contents 92 Statement Accompanying Notice of Annual General Meeting 94 E-Dividend 96 Appendices to the Notice of Meeting Proxy Form ANNUAL REPORT 2009

Transcription

1 ANNUAL REPORT 2009

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3 ANNUAL REPORT 2009 contents ANNUAL GENERAL MEETING : 24 JUNE Chairman s Statement 06 Corporate Information 08 Profile of Directors 10 Corporate Structure 11 Statement on Corporate Governance 17 Statement on Internal Control 19 Audit Committee Report 23 Financial Statements 81 List of Properties 82 Analysis of Shareholdings 85 Analysis of ICULS Holdings 87 Analysis of Warrant Holdings 89 Notice of Thirteenth Annual General Meeting 92 Statement Accompanying Notice of Annual General Meeting 94 E-Dividend 96 Appendices to the Notice of Meeting Proxy Form

4 TRC SYNERGY BERHAD ANNUAL REPORT chairman s letter to shareholders It gives me great pleasure to have, once again, been given the opportunity to present to you the Annual Report and Group Audited Accounts of TRC Synergy Berhad and its subsidiary for the year ended 31 December Dato Sri Sufri Bin Hj Mohd Zin Executive Chairman Overview In today s business environment we are constantly faced with new challenges and uncertainty in our daily endeavour. To stay relevant, we have to be innovative, proactive, committed, capitalised on opportunity and have a clear vision so as to enable the Group to grow from strength to strength. Going forward, this is our pledge to our shareholders and we are confident of our success due to the strong commitment by our team. Financial Review For the period under review, the Group s turnover was reduced to million from million in the preceding year representing a reduction of 28%. Likewise, the profit after tax also registered a reduction from 45.6 million in 2008 to 27.3 million in 2009 i.e representing a reduction of 41%. The lower turnover was largely due to the completion of some of the group s major projects like the Submarine Base in Sepanggar Bay and the Kuala Terengganu Airport and the lower profit after tax margin was mainly due to the provision of 4 million made on unrealised investment. The turnover and profit after tax for the period under review were lower than expected, however, we are cognizant of the fact that we have to make a concerted effort to improve our overall performance and we have designed a comprehensive strategic plan which will put the Group on the path to greater profitability going forward.

5 3 TRC SYNERGY BERHAD ANNUAL REPORT 2009 chairman s letter to shareholders (cont d) Review of Operations Construction This division remains the main revenue contributor for the Group. The year 2009 was a challenging year for the Group and the construction industry. During the year, projects like, Sibu Bawang Assam Road (222 million), IPD Dang Wangi (125 million), construction of warehouses for Bintulu Port (88.8 million) and the Maritime College (218 million) were being implemented. The group through its subsidiary, TRC (Aust) Pty. Ltd, was also awarded a Civil Work Contract amounting to 12.9 million for the Development of a Housing project in Wallan, Melbourne, Australia, by its associate company Pretty Sally Pty. Ltd. The year in question also saw the successful completion of two of the Group s major projects, namely, The Sepanggar Bay Submarine Base project (410 million) and the Kuala Terengganu Runway Extension P4 project (202 million). Subsequent to the close of the financial year, the group was awarded a project for the proposed development of RTG G-Block and Associated Works at the Containery Terminal one by Northport (Malaysia) Bhd on February 25, 2010 for a contract sum of 45.9 million and a project for rectification works of government apartments in Precinct 5 Putrajaya for 20.3 million. With the anticipated expansion of the construction sector by 3.2% in 2010 and the proactive measures taken by the government to stimulate the economy, we are optimistic that the future prospect for this sector is bright. Property The period under review saw the completion of the TRC Business Centre. The development was primarily to house TRC Corporate Offices and its subsidiaries and to act as a business centre supporting the surrounding development. On-going sales are also being carried out for the unsold units of our completed projects in Taman Waja, Kuala Pilah, Negeri Sembilan and Idaman and Impian Senibong Apartments in Johor Bahru. Impending development on Lot 196, Ukay Tropika, Ulu Klang Selangor is expected to be launched in mid This development is expected to generate a Gross Development Value of approximately 65 million. Other land banks which will be developed in the medium term include Impian Senibong Apartment Phase 2 in Johor Bahru and a 27 acres piece of land in Plentong, Johor Bahru. The property division has also expanded its wings overseas with the purchase of a 26% equity stake in Delta Gardens Co Ltd in Cambodia by its wholly subsidiary, TRC Land (Cambodia) Ltd. and the acquisition of a 33.3% stake in a 118 hectare land in Australia by its wholly owned subsidiary TRC (Aust) Pty Ltd. Delta Gardens is the developer of 123 units of double storey villas in Phnom Penh, Cambodia. Though this division, through its wholly owned subsidiary TRC Land Sdn Bhd, is still a minor contributor to the Group s revenue, we expect this to change when the above plans come

6 TRC SYNERGY BERHAD ANNUAL REPORT chairman s letter to shareholders (cont d) , , , , , , , , , , , , SHAREHOLDERS S FUND ( 000) REVENUE ( 000) NET TANGIBLE ASSETS PER SHARE (sen) PROFIT/(LOSS) BEFORE TAXATION ( 000) Dividend The Board has recommended a first and final dividend of 4 sen less income tax of 25% for the 2009 financial year amounting to 5,688, into fruition in the near future. Energy Our group embarked on the energy sector in 2007 through the acquisition of a 26% stake in PetroBru (B) Sdn. Bhd., a company incorporated in Brunei Darussalam, to venture into oil refinery and storage facility in Brunei Darussalam. With the consent of the Brunei Government, PetroBru (B) Sdn. Bhd. appointment the consultant Wood MacKenzie to conduct the Detailed Feasibility Study on the proposed project and the study was subsequently completed in June The result of the feasibility study was positive and the company is currently awaiting an official approval of the project from the Brunei Government. Barring unforeseen circumstances, we expect the project to commence in We also expect the future contribution by this sector to be positive. Manufacturing This division was incorporated to complement the Group s construction division. We do not foresee its revenue to have an impact on the Group performance. Corporate Development During the year, the following corporate development took place. Liputan Sutera Sdn Bhd became a wholly-owned subsidiary of the Group upon the acquisition of two ordinary shares of 1 each for a cash consideration of 2 by Trans Resources Corporation Sdn Bhd, a wholly-owned subsidiary of the Company, on 18 February As a result of the acquisition, PetroBru Build Sdn Bhd, a company incorporated in Brunei Darussalam and 60% owned by Liputan Sutera Sdn Bhd, became a subsidiary to the Group. On 12 March 2009, the Company acquired one ordinary share of 1 each in TRC Infra Sdn Bhd for a cash consideration of 1 and it became a wholly-owned subsidiary of the Group. On 4 June 2009, the Company incorporated a new wholly-owned subsidiary company, known as TRC (Aust) Pty Ltd, under the Australian Corporations Act This new subsidiary company was primarily incorporated to undertake construction and property development projects in Australia. In relation to this, TRC (Aust) Pty Ltd acquired 2 ordinary shares in Pretty Sally Holdings Pty Ltd on 20 July 2009,

7 5 TRC SYNERGY BERHAD ANNUAL REPORT 2009 chairman s letter to shareholders (cont d) a property management company. Further, TRC Land Sdn Bhd, a wholly owned subsidiary of the Group has incorporated a new wholly owned subsidiary company under the laws of the Kingdom of Cambodia. The Company is known as TRC Land (Cambodia) Limited. The certificate of incorporation dated 28 October 2009 was received on 13 November TRC Land (Cambodia) Ltd was primarily incorporated as an investment holding company for construction and property development projects in the Kingdom of Cambodia. TRC Land (Cambodia) Limited had on 13 November 2009 executed a Sale Shares Contract to acquire 26% equity interest in the issued share capital of a Cambodian incorporated private company, Delta Garden Limited for the sum of USD1,950, Future Prospects From the 2009/2010 economic report, the construction sector is envisaged to expand by 3.2% (2009 : 3.5%) with all sub-sectors registering steady growth. The sector is expected to benefit from the economic recovery and ongoing packages. In addition, exploration activities by oil and gas industries are expected to spur the construction sector. Major projects such as the Light Rail Transit (LRT) extension works on the Kelana Jaya and Ampang Lines, Pahang Selangor Raw Water Transfer, new LCCT at KLIA and expansion of Penang International Airport are expected to drive growth in the civil-engineering sub-sector. The non-residential sub-sector is expected to pick up strongly sparred by demand for property and commercial buildings. The residential sub-sector is also projected to strengthen following improved consumer sentiment. With the better economic outlook and the anticipated expansion of this sector we expected prospect for the Group going forward to be good. Acknowledgement and Appreciations On behalf of the Board of Directors, I would like to extend my appreciation to the staffs, our clients, bankers and business associates for their invaluable contribution to the group. It has been a challenging year and your unfailing support has unable the Group to weathered through these challenges. To our shareholders, we are committed to ensuring increasing return on your investment. Hard work, commitment and integrity have been and will always be the cornerstone of our past and future success. Thank you. Dato Sri Sufri Bin Hj Mohd Zin

8 TRC SYNERGY BERHAD ANNUAL REPORT corporate information Registered Office / Principal Place of Business TRC Business Centre Jalan Andaman Utama Ampang Selangor Tel No. : Fax No. : info@trc.com.my Board of Directors Dato Sri Sufri bin Hj Mohd Zin (Executive Chairman) Dato Abdul Aziz bin Mohamad (Executive Director) General (R) Tan Sri Mohd Shahrom Bin Dato Hj Nordin (Senior Independent Non-Executive Director) Noor Zilan bin Mohamed Noor (Independent Non-Executive Director) Abdul Rahman bin Ali (Independent Non-Executive Director) Company Secretary Abdul Aziz bin Mohamed (LS ) Branch Office Lot 3626, Block 16, KCLD Taman Timberland, Lorong Rock Kuching, Sarawak Tel No. : Fax No. : Website

9 Auditors Kumpulan Naga (AF-0024) Suit 1, 1st Floor, Wisma Leopad No. 5, Jalan Tun Sambanthan Kuala Lumpur Share Registrar Mega Corporate Services Sdn Bhd Level 15-2, Faber Imperial Court Jalan Sultan Ismail Kuala Lumpur Tel No. : Fax No. : Principal Bankers EON Bank Berhad Affin Bank Berhad AmBank (M) Berhad Malayan Banking Berhad United Overseas Bank Berhad RHB Bank Berhad CIMB Bank Berhad Standard Chartered Bank Malaysia Berhad Solicitors Messrs Noorzilan & Partners Messrs C.C. Choo, Hazila & Teong Stock Exchange Listing Bursa Malaysia Securities Berhad Main Market (Construction) Stock No. : 5054

10 TRC SYNERGY BERHAD ANNUAL REPORT profile of directors Dato Sri Sufri Bin Hj Mohd Zin Executive Chairman, 54 years of age Malaysian Dato Sri Sufri Bin Hj Mohd Zin is the founder of TRC Group. He was appointed as the Managing Director of TRC Synergy Berhad ( TRC or the Company ) on 29 March 2002 and presently he is the Executive Chairman of the Company and the Managing Director of its subsidiary Companies. He graduated from Institute of Teknologi MARA ( ITM ) in 1982 with a Diploma in Business Studies. Besides, he is a master degree holder in Business Administration in Construction Management from Harvey International University, United States. Dato Sri Sufri has completed his bachelor degree in Jurisprudence (External) from Universiti Malaya. He started his career as a banker with Bank Bumiputera Malaysia Bhd in His inherent perseverance and unique business acumen led him into the building and construction industry in During the Financial year ended 31 December 2009, he attended all five Board of Directors Meetings. Dato Abdul Aziz Bin Mohamad Executive Director, 51 years of age Malaysian Dato Abdul Aziz Bin Mohamad was appointed as an Executive Director of the Company on 29 March He joined TRC Group as a Senior Contract Executive in 1994 and was later promoted to Deputy General Manager (Contracts) in He had his early education in the Malay College Kuala Kangsar and graduated from Trent Polytechnic in Nottingham, England in He is a Quantity Surveyor by profession and a member of the Institution of Surveyors, Malaysia. He started his career as an Assistant Quantity Surveyor in England with Rider Hunt and Partners in He later joined Jabatan Kerja Raya (JKR) Kuala Lumpur in 1983 as a Quantity Surveyor where he administered the contractual aspects of projects. YBhg Dato Aziz attended all five Board of Directors Meetings held during the financial year ended 31 December He does not have any personal interest in any business arrangement involving the Company. Note:- Save as disclosed above, 1) none of the Directors have:- i) any family relationship with any director and/or substantial shareholders of the Company; ii) any conflict of interest with the Company; and iii) any conviction for offences (other than traffic offences) within the past ten (10) years. 2) none of the Directors holds directorship in other public companies.

11 9 TRC SYNERGY BERHAD ANNUAL REPORT 2009 profile of directors (cont d) General (R) Tan Sri Mohd Shahrom Bin Dato Hj Nordin Senior Independent, Non-Executive Director 62 years of age Malaysian General (R) Tan Sri Mohd Shahrom Bin Dato Hj Nordin was appointed as a Director of the Company on 25 March After his secondary education, he was selected for Officer Cadet training at the Royal Military College, Sungai Besi in 1966 before being commissioned as a Second Lieutenant into the Royal Malay Regiment in 1968 and assigned as a Platoon Commander with the 2nd Battalion, Royal Malay Regiment. General (R) Tan Sri Mohd Shahrom has served in various appointments at command, staff, training and the diplomatic services levels and he was the Chief of the Malaysia Army from 1st January 2003 to 15 September Prior to that appointment he was the Chief of staff at the Armed Forces Headquarters. Currently he is the Senior Vice President Defence of the National Aerospace & Defence Industries Sdn Bhd (NADI). He is also the Chairman of SME Aerospace Sdn Bhd (SMEA) and Director of SME Ordinance Sdn Bhd (SMEO). Both SMEA and SMEO are subsidiary companies of the NADI Group of Companies. General (R) Tan Sri Mohd Shahrom is the Chairman to the Audit Committee and the Senior Independent Non Executive Director of the Company. During the financial year ended 31 December 2009 he attended four out of five Board of Directors Meetings held. From left to right - Abdul Rahman Bin Ali, Noor Zilan Bin Mohamed Noor Seated - General (R) Tan Sri Mohd Shahrom Bin Dato Hj Nordin Noor Zilan Bin Mohamed Noor Independent, Non Executive Director 50 years of age Malaysian Encik Noor Zilan Bin Mohamed Noor was appointed as a Director of the Company on 13 May He graduated from ITM in 1983 with a Diploma in Law. He then joined United Malayan Banking Corporation as a Trainee Executive Officer before pursuing for further studies in the United Kingdom in 1984 and graduated from City of London Polytechnics with LLB (Hons) majoring in Business Law in Subsequently, he went on to read Law at Lincoln s Inn and was called to the English Bar in 1988 and upon returning to Malaysia he was then called and admitted to the Malaysian Bar in 1989 as an Advocate & Solicitor. He then worked as a Legal Assistant before starting his own law firm in 1991 and is now a Senior Partner with an established law firm in Kuala Lumpur specializing in the area of Corporate Law, Banking, Building and Construction Law apart from civil & criminal litigation. En. Noor Zilan is a member of the Audit Committee and the Chairman to the Nomination Committee and Remuneration Committee. He attended four out of five Board of Directors Meetings held during the financial year ended 31 December Abdul Rahman Bin Ali Independent, Non Executive Director 53 years of age Malaysian En. Abdul Rahman Bin Ali was appointed as a Director of the Company on 13 May He graduated from University of Malaya in 1982 with a Degree in Accounting. He is currently a Chartered Accountant of the Malaysian Institute of Accountants. He started his career as a credit officer with Bank Bumiputera Malaysia Berhad in He left the bank in 1986 to set up his own management consultancy company under the name of Advance Management Services in 1986 before becoming a Branch Manager with a public accounting firm, Sahir and Co. in In 1994, he set up his own accounting firm by the name A. Rahman & Associates and later became a partner of A. K. N. Arif (formally known as Omar Arif, A.Rahman & Associates) in En. Abdul Rahman is a member of the Audit Committee, Nomination Committee and Remuneration Committee. He attended all the five Board of Directors Meetings held during the financial year ended 31 December 2009.

12 TRC SYNERGY BERHAD ANNUAL REPORT corporate structure TRC (Aust) Pty Ltd ( ) 100% Pretty Sally Holdings Pty Ltd ( ) 33.33% Trans Resources Corporation Sdn Bhd ( P) 100% TRC (Sarawak) Sdn Bhd ( W) 100% TRC Concrete Industries Sdn Bhd ( V) 100% Liputan Sutera Sdn Bhd ( H) 100% Petrobru Build Sdn Bhd 60% TRC Infra Sdn Bhd ( P) 100% TRC Land Sdn Bhd ( W) 100% TRC Development Sdn Bhd ( U) 100% TRC Land (Cambodia) Limited (6234/09E) 100% Delta Garden Limited (11524/08P) 26% TRC Energy Sdn Bhd ( K) 100% PetroBru (B) Sdn Bhd 26% TRC International Pte Ltd (LL04510) 100%

13 11 TRC SYNERGY BERHAD ANNUAL REPORT 2009 statement on corporate governance The Board of Directors of TRC Synergy Berhad ( the Board ) remain committed to maintaining a high standards of corporate governance as set out in the Malaysian Code on Corporate Governance ( The Code ) are practiced throughout the Company and its subsidiaries ( TRC Group or the Group ). These have been recognized by the Board as the Group s key responsibilities in order to protect and enhance long term shareholder value and the financial performance of TRC group. The Board will continuously evaluate the Group s corporate governance practices and procedures, and where appropriate will adopt and implement the best practices as enshrined in the Code. The Board is pleased to disclose below the following statement detailing the measures implemented by TRC Group to strengthen its compliance with the Principles and Best Practices of Corporate Governance as set out in the Code. Directors The Board of Directors ( the Board ) The Company is led and controlled by the Board of Directors headed by the Executive Chairman who has detailed knowledge and vast experience in the construction industry. The rest of the Board members possess a wide range of skill and experiences ranging from construction, finance, legal and general management discipline suitable for managing the Group businesses. The Board has overall responsibility in the stewardship of the Group s direction and its performance inclusive of corporate governance, strategic planning and maintaining effective control over financial and operational matters. Board Composition and Balance The Board currently consists of five (5) members comprising two (2) Executive Directors and three (3) Independent Non- Executive Directors. The Company fulfills the prescribed requirement of having at least one-third (1/3) of the Board Members as Independent Non-Executive Directors. A brief profile of each Director is presented in this Annual Report on pages 8 and 9. The Independent Non-Executive Directors provide broad, unbiased and balanced assessment on proposals initiated by the Executive Directors and the senior management of the Group. They also contribute by the exercise of independent judgment and objective participation in the proceeding and decision making process of the Board. In compliance with Part 2, AA VII of the Code, the Company has redesignated one of its Independent Non Executive Director to resume the role as Senior Independent Non Executive Director. In view of this composition, the Board of the view that the present members of the Board are considered sufficient in addressing the issues affecting the Group. Board Meeting The Board convene a total of five (5) board meetings during the financial year ended 31 December In the meetings, the Board deliberated and considered matters relating to the Group s financial performance, key business and operational issues and business plans. Details of attendance at the meeting are as follows:- Name No. of Meeting Attended % of Attendance Dato Sri Sufri bin Hj Mohd Zin 5/5 100 Dato Abdul Aziz bin Mohamad 5/5 100 Jen (B) Tan Sri Mohd Shahrom bin Dato Hj Nordin 4/5 80 Noor Zilan Bin Mohamed Noor 4/5 80 Abdul Rahman bin Ali 5/5 100 All Directors have complied with the minimum 50% attendance requirement in respect of Board meeting as stipulated by the Bursa Listing Requirements. The Board has agreed to meet at least four times a year with additional matters addressed by way of circular resolutions and additional meeting to be held as and when the need arises.

