Annual Report 2015 - malaysiastock.biz fileJasa Merin (Malaysia) Sdn Bhd, (“Jasa Merin”)...

Annual Report 2015

Jasa Merin (Malaysia) Sdn Bhd, (“Jasa Merin”) commenced operation in 1982. For over 30 years, Jasa Merin has been providing offshore support vessel (“OSV”) services to oil majors such as PETRONAS Carigali Sdn Bhd, ExxonMobil Exploration and Production Malaysia Inc. and Sarawak Shell Bhd. Presently, Jasa Merin operates a fleet of 20 vessels comprising 2 Straight Supply Vessels (“SSV”) and 18 Anchor Handling Tug Supply Vessels (“AHTS”).

SSV are vessels specifically designed to transport equipment and cargoes to and from offshore installations whilst AHTS vessels undertake anchor handling functions (positioning and retrieval of drilling rig anchors) and towing activities (repositioning of rigs to other drilling locations) in addition to providing services of SSV. Jasa Merin operates two classes of AHTS, namely 60 MTBP AHTS which are the standard AHTS deployed in shallow waters, and 120 MTBP AHTS equipped with Dynamic Positioning System that support both shallow and deep water operations.

Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd (“SILK”) is the concession owner of Kajang Traffic Dispersal Ring Road, better known as Kajang SILK Highway. The concession runs for a period of 33 years, ending in 2037. Kajang SILK Highway stretches for 37 km and is a primary urban road serving south eastern corridor of Klang Valley, linking Balakong, Sg. Long, Kajang, Bangi, Serdang and Putrajaya as well as these townships to the Sungai Besi Highway (Besraya), the North South Expressway, Cheras-Kajang Highway, Kajang-Seremban Highway (LEKAS), South Klang Valley Expressway, and in the future, to the East Klang Valley Expressway.

Operating Subsidiaries

CONTENT2 Corporate Information

3 Profile of Board of Directors

6 Chairman’s Statement

9 Five-Year Group Financial Summary

10 Corporate Governance Statement

16 Audit Committee Report

21 Statement on Risk Management and Internal Control

24 Statement of Corporate Social Responsibility

26 Financial Statements

103 Additional Compliance Information

104 Substantial Shareholders

105 Directors’ Interests in Shares and Analysis of Shareholdings

108 Notice of 18th and 19th Annual General Meeting

Proxy Form

2 Annual Report 2015 - SILK Holdings Berhad (405897-V)

AUDIT COMMITTEE

Tai Keat Chai (Chairman) Dato’ Harun bin Md Idris Dato’ Abdul Hamid bin Sh. MohamedNik Abdul Malik bin Nik Mohd Amin(appointed on 1 October 2014)

NOMINATION AND REMUNERATION COMMITTEE

Tan Sri Datuk Seri Razman M Hashim (Chairman)Dato’ Mohd Azlan Hashim Dato’ Harun bin Md Idris

RISK MANAGEMENT COMMITTEE

Tai Keat Chai (Chairman) (appointed on 12 March 2015)Nik Abdul Malik bin Nik Mohd AminDato’ Hj. Razali bin Mohd Yusof(appointed on 12 March 2015)Jamaludin Mohd Nor Johan Zainuddin bin Dzulkifli (resigned on 12 March 2015)

INFRASTRUCTURE COMMITTEE

Nik Abdul Malik bin Nik Mohd Amin (Chairman) Dato’ Hj. Din bin AdamAdzmi ShafieJamaludin Mohd Nor Md Rijaluddin bin Mohd Salleh (appointed on 2 September 2015)Johan Zainuddin bin Dzulkifli (resigned on 12 March 2015)

COMPANY SECRETARIES

Lim Hui Ming (BC/L/740) (appointed on 10 December 2014)Sothirajen a/l S. Paranjothi (LS 0005734) (resigned on 23 March 2016)Kwan Wai Kein (MAICSA 7055765)(resigned on 10 December 2014)

REGISTERED OFFICE

Level 22, Axiata TowerNo. 9, Jalan Stesen Sentral 5Kuala Lumpur Sentral50470 Kuala Lumpur, Malaysia Tel No. : (03) 2273 1919 Fax No. : (03) 2273 8310

PRINCIPAL PLACE OF BUSINESS

Oil & Gas Support Services Division: Jasa Merin (Malaysia) Sdn Bhd No. 7776, Jalan Kubang Kurus 24000 Kemaman Terengganu Darul Iman, MalaysiaTel No. : (09) 851 1100 Fax No. : (09) 858 3237

Infrastructure Division:Sistem Lingkaran-Lebuhraya Kajang Sdn BhdPlaza Tol Sungai BalakKM28.3A, Lebuhraya KAJANG SILK43000 KajangSelangor Darul Ehsan, MalaysiaTel No : (03) 8921 0000Fax No : (03) 8921 0001

SHARE REGISTRAR

Symphony Share Registrars Sdn Bhd Level 6, Symphony House Pusat Dagangan Dana 1 Jalan PJU 1A/46 47301 Petaling JayaSelangor Darul Ehsan, Malaysia Tel No : (03) 7841 8000 Fax No : (03) 7841 8151 / 7841 8152

AUDITORS

KPMGChartered Accountants

SOLICITORS

Christopher & Lee Ong

PRINCIPAL BANKERS

Affin Bank BerhadAffin Islamic Bank BerhadBank Pembangunan Malaysia BerhadMalayan Banking BerhadMaybank Islamic Berhad

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities Berhad

WEBSITE ADDRESS

www.silk.my

CORPORATE INFORMATION

Executive Chairman,Non-Independent Executive DirectorDato’ Mohd Azlan Hashim

Deputy Chairman,Independent Non-Executive DirectorTan Sri Datuk Seri Razman M Hashim

Non-Independent Non-Executive DirectorJohan Zainuddin bin Dzulkifli (resigned on 12 March 2015)

Independent Non-Executive DirectorsDato’ Abdul Hamid bin Sh. Mohamed Tai Keat Chai Nik Abdul Malik bin Nik Mohd AminDato’ Harun bin Md Idris Dato’ Haji Razali bin Mohd Yusof(appointed on 1 January 2015)

BOARD OF DIRECTORS

Annual Report 2015 - SILK Holdings Berhad (405897-V)3

PROFILE OFBOARD OF DIRECTORS

DATO’ MOHD AZLAN HASHIMMalaysian, aged 59Executive Chairman(Non-Independent)

MemberNomination and Remuneration Committee

Dato’ Mohd Azlan Hashim was appointed to the Board of SHB as Non-Executive Director on 4 June 2008 and was subsequently appointed as Executive Chairman on 24 June 2008.

A Chartered Accountant by profession, he graduated with a Bachelor of Economics from Monash University, Australia. He is a Fellow Member of the Institute of Chartered Accountants, Australia, member of Malaysian Institute of Accountants, Fellow Member of Malaysian Institute of Directors, Fellow Member of the Institute of Chartered Secretaries and Administrators and Honorary Member of The Institute of Internal Auditors, Malaysia. He has extensive experience in the corporate sector including financial

services and investments. Among others, he has served as Chief Executive of Bumiputra Merchant Bankers Berhad, Group Managing Director of Amanah Capital Malaysia Berhad and Executive Chairman of Bursa Malaysia Berhad Group.

Current directorships in public companies and other organisations include Khazanah Nasional Berhad, Labuan Financial Services Authority, D&O Green Technologies Berhad, Scomi Group Bhd and IHH Healthcare Berhad. He is also a member of the Government Retirement Fund Inc. Investment Panel.

He has attended all of the 6 Board Meetings held in the financial period.

TAN SRI DATUK SERI RAZMAN M HASHIMMalaysian, aged 77Non-ExecutiveDeputy Chairman (Independent)

ChairmanNomination and Remuneration Committee

Tan Sri Datuk Seri Razman M Hashim was appointed to the Board of SHB as Non-Executive Deputy Chairman on 10 June 2002.

A Member of Australian Institute of Bankers with more than 34 years of experience in the banking industry. Joined Standard Chartered Bank Malaysia Berhad in 1964 and served in various capacities including secondments to the Bank’s branches in London, Europe, Hong Kong and Singapore. In 1994, he was appointed as Executive Director / Deputy Chief Executive of Standard Chartered Bank Malaysia Berhad until his retirement

in June 1999. In the same month in 1999, he was appointed as Chairman of MBf Finance Berhad by Bank Negara Malaysia as its nominee until January 2002 when the finance company was sold to Arab-Malaysian Group.

Tan Sri Datuk Seri Razman is currently the Deputy Executive Chairman of Sunway Berhad and Chairman of Berjaya Land Berhad. His current directorships in other public companies include MAA Group Berhad and Mycron Steel Berhad.


DATO’ HARUN BIN MD IDRISMalaysian, aged 65Independent Non-Executive Director

MemberAudit Committee,Nomination and Remuneration Committee

Dato’ Harun bin Md Idris was appointed to the Board of SHB as Independent Non-Executive Director on 12 August 2009.

Graduate of the Universiti Kebangsaan Malaysia with Diploma of Police Science, Dato’ Harun joined the Royal Malaysian Police (RMP) on 1 June 1970 as a Probationary Inspector. He served the RMP for 39 years and retired on 9 April 2009 with the rank of Deputy Commissioner of Police (DCP). His last post was as the Deputy Director 1, Special Branch.In his long and distinguished career with

the RMP, Dato’ Harun had served in various capacities including as the head of Special Branch of Perak, Kedah and Sarawak.

He has no directorship in other public companies.




DATO’ HAJI RAZALI BINMOHD YUSOFMalaysian, aged 57Independent Non-ExecutiveDirector

MemberRisk Management Committee

Dato’ Haji Razali bin Mohd Yusof was appointed to the Board of SHB as Independent Non-Executive Director on 1 January 2015.

A graduate with a Bachelor of Science in Mining Engineering and a Master of Science in Engineering Management from University of Missouri, he has held various key positions in a number of private and multinational companies in Malaysia. He brings with him over 25 years’ experience

in the mining and oil & gas industry, having held many roles ranging from developing businesses, managing critical projects, organisational development and providing advisory and consultancy services.


He has attended all of the 4 Board Meetings held in the financial period during his tenure.

DATO’ ABDUL HAMID BINSH. MOHAMEDMalaysian, aged 51Independent Non-ExecutiveDirector

MemberAudit Committee

Dato’ Abdul Hamid bin Sh. Mohamed was appointed to the Board of SHB as Independent Non-Executive Director on 18 August 2008.

He is a Fellow of the Association of Chartered Certified Accountants. A graduate of the Emile Woolf School of Accountancy, London he began his career as Officer in the Corporate Banking department in Bumiputra Merchant Bankers Berhad in 1989 and rose to the position of Manager. In 1994, he joined Amanah Capital Malaysia Berhad (formerly known as Komplek Kewangan Malaysia Berhad) as Senior Manager Corporate Planning, heading the newly created Corporate Planning department under the Corporate Services division and promoted to Assistant General Manager, Corporate Planning in 1997 and to Head

of Corporate Services division in January 1998.

He joined Kuala Lumpur Stock Exchange (now known as Bursa Malaysia) in May 1998 as Senior Vice President in charge of Strategic Planning & International Affairs division and was promoted to Deputy President (Strategy & Development) in 2002. He was re-designated as Chief Financial Officer in 2003. Currently he serves as the Executive Director of Symphony House Berhad.

Current directorships in other public companies include Symphony House Berhad, MMC Corporation Berhad, Scomi Group Berhad and Pos Malaysia Berhad.

He has attended 5 out of the 6 Board Meetings held in the financial period.

TAI KEAT CHAIMalaysian, aged 62Independent Non-ExecutiveDirector

ChairmanAudit Committee,Risk and Management Committee

Tai Keat Chai was appointed to the Board of SHB as Independent Non-Executive Director on 18 August 2008.

He is a member of the Institute of Chartered Accountants in England & Wales and the Malaysian Institute of Accountants.

He began his career with KPMG in London in 1977 and a year later joined Price Waterhouse (now known as PwC) in Kuala Lumpur. In 1981, he joined Amanah Merchant Bank Berhad (now known as Alliance Investment Bank Berhad) where he worked for seven years. In 1990, he ventured into the stockbroking industry and has worked in SJ Securities Sdn

Bhd, JB Securities Sdn Bhd (now known as A.A.Anthony Securities Sdn Bhd) and BBMB Securities Sdn Bhd (now known as Kenanga Investment Bank Berhad) as General Manager, Director and dealer’s representative respectively. Currently he is a Director of Fiscal Corporate Services Sdn Bhd.

Current directorships in other public listed companies include Omesti Berhad, Microlink Solutions Berhad and Rex Industry Berhad.




NIK ABDUL MALIK BINNIK MOHD AMINMalaysian, aged 58Independent Non-ExecutiveDirector

ChairmanInfrastructure CommitteeMemberAudit Committee Risk Management Committee

Nik Abdul Malik bin Nik Mohd Amin was appointed to the Board of SHB as Independent Non-Executive Director on 24 February 2009.

He graduated from the University of Leeds, United Kingdom with Bachelor of Science (Honours) in Civil Engineering. He is a graduate member of The Institute of Engineers Malaysia and Board of Engineers Malaysia.

He started his career as Project Engineer with FAO/United Nations Development Programme in 1981 in a pilot project collaboration with the Drainage and Irrigation Department of Terengganu Darul

Iman (“DID Terengganu”). He subsequently joined DID Terengganu in 1983 as District Engineer, and was subsequently promoted to Planning and Design Engineer in 1984. Between 1986 and 1989, he served as Project Engineer and Executive Director in two private construction companies, before assuming his current position as Managing Director of ND Group of companies, an established property developer and Class A contractor.



NOTES:

1. Family Relationship with Director and/or Major Shareholder None of the Directors has any family relationship with any director and/or major shareholder of SHB.

2. Conflict of Interest None of the Directors has any conflict of interest with SHB Group.

3. Conviction for Offences None of the Directors has been convicted for offences within the past 10 years other than traffic offences, if any.


INTRODUCTION

I would like to begin by highlighting two key corporate developments that transpired during the period under review that are considered very significant.

Firstly, SILK Holdings Berhad (“SHB” or “the Group”) had, on 30 June 2015, announced that the financial year end for the Group going forward, will fall on 31 December. The change in financial year was undertaken to allow for a realignment of the Group’s financial reporting with that of the calendar year, to provide for a more efficient reporting as well as to coincide with the various operational filings with regulatory bodies overseeing the businesses of the Group. As a consequence of the change in financial year, the audited accounts referenced in this Chairman’s Statement covers a period of 17 months.

In addition, shareholders are also requested to take note that the Chairman’s Statement presented in the Annual Report for the financial year ended 31 July 2014, was made pursuant to the then proposed disposal of Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd (“SILK”), resulting in the performance of the Highway Division being accounted for separately as discontinued operations. Following the termination of the proposed disposal, the performance of the Highway Division, which is made up entirely of SILK, has been reinstated into continuing operations.

These developments will require the results of the current period to be considered in perspective, given the difference in timeframe (i.e. 17-month period for the period ended 31 December 2015 as opposed to 12-month period for the financial year ended 31 July 2014).

Where comparatives are used in this Chairman’s Statement, if at all, it will be against the figures disclosed in the Chairman’s Statement in the Annual Report for the financial year ended 31 July 2014.

FINANCIAL PERFORMANCE

The Group posted a consolidated revenue of RM596 million for the 17-month ended 31 December 2015. The revenue performance recorded for the 17 months ended 31 December 2015, reflects the increasingly competitive and challenging economic landscape and major industry-wide developments that impacted both the oil & gas support services as well as highway concessionaire industries. This is further explained in the respective Divisional analysis.

Despite the commendable revenue performance, higher depreciation, amortisation and finance costs recorded during the year, vessel impairment charges and the one-off charge of RM24.5 million associated with the distribution of the employee trust shares incurred during the financial period, resulted in the Group registering a pre-tax loss of RM20.7 million for the 17-month period ended 31 December 2015.

OPERATING CONDITIONS

Oil & Gas Support Services Division

The Oil & Gas Support Services Division remained the Group’s main contributor to overall revenue, contributing 67% to the overall top-line performance. During the 17-month period under review, the Oil & Gas Support Services Division recorded a revenue of RM400.8 million.

This performance was recorded on the back of reduced vessel charter days and consolidation of vessel charter rates following the prolonged weak sentiment in the oil & gas industry. Depreciation and finance charges incurred during the period of RM228.7 million as well as impairment charges amounting to RM11.8 million, resulted in a pre-tax profit performance for the 17-month period of RM18.5 million.

The Division deployed a total of 20 vessels to various clients during the 17-month period under review. Fleet utilisation faced significant challenges during this period prompting the Board to consider alternative re-deployment options, including to pursue shorter-term mandates.

CHAIRMAN’S STATEMENT

ON BEHALF OF THE BOARD OF DIRECTORS, I AM PLEASED

TO PRESENT THE ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS OF SILK HOLDINGS BERHAD

FOR THE PERIOD ENDED 31 DECEMBER 2015.



Highway Division

During the financial period under review, the Highway Division recorded an average daily traffic volume (“ADTV”) of over 213,000 vehicles per day. The ADTV for the financial period under review had previously peaked at 230,000 vehicles per day but eased to 213,000 vehicles per day following the implementation of the new toll rate structure for the Kajang Traffic Dispersal Ring Road (“Kajang-SILK Highway”) effective 15 October 2015.

On a calendar year basis, the Kajang-SILK Highway continues to show encouraging growth. The ADTV for the calendar year 2015 stands at 214,000 vehicles per day compared to an ADTV of 205,000 vehicles per day for calendar year 2014.

Revenue for the 17-month period ended 31 December 2015 from toll collection as well as compensation from the Government amounted to RM195.3 million. Notwithstanding the higher toll revenue from increased traffic and the toll rate increase, given the significant impact of high depreciation, amortisation and finance costs, the Highway Division recorded a pre-tax loss of RM18.9 million for the period ended 31 December 2015. This is not unusual given the accounting treatment for assets of highway concession entities. However, the Highway Division remains cashflow positive.

During the period under review, the Highway Division also successfully completed Phase 1 of its Lane Expansion programme. Under this phase, the Division had carried out upgrading works to the alignment between UNITEN Interchange up to the UPM Interchange, as a means to ease congestion along the affected alignment during peak periods. This is a reaffirmation of the Division’s commitment to facilitate a better and safer driving experience among road users. In addition, the Division also took this opportunity to update and improve the road-signages along the alignment to further add to this commitment. The improved driving experience, will in the long-run, translate to more traffic on the Kajang SILK Highway.

PROSPECTS

Oil & Gas Support Services Division

Oil prices have fallen significantly since June 2014 and there is a move towards cost rationalisation within the industry which may result in weaker revenue performance ahead. Going forward, expectations are that given the prolonged and ongoing weak sentiment within the industry, competition will remain tight, particularly for the 60-metric tonne anchor-handling tug/supply vessels (“AHTS”) sub-segment. Given this, the Board will continue to explore the appropriateness and feasibility of re-deploying unchartered vessels to short-term mandates. It will also continue to explore various cost-optimisation options available to it to ensure the impact of rising costs on the Division remains manageable.

Despite the challenging conditions, the Board of Directors remains positive of the Division’s long-term prospects and is of the view that contributions from the Oil & Gas Support Services Division will remain positive. The Board will continue to monitor developments in this sector closely.

On 23 December 2015, the Group also announced the proposed acquisition of three (3) oil/chemical tankers. This acquisition offers the Group an opportunity to diversify into other marine logistics related businesses, specifically the downstream segment of the oil & gas industry, separate from the upstream segment of the industry currently undertaken by the Division.

Highway Division

The Board also remains mindful of the challenges facing the Highway Division. The new toll rate structure implemented on 15 October 2015 for the Kajang SILK Highway did not materially affect results of the financial period under review as it was implemented towards the end of the period. Furthermore, the Highway Division has been accruing the toll compensation from the Government as it falls due.

Going forward, the new toll rate structure is expected to moderate traffic volume and growth rates in the near term. This may have an impact on the Highway Division’s financial performance, albeit only temporarily. Notwithstanding this, the Board of Directors is of the opinion that the Highway Division will continue to enjoy long-term growth in traffic volume due to the highway’s excellent connectivity with other highways along its alignment together with the availability of installed capacity, and continuing and increasing development and urbanization in the surrounding vicinity of the highway. Consequently, the Board still expects the new rate structure to contribute positively to the Division’s revenue in the medium to longer term. In addition, the Board is also of the view that although the Highway Division will continue to record accounting losses due to the existing high finance and amortization costs, it is expected to remain cash flow positive on an operational basis.

DIVIDENDS

In order to continue building the foundations for the Group to enable it to achieve long-term and sustainable growth, the Board of Directors is not able to recommend the declaration of any dividend for the financial period ended 31 December 2015. With sustained growth and expected improved operating and financial performance in the future, the Board will revisit and review this position for the benefit of its shareholders.



ACKNOWLEDGEMENTS

On behalf of the Board of Directors, I wish to extend our sincere appreciation to the Group’s management, staff and employees, at all levels and across the various functions. The Board acknowledges the collective effort of the Group staff throughout the financial period, particularly with respect to the various initiatives undertaken.

I would also like to convey my sincere appreciation to all members of our Group Board of Directors. Their collective counsel in the past financial period has been invaluable in guiding the Group forward. It is hoped that the Board will continue to be committed to the Group.

I would also like to take this opportunity to convey the Board’s appreciation to all our valued customers, business partners and financiers for their continued support. Their continued confidence and support have been instrumental in allowing the Group to progress to where it is now.

Lastly, on behalf of the Board, I would also like to convey our gratitude to all our shareholders for their patience and unwavering support. I sincerely thank you all and hope that you will continue to support the Board in its objective to take the Group forward.

Thank you.

DATO’ MOHD AZLAN HASHIMExecutive Chairman


2011RM’000

2012RM’000

2013RM’000

re-presented

2014RM’000

re-presented

2015RM’000

(17 Months)*

RESULTS

REVENUE 247,726 341,063 383,346 364,783 596,035

(Loss)/profit before taxation (5,725) 17,343 (4,155) 1,355 (20,736)

Taxation (6,176) (7,953) 3,260 3,369 (5,899)

(Loss)/profit after taxation (11,901) 9,390 (895) 4,724 (26,635)

Less non-controlling interests 665 (10,069) (14,344) (15,138) (3,036)

Loss attributable to shareholders (11,236) (679) (15,239) (10,414) (29,671)

BASIC LOSS PER SHARE (SEN) (2.9) (0.2) (3.9) (2.3) (4.4)

FINANCIAL POSITION

Property, vessels and equipment 871,329 898,553 1,146,114 1,173,064 1,205,319

Concession intangible assets 901,648 890,458 876,382 - 936,372

Goodwill 647 13,883 13,883 647 13,883

Deferred tax benefits - 122,768 133,710 29 141,498

Long term receivables - - - - 7,385

Available for sale financial assets 600 - - - -

Current assets 123,035 158,167 156,140 133,648 178,469

Non-current assets classified as held for sale 1,071 630 189 1,107,533 41,578

TOTAL ASSETS 1,898,330 2,084,459 2,326,418 2,414,921 2,524,504

Liabilities classified as held for sale - - - 1,082,525 -

Current liabilities 186,427 172,605 245,937 214,477 343,704

Long-term liabilities 1,520,182 1,663,316 1,827,446 874,686 1,931,953

TOTAL LIABILITIES 1,706,609 1,835,921 2,073,383 2,171,688 2,275,657

TOTAL NET ASSETS/SHAREHOLDERS’ FUNDS 191,721 248,538 253,035 243,233 248,847

SHARE CAPITAL 99,262 99,262 108,333 129,020 175,383

NET ASSETS PER SHARE ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY (SEN) 32.3 43.5 37.7 35.8 26.6

* The Group changed its year end from 31 July to 31 December with effect from the financial period ended 31 December 2015. Accordingly, results for that period are for 17 months.

FIVE-YEAR GROUP FINANCIAL SUMMARY


The Board of Directors of SILK Holdings Berhad (hereinafter “the Company”) and its Group of companies (hereinafter “the Group”) fully appreciates the role good governance plays in enhancing shareholders’ value. The Board is committed towards compliance with the requirements set out in the Malaysian Code on Corporate Governance 2012 (hereinafter “the Code”) and strives to adopt the substance behind the corporate governance prescriptions to the best of its ability.

