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS The Group values dialogue with investors as a means of effective communication that enables the Board to convey information about the Group s performance, corporate strategy and other matters affecting shareholders interests.

22 Statement on Corporate Governance (cont d) 18 DOLOMITE CORPORATION BERHAD ( W) E. DIALOGUE BETWEEN THE COMPANY AND INVESTORS Our Board is committed to ensure that, at all times, the stock market is in possession of correct and complete information about the Company s operations and condition. Our goal is for investors and shareholders to have a good understanding of the Company s activities so that they are in the best possible position to evaluate the share price and the Company s underlying value. The Board also encourages shareholders to participate, speak and vote at general meetings as well as the right to demand poll vote in the general meetings. At the last general meeting, the Chairman highlighted to the shareholders of their right to demand a resolution to be voted by poll. In maintaining effective communication with investors and shareholders, the Group strives to provide accurate, complete, transparent and clear information to its investors and shareholders quickly. At all times, the Group is committed to making announcements in accordance with the Listing Requirements and the Code. The Group establishes different communication channels with investors and shareholders such as follows: The annual general meeting provides a forum for shareholders to raise comments and exchange views with the Board; Latest and key information of the Group are available on the website of the Company at in compliance with Paragraph 9.21 of the Listing Requirements; Press conference and briefing meetings with investors, shareholders and analysts are set up when the needs arise from time to time on updated information of the Group; and The Company s Registrars serve the shareholders in respect of all share registration matters. Investors and shareholders can also obtain information on the Group through the Company s published Annual Reports, Quarterly Results and Announcements made to Bursa Malaysia Securities Berhad. In addition, investors and shareholders are also able to direct their queries to the Company through the Company s at cmboard@dolomite.com.my. Notwithstanding the above, the Company recognises the importance of accountability to shareholders and effective communication between the Company and investors. F. ACCOUNTABILITY AND AUDIT 1. FINANCIAL REPORTING In presenting the annual financial statements and quarterly announcement of results to shareholders, the Directors aim to present a balanced and understandable assessment of the Group s position and prospects. The Audit Committee has been tasked to assist the Board to oversee the financial statements reporting process and quality of the financial reports of the Group. The Directors consider that in preparing the financial statements, the Group has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgements and estimates. All accounting standards which the Board considers to be applicable have been followed, subject to any explanations and material departures disclosed in the notes to the financial statements. 2. RISK MANAGEMENT & INTERNAL CONTROL The Board acknowledges its responsibility for the Group s system of internal controls which covers financial control, operational and compliance controls as well as risk management. The Statement of Risk Management and Internal Control set out on pages 20 to 22 of this Annual Report provides an overview of the state of risk management and internal control within the Group.

23 19 Annual Report 2014 Statement on Corporate Governance (cont d) 3. RELATIONSHIP WITH THE AUDITORS The role of the Audit Committee in relation to the internal and external auditors, is disclosed in the Audit Committee Report set out on pages 23 to 26 of this Annual Report. The Group has always maintained a close and transparent relationship with its auditors in seeking professional advice and ensuring compliance with the accounting standards in Malaysia. The Audit Committee is committed to meet with the external auditors twice a year to discuss their audit plan, audit findings and the financial statements. During the financial year ended 31 December 2014, the external auditors met twice with the Audit Committee without the presence of the Management. In addition, the external auditors have also declared that they have complied with the ethical requirements regarding independence with respect to the conduct of the audit of the Group and were not aware of any non-audit services that have compromised their independence as external auditors of the Company. DIRECTORS RESPONSIBILITY STATEMENT ON FINANCIAL STATEMENTS The Board is responsible for ensuring that the financial statements of the Group give a true and fair view of the state of affairs of the Group and of the Company as at the end of the accounting period and of their profit or loss and cashflows for the period then ended. In preparing the financial statements, the Directors have ensured that applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 have been applied. In preparing the financial statements, the Directors have selected and applied consistently suitable accounting policies and made reasonable and prudent judgements and estimates. The Directors also have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

24 Statement on Risk Management & Internal Control 20 DOLOMITE CORPORATION BERHAD ( W) INTRODUCTION The Malaysian Code on Corporate Governance 2012 promulgates, inter-alia, the need for listed companies to maintain a sound risk management framework and internal control system to safeguard shareholders investment and Group s assets. The Board of Directors ( Board ) of Dolomite Corporation Berhad is pleased to present the Statement on Risk Management & Internal Control (the Statement ) which is in compliance with paragraph 15.26(b) of Bursa Malaysia Securities Berhad s Main Market Listing Requirements and has taken into account the guidelines mentioned in the Statement on Risk Management & Internal Control (Guidelines for Directors of Listed Issuers). BOARD S RESPONSIBILITY The Board acknowledges its responsibility for ensuring the adequacy and effectiveness of the Group s Risk Management and Internal Control System. This includes the establishment of an appropriate control environment and risk management framework, processes and structures and continually reviewing the adequacy and integrity of the said systems to safeguard shareholders investment and the Group s assets. Whilst acknowledging its responsibilities, the Board is aware of the limitations that are inherent in any systems of internal control and risk management where such systems being designed to manage, rather than eliminate, the risks that may impede the achievement of the Group s business objectives. Accordingly, it can only provide a reasonable, but not absolute assurance against material misstatement or losses, fraud or breaches of laws or regulations. ROLE OF THE MANAGEMENT Management is responsible for assisting the Board in implementing the processes for identifying, evaluating, monitoring and reporting risks and internal controls throughout the period. For the financial year under review, the Board has received assurance from the Managing Director and Financial Controller that the Group s risk management and internal control system is operating adequately and effectively, in all material aspects, based on the risk management and internal control system of the Group. KEY RISK MANAGEMENT AND INTERNAL CONTROL PROCESSES Risk Management Framework The Board firmly believes that an effective risk management is critical to the Group s achievement of business objectives and the enhancement of shareholder value. Therefore, the Board has put in place a formal enterprise risk management ( ERM ) framework. This framework aims to provide an integrated and organised approach entity-wide. It outlines the ERM methodology, mainly promoting the risk ownership and continuous monitoring of key risks identified. The risks identified remain the foundation in developing a risk profile and an action plan to assist the Board of Directors and Management to adequately respond to these risks. All the risks identified are maintained in a Risk Register Database to facilitate monitoring from time to time. There is a requirement to submit periodic risk management reports by respective heads of operating subsidiaries to the Managing Director, who will then highlight the risk issues to the Board of Directors as well as the Audit Committee. Briefings on ERM are conducted for Senior Management as part of the Group s efforts to instill a proactive risk management culture and implement a proper ERM framework in the Group. The framework is continually monitored to ensure it is responsive to the changes in the business environment. Internal Audit Function Pursuant to Paragraph 9.25(1), Part A of Appendix 9C(30) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Board is pleased to set out below its internal audit function. The Group s internal audit function is outsourced to a professional internal audit service provider and this ensures that the outsourced internal auditors is independent as it has no involvement in the operations of the Group. The outsourced internal auditor reports directly to the Audit Committee. The Audit Committee has full and direct access to internal auditors, reviews the reports on all audits performed and monitors its performance. The Audit Committee also in its framework reviews the adequacy of the scope, functions, competency and resources of the outsourced internal audit functions.

25 21 Annual Report 2014 Statement on Risk Management & Internal Control (cont d) The outsourced internal auditors carried out internal audits on various operating units within the Group based on a risk-based audit plan approved by the Audit Committee. Based on these audits, the outsourced internal auditors provided the Audit Committee with periodic reports highlighting observations, recommendations and management action plans to improve the system of internal control. During the financial period, a summary of activities carried out by the outsourced internal auditor include: Developing the internal audit plan for year Performed one (1) preliminary mapping analysis of risks associated with the processes which would be the main focus during audit reviews. Performed three (3) internal audit reviews, once on each of the areas relating to: (1) Dolomite Industries Company Sdn Bhd and Dolomite Hotmixes Sdn Bhd on sales order process, goods delivery process, and credit monitoring and collection; (2) Dolomite Engineering Sdn Bhd on project management; and (3) Dolomite Readymixed Concrete Sdn Bhd on production, maintenance, and sales and weighbridge. Issued reports on the results of the internal audit reviews, identifying weaknesses with suggested recommendations for improvements to management for further action to improve the system of internal control, Attended Audit Committee s meetings to table and discuss the audit reports. Followed-up on the implementation of corrective action plans agreed by Management. During the year, the Audit Committee has met four (4) times to carry out its responsibility in reviewing the internal audit function and to assure itself on the soundness of internal control system. The Committee also met the outsourced internal auditors without the presence of management to obtain independent view and assurance on any issues that can impede the performance of the outsourced internal auditors. The fees incurred for the outsourced internal audit function in respect of the financial year amounted to RM48,000. Other Key Elements of Internal Control Apart from the above, the other key elements of internal control include: The Board and Audit Committee The Board is responsible towards the overall effectiveness of the Group s risk management and internal control systems through establishing, directing and supervising the operation of a risk framework that adequately manages the various risks faced by the Group whilst the Audit Committee is overall responsible for providing assurance to the Board of Directors, as an independent party, on the effectiveness of the internal control systems and risk management in the Group. The daily running of business is entrusted to the Managing Director and the management team. Under the purview of the Managing Director, the respective heads of each operating subsidiary and department of the Group are empowered with the responsibility to manage their respective operations. Group Values and Code of Conduct In order to inculcate a standard of ethical behaviour for directors and employees of the Group, a Code of Conduct & Ethics has been established and communicated to all directors and employees of the Group. The Group s practice is guided by the Code of Conduct & Ethics. The Group also maintains a Whistleblowing Policy to allow employees to raise concerns without fear of reprisals on possible improprieties in matters of financial reporting, compliance and other malpractices at the earliest opportunity, and in an appropriate way. Under the Group s Whistleblowing Policy, the employee should immediately report any malpractice that exists in the work place to his/ her manager. However, if the employee feels reluctant to do so, the employee has an option to either report it to the Chairman of the Board or the Audit Committee Chairman. The Group s Code of Conduct & Ethics and Whistleblowing Policy are published in the Company website at

26 Statement on Risk Management & Internal Control (cont d) 22 DOLOMITE CORPORATION BERHAD ( W) Organisational Structure and Authorisation In striving to operate a sound system of risk management and internal control that drives the Group towards achieving its goals, the Board of Directors has put in place an organisation structure with formally defined lines of responsibility and delegation of authority. The head office coordinates the process for the Group for the coming year wherein the budgets are approved at operating unit level and ultimately by the Board of Directors. Major decisions that require the approval of the Board are only made after detailed appraisal and review. Proposals for major capital expenditure and new investment by the Group are reviewed and approved by the Board of Directors. Information and Communication The Audit Committee holds meetings to deliberate on the findings and recommendations for improvement by the internal auditor on the state of the internal control system and reports to the Board. The Audit Committee also reviews and deliberates on any matters relating to internal control highlighted by the External Auditors in the course of their statutory audit of the financial statements of the Group. Quarterly performance reports provide Management and the Board of Directors with information on financial performance and key business indicators. Monitoring and Review Scheduled periodic meetings of the Board, Board Committees and management represent the main platform by which the Group s performance and conduct is monitored. Informal Board and management meetings at operational level are also held during the financial year in order to assess performance and controls. Periodic reviews of adequacy and integrity of selected areas of internal control system are carried out by the internal audit function and results of such reviews are reported to the Audit Committee. The internal audit function thereby provides independent assurance on the areas reviewed by the internal audit function to the Board on the effectiveness of the Group s internal control system. In addition, the Management reports to the Board on a quarterly basis through the Audit Committee on the risk profile of the Group. Conclusion For the financial year under review and up to the date of issuance of the financial statements, the Board is satisfied with the adequacy and effectiveness of the Group s risk management and internal control system. There were no material losses that have arisen from any inadequacy or failure of the Group s system of internal control which required additional disclosure in the financial statements. The improvement of the system of internal controls is an on-going process and the Board maintains on-going commitment to strengthen the Group s control environment and processes. Review of the Statement by External Auditors As required by paragraph of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the external auditors have reviewed this Internal Control Statement. Their review was performed in accordance with Recommended Practice Guide (RPG) 5 (revised): Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report, issued by the Malaysian Institute of Accountants. Based on their review, nothing has come to their attention that causes them to believe that this statement is not prepared, in all material respects, in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers to be set out, nor is factually inaccurate. This Statement is made in accordance with the resolution of the Board of Directors dated 28 April 2015.

27 23 Annual Report 2014 Audit Committee Report FORMATION The Audit Committee was formed by the Board of Directors on 27 August COMPOSITION The current members of the Audit Committee are as follows: Jeffrey Gerard Gomez (Chairman and Senior Independent Non-Executive Director) Tan Sri Dato Seri Mohd Jamil Bin Johari (Independent Non-Executive Director) Lim Beng Keat (Non-Independent Non-Executive Director) Seow Yoo Lin (Independent Non-Executive Director) MEETINGS The Audit Committee held five (5) meetings during the financial year. The attendance of the committee members was as follows: Name of Audit Committee Member Total Number of Meetings Attended Jeffrey Gerard Gomez 5/5 Tan Sri Dato Seri Mohd Jamil Bin Johari 5/5 Lim Beng Keat 5/5 Seow Yoo Lin 5/5 The representatives of the external auditors, internal auditors and other officers of the Group were also invited to attend and brief the members on specific issues during the Audit Committee Meeting. KEY FUNCTIONS, ROLES AND RESPONSIBILITIES 1. RIGHTS AND AUTHORITY The Audit Committee is authorised to: 1.1 investigate any matter within its terms of reference; 1.2 have adequate resources required to perform its duties; 1.3 have full and unrestricted access to information, records and documents relevant to its activities; 1.4 have direct communication channels with the external and internal auditors; and 1.5 engage, consult and obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise it considers necessary. The Chairman of the Audit Committee shall engage on a continuous basis with senior management, such as the chairman, the managing director, the head of finance, the head of internal audit and the external auditors in order to be kept informed of matters affecting the Company.

28 Audit Committee Report (cont d) 24 DOLOMITE CORPORATION BERHAD ( W) 2. FUNCTIONS AND DUTIES The Audit Committee shall, amongst others, discharge the following functions: 2.1 To review and recommend for the Board s approval, the Internal Audit Charter which defines the independent purpose, authority, scope and responsibility of the internal audit function in the Company and the Group. 2.2 To review the following and report to the Board: With the external auditors: the audit plan, audit report and the extent of assistance rendered by the Group s employees during the audit; the evaluation of the system of internal controls; the audit fee and on matters concerning their suitability for nomination, appointment and re-appointment and the underlying reasons for resignation or dismissal as auditors; the management letter and management s response; and issues and reservations arising from audit With the internal auditors: ensure the internal audit function is independent of the activities it audits and the head of internal audit reports directly to the Audit Committee. The head of internal audit will be responsible for the regular review and/or appraisal of the effectiveness of the risk management, internal control and governance processes within the Company the adequacy and relevance of the scope, functions, competency and resources of internal audit and the necessary authority to carry out its work; the audit plan of work programme and results of internal audit processes including recommendations and actions taken; the extent of cooperation and assistance rendered by the Group s employees during the audit; and the appraisal of the performance of the internal audit including that of the senior staff and any matter concerning their appointment and termination; take cognizance of resignations of internal audit staff members (for in-house internal audit function) or the internal audit service provider (for out-sourced internal audit function) and provide the resigning staff member or the internal audit service provider an opportunity to submit his/her reasons for resigning, if necessary the quarterly results and year end financial statements prior to the approval by the Board, focusing particularly on: changes and implementation of major accounting policies and practices; significant and unusual issues; going concern assumption; and compliance with accounting standards, regulatory and other legal requirements identify significant or material risks and give an overall assessment on how they have been identified, evaluated and managed.

29 25 Annual Report 2014 Audit Committee Report (cont d) provide an opinion on the effectiveness of the related system of risk management and internal control in managing the significant risks, including exception reporting on significant risk management and control failures or weaknesses, which have a material impact on the Company s financial position the major findings of investigations and management response the propriety of any related party transaction and conflict of interest situation that may arise within the Company of the Group including any transaction, procedure or course of conduct that raises questions of management integrity. 2.3 To report breaches of the Listing Requirements which have not been satisfactorily resolved, to Bursa Malaysia Securities Berhad. 2.4 To prepare the Audit Committee Report for inclusion in the Company s Annual Report covering: the composition of the Audit Committee including name, designation and directorship of the members; the terms of reference of the Audit Committee; the number of meetings held and details of attendance of each member; a summary of the activities of the Audit Committee in the discharge of its functions and duties; and a summary of the activities of the internal audit function. 2.5 To review the following for publication in the Company s Annual Report: the disclosure statement of the Board on: the Company s applications of the principles and extent of compliance with the best practices of the Malaysian Code on Corporate Governance 2012; and specifying reasons for any area of non-compliance and the alternative measures adopted in such areas the statement on the Board s responsibility for the preparation of the annual audited financial statements the disclosure statement on the state of the internal controls system of the Company and of the Group other disclosures forming the contents of the Company s Annual Report spelt out in Part A of Appendix 9C of the Listing Requirements. The above functions and duties are in addition to such other functions as may be agreed from time to time by the Committee and the Board. 3. INTERNAL AUDIT FUNCTION The Head of the Outsourced Internal Audit Function shall have unrestricted access to the Audit Committee Members and report functionally directly to the Audit Committee whose scope of responsibility includes overseeing the internal audit functions. The Company has outsourced its internal audit functions to RSM Corporate Consulting Sdn Bhd ( RSM ) at a fee of RM48,000 for the financial year ended 31 December The main role of RSM is to review the effectiveness of risk management, internal controls and governance procedures within the Group. The representative(s) of RSM shall have unrestricted access to the Audit Committee Members and report to the Audit Committee.

30 Audit Committee Report (cont d) 26 DOLOMITE CORPORATION BERHAD ( W) ACTIVITIES OF THE AUDIT COMMITTEE FOR YEAR 2014 The summary of the activities of the Audit Committee in the discharge of its duties and responsibilities were as follows: 1. reviewed the adequacy and relevance of the scope, functions, resources, risk based internal audit plan and results of the internal audit processes with the internal auditors; 2. reviewed the audit activities carried out by the internal auditors and the audit reports to ensure corrective actions are taken in addressing the risk issues reported; 3. reviewed the significant or material risks identified as a result of the review conducted by management; 4. reviewed with the assistance of the management, the adequacy, appropriateness and compliance of the procedures established to monitor recurrent related party transactions; 5. reviewed all related party transactions (if any) entered into by the Company and the Group at the Audit Committee s quarterly meetings to ensure that the transactions entered into were at arm s length basis and on normal commercial terms; 6. reviewed with external auditors, the Group s audit plan for the year (inclusive of risk and audit approach, system evaluation, audit fees, issues raised and management responses) prior to the commencement of the annual audit; 7. reviewed the financial statements, the audit report, issues and reservations arising from audit and the management letter with the external auditors; 8. met with the external auditors and internal auditors without the presence of management staff and the Executive Director twice during the financial year ended 31 December 2014; 9. reviewed the quarterly and year end financial statements with management for recommendation to the Board of Directors for approval and release to Bursa Securities; 10. updated and advised the Board on any latest changes and circulars issued by the accountancy, statutory and regulatory bodies; 11. reported to the Board on significant issues and concerns discussed during the Audit Committee s meetings together with applicable recommendations. Minutes of meetings of the Audit Committee were made available to all Board members; 12. reviewed and approved the Audit Committee Report for the financial year ended 31 December 2014 for inclusion in the Company s Year 2014 Annual Report; 13. reviewed the disclosure statements on compliance of the Malaysian Code on Corporate Governance 2012 and Directors Responsibility Statement on the annual audited financial statements for inclusion in the Company s Year 2014 Annual Report; 14. recommended to the Board the re-appointment of Messrs Crowe Horwath, a firm of chartered accountants, as external auditors of the Group for the financial year ended 31 December OPTIONS GRANTED OVER UNISSUED SHARES The establishment of an Employees Share Option Scheme ( ESOS ) was approved at the Extraordinary General Meeting held on 28 September The initial period of the ESOS of five (5) years had lapsed on 23 November The duration of the ESOS which had been extended for another five (5) years had lapsed on 23 November No options have been granted pursuant to the ESOS to eligible directors and employees of the Group.