14 TRC SYNERGY BERHAD ANNUAL REPORT statement on corporate governance (cont d) Directors (cont d) Supply of Information to the Board All Directors have full and unrestricted access to all information pertaining the Group s business as a full Board or in their individual capacity in carrying out their duties and responsibilities effectivelly. The Chairman undertakes primary responsibility for organizing information to be distributed to the Board. They also have direct access to the advice and services of the Company Secretary, senior management, internal and external auditors and other independent professional at all times and at the Company s expense. As for the Board meeting, all Directors are provided with the agenda and Board papers prior to the meetings to ensure the Directors have sufficient time to appreciate, review, consider and deliberate the issues tabled at the meetings. Senior officers of the Group are invited to clarify and explain the relevant matters tabled to the Board. Appointment and Re-election of the Board The Company has a formal and transparent procedure for the appointment of new Directors and re-election of Directors. These aspects are spelt out clearly in the Company s Articles of Association. Besides, The Nomination Committee, comprising of two (2) Independent Non-Executive Directors, reviews and recommends any proposed appointments before the appointment are approved by the Board. All the newly appointed Directors are subject to election by shareholders at the Annual General Meeting subsequent to their appointment. As for the re-election of Directors, the Articles of Association of the Company provides at least one-third (1/3) of the Directors are required to retire by rotation at each financial year and are eligible to offer themselves for reelection at the Annual General Meeting. All Directors shall retire from office once at least in each three (3) years. At the last Annual General Meeting held on 25 June 2009, Dato Sri Sufri bin Hj Mohd Zin retired and was elected to the Board. Directors Training All Directors have duly complied with the Listing Requirements in relation to the Mandatory Accreditation Programme prescribed by Bursa Malaysia Securities Berhad. Subsequent to the repeal on the CEP Programme and the inception of the new requirement that requires the Board as a whole to evaluate the training needs for Directors. They will identify the relevant training programmes for Directors to ensure that they are updated with appropriate professional training to enhance their knowledge and professionalism in discharging their duties to the Group. During the financial year ended 31 December 2009, All Directors, except Dato Abdul Aziz bin Mohamad, attended the following training programmes and seminars to further broaden their knowledge and skills in the Group core business and on matters concerning their skills and professional fields:- i) SC-Bursa Malaysia Corporate Governance Week; ii) National Asset and Facility Management (NAFAM); iii) Open Forum on Malaysian Industry-Government Group for High Technology (MIGHT); iv) LIMA International Maritime Conference 2009; v) Pengauditan yang Berintegriti ; and vi) Seminar on Implementing ISQC. Dato Abdul Aziz Mohamed did not attend any training programme during the year due to work commitments. Apart from that, frequent visit to the operational projects sites and occasional trips to meet overseas suppliers and consultants and active participation on the relevant association have equipped the Executive Directors with the latest information and technologies in the industry.

15 13 TRC SYNERGY BERHAD ANNUAL REPORT 2009 statement on corporate governance (cont d) Directors (cont d) Board Committees As recommended by the Code, the Board has established the following committees to assist the Board in discharging its duties:- i) Audit Committee ii) Nomination Committee iii) Remuneration Committee iv) Employees and Directors Share Option Scheme (ESOS) Committee Each of this committee has its own functions and responsibilities and they report to the Board. Directors Remuneration The Group has adopted the principle recommended by the Code whereby the level or remuneration of the Directors and senior management should reflect the level of responsibility and contributions toward the successful and efficient running of the Group s activities. Procedure To assist the Board in the discharge of its duties, the Board has established a Remuneration Committee. As at the date of the Annual Report, the composition of the Remuneration Committee is as follows:- i) Noor Zilan Bin Mohamed Noor ii) Abdul Rahman bin Ali The Committee will review and recommend to the Board the remuneration package of the executive directors and senior management of the Group with the main aim of providing level of remuneration sufficient to attract and retain competent executives who can manage the Group effectively. Disclosure The aggregate remuneration of the Directors received and receivable from the Company and its subsidiaries during the financial year ended 31 December 2009 are as follows:- Category Fees () Salaries () EPF & SOCSO () Bonus Executive Directors - 1,284, , , Non-Executive Director 84, Total 84, ,284, , , The remuneration paid to the Directors, analysed into the following bands, is as follows:- Range of remuneration Number of Executive Directors Number of Non-Executive Directors Less than 50, , , ,500,000 1,550,

16 TRC SYNERGY BERHAD ANNUAL REPORT statement on corporate governance (cont d) Relationship with Investors and Shareholder Communication The Board is aware that the key element of good corporate governance is the effective communication and proper dissemination of all important issues and major development concerning the Company to all shareholders. In addition to the various announcements made during the year, the timely release of financial results on a quarterly basis provides shareholders with an overview of the Group s performance and operations. During the financial year ended 31 December 2009, the Company organized a number of meetings and briefings with financial analysts to establish better understanding of the Company s objective and performance and to convey other information that may affect shareholders interest. The Company also has a cordial relationship with reporters who have been playing a very effective role in conveying the Group s information to the public, shareholders and investors. Press releases are also occasionally organized to clarify on certain matters related to the Company and its operating unit. Besides, shareholders, investors and members of the public may also obtain updated information on the Group by accessing to the Company s website at The Annual General Meeting The Annual General Meeting remains the primary channel of communication with the Company s its shareholders in particular private investors. Shareholders are encouraged and given sufficient time and opportunity to participate in the proceedings, to raise questions and participate in discussions pertaining the operation and financial aspects of the Group. All Board members, senior management as well as the Company s external auditors are available to respond to shareholders relevant questions raised at the meeting. Accountability and Audit Financial Reporting In presenting the Company s financial statements and quarterly results to shareholders and other interested parties, the Board aims to present a balanced and understandable assessment of the Group s financial position and prospects. The financial statements of the Company and of the Group are prepared in accordance with the requirements of the applicable Approved Accounting Standards in Malaysia and the provisions of the Companies Act, The Group s annual financial statements and quarterly results are reviewed by the Audit Committee and approved by the Board before announcement to Bursa Malaysia for public release. The Statement explaining the Directors responsibilities for preparing the annual audited financial statements pursuant to paragraph 15.27(a) of the Listing Requirements is set out on page 16 of the Annual Report. Internal Control The Board acknowledges and placed strong emphasis in maintaining a sound system of internal control which is necessary to safeguard the Group s assets and shareholders interest. Details of the Group s internal control system is presented in the Statement on Internal Control and Audit Committee Report set out on pages 17 to 18 and pages 19 to 22 respectively. Relationship with External Auditors Through the Audit Committee, the Group has established a transparent and appropriate relationship with the Group s external auditors in seeking their advice and towards ensuring compliance with the applicable Approved Accounting Standards. The external auditors are invited to attend the Audit Committee meeting and to the Board meeting on a need basis as and when deemed appropriate.

17 15 TRC SYNERGY BERHAD ANNUAL REPORT 2009 statement on corporate governance (cont d) Accountability and Audit (cont d) Corporate Social Responsibility ( CSR ) The Board recognizes the importance of the CSR the framework of which has been launched by the Bursa Malaysia on 15 September The move by Bursa Malaysia is seems to be inline with the decent intention of the Government to inculcate the culture of corporate social responsibility among the public listed companies. Therefore, the Board had agreed to beef up the Company s social activities with an intention to share the company s profitability with the public in forms of contribution on social responsibility activities. During the financial year ended 31 December 2009, TRC Group continued to support worthy causes which involve the community at large and the staffs by donating various amounts to various parties/bodies within the country. This included a contribution to the welfare bureau of Persatuan Kontraktor Melayu Malaysia for their welfare activities besides other donations and contributions to various charitable establishments. As a continuous effort to strive for better, convenient and conducive working environment for the staffs, the Company has provided free daily lunch for its headquarters staffs starting from September The programme was initiated in conjunction with the Company s shift to its new corporate office at Jalan Andaman Utama, Ampang. There are about 80 staffs benefited from the programme. In its effort to support a green sustainable environment and better public awareness and understanding towards environment, the Company strongly supports the establishment of Landskap Malaysia ( Malaysian Landscape ) and a substantial amount of donation was made in relation thereto. During the financial year ended 31 December 2009, the Group had also organized a three day Safety Day at the site office, Bawang Assan, Sibu Sarawak. Among the objectives were to enhance safety awareness and promote safety and safety culture among the workers. Statement of Compliance with the best practice of the Malaysian Code on Corporate Governance (The Code) Save as disclosed below, the group has substantially complied with the Best Practices in Corporate Governance set out in Part 2 of the Code:- Provision of the Code Details Explanation Part 2, AA II Chairman and Chief Executive The Company is headed by an Executive Chairman and therefore, the roles of the Chairman and the Chief Executive Officer are not separate. The Board is of the opinion that the check and balance of power is undertaken by the strong presence of Independent Non-Executive Directors in the Board. Furthermore, the Chairman encourages all Directors to participate actively in all deliberation of issues that concern the Group. Hence, the Board maintains the view that this combined arrangement will not hamper the Board from making fair decisions for the best interest of the Group. In compliance with Part 2 AA VII, the Company has appointed General (R) Tan Sri Mohd Shahrom Bin Dato Hj Nordin as the Senior Independent Non-Executive Director to whom concerns may be conveyed. Additional Compliance Information In compliance with the Listing Requirements, the following information is provided:- Utilization of proceeds For the financial year ended 31 December 2009, there was no proceed raised from any exercise. Share buybacks The Company has not undertaken any share buyback exercise during the financial year ended 31 December 2009.

18 TRC SYNERGY BERHAD ANNUAL REPORT statement on corporate governance (cont d) Additional Compliance Information (cont d) Option, Warrants or Convertible Securities During the financial year, 960 shares were issued by virtue of the conversion of ICULS and 45,000 shares were issued by the Company by virtue of the exercise of options pursuant to the Company s ESOS. American Depository Receipt (ADR) / Global Depository Receipt (GDR). The Company has not sponsored any ADR or GDR Programme. Sanctions and / or penalties There were no sanction and/or penalty imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the financial year ended 31 December Non-Audit Fees The non-audit fees paid to external auditors amounting to 9, for the financial year ended 31 December Variation of Results There was no material variation between the audited results for the financial year ended 31 December 2009 with the unaudited results announced. Profit Guarantee There was no profit guarantee given by the Company during the financial year ended 31 December Material Contracts There was no material contracts between the Company and its subsidiaries involving Directors and major shareholders interests during the financial year ended 31 December Revaluation of landed properties The Company does not adopt a policy of regular revaluation of its properties. Recurrent Related Party Transaction The Company did not enter into any recurrent related party transaction which requires the shareholders mandate during the financial year ended 31 December Statement of Directors Responsibility in Relation to the Financial Statements The Board is responsible to ensure that the financial statements are prepared in accordance with the provision of the Companies Act, 1965 and applicable approved accounting standards in Malaysia so as to ensure a true and fair view of the state of affairs of the Group and the Company as at the end of each financial year and of their results and their cash flows for that financial year then ended. The Board is also responsible to maintain accounting records that disclose with reasonable accuracy the financial position of the Group and the Company, and which enable them to ensure that the financial statements comply with the Companies Act, The Directors have general responsibilities for taking such steps that are reasonably available to them to safeguard the assets of the Group, and to prevent and detect fraud and other irregularities. The Directors are satisfied that in preparing the financial statements of the Group for the financial year ended 31 December 2009, the Group has adopted appropriate accounting policies and applied them prudently and consistently. They are also satisfied that reasonable and prudent judgments and estimates were made and all applicable Approved Accounting Standards in Malaysia have been followed accordingly.

19 17 TRC SYNERGY BERHAD ANNUAL REPORT 2009 statement on internal control The Board of Directors of TRC Synergy Berhad ( the Board ) is committed to maintaining a sound and effective System of Internal Control in the Group. The Board is pleased to provide the following Statement on Internal Control which outlines the nature and scope of internal control of the Group during the financial year ended 31 December 2009 pursuant to the Listing Requirements of the Bursa Malaysia Securities Berhad. Board Responsibility The Board acknowledges its responsibility for maintaining a sound system of internal control and risk management, and for reviewing the adequacy and integrity of these systems as stipulated by the Malaysian Code on Corporate Governance. The internal control system involves the core business and its key management, including the Board, and is designed to meet the Group s business objectives and to manage the risks to which it is exposed. The system of Internal Control aims to :- i) safeguard shareholders interest and the assets of the Group; ii) ensure that proper accounting records are maintained; and iii) that the financial information used within the business and the publication to the public is reliable. The Board is fully aware that this system, by its nature, can only provide reasonable, and not absolute, assurance against material misstatement, fraud end error. These systems are designed to manage and mitigate, rather than eliminate, the risk of failure to achieve business objectives of the Group. The Board s responsibility for internal control does not cover those of the associated companies which are separately managed. Internal Control The key elements of the Group s internal control system are described below:- Internal Audit Function The Board is fully aware of the importance of the internal audit function and has established the Internal Audit Department for the Group on 20 August The main objective of this department is to review the key business processes and controls and to assists the Audit Committee in the discharge of its duties and responsibilities. Its role is to provide independent and objective reports on the organization, management, records, accounting policies and internal controls to the Audit Committee and the Board. As required by the Listing Requirements, the Internal Auditors report directly to the Audit Committee. They provide periodic reports to the Audit Committee on the outcome of the audit works conducted by them which would be reviewed and evaluated by the Audit Committee. None of the weaknesses or issues identified during the review for the financial year ended 31 December 2009 has resulted in non compliance with any relevant policies or procedures, listing requirements and other recommended industry practices that require disclosure in the Company s Annual Report. The presence of the internal audit function has provided the level of assurance as to the effectiveness of the operation and validity of the Group s internal control system. The details of the Internal Audit activities are mentioned on page 21 of this Annual Report. Quality Policy The construction arm of the Group has a clear and well documented Quality Policy in accordance with ISO 9001 : This policy and the related procedures are communicated to the respective staff members. Amongst the salient features of the Quality Policy are as follows:- i) Internal Quality Audits are conducted at planned intervals to determine whether the Quality Management System is effectively implemented and maintained and conforms to the established system requirements of Internal Standard, ISO 9001:2000. ii) On an annual basis, an overall Internal Quality Audit Plan is devised encompassing every departments and projects, taking into consideration the status and importance of relevant process, areas to be audited as well as results of previous audits. iii) Qualified Internal Quality Auditors will be assigned with audit works in accordance with the Internal Quality Audit Plan where the reports shall be examined and analyzed and reported to the management during Management Review Board Meeting.

20 TRC SYNERGY BERHAD ANNUAL REPORT statement on internal control (cont d) Internal Control (cont d) Quality Policy (cont d) iv) As part of the Quality Management System, the management shall meet on monthly basis to discuss and deliberate all issues relating to the business of the Group. v) The Audit Committee is accessible to the relevant reports produced in relation to the Quality Management and if the need arise, the matter shall be further discussed in the Board Meeting. Line of Reporting Clearly defined delegation of responsibilities to committees of the Board and to operating units, including authorisation levels for all aspects of the business. This also includes detailed job description and specification provided to each employee of the Group which is further reiterated through a well defined organizational structure. Dissemination of Information within the Group Regular and comprehensive information is provided to Management covering financial performance and key business indicators, key operating statistics/ indicators, key business risks, legal, environmental and regulatory matters. Key matters affecting the Group are brought to the attention of the Audit Committee and are reported to the Board on a regular basis. Detail Budgeting Process A detailed budgeting process where operating units prepare budgets for every project for discussion in the Management Meeting. A monthly monitoring of results against budget, with major variances being followed up and management action taken, where necessary. Risk Management Framework The Group has in place an on-going process for identifying, evaluating, monitoring and managing the significant risks affecting the achievement of its business objectives. This is an on-going process, subject to regular review by the Board, and accords with the Statement on Internal Control: Guidance for Directors of Public Listed Companies. The Group adopts a decentralised approach to risk management by encouraging participation of all employees in such a manner that the employees take ownership and responsibility for risks at their respective levels. The process of risk management and treatment is overseen by the senior management and report to the Board through the Audit Committee. The risk management framework is also embodied in the Quality Policy in accordance with ISO 9001 : 2000 practised by a wholly-owned subsidiary of the Company. Audit Committee The Audit Committee, on behalf of the Board, regularly reviews and holds discussions with the management on the matters relating to internal control, the external auditors and the management. The Report on the Audit Committee set out on pages 19 to 22 of this Annual Report contains further details on the activities undertaken by the Audit Committee in Board The Board holds regular discussions with the Audit Committee, Management and external auditors and reads their reports on matters relating to internal controls and deliberates their recommendations for implementation. The Directors have taken the necessary steps, as are reasonably open to them, to ensure that appropriate systems are in place for the assets of the Group to be adequately safeguarded through the prevention and detection of fraud and other irregularities and material misstatements. The Directors believe that the system of internal control is considered appropriate to business operations, and that the risks taken are at an acceptable level within the context of the business environment of the Group. The Board is not aware of significant weaknesses in the internal control system that will result in material losses. This statement is made in accordance with a resolution of the Board of Directors dated 29 April 2010.

21 19 TRC SYNERGY BERHAD ANNUAL REPORT 2009 audit committee report 1. Composition of the Audit Committee The Audit Committee of the Company was established in August Presently, the Committee comprises of the following members. All of them are Independent Non Executive Directors. Chairman: General (R) Tan Sri Mohd Shahrom Bin Dato Hj Nordin (Senior Independent Non-Executive Director) Appointed as Chairman to the Audit Committee Member on 4 February 2010 Member: i. Noor Zilan bin Mohamed Noor (Independent Non-Executive Director) Resigned as Chairman to the Audit Committee on 4 February 2010 ii. Abdul Rahman Bin Ali (Independent Non-Executive Director) (Member of the Malaysian Institute of Accountants) Secretary : Abdul Aziz Bin Mohamed (Company Secretary) 2. Terms of Reference i. Composition The Board of Directors shall elect an Audit Committee from amongst themselves (pursuant to a resolution of the Board of Directors) comprising of not less than three (3) members all of them must be Non-Executive Directors with a majority of them being Independent Directors. The members of the Audit Committee shall elect a Chairman from amongst themselves. All members of the Audit Committee, including the Chairman, will hold office only so long as they serve as Directors of the Company. Should any member of the Audit Committee cease to be a Director of the Company, his membership in the Audit Committee would cease forthwith. If the members of the Audit Committee for any reason be reduced to below three (3), the Board of Directors shall within three (3) months of that event, appoint such number of the new members as may be required to make up the minimum number of three (3) members. ii. Objectives The primary objectives of the Audit Committee are: a. To provide assistance to the Board in fulfilling its fiduciary responsibilities particularly relating to business ethics, policies and practices and financial management and control. b. To provide greater emphasis on the audit functions by increasing the objectivity and independence of external and internal auditors and providing a forum for discussion that is independent of the management. c. To maintain through regularly scheduled meetings a direct line of communication between the Board and the external auditors, internal auditors and financial management.

22 TRC SYNERGY BERHAD ANNUAL REPORT audit committee report (cont d) 2. Terms of Reference (cont d) iii. Duties and Responsibilities The duties and responsibilities of the Audit Committee shall be: a. To consider the appointment of the external auditors, audit fee and any questions of resignation or dismissal. b. To discuss with the external auditor before the audit commences the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved. c. To review the quarterly results and year end financial statements before submission to the board, focusing particularly on: i. any changes in accounting policies and practices ii. major judgmental areas iii. significant adjustments resulting from the audit iv. the going concern assumption v. compliance with accounting standards vi. compliance with the stock exchange and legal requirements d. To discuss problems and reservations arising from the interim and final audits, and any matters the auditor may wish to discuss (in the absence of management where necessary). e. To review the internal audit programme, consider the major findings of internal audit investigations and management s response, and ensure co-ordination between the internal and external auditors. f. To keep under review the effectiveness of the internal control systems, and in particular review the external auditor s management letter and management s response. g. To review any related party transactions and conflict of interest situations that may arise within the Group including any transactions, procedure or course of conduct that raises questions of management integrity. h. To carry out such other functions as stipulated in the Bursa Securities Listing Requirements and other functions as may be agreed to by the Audit Committee and the Board of Directors. iv. Authority The Committee is authorised by the Board to investigate any activity within the terms of reference. It is authorized to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee. The Committee is empowered by the Board to retain persons having special competence as necessary to assist the Committee in fulfilling its responsibilities. v. Meeting and Minutes The Audit Committee shall not hold less than three (3) meetings a year and the quorum for each meeting shall be two (2) members. Minutes of each meeting shall be kept and distributed to each member of the Committee and also to the other members of the Board. The Committee Chairman shall report on each meeting to the Board. The Company Secretary shall act as the Secretary to the Audit Committee.