The Board is pleased to report to its shareholders on the application of the 8 Principles as set out in the Code within the Company during the financial period.

PRINCIPLE 1: ESTABLISH CLEAR ROLES AND RESPONSIBILITIES

Functions of the Board and Management

The Board takes it upon itself to ensure that shareholders’ interests and its goal of creating sustainable value over the long-term are always kept in view in any major decision it makes. The Board does so by segregating its role to that of overall stewardship and setting the strategic direction for the Company.

The Management manages the day-to-day operations of the Company, in accordance with the strategic direction and delegations of the Board. The Board continuously oversees the activities of Management in carrying out these delegated duties.

In the absence of a Group CEO, the daily running of the business is entrusted to the respective Divisional Chief Operating Officers and their management teams. The Divisional Chief Operating Officers report directly to the Executive Directors at each operating company (i.e. Executive Chairman at Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd and the Executive Vice-Chairman at Jasa Merin (Malaysia) Sdn Bhd) and carry out their duties under a pre-defined Financial Authority Limits / Limits of Authority set by the respective Boards. These Limits of Authority are reviewed from time to time to ensure continued relevance, effectiveness and efficiency.

Roles and responsibilities of the Board

The Company is led and controlled by a balanced and effective Board where it assumes, amongst others, the following principal responsibilities in discharging its stewardship role and fiduciary and leadership functions:

a) Setting the objectives, goals and strategic plans with a view to maximising shareholder value;b) Adopting and monitoring progress of strategies, budgets, plans and policies;c) Overseeing the conduct of businesses to evaluate whether the businesses are properly managed;d) Identifying principal risks and ensuring the implementation of appropriate systems to mitigate and manage these risks;e) Considering Management’s recommendations on key issues including acquisitions, divestments, restructuring, funding

and significant capital expenditure;f) Human resources planning and development; andg) Reviewing the adequacy and integrity of internal control systems and management information systems, including

systems for compliance with applicable laws, regulations, rules, directives and guidelines.

The Board, particularly at the operating company level, sets the budgets for the coming year and clear, pre-defined Financial Authority Limits / Limits of Authority on Management to ensure major decisions, specifically with respect to investments or capital expenditures, are only undertaken after careful consideration by the Board and its various Board Committees, where appropriate. In essence, decisions affecting key business considerations or where they involve a value higher than what has been approved for Management, are all reserved for the Board.

The Board has set up the following main Committees and will periodically review their terms of reference and operating procedures. The Committees are required to report to the Board on all their deliberations and recommendations and such reports are incorporated in the minutes of the Board Meetings.

Audit Committee

The Audit Committee comprises Tai Keat Chai as Chairman, Dato’ Harun bin Md Idris, Dato’ Abdul Hamid bin Sh. Mohamed and Nik Abdul Malik bin Nik Mohd Amin. The Audit Committee is set up to play an active role in assisting the Board in discharging its governance responsibilities. The composition of the Audit Committee, its terms of reference, attendance of meetings and a summary of its activities are set out on pages 16 to 20 of the Annual Report.

Risk Management Committee

The Risk Management Committee comprises Tai Keat Chai as Chairman, Dato’ Hj. Razali bin Mohd Yusof, Nik Abdul Malik bin Nik Mohd Amin and Jamaludin Mohd Nor. The Risk Management Committee is tasked with the responsibility to oversee the investment activities of the Group, approving appropriate investment appraisal as well as identification of strategic investment opportunities for the Company and its businesses.

CORPORATE GOVERNANCE STATEMENT


Nomination & Remuneration Committee

The Nomination & Remuneration Committee comprises Tan Sri Datuk Seri Razman M Hashim as Chairman, Dato’ Mohd Azlan Hashim and Dato’ Harun bin Md Idris.

Access to information and advice

The Board recognises that the decision making process is highly contingent on the quality of information furnished. As such, all Directors have unrestricted access to any information pertaining to the Company and the Group. The Directors are also notified of any corporate announcements released to Bursa Securities and the impending restriction in dealing with the securities of the Company prior to the announcement of the financial results or corporate proposals.

All Directors have full and timely access to information with Board papers distributed in advance of meetings. Every Director also has unhindered access to the Senior Management and the advice and services of the Company Secretaries as well as independent professional advisers including the external auditors. The Board is regularly updated by the Company Secretaries on new statutory and regulatory requirements relating to the duties and responsibilities of Directors.

Where necessary, the Board also has access to external advice. There is a formal procedure approved by the Board for all Directors, whether as a full Board or in their individual capacity, to obtain independent professional advice, when necessary, at the Company’s expense.

Qualified and competent Company Secretary

In order to assist the Board with its functions, the Company has appointed two (2) qualified Company Secretaries during the period under the review. Details of the two persons can be found on page 2 of this Annual Report.

Board charter

The Board recognises the need for the functions, powers and responsibilities of the Board and its various Committees to be clearly articulated, internalised and publicised. At present, the Board has yet to formally adopt and publish these into a suitable Board Charter. This will be reviewed periodically.

PRINCIPLE 2: STRENGTHEN COMPOSITION

Nomination & Remuneration Committee

The Nomination & Remuneration Committee currently comprises the following:

1) Tan Sri Datuk Seri Razman M Hashim (Chairman) 2 Dato’ Mohd Azlan Hashim3) Dato’ Harun bin Md Idris

The Nomination & Remuneration Committee is made up of three (3) members, the majority of whom are independent. The Nomination & Remuneration Committee is empowered by the Board and its terms of reference include bringing to the Board recommendations on the appointment of new directors besides assessing the effectiveness of Board Committees and the Board as a whole.

The Nomination & Remuneration Committee is also entrusted to systematically assess the contribution of each Director due for retirement before recommending to the Board for their re-election in accordance with the provisions of the Articles of Association of the Company and the relevant provisions of the Companies Act, 1965.

The Board takes note of the recommendation in the Malaysian Code of Corporate Governance for the Nomination & Remuneration Committee to comprise exclusively of non-executive directors, a majority of whom must be independent. The Board is of the opinion however, that there are sufficient safeguards against conflicts of interest within the Nomination & Remuneration Committee and as such will be maintaining the current arrangement.

Criteria for recruitment and annual assessment of Directors

The Board, through the Nomination & Remuneration Committee, appraises the composition and effectiveness of the Board on an annual basis and believes that the current composition brings the required mix of skills and core competencies required for the Board to discharge its duties effectively.

New appointees will be considered and evaluated by the Nomination & Remuneration Committee based on a set of criteria. Such evaluation criteria will not take into account the ethnicity or gender of the proposed new director in keeping with norms set by the Board that neither the ethnicity nor gender of a particular candidate for appointment to the Board is an influencing factor. The Nomination & Remuneration Committee will then recommend the candidates to be approved and appointed by the Board. The Company Secretary will ensure that all appointments are properly made and that legal and regulatory obligations are met.




Criteria for recruitment and annual assessment of Directors (continued)

New Directors are expected to have such expertise so as to qualify them to make positive contributions to the Board, performance of its duties and to give sufficient commitment, time and attention to the affairs of the Company. They are also briefed by the Chairman, Company Secretary and members of the management on the nature of business and current issues within the Company and the Group.

Formal and transparent remuneration policies and procedures

The remuneration of the Executive Directors is structured on the basis of linking rewards to corporate and individual performance. For Non-Executive Directors, the level of remuneration reflects the experience and level of responsibilities. The Board as a whole recommends the fees for the Directors with individual Directors abstaining from decisions in respect of their individual remuneration. The fees payable to the Directors are subject to the approval of shareholders.

The breakdown of the remuneration for the Directors of the Company during the financial period is as follows:-

Executive Directors

RM’000

Non-Executive Directors

RM’000Total

RM’000

Salaries 321 - 321Fees - 422 422 Other emoluments 246 71 317Total remunerations 567 493 1,060

The number of directors whose remunerations fall under the respective bands is as follows:-

Executive Directors

Non-Executive Directors Total

Range of remunerations:0 to RM50,000 1 - 1RM50,001 to RM100,000 - 6 6RM550,001 to RM600,000 1 - 1

PRINCIPLE 3: REINFORCE INDEPENDENCE

Composition of the Board

The current Board comprises seven (7) Directors who possess the necessary skills and experience relevant to the business operations of the Company. The composition of the Board is broadly balanced to reflect the interests of major shareholders, management and minority shareholders.

Of the seven (7) Directors, one (1) is non-independent and performs an executive function, namely Dato’ Mohd Azlan Hashim. The remaining members of the Board of Directors are independent non-executive Directors. The profile for each of the members of the Board is contained on pages 3 to 5 of this Annual Report.

The Company’s Articles of Association provides that 1/3 of the Board are subject to retirement by rotation at each Annual General Meeting. Each Director shall retire at least once every 3 years but shall be eligible for re-election. The Directors to retire in each year are those who have been longest in office since their last election or appointment. To assist the shareholders in their decision, sufficient information such as personal profile, attendance of meetings and the shareholding of each Director standing for re-election are disclosed in the Statement Accompanying Notice of Annual General Meeting.

Separation of Positions of Chairman and CEO/Managing Director

The Board is headed by Dato’ Mohd Azlan Hashim, acting as the Executive Chairman of the Company. Given Dato’ Mohd Azlan’s strong leadership, business acumen and wide experience, the Board continues to maintain this arrangement which it feels is in the best interest of the Company. The Company has opted to address the issue of adequate check and balances by having a majority independent Board. 6 out of 7 Board members are Independent Directors with diverse professional and business backgrounds. Decisions by the Board are only made after the issues had been deliberated at length by the Board, wherein the views of each Board member are sought.


Annual Assessment of Independent Directors

The Board, with the assistance of the Nomination & Remuneration Committee, assesses the Independent Directors on an annual basis with the aim of ensuring the Independent Directors continue to bring independent and objective judgement to the Board thereby mitigating conflict of interest and undue influence from interested parties.

Tenure of an Independent Director

The tenure of the service of an Independent Director is capped at nine years. Upon completion of nine years of service, an Independent Director may continue to serve on the Board subject to the director’s re-designation as a Non-Independent Director. However, subject to the assessment of the Nomination & Remuneration Committee, an Independent Director can remain as an Independent Director after serving a cumulative term of nine years subject to the shareholders’ approval in a general meeting.

Currently, there are no Independent Directors on the Board who have served in that capacity for more than nine years.

Board Meetings

The Board normally meets at least once every quarter to review the Company and Group’s financial, operational and business performances. Notices and agenda of meetings duly endorsed by the Executive Chairman together with relevant board papers are given prior to the meetings, for the Directors to study and evaluate.

A total of 6 Board meetings were held during the financial period. A summary of attendance for each of the Directors is as follows:

Name of Directors:Number of

Meetings Attended

Percentage of Attendance

(%)

Dato’ Mohd Azlan HashimTan Sri Datuk Seri Razman M Hashim Dato’ Abdul Hamid bin Sh. Mohamed Tai Keat Chai Nik Abdul Malik bin Nik Mohd AminDato’ Harun bin Md IdrisDato’ Hj. Razali bin Mohd Yusof (appointed on 1 January 2015)Johan Zainuddin bin Dzulkifli (resigned on 12 March 2015)

6/66/65/66/66/66/64/42/2

10010083

100100100

100100

PRINCIPLE 4: FOSTER COMMITMENT

Time commitment and acceptance of new directorships

The Board complies with Paragraph 15.06 of the Main Market Listing Rules on the restriction on the number of directorships in listed companies held by the Directors. The Company Secretary monitors the number of directorships held by each Director to ensure compliance at all times. The list of directorships of each Director is updated regularly and is tabled for the notation of the Board on a quarterly basis. The Board is satisfied that the external directorships of the Board members have not impaired their ability to devote sufficient time in discharging their roles and responsibilities effectively as well as regularly updating and enhancing their knowledge and skills.

Access to appropriate continuing education programmes

During the financial period, the Directors attended various training programmes and seminars organised by the relevant regulatory authorities and professional bodies to broaden their knowledge and to keep abreast with the relevant changes in law, regulations and the business environment. A selection of the training programmes, seminars and workshops attended by the Directors during the financial period are, inter-alia, on areas relating to business environment, corporate governance, capital markets and financial reporting.




Access to appropriate continuing education programmes (continued)

Topic / Organiser Date

Cyber Security AwarenessRoundtable on Financial Reporting Bursa Advocacy Session Enterprise Risk Management - Driving Sustainability and Innovation Corporate Disclosure Policy Under the Listing Requirements and Related Party Transactions Mandatory Accreditation Programme for Directors of Public Listed Companies Malaysian Goods and Services Tax - An Overview for Directors Audit Oversight Board Conversation with Audit Committee Corporate Governance Breakfast Series with Directors - Bringing the Best Out of the BoardroomBoard Chairman Series - Leadership Excellence From the Chairman

9 September 20148 October 20146 November 20148 December 201425 February 20154 to 5 March 201513 March 20157 May 201531 July 20153 September 2015

PRINCIPLE 5: UPHOLD INTEGRITY IN FINANCIAL REPORTING

Compliance with applicable financial reporting standards

In presenting the annual financial statements, annual report and quarterly announcement of results to shareholders, the Board aims to provide a balanced and understandable assessment of the Group’s financial position, performance and pros-pects. The Board is assisted by the Audit Committee to oversee the Group’s financial reporting processes and the quality of its financial reporting.

The Directors are responsible in the preparation of the Annual Audited Financial Statements to give a true and fair view of the state of affairs, results and cash flows of the Company and of the Group at the end of the financial period. In preparing the financial statements, the Directors ensure that suitable accounting policies have been applied consistently, and that reason-able and prudent judgments and estimates have been made. All applicable approved accounting standards and provisions of the Companies Act, 1965 have been complied with.

Policies and procedures to assess the suitability and independence of external auditors

The Board maintains, via the Audit Committee, an active, transparent and professional relationship with its Auditors. The role of the Audit Committee in relation to the Independent Auditors is disclosed in the Audit Committee Report set out on pages 16 to 20 of the Annual Report.

PRINCIPLE 6: RECOGNISE AND MANAGE RISKS

Framework to manage risks

The Board acknowledges its overall responsibility for ensuring that a sound system of internal control is maintained through-out the Group and the need to review its effectiveness regularly. The Board recognises that risks cannot be totally eliminated and the system of internal controls instituted can only help to minimize and manage risks and provide some assurance that the assets of the Company and of the Group are safeguarded against material loss and unauthorised use and that the finan-cial statements are not materially misstated. The Statement on Risk Management and Internal Control set out at pages 21 to 23 of this Annual Report provides an overview on the state of internal controls within the Group.

Establishment of an internal audit function reporting directly to the Audit Committee

The Group’s Internal Audit function has been outsourced to an external consultant, Axcelasia Columbus Sdn. Bhd. (formerly known as Columbus Advisory Sdn. Bhd.), which reports directly to the Audit Committee. The Internal Audit function currently reviews and appraises the risk management and internal control processes of the Group. The Statement on Risk Manage-ment and Internal Control set out on page 21 to 23 of this Annual Report provides an overview of the Group’s approach to ensuring the effectiveness of the risk management and internal control processes within the Group.

Internal Policies To Promote Governance

In addition to the Financial Authority Limits / Limits of Authority which set pre-defined limits on the authority levels of each member of Management up to the Executive Chairman / Vice-Chairman, the Group also adheres to several other sets of policies to ensure the governance structure remains robust.

The Group is committed to high standards of honesty, openness, and accountability. An important aspect of accountability and transparency is a mechanism to enable staff and other members of the Group to voice concerns in a responsible and effective manner. It is a fundamental term of every contract of employment that an employee will faithfully serve his or her employer and not disclose confidential information about the employers’ affairs. Nevertheless, where an individual discovers information which he / she believes shows serious malpractice or wrongdoing within the organisation then this information should be disclosed internally without fear of reprisal.



Internal Policies To Promote Governance (continued)

As such, the Group has introduced and endorsed a Whistle-Blowing Policy (“Policy”) by introducing a safe and acceptable platform for employees to channel concerns about illegal, unethical or improper business conduct affecting the Company and about business improvement opportunities as to ensure that no member of staff should feel at a disadvantage in raising legitimate concerns.

The Policy allows the Management to take appropriate preventive and corrective actions without the negative effects that come with public disclosure, such as loss of image or reputation, financial distress, loss of investor confidence or drop in value of share prices. Through this policy, employees are encouraged to discreetly and anonymously disclose concerns about illegal, unethical or improper business conduct which otherwise may not be easily detected through normal process or transaction.

PRINCIPLE 7: ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

Existence of appropriate corporate disclosure policies and procedures

The Board acknowledges the importance of ensuring that it has in place appropriate corporate disclosure policies and procedures which leverage on information technology as recommended by the Code. The Company currently observes and complies with the disclosure requirements as set out in Bursa Malaysia’s Main Market Listing Requirements, guided by Bursa’s Corporate Disclosure Guide. The Board has also approved and adopted a Corporate Disclosure Policy which outlines the Group’s approach towards the determination and dissemination of material information, the circumstances under which the confidentiality of information will be maintained, response to market rumours and restrictions on insider trading. This Policy also provides guidance and structure in disseminating corporate information to, and in dealing with, investors, analysts, media and the investing public.

Leverage on information technology for effective dissemination of information

The Company has established a website at http://www.silk.my from which investors and shareholders can access for information relating to the Company, its businesses and periodic performance reports.

PRINCIPLE 8: STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS

Promote effective communication and proactive engagements with shareholders

The Board values constant dialogue and is committed to clear communication with its stakeholders. In this respect, the Company encourages active investor relations programmes, discussions and dialogues with fund managers, financial analysts and shareholders to convey information about the Company and the Group’s performance, corporate strategy and other matters affecting shareholders’ interests.

While the Group endeavours to provide as much information as possible to its shareholders and stakeholders, it is mindful of the legal and regulatory framework governing the release of material and price-sensitive information.

Encouraging shareholder participation at general meetings

The annual general meeting of the Company provides the principal forum for dialogue and interaction between the Board and the shareholders. The participation of shareholders, both individual and institutional, at general meetings on clarifications of pertinent and relevant information is encouraged.

Encouraging poll voting

The Board is cognisant of the move to encourage more voting by poll. As it stands, resolutions are generally passed by show of hands unless otherwise required by law. The Board will encourage voting by poll by indicating that shareholders can demand for it at commencement of the annual general meeting.

COMPLIANCE STATEMENT

The Board recognizes and views that Corporate Governance is an on-going process and is of the view that the Company has substantially complied with the recommendations of the Code and will take appropriate steps towards embracing the Principles and Recommendations under the Code at a pace and time frame consistent with the size, priority and dynamics of the Group.

This statement is made in accordance with a resolution of the Board of Directors dated 31 March 2016.

DATO’ MOHD AZLAN HASHIMExecutive Chairman


FORMATION

The Audit Committee was formed by the Board of Directors at its meeting on 16 August 2002.

The objective of the Audit Committee is to assist the Board of Directors in fulfilling its fiduciary responsibilities relating to internal controls, financial and accounting records and policies as well as financial reporting practices of the Company and its subsidiaries (“the Group”).

COMPOSITION

The members of the Audit Committee during the period were as follows:

1. Tai Keat Chai – Chairman (Independent Non-Executive Director)

2. Dato’ Harun bin Md Idris (Independent Non-Executive Director)

3. Dato’ Abdul Hamid bin Sh. Mohamed (Independent Non-Executive Director)

4. Nik Abdul Malik bin Nik Mohd Amin (appointed on 1 October 2014)

MEETING AND ATTENDANCE

The Audit Committee held 6 meetings during the financial period and the attendance of the Committee Members was as follows: Number of Meetings Name of Committee Member Attended

Tai Keat Chai 6/6Dato’ Harun bin Md Idris 5/6Dato’ Abdul Hamid bin Sh. Mohamed 6/6Nik Abdul Malik bin Nik Mohd Amin (appointed on 1 October 2014) 5/5

The Company Secretaries, the Internal Auditors and the Chief Financial Officer were present at all meetings. At two of the meetings, the Independent Auditors were present.

TERMS OF REFERENCE

1. Membership

1.1 The Committee shall be appointed by the Board of Directors from amongst the Directors of the Company and shall consist of not less than 3 members.

1.2 The majority of the members including the Chairman of the Committee shall be Independent Directors as defined in Chapter 15 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”).

1.3 The Committee shall include at least 1 person:(a) who is a member of the Malaysian Institute of Accountants; or (b) who must have at least 3 years working experience and:-

(i) have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967; or(ii) is a member of one of the Associations specified in Part II of the 1st Schedule of the Accountants Act,

1967; or(c) who must have at least 3 years post qualification experience in accounting or finance and:-

(i) has a degree/masters/doctorate in accounting or finance; or(ii) is a member of one of the professional accountancy organisations which has been admitted as a full

member of the International Federation of Accountants; or(d) who must have at least 7 years experience being a chief financial officer of a corporation or having the

function of being primarily responsible for the management of the financial affairs of a corporation.

AUDIT COMMITTEE REPORT


1. Membership (continued)

1.4 No Alternate Director shall be appointed as a member of the Committee.

1.5 The members of the Committee shall elect a Chairman from amongst their number.

1.6 If a member of the Committee resigns, dies or for any reason ceases to be a member with the result that the number of members is reduced below 3, the Board shall, within 3 months appoint such number of new members as may be required to make up the minimum of 3 members.

1.7 The terms of office and performance of the Committee and each of its members shall be reviewed by the Board no less than once every 3 years. However, the appointment terminates when a member ceases to be a Director.

1.8 Each member of the Committee is entitled to one (1) vote in deciding the matters deliberated at the meeting. The decision that gains the majority votes shall be the decision of the Committee.

1.9 Chairman’s casting vote In the event of an equality of votes, the Chairman of the Committee shall be entitled to a second or casting vote.

2. Meetings

2.1 The quorum for a Committee Meeting shall be at least 2 members, who must be Independent Directors.

2.2 The Committee shall meet at least 4 times a year and such additional meetings as the Chairman shall decide.

2.3 Notwithstanding paragraph 2.2 above, upon the request of any member of the Committee, non-member Directors, the Internal or Independent Auditors, the Chairman shall convene a meeting of the Committee to consider the matters brought to its attention.

2.4 Members’ Circular ResolutionA Resolution in writing signed by all members shall be effectual as if it had been passed at a meeting of the Committee.

All such resolutions shall be described as “Members’ Circular Resolutions” and shall be forwarded or otherwise delivered to the Company Secretaries without delay and shall be recorded by the Company Secretaries in the Minutes Book. Any such resolution may consist of several documents in the like form, each signed by one (1) or more members.

The expressions “in writing” or “signed” include approval by legible confirmed transmission by facsimile, telex, cable, telegram or other forms of electronic communications.

2.5 Participation at Committee Meeting by way of electronic meansMembers may participate in a meeting of the Committee by means of a conference telephone or similar electronic tele-communicating equipment by means of which all persons participating in the meeting can hear each other and participate throughout the duration of the communication between the members and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting.

2.6 The Independent Auditors have the right to appear and be heard at any meeting of the Committee and shall appear before the Committee when required to do so.

2.7 The non-member Executive Directors and employees of the Company and of the Group may normally attend the meetings to assist in its deliberations and resolutions of matters raised. However, at least twice a year, the Committee shall meet with the Independent Auditors without the presence of Management.

2.8 The Internal Auditors shall be in attendance at all meetings to present and discuss the audit reports and other related matters as well as the recommendations relating thereto and to follow-up on all relevant decisions made.

2.9 The Company Secretaries shall act as Secretaries of the Committee and shall be responsible, with the concurrence of the Chairman, for drawing up and circulating the agenda and the notice of meetings together with the supporting explanatory documentation to members prior to each meeting.

2.10 The Secretaries of the Committee shall be entrusted to record all proceedings and minutes of all meetings of the Committee.

2.11 In addition to the availability of detailed minutes of the Committee Meetings to all Board members, the Committee at each Board Meeting will report a summary of significant matters and resolutions.



3. Rights and Authority

The Committee is authorised to:-

3.1 Investigate any matter within its terms of reference.

3.2 Have adequate resources required to perform its duties.

3.3 Have full and unrestricted access to information, records and documents relevant to its activities.

3.4 Have direct communication channels with the Independent and Internal Auditors.

3.5 Engage, consult and obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise it considers necessary.

4. Functions and Duties

4.1 To review and recommend for the Board’s approval, the Internal Audit Charter which defines the independent purpose, authority, scope and responsibility of the internal audit function in the Company and the Group.

