penyata pengerusi - malaysiastock.biz board of directors chairman/ non-independent non-executive...

2 Corporate Profile

3 Corporate Information

4 Corporate Structure

5 Board of Directors’ Profile

9 Report of the Audit Committee

14 Statement on Corporate Governance

24 Additional Compliance Statement

26 Statement on Internal Control

28 Group 5-Year Financial Highlights

30 Chairman’s Statement / Penyata Pengerusi

34 Group Corporate Social Responsibility

36 Analysis of Shareholdings

39 Directors’ Report and Audited Financial Statements

143 List of Properties

146 Notice of Annual General Meeting

151 Statement Accompanying Notice of Annual General Meeting

• FormofProxy

MTD ACPI Engineering Berhad (MTDACPI), which changed its name on 8 May 2007, was previously known as ACP Industries Berhad and was listed on the Main Board of Bursa Malaysia Securities Berhad on 3 January 1995.

MTDACPI is an investment holding company with an extensivetrackrecordintheconstructionofmountainroads, highways, bridges, building geotechnical works, erosion control and highway maintenance. MTDACPI is also involved in the manufacturing of precast concrete products for infrastructure and buildings, and in Industrialised Building System (IBS).

The Group is currently involved in the construction of East Coast Expressway Phase 2 (ECE 2) Bukit Besi-Bukit Payung Package 10. Some of the past completed works include ECE Phase 1, Simpang Pulai-Lojing-Kuala Berang Package 2, upgrading of Kuala Lumpur-Karak Highway, improvement on the Kuala Lumpur-Seremban ExpresswayandrehabilitationworksatKualaKangsar-Gerik Package 1 Part A.

The Manufacturing division supplies a diversified type of precast concrete products for various projects including the Muar by-pass in Johor, Kuala Kurau Twin

Deck Viaduct in Perak, Kuala Lumpur’s Stormwater Management and Road Tunnel (SMART), KTM Rawang-Ipoh Electrified Double Tracking, Singapore’s MRT and Deep Tunnel Sewerage systems.

The Group’s expertise lies in precast constructionmethods, specialising in installationof Segmental BoxGirders (SBG), which has been implemented within and outside of Malaysia. Successful SBG projects that had been completed include the Kuala Lumpur LRT (Putra), Malaysia-Singapore Second Crossing and Middle Ring Road 2 (Package 11) while current projects are the Second Penang Bridge and Interchanges to the New Istana Negara projects. Internationally, two major completed SBG projects, which had received CIDB MCI Excellent Awards for International Achievement in2009, include the improvement to Jamarat Bridge in Saudi Arabia and Delhi Metro of India. The Group has a regional presence, spanning from Malaysia to Southeast Asia and the Middle East.

MTDACPI, being part of the MTD Group, is one of Malaysia’s major infrastructure companies involved in privatised infrastructure development, construction and engineering, property development and other construction related activities.

Corporate Prof i le

M T D A C P I E N G I N E E R I N G B E R H A D

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BOARD OF DIRECTORSCHAIRMAN/NON-INDEPENDENT NON-EXECUTIVE DIRECTORDato’ Dr. Nik Hussain bin Abdul Rahman

PRESIDENT & CHIEF EXECUTIVE OFFICER/NON-INDEPENDENT EXECUTIVE DIRECTORDato’ Azmil Khalili bin Dato’ Khalid

SENIOR INDEPENDENT NON-EXECUTIVE DIRECTORDato’ Ir. A. Rashid bin Omar

INDEPENDENT NON-EXECUTIVE DIRECTORDato’ Ir. Kalid bin AliasNik Din bin Nik Sulaiman

NON-INDEPENDENT NON-EXECUTIVE DIRECTORLee Leong Yow

NON-INDEPENDENT EXECUTIVE DIRECTORKeith George CowlingMd. Shukor bin Mohamed

AUDIT COMMITTEEDato’ Ir. A. Rashid bin Omar, ChairmanDato’ Ir. Kalid bin AliasNik Din bin Nik Sulaiman

NOMINATION COMMITTEEDato’ Ir. A. Rashid bin Omar, ChairmanDato’ Ir. Kalid bin AliasNik Din bin Nik Sulaiman

REMUNERATION COMMITTEEDato’ Ir. A. Rashid bin Omar, ChairmanDato’ Dr. Nik Hussain bin Abdul RahmanDato’ Ir. Kalid bin Alias

COMPANY SECRETARIESChan Bee KuanLee Poh Yean

REGISTERED OFFICE1, Jalan Batu Caves68100 Batu CavesSelangor Darul EhsanTel : 03-6195 1111Fax : 03-61880101Website : www.mtdgrp.com

SHARE REGISTRARMega Corporate Services Sdn BhdLevel 15-2, Faber Imperial CourtJalan Sultan Ismail50250 Kuala LumpurTel : 03-2692 4271Fax : 03-27325388

AUDITORSErnst & YoungChartered AccountantsLevel 23A, Menara MileniumJalan DamanlelaPusat Bandar Damansara50490 Kuala Lumpur

SOLICITORSLee Hishammuddin Allen & Gledhill

PRINCIPAL BANKERSCIMB Bank BerhadMalayan Banking BerhadAmbank (M) BerhadHong Leong Bank BerhadRHB Bank Berhad

STOCK EXCHANGE LISTINGMain Market, Bursa Malaysia Securities BerhadStock Name : MTDACPIStock Code : 5924

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Corporate I nformation

100%

100%

100%

100%

100%

100%

49%

100%

100%

100%

49%

100%

60%

40%

100%

100%

100%

100%

100%

100%

100%


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Corporate Struc tureas at 29 July 2011

CONSTRUCTION

MTD CONSTRUCTION SDN BHD

ACP-DMT SDN BHD

MTD ACP PRECAST SDN BHD

ACP (TRACKS) SDN BHD

GANDAAN UNIK SDN BHD

PERSYS ENGINEERING SDN BHD

ACP TECHNOLOGIES SDN BHD

ACPI ENGINEERING SDN BHD

MTD CONSTRUCTION (PHILIPPINES), INC

INTRAXIS ENGINEERING SDN BHD

ASSOCIATED CONCRETE PRODUCTS (MALAYSIA) SDN BHD

MODAL EHSAN SDN BHD

ASC TILES SDN BHD

PERSYS SDN BHD

ACP MARKETING SDN BHD

PRECAST SOLUTIONS SDN BHD

ASSOCIATED CONCRETE PRODUCTS (SABAH) SDN BHD

ASC ENGINEERING SDN BHD

ACPI HOLDING LIMITED

ASCE CONSTRUCTION LIMITED

ASC ENGINEERING SDN BHD LTD

MANUFACTURING

* Listed on Main Market, Bursa Malaysia Securities Berhadu Operating companies onlyu Shareholding percentage is based on ordinary share capital only

PROPERTY DEVELOPMENT

*

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Dato’ Dr. Nik Hussain bin Abdul Rahman, a Malaysian, aged 75, was appointed as a Director of MTD ACPI Engineering Berhad (MTDACPI) on 31 October 2003 and as Executive Chairman inJanuary 2004. Subsequently, he was redesignated as Chairman on 26 February 2007. Dato’ Dr. Nik Hussain is also the Advisor of the Management Committee and a member of the Remuneration Committee.

Dato’ Dr. Nik Hussain holds a Bachelor in Dental Surgery from the University of Singapore. He served the Malaysian civil service as Deputy Minister of Works and Deputy Minister of Telecommunications and Posts from 1978 to 1984 before venturing into the corporate sector. Dato’ Dr. Nik Hussain is the Group Executive Chairman of MTD Capital Bhd, the holdingcompany of MTDACPI and the Chairman of MTD InfraPerdana Bhd and Metacorp Berhad, both are subsidiaries of MTD Capital Bhd. Dato’ Dr. Nik Hussain is also a director of ANIH Berhad and several private limited companies.

Dato’ Azmil Khalili bin Dato’ Khalid, a Malaysian, aged 51, was appointed to the Board of MTDACPI on 31 October 2003 as Director.Subsequently,Dato’AzmilwasredesignatedasExecutiveVice Chairman and Group Managing Director on 30 January 2004 and 15 August 2006 respectively. Dato’ Azmil is also the Chairman of the Management Committee.

Dato’ Azmil graduated with a Bachelor’s Degree in Civil Engineering and subsequently with a Master in Business Administration. He began his career with a United Kingdom company, Tarmac National Construction and upon his return to Malaysia worked for Trust International Insurance and Citibank NA.

Dato’ Azmil joined MTD Group in 1993 as General Manager, Corporate Planning. In 1996, Dato’ Azmil assumed the helm as Group Managing Director of MTD Capital Bhd and was redesignated as President & Chief Executive Officer on 1 June2009.InhiscapacityasPresident&ChiefExecutiveOfficerofMTDCapital Bhd, he concurrently holds the same position in MTDACPI and is the Chairman of foreign subsidiaries of MTD Capital Bhd namely, MTD Walkers PLC, a company listed on the Colombo StockExchangeinRepublicofSriLankaandSouthLuzonTollwayCorporation, Philippines. Dato’ Azmil held directorships in other public companies namely, MTD InfraPerdana Bhd and Metacorp Berhad, both are subsidiaries of MTD Capital Bhd. Apart from MTD Group, Dato’ Azmil is the Chairman and Independent Non-Executive Director of Daya Materials Berhad and a Director ofANIH Berhad. Dato’ Azmil is a director of Environment Idaman Sdn Bhd, a solid waste concession company; and a Trustee of the Perdana Leadership Foundation. Dato’ Azmil also sits on the board of several private limited companies.

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B oard of Direc tors’ Prof i le

DATO’ DR. NIK HUSSAIN BIN ABDUL RAHMANChairman

Non-Independent Non-Executive Director

DATO’ AZMIL KHALILI BIN DATO’ KHALID President & Chief Executive Officer

Non-Independent Executive Director

Dato’ Ir. A. Rashid bin Omar, a Malaysian, aged 62, was appointed the Independent Non-Executive Director of MTDACPI on 15August 2006 and was redesignated as Senior Independent Non-ExecutiveDirectoron3June2008.Dato’ Ir.A.Rashid isalsotheChairman of the Audit Committee, the Nomination Committee and the Remuneration Committee.

Dato’ Ir. A. Rashid holds a Bachelor in Civil Engineering from the University of Glasgow, Scotland and has a Diploma from University Technology Malaysia (then known as the National Institute Technology). Starting his career as a civil engineer on the East-West Highway Project in Grik, Perak, Dato’ Ir. A. Rashid then served with the Public Works Department (PWD) Malaysia in several positions including District Engineer Kerian, PWD Perak (1975-1977),SeniorExecutiveEngineer,HighwayPlanningUnit,Ministryof Works Malaysia (1977-1978), Deputy Director of Infrastructure and Public Utilities Section, Implementation Coordination Unit, Prime Minister’s Department (1983-1989), Director PWD Malacca (1989-1995), Construction General Manager KLIA (1995-1999), Director PWD Johor (1999-2000) and Director Management Corporate Branch PWD Malaysia (2000-2005). Dato’ Ir. A. Rashid also sits on the board of several private limited companies.

DATO’ IR. A. RASHID BIN OMARSenior Independent Non-Executive Director

Dato’ Ir. Kalid bin Alias, a Malaysian, aged 63, was appointed the IndependentNon-ExecutiveDirectorofMTDACPIon15August2006. Dato’ Ir. Kalid is also a member of the Audit Committee, the Nomination Committee and the Remuneration Committee.

Dato’ Ir. Kalid holds a Bachelor in Civil Engineering from the University of Glasgow, Scotland, United Kingdom and a Master in Public Health Engineering from the University of Strathclyde, Glasgow, Scotland, United Kingdom. A Registered Professional Engineer with the Board of Engineers Malaysia, he is a Fellow of The Institution of Engineers, Malaysia and a Life Member of the Road Engineering Association of Malaysia.

Dato’ Ir. Kalid joined the Public Works Department (PWD) in 1975 where he served in various capacities including District Engineer, Assistant Director (Roads) PWD Selangor, Deputy Director of PWD Terengganu and Jabatan Pembangunan Persekutuan Kelantan, Director of PWD Negeri Sembilan and PWD Pahang, which was his last posting before retiring in November 2004. Dato’ Ir. Kalid also sits on the board of a private limited company.

DATO’ IR. KALID BIN ALIAS Independent Non-Executive Director


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B oard of Direc tors’ Prof i le (contd.)

Encik Nik Din bin Nik Sulaiman, a Malaysian, aged 63, was appointedtheIndependentNon-ExecutiveDirectorofMTDACPIon 31 October 2008. He is also a member of the Audit Committee and the Nomination Committee.

Encik Nik Din is a Fellow member of the Association of Chartered Certified Accountants (FCCA) and a member of the Malaysian InstituteofAccountants(MIA),CA(M).Hehasextensiveexperiencein accounting, auditing and finance. He served in Sime Darby Group from 1992 to 2004, where he held positions as Group Chief Internal Audit Manager and Finance Director. He also worked for Promet Berhad from 1982 to 1992 as Financial Controller and later as Finance Director. Encik Nik Din is the Independent Non-ExecutiveDirectorofMTDCapitalBhd,APFTBerhadandAnglo-Eastern Plantations Plc, which is listed on the London Stock Exchange.EncikNikDinisalsoadirectorofseveralprivatelimitedcompanies. Formerly, he was the Independent Non-ExecutiveDirector of MTD InfraPerdana Bhd and Metacorp Berhad, both are subsidiaries of MTD Capital Bhd.

NIK DIN BIN NIK SULAIMANIndependent Non-Executive Director

Mr. Lee Leong Yow, a Malaysian, aged 55, was appointed the Executive Director of MTDACPI on 10 January 2005 and wasredesignated as Non-Executive Director, upon his retirementon 29 July 2011. Mr. Lee is also a member of the Management Committee.

Mr. Lee holds a Master in Business Administration (Finance) from University of Leicester, United Kingdom, and is a member of the Association of International Accountants, United Kingdom. He joined MTD Group as Finance Manager of MTD Prime Sdn Bhd in August 1994 and was promoted to Group Financial Controller of MTD Capital Bhd in August 1997. He was appointed as General Manager, Head of Operations of MTD Group in October 2001 and asExecutiveVicePresident,Head,Finance&TreasuryDivisioninApril 2009. Prior to joining MTD Group, he was with Citibank N.A., asFinancialController,BankCardsbusinessandwithExxonGroupof companies in Malaysia heading various accounting sections in Controllers Department.

Mr. Lee held directorship in other foreign subsidiary of MTD Capital Bhd namely, MTD Walkers PLC, a company listed on the Colombo StockExchangeintheRepublicofSriLanka.Hehelddirectorshipin other company namely, MTD Capital Bhd, Metacorp Berhad, a subsidiary of MTD Capital Bhd and ANIH Berhad. Mr. Lee is a director of Touch ‘n Go Sdn Bhd, the electronic toll collection operator and several private limited companies.

LEE LEONG YOW Non-Independent Non-Executive Director

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Encik Md. Shukor bin Mohamed, a Malaysian, aged 50, was appointed the Executive Director of MTDACPI on 15 August 2006. He is also amember of the Management Committee.

Encik Md. Shukor holds a Bachelor of Science in Civil Engineering from University of Strathclyde, Scotland and a Master of Science in Transport Planning and Engineering from Leeds University, United Kingdom. He is a corporate member of the Institution of Engineers, Malaysia, a registered and professional engineer with the Board of Engineers, Malaysia and corporate member of the Institution of Highways and Transportation, United Kingdom.

Encik Md. Shukor spent 22 years with the Malaysian Highway Authority (MHA) serving in various capacities; from engineer to Assistant Regional Director, Senior Project and Maintenance Engineer, Assistant Director of Operations, Director of Special Projects and Director of Professional Services and Technical Co-operation, which was his last position prior to joining MTD Construction Sdn Bhd as General Manager in February 2006. InApril2009,EncikMd.ShukorwasappointedasExecutiveVicePresident,Head, Construction & Contract Division of MTD Group. Encik Md. Shukor also sits on the board of several private limited companies.

Mr. Keith George Cowling, a British citizen with Malaysian Permanent Residentstatus,aged61,wasappointedtheExecutiveDirectorofMTDACPIon 15 August 2006. Mr. Cowling is also a member of the Management Committee.

A Chartered Engineer, Mr. Cowling holds a Bachelor in Civil Engineering from Dundee University, Scotland and is a member of the Institution of Civil Engineers, United Kingdom, and a Fellow of the Institution of Engineers, Malaysia, where he served on committees and held the position of Chairman of the Tunnelling and Underground Space Technical Division. His 36 years experience include servicewith theCity ofDundeeDistrictCouncil, Dundee, Scotland (1972-1976), Mason Pittendrigh & Partners, Edinburgh, Scotland (1976-1977), Auscon Consultants, Sultanate of Oman (1979), Petroleum Development Oman, Sultanate of Oman (1980-1981) and Maunsell Consultants Asia, Hong Kong (1980-1984).

Mr. Cowling joined MTD Group since 1984 serving in various capacities; from Engineer to Chief Engineer, General Manager, Head of Business DevelopmentandExecutiveVicePresident,Head,BusinessDevelopment& Manufacturing Division, which is the current position held by him since April 2009.

Mr. Cowling held directorship in foreign subsidiary of MTD Capital Bhd namely, MTD Walkers PLC, a company listed on the Colombo Stock ExchangeintheRepublicofSriLankaandseveralprivatelimitedcompanies.

MD. SHUKOR BIN MOHAMEDNon-Independent Executive Director

KEITH GEORGE COWLINGNon-Independent Executive Director



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Notes:-Family relationship with Director and/or major shareholdersDato’ Dr. Nik Hussain bin Abdul Rahman is the father-in-law of Dato’ Azmil Khalili bin Dato’ Khalid. Dato’ Dr. Nik Hussain bin Abdul Rahman and Dato’ Azmil Khalili bin Dato’ Khalid are deemed major shareholders of the Company and their interest in the securities of the Company are set out in the Analysis of Shareholdings of this Annual Report.

Saved as disclosed herein, none of the other Directors have any family relationship with any Directors and/or substantial shareholders of the Company.

None of the other Directors have any interest in the securities of the Company as at 29 July 2011.

Conflict of interestNone of the Directors have any conflict of interest with the Company.

Convicted of offencesNone of the Directors have been convicted of any offence within the past ten (10) yearsotherthantrafficoffences.

Repor t of the Audit Committee

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1. MEMBERSHIP AND MEETINGS

The Audit Committee (“AC”) comprises the following members and details of attendance of each member at meetings held during the financial year ended 31 March 2011 are as follows:

Members Number of Meetings Held AttendanceDato’ Ir. A. Rashid bin OmarChairman/SeniorIndependentNon-ExecutiveDirector 5 5

Dato’ Ir. Kalid bin AliasMember/IndependentNon-ExecutiveDirector 5 5

Tuan Haji Nik Din bin Nik SulaimanMember/IndependentNon-ExecutiveDirector 5 5

Dato’ Seri Haji Noordin bin OmarMember/IndependentNon-ExecutiveDirector(Retired on 23 September 2010) 3* 2

* Reflects the number of meetings held during the time the director held office

2. COMPOSITION

2.1 Composition

The AC shall be appointed by the Board of Directors of the Company (“Board”) from among the Board members and shall comprise not fewer than three (3) members, allofwhomshallbenon-executivedirectors.The majority of the AC shall be independent directors.

At least one (1) member of the AC shall be:

a. a member of the Malaysian Institute of Accountants (“MIA”); or

b. if he is not a member of the MIA, he must have at least three (3) years of workingexperienceand:

i. he must have passed the examinations specified in PartI of the First Schedule of the Accountants Act 1967; or

ii. he must be a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountants Act 1967; or

c. fulfils such other requirements* as prescribed or approved by Bursa Malaysia Securities Berhad (“Bursa Securities”).

The members of the AC shall elect a Chairman from amongst themselves who is an Independent Director. No alternate Director of the Board shall be appointed as a member of the AC.

* (a) a degree/masters/doctorate in accounting or finance and at least three (3) years’ post qualification experience in accounting or finance; or

(b) at least seven (7) years’ experience being a chief financial officer of a corporation or having the function of being primarily responsible for the management of the financial affairs of a corporation.


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In the event of any vacancy in the AC resulting in non-compliance of Bursa Securities Main Market Listing Requirements (“Listing Requirements”), the Board shall ensure that the vacancy is filled within three (3) months.

The Board shall review the term of officeand performance of an AC and each of its members at least once every three (3) years.

3. TERMS OF REFERENCE

3.1 Meetings

The AC shall meet at least four (4) times a year. In addition, the Chairman may call for additional meetings at any time at the Chairman’s discretion. The AC may also invite anyofficeroremployeeof theGroup tobein attendance to assist in its deliberations. TheACshallmeetwiththeexternalauditorswithout any executive board member andmanagement present at least twice a year and whenever deemed necessary.

3.2 Quorum

The meetings shall have a quorum of two (2) members who are independent directors.

3.3 Secretary

The Secretary of the AC shall be the Company Secretary.

The Secretary shall be responsible for drawing up the notice and agenda of meetings in consultation with the Chairman andcirculatingit,supportedbyexplanatorydocumentation to members of the AC prior to each meeting.

The Secretary shall also prepare the written minutes of the AC meetings and distribute to each members for confirmation. The minutes of AC meetings shall be kept under the custody of the Secretary.

3.4 Authority

The AC shall, in accordance with a procedure to be determined by the Board and at the expenseoftheCompany,

a. be authorised to investigate any activity within its terms of reference;

b. have direct communication channels with both the external and internalauditors as well as employees of the Group;

c. have full and unrestricted access to any information pertaining to the Company or the Group;

d. obtain outside legal or other independent professional advice and secure the attendance of outsiders with relevant experience and expertise if itdeems necessary;

e. be able to convene meetings with the

externalauditors, the internalauditorsor both, excluding the attendance ofother directors and management, if necessary; and

f. be able to make relevant reports when necessary to the relevant authorities if a breach of the Listing Requirements occurs.

Repor t of the Audit Committee (contd.)

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3.5 Duties and Responsibilities

a. Risk Management & Internal Control

• to review the adequacy and theintegrity of the Group’s internal control system and management information system;

• toreviewtheextentofcompliancewith established internal policies, standards, plans, procedures, laws and regulations;

• torecommendtotheBoardstepsto improve the system of internal control derived from the findings of the internal and externalauditors and as recommended by the AC itself;

b. Financial Reporting Review

To review the quarterly and annual financial statements prior to the approval by the Board, focusing particularly on:

• anychangesinorimplementationof new accounting policies and practices;

• significant adjustments arisingfrom the audits;

• compliance with the applicableapproved accounting standards, other statutory and legal requirements; and

• thegoingconcernassumption;

c. External Audit

• toreviewanymattersconcerningthe appointment and re-appointment, audit fee and any questions of resignation or dismissalofexternalauditors;

• to review with the externalauditors the nature and scope of the audit plan and audit report;

• to review and evaluate factorsrelated to the independence of externalauditorsandassistthemin preserving their independence;

• to review external auditors’findings arising from audits, particularly any comments and responses in management letters as well as the assistance given by the employees of the Group in order to be satisfied that appropriate action is being taken;

• to review with the externalauditors the Statement on Internal Control of the Group for inclusion in the annual report;

d. Internal Audit

• to review with the internalauditors the nature and scope of the audit plan and audit report;

• to review the competency andresources of the internal audit function, and that it has the necessary authority to carry out its work;



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• to review and evaluate factorsrelated to the independence of internal auditors and assist them in preserving their independence;

• to review internal auditprogrammes and findings arising from audits;

• toreviewtheperformanceoftheinternal audit function and report to the Board when necessary;

e. Related Party Transactions

To review any related party transaction and conflict of interest situation that may arise within the Group including any transaction, procedure or course of conduct that raises questions of management integrity;

f. Other Matters

• to prepare the annual AC reportto the Board which includes the composition of the AC, its terms of reference, number of meetings held, a summary of its activities and the existence of an internalaudit function and a summary of the activities of internal audit function for inclusion in the annual report; and

• to carry out any other functionthat may be assigned by the Board when deemed necessary and appropriate.

4. SUMMARY OF ACTIVITIES

During the financial year under review, the AC carried out its duties as set out in the terms of reference and the activities are summarised as follows:

• Reviewed the external auditors’ scope ofwork, their audit plans and strategies for the year presented by representatives from the externalauditorspriortotheaudit;

• Reviewedwith the external auditors on theresults of their audit, the audited financial statements and the management letter;

• Assessed the independence and objectivityoftheexternalauditorsduringtheyear;

• RecommendedfortheBoard’sconsiderationthere-appointmentofexternalauditorsandthe audit fees;

• Reviewed thequarterlyfinancial statementsand the year end financial statements of the Group before recommending to the Board for approval;

• In the review of the annual auditedfinancial statements, the AC discussed with management and the external auditors theaccounting principles and standards that were applied and their judgement of the items that may affect the financial statements;

• Reviewedandapprovedtheannual internalaudit plan;

• Reviewed and deliberated the internalaudit reports tabled during the year, the audit recommendations and management’s response to the recommendations;

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• Monitored the corrective actions taken onthe outstanding audit issues;

• Reviewed the audit report on InformationSystem Security of the Group Information Technology Environment;

• Reviewed the Enterprise Risk Managementreport on Risk Action Implementation Process and Key Action Plans;

• Reviewed the AC Report and Statement onInternal Control and made recommendations to the Board for inclusion in the Annual Report; and

• Reviewed related party transactions andrecurrent related party transactions of the Company and of the Group.

5. INTERNAL AUDIT FUNCTION

The Internal Audit Function is carried out by Group Internal Audit Department (“Group IAD”) of MTD Capital Bhd, the holding company. Group IAD assists the AC in discharging its duties and responsibilities, and is independent of the activities they audit. The primary role of Group

IAD is to review the adequacy and effectiveness of the system of internal control; compliance with established rules, guidelines, laws and regulations; reliability and integrity of financial information and the means of safeguarding assets.

In developing the Audit Plan, internal audit assignments are prioritised based on the results of the risk assessment exercise, audit cycle anddiscussions with Senior Management. Group IAD reports directly to the AC who reviews and approves its annual audit plan.

Internal audit reports, incorporating audit recommendations and management’s responses with regards to audit findings on weaknesses in the Internal Control System and controls were issued to the AC and the management of the respective operations. All findings by Group IAD are tracked and followed up on a quarterly basis and the status of the implementation is reported to the AC accordingly.

The total cost incurred for the internal audit function of the Group in respect of the financial year ended 31 March 2011 amounted to RM 80,000.00.



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The Board of Directors (“Board”) of MTD ACPI Engineering Berhad (“MTDACPI” or “Company”) acknowledges the importance of continuously maintaining good corporate governance within MTDACPI and its subsidiaries (“MTDACPI Group” or “Group”) to safeguard and enhance shareholders’ value and the financial performance of MTDACPI Group. The Board is committed to deliver and demonstrate the highest possible standards of corporate governance practices throughout MTDACPI Group in discharging its responsibilities.

The Board has embedded appropriate frameworks in MTDACPI Group to guide MTDACPI Group towards good corporate governance practices in line with the Malaysian Code on Corporate Governance (Revised 2007) [“Code”] and Bursa Malaysia Securities Berhad Main Market Listing Requirements (“Listing Requirements”) Corporate Governance Guide – Towards Boardroom Excellence [“CG Guide”]. The frameworks enable theBoard to regulate its business activities and resources, and self-assess MTDACPI Group’s existing corporategovernance practices and internal control processes for continued compliance with the Code and CG Guide. It also complements the management in ensuring that the management structure and function of the business remains on course to achieve MTDACPI Group’s objectives of maximizing revenue, controlling costand improving profitability to enhance shareholders’ value and also to promote transparency and corporate accountability.