23 21 TRC SYNERGY BERHAD ANNUAL REPORT 2009 audit committee report (cont d) 3. Summary of Activities of the Audit Committee During the financial year ended 31 December 2009, the Audit Committee met four times. The Company Secretary acted as the secretary for the Committee at all the meetings held. Other Directors and senior management of the Group were also present at the meeting upon invitation. The details of the attendance of the members of the Audit Committee are as follows:- No. Audit Committee Attendance 1 Noor Zilan bin Mohamed Noor 3/4 2 Abdul Rahman Bin Ali 4/4 3 General (R) Tan Sri Mohd Shahrom Bin Dato Hj Nordin 3/4 The remuneration paid to the Directors, analysed into the following bands, is as follows:- During the financial year, the Audit Committee carried out the following review :- requirements and appropriate resolution of all accounting and audit matters requiring significant judgment and where appropriate, made recommendations to the Board. the provisions set out under the Malaysian Code on Corporate Governance, the extent of compliance with the said Code and recommend to the Board action plan to address further compliance matters. review of the adequacy of the competence of the internal audit function. 4. Internal Audit Function The Group internal audit function carried out by the Internal Audit Department reports directly to the Audit Committee. The principal objective of the Department is to provide independent and constructive reports on the effectiveness of the internal control system within the business units and projects of the Group. Apart from that, the Department also ascertains that adequate internal control is maintained to safeguard the assets, resources and the shareholders interest. Throughout the financial year, the Internal Audit Department has undertaken several independent audit assignments in accordance with the approved annual audit plan. Details of the activities performed are as follow: reasonable assurance that the Group s objective and goals are met efficiently and economically. resolved accordingly. From the internal audit findings, the Internal Audit Department will prepare independent opinion and reports accordingly to the Audit Committee on risks area and weaknesses identified with relevant recommendations. All recommendations shall be reviewed and discussed accordingly and communicated to the management to rectify the identified weaknesses. The Department also established follow up reviews to monitor and ensure that the recommendations agreed by the Audit Committee have been effectively implemented. Going forward the Internal Audit Department will strengthen its capacity and efficiency for the better contribution to the Group pursuant to the Audit Chartered and Internal Audit Plan which have been approved by Audit Committee.

24 TRC SYNERGY BERHAD ANNUAL REPORT audit committee report (cont d) 5. Statement in Relation to the Allocation of Share Option Scheme The Audit Committee noted that the Company had established Share Option Scheme for Employees and Directors ( The Scheme ) pursuant to the By-Laws which were approved by the shareholders at the Extraordinary General Meeting held on 30 April The Scheme shall remain in force for a duration of five (5) years commencing from 22 June 2004 and could be extended for another five (5) years at the discretion of Audit Committee. On 27 August 2008, the ESOS Committee had approved the extension of the Scheme for another five (5) years commencing from its expiry date of 21 June Therefore, the Scheme will expire on 20 June The salient terms of the Scheme are as follows:- i. the maximum number of the Company s new shares to be made available under the Scheme shall not exceed fifteen percent (15%) of the issued and paid up capital of the Company; ii. not more than fifty percent (50%) of the Company s shares available under the Scheme shall be allocated to Directors and senior management; iii. not more than ten percent (10%) of the Company s shares available under the Scheme shall be allocated to individual Director or eligible employees, who either singly or collectively through person connected to them holds twenty percent (20%) or more of the issued and paid up capital of the Company; iv. The eligible participants shall include eligible employees and Directors who as at the offer date have satisfied the following criteria :- a) is a confirmed employee or appointed director within the Group; b) has attained at least age of eighteen (18); c) is employed full time and on the payroll of the Group; d) is under such category and of such criteria that the option committee may from time to time decide. v. The Scheme shall remain in force for a duration of five (5) years from the effective date of the launch and could be extended for another five (5) years at the discretion of the ESOS Committee. vi. The option price for each share shall be based on the weighted average market price (WAMP) of the Company s share traded on the Exchange for the five (5) trading days preceding the date of offer with a discount if any, that does not exceed ten percent (10%) from the five (5) day of the Company s shares. The option under the Scheme was initially offered to the eligible employees and Directors at an offer price of 1.70 per option share. Subsequently, consequent to the Rights Issue exercise which was completed on 31 January 2007, the exercise price of the Scheme was adjusted to 1.47 per option share. During the financial year ended 31 December 2008, the exercise price was further adjusted to 1.23 per option share in consequence to the Bonus Issue Exercise undertaken by the Company which was completed on 11 April 2008.

25 financial statements 24 Directors Report 29 Statement by Directors 29 Statutory Declaration 30 Independent Auditors Report 32 Income Statements 33 Balance Sheets 34 Statement of Changes in Equity - Group 35 Statement of Changes in Equity - Company 36 Cash Flow Statements 38 Notes to the Financial Statements

26 TRC SYNERGY BERHAD ANNUAL REPORT directors report The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December PRINCIPAL ACTIVITIES The principal activities of the Company are investment holding, general contractors for supplying labour and provision of corporate, administrative and financial support services to its subsidiaries. The principal activities of the subsidiaries are as disclosed in Note 17 to the financial statements. There have been no significant changes in the nature of the principal activities during the financial year. RESULTS Group Company Profit for the year 27,293,547 6,541,132 Attributable to: Equity holders of the Company 27,293,547 6,541,132 Minority interest ,293,547 6,541,132 RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements. In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature. DIVIDENDS The amount of dividend paid by the Company during the year, was as follows : In respect of the financial year ended 31 December 2008 as reported in the directors report of that year: First and final dividend of 6 sen per share less 25% taxation, on 189,578,439 ordinary shares, paid on 13 July ,531,030 At the forthcoming Annual General Meeting, a provisional dividend in respect of the financial year ended 31 December 2009, of 4 sen per share less 25% taxation on 189,623,439 ordinary shares amounting to a dividend payable of 5,688,703 (3 sen net per ordinary share) will be proposed for shareholders approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2010.

27 25 TRC SYNERGY BERHAD ANNUAL REPORT 2009 directors report (cont d) DIRECTORS The names of the directors of the Company in office since the date of the last report and at the date of this report are : Dato Sri Sufri Bin Hj Mohd Zin Dato Abdul Aziz Bin Mohamad Gen. (R) Tan Sri Mohd Shahrom Bin Dato Hj Nordin Abdul Rahman Bin Ali Noor Zilan Bin Mohamed Noor DIRECTORS BENEFITS During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, other than those share options granted pursuant to the Employee Share Options Scheme. Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 9 of the financial statements or the fixed salary of a full time employee) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest, as required by Section 169 (8) of the Companies Act, DIRECTORS INTEREST According to the register of directors shareholdings, the interests of directors in office at the end of the financial year in shares in the Company and its related corporations during the financial year were as follows : The Company Direct Interest : Number of Ordinary Shares of 1.00 Each At At Acquired Sold Dato Sri Sufri Bin Hj Mohd Zin 19,057,499 5,347,300-24,404,799 Dato Abdul Aziz Bin Mohamad 529,284 5,000,000-5,529,284 Deemed Interest : Dato Sri Sufri Bin Hj Mohd Zin # 49,198,000 4,000,000-53,198,000 # Deemed interested by virtue of his substantial shareholdings in TRC Capital Sdn. Bhd. and Kolektif Aman Sdn. Bhd Number of Share Options At At The Company Granted Exercised Dato Sri Sufri Bin Hj Mohd Zin 900, ,000 Dato Abdul Aziz Bin Mohamad 850, , Number of Warrants At At The Company Granted Exercised Dato Sri Sufri Bin Hj Mohd Zin 5,047, ,047,599 Dato Sri Sufri Bin Hj Mohd Zin and Dato Abdul Aziz Bin Mohamad by virtue of their interest in shares in the Company are also deemed interested in shares of all the Company s subsidiaries to the extent the Company has an interest. None of the other directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year.

28 TRC SYNERGY BERHAD ANNUAL REPORT directors report (cont d) ISSUE OF SHARES During the financial year, the Company increased its issued and paid-up ordinary share capital from 189,577,479 to 189,623,439 by way of : (i) (ii) the issuance of 960 ordinary shares of 1.00 each at par value from conversion of Irredeemable Convertible Unsecured Loan Stocks ( ICULS ); and the issuance of 45,000 ordinary shares of 1.00 each for cash pursuant to the Company s Employee Share Options Scheme ( ESOS ) at an exercise price of 1.23 per ordinary share. The new ordinary shares issued during the financial year ranked pari passu in all respect with the existing ordinary shares of the Company. WARRANTS 2007/2017 A total of 30,800,000 free warrants were issued by the Company in conjunction with the Rights Issue in Each warrant is convertible into one new ordinary share of 1.00 each at the exercise price of 1.00 per ordinary share. Consequential to the Bonus Issue in 2008, the Company had issued an additional 6,101,520 new Warrants 2007/2017 pursuant to the adjustments in accordance with the provision under the Deed Poll executed by the Company on 15 November 2006 constituting the Warrants ( Deed Poll ). No warrants were exercised during the current financial year and a total of 36,609,120 warrants remained outstanding as at 31 December The warrants are valid for a period of ten years and shall expire on 21 January IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS On 22 January 2007, the Company issued 30,800,000 nominal value of 5 - year 5% Irredeemable Convertible Unsecured Loan Stocks ( ICULS ) at a nominal value of 1.00 each for additional working capital purposes. Consequential to the Bonus Issue in 2008, an additional 247,433 new TRC ordinary shares would be issued by the Company upon the full conversion of the existing ICULS pursuant to the adjustments in accordance with the provision under the Trust Deed executed by the Company on 15 November 2006 constituting the ICULS ( Trust Deed ). As at 31 December 2009, 29,611,793 ordinary shares have been issued pursuant to the conversion of 29,603,633 nominal amount of ICULS issued at 100% of its nominal value. From the remaining 1,196,367 units unconverted ICULS, an additional 239,273 new TRC ordinary shares would be issued by the Company upon conversion of the existing ICULS. The terms of the ICULS are disclosed in Note 27 to the financial statements. TREASURY SHARES At the Extraordinary General Meeting held on 15 January 2009, the Board obtained shareholders approval to undertake the purchase of up to 10% of the issued and paid up share capital of the Company. The shareholders of the Company, by a special resolution passed in a general meeting held on 25 June 2009, renewed their approval for the Company s plan to repurchase its own ordinary shares. The directors of the Company are committed to enhancing the value of the Company for its shareholders and believe that the repurchase plan can be applied in the best interests of the Company and its shareholders. EMPLOYEE SHARE OPTIONS SCHEME The TRC Synergy Berhad Employee Share Options Scheme ( ESOS ) is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting held on 30 April The ESOS was implemented on 22 June 2004 and is to be in force for a period of 5 years from the date of implementation. The Board of Directors has approved the extension of the duration of ESOS for another five years from the expiry date of the initial ESOS period (21 June 2009).

29 27 TRC SYNERGY BERHAD ANNUAL REPORT 2009 directors report (cont d) EMPLOYEE SHARE OPTIONS SCHEME (CONT D) The salient features and other terms of the ESOS are disclosed in Note 33 to the financial statements. The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the names of option holders, including directors, who have been granted option to subsrcibe for less than 850,000 ordinary shares of 1.00 each. The names of option holders granted option to subscribe for 850,000 or more ordinary shares of 1 each during the financial year are as follows :- Exercise Number of Share Options Name Grant Date Expiry Date Price Granted Exercised Abdul Aziz Bin Mohamed , ,000 Dato Khoo Teng San , ,000 Loh Leh Wong , ,000 Yeoh Sook Keng , ,000 Details of options granted to directors are disclosed in the section on Directors Interests in this report. OTHER STATUTORY INFOATION (a) Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps: (i) (ii) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise. (b) At the date of this report, the directors are not aware of any circumstances which would render: (i) (ii) the amount written off for bad debts or the amount of the provision for doubtful debts inadequate to any substantial extent; and the values attributed to the current assets in the financial statements of the Group and of the Company misleading. (c) (d) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. 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. (e) As at the date of this report, there does not exist : (i) (ii) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or any contingent liability of the Group or of the Company which has arisen since the end of the financial year, except as disclosed in Note 35 to the financial statements.

30 TRC SYNERGY BERHAD ANNUAL REPORT directors report (cont d) OTHER STATUTORY INFOATION (CONT D) (f) In the opinion of the directors: (i) (ii) no contingent liability or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made. SIGNIFICANT AND SUBSEQUENT EVENTS DURING THE FINANCIAL YEAR The significant and subsequent events during the financial year are disclosed in Note 40 and 41 to the financial statements. AUDITORS The auditors, Messrs Kumpulan Naga, retire and do not seek re-appointment. A resolution to appoint AljeffriDean will be proposed at the forthcoming Annual General Meeting. Signed on behalf of the Board in accordance with a resolution of the directors, DATO SRI SUFRI BIN HJ MOHD ZIN DATO ABDUL AZIZ BIN MOHAMAD Kuala Lumpur, Malaysia. Date : 29 April 2010

31 29 TRC SYNERGY BERHAD ANNUAL REPORT 2009 statement by directors pursuant to section 169(15) of the companies act, 1965 We, DATO SRI SUFRI BIN HJ MOHD ZIN and DATO ABDUL AZIZ BIN MOHAMAD, being two of the directors of TRC SYNERGY BERHAD, state that in the opinion of the directors, the accompanying financial statements set out on pages 32 to 80 are drawn up in accordance with the provisions of the Companies Act, 1965 and the applicable Financial Reporting Standards in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2009 and of the results and the cash flows of the Group and of the Company for the year then ended. Signed on behalf of the Board in accordance with a resolution of the directors, DATO SRI SUFRI BIN HJ MOHD ZIN DATO ABDUL AZIZ BIN MOHAMAD Kuala Lumpur, Malaysia. Date : 29 April 2010 TRC SYNERGY BERHAD ANNUAL REPORT 2009 statutory declaration pursuant to section 169(16) of the companies act, 1965 I, YEOH SOOK KENG, being the officer primarily responsible for the financial management of TRC SYNERGY BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out on pages 32 to 80 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, l960. Subscribed and solemnly declared by the abovenamed YEOH SOOK KENG at Kuala Lumpur in the Federal Territory on 29 April YEOH SOOK KENG Before me, MOHAN A. S. MANIAM Commissioner for Oath No. W521

32 TRC SYNERGY BERHAD ANNUAL REPORT independent auditors report to the members of TRC Synergy Berhad REPORT ON THE FINANCIAL STATEMENTS We have audited the financial statements of TRC Synergy Berhad which comprise the balance sheets as at 31 December 2009 of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 32 to 80. Directors Responsibility for the Financial Statements The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with the applicable Financial Reporting Standards in Malaysia and the Companies Act, This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. 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 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 Company s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements have been properly drawn up in accordance with the applicable Financial Reporting Standards in Malaysia and the Companies Act, 1965 so as to give a true and fair view of the financial position of the Group and of the Company as of 31 December 2009 and of their financial performance and cash flows for the financial year then ended. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following: (a) (b) (c) (d) 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 all the subsidiaries of which we have not acted as auditors, which are indicated in Note 17 to the financial statements. 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. The auditors reports on the financial statements of the subsidiaries were not subject to any qualification or any adverse comment required to be made under Section 174(3) of the Act.

33 31 TRC SYNERGY BERHAD ANNUAL REPORT 2009 independent auditors report to the members of TRC Synergy Berhad (cont d) 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. KUMPULAN NAGA A.F. No Chartered Accountants (M) T. NAGARAJAN KMN No: 824/04/12 (J) Kuala Lumpur, Malaysia Date: 29 April 2010

34 TRC SYNERGY BERHAD ANNUAL REPORT income statements for the year ended 31 December 2009 Group Company Note Continuing Operations Revenue 3 533,808, ,662,748 19,030,363 10,345,293 Cost of sales 4 (475,239,753) (663,091,423) (3,316,774) (2,654,448) Gross profit 58,568,916 77,571,325 15,713,589 7,690,845 Other income 5 7,919,293 8,040,043 1,985,381 3,269,872 Administrative expenses (25,397,797) (19,221,409) (6,738,717) (2,463,144) Selling and marketing expenses Operating profit 41,090,412 66,389,959 10,960,253 8,497,573 Finance costs 6 (1,777,648) (4,661,520) (1,056,338) (3,692,951) Share of loss of associate (534,642) (368,042) - - Profit before tax 7 38,778,122 61,360,397 9,903,915 4,804,622 Income tax expense 10 (11,484,575) (15,722,756) (3,362,783) (1,676,304) Profit for the year 27,293,547 45,637,641 6,541,132 3,128,318 Attributable to: Equity holders of the Company 27,293,547 45,637,641 6,541,132 3,128,318 Minority interests ,293,547 45,637,641 6,541,132 3,128,318 Earning per share attributable to equity holders of the Company (sen) - Basic, for profit for the year Diluted, for profit for the year The accompanying notes form an integral part of the financial statements.

35 33 TRC SYNERGY BERHAD ANNUAL REPORT 2009 balance sheets as at 31 December 2009 ASSETS Group Company Restated Note NON-CURRENT ASSETS Investment properties 12 10,700,500 6,186, Prepaid land lease payment , , Property, plant and equipment 14 18,563,455 26,503, Properties held for development 15 19,957,924 19,957, Intangible assets 16 9,177 83,333-83,333 Investment in Subsidiaries ,420,640 61,747,808 Investment in Associate 18 12,679,481 6,521, Other investments 19 31,298,684 24,655,702-4,000,000 Other receivables ,163, ,077,537 Deferred tax assets ,907 34,316 93,709,222 84,413, ,605, ,942,994 CURRENT ASSETS Property development costs 15 9,172,374 14,788, Inventories 20 2,634, , Trade and other receivables ,080, ,438,132 11,988 27,519 Cash and bank balances ,947, ,817, ,862 3,141, ,834, ,980, ,850 3,169,499 Non-current asset classified as held for sale 25 10,711, ,546, ,980, ,850 3,169,499 TOTAL ASSETS 447,255, ,394, ,938, ,112,493 EQUITY AND LIABILITIES Equity attributable to equity holders of the Company Share capital ,623, ,577, ,623, ,577,479 Share premium 26 10,350-10,350 - ICULS - equity component 27 1,022,017 1,022,700 1,022,017 1,022,700 Other reserves ,064 (7,633) - - Retained earnings 29 95,038,051 76,274,736 10,870,401 12,860,459 Total equity 286,342, ,867, ,526, ,460,638 NON-CURRENT LIABILITIES ICULS - liability component 27 74, ,256 74, ,256 Borrowings 30 6,376,841 7,613, Deferred tax liabilities , , ,174,785 7,981,776 74, ,256 CURRENT LIABILITIES Borrowings 30 2,694,413 65,801,075-40,000,000 Trade and other payables ,889, ,599, , ,302 Current tax payable 2,153,296 9,145,682 68,360 51, ,737, ,545, ,830 40,527,599 Total liabilities 160,912, ,527, ,461 40,651,855 TOTAL EQUITY AND LIABILITIES 447,255, ,394, ,938, ,112,493 The accompanying notes form an integral part of the financial statements.

36 TRC SYNERGY BERHAD ANNUAL REPORT statement of change in equity- group for the year ended 31 December Attributable to Equity Holders of the Company Non-Distributable Distributable Share Capital Share Premium ICULS (Equity Component) Other Reserves Retained Earnings Total Minority Interest Total Equity Note (Note26) (Note26) (Note27) (Note28) (Note29) At 1 January ,577,479-1,022,700 (7,633) 76,274, ,867, ,867,282 Issue of ordinary shares pursuant to : Bonus issue Warrants ESOS 45,000 10, ,350-55,350 ICULS ICULS adjustment (160) Arising during the year ,674-8,674-8,674 Revaluation reserves , , ,023 Equity component of ICULS - - (683) - - (683) - (683) Acquisition of subsidiary Profit for the year ,293,547 27,293,547-27,293,547 Dividends (8,531,030) (8,531,030) - (8,531,030) Expenditure written off At 31 December ,623,439 10,350 1,022, ,064 95,038, ,342, ,342,921 At 1 January ,803,133 6,535,663 15,241,344 2,127 61,007, ,589, ,589,653 Issue of ordinary shares pursuant to : Bonus issue 31,588,246 (7,048,202) - - (24,540,044) Warrants 292, , ,400 ESOS 1,241, , ,825,005-1,825,005 ICULS 16,644, ,644,200-16,644,200 ICULS adjustment 8, (8,000) Arising during the year (9,760) - (9,760) - (9,760) Equity component of ICULS - - (14,218,644) - - (14,218,644) - (14,218,644) Profit for the year ,637,641 45,637,641-45,637,641 Dividends (5,822,247) (5,822,247) - (5,822,247) Expenditure written off - (70,966) (70,966) - (70,966) At 31 December ,577,479-1,022,700 (7,633) 76,274, ,867, ,867,282 The accompanying notes form an integral part of the financial statements.