4.2 To review the following and report to the Board:-

(a) With the Independent Auditors:-

(i) the audit plan and audit report and the extent of assistance rendered by employees of the Group;

(ii) the audit fees and on matters concerning their suitability for nomination, appointment and re-appointment and the underlying reasons for resignation or dismissal as Auditors;

(iii) the management letter and management’s response; and

(iv) issues and reservations arising from audits.

(b) With the Internal Auditors:-

(i) the adequacy and relevance of the scope, functions and resources of the Internal Auditors and the necessary authority to carry out its work;

(ii) the results of internal audit assessment including recommendations and actions taken;

(iii) the extent of cooperation and assistance rendered by employees of the Group; and

(iv) the appraisal of the performance of the internal audit function including that of the senior staff and any matter concerning their appointment and termination.

(c) The quarterly results and year-end financial statements prior to the approval by the Board, focusing particularly on:-

(i) changes and implementation of major accounting policies and practices;

(ii) significant and unusual issues;

(iii) going concern assumption; and

(iv) compliance with accounting standards, regulatory and other legal requirements.

(d) The major findings of investigations and management response.

(e) The propriety of any related party transactions and conflict of interest situations that may arise within the Company or the Group including any transactions, procedures or course of conduct that may raise questions on management’s integrity.

4.3 To report any breaches of the Main Market Listing Requirements which have not been satisfactorily resolved to Bursa Securities.



4. Functions and Duties (continued)

4.4 To prepare the Audit Committee Report for inclusion in the Company’s Annual Report covering:-

(a) the composition of the Committee including the name and designation;(b) the terms of reference of the Committee;(c) the number of meetings held and details of attendance of each member;(d) a summary of the activities of the Committee in the discharge of its functions and duties; and(e) a summary of the activities of the internal audit function.

4.5 To review the following for publication in the Company’s Annual Report:-

(a) the disclosure statement of the Board on:-

(i) the Company’s applications of the principles set out in Part I of the Malaysian Code on Corporate Governance; and

(ii) the extent of compliance with the best practices set out in Part II of the Malaysian Code on Corporate Governance, specifying reasons for any area of non-compliance and the alternative measures adopted in such areas.

(b) the statement on the Board’s responsibility for the preparation of the annual audited financial statements.

(c) the disclosure statement on the state of the risk management and internal control system of the Company and of the Group.

(d) other disclosure forming the contents of the annual report spelt out in Part A of Appendix 9C of the Main Market Listing Requirements of Bursa Securities.

The above functions and duties are in addition to such other functions as may be agreed to from time to time by the Committee and the Board.

5. Internal Audit Function

5.1 The Company has appointed Messrs. Axcelasia Columbus Sdn. Bhd. (formerly known as Columbus Advisory Sdn. Bhd.) as the Internal Auditor to undertake the Group’s internal audit function.

5.2 The Internal Auditor shall have unrestricted access to the Committee Members and report to the Committee whose scope of responsibility includes overseeing the development and the establishment of the internal audit function.

5.3 In respect of routine administrative matters, the Internal Auditor shall report to the Executive Chairman or his designate.

5.4 The total costs incurred for the internal audit function of the Group for the financial period ended 31 December 2015 was RM75,000.

ACTIVITIES OF THE COMMITTEE FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2015

The summary of activities of the Committee in the discharge of its duties and responsibilities is as follows:-

(a) Reviewed the adequacy and relevance of the scope, functions, resources, risk based internal audit plan and results of the internal audit assessment with the Internal Auditor.

(b) Reviewed the audit activities carried out by the Internal Auditor and the audit reports to ensure corrective actions were taken in addressing the internal control gaps reported.

(c) Reviewed with the Independent Auditors, the audit plan of the Company and of the Group for the period (inclusive of risk and audit approach, audit fees and issues) prior to the commencement of the annual statutory audit.

(d) Reviewed the financial statements, the audit report, issues and reservations arising from the statutory audit with the Independent Auditors.

(e) Reviewed and discussed the management accounts with Management.

(f) Reviewed all recurrent related party transactions entered into by the Company and the Group at the Committee’s quarterly meetings to ensure that the transactions entered into were at arm’s length basis and on normal commercial terms.




ACTIVITIES OF THE COMMITTEE FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2015 (CONTINUED)

(g) Discussed the implications of any latest changes and pronouncements on the Company and the Group issued by the statutory and regulatory bodies.

(h) Reported to the Board on significant issues and concerns discussed during the Committee’s meetings together with applicable recommendations. Minutes of meetings were tabled, discussed and noted by all Board members.

INTERNAL AUDIT ACTIVITIES REPORT FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2015

The summary of activities of the Internal Auditor is as follows:-

(a) Prepared the annual audit plan for approval by the Audit Committee.

(b) Performed risk based audits on strategic business units of the Company and of the Group, which covered assessment on adequacy and integrity of the internal control systems for the management and key operating processes.

(c) Performed follow-up on status of management’s implementation on internal audit recommendations.

(d) Issued audit reports to the Committee and management by identifying weaknesses and improvement opportunities as well as highlighting recommendations for improvements.

(e) Reported to the Committee on results of audit assessment on the adequacy and appropriateness of internal controls (including compliance with the procedures established) on the management and key operating processes of strategic management, toll operations, highway maintenance, traffic safety & security, vessel operations, health, safety & environmental management and human capital development.

(f) Reviewed the appropriateness of the disclosure statements in regard to compliance with the Malaysian Code on Corporate Governance and the state of internal controls as well as the Audit Committee Report.

(g) Attended Committee meetings to table and discuss the audit reports and followed up on matters raised.


INTRODUCTION

The Malaysian Code on Corporate Governance 2012 stipulates that the Board of Directors of listed companies shall maintain a sound system of internal control to safeguard shareholders’ investment and the Group’s assets. Set out below is the Group’s Statement on Risk Management and Internal Control (“Statement”), made in compliance with Paragraph 15.26(b)and Practice Note 9 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers.

THE BOARD’S RESPONSIBILITY

The Board places importance on, and is committed to maintaining effective risk management practices and a sound system of internal control within the Group to ensure good corporate governance. The Board affirms its responsibility for reviewing the adequacy and integrity of the Group’s system of internal control and management information systems, including systems for compliance with applicable laws, rules, directives, guidelines and risk management practices.

The Board, particularly at the operating company level, sets the budgets for the coming year and clear, pre-defined Financial Authority Limits / Limits of Authority on Management to ensure major decisions, specifically with respect to investments or capital expenditures, are only undertaken after careful consideration by the Board and its various Board Committees, where appropriate.

In addition to this, the Board also undertakes greater scrutiny of key decisions through its Board Risk Management Committee and Board Infrastructure Committee. The former is tasked with thoroughly reviewing major investments being proposed and/or major commitments being considered, fine tuning them when necessary before making final recommendations to the Board. The latter on the other hand focuses on reviewing capital expenditure proposals and commitments at the Highway Division, while at the same time monitoring the Division’s commitments under its Concession Agreement.

Notwithstanding this, as with any internal control system, the Group’s system of internal control is designed to manage rather than to eliminate the risk of failure to achieve business objectives. It follows, therefore, that the system of internal control can only provide reasonable but not absolute assurance against material misstatement or loss.

The Group has in place an on-going process of identifying, evaluating, monitoring and managing the key risks affecting the achievement of its business objectives throughout the period.

ASSURANCE MECHANISM

The Audit Committee (“AC”) is tasked by the Board with the duty of reviewing and monitoring the effectiveness of the Group’s system of internal control. In carrying out its responsibilities, the Group has appointed Messrs. Axcelasia Columbus Sdn. Bhd. (formerly known as Columbus Advisory Sdn. Bhd. / “ACSB”) to carry out internal audits based on a risk-based audit plan approved by the AC. Based on these audits, the AC is provided by ACSB with periodic reports highlighting observations, recommendations and management action plans to improve the system of internal control.

In addition, the AC also reviews and deliberates on any matters relating to internal control highlighted by the independent auditors in the course of their statutory audit of the financial statements of the Group. There were no significant internal control weaknesses identified during the financial period.

The Report of the AC is set out on pages 16 to 20 of the Annual Report.

THE GROUP’S SYSTEM OF INTERNAL CONTROL

Monitoring Mechanisms and Management Style

Scheduled periodic meetings of the Board, Board Committees and Management at the Holding as well as operating company levels, represent the main platform by which the Group’s performance and conduct is monitored.

In addition to separate periodic Management meetings at the Divisional level, the Company also undertakes periodic Management meetings at the Group level to ensure the senior management of the entire Group is aware of the key activities taking place within the Group.

Major business proposals and budgets for the coming year are generally recommended by the respective Divisional Management and evaluated and fine-tuned by the appropriate Board Committees before being presented for consideration by the Board of Directors.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL



THE GROUP’S SYSTEM OF INTERNAL CONTROL (CONTINUED)

Monitoring Mechanisms and Management Style (continued)

In the absence of a Group CEO, the daily running of the business is entrusted to the respective Divisional Chief Operating Officers and their management teams. The Divisional Chief Operating Officers report directly to the Executive Directors at each operating company (i.e. Executive Chairman at Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd and the Executive Vice-Chairman at Jasa Merin (Malaysia) Sdn Bhd) and carry out their duties under a pre-defined Financial Authority Limits / Limits of Authority set by the respective Boards. These Limits of Authority are reviewed from time to time to ensure continued relevance, effectiveness and efficiency.

Under the purview of the Chief Operating Officers, the heads of department are empowered with the responsibility of managing their respective operations. The Chief Operating Officers communicate the Board’s expectations to management at management meetings as well as through attendance at various operations meetings. At these meetings, operational and financial risks are discussed and dealt with.

The Board is responsible for setting the business direction and overseeing the conduct of the Group’s operations through various management reporting mechanisms. Through these mechanisms, the Board is informed of all major control issues pertaining to internal controls, regulatory compliance and risk taking.

Enterprise Risk Management Framework

In dealing with its stewardship responsibilities, the Board recognises that effective risk management is part of good business management practice. The Board acknowledges that all areas of the Group’s activities involve some degree of risk, and is committed to ensuring that the Group has an effective risk management framework which will allow the Group to be able to identify, evaluate and manage risks that affect the achievement of the Group’s business objectives within defined risk parameters in a timely and effective manner.

The risk management framework has been embedded in the Company’s management systems. The Management assists the Board in implementing the process of identifying, evaluating and managing significant risks applicable to their respective areas of business and in formulating suitable internal controls to mitigate and control these risks.

The key elements of the Enterprise Risk Management (“ERM”) activities include:• Establishing ERM framework• Risk assessment process• Risk action implementation process• Risk action monitoring process• Continuous ERM monitoring and communication

The Group has completed a comprehensive risk assessment process whereby significant risks are summarised into a risk map and presented to the Audit Committee for its consideration. Risk registers have been developed for each of the risks identified. Having identified those risks that can significantly affect the business and operations, dedicated risk owners were appointed (from the management team) to work on the development of key risk action plans required (as well as the implementation of such action plans) together with a group of risk co-owners across the departments. New developments in businesses and operations are subject to the risk assessment process as the risk profile of the business changes.

Key Elements of the Group’s System of Internal Control

The current system of internal control in the Group has within it, the following key elements: • Group vision, mission and corporate philosophy and strategic direction, which are communicated to employees.• A Board which retains control over the Group with appropriate management reporting mechanisms which enable the

Board to review the Group’s progress.• Board approved annual budgets and management plans.• Management meetings involving discussions on operational issues at subsidiary level.• Comprehensive and clearly documented standard operating policies and procedures manuals that provide guidelines

and authority limits over various operating, financial and human resource matters, which are subject to regular review for improvement.

• The use of the intranet as an effective means of communication and knowledge sharing.• Communication of policies and guidelines in relation to human resource matters to all employees through a staff

handbook which is also available on the intranet. • A systematic performance appraisal system for all levels of staff.• Relevant training provided to personnel across all functions to maintain a high level of competency and capability.



THE GROUP’S SYSTEM OF INTERNAL CONTROL (CONTINUED)

Internal Policies To Promote Governance

In addition to the Financial Authority Limits / Limits of Authority which set pre-defined limits on the authority levels of each member of Management up to the Executive Chairman / Vice-Chairman, the Group also adheres to several other sets of policies to ensure the governance structure remains robust.

The Group is committed to high standards of honesty, openness, and accountability. An important aspect of accountability and transparency is a mechanism to enable staff and other members of the Group to voice concerns in a responsible and effective manner. It is a fundamental term of every contract of employment that an employee will faithfully serve his or her employer and not disclose confidential information about the employers’ affairs. Nevertheless, where an individual discovers information which they believe shows serious malpractice or wrongdoing within the organisation then this information should be disclosed internally without fear of reprisal.

As such, the Group has introduced and endorsed a Whistle-Blowing Policy (“Policy”) by introducing a safe and acceptable platform for employees to channel concerns about illegal, unethical or improper business conduct affecting the company and about business improvement opportunities as to ensure that no member of staff should feel at a disadvantage in raising legitimate concerns.

The Policy allows the Management to take appropriate preventive and corrective actions without the negative effects that come with public disclosure, such as loss of image or reputation, financial distress, loss of investor confidence or drop in value of share prices. Through this policy, employees are encouraged to discreetly and anonymously disclose concerns about illegal, unethical or improper business conduct which otherwise may not be easily detected through normal process or transaction.

THE BOARD’S COMMITMENT

The Board recognises that the Group operates in a dynamic business environment in which the internal control system must be responsive in order to be able to support its business objectives. To this end, the Board remains committed towards maintaining a sound system of internal control and believes that a balanced achievement of its business objectives and operational efficiency can be attained.

ADEQUACY AND EFFECTIVENESS OF RISK MANAGEMENT AND INTERNAL CONTROL

The Executive Directors of the operating subsidiaries and the Chief Financial Officer have provided the Board with assurance that the Group risk management and internal control systems are operating adequately and effectively, in all material aspects, to ensure achievement of corporate objectives.

Taking into consideration the assurance from the management team, the Board is of the view that the system of risk management and internal controls in place for the period under review is sound and adequate to safeguard the Group’s assets.

REVIEW OF THE STATEMENT BY INDEPENDENT AUDITORS

The external auditors have reviewed this Statement on Risk Management and Internal Control pursuant to the scope set out in Recommended Practice Guide (“RPG”) 5 (Revised 2015), Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report issued by the Malaysian Institute of Ac-countants (“MIA”) for inclusion in the annual report of the Group for the period ended 31 December 2015, and reported to the Board that nothing has come to their attention that cause them to believe that the statement intended to be included in the annual report of the Group, in all material respects:

(a) has not been prepared in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers, or

(b) is factually inaccurate.

RPG 5 (Revised 2015) does not require the external auditors to consider whether the Directors’ Statement on Risk Man-agement and Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control system including the assessment and opinion by the Board of Directors and management thereon. The auditors are also not required to consider whether the processes described to deal with material internal control aspects of any significant problems disclosed in the annual report will, in fact, remedy the problems.

This statement is made in accordance with the resolution of the Board of Directors dated 31 March 2016.


The Group is committed to meeting its aspirations of improving the long-term shareholder value of the Company. In meeting this objective, it will do so via policies and arrangements that recognise its social, economic and environmental responsibilities.

In giving effect to this, the Group is committed to:

• Setting high standards and expectations for its employees to act ethically, professionally and with integrity whenever dealing with external stakeholders;

• Support collaborations with stakeholders, particularly those that are most affected by the Group’s business activities, where it is feasible to do so; and

• Pursuing a culture of delivering value for the funds invested in its activities whilst effectively managing risks to the organisation and its stakeholders.

The Group is also committed to providing high standards of safety in the working conditions for its employees and to the continual improvement of its safety performance. During the financial year under review, the Group’s Oil & Gas Support Services Division, via Jasa Merin, conducted workplace and community safety campaigns. The Group is pleased to continue to ensure safety remains a priority in how it operates.

The well-being of the communities in which the Group operates is also important to its long-term development and success. It is with this in mind that during the financial period under review, the Group undertook numerous steps to further strengthen ties with its immediate community by contributing to various local community activities and infrastructure. Some of these activities during the financial period include:

• Organising the Group’s third blood donation campaign at Plaza Tol Sg. Balak, Kajang with the co-operation of Pusat Darah Negara, continuing on the campaign held previously,

• Participating in community service activities both within the immediate area of where the Group operates as well as to assist communities that may not be adjacent to the Group’s area of operations but in need of assistance. For the former, the Group held a “gotong royong” at the Rumah Kebajikan Pertubuhan Penyayang Hani, Taman Villa Bangi while for the latter, the Group participated and contributed towards the flood relief efforts in Kampung Boh in Temerloh, Pahang.

• The implementation of re-cycling initiatives at both Divisions beginning in 2015 as a means whereby the Group can contribute towards efforts to promote more conscientious attitude towards the environment amongst Group staff and their families.

• Contribution of fire extinguishers to Sekolah Menengah Kebangsaan Agama Maahad Hamidiah.• The provision of financial assistance to several needy families, mosques and suraus near the areas where the Group

operates,• The hosting of Raya celebrations for orphanages situated in and around Kajang.

It is the Group’s aspiration for initiatives such as these to continue well into the future.

Sustainability

Today, a company is judged by more than just its financial performance. Increasingly, it is judged based on the impact it has on society. As such, businesses with the necessary resources often have a clear and comprehensive policy on sustainability and a unit to monitor adherence to it as well as publicly report back on its adherence to the stated policies.

The Group at this moment in time neither has a single comprehensive written policy with respect to sustainability nor a dedicated unit to oversee its sustainability practices. However, many aspects of this over-arching policy is reflected in our various more specific policies and initiatives, such as:

• A Code of Conduct at both Divisions incorporated into the respective Staff Handbooks to provide guidance and best practices to staff on ethical behaviour.

• The Group has also introduced a Group-wide Whistle-Blowing Policy to be implemented at both Divisions that introduces a safe and acceptable platform for employees to channel concerns about illegal, unethical or improper business conduct affecting the company and about business improvement opportunities as to ensure that no member of staff should feel at a disadvantage in raising legitimate concern.

• The Highway Division’s Training & Development Policy & Guidelines and the Oil & Gas Support Services Division Training Guidelines, which seeks to continually improve the skill-sets of both Divisions’ staff by investing time and financial resources towards their development;

• The Highway Division’s maiden Auxiliary Police training program which will convert the Division’s Ronda personnel into proper auxiliary police to better serve road users on the Kajang-SILK Highway;

STATEMENT OF CORPORATE SOCIAL RESPONSIBILITY


Sustainability (continued)

• Strict adherence to environmental protection laws and regulations, particularly by the Group’s Oil & Gas Support Services Division which has incorporated many of these into its own set of policy dealing with the environment;

• Compliance to health and safety rules applicable to the industries the Group operates in as well as periodic testing of the staff’s readiness to emergencies and safety incidences;

• The recycling programs initiated at both Divisions as a means whereby the Group can contribute towards efforts to promote more conscientious attitude towards the environment amongst Group staff and their families;

• The periodic gotong-royong activities and social outreach initiatives held with the community in the area it operates in to support the communities affected by our activities and strengthen understanding between the two.

In addition, sustainability is a consideration in many of our business and operational decisions. It is a significant part of our business approach and the Board provides feedback and guidance to continually improve the Group’s sustainability initiatives.

STATEMENT OF CORPORATE SOCIAL RESPONSIBILITY

FINANCIALCoNteNts27 Directors’ Report

31 Statement by Directors

31 Statutory Declaration

32 Independent Auditors’ Report

34 Statements of Financial Position

36 Statements of Profit or Loss and Other Comprehensive Income

37 Statements of Changes in Equity

40 Statements of Cash Flows

42 Notes to the Financial Statements

102 Supplementary Information on the Breakdown

of Realised and Unrealised Profits


The Directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial period ended 31 December 2015.

Principal activities

The Company is principally engaged in investment holding, whilst the principal activities of the subsidiaries are as stated in Note 4 to the financial statements. There has been no significant change in the nature of these activities during the financial period.

Change of financial year end

The Company has changed its financial year end from 31 July to 31 December. Consequently, the current financial statements, being the Group and the Company’s first financial statements under the new financial year, are for a period of 17 months from 1 August 2014 to 31 December 2015. The comparative figures are for the previous 12-month period from 1 August 2013 to 31 July 2014.

Results GROUP COMPANY RM’000 RM’000(Loss)/Profit for the period attributable to:Owners of the Company (29,671) 9,757Non-controlling interests 3,036 - (26,635) 9,757

Reserves and provisions

There were no material transfers to or from reserves and provisions during the period under review except as disclosed in the financial statements.

Dividend

There were no dividend proposed, declared or paid by the Company since the end of the previous financial year and the Directors do not recommend any dividend to be paid for the period under review.

Directors of the Company

Directors who served since the date of the last report are:

Dato’ Mohd Azlan HashimTan Sri Datuk Seri Razman M HashimDato’ Harun bin Md IdrisDato’ Abdul Hamid bin Sh MohamedDato’ Hj Razali bin Mohd Yusof (appointed on 1 January 2015)Tai Keat ChaiNik Abdul Malik bin Nik Mohd AminJohan Zainuddin bin Dzulkifli (resigned on 12 March 2015)

DIRECTORS’ REPORT


Directors’ interests in shares

The interests and deemed interests in the ordinary shares of the Company and of its related corporations (other than wholly-owned subsidiaries) of those who were Directors at period end as recorded in the Register of Directors’ Shareholdings are as follows:

Number of ordinary shares of RM0.25 each At 1.8.2014/ Date of At appointment Acquired Sold 31.12.2015

Direct interestDato’ Abdul Hamid bin Sh Mohamed 1,000,000 - - 1,000,000Nik Abdul Malik bin Nik Mohd Amin 2,400,000 - - 2,400,000

Deemed interestDato’ Mohd Azlan Hashim 99,217,893 81,236,333 (20,000,000) 160,454,226Dato’ Hj Razali bin Mohd Yusof 30,543,800 1,456,200 - 32,000,000Tai Keat Chai 1,000,000 - - 1,000,000

None of the other Directors holding office at 31 December 2015 had any interest in the ordinary shares of the Company and of its related corporations during the financial period.

Directors’ benefits

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements or the fixed salary of a full time employee of the Company or of related corporations) 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 period which had the object 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.

Issue of shares and debentures

During the financial period, the Company increased its issued and paid-up ordinary share capital from RM129,019,786 to RM175,383,390 (31.7.2014: RM108,333,119 to RM129,019,786) by way of the conversion of 39,950,000 Redeemable Convertible Unsecured Loan Stocks and dividends payable to 185,454,417 ordinary shares of RM0.25 each.

Options granted over unissued shares

No options were granted to any person to take up unissued shares of the Company during the financial period except for the issuance of 5-year Redeemable Cumulative Unsecured Loan Stocks (“RCULS”) of RM43,750,000 in nominal value of RM1.00 on 14 October 2009 at a consideration of RM43,750,000. Each RCULS holder was entitled to exercise its conversion rights to convert RCULS into four new ordinary shares of RM0.25 each of the Company. The salient features of the RCULS are disclosed in Note 14 to the financial statements. On 13 October 2014, all the RCULS were converted into ordinary shares.

DIRECTORS’ REPORT


Options granted over unissued shares (continued)

The options (offered on 14 October 2009 pursuant to the issuance of RCULS) to take up unissued ordinary shares of RM0.25 each and exercise prices are as follows:

Number of options over ordinary shares of RM0.25 each Name Exercise price At 1.8.2014 Granted Converted At 31.12.2015

Abdul Rahman bin Ali RM1.00 97,585,468 596,283 (98,181,751) -Bijak Permai Sdn Bhd RM1.00 43,371,312 264,021 (43,635,333) -Johan Zainuddin bin Dzulkifli RM1.00 32,528,474 198,776 (32,727,250) -Temuras Jaya Sdn Bhd RM1.00 10,842,814 66,269 (10,909,083) - 184,328,068 1,125,349 (185,453,417) -

Employee trust shares

On 10 November 2014, Jasa Merin Employee Trust, a trust setup by the subsidiary, Jasa Merin (Malaysia) Sdn. Bhd. granted 31,998,983 ordinary shares of the Company to the eligible employees as disclosed in Note 15 to the financial statements.

Other statutory information

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that:

i) all known bad debts have been written off and adequate provision made for doubtful debts, and

ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:

i) that would render the amount written off for bad debts or the amount of the provision for doubtful debts in the Group and in the Company inadequate to any substantial extent, or

ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, or

iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or

iv) not otherwise dealt with in this report or the financial statements that would render any amount stated in the financial statements of the Group and of the Company misleading.