The Board is pleased to present the following statement, which describes the manner in which MTDACPI Group hasappliedtheprinciplesandtheextentofcompliancewith the best practices of the Code, throughout the financial year ended 31 March 2011.

A. DIRECTORS

A1. The Board

The Board takes full responsibility to protect, preserve and enhance the long term value of MTDACPI Group for the benefit of the

shareholders/stakeholders and to safeguard the assets of MTDACPI Group. The Board in discharging its responsibilities, continuously provides strategic direction, implements policies and procedures, risk management frameworks and internal audit functions to ensure the achievement of corporate objectives and goals, for the growth of MTDACPI Group.

The Board’s principal functions and responsibilities, inter-alia, are as follows:

a) Review and approve strategies, business plans, policies and annual operating budgets which are integral part of the Company management information system (MIS), to serve as a guide to the management to operate and manage the businesses of MTDACPI Group;

b) Oversee and regularly evaluate the conduct of MTDACPI Group’s businesses to ensure it is being properly managed by those entrusted with the management;

c) Continuously assess and review the adequacy and integrity of a sound system of internal control and MIS within MTDACPI Group to optimize the effectiveness of the processes in place, to properly manage MTDACPI Group’s exposure to risks and uncertainties,which could have a material adverse effect on MTDACPI Group’s business prospects, earning and/or financial position;

d) Evaluate the viability of business propositions or corporate proposals, management succession, changes to the corporate structure, management and control procedures within MTDACPI Group;

Statement on Corporate G overnance

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Statement on Corporate G overnance (contd.)

e) Decide on a formal schedule of matters reserved to itself which includes overall MTDACPI Group strategy and direction, acquisition and investment policy, approvalofmajorcapitalexpenditureforprojects and significant financial matters;

f ) Communicate with its shareholders, the market and institutional investors and analyst, if required; and

g) Keep abreast of social trends and changes in the environment to continuously consider possible need for protective measures.

The Board delegates specific responsibilities and functions to various committees namely, Audit Committee, Nomination Committee and Remuneration Committee (collectively referred to as “Board Committees”) as well as Management Committee. The function and terms of reference of the Board Committees and Management Committee together with authorities delegated by the Board are clearly defined in the respective Terms of Reference, which are reviewed and/or updated annually or as and when required. The Board receives regular status reports, updates and briefing from the Board Committees and Management Committee. The Board Committees are either empowered to act independently or on behalf of the Board, however, the ultimate responsibility and final decision on certain reserved matters of paramount importance, lies with the entire Board.

The Board has separated management oversight and operational executivefunctions. The operational executivefunctions including, amongst others, development and implementation of business strategies and policies and decision making on important matters regarding

day-to-day business executive functionswhich are delegated to the Management Committee. The Management Committee on an ongoing basis, reviews the achievement of business divisions/units against targets and business plans approved by the Board, to ensure the business remains on course. The Management Committee led by the President&ChiefExecutiveOfficer(“CEO”),issupported by a management team with the requisiteexperienceandskills.

The Management Committee through the Risk Management Committee identifies potential critical risks that could potentially impact MTDACPI Group’s ability to realise its objectives and evaluates the controls in place on an ongoing basis, to ensure the key risks are properly managed. The risk assessment reports are presented to the Board on a half-yearly basis, for understanding the trends in uncertainty and oversight responsibilities.

Succession planning is in place to ensure orderly management transition for upward or lateral movement and strategic continuity for every critical position in the Group. Training and development programs have been planned and implemented for developing potential successors for identified senior management positions. The compensation and benefit policies of the Group are aimed to attract and retain high quality employees as potential successors.

A2. Code of Ethics for Directors

The Board has established a Code of Ethics for Directors, to provide guidance to the directors of MTDACPI Group on the standard of ethical, business and personal behaviour required at all times in the exercise of hispowers to discharge his duties as a director of MTDACPI Group.


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A3. Board Composition and Balance

The Board comprises persons of high calibre, who are professional in their respective field. Together, the Board members bring a wide range of business and financial/technical experience,skillsandexpertisethatarevitalto the Board’s successful stewardship of MTDACPI Group.

The Board currently has eight (8) members, three (3) of whom are Non-Independent Executive Directors, three (3) IndependentNon-Executive Directors and two (2) Non-Independent Non-Executive Directors. Theprofile of each director of the Company (“Director”) is set out in the Board of Directors’ Profile.

The Independent Directors represent 37.5% of the Board composition which is in compliance with Paragraph 15.02 of the Listing Requirements.

The Board members are of the opinion that the structure of the Board is well-balanced and satisfactorily reflects the interest of the shareholders and representation of minority shareholders through the Independent Directors.

The Board through the Nomination Committee reviews the independence of Non-ExecutiveDirectors tocomplywith thebest practices of the Code and regulatory provisions.

The Non-Executive Directors on the Boardbrings strong independent view and judgement; objective participation in the proceedings and decision making process of the Board; and provides effective check and balance for the Board. The Non-ExecutiveDirectors possess an appropriate range of skill and experience including industryknowledge, accounting, financial, technical, management and business acumen to deal

with the diverse businesses of MTDACPI Group.

Dato’ Ir. A. Rashid bin Omar is the Senior Independent Non-Executive Director towhom concerns of the shareholders, relating to the Company may be conveyed.

There is a distinct and clear division of responsibilities between the Chairman and the CEO, to ensure a balance of power and authority. The roles of the Chairman and the CEO are separated and clearly defined in the Board Charter. The Chairman is a Non-Independent Non-Executive Director andis primarily responsible for orderly conduct and effective functioning of the Board, to ensure integrity and entrenchment of good corporate governance practices within MTDACPI Group as well as maintaining effective communication between shareholders/investors and the Board. The CEO is primarily responsible for leadership and management of the day-to-day business executive functions of MTDACPI Group,implementation of policies and procedures as well as business plans approved by the Board and making operational decisions with the assistance of the management team. The CEO is also responsible for communicating matters relating to the Group’s business and operation to the Board.

The Board through the Nomination Committee continuously reviews and on an annual basis evaluates the performance and effectiveness of the Board, Board Committees and Board members.

A4. Board Meetings

The Board, at the beginning of each year, will establish and approve the annual schedule of corporate meeting dates and convene additional meetings, as and when necessary. During the financial year ended 31 March 2011, the Board held eight (8) Board meetings inclusive of three (3) special Board meetings.

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The record of attendance of each Director during the financial year ended 31 March 2011 is set out below:

Name of Director Attendance

Dato’ Dr. Nik Hussain bin 7/8 Abdul Rahman (Non-Independent Non-ExecutiveDirector) Dato’ Azmil Khalili bin 7/8 Dato’ Khalid (Non-Independent ExecutiveDirector) Dato’ Ir. A. Rashid bin Omar 8/8 (Senior Independent Non-ExecutiveDirector) Dato’ Ir. Kalid bin Alias 8/8 (IndependentNon-Executive Director)

Nik Din bin Nik Sulaiman 7/8 (IndependentNon-Executive Director) Lee Leong Yow 6/8 (Non-Independent Non-ExecutiveDirector)

Keith George Cowling 7/8 (Non-Independent ExecutiveDirector) Md. Shukor bin Mohamed 7/8 (Non-Independent ExecutiveDirector) Dato’ Seri Haji Noordin bin Omar 3/4 (IndependentNon-Executive Director) (Retired on 23 September 2010) Dato’ Rusma binti Ibrahim 4/4 (Non-Independent Non-ExecutiveDirector)

(Retired on 23 September 2010)

The Chairman established meeting agendas and ensured that meetings are organised andefficientlyconducted.AllDirectorshavethe opportunity to view meeting materials including details of business proposition, quarterly reports and operational progress reports well in advance of each Board meeting. This is to facilitate the Directors’ participation in discussions and decision makings in key issues involving MTDACPI Group including, the approval of major investments, financial matters, annual budgets, key policies and procedures.

The matters for discussion and decision making by the Board are formalised and the proceedings and resolutions passed at each Board meeting are recorded in the minutes, which are confirmed by the Board in the next succeedingmeeting andsigned by the Chairman of the meeting as a correct record of the proceedings thereat. Directors would request further clarification or raise comments on the minutes prior to confirmation of the same at the meeting. TheBoardalsoexercisescontrolonmattersthat require Board’s approval by way of circulation of Directors’ Resolutions in writing. The interested Directors will declare their interests and abstain from deliberations and decisions in the matters in which they are interested and also abstain from voting in respect of their shareholdings in MTDACPI on the resolutions pertaining to corporate proposals.

The Board members may consult and share expertiseandexperienceamongthemselvesin discharging their duties.

The Board is assisted by the Company Secretaries whose appointment or removal is determined by the Board. The Company Secretaries carry out the instructions of the



18

Board, advise the Board, individual Director and officers ofMTDACPIGroup on relevantstatutory and regulatory compliance, and provide corporate secretarial functions of MTDACPI Group.

A5. Supply of Information

The Board has complete and unimpeded access to information relating to MTDACPI Group in discharging their duties.

All Directors regularly receive comprehensive management reports or periodic updates on major investments, operations or projects and financial reports or information of MTDACPI Group from the management, for their perusal and monitoring of the business and operation of MTDACPI Group. The Chairman of the respective Board Committee would report to the Board at Board meetings of any pertinent matters for information or decision making and/or reports would be appended to the agenda of the Board meetings for Directors’ notation.

Board papers and supporting documents providing detailed information on any proposal are attached to Directors’ Circular Resolutions as required, for purpose of informed decision making by the Board.

All the Directors have unrestricted access to the management staff to seek explanationor clarification on any operational issues in relation to MTDACPI Group. The Directors and the Board Committees have the right to seek independent professional advice from external experts and/or advisors indischargingtheirdutiesattheexpenseoftheCompany.

All Directors and the Board Committees also have unrestricted access to the advice and services of qualified Company Secretaries. The Directors are regularly updated by the Company Secretaries of new statutory and regulatory requirements introduced or implemented by the statutory or regulatory bodies.

A6. Whistle Blowing Policy

The Board introduced a whistle blowing policy during the financial year under review, in line with its commitment to promote transparency, effective and honest communication throughout MTDACPI Group. The whistle blowing policy provides employees and others dealing with MTDACPI Group, an avenue to raise serious concerns about any aspect of the business and operation of MTDACPI Group, which they might genuinely and in good faith consider to be potentially illegal, improper or unethical rather than overlooking a problem or ‘blowing the whistle’ outside.

The whistle blowing mechanism provides reasonable steps to protect whistle blowers’ anonymity and protect against adverse employment actions (i.e. dismissal, demotion, suspension, harassment or other forms of discrimination) for raising allegations of business misconduct. The malicious use of the whistle blowing policy will result in disciplinary action being taken against a whistle blower. All reports/disclosure are treated as confidential and every effort will be made not to reveal whistle blower’s identity.


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A7. Nomination Committee

The Nomination Committee was established on 27 September 2001. Its members comprise exclusively of Independent Non-ExecutiveDirectors and are as follows:

Member Designation Dato’ Ir. A. Rashid bin Chairman Omar Senior Independent

Non-Executive Director

Dato’ Ir. Kalid bin Independent Alias Non-Executive Director

Nik Din bin Independent NikSulaiman Non-Executive

(Appointed on Director 23 September 2010) The term of office of the members of the

Nomination Committee shall be for a period of three (3) years and may be re-nominated and appointed by the Board from time-to-time. The Nomination Committee met twice during the financial year ended 31 March 2011 with full attendance of the Committee’s members.

The duties and responsibilities of the Nomination Committee are defined in its Terms of Reference approved by the Board inter-alia, the following:

a) reviewing and assessing the effectiveness, size and composition of the Board and Board Committees;

b) reviewing and assessing the skill, experience and other qualities of its

individual members, including core competencies which Non-ExecutiveDirectors should bring to the Board;

c) conducting a formal assessment of the Board through the implementation of annual evaluation of Director’s contribution and effectiveness of the Board as a whole, to enhance the individual Director’s strength and weaknesses;

d) recommending new candidates for appointment to the Board and in evaluating suitable new nominees, consider the requisite qualification and experience of the potential candidateto meet the relevant requirements of the Listing Requirements, as well as a general understanding of business and other disciplines relevant to the success of a public listed company in today’s business environment; and

e) reviewing succession planning for the Board Chairman, CEO and senior management periodically and work with the Board to evaluate potential successors.

A8. Re-Election or Re-Appointment of Directors

The Board recommends directors for re-election and/or re-appointment by shareholders at every annual general meeting (“AGM”) pursuant to MTDACPI’s Articles of Association and the Companies Act, 1965.

a) All Directors are subject to retirement by rotation and in ascertaining the number of directors to retire, the Company shall ensurealldirectorsshallretirefromoffice



20

at least once in every three (3) years but shall be eligible for re-election.

b) One-third (1/3) of the Directors or the number nearest to one-third (1/3) shall retire from office at every AGM and ifeligible, may offer themselves for re-election.

c) Directors who are appointed by the Board to fill a casual vacancy shall hold officeonlyuntilthenextfollowingAGMand shall then be eligible for re-election but shall not be taken into account in determining the Directors who are to retire by rotation at the meeting.

d) TheCEO shall retire fromoffice at leastonce in every three (3) years, but such re-election shall be subject always to the provision stated in item (b) above.

e) Directors over seventy (70) years of age are required to submit themselves for re-appointment as Directors annually by way of a resolution in accordance with Section 129(6) of the Companies Act, 1965.

The details of Directors standing for re-election and/or re-appointment at the forthcoming AGM are set out in the Notice of AGM.

A9. Directors’ Training

All the Directors have attended the Mandatory Accreditation Program to equip themselves with a broad knowledge and understanding of various provisions, rules and regulations in order to discharge their duties and obligations effectively.

During the financial year ended 31 March 2011, the Directors have attended relevant training and seminars in areas of corporate governance, leadership and finance which were conducted either in house or by professional bodies, in order to broaden their perspectives and to keep abreast with the developments in the market place and with new statutory and regulatory requirements to better manage their corporate responsibilities to MTDACPI Group.

The Board acknowledges that continuous education is important for the Directors to keep abreast of changes and future developments in the global economy. Apart from specific training programmes for the Directors annually, Directors are encouraged to attend seminars and training programmes to keep abreast with current development in the business environment as well as to further their knowledge and strengthen their skill for discharging their duties as directors effectively.

A10. Remuneration Committee

The Remuneration Committee was established on 27 September 2001. Its members comprise mainly of Independent Non-ExecutiveDirectorsandareasfollows:

Member Designation

Dato’ Ir. A. Rashid Chairman bin Omar Senior Independent Non-Executive Director

Dato’ Dr. Nik Hussain Non-Independent binAbdulRahman Non-Executive Director

Dato’ Ir. Kalid Independent binAlias Non-Executive (Appointed on Director 23 September 2010)


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The term of office of the members of theRemuneration Committee shall be three (3) years and may be re-nominated for appointment by the Board from time-to-time. The effectiveness of the Remuneration Committee and its members should be assessed by the Board on an annual basis. The Remuneration Committee met once during the financial year ended 31 March 2011 with full attendance of the Committee’s members.

The duties and responsibilities of the Remuneration Committee are defined in its Terms of Reference approved by the Board, inter-alia, the following:

a) review of the remuneration packages of the Executive Directors and seniormanagement including benefits and stock option scheme (if any) so as to be able to attract and retain the best against its interest in not paying excessiveremuneration;

b) structure the component parts of remuneration to ensure the ExecutiveDirectors and senior management are rewarded appropriately for their individual commitment and contribution towards the Company’s achievement of corporate and business results;

c) recommend to the Board the remunerationpackagesoftheExecutiveDirectors and senior management that will commensurate with the level of

executive responsibilities in enhancingthe performance of the Company;

d) assure compliance to the Code, statutory and regulatory requirements, and disclosure requirements are duly satisfied; and

e) review and make recommendations on any other matters related to remuneration referred by the Board from time to time.

The Board makes changes to Directors’ remuneration packages upon the recommendation of the Remuneration Committee and following discussion and approval by a majority of the Board.

The determination of the remuneration packages for Non-Executive Directors is amatter to be decided by the Board as a whole. None of the Directors participate in any way in determining their individual remuneration package. The remuneration packages are benchmarked against market practices of comparable public listed corporations to be competitive. The Company reimburses expensesincurredbyDirectorsinthecourseof their duties as Directors.

The fees payable to the Directors are determined by the Board and are subject to the approval of the shareholders of the Company at the AGM.

B. RELATIONSHIP WITH SHAREHOLDERS/INVESTORS

The AGM and extraordinary general meetingsremain the principal forum for open and clear dialogue with shareholders concerning matters affecting the value of shareholders’ investment in the Company and also to understand the shareholders’ perpective and respond to their feedback. The Company’s AGM was held on 23 September 2010. The Board recognises that prompt and appropriate disclosure of Company’s information to investors is essential for investment decisions and ensures the Company is committed to continuous disclosure of information in compliance with the provision of the Listing Requirements. In addition, media are invited to briefings by the Chairman and CEO for the purpose

of releasing new information and highlight any upcoming action or event. The Board values dialogues with institutional investors to optimize the understanding of the investment community in terms of strategy, business model, competitive position and financial.

The Company maintains a dedicated website at www.mtdgrp.com which provides easy access to MTDACPI Group’s operating businesses, latest developments, announcements to Bursa Securities and other corporate information. In addition, investors may raise queries regarding MTDACPI Group via emails to [email protected] or sign-up for MTDACPI email alert to receive notification whenever MTDACPI releases any corporate announcement.

2. The number of Directors whose total remuneration from MTDACPI Group falls within the following bands are as follows:

Number of Directors Remuneration Band Executive Non-Executive Total*

Below RM50,000 1 5 6 RM50,001 to RM100,000 1 - 1 RM400,001 to RM450,000 1 1 2 RM450,001 to RM500,000 1 - 1

Notes: * including two (2) Independent Non-Executive Directors who had retired as Company Directors on 23 September 2010.


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1. The aggregate remuneration of the Directors categorised into appropriate components during the financial year ended 31 March 2011 is as follows:

Description Executive Non-Executive Total Percentage Directors Directors (RM ‘000) (RM ‘000) (RM ‘000) (%)

Salaries and other emoluments 832 343 1,175 76 Fees 132 199* 331 22 Benefits-in-kind 10 25 35 2

Total 974 567 1,541 100

C. ACCOUNTABILITY AND AUDIT

(i) Financial Reporting

In presenting the annual financial statements and quarterly financial results, the Board had ensured that MTDACPI Group adopts appropriate accounting policies and standards and consistently applied prudent judgements supported by reasonable estimates so that the financial statements represent a true and fair assessment of MTDACPI and MTDACPI Group’s financial position. The Board vested responsibilities on the Audit Committee to ensure that MTDACPI Group maintains proper accounting records, review and assess the accuracy and adequacy of all the information to be disclosed and ensure that the financial statements are in compliance with the provisions of the Companies Act, 1965, Listing Requirements and applicable approved accounting standards in Malaysia.

A statement by the Directors of their responsibilities for the financial statements is incorporated within the Directors’ Report and Statement by Directors.

(ii) Internal Control

The Board has ensured to provide reasonable assurance on the effectiveness and adequacy of the System of Internal Control within MTDACPI Group.

The state of internal control within MTDACPI Group is set out in the Statement on Internal Control.

(iii) Relationship with Auditors

The Company maintains a formal and transparent relationship with its externalauditors, Messrs Ernst & Young, in seeking professional advice and ensuring compliance with the accounting standards of Malaysia. Matters that require the Board’s attention are highlighted by the external auditors to theAudit Committee and the Board through the issuance of management papers and reports. TheAuditCommitteeandexternal auditorsexchangeinformationandadviceandreachmutual understanding regarding important audit issues, risk evaluations relating to internal control audits and other matters.

The role of the Audit Committee in relation to theexternalauditorsissetoutintheReportof the Audit Committee.

(iv) Audit Committee

The Audit Committee meets with the externalauditorsatleasttwiceayearwithoutthepresenceof theExecutiveDirectorsandsenior management staff. This encourages free and honest exchange of view andopinion between both parties.

The composition, terms of reference

and a summary of activities of the Audit Committee are set out in the Report of the Audit Committee.

This statement is made in accordance with a resolution of the Board dated 26 July 2011.

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24

Addit ional Compliance Statement

Utilisation of Proceeds

During the financial year under review, there were no proceeds raised from any corporate proposal.

Share Buy-Back

During the financial year under review, the Company did not enter into any share buy-back transactions. As at 31 March 2011, the Company held a total of 637,000 treasury shares and none of the treasury shares were sold or cancelled.

Options, Warrants or Convertible Securities

During the financial year under review, the Company did not issue any options, warrants or convertible securities.

American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) Programme

During the financial year under review, the Company did not sponsor any ADR or GDR programme.

Imposition of Sanctions and/or Penalties

There were no sanctions and/or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies during the financial year under review.

Non-Audit Fees

The amount of non-audit fees paid and payable to the external auditors by the Group for the financial yearended 31 March 2011 is RM42,000.

Variation in Results

There were no material variation between the audited financial results for the financial year ended 31 March 2011 and the unaudited financial results for the quarter and financial year ended 31 March 2011 released on 27 May 2011.

Profit Guarantees

The Company did not provide any profit guarantee nor is there any profit guarantee given to the Company during the financial year under review.

Material Contracts

There were no material contracts (not being contracts entered into in the ordinary course of business), which have been entered into by the Company and/or its subsidiaries involving Directors’ and major shareholders’ interests during the financial year ended 31 March 2011.

Revaluation Policy

The Company does not have a revaluation policy on landed properties.

Recurrent Related Party Transactions (“RRPT”)

The information on RRPT for the financial year ended 31 March 2011 is set out in the financial statements.

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DIRECTORS’ RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS

The Board is responsible for ensuring that the annual audited financial statements of the Company and the Group have been properly drawn up in accordance with the provisions of the Companies Act 1965, applicable Financial Reporting Standards in Malaysia and the Bursa Malaysia Securities Berhad Main Market Listing Requirements so as to give a true and fair view of the state of affairs and of the results and cash flows of the Company and the Group, for the financial year ended 31 March 2011.

In presenting the financial statements, the Directors have:

• adoptedappropriateaccountingpolicies,consistentlyappliedandsupportedbyreasonableprudentjudgementand estimates and prepared on going concern basis; and

• ensuredthattheCompanyandtheGrouphavecompliedwithapplicableFinancialReportingStandards.

The Board has overall responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and Group and to prevent and detect fraud and other irregularities.

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Addit ional Compliance Statement (contd.)


26

Statement on I nternal Control

The Board of Directors of the Company (“Board”) is committed in maintaining a sound system of internal control and is pleased to provide the following statement on the scope and nature of internal control for the Company and its subsidiaries (“Group”) for the financial year ended 31 March 2011.

BOARD RESPONSIBILITY

The Board acknowledges that it is responsible for the Group’s internal control system (“Group Internal Control System”) and the review of its adequacy and integrity.

The Group Internal Control System in place is for purpose of managing the risk of the Group but does not eliminate the risk of failure to achieve business objectives. The Group Internal Control System provides only reasonable but not absolute assurance against material misstatement, loss or fraud.

The Board has in place an ongoing process, for identifying, evaluating, monitoring and managing the significant risks affecting the achievement of its business objectives throughout the period. The process is regularly reviewed by the Board and accords with the Statement on Internal Control: Guidance for Directors of Public Listed Companies.

KEY INTERNAL CONTROL PROCESSES

Enterprise Risk Management

A Group-wide risk management framework was established applicable to all functions in the Group, in operational, financial and support areas. In this structured risk management framework, the principal risks facing an operating unit of the Group are regularly reviewed and assessed, together with steps to manage those risks. The results of these reviews are placed on risk registers and, where necessary, specific action plans are developed to treat those risks with appropriate key performance indicators so as to monitor the implementation of these plans as well as the effectiveness of the processes.

In addition, periodic exercises are to be carried outat Group level, on a half-yearly basis, to identify key issues affecting the Group as a whole, the changing risk profile and the emerging issues that may have an impact on the Group’s business objectives. The output of these assessments and reviews will be reported to the senior management, the Audit Committee and the Board which will have the ultimate responsibility to continuously assess the effectiveness of the risk management processes so that the Group’s systems and internal controls are such designed to ensure that the Group’sexposuretoprincipalrisksisproperlymanaged. In this way, the systematic approach in the Group-wide risk management will help to optimise the effects of uncertainties or risks on the Group’s business objectives.

Audit Committee

The Audit Committee (“AC”), which is chaired by a SeniorIndependentNon-ExecutiveDirectordeliberateson findings and recommendations for improvement proposed by the internal and external auditors. TheAC also evaluates the adequacy and effectiveness of the Group’s risk management and system of internal control. Apart from reviewing the annual audit plan, the AC assesses the scope and quality of audit performed.

Further details on the AC are set out in the AC Report.

Internal Audit Function

The Internal Audit Function is carried out by the Group Internal Audit Department (“Group IAD”) of MTD Capital Bhd, the holding company. Group IAD independently carries out its function and provides the AC and the Board with the assurance on the adequacy and integrity of the system of internal control.

Group IAD reviews the internal control systems and procedures of the Group’s businesses based on the annual audit plan. The annual audit plan is reviewed and approved by the AC and the findings of the audits are submitted to the AC for review at their periodic meetings. Group IAD adopts a risk-based approach when establishing its audit plan and strategy. Responses from Management and action plans are regularly reviewed and followed up by Group IAD and the AC.

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Statement on I nternal Control (contd.)

Other Key Elements of Internal Control

Apart from the above, the other key elements of the Group Internal Control System include:

• Limits of authority are established to govern themanagement of financial and non financial approval limits;

• Formal operating structure in place with clearlydefined lines of responsibility and accountability;

• BoardCommitteeshavebeenestablishedtoassistthe Board in discharging its duties. The committee are:

- Audit Committee - Nomination Committee - Remuneration Committee - Management Committee

• Board Committees meet regularly to oversee theday-to-day operation and business affairs of the Group as well as guiding, directing and monitoring the activities to achieve the corporate objectives and goals of the Group;

• Policies and Procedures for key processes aredocumented to provide guidance to all levels of staff. The policies and procedures are reviewed and regularly updated when necessary;

• Whereappropriate,certaincompanieshavetheISOaccreditation for their operational processes;

• Comprehensiveoperationandfinancialreviewsbythe Board vide the quarterly financial reports;

• Strategic Business Plan and Annual OperatingBudget for business review of current financial year performance compared to the budget and previous financial year results, and projected three (3) years Strategic Business Plan and Annual Operating Budget of MTD Group are presented to the Board and Management Committee annually, for review, approval and adoption;

• Provisions of regular and comprehensiveinformation to management and employees;

• Key Performance Indicators (“KPIs”) are used tomeasure staff performance annually;

• Properguidelinesforhiringandterminationofstaff,and annual performance appraisal system are in place;

• Training and development programmes areidentified for employees to acquire the necessary knowledge and competency to meet their performanceandjobexpectations;

• The Whistle Blowing Policy is established toprovide an avenue and a structured mechanism for employees to raise or report concerns on any suspected wrongful activities or wrongdoing and to protect the value of integrity, transparency and accountability in where the Group conducts its business and affairs;

• Adequateinsurancecoverageprotectsagainstanymaterial loss or damage of assets and resources of the Group insured; and

• Regular visits to operating units by seniormanagement and internal auditors.