37 35 TRC SYNERGY BERHAD ANNUAL REPORT 2009 statement of change in equity- company for the year ended 31 December 2009 Share Capital Non-Distributable Distributable Share Premium ICULS (Equity Component) Retained Earnings Total Equity Note (Note 26) (Note 26) (Note 27) (Note 29) At 1 January ,577,479-1,022,700 12,860, ,460,638 Profit for the year ,541,132 6,541,132 Dividends (8,531,030) (8,531,030) Issue of ordinary shares pursuant to : Bonus Issue Warrants ESOS 45,000 10, ,350 ICULS ICULS Adjustment (160) - Equity component of ICULS - - (683) - (683) Expenditure written off At 31 December ,623,439 10,350 1,022,017 10,870, ,526,207 At 1 January ,803,133 6,535,663 15,241,344 40,102, ,682,572 Profit for the year ,128,318 3,128,318 Dividends (5,822,247) (5,822,247) Issue of ordinary shares pursuant to : Bonus Issue 31,588,246 (7,048,202) - (24,540,044) - Warrants 292, ,400 ESOS 1,241, , ,825,005 ICULS 16,644, ,644,200 ICULS Adjustment 8, (8,000) - Equity component of ICULS - - (14,218,644) - (14,218,644) Expenditure written off - (70,966) - - (70,966) At 31 December ,577,479-1,022,700 12,860, ,460,638 The accompanying notes form an integral part of the financial statements.

38 TRC SYNERGY BERHAD ANNUAL REPORT cash flow statement for the year ended 31 December 2009 Group Company Note CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation 38,778,122 61,360,397 9,903,915 4,804,622 Adjustments for :- Bad debts written off 770, Investment written off 4,000,000-4,000,000 - Unrealised loss/(gain) on foreign exchange (1,167,251) 311,823 (940,365) - Share of loss from joint venture Dividend income (371) (593) (13,333,333) (6,520,270) Doubtful advances written off - 309, ,012 (Gain)/Loss on disposal of a subsidiary - (185,884) - 8,229 Preliminary expenses written off 5, Expenditure written off to share premium - (70,966) - (70,966) Finance cost on ICULS 10, ,021 10, ,021 Amortisation of expenditure carried forward 83, ,000 83, ,000 Exchange reserve arising due to retranslation of financial statements in foreign currency (8,674) 6, Depreciation of property, plant and equipment 4,748,362 5,393, Amortisation of leasehold land 5,891 5, Gain on disposal of property, plant and equipment (1,346,664) (735,759) - - Share of results of associates 534, , Interest expense 1,501,572 3,971,191 1,044,986 3,268,932 Interest income (3,215,754) (4,655,429) (1,044,986) (3,268,932) Property, plant and equipment written off 371,932 5, OPERATING PROFIT/(LOSS) BEFORE WORKING CAPITAL CHANGES 45,071,323 66,705,183 (276,110) (847,352) Inventories (1,697,387) 86, Receivables 13,583,015 (34,386,661) 955,896 (293,562) Payables 48,283,092 28,181,940 (265,693) (865,571) Property development project costs 5,616,044 8,889, Asset held for sale (10,711,723) Cash generated from/(used in) operations 100,144,364 69,476, ,093 (2,006,485) Taxation paid (18,040,494) (15,787,580) (3,333,334) (1,708,214) Interest paid (1,501,572) (3,971,191) (3,268,932) (3,268,932) Interest received 3,215,754 4,655,429 3,268,932 3,268,932 Net cash generated from/(used in) operating activities 83,818,052 54,372,864 (2,919,241) (3,714,699)

39 37 TRC SYNERGY BERHAD ANNUAL REPORT 2009 cash flow statement for the year ended 31 December 2009 (cont d) Group Company Note CASH FLOWS FROM INVESTING ACTIVITIES Dividend received ,000,000 4,825,000 Associate company (6,692,858) 7, Additional investment in subsidiaries - - (7,672,832) - Purchase of investment properties (4,514,000) Purchase of investment (10,642,982) (18,315,086) - - Purchase of property, plant and equipment (3,455,901) (13,584,877) - - Proceeds from disposal of property, plant and equipment 2,206, , Other receivables ,247,599 5,408,290 Acquisition of additional interest in subsidiary 17 (908) Net cash (used in)/generated from investing activities (23,099,674) (31,025,823) 48,574,767 10,233,290 CASH FLOWS FROM FINANCING ACTIVITIES Disposal of a subsidiary - 168,314-1 Proceeds from exercise of warrants - 292, ,400 Proceeds on share premium from ESOS exercised 10, ,505 10, ,505 Proceeds from ESOS exercised 45,000 1,241,500 45,000 1,241,500 Fixed deposits 4,040,656 (13,590,768) - - Proceeds/(Repayment) of short term borrowings (49,326,072) 29,175,969 (40,000,000) - Repayment from long term borrowings (1,236,899) (39,512,931) - - Dividend paid (8,531,030) (5,822,215) (8,531,994) (5,822,808) Net cash (used in)/generated from financing activities (54,997,995) (27,464,226) (48,476,644) (3,705,402) Net increase/(decrease) in cash and cash equivalents 5,720,383 (4,117,185) (2,821,118) 2,813,189 Effects of foreign exchange rate changes 231,022 (311,823) - - Cash and cash equivalents at the beginning of the year 139,483, ,912,086 3,141, ,791 Cash and cash equivalents at the end of the year ,434, ,483, ,862 3,141,980 The accompanying notes form an integral part of the financial statements.

40 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December CORPORATE INFOATION The principal activities of the Company are investment holding, general contractors for supplying labour and provision of corporate, administrative and financial support services to its subsidiaries. The principal activities of the subsidiaries are disclosed in Note 17 to the financial statements. The number of employees of the Company as at year end is 40 (2008: 51). The number of employees of the Group as at year end is 641 (2008: 589). The Company is a public limited liability company, incorporated and domiciled in Malaysia. The Company is listed on the Main Market of Bursa Malaysia Securities Berhad and produces financial statements available for the public use. The registered office and principal place of business of the Company is located at TRC Business Centre, Jalan Andaman Utama, Ampang, Selangor Darul Ehsan. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 29 April SIGNIFICANT ACCOUNTING POLICIES 2.1 BASIS OF PREPARATIONS OF FINANCIAL STATEMENTS The financial statements of the Group and of the Company have been prepared in accordance with the provisions of the Companies Act, 1965 and the applicable Financial Reporting Standards in Malaysia. The financial statements have been prepared under the historical cost convention except as disclosed in the summary of significant accounting policies. The financial statements are presented in Ringgit Malaysia (). The preparation of financial statements in conformity with Financial Reporting Standards, requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of the revenue and expenses during the reported period. It also requires Directors to exercise their judgement in the process of applying the Company s accounting policies. Although these estimates and judgement are based on the Directors best knowledge of current events and actions, actual results may differ. 2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Subsidiaries and Basis of Consolidation (i) Subsidiaries Subsidiaries are entities over which the Group has the ability to control the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity. In the Company s separate financial statements, investments in subsidiaries are stated at cost less any impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss. (ii) Basis of Consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the balance sheet date. The financial statements of the subsidiaries are prepared for the same reporting date as the Company.

41 39 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT D) (a) Subsidiaries and Basis of Consolidation (cont d) (ii) Basis of Consolidation (cont d) Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. In preparing the consolidated financial statements, intragroup balances, transactions and unrealised gains or losses are eliminated in full. Uniform accounting policies are adopted in the consolidated financial statements for like transactions and events in similar circumstances. Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method of accounting involves allocating the cost of the acquisition to the fair value of the assets acquired and liabilities and contingent liabilities assumed at the date of acquisition. The cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the acquisition. Any excess of the cost of the acquisition over the Group s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities represents goodwill. Any excess of the Group s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in profit or loss. (b) Intangible Assets Intangible assets with indefinite useful lives are not amortised but tested for impairment annually or more frequently if the events or changes in circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. The useful life of an intangible asset with an indefinite life is also reviewed annually to determine whether the useful life assessment continues to be supportable. (c) Property, Plant and Equipment (i) Cost All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Subsequent to recognition, property, plant and equipment except for freehold land are stated at cost less accumulated depreciation and any accumulated impairment losses. Certain freehold and leasehold land and buildings are stated at revalued amount, which is the fair value at the date of the revaluation less any accumulated impairment losses. Fair value is determined from market-based evidence by appraisal that is undertaken by professionally qualified valuers. Revaluations are performed with sufficient regularity to ensure that the fair value of a revalued asset does not differ materially from that which would be determined using fair values at the balance sheet date. Any revaluation surplus is credited to the revaluation reserve included within equity, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss to the extent of the decrease previously recognised. A revaluation deficit is first offset against unutilised previously recognised revaluation surplus in respect of the same asset and the balance is thereafter recognised in profit or loss. Upon disposal or retirement of an asset, any revaluation reserve relating to the particular asset is transferred directly to retained earnings.

42 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT D) (c) Property, Plant and Equipment (cont d) (ii) Depreciation and Residual Value Freehold land has an unlimited useful life and therefore is not depreciated. Buildings-in-progress are also not depreciated as these assets are not available for use. Depreciation of other property, plant and equipment is provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful life, at the following annual rates : Renovation 10% Buildings 2% Plant, machinery and tools 10% Furniture and fittings 10% Motor vehicles 20% Office equipment and computers 20% Telecommunication equipment 20% The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment. (iii) Impairment At each balance sheet date, the Group assesses whether there is any indication of impairment. If such indication exists, an analysis is performed to assess whether the carrying value of the assets is fully recoverable. A write down is made if the carrying value exceeds the recoverable amount (see significant policies note 2.2(f) on impairment of non-financial assets). (iv) Gains or Losses on Disposal Gains or losses on disposal are determined by comparing the proceeds with the carrying amount of the related asset and are included in the Income Statement. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognised in income statement and the unutilised portion of the revaluation surplus on that item is taken directly to retained earnings. (d) Financial Instruments Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the instrument. 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 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. (i) Cash and Cash Equivalents Cash and cash equivalents comprise cash and bank balances, demand deposits and short-term, highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value, against which bank overdrafts, if any, is deducted.

43 41 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT D) (d) Financial Instruments (cont d) (ii) Trade Receivables Trade receivables are carried at anticipated realisable value. Bad debts are written off and specific allowances are made for trade receivables considered to be doubtful of collection. The allowances is established when there is objective evidence that the Group and the Company will not be able to collect all amounts due according to the original terms of receivables. (iii) Trade Payables Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received. (iv) Interest Bearing Loans and Borrowings All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. (v) Equity Instruments Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared. (vi) Irredeemable Convertible Unsecured Loan Stocks ( ICULS ) The ICULS are regarded as compound financial instruments, consisting of a liability component and an equity component. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible borrowings. The difference between the proceeds of issue of the ICULS and the fair value assigned to the liability component, representing the conversion option is included in equity. The liability component is subsequently stated at amortised cost using the effective interest rate method until extinguished on conversion, whilst the value of the equity component is not adjusted in subsequent periods. Under the effective interest rate method, the interest expense on the liability component is calculated by applying the prevailing market interest rate for a similar non-convertible borrowings to the instrument at the date of issue. The difference between this amount and the interest paid is added to the carrying amount of the ICULS. (vii) Warrants Warrants issued in conjunction with the Rights Issue in financial year ended 31 December 2007 are not recognised on the date of issue. The issue of ordinary shares upon exercise of the warrant are treated as new subscription of ordinary shares for the consideration equivalent to the exercise price of the warrants. (e) Construction Contracts Where the outcome of a construction contract can be reliably estimated, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs. Where the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.

44 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT D) (e) Construction Contracts (cont d) When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. When the total of costs incurred on construction contracts plus, recognised profits (less recognised losses), exceeds progress billings, the balance is classified as amount due from customers on contracts. When progress billings exceed costs incurred plus, recognised profits (less recognised losses), the balance is classified as amount due to customers on contracts. (f) Impairment of Non-Financial Assets Assets that have an indefinite useful life are not subject to amortisation and are tested for impairment annually, and as and when events or circumstances occur indicating that an impairment may exist. Property, plant and equipment and other non-current assets, including intangible assets with definite useful life, are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset s fair value less cost to sell and value-in-use. For the purpose of assessing impairment, assets are grouped at the lowest level for which there is separately identifiable cash flows (cash-generating units). Assets other than goodwill that suffered an impairment are reviewed for possible reversal at each reporting date. The impairment loss is charged to Income Statement unless it reverses a previous revaluation in which case it is charged to the revaluation surplus. Impairment losses on goodwill are not reversed. In respect of other assets, any subsequent increase in recoverable amount is recognised in the Income Statement unless it reverses an impairment loss on revalued assets in which case it is taken to revaluation surplus. (g) Inventories Inventories are stated at lower of cost and net realisable value. Cost is determined using the first in, first out method. The cost of raw materials comprises costs of purchase. The costs of finished goods and work-in-progress comprise costs of raw materials, direct labour, other direct costs and appropriate proportions of manufacturing overheads based on normal operating capacity. The cost of unsold properties comprises cost associated with the acquisition of land, direct costs and appropriate proportions of common costs. Net realisable value represents the estimated selling price in the ordinary course of business, less all estimated costs of completion and applicable variable selling expenses. In arriving at the net realisable value, due allowances is made for all obsolete and slow moving items. (h) Land Held for Property Development and Property Development Costs (i) Land Held for Property Development Land held for property development consists of land where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Such land is classified within non-current assets and is stated at cost less any accumulated impairment losses. Land held for property development is reclassified as development properties at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle. (ii) Property Development Costs Property development costs comprise all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities.

45 43 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT D) (h) Land Held for Property Development and Property Development Costs (cont d) (ii) Property Development Costs (cont d) When the financial outcome of a development activity can be reliably estimated, property development revenue and expenses are recognised in the income statement by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs. `Where the financial outcome of a development activity cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable will be recoverable, and property development costs on properties sold are recognised as an expense in the period in which they are incurred. Any expected loss on a development project, including costs to be incurred over the defects liability period, is recognised as an expense immediately. Property development costs not recognised as an expense are recognised as an asset, which is measured at the lower of cost and net realisable value. The excess of revenue recognised in the income statement over billings to purchasers is classified as accrued billings within trade receivables and the excess of billings to purchasers over revenue recognised in the income statement is classified as progress billings within trade payables. (i) Leases (i) Classification A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental to ownership. Leases of land and buildings are classified as operating or finance lease in the same way as leases of other assets and the land and buildings elements of a lease of land and buildings are considered separately for the purposes of lease classification. All leases that do not transfer substantially all the risks and rewards are classified as operating leases. (ii) Finance Leases - the Company as Lessee Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation and impairment losses. The corresponding liability is included in the balance sheet as borrowings. In calculating the present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it is practicable to determine; otherwise, the Group s incremental borrowing rate is used. Any initial direct costs are also added to the carrying amount of such assets. Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised in the income statement over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period. The depreciation policy for leased assets is in accordance with that for depreciable property, plant and equipment as described in Note 2.2(c).

46 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT D) (i) Leases (cont d) (iii) Operating Leases - the Company as Lessee Operating lease payments are recognised as an expense on a straight -line basis over the term of the relevant lease. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight -line basis. In the case of a lease of land and buildings, the minimum lease payments or the up-front payment made are allocated, whenever necessary, between the land and the buildings elements in proportion to the relative fair values for leasehold interests in the land element and buildings element of the lease at the inception of the lease. The up-front payment represents prepaid lease payments and are amortised on a straight-line basis over the lease term. (j) Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. (k) Investment Properties Investment properties are properties which are held either to earn rental income or for capital appreciation or for both. Such properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value. Fair value is arrived at by reference to market evidence of transaction prices for similar properties and is performed by registered independent valuers having an appropriate recognised professional qualification and recent experience in the location and category of the properties being valued. 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 either they have been disposed off or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in profit or loss in the year in which they arise. (l) Income Tax Income tax on the profit or loss 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 year and is measured using the tax rates that have been enacted at the balance sheet date. Deferred tax is provided for, using the liability method. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

47 45 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT D) (l) Income Tax (cont d) Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised as income or an expense and included in the profit or loss for the period, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also recognised directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or the amount of any excess of the acquirer s interest is the net fair value of the acquiree s identifiable assets, liabilities and contingent liabilities over the cost of the combination. (m) Employee Benefits (i) Short Term Benefits Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term nonaccumulating compensated absences such as sick leave are recognised when the absences occur. (ii) Defined Contribution Plans Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognised as an expense in the profit or loss as incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund ( EPF ). (n) Foreign Currencies (i) Functional and Presentation Currency The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates ( the functional currency ). The consolidated financial statements are presented in Ringgit Malaysia ( ), which is also the Company s functional currency. (ii) Foreign Currency Transactions In preparing the financial statements of the individual entities, transactions in currencies other than the entity s functional currency (foreign currencies) are recorded in the functional currencies using the exchange rates prevailing at the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not translated. Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are included in profit or loss for the period except for exchange differences arising on monetary items that form part of the Group s net investment in foreign operation. These are initially taken directly to the foreign currency translation reserve within equity until the disposal of the foreign operations, at which time they are recognised in profit or loss. Exchange differences arising on monetary items that form part of the Group s net investment in foreign operations are recognised in profit or loss in the Company s separate financial statements or the individual financial statements of the foreign operation, as appropriate.

48 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT D) (n) Foreign Currencies (cont d) (ii) Foreign Currency Transactions (cont d) Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity. (iii) Foreign Operations The results and financial position of foreign operations that have a functional currency different from the presentation currency () of the consolidated financial statements are translated into as follows : - Assets and liabilities for each balance sheet presented are translated at the closing rate prevailing at the balance sheet date; - Income and expenses for each income statement are translated at average exchange rates for the year, which approximates the exchange rates at the dates of the transactions; and - All resulting exchange differences are taken to the foreign currency translation reserve within equity. The principal exchange rates used for every unit of foreign currency ruling at the balance sheet date are as follows : United States Dollar Euro Brunei Dollar Australian Dollar (o) Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: (i) Sale of Properties Revenue from sale of properties is accounted for by the stage of completion method. (ii) Construction Contracts Revenue from construction contracts is accounted for by the stage of completion method. (iii) Sale of Goods Revenue is recognised net of sales taxes and upon transfer of significant risks and rewards of ownership to the buyer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods. (iv) Rental Income Rental income is recognised on an accrual basis.

49 47 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT D) (o) Revenue Recognition (cont d) (v) Interest Income Interest income is accrued on a time basis, by reference to the principal outstanding and at effective interest rate applicable, which is the rate that exactly discount estimated future cash receipts through the expected life of the financial asset to that asset s net carrying amount. (vi) Dividend Income Dividend income is recognised when the Group s right to receive payment is established. (vii) Management Fees Management fees are recognised when services are rendered. (p) Share Based Payments The Group and the Company recognised an increase in share capital and share premium when the options were exercised. (q) Investments (i) Subsidiaries and Associates The investments in subsidiaries and associates are shown at cost. Where an indication of impairment exists, the carrying value of the investment is assessed and written down immediately to its recoverable amount. (see significant accounting policy note 2.2. (f) on impairment of non-financial assets). On disposal of an investment, the difference between net disposal proceeds and the carrying amount is charged or credited to the Income Statement. (ii) Other Non-current Investments Other non-current investments are shown at cost and an allowances for diminution in value other than temporary is made for each non current investment individually where, in the opinion of the Directors, there is a decline other than temporary in the value of the investments, and recognised as an expense in the financial year in which the decline is identified. (r) Share capital (a) Classification Ordinary share with discretionary dividend are classified as equity. Other shares are classified as equity and/or liability according to the economic substance of the particular instrument. Distribution to holders of a financial instrument classified as an equity instrument is charged directly to equity. (b) Share Issue Costs Incremental external costs directly attributable to the issuance of new shares or options are shown in equity as a deduction, net of tax from the proceeds. (c) Dividend to Shareholders of the Company Dividends are recognised as an equity in the period in which they are declared.