At the date of this report, there does not exist:

i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial period and which secures the liabilities of any other person, or

ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial period.

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial period which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

DIRECTORS’ REPORT


Other statutory information (continued)

In the opinion of the Directors, except for those disclosed in Note 23 to the financial statements, the financial performance of the Group and of the Company for the financial period ended 31 December 2015 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial period and the date of this report.

Auditors

The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

…………………………………Dato’ Mohd Azlan Hashim

………………………………………………Tan Sri Datuk Seri Razman M Hashim

Kuala Lumpur,

Date: 31 March 2016

DIRECTORS’ REPORT


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

In the opinion of the Directors, the financial statements set out on pages 34 to 101 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 2015 and of their financialperformance and cash flows for the period then ended.

In the opinion of the Directors, the information set out in Note 34 on page 102 to the financial statements have been compiled 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, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

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

............................................. Dato’ Mohd Azlan Hashim

.................................................................Tan Sri Datuk Seri Razman M Hashim

Kuala Lumpur,

Date: 31 March 2016

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

I, Jamaludin Mohd Nor, the officer primarily responsible for the financial management of SILK Holdings Berhad, do solemnly and sincerely declare that the financial statements set out on pages 34 to 102 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, 1960.

Subscribed and solemnly declared by the abovenamed in Kuala Lumpur on 31 March 2016.

..................................... Jamaludin Mohd Nor

Before me:

D. Selvaraj (No. W320)Commissioner of Oaths

STATEMENT BY DIRECTORS/ STATUTORY DECLARATION


Report on the Financial Statements

We have audited the financial statements of SILK Holdings Berhad, which comprise the statements of financial position as at 31 December 2015 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows of the Group and of the Company for the period then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 34 to 101.

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 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 December 2015 and of their financial performance and cash flows for the period then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

Emphasis of matter

Without qualifying our opinion, we draw attention to Note 1(c) to the financial statements. The Group incurred a net loss of approximately RM26.6 million for the period ended 31 December 2015 and as at that date, the Group’s current liabilities exceeded its current assets by RM123.7 million, where in the next twelve months there are scheduled repayment of secured term loans of RM141 million, as disclosed in Note 16 to the financial statements. These conditions indicate the existence of material uncertainties which may cast significant doubt that the Group will be able to operate as a going concern.

The going concern assumption that is applied in the preparation of these financial statements is dependent upon the Group’s ability to generate adequate cash flows from its operations. The Group is also in the process of selling certain vessels and obtaining additional long term financing, if successful, will also enable the Group and the Company to generate sufficient cash flows to meet their obligations and improve their cash flows. The financial statements of the Group and the Company do not include any adjustments relating to the amounts and classification of assets and liabilities that may be necessary in the event that the sale of the vessels and obtaining additional long term financing are not successful and that the Group and Company is unable to continue as going concerns.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OFSILK HOLDINGS BERHAD


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 have been properly kept in accordance with the provisions of the Act.

b) We are satisfied that the accounts 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.

c) The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

Other Reporting Responsibilities

Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The information set out in Note 34 on page 102 to the financial statements has been compiled by the Company as required by the Bursa Malaysia Securities Berhad Listing Requirements and is not required by the Malaysian Financial Reporting Standards or International Financial Reporting Standards. We have extended our audit procedures to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all material respects, 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.

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.

KPMG Muhammad Azman Bin Che Ani Firm Number: AF 0758 Approval Number: 2922/04/16(J)Chartered Accountants Chartered Accountant

Petaling Jaya

Date: 31 March 2016

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OFSILK HOLDINGS BERHAD


STATEMENTS OF FINANCIAL POSITIONAS AT 31 DECEMBER 2015 Group Company 31.12.2015 31.7.2014 31.12.2015 31.7.2014 Note RM’000 RM’000 RM’000 RM’000

AssetsProperty, vessels and equipment 3 1,205,319 1,173,064 115 -Investments in subsidiaries 4 - - 274,647 89,658Concession intangible assets 5 936,372 - - -Goodwill on consolidation 6 13,883 647 - -Deferred tax assets 7 141,498 29 - -Long term receivables 9 7,385 - - -

Total non-current assets 2,304,457 1,173,740 274,762 89,658

Inventories 8 1,214 1,319 - -Trade and other receivables 9 80,229 70,690 15,479 7,381Tax recoverable 43 974 20 -Cash and cash equivalents 10 96,983 60,665 16,823 22,375 178,469 133,648 32,322 29,756

Assets classified as held for sale 11 41,578 1,107,533 - 160,000

Total current assets 220,047 1,241,181 32,322 189,756

Total assets 2,524,504 2,414,921 307,084 279,414

EquityShare capital 12 175,383 129,020 175,383 129,020Share premium 13 87,470 69,679 87,470 69,679Equity component of convertible loan stocks 14 - 34,034 - 34,034Reverse acquisition deficit 13 (92,791) (92,791) - -Capital reserve 13 - - 36,297 36,297Retained earnings 16,741 51,461 7,215 2,507

186,803 191,403 306,365 271,537Employee trust shares 15 - (6,688) - (6,688)Equity attributable to owners of the Company 186,803 184,715 306,365 264,849Non-controlling interests 62,044 58,518 - -

Total equity 248,847 243,233 306,365 264,849


Group Company 31.12.2015 31.7.2014 31.12.2015 31.7.2014 Note RM’000 RM’000 RM’000 RM’000

LiabilitiesDeferred tax liabilities 7 65,231 58,031 - 891Loans and borrowings 16 1,432,010 816,655 - -Ijarah rental payable 19 371,593 - - -Provisions 20 63,119 - - -

Total non-current liabilities 1,931,953 874,686 - 891

Liability component of convertible loan stocks 14 - 6,317 - 6,317Loans and borrowings 16 194,009 162,399 - -Trade and other payables 18 99,897 45,531 719 7,207Ijarah rental payable 19 29,193 - - -Provisions 20 20,506 - - -Taxation 99 230 - 150

343,704 214,477 719 13,674Liabilities classified as held for sale 11 - 1,082,525 - -

Total current liabilities 343,704 1,297,002 719 13,674

Total liabilities 2,275,657 2,171,688 719 14,565

Total equity and liabilities 2,524,504 2,414,921 307,084 279,414

The notes on pages 42 to 101 are an integral part of these financial statements.

STATEMENTS OF FINANCIAL POSITIONAS AT 31 DECEMBER 2015 (continued)


Group Company 1.8.2014 1.8.2013 1.8.2014 1.8.2013 to to to to 31.12.2015 31.7.2014 31.12.2015 31.7.2014 Note RM’000 RM’000 RM’000 RM’000 re-presented

Revenue 21 596,035 364,783 11,815 4,854Direct costs (335,386) (197,838) - -

Gross profit 260,649 166,945 11,815 4,854Other income 1,957 12,028 - 399Administrative expenses (71,367) (28,347) (1,702) (1,207)

Results from operating activities 191,239 150,626 10,113 4,046

Finance income 3,725 2,281 1,031 137Finance costs 22 (215,700) (151,552) (95) (660)

Net finance costs (211,975) (149,271) 936 (523)

(Loss)/Profit before tax 23 (20,736) 1,355 11,049 3,523Tax expense 24 (5,899) 3,369 (1,292) (1,614)(Loss)/Profit net of tax, representing total comprehensive (expense)/income for the period/year (26,635) 4,724 9,757 1,909

(Loss)/Profit and total comprehensive (expense)/income attributable to:

Owners of the Company (29,671) (10,414) 9,757 1,909Non-controlling interests 3,036 15,138 - -(Loss)/Profit and total comprehensive (expense)/income for the period/year (26,635) 4,724 9,757 1,909

Loss per ordinary share (sen) Basic and diluted 25 (4.40) (2.25)


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2015


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STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2015 (continued)

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STATEMENTS OF CASH FLOWS FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2015 Group Company 1.8.2014 1.8.2013 1.8.2014 1.8.2013 to to to to 31.12.2015 31.7.2014 31.12.2015 31.7.2014 RM’000 RM’000 RM’000 RM’000

Cash flows from operating activitiesCollection of revenue 564,914 360,828 4,651 1,920Collection of other income 8,088 5,958 1,004 119

Cash generated from operations 573,002 366,786 5,655 2,039Payment of expenses (198,842) (124,094) (1,608) (1,418)Net tax paid (675) (2,748) (1,486) (2,069)Net cash generated from/ (used in) operating activities 373,485 239,944 2,561 (1,448)

Cash flows from investing activitiesProceeds from sale of property, vessels and equipment 190 44,807 - -Proceeds from sale of non-current assets classified as held for sale - 222 - -Purchase of property, vessels and equipment (Note 3.5) (173,829) (149,647) (153) -Payments for highway development expenditure (18,342) - - -Investment in subsidiaries - - (510) -Payment for heavy repairs - (1,986) - -Advances to subsidiaries - - (7,450) -Decrease/(Increase) in pledged deposits 2,919 (2,264) - -

Net cash used in investing activities (189,062) (108,868) (8,113) -

Cash flows from financing activitiesIssue of ordinary shares - 21,750 - 21,750Proceeds from shares issued to non-controlling interests 490 - - -Drawdown of borrowings 179,719 158,196 - -Repayment of borrowings (227,521) (137,713) - -Payment of finance costs (154,695) (103,407) - -Acquisition of non-controlling interest - (49,463) - -Net cash (used in)/from financing activities (202,007) (110,637) - 21,750


STATEMENTS OF CASH FLOWS FOR THE FINANCIAL PERIOD ENDED 31 DECEMBER 2015 (continued)

Group Company 1.8.2014 1.8.2013 1.8.2014 1.8.2013 to to to to 31.12.2015 31.7.2014 31.12.2015 31.7.2014 Note RM’000 RM’000 RM’000 RM’000

Net (decrease)/increase in cash and cash equivalents (17,584) 20,439 (5,552) 20,302Cash and cash equivalents at beginning of period/year 102,203 81,764 22,375 2,073Cash and cash equivalents at end of period/year (i) 84,619 102,203 16,823 22,375

(i) Cash and cash equivalents

Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial position amounts:


Cash and bank balances 11,340 33,327 23 625Deposits placed with licensed banks 85,643 81,182 16,800 21,750

10 96,983 114,509 16,823 22,375Less: Bank overdrafts 16 (2,977) - - - Pledged deposits (9,387) (12,306) - -

(ii) 84,619 102,203 16,823 22,375

(ii) Reconciliation of cash and cash equivalents at 31 July 2014:

Disposal Continuing group held operations for sale TotalGroup RM’000 RM’000 RM’000

Cash and bank balances 17,032 16,295 33,327Deposits placed with licensed banks 43,633 37,549 81,182

60,665 53,844 114,509Less: Pledged deposits (10,597) (1,709) (12,306)

50,068 52,135 102,203 Note 10



SILK Holdings Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The addresses of the principal place of business and registered office of the Company are as follows:

Principal place of businessPlaza Tol Sungai BalakKM28.3A, Lebuhraya Kajang SILK43000 KajangSelangor Darul Ehsan

Registered officeLevel 22, Axiata TowerNo.9, Jalan Stesen Sentral 5Kuala Lumpur Sentral50470 Kuala Lumpur

The consolidated financial statements of the Company as at and for the financial period ended 31 December 2015 comprise those of the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”). The financial statements of the Company as at and for the period ended 31 December 2015 do not include other entities.

The Company is principally engaged in investment holding, whilst the principal activities of the subsidiaries are as stated in Note 4 to the financial statements. There has been no significant change in the nature of these activities during the financial period.

These financial statements were authorised for issue by the Board of Directors on 31 March 2016.

1. Basis of preparation

(a) Statement of compliance

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

The following are accounting standards, amendments and interpretations of the MFRSs 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 2016 • MFRS 14, Regulatory Deferral Accounts • Amendments to MFRS 5, Non-current Assets Held for Sale and Discontinued Operations (Annual Improvements

2012-2014 Cycle) • Amendments to MFRS 7, Financial Instruments: Disclosures (Annual Improvements 2012-2014 Cycle) • Amendments to MFRS 10, Consolidated Financial Statements, MFRS 12, Disclosure of Interest in Other

Entities and MFRS 128, Investments in Associates and Joint Ventures - Investments Entities: Applying the Consolidation Exception

• Amendments to MFRS 11, Joint Arrangements - Accounting for Acquisitions of Interests in Joint Operations • Amendments to MFRS 101, Presentation of Financial Statements - Disclosure Initiative • AmendmentstoMFRS116,Property,PlantandEquipmentandMFRS138,IntangibleAssets-Clarificationof

Acceptable Methods of Depreciation and Amortisation • Amendments to MFRS 116 Property, Plant and Equipment and MFRS 141, Agriculture - Agriculture: Bearer

Plants • AmendmentstoMFRS119,EmployeeBenefits(AnnualImprovements2012-2014Cycle) • Amendments to MFRS 127, Separate Financial Statements – Equity Method in Separate Financial Statements • Amendments to MFRS 134, Interim Financial Reporting (Annual Improvements 2012-2014 Cycle)

NOTES TO THE FINANCIAL STATEMENTS


1. Basis of preparation (continued)

(a) Statement of compliance (continued)

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2018 • MFRS 9, Financial Instruments (2014) • MFRS 15, Revenue from Contracts with Customers

MFRSs, Interpretations and amendments effective for 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 Group and the Company plans to apply the abovementioned accounting standards, amendments and interpretations:

• from the annual period beginning on 1 January 2016 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2016, except for MFRS 14, Amendments to MFRS 10 and MFRS 12, Amendments to MFRS 116, Property, Plant and Equipment and MFRS 141, Agriculture: Bearer Plants which are not applicable to the Group and the Company; and

• from the annual period beginning on 1 January 2018 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2018.

The Group and the Company are expected to apply the abovementioned pronouncements beginning from the respective dates the pronouncements become effective. The Group and the Company is currently assessing the impact of adopting the above pronouncements.

(b) Change of financial year end

The Group and the Company have changed their financial year end from 31 July to 31 December. Consequently, the current financial statements, being the Group and the Company’s first financial statements under the new financial year, are for a period of 17 months from 1 August 2014 to 31 December 2015. The comparative figures are for the previous 12-month period from 1 August 2013 to 31 July 2014.

(c) Basis of measurement

The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2 to the financial statements, and on the assumption that the Group and the Company are going concerns.

The Group incurred a net loss of approximately RM26.6 million for the period ended 31 December 2015 and as at that date, the Group’s current liabilities exceeded its current assets by RM123.7 million, where in the next twelve months there are scheduled repayment of secured term loans of RM141 million, as disclosed in Note 16 to the financial statements. These conditions indicate the existence of material uncertainties which may cast significant doubt that the Group will be able to operate as a going concern.

The going concern assumption that is applied in the preparation of these financial statements is dependent upon the Group’s ability to generate adequate cash flows from its operations. The Group is also in the process of selling certain vessels and obtaining additional long term financing, if successful, will also enable the Group and the Company to generate sufficient cash flows to meet their obligations and improve their cash flows. The Directors, hence, are of the opinion that the going concern assumption that is applied in the preparation of these financial statements is appropriate.




(d) Functional and presentation currency

These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency. All financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise stated.

(e) Use of estimates and judgements

The preparation of the financial statements in conformity with MFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements other than those disclosed in the following notes:

(i) Validity of going concern assumption (refer to Note 1(c))

(ii) Forecast of future cash flows of tolled highway concessionaire

The Group prepared a projection of future cash flows of the tolled highway concessionaire. The information of the projected cash flows is used to measure the Sukuk Mudharabah at amortised cost using the effective interest method, amortise the concession intangible assets, provide for heavy repairs, assess the recognition of deferred tax assets, impairment of investments in subsidiaries and impairment of goodwill. The key assumptions applied in the preparation of the forecast of future cash flows are:

• Traffic volume is expected to grow at an average rate of 5.4% from financial year 2016 until end of the concession period in the financial year 2037; and

• Inflation rate at 5%.

(iii) Effective interest rate of the Sukuk Mudharabah

The Group measures the Sukuk Mudharabah at amortised cost using the effective interest method. The effective method is a method of calculating the amortised cost of the Sukuk Mudharabah and allocating the interest expense over the relevant period of the Sukuk Mudharabah.




(e) Use of estimates and judgements (continued)

(iii) Effective interest rate of the Sukuk Mudharabah (continued)

The effective interest rate is the rate that exactly discounts the estimated future cash payments throughout the expected period of the Sukuk Mudharabah, or when appropriate, a shorter period to the net carrying amount of the Sukuk Mudharabah.

The future cash payments of Sukuk Mudharabah is dependent on the forecasted future cash flows prepared by the Group. In calculating the effective interest rate of the Sukuk Mudharabah, the Group estimated the future cash payments of the Sukuk Mudharabah based on the assumptions disclosed in Note 1(e)(ii).

(iv) Amortisation of concession intangible assets

The cost of the concession intangible assets and government grants received is amortised over the concession period by applying the formula in Note 2(f)(i). The denominator of the formula includes projected total traffic volume for subsequent years to the end of the concession period and is based on the latest traffic volume projections prepared by independent traffic consultants. The traffic volume projection is updated from time to time and trends could impact the expected traffic volumes. Therefore, future amortisation charges could be revised. The carrying amount of the Group’s concession assets at the reporting date is disclosed in Note 5 and Note 11.

(v) Provision for heavy repairs

The Group has recognised a provision for heavy repairs based on independent pavement condition assessment that estimates the future requirements for pavement re-surfacing and management’s estimate of the incidental costs. In determining the amount of the provision, assumptions applied are:

• Traffic volume is expected to grow at an average rate of 5.4% from financial year 2016 until end of the concession period in the financial year 2037; and

• Discount rate at 7%.

(vi) Deferred tax

Deferred tax assets are recognised for unabsorbed capital allowances and unutilised tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is available. Significant judgement is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing and level of future taxable profits together with future tax planning strategies.

The recognition of deferred tax assets are dependent on the achievability of the Group’s future cash flows (refer to Note 1(e)(ii)).

(vii) Impairment of investments in subsidiaries

The Company assesses the impairment of investments in subsidiaries when there is indicator of impairment. The carrying amount is disclosed in Note 4. Based on this assessment, there was no impairment of investments in subsidiaries.

(viii) Impairment of goodwill

The Group tests goodwill for impairment annually in accordance with its accounting policy. More regular reviews are performed if events indicate that this is necessary.




(e) Use of estimates and judgements (continued)

(viii) Impairment of goodwill (continued)

Determining whether goodwill is impaired requires an estimation of the value in use and fair value less costs of disposal of the cash-generating units (“CGUs”) to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Fair value less costs of disposal is determined based on indicative values on a willing buyer willing seller basis, as provided by an independent valuer. The recoverable amounts of goodwill have been determined based on the higher of fair value less costs of disposal and value in use calculations, which resulted in no impairment loss during the year.

The carrying amount of goodwill and estimates used in the calculation are disclosed in Note 6 to the financial statements.

The Directors are of the opinion that any reasonably expected change in the key assumptions used to determine the recoverable amounts of the CGUs, would not result in any impairment.

2. Significant accounting policies

The accounting policies set out below have been applied consistently to the periods presented in these financial statements unless otherwise stated.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

The Group controls an entity when it 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 entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group also considers it has de facto power over an investee when, despite not having the majority of voting rights, it 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, unless the investment is classified as held for sale or distribution. The cost of investments includes transaction costs.

(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 acquisitions, the Group measures the cost of goodwill at the acquisition date as:

• the fair value of the consideration transferred; plus• the recognised amount of any non-controlling interests in the acquiree; plus



2. Significant accounting policies (continued)

(a) Basis of consolidation (continued)

(ii) Business combinations (continued)

• 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.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

The acquisition of AQL Aman Sdn. Bhd. (“AQL”) was completed on 14 October 2009. Pursuant to Appendix B of MFRS 3 – Business Combinations, this acquisition was deemed a reverse acquisition arrangement. Due to the application of MFRS 3 rules relating to reverse acquisitions, AQL, the legal subsidiary, became the acquirer of the Group for accounting purposes. Accordingly, the consolidated financial statements have been prepared as a continuation of the financial statements of AQL, but under the name of the Company, the legal parent.

(iii) Acquisitions of non-controlling interests

The Group treats all changes in ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any difference between the Group’s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.

(iv) Loss of control

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any non-controlling interests and the other components of equity related to the former subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

(v) Non-controlling interests

Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.




(a) Basis of consolidation (continued)

(vi) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

(b) Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate at that date.

Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting date except for those that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments or a financial instrument designated as a hedge of currency risk, which are recognised in other comprehensive income.

(c) Financial instruments

(i) Initial recognition and measurement

A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the Group or the Company becomes a party to the contractual provisions of the instrument.

A financial instrument is recognised initially, at its 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 issue of the financial instrument.

(ii) Financial instrument categories and subsequent measurement

The Group and the Company categorise financial instruments as follows:

Financial assets

Loans and receivables

Loans and receivables category comprises debt instruments that are not quoted in an active market.

Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method.

All financial assets are subject to review for impairment (refer to Note 2(j)(i)).




(c) Financial instruments (continued)

Financial liabilities

All financial liabilities are subsequently measured at amortised cost.

(iii) Financial guarantee contracts

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.

Fair value arising from financial guarantee contracts are classified as deferred income and are amortised to profit or loss using a straight-line method over the contractual period or, when there is no specified contractual period, recognised in profit or loss upon discharge of the guarantee. When settlement of a financial guarantee contract becomes probable, an estimate of the obligation is made. If the carrying value of the financial guarantee contract is lower than the obligation, the carrying value is adjusted to the obligation amount and accounted for as a provision.

(iv) Derecognition

A financial asset or a part of it is derecognised when, and only when, the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

(v) Effective interest of the Sukuk Mudharabah

The Group measures the Sukuk Mudharabah at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of the Sukuk Mudharabah and allocating the interest expense over the relevant period of the Sukuk Mudharabah.

The effective interest rate is the rate that exactly discounts the estimated future cash payments through the expected period of the Sukuk Mudharabah, or when appropriate, a shorter period to the net carrying amount of the Sukuk Mudharabah.

The Group periodically re-estimate the future cash payment of the Sukuk Mudharabah to reflect future cash flows entitled by the Sukuk Holders (refer to Note 17(c)) which alters the effective interest rate of the Sukuk Mudharabah in accordance to MFRS 139, AG7.

(d) Property, vessels and equipment

(i) Recognition and measurement

Items of property, vessels and equipment are measured at cost less any accumulated depreciation and any accumulated impairment losses.




(d) Property, vessels and equipment (continued)

(i) Recognition and measurement (continued)

Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs.

When significant parts of an item of property, vessels and equipment have different useful lives, they are accounted for as separate items (major components) of property, vessels and equipment.

The gain or loss on disposal of an item of property, vessels and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, vessels and equipment and is recognised net within “other income” and “other expenses” respectively in profit or loss.

(ii) Subsequent costs

The cost of replacing a component of an item of property, vessels and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group or the Company, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised to profit or loss. The costs of the day-to-day servicing of property, vessels and equipment are recognised in profit or loss as incurred.

(iii) Depreciation

Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that component are depreciated separately.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, vessels and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Property, vessels and equipment under construction are not depreciated until the assets are ready for their intended use.

The estimated useful lives for the current and comparative periods are as follows:

Buildings 2%Vessels 7%Vessels equipment 20%Dry docking expenditure 40%

Motor vehicles 20% - 25%Boat 10%Renovations 8% - 10%Computer system, furniture, fittings and other equipment 10% - 60%

Depreciation methods, useful lives and residual values are reviewed at the end of the reporting period and adjusted as appropriate.




(e) Leased assets

(i) Finance leases

Leases in terms of which the Group or the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

(ii) Operating leases

Leases, where the Group or the Company does not assume substantially all the risks and rewards of ownership are classified as operating leases and the leased assets are not recognised on the statement of financial position.

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.

(f) Intangible assets

(i) Concession intangible assets (“CIA”)

The cost of CIA is determined by capitalising the fair value of the concession obligations.

The CIA are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Upon commencement of tolling operations, at each reporting date, the CIA is amortised to profit or loss based on the following formula:

The projected total traffic volume of the concession is based on latest available independent traffic projection. The traffic volume projection is updated from time to time to reflect the latest available information.

