THINK FORWARD, MOVE FORWARD · Harbour-Link Group and his active involvement in the shipping and...

www.harbour.com.my

HARBOUR-LINK GROUP BERHAD (592902-D)

Wisma Harbour, Parkcity Commerce Square,Jalan Tun Ahmad Zaidi, 97000 Bintulu, Sarawak, Malaysia.Tel: 086-318 998 Fax: 086-332 429 E-mail: [email protected]

HA

RB

OU

R-L

INK

GR

OU

P B

ER

HA

D (592902-D

)A

NN

UA

L R

EP

OR

T 2015


THINK FORWARD,MOVE FORWARD

Annual Report 2015

01

02

04

10

13

14

22

23

27

30

128

131

133

Established in 2002, Harbour-Link Group Berhad consolidated all related business activities and was officially listed on the Main Market of Bursa Malaysia Securities Berhad on 6 January 2004. With its roots �rmly planted in the shipping and total logistics services, engineering & construction industry for the past 40 years, Harbour-Link Group has grown steadily and built multi-disciplinary industry expertise covering a comprehensive range of services to ful�ll its client's needs. Today, Harbour-Link Group's business footprint extends across the Intra-Asian region and it has successfully established itself as a reputable brand-name within the industries that it operates.

Corporate Information

Corporate Structure

Board of Directors’ Pro�le

Group Managing Director’s Statement

Group Financial Highlights

Corporate Governance Statement

Additional Compliance Information

Audit Committee Report

Statement on Risk Management & Internal Control

Financial Statements

Analysis of Shareholdings

List of Properties

Notice of Annual General Meeting

Proxy Form

Contents


BOARD OF DIRECTORS

REGISTERED OFFICE

Wisma HarbourParkcity Commerce SquareJalan Tun Ahmad Zaidi97000 Bintulu, Sarawake-mail : [email protected]

SHARE REGISTRAR

Mega Corporate Services Sdn BhdLevel 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail,50250 Kuala LumpurTel : (03) 2692 4271Fax : (03) 2732 5388e-mail : [email protected]

COMPANY SECRETARIES

Lim Seck Wah (MAICSA 0799845)

M. Chandrasegaran A/L S. Murugasu (MAICSA 0781031)

AUDIT COMMITTEE

Dato' Mohamed Salleh Bin BajuriChairman, Independent Non-Executive Director

Bin Lay ThiamMember, Independent Non-Executive Director

Datuk Pau Chiong UngMember, Independent Non-Executive Director

REMUNERATION COMMITTEE

Datuk Pau Chiong UngChairman, Independent Non-Executive Director

Yong Piaw SoonMember, Group Managing Director

Dato' Mohamed Salleh Bin BajuriMember, Independent Non-Executive Director


NOMINATION COMMITTEE




AUDITORS

Ernst & YoungChartered Accountants113-115, 1st Floor, Lot 3401Parkcity Commerce SquareJalan Tun Ahmad Zaidi97000 Bintulu, Sarawak

PRINCIPAL BANKERS

Malayan Banking BerhadAmBank BerhadHong Leong Bank BerhadUnited Overseas Bank (Malaysia) Bhd

STOCK EXCHANGE LISTING

Main Market of the Bursa MalaysiaSecurities BerhadStock Name : HARBOURStock Code : 2062

Yong Piaw SoonGroup Managing Director

Dato' Mohamed Salleh Bin BajuriIndependent Non-Executive Director

Bin Lay ThiamIndependent Non-Executive Director

Datuk Pau Chiong UngIndependent Non-Executive Director(Appointed on 13 January 2015)

Wong Siong Seh Executive Director

Dato' Toh Guan SengExecutive Director

Lee Seng ChiongExecutive Director

Hii Kwong WuiExecutive Director

Lau Sii HinExecutive Director

Annual Report 2015 1

01

02

04

10

13

14

22

23

27

30

128

131

133

Established in 2002, Harbour-Link Group Berhad consolidated all related business activities and was officially listed on the Main Market of Bursa Malaysia Securities Berhad on 6 January 2004. With its roots �rmly planted in the shipping and total logistics services, engineering & construction industry for the past 40 years, Harbour-Link Group has grown steadily and built multi-disciplinary industry expertise covering a comprehensive range of services to ful�ll its client's needs. Today, Harbour-Link Group's business footprint extends across the Intra-Asian region and it has successfully established itself as a reputable brand-name within the industries that it operates.


Corporate Structure

Board of Directors’ Pro�le

Group Managing Director’s Statement






Financial Statements

Analysis of Shareholdings

List of Properties


Proxy Form

Contents


BOARD OF DIRECTORS

REGISTERED OFFICE

Wisma HarbourParkcity Commerce SquareJalan Tun Ahmad Zaidi97000 Bintulu, Sarawake-mail : [email protected]

SHARE REGISTRAR

Mega Corporate Services Sdn BhdLevel 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail,50250 Kuala LumpurTel : (03) 2692 4271Fax : (03) 2732 5388e-mail : [email protected]

COMPANY SECRETARIES

Lim Seck Wah (MAICSA 0799845)

M. Chandrasegaran A/L S. Murugasu (MAICSA 0781031)

AUDIT COMMITTEE




REMUNERATION COMMITTEE

Datuk Pau Chiong UngChairman, Independent Non-Executive Director

Yong Piaw SoonMember, Group Managing Director

Dato' Mohamed Salleh Bin BajuriMember, Independent Non-Executive Director


NOMINATION COMMITTEE




AUDITORS

Ernst & YoungChartered Accountants113-115, 1st Floor, Lot 3401Parkcity Commerce SquareJalan Tun Ahmad Zaidi97000 Bintulu, Sarawak

PRINCIPAL BANKERS

Malayan Banking BerhadAmBank BerhadHong Leong Bank BerhadUnited Overseas Bank (Malaysia) Bhd

STOCK EXCHANGE LISTING

Main Market of the Bursa MalaysiaSecurities BerhadStock Name : HARBOURStock Code : 2062

Yong Piaw SoonGroup Managing Director

Dato' Mohamed Salleh Bin BajuriIndependent Non-Executive Director

Bin Lay ThiamIndependent Non-Executive Director

Datuk Pau Chiong UngIndependent Non-Executive Director(Appointed on 13 January 2015)

Wong Siong Seh Executive Director

Dato' Toh Guan SengExecutive Director

Lee Seng ChiongExecutive Director

Hii Kwong WuiExecutive Director

Lau Sii HinExecutive Director


Harbour-Link Group Berhad (592902-D)2

80% 100% 100% 100% 100% 100% 100% 49% 85% 51%80%

HARBOUR IVORY SDN BHD(738249-M)

HARBOUR-LINKNAVIGATIONSDN BHD(678560-X)

HARBOUR HORNBILL SDN BHD(733539-X)

HARBOUR-LINK (M) SDN BHD(222555-H)

HLG PETROLEUMSDN BHD(722821-K)

HLG RESOURCES SDN BHD(720931-A)

ECL (MALAYSIA) SDN BHD (151779-W)

HARBOUR-LINKLINES SDN BHD(738254-T)

ARCADIA PROPERTIES SDN BHD(874993-P)

HARBOUR AGENCIES(SARAWAK) SDN BHD(461102-P)

EASTERN SOLDARENGINEERING & CONSTRUCTIONSDN BHD(153971-K)

• Harbour Challenger Sdn Bhd (679380-P)

• Harbour Eagle Sdn Bhd (682237-W)

• Satun Shipping Sdn Bhd (681960-T)

• Harbour-Link Shipping Sdn Bhd (738252-M)

• Harbour-Link Marine Services Sdn Bhd (738253-H)

• 52% Harbour Gemini Sdn Bhd (733542-X)

• Harbour Agencies (Sibu) Sdn Bhd (291744-P)

• Harbour Services (Kuching) Sdn Bhd (354145-A)

• Harbour Xtra Sdn Bhd (1146365-W)

• 80% Harbour Ruby Sdn Bhd (1153587-X)

• 80% Harbour Zenith Sdn Bhd (1153350-W)

• A.T. Dunia (BTU) Sdn Bhd (311969-P)

• Harbour Services Corporation Sdn Bhd (311131-U)

• Harbour Agencies Sdn Bhd (237806-K)

• Harbour-Link Logistics Sdn Bhd (206893-W)

• Harbour-Link Logistics (S) Sdn Bhd (795956-H)

• Siong Jaya Sdn Bhd (636328-U)

• Harbour Services (Miri) Sdn Bhd (311383-D)

• Harbour-Link Leasing Sdn Bhd (446351-K)

• Progresif Lengkap Sdn Bhd (410555-M)

• Road Safety & Driving Academy Sdn Bhd (660675-K)

• Harbour-Link (Labuan) Limited (LL07749)

• 50% A & H Project Services Sdn Bhd (524951-W)

• 47% Harbour Services Sdn Bhd (185955-A)

• 70% HLG Engineering Sdn Bhd (311075-X)

• 60% Best Success Bonded Store Supply Sdn Bhd (955626-T)

• 55% Serimaju Konsortium Sdn Bhd (1151695-K)

• ESE Energy Sdn Bhd(326947-H)

• Eastern Soldar(Singapore) Pte Ltd

(200610417 E)

• ESEC (Cambodia) Pte. Ltd. (Co. 2001E/2010)

• Harbour Agencies (Sabah) Sdn Bhd (487253-X)

• Navasco ShippingSdn Bhd (409418-A)

• 25% Eastock Resources Sdn Bhd (420982-H)

• Harbour JupiterSdn Bhd (759230-A)

• 95% Harbour-Link Lines (KK) Sdn Bhd (739564-H)

• 70% Harbour-Link Lines (JB) Sdn Bhd (739560-D)

• 60% Harbour-Link Lines (PK) Sdn Bhd (739562-P)

• 63.75% Harbour-Link Lines (KCH) Sdn Bhd(739565-T)

• 60% HLG EquipmentSdn Bhd (917772-U)

• 85% HKK JayaSdn Bhd (919962-D)

• Sarawak Edible Oils Sdn Bhd (533994-D)

Corporate Structure


80% 100% 100% 100% 100% 100% 100% 49% 85% 51%80%

HARBOUR IVORY SDN BHD(738249-M)

HARBOUR-LINKNAVIGATIONSDN BHD(678560-X)

HARBOUR HORNBILL SDN BHD(733539-X)

HARBOUR-LINK (M) SDN BHD(222555-H)

HLG PETROLEUMSDN BHD(722821-K)

HLG RESOURCES SDN BHD(720931-A)

ECL (MALAYSIA) SDN BHD (151779-W)

HARBOUR-LINKLINES SDN BHD(738254-T)

ARCADIA PROPERTIES SDN BHD(874993-P)

HARBOUR AGENCIES(SARAWAK) SDN BHD(461102-P)

EASTERN SOLDARENGINEERING & CONSTRUCTIONSDN BHD(153971-K)

• Harbour Challenger Sdn Bhd (679380-P)

• Harbour Eagle Sdn Bhd (682237-W)

• Satun Shipping Sdn Bhd (681960-T)

• Harbour-Link Shipping Sdn Bhd (738252-M)

• Harbour-Link Marine Services Sdn Bhd (738253-H)

• 52% Harbour Gemini Sdn Bhd (733542-X)

• Harbour Agencies (Sibu) Sdn Bhd (291744-P)

• Harbour Services (Kuching) Sdn Bhd (354145-A)

• Harbour Xtra Sdn Bhd (1146365-W)

• 80% Harbour Ruby Sdn Bhd (1153587-X)

• 80% Harbour Zenith Sdn Bhd (1153350-W)

• A.T. Dunia (BTU) Sdn Bhd (311969-P)

• Harbour Services Corporation Sdn Bhd (311131-U)

• Harbour Agencies Sdn Bhd (237806-K)

• Harbour-Link Logistics Sdn Bhd (206893-W)

• Harbour-Link Logistics (S) Sdn Bhd (795956-H)

• Siong Jaya Sdn Bhd (636328-U)

• Harbour Services (Miri) Sdn Bhd (311383-D)

• Harbour-Link Leasing Sdn Bhd (446351-K)

• Progresif Lengkap Sdn Bhd (410555-M)

• Road Safety & Driving Academy Sdn Bhd (660675-K)

• Harbour-Link (Labuan) Limited (LL07749)

• 50% A & H Project Services Sdn Bhd (524951-W)

• 47% Harbour Services Sdn Bhd (185955-A)

• 70% HLG Engineering Sdn Bhd (311075-X)

• 60% Best Success Bonded Store Supply Sdn Bhd (955626-T)

• 55% Serimaju Konsortium Sdn Bhd (1151695-K)

• ESE Energy Sdn Bhd(326947-H)

• Eastern Soldar(Singapore) Pte Ltd

(200610417 E)

• ESEC (Cambodia) Pte. Ltd. (Co. 2001E/2010)

• Harbour Agencies (Sabah) Sdn Bhd (487253-X)

• Navasco ShippingSdn Bhd (409418-A)

• 25% Eastock Resources Sdn Bhd (420982-H)

• Harbour JupiterSdn Bhd (759230-A)

• 95% Harbour-Link Lines (KK) Sdn Bhd (739564-H)

• 70% Harbour-Link Lines (JB) Sdn Bhd (739560-D)

• 60% Harbour-Link Lines (PK) Sdn Bhd (739562-P)

• 63.75% Harbour-Link Lines (KCH) Sdn Bhd(739565-T)

• 60% HLG EquipmentSdn Bhd (917772-U)

• 85% HKK JayaSdn Bhd (919962-D)

• Sarawak Edible Oils Sdn Bhd (533994-D)

Corporate Structurecont’d


YONG PIAW SOON, 63Group Managing Director/Malaysian

He was appointed to the Board of Harbour-Link Group Berhad on 27 December 2003. On 12 February 2004, he was appointed to the Remuneration Committee of the Company. He is a founder member of Harbour-Link Group and his active involvement in the shipping and freight forwarding industry in East Malaysia since the early 1970s has distinguished him as one of the industry’s pioneers. He started his business in the early 1970s in timber export and other logging related activities. In 1975, he ventured into the forwarding and shipping business. His astute business instincts and in-depth knowledge of the shipping and forwarding industry has positioned him well to spearhead and lead the business expansion and development of Harbour-Link Group throughout the years.

Under his leadership, Harbour-Link Group has grown to become a major player in the shipping and forwarding industry in the region. He has succeeded in elevating Harbour-Link Group to a higher level of business achievement and diversied into Engineering, Shipping & Marine Services, Freight Forwarding & Logistic services, Equipment Sales & Rental and Property Development & Construction. He has laid a good foundation for the future of the Harbour-Link Group of Companies. He sits on the Board of several subsidiary companies of Harbour-Link Group and Herdsen Corporation Sdn. Bhd. & its subsidiaries. He does not hold any directorships in other public listed companies.

DATO’ MOHAMED SALLEH BIN BAJURI, 64Independent Non-Executive Director/Malaysian

He was appointed to the Board of Harbour-Link Group Berhad on 27 December 2003. On 12 February 2004, he was appointed to the Nomination Committee and Remuneration Committee of the Company. He was appointed to the Audit Committee on 25 August 2008. Dato’ Mohamed Salleh is a Chartered Accountant by profession. He started his career in Malaysia in 1978 as an auditor with Peat Marwick & Co. In 1979, he joined Mayban Finance Berhad as Manager and was promoted in 1982 to General Manager, a position which he held until 1987. He was later seconded to Malayan Banking Berhad and promoted General Manager in 1988. He left Maybank in 1992 to join JB Securities Sdn Bhd as Managing Director. In 1996, he was appointed as Group Executive Director of CRSC Holdings Berhad, a position he held until June 2009. He is now Executive Vice Chairman of the company.

His directorship in other public listed companies includes Asian Pac Holdings Berhad, Eden Inc. Berhad, SAM Engineering & Equipment (M) Berhad and Milux Corporation Berhad.

12

34

5

6

7 89

1. YONG PIAW SOON

2. DATO’ MOHAMED SALLEH BIN BAJURI

3. BIN LAY THIAM

4. DATUK PAU CHIONG UNG

5. WONG SIONG SEH

6. DATO’ TOH GUAN SENG

7. LEE SENG CHIONG

8. HII KWONG WUI

9. LAU SII HIN

1

2

Board of Directors’ Profile


YONG PIAW SOON, 63Group Managing Director/Malaysian

He was appointed to the Board of Harbour-Link Group Berhad on 27 December 2003. On 12 February 2004, he was appointed to the Remuneration Committee of the Company. He is a founder member of Harbour-Link Group and his active involvement in the shipping and freight forwarding industry in East Malaysia since the early 1970s has distinguished him as one of the industry’s pioneers. He started his business in the early 1970s in timber export and other logging related activities. In 1975, he ventured into the forwarding and shipping business. His astute business instincts and in-depth knowledge of the shipping and forwarding industry has positioned him well to spearhead and lead the business expansion and development of Harbour-Link Group throughout the years.

Under his leadership, Harbour-Link Group has grown to become a major player in the shipping and forwarding industry in the region. He has succeeded in elevating Harbour-Link Group to a higher level of business achievement and diversied into Engineering, Shipping & Marine Services, Freight Forwarding & Logistic services, Equipment Sales & Rental and Property Development & Construction. He has laid a good foundation for the future of the Harbour-Link Group of Companies. He sits on the Board of several subsidiary companies of Harbour-Link Group and Herdsen Corporation Sdn. Bhd. & its subsidiaries. He does not hold any directorships in other public listed companies.

DATO’ MOHAMED SALLEH BIN BAJURI, 64Independent Non-Executive Director/Malaysian

He was appointed to the Board of Harbour-Link Group Berhad on 27 December 2003. On 12 February 2004, he was appointed to the Nomination Committee and Remuneration Committee of the Company. He was appointed to the Audit Committee on 25 August 2008. Dato’ Mohamed Salleh is a Chartered Accountant by profession. He started his career in Malaysia in 1978 as an auditor with Peat Marwick & Co. In 1979, he joined Mayban Finance Berhad as Manager and was promoted in 1982 to General Manager, a position which he held until 1987. He was later seconded to Malayan Banking Berhad and promoted General Manager in 1988. He left Maybank in 1992 to join JB Securities Sdn Bhd as Managing Director. In 1996, he was appointed as Group Executive Director of CRSC Holdings Berhad, a position he held until June 2009. He is now Executive Vice Chairman of the company.

His directorship in other public listed companies includes Asian Pac Holdings Berhad, Eden Inc. Berhad, SAM Engineering & Equipment (M) Berhad and Milux Corporation Berhad.

12

34

5

6

7 89

1. YONG PIAW SOON

2. DATO’ MOHAMED SALLEH BIN BAJURI

3. BIN LAY THIAM

4. DATUK PAU CHIONG UNG

5. WONG SIONG SEH

6. DATO’ TOH GUAN SENG

7. LEE SENG CHIONG

8. HII KWONG WUI

9. LAU SII HIN

1

2

Board of Directors’ Profilecont’d


WONG SIONG SEH, 53Executive Director/Malaysian

He was appointed to the Board of Harbour-Link Group Berhad on 27 December 2003 and, is a founder member of Harbour-Link Group. He started his career in early 1980s working as an executive in a prominent shipping company in Sibu. His involvement in the shipping industry has earned him vast experience and exposure and, a sound understanding of the industry which includes ship management, freighting, chartering services and other related services. In 1983, he joined Antah Transact Sdn Bhd as an Operations Manager. He was attached to the company for 9 years where he was involved in providing logistic services in the oil and gas industry. He left Antah Transact Sdn Bhd in 1992 to join HLM Group and later was appointed as Director on 1 March 1994.

He is involved in the operations, management, business development and planning of Harbour-Link Group business activities. He also sits on the Board of several subsidiary companies of the Group. He does not hold any directorships in other public listed companies.

DATO’ TOH GUAN SENG, 60Executive Director/Malaysian

He was appointed to the Board of Harbour-Link Group Berhad on 27 December 2003 and, is a founder member of Eastern Soldar Engineering & Construction Sdn Bhd (”ESEC”). He has more than 40 years experience in the oil and gas industry. He started his career as a Unit Group Leader with Jurong Engineering Pte. Ltd (Singapore) and later ventured into business by setting up his trading �rm dealing with LPG safety equipments. In 1986, he founded ESEC, and over the period of 29 years, under his able leadership, ESEC Group has managed to penetrate into the oil and gas and petrochemical industries resulting in the gradual and steady growth of ESEC.

He is currently the President of the Negeri Sembilan Foundry & Engineering Industries Association, Deputy President of Federation of Malaysia Foundry & Engineering Industries Association (FOMFEIA) and committee members of Negeri Sembilan Chinese Chambers of Commerce and Industry (NSCCCI).

He does not hold any directorships in other public listed companies.

DATUK PAU CHIONG UNG, 63Independent Non-Executive Director/Malaysian

He was appointed to the Board of Harbour-Link Group Berhad on 13 January 2015. Holding a technical certi�cate of wood working from Japan, he has been engaged in timber and shipping industries for the last 30 years.

In his working experience, he has served as Shipping Manager, General Manager and Managing Director of a number of shipping, timber extraction and export companies. He is currently Director of numerous private companies involving in wood manufacturing and shipping. He was appointed and served as Senator of Malaysian Parliament for a period of 6 years from 2007 to 2013. Currently he is Adviser to Secretariat of the Advancement of Malaysian Entrepreneurs (SAME), Prime Minister Department, Malaysia. He is also the Chief Executive O�cer of Timberwell Bhd.

BIN LAY THIAM, 45Independent Non-Executive Director/Malaysian

He was appointed to the Board of Harbour-Link Group Berhad on 6 February 2014. He is a Chartered Accountant by profession and a member of the Malaysian Institute of Accountants and Malaysian Institute of Certi�ed Public Accountants and a Fellow of the Association of Chartered Certi�ed Accountants.

Started his career at KPMG Peat Marwick, Kuala Lumpur in 1990 where he was attached to the audit division and later seconded to the consultancy division. During his tenure of 10 years in KPMG Peat Marwick, he gained professional exposure in auditing, business advisory and consultancy services. He joined Fiamma Holdings Berhad, in 2000, assuming the role of Group Accounts & Corporate A�airs manager, principally involved in corporate reporting, compliance and fund raising. In 2005, he was appointed the Group Financial Controller of Harbour-Link Group Berhad. He continued to pursue his career advancement as the Chief Financial O�cer in Southern Acids Berhad in 2010 and subsequently as the Chief Financial O�cer in GSB Group Berhad in 2011, where he was principally responsible for the �nancial a�airs, business development and treasury functions.He is currently the Senior General Manager (Finance) of Econpile Holdings Berhad.

5

6

3

4



WONG SIONG SEH, 53Executive Director/Malaysian

He was appointed to the Board of Harbour-Link Group Berhad on 27 December 2003 and, is a founder member of Harbour-Link Group. He started his career in early 1980s working as an executive in a prominent shipping company in Sibu. His involvement in the shipping industry has earned him vast experience and exposure and, a sound understanding of the industry which includes ship management, freighting, chartering services and other related services. In 1983, he joined Antah Transact Sdn Bhd as an Operations Manager. He was attached to the company for 9 years where he was involved in providing logistic services in the oil and gas industry. He left Antah Transact Sdn Bhd in 1992 to join HLM Group and later was appointed as Director on 1 March 1994.

He is involved in the operations, management, business development and planning of Harbour-Link Group business activities. He also sits on the Board of several subsidiary companies of the Group. He does not hold any directorships in other public listed companies.

DATO’ TOH GUAN SENG, 60Executive Director/Malaysian

He was appointed to the Board of Harbour-Link Group Berhad on 27 December 2003 and, is a founder member of Eastern Soldar Engineering & Construction Sdn Bhd (”ESEC”). He has more than 40 years experience in the oil and gas industry. He started his career as a Unit Group Leader with Jurong Engineering Pte. Ltd (Singapore) and later ventured into business by setting up his trading �rm dealing with LPG safety equipments. In 1986, he founded ESEC, and over the period of 29 years, under his able leadership, ESEC Group has managed to penetrate into the oil and gas and petrochemical industries resulting in the gradual and steady growth of ESEC.

He is currently the President of the Negeri Sembilan Foundry & Engineering Industries Association, Deputy President of Federation of Malaysia Foundry & Engineering Industries Association (FOMFEIA) and committee members of Negeri Sembilan Chinese Chambers of Commerce and Industry (NSCCCI).


DATUK PAU CHIONG UNG, 63Independent Non-Executive Director/Malaysian

He was appointed to the Board of Harbour-Link Group Berhad on 13 January 2015. Holding a technical certi�cate of wood working from Japan, he has been engaged in timber and shipping industries for the last 30 years.

In his working experience, he has served as Shipping Manager, General Manager and Managing Director of a number of shipping, timber extraction and export companies. He is currently Director of numerous private companies involving in wood manufacturing and shipping. He was appointed and served as Senator of Malaysian Parliament for a period of 6 years from 2007 to 2013. Currently he is Adviser to Secretariat of the Advancement of Malaysian Entrepreneurs (SAME), Prime Minister Department, Malaysia. He is also the Chief Executive O�cer of Timberwell Bhd.

BIN LAY THIAM, 45Independent Non-Executive Director/Malaysian

He was appointed to the Board of Harbour-Link Group Berhad on 6 February 2014. He is a Chartered Accountant by profession and a member of the Malaysian Institute of Accountants and Malaysian Institute of Certi�ed Public Accountants and a Fellow of the Association of Chartered Certi�ed Accountants.

Started his career at KPMG Peat Marwick, Kuala Lumpur in 1990 where he was attached to the audit division and later seconded to the consultancy division. During his tenure of 10 years in KPMG Peat Marwick, he gained professional exposure in auditing, business advisory and consultancy services. He joined Fiamma Holdings Berhad, in 2000, assuming the role of Group Accounts & Corporate A�airs manager, principally involved in corporate reporting, compliance and fund raising. In 2005, he was appointed the Group Financial Controller of Harbour-Link Group Berhad. He continued to pursue his career advancement as the Chief Financial O�cer in Southern Acids Berhad in 2010 and subsequently as the Chief Financial O�cer in GSB Group Berhad in 2011, where he was principally responsible for the �nancial a�airs, business development and treasury functions.He is currently the Senior General Manager (Finance) of Econpile Holdings Berhad.

5

6

3

4



OTHER INFORMATION

(a) Family Relationship

None of the Directors have any family relationship with any director and/or major shareholder of the Company.

(b) Con�ict of Interest

The Company has entered into recurrent related party transactions with parties in which the Directors of the Company, namely Yong Piaw Soon, Wong Siong Seh, Lee Seng Chiong, Hii Kwong Wui and Lau Sii Hin have direct and/or indirect interests.

Save for the above mentioned disclosure, none of the other Directors have any con�ict of interest with the Company.

(c) Conviction of O�ences

None of the Directors have any conviction for o�ences within the past 10 years.

HII KWONG WUI, 53Executive Director/Malaysian

He was appointed to the Board of Harbour-Link Group Berhad on 27 December 2003. He started his career in Pan Sarawak Co. Sdn Bhd in 1981 as a Shipping Executive. In 1994, he joined HLM Group and was appointed as the Regional Director in charge of Sibu and Kuching regions in 1996. He has more than 30 years’ experience in the shipping industry. He is responsible for the daily operations, management and business development of both the Sibu and Kuching regions. He also sits on the Board of several subsidiary companies of Harbour-Link Group.


97

8

LAU SII HIN, 64Executive Director/Malaysian

He was appointed to the Board of Harbour-Link Group Berhad on 27 December 2003. In the early 1980s, he joined Sri Minah Enterprise Sdn Bhd as a Logging Manager. He joined HLM Group in 1994 and was appointed as Regional Director the same year. He has more than 30 years experience in thetransportation, inventory and mechanical industries. He is a key personnel who oversees the transport department which includes workshop repair, maintenance and store procurement as well as the day-to-day transport operations. He also sits on the Board of several subsidiary companies of Harbour-Link Group.

He does not hold any directorships in other public companies.

