CONTENTS CORPORATE VISION CORPORATE MISSION

Transcription

1 Annual Report

2 COVER RATIONALE As a responsible corporate entity, TRIplc Group is focused on building greater success with a committed and dedicated team. The cover of Annual Report defines our goals in ensuring high standard of quality in all our services; and together with courage and strength, we will continue working towards delivering exceptional value and future growth.

3 CONTENTS 02 Corporate Profile CORPORATE VISION To be a public listed company participating actively in supporting the nation towards achieving the aspirations of the Economic Transformation Programme. CORPORATE MISSION To be a responsible corporate entity; To exceed our customers expectations through quality and creative products and services; To create a conducive working environment for our employees to enhance our Group s growth; To work effectively with our stakeholders to maximise returns to all parties. 03 Five-Year Group Financial Highlights 04 Corporate Information 05 Corporate Structure 06 Board of Directors & Company Secretary 07 Profile of Directors & Company Secretary 10 Chairman s Statement 12 Penyataan Pengerusi 14 Corporate Diary 16 Corporate Responsibility 18 Corporate Governance Statement 27 Audit Committee Report 32 Risk Management and Internal Control Statement 35 Other Compliance Statement 37 Financial Statements 111 Analysis of Shareholdings 114 List of Group Properties 116 Notice of Annual General Meeting 117 Statement Accompanying Notice of Annual General Meeting Form of Proxy

4 Masjid Puncak Alam CORPORATE PROFILE TRIplc Berhad ( TRIplc ) was incorporated in Malaysia on 23 June 1992 as a private limited company under the name U-Wood Holdings Sdn Bhd. It was converted to a public limited company on 12 September 1992 and was listed on the Main Board, now known as Main Market of Bursa Malaysia Securities Berhad on 18 August The name of the Company was changed to TRIplc Berhad on 12 December A Bumiputera company registered with Construction Industry Development Board ( CIDB ) Grade 7 Sijil Perolehan Kerja Kerajaan ( SPKK ), today, the core activities of the Group ( TRIplc and subsidiaries ) are construction, property development, project management services and facility management services. The Company and its wholly-owned subsidiaries, TRIplc Resources Sdn Bhd and TRIplc Ventures Sdn Bhd were accredited ISO 9001:2008 by an internationally recognised certification body, Det Norske Veritas ( DNV ), for their quality management system in project management and construction. The Group ventured into construction business in 2003 when it secured contracts valued at RM million for the construction of academic block and students accommodations for Universiti Teknologi MARA ( UiTM ) at their campus in Taman Puncak Perdana, Section U10, Shah Alam, Selangor. With the good track record, the Group successfully secured contracts valued over RM1.0 billion for the construction of Zone 1 Phase 1 works of UiTM Puncak Alam Campus consisting of main infrastructure work, hostels for students complete with recreational and sports facilities, academic buildings and facilities for Faculty of Health Science, Faculty of Pharmacy and Students Plaza. In May 2010, the Group was granted a 23-year concession to undertake the construction and maintenance of Zone 1 Phase 2 of UiTM Puncak Alam Campus consisting of three (3) faculties to accommodate not less than 5,000 students, hostel accommodation for 2,500 students, 10 units of fellow accommodation, multipurpose hall, maintenance centre, prayer hall, library, student centre, cafeteria and health centre. All the construction projects have been successfully completed and handed over to UiTM. The Group is currently undertaking the facility management services of Zone 1 Phase 2 which commenced on 11 April and to be carried out for 20 years. The Group has also completed a mosque in Puncak Alam with a contract value of RM16.48 million in year which the Group manages. In property development, the Group is developing part of the 600 acres of mixed development project in Section U10, Shah Alam, Selangor. 2 TRIplc BERHAD ( A)

5 FIVE-YEAR GROUP FINANCIAL HIGHLIGHTS Key Results 31 May May May May 31 May Total Assets 186, , , , ,428 Share Capital 142,520 64,022 64,022 64,280 64,967 Shareholders Fund 35,241 74, , , ,538 Total Borrowings 11, , , , ,764 Turnover 7,591 88, , ,394 16,655 Net Profit After Tax 1,100 13,772 34,177 23,378 7,130 Earnings Per Share - Basic - Diluted Sen Sen 0.77 N/A N/A N/A Net Assets Per Share RM Gearing Ratio Times Operating Profit (% of turnover) % ANNUAL REPORT 3

6 CORPORATE INFORMATION BOARD OF DIRECTORS Independent Non-Executive Chairman Dato Muhamad Bin Mustapha DIMP, KMN Managing Director Zainal Abidin Bin Ismail Deputy Managing Director Yusof Bin Badawi Chief Operating Officer Ar Mohd Khalid Bin Mohammed Yusuf Senior Independent Non-Executive Director Jumsi Bin Batri Independent Non-Executive Director Ibrahim Bin Topaiwah COMPANY SECRETARY Wong Poh Chun, Shryn (MAICSA ) REGISTERED OFFICE No. 8, Ground Floor Jalan Apollo CH U5/CH Bandar Pinggiran Subang Seksyen U5, Shah Alam Selangor Darul Ehsan Tel : Fax : info@triplc.com.my Website : SHARE REGISTRAR AUDITORS BDO (AF:0206) Chartered Accountants Level 8, Menara CenTARa 360, Jalan Tuanku Abdul Rahman Kuala Lumpur TAX CONSULTANT BDO Tax Services Sdn Bhd ( K) Level 8, Menara CenTARa 360, Jalan Tuanku Abdul Rahman Kuala Lumpur PRINCIPAL BANKERS Hong Leong Bank Berhad (97141-X) RHB Bank Berhad (6171-M) United Overseas Bank (Malaysia) Bhd ( K) LEGAL FORM AND DOMICILE Public limited liability company incorporated and domiciled in Malaysia STOCK EXCHANGE LISTING Main Market, Bursa Malaysia Securities Berhad ( W) Stock Name : TRIPLC Stock Code : 5622 Stock Sector : Construction DATE OF INCORPORATION AND LISTING 23 June 1992/18 August 1993 Tricor Investor Services Sdn Bhd ( V) Unit 32-01, Level 32, Tower A Vertical Business Suite Avenue 3, Bangsar South No. 8, Jalan Kerinchi Kuala Lumpur Tel : Fax : is.enquiry@my.tricorglobal.com 4 TRIplc BERHAD ( A)

7 CORPORATE STRUCTURE FACILITY MANAGEMENT 100% TRIplc FMS Sdn Bhd PROPERTY INVESTMENT 100% Prinsip Barisan (M) Sdn Bhd CONSTRUCTION PROPERTY DEVELOPMENT 100% TRIplc Industries Sdn Bhd 100% Central Challenger (M) Sdn Bhd 100% Suasa Integrasi (M) Sdn Bhd 100% TRIplc Medical Sdn Bhd 100% Insa Alliance Sdn Bhd 100% Tirai Gemilang Sdn Bhd 100% TRIplc Resources Sdn Bhd 100% Layar Kekal (M) Sdn Bhd 100% Usahasewa Sdn Bhd 100% TRIplc Ventures Sdn Bhd 100% Samasys Sdn Bhd 100% Zuriat Watan Sdn Bhd ANNUAL REPORT 5

8 BOARD OF DIRECTORS & COMPANY SECRETARY IBRAHIM BIN TOPAIWAH AR MOHD KHALID BIN MOHAMMED YUSUF ZAINAL ABIDIN BIN ISMAIL YUSOF BIN BADAWI JUMSI BIN BATRI WONG POH CHUN, SHRYN DATO MUHAMAD BIN MUSTAPHA 6 TRIplc BERHAD ( A)

9 PROFILE OF DIRECTORS & COMPANY SECRETARY DATO MUHAMAD BIN MUSTAPHA DIMP, KMN Independent Non-Executive Chairman Malaysian, aged 68 Dato Muhamad Bin Mustapha was appointed to the Board of TRIplc Berhad ( TRIplc ) on 1 March. He holds a Master s Degree from New York University, New York City, United States of America. Dato Muhamad was with the Malaysian Administrative and Diplomatic Service for 31 years during which he held positions such as Director in the Prime Minister s Department, Deputy Director General of the National Security Council in the Prime Minister s Department and Deputy Secretary General (Management) of the Ministry of Information until he retired in Dato Muhamad was later appointed Coordinator of think tank of the Department of Special Affairs of the Ministry of Communications and Multimedia for seven (7) years until January. During Dato Muhamad s tenure with the Government, he had also served at the Malaysian Embassy in South Vietnam, Saigon (Ho Chih Minh City) during the Vietnam war; at the Malaysian Permanent Mission to the United Nations in New York, United States of America; Counsellor at the Malaysian Embassy in Bangkok, Thailand and Minister Counsellor at the Malaysian High Commission in London, United Kingdom. Dato Muhamad is a Member of the Audit Committee and Nomination Committee of TRIplc. He has no family relationship with any Director and/or major shareholder of TRIplc and has no conflict of interest with TRIplc. ZAINAL ABIDIN BIN ISMAIL Managing Director Malaysian, aged 60 Zainal Abidin Bin Ismail was appointed to the Board of TRIplc on 1 January He holds a Bachelor s Degree in Science majoring in Civil Engineering from Middlesex Polytechnic, United Kingdom. Prior to his appointment on the Board, he was the Managing Director of Pembinaan Era Dinamik Sdn Bhd, a construction company since Zainal Abidin has over 37 years of working experience in civil engineering works, building works and property development. He began his career with Felcra in 1976 as Technical Assistant. Over the years he rose up the ranks to become the State Deputy Director before joining KUB Development Berhad, a property development company in 1997 to head its Project Management Division. In 2001, he joined Konsortium YGP- SKC-CE Sdn Bhd as its Regional Manager. Zainal Abidin also sits on the board of several private limited companies. He is the Chairman of the Board Management Committee and a Member of the Remuneration Committee and ESOS Committee of TRIplc. He has no family relationship with any Director and/or major shareholder of TRIplc and has no conflict of interest with TRIplc. ANNUAL REPORT 7

10 PROFILE OF DIRECTORS & COMPANY SECRETARY YUSOF BIN BADAWI Deputy Managing Director Malaysian, aged 53 Yusof Bin Badawi was appointed to the Board of TRIplc on 10 June. He holds a Bachelor s Degree in Science majoring in Civil Engineering and minor in Construction and Mathematics from Southern Illinois University, United States of America. He has 29 years of experience in the construction industry at various levels including senior and board level and has been actively involved in management and implementation of various construction, infrastructure, housing development, waterworks and maintenance projects. He was involved in the construction, testing and commissioning of Sungai Selangor Water Supply Scheme Phase I and Phase II from 1990 to He has also successfully managed the implementation of the RM500 million contract for the maintenance and upgrading of schools in Peninsular Malaysia under the umbrella concept for the Ministry of Education. In May 2003, he was appointed as Chief Executive Officer of a public listed company ( PLC ). Together with the management and his staff team he managed to successfully construct and complete numerous projects and turned the PLC from a loss making company into a profitable group. He joined SYABAS in May 2011 as Executive Director. He is a member of the Board of Engineers Malaysia, the Malaysia Institute of Management ( MIM ) and the Malaysian Water Association. Yusof also sits on the board of several private limited companies. He is a Member of the Board Management Committee of TRIplc. He has no family relationship with any Director and/or major shareholder of TRIplc and has no conflict of interest with TRIplc. AR MOHD KHALID BIN MOHAMMED YUSUF Chief Operating Officer Malaysian, aged 62 Ar Mohd Khalid Bin Mohammed Yusuf was appointed to the Board of TRIplc as Executive Director, Operations on 7 April 2008 and was re-designated as Chief Operating Officer with effect from 1 June He holds a Bachelor s Degree in Science (Hons) majoring in Architecture and a post graduate Diploma in Architecture from Polytechnic of North London, United Kingdom and is a professional architect registered with Pertubuhan Arkitek Malaysia and Lembaga Arkitek Malaysia. Prior to his appointment on the Board, Ar Mohd Khalid was a Project Director of the Group overseeing the development of Satellite B at Zone 1 Phase 1 of UiTM Puncak Alam Campus project. He has an accumulated experience of 38 years in building consultancy work and the construction industry and was an active principal of a locally registered Architect firm. Ar Mohd Khalid also sits on the board of several private limited companies. He is a Member of the Board Management Committee of TRIplc. He has no family relationship with any Director and/or major shareholder of TRIplc and has no conflict of interest with TRIplc. JUMSI BIN BATRI Senior Independent Non-Executive Director Malaysian, aged 58 Jumsi Bin Batri was appointed to the Board of TRIplc on 1 November He is a graduate of Universiti Kebangsaan Malaysia with a Bachelor s Degree in Business Administration (Hons) majoring in marketing and finance. He also holds a license in Person Dealing in Unit Trust ( PDUT ) issued by Federation of Investment Managers Malaysia ( FiMM ). Jumsi has 14 years of working experience in the area of finance involving in credit management and marketing during his tenure with Malayan Banking Berhad before he resigned in 1996 to become a Dealers Representative with TA Securities Sdn Bhd. Jumsi is currently a Unit Trust Consultant with CIMB Wealth Advisors Berhad. Jumsi is the Chairman of the Audit Committee and Nomination Committee and a Member of the Remuneration Committee and ESOS Committee of TRIplc. He has no family relationship with any Director and/or major shareholder of TRIplc and has no conflict of interest with TRIplc. 8 TRIplc BERHAD ( A)

11 PROFILE OF DIRECTORS & COMPANY SECRETARY IBRAHIM BIN TOPAIWAH Independent Non-Executive Director Malaysian, aged 56 Ibrahim Bin Topaiwah was appointed to the Board of TRIplc on 31 March He is a graduate of Universiti Kebangsaan Malaysia in 1984 with a Bachelor s Degree in Accounting (Hons). Ibrahim has vast experience in accounting, auditing and finance. He was with ICI Berhad for two (2) years from 1984 to 1986 as an Accountant, with Bank Negara Malaysia for 11 years from 1986 to 1997 as Examiner with last position held as Senior Grade Manager. His role in Bank Negara Malaysia involved executing routine audits on various financial institutions as well as their branches overseas. During his tenure there, he attended several special banking courses locally and overseas held by Federal Reserve Bank of New York, The Central Bank of Pakistan and The Central Bank of Korea amongst others. He subsequently joined PSC Industries Berhad Group, now known as Boustead Heavy Industry Corporation Berhad in 1997 for eight (8) years as Group Chief Internal Auditor. Over the years, he rose up to the rank of Director of Finance before he resigned in 2005 to start his own business. He is currently also a Director of Galeri Teknik Niaga Sdn Bhd which deals in fertilisers. Ibrahim is the Chairman of the Remuneration Committee and ESOS Committee and a Member of the Audit Committee and Nomination Committee of TRIplc. He has no family relationship with any Director and/or major shareholder of TRIplc and has no conflict of interest with TRIplc. WONG POH CHUN, SHRYN Company Secretary Malaysian, aged 50 Wong Poh Chun, Shryn, joined the Group on 24 March She is the Group s Company Secretary responsible for the corporate secretarial and regulatory compliance of the Group. She is a Chartered Secretary, a holder of the Institute of Chartered Secretaries and Administrators ( ICSA ), United Kingdom qualification in 1993 and a member of the Malaysian Association of the Institute of Chartered Secretaries and Administrators ( MAICSA ). She started her career in 1985 and has an accumulated experience of 30 years with three (3) years in the audit division of a public accounting firm, four (4) years in the secretarial division of a public accounting firm and a legal firm and 23 years in three (3) listed Main Market companies. Prior to joining TRIplc Berhad, she was a Company Secretary heading the corporate secretarial department of a listed Main Market company, responsible for the corporate, secretarial and legal matters of the group. Notes: 1. Attendance of Board Meetings The attendance of the Directors at Board of Directors Meetings during the financial year ended 31 May is disclosed in page 19 of this Annual Report. 2. Securities Holdings in the Group The securities holdings of the Directors in the Company is disclosed in page 112 of this Annual Report. Save as disclosed, none of the other Directors have any securities holdings in the Company or the subsidiary companies as all the subsidiary companies are wholly owned by the Company. 3. Directorships in Other Public Companies Save as disclosed in the profile of the respective Directors, none of the Directors hold any directorship in other public companies. 4. Conviction for Offence None of the Directors have been convicted for offences within the past 10 years other than traffic offences, if any. ANNUAL REPORT 9

12 CHAIRMAN S STATEMENT Dear Shareholders, On behalf of the Board of Directors, I am pleased to present to you TRIplc Berhad s Annual Report incorporating the audited Financial Statements of the Group and the Company, for the financial year ended 31 May. BUSINESS ENVIRONMENT The Malaysian economy recorded a stronger growth of 6% in as compared to 4.7% the year before driven by private domestic demand and positive growth in net exports. The construction sector also registered a higher growth of 11.6% in as compared to 10.9% the year before owing mainly to stronger growth in both the residential and non-residential sub-sectors. The growth of the Malaysian economy however moderated in the first half of and the construction sector also recorded lower growth following slower expansion in the residential, non-residential and civil engineering sub-sectors. The moderation in the residential sub-sector was attributed to lower construction activity in residential projects. Growth in the non-residential sub-sector was also slower, but was firm, supported by the construction of commercial, education and healthcare buildings. The civil engineering sub-sector expanded at a slower pace, reflecting the completion and near-completion of large transportation and utility projects. FINANCIAL PERFORMANCE I hereby report that the Group recorded lower revenue of RM16.70 million for the financial year ended 31 May as compared to RM million in the preceding financial year and accordingly, Group profit after tax reduced to RM7.13 million for the financial year from the preceding financial year of RM23.38 million. Masjid Puncak Alam under Group s project management Faculty of Account Management in Zone 1 Phase 2 under facility management services 10 TRIplc BERHAD ( A)

13 CHAIRMAN S STATEMENT Library in Zone 1 Phase 2 under facility management services Student Center and Multipurpose Hall in Zone 1 Phase 2 under facility management services Group net assets as at 31 May stood at RM million, an improvement from RM million from the preceding financial year. In tandem, net assets per share rose to RM2.21, an improvement from the preceding year of RM2.09. The Group continues to operate under healthy financial position with net current assets of RM84.98 million and cash and bank balances of RM77.67 million. OPERATIONS REVIEW During the financial year under review, the Group carries out the facility management services work of the Zone 1 Phase 2 UiTM Puncak Alam Campus constructed by the Group which consist of three faculties to accommodate 5,000 students, hostel accommodation for 2,500 students, 10 units of fellow accommodation, multipurpose hall, maintenance centre, prayer hall, library, student centre, cafeteria and health centre over a project land of approximately 45 acres together with the necessary amenities and utilities. The facility management services work which commenced on 11 April is part of the 23 years concession the Group secured in 2010 where upon completion of the construction work, facility management works is to be carried out for 20 years. Under the concession with UiTM/Government of Malaysia, the Group is paid concession charges which comprise of availability charges for the availability of the facilities and infrastructure, and maintenance charges for the provision of facility management works. PROSPECTS Going forward, the global economy is projected to continue expanding at a moderate pace albeit unevenly and the Malaysian economy is expected to remain on a steady growth path with domestic demand continuing to be the key driver of growth. Despite the expectation that the construction sector will continue with slower expansion, the facility management services work in hand will ensure that the Group has a steady earnings stream going forward from the payment of the availability charges and maintenance charges over the duration of the concession. The Group will continue its efforts to tap onto the construction projects and construction-related projects in the Government including the projects available under the 11th Malaysia Plan and private sector for facility management services while reviewing its assets portfolio for opportunities. With our experienced management team and good track record in the construction, property development and facility management services, we envisage to achieve good prospects for order book replenishment. ACKNOWLEDGEMENTS On behalf of the Board of Directors, I would like to thank all our shareholders, Government authorities, clients, financiers and business partners for their assistance and support. We also wish to express our appreciation to our employees for their contribution, dedication and loyalty and finally, my appreciation to my fellow colleagues on the Board for their commitment to the business and support throughout the year. DATO MUHAMAD BIN MUSTAPHA DIMP, KMN Chairman 14 September ANNUAL REPORT 11

14 PENYATAAN PENGERUSI Para Pemegang Saham yang dihormati, Bagi pihak Lembaga Pengarah, saya dengan sukacitanya membentangkan Laporan Tahunan TRIplc Berhad yang menggabungkan Penyata Kewangan Kumpulan dan Syarikat yang telah diaudit bagi tahun kewangan berakhir 31 Mei. PERSEKITARAN PERNIAGAAN Ekonomi Malaysia mencatat pertumbuhan yang lebih kukuh sebanyak 6% pada tahun berbanding 4.7% pada tahun sebelumnya yang didorong oleh permintaan domestik swasta dan pertumbuhan positif dalam eksport bersih. Sektor pembinaan juga mencatatkan pertumbuhan yang lebih tinggi sebanyak 11.6% pada tahun berbanding dengan 10.9% pada tahun sebelumnya terutamanya disebabkan oleh pertumbuhan yang lebih kukuh dalam kedua-dua subsektor kediaman dan bukan kediaman. Pertumbuhan ekonomi Malaysia bagaimanapun sederhana pada separuh pertama tahun dan sektor pembinaan juga mencatatkan pertumbuhan yang lebih rendah berikutan peningkatan yang lebih perlahan dalam subsektor kediaman, bukan kediaman dan kejuruteraan awam. Pertumbuhan yang sederhana dalam subsektor kediaman disebabkan oleh aktiviti pembinaan yang lebih rendah dalam projek-projek kediaman. Pertumbuhan dalam subsektor bukan kediaman juga lebih perlahan, tetapi disokong kukuh dengan pembinaan bangunan-bangunan komersial, pendidikan dan penjagaan kesihatan. Subsektor kejuruteraan awam berkembang pada kadar yang lebih perlahan, mencerminkan kepada projekprojek besar yang siap dan hampir siap bagi pengangkutan dan utiliti. PRESTASI KEWANGAN Saya dengan ini melaporkan bahawa Kumpulan telah mencatat perolehan yang lebih rendah iaitu RM16.70 juta bagi tahun kewangan berakhir 31 Mei berbanding RM juta pada tahun kewangan sebelumnya dan demikian, keuntungan selepas cukai Kumpulan berkurangan kepada RM7.13 juta bagi tahun kewangan semasa berbanding tahun kewangan sebelum ini iaitu RM23.38 juta. Aset bersih Kumpulan setakat 31 Mei berjumlah RM juta, peningkatan dari RM juta pada tahun kewangan sebelum ini. Sejajar, aset bersih sesaham turut meningkat kepada RM2.21 satu peningkatan dari tahun sebelumnya iaitu RM2.09. Kumpulan terus beroperasi di bawah kedudukan kewangan yang baik dengan aset semasa bersih sebanyak RM84.98 juta dan baki tunai dan bank sebanyak RM77.67 juta. Pekerja am menjalankan kerja penyelenggaraan di kawasan fakulti Zon 1 Fasa 2 Pasukan Perkhidmatan Pengurusan Kemudahan Kumpulan TRIplc 12 TRIplc BERHAD ( A)

15 PENYATAAN PENGERUSI Pusat kediaman Pelajar di Zon 1 Fasa 2 di bawah projek penyelenggaraan Syarikat ULASAN OPERASI Berdasarkan kepada peninjauan pada tahun kewangan ini, Kumpulan telah menjalankan perkhidmatan pengurusan fasiliti kerja Zon 1 Fasa 2 UiTM Kampus Puncak Alam yang dibina oleh Kumpulan, terdiri daripada tiga (3) fakulti untuk menampung 5,000 pelajar, penginapan asrama untuk 2,500 pelajar, 10 unit kediaman felo, dewan serbaguna, pusat penyelenggaraan, surau, perpustakaan, pusat pelajar, kafeteria dan pusat kesihatan di atas tapak projek seluas 45 ekar lengkap dengan kemudahan sokongan dan utiliti. Kerja-kerja perkhidmatan pengurusan fasiliti yang bermula pada 11 April adalah sebahagian daripada konsesi selama 23 tahun yang diperolehi Kumpulan pada 2010 dan akan dijalankan selama 20 tahun selepas kerja-kerja pembinaan selesai. Di bawah konsesi dengan UiTM/Kerajaan Malaysia, Kumpulan dibayar caj konsesi yang merangkumi caj kebolehsediaan untuk penggunaan fasiliti dan infrastruktur, serta caj penyelenggaraan bagi kerja-kerja pengurusan fasiliti. PROSPEK Melangkah ke hadapan, ekonomi global dijangka terus berkembang pada kadar yang sederhana walaupun tidak sekata dan ekonomi Malaysia dijangka kekal pada landasan pertumbuhan yang stabil dengan permintaan dalam negeri yang terus menjadi pemacu utama pertumbuhan. Walaupun jangkaan bahawa sektor pembinaan akan berkembang dengan lebih perlahan, kerja perkhidmatan pengurusan fasiliti yang diperolehi akan memastikan Kumpulan mempunyai aliran pendapatan yang stabil pada masa hadapan daripada pembayaran caj kebolehsediaan dan penyelenggaraan sepanjang tempoh konsesi. Kumpulan akan meneruskan usaha untuk meneroka projekprojek pembinaan dan projek-projek berkaitan pembinaan dalam Kerajaan termasuk projek-projek yang tersedia di bawah Rancangan Malaysia ke-11 dan sektor swasta untuk perkhidmatan pengurusan fasiliti serta mencari peluang dengan mengkaji semula portfolio aset-aset Kumpulan. Dengan pasukan pengurusan yang berpengalaman dan rekod yang baik dalam pembinaan, pembangunan hartanah dan perkhidmatan pengurusan fasiliti, kami menjangkakan untuk mencapai prospek yang baik untuk penambahan semula nilai buku kerja. PENGHARGAAN Bagi pihak Lembaga Pengarah Syarikat, saya ingin mengucapkan terima kasih kepada para pemegang saham, pihak berkuasa kerajaan, pelanggan, pembiaya dan rakan perniagaan di atas bantuan dan sokongan mereka. Saya juga ingin merakamkan penghargaan kepada kakitangan syarikat di atas sumbangan, sifat penuh dedikasi dan kesetiaan serta akhirnya, penghargaan saya kepada rakan-rakan sejawat di dalam Lembaga Pengarah di atas komitmen mereka kepada perniagaan dan sokongan sepanjang tahun ini. DATO MUHAMAD BIN MUSTAPHA DIMP, KMN Pengerusi 14 September ANNUAL REPORT 13