The Board is of the view that the system of internal control instituted throughout the Group is sound and effective. Notwithstanding this, reviews of all control procedures will be continuously carried out to ensure the ongoing effectiveness and adequacy of the system of internal control, so as to safeguard shareholders’ investment and the Group’s assets.

REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

TheexternalauditorshavereviewedthisStatementonInternal Control for inclusion in the annual report for financial year ended 31 March 2011 and reported to the Board that no material issue has come to their attention that causes them to believe that the statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of internal control.


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Group 5-year Financial H ighl ights

Revenue(RM million)

Pre-Tax Pro�t/(Loss)(RM million)

Earning/(Loss) Per Share(Sen)

Shareholder’s Fund(RM million)

Net Assets Per Share(RM)

80

60

40

20

0

-20

-40

-60

-80

2007 2008 2009 2010 2011 446.55 877.47 995.85 650.82 541.53

2007 2008 2009 2010 2011 (78.57)* 12.74 (49.15) (10.66) (14.34)

2007 2008 2009 2010 2011 (45) 2 (23) (8) (7)

1000

800

600

400

200

0

2007 2008 2009 2010 2011 1.17* 1.24 0.93 0.87 0.83

2.0

1.5

1.0

0.5

0

2007 2008 2009 2010 2011 244.11* 265.87 209.26 193.71 183.71

300

250

200

150

100

50

0

80

60

40

20

0

-20

-40

-60

-80

*Restated �gures


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Chairman’s StatementPe nya t a Pe n g e r u s i

Dear valued shareholders,

On behalf of the Board of Directors (Board), I am pleased to present to you the Annual Report of the Group for the financial year ended 31 March 2011.

Pemegang saham yang dihargai,

Bagi pihak Lembaga Pengarah, saya dengan sukacitanya membentangkan Laporan Tahunan Kumpulan bagi tahun kewangan berakhir 31 Mac 2011.

DATO’ DR. NIK HUSSAIN BIN ABDUL RAHMANChairman / Pengerusi

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Chairman’s Statement (contd.)

Penyata Pengerusi (samb.)

Financial HighlightsThe Group reported revenue of RM541.53 million, down 16.8% from previous year’s RM650.82 million. TheGroupregisteredahigherpre-tax lossofRM14.34million compared with RM10.66 million a year ago due to higher operating costs, which was exacerbated bylower progress billings recognition by the Engineering and Construction division as existing projects wereclose to completion, as well as lower utilization rate in the Manufacturing division.

DividendThe Board has proposed a first and final dividend of 1 sen per share less 25% income tax (2010: first andfinaldividendof1senpershareless25%incometax).

Engineering and ConstructionConstruction remained the mainstay of the Group’s business, contributing revenue of RM407.33 million (2010: RM497.37 million).

The construction of the RM1.2 billion East Coast Expressway Phase 2 project Package 10,which startsfrom Bukit Besi to Bukit Payung and Bukit Payung Spur

Sorotan KewanganKumpulan melaporkan hasil berjumlah RM541.53 juta, merosot 16.8% daripada RM650.82 juta yang dilaporkan pada tahun sebelumnya. Kumpulan mencatatkan kerugian sebelum cukai RM14.34 juta berbanding RM10.66 juta setahun lepas disebabkan kos operasi yang lebih tinggi, dan kesannya lebih meruncing dengan bil peringkat penyiapan lebih rendah bagi bahagian kejuruteraan dan pembinaan memandangkan projek sedia ada sudah hampir siap serta kadar penggunaan lebih rendah bagi bahagian Pembuatan.

DividenLembaga Pengarah telah mengesyorkan dividen pertama dan terakhir 1 sen sesaham ditolak cukai pendapatan 25% (2010: dividen pertama dan terakhir 1 sen ditolak cukai pendapatan 25%).

Kejuruteraan dan PembinaanPembinaan terus menjadi tunggak perniagaan Kumpulan, menjana hasil berjumlah RM407.33 juta (2010: RM497.37 juta).

Pembinaan Pakej 10 projek Lebuhraya Pantai Timur Fasa 2 bernilai RM1.2 billion, yang bermula dari Bukit Besi ke Bukit Payung dan Cabang Jalan Bukit Payung, terus menjadi pemacu utama hasil Kumpulan dan projek dijangka siap pada tahun kewangan semasa.

Sementara itu, projek tempat letak kereta berbilang tingkat Terminal Putera bernilai RM28.85 juta dibangunkan Kumpulan, yang dibina menggunakan kaedah Sistem Binaan Perindustrian (IBS), juga dijangka siap pada tahun kewangan semasa.

Di bahagian utara, kerja penuangan galang kotak besar bersegmen bagi Jambatan Kedua Pulau Pinang sedang berjalan lancar dengan 867 segmen telah dituang, daripada sejumlah 8,092 segmen sehingga akhir Mac 2011.

Terminal Putra multi-storey car park projectProjek tempat letak kereta berbilang tingkat Terminal Putra

Road, continues to drive the Group’s revenue and is expectedtobecompletedinthecurrentfinancialyear.

Meanwhile, the Group’s RM28.85 million Terminal Putra multi-storey carpark project, which is constructed using the Industrial Building System (IBS) method, is also anticipated to be completed in the current financial year.

Up in the north, the casting of huge segmental boxgirders for the Penang Bridge Second Crossing is progressing well with 867 segments casted, out of a total of 8,092 segments as at end of March 2011.



32


Thedivision recordedapre-tax lossof RM9.42million(2010: Pre-tax profit RM5.23 million) in the financialyear under review. This was mainly attributed to the crystallization of the Performance Bond for the “Projek Jalan Raya Simpang Pulai-Lojing-Gua Musang” of RM14.10 million by the Government of Malaysia. The management is currently exploring variousoptions torecover this Bond.

ManufacturingThe Manufacturing division contributed RM200.63 millioninrevenue(2010:RM222.36million)whilepre-taxloss narrowed to RM4.30 million versus loss of RM10.17 million in the preceding year. The Group will continue to implement stringent measures to contain cost and achievegreaterefficiencyinthedivision.

Meanwhile in Singapore, the Group had completed the supply of railway sleepers and precast components for the Circle Line Mass Rapid Transit (MRT) totaling RM25.0 million. The Group is currently engaged in the supply of Tunnel Segmental Linings, Railway Sleepers and various precast components for the Downtown Line of the MRT amounting to RM76.0 million.

Corporate DevelopmentOn 1 July 2010, MTD ACP Precast Sdn Bhd, a wholly-owned subsidiary of MTD ACPI Engineering Berhad, and Al Meraikhi Industrial Complex, a major precastmanufacturer in the United Arab Emirates (UAE), entered into a shareholder agreement to incorporate a 49:51 joint venture company in Abu Dhabi, UAE. On 26 May 2011, the two parties signed a joint venture agreement and simultaneously entered into a contract with Samsung C&T Corporation to undertake the supply of precast tunnel segments for the STEP Deep Tunnel Sewer T-01 project in Abu Dhabi. The total value of the contract is ArabEmiratesDirham(AED)71.0million(approximatelyRM58.0million)withproductionexpectedtocommencein fourth quarter of 2011 and targeted for completion in third quarter of 2013.

The Group expects the contract to further enhanceits presence in the Middle East region following the successful completion of an earlier contract to supply railway tunnel linings in Dubai, UAE.

Bahagian ini mencatatkan kerugian sebelum cukai RM9.42 juta (2010: keuntungan sebelum cukai RM5.23 juta) pada tahun kewangan yang dilaporkan. Kerugian ini disebabkan terutamanya oleh penunaian Bon Prestasi bagi “Projek Jalan Raya Simpang Pulai-Lojing-Gua Musang” bernilai RM14.10 juta oleh Kerajaan Malaysia. Pengurusan kini sedang meneroka pelbagai pilihan untuk mendapatkan kembali Bon ini.

PembuatanBahagian Pembuatan menyumbang hasil berjumlah RM200.63 juta (2010: RM222.36 juta) manakala kerugian sebelum cukai menyusut kepada RM4.30 juta berbanding kerugian RM10.17 juta pada tahun sebelumnya. Kumpulan akan terus menyusun langkah rapi untuk menampung kos dan mencapai tahap kecekapan lebih tinggi bagi bahagian ini.

Sementara itu di Singapura, Kumpulan telah menyempurnakan pembekalan ranjang landas dan komponen pratuang bagi projek Circle Line Mass Rapid Transit (MRT) yang bernilai RM25.0 juta. Kumpulan kini terlibat dalam pembekalan Pelapik Segmen Terowong, Ranjang Landas Kereta Api dan pelbagai komponen

pratuang bagi Rangkaian MRT Pusat Bandar yang bernilai RM76.0 juta.

Perkembangan Korporat Pada 1 Julai 2010, MTD ACP Precast Sdn Bhd, anak syarikat milik penuh MTD ACPI Engineering Berhad, dan Al Meraikhi Industrial Complex, pengilang pratuang utama di Emiriah Arab Bersatu (UAE), memeterai perjanjian pegangan saham untuk menubuhkan syarikat usaha sama 49:51 di Abu Dhabi, UAE. Pada 26 Mei 2011, kedua-dua pihak menandatangani perjanjian usaha sama dan bersama-sama memeterai kontrak dengan Samsung C&T Corporation untuk membekalkan segmen terowong pratuang bagi projek STEP Deep Tunnel Sewer T-01 di Abu Dhabi. Nilai kontrak berjumlah 71.0 juta Dirham Emiriah Arab Bersatu (AED) (kira-kira RM58.0 juta) dengan pengeluaran dijangka bermula pada suku keempat 2011 dan dijangka siap menjelang suku ketiga 2013.

Kumpulan yakin kontrak ini akan mengukuhkan lagi kedudukannya di rantau Timur Tengah berikutan kejayaannya menunaikan kontrak terdahulu untuk membekalkan pelapik terowong kereta api di Dubai, UAE.


A N N U A L R E P O R T 2 0 1 1

33

ProspectsThe Group expects a challenging outlook in the nearterm on the back of delays in new roll out of infrastructure projects. The management has remained vigilant and mindful of opportunities ahead by undertaking on-going review of its bidding strategy to ensure the Group’s competitiveness is aligned to the current industry requirements. The on-going review, however, is not likely to have an immediate effect to the Group’s performance in the near term. Barring any unforeseen circumstances, the Group expects a modest recoveryahead.

Changes in BoardroomOn 23 September 2010, Dato’ Seri Haji Noordin Omar and Dato’ Rusma Ibrahim retired as independent and non-independentnon-executivedirectorsrespectively. I would like to thank them for their valuable contributions to the Board and the Company.

AppreciationOn behalf of the Board, I would like to express ourappreciation to our faithful shareholders for their confidence in the Company.

I would also like to recognize the hard work demonstrated by the dedicated and persistent management team and staff who have worked endlessly in ensuring the Group’s underlying fundamentals remained intact despite thedifficult times endured inthe year under review.

Last but not least, I would like to thank my fellow Board members for their guidance and counsel throughout the year.

DATO’ DR. NIK HUSSAIN BIN ABDUL RAHMANChairman

ProspekKumpulan meramalkan persekitaran perniagaan yang mencabar dalam jangka pendek berasaskan kelewatan pelancaran projek infrastruktur baru. Pihak pengurusan sentiasa mengambil langkah berhati-hati dan menilai peluang yang wujud dengan melaksanakan kajian berterusan terhadap strategi pembidaan semasa untuk memastikan daya saing Kumpulan menepati keperluan semasa industri. Penilaian yang sedang dilaksanakan bagaimanapun tidak memberikan kesan serta-merta kepada prestasi Kumpulan dalam jangka pendek. Sekiranya tiada perkara luar jangka berlaku, Kumpulan meramalkan pemulihan sederhana dalam tempoh yang mendatang.

Perubahan Lembaga PengarahPada 23 September 2010, Dato’ Seri Haji Noordin Omar dan Dato’ Rusma Ibrahim masing-masing bersara sebagai pengarah bukan eksekutif bebas dan bukan bebas. Saya mengambil kesempatan ini untuk mengucapkan terima kasih kepada mereka atas sumbangan berharga yang diberikan kepada Lembaga Pengarah dan Syarikat.

PenghargaanBagi pihak Lembaga Pengarah, saya ingin merakamkan penghargaan kami kepada pemegang saham kami yang setia, kerana keyakinan mereka terhadap Syarikat.

Saya juga ingin mengiktiraf kesungguhan yang ditunjukkan oleh pasukan pengurusan dan kakitangan yang telah bertungkus-lumus mengukuhkan asas kedudukan kumpulan meskipun terpaksa mengharungi cabaran pada tahun yang dilaporkan.

Akhir sekali tetapi tidak kurang pentingnya, saya ingin mengucapkan terima kasih kepada rakan seperjuangan saya di Lembaga Pengarah di atas panduan dan nasihat mereka sepanjang tahun.

DATO’ DR. NIK HUSSAIN BIN ABDUL RAHMANPengerusi

Penang Bridge Second CrossingJambatan Kedua Pulau Pinang


Group Corporate S ocial Responsibi l i t y

MTD ACPI Engineering Berhad, being part of the

MTD Group endeavours to maintain a balance

in its business undertakings by ensuring a good business

performance as well as good social and environmental

performance across the companies within the Group.

In Philippines, the Group partnered with the Rotary Club of Makati Rockwell, Department of Environment and Natural Resources, Career Executive Service Board and Career Executive ServiceOfficersforatree-plantingprojectinourSouthLuzonExpressway(SLEX). About 820 seedlings of golden shower, 200 of balitbitan, 200 palawan cherries and 150 caballeros were planted over an aggregate span of 5 kilometres, from San Pedro to Southwoods in November 2010.

The Group also showed good faith by offering toll fee discounts to motorists between January 1 and March 31, 2011, despite receiving approval from the Philippines Government to implement new toll rates. During Christmas Eve of 2010 and New Year Eve of 2011, from 10pm and 6am, motorists were offered free use of SLEX, as part of efforts to ease burden for travellers rushing home for the holidays.


34

Group Corporate S ocial Responsibi l i t y (contd.)

Toll discounts were also offered within the Malaysian home ground, with discounts at the East-West Link Expressway (EWL) and toll free passage at the EastCoast Expressway, during hari raya and chinese newyear celebrations respectively in September 2010 and February 2011.

The Group co-produced a video entitled “Rancang Awal-awal” with the Malaysian Highway Authority and 22 other toll concessionaires, in which 20,000 VCDs were distributed to schools nationwide. The video is aimed at instilling road safety conscience among school going children as change agents in the future. The VCD was launched by the Minister of Works.

As part of employees engagement, MTD Group also organized sports & recreation activities for staff during the year under review to promote healthy living and adopting work-life balance.

The Group also contributed 14 vehicles to the Polis DiRaja Malaysia to support efforts to increase vigilance for its highway users. 13 Mitsubishi Lancer 2.0 and one Mitsubishi Pajero Sport were handed to the Inspector-General of Police during the anniversary celebration of Police Day, witnessed by the Home Minister.

On 16 May 2011, the Group voluntarily ceased toll collection of EWL in Kuala Lumpur, 8 years ahead of its concession agreement without compensation, which is estimated at RM180 million.

In addition, the Group together with the Alloy Group contributed RM100,000 in gift form as a corporate partner under the Sahabat Korporat Tabung Haji programme.

A N N U A L R E P O R T 2 0 1 1

35

Authorised Share Capital : RM500,000,000.00

Issued and Fully Paid-up Share Capital : RM231,632,798.00

No. of Treasury Shares held : 637,000

Class of Shares : Ordinary Shares of RM1.00 each

Voting Rights : One vote per shareholder on a show of hands or one vote per ordinary share on a poll

No. of Shareholders : 5,289

Analysis of Shareholdingsas at 29 July 2011


36

ANALYSIS BY SIZE OF SHAREHOLDINGS

Category No. of Holders No. of Shares Percentage (%) Malaysian Foreign Malaysian Foreign Malaysian Foreign Less than 100 shares 250 2 8,054 85 0.003 * 100 to 1,000 shares 2,431 20 1,134,199 10,150 0.491 0.0041,001 to 10,000 shares 1,953 41 7,766,730 149,000 3.362 0.06510,001 to 100,000 shares 502 15 14,301,010 572,600 6.191 0.248100,001 to less than 5% of issued shares 65 5 27,598,961 1,741,300 11.948 0.7545% and above of issued shares 5 - 177,713,709 - 76.934 -

TOTAL 5,206 83 228,522,663 2,473,135 98.929 1.071

* Negligible

DIRECTORS’ SHAREHOLDINGS Direct IndirectDirectors No. of Shares Percentage (%) No. of Shares Percentage (%)

Dato’ Dr. Nik Hussain bin Abdul Rahman - - 156,565,409(1) 67.78Dato’ Azmil Khalili bin Dato’ Khalid - - 156,565,409(2) 67.78

Notes: (1) Deemed interested by virtue of his interests in MTD Capital Bhd (“MTD”) through his and his children’s major shareholdings in

Nikvest Sdn Bhd, a major shareholder of MTD, and his daughter’s substantial interest in Alloy Consolidated Sdn Bhd (“Alloy”),

a major shareholder of MTD. (2) Deemed interested by virtue of his spouse’s substantial interest in Alloy.

Analysis of Shareholdings (contd.)

A N N U A L R E P O R T 2 0 1 1

37

SUBSTANTIAL SHAREHOLDERS (EXCLUDING BARE TRUSTEES)

Shareholders Direct Indirect No. of Shares Percentage (%) No. of Shares Percentage (%)

MTD Equity Sdn Bhd (MTD Equity) 88,000,000 (1) 38.10 - - Metacorp Berhad (Metacorp) 27,254,610 11.80 - - Lembaga Tabung Haji 23,163,100 10.03 - - Alloy Capital Sdn Bhd (ACSB) 39,295,999 17.01 117,269,410(2) 50.77Lambang Simfoni Sdn Bhd (Lambang Simfoni) - - 27,254,610(3) 11.80MTD Capital Bhd (MTD) 2,014,800 0.87 115,254,610(4) 49.89Nikvest Sdn Bhd (Nikvest) - - 117,269,410(5) 50.77Alloy Consolidated Sdn Bhd (Alloy) - - 156,565,409(6) 67.78Dato’ Dr. Nik Hussain bin Abdul Rahman - - 156,565,409(7) 67.78Dato’ Azmil Khalili bin Dato’ Khalid - - 156,565,409(8) 67.78Haji Nik Fauzi bin Dato’ Nik Hussein - - 117,269,410(9) 50.77Nik Faizul bin Dato’ Nik Hussain - - 117,278,660(10) 50.77Datin Nik Fuziah binti Dato’ Nik Hussein - - 156,565,409(11) 67.78Datuk Mohd Dom Ahmad - - 156,565,409(11) 67.78Ruslan Sulaiman - - 156,565,409(11) 67.78

Notes: (1) Inclusive of 60,000,000 shares held through a nominee company. (2) Deemed interested by virtue of its major shareholding in MTD. (3) Deemed interested by virtue of its major shareholding in Metacorp. (4) Deemed interested by virtue of the interests of its wholly-owned subsidiaries namely MTD Equity and Metacorp. (5) Deemed interested by virtue of its major shareholding in MTD. (6) Deemed interested by virtue of the interests of its subsidiaries namely, MTD and ACSB. Alloy has direct shareholding of 26.01%

and indirect shareholding of 51.18% in MTD through its wholly-owned subsidiaries, ACSB (47.78%) and Alloy Consolidated

Engineering Sdn Bhd (3.40%). (7) Deemed interested by virtue of his interests in MTD through his and his children’s major shareholdings in Nikvest and his daughter’s

substantial interest in Alloy. (8) Deemed interested by virtue of his spouse’s subtantial interest in Alloy. (9) Deemed interested by virtue of his major shareholding in Nikvest. (10) Deemed interested by virtue of his spouse’s shareholding in MTD ACPI Engineering Berhad and his major shareholding in

Nikvest. (11) Deemed interested by virtue of their major shareholdings in Alloy.

Analysis of Shareholdings (contd.)


38

THIRTY LARGEST SHAREHOLDERS (without aggregating the securities from different securities accounts belonging to the same person)

No. Shareholders No. of Shares Percentage (%)

1. CIMB Group Nominees (Tempatan) Sdn Bhd 60,000,000 25.97 Pledged Securities Account for MTD Equity Sdn Bhd (50185 CBD) 2. Mayban Securities Nominees (Tempatan) Sdn Bhd 39,295,999 17.01 Pledged Securities Account for Alloy Capital Sdn Bhd (Offer Acc ACPI) 3. MTD Equity Sdn Bhd 28,000,000 12.12 4. Metacorp Berhad 27,254,610 11.80 5. Lembaga Tabung Haji 23,163,100 10.03 6. Goh Yin 2,300,000 1.00 7. MTD Capital Bhd 2,014,800 0.87 8. Alliancegroup Nominees (Tempatan) Sdn Bhd 2,000,000 0.87 Pledged Securities Account for Tan Kian Chuan (8059299) 9. Chua Hock Chin 1,513,911 0.66 10. TA Nominees (Tempatan) Sdn Bhd 1,300,000 0.56 Pledged Securities Account for Chong Khong Shoong 11. BI Nominees (Tempatan) Sdn Bhd 1,275,750 0.55 Langkah Taat (M) Sdn Bhd 12. Mayban Nominees (Tempatan) Sdn Bhd 1,170,600 0.51 Pledged Securities Account for Chong Khong Shoong 13. Citigroup Nominees (Tempatan) Sdn Bhd 926,700 0.40 Pledged Securities Account for Tan Kian Auk (740028152) 14. HSBC Nominees (Asing) Sdn Bhd 862,500 0.37 Exempt AN for HSBC Private Bank (Suisse) S.A. (Spore TST AC CL) 15. Pertubuhan Keselamatan Sosial 857,800 0.37 16. Zuraida binti Md Adib 750,000 0.32 17. Kejutaan Vital Properties Sdn Bhd 700,000 0.30 18. Tan Kheng Min 690,500 0.30 19. Mayban Securities Nominees (Tempatan) Sdn Bhd 615,400 0.27 Pledged Securities Account for Liew Thin Sang (R02-MARGIN) 20. Tan Eng Hai 559,900 0.24 21. Mayban Nominees (Tempatan) Sdn Bhd 555,000 0.24 Pledged Securities Account for Chung Chit Min 22. Upstream Downstream Process & Services Sdn Bhd 501,500 0.22 23. Soon Khiat Voon 500,000 0.22 24. Ten Thye Kian 440,900 0.19 25. Choong Yean Yaw 413,200 0.18 26. Teh Shiou Cherng 407,800 0.18 27. BI Nominees (Tempatan) Sdn Bhd 352,500 0.15 Kamaruddin bin Ahmad 28. F.I.T Nominees (Asing) Sdn Bhd 350,000 0.15 Pledged Securities Account for Tina Yu-Chen Lee (MG0099-198) 29. Lim Siao Gia (Lin Xiaojia) 318,300 0.14 30. F.I.T Nominees (Asing) Sdn Bhd 300,000 0.13 Pledged Securities Account for Liu Lee, Hsiu-Lin (MG0163-198) TOTAL 199,390,770 86.32

Notes:

The analysis of shareholdings is based on the Record of Depositors as at 29 July 2011, net of 637,000 treasury shares held.

Directors’ report anD auDiteD Financial statements

Directors' Report Statement by DirectorsStatutory DeclarationIndependent Auditors' ReportStatements of Comprehensive IncomeStatements of Financial PositionConsolidated Statement of Changes in EquityCompany Statement of Changes in EquityConsolidated Statement of Cash FlowsCompany Statement of Cash FlowsNotes to the Financial Statements

40 - 444545

46 - 4748

49 - 505152

53-5455

56 - 142

40m t D a c p i e n G i n e e r i n G B e r H a D

Directors’ report

The directors hereby present their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 March 2011.

principal activities The principal activities of the Company are investment holding and project management.

The principal activities of the subsidiaries are described in Note 17 to the financial statements.

There have been no significant changes in the nature of the principal activities during the financial year, other than that disclosed in Note 17 to the financial statements.

results

Group company rM’000 rM’000 Loss net of tax 14,641 4,566

Loss attributable to: Owners of the parent 15,024 4,566 Minority interests (383) -

14,641 4,566

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 other than the following:

(i) the effects arising from the changes in accounting policies due to the adoption of FRS 139 Financial Instruments: Recognition and Measurement which has resulted in an increase in the Group’s loss net of tax by RM1,628,000 respectively as disclosed in Note 2.2 to the financial statements; and

(ii) release of RM14,100,000 bank guarantee by a subsidiary in respect of retention bond resulting in RM12,824,000 being recognised in the loss before tax as disclosed in Note 34 to the financial statements.

Direc tors’ Repor t

41a n n u a l r e p o r t 2 0 1 1

DiviDenDs

The amount of dividends declared and paid by the Company since 31 March 2010 were as follows: rM’000 In respect of the financial year ended 31 March 2010 as reported in the directors’ report of that year:

First and final dividend of 1 sen per share less 25% taxation, on 231,632,798ordinary shares of RM1 each, less 637,000 treasury shares, approvedon 23 September 2010 and paid on 29 October 2010 1,732

At the forthcoming Annual General Meeting, a first and final dividend in respect of the year ended 31 March 2011, of 1 sen per share less 25% taxation on 231,632,798 ordinary shares of RM1 each less 637,000 treasury shares, amounting to a dividend payable of RM1,732,468 (0.75 sen net per ordinary share) will be proposed for shareholders’ approval. The financial statements for the current 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 year ending 31 March 2012.

Directors

The names of the directors of the Company in office since the date of the last report and at the date of this report are: Dato’ Dr. Nik Hussain bin Abdul RahmanDato’ Azmil Khalili bin Dato’ KhalidLee Leong YowKeith George CowlingMd. Shukor bin MohamedDato’ Ir. A. Rashid bin OmarDato’ Ir. Kalid bin AliasNik Din bin Nik SulaimanDato’ Seri Haji Noordin bin Omar (Retired on 23 September 2010)Dato’ Rusma binti Ibrahim (Retired on 23 September 2010)

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 the acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Notes 9 and 10 to the financial statements or the fixed salary of full time employees of the Company and related corporations) 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 39 to the financial statements.

Direc tors’ Repor t(contd.)


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 ------> 1 april 31 March 2010 acquired sold 2011the company indirect interest Dato’ Dr. Nik Hussain bin Abdul Rahman 117,269,410 (1) 39,295,999 @ - 156,565,409 Dato’ Azmil Khalili bin Dato’ Khalid 117,269,410 (2) 39,295,999 @ - 156,565,409

immediate holding company - MtD capital bhd.

Direct interestDato’ Dr. Nik Hussain bin Abdul Rahman 516,004 - (516,004) ** - Dato’ Azmil Khalili bin Dato’ Khalid 729,940 - (729,940) ** -Lee Leong Yow 12,000 - (12,000) ** - Keith George Cowling 327,000 - (327,000) ** -

indirect interestDato’ Dr. Nik Hussain bin Abdul Rahman 134,502,924 ( ) 115,709,614 ^ (5,270,554) # 244,941,984 Dato’ Azmil Khalili bin Dato’ Khalid 72,787,430 ( ) 115,709,614 ^ - 188,497,044

ultimate holding company - alloy consolidated sdn. bhd.

indirect interestDato’ Dr. Nik Hussain bin Abdul Rahman 12,015,000 ( ) - - 12,015,000Dato’ Azmil Khalili bin Dato’ Khalid 12,015,000 ( ) - - 12,015,000

(1) Deemed interested by virtue of his interests in MTD Capital Bhd., a major shareholder of the Company through his and his children’s shareholdings in Nikvest Sdn. Bhd., a major shareholder of MTD Capital Bhd. and his daughter’s substantial interest in Alloy Consolidated Sdn. Bhd., a major shareholder of MTD Capital Bhd..

