CONTENT support vessel (“OSV”) services to oil majors such as PETRONAS Cari- ... dertake anchor handling functi ons (positi oning and retrieval of drill-

Jasa Merin (Malaysia) Sdn Bhd, (“Jasa Merin”) commenced operati on in 1982. For over 30 years, Jasa Merin has been providing off shore support vessel (“OSV”) services to oil majors such as PETRONAS Cari-gali Sdn Bhd, ExxonMobil Explorati on and Producti on Malaysia Inc. and Sarawak Shell Bhd. Presently, Jasa Merin operates a fl eet of 19 vessels comprising 2 Straight Supply Vessels (“SSV”) and 17 Anchor Handling Tug Supply Vessels (“AHTS”).

SSV are vessels specifi cally designed to transport equipment and cargoes to and from off shore installati ons whilst AHTS vessels un-dertake anchor handling functi ons (positi oning and retrieval of drill-ing rig anchors) and towing acti viti es (repositi oning of rigs to other drilling locati ons) in additi on to providing services of SSV. Jasa Mer-in operates two classes of AHTS, namely 60 MTBP AHTS which are the standard AHTS deployed in shallow waters, and 120 MTBP AHTS equipped with Dynamic Positi oning System that support both shal-low and deep water operati ons.

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

Operating Subsidiaries

Annual Report 2014 - SILK Holdings Berhad (405897-V) 1

CONTENT2 Corporate Information

3 Profi le of Board of Directors

6 Chairman’s Statement

9 Five-Year Group Financial Summary

10 Corporate Governance Statement

16 Audit Committee Report

20 Statement on Risk Management and Internal Control

23 Statement of Corporate Social Responsibility

24 Financial Statements

92 Additional Compliance Information

93 Substantial Shareholders

94 Directors’ Interests in Shares and Analysis of Shareholdings

97 Notice of 17th Annual General Meeting

Proxy Form

Annual Report 2014 - SILK Holdings Berhad (405897-V)2

CORPORATE INFORMATION

Executive Chairman, Non-Independent Executive Director

Dato’ Mohd Azlan Hashim

Deputy Chairman, Independent Non-Executive Director

Tan Sri Datuk Seri Razman M Hashim

Non-Independent Non-Executive Director

Johan Zainuddin bin Dzulkifl i

Independent Non-Executive Directors

Dato’ Harun bin Md Idris Tai Keat Chai Abdul Hamid bin Sh. Mohamed Nik Abdul Malik bin Nik Mohd Amin

AUDIT COMMITTEE

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

RISK MANAGEMENT COMMITTEE

Johan Zainuddin bin Dzulkifl i (Chairman) Nik Abdul Malik bin Nik Mohd Amin Jamaludin Mohd Nor

NOMINATION AND REMUNERATION COMMITTEE

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

INFRASTRUCTURE COMMITTEE Nik Abdul Malik bin Nik Mohd Amin (Chairman) Johan Zainuddin bin Dzulkifl i Dato’ Hj. Din bin Adam Jamaludin Mohd Nor Adzmi Shafi e

COMPANY SECRETARIES

Kwan Wai Kein (MAICSA 7055765) Sothirajen a/l S.Paranjothi (LS 0005734)

REGISTERED OFFICE Level 22, Axiata Tower No. 9, Jalan Stesen Sentral 5 Kuala Lumpur Sentral 50470 Kuala Lumpur Malaysia Tel No. : (03) 2273 1919 Fax No. : (03) 2273 8310

PRINCIPAL PLACE OF BUSINESS

Oil & Gas Support Services Division:Jasa Merin (Malaysia) Sdn BhdNo. 7776, Jalan Kubang Kurus24000 KemamanTerengganu Darul ImanMalaysiaTel : (09) 851 1100Fax : (09) 858 3237

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

SHARE REGISTRARSymphony Share Registrars Sdn BhdLevel 6, Symphony HousePusat Dagangan Dana 1Jalan PJU 1A/4647301 Petaling JayaSelangor Darul Ehsan MalaysiaTel No : (03) 7841 8000 Fax No : (03) 7841 8151 / 7841 8152

AUDITORSKPMGChartered Accountants

SOLICITORSChristopher & Lee Ong

PRINCIPAL BANKERSAffi n Bank BerhadAffi n Islamic Bank BerhadBank Pembangunan Malaysia BerhadMalayan Banking BerhadMaybank Islamic Berhad

STOCK EXCHANGE LISTINGMain Market of Bursa Malaysia Securities Berhad

WEBSITE ADDRESSwww.silk.my


PROFILE OF BOARD OF DIRECTORS

Dato’ Mohd Azlan HashimMalaysian, aged 57Executive Chairman (Non-Independent) Member, Nomination and Remuneration Committee

Tan Sri Datuk Seri Razman M HashimMalaysian, aged 75 Non-Executive Deputy Chairman (Independent) Chairman, Nomination and Remuneration Committee

Dato’ Harun bin Md IdrisMalaysian, aged 63Independent Non-Executive DirectorMember, Audit Committee Member, Nomination and Remuneration Committee

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

A Chartered Accountant by profession, he graduated with a Bachelor of Economics from Monash University, Australia. He is a Fellow Member of the Institute of Chartered Accountants, Australia, member of Malaysian Institute of Accountants, Fellow Member of Malaysian Institute of Directors, Fellow Member of the Institute of Chartered Secretaries and Administrators and Honorary Member of The Institute of Internal Auditors, Malaysia. He has extensive experience in the corporate sector including fi nancial services and investments. Among others, he has served as Chief Executive of Bumiputra Merchant Bankers Berhad, Group Managing Director of Amanah Capital Malaysia Berhad and Executive Chairman of Bursa Malaysia Berhad Group.

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

He has attended all of the 6 Board Meetings held in the fi nancial year.

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

A Member of Australian Institute of Bankers with more than 34 years of experience in the banking industry. Joined Standard Chartered Bank Malaysia Berhad in 1964 and served in various capacities including secondments to the Bank’s branches in London, Europe, Hong Kong and Singapore. In 1994, was appointed as Executive Director / Deputy Chief Executive of Standard Chartered Bank Malaysia Berhad until his retirement in June 1999. In the same month in 1999, was appointed as Chairman of MBf Finance Berhad by Bank Negara Malaysia as its nominee until January 2002 when the fi nance company was sold to Arab-Malaysian Group.

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

He has attended 5 out of the 6 Board Meetings held in the fi nancial year.

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

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

In his long and distinguished career with the RMP, Dato’ Harun had served in various capacities including as the head of Special Branch of Perak, Kedah and Sarawak.

He has no directorship in other public companies.



Johan Zainuddin bin Dzulkifl iMalaysian, aged 52Non-Executive Director (Non-Independent)Chairman, Risk Management CommitteeMember, Infrastructure Committee

Tai Keat ChaiMalaysian, aged 60Independent Non-Executive DirectorChairman, Audit Committee

Abdul Hamid binSh. MohamedMalaysian, aged 49Independent Non-Executive DirectorMember, Audit Committee

Johan Zainuddin bin Dzulkifl i was appointed to the Board of SHB as Non-Executive Director on 4 June 2008.

He is a Fellow of the Association of Chartered Certifi ed Accountants and attained a Post Graduate Diploma in Islamic Banking and Finance from the International Islamic University, Malaysia. He began his career as a Financial Accountant with a multinational company in 1986 after his graduation. In 1989, he joined a merchant bank as an Assistant Manager in the Corporate Advisory department. He subsequently left and joined a public listed company as Vice President of Corporate and Business Development in 1992 and, in 1997 he joined another public listed company as the Head of Corporate Services until 2002. He is well versed in areas of corporate advisory and business development.



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

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

He began his career with KPMG in London in 1977 and a year later joined Price Waterhouse (now known as PwC) in Kuala Lumpur. In 1981, he joined Amanah Merchant Bank Berhad (now known as Alliance Investment Bank Berhad) where he worked for 7 years. In 1990, he ventured into the stockbroking industry and has worked in SJ Securities Sdn Bhd, JB Securities Sdn Bhd (now known as A.A.Anthony Securities Sdn Bhd) and BBMB Securities Sdn Bhd (now known as Kenanga Investment Bank Berhad) as General Manager, Director and dealer’s representative respectively. Currently he is a Director of Fiscal Corporate Services Sdn Bhd.

Current directorships in other public listed companies include Chuan Huat Resources Berhad, Cuscapi Berhad, Formis Resources Berhad and Microlink Solutions Berhad.


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

He is a Fellow of the Association of Chartered Certifi ed Accountants. A graduate of the Emile Woolf School of Accountancy, London he began his career as Offi cer in the Corporate Banking department in Bumiputra Merchant Bankers Berhad in1989 and rose to the position of Manager. In 1994, he joined Amanah Capital Malaysia Berhad (formerly known as Komplek Kewangan Malaysia Berhad) as Senior Manager Corporate Planning, heading the newly created Corporate Planning department under the Corporate Services division and promoted to Assistant General Manager, Corporate Planning in 1997 and to Head of Corporate Services division in January 1998.

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

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




Nik Abdul Malik bin Nik Mohd AminMalaysian, aged 56Independent Non-Executive DirectorChairman, Infrastructure CommitteeMember, Audit Committee Member, Risk Management Committee

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

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

He started his career as Project Engineer with FAO/United Nations Development Programme in 1981 in a pilot project collaboration with the Drainage and Irrigation Department of Terengganu Darul Iman (“DID Terengganu”). He subsequently joined DID Terengganu in 1983 as District Engineer, and was subsequently promoted to Planning and Design Engineer in 1984. Between 1986 and 1989, he served as Project Engineer and Executive Director in two private construction companies, before assuming his current position as Managing Director of ND Group of companies, an established property developer and Class A contractor.