50 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 2. SIGNIFICANT ACCOUNTING POLICIES (CONT D) 2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT D) (s) Impairment of Assets At each balance sheet date, the Company reviews the carrying amounts of its assets (other than inventories, deferred tax assets, assets arising from employee benefits and financial assets which are reviewed pursuant to the relevant accounting policies) to determine whether there are any indications that those assets have suffered an impairment loss. If any such indication exists, impairment is measured by comparing the carrying values of the assets with their recoverable amounts. Recoverable amount is the higher of net selling price and value in use, which is measured by reference to discounted future cash flows. Recoverable amounts are estimated for individual assets or, if it is possible, for the cash-generating unit to which the asset belongs. An impairment loss is charged to the income statement immediately, unless the asset is carried at revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of any available previously recognised revaluation surplus for the same asset. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. The reversal 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 the income statement immediately, unless the asset is stated at revaluation, in which case it is taken to revaluation surplus. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense in the income statement, a reversal of that impairment loss is recognised in the income statement. 2.3 STANDARDS, AMENDMENTS TO FRS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE At the date of authorisation of these financial statements, the following new FRS, Amendments to FRS and Interpretations were issued and have not been applied by the Group and the Company : FRS, Amendments to FRS and Interpretations Effective for Financial Periods Beginning On or After FRS 1 First-time Adoption of Financial Reporting Standards (revised) (Limited Exemption from Comparative FRS 7 Disclosures for First Time Adopters) 1 July 2010 FRS 2 Share Based Payment Vesting Conditions & Cancellations 1 January 2010 FRS 3 Business Combinations (revised) 1 January 2010 FRS 7 Financial Instruments : Disclosures 1 January 2010 FRS 101 Presentation of Financial Statements (revised) 1 January 2010 FRS 127 Consolidated and Separate Financial Statement (revised) 1 July 2010 FRS 139 Financial Instruments : Recognition and Measurement 1 January 2010 Amendment to FRS 1 First-time Adoption of Financial Reporting Standards 1 January 2010 Amendment to FRS 2 Share - based Payment Vesting Conditions and Cancellations 1 January 2010 Amendment to FRS 3 Business Combinations 1 July 2010 Amendment to FRS 5 Non - current Asset Held for Sale and Discontinued Operations 1 January 2010 Amendment to FRS 7 Financial Instruments : Disclosures & Interpretation 9 Reassessment of Embedded Derivatives 1 January 2010 Amendment to FRS 8 Operating Segments 1 January 2010 Amendment to FRS 101 Presentation of Financial Statements 1 January 2010 Amendment to FRS 107 Statement of Cash Flows 1 January 2010 Amendment to FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors 1 January 2010

51 49 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 2.3 STANDARDS, AMENDMENTS TO FRS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE (CONT D) FRS, Amendments to FRS and Interpretations Effective for Financial Periods Beginning On or After Amendment to FRS 110 Event after Balance Sheet Date 1 January 2010 Amendment to FRS 116 Property, Plant and Equipment 1 January 2010 Amendment to FRS 117 Leases 1 January 2010 Amendment to FRS 119 Employee Benefits 1 January 2010 Amendment to FRS 120 Accounting for Government Grant & Disclosure of Government Assistance 1 January 2010 Amendment to FRS 123 Borrowing Costs 1 January 2010 Amendment to FRS 127 Consolidated and Separate Financial Statements 1 January 2010 Amendment to FRS 128 Investments in Associates 1 January 2010 Amendment to FRS 129 Financial Reporting in Hyperinflationary Economies 1 January 2010 Amendment to FRS 131 Interest in Joint Ventures 1 January 2010 Amendment to FRS 132 Financial Instruments : Presentation 1 January 2010 Amendment to FRS 134 Interim Financial Reporting 1 January 2010/ 1 March 2010 Amendment to FRS 136 Impairment of Assets 1 January 2010 Amendment to FRS 138 Intangible Assets 1 January 2010 Amendment to FRS 139 Financial Instruments : Recognition and Measurement 1 January 2010 Amendment to FRS 140 Investment Property 1 January 2010 IC Interpretation 9 Reassessment of Embedded Derivatives 1 January 2010 IC Interpretation 11 FRS to Group & Treasury Share Transactions 1 January 2010 IC Interpretation 12 Service Concession Arrangements 1 July 2010 IC Interpretation 16 Hedges of Net Investment in a Foreign Operation 1 July 2010 IC Interpretation 201 Preliminary and Pre-operating Expenditure 1 January 2010 The directors anticipate that the adoption of these new FRSs, Amendments and IC Interpretations in future period will have no material financial impact on the financial statements of the Group and of the Company upon their initial application except for the changes arising from the adoption of FRS 7 and FRS 139. The Group and the Company is exempted from disclosing the possible impact to the financial statements upon the initial application of FRS 7 and FRS REVENUE Group Company Construction contracts 477,546, ,307, Sales of construction materials and others 50,458,202 79,033, Development revenue 1,100,781 9,019, Rental of motor vehicle and machinery 4,198,486 5,138, Servicing of motor vehicle 504, , Rendering of services - - 3,357,030 2,805,023 Dividend income from subsidiaries ,333,333 6,520,270 Management fees from subsidiaries - - 2,340,000 1,020, ,808, ,662,748 19,030,363 10,345,293

52 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 4. COST OF SALES Group Company Construction contract costs 423,771, ,413, Sales of construction materials and others 47,733,074 73,112, Property development costs 418,608 13,910, Cost of services rendered 3,316,775 2,654,448 3,316,774 2,654, ,239, ,091,423 3,316,774 2,654,448 Included in the property development costs is interest on bridging loan amounting 18,571 (2008: 413,456). 5. OTHER INCOME Group Company Gain on disposal of a subsidiary - 185, Interest from subsidiary company - - 1,044,986 3,268,932 Gain on disposal of property, plant and equipment 1,346, , Interest income 3,215,754 4,655, Rental income 325, , Dividend income on equity investment, quoted in Malaysia Miscellaneous 3,030,866 2,130, , ,919,293 8,040,043 1,985,381 3,269, FINANCE COSTS Included in finance costs are : Group Company Interest on irredeemable convertible unsecured loan stocks (ICULS) 10, ,021 10, ,021 Bank overdraft interest 43,284 56, Al - Bai Bithaman Ajil profit rate 280, , Hire purchase interest 130, , Bankers acceptance interest 2,428 9, Loan interest - others 538 2, Interest on unsecured term loan 1,044,986 3,268,932 1,044,986 3,268,932

53 51 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 7. PROFIT BEFORE TAXATION Profit before tax has been arrived at after charging/(crediting) : Group Company Amortisation charges 83, ,000 83, ,000 Directors' remuneration 2,213,740 2,035, Auditors' remuneration - statutory audit 109, ,300 13,000 12,000 - other services 8,838 19,350 8,838 19,350 Depreciation of property, plant and equipment 4,748,362 5,393, Property, plant and equipment written off 371,932 5, Rental of premises 842,281 1,083, Doubtful advances written off - 309, ,012 Rental of vehicle, heavy machinery and equipment 980, ,670 40,000 - Amortisation of prepaid land lease payments 5,891 5, Bad debts written off 770, Unrealised loss/(gain) on foreign exchange (1,167,251) 311,823 (940,365) - Employees benefits expense 26,762,144 24,016,674 5,558,773 4,136,360 Non - executive directors remuneration 84, ,000 84, ,000 Loss on termination of project - 42, Investment written off 4,000,000-4,000,000 - Preliminary expenses written off 5, EMPLOYEE BENEFITS EXPENSES Group Company Wages and salaries 24,493,705 22,012,193 5,024,800 3,737,164 Social security contributions 172, ,162 20,730 22,564 Contributions to defined contribution plan 2,096,418 1,824, , ,632 26,762,144 24,016,674 5,558,773 4,136,360 Included in employee benefits expense of the Group and of the Company are executive directors remuneration amounting to 2,213,740 (2008: 2,035,884) and NIL (2008: NIL) respectively as further disclosed in Note 9.

54 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 9. DIRECTORS REMUNERATION Group Company Executive directors remuneration (Note 8): Salary 1,284,400 1,185, Other emoluments 929, , ,213,740 2,035, Non-executive directors remuneration (Note 7) : Fees 84, ,000 84, ,000 Other emoluments - Bonus , ,000 84, ,000 The number of directors of the Company whose total salary during the year fell within the following bands is analysed below : Number of Directors Executive directors: 850, , , , Non-Executive directors: 20,000-30, ,000-40, INCOME TAX EXPENSE Group Company Continuing operations Current income tax 11,119,343 16,940,002 3,350,065 1,648,875 Foreign taxation 17, Transferred from/(to) deferred taxation (Note 31) 479,510 (1,200,583) 12,386 23,904 (Over)/under provision in prior years: Malaysian income tax (132,094) (16,663) 332 3,525 Total income tax expense 11,484,575 15,722,756 3,362,783 1,676,304 Current income tax is calculated at the statutory tax rate of 25% (2008: 26%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. During the current financial year, the income tax rate applicable to subsidiaries in Australia is at 30%. Subject to the agreement of the Inland Revenue Board, the Company has unabsorbed losses of approximately 78,758 (2008: 78,758) as at 31 December 2009 for offsetting against future taxable income.

55 53 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 10. INCOME TAX EXPENSE (CONT D) A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows: Group Profit before taxation 38,778,122 61,360,397 Taxation at Malaysian statutory tax rate of 20% and 25% (2008: 20% and 26%) 9,944,626 15,948,355 Foreign tax 17,816 - Overprovision in prior years (132,094) (16,663) Effect of changes in tax rates 25,049 11,839 Income not subject to tax (314,499) (155,088) Expenses not deductible for tax purposes 2,322,170 2,734,284 Group relief claim (239,417) (2,174,690) Deferred tax asset not recognised in respect of current year's tax losses 3,645 1,100 Utilisation of previously unabsorbed capital allowance and unrecognised tax losses (142,721) (626,381) Income tax expense for the year 11,484,575 15,722,756 Company Profit before taxation 9,903,915 4,804,622 Taxation at Malaysian statutory tax rate of 25% (2008: 26%) 2,475,979 1,249,202 Group relief claim 37, ,879 Income not subject to tax (235,091) - Under/(Over) provision in prior years 332 3,525 Expenses not deductible for tax purposes 1,084, ,698 Income tax expense for the year 3,362,783 1,676, EARNINGS PER SHARE (a) Basic Basic earnings per share amounts are calculated by dividing profit for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the financial year.

56 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 11. EARNINGS PER SHARE (CONT D) (a) Basic (cont d) Profit attributable to ordinary equity holders of the Company 27,293,547 45,637,641 Weighted average number of ordinary shares in issue 189,593, ,785, sen sen Basic earning per share for: Profit for the year (b) Diluted For the purposes of calculating diluted earnings per share, the profit for the year attributable to ordinary equity holders of the Company and the weighted average number of ordinary shares in issue during the financial year have been adjusted for the dilutive effects of all potential ordinary shares, i.e. Irredeemable Convertible Unsecured Loan Stocks ( ICULS ), Warrants, adjustment on Bonus Issue and share options granted to employees and directors Profit from continuing operations attributable to ordinary equity holders of the Company 27,293,547 45,637,641 After-tax effect of interest on ICULS 7, ,296 Profit attributable to ordinary equity holders of the Company 27,301,302 45,949,937 Weighted average number of ordinary shares in issue 189,593, ,785,454 Effects of dilution : ICULS 1,435,640 1,436,600 Share options 978,489 - Warrants 9,491,253 - Adjusted weighted average number of ordinary shares in issue and issuable 201,498, ,222,054 Diluted earnings per share for : sen sen Profit for the year

57 55 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 12. INVESTMENT PROPERTIES Group At 1 January 6,186,500 6,186,500 Additions - - Transfer from property development cost 4,514,000 - At 31 December 10,700,500 6,186, PREPAID LAND LEASE PAYMENT Group At 1 January 505, ,783 Amortisation for the year (5,891) (5,891) At 31 December 500, ,892 Analysed as : Long term leasehold land 500, ,892 The leasehold land was revalued in 2000 by an independent professional valuer using the open market valuation basis. The leasehold land is amortised over the maximum period of 99 years. Had the land been carried at their historical costs less accumulated depreciation, the carrying amounts of the revalued asset that would have been included in the financial statements at the end of the year is as follows :- Group Leasehold land 475, ,279

58 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 14. PROPERTY, PLANT AND EQUIPMENT At 31 December Group Building Freehold Leasehold Freehold Under Plant and Motor Office Furniture Telecommunication Land Buildings Buildings Construction Machinery Vehicles Equipment and Fittings Renovation Computers Equipment Total Cost/Valuation At 1 January ,186, ,000 1,264,800 6,063,492 44,513,119 16,702,574 1,927, , , ,866 13,877 73,665,145 Revaluation - 185, , ,000 Additions 8,828-1,731, , , , ,965 1,654, ,228,986 Reinstate , ,000 Disposals/Written off / Transfer (114,740) - (804,800) (6,063,492) (3,077,211) (1,014,936) (363,533) (785,280) (1,729,683) (1,410) - (13,955,085) At 31 December ,080,156 1,150,000 2,366,614-41,663,011 16,403,733 2,510, , , ,456 13,877 66,338,046 Accumulated Depreciation At 1 January , ,060-34,059,692 10,353,552 1,481, , ,400 91,592 13,872 47,161,798 Depreciation charge for the year - 19,630 27,779-2,553,318 1,875, ,755 22,852 32,036 2,454-4,748,362 Reinstate , ,000 Revaluation - (183,691) (104,333) (288,024) Disposals/Written off/ Transfer - - (188,915) - (2,545,905) (719,532) (352,437) (17,607) (60,740) (1,409) - (3,886,545) At 31 December ,940 4,591-34,106,105 11,509,558 1,343, , ,696 92,637 13,872 47,774,591 Net Book Value At 31 December ,080,156 1,148,060 2,362,023-7,556,906 4,894,175 1,166, ,299 95,219 7, ,563,455

59 57 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 14. PROPERTY, PLANT AND EQUIPMENT (CONT D) At 31 December Group Building Freehold Leasehold Freehold Under Plant and Motor Office Furniture Telecommunication Land Buildings Buildings Construction Machinery Vehicles Equipment and Fittings Renovation Computers Equipment Total Cost/Valuation At 1 January , ,000 1,264,800 1,025,002 36,820,014 13,252,998 1,941, , ,165 90,472 13,877 56,407,411 Additions 1,071, ,038,490 2,814,072 4,464, ,010 13,000-11,394-13,584,877 Reclassification from assets held for sale ,886, , ,693,671 Disposals/Written off / Transfer (1,007,211) (1,822,433) (186,388) (1,700) (3,080) - - (3,020,812) At 31 December ,186, ,000 1,264,800 6,063,492 44,513,120 16,702,574 1,927, , , ,866 13,877 73,665,147 Accumulated Depreciation At 1 January , ,764-27,078,494 9,776,809 1,489, , ,446 89,859 13,872 39,518,217 Depreciation charge for the year - 19,300 25,296-3,482,924 1,648, ,201 16,075 34,648 1,732-5,393,506 Reclassification from assets held for sale ,405, , ,153,566 Disposals/Written off / Transfer (907,714) (1,819,163) (173,220) (1,698) (1,694) - - (2,903,489) At 31 December , ,060-34,059,694 10,353,552 1,481, , ,400 91,591 13,872 47,161,800 Net Book Value At 31 December ,186, , ,740 6,063,492 10,453,426 6,349, ,775 59, ,685 10, ,503,347

60 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 14. PROPERTY, PLANT AND EQUIPMENT (CONT D) (a) Revaluation Certain freehold land and leasehold land and buildings of a subsidiary company were revalued by an independent professional valuer using the open market valuation basis during the financial year, since the last valuation which was done in year 2000 on certain freehold land and building and leasehold land and buildings of the subsidiary company. The carrying amount of land and buildings were adjusted to reflect the revaluations and the resultant surpluses were credited to revaluation reserve. Had the land and building affected been carried at their historical costs less accumulated depreciation, the carrying amounts of the revalued assets that would have been included in the financial statements at the end of the year are as follows : Freehold land - 330,460 Freehold land and buildings 241,800 1,248,000 Leasehold land and buildings 526, , ,895 2,119,154 (b) Security Certain land and buildings of a subsidiary company with a net carrying value of 281,255 (2008:1,666,581) have been charged to financial institutions as security for various credit facilities granted to the subsidiary company. (c) Assets acquired under hire purchase arrangements The net book value of property, plant and equipment of the Group acquired under hire purchase arrangements are as follows : Plant and machinery 293, ,933 Motor vehicles 3,451,017 5,211,962 3,744,650 5,543, PROPERTIES HELD FOR DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (a) Land Held for Property Development Group Cost Freehold land Freehold land and Building Total At 1 January ,706, ,658 19,957,924 Additions Transfer to property development costs At 31 December ,706, ,658 19,957,924

61 59 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 15. PROPERTIES HELD FOR DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (CONT D) (a) Land Held for Property Development (cont d) Cost At 1 January ,706, ,658 19,957,924 Additions Transfer to property development costs At 31 December ,706, ,658 19,957,924 Certain land held for development amounting to 7,986,266 (2008: 7,986,266) is charged as security for the term loan granted by a financial institution as disclosed in Note 30 to the financial statements. (b) Property Development Costs Group Brought forward - Land 5,943,000 5,579,929 - Development costs 106,877,472 93,417, ,820,472 98,997,726 Incurred during the year - Transfer to property, plant and equipment - (6,035,992) - Reclassification (5,560,534) - - Land - 363,071 - Development costs 2,797,253 19,404,554 - Unsold units transferred to inventories (1,947,817) - 108,109, ,729,359 Recognised in income statement Brought forward (97,940,941) (75,025,436) Current year (996,059) (22,915,505) (98,937,000) (97,940,941) Total 9,172,374 14,788,418 Included in property development cost incurred during the financial year is profit rate amounting to 200,000 (2008 : NIL).

62 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 16. INTANGIBLE ASSETS Group/Company Expenditure Carried forward Goodwill Total At 1 January ,333-83,333 Acquisition of subsidiary (Note 17) - 9,177 9,177 Amortisation (83,333) - (83,333) At 31 December ,177 9,177 At 1 January , ,333 Amortisation (200,000) - (200,000) At 31 December ,333-83, INVESTMENT IN SUBSIDIARIES Group Company Unquoted shares, at cost ,420,640 61,747,808 (a) The details of the subsidiary companies are as follows :- Country of Incorporation Effective Interest (%) Held by the Company : Principal Activities Trans Resources Corporation Sdn. Bhd. Malaysia Construction TRC Land Sdn. Bhd. Malaysia Property development TRC Energy Sdn. Bhd. Malaysia Oil and gas TRC Infra Sdn. Bhd. Malaysia Dormant * TRC (Aust) Pty Ltd Australia Construction and property development ** TRC International Pte Ltd Malaysia Investment holding Held through Subsidiaries : TRC Development Sdn. Bhd. Malaysia Property development and project management ** TRC Land (Cambodia) Limited Kingdom of Combodia General contractor, trading and project development Liputan Sutera Sdn. Bhd. Malaysia Dormant TRC Concrete Industries Sdn. Bhd. Malaysia Manufacture of ready mixed concrete

63 61 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 17. INVESTMENT IN SUBSIDIARIES (CONT D) Country of Incorporation Effective Interest (%) Held by the Company : Principal Activities ** Petrobru Build Sdn. Bhd. *** ** TRC Construction (Sarawak) Sdn. Bhd. Brunei Darussalam 60 - Dormant Malaysia Construction * The financial statements of TRC (Aust) Pty Ltd have not been audited due to certain exemptions given under the Australian Corporations Act, ** Audited by another firm of auditors. *** The financial statements of TRC International Pte Ltd and Petrobru Build Sdn. Bhd. have not been consolidated with the financial statements of the Group as the Directors are of the opinion that there will be of no real value in view of the insignificant effect on the financial statements of the Group. Acquisition of Subsidiaries As disclosed in the Directors Report of the previous financial year, the Company had on 12 March 2009, acquired one (1) ordinary share of 1.00 each in TRC Infra Sdn. Bhd. for a cash consideration of 1.00 and became a whollyowned subsidiary of the Group. Liputan Sutera Sdn. Bhd. became a wholly-owned subsidiary of the Group upon the acquisition of two (2) ordinary shares of 1.00 each for a cash consideration of 2.00 by Trans Resources Corporation Sdn. Bhd., a wholly-owned subsidiary of the Company on 18 February As a result of the acquisition, Petrobru Build Sdn. Bhd., a company incorporated in Brunei Darussalam and 60% owned by Liputan Sutera Sdn. Bhd., became a subsidiary to the Group. The cost of acquisition comprised the followings : Group Purchase consideration satisfied by cash 3 - Cost attributable to the acquisition, paid in cash - - Total cost of acquisition 3 - The assets and liabilities arising from the acquisition are as follows : Group Cash in hand 3 - Holding company (908) - Other payables (8,269) - Net liability acquired (9,174) - Goodwill on acquisition 9,177 - Total cost of acquisition 3 -

64 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 17. INVESTMENT IN SUBSIDIARIES (CONT D) Acquisition of Subsidiaries (cont d) The cash outflow on acquisition is as follows : Group Purchase consideration satisfied by cash 3 - Costs attributable to the acquisition, paid in cash - - Total cash outflow of the Company 3 - Cash and cash equivalents of subsidiary acquired (3) - Holding company Net cash outflow to the Group On 4 June 2009, the Company incorporated a new wholly-owned subsidiary company, known as TRC (Aust) Pty Ltd, under the Australian Corporations Act This new subsidiary was primarily incorporated to undertake construction and properly development projects in Australia. Further, TRC Land Sdn. Bhd. a wholly owned subsidiary of the Group has incorporated a new wholly owned subsidiary company under the laws of the Kingdom of Cambodia. The company is known as TRC Land (Cambodia) Limited. The certificate of incorporation dated 28 October 2009 was received on 13 November TRC Land (Cambodia) Limited was primarily incorporated as a general contractor, trader and project developer. 18. INVESTMENT IN ASSOCIATE Group Company Unquoted shares, at cost 13,586,946 6,900, Share of post- acquisition reserves : Share of loss of associate (905,744) (371,102) - - Share of exchange reserve (1,721) (7,633) ,679,481 6,521, TRC Land (Cambodia) Limited had on 13 November 2009 executed a Shares Sale Agreement to acquire 26% equity interest in the issued and paid up share capital of a Cambodian incorporated private limited company, Delta Garden Limited for the sum of USD 1,950,000 (6,686,940). The Group also had acquired 2 ordinary shares in Pretty Sally Holdings Pty Ltd on 20 July 2009 through its whollyowned subsidiary, TRC (Aust) Pty Ltd. for a consideration of AUD 2 (6).