Changes in the expected pattern of consumption of future economic benefits embodied in the assets are accounted for by changing the projected total traffic volume of the concession. The amortisation expense on concession assets is recognised in profit or loss.


Currentyearactualtrafficvolume (Current year actual traffic volume+projectedtotaltrafficvolumefortheremaining concession period)

(Opening net carrying amount of concession intangible asset+ current year additions)



(f) Intangible assets (continued)

(ii) Goodwill

Goodwill arising on business combinations is measured at cost less any accumulated impairment losses.

(iii) Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

(g) Inventories

Inventories are measured at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their present location and condition is determined using the first-in, first-out method. The cost comprises all direct and indirect costs.

Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.

(h) Non-current assets held for sale

Non-current assets, or disposal group comprising assets and liabilities that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale.

Immediately before classification as held for sale, the assets, or components of a disposal group, are remeasured in accordance with the Group’s accounting policies. Thereafter the assets, or disposal group are measured at the lower of their carrying amount and fair value less costs of disposal.

Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets and deferred tax assets, which continue to be measured in accordance with the Group’s accounting policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.

Intangible assets and property, vessels and equipment once classified as held for sale are not amortised or depreciated.

(i) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an insignificant risk of changes in fair value with original maturities of three 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 pledged deposits.




(j) Impairment

(i) Financial assets

All financial assets (except for investments in subsidiaries) are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment. If any such objective evidence exists, then the impairment loss of the financial asset is estimated.

An impairment loss in respect of loans and receivables is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.

If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.

(ii) Other assets

The carrying amounts of other assets (except for inventories, deferred tax assets and non-current assets (or disposal groups) classified as held for sale) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units. Subject to an operating segment ceiling test, for the purpose of goodwill impairment testing, cash-generating units to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to group of cash-generating units that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to disposal. In assessing value in use, the estimated future cash flows 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 or cash-generating unit.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (group of cash-generating units) and then to reduce the carrying amounts of the other assets in the cash-generating unit (groups of cash-generating units) on a pro rata basis.




(j) Impairment (continued)

(ii) Other assets (continued)

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the 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. Reversals of impairment losses are credited to profit or loss in the financial year in which the reversals are recognised.

(k) Equity instruments

Instruments classified as equity are measured at cost on initial recognition and are not re-measured subsequently.

(i) Ordinary shares

Ordinary shares are classified as equity.

(ii) Compound financial instruments

A compound financial instrument is a non-derivative financial instrument that contains both a liability and an equity component.

Compound financial instruments issued by the Group comprise cumulative convertible redeemable preference shares and redeemable convertible unsecured loan stocks (refer to Note 2(m)).

(iii) Repurchase, disposal and reissue of share capital (treasury shares)

When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares that are not subsequently cancelled are classified as treasury shares in the statement of changes in equity.

Where treasury shares are sold or reissued subsequently, the difference between the sales consideration net of directly attributable costs and the carrying amount of the treasury shares is recognised in equity.

(l) Employee benefits

(i) Short-term employee benefits

Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profit sharing plans if the Group or the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(ii) State plans

Contributions to the statutory pension funds are charged to the profit or loss in the period to which they relate. Once the contributions have been paid, the Group or the Company has no further payment obligations.




(m) Cumulative Convertible Redeemable Preference Shares (“CC-RPS”) and Redeemable Convertible Unsecured Loan Stocks (“RCULS”)

The CC-RPS and RCULS are regarded as compound instruments, consisting of a liability component and an equity component. The components of CC-RPS and RCULS that exhibit characteristics of a liability are recognised as financial liabilities in the statements of financial position, net of transaction costs. The dividends on CC-RPS are recognised as interest expense in profit or loss using the effective interest rate method. On issuance of the CC-RPS and RCULS, the fair value of the liability component is determined using a market rate of an equivalent non-convertible debt and this amount is carried as a financial liability (refer to Note 2 (c)(i)).

The residual amount, after deducting the fair value of the liability component, is recognised and included in shareholder’s equity, net of transaction costs.

Transaction costs are apportioned between the liability and equity components of the CC-RPS and RCULS based on the allocation of proceeds to the liability and equity components when the instruments were first recognised.

(n) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

Provision for heavy repairs

Provision for heavy repairs being the contractual obligations to maintain and restore the infrastructure to a specified standard of serviceability, is recognised and measured at the present value of the estimated expenditure required to settle the obligation at the reporting date. The unwinding of discount is expensed as incurred and recognised in profit or loss as a finance cost.

(o) Revenue and other income

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.

(i) Toll revenue

Toll revenue is accounted for as and when toll is chargeable for the usage of the expressway.

Pursuant to the Concession Agreements, the Government of Malaysia reserves the right to restructure or to restrict the imposition of unit toll rate increases, and in such event, the Government shall compensate for any reduction in toll revenue, subject to negotiation and other considerations that the Government may deem fit. Toll compensation is recognised in profit or loss over the period in which the compensation relates to based on the arrangement as disclosed in Note 21 to the financial statements.

(ii) Vessel charter

Revenue from vessel charter is recognised on a time-apportionment basis using the straight-line method.




(o) Revenue and other income (continued)

(iii) Interest income/profits from Syariah deposits

Interest income/profits from Syariah deposits are recognised on an accrual basis using the effective interest method.

(iv) License fee

License fee is recognised based on contract value upon transfer of all the rights to the licensees to enter and occupy the designated land area for permitted use for the entire duration of the concession period.

(v) Advertising income and highway access fee

Advertising income and highway access fee are recognised when services are rendered.

(vi) Dividend income

Dividend income is recognised when the right to receive payment is established.

(vii) Management fee

Management fee is recognised when services are rendered.

(viii) Guarantee fee

Guarantee fee is recognised on an accrual basis.

(ix) Construction revenue

Construction revenue is recognised by reference to the stage of completion of the construction activity at the reporting date, as measured by the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs. Where the outcome of the Construction cannot be estimated reliably, revenue is recognised to the extent of Construction costs incurred if it is probable that they will be recoverable. Construction costs are recognised as expenses in the year in which they are incurred.

(p) Borrowing costs

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets.

The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.




(q) Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial periods.

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

(r) Earnings per ordinary share

The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”).

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding adjusted for own shares held for the effects of all dilutive potential ordinary shares, which comprise convertible instruments.

(s) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker, to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.




(t) Contingent liabilities

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is not recognised in the statement of financial position and is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

(u) Fair value measurement

From 1 August 2014, the Group adopted MFRS 13, Fair Value Measurement which prescribed that 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 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.

For non-financial asset, the fair value measurement takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

In accordance with the transitional provision of MFRS 13, the Group applied the new fair value measurement guidance prospectively, and has not provided any comparative fair value information for new disclosures. The adoption of MFRS 13 has not significantly affected the measurements of the Group’s assets or liabilities other than the additional disclosures.



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3. Property, vessels and equipment (continued)

MotorCompany vehicles / Total RM’000CostAt 1 August 2014 -Additions 153

At 31 December 2015 153

Accumulated depreciation and amortisationAt 1 August 2014 -Charge for the period 38

At 31 December 2015 38

Carrying amount at 31 December 2015 115

3.1 In the period ending 31 December 2015, significant decline in global oil and gas prices has resulted in a decrease in charter contracts for the Group vessels. This has caused the Group to assess the recoverable amount of the vessels. This review led to a recognition of impairment losses of RM11,823,000 (31.7.2014: RM nil).

The recoverable amount was determined based on fair value less cost of disposal, which was determined based on the market comparable approach that reflects recent transaction prices for similar vessels, with similar age and specifications. In valuing the vessels, the appraisers have taken into consideration the prevailing market conditions and have made adjustments for differences such as age, size and specification where necessary before arriving at the most appropriate fair value for the vessels. The fair value measurement of the vessels was performed by independent valuer not connected with the Group, who has appropriate qualifications and recent experience in the fair value measurement of the vessel in the relevant sector. The fair value measurement is classified within Level 3 of the fair value hierarchy.

3.2 The carrying amount of motor vehicles of the Group held under hire purchase at the reporting date were RM326,000 (31.7.2014: RM522,000).

3.3 All other property, vessels and equipment of the Group are pledged as securities for borrowings as disclosed in Note 16.

3.4 The Group’s property, vessels and equipment include borrowing costs from bank loans borrowed specifically for the purpose of the construction of the vessels. During the financial period, the borrowing costs capitalised as cost of property, vessels and equipment amounted to RM5,369,000 (31.7.2014: RM5,243,000).

3.5 The purchase of property, vessels and equipment during the financial period were partly financed by loans amounting to RM53,408,000.

4. Investments in subsidiaries Company

31.12.2015 31.7.2014 Note RM’000 RM’000

Unquoted shares, at cost 4.1 274,647 89,658



4. Investments in subsidiaries (continued)

4.1 In 2015, investment in SILK amounting RM160,000,000 has been reclassified from assets held for sale (refer to Note 11).

Impairment review of investment in subsidiaries

Due to the presence of impairment indicator during the financial period arising from operation of a subsidiary (a toll highway concessionaire), the Company has undertaken an impairment assessment on investment in the subsidiary.

The recoverable amount of the subsidiary was based on its value in use, which was determined by using the discounted cash flow method on management’s business cash flow projections for 21 years from 2016 to 2037 (the concession expire date). The cash flow was prepared based on an independent traffic growth projection and is discounted to present value using discount rate of 13%.

Based on the above, the recoverable amount of the subsidiary of RM676 million was determined to be significantly higher than its carrying value and therefore, no impairment loss was recognised.

The above estimates are sensitive in the following areas:

(i) a decrease in 5.0 percentage point in long term traffic volume growth rate would have caused an impairment of approximately RM124 million.

(ii) an increase in 5.0 percentage point in discount rate used would have caused an impairment of approximately RM10 million.

Details of the subsidiaries are as follows:

Principal place Effective of business/ ownership Country of interest Name of subsidiaries Principal activities incorporation 31.12.2015 31.7.2014 % %Held by the Company:

Sistem Lingkaran-Lebuhraya Tolled highway Malaysia 100 100 Kajang Sdn. Bhd. (“SILK”) concessionaire

AQL Aman Sdn. Bhd. Investment holding Malaysia 100 100 (“AQL”)

Red Centennial Sdn. Bhd. Dormant Malaysia 100 100 (“RCSB”)

Jasamerin Energy Ventures Dormant Malaysia 51 - Sdn. Bhd. (“JMEV”)

Held through subsidiaries

Held through SILK:

Manfaat Tetap Sdn. Bhd. Special Purpose Malaysia 100 100(“MTSB”) Vehicle to facilitate the issuance of Sukuk Mudharabah (Note 17)




Details of the subsidiaries are as follows (continued):

Principal place Effective of business/ ownership Country of interest Name of subsidiaries Principal activities incorporation 31.12.2015 31.7.2014 % %Held through AQL:

Jasa Merin (Malaysia) Provision of Malaysia 70 70Sdn. Bhd. (“Jasa Merin”) offshore marine support services

Held through Jasa Merin:

JM Global 1 (Labuan) Plc Provision of Malaysia 70 70 offshore marine support services JM Global 2 (Labuan) Plc Provision of Malaysia 70 70 offshore marine support services

JM Global 3 (Labuan) Plc Provision of Malaysia 70 70 offshore marine support services

JM Global 4 (Labuan) Plc Provision of Malaysia 70 70 offshore marine support services

Jasa Merin (Labuan) Plc Dormant Malaysia 70 70

Non-controlling interests in subsidiaries

The Group’s subsidiaries that have non-controlling interests (“NCI”) are as follows:

31.12.2015 NCI percentage of Carrying amount Profit allocated ownership interest of NCI to NCI % RM’000 RM’000Material NCI

Name of subsidiaryJasa Merin (Malaysia) Sdn. Bhd. and subsidiaries (“Jasa Merin Group”) 30% 61,647 3,129

Immaterial NCI

Name of subsidiaryJasamerin Energy Ventures Sdn. Bhd. (“JMEV”) 49% 397 (93)

62,044 3,036




Summarised financial information before intra-group elimination

Jasa Merin Group JMEV Total RM’000 RM’000 RM’000As at 31 December 2015Non-current assets 1,203,379 - 1,203,379Current assets 128,184 819 129,003Non-current liabilities (854,260) - (854,260)Current liabilities (271,813) (8) (271,821)

Net assets 205,490 811 206,301

Period ended 31 December 2015Revenue 400,784 - 400,784Profit/(Loss) for the period 10,430 (189) 10,241

Cash flows from operating activities 230,868 (182) 230,686Cash flows from investing activities (219,917) - (219,917)Cash flows from financing activities (21,700) 1,000 (20,700)

Net decrease in cash and cash equivalents (10,749) 818 (9,931)

Dividends paid to NCI - - -

31.7.2014 Carrying Profit NCI percentage of amount allocated ownership interest of NCI to NCIName of subsidiaries % RM’000 RM’000

Jasa Merin Group 30% 58,518 15,138

In December 2013, Jasa Merin acquired an additional 49% interest in its subsidiaries, increasing its ownership from 51% to 100% (refer to Note 32) and accordingly increased the Group effective ownership interest in these subsidiaries from 36% to 70%.

Jasa Merin Group RM’000As at 31 July 2014Non-current assets 1,173,064Current assets 112,624Non-current liabilities (873,765)Current liabilities (216,863)

Net assets 195,060




Jasa Merin

Group

RM’000

Year ended 31 July 2014

Revenue 276,884Profit for the period 40,135

Cash flows from operating activities 111,080Cash flows from investing activities (160,904)Cash flows from financing activities 39,683

Net decrease in cash and cash equivalents (10,141)

Dividends paid to NCI -

Significant restrictions

Other than those disclosed elsewhere in the financial statements, the carrying amounts of assets to which significant restrictions apply are as follows:

Group

31.12.2015 31.7.2014

RM’000 RM’000

Cash and cash equivalents 68,001 54,804

Restriction imposed by Sukuk Mudharabah Agreement

For SILK and MTSB, the Sukuk holders hold protective rights restricting SILK’s and MTSB’s ability to utilise its cash and bank balances. SILK maintains an operating account to capture all funds from the proceeds from the toll operations and all other form of revenues and receivables of SILK to meet the payment of the operating and transaction costs budgeted for that period, which the budget will be submitted to the Facility Agent or Trustee every period.

The cash and bank balances of SILK and MTSB are subject to a distribution scheme (refer Note 17) as stipulated in Sukuk Mudharabah agreements.

Restriction imposed by bank covenants

The covenants of bank loans taken by Jasa Merin, a subsidiary of the Company, restricts the ability of the subsidiary to utilise its cash and bank balances of RM3,079,000 (31.7.2014: RM2,334,000) until settlement of the term loans.



5. Concession intangible assets

Group 31.12.2015 31.7.2014 Note RM’000 RM’000

CostAt beginning of period - 954,691Transfer from assets held for sale 956,677 -Additions 63,889 1,986Transfer to assets held for sale 11 - (956,677)

At end of period 1,020,566 -

Accumulated amortisationAt beginning of period - 43,800Transfer from assets held for sale 56,851 -Amortisation for the period 27,343 13,051Transfer to assets held for sale 11 - (56,851)

At end of period 84,194 -

Net carrying amount 936,372 -

On 8 October 1997, SILK signed a Concession Agreement with the Government of Malaysia pertaining to the privatisation of the Kajang Traffic Dispersal Ring Road (the “Expressway”). By virtue of the Concession Agreement, SILK is responsible for the construction of the Expressway which involves the upgrading and widening of existing roads, and the design and construction of a new alignment and thereafter its operation, including deriving toll revenue and maintenance, for 33 years. On 1 August 2001, SILK entered into a Supplemental Concession Agreement with the Government of Malaysia whereby the concession period was extended from 33 years to 36 years.

The Concession Agreement may be terminated by either the Government or SILK if either party fails to remedy its default within the period specified in the Concession Agreement.

The Government may terminate the Concession Agreement by expropriation of the Concession or SILK by giving notice not less than three months to that effect to SILK if it considers that such expropriation is in the national interest. On expiry of the concession period, SILK is to hand over the concession area to the Government in a well-maintained condition and make good any defects at SILK’s own expenses within one year after the date of hand over.

Expressway development expenditure incurred in connection with the concession is classified as “Concession intangible assets” while the amortisation of concession intangible assets is included in the “Direct costs” line item in the statements of comprehensive income.

6. Goodwill on consolidation Group 31.12.2015 31.7.2014 RM’000 RM’000

At beginning of period 647 13,883Transfer from/(to) assets held for sale 13,236 (13,236)

At end of period 13,883 647



6. Goodwill on consolidation (continued)

For the purpose of impairment testing, goodwill is allocated to the Group’s operating division which represents the lowest level within the Group at which the goodwill is monitored for internal management purpose.

The aggregate carrying amounts of goodwill allocated to each unit are as follows:

Group

31.12.2015 31.7.2014

RM’000 RM’000

Tolled highway concessionaire 13,236 -Offshore marine support services 647 647

13,883 647

Impairment review of goodwill

Tolled highway concessionaire

The recoverable amount of the tolled highway concessionaire was based on its value in use, which was determined by using the discounted cash flow method on management’s business plan cash flow projections for 21 years from 2016 to 2037 (the concession expiry date). The cash flow was prepared based on traffic growth projection prepared by an independent consultant and is discounted to present value using discount rate of 13%.

Based on the above, the recoverable amount of the unit of RM1.7 billion was determined to be significantly higher than its carrying value and therefore, no impairment loss was recognised.

The above estimates are sensitive in the following areas:

(i) a decrease of 10.0 percentage point in long term traffic volume growth rate would have caused an impairment of approximately RM148 million.

(ii) an increase of 10.0 percentage point in discount rate used would have caused an impairment of approximately RM44 million.



7. Deferred tax assets/(liabilities)

Recognised deferred tax assets/(liabilities)

Deferred tax assets and liabilities are attributable to the followings:

Assets Liabilities Net 31.12.2015 31.7.2014 31.12.2015 31.7.2014 31.12.2015 31.7.2014 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000GroupProperty, vessels, equipment and concession intangible assets (171,094) - (157,865) (127,938) (328,959) (127,938)Ijarah rental payable 52,844 - - - 52,844 -Trade and other payables 2,923 - - - 2,923 -Unutilised capital allowances 96,720 70,135 91,987 - 188,707 70,135Unutilised tax losses 160,105 - - - 160,105 -Other items - 721 647 (920) 647 (199) 141,498 70,856 (65,231) (128,858) 76,267 (58,002) - (70,827) - 70,827 - - Net tax assets/ (liabilities) 141,498 29 (65,231) (58,031) 76,267 (58,002)

CompanyPreference shares - - - - - -Convertible loan stocks - - - (891) - (891)

Net tax liabilities - - - (891) - (891)

Movement in temporary differences during the period

Recognised in profit or loss At Continuing Discontinued At Recognised in Recognised in At 1.8.2013 Operations Operation 31.7.2014 profit or loss equity 31.12.2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Property, vessels, equipment and concession intangible assets (280,349) (19,004) 2,218 (297,135) (31,824) - (328,959)Ijarah rental payable 31,066 - 7,893 38,959 13,885 - 52,844Trade and other payables 4,993 - 858 5,851 (2,928) - 2,923Unutilised capital allowances 152,383 - (6,671) 145,712 - - 145,712Unutilised tax losses 166,776 20,042 (182) 186,636 16,464 - 203,100Other items (332) 133 - (199) (21) 867 647

Net tax assets/(liabilities) 74,537 1,171 4,116 79,824 (4,424) 867 76,267

Note 24



7. Deferred tax assets/(liabilities) (continued)

Reconciliation of deferred tax assets and liabilities at 31 July 2014:

Discontinued Continuing Operation Operations Total RM’000 RM’000 RM’000

Property, vessels, equipment and concession intangible assets (169,197) (127,938) (297,135)Ijarah rental payable 38,959 - 38,959Trade and other payables 5,851 - 5,851Unutilised capital allowances 160,105 - 160,105Unutilised tax losses 102,108 70,135 172,243Other items - (199) (199)

Net tax assets/(liabilities) 137,826 (58,002) 79,824

Note 11

Company Preference shares Loan stocks Total RM’000 RM’000 RM’000

At 1 August 2013 (37) (1,004) (1,041)Recognised in profit or loss (Note 24) 37 113 150

At 31 July 2014 - (891) (891)

Recognised in profit or loss (Note 24) - 24 24Recognised in equity upon conversion into ordinary shares - 867 867

At 31 December 2015 - - -

8. Inventories

Group 31.12.2015 31.7.2014 RM’000 RM’000

Spare parts for vessels 1,214 1,319



9. Trade and other receivables


Non-currentNon-tradeLong term receivables - deposits 9.1 7,385 - - - 7,385 - - -

CurrentTradeToll compensation recoverable from Government of Malaysia 23,826 - - -Charter hire income from national oil corporation 10,316 5,710 - -Charter hire income from multinational oil corporations 27,010 52,455 - -Other trade receivables 5,163 268 - -

66,315 58,433 - -

Non-tradeAmount due from subsidiaries 9.2 - - 15,401 7,317Sundry receivables 9,284 9,602 67 41Staff advances 141 208 - -Prepayments 4,163 2,224 7 12Deposits 326 223 4 11

13,914 12,257 15,479 7,381

80,229 70,690 15,479 7,381

9.1 Long-term receivables - deposits

This is related to the acquisition of new vessels which the delivery date is expected in year 2016.

9.2 Amount due from subsidiaries

Amount due from subsidiaries represent dividends and fees receivable, and are unsecured, interest free and repayable on demand.



10. Cash and cash equivalents

Group Company 31.12.2015 31.7.2014 31.12.2015 31.7.2014 RM’000 RM’000 RM’000 RM’000

Cash and bank balances 11,340 17,032 23 625Deposits placed with licensed banks 85,643 43,633 16,800 21,750

96,983 60,665 16,823 22,375

Included in the deposits placed with licensed banks of the Group is RM2,363,000 (31.7.2014: RM nil) charged to performance bonds in favour of Lembaga Lebuhraya Malaysia.

Deposits placed with licensed banks of the Group amounting to RM8,433,000 (31.7.2014: RM10,597,000) are pledged as securities for banking facilities granted to the Group.

11. Assets/(liabilities) classified as held for sale

As at 31 December 2015, the Group classified certain vessels and equipment as assets held for sale. The sale is expected to be completed in April 2016.

Particulars of the vessel and equipment classified as held for sale are as follows: Group Note RM’000

Cost 3 90,260Accumulated depreciation 3 (48,682)

41,578

In the prior year, the toll concessionaire segment was presented as a disposal group held for sale following the commitment of the Group management on 20 June 2014 to a plan to sell the segment. The proposed disposal of the segment was subsequently aborted.

As at 31 July 2014, the assets and liabilities of the disposal group are as follows:

Group Company Note RM’000 RM’000Assets classified as held for sale Investment in subsidiaries 4.1 - 160,000 Goodwill 11.1 13,236 - Concession intangible assets 11.2 899,826 - Plant and equipment 11.3 2,192 - Deferred tax assets 7 137,826 - Trade and other receivables 11.4 609 - Cash and cash equivalents 11.5 53,844 -

1,107,533 160,000



11. Assets/(liabilities) classified as held for sale (continued)

Group Company Note RM’000 RM’000

Liabilities classified as held for sale Sukuk Mudharabah 17 691,381 - Ijarah rental payable * 19 327,250 - Hire purchase 51 - Trade and other payables 26,132 - Provisions 20 37,711 -

1,082,525 -

Net assets 25,008 160,000

* Included in ijarah rental payable are accrued ijarah rental A of RM165,326,000 and the additional finance cost pursuant to MFRS 139 of RM161,924,000 respectively.

The carrying values of the goodwill, concession intangible assets and plant and equipment of the disposal group were the same as their carrying values before they were being classified to current assets.

11.1 The recoverable amount of goodwill from the tolled highway concessionaire unit was based on its fair value less costs of disposal.

On 27 May 2014, the Company and Road Builder (M) Holdings Berhad (“RBH”) had entered into a Head of Agreement in relation to the proposed disposal of the entire interest in SILK for a cash consideration of RM398 million (“Disposal Consideration”).

Subsequently, on 20 June 2014, the Disposal Consideration had been revised from the proposed disposal consideration of RM398 million to RM395 million. The revision of the Disposal Consideration was after taking into consideration the final terms agreed between SHB and RBH.

On 24 November 2014, SHB and RBH mutually agreed not to proceed with the sale and purchase of the entire equity interest in SILK due to non-fulfilment of all conditions precedent within the agreed timeline.

