() Directors' Report and Audited Financial Statements 31 December 2016
() STATUTORY FINANCIAL STATEMENTS - 31 DECEMBER 2016 INDEX PAGES DIRECTORS' REPORT 1-8 STATEMENT BY DIRECTORS 9 STATUTORY DECLARATION 9 REPORT OF THE AUDITORS 10-15 STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 16 & 17 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 18 & 19 COMPANY STATEMENT OF FINANCIAL POSITION 20 & 21 STATEMENT OF CHANGES IN EQUITY - GROUP 22 & 23 STATEMENT OF CHANGES IN EQUITY - COMPANY 24 & 25 CONSOLIDATED STATEMENT OF CASH FLOWS 26 & 27 COMPANY STATEMENT OF CASH FLOWS 28 & 29 NOTES TO THE FINANCIAL STATEMENTS 30-135 SUPPLEMENTARY FINANCIAL INFORMATION 136 ON THE BREAKDOWN OF REALISED AND UNREALISED PROFITS OR LOSSES
Corporate Information Board of Directors : Gen. (R) Tan Sri Dato' Seri Mohd Shahrom Bin Dato' Hj Nordin : Tan Sri Dato' Sri Sufri Bin Hj Mohd Zin : Dato' Abdul Aziz Bin Mohamad : Dato' AR. Nur Haizi Binti Abdul Hai : Abdul Rahman Bin Ali : Noor Zilan Bin Mohamed Noor : Siti Sarlina Binti Abdul Rahman (alternate director to Dato' Abdul Aziz Bin Mohamad) Secretary : Abdul Aziz Bin Mohamed Auditors : AljeffriDean Chartered Accountants Bankers : Hong Leong Bank Berhad : Affin Bank Berhad : AmBank (M) Berhad : Malayan Banking Berhad : United Overseas Bank Berhad : RHB Bank Berhad : CIMB Bank Berhad : Standard Chartered Bank Malaysia Berhad : Alliance Bank Malaysia Berhad : HSBC Bank Malaysia Berhad Registered Office/ : TRC Business Centre, Principal Place of Business Jalan Andaman Utama, 68000 Ampang, Selangor Darul Ehsan.
DIRECTORS' REPORT The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2016. PRINCIPAL ACTIVITIES The principal activities of the Company are investment holding, general contractors for supplying labour and provision of corporate, administrative and financial support services to its subsidiaries. The principal activities of the subsidiaries are as disclosed in Note 17 to the financial statements. There have been no significant changes in the nature of the principal activities during the financial year. RESULTS Group Company RM RM Profit net of tax 27,881,050 469,570 Profit attributable to : Equity holders of the Company 27,864,422 469,570 Non-controlling interests 16,628-27,881,050 469,570 RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements. In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature. DIVIDENDS The amount of dividend paid by the Company during the year in respect of the financial year ended 31 December 2015, was as follows : First and final single tier dividend of 0.65 sen per share, on 480,497,023 ordinary shares, paid on 16 June 2016. RM 3,123,231 1
DIVIDENDS (CONT'D) At the forthcoming Annual General Meeting, a provisional single tier dividend in respect of the financial year ended 31 December 2016, of 1.90 sen per share on 480,497,103 ordinary shares amounting to a dividend payable of RM9,129,445 will be proposed for shareholders' approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2017. DIRECTORS The names of the directors of the Company in office since the date of the last report and at the DIRECTORS date of this report are : Gen. (R) Tan Sri Dato' Seri Mohd Shahrom Bin Dato' Hj Nordin Tan Sri Dato' Sri Sufri Bin Hj Mohd Zin Dato' Abdul Aziz Bin Mohamad Dato' AR. Nur Haizi Binti Abdul Hai Abdul Rahman Bin Ali Noor Zilan Bin Mohamed Noor Siti Sarlina Binti Abdul Rahman (Appointed on 28.11.2016) (alternate director to Dato' Abdul Aziz Bin Mohamad) DIRECTORS' BENEFITS During and at the end of the financial year, no arrangements subsisted to which the Company is a DIRECTORS' party, with the object BENEFITS or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 10 of the financial statements or the fixed salary of a full time employee) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest, as required by Section 169 (8) of the Companies Act, 1965. 2
DIRECTORS' INTERESTS According to the register of directors' shareholdings, the interests of directors in office at the end of the financial year in shares in the Company and its related corporations during the financial year were as follows : ---------------------- Number of Ordinary Shares of RM0.50 ----------------- At At The Company 1.1.2016 Acquired Sold 31.12.2016 Direct Interest : Tan Sri Dato' Sri Sufri Bin Hj Mohd Zin 47,531,517 - - 47,531,517 Dato' Abdul Aziz Bin Mohamad 13,658,217 - - 13,658,217 Deemed Interest : Tan Sri Dato' Sri Sufri Bin Hj Mohd Zin # 118,075,200 - - 118,075,200 Dato' Abdul Aziz Bin Mohamad # 118,075,200 - - 118,075,200 # Deemed interested by virtue of their substantial shareholdings in TRC Capital Sdn. Bhd. and Kolektif Aman Sdn. Bhd. 3