16 CORPORATE DIARY October Workshop on Goods and Services Tax A 2-day GST workshop was arranged at Monterez Golf & Country Club for staff to equip them with GST knowledge for continuous learning. 25 November TRIplc s 22nd AGM The 22nd AGM of TRIplc was held at Holiday Inn Glenmarie where shareholders received the audited financial statements for financial year, re-appointed directors and auditors and approved the granting of ESOS to newly appointed Director. 25 November Year-end Staff Get Together A year end staff get together was held in conjunction with the 22nd AGM at Holiday Inn Glenmarie where staff gathered to exchange gifts followed by a sumptuous buffet at the hotel s café. 19 December TRIplc s Zakat Distribution Ceremony A zakat distribution ceremony was held at the Masjid Bandar Puncak Alam where zakat were distributed to those deserving. 14 TRIplc BERHAD ( A)

17 CORPORATE DIARY 3 January Family Day at Sunway Lagoon A staff family day was arranged at Sunway Lagoon to encourage interaction between staff. 7 March Recreational Activity at Forest Research Institute Malaysia, Kepong A trekking activity was arranged at the FRIM to foster friendship and promote healthy lifestyle. 12 August Talk on Investment in Amanah Saham Nasional Berhad via Monthly Salary Deduction An investment talk by representative from Amanah Saham Nasional Berhad was organised at the corporate office to encourage staff to invest for their future. 13 August Hari Raya Aidil Fitri Celebration Staff gathered at Bandar Puncak Alam to celebrate Hari Raya Aidil Fitri with business associates. ANNUAL REPORT 15

18 CORPORATE RESPONSIBILITY A programme to help the poor was organized to identify the deserving poor for monetary assistance The Group is aware of its corporate responsibility ( CR ) in ensuring the sustainability of the organisation and concurrently contributing to a better society. Hence, the Group is continuously integrating sustainability and social well-being into every aspect of its operations and working culture. The Group will continue to improve the organisation by doing business in a responsible manner and to support communities in ways that enhance the Group s reputation with its employees, clients, business associates and other stakeholders. CR in the Marketplace The Group recognises that market confidence in its business operations and business conduct is of paramount importance to its continued success. Hence various best practices, policies and procedures on business ethics and values, good corporate governance and procurement policies, quality and stakeholder engagement, are enforced throughout the Group such as: Implementing an effective and efficient operational structure for timely delivery of quality products and services, accident-free operations, elimination of occupational health hazards and environmental conservation and preservation with continuous maintenance programs. Practicing of good governance with commitment in ensuring true and fair financial reporting with the maintenance of a proper risk management framework for safeguarding the Group s assets and prevention of fraud and other irregularities. Disclosing and transfering of quality information to investors, regulators, clients, suppliers, employees and general public with proper accountability and transparency. Controlling of the purchasing process to ensure that materials and/or services are purchased to satisfy clients requirements and contract specifications in terms of pricing, quality, availability and timely delivery. Carrying out regular reviews, process improvements and quality control assessments eg. with the adoption of ISO 9001:2008 system certification to continuously enhance the production process and quality of products and services to prevent product defects, accidents, health and environmental hazards, at the same time satisfying customers requirements and meeting the needs of stakeholders and the communities at large. 16 TRIplc BERHAD ( A)

19 CORPORATE RESPONSIBILITY CR in the Workplace The Group strongly believes that its employees is the key asset as they play a vital role in the success and sustainability of the Group and hence, constantly invests in its employees through the following approaches: Ensuring that the health and safety of its employees are taken care of at the workplace by the setting-up of a Safety Committee to monitor, review and improve on the health and safety rules, operations and performance and to raise and promote health and safety awareness at all levels. Ensuring that staff welfare is taken care of by providing a comprehensive group health insurance policy to cover them in the event of hospitalisation, normal illness and accident cases. A Group Term Life Insurance Policy is provided for each staff to meet any untoward incidents. Ensuring a harmonious workplace by practising nonprejudicial policies against race, gender or age. This guiding principle promulgates basic human and labour rights for maintaining good governance and a healthy and professional workplace. Continuous upgrading of employees skill and knowledge in order for them to excel in their work performances through training programmes and workshops. Promoting a balanced healthy work-life with the formation of a sports club to promote sports and social activities. Promoting a sense of belonging amongst staff by providing a platform for staff to interact via informed gatherings and other activities. Providing competitive remuneration package to the employees. CR in the Environment The Group endeavours to preserve the environment in all its project sites by practicing, amongst others, the following: Complying with the rules, regulations and directives set by the authorities on environmental safety and protection. Building proper drainage and water discharge systems in addition to other preventive measures such as sedimentation ponds, silt traps and bunkers to prevent wastes being discharged into rivers particularly during heavy downpours. Implementing effective controlled earthworks procedures and flood mitigation controls that includes adequate earth drainage and detention ponds to regulate rainwater flow to prevent flooding of surrounding low-lying areas. Putting in place preventive measures such as phased developments, hill slopes turfing, progressive revegetation, hydro-seeding, slope stabilisation and silt/sediment traps to avoid soil erosion and sedimentation. Forbidding of open burning to prevent smoke and carbon dioxide emissions affecting the air quality of the surrounding areas. Using of proper piling methods during foundation works to reduce noise pollution and soil contamination. CR in the Community The Group has always played its role in support of the community through sponsorship of worthy causes and the support of events that promote awareness on the community s needs by supporting associations to organise events for the wider community. Staff family day at Sunway Lagoon Trekking activity at FRIM for staff ANNUAL REPORT 17

20 CORPORATE GOVERNANCE STATEMENT The Board of Directors of the Company firmly believes that good corporate governance is essential for the protection of the interest of stakeholders and enhancement of value of shareholders, thus is committed to the conduct of good governance practices throughout the Group. The governance practices adopted by the Group will be continuously evaluated to ensure its practices and systems are in line with the underlying tenets of the principles and recommendations set out in the Malaysian Code on Corporate Governance 2012 ( the Code ). This statement outlines the manner in which the Group has applied the principles of good governance and the extent to which it has complied with the recommendations during the financial year 31 May. Where a specific recommendation of the Code has not been observed during the financial year, the reasons for non-observation and the alternative practice will be mentioned. 1. Board of Directors i. Board Composition During the financial year, the Board of the Company consisted of five (5) members of which two (2) were Executive Directors and three (3) were Independent Non-Executive Directors. Subsequent to the financial year, an additional one (1) Executive Director was appointed to the Board on 10 June which still complies with the Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ). The Board comprises members with a wide range of experiences such as finance, accounting, business, public administration and technical aspects which are vital for the successful direction of the Group. A brief profile of each Director is presented in pages 7 to 9 of this Annual Report. ii. Appointments to the Board The Nomination Committee is responsible for the selection of suitable candidates based on criteria expected of a Director before making recommendations to the Board for approval for appointment to the Board and Board Committees. The Nomination Committee also reviews annually the required mix of skills and experience of Directors, effectiveness of the Board as a whole, succession plans, board diversity and other qualities of the Board including core competencies which Directors should bring to the Board. The Board is aware of the gender diversity policy and target recommended in the Code. When considering for new appointment on the Board, the Nomination Committee and the Board will always evaluate the suitability of candidates solely in meeting the needs of the Company based on candidates experience, competency, character, time commitment, integrity and potential contribution while giving due consideration for gender diversity. iii. Board Duties and Responsibilities The Board is accountable and responsible for the performance of the Company and the manner in which the affairs of the Company are managed. A Board Charter which sets out the role, functions, composition, operation and processes of the Board was adopted on 29 January 2013 to provide guidance to the Board to ensure that all Board members are aware of their duties and responsibilities. The Board Charter also assist the Board in the assessment of its own performance and of its individual Directors. The contents of the Board Charter can be viewed at the Company s website at The Chairman is an Independent Non-Executive Director. The role of the Independent Non-Executive Chairman and the Managing Director are distinct and separate to ensure the integrity and effectiveness of the governance process of the Board. The Independent Non-Executive Chairman is responsible for the leadership, effectiveness, conduct and governance of the Board. The Managing Director has the overall responsibilities over the day to day management of the business of the Group and implementation of Board s policies, strategies and decisions. A strategic plan and budget is expected to be drawn-up and tabled by the management on annual basis. 18 TRIplc BERHAD ( A)

21 CORPORATE GOVERNANCE STATEMENT 1. Board of Directors (cont'd) iii. Board Duties and Responsibilities (cont'd) The Non-Executive Directors bring an independent judgement to bear on issues of strategy, performance, resources and standards of conduct. However, all Board members should also be capable of and perceived to exercise independent judgement. Mr Jumsi Bin Batri has been identified by the Board as the Senior Independent Non-Executive Director of the Board to whom concerns of shareholders and other stakeholders may be conveyed. As a Senior Independent Non-Executive Director, he will also act as a sounding board for the Chairman and provides leadership and advice to the Board to facilitate the work and to resolve any issues of concern of Non-Executive Directors. As one of the measures to foster commitment of the Directors to ensure they devote sufficient time and attention to the affairs of the Company, the Directors are required to notify the Chairman before accepting any new directorship and such notification shall include an indication of time that will be spent on the new appointment. The Chairman shall also notify the Board if he has any new directorship or significant commitments outside the Company. All Directors shall not hold more than five (5) directorships in listed companies. iv. Corporate Responsibility The Board is aware of its responsibility in ensuring the sustainability of the organisation and concurrently being a socially responsible corporate entity. The Group s sustainability and social responsibility initiatives are explained in the corporate responsibility statement set out in pages 16 to 17 of this Annual Report. v. Ethical Conduct In line with the Company s aim to drive the Group to be a respected business entity, the Board and management of the Group is committed to promote an ethical, professional and exemplary corporate conduct within the Group via leadership by example. A Code of Conduct was established and adopted on 29 January 2013 to provide guidance on the standards of behaviour expected of all Directors and employees of the Group including business partners where applicable. The Code of Conduct is not intended to be exhaustive as all parties are expected to exercise sound judgement in making the right decisions. The contents of the Code of Conduct can be viewed at the Company s website at vi. Board Meetings The Board meets at least four (4) times in a year and additional meetings may be held as and when required. During the financial year 31 May, four (4) Board of Directors Meetings were held and the details of attendance of each of the Directors are as follows: No. Name of Directors Number of Meetings Held Whilst in Office Number of Meetings Attended 1. Dato Muhamad Bin Mustapha Zainal Abidin Bin Ismail Yusof Bin Badawi (Appointed on 10 June ) Ar Mohd Khalid Bin Mohammed Yusuf Jumsi Bin Batri Ibrahim Bin Topaiwah 4 4 The Chairman is responsible for organising the agenda of board meetings and every member of the Board is provided in advance of the board meeting with an agenda and a set of papers comprising reports and other relevant information to enable the Board to discharge its responsibilities. The board papers include amongst others, the financial performance of the Group, the performance of the projects of the Group and major operational, financial and corporate issues. ANNUAL REPORT 19

22 CORPORATE GOVERNANCE STATEMENT 1. Board of Directors (cont'd) vi. Board Meetings (cont'd) In addition, there is a schedule of matters specifically reserved for the Board s decision which includes the approval of the Group s corporate plans and programmes, annual budgets including major capital commitments, new ventures, material acquisitions and disposals of undertakings and properties and changes to the management and control structure of the Group including key policies and delegated authority limits. All Directors have access to all information within the Group whether as a full Board or in their individual capacity. The Directors may also obtain independent professional advice in the furtherance of their duties at the Company s expense in accordance with the procedure of the Company. All Directors have access to all staff for information and the advice and services of the Company Secretary especially in relation to procedural and regulatory requirements, in carrying out their duties. vii. Board Committees The Board has delegated certain functions to the Committees it established to assist in the execution of its responsibilities for the Group. Each Board Committee operates under clearly defined terms of reference. The minutes of the respective Committees are incorporated in the board papers for the Board s information. The composition and function of each Committee is as set out below: a. Audit Committee The composition, terms of reference and activities of the Audit Committee are set out in pages 27 to 31 of this Annual Report. b. Nomination Committee The Nomination Committee comprises the following members: Jumsi Bin Batri, Chairman Dato Muhamad Bin Mustapha, Member Ibrahim Bin Topaiwah, Member (Senior Independent Non-Executive Director) (Independent Non-Executive Chairman) (Independent Non-Executive Director) The functions of the Nomination Committee are: To identify and recommend to the Board, candidates for all directorships to be filled by the shareholders or the Board. To consider, in making its recommendations, candidates for directorships proposed by Chief Executive Officer and, within the bounds of practicability, by any other senior management or any Director or shareholder or outsourced service providers. To recommend to the Board, Directors to fill the seats on Board Committees. To review annually the required mix of skills and experience and other qualities, including core competencies which directors should bring to the Board. To assess annually the effectiveness of the Board as a whole, the Committees of the Board and the contribution of each individual Director on an ongoing basis. The Nomination Committee will meet as required. Two (2) meetings which were attended by all members, were held during the financial year. 20 TRIplc BERHAD ( A)

23 CORPORATE GOVERNANCE STATEMENT 1. Board of Directors (cont'd) vii. Board Committees (cont'd) b. Nomination Committee (cont d) During the financial year, the Nomination Committee had carried out the following activities: Considered candidate for directorship. Assessed the independence of Independent Directors, the contribution of individual Directors and Chairman and the effectiveness of the Board and Board Committees. Assessed the training needs of Directors. Assessed the sufficiency of time allocated by Non-Executive Directors for the Company. Assessed the suitability of candidates due for re-election as Directors by shareholders. c. Remuneration Committee The Remuneration Committee comprises the following members: Ibrahim Bin Topaiwah, Chairman Zainal Abidin Bin Ismail, Member Jumsi Bin Batri, Member (Independent Non-Executive Director) (Managing Director) (Senior Independent Non-Executive Director) The functions of the Remuneration Committee are: To develop and recommend to the Board the remuneration package of the Executive Directors in all its forms, drawing from outside advice as necessary. To review the annual remuneration package to be paid to each Director for his services as a member of the Board such that the levels of remuneration are sufficient to attract and retain the Directors needed to run the Company successfully. The Remuneration Committee will meet as required. One (1) meeting which was attended by all members, was held during the financial year to consider the remuneration package of Executive Directors of the Company. d. ESOS Committee A new ESOS Committee was established for the Company s new ESOS scheme and comprises the following members: Ibrahim Bin Topaiwah, Chairman Zainal Abidin Bin Ismail, Member Jumsi Bin Batri, Member (Independent Non-Executive Director) (Managing Director) (Senior Independent Non-Executive Director) The ESOS Committee, assisted by a ESOS Working Committee, is responsible for administering and regulating its own proceedings in such manner as it shall in its discretion deem fit, do all acts and things, execute all documents and delegate any of its powers and duties relating to the Employees Share Option Scheme ( the Scheme ) as it may in its discretion consider to be necessary or desirable for giving effect to the Scheme and within such powers and duties as are conferred upon it by the Board and shall include the powers to: construe and interpret the ESOS By-laws, the Scheme, Offer Letter and options granted under the Scheme, to define the terms therein and to recommend to the Board to establish, amend and revoke rules and regulations relating to the Scheme and its administration subject to the provisions of the Scheme. The ESOS Committee in the exercise of this power may correct any defect, supply any omission, or reconcile any inconsistency in the ESOS By-laws or in any documents pursuant thereto, including any agreement providing for an option, in a manner and to the extent it shall deem necessary to expedite and make the Scheme fully effective. ANNUAL REPORT 21

24 CORPORATE GOVERNANCE STATEMENT 1. Board of Directors (cont'd) vii. Board Committees (cont'd) d. ESOS Committee (cont d) determine all issues of policy and expediency that may arise in the administration of the Scheme and generally exercise such powers and perform such acts as are deemed necessary or expedient to promote the best interests of the Company. The ESOS Committee will meet on a need basis subject to a minimum of at least once a year. One (1) meeting which was attended by all members was held during the financial year. e. Board Management Committee The Board Management Committee comprises the following members: Zainal Abidin Bin Ismail, Chairman Yusof Bin Badawi, Member (Appointed on 3 August ) Ar Mohd Khalid Bin Mohammed Yusuf, Member Shamshiah Binti Abu Bakar, Member Rohani Binti Othman, Member (Left on 15 June ) (Managing Director) (Deputy Managing Director) (Chief Operating Officer) (General Manager, Corporate Finance & Accounts) (General Manager, Corporate Affairs Division (HRA/Legal)) The Board Management Committee is responsible in reviewing and approving all matters of the Group except for a formal schedule of matters specifically reserved for the Board s decision. In cases where there is doubt, it shall then be tabled to the Board for consideration and approval. The Board Management Committee shall meet as and when the need arises. 14 meetings which were attended by all members, were held during the financial year. viii. Board Evaluation The Board, through the Nomination Committee, reviews and evaluates its performance, the performance of individual Directors and the various Committees annually to ensure Board effectiveness. The evaluation comprises a Board assessment by individual Directors and self and peer assessment. The assessment of the Board by individual Directors is based on specific criteria, covering areas such as the Board mix and composition, quality of information and decision making, boardroom activities and Board Committees performance. For self and peer assessment, the assessment criteria cover areas on fit and proper, contribution and performance, caliber and personality. An assessment of independence of an Independent Director is also conducted by the Board annually. The criteria for assessing the independence of an Independent Director cover areas on the relationship between the Independent Director and the Group and his involvement in any significant transaction with the Group which could interfere with the exercise of independent judgement or the ability to act in the best interest of the Company. The tenure of the Independent Directors is capped at nine (9) years provided approved by shareholders at the annual general meeting. ix. Re-election In accordance with the Articles of Association of the Company, all Directors who are appointed to the Board are subject to election by shareholders at the first Annual General Meeting after their appointment and one-third or nearest one-third of the Directors, excluding those who are newly appointed to the Board, are required to retire by rotation at each Annual General Meeting. The Directors to retire in each year shall be those who have been longest in office since their last election, but as between persons who became Directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by lot. 22 TRIplc BERHAD ( A)

25 CORPORATE GOVERNANCE STATEMENT 1. Board of Directors (cont'd) ix. Re-election (cont d) In addition, any person over the age of 70 years shall retire pursuant to Section 129(2) of the Companies Act 1965 and be subjected to appointment by shareholders at the same meeting. x. Directors Training and Orientation of New Directors All the Directors have completed the Mandatory Accreditation Programme ( MAP ) organised by Bursa Securities. The Board has assessed the performance of each Director and encourages its members to enroll in appropriate continuing education programme to equip them to serve the interests of the Company. During the financial year under review, the Directors have attended various training programmes as follows: No. Director Date Held Topic Organiser 1. Dato Muhamad Bin Mustapha 30 October 1) BDO Goods and BDO Services Tax (GST) Malaysia 2. Zainal Abidin Bin Ismail 21 October 1) National Tax Seminar Lembaga Hasil Dalam Negeri Selangor 3. Yusof Bin Badawi (Appointed on 10 June ) 4. Ar Mohd Khalid Bin Mohammed Yusuf 26 June 30 October 2) BDO Goods and BDO Services Tax (GST) Malaysia ) Green Building Forum Persatuan Arkitek Malaysia 26 June 2) Kuala Lumpur Design Forum Persatuan Arkitek Malaysia 27 & 28 June 3) International Architectural Design Conference 5. Jumsi Bin Batri 30 October 1) BDO Goods and Services Tax (GST) Malaysia 6. Ibrahim Bin Topaiwah 18 June 1) The Board Role in Governance & Audit Committee Oversight Responsibilities - Passion Beyond Numbers Persatuan Arkitek Malaysia BDO MAICSA In addition, the Company Secretary highlights the relevant guidelines on statutory and regulatory requirements from time to time to the Board and the external auditors would brief the Audit Committee members on the changes to the Malaysian Financial Reporting Standards, if any. In relation to the orientation of new Directors, it is the primary responsibility of the Company Secretary with appropriate assistance from the Executive Directors, to ensure that all newly appointed Directors are provided with the appropriate orientation involving briefing the new Directors on the corporate structure and business of the Group and introduction to other members of the Board and senior management staff. ANNUAL REPORT 23

26 CORPORATE GOVERNANCE STATEMENT 1. Board of Directors (cont d) xi. Directors Remuneration The Group s policy on Directors remuneration is to ensure that they are sufficiently competitive to attract and retain capable Directors. The remuneration package of the Executive Directors is structured to commensurate with corporate and individual performance, seniority in service, experience and scope of responsibility. The determination of remuneration packages for Non-Executive Directors reflects the level of responsibilities undertaken and contribution to the Company. The Remuneration Committee is responsible for developing and reviewing the remuneration package of Executive Directors. The remuneration of the Executive and Non-Executive Directors is a matter for consideration by the Board as a whole. Directors shall abstain from discussions pertaining to their own remuneration packages. The aggregate remuneration of Directors received/receivable from the Company and its subsidiary companies for the financial year 31 May are as follows: Executive Directors Non-Executive Directors Total Directors fees (RM) - 35,000 35,000 Salaries (RM) 930, ,193 Bonus (RM) 214, ,367 Employees Provident Fund (RM) 171, ,547 Fixed allowances (RM) - 132, ,000 Meeting allowances (RM) 4,600 14,600 19,200 Share options granted under share options scheme (RM) 327, , ,700 Benefits-in-kind (RM) 158,420 22, ,777 1,806, ,157 2,189,784 The number of Directors whose remuneration falls within the following bands are: Number of Directors Range of Remuneration Executive Non-Executive Below RM50,000-1 RM50,001 to RM100,000-2 RM100,001 to RM150, RM750,001 to RM800, RM900,001 to RM950, TRIplc BERHAD ( A)

27 CORPORATE GOVERNANCE STATEMENT 2. Shareholders i. Dialogue between the Company and Investors The Company acknowledges the importance of communication with its shareholders, institutional and potential investors. As such, the Company ensures major corporate developments and events and quarterly financial results are promptly and timely announced via Bursa Securities to provide its shareholders and potential investors an overview of the Group s performance and operations. To further enhance investor relations and shareholders communication, the Group has established a website at www. triplc.com.my where corporate and financial information of the Company are easily and conveniently accessible. Any enquiries or concerns regarding the Company may also be conveyed via info@triplc.com.my through the Contact Us page or in writing to the following: The Company Secretary TRIplc Berhad No. 6 & 8, Jalan Apollo CH U5/CH Bandar Pinggiran Subang, Seksyen U Shah Alam Selangor Darul Ehsan The Company will also hold open dialogues with institutional shareholders upon request or when the need arises. Concerns of shareholders may also be conveyed to Mr Jumsi Bin Batri, the Senior Independent Non-Executive Director of the Board, via jumsi@triplc.com.my. In ensuring that the information disclosed complies strictly with the Listing Requirements of Bursa Securities, the Company have identified persons authorised and responsible for approving and disclosing material information to shareholders and investors. The above are based on the Company s policy to adopt an open and transparent policy in respect of the Company s relationship with its investors and shareholders and to use the Company s best endeavours to identify and evaluate issues of concern to the investors and shareholders. ii. The Annual General Meeting The Annual General Meeting is also a mean of communication with shareholders. At least 21 days prior to the Annual General Meeting, the Annual Report and Circular to Shareholders (if any) will be mailed to the shareholders to inform them of the financial performance and other corporate information relating to the Group. Shareholders who are unable to attend are allowed to appoint proxies to attend, speak and vote on their behalf. Shareholders are given the opportunity to seek and clarify any pertinent and relevant issues raised in the meeting in relation to the operations and performance of the Group and to exchange views with the Board members. The shareholders will be informed of their right to demand for a poll and substantive resolutions, if any, will be put for voting. Where appropriate, a press conference is held immediately after the Annual General Meeting where the members of the media are advised of the resolutions passed and to answer questions in relation to the Group s operations posed by the reporters. 3. Accountability and Audit i. Financial Reporting The Board is responsible for ensuring a balanced and understandable assessment of the Group s financial position and prospects in its quarterly and annual reports and other price-sensitive public reports and reports to the regulators. The Audit Committee assists the Board by reviewing the disclosure information to ensure completeness, accuracy and validity of the information in the reports and that the financial statements comply with Malaysian Financial Reporting Standards and International Financial Reporting Standards. ANNUAL REPORT 25