31 27 Annual Report 2014 Sustainability Policy The Board acknowledges that Dolomite Corporation Berhad will be judged not solely on its financial performance, but increasingly on its wider impact and role within society. The Malaysian Code on Corporate Governance 2012 recommends the Board to ensure the company s strategies promote sustainability especially in the aspect of environment, social and governance. As a responsible corporate body, the Group remains committed to its principle of maintaining a balance between its economic, social and environmental responsibilities to the community, environment, workplace and marketplace in its business dealings and operating environments. Health & safety and environmental issues have always been the priority concern of the Group in all its operating, manufacturing, construction or property development activities. While pursuing its business goal in enhancing and upholding the bottomline and shareholders value, the Group has consistently been involved in various programmes organized by charitable organizations. The Group has also been contributing to the needy and less fortunate groups in society. As such, the Board is pleased to set out below its sustainability commitment that will provide positive impact towards the company s sustainable development. The sustainability policy is available at the Company s website at

32 Diversity Policy 28 DOLOMITE CORPORATION BERHAD ( W) The Board is pleased to set out below its approach to boardroom diversity as recommended by the Malaysian Code on Corporate Governance Policy The Company is committed to actively managing diversity as a means of enhancing the Company s performance by recognising and utilising the contribution of diverse skills and talent from its directors, officers and employees. Diversity involves recognising and valuing the unique contribution people can make because of their individual background and different skills, experiences and perspectives. Diversity may result from a range of factors including age, gender, ethnicity, cultural background or other personal factors. The Company values the differences between its people and the contribution these differences make to the Company. 1. Role of the Board It is the responsibility of the Board to foster an environment where: (a) (b) (c) Individual differences are respected. The ability to contribute and access employment opportunities is based on performance, skill and merit. The workplace embraces and promotes diversity, recognizing and accepting the individual differences across the Group. 2. Objectives The Company encourages diversity in employment, and in the composition of its Board, as a means of ensuring the Company has an appropriate mix of skills and talent to conduct its business and achieve the Company s goals. Specifically, the Company will provide equal opportunities in respect to employment and employment conditions, including: (a) (b) (c) Hiring: The Board will ensure appropriate selection criteria based on diverse skills, experience and perspectives is used when hiring new staff, including Board members. Job specifications, advertisements, application forms and contracts will not contain any direct or inferred discrimination. The Board is empowered to engage professional consultants to assist in the hiring process by presenting diverse candidates to the Company for consideration. Training: All internal and external training opportunities will be based on merit and in light of Company and individual needs. The Board will consider senior management training and executive mentoring programs to develop skills and experience to prepare employees for senior management and Board positions. Career Advancement: All decisions associated with career advancement, including promotions, transfers, and other assignments, will meet the Company s needs and be determined on skill and merit. 3. Boardroom Diversity The Board is of the view that, while it is important to promote boardroom diversity in terms of gender, age and ethnicity, the normal selection criteria based on an effective blend of competencies, skills, extensive experience and knowledge to strengthen the Board should remain a priority. The Nomination Committee has been tasked by the Board to continuously look for people with diverse skills and talent that can contribute to the Company. 4. Work environment Diversity is seen as an asset to organisations. It is an integral part of how business is carried out and imperative to commercial success. The Group recognizes that building a diverse workforce will result in improved service to clients and significant return to shareholders. The Company will provide a work environment that values and utilises the contributions of employees with diverse backgrounds, experiences and perspectives through improved awareness of the benefits of workforce diversity and successful management of diversity.

33 29 Annual Report 2014 Diversity Policy (cont d) 5. Reporting Responsibility It is the responsibility of all directors, officers and employees to comply with the Company s Diversity Policy. Any breach of compliance with this Diversity Policy is to be reported directly to the Chairman of the Board or the Audit Committee Chairman. The contact details of the Chairman of the Board and Audit Committee Chairman where concerns can be raised by the employee are as follow: Chairman of the Board Audit Committee Chairman Phone : Phone : cmboard@dolomite.com.my acommittee@dolomite.com.my 6. Summary of Diversity Policy The Board has adopted a Diversity Policy which describes the Company s commitment to ensuring a diverse mix of skills and talent exists amongst its directors, officers and employees, to enhance Company s performance. The Diversity Policy addresses equal opportunities in the hiring, training and career advancement of directors, officers and employees. The Board is responsible for monitoring Company s performance in meeting the Diversity Policy requirements.

34 Other Compliance Information 30 DOLOMITE CORPORATION BERHAD ( W) 1. STATUS OF UTILISATION OF PROCEEDS During the financial year, there were no proceeds raised by the Company from any corporate exercise. 2. NON-AUDIT FEES PAID TO EXTERNAL AUDITORS Non-audit fee amounting to RM5,000 was paid to external auditors for the financial year ended 31 December SHARE BUY-BACK During the financial year, there were no share buy-back of the Company s own shares. 4. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES EXERCISED 626,380 Warrants C were exercised into new ordinary shares on 16 January 2014 in respect of the financial year ended 31 December DEPOSITORY RECEIPTS ( DR ) PROGRAMME During the financial year, the Company did not sponsor any DR programmes. 6. IMPOSITION OF SANCTIONS AND/OR PENALTIES There were no sanctions and/or penalties imposed on the Company and the Group, Directors or management by the relevant regulatory authorities. 7. PROFIT ESTIMATE, FORECAST, PROJECTION OR UNAUDITED RESULTS There were no profit estimate, forecast or projection released by the Company. There were no significant variance between the released unaudited results of the Company and the audited results of the Company which require explanation and/or reconciliation. 8. PROFIT GUARANTEE No profit guarantee was given by the Company during the financial year. 9. MATERIAL CONTRACTS There were no material contracts entered into by the Company and the Group involving Directors or major shareholders interest. 10. CONTRACTS RELATING TO LOANS There were no contracts relating to loans by the Company involving Directors and major shareholders interests. 11. RECURRENT RELATED PARTY TRANSACTIONS OF REVENUE NATURE There were no recurrent related party transactions of revenue nature during the financial year ended 31 December 2014.

35 FINANCIAL STATEMENTS 32 Directors Report 37 Statement by Directors 37 Statutory Declaration 38 Independent Auditors Report 40 Statements of Financial Position 42 Statements of Profit or Loss and Other Comprehensive Income 43 Statements of Changes in Equity 45 Statements of Cash Flows 47 Notes to the Financial Statements

36 Directors Report 32 DOLOMITE CORPORATION BERHAD ( W) The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December PRINCIPAL ACTIVITIES The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year. RESULTS THE GROUP RM 000 THE COMPANY RM 000 Profit after taxation for the financial year 5,996 1,407 Attributable to:- Owners of the Company 7,199 1,407 Non-controlling interests (1,203) - 5,996 1,407 DIVIDENDS No dividend was paid since the end of the previous financial year and the directors do not recommend the payment of any dividend for the current financial year. RESERVES AND PROVISIONS All material transfers to or from reserves or provisions during the financial year are disclosed in the financial statements. ISSUES OF SHARES AND DEBENTURES During the financial year, (a) (b) there were no changes in the authorised share capital of the Company; the Company increased its issued and paid-up share capital from RM131,439,002 to RM131,752,192 by the issuance of 626,380 new ordinary shares of RM0.50 each upon the exercise of 626,380 Warrants at an exercise price of RM0.50 per share. The new ordinary shares issued during the financial year rank pari passu in all respects with the existing ordinary shares of the Company; and (c) there was no debenture issued by the Company.

37 33 Annual Report 2014 Directors Report (cont d) OPTIONS GRANTED OVER UNISSUED SHARES Warrants The Company issued 12,386,428 Warrants which were listed on the Main Market of Bursa Malaysia Securities Berhad on 14 August 2012, pursuant to the Rights Issue with Warrants on the basis of one (1) Warrant for every one (1) Rights RCPS subscribed. The number of warrants exercised during the financial year amounted to 626,380. The salient features of the Warrants as constituted in the Deed Poll dated 21 June 2012 are as follows:- Terms Detachability Exercise Price Details The Warrants are immediately detachable upon allotment and issue of the Rights RCPS. The Warrants will be traded separately. RM0.50 payable in full upon the exercise of each Warrant. The exercise price and the number of outstanding Warrants shall however be subject to the adjustments in accordance with the terms and provisions of the Deed Poll during the Exercise Period. Exercise Period Exercise Rights Deed Poll Board Lots Ranking of the new ordinary shares to be issued pursuant to the exercise of the warrants Adjustment in the Exercise Price and/ or the number of Warrants held by warrant holders in event of alteration to the share capital Further Issues Governing Laws The Warrants may be exercised any time during the tenure of the Warrants of five (5) years including and commencing from the issue date of the Warrants. Warrants not exercised during the Exercise Period will thereafter become lapse and void. Each Warrant entitles the registered holder to subscribe for one (1) new ordinary share of RM0.50 each in the Company at the Exercise Price during the Exercise Period and shall be subject to adjustments in accordance with the Deed Poll. The Warrants will be constituted by the Deed Poll. The Warrants are tradable upon listing on Bursa Securities in board lots of 100 units carrying the right to subscribe for 100 new ordinary shares of RM0.50 each of the Company at any time during the Exercise Period or such other number of units as may be prescribed by Bursa Securities. The new ordinary shares to be issued upon the exercise of the Warrants shall, upon allotment and issue, rank pari passu in all respects with the issued and paid-up ordinary shares of the Company, except that they will not be entitled to any dividends, rights, allotment and/or other distributions, the entitlement date of which is before the date of allotment of the said new ordinary shares. Subject to the provision in the Deed Poll, the Exercise Price and the number of Warrants held by each Warrant holder shall be adjusted by the Board in consultation with the adviser and certification of the external auditors of the Company, in the event of alteration to the share capital of the Company. Subject to the provision in the Deed Poll, the Company is free to issue shares to shareholders either for cash or as a bonus distribution and further subscription rights upon such terms and conditions as the Company sees fit but the Warrant holders will not have any participating rights in such issue unless otherwise resolved by the Company in general meeting. Laws of Malaysia. The summary of the movements of warrants is as follows:- NUMBER OF WARRANTS ISSUE DATE EXPIRY DATE AT GRANTED EXERCISED AT August August ,247,628 - (626,380) 11,621,248

38 Directors Report (cont d) 34 DOLOMITE CORPORATION BERHAD ( W) EMPLOYEES SHARE OPTION SCHEME The establishment of an Employees Share Option Scheme ( ESOS ) was approved at the Extraordinary General Meeting held on 28 September The initial period of the ESOS of five (5) years had lapsed on 23 November The duration of the ESOS which had been extended for another five (5) years to 23 November 2014 had also lapsed. No options have been granted pursuant to the ESOS to eligible directors and employees of the Group. BAD AND DOUBTFUL DEBTS Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for impairment losses on receivables, and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for impairment losses on receivables. At the date of this report, the directors are not aware of any circumstances that would require the further writing off of bad debts, or the additional allowance for impairment losses on receivables in the financial statements of the Group and of the Company. CURRENT ASSETS Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of business, including their value as shown in the accounting records of the Group and of the Company, have been written down to an amount which they might be expected so to realise. At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements misleading. VALUATION METHODS At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. CONTINGENT AND OTHER LIABILITIES Other than as disclosed in Note 43 to the financial statements, at the date of this report, there does not exist:- (i) (ii) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures the liabilities of any other person; or any contingent liability of the Group and of the Company which has arisen since the end of the financial year. No contingent or other liability of the Group and of the Company has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations when they fall due. CHANGE OF CIRCUMSTANCES At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading. ITEMS OF AN UNUSUAL NATURE The results of the operations of the Group and of the Company during the financial year were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature. There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year.

39 35 Annual Report 2014 Directors Report (cont d) DIRECTORS The directors who served since the date of the last report are as follows:- TAN SRI DATO SERI MOHD JAMIL BIN JOHARI HUANG JEN SOONG LIM BENG KEAT LEW CHOONG KEONG JEFFREY GERARD GOMEZ DOMINIC AW KIAN-WEE SEOW YOO LIN DIRECTORS INTERESTS According to the register of directors shareholdings, the interests of directors holding office at the end of the financial year in shares in the Company and its related corporations during the financial year are as follows:- NUMBER OF ORDINARY SHARES OF RM0.50 EACH AT AT BOUGHT SOLD DIRECT INTERESTS LIM BENG KEAT 44,011,626 10,000,000 (10,000,000) 44,011,626 HUANG JEN SOONG 14,978, ,978,919 LEW CHOONG KEONG 510, ,000 INDIRECT INTEREST HUANG JEN SOONG # 75,485, ,380-76,112,338 NUMBER OF RCPS OF RM0.01 EACH AT AT BOUGHT SOLD DIRECT INTERESTS LIM BENG KEAT 1,000, ,000,000 HUANG JEN SOONG 1,925, ,925,231 LEW CHOONG KEONG 40, ,000 INDIRECT INTEREST HUANG JEN SOONG # 7,148, ,148,842 NUMBER OF WARRANTS AT AT BOUGHT SOLD DIRECT INTERESTS LIM BENG KEAT 1,000, ,000,000 HUANG JEN SOONG 1,925, ,925,231 LEW CHOONG KEONG 40, ,000 INDIRECT INTEREST HUANG JEN SOONG # 7,775,222 - (626,380) 7,148,842 # Deemed interested by virtue of his wife, Madam Yap Koon Wah s substantial shareholding in Bong Sin Rubber Estates Company Sdn. Bhd. and Bong Sin Construction Company Sdn. Bhd. By virtue of their substantial shareholdings in the Company, Lim Beng Keat and Huang Jen Soong are deemed to have interests in shares in its related corporations during the financial year to the extent of the Company s interest, in accordance with Section 6A of the Companies Act The other directors holding office at the end of the financial year had no interest in shares in the Company or its related corporations during the financial year.

40 Directors Report (cont d) 36 DOLOMITE CORPORATION BERHAD ( W) DIRECTORS BENEFITS Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by directors as shown in the financial statements, or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest except for any benefits which may be deemed to arise from transactions entered into in the ordinary course of business with companies in which certain directors have substantial financial interests as disclosed in Note 40 to the financial statements. Neither during nor at the end of the financial year was the Group or the Company a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. SIGNIFICANT EVENT The significant event is disclosed in Note 45 to the financial statements. AUDITORS The auditors, Messrs. Crowe Horwath, have expressed their willingness to continue in office. SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS DATED Tan Sri Dato Seri Mohd Jamil Bin Johari Lew Choong Keong

41 37 Annual Report 2014 Statement by Directors We, Tan Sri Dato Seri Mohd Jamil Bin Johari and Lew Choong Keong, being two of the directors of Dolomite Corporation Berhad, state that, in the opinion of the directors, the financial statements set out on pages 40 to 104 are drawn up in accordance with Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company at 31 December 2014 and of their financial performance and cash flows for the financial year ended on that date. The supplementary information set out in Note 47 on page 105, which is not part of the financial statements, is prepared in all material respects, in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad. SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS DATED Tan Sri Dato Seri Mohd Jamil Bin Johari Lew Choong Keong Statutory Declaration I, Lo Sze Min, being the officer primarily responsible for the financial management of Dolomite Corporation Berhad, do solemnly and sincerely declare that the financial statements set out on pages 40 to 104 are, to the best of my knowledge and belief, 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 Subscribed and solemnly declared by Lo Sze Min, at Kuala Lumpur in the Federal Territory on this Before me Lo Sze Min

42 Independent Auditors Report To the members of Dolomite Corporation Berhad 38 DOLOMITE CORPORATION BERHAD ( W) Report on the Financial Statements We have audited the financial statements of Dolomite Corporation Berhad, which comprise the statements of financial position as at 31 December 2014 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 40 to 104. Directors Responsibility for the Financial Statements The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity 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 financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 31 December 2014 and of their financial performance and cash flows for the financial year then ended in accordance with Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia. Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:- (a) (b) 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. We have considered the financial statements and the auditors' reports of the subsidiaries of which we have not acted as auditors, which are indicated in Note 5 to the financial statements. (c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company's financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. (d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

43 39 Annual Report 2014 Independent Auditors Report To the members of Dolomite Corporation Berhad (cont d) The supplementary information set out in Note 47 on page 105 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ("MIA Guidance") and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad. Other Matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. Crowe Horwath Firm No: AF 1018 Chartered Accountants Chin Kit Seong Approval No: 3030/01/17 (J) Chartered Accountant 28 April 2015 Kuala Lumpur

44 Statements of Financial Position At 31 December DOLOMITE CORPORATION BERHAD ( W) THE GROUP THE COMPANY NOTE RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 ASSETS Restated Restated NON-CURRENT ASSETS Investments in subsidiaries , , ,593 Other investment Property, plant and equipment 7 256, , , Prepaid lease payments 8 9,281 11,141 13, Land use rights 9 2,359 2,675 2, Investment properties 10 17,769 1,694 1, Intangible assets 11 10,879 11,749 12, Property development costs 12 63,287 52,795 58, Deferred tax assets Deposits 14 11,200-11, , , , , , ,593 CURRENT ASSETS Inventories 15 18,866 22,713 31, Trade receivables 16 34,456 31,958 40, Other receivables, deposits and prepayments 14 34,628 25,616 6, Property development costs 17 88,595 78,067 79, Amount owing by subsidiaries ,520 31,040 25,831 Tax recoverable Deposits with licensed banks , Cash and bank balances 20 6,257 14,291 6, , , ,349 59,732 32,190 27,205 Non-current assets held for sale 21-24, TOTAL ASSETS 554, , , , , ,798 EQUITY AND LIABILITIES EQUITY Share capital , , , , , ,364 Reserves 23 28,262 22,399 7,240 60,548 59,141 61,665 TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY 160, , , , , ,029 NON-CONTROLLING INTERESTS 5 (5,614) (4,411) (2,624) TOTAL EQUITY 154, , , , , ,029 NON-CURRENT LIABILITIES Long-term borrowings , , ,891 4,455 4,455 4,459 Deferred tax liabilities Other payables 29 17,476 23,163 1, , , ,729 4,455 4,455 4,459 The annexed notes form an integral part of these financial statements.

45 41 Annual Report 2014 Statements of Financial Position At 31 December 2014 (cont d) THE GROUP THE COMPANY NOTE RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 Restated Restated CURRENT LIABILITIES Trade payables 30 31,066 31,476 30, Other payables and accruals 29 56,151 51,739 55, Amount owing to subsidiaries ,720 18,722 12,014 Short-term borrowings ,365 72,625 61, Provision for taxation 9,450 6,385 3, , , ,498 45,046 19,004 12,310 TOTAL LIABILITIES 400, , ,227 49,501 23,459 16,769 TOTAL EQUITY AND LIABILITIES 554, , , , , ,798 The annexed notes form an integral part of these financial statements.