DIRECTORS' INTERESTS (CONT'D) ----------------------- Number of Warrants A (2007/2017) ------------------------------------ At At The Company 1.1.2016 Acquired Exercised Sold 31.12.2016 Tan Sri Dato' Sri Sufri Bin Hj Mohd Zin 12,114,237 - - - 12,114,237 Dato' Abdul Aziz Bin Mohamad 2,349,014 - - (1,200,014) 1,149,000 ------------------------ Number of Warrants B (2011/2016) ----------------------------------- At At The Company 1.1.2016 Acquired Exercised Expired 31.12.2016 Tan Sri Dato' Sri Sufri Bin Hj Mohd Zin 9,074,303 - - (9,074,303) - Dato' Abdul Aziz Bin Mohamad 2,563,643 - - (2,563,643) - 4
DIRECTORS' INTERESTS (CONT'D) Tan Sri Dato' Sri Sufri Bin Hj Mohd Zin and Dato' Abdul Aziz Bin Mohamad by virtue of their interest in shares in the Company are also deemed interested in shares of all the Company's subsidiaries to the extent the Company has an interest. None of the other directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year. WARRANTS A 2007/2017 A total of 30,800,000 free warrants were issued by the Company in conjunction with the Rights Issue in 2007. Each warrant is convertible into one new ordinary share of RM1.00 each at the exercise price of RM1.00 per ordinary share. Consequential to the Bonus Issue in 2008, the Company had issued an additional 6,101,520 new Warrants 2007/2017 pursuant to the adjustments in accordance with the provision under the Deed Poll executed by the Company on 15 November 2006 constituting the Warrants ("Deed Poll"). The warrants are valid for a period of ten years and expired on 21 January 2017. The exercise price of the existing Warrants A 2007/2017 was adjusted to RM0.50 each pursuant to The theconversion Holder Share Split of ratio each and Bonus for ESOS every Issue Option RM1.00 of shares isnominal entitled 2011. value tono subscribe Warrants of ICULS for Awas were 2.40 adjusted exercised New during the financial from Subdividend 1.20 year to 2.88. Shares and a total for the of 86,738,717 exercise ofwarrants each ESOS remained Optionoutstanding at the Exercise as at Price 31 December of 2016. RM0.52 each. WARRANTS B 2011/2016 Consequential to the Share Split and Bonus Issue Exercise in 2011, the shareholders gave their approval for the Company to issue a bonus issue of warrants (Warrants B). Pursuant to the Deed Poll executed by the Company on 12 July 2011, 93,495,995 warrants were issued, and the said warrants are valid for a period of five years and expired in July 2016. During the year, the Company issued 80 ordinary shares of RM0.50 each for cash pursuant to the Company's Warrant Scheme at exercise price of RM0.61 per warrant. The Exercise Rights of the Warrants B has expired on 14 July 2016. 5
TREASURY SHARES The Board obtained shareholders' approval to undertake the purchase of up to 10% of the issued and paid up share capital of the Company. The shareholders of the Company, by a special resolution passed in a general meeting held on 24 May 2016, renewed their approval for the Company's plan to repurchase its own ordinary shares. The directors of the Company are committed to enhancing the value of the Company for its shareholders and believe that the repurchase plan can be applied in the best interests of the Company and its shareholders. OTHER STATUTORY INFORMATION (a) Before the statements 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 allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise. (b) At the date of this report, the directors are not aware of any circumstances which would render: (i) (ii) the amount written off for bad debts or the amount of the allowance for doubtful debts inadequate to any substantial extent; and the values attributed to the current assets in the financial statements of the Group and of the Company misleading. (c) (d) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading. 6
OTHER STATUTORY INFORMATION (CONT'D) (e) As at the date of this report, there does not exist: (i) (ii) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or any contingent liability of the Group or of the Company which has arisen since the end of the financial year, except as disclosed in Note 35 to the financial statements. (f) In the opinion of the directors: (i) (ii) no contingent liability or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made. SIGNIFICANT AND SUBSEQUENT EVENTS The significant and subsequent events are disclosed in Note 41 and Note 42 to the financial statements respectively. 7
AUDITORS The retiring auditors, Messrs AljeffriDean, have expressed their willingness to be re-appointed in accordance with Section 172(2) of the Companies Act, 1965. Signed on behalf of the Board in accordance with a resolution of the directors,.. TAN SRI DATO' SRI SUFRI BIN HJ MOHD ZIN. DATO' ABDUL AZIZ BIN MOHAMAD Kuala Lumpur, Malaysia. Date : 4 April 2017 8