65 63 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 18. INVESTMENT IN ASSOCIATE (CONT D) Details of the associates of the Group are as follows :- Name of Company Country of Incorporation Principal Activities Equity Interest Pretty Sally Holdings Pty Ltd Australia Property development 33.33% - Delta Garden Limited Kingdom of Cambodia Property development 26% - PetroBru (B) Sdn. Bhd. Brunei Darussalam Dormant 26% 26% The financial year end of PetroBru (B) Sdn. Bhd. and Pretty Sally Holdings Pty Ltd is on 30 September and 30 June respectively. For the purpose of applying the equity method of accounting, the unaudited financial statements of the associates have been used and appropriate adjustments have been made for the effects of significant transaction between their financial period to 31 December All the associates are audited by another firm of auditors. The summarised financial information in respect of the Group s associates is as follows : Group Total assets 32,093, ,113 Total liabilities (36,006,140) (1,526,093) Net liabilities (3,912,285) (1,406,980) Group's share of associates' net assets 12,679,481 6,521,265 Revenue 4,426,466 - Loss for the year (2,185,077) (1,415,546) Group's share of associates' loss for the year (534,642) (368,042)

66 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 19. OTHER INVESTMENTS At Cost : Group Company Investment in partnership 10,507, Unit trust in Malaysia 20,641,676 20,505, Quoted shares in Malaysia 5,775 5, Corporate membership 144, , Subordinated bonds - KERISMA 0.00% ,000,000-4,000,000 31,298,684 24,655,702-4,000,000 Market Value : Unit trust 21,051,478 20,625, Quoted shares 9,142 7, ,060,620 20,633, Investment in Partnership The Group s wholly-owned subsidiary, TRC (Aust) Pty Ltd had on 20 July 2009 executed a Call and Put Option Deed to acquire 133,334 equal undivided shares out of 400,000 equal undivided shares in a piece of vacant land known as Springridge Estate, 625 Northern Highway, Wallan, Melbourne, Australia for a total consideration of AUD8,000,000 (24,501,600). The consideration shall be satisfied by way of cash through three tranches of payment. As at 31 December 2009, the Group had completed first tranch payment amounting AUD 3,250,000 (10,507,233) plus Goods and Services Tax (GST). 20. INVENTORIES Cost Group Construction materials 74, ,738 Raw materials 173, ,299 Completed properties 2,386,117-2,634, ,037

67 65 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 21. TRADE AND OTHER RECEIVABLES Current Group Company Trade receivables Third parties 105,861, ,367, Related parties 289, , Accrued billings in respect of property development costs - 137, Construction contracts: Due from customers (Note 22) - 6,752, Retention sums (Note 22) 12,506,125 9,460, ,656, ,007, Group Company Other receivables Deposits 827,090 6,546,778 2,300 2,300 Prepayments 185, ,661 9,187 17,500 Tax recoverable 2,655,622 2,614, Other receivables 7,755,356 4,095, ,719 Other receivables, net 11,423,129 13,431,070 11,988 27,519 Total 130,080, ,438,132 11,988 27,519 Non-current Other receivables Amount due from related parties: Subsidiaries ,163, ,077,537 (a) Credit Risk The Group s primary exposure to credit risk arises through its trade receivables. The Group s trading terms with its customers are mainly on credit. The credit period is generally for a period of one month, extending up to three months for major customers. Each customer has a maximum credit limit. The Group seeks to maintain strict control over its outstanding receivables. Overdue balances are reviewed regularly by senior management. In view of the aforementioned and the fact that the Group s trade receivables relate to a large number of diversified customers, there is no significant concentration of credit risk. Trade receivables are non-interest bearing. (b) Amounts Due from Subsidiaries (Non-current) Amount due from subsidiaries are unsecured, non-interest bearing and are repayable on demand except for the amount due from the subsidiary, Trans Resources Corporation Sdn. Bhd. which is subject to interest of 8.15% (2008: 8.15%) per annum.

68 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 22. DUE FROM/(TO) CUSTOMERS ON CONTRACTS Group Construction costs incurred to date 2,180,460,981 2,250,114,494 Attributable profits 225,835, ,879,820 2,406,296,489 2,380,994,314 Less: Provision for foreseeable losses - - 2,406,296,489 2,380,994,314 Less : Progress billings (2,467,626,934) (2,375,595,136) (61,330,445) 5,399,178 Due from customers on contract (Note 21) - 6,752,414 Due to customers on contract (Note 32) (61,330,445) (1,353,236) (61,330,445) 5,399,178 Advances received on contracts, included within trade payables (Note 32) 10,341, ,599 Retention sums on contract, included within trade receivables (Note 21) 12,506,125 9,460, HIRE PURCHASE PAYABLES Group Company Not later than 1 year (Note 30) 1,304,160 2,061, Later than 1 year and not later than 5 years (Note 30) 376,841 1,613, ,681,001 3,675, CASH AND CASH EQUIVALENTS Group Company Cash on hand and at banks 36,312,733 36,545, ,862 3,141,980 Deposits: Short term deposits with licensed banks 57,686,929 92,840, Fixed deposits with licensed banks 106,947,817 83,431, Total cash and cash equivalents 200,947, ,817, ,862 3,141,980 Included in cash at banks of the Group are amounts of 124,604 (2008: 123,127) held pursuant to Section 7A of the Housing Developers (Control and Licensing) Act, 1966 and are restricted from use in other operations. Deposits with other financial institutions of the Group amounting to 55,512,996 (2008: 59,553,652) are pledged as securities for borrowings (Note 30).

69 67 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 24. CASH AND CASH EQUIVALENTS (CONT D) For the purpose of the cash flow statements, cash and cash equivalents comprise the following as at the balance sheet date: Group Company Cash and bank balances 36,312,733 36,545, ,862 3,141,980 Short term deposits with licensed banks 57,686,929 92,840, Fixed deposits with licensed banks 51,434,821 23,878,324 Bank overdrafts - (13,780,590) - - Total cash and cash equivalents 145,434, ,483, ,862 3,141, NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE Group Completed property 10,711, SHARE CAPITAL AND SHARE PREMIUM Number of Ordinary Shares of 1 Each Share Capital (Issued and Fully Paid) Share Capital (Issued and Fully Paid) Amount Share Premium Total Share Capital and Share Premium 1 January ,577, ,577, ,577,479 Ordinary shares issued during the year : Pursuant to Warrants Pursuant to ESOS 45,000 45,000 10,350 55,350 Pursuant to ICULS At 31 December ,623, ,623,439 10, ,633,789 1 January ,803, ,803,133 6,535, ,338,796 Expenditure written off - - (70,966) (70,966) Ordinary shares issued during the year : Pursuant to Warrants 292, , ,400 Pursuant to ESOS 1,241,500 1,241, ,505 1,825,005 Pursuant to ICULS 16,652,200 16,652,200-16,652,200 Bonus Issue 31,588,246 31,588,246 (7,048,202) 24,540,044 At 31 December ,577, ,577, ,577,479

70 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 26. SHARE CAPITAL AND SHARE PREMIUM (CONT D) Number of Ordinary Shares of 1 Each Amount Authorised share capital At 1 January 500,000, ,000, ,000, ,000,000 Created during the year At 31 December 500,000, ,000, ,000, ,000,000 The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company s residual assets. Warrants 2007/2017 A total of 30,800,000 free warrants were issued by the Company in conjunction with the Rights Issue in Each warrant is convertible into one new ordinary share of 1.00 each at the exercise price of 1.00 per ordinary share. Consequential to the Bonus Issue in 2008, the Company had issued an additional 6,101,520 new Warrants 2007/2017 pursuant to the adjustments in accordance with the provision under the Deed Poll executed by the Company on 15 November 2006 constituting the Warrants ( Deed Poll ). No warrants were exercised during the current financial year and a total of 36,609,120 warrants remained outstanding as at 31 December The warrants are valid for a period of ten years and shall expire on 21 January The salient features of the Warrants 2007/2017 are as follows :- (i) (ii) (iii) (iv) (v) 30,800,000 free Warrants are issued in conjunction with the Rights Issue to the Entitled Shareholders on the basis of 1 free Warrant attached to every 1 Rights Share and 1.00 nominal value of ICULS subscribed. The warrants are immediately detached upon issuance and traded on Bursa Malaysia Securities Berhad separately. The warrants are traded in board lots of 100 units each carrying the right to subscribe for 100 new TRCS shares; Each Warrants entitles the registered holders at any time during the exercise period of ten (10) years from the date of first issue of the Warrants to subscribe for one (1) ordinary share of 1.00 at an exercise price of 1.00; The exercise price and/or the number of the Warrants outstanding may be adjusted in accordance with the provisions set out in the Deed Poll; Upon expiry of the exercise period, any unexercised rights will lapsed and ceased to be valid for any purposes; and The new ordinary shares to be allotted and issued upon exercise of the Warrants shall rank pari passu in all respects with the existing ordinary shares of the Company except that they will not be entitled to any dividends, rights, allotments and other distributions the entitlement date of which precedes or falls on the relevant conversion date. 27. IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS On 22 January 2007, the Company issued 30,800,000 nominal value of 5 - year 5% Irredeemable Convertible Unsecured Loan Stocks ( ICULS ) at a nominal value of 1.00 each for working capital purposes. Consequential to the Bonus Issue in 2008, an additional 247,433 new TRC ordinary shares would be issued by the Company upon the full conversion of the existing ICULS pursuant to the adjustments in accordance with the provision under the Trust Deed executed by the Company on 15 November 2006 constituting the ICULS ( Trust Deed ).

71 69 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 27. IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (CONT D) As at 31 December 2009, 29,611,793 ordinary shares have been issued pursuant to the conversion of 29,603,633 nominal amount of ICULS issued at 100% of its nominal value. From the remaining 1,196,367 units unconverted ICULS, an additional 239,273 new TRC ordinary shares would be issued by the Company upon conversion of the existing ICULS. The principal terms of the ICULS are as follows :- (i) (ii) (iii) (iv) (v) (vi) Conversion rights - The registered holders will have the right at any time during the Conversion Period to convert the ICULS into fully paid new TRCS ordinary shares at the Conversion Price. Conversion price and mode - Conversion can be done by surrendering the ICULS with an aggregate nominal value equivalent to the conversion price of 1.00 per share. There will be no cash element involved. Conversion period - The conversion of the ICULS into new ordinary shares of the Company may take place at the option of the holders during the tenure of the ICULS. The ICULS shall bear a coupon rate of 5% per annum payable annually in arrears on 31 December. The ICULS is unsecured and not redeemable for cash. All remaining ICULS at the end of the 5 year tenure shall be automatically and mandatorily converted into new ordinary shares of the Company at the conversion price. The new ordinary shares to be allotted and issued upon conversion of the ICULS shall rank pari passu in all respects with the existing ordinary shares of the Company except that they will not be entitled to any dividends, rights, allotments and other distributions the entitlement date of which precedes or falls on the relevant conversion date. The proceeds received from the issue of the ICULS have been split between the liability component and the equity component, representing the fair value of the conversion option. The ICULS are accounted for in the balance sheets of the Group and of the Company as follows : The movements of the ICULS during the year are as follows : Group/Company Equity Liability Component Component Total Balance at 1 January ,022, ,834 1,203,534 Conversion of ICULS into ordinary shares (683) (49,659) (50,342) Balance at 31 December ,022, ,175 1,153,192 Balance at 1 January ,241,344 3,829,433 19,070,777 Conversion of ICULS into ordinary shares (14,218,644) (3,648,599) (17,867,243) Balance at 31 December ,022, ,834 1,203,534

72 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 27. IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (CONT D) The liability component is further analysed as follows :- Group/Company Current (Note 32) : - not later than one year 56,544 56,578 Non - current - later than one year but not later than five years 74, , , ,834 The interest charged for the year is calculated by applying an effective interest rate of 8% (2008: 8%) to the liability component for the twelve month period since the loan stocks were issued. 28. OTHER RESERVES Group Foreign Currency Asset Translation Revaluation Reserve Reserve Total At 1 January 2009 (7,633) - (7,633) Arising during the year Group 2,762-2,762 Associates 5,912-5,912 Revaluation increase - 648, ,023 At 31 December , , ,064 At 1 January ,127-2,127 Arising during the year Group (1,974) - (1,974) Associates (7,786) - (7,786) Revaluation increase At 31 December 2008 (7,633) - (7,633) (a) Asset Revaluation Reserve The asset revaluation reserve is used to record increases in the fair value of freehold and leasehold land and buildings and decreases to the extent that the such decrease relates to an increase on the same asset previously recognised in equity.

73 71 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 28. OTHER RESERVES (CONT D) (b) Foreign Currency Translation Reserve The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation. 29. RETAINED EARNINGS As at 31 December 2009, the Company has tax exempt profits available for distribution of approximately 5,242,666 (2008: 5,242,666), subject to the agreement of the Inland Revenue Board. Effective 1 January 2008, the Company is given the option to make an irrevocable election to move to a single tier system or continue to use its credit under Section 108 of the Income Tax Act, 1967 for purpose of dividend distribution until the tax credit is fully utilised or latest by 31 December The Company has not opted to move to a single tier system and as a result, the Company can utilise the tax credit balance in the Section 108 of the Income Tax Act, 1967 as at 31 December 2009 to frank the payment of net dividends out of its retained earnings. 30. BORROWINGS Secured : Group Company Short term borrowings Bankers' acceptance 1,390,253 9,958, Bank overdrafts - 13,780, Domestic factoring facilities Hire purchase payables (Note 23) 1,304,160 2,061, Term loan - 40,000,000-40,000,000 2,694,413 65,801,075-40,000,000 Long term borrowings Hire purchase payables (Note 23) 376,841 1,613, Al- Bai Bithaman Ajil term loan 6,000,000 6,000, ,376,841 7,613, Total borrowings 9,071,254 73,414,815-40,000,000 (a) Bank Overdrafts The bank overdrafts of the subsidiary companies are subject to interest at rates ranging from 1.0% to 1.25% (2008: 1.0% to 1.5%) per annum above the banks base lending rates. (b) Bankers Acceptance The bankers acceptance are subject to commissions at rates of approximately 0.75% (2008: 0.75% to 1.0%) per annum and interest rates of 1.5% (2008: 1.5%) per annum above the banks base lending rate.

74 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 30. BORROWINGS (CONT D) (c) Other Short Term Trade Facilities The domestic factoring facility is subject to a flat charge of NIL (2008: 10,000). The above facilities are secured by :- (i) (ii) (iii) (iv) (v) (vi) (vii) Existing Open All Monies Facilities Agreement; Legal Deed of Assignment of Contract Proceeds; Letter of Irrevocable Instruction by the subsidiary; Certain fixed deposits of the subsidiary; A freehold land and building and a leasehold land and building belonging to the subsidiary; A fixed and floating charge over the subsidiary s present and future assets; A corporate guarantee by the Company; and (viii) Jointly and personally guarantee by the directors of the subsidiary. (d) Al-Bai Bithaman Ajil Term Loan The term loan of the subsidiary company bears profit rate of 8% (2008: 6.5% to 8%) per annum and is secured by :- (i) (ii) (iii) (iv) Master Facility Agreement; A first party first legal charge over the subsidiary s freehold land as disclosed in Note 15 to the financial statements; Specific debenture by way of fixed and floating charge over the said land, all units and structure erected thereon and all the rights, interest and benefits in and under the project, and all other assets, goodwill, design and other intellectual properties rights, and all sales proceeds, rental income and other revenue and claims, and other undertaking relating to the project; and Corporate guarantee by the Company. 31. DEFERRED TAXATION Group Deferred tax liabilities (Note a) 1,555,272 1,256,999 Deferred tax assets (Note b) (831,959) (1,013,219) 723, ,780

75 73 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 31. DEFERRED TAXATION (CONT D) Note (a) Deferred Tax Liabilities Property, Plant and Equipment Total Balance as at 1 January ,256,999 1,256,999 Recognised in income statement (Note 10) 298, ,273 Balance as at 31 December ,555,272 1,555,272 Balance as at 1 January ,842,123 1,842,123 Recognised in income statement (Note 10) (585,124) (585,124) Balance as at 31 December ,256,999 1,256,999 Note (b) Deferred Tax Assets Unused Tax ICULS Losses Total Balance as at 1 January 2009 (34,316) (978,903) (1,013,219) Transferred from ICULS Recognised in income statement (Note 10) 12, , ,237 Balance as at 31 December 2009 (21,907) (810,052) (831,959) Balance as at 1 January 2008 (811,215) (339,540) (1,150,755) Transferred from ICULS 752, ,995 Recognised in income statement (Note 10) 23,904 (639,363) (615,459) Balance as at 31 December 2008 (34,316) (978,903) (1,013,219) Company Deferred Tax Assets Irredeemable Convertible Unsecured Loan Stocks (ICULS) Total Balance as at 1 January 2009 (34,316) (34,316) Recognised in income statement (Note 10) 12,386 12,386 Conversion Balance as at 31 December 2009 (21,907) (21,907) Balance as at 1 January 2008 (811,215) (811,215) Recognised in income statement (Note 10) 23,904 23,904 Conversion 752, ,995 Balance as at 31 December 2008 (34,316) (34,316)

76 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 32. TRADE AND OTHER PAYABLES Current Group Company Trade payables Third parties 64,286,673 95,148,809 5,260 - Construction contracts: Due to customers (Note 22) 61,330,445 1,353, Advances received (Note 22) 10,341, , ,958,298 97,127,644 5,260 - Other payables Vendor - associate company 5,865,000 5,865, ICULS - liability component (Note 27) 56,544 56,578 56,544 56,578 Accruals 3,237,706 1,288,822 65, ,761 Other payables 3,772,381 2,261, ,941 89,963 12,931,631 9,471, , , ,889, ,599, , ,302 Trade payables are non-interest bearing and the normal trade credit terms granted to the Group range from 30 to 90 days. 33. EMPLOYEE BENEFITS Employee Share Options Scheme The Company has established a Share Options Scheme for Employees and Directors ( The Scheme ) pursuant to the By-Laws which was approved by the shareholders at the Extraordinary General Meeting held on 30 April The Scheme shall remain in force for a duration of five (5) years commencing from 22 June The Board of Directors has approved the extension of the duration of ESOS for another five years from the expiry of the initial ESOS period (21 June 2009). The salient features and other terms of the Scheme are as follows : (i) (ii) (iii) (iv) The maximum number of the Company s new shares to be made available under the Scheme shall not exceed fifteen percent (15%) of the issued and paid up capital of the Company; Not more than fifty percent (50%) of the Company s shares available under the Scheme shall be allocated to Directors and senior management; Not more than ten percent (10%) of the Company s shares available under the Scheme shall be allocated to individual Director or eligible employees, who either singly or collectively through person connected to them holds twenty percent (20%) or more of the issued and paid-up capital of the Company. The eligible participants shall include eligible employees and Directors who as at the offer date have satisfied the following criteria :- (a) is a confirmed employee or appointed director within the Group; (b) has attained at least age of eighteen (18); (c) is employed full time and on the payroll of the Group; (d) is under such category and of such criteria that the option committee may from time to time decide.