11.2 Concession intangible assets comprise the followings:

Group 31.7.2014 Note RM’000

Cost 5 956,677Accumulated amortisation 5 (56,851)

899,826



11. Assets/(liabilities) classified as held for sale (continued)

11.3 Plant and equipment held for sale comprise the followings: Group 31.7.2014 Note RM’000

Cost 3 3,411 Accumulated depreciation 3 (1,219)

2,192

11.4 Receivables are carried at cost less impairment loss amounting to RM475,000.

11.5 Cash and cash equivalents comprise deposits placed with licensed banks and cash and bank balances.

Included in the deposits placed with licensed banks is RM1,709,000 pledged for a bank facility granted to SILK.

12. Share capital Group and Company Number Number Amount of shares Amount of shares 31.12.2015 31.12.2015 31.7.2014 31.7.2014 RM’000 ’000 RM’000 ’000

Authorised: Ordinary shares of RM0.25 each 998,000 3,992,000 998,000 3,992,000 Preference shares of RM0.10 each 2,000 20,000 2,000 20,000 Total authorised capital 1,000,000 1,000,000

Issued and fully paid ordinary shares, representing total issued and fully paid share capital: At 1 August 129,020 516,080 108,333 433,333 Issue of new shares - - 7,500 30,000 Issued upon conversion of loan stocks 46,363 185,454 - - Issued upon conversion of preference shares - - 13,187 52,747

At 31 December/July 175,383 701,534 129,020 516,080

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions and rank equally with regard to the Company’s residual assets.

Issue of new ordinary shares

During the financial period, the Company issued 185,454,417 new ordinary shares of RM0.25 each upon conversion of 39,950,000 RCULS-B together with their attendant accrued dividends at the rate of four (4) new ordinary shares for every RM1 of RCULS-B and its attendant coupon payable.

In the prior year, the Company issued:

• 30,000,000 new ordinary shares of RM0.25 each at RM0.725 per share for cash to finance investment opportunities pursuant to a Private Placement, and



12. Share capital (continued)

Issue of new ordinary shares (continued)

• 52,746,667 new ordinary shares of RM0.25 each pursuant to the conversion of 10,988,889 Cumulative Convertible Redeemable Preference Shares (“CC-RPS”) together with their attendant accrued dividends at the rate of four (4) new ordinary shares for every RM1 of CC-RPS and its attendant dividend payable.

The new ordinary shares were subsequently granted listing and quotation by Bursa Malaysia, and rank pari passu in all respects with the existing ordinary shares of the Company.

During the financial year ended 31 July 2014, all the preference shares and dividends payables were converted into ordinary shares.

13. Share premium, reverse acquisition deficit and capital reserve

Share premium arose from the issuance of ordinary shares and conversion of loan stocks as disclosed in Note 12.

Reverse acquisition deficit arose from the reverse acquisition of the Company by AQL.

Capital reserve arose from capital reduction exercise in prior years.

14. Loan stocks Group and Company 31.12.2015 31.7.2014 RM’000 RM’000Redeemable Convertible Unsecured Loan Stocks (“RCULS”) Equity component - 34,034 Liability component - 6,317

(a) RCULS-B

RCULS-B were issued at nominal value of RM1 each (“Issue Price”) on 14 October 2009 (“Issue Date”) with a maturity period of 5 years to 13 October 2014 (“Maturity Date”) and were constituted by a Trust Deed dated 7 October 2009 made between the Company and the Trustee for the holders of the RCULS-B. The main features of RCULS-B are as follows:

RCULS-B were issued pursuant to the Company’s Regularisation Scheme which was completed on 14 October 2009.

(i) RCULS-B are redeemable at the option of the Company, in whole or in part at the Issue Price at anytime from the Issue Date up to the Maturity Date of 13 October 2014.

(ii) RCULS-B are convertible into new ordinary shares in the Company at the option of RCULS-B holders from the third anniversary to the maturity date of 13 October 2014 (“Conversion Period”) at the rate of one RM1 nominal value RCULS-B for four new ordinary shares of RM0.25 each of the Company. Unless earlier redeemed or converted, RCULS-B shall automatically be converted into new ordinary shares in the Company at the conversion rate on the Maturity Date.

(iii) Upon conversion of RCULS-B into new ordinary shares, such shares shall rank pari passu in all respects with the existing ordinary shares of the Company in issue at the time of conversion except that they shall not be entitled to any dividend or other distribution declared in respect of a financial period prior to the financial period in which RCULS-B are converted or any interim dividend declared prior to the date of conversion of the RCULS-B.

(iv) The coupon rate of 3% per annum is payable semi-annually in arrears on 14 April and 14 October. The coupon payment shall be satisfied by the issuance of RCULS (CR).



14. Loan stocks (continued)

(a) RCULS-B (continued)

In the prior year, the Company with the concurrence of the holders amended the terms of RCULS-B and RCULS (CR). Under this amendment, the date of coupon payment to be satisfied by the issuance of RCULS (CR) shall now fall on the Maturity Date, the Conversion Date or the Redemption Date, whichever is applicable.

(b) RCULS (CR)

RCULS (CR) represent the coupon payments towards RCULS-B which were neither redeemed nor converted up to the maturity date on 13 October 2014. RCULS (CR) are issued at nominal value of RM1 each and were constituted by a Trust Deed dated 7 October 2009 made between the Company and the Trustee for the holders of the RCULS-B. The main features of RCULS (CR) are similar to that of the RCULS-B, except that RCULS (CR) were issued semi-annually from 14 April 2010 to 14 April 2014, and matured on 13 October 2014.

As mentioned above, the Company with the concurrence of the holders amended the terms of RCULS (CR) in prior year. Under this amendment, the date of coupon payment to be satisfied by the issuance of RCULS (CR) shall fall on the Maturity Date, the Conversion Date or the Redemption Date, whichever is applicable.

The fair value of RCULS has been apportioned between the liability component and the equity component, representing the fair value of the conversion option. Following the amendments to the terms of RCULS-B and RCULS (CR) in prior year, the RCULS have been re-measured pursuant to MFRS 139, and are accounted for in the statements of financial position of the Group and of the Company.

On 13 October 2014, all the RCULS-B and RCULS (CR) were converted into ordinary shares.

15. Employee trust shares

In 2014, employee trust shares of RM6,688,000 were related to 15,200,000 shares of the Company held by Jasa Merin Employee Trust, a trust set up by the subsidiary, Jasa Merin, pursuant to the acquisition of AQL. On 10 November 2014, the trust granted 31,998,983 ordinary shares of the Company to the eligible employees.

Fair value of these shares at the grant date was RM24,479,000 and was charged to profit or loss as employee benefit expenses. Fair value of these shares are categorised under Level 1 and were determined based on market value transacted at the grant date.

16. Loans and borrowings

Group 31.12.2015 31.7.2014 Note RM’000 RM’000

Non-currentSukuk Mudharabah 17 642,981 -Secured term loans 16.1 788,833 816,394Hire purchase payables 16.2 196 261

1,432,010 816,655



16. Loans and borrowings (continued)

Group 31.12.2015 31.7.2014 Note RM’000 RM’000

CurrentBank overdraft 2,977 -Sukuk Mudharabah 17 14,691 -Revolving credit 16.3 35,000 40,000Secured term loans 16.1 141,211 122,285Hire purchase payables 16.2 130 114

194,009 162,399

Add: Liability component RCULS (Note 14) - 6,317

1,626,019 985,371

16.1 Secured term loans

The term loans of the Group are secured by the followings: (a) debentures created over fixed and floating assets of subsidiaries; (b) first legal/mortgage charge over the vessels; (c) an irrevocable joint and several guarantee by a director and a third party of AQL; (d) assignment of charter proceeds in respect of the vessels; (e) assignment of all benefit, interest, rights and property over or in respect of the vessels under construction contracts; (f) assignment of insurance policy for all vessels in favour of the banks; and (g) corporate guarantee from the immediate and ultimate holding company of the subsidiaries.

16.2 Hire purchase payables

Hire purchase liabilities are payable as follows:

Present Present Future value of Future value of minimum minimum minimum minimum lease lease lease lease payments Interest payments payments Interest payments 31.12.2015 31.12.2015 31.12.2015 31.7.2014 31.7.2014 31.7.2014 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Less than one year 144 14 130 129 15 114 Between one and five years 209 13 196 280 19 261

353 27 326 409 34 375

16.3 Revolving credit

Revolving credit is secured by shares in subsidiaries held by Jasa Merin.



17. Sukuk Mudharabah

Sukuk Mudharabah of RM752 million was issued by MTSB on 25 January 2008, and is constituted by a Trust Deed dated 17 January 2008 and Supplemental Trust Deed dated 15 March 2011 entered into by MTSB, SILK and the Trustee for all the Sukuk holders.

The Sukuk Mudharabah, which was issued at par, has a tenure of up to twenty-one (21) years and four (4) months from the date of issuance.

The Sukuk Mudharabah is structured to be repaid progressively. It is:

(i) non-transferable;(ii) not listed;(iii) not underwritten;(iv) not rated; and(v) non-tradable.

a) Capital repayment terms under Mudharabah contract

SILK shall refund the capital to MTSB, subject to the availability of funds, based on the distribution scheme as follows:

Pay to MTSB Retained by SILK

1st to 7th distributions 10% of Excess Funds 90% of Excess Funds, or RM3 million per annum whichever is lower.

8th to 22nd distributions 94% of Excess Funds 6% of Excess Funds, or RM2 million per annum whichever is lower.

Excess Funds are defined as follows (on a 12-month period basis):

Total available cash flowLess:Taxes and any other payments/fees to the authoritiesOperating expendituresCapital expendituresMinimum ljarah Rental APeriodic ljarah Rental BAny accrued Minimum ljarah Rental A and accrued Periodic ljarah Rental B

The Issuer (MTSB) shall subsequently refund the capital, subject to the availability of funds at the ratio of 1:99 for Issuer: Investor, provided at the outset of the venture in full to the Investors (Sukuk holders). Further, a minimum RM2.0 million per annum shall be paid annually commencing from 3rd anniversary from the date of issuance (to be known as “Periodic ljarah Rental B”).

The Periodic ljarah Rental B is:

(i) for the amount of RM2 million per annum;(ii) payable annually in arrears;(iii) payable commencing 3rd year from the issue date;(iv) RM38 million for the whole period of the ljarah;(v) not constitute an event of default for any non-payment of Periodic ljarah Rental B from the issue date until the

7th anniversary and continue to accrue notwithstanding the same; and(vi) constitute a default under the ljarah Agreement for any non-payment of accrued and current Periodic ljarah

Rental B from the 8th anniversary from the issue date.



17. Sukuk Mudharabah (continued)

(b) Profit payment is by way of Periodic ljarah (“lease”) Rental A as follows:

The Periodic ljarah Rental A is:

(i) the amount calculated at 8.0% per annum on the outstanding Sukuk Mudharabah;(ii) payable commencing the 1st year from the issue date;(iii) payable semi-annually in arrears;(iv) up to RM1.49 billion for the period of the ljarah;(v) subject to payment of minimum rental of 3.5% per annum calculated on the outstanding Sukuk Mudharabah

(“Minimum ljarah Rental A”) that is payable commencing the 1st anniversary from the issue date;(vi) not constitute an event of default for non-payment of Minimum ljarah Rental A from the issue date until the

7th anniversary and continue to accrue notwithstanding the same;(vii) not constitute an event of default for non-payment of Periodic ljarah Rental A throughout the Sukuk tenure;

and(viii) constitute a default under the ljarah Agreement for any non-payment of accrued and current Minimum ljarah

Rental A from the 8th anniversary from the issue date.

(c) Profit Payment C and Profit Payment D

The Excess Funds of the Sukuk Mudharabah shall be distributed based on the distribution scheme as per Note 17(a).

Sums exceeding the amount payable to the MTSB shall be payable to the Sukuk Investors and shall form part of Profit Payment C and Profit Payment D that shall be distributed between the Issuer and the Investors pursuant to the distribution scheme as follows:

1st to 7th 8th to 22nd

distributions distributions

Percentage of Issuer’s portion of the ExcessFunds (“Profit Payment C”) 49.5% 59.4%Percentage of Issuer’s portion of the ExcessFunds (“Profit Payment D”) 49.5% 39.6%

The credit balance of the Profit Payment Account in respect of the Expected Profit Payment C received by the Issuer shall be applied in the following order of priority:

(i) any accrued Periodic Ijarah Rental A;(ii) current year shortfall of Periodic Ijarah Rental A; (iii) any balance thereof as additional profit for distribution of the Investors.

The credit balance of the Profit Payment Account in respect of the Expected Profit Payment D shall be utilised as the Mudharabah capital payments under the Sukuk Mudharabah transaction.

(d) Securities

The Sukuk Mudharabah is secured by:

(i) fixed and floating charge over all the assets and undertaking of SILK;(ii) fixed and floating charge over all the assets and undertaking of MTSB; and(iii) limited guarantee given by the Company.



17. Sukuk Mudharabah (continued)

(d) Securities (continued)

Under the limited guarantee given by the Company:

(i) the total amount recoverable from the Company shall not exceed the amount actually realised from the sale of its shares in SILK or the sale by SILK of the ljarah Asset (the Concession);

(ii) if the Company fails to make payment of the outstanding amount under the Sukuk Mudharabah on demand, then the Company shall transfer its shares in SILK to the Security Agent (Affin Hwang Investment Bank Berhad) in full settlement of its obligations under the limited guarantee; and

(iii) if upon a sale thereafter by the Security Agent of the shares in SILK, the proceeds of sale shall exceed the outstanding amount under the Sukuk Mudharabah, the Security Agent shall refund to the Company an amount equivalent to such excess.

(e) Prepayment option of Sukuk Mudharabah

Prepayment is only allowed vide Expected Profit Payment D and/or refinancing through Islamic financing facility (be it financing facility or Islamic securities) by the Investors (“Sukuk holders”). The refinancing by the Investors shall be led by Affin Hwang Investment Bank Berhad.

Should the Group intend to refinance the Sukuk Mudharabah, a special resolution needs to be passed at the meeting of the Sukuk holders (duly convened and held in accordance with the provisions contained in the Trust Deed signed on 17 January 2008), which should be carried by 2 or more Sukuk holders, holding in aggregate not less than 2/3 of the Sukuk Mudharabah remaining outstanding.

18. Trade and other payables


TradeTrade payables 11,117 29,284 - -

Non-tradeAmount payable for new ship building 56,502 3,109 - -Advance license and access fees 18.1 17,886 - - -Accruals 9,942 13,138 432 371Sundry payables 4,381 - - -Deposits received 69 - - -Amount due to subsidiaries 18.2 - - 287 6,836

99,897 45,531 719 7,207



18. Trade and other payables (continued)

18.1 Advance license and access fees

Advance license fees relate to fees charged for the transfer of all the rights to the licensees to enter and occupy the designated land area for permitted use for the entire duration of the concession period, subject to the terms and conditions specified in the license agreement (“Agreement”). The license fees, after setting off against its associated costs, will be recognised in profit or loss over the remaining concession period upon completion of the relevant terms in the Agreement.

As at 31 July 2014, the advance license and access fees have been classified as held for sale (refer to Note 11).

18.2 Amount due to subsidiaries

Amount due to subsidiaries are unsecured, interest-free and are repayable on demand.

19. Ijarah rental payable

ljarah rental payable to Sukuk Mudharabah holders represents the balance due after payment of 3.5% Minimum ljarah Rental A as disclosed in Note 17(b)(v) and is calculated on the effective yield basis by applying the effective interest rate of 9.30% (31.7.2014: 9.53%) per annum.

Included in the ijarah rental payable are accrued ijarah rental A of RM181,010,000 and the additional finance cost pursuant to MFRS 139 of RM219,776,000.

20. Provisions

Heavy repairs Lane widening TotalGroup RM’000 RM’000 RM’00031.12.2015At 1 August 2014 - - -Transfer from liabilities held for sale 3,202 34,509 37,711Additional provision during the period 5,853 59,207 65,060Unwinding of discount 912 - 912Utilised during the period (5,076) (14,982) (20,058)

At 31 December 2015 4,891 78,734 83,625

31.7.2014At 1 August 2013 3,073 34,509 37,582Unwinding of discount 129 - 129Transfer to liabilities held for sale (3,202) (34,509) (37,711)

At 31 July 2014 - - -

Analysed as:Current 4,891 15,615 20,506Non-current - 63,119 63,119

4,891 78,734 83,625



20. Provisions (continued)

Heavy repairsProvision for heavy repairs relates to the estimated costs of the contractual obligations to maintain and restore the highway infrastructure to a specified standard of serviceability.

Lane wideningProvision for lane widening relates to the estimated costs of the contractual obligations to upgrade the highway infrastructure as specified in the Concession Agreement. The Group had provided for lane widening costs during the period pursuant to its contractual obligation to begin the second phase of upgrading the highway infrastructure. The provision is made based on current costs of completion of the first phase highway infrastructure upgrading works and is capitalised into Concession Intangible Assets (“CIA”).

21. Revenue Group Company 1.8.2014 1.8.2013 1.8.2014 1.8.2013 to to to to 31.12.2015 31.7.2014 31.12.2015 31.7.2014 RM’000 RM’000 RM’000 RM’000

re-presented

Vessel charter services 400,784 276,884 - -Highway toll collection revenue 127,494 74,246 - -Toll compensation revenue * 47,559 13,653 - -Construction revenue 20,198 - - -Management and guarantee fees from subsidiaries - - 8,316 4,784Dividend income from subsidiaries - - 3,499 70 596,035 364,783 11,815 4,854

* Toll compensation is receivable from the Government of Malaysia in the event the Government approves and

publishes in the Gazette lower toll rates than the agreed toll rates.

22. Finance costs Group Company 1.8.2014 1.8.2013 1.8.2014 1.8.2013 to to to to 31.12.2015 31.7.2014 31.12.2015 31.7.2014 RM’000 RM’000 RM’000 RM’000

re-presentedFinance costs on: Term loans 82,991 60,463 - - Sukuk Mudharabah 134,210 93,900 - - Convertible preference shares - 210 - 210 Convertible loan stocks 95 450 95 450 Revolving credits 2,801 1,614 - - Hire purchase payables 60 30 - - Unwinding of interest for provision for heavy repairs 912 128 - -

221,069 156,795 95 660



22. Finance costs (continued) Group Company 1.8.2014 1.8.2013 1.8.2014 1.8.2013 to to to to 31.12.2015 31.7.2014 31.12.2015 31.7.2014 RM’000 RM’000 RM’000 RM’000

re-presented

Less: Finance costs capitalised in property, vessels and equipment (5,369) (5,243) - -

Total finance costs 215,700 151,552 95 660

23. (Loss)/Profit before tax

The following amounts have been included in arriving at (loss)/profit before tax:


re-presented (Loss)/Profit before tax is arrived at after charging:Auditors’ remuneration:- Audit fees KPMG 252 192 52 40- Non-audit fees KPMG 108 231 7 6 Other auditors 82 73 - -Provision for heavy repairs 20 5,853 - - -Depreciation of property, vessels and equipment 3 124,754 78,375 38 -Employee benefits expense 23.1 107,530 58,337 556 308Non-executive directors’ remuneration 23.2 690 370 493 246Amortisation of dry-docking expenditure 3 16,787 13,504 - -Amortisation of concession intangible assets 5 27,343 13,051 - -Impairment loss on other receivables - 475 - -Impairment loss on property, vessels and equipment 3 11,823 - - -Rental of office and warehouse 314 208 - -Property, vessels and equipment written off 201 105 - -Net foreign exchange loss 250 561 - -

and after crediting:Gain on disposal of property, vessels and equipment (175) (11,043) - -Interest income (3,725) (2,281) (1,031) (137)Dividend income from subsidiaries - Unquoted shares - - (3,499) (70)



23. (Loss)/Profit before tax (continued)

23.1 Employee benefits expense

Group Company 1.8.2014 1.8.2013 1.8.2014 1.8.2013 to to to to 31.12.2015 31.7.2014 31.12.2015 31.7.2014 RM’000 RM’000 RM’000 RM’000

re-presented

Wages and salaries 65,566 44,895 455 284Defined contribution plan 5,490 5,141 94 24Social security contributions 430 303 - -Distribution of employee trust shares (Note 15) 24,479 - - -Other staff related expenses 11,546 7,979 7 -Short term accumulating compensated absence 19 19 - -

107,530 58,337 556 308

Included in employee benefits expense of the Group and of the Company are executive directors’ remuneration amounting to RM3,389,000 (31.7.2014: RM1,482,000) and RM567,000 (31.7.2014: RM308,000) respectively.

23.2 Directors’ remuneration


re-presentedExecutive directors:- salaries 1,937 1,606 321 204- bonus 1,022 772 185 80- fees - 10 - -- defined contribution plan 373 248 61 24- allowances and other emoluments 17 136 - -- benefits-in-kind 40 28 - -

Total executive directors’ remuneration 3,389 2,800 567 308

Non-executive directors:- fees 599 246 422 156- other emoluments 91 124 71 90

Total non-executive directors’ remuneration 690 370 493 246

Total directors’ remuneration including benefits-in-kind 4,079 3,170 1,060 554



24. Tax expense

Recognised in profit or loss Group Company 1.8.2014 1.8.2013 1.8.2014 1.8.2013 to to to to 31.12.2015 31.7.2014 31.12.2015 31.7.2014 RM’000 RM’000 RM’000 RM’000

re-presented

Current tax expenseMalaysian- current period 2,194 1,259 2,035 1,105- (over)/under provision in prior years (719) 659 (719) 659

Total current tax recognised in profit or loss 1,475 1,918 1,316 1,764

Deferred tax expense- origination and reversal of temporary differences 4,685 (5,165) (24) (150)- over provision in prior years (261) (122) - -

4,424 (5,287) (24) (150)

Total income tax expense 5,899 (3,369) 1,292 1,614

Reconciliation of tax expense

(Loss)/Profit before tax (20,736) 1,355 11,049 3,523

Income tax using Malaysian tax rate of 25% (31.7.2014: 25%) (5,184) 339 2,762 881Different tax rate in Labuan (1,267) (8,558) - -Non-deductible expenses, net of non-assessable income 13,526 983 (751) 74Over provision of deferred income tax in prior years (261) (122) - -(Over)/Under provision of current income tax expense in prior year (719) 659 (719) 659Effect of changes in tax rate* (196) 3,330 - -

Total income tax expense 5,899 (3,369) 1,292 1,614

* In the Malaysian Budget 31.12.2015, it was announced that corporate income tax rate will be reduced to 24% for the year of assessment 2016 (“YA 2016”) onwards. Consequently, any temporary differences expected to be incurred in YA 2016 onwards are measured using this rate.

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. Certain subsidiaries of the Company being Malaysian tax residents incorporated in Labuan under the Offshore Companies Act, 1990 are taxed at 3% of profit before tax, or RM20,000 in accordance with the Labuan Offshore Business Activity Tax Act, 1990.



25. Loss per ordinary share

(a) Basic loss per ordinary share

The calculation of basic loss per ordinary share at 31 December 2015 was based on the loss attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding, excluding employee trust shares held by the Company and is calculated as follows:

TotalGroup31.12.2015Loss attributable to owners (RM’000) (29,671)Weighted average number of ordinary shares in issue (’000) 675,040

Basic loss per share (sen) (4.40)

31.7.2014, re-presentedLoss attributable to owners (RM’000) (10,414)Weighted average number of ordinary shares in issue (’000) 462,122

Basic loss per share (sen) (2.25)

(b) Diluted

The calculation of diluted loss per ordinary share at 31 December 2015 was based on loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive effects of convertible loan stocks and the attached dividends payable is calculated as follows:

RM’000Group31.12.2015Loss attributable to owners of the parent (29,671)

RM’000GroupBasic loss per ordinary shareLoss attributable to owners of the parent (10,414)

Number of shares 31.12.2015 31.7.2014 ’000 ’000

Weighted average number of ordinary shares 675,040 462,122

Group 31.12.2015 31.7.2014 sen sen

Diluted loss per share (4.40) (2.25)



25. Loss per ordinary share (continued)

(b) Diluted (continued)

In 2014, 26,494,000 of convertible loan stocks have not been included in the calculation of diluted earnings per share because they are anti-dilutive.

26. Contingent liabilities

The Directors are of the opinion that provision are not required in respect of this matter, as it is not probable that a future outflow of economic benefits will be required.