STATEMENT BY DIRECTORS PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965 We, TAN SRI DATO' SRI SUFRI BIN HJ MOHD ZIN and DATO' ABDUL AZIZ BIN MOHAMAD, being two of the directors of, state that in the opinion of the directors, the accompanying financial statements set out on pages 16 to 135 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2016 and of the results and the cash flows of the Group and of the Company for the year then ended. The supplementary information set out on page 136 has been presented in accordance with the directive issued by Bursa Malaysia Securities Berhad and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad. Signed on behalf of the Board in accordance with a resolution of the directors,. TAN SRI DATO' SRI SUFRI BIN HJ MOHD ZIN.. DATO' ABDUL AZIZ BIN MOHAMAD Kuala Lumpur, Malaysia. Date :4 April 2017 STATUTORY DECLARATION PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965 I, YEOH SOOK KENG, being the officer primarily responsible for the financial management of TRC SYNERGY BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out on pages 16 to 135 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, l960. Subscribed and solemnly declared by the abovenamed YEOH SOOK KENG at Kuala Lumpur in the Federal Territory on 4 April 2017 Before me,..... YEOH SOOK KENG.. Commissioner for Oath 9
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF Report on the Financial Statements Opinion We have audited the financial statements of TRC Synergy Berhad, which comprise the statement of financial position as at 31 December 2016 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statement 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 notes, as set out on pages 16 to 135. In our opinion, the financial statements have been properly drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 December 2016 and of its financial performance and cash flows for the year then ended. Basis for Opinion We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence and Other Ethical Responsibilities We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, conduct and Practice) of the Malaysian Institute of Accountants ("By Laws") and the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants ("IESBA Code"), and we fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current financial year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 10
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF (CONT'D) Key Audit Matters (Cont'd) Recognition of contract revenue and expenses We refer to Note 2.3(m), Note 3, Note 4 and Note 23 to the financial statements on the recognition of contract revenue and contract cost associated with the construction contracts. The Group uses the stage of completion method which requires the management to exercise significant judgement in estimating total contract costs. The measurement of contract revenue would usually affected by a variety of uncertainties that depend on the outcome of future events. Revision on the estimated approved variation orders may increase or decrease the contract revenue from one accounting period to another. In estimating the contract cost, there will be risk of variation from estimate due to future cost escalation and contingencies during the execution of the contract. We have identified the revenue recognition for construction contracts as a key audit matter due to: - - the amounts involved are significant; and management applies significant judgement and estimation in determining the stage of completion and in estimating total contract costs hence there is a risk that the actual contract costs are different to those estimate resulting in material variance in the profit or loss recognised to date and in the current financial year. How the matter was addressed in our audit In addressing this area, our audit procedures included the following: a) b) c) d) Tested the Group's control, relating to contract cost and revenue by checking for evidence of reviews and approval over estimated total budgeted costs and authorising and recording of actual cost incurred for individual project undertaken by the Group; Compared certified progress claim certificate from customer against the stage of completion of on going projects to assess the reasonableness of the percentage of completion recognised in the profit and loss; Reviewed the assumptions in deriving at the estimated total contract costs. This procedure includes comparing the historical accuracy of the Group's budgeted profit margin achieved on previous similar projects to estimates; and Inspected a sample of documentation on the costs incurred to date/or progress claim, to ensure that the costs were properly allocated to the appropriate projects. We have determined that there are no key audit matters in the audit of the separate financial statements of the Company to communicate in our auditors' report. 11