46 Statement of Profit or Loss and Other Comprehensive Income For the financial year ended 31 December DOLOMITE CORPORATION BERHAD ( W) THE GROUP THE COMPANY NOTE RM'000 RM'000 RM'000 RM'000 REVENUE 32 86,421 98,856 5,000 1,000 COST OF SALES 33 (58,993) (71,728) - - GROSS PROFIT 27,428 27,128 5,000 1,000 OTHER INCOME 21,515 14, ,943 41,998 5,437 1,404 MARKETING AND DISTRIBUTION EXPENSES (6,440) (6,193) - - ADMINISTRATIVE EXPENSES (11,072) (10,252) (998) (1,046) OTHER EXPENSES (11,418) (3,129) (280) (1,140) FINANCE COSTS (6,544) (6,283) (2,718) (1,653) PROFIT/(LOSS) BEFORE TAXATION 34 13,469 16,141 1,441 (2,435) INCOME TAX EXPENSE 35 (7,473) (5,333) (34) (87) PROFIT/(LOSS) AFTER TAXATION 5,996 10,808 1,407 (2,522) OTHER COMPREHENSIVE INCOME, NET OF TAX Items that may be reclassified subsequently to profit or loss Foreign currency translation differences (1,336) 2, TOTAL COMPREHENSIVE INCOME/(EXPENSES) FOR THE FINANCIAL YEAR 4,660 13,374 1,407 (2,522) PROFIT/(LOSS) AFTER TAXATION ATTRIBUTABLE TO:- Owners of the Company 7,199 12,595 1,407 (2,522) Non-controlling interests (1,203) (1,787) - - 5,996 10,808 1,407 (2,522) TOTAL COMPREHENSIVE INCOME/(EXPENSES) ATTRIBUTABLE TO:- Owners of the Company 5,863 15,161 1,407 (2,522) Non-controlling interests (1,203) (1,787) - - 4,660 13,374 1,407 (2,522) EARNINGS PER SHARE (SEN) 36 - basic diluted N/A N/A The annexed notes form an integral part of these financial statements.

47 43 Annual Report 2014 Statements of Changes in Equity For the financial year ended 31 December 2014 NON-DISTRIBUTABLE DISTRIBUTABLE ATTRIBUTABLE FOREIGN TO EXCHANGE OWNERS NON- SHARE SHARE CAPITAL TRANSLATION WARRANTS ACCUMULATED OF THE CONTROLLING TOTAL CAPITAL PREMIUM RESERVE RESERVE RESERVE LOSSES COMPANY INTERESTS EQUITY THE GROUP NOTE RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Balance at ,364-68,694 3,284 1,734 (66,472) 138,604 (2,624) 135,980 Profit after taxation ,595 12,595 (1,787) 10,808 Other comprehensive income for the financial year: - foreign currency translation , ,566-2,566 Total comprehensive income for the financial year ,566-12,595 15,161 (1,787) 13,374 Issuance of shares upon: - conversion of RCPS (2) exercise of Warrants 23(c) (19) Balance at / , ,694 5,850 1,715 (53,879) 153,838 (4,411) 149,427 Profit after taxation ,199 7,199 (1,203) 5,996 Other comprehensive income for the financial year: - foreign currency translation (1,336) - - (1,336) - (1,336) Total comprehensive income for the financial year (1,336) - 7,199 5,863 (1,203) 4,660 Issuance of shares upon: - exercise of Warrants 23(c) (88) Balance at , ,694 4,514 1,627 (46,680) 160,014 (5,614) 154,400 The annexed notes form an integral part of these financial statements.

48 Statements of Changes in Equity For the financial year ended 31 December 2014 (cont d) 44 DOLOMITE CORPORATION BERHAD ( W) NON-DISTRIBUTABLE DISTRIBUTABLE SHARE SHARE CAPITAL WARRANTS ACCUMULATED TOTAL CAPITAL PREMIUM RESERVE RESERVE LOSSES EQUITY NOTE RM'000 RM'000 RM'000 RM 000 RM'000 RM'000 THE COMPANY Balance at ,364-68,694 1,734 (8,763) 193,029 Loss after taxation/total comprehensive expenses for the financial year (2,522) (2,522) Issuance of shares upon: - conversion of RCPS (2) 4 - exercise of Warrants 23(c) (19) - 69 Balance at / , ,694 1,715 (11,287) 190,580 Profit after taxation/total comprehensive income for the financial year ,407 1,407 Issuance of shares upon: - exercise of Warrants 23(c) (88) Balance at , ,694 1,627 (9,880) 192,300 The annexed notes form an integral part of these financial statements.

49 45 Annual Report 2014 Statements of Cash Flows For the financial year ended 31 December 2014 THE GROUP THE COMPANY RM'000 RM'000 RM'000 RM'000 CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES Profit/(Loss) before taxation 13,469 16,141 1,441 (2,435) Adjustments for:- Allowance for impairment loss on: - intangible assets investments in subsidiaries trade receivables 2,659 1, amount owing by subsidiaries Amortisation of: - intangible assets land use rights prepaid lease payments 1,860 1, Bad debts written off Deposits written off Depreciation of: - property, plant and equipment 1,485 1, investment properties Interest expense 6,569 6,283 2,717 1,653 Inventories written off 1,143 8, Property, plant and equipment written off Dividend received - - (5,000) (1,000) Fair value adjustment on other payables 2,793 (7,440) - - Gain on disposal of: - investment properties (4) property, plant and equipment (30) (59) - - Gain on fair value changes on investment properties (13,045) Gain on foreign exchanges - unrealised (185) Interest income (170) (189) (174) (404) Writeback of impairment losses on: - amount owing by subsidiaries - - (263) - - trade receivables (17) (161) trade receivables previously written off (43) Operating profit/(loss) before working capital changes 17,434 30,048 (999) (1,046) Increase in property development costs (10,660) (6,300) - - Decrease in inventories 2, Increase in trade and other receivables (14,139) (11,834) 6 (83) Increase/(Decrease) in trade and other payables 2,493 18, (14) CASH (FOR)/FROM OPERATIONS (2,168) 30,483 (949) (1,143) Income tax paid (4,411) (2,700) (13) (13) Income tax refunded Interest paid (6,569) (6,283) (433) (1,653) NET CASH (FOR)/FROM OPERATING ACTIVITIES (13,148) 22,295 (1,395) (2,300) BALANCE CARRIED FORWARD (13,148) 22,295 (1,395) (2,300) The annexed notes form an integral part of these financial statements.

50 Statements of Cash Flows For the financial year ended 31 December 2014 (cont d) 46 DOLOMITE CORPORATION BERHAD ( W) THE GROUP THE COMPANY NOTE RM'000 RM'000 RM'000 RM'000 BALANCE BROUGHT FORWARD (13,148) 22,295 (1,395) (2,300) CASH FLOWS (FOR)/FROM INVESTING ACTIVITIES Additional investment in subsidiaries - - (500) - Advances to subsidiaries - - (28,043) (5,068) Dividend received - - 5, Interest received Net (placement)/withdrawal of deposits pledged with licensed bank (14) Proceeds from disposal of property, plant and equipment Proceeds from disposal of investment properties Purchase of property, plant and equipment 37 (27,425) (40,245) - - Reversal in land use rights NET CASH (FOR)/FROM INVESTING ACTIVITIES (26,806) (39,805) (23,543) (4,318) BALANCE CARRIED FORWARD (39,954) (17,510) (24,938) (6,618) CASH FLOWS FROM/(FOR) FINANCING ACTIVITIES Advances from subsidiaries ,714 6,649 Drawdown of loans and borrowings 51,825 40, Net (repayment)/advances from trading partners (6,785) 7, Proceeds from exercise of Warrants Repayment of hire purchase obligations (1,250) (1,238) - - Repayment of loans and borrowings (5,547) (16,532) - - NET CASH FROM FINANCING ACTIVITIES 38,556 30,017 24,027 6,718 NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (1,398) 12,507 (911) 100 CURRENCY TRANSLATION DIFFERENCES (11,036) (9,955) - - CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR (20,717) (23,269) CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 38 (33,151) (20,717) The annexed notes form an integral part of these financial statements.

51 47 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December GENERAL INFORMATION The Company is a public company limited by shares and is incorporated under the Companies Act 1965 in Malaysia. The domicile of the Company is Malaysia. The registered office and principal place of business are as follows:- Registered office : Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, Petaling Jaya, Selangor Darul Ehsan. Principal place of business : 19, Dolomite Park Avenue, Jalan Batu Caves, Batu Caves, Selangor Darul Ehsan. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 28 April PRINCIPAL ACTIVITIES The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year. 3. BASIS OF PREPARATION The financial statements of the Group are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with Financial Reporting Standards ( FRSs ) and the requirements of the Companies Act 1965 in Malaysia. 3.1 During the current financial year, the Group has adopted the following new accounting standards and interpretations (including the consequential amendments, if any):- FRSs and IC Interpretations (Including The Consequential Amendments) Amendments to FRS 10, FRS 12 and FRS 127 (2011): Investment Entities Amendments to FRS 132: Offsetting Financial Assets and Financial Liabilities Amendments to FRS 136: Recoverable Amount Disclosures for Non-financial Assets Amendments to FRS 139: Novation of Derivatives and Continuation of Hedge Accounting IC Interpretation 21 Levies The adoption of the above accounting standards and interpretations (including the consequential amendments) did not have any material impact on the Group s financial statements. 3.2 The Group has not applied in advance the following accounting standards and interpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board ( MASB ) but are not yet effective for the current financial year:- FRSs and IC Interpretations (Including The Consequential Amendments) Effective Date FRS 9 Financial Instruments (IFRS 9 issued by IASB in July 2014) 1 January 2018 Amendments to FRS 10 and FRS 128 (2011): Sale or Contribution of Assets between an Investor and its Associate or Joint Venture 1 January 2016 Amendments to FRS 11 : Accounting for Acquisitions of Interests in Joint Operations 1 January 2016 Amendments to FRS 10, FRS 12 and FRS 128 (2011): Investment Entities Applying the Consolidation Exception 1 January 2016 Amendments to FRS 101: Presentation of Financial Statements Disclosure Initiative 1 January 2016 Amendments to FRS 116 and FRS 138: Clarification of Acceptable Methods of Depreciation and Amortisation 1 January 2016 Amendments to FRS 119: Defined Benefit Plans Employee Contributions 1 July 2014

52 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 48 DOLOMITE CORPORATION BERHAD ( W) 3. BASIS OF PREPARATION (CONT D) 3.2 FRSs and IC Interpretations (Including The Consequential Amendments) Effective Date Amendments to FRS 127 (2011): Equity Method in Separate Financial Statements 1 January 2016 Annual Improvements to FRSs Cycle 1 July 2014 Annual Improvements to FRSs Cycle 1 July 2014 Annual Improvements to FRSs Cycle 1 January 2016 The adoption of above accounting standards and interpretations (including the consequential amendments) is expected to have no material impact on the financial statements of the Group upon their initial application. 3.3 MASB has issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards ( MFRSs ), that are to be applied by all entities other than private entities; with the exception of entities that are within the scope of MFRS 141 (Agriculture) and IC Interpretation 15 (Agreements for Construction of Real Estate), including its parent, significant investor and venturer (herein called transitioning entities ). As announced by MASB on 2 September 2014, the transitioning entities are allowed to defer the adoption of MFRSs to annual periods beginning on or after 1 January Accordingly, as a transitioning entity as defined above, the Company has chosen to defer the adoption of MFRSs and will only prepare its first set of MFRS financial statements for the financial year ending 31 December The Company is currently assessing the possible financial impacts that may arise from the adoption of MFRSs and the process is still ongoing. 4. SIGNIFICANT ACCOUNTING POLICIES 4.1 Critical Accounting Estimates and Judgements Estimates and judgements are continually evaluated by the directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of the Group s accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below:- (a) Depreciation of Property, Plant and Equipment The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment are based on commercial factors which could change significantly as a result of technical innovations and competitors actions in response to the market conditions. The Group anticipates that the residual values of its property, plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. (b) Income Taxes There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Group recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the year in which such determination is made.

53 49 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 4.1 Critical Accounting Estimates and Judgements (Cont d) (c) Property Development The Group recognises property development revenue and expenses in the profit or loss by using the stage of completion method. The stage of completion is determined by the proportion that the property development costs incurred for work performed to date bear to the estimated total property development costs. Significant judgement 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 as the recoverability of the development projects. In making the judgement, the Group evaluates based on past experience and by relying on the work of specialists. (d) Construction Contracts Construction contracts accounting requires reliable estimation of the costs to complete the contract and reliable estimation of the stage of completion. (i) Contract Revenue Construction contracts accounting requires that variation claims and incentive payments only be recognised as contract revenue to the extent that it is probable that they will be accepted by the customers. As the approval process often takes some time, a judgement is required to be made of its probability and revenue recognised accordingly. (ii) Contract Costs Using experience gained on each particular contract and taking into account the expectations of the time and materials required to complete the contract, management estimates the profitability of the contract on an individual basis at any particular time. (e) Impairment of Non-Financial Assets When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the cashgenerating unit to which the asset is allocated, the management is required to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to determine the present value of those cash flows. (f) Write-down of Inventories Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories. (g) Classification Between Investment Properties and Owner-Occupied Properties The Group determines whether a property qualifies as an investment property, and has developed a criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Therefore, the Group considers whether a property generates cash flows largely independent of the other assets held by the Group. Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately (or leased out separately under a finance lease), the Group accounts for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as investment property.

54 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 50 DOLOMITE CORPORATION BERHAD ( W) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 4.1 Critical Accounting Estimates And Judgements (Cont d) (h) Impairment of Trade and Other Receivables An impairment loss is recognised when there is objective evidence that a financial asset is impaired. Management specifically reviews its loan and receivables financial assets and analyses historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgement to evaluate the adequacy of the allowance for impairment losses. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables. (i) Impairment of Available-for-sale Financial Assets The Group reviews its available-for-sale financial assets at the end of each reporting period to assess whether they are impaired. The Group also records impairment loss on available-for-sale equity investments when there has been a significant or prolonged decline in the fair value below their cost. The determination of what is significant or prolonged requires judgement. In making this judgement, the Group evaluates, among other factors, historical share price movements and the duration and extent to which the fair value of an investment is less than its cost. (j) Impairment of Goodwill Goodwill is tested for impairment annually and at other times when such indicators exist. This requires management to estimate the expected future cash flows of the cash-generating unit to which goodwill is allocated and to apply a suitable discount rate in order to determine the present value of those cash flows. The future cash flows are most sensitive to budgeted gross margins, growth rates estimated and discount rate used. If the expectation is different from the estimation, such difference will impact the carrying value of goodwill. (k) Fair Value Estimates for Certain Financial Assets and Liabilities The Group carries certain financial assets and liabilities at fair value, which requires extensive use of accounting estimates and judgement. While significant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Group uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect profit and/or equity. 4.2 Basis of Consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the end of the reporting period. Subsidiaries are entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on which control ceases, as appropriate. Intragroup transactions, balances, income and expenses are eliminated on consolidation. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group. Non-controlling interests are presented within equity in the consolidated statement of financial position, separately from the equity attributable to owners of the Company. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance. At the end of each reporting period, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests share of subsequent changes in equity.

55 51 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 4.2 Basis of Consolidation (Cont d) All changes in the parent s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of consideration paid or received is recognised directly in equity of the Group. Upon the loss of control of a subsidiary, the Group recognises any gain or loss on disposal in profit or loss which is calculated as the difference between:- (a) (b) the aggregate of the fair value of the consideration received and the fair value of any retained interest in the former subsidiary; and the previous carrying amount of the assets (including goodwill), and liabilities of the former subsidiary and any noncontrolling interests. Amounts previously recognised in other comprehensive income in relation to the former subsidiary are accounted for in the same manner as would be required if the relevant assets or liabilities were disposed of (i.e. reclassified to profit or loss or transferred directly to retained profits). The fair value of any investments retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under FRS 139 or, when applicable, the cost on initial recognition of an investment in an associate or a joint venture. Business combinations from 1 January 2011 onwards Acquisitions of businesses are accounted for using the acquisition method. Under the acquisition method, the consideration transferred for acquisition of a subsidiary is the fair value of the assets transferred, liabilities incurred and the equity interests issued by the Group at the acquisition date. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs, other than the costs to issue debt or equity securities, are recognised in profit or loss when incurred. In a business combination achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss. Non-controlling interests in the acquiree may be initially measured either at fair value or at the non-controlling interests proportionate share of the fair value of the acquiree s identifiable net assets at the date of acquisition. The choice of measurement basis is made on a transaction-by-transaction basis. Business combinations before 1 January 2011 All subsidiaries are consolidated using the purchase method. At the date of acquisition, the fair values of the subsidiaries net assets are determined and these values are reflected in the consolidated financial statements. The cost of acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. Non-controlling interests are initially measured at their share of the fair values of the identifiable assets and liabilities of the acquiree as at the date of acquisition. 4.3 Functional and Foreign Currencies (a) Functional and Presentation Currency The individual financial statements of each entity in the Group are presented in the currency of the primary economic environment in which the entity operates, which is the functional currency. The consolidated financial statements are presented in Ringgit Malaysia ( RM ), which is the Company s functional and presentation currency.

56 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 52 DOLOMITE CORPORATION BERHAD ( W) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 4.3 Functional and Foreign Currencies (Cont d) (b) Transactions and Balances Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss except for differences arising from the translation of available-for-sale equity instruments which are recognised in other comprehensive income. (c) Foreign Operations Assets and liabilities of foreign operations are translated to RM at the rates of exchange ruling at the end of the reporting period. Revenues and expenses of foreign operations are translated at exchange rates ruling at the dates of the transactions. All exchange differences arising from translation are taken directly to other comprehensive income and accumulated in equity under translation reserve. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income relating to that particular foreign operation is reclassified from equity to profit or loss. Goodwill and fair value adjustments arising from the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the end of the reporting period. 4.4 Financial Instruments Financial instruments are recognised in the statements of financial position when the Group has become a party to the contractual provisions of the instruments. Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously. A financial instrument is recognised initially at its fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial instrument (other than a financial instrument at fair value through profit or loss) are added to/deducted from the fair value on initial recognition, as appropriate. Transaction costs on the financial instrument at fair value through profit or loss are recognised immediately in profit or loss. Financial instruments recognised in the statements of financial position are disclosed in the individual policy statement associated with each item. (a) Financial Assets On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, heldto-maturity investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate. (i) Financial Assets at Fair Value Through Profit or Loss Financial assets are classified as financial assets at fair value through profit or loss when the financial asset is either held for trading or is designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges. Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. Dividend income from this category of financial assets is recognised in profit or loss when the Group s right to receive payment is established. Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assets that are held primarily for trading purposes are presented as current whereas financial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

57 53 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 4.4 Financial Instruments (Cont d) (a) Financial Assets (Cont d) (ii) Held-to-maturity Investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the management has the positive intention and ability to hold to maturity. Held-to-maturity investments are measured at amortised cost using the effective interest method less any impairment loss, with interest income recognised in profit or loss on an effective yield basis. Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12 months after the reporting date which are classified as current assets. (iii) Loans and Receivables Financial Assets Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. Loans and receivables financial assets are classified as current assets, except for those having settlement dates later than 12 months after the reporting date which are classified as non-current assets. (iv) Available-for-sale Financial Assets Available-for-sale financial assets are non-derivative financial assets that are designated in this category or are not classified in any of the other categories. After initial recognition, available-for-sale financial assets are remeasured to their fair values at the end of each reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the fair value reserve, with the exception of impairment losses. On derecognition, the cumulative gain or loss previously accumulated in the fair value reserve is reclassified from equity into profit or loss. Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group s right to receive payments is established. Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less accumulated impairment losses, if any. Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date. (b) Financial Liabilities All financial liabilities are initially measured at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method other than those categorised as fair value through profit or loss. Fair value through profit or loss category comprises financial liabilities that are either held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges. Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

58 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 54 DOLOMITE CORPORATION BERHAD ( W) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 4.4 Financial Instruments (Cont d) (c) Equity Instruments Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from proceeds. Dividends on ordinary shares are recognised as liabilities when approved for appropriation. (d) Redeemable Convertible Preference Shares ( RCPS ) The redeemable convertible preference shares are regarded as compound instruments, consisting of a liability component and an equity component. The component of redeemable convertible preference shares that exhibits characteristics of a liability is recognised as a financial liability in the statements of financial position, net of transaction costs. The dividends on those shares are recognised as interest expense in profit or loss using the effective interest method. On issuance of the redeemable convertible preference shares, the fair value of the liability component is determined using a market rate for an equivalent non-convertible debt and this amount is carried as a financial liability in accordance with the Group s accounting policy. The residual amount, after deducting the fair value of the liability component, is the equity component and is included in equity, net of transaction costs. The equity component is not remeasured subsequent to initial recognition. Transaction costs are apportioned between the liability and equity components of the redeemable convertible preference shares in proportion to their initial carrying amounts. (e) Warrants Reserve The warrants reserve assumes the relative fair value method of the Warrants, being the values determined and used to allocate the proceeds of the Rights Issue With Warrants and after deducting issue expenses. Warrants reserve is transferred to the share premium account upon the exercise of warrants and the warrants reserve in relation to the unexercised warrants at the expiry of the warrants will be transferred to retained profits. (f) Derecognition A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss. A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. 4.5 Investments in Subsidiaries Investments in subsidiaries are stated at cost in the statement of financial position of the Company, and are reviewed for impairment at the end of the reporting period if events or changes in circumstances indicate that the carrying values may not be recoverable. The cost of the investments includes transaction costs. On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the investments is recognised in profit or loss.