NOTES:

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

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

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



ON BEHALF OF THE BOARD OF DIRECTORS, I AM PLEASED

TO PRESENT THE ANNUAL REPORT AND AUDITED

FINANCIAL STATEMENTS OF SILK HOLDINGS BERHAD FOR

THE YEAR ENDED 31 JULY 2014.

“

“

FINANCIAL PERFORMANCE SILK Holdings Berhad (“SHB” or “the Group”) posted a revenue of RM 276.9 million for the fi nancial year ended 31 July 2014, a dip from the RM 306.5 million recorded previously (refer to Chart 1). Given the signifi cance of the Oil & Gas Support Services Division to the Group’s overall performance, the reduced fl eet utilization rate during the earlier part of the fi nancial year, due to scheduled vessel docking, repairs and pending redeployment in-between contracts, had an impact on the Group’s revenue performance.

Notwithstanding this, SHB improved its earnings before interest, taxation, depreciation and amortisation (“EBITDA”) for the fi nancial year ended 31 July 2014 to RM 190.7 million, exceeding the EBITDA of RM 174.1 million recorded in the previous corresponding period (refer to Chart 2).

The improvement in EBITDA was however impacted by higher depreciation, amortisation and fi nance costs recorded during the year, arising from delivery of three (3) new vessels, JM Cemerlang,JM Gemilang and JM Abadi.

This resulted in the Group recording a marginally lower pre-tax profi t of RM 42 million for the fi nancial year, compared with the pre-tax profi t of RM 42.9 million recorded in the previous fi nancial year (refer to Chart 3).

Following SHB’s entering into a conditional Share Sale Agreement (“SSA”) with Road Builder (M) Holdings Bhd (“RBH”) for the disposal of its 100% equity interest in Sistem Lingkaran-Lebuhraya Kajang Sdn. Bhd. (“SILK Highway”) for a cash consideration of RM 395 million (“Proposed Disposal”) on 20 June 2014, the results and performance of its Highway Infrastructure Division, for which SILK Highway is the main operating company, are presented separately as loss from discontinued operations, (“LDO”) net of tax. For the fi nancial year ended 31 July 2014, the LDO stands at RM 36.5 million, compared to RM 36.1 million for the previous corresponding year. The LDO is signifi cant due to a recalculation of the fi nance charges attributable to SILK Highway to comply with MFRS 139.

Despite the encouraging Group pre-tax profi t performance, the charges attributable to the discontinued operations resulted in an overall Group net loss attributable to owners of the parent amounting to RM 10.4 million for the fi nancial year ended 31 July 2014 compared to RM 15.2 million for the previous fi nancial year. Notwithstanding the current impact of the discontinued operations to the bottom-line, the Board remains optimistic as this will cease to have a negative accounting impact once the proposed disposal is completed.

OPERATING CONDITIONS

Oil & Gas Support Services Division

Jasa Merin (M) Sdn Bhd (“Jasa Merin”), the main operating company under the Oil & Gas Support Services Division, continues to be a competitive oil & gas services provider during the fi nancial year under review. Its status as a preferred service provider remained strong during that period, whereby the Division announced a total of 7 new contracts for vessels and 2 extensions to previous mandates.

Chart 1- Group Revenue (RM Mil)

223.9 247.7

341.1 306.5 276.9

FY 10 FY 11 FY 12 FY 13 FY 14

Chart 2- Group EBITDA (RM Mil)

FY 10 FY 11 FY 12 FY 13 FY 14

131.7 129.4

193.5174.1

190.7

Chart 3- Group PBT (RM Mil)

(5.7)

34.5

17.3

42.9

FY 10 FY 11 FY 12 FY 13

42.0

FY 14

CHAIRMAN’S STATEMENT


The Division deployed a total of 23 vessels (inclusive of third party vessels and owned-vessels subsequently disposed during the fi nancial year) to various clients during the fi nancial year under review (refer to Chart 4), similar to the 23 vessels deployed during the previous fi nancial year. Fleet utilisation was slightly lower for the fi nancial year ended 31 July 2014 compared to the previous fi nancial year, but has fi rmed up towards the end of the fi nancial year despite the continuing competitive market space. Expectations are that competition will remain tight going forward, particularly for the 60-metric tonne anchor-handling tug/supply vessels (“AHTS”) sub-segment. However, the Board is confi dent that barring unforeseen circumstances, the contributions from the Oil & Gas Support Services Division will remain positive.

CORPORATE DEVELOPMENTSDuring the course of the fi nancial year under review, SHB had carried out various strategic initiatives aimed at strengthening the foundation of the company and maintaining focus on what the Board deems as future growth areas, as follows:1. Acquisition of 49% equity interest in four ship-owning companies from GMV-Jasa Sdn Bhd

On 15 November 2013, the Group announced that Jasa Merin, a 70%-owned subsidiary of AQL Aman Sdn Bhd (“AQL”), which in turn is a wholly-owned subsidiary of SHB, had on the same date served a notice to GMV-Jasa Sdn Bhd (“GMV-Jasa”) to exercise Jasa Merin’s rights under the Joint-Venture Agreement (“JVA”) with GMV-Jasa, to acquire the remaining 49% equity interest held by GMV-Jasa in four (4) ship-owning companies (“SOCs”).The acquisition was undertaken based on the premise that it would allow Jasa Merin to have full control of the SOCs and therefore enable it to better manage and control the operations and commercial decisions in respect of the vessels owned by the SOCs.

Additionally, the vessels owned by the SOCs (which comprise four 120 metric tonne AHTS) offered better prospects and potentially higher profi t margin as compared to the 60 metric tonne AHTS segment given the greater demand for larger capacity vessels within the industry at the time.

The acquisition was approved by shareholders of SHB at its Extraordinary General Meeting (“EGM”) held on 13 December 2013. The acquisition was duly completed on 26 December 2013, with Jasa Merin paying a purchase consideration of approximately RM 49.5 million to GMV-Jasa to complete the transaction.

Own 3rd Party

Chart 4- Vessel Deployment

FY 10 FY 11 FY 12 FY 13

1012

1618

5

FY 14

21

2

22

6


“ JM Abadi - the latest addition to the Group’s fl eet was delivered to Jasa Merin on 21 July 2014.”


PROSPECTS

Oil & Gas Support Services Division

Given the acquisition of the SOCs and the Proposed Disposal, the Oil & Gas Support Services Division is set to remain the Group’s main revenue contributor as it continues to strengthen its position in the market. With an excellent safety and delivery track record and its relatively young and modern fl eet, coupled with various operational initiatives being carried out, the Division via Jasa Merin, is likely to retain its position as a preferred partner for many exploration and production specialists operating in Malaysian waters. As such, barring any unforeseen circumstances, the Division is expected to continue to contribute positively to the Group in the current fi nancial year.

DIVIDENDS

In order to continue building the foundations for the Group to enable it to achieve long-term and sustainable growth, the Board of Directors are not able to recommend the declaration of any dividend for the fi nancial year ended 31 July 2014. With sustained growth and expected improved operating and fi nancial performance in the future, the Board will revisit and review this position for the benefi t of its shareholders.

ACKNOWLEDGEMENT

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

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

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

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

Thank you.

DATO’ MOHD AZLAN HASHIMExecutive Chairman

2. Private Placement of 30,000,000 new ordinary shares of RM0.25 in SHB

On 9 May 2014, SHB announced it was undertaking a Private Placement exercise of up to 30,000,000 new ordinary shares of RM0.25 (“Placement Shares”) each in SHB, representing approximately 6.2% of the issued and paid-up share capital of SHB. The Placement Shares were to be issued under the existing general mandate obtained pursuant to Section 132D of the Companies Act, 1965 approved by SHB’s shareholders at its 16th Annual General Meeting (“AGM”) convened on 13 December 2013.

The Private Placement was duly completed on 30 May 2014. A total of 30,000,000 Placement Shares were placed out at an issue price of RM 0.725 per Placement Share, raising a total amount of RM 21.75 million. The proceeds from the Private Placement have been earmarked to fund investment opportunities being explored by SHB.

3. Proposed Disposal of 100% equity interest in Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd

On 20 June 2014, SHB entered into a conditional SSA with RBH for the disposal of its 100% equity interest in SILK Highway for a cash consideration of RM 395 million. The rationale behind the Proposed Disposal is to enable the Group to unlock its investment in SILK Highway.

Given that the Group’s growth for the last few years has largely been due to its Oil & Gas Support Services Division, the Proposed Disposal is also expected to open up additional opportunities for the Group and its shareholders. It will certainly enable greater focus on enhancing thevalue of its Oil & Gas Support Services Division. With the oil & gas sector set to benefi t further from favourable structural trends, the creation of a business focused on this sector therefore is a strategic move intended to benefi t SHB’s shareholders.

The Proposed Disposal is conditional upon several conditions (“Conditions Precedent”), including the approvals of the Unit Kerjasama Awam Swasta (“UKAS”) in the Prime Minister’s Department of the Government of Malaysia (“GoM”), holders of SILK Highway’s Sukuk Mudharabah and the shareholders of the Company. It is also subject to SHB having procured the release of its obligation under the corporate guarantee dated 18 December 2008 issued to Affi n Investment Bank Berhad pursuant to the Sukuk Mudharabah, and RBH, being satisfi ed with the results of Due Diligence Inquiry (“DDI”) on SILK Highway and its subsidiary.

As at to date, the approvals mentioned above are still pending.