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF (CONT'D) Information Other than the Financial Statements and Auditors' Report Thereon The Directors of the Company are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the Group and of the Company and our auditors' report thereon. Our opinion on the financial statements of the Company does not cover the annual report and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the annual report and, in doing so, consider whether the annual report is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of the annual report, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Statements The Directors of the Company, are responsible for the preparation of financial statements of the Group and of the Company so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the Group's and the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so. 12
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF (CONT'D) Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also : * * * * Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit 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 Group's and of the Company's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's and the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern. 13
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF (CONT'D) Auditors' Responsibilities for the Audit of the Financial Statements (Cont'd) * Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation. * Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial statements of the Group and of the Company for the current year and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matters or when, in extremely rare circumstances, we determine that a matter should not be communicated in our auditors' report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report On Other Legal And Regulatory Requirements In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following: (a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. 14
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF (CONT'D) Report On Other Legal And Regulatory Requirements (Cont'd) (b) (c) (d) We have considered the accounts and the auditors' reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 17 to the financial statements, being accounts that have been included in the consolidated accounts. We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company's financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. The auditors' reports on the financial statements of the subsidiaries were not subject to any qualification or any adverse comment required to be made under Section 174(3) of the Act. Other Reporting Responsibilities The supplementary information set out in page 136 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(s) This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. AljeffriDean A.F. No. 1366 Chartered Accountants T. Nagarajan KMN No: 824/04/18 (J) Chartered Accountant Kuala Lumpur, Malaysia Date: 4 April 2017 15
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2016 Group Company Note 2016 2015 2016 2015 RM RM RM RM Revenue 3 753,840,515 767,986,181 7,980,429 18,473,006 Cost of Sales 4 (697,850,266) (717,896,436) (4,259,252) (4,463,516) Gross Profit 55,990,249 50,089,745 3,721,177 14,009,490 Other income 5 7,910,555 19,091,110 3,734,958 9,741,358 Administrative expenses (34,364,800) (31,489,175) (9,902,482) (8,687,261) Operating Profit/(Loss) 29,536,004 37,691,680 (2,446,347) 15,063,587 Finance income 6 6,341,323 5,130,645 2,915,828 2,703,325 Finance costs 7 (5,338,335) (5,757,196) (4,548) (2,331) Share of profit of associates 2,204,057 1,176,398 - - Profit before tax 8 32,743,049 38,241,527 464,933 17,764,581 Income tax expense 11 (4,861,999) (7,412,819) 4,637 (85,060) Profit net of tax 27,881,050 30,828,708 469,570 17,679,521 Other comprehensive income, net of tax Items that are or may be reclassified subsequently to profit or loss : Foreign currency translation differences for foreign operations (369,698) 248,742 - - (369,698) 248,742 - - Other comprehensive (loss)/ income for the year, net of tax (369,698) 248,742 - - Total comprehensive income for the year 27,511,352 31,077,450 469,570 17,679,521 16
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2016 (CONT'D) Group Company Note 2016 2015 2016 2015 RM RM RM RM Profit attributable to : Equity holders of the Company 27,864,422 30,352,004 469,570 17,679,521 Non - controlling interests 16,628 476,704 - - Profit for the year 27,881,050 30,828,708 469,570 17,679,521 Total comprehensive income attributable to : Equity holders of the Company 27,492,404 30,619,785 469,570 17,679,521 Non - controlling interests 18,948 457,665 - - Total comprehensive income for the year 27,511,352 31,077,450 469,570 17,679,521 Earnings per share attributable to equity holders of the Company (sen) - Basic 12 5.80 6.32 - Diluted 12 5.80 6.32 The accompanying notes form an integral part of the financial statements. 17