LEE SENG CHIONG, 56Executive Director/Malaysian

He was appointed to the Board of Harbour-Link Group Berhad on 27 December 2003. He started his career in 1981 as a Shipping Executive where he gained experience in shipping operations, marketing and management. He joined HLM Group and was appointed as Regional Director in 1994. Presently is in charge of the Bintulu region shipping operations, management and business development. He also sits on the Board of several subsidiary companies of Harbour-Link Group.




Group ManagingDirector’sStatementDear valued Shareholders,

On behalf of the Board of Directors of Harbour-Link Group Berhad, it gives me great pleasure to present to you the Annual Report for the �nancial year ended 30 June 2015.




Group Managing Director’s Statementcont’d

FINANCIAL PERFORMANCE

This financial year has been challenging amid economic uncertainties and volatile market situation. However, I am pleased to report that Harbour-Link Group has delivered yet another year of strong financial performance. The Group achieved a profit before taxation of RM76.7 million with a record high turnover of RM506.9 million and an overall improvement in gross profit margin from 17.2% in preceding financial year to 24.3% this financial year. The increase was mainly attributed from high demand for logistics services and heavy equipment rentals as well as the engineering segment spurred during the construction of the various development projects in the region.

The Group’s gearing ratio remained healthy at 0.3 and cash reserves remained strong.

DIVIDEND

In view of the positive performance of the Group, on behalf of the Board I am pleased to propose a first and final single tier dividend of 5.5 sen per ordinary share for the financial year ended 30 June 2015.

OPERATION REVIEW AND OUTLOOK

In the shipping and marine services segment, we have seen some container shipping players consolidating their services and divesting from the shipping market due to slowdown in mainline trade growth. We are not immuned to the factors affecting the slowdown but we have embraced ourselves well with strong network bases and a dynamic hands-on operation and management team. Taking advantage of the market slowdown, we increased our fleet size by acquiring two (2) units of 700 teus container vessels in anticipation for future growth in the region. We are having an optimistic view of the potentiality of container and bulk cargo shipping trade in this region. However, in the near term the industry headwind is expected to persist; the domestic and regional market will most likely to remain challenging for us in view of intense competition and strong pressure on margins due to fluctuation of Malaysian currency and oil prices. Nonetheless, in order to sustain our performance in this segment, we will continue to scrutinize our costs, evaluate sustainability of our operating routes and improve on our customer base and operational management.

Integrated logistics services segment will continue to benefit from the manufacturing sector after its construction period through the handling of inbound raw materials and export of

finished products. Equipment rental segment also continues to be active to service the oil and gas plants for periodical maintenance and support. Even though there is a steady stream of revenue from these segments, the Group’s prospect is still closely tied to the performance of the local Malaysian market and global economy which will affect directly to the manufacturing sector. As such, we are cautious on capital expenditure spending on plants and machinery in view of the present economic condition. Despite increased competition and the grim logistic trade outlook of late, we believe our performance will remain satisfactory for the forthcoming financial year. We will continue to maintain and exploring new innovative solutions for our customers and further develop new business opportunities to sustain our growth.

The engineering contract segment depends highly on the performance of the oil and gas industry. Since the decline in oil price, most oil and gas companies have scaled down their capital expenditures resulting in a slowdown in new projects focused on developing oil and gas manufacturing and storage facilities within Malaysia and other intra-Asian developing regions. As such, we are expecting a contraction in this segment’s performance going forward. However, we are cautiously optimistic that this is but a short term contraction and we will see the industry recover and the engineering contract works increase in tandem with the momentum of growth in the oil and gas industry.

The outlook for the local property market is expected to be moderate as the development of SCORE (Sarawak Corridor of Renewable Energy) continues. The Group’s development project - Kidurong Gateway which is strategically located at the Kidurong Light Industrial Estate, in easy reach of Samalaju Industrial Park which is part of SCORE development area and a stone throw away from Kidurong oil and gas hub and Bintulu port, continues to garner strong interest from investors. Phase 1 and 2 mixed development of shophouses and semi-detached industrial buildings of the project is set to complete by end of 2015. This will provide the impetus to the Group’s earnings growth in the coming financial year. As our vision for this project is to develop the entire 100 acres plot of land into a future township with integrated facilities, we are aiming to launch Phase 3 when it is deemed beneficial and feasible to do so. In the meantime, the Group will continue to look for potential land bank and strengthen its asset portfolio.

Moving forward, barring unforeseen circumstances, the Group’s performance is expected to remain challenging. We are cognisant of the potential challenges that awaits us ahead especially in the shipping and marine services and engineering but we feel confident we can weather it out and steer the Group to greater success with sustainable earnings growth.




ACKNOWLEDGEMENTS

On behalf of the Board, I applaud the management and all our staff for delivering another record-breaking performance of the Group for this financial year. And I have the confidence that they will continue to adopt the same determination and commitment in helping the Group to achieve better results for the upcoming financial year.

I would also like to take this opportunity to thank our shareholders, customers, vendors, business partners, financiers and the various government and statutory bodies for their unwavering support and confidence in the Group.

In closing, I would like to express my deepest gratitude to my fellow Board members for their invaluable advice and dedication towards the success of the Group.

Looking forward to another year of continued solid performance together.

YONG PIAW SOONGroup Managing Director

Group Managing Director’s Statementcont’d


RevenueRM’000

457,

563

422,

708

472,

973

357,

060

308,

706

327,

564

345,

491

2008 2009 2010 2011 2012 2013 2014

506,

963

2015

Profit Attributable to Shareholders of ParentRM’000

Profit from Operation RM’000

2008 2009 2010 2011 2012 2013 2014 2015 2008 2009 2010 2011 2012 2013 2014 2015

33,4

15

5,09

3

27,1

92

13,2

0119,2

0126,2

25

26,2

93

51,7

90

57,5

56

49,7

51

41,3

50

26,3

65

31,1

54

35,6

28

81,6

34

40,5

37


2008RM’000

2009RM’000

2010RM’000

2011RM’000

2012RM’000

2013RM’000

2014RM’000

2015RM’000

Revenue 345,491 327,564 308,706 357,060 472,973 422,708 457,563 506,963

Profit from operation 40,537 35,628 31,154 26,365 41,350 49,751 57,556 81,634

Profit before taxation 36,099 32,310 26,750 20,171 35,230 17,645 51,023 76,660

Profit attributable to shareholders of parent 26,293 26,225 19,201 13,201 27,192 5,093 33,415 51,790

Total assets 316,408 355,574 387,587 371,069 447,868 444,109 486,410 582,899

Total liabilities 115,011 131,367 145,382 185,037 237,394 227,407 237,276 284,025

Per Share Data (sen)

Net assets 108.90 122.20 130.56 102.22 115.64 119.07 136.89 164.22

Earning per share 14.45 14.41 10.55 7.25 14.94 2.80 18.36 28.46

Financial Ratios

Gross profit margin (%) 15.5 16.1 14.4 12.0 12.3 16.43 17.18 24.33

Return on shareholders’ funds (%) 13.3 11.8 8.08 7.10 12.92 2.35 13.41 17.05

Trade receivables’ turnover (days) 80 71 68 65 80 91 78 103

Debt to equity 0.3 0.3 0.4 0.5 0.4 0.4 0.3 0.3

Interest coverage (times) 8.4 8.6 6.5 4.2 5.0 2.3 8.0 14



The Board of Directors (“the Board”) of Harbour-Link Group Berhad (“Harbour” or “the Company”) recognises and subscribes the principles and recommendations set out in the Malaysian Code on Corporate Governance 2012 (“the Code”) as a key factor towards achieving an optimal governance framework and process in managing the business and operational activities of the Company and its subsidiaries (“the Group”).

The implementation of the recommendations as set out in Code is an ongoing process.

The Statement below sets out the manner in which the Group has applied the principles of the Code and the extent of compliance with recommendations advocated therein.

PRINCIPLE 1 - ESTAbLISh CLEAR ROLES AND RESPONSIbILITIES OF ThE bOARD AND MANAGEMENT

The Board recognises the key role it plays in charting the strategic direction of the Company and has assumed the following principal responsibilities in discharging its fiduciary and leadership functions:

reviewing and adopting a strategic plan for the Company, addressing the sustainability of the Group’s business; overseeing the conduct of the Group’s business and evaluating if its businesses are being properly managed; identify principal business risks faced by the Group and ensuring the implementation of appropriate internal controls and

mitigating measures to address such risks; ensuring that all candidates appointed to senior management positions are of sufficient calibre, including the orderly succession

of senior management personnel; overseeing the development and implementation of a shareholder communications policy; and reviewing the adequacy and integrity of the Group’s internal control and management information systems.

To assist in the discharge of its stewardship role, the Board has established Board Committees, namely the Audit Committee, Nomination Committee and Remuneration Committee to examine specific issues within their respective terms of reference as approved by the Board and report to the Board with their recommendations. The ultimate responsibility for decision making, however, lies with the Board.

board Charter

The Directors and Management of the Company are aware of their respective roles and responsibilities, including the limits of authority accorded. The Board recognizes the need to formalize the Board Charter to provide clarity and guidance to Directors and Management on their respective role and to include a formal schedule of matters reserved for deliberation and decision. The Board will look into the matter to formalize the Board Charter.

Code of Conduct and Whistle-blower Policy

Though the Company has yet to formalize the Code of Conduct and Whistle-Blower policy, the Board has always conducted themselves in an ethical manner while executing their duties and function. Any complaints or irregularities can be channeled directly to the Group Managing Director or Independent Non-Executive Director for their attention and action.

Company’s Strategies promoting sustainability

The Board regularly review the strategic direction of the Company and the progress of the Company’s operations, taking into account changes in the business and political environment and risk factors such as level of competition.


Corporate Governance Statementcont’d

PRINCIPLE 1 - ESTAbLISh CLEAR ROLES AND RESPONSIbILITIES OF ThE bOARD AND MANAGEMENT cont’d

Corporate Social Responsibility

The Company is committed to the welfare of its employees and to the surrounding communities in which it operates. The management recognizes that for long term sustainability, its strategic orientation will need to cater beyond the financial parameters. During the year, the Company has initiated and continued to support important causes amongst others:-

• Contributionoffundstovariouscharitableorganizationsandassociations.• Sponsorshipofeventsofvariousnon-profitableorganizationsandschools.• Occupationalhealthandsafetyattheworkplace.Employeesareequippedwiththenecessarytrainingandtechnicalknowledge

besides the equipments and tools at work-sites to promote safety.• Promote health awareness amongst employees with the launching of a company-sponsored Annual Preventive Medical

Screening program during the year.• MonetaryawardbasedonacademicachievementsundertheGroup’sEducationFundtochildrenofeligibleemployees.• TakeheedtosavetheenvironmentbyreducingwastageandencourageenergyconservationandITsavvy.

At this point in time, the Company has no policy formalising its approach to workforce diversity.

Supply of, and Access to, Information

The Board is supplied with relevant information and reports on financial, operational, corporate, regulatory, business development and audit matters, by way of Board reports or upon specific requests, for decisions to be made on an informed basis and effective discharge of Board’s responsibilities.

Good practices have been observed for timely dissemination of meeting agenda, including the relevant Board and Board Committee papers to all Directors prior to the Board and Board Committee meetings to facilitate informed Board decision and to deal with matters arising from such meetings. The Executive Directors and/or other relevant Board members will be furnished with comprehensive explanation on pertinent issues and recommendations by Management. The issues are then deliberated and discussed thoroughly by the Board prior to decision making.

In addition, the Board members are updated on the Company’s activities and its operations on a regular basis. All Directors have access to all information of the Company on a timely basis to enable them to discharge their duties and responsibilities.

The Directors is supported by the qualified Company Secretary in discharging their duties and functions. The Company Secretary ensures that the Board is regularly updated on relevant regulatory requirements, codes or new statutes issue from time to time. The Company Secretary also ensures that the proceedings and resolutions reached at each Board meeting are recorded in the Minutes Book.

PRINCIPLE 2 - STRENGThEN COMPOSITION OF ThE bOARD

The Board consists of nine (9) members, comprising of the Group Managing Director, five (5) Executive Directors and three (3) Independent non-executive directors. This composition fulfills the requirements as set out under the Listing Requirements of Bursa Malaysia Securities Berhad, which stipulated that at least two (2) Directors or one-third of the Board, whichever is higher, must be independent.The profile of each Director is set out in this Annual Report. The Directors, with their differing backgrounds and specializations, collectively bring with them a wide range of experience and expertise in areas such as finance; accounting and audit; corporate affairs; and marketing and operations.



PRINCIPLE 2 - STRENGThEN COMPOSITION OF ThE bOARD cont’d

Nomination Committee – Selection and Assessment of Directors

A Nomination Committee has been established, with specific terms of reference, by the Board, comprising exclusively Independent Non-Executive Directors as follows:

Chairman Dato’ Mohamed Salleh bin bajuri Independent Non-Executive Director (Appointed as Chairman on 21 August 2015)

Members Mr bin Lay Thiam Independent Non-Executive Director

Datuk Pau Chiong Ung Independent Non-Executive Director The Nomination Committee is primarily responsible for recommending suitable appointments to the Board, taking into consideration the Board structure, size, composition and the required mix of expertise and experience which the Director should bring to the Board. It assesses the effectiveness of the Board as a whole, the Board Committees and the contribution of each Director, including Non-Executive Directors. The Nomination Committee evaluates the Board components based on its diversifying mixed of skills and experience.

The final decision on the appointment of a candidate recommended by Nomination Committee rests with the whole Board. The Board is entitled to the services of the Company Secretary who would ensure that all appointments are properly made upon obtaining all necessary information from the Directors.

During the financial year, the Nomination Committee met once, attended by all members, to assess the balance composition of Board members based on merits, Directors’ contribution and Board effectiveness.

The Board has no policy formalising its approach to boardroom diversity or target set but believes in merit and commitment of its Board members. The Board policy which will be drawn up will also defined the necessary criteria to be used in determining, selecting and assessment of the Board members moving forward.

Remuneration Committee

A Remuneration Committee has been established by the Board, comprising a majority of Non-Executive Directors as follows:

Chairman Datuk Pau Chiong Ung Independent Non-Executive Director (Appointed as Member and Chairman on 21 August 2015)

Members Mr. Yong Piaw Soon Group Managing Director

Mr. bin Lay Thiam Independent Non-Executive Director

Dato’ Mohamed Salleh bin bajuri Independent Non-Executive Director (Re-designated as Member on 21 August 2015)

The Remuneration Committee has been entrusted by the Board to determine that the levels of remuneration are sufficient to attract and retain Directors of quality required to manage the business of the Group. The Remuneration Committee is entrusted under its terms of reference to assist the Board, amongst others, to recommend to the Board the remuneration of the Executive Directors. In the case of Non-Executive Directors, the level of remuneration shall reflect the experience and level of responsibilities undertaken by the Non-Executive Directors concerned. In all instances, the deliberations are conducted, with the Directors concerned abstaining from discussions on their individual remuneration. During the financial year under review, the Committee met once attended by all members.



PRINCIPLE 2 - STRENGThEN COMPOSITION OF ThE bOARD cont’d

Remuneration Committee cont’d

Details of Directors’ remuneration for the financial year ended 30 June 2015 are as follows:

Remuneration (RM)

Executive Directors 3,282,590

Non-Executive Directors 217,834

Total 3,500,424

The remuneration paid to the Directors, analysed in the following bands, is as below:-

Range of Remuneration (RM) Executive Non-Executive

850,001 – 900,000 1 -

750,001 – 800,000 1 -

650,001 – 700,000 - -

500,001 – 650,000 - -

450,001 – 500,000 1 -

350,001 – 400,000 2 -

300,001 – 350,000 1 -

200,001 – 300,000 - -

100,001 – 200,000 - -

50,001 – 100,000 - 2

50,000 and below - 1

PRINCIPLE 3 – REINFORCE INDEPENDENCE OF ThE bOARD

The Code recommends that the Chairman of the Board is a Non-Executive Director or the Board must comprise a majority of independent directors if the Chairman is not an independent director. As the Company does not appoint Chairman, all Board meetings were chaired by the Group Managing Director.

The Group Managing Director is responsible for ensuring the adequacy and effectiveness of the Board’s governance process and acts as a facilitator at Board meetings to ensure all Directors participate and deliberate at all Board meetings and that no Board member dominates discussion. As the Group Managing Director, supported by fellow Executive Directors, he implements the Group’s strategies, policies and decision adopted by the Board and oversees the operations and business development of the Group.

The Independent Non-Executive Directors bring objective and independent views, advice and judgment on interests, not only of the Group, but also of shareholders and stakeholders. Independent Non-Executive Directors are essential in protecting the interests of shareholders and contribute significantly to the Company’s decision by giving rationale and fair view and to decide impartially.

The Board recognizes the importance of establishing criteria on independence to be used in the annual assessment of its Independent Non-Executive Directors. Although the definition on independence according to the Listing Requirements of Bursa is used, the Board review and assess the independence of its independent directors annually based on substance over their conduct, argue on the matters objectively and make decision rationally and other independence criteria. The Board does not adopt the nine (9)-year tenure for Independent Non-Executive Directors but would evaluate it on merit based. If the Nomination Committee recommends for the retention of Independent Non-Executive Director who has served more than 9 years, the Board would deliberate and recommend to shareholders for their mandate to retain as Independent Non-Executive Director.



PRINCIPLE 4 – FOSTER COMMITMENT OF DIRECTORS

The Board ordinarily meets at least four (4) times a year. Additional meetings are convened when urgent and important decisions need to be made between scheduled meetings. Board and Board Committee papers which are prepared by the Management, provide the relevant facts and analysis to facilitate the Board’s decision making. The meeting agenda, the relevant reports and Board papers are furnished to Directors and Board Committee members well before the meeting to allow the Directors sufficient time to peruse for effective discussion and decision making during meetings. At the quarterly Board meetings, the Board reviews the business performance of the Group and discuss major operational and financial issues. The Chairman of the Audit Committee highlights to the Board at each Board meeting of any salient matters noted by the Audit Committee that may require the Board’s attention or direction.

board Meetings

There were five (5) Board meetings held during the financial year ended 30 June 2015, with details of Directors’ attendance set out below:

Meetings Attended(out of 5 held)

Mr. Yong Piaw Soon Group Managing Director 5/5

Dato’ Mohamed Salleh Bin Bajuri Independent Non-Executive Director 5/5

Mr. Wong Siong Seh Executive Director 5/5

Dato’ Toh Guan Seng Executive Director 4/5

Mr. Lee Seng Chiong Executive Director 5/5

Mr. Hii Kwong Wui Executive Director 5/5

Mr. Lau Sii Hin Executive Director 5/5

Mr. Bin Lay Thiam Independent Non-Executive Director 5/5

Datuk Pau Chiong Ung Independent Non-Executive Director(Appointed on 13 January 2015)

2/2

It is the practice of the Company for Directors to devote sufficient time and efforts to carry out their responsibilities. In addition, the Board recognizes the need to formalize a policy in its Board Charter, requiring Directors to notify the Chairman before accepting any new directorships notwithstanding that the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) allow a Director to sit on the boards of 5 listed issuers. Such notification is expected to include an indication of time that will be spent on the new appointment.

Directors’ Training – Continuing Education Programmes

The Board is mindful of the importance for its members to undergo continuous training to keep abreast with changes to regulatory requirements and the impact such regulatory requirements have on the Group.

All the Directors of the Company have attended the Mandatory Accreditation Programme conducted by Bursatra Sdn Bhd within the stipulated timeframe required in the Listing Requirements.



PRINCIPLE 4 – FOSTER COMMITMENT OF DIRECTORS cont’d

Directors’ Training – Continuing Education Programmes cont’d

During the financial year, all Board Members have attended pertinent training as below :-

Name of Director Date Training attended

(a) Mr. Yong Piaw Soon 8 – 10 July 2014 23 – 24 July 2014 27 March 2015

Company Secretaries Training Programme Essential GSTforShipping,Forwarding&PropertyContinuing Professional Development Seminar

(b) Dato’ Mohamed Salleh Bin Bajuri 9 June 2015 Risk Management and Internal Control for Audit Committees

(c) Mr. Wong Siong Seh 10 October 201423 October 2014

Liability Insurance Training2015 Budget Seminar

(d) Dato’ Toh Guan Seng 27 October 2014 National Tax Seminar 2014

(e) Mr. Lee Seng Chiong 23 – 24 July 201410 October 2014

GSTforShipping,Forwarding&PropertyLiability Insurance Training

(f ) Mr. Hii Kwong Wui 10 October 2014 Liability Insurance Training

(g) Mr. Lau Sii Hin 23 – 24 July 201410 October 201427 March 2015

GSTforShipping,Forwarding&PropertyLiability Insurance TrainingContinuing Professional Development Seminar

(h) Mr. Bin Lay Thiam 23 January 201520 – 23 April 2015

General Principles of Construction Law and CIPAASkills for Success

(i) Datuk Pau Chiong Ung 6 – 7 May 2015 Mandatory Accreditation Programme for Directors of Public Listed Companies

Throughout the year, the Directors received updates and briefings, particularly on regulatory, industry and legal developments, risks mitigation.

TheExternalAuditorsbriefedtheBoardmembersonanychangestotheMalaysianFinancialReportingStandardsthatwouldaffecttheGroup’s financial statements during the financial year under review. The Directors continue to undergo relevant training programmes to further enhance their skills and knowledge in the discharge of their stewardship role.

The Company Secretaries updates the Board Members on the relevant guidelines on statutory and regulatory requirements from time to time.

PRINCIPLE 5 – UPhOLD INTEGRITY IN FINANCIAL REPORTING bY COMPANY

It is the Board’s commitment to present a balanced and meaningful assessment of the Group’s financial performance and prospects at the end of each reporting period and financial year, primarily through the quarterly announcement of Group’s results to Bursa Securities, the annual financial statements of the Group and Company as well as the Group Managing Director’s statement and review of the Group’s operations in the Annual Report, where relevant. A statement by the Directors of their responsibilities in the preparation of financial statements is set out in the ensuing paragraph.

Statement of Directors’ Responsibility for Preparing Financial Statements

The Board is responsible to ensure that the financial statements are properly drawn up in accordance with the provisions of the CompaniesAct,1965,MalaysianFinancialReportingStandardsandInternationalFinancialReportingStandardssoastogiveatrueandfair view of the financial position of the Group as at the end of the financial year and of the financial performance and cash flows of the Group for the financial year then ended.



PRINCIPLE 5 – UPhOLD INTEGRITY IN FINANCIAL REPORTING bY COMPANY cont’d

Statement of Directors’ Responsibility for Preparing Financial Statements cont’d

The Directors are satisfied that in preparing the financial statements of the Group for the year ended 30 June 2015, the Group has adopted suitable accounting policies and applied them consistently, prudently and reasonably. The Directors also consider that all applicable approved accounting standards have been followed in the preparation of the financial statements, subject to any material departures being disclosed and explained in the notes to the financial statements. The financial statements have been prepared on the going concern basis.

The Directors are responsible for ensuring that the Group keeps sufficient accounting records to disclose with reasonable accuracy, the financial position of the Group and which enable them to ensure that the financial statements comply with the Companies Act, 1965. Audit Committee

In assisting the Board to discharge its duties on financial reporting, the Board has established an Audit Committee, comprising wholly Independent Non-Executive Directors, with Dato’ Mohamed Salleh Bin Bajuri as the Committee Chairman. The composition of the Audit Committee, including its roles and responsibilities, are set out in the Audit Committee Report of this Annual Report. One of the key responsibilities of the Audit Committee in its specific terms of reference is to ensure that the financial statements of the Group and Company comply with applicable financial reporting standards in Malaysia. Such financial statements comprise the quarterly financial report announced to Bursa and the annual statutory financial statements.

The Board is committed in upholding the integrity of the group financial reporting. The Audit Committee is responsible to assess, evaluate and recommend the external auditors to ensure they are of the right calibre with professional ethic and integrity. The Audit Committee also review on the types of non-audit services permitted to be provided by the external auditors of the Company so as not to compromise their independence and objectivity.

In assessing the independence of external auditors, the Audit Committee will require written assurance by the external auditors, confirming that they are, and have been, independent throughout the conduct of the audit engagement with the Company in accordancewith the independence criteria set out by the International Federation of Accountants and theMalaysian Institute ofAccountants.

PRINCIPLE 6 – RECOGNISE AND MANAGE RISKS OF ThE GROUP

The Board undertakes the responsibility for evaluating, reviewing and monitoring the vital enterprise risks that affect the business and operations. The management has the on going process to manage and mitigate key businesses risk with the intent to strengthen the risk management and internal control system as a whole.

The Group’s in-house internal audit function is independent of the activities or operations of the Group. It undertakes regular reviews of the adequacy and effectiveness of the Group’s system of internal controls and risk management process, as well as appropriateness andeffectivenessofthecorporategovernancepractices.TheInternalAuditFunctionreportsdirectlytotheAuditCommittee.Furtherdetails on the internal audit function can be seen in the Audit Committee Report and the Statement on Risk Management and Internal Control in this Annual Report.

PRINCIPLE 7 – ENSURE TIMELY AND hIGh qUALITY DISCLOSURE

The Board is aware of the need to establish corporate disclosure policies and procedures to enable comprehensive, accurate and timely disclosures relating to the Company and its subsidiaries to be made to the regulators, shareholders and stakeholders. On this basis, the Board will formalize pertinent policies and procedures not only to comply with the disclosure requirements as stipulated in the Listing Requirements of Bursa, but also setting out the persons authorised and responsible to approve and disclose material information to regulators, shareholders and stakeholders.

To augment the process of disclosure, the Board will earmark a dedicated section for corporate governance on the Company’s website where information on the Company’s announcements to the regulators, rights of shareholders and the Company’s Annual Report may be accessed.



PRINCIPLE 8 – STRENGThEN RELATIONShIP bETWEEN ThE COMPANY AND ITS ShAREhOLDERS

Shareholder participation at general meeting

The Annual General Meeting (“AGM”), which is the principal forum for shareholder dialogue, allows shareholders to review the Group’s performance via the Company’s Annual Report and pose questions to the Board for clarification. At the AGM, shareholders participate in deliberating resolutions being proposed or on the Group’s operations in general.

The Notice of AGM is circulated at least twenty one (21) days before the date of the meeting to enable shareholders to go through the Annual Report and papers supporting the resolutions proposed. Shareholders are invited to ask questions both about the resolutions being proposed before putting a resolution to vote as well as matters relating to the Group’s operations in general. All the resolutions set out in the Notice of the last AGM were put to vote by show of hands and duly passed. The outcome of the AGM was announced to Bursa on the same meeting day.

The Chairman of meeting would ensure that shareholders were informed of their rights to demand for a poll vote at the commencement of the AGM.

Communication and engagement with shareholders

The Board recognises the importance of being transparent and accountable to the Company’s investors and, as such, has various channels to maintain communication with them. The various channels of communications are through the quarterly announcements on financial results to Bursa, relevant announcements and circulars, when necessary, the Annual and Extraordinary General Meetings and through the Group’s website at where shareholders can access pertinent information concerning the Group.



ShARE bUY-bACK

The Company does not have a share buy-back programme in place and therefore did not buy back any of its shares during the financial year.

OPTIONS OR CONVERTIbLE SECURITIES

There were no options or convertible securities issued or exercised during the financial year.

DEPOSITORY RECEIPT (“DR”) PROGRAMME

The Company did not sponsor any DR Programme during the financial year.

IMPOSITION OF SANCTIONS/PENALTIES

There were no sanctions and/or penalties imposed on the Group, Directors or management by the relevant regulatory bodies during the financial year.

NON-AUDIT FEES

The Company did not pay the external auditors any non-audit fees during the financial year.

PROFIT GUARANTEE

The Company did not receive any form of profit guarantee during the financial year.

VARIANCE IN RESULTS

There were no deviation by 10% or more between the profit after tax for the audited financial statements ended 30 June 2015 and the unaudited results previously announced.

MATERIAL CONTRACTS

There were no material contracts entered into by the Group which involves directors and substantial shareholders’ interest during the financial year.

RECURRENT RELATED PARTY TRANSACTIONS

Currently, the management monitor closely the transaction value of the recurrent related party transaction (“RRPT”) as per paragraph 10.09 of the Main Market Listing Requirements. However, the Company will seek for shareholders’ mandate to enter into RRPT of a revenue or trading nature at the forthcoming Annual General Meeting.