Group

31.12.2015 31.7.2014

Note RM’000 RM’000

Contingent liability not considered remote

Litigation (unsecured) 26.1 17,800 28,400

26.1 Litigation (unsecured)

Following the compulsory acquisition of land falling under the Expressway that was undertaken by SILK pursuant to the Concession Agreement, certain land owners whose land have been acquired, have filed their objection in Court against the Land Administrator’s award of compensation. In the SILK’s funded stretch, there are 240 cases with claims amounting to RM503.7 million. Out of the 240 cases, 239 cases have been resolved and 1 case with claims of RM17.8 million is still pending Court hearing.

Pursuant to the Turnkey Contract dated 31 July 2001 between the Company and Sunway Construction Sdn. Bhd. (“SCSB”), the amount payable by the Company to SCSB for the land use payments (including expenses and charges incurred by SCSB for the acquisition of land and for removal or resettling of squatters or other occupants on the Expressway) has been contracted at a ceiling amount of RM215 million. Any further amounts that may be awarded by the Court beyond RM215 million will therefore be borne by SCSB.

Based on external legal advice, the Directors have concluded that it is unlikely that the Group and the Company will suffer an economic outflow from this legal case. Therefore, no provision related to this case is made in the financial statements.

27. Operating segments

For management purposes, the Group is organised into business units based on their services, and has two reportable operating segments as follows:

- tolled highway concessionaire; and- offshore marine support services.



27. Operating segments (continued)

Other non-reportable segments comprise operations from investment holding and dormant entities. None of these segments met the quantitative thresholds for reporting segments in 31 December 2015 and 31 July 2014.

Performance is measured based on segment profit after tax as included in the management reports that are reviewed by the Chief Operating Decision Maker (“CODM”). Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.

Segment assets

The total of segment assets is measured based on all assets (including goodwill) of a segment, as included in the internal management reports that are reviewed by the CODM. Segment total assets is used to measure the return on assets of each segment.

Segment liabilities

The total of segment liabilities is measured based on all liabilities of a segment, as included in the internal management reports that are reviewed by the CODM. Segment total liabilities is used to measure the gearing of each segment.

Segment capital expenditure

Segment capital expenditure is the total cost incurred during the financial period to acquire property, vessels and equipment and intangible assets other than goodwill.



NOTES TO THE FINANCIAL STATEMENTS27

. O

per

atin

g s

egm

ents

(co

ntin

ued

)

Th

e fo

llow

ing

tabl

es p

rovid

e an

alys

is of

the

Gro

up’s

reve

nue,

resu

lts, a

sset

s, lia

biliti

es a

nd o

ther

info

rmat

ion

by b

usin

ess

segm

ent:

Tol

led

high

way

Off

shor

e m

arin

e

Adj

ustm

ents

and

Per

con

solid

ated

con

cess

iona

ire

s

uppo

rt s

ervi

ces

Oth

ers

elim

inat

ions

f

inan

cial

sta

tem

ents

31.1

2.20

15

31.7

.201

4 31

.12.

2015

31

.7.2

014

31.1

2.20

15

31.7

.201

4 31

.12.

2015

31

.7.2

014

31.1

2.20

15

31.7

.201

4

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

Rev

enue

Exte

rnal

cus

tom

ers

19

5,25

1 87

,899

40

0,78

4 27

6,88

4 -

- -

- 59

6,03

5 36

4,78

3In

ter-s

egm

ent

-

- -

- 11

,815

4,

854

(11,

815)

(4

,854

) -

-

Tota

l rev

enue

195,

251

87,8

99

400,

784

276,

884

11,8

15

4,85

4 (1

1,81

5)

(4,8

54)

596,

035

364,

783

Seg

men

t (lo

ss)/

prof

it (1

5,08

9)

(36,

488)

10

,221

39

,979

9,

627

1,96

9 (3

1,39

4)

(736

) (2

6,63

5)

4,72

4

Incl

uded

in th

e m

easu

re o

f seg

men

t (lo

ss)/

pro

fit a

re:

Gai

n on

disp

osal

of

prop

erty,

ves

sels

and

equ

ipm

ent

155

- 20

11

,043

-

- -

- 17

5 11

,043

Inte

rest

inco

me

1,

984

1,33

4 57

8 71

4 1,

163

233

- -

3,72

5 2,

281

Impa

irmen

t of p

rope

rty,

ves

sels

and

equi

pmen

t -

- (1

1,82

3)

- -

- -

- (1

1,82

3)

-De

prec

iatio

n an

d a

mor

tisat

ion

(28,

474)

(1

3,66

3)

(140

,372

) (9

1,26

9)

(38)

-

- 2

(168

,884

) (1

04,9

30)

Fina

nce

cost

s

(1

35,1

44)

(94,

045)

(8

8,31

7)

(61,

312)

(9

5)

(660

) 7,

856

4,46

5 (2

15,7

00)

(151

,552

)In

com

e ta

x b

enefi

t/(ex

pens

e)

3,

829

4,11

6 (8

,237

) 89

9 (1

,325

) (1

,638

) (1

66)

(6,7

46)

(5,8

99)

(3,3

69)

Seg

men

t ass

ets

1,

147,

958

1,07

3,02

4 1,

333,

448

1,28

7,73

4 30

8,30

6 28

3,25

0 (2

65,2

08)

(229

,087

) 2,

524,

504

2,41

4,92

1

Incl

uded

in th

e m

easu

re o

f seg

men

t ass

ets

are:

Addi

tions

to n

on-

cur

rent

ass

ets

64

,869

2,

463

224,

326

154,

413

153

- (2

38)

- 28

9,11

0 15

6,87

6

Seg

men

t lia

bilit

ies

1,

166,

441

1,04

8,01

6 1,

126,

170

1,09

0,67

7 73

3 14

,574

(1

7,68

7)

18,4

21

2,27

5,65

7 2,

171,

688

(a)

Not

e


27. Operating segments (continued)

Note:Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements:

(a) Inter-segment transactions and balances are eliminated on consolidation;(b) Other non-cash expenses; and(c) Additions to non-current assets consist of:

Group 1.8.2014 1.8.2013 to to 31.12.2015 31.7.2014 Note RM’000 RM’000

Additions to non-current assets Property, vessels and equipment 3 225,221 154,890 Concession intangible assets 5 63,889 1,986

289,110 156,876

Geographical information

Revenue from the tolled highway concessionaire segment and the offshore marine support services segments are attributable to customers in Malaysia.

All of the Group’s non-current assets are located in Malaysia.

Major customers

During the financial year, the number of major customers of the Group with revenue equal to or more than 10% of the Group’s total revenue is 3 (31.7.2014: 3) representing offshore marine support services segment and the total revenue contributed by these major customers are RM258,604,000 (31.7.2014: RM168,419,000).

28. Financial instruments

28.1 Categories of financial instruments

The table below provides an analysis of financial instruments categorised as follows:

(a) Loans and receivables (“L&R”); and (b) Financial liabilities measured at amortised cost (“FL”).

31.12.2015 31.7.2014 Carrying L&R/ Carrying L&R/ amount (FL) amount (FL) RM’000 RM’000 RM’000 RM’000GroupFinancial assetsTrade and other receivables 76,066 76,066 68,466 68,466Cash and cash equivalents 96,983 96,983 60,665 60,665

173,049 173,049 129,131 129,131



28. Financial instruments (continued)

28.1 Categories of financial instruments (continued)

31.12.2015 31.7.2014 Carrying L&R/ Carrying L&R/ amount (FL) amount (FL) RM’000 RM’000 RM’000 RM’000Financial liabilitiesLoans and borrowings (1,626,019) (1,626,019) (979,054) (979,054)Ijarah rental payable (400,786) (400,786) - -Trade and other payables (99,897) (99,897) (45,531) (45,531)Liability component of convertible loan stocks - - (6,317) (6,317)

(2,126,702) (2,126,702) (1,030,902) (1,030,902)

CompanyFinancial assetsTrade and other receivables 15,472 15,472 7,369 7,369Cash and cash equivalents 16,823 16,823 22,375 22,375

32,295 32,295 29,744 29,744

Financial liabilitiesTrade and other payables (719) (719) (7,207) (7,207)Liability component of convertible loan stocks - - (6,317) (6,317)

(719) (719) (13,524) (13,524)

28.2 Net losses and gains arising from financial instruments


Net (losses)/gains on: Loans and receivables 3,725 2,281 1,031 137 Financial liabilities (220,407) (157,228) (95) (660)

(216,682) (154,947) 936 (523)

28.3 Financial risk management

The Group has exposure to the following risks from its use of financial instruments:

• Credit risk • Liquidity risk • Market risk




28.4 Credit risk

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its trade and other receivables. The Company’s exposure to credit risk arises principally from amount due from subsidiaries.

Receivables

Risk management objectives, policies and processes for managing the risk

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by the carrying amounts in the statement of financial position. The trade receivables mainly represent amount due from 3 (31.7.2014: 3) of its major customers in the oil and gas industry and receivables from the Government of Malaysia amounting to RM25,122,000 (31.7.2014: RM29,682,000) and RM23,826,000 (31.7.2014: RM nil) respectively. The Directors closely monitor the Group’s credit risk exposure to these customers.

Impairment losses

The Group maintains an ageing analysis in respect of trade receivables only. The ageing of trade receivables as at the end of the reporting period was:

Individual Gross impairment Net

Group RM’000 RM’000 RM’000 RM’0002015Not past due 41,694 - 41,694Past due 1 - 30 days 19,069 - 19,069Past due 31 - 90 days 4,531 - 4,531Past due more than 90 days 1,021 - 1,021

66,315 - 66,315

2014Not past due 27,594 - 27,594Past due 1 - 30 days 17,141 - 17,141Past due 31 - 90 days 8,249 - 8,249Past due more than 90 days 5,449 - 5,449

58,433 - 58,433

As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by the carrying amount in the statement of financial position.




28.4 Credit risk (continued)

Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their realisable values. A significant portion of these receivables are regular customers that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due more than 90 days, which are deemed to have higher credit risk, are monitored individually.

Inter-company balances


The receivables from related companies principally arise from dividends and fees receivable. The Company does not specifically monitor the recoverability of these amounts as balances are repayable on demand.


As at the end of the reporting period, the maximum exposure to credit risk represented by their carrying amounts in the statement of financial position.

Impairment losses

As at the end of the reporting period, there was no indication that the amount due from subsidiaries are not recoverable.

Financial guarantees


The Company provides financial guarantees to banks in respect of banking facilities granted to certain subsidiaries. The Company monitors on an ongoing basis the results of the subsidiaries and repayment made by the subsidiaries.


The maximum exposure to credit risk amounts to RM596,007,000 (31.7.2014: RM554,550,000) representing the outstanding banking facilities of the Group as at end of the reporting period which are guaranteed by the Company.

As at the end of the reporting period, there was no indication that any subsidiary would default on repayment.

Cash and cash equivalents


The Group and the Company are also exposed to counterparty credit risk from licensed financial institutions through placement of deposits and bank balances. Placements are only made with approved counterparties who met the appropriate ratings and other relevant criterias.


Most of these balances are unsecured, however, in view of the sound credit ratings of counterparties, management does not expect any counterparties to fail to meet its obligations.




28.5 Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables.

The Group maintains a level of cash and cash equivalents deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.

Maturity analysis

The table below summarises the maturity profile of the Group’s financial liabilities as at the end of the reporting period based on undiscounted contractual payments:

Carrying Contractual Contractual Under 1 – 2 2 – 5 More than amount interest rate cash flows 1 year years years 5 years31.12.2015 RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000Group

Secured term loans 930,044 4.75% - 7.5% 1,195,592 196,953 184,380 472,868 341,391Sukuk Mudharabah 1,058,458 8% plus profit 1,886,082 56,519 124,318 384,357 1,320,888 and Ijarah rental payable sharing as disclosed in Note 17 Hire purchase liabilities 326 2.3% - 3.35% 353 144 109 100 -Revolving credit 35,000 5.8% - 6.25% 47,813 47,813 - - -Bank overdrafts 2,977 7.85% - 8.1% 3,214 3,214 - - -Trade and other payables 99,897 99,897 99,897 - - -

2,126,702 3,232,951 404,540 308,807 857,325 1,662,279

CompanyTrade and other payables 719 719 719 - - -Financial guarantee - 135,023 135,023 - - - 719 135,742 135,742 - - -

31.7.2014 GroupSecured term loans 938,679 4.75% - 7.20% 1,176,935 170,339 182,572 473,574 350,450Hire purchase liabilities 375 2.30% - 2.90% 409 129 97 183 -Revolving credit 40,000 5.30% - 5.50% 42,160 42,160 - - -Trade and other payables 45,531 45,531 45,531 - - -Liability component of convertible loan stocks 6,317 3% 6,414 6,414 - - -

1,030,902 1,271,449 264,573 182,669 473,757 350,450

CompanyTrade and other payables 7,207 7,207 7,207 - - -Liability component of convertible loan stocks 6,317 3% 6,414 6,414 - - -Financial guarantee - 108,409 108,409 - - -

13,524 122,030 122,030 - - -




28.6 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices that will affect the Group’s financial position or cash flows.

28.6.1 Currency risk

The Group is exposed to foreign currency risk on purchases and bank balances that are denominated in a currency other than the respective functional currencies of the Group entities. The currencies giving rise to this risk are primarily U.S. Dollar (“USD”), Singapore Dollars (“SGD”) and Euro.


Exposure to foreign currency risk is monitored on an ongoing basis. The Group does not perform hedging on foreign currency transactions.

Exposure to foreign currency risk

The Group’s exposure to foreign currency (a currency which is other than the currency of the Group entities) risk, based on carrying amounts as at the end of the reporting period was:

Denominated in

USD SGD EURO

Group RM’000 RM’000 RM’000

31.12.2015

Cash and cash equivalents 33 - -Trade and other payables (723) (111) (4)Net exposure in the statement of financial position (690) (111) (4)

31.7.2014

Cash and cash equivalents 204 - -Trade and other payables (4,320) (299) (216)Net exposure in the statement of financial position (4,116) (299) (216)

Currency risk sensitivity analysis

A 10% (2014: 10%) strengthening of the Ringgit Malaysia against the following currencies at the end of the reporting period would have increased/(decreased) pre-tax profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates remained constant.




28.6 Market risk (continued)

28.6.1 Currency risk (continued)

Currency risk sensitivity analysis (continued)

Profit or loss 1.8.2014 1.8.2013 to to 31.12.2015 31.7.2014 RM’000 RM’000

Group USD (69) (412)SGD (11) (30)EURO - (22)

(80) (464)

A 10% (31.7.2014: 10%) weakening of Ringgit Malaysia against the above currencies at the end of the reporting period would have had equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remained constant.

28.6.2 Interest rate risk

The Group’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates. Short term receivables and payables are not significantly exposed to interest rate risk.


Management has an informal interest rate policy in place and management reviews interest rates exposure closely.

Exposure to interest rate risk

The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instruments, based on carrying amounts as at the end of the reporting period was:


Fixed rate instrumentsFinancial assets 85,643 43,633 16,800 21,750Financial liabilities (666,958) (695,330) - -

(581,315) (651,697) 16,800 21,750

Floating rate instrumentsFinancial liabilities (959,061) (283,723) - -




28.6 Market risk (continued)

28.6.2 Interest rate risk (continued)

Interest rate risk sensitivity analysis

FairvaluesensitivityanalysisforfixedrateinstrumentsThe Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.

CashflowsensitivityanalysisforvariablerateinstrumentsA change of 1% (31.7.2014: 1%) in effective interest rates at the end of the reporting period would have increased/(decreased) equity and pre-tax profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. Equity and profit or loss 1% 1% Increase Decrease RM’000 RM’000Group31.12.2015Floating rate instruments (9,591) 9,591

31.7.2014Floating rate instruments (2,837) 2,837

28.7 Fair value information

The carrying amounts of cash and cash equivalents, trade and other receivables and trade and other payables reasonably approximate their fair values due to the relatively short term nature of these financial instruments.

The fair values of loans and borrowings, together with the carrying amounts shown in the statement of financial position, are as follows:

Fair value of financial instruments not carried at Carrying fair value* amount Level 1 Level 2 Level 3 Total RM’000 RM’000 RM’000 RM’000 RM’000Group31.12.2015Financial liabilitiesSecured term loans - - 940,732 940,732 930,044Sukuk Mudharabah and ijarah rental payable - - 1,058,458 1,058,458 1,058,458Hire purchase payables - - 326 326 326

- - 1,999,516 1,999,516 1,988,828

31.7.2014Financial liabilitiesSecured term loans - - 929,763 929,763 938,679Hire purchase payables - - 375 375 375

- - 930,138 930,138 939,054

* There are no financial instruments carried at fair value.




28.7 Fair value information (continued)

Policy on transfer between levels

The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer.

The following table shows the valuation techniques used in the determination of fair values within Level 3.

Type Description of valuation techniques and inputs used

Secured term loans, Sukuk Discounted cash flows using the current market rate of borrowingMudharabah and hire of the respective Group entities as at the reporting date.purchase payables

Level 1 fair value

Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical financial assets or liabilities that the entity can access at the measurement date.

Level 2 fair value

Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the financial assets or liabilities, either directly or indirectly.

Non-derivativefinancialliabilities

Fair value, which is determined for disclosure purposes, is 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.

Transfer between Level 1 and Level 2 fair values

There has been no transfer between Level 1 and 2 fair values during the financial year (31.7.2014: no transfer in either directions).

Level 3 fair value

Level 3 fair value is estimated using unobservable inputs for the financial liabilities using discounted cash flow method.

29. Capital management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

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 return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the periods ended 31 December 2015 and 31 July 2014.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group considers the net debt as loans and borrowings, trade and other payables, ijarah rental payable, less cash and cash equivalents.



29. Capital management (continued)


Continuing operationsLoans and borrowings 16 1,626,019 985,371 - -Trade and other payables 18 99,897 45,531 719 7,207Ijarah rental payable 19 400,786 - - -Less: Cash and cash equivalents 10 (96,983) (60,665) (16,823) (22,375)

Net debt from continuing operations 2,029,719 970,237 (16,104) (15,168)

Discontinued operationSukuk Mudharabah 17 - 691,381 - -Trade and other payables 18 - 37,711 - -Ijarah rental payable 19 - 327,250 - -Less: Cash and cash equivalents 10 - (53,844) - -

Net debt from discontinued operation - 1,002,498 - - Total net debt 2,029,719 1,972,735 (16,104) (15,168)Total equity attributable to the owners of the Company 186,803 184,715 306,365 264,849

Capital and net debt 2,216,522 2,157,450 290,261 249,681

Gearing ratio 92% 91% n/a n/a

30. Related parties

Identity of related parties

For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control or jointly 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. Related parties may be individuals or other entities.

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. Key management personnel include all the Directors of the Group.



30. Related parties (continued)

Significant related party transactions

The significant related party transactions of the Group and of the Company, other than key management personnel compensation, are as follows:

Company 31.12.2015 31.7.2014 RM’000 RM’000Subsidiaries:Dividend income 3,499 70Management fees 595 420Corporate guarantee fees 7,721 4,364Payment on behalf of the Company 53 -Back charge of professional fees - 399

The Directors of the Company are of the opinion that the above transactions have been entered into in the normal course of business and have been established on terms and conditions that are mutually agreed between the companies.

The outstanding balances arising from the above transactions have been disclosed in Note 9 and Note 18 to the financial statements.

Compensation of key management personnel


Salaries and bonus 6,348 4,536 506 284Fees 714 362 422 156Allowance and other emoluments 172 570 71 90Defined contribution plan 786 548 61 24Other benefits* 726 90 - -

8,746 6,106 1,060 554

* Included in other benefits is RM597,000 (2014: RM nil) employee benefits arising from the distribution of trust shares as disclosed in Note 15.

31. Capital and other commitments

Capital expenditure as at the reporting date is as follows: Group 31.12.2015 31.7.2014 RM’000 RM’000Capital expenditureApproved and contracted for:Property, vessels and equipment 72,104 -Highway development expenditures 8,018 -



31. Capital and other commitments (continued)

Group

31.12.2015 31.7.2014

RM’000 RM’000

Approved but not contracted for:Property, vessels and equipment 51,864 16,600Highway development expenditures 8,826 -

32. Acquisition of non-controlling interests

During the financial year ended 31 July 2014, the Group acquired the remaining 49% shares (through its subsidiary, Jasa Merin) in JM Global 1 (Labuan) Plc, JM Global 2 (Labuan) Plc, JM Global 3 (Labuan) Plc and JM Global 4 (Labuan) Plc for RM49,463,000 in cash, increasing its ownership from 51% to 100% and accordingly increase the Group effective ownership interest in these subsidiaries from 36% to 70%. The total carrying amount of these subsidiaries was RM92,004,000. The Group recognised a decrease in non-controlling interests of RM46,419,000 and a decrease in retained earnings of RM3,044,000.

The following summarises the effect of changes in the equity interest in JM Global 1 (Labuan) Plc, JM Global 2 (Labuan) Plc, JM Global 3 (Labuan) Plc and JM Global 4 (Labuan) Plc that is attributable to the owners of the Company:

31.7.2014

RM’000

Equity interest at 1 August 2013 41,153Effect of increase in Company’s ownership interest 46,419Share of comprehensive income 15,561

Equity interest at 31 July 2014 103,133

33. Comparative figures

In the previous year, the Group entered into a share sale agreement to dispose its entire interest in the toll concessionaire segment. The agreement was subsequently aborted, and accordingly, prior period results of the segment have been represented as part of the continuing operations i.e. consistent with the current year’s presentation.



33. Comparative figures (continued)

Reconciliation of profit or loss and other comprehensive income for the financial year ended 31 July 2014

Effect of reclassification from As previously discontinued stated operation Re-presented RM’000 RM’000 RM’000Continuing operationsRevenue 276,884 87,899 364,783Direct costs (169,733) (28,105) (197,838)

Gross profit 107,151 59,794 166,945Other income 11,043 985 12,028Administrative expenses (19,675) (8,672) (28,347)

Results from operating activities 98,519 52,107 150,626

Finance income 947 1,334 2,281Finance costs (57,507) (94,045) (151,552)

Net finance costs (56,560) (92,711) (149,271)

Profit before tax 41,959 (40,604) 1,355Tax expense (747) 4,116 3,369

Profit for the year 41,212 (36,488) 4,724

Discontinued operationLoss from discontinued operation, net of tax (36,488) 36,488 -

Profit net of tax, representing total comprehensive income for the year 4,724 - 4,724

(Loss)/Profit and total comprehensive (expense)/income attributable to:

Owners of the Company (10,414) - (10,414)Non-controlling interests 15,138 - 15,138

Profit and total comprehensive income for the year 4,724 - 4,724



34. Supplementary information on the breakdown of realised and unrealised profits or losses

The breakdown of the retained earnings of the Group and of the Company as at 31 December 2015 into realised and unrealised profits or losses pursuant to Paragraph 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements are as follows:


Total retained earnings of theCompany and its subsidiaries:- Realised 29,005 (15,570) 7,215 3,398- Unrealised (124,964) (73,481) - (891)

(95,959) (89,051) 7,215 2,507Add: Consolidation adjustments 112,700 140,512 - -

Total retained earnings 16,741 51,461 7,215 2,507

The determination of realised and unrealised profits is based on the Guidance of 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, issued by Malaysian Institute of Accountants on 20 December 2010.



ADDITIONAL COMPLIANCE INFORMATION

The information set out below is disclosed in compliance with the Main Market Listing Requirements of Bursa Securities:-

1. STATUS OF UTILISATION OF PROCEEDS RAISED FROM CORPORATE PROPOSAL

There is no corporate exercise that has been completed during the current financial period or is pending as at the end of the current financial period.

2. SHARE BUY-BACK

The Company does not have a scheme to buy-back its own shares.

3. OPTIONS OVER ORDINARY SHARES, WARRANTS OR CONVERTIBLE SECURITIES EXERCISED

During the financial period, the Company increased its issued and paid up share capital by way of the conversion of 39,950,000 Redeemable Convertible Unsecured Loan Stocks and dividends payable to 185,454,417 ordinary shares of RM0.25 each at par.

Apart from the above, the Company did not issue any convertible securities or grant any options over ordinary shares.

4. AMERICAN DEPOSITORY RECEIPT (“ADR”) OR GLOBAL DEPOSITORY RECEIPT (“GDR”) PROGRAMME

The Company did not sponsor any ADR or GDR programme during the financial period ended 31 December 2015.