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2016 ASSETS NON-CURRENT ASSETS 2016 2015 Note RM RM Investment properties 13 24,341,891 24,341,891 Property, plant and equipment 14 47,081,830 58,077,042 Properties held for development 15 51,388,319 50,277,629 Intangible assets 16 9,177 9,177 Investment in Subsidiaries 17 - - Investment in Associates 18 10,771,113 8,444,068 Other investments 19 29,193,952 28,004,203 Other receivables 20 - - Deferred tax assets 21 2,542,033 222,312 165,328,315 169,376,322 CURRENT ASSETS Property development costs 15 104,928,485 62,068,038 Inventories 22 474,584 471,603 Trade and other receivables 20 267,084,934 310,050,641 Other current assets 24 55,734,062 54,322,513 Cash and bank balances 25 233,820,288 189,954,268 662,042,353 616,867,063 TOTAL ASSETS 827,370,668 786,243,385 18
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2016 (CONT'D) EQUITY AND LIABILITIES EQUITY 2016 2015 Note RM RM Share capital 26 240,248,552 240,248,512 Share premium 26 208,118 208,109 Other reserves 27 2,325,455 2,697,473 Retained earnings 28 137,727,386 112,986,195 Equity attributable to equity holders of the Company 380,509,511 356,140,289 Non-controlling interest 4,983,632 66,942 Total equity 385,493,143 356,207,231 NON-CURRENT LIABILITIES Borrowings 29 3,158,607 12,925,480 Deferred tax liabilities 21 2,349,564 3,028,618 5,508,171 15,954,098 CURRENT LIABILITIES Borrowings 29 168,340,096 171,855,331 Trade and other payables 30 205,901,736 172,723,161 Other current liabilities 31 60,709,733 67,773,758 Taxation 1,417,789 1,729,806 436,369,354 414,082,056 Total liabilities 441,877,525 430,036,154 TOTAL EQUITY AND LIABILITIES 827,370,668 786,243,385 The accompanying notes form an integral part of the financial statements. 19
COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2016 ASSETS NON-CURRENT ASSETS 2016 2015 Note RM RM Investment properties 13 - - Property, plant and equipment 14 1,250,981 1,650,738 Properties held for development 15 - - Intangible assets 16 - - Investment in Subsidiaries 17 106,211,096 104,924,619 Investment in Associates 18 - - Other investments 19 - - Other receivables 20 151,814,204 154,109,964 Deferred tax assets 21 181,661 137,381 259,457,942 260,822,702 CURRENT ASSETS Property development costs 15 - - Inventories 22 - - Trade and other receivables 20 593,628 913,497 Other current assets 24 - - Cash and bank balances 25 6,796,525 6,888,737 7,390,153 7,802,234 TOTAL ASSETS 266,848,095 268,624,936 20
COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2016 (CONT'D) EQUITY AND LIABILITIES 2016 2015 Note RM RM Equity attributable to equity holders of the Company Share capital 26 240,248,552 240,248,512 Share premium 26 208,118 208,109 Other reserves 27 - - Retained earnings 28 24,263,586 26,917,247 Total equity 264,720,256 267,373,868 NON-CURRENT LIABILITIES Borrowings 29 - - Deferred tax liabilities 21 - - - - CURRENT LIABILITIES Borrowings 29 - - Trade and other payables 30 2,127,839 1,251,068 Other current liabilities 31 - - Taxation - - 2,127,839 1,251,068 Total liabilities 2,127,839 1,251,068 TOTAL EQUITY AND LIABILITIES 266,848,095 268,624,936 The accompanying notes form an integral part of the financial statements. 21
STATEMENT OF CHANGES IN EQUITY - GROUP FOR THE YEAR ENDED 31 DECEMBER 2016 Attributable to Equity Holders of the Company Non-Distributable Distributable Non Share Share Other Retained Controlling Total Capital Premium Reserves Earnings Total Interests Equity RM RM RM RM RM RM RM Note (Note 26) (Note 26) (Note 27) (Note 28) At 1 January 2016 240,248,512 208,109 2,697,473 112,986,195 356,140,289 66,942 356,207,231 Warrants A - - - - - - - Warrants B 40 9 - - 49-49 Dividends 34 - - - (3,123,231) (3,123,231) - (3,123,231) Issuance of shares to non controlling interest - - - - - 4,897,742 4,897,742 Foreign currency translation difference for foreign operations - - (372,018) - (372,018) 2,320 (369,698) Other comprehensive income for the year Profit for the year - - - 27,864,422 27,864,422 16,628 27,881,050 Total comprehensive income for the year - - (372,018) 27,864,422 27,492,404 18,948 27,511,352 At 31 December 2016 240,248,552 208,118 2,325,455 137,727,386 380,509,511 4,983,632 385,493,143 22
STATEMENT OF CHANGES IN EQUITY - GROUP FOR THE YEAR ENDED 31 DECEMBER 2016 (CONT'D) Attributable to Equity Holders of the Company Non-Distributable Distributable Non Share Share Other Retained Controlling Total Capital Premium Reserves Earnings Total Interests Equity RM RM RM RM RM RM RM Note (Note 26) (Note 26) (Note 27) (Note 28) At 1 January 2015 240,248,512 208,109 2,429,692 83,499,086 326,385,399 (390,723) 325,994,676 Warrants A - - - - - - - Warrants B - - - - - - - Dividends 34 - - - (864,895) (864,895) - (864,895) Foreign currency translation difference for foreign operations - - 267,781-267,781 (19,039) 248,742 Other comprehensive income for the year Profit for the year - - - 30,352,004 30,352,004 476,704 30,828,708 Total comprehensive income for the year - - 267,781 30,352,004 30,619,785 457,665 31,077,450 At 31 December 2015 240,248,512 208,109 2,697,473 112,986,195 356,140,289 66,942 356,207,231 The accompanying notes form an integral part of the financial statements. 23