(2) Deemed interested by virtue of his spouse’s substantial interest in MTD Capital Bhd., a major shareholder of the Company through Alloy Consolidated Sdn. Bhd..

(3) Deemed interested by virtue of his and his children’s interests in Nikvest Sdn. Bhd., a major shareholder of MTD Capital Bhd.; his daughter’s substantial interest in Alloy Consolidated Sdn. Bhd., a major shareholder of MTD Capital Bhd; and shares held by his spouse and son.

(4) Deemed interested by virtue of his and his children’s interests in Nikvest Sdn. Bhd., a major shareholders of MTD Capital Bhd.; and his daughter’s substantial interest in Alloy Consolidated Sdn. Bhd., a major shareholder of

MTD Capital Bhd.. (5) Deemed interested by virtue of his spouse’s substantial interest in MTD Capital Bhd. through Alloy Consolidated

Sdn. Bhd..(6) Deemed interested by virtue of his daughter’s interest in Alloy Consolidated Sdn. Bhd..(7) Deemed interested by virtue of his spouse’s interest in Alloy Consolidated Sdn. Bhd..

3

5

6 (6)

(1)

(4)

(7)

(2)

(5)

7


43a n n u a l r e p o r t 2 0 1 1

Directors’ interests (contD.)

@ Acquisition of the Company’s shares and take-over offer by Alloy Capital Sdn. Bhd., a wholly-owned subsidiary of Alloy Consolidated Sdn. Bhd..** Acceptance pursuant to take-over offer.^ Acquisition of MTD Capital Bhd.’s shares and take-over offer by Alloy Capital Sdn. Bhd., a wholly-owned subsidiary of Alloy Consolidated Sdn. Bhd..# Acceptance by his spouse and his son pursuant to take-over offer.

By virtue of Dato’ Dr. Nik Hussain bin Abdul Rahman and Dato’ Azmil Khalili bin Dato’ Khalid deemed interests in shares in the Company, they are deemed to have interests in the shares of all subsidiaries of the Company to the extent the Company has an interest.

None of the other directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year.

other statutory inforMation

(a) Before the statements of 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.



subsequent events

Details of subsequent events are disclosed in Note 44 to the financial statements. 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 26 July 2011.

Dato’ Dr. Nik Hussain bin Abdul Rahman Dato’ Azmil Khalili bin Dato’ Khalid

other statutory inforMation (contD.)

(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 financial end of the 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.


45a n n u a l r e p o r t 2 0 1 1

We, Dato’ Dr. Nik Hussain bin Abdul Rahman and Dato’ Azmil Khalili bin Dato’ Khalid, being two of the directors of MTD ACPI Engineering Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 48 to 142 are drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 March 2011 and of their financial performance and cash flows for the year then ended.

The information set out in Note 46 to the financial statements have been prepared in accordance with the 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 26 July 2011.

Dato’ Dr. Nik Hussain bin Abdul Rahman Dato’ Azmil Khalili bin Dato’ Khalid

I, Chan Chi Lee, being the officer primarily responsible for the financial management of MTD ACPI Engineering Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 48 to 142 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 bythe abovenamed Chan Chi Lee at Kuala Lumpur in Wilayah Persekutuan on 26 July 2011. Chan Chi Lee Before me,

Statement by Direc tors

Statutor y Declarat ion

Pursuant to Sec t ion 169(15) of the Companies Ac t , 1965

Pursuant to Sec t ion 169(16) of the Companies Ac t , 1965


report on the financial stateMents

We have audited the financial statements of MTD ACPI Engineering Berhad, which comprise the statements of financial position as at 31 March 2011 of the Group and of the Company, and the statements of 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 notes, as set out on pages 48 to 142.

Directors’ responsibility for the financial statements

The directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the directors determine are 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 whether the financial statements are free from material misstatement.

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

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

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 March 2011 and of their financial performance and cash flows for the year then ended.

I ndependent Auditors’ Repor tto the members of MTD ACPI Engineer ing Berhad ( I ncorporated in Malays ia)

47a n n u a l r e p o r t 2 0 1 1

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.

other Matters

The supplementary information set out in Note 46 on page 142 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. 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.

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 George KoshyAF: 0039 No. 1846/07/13(J)Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia26 July 2011

to the members of MTD ACPI Engineer ing Berhad ( I ncorporated in Malays ia) (contd.)

I ndependent Auditors’ Repor t


Group company note 2011 2010 2011 2010 rM’000 rM’000 rM’000 rM’000

Revenue 4 541,530 650,819 - -Cost of sales 5 (515,661) (612,288) - -

Gross profit 25,869 38,531 - -

other items of income Other income 6 10,624 16,765 11,933 13,204

other items of expense Selling and marketing expenses (5,045) (8,264) - - Administrative and other expenses (41,751) (48,907) (7,167) (6,070) Finance costs 7 (6,068) (6,281) (9,040) (8,162)

Share of results of associates 391 (2,508) - -Share of results of joint venture 1,640 - - -

loss before tax 8 (14,340) (10,664) (4,274) (1,028)Income tax expense 11 (301) (5,860) (292) (541)

loss net of tax (14,641) (16,524) (4,566) (1,569)

other comprehensive income for the year, net of tax Foreign currency translation (802) 4,510 - -

total comprehensive income for the year (15,443) (12,014) (4,566) (1,569)

loss attributable to:Owners of the parent (15,024) (18,344) (4,566) (1,569)Minority interests 383 1,820 - -

(14,641) (16,524) (4,566) (1,569)

total comprehensive income attributable to:Owners of the parent (15,826) (13,834) (4,566) (1,569)Minority interests 383 1,820 - -

(15,443) (12,014) (4,566) (1,569)

loss per share attributable to owners of the parent (sen per share) Basic 12 7 8

Statements of Comprehensive I ncomeFor the financial year ended 31 March 2011

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

49a n n u a l r e p o r t 2 0 1 1

Group company note 2011 2010 1.4.2009 2011 2010 rM’000 rM’000 rM’000 rM’000 rM’000 (restated) (restated)

assets

non-current assetsProperty, plant and equipment 14 122,993 141,693 155,294 1,684 1,482Investment properties 15 278 420 431 - -Intangible asset 16 63,858 56,651 59,865 - -Investments in subsidiaries 17 - - - 148,316 138,516Investments in associates 18 18,383 17,974 20,466 - -Interest in joint venture 19 4,206 - - - -Other investments 20 412 335 335 261 261Trade receivables 21 7,488 6,170 10,707 - -Deferred tax assets 24 4,475 1,802 3,226 - -

222,093 225,045 250,324 150,261 140,259

current assetsInventories 25 49,582 42,334 66,532 - -Trade and other receivables 21 314,126 251,004 238,192 447,084 431,850Other current assets 22 22,955 28,363 61,367 45 176Income tax recoverable 5,100 1,861 594 624 -Cash and bank balances 26 30,859 61,471 129,680 2,623 3,064

422,622 385,033 496,365 450,376 435,090Non-current asset held for sale 27 225 - 8,286 - -

422,847 385,033 504,651 450,376 435,090

total assets 644,940 610,078 754,975 600,637 575,349

Statements of Financial Posit ionAs at 31 March 2011


Group company note 2011 2010 1.4.2009 2011 2010 rM’000 rM’000 rM’000 rM’000 rM’000 (restated) (restated)

equity and liabilities

current liabilitiesDefined benefit plan 30 141 381 311 - 42Loans and borrowings 31 72,817 57,120 129,060 9,395 4,061Trade and other payables 33 210,823 217,092 346,326 206,539 180,335Gross amount due to customers for contract 23 114,355 66,022 6,452 - -Provisions 34 5,164 1,697 - - -Income tax payable 140 1,377 1,258 - 89

403,440 343,689 483,407 215,934 184,527

net current assets 19,407 41,344 21,244 234,442 250,563

non-current liabilitiesDefined benefit plan 30 12,258 11,218 10,465 288 229Loans and borrowings 31 931 9,080 9,775 - -Deferred tax liabilities 24 495 269 1,441 230 110Trade payables 33 35,391 43,784 34,119 - -

49,075 64,351 55,800 518 339

total liabilities 452,515 408,040 539,207 216,452 184,866

net assets 192,425 202,038 215,768 384,185 390,483

equity attributable to owners of the parentShare capital 28 231,633 231,633 231,633 231,633 231,633Treasury shares 28 (1,905) (1,905) (1,905) (1,905) (1,905)Reserves (46,018) (36,022) (20,472) 154,457 160,755

183,710 193,706 209,256 384,185 390,483Minority interests 8,715 8,332 6,512 - -

total equity 192,425 202,038 215,768 384,185 390,483

total equity and liabilities 644,940 610,078 754,975 600,637 575,349


Statements of Financial Posit ionAs at 31 March 2011 (contd.)

51a n n u a l r e p o r t 2 0 1 1

Foreign Capital currency Share Treasury Share redemption translation Other Accumulated Minority Total capital shares premium reserve reserve reserves losses Total interests equity (Note 28) (Note 28) (Note 29(a)) (Note 29(b)) (Note 29(c)) RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Opening balance at 1 April 2009 231,633 (1,905) 108,138 90 (7,896) 99 (120,903) 209,256 6,512 215,768Total comprehensive income - - - - 4,510 - (18,344) (13,834) 1,820 (12,014)

Transactions with ownersShare of associate’s capital reserve - - - - - 16 - 16 - 16Subsidiary’s bonus issue capitalised from retained profits - - - - - 4,000 (4,000) - - -Dividends on ordinary shares (Note 13) - - - - - - (1,732) (1,732) - (1,732)Total transactions with owners - - - - - 4,016 (5,732) (1,716) - (1,716)Closing balance at 31 March 2010 231,633 (1,905) 108,138 90 (3,386) 4,115 (144,979) 193,706 8,332 202,038

Opening balance at 1 April 2010 231,633 (1,905) 108,138 90 (3,386) 4,115 (144,979) 193,706 8,332 202,038Effects of adopting FRS 139 (Note 2.2) - - - - - - 7,467 7,467 - 7,467 231,633 (1,905) 108,138 90 (3,386) 4,115 (137,512) 201,173 8,332 209,505

Total comprehensive income - - - - (802) - (15,024) (15,826) 383 (15,443)

Transactions with ownersShare of associate’s capital reserve - - - - - 95 - 95 - 95Subsidiary’s bonus issue capitalised from retained profits - - - - - 25,000 (25,000) - - -Dividends on ordinary shares (Note 13) - - - - - - (1,732) (1,732) - (1,732)Total transactions with owners - - - - - 25,095 (26,732) (1,637) - (1,637)Closing balance at 31 March 2011 231,633 (1,905) 108,138 90 (4,188) 29,210 (179,268) 183,710 8,715 192,425

Consol idated Statement of Changes in Equit yFor the financial year ended 31 March 2011


|------------------------ Attributable to equity holders of the Company ------------------------| |---------- Non-distributable reserves ----------|


|--non-distributable reserves--| Distributable capital share treasury share redemption retained total capital shares premium reserve earnings equity (note 28) (note 28) (note 29(a)) (note 29(d)) rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

opening balance at 1 april 2009 231,633 (1,905) 108,138 90 55,828 393,784Total comprehensive income - - - - (1,569) (1,569)Dividends on ordinary shares (Note 13) - - - - (1,732) (1,732)closing balance at 31 March 2010 231,633 (1,905) 108,138 90 52,527 390,483

opening balance at 1 april 2010 231,633 (1,905) 108,138 90 52,527 390,483Total comprehensive income - - - - (4,566) (4,566)Dividends on ordinary shares (Note 13) - - - - (1,732) (1,732)

closing balance at 31 March 2011 231,633 (1,905) 108,138 90 46,229 384,185

Company Statement of Changes in Equit yFor the financial year ended 31 March 2011


53a n n u a l r e p o r t 2 0 1 1

2011 2010 note rM’000 rM’000

operating activities

Loss before tax (14,340) (10,664)Adjustments for: Interest income 6 (611) (3,077) Impairment losses on non-financial assets 8 2,593 4,505 Depreciation of property, plant and equipment 8 10,401 12,297 Depreciation of investment properties 8 17 11 Property, plant and equipment written off 8 397 529 Gain on disposals of property, plant and equipment 6 (3,202) (5,901) Gain on disposals of investment property 6 (54) - Gain on disposals of non-current assets held for sale 6 - (2,114) Loss recognised on re-measurement to fair value less costs to sell 8 15 - Net impairment losses on financial assets 8 2,594 1,373 Net reversal of allowance for impairment loss of trade receivables 6 - (2,324) Net reversal of allowance for impairment loss of other receivables 6 (2,038) - Bad debts written off 8 120 3 Inventories written off 8 64 2 Net fair value adjustments on trade receivables 6 (89) - Net fair value adjustments on trade payables 8 1,717 - Provision 8 17,567 (23) Interest expense 7 6,068 6,281 Unrealised foreign exchange (gain)/loss 6,8 (1,195) 1,405 Increase in liabilities for retirement benefit obligations 9 1,431 1,021 Share of results of associates (391) 2,508 Share of results of joint venture (1,640) -Total adjustments 33,764 16,496

operating cash flows before changes in working capital 19,424 5,832

Changes in working capital (Increase)/decrease in inventories (7,312) 24,196 Increase in trade and other receivables (64,374) (2,195) Decrease in other current assets 7,642 33,004 Decrease in trade and other payables (8,352) (117,849) Decrease in provisions (14,100) - Increase in amount due to customers for contract 48,333 59,570Total changes in working capital (38,163) (3,274)

Cash flows (used in)/from operations (18,739) 2,558 Retirement benefit paid (631) (198) Tax paid (7,244) (6,747)

Net cash flows used in operating activities (26,614) (4,387)

Consol idated Statement of Cash FlowsFor the financial year ended 31 March 2011


2011 2010 note rM’000 rM’000

investing activities

Interest received 611 3,077Purchase of property, plant and equipment 14(a) (4,341) (4,006)Proceeds from disposals of property, plant and equipment 12,325 6,388Proceed from disposal of investment property 179 -Proceed from disposal of non-current asset held for sale - 10,400Additional investment in a subsidiary (9,800) -Interest in a joint venture (2,566) -

Net cash flows (used in)/from investing activities (3,592) 15,859

financing activities

Dividends paid on ordinary shares (1,732) (1,732)Interest paid (6,326) (6,281)Net proceeds/(repayments) of hire purchase and finance lease liabilities 719 (1,849)Net proceeds/(repayments) of loans and borrowings 13,863 (65,181)

Net cash flows from/(used in) financing activities 6,524 (75,043)

net decrease in cash and cash equivalents (23,682) (63,571)effects of exchange rate changes on cash and cash equivalents 129 2,242cash and cash equivalents at beginning of year 48,567 109,896

cash and cash equivalents at end of year (note 26) 25,014 48,567


Consol idated Statement of Cash FlowsFor the financial year ended 31 March 2011 (contd.)

55a n n u a l r e p o r t 2 0 1 1

2011 2010 note rM’000 rM’000

operating activities

Loss before tax (4,274) (1,028)Adjustments for: Depreciation of property, plant and equipment 8 215 54 Gain on disposal of property, plant and equipment 6 (6) (113) Gain on disposal of non-current assets held for sale 6 - (2,114) Property, plant and equipment written off 8 36 251 Increase/(decrease) in liability for retirement benefit obligation 9 17 (2) Interest expense 7 9,040 8,162 Interest income 6 (4,792) (5,437)Total adjustments 4,510 801

operating cash flows before changes in working capital 236 (227)Changes in working capital (Increase)/decrease in trade and other receivables (15,234) 1,664 Decrease/(increase) in other current assets 131 (68) Increase in trade and other payables 26,204 35,718Total changes in working capital 11,101 37,314

Cash flows from operations 11,337 37,087 Tax paid (885) (246)

Net cash flows from operating activities 10,452 36,841

investing activities

Interest received 4,792 677Purchase of property, plant and equipment 14 (453) -Proceeds from disposal of property, plant and equipment 6 203Proceeds from disposal of non-current assets held for sale - 10,400Additional investment in a subsidiary (9,800) (380)

Net cash flows (used in)/from investing activities (5,455) 10,900

financing activities

Dividends paid on ordinary shares (1,732) (1,732)Interest paid (9,040) (1,029)Repayment of hire purchase and finance lease liabilities - (106)Net proceeds/(repayments) of loans and borrowings 3,500 (43,500)

Net cash flows used in financing activities (7,272) (46,367)

net (decrease)/increase in cash and cash equivalents (2,275) 1,374cash and cash equivalents at 1 april 2,003 629

cash and cash equivalents at 31 March (note 26) (272) 2,003

Company Statement of Cash FlowsFor the financial year ended 31 March 2011



1. corporate information

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at 1, Jalan Batu Caves, 68100 Batu Caves, Selangor Darul Ehsan.

The principal activities of the Company are investment holding and project management. The principal activities of the subsidiaries are described in Note 17. There have been no significant changes in the nature of the principal activities during the year.

The immediate and ultimate holding company of the Company is MTD Capital Bhd. and Alloy Consolidated Sdn. Bhd., both of which are incorporated and domiciled in Malaysia. Related corporations are companies within the Alloy Consolidated Sdn. Bhd. Group.

On 7 March 2011, Alloy Consolidated Sdn. Bhd. became the Company’s ultimate holding company and MTD Capital Bhd as the immediate holding company. Prior to this, MTD Capital Bhd was the immediate and ultimate holding company and Alloy Consolidated Sdn. Bhd. was a related company.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 26 July 2011.

2. summary of significant accounting policies

2.1 basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia. At the beginning of the current financial year, the Group and the Company adopted new and revised FRS which are mandatory for financial periods beginning on or after 1 April 2010 as described fully in Note 2.2.

The financial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearest thousand (RM’000) except when otherwise indicated.

2.2 changes in accounting policies

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

On 1 April 2010, the Group and the Company adopted the following new and amended FRSs and IC Interpretations mandatory for annual financial periods beginning on or after 1 April 2010.

• FRS7:FinancialInstruments:Disclosures • FRS8:OperatingSegments • FRS101:PresentationofFinancialStatements(revised) • FRS123:BorrowingCosts • FRS139:FinancialInstruments:RecognitionandMeasurement • AmendmentstoFRS1:First-timeAdoptionofFinancialReportingStandardsandFRS127:Consolidated

and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate

Notes to the Financial Statements31 March 2011

57a n n u a l r e p o r t 2 0 1 1

Notes to the Financial Statements31 March 2011 (contd.)

2. summary of significant accounting policies (contd.)

2.2 changes in accounting policies (contd.)

• AmendmentstoFRS2:Share-basedPayment–VestingConditionsandCancellations • AmendmentstoFRS132:FinancialInstruments:Presentation • AmendmentstoFRS132:FinancialInstruments:ClassificationofRightsIssues • Amendments to FRS 139: Financial Instruments: Recognition and Measurement, FRS 7: Financial

Instruments: Disclosures and IC Interpretation 9: Reassessment of Embedded Derivatives • ImprovementstoFRSsissuedin2009 • ICInterpretation9:ReassessmentofEmbeddedDerivatives • ICInterpretation10:InterimFinancialReportingandImpairment • ICInterpretation11:FRS2–GroupandTreasuryShareTransactions • ICInterpretation13:CustomerLoyaltyProgrammes • ICInterpretation14:FRS119–TheLimitonaDefinedBenefitAsset,MinimumFundingRequirementsand

their Interaction

FRS 4 Insurance Contracts and TR i-3 Presentation of Financial Statements of Islamic Financial Institutions will also be effective for annual periods beginning on or after 1 April 2010. These FRS are, however, not applicable to the Group or the Company.

Adoption of the above standards and interpretations did not have any effect on the financial performance or position of the Group and the Company except for those discussed below:

FRS 7 Financial Instruments: Disclosures

Prior to 1 April 2010, information about financial instruments was disclosed in accordance with the requirements of FRS 132 Financial Instruments: Disclosure and Presentation. FRS 7 introduces new disclosures to improve the information about financial instruments. It requires the disclosure of qualitative and quantitative information about exposure to risks arising from financial instruments, including specified minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk.

The Group and the Company have applied FRS 7 prospectively in accordance with the transitional provisions. Hence, the new disclosures have not been applied to the comparatives. The new disclosures are included throughout the Group’s and the Company’s financial statements for the year ended 31 March 2011.

FRS 8 Operating Segments

FRS 8, which replaces FRS 114 Segment Reporting, specifies how an entity should report information about its operating segments, based on information about the components of the entity that is available to the chief operating decision maker for the purposes of allocating resources to the segments and assessing their performance. The Standard also requires the disclosure of information about the products and services provided by the segments, the geographical areas in which the Group operates, and revenue from the Group’s major customers. The Group concluded that the reportable operating segments determined in accordance with FRS 8 are the same as the business segments previously identified under FRS 114. The Group has adopted FRS 8 retrospectively. These revised disclosures, including the related revised comparative information, are shown in Note 43.





FRS 101 Presentation of Financial Statements (Revised)

The revised FRS 101 introduces changes in the presentation and disclosures of financial statements. The revised Standard separates owner and non-owner changes in equity. The statement of changes in equity includes only details of transactions with owners, with all non-owner changes in equity presented as a single line. The Standard also introduces the statement of comprehensive income, with all items of income and expense recognised in profit or loss, together with all other items of recognised income and expense recognised directly in equity, either in one single statement, or in two linked statements. The Group and the Company have elected to present this statement as one single statement.

In addition, a statement of financial position is required at the beginning of the earliest comparative period following a change in accounting policy, the correction of an error or the classification of items in the financial statements.

The revised FRS 101 also requires the Group to make new disclosures to enable users of the financial statements to evaluate the Group’s objectives, policies and processes for managing capital.

The revised FRS 101 was adopted retrospectively by the Group and the Company.

FRS 139 Financial Instruments: Recognition and Measurement

FRS 139 establishes principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. The Group and the Company have adopted FRS 139 prospectively on 1 April 2010 in accordance with the transitional provisions. The effects arising from the adoption of this Standard has been accounted for by adjusting the opening balance of retained earnings as at 1 April 2010. Comparatives are not restated. The details of the changes in accounting policies and the effects arising from the adoption of FRS 139 are discussed below:

• Impairmentoftradereceivables

Prior to 1 April 2010, provision for doubtful debts was recognised when it was considered uncollectible. Upon the adoption of FRS 139, an impairment loss is recognised when there is objective evidence that an impairment loss has been incurred. The amount of the loss is measured as the difference between the receivable’s carrying amount and the present value of the estimated future cash flows discounted at the receivable’s original effective interest rate. As at 1 April 2010, the Group has remeasured the allowance for impairment losses as at that date in accordance with FRS 139 and the difference is recognised as adjustments to the opening balance of retained earnings as at that date.

59a n n u a l r e p o r t 2 0 1 1



FRS 139 Financial Instruments: Recognition and Measurement (contd.)

• Otherfinancialliabilities

During the current and prior years, the Group had retention sum amounts included in trade receivables and payables that were only receivable and payable at the end of the project term. Prior to 1 April 2010, these amounts were recorded at cost in the Group’s financial statements. Upon the adoption of FRS 139, these amounts should be discounted to its expected repayment date. As at 1 April 2010, the Group has remeasured such receivables and payables at its discounted value and the adjustments were made to its opening retained earnings.

The following are effects arising from the above changes in accounting policies:

increase/(decrease) as at 31 as at March 1 april 2011 2010 rM’000 rM’000 statements of financial position

Group

Other investment - Available-for-sale financial assets - 77 Trade and other receivables 89 (637) Trade and other payables 1,717 (8,027) Retained earnings (1,628) 7,467

Group increase/ (decrease) 2011 rM’000

statements of comprehensive income

Other income 89 Other expenses 1,717 Loss before tax and net of tax 1,628





FRS 139 Financial Instruments: Recognition and Measurement (contd.)

Group increase/ (decrease) 2011 sen per share

Earnings per share Basic 0.70

FRS 123 Borrowing Costs

FRS 123 has been revised to require capitalisation of borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset. The Group’s previous policy was to expense borrowing costs as they were incurred. The Group has amended its accounting policy based on the revised FRS 123. In accordance with the transitional provisions of the Standard, the Group has adopted this as a prospective change. Therefore, borrowing costs have been capitalised on qualifying assets with a commencement date on or after 1 April 2010. No changes have been made for borrowing costs incurred prior to this date that have been expensed. During the financial year, there is no borrowing costs capitalised in property, plant and equipment.

Amendments to FRS 117 Leases

Prior to 1 April 2010, for all leases of land and buildings, if title is not expected to pass to the lessee by the end of the lease term, the lessee normally does not receive substantially all of the risks and rewards incidental to ownership. Hence, all leasehold land held for own use was classified by the Group as operating lease and where necessary, the minimum lease payments or the up-front payments made were allocated between the land and the building elements in proportion to the relative fair values for leasehold interests in the land element and building element of the lease at the inception of the lease. The up-front payments represented prepaid lease payments and were amortised on a straight-line basis over the lease term.


61a n n u a l r e p o r t 2 0 1 1



Amendments to FRS 117 Leases (contd.)