28 CORPORATE GOVERNANCE STATEMENT 3. Accountability and Audit (cont d) i. Financial Reporting (cont d) As one of the measures in ensuring that the financial statements are a reliable source of financial information, the Audit Committee has assessed the suitability and independence of the external auditors and would assess them annually to ensure the independence of the external auditors is not impaired by the provision of non audit services to the Group. The external auditors also provides written assurance to the Audit Committee that they are and have been independent throughout the conduct of the audit engagement in accordance with the independence criteria set out by the Malaysian Institute of Accountants. A Statement on Directors Responsibility and a Statement by Directors together with a Statutory Declaration made in relation to the preparation of the annual audited financial statements are set out below and in page 43 of this Annual Report. ii. Directors Responsibility Statement in Respect of Audited Financial Statements Pursuant to the Companies Act 1965, Directors are required to prepare financial statements for each financial year which give a true and fair view of the financial position of the Group and the Company as at the financial year end and of the financial performance and cash flows of the Group and the Company for that period. In preparing the financial statements of TRIplc Berhad, the Directors have ensured that appropriate accounting policies have been used and applied consistently and supported by reasonable and prudent judgements and estimates. The Directors have also ensured that all applicable approved accounting standards have been followed. To enable the Directors to ensure that the financial statements comply with the provisions of the Companies Act 1965, the Directors have ensured that proper accounting records have been kept which are able to disclose with reasonable accuracy at any time, the financial position of the Company. iii. Risk Management and Internal Control The Board is aware of its ultimate responsibility for reviewing the Company s risks, approving the risk management framework policy and overseeing the Company s strategic risk management and internal control framework. The Audit Committee assists the Board in discharging these responsibilities. The Audit Committee is supported by an Internal Audit Function and a Risk Management Working Committee, both reports directly to the Audit Committee. The Audit Committee also met with the external auditors twice a year without the presence of the management to allow discussion of any issues arising from the audit exercise and any matters which the external auditors may wish to raise. A Risk Management and Internal Control Statement is set out in pages 32 to 34 of this Annual Report to provide an overview of the risk management framework and state of internal control within the Group. iv. Reporting of Violations or Raising of Concerns Any employee who knew or suspected a violation of the Company s Code of Conduct is encouraged to report the concern or whistle blow. The Code of Conduct has a specific section which outlines the avenues and procedures for any employee to communicate their concerns about any suspected and/or known misconduct, wrongdoings, corruption, fraud, waste and/or abuse to the Board without management s intervention and interference. v. Relationship with the External Auditors The Board has via the Audit Committee, established a formal and transparent arrangement for maintaining an appropriate relationship with its external auditors. The role of the Audit Committee in relation to the external auditors is described in the Audit Committee Report in pages 27 to 31 of this Annual Report. This statement is made by the Board of Directors in accordance with a resolution dated 14 September. 26 TRIplc BERHAD ( A)

29 AUDIT COMMITTEE REPORT The Audit Committee assists the Board in ensuring the integrity of the Group s financial procedures and internal control systems for safeguarding assets, managing risks and promotes sound and profitable business operations. During the financial year 31 May, the Audit Committee met five (5) times and the composition and attendance record of the Audit Committee members are as follows: No. Name of Directors Designation Number of Meetings Held Whilst in Office Number of Meetings Attended 1. Jumsi Bin Batri Chairman 2. Dato Muhamad Bin Mustapha Member 3. Ibrahim Bin Topaiwah Member Independent Non-Executive Director who is also the Senior Independent Director of the Company Independent Non-Executive Chairman Independent Non-Executive Director who is a member of the Malaysian Institute of Accountants ( MIA ) The Company Secretary acts as the Secretary of the Audit Committee. Also in attendance are the Internal Audit Manager, the Managing Director and the General Manager of Corporate Finance & Accounts. Composition and Terms of Reference of the Audit Committee 1. Composition The Audit Committee shall comprise of not less than three (3) members, of which all shall be non-executive directors with a majority of them being independent directors. No alternate director shall be appointed a member of the Audit Committee. A Chairman shall be elected from among their number who shall be an independent director. At least one (1) member of the Audit Committee: a. must be a member of the Malaysian Institute of Accountants; or b. if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years working experience and: he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or fulfills such other requirements as prescribed or approved by the Exchange. The term of office and performance of the Audit Committee and each of its members shall be reviewed by the Board at least once every three (3) years to determine whether the Audit Committee and members have carried out their duties in accordance with the terms of reference. 2. Meetings There shall be a minimum of four (4) meetings in a financial year and upon the request of its members, the management, the internal auditors or the external auditors, the Chairman of the Audit Committee shall convene a meeting of the Audit Committee to consider any matter within the scope and responsibilities of the Audit Committee or any matter the external auditors believe should be brought to the attention of the directors or shareholders. At least twice a year, the Audit Committee shall meet with the external auditors without any executive officer of the Group being present. ANNUAL REPORT 27

30 AUDIT COMMITTEE REPORT 2. Meetings (cont d) Two (2) members present of which a majority must be independent directors shall form a quorum. Any questions arising at any meeting of the Audit Committee shall be decided by a majority of votes. In case of an equality of votes, the votes of the independent directors shall prevail. The Company Secretary shall act as the Secretary of the Audit Committee and minutes of each meeting is distributed to each member of the Board. Other directors and employees shall attend any particular Audit Committee meeting only at the Audit Committee s invitation, specific to the relevant meeting. 3. Authority The Audit Committee for the performance of its duties shall: have the authority to investigate any matter within its terms of reference; have the resources which are required to perform its duties; have full and unrestricted access to any information pertaining to the Company; have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity; be able to obtain independent professional or other advice; and be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Group, whenever deemed necessary. 4. Duties and Responsibilities The duties and responsibilities of the Audit Committee are to serve as a focal point for communication between non-audit committee directors, the external auditors, internal auditors and the management, to assist the Board in fulfilling its fiduciary responsibilities as to accounting policies and reporting practices of the Group and the sufficiency of auditing relative thereto and to assist the Board in assuring the independence of the Company s external auditors, the integrity of management, the adequacy of disclosures to shareholders, and the adequacy and integrity of internal controls. 5. Functions The functions of the Audit Committee should include the review and report of the following to the Board of the Company: i. Internal Audit to review the adequacy of the scope, functions, competency and resources of the internal audit functions, and that it has the necessary authority to carry out its work; to review the internal audit programme, processes, the results of the internal audit programme, processes or investigation undertaken and where necessary, ensure that appropriate action is taken on the recommendations of the internal audit function; to review any appraisal or assessment of the performance of members of the internal audit function; to approve any appointment or termination of senior staff members of the internal audit function; to note resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning; and to consider the major findings of internal investigations and management s responses, and ensure appropriate actions are taken on the recommendations of the internal audit function. 28 TRIplc BERHAD ( A)

31 AUDIT COMMITTEE REPORT 5. Functions (cont'd) ii. External Audit to discuss with the external auditors before the audit commences, their audit plan and ensure coordination where more than one audit firm is involved; to discuss with the external auditors, their evaluation of the system of internal controls; to discuss with the external auditors, their audit report; to discuss with the external auditors on the assistance given by the employees to the external auditors; to discuss problems and reservations arising from the interim and final audits, and any matters the external auditors may wish to discuss (in the absence of Management where necessary); to review with the external auditors, their management letter and management s response; to consider and recommend the appointment of the external auditors, the audit fee and any questions of resignation or dismissal; and to approve the provision of non-audit services by the external auditors. iii. Financial Reporting to review the quarterly results and annual financial statements, prior to the approval by the Board, focusing particularly on: - any changes in or implementation of any accounting policies and practices; - significant adjustments and unusual events arising from the audit; - the going concern assumption; and - compliance with accounting standards and other legal requirements; and to review all prospective financial information provided to the regulators and/or the public. iv. Risk Management To oversee the risk management function of the Group including the adequacy and integrity of the Group s internal control system and report to the Board significant changes in the business and the external environment which affect key risks. v. Related Party Transactions To consider any related party transaction and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity. They are also required to ensure that the Board report such transactions annually to the shareholders via the annual report. vi. ESOS To verify the options allocation of the Company s Employees Share Option Scheme ( ESOS ) at the end of each financial year to ensure they are in compliance with the allocation criteria of the share option. ANNUAL REPORT 29

32 AUDIT COMMITTEE REPORT 5. Functions (cont'd) vii. Reporting of Breaches To report promptly to Bursa Malaysia Securities Berhad on any matter reported by it to the Board of Directors, which has not been satisfactorily resolved resulting in the breach of the Listing Requirements of Bursa Malaysia Securities Berhad. viii. Other Matters To consider other matters as may be directed by the Board from time to time. Summary of Activities of the Audit Committee for the Financial Year During the financial year, the Audit Committee had carried out, inter alia, the following activities: i. Reviewed the audit plan and scope of work of the external auditors and their audit fee; ii. iii. iv. Reviewed the findings of the external auditors, particularly issues raised in the management letter and the management s response; Discussed on issues and concerns affecting the Group with the external auditors without the presence of management; Reviewed the External Auditors Policy; v. Reviewed and approved the provision of non-audit services by affiliated company of the external auditors; vi. Evaluated the performance of the external auditors; vii. Reviewed the unaudited quarterly financial results announcements and the audited financial statements of the Group and discussed on the revised Group consolidated cash flow projection; viii. Reviewed the Internal Audit Charter; ix. Reviewed and monitored the implementation of the annual audit plan of the internal auditors; x. Reviewed internal audit reports, the findings, recommendations and management response, and follow-up visits on status of management implementation of plans for addressing observations; xi. xii. Reviewed the revisions to ISO 9001:2008 Quality Management System document and operating procedures manual of facility management services; Reviewed related party transactions and conflict of interest situations that arose within the Group, if any; xiii. Reviewed the risk assessment reports; xiv. Reviewed the Risk Management and Internal Control Statement; xv. Reviewed the status report on internal audit department activities; xvi. Evaluated the performance and manpower requirement of the internal audit function; xvii. Reviewed the Annual Report; xviii. Reviewed the status of implementation of goods and services tax; xix. The verification of the options allocations of the ESOS of the Company was performed and the Audit Committee is satisfied that the options allocation during the financial year is consistent with the criteria set out in the By-laws of the ESOS and by the ESOS Committee. 30 TRIplc BERHAD ( A)

33 AUDIT COMMITTEE REPORT Training During the financial year, the Audit Committee members have attended trainings, the details of which are listed in the Corporate Governance Statement. Internal Audit Function The Audit Committee is supported by an Internal Audit Department. The objectives, mission, scope, organisation, authority and responsibilities of the Internal Audit function is spelt out in the Internal Audit Charter. The main role of the Internal Audit Department is to assist the Audit Committee in obtaining the reasonable assurances of the effectiveness of the system of internal control within the Group that encompass the Group s governance, operations, risk management and information systems of major areas of the Group operation. During the financial year, the following have been carried out by the Internal Audit Department: i. Performed review on the Internal Audit Charter; ii. iii. iv. Prepared the annual audit plan; Prepared the Risk Management and Internal Control Statement; Performed review on ESOS and verification on related party transactions and recurrent related party transactions; v. Performed reviews on the Group s risk profile; vi. vii. Performed operational and compliance reviews; Performed follow-up visits on status of management implementation of plans for addressing observations. This report is made by the Board of Directors in accordance with a resolution dated 14 September. ANNUAL REPORT 31

34 RISK MANAGEMENT AND INTERNAL CONTROL STATEMENT INTRODUCTION The Board of Directors of the Company recognises the importance of maintaining a sound system of internal control and risk management practices towards maintaining good corporate governance throughout the Group. The Board is committed in upholding the above and is pleased to provide the following statement which outlines the nature and scope of the internal control of the Group during the financial year ended 31 May. BOARD RESPONSIBILITY The Board acknowledges its responsibility and accountability for the Group s system of internal control and risk management as well as the adequacy and integrity of those systems to safeguard shareholders investment and Group s assets. The Board has in place a conducive control environment and processes to assist the Board in maintaining a proper internal control system within the Group. RISK MANAGEMENT Risk Management is regarded as an important aspect of the Group s growing operations with the objective of maintaining a sound internal control system. To this end, the Group s has established an appropriate risk management structure that includes Risk Management Policy, Risk Management Framework and Risk Management Working Committee to provide a structured and focused approach in managing risks. Risk Management Working Committee ( RMWC ) consists of management staffs are entrusted with the responsibility of implementing and maintaining the appropriate risk management framework. The risks affecting the Group s objectives are properly documented in the Group s risks profile. The RMWC meets when the need arises, to review, evaluate, measure and monitor all internal and external risks affecting the Group including developing proposed remedial actions to mitigate risks. The risks assessment report highlighting the level of risk within the Group is submitted to the Audit Committee for its perusal and subsequently to the Board for further decision. INTERNAL AUDIT FUNCTION The Internal Audit Department ( IA ) provides independent assurance to the Audit Committee on the adequacy and integrity of internal control system to manage risk across the Group. IA reports functionally to the Audit Committee. IA performs their duties to uphold a level of integrity and competency in operational, financial and business functions and to assure that applicable laws, regulations, rules, directives and guidelines are complied with. AUDIT COMMITTEE The Audit Committee comprises independent non-executive members of the Board. The Audit Committee has full access to both internal and external auditors and met with external auditors without the presence of executive directors twice for financial year ended 31 May. Amongst its prime role is to ensure the adequacy and integrity of internal controls with functions including approving audit plan and major audit findings. 32 TRIplc BERHAD ( A)

35 RISK MANAGEMENT AND INTERNAL CONTROL STATEMENT OTHER KEY ELEMENTS OF INTERNAL CONTROL Internal control is embedded in the Group s operations as follows: Internal Control Environment The Group has an organisation structure that clearly defines line of authority and accountability. The structure defined delegations of responsibilities of all business units and line of reporting to management, the Audit Committee and Board. Written policies and procedures for all activities are in place defining scope of works and responsibilities of position holders to ensure standardisation and time efficiency in execution of works. The Group has a Board Management Committee comprising the Managing Director, Chief Operating Officer and two (2) management staff with prime roles to review, deliberate and if thought fit, to approve all transactions except matters exclusively reserved for the Board s approval. All major decisions requiring the approval of the Board are made after detailed appraisal and review. The Board receives periodic and comprehensive information covering all activities and functions within the Group. External training programme are organised throughout the year to meet staff training needs and to enhance skills and professionalism. Control Activities The Group is accredited with ISO 9001:2008 certification and the recommended best practices have been implemented in its daily operation. There is a Quality Assurance/Quality Control ( QA/QC ) department to administer the compliance to ISO 9001:2008 requirements with emphasis on project related activities and functions. It also serves as a focal point for communication between the Group and the ISO auditors. The QA/QC department also conducts audit on selected project activities and functions to ensure compliance with ISO requirements. There are Standard Operating Procedures in place to govern activities and functions that are covered under ISO 9001:2008. Information and Communication The Group s performance and future outlook are communicated on a quarterly basis to the Board and Bursa Malaysia Securities Berhad including on an annual basis to the shareholders. All related inquiries are promptly replied to respective parties. All matters of concern raised in the management letter issued by the external auditor are adequately and promptly replied by the management. General directives from senior management are disseminated via issuance of memorandum and to all employees ensuring thorough dissemination of information and subsequent prompt action by recipients. Monitoring There are on-going Internal Audit activities to monitor compliances with policies and procedures, the effectiveness of the internal control system and risk management processes. Internal Audit activities are governed by the Standard for Professional Practice of Internal Auditing, the Internal Audit Charter and the audit plan that is reviewed and approved by the Audit Committee annually. As part of promoting Control Self-Assessment, ISO audit has been internally conducted by the Group s personnel on yearly basis in addition to the audit conducted by the external ISO accreditation firm. ANNUAL REPORT 33

36 RISK MANAGEMENT AND INTERNAL CONTROL STATEMENT CONCLUSION Internal control systems can only provide reasonable but not absolute assurance against material misstatement or loss. The Board is of the opinion that the system of internal control of the Group is adequate and effective and has served its function well. The Board endeavours to maintain an adequate system of internal control to support the Group s operations and will periodically evaluate and take precautionary measures to further improve and strengthen the control environment in ensuring the achievement of Group s business objectives. The Board has received assurance from the Managing Director and General Manager, Corporate Finance and Accounts that the Group s risk management and internal control system are operating adequately and effectively, in all material aspects, based on the risk management and internal control system of the Group. REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS As required by paragraph of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the external auditors have reviewed the Statement on Risk Management & Internal Control. As set out in their terms of engagement, the procedures were performed in accordance with Recommended Practice 5 (Revised): Guidance for Auditors on Engagements To Report On The Statement on Risk Management and Internal Control included in the Annual Report (RPG 5), issued by Malaysian Institute of Accountants. RPG 5 does not require the external auditors to consider whether the Statement on Risk Management & Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the risk management system and internal control processes of the Group. RPG 5 also does not require the external auditors to consider whether the processes described to deal with material internal control aspects of any significant problems disclosed in this Annual Report would, in fact, remedy the problems. Based on the procedures performed, the external auditors have reported to the Board that nothing has come to their attention that causes them to believe that this Statement on Risk Management & Internal Control is not prepared, in all material respects, in accordance with the disclosures required by paragraph 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers, nor is it factually inaccurate. This statement is made by the Board of Directors in accordance with a resolution dated 14 September. 34 TRIplc BERHAD ( A)

37 OTHER COMPLIANCE STATEMENT 1. Status of Utilisation of Proceeds Raised from Corporate Proposal As at 31 August, the status of the utilisation of the proceeds raised from the following corporate proposals are as per the table below: the issuance of RM240.0 million nominal value medium term notes under a medium term notes programme. the issuance of RM35.0 million of the RM85.0 million nominal value junior notes under a junior notes programme. No. Amount of Proceeds Raised Amount Utilised as at RM240.0 million nominal value medium term notes RM million 2. RM35.0 million nominal value junior notes RM34.91 million 2. Share Buy-Backs The Company does not have a scheme to buy back its own shares. 3. Options or Convertible Securities Exercised The Company has not issued any options or convertible securities apart from the issue of options pursuant to the Employees Share Option Scheme ( ESOS ) of the Company which was implemented on 30 December 2013 ( ESOS 2013/2018 ) for five (5) years expiring 28 December 2018 for eligible Directors and employees of the group (save for subsidiaries which are dormant) ( Group ). A 2nd tranche of ESOS options of 1,919,000 options was issued during the financial year 31 May on 24 October and the ESOS options granted, exercised and outstanding since the implementation of the ESOS 2013/2018 until financial year 31 May are as follows: Total number of options granted: 4,270,300 Total number of options retracted: 232,900 Total number of options exercised: 945,000 Total number of options outstanding: 3,092,400 The ESOS options granted, exercised and outstanding by Directors and Chief Executive since the implementation of the ESOS 2013/2018 until financial year 31 May are as follows: Total number of options granted: 1,273,700 Total number of options retracted: 215,500 Total number of options exercised: 508,500 Total number of options outstanding: 549,700 In accordance with the ESOS By-laws, not more than 50% of the new ordinary shares made available under the ESOS 2013/2018 shall be allocated in aggregate to eligible persons who are Directors and senior management of the Group. For the financial year 31 May, the actual percentage of options granted to them was 46.77% of the total number of options granted. Since commencement of the ESOS 2013/2018, the actual percentage of options granted in aggregate to them is 29.83% of the new ordinary shares available under the scheme. ANNUAL REPORT 35

38 OTHER COMPLIANCE STATEMENT 3. Options or Convertible Securities Exercised (cont'd) The options offered to and exercised by Non-Executive Directors under the ESOS 2013/2018 in respect of the financial year 31 May are as follows: Amount of Options Amount of Options Amount of Options No. Name of Non-Executive Director Granted Retracted Exercised 1. Jumsi Bin Batri 201, Ibrahim Bin Topaiwah 201, , Further details on the ESOS 2013/2018 is set out in the Directors Report for the financial year 31 May in pages 38 to 40 of this Annual Report. 4. Depository Receipt Programme The Company did not sponsor any depository programme. 5. Sanctions and/or Penalties Imposed There were no major sanctions and/or penalties imposed on the Company, its subsidiaries, Directors or management by the relevant regulatory bodies so as to disrupt the business of the Company or its subsidiaries. 6. Non-Audit Fees The non-audit fees incurred for services rendered by the external auditors and corporation affiliated to them for the financial year 31 May are RM5,000 for the review of realised and unrealised profits or losses and RM5,500 for the review of the Risk Management and Internal Control Statement. 7. Variation in Results There were no variances of 10% or more between the results for the financial year 31 May and the unaudited results announced. The Company did not make any release on the profit estimate, forecast or projection for the financial year. 8. Profit Guarantee There were no profit guarantees given to the Company. 9. Material Contracts There were no material contracts of the Group involving Directors and major shareholders interest entered into during the financial year or still subsisting as at the end of the financial year 31 May. 10. Internal Audit Function The internal audit function of the Company is performed in-house at RM153,141 for the financial year 31 May. This statement is made by the Board of Directors in accordance with a resolution dated 14 September. 36 TRIplc BERHAD ( A)

39 FINANCIAL STATEMENTS 38 Directors Report 43 Statement by Directors 43 Statutory Declaration 44 Independent Auditors Report 46 Consolidated Statement of Financial Position 47 Statement of Financial Position 48 Statements of Profit or Loss and Other Comprehensive Income 49 Consolidated Statement of Changes in Equity 50 Statement of Changes in Equity 51 Statements of Cash Flows 52 Notes to the Financial Statements 110 Supplementary Information on Realised and Unrealised Profits or Losses 37 TRIplc BERHAD ( A) ANNUAL REPORT 37

40 DIRECTORS REPORT The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 May. PRINCIPAL ACTIVITIES The Company is principally an investment holding company and engaged in property construction and related activities. The principal activities of its subsidiaries are disclosed in Note 8 to the financial statements. There have been no significant changes in the nature of these activities during the financial year. RESULTS Group company Rm 000 Profit for the financial year 7,130 6,574 Attributable to: Owners of the parent 7,130 6,574 Non-controlling interests - - 7,130 6,574 DIVIDENDS No dividend has been paid, declared or proposed by the Company since the end of the previous financial year. The Directors do not recommend any dividend payment in respect of the financial year ended 31 May. RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements. ISSUE OF SHARES AND DEBENTURES During the financial year, the issued and paid-up share capital of the Company was increased from RM64,280,285 to RM64,966,785 by way of issuance of 499,900 and 186,600 new ordinary shares of RM1.00 each for cash at an issue price of RM1.11 and RM1.13 per ordinary share respectively arising from the exercise of options granted under the Company s Employees Share Option Scheme. The newly issued ordinary shares rank pari passu in all respects with the existing issued ordinary shares of the Company. The Company did not issue any debentures during the financial year. OPTION GRANTED OVER UNISSUED SHARES No options were granted to any person to take up unissued ordinary shares of the Company during the financial year apart from the issue of options pursuant to the Employees Share Option Scheme ( ESOS ) of the Company. The Company implemented an Employees Share Option Scheme on 30 December 2013 ( ESOS 2013/2018 ). The ESOS 2013/2018 is administered by an ESOS Committee which comprises such persons as shall be appointed from time to time by the Board of Directors, and governed by the ESOS By-laws which were approved by the shareholders on 19 December 2013 ( ESOS By-laws ). 38 TRIplc BERHAD ( A)

41 DIRECTORS REPORT OPTION GRANTED OVER UNISSUED SHARES (cont d) The salient features of the ESOS 2013/2018 are as follows: (a) (b) (c) (d) The ESOS 2013/2018 is set up for the participation in ordinary shares of the Company only. The maximum number of new ordinary shares which may be made available under the ESOS 2013/2018 shall not exceed in aggregate 10% of the total issued and paid-up share capital of the Company at the point in time when an offer is made. The ESOS 2013/2018 is for a period of 5 years expiring on 28 December 2018 ( Original Expiry Date ), subject however to renewal for a period of up to a maximum of 5 years immediately from the Original Expiry Date upon recommendation by the ESOS Committee and to be determined by the Board on or before the Original Expiry Date, provided that the total duration of the ESOS 2013/2018 shall not exceed 10 years from the ESOS 2013/2018 effective date. Eligible Persons are those Directors and employees who have attained the age of 18 and are confirmed full time employees or contract staff who have been employed within the Group (save for subsidiaries which are dormant) for at least one (1) year, unless otherwise decided by the ESOS Committee at its discretion, and/or is under such categories and criteria that the ESOS Committee may from time to time decide at its discretion. In the case of a Director or an employee (who is the chief executive or a major shareholder of the Company) and persons connected to them, their specific allotments under the ESOS 2013/2018 shall be approved by the shareholders of the Company. The maximum number of new ordinary shares that may be offered to a selected eligible person shall be determined at the discretion of the ESOS Committee after taking into consideration, amongst others and where relevant, the performance, contribution, employment grade, seniority and length of service of the selected eligible person, subject to the following: (i) (ii) (iii) The Directors and senior management do not participate in the deliberation or discussion of their own allocation; The allocation to a selected eligible person, who either singly or collectively, through persons connected to the selected eligible person, holds 20% or more of the issued and paid-up share capital of the Company, must not exceed 10% of the new ordinary shares available under the ESOS 2013/2018; and Not more than 50% of the new ordinary shares made available under the ESOS 2013/2018 shall be allocated in aggregate to the Directors and senior management of the Group (save for subsidiaries which are dormant). (e) (f) (g) The ESOS options granted under the ESOS 2013/2018 shall be incapable of being disposed, transferred and/or assigned, or subject to any encumbrances in any manner except in the event of the death of the grantee in accordance with the provisions of the ESOS By-laws, and are exercisable at any time(s) during the duration of the ESOS 2013/2018. Pursuant to the Listing Requirements, an eligible Director who is a Non-Executive Director of the Company and/or any of its subsidiaries shall not sell, transfer or assign the ordinary shares obtained through the exercise of the ESOS options granted to him within 1 year from the date of offer. Except for the Non-Executive Directors as mentioned above, the new ordinary shares allotted and issued to the grantees under the ESOS 2013/2018 will not be subject to any holding period or restriction on disposal, transfer and/or assignment. However, the ESOS Committee has the discretion in determining whether the exercise of the ESOS options or allotment and issuance of the new ordinary shares pursuant to the exercise of the ESOS options will be subject to any performance target. The exercise price of the options at which the eligible persons are entitled to subscribe for the ordinary shares of the Company under the ESOS 2013/2018 is the weighted average market price of the shares of the Company as quoted in the Daily Official List issued by Bursa Malaysia Securities Berhad for the 5 market days immediately preceding the respective dates of offer subject to a discount of not more than 10%, or such other percentage of discount as may be permitted by Bursa Malaysia Securities Berhad and/or any other relevant authorities from time to time at the ESOS Committee s discretion, or at the par value of the ordinary shares of the Company, whichever is higher. The new ordinary shares issued arising from the ESOS 2013/2018 shall rank pari-passu in all respects with the then existing ordinary shares of the Company except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, the entitlement date of which is prior to the date of allotment of the said new ordinary shares and are subject to the provisions of the Articles of Association of the Company. ANNUAL REPORT 39