MEMbERS

Details of the composition of the Audit Committee and the attendance by each member at the Audit Committee meetings for the financial year ended 30 June 2015 are as follow:

Name of Directors Directorship DesignationNo. of Meetings

Attended

Dato’ Mohamed Salleh Bin Bajuri Independent Non-Executive Director Chairman 5/5

Bin Lay Thiam Independent Non-Executive Director Member 5/5

Datuk Pau Chiong Ung Independent Non-Executive Director(Appointed on 13 January 2015)

Member 2/2

TERMS OF REFERENCE

1. Objectives

The primary functions of the Audit Committee are to assist the Board in fulfilling the following objectives:

• Overseefinancialreporting;

• PresentatrueandfairviewofthestateofaffairsoftheCompany;

• Financialstatementsarepreparedinaccordancewithapplicableapprovedaccountingstandards;

• AssesstheadequacyandeffectivenessoftheGroup’srisksandcontrolenvironment;

• Reviewtheinternalandexternalauditprocesses;and

• Assesstheprofessionalismandindependenceofexternalauditors.

2. Membership

The Audit Committee shall be appointed by the Board from amongst the Directors and shall consist of no fewer than three (3) members. All the Audit Committee members must be Non-Executive Directors with a majority of them being independent. All the Audit Committee members should be financially literate with at least one of whom must be a member of the Malaysian Institute of Accountants or possesses such other qualifications and/or experience as prescribed and approved by Bursa Malaysia.

The members of the Audit Committee shall elect a Chairman from among its members who is an Independent Non-Executive Director. The Chairman elected shall be subjected to endorsement by the Board.

In the event that a member of the Audit Committee resigns, dies or for any other reasons cease to be a member with the result that the number of members is reduced to below three (3), the Board shall within three (3) months of such event, appoint such number of new members as may be required to make up the minimum number of three (3) members.

The Board is to review the term of office and performance of the Audit Committee and each of its members at least once in every three (3) years to determine whether the Audit Committee and its members have carried out their duties in accordance with their terms of reference.


Audit Committee Reportcont’d

TERMS OF REFERENCE cont’d

3. Authority

The Audit Committee is authorized by the Board to:

• Investigateanyactivitieswithinitstermsofreferenceandhavefullandunrestrictedaccesstoanyinformationpertainingtothe Company and the Group and any employee or member of the Management as well as the necessary resources to do so;

• Havedirectcommunicationchannelswithboththeinternalandexternalauditors,andbeabletoconvenemeetingswith

them excluding the attendance of Executive Board members and Management, whenever deemed necessary;

• Obtain external legal or other independent professional advice and also retain persons having special competenceconsidered necessary and reasonable to assist the Audit Committee in fulfilling its responsibilities;

• Performexitinterviewonthosefinance/internalauditdivision;and

• Assessandrecommendthestaffstrengthofin-houseinternalaudit.

4. Meetings

The Audit Committee shall meet at least four (4) times a year or more frequently as need arises. The Chairman shall also convene a meeting if requested to do so by any Member, the Management or the internal or external auditors to consider any matter within the scope and responsibilities of the Audit Committee.

Meetings will be attended by the members of the Audit Committee and the Company Secretary who shall act as the secretary of the Audit Committee. The Group Managing Director, head of finance, head of internal audit and representatives of the external auditors shall normally be invited to attend these meetings as well. Other Board members and employees may attend meetings upon the invitation of the Audit Committee to assist in resolving and clarifying matters raised. The Audit Committee shall be able to convene meetings with the external auditors, internal auditors or both, without Executive Board members present whenever deemed necessary.

The agenda for Audit Committee meetings shall be circulated before each meeting to members of Audit Committee. The Audit Committee Chairman reports to the Board on principal matters deliberated at Audit Committee meetings. Minutes of each meeting are circulated to the Board at the next most practicable Board meeting.

A quorum shall be two (2) members and the majority of the members present must be Independent Non-Executive Directors.

5. Duties and Responsibilities

The duties and responsibilities of the Audit Committee shall include:

• To review the effectiveness of internal control systems and to considermajor findings on internal investigations andmanagement’s response;

• ToreviewthequarterlyandannualfinancialstatementsoftheGroup,focusingparticularlyon:

(a) any changes in accounting policies and practices;

(b) significant adjustments and unusual events arising from the audit;

(c) the going concern assumption; and

(d) compliance with applicable approved accounting standards, the Main Market Listing Requirements of Bursa Malaysia and other regulatory requirements;


5. Duties and Responsibilities cont’d

• Todothefollowinginrelationtotheexternalauditfunction:

(a) consider the appointment of the external auditors by reviewing their suitability and independence, the audit fees and any question of resignation or dismissal;

(b) review with external auditors their audit plan and nature and scope of the audit prior to commencement of audit;

(c) discuss issues and reservations arising from the interim and final audits, and any matters the external auditors may wish to discuss (in the absence of Management and Executive Board members, where necessary); and

(d) review with the external auditors their evaluation of the effectiveness of the internal control system, and in particular to review the external auditors’ management letter and the management’s response;

• Todothefollowinginrelationtotheinternalauditfunction:

(a) consider the appointment of internal auditors to ensure they have relevant qualification and any question of resignation or dismissal;

(b) review the adequacy of the scope, functions and resources of the internal audit function in that it has the necessary authority to carry out its work; and

(c) review the internal audit plan and results of the internal audit and where necessary, ensure that appropriate actions are taken on the recommendations made by the internal audit function;

• ToreviewanyrelatedpartytransactionsandconflictofinterestsituationthatmayarisewithintheGroupincludinganytransaction, procedure, or course of conduct that may raise questions of management integrity, to ensure that such transactions are undertaken on the Group’s normal commercial terms and are reported annually to shareholders via the Annual Report;

• ToverifytheallocationofEmployees’ShareOptionScheme(“ESOS”)incompliancewiththecriteriaasstipulatedintheby-laws of ESOS of the Company, if any; and

• ToundertakeanyotherfunctionsorresponsibilitiesasmaybedefinedbytheBoard.

SUMMARY OF ACTIVITIES OF ThE AUDIT COMMITTEE

In line with the terms of reference of the Audit Committee the following activities were carried out by the Audit Committee during the financial year ended 30 June 2015 in the discharge of its responsibilities and duties:

• ReviewedthequarterlyandyearendconsolidatedfinancialstatementstoensuretheGroup’scompliancewiththeMainMarketListing Requirements of Bursa Malaysia, applicable approved accounting standards issued by Malaysian Accounting Standards Board and other legal and regulatory requirements before recommending them for the Board’s consideration and approval;

• Reviewed and assessed the appropriateness of the Group’s accounting policies and the adequacy of financial reportingrequirements;

• Considered the appointment of the external auditors and audit fees by evaluating the external auditor’s competence,independence, objectivity and the scope of work to be conducted;

• Reviewedtheexternalauditors’auditplanforfinancialyearpriortothecommencementofauditanduponcompletionoftheaudit, to discuss the results and recommendations;

• Reviewed the competencyof internal audit function including theprocesses, auditplanand resource requirements, aswellas the quarterly internal audit reports presented on the findings, recommendations and Management’s responses thereto are adequately addressed by Management;




SUMMARY OF ACTIVITIES OF ThE AUDIT COMMITTEE cont’d

• Consideredthree(3)proposalsubmissionsforoutsourcedinternalauditserviceandappointedoneoutofthe3firmsbasedoncredibility, experience and scope of work offered to ensure adequate resources for the internal audit function;

• ReviewedtheRiskAssessmentReportonupdatedkeyriskprofiles;

• ReviewedandrecommendedenhancementstotheGroup’scashmanagement;

• ReviewedtherelatedpartytransactionsandanyconflictofinterestthatmayhavearisenwithintheGroup;and

• Reviewedand recommended to theBoard forapproval theAuditCommitteeReportandStatementonRiskManagement&Internal Control for inclusion in the Annual Report.

SUMMARY OF ACTIVITIES OF ThE INTERNAL AUDIT FUNCTION

The Group in-house internal audit function is independent of the activities or operations of the Group. Its principle role is to provide reasonable assurance that the Group’s risk management and internal control system is sound and operating effectively. The internal audit division performs routine audit on and reviews all operating and functional units within the Group, with emphasis on key risk areas. However during the financial year under review, majority of the internal audit assignments have been outsourced to an independent professional firm in areas where technical skills and resources are not available internally. The internal auditors adopt a risk-based approach towards the planning and conduct of audits.

During the financial year under review, the internal auditors carried out the following activities:

• PresentedandobtainedapprovalfromtheAuditCommittee,theInternalAuditPlansettingouttheinternalauditworkexpectedto be carried out during the financial year;

• Presented the Internal Audit Reports to Audit Committee highlighting audit findings, recommendations to improve andmanagement responses at each quarter; and

• PerformedfollowupauditsonthesefindingsandupdatestatustotheAuditCommittee.

The total costs incurred for the internal audit function of the Group for the financial year was approximately RM241,675.



The Board of Directors of Harbour-Link Group Berhad (“the Board”) is pleased to provide the Statement on the main features and state of the Group’s risk management and internal control system pursuant to Para 15.26 (b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

RESPONSIbILITY

The Board recognizes the importance of maintaining a sound risk management practices and internal control system to safeguard shareholders’ investment and the Group’s assets. The Board affirms its overall responsibility for the Group’s approach in reviewing the adequacy and effectiveness of the risk management practices and the internal control system.

In carrying out this responsibility, the Board is assisted by the Audit Committee which is empowered by its terms of reference to ensure the adequacy and integrity of the practices and system. This is done through reports the Audit Committee receives from independent audits and Management.

The review by the Board through the Audit Committee is an ongoing process that is in place for the whole financial year under review and up to the date of approval of this Statement. These reviews include risk management procedures as well as financial, operational and compliance control of the Group, except for associates and joint ventures. The Group’s interest in the associate companies is served through Board representative and periodic review of the associate companies’ management accounts by the Management. Enhancements are made in line with the Board’s commitment to improve the Group’s governance, risk management and internal control system in tandem to meeting the Group’s business objectives.

The risk management and internal control system is designed to manage the Group’s risks within an acceptable risk appetite rather than eliminate the risk of failure to achieve the Group’s business objectives. Accordingly, it can only provide reasonable rather than absolute assurance against material misstatement, fraud or loss.

RISK MANAGEMENT

The Group’s risk management is an ongoing process to identify, evaluate and manage the principal risks faced by the businesses in the Group for the financial year under review and up to the date of approval of this Statement. This ongoing process ensures that the risk implications of any changes in the business environment to which the Group operates in are identified and assessed for its relevance and documented accordingly. This is particularly important as the Group expanded into property development. As such, a top-down review of enterprise level risks was conducted and coordinated by an appointed risk consultant with input from senior management from each of the core businesses. The result was a new Group risk register with all its principal risks documented for each of its core businesses and corresponding internal control that is in place to mitigate these risks affecting the achievement of the Group’s mission, vision and values.

INTERNAL AUDIT FUNCTION

The Group engages professional service on internal audit function and assisted by the in-house internal audit team that reports independently to the Audit Committee. The role of the internal audit in the Group includes the following:

• Regular and continuous reviews on the adequacy and efficiency of the Group’s internal controls;

• Procedures and operations, highlighting significant risks and non-compliance issues impacting the Group; and

• Where applicable, providing recommendations to improve on the effectiveness of controls and operations. Where necessary, follow-up reviews are also being carried out to ensure that appropriate actions are being taken to address internal control weaknesses highlighted.

The internal audit reviews conducted are performed according to the Internal Audit Plan, prepared on a risk-based approach which is reviewed and approved by the Audit Committee annually. The results of these planned internal audit reviews are communicated and reported quarterly to the Audit Committee.


Statement on Risk Management & Internal Controlcont’d

OThER KEY ELEMENTS OF RISK MANAGEMENT & INTERNAL CONTROL

These other key elements of risk management and internal control systems further support the maintenance of a strong risk management and internal control environment in the Group:

• AuditCommitteethatcompriseswhollyindependentnon-executivedirectorsanditsactivitiesundertakenduringthefinancialyear under review are set out in the Audit Committee Report;

• Establish other Board Committees to assist the Board in providing independent oversight function, namely NominationCommittee and Remuneration Committee with responsibilities and authorities clearly specified in their respective terms of reference;

• Organizationstructurewithclearlydefinedlinesofresponsibility,delegationofauthorityandaprocessofhierarchicalreporting;

• Scheduledoperationsandmanagementmeetings;

• Existenceoflimitsofauthoritywhichprovidestheauthoritylimitsoftheemployeesintheapprovalofvarioustransactions;

• EffectivereportingsystemingeneratingtimelyfinancialinformationforManagementreviewanddecisionmaking;

• QuarterlyreviewsoftheperformanceandfinancialresultsoftheGrouptotheBoard;

• TheBoardisfurnishedwithtimelyanddetailedBoardpapersandisfurtherbriefedonallsignificantmattersfortheirconsiderationand deliberation;

• AnannualbudgetingprocesswhereeachbusinessesintheGrouppreparesitsbudgetforthefollowingfinancialyearandthebudget is then reviewed by the Management after which the budget is submitted to the Board;

• ReviewandapprovalofallproposalsrelatingtosignificantcapitalandinvestmentacquisitionbytheBoard;

• AdequateinsurancecoverageonmajorassetsandtransactionstopreventmateriallossesandreducecontingentliabilitiesoftheGroup;

• Documented policies and standard operating procedures for key processes are updated from time to time in tandemwithchanges to business environment or regulatory guidelines;

• Employmentofqualifiedandcapableworkforce;

• Establishingtraininganddevelopmentplanstoensurestaffarekeptuptodatewithnecessarycompetenciestocarryouttheirduties and responsibilities well; and

• ActiveparticipationbycertainmembersoftheBoardintheday-to-dayrunningoftheoperationsandregulardialogueswithsenior management on operational matters.

CONCLUSION

There were no material losses incurred during the financial year under review as a result of weaknesses in risk management and internal control. Overall, the Board is satisfied that the assessment and review process of the Group’s businesses are in place to provide reasonable assurance on the adequacy and effectiveness of the governance, risk and internal control system of the Group.

TheBoardhasalsoreceivedreasonableassurancefromtheGroupManagingDirectorandGroupFinance&AccountsManagerthatthe Group’s risk management and internal control are operating adequately and effectively, in all material aspects based on the risk management practices and internal control system adopted by the Group. The Board and Management remain committed towards continuous measures to improve and strengthen the risk management and internal control environment.


REVIEW OF ThE STATEMENT bY EXTERNAL AUDITORS

As required by Para 15.23 of the Main Market Listing Requirements of Bursa Malaysia Berhad, the external auditors have reviewed this Statement for inclusion in the Annual Report for the Group for financial year under review. Based on their review, the external auditors have reported to the Board that nothing has come to their attention that causes them to believe that this Statement is inconsistent with their understanding of the process the Board has adopted in the review of the adequacy and effectiveness of the risk management and internal control of the Group.

This Statement is made in accordance with a resolution of the Board dated 19 October 2015.

Statement on Risk Management & Internal Controlcont’d


31

35

35

36

38

39

41

44

47

127

Directors’ Report

Statement by Directors

Statutory Declaration

Independent Auditors‘ Report

Statements of Pro�t or Loss and Other Comprehensive Income

Statements of Financial Position

Statements of Changes in Equity

Statements of Cash Flows

Notes to the Financial Statements

Notes to the Financial Statements - Supplementary Information

FinancialStatementsContents


Directors’ Report

The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 30 June 2015. PRINCIPAL ACTIVITIES The principal activities of the Company are investment holding and provision of management services. The principal activities of the subsidiaries are disclosed in Note 17 to the financial statements. There have been no significant changes in the nature of the principal activities during the financial year. RESULTS

Group Company

RM RM

Profit for the year 54,641,961 19,610,718

Attributable to:

Owners of the Company 51,789,526 19,610,718

Non-controlling interest 2,852,435 -

54,641,961 19,610,718 There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements. In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature. DIVIDENDS The amount of dividends paid by the Company since 30 June 2014 were as follows: In respect of the financial year ended 30 June 2015 as reported in the directors’ report of that year:

RM

First and final tax exempt (single-tier) dividend of 2.5% per share on 182,000,002 ordinary shares, declared on 15 October 2014 and paid on 19 December 2014. 4,550,000

At the forthcoming Annual General Meeting, the first and final tax exempt (single-tier) dividend in respect of the financial year ended 30 June 2015, of 5.5% on 182,000,002 ordinary shares amounting to a dividend payable of RM10,010,000 (5.5 sen per ordinary share) will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 30 June 2016.


Directors’ Reportcont’d

DIRECTORS The names of the directors of the Company in office since the date of the last report and at the date of this report are: Yong Piaw Soon Dato’ Mohamed Salleh Bin Bajuri Wong Siong Seh Dato’ Toh Guan Seng Lee Seng Chiong Hii Kwong Wui Lau Sii Hin Bin Lay Thiam Datuk Pau Chiong Ung (Appointed on 13 January 2015) DIRECTORS’ BENEFITS Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of acquisition of shares in or debentures of the Company or any other body corporate. Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the director or the fixed salary of the full-time employee of the Company as shown in Note 9 to the financial statements) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest, except as disclosed in Note 37 to the financial statements. DIRECTORS’ INTERESTS According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in shares in the Company and its related corporations during the financial year were as follows:

Number of Ordinary Shares of RM1 Each

01.07.2014 Acquired Sold 30.06.2015

Ordinary share of the Company

Direct Interest:

Yong Piaw Soon 10,266,545 984,000 - 11,250,545

Dato’ Mohamed Salleh Bin Bajuri 409,832 - - 409,832

Wong Siong Seh 5,939,200 1,075,100 - 7,014,300

Dato’ Toh Guan Seng 2,300,000 - - 2,300,000

Lee Seng Chiong 1,028,000 355,000 - 1,383,000

Hii Kwong Wui 1,370,000 100,000 - 1,470,000

Lau Sii Hin 690,000 60,000 - 750,000

Deemed Interest:

Yong Piaw Soon 98,734,575 - 2,000,000 96,734,575

Wong Siong Seh 98,734,575 - 2,000,000 96,734,575 By virtue of their substantial interest in shares of the Company, Yong Piaw Soon and Wong Siong Seh are also deemed to be interested in the shares of its subsidiaries to the extent the holding company has an interest.



OTHER STATUTORY INFORMATION (a) Before the statements of profit or loss and other comprehensive income and statements of financial position of the Group and

of the Company were made out, the directors took reasonable steps: (i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for

doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.

(b) At the date of this report, the directors are not aware of any circumstances which would render: (i) the amount written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the

Group and of the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

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

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which

secures the liabilities of any other person; or

(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year.

(f ) In the opinion of the directors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made.

SIGNIFICANT EVENTS Details of the significant events are disclosed in Note 17 to the financial statements. SUBSEQUENT EVENTS Details of subsequent events are disclosed in Note 43 to the financial statement.



AUDITORS The auditors, Ernst & Young, have expressed their willingness to continue in office. Signed on behalf of the Board in accordance with a resolution of the directors dated 20 October 2015. YONG PIAW SOON WONG SIONG SEH


We, YONG PIAW SOON and WONG SIONG SEH, being two of the directors of HARBOUR-LINK GROUP BERHAD, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 38 to 126 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 30 June 2015 and of their financial performance and cash flows for the year then ended. The supplementary information set out in Note 44 to the financial statements have been presented in accordance with directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants. Signed on behalf of the Board in accordance with a resolution of the directors dated 20 October 2015.

YONG PIAW SOON WONG SIONG SEH

Statement by DirectorsPursuant to Section 169(15) of the Companies Act, 1965

Statutory DeclarationPursuant to Section 169(16) of the Companies Act, 1965

I, YONG PIAW SOON, being the director primarily responsible for the financial management of HARBOUR-LINK GROUP BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out on pages 38 to 127 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960. Subscribed and solemnly declared by the abovenamed YONG PIAW SOON at Bintulu in the State of Sarawak on 20 October 2015 YONG PIAW SOON

Before me

LAU SONG TINGNo. Q100Commissioner for OathsBintulu, Sarawak


Independent Auditors’ Report to the Members of HARBOUR-LINK GROUP BERHAD - 592902-D (Incorporated in Malaysia)

REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of Harbour-Link Group Berhad, which comprise the statements of financial position as at 30 June 2015 of the Group and of the Company, and statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 38 to 126.

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 judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as at 30 June 2015 and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 17 to the financial statements, being financial statements that have been included in the consolidated financial statements.

(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes.

(d) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment required to be made under Section 174(3) of the Act.


Independent Auditors’ Report to the Members of HARBOUR-LINK GROUP BERHAD - 592902-D (Incorporated in Malaysia)

cont’d

OTHER REPORTING RESPONSIBILITIES

The supplementary information set out in Note 44 on page 127 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

OTHER MATTERS

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

ERNST & YOUNG YONG VOON KAR AF: 0039 1769/04/16 (J/PH) Chartered Accountants Chartered Accountant Kuching, Malaysia

20 October 2015


Statements of Profit or Loss and Other Comprehensive Income For the Financial Year Ended 30 June 2015

Group Company

Note 2015 2014 2015 2014

RM RM RM RM

Revenue 4 506,963,059 457,562,862 24,657,536 11,562,211

Cost of sales (383,620,692) (378,975,968) - -

Gross profit 123,342,367 78,586,894 24,657,536 11,562,211

Other items of income

Other income 5 7,084,510 7,234,572 845,825 815,372

Other items of expense

Administrative and other expenses (48,793,340) (28,265,776) (4,342,090) (3,813,380)

Finance costs 6 (5,737,817) (6,399,897) (1,557,039) (1,683,324)

Share of result of associates 649,759 154,046 - -

Share of result of joint venture 114,192 (286,551) - -

Profit before tax 7 76,659,671 51,023,288 19,604,232 6,880,879

Income tax expense 10 (22,017,710) (14,674,130) 6,486 (1,149,415)

Profit net of tax 54,641,961 36,349,158 19,610,718 5,731,464

Other comprehensive income:

Other comprehensive income to be reclassified to profit or loss in subsequent periods:

Foreign currency translation 1,100,717 425,250 - -

Total comprehensive income for the year 55,742,678 36,774,408 19,610,718 5,731,464

Profit attributable to:

Owners of the Company 51,789,526 33,415,247 19,610,718 5,731,464

Non-controlling interest 2,852,435 2,933,911 - -

54,641,961 36,349,158 19,610,718 5,731,464

Total comprehensive income attributable to:

Owners of the Company 52,890,243 33,840,497 19,610,718 5,731,464


55,742,678 36,774,408 19,610,718 5,731,464

Earnings per share attributable to owners of the Company (sen per share)

Basic 11 28.46 18.36

Diluted N/A N/A

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.


Statements of Financial Position As at 30 June 2015

Group Company

Note 2015 2014 2015 2014

RM RM RM RM

ASSETS

Non-current assets

Property, plant and equipment 13 197,728,797 197,074,382 6,854,066 7,107,341

Investment properties 14 9,356,272 9,556,757 - -

Prepaid land lease payments 15 6,148,398 1,941,471 - -

Land held for development 23(a) 43,694,038 45,889,483 - -

Intangible assets 16 105,000 105,000 - -

Investment in subsidiaries 17 - - 179,232,623 178,224,623

Investment in associates 18 3,685,381 3,106,085 1,466,200 1,466,200

Investment in joint venture 19 900,755 786,563 - -

Other investments 20 652,445 652,445 - -

Deferred tax assets 21 9,832,252 2,664,409 - -

272,103,338 261,776,595 187,552,889 186,798,164

Current assets

Inventories 22 5,106,023 3,248,638 - -

Development properties 23(b) 61,906,934 30,844,398 - -

Trade and other receivables 24 133,160,334 96,731,774 18,094,086 19,279,288

Investment securities 25 8,270,415 6,516,215 - -

Other current assets 26 11,455,064 5,700,204 1,241,159 1,532,140

Cash and bank balances 28 90,896,516 81,592,359 1,988,880 804,565

310,795,286 224,633,588 21,324,125 21,615,993

Total assets 582,898,624 486,410,183 208,877,014 208,414,157


Group Company

Note 2015 2014 2015 2014

RM RM RM RM

Equity and liabilities

Current liabilities

Loans and borrowings 29 28,278,737 42,381,218 1,297,050 2,282,140

Trade and other payables 30 88,227,356 59,076,036 23,317,714 36,098,977

Other current liabilities 31 85,918,513 39,485,768 - -

Income tax payable 12,543,740 6,475,650 - -

214,968,346 147,418,672 24,614,764 38,381,117

Net current assets/(liabilities) 95,826,940 77,214,916 (3,290,639) (16,765,124)

Non-current liabilities

Deferred tax liabilities 21 15,651,759 13,428,951 56,800 63,286

Loans and borrowings 29 53,405,320 76,428,564 721,205 1,546,227

69,057,079 89,857,515 778,005 1,609,513

Total liabilities 284,025,425 237,276,187 25,392,769 39,990,630

Net assets 298,873,199 249,133,996 183,484,245 168,423,527

Equity attributable to owners of the Company

Share capital 32 182,000,002 182,000,002 182,000,002 182,000,002

Retained earnings/(accumulated losses) 33 158,691,271 111,340,980 1,484,243 (13,576,475)

Other reserve 34 (62,944,880) (62,944,880) - -

Foreign currency translation reserve 35 1,623,844 523,127 - -

279,370,237 230,919,229 183,484,245 168,423,527


Total equity 298,873,199 249,133,996 183,484,245 168,423,527

Total equity and liabilities 582,898,624 486,410,183 208,877,014 208,414,157


Statements of Financial Position As at 30 June 2015cont’d


Statements of Changes in Equity For the Financial Year Ended 30 June 2015

Attributable to owners of the Company

Distributable Non-Distributable

Group Note Share

capital Retained earnings

Other reserve

Foreign currency

translation reserve

Total equity attributed

to owners of the company

Non - controlling

interests Total

equity

RM RM RM RM RM RM RM

At 1 July 2014 182,000,002 111,340,980 (62,944,880) 523,127 230,919,229 18,214,767 249,133,996

Profit net of tax - 51,789,526 - - 51,789,526 2,852,435 54,641,961

Other comprehensive income - - - 1,100,717 1,100,717 - 1,100,717

Total comprehensive income - 51,789,526 - 1,100,717 52,890,243 2,852,435 55,742,678

Acquisition of non-controlling interest in subsidiaries 17(b) - 110,765 - - 110,765 (1,158,140) (1,047,375)

Dividends 12 - (4,550,000) - - (4,550,000) - (4,550,000)

Dividend paid to non- controlling interest in subsidiaries - - - - - (406,100) (406,100)

At 30 June 2015 182,000,002 158,691,271 (62,944,880) 1,623,844 279,370,237 19,502,962 298,873,199


Statements of Changes in Equity For the Financial Year Ended 30 June 2015cont’d

Attributable to owners of the Company

Distributable Non-Distributable

Group Note Share

capital Retained earnings

Other reserve

Foreign currency

translation reserve

Total equity attributed

to owners of the

company

Non - controlling

interests Total

equity

RM RM RM RM RM RM RM

At 1 July 2013 182,000,002 82,201,457 (62,944,880) 97,877 201,354,456 15,347,412 216,701,868

Profit net of tax - 33,415,247 - - 33,415,247 2,933,911 36,349,158

Other comprehensive income - - - 425,250 425,250 - 425,250

Total comprehensive income - 33,415,247 - 425,250 33,840,497 2,933,911 36,774,408

Disposal of interests in subsidiaries - 274,276 - - 274,276 50,724 325,000

Acquisition of a subsidiary - - - - - 63,820 63,820

Dividends 12 - (4,550,000) - - (4,550,000) - (4,550,000)

Capital contributions from non-controlling interest - - - - - 340,000 340,000

Dividend paid to non-controlling interest in subsidiaries - - - - - (521,100) (521,100)

At 30 June 2014 182,000,002 111,340,980 (62,944,880) 523,127 230,919,229 18,214,767 249,133,996