77 75 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 33. EMPLOYEE BENEFITS (CONT D) Employee Share Options Scheme (cont d) The salient features and other terms of the Scheme are as follows : (cont d) (v) (vi) The option price for each share shall be based on the weighted average market price (WAMP) of the Company s share traded on Main Market of Bursa Malaysia Securities Berhad for the five (5) trading days preceding the date of offer with a discount if any, that does not exceed ten percent (10%) from the five (5) day of the Company s share price. Upon exercise of the options, the new ordinary shares of the Company to be issued pursuant to the Scheme will, upon allotment and issue, rank pari passu in all respects with the existing ordinary shares of the Company; and (vii) The persons to whom the options have been granted have no right to participate by virtue of the option in any share issue of any other company. During the Year Date of Offer Exercise Period Exercise Price Per Ordinary Share () Balance at 1 January Granted/ Accepted Exercised Balance at 31 December ,740,000-13,740, ,740, ,740, ,740,000 2,199,000 (3,644,500) 12,294, ,294,500 - (1,241,500) 11,053, ,053,000 - (45,000) 11,008,000 Consequent to the Bonus Issue exercise completed in 2008, the exercise price of the Company s Employees and Directors Share Option Scheme had been adjusted from MR1.47/share to 1.23/share. Options exercisable in a particular year but not exercised can be carried forward to the subsequent years provided they are exercised prior to the expiry date of the Scheme on 21 June The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the list of option holders, including directors, holding share options of less than 850,000 shares. The eligible employees who have been granted share options of 850,000 or more are as follows:- No. Name of Options Holders Number of Share Options 1. Dato' Sri Sufri Bin Hj Mohd Zin 900, Dato' Abdul Aziz Bin Mohamad 850, Dato' Khoo Teng San 850, Loh Leh Wong 850, Yeoh Sook Keng 850, Abdul Aziz Bin Mohamed 857,000

78 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 34. CAPITAL COMMITMENTS Group Company Approved and contracted for : Investment in partnership 14,535, The above investment in partnership is in respect of Call and Put Option Deed contracted by the Group on 20 July 2009 as disclosed under Note 40. The Call and Put option period for the above investment will lapse on 7 July CONTINGENT LIABILITIES Secured Group Company Bank guarantees Performance bond 107,375, ,724, ,375,993 55,024,196 Advance bond 30,000,000 20,000,000 30,000,000 20,000,000 Tender bond 350,000 60, ,000 60,000 Supplier / Maintenance / Security 1,175, ,150 1,175, , ,900, ,141, ,900,993 75,441,346 The bank guarantees are secured by fixed deposits of a subsidiary company and a corporate guarantee by the Company. As at the balance sheet date, the Group has unutilised bank guarantees amounting to 85,599,007 (2008: 71,470,243). Unsecured: Corporate guarantees given to banks for credit facilities granted to subsidiaries ,445, ,727,128 As of 31 December 2009, the Group had available 232,500,000 (2008: 191,900,000) of undrawn committed borrowing facilities in respect of which all conditions precedent had been met.

79 77 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 36. DIVIDENDS Dividends in Respect of Year Dividends Recognised in Year Recognised during the year: First and final dividend for 2008: 6 sen per share less 25% taxation on 189,578,439 ordinary shares (4.5 sen net per ordinary share) - 8,531,030 8,531,030 5,822,247 At the forthcoming Annual General Meeting, a provisional dividend in respect of the financial year ended 31 December 2009, of 4 sen per share less 25% taxation on 189,623,439 ordinary shares amounting to a dividend payable of 5,688,703 (3 sen net per ordinary share) will be proposed for shareholders approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December SIGNIFICANT RELATED PARTY TRANSACTIONS Company Interest from a subsidiary company 1,044,986 3,268,932 Management fee from a subsidiary company 2,340,000 1,020,000 Supply of labour to subsidiary companies 3,357,030 2,805,023 The directors are of the opinion that all the transactions above have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties. 38. FINANCIAL INSTRUMENTS (a) Financial Risk Management Objectives and Policies The Group s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group s businesses whilst managing its interest rate risks (both fair value and cash flow), liquidity risk and credit risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below. It is, and has been throughout the year under review, the Group s policy that no trading in derivative financial instruments shall be undertaken. (b) Interest Rate Risk Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. As the Group has no significant interest-bearing financial assets, the Group s income and operating cash flows are substantially independent of changes in market interest rates. The Group s interest-bearing financial assets are mainly short term in nature and have been mostly placed in fixed deposits. The Group s interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk. The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate borrowings.

80 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 38. FINANCIAL INSTRUMENTS (CONT D) (c) Liquidity Risk The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions and balances its portfolio with some short term funding so as to achieve overall cost effectiveness. (d) Credit Risk The Group s credit risk is primarily attributable to trade receivables. The Group trades only with recognised and creditworthy third parties. It is the Group s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis and the Group s exposure to bad debts is not significant. The credit risk of the Group s other financial assets, which comprise cash and cash equivalents, marketable securities and non-current investments, arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these financial assets. The Group does not have any significant exposure to any individual customer or counterparty nor does it have any major concentration of credit risk related to any financial assets. (e) Fair Values The carrying amounts of financial assets and liabilities of the Group and of the Company at the balance sheet date approximated their fair values. The fair value of quoted shares is determined by reference to stock exchange quoted market bid prices at the close of the business on the balance sheet date. It is not practicable to estimate the fair value of the Group non-current unquoted shares because of the lack of quoted market prices and the inability to estimate fair value without incurring excessive costs.

81 79 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notes to the financial statements 31 December 2009 (cont d) 39. SEGMENTAL INFOATION Revenue Profit Before Taxation Total Assets Employed Investment holding 15,673,333 7,540,270 8,156,826 3,501, ,530 3,803,768 Construction activity 491,999, ,093,572 38,341,718 70,262, ,537, ,390,154 Property development 1,100,781 7,608,586 (196,812) (6,348,948) 37,255,195 49,711,398 Hiring of motor vehicle and machinery 4,198,486 5,197, , ,498 2,928,800 2,740,039 Manufacturing and retailing in ready mixed concrete 8,578,672 4,871, , ,185 1,532,230 1,574,434 Retailing of construction materials and others 50,459,083 79,262,401 4,014,464 8,501,702 35,199,484 41,784,913 Supply of labour 3,357,030 2,805,023 1,747,089 1,302,725 32,027 1,415,022 Others 504, ,881 (43,068) 12,078 10,620,584 7,975,142 Group s share of loss of an associate company - - (534,642) (368,042) ,871, ,542,831 52,769,371 77,653, ,255, ,394,870 Consolidated adjustments (42,062,976) (31,880,083) (13,991,249) (16,293,004) ,808, ,662,748 38,778,122 61,360, ,255, ,394,870 No segmental reporting has been prepared in respect of geographical location as the Group s activities are predominantly carried out in Malaysia. 40. SIGNIFICANT EVENTS New Projects Secured by The Group On 9 October 2009, the Group s wholly owned subsidiary, TRC (Aust) Pty Ltd received a letter of acceptance from Pretty Sally Holdings Pty Ltd in relation to the construction of road and drainage, sewer and water works for Springridge Estate Development Project, 625 Northern Highway, Wallan, Melbourne, Australia for a contract sum of AUD4,188,681 (12,901,977). The Group s wholly owned subsidiary, Trans Resources Corporation Sdn. Bhd. ( TRC ) had secured a project known as Cadangan Pembangunan Pusat Latihan Lain-Lain Pangkat Agensi Penguatkuasaan Maritime Malaysia (APMM) at Kuatan, Pahang for a contract sum of 218,000,000. On 8 March 2010, the Group s wholly owned subsidiary, TRC received the Letter of Award from Northport (Malaysia) Bhd, in relation to TRC s tender for The Project known as Proposed Development of RTG G- Block and Associated Works at Container Terminal One (CTI) for Northport (Malaysia) Bhd at Port Klang for a contract sum of 45,980,000. TRC had accepted the award on 9th March On 23 April 2010, TRC had received the Letter of Award from Putrajaya Holdings Sdn. Bhd., in relation to TRC s tender for the project known as The Proposed Construction and Completion of Remaining and Rectification Works for 622 unit Government Apartments at Parcel 5R6 in Precint 5, Putrajaya for a contract sum of 20,388,000. Investment in Partnership TRC (Aust) Pty Ltd had on 20 July 2009 concluded a Call and Put Option Deed to acquire 133,334 equal undivided shares out of 400,000 equal undivided shares in a piece of vacant land known as Springridge Estate, 625 Northern Highway, Wallan, Melbourne, Australia for a total consideration of AUD8,000,000 (24,501,600).

82 TRC SYNERGY BERHAD ANNUAL REPORT notes to the financial statements 31 December 2009 (cont d) 41. SUBSEQUENT EVENT On 8 April 2010, the Company s wholly owned subsidiary company within TRC Group, TRC Construction (Sarawak) Sdn. Bhd. (Co. No W) has changed its name to TRC (Sarawak) Sdn. Bhd. with effect from 6 April COMPARATIVES The following comparatives as at 31 December 2008 have been reclassified to confirm with current year s presentation. Balance sheets As Restated Group As Previously Stated Current assets Trade and other receivables 143,438, ,770,412 Cash and bank balances 212,817, ,423,439 Current liabilities Trade and other payables 106,599, ,518,538 Cash flow statements Receivables (34,386,661) (26,718,941) Payables 28,181,940 28,120,339 Fixed deposits (13,590,768) 3,601,724 Net (decrease)/increase in cash and cash equivalents (4,117,185) 20,681,426 Cash and cash equivalents at beginning of the year 143,912, ,841,270

83 81 TRC SYNERGY BERHAD ANNUAL REPORT 2009 list of properties To following are the properties owned by the TRCS Group:- No Location Tenure Description/ Existing Use Approx Age of Buildings Land Area/ Build Up Area Net Book Value 31 December 2009 Date of Valuation 1 Lot No.3626 Section 16 Kuching Central Land District, Sarawak 60-year leasehold expiring 18/4/ storey shop/office 11 years 2,214.2 sq ft/ 8,856.8 sq ft 1,148, /11/ Lot No.PT19447 Mukim of Ampangan District of Seremban Negeri Sembilan 99-year leasehold expiring 18/9/2095 Agricultural Land acres 500, /9/ Developer's Parcel No. 47(218) First and Second Floors of an Intermediate 4-storey shop/office building Taman Melawati Metro 1 Phase 4 Town Centre Selangor Freehold First and Second Floors of 4-storey shop/office 19 years 1,760.0 sq ft each 633, /11/ Units of Apartments Idaman Senibong Apartment Taman Bayu Senibong Johor Bahru, Johor Leasehold expiring 21/1/2097 Apartments 4 1/2 years Varying from sq ft, sq ft & sq ft 6,186, HS(D) PTD Mukim of Plentung, District of Johor Bahru, State of Johor (together with a double storey terrace house erected thereon) Freehold Double storey terrace 6 years sq metres 251, A part of HS(D) PTD Mukim of Plentong, District of Johor Bahru, State of Johor Freehold Agricultural land acres 11,720, Lot No.196, Bandar Ulu Klang 71/2 Mile, Ulu Klang Gombak, Selangor Freehold Agricultural land hectares 7,986, Mukim 2908, Lot 2265 Mukim Dengkil, Daerah Sepang Selangor Darul Ehsan Freehold Agricultural land hectares 1,080, Units of Shop Office TRC Business Centre Jalan Andaman Utama Ampang, Selangor Darul Ehsan Freehold Shop Office 1 year Varying from 1121sq ft, 1209 sq ft, 1319 sq ft, 1344 sq ft, 1370 sq ft, 1469 sq ft, 1533 sq ft, 1672sq ft & 1775 sq ft 6,242,728.38

84 TRC SYNERGY BERHAD ANNUAL REPORT analysis of shareholdings as at 30 April 2010 Authorised Share Capital : 500,000, Issued and Fully Paid-Up Share Capital : 189,623, Class of Shares : Ordinary Shares of 1.00 each Voting Rights : One Vote Per Ordinary Share No. of Shareholders : 1,785 DISTRIBUTION OF SHAREHOLDINGS (As at 30 April 2010) Category No. of Holders % No. of Shares % Less than , , , ,001-10,000 1, ,484, , , ,263, ,001 and less than 5% of issued shares ,440, % and above of the issued shares ,374, TOTAL 1, ,623, LIST OF SUBSTANTIAL SHAREHOLDERS (As at 30 April 2010) No. Name Direct No. of Shares % Indirect No.of Shares % 1 DATO' SRI SUFRI BIN HJ MOHD ZIN 24,404, ,198,000* TRC CAPITAL SDN BHD 26,814, KOLEKTIF AMAN SDN BHD 26,384, KHOO TEW CHOON 13,489, LEMBAGA TABUNG HAJI 18,687, LEONG KAM HENG 16,140, * Deemed interested by virtue of his shareholdings in Kolektif Aman Sdn Bhd and TRC Capital Sdn Bhd DIRECTORS INTEREST IN SHARES (As at 30 April 2010) Direct Indirect No. Name No. of Shares % No. of Shares % 1 DATO' SRI SUFRI BIN HJ MOHD ZIN 24,404, ,198,000* DATO ABDUL AZIZ BIN MOHAMAD 5,529, * Deemed interested by virtue of his shareholdings in Kolektif Aman Sdn Bhd and TRC Capital Sdn Bhd

85 83 TRC SYNERGY BERHAD ANNUAL REPORT 2009 analysis of shareholdings as at 30 April 2010 (cont d) LIST OF 30 LARGEST SHAREHOLDERS (As at 30 April 2010) No Name of Shareholder Shares % 1. Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account For TRC Capital Sdn Bhd 2. Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Kolektif Aman Sdn Bhd 26,814, ,384, Lembaga Tabung Haji 18,687, Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Sufri Bin Mhd Zin 5. Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Khoo Tew Choon 6. Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Leong Kam Heng 7. Affin Nominees (Tempatan) Sdn Bhd CIMB Bank For Sufri Bin Mhd Zin (M28002) 8. Alliancegroup Nominees (Tempatan) Sdn Bhd Pheim Asset Management Sdn Bhd For Employees Provident Fund 15,808, ,681, ,852, ,457, ,618, Abdul Aziz Bin Mohamad 5,000, Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Yap Yon Tai 11. Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Leong Kam Heng 12. Amanah Raya Berhad Kumpulan Wang Bersama 4,929, ,782, ,651, Muhamad Shahaizi Bin Abdul Hai 4,500, Amanahraya Trustees Berhad Public Islamic Select Treasures Fund 15. Amanahraya Trustees Berhad Public Islamic Opportunities Fund 3,141, ,963, Ngiam Buey Buey 2,624, Citigroup Nominees (Asing) Sdn Bhd CBHK PBGHK For Golden Millennium Worldwide Limited 18. Citigroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Khoo Teng San (473523) 1,728, ,402,

86 TRC SYNERGY BERHAD ANNUAL REPORT analysis of shareholdings as at 30 April 2010 (cont d) LIST OF 30 LARGEST SHAREHOLDERS (As at 30 April 2010) (CONT D) No Name of Shareholder Shares % 19. Citigroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Sufri Bin Mhd Zin (473402) 20. Citigroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Leong Kam Heng (473525) 21. HSBC Nominees (Asing) Sdn Bhd HSBC-FS For Kep Holdings Limited 22. EB Nominees (Tempatan) SeNdirian Berhad Pledged Securities Account For Khoo Tew Choon (Sfc) 23. HSBC Nominees (Asing) Sdn Bhd HSBC-FS For The Vittoria Fund Limited 24. Affin Nominees (Tempatan) Sdn Bhd CIMB Bank For Leong Kam Heng (M28001) 25. EB Nominees (Tempatan) Sendirian Berhad Pledged Securities Account For Leong Kam Heng (Sfc) 26. Cartaban Nominees (Asing) Sdn Bhd Credit Suisse Securities (Europe) Limited For Evenstar Master Fund Spc 1,138, , , , , , , , Chin Yu Nominees Pty Ltd 631, OSK Nominees (Tempatan) Sdn Berhad Pledged Securities Account For Khoo Teng San 591, KTC Holdings Sdn Bhd 561, Abdul Aziz Bin Mohamad 529, TOTAL 167,273,

87 85 TRC SYNERGY BERHAD ANNUAL REPORT 2009 analysis of ICULS holdings as at 30 April 2010 Issued Size : 30,800,000 Nominal Amount of 5% 5 Year Irredeemable Convertible Unsecured Loan Stock (ICULS) Nominal value : ICULS of 1.00 each Voting Rights : Nil No.of ICULS Holders : 158 DISTRIBUTION OF ICULS HOLDINGS (As at 30 April 2010) Category No. of Holders % No. of ICULS % Less than , , ,001-10, , , , , ,001 and less than 5% of issued ICULS , % and above of the issued ICULS TOTAL ,196, LIST OF 30 LARGEST ICULS HOLDERS (As at 30 April 2010) No Name Of ICULS Holders ICULS % 1. HSBC Nominees (Tempatan) Sdn Bhd 340, HSBC (M) Trustee Bhd For OSK-UOB Small Cap Opportunity Unit Trust (3548) 2. HSBC Nominees (Asing) Sdn Bhd 190, HSBC-FS For Asean Emerging Companies Growth Fund Ltd 3. Chen Khai Voon 127, Ng Kok Ng Kee Seng 117, Loh Leh Wong 40, Citigroup Nominees (Tempatan) Sdn Bhd 35, Pledged Securities Account For Khoo Teng San (473523) 7. Loh Leh Wong 19, Ee Soh Ee Mee Lan 15, Hamzah Bin Hasan 15, Phoa Cheng Loon 14, Khoo Teng San 13, Cimsec Nominees (Asing) Sdn Bhd 12, Exempt An For CIMB-GK Securities Pte Ltd (Retail Clients)

88 TRC SYNERGY BERHAD ANNUAL REPORT analysis of ICULS holdings as at 30 April 2010 (cont d) LIST OF 30 LARGEST ICULS HOLDERS (As at 30 April 2010) (CONT D) No Name Of ICULS Holders ICULS % 13. Khoo Shiau Hoon 10, Phoon Mee Hung 10, Amsec Nominees (Tempatan) Sdn Bhd 9, Pledged Securities Account For Ong Aye Ho 16. Toh Hoon Ling 8, Wee Huoi Wee HwEe Bee 8, Citigroup Nominees (Tempatan) Sdn Bhd 8, Pledged Securities Account For Khor Thing Thiam (472926) 19. Kyang Lee Koon 8, Kenanga Nominees (Tempatan) Sdn Bhd 8, Pledged Securities Account For Lee Teck Hoe 21. Citigroup Nominees (Tempatan) Sdn Bhd 7, Pledged Securities Account For Leong Kam Heng (473525) 22. Khoo Teik Hooi 6, Lee Theak Lee 6, Gopal A/L Narian Kutty 5, TA Nominees (Tempatan) Sdn Bhd 5, Pledged Securities Account For Hor Khek Ban 26. Kow Kow Kian 5, Ooi Phuay Gim 4, HLB Nominees (Tempatan) Sdn Bhd 4, Pledged Securities Account For Khoo Teng San 29. Tan Ko Teng 4, Ong Yean Yean 4, TOTAL 1,060,

89 87 TRC SYNERGY BERHAD ANNUAL REPORT 2009 analysis of warrant holdings as at 30 April 2010 Number of Warrant : 30,800, years free detachable warrants Exercise Price : 1.00 per the Company s share Voting Rights : Nil No. of Warrant Holders : 514 DISTIBUTION OF WARRANT HOLDINGS (As at 30 April 2010) Category No. of Holders % No. of Warrant % Less than , , ,001-10, ,097, , , ,787, ,001 and less than 5% of issued Warrants ,684, % and above of the issued Warrants ,000, TOTAL ,609, LIST OF 30 LARGEST WARRANT HOLDERS (As at 30 April 2010) No Name Of Warrant Holders Warrants % 1. Kolektif Aman Sdn. Bhd. 7,296, Sufri Bin Mhd Zin 4,608, TRC Capital Sdn. Bhd. 3,096, Kenanga Nominees (Tempatan) Sdn Bhd 1,810, Pledged Securities Account For Khoo Tew Choon 5. Kenanga Nominees (Tempatan) Sdn Bhd 1,632, Pledged Securities Account For Leong Kam Heng 6. Abdul Aziz Bin Mohamad 1,335, Yeoh Sook Keng 1,277, Khoo Teng San 1,248, Leong Kam Heng 1,188, Kenanga Nominees (Tempatan) Sdn Bhd 751, Pledged Securities Account For Yap Yon Tai 11. Lembaga Tabung Haji 563, Alliancegroup Nominees (Tempatan) Sdn Bhd 504, Pheim Asset Management Sdn Bhd For Employees Provident Fund 13. Affin Nominees (Tempatan) Sdn Bhd 439, CIMB Bank For Sufri Bin Mhd Zin (M28002) 14. Citigroup Nominees (Tempatan) Sdn Bhd 428, Pledged Securities Account For Khoo Teng San (473523)