The amendments to FRS 117 Leases clarify that leases of land and buildings are classified as operating or finance leases in the same way as leases of other assets. They also clarify that the present value of the residual value of the property in a lease with a term of several decades would be negligible and accounting for the land element as a finance lease in such circumstances would be consistent with the economic position of the lessee. Hence, the adoption of the amendments to FRS 117 has resulted in certain unexpired land leases to be reclassified as finance leases. The Group has applied this change in accounting policy retrospectively and certain comparatives have been restated. The following are effects to the consolidated statement of financial position as at 31 March 2011 arising from the above change in accounting policy:

Group 2011 rM’000

consolidated statement of financial position

Increase/(decrease) in:

Property, plant and equipment 5,150 Prepaid land lease payments (5,150)

The following comparatives have been restated:

as previously as stated adjustments restated rM’000 rM’000 rM’000

consolidated statement of financial position

31 March 2010 Property, plant and equipment 136,410 5,283 141,693 Prepaid land lease payments 5,283 (5,283) -

1 april 2009 Property, plant and equipment 149,242 6,052 155,294 Prepaid land lease payments 6,052 (6,052) -




2.3 standards issued but not yet effective

The Group and Company have not adopted the following standards and interpretations that have been issued but not yet effective:

effective for annual periods beginning on Description or after

FRS 1: First-time Adoption of Financial Reporting Standards 1 July 2010 FRS 3: Business Combinations (Revised) 1 July 2010 Amendments to FRS 2: Share-based Payment 1 July 2010 Amendments to FRS 5: Non-current Assets Held for Sale and Discontinued Operations 1 July 2010 Amendments to FRS 127: Consolidated and Separate Financial Statements 1 July 2010 Amendments to FRS 138: Intangible Assets 1 July 2010 Amendments to IC Interpretation 9: Reassessment of Embedded Derivatives 1 July 2010 IC Interpretation 12: Service Concession Arrangements 1 July 2010 IC Interpretation 16: Hedges of a Net Investment in a Foreign Operation 1 July 2010 IC Interpretation 17: Distributions of Non-cash Assets to Owners 1 July 2010 Amendments to FRS 1: Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters 1 January 2011 Amendments to FRS 1: Additional Exemptions for First-time Adopters 1 January 2011 FRS 1: First-time Adoption of Financial Reporting Standards [Improvements to FRSs (2010)] 1 January 2011 Amendments to FRS 2 [Improvements to FRSs (2010)] 1 January 2011 Amendments to FRS 3 [Improvements to FRSs (2010)] 1 January 2011 Amendments to FRS 7 Improving Disclosures about Financial Instruments 1 January 2011 Amendments to FRS 7 [Improvements to FRSs (2010)] 1 January 2011 Amendments to FRS 101 [Improvements to FRSs (2010)] 1 January 2011 Amendments to FRS 121 [Improvements to FRSs (2010)] 1 January 2011 Amendments to FRS 128 [Improvements to FRSs (2010)] 1 January 2011 Amendments to FRS 131 [Improvements to FRSs (2010)] 1 January 2011 Amendments to FRS 132 [Improvements to FRSs (2010)] 1 January 2011 Amendments to FRS 134 [Improvements to FRSs (2010)] 1 January 2011 Amendments to FRS 139 [Improvements to FRSs (2010)] 1 January 2011 Amendments to IC Interpretation 13 [Improvements to FRSs (2010)] 1 January 2011 IC interpretation 4: Determining whether an Arrangement contains a Lease 1 January 2011


63a n n u a l r e p o r t 2 0 1 1


2.3 standards issued but not yet effective (contd.)

effective for annual periods beginning on Description or after

IC Interpretation 18: Transfers of Assets from Customers 1 January 2011 Amendments to IC Interpretation 14: Prepayments of a Minimum Funding Requirement 1 July 2011 IC Interpretation 19: Extinguishing Financial Liabilities with Equity Instruments 1 July 2011 Amendments to FRS 124: Related Party Disclosure 1 January 2012 IC Interpretation 15: Agreements for the Construction of Real Estate 1 January 2012

Except for the changes in accounting policies arising from the adoption of the revised FRS 3, the amendments to FRS 127 and IC Interpretation 15, as well as the new disclosures required under the Amendments to FRS 7, the directors expect that the adoption of the other standards and interpretations above will have no material impact on the financial statements in the period of initial application. The nature of the impending changes in accounting policy on adoption of the revised FRS 3, the amendments to FRS 127 and IC Interpretation 15 are described below.

Revised FRS 3 Business Combinations and Amendments to FRS 127 Consolidated and Separate Financial Statements

The revised standards are effective for annual periods beginning on or after 1 July 2010. The revised FRS 3 introduces a number of changes in the accounting for business combinations occurring after 1 July 2010. These changes will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results. The Amendments to FRS 127 require that a change in the ownership interest of a subsidiary (without loss of control) is accounted for as an equity transaction. Therefore, such transactions will no longer give rise to goodwill, nor will they give rise to a gain or loss. Furthermore, the amended standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary. Other consequential amendments have been made to FRS 107 Statement of Cash Flows, FRS 112 Income Taxes, FRS 121 The Effects of Changes in Foreign Exchange Rates, FRS 128 Investments inAssociatesandFRS131InterestsinJointVentures.ThechangesfromrevisedFRS3andAmendmentsto FRS 127 will affect future acquisitions or loss of control and transactions with minority interests. The standards may be early adopted. However, the Group does not intend to early adopt.

IC Interpretation 15 Agreements for the Construction of Real Estate

This Interpretation clarifies when and how revenue and related expenses from the sale of a real estate unit should be recognised if an agreement between a developer and a buyer is reached before the construction of the real estate is completed. Furthermore, the Interpretation provides guidance on how to determine whether an agreement is within the scope of FRS 111 Construction Contracts or FRS 118 Revenue.




2.3 standards issued but not yet effective (contd.)

IC Interpretation 15 Agreements for the Construction of Real Estate (contd.)

The Group currently recognises revenue arising from property development projects using the stage of completion method. Upon the adoption of IC Interpretation 15, the Group may be required to change its accounting policy to recognise such revenues at completion, or upon or after delivery. The Group is in the process of making an assessment of the impact of this Interpretation.

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 to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

Acquisitions of subsidiaries are accounted for by applying the purchase method. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised in other comprehensive income. The cost of a business combination is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the business combination. Any excess of the cost of business combination over the Group’s share in the net fair value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities is recorded as goodwill on the statement of financial position. The accounting policy for goodwill is set out in Note 2.9(a). Any excess of the Group’s share in the net fair value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities over the cost of business combination is recognised as income in profit or loss on the date of acquisition. When the Group acquires a business, embedded derivatives separated from the host contract by the acquiree are reassessed on acquisition unless the business combination results in a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required under the contract.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

2.5 transactions with minority interests

Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group and are presented separately in profit or loss of the Group and within equity in the consolidated statements of financial position, separately from parent shareholders’ equity. Transactions with minority interests are accounted for using the entity concept method, whereby, transactions with minority interests are accounted for as transactions with owners. On acquisition of minority interests, the difference between the consideration and book value of the share of the net assets acquired is recognised directly in equity. Gain or loss on disposal to minority interests is recognised directly in equity.


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2.6 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.

(b) foreign currency transactions

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.

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.




2.7 property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, 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.

Subsequent to recognition, plant and equipment and furniture and fixtures are measured at cost less accumulated depreciation and accumulated impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

Freehold land has an unlimited useful life and therefore is not depreciated. Capital expenditure in progress is stated at cost and is not depreciated as these assets are not available for use. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:

Leasehold land 1.7% - 2.0% Buildings 1.6% - 2.5% Plant and machinery 10% - 20% Equipment, furniture and fittings 15% - 40% Motor vehicles 20%

Assets under construction included in plant and equipment are not depreciated as these assets are not yet available for use.

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 value, useful life and depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.


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2.8 investment properties

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and any accumulated impairment losses.

The depreciation on investment properties is provided on a straight-line basis to write off the cost of each

asset to its residual values over its estimated useful life at the annual rates of 2% to 2.5%.

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in profit or loss in the year of retirement or disposal.

Transfers are made to or from investment property only when there is a change in use. For transfers between investment property, owner-occupied property and inventories, such transfers do not change the carrying amount of the property transferred and they do not change the cost of that property for measurement or disclosure purposes.

2.9 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.




2.10 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.

2.11 subsidiaries

A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities.

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment losses.


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2.12 associates

An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. An associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate.

The Group’s investments in associates are accounted for using the equity method. Under the equity method, the investment in associates is measured in the statement of financial position at cost plus post-acquisition changes in the Group’s share of net assets of the associates. Goodwill relating to associates is included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost of the 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 profit or loss for the period in which the investment is acquired.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investment in its associates. The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in profit or loss.

The most recent available audited financial statements of the associates are used by the Group in applying the equity method. Where the dates of the audited financial statements used are not coterminous with those of the Group, the share of results is arrived at from the last audited financial statements available and management financial statements to the end of the accounting period. Uniform accounting policies are adopted for like transactions and events in the similar circumstances.

In the Company’s separate financial statements, investments in associates are stated 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.

2.13 Joint venture

A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control, where the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control. The Group recognises its interest in joint venture using the equity method. The Group includes separate line items for its share of the assets, liabilities, income and expenses in its consolidated financial statements. The joint venture is consolidated using equity accounting from the date the Group obtains joint control until the date the Group ceases to have joint control over the joint venture.




2.13 Joint venture (contd.) Adjustments are made in the Group’s consolidated financial statements to eliminate the Group’s share of

intragroup balances, income and expenses and unrealised gains and losses on transactions between the Group and its jointly controlled entity.

The most recent available audited financial statements of the associates are used by the Group in applying the equity method. Where the dates of the audited financial statements used are not coterminous with those of the Group, the share of results is arrived at from the last audited financial statements available and management financial statements to the end of the accounting period. Uniform accounting policies are adopted for like transactions and events in the similar circumstances.

2.14 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.


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2.14 financial assets (contd.) (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) 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.

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.




2.15 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.


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2.15 impairment of financial assets (contd.)

(c) available-for-sale financial assets (contd.)

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.

2.16 construction contracts

Where the outcome of a construction contract can be reliably estimated, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that are likely to be recoverable. Contract costs are recognised as expense 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 the total of costs incurred on construction contracts plus recognised profits (less recognised losses) exceeds progress billings, the balance is classified as amount due from customers on contracts. When progress billings exceed costs incurred plus, recognised profits (less recognised losses), the balance is classified as amount due to customers on contracts.

2.17 cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the Group’s cash management.



2.18 non-current assets held for sale

Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. this condition is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

In the consolidated statement of comprehensive income of the reporting period, and of the comparable period of the previous year, income and expenses from discontinued operations are reported separately from income and expenses from continuing operations, down to the level of profit after taxes, even when the Group retains a non-controlling interest in the subsidiary after the sale. The resulting profit or loss (after taxes) is reported separately in the statement of comprehensive income.

Property and equipment are not depreciated or amortised once classified as held for sale.

2.19 inventories

Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their present location and condition are accounted for as follows:

- Raw materials: purchase costs using the weighted average method. - Finished goods and work-in-progress: costs of direct materials and labour and a proportion of

manufacturing overheads based on normal operating capacity. These costs are determined using the weighted average method.

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

2.20 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.

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.


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2.21 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 FRS 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 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.




2.22 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.

2.23 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.

2.24 leases

(a) as lessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.

Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life and the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.


77a n n u a l r e p o r t 2 0 1 1


2.24 leases (contd.)

(b) as lessor

Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for rental income is set out in Note 2.27(e).

2.25 income taxes

(a) current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity.

(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.

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:




2.25 income taxes (contd.)

(b) Deferred tax (contd.)

- 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.

(c) sales tax

Revenues, expenses and assets are recognised net of the amount of sales tax except:

- Where the sales tax incurred in a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

- Receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statements of financial position.


79a n n u a l r e p o r t 2 0 1 1


2.26 employee benefits

(a) short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(b) Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. The Malaysian companies in the Group make contributions to the Employee Provident Fund in Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

(c) termination benefits

Termination benefits are payable when employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either terminate the employment of current employees according to a detailed plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy. In the case of an offer made to encourage voluntary redundancy, the measurement of termination benefits is based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after reporting date are discounted to present value.

(d) Defined benefit plan

The Group operates an unfunded, defined benefit Retirement Benefit Scheme (“the Scheme”) for its eligible employees. The costs of providing benefits under defined benefit plans are determined separately for each plan using the projected unit credit actuarial valuation method. Actuarial gains and losses are recognised as income or expense when the net cumulative unrecognised actuarial gains and losses for each individual plan at the end of the previous reporting year exceeded 10% of the higher of the defined benefit obligation and the fair value of plan assets at that date. These gains or losses are recognised over the expected average remaining working lives of the employees participating in the plans.

The past service cost is recognised as an expense on a straight-line basis over the average period until the benefits become vested. If the benefits are already vested immediately following the introduction of, or changes to, a pension plan, past service cost is recognised immediately.




2.26 employee benefits (contd.)

(d) Defined benefit plan (contd.)

The defined benefit liability is the aggregate of the present value of the defined benefit obligation and actuarial gains and losses not recognised, reduced by past service cost not yet recognised and the fair value of plan assets out of which the obligations are to be settled directly. If such aggregate is negative, the asset is measured at the lower of such aggregate or the aggregate of cumulative unrecognised net actuarial losses and past service cost and the present value of any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan.

If the asset is measured at the aggregate of cumulative unrecognised net actuarial losses and past service cost and the present value of any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan:

- Net actuarial losses of the current period and past service cost of the current period are recognised immediately to the extent that they exceed any reduction in the present value of those economic benefits. If there is no change or an increase in the present value of the economic benefits, the entire net actuarial losses of the current period and past service cost of the current period are recognised immediately.

- Net actuarial gains of the current period after the deduction of past service cost of the current period exceeding any increase in the present value of the economic benefits stated above are recognised immediately. If there is no change or a decrease in the present value of the economic benefits, the entire net actuarial gains of the current period after the deduction of past service cost of the current period are recognised immediately.

The Group’s right to be reimbursed of some or all of the expenditure required to settle a defined benefit obligation is recognised as a separate asset at fair value when and only when reimbursement is virtually certain.

2.27 revenue

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

(a) construction contracts

Revenue from construction contracts is accounted for by the stage of completion method as described

in Note 2.16.

(b) sale of goods

Revenue from sale of goods is recognised upon the transfer of significant risk and rewards of ownership of the goods to the customer. 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.


81a n n u a l r e p o r t 2 0 1 1


2.27 revenue (contd.)

(c) interest income

Interest income is recognised using the effective interest method.

(d) Management fees

Management fees are recognised when services are rendered.

(e) 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.

2.28 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 43, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.29 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.

2.30 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 statements of financial position of the Group.



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 Judgements made in applying accounting policies

In the process of applying the Group’s accounting policies, management has made the following judgements,

apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements:

(a) critical accounting estimates and judgements

There are no significant critical judgements made by management in the process of applying the

Group’s accounting policies that have significant effect on the amounts recognised in the financial statements.

3.2 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.

(a) construction contracts

The Group recognises construction contracts revenue and costs in the statement of comprehensive income by using the stage of completion method. The stage of completion is determined by the proportion that construction costs incurred for work performed to date bear to the estimated total construction costs.

Significant judgement is required in determining the stage of completion, the extent of the construction costs incurred, the estimated total construction revenue and costs, as well as the recoverability of the construction projects. In making the judgement, the Group evaluates based on past experience and by relying on the work of specialists.

The carrying amount of assets and liabilities of the Group arising from construction contract activities are disclosed in Note 23. A 10% variance in the estimated construction contracts revenue or costs would result in approximately 8% (2010: 7%) variance in the Group’s revenue and 8% (2010: 8%) variance in the Group’s cost of sales.


83a n n u a l r e p o r t 2 0 1 1

3. significant accounting judgements and estimates (contd.)

3.2 Key sources of estimation uncertainty (contd.)

(b) income taxes

Significant estimation is involved in determining the provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

(c) useful lives of plant and machinery

The Group estimates the useful lives of plant and machinery based on the period over which the assets are expected to be available for use. The estimated useful lives of plant and machinery are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the relevant assets. In addition, the estimation of the useful lives of plant and machinery are based on the internal technical evaluation and experience with similar assets. It is possible, however, that future results of operations could be materially affected by changes in the estimates brought about by changes in factors mentioned above. The amounts and timings of recorded expenses for any period would be affected by changes in these factors and circumstances. The carrying amount of the Group’s plant and machinery at the reporting date is disclosed in Note 14. A 10% difference in the expected useful lives of these assets from management’s estimates would result in approximately 6% (2010: 5%) variance in the Group’s loss for the year.

(d) impairment assessment on non-financial assets

The Group assesses whether there are any indicators of impairment of all non-financial assets at each reporting date. This includes property, plant and equipment, investment properties and investments. Goodwill is tested for impairment annually and at other times when such indicators exist.

During the current financial year, the Group recognised impairment losses totalling to RM2,593,000 (2010: RM4,505,000) as disclosed in Note 8. Of the impairment loss recognised, the entire amount (2010: RM3,214,000) were in respect of goodwill attributable to the construction segment. Other impairment losses were a result of assessing the recoverable amounts of assets which have indications of impairment.

Further details of key assumptions applied in the impairment assessment of goodwill and the sensitivity

analysis to changes in key assumptions are given in Note 16.




3.2 Key sources of estimation uncertainty (contd.)

(e) impairment of loans and receivables

The Group assesses at each reporting date whether there is any objective evidence that the recoverability amount of a financial asset may be doubtful. To determine whether there is objective evidence of doubtful amount, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments and records allowance for doubtful receivables based on historical collection pattern.

Where there is objective evidence of amount being doubtful, the amount and timing of future cash flows are estimated based on historical loss experience for the financial assets with similar credit risk characteristics. The carrying amount of the Group’s trade and other receivables at the reporting date is disclosed in Note 21.

(f) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses, unabsorbed capital allowances and unutilised reinvestment allowances to the extent that it is probable that taxable profit will be available against which the losses and allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The total carrying value of recognised tax losses and allowances of the Group was RM10,912,000 (2010: RM1,551,000) and the unrecognised tax losses and allowances of the Group were RM157,334,000 (2010: RM149,644,000).

(g) retirement benefits obligations

The cost of defined benefit pension plans and the present value of the pension obligation are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected rates of return of assets, future salary increases, mortality rates and future pension increases. These assumptions are reviewed at each reporting date and are determined based on a triennial actuarial valuation performed by an independent actuary.

The net employee liability of the Group as at 31 March 2011 is RM12,399,000 (2010: RM11,599,000). Further details are given in Note 30.

In determining the appropriate discount rate, management has derived the applicable interest rates

reflecting prevailing bond yields, whilst the mortality rate is based on Malaysia ordinary insured 1999-2003 (M9903) tables.

Further details about the assumptions used are given in Note 30.


85a n n u a l r e p o r t 2 0 1 1


3.2 Key sources of estimation uncertaint (contd.)

(h) provision for liquidated ascertained damages

The provision for liquidated ascertained damages is recognised for expected liquidated damages claims based on the terms and expected date of hand over of the properties to the purchasers as stipulated in the applicable sale and purchase agreements.

Significant judgement is required in determining the expected date of hand over of the properties. In making the estimation, the Group evaluates by relying on the work of the engineers, quantity surveyors and architects. If the actual claims differ by 10% from management’s estimates, the Group’s provision for liquidated ascertained damages will increase by RM42,000 (2010: RM42,000).

(i) provision for warranty

The Group recognises a provision for liability associated with the cost anticipated to remedy any defects in the South Luzon Expressway Project, to the satisfaction of the customer, within 12 months from date of substantial completion as stipulated in the applicable contract.

The carrying amount of the Group’s provision of warranty at the reporting date and further details are disclosed in Note 34. If the actual claims differ by 10% from management’s estimates, the Group’s provision for warranty will increase by RM474,000 (2010: nil).

4. revenue

Group 2011 2010 rM’000 rM’000

Construction revenue 407,016 494,825Sale of goods 134,514 155,994

541,530 650,819

5. cost of sales

Group 2011 2010 rM’000 rM’000

Construction contract costs 389,809 475,324Cost of inventories sold 125,852 136,964

515,661 612,288



6. other income

Included in other income are: Group company 2011 2010 2011 2010 rM’000 rM’000 rM’000 rM’000

Interest income on: 611 3,077 4,792 5,437 - Deposits with licensed banks 461 2,446 32 110 - Trade receivables 150 265 - 201 - Advances granted to a subsidiary - - 4,760 4,760 - Judgement sum recovered - 366 - 366Bad debts recovered - 900 - -Net reversal of allowance for impairment loss of: - Trade receivables (Note 21) - 2,324 - - - Other receivables (Note 21) 2,038 - - -Rental income from premises 38 106 - 66Rental income from motor vehicles 23 - - -Management fees from subsidiaries - - 7,133 5,474Net fair value adjustments on trade receivables 89 - - -Net gain on disposals of: - Property, plant and equipment 3,202 5,901 6 113 - Non-current asset held for sale - 2,114 - 2,114 - Investment property 54 - - -Reversal for liquidated ascertained damages (Note 34) - 23 - -Net unrealised foreign exchange gain 1,195 - - -Net realised foreign exchange gain 310 75 - -

7. finance costs

Group company 2011 2010 2011 2010 rM’000 rM’000 rM’000 rM’000

Interest expense on: - Medium Term Notes (MTNs) - 681 - 681 - Advances granted by subsidiaries - - 8,598 7,133 - Other bank borrowings 6,326 7,736 442 348

6,326 8,417 9,040 8,162Less: Interest expense included in construction contract costs (Note 23) (258) (2,136) - -

Total finance costs 6,068 6,281 9,040 8,162


87a n n u a l r e p o r t 2 0 1 1

8. loss before tax

The following items have been included in arriving at loss before tax:


Employee benefits expense (Note 9) 29,495 31,965 2,322 2,034Non-executive directors’ remuneration (Note 10) 175 255 175 207Auditors’ remuneration: - Statutory audit: - Current 365 371 37 37 - Under provision in prior year - 14 - - - Other services 42 170 42 170Operating leases, minimum lease payments for: - Buildings 2,582 1,872 2,378 1,694 - Equipment, plant and machineries 377 436 169 25Impairment losses on non-financial assets: 2,593 4,505 - - - Property, plant and equipment (Note 14) - 1,291 - - - Goodwill (Note 16) 2,593 3,214 - -Depreciation charge of: - Property, plant and equipment (Note 14) 10,401 12,297 215 54 - Investment properties (Note 15) 17 11 - -Property, plant and equipment written off 397 529 36 251Loss recognised on re-measurement to fair value less costs to sell (Note 27) 15 - - -Provisions (Note 34) 17,567 - - -Net fair value adjustments on trade payables 1,717 - - -Net inventories written down 64 2 - -Bad debts written off 120 3 - -Net impairment losses on financial assets: 2,594 1,373 - - - Trade receivables (Note 21) 2,594 - - - - Other receivables (Note 21) - 1,373 - -Net unrealised foreign exchange loss - 1,405 - -




9. employee benefits expense


Wages and salaries 23,592 26,393 1,759 1,751Increase/(decrease) in liability for defined benefit plan (Note 30) 1,431 1,021 17 (2)Contributions to defined contribution plan and social security contributions 2,816 2,972 263 226Termination benefits 228 156 - -Other benefits 1,428 1,423 283 59

29,495 31,965 2,322 2,034

Included in employee benefits expense of the Group and of the Company are executive directors’ remuneration excluding benefits-in-kind, amounting to RM2,550,000 (2010: RM2,124,000) and RM204,000 (2010: RM204,000) respectively as disclosed in Note 10.

10. Directors’ remuneration

The details of remuneration receivable by directors of the Company during the financial year are as follows:


Executive: Fees 180 180 96 96 Allowances and other emoluments 2,370 1,944 108 108

Total executive directors’ remuneration (excluding benefits-in-kind) (Note 9) 2,550 2,124 204 204Estimated money value of benefits-in-kind 45 71 - -

Total executive directors’ remuneration (including benefits-in-kind) 2,595 2,195 204 204

Non-Executive: Fees 151 231 151 183 Allowances 24 24 24 24

Total non-executive directors’ remuneration (Note 8) 175 255 175 207

Total directors’ remuneration 2,770 2,450 379 411

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10. Directors’ remuneration (contd.)

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 2011 2010

Executive directors:RM1 - RM50,000 1 1RM50,001 - RM100,000 1 1RM350,001 - RM400,000 - 1RM400,001 - RM450,000 1 1RM450,001 - RM500,000 1 -

Non-executive directors:RM1 - RM50,000 5 5RM400,001 - RM450,000 1 1

11. income tax expense

Major components of income tax expense

The major components of income tax expense for the years ended 31 March 2011 and 2010 are:


statement of comprehensive income:Current income tax: - Malaysian income tax 1,382 4,640 112 185 - Foreign tax 1,722 1,284 - - - (Over)/under provision in respect of previous years (336) (325) 60 246

2,768 5,599 172 431

Deferred income tax (Note 24): - Origination and reversal of temporary differences (2,703) 124 31 (78) - Under provision in respect of previous years 236 137 89 188

(2,467) 261 120 110

Income tax expense recognised in profit or loss 301 5,860 292 541



11. income tax expense (contd.)

Reconciliation between tax expense and accounting profit

The reconciliation between tax expense and the product of accounting loss multiplied by the applicable corporate tax rate for the years ended 31 March 2011 and 2010 are as follows:

2011 2010 rM’000 rM’000

Group

Accounting loss before tax (14,340) (10,664)

Tax at Malaysian statutory tax rate of 25% (2010: 25%) (3,585) (2,666)Different tax rates in other countries (225) (414)Adjustments: Non-deductible expenses 2,796 8,074 Income not subject to taxation (779) (951) Benefits from previously unrecognised tax losses and unabsorbed capital allowances and other deductible temporary differences (61) (53) Deferred tax assets not recognised 1,943 1,431 Share of results of associates (98) 627 Share of results of unincorporated joint venture 410 - Over provision of income tax in respect of previous years (336) (325) Under provision of deferred income tax in respect of of previous years 236 137

Income tax expense 301 5,860

company

Accounting loss before tax (4,274) (1,028)

Tax at Malaysian statutory tax rate of 25% (2010: 25%) (1,069) (257)Adjustments: Non-deductible expenses 1,212 364 Under provision of income tax in respect of previous years 60 246 Under provision of deferred income tax in respect of previous years 89 188

Income tax expense 292 541

Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2010: 25%) of the estimated assessable loss for the year.

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

The above reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction.


91a n n u a l r e p o r t 2 0 1 1

12. loss per share

Basic loss per share amounts are calculated by dividing loss for the year, net of tax, attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the financial year, excluding treasury shares held by the Company.

The following reflect the loss and share data used in the computation of basic loss per share for the years ended 31 March:

Group 2011 2010

Loss net of tax attributable to owners of the parent (RM’000) 15,024 18,344

Weighted average number of ordinary shares, excluding treasury shares (‘000) 230,996 230,996

Basic loss per share (sen) 7 8

There are no shares in issuance which have a dilutive effect to the loss per share of the Group.

13. Dividends

Group and company 2011 2010 rM’000 rM’000

recognised during the financial year:

Dividend on ordinary shares:- First and final dividend for 2009: 1 sen per share less 25% taxation on 231,632,798 ordinary shares of RM1 each less 637,000 treasury shares (0.75 sen per ordinary share) - 1,732

- First and final dividend for 2010: 1 sen per share less 25% taxation on 231,632,798 ordinary shares of RM1 each less 637,000 treasury shares (0.75 sen per ordinary share) 1,732 -

1,732 1,732



13. Dividends (contd.)

Group and company 2011 2010 rM’000 rM’000

proposed but not recognised as a liability as at 31 March:

Dividends on ordinary shares, subject to shareholders’ approval at the AGM:- First and final dividend for 2010 1 sen per share less 25% taxation on 231,632,798 ordinary shares of RM1 each less 637,000 treasury shares (0.75 sen per ordinary share) - 1,732

- First and final dividend for 2011: 1 sen per share less 25% taxation on 231,632,798 ordinary shares of RM1 each less 637,000 treasury shares (0.75 sen per ordinary share) 1,732 -

1,732 1,732

At the forthcoming Annual General Meeting, a first and final dividend in respect of the financial year ended 31 March 2011, of 1 sen per share less 25% taxation on 231,632,798 ordinary shares of RM1 each less 637,000 treasury shares of RM1 each, amounting to a dividend payable of RM1,732,468 (0.75 sen net per ordinary share) will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 March 2012.