Company Note Share

Capital

(Accumulated Losses)/

Retained Earnings

Total Equity

RM RM RM

2015

At 1 July 2014 182,000,002 (13,576,475) 168,423,527

Total comprehensive income - 19,610,718 19,610,718

Dividends 12 - (4,550,000) (4,550,000)

At 30 June 2015 182,000,002 1,484,243 183,484,245

2014

At 1 July 2013 182,000,002 (14,757,939) 167,242,063

Total comprehensive income - 5,731,464 5,731,464

Dividends 12 - (4,550,000) (4,550,000)

At 30 June 2014 182,000,002 (13,576,475) 168,423,527


Statements of Changes in Equity For the Financial Year Ended 30 June 2015

cont’d


Statements of Cash Flows For the Financial Year Ended 30 June 2015

Group Company

Note 2015 2014 2015 2014

RM RM RM RM

Operating activities

Profit before tax 76,659,671 51,023,288 19,604,232 6,880,879

Adjustments for:

Accrual of claims 7 3,778,036 - - -

Amortisation of prepaid land lease payments 7 93,073 50,074 - -

Allowance for impairment for trade receivables, net of reversal 7 10,804,842 2,721,416 - -

Bad debts written off 7 23,418 261,408 - -

Depreciation of property, plant and equipment 7 20,001,013 17,772,099 512,355 360,975

Dividend income 4 - - (22,887,536) (9,794,711)

Depreciation of investment properties 7 200,485 228,571 - -

Gain on disposal of property, plant and equipment, net 5, 7 (1,553,075) (2,619,510) (2,698) (5,999)

Interest expense 6 5,737,817 6,399,897 1,557,039 1,683,324

Interest income 5 (733,966) (558,122) (796,544) (768,190)

Property, plant and equipment written off 7 119,508 66,542 458 1,947

Impairment loss on investment properties 7 - 539,573 - -

Investment properties written off 7 - 27,880 - -

Prepayment written off 7 - 443,196

Share of result of associates (649,759) (154,046) - -

Share of result of joint venture (114,192) 286,551 - -

Unrealised foreign exchange loss, net 5, 7 1,420,344 117,136 - -

Total adjustments 39,127,544 25,582,665 (21,616,926) (8,522,654)


Statements of Cash Flows For the Financial Year Ended 30 June 2015

cont’d

Group Company

Note 2015 2014 2015 2014

RM RM RM RM

Operating cash flows before changes in working capital 115,787,215 76,605,953 (2,012,694) (1,641,775)

Changes in working capital

Decrease/(increase) in land held for development 2,195,445 (10,356,925) - -

Increase in development properties (30,558,292) (18,003,556) - -

Increase in inventories (1,857,385) (375,911) - -

(Increase)/decrease in trade and other receivables (48,677,164) 9,597,927 1,185,202 591,132

(Increase)/decrease in other current assets (4,699,612) 32,654,528 1,984 1,123

Increase/(decrease) in trade and other payables 25,373,284 (1,196,467) (12,781,263) (233,528)

Increase in other current liabilities 46,432,745 34,057,993 - -

Total changes in working capital (11,790,979) 46,377,589 (11,594,077) 358,727

Taxes paid, net of refund (20,418,353) (10,551,443) 288,997 (653)

Interest received 733,966 558,122 796,544 768,190

Interest paid (6,242,061) (7,328,344) (1,557,039) (1,683,324)

Net cash flows from/(used in) operating activities 78,069,788 105,661,877 (14,078,269) (2,198,835)

Investing activities

Acquisition of non-controlling interest in subsidiaries 17(b) (1,047,375) - (1,008,000) -

Dividends received 110,463 2,077,535 22,887,536 8,276,211

Increase in investment in associates (40,000) - - -

Increase in investment securities (1,754,200) (4,741,837) - -

Net cash outflow from acquisition of a subsidiary - (205,040) - -

Proceeds from disposal of property, plant and equipment 4,990,397 3,486,090 2,700 6,000

Proceeds from disposal of interests in subsidiaries - 325,000 - -

Purchase of property, plant and equipment (18,448,115) (19,945,974) (223,540) (257,452)

Purchase of prepaid land lease payments (4,300,000) - - -

Net cash flows (used in)/from investing activities (20,488,830) (19,004,226) 21,658,696 8,024,759


Statements of Cash Flows For the Financial Year Ended 30 June 2015cont’d

Group Company

Note 2015 2014 2015 2014

RM RM RM RM

Financing Activities

Dividends paid to non-controlling interest in subsidiaries (406,100) (521,100) - -

Dividends paid on ordinary shares (4,550,000) (4,550,000) (4,550,000) (4,550,000)

Capital contributed by non-controlling interest in subsidiaries - 340,000 - -

Increase in cash at bank pledged for borrowings (2,598,627) - - -

Increase in short-term deposits pledged for bank borrowings (1,853,921) (1,894,194) (725,746) (242,758)

Proceeds from loans and borrowings 7,530,000 42,546,340 - -

Repayment of loans and borrowings (33,037,937) (67,818,529) (533,491) (502,632)

Repayment of finance lease payables (15,853,752) (5,975,217) (264,396) (94,588)

Net cash flows used in financing activities (50,770,337) (37,872,700) (6,073,633) (5,389,978)

Net increase in cash and cash equivalents 6,810,621 48,784,951 1,506,794 435,946

Effects of exchange rate changes on cash and cash equivalents 1,097,171 470,947 - -

Cash and cash equivalents at 1 July 72,390,544 23,134,646 (1,173,296) (1,609,242)

Cash and cash equivalents at 30 June 28 80,298,336 72,390,544 333,498 (1,173,296)



Notes to the Financial Statements For the Financial Year Ended 30 June 2015

1. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Board of Bursa Malaysia Securities Berhad. The registered office of the Company is located at Wisma Harbour, Parkcity Commerce Square, Jalan Tun Ahmad Zaidi, 97000 Bintulu, Sarawak.

The principal activities of the Company are investment holding and provision of management services. The principal activities of the subsidiaries are disclosed in Note 17 to the financial statements. There have been no significant changes in the nature of the principal activities during the financial year.

The financial statements were authorised in accordance with a resolution of the directors on 20 October 2015.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. At the beginning of the current financial year, the Group and the Company adopted new and revised MFRSs which are mandatory for the financial periods beginning on or after 1 July 2014.

The financial statements have been prepared on a historical cost basis except as disclosure in the accounting policies below.

The financial statements are presented in Ringgit Malaysia (RM).

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year except as follows:

On 1 July 2014, the Group and the Company adopted the following amended MFRSs and IC Interpretation mandatory

for annual financial periods beginning on or after 1 July 2014:

DescriptionEffective for period

beginning on or after

Amendments to MFRS 132: Offsetting Financial Assets and Financial Liabilities 1 January 2014

Amendments to MFRS 10, MFRS 12 and MFRS 127: Investment Entities 1 January 2014

Amendments to MFRS 136: Recoverable Amount Disclosures for Non-Financial Assets

1 January 2014

Amendments to MFRS 139: Novation of Derivatives and Continuation of Hedge Accounting

1 January 2014

IC Interpretation 21: Levies 1 January 2014

Annual Improvements to MFRSs 2010-2012 Cycle 1 July 2014

Annual Improvements to MFRSs 2011-2013 Cycle 1 July 2014

Amendments to MFRS 119: Defined Benefits Plans: Employee contributions 1 July 2014

Notes to the Financial Statements For the Financial Year Ended 30 June 2015cont’d



2. SIGNIFICANT ACCOUNTING POLICIES cont’d

2.2 Changes in accounting policies cont’d

The nature and impact of the new and amended MFRSs and IC Interpretation are described below:

Amendments to MFRS 132: Offsetting Financial Assets and Financial Liabilities The amendments clarify the meaning of “currently has a legally enforceable right to set-off” and “simultaneous

realisation and settlement”. These amendments are to be applied retrospectively. These amendments have no impact on the Group, since none of the entities in the Group has any offsetting arrangements.

Amendments to MFRS 10, MFRS 12 and MFRS 127: Investment Entities

These amendments provide an exception to the consolidation requirement for entities that meet the definition of an investment entity under MFRS 10 Consolidated Financial Statements and must be applied retrospectively, subject certain transition relief. The exception to consolidation requires investment entities to account for subsidiaries at fair value through profit or loss. This amendment have no impact on the Group, since none of the entities in the Group would qualify to be an investment entity under MFRS 10.

Amendments to MFRS 136: Recoverable Amount Disclosures for Non-Financial Assets

The amendments to MFRS 136 remove the requirement to disclose the recoverable amount of a cash-generating unit (CGU) to which goodwill or other intangible assets with indefinite useful lives has been allocated when there has been no impairment or reversal of impairment of the related CGU. In addition, the amendments introduce additional disclosure requirements when the recoverable amount is measured at fair value less costs of disposal. These new disclosures include the fair value hierarchy, key assumptions and valuation techniques used which are in line with the disclosure required by MFRS 13 Fair Value Measurements. The application of these amendments has had no material impact on the disclosures in the Group’s and the Company’s financial statements.

Amendments to MFRS 139: Novation of Derivatives and Continuation of Hedge Accounting

These amendments provide relief from the requirement to discontinue hedge accounting when a derivative

designated as a hedging instrument is novated under certain circumstances. The amendments also clarify that any change to the fair value of the derivative designated as a hedging instrument arising from the novation should be included in the assessment and measure of hedge effectiveness. Retrospective application is required. These amendments have no impact on the Group and the Company as the Group and the Company does not have any derivatives that are subject to novation.

IC Interpretation 21: Levies

IC 21 defines a levy and clarifies that the obligating event which gives rise to the liability is the activity that triggers

the payment of the levy, as identified by legislation. For a levy which is triggered upon reaching a minimum threshold, IC 21 clarifies that no liability should be recognised before the specified minimum threshold is reached. Retrospective application is required. The application of IC 21 has had no material impact on the disclosures or on the amounts recognised in the Group’s and the Company’s financial statements.

Annual Improvements to MFRSs 2010–2012 Cycle

The Annual Improvements to MFRSs 2010-2012 Cycle include a number of amendments to various MFRSs, which are summarised below. The application of these amendments have no impact on the Group’s and the Company’s financial statements.


cont’d



2.2 Changes in accounting policies cont’d Annual Improvements to MFRSs 2010–2012 Cycle cont’d

(i) MFRS 3: Business Combinations

The amendments to MFRS 3 clarifies that contingent consideration classified as liabilities (or assets) should be

measured at fair value through profit or loss at each reporting date, irrespective of whether the contingent consideration is a financial instrument within the scope of MFRS 9 or MFRS 139. The amendments are effective for business combinations for which the acquisition date is on or after 1 July 2014.

(ii) MFRS 8: Operating Segments The amendments are to be applied retrospectively and clarify that:

- an entity must disclose the judgements made by management in applying the aggregation criteria in

MFRS 8, including a brief description of operating segments that have been aggregated and the economic characteristics used to assess whether the segments are similar; and

- the reconciliation of segment assets to total assets is only required to be disclosed if the reconciliation is reported to the chief operating decision maker.

(iii) MFRS 116: Property, Plant and Equipment and MFRS 138: Intangible Assets

The amendments remove inconsistencies in the accounting for accumulated depreciation or amortisation when an item of property, plant and equipment or an intangible asset is revalued. The amendments clarify that the gross carrying amount is adjusted in a manner consistent with the revaluation of the carrying amount of the asset and that accumulated depreciation/amortisation is the difference between the gross carrying amount and the carrying amount after taking into account accumulated impairment losses.

(iv) MFRS 124: Related Party Disclosures

The amendments clarify that a management entity providing key management personnel services to a reporting entity is a related party of the reporting entity. The reporting entity should disclose as related party transactions the amounts incurred for the service paid or payable to the management entity for the provision of key management personnel services.


The Annual Improvements to MFRSs 2011-2013 Cycle include a number of amendments to various MFRSs, which are

summarised below. The application of these amendments have no impact on the Group’s and the Company’s financial statements.

(i) MFRS 3: Business Combinations

The amendments to MFRS 3 clarify that the standard does not apply to the accounting for formation of all types

of joint arrangement in the financial statements of the joint arrangement itself. This amendment is to be applied prospectively.

(ii) MFRS 13: Fair Value Measurement

The amendments to MFRS 13 clarify that the portfolio exception in MFRS 13 can be applied not only to financial assets and financial liabilities, but also to other contracts within the scope of MFRS 9 (or MFRS 139 as applicable).




2.2 Changes in accounting policies cont’d Annual Improvements to MFRSs 2011–2013 Cycle cont’d

(iii) MFRS 140: Investment Property

The amendments to MFRS 13 clarify that the portfolio exception in MFRS 13 can be applied not only to financial assets and financial liabilities, but also to other contracts within the scope of MFRS 9 (or MFRS 139 as applicable).

- the property meets the definition of investment property in terms of MFRS 140; and

- the transaction meets the definition of a business combination under MFRS 3,

to determine if the transaction is a purchase of an asset or is a business combination.

Amendments to MFRS 119: Defined Benefit Plans: Employee Contributions

The amendments to MFRS 119 clarify how an entity should account for contributions made by employees or third parties to defined benefit plans, based on whether those contributions are dependent on the number of years of service provided by the employee. For contributions that are independent of the number of years of service, an entity is permitted to recognise such contributions as a reduction in the service cost in the period in which the service is rendered, instead of allocating the contributions to the periods of service. For contributions that are dependent on the number of years of service, the entity is required to attribute them to the employees’ periods of service.

These amendments have no impact on the Group, since none of the entities in the Group has defined benefit plan.

2.3 Amendments/standards issued but not yet effective

The amendments/standards issued but not yet effective up to the date of issuance of the Group’s financial statements are listed below. The Group and the Company intend to adopt these amendments/standards, if applicable, when they become effective.

DescriptionEffective for period

beginning on or after

Annual Improvements to MFRSs 2012 - 2014 Cycle 1 January 2016

Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and Amortisation

1 January 2016

Amendments to MFRS 116 and MFRS 141: Agriculture : Bearer Plants 1 January 2016

Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

1 January 2016

Amendments to MFRS 10, MFRS 12, and MFRS 128: Investments Entities - Applying the Consolidation Exception

1 January 2016

Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operations 1 January 2016

Amendments to MFRS 101: Disclosure Initiatives 1 January 2016

Amendments to MFRS 127: Equity Method in Separate Financial Statements 1 January 2016

MFRS 14: Regulatory Deferral Accounts 1 January 2016

MFRS 15: Revenue from Contracts with Customers 1 January 2018

MFRS 9: Financial Instruments 1 January 2018


cont’d


2. SIGNIFICANT ACCOUNTING POLICIES cont’d 2.3 Amendments/standards issued but not yet effective cont’d

The directors expect that the adoption of the above standards and interpretations will have no material impact on the financial statements in the period of initial application except as discussed below:


The Annual Improvements to MFRSs 2012-2014 Cycle include a number of amendments to various MFRSs, which are summarised below. The directors of the Company do not anticipate that the application of these amendments will have a significant impact on the Group’s and the Company’s financial statements. (i) MFRS 5: Non-current Assets Held for Sale and Discontinued Operations

The amendment to MFRS 5 clarifies that changing from one of these disposal methods to the other should not be considered to be a new plan of disposal, rather it is a continuation of the original plan. There is therefore no interruption of the application of the requirements in MFRS 5.

The amendment also clarifies that changing the disposal method does not change the date of classification. This amendment is to be applied prospectively to changes in methods of disposal that occur in annual periods beginning on or after 1 January 2016, with earlier application permitted.

(ii) MFRS 7: Financial Instruments - Disclosures

The amendment clarifies that a servicing contract that includes a fee can constitute continuing involvement in a financial asset. An entity must assess the nature of the fee and arrangement against the guidance for continuing involvement in MFRS 7 in order to assess whether the disclosures are required.

In addition, the amendment also clarifies that the disclosures in respect of offsetting of financial assets and financial liabilities are not required in the condensed interim financial report.

(iii) MFRS 119: Employee Benefits

The amendment clarifies that market depth of high quality corporate bonds is assessed based on the currency in which the obligation is denominated, rather than the country where the obligation is located. When there is no deep market for high quality corporate bonds in that currency, government bond rates must be used.

The amendment must be applied prospectively.

(iv) MFRS 134: Interim Financial Reporting

MFRS 134 requires entities to disclose information in the notes to the interim financial statements ‘if not disclosed elsewhere in the interim financial report’.

The amendment states that the required interim disclosures must either be in the interim financial statements or incorporated by cross-reference between the interim financial statements and wherever they are included within the greater interim financial report (e.g., in the management commentary or risk report). The other information within the interim financial report must be available to users on the same terms as the interim financial statements and at the same time.




Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and Amortisation

The amendments clarify that revenue reflects a pattern of economic benefits that are generated from operating a business (of which the asset is part) rather than the economic benefits that are consumed through the use of an asset. As a result, a revenue-based method cannot be used to depreciate property, plant and equipment and may only be used in very limited circumstances to amortise intangible assets.

The amendments are effective prospectively for annual periods beginning on or after 1 January 2016, with early adoption permitted. These amendments are not expected to have any impact to the Group as the Group has not used a revenue-based method to depreciate its non-current assets.

Amendments to MFRS 116 and MFRS 141: Agriculture: Bearer Plants

The amendments change the accounting requirements for biological assets that meet the definition of bearer plants. Under the amendments, biological assets that meet the definition of bearer plants will no longer be within the scope of MFRS 141. Instead, MFRS 116 will apply. After initial recognition, bearer plants will be measured under MFRS 116 at accumulated cost (before maturity) and using either the cost model or revaluation model (after maturity). The amendments also require that produce that grows on bearer plants will remain in the scope of MFRS 141 and are measured at fair value less costs to sell.

The amendments are effective for annual periods beginning on or after 1 January 2016 and are to be applied retrospectively, with early adoption permitted. These amendments will not have any impact on the Group’s and the Company’s financial statements.

Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The amendments clarify that:

- gains and losses resulting from transactions involving assets that do not constitute a business, between investor and its associate or joint venture are recognised in the entity’s financial statements only to the extent of unrelated investors’ interests in the associate or joint venture; and

- gains and losses resulting from transactions involving the sale or contribution to an associate of a joint venture of assets that constitute a business is recognised in full.

The amendments are to be applied prospectively to the sale or contribution of assets occurring in annual periods beginning on or after 1 January 2016. Earlier application is permitted.

Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities - Applying the Consolidation Exception

The amendments clarify that the exemption from presenting consolidated financial statements applies to a parent entity that is a subsidiary of an investment entity, when the investment entity measures all of its subsidiaries at fair value. The amendments further clarify that only a subsidiary that is not an investment entity itself and provides support services to the investment entity is consolidated. In addition, the amendments also provides that if an entity that is not itself an investment entity has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate’s or joint venture’s interests in subsidiaries.

The amendments are to be applied retrospectively and are effective for annual periods beginning on or after 1 January 2016, with early adoption permitted. These amendments will not have any impact on the Group’s and the Company’s financial statements.


cont’d



Amendments to MFRS 11 Joint Arrangement: Accounting for Acquisitions of Interests in Joint Operations

The amendments to MFRS 11 require that a joint operator which acquires an interest in a joint operations which constitute a business to apply the relevant MFRS 3 Business Combinations principles for business combinations accounting. The amendments also clarify that a previously held interest in a joint operation is not remeasured on the acquisition of an additional interest in the same joint operation while joint control is retained. In addition, a scope exclusion has been added to MFRS 11 to specify that the amendments do not apply when the parties sharing joint control, including the reporting entity, are under common control of the same ultimate controlling party.

These amendments are to be applied prospectively for annual periods beginning on or after 1 January 2016, with early adoption permitted. The Directors of the Company do not anticipate that the application of these amendments will have a material impact on the Group’s consolidated financial statements.

Amendments to MFRS 101: Disclosure Initiatives

The amendments to MFRS 101 include narrow-focus improvements in the following five areas:

- Materiality- Disaggregation and subtotals- Notes structure - Disclosure of accounting policies- Presentation of items of other comprehensive income arising from equity accounted investments

The directors of the Company do not anticipate that the application of these amendments will have a material impact on the Group’s and the Company’s financial statements.

Amendments to MFRS 127: Equity Method in Separate Financial Statements

The amendments will allow entities to use the equity method to account for investments in subsidiaries, joint ventures and associate in their separate financial statements. Entities already applying MFRS and electing to change to the equity method in its separate financial statements will have to apply this change retrospectively. For first-time adopters of MFRS electing to use the equity method in its separate financial statements, they will be required to apply this method from the date of transition to MFRS. The amendments are effective for annual periods beginning on or after 1 January 2016, with early adoption permitted. These amendments will not have any impact on the Group’s and the Company’s financial statements.

MFRS 15: Revenue from Contracts with Customers

MFRS 15 establishes a new five-step models that will apply to revenue arising from contracts with customers. MFRS 15 will supersede the current revenue recognition guidance including MFR 118 Revenue, MFRS 111 Construction Contracts and the related interpretations when it becomes effective.

The core principle of MFRS 15 is that an entity should recognise revenue which depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Under MFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e when “control” of the goods or services underlying the particular performance obligation is transferred to the customer.

Either a full or modified retrospective application is required for annual periods beginning on or after 1 January 2018 with early adoption permitted. The Group is currently assessing the impact of MFRS 15 and plans to adopt the new standard on the required effective date.




MFRS 9: Financial Instruments

In November 2014, MASB issued the final version of MFRS 9 Financial Instruments which reflects all phases of the financial instruments project and replaces MFRS 139 Financial Instruments: Recognition and Measurement and all previous versions of MFRS 9. The standard introduces new requirements for classification and measurement, impairment and hedge accounting. MFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Retrospective application is required, but comparative information is not compulsory. The adoption of MFRS 9 will have an effect on the classification and measurement of the Group’s financial assets and financial liabilities.

2.4 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied for like transactions and events in similar circumstances.

The Company controls an investee if and only if the Company has all the following:

(i) Power over the investee (i.e existing rights that give it the current ability to direct the relevant activities of the investee);

(ii) Exposure, or rights, to variable returns from its investment with the investee; and

(iii) The ability to use its power over the investee to affect its returns.

When the Company has less than a majority of the voting rights of an investee, the Company considers the following in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power over the investee:

(i) The size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

(ii) Potential voting rights held by the Company, other vote holders or other parties;

(iii) Rights arising from other contractual arrangements; and

(iv) Any additional facts and circumstances that indicate that the Company has, or does not have, the current ability

to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses within a subsidiary are attributed to the non-controlling interests even if that results in a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of the Company.


cont’d



2.4 Basis of consolidation cont’d

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets and liabilities of the subsidiary and any non-controlling interests, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has been recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss or where applicable, transferred directly to retained earnings. The fair value of any investment retained in the former subsidiary at the date control is lost is regarded as the cost on initial recognition of the investment.

Business combinations

Acquisitions of subsidiaries are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. The Group elects on a transaction-by-transaction basis whether to measure the non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Transaction costs incurred are expensed and included in administrative expenses.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes in the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in accordance with MFRS 139 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it will not be remeasured. Subsequent settlement is accounted for within equity. In instances where the contingent consideration does not fall within the scope of MFRS 139, it is measured in accordance with the appropriate MFRS.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

Business combinations involving entities under common control

Business combinations involving entities under common control are accounted for by applying the pooling of interest method. The assets and liabilities of the combining entities are reflected at their carrying amounts reported in the consolidated financial statements of the controlling holding company. Any difference between the consideration paid and the share capital of the “acquired” entity is reflected within equity as merger reserve. The statement of profit or loss and other comprehensive income reflects the results of the combining entities for the full year, irrespective of when the combination takes place. Comparatives are presented as if the entities had always been combined since the date the entities had come under common control.




2.5 Subsidiaries

A subsidiary is an entity over which the Group has all the following:

(i) Power over the investee (i.e existing rights that give it the current ability to direct the relevant activities of the investee);

(ii) Exposure, or rights, to variable returns from its investment with the investee; and

(iii) The ability to use its power over the investee to affect its returns.

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

2.6 Investments in associates and joint ventures

An associate is an entity in which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

On acquisition of an investment in associate or joint venture, any excess of the cost of investment over the Group’s share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill and included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities of the investee over the cost of investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate’s or joint venture’s profit or loss for the period in which the investment is acquired.

An associate or a joint venture is equity accounted for from the date on which the investee becomes an associate or a joint venture.

Under the equity method, on initial recognition the investment in an associate or a joint venture is recognised at cost, and the carrying amount is increased or decreased to recognise the Group’s share of the profit or loss and other comprehensive income of the associate or joint venture after the date of acquisition. When the Group’s share of losses in an associate or a joint venture equal or exceeds its interest in the associate or joint venture, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.

Profits and losses resulting from upstream and downstream transactions between the Group and its associate or joint venture are recognised in the Group’s financial statements only to the extent of unrelated investors’ interests in the associate or joint venture. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.

The financial statements of the associates and joint ventures are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

After application of the equity method, the Group applies MFRS 139 Financial Instruments: Recognition and Measurement to determine whether it is necessary to recognise any additional impairment loss with respect to its net investment in the associate or joint venture. When necessary, the entire carrying amount of the investment is tested for impairment in accordance with MFRS 136 Impairment of Assets as a single asset, by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss is recognised in profit or loss. Reversal of an impairment loss is recognised to the extent that the recoverable amount of the investment subsequently increases.


cont’d


2. SIGNIFICANT ACCOUNTING POLICIES cont’d 2.6 Investments in associates and joint ventures cont’d

In the Company’s separate financial statements, investments in associates and joint ventures are accounted for at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

2.7 Foreign currency

(a) Functional and presentation currency

The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the Company’s functional currency.

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

(b) Foreign currency transactions

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

(c) Foreign operations

The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the reporting date and income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in the profit or loss.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the reporting date.




2.8 Property, plant and equipment and depreciation

All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the profit or loss during the financial period in which they are incurred.

Subsequent to recognition, property, plant and equipment except for freehold land are stated at cost less accumulated depreciation and any accumulated impairment losses.

Freehold land has an unlimited useful life and therefore is not depreciated. Leasehold land is depreciated over the remaining lease term. Incomplete capital expenditure are also not depreciated as these assets are not available for use. Depreciation of other property, plant and equipment is provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful life, at the following annual rates:

Buildings 2% Plant, and machinery and containers 5% - 20% Vessels and drydocking 5% - 50% Motor vehicles 12.5% - 20% Furniture, fittings and equipment and others 5% - 20%

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognised in profit or loss and the unutilised portion of the revaluation surplus on that item is taken directly to retained earnings.

2.9 Investment properties

Investment properties comprises principally land and buildings held for long term rental yields or for capital appreciation or both, and are not occupied by the Group. Investment properties are stated at cost less accumulated depreciation and accumulated impairment. Freehold land is not depreciated as it has infinite life.

Depreciation of investment properties is provided for on a straight-line basis to write off the cost of the investment properties to its residual value over the estimated useful life, at the following annual rate:

Buildings 2%

On disposal of an investment property, or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal, it shall be derecognised. The difference between the net disposal proceeds and the carrying amount is recognised in profit or loss in the period of the retirement or disposal.

Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the carrying value at the date of change in use. For a transfer from owner-occupied property to investment property, the property is accounted for in accordance with the accounting policy for property, plant and equipment set out in Note 2.8 up to the date of change in use.


cont’d



2.10 Engineering contracts

Where the outcome of an engineering contracts can be estimated reliably, contract revenue and contract costs are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs.

Where the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

Contract revenue comprises the initial amount of revenue agreed in the contract and variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and they are capable of being reliably measured.

When costs incurred on construction contracts plus recognised profits (less recognised losses) exceeds progress billings, the balance is classified as amount due from customers on contracts. When progress billings exceed costs incurred plus recognised profits (less recognised losses), the balance is classified as amount due to customers on contracts.

2.11 Borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs consist of interest and other costs that the Group and the Company incurred in connection with the borrowing of funds.

2.12 Leases

A lease is an agreement whereby the lessor conveys to the lessee in return for a payment, or series of payments, the right to use an asset for an agreed period of time.

(a) As lessee

Finance leases

Leases of property, plant and equipment where the Group assumes substantially all the risks and rewards of ownership are classified as finance leases.