59 55 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 4.6 Investments in Joint Ventures Jointly-controlled entities are those entities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions. Jointly-controlled entities are accounted for in the consolidated financial statements using the equity method unless it is classified as held for sale (or included in a disposal group that is classified as held for sale). The consolidated financial statements include the Group s share of the income and expenses of the equity accounted joint ventures, after adjustments to align the accounting policies with those of the Group, from the date that joint control commences until the date that joint control ceases. When the Group s share of losses exceeds its interest in an equity accounted joint venture, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the joint venture. Investments in joint ventures are stated in the statement of financial position of the Group at cost less impairment losses. The Group has 50% ( %) effective ownership interest in an Indian incorporated jointly controlled entity, Dolomite Berhad - ALS Limited JV, whose principal activity is providing construction services for the National Highway Authority in India. The joint venture remained dormant during the financial year. The carrying amount of this interest has been reduced to Nil as the Group s share of losses has exceeded its interest. 4.7 Property, Plant and Equipment Property, plant and equipment, other than freehold land and buildings, are stated at cost less accumulated depreciation and impairment losses, if any. Depreciation is charged to profit or loss (unless it is included in the carrying amount of another asset) on the straightline method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:- Buildings 2% Motor vehicles 10% - 20% Plant, machinery and equipment 9.5% % Capital work-in-progress is not depreciated. The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment. Capital work-in-progress represents assets under construction, and which are not ready for commercial use at the end of reporting period. Capital work-in-progress is stated at cost, and is transferred to the relevant category of assets and depreciated accordingly when the assets are completed and ready for commercial use. Cost of capital work-in-progress includes direct costs, related expenditure and interest cost on borrowings taken to finance the construction or acquisition of the assets to the date that the assets are completed and put into use. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset is acquired, if applicable. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is recognised in profit or loss.

60 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 56 DOLOMITE CORPORATION BERHAD ( W) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 4.8 Prepaid Lease Payments Leases in which the Group does not assume substantially all the risks and rewards of ownership are classified as operating leases. Lease prepayment is stated at cost less accumulated amortisation and impairment losses, if any. Amortisation is recognised in profit or loss on a straight-line basis over the unexpired term of the leases. 4.9 Land Use Rights Land use rights are stated at cost less accumulated amortisation and impairment losses, if any. Amortisation is recognised in profit or loss on a straight-line basis over the term of the leases Investment Properties Investment properties are properties held either to earn rental income or for capital appreciation or for both. Initially investment properties are measured at cost including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value. Gains or losses arising from changes in the fair values of investment properties are recognised in profit or loss in the year in which they arise. Investment properties are derecognised when they have either been disposed of or when the investment property is permanently withdrawn from use and no future benefit is expected from its disposal. On the derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount is recognised in profit or loss. 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 or inventories, the fair value at the date of change becomes the cost for subsequent accounting purposes. If owner-occupied property becomes an investment property, such property shall be accounted for in accordance with the policy Intangible Assets (a) Goodwill Goodwill represents the excess of the fair value of the purchase consideration over the Group` s share of the fair values of the identifiable assets, liabilities and contingent liabilities of the subsidiaries at the date of acquisition. Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is reviewed for impairment annually or more frequent if events or changes in circumstances indicate that the carrying amount may be impaired. The impairment value of goodwill is recognised immediately in profit or loss. An impairment loss recognised for goodwill is not reversed in a subsequent period. Business combinations from 1 January 2011 onwards Under the acquisition method, any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interests recognised and the fair value of the Group s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree s identifiable assets and liabilities at the date of acquisition is recorded as goodwill. Where the latter amount exceeds the former, after reassessment, the excess represents a bargain purchase gain and is recognised as a gain in profit or loss. Business combinations before 1 January 2011 Under the purchase method, goodwill represents the excess of the fair value of the purchase consideration over the Group s share of the fair values of the identifiable assets, liabilities and contingent liabilities of the subsidiaries at the date of acquisition. If, after reassessment, the Group s interest in the fair values of the identifiable net assets of the subsidiaries exceeds the cost of the business combinations, the excess is recognised as income immediately in profit or loss.

61 57 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 4.11 Intangible Assets (Cont d) (b) Quarry and Mining Development Costs and Computer Software Quarry and mining development costs are stated at cost and represent expenditure that is directly attributable to the quarry/mining development activities or that can be allocated on a reasonable basis to such activities. Computer software that is integral to the functionality of the related equipment is recognised as an intangible asset. (c) Subsequent Expenditure Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred. (d) Amortisation Amortisation is charged to profit or loss on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite and are amortised from the date that they are available for use. Goodwill and other intangible assets with indefinite useful lives are tested for impairment annually and whenever there is an indication that they may be impaired. The quarry and mining development costs are to be amortised on a straight-line basis over the lease periods ranging from 10 to 50 years. The estimated useful life of the computer software is 8 years Property Development Costs (a) Non-current Property Development Non-current property development costs consist of land and development costs where no development activities are carried out or where development activities are not expected to be completed within the normal operating cycle. Such land and development costs are carried at cost less any accumulated impairment losses. Costs associated with the acquisition of land include the purchase price of the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies. Pre-acquisition costs are charged to profit or loss as incurred unless such costs are directly identifiable to the consequent property development activity. Non-current property development costs are transferred to current asset when development activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle. (b) Current Property Development Current property development costs comprise costs associated with the acquisition of land and all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities. Property development costs that are not recognised as an expense are recognised as an asset and carried at the lower of cost and net realisable value. When the financial outcome of a development activity can be reliably estimated, the amount of property revenues and expenses recognised in profit or loss are determined by reference to the stage of completion of development activity at the end of the reporting period. When the financial outcome of a development activity cannot be reliably estimated, the property development revenue is recognised only to the extent of property development costs incurred that will be recoverable. The property development costs on the development units sold are recognised as an expense in the period in which they are incurred. Where it is probable that property development costs will exceed property development revenue, any expected loss is recognised as an expense in profit or loss immediately, including costs to be incurred over the defects liability period.

62 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 58 DOLOMITE CORPORATION BERHAD ( W) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 4.13 Impairment (a) Impairment of Financial Assets All financial assets (other than those categorised at fair value through profit or loss), are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. For an equity instrument, a significant or prolonged decline in the fair value below its cost is considered to be objective evidence of impairment. An impairment loss in respect of held-to-maturity investments and loans and receivables financial assets is recognised in profit or loss and is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows, discounted at the financial asset s original effective interest rate. An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in the fair value reserve. In addition, the cumulative loss recognised in other comprehensive income and accumulated in equity under fair value reserve, is reclassified from equity to profit or loss. With the exception of available-for-sale equity instruments, 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 through profit or loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. In respect of available-for-sale equity instruments, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss made is recognised in other comprehensive income. (b) Impairment of Non-Financial Assets The carrying values of assets, other than those to which FRS Impairment of Assets does not apply, are reviewed at the end of each reporting period for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their value-inuse, which is measured by reference to discounted future cash flow. An impairment loss is recognised in profit or loss immediately unless the asset is carried at its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previously recognised revaluation surplus for the same asset. In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately, unless the asset is carried at its revalued amount in which case the reversal of the impairment loss is treated as a revaluation increase Assets under Hire Purchase Assets acquired under hire purchase are capitalised in the financial statements at the lower of the fair value of the leased assets and the present value of the minimum lease payments and, are depreciated in accordance with the policy set out in Note 4.7 above. Each hire purchase payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. Finance charges are recognised in profit or loss over the period of the respective hire purchase agreements.

63 59 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 4.15 Inventories Completed properties held for resale are measured at the lower of cost and net realisable value. Cost is determined on a specific identification basis and includes land, all direct building costs and other related development costs. Raw materials and finished goods are measured at the lower of cost and net realisable value with weighted average cost being the main basis of costing method. Consumables are valued at cost using the first-in, first-out method. Costs of raw materials include the actual cost of materials and incidental costs in bringing these to their present condition and location. In the case of finished goods, cost includes an appropriate share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale Progress Billings/Accrued Billings In respect of progress billings:- (i) (ii) where revenue recognised in profit or loss exceeds the billings to purchasers, the balance is shown as accrued billings under current assets; and where billings to purchasers exceed the revenue recognised to profit or loss, the balance is shown as progress billings under current liabilities Borrowing Costs Borrowing costs, directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of those assets, until such time as the assets are ready for their intended use or sale. Capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted. All other borrowing costs are charged to profit or loss as expenses in the period in which they are incurred Income Taxes Income tax for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the reporting period and is measured using the tax rates that have been enacted or substantively enacted at the end of the reporting period. Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the acquirer s interest in the net fair value of the acquiree s identifiable assets, liabilities and contingent liabilities over the business combination costs or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting period. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same taxation authority.

64 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 60 DOLOMITE CORPORATION BERHAD ( W) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 4.18 Income Taxes (Cont d) Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity and deferred tax arising from a business combination is included in the resulting goodwill or excess of the acquirer s interest in the net fair value of the acquiree s identifiable assets, liabilities and contingent liabilities over the business combination costs Cash and Cash Equivalents Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, bank overdrafts and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less. For the purposes of the statements of cash flows, cash and cash equivalents are presented net of bank overdrafts and pledged deposits Provisions Provisions are recognised when the Group has a present obligation as a result of past events, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate of the amount can be made. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the provision is the present value of the estimated expenditure required to settle the obligation. The unwinding of the discount is recognised as interest expense in profit or loss Employee Benefits (a) Short-term Benefits Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are measured on an undiscounted basis and are recognised in profit or loss in the period in which the associated services are rendered by employees of the Group. (b) Defined Contribution Plans The Group s contributions to defined contribution plans are recognised in profit or loss in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans Related Parties A party is related to an entity (referred to as the reporting entity ) if:- (a) A person or a close member of that person s family is related to a reporting entity if that person:- (i) (ii) (iii) has control or joint control over the reporting entity; has significant influence over the reporting entity; or is a member of the key management personnel of the reporting entity or of a parent of the reporting entity. (b) An entity is related to a reporting entity if any of the following conditions applies:- (i) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others). (ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member). (iii) Both entities are joint ventures of the same third party. (iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity. (v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity. (vi) The entity is controlled or jointly controlled by a person identified in (a) above. (vii) A person identified in (a)(i) above has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

65 61 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 4.22 Related Parties (Cont d) Close members of the family of a person are those family members who may be expected to influence, or to be influenced by, that person in their dealings with the entity Contingent Liabilities A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow of economic resources will be required or the amount of obligation cannot be measured reliably. A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using a valuation technique. The measurement assumes that the transaction takes place either in the principal market or in the absence of a principal market, in the most advantageous market. For non-financial asset, the fair value measurement takes into account a market s participant s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. For financial reporting purposes, the fair value measurements are analysed into level 1 to level 3 as follows:- Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liability that the entity can access at the measurement date; Level 2: Inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and Level 3: Inputs are unobservable inputs for the asset or liability. The transfer of fair value between levels is determined as of the date of the event or change in circumstances that caused the transfer Revenue Recognition (a) Property Development Revenue from property development is recognised from the sale of completed and uncompleted development properties. Revenue from the sale of completed properties is recognised when the sale is contracted. Revenue on uncompleted properties contracted for sale is recognised based on the stage of completion method unless the outcome of the development cannot be reliably determined in which case the revenue on the development is only recognised to the extent of development costs incurred that are recoverable. The stage of completion is determined based on the proportion that the development costs incurred for work performed to date bear to the estimated total development costs.

66 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 62 DOLOMITE CORPORATION BERHAD ( W) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 4.25 Revenue Recognition (Cont d) (b) Sale of Goods Revenue is measured at fair value of the consideration received or receivable and is recognised upon delivery of goods and customers acceptance and where applicable, net of returns and trade discounts. (c) Construction Contracts Revenue on contracts is recognised on the percentage of completion method unless the outcome of the contract cannot be reliably determined, in which case revenue on contracts is only recognised to the extent of contract costs incurred that are recoverable. Foreseeable losses, if any, are provided for in full as and when it can be reasonably ascertained that the contract will result in a loss. The stage of completion is determined based on surveys of work performed. (d) Interest Income Interest income is recognised on an accrual basis. (e) Dividend Income Dividend income from investment is recognised when the right to receive dividend payment is established. (f) Rental Income Rental income is recognised on an accrual basis Non-Current Assets Held for Sale Non current assets (or disposal group comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. Immediately before classification as held for sale, the non-current assets (or the disposal group) are remeasured in accordance with the Group s accounting policies. Upon classification as held for sale, the non-current assets (the disposal group) are not depreciated and are measured at the lower of their previous carrying amount and fair value less cost to sell. Any differences are recognised in profit or loss Operating Segments An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group s other components. An operating segment s operating results are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

67 63 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 5. INVESTMENTS IN SUBSIDIARIES THE COMPANY RM'000 RM'000 Unquoted shares, at cost:- At 1 January 197, ,117 Addition during the financial year 500 # 197, ,117 Accumulated impairment losses (15,548) (15,268) 182, ,849 Accumulated impairment losses:- At 1 January (15,268) (14,524) Addition during the financial year (280) (744) At 31 December (15,548) (15,268) # - Represents RM2 The details of the subsidiaries are as follows:- Country of Effective Name of Company Incorporation Equity Interest Principal Activities % % Dolomite Berhad Malaysia Investment holding. Dolomite Technology Sdn. Bhd. Malaysia Dormant. Dolomite Technology (HK) Limited ^ Hong Kong Investment holding. Dolomite Homes Sdn. Bhd. Malaysia Property development. Subsidiaries of Dolomite Berhad Dolomite Industries Company Sdn. Bhd. Malaysia Quarry operation, construction and property investment. Dolomite Industrial Park Sdn. Bhd. Malaysia Property development. Dolomite Hotmixes Sdn. Bhd. Malaysia Manufacture and sale of hotmixes. Dolomite Readymixed Concrete Sdn. Bhd. Malaysia Production and sale of readymixed concrete. Dolomite Transport Sdn. Bhd. Malaysia Transportation services. Dolomite Engineering Sdn. Bhd. Malaysia Builders and contractors. Dolomite-CM Quarries Sdn. Bhd. Malaysia Dormant. D'Marina Sdn. Bhd. Malaysia 50* 50* Property development.

68 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 64 DOLOMITE CORPORATION BERHAD ( W) 5. INVESTMENTS IN SUBSIDIARIES (CONT D) Country of Effective Name of Company Incorporation Equity Interest Principal Activities % % Subsidiary of Dolomite Industries Company Sdn Berhad Dolomite Properties Sdn. Bhd. Malaysia Property development. Subsidiary of Dolomite Technology Sdn Bhd Dolomite Biotech Sdn. Bhd. Malaysia Dormant. Subsidiary of Dolomite-CM Quarries Sdn Bhd Orris Capital Sdn. Bhd. Malaysia Dormant. Subsidiaries of Dolomite Technology (HK) Limited Dolomite Power-Shandong (HK) Limited ^ Hong Kong Investment holding. Dolomite (Guangzhou) International China Dormant. Trading Co. Ltd. ^ # Subsidiary of Dolomite Power-Shandong (HK) Limited Shandong Dolomite Thermal Power China Operation of a thermal power Co. Ltd. ( SDTP ) ^ plant. SDTP has not commenced its operations. ^ - Not audited by Messrs. Crowe Horwath. * - Denotes 50%+1 share. # - Deregistered on 31 May (a) The Company assessed the recoverable amount of the investments in subsidiaries and determined that an impairment loss of RM280,000 ( RM744,000) has been recognised as the recoverable amount is lower than the carrying amount. The recoverable amount of the cash-generating unit is determined using the fair value less costs to sell approach, and this is derived from the net assets position of the respective subsidiaries as at the end of the reporting period. The net assets position of the respective subsidiaries as at the end of the current reporting period has declined in the current financial year which was attributed to the reported losses continuously in the current and previous financial years in the respective subsidiaries. (b) The non-controlling interests at the end of the reporting period comprise the following:- THE GROUP RM'000 RM'000 D Marina Sdn. Bhd. (5,614) (4,411)

69 65 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 5. INVESTMENTS IN SUBSIDIARIES (CONT D) (c) The summarised financial information (before intra-group elimination) for the subsidiary that has non-controlling interests that are material to the Group is as follows:- D MARINA SDN. BHD RM 000 RM 000 At 31 December Non-current assets 24, Current assets 1,412 2,040 Non-current assets held for sale - 24,666 Non-current liabilities (11,490) (14,581) Current liabilities (25,821) (20,957) Net liabilities (11,228) (8,821) Financial year ended 31 December Revenue - - Loss after taxation/total comprehensive expenses for the financial year (2,405) (3,573) Total comprehensive expenses attributable to non-controlling interests (1,203) (1,787) Net cash flows for operating activities (1,373) (1,730) Net cash flows from investing activities Net cash flows from financing activities 1,085 1, OTHER INVESTMENT THE GROUP RM'000 RM'000 Unquoted shares:- At cost Accumulated impairment loss (675) (675) - - The investment in an associate was reclassified by the management as other investment in prior years as the Group decided not to assume any role in the business management nor exercise any influence in its financial and operating policy decisions in the foreseeable future. Investments in unquoted shares of the Group are designated as available-for-sale financial assets but are stated at cost as their fair values cannot be reliably measured using valuation techniques due to the lack of marketability of the shares. The details of this investment are as follows:- Country of Effective Name of Company Incorporation Equity Interest Principal Activities % % Beijing Glory Medical China Manufacturing and trading of Equipment Co. Ltd. ^ medical equipment. ^ - Not audited by Messrs. Crowe Horwath.