42 DIRECTORS REPORT OPTION GRANTED OVER UNISSUED SHARES (cont d) The salient features of the ESOS 2013/2018 are as follows: (cont d) (h) The details of the options over the ordinary shares of RM1.00 each of the Company are as follows: Number of share options Exercise period Date of offer Exercise price Balance as at 1.6. Granted Exercised Balance as at Exercisable as at First ESOS grant RM1.11 1,859,900 - (499,900) 1,360,000 1,360,000 Second ESOS grant RM1.13-1,919,000 (186,600) 1,732,400 1,732,400 1,859,900 1,919,000 (686,500) 3,092,400 3,092,400 The Company has been granted an exemption by the Companies Commission of Malaysia, vide its letter dated 11 September, from having to disclose the full list of option holders and their holdings pursuant to Section 169(11) of the Companies Act, 1965 in Malaysia, except for eligible employees with an option allocation of 112,000 and above during the financial year. First ESOS grant Number of share options Name Date of offer Exercise price Balance as at 1.6. Granted Exercised Balance as at Exercisable as at Zainal Abidin Bin Ismail 9.1. RM ,000 - (181,000) - - Jumsi Bin Batri 9.1. RM , , ,000 Ibrahim Bin Topaiwah 9.1. RM , , ,000 Liew Kon Mun 9.1. RM , , , ,000 - (181,000) 336, ,000 Second ESOS grant Number of share options Name Date of offer Exercise price Balance as at 1.6. Granted Exercised Balance as at Exercisable as at Zainal Abidin Bin Ismail RM ,000 (181,000) - - Ar Mohd Khalid Bin Mohammed Yusuf RM , , ,500 Jumsi Bin Batri RM ,600-89,600 89,600 Ibrahim Bin Topaiwah RM ,600-89,600 89,600 Liew Kon Mun RM ,600-89,600 89, ,300 (181,000) 415, , TRIplc BERHAD ( A)

43 DIRECTORS REPORT DIRECTORS The Directors who have held office since the date of the last report are: Dato Muhamad Bin Mustapha, DIMP, KMN Zainal Abidin Bin Ismail Yusof Bin Badawi (Appointed on 10 June ) Ar Mohd Khalid Bin Mohammed Yusuf Jumsi Bin Batri Ibrahim Bin Topaiwah DIRECTORS INTERESTS The Directors holding office at the end of the financial year and their beneficial interests in the ordinary shares and options over ordinary shares of the Company and of its related corporations during the financial year ended 31 May as recorded in the Register of Directors Shareholdings kept by the Company under Section 134 of the Companies Act, 1965 in Malaysia were as follows: Number of ordinary shares of RM1.00 each Shares in the Company Direct interest Balance as at 1.6. Bought Sold Balance as at Zainal Abidin Bin Ismail - 362, ,000 Jumsi Bin Batri Ar Mohd Khalid Bin Mohammed Yusuf 146,500 - (46,000) 100,500 None of the other Directors holding office at the end of the financial year held any interest in the ordinary shares and options over ordinary shares or debentures of the Company and of its related corporations during the financial year. DIRECTORS BENEFITS Since the end of the previous financial year, none of the Directors have received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the Directors as shown in the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest. There were no arrangements during and at the end of the financial year, to which the Company is a party, which had the object of enabling the Directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, except for the share options granted pursuant to the Employees Share Option Scheme as disclosed in Note 14 to the financial statements. OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (I) AS AT THE END OF THE FINANCIAL YEAR (a) Before the statement of profit or loss and other comprehensive income and statements of financial position 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 have satisfied themselves that there are no known bad debts to be written off and that adequate provision had been made for doubtful debts; and to ensure that any current assets other than debts, which were unlikely to realise their book values in the ordinary course of business had been written down to their estimated realisable values. ANNUAL REPORT 41

44 DIRECTORS REPORT OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (cont d) (I) AS AT THE END OF THE FINANCIAL YEAR (cont d) (b) In the opinion of the Directors, the results of operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature. (II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT (c) The Directors are not aware of any circumstances: (i) (ii) (iii) which would necessitate the writing off of bad debts or render the amount of provision for doubtful debts in the financial statements of the Group and the Company inadequate to any material extent; which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; and which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. (d) In the opinion of the Directors: (i) (ii) there has not arisen any item, transaction or event of a material and unusual nature which is likely to affect substantially the results of operations of the Group and of the Company for the financial year in which this report is made; and no contingent or other liability has become enforceable, or is likely to become enforceable, within the period of twelve (12) months after the end of the financial year which would or may affect the ability of the Group or of the Company to meet their obligations as and when they fall due. (III) AS AT THE DATE OF THIS REPORT (e) (f) (g) There are no charges on the assets of the Group and of the Company which have arisen since the end of the financial year to secure the liabilities of any other person. There are no contingent liabilities of the Group and of the Company which have arisen since the end of the financial year. The Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading. AUDITORS The auditors, BDO, have expressed their willingness to continue in office. Signed on behalf of the Board in accordance with a resolution of the Directors. Dato Muhamad Bin Mustapha, DIMP, KMN Director Zainal Abidin Bin Ismail Director Shah Alam 14 September 42 TRIplc BERHAD ( A)

45 STATEMENT BY DIRECTORS In the opinion of the Directors, the financial statements set out on pages 46 to 109 have been drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards, and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 May and of the financial performance and cash flows of the Group and of the Company for the financial year then ended. In the opinion of the Directors, the information set out in Note 36 on page 110 to the financial statements has been compiled in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad. On behalf of the Board, Dato Muhamad Bin Mustapha, DIMP, KMN Director Zainal Abidin Bin Ismail Director Shah Alam 14 September STATUTORY DECLARATION I, Zainal Abidin Bin Ismail, being the Director primarily responsible for the financial management of TRIplc Berhad, do solemnly and sincerely declare that the financial statements set out on pages 46 to 110 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, Subscribed and solemnly ) declared by the abovenamed ) at Kuala Lumpur this ) Zainal Abidin Bin Ismail 14 September ) Before me: ANNUAL REPORT 43

46 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF TRIplc BERHAD Report on the Financial Statements We have audited the financial statements of TRIplc Berhad, which comprise the statements of financial position as at 31 May of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 46 to 109. Directors Responsibility for the Financial Statements The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards, and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 May and of their financial performance and cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following: (a) (b) (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 8 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 audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act. 44 TRIplc BERHAD ( A)

47 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF TRIplc BERHAD Other Reporting Responsibilities The supplementary information set out in Note 36 to the financial statements is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ( MIA Guidance ) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad. Other Matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. BDO AF: 0206 Chartered Accountants Law Kian Huat 2855/06/16 (J) Chartered Accountant Kuala Lumpur 14 September ANNUAL REPORT 45

48 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MAY Group NOTE ASSETS Non-current assets Property, plant and equipment 7 13,303 13,742 Trade and other receivables , , , ,926 Current assets Inventories 9 82,789 82,753 Trade and other receivables 11 39,517 31,232 Current tax assets Cash and bank balances 13 77,668 43, , ,907 TOTAL ASSETS 596, ,833 EQUITY AND LIABILITIES Equity attributable to owners of the parent Share capital 14 64,967 64,280 Reserves 15 78,571 69,827 TOTAL EQUITY 143, ,107 LIABILITIES Non-current liabilities Trade payables 24 4,113 4,097 Provisions 23 1,564 1,564 Borrowings , ,331 Deferred tax liabilities 22 40,581 33, , ,717 Current liabilities Trade and other payables 24 96, ,805 Provisions 23 1,246 1,246 Borrowings 16 16,535 14,370 Current tax liabilities 1, , ,009 TOTAL LIABILITIES 452, ,726 TOTAL EQUITY AND LIABILITIES 596, ,833 The accompanying notes form an integral part of the financial statements. 46 TRIplc BERHAD ( A)

49 STATEMENT OF FINANCIAL POSITION AS AT 31 MAY Company NOTE ASSETS Non-current assets Property, plant and equipment Investments in subsidiaries 8 103, , , ,344 Current assets Trade and other receivables , ,205 Cash and bank balances 13 2,605 1, , ,128 TOTAL ASSETS 232, ,472 EQUITY AND LIABILITIES Equity attributable to owners of the parent Share capital 14 64,967 64,280 Reserves 15 27,132 18,944 TOTAL EQUITY 92,099 83,224 LIABILITIES Non-current liabilities Borrowings 16 28, Current liabilities Trade and other payables 24 96, ,763 Borrowings 16 16,423 14, , ,978 TOTAL LIABILITIES 140, ,248 TOTAL EQUITY AND LIABILITIES 232, ,472 The accompanying notes form an integral part of the financial statements. ANNUAL REPORT 47

50 STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 MAY NOTE Group Company Revenue 25 16, ,394 10,000 12,000 Cost of sales (9,242) (75,755) - - Gross profit 7,413 32,639 10,000 12,000 Other income 36,635 37, Selling and marketing costs (18) (35) - - Administrative expenses (6,672) (6,221) (82) (171) Other expenses (2,265) (10,216) (1,639) (1,517) Finance costs 26 (20,071) (17,774) (1,737) (693) Profit before tax 27 15,022 36,151 6,574 9,676 Tax expense 28 (7,892) (12,772) - - Profit for the financial year 7,130 23,379 6,574 9,676 Other comprehensive income, net of tax Total comprehensive income 7,130 23,379 6,574 9,676 Profit attributable to owners of the parent 7,130 23,379 6,574 9,676 Total comprehensive income attributable to owners of the parent 7,130 23,379 6,574 9,676 Basic earnings per ordinary share attributable to equity holders of the Company (Sen) Diluted earnings per ordinary share attributable to equity holders of the Company (Sen) The accompanying notes form an integral part of the financial statements. 48 TRIplc BERHAD ( A)

51 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 MAY Attributable to owners of the Company Group NOTE Share capital Share premium Share options reserve Retained earnings Total equity Balance as at 1 June , , ,663 Profit for the financial year ,379 23,379 Other comprehensive income, net of tax Total comprehensive income ,379 23,379 Share options granted under ESOS ,779-1,779 Ordinary shares issued pursuant to ESOS (217) Balance as at 31 May 64, ,562 68, ,107 Attributable to owners of the Company Group NOTE Share capital Share premium Share options reserve Retained earnings Total equity Balance as at 1 June 64, ,562 68, ,107 Profit for the financial year ,130 7,130 Other comprehensive income, net of tax Total comprehensive income ,130 7,130 Share options granted under ESOS ,535-1,535 Ordinary shares issued pursuant to ESOS (569) Balance as at 31 May 64, ,528 75, ,538 The accompanying notes form an integral part of the financial statements. ANNUAL REPORT 49

52 STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 MAY Attributable to owners of the Company Company NOTE Share capital Share premium Share options reserve Retained earnings Total equity Balance as at 1 June , ,461 71,483 Profit for the financial year ,676 9,676 Other comprehensive income, net of tax Total comprehensive income ,676 9,676 Share options granted under ESOS ,779-1,779 Ordinary shares issued pursuant to ESOS (217) Balance as at 31 May 64, ,562 17,354 83,224 Attributable to owners of the Company Company NOTE Share capital Share premium Share options reserve Retained earnings Total equity Balance as at 1 June 64, ,562 17,354 83,224 Profit for the financial year ,574 6,574 Other comprehensive income, net of tax Total comprehensive income ,574 6,574 Share options granted under ESOS ,535-1,535 Ordinary shares issued pursuant to ESOS (569) Balance as at 31 May 64, ,528 23,928 92,099 The accompanying notes form an integral part of the financial statements. 50 TRIplc BERHAD ( A)

53 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 MAY NOTE Group Company CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts from customers 66,474 7,068-5,842 Rental received Cash paid for operating expenses and construction (48,737) (75,561) (8,708) (3,202) Cash from/(used in) operations 18,121 (68,403) (8,708) 2,640 Deposits received Interest received 1,283 2, Other income received Deposits paid (17) Tax refunded Tax paid (404) (1,375) - - Net cash from/(used in) operating activities 19,291 (66,314) (8,678) 2,691 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment 7(a) (229) (444) (80) (1) Dividends received from subsidiaries - - 3,000 3,000 Advances to subsidiaries - - (21,751) (8,705) Acquisition of additional interest in subsidiaries - - (375) - (Placement)/Withdrawal of fixed deposits placed with licensed banks with original maturity of more than three (3) months (25,736) 4, Placement of fixed deposits pledged with licensed banks (30) (271) (30) (270) Net cash (used in)/from investing activities (25,995) 3,986 (19,236) (5,976) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of hire-purchase liabilities (196) (249) (121) (93) Hire-purchase interest paid (28) (29) (25) (20) Repayments of term loans (5,070) (75) (5,000) - Proceeds from ordinary shares issued Drawdown of term loan 35,000-35,000 - Interest paid (15,150) (12,715) (1,729) (617) Net cash from/(used in) financing activities 15,322 (12,781) 28,891 (443) Net increase/(decrease) in cash and cash equivalents 8,618 (75,109) 977 (3,728) Cash and cash equivalents at beginning of financial year 31, ,174 (1,458) 2,270 Cash and cash equivalents at end of financial year 13 39,683 31,065 (481) (1,458) The accompanying notes form an integral part of the financial statements. ANNUAL REPORT 51

54 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 1. CORPORATE INFORMATION The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at No. 8, Ground Floor, Jalan Apollo CH U5/CH, Bandar Pinggiran Subang, Seksyen U5, Shah Alam, Selangor Darul Ehsan. The principal place of business of the Company is located at No. 6 & 8, Jalan Apollo CH U5/CH, Bandar Pinggiran Subang, Seksyen U5, Shah Alam, Selangor Darul Ehsan. The consolidated financial statements for the financial year ended 31 May comprise the financial statements of the Company and its subsidiaries. These financial statements are presented in Ringgit Malaysia ( RM ), which is also the functional currency of the Company. All financial information presented in RM has been rounded to the nearest thousand, unless otherwise stated. The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on 14 September. 2. PRINCIPAL ACTIVITIES The Company is principally an investment holding company and engaged in property construction and related activities. The principal activities of its subsidiaries are set out in Note 8 to the financial statements. There have been no significant changes in the nature of these activities during the financial year. 3. BASIS OF PREPARATION The financial statements of the Group and of the Company set out on pages 46 to 109 have been prepared in accordance with Malaysian Financial Reporting Standards ( MFRSs ), International Financial Reporting Standards ( IFRSs ) and the provisions of the Companies Act, 1965 in Malaysia. However, Note 36 to the financial statements set out on page 110 has been prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ( MIA Guidance ) and the directive of Bursa Malaysia Securities Berhad. 4. SIGNIFICANT ACCOUNTING POLICIES 4.1 Basis of accounting The financial statements of the Group and of the Company have been prepared under the historical cost convention except as otherwise stated in the financial statements. The preparation of financial statements in conformity with MFRSs requires the Directors to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and contingent liabilities. In addition, the Directors are also required to exercise their judgement in the process of applying accounting policies. The areas involving such judgements, estimates and assumptions are disclosed in Note 6 to the financial statements. Although these estimates and assumptions are based on the Directors best knowledge of events and actions, actual results could differ from those estimates. 52 TRIplc BERHAD ( A)

55 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.2 Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and all its subsidiaries. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has: (a) (b) (c) Power over the investee; Exposure, or rights, to variable returns from its involvement with the investee; and The ability to use its power over the investee to affects its returns. If the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: (a) (b) (c) The contractual arrangement with the other vote holders of the investee; Rights arising from other contractual agreements; and The voting rights of the Group and potential voting rights. Intragroup balances, transactions, income and expenses are eliminated on consolidation. Unrealised gains arising from transactions are also eliminated. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no impairment. The financial statements of the subsidiaries are prepared for the same reporting period as that of the Company, using consistent accounting policies. Where necessary, accounting policies of subsidiaries are changed to ensure consistency with the policies adopted by the other entities in the Group. The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Subsidiaries are consolidated from the date on which control is transferred to the Group and up to the effective date on which control ceases, as appropriate. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the financial year are included in the statement of profit or loss and other comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary. Changes in the Company owners ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and noncontrolling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of consideration paid or received is recognised directly in equity and attributed to owners of the parent. If the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between: (i) (ii) the aggregate of the fair value of the consideration received and the fair value of any retained interest; and the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any noncontrolling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investments retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under MFRS 139 Financial Instruments: Recognition and Measurement or, where applicable, the cost on initial recognition of an investment in associate or joint venture. ANNUAL REPORT 53

56 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.3 Business combinations Business combinations are accounted for by applying the acquisition method of accounting. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured at their fair value at the acquisition date, except that: (a) (b) (c) Deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with MFRS 112 Income Taxes and MFRS 119 Employee Benefits respectively; Liabilities or equity instruments related to share-based payment transactions of the acquiree or the replacement by the Group of an acquiree s share-based payment transactions are measured in accordance with MFRS 2 Share-based Payment at the acquisition date; and Assets (or disposal groups) that are classified as held for sale in accordance with MFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received. Any contingent consideration payable is recognised at fair value at the acquisition date. Measurement period adjustments to contingent consideration are dealt with as follows: (a) (b) If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Subsequent changes to contingent consideration classified as an asset or liability that is a financial instrument within the scope of MFRS 139 are recognised either in profit or loss or in other comprehensive income in accordance with MFRS 139. All other subsequent changes are recognised in profit or loss. In a business combination achieved in stages, previously held equity interests in the acquiree are re-measured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss. Components of non-controlling interest in the acquiree that are present ownership interest and entitle their holders to a proportionate share of the entity s net assets in the event of liquidation are initially measured at fair value. All other components of non-controlling interests shall be measured at their acquisition-date fair values, unless another measurement basis is required by MFRSs. The choice of measurement basis is made on a combination-bycombination basis. Subsequent to initial recognition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests share of subsequent changes in equity. Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the previously held equity interest of the Group in the acquiree (if any), over the net fair value of the acquiree s identifiable assets and liabilities is recorded as goodwill in the statement of financial position. The accounting policy for goodwill is set out in Note 4.9 to the financial statements. In instances where the latter amount exceeds the former, the excess is recognised as a gain on bargain purchase in profit or loss on the acquisition date. 4.4 Property, plant and equipment and depreciation All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is directly attributable to the acquisition of the asset. 54 TRIplc BERHAD ( A)

57 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.4 Property, plant and equipment and depreciation (cont d) Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the subsequent costs will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset is acquired, if applicable. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the asset and which has a different useful life, is depreciated separately. After initial recognition, property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. The long term leasehold land of 99 years expiring on 25 March 2093 is amortised over its remaining lease period at the date of acquisition of 93 years. Depreciation on other property, plant and equipment is calculated to write off the cost or valuation of the assets to their residual values on a straight line basis over their estimated useful lives. The principal annual depreciation rates are as follows: Buildings 2% Plant and machinery 7½ % Office equipment and fittings 10% - 33⅓% Motor vehicles 20% At the end of each reporting period, the carrying amount of each item of property, plant and equipment is assessed for impairment when events or changes in circumstances indicate that its carrying amount may not be recoverable. A write down is made if the carrying amount exceeds the recoverable amount (see Note 4.10 to the financial statements on impairment of non-financial assets). The residual values, useful lives and depreciation method are reviewed at the end of each reporting period to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment. If expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate. The carrying amount of an item of property, plant and equipment is derecognised on 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 carrying amount is included in profit or loss and the revaluation surplus related to those assets, if any, is transferred directly to retained earnings. 4.5 Leases and hire purchase (a) Finance leases and hire purchase Assets acquired under finance leases and hire purchase which transfer substantially all the risks and rewards of ownership to the Group are recognised initially at amounts equal to the fair value of the leased assets or, if lower, the present value of minimum lease payments, each determined at the inception of the lease. The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the leases, if this is practicable to determine; if not, the Group s incremental borrowing rate is used. Any initial direct costs incurred by the Group are added to the amount recognised as an asset. The assets are capitalised as property, plant and equipment and the corresponding obligations are treated as liabilities. The property, plant and equipment capitalised are depreciated on the same basis as owned assets. ANNUAL REPORT 55

58 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.5 Leases and hire purchase (cont d) (a) Finance leases and hire purchase (cont d) The minimum lease payments are apportioned between finance charges and the reduction of the outstanding liability. The finance charges are recognised in profit or loss over the period of the lease term so as to produce a constant periodic rate of interest on the remaining lease and hire purchase liabilities. (b) Operating leases A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership. Lease payments under operating leases are recognised as an expense on a straight-line basis over the lease term. (c) Leases of land and buildings For leases of land and building, the land and buildings elements are considered separately for the purpose of lease classification and these leases are classified as operating or finance leases in the same way as leases of other assets. The minimum lease payments including any lump-sum upfront payments made to acquire the interest in the land and building are allocated between the land and the buildings elements in proportion to the relative fair values of leasehold interest in the land element and the buildings element of the lease at the inception of the lease. For a lease of land and buildings in which the amount that would initially be recognised for the land element is immaterial, the land and buildings are treated as a single unit for the purpose of lease classification and is accordingly classified as a finance or operating lease. In such a case, the economic life of the buildings is regarded as the economic life of the entire leased asset. 4.6 Service concession arrangements Where the Group performs more than one service (i.e. construction or upgrade services and operation services) under a single contract or arrangement, the consideration receivable is allocated by reference to the relative fair values of the services delivered, when the amounts are separately identifiable. 4.7 Construction contracts Contract costs comprise costs related directly to the specific contract and those that are attributable to the contract activity in general and can be allocated to the contract and such other cost that are specifically chargeable to the customer under the terms of the contract. When the total costs incurred on construction contracts plus recognised profits (less recognised losses), exceed progress billings, the balance is classified as amount due from customers for contract work. When progress billings exceed costs incurred plus recognised profits (less recognised losses), the balance is classified as amount due to customers for contract work. 4.8 Investments in subsidiaries A subsidiary is an entity in which the Group and the Company are exposed, or have rights, to variable returns from its involvement with the subsidiary and have the ability to affect those returns through its power over the subsidiary. An investment in subsidiary, which is eliminated on consolidation, is stated in the separate financial statements of the Company at cost less impairment losses, if any. 56 TRIplc BERHAD ( A)

59 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.8 Investments in subsidiaries (cont d) When control of a subsidiary is lost as a result of a transaction, event or other circumstance, the Group would derecognise all assets, liabilities and non-controlling interests at their carrying amount and to recognise the fair value of the consideration received. Any retained interest in the former subsidiary is recognised at its fair value at the date control is lost. The resulting difference is recognised as a gain or loss in profit or loss. 4.9 Goodwill Goodwill recognised in a business combination is an asset at the acquisition date and is initially measured at cost, being the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer s previously held equity interest (if any) in the entity over net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the Group s interest in the fair value of the acquiree s identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer s previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain. After initial recognition, goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is not amortised but instead tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired. Objective events that would trigger a more frequent impairment review include adverse industry or economic trends, significant restructuring actions, significantly lowered projections of profitability, or a sustained decline in the acquiree s market capitalisation. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold Impairment of non-financial assets The carrying amount of assets, except for financial assets (excluding investments in subsidiaries), inventories, assets arising from construction contracts, and deferred tax assets, are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the asset s recoverable amount is estimated. Goodwill, which has an indefinite useful life, are tested annually for impairment or more frequently if events or changes in circumstances indicate that the goodwill might be impaired. The recoverable amount of an asset is estimated for an individual asset. Where it is not possible to estimate the recoverable amount of the individual asset, the impairment test is carried out on the cash generating unit ( CGU ) to which the asset belongs. Goodwill acquired in a business combination is from the acquisition date, allocated to each of the Group s CGU or groups of CGU that are expected to benefit from the synergies of the combination giving rise to the goodwill irrespective of whether other assets or liabilities of the acquiree are assigned to those units or groups of units. Goodwill acquired in a business combination shall be tested for impairment as part of the impairment testing of CGU to which it relates. The CGU to which goodwill is allocated shall represent the lowest level within the Group at which the goodwill is monitored for internal management purposes and not larger than an operating segment determined in accordance with MFRS 8 Operating Segments. The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value in use. In estimating the value in use, the estimated future cash inflows and outflows to be derived from continuing use of the asset and from its ultimate disposal are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted. An impairment loss is recognised in profit or loss when the carrying amount of the asset or the CGU, including the goodwill, exceeds the recoverable amount of the asset or the CGU. The total impairment loss is allocated, first, to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets of the CGU on a pro-rata basis of the carrying amount of each asset in the CGU. ANNUAL REPORT 57