Finance leases are capitalised at the lower of the fair value of the leased assets and the estimated present value of the underlying lease payments at the date of inception. Each lease payment is allocated between the liability and finance charges so as to achieve a periodic constant rate of interest on the lease principal outstanding. The corresponding rental obligations, net of finance charges, are included in borrowings. The interest element of the finance charge is charged to profit and loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Property, plant and equipment acquired under finance lease contracts is depreciated over the useful life of the assets. If there is no reasonable certainty that the ownership will be transferred to the Group, the asset is depreciated over the shorter of the lease term and its useful life.




2.12 Leases cont’d

(a) As lessee cont’d

Operating leases

Leases of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss over the lease period.

(b) As lessor

Finance leases

Leases of assets where the lessee assumes substantially all the risks and rewards of ownership are classified as finance leases.

When assets are leased out under a finance lease, the present value of the lease payments is recognised as a receivable. The difference between the gross receivable and the present value of the receivable is recognised as unearned finance income. Lease income is recognised over the term of the lease using the net investment method so as to reflect a constant periodic rate of interest on the balance outstanding.

Operating leases

Assets leased out under operating leases are included in property, plant and equipment in the statement of financial position. They are depreciated over their useful lives on bases consistent with similar owned property, plant and equipment. Rental income (net of any incentives given to lessees) is recognised on a straight-line basis over the lease term.

2.13 Prepaid land lease payments

Prepaid land lease payments are initially measured at cost. Following initial recognition, prepaid land lease payments are measured at cost less accumulated amortisation and accumulated impairment losses. The prepaid land lease payments are amortised over their lease terms ranging from 30 to 50 years.

2.14 Income taxes

(a) Current tax

The income tax expense for the period comprises current and deferred tax. Tax is recognised in profit and loss, except to the extend that it relates to items recognised in other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively.

Current tax expense is determined according to the tax laws of each jurisdiction in which the Group operates and includes all taxes based upon the taxable profits, including withholding taxes payable by a foreign subsidiary, associate or jointly controlled entity on distributions of retained earnings to companies in the Group.

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.


cont’d



2.14 Income taxes cont’d

(b) Deferred tax cont’d

Deferred tax liabilities are recognised for all temporary differences, except:

- where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:

- where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

2.15 Employee benefits

Define contribution plans

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognised as an expense in the profit or loss as incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund (“EPF”).




2.16 Cash and cash equivalents

For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at bank and short-term deposits with a maturity of three months or less, net of outstanding bank overdrafts.

2.17 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

(a) Revenue from services

Transportation and forwarding services, management services, labour supply, rental services are recognised on an accrual basis when services have been rendered.

(b) Engineering contracts

Revenue from engineering contracts is accounted for using the stage of completion method as described in Note 2.10 to the financial statements.

(c) Sales of goods

Revenue is recognised net of discounts and upon transfer of significant risks and rewards of ownership to the buyer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(d) Interest income

Interest income is recognised using the effective interest method.

(e) Management fees

Management fees are recognised when services are rendered.

(f) Dividend income

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

(g) Rental income

Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis.

(h) Development properties

(i) Sale of completed development

A development property is regarded as sold when the significant risks and rewards have been transferred to the buyer, which is normally on unconditional exchange of contracts. For conditional exchanges, sales are recognised only when all the significant conditions are satisfied.


cont’d



2.17 Revenue recognition cont’d

(h) Development properties cont’d

(ii) Sale of development property under construction

Where development property is under construction and agreement has been reached to sell such property when construction is complete, the directors consider whether the contract comprises:

- Where a contract is judged to be for the construction of a property, revenue is recognised using the percentage of completion method as construction progresses.

- Where the contract is judged to be for the sale of a completed property, revenue is recognised when the significant risks and rewards of ownership of the real estate have been transferred to the buyer (i.e. revenue is recognised using the completed contract method).

If, however, the legal terms of the contract are such that the construction represents the continuous transfer of work in progress to the purchaser, the percentage of completion method of revenue recognition is applied and revenue is recognised as work progresses.

In the above situation, the percentage of work completed is measured based on the costs incurred up until the end of the reporting periods as a proportion of total costs expected to be incurred.

2.18 Financial assets

Financial assets are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets.

(a) Financial assets at fair value through profit or loss

Financial assets are classified as financial assets at fair value through profit or loss if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised separately in profit or loss as part of other losses or other income.

Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assets that is held primarily for trading purposes are presented as current whereas financial assets that is not held primarily for trading purposes are presented as current or non-current based on the settlement date.

The Group does not have financial assets designated at fair value through profit or loss during the financial year.




2.18 Financial assets cont’d

(b) Loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current.

(c) Held-to-maturity investments

Financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold the investment to maturity.

Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the held-to-maturity investments are derecognised or impaired, and through the amortisation process.

Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12 months after the reporting date which are classified as current.

(d) Available-for-sale financial assets

Available-for-sale financial assets are financial assets that are designated as available for sale or are not classified in any of the three preceding categories.

After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss.

The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in profit or loss when the Group and the Company’s right to receive payment is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.


cont’d



2.18 Financial assets cont’d

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date that the Group and the Company commit to purchase or sell the asset.

2.19 Impairment of financial assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.

(a) Trade and other receivables and other financial assets carried at amortised cost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

(b) Unquoted equity securities carried at cost

If there is objective evidence (such as significant adverse changes in the business environment where the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial assets carried at cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.

(c) Available-for-sale financial assets

Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market are considerations to determine whether there is objective evidence that investment securities classified as available-for-sale financial assets are impaired.




2.19 Impairment of financial assets cont’d

(c) Available-for-sale financial assets cont’d

If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss.

Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income. For available-for-sale debt investments, impairment losses are subsequently reversed in profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss in profit or loss.

2.20 Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

(a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities held for trading include derivatives entered into by the Group and the Company that do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net gains or losses on derivatives include exchange differences.

The Group and the Company have not designated any financial liabilities as at fair value through profit or loss.

(b) Other financial liabilities

The Group’s and the Company’s other financial liabilities include trade payables, other payables and loans and borrowings.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.


cont’d



2.21 Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units (“CGU”)).

In assessing value in use, the estimated future cash flows expected to be generated by the asset 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. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

Impairment losses are recognised in profit or loss except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment loss on goodwill is not reversed in a subsequent period.

2.22 Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 41, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.23 Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group.

Contingent liabilities and assets are not recognised in the statement of financial position of the Group.

2.24 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.




2.24 Provisions cont’d

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

2.25 Share capital and share issuance expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

2.26 Inventories

(a) Property inventory

Property acquired or being constructed for sale in the ordinary course of business, rather than to be held for rental or capital appreciation, is held as inventory and is measured at the lower or cost and net realisable value.

Costs includes:

- Freehold and leasehold rights for land - Amount paid to contractors for construction- Borrowing costs, planning and design costs, costs of site preparation, professional fees for legal services,

property transfer taxes, construction overheads and other related costs

Non refundable commissions paid to sales or marketing agents on the sale of real estate units are expensed when paid.

Net realisable value is the estimated selling price in the ordinary course of the business, based on market prices at the reporting date and discounted for the time value of money if material, less costs to completion and the estimated costs of sale.

The cost of inventory recognised in profit or loss on disposal is determined with reference to the specific costs incurred on the property sold and an allocation of any non-specific costs based on the relative size of the property sold.

Land held for development are property inventory which consists of land where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle, and are hence classified within non-current assets. Land held for development is reclassified to current property inventory at the point when development activities have commenced and where it can be demonstrated than the development activities can be complete within normal operating cycle.

(b) Maintenance consumables

Maintenance consumables are stated at lower of cost and net realisable value. Cost is determined on a first-in first-out basis.


cont’d



2.27 Intangible assets

(a) Goodwill

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group’s cash-generating units that are expected to benefit from the synergies of the combination.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.

(b) Other intangible assets

Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following initial acquisition, intangible assets are measured at cost less any accumulated amortisation and accumulated impairment losses.

Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method are reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in profit or loss.

Intangible assets with indefinite useful lives or not yet available for use are tested for impairment annually, or more frequently if the events and circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. Such intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reviewed annually to determine whether the useful life assessment continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following initial acquisition, intangible assets are measured at cost less any accumulated amortisation and accumulated impairment losses.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.




2.27 Intangible assets cont’d

(b) Other intangible assets cont’d

Club membership Club membership was acquired separately and is carried at cost less accumulated impairment losses.

2.28 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.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation.

As at reporting date, no values are placed on corporate guarantees provided by the Company to secure bank loans and other banking facilities granted to its subsidiaries where such loans and banking facilities are fully collateralised by fixed and floating charges over the property, plant and equipment and other assets of the subsidiaries and where the directors regard the value of the credit enhancement provided by the corporate guarantees is minimal.

2.29 Fair value measurements

The Group and the Company measure financial instruments, such as, derivatives, and non-financial assets such as investment properties, at fair value at each reporting date. Also, fair values of the financial instruments measured at amortised cost are disclosed in Note 38.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the ability takes place either:

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible to by the Group and the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset 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.

The Group and the Company use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.


cont’d



2.29 Fair value measurements cont’d

All assets and liabilities for which fair values in measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurements as a whole:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is

directly or indirectly observable Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is

unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group and the Company determine whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Group and the Company have determined classes of assets and liabilities on the basis of nature, characteristics and risks of the assets or liability and the level of the fair value hierarchy as explained above.

3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.

3.1 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Impairment of loans and receivables

The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s loans and receivable at the reporting date is disclosed in Note 24.



4. REVENUE

Revenue of the Group and of the Company consists of the following:

Group Company

2015 2014 2015 2014

RM RM RM RM

Shipping, forwarding and transportation 360,498,241 301,944,793 - -

Engineering works 70,732,381 73,767,842 - -

Supply and hire of equipment 62,481,813 75,919,837 - -

Dividend income from

- associates - - 110,463 77,535

- subsidiaries - - 22,777,073 9,717,176

Management fees - - 1,116,000 1,116,000

Maintenance services 437,774 54,688 - -

Rental income 8,333,576 5,844,910 654,000 651,500

Sale of properties 4,477,746 - - -

Others 1,528 30,792 - -

506,963,059 457,562,862 24,657,536 11,562,211

5. OTHER INCOME

Group Company

2015 2014 2015 2014

RM RM RM RM

Gain on disposal of property, plant and equipment 1,553,075 2,620,091 2,698 5,999

Insurance claims 13,049 36,198 - -

Interest income 733,966 558,122 7,472 2,758

Interest received from subsidiaries - - 789,072 765,432

Management fee received 908,642 1,023,715 - -

Rental income 1,325,488 381,106 41,304 16,000

Realised foreign exchange gain 1,085,723 366,598 - -

Unrealised foreign exchange gain 260,141 84,857 - -

Sundry income 1,204,426 2,163,885 5,279 25,183

7,084,510 7,234,572 845,825 815,372


cont’d


6. FINANCE COSTS

Group Company

2015 2014 2015 2014

RM RM RM RM

Interest expense on:

Interest bearing bank borrowings 3,668,931 4,484,877 97,218 216,865

Bankers’ acceptance interest 324,980 362,874 - -

Interest paid to subsidiaries - - 1,425,568 1,448,979

Obligation under finance lease 2,248,150 2,470,084 34,253 17,480

Other interest - 10,509 - -

6,242,061 7,328,344 1,557,039 1,683,324

Less: Interest capitalised into:

- Development properties (Note 23) (504,244) (928,447) - -

5,737,817 6,399,897 1,557,039 1,683,324

7. PROFIT BEFORE TAX The following items have been included in arriving at profit before tax:

Group Company

2015 2014 2015 2014

RM RM RM RM

Employee benefits expense (Note 8) 45,406,954 41,134,579 2,566,890 2,557,746

Non-executive directors’ remuneration (Note 9) 217,834 169,480 217,834 153,880

Accrual of claims 3,778,036 - - -

Amortisation of prepaid land lease payments (Note 15) 93,073 50,074 - -

Auditors’ remuneration

- current year 374,740 328,266 37,000 32,000

- underprovision in prior year 433 785 - -

Bad debts written off 23,418 261,408 - -

Depreciation of property, plant and equipment (Note 13) 20,001,013 17,772,099 512,355 360,975

Depreciation of investment properties (Note 14) 200,485 228,571 - -

Hiring of equipment 5,396,710 9,588,898 - -

Allowance for impairment for trade receivables, net of reversal (Note 24) 10,804,842 2,721,416 - -

Investment properties written off - 27,880 - -

Loss on disposal of property, plant and equipment - 581 - -

Prepayments written off - 443,196 - -

Property, plant and equipment written off 119,508 66,542 458 1,947

Realised foreign exchange loss 1,037,456 447,312 - 10

Rental of premises 3,046,219 2,354,013 69,953 65,238

Unrealised foreign exchange loss 1,680,485 201,993 - -



8. EMPLOYEE BENEFITS EXPENSE

Group Company

2015 2014 2015 2014

RM RM RM RM

Salaries and wages 33,426,433 31,364,165 2,007,898 2,203,600

Allowances 3,085,503 2,148,789 9,746 6,848

Bonus 3,207,392 2,648,913 259,593 153,472

Contributions to defined contribution plan and social security contributions 4,698,033 4,075,674 289,653 193,679

Other benefits 989,593 897,038 - 147

45,406,954 41,134,579 2,566,890 2,557,746

Included in employee benefits expense of the Group and of the Company are Executive Directors’ remuneration amounting to RM5,136,874 (2014: RM4,814,124) and RM810,084 (2014: RM758,342) respectively.

9. DIRECTORS’ REMUNERATION

The details of remuneration receivable by directors of the Company during the year are as follows:

Group Company

2015 2014 2015 2014

RM RM RM RM

Executive:

Salaries and other emoluments 2,609,304 2,263,009 640,503 604,740

Bonus 326,599 265,172 87,278 71,238

Contributions to defined contribution plan and social security contributions 321,061 305,345 82,303 82,364

Total executive director’s remuneration (excluding benefits-in-kind) 3,256,964 2,833,526 810,084 758,342

Estimated money value of benefits in-kind 25,626 31,925 - -

Total executive directors’ remuneration (including benefits-in-kinds) 3,282,590 2,865,451 810,084 758,342

Non-executive directors’ remuneration:

Allowance 75,000 20,500 75,000 20,500

Fees 142,834 133,380 142,834 133,380

Total non-executive directors’ remuneration 217,834 153,880 217,834 153,880

Total directors’ remuneration (Note 37 (b)) 3,500,424 3,019,331 1,027,918 912,222


cont’d


9. DIRECTORS’ REMUNERATION cont’d

The number of directors of the Company whose total remuneration during the financial year fell within the following bands is analysed below:

Number of Directors

2015 2014

Executive directors:

RM850,001-RM900,000 1 -

RM750,001-RM800,000 1 1

RM650,001-RM700,000 - 1

RM500,001-RM650,000 - 1

RM450,001-RM500,000 1 -

RM350,001-RM400,000 2 3

RM300,001-RM350,000 1 -

Non-executive directors:

Below RM50,000 2 3

RM50,001-RM100,000 2 1

10. INCOME TAX EXPENSE

The major components of income tax expense for the years ended 30 June 2015 and 2014 are:

Group Company

2015 2014 2015 2014

RM RM RM RM

Current income tax:

Malaysian income tax 26,003,738 13,667,488 - 1,133,247

Under/(over) provision in prior year 955,975 126,527 - (2,805)

26,959,713 13,794,015 - 1,130,442

Deferred income tax (Note 21):

Relating to origination and reversal of temporary differences (4,632,116) 366,656 (2,820) 18,973

Effect of reduction of tax rates - (401,410) - -

(Over)/under provision in prior year (309,887) 914,869 (3,666) -

(4,942,003) 880,115 (6,486) 18,973

Total income tax recognised in profit or loss 22,017,710 14,674,130 (6,486) 1,149,415



10. INCOME TAX EXPENSE cont’d

Domestics income tax is calculated at the Malaysian statutory tax rate of 25% (2014: 25%) of the estimated assessable profit for the year. The statutory tax rate will be reduced to 24% from the current year’s tax rate of 25%, effective year of assessment 2016. The computation of deferred tax as at 30 June 2015 has reflected the charge in tax rate.

Tax for other jurisdictions is calculated at the rates prevailing in the respective jurisdiction. The corporate tax rate applicable to the Singapore subsidiary of the Group is 17% (2014: 17%).

A reconciliation of income tax expense applicable to profit before tax at the statutory income tax rate to income tax expense at the effective tax rate of the Group and Company are as follows:

2015 2014

RM RM

Group

Profit before tax 76,659,671 51,023,288

Tax at Malaysian statutory tax rate of 25% (2014: 25%) 19,164,918 12,755,822

Different tax rate in other countries 24,168 (101,555)

Effect of reduction of tax rates - (401,410)

Expenses not deductible for tax purposes 4,068,422 2,476,855

Income not subject to tax (1,000,371) (1,742,225)

Deferred tax assets not recognised during the year 198,194 672,082

Utilisation of previously unrecognised unutilised tax losses and unabsorbed capital allowance (1,083,709) (26,835)

Under provision of tax expense in prior years 955,975 126,527

(Over)/under provision of deferred tax in prior years (309,887) 914,869

Income tax expense for the year 22,017,710 14,674,130

Company

Profit before tax 19,604,232 6,880,879

Tax at Malaysian statutory tax rate of 25% (2014: 25%) 4,901,058 1,720,220

Expenses not deductible for tax purposes 818,006 362,178

Income not subject to tax (5,721,884) (930,178)

Over provision of tax expense in prior years - (2,805)

Over provision of deferred tax in prior years (3,666) -

Income tax expense for the year (6,486) 1,149,415


cont’d


11. EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing profit for the year, net of tax, attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the financial year.

The following tables reflect the profit and share data used in the computation of basic earnings per share for the years ended 30 June:

Group

2015 2014

RM RM

Profit net of tax attributable to owners of the Company used in the computation of basic earnings per share 51,789,526 33,415,247

Weighted average number of ordinary shares in issue 182,000,002 182,000,002

Basic earnings per share (sen) 28.46 18.36

There is no dilution in the earning per share for the current and the previous year end as there are no dilutive potential ordinary shares outstanding at the end of the reporting period.

12. DIVIDENDS

Group and Company

2015 2014

RM RM

Recognised during the year:

Dividends on ordinary shares

First and final single-tier dividend in respect of 2014: 2.5 sen per share 4,550,000 -

First and final single-tier dividend in respect of 2013: 2.5 sen per share - 4,550,000

Proposed but not recognised as a liability as at 30 June:

Dividends on ordinary shares, subject to shareholders’ approved at the AGM:

First and final tax exempt single-tier dividend in respect of 2015: 5.5 sen (2014: 2.5 sen) per share 10,010,000 4,550,000



12. DIVIDENDS cont’d At the forthcoming Annual General Meeting, the first and final tax exempt (single-tier) dividend in respect of the financial

year ended 30 June 2015, of 5.5% on 182,000,002 ordinary shares amounting to a dividend payable of RM10,010,000 (5.5 sen per ordinary share) will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 30 June 2016.

13. PROPERTY, PLANT AND EQUIPMENT

* Land andBuildings

Plant andMachinery

andContainers Vessels

MotorVehicles

Furniture,Fittings,

Equipment,and Others

ConstructionWork-in-Progress Total

Group RM RM RM RM RM RM RM

At 30 June 2015

Cost

At 1 July 2014 36,875,809 181,051,088 82,608,970 15,113,754 13,211,297 568,550 329,429,468

Additions 2,466,386 10,542,187 9,340,796 2,185,772 1,182,104 23,017 25,740,262

Reclassification 106,268 83 (83) - 135,618 (241,886) -

Exchange difference - 12,317 - 7,002 11,142 - 30,461

Disposals/written off - (1,242,863) (3,682,680) (484,490) (417,198) - (5,827,231)

At 30 June 2015 39,448,463 190,362,812 88,267,003 16,822,038 14,122,963 349,681 349,372,960

Accumulated depreciation

At 1 July 2014 4,365,555 81,222,500 25,243,406 10,321,898 11,201,727 - 132,355,086

Depreciation charge for the year 591,218 12,570,257 5,585,198 1,689,377 1,093,481 - 21,529,531

Recognised in profit or loss (Note 7) 514,911 11,419,816 5,585,198 1,443,929 1,037,159 - 20,001,013

Capitalised in construction contracts (Note 27) 76,307 1,150,441 - 245,448 56,322 - 1,528,518

Disposals/written off - (1,030,916) (498,388) (463,759) (277,338) - (2,270,401)

Reclassification - (224,622) 224,622 - - - -


At 30 June 2015 4,956,773 92,549,505 30,554,838 11,554,516 12,028,531 - 151,644,163

Net carrying amount 34,491,690 97,813,307 57,712,165 5,267,522 2,094,432 349,681 197,728,797


cont’d


13. PROPERTY, PLANT AND EQUIPMENT cont’d

* Land andBuildings

Plant andMachinery

andContainers Vessels

MotorVehicles

Furniture,Fittings,

Equipment,and Others

ConstructionWork-in-Progress Total

Group RM RM RM RM RM RM RM

At 30 June 2014

Cost

At 1 July 2013 35,074,578 171,117,982 73,399,822 12,490,896 12,727,850 66,381 304,877,509

Additions 2,103,907 13,601,976 9,209,148 3,182,188 787,462 152,489 29,037,170

Reclassification (302,676) 19,828 - - 282,848 - -

Acquisition of a subsidiary - - - - 520 349,680 350,200


Disposals/written off - (3,693,607) - (562,127) (591,835) - (4,847,569)

At 30 June 2014 36,875,809 181,051,088 82,608,970 15,113,754 13,211,297 568,550 329,429,468


At 1 July 2013 3,941,610 72,212,562 20,636,571 9,497,799 10,600,745 - 116,889,287

Acquisition of a subsidiary - - - - 39 - 39

Depreciation charge for the year 423,945 11,762,547 4,606,835 1,378,873 1,118,143 - 19,290,343

Recognised in profit or loss (Note 7) 347,638 10,649,319 4,606,835 1,106,066 1,062,241 - 17,772,099

Capitalised in construction contracts (Note 27) 76,307 1,113,228 - 272,807 55,902 - 1,518,244

Disposals/written off - (2,773,526) - (557,292) (505,299) - (3,836,117)

Reclassification - 16,007 - - (16,007) - -


At 30 June 2014 4,365,555 81,222,500 25,243,406 10,321,898 11,201,727 - 132,355,086

Net carrying amount 32,510,254 99,828,588 57,365,564 4,791,856 2,009,570 568,550 197,074,382




*Land and buildings of the Group

FreeholdLand

LeaseholdLand Buildings

Building-in-Progress Total

RM RM RM RM RM

At 30 June 2015

Cost

At 1 July 2014 9,763,270 4,656,595 20,930,449 1,525,495 36,875,809

Additions - - - 2,466,386 2,466,386

Reclassification - - 241,886 (135,618) 106,268

At 30 June 2015 9,763,270 4,656,595 21,172,335 3,856,263 39,448,463


At 1 July 2014 - 944,293 3,421,262 - 4,365,555

Depreciation charge for the year - 90,693 500,525 - 591,218

At 30 June 2015 - 1,034,986 3,921,787 - 4,956,773

Net carrying amount 9,763,270 3,621,609 17,250,548 3,856,263 34,491,690

At 30 June 2014

Cost

At 1 July 2013 9,763,270 4,656,595 20,654,713 - 35,074,578

Additions - - 578,412 1,525,495 2,103,907

Reclassification - - (302,676) - (302,676)

At 30 June 2014 9,763,270 4,656,595 20,930,449 1,525,495 36,875,809


At 1 July 2013 - 853,599 3,088,011 - 3,941,610

Depreciation charge for the year - 90,694 333,251 - 423,945

At 30 June 2014 - 944,293 3,421,262 - 4,365,555

Net carrying amount 9,763,270 3,712,302 17,509,187 1,525,495 32,510,254


cont’d



Land andBuilding

MotorVehicles

Furniture,Fittings and

Equipmentand Others Total

Company RM RM RM RM

At 30 June 2015

Cost

At 1 July 2014 6,482,834 1,618,859 1,316,385 9,418,078

Additions - 39,240 220,300 259,540

Disposals/written off - (38,006) (8,819) (46,825)

At 30 June 2015 6,482,834 1,620,093 1,527,866 9,630,793


At 1 July 2014 740,944 698,597 871,196 2,310,737

Depreciation charge for the year (Note 7) 129,657 200,397 182,301 512,355


At 30 June 2015 870,601 860,989 1,045,137 2,776,727

Net carrying amount 5,612,233 759,104 482,729 6,854,066

At 30 June 2014

Cost

At 1 July 2013 6,785,510 677,769 948,356 8,411,635

Additions - 979,096 79,851 1,058,947

Reclassification (302,676) - 302,676 -


At 30 June 2014 6,482,834 1,618,859 1,316,385 9,418,078


At 1 July 2013 611,287 677,765 711,267 2,000,319

Depreciation charge for the year (Note 7) 129,657 58,838 172,480 360,975


At 30 June 2014 740,944 698,597 871,196 2,310,737

Net carrying amount 5,741,890 920,262 445,189 7,107,341




(a) During the financial year, the Group and the Company acquired property, plant and equipment at aggregate costs of RM25,740,262 (2014: RM29,037,170) and RM259,540 (2014: RM1,058,947) respectively of which RM7,292,147 (2014: RM9,091,196) and RM36,000 (2014: RM801,495) respectively were acquired by means of hire purchase and finance lease arrangements.

(b) Net carrying amount of property, plant and equipment under hire purchase and finance lease arrangements are as follows:

Group Company

2015 2014 2015 2014

RM RM RM RM

Motor vehicles 3,959,812 3,336,080 759,104 920,257

Plant and machinery and equipment 40,693,157 59,877,186 - -

44,652,969 63,213,266 759,104 920,257

Details of the terms and conditions of the hire purchase and finance lease arrangements are disclosed in Note 36(c).

(c) The net carrying amount of property, plant and equipment pledged for loans and borrowings as referred in Note 29.

Group Company

2015 2014 2015 2014

RM RM RM RM

Buildings 12,206,935 12,586,694 5,612,233 5,741,890

Freehold land 9,713,270 10,054,310 - -

Leasehold land 1,098,365 3,317,255 - -

Plant and machinery 4,804,935 9,296,750 - -

Vessels 40,489,610 43,735,294 - -

68,313,115 78,990,303 5,612,233 5,741,890


cont’d


14. INVESTMENT PROPERTIES

Group

2015 2014

RM RM

Cost

At 1 July 11,228,312 11,256,192

Written off - (27,880)

At 30 June 11,228,312 11,228,312

Accumulated depreciation and impairment

At 1 July 1,671,555 903,411

Depreciation for the year (Note 7) 200,485 228,571

Impairment loss - 539,573

At 30 June 1,872,040 1,671,555

Net carrying amount 9,356,272 9,556,757

Fair value of the investment properties 11,786,000 11,786,000

Investment properties with aggregate carrying value of RM9,356,272 (2014: RM9,556,757) are under pledge for securities for borrowings as disclosed in Note 29. Investment properties comprises a number of commercial properties leased to third parties.



15. PREPAID LAND LEASE PAYMENTS

Group

2015 2014

RM RM

Cost

At 1 July 2,506,895 2,506,895

Additions 4,300,000 -

At 30 June 6,806,895 2,506,895

Accumulated amortisation

At 1 July 565,424 515,350

Amortisation for the year (Note 7) 93,073 50,074

At 30 June 658,497 565,424

Net carrying amount 6,148,398 1,941,471

Prepaid land lease payments with aggregate carrying value of RM4,257,000 (2014: Nil) are under pledge for securities for borrowings as disclosed in Note 29.