2010 2011 2012 2013 2014 RM’000 RM’000 RM’000 RM’000 RM’000 Restated Restated

RESULTSREVENUE 223,939 247,726 341,063 306,538 276,884

Profi t/(loss) before taxation 34,499 (5,725) 17,343 42,927 41,959Taxation (12,861) (6,176) (7,953) (7,682) (747)Profi t/(loss) after taxation 21,638 (11,901) 9,390 35,245 41,212 Loss from discontinued operation, net of tax - - - (36,140) (36,488)Profi t/(loss) for the year 21,638 (11,901) 9,390 (895) 4,724 Less non-controlling interests (11,604) 665 (10,069) (14,344) (15,138)

PROFIT/(LOSS) ATTRIBUTABLE 10,034 (11,236) (679) (15,239) (10,414)TO SHAREHOLDERS

BASIC EARNINGS / (LOSS) PERSHARE (SEN)

- from continuing operations 3.1 (2.9) (0.2) 5.2 5.6- from discontinued operations - - - (9.1) (7.9)- net 3.1 (2.9) (0.2) (3.9) (2.3)

FINANCIAL POSITION Property, vessels and equipment 684,765 871,329 898,553 1,146,114 1,173,064 Concession intangible assets 912,242 901,648 890,458 876,382 - Goodwill 647 647 13,883 13,883 647 Deferred tax benefi ts - - 122,768 133,710 29 Available for sale fi nancial assets 600 600 - - - Current assets 118,916 123,035 158,167 156,140 133,648 Non-current assets classifi ed as held for sale - 1,071 630 189 1,107,533

TOTAL ASSETS 1,717,170 1,898,330 2,084,459 2,326,418 2,414,921 Liabilities classifi ed as held for sale - - - - 1,082,525 Current liabilities 296,225 186,427 172,605 245,937 214,477Long-term liabilities 1,237,791 1,520,182 1,663,316 1,827,446 874,686TOTAL LIABILITIES 1,534,016 1,706,609 1,835,921 2,073,383 2,171,688

TOTAL NET ASSETS/SHAREHOLDERS’ FUNDS 183,154 191,721 248,538 253,035 243,233

SHARE CAPITAL 96,959 99,262 99,262 108,333 129,020

NET ASSETS PER SHARE ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY(SEN) 35.4 32.3 43.5 37.7 35.8

FIVE-YEAR GROUP FINANCIAL SUMMARY


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

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

PRINCIPLE 1: ESTABLISH CLEAR ROLES AND RESPONSIBILITIES

Functions of the Board and Management

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

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

Roles and responsibilities of the Board

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

a) Setting the objectives, goals and strategic plans with a view to maximising shareholder value;b) Adopting and monitoring progress of strategies, budgets, plans and policies;c) Overseeing the conduct of businesses to evaluate whether the businesses are properly managed;d) Identifying principal risks and ensuring the implementation of appropriate systems to mitigate and manage these risks.;e) Considering Management’s recommendations on key issues including acquisitions, divestments, restructuring, funding and signifi cant capital expenditure;f) Human resources planning and development; andg) Reviewing the adequacy and integrity of internal control systems and management information systems, including

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

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

Audit Committee

The Audit Committee comprises Tai Keat Chai as Chairman, Dato’ Harun bin Md Idris, Abdul Hamid bin Sh. Mohamed and Nik Abdul Malik bin Nik Mohd Amin. The Audit Committee is set up to play an active role in assisting the Board in discharging its governance responsibilities. The composition of the Audit Committee, its terms of reference, attendance of meetings and a summary of its activities are set out on pages 16 to 19 of the Annual Report.

Risk Management Committee

The Risk Management Committee comprises Johan Zainuddin bin Dzulkifl i as Chairman, Nik Abdul Malik bin Nik Mohd Amin and Jamaludin Mohd Nor. The Risk Management Committee is tasked with the responsibility to oversee the investment activities of the Group, approving appropriate investment appraisal as well as identifi cation of strategic investment opportunities for the Company and its businesses.

Nomination & Remuneration Committee

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

CORPORATE GOVERNANCE STATEMENT



Access to information and advice

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

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

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

Qualifi ed and competent Company Secretary

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

Board charter

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

PRINCIPLE 2: STRENGTHEN COMPOSITION

Nomination & Remuneration Committee

The Nomination & Remuneration Committee currently comprises the following:

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

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

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

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

Criteria for recruitment and annual assessment of Directors

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

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

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


Formal and transparent remuneration policies and procedures

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

The breakdown of the remuneration for the Directors of the Company during the fi nancial year is as follows:-

Executive Director Non-Executive Directors Total RM’000 RM’000 RM’000

Salaries 204 - 204Fees - 156 156Other emoluments 105 90 195Total remunerations 309 246 555

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

Executive Director Non-Executive Directors Total RM’000 RM’000 RM’000Range of remunerations:Up to RM50,000 - 2 2RM50,001 to RM100,000 - 3 3RM300,001 to RM350,000 1 - 1

PRINCIPLE 3: REINFORCE INDEPENDENCE

Composition of the Board

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

Of the seven (7) Directors, one (1) is non-independent and performs an executive function, namely Dato’ Mohd Azlan Hashim. One (1) director, namely Johan Zainuddin bin Dzulkifl i is also non-independent but performs no executive function at Company level. The remaining members of the Board of Directors are independent non-executive Directors. The profi le for each of the members of the Board is contained on pages 3 to 5 of this Annual Report.

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

Separation of Positions of Chairman and CEO/Managing Director

The Board is headed by Dato’ Mohd Azlan Hashim, acting as the Executive Chairman of the Company. Given Dato’ Mohd Azlan’s strong leadership, business acumen and wide experience, the Board continues to maintain this arrangement which it feels is in the best interest of the Company. The Company has opted to address the issue of adequate check and balances by having a majority independent Board. 5 out of 7 Board members are Independent Directors with diverse professional and business backgrounds. Decisions by the Board are only made after the issues had been deliberated at length by the Board, wherein the views of each Board member are sought.

Annual Assessment of Independent Directors

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



Tenure of an Independent Director

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

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

Board Meetings

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

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

Name of Directors: Number of Meetings Attended Percentage of Attendance (%)

Dato’ Mohd Azlan Hashim 6/6 100Tan Sri Datuk Seri Razman M Hashim 5/6 83Dato’ Harun bin Md Idris 6/6 100Johan Zainuddin bin Dzulkifl i 6/6 100Tai Keat Chai 6/6 100Abdul Hamid bin Sh. Mohamed 4/6 66Nik Abdul Malik bin Nik Mohd Amin 6/6 100

PRINCIPLE 4: FOSTER COMMITMENT

Time commitment and acceptance of new directorships

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

Access to appropriate continuing education programmes

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

Topic / Organiser Date

Related Party Transaction – From Governance Challenges to 9 September 2013Impactful Results

Corporate Accountability – The Blessings Within 12 September 2013

Redefi ning Markets : Sustaining Growth and Resilience 22 to 23 October 2013

Shell Maritime Contractor Safety Conference 13 to14 November 2013

Ethics and the Board of Directors 18 November 2013

Personal Data Protection Act, 2010 7 January 2014

GEM 2014 Directors’ Training 16 January 2014Oil and Gas Industry Overview, QHSE andPersonal Data Protection Act Compliance

Marine Contractors Senior Management Engagement Session 4 to 5 May 2014



PRINCIPLE 5: UPHOLD INTEGRITY IN FINANCIAL REPORTING

Compliance with applicable fi nancial reporting standards

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

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

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

The Board maintains, via the Audit Committee, an active, transparent and professional relationship with its Auditors. The role of the Audit Committee in relation to the Independent Auditors is disclosed in the Audit Committee Report set out on pages 16 to 19 of the Annual Report.

PRINCIPLE 6: RECOGNISE AND MANAGE RISKS

Framework to manage risks

The Board acknowledges its overall responsibility for ensuring that a sound system of internal control is maintained throughout the Group and the need to review its effectiveness regularly. The Board recognizes that risks cannot be totally eliminated and the system of internal controls instituted can only help to minimize and manage risks and provide some assurance that the assets of the Company and of the Group are safeguarded against material loss and unauthorized use and that the fi nancial statements are not materially misstated. The Statement on Risk Management and Internal Control set out on pages 20 to 22 of this Annual Report provides an overview on the state of internal controls within the Group.

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

The Group’s Internal Audit function has been outsourced to an external consultant, Columbus Advisory Sdn. Bhd., who reports directly to the Audit Committee. The Internal Audit function currently reviews and appraises the risk management and internal control processes of the Group. The Statement on Risk Management and Internal Control set out on page 20 to 22 of this Annual Report provides an overview of the Group’s approach to ensuring the effectiveness of the risk management and internal control processes within the Group.

PRINCIPLE 7: ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

Existence of appropriate corporate disclosure policies and procedures

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

Leverage on information technology for effective dissemination of information

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



PRINCIPLE 8: STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS

Promote effective communication and proactive engagements with shareholders

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

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

Encouraging shareholder participation at general meetings

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

Encouraging poll voting

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

COMPLIANCE STATEMENT

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

This statement is made in accordance with a resolution of the Board of Directors dated 30 September 2014.