60 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.10 Impairment of non-financial assets (cont d) The impairment loss is recognised in profit or loss immediately except for the impairment on a revalued asset where the impairment loss is recognised directly against the revaluation reserve to the extent of the surplus credited previously for the same asset with the excess of the impairment loss charged to profit or loss. An impairment loss on goodwill is not reversed in subsequent periods. An impairment loss on other assets is reversed if, and only if, there has been a change in the estimates used to determine the assets recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Such reversals are recognised as income immediately in profit or loss except for the reversal of an impairment loss on a revalued asset where the reversal of the impairment loss is treated as a revaluation increase and credited to the revaluation reserve account of the same asset. However, to the extent that an impairment loss on the same revalued asset was previously recognised in profit or loss, a reversal of that impairment loss is also recognised in profit or loss Inventories (a) Land held for property development Land held for property development is stated at the lower of cost and net realisable value. Cost associated with the acquisition of land includes the purchase price of the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies. (b) Properties under development Properties under development is stated at the lower of cost and net realisable value. Properties under development comprise cost associated with the acquisition of land and all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities. Borrowing costs are capitalised in accordance with the accounting policy on borrowings costs. (c) Developed properties held for sale Developed properties held for sale are stated at the lower of cost and net realisable value. Cost consists of costs associated with the acquisition of land, direct costs, and appropriate proportions of common costs attributable to developing the properties to completion and borrowing costs Financial instruments A financial instrument is any contract that gives rise to a financial asset of one enterprise and a financial liability or equity instrument of another enterprise. A financial asset is any asset that is cash, an equity instrument of another enterprise, a contractual right to receive cash or another financial asset from another enterprise, or a contractual right to exchange financial assets or financial liabilities with another enterprise under conditions that are potentially favourable to the Group. 58 TRIplc BERHAD ( A)

61 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.12 Financial instruments (cont d) A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise, or a contractual obligation to exchange financial assets or financial liabilities with another enterprise under conditions that are potentially unfavourable to the Group. Financial instruments are recognised on the statement of financial position when the Group has become a party to the contractual provisions of the instrument. At initial recognition, a financial instrument is recognised at fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issuance of the financial instrument. An embedded derivative is separated from the host contract and accounted for as a derivative if, and only if the economic characteristics and risks of the embedded derivative is not closely related to the economic characteristics and risks of the host contract, a separate instrument with the same terms as the embedded derivative meets the definition of a derivative, and the hybrid instrument is not measured at fair value through profit or loss. (a) Financial assets A financial asset is classified into the following four (4) categories after initial recognition for the purpose of subsequent measurement: (i) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss comprise financial assets that are held for trading (i.e. financial assets acquired principally for the purpose of resale in the near term), derivatives (both, freestanding and embedded) and financial assets that were specifically designated into this classification upon initial recognition. Subsequent to initial recognition, financial assets classified as at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in the fair value of financial assets classified as at fair value through profit or loss are recognised in profit or loss. Net gains or losses on financial assets classified as at fair value through profit or loss exclude foreign exchange gains and losses, interest and dividend income. Such income is recognised separately in profit or loss as components of other income or other operating losses. However, derivatives that are linked to and must be settled by delivery of unquoted equity instruments that do not have a quoted market price in an active market are recognised at cost. (ii) Held-to-maturity investments Financial assets classified as held-to-maturity comprise non-derivative financial assets with fixed or determinable payments and fixed maturity that the Group has the positive intention and ability to hold to maturity. Subsequent to initial recognition, financial assets classified as held-to-maturity are measured at amortised cost using the effective interest method. Gains or losses on financial assets classified as held-to-maturity are recognised in profit or loss when the financial assets are derecognised or impaired, and through the amortisation process. ANNUAL REPORT 59

62 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.12 Financial instruments (cont d) (a) Financial assets (cont d) (iii) Loans and receivables Financial assets classified as loans and receivables comprise non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, financial assets classified as loans and receivables are measured at amortised cost using the effective interest method. Gains or losses on financial assets classified as loans and receivables are recognised in profit or loss when the financial assets are derecognised or impaired, and through the amortisation process. (iv) Available-for-sale financial assets Financial assets classified as available-for-sale comprise non-derivative financial assets that are designated as available for sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss. Subsequent to initial recognition, financial assets classified as available-for-sale are measured at fair value. Any gains or losses arising from changes in the fair value of financial assets classified as available-for-sale are recognised directly in other comprehensive income, except for impairment losses and foreign exchange gains and losses, until the financial asset is derecognised, at which time the cumulative gains or losses previously recognised in other comprehensive income are recognised in profit or loss. However, interest calculated using the effective interest method is recognised in profit or loss whilst dividends on available-for-sale equity instruments are recognised in profit or loss when the right of the Group to receive payment is established. Cash and cash equivalents consist of cash on hand, cash balances and deposits with banks and highly liquid investments which have an insignificant risk of changes in fair value with original maturities of three (3) months or less, and are used by the Group and the Company in the management of their short term commitments. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts and pledged deposits. A financial asset is derecognised when the contractual right to receive cash flows from the financial asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised directly in other comprehensive income shall be recognised in profit or loss. A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or marketplace convention. A regular way purchase or sale of financial assets shall be recognised and derecognised, as applicable, using trade date accounting. 60 TRIplc BERHAD ( A)

63 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.12 Financial instruments (cont d) (b) Financial liabilities Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. A financial liability is classified into the following two (2) categories after initial recognition for the purpose of subsequent measurement: (i) Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss comprise financial liabilities that are held for trading, derivatives (both, freestanding and embedded) and financial liabilities that were specifically designated into this classification upon initial recognition. Subsequent to initial recognition, financial liabilities classified as at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in the fair value of financial liabilities classified as at fair value through profit or loss are recognised in profit or loss. Net gains or losses on financial liabilities classified as at fair value through profit or loss exclude foreign exchange gains and losses, interest and dividend income. Such income is recognised separately in profit or loss as components of other income or other operating losses. (ii) Other financial liabilities Financial liabilities classified as other financial liabilities comprise non-derivative financial liabilities that are neither held for trading nor initially designated as at fair value through profit or loss. Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the effective interest method. Gains or losses on other financial liabilities are recognised in profit or loss when the financial liabilities are derecognised and through the amortisation process. A financial liability is derecognised when, and only when, it is extinguished, i.e. when the obligation specified in the contract is discharged or cancelled or expired. An exchange between an existing borrower and lender of debt instruments with substantially different terms are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Any difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. The Group designates corporate guarantees given to banks for credit facilities granted to subsidiaries as insurance contracts as defined in MFRS 4 Insurance Contracts. The Group recognises these insurance contracts as recognised insurance liabilities when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits would be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. ANNUAL REPORT 61

64 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.12 Financial instruments (cont d) (b) Financial liabilities (cont d) At the end of every reporting period, the Group shall assess whether its recognised insurance liabilities are adequate, using current estimates of future cash flows under its insurance contracts. If this assessment shows that the carrying amount of the insurance liabilities is inadequate, the entire deficiency shall be recognised in profit or loss. Recognised insurance liabilities are only removed from the statement of financial position when, and only when, it is extinguished via a discharge, cancellation or expiration. (c) Equity An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are classified as equity instruments. Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium are classified as equity. Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit. Otherwise, they are charged to profit or loss. Interim dividends to shareholders are recognised in equity in the period in which they are declared. Final dividends are recognised upon the approval of shareholders in a general meeting. The Group measures a liability to distribute non-cash assets as a dividend to the owners of the Company at the fair value of the assets to be distributed. The carrying amount of the dividend is remeasured at the end of each reporting period and at the settlement date, with any changes recognised directly in equity as adjustments to the amount of the distribution. On settlement of the transaction, the Group recognises the difference, if any, between the carrying amount of the assets distributed and the carrying amount of the liability in profit or loss. When the Group repurchases its own shares, the shares repurchased would be accounted for using the treasury stock method. Where the treasury stock method is applied, the shares repurchased and held as treasury shares shall be measured and carried at the cost of repurchase on initial recognition and subsequently. It shall not be revalued for subsequent changes in the fair value or market price of the shares. The carrying amount of the treasury shares shall be offset against equity in the statement of financial position. To the extent that the carrying amount of the treasury shares exceeds the share premium account, it shall be considered as a reduction of any other reserves as may be permitted by the Companies Act, 1965 in Malaysia. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company s own equity instruments. Where such shares are issued by resale, the difference between the sales consideration and the carrying amount is shown as a movement in equity. 62 TRIplc BERHAD ( A)

65 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.13 Impairment of financial assets The Group assesses whether there is any objective evidence that a financial asset is impaired at the end of each reporting period. (a) Loans and receivables 4.14 Borrowing costs The Group collectively considers factors such as the probability of bankruptcy or significant financial difficulties of the receivable, and default or significant delay in payments to determine whether there is objective evidence that an impairment loss on loans and receivables has occurred. Other objective evidence of impairment include historical collection rates determined on an individual basis and observable changes in national or local economic conditions that are directly correlated with the historical default rates of receivables. If any such objective evidence exists, the amount of impairment loss is measured as the difference between the financial asset s carrying amount and the present value of estimated future cash flows discounted at the financial asset s original effective interest rate. The impairment loss is recognised in profit or loss. The carrying amount of loans and receivables are reduced through the use of an allowance account. If in a subsequent period, the amount of the impairment loss decreases and it objectively relates to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of impairment reversed is recognised in profit or loss. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset is capitalised as part of the cost of the asset until when substantially all the activities necessary to prepare the asset for its intended use or sale are complete, after which such expense is charged to profit or loss. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. Capitalisation of borrowing cost is suspended during extended periods in which active development is interrupted. The amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on the borrowing during the period less any investment income on the temporary investment of the borrowing. All other borrowing costs are recognised in profit or loss in the period in which they are incurred Income taxes Income taxes include all domestic taxes on taxable profit. Income taxes also include other taxes, such as withholding taxes and real property gains taxes payable on disposal of properties. Taxes in the statements of profit or loss and other comprehensive income comprise current tax and deferred tax. (a) Current tax Current tax expenses are determined according to the tax laws of the jurisdiction in which the Group operates and include all taxes based upon the taxable profits and real property gains taxes payable on disposal of properties. ANNUAL REPORT 63

66 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.15 Income taxes (cont d) (b) Deferred tax Deferred tax is recognised in full using the liability method on temporary differences arising between the carrying amount of an asset or liability in the statement of financial position and its tax base. Deferred tax is recognised for all temporary differences, unless the deferred tax arises from goodwill or the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of transaction, affects neither accounting profit nor taxable profit. A deferred tax asset is recognised only to the extent that it is probable that taxable profits would be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amount of a deferred tax asset is reviewed at the end of each reporting period. If it is no longer probable that sufficient taxable profits would be available to allow the benefit of part or all of that deferred tax asset to be utilised, the carrying amount of the deferred tax asset would be reduced accordingly. When it becomes probable that sufficient taxable profits would be available, such reductions would be reversed to the extent of the taxable profits. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same taxation authority on either: (i) (ii) the same taxable entity; or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered Provisions Deferred tax would be recognised as income or expense and included in profit or loss for the period unless the tax relates to items that are credited or charged, in the same or a different period, directly to equity, in which case the deferred tax would be charged or credited directly to equity. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on the announcement of tax rates and tax laws by the Government in the annual budgets which have the substantive effect of actual enactment by the end of each reporting period. Provisions are recognised when there is a present obligation, legal or constructive, as a result of a past event, and when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, the amount of a provision would be discounted to its present value at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision would be reversed. 64 TRIplc BERHAD ( A)

67 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.16 Provisions (cont d) Provisions for restructuring are recognised when the Group has approved a detailed formal restructuring plan, and the restructuring either has commenced or has been announced publicly. Provisions are not recognised for future operating losses. If the Group has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision Contingent liabilities and contingent assets A contingent liability is a possible obligation that arises from past events whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources would be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Group does not recognise a contingent liability but discloses its existence in the financial statements. A contingent asset is a possible asset that arises from past events whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group. The Group does not recognise contingent asset but discloses its existence where the inflows of economic benefits are probable, but not virtually certain. In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities assumed are measured initially at their fair value at the acquisition date Employee benefits (a) Short term employee benefits Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and non-monetary benefits are measured on an undiscounted basis and are expensed when employees have rendered their services to the Group. Short term accumulating compensated absences such as paid annual leave are recognised as an expense when employees render services that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur and they lapse if the current period s entitlement is not used in full and do not entitle employees to a cash payment for unused entitlement on leaving the Group. Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make such payments, as a result of past events and when a reliable estimate can be made of the amount of the obligation. (b) Defined contribution plans The Company and its subsidiaries incorporated in Malaysia make contributions to a statutory provident fund. The contributions are recognised as a liability after deducting any contribution already paid and as an expense in the period in which the employees render their services. ANNUAL REPORT 65

68 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.18 Employee benefits (cont d) (c) Share-based payments The Group operates an equity-settled, share-based compensation plan, under which the Group receives services from employees as consideration for equity instruments of the Group. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted including any market performance conditions but excluding the impact of any non-market performance and service vesting conditions. Non-market performance and service conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. In addition, in some circumstances employees could provide services in advance of the grant date and therefore the grant date fair value is estimated for the purposes of recognising the expense during the period between service commencement period and grant date. At the end of each reporting period, the Group revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. The Group recognises the impact of the revision to original estimates, if any, in the profit or loss, with a corresponding adjustment to equity. If the options are exercised, the Company issues new shares to the employees. The proceeds received, net of any directly attributable transaction costs are recognised in ordinary share capital at nominal value, and any excess would be recognised in share premium Functional and presentation currency Items included in the financial statements of each of the entities of 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 ( RM ), which is the functional and presentation currency of the Company Revenue recognition Revenue is measured at the fair value of the consideration received or receivable net of discounts and rebates. Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction would flow to the Group, and the amount of revenue and the cost incurred or to be incurred in respect of the transaction can be reliably measured and specific recognition criteria have been met for each of the activities of the Group as follows: (a) Construction contracts Profits from contract works are recognised on the percentage of completion method. Percentage of completion is determined based on the proportion of contract costs incurred for work performed to date against total estimated costs where the outcome of the project can be estimated reliably. When it is probable that total contract costs would exceed total contract revenue, the expected loss is recognised as an expense immediately. 66 TRIplc BERHAD ( A)

69 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.20 Revenue recognition (cont d) (a) Construction contracts (cont d) Where the outcome of a construction contract cannot be reliably estimated, revenue is recognised only to the extent of contracts costs incurred that is probable would be recoverable and contract costs are recognised as an expense in the period in which they are incurred. Construction revenue in respect of service under the concession arrangements are recognised in accordance with MFRS 111 Construction Contracts (see Note 4.6 to the financial statements on service concession arrangements). (b) Sale of land held for property development Revenue from sale of land held for property development is recognised when significant risk and rewards of ownership of the land has been transferred to the buyer. (c) Rental income Rental income is recognised on a straight line basis over the term of an ongoing lease. (d) Maintenance services Revenue from maintenance services under the concession arrangements is recognised upon services rendered (see Note 4.6 to the financial statements on service concession arrangements). (e) Fees from property management Fees in respect of the rendering of property management services are recognised upon performance of services. (f) Interest income Interest income is recognised as it accrues, using the effective interest method. (g) Dividend income Dividend income is recognised when the rights to receive payment is established Operating segments Operating segments are defined as components of the Group that: (a) (b) (c) Engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group); Whose operating results are regularly reviewed by the chief operating decision maker of the Group in making decisions about resources to be allocated to the segment and assessing its performance; and For which discrete financial information is available. An operating segment may engage in business activities for which it has yet to earn revenues. ANNUAL REPORT 67

70 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.21 Operating segments (cont d) The Group reports separately information about each operating segment that meets any of the following quantitative thresholds: (a) (b) Its reported revenue, including both sales to external customers and intersegment sales or transfers, is ten percent (10%) or more of the combined revenue, internal and external, of all operating segments. The absolute amount of its reported profit or loss is ten percent (10%) or more of the greater, in absolute amount of: (i) (ii) The combined reported profit of all operating segments that did not report a loss; and The combined reported loss of all operating segments that reported a loss. (c) Its assets are ten percent (10%) or more of the combined assets of all operating segments. Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and separately disclosed, if the management believes that information about the segment would be useful to users of the financial statements. Total external revenue reported by operating segments shall constitute at least seventy five percent (75%) of the revenue of the Group. Operating segments identified as reportable segments in the current financial year in accordance with the quantitative thresholds would result in a restatement of prior period segment data for comparative purposes Earnings per share (a) Basic Basic earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the financial year. (b) Diluted Diluted earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the financial year adjusted for the effects of dilutive potential ordinary shares Fair value measurements The fair value of an asset or a liability, (except for share based payment and lease transactions) is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market. The Group measures the fair value of an asset or a liability by taking into account the characteristics of the asset or liability if market participants would take these characteristics into account when pricing the asset or liability. The Group has considered the following characteristics when determining the fair value: (a) (b) The condition and location of the asset; and Restrictions, if any, on the sale or use of the asset. 68 TRIplc BERHAD ( A)

71 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 4. SIGNIFICANT ACCOUNTING POLICIES (cont d) 4.23 Fair value measurements (cont d) The fair value measurement for a non-financial asset takes into account the ability of the market participant to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The fair value of a financial or non-financial liability or an entity s own equity instrument assumes that: (a) (b) A liability would remain outstanding and the market participant transferee would be required to fulfil the obligation. The liability would not be settled with the counterparty or otherwise extinguished on the measurement date; and An entity s own equity instrument would remain outstanding and the market participant transferee would take on the rights and responsibilities associated with the instrument. The instrument would not be cancelled or otherwise extinguished on the measurement date. 5. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs 5.1 New MFRSs adopted during the current financial year The Group and the Company adopted the following Standards of the MFRS Framework that were issued by the Malaysian Accounting Standards Board ( MASB ) during the financial year. Title Effective Date Amendments to MFRS 10 Consolidated Financial Statements: Investment Entities 1 January Amendments to MFRS 12 Disclosure of Interest in Other Entities: Investment Entities 1 January Amendments to MFRS 127 Separate Financial Statements (2011): Investment Entities 1 January Amendments to MFRS 132 Offsetting Financial Assets and Financial Liabilities 1 January Amendments to MFRS 136 Recoverable Amount Disclosures for Non-Financial Assets 1 January Amendments to MFRS 139 Novation of Derivatives and Continuation of Hedge Accounting 1 January IC Interpretation 21 Levies 1 January There is no material effect upon the adoption of the above Amendments to MFRSs and IC Interpretation during the financial year. 5.2 New MFRSs that have been issued, but only effective for annual periods beginning on or after 1 July. The following are Standards of the MFRS Framework that have been issued by the Malaysian Accounting Standards Board ( MASB ) but have not been early adopted by the Group and the Company. Title Effective Date Amendments to MFRS 119 Defined Benefit Plans: Employee Contributions 1 July Amendments to MFRSs Annual Improvements Cycle 1 July Amendments to MFRSs Annual Improvements Cycle 1 July MFRS 14 Regulatory Deferral Accounts 1 January 2016 Amendments to MFRS 10 and MFRS 128 Sale or Contribution of Assets between an Investor and its Associates or Joint Venture 1 January 2016 Amendments to MFRS 10, MFRS 12 and MFRS 128 Investment Entities: Applying the Consolidation Exception 1 January 2016 Amendments to MFRS 101 Disclosure Initiative 1 January 2016 ANNUAL REPORT 69

72 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 5. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs (cont d) 5.2 New MFRSs that have been issued, but only effective for annual periods beginning on or after 1 July. (cont d) The following are Standards of the MFRS Framework that have been issued by the Malaysian Accounting Standards Board ( MASB ) but have not been early adopted by the Group and the Company. (cont d) Title Effective Date Amendments to MFRS 116 and MFRS 138 Clarification of Acceptable Methods of 1 January 2016 Depreciation and Amortisation Amendments to MFRS 11 Accounting for Acquisitions of Interests in Joint Operations 1 January 2016 Amendments to MFRS 116 and MFRS 141 Agriculture: Bearer Plants 1 January 2016 Amendments to MFRS 127 Equity Method in Separate Financial Statements 1 January 2016 Amendments to MFRSs Annual Improvements to Cycle 1 January 2016 MFRS 15 Revenue from Contracts with Customers 1 January 2018 MFRS 9 Financial Instruments (IFRS as issued by IASB in July ) 1 January 2018 The Group is in the process of assessing the impact of implementing these accounting Standards and Amendments to MFRSs, since the effects would only be observable for the future financial years. 6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS 6.1 Changes in estimates Estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Directors are of the opinion that there are no material changes in estimates at the end of the reporting period. 6.2 Critical judgments made in applying accounting policies The following are the judgments made by the management in the process of applying the accounting policies of the Group that have the most significant effect on the amounts recognised in the financial statements. (a) Classification between investment properties and property, plant and equipment The Group has temporarily sub-let a factory building on a long term leasehold land but has decided not to treat this property as an investment property because it is not the intention of the Group to hold this property in the long-term for capital appreciation or rental income. Accordingly, this property is classified as property, plant and equipment. (b) Contingent liabilities on corporate guarantees The Directors are of the view that the chances of the financial institutions to call upon the corporate guarantees are remote. (c) Classification of leasehold land The Group has assessed and classified land use rights of the Group as finance leases based on the extent to which risks and rewards incidental to ownership of the land resides with the Group arising from the lease term. Consequently, the Group has classified the unamortised upfront payment for land use rights as finance leases in accordance with MFRS 117 Leases. 70 TRIplc BERHAD ( A)

73 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (cont d) 6.3 Key sources of estimation uncertainty The following are key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. (i) Depreciation of property, plant and equipment The cost of property, plant and equipment is depreciated on a straight-line basis over the assets useful lives. Management estimates the useful lives of these property, plant and equipment to be within the period as disclosed in Note 4.4 to the financial statements. These are common life expectancies applied in the industry of the Group and the Company operates. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets and therefore future depreciation charges could be revised. (ii) Construction contracts The Group recognises revenue from construction activities and the related expenses in profit or loss by using the percentage of completion method. The percentage of completion is determined by the proportion that contract costs incurred for work performed to-date compares to the estimated total contract costs. Significant judgement is required in determining the stage of completion, the extent of the contract costs incurred, the estimated total contract revenue and costs, as well as the recoverability of the construction contracts. Total contract revenue also includes an estimation of variation works that are recoverable from customers. In making this judgement, the Group relies on past experience and the work of specialists. (iii) Deferred tax assets Deferred tax assets are recognised for all unutilised tax losses, unabsorbed capital allowances and other deductible temporary differences to the extent that it is probable that future taxable profits would be available against which the tax losses, capital allowances and other deductible temporary differences can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that could be recognised, based on the likely timing and extent of future taxable profits together with future tax planning strategies. The unrecognised unutilised tax losses, unabsorbed capital allowances and other deductible temporary differences are disclosed under Note 22 to the financial statements. (iv) Income taxes Significant judgement is involved in determining the Group-wide and the Company-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group and the Company recognise tax liabilities from expected tax issues based on estimation of whether additional taxes would due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences would impact the income tax and deferred tax provisions in the period in which such determination is made. (v) Impairment of receivables The Group makes impairment of receivables based on an assessment of the recoverability of receivables. Impairment is applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. Management specifically analyses historical bad debts, customer concentration, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of the impairment of receivables. Where expectations differ from the original estimates, the differences would impact the carrying amount of receivables. ANNUAL REPORT 71

74 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (cont d) 6.3 Key sources of estimation uncertainty (cont d) (vi) Fair values of borrowings The fair values of borrowings are estimated by discounting future contractual cash flows at the current market interest rates available to the Group for similar financial instruments. It is assumed that effective interest rates approximate the current market interest rates available to the Group based on its size and its business risk. (vii) Impairment of investments in subsidiaries and impairment of amounts owing by subsidiaries The Directors review the investments in subsidiaries for impairment when there is an indication of impairment and assess the impairment of amounts owing by subsidiaries when the receivables are long outstanding. The recoverable amounts of the investments in subsidiaries and amounts owing by subsidiaries are assessed by reference to the fair value of the underlying assets. (viii) Fair value measurement The fair value measurement of the financial and non-financial assets and liabilities of the Group utilises market observable inputs and data as far as possible, where applicable. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique utilised are: (i) (ii) (iii) Level 1: Quoted prices in active markets for identical items (unadjusted); Level 2: Observable direct or indirect inputs other than Level 1 inputs; and Level 3: Unobservable inputs (i.e. not derived from market date). The classification of an item into the above levels is based on the lowest level of the inputs used in the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur. The Group measures financial instruments in the financial statements at fair value, which are disclosed in Note 33 to the financial statements. 7. PROPERTY, PLANT AND EQUIPMENT Group Long term leasehold land Buildings Plant and machinery Office equipment and fittings Motor vehicles Total Cost As at 1 June 8,200 25,945 19,610 3,315 6,310 63,380 Additions Disposal (20) - (20) As at 31 May 8,200 25,945 19,610 3,475 6,783 64,013 Accumulated depreciation As at 1 June 1,137 3,367 10,451 2,503 3,880 21,338 Charge for the financial year ,092 Disposal (20) - (20) As at 31 May 1,211 3,471 10,451 2,739 4,538 22,410 Accumulated impairment loss As at 31 May / 1,190 17,759 9, , TRIplc BERHAD ( A)