93a n n u a l r e p o r t 2 0 1 1

14. property, plant and equipment

equipment, furniture capital land and leasehold plant and and Motor work-in- buildings land machinery fittings vehicles progress total Group rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 cost: at 1 april 2009: As previously stated 129,488 - 230,058 16,487 23,777 - 399,810 Effects of adopting the amendments to FRS 117 (Note 2.2) - 7,404 - - - - 7,404

As restated 129,488 7,404 230,058 16,487 23,777 - 407,214 Additions - - 4,010 877 394 - 5,281 Disposals (278) - (12,236) (328) (5,409) - (18,251) Written off - - (5,645) (5,300) (438) - (11,383) Exchange differences (431) - (307) (36) (109) - (883)

at 31 March 2010 (restated) 128,779 7,404 215,880 11,700 18,215 - 381,978

at 1 april 2010: As previously stated 128,779 - 215,880 11,700 18,215 - 374,574 Effects of adopting the amendments to FRS 117 (Note 2.2) - 7,404 - - - - 7,404

As restated 128,779 7,404 215,880 11,700 18,215 - 381,978 Additions 288 - 1,461 405 970 1,242 4,366 Disposals (8,809) - (9,853) (47) (3,967) - (22,676) Written off (6) - (1,074) (822) (162) - (2,064) Reclassified as held for sale (Note 27) (240) - - - - - (240) Exchange differences (142) - (482) (734) (21) - (1,379)

at 31 March 2011 119,870 7,404 205,932 10,502 15,035 1,242 359,985



14. property, plant and equipment (contd.)

equipment, furniture capital land and leasehold plant and and Motor work-in- buildings land machinery fittings vehicles progress total Group rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 accumulated depreciation and impairment loss: at 1 april 2009: As previously stated 33,156 - 184,597 14,380 18,435 - 250,568 Effects of adopting the amendments to FRS 117 (Note 2.2) - 1,352 - - - - 1,352

As restated 33,156 1,352 184,597 14,380 18,435 - 251,920 Depreciation charge for the year 1,358 145 10,014 1,093 1,903 - 14,513 - Recognised in profit or loss (Note 8) 955 145 9,595 959 643 - 12,297 - Capitalised in construction costs (Note 23) 403 - 419 134 1,260 - 2,216 Disposals (278) - (10,146) (312) (5,033) - (15,769) Written off - - (5,408) (5,008) (438) - (10,854) Impairment loss for the year (Note 8) - 624 663 1 3 - 1,291 Exchange differences (398) - (287) (58) (73) - (816)

at 31 March 2010 (restated) 33,838 2,121 179,433 10,096 14,797 - 240,285


95a n n u a l r e p o r t 2 0 1 1


equipment, furniture capital land and leasehold plant and and Motor work-in- buildings land machinery fittings vehicles progress total Group rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 accumulated depreciation and impairment loss: (contd.) at 1 april 2010: As previously stated 33,838 - 179,433 10,096 14,797 - 238,164 Effects of adopting the amendments to FRS 117 (Note 2.2) - 2,121 - - - - 2,121

As restated 33,838 2,121 179,433 10,096 14,797 - 240,285 Depreciation charge for the year 1,382 133 8,580 562 1,720 - 12,377 - Recognised in profit or loss (Note 8) 966 133 8,200 445 657 - 10,401 - Capitalised in construction costs (Note 23) 416 - 380 117 1,063 - 1,976 Disposals (610) - (9,279) (58) (3,606) - (13,553) Written off (6) - (1,039) (496) (126) - (1,667) Exchange differences (124) - 271 (528) (69) - (450) at 31 March 2011 34,480 2,254 177,966 9,576 12,716 - 236,992 net carrying amount: At 31 March 2010 94,941 5,283 36,447 1,604 3,418 - 141,693

At 31 March 2011 85,390 5,150 27,966 926 2,319 1,242 122,993




equipment, freehold furniture Motor land and fittings vehicles total rM’000 rM’000 rM’000 rM’000 company cost: at 1 april 2009 1,414 901 1,309 3,624 Disposals - (77) (603) (680) Written off - (296) (437) (733)

at 31 March 2010 1,414 528 269 2,211 Additions - 349 104 453 Disposals - - (57) (57) Written off - - (169) (169)

at 31 March 2011 1,414 877 147 2,438 accumulated depreciation: at 1 april 2009 - 532 1,215 1,747 Depreciation charge for the year (Note 8) - 43 11 54 Disposals - (69) (521) (590) Written off - (45) (437) (482)

at 31 March 2010 - 461 268 729 Depreciation charge for the year (Note 8) - 146 69 215 Disposals - - (57) (57) Written off - - (133) (133)

at 31 March 2011 - 607 147 754 net carrying amount: As at 31 March 2010 1,414 67 1 1,482

As at 31 March 2011 1,414 270 - 1,684


97a n n u a l r e p o r t 2 0 1 1


(a) During the financial year, the Group acquired property, plant and equipment with an aggregate cost of RM4,366,000 (2010: RM5,281,000) of which RM25,000 (2010: RM1,275,000) were acquired by means of hire purchase and finance lease arrangements.

(b) The net carrying amounts of property, plant and equipment held under hire purchase and finance lease arrangements of the Group at the reporting date were RM1,091,000 (2010: RM3,227,000).

(c) Details of the terms and conditions of the hire purchase and finance lease arrangements are disclosed in Note 32.

15. investment properties

Group 2011 2010 rM’000 rM’000

costAt beginning of year 504 504 Disposal (157) -

At end of year 347 504

accumulated depreciation and impairmentAt beginning of year 84 73 Depreciation charge for the year (Note 8) 17 11 Disposal (32) -

At end of year 69 84

net carrying amount 278 420

fair value 288 500

The investment property relates to a commercial property (2010: commercial and residential properties). The fair value of the property disclosed was derived by the directors by reference to the valuations undertaken by independent professional valuers and the current market transactions by applying the comparison approach.

Disposal of investment property During the financial year, a residential property was disposed to a third party for a cash consideration of

RM185,000. A gain of RM54,000 is recognised in profit or loss.




16. intangible asset

Group 2011 2010 rM’000 rM’000

Goodwill

costAt beginning of year 70,543 70,543 Addition - acquisition of additional equity interest in a subsidiary 9,800 -

At end of year 80,343 70,543

accumulated impairmentAt beginning of year 13,892 10,678 Impairment loss for the year (Note 8) - Included in Administrative and other expenses 2,593 3,214

At end of year 16,485 13,892

net carrying amount 63,858 56,651

(a) impairment test for goodwill

Goodwill has been allocated to the Group’s CGU - construction and manufacturing segments. The carrying amount of goodwill allocated to each CGU are as follow:

Group 2011 2010 rM’000 rM’000

Construction segment 54,058 56,651 Manufacturing segment 9,800 -

63,858 56,651

The key assumptions used in determining the recoverable amount are disclosed below.

(b) Key assumptions used in determining the recoverable amount

The recoverable amount of a CGU is determined based on the assigned projects book order value approved by management covering a three-year period. The key assumptions used for recoverable amounts are:

Gross margin Discount rate 2011 2010 2011 2010

Construction contracts 4% 4% 10% 10% Manufacturing sector 5% - 10% -

99a n n u a l r e p o r t 2 0 1 1

16. intangible asset (contd.)

(b) Key assumptions used in determining the recoverable amount (contd.)

The following describes each key assumption on which management has based its cash flow projections to undertake impairment testing of goodwill:

(i) budgeted gross margin The basis used to determine the value assigned to the budgeted gross margins is the average gross

margins achieved in the year immediately before the budgeted year increased for expected efficiency improvements and anticipated cost increase.

(ii) Discount rate

The discount rates used are pre-tax and reflect specific risks relating to the construction segment.

sensitivity to changes in assumptions

With regard to the assessment of fair value less costs to sell of the CGUs, management believes that no reasonably possible change in any of the above key assumptions would cause the carrying values of the CGUs to materially exceed their recoverable amounts.

17. investments in subsidiaries

company 2011 2010

rM’000 rM’000

Unquoted shares, at cost 148,861 144,061 Less: Accumulated impairment losses (545) (5,545)

148,316 138,516

The subsidiaries are incorporated in Malaysia and the financial statements are audited by Ernst & Young, Malaysia

or member firms of Ernst & Young Global, except where otherwise indicated. Further details of the subsidiaries are as follows:



17. investments in subsidiaries (contd.)

proportion of ownership interest name of companies 2011 2010 principal activities % %

held by the company:

ACP - DMT Sdn. Bhd. 100 100 Manufacturing and marketing of speciality highway and safety products and providing related services

ACP Technologies Sdn. Bhd. 100 100 Investment holding

ACPI Engineering Sdn. Bhd. 100 100 Steel fabrication and manufacturing, construction, management and contracting in the field of environmental systems engineering

Gandaan Unik Sdn. Bhd. 100 100 Investment holding

Makin Permata Sdn. Bhd. 100 100 Investment holding (ceased operation)

Persys Engineering Sdn. Bhd. 100 100 Construction, manufacturing and marketing of precast concrete system products

MTD Construction Sdn. Bhd. (“MTDC”) 100 100 Civil engineering and construction works

ACP (Tracks) Sdn. Bhd. (5) 100 51 Investment holding

MTD ACP Precast Sdn. Bhd. 100 100 Investment holding (dormant)

subsidiaries of acp (tracks) sdn. bhd.:

Persys Sdn. Bhd. 100 51 Construction, manufacturing and marketing of heavy element precast products for viaducts, elevated highways, highways, light rail transit

guideways and bridges and construction related businesses


101a n n u a l r e p o r t 2 0 1 1



subsidiaries of acp (tracks) sdn. bhd.: (contd.) Acentis Engineering Sdn. Bhd. 100 51 Construction and provision of infrastructure and services for water and waste water treatment (ceased operation)

ASC Tiles Sdn. Bhd. 100 51 Manufacturing of concrete roof tiles Associated Structural Concrete Sdn. Bhd. 100 51 Manufacturing of building system products (ceased operation)

C & G Fabricators Sdn. Bhd. 100 51 Manufacturing and marketing of metal based products for building and construction industry (ceased operation)

Universal Building Products Sdn. Bhd. 100 51 Manufacturing and marketing of metal and timber based products for building and construction industry

(ceased operation)

Associated Concrete Products 100 51 Manufacturing and marketing of (Malaysia) Sdn. Bhd. (“ACPM”) precast concrete products

subsidiaries of acpM:

ACP Marketing Sdn. Bhd. 100 51 Marketing of precast concrete products

Precast Solutions Sdn. Bhd. 100 51 Project management, construction works, licensing and franchising of precast concrete products

subsidiary of acp technologies sdn. bhd.:

ASC Engineering Sdn. Bhd. 100 100 Manufacturing of engineered products and providing specialist contracting services





subsidiary of asc engineering sdn. bhd.:

ACPI Holding Ltd. (1) (3) (4) 100 100 Investment holding

subsidiaries of acpi holding ltd.:

ASCE Construction Ltd. (1) (3) (4) 100 100 Manufacturing of engineered products and providing specialist contracting services

ASC Engineering Sdn. Bhd. Ltd. (1) (3) 100 100 Manufacturing of engineered products and providing specialist contracting services

ASC Engineering Sdn. Bhd. - ASCE 100 100 Construction and engineering ConstructionLtd.JointVenture(1) (3) (4)

ASC Engineering Sdn. Bhd. Ltd. 100 100 Construction and engineering - ASCE Construction Ltd. JointVenture(1) (3) (4)

subsidiaries of MtDc:

MTD Tunneltech Sdn. Bhd. 60 60 Dormant MTD Construction (Philippines) Inc. (2) 60 60 Civil engineering and construction works (1) These subsidiaries are incorporated in Thailand.

(2) The subsidiary is incorporated in Philippines.

(3) Audited by firms of auditors other than Ernst & Young.

(4) The Auditor’s Report included an “Emphasis of Matter” in relation to its going concern as a result of recurring losses from operations and net capital deficiencies as at 31 March 2011.

(5) During the year, the Company increased its investment in ACP (Tracks) Sdn. Bhd. (“ACP Tracks”), its 51%-owned subsidiary by acquisition of the remaining 49% equity interest in ACP Tracks comprising 9,800,000 ordinary shares of RM1.00 each from Trek Layar Sdn Bhd (“Trek Layar”) for a cash consideration of RM9,800,000 only by way of exercising call option in the Shareholders Agreement dated 7 September 2007, made between the Company and Trek Layar Sdn. Bhd..


103a n n u a l r e p o r t 2 0 1 1

18. investments in associates

Group 2011 2010 rM’000 rM’000

Unquoted shares, at cost 13,677 13,677 Share of post-acquisition reserves 4,706 4,297

18,383 17,974

proportion of ownership of interest name of companies 2011 2010 principal activities % %

held by MtD construction sdn. bhd.

Intraxis Engineering Sdn. Bhd. (1) (3) 40 40 Civil works for Hydroelectric project

held by associated concrete products (Malaysia) sdn. bhd.

Associated Concrete Products 49 49 Manufacturing and marketing of (Sabah) Sdn. Bhd. (1) (3) precast concrete products

held by acp technologies sdn. bhd.

ASC Engineering Sdn. Bhd. and 49 49 Construction and engineering U and O Corporation Ltd. (2) (4)

held by Gandaan unik sdn. bhd.

Modal Ehsan Sdn. Bhd. (2) (3) 49 49 Property development

(1) These associates have a financial year end of 31 December.

(2) These associates have a financial year end of 31 March.

(3) The associates are incorporated in Malaysia.

(4) The associate is incorporated in Thailand.



18. investments in associates (contd.) The summarised financial information of the associates, not adjusted for the proportion of ownership interest

held by the Group, is as follows: Group 2011 2010 rM’000 rM’000

assets and liabilities:Current assets 169,991 133,578Non-current assets 32,733 80,345

Total assets 202,724 213,923

Current liabilities 145,925 166,934Non-current liabilities 14,217 3,818

Total liabilities 160,142 170,752

results:Revenue 44,957 63,318Profit/(loss) for the year 1,128 (3,749)

19. interest in joint venture

On 27 May 2010, the Group through a subsidiary, Persys Sdn Bhd together with Buildcast Sdn Bhd (“Buildcast”) entered into anunincorporated joint ventureBuildcast-Persys JointVenture (“BPJV”)which agreed to accept the terms andconditions of a RM440 million contract to manufacture and supply Precast Concrete Segmental Box Girder for Penang Bridge Second Crossing Project in a duration of 30 months. The Group’s reward and obligation for the contract is up to 30% which funding requirements would be through project advances, internally generated funds and bank borrowings.

The aggregate amounts of each of the current assets, non-current assets, current liabilities, non-current liabilities, income and expenses related to the Group’s interests in the jointly-controlled entity are as follows:

Group 2011assets and liabilities: rM’000

Current assets 5,549Non-current assets 845

Total assets 6,394

Current liabilities 4,754Non-current liabilities -

Total liabilities 4,754

income and expensesIncome 18,024

Expenses (16,384)


105a n n u a l r e p o r t 2 0 1 1

20. other investments


non-current Available-for-sale financial assets - Equity instruments (quoted shares in Malaysia) 123 46 - - Transferable club memberships 289 289 261 261

412 335 261 261

21. trade and other receivables


current trade receivables Third parties 166,234 149,656 - 1,085 Associates 29,022 41,508 - - Joint venture 1,162 - - - Immediate holding company 53,228 370 - - Related companies 4,477 11,825 - - A company in which certain directors have interest - 3 - - Progress billings - third parties 6,367 7,080 - - Construction contracts: - Retention sums on contracts (Note 23) 7,960 6,406 - - - Third parties 7,960 5,262 - - - A company in which certain directors have interest - 1,144 - -

268,450 216,848 - 1,085 Less: Allowance for impairment Third parties (42,583) (45,789) - - Associate (853) - - -

Trade receivables, net 225,014 171,059 - 1,085



21. trade and other receivables (contd.)


other receivables Amounts due from related parties: - Immediate holding company - 111 - - - Subsidiaries - - 429,647 412,826 - Associate 39,843 31,507 16,934 17,131 - Related companies 2,776 2,979 1 - - A company in which certain directors have interest - 632 - -

42,619 35,229 446,582 429,957 Deposits 1,543 2,024 478 485 Advances to subcontractors 3,714 11,608 - - Advances to suppliers 5,906 - - - Valueaddedtaxandwithholding tax recoverable 24,297 25,201 - - Sundry receivables 13,253 10,141 72 371 91,332 84,203 447,132 430,813 Less: Allowance for impairment Third parties (2,220) (4,258) (48) (48)

89,112 79,945 447,084 430,765

314,126 251,004 447,084 431,850

non-current trade receivables Retention sum on contracts Third parties 12,016 10,698 - - Less: Allowance for impairment Third parties (4,528) (4,528) - -

7,488 6,170 - -

Total trade and other receivables (current and non-current) 321,614 257,174 447,084 431,850 Add: Cash and bank balances (Note 26) 30,859 61,471 2,623 3,064

Total loans and receivables 352,473 318,645 449,707 434,914


107a n n u a l r e p o r t 2 0 1 1


(a) trade receivables

Trade receivables are non-interest bearing except an amount of RM1,076,000 which attracts an interest of 10% in the previous year. They are generally on 1 to 4 month (2010: 1 to 4 month) terms. Retention sums are receivable at the expiry period of 12 to 24 (2010: 12 to 24) months after completion of respective construction contracts. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

Ageing analysis of trade receivables The ageing analysis of the Group’s trade receivables is as follows:


Neither past due nor impaired 100,802 52,368 - 1,085 1 to 30 days past due not impaired 5,425 42,351 - - 31 to 60 days past due not impaired 54,189 11,844 - - 61 to 90 days past due not impaired 21,842 1,021 - - More than 91 days past due not impaired 46,724 63,599 - - 128,180 118,815 - - Impaired 51,484 56,363 - -

280,466 227,546 - 1,085

Receivables that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.

None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM128,180,000 (2010: RM118,815,000) that are past due at the reporting date but not impaired. These receivable balances are unsecured in nature.

The Group’s primary exposure to credit risk arises through its trade receivables where trading terms are mainly on credit. Each customer has a maximum credit limit. The Group seeks to maintain strict control over its receivables through its credit control department to minimise credit risk. Overdue balances are reviewed regularly by senior management. The Group’s trade receivables relate to a large number of diversified customers and has no significant concentration of credit that may arise from exposures to a single debtor or to groups of debtors.




(a) trade receivables (contd.)

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:

collectively impaired 2011 2010 rM’000 rM’000

Group Trade receivables - nominal amounts 51,484 56,363 Less: Allowance for impairment (47,964 ) (50,317)

3,520 6,046

Movement in allowance accounts: Group 2011 2010 rM’000 rM’000

trade receivables At beginning of year 50,317 52,641 Written off (4,947) - Charge for the year (Note 8) 2,594 - Reversal of impairment losses (Note 6) - (2,324)

At end of year 47,964 50,317

Trade receivables that are collectively determined to be impaired at the reporting date relate to debtors that

have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

(b) other receivables

Advances to suppliers are made primarily for supply of raw materials and purchase of plant and machinery. At the reporting date, the Group has significant concentration of credit risk in the from of advances to a 3 suppliers of RM4,341,000.

108


109a n n u a l r e p o r t 2 0 1 1


(b) other receivables (contd.)

Movement in allowance accounts: Group 2011 2010 rM’000 rM’000

individually impaired: At beginning of year 4,258 2,885 Charge for the year (Note 8) - 1,373 Reversal of impairment losses (Note 6) (2,038) -

At end of year 2,220 4,258

There was no movement in the accumulated allowance for impairment of the Company during the financial year.

(c) amounts due from related parties

Amounts due from all related parties are unsecured, non-interest bearing and are repayable on demand, other than an amount due from a subsidiary of RM68,000,000 (2010: RM68,000,000) which attracts interest of 7% (2010: 7%), and is repayable within 5 years from 13 November 2007.

Further details on related party transactions are disclosed in Note 39.

22. other current assets


Prepaid expenses 2,080 1,443 45 176 Amount due from customers for contract (Note 23) 20,875 26,920 - -

22,955 28,363 45 176



23. Gross amount due (to)/from customers for contracts

Group 2011 2010 rM’000 rM’000

Construction contract costs incurred to date 4,412,797 3,928,689 Attributable profits 268,893 273,017

4,681,690 4,201,706 Less: Progress billings (4,775,170) (4,240,808)

(93,480) (39,102) Presented as: Gross amount due from customers for contract work (Note 22) 20,875 26,920 Gross amount due to customers for contract work (114,355) (66,022)

(93,480) (39,102)

Retention sums on construction contract, included within trade receivables: Current (Note 21) 7,960 6,406 Non-current (Note 21) 12,016 10,698

19,976 17,104

Retention sums and advances received on contracts, included within trade payables: Current (Note 33) 28,975 27,702 Non-current (Note 33) 35,391 43,784

64,366 71,486

The costs incurred to date on construction contracts include the following charges made during the financial year:

Depreciation of property, plant and equipment (Note 14) 1,976 2,216 Operating lease, minimum lease payments for: - Buildings 84 137 - Machineries - 308 Interest expense (Note 7) 258 2,136


111a n n u a l r e p o r t 2 0 1 1

24. Deferred taxation


Presented after appropriate offsetting as follows: Deferred tax assets (4,475) (1,802) - - Deferred tax liabilities 495 269 230 110

(3,980) (1,533) 230 110

Deferred income tax relates to the following:

recognised as at in profit exchange as at 1 april or loss differences 31 March (note 11) rM’000 rM’000 rM’000 rM’000 Group

2010

Deferred tax assets: Unused tax losses and unabsorbed capital allowances (152) (1,399) - (1,551) Unutilised reinvestment allowances - (4,752) - (4,752) Others (3,227) 2,484 - (743)

(3,379) (3,667) - (7,046) Deferred tax liabilities: Accelerated capital allowances 1,440 (786) - 654 Others 154 4,714 (9) 4,859 1,594 3,928 (9) 5,513 (1,785) 261 (9) (1,533)



24. Deferred taxation (contd.)

Deferred income tax relates to the following: (contd.)

recognised as at in profit exchange as at 1 april or loss differences 31 March (note 11) rM’000 rM’000 rM’000 rM’000 Group

2011

Deferred tax assets: Unused tax losses and unabsorbed capital allowances (1,551) (9,387) 26 (10,912) Unutilised reinvestment allowances (4,752) 4,752 - - Others (743) 48 - (695)

(7,046) (4,587) 26 (11,607)

Deferred tax liabilities: Accelerated capital allowances 654 5,479 - 6,133 Others 4,859 (3,359) (6) 1,494

5,513 2,120 (6) 7,627

(1,533) (2,467) 20 (3,980)

recognised as at in profit as at 1 april or loss 31 March (note 11) rM’000 rM’000 rM’000 company

2010

Deferred tax assets: Others - (75) (75)

Deferred tax liabilities Accelerated capital allowances - 185 185

- 110 110


113a n n u a l r e p o r t 2 0 1 1

24. Deferred taxation (contd.)

recognised as at in profit as at 1 april or loss 31 March (note 11) rM’000 rM’000 rM’000 company

2011

Deferred tax assets: Others (75) 33 (42)

Deferred tax liabilities: Accelerated capital allowances 185 87 272

110 120 230

Deferred tax assets have not been recognised in respect of the following items:

Group 2011 2010 rM’000 rM’000

Unused tax losses 60,125 56,295 Unabsorbed capital allowances 48,115 31,661 Unutilised reinvestment allowance 33,902 24,255 Other temporary difference 15,192 37,433

157,334 149,644

25. inventories

Group 2011 2010 rM’000 rM’000

cost Raw materials 16,212 16,172 Finished goods 31,470 26,162

47,682 42,334

net realisable value Finished goods 1,900 -

49,582 42,334

During the year, the amount of inventories recognised as an expense in cost of sales of the Group was

RM125,852,000 (2010: RM136,964,000). A net write down of inventories amounted to RM64,000 (2010: RM2,000) is recognised in profit or loss (Note 8).



26. cash and bank balances


Short term deposits with licensed banks 14,445 20,663 2,505 3,005 Cash at banks and on hand 16,414 40,808 118 59

Cash and bank balances 30,859 61,471 2,623 3,064

Short-term deposits are made for varying periods of between one day and three months (2010 : one day to three months) depending on the immediate cash requirements of the Group and the Company, and earn interests at the respective short-term deposit rates. The weighted average effective interest rates as at 31 March 2011 for the Group and the Company were 2.16% (2010: 2.07%) and 2.02% (2010: 2.02%) respectively.

Short term deposits with licensed banks of the Group and Company amounting to RM5,940,000 (2010: RM3,928,000) and RM2,505,000 (2010: RM3,005,000) respectively are pledged as securities for borrowings as disclosed in Note 31.

For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise the following as at the reporting date:


Cash and bank balances 30,859 61,471 2,623 3,064 Bank overdrafts (Note 31) (5,845) (12,904) (2,895) (1,061)

Cash and cash equivalents 25,014 48,567 (272) 2,003

27. non-current asset classified as held for sale

On 28 April 2010, the ACP DMT Sdn. Bhd. (“ACPDMT”) a wholly-owned subsidiary of the Company, has entered into a conditional sale and purchase agreement with a third party for the disposal of its property located at Parcel C,Vista Commonwealth, Bukit Jalil, 57700 Kuala Lumpur for a purchase consideration of RM236,000. At 31 March 2011, ACPDMT has yet to fulfill all the conditions as stipulated in the sale and purchase agreement. The sale of the property was subsequently completed in April 2011.

The above non-current asset held for sale is stated at lower of its carrying amount and fair value less costs to sell. Re-measurement is made on the carrying amount of the building and a loss on re-measurement to fair value less costs to sell of RM15,000 is recognised in profit or loss.


115a n n u a l r e p o r t 2 0 1 1

27. non-current asset classified as held for sale (contd.)

Group 2011 rM’000 Building: At cost, reclassed from property, plant and equipment (Note 14) 240 Loss recognised on re-measurement to fair value less costs to sell (Note 8) (15) Asset carried at fair value less costs to sell classified as held for sale 225

28. share capital and treasury shares

|------------------------ Group and company ------------------------| number of ordinary shares of rM1 each amount

2011 2010 2011 2010 ‘000 ‘000 rM’000 rM’000

authorised At beginning/end of year 500,000 500,000 500,000 500,000

issued and fully paid At beginning/end of year 231,633 231,633 231,633 231,633

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

The shares repurchased were held as treasury shares in accordance with Section 67A of the Companies Act, 1965. The amount consists of the acquisition costs of treasury shares net of the proceeds received on their subsequent sale or issuance. The number of treasury shares held on hand are as follows:

number of ordinary shares of rM1 each amount

2011 2010 2011 2010 ‘000 ‘000 rM’000 rM’000

At beginning/end of year 637 637 1,905 1,905



29. reserves

The nature and purpose of each category of reserves are as follows:

(a) capital redemption reserve

Capital redemption reserve comprises principally capital gains from the disposal of property, plant and equipment and investments of certain foreign subsidiaries maintained for future appropriation of dividends.

(b) foreign currency translation reserve

The foreign currency translation reserve is used to record all foreign exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or foreign operation.

(c) other reserves

Included in other reserves are:

(i) Statutory reserve amounting to RM99,000 (2010 : 99,000) arising from Saudi Arabia a branch of a subsidiary, Persys Sdn. Bhd.. According to Article 176 of the company law in the Kingdom of Saudi Arabia, 10% of the net profit should be transferred to the Statutory Reserve. The branch may discontinue such annual transfer when the Statutory Reserve equals 50% of the capital. The statutory reserve is not available for dividend distribution to shareholders.

(ii) Capital reserve amounting to RM111,000 (2010 : RM16,00) where the Group’s sharing of the associate capital reserve in respect of the remaining investment which is currently captured as long term investment.

(iii) Capital reserve striving from a subsidiary’s bonus issue capitalised from retained earnings, amounting to RM29,000,000 (2010 : 4,000,000)

(d) retained earnings

Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance with the Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividends paid, credited or distributed to its shareholders, and such dividends will be exempted from tax in the hands of the shareholders (“single tier system”). However, there is a transitional period of six years, expiring on 31 December 2013, to allow companies to pay franked dividends to their shareholders under limited circumstances. Companies also have an irrevocable option to disregard the 108 balance and opt to pay dividends under the single tier system. The change in the tax legislation also provides for the 108 balance to be locked-in as at 31 December 2007 in accordance with Section 39 of the Finance Act 2007.