FORMATION

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

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

COMPOSITION

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

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

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

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

4. Nik Abdul Malik bin Nik Mohd Amin (appointed on 1 October 2014) (Independent Non-Executive Director)

MEETING AND ATTENDANCE

The Audit Committee held 5 meetings during the fi nancial year and the attendance of the Committee Members was as follows :

Name of Committee Member Number of Meetings Attended

Tai Keat Chai 5/5Dato’ Harun bin Md Idris 4/5Abdul Hamid bin Sh. Mohamed 5/5

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

TERMS OF REFERENCE

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

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

1.3 The Committee shall include at least 1 person: (a) who is a member of the Malaysian Institute of Accountants; or (b) who must have at least 3 years working experience and:- (i) have passed the examinations specifi ed in Part I of the 1st Schedule of the Accountants Act, 1967; or (ii) is a member of one of the Associations specifi ed in Part II of the 1st Schedule of the Accountants Act,

1967; or (c) who must have at least 3 years post qualifi cation experience in accounting or fi nance and:- (i) has a degree/masters/doctorate in accounting or fi nance; or

(ii) is a member of one of the professional accountancy organisations which has been admitted as a full member of the International Federation of Accountants; or

(d) who must have at least 7 years experience being a chief fi nancial offi cer of a corporation or having the function of being primarily responsible for the management of the fi nancial affairs of a corporation.

1.4 No Alternate Director shall be appointed as a member of the Committee. 1.5 The members of the Committee shall elect a Chairman from amongst their number. 1.6 If a member of the Committee resigns, dies or for any reason ceases to be a member with the result that the

number of members is reduced below 3, the Board shall, within 3 months appoint such number of new members as may be required to make up the minimum of 3 members.

AUDIT COMMITTEE REPORT



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

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

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

2. Meetings

2.1 The quorum for a Committee Meeting shall be at least 2 members, the majority of whom must be Independent Directors.

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

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

2.4 Members’ Circular Resolution

A Resolution in writing signed by all members shall be effectual as if it had been passed at a meeting of the Committee.

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

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

2.5 Participation at Committee Meeting by way of electronic means

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

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

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

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

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

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

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

3. Rights and Authority

The Committee is authorized to:-

3.1 Investigate any matter within its terms of reference.

3.2 Have adequate resources required to perform its duties.

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

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

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


4. Functions and Duties

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

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

(a) With the Independent Auditors:-

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

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

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

(iv) issues and reservations arising from audits.

(b) With the Internal Auditors:-

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

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

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

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

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

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

(ii) signifi cant and unusual issues;

(iii) going concern assumption; and

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

(d) The major fi ndings of investigations and management response.

(e) The propriety of any related party transaction and confl ict of interest situation that may arise within the Company or the Group including any transaction, procedure or course of conduct that raises questions of management integrity.

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

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

(a) the composition of the Committee including the name, designation and directorship of the members;

(b) the terms of reference of the Committee;

(c) the number of meetings held and details of attendance of each members; (d) a summary of the activities of the Committee in the discharge of its functions and duties; and

(e) a summary of the activities of the internal audit function. 4.5 To review the following for publication in the Company’s Annual Report:-

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

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

(ii) the extent of compliance with the best practices set out in Part II of the Malaysian Code on Corporate

Governance, specifying reasons for any area of non-compliance and the alternative measures adopted in such areas.

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



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

(d) other disclosure forming the contents of the annual report spelt out in Part A of Appendix 9C of the Main

Market Listing Requirements of Bursa Securities.

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

5. Internal Audit Functions

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

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

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

5.4 The total costs incurred for the internal audit function of the Group for the fi nancial year ended 31 July 2014 was RM50,000.

ACTIVITIES OF THE COMMITTEE FOR THE FINANCIAL YEAR ENDED 31 JULY 2014

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

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

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

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

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

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

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

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

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

INTERNAL AUDIT ACTIVITIES REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2014

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

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

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

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

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

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

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

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



STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

INTRODUCTION

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

THE BOARD’S RESPONSIBILITY

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

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

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

ASSURANCE MECHANISM

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

In addition, the AC also reviews and deliberates on any matters relating to internal control highlighted by the independent auditors in the course of their statutory audit of the fi nancial statements of the Group. There were no signifi cant internal control weaknesses identifi ed during the fi nancial year.

The Report of the AC is set out on pages 16 to 19 of the Annual Report.

THE GROUP’S SYSTEM OF INTERNAL CONTROL

Monitoring Mechanisms and Management Style

Scheduled periodic meetings of the Board, Board Committees and Management represent the main platform by which the Group’s performance and conduct is monitored.

The daily running of the business is entrusted to the respective Chief Operating Offi cers and their management teams. Under the purview of the Chief Operating Offi cers, the heads of department are empowered with the responsibility of managing their respective operations. The Chief Operating Offi cers communicate the Board’s expectations to management at management meetings as well as through attendance at various operations meetings. At these meetings, operational and fi nancial risks are discussed and dealt with.

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

Enterprise Risk Management Framework

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

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



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

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

Key Elements of the Group’s System of Internal Control

The current system of internal control in the Group has within it, the following key elements:

• Group vision, mission and corporate philosophy and strategic direction, which are communicated to employees.• A Board which retains control over the Group with appropriate management reporting mechanisms which enable the

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

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

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

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

THE BOARD’S COMMITMENT

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

ADEQUACY AND EFFECTIVENESS OF RISK MANAGEMENT AND INTERNAL CONTROL

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

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

REVIEW OF THE STATEMENT BY INDEPENDENT AUDITORS


The Independent Auditors have reviewed this Statement on Risk Management and Internal Control pursuant to the scope set out in Recommended Practice Guide 5 (Revised), Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report (“RPG 5”) issued by the Malaysian Institute of Accountants (“MIA”) for inclusion in the annual report of the Group for the fi nancial year ended 31 July 2014, and reported to the Board that nothing has come to their attention that cause them to believe that the Statement on Risk Management and Internal Control, in all material respects, has not been prepared in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control:Guidelines for Directors of Listed Issuers, or is factually inaccurate.

RPG 5 does not require the Independent Auditors to consider whether the Statement on Risk Management and Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal controls system including the assessment and opinion by the Board and Management thereon. The Independent Auditors are also not required to consider whether the processes described to deal with material internal control aspects of any signifi cant problems disclosed in the annual report will, in fact, remedy the problems.

This Statement is made in accordance with the resolution of the Board of Directors dated 30 September 2014.




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

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

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

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

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

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

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

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

• Co-organising several “gotong-royong” activities including those held at Tanah Perkuburan Islam Sg Ramal Luar, Country Heights Interchange, and Rumah Jagaan & Rawatan Orang Tua Al-Ikhlas, Kg Pulau Meranti, Puchong, Selangor, as both a means to assist the local community as well as to strengthen the bonds of cooperation with them.

• Contribution of reading materials donated by SILK Highway employees to the library of Sekolah Kebangsaan Leftenan Adnan to ensure students of that school have access to suffi cient reading and reference material.

• The provision of fi nancial assistance to several needy families, mosques and suraus near the areas where the Group operates,

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

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

STATEMENT OF CORPORATE SOCIAL RESPONSIBILITY

Financial Statements25 Directors’ Report

29 Statement by Directors

29 Statutory Declaration

30 Independent Auditors’ Report

31 Statements of Financial Position

34 Statements of Profi t or Loss and Other Comprehensive Income

35 Statements of Changes in Equity

37 Statements of Cash Flows

39 Notes to the Financial Statements

91 Supplementary Information on the Breakdown of Realised and Unrealised Profi ts


The Directors hereby submit their report and the audited fi nancial statements of the Group and of the Company for the fi nancial year ended 31 July 2014.

PRINCIPAL ACTIVITIES

The Company is principally engaged in investment holding, whilst the principal activities of the subsidiaries are as stated in Note 4 to the fi nancial statement. There has been no signifi cant change in the nature of these activities during the fi nancial year.

RESULTS GROUP COMPANY RM’000 RM’000(Loss)/profi t for the year attributable to: Owners of the Company (10,414) 1,909 Non-controlling interests 15,138 - 4,724 1,909

RESERVES AND PROVISIONS

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

DIVIDEND

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

DIRECTORS OF THE COMPANY

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

Dato’ Mohd Azlan HashimTan Sri Datuk Seri Razman M Hashim Dato’ Harun bin Md IdrisTai Keat ChaiJohan Zainuddin bin Dzulkifl i Abdul Hamid bin Sh MohamedNik Abdul Malik bin Nik Mohd Amin

DIRECTORS’ INTERESTS IN SHARES

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

Number of ordinary shares of RM0.25 each At At 1.8.2013 Converted Sold 31.7.2014

Direct interest: Johan Zainuddin bin Dzulkifl i 28,200,000 - - 28,200,000 Abdul Hamid bin Sh Mohamed 1,000,000 - - 1,000,000 Nik Abdul Malik bin Nik Mohd Amin - 2,400,000 - 2,400,000

DIRECTORS’ REPORT


DIRECTORS’ INTERESTS IN SHARES (continued)

Number of ordinary shares of RM0.25 each At At 1.8.2013 Converted Sold 31.7.2014Deemed interest: Dato’ Mohd Azlan Hashim 84,835,669 14,382,224 - 99,217,893 Johan Zainuddin bin Dzulkifl i 117,155,426 - - 117,155,426 Tai Keat Chai 1,750,000 - (750,000) 1,000,000

Number of CC-RPS of RM0.10 each At At 1.8.2013 Acquired Converted 31.7.2014

Direct interest: Dato’ Mohd Azlan Hashim - 3,595,556 (3,595,556) - Nik Abdul Malik bin Nik Mohd Amin 500,000 - (500,000) -

Number of RCULS of RM1.00 each At At 1.8.2013 Acquired Sold 31.7.2014

Direct interest Johan Zainuddin bin Dzulkifl i 7,050,000 - - 7,050,000 Deemed interest Johan Zainuddin bin Dzulkifl i 9,400,000 - - 9,400,000

By virtue of their interests in shares of the Company, Dato’ Mohd Azlan Hashim, Johan Zainuddin bin Dzulkifl i and Abdul Hamid bin Sh Mohamed are also deemed interested in the shares of all the Company’s subsidiaries during the fi nancial year end to the extent the SILK Holdings Berhad has an interest.