70 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 66 DOLOMITE CORPORATION BERHAD ( W) 7. PROPERTY, PLANT AND EQUIPMENT EFFECTS OF AT WRITTEN EXCHANGE DEPRECIATION AT ADDITIONS DISPOSAL OFF RATES CHARGE THE GROUP RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 NET BOOK VALUE Buildings 12, (312) 12,114 Motor vehicles (*) - - (211) 239 Plant, machinery and equipment 5,951 1,726 - (6) 21 (962) 6,730 Capital work-in-progress 201,431 26, , , ,226 27,785 - (6) 9,619 (1,485) 256,139 * - Represents RM1 EFFECTS OF AT WRITTEN EXCHANGE DEPRECIATION AT ADDITIONS DISPOSAL OFF RATES CHARGE THE GROUP RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 NET BOOK VALUE Buildings 12, (1) - (317) 12,399 Motor vehicles (*) - 15 (369) 445 Plant, machinery and equipment 4,914 2, (1,055) 5,951 Capital work-in-progress 149,103 40, , , ,287 42,423 - (1) 12,258 (1,741) 220,226 * - Represents RM3 ACCUMULATED AT ACCUMULATED IMPAIRMENT NET BOOK COST DEPRECIATION LOSSES VALUE THE GROUP RM'000 RM'000 RM'000 RM'000 At Buildings 14,584 (2,470) - 12,114 Motor vehicles 25,104 (24,865) Plant, machinery and equipment 64,169 (56,586) (853) 6,730 Capital work-in-progress 237, , ,913 (83,921) (853) 256,139 At Buildings 14,557 (2,158) - 12,399 Motor vehicles 25,320 (24,875) Plant, machinery and equipment 62,428 (55,624) (853) 5,951 Capital work-in-progress 201, , ,736 (82,657) (853) 220,226

71 67 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 7. PROPERTY, PLANT AND EQUIPMENT (CONT D) The net book value of property, plant and equipment acquired under hire purchase terms is as follows:- THE GROUP RM'000 RM'000 Motor vehicles Plant, machinery and equipment 3,820 3,348 4,152 3,824 Certain assets have been charged to licensed banks for banking facilities granted to the Group as disclosed in Note 31 to the financial statements as follows:- THE GROUP RM'000 RM'000 Buildings 12,114 12,399 Capital work-in-progress 237, , , ,830 Capital work-in-progress represents the infrastructure assets under construction, and which are not ready for commercial use at the end of reporting period. The infrastructure assets comprise the construction costs for a public regional thermal power plant in Shandong province of China. Interest expense capitalised for the infrastructure assets during the construction phase for the financial year amounted to RM6,539,000 ( RM5,110,000). 8. PREPAID LEASE PAYMENTS THE GROUP RM'000 RM'000 AT COST:- At 1 January/31 December 30,848 30,848 ACCUMULATED AMORTISATION:- At 1 January (19,707) (17,847) Amortisation charge during the financial year (1,860) (1,860) At 31 December (21,567) (19,707) Carrying value at 31 December 9,281 11,141 The prepaid lease payments relate to a piece of leasehold land held for own use in Malaysia. The leasehold land has a remaining tenure of 5 years ( years). The prepaid lease payments have been pledged to a licensed bank as security for banking facilities granted to the Group.

72 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 68 DOLOMITE CORPORATION BERHAD ( W) 9. LAND USE RIGHTS THE GROUP RM'000 RM'000 AT COST:- At 1 January 2,992 2,718 Reversal during the financial year (353) - Exchange differences At 31 December 2,743 2,992 ACCUMULATED AMORTISATION:- At 1 January (317) - Amortisation charge during the financial year (44) (306) Exchange differences (23) (11) At 31 December (384) (317) Carrying value at 31 December 2,359 2,675 The land use rights relate to a piece of leasehold land held in Shandong Province of China for the construction of a thermal plant. The land use rights are non-transferable and have a remaining tenure of 43 years ( years). The land use rights have been pledged to a licensed bank as security for banking facilities granted to the Group as disclosed in Note 31 to the financial statements. 10. INVESTMENT PROPERTIES FREEHOLD LAND OTHERS TOTAL THE GROUP RM 000 RM 000 RM 000 At / / , ,694 Transfer from property development costs (non-current) (Note 12) 3,107-3,107 Disposal during the financial year - (77) (77) Change in fair value recognised in profit or loss 13,045-13,045 At ,769-17,769 CARRYING AMOUNT:- At fair value ( ) 17,769-17,769 At cost ( ) 1, ,694 During the financial year, the Group changed its accounting policy with respect to the subsequent measurement of investment property from cost model to fair value model, with changes in fair value of RM million recognised in profit or loss. A retrospective application is not applied as the change to the prior years results is immaterial. The Group believes that subsequent measurement using the fair value model provides more relevant information about the financial performance of these assets, assists users to better understand the risks associated with these assets and is consistent with industry practice in relation to such type of assets.

73 69 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 10. INVESTMENT PROPERTIES (CONT D) (a) (b) The freehold land has been pledged to a licensed bank as security for banking facilities granted to the Group as disclosed in Note 31 to the financial statements. The fair values of investment properties are analysed as follows:- Level 1 Level 2 Level 3 Total The Group RM 000 RM 000 RM 000 RM Freehold land, at fair value - 17,769-17,769 The level 2 fair value of the freehold land has been derived using the market comparison approach performed by an independent valuer. Sales price of comparable properties in close proximity are adjusted for differences in key attributes such as property size. The most significant input into this valuation approach is price per square foot of comparable properties. There has been no change to the valuation technique during the financial year. There were no transfer between level 1 and level 2 during the financial year. In estimating the fair value, the highest and best use of the investment properties is their current use. 11. INTANGIBLE ASSETS QUARRY AND MINING COMPUTER DEVELOPMENT GOODWILL SOFTWARE COSTS TOTAL THE GROUP RM 000 RM 000 RM 000 RM 000 AT COST:- At / / , ,830 30,723 Written off - - (1,946) (1,946) At , ,884 28,777 ACCUMULATED AMORTISATION:- At (113) (8,035) (8,148) Amortisation charge - (16) (627) (643) At / (129) (8,662) (8,791) Amortisation charge - - (602) (602) Written off At (129) (8,308) (8,437) ACCUMULATED IMPAIRMENT LOSSES:- At (7,057) - (2,819) (9,876) Impairment loss (307) - - (307) At / (7,364) - (2,819) (10,183) Impairment loss (268) - - (268) Written off At (7,632) - (1,829) (9,461)

74 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 70 DOLOMITE CORPORATION BERHAD ( W) 11. INTANGIBLE ASSETS (CONT D) QUARRY AND MINING COMPUTER DEVELOPMENT GOODWILL SOFTWARE COSTS TOTAL THE GROUP RM 000 RM 000 RM 000 RM 000 CARRYING AMOUNT:- At ,400-4,349 11,749 At ,132-3,747 10,879 Goodwill Goodwill is stated at cost and reviewed for impairment annually. For the purpose of impairment testing, goodwill is allocated to the Group s operating divisions which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes. The aggregate carrying amount of goodwill is allocated to the Group s property development segment. The recoverable amount was determined based on fair value less costs to sell and value-in-use. The fair value less costs to sell has been determined after taking into account the intrinsic value of the land held for property development. The land held for development is determined using a valuation carried out by an independent valuer. The recoverable amount of a cash-generating unit is determined based on value-in-use calculations using cash flow projections on financial budgets approved by management covering a period of three years. The cash flow projections are using estimated growth rates based on past years achievement, the expected projects to be launched in the next financial year and the management s expectations of market developments and are discounted using a discount rate of 10.7% per annum. The discount rate used is pre-tax and reflects specific risks relating to the relevant segments. The management believes that no reasonably possible change in any of the above key assumptions would cause the carrying value of the goodwill to be materially higher than its recoverable amount. An impairment loss of RM268,000 ( RM307,000) was recognised. The impairment loss recognised is in respect of the utilisation of certain land bank of the Group which is under development in line with the proportion of gross development value that has been earned. 12. PROPERTY DEVELOPMENT COSTS (NON-CURRENT) FREEHOLD DEVELOPMENT LAND EXPENDITURE TOTAL THE GROUP RM 000 RM 000 RM 000 At ,035 53,201 58,236 Addition during the financial year Transfer to non-current assets held for sale (Note 21) - (5,564) (5,564) At / ,035 47,760 52,795 Addition during the financial year Transfer to investment properties (Note 10) (289) (2,818) (3,107) Transfer from non-current assets held for sale (Note 21) - 5,564 5,564 Transfer from property development costs (current) (Note 17) - 7,902 7,902 At ,746 58,541 63,287 The freehold land of the Group has been pledged to licensed banks as security for certain banking facilities granted to the Group as disclosed in Note 31 to the financial statements.

75 71 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 13. DEFERRED TAX ASSETS THE GROUP RM'000 RM'000 At 1 January/31 December The deferred tax assets are in respect of temporary differences arising from unabsorbed capital allowances on qualifying assets of a subsidiary. THE GROUP RM'000 RM'000 Unabsorbed capital allowances 4,361 8,876 Unutilised tax losses 15,001 14,456 Provisions 1,010-20,372 23,332 Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profits will be available against which the Group can utilise these benefits. 14. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 Restated No deferred tax assets are recognised on the following items:- Non-current:- Deposits:- At 1 January - 11, Transfer from/(to) non-current assets held for sale (Note 21) 11,200 (11,200) - - At 31 December 11, Current:- Other receivables 33,448 24, Allowance for impairment losses (148) (148) ,300 24, Sundry deposits 1,258 1, Sundry prepayments ,628 25, ALLOWANCE FOR IMPAIRMENT LOSSES:- At 1 January (148) (320) - - Written off during the financial year At 31 December (148) (148) - -

76 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 72 DOLOMITE CORPORATION BERHAD ( W) 14. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS (CONT D) (a) (b) The deposits of RM11.2 million represented the commitment deposit being part payment towards land cost, for the purpose of developing a parcel of converted leasehold land in Mukim Kuala Kuantan. Included in the other receivables was loan made to an overseas contractor of the infrastructure assets amounting to RM million ( RM million) which is unsecured, interest-free and repayable on demand. 15. INVENTORIES THE GROUP RM'000 RM'000 AT COST:- Developed properties for sale 1,055 1,208 Raw materials and consumables 772 2,092 Finished goods 17,039 19,413 18,866 22,713 Recognised in profit or loss Inventories recognised as cost of sales 3,847 9,280 Inventories written off 1,143 8,811 The inventories written down were in respect of inventories which were unsuitable for re-sale. None of the inventories are carried at net realisable value. 16. TRADE RECEIVABLES THE GROUP RM'000 RM'000 Restated Trade receivables 13,205 13,629 Allowance for impairment losses (6,877) (6,134) 6,328 7,495 Progress billings receivable 319 1,237 Retention sum ,631 9,710 Accrued billings in respect of property development 26,825 22,248 Total 34,456 31,958 ALLOWANCE FOR IMPAIRMENT LOSSES:- At 1 January (6,134) (6,066) Addition during the financial year (2,659) (1,640) Written off during the financial year 1,899 1,411 Writeback during the financial year At 31 December (6,877) (6,134)

77 73 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 16. TRADE RECEIVABLES (CONT D) (a) (b) (c) The credit terms of the Group and of the Company range from 14 to 30 days ( to 30 days). The allowance for impairment losses relates mainly to trade receivables in significant financial difficulties and have defaulted on payments. Other credit terms are assessed and approved on a case-by-case basis. 17. PROPERTY DEVELOPMENT COSTS (CURRENT) FREEHOLD DEVELOPMENT LAND EXPENDITURE TOTAL THE GROUP RM 000 RM 000 RM ACCUMULATED COSTS:- At ,138 89, ,258 Addition during the financial year 80 29,080 29,160 Transfer from non-current assets held for sale (Note 21) - 7,902 7,902 Transfer to property development costs (non-current) (Note 12) - (7,902) (7,902) At , , ,418 ACCUMULATED COSTS RECOGNISED IN PROFIT OR LOSS:- At (10,409) (62,782) (73,191) Costs recognised in profit or loss during the financial year (3,640) (14,992) (18,632) At (14,049) (77,774) (91,823) NET PROPERTY DEVELOPMENT COSTS 48,169 40,426 88, ACCUMULATED COSTS:- At ,138 65, ,855 Addition during the financial year - 43,824 43,824 Reversal of costs for completed projects - (12,519) (12,519) Transfer to non-current assets held for sale (Note 21) - (7,902) (7,902) At ,138 89, ,258 ACCUMULATED COSTS RECOGNISED IN PROFIT OR LOSS:- At (9,935) (38,128) (48,063) Costs recognised in profit or loss during the financial year (474) (37,173) (37,647) Reversal of costs for completed projects - 12,519 12,519 At (10,409) (62,782) (73,191) NET PROPERTY DEVELOPMENT COSTS 51,729 26,338 78,067 Development expenditure during the financial year includes: THE GROUP RM'000 RM'000 Interest expense capitalised 1,783 1,607 Interest capitalised was at rates ranging from 5.35% to 8.35% ( % to 8.10%) per annum. The freehold land of the Group has been pledged to licensed banks as security for certain banking facilities granted to the Group as disclosed in Note 31 to the financial statements.

78 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 74 DOLOMITE CORPORATION BERHAD ( W) 18. AMOUNTS OWING BY/(TO) SUBSIDIARIES THE COMPANY RM'000 RM'000 Amount owing by:- Non-trade balances 59,520 31,303 Allowance for impairment losses - (263) 59,520 31,040 Amount owing to:- Non-trade balances (44,720) (18,722) The amounts owing by/(to) subsidiaries are unsecured, repayable on demand and are subjected to interest at 8.00% ( %) per annum. 19. DEPOSITS WITH LICENSED BANKS Included in deposits placed with licensed banks of the Group was an amount of RM448,000 ( RM434,000) pledged for a bank guarantee issued to a third party. The deposits with licensed banks at the end of the reporting period bore an average interest of 2.99% ( %) per annum. The maturity periods of the deposits with licensed banks range from three (3) to twelve (12) months ( three (3) to twelve (12) months). 20. CASH AND BANK BALANCES Included in the cash and bank balances of the Group is an amount of RM1,337,000 ( RM1,941,000) maintained under the Housing Development Accounts pursuant to Section 7A of the Housing Development (Control and Licensing) Act 1966 which is restricted from use in other operations. Included in cash and bank balances of the Group is an amount of RM3,324,000 ( RM8,113,000) held in Chinese Renminbi ( RMB ). The RMB is not freely convertible to other foreign currencies. Under The People s Republic of China s ( PRC ) Foreign Exchange Control Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations, the Group is permitted to exchange RMB for foreign currencies through banks that are authorised to conduct foreign exchange business. 21. NON-CURRENT ASSETS HELD FOR SALE THE GROUP RM'000 RM'000 Leasehold land At 1 January 24,666 - Transfer (to)/from:- Property development costs: - non-current (Note 12) (5,564) 5,564 - current (Note 17) (7,902) 7,902 Deposits (Note 14) (11,200) 11,200 At 31 December - 24,666

79 75 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 21. NON-CURRENT ASSETS HELD FOR SALE (CONT D) In the previous financial year, the management planned to dispose of a parcel of converted leasehold land held in Mukim Kuala Kuantan, consequently all related development costs capitalised and deposits paid in respect of the leasehold land have been reclassified as non-current assets held for sale. During the financial year, the prospective buyer decided not to proceed with the purchase of the leasehold land. Accordingly, the management ceased to classify the leasehold land as non-current assets held for sales. 22. SHARE CAPITAL The movements in the authorised and paid-up share capital of the Company are as follows:- AUTHORISED THE GROUP/THE COMPANY NUMBER OF SHARES RM'000 RM'000 Ordinary Shares Of RM0.50 Each 1,999,400 1,999, , ,700 RCPS Of RM0.01 Each 30,000 30, TOTAL 2,029,400 2,029,400 1,000,000 1,000,000 ISSUED AND FULLY PAID-UP THE COMPANY NUMBER OF SHARES RM'000 RM'000 Ordinary Shares Of RM0.50 each At 1 January 262, , , ,364 Issuance of shares upon: - conversion of RCPS exercise of Warrants At 31 December 263, , , ,439 The RCPS are classified as non-current liabilities and their details are disclosed in Note 25 to the financial statements. 23. RESERVES THE GROUP THE COMPANY NOTE RM'000 RM'000 RM'000 RM'000 Share premium (a) Capital reserve (b) 68,694 68,694 68,694 68,694 Foreign exchange translation reserve (c) 4,514 5, Warrants reserve (d) 1,627 1,715 1,627 1,715 Accumulated losses (46,680) (53,879) (9,880) (11,287) 28,262 22,399 60,548 59,141

80 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 76 DOLOMITE CORPORATION BERHAD ( W) 23. RESERVES (CONT D) (a) Share Premium THE GROUP/ THE COMPANY RM'000 RM'000 At 1 January 19 - Arising from exercise of Warrants during the financial year (Note 23(c)) At 31 December (b) Capital Reserve The capital reserve arose from the par value reduction exercise in prior years. (c) Foreign Exchange Translation Reserve The foreign exchange translation reserve arose from the translation of the financial statements of foreign subsidiaries and is not distributable by way of dividends. (d) Warrants Reserve THE GROUP/THE COMPANY NUMBER OF WARRANTS RM'000 RM'000 At 1 January 12,247 12,386 1,715 1,734 Exercise of Warrants during the financial year (Note 23(d)) (626) (139) (88) (19) At 31 December 11,621 12,247 1,627 1,715 The allocated fair value of free Warrants are credited to a warrant reserve is non-distributable. During the financial year, the warrants reserve is transferred to the share premium account upon the exercise of Warrants. The Directors have allocated a fair value of RM0.14 per Warrant to the free Warrants. The value of the Warrants is based on the relative fair values of the ordinary shares by reference to the critical assumptions comprising:- Valuation model : Black-Scholes Exercise type : American Share price : RM0.255 Exercise price : RM0.50 Expiry date : 8 August 2017 Dividend : Nil Volatility rate : Historical volatility of last past 1 year was 84.09% Period of volatility assessment : Average market days from 8 August 2011 to 9 August 2012 As at the end of the reporting period, 11,621,248 Warrants remain unexercised.

81 77 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 23. RESERVES (CONT D) (d) Warrants Reserve (Cont d) The salient features of the Warrants as constituted in the Deed Poll dated 21 June 2012 are as follows:- Terms Detachability Exercise Price Details The Warrants are immediately detachable upon allotment and issue of the Rights RCPS. The Warrants will be traded separately. RM0.50 payable in full upon the exercise of each Warrant. The exercise price and the number of outstanding Warrants shall however be subject to the adjustments in accordance with the terms and provisions of the Deed Poll during the Exercise Period. Exercise Period The Warrants may be exercised any time during the tenure of the Warrants of five (5) years including and commencing from the issue date of the Warrants. Warrants not exercised during the Exercise Period will thereafter become lapse and void. Exercise Rights Deed Poll Board Lots Ranking of the new ordinary shares to be issued pursuant to the exercise of the warrants Adjustment in the Exercise Price and/or the number of Warrants held by warrant holders in event of alteration to the share capital Further Issues Governing Laws Each Warrant entitles the registered holder to subscribe for one (1) new ordinary share of RM0.50 each in the Company at the Exercise Price during the Exercise Period and shall be subject to adjustments in accordance with the Deed Poll. The Warrants will be constituted by the Deed Poll. The Warrants are tradable upon listing on Bursa Securities in board lots of 100 units carrying the right to subscribe for 100 new ordinary shares of RM0.50 each of the Company at any time during the Exercise Period or such other number of units as may be prescribed by Bursa Securities. The new ordinary shares to be issued upon the exercise of the Warrants shall, upon allotment and issue, rank pari passu in all respects with the issued and paid-up ordinary shares of the Company, except that they will not be entitled to any dividends, rights, allotment and/or other distributions, the entitlement date of which is before the date of allotment of the said new ordinary shares. Subject to the provision in the Deed Poll, the Exercise Price and the number of Warrants held by each Warrant holder shall be adjusted by the Board in consultation with the adviser and certification of the external auditors of the Company, in the event of alteration to the share capital of the Company. Subject to the provision in the Deed Poll, the Company is free to issue shares to shareholders either for cash or as a bonus distribution and further subscription rights upon such terms and conditions as the Company sees fit but the Warrant holders will not have any participating rights in such issue unless otherwise resolved by the Company in general meeting. Laws of Malaysia.