STATEMENT OF CHANGES IN EQUITY - COMPANY FOR THE YEAR ENDED 31 DECEMBER 2016 Non - distributable Distributable Share Share Retained Total Capital Premium Earnings Equity RM RM RM RM Note (Note 26) (Note 26) (Note 28) At 1 January 2016 240,248,512 208,109 26,917,247 267,373,868 Total comprehensive income - - 469,570 469,570 Dividends 34 - - (3,123,231) (3,123,231) Issue of ordinary shares pursuant to : Warrants A - - - - Warrants B 40 9-49 At 31 December 2016 240,248,552 208,118 24,263,586 264,720,256 24
STATEMENT OF CHANGES IN EQUITY - COMPANY FOR THE YEAR ENDED 31 DECEMBER 2016 (CONT'D) Non - distributable Distributable Share Share Retained Total Capital Premium Earnings Equity RM RM RM RM Note (Note 26) (Note 26) (Note 28) At 1 January 2015 240,248,512 208,109 10,102,621 250,559,242 Total comprehensive income - - 17,679,521 17,679,521 Dividends 34 - - (864,895) (864,895) Issue of ordinary shares pursuant to : Warrants A - - - - Warrants B - - - - At 31 December 2015 240,248,512 208,109 26,917,247 267,373,868 The accompanying notes form an integral part of the financial statements. 25
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2016 Note 2016 2015 RM RM CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation 32,743,049 38,241,527 Adjustments for :- Allowance for doubtful debts 70,976 97,082 Gain on disposal of a subsidiary company (438,305) - Gain on disposal of investment properties - (62,440) Unrealised gain on foreign exchange (5,005,719) (17,892,543) Unrealised foreign exchange difference arising due to retranslation of financial statements in foreign currency (2,337,135) (6,260,311) Depreciation of property, plant and equipment 13,091,816 13,196,352 Amortisation of leasehold land 5,891 5,891 Gain on disposal of property, plant and equipment (1,129,503) (400,315) Share of results of associates (2,204,057) (1,176,398) Interest expense 9,527,268 9,936,621 Interest income (6,341,323) (5,130,645) Property, plant and equipment written off 176,102 1,304 Distribution of (profit)/loss from partnership (383,187) 217,503 Distribution of capital loss from partnership - 155,618 OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 37,775,873 30,929,246 Inventories (2,981) 227,248 Receivables 45,268,089 49,309,779 Payables 31,138,704 (22,856,530) Property development project costs (39,603,132) (43,026,381) Cash generated from operations 74,576,553 14,583,362 Taxation paid (8,043,908) (7,137,156) Tax refund 1,202,094 2,217,691 Interest paid (9,527,268) (9,936,621) Interest received 6,341,323 5,130,645 Net cash generated from operating activities 64,548,794 4,857,921 26
CONSOLIDATED STATEMENT OF CASH FLOWS (CONT'D) FOR THE YEAR ENDED 31 DECEMBER 2016 CASH FLOWS FROM INVESTING ACTIVITIES Note 2016 2015 RM RM Associate company (955,216) 5,163,412 Proceeds from disposal of investment properties - 174,440 Purchase of property, plant and equipment 33 (2,732,150) (2,973,692) Proceeds from disposal of property, plant and equipment 1,974,179 4,874,349 Net cash inflow from acquisition of a subsidiary company 17 1,514,461 - Net cash outflow from disposal of a subsidiary company 17 (547,358) - Net cash (used in)/generated from investing activities (746,084) 7,238,509 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds on share premium from warrants exercised 9 - Proceeds from warrants exercised 40 - Fixed deposits (20,978,200) (27,222,987) (Repayment)/Proceeds of short term borrowings (3,180,870) 7,007,924 Repayment of long term borrowings (9,766,873) (7,824,407) Dividend paid (3,123,231) (864,895) Net cash used in financing activities (37,049,125) (28,904,365) Net increase/(decrease) in cash and cash equivalents 26,753,585 (16,807,935) Effects of foreign exchange rate changes 86,345 118,497 Cash and cash equivalents at the beginning of the year 53,072,232 69,761,670 Cash and cash equivalents at the end of the year 25 79,912,162 53,072,232 The accompanying notes form an integral part of the financial statements. 27
COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2016 Note 2016 2015 RM RM CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation 464,933 17,764,581 Adjustments for :- Unrealised gain on foreign exchange (2,941,590) (8,946,287) Dividend income - (10,000,000) Depreciation of property, plant and equipment 399,757 405,786 Gain on disposal of investment in subsidiary - (1,703) Interest income (2,915,828) (2,703,325) OPERATING LOSS BEFORE WORKING CAPITAL CHANGES (4,992,728) (3,480,948) Receivables (3,110) (275) Payables 876,771 838,282 Cash used in operations (4,119,067) (2,642,941) Taxation paid (113,328) (204,000) Tax refund 396,664 38,594 Interest received 2,915,828 2,703,325 Net cash used in operating activities (919,903) (105,022) CASH FLOWS FROM INVESTING ACTIVITIES Dividend received - 10,000,000 Additional investment in subsidiaries (1,286,477) (2,512,319) Proceeds from disposal of investment in subsidiary - 1,707 Other receivables 5,237,285 (6,397,593) Net cash generated from investing activities 3,950,808 1,091,795 28