75 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 7. PROPERTY, PLANT AND EQUIPMENT (cont d) Group Long term leasehold land Buildings Plant and machinery Office equipment and fittings Motor vehicles Total Cost As at 1 June ,200 25,945 19,610 2,701 6,298 62,754 Additions As at 31 May 8,200 25,945 19,610 3,315 6,310 63,380 Accumulated depreciation As at 1 June ,063 3,263 10,451 2,403 3,283 20,463 Charge for the financial year As at 31 May 1,137 3,367 10,451 2,503 3,880 21,338 Accumulated impairment loss As at 31 May /2013 1,190 17,759 9, ,300 Carrying amount 5,799 4, ,162 13,303 5,873 4, ,347 13,742 Company Office equipment and fittings Motor vehicles Total Cost As at 1 June ,488 Additions As at 31 May 782 1,176 1,958 Accumulated depreciation As at 1 June ,103 Charge for the financial year As at 31 May ,309 Cost As at 1 June ,487 Additions 1-1 As at 31 May ,488 Accumulated depreciation As at 1 June Charge for the financial year As at 31 May ,103 Carrying amount ANNUAL REPORT 73

76 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 7. PROPERTY, PLANT AND EQUIPMENT (cont'd) (a) During the financial year, the Group and the Company made the following cash payments to purchase property, plant and equipment: Group Company Purchase of property, plant and equipment Financed by hire purchase arrangements (390) - (390) - Other payables and accruals (34) (182) - - Cash payment on purchase of property, plant and equipment (b) The carrying amount of property, plant and equipment of the Group and of the Company under finance leases as at the end of reporting period are as follows: Group Company Motor vehicles 1,409 1, (c) As at the end of the reporting period, buildings with a carrying amount of RM1,092,000 (: RM1,106,000) have been charged to a financial institution for credit facilities granted to the Group as disclosed in Note 18 (a) to the financial statements. 8. INVESTMENTS IN SUBSIDIARIES At cost Company Unquoted equity shares, at cost 169, ,569 Less: Impairment losses (66,610) (66,610) 103, ,959 The details of subsidiaries, which are all incorporated in Malaysia, are as follows: Effective interest Name of company Principal activities Suasa Integrasi (M) Sdn. Bhd.** 100% 100% Property development Insa Alliance Sdn. Bhd. 100% 100% Property development and provision of project management services Usahasewa Sdn. Bhd.** 100% 100% Property development Tirai Gemilang Sdn. Bhd.** 100% 100% Property development Layar Kekal (M) Sdn. Bhd.** 100% 100% Property development Samasys Sdn. Bhd.** 100% 100% Property development Zuriat Watan Sdn. Bhd. 100% 100% Property development Central Challenger (M) Sdn. Bhd.** 100% 100% Property development, provision of project management services and property management 74 TRIplc BERHAD ( A)

77 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 8. INVESTMENTS IN SUBSIDIARIES (cont d) The details of subsidiaries, which are all incorporated in Malaysia, are as follows: (cont d) Effective interest Name of company Principal activities TRIplc Resources Sdn. Bhd. 100% 100% Property construction and related activities Prinsip Barisan (M) Sdn. Bhd. 100% 100% Property investment TRIplc FMS Sdn. Bhd. 100% 100% Provision of facilities management services TRIplc Industries Sdn. Bhd. 100% 100% Property construction and related activities TRIplc Medical Sdn. Bhd. 100% 100% Property construction and related activities TRIplc Ventures Sdn. Bhd. 100% 100% Property construction and related activities ** Not audited by BDO (a) (b) (c) An investment in a subsidiary amounting to RM26,650,000 (: RM26,650,000) has been pledged to a financial institution for term loan, revolving credit, bank guarantee and advance payment bond facilities granted to the Group in relation to the construction works of UiTM Puncak Alam Campus as disclosed in Note 17(g) to the financial statements. On 18 March, the Group incorporated two (2) wholly-owned subsidiaries known as TRIplc FMS Sdn. Bhd. and TRIplc Medical Sdn. Bhd. with a paid-up share capital of RM100,000 and RM2 respectively. On 20 January, there was an additional investment by the Company amounted to RM274,998 by way of allotment of 274,998 ordinary shares in TRIplc Medical Sdn. Bhd. 9. INVENTORIES Group At cost Land held for property development 82,789 82,753 The components of land held for properties development as at the end of the financial year comprise: Group Leasehold land 46,831 46,831 Development expenditure 35,958 35,922 82,789 82,753 (i) Certain parcels of leasehold land of the Group with a carrying value of RM460,000 (: RM460,000) have been charged as security for bank overdraft facility granted to the Group as disclosed in Note 21 (a) (i) to the financial statements. ANNUAL REPORT 75

78 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 9. INVENTORIES (cont d) (ii) (iii) Land title for certain leasehold land with a carrying amount of RM44,167,000 (: RM44,157,000) will only be issued upon payment of the land conversion premium as mentioned in Note 23 to the financial statements. Certain parcels of leasehold land of the Group with a carrying value of RM37,234,000 (: RM Nil) have been charged as security for term loan facility granted to the Group as disclosed in Note 18 (c) to the financial statements. 10. GOODWILL ON CONSOLIDATION Group Balance as at 1.6. Impairment loss for the financial year Balance as at Carrying amount Goodwill Cost As at Accumulated impairment loss Carrying amount Goodwill Group Balance as at Impairment loss for the financial year Balance as at Carrying amount Goodwill 8,454 (8,454) - Cost As at Accumulated impairment loss Carrying amount Goodwill 59,034 (59,034) - In the previous financial year, the Board of Directors had re-assessed the recoverable amount of the goodwill based on actual operating results and their expectation of future cash flows in the CGU, property development and property investment. Based on their assessment, an impairment loss of RM8,454,000 for the goodwill has been recognised in the previous financial year as a result of a decline in the economic benefits from CGU. 76 TRIplc BERHAD ( A)

79 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 11. TRADE AND OTHER RECEIVABLES Group Company Non-current Trade receivables Amount due from a customer for contract works (Note 12) 333, , , , Non-trade receivables Other receivables 49,544 56, , , Current Trade receivables Third parties 9,707 8,796 3,744 3,743 Amount due from a customer for contract works (Note 12) 15,272 7,366 9,693 2,340 24,979 16,162 13,437 6,083 Non-trade receivables Amounts owing by subsidiaries , ,547 Other receivables 18,554 18,565 5,427 5,102 Deposits Prepayments 5,796 6, ,915 25, , ,758 Less: Impairment losses - trade receivables (2,508) (2,508) other receivables (7,869) (7,869) (4,873) (4,873) - amounts owing by subsidiaries - - (78,763) (78,763) 39,517 31, , ,205 Total trade and other receivables 422, , , ,205 (a) (b) (c) (d) (e) Current trade receivables from third parties are non-interest bearing and the normal trade credit terms granted by the Group and the Company ranged from 14 to 30 days (: 14 to 30 days). They are recognised at their original invoice amounts which represent their fair values on initial recognition. Included in non-current other receivables of the Group are financial assets from concession arrangement for Universiti Teknologi Mara ( UiTM ) project which bear interest rate at a rate of 7.5% (: 7.5%) per annum. Amounts owing by subsidiaries represent advances and payments made on behalf which are unsecured, interestfree and repayable upon demand. Information on financial risks of trade and other receivables are disclosed in Note 34 to the financial statements. Trade and other receivables are denominated in RM. ANNUAL REPORT 77

80 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 11. TRADE AND OTHER RECEIVABLES (cont d) (f) The ageing analysis of trade receivables (excluding amount due from a customer for contract works) of the Group and of the Company are as follows: Group Company Neither past due nor impaired 1, Past due, not impaired 31 to 60 days - 1, to 90 days to 210 days More than 210 days 5,008 4,880 3,744 3,744 5,245 6,288 3,744 3,744 Past due and impaired 2,508 2, Receivables that are neither past due nor impaired 9,707 8,796 3,744 3,744 Trade receivables that are neither past due nor impaired are creditworthy receivables with good payment records with the Group and the Company. None of the trade receivables of the Group and of the Company that are neither past due nor impaired have been renegotiated during the financial year. Receivables that are past due but not impaired At the end of each reporting period, trade receivables of the Group and the Company arising from construction and property development that are past due but not impaired amounted to RM5,245,000 (:RM6,288,000) and RM3,744,000 (:RM3,744,000) respectively. These receivables are creditworthy receivables and the Directors are of the opinion that the balances due can be fully recovered in the near future. Receivables that are past due and impaired Trade receivables of the Group that are past due and impaired at the end of each reporting period are as follows: Group Individually impaired Trade receivables, gross 2,508 2,508 Impairment loss (2,508) (2,508) TRIplc BERHAD ( A)

81 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 11. TRADE AND OTHER RECEIVABLES (cont d) (g) The reconciliation of movement in the impairment loss of trade receivables is as follows: Group As at 1 June 2,508 2,508 Charge for the financial year - - As at 31 May 2,508 2,508 Trade receivables that are individually determined to be impaired at the end of each reporting period relate to those receivables that exhibit significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements. 12. AMOUNT DUE FROM A CUSTOMER FOR CONTRACT WORKS Group Company Aggregate costs incurred to date 1,251,473 1,244,317 1,046,765 1,039,412 Add: Attributable profits 161, ,795 21,294 21,294 1,413,268 1,406,112 1,068,059 1,060,706 Less: Progress billings (1,064,793) (1,059,150) (1,058,366) (1,058,366) Amount due from a customer for contract works 348, ,962 9,693 2,340 Amount due from a customer for contract works - non-current 333, , current 15,272 7,366 9,693 2, , ,962 9,693 2,340 (a) Included in aggregate costs incurred to date are the following charges capitalised during the financial year: Group and Company Salaries, wages and bonuses 4,323 3,223 Defined contribution retirement plan Other employee benefits Total staff costs 5,801 3,773 (b) Concession Agreement ( CA ) On 4 May 2010, the Company announced that TRIplc Ventures Sdn. Bhd. ( Concession Company ), a wholly owned subsidiary of the Company, has executed a CA with the Government of Malaysia and UiTM for the grant to the Concession Company of the right and authority to undertake the planning, design, development, construction, landscaping, equipping, installations, completion, testing and commissioning of the Facilities and Infrastructure of UiTM Puncak Alam Campus and to carry out the maintenance works in relation to the maintenance of the Facilities and Infrastructure (collectively referred to as the Concession ). ANNUAL REPORT 79

82 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 12. AMOUNT DUE FROM A CUSTOMER FOR CONTRACT WORKS (cont d) (b) Concession Agreement ( CA ) (cont d) The principal terms of the CA are as follows: (i) (ii) the Concession Period shall be for a period of twenty three (23) years commencing from the Construction Commencement Date or Effective Date whichever is later and ending on the twenty third (23rd) anniversary of the date. The commencement date of the construction is 11 April the maintenance works will commence upon the issuance of Certificate of Acceptance by UiTM and expire on the last date of the Concession Period ( Maintenance Period ). The project has been completed and the Certificate of Acceptance was issued by UiTM on 11 April. The issuance of Certificate of Acceptance is to confirm the acceptance of the availability of Facilities and Infrastructure by UiTM and to confirm the commencement of the Maintenance Period is from 11 April. UiTM shall pay the concession company throughout the Maintenance Period the following charges: (i) (ii) Availability Charges for the availability of the Facilities and Infrastructure; Maintenance Charges for the provision of maintenance works in accordance with the provision of the Concession Agreement. (c) Non-current amount due from a customer for contract works represents financial assets from the concession arrangement for the UiTM project. The amount comprises the fair value of the consideration receivable for the construction services delivered during the stage of construction. The repayment is in the form of availability charges from the concession arrangement, which commenced in year for a period of twenty (20) years. 13. CASH AND BANK BALANCES Group Company Cash and bank balances 14,430 3,601 1, Deposits with licensed banks 63,223 39,994 1,094 1,064 Short term funds As reported in the statements of financial position 77,668 43,609 2,605 1,923 Less: Bank overdraft (Note 21) (1,992) (2,317) (1,992) (2,317) Less: Fixed deposits placed with a licensed banks with original maturity of more than three (3) months (34,899) (9,163) - - Less: Deposits pledged to a licensed bank (1,094) (1,064) (1,094) (1,064) As reported in the statements of cash flows 39,683 31,065 (481) (1,458) (a) (b) Included in the cash and bank balances of the Group is an amount of RM53,000 (: RM52,000) held under Housing Development Account pursuant to Section 7A of the Housing Development (Control and Licensing) Act, 1966, as amended by the Housing Developers (Housing Development Account) (Amendment) Regulations, Deposits with a licensed bank of the Group and the Company amounting to RM1,094,000 (: RM1,064,000) and RM1,094,000 (: RM1,064,000) respectively have been pledged as securities for banking facilities granted to the Company as disclosed in Note 21(b) to the financial statements. 80 TRIplc BERHAD ( A)

83 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 13. CASH AND BANK BALANCES (cont d) (c) (d) (e) (f) (g) Included in the cash and bank balances and deposits with licensed banks of the Group are amounts of RM3,234,000 (: RM112,000) and RM46,617,000 (: RM 438,000) held under the Designated Accounts pursuant to an agreement entered between the Group and a Security Agent for the availability of Financial Guarantee Insurance Facility ( FGI ) to the Group by Danajamin Nasional Berhad ( Chargee ). The Group assigned and charged to the Security Agent all its rights, title, interest and benefits in and under the Designated Accounts as securities for the repayment of the total secured amount for the FGI facility and Junior Notes as disclosed in Note 17(g) (vi) to the financial statements. Included in the cash and bank balances and deposits with licensed banks of the Group are amounts of RM212,000 (: RM467,000) and RM3,019,000 (: RM32,791,000) held under the Disbursement Account pursuant to an agreement entered between the Group and the Chargee for the availability of FGI by the Chargee. The Group assigned and charged to the Chargee all its rights, title, interest and benefits in and under the Disbursement Account as securities for the FGI facility as disclosed in Note 17(g) (vi) to the financial statements. Short term funds represent investment in fixed income trust funds in Malaysia, which are invested in highly liquid money markets, with original maturities of three (3) months or less, readily convertible to a known amount of cash and subject to an insignificant risk of changes in value. Cash and bank balances are denominated in RM. Information on financial risks of cash and bank balances is disclosed in Note 34 to the financial statements. 14. SHARE CAPITAL Group and Company Number of shares 000 Number of shares 000 Ordinary shares of RM1.00 each: Authorised 200, , , ,000 Issued and fully paid-up Balance as at 1 June 64,280 64,280 64,022 64,022 Issued for cash pursuant to employees share options scheme Balance as at 31 May 64,967 64,967 64,280 64,280 The Company implemented an Employees Share Option Scheme on 30 December 2013 ( ESOS 2013/2018 ). The ESOS 2013/2018 is administered by an ESOS Committee which comprises such persons as shall be appointed from time to time by the Board of Directors, and governed by the ESOS By-laws which were approved by the shareholders on 19 December 2013 ( ESOS By-laws ). The salient features of the ESOS 2013/2018 are as follows: (a) (b) The ESOS 2013/2018 is set up for the participation in ordinary shares of the Company only. The maximum number of new ordinary shares which may be made available under the ESOS 2013/2018 shall not exceed in aggregate 10% of the total issued and paid-up share capital of the Company at the point in time when an offer is made. The ESOS 2013/2018 is for a period of 5 years expiring on 28 December 2018 ( Original Expiry Date ), subject however to renewal for a period of up to a maximum of 5 years immediately from the Original Expiry Date upon recommendation by the ESOS Committee and to be determined by the Board on or before the Original Expiry Date, provided that the total duration of the ESOS 2013/2018 shall not exceed 10 years from the ESOS 2013/2018 effective date. ANNUAL REPORT 81

84 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 14. SHARE CAPITAL (cont d) The salient features of the ESOS 2013/2018 are as follows: (cont d) (c) (d) Eligible Persons are those Directors and employees who have attained the age of 18 and are confirmed full time employees or contract staff who have been employed within the Group (save for subsidiaries which are dormant) for at least one (1) year, unless otherwise decided by the ESOS Committee at its discretion, and/or is under such categories and criteria that the ESOS Committee may from time to time decide at its discretion. In the case of a Director or an employee (who is the chief executive or a major shareholder of the Company) and persons connected to them, their specific allotments under the ESOS 2013/2018 shall be approved by the shareholders of the Company. The maximum number of new ordinary shares that may be offered to a selected eligible person shall be determined at the discretion of the ESOS Committee after taking into consideration, amongst others and where relevant, the performance, contribution, employment grade, seniority and length of service of the selected eligible person, subject to the following: (i) (ii) (iii) The Directors and senior management do not participate in the deliberation or discussion of their own allocation; The allocation to a selected eligible person, who either singly or collectively, through persons connected to the selected eligible person, holds 20% or more of the issued and paid-up share capital of the Company, must not exceed 10% of the new ordinary shares available under the ESOS 2013/2018; and Not more than 50% of the new ordinary shares made available under the ESOS 2013/2018 shall be allocated in aggregate to the Directors and senior management of the Group (save for subsidiaries which are dormant). (e) (f) (g) The ESOS options granted under the ESOS 2013/2018 shall be incapable of being disposed, transferred and/ or assigned, or subject to any encumbrances in any manner except in the event of the death for the grantee in accordance with the provisions of the ESOS By-laws, and are exercisable at any time(s) during the duration of the ESOS 2013/2018. Pursuant to the Listing Requirements, an eligible Director who is a Non-Executive Director of the Company and/or any of its subsidiaries shall not sell, transfer or assign the ordinary shares obtained through the exercise of the ESOS options granted to him within 1 year from the date of offer. Except for the Non-Executive Directors as mentioned above, the new ordinary shares allotted and issued to the grantees under the ESOS 2013/2018 will not be subject to any holding period or restriction on disposal, transfer and/or assignment. However, the ESOS Committee has the discretion in determining whether the exercise of the ESOS options or allotment and issuance of the new ordinary shares pursuant to the exercise of the ESOS options will be subject to any performance target. The exercise price of the options at which the eligible employees are entitled to subscribe for the ordinary shares of the Company under the ESOS 2013/2018 is the weighted average market price of the shares of the Company as quoted in the Daily Official List issued by Bursa Malaysia Securities Berhad for the five (5) market days immediately preceding the respective dates of offer subject to a discount of not more than 10%, or such other percentage of discount as may be permitted by Bursa Malaysia Securities Berhad and/or any other relevant authorities from time to time at the ESOS Committee s discretion, or at the par value of the ordinary shares of the Company, whichever is higher. The new ordinary shares issued arising from the ESOS 2013/2018 shall rank pari-passu in all respects with the then existing ordinary shares of the Company except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, the entitlement date of which is prior to the date of allotment of the said new ordinary shares and are subject to the provisions of the Articles of Association of the Company. 82 TRIplc BERHAD ( A)

85 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 14. SHARE CAPITAL (cont d) Information in respect of options to take up any unissued ordinary shares of RM1.00 each of the Company during the financial year is as follows: Number of share options Exercise period Date of offer Exercise price Balance as at 1.6. Granted Exercised Balance as at Exercisable as at First ESOS grant RM1.11 1,859,900 - (499,900) 1,360,000 1,360,000 Second ESOS grant RM1.13-1,919,000 (186,600) 1,732,400 1,732,400 1,859,900 1,919,000 (686,500) 3,092,400 3,092,400 Share options exercised during the financial year resulted in the issuance of 499,900 and 186,600 ordinary shares (: 258,500 ordinary shares) at a price of RM1.11 and RM1.13 each (: RM1.13) respectively. The related weighted average ordinary share price at the date of exercise was RM1.33 (: RM1.30). The fair value of share options granted was estimated by the Directors using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted. The fair values of share options measured at grant date are as follows: Grant date Vesting date Fair value RM First ESOS grant 9 January 9 January 0.84 Second ESOS grant 24 October 24 October 0.80 The fair values of the share options were arrived at based on the following inputs: First ESOS Grant on 9.1. Second ESOS Grant on Share price (RM) Exercise price (RM) Expected life (years) Risk free interest rate (%) Expected dividend yield (%) - - Volatility of share return (%) The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other features of the option grant were incorporated into the measurement of fair value. ANNUAL REPORT 83

86 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 15. RESERVES Group Company Non-distributable Share premium Share options reserve 2,528 1,562 2,528 1,562 Distributable Retained earnings 75,367 68,237 23,928 17,354 78,571 69,827 27,132 18,944 (a) Share options reserve The share options reserve represents the effect of equity-settled share options granted to employees. This reserve is made of the cumulative value of services received from employees for the issue of share options. When the share options are exercised, an amount from the share options reserve is transferred to share premium. When the share options expire, the carrying amount from the share options reserve is transferred to retained earnings. 16. BORROWINGS - SECURED Group Company Non-current liabilities Medium Term Notes 234, , Junior Notes 28,052 27, Term loans 27, ,500 - Hire purchase creditors , ,331 28, Current liabilities Term loans 7,584 11,880 7,500 11,800 Hire purchase creditors Revolving credit 6,800-6,800 - Bank overdraft 1,992 2,317 1,992 2,317 16,535 14,370 16,423 14,215 Total borrowings Medium Term Notes (Note 17) 234, , Junior Notes (Note 17) 28,052 27, Term loans (Note 18) 35,384 12,253 35,000 11,800 Hire purchase creditors (Note 19) Revolving credit (Note 20) 6,800-6,800 - Bank overdraft (Note 21) 1,992 2,317 1,992 2, , ,701 44,428 14,485 Information on financial risks of borrowings is disclosed in Note 34 to the financial statements. 84 TRIplc BERHAD ( A)

87 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 17. MEDIUM TERM NOTES AND JUNIOR NOTES - SECURED Medium Term Notes Group At beginning/end of the financial year 240, ,000 Accretion of discount At beginning of the financial year 5,904 6,677 Less: Recognised in profit or loss (Note 26) (776) (773) 5,128 5, , ,096 Repayable as follows: Non-current liabilities: - later than one (1) year and not later than five (5) years 76,657 56,426 - later than five (5) years 158, , , ,096 Junior Notes At beginning/end of the financial year 35,000 35,000 Accretion of discount At beginning of the financial year 7,436 7,917 Less: Recognised in profit or loss (Note 26) (488) (481) At end of the financial year 6,948 7,436 28,052 27,564 Repayable as follows: Non-current liabilities: - later than one (1) year and not later than five (5) years later than five (5) years 28,052 27,564 28,052 27,564 (a) On 10 October 2011, a wholly-owned subsidiary of the Company, TRIplc Ventures Sdn. Bhd. ( TVSB ) issued RM240 million nominal value Medium Term Notes under a MTN programme for the following purpose: i. to part finance the construction cost as defined under the Concession Agreement ( CA ) executed between TVSB, UiTM and the Government of Malaysia for the design, development, construction and completion of the Facilities and Infrastructure as defined under the CA; and ii. to finance the payment of coupons under the Medium Term Notes during the construction period of the said Facilities and Infrastructure and to prefund the debt service reserve account required under the financial guarantee facility up to such amount equivalent to the minimum required balance. (b) On 1 June 2012, TVSB, a wholly owned subsidiary of the Company, issued RM35.0 million nominal value junior term notes under Tranche 1 of the Junior Notes Programme for the following purpose: i. to part finance the construction cost as defined under the CA executed between TVSB, UiTM and the Government of Malaysia for the design, development, construction and completion of the Facilities and Infrastructure as defined under the CA; ii. iii. to finance the payment of coupons under the Medium Term Notes during the construction period of the said Facilities and Infrastructure; and to defray all relevant expenses incurred under the Medium Term Notes Programme and Junior Notes Programme. ANNUAL REPORT 85

88 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 17. MEDIUM TERM NOTES AND JUNIOR NOTES - SECURED (cont d) (c) (d) (e) The Medium Term Notes of the Group bears coupon interest at a rate of 3.0% for the first 3 years of the tenure and at rates ranging from 5.40% to 5.93% per annum for the subsequent years of the tenure. The Junior Notes of the Group bears coupon at a rate of 0% for the first 3 years of the tenure and 8% per annum for the subsequent years of the tenure. However, the annual interest paid out shall not be more than 3% per annum and the balance of 5% per annum interest payable shall not be paid while any of the Medium Term Notes remain outstanding. The interest rate for the final year of tenure is 116.6%. The Medium Term Notes is repayable as follows: (i) (ii) (iii) repayment of RM20 million instalments each to be made from the fifth year to the tenth year from the issue date; repayment of RM25 million instalments each to be made from the eleventh to the fourteenth year from the issue date; and final repayment of RM20 million to be made at the end of the fifteenth year from the issue date. (f) The Junior Notes is repayable as follows: (i) repayment of RM35 million to be made at the end of the fifteenth year from the issue date; (g) Medium Term Notes is secured by the Financial Guarantee Insurance ( FGI ) facility. The FGI facility and Junior Notes are secured by: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) debenture over present and future assets of two subsidiaries; assignment of all rights, title, interests and benefits in and under the Concession Agreement; assignment of all rights, title, interests and benefits in and under the insurances and the performance bonds; assignment of all rights, title, interests and benefits in and under the principal contract between TVSB and its principal contractors; assignment of all rights, title, interests and benefits in and under the main contract between the subsidiary of the Company and its main-contractor; assignment and charge all rights, title, interests and benefits of certain subsidiaries designated accounts and disbursement accounts; assignment and charge all rights, title, interests and benefits in and under the sub-lease agreement under the CA; corporate guarantee from the Company; charge over investment in a subsidiary, TVSB with a carrying amount of RM26,650,000 (: RM26,650,000); undertaking by the Company; and undertaking by a substantial shareholder. 86 TRIplc BERHAD ( A)