None of the other Directors holding offi ce at 31 July 2014 had any interest in the ordinary shares of the Company and of its related corporations during the fi nancial year.

DIRECTORS’ BENEFITS

Since the end of the previous fi nancial year, no Director of the Company has received nor become entitled to receive any benefi t (other than a benefi t included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the fi nancial statements or the fi xed salary of a full time employee of the Company or of related corporations) by reason of a contract made by the Company or a related corporation with the Director or with a fi rm of which the Director is a member, or with a company in which the Director has a substantial fi nancial interest.

There were no arrangements during and at the end of the fi nancial year which had the object of enabling Directors of the Company to acquire benefi ts by means of the acquisition of shares in or debentures of the Company or any other body corporate.

ISSUE OF SHARES AND DEBENTURES

During the fi nancial year, the Company increased its issued and paid-up ordinary share capital from RM108,333,119 to RM129,019,786 (2013: RM99,262,349 to RM108,333,119) by way of:

(a) the conversion of 10,988,889 Cumulative Convertible Redeemable Preference Shares and dividends payable to 52,746,668 ordinary shares of RM0.25 each; and

(b) the issue of 30,000,000 new ordinary shares of RM0.25 each at RM0.725 per share for cash to fi nance investment opportunities.

DIRECTORS’ REPORT


DIRECTORS’ REPORT

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Company during the fi nancial year except for the issuance of 5-year Redeemable Cumulative Unsecured Loan Stocks (“RCULS”) of RM43,750,000 in nominal value of RM1.00 on 14 October 2009 at a consideration of RM43,750,000. Each RCULS holder is entitled to exercise its conversion rights to convert RCULS into four new ordinary shares of RM0.25 each of the Company. The salient features of the RCULS are disclosed in Note 15 to the fi nancial statements.

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

Number of options over ordinary shares of RM0.25 each

Name Date of offer Exercise price At Granted At 1.8.2013 31.7.2014

Abdul Rahman Ali 14.10.2009 RM1.00 94,722,486 2,862,982 97,585,468 Johan Zainuddin bin Dzulkifl i 14.10.2009 RM1.00 31,574,149 954,325 32,528,474 Temuras Jaya Sdn. Bhd. 14.10.2009 RM1.00 10,524,707 318,107 10,842,814 Bijak Permai Sdn. Bhd. 14.10.2009 RM1.00 42,098,876 1,272,436 43,371,312

178,920,218 5,407,850 184,328,068

OTHER STATUTORY INFORMATION

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

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

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

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

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

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

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

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

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

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

ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the fi nancial year.

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

In the opinion of the Directors, except for those disclosed in Note 24 and Note 36 to the fi nancial statements, the fi nancial performance of the Group and of the Company for the fi nancial year ended 31 July 2014 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that fi nancial year and the date of this report.


DIRECTORS’ REPORT

AUDITORS

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

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

........................................................................... )Dato’ Mohd Azlan Hashim ) ) ) ) DIRECTORS ) )........................................................................... )Johan Zainuddin bin Dzulkifl i

Kuala Lumpur,Date: 30 September 2014


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

In the opinion of the Directors, the fi nancial statements set out on pages 32 to 90 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the fi nancial position of the Group and of the Company as at 31 July 2014 and of their fi nancial performance and cash fl ows for the fi nancial year then ended.

In the opinion of the Directors, the information set out in Note 37 on page 91 to the fi nancial statements has been compiled in accordance with Guidance on Special Matter No.1, Determination of Realised and Unrealised Profi ts or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

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

........................................................................… ) Dato’ Mohd Azlan Hashim ) ) ) ) ) ) )…………………………………………………. )Johan Zainuddin bin Dzulkifl i

Kuala Lumpur,

Date: 30 September 2014

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

I, Jamaludin Mohd Nor, the offi cer primarily responsible for the fi nancial management of SILK Holdings Berhad, do solemnly and sincerely declare that the fi nancial statements set out on pages 32 to 90 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by )the abovenamed in Kuala Lumpur )on 30 September 2014 ) ......................................................................................

Before me:

STATEMENT BY DIRECTORS/ STATUTORY DECLARATION


Report on the Financial Statements

We have audited the fi nancial statements of SILK Holdings Berhad, which comprise the statements of fi nancial position as at 31 July 2014 of the Group and of the Company, and the statements of profi t or loss and other comprehensive income, changes in equity and cash fl ows of the Group and of the Company for the year then ended, and a summary of signifi cant accounting policies and other explanatory information, as set out on pages 32 to 90.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of fi nancial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of fi nancial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement.

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

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

Opinion

In our opinion, the fi nancial statements give a true and fair view of the fi nancial position of the Group and of the Company as at 31 July 2014 and of their fi nancial performance and cash fl ows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

Comparative information

As described in Note 36 to the fi nancial statements, the comparative information presented as at and for the year ended 31 July 2013 has been restated as a result of prior year adjustments.

The fi nancial statements of the Group and of the Company as at and for the years ended 31 July 2013 and 31 July 2012 (from which the statements of fi nancial position as at 1 August 2012 has been derived), excluding the adjustments described in Note 36 to the fi nancial statements were audited by another chartered accountant who expressed an unmodifi ed opinion on those fi nancial statements on 27 September 2013.

As part of our audit of the fi nancial statements as at and for the year ended 31 July 2014, we audited the adjustments described in Note 36 that were applied to restate the comparative information of the Group presented as at and for the year ended 31 July 2013 and the statement of fi nancial position as at 1 August 2012. We were not engaged to audit, review, or apply any procedures to the fi nancial statements of the Group or of the Company for the years ended 31 July 2013 or 31 July 2012 (which are not presented herein) or to the statements of fi nancial position as at 1 August 2012, other than in respect of the adjustments described in Note 36 to the fi nancial statements of the Group. Accordingly, we do not express an opinion or any other form of assurance on those respective fi nancial statements taken as a whole. However, in our opinion, the adjustments described in Note 36 are appropriate and have been properly applied.

Report on Other Legal and Regulatory Requirements

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

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

b) We are satisfi ed that the accounts of the subsidiaries that have been consolidated with the Company’s fi nancial statements are in form and content appropriate and proper for the purposes of the preparation of the fi nancial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

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

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OFSILK HOLDINGS BERHAD


INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OFSILK HOLDINGS BERHAD

Other Reporting Responsibilities

Our audit was made for the purpose of forming an opinion on the fi nancial statements taken as a whole. The information set out in Note 37 on page 91 to the fi nancial statements has been compiled by the Company as required by the Bursa Malaysia Securities Berhad Listing Requirements and is not required by the Malaysian Financial Reporting Standards or International Financial Reporting Standards. We have extended our audit procedures to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all material respects, in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profi ts or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

Other Matters

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

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

Petaling Jaya

Date: 30 September 2014


STATEMENTS OF FINANCIAL POSITIONAS AT 31 JULY 2014 GROUP COMPANY 31.7.2014 31.7.2013 1.8.2012 31.7.2014 31.7.2013 Note RM’000 RM’000 RM’000 RM’000 RM’000 restated restated

AssetsProperty, vessels and equipment 3 1,173,064 1,146,114 898,553 - -Investments in subsidiaries 4 - - - 89,658 249,658Concession intangible assets 5 - 910,891 890,458 - -Goodwill on consolidation 6 647 13,883 13,883 - -Deferred tax assets 7 29 133,710 122,768 - -Total non-current assets 1,173,740 2,204,598 1,925,662 89,658 249,658 Inventories 8 1,319 735 939 - -Trade and other receivables 9 70,690 63,048 85,009 7,381 6,850Tax recoverable 974 551 804 - -Cash and cash equivalents 10 60,665 91,806 71,415 22,375 2,073 133,648 156,140 158,167 29,756 8,923Assets classifi ed as held for sale 11 1,107,533 189 630 160,000 -Total current assets 1,241,181 156,329 158,797 189,756 8,923Total assets 2,414,921 2,360,927 2,084,459 279,414 258,581 Equity Share capital 12 129,020 108,333 99,262 129,020 108,333Share premium 13 69,679 54,045 53,670 69,679 54,045Equity component of convertible preference shares 14 - 1,384 1,901 - 1,384Equity component of convertible loan stocks 15 34,034 34,034 37,271 34,034 34,034Reverse acquisition defi cit 13 (92,791) (92,791) (92,791) - -Capital reserve 13 - - - 36,297 36,297Retained earnings 51,461 64,919 80,158 2,507 598 191,403 169,924 179,471 271,537 234,691Employee trust shares 16 (6,688) (6,688) (6,688) (6,688) (6,688)Equity attributable to owners of the Company 184,715 163,236 172,783 264,849 228,003Non-controlling interests 4 58,518 89,799 75,755 - -Total equity 243,233 253,035 248,538 264,849 228,003

Liabilities Deferred tax liabilities 7 58,031 59,173 52,660 891 1,041Liability component of convertible preference shares 14 - - 14,132 - -Liability component of convertible loan stocks 15 - 5,867 5,971 - 5,867Loans and borrowings 17 816,655 1,503,725 1,375,115 - -Ijarah rental payable 20 - 257,789 209,307 - -Provisions 21 - 35,401 1,494 - -Retirement benefi ts obligation 28 - - 4,637 - -Total non-current liabilities 874,686 1,861,955 1,663,316 891 6,908


STATEMENTS OF FINANCIAL POSITIONAS AT 31 JULY 2014 (continued)

GROUP COMPANY 31.7.2014 31.7.2013 1.8.2012 31.7.2014 31.7.2013 Note RM’000 RM’000 RM’000 RM’000 RM’000 restated restated

Liability component of convertible preference shares 14 - 10,837 - - 10,837Liability component of convertible loan stocks 15 6,317 - - 6,317 -Loans and borrowings 17 162,399 146,132 92,466 - -Trade and other payables 19 45,531 69,253 64,488 7,207 12,378Ijarah rental payable 20 - 16,895 13,354 - -Provisions 21 - 2,181 1,042 - -Taxation 230 639 1,255 150 455 214,477 245,937 172,605 13,674 23,670Liabilities classifi ed as held for sale 11 1,082,525 - - - -Total current liabilities 1,297,002 245,937 172,605 13,674 23,670Total liabilities 2,171,688 2,107,892 1,835,921 14,565 30,578Total equity and liabilities 2,414,921 2,360,927 2,084,459 279,414 258,581

The notes on pages 39 to 90 are an integral part of these fi nancial statements.