COMPANY STATEMENT OF CASH FLOWS (CONT'D) FOR THE YEAR ENDED 31 DECEMBER 2016 CASH FLOWS FROM FINANCING ACTIVITIES Note 2016 2015 RM RM Proceeds on share premium from warrants exercised 9 - Proceeds from Warrants exercised 40 - Fixed deposits (171,083) (164,909) Dividend paid (3,123,231) (864,895) Net cash used in financing activities (3,294,265) (1,029,804) Net decrease in cash and cash equivalents (263,360) (43,031) Effects of foreign exchange rate changes 65 504 Cash and cash equivalents at the beginning of the year 1,384,517 1,427,044 Cash and cash equivalents at the end of the year 25 1,121,222 1,384,517 The accompanying notes form an integral part of the financial statements. 29
NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2016 1. CORPORATE INFORMATION The principal activities of the Company are investment holding, general contractors for supplying labour and provision of corporate, administrative and financial support services to its subsidiaries. The principal activities of the subsidiaries are disclosed in Note 17 to the financial statements. The number of employees of the Company as at year end is 62 (2015: 70). The number of employees of the Group as at year end is 743 (2015 973). The Company is a public limited liability company, incorporated and domiciled in Malaysia. The Company is listed on the Main Market of Bursa Malaysia Securities Berhad and produces financial statements available for the public use. The registered office and principal place of business of the Company is located at TRC Business Centre, Jalan Andaman Utama, 68000 Ampang, Selangor Darul Ehsan. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 4 April 2017. 2. SIGNIFICANT ACCOUNTING POLICIES 2.1. Basis of Preparation The financial statements of the Company have been prepared in accordance with Malaysian Financial Reporting Standards ("MFRSs"), International Financial Reporting Standards ("IFRSs") and the Companies Act, 1965 in Malaysia. The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below. The financial statements are presented in Ringgit Malaysia (RM) which is the Company's functional currency. 30
2. SIGNIFICANT ACCOUNTING POLICIES (CONT'D) 2.2 Statement of Compliance (a) Adoption of Amendments to MFRSs and IC Interpretation The accounting policies adopted by the Group and the Company are consistent with those adopted in the previous year, except as follows :- * MFRS 14, Regulatory Deferral Accounts * * * * * * * * * Amendments to MFRS 101, Presentation of Financial Statements - Disclosure Initiative Amendments to MFRS 11, Joint Arrangements - Accounting for Acquisitions of Interests in Joint Operations Amendments to MFRS 116, Property, Plant and Equipment and MFRS 138, Intangible Assets - Clarification of Acceptable Methods of Depreciation and Amortisation Amendments to MFRS 116, Property, Plant and Equipment and MFRS 141, Agriculture - Agriculture: Bearer Plants Amendments to MFRS 127, Separate Financial Statements - Equity Method in Separate Financial Statements Amendments to MFRS 128, Investment in Associates and Joint Ventures - Investment Entities : Applying the Consolidation Exception Amendments to MFRS 10, Consolidated Financial Statements - Investment Entities: Applying the Consolidation Exception Amendments to MFRS 12, Disclosure of Interests in Other Entities - Investment Entities : Applying the Consolidation Exception Annual improvements to MFRS 2012-2014 Cycle The adoption of the above pronouncements do not have any material impact on the financial statements of the Group and the Company. 31
2. SIGNIFICANT ACCOUNTING POLICIES (CONT'D) 2.2. Statement of Compliance (Cont'd) (b) Standards issued but not yet effective The following are accounting standards, amendments and interpretations of the MFRS framework that have been issued by the Malaysian Accounting Standards Board ("MASB") but have not been adopted by the Group and the Company. MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2017 * * * Amendments to MFRS 12, Disclosure of Interest in Other Entities - (Annual improvements to MFRS Standards 2014-2016 Cycle) Amendments to MFRS 107, Statement of Cash Flows - Disclosure Initiative Amendments to MFRS 112, Income Taxes - Recognition of Deferred Tax Assets for Unrealised Losses MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2018 * * * * * * * MFRS 9, Financial Instruments (2014) IC Interpretation 22, Foreign Currency Transactions and Advance Consideration Amendments to MFRS 1, First-time Adoption of Financial Reporting Standards (Annual Improvements to MFRS Standards 2014-2016 Cycle) Amendments to MFRS 2, Share-based Payment - Classification and Measurement of Share-based Payment Transactions Amendments to MFRS 4, Insurance Contracts - Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts MFRS 15, Revenue from Contracts with Customers Amendments to MFRS 15, Clarifications to MFRS 15 Revenue from Contracts with Customers 32