82 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 78 DOLOMITE CORPORATION BERHAD ( W) 24. LONG-TERM BORROWINGS THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 RCPS (Note 25) 4,455 4,455 4,455 4,455 Term loans - secured (Note 26) 171, , Hire purchase payables (Note 27) 1,869 2, , ,467 4,455 4, REDEEMABLE CONVERTIBLE PREFERENCE SHARES ( RCPS ) THE GROUP/THE COMPANY NUMBER OF RCPS RM'000 RM'000 At 1 January 12,374 12,386 4,455 4,459 Conversion of RCPS to ordinary shares during the financial year - (12) - (4) At 31 December (Note 24) 12,374 12,374 4,455 4,455 On 9 August 2012, the Company issued 12,386,428 RCPS of RM0.01 each at an issue price of RM0.50 each. The total proceeds received from the issuance of the RCPS is split between a liability and an equity component. At the date of issue, the fair value of the liability component is estimated by discounting the future contractual cash flows at the prevailing market interest rate available to the Group. The salient terms of the RCPS are as follows:- Terms Dividend Tenure Maturity Date Redemption Conversion ratio Conversion price Conversion rights Details The Rights RCPS shall carry a cumulative dividend rate of 3.5 sen per Rights RCPS per annum, payable annually in arrears. Five (5) years from and including the date of issue of the Rights RCPS. The date occurring on the day immediately preceding the 5th anniversary from the date of issue of the Rights RCPS. The Rights RCPS is redeemable at 100% of its issue price at the discretion of the holder at any time from the fourth (4th) anniversary from the date of issue of the Rights RCPS up to the Maturity Date but always subject to the requirements of Section 61 of the Act. Any Rights RCPS not redeemed by the Maturity Date shall be automatically converted into new Ordinary Shares of RM0.50 each. Each RCPS shall be convertible at the option of the holder, into one (1) fully paid Ordinary Share of RM0.50 each. RM0.50 per RCPS for one (1) Ordinary Share of RM0.50 each. For the avoidance of doubt, the conversion price shall be deemed to be satisfied by the Rights RCPS holders tendering and surrendering the Rights RCPS and no cash money shall be payable. The registered holders of the Rights RCPS will have the right to convert each Rights RCPS into new Ordinary Shares of RM0.50 each at any time up to the Maturity Date.

83 79 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 25. REDEEMABLE CONVERTIBLE PREFERENCE SHARES ( RCPS ) (CONT D) Terms Ranking of new Shares Governing law Details The new Ordinary Shares of RM0.50 each to be issued pursuant to the conversion of the Right RCPS, if any, shall, upon allotment and issue, rank pari passu in all respects with the then existing issued and fully paid-up Ordinary Shares of RM0.50 each, save and except that they will not be entitled to any dividends, rights, allotments and/or distributions that may be declared, made or paid, the entitlement date for which is prior to the date of allotment of the new Ordinary Shares of RM0.50 each. Laws of Malaysia. 26. TERM LOANS - SECURED THE GROUP RM'000 RM'000 Current (Note 31): - not later than one year 29,785 15,185 Non-current (Note 24): - later than one year and not later than two years 45,785 45,759 - later than two years and not later than five years 110,612 96,783 - later than five years 14,802 13, , , , ,692 Information on interest rate of the term loans is disclosed in Note 44.1(c) to the financial statements and its security is disclosed in Note 31 to the financial statements. 27. HIRE PURCHASE PAYABLES THE GROUP RM'000 RM'000 Minimum hire purchase payments: - not later than one year 1,129 1,448 - later than one year and not later than five years 1,956 2,710 3,085 4,158 Less: Future finance charges (206) (389) Present value of hire purchase payables 2,879 3,769 Current (Note 31): - not later than one year 1,010 1,264 Non-current (Note 24): - later than one year and not later than five years 1,869 2,505 2,879 3,769 Information on interest rate of the hire purchase payables is disclosed in Note 44.1(c) to the financial statements.

84 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 80 DOLOMITE CORPORATION BERHAD ( W) 28. DEFERRED TAX LIABILITIES THE GROUP RM'000 RM'000 At 1 January Recognised in profit or loss (Note 35) (153) (11) At 31 December The deferred tax liabilities are in respect of temporary differences arising from accelerated capital allowances on qualifying assets. 29. OTHER PAYABLES AND ACCRUALS THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 Restated Non-current:- Other payables:- Advances from trading partners 17,476 23, Current:- Deferred capital gain - 6, Other payables and accruals 19,492 11, Advances from trading partners 8,149 6, Amount owing to an overseas contractor of the infrastructure assets 28,510 27, ,151 51, Below are the details of the advances from two third parties, being the trading partners of the Group:- (a) (b) an amount of RM million ( RM million) being the outstanding advances at the end of the reporting period is unsecured, interest-free and repayable by 31 December The fair value loss of RM2.793 million ( fair value gain of RM6.542 million) arising from the time value of money was recognised during the financial year. The amount owing is to be settled in cash. an amount of RM8.149 million ( RM6.454 million) being the outstanding advances at the end of the reporting period is unsecured, interest-free and repayable by setting off progressively against the future progress billings to be issued by a subsidiary in regards to the properties sold. 30. TRADE PAYABLES The normal trade credit terms granted to the Group range from 14 to 60 days ( to 60 days).

85 81 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 31. SHORT-TERM BORROWINGS THE GROUP SECURED UNSECURED TOTAL RM 000 RM 000 RM Term loans (Note 26) 29,785-29,785 Hire purchase payables (Note 27) 1,010-1,010 Bank overdrafts (Note 38) 33,095 6,438 39,533 Bankers acceptances 10,500-10,500 Revolving credits 22,487 5,050 27,537 96,877 11, , Term loans (Note 26) 15,185-15,185 Hire purchase payables (Note 27) 1,264-1,264 Bank overdrafts (Note 38) 33,732 1,394 35,126 Revolving credits 12,800 8,250 21,050 62,981 9,644 72,625 Information on interest rates of the bank overdrafts, bankers acceptances and revolving credits are disclosed in Note 44.1(c) to the financial statements. The term loans, bank overdrafts and revolving credits are secured by:- (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) legal charges over certain parcels of freehold land and buildings of the subsidiaries; a legal charge on the land use rights over a piece of land and infrastructure assets (capital work-in-progress) of a subsidiary; a legal charge over certain machineries of a subsidiary; a legal charge on a sinking fund account opened by a subsidiary with a licensed bank; shares of a subsidiary pledged with a licensed bank; subordination of shareholders advances of a subsidiary; an assignment of a subsidiary s creditors right to a licensed bank; an irrevocable letter of instruction from a subsidiary to transfer certain amount of funds on a monthly basis into a sinking fund account opened with a licensed bank; an assignment of surplus proceeds of Housing Development Account from a subsidiary; a project debenture over a fixed and floating charge of certain properties; a corporate guarantee of the Company and of certain subsidiaries of the Company; a joint and several guarantee of certain directors of a subsidiary of the Company; and (m) a project debenture over a fixed and floating charge of certain properties.

86 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 82 DOLOMITE CORPORATION BERHAD ( W) 32. REVENUE THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 Property development 28,837 55, Sale of goods 51,788 32, Contract revenue 5,431 10, Rental income Dividend income - - 5,000 1,000 86,421 98,856 5,000 1, COST OF SALES THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 Property development 13,655 27, Cost of goods sold 40,105 34, Contract costs 5,233 9, ,993 71, PROFIT/(LOSS) BEFORE TAXATION Profit/(Loss) before taxation is arrived at after charging/(crediting):- THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 Allowance for impairment loss on: - intangible assets investments in subsidiaries trade receivables 2,659 1, amount owing by subsidiaries Amortisation of: - intangible assets land use rights prepaid lease payments 1,860 1, Auditor remuneration: (i) Statutory audit - for the financial year (over)/underprovision in the previous financial year (5) (ii) Other services Bad debts written off Deposits written off Depreciation of: - property, plant and equipment 1,485 1, investment properties Directors : - fee non-fee emoluments defined contribution plan

87 83 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 34. PROFIT/(LOSS) BEFORE TAXATION (CONT D) THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 Employee benefits plan: - salaries 3,158 3, defined contribution plan Interest expense: - bankers acceptances bank overdrafts 1,569 1, hire purchase others RCPS revolving credits 1,283 1, subsidiaries - - 2,284 1,220 - term loans 2,739 2, Inventories written off 1,143 8, Property, plant and equipment written off Rental of machinery Rental of properties Compensation received for trespass to land (7,071) Dividend income - - (5,000) (1,000) Fair value adjustment on other payables 2,793 (7,440) - - Gain on disposal of: - - investment properties (4) property, plant and equipment (30) (59) - - Gain on fair value changes on investment properties (13,045) Gain on foreign exchange: - realised (316) (4,794) unrealised (185) Interest income: - deposits with licensed banks (31) (29) receivables (109) (108) HDA accounts (30) (52) amount owing by subsidiaries - - (174) (404) Rental of machinery and trucks (365) (676) - - Rental of properties (41) (87) - - Writeback of allowance for impairment losses on: - trade receivables (17) (161) trade receivables previously written off (43) amount owing by subsidiaries - - (263) -

88 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 84 DOLOMITE CORPORATION BERHAD ( W) 35. INCOME TAX EXPENSE THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 Current tax: - for the financial year 8,133 4, (over)/underprovision in previous financial years (507) ,626 5, Deferred tax (Note 28): - relating to originating and recognition of temporary differences (153) (7) overprovision in the previous financial year - (4) - - (153) (11) - - 7,473 5, The statutory tax rate will be reduced to 24% from the current financial year s rate of 25%, effective year of assessment A reconciliation of income tax expense applicable to the profit/(loss) before taxation at the statutory tax rate to income tax expense at the effective tax rate of the Group and the Company is as follows:- THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 Profit/(Loss) before taxation 13,469 16,141 1,441 (2,435) Tax at the statutory tax rate of 25% 3,367 4, (609) Tax effects of:- Non-taxable income (1,145) (2,338) (396) - Non-deductible expenses 6,201 2, Deferred tax assets not recognised in the current financial year 732 1, Utilisation of deferred tax assets not recognised in previous financial years (1,471) (79) - - Effects of differential in tax rates of subsidiaries 296 (989) - - (Over)/Underprovision in previous financial years: - current tax (507) deferred tax liabilities - (4) - - Income tax expense for the financial year 7,473 5, Tax savings during the financial year arising from:- Utilisation of tax losses: - current year 379 1, previously not recognised 1, Utilisation of capital allowances: - current year previously not recognised 4,

89 85 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 36. EARNINGS PER SHARE THE GROUP Profit after taxation attributable to owners of the Company (RM 000) 7,199 12,595 Weighted average number of ordinary shares at 31 December ( 000) 263, ,778 Basic earnings per share (sen) The diluted earnings per share was not presented as there is an anti-dilutive effect arising from the assumed conversion of the RCPS and Warrants. The prior year error disclosed in Note 46 to the financial statements does not affect the earning of the Group. Consequently, it does not affect the computation of earnings per share. 37. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT THE GROUP RM'000 RM'000 Cost of property, plant and equipment purchased 27,785 42,423 Amount financed through hire purchase (360) (2,178) Cash disbursed for purchase of property, plant and equipment 27,425 40, CASH AND CASH EQUIVALENTS For the purpose of the statements of cash flows, cash and cash equivalents comprise the following:- THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 Deposits with licensed banks Cash and bank balances 6,257 14, Bank overdrafts (Note 31) (39,533) (35,126) - - (32,703) (20,283) Deposits pledged with licensed banks (Note 19) (448) (434) - - (33,151) (20,717)

90 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 86 DOLOMITE CORPORATION BERHAD ( W) 39. DIRECTORS REMUNERATION (a) The aggregate amounts of emoluments received and receivable by directors of the Group and of the Company during the financial year are as follows:- THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 Executive directors: - non-fee emoluments defined contribution plan Non-executive directors: - fee other emoluments Benefits-in-kind (b) Details of directors emoluments of the Group and of the Company received/receivable for the financial year in bands of RM50,000 are as follows:- THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 Executive directors: RM450,001 - RM500, Non-executive directors:- Below RM50, RM50,001 - RM100, SIGNIFICANT RELATED PARTY DISCLOSURES (a) Identities of related parties The Group has related party relationships with:- (i) (ii) (iii) its subsidiaries; companies and entities in which certain directors of the Group have direct and indirect financial interests; and the directors who are the key management personnel.

91 87 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 40. SIGNIFICANT RELATED PARTY DISCLOSURES (CONT D) (b) In addition to the information detailed elsewhere in the financial statements, the Group and the Company carried out the following significant transactions with the related parties during the financial year:- THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 Subsidiaries Advances from subsidiaries ,605 6,358 Advances to subsidiaries - - (16,410) (4,091) Dividend income receivable - - 5,000 1,000 Interest income receivable Interest expense receivable - - (2,284) (1,220) Payment on behalf of the subsidiaries - - (990) (1,359) Payment on behalf by the subsidiaries Firm in respect of services provided by a director Legal fees payable Key management personnel Short-term employee benefits OPERATING SEGMENTS Segment information is presented in respect of the Group s business and geographical segments. The primary format, business segments, is prepared based on the Group s management reporting structure. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise interest-earning assets and revenue, interest-bearing loan, tax assets and liabilities, borrowings and expenses and corporate assets and expenses. Segmental capital expenditure is the total cost incurred during the financial year to acquire segment assets that are expected to be used for more than one period. Segment capital expenditure is the total cost incurred during the financial year to acquire property, plant and equipment and intangible assets other than goodwill. Inter-segment pricing is determined based on negotiated terms. (a) Business segments The following are the Group s main business segments: (i) Manufacturing The Group focus on manufacturing and sale of quarry products, hotmixes and readymixed concrete. (ii) Construction The Group undertakes earthworks, buildings and expressways contracts. (iii) Property development The Group also undertakes the development of commercial and residential properties. (iv) Thermal power generation The Group is involved in thermal power generation activity. As at the end of reporting period, the business operations have yet to commence.

92 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 88 DOLOMITE CORPORATION BERHAD ( W) 41. OPERATING SEGMENTS (CONT D) (a) Business segments (Cont d) THERMAL PROPERTY POWER MANUFACTURING CONSTRUCTION DEVELOPMENT GENERATION GROUP RM 000 RM 000 RM 000 RM 000 RM Revenue External revenue 52,153 5,431 28,837-86,421 Inter-segment revenue 15,473 35, ,815 Adjustments and eliminations 137,236 (50,815) Consolidated revenue 86,421 Results Segment results 4,678 (4,167) 23,075 (3,744) 19,842 Interest income 171 Finance costs Income tax expense 20,013 (6,544) (7,473) 5,996 Non-controlling interests 1,203 Consolidated profit after taxation 7,199 Assets Segment assets 55,520 2, , , ,458 Unallocated assets 7,077 Consolidated total assets 554,535 Liabilities Segment liabilities 28,573 10,648 79, , ,010 Unallocated liabilities 87,125 Consolidated total liabilities 400,135

93 89 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 41. OPERATING SEGMENTS (CONT D) (a) Business segments (Cont d) THERMAL PROPERTY POWER MANUFACTURING CONSTRUCTION DEVELOPMENT GENERATION GROUP RM 000 RM 000 RM 000 RM 000 RM Other segment items Capital expenditure: - property, plant and equipment 1, ,301 27,785 - property development costs (non-current) land use rights (353) (353) Allowance for impairment loss on: - intangible assets trade receivables - 1,635 1,024-2,659 Amortisation of: - intangible assets land use rights prepaid lease payments 1, ,860 Bad debts written off Deposits written off Depreciation of property, plant and equipment 1, ,485 Inventories written off 1, ,143 Property, plant and equipment written off Fair value adjustment on other payables ,793 2,793 Compensation received for trespass to land - - (7,071) - (7,071) Gain on disposal of: - investment properties - (4) - - (4) - property, plant and equipment (30) (30) Gain on fair value changes on investment properties (4,938) - (8,107) - (13,045) Gain on foreign exchange: - realised (316) (316) - unrealised (185) (185) Writeback of allowance for impairment losses on: - trade receivables (17) (17) - trade receivables previously written off (43) (43)

94 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 90 DOLOMITE CORPORATION BERHAD ( W) 41. OPERATING SEGMENTS (CONT D) (a) Business segments (Cont d) THERMAL PROPERTY POWER MANUFACTURING CONSTRUCTION DEVELOPMENT GENERATION GROUP RM 000 RM 000 RM 000 RM 000 RM Revenue External revenue 32,937 10,769 55,150-98,856 Inter-segment revenue 6,600 70, ,742 39,537 80,911 55, ,598 Adjustments and eliminations (76,742) Consolidated revenue 98,856 Results Segment results (6,082) (3,636) 20,469 11,484 22,235 Interest income ,424 Finance costs (6,283) Income tax expense (5,333) 10,808 Non-controlling interests 1,787 Consolidated profit after taxation 12, THERMAL PROPERTY POWER MANUFACTURING CONSTRUCTION DEVELOPMENT GENERATION GROUP RM 000 RM 000 RM 000 RM 000 RM 000 RESTATED RESTATED Assets Segment assets 58,647 5, , , ,300 Unallocated assets 15,239 Consolidated total assets 498,539 Liabilities Segment liabilities 30,985 4,684 62, , ,294 Unallocated liabilities 62,818 Consolidated total liabilities 349,112

95 91 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 41. OPERATING SEGMENTS (CONT D) (a) Business segments (Cont d) THERMAL PROPERTY POWER MANUFACTURING CONSTRUCTION DEVELOPMENT GENERATION GROUP RM 000 RM 000 RM 000 RM 000 RM 000 RESTATED RESTATED 2013 Other segment items Capital expenditure: - property, plant and equipment 2, ,144 42,423 - property development costs (non-current) Allowance for impairment loss on: - intangible assets trade receivables 5 1, ,640 Amortisation of: - intangible assets land use rights prepaid lease payments 1, ,860 Bad debts written off Depreciation of: - property, plant and equipment 1, ,741 - investment properties Inventories written off 8, ,811 Property, plant and equipment written off Fair value adjustment on other payables (7,953) (7,440) Gain on disposal of property, plant and equipment (59) (59) Realised gain on foreign exchange (4,794) (4,794) Writeback of allowance for impairment losses on trade receivables (72) - (89) - (161) (b) Geographical segments REVENUE NON-CURRENT ASSETS RM 000 RM 000 RM 000 RM 000 Malaysia 86,421 98, ,111 96,002 China , ,300 86,421 98, , ,302 (c) Major customers Revenue from one (2013: Nil) major customer in manufacturing segment which amounted to RM8.879 million is equal to 10% of the Group s revenue.