90 TRC SYNERGY BERHAD ANNUAL REPORT analysis of warrant holdings as at 30 April 2010 (cont d) LIST OF 30 LARGEST WARRANT HOLDERS (As at 30 April 2010) (CONT D No Name Of Warrant Holders Warrants % 15. Ooi Cheng Ooi Peng Huat 366, Khoo Shiau Hoon 331, Ngu Ew Look 321, Chin Yu Nominees Pty Ltd 293, Loh Leh Wong 288, Khoo Shiau Hoon 287, Mohd Raffee Bin Jalil 287, HSBC Nominees (Tempatan) Sdn Bhd 275, MSBC (M) Trustee Bhd For OSK-UOB Small Cap Opportunity Unit Trust (3548) 23. Lim Kwong Hon 269, Muhamad Shahaizi Bin Abdul Hai 240, RHB Capital Nominees (Tempatan) Sdn Bhd 230, Pledged Securities Account For Tony Lee (551009) 26. Teo Ah Seng 209, Amsec Nominees (Tempatan) Sdn Bhd 177, PT Amcapital Indonesia For Hon Pansy 28. OSK Nominees (Tempatan) Sdn Berhad 176, Pledged Securities Account For Khoo Teng San 29. Ngiam Buey Buey 151, Ng Kok Ng Kee Seng 140, TOTAL 30,226,

91 89 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notice of thirteenth annual general meeting NOTICE IS HEREBY GIVEN that the Thirteenth Annual General Meeting of the Company will be held at Indah Ballroom, Flamingo Hotel, 5, Tasik Ampang, Hulu Kelang, Ampang, Selangor on Thursday, the 24th day of June, 2010 at a.m. for the purpose of transacting the following businesses:- AGENDA ORDINARY BUSINESS 1 To receive and adopt the Audited Financial Statements, Report of the Directors and Report of the Auditors thereon for the year ended 31 December 2009 Resolution 1 2 To approve the payment of first and final gross dividend of 4 sen per share less 25% tax for the year ended 31 December 2009 Resolution 2 3 To approve the payment of Directors Fees in respect of the financial year ended 31 December 2009 Resolution 3 4 To re-elect Dato Abdul Aziz bin Mohamad who shall retire as Director of the Company pursuant to Articles 84 of the Company s Articles of Association. Resolution 4 5 To re-elect Gen (R) Tan Sri Mohd Shahrom bin Dato Hj Nordin who shall retire as Director of the Company pursuant to Articles 84 of the Company s Articles of Association. Resolution 5 6 To appoint Messrs AljeffriDean as Auditors in place of the retiring auditors, Messrs Kumpulan Naga, and to authorise the Directors to fix their remuneration Resolution 6 SPECIAL BUSINESS To consider and if thought fit, to pass the following ordinary resolution, with or without modification:- 7 Authority to Issue Shares THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to issue shares in the Company at any time until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares to be issued does not exceed ten per centum (10%) of the issued and paid-up ordinary share capital of the Company for the time being, subject always to the approvals of the relevant regulatory authorities. Resolution 7 8 Proposed Renewal of Authority for the Company to Purchase Its Own Shares THAT subject to compliance with all applicable rules, regulations and orders made pursuant to the Companies Act, 1965 ( Act ), provisions in the Company s Memorandum and Articles of Association, the Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ) and any other relevant authorities, the Company be and is hereby authorised to purchase such number of ordinary shares of the company as may be determined by the Directors of the Company from time to time through Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient in the interest of the Company PROVIDED THAT:- (1) The aggregate number of shares purchased does not exceed ten per centum (10%) of the issued and paid-up share capital of the Company as quoted on Bursa Securities as at the point of purchase; (2) the maximum fund to be allocated by the Company for the purpose of purchasing such number of ordinary shares shall not exceed the retained profit and share premium account of the Company. As at the financial year ended 31 December 2009, the audited retained profit and share premium of the Company stood at 10,870,401 and 10,350 respectively; (3) The renewal of authority conferred by this resolution will commence immediately upon passing of this resolution and will continue to be in force until:- (a) at the conclusion of the next AGM of the Company following the general meeting in which the authorization is obtained, at which time it shall lapse unless by ordinary resolution passed at that meeting, the authority is renewed either unconditionally or subject to conditions; or

92 TRC SYNERGY BERHAD ANNUAL REPORT notice of thirteenth annual general meeting (CONT D) (b) the expiration of the period within which the next AGM of the Company is required by law to be held; or (c) revoked or varied by ordinary resolution passed by the shareholders of the Company in a general meeting. whichever occurs first; AND THAT upon completion of the purchase(s) of the ordinary shares of the Company, the Directors of the Company be and are hereby authorised to deal with the ordinary shares so purchased in the following manners:- (a) to cancel the ordinary shares so purchased; or (b) to retain the ordinary shares so purchased as treasury shares for distribution as dividend to shareholders and/or resell on Bursa Securities or subsequently cancelled; or (c) to retain part of the ordinary shares so purchased as treasury shares and cancel the remainder; and (d) in any other manner prescribed by the Act, rules, regulations and orders made pursuant to the Act, the Listing Requirements of Bursa Securities and any other relevant authorities for the time being in force. AND THAT the Directors of the Company be and are hereby authorised to act and to take all such steps as they may deem necessary or expedient in order to implement, finalise and give full effect to the aforesaid share buy-back with full powers to assent to any conditions, modifications, variations, and/ or amendments as may be required or imposed by the relevant authorities and to do all such acts and things (including executing all documents) as the Board may deem fit and expedient in the best interest of the Company. Resolution 8 9 To transact any other business of which due notice shall be given in accordance with the Articles of Association of the Company and the Companies Act, NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT NOTICE IS HEREBY GIVEN, that a first and final gross dividend of 4 sen per share less 25% tax in respect of the financial year ended 31 December 2009 will be paid on 13 July 2010 to shareholders whose names appear on the Company s Register of Depositors on 30 June A Depositor shall qualify for entitlement to the dividend only in respect:- (a) (b) Shares transferred into the Depositor s Securities Account before 4.00pm on 30 June 2010 in respect of ordinary transfers; and Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad. BY ORDER OF THE BOARD ABDUL AZIZ MOHAMED (LS ) Secretary Selangor Darul Ehsan 2nd June 2010

93 91 TRC SYNERGY BERHAD ANNUAL REPORT 2009 notice of thirteenth annual general meeting (cont d) Notes: 1. A proxy may but need not be a member of the Company and the provision of section 149 (1) (b) of the Act shall not apply to the Company. 2. To be valid the proxy form duly completed must be deposited at the registered office of the Company not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof. 3. A member holding one thousand (1,000) ordinary shares or less may appoint only one (1) proxy to attend and vote at the meeting. 4. A member holding more than one thousand (1,000) ordinary shares may appoint up to two (2) proxies to attend and vote at the meeting. 5. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy. 6. Where a member is an authorised nominee as defined under the Central Depositories Act, it may appoint at least one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account. 7. If the appointer is a corporation, the proxy form must be executed under its Common Seal or under the hand of its attorney. 8. The Resolution 6 is proposed in view of the retiring auditors do not wish to seek reappointment vide a letter dated 23 March The notice of nomination, pursuant to Section 172 (11) of the Act, has been received for the nomination of Messrs AljeffriDean for appointment as auditors of the Company. A copy of the notice of nomination and the Consent to act as auditors by Messrs AljeffriDean are enclosed with the 2009 Annual Report and marked as Appendix 1 and Appendix 2 respectively. EXPLANATORY NOTES TO THE SPECIAL BUSINESS Ordinary Resolution No. 7 Authority for allotment of shares The proposed Ordinary Resolution 7 is a renewal of the General Mandate for the Directors to issue shares pursuant to Section 132D of the Companies Act, The proposed Ordinary Resolution 7, if passed, will authorize the Directors of the Company, from the date of the above Annual General Meeting, to issue shares up to ten per centum (10%) of the issued and paid-up capital of the Company for the time being for such purposes as the Directors consider would be in the best interest of the Company. This authority, unless revoked or varied by the Company in general meeting, will expire at the conclusion of the next Annual General Meeting of the Company. As at the date of this Notice, no new shares in the Company were issued pursuant to the authority granted to the Directors at the Twelfth Annual General Meeting held on 25 June 2009 and which will lapse at the conclusion of the Thirteenth Annual General Meeting to be held on 24 June The authority will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for purpose of funding future investment project(s), working capital and/or acquisitions. The rationale for this resolution is to eliminate the need to convene separate general meeting(s) from time to time to seek Shareholder approval as and when the Company issues new shares and thereby reducing administrative time and costs associated with the convening of such meeting(s). Ordinary Resolution No. 8 - Proposed renewal of authority for the Company to purchase its own shares The proposed adoption of the Ordinary Resolution 8 is to renew the authority granted by the shareholders of the Company at the Annual General Meeting held on 25 June 2009 to empower the Directors of the Company to purchase not more than 10% of the issued and paid-up share capital of the Company for the time being, for such purposes as they consider would be in the best interest of the Company. This authority, unless revoked or varied at a general meeting will expire at the conclusion of the next Annual General Meeting of the Company. Further information is set out in the Share Buy-Back Statement dated 2nd June 2010 which is dispatched together with the Company s 2009 Annual Report.

94 TRC SYNERGY BERHAD ANNUAL REPORT statement accompanying notice of annual general meeting 1. Directors who are standing for re-election at the 13th Annual General Meeting of TRC Synergy Berhad are Dato Abdul Aziz bin Mohamad and General (R) Tan Sri Mohd Shahrom Bin Dato Hj Nordin. 2. Details of Board of Directors Meeting: Five (5) Board Meetings were held during the financial year ended 31 December 2009, details of which are set out in the Statement on Corporate Governance. 3. Particulars of Directors standing for re-election at the 13th Annual General Meeting of TRC Synergy Berhad:- Name Dato Abdul Aziz bin Mohamad Age 51 Nationality Malaysian Position in the Company Executive Director Working experience/ Qualification/Occupation Other directorship of public companies Securities holdings in the Company and its subsidiaries as at 30 April 2010 Family relationship with any director and/or substantial shareholder of the Company. Any conflict of interest with the Company List of convictions for offences (other than traffic offences) within the past 10 years Dato Abdul Aziz Bin Mohamad is a graduate of Trent Polytechnic in Nottingham, England. He is a Quantity Surveyor by profession and a member of the Institution of Surveyors, Malaysia. He joined TRC Group as a Senior Contract Executive in 1994 and was later promoted to Deputy General Manager (Contracts) in He started his career as an Assistant Quantity Surveyor in England with Rider Hunt and Partners in He later joined Jabatan Kerja Raya (JKR) Kuala Lumpur in 1983 as a Quantity Surveyor where he administered the contractual aspects of projects. For details, please refer to his profile on page 8 of the Annual Report. Nil 5,529,284 (2.92%) Nil Nil Nil

95 93 TRC SYNERGY BERHAD ANNUAL REPORT 2009 statement accompanying notice of annual general meeting (cont d) Name General (R) Tan Sri Mohd Shahrom Bin Dato Hj Nordin Age 62 Nationality Malaysian Position in the Company Senior Independent, Non-Executive Director Working experience/ Qualification/Occupation Other directorship of public companies Securities holdings in the Company and its subsidiaries as at 30 April 2010 Family relationship with any director and/or substantial shareholder of the Company. Any conflict of interest with the Company List of convictions for offences (other than traffic offences) within the past 10 years Gen. (R) Tan Sri Mohd Shahrom is a graduate of the Royal Military College, Sungai Besi in Gen (R) Dato Seri Shahrom has served in various appointments at command, staff, training and the diplomatic services levels and he was the Chief of the Malaysia Army from 1 st January 2003 to 15 September Prior to that appointment he was the Chief of staff at the Armed Forces Headquarters. Currently he is the Senior Vive President Defence of the National Aerospace & Defence of the National Aerospace & Defence Industries Sdn Bhd (NADI). He is also the Chairman of SME Aerospace Sdn Bhd (SMEA) and Director of SME Ordinance Sdn Bhd (SMEO). Both SMEA and SMEO are subsidiary companies of the NADI Group of Companies. For details, please refer to his profile on page 9 of the Annual Report. Nil Nil Nil Nil Nil 4. Additional information on the proposed Authority for allotment of shares under Section 132 D of the Companies Act, The proposed Ordinary Resolution 7 as appeared in the Notice of Meeting dated 2 June 2010 is a renewal of the General Mandate for the Directors to issue shares pursuant to Section 132D of the Companies Act, If passed, the resolution will authorize the Directors of the Company, from the date of the Company s thirteenth Annual General Meeting, to issue shares up to ten per centum (10%) of the issued and paid-up capital of the Company for the time being for such purposes as the Directors consider would be in the best interest of the Company without having to convene a general meeting. The authority for the allotment of shares will provide flexibility to the Company for the allotment of shares for the purpose of funding future investment, working capital and/or acquisitions. This renewed authority, unless revoked or varied by the Company in general meeting, will expire at the conclusion of the next Annual General Meeting of the Company. As at the date of the Company s Notice of Meeting, no new shares in the Company were issued pursuant to the authority granted to the Directors at the Twelfth Annual General Meeting held on 25 June 2009 and which will lapse at the conclusion of the Thirteenth Annual General Meeting to be held on 24 June 2010.

96 TRC SYNERGY BERHAD ANNUAL REPORT e-dividend 2 June 2010 To: All Shareholders of TRC Synergy Berhad Dear Sir/Madam, IMPLEMENTATION OF ELECTRONIC DIVIDEND PAYMENT (E-DIVIDEND) We are pleased to inform you that in line with the e-dividend initiative by Bursa Malaysia, TRC Synergy Berhad ( the Company ) will be implementing e-dividend in the third quarter of The e-dividend refers to the payment of cash dividends by a listed issuer directly into the shareholders bank accounts. The main objectives of implementing e-dividend are, amongst others, to promote greater efficiency of the dividend payment system and to put Malaysia on par with practices in other regional markets in relation to receipt of dividends by shareholders. 2. Registration for e-dividend 2.1 Registration for e-dividend will commence on 19 April 2010 for a period of 1 year until 18 April 2011, at no cost to the shareholders. An administrative charge will be imposed for registrations after the 1 year period. 2.2 To register for e-dividend, you are required to provide to Bursa Malaysia Depository Sdn Bhd ( Bursa Depository ) through your stock broker s office (where your CDS account is maintained) the following: (a) (b) (c) Your bank account number; The duly completed prescribed form (which can be obtained from your stock broker, or downloaded from Bursa Malaysia s website at For individual depositor: Copy of identification documents i.e. NRIC, Passport, Authority Card or other acceptable identification documents. Original documents must be produced for your stock broker s verification; For corporate depositor: Certified true copy of the Certificate of Incorporation/Certificate of Registration; and (d) Copy of your bank statement / bank savings book / details of your bank account obtained from your banks website that has been certified by your bank / copy of letter from your bank confirming your bank account particulars. For individuals, original documents must be produced for your stock broker s verification. For corporate entities, a certified true copy is to be submitted. If the CDS account is held in the name of a nominee, the nominee will register for the e-dividend. 2.3 If you are not able to be present at your stock broker s office for the registration, please ensure that the signing of the prescribed form and the supporting documents have been witnessed by an acceptable witness specified by Bursa Depository (i.e. an Authorised Officer of your stock broker, a Dealer s Representative, a notary public or an Authorised Officer of the Malaysian Embassy/High Commission). 3. Notification of e-dividend payment after registration 3.1 You are encouraged to provide in the prescribed form to Bursa Depository both your address and/or mobile phone number, if any. This is to enable the Company to issue an electronic notification of dividend payment to you via . Short message service ( SMS ) notification is not available from the Company at the moment and the Company will inform the shareholders if this becomes available in the future. You will continue to receive your tax vouchers as long as the law requires it.

97 95 TRC SYNERGY BERHAD ANNUAL REPORT 2009 e-dividend (cont d) 4. Additional information 4.1 Your savings or current account, must be an active bank account, maintained with a local bank under your name or in the case of a joint account, has your name as one of the account holders. The bank must be a member of the Malaysian Electronic Payment System Inter-Bank GIRO (IBG), which can be found at my/faq/interbank_giro.asp?id=2#answer. 4.2 Your bank account particulars and related information is protected under the Securities Industry (Central Depositories) Act 1991 which prohibits the disclosure of such information without your authorization. For e-dividend purposes, you will be authorising such disclosure to persons facilitating e-dividend services such as the Company, the share registrar and the paying banks. 4.3 Once you have registered for e-dividend, any cash dividend entitlement with a book closure date of 1 September 2010 or later, shall be paid to you via e-dividend. You may find more information pertaining to e-dividend on the Bursa Malaysia website at bm/trading/e-dividend_info_kit.html. We look forward to a successful implementation of e-dividend through your active participation, and to serving you better as our valued shareholders. If you have any query relating to our e-dividend service, please do not hesitate to contact the Helpdesk of our Share Registrar, Mega Corporate Services Sdn. Bhd. at , (GL) during office hours. Thank you. Yours faithfully TRC Synergy Berhad

98 appendix 1 appendix 2

99 No. of Ordinary Shares held Incorporated in Malaysia PROXY FO I/We, of being a member/members of the above-named Company, hereby appoint of of or failing whom, as my/our proxy to vote for me/us and on my/our behalf at the Thirteenth Annual General Meeting of the Company, to be held at Indah Ballroom, Flamingo Hotel, 5, Tasik Ampang, Hulu Kelang, Ampang, Selangor on Thursday, 24 June 2010 at a.m and at every adjournment thereof. I/We direct my/our proxy to vote for or against the resolutions to be tabled at the Thirteenth Annual General Meeting as hereunder indicated. RESOLUTIONS FOR AGAINST ORDINARY RESOLUTION 1 Receive and adopt the Audited Financial Statements for the year ended 31 December 2009 ORDINARY Payment of first and final dividend for the year ended 31 December 2009 RESOLUTION 2 ORDINARY Payment of Directors Fees RESOLUTION 3 ORDINARY RESOLUTION 4 Re-election of YBhg Dato Abdul Aziz bin Mohamad as Director of the Company ORDINARY RESOLUTION 5 Re-election of YBhg Gen (R) Tan Sri Mohd Shahrom bin Dato Hj Nordin as Director of the Company ORDINARY RESOLUTION 6 Appointment of Messrs AljeffriDean as the Auditors of the Company and to authorise the Directors to fix their remuneration ORDINARY Authority to Issue Shares RESOLUTION 7 ORDINARY Renewal of authority for the Company to purchase its own shares RESOLUTION 8 (Please indicate with an X in the space provided how you wish your vote to be cast on the resolution specified in the Notice of the Thirteenth Annual General Meeting. If this form of proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain from voting at his/her discretion.).. Dated this day of June Signature(s)/Common Seal of Member Notes: 1. A proxy may but need not be a member of the Company and the provision of section 149 (1) (b) of the Act shall not apply to the Company. 2. To be valid the proxy form duly completed must be deposited at the registered office of the Company not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof. 3. A member holding one thousand (1,000) ordinary shares or less may appoint only one (1) proxy to attend and vote at the meeting. 4. A member holding more than one thousand (1,000) ordinary shares may appoint up to two (2) proxies to attend and vote at the meeting. 5. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy. 6. Where a member is an authorised nominee as defined under the Central Depositories Act, it may appoint at least one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account. 7. If the appointer is a corporation, the proxy form must be executed under its Common Seal or under the hand of its attorney. 8. The Resolution 6 is proposed in view of the retiring auditors do not wish to seek reappointment vide a letter dated 23 March The notice of nomination, pursuant to Section 172 (11) of the Act, has been received for the nomination of Messrs AljeffriDean for appointment as auditors of the Company. A copy of the notice of nomination and the Consent to act as auditors by Messrs AljeffriDean are enclosed with the 2009 Annual Report and marked as Appendix 1 and Appendix 2 respectively.

100 Please fold here postage The Company Secretary TRC SYNERGY BERHAD ( D) TRC Business Centre Jalan Andaman Utama Ampang Selangor Please fold here

101 TRC SYNERGY BERHAD ( D) TRC Business Centre, Jalan Andaman Utama, Ampang, Selangor Tel : Fax :