The Company did not elect for the irrevocable option to disregard the 108 balance. Accordingly, during the transitional period, the Company may utilise the credit in the 108 balance as at 31 March 2011 and 2010 to distribute cash dividend payments to ordinary shareholdings as defined under the Finance Act 2007. As at 31 March 2011 and 2010, the Company has sufficient credit in the 108 balance and the balance in the tax exempt income account to frank the payment of dividends out of its entire retained earnings as at 31 March 2011.


117a n n u a l r e p o r t 2 0 1 1

30. Defined benefit plan

The Group operates unfunded defined retirement benefit scheme for its eligible employees. Provision for the unfunded retirement benefit obligations is made in accordance with the terms stipulated in the Collective Agreement for all eligible employees. This is calculated based on the employees’ current emoluments and the length of their service with the subsidiaries within the Group and the Company.

The following tables summarise the components of net benefit expense recognised in profit or loss and amounts

recognised in the statements of financial position for the plan:

net benefits expense


Current service cost 544 675 9 (2) Interest cost on benefit obligation 494 346 9 - Net actuarial gain recognised in the year (318) - (16) - Past service cost 711 - 15 - Net benefit expense, included in employee benefits expense (Note 9) 1,431 1,021 17 (2)

benefit liability


Defined benefit obligation 9,016 11,599 170 271 Unrecognised actuarial gain 3,383 - 118 - Benefit liability 12,399 11,599 288 271

Analysed as: Current 141 381 - 42 Non-current 12,258 11,218 288 229

12,399 11,599 288 271



30. Defined benefit plan (contd.)

Changes in present value of defined benefit obligation are as follows:


At beginning of year 11,599 10,776 271 273 Current service cost 544 675 9 (2) Interest cost 494 346 9 - Past service cost 711 - 15 - Actuarial gain on obligation (318) - (16) - Benefits paid (631) (198) - - At end of year 12,399 11,599 288 271

The principal assumptions used in determining the defined benefit obligation are shown below:

Group and company 2011 2010

Discount rate (%) 6.2 5.1 Expected rate of salary increases (%) 5.0 4.0 - 5.6

31. loans and borrowings

Group company 2011 2010 2011 2010 Maturity rM’000 rM’000 rM’000 rM’000

current

Secured: Bank overdrafts in RM On demand 2,950 11,843 - - Revolving credits in RM - COF + 1.50% p.a. 2012 50,400 - - - - COF + 2.0% p.a. 2012 2,000 - - - - COF + 0.75% 2012 5,000 - - - - Weighted average effective interest rate of - 4.75% 2011 - 2,000 - - - 12.41% 2011 - 36,650 - -


119a n n u a l r e p o r t 2 0 1 1

31. loans and borrowings (contd.)

Group company 2011 2010 2011 2010 Maturity rM’000 rM’000 rM’000 rM’000

current

Bankers’ acceptances 2012 987 1,185 - - Term loans in RM - BLR + 1.5% 2012 200 - - - - Weighted average effective interest rate of 3.55% 2011 - 591 - - Term loan in USD - COF + 1.5% 2012 1,608 - - - Obligations under finance leases (Note 32) 2012 277 790 - -

63,422 53,059 - -

Unsecured: Bank overdrafts in RM On demand 2,895 1,061 2,895 1,061 Revolving credits in RM - COF + 1% p.a. 2012 1,500 - 1,500 - - COF + 1.25% p.a. 2012 5,000 - 5,000 - - Weighted average effective interest rate of 6.8% 2011 - 3,000 - 3,000

9,395 4,061 9,395 4,061

72,817 57,120 9,395 4,061

non-current

Secured: Term loans in RM - BLR + 1.5% p.a. 2013 - 2014 283 - - - - implicit interest rate of 9.63% 2012 - 2018 - 3,083 - - - COF + 1.5% 2012 - 5,118 - - Obligations under finance leases (Note 32) 2013 - 2015 648 879 - -

931 9,080 - -

Total loans and borrowings 73,748 66,200 9,395 4,061



31. loans and borrowings (contd.)


total loans and borrowings

Bank overdrafts (Note 26) 5,845 12,904 2,895 1,061 Revolving credits 63,900 41,650 6,500 3,000 Bankers’ acceptances 987 1,185 - - Term loans 2,091 8,792 - - Obligations under finance leases (Note 32) 925 1,669 - -

73,748 66,200 9,395 4,061

The remaining maturities of the loans and borrowings as at 31 March 2011 are as follows:


On demand or within one year 72,817 57,120 9,395 4,061More than 1 year and less than 2 years 420 8,478 - -More than 2 years and less than 5 years 511 602 - -

73,748 66,200 9,395 4,061

Bank overdraftsBank overdrafts are denominated in RM, bear interest at BLR plus % of mark up ranging from 0.75% and 1.75% per annum during the financial year.

Term loan in RM with implicit interest rate of 9.63%This loan was fully repaid by a subsidiary during the financial year when a freehold land of the subsidiary was disposed to a third party. This loan was previously secured by a first legal charge over the freehold land and corporate guarantee by the Company. SecuritiesThe borrowings (excluding hire purchase and finance lease liabilities) of the Group and of the Company are secured by certain assets of the Group and of the Company as disclosed in Notes 14 and 26.

The borrowings are secured by the following: (a) Corporate guarantees by the Company; and (b) Negative pledge from subsidiaries’ assets, both present and future.


121a n n u a l r e p o r t 2 0 1 1

32. obligations under finance leases

The Group has finance leases for motor vehicles as disclosed in Note 14(a). There are no restrictions placed upon the Group by entering into these leases and no arrangements have been entered into for contingent rental payments.

Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:

Group 2011 2010 rM’000 rM’000

Minimum lease payments:Not later than 1 year 323 896Later than 1 year but not later than 2 years 266 325Later than 2 years but not later than 5 years 432 650

Total minimum lease payments 1,021 1,871Less: Amounts representing finance charges (96) (202)

Present value of minimum lease payments 925 1,669

Group 2011 2010 rM’000 rM’000

present value of payments:Not later than 1 year 277 790Later than 1 year but not later than 2 years 236 277Later than 2 years but not later than 5 years 412 602

Present value of minimum lease payments 925 1,669Less: Amount due within 12 months (Note 31) (277) (790)

Amount due after 12 months (Note 31) 648 879



33. trade and other payables


currenttrade payables Third parties 147,171 152,668 - - Ultimate holding company (2010: A company which certain directors have interest) 2,891 3,735 - - Related companies (2010: Companies which certain directors have interest) 22 22 - - Retention sum on contracts (Note 23): 28,975 27,702 - - - Third parties 26,881 11,121 - - - Ultimate holding company (2010: A company which certain directors have interest) 2,094 16,581 - - 179,059 184,127 - -

other payables Amounts due to related parties: - Immediate holding company 837 496 837 496 - Subsidiaries - - 202,509 178,869 - Associates 66 63 - - - Related companies 10,241 8,352 2,630 373

11,144 8,911 205,976 179,738 Sundry payables 10,786 13,229 311 472 Accrued operating expenses 9,834 10,825 252 125

31,764 32,965 206,539 180,335

210,823 217,092 206,539 180,335

non-currenttrade payables Retention sum on contracts (Note 23): - Third parties 21,900 43,784 - - - Ultimate holding company 13,491 - - -

35,391 43,784 - -


123a n n u a l r e p o r t 2 0 1 1

33. trade and other payables (contd.)


Total trade and other payables 246,214 260,876 206,539 180,335Add: Loans and borrowings (Note 31) 73,748 66,200 9,395 4,061

Total financial liabilities carried at amortised cost 319,962 327,076 215,934 184,396

(a) trade payables

These amounts are non-interest bearing. Trade payables are normally settled on 30 to 120 day (2010: 30 to 120 day) terms.

(b) amounts due to related parties

These amounts are non-interest bearing, other than amounts due to subsidiaries of RM188,873,000 (2010: RM150,800,000) which attract interest of 5% (2010: 5%) per annum. All amounts are unsecured, repayable on demand and are to be settled in cash.

34. provisions

Group provision provision for liquidated for bank ascertained provision for guarantee damages warranty total rM’000 rM’000 rM’000 rM’000

current:

2011At beginning of year 1,276 421 - 1,697 Arose during the year (Note 8) 12,824 - 4,743 17,567 Utilised (14,100) - - (14,100)

At end of year - 421 4,743 5,164

2010At beginning of year 1,276 444 - 1,720 Reversal of provision (Note 6) - (23) - (23)

At end of year 1,276 421 - 1,697



34. provisions (contd.)

Release of RM14,100,000 of Bank GuaranteeOn 15 March 2011, a subsidiary of the Company received a judgement from the High Court in relation to its application to restrain the Government of Malaysia (“GOM”) from making a demand for a retention bond amounting to RM14,100,000 pursuant to a Bank Guarantee (“Retention Bond”) and receive payment from guarantor for the said retention bond, and to restrain guarantor from releasing the money until the final disposal of the matter (“Judgement”). The Retention Bond was demanded by the GOM on the grounds of breach of contract by the subsidiary. The application for the injunction was heard on 18 February 2011. The learned judge dismissed the application for the injunction with cost. An application for an injunction pending the hearing of the appeal was also dismissed by the learned judge. The subsidiary subsequently issued a Notice of Arbitration to commence arbitration proceedings against the GOM on 14 June 2011. The solicitors are of the view that the subsidiary has good grounds in succeeding in its claims against the GOM before the arbitral tribunal.

Provision for liquidated damagesProvision for liquidated damages is in respect of projects undertaken by certain subsidiaries. The provision is recognised for expected liquidated damages claims based on the terms of the applicable sale and purchase agreements.

Provision for warrantyA subsidiary of the Group has recognised the provision for warranty expense, which pertains to the cost anticipated to remedy any defects, to the satisfaction of customer, within 12 months from date of substantial completion.

35. commitments

(a) capital commitments

Group 2011 2010 rM’000 rM’000

Approved but not contracted for property, plant and equipment 10,868 9,113


125a n n u a l r e p o r t 2 0 1 1

36. contingent liabilities

Guarantees

The Group and Company have provided the following guarantees at the reporting date:


unsecured:Corporate guarantees given to financial institutions for: - Facilities granted to subsidiaries - - 279,951 202,101 - Facilities granted to an associate 8,840 14,000 - -

8,840 14,000 279,951 202,101

37. contingent asset

On 23 March 2005, the Company through its solicitors had served a Writ of Summons on AXA Affin Assurance Berhad (“AXA”). The suit involves a claim under a Contractor’s All Risk Policy (“CAR Policy”) underwritten by AXA and procured by the Company in respect of a Project known as Construction and Completion of Jalan Simpang Pulai-Lojing-Gua Musang-Kuala Berang, Pakej 2 (“MTD Construction Project”). The coverage period of the policy was from 11 April 1996 to 10 April 1999, which was extended to 31 January 2004 plus 24 months maintenance including 3 months and 14 days thereafter, for making good defects, imperfections, shrinkages or any other faults or indemnify the Company for any losses or damages in respect of the Project.

The Company contends that AXA is in breach of the CAR Policy and is claiming for inter-alia, RM38,586,234 as at August 2003 being costs for the remedial works in respect of slope failures/landslips at the Project site, alternatively damages to be assessed and costs.

On 27 May 2011, the learned judge ruled the suit in favour of the Company and held that:

(1) AXA is liable to all the losses and damages suffered by the Company and the Company is entitled for indemnity under the Policy;

(2) The Company’s claim is allowed on liability with costs. Costs shall be taxed unless agreed; and

(3) Damages (indemnity) to be assessed before the Registrar.

On 10 June 2011, the Company has been informed that AXA has filed a notice of appeal with the Court of Appeal and AXA has 8 weeks to file the memorandum and record of appeal.



38. Material litigations

(a) On 9 June 1998, Perwira Affin Bank Berhad (“Plaintiff”) filed a Writ of Summons and Statement of Claim in the Kuala Lumpur High Court against the Company (“Defendant”) seeking for inter alia, a declaration that all progress payments due and owing by the Defendant to a third party, LK Ooi Construction Sdn. Bhd. under a letter of award/contract with the Defendant in relation to construction and completion of a subcontract that was valued at RM8,851,935.30 which had been assigned to the Plaintiff by way of a deed of assignment, to be paid to the Plaintiff.

Whilst the aggregate amount of the progress payments is not specified in the statement of claim, the Plaintiff claims that the Defendant had, save for an amount of approximately RM2,821,189.53 failed to pay the Plaintiff any or all of the progress payments due under the sub contract. As such, the Plaintiff’s claim against the Defendant is estimated to be approximately RM6,030,745.77.

The Plaintiff’s application for summary judgment was heard and dismissed with costs on 30 March 2000. The Plaintiff’s appeal to the Court of Appeal against the summary judgement was also dismissed with costs on 23 June 2003.

Hearing of the matter began on 25 October 2005 and decision was fixed on 30 August 2007. The Plaintiff filed an application to further amend the statement of claim on 17 August 2007. The hearing of the application was heard on 13 February 2009 and the court dismissed the Plaintiff’s application. The Plaintiff filed an appeal to the Court of Appeal. Therefore, the matter which is fixed for decision of the full trial on 29 May 2009, was postponed as the Learned Judge was of the view that the decision ought to be delivered after the disposal of the Plaintiff’s appeal. The hearing date for the Plaintiff’s appeal has yet to be fixed.

(b) On 4 July 2008, Tenaga Nasional Berhad (“Plaintiff”) through their solicitor had served the Writ of Summon and Statement of Claim against the Company (“Defendant”) alleging that, the Defendant and/or agent and/oremployeeshavenegligentlycauseddamagetothePlaintiff’s33KVpowercablesduringtheroadworkand excavation near the Plaza Phoenix. The Plaintiff’s claim are as follows:

i) RM1,407,000-LossandSpecialDamagesdonetothe33KVpowercable;

ii) RM10,000,000 - Aggravated damages and Exemplary damages;

iii) 8% interest on the amount of RM1,407,000 from the date of filing of the writ summon and statement of claim until full realisation;

iv) 8% interest on the amount of RM10,000,000 from the date of filing of the writ summon and statement of claim until full realisation; and

v) Costs.

The Defendant categorically denies liability for any damages to the power cables and further stated that the amounts claimed by the Plaintiff for the alleged loss and damage are grossly inflated and without basis.

The case is fixed for mention on 17 November 2011. Pending satisfactory resolution of the matters, no provision has been made by the directors in the financial statements.


127a n n u a l r e p o r t 2 0 1 1

38. Material litigations (contd.)

(c) On 24 November 2003, ASC Engineering Sdn. Bhd., a wholly-owned subsidiary of the Company (”Plaintiff”), filed a Writ of Summon and Statement of Claim against Mohd Zahari Hassan Sdn. Bhd. (”Defendant”) for the outstanding sum of RM2,251,000 for works done arising from the Contract of Water Supply Scheme, Selangor River, Phase 2 for the Development of 46 units Class G Quarters, 1 unit of surau and related works at Sungai Selangor Water Treatment Plant. The Defendant also filed a counterclaim for the sum of RM2,925,200.00 being allegedly losses and damages suffered by the Defendant. On 5 February 2009, Defendant filed an application for leave to issue Third Party Notice to include a third party into the proceeding. The case went on for full trial on 20 December 2010 and 11 January 2011. On 14 June 2011, the learned judge decided as follows:

i) the Plaintiff’s claim to the extent of RM504,983.49 was allowed with costs; ii) the Defendant’s counterclaim dismissed with costs; iii) the Defendant’s claim against the Third Party dismissed with costs; and iv) all costs to be agreed on or taxed.

(d) On 14 December 2006, Zabima Engineering and Construction Sdn. Bhd (“Plaintiff”), filed a Writ of Summon and Statement of Claim against Bumi Hiway (M) Sdn. Bhd. (“Defendant”). The claim is supported by Persys Sdn. Bhd. a 100% owned subsidiary of the Company as Persys Sdn. Bhd. has completed the job under the name of Zabima. The claim was pursuant to the dispute on the project namely : Project Lingkaran Tengah 2-Pakej 11 contract for supply and launch of Pre Cast Box Segments.

ThePlaintiff’sclaimisforthereleaseofretentionsumfortheamountofRM2,350,000,VariationWorksforRM3,204,000 and Insurance for RM113,000. The total claim is RM5,667,000. The Plaintiff at the same time filed an injunction application to freeze or to secure payment to the Court or to the stakeholder of the total retention sum. The Defendant subsequently filed an application to stay of proceeding pending referring the matter to arbitration. On 14 August 2008, the Court dismissed the Defendant’s application for stay of proceedings and proceeds to hear Plaintiff’s application for an injunction and the Court had granted to the Plaintiff the injunction order on 5 January 2011.

The matter has been set for full trial on 22, 23 and 24 August 2011. The Defendant however was wound-up on 9 March 2011 and the suit against the Defendant has been withdrawn with no order as to cost and the Defendant counter claim also struck off with no order as to cost. The plaintiff is proceeding with filing of a Proof of Debt.

(e) On 27 February 2007, ASC Engineering Sdn. Bhd., a wholly-owned subsidiary of the Company, filed a Writ of Summon and Statement of Claim against Road Builders Sdn. Bhd. (”Defendant”) for the sum of RM2,555,000 consisting of the balance amount outstanding by the Defendant and the cost of the additional work performed by the Plaintiff. The dispute was pursuant to the Project known as: “Proposed Main Building Works and External Works for Cadangan Pembangunan 1 Blok Pusat Perdagangan dan membeli-belah Di Precinct 1, PUTRAJAYA Contract: Production and Installation of Pre-cast Concrete panels; wall panels and coping panels”. The Defendant also filed a defence and counter claim of RM6,084,000 for various costs, expenses and damages arising from the Plaintiff’s alleged late completion of the subcontract works.



38. Material litigations (contd.)

The Plaintiff and the Defendant then entered into a Settlement Agreement dated 17 August 2010 to settle the above matter. On 1 September 2010, payment of the settlement sum via cheque was cleared and on the case management date i.e. 2 September 2010, the suit and the counterclaim were withdrawn with no order as to costs and with no liberty to file afresh.

39. related party transactions

(a) significant transactions with related parties

In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place at terms agreed between the parties during the financial year:

2011 2010 rM’000 rM’000 Group

Contract revenue from: - Ultimate holding company (i) (205) - - Immediate holding company (i) (246,373) (229,383) - Related companies (2010: companies where certain directors have interest*) (i) (2,084) (9,766) - Other related companies (i) (148,138) (272,903)Contract cost charged to ultimate holding company (2010: companies where certain directors have interest*) (ii) 9,712 84,513Insurance expense paid to a related company (2010: company related to a director of the Company*) (iii) 823 1,360Project management fee payable to a related company (iv) 3,579 7,707Rental payable to a related company (v) 2,378 1,674

company

Management fees receivable from subsidiaries (vi) (7,133) (5,474)Interest income receivable from a subsidiary (vii) (4,760) (4,760)Interest expense payable to subsidiaries (vii) 8,598 7,133Rental payable to a related company (v) 2,378 1,674


129a n n u a l r e p o r t 2 0 1 1

39. related party transactions (contd.)

(a) significant transactions with related parties (contd.)

* In prior financial year, Datin Nik Fuziah binti Nik Hussain, who is the spouse of Dato’ Azmil Khalili bin Dato’ Khalid, a director of the Company, and the daughter of Dato’ Dr. Nik Hussain bin Abdul Rahman, a director of the Company, has an interest in these companies. In current financial year, these companies (subsidiaries of Alloy Consolidation Sdn. Bhd.) are treated as related companies of MTDACPI.

(i) The contract revenue were made according to the published prices and conditions offered to the major customers of the Group, except that a longer credit period of up to 6 months is normally granted.

(ii) The rendering of contract services was made at arm’s length pricing with fixed term of repayment.

(iii) Insurance charges were made according to published prices and conditions similar to those offered to major external customers of the insurer except that interest was not charged on overdue balances.

(iv) The rendering of project management services by a related company was made at arm’s length pricing with fixed term of repayment.

(v) The rental payable to a related company arose from the use of office premises from the related company at prevailing market price and terms similar to those offered by the related companies to their major tenants.

(vi) The management fees receivables from subsidiaries were services are delivered, except that a longer credit period of up to 6 months is normally granted.

(vii) The loan interest income/expense arose from the amounts due from/(to) holding company and fellow subsidiaries.

Information regarding outstanding balances arising from related party transactions as at 31 March 2011 are disclosed in Notes 21 and 33.

(b) compensation of key management personnel

The remuneration of directors and other members of key management during the year was as follows:


Short-term employee benefits 2,991 3,116 605 1,218 Contributions to defined contribution plan 218 167 27 97

3,209 3,283 632 1,315

Included in the total key management personnel of the Group and of the Company is director remuneration of RM2,770,000 (2010: RM2,450,000) and RM379,000 (2010: RM411,000) respectively as disclosed in Note 10.



40. fair value of financial instruments

It is not practical to determine the fair values of balances with all related parties due principally to a lack of fixed repayment term entered into by the parties involved and without incurring excessive costs. However, the directors do not anticipate the carrying amounts recorded at the reporting date to be significantly different from the values that would eventually be received or settled.

The carrying amounts of other 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 except as indicated in their respective notes.

41. financial risk management objectives and policies

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk and foreign currency risk.

The Board of Directors reviews and agrees policies and procedures for the management of these risks. The audit committee provides independent oversight to the effectiveness of the risk management process.

It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall be undertaken except for the use as hedging instruments where appropriate and cost-efficient. The Group and the Company do not apply hedge accounting.

The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.

(a) credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including cash and bank balances, non-current investments), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. For transactions that do not occur in the country of the relevant operating unit, the Group does not offer credit terms without the approval of the Head of Credit Control.

Exposure to credit risk

At the reporting date, the Group’s and Company’s maximum exposure to credit risk are represented by the carrying amount of each class of financial assets recognised in the statements of financial position. The Group and the Company do not have any significant exposure to any individual customer or counterparty nor does it have any major concentration of credit risk related to any financial assets except as disclosed in Note 21(b).


131a n n u a l r e p o r t 2 0 1 1

41. financial risk management objectives and policies (contd.)

(a) credit risk (contd.)

Credit risk concentration profile

The Group determines concentrations of credit risk by monitoring the customers’ profile of its trade receivables on an ongoing basis. The credit risk concentration profile of the Group’s trade receivables at the reporting date are as follows:

Group 2011 2010 rM’000 % of total rM’000 % of total

by country:

Malaysia 155,519 67% 105,286 60% Thailand 4,074 2% 2,293 1% Philippines 66,115 28% 60,867 35% Saudi Arabia 6,794 3% 8,783 5%

232,502 100% 177,229 100%

At the reporting date, approximately:

- 41% (2010: 35%) of the Group’s trade and other receivables were due from related parties while almost all of the Company’s receivables were balances with related parties.

Financial assets that are neither past due nor impaired Information regarding trade and receivables that are neither past due nor impaired is disclosed in Note 21.

Deposits with banks that are neither past due nor impaired are placed with reputable financial institution with high credit ratings and no history of default.

Financial assets that are either past due or impaired Information regarding financial assets that are either past due or impaired is disclosed in Note 21.

(b) liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.




(b) liquidity risk (contd.)

The Group and Company manage 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 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.

2011 on demand or within one to one year five years total rM’000 rM’000 rM’000 Group financial liabilities:

Trade and other payables 210,823 35,391 246,214 Loans and borrowings 72,817 931 73,748

Total undiscounted financial liabilities 283,640 36,322 319,962

company

financial liabilities:

Trade and other payables 206,539 - 206,539 Loans and borrowings 9,395 - 9,395 Total undiscounted financial liabilities 215,934 - 215,934


133a n n u a l r e p o r t 2 0 1 1


(c) 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 and the Company’s exposure to interest rate risk arises primarily from their interest-bearing loans and borrowings. The Group has no significant interest-bearing financial assets, other than fixed rate interest-bearing trade receivables as disclosed in Note 21. The Group’s income and operating cash flows are substantially independent of changes in market interest rates. The Group’s other interest-bearing financial assets are mainly short-term in nature and have been mostly placed in fixed deposits.

The Group manages the interest rate risk exposure by optimising the mix between fixed and floating interest rate in view of the estimated interest rate trend. The Group does not use any derivatives to manage interest rate risk.

Sensitivity analysis for interest rate risk

At the reporting date, if interest rates had been 100 basis points lower/higher, with all other variables held constant, the Group’s and the Company’s loss net of tax would have been RM747,000 and RM29,000 higher/lower, arising mainly as a result of lower/higher interest expense on floating rate loans and borrowings. The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment.

(d) 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 Group is not significantly exposed to foreign currency risk as majority of the Group’s transactions, assets and liabilities are denominated in Ringgit Malaysia other than foreign subsidiaries operate. The Group is exposed to transactional currency risk primarily through sales and purchases that are denominated in a currency other than the functional currency of the operations to which they relate.

The currencies giving rise to this risk are primarily United States Dollar (‘USD’), Saudi Arabia Riyals (‘SAR’), Indian Rupees (‘IDR’), United Arab Emirates Dirhams (‘AED’), Thailand Baht (‘THB’) and Philippines Peso (‘PHP’). Foreign currency exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.

The Group maintains a natural hedge, whenever possible, by borrowing in the currency of the country in which the property or investment is located or by borrowing in currencies that match the future revenue stream to be generated from its investments.

The net unhedged financial assets and financial liabilities of the Group that are not denominated in their functional currencies as follows:




(d) foreign currency risk (contd.)

net financial assets/ (liabilities) held in non-functional currencies functional currency of the Group (in rM’000) usD rM

at 31 March 2011 Ringgit Malaysia (755) - Indian Rupee - (41,723) Saudi Arabia Riyals - 836 United Arab Emirates Dirhams - 18,143 Thailand Baht - (110,035) Philippines Peso - 21,703

at 31 March 2010 Ringgit Malaysia 267 - Indian Rupee - (40,776) Saudi Arabia Riyals - 819 United Arab Emirates Dirhams - 15,048 Thailand Baht - (113,404) Philippines Peso - 21,507

Sensitivity analysis for foreign currency risk The following table demonstrate the sensitivity of the Group’s loss net of tax to a reasonably possible

change in the USD, IDR, SAR, UAE, THB and PHP exchange rates against the functional currencies of the Group entities, with all other variables held constant.

Group 2011 rM’000 loss net of tax

USD/RM - strengthened 3% (23) - weakened 3% 23 IDR/RM - strengthened 3% (1,252) - weakened 3% 1,252 SAR/RM - strengthened 3% 25 - weakened 3% (25) UAE/RM - strengthened 3% 544 - weakened 3% (544) THB/RM - strengthened 3% (3,301) - weakened 3% 3,301 PHP/RM - strengthened 3% 651 - weakened 3% (651)


135a n n u a l r e p o r t 2 0 1 1

42. capital management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 March 2011 and 31 March 2010.

As disclosed in Note 29(c)(i), a branch of a subsidiary of the Group is required by the Article 176 of the company law in the Kingdom of Saudi Arabia to contribute to and maintain a non-distributable statutory reserve fund whose utilisation is subject to approval by the relevant authorities. This externally imposed capital requirement has been complied with by the above-mentioned subsidiary for the financial years ended 31 March 2011 and 2010.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital. Net debt includes current and non-current loans and borrowings less deposits, cash and bank balances. Capital is the equity attributable to the owners of the parent less the above mentioned restricted reserve fund.