2. SIGNIFICANT ACCOUNTING POLICIES (CONT'D) 2.2. Statement of Compliance (Cont'd) (b) Standards issued but not yet effective (Cont'd) MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2018 (Cont'd) * * Amendments to MFRS 128, Investments in Associates and Joint Ventures (Annual Improvements to MFRS Standards 2014-2016 Cycle) Amendments to MFRS 140, Investments Property - Transfers of Investment Property MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2019 * MFRS 16, Leases MFRSs, Interpretations and amendments effective for annual periods beginning on or after a date yet to be confirmed * Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates and Joint Ventures - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture The initial application of the abovementioned accounting standards, amendments and interpretations are not expected to have any material impacts to the financial statements of the Group and the Company except as mentioned below: MFRS 15, Revenue from Contracts with Customers MFRS 15 replaces the guidance in MFRS 111, Construction Contracts, MFRS 118, Revenue, IC Interpretation 13, Customer Loyalty Programmes, IC Interpretation 15, Agreements for Construction of Real Estate, IC Interpretation 18, Transfers of Assets from Customers and IC Interpretation 131, Revenue - Barter Transactions Involving Advertising Services. Upon adoption of MFRS 15, it is expected that the timing of revenue recognition might be different as compared with the current practices. 33
2. SIGNIFICANT ACCOUNTING POLICIES (CONT'D) 2.2. Statement of Compliance (Cont'd) (b) Standards issued but not yet effective (Cont'd) MFRS 9, Financial Instruments MFRS 9 replaces the guidance in MFRS 139. Financial Instruments: Recognition and Measurement on the classification and measurement of financial assets. Upon adoption of MFRS 9, financial assets will be measured at either fair value or amortised cost. MFRS 16, Leases MFRS 916replaces introduces the guidance a singleinaccounting MFRS 139. model Financial for lessee Instruments: and eliminates Recognition the and distinction Measurement between onfinance the classification lease and and operating measurement lease. Lessee of financial is now assets. required Uponto adoption recognise of assets MFRS and9, liabilities financial for assets all leases will be withmeasured a term of atmore eitherthan fair12 value months, or amortised unless the cost. underlying asset is of low value. Upon adoption of MFRS 16, the Group and the Company are required to account for major part of its operating leases in the balance sheet by recognising the 'right-of-use' assets and the lease liability, thus increasing the assets and liabilities of the Company. The Group is currently assessing the financial impact of these Standards and plan to adopt these Standards on the required effective date. 2.3 Summary of Significant Accounting Policies (a) Basis of Consolidation (i) Subsidiaries Subsidiaries are entities, including unincorporated entities, controlled by the Group. Control exists when the Group has the ability to exercise its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. The Group controls an entity when; * the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. 34
2. SIGNIFICANT ACCOUNTING POLICIES (CONT'D) 2.3 Summary of Significant Accounting Policies (Cont'd) (a) Basis of Consolidation (Cont'd) (i) Subsidiaries (Cont'd) * * Potential voting rights are considered when assessing control only when such rights are substantive. The Group considers it has de facto power over an investee when, despite not having the majority of voting rights, its has the current ability to direct the activities of the investee that significantly affect the investee's return. Investments in subsidiaries are measured in the Company's statement of financial position at cost less any impairment losses. The cost of investments includes transaction costs. The accounting policies of subsidiaries are changed when necessary to align them with the policies adopted by the Group. (ii) Business combinations Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group. For new acquisition, the Group measures the cost of goodwill at the acquisition date as : * the fair value of the consideration transferred; plus * * * the fair recognised value of amount the consideration of any non-controlling transferred; interests plus in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. 35