16. INTANGIBLE ASSETS

Group

Transferable Club Membership

2015 2014

RM RM

Cost

At 1 July and 30 June 140,000 140,000

Accumulated impairment losses

At 1 July and 30 June 35,000 35,000

Net carrying amount: 105,000 105,000


cont’d


17. INVESTMENTS IN SUBSIDIARIES

Company

2015 2014

RM RM

Unquoted shares at cost 179,332,623 178,324,623

Accumulated impairment losses (100,000) (100,000)

179,232,623 178,224,623 (a) Details of the subsidiaries are as follows:

Name of SubsidiariesCountry of

Incorporation Principal Activities

% of ownershipinterest held by

Groupß

% of ownership interest held by non-controlling

interestß

2015 2014 2015 2014

% % % %

Harbour-Link (M) Sdn. Bhd. (“HLM”)*

Malaysia Management services and investment holding

100 100 - -

Harbour Agencies (Sarawak) Sdn. Bhd. (“HAS”)*

Malaysia Shipping and forwarding 100 100 - -

Eastern Soldar Engineering & Construction Sdn. Bhd. (“ESEC”)*

Malaysia Investment holding, multi-discipline engineering and procurement

100 100 - -

Harbour-Link Navigation Sdn. Bhd. (“HLN”)*

Malaysia Investment holding 100 100 - -

Harbour Link Lines Sdn. Bhd. (“HLLines”)*

Malaysia Port and shipping agency services, freight forwarder and maritime services

85 80 15 20

HLG Resources Sdn. Bhd.* (“HLG Resources”)

Malaysia Investment holding, agriculture and property development

100 100 - -

HLG Petroleum Sdn. Bhd.* Malaysia Investment holding and trading in petroleum and petrochemical products

100 100 - -

Harbour Hornbill Sdn. Bhd.* Malaysia Ship owning and ship management

80 80 20 20

Harbour Ivory Sdn. Bhd.* Malaysia Ship owning and ship operator services

80 80 20 20

Arcadia Properties Sdn. Bhd.* (“APSB”)

Malaysia Investment holding 51 51 49 49



17. INVESTMENTS IN SUBSIDIARIES cont’d (a) Details of the subsidiaries are as follows: cont’d




Groupß


interestß

2015 2014 2015 2014

% % % %

Subsidiaries of HLM

A.T Dunia (Btu) Sdn. Bhd.* Malaysia Forwarding and transportation

100 100 - -

HLG Engineering Sdn. Bhd.* Malaysia Consultancy services and provision of engineering works

70 70 30 30

Harbour Services Corporation Sdn. Bhd.*

Malaysia Hiring, stevedoring, transportation and sales of pallets

100 100 - -

Harbour Agencies (Sibu) Sdn. Bhd.*

Malaysia Ship owning and ship management

- 100 - -

Harbour-Link Logistics Sdn. Bhd.(“HLLogistics”)*

Malaysia Hiring and transportation

100 100 - -

Progresif Lengkap Sdn. Bhd. (“PL”)*

Malaysia Road safety, training and consultancy and transportation

100 100 - -

Harbour Services (Kuching)Sdn. Bhd.*


- 100 - -

Harbour Services Sdn. Bhd.* (Note (i))

Malaysia Forwarding and transportation

47 47 53 53

Harbour-Link (Labuan) Limited*

Malaysia Dormant 100 100 - -

Harbour Agencies Sdn. Bhd.*

Malaysia Shipping 100 100 - -

Harbour Services (Miri) Sdn. Bhd.*


Harbour-Link Leasing Sdn. Bhd.*

Malaysia Leasing 100 100 - -

Best Success Bonded Store Supply Sdn. Bhd. *

Malaysia Provision of storage facilities

60 60 40 40


cont’d






Groupß


interestß

2015 2014 2015 2014

% % % %

Subsidiary of PL

Road Safety & Driving Academy Sdn. Bhd.*


Subsidiary of HAS

Harbour Agencies (Sabah) Sdn. Bhd.*

Malaysia Shipping and forwarding 100 100 - -

Navasco Shipping Sdn. Bhd.*


100 100 - -

Subsidiaries of ESEC

ESE Energy Sdn. Bhd.* Malaysia Civil engineering and ancillary works

100 100 - -

Eastern Soldar (Singapore) Pte. Ltd.**

Singapore Provision of civil, mechanical and engineering works, construction and procurement

100 100 - -

ESEC (Cambodia) Pte. Ltd.(“ECPL”) **

Cambodia Dormant 100 100 - -

Subsidiaries of HLN

Harbour Eagle Sdn. Bhd.* Malaysia

Ship owning and ship management

100 100 - -

Harbour Challenger Sdn. Bhd.*

Malaysia 100 100 - -

Satun Shipping Sdn. Bhd.* Malaysia 100 100 - -

Harbour Gemini Sdn. Bhd.* Malaysia 52 52 48 48

Harbour Services (Kuching)Sdn. Bhd.*

Malaysia 100 - - -

Harbour Agencies (Sibu) Sdn. Bhd.*

Malaysia 100 - - -







Groupß


interestß

2015 2014 2015 2014

% % % %

Subsidiaries of HLN cont’d

Harbour-Link Shipping Sdn. Bhd.*

Malaysia Ship management 100 100 - -

Harbour Xtra Sdn. Bhd.* Malaysia Dormant 100 - - -

Harbour-Link Marine Services Sdn. Bhd.*

Malaysia Ship management and consultancy services

100 100 - -

Subsidiary of APSB

Sarawak Edible Oils Sdn. Bhd.*

Malaysia Property Developer 100 100 - -

Subsidiaries of HLLogistics

Harbour-Link Logistics (S) Sdn. Bhd.

Malaysia Hiring of equipments and machinery and provision of transportation services

100 100 - -

Siong Jaya Sdn. Bhd.* Malaysia 100 100 - -

Subsidiaries of HLLines

Harbour-Link Lines (JB) Sdn. Bhd.*

Malaysia

Port agent, ship operator and provision of freighting and marine services

70 70 30 30

Harbour-Link Lines (KCH) Sdn. Bhd.*

Malaysia 63.75 60 36.25 40

Harbour-Link Lines (KK) Sdn. Bhd.*

Malaysia 95 95 5 5

Harbour-Link Lines (PK) Sdn. Bhd.*

Malaysia 60 60 40 40

Harbour-Link Lines (Singapore) Pte Ltd**

Singapore 100 - - -

Harbour Jupiter Sdn. Bhd. * Malaysia Ship owning and ship management

100 100 - -


cont’d






Groupß


interestß

2015 2014 2015 2014

% % % %

Subsidiary of HLG Resources

HLG Equipment Sdn. Bhd.* Malaysia Provision of port related services services

60 60 40 40

* Audited by Ernst & Young, Malaysia.** Audited by firms of auditors other than Ernst & Young, Malaysia. ß Equal to proportion of voting right held

(i) Although the Group owns 47% (2014: 47%) of the equity interest of Harbour Services Sdn. Bhd. (“HSSB”), the

Group has the power to govern the financial and operating policies of HSSB by virtue of the right to appoint three directors out of total four directors to the board of directors of HSSB.

(b) Acquisition of non-controlling interest in subsidiaries

(i) On 11 March 2015, a subsidiary of the Company, Harbour-Link Lines Sdn. Bhd. (“HLLines”) has acquired additional equity interest of 3.75% in Harbour-Link Lines (Kch) Sdn. Bhd. (“HLLK”) for total cash consideration of RM39,375. Following the purchase, the equity interest of HLLines in HLLK has increased from 60% to 63.75%.

(ii) On 11 March 2015, the Company has acquired additional equity interest of 5% in HLLines for a total cash consideration RM1,008,000. Following the purchase, the equity interest of the Company in HLLines has increased from 80% to 85%.

The following summarise the effect of the change in the Group’s ownership interest in the above subsidiaries on the equity attributable to owners of the parent:

HLLK HLLines Total

RM RM RM

Consideration paid for acquisition of non-controlling interest 39,375 1,008,000 1,047,375

Decrease in equity attributable to non-controlling interest (44,688) (1,113,452) (1,158,140)

Increase in equity attributable to owners of the parent 5,313 105,452 110,765

(c) Acquisition of subsidiaries

(i) On 13 August 2014, HLLines has incorporated a new subsidiary, Harbour-Link Lines (S) Pte. Ltd., a company incorporated in Singapore with total paid up capital of SGD 1.0. The intended principal activities is shipping agencies.

(ii) On 8 June 2015, a subsidiary of the Company, Harbour-Link Navigation Sdn. Bhd. has acquired the entire equity interest in Harbour Xtra Sdn. Bhd. (“HX”) for a total cash consideration of RM 2. The intended principal activity of HX is ship owning and provision of ship management services.



17. INVESTMENTS IN SUBSIDIARIES cont’d (d) The Group’s subsidiaries that have material non-controlling interests (“NCI”) are set out below. The summarised financial

information presented below is the amount before inter-company elimination. (i) Summarised statements of financial position

Arcadia Properties Sdn. Bhd.

and its subsidiaries

Harbour-Link Lines Sdn. Bhd.

and its subsidiaries Total

2015 2014 2015 2014 2015 2014

RM RM RM RM RM RM

Non-current assets 50,480,912 39,366,887 10,446,310 4,629,434 60,927,222 43,996,321

Current assets 76,253,468 59,442,821 50,116,679 40,317,280 126,370,147 99,760,101

Total assets 126,734,380 98,809,708 60,562,989 44,946,714 187,297,369 143,756,422

Current liabilities 94,918,805 57,741,197 34,823,178 22,898,415 129,741,983 80,639,612

Non-current liabilities 10,769,188 23,689,235 3,612,388 105,187 14,381,576 23,794,422

Total liabilities 105,687,993 81,430,432 38,435,566 23,003,602 144,123,559 104,434,034

Equity attributable to owners of the Company 10,715,552 8,845,326 16,650,730 15,619,411 27,366,282 24,464,737

Non-controlling interests 10,330,835 8,533,950 5,476,693 6,323,701 15,807,528 14,857,651

(ii) Summarised statements of profit or loss and other comprehensive income





2015 2014 2015 2014 2015 2014

RM RM RM RM RM RM

Revenue 8,791,523 3,342,298 125,792,779 134,122,921 134,584,302 137,465,219

Profit for the year 3,667,111 2,065,816 935,148 5,430,001 4,602,259 7,495,817

Profit attributable to:

Owners of the Company 1,870,227 1,053,537 292,639 4,043,955 2,162,866 5,097,492

Non-controlling interest 1,796,884 1,012,279 642,509 1,386,046 2,439,393 2,398,325

Dividend paid to Non-controlling interests - - 286,100 266,100 286,100 266,100


cont’d


17. INVESTMENTS IN SUBSIDIARIES cont’d (d) The Group’s subsidiairies that have material non-controlling interests (“NCI”) are set out below. The summarised financial

information presented below is the amount before inter-company elimination. cont’d

(iii) Summarised cash flows





2015 2014 2015 2014 2015 2014

RM RM RM RM RM RM

Net cash generated from operating activities 4,584,372 16,266,323 5,264,417 4,050,625 9,848,789 20,316,948

Net cash (used in)/generated from investing activities (25,328) (975,563) (6,660,120) 207,424 (6,685,448) (768,139)

Net cash (used in)/generated from financing activities

(18,048,121) 2,550,455 3,082,183 (1,514,290) (14,965,938) 1,036,165

Net (decrease)/increase in cash and cash equivalents

(13,489,077) 17,841,215 1,686,480 2,743,759 (11,802,597) 20,584,974

Cash and cash equivalents at the beginning of the year 20,704,134 2,862,919 9,622,198 6,878,439 30,326,332 9,741,358

Cash and cash equivalents at the end of the year 7,215,057 20,704,134 11,308,678 9,622,198 18,523,735 30,326,332

18. INVESTMENT IN ASSOCIATES

Group Company

2015 2014 2015 2014

RM RM RM RM

Unquoted shares in Malaysia, at cost 1,712,200 1,672,200 1,466,200 1,466,200

Share of post-acquisition reserves 1,973,181 1,433,885 - -

3,685,381 3,106,085 1,466,200 1,466,200



18. INVESTMENT IN ASSOCIATES cont’d

Details of the associates are as follows:

Name of AssociatesCountry of


Ownership of interest held by

the Groupß

2015 2014

% %

Eastock Resources Sdn. Bhd. * Malaysia Renting of property 25 25

ECL (Malaysia) Sdn. Bhd ** MalaysiaShipping and related services services

49 49

Smart Shipping Sdn. Bhd ** Malaysia 40 -

Subsidiary of ECL (Malaysia) Sdn. Bhd.

HKK Jaya Sdn. Bhd ** Malaysia Ship owning and ship operator services 42 42

* Audited by Ernst & Young, Malaysia.** Audited by firms of auditors other than Ernst & Young, Malaysia. ß Equal to proportion of voting right held

On 2 February 2015, a subsidiary of the Group, Harbour-Link Lines (PK) Sdn. Bhd. (“HLLPK”) has subscribed 40% equity interest

in Smart Shipping Sdn. Bhd. (“SSSB”) for a total consideration of RM40,000. Following the subscription, SSSB become an associate of the Group.

All the result of the Group’s associates were consolidated using equity method.

Summarised financial information in respect of the Group’s material associates is set out below. The summarised financial information represents the amount in the MFRS financial statement of the associates and not the Group’s share of those amounts.

(a) Summarised statements of financial position

ECL (Malaysia) Sdn. Bhd and its subsidiary

2015 2014

RM RM

Assets and liabilities

Current assets 10,047,621 7,622,733

Non-current assets 8,496,975 9,949,196

Total assets 18,544,596 17,571,929

Current liabilities 5,949,159 4,103,407

Non-current liabilities 4,919,757 7,080,988

Total liabilities 10,868,916 11,184,395

Net assets 7,675,680 6,387,534


cont’d


18. INVESTMENT IN ASSOCIATES cont’d (b) Summarised statements of profit or loss and other comprehensive income

ECL (Malaysia) Sdn. Bhd and its subsidiary

2015 2014

RM RM

Revenue 26,994,564 17,319,637

Profit before tax 1,708,262 747,836

Income tax expense (478,191) (289,478)

Total Comprehensive income 1,230,071 458,358

Dividend received from the associate during the year 110,463 77,535

(c) Reconciliation of net assets to carrying amount

As at 30 June

Group’s share of net assets 3,842,345 3,353,248

Goodwill (247,163) (247,163)

Carrying amount in the statement of financial position 3,595,182 3,106,085

19. INVESTMENT IN JOINT VENTURE

Group

2015 2014

RM RM

Unquoted shares at cost 650,000 650,000

Share of post-acquisition profit 250,755 136,563

900,755 786,563

The Group has 50% of the voting right of its joint arrangement under the contractual arrangements, unanimous consent is required by all parties to the arrangement for all relevant activities.

The joint arrangement is structured via separate entity and provide the group with the rights to the net assets of the entity under the arrangement. Therefore this entity is classified as joint venture of the Group.



19. INVESTMENT IN JOINT VENTURE cont’d

Details of the joint venture is as follows:

Name of Joint Venture

Country of Incorporation Principal Activities

% of ownership interest held by

the Group*

Accounting model

applied

2015 2014

% %

A&H Project Services Sdn. Bhd. ** Malaysia Transportation and crane renting

50 50 Equity method

* Equals to the proportion of voting rights held** Audited by firms of auditors other than Ernst & Young, Malaysia.

Summarised financial information of A&H Project Services Malaysia Sdn. Bhd. is set out below. The financial information

represents the amounts in the MFRS financial statements of the joint ventures and not the Group’s share of those amounts.

(i) Summarised statements of financial position

Group

2015 2014

RM RM

Assets and liabilities

Current assets 4,913,191 2,731,020

Non-current assets 162,800 185,228

Total assets 5,075,991 2,916,248

Current liabilities 3,257,880 1,336,838

Non-current liabilities 16,601 6,284

Total liabilities 3,274,481 1,343,122

Net assets 1,801,510 1,573,126

(ii) Summarised statements of profit or loss and other comprehensive income

Revenue 6,121,106 3,900,841

Profit/(loss) for the year 252,356 (553,053)

Income tax expense (23,972) (20,050)

Total Comprehensive income 228,384 (573,103)

Dividend received from the joint venture during the year - 4,000,000


cont’d


19. INVESTMENT IN JOINT VENTURE cont’d

(iii) Reconciliation of net assets to carrying amount

Group

2015 2014

RM RM

Net asset as at 1 July 1,573,125 6,146,228

Profit/(loss) for the year 228,384 (573,103)

Dividend paid - (4,000,000)

Net asset as at 30 June 1,801,509 1,573,125

Interest in joint venture 50% 50%

Carrying value of Group’s interest in joint venture 900,755 786,563

20. OTHER INVESTMENTS

Group

2015 2014

RM RM

Available-for-sale investment

Unquoted shares at cost - outside Malaysia 652,445 652,445

Available-for-sale investment represent investment made to non-listed investment outside Malaysia. The investment is recorded at cost since the fair value cannot be reliably estimated. There is no market value for the investment and the Group does not intend to dispose the investment in the foreseeable future.

21. DEFERRED TAX ASSETS/(LIABILITIES)

Group Company

2015 2014 2015 2014

RM RM RM RM

At 1 July (10,764,542) (9,884,436) (63,286) (44,313)

Exchange differences 3,032 9 - -

Recognised in profit or loss (Note 10) 4,942,003 (880,115) 6,486 (18,973)

At 30 June (5,819,507) (10,764,542) (56,800) (63,286)

The following amounts, determined after appropriate offsetting, are shown in the statement of financial position.



21. DEFERRED TAX ASSETS/(LIABILITIES) cont’d

Group Company

2015 2014 2015 2014

RM RM RM RM

Deferred tax assets 9,832,252 2,664,409 - -

Deferred tax liabilities (15,651,759) (13,428,951) (56,800) (63,286)

(5,819,507) (10,764,542) (56,800) (63,286)

Group Prepaid tax in respect of

development properties

Unutilised Tax losses

Unabsorbed capital

allowances

Allowance for

impairment losses Total

RM RM RM RM RM

Deferred tax assets:

At 1 July 2014 1,390,149 214,409 2,789,612 2,216,615 6,610,785

Recognised in profit or loss 4,340,546 298,830 (608) 2,208,383 6,847,151

At 30 June 2015 5,730,695 513,239 2,789,004 4,424,998 13,457,936

At 1 July 2013 - 162,631 3,229,835 1,806,419 5,198,885

Recognised in profit or loss 1,390,149 51,778 (440,223) 410,196 1,411,900

At 30 June 2014 1,390,149 214,409 2,789,612 2,216,615 6,610,785

Property, plant and equipment

2015 2014

RM RM

Group

Deferred tax liabilities

At 1 July (17,375,327) (15,083,321)

Exchange differences 3,032 9

Recognised in profit or loss (1,905,148) (2,292,015)

At 30 June (19,277,433) (17,375,327)

Company

Deferred tax liabilities

At 1 July (63,286) (44,313)

Recognised in profit or loss (Note 10) 6,486 (18,973)

At 30 June (56,800) (63,286)


cont’d


22. INVENTORIES

Group

2015 2014

RM RM

At cost

Petrol, diesel and lubricant 2,137,630 1,539,036

Spare parts 2,585,224 1,398,085

Consumable store 327,559 251,227

5,050,413 3,188,348

At net realisable value

Pallets 55,610 60,290

5,106,023 3,248,638

23. LAND HELD FOR DEVELOPMENT AND DEVELOPMENT PROPERTIES

(a) Land held for development

Group

Leaseholdland

Developmentcost Total

RM RM RM

At 1 July 2013 32,406,599 5,273,644 37,680,243

Cost incurred during the year 8,880,000 597,596 9,477,596

Transfer to development properties (1,268,356) - (1,268,356)

At 30 June 2014 40,018,243 5,871,240 45,889,483

Cost incurred during the year - 415,107 415,107

Transfer to development properties (2,499,211) (111,341) (2,610,552)

At 30 June 2015 37,519,032 6,175,006 43,694,038

(b) Development Properties

At 1 July 2013 6,900,307 3,743,732 10,644,039

Cost incurred during the year - 18,932,003 18,932,003

Transfer from development properties 1,268,356 - 1,268,356

At 30 June 2014 8,168,663 22,675,735 30,844,398

Cost incurred during the year - 29,292,719 29,292,719

Transfer from development properties 2,499,211 111,341 2,610,552

Transfer to profit and loss (650,921) (189,814) (840,735)

At 30 June 2015 10,016,953 51,889,981 61,906,934



23. LAND HELD FOR DEVELOPMENT AND DEVELOPMENT PROPERTIES cont’d

Included in development properties during the financial year are:

Group

2015 2014

RM RM

Interest expense (Note 6) 504,244 928,447

24. TRADE AND OTHER RECEIVABLES

Group Company

2015 2014 2015 2014

RM RM RM RM

Trade receivables

Third parties 142,747,033 97,438,209 - -

Amounts due from associates - 61,510 - -

Amounts due from jointly venture 11,907 11,907

142,758,940 97,511,626 - -

Less: Allowance for impairment

Third parties (19,975,314) (9,171,568) - -

Amounts due from associates (11,907) (11,907) - -

(19,987,221) (9,183,475) - -

Trade receivables, net 122,771,719 88,328,151 - -

Other receivables

Advances 648,757 157,237 - -

Sundry receivables 4,518,747 5,843,999 11,821 3,557

Amount due from subsidiaries - - 415,661 863,047

Loan to subsidiaries - - 23,653,891 24,589,946

Deposits 5,221,111 2,402,387 221,925 31,950

10,388,615 8,403,623 24,303,298 25,488,500

Less: Allowance for Impairment - - (6,209,212) (6,209,212)

10,388,615 8,403,623 18,094,086 19,279,288

Total trade and other receivables 133,160,334 96,731,774 18,094,086 19,279,288

Add: Cash and bank balances (Note 28) 90,896,516 81,592,359 1,988,880 804,565

Total loans and receivables 224,056,850 178,324,133 20,082,966 20,083,853


cont’d


24. TRADE AND OTHER RECEIVABLES cont’d (a) Trade receivables

Ageing analysis of trade receivables

The ageing analysis of the Group’s trade receivables are as follows:

Group

2015 2014

RM RM

Neither past due nor impaired 35,444,302 32,608,306

1 to 6 months past due but not impaired 73,672,793 40,184,219

109,117,095 72,792,525

Impaired 33,641,845 24,719,101

142,758,940 97,511,626

Receivables that are neither past due nor impaired

Credit terms of trade receivables range from payment in advance to 120 days (2014: range from payment in advance to 120 days).

Other than receivables that are impaired, trade receivables comprises:

- Receivables in relation to engineering business arising from rendering of engineering services to companies with a good collection track record with the Group and the Company. These receivables include retention sums which are to be settled in accordance with the terms of the respective contracts.

- Receivables in relation to shipping and marine services business arising from providing shipping and agency related services to companies with a good collection track record with the Group and the Company. These receivables have more than four years of experience with the Group and losses have occurred infrequently.

- Receivables in relation to total logistics services business arising from providing forwarding and logistics related services to companies with good collection track record with the Group and the Company.

Receivables that are past due but not impaired comprises:

As at 30 June 2015, trade receivables of the Group of RM73,672,793 (2014: RM40,184,219) were past due but not impaired. These relate to customers for whom there is no objective evidence that the receivables are not fully recoverable.



24. TRADE AND OTHER RECEIVABLES cont’d (a) Trade receivables cont’d

Receivables that are impaired:

The Group’s trade receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:

Group

CollectivelyImpaired

2015

IndividuallyImpaired

2015Total2015

RM RM RM

Trade receivables - nominal amounts 7,474,792 26,167,053 33,641,845

Less: Allowance for impairment (2,457,839) (17,529,382) (19,987,221)

5,016,953 8,637,671 13,654,624

Group

CollectivelyImpaired

2014

IndividuallyImpaired

2014Total2014

RM RM RM

Trade receivables - nominal amounts 9,112,884 15,606,217 24,719,101

Less: Allowance for impairment (2,214,344) (6,969,131) (9,183,475)

6,898,540 8,637,086 15,535,626

Movement in allowance accounts:

Group

2015 2014

RM RM

At 1 July 9,183,475 6,885,163

Charge for the year 22,692,099 7,707,577

Reversal of impairment losses (11,887,257) (4,986,161)

Allowance for impairment, net of reversal (Note 7) 10,804,842 2,721,416

Written off (1,096) (423,104)

At 30 June 19,987,221 9,183,475


cont’d


24. TRADE AND OTHER RECEIVABLES cont’d (b) Related party balances

Amounts due from subsidiaries and loans to subsidiaries are unsecured and non-interest bearing, except amount of RM18,003,264 (RM17,444,679) bear interest of ranging from 4% to 6% (2014: 4% to 6%) per annum.

Other receivables that are impaired

At the reporting date, the Company has provided an allowance for impairment of RM6,209,212 (2014: RM6,209,212) for impairment on amount due from subsidiary.

There has been no movement in this allowance account for the financial year ended 30 June 2015 and 2014.

25. INVESTMENT SECURITIES

Group

2015 2014

RM RM

Held for trading investments

Quoted money market funds 8,270,415 6,516,215

Fair value of the quoted money market funds 8,270,415 6,516,215

26. OTHER CURRENT ASSETS

Group Company

2015 2014 2015 2014

RM RM RM RM

Amount due from customers on construction contracts (Note 27) 627,374 24,041 - -

Tax recoverable 1,404,055 1,877,325 1,219,865 1,508,862

Prepayment 9,423,635 3,798,838 21,294 23,278

11,455,064 5,700,204 1,241,159 1,532,140



27. GROSS AMOUNT DUE FROM/(TO) CUSTOMERS FOR CONTRACT WORK-IN-PROGRESS

Group

2015 2014

RM RM

Construction contract costs incurred to date 54,793,626 190,400,572

Add: Attributable profits 9,555,306 31,318,577

64,348,932 221,719,149

Less: Progress billings (76,754,316) (233,149,820)

Amount due to customers for contract works (12,405,384) (11,430,671)

Amounts due from customers for contract work (included in other current assets - Note 26) 627,374 24,041

Amounts due to customers on contract work (included in other current liabilities - Note 31) (13,032,758) (11,454,713)

(12,405,384) (11,430,672)

Retention sums on contracts, included within trade receivables 1,840,928 6,670,588

The costs incurred to date on construction contracts include the following charges made during the financial year:

Group

2015 2014

RM RM

Hire of plant and machinery 1,147,236 6,033,644

Depreciation of property, plant and equipment (Note 13) 1,528,518 1,518,244

Rental expenses 304,132 531,611

28. CASH AND BANK BALANCES

Group Company

2015 2014 2015 2014

RM RM RM RM

Cash at bank and on hand 78,481,494 76,111,025 780,376 321,807

Short term deposits with licensed banks 12,415,022 5,481,334 1,208,504 482,758

Cash and bank balances 90,896,516 81,592,359 1,988,880 804,565


cont’d


28. CASH AND BANK BALANCES cont’d

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between 1 day and twelve months depending on the immediate cash requirements of the Group, and earn interests at respective short-term deposit rates. The weighted average effective interest rate as at 30 June 2015 for the Group and the Company were 3% (2014: 2%) and 3% (2014: 2%) respectively per annum. Short term deposits with licensed banks of the Group and of the Company amounting to RM5,295,795 (2014: RM3,441,874) and RM1,208,504 (2014: RM482,758) respectively are pledged as securities for bank borrowings.

Included in short-term deposit with licensed banks of the Group are deposits amounted to RM264,078 (2014: RM251,185) under the name of the director of the subsidiary who held in trust on behalf of the subsidiary.

The Group’s cash and bank amounting to RM2,598,627 has been deposited to a bank to be solely used as the bank repayment for the Company’s loans and borrowings as referred in Note 29.