Loans and borrowings (Note 31) 73,748 66,200 9,395 4,061Less: Cash and bank balances (Note 26) (30,859) (61,471) (2,623) (3,064)

Net debt 42,889 4,729 6,772 997

Equity attributable to the owners of the parent 183,710 193,706 384,185 390,483Less: Other reserves (29,210) (4,115) - -

Total capital 154,500 189,591 384,185 390,483

Gearing ratio 28% 2% 2% <1%



43. segmental information

For management purposes, the Group is organised into business units based on their products and services, and has 2 reportable operating segments as follows:

(i) Construction - Constructing and marketing of heavy element precast products for viaducts, elevated highways, light rail transit guideways, bridges, building system products, contracting in the fields of environmental systems and providing specialist contracting services.

(ii) Manufacturing and related services - manufacturing and marketing of industrial products, project management, manufacturing, marketing, licensing and franchising of precast and engineered products and investment holding.

Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments.

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.

Per consolidated Adjustments financial and statements Construction Manufacturing Total Elimination Notes Total 2011 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue: External customers 407,016 134,514 541,530 - 541,530 Inter-segment 318 66,113 66,431 (66,431) A -

Total revenue 407,334 200,627 607,961 (66,431) 541,530

Results: Interest income 12,752 1,239 13,991 (13,380) A 611 Finance costs (12,073) (7,375) (19,448) 13,380 A (6,068) Depreciation (1,373) (9,045) (10,418) - (10,418) Share of results of associates 403 (12) 391 - 391 Share of results of joint venture - 1,640 1,640 - 1,640 Provisions 5,164 - 5,164 - 5,164 Impairment of non-financial assets - Goodwill (2,593) - (2,593) - (2,593) Other non-cash (expenses)/income (2,559) 1,939 (620) - B (620) Income tax expense 1,044 (1,345) (301) - (301) Segment loss (9,420) (4,302) (13,722) (618) C (14,340)


137a n n u a l r e p o r t 2 0 1 1

43. segmental information (contd.)

Per consolidated Adjustments financial and statements Construction Manufacturing Total Elimination Notes Total 2011 RM’000 RM’000 RM’000 RM’000 RM’000

Assets: Investments in associates 15,120 3,263 18,383 - 18,383 Interest in joint venture - 4,206 4,206 - 4,206 Additions to non-current assets 611 13,555 14,166 - D 14,166 Segment assets 365,111 258,971 624,082 20,858 E 644,940 Segment liabilities 374,784 77,019 451,803 712 F 452,515

2010

Revenue: External customers 494,825 155,994 650,819 - 650,819 Inter-segment 2,543 66,367 68,910 (68,910) A - Total revenue 497,368 222,361 719,729 (68,910) 650,819

Results: Interest income 14,784 209 14,993 (11,916) A 3,077 Finance costs (10,862) (7,335) (18,197) 11,916 A (6,281) Depreciation 1,806 10,502 12,308 - 12,308 Share of results of associates (2,408) (100) (2,508) - (2,508) Impairment of non-financial assets (3,838) (667) (4,505) - (4,505) Other non-cash income 423 526 949 - B 949 Income tax expense (5,000) (860) (5,860) - (5,860) Segment profit/(loss) 5,229 (10,171) (4,942) (5,722) C (10,664)

Assets: Investments in associates 14,655 3,319 17,974 - 17,974 Additions to non-current assets 880 4,401 5,281 - D 5,281 Segment assets 452,903 343,781 796,684 (186,606) E 610,078 Segment liabilities 320,768 85,549 406,317 1,723 F 408,040




a Inter-segment revenues, interest income and finance costs are eliminated on consolidation.

b Other material non-cash expenses consist of the following items as presented in the respective notes to the financial statements:

2011 2010 note rM’000 rM’000

Net impairment losses on financial assets - Trade receivables 8 (2,594) - - Other receivables 8 - (1,373) Inventories written off 8 (64) (2) Net reversal of allowance for impairment loss of: - Trade receivables 6 - 2,324 - Other receivables 6 2,038 -

(620) 949

c The following items are added to/(deducted from) segment loss to arrive at the “Loss before tax” presented in the consolidated statement of comprehensive income:

2011 2010 rM’000 rM’000

Gain from inter-segment sales (56) - Share of results of associates 391 (2,508) Share of results of joint venture 1,640 - Impairment of non-financial assets - goodwill (2,593) (3,214)

(618) (5,722)

D Additions to non-current assets consist of:

2011 2010 rM’000 rM’000 Property, plant and equipment 4,366 5,281 Intangible assets 9,800 -

14,166 5,281


139a n n u a l r e p o r t 2 0 1 1


e The following items are added to/(deducted from) segment assets to arrive at the total assets reported in the consolidated statement of financial position:

2011 2010 rM’000 rM’000

Investments in associates 18,383 17,974 Interest in joint venture 4,206 - Deferred tax assets 4,475 1,802 Income tax recoverable 5,100 1,861 Inter-segment assets (11,306) (208,243)

20,858 (186,606)

f The following items are added to segment liabilities to arrive at the total liabilities reported in the consolidated statement of financial position:

2011 2010 rM’000 rM’000

Income tax payable 140 1,377 Deferred tax liabilities 495 269 Inter-segment liabilities 77 77

712 1,723

Geographical information

Revenue and non-current assets information based on geographical location of its customers and assets respectively are as follows:

revenue non-current assets 2011 2010 2011 2010 rM’000 rM’000 rM’000 rM’000

Malaysia 400,346 406,309 186,151 194,702 Thailand - 2 ,485 233 1,588 India 1,344 1,296 81 699 Philippines 134,902 235,356 659 1,743 United Arab Emirates (UAE) 4,938 1,635 - - Saudi Arabia - 3,738 5 32

541,530 650,819 187,129 198,764




Non-current assets information presented above consist of the following items as presented in the consolidated statement of financial position:

2011 2010 rM’000 rM’000

Property, plant and equipment 122,993 141,693 Investment properties 278 420 Intangible asset 63,858 56,651

187,129 198,764

44. subsequent events

(a) formation of new joint venture

On 26 May 2011, the Group through a wholly-owned subsidiary, MTD ACP Precast Sdn. Bhd. entered into a joint venture agreement with Al-Meraikhi Industrial Complex to form a joint venture, which shall be known as‘Al-MeraikhiIndustrialComplex-MTDACPPrecastSdn.Bhd.-AbuDhabiJointVenture.

The parties on the same date, entered into a contract with Samsung C&T Corporation (“Samsung”), to undertake the supply of precast tunnel segments to Samsung (“Works”) for the construction of STEP Deep Tunnel Sewer T-01 Project in Abu Dhabi, UAE. The total value of the contract is AED71million, equivalent to RM58.2million. The Works is expected to commence operation in October 2011 and shall be completed by 31 July 2013. The Group’s reward and financial obligation for the contract is up to 50% which funding requirements would be through project advances, internally generated funds and bank borrowings.

45. comparatives

The following comparatives have been restated:

as consolidated statement previously as of financial position note stated adjustments restated rM’000 rM’000 rM’000

31 March 2010

non current

Property, plant and equipment A 136,410 5,283 141,693 Prepaid land lease payments A 5,283 (5,283) - Trade receivables B,C - 6,170 6,170 Trade payables D - 43,784 43,784


141a n n u a l r e p o r t 2 0 1 1

45. comparatives (contd.)

as consolidated statement previously as of financial position note stated adjustments restated rM’000 rM’000 rM’000

31 March 2010

current

Trade and other receivables B,C 257,174 (6,170) 251,004 Trade and other payables D 260,876 (43,784) 217,092

1 april 2009

non current Property, plant and equipment A 149,242 6,052 155,294 Prepaid land lease payments A 6,052 (6,052) - Trade receivables B,C 4,198 6,509 10,707 Trade payables D - 34,119 34,119 current

Trade and other receivables B,C 244,701 (6,509) 238,192 Trade and other payables D 380,445 (34,119) 346,326

a The effects on the restatement of comparatives was due to adoption of the amendments to FRS 117 Leases as disclosed in Note 2.2.

b The reclassification of trade and other receivables from current to non-current was due to retention sum

which is more than 12 months.



45. comparatives (contd.)

c Breakdown of trade and other receivables: as previously as stated reclassification restated rM’000 rM’000 rM’000

Trade receivables Third parties 160,991 (11,335) 149,656 Immediate holding company - 370 370 Related companies - 16,699 16,699

Other receivables Advances to subcontractors 273 11,335 11,608 Immediate holding company 481 (370) 111 Related companies 19,678 (16,699) 2,979

D The reclassification of trade and other payables from current to non-current was due to retention sum which is more than 12 months.

46. supplementary information – breakdown of retained profits into realised and unrealised

The breakdown of the retained profits of the Group and of the Company as at 31 March 2011 into realised and unrealised profits 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, as issued by the Malaysian Institute of Accountants.

Group company rM’000 rM’000

Total (accumulated losses)/retained earnings of the Company and its subsidiaries - Realised (181,229) 46,459 - Unrealised 11 (230)

(181,218) 46,229

Total share of retained profits from associate - Realised 5,445 - - Unrealised (739) -

Total share of retained profits from joint venture - Realised 1,640 -

(174,872) 46,229

Less: Consolidation adjustments (4,396) - (Accumulated losses)/retained earnings as per financial statements (179,268) 46,229


143a n n u a l r e p o r t 2 0 1 1

List of Proper t ies

item location owner Description tenure land built-up approximate net book and area area age of value existing use (sq ft) (sq ft) building (rM’000)

1 PTD No. 34735 Lot 9041 MTD ACPI Land Freehold 616,844 - - 1,414 Mukim Ampangan Engineering District of Seremban Berhad Negeri Sembilan Darul Khusus 2 PTD 30196 Lot No.47084, Associated Office and Freehold 841,415 45,703 22 years 10,234 PTD 30197 Lot No.47085 and Concrete factory 6 months PTD 24102 Lot No.23528 Products building Mukim Hulu Kinta (Malaysia) District of Kinta Sdn Bhd Perak Darul Ridzuan 3 PTD 18416 Lot No.9020, Associated Office and Freehold 1,279,183 103,531 16 years 13,246 PTD 18417 Lot No.9021 and Concrete factory 8 months PTD 18418 Lot No.9022 Products building Mukim Ampangan (Malaysia) District of Seremban Sdn Bhd Negeri Sembilan Darul Khusus 4 Lot Nos. 160 and 161 Associated Office and Freehold 1,261,104 101,268 17 years 5,011 Mukim Gurun Concrete factory 8 months District of Kuala Muda Products building Kedah Darul Aman (Malaysia) Sdn Bhd 5 Lot No. 2661 Associated Land Freehold 1,845,855 - - 4,600 Mukim Senai-Kulai Concrete District of Johor Bahru Products Johor Darul Takzim (Malaysia) Sdn Bhd 6 Lot No. 2876 Associated Land Freehold 1,041,318 - - 2,806 Mukim Hulu Sungai Johor Concrete Kota Tinggi Products Johor Darul Takzim (Malaysia) Sdn Bhd 7 PTD 18415 Lot No.9019 and Associated Office and Freehold 852,825 87,000 16 years 11,215 PTD 18419 Lot No.9023 Concrete factory 6 months Mukim Ampangan Products building District of Seremban (Malaysia) Negeri Sembilan Darul Khusus Sdn Bhd

held by the Group as at 31 March 2011



List of Proper t iesheld by the Group as at 31 March 2011 (contd.)

8 PT 4936 & PT 4937 Associated Office and Freehold 633,645 47,000 13 years 8,567 (Sub-divided from Lot 162) Concrete factory Mukim Gurun Products building District of Kuala Muda (Malaysia) Kedah Darul Aman Sdn Bhd 9 Lot No.676 & 677 Associated Office and Freehold 926,098 250,842 7 years 11,313 Mukim Jeram Batu Concrete factory District of Pontian Products building Johor Darul Takzim (Malaysia) Sdn Bhd 10 H.S(M) 5569 No.P.T.8209K and Associated Office and 60-year leases 464,570 17,606 30 years 2,710 H.S(D) 4418 No.P.T.14711K Concrete factory expiring on 6 months Mukim Kuala Nerus Products building 29.06.2045 and District of Terengganu (Malaysia) 13.06.2052 Terengganu Darul Iman Sdn Bhd respectively 11 PTD No. 10140 Associated Office and Freehold 2,134,483 419,381 17 years 26,017 *** Lot No. 2394 and 2396 Concrete factory Mukim Batang Kali Products building District of Selangor (Malaysia) Selangor Darul Ehsan Sdn Bhd 12 H.S.(D)139005 PTD No.8783 ACP Office and 60-year 261,348 14,609 27 years 2,765 ## Mukim Senai-Kulai Marketing factory leases 6 months District of Johor Sdn Bhd building expiring Johor Darul Takzim 12.01.2047 13 H.S (M) 6209 No.P.T.4175 ACP-DMT Office and 99-year 78,135 20,380 21 years 1,350 Mukim Kapar Sdn Bhd factory leases 6 months District of Klang building expiring on Selangor Darul Ehsan 09.06.2086 14 Parcel No. T3.01 Universal Shoplot Freehold - 457 13 years 278 The Summit Subang USJ Building H.S.(D) 121185 Products Lot P.T. No.8 Sdn Bhd Mukim Damansara Daerah Petaling Selangor Darul Ehsan

145a n n u a l r e p o r t 2 0 1 1

List of Proper t iesheld by the Group as at 31 March 2011 (contd.)


15 A1/4A-0019 Persys Double storey 99-year 1,651 3,058 15 years - No17, Jalan Kenangasari 2A Engineering shop office leases 6 months Bandar Sg. Buaya Sdn Bhd expiring on 48010 Rawang 04.01.2095 Selangor Darul Ehsan 16 A1/12DS-0120 Persys Double storey 99-year 1,644 1,460 15 years - No. 27, Jalan Melatisari 2E Engineering terrace house leases 6 months Bandar Sg. Buaya Sdn Bhd expiring on 48010 Rawang 04.01.2095 Selangor Darul Ehsan 17 A1/16-0008 Persys One and half 99-year 3,029 1,743 15 years - No.15, Jalan Inaisari 3 Engineering storey terrace leases 6 months Bandar Sg. Buaya Sdn Bhd house expiring on 48010 Rawang 04.01.2095 Selangor Darul Ehsan 18 Unit B02-15 Meranti Park MTD Apartment Leasehold - 525 12 years 119 Bukit Tinggi Construction Expiring 2091 Bentung Sdn Bhd Pahang Darul Makmur 19 Unit C03-10 Meranti Park MTD Apartment Leasehold - 805 12 years 176 Bukit Tinggi Construction Expiring 2091 Bentung Sdn Bhd Pahang Darul Makmur

*** Include office and factory building amounting to net book value of RM2,458,201 which are held under Persys Sdn Bhd.

## Include office and factory building amounting to net book value of RM707,434 which are held under Associated Concrete Products (Malaysia) Sdn Bhd.


Notice of Annual G eneral M eeting

notice is hereby Given that the Eighteenth Annual General Meeting of the Company will be held at its Registered Office at 1, Jalan Batu Caves, 68100 Batu Caves, Selangor Darul Ehsan on Thursday, 29 September 2011 at 9.30 a.m. for the following purposes:

aGenDa

as orDinary business

1. To receive the Audited Financial Statements for the financial year ended 31 March 2011 together with the reports of the Directors and the Auditors thereon.

2. To approve the payment of a first and final dividend of 1 sen per share less 25% income tax for the financial

year ended 31 March 2011. (ordinary resolution 1)

3. To approve the payment of Directors’ fees for the financial year ended 31 March 2011. (ordinary resolution 2)

4. To re-elect the following Directors who retire in accordance with Article 85 of the Company’s Articles of Association:

i) Dato’ Ir. A. Rashid bin Omar (ordinary resolution 3) ii) Keith George Cowling (ordinary resolution 4)

5. To re-appoint Dato’ Dr. Nik Hussain bin Abdul Rahman who retires pursuant to Section 129(6) of the Companies Act, 1965, to hold office until the conclusion of the next Annual General Meeting of the Company.

(ordinary resolution 5)

6. To re-appoint Messrs. Ernst & Young as Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration. (ordinary resolution 6)

as special business To consider and, if thought fit, with or without modification, to pass the following resolutions:

7. authority to issue shares pursuant to section 132D of the companies act, 1965

“That, subject always to the Companies Act, 1965 (“the Act”), the Articles of Association of the Company and approvals of the relevant regulatory authorities, the Directors be and are hereby empowered pursuant to Section 132D of the Act to issue and allot shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion deem fit provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed ten per centum (10%) of the issued and paid-up share capital of the Company for the time being 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.” (ordinary resolution 7)

147a n n u a l r e p o r t 2 0 1 1

8. proposed renewal of share buy-back authority

“That, subject to the Companies Act, 1965 (“the Act”), the Memorandum and Articles of Association of the Company and Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements and the approvals of any other relevant regulatory authorities, the Directors of the Company be and are hereby authorised to purchase such number of ordinary shares of RM1.00 each in the Company’s issued and paid-up share capital (“MTDACPI Shares”) through Bursa Securities, subject further to the following:

(i) the maximum number of MTDACPI Shares which may be purchased and/or held by the Company shall not exceed ten per centum (10%) of the issued and paid-up share capital of the Company at the time of purchase;

(ii) the maximum amount of funds to be allocated by the Company for the purpose of purchasing MTDACPI Shares shall not exceed the aggregate of the Company’s audited retained profits and the share premium account; and

(iii) the authority conferred by this resolution will be effective immediately upon the passing of this ordinary resolution and shall continue to be in force until:

(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company, at which time the said authority will lapse, unless renewed by an ordinary resolution passed by the shareholders of the Company at that general meeting of the Company, either unconditionally or subject to conditions;

(b) the expiry of the period within which the next AGM of the Company is required by law to be held; or

(c) revoked or varied by an ordinary resolution passed by the shareholders of the Company in a general meeting;

whichever occurs first; but not so as to prejudice the completion of purchase(s) by the Company before the aforesaid expiry date.

That approval and authority be and are hereby given to the Directors of the Company to decide at their absolute discretion, to deal with the MTDACPI Shares so purchased pursuant to this resolution in all or any of the following manners:

(i) cancel the MTDACPI Shares so purchased; or

(ii) retain the MTDACPI Shares so purchased as treasury shares (of which may be distributed as dividends to shareholders and/or resold on Bursa Securities and/or subsequently cancelled); or

(iii) retain part of the MTDACPI Shares so purchased as treasury shares and cancel the remainder.

And that the Directors of the Company be and are hereby authorised to take all such steps as are necessary or expedient to implement and give full effect to this resolution with full power to assent to any conditions, modifications, variations and/or amendments as may be imposed by the relevant regulatory authorities and/or to do all such acts and things as the Directors may deem fit and expedient in the best interest of the Company.” (ordinary resolution 8)

Notice of Annual G eneral M eeting (contd.)


9. proposed renewal of shareholders’ Mandate for recurrent related party transactions of a revenue or trading nature

“That, subject to Bursa Malaysia Securities Berhad Main Market Listing Requirements, approval be and is hereby given for the renewal of the shareholders’ mandate for the Company and/or its subsidiaries to enter into the recurrent related party transactions of a revenue or trading nature with those related parties as set out in Section 2.1.3 of the Circular to Shareholders dated 7 September 2011, subject further to the following:

(i) the transactions are in the ordinary course of business which are necessary for the day-to-day operations and are on normal commercial terms not more favourable to related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company;

(ii) disclosure is made in the annual report of the aggregate value of transactions conducted pursuant to the shareholders’ mandate during the financial year; and

(iii) such approval shall continue to be in force until:

(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company, at which time it will lapse, unless renewed by an ordinary resolution passed by the shareholders of the Company at that general meeting of the Company;

(b) the expiry of the period within which the next AGM 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


whichever is the earlier.

And that the Directors of the Company be and are hereby authorised to do all such acts and things as they may consider expedient or necessary (including executing such documents as may be required) to give full effect to and complete the matters described in this ordinary resolution.” (ordinary resolution 9)

10. proposed new shareholders’ Mandate for new recurrent related party transactions of a revenue or trading nature

“That, subject to Bursa Malaysia Securities Berhad Main Market Listing Requirements, approval be and is hereby given to the Company and/or its subsidiaries to enter into new recurrent related party transactions of a revenue or trading nature with those related parties as set out in Section 2.1.3 of the Circular to Shareholders dated 7 September 2011, subject further to the following:

(i) the transactions are in the ordinary course of business which are necessary for the day-to-day operations and are on normal commercial terms not more favourable to related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company;

(ii) disclosure is made in the annual report of the aggregate value of transactions conducted pursuant to the shareholders’ mandate during the financial year; and

Notice of Annual G eneral M eeting(contd.)

149a n n u a l r e p o r t 2 0 1 1

(iii) such approval shall continue to be in force until:

(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company, at which time it will lapse, unless renewed by an ordinary resolution passed by the shareholders of the Company at that general meeting of the Company;

(b) the expiry of the period within which the next AGM 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


whichever is the earlier.

And that the Directors of the Company be and are hereby authorised to do all such acts and things as they may consider expedient or necessary (including executing such documents as may be required) to give full effect to and complete the matter described in this ordinary resolution.” (ordinary resolution 10)

11. To transact any other ordinary business of which due notice has been given.

notice of DiviDenD entitleMent anD payMent

notice is also hereby Given that subject to the approval of the shareholders at the Eighteenth Annual General Meeting, a first and final dividend of 1 sen per share less 25% income tax for the financial year ended 31 March 2011 will be paid on 31 October 2011 to Depositors who are registered in the Record of Depositors at the close of business on 10 October 2011.

A Depositor shall qualify for entitlement to the dividends only in respect of:

(a) Shares transferred into the Depositor’s securities account before 4.00 p.m. on 10 October 2011 in respect of ordinary transfers; and

(b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.

By Order of the Board,

chan bee Kuan (Maicsa 7003851)lee poh yean (Maicsa 7015043)Company Secretaries

Selangor Darul Ehsan7 September 2011



explanatory notes to ordinary business:

Agenda 1 is meant for discussion only as under the provisions of Section 169(1) of the Companies Act, 1965 and the Company’s Articles of Association, the formal approval of shareholders is not required to be obtained. Hence, the matter will not be put forward for voting.

explanatory notes to special business:

authority to issue shares pursuant to section 132D of the companies act, 1965

The Ordinary Resolution 7, if passed, will enable the Directors to issue and allot shares at any time in their absolute discretion without convening a general meeting. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next Annual General Meeting of the Company.

The renewal of this authority will provide flexibility to the Company for any possible fund raising proposals, including but not limited to placing of shares, for purpose of funding investment, acquisition and/or reduction of borrowings.

As at the date of this Notice, there is no issuance and allotment of shares pursuant to the shareholders’ mandate obtained on 23 September 2010.

proposed renewal of share buy-back authority

The Ordinary Resolution 8, if passed, will allow the Directors to exercise the power of the Company to purchase not more than 10% of the issued and paid-up share capital of the Company at any time within the time period stipulated in Bursa Malaysia Securities Berhad Main Market Listing Requirements.

proposed shareholders’ Mandate for recurrent related party transactions of a revenue or trading nature

The Ordinary Resolutions 9 and 10, if passed, will allow the Company and its subsidiaries to enter into recurrent related party transactions of a revenue or trading nature with the related parties in the ordinary course of business which are necessary for day-to-day operations and on normal commercial terms which are not more favourable to related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company. The details of the proposed shareholders’ mandate are set out in the Circular to Shareholders dated 7 September 2011.

Notes:

1. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint up to two (2) proxies to attend and vote

in his stead. A proxy 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.

2. In the case of a corporate member, the instrument appointing a proxy shall be under its Common Seal or under the hand of an

officer or attorney, duly authorised.

3. Where a member appoints two (2) proxies, the appointment shall be invalid unless he specifies the proportions of his shareholdings

to be represented by each proxy.

Notice of Annual G eneral M eeting(contd.)

151a n n u a l r e p o r t 2 0 1 1

4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 1, Jalan Batu Caves,

68100 Batu Caves, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the Meeting or at any

adjournment thereof.

5. Where a member of the Company 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.

Statement Accompanying Notice of Annual G eneral M eeting(Pursuant to Paragraph 8.27(2) of Bursa Malaysia Securities Berhad Main Market Listing Requirements)

Details of individuals who are standing for election as Directors (excluding Directors standing for a re-election) No individual is seeking election as a Director at the Eighteenth Annual General Meeting of the Company.


Number of shares held CDS Account No.

*I/We, ______________________________________________________________ *NRIC No./Company No. _____________________ (FULL NAME IN BLOCK LETTERS)

of _______________________________________________________________________________________________________________ (FULL ADDRESS)

being a *member/members of MTD ACPI ENGINEERING BERHAD, hereby appoint ____________________________________________

___________________________________________________________________________ NRIC No. ______________________________ (FULL NAME IN BLOCK LETTERS)

of _______________________________________________________________________________________________________________ (FULL ADDRESS)

or, *failing him/her, __________________________________________________________ NRIC No. ______________________________ (FULL NAME IN BLOCK LETTERS)

of _______________________________________________________________________________________________________________ (FULL ADDRESS)

or failing *him/her, the *CHAIRMAN OF THE MEETING as *my/our proxy to attend and vote for *me/us and on *my/our behalf at the Eighteenth Annual General Meeting of the Company to be held at the Registered Office of the Company at 1, Jalan Batu Caves, 68100 Batu Caves, Selangor Darul Ehsan on Thursday, 29 September 2011 at 9.30 a.m. and at any adjournment thereof.

(Please indicate with an “X” in the spaces provided below as to how you wish your votes to be cast. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting at *his/her discretion.)

As witness *my/our hand(s) this ___________________day of __________________, 2011

________________________________________________Signature of Member/Common Seal

Notes:1. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint up to two (2) proxies to attend and vote in his stead. A proxy 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.2. In the case of a corporate member, the instrument appointing a proxy shall be under its Common Seal or under the hand of an officer or attorney, duly authorised.3. Where a member appoints two (2) proxies, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 1, Jalan Batu Caves, 68100 Batu Caves, Selangor Darul Ehsan not less than forty-eight (48)

hours before the time for holding the Meeting or at any adjournment thereof.5. Where a member of the Company 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.

forM of proXy

no. resolutions for aGainst

1. To approve the payment of a first and final dividend of 1 sen per share less 25% income tax for the financial year ended 31 March 2011.

2. To approve the payment of Directors’ fees for the financial year ended 31 March 2011.

3. To re-elect Dato’ Ir. A. Rashid bin Omar as Director.

4. To re-elect Keith George Cowling as Director.

5. To re-appoint Dato’ Dr. Nik Hussain bin Abdul Rahman as Director.

6. To re-appoint Messrs. Ernst & Young as auditors and to authorise the Directors to determine their remuneration.

7. Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965.

8. Proposed Renewal of Share Buy-Back Authority.

9. Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature.

10. Proposed New Shareholders’ Mandate for New Recurrent Related Party Transactions of a Revenue or Trading Nature.

* Strike out whichever not applicable.

THE COMPANY SECRETARIES

MtD acpi enGineerinG berhaD (258836-V)

1, Jalan Batu Caves

68100 Batu Caves

Selangor Darul Ehsan

Malaysia

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AFFIXSTAMP

MTD ACPI ENGINEERING BERHAD (258836-V)

1, Jalan Batu Caves68100 Batu CavesSelangor Darul EhsanMalaysiaTel : 03-6195 1111Fax : 03-6188 0101

www.mtdgrp.com

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