89 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 17. MEDIUM TERM NOTES AND JUNIOR NOTES - SECURED (cont d) (h) Significant covenants for the Medium Term Notes and Junior Notes are as follows: (i) (ii) (iii) debt service cover ratio of not less than 1.30 times throughout the tenure of the credit facilities of the Group for the covenant of Medium Term Notes and Junior Notes. debt service cover ratio of not less than 1.50 times after payment of Junior Notes interest and dividend throughout the tenure of the credit facilities of the Group to the covenant of Medium Term Notes and Junior Notes. debt to equity ratio of not more than 90:10 throughout the tenure of the credit facilities of the Group for the covenant of Junior Notes. The financial covenant for item (i) is only effective from October. As at the end of financial year, the debt service cover ratio for item (ii) and debt to equity ratio of the Group remains not less than 1.50 times and not more than 90:10 respectively. 18. TERM LOANS - SECURED Group Company Term loan I Term loan II - 11,800-11,800 Term loan III 35,000-35,000-35,384 12,253 35,000 11,800 Repayable as follows: Current liabilities: - not later than one (1) year 7,584 11,880 7,500 11,800 Non-current liabilities: - later than one (1) year and not later than five (5) years 27, , later than five (5) years , ,500-35,384 12,253 35,000 11,800 (a) Term loan I In financial year 2002, a wholly-owned subsidiary of the Company, obtained a long term loan facility ( Term loan I ) of RM1,000,000 to finance the purchase of shop offices. The Term loan I is repayable over a period of twenty (20) years by way of 240 monthly instalments of RM8,366 each. The Term loan I is secured by way of a legal charge over the buildings of the subsidiary as disclosed in Note 7(c) to the financial statements and is guaranteed by the Company. The Term loan I bears effective interest at a rate of 5% (: 5%) per annum. ANNUAL REPORT 87

90 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 18. TERM LOANS - SECURED (cont d) (b) Term loan II In the previous financial years, the Company obtained a short term loan ( Term loan II ) facility of RM11,800,000 for working capital purpose. The Term loan II is secured by way of pledge of a fixed deposit of RM12,100,000 with the bank by a substantial shareholder of the Company. The Term loan II bears effective interest at a rate of 4.81% (: 5.05%) per annum. In October, the Company has converted the existing Term loan II from term loan into revolving credit facility as disclosed in Note 20 to the financial statements. (c) Term loan III During the financial year, the Company obtained a long-term term loan facility ( Term Loan III ) of RM105.0 million for purposes as below: Tranche 1 RM35.0 million i. to fund pre-operating working capital requirements of TRIplc relating to a future project, including partially prepaying RM5.0 million of the Company s existing Term Loan II and settling all the arranger fees. Tranche 2 RM70.0 million i. to finance pre-operating expenses and equity contribution of a wholly-owned subsidiary of TRIplc, TRIplc Medical Sdn. Bhd. ( SPV ) for future project. ii. to pay for funding costs of the long-term term loan facility. On 5 December, the Company has drawndown Tranche 1 of the Term Loan III amounting to RM35,000,000 including RM5.0 million which shall be utilised for part repayment of the revolving credit as disclosed in Note 20 to the financial statements. Tranche 1 of the Term Loan III is repayable as follows: i. annual instalments of RM7.5 million each to be made from the first year to the fourth year from the drawdown date. ii. repayment of RM5.0 million to be made at the end of the fifth year from the drawdown date. Tranche 1 of the Term loan III is secured by: i. first assignment and charge over all the Designated Accounts of the Company; ii. iii. iv. legal charge over a parcel of acres of land (represented by a total of 906 individual documents of titles) located in Bandar of Mukim of Serendah, Hulu Selangor, with a minimum market value of RM105 million ( Zuriat Watan land ) by Zuriat Watan Sdn. Bhd., a wholly-owned subsidiary of the Company as disclosed in Note 9(iii) to the financial statements; assignment of the construction profits accruing to TRIplc from the construction component of the development of Zone 1 Phase 2 of the UiTM Puncak Alam campus ( ZIP2 ) project of at least RM5 million; assignment of all dividends to be declared by TRIplc Ventures Sdn. Bhd. ( TVSB ) to the Company; and v. letter of undertaking by the Company that it shall cause its wholly-owned subsidiary, TVSB to declare dividends of at least RM10 million per year for financial year ended to 2017 and dividends of at least RM15 million per year. 88 TRIplc BERHAD ( A)

91 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 18. TERM LOANS - SECURED (cont d) (c) Term loan III (cont d) Tranche 2 of the Term loan III is secured by: i. assignment and charge over the principal construction contract of the future project; ii. iii. iv. assignment and charge over the construction profit of the future project accruing to a company to be identified (which shall be a wholly-owned subsidiary of the TRIplc) ( Contractor ) as the main contractor for the design, development, construction and completion of the future project by the Contractor; assignment and charge of all present and future rights and proceeds, under the future project by the SPV. assignment and charge over all the designated account of the SPV; v. debenture by way of fixed and floating charge over the present and future assets of the SPV (to the extent permitted under the future project); and vi. share charge over all present and future shares of the SPV by TRIplc. The Term loan III bears effective interest at a rate of 6.26% per annum. 19. HIRE PURCHASE CREDITORS Group Company Minimum hire purchase and creditors payments: - not later than one (1) year later than one (1) year and not later than five (5) years later than five (5) years Less: Future interest charges (90) (46) (89) (42) Present value of hire purchase creditors Repayable as follows: Current liabilities: - not later than one (1) year Non-current liabilities: - later than one (1) year and not later than five (5) years later than five (5) years Hire-purchase creditors of the Group bear effective interest at rates ranging from 4.71% to 4.96% (: 4.71% to 6.09%) per annum respectively. ANNUAL REPORT 89

92 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 20. REVOLVING CREDIT - SECURED In October, the Company has converted the existing Term loan II of RM11.8 million from term loan into revolving credit facility for working capital purposes. The revolving credit interest is repayable for a period of 1 (one), two (2), three (3), or six (6) months at the end of the preceding relevant interest period before a drawing may be re-borrowed/rolled over. In December, the Company had made a partial repayment amounting to RM5.0 million. The revolving credit is secured by a deposit with a licensed bank pledged of RM6,800,000 by a substantial shareholder of the Company. The revolving credit bears effective interest at a rate of 4.86% per annum. 21. BANK OVERDRAFT - SECURED (a) Bank overdraft of the Company was secured by: (i) a third party first legal charge over leasehold land with a net carrying amount of RM460,000 (: RM460,000) as disclosed in Note 9(i) to the financial statements; and (ii) a charge over deposit of RM3,000,000 to be placed in the non-checking account by way of 20% sinking fund of the sales proceeds of the said property. (b) (c) Bank overdraft under Special Contract Financing Security of the Company was secured by a charge over the Company s fixed deposits of RM1,094,000 (: RM1,064,000) as disclosed in Note 13 (b) to the financial statements. Bank overdraft of the Company bears interest at a rate of 7.85% (: 7.60%) per annum. 22. DEFERRED TAX (a) The deferred tax liabilities and assets are made up of the following: Group At beginning of the financial year 33,725 22,036 Recognised in profit or loss: - tax expense (Note 28) 6,856 11,689 At end of the financial year 40,581 33, TRIplc BERHAD ( A)

93 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 22. DEFERRED TAX (cont d) (b) The components and movements of deferred tax liabilities and assets of the Group during the financial year are as follows: Deferred tax liabilities Amount due from a customer for contract works Property, plant and equipment Others Total At 1 June 34, (2,004) 33,725 Recognised in profit or loss 12,648 (15) (499) 12,134 At 31 May, prior to offsetting 47, (2,503) 45,859 Offsetting - - (5,278) (5,278) At 31 May, after offsetting 47, (7,781) 40,581 At 1 June , ,263 22,036 Recognised in profit or loss 14, (20) 14,936 At 31 May, prior to offsetting 34, (1,243) 36,972 Offsetting - - (3,247) (3,247) At 31 May, after offsetting 34, (2,004) 33,725 Unabsorbed capital allowances Unused tax losses Total Deferred tax assets At 1 June Recognised in profit or loss 3,589 1,689 5,278 At 31 May, prior to offsetting 3,589 1,689 5,278 Offsetting (3,589) (1,689) (5,278) At 31 May, after offsetting At 1 June Recognised in profit or loss 143 3,104 3,247 At 31 May, prior to offsetting 143 3,104 3,247 Offsetting (143) (3,104) (3,247) At 31 May, after offsetting (c) Deferred tax liabilities of RM47,457,000 (: RM34,809,000) have been accrued in relation to construction services for the development of Phase 2 Universiti Teknologi MARA, Puncak Alam Campus based on the following rationale: (i) (ii) (iii) the actual availability charges totaling approximately RM850 million under the Agreement shall be taxable in the basis period when they are receivable in year 4 to year 23 of the concession period; the actual maintenance charges under the Concession Agreement shall be taxable in the basis period when they are receivable during the maintenance period. The fair value of the maintenance charges and the related finance income recognised in the financial statements based on the fair value concept are not subject to tax; and the capital expenditure incurred in constructing the facilities and infrastructure under the Concession Agreement is capital expenditure and qualifies for Industrial Building Allowance under the Income Tax (Industrial Building Allowance)(Building under the Privatisation Project and Private Financing Initiatives) Rules 2010 (P.U.(A) 119/2010). The above tax treatments had been agreed by the Inland Revenue Board via its letter dated 28 November ANNUAL REPORT 91

94 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 22. DEFERRED TAX (cont d) (d) The amounts of temporary differences for which no deferred tax assets have been recognised in the statements of financial position are as follows: 23. PROVISIONS Group Company Unutilised tax losses 103, ,843 46,123 45,714 Unabsorbed capital allowances 5,836 5, Other deductible/ (taxable) temporary differences 5,766 6,410 (67) (61) 115, ,513 46,175 45,738 Deferred tax assets of the Company and certain subsidiaries have not been recognised in respect of these items as it is not probable that taxable profits of the Company and the subsidiaries will be available against which the deductible temporary differences can be utilised. The deductible temporary differences do not expire under the current tax legislation. Group Non-current liabilities Provision for conversion premium 1,564 1,564 Current liabilities Provision for liquidated and ascertained damages 1,246 1,246 Total provisions 2,810 2,810 Provision for conversion premium represents the estimated conversion premium payable in relation to the inventories as disclosed in Note 9(ii) to the financial statements. The conversion premium is payable according to the progress of development. 92 TRIplc BERHAD ( A)

95 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 24. TRADE AND OTHER PAYABLES Group Company Non-current Trade payables Third parties 4,113 4, Current Trade payables Third parties 52,629 70,756 1,216 1,331 Amounts owing to subsidiaries ,989 59,447 Accruals 11,113 20, ,742 90,959 38,205 60,778 Other payables Amounts owing to subsidiaries ,144 56,136 Other payables 9,313 8,319 2, Accruals 22,818 16, Deposits received ,275 24,846 57,822 56,985 96, ,805 96, , , ,902 96, ,763 (a) Trade payables, excluding accruals, are non-interest bearing and the normal trade credit terms granted to the Group and the Company ranged from 30 to 60 days (: 30 to 60 days). Included in the trade payables of the Group and of the Company are retention sums of RM24,645,000 (: RM29,902,000) and RM261,000 (: RM261,000) respectively. Group Company Retention sum - repayable within the next twelve (12) months 20,532 25, not repayable within the next twelve (12) months 4,113 4, ,645 29, (b) Non-trade amounts owing to subsidiaries represent advances and payments made on behalf which are unsecured, interest-free and repayable upon demand. ANNUAL REPORT 93

96 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 24. TRADE AND OTHER PAYABLES (cont d) (c) Included in other payables are the following balances: Group Company Unsecured interest-free advances which are repayable on demand to a shareholder 5,306 5, (d) (e) Information on financial risks of trade and other payables are disclosed in Note 34 to the financial statements. Trade and other payables are denominated in RM. 25. REVENUE Group Company Sale of land held for property development Construction contracts - 107, Rental income Maintenance services 16, Dividend income from subsidiaries ,000 12,000 16, ,394 10,000 12, FINANCE COSTS Group Company Interest expense on: - Medium Term Notes 10,512 9, Junior Notes 2,664 2, term loans 1, , bank overdraft hire purchase revolving credit maintenance services Accretion of discount for - Medium Term Notes (Note 17) Junior Notes (Note 17) Guarantee premium and fees 3,650 3, Others ,071 17,774 1, TRIplc BERHAD ( A)

97 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 27. PROFIT BEFORE TAX NOTE Group Company Profit before tax is arrived at after charging: Accretion of discount for - Medium Term Notes Junior Notes Auditors remuneration: - statutory - current financial year under provision in prior financial year non-statutory Depreciation of property, plant and equipment 7 1, Directors remuneration: - fees other emoluments 1,864 2, Guarantee premium and fees 26 3,650 3, Impairment losses on: - goodwill 10-8, trade receivables Interest expense on: - Medium Term Notes 26 10,512 9, Junior Notes 26 2,664 2, term loans 26 1, , bank overdraft hire-purchase revolving credit maintenance services Rental expenses on - office premises office equipment motor vehicle And crediting: Dividends income from subsidiaries ,000 12,000 Rental income Fair value gain on receivables Interest income on: - fixed deposits 1,026 2, repo placement concession receivables (availability charges) 32,495 34, concession receivables (maintenance services) 1, others ANNUAL REPORT 95

98 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 28. TAX EXPENSE Group Company Current tax expense based on profit for the financial year 1,017 1, Under provision in prior years ,036 1, Deferred tax (Note 22 (a)) - Current financial year 4,818 11, Under/(Over) provision in prior years 2,038 (2) - - 6,856 11, ,892 12, The Malaysian income tax is calculated at the statutory tax rate of 25% (: 25%) of the estimated taxable profits for the fiscal year. The numerical reconciliation between the tax expense and the product of accounting profit multiplied by the applicable tax rates of the Group and of the Company are as follows: Group Company Profit before tax 15,022 36,151 6,574 9,676 Tax at Malaysian statutory tax rate of 25% (: 25%) 3,756 9,038 1,644 2,419 Tax effects in respect of: - non-deductible expenses 1,656 3, income not subjected to tax (28) (86) (2,500) (3,000) - excess of capital allowances over depreciation of which deferred tax liabilities have not been provided for (179) (162) excess of depreciation over capital allowance which deferred tax liabilities has not been provided for unutilised capital allowances and tax losses of which deferred tax assets have not been recognised ,835 12, Under/(Over) provision of: - tax expense in prior financial years deferred tax expense in prior financial years 2,038 (2) - - 7,892 12, TRIplc BERHAD ( A)

99 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 29. EARNINGS PER ORDINARY SHARE (a) Basic Basic earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the financial year as follows: Group Profit for the financial year attributable to equity holders of the parent () 7,130 23,379 Number of weighted average ordinary shares in issue ( 000) 64,695 64,076 Basic earnings per ordinary share (sen) (b) Diluted Diluted earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the financial year adjusted for the effects of dilutive potential ordinary shares. Group Profit for the financial year attributable to equity holders of the parent () 7,130 23,379 Weighted average number of ordinary shares in issue ( 000) 64,695 64,076 Effects of dilution due to employees share options scheme ( 000) Adjusted weighted average number of ordinary shares applicable to diluted earnings per ordinary share ( 000) 65,057 64,407 Diluted earnings per ordinary share (sen) EMPLOYEE BENEFITS Group Company Salaries, wages and bonuses 4,323 3, Contributions to defined contribution plan Share options granted under share options scheme 1,535 1, Other employee benefits ,336 6, Included in the employee benefits of the Group and of the Company are Executive Directors remuneration amounting to RM1,321,000 (: RM1,869,000) and RM266,000 (: RM283,000) respectively. ANNUAL REPORT 97

100 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 31. RELATED PARTY DISCLOSURES (a) Identities of related parties Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties could be individuals or other parties. The Company has a controlling related party relationship with its direct and indirect subsidiaries. Significant balances with related parties at the end of the reporting period are disclosed in Notes 11 and 24 to the financial statements. (b) Compensation to key management personnel Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities of the entity, directly and indirectly, including any Director (whether executive or otherwise) of the Group. The remuneration of Directors during the financial year were as follows: Group Company Directors fees Short term employee benefits 1,145 1, Allowances Contributions to defined contribution plan Share options granted under share options scheme ,888 2, The estimated monetary value of benefits-in-kind received by the Directors other than in cash from the Group and the Company amounted to RM181,000 (: RM128,000). Directors of the Group and the Company have been granted the following number of options under the Employees Share Options Scheme ( ESOS ): Group and Company As at 1 June 405,000 - Share options granted 506, ,500 Share options exercised (181,000) (146,500) 730, ,000 The terms and conditions of the share options are detailed in Note 14 to the financial statements. 98 TRIplc BERHAD ( A)

101 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 32. SEGMENT REPORTING TRIplc Berhad and its subsidiaries are principally engaged in property construction, property development and facilities management services. The Group s property construction and property development activities in Malaysia are mainly undertaken by TRIplc Ventures Sdn. Bhd., TRIplc Industries Sdn. Bhd., TRIplc Resources Sdn. Bhd., Suasa Integrasi (M) Sdn. Bhd. and Insa Alliance Sdn. Bhd., which are wholly-owned subsidiaries of the Company. The Group has arrived at six (6) operating segments that are organised and managed separately according to the nature of products and services, specific expertise and technologies requirements, which requires different business and marketing strategies. The Group s operations comprise the following business segments: Property development : Development of residential and commercial properties Service concession : Service concession Property construction : Construction of properties Property investment : Letting of property and related assets Investment holding : Investment holding Others : Project management and dormant The chief operating decision maker of the Group monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. The accounting policies of operating segments are the same as those described in the summary of significant accounting policies. The Group evaluates performance on the basis of profit or loss from operations before tax. Inter-segment revenue is priced along the same lines as sales to external customers and is eliminated in the consolidated financial statements. These policies have been applied consistently throughout the current and previous financial years. Segment assets comprise mainly property, plant and equipment, inventories, receivables and operating cash, but exclude tax assets. Segment liabilities comprise operating liabilities and exclude tax liabilities. The Group operates predominantly in Malaysia and hence, no geographical segment is presented Operating Segments Property development Property construction Service concession Property investment Investment holding Others Total Revenue Total revenue , ,000-26,655 Inter-segment revenue (10,000) - (10,000) Revenue from external customers , ,655 Interest income , ,613 Finance costs - - (18,308) (3) (1,738) (22) (20,071) Net finance expense (16,948) (3) (1,708) (22) (18,458) Depreciation ,092 Capital expenditure ANNUAL REPORT 99

102 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 32. SEGMENT REPORTING (cont d) 32.1 Operating Segments (cont'd) Property development Property construction Service concession Property investment Investment holding Others Total Segment (loss)/ profit before tax (2,694) (737) 22, (3,425) (1,162) 15,022 Other material non-cash items: - Accretion of discounts for Medium Term Notes and Junior Notes - - 1, ,264 - Fair value gain on receivables Interest income on concession receivables , ,579 Segment assets Segment assets 83,892 10, ,816 10,175 17,367 6, ,024 Segment liabilities Segment liabilities 8,643 48, ,480 3,331 48,323 3, ,704 Property development Property construction Service concession Property investment Investment holding Others Total Revenue Total revenue , , ,946 Inter-segment revenue - - (3,416) - (12,000) (136) (15,552) Revenue from external customers , ,394 Interest income 1 3 2, ,595 Finance costs - (4) (17,052) - (693) (25) (17,774) Net finance expense 1 (1) (14,500) - (654) (25) (15,179) Depreciation Capital expenditure Segment (loss)/profit before tax (7,780) (764) 48, (2,324) (1,409) 36,151 Other material non-cash items: - Impairment loss on goodwill (8,454) (8,454) - Accretion of discounts for Medium Term Notes and Junior Notes - - 1, ,254 - Fair value gain on receivables Interest income on concession receivables , , TRIplc BERHAD ( A)

103 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 32. SEGMENT REPORTING (cont d) 32.1 Operating Segments (cont'd) Property development Property construction Service concession Property investment Investment holding Others Total Segment assets Segment assets 84,699 2, ,718 10,263 8,731 5, ,520 Segment liabilities Segment liabilities 8,646 61, ,648 3,334 16,665 3, ,413 Reconciliation of operating segment profit or loss, assets and liabilities to the corresponding amounts of the Group are as follows:- Profit for the financial year Profit before tax 15,022 36,151 Tax expense (7,892) (12,772) Profit for the financial year 7,130 23,379 Assets Total assets for operating segments 596, ,520 Tax assets Group s assets 596, ,833 Liabilities Total liabilities for operating segments 410, ,413 Tax liabilities 42,186 34,313 Group s liabilities 452, , Information About Major Customers Revenue from transactions with a major customer who individually accounted for 10% or more of the Group s revenue is as follows: Segment Customer A 16, ,296 Service Concession 33. FINANCIAL INSTRUMENTS (a) Capital management The overall financial risk management objectives of the Group are to ensure that the Group creates value and maximises return to its shareholders as well as ensuring that adequate financial resources are available for the development of the Group s businesses whilst managing its financial risks. It is, and has been throughout the financial year under review, the Group s policy that no trading in the financial instruments shall be undertaken. The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust and return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the financial years ended 31 May and 31 May. ANNUAL REPORT 101

104 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 33. FINANCIAL INSTRUMENTS (cont d) (a) Capital management (cont d) The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Group Company Loans and borrowings (Note 16) 307, ,701 44,428 14,485 Trade and other payables 100, ,902 96, ,763 Other liabilities 2,810 2, Total liabilities 410, , , ,248 Less: Cash and bank balances (77,668) (43,609) (2,605) (1,923) Net debt 333, , , ,325 Total capital 143, ,107 92,099 83,224 Net debt 333, , , ,325 Equity 476, , , ,549 Gearing ratio 70% 73% 60% 61% (b) Financial instruments (i) Categories of financial instruments Group Financial assets Trade and other receivables, net of prepayments 416, ,085 Cash and bank balances 77,668 43, , ,694 Financial liabilities Borrowings 307, ,701 Trade and other payables 100, , , ,603 Company Financial assets Trade and other receivables, net of prepayments 125, ,189 Cash and bank balances 2,605 1, , ,112 Financial liabilities Borrowings 44,428 14,485 Trade and other payables 96, , , , TRIplc BERHAD ( A)

105 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 33. FINANCIAL INSTRUMENTS (cont d) (c) Methods and assumptions used to estimate fair value The fair values of financial assets and financial liabilities are determined as follows: (i) Financial instruments that are not carried at fair value and whose carrying amounts are a reasonable approximation of fair value. The carrying amounts of current financial assets and liabilities, such as trade and other receivables, trade and other payables and borrowings, are reasonable approximation of fair value due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period. (ii) Borrowings The fair value of borrowings is estimated using the discounted cash flow method based on current lending/ borrowing rates for similar types of lending/borrowing arrangements. At the end of the reporting period, the carrying amounts of the Medium Term Notes and Junior Notes approximate to their fair values. (iii) Non-current trade and other receivables The fair values of these financial instruments are estimated by discounting the expected future cash flows at market lending rates for similar types of lending, borrowing or leasing arrangements at the end of the reporting period. At the end of the reporting period, these amounts are carried at amortised costs and the carrying amounts approximate to their fair values. (iv) Non-current amount due from a customer for contract works The fair values of these financial instruments are estimated by discounting the expected future cash flows at the interest rate of availability charges as per the Concession Agreement. At the end of the reporting period, these amounts are carried at amortised costs and the carrying amounts approximate their fair values. (d) Fair value hierarchy Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Fair value of non-derivative financial liabilities, which are determined for disclosure purposes, are calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period. In respect of the hire-purchase creditors, the market rate of interest is determined by reference to similar hire-purchase creditor arrangements. Level 3 fair value measurements are those derived from inputs for the asset or liability that are not based on observable market data (unobservable inputs). ANNUAL REPORT 103

106 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 33. FINANCIAL INSTRUMENTS (cont'd) (d) Fair value hierarchy (cont'd) The following tables set out the financial instruments not carried at fair value for which fair value is disclosed, together with their fair values and carrying amounts shown in the statements of financial position. Group Financial liabilities Level 1 Fair value of financial instruments not carried at fair value Level 2 Level 3 Total Total fair value Carrying amount Other financial liabilities - Hire-purchase creditors (Note 19) Financial liabilities Other financial liabilities - Hire-purchase creditors (Note 19) Company Financial liabilities Other financial liabilities - Hire-purchase creditors (Note 19) Financial liabilities Other financial liabilities - Hire-purchase creditors (Note 19) FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Group s overall financial risk management objectives are to ensure that the Group creates value and maximises returns to its shareholders as well as ensuring that adequate financial resources are available for the development of the Group s businesses whilst managing its financial risks. It is, and has been throughout the financial year under review, the Group s policy that no trading in financial instruments shall be undertaken. The Group operates within an established risk management framework and clearly defined guidelines that are regularly reviewed by the Board of Directors and does not trade in derivative financial instruments. Financial risk management is carried out through risk review programmes, internal control systems and adherence to the Group financial risk management policies. The Group is exposed mainly to interest rate risk, credit risk and liquidity and cash flow risk. Information on the management of the related exposures is detailed below. (i) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Group s and the Company s financial instruments will fluctuate because of changes in market interest rates. 104 TRIplc BERHAD ( A)