96 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 92 DOLOMITE CORPORATION BERHAD ( W) 42. CAPITAL COMMITMENT THE GROUP RM'000 RM'000 Contracted but not provided for:- Purchase of property, plant and equipment 4,271 7, CONTINGENT LIABILITY THE COMPANY RM'000 RM'000 Unsecured:- Corporate guarantee given to licensed banks for credit facilities granted to subsidiaries 116, , FINANCIAL INSTRUMENTS The Group s activities are exposed to a variety of market risks (including foreign currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. The Group s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group s financial performance Financial Risk Management Policies The Group s policies in respect of the major areas of treasury activity are as follows:- (a) Market Risk (i) Foreign Currency Risk The Group is exposed to foreign currency risk on transactions and balances that are denominated in currencies other than Ringgit Malaysia. The currencies giving rise to this risk are United States Dollar and Hong Kong Dollar. Foreign currency risk is monitored closely on an ongoing basis to ensure that the net exposure is at an acceptable level. The Group s exposure to foreign currency is as follows:- UNITED HONG CHINESE STATES KONG RINGGIT RENMINBI DOLLAR DOLLAR MALAYSIA TOTAL THE GROUP RM 000 RM 000 RM 000 RM 000 RM Financial assets Trade receivables ,456 34,456 Other receivables and deposits 30, ,024 45,758 Deposits with licensed banks Cash and bank balances 952 2,400-2,905 6,257 31,811 2,400-52,833 87,044

97 93 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 44. FINANCIAL INSTRUMENTS (CONT D) 44.1 Financial Risk Management Policies (Cont d) (a) Market Risk (Cont d) (i) Foreign Currency Risk (Cont d) UNITED HONG CHINESE STATES KONG RINGGIT RENMINBI DOLLAR DOLLAR MALAYSIA TOTAL THE GROUP RM 000 RM 000 RM 000 RM 000 RM Financial liabilities Term loans - 137,198-63, ,984 RCPS ,455 4,455 Hire purchase payables ,879 2,879 Bank overdrafts ,533 39,533 Revolving credits - 10,487-17,050 27,537 Bankers acceptances ,500 10,500 Trade payables ,066 31,066 Other payables and accruals 29,490 27, ,862 73,627 29, , , ,581 Net financial assets/(liabilities) 2,321 (172,317) (243) (133,298) (303,537) Less: Net financial (assets)/ liabilities denominated in the respective entities functional currencies (2,321) , ,213 Currency exposure - (172,317) - - (172,324) UNITED HONG CHINESE STATES KONG RINGGIT RENMINBI DOLLAR DOLLAR MALAYSIA TOTAL THE GROUP RM 000 RM 000 RM 000 RM 000 RM 000 RESTATED RESTATED 2013 Financial assets Trade receivables ,958 31,958 Other receivables and deposits 22, ,232 25,340 Deposits with licensed banks Cash and bank balances 1,159 8,471-4,661 14,291 23,385 8,471-40,285 72,141

98 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 94 DOLOMITE CORPORATION BERHAD ( W) 44. FINANCIAL INSTRUMENTS (CONT D) 44.1 Financial Risk Management Policies (Cont d) (a) Market Risk (Cont d) (i) Foreign Currency Risk (Cont d) UNITED HONG CHINESE STATES KONG RINGGIT RENMINBI DOLLAR DOLLAR MALAYSIA TOTAL THE GROUP RM 000 RM 000 RM 000 RM 000 RM 000 RESTATED RESTATED 2013 Financial liabilities Term loans - 128,807-42, ,692 RCPS ,455 4,455 Hire purchase payables ,769 3,769 Bank overdrafts ,126 35,126 Revolving credits ,050 21,050 Trade payables ,476 31,476 Other payables and accruals 27,775 31, ,329 68,152 27, , , ,720 Net financial liabilities (4,390) (151,368) (16) (107,805) (263,579) Less: Net financial liabilities denominated in the respective entities functional currencies 4, , ,211 Currency exposure - (151,368) - - (151,368) HONG KONG RINGGIT DOLLAR MALAYSIA TOTAL THE COMPANY RM 000 RM 000 RM Financial assets Amount owing by subsidiaries 54,147 5,373 59,520 Other receivables and deposits Cash and bank balances ,147 5,406 59,553 Financial liabilities Amount owing to subsidiaries - 44,720 44,720 RCPS - 4,455 4,455 Other payables and accruals ,501 49,501 Net financial assets/ (liabilities) 54,147 (44,095) 10,052 Less: Net financial liabilities denominated in the entity s functional currency - 44,095 44,095 Currency exposure 54,147-54,147

99 95 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 44. FINANCIAL INSTRUMENTS (CONT D) 44.1 Financial Risk Management Policies (Cont d) (a) Market Risk (Cont d) (i) Foreign Currency Risk (Cont d) HONG KONG RINGGIT DOLLAR MALAYSIA TOTAL THE COMPANY RM 000 RM 000 RM Financial assets Amount owing by subsidiaries 28,196 2,844 31,040 Other receivables and deposits Cash and bank balances ,196 3,788 31,984 Financial liabilities Amount owing to subsidiaries - 18,722 18,722 RCPS - 4,455 4,455 Other payables and accruals ,459 23,459 Net financial assets/(liabilities) 28,196 (19,671) 8,525 Less: Net financial liabilities denominated in the entity s functional currency - 19,671 19,671 Currency exposure 28,196-28,196 Foreign currency risk sensitivity analysis The following table details the sensitivity analysis to a reasonably possible change in the foreign currencies as at the end of the reporting period, with all other variables held constant:- Effects on profit after taxation and equity THE GROUP THE COMPANY Increase/ Increase/ Increase/ Increase/ (Decrease) (Decrease) (Decrease) (Decrease) RM 000 RM 000 RM 000 RM 000 United States Dollar: - strengthened by 5% (6,462) (5,676) weakened by 5% 6,462 5, Hong Kong Dollar: - strengthened by 5% - - (2,031) (1,057) - weakened by 5% - - 2,031 1,057

100 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 96 DOLOMITE CORPORATION BERHAD ( W) 44. FINANCIAL INSTRUMENTS (CONT D) 44.1 Financial Risk Management Policies (Cont d) (a) Market Risk (Cont d) (ii) Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group s exposure to interest rate risk arises mainly from interestbearing financial assets and liabilities. The Group s policy is to obtain the most favourable interest rates available. Any surplus funds of the Group will be placed with licensed financial institutions to generate interest income. Information relating to the Group s exposure to the interest rate risk of the financial liabilities is disclosed in Note 44.1(c) to the financial statements. Exposure to interest rate risk THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 Fixed rate instruments Amount owing by subsidiaries ,520 31,040 Amount owing to subsidiaries - - (44,720) (18,722) Hire purchase payables (2,879) (3,769) - - RCPS (4,455) (4,455) (4,455) (4,455) Deposits with licensed banks (6,761) (7,672) 10,345 7,863 Floating rate instruments Term loans (200,984) (171,692) - - Bank overdrafts (39,533) (35,126) - - Revolving credits (27,537) (21,050) - - Bankers acceptances (10,500) (278,554) (227,868) - - Interest rate risk sensitivity analysis The interest rate risk sensitivity analysis on the fixed rate instrument is not disclosed as this financial instrument is measured at amortised cost. The following table details the sensitivity analysis on the floating rate instruments to a reasonably possible change in the interest rate as at the end of the reporting period, with all other variables held constant:- Effects on profit after taxation and equity THE GROUP THE COMPANY Increase/ Increase/ Increase/ Increase/ (Decrease) (Decrease) (Decrease) (Decrease) RM 000 RM 000 RM 000 RM 000 Increase of 100 basis points (2,089) (1,709) - - Decrease of 100 basis points 2,089 1,

101 97 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 44. FINANCIAL INSTRUMENTS (CONT D) 44.1 Financial Risk Management Policies (Cont d) (a) Market Risk (Cont d) (iii) Equity Price Risk The Group does not have any quoted investments and hence is not exposed to equity price risk. (b) Credit Risk The Group s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other receivables. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. For other financial assets (including quoted investments, cash and bank balances and derivatives), the Group minimises credit risk by dealing exclusively with high credit rating counterparties. The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. Impairment is estimated by management based on prior experience and the current economic environment. Credit risk concentration profile The Group s major concentration of credit risk relates to the amount owing by one customer which constituted approximately 18% of its trade receivables (excluding accrued billings in respect of property development) at the end of the reporting period. Exposure to credit risk As the Group does not hold any collateral, the maximum exposure to credit risk is represented by the carrying amount of the financial assets as at the end of the reporting period. The Group does not have exposure to international credit risk as the entire trade receivables are concentrated in Malaysia. Ageing analysis The ageing analysis of the Group s trade receivables at the end of reporting period is as follows:- GROSS INDIVIDUAL COLLECTIVE CARRYING AMOUNT IMPAIRMENT IMPAIRMENT VALUE THE GROUP RM'000 RM'000 RM'000 RM' Not past due 2, ,976 Past due: - less than 3 months 3, ,099-3 to 6 months over 6 months 8,148 (6,877) - 1,271 14,508 (6,877) - 7,631

102 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 98 DOLOMITE CORPORATION BERHAD ( W) 44. FINANCIAL INSTRUMENTS (CONT D) 44.1 Financial Risk Management Policies (Cont d) (b) Credit Risk (Cont d) Ageing analysis (Cont d) GROSS INDIVIDUAL COLLECTIVE CARRYING AMOUNT IMPAIRMENT IMPAIRMENT VALUE THE GROUP RM'000 RM'000 RM'000 RM' Not past due 3, ,151 Past due: - less than 3 months 2, ,786-3 to 6 months 2,417 (510) - 1,907 - over 6 months 7,490 (5,624) - 1,866 15,844 (6,134) - 9,710 At the end of the reporting period, trade receivables that are individually impaired were those in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancement. The collective impairment allowance is determined based on estimated irrecoverable amounts from the sale of goods, determined by reference to past default experience. Trade receivables that are past due but not impaired The Group believes that no impairment allowance is necessary in respect of these trade receivables. They are substantially companies with good collection track record and no recent history of default. Trade receivables that are neither past due nor impaired A significant portion of trade receivables that are neither past due nor impaired are regular customers that have been transacting with the Group. The Groups uses ageing analysis to monitor the credit quality of the trade receivables. Any receivables having significant balances past due or more than 30 days, which are deemed to have higher credit risk, are monitored individually.

103 99 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 44. FINANCIAL INSTRUMENTS (CONT D) 44.1 Financial Risk Management Policies (Cont d) (c) Liquidity Risk Liquidity risk arises mainly from general funding and business activities. The Group practises prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities. The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period):- AVERAGE EFFECTIVE CONTRACTUAL OVER INTEREST CARRYING UNDISCOUNTED WITHIN RATE AMOUNT CASH FLOWS 1 YEAR YEARS YEARS THE GROUP % RM'000 RM'000 RM'000 RM'000 RM' RCPS ,455 7, ,053 - Hire purchase payables ,879 3,085 1,129 1,956 - Term loans - secured , ,640 32, ,898 17,280 Bank overdrafts - secured ,095 33,095 33, Bank overdrafts - unsecured ,438 6,438 6, Revolving credits - secured ,487 22,487 22, Revolving credits - unsecured ,050 5,050 5, Bankers acceptances - secured ,500 10,500 10, Trade payables - 31,066 31,066 31, Other payables and accruals - 73,627 73,627 73, , , , ,907 17,280

104 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 100 DOLOMITE CORPORATION BERHAD ( W) 44. FINANCIAL INSTRUMENTS (CONT D) 44.1 Financial Risk Management Policies (Cont d) (c) Liquidity Risk (Cont d) AVERAGE EFFECTIVE CONTRACTUAL OVER INTEREST CARRYING UNDISCOUNTED WITHIN RATE AMOUNT CASH FLOWS 1 YEAR YEARS YEARS THE GROUP % RM'000 RM'000 RM'000 RM'000 RM'000 RESTATED RESTATED RESTATED 2013 RCPS ,455 7, ,486 - Hire purchase payables ,769 4,158 1,448 2,710 - Term loans - secured , ,252 23, ,046 16,292 Bank overdrafts - secured ,732 33,732 33, Bank overdrafts - unsecured ,394 1,394 1, Revolving credits - secured ,800 12,800 12, Revolving credits - unsecured ,250 8,250 8, Trade payables - 31,476 31,476 31, Other payables and accruals - 68,152 68,152 68, , , , ,242 16,292 AVERAGE EFFECTIVE CONTRACTUAL OVER INTEREST CARRYING UNDISCOUNTED WITHIN RATE AMOUNT CASH FLOWS 1 YEAR YEARS YEARS THE COMPANY % RM'000 RM'000 RM'000 RM'000 RM' RCPS , Other payables and accruals Amount owing to subsidiaries ,720 48,298 48, ,501 48,624 48, RCPS ,455 7, ,034 - Other payables and accruals Amount owing to subsidiaries ,722 20,220 20, ,459 27,969 20,935 7,034 -

105 101 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 44. FINANCIAL INSTRUMENTS (CONT D) 44.2 Capital Risk Management The Group manages its capital to ensure that entities within the Group will be able to maintain an optimal capital structure so as to support their businesses and maximise shareholders value. To achieve this objective, the Group may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares. The Group manages its capital based on debt-to-equity ratio. The Group s strategies were unchanged from the previous financial year. The debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is calculated as borrowings plus trade and other payables less cash and cash equivalents. The debt-to-equity ratio of the Group as at the end of the reporting period was as follows:- THE GROUP RM'000 RM'000 Restated RCPS 4,455 4,455 Hire purchase payables 2,879 3,769 Term loans 200, ,692 Bank overdrafts 39,533 35,126 Revolving credits 27,537 21,050 Bankers acceptances 10,500 - Trade payables 31,066 31,476 Other payables 73,627 68, , ,720 Less: Deposits with licensed banks (573) (552) Cash and bank balances (6,257) (14,291) Net debt 383, ,877 Total equity 154, ,427 Debt-to-equity ratio Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated shareholders equity (total equity attributable to owners of the Company) equal to or not less than the 25% of the issued and paid-up share capital (excluding treasury shares) and such shareholders equity is not less than RM40 million. The Company has complied with this requirement Classification Of Financial Instruments Financial assets THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 Restated Loans and receivables financial assets Trade receivables 34,456 31, Other receivables and deposits 45,758 25, Amount owing by subsidiaries ,520 31,040 Deposits with licensed banks Cash and bank balances 6,382 14, ,044 72,141 59,553 31,984

106 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 102 DOLOMITE CORPORATION BERHAD ( W) 44. FINANCIAL INSTRUMENTS (CONT D) 44.3 Classification Of Financial Instruments (Cont d) THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 Restated Financial liabilities Other financial liabilities Term loans 200, , RCPS 4,455 4,455 4,455 4,455 Hire purchase payables 2,879 3, Bank overdrafts 39,534 35, Revolving credits 27,536 21, Bankers acceptances 10, Trade payables 31,066 31, Other payables and accruals 73,627 68, Amount owing to subsidiaries ,720 18, , ,720 49,501 23, Fair Value Information Other than those disclosed below, the fair values of the financial assets and financial liabilities maturing within the next 12 months approximated their carrying amounts due to the relatively short-term maturity of the financial instruments. Fair Value Of Financial Instruments Total Not Carried At Fair Value Fair Carrying Level 1 Level 2 Level 3 Value Amount The Group RM RM RM RM RM RM'000 RM'000 RM'000 RM'000 RM' Financial Liabilities Term loans - 200, , ,984 RCPS - 4,455-4,455 4,455 Hire purchase payables - 2,879-2,879 2,879 Bank overdrafts - 39,533-39,533 39,533 Revolving credits - 27,537-27,536 27,536 Bankers acceptances - 10,500-10,500 10, Financial Liabilities Term loans - 171, , ,692 RCPS - 4,455-4,455 4,455 Hire purchase payables - 3,769-3,789 3,769 Bank overdrafts - 35,126-35,126 35,126 Revolving credits - 21,050-21,050 21,050

107 103 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 44. FINANCIAL INSTRUMENTS (CONT D) 44.4 Fair Value Information (Cont d) (a) The fair values of level 2 above are for disclosure purposes and have been determined using the following basis:- (i) The fair values of term loans, RCPS, hire purchase payables, bank overdrafts, revolving credits and bankers acceptances are determined by discounting the relevant cash flows using interest rates for similar instruments at the end of the reporting period. The interest rates used to discount the estimated cash flows are as follows:- Group % % Term loans RCPS Hire purchase payables Bank overdrafts Revolving credits Bankers acceptances 5.32 N/A (ii) There has been no transfer from level 2 to level 1 during the financial year. 45. SIGNIFICANT EVENT On 24 January 2013, the Government of Selangor through an announcement by the Menteri Besar informed the press that the Government of Selangor will instruct the Majlis Perbandaran Selayang ( MPS ) to cancel the Development Order issued to Dolomite Properties Sdn. Bhd.. This intended revocation was to stop the development of the residential Park Avenue condominium. However, as at the end of the reporting period, other than a Temporary Stop Work Notice, MPS has not issued any termination or revocation of the Development Order. The management has initiated judicial review proceedings against MPS to claim that essentially that there is no basis for the issuance of Temporary Stop Work Notice, which was in any event meant to be temporary in nature. The matter has been fixed for further case management on 8 May 2015 for the parties to inform the Court as to whether the matter can be resolved amicably or to proceed for hearing. 46. COMPARATIVE FIGURES (a) Conformation Of Current Year Presentation The following figures have been reclassified to conform with the presentation of the current financial year:- Consolidated Statements of Financial Position (Extract): As As As Previously As Previously Restated Stated Restated Stated RM 000 RM 000 RM 000 RM 000 Trade receivables 31,958 9,710 40,682 13,179 Other receivables, deposits and prepayments 7,782 30,030 6,700 34,203 Other payables (non-current) 23,163-1,570 1,570 Other payables and accruals (current) 33,905 57,068 55,875 55,875

108 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 104 DOLOMITE CORPORATION BERHAD ( W) 46. COMPARATIVE FIGURES (CONT D) (b) Prior Year Adjustments SDTP granted a loan amounting to RM million to a contractor of the infrastructure assets in year 2013 which was inadvertently set off by the management with the other payables. The material prior period error was corrected by restating the comparative amounts in the Statements of Financial Position and Statements of Cash Flows, however does not impact the Statements of Profit or Loss and Other Comprehensive Income. The effects of correction of the error are disclosed below:- Consolidated Statements of Financial Position (Extract): As As As Previously As Previously Restated Stated* Restated Stated* RM 000 RM 000 RM 000 RM 000 Other receivables, deposits and prepayments 25,616 7,782 6,700 6,700 Other payables and accruals (current) 51,739 33,905 55,875 55,875 Consolidated Statements of Cash Flows (Extract): As As Previously Restated Stated RM 000 RM 000 Increase in trade and other receivables (11,834) 6,000 Increase/(Decrease) in trade and other payables 18, * After adjusting the effects of the conformation of current year presentation as disclosed in Note 46(a).

109 105 Annual Report 2014 Notes to the Financial Statements For the financial year ended 31 December 2014 (cont d) 47. SUPPLEMENTARY INFORMATION - DISCLOSURE OF REALISED AND UNREALISED PROFITS/LOSSES The breakdown of the accumulated losses of the Group and of the Company as at the end of the reporting period into realised and unrealised profits/(losses) are 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 Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants, as follows:- THE GROUP THE COMPANY RM 000 RM 000 RM 000 RM 000 Total retained profits/(accumulated losses): - realised 43,187 47,784 (9,880) (11,287) - unrealised 13,149 (234) ,336 47,550 (9,880) (11,287) Total share of accumulated losses of associate: - realised (675) (675) ,661 46,875 (9,880) (11,287) Less: Consolidation adjustments (102,341) (100,754) - - At 31 December (46,680) (53,879) (9,880) (11,287)

110 List of Properties As at 31 December DOLOMITE CORPORATION BERHAD ( W) Approximate Net Book Description/ Age of Value Date of Location/Address Existing Use Tenure Land Area Building (RM'000) Valuation PN 6338 and PN 6339 Quarry land Leasehold/ 36,499, years 13, May-2002 Lot 5704 and 5705 together with expiring on sq.ft. Mukim of Hulu Langat quarry plant, 8-Jun-2019 Selangor office and Postal address: workshop 11 3/4 Miles, Sungai Serai Hulu Langat, Selangor Lot 6022, C.T Commercial Freehold 104,053 N/A 21, May-2002 Mukim Batu land sq.ft. District of Kuala Lumpur Selangor PT No and 6 plots of Freehold 172,254 N/A 13, May , Mukim Batu industrial land sq.ft. District of Gombak, Selangor PT No and plots of Freehold 61,667 N/A 17, Mar-2014 Mukim Batu industrial land sq.ft. District of Gombak, Selangor Geran 53437, Lots plots of Freehold 163,665 N/A 36,123 N/A Mukim Batu commercial sq.ft. District of Gombak, Selangor land Geran 44117, Lot 1476 Mixed residential, Freehold N/A 66,654 N/A Mukim Rawang agricultural and hectares District of Gombak, Selangor commercial land

111 107 Annual Report 2014 Analysis of Shareholdings As at 5 May 2015 ORDINARY SHARES Authorised Share Capital - RM999,700,000 Issued & Fully Paid Capital - RM131,752,192 Class of Shares - Ordinary Shares of RM0.50 each Voting Rights - One vote per share DISTRIBUTION OF SHAREHOLDINGS No. of % of No. of % of Size of Shareholdings Shareholders Shareholders Shares Held Shares Held ,000 1, , ,001-10,000 1, ,961, , , ,480, ,001-13,175,218 (*) ,490, ,175,219 and above (**) ,685, Total 2, ,504, Remarks: * - Less than 5% of issued shares ** - 5% and above of issued shares SUBSTANTIAL SHAREHOLDERS No. of Shares Held Name of Shareholders Direct % Indirect % 1 Bong Sin Rubber Estates Company Sdn Berhad 73,942, Huang Jen Soong 14,978, ,212, Lim Beng Keat 44,011, Lim Beng Teck 16,618, Lau Huang Nam 7,841, ,604, Yap Koon Wah 400, ,812, Bong Sin Construction Company Sdn Berhad 6,869, ,942, Notes : 1. Deemed interest by virtue of his wife, Madam Yap Koon Wah s substantial shareholdings in Bong Sin Rubber Estates Company Sdn Berhad and Bong Sin Construction Company Sdn Berhad. 2. Deemed interest by virtue of his brother, Lau Huan Yeong s direct interest in Dolomite Corporation Berhad and his and Lau Huan Yeong s deemed interest in Calwealth Corporation Pte Ltd. 3. Deemed interest by virtue of her substantial shareholdings in Bong Sin Rubber Estates Company Sdn Berhad and Bong Sin Construction Company Sdn Berhad. 4. Deemed interest by virtue of its substantial shareholdings in Bong Sin Rubber Estates Company Sdn Berhad.