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 JULY 2014 GROUP COMPANY 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000Continuing operations restated

Revenue 22 276,884 306,538 4,854 3,253Direct costs (169,733) (195,039) - -Gross profi t 107,151 111,499 4,854 3,253Other income 11,043 105 399 2Administrative expenses (19,675) (17,412) (1,207) (804) Results from operating activities 98,519 94,192 4,046 2,451Finance income 947 688 137 59Finance costs 23 (57,507) (51,953) (660) (1,355)Net fi nance costs (56,560) (51,265) (523) (1,296)Profi t before tax 24 41,959 42,927 3,523 1,155Income tax expense 25 (747) (7,682) (1,614) (449)Profi t for the year 41,212 35,245 1,909 706 Discontinued operation Loss from discontinued operation, net of tax 26 (36,488) (36,140) - -Profi t/(loss) net of tax, representing total comprehensive income / (expense) for the year 4,724 (895) 1,909 706 (Loss)/profi t and total comprehensive income attributable to: Owners of the Company (10,414) (15,239) 1,909 706Non-controlling interests 15,138 14,344 - -Profi t/(loss) and total comprehensive income for the year 4,724 (895) 1,909 706 Basic earnings/(loss) per ordinary share (sen) 27 from continuing operations 5.64 5.24 from discontinued operation (7.89) (9.06) (2.25) (3.82) Diluted earnings/(loss) per ordinary share (sen) 27 from continuing operations 4.06 3.33 from discontinued operation (5.57) (5.48) (1.51) (2.15)



STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 JULY 2014

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STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 JULY 2014 (continued)

Attributable to equity holders of the Company <-Non-distributable-> Distributable Equity component Equity (Accumulated Employee of component losses)/ Share Share trust preference of loan Capital Retained TotalCompany Note capital premium shares shares stocks reserve earnings equity RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 August 2012 99,262 53,670 (6,688) 1,901 37,271 36,297 (108) 221,605Total comprehensive income for the year - - - - - - 706 706Contributions by and distributions to owners of the Company: Conversion of convertible preference shares 14 4,871 380 - (517) - - - 4,734 Conversion of convertible loan stocks 15 4,200 (5) - - (3,237) - - 958Total transactions with owners of the Company 9,071 375 - (517) (3,237) - - 5,692At 31 July 2013/ 1 August 2013 108,333 54,045 (6,688) 1,384 34,034 36,297 598 228,003Total comprehensive income for the year - - - - - - 1,909 1,909Contributions by and distributions to owners of the Company: Conversion of convertible preference shares 14 13,187 1,384 - (1,384) - - - 13,187 Issue of shares 12 7,500 14,250 - - - - - 21,750Total transactions with owners of the Company 20,687 15,634 - (1,384) - - - 34,937At 31 July 2014 129,020 69,679 (6,688) - 34,034 36,297 2,507 264,849 Note 12 Note 16 Note 14 Note 15



STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 JULY 2014 GROUP COMPANY 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000 restatedCash fl ows from operating activities Collection of revenue 360,828 409,041 1,920 1,082 Collection of other income 5,958 3,235 119 38 Cash generated from operations 366,786 412,276 2,039 1,120 Payment of expenses (124,094) (156,376) (1,418) (797) Taxes paid (2,748) (1,492) (2,069) (292)Net cash generated from/ (used in) operating activities 239,944 254,408 (1,448) 31 Cash fl ows from investing activities Proceeds from sale of property, vessels and equipment 44,807 76 - - Proceeds from sale of non-current assets classifi ed as held for sale 222 197 - - Purchase of property, vessels and equipment (149,647) (326,340) - - Payment of expressway heavy repairs (1,986) (931) - - Increase in pledged deposits (2,264) (2,752) - -Net cash used in investing activities (108,868) (329,750) - - Cash fl ows from fi nancing activities Issue of ordinary shares 21,750 - 21,750 - Drawdown of borrowings 158,196 262,665 - - Repayment of borrowings (137,713) (80,389) - - Payment of fi nance costs (103,407) (88,995) - - Acquisition of minority interest (49,463) - - - Dividends paid by a subsidiary to a non-controlling shareholder - (300) - -Net cash (used in)/from fi nancing activities (110,637) 92,981 21,750 -

Net increase in cash and cash equivalents 20,439 17,639 20,302 31Cash and cash equivalents at beginning of year 81,764 64,125 2,073 2,042Cash and cash equivalents at end of year (i) 102,203 81,764 22,375 2,073

(i) Cash and cash equivalents

Cash and cash equivalents included in the statements of cash fl ows comprise the following statements of fi nancial position amounts:

GROUP COMPANY 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 restated

Cash and bank balances 33,327 20,938 625 273Deposits placed with licensed banks 81,182 70,868 21,750 1,800 114,509 91,806 22,375 2,073Less: Pledged deposits (12,306) (10,042) - - 102,203 81,764 22,375 2,073 (ii)


STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 JULY 2014 (continued)

(ii) Reconciliation of cash and cash equivalents Continuing Discontinued operations operationGroup (Note 10) (Note 11) Total2014 RM’000 RM’000 RM’000 Cash and bank balances 17,032 16,295 33,327Deposits placed with licensed banks 43,633 37,549 81,182 60,665 53,844 114,509Less: Pledged deposits (10,597) (1,709) (12,306) 50,068 52,135 102,203



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

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

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

The consolidated fi nancial statements of the Company as at and for the fi nancial year ended 31 July 2014 comprise those of the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”). The fi nancial statements of the Company as at and for the year ended 31 July 2014 do not include other entities.

The Company is principally engaged in investment holding, whilst the principal activities of the subsidiaries are as stated in Note 4 to the fi nancial statement. There has been no signifi cant change in the nature of these activities during the fi nancial year.

These fi nancial statements were authorised for issue by the Board of Directors on 30 September 2014.

1. Basis of preparation

(a) Statement of compliance

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

The following are accounting standards, amendments and interpretations that have been issued by the Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and the Company.

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2014• Amendments to MFRS 10, Consolidated Financial Statements: Investment Entities• Amendments to MFRS 12, Disclosure of Interests in Other Entities: Investment Entities• Amendments to MFRS 127, Separate Financial Statements (2011): Investment Entities• Amendments to MFRS 132, Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities• Amendments to MFRS 136, Impairment of Assets – Recoverable Amount Disclosures for Non-Financial Assets

• Amendments to MFRS 139, Financial Instruments: Recognition and Measurement – Novation of Derivatives and Continuation of Hedge Accounting

• IC Interpretation 21, Levies

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 July 2014 • Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements

2011-2013 Cycle)• Amendments to MFRS 2, Share-based Payment (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 3, Business Combinations (Annual Improvements 2010-2012 Cycle and 2011-2013 Cycle)• Amendments to MFRS 8, Operating Segments (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 13, Fair Value Measurement (Annual Improvements 2010-2012 Cycle and 2011-2013 Cycle)• Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 119, Employee Benefi ts – Defi ned Benefi t Plans: Employee Contributions• Amendments to MFRS 124, Related Party Disclosures (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 138, Intangible Assets (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 140, Investment Property (Annual Improvements 2011-2013 Cycle)

NOTES TO THE FINANCIAL STATEMENTS


1. Basis of preparation (continued)

(a) Statement of compliance (continued)

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2016• MFRS 14, Regulatory Deferral Accounts• Amendments to MFRS 116 and MFRS 138, Clarifi cation of Acceptable Methods of Depreciation and Amortisation• Amendments to MFRS 11, Accounting for Acquisitions of Interests in Joint Operations• Amendments to MFRS 116 and MFRS 141, Agriculture: Bearer Plants

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2017• MFRS 15, Revenue from Contracts with Customers

MFRSs, Interpretations and amendments effective for a date yet to be confi rmed• MFRS 9, Financial Instruments (2009)• MFRS 9, Financial Instruments (2010)• MFRS 9, Financial Instruments – Hedge Accounting and Amendments to MFRS 9, MFRS 7 and MFRS 139

• Amendments to MFRS 7, Financial Instruments: Disclosures – Mandatory Effective Date of MFRS 9 and Transition Disclosures

The Group and the Company plan to apply the abovementioned accounting standards, amendments and interpretations:

• from the annual period beginning on 1 August 2014 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2014 and 1 July 2014, except for IC Interpretation 21, Amendments to MFRS 1, Amendments to MFRS 2, Amendments to MFRS 3, Amendments to MFRS 8, Amendments to MFRS 119 and Amendments to MFRS 140 which are not applicable to the Company.