For the purpose of cash flow statements, cash and cash equivalents comprise the following at the reporting date:

Group Company

2015 2014 2015 2014

RM RM RM RM

Cash and short term deposits 90,896,516 81,592,359 1,988,880 804,565

Bank overdrafts (Note 29) (2,703,758) (5,759,941) (446,878) (1,495,103)

Cash at bank pledged as securities for bank borrowings (2,598,627) - - -

Short term deposits pledged as securities for bank borrowings (5,295,795) (3,441,874) (1,208,504) (482,758)

Cash and cash equivalents 80,298,336 72,390,544 333,498 (1,173,296)



29. BORROWINGS

Group Company

2015 2014 2015 2014

Maturity RM RM RM RM

Current

Secured:

Obligations under finance leases (Note 36(c)) 2016 10,515,091 14,775,723 285,039 257,960

Bank overdrafts (Note 28) On demand 2,703,758 5,759,941 446,878 1,495,103

Bankers’ acceptances 2016 4,312,708 5,474,591 - -

Term loans - RM loan:

BLR - 0.5% 2016 489,885 1,142,494 - -

BLR - 0.3% 2016 1,071,122 1,044,027 - -

BLR - 1.5% 2016 400,223 300,744 - -

Term Financing-i 2016 245,537 293,877 - -

BLR + 0% (a) 2016 565,133 529,077 565,133 529,077

BLR + 0% (b) 2016 429,600 - - -

BLR + 0% (c) 2016 4,440,000 9,533,847 - -

BLR + 0.15% 2016 147,552 149,440 - -

BLR + 0.35% 2016 942,248 - - -

BLR + 0.75% 2016 189,960 178,395 - -

BLR + 1% 2016 961,588 895,698 - -

KLIBOR + 1.25% 2016 530,304 530,304 - -

3.38% p.a. fixed rate & BLR - 2% 2016 216,593 209,305 - -

4.15% p.a. fixed rate & BLR -1.45% 2016 - 478,398 - -

7.0016% fixed rate 2016 117,435 449,786 - -

7.25% fixed rate 2016 - 635,571 - -

Total short term borrowings 28,278,737 42,381,218 1,297,050 2,282,140


cont’d


29. BORROWINGS cont’d

Group Company

2015 2014 2015 2014

Maturity RM RM RM RM

Non-current

Secured:

Obligations under finance leases (Note 36(c)) 2017 - 2019 20,570,551 24,871,524 193,473 448,948

Term loans - RM loan:

BLR - 0.5% 2017 - 2020 990,049 1,474,634 - -

BLR - 0.3% 2017 - 2018 1,333,647 2,407,787 - -

BLR - 1.45% 2017 - 2026 - 5,631,006 - -

BLR - 1.5% 2017 - 2025 4,289,402 4,595,130 - -

Term Financing-i 2017 - 2029 4,764,152 5,009,394 - -

BLR + 0% (a) 2017 527,732 1,097,279 527,732 1,097,279

BLR + 0% (b) 2017-2022 2,544,600 - - -

BLR + 0% (c) 2017 - 2026 10,513,730 23,301,000 - -

BLR + 0.15% 2017 - 2018 283,136 419,353 - -

BLR + 0.35% 2017 - 2019 3,596,476 - - -

BLR + 0.75% 2017 - 2019 404,484 610,274 - -

BLR + 1% 2017 1,126,938 2,077,439 - -

KLIBOR + 1.25% 2017 - 2020 1,635,064 2,165,368 - -

& BLR - 2% 2017 - 2021 825,359 1,039,134 - -

7.0016% fixed rate 2017 - 117,435 - -

7.25% fixed rate 2017 - 1,611,807 - -

Total long term borrowings 53,405,320 76,428,564 721,205 1,546,227

Total loan and borrowings 81,684,057 118,809,782 2,018,255 3,828,367



29. BORROWINGS cont’d The remaining maturities of the loans and borrowings as at the reporting date are as follows:

Group Company

2015 2014 2015 2014

RM RM RM RM

On demand or within one year 28,278,737 42,381,218 1,297,050 2,282,140

More than 1 year and less than 2 years 19,477,025 20,437,290 715,777 823,542

More than 2 years and less than 5 years 26,135,701 39,371,770 5,428 722,685

5 years or more 7,792,594 16,619,504 - -

81,684,057 118,809,782 2,018,255 3,828,367

Obligations under finance leases

These obligations are secured by a charge over the lease assets (Note 13). The effective interest rate as at reporting date ranging from 4.53% to 7.27% (2014: 5.03% to 7.78%) per annum. These obligations are denominated in RM.

Bank overdrafts

Bank overdrafts and bankers’ acceptances are denominated in RM and are secured by fixed and floating charges over certain landed property of the subsidiaries, short-term deposits of the Group and of the Company and against corporate guarantee from the Company. The effective interest rate as at reporting were 7.1% (2014: 7.6%) per annum.

RM loan at BLR - 0.3%

This loan is secured by fixed charge over the certain plant and machineries of Harbour-Link Logistics Sdn. Bhd. and corporate guarantee of the Company.


This loan is secured by fixed charge over the container vessel and tugboat of Harbour Ivory Sdn. Bhd. and Harbour Agencies (Sibu) Sdn. Bhd. and corporate guarantee of the Company.


This loan is secured by fixed charge over certain leasehold land of Harbour-Link (M) Sdn. Bhd. and corporate guarantee of the Company.

Term Financing-i

This loan is secured by fixed charge over freehold land and buildings of Eastern Soldar Engineering & Construction Sdn. Bhd. and corporate guarantee of the Company.

RM loan at BLR + 0% (a)

This loan is secured by fixed charge over land and buildings of the Company.

RM loan at BLR + 0% (b)

This loan is secured by fixed charge over land and buildings of Harbour Services Corporation Sdn. Bhd. and corporate guarantee of the Company.


cont’d


29. BORROWINGS cont’d

RM loan at BLR + 0% (c)

This loan is secured by fixed charge over leasehold land of Sarawak Edible Oils Sdn. Bhd., cash at bank as refer in Note 28 to the financial statements and corporate guarantee of the Company.

RM loan at BLR + 0.15%

This loan is secured by fixed charge over certain leasehold land of Harbour-Link Logistics Sdn. Bhd. and corporate guarantee of the Company.


This loan is secured by fixed charge over the vessel of Harbour Jupiter Sdn. Bhd. and corporate guarantee of the Company.


This loan is secured by fixed charge over the certain plant and machineries of Harbour-Link Logistics Sdn. Bhd. and corporate guarantee of the Company.

RM loan at BLR + 1%

This loan is secured by fixed charge over two container vessels of Harbour Hornbill Sdn. Bhd. and fixed charge over certain leasehold land of Harbour-Link (M) Sdn. Bhd. as disclosed in Note 13 and corporate guarantee provided of the Company.

RM loan at KLIBOR + 1.25%

This loan is secured by fixed charge over the vessel of Harbour Agencies (Sibu) Sdn. Bhd. and corporate guarantee of the Company.

RM loan at 4.15% p.a. fixed rate for the first three years and BLR -1.45% subsequently

This loan is secured by fixed charge over leasehold land of Harbour-Link Logistics Sdn. Bhd. and corporate guarantee of the Company.

RM loan at 7.0016% fixed rate

This loan is secured by fixed charge over the vessel of Satun Shipping Sdn. Bhd. and corporate guarantee of the Company.

RM loan at 7.25% fixed rate

This loan is secured by fixed charge over the vessel of Harbour Services (Kch) Sdn. Bhd. and corporate guarantee of the Company.

RM bank loan at 3.38% fixed for the first year and BLR - 2% subsequently

The loan is secured by way of legal charges on investment properties of Harbour-Link (M) Sdn. Bhd., and corporate guarantee of the Company.



30. TRADE AND OTHER PAYABLES

Group Company

2015 2014 2015 2014

RM RM RM RM

Current

Trade payables

Third parties 47,763,703 38,052,023 - -

Amount due to related parties 3,876,733 892,080 - -

Amount owing to subsidiaries - - 361,770 4,073

51,640,436 38,944,103 361,770 4,073

Other payables

Accrued operating expenses 26,972,808 8,916,808 254,770 215,903

Other payables 6,270,532 8,613,575 1,179,289 77,950

Loan from subsidiaries - - 20,441,885 35,321,051

Deposit received 3,343,580 2,601,550 1,080,000 480,000

36,586,920 20,131,933 22,955,944 36,094,904

Total trade and other payables 88,227,356 59,076,036 23,317,714 36,098,977

Add: Loans and borrowings (Note 29) 81,684,057 118,809,782 2,018,255 3,828,367

Total financial liabilities carried at amortised cost 169,911,413 177,885,818 25,335,969 39,927,344 (a) Trade and other payables

These amounts are non-interest bearing. Credit terms of trade and other payables range from payment in advance to 120 days (2014: range from payments in advance to 120 days).

(b) Loan from subsidiaries

These amounts are unsecured and are repayable on demand and bear interest of 4% (2014: 4%) per annum.

31. OTHER CURRENT LIABILITIES

Group

2015 2014

RM RM

Amounts due to customers on contract work (Note 27) 13,032,758 11,454,713

Advance deposits in respect of development properties 72,885,755 28,031,055

85,918,513 39,485,768


cont’d


32. SHARE CAPITAL

Company

Number of ordinary shares of RM1 each Amount

2015 2014 2015 2014

RM RM

Authorised

At 1 July and 30 June 500,000,000 500,000,000 500,000,000 500,000,000

Issued and fully paid

At 1 July and 30 June 182,000,002 182,000,002 182,000,002 182,000,002

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 residual assets.

33. RETAINED EARNINGS

The Company may distribute dividend out of its entire revenue reserve as at 30 June 2015 under the single tier system.

34. OTHER RESERVE

Other reserve represented restructuring reserve arising from business combination.

35. EXCHANGE TRANSLATION RESERVE

The exchange translation reserve represents exchange differences arising from the translation of the financial statements of

foreign operations whose functional currencies are different from that of the Group’s presentation currency.

36. COMMITMENTS

(a) Capital commitments

Capital expenditure as at the reporting date is as follows:

Group

2015 2014

RM RM

Capital expenditure

Approved and contracted for:

Property, plant and equipment 10,130,699 7,296,220



36. COMMITMENTS cont’d

(b) Operating lease commitments as lessor

The Group has the following lease arrangement: (i) Lease of a building to a third party for a period of 10 years commencing 10 June 2009 to 30 June 2019.

(ii) Lease of a vacant land to a third party for a period of 33 months commencing 1 April 2013 to 31 December 2015.

(iii) Lease of a vacant land from a third party for the period of 30 years commencing on the 15 November 2012 to 14 November 2042.

As at the end of the financial year, the future aggregate minimum lease payments receivables/payables under non-cancellable operating leases contracted for but not recognised as assets/liabilities were as follows:

Group

2015 2014

RM RM

Lease receivables

- Receivables within 1 year 2,017,500 4,155,400

- Receivables between 1 and 5 years 1,080,000 3,097,500

3,097,500 7,252,900

Lease payables

- Payables within 1 year 106,906 100,224

- Payables between 1 and 5 years 459,360 564,512

- Payables after 5 years 3,958,408 3,917,984

4,524,674 4,582,720

(c) Finance lease commitments

The Group has finance leases for certain items of plant and equipment and motor vehicles (Note 13). These leases do not have terms of renewal, but have purchase options at nominal values at the end of the lease term.


cont’d


36. COMMITMENTS cont’d

(c) Finance lease commitments cont’d

Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:

Group Company

2015 2014 2015 2014

RM RM RM RM

Future minimum lease payments:

Not later than 1 year 12,125,996 16,815,297 304,164 290,928

Later than 1 year but not later than 2 years 10,202,563 10,918,014 192,089 290,928

Later than 2 years but not later than 5 years 11,978,631 16,192,843 5,512 178,853

Total future minimum lease payments 34,307,190 43,926,154 501,765 760,709

Less: Future finance charges (3,221,548) (4,278,907) (23,253) (53,801)

Present value of finance lease liabilities 31,085,642 39,647,247 478,512 706,908 Analysis of present value of finance lease liabilities:

Group Company

2015 2014 2015 2014

RM RM RM RM

Not later than 1 year 10,515,091 14,775,723 285,039 257,960

Later than 1 year but not later than 2 years 9,222,375 9,684,239 188,045 273,372

Later than 2 years but not later than 5 years 11,348,176 15,187,285 5,428 175,576

31,085,642 39,647,247 478,512 706,908

Less: Amount due within 12 months (Note 29) (10,515,091) (14,775,723) (285,039) (257,960)

Amount due after 12 months (Note 29) 20,570,551 24,871,524 193,473 448,948



37. RELATED PARTY DISCLOSURES (a) In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the

following significant transactions at terms agreed between the parties during the financial year:

2015 2014

RM RM

Group

Companies in which the certain directors have substantial interest:

Income

Sales of services

- Azam Teroka Sdn. Bhd. 151,957 294,339

- Sri Minah Enterprise Sdn. Bhd. 15,150 6,730

- Marup Quarry Sdn. Bhd. 120,468 74,972

- Herdsen Sago Industrial Sdn. Bhd. 7,742 51,364

- Herdsen Quarry Sdn. Bhd. 10,300 134,626

- Herdsen Corporation Sdn. Bhd. 550 7,250

- Mohd Mahmud Shipping Sdn. Bhd. - 28,220

- Slingtex Industrial Sdn. Bhd. 7,917 4,094

Progress billings in respect of sales of development properties

- Slingtex Industrial Sdn. Bhd. 367,500 578,500

- Directors of the Company (Wong Siong Seh, Lee Seng Chiong, Hii Kwong Wui, Lau Sii Hin, Lau Chii Hung) 1,603,800 1,782,000

Expenditure

Purchase of services

- Sri Minah Enterprise Sdn. Bhd. 3,500 -

- Herdsen Corporation Sdn. Bhd. 107,002 139,256

- Lucky In Sdn. Bhd. 30,000 39,000

- Sun Swee Trading Co. 15,000 -

- Utama Bena Engineering 8,000 -

- Ricardon Sdn. Bhd. 36,750 39,500

- Keywork Sdn. Bhd. 189,174 200,802


cont’d


37. RELATED PARTY DISCLOSURES cont’d (a) In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the

following significant transactions at terms agreed between the parties during the financial year: cont’d

2015 2014

RM RM

Group cont’d

Companies in which the certain directors have substantial interest: cont’d

Expenditure cont’d

Purchase of parts and tyres & materials, equipment

- Sri Minah Enterprise Sdn. Bhd. 237,146 1,019,037

- Marup Quarry Sdn. Bhd. 1,642,574 11,744


- Herdsen Sago Industrial Sdn. Bhd. - 4,630

- Sun Swee Trading Co. 15,000 -

- Lucky In Sdn. Bhd. 45,000 -

- Mohd Mahmud Sdn. Bhd. 309,562 -

Rental of equipment

- Marup Quarry Sdn. Bhd. 14,760 -

- Herdsen Corporation Sdn. Bhd. 1,000 1,100


- Sri Minah Enterprise Sdn. Bhd. 491,438 225,066

Associates

Income

Sales of services 376,125 422,524

Jointly venture

Income

Sales of services 3,274,840 1,418,238

Expenditure

Purchase of services 2,925,853 -



37. RELATED PARTY DISCLOSURES cont’d (a) In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the

following significant transactions at terms agreed between the parties during the financial year: cont’d

2015 2014

RM RM

Company

Transactions with subsidiaries:

Income

Dividend income 22,777,073 9,717,176

Interest income 789,072 765,432

Management fee income 1,116,000 1,116,000

Rental income 654,000 651,500

Expenditure

Interest expense 1,425,568 1,448,979

(b) Compensation of key management personnel

The remuneration of directors and other members of key management during the year was as follows:

Group Company

2015 2014 2015 2014

RM RM RM RM

Short-term employee benefits 9,702,916 9,718,579 1,385,015 1,269,258

Post-employment benefits:

Defined contribution plan 1,372,193 1,106,048 206,299 206,360

11,075,109 10,824,627 1,591,314 1,475,618

Included in the total key management personnel are:

Directors’ remuneration (Note 9) 4,148,084 3,019,331 1,027,918 912,222


cont’d


38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group and the Company are exposed to foreign currency exchange risk, interest rate risk, credit risk and liquidity risk. The Group’s overall financial risk management objective is to minimise any potential adverse effects from the unpredictability of financial markets on the Group’s financial performance in order to ensure the Group creates value for its shareholders. Financial risk management is carried out through risk reviews, internal control systems, insurance programmes and adherence to the Group’s financial risk management policies. The management regularly reviews these risks and approves the treasury policies, which covers the management of these risks.

The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial risk and the objectives, policies and processes for the management of these risks.

(a) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The currency exposure profile of the Group’s and the Company’s financial assets and financial liabilities is disclosed in the respective notes to the financial statements.

Currency risks as defined by MFRS 7 arise on account of monetary assets and liabilities being denominated in a currency that is not the functional currency.

The Group is exposed to currency translation risk arising from its net investments in foreign operations, including Singapore and Cambodia.

As at 30 June 2015, the Group’s and Company’s Ringgit Malaysia (“RM”) functional entities had United States Dollar (“USD”) and Singapore Dollar (“SGD”) denominated net monetary liabilities, as well as the effects to the Group’s and the Company’s profit before tax if the USD and SGD had strengthened by 20% and 10% respectively (2014: 5%) and weakened by 5% (2014: 3%) against RM.

Group

2015 2014

RM RM

RM / USD - Strengthen 20% (2014: 5%) 687,770 12,128

RM / USD - Weaken 5% (2014: 3%) (171,943) (7,277)

RM / SGD - Strengthen 10% (2014: 5%) (240,236) 17,070

RM / SGD - Weaken 5% (2014: 3%) 120,118 (10,242)

(b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s interest bearing assets are primarily short-term bank deposits with financial institutions. The interest rates on these deposits are monitored closely to ensure that they are maintained at favourable rates. The Group considers the risk of significant changes to interest rates on deposits to be unlikely.

The Group’s primary interest rate risk relates to interest-bearing debts. The Group managers its interest rate exposure by keep closely monitoring the debt market and where necessary, maintaining a prudent mix of fixe and floating rate borrowings and a mix of interest revision dates. This strategy allows it to capitalise on cheaper funding in a low interest rate environment and to achieve a certain level of protection against rate hikes.



38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES cont’d (b) Interest rate risk cont’d

If the Group’s borrowings at variable rates on which effective hedges have not been entered into changes in the following basis points, with all other variables being held constant, the effects on profit before tax would be as follows:

Group Company

2015 2014 2015 2014

RM RM RM RM

Borrowings based on cost of funds (“KLIBOR”):

- Increase by 50 basis points (13,061) (20,954) (2,234) (7,476)

- Decrease by 25 basis points 6,531 10,477 1,117 3,738

Borrowings based on base lending rate (“BLR”):

- Increase by 50 basis points (211,294) (332,516) (5,464) (8,132)

- Decrease by 25 basis points 105,647 166,258 2,732 4,066

(c) Liquidity Risk

The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions and balances its portfolio with some short term funding so as to achieve overall cost effectiveness.

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

On demand or within one year

More than 1 year and less than 2

years

More than 2 years and less than 5

years5 years and

more Total

RM RM RM RM RM

Group

At 30 June 2015

Financial liabilities

Trade and other payables 88,227,356 - - - 88,227,356

Loans and borrowings 32,306,942 20,397,819 30,258,357 7,957,489 90,920,607

Total undiscounted financial liabilities 120,534,298 20,397,819 30,258,357 7,957,489 179,147,963


cont’d


38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES cont’d (c) Liquidity Risk cont’d

Analysis of financial instruments by remaining contractual maturities cont’d

On demand or within one year

More than 1 year and less than 2

years

More than 2 years and less than 5

years5 years and

more Total

RM RM RM RM RM

Group

At 30 June 2014


Trade and other payables 59,076,036 - - - 59,076,036

Loans and borrowings 48,007,980 24,750,732 46,143,346 19,113,972 138,016,030

Total undiscounted financial liabilities 107,084,016 24,750,732 46,143,346 19,113,972 197,092,066

Company

At 30 June 2015


Trade and other payables, excluding financial guarantees * 23,317,714 - - - 23,317,714

Loans and borrowings 1,384,006 725,542 5,511 - 2,115,059

Total undiscounted financial liabilities 24,701,720 725,542 5,511 - 25,432,773

At 30 June 2014


Trade and other payables, excluding financial guarantees * 36,098,977 - - - 36,098,977

Loans and borrowings 2,495,096 923,892 1,372,647 - 4,791,635

Total undiscounted financial liabilities 38,594,073 923,892 1,372,647 - 40,890,612 * At the reporting date, the counterparty to the financial guarantees does not have a right to demand cash as the default has not

occurred. Accordingly, financial guarantees under the scope of MFRS 139 are not included in the above maturity profile analysis.



38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES cont’d (d) Credit risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party

to incur a financial loss.

Credit risk arises from credit exposures to customers, including outstanding receivables, as well as deposits, cash and bank balances and derivative financial instruments with financial institutions.

For trade and other receivables, the Group controls these risks by the application of credit approvals, limits and monitoring procedures. The Group also minimises its exposure through analysing the counterparties’ financial condition prior to entering into any services/contracts where appropriate to mitigate credit risk. Trade receivables are monitored on an ongoing basis via Group management reporting procedures. For other financial assets (deposits, cash and bank balances with financial institutions) the Group adopts the policy of dealing only with counterparties of high credibility (i.e. banks and financial institutions).

Exposure to credit risk

At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by:

- The maximum exposure to credit risk is represented by the carrying amount of each financial assets in the statement of financial position after deducting any impairment allowance.

- A nominal amount of RM113,765,744 (2014: RM173,168,188) relating to corporate guarantee provided by the Company to banks on the subsidiaries’ borrowings.

Credit risk concentration profile The Group determines concentration of credit risk by monitoring the trade and other receivables on an ongoing basis.

At the reporting date, approximately 34% (2014: 7%) of the Group trade receivables was from a major customer located in Malaysia.

Financial assets that are neither past due nor impaired.

Informations regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 24. Deposits with banks and other financial institutions, that are neither past due nor impaired are placed with or entered into with reputable financial institutions.

Financial assets that are either past due or impaired.

Information regarding financial assets that are either past due or impaired is disclosed in Note 24.


cont’d


39. FAIR VALUE OF FINANCIAL INSTRUMENTS (a) Set out below, is a comparison by class of the carrying amount and the fair value of the Group’s financial instruments,

other than those with carrying amounts are reasonable approximation of fair value.

Group Company

NoteCarrying amount

Fair value

Carrying amount

Fair value

RM RM RM RM

At 30 June 2015

Financial assets:

Other investments 20 652,445 α - -

Financial liabilities:

Term loans with fixed rate 29 117,435 171,170 - -

Finance lease payables 36(c) 31,085,642 31,064,255 478,512 478,714

At 30 June 2014

Financial assets:

Other investments 20 652,445 α - -

Financial liabilities:

Term loans with fixed rate 29 2,814,599 3,992,579 - -

Finance lease payables 36(c) 39,647,247 39,405,637 706,908 695,114 α It is not practicable to estimate the fair values of the non-current unquoted shares because of the lack of quoted market prices and the

inability to estimate fair value without incurring excessive costs.



39. FAIR VALUE OF FINANCIAL INSTRUMENTS cont’d (b) Determination of fair value

Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value.

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value:

Note

Trade and other receivables 24

Trade and other payables 30

Loan and borrowings: 29

- Term loan except for the following loans:

- RM loan at 7.25% fixed rate

- RM loan at 7.0016% fixed rate

The carrying amount of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date.

The carrying amounts of the current portion of loans and borrowings are reasonable approximations of fair values due to the insignificant impact of discounting.

The fair values of current loans and borrowings are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

Finance lease payables

The fair values of the finance lease payables are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending borrowing or leasing arrangements at the reporting date.

40. FAIR VALUE MEARSUREMENT

Fair value hierarchy

The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: Level 1 - Quoted prices in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs).


cont’d


40. FAIR VALUE MEARSUREMENT cont’d

Fair value hierarchy cont’d

The following table provides the fair value measurement hierarchy of the Group’s and Company’s assets and liabilities.

Quantitative disclosures fair value measurement hierarchy for assets and liabilities as at 30 June 2015 and 2014:

Date of Level 1 Level 2 Level 3 Total

Note Valuation RM RM RM RM

Group

Assets measured at fair value

Financial assets:

Investment securities 25 30 June 2015 8,270,415 - - 8,270,415

Assets for which fair values are disclosed

Investment properties 14 30 June 2015 - - 11,786,000 11,786,000

Liabilities for which fair values are disclosed

Term loans with fixed rate 39(a) 30 June 2015 - 171,170 - 171,170

Finance lease payables 39(a) 30 June 2015 - 31,064,255 - 31,064,255

- 31,235,425 - 31,235,425

Assets measured at fair value

Financial assets:

Investment securities 25 30 June 2014 6,516,215 - - 6,516,215

Assets for which fair values are disclosed

Investment properties 14 30 June 2014 - - 11,786,000 11,786,000


Term loans with fixed rate 39(a) 30 June 2014 - 3,992,579 - 3,992,579

Finance lease payables 39(a) 30 June 2014 - 39,405,637 - 39,405,637

- 43,398,216 - 43,398,216

Company


Finance lease payables 39(a) 30 June 2015 - 478,714 - 478,714

Finance lease payables 39(a) 30 June 2014 - 695,114 - 695,114



41. CAPITAL MANAGEMENT

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholders value. In order to maintain or achieve an optimal capital structure, the Group may adjust the dividend payment, return capital to shareholders, obtain new financing facilities or dispose assets to reduce borrowings.

Management monitors capital based on the Group’s and the Company’s gearing ratio. The Group and the Company are also required by certain banks to maintain a gearing ratio of not exceeding certain percentage varying between 100% and 200%. The Group’s and the Company’s strategies are to maintain gearing ratio of not exceeding 100%.

The gearing ratio is calculated as net debt divided by equity capital. Net debt is calculated as total borrowings, trade and other payables less investment securities, cash and bank balances. Equity capital is equivalent to capital and reserves attributable to owners of the Company.

Group Company

Note 2015 2014 2015 2014

RM RM RM RM

Loans and borrowings 29 81,684,057 118,809,782 2,018,255 3,828,367

Trade and other payables 30 88,227,356 59,076,036 23,317,714 36,098,977

Less:

Investment securities 25 (8,270,415) (6,516,215) - -

Cash and bank balances 28 (90,896,516) (81,592,359) (1,988,880) (804,565)

Net debt 70,744,482 89,777,244 23,347,089 39,122,779

Equity attributable to the owners of the Company 279,370,237 230,919,229 183,484,245 168,423,527

Capital and net debt 350,114,719 320,696,473 206,831,334 207,546,306

Gearing ratio 20.21% 27.99% 11.29% 18.85%

42. SEGMENT INFORMATION

(a) Reporting format

The primary segment reporting format is determined to be business segments as the Group’s risks and rates of return are affected predominantly by differences in the services provided. Secondary information is reported geographically. The operating businesses are organised and managed separately according to the nature of the services provided, with each segment representing a strategic business unit that serves different markets.

(b) Business segments

The Group is organised into three major business segments: (i) Shipping and marine services (ii) Logistic services and equipment rental (iii) Engineering works(iv) Property development

Other business activities include investment holding, property rental, road safety and sales of pallets, none of which are of a sufficient size to be reported separately, are grouped under shipping and marine services.


cont’d


42. SEGMENT INFORMATION cont’d (b) Business segments cont’d

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments.

The directors are of the opinion that all inter-segment transactions have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.