5. SANCTIONS AND/OR PENALTIES

There were no public sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the financial period ended 31 December 2015.

6. NON-AUDIT FEES

The non-audit fees paid/payable to the independent auditors of the Company and its subsidiaries for the financial period ended 31 December 2015 amounted to RM108,000.

7. VARIATION IN RESULTS

There was no variance of 10% or more between the audited results for the financial period ended 31 December 2015 and the unaudited results previously announced by the Company.

8. PROFIT GUARANTEE

There was no profit guarantee given by the Company during the financial period ended 31 December 2015.

9. MATERIAL CONTRACTS INVOLVING DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

There were no material contracts (not being contracts entered into in the ordinary course of business) entered into by the Company and/or its subsidiaries involving directors’ and major shareholders’ interests during the financial period ended 31 December 2015.

10. REVALUATION POLICY ON LANDED PROPERTIES

The Company does not have a revaluation policy on landed properties.

11. STATEMENT BY AUDIT COMMITTEE IN RELATION TO THE ALLOCATION OF OPTIONS OVER ORDINARY SHARES PURSUANT TO THE EMPLOYEES’ SHARE OPTION SCHEME

As at 31 December 2015, the Company has not allocated any options over ordinary shares pursuant to Employees’ Share Option Scheme.

12. RECURRENT RELATED PARTY TRANSACTIONS There were no material recurrent related party transactions of a revenue nature entered into during the financial period

ended 31 December 2015.


No. of Shares %

1. Abdul Rahman bin Ali* 203,090,834 28.95% 2. Dato’ Mohd Azlan Hashim** 160,454,226 22.87% 3. Johan Zainuddin bin Dzulkifli*** 108,482,676 15.46% 4. Bijak Permai Sdn Bhd 81,236,333 11.58% 5. Infra Bumitek Sdn Bhd 59,555,426 8.49% Notes: * Direct and deemed interest through Temuras Jaya Sdn. Bhd. ** Deemed interest through Infra Bumitek Sdn. Bhd., Bijak Permai Sdn. Bhd., and RHB Capital Nominees (Tempatan) Sdn. Bhd.

*** Direct and deemed interest through Infra Bumitek Sdn. Bhd.

SUBSTANTIAL SHAREHOLDERS AS AT 18 MARCH 2016


Ordinary shares of RM0.25 each No. of Shares %

1. Dato’ Mohd Azlan Hashim - deemed interest* 160,454,226 22.87%

2. Dato’ Hj. Razali bin Mohd Yusof - deemed interest** 32,000,000 4.56% 3. Nik Abdul Malik bin Nik Mohd Amin - direct interest 2,400,000 0.34% 4. Dato’ Abdul Hamid bin Sh. Mohamed - direct interest 1,000,000 0.14% 5. Tai Keat Chai - deemed interest*** 1,000,000 0.14% Notes: * Deemed interest through Bijak Permai Sdn. Bhd., Infra Bumitek Sdn. Bhd. and RHB Capital Nominees (Tempatan) Sdn. Bhd. ** Deemed interest through Titian Tegap Sdn. Bhd. and Amanahraya Trustees Berhad *** Deemed interest through the shares held by his spouse

DIRECTORS’ INTERESTS IN SHARES AS AT 18 MARCH 2016


ANALYSIS OF SHAREHOLDINGS AS AT 18 MARCH 2016

Cumulative Convertible - Redeemable Preference Ordinary Shares Shares (“CC-RPS”) Total (RM)

Authorised share capital : 3,992,000,000 20,000,000 1,000,000,000 Issued and paid-up share capital : 701,533,561 - 175,383,390Class of shares : Ordinary Shares of RM0.25 eachVoting rights : One vote per ordinary share

Note: The CC-RPS has matured on 5 November 2013 and all outstanding preference shares at that date were converted into ordinary shares of RM0.25 each.

(A) ORDINARY SHARES

Distribution of shareholdings

Size of Shareholdings No. of % of No. of % of Shareholders Shareholders shares Held Shareholdings

1 - 99 33 1.24% 1,102 0.00%100 - 1,000 566 21.18% 491,540 0.07%1,001 - 10,000 957 35.82% 5,851,500 0.83%10,001 - 100,000 846 31.66% 31,522,900 4.49%100,001 - 35,076,677* 266 9.96% 315,630,383 44.99%35,076,678 and above** 4 0.15% 348,036,136 49.61% 2,672 100.00% 701,533,561 100.00%

* Less than 5% of issued shares** 5% and above of the issued shares


ANALYSIS OF SHAREHOLDINGS AS AT 18 MARCH 2016THIRTY LARGEST SHAREHOLDERS AS PER THE REGISTER OF DEPOSITORS

Name of Shareholders Name of Beneficial Owners No. of Shares %

1. Abdul Rahman bin Ali 182,781,751 26.05%2. Bijak Permai Sdn. Bhd. 81,236,333 11.58%3. Johan Zainuddin bin Dzulkifli 48,927,250 6.97%4. ABB Nominee (Tempatan) Sdn. Bhd. Infra Bumitek Sdn. Bhd. 35,090,802 5.00%5. Titian Tegap Sdn. Bhd. 30,000,000 4.28%6. Infra Bumitek Sdn. Bhd. 24,464,624 3.49%7. Temuras Jaya Sdn. Bhd. 20,309,083 2.89%8. Suasa Unggul Sdn. Bhd. 20,000,000 2.85%9. RHB Capital Nominees (Tempatan) Sdn. Bhd. Dato’ Mohd Azlan Hashim 19,662,467 2.80%10. Nor Ashikin binti Khamis 14,835,100 2.11%11. Pelaburan MARA Berhad 12,500,000 1.78%12. EB Nominees (Tempatan) Sendirian Berhad Tey Chee Thong 10,500,000 1.50%13. Tey Chee Thong 10,072,321 1.44%14. Maybank Nominees (Tempatan) Sdn. Bhd. Wee Seng Yeen 5,218,000 0.74%15. CIMSEC Nominees (Tempatan) Sdn. Bhd. Mohammed Amin bin Mahmud 5,109,700 0.73%16. Maybank Nominees (Tempatan) Sdn. Bhd. Etiqa Takaful Berhad (Shareholders’ FD) 3,733,100 0.53%17. Maybank Nominees (Tempatan) Sdn. Bhd. Etiqa Insurance Berhad (Life Non - Par FD) 3,389,900 0.48%18. Mazlan bin Ismail 3,300,000 0.47%19. Maybank Nominees (Tempatan) Sdn. Bhd. Etiqa Insurance Berhad (General Fund) 3,086,200 0.44%20. Maybank Nominees (Tempatan) Sdn. Bhd. Etiqa Takaful Berhad (Group PRF EQ) 3,052,300 0.44%21. Maybank Nominees (Tempatan) Sdn. Bhd. Etiqa Insurance Berhad (PAR Fund 2) 2,531,700 0.36%22. MIDF Amanah Investment Nominees (Tempatan) Intan Ainirawati binti Abdul Razak 2,443,000 0.35% Sdn. Bhd.23. Mohtar bin Nong 2,400,000 0.34%24. Nik Abdul Malik bin Nik Mohd Amin 2,400,000 0.34%25. How Wong Yuh 2,300,000 0.33%26. Maybank Nominees (Tempatan) Sdn. Bhd. Etiqa Insurance Berhad (Shareholders’ Fund) 2,278,100 0.32%27. SJ Sec Nominees (Tempatan) Sdn. Bhd. Hafidah binti Pawanchik 2,253,000 0.32%28. RHB Nominees (Tempatan) Sdn. Bhd. Tey Suu Tain 2,042,000 0.29%29. Amanahraya Trustees Berhad Dato’ Hj. Razali bin Mohd Yusof 2,000,000 0.29%30. Fakhri Yassin bin Mahiaddin 2,000,000 0.29%


NOTICE OF 18TH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Eighteenth Annual General Meeting of SILK Holdings Berhad (“the Company”) will be held at Dewan Perdana, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara Off Jalan Damansara, 60000 Kuala Lumpur on Friday, 17 June 2016 at 10.00 am for the following purposes:

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the financial period ended 31 December 2015 together with the Reports of the Directors and Auditors thereon.

(Resolution 1)

2. To re-elect Dato’ Haji Razali bin Mohd Yusof who retire pursuant to Article 89 of the Company’s Articles of Association.

(Resolution 2)

3. To re-elect the following Directors who retire by rotation pursuant to Article 107 of the Company’s Articles of Association, and being eligible, offer themselves for re-election:(i) Dato’ Harun bin Md Idris(ii) Nik Abdul Malik bin Nik Mohd Amin

(Resolution 3)

4. To approve the Directors’ fees amounting to RM599,000 in respect of the financial period ended 31 December 2015.

(Resolution 4)

5. To re-appoint Messrs KPMG as Auditors and to authorise the Directors to determine their remuneration.

(Resolution 5)

AS SPECIAL BUSINESS

To consider and, if thought fit, to pass with or without modifications, the following Resolutions:-

6. Re-Appointment of Tan Sri Datuk Seri Razman M Hashim as a Director Pursuant to Section 129(6) of the Companies Act, 1965

(Special Resolution 6)

“THAT Tan Sri Datuk Seri Razman M Hashim, being over the age of 70 years and retiring in accordance with Section 129(6) of the Companies Act 1965, be and is hereby re-appointed as director of the Company to hold office until the conclusion of the next Annual General Meeting of the Company.”

7. To transact any other business of the Company of which due notice shall have been given.

By Order of the Board

LIM HUI MING (BC/L/740)Company Secretary

Kuala Lumpur29th day of April 2016



NOTES:

1. Appointment of Proxy

i. A member of the Company entitled to attend and vote, is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy need not be a member of the Company.

ii. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing, or if the appointer is a corporation, either under the corporation’s seal, or under the hand of an officer or attorney duly authorised.

iii. If a member appoints 2 proxies, the appointment will be invalid unless he states the percentage of his shareholding to be represented by each proxy.

iv. The instrument appointing a proxy must be deposited at the Registered office of the Company at Level 22, Axiata Tower, No. 9, Jalan Stesen Sentral 5, Kuala Lumpur Sentral, 50470 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof, either by hand, post, electronic mail or fax to (03) 2273-8310. In the case where the member is a corporation and the proxy form is delivered by fax or electronic mail, the original form shall also be deposited at the Registered office, either by hand or post not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

2. Explanatory Notes on Special Businesses

i. Special Resolution 6 – Section 129(6) of the Companies Act, 1965

The Special Resolution proposed under Agenda 6 is to seek shareholders approval for the appointment of a Director who is over the age of 70 years.

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

DIRECTORS WHO ARE STANDING FOR RE-ELECTION

(a) Dato’ Harun bin Md Idris

(b) Nik Abdul Malik bin Nik Mohd Amin

(c) Dato’ Hj Razali bin Mohd Yusof

(d) Tan Sri Datuk Seri Razman M Hashim

The details of the above Directors who are standing for re-election are set out on page 3 to page 5 of the Annual Report.

Their interests in the securities of the Company are set out on page 105 of the Annual Report.



NOTICE IS HEREBY GIVEN THAT the Nineteenth Annual General Meeting of SILK Holdings Berhad (“the Company”) will be held at Dewan Perdana, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara Off Jalan Damansara, 60000 Kuala Lumpur on Friday, 17 June 2016 at 10.30 am or immediately after the conclusion of the 18th Annual General Meeting for the following purposes:

AS ORDINARY BUSINESS

1. To re-elect the following Directors who retire by rotation pursuant to Article 107 of the Company’s Articles of Association, and being eligible, offer themselves for re-election:(i) Dato’ Mohd Azlan Hashim(ii) Tai Keat Chai

(Resolution 1)

2. To approve the payment of Directors’ fees for the Financial Year Ending 31 December 2016, not exceeding RM600,000, on a quarterly basis after the end of each quarter.

(Resolution 2)

3. To re-appoint Messrs KPMG as Auditors and to authorise the Directors to determine their remuneration.

(Resolution 3)

AS SPECIAL BUSINESS

To consider and, if thought fit, to pass with or without modifications, the following Resolutions:-

4. Re-Appointment of Tan Sri Datuk Seri Razman M Hashim as a Director Pursuant to Section 129(6) of the Companies Act, 1965

(Special Resolution 4)

“THAT Tan Sri Datuk Seri Razman M Hashim, being over the age of 70 years and retiring in accordance with Section 129(6) of the Companies Act 1965, be and is hereby re-appointed as director of the Company to hold office until the conclusion of the next Annual General Meeting of the Company.”

5. Authority to Allot and Issue Shares Pursuant to Section 132D of the Companies Act, 1965 (Resolution 5)

“THAT pursuant to Section 132D of the Companies Act, 1965 and approvals from Bursa Malaysia Securities Berhad for the listing of and quotation for the additional shares so issued and other relevant authorities, where approval is necessary, authority be and is hereby given to the Directors to allot and issue shares in the Company at any point of time upon such terms and conditions and for such purposes as the Directors may in their absolute discretion deem fit provided always that the aggregate number of shares to be issued shall not exceed 10% of the issued share capital of the Company for the time being AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

6. To transact any other business of the Company of which due notice shall have been given.

By Order of the Board

LIM HUI MING (BC/L/740)Company Secretary

Kuala Lumpur29th day of April 2016


NOTES:

1. Appointment of Proxy

i. A member of the Company entitled to attend and vote, is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy need not be a member of the Company.

ii. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing, or if the appointer is a corporation, either under the corporation’s seal, or under the hand of an officer or attorney duly authorised.

iii. If a member appoints 2 proxies, the appointment will be invalid unless he states the percentage of his shareholding to be represented by each proxy.

iv. The instrument appointing a proxy must be deposited at the Registered office of the Company at Level 22, Axiata Tower, No. 9, Jalan Stesen Sentral 5, Kuala Lumpur Sentral, 50470 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof, either by hand, post, electronic mail or fax to (03) 2273-8310. In the case where the member is a corporation and the proxy form is delivered by fax or electronic mail, the original form shall also be deposited at the Registered office, either by hand or post not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

2. Explanatory Notes on Special Businesses

i. Special Resolution 4 – Section 129(6) of the Companies Act, 1965

The Special Resolution proposed under Agenda 4 is to seek shareholders approval for the appointment of a Director who is over the age of 70 years.

ii. Ordinary Resolution 5 – Authority to Allot and Issue new Ordinary Shares pursuant to Section 132D of the Companies Act 1965

The Ordinary Resolution proposed under Agenda 5 is to seek a renewal of the general mandate which was approved at the 17th Annual General Meeting of the Company held on 21 November 2014 and will lapse at the conclusion of the 18th Annual General Meeting to be held on 17 June 2016.

The general mandate, if approved, will provide flexibility to the Company for any possible fund raising activities, including but not limited to placing of shares for the purpose of funding future investment project(s) and acquisition(s) and for strategic reasons.

In order to eliminate any delay and costs in convening a general meeting to specifically approve such issuance of shares, it is considered appropriate that the Directors be empowered, as proposed under item 5 of the Agenda, to allot and issue new shares in the Company up to an amount not exceeding in total ten percent (10%) of the issued share capital of the Company for the time being. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next annual general meeting of the Company.

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

DIRECTORS WHO ARE STANDING FOR RE-ELECTION

(a) Dato’ Mohd Azlan Hashim

(b) Tai Keat Chai

(c) Tan Sri Datuk Seri Razman M Hashim

The details of the above Directors who are standing for re-election are set out on page 3 to page 5 of the Annual Report.

Their interests in the securities of the Company are set out on page 105 of the Annual Report.


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FORM OF PROXY

18th Annual General Meeting

Number of share(s) heldCDS Account No.

PROXY “A”

I/We …………………………………..…..…………. *NRIC No./Passport No./Company No………………………………...……....… Tel./HP No ………………….…………………………………… of ...…………………………...……………………………………......…. ……………………………………………………...………………………………………………….………………………………....being a member of SILK HOLDINGS BERHAD and entitled to vote hereby appoint…………………………………………………....…………… *NRIC No./Passport No …………………………………….…........ Tel./HP No ………………….…………………………………… of ...…………………………...……………………………………..…......or failing him/her, the Chairman of the Meeting as my/our proxy to attend and vote for me/us on my/our behalf at the 18th Annual General Meeting of the Company to be held at Dewan Perdana, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara Off Jalan Damansara, 60000 Kuala Lumpur on Friday, 17 June 2016 at 10.00 am and at any adjournment thereof.

WHERE THE MEMBER DESIRES TO APPOINT A 2ND PROXY, THIS SECTION MUST ALSO BE COMPLETED, OTHERWISE IT SHOULD BE DELETED

PROXY “B”

I/We ………………………………………….. *NRIC No./Passport No./Company No…………………….…….…….…………..… Tel./HP No …………………………..………………………. of ……………………………….…….…………...……......... being a member of SILK HOLDINGS BERHAD and entitled to vote hereby appoint………..………....................................…. *NRIC No./Passport No ……………………….................………Tel./HP No ……………………...………………………. of …………………………...………………………….…….…..………or failing him/her, the Chairman of the Meeting as my/our proxy to attend and vote for me/us on my/our behalf at the 18th Annual General Meeting of the Company to be held at Dewan Perdana, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara Off Jalan Damansara, 60000 Kuala Lumpur on Friday, 17 June 2016 at 10.00 am and at any adjournment thereof.

The proportions of my/our holding to be represented by my/our proxies are as follows :

1st Proxy “A” - % (to be completed)

2nd Proxy “B” - % (to be completed)

Total: 100 %In case of a vote taken by a show of hands, *1st Proxy “A” / *2nd Proxy “B” shall vote on my/our behalf.

* Delete if inapplicableMy/our proxy/proxies shall vote as follows :(Please indicate with an “X” in the space below how you wish your votes to be cast. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting on the resolutions at his/their discretion)

No. RESOLUTIONS

1ST PROXY “A” 2ND PROXY “B”

FOR AGAINST FOR AGAINST

1. To receive the Audited Financial Statements of the Company for the financial period ended 31 December 2015 together with the Directors’ and Auditors’ Reports thereon.

2. To re-elect the following Directors:- Dato’ Haji Razali bin Mohd Yusof

3. Dato’ Harun bin Md Idris4. Nik Abdul Malik bin Nik Mohd Amin5. To approve the payment of Directors’ fees6. To re-appoint Messrs. KPMG as Auditors and to authorise and the

Directors to fix their remuneration7. To re-elect Tan Sri Datuk Seri Razman M Hashim as Director

Dated this ………………………day of …………………………2016 Signature of Member……………………………………………………

NOTES: 1. A member of the Company entitled to attend and vote, is entitled to appoint a proxy or proxy to attend and vote in his stead. A proxy need not be a

member of the Company.2. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing, or if the appointer is a

corporation, either under the corporation’s seal, or under the hand of an officer or attorney duly authorised.3. If a member appoints 2 proxies, the appointment will be invalid unless he states the percentage of his shareholding to be represented by each proxy.4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Level 22, Axiata Tower, No. 9, Jalan Stesen Sentral

5, Kuala Lumpur Sentral, 50470 Kuala Lumpur, Malaysia not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof, either by hand, post, electronic mail or fax to 03-2273-8310. In the case where the member is a corporation and the proxy form is delivered by fax or electronic mail, the original form shall also be deposited at the Registered Office, either by hand or post not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

SILK HOLDINGS BERHAD (405897-V)(Incorporated in Malaysia) Registered Office: Level 22, Axiata TowerNo. 9, Jalan Stesen Sentral 5 Kuala Lumpur Sentral 50470 Kuala Lumpur Tel : 03-2273-1919 Fax : 03-2273-8310

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FOLD THIS FLAP FOR SEALING

FOLD HERE

FOLD HERE

AFFIXSTAMPHERE

The Company Secretary SILK HOLDINGS BERHAD (405897-V) Level 22, Axiata Tower, No. 9 Jalan Stesen Sentral 5Kuala Lumpur Sentral 50470 Kuala Lumpur

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FORM OF PROXY

19th Annual General Meeting

Number of share(s) heldCDS Account No.

PROXY “A”

I/We …………………………………..…..…………. *NRIC No./Passport No./Company No………………………………...……....… Tel./HP No ………………….…………………………………… of ...…………………………...……………………………………......…. ……………………………………………………...………………………………………………….………………………………....being a member of SILK HOLDINGS BERHAD and entitled to vote hereby appoint…………………………………………………....…………… *NRIC No./Passport No …………………………………….…........ Tel./HP No ………………….…………………………………… of ...…………………………...……………………………………..…......or failing him/her, the Chairman of the Meeting as my/our proxy to attend and vote for me/us on my/our behalf at the 19th Annual General Meeting of the Company to be held at Dewan Perdana, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara Off Jalan Damansara, 60000 Kuala Lumpur on Friday, 17 June 2016 at 10.30 am or immediately upon conclusion of the 18th Annual General Meeting and at any adjournment thereof.WHERE THE MEMBER DESIRES TO APPOINT A 2ND PROXY, THIS SECTION MUST ALSO BE COMPLETED, OTHERWISE IT SHOULD BE DELETED

PROXY “B”

I/We ………………………………………….. *NRIC No./Passport No./Company No…………………….…….…….…………..… Tel./HP No …………………………..………………………. of ……………………………….…….…………...……......... being a member of SILK HOLDINGS BERHAD and entitled to vote hereby appoint………..………....................................…. *NRIC No./Passport No ……………………….................………Tel./HP No ……………………...………………………. of …………………………...………………………….…….…..………or failing him/her, the Chairman of the Meeting as my/our proxy to attend and vote for me/us on my/our behalf at the 19th Annual General Meeting of the Company to be held at Dewan Perdana, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara Off Jalan Damansara, 60000 Kuala Lumpur on Friday, 17 June 2016 at 10.30 am or immediately upon conclusion of the 18th Annual General Meeting and at any adjournment thereof.The proportions of my/our holding to be represented by my/our proxies are as follows :

1st Proxy “A” - % (to be completed)

2nd Proxy “B” - % (to be completed)

Total: 100 %In case of a vote taken by a show of hands, *1st Proxy “A” / *2nd Proxy “B” shall vote on my/our behalf.

* Delete if inapplicableMy/our proxy/proxies shall vote as follows :(Please indicate with an “X” in the space below how you wish your votes to be cast. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting on the resolutions at his/their discretion)

No. RESOLUTIONS

1ST PROXY “A” 2ND PROXY “B”

FOR AGAINST FOR AGAINST

1. To re-elect the following Directors:- Dato’ Mohd Azlan Hashim

2. Tai Keat Chai3. To approve the payment of Directors’ fees4. To re-appoint Messrs. KPMG as Auditors and to authorise and the

Directors to fix their remuneration 5. To re-elect Tan Sri Datuk Seri Razman M Hashim as Director6. To authorise the issue of shares pursuant to Section 132D of the

Companies Act, 1965

Dated this ………………………day of …………………………2016 Signature of Member……………………………………………………

NOTES: 1. A member of the Company entitled to attend and vote, is entitled to appoint a proxy or proxy to attend and vote in his stead. A proxy need not be a

member of the Company.2. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing, or if the appointer is a

corporation, either under the corporation’s seal, or under the hand of an officer or attorney duly authorised. 3. If a member appoints 2 proxies, the appointment will be invalid unless he states the percentage of his shareholding to be represented by each proxy.4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Level 22, Axiata Tower, No. 9, Jalan Stesen Sentral

5, Kuala Lumpur Sentral, 50470 Kuala Lumpur, Malaysia not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof, either by hand, post, electronic mail or fax to 03-2273- 8310. In the case where the member is a corporation and the proxy form is delivered by fax or electronic mail, the original form shall also be deposited at the Registered Office, either by hand or post not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

SILK HOLDINGS BERHAD (405897-V)(Incorporated in Malaysia) Registered Office: Level 22, Axiata Tower No. 9, Jalan Stesen Sentral 5 Kuala Lumpur Sentral 50470 Kuala Lumpur Tel : 03-2273-1919 Fax : 03-2273-8310

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FOLD THIS FLAP FOR SEALING

FOLD HERE

FOLD HERE

AFFIXSTAMPHERE

The Company Secretary SILK HOLDINGS BERHAD (405897-V) Level 22, Axiata Tower, No. 9 Jalan Stesen Sentral 5Kuala Lumpur Sentral 50470 Kuala Lumpur

Annual Report 2015

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