107 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) (i) Interest rate risk (cont d) The Group s primary interest rate risk relates to its interest bearing assets and liabilities. The investments in financial assets are not held for speculative purpose but have been mostly placed in fixed deposits which yield better returns than conventional savings. The Group manages its interest rate exposures on its debts by maintaining mainly fixed rate borrowings. In respect of interest-bearing financial assets and liabilities, the following tables set out the carrying amounts, the weighted average effective interest rates as at the end of the reporting period and the remaining maturities of the Group s and the Company s financial instruments that are exposed to interest rate risk: Group Note Weighted average effective interest rate (per annum) % Within 1 year 1-2 years 2-3 years 3-4 years 4-5 years More than 5 years Total Fixed rate Deposits with licensed banks , ,223 Medium Term Notes ,484 19,327 19,391 19, , ,872 Junior Notes ,052 28,052 Hire-purchase liabilities Floating rate Bank overdraft , ,992 Revolving credit , ,800 Term loans ,584 7,589 7,593 7,598 5,020-35,384 Fixed rate Deposits with licensed banks , ,994 Medium Term Notes ,708 19,327 19, , ,096 Junior Notes ,564 27,564 Hire-purchase liabilities Floating rate Bank overdraft , ,317 Term loans , ,253 ANNUAL REPORT 105

108 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) (i) Interest rate risk (cont d) Company Note Weighted average effective interest rate (per annum) % Within 1 year 1-2 years 2-3 years 3-4 years 4-5 years More than 5 years Total Fixed rate Deposits with licensed banks , ,094 Hire-purchase liabilities Floating rate Bank overdraft , ,992 Revolving credit , ,800 Term loans ,500 7,500 7,500 7,500 5,000-35,000 Fixed rate Deposits with licensed banks , ,064 Hire-purchase liabilities Floating rate Bank overdraft , ,317 Term loans , ,800 Sensitivity analysis for interest rate risk Group As at 31 May, if interest rates at the date had been 50 basis points lower with all other variables held constant, post-tax profit for the year would have been RM917,000 (: RM888,000) higher and vice versa, arising mainly as a result of lower net interest expense on deposits with licensed banks and borrowings. The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment. Company As at 31 May, if interest rates at the date had been 50 basis points lower with all other variables held constant, post-tax profit for the year would have been RM163,000 (:RM50,000) higher and vice versa, arising mainly as a result of lower net interest expense on borrowings. The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment. (ii) Credit risk Credit risk is the potential risk of financial loss arising from the failure of a customer or counter party to settle its financial and contractual obligations to the Group, as and when they fall due. The credit risk attributable to receivables is managed and monitored on an ongoing basis via the Group s management reporting procedures and internal credit review procedures. The credit risk in respect of property buyers are limited by withholding legal ownership before the full consideration is received. 106 TRIplc BERHAD ( A)

109 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) (ii) Credit risk (cont d) Deposits placed with licensed bank and cash and bank balances are placed with major financial institutions in Malaysia. The Directors believe that the possibility of non-performance by these financial institutions is remote on the basis of their financial strength. Exposure to credit risk At the end of each of reporting period, the maximum exposures of the Group and of the Company to credit risk are represented by the carrying amounts of each class of financial assets recognised in the statements of financial position. Credit risk concentration profile As at the end of the reporting period, the Group and the Company have no significant concentration of credit risk except for an amount owing from a single customer in respect of its property construction activity of RM354,508,000 (: RM351,490,000) and RM13,437,000 (: RM6,083,000) respectively and amounts owing by subsidiaries of RM190,617,000 (: RM182,547,000). Financial assets that are neither past due nor impaired Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 11 to the financial statements. Financial assets that are either past due or impaired Information regarding financial assets that are either past due or impaired is disclosed in Note 11 to the financial statements. (iii) Liquidity and cash flow risk The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all operating, investing and financing needs are met. In liquidity risk management strategy, the Group measures and forecasts its cash commitments and maintains a level of cash and cash equivalents deemed adequate to finance the Group s activities. The Group seeks to achieve a balance between certainty of funding and a flexible, cost-effective borrowing structure. This is to ensure that at the minimum, all projected borrowing needs are covered by committed facilities and also to ensure that the amount of debt maturing in any one year is within the Group s means to repay and refinance. ANNUAL REPORT 107

110 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 34. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont'd) (iii) Liquidity and cash flow risk (cont'd) Analysis of financial instruments by remaining contractual maturities The table below summarises the maturity profile of the Group s and the Company s liabilities at the end of each reporting period based on contractual undiscounted repayment obligations. As at 31 May On demand or within one year One to five years Over five years Total Group Financial liabilities: Trade and other payables 96,017 4, ,130 Borrowings 23, , , ,882 Total undiscounted financial liabilities 119, , , ,012 As at 31 May Group Financial liabilities: Trade and other payables 115,805 4, ,902 Borrowings 24, , , ,272 Total undiscounted financial liabilities 140, , , ,174 As at 31 May On demand or within one year One to five years Over five years Total Company Financial liabilities: Trade and other payables 96, ,027 Borrowings 16,451 27, ,518 Total undiscounted financial liabilities 112,478 27, ,545 As at 31 May Company Financial liabilities: Trade and other payables 117, ,763 Borrowings 14, ,617 Total undiscounted financial liabilities 132, , TRIplc BERHAD ( A)

111 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 35. CONTINGENT LIABILITIIES Group Company Corporate guarantee in respect of banking facilities utilised by subsidiaries - Limit of guarantee , ,200 - Amount utilised , ,113 Bank guarantees and performance bond The Directors are of the view that the chances of the financial institutions calling upon the corporate guarantees are remote. ANNUAL REPORT 109

112 NOTES TO THE FINANCIAL STATEMENTS 31 MAY 36. SUPPLEMENTARY INFORMATION ON REALISED AND UNREALISED PROFITS OR LOSSES The retained earnings as at the end of each reporting period may be analysed as follows: Group Company Group Company Total (accumulated losses)/retained earnings of TRIplc Berhad and its subsidiaries: - Realised (199,537) 23,928 (213,722) 17,354 - Unrealised (40,725) - (33,725) - Total (240,262) 23,928 (247,447) 17,354 Less: Consolidation adjustments 315, ,684 - Total Group/Company retained earnings as per financial statements 75,367 23,928 68,237 17,354 The accompanying notes form an integral part of the financial statements. 110 TRIplc BERHAD ( A)

113 ANALYSIS OF SHAREHOLDINGS AS AT 28 AUGUST SHARE CAPITAL Authorised share capital - RM200,000, Issued and paid-up capital - RM64,966, Class of shares - Ordinary shares of RM1.00 each fully paid Voting rights - 1 vote per ordinary share on a poll 1 vote per shareholder on a show of hands DISTRIBUTION OF SHAREHOLDINGS Size of Holdings No. of Shareholders % of Shareholders No. of Shares % of Issued Capital , ,000 2, ,255, ,001-10,000 1, ,268, , , ,614, ,001-3,248,338 * ,079, ,248,339 and above ** ,739, , ,966, * Less than 5% of issued shares ** 5% and above of issued shares ANNUAL REPORT 111

114 ANALYSIS OF SHAREHOLDINGS AS AT 28 AUGUST DIRECTORS SHAREHOLDINGS Per Register of Directors Shareholdings No. of Shares Held % of Issued Capital % of Issued Capital No. Name Direct Interest Deemed Interest 1. Zainal Abidin Bin Ismail 362, Mohd Khalid Bin Mohammed Yusuf 100, Jumsi Bin Batri SUBSTANTIAL SHAREHOLDERS (Excluding Bare Trustees) Per Register of Substantial Shareholders No. of Shares Held % of Issued Capital % of Issued Capital No. Name Direct Interest Deemed Interest 1. Pembinaan Era Dinamik Sdn Bhd 15,265, Udzer Bin Abdul Karim * ,265, Mohamad Yazi Bin Ramlan * ,265, Yahaya Bin Shukor ** ,265, Tan Sri Rozali Bin Ismail 11,177, ,992,968^ Minat Bakti Sdn Bhd 4,000, Ruzlan Bin Rahmat # - - 4,000, Aidil Bin Abdul Aziz # - - 4,000, Central Plus (M) Sdn Bhd 3,340, * Deemed interest by virtue of 20% equity interest in Pembinaan Era Dinamik Sdn Bhd ** Deemed interest by virtue of 60% equity interest in Pembinaan Era Dinamik Sdn Bhd # Deemed interest by virtue of 50% equity interest in Minat Bakti Sdn Bhd ^ Deemed interest by virtue of 100% equity interest each in Central Plus (M) Sdn Bhd and Corporate Line (M) Sdn Bhd of which 55% is held in own name and 45% is held in his spouse and children s name and deemed interest by virtue of 0.76% equity interest held in son s name 112 TRIplc BERHAD ( A)

115 ANALYSIS OF SHAREHOLDINGS AS AT 28 AUGUST THIRTY LARGEST REGISTERED SHAREHOLDERS No. Name No. of Shares Held % of Issued Capital 1. Pembinaan Era Dinamik Sdn Bhd 15,265, Tan Sri Rozali Bin Ismail 6,189, Tan Sri Rozali Bin Ismail 4,988, Minat Bakti Sdn Bhd 4,000, Central Plus (M) Sdn Bhd 3,296, Corporate Line (M) Sdn Bhd 3,158, Central Energy Sdn Bhd 3,010, Formasi Simbolik Sdn Bhd 3,000, Embun Edar Sdn Bhd 2,785, HSBC Nominees (Asing) Sdn Bhd 1,561, (Exempt An for Credit Suisse (SG BR-TST-ASING)) 11. Ngu Cheng Wen 1,262, Quek Ser Hwa 668, RHB Capital Nominees (Tempatan) Sdn Bhd 557, (Pledged Securities Account for Phoa Boon Ting (CEB)) 14. Azlan Shah Bin Rozali 494, Teng Swee Fong Swee Lan 403, Loh Cheng Fatt 403, Zainal Abidin Bin Ismail 362, RHB Capital Nominees (Tempatan) Sdn Bhd 345, (Pledged Securities Account for Leow Kay Pin (CEB)) 19. Affin Hwang Nominees (Tempatan) Sdn Bhd 275, (Pledged Securities Account for Chua Yeow Huat (M10)) 20. HLB Nominees (Tempatan) Sdn Bhd 215, (Pledged Securities Account for Lim Chin Horng) 21. AMSEC Nominees (Tempatan) Sdn Bhd 210, (Pledged Securities Account for Tan Hooi Leng) 22. Wong Ah Wong Choong Kong 205, CIMSEC Nominees (Tempatan) Sdn Bhd 200, (CIMB Bank for Lim Chin Horng (M28020)) 24. Public Nominees (Tempatan) Sdn Bhd 162, (Pledged Securities Account for Leow Kay Pin (E-SS2)) 25. TA Nominees (Tempatan) Sdn Bhd 144, (Pledged Securities Account for Tan Seng Tung) 26. Che Harun Bin Shaari 122, CIMSEC Nominees (Tempatan) Sdn Bhd 114, (CIMB Bank for Lim Lye-Huat (MM1161)) 28. Soo Bu Kon 111, Tan Meng Hooi 106, Ten Kim Thai 101, ,718, ANNUAL REPORT 113

116 LIST OF GROUP PROPERTIES AS AT 31 MAY No. Location Selangor Darul Ehsan 1. PT Nos HS(D) Mukim of Sungai Buloh, District of Petaling with premises address: No. 6 & 8, Jalan Apollo CH U5/CH, Bandar Pinggiran Subang, Seksyen U5, Shah Alam, Selangor 2. PN 16618, Lot Mukim of Bukit Raja, District of Petaling 3. State alienated development land formerly part of Bukit Cherakah Forest Reserve located in the Mukim of Bukit Raja, District of Petaling 4. 7 titles included in: PT Nos , 2118, 2119 HS(D) , , Mukim of Bukit Raja, District of Petaling 46 titles included in: PT Nos , , , , HS(D) , , , , Mukim of Bukit Raja, District of Petaling 5. State alienated development land formerly part of Bukit Cherakah Forest Reserve located in the Mukim of Bukit Raja, District of Petaling sub-divided plots of vacant land with individual titles: (i) Lot Nos , , , , , , , , , , , , , , , , , , , 28339, , , 28385, , , , , , , 28473, Seksyen 20, Bandar Serendah, District of Ulu Selangor Approximate Area (Acres) Usage Commercial land with 2 units 3-storey shop office 3.73 Development of residential units - Taman Puncak Perdana (Phase 2) # Proposed mixed development of residential and commercial - Taman Puncak Perdana Development of residential units - Perdana Heights (Bungalows and Semi Detached) # Proposed mixed development of residential and commercial - Taman Puncak Perdana Proposed mixed development of residential and commercial 7. (ii) PT Nos. 1489, 1490, 1533, 1673, 1771, 1833, 2360 Mukim of Serendah, District of Ulu Selangor together with public facilities and amenities areas Negeri Sembilan Darul Khusus PN 10340, Lot No. 267 Mukim of Serting Ulu, District of Jempol with premises address: Batu 36, Jalan Kuala Pilah, Batu Kikir, Negeri Sembilan Industrial land with factory building of approximate 7.22 acres Note: # The relevant land titles are pending issuance from the authority. 114 TRIplc BERHAD ( A)

117 LIST OF GROUP PROPERTIES AS AT 31 MAY Tenure Approximate Age of Building Beneficiary/ Registered Owner Date of Last Revaluation/ Date of Acquisition Cost/Carrying Amount As at (RM) Leasehold - 99 years expiring years Central Challenger (M) Sdn Bhd ,092,482 Leasehold - 99 years expiring Insa Alliance Sdn Bhd Leasehold - 99 years - Insa Alliance Sdn Bhd ,493, ,716,017 Leasehold - 99 years expiring Suasa Integrasi (M) Sdn Bhd ,059 expiring Leasehold - 99 years - Suasa Integrasi (M) Sdn Bhd ,186,361 Leasehold - 99 years expiring (except for PT 1833 expiring ) - Zuriat Watan Sdn Bhd ,233,503 Leasehold - 99 years expiring years Prinsip Barisan (M) Sdn Bhd ,421,183 ANNUAL REPORT 115

118 NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the 23rd Annual General Meeting of TRIplc Berhad will be held at Sri Bestari Hall, INTEKMA Resort & Convention Centre, Persiaran Raja Muda, Seksyen 7, Shah Alam, Selangor Darul Ehsan, Malaysia on Wednesday, 28 October at a.m. to transact the following matters: AGENDA ORDINARY BUSINESS: 1. To receive the audited Financial Statements for the financial year ended 31 May together with the Reports of the Directors and Auditors thereon. 2. To re-elect as Director, Encik Yusof Bin Badawi who is retiring under Article 95 of the Company s Articles of Association. (Ordinary Resolution 1) 3. To re-elect as Director, Encik Ibrahim Bin Topaiwah who is retiring under Article 88 of the Company s Articles of Association. (Ordinary Resolution 2) 4. To re-appoint Messrs BDO as Auditors and to authorise the Directors to fix their remuneration. (Ordinary Resolution 3) SPECIAL BUSINESS: To consider and, if thought fit, pass the following ordinary resolutions: 5. Grant of ESOS Options to Encik Yusof Bin Badawi (Ordinary Resolution 4) THAT approval be and is hereby given to the Board of Directors ( Board ) to authorise the ESOS Committee, from time to time throughout the duration of the Employees Share Option Scheme ( ESOS ), to offer and grant to Encik Yusof Bin Badawi, the Deputy Managing Director of TRIplc Berhad ( TRIplc or Company ), ESOS options to subscribe for up to 410,200 new ordinary shares of RM1.00 each in TRIplc ( TRIplc Shares ) under the ESOS, in accordance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (where applicable), or any prevailing guidelines issued by Bursa Malaysia Securities Berhad or any other relevant authorities, as amended from time to time, and subject always to such terms and conditions and/or any adjustments which may be made in accordance with the provisions of the By-laws of the ESOS, provided always that: i. Encik Yusof do not participate in the deliberation or discussion of his own allocation; ii. The allocation to Encik Yusof, who either singly or collectively, through persons connected to him, holds 20% or more of the issued and paid-up share capital of TRIplc, must not exceed 10% of the new TRIplc Shares available under the ESOS; and iii. Not more than 50% of the new TRIplc Shares available under the ESOS shall be allocated in aggregate to the Directors and senior management of TRIplc and its subsidiary companies ( TRIplc Group ). 6. Grant of Additional ESOS Options to Executive Directors THAT approval be and is hereby given to the Board to authorise the ESOS Committee, to offer and grant to the following persons, additional ESOS options to subscribe for new TRIplc Shares under the ESOS from time to time, and subject always to such terms and conditions and/or any adjustments which may be made in accordance with the provisions of the By-laws of the ESOS of the Company in the following manner: Executive Directors of the Company Name Position Existing Allocation 7. Grant of Additional ESOS Options to Non-Executive Directors THAT approval be and is hereby given to the Board to authorise the ESOS Committee, to offer and grant to the following persons, additional ESOS options to subscribe for new TRIplc Shares under the ESOS from time to time, and subject always to such terms and conditions and/or any adjustments which may be made in accordance with the provisions of the By-laws of the ESOS of the Company in the following manner: Non-Executive Directors of the Company Revised Allocation Proposed Additional Allocation Zainal Abidin Bin Ismail Managing Director 362,000 Up to 506, ,800 (Ordinary Resolution 5) Ar Mohd Khalid Bin Mohammed Yusuf Chief Operating Officer 293,000 Up to 410, ,200 (Ordinary Resolution 6) Name Position Existing Allocation Dato Muhamad Bin Mustapha Jumsi Bin Batri Ibrahim Bin Topaiwah Independent Non-Executive Chairman Senior Independent Non-Executive Director Independent Non-Executive Director Revised Allocation Proposed Additional Allocation 360,000 Up to 422,800 62,800 (Ordinary Resolution 7) 224,000 Up to 313,600 89,600 (Ordinary Resolution 8) 224,000 Up to 313,600 89,600 (Ordinary Resolution 9) 116 TRIplc BERHAD ( A)

119 NOTICE OF ANNUAL GENERAL MEETING 8. To transact any other business of which due notice shall have been given in accordance with the Companies Act, BY ORDER OF THE BOARD WONG POH CHUN, SHRYN MAICSA Company Secretary Shah Alam 6 October Explanatory Notes on Special Business: (1) Grant of ESOS Options to Encik Yusof Bin Badawi Ordinary Resolution 4, if approved, will allow Encik Yusof Bin Badawi who was appointed Deputy Managing Director on the Board of TRIplc on 10 June to participate in the ESOS of TRIplc which was established for employees (including Directors) of TRIplc Group pursuant to the approval obtained at the Extraordinary General Meeting held on 19 December 2013, and be eligible for grants of ESOS options to subscribe for up to 410,200 new TRIplc Shares ( Award ). The Award would provide Encik Yusof an equal opportunity, as other eligible employees (including Directors) of TRIplc Group, to participate in the ESOS for his Executive Director role undertaken in TRIplc. The details of the ESOS are set out in the Circular to Shareholders dated 26 November Encik Yusof has abstained from all Board deliberations and votings pertaining to his Award. He and persons connected to him will abstain from voting on this resolution at the 23rd Annual General Meeting. (2) Grant of Additional ESOS Options to Executive Directors Ordinary Resolution 5 and 6, if approved, will allow the Executive Directors i.e. Encik Zainal Abidin Bin Ismail and Ar Mohd Khalid Bin Mohammed Yusuf to participate further in the ESOS of TRIplc, and be eligible for grants of ESOS options to subscribe for up to 506,800 and 410,200 new TRIplc Shares respectively. The above amount includes 362,000 and 293,000 ESOS options which have already been granted to Encik Zainal and Ar Mohd Khalid respectively in 2013 ( Previous Grant ). The additional grant is being sought for approval by shareholders at this 23rd Annual General Meeting for both Encik Zainal and Ar Mohd Khalid. Encik Zainal and Ar Mohd Khalid have both abstained from all Board deliberations and votings pertaining to their additional ESOS options. They and persons connected to them will abstain from voting on their respective resolution at the 23rd Annual General Meeting. (3) Grant of Additional ESOS Options to Non-Executive Directors Ordinary Resolution 7, 8 and 9, if approved, will allow the Non-Executive Directors i.e. Dato Muhamad Bin Mustapha, Encik Jumsi Bin Batri and Encik Ibrahim Bin Topaiwah to participate further in the ESOS of TRIplc, and be eligible for grants of ESOS options to subscribe for up to 422,800, 313,600 and 313,600 new TRIplc Shares respectively. The above amount includes 360,000, 224,000 and 224,000 ESOS options which have already been granted to Dato Muhamad, Encik Jumsi and Encik Ibrahim respectively in 2013 ( Previous Grant ). The additional grant is being sought for approval by shareholders at this 23rd Annual General Meeting for Dato Muhamad, Encik Jumsi and Encik Ibrahim. Dato Muhamad, Encik Jumsi and Encik Ibrahim have abstained from all Board deliberations and votings pertaining to their additional ESOS options. They and persons connected to them will abstain from voting on their respective resolution at the 23rd Annual General Meeting. Notes on Appointment of Proxy and Entitlement of Attendance: (1) A proxy may but need not be a member of the Company. There shall be no restriction as to the qualification of the proxy. (2) A member entitled to attend, speak and vote at the meeting is entitled to appoint not more than two (2) proxies to attend, speak and vote instead of him. (3) Where a member is an authorised nominee, it may appoint not more than two (2) proxies in respect of each securities account it holds. (4) Where a member is an exempt authorised nominee, there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. (5) Where a member or the authorised nominee appoints two (2) proxies, or where an exempt authorised nominee appoints two (2) or more proxies, such appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy. (6) The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if such appointer is a corporation, either under its common seal or the hand of its attorney or an officer duly authorised. (7) The instrument appointing a proxy, together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy thereof, shall be deposited at the Company s Share Registrar, Tricor Investor Services Sdn Bhd, Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, Kuala Lumpur, Malaysia, not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. (8) Only members whose names appear in the Record of Depositors on 20 October shall be eligible to attend the meeting. STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING No individual is seeking election as a Director at the 23rd Annual General Meeting of the Company. ANNUAL REPORT 117

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121 FORM OF PROXY No. of Shares Held CDS Account No. - - I/We (Full name in block letters) NRIC no./passport no./company no. of (Full address) being a member/members of TRIplc Berhad hereby appoint: Full Name (in block) NRIC No./Passport No. Proportion of Shareholdings No. of Shares % Full Address: and/or Full Name (in block) NRIC No./Passport No. Proportion of Shareholdings Full Address: No. of Shares % or failing him/her the Chairman of the meeting as my/our proxy to vote for me/us on my/our behalf at the 23rd Annual General Meeting of the Company to be held at Sri Bestari Hall, INTEKMA Resort & Convention Centre, Persiaran Raja Muda, Seksyen 7, Shah Alam, Selangor Darul Ehsan, Malaysia on Wednesday, 28 October at a.m. and at any adjournment thereof. My/Our proxy is to vote as indicated by an X below. In the absence of specific directions, the proxy shall vote or abstain at his/her discretion. No. Ordinary Resolutions For Against 1. To re-elect Encik Yusof Bin Badawi as Director 2. To re-elect Encik Ibrahim Bin Topaiwah as Director 3. To re-appoint Messrs BDO as Auditors and to authorise the Directors to fix their remuneration 4. To empower Directors to grant ESOS options to Encik Yusof Bin Badawi 5. To empower Directors to grant additional ESOS options to Encik Zainal Abidin Bin Ismail 6. To empower Directors to grant additional ESOS options to Ar Mohd Khalid Bin Mohammed Yusuf 7. To empower Directors to grant additional ESOS options to Dato Muhamad Bin Mustapha 8. To empower Directors to grant additional ESOS options to Encik Jumsi Bin Batri 9. To empower Directors to grant additional ESOS options to Encik Ibrahim Bin Topaiwah Signature/Common Seal of Shareholder(s) Signed/sealed this day of, Contact no. Notes: (1) A proxy may but need not be a member of the Company. There shall be no restriction as to the qualification of the proxy. (2) A member entitled to attend, speak and vote at the meeting is entitled to appoint not more than two (2) proxies to attend, speak and vote instead of him. (3) Where a member is an authorised nominee, it may appoint not more than two (2) proxies in respect of each securities account it holds. (4) Where a member is an exempt authorised nominee, there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. (5) Where a member or the authorised nominee appoints two (2) proxies, or where an exempt authorised nominee appoints two (2) or more proxies, such appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy. (6) The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if such appointer is a corporation, either under its common seal or the hand of its attorney or an officer duly authorised. (7) The instrument appointing a proxy, together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy thereof, shall be deposited at the Company s Share Registrar, Tricor Investor Services Sdn Bhd, Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, Kuala Lumpur, Malaysia, not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. (8) Only members whose names appear in the Record of Depositors on 20 October shall be eligible to attend the meeting.

122 Fold here AFFIX POSTAGE STAMP The Company Secretary TRIplc BERHAD ( A) C/o Tricor Investor Services Sdn Bhd ( V) Unit 32-01, Level 32, Tower A Vertical Business Suite Avenue 3, Bangsar South No. 8, Jalan Kerinchi Kuala Lumpur Malaysia Fold here

123 No. 8, Ground Floor, Jalan Apollo CH U5/CH, Bandar Pinggiran Subang, Seksyen U5, Shah Alam, Selangor Darul Ehsan Tel Fax Web