• from the annual period beginning on 1 August 2016 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2016, except for MFRS 14, Amendments to MFRS 11 and Amendments to MFRS 116 and MFRS 141 which are not applicable to the Company.

• from the annual period beginning on 1 August 2017 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2017.

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

(b) Basis of measurement

The fi nancial statements have been prepared on the historical cost basis other than as disclosed in Note 2 and on the assumption that the Group is a going concern.

The Group has prepared its fi nancial statements by applying the going concern assumption, notwithstanding that as at 31 July 2014, the Group’s current liabilities exceeded its current assets as mentioned in Note 1(b)(ii) below. The validity of the going concern assumption is arrived at by the Directors after considering the following:-

i) the Group’s ability to generate suffi cient cash fl ows to meet its obligations as and when they fall; and

ii) the highly probable disposal of the toll highway concessionaire segment (refer to Note 11) which will give rise to an aggregate credit of approximately RM370 million to retained earnings of the Group and will change the Group’s net current liabilities of RM55.8 million as at 31 July 2014 to net current assets of approximately RM314 million.

At the date of this report, there is no reason for the Directors to believe there is any uncertainty related to events or conditions that may cast signifi cant doubt upon the Group’s ability to continue as a going concern.

(c) Functional and presentation currency

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




(d) Use of estimates and judgements

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

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

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

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

(ii) Forecast of future cash fl ows of tolled highway concessionaire

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

• Traffi c volume is expected to grow at an average rate of 6% from fi nancial year 2015 until end of the concession period (fi nancial year 2037); and

• Infl ation rate at 5.6%.

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

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

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

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

(v) Provision for heavy repairs

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

• Traffi c volume is expected to grow at an average rate of 6% from fi nancial year 2015 until end of the concession period (fi nancial year 2037); and

• Discount rate at 5.6%.




(d) Use of estimates and judgements (continued)

(vi) Deferred tax

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

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

(vii) Disposal group held for sale and discontinued operation (refer to Note 11)

The Group has entered into a share sale agreement to dispose its entire interest in the toll concessionaire. The toll concessionaire is presented as a disposal group held for sale following the commitment of the Group’s management pursuant to the share sale agreement dated 20 June 2014.

Based on the Group management’s best belief, all the conditions precedent stipulated in the share sale agreement will be fulfi lled and the sale is expected be completed within 12 months.

2. Signifi cant accounting policies

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

(a) Basis of consolidation

(i) Subsidiaries

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

The Group adopted MFRS 10, Consolidated Financial Statements in the current fi nancial year. This resulted in changes to the following policies:

• Control exists when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In the previous fi nancial years, control exists when the Group has the ability to exercise its power to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities.

• Potential voting rights are considered when assessing control only when such rights are substantive. In the previous fi nancial years, potential voting rights are considered when assessing control when such rights are presently exercisable.

• The Group considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that signifi cantly affect the investee’s return. In the previous fi nancial years, the Group did not consider de facto power in its assessment of control.

The adoption of MFRS 10 has no signifi cant impact to the fi nancial statements of the Group.

Investments in subsidiaries are measured in the Company’s statement of fi nancial position at cost less any impairment losses, unless the investment is classifi ed as held for sale or distribution. The cost of investments includes transaction costs.



2. Signifi cant accounting policies (continued)

(a) Basis of consolidation (continued)

(ii) Business combinations

Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group.

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

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

• if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less

• the net recognised amount (generally fair value) of the identifi able assets acquired and liabilities assumed.

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

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

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

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

(iii) Acquisitions of non-controlling interests

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

(iv) Loss of control

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

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

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




(a) Basis of consolidation (continued)

(vi) Transactions eliminated on consolidation

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

(b) Foreign currency

Foreign currency transactions

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

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

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

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

(c) Financial instruments

(i) Initial recognition and measurement

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

A fi nancial instrument is recognised initially, at its fair value plus, in the case of a fi nancial instrument not at fair value through profi t or loss, transaction costs that are directly attributable to the acquisition or issue of the fi nancial instrument.

(ii) Financial instrument categories and subsequent measurement

The Group and the Company categorise fi nancial instruments as follows:

Financial assets

Loans and receivables

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

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

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

Financial liabilities

All fi nancial liabilities are subsequently measured at amortised cost.

(iii) Financial guarantee contracts

A fi nancial guarantee contract is a contract that requires the issuer to make specifi ed payments to reimburse the holder for a loss it incurs because a specifi ed debtor fails to make payment when due in accordance with the original or modifi ed terms of a debt instrument.

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




(c) Financial instruments (continued)

(iv) Derecognition

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

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

(v) Effective interest of the Sukuk Mudharabah

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

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

The Group periodically re-estimate the future cash payment of the Sukuk Mudharabah to refl ect future cashfl ows entitled by the Sukuk Holders (refer to Note 18(c)) which alters the effective interest rate of the Sukuk Mudharabah in accordance to MFRS139, AG7.

(d) Property, vessels and equipment

(i) Recognition and measurement

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

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

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

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

(ii) Subsequent costs

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




(d) Property, vessels and equipment (continued)

(iii) Depreciation

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

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

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

Buildings 2% Vessels 7% Vessels equipment 20% Dry docking expenditure 40% Motor vehicles 20% - 25% Boat 10% Renovations 8% - 10% Computer system, furniture, fi ttings and other equipment 10% - 60%

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

(e) Leased assets

(i) Finance leases

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

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

(ii) Operating leases

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

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

(f) Intangible assets

(i) Concession intangible assets (“CIA”)

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

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




(f) Intangible assets (continued)

(i) CIA (continued)

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

The projected total traffi c volume of the concession is based on latest available independent traffi c projection. The traffi c volume projection is updated from time to time to refl ect the latest available information.

Changes in the expected pattern of consumption of future economic benefi ts embodied in the assets are accounted for by changing the projected total traffi c volume of the concession. The amortisation expense on concession assets is recognised in profi t or loss.

(ii) Goodwill

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

(iii) Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefi ts embodied in the specifi c asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profi t or loss as incurred.

(g) Inventories

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

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

(h) Non-current asset held for sale

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

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

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

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

(i) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an insignifi cant risk of changes in fair value with original maturities of three months or less, and are used by the Group and the Company in the management of their short term commitments. For the purpose of the statement of cash fl ows, cash and cash equivalents are presented net of pledged deposits.

Current year actual traffi c volume (Current year actual traffi c volume + projected total traffi c volume for the remaining concession period)

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




(j) Impairment

(i) Financial assets

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

An impairment loss in respect of loans and receivables is recognised in profi t or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.

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

(ii) Other assets

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

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

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to disposal. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset or cash-generating unit.

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

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

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to profi t or loss in the fi nancial year in which the reversals are recognised.




(k) Equity instruments

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

(i) Ordinary shares

Ordinary shares are classifi ed as equity.

(ii) Compound fi nancial instruments

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

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

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

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

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

(l) Employee benefi ts

(i) Short-term employee benefi ts

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

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

(ii) State plans

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

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

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

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

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

(n) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outfl ow of economic benefi ts will be required to settle the obligation. Provisions are determined by discounting the expected future cash fl ows at a pre-tax rate that refl ects current market assessments of the time value of money and the risks specifi c to the liability. The unwinding of the discount is recognised as fi nance cost.

Provision for heavy repairs

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




(o) Revenue and other income

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

(i) Toll revenue

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

Pursuant to the Concession Agreements, the Government of Malaysia reserves the right to restructure or to restrict the imposition of unit toll rate increases, and in such event, the Government shall compensate for any reduction in toll revenue, subject to negotiation and other considerations that the Government may deem fi t. Toll compensation is recognised in profi t or loss over the period in which the compensation relates to based on the arrangement as disclosed in Note 22 to the fi nancial statements.

(ii) Vessel charter

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

(iii) Interest income/profi ts from Syariah deposits

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

(iv) License fee

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

(v) Advertising income and highway access fee

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

(vi) Dividend income

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

(vii) Management fee

Management fee is recognised when services are rendered.

(viii) Guarantee fee

Guarantee fee is recognised on an accrual basis.

(p) Borrowing costs

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

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

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

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

(q) Income tax

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

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




(q) Income tax (continued)

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

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

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

(r) Discontinued operation

A discontinued operation is a component of the Group’s business that represents a separate major line of business that has been disposed of or is held for sale or distribution, or is a subsidiary acquired exclusively with a view to resale. Classifi cation as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classifi ed as held for sale, if earlier. When an operation is classifi ed as a discontinued operation, the comparative statement of profi t or loss and other comprehensive income is re-presented as if the operation had been discontinued from the start of the comparative period.

(s) Earnings per ordinary share

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

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

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

(t) Operating segments

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

(u) Contingent liabilities

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

(v) Fair value measurement

From 1 August 2013, the Group adopted MFRS 13, Fair Value Measurement which prescribed that fair value of an asset or a liability, except for share-based payment and lease transactions, is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market.