112 Analysis of Shareholdings As at 5 May 2015 (cont d) 108 DOLOMITE CORPORATION BERHAD ( W) DIRECTORS SHAREHOLDINGS No. of Ordinary Shares of RM0.50 Each Held Name of Directors Direct % Indirect % 1. Tan Sri Dato Seri Mohd Jamil Bin Johari Lim Beng Keat 2 44,011, Huang Jen Soong 2 14,978, ,212, Lew Choong Keong 2 510, Jeffrey Gerard Gomez Dominic Aw Kian-Wee Seow Yoo Lin Notes : 1. Deemed interest by virtue of his wife, Madam Yap Koon Wah s substantial shareholdings in Bong Sin Rubber Estates Company Sdn Berhad and Bong Sin Construction Company Sdn Berhad. 2. By virtue of their shareholdings in the Company, they are deemed to have interest in the shares of the subsidiaries of the Company.

113 109 Annual Report 2014 Analysis of Shareholdings As at 5 May 2015 (cont d) ORDINARY SHARES LIST OF TOP 30 SHAREHOLDERS (Without aggregating securities from different securities accounts belonging to the same registered holder) No. of % of No. Name of Shareholders Shares Held Shares Held 1. Bong Sin Rubber Estates Company Sdn Berhad 73,942, RHB Capital Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Lim Beng Keat 26,182, RHB Capital Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Lim Beng Teck 16,581, Huang Jen Soong 14,978, Alliancegroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Lim Beng Keat 10,000, JF Apex Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Abu Sahid Bin Mohamed 8,609, Lau Huan Yeong 8,311, Maybank Securities Nominees (Asing) Sdn Bhd Maybank Kim Eng Securities Pte Ltd for Lau Huang Nam 7,841, Lim Beng Keat 7,828, Khiam Huat Industrial Works Sdn Berhad 6,187, Ng Ping Ho 5,000, UOBM Nominees (Tempatan) Sdn Bhd Exempt An for Areca Capital Sdn Bhd 5,000, Cheah Song Chiah Jee Ba 3,705, Affin Hwang Investment Bank Berhad Exempt An Clr (YCT) for Areca Capital Sdn Bhd 3,000, Bong Sin Construction Company Sdn Berhad 2,726, DB (Malaysia) Nominee (Asing) Sdn Bhd Exempt An for Bank of Singapore Limited 2,293, Sharp Ventures Sdn Bhd 2,023, Public Invest Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Mohamed Nizam Bin Abdul Razak 1,658, Ng Swee Seong 1,628, Teo Boon Huang Andy 1,614, Ng Sim Bee 1,500, Ng Kiam Neiw 1,500, How Yam Hooi 1,394, UOB Kay Hian Nominees (Tempatan) Sdn Bhd Exempt An for UOB Kay Hian Pte Ltd 1,330, Bong Sin Construction Company Sdn Berhad 1,143, Lim May Lee 1,100, Maybank Nominees (Tempatan) Sdn Bhd Zolkeflee Bin Abd Hamid 917, Lim Keng Chuan 897, How Hoe Law Hoe Lian 780, Mohamed Nizam Bin Abdul Razak 779, Total 220,457,

114 Analysis of Shareholdings As at 5 May 2015 (cont d) 110 DOLOMITE CORPORATION BERHAD ( W) REDEEMABLE CONVERTIBLE PREFERENCE SHARES ( RCPS ) Authorised Share Capital Issued & Fully Paid Capital Class of Shares Voting Rights - RM300,000 - RM123, RCPS of RM0.01 each - The RCPS holders shall carry no right to vote at any general meeting of the Company except for the following circumstances: (a) when the dividend or part of the dividend on the RCPS is in arrears for more than 24 months; (b) on a proposal to reduce the Company s share capital; (c) on a proposal for the disposal of a substantial (as defined in Section 132C(1A) of the Companies Act, 1965 ( the Act )) # portion of the Company s property, business and undertaking; (d) on a proposal that affects the rights attached to the RCPS; (e) on a proposal to wind-up the Company; and (f) during the winding-up of the Company. Note : # Section 132C(1A) of the Act provides inter-alia that in the case of a company where all or any of its shares are listed for quotation on the official list of a Stock Exchange, the term substantial value or substantial portion shall mean the same value prescribed by the provisions in the listing requirements of the Exchange (a) which relates to acquisitions or disposals by a company or its subsidiaries to which such provision applies; and (b) which would require the approval of shareholders at a general meeting in accordance with the provisions of such listing requirements. DISTRIBUTION OF RCPS HOLDINGS No. of % of No. of % of Size of RCPS Holdings RCPS Holders RCPS Holders RCPS Held RCPS Held , , ,001-10, , , , , , ,720 (*) , ,721 and above (**) ,484, Total ,374, Remarks: * - Less than 5% of issued RCPS ** - 5% and above of issued RCPS

115 111 Annual Report 2014 Analysis of Shareholdings As at 5 May 2015 (cont d) REDEEMABLE CONVERTIBLE PREFERENCE SHARES ( RCPS ) (CONT D) SUBSTANTIAL RCPS HOLDERS No. of RCPS of RM0.01 Each Held Name of RCPS Holders Direct % Indirect % 1 Bong Sin Rubber Estates Company Sdn Berhad 7,148, Huang Jen Soong 1,925, ,148, Lim Beng Keat 1,000, Lau Huang Nam 784, , Yap Koon Wah - - 7,148, Bong Sin Construction Company Sdn Berhad - - 7,148, Notes : 1. Deemed interest by virtue of his wife, Madam Yap Koon Wah s substantial shareholdings in Bong Sin Rubber Estates Company Sdn Berhad and Bong Sin Construction Company Sdn Berhad. 2. Deemed interest by virtue of his and his brother, Lau Huan Yeong s deemed interest in Calwealth Corporation Pte Ltd. 3. Deemed interest by virtue of her substantial shareholdings in Bong Sin Rubber Estates Company Sdn Berhad and Bong Sin Construction Company Sdn Berhad. 4. Deemed interest by virtue of its substantial shareholdings in Bong Sin Rubber Estates Company Sdn Berhad. DIRECTORS RCPS HOLDINGS No. of RCPS of RM0.01 Each Held Name of Directors Direct % Indirect % 1. Tan Sri Dato Seri Mohd Jamil Bin Johari Lim Beng Keat 1,000, Huang Jen Soong 1,925, ,148, Lew Choong Keong 40, Jeffrey Gerard Gomez Dominic Aw Kian-Wee Seow Yoo Lin Note : 1. Deemed interest by virtue of his wife, Madam Yap Koon Wah s substantial shareholdings in Bong Sin Rubber Estates Company Sdn Berhad and Bong Sin Construction Company Sdn Berhad.

116 Analysis of Shareholdings As at 5 May 2015 (cont d) 112 DOLOMITE CORPORATION BERHAD ( W) REDEEMABLE CONVERTIBLE PREFERENCE SHARES ( RCPS ) (CONT D) LIST OF TOP 30 RCPS HOLDERS (Without aggregating securities from different securities accounts belonging to the same registered holder) No. of % of No. Name of RCPS Holders RCPS Held RCPS Held 1. Bong Sin Rubber Estates Company Sdn Berhad 7,148, Huang Jen Soong 1,925, RHB Capital Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Lim Beng Keat 1,000, Maybank Securities Nominees (Asing) Sdn Bhd Maybank Kim Eng Securities Pte Ltd for Lau Huang Nam 784, UOBM Nominees (Tempatan) Sdn Bhd Exempt An for Areca Capital Sdn Bhd 626, DB (Malaysia) Nominee (Asing) Sdn Bhd Exempt An for Bank of Singapore Limited 229, Public Invest Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Mohamed Nizam Bin Abdul Razak 165, Khoo Ee Ping 138, Mohamed Nizam Bin Abdul Razak 77, Maybank Securities Nominees (Asing) Sdn Bhd Maybank Kim Eng Securities Pte Ltd for Linda Hung Siu Yee 60, Lew Choong Keong 40, Cheong Chee Leong 12, Tsen Kui Margaret Tsen 12, Siew Hoi Pat 11, Leong Ah Leong Mee 11, Lee Chee Siong 8, Chow Thin Chiew Hay Chun 7, Lee Ching Yoaw 7, Wan Sau Leong 4, Hew Wei Hew Wee Ting 4, HLB Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Tee Hiap Loon 4, Lee Siew Hwa 4, Song Eng Eng 4, Tan Hock Hua 4, Yee Lai Fun 4, Chiew Mei Yee 3, Lim Chye Len 3, Lim Lip Chin 3, Ng Sew Teng 3, Bong Hua 2, Total 12,307,

117 113 Annual Report 2014 Analysis of Warrant Holdings for Warrant C 2012/2017 As at 5 May 2015 Number of Warrants Issued - 11,621,248 Exercise Price of Warrants - RM0.50 per warrant Expiry Date of Warrants - 8 August 2017 Voting Rights - Nil DISTRIBUTION OF WARRANT HOLDINGS No. of % of No. of % of Size of Warrant Holdings Warrant Holders Warrant Holders Warrants Held Warrants Held , , ,001-10, , , , , , ,061 (*) , ,062 and above (**) ,858, Total ,621, Remark: * - Less than 5% of issued warrants ** - 5% and above of issued warrants DIRECTORS WARRANT HOLDINGS No. of Warrants Held Name of Directors Direct % Indirect % 1. Tan Sri Dato Seri Mohd Jamil Bin Johari Lim Beng Keat 1,000, Huang Jen Soong 1,925, ,148, Lew Choong Keong 40, Jeffrey Gerard Gomez Dominic Aw Kian-Wee Seow Yoo Lin Note : 1. Deemed interest by virtue of his wife, Madam Yap Koon Wah s substantial shareholdings in Bong Sin Rubber Estates Company Sdn Berhad and Bong Sin Construction Company Sdn Berhad.

118 Analysis of Warrant Holdings for Warrant C 2012/2017 As at 5 May 2015 (cont d) 114 DOLOMITE CORPORATION BERHAD ( W) LIST OF TOP 30 WARRANT HOLDERS (Without aggregating securities from different securities accounts belonging to the same registered holder) No. of % of No. Name of Warrant Holders Warrants Held Warrants Held 1. Bong Sin Rubber Estates Company Sdn Berhad 7,148, Huang Jen Soong 1,925, RHB Capital Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Lim Beng Keat 1,000, Maybank Securities Nominees (Asing) Sdn Bhd Maybank Kim Eng Securities Pte Ltd for Lau Huang Nam 784, DB (Malaysia) Nominee (Asing) Sdn Bhd Exempt An for Bank of Singapore Limited 229, Public Invest Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Mohamed Nizam Bin Abdul Razak 165, Mohamed Nizam Bin Abdul Razak 77, Maybank Securities Nominees (Asing) Sdn Bhd Maybank Kim Eng Securities Pte Ltd for Linda Hung Siu Yee 60, Lew Choong Keong 40, Yeoh Loo Kim 14, HLIB Nominees (Tempatan) Sdn Bhd Hong Leong Bank Bhd for Ewe Hong Khoon 13, Tsen Kui Margaret Tsen 12, Siew Hoi Pat 11, Leong Ah Leong Mee 11, Goh Wan Ching 7, Chow Thin Chiew Hay Chun 7, Lee Eng Min 5, Wan Sau Leong 4, Hew Wei Hew Wee Ting 4, HLB Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Tee Hiap Loon 4, Lee Siew Hwa 4, Tan Hock Hua 4, Yee Lai Fun 4, Chiew Mei Yee 3, Lim Chye Len 3, Ng Sew Teng 3, Bong Hua 2, Chow Sook Fei 2, Hew Wei Hew Wee Ting 2, Hew Wei Hew Wee Ting 2, Total 11,554,

119 115 Annual Report 2014 Notice of Annual General Meeting NOTICE IS HEREBY GIVEN THAT the Twenty-First Annual General Meeting of the Company will be held at R-Studios, West Wing, 2nd Floor, Renaissance Kuala Lumpur Hotel, Corner of Jalan Sultan Ismail & Jalan Ampang, Kuala Lumpur on Tuesday, 23 June 2015 at 2.30 p.m. to transact the following businesses: AGENDA As Ordinary Business 1. To receive the Audited Financial Statements for the financial year ended 31 December 2014 together with the Directors and Auditors Reports thereon. (Note 7) 2. To approve the Directors Fees for the financial year ended 31 December Ordinary Resolution 1 3. To re-elect Tan Sri Dato Seri Mohd Jamil Bin Johari who is retiring pursuant to Article 69 of the Articles of Association of the Company. Ordinary Resolution 2 4. To re-elect Mr Huang Jen Soong who is retiring pursuant to Article 69 of the Articles of Association of the Company. Ordinary Resolution 3 5. To consider and if thought fit, to pass the following Ordinary Resolution in accordance with Section 129 of the Companies Act, 1965: THAT Mr Lim Beng Keat, retiring pursuant to Section 129 of the Companies Act, 1965, be and is hereby re-appointed a Director of the Company to hold office until the next Annual General Meeting. Ordinary Resolution 4 6. To re-appoint Messrs Crowe Horwath as Auditors of the Company and to authorise the Directors to fix their remuneration. Ordinary Resolution 5 As Special Business To consider and, if thought fit, to pass the following ordinary resolution:- 7. Authority under Section 132D of the Companies Act, 1965 for the Directors to allot and issue shares That pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to allot and 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 fit provided that the aggregate number of shares to be issued does not exceed ten per centum (10%) of the issued share capital of the Company for the time being, subject always to the approval of all the relevant regulatory bodies being obtained for such allotment and issue. Ordinary Resolution 6 BY ORDER OF THE BOARD Tai Yit Chan (MAICSA ) Chan Su San (MAICSA ) Lo Sze Min (MIA 3439) Company Secretaries Selangor Darul Ehsan Date: 29 May 2015

120 Notice of Annual General Meeting (cont d) 116 DOLOMITE CORPORATION BERHAD ( W) Notes: 1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint more than two (2) proxies to attend at the same meeting but only one (1) proxy shall be entitled to vote on a show of hands. Where a member appoints two (2) or more proxies, the member shall specify in each proxy form the proportion of the member s shareholdings to be represented by each proxy. 2. A proxy may but need not be a member of the Company and need not be any of the person prescribed by Section 149(1)(b) of the Companies Act, Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account ( omnibus account ), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 ( SICDA ) which is exempted from compliance with the provisions of subsection 25A(1) of SICDA. 4. The instrument appointing a proxy shall be in writing (in the common or usual form) under the hand of the appointor or of his/her attorney duly authorised in writing or, if the appointor is a corporation, either under its Common Seal or under the hand of an officer or attorney duly authorised. 5. The instrument appointing a proxy and the power of attorney or authority, if any, under which it is signed or notarially certified copy of that power or authority shall be deposited at the registered office of the Company at Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the meeting or adjourned meeting. 6. For the purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make available a Record of Depositors as at 15 June 2015 and only a Depositor whose name appears on such Record of Depositors shall be entitled to attend, speak and vote at this meeting and entitled to appoint proxy or proxies. 7. The Audited Financial Statements in Agenda 1 is meant for discussion only as approval from shareholders is not required pursuant to the provision of Section 169(1) of the Companies Act, Hence, this Agenda is not put forward for voting by shareholders of the Company. Explanatory Notes on Special Business: 8. Ordinary Resolution No. 6 - Authority under Section 132D of the Companies Act, 1965 for the Directors to allot and issue shares The Company had obtained its shareholders approval for the general mandate for issuance of shares pursuant to Section 132D of the Companies Act, 1965 ( the Act ) at the Twentieth Annual General Meeting held on 23 June The Company did not issue any shares pursuant to this mandate obtained. The Ordinary Resolution 6 is a renewal of the general mandate for the issuance of shares by the Company pursuant to Section 132D of the Act. The mandate, if passed, will provide flexibility for the Company and empower the Directors to allot and issue shares in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company for purpose of funding the working capital or future investments of the Group. This authority, unless revoked or varied by the Company at a general meeting, will expire at the next Annual General Meeting. At this juncture, there is no decision to issue new shares. If there should be a decision to issue new shares after the general mandate is obtained, the Company will make an announcement in respect thereof.

121 Proxy Form ( W) I/We,.... (Please use Block Letters) *NRIC No./Passport No./Company No of being (a) member(s) of DOLOMITE CORPORATION BERHAD and entitled to vote hereby appoint NRIC No./Passport No of..... or failing him/her, NRIC No./Passport No of... or failing *him/her, the Chairman of the meeting as *my/our proxy to attend and vote for *me/us on *my/our behalf at the Twenty- First Annual General Meeting of the Company to be held at R-Studios, West Wing, 2nd Floor, Renaissance Kuala Lumpur Hotel, Corner of Jalan Sultan Ismail & Jalan Ampang, Kuala Lumpur on Tuesday, 23 June 2015 at 2.30 p.m. and at any adjournment thereof in respect of my/our shareholding in the manner indicated below: No. Resolutions For Against Ordinary Resolution 1 Approval of Directors Fees for the financial year ended 31 December 2014 Ordinary Resolution 2 Ordinary Resolution 3 Ordinary Resolution 4 Ordinary Resolution 5 Ordinary Resolution 6 Re-election of Tan Sri Dato Seri Mohd Jamil Bin Johari as Director Re-election of Mr Huang Jen Soong as Director Re-appointment of Mr Lim Beng Keat as Director Re-appointment of Messrs Crowe Horwath as Auditors Authority under Section 132D of the Companies Act, 1965 for the Directors to allot and issue shares Please indicate with an "X" in the spaces provided how you wish your votes to be cast. If no specific direction is given on the voting, the proxy/proxies will vote or abstain from voting on the resolutions at his/her discretion. Dated this... day of Number of share(s) held... Signature of *Shareholder or Common Seal * Please delete whichever is inapplicable Notes: 1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint more than two (2) proxies to attend at the same meeting but only one (1) proxy shall be entitled to vote on a show of hands. Where a member appoints two (2) or more proxies, the member shall specify in each proxy form the proportion of the member s shareholdings to be represented by each proxy. 2. A proxy may but need not be a member of the Company and need not be any of the person prescribed by Section 149(1)(b) of the Companies Act, Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account ( omnibus account ), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 ( SICDA ) which is exempted from compliance with the provisions of subsection 25A(1) of SICDA. 4. The instrument appointing a proxy shall be in writing (in the common or usual form) under the hand of the appointor or of his/her attorney duly authorised in writing or, if the appointor is a corporation, either under its Common Seal or under the hand of an officer or attorney duly authorised. 5. The instrument appointing a proxy and the power of attorney or authority, if any, under which it is signed or notarially certified copy of that power or authority shall be deposited at the registered office of the Company at Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the meeting or adjourned meeting. 6. For the purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make available a Record of Depositors as at 15 June 2015 and only a Depositor whose name appears on such Record of Depositors shall be entitled to attend, speak and vote at this meeting and entitled to appoint proxy or proxies.

122 Fold this flap for sealing 2nd fold here Affix Stamp Here The Company Secretaries DOLOMITE CORPORATION BERHAD ( W) Lot 6.05, Level 6, KPMG Tower 8 First Avenue, Bandar Utama Petaling Jaya Selangor Darul Ehsan Malaysia 1st fold here

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