The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other information by business segment:

Shipping, Marine

Services & Others

Logistics Services &

Equipment Rental

Engineering Works

Property Development

Elimination/ Adjustments Note Total

RM RM RM RM RM RM

30 June 2015

REVENUEExternal sales 247,320,426 180,118,729 70,732,381 8,791,523 - 506,963,059 Inter-segment sales 31,241,445 9,018,050 - - (40,259,495) A -

Total revenue 278,561,871 189,136,779 70,732,381 8,791,523 (40,259,495) 506,963,059

RESULTSProfit before tax 8,289,250 49,065,213 14,122,782 5,289,554 (107,128) A 76,659,671 Amortisation 17,503 75,570 - - - A 93,073 Depreciation 7,796,045 11,723,968 354,718 326,767 - A 20,201,498 Finance cost 2,124,368 3,018,284 359,642 1,563,241 (1,327,718) A 5,737,817 Share of results

associates 649,759 - - - - 649,759 Share of results joint

venture - 114,192 - - - 114,192

ASSETSInvestment in

associates 3,685,381 - - - - 3,685,381 Investment in joint

venture - 900,755 - - - 900,755 Addition to non-

current assets 10,514,975 17,897,765 1,038,688 1,003,941 - B 30,455,369 Segment assets 221,165,315 231,136,539 92,898,224 125,972,326 (88,273,780) C 582,898,624

LIABILITIESSegment liabilities 145,903,595 99,006,728 28,421,126 104,886,447 (94,192,471) D 284,025,425



42. SEGMENT INFORMATION cont’d

(b) Business segments cont’d

The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other information by business segment: cont’d

Shipping, Marine

Services & Others

Logistics Services &

Equipment Rental

Engineering Works

Property Development

Elimination/ Adjustments Note Total

RM RM RM RM RM RM

30 June 2014

REVENUE

External sales 233,144,770 147,217,951 73,767,842 3,432,299 - 457,562,862

Inter-segment sales 21,900,066 10,904,791 - - (32,804,857) A

Total revenue 255,044,836 158,122,742 73,767,842 3,432,299 (32,804,857) 457,562,862

RESULTS

Profit/(loss) before tax 6,907,687 32,118,332 9,688,183 2,309,086 - A 51,023,288

Amortisation 50,074 - - - - A 50,074

Depreciation 6,892,338 10,587,225 408,186 112,921 - A 18,000,670

Finance cost 2,643,655 3,428,366 116,422 1,255,730 (1,044,276) A 6,399,897

Impairment of intangible assets (539,573) - 539,573 - - -

Share of results associates 154,046 - - - - 154,046

Share of results joint venture - (286,551) - - - (286,551)

ASSETS

Investment in associates 3,106,085 - - - - 3,106,085

Investment in joint venture - 786,563 - - - 786,563

Addition to non-current assets 9,765,469 13,833,419 3,659,258 11,256,620 - B 38,514,766

Segment assets 190,982,549 199,142,968 80,920,300 101,686,326 (86,321,960) C 486,410,183

LIABILITIES

Segment liabilities 129,834,509 92,043,771 23,735,373 84,292,235 (92,629,701) D 237,276,187


cont’d


42. SEGMENT INFORMATION cont’d

(b) Business segments cont’d

A Elimination of inter-segment unrealised profit at consolidation.

B Additions to non-current assets consists of:

2015 2014

RM RM

Property, plant and equipment (Note 13) 25,740,262 29,037,170

Prepaid land lease payments (Note 15) 4,300,000 -

Land held for development (Note 23(a)) 415,107 9,477,596

30,455,369 38,514,766 C The following items deducted from segment assets to arrive at total assets reported in the consolidated statement

of financial positions.

2015 2014

RM RM

Inter-segment assets elimination (88,273,780) (86,321,960)

D The following items are deducted from to segment liabilities to arrive at total liabilities reported in the consolidated statement of financial position.

2015 2014

RM RM

Inter-segment liabilities elimination (94,192,471) (92,629,701)

(c) Geographical segments

Sales to external customers disclosed in geographical segments are based on the geographical location of its customers. The Group’s three business segments operate in two main geographical areas:

Total Revenue From External Customers

2015 2014

RM RM

(i) Malaysia 506,108,924 443,433,559

(ii) Singapore 854,135 14,129,303

Consolidated 506,963,059 457,562,862



43. SUBSEQUENT EVENTS (a) On 5 August 2015, a wholly owned subsidiary of the Company, Harbour-Link Navigation Sdn. Bhd. (“HLN”) has

subscribed 80% equity interest in Harbour Zenith Sdn. Bhd. (“HZSB”) and 80% equity interest in Harbour Ruby Sdn. Bhd. (“HRSB”), for a total cash consideration of RM8,000 each. The intended principal activity of both subsidiaries is ship owning and provision of ship management services.

(b) On 18 August 2015, a wholly owned subsidiary of the Company, Harbour-Link (M) Sdn. Bhd. (“HLM”) has acquired 50% equity interest in Serimaju Konsortium Sdn. Bhd. (“SKSB”) for a total cash consideration of RM1. The intended principal activity is provision of logistic for mineral and bulk materials.

Subsequently on 24 August 2015, HLM has subsribed for 219,999 ordinary shares of RM1 each in SKSB, representing 55% of the enlarged issued share capital of SKSB for a cash consideration of RM219,999. Following the subscription, SKSB becomes a 55% owned subsidiary of HLM.


cont’d


44. SUPPLEMENTARY INFORMATION BREAKDOWN OF RETAINED EARNINGS INTO REALISED AND UNREALISED

The breakdown of the retained earnings of the Group and accumulated losses of the Company as at 30 June 2015 into realised and unrealised earnings is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1 - Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants.

Group Company

2015 2014 2015 2014

RM RM RM RM

Total retained earnings of the Company and the subsidiaries

Realised 237,959,356 192,885,879 1,541,043 (13,513,189)

Unrealised (7,239,851) (10,881,678) (56,800) (63,286)

230,719,505 182,004,201 1,484,243 (13,576,475)

Total share of retained earnings from associates and joint venture 2,223,936 1,570,448 - -

Less: Consolidated adjustments (74,252,170) (72,233,669) - -

Retained earnings as per financial statements 158,691,271 111,340,980 1,484,243 (13,576,475)


Analysis of ShareholdingsAs at 8 October 2015

Authorised Share Capital : RM500,000,000.00 divided into 500,000,000 ordinary shares of RM1.00 each

Issued and Paid-Up Capital : RM182,000,002.00 divided into 182,000,002 ordinary shares of RM1.00 each

Class of Shares : Ordinary Shares of RM1.00 each fully paid

Voting Rights : One vote per ordinary share

SIZE OF SHAREHOLDINGS AS AT 8 OCTOBER 2015

Size of Shareholdings No. of

Shareholders Total

Holdings %

Less than 100 shares 13,715 317,735 0.18

100 - 1,000 shares 1,974 616,078 0.34

1,001 - 10,000 shares 976 4,082,941 2.24

10,001 - 100,000 shares 275 7,793,778 4.28

100,001 - below 5% of issued shares 105 70,704,350 38.85

5% and above of issued shares 6 98,485,120 54.11

Total 17,051 182,000,002 100.00

DIRECTORS’ SHAREHOLDINGS AS AT 8 OCTOBER 2015

Direct Interest Indirect Interest

No. Name Shares % Shares %

1. Yong Piaw Soon 11,250,545 6.18 96,734,575 53.15*

2. Wong Siong Seh 7,014,300 3.85 96,734,575 53.15*

3. Dato’ Toh Guan Seng 2,300,000 1.26 - -

4. Hii Kwong Wui 1,470,000 0.81 - -

5. Lee Seng Chiong 1,383,000 0.76 - -

6. Lau Sii Hin 750,000 0.41 - -

7. Dato’ Mohamed Salleh Bin Bajuri 409,832 0.23 - -

8. Datuk Pau Chiong Ung - - - -

9. Bin Lay Thiam - - - -


SUBSTANTIAL SHAREHOLDERS AS AT 8 OCTOBER 2015

Direct Interest Indirect Interest

No. Name Shares % Shares %

1. Enricharvest Sdn. Bhd. 57,388,475 31.53 - -

2. United Joy Sdn. Bhd. 39,346,100 21.62 - -

3. Yong Piaw Soon 11,250,545 6.18 96,734,575 53.15

4. Wong Siong Seh 7,014,300 3.85 96,734,575 53.15

Note

* Deemed interest by virtue of him being substantial shareholder in Enricharvest Sdn. Bhd. & United Joy Sdn. Bhd.

THIRTY (30) LARGEST SHAREHOLDERS AS AT 8 OCTOBER 2015

No. Name of Shareholder No. of

Shares Held %

1. KENANGA NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR UNITED JOY SDN BHD

21,666,100 11.90

2. KENANGA NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR ENRICHARVEST SDN BHD

21,572,000 11.85

3. HLIB NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR ENRICHARVEST SDN BHD

18,364,700 10.09

4. UNITED JOY SDN. BHD. 14,180,000 7.79

5. ENRICHARVEST SDN. BHD. 12,951,775 7.12

6. KENANGA NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR YONG PIAW SOON

9,750,545 5.36

7. KENANGA NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR WONG SIONG SEH

4,897,500 2.69

8. KENANGA NOMINEES (ASING) SDN BHDPLEDGED SECURITIES ACCOUNT FOR STATE FINANCE INTERNATIONAL LIMITED

4,674,500 2.57

9. ENRICHARVEST SDN. BHD. 4,500,000 2.47

10. LEE POH IM 4,025,200 2.21

11. UNITED JOY SDN. BHD. 3,500,000 1.92

12. HSBC NOMINEES (TEMPATAN) SDN BHDHSBC (M) TRUSTEE BHD FOR MANULIFE INVESTMENT PROGRESS FUND

2,627,100 1.44

13. CITIGROUP NOMINEES (ASING) SDN BHDEXEMPT AN FOR CITIBANK NEW YORK (NORGES BANK 14)

2,505,700 1.38

14. BRIGHT JOY LIMITED 2,367,300 1.30

15. TOH GUAN SENG 2,300,000 1.26

16. KENANGA NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR WONG SING KUOK

2,179,000 1.20

Analysis of ShareholdingsAs at 8 October 2015

cont’d


THIRTY (30) LARGEST SHAREHOLDERS AS AT 8 OCTOBER 2015 cont’d

No. Name of Shareholder No. of

Shares Held %

17. CITIGROUP NOMINEES (TEMPATAN) SDN BHD KUMPULAN WANG PERSARAAN (DIPERBADANKAN) (RHB INV)

1,758,400 0.97

18. STATE FINANCE INTERNATIONAL LIMITED 1,552,700 0.85

19. CIMSEC NOMINEES (TEMPATAN) SDN BHDCIMB BANK FOR WONG SIONG SEH

1,500,000 0.82

20. ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR YONG PIAW SOON

1,500,000 0.82

21. KENANGA NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR HII KWONG WUI

1,470,000 0.81

22. KENANGA NOMINEES (ASING) SDN BHDPLEDGED SECURITIES ACCOUNT FOR BRIGHT JOY LIMITED

1,454,000 0.80

23. KENANGA NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR WONG PIK NGIIK

1,260,300 0.69

24. KENANGA NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR LAU CHII HUNG

1,235,000 0.68

25. UOB KAY HIAN NOMINEES (ASING) SDN BHDEXEMPT AN FOR UOB KAY HIAN PTE LTD

1,000,160 0.55

26. AMANAHRAYA TRUSTEES BERHADPUBLIC ISLAMIC TREASURES GROWTH FUND

995,000 0.55

27. AFFIN HWANG NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR LEE SENG CHIONG

945,000 0.52

28. MAYBANK NOMINEES (TEMPATAN) SDN BHDMAYBANK TRUSTEES BERHAD FOR MANULIFE INVESTMENT BALANCED FUND

820,000 0.45

29. UNIVERSAL TRUSTEE (MALAYSIA) BERHADPACIFIC PREMIER FUND

802,400 0.44

30. KENANGA NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR WONG SING KUOK

786,800 0.43

Analysis of ShareholdingsAs at 8 October 2015cont’d


List of PropertiesAs at 30 June 2015

Description Tenure Existing use

Land area/Built-up

area

Approximateage of

building

Net book value

at 30 June2015

(RM’000)Date of

acquisition

Harbour-Link Group Bhd

Unit 6-12, Lot 2646, Parkcity Commerce Square,Jalan Tun Ahmad Zaidi, Bintulu, Sarawak

Leasehold landexpiring on18.02.2057

Office 2,561.7 sq metres

8 years 5,612 18 August 2006

Harbour-Link (M) Sdn Bhd

Lot 3064, Block 26, Kemena Land District, Bintulu, Sarawak


Workshop, storage

area and warehouse

20,240.0 sq metres

13 years 3,541 20 February 1998

Lot 3065, Block 26, Kemena Land District, Bintulu Sarawak


Workshop, storage

area and warehouse

8,096.0 sq metres

13 years 467 29 March 2000



Workshop, storage

area and warehouse

12,139.0 sq metres

13 years 1,222 2 August 2002

Lot 566, Block 4, Muara Tebas Land District, Kuching, Sarawak

Leasehold land expiring on31.12.2036

Container storage yard

28,730.0 sq metres

8 years 1,497 28 January 2004


Leasehold land60 years from

the date of registration of

the lease

Storage yard rented

to 3rd party

5,798 sq metres

6 year 1,935 11 March 2009

Harbour Agencies (Sarawak) Sdn Bhd

Lot 1684, Block 11, Seduan Land District, Sibu, Sarawak


VacantAgriculture

land

9,220.0sq metres

- 550 2 October 2003

Harbour Services (Miri) Sdn Bhd

Lot 2132, Kuala Baram Land District, Miri, Sarawak


Single storeywarehouseindustrial building

5,260.0 sq metres

9 years 552 6 February 2004

Harbour-Link Logistics Sdn Bhd



VacantIndustrial land

39,580.0 sq metres

- 8,741 26 October 2010

Lot 19, Industrial Zone 4, Kota Kinabalu Industrial ParkJalan Sepanjar, Kota Kinabalu, Sabah


Workshop andstorage yard

12,205.8 sq metres

8 years 4,722 11 July 2005


List of PropertiesAs at 30 June 2015cont’d

Description Tenure Existing use

Land area/Built-up

area

Approximateage of

building

Net book value

at 30 June 2015

(RM’000)Date of

acquisition

Eastern Soldar Engineering & Construction Sdn Bhd

Lot No. 21667, Pekan of Bukit Kepayang, District of Seremban, Negeri Sembilan

Freehold Factory and office

10,219.0sq metres

21 years 4,403 10 November

1992

PT No. 11643, H.S.(D): 215207Bandar Sri SendayanSeremban, Negeri Sembilan

Freehold Industrial Vacant land

28,329.0 sq metres

- 8,202 22 May 2013

Sarawak Edible Oils Sdn Bhd

Lot 1218, Block 20, Kemena Land Distric, Bintulu, Sarawak.

Leasehold landTenure 60 years

Vacant/ Industrial Land

397,041.5sq metres

- 44,846 26 April 2010

Lot 1218, Block 20, Kemena Land Distric, Bintulu, Sarawak.

Leasehold landTenure 60 years

Under development

103,738.8 sq metres

- 65,775 26 April 2010

Harbour Services Corporation Sdn Bhd

PN 5048, Lot 205310934 at Kg. Bukit Kalam, Wilayah Persekutuan Labuan


Vacant Land 17,377.2sq metres

- 4,257 6 January 2015



NOTICE IS HEREBY GIVEN THAT the Thirteenth Annual General Meeting (“AGM”) of the Company will be held at Millennium Ballroom 3, Parkcity Everly Hotel, Jalan Tun Razak, 97000 Bintulu, Sarawak on Monday, 23 November 2015 at 8.30 a.m. for the purpose of transacting the following businesses, to pass as Ordinary Resolutions:-

AGENDA

1. To receive the Audited Financial Statements for the financial year ended 30 June 2015 together with the Directors’ and Auditors’ Reports thereon.

2. To approve a first and final single tier dividend of 5.5 sen per ordinary share of RM1.00 each for the

financial year ended 30 June 2015.

3. To approve the Directors’ fees for the financial year ended 30 June 2015.

4. To re-elect the following Directors retiring in accordance with the Company’s Articles of Association and being eligible, offer themselves for re-election:-

(i) Mr. Wong Siong Seh (Article 103)(ii) Dato’ Toh Guan Seng (Article 103)(iii) Mr. Hii Kwong Wui (Article 103)(iv) Datuk Pau Chiong Ung (Article 109)

5. To re-appoint Messrs Ernst & Young as Auditors of the Company to hold office until the conclusion of the next AGM and to authorise the Board of Directors to fix their remuneration.

AS SPECIAL BUSINESSTo consider, and if thought fit, to pass the following as ordinary resolutions:-

6. RETENTION OF INDEPENDENT DIRECTOR

“THAT Dato’ Mohamed Salleh Bin Bajuri be retained as Independent Non-Executive Director pursuant to the Malaysian Code on Corporate Governance 2012.”

7. AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby empowered to issue shares in the Company, at any time until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued does not exceed ten per centum (10%) of the issued share capital of the Company at the time of submission to the authority and THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

8. Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature (“Proposed Shareholders’ Mandate”)

“THAT approval be and is hereby given for the Company and its subsidiary (“HLG Group”) to enter into recurrent related party transactions of a revenue or trading nature as set out in Section 2.3 of the Circular to Shareholders, which are necessary for HLG Group’s day-to-day operations.

Please refer to Note A

(Resolution 1)

(Resolution 2)

(Resolution 3)(Resolution 4)(Resolution 5)(Resolution 6)

(Resolution 7)

(Resolution 8)

(Resolution 9)

(Resolution 10)


Notice of Annual General Meetingcont’d

THAT the HLG Group be and is hereby authorised to enter into the recurrent transactions with the related parties mentioned therein provided that:-

a) the transactions are in the ordinary course of business and on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company; and

b) the disclosure will be made in the Annual Report of the breakdown of the aggregate value of the Recurrent Related Party Transactions conducted pursuant to the Proposed Shareholders’ Mandate during the financial year based on the type of Recurrent Related Party Transactions made, the names of the related parties involved in each type of Recurrent Related Party Transactions and their relationships with the Company.

THAT authority conferred shall continue to be in force until :-

i) the conclusion of the next AGM of the Company following the forthcoming Thirteenth AGM at which the Proposed Shareholders’ Mandate is approved, at which time it will lapse, unless by a resolution passed at the AGM, the mandate is again renewed;

ii) the expiration of the period within which the next AGM of the Company is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (the “Act”) (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or

iii) revoked or varied by resolution passed by the shareholders in general meeting,

whichever is earlier; AND THAT the Directors of the Company be and is hereby authorised to complete and do all such

acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the Proposed Shareholders’ Mandate.”

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

Subject to the approval of the shareholders, a first and final single-tier dividend of 5.5 sen per ordinary share of RM1.00 each for the financial year ended 30 June 2015 will be paid on 18 December 2015 to Depositors registered in the Record of Depositors at the close of business at 5.00 p.m. on 30 November 2015. A depositor shall qualify for entitlement only in respect of:

a) Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 30 November 2015 in respect of ordinary transfers; and

b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad.

By Order of the Board

LIM SECK WAH (MAICSA NO. 0799845)M. CHANDRASEGARAN A/L S. MURUGASU (MAICSA NO. 0781031) Company SecretariesSarawakDated: 30 October 2015


Notice of Annual General Meetingcont’d

Notes:-

A. This Agenda item is meant for discussion only as the provision of the Company’s Articles of Association do not require a formal approval of the shareholders and hence, is not put forward for voting.

1. For the purpose of determining a member who shall be entitled to attend, speak and vote at the AGM, the Company shall be requesting the Record of Depositors as at 17 November 2015. Only a depositor whose name appears on the Record of Depositors as at 17 November 2015 shall be entitled to attend the said meeting or appoint proxies to attend, speak and vote on his/her stead.

2. A member entitled to attend and vote at a meeting of the Company is entitled to appoint up to two (2) proxies to attend. A proxy may but need not be a member of the Company and the provisions of Section 149(1) (a) and (b) of the Companies Act, 1965 shall not apply. Where a member appoints more than one proxy, the appointment shall be invalid unless he/she specifies the proportion of his/her holdings to be represented by each proxy.

3. (i) Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy but not more than two (2) proxies in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

(ii) Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

4. The instrument appointing a proxy, in the case of an individual, shall be signed by the appointer or by his attorney duly authorised in writing, and in the case of a corporation, shall be executed under its Common Seal or under the hand of an officer or attorney of the corporation duly authorised.

5. The instrument appointing the proxy, with the power of attorney or other authority (if any) under which it is signed or a notarially certified or office copy of such power of attorney, must be deposited at the Registered Office of the Company at Wisma Harbour, Parkcity Commerce Square, Jalan Tun Ahmad Zaidi, 97000 Bintulu, Sarawak not less than forty-eight (48) hours before the time set for holding the meeting or any adjournment thereof.

Explanatory note on Special Business:-

i) Ordinary Resolution 8 – Authority to continue as Independent Non-Executive Director.

YBhg Dato’ Mohamed Salleh Bin Bajuri has served the Board for a consecutive term of nine (9) years. The Nomination Committee has assessed his independence and has based on the following attributes recommended him to continue as Independent Non-Executive Director:-

• havein-depthunderstandingofthebusinessoftheGroupandcouldprovidetheBoardvaluableandinsightadvice;• activelyparticipatedinBoarddeliberationanddecisionmakinginanobjectivemanner;and• upholdsindependentjudgementandtherearenocircumstancesandrelationshipsthatmayhamperhisindependence.

ii) Ordinary Resolution 9 – Authority under Section 132D of the Companies Act, 1965 for the Directors to issue shares

The effect of the resolution under item 7 of the agenda, if passed, will give the flexibility and authority to the Directors of the Company, from the date of the forthcoming Thirteenth AGM, to issue and allot new shares in the Company up to and not exceeding in total 10% of the issued and paid-up share capital of the Company as at the date of the Thirteenth AGM, for such purposes as they consider would be in the interest of the Company. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next AGM of the Company following the forthcoming Thirteenth AGM.

The mandate obtained last year was not exercised and hence no proceed was raised therefrom. The Board would like to renew the mandate to enable the Directors of the Company to issue and allot shares at any time to such persons in their absolute discretion without convening a general meeting as it would be both time and cost consuming to organise a general meeting. The renewed authority for allotment of shares will provide flexibility to the Company for the allotment of shares for the purpose of funding future investment, working capital and/or acquisitions, if there is such investment opportunity arises during the financial year 2016.

iii) Ordinary Resolution 10 – Proposed New Shareholders’ Mandate

The explanatory note on Ordinary Resolution 10 is set out in the Circular to Shareholders dated 30 October 2015.


This page has been intentionally left blank.

FORM OF PROXY(Before completing this form please refer to the notes below)

I/We I/C No./Co. No./CDS A/C No. (Full name in block letters)

of (Full address)

being a member/members of HARBOUR-LINK GROUP BERHAD hereby appoint the following person(s):-

Name of proxy, NRIC No. & Address No. of shares to be represented by proxy

1.

2.

or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Thirteenth Annual General Meeting of the Company to be held at Millennium Ballroom 3, Parkcity Everly Hotel, Jalan Tun Razak, 97000 Bintulu, Sarawak on Monday, 23 November 2015 at 8.30 a.m. My/our proxy/proxies is/are to vote as indicated below:-

FIRST PROXY SECOND PROXY

Ordinary Resolutions FOR AGAINST FOR AGAINST

1 - Single tier 5.5 sen dividend

2 - Directors’ fees

3 - Re-election of Mr Wong Siong Seh

4 - Re-election of Dato’ Toh Guan Seng

5 - Re-election of Mr Hii Kwong Wui

6 - Re-election of Datuk Pau Chiong Ung

7 - Re-appointment of Messrs Ernst & Young

8 - Retention of Independent Director

9 - Section 132D

10 - Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature.

(Please indicate with a “√” or “X” in the space provided how you wish your vote to be cast. If no instruction as to voting is given, the proxy will vote or abstain from voting at his/her discretion. The first named proxy shall be entitled to vote on a show of hands).

Dated this day of 2015 Signature/Common SealNotes:-1. For the purpose of determining a member who shall be entitled to attend, speak and vote at the AGM, the Company shall be requesting the Record of Depositors

as at 17 November 2015. Only a depositor whose name appears on the Record of Depositors as at 17 November 2015 shall be entitled to attend the said meeting or appoint proxies to attend, speak and vote on his/her stead.

2. A member entitled to attend and vote at a meeting of the Company is entitled to appoint up to two (2) proxies to attend. A proxy may but need not be a member of the Company and the provisions of Section 149(1) (a) and (b) of the Companies Act, 1965 shall not apply. Where a member appoints more than one proxy, the appointment shall be invalid unless he/she specifies the proportion of his/her holdings to be represented by each proxy.

3. (i) Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

(ii) Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

4. The instrument appointing a proxy, in the case of an individual, shall be signed by the appointer or by his attorney duly authorised in writing, and in the case of a corporation, shall be executed under its Common Seal or under the hand of an officer or attorney of the corporation duly authorised.

5. The instrument appointing the proxy, with the power of attorney or other authority (if any) under which it is signed or a notarially certified or office copy of such power of attorney, must be deposited at the Registered Office of the Company at Wisma Harbour, Parkcity Commerce Square, Jalan Tun Ahmad Zaidi, 97000 Bintulu, Sarawak not less than forty-eight (48) hours before the time set for holding the meeting or any adjournment thereof.

No. of ordinary shares heldHARBOUR-LINK GROUP BERHAD(Company No: 592902-D)(Incorporated in Malaysia)

Please AffixStamp

The Company SecretaryHARBOUR-LINK GROUP BERHAD (592902-D)

Wisma Harbour, Parkcity Commerce SquareJalan Tun Ahmad Zaidi97000 Bintulu, Sarawak

Malaysia

Fold along this line (2)

Fold along this line (1)

Fold This Flap For Sealing

BRANCHES LIST

HEAD OFFICE:Wisma Harbour, Parkcity Commerce Square, Jalan Tun Ahmad Zaidi, 97000 Bintulu, Sarawak.Tel : +60-86-318 998Fax : +60-86-332 429Email : [email protected] : www.harbour.com.my

BRUNEITel : +(673) 2342 227 Fax : +(673) 2342 226Email : [email protected]

GUANG ZHOU, CHINATel : +(86-20) 8760 3907 Fax : +(86-20) 8760 3910Email : [email protected]

HONG KONGTel : +(852) 2850 6081 Fax : +(852) 2850 6298Email : [email protected]

JOHOR BAHRU Tel : +60-7-3562 800 Fax : +60-7-3532 810Email : [email protected]

KLIA (AIR FREIGHT)Tel : +60-3-8778 8918 Fax : +60-3-8778 8912Email : [email protected]

KOTA KINABALUTel : +60-88-267 225 Fax : +60-88-261 225Email : [email protected]

KOTA KINABALU (CONTAINER DEPOT)Tel : +60-88-492 790 Fax : +60-88-492 775Email : ro�[email protected]

KOTA KINABALU (CONTAINER LINER SERVICES)Tel : +60-88-233 691 Fax : +60-88-232 692Email : [email protected]

KUCHINGTel : +60-82-341 212 Fax : +60-82-341 313Email : [email protected]

KUCHING (CONTAINER LINER SERVICES)Tel : +60-82-339 600 Fax : +60-82-480 600Email : [email protected]

LABUAN Tel : +60-87-431 699Fax : +60-87-427 699Email : [email protected]

MIRITel : +60-85-420 225 Fax : +60-85-420 270Email : [email protected]

PENANGTel : +60-4-3249 453 Fax : +60-4-3249 454Email : [email protected]

PORT KLANGTel : +60-3-3001 3018 Fax : +60-3-3166 7013Email : [email protected]

PORT KLANG (CONTAINER LINER SERVICES)Tel : +60-3-3325 2010 Fax : +60-3-3325 2011Email : [email protected]

SANDAKANTel : +60-89-225 561 Fax : +60-89-225 563Email : [email protected]

SEREMBAN (ENGINEERING DIVISION)Tel : +60-6-7646 699 Fax : +60-6-7627 500Email : [email protected]

SIBUTel : +60-84-341 558 Fax : +60-84-341 557Email : [email protected]

SINGAPORE (CONTAINER LINER SERVICES)Tel : +65-6224 6828 Fax : +65-6224 3834Email : [email protected]

TAWAUTel : +60-89-752 311 Fax : +60-89-752 313Email : [email protected]

TG. KIDURONGTel : +60-86-253 811 Fax : +60-86-251 676Email : [email protected]

www.harbour.com.my


Wisma Harbour, Parkcity Commerce Square,Jalan Tun Ahmad Zaidi, 97000 Bintulu, Sarawak, Malaysia.Tel: 086-318 998 Fax: 086-332 429 E-mail: [email protected]

HA

RB

OU

R-L

INK

GR

OU

P B

ER

HA

D (592902-D

)A

NN

UA

L R

EP

OR

T 2015


THINK FORWARD,MOVE FORWARD

Annual Report 2015

THINK FORWARD, MOVE FORWARD · Harbour-Link Group and his active involvement in the shipping and...

Documents

Transcript of THINK FORWARD, MOVE FORWARD · Harbour-Link Group and his active involvement in the shipping and...