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

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



3. Property, vessels and equipment Computer system, furniture, Dry Motor fi ttings and Vessels under Vessels docking vehicles other Group Buildings Vessels construction equipment expenditure and boat Renovations equipment Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost At 1 August 2012 940 1,019,349 - 2,392 15,979 3,314 1,578 2,990 1,046,542Additions - 220,524 82,592 1,707 20,419 668 42 1,156 327,108Disposals - - - - - (192) - - (192)Reclassifi cation - - - 406 - - - (406) -At 31 July 2013/ 1 August 2013 940 1,239,873 82,592 4,505 36,398 3,790 1,620 3,740 1,373,458Additions - - 141,540 - 12,484 541 25 300 154,890Transfer to assets held for sale (refer to Note 11) - - - - - (1,181) (850) (1,380) (3,411)Disposals - (60,554) - - - (290) - - (60,844)Written off - - - - (15,655) - - (268) (15,923)Reclassifi cation - 224,132 (224,132) - - - - - -At 31 July 2014 940 1,403,451 - 4,505 33,227 2,860 795 2,392 1,448,170

Accumulated depreciation and amortisation At 1 August 2012 181 135,039 - 1,556 6,835 1,617 867 1,894 147,989Charge for the year 19 68,946 - 283 9,156 644 160 289 79,497Disposals - - - - - (142) - - (142)At 31 July 2013/ 1 August 2013 200 203,985 - 1,839 15,991 2,119 1,027 2,183 227,344Charge for the year 19 76,495 - 723 13,504 573 128 437 91,879Written off - - - - (15,555) - - (263) (15,818)Transfer to assets held for sale (refer to Note 11) - - - - - (273) (465) (481) (1,219)Disposals - (26,790) - - - (290) - - (27,080)At 31 July 2014 219 253,690 - 2,562 13,940 2,129 690 1,876 275,106

Carrying amounts At 31 July 2013/ 1 August 2013 740 1,035,888 82,592 2,666 20,407 1,671 593 1,557 1,146,114At 31 July 2014 721 1,149,761 - 1,943 19,287 731 105 516 1,173,064

3.1 The carrying amount of motor vehicles of the Group held under hire purchase at the reporting date were RM522,000 (2013:

RM661,000).

3.2 All other property, vessels and equipment of the Group are pledged as securities for borrowings as disclosed in Note 17.

3.3 The Group’s property, vessels and equipment include borrowing costs from bank loans borrowed specifi cally for the purpose of the construction of the vessels. During the fi nancial year, the borrowing costs capitalised as cost of property, vessels and equipment amounted to RM5,243,000 (2013: RM321,000).



4. Investments in subsidiaries

Company 2014 2013 Note RM’000 RM’000

Unquoted shares, at cost 4.1 89,658 249,658

4.1 In 2014, investment in SILK amounting RM160,000,000 has been classifi ed as held for sale (refer to Note 11).

Details of the subsidiaries are as follows:

Principal place Effective of business/ ownership Country of interest Name of subsidiaries Principal activities incorporation 2014 2013 % %Held by the Company: Sistem Lingkaran-Lebuhraya Kajang Sdn. Bhd. (“SILK”)

Tolled highway concessionaire Malaysia 100 100 AQL Aman Sdn. Bhd. (“AQL”) Investment holding Malaysia 100 100 Red Centennial Sdn. Bhd. (“RCSB”) Dormant Malaysia 100 100

Held through subsidiaries Held through SILK: Manfaat Tetap Sdn. Bhd. Special Purpose (“MTSB”) Vehicle to facilitate the issuance of Sukuk Mudharabah (Note 18) Malaysia 100 100 Held through AQL: Jasa Merin (Malaysia)Sdn. Bhd. (“Jasa Merin”)

Provision of offshore marine support services Malaysia 70 70

Held through Jasa Merin: JM Global 1 (Labuan) Plc Provision of offshore marine support services Malaysia 70 36 JM Global 2 (Labuan) Plc Provision of offshore marine support services Malaysia 70 36 JM Global 3 (Labuan) Plc Provision of offshore marine support services Malaysia 70 36 JM Global 4 (Labuan) Plc Provision of offshore marine support services Malaysia 70 36 Jasa Merin (Labuan) Plc Dormant Malaysia 70 70



4. Investments in subsidiaries (continued)

Non-controlling interests in subsidiaries

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

2014 Carrying Profi t NCI percentage of amount allocated ownership interest of NCI to NCIName of subsidiaries % RM’000 RM’000

Jasa Merin (Malaysia) Sdn. Bhd. and subsidiaries (“Jasa Merin Group”) 30 58,518 15,138

In December 2013, Jasa Merin acquired an additional 49% interest in its subsidiaries, increasing its ownership from 51% to 100% (refer to Note 35) and accordingly increase the Group effective ownership interest in these subsidiaries from 36% to 70%.

Summarised fi nancial information before intra-group elimination Jasa Merin Group RM’000As at 31 July Non-current assets 1,173,064Current assets 112,624Non-current liabilities (873,765)Current liabilities (216,863)Net assets 195,060

Year ended 31 July Revenue 276,884Profi t for the year 40,135 Cash fl ows from operating activities 111,080Cash fl ows from investing activities (160,904)Cash fl ows from fi nancing activities 39,683Net decrease in cash and cash equivalents (10,141) Dividends paid to NCI -

2013 Carrying Profi t NCI percentage of amount allocated ownership interest of NCI to NCIName of subsidiaries % RM’000 RM’000

Jasa Merin Group 30 89,799 14,344



4. Investments in subsidiaries (continued)

Non-controlling interests in subsidiaries (continued)

Summarised fi nancial information before intra-group elimination Jasa Merin Group RM’000

As at 31 July Non-current assets 1,143,782Current assets 110,906Non-current liabilities (873,579)Current liabilities (179,765)Net assets 201,344 Year ended 31 July Revenue 306,538Profi t for the year 32,262 Cash fl ows from operating activities 133,546Cash fl ows from investing activities (328,179)Cash fl ows from fi nancing activities 204,067Net increase in cash and cash equivalents 9,434 Dividends paid to NCI (300)

Signifi cant restrictions

Other than those disclosed elsewhere in the fi nancial statements, the carrying amounts of assets to which signifi cant restrictions apply are as follow:

Group 2014 2013 RM’000 RM’000

Cash and cash equivalents 54,804 42,923

Restriction imposed by Sukuk Mudharabah Agreement

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

The cash and bank balances of SILK and MTSB are subject to a distribution scheme (refer to Note 18) as stipulated in Sukuk Mudharabah agreements.

Restriction imposed by bank covenants

The covenants of bank loans taken by Jasa Merin, a subsidiary of the Company, restricts the ability of the subsidiary to utilise its cash and bank balances of RM960,000 (2013: RM512,000) until settlement of the term loans.



5. Concession intangible assets

Group Note 2014 2013 RM’000 RM’000 restated

Cost At beginning of year 954,691 920,282Additions 1,986 34,509Adjustments - (100)Transfer to asset held for sale 11 (956,677) -At end of year - 954,691 Accumulated amortisation At beginning of year 43,800 29,824Amortisation for the year 13,051 13,976Transfer to asset held for sale 11 (56,851) -At end of year - 43,800 Net carrying amount - 910,891

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

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

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

Expressway development expenditure incurred in connection with the concession is classifi ed as “Concession intangible asset” while the amortisation of concession intangible assets is included in the “Direct costs” line item in the statements of comprehensive income of discontinued operation (refer to Note 26).

6. Goodwill on consolidation

Group Note 2014 2013 RM’000 RM’000 restated

At beginning of year 13,883 13,883Transfer to asset held for sale 11 (13,236) -At end of year 647 13,883 For the purpose of impairment testing, goodwill is allocated to the Group’s operating division which represents the lowest level within the Group at which the goodwill is monitored for internal management purpose.



6. Goodwill on consolidation (continued)

The aggregate carrying amounts of goodwill allocated to each unit are as follows: Group 2014 2013 RM’000 RM’000 restated

Tolled highway concessionaire - 13,236Offshore marine support services 647 647 647 13,883

7. Deferred tax assets/(liabilities)

Recognised deferred tax assets/(liabilities)Deferred tax assets and liabilities are attributable to the following: Assets Liabilities Net 2014 2013 2014 2013 2014 2013Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 restated restated restated

Property, vessels and equipment and concession intangible assets - - (127,938) (280,349) (127,938) (280,349)Ijarah rental payable - 31,066 - - - 31,066Trade and other payables - 4,993 - - - 4,993Unutilised capital allowances 70,135 152,383 - - 70,135 152,383Unutilised tax losses - 166,776 - - - 166,776Other items 721 709 (920) (1,041) (199) (332)Tax assets/(liabilities) 70,856 355,927 (128,858) (281,390) (58,002) 74,537Set off of tax (70,827) (222,217) 70,827 222,217 - -Net tax assets/ (liabilities) 29 133,710 (58,031) (59,173) (58,002) 74,537Company Preference shares - - - (37) - (37)Convertible loan stocks - - (891) (1,004) (891) (1,004)Net tax liabilities - - (891) (1,041) (891) (1,041)

Included Recognised in profi t or loss Recognised in profi t or loss in disposal At Continuing Discontinued At Continuing Discontinued group held At 1.8.2012 operations operation 31.7.2013/ operation operation for sale 31.7.2014 (Note 25) (Note 26) 1.8.2013 (Note 25) (Note 26) (Note 11)Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 restated restated

Property, vessels and equipment and concession intangible assets (248,113) (28,341) (3,895) (280,349) (19,004) 2,218 169,197 (127,938)Ijarah rental payable 22,778 - 8,288 31,066 - 7,893 (38,959) -Trade and other payables 4,888 - 105 4,993 - 858 (5,851) -Unutilised capital allowances 123,320 22,619 6,444 152,383 20,042 (182) (102,108) 70,135Unutilised tax losses 166,776 - - 166,776 - (6,671) (160,105) -Other items 499 (831) - (332) 133 - - (199)Net tax assets/ (liabilities) 70,148 (6,553) 10,942 74,537 1,171 4,116 (137,826) (58,002) Company Preference shares (212) 175 - (37) 37 - - -Convertible loan stocks (1,131) 127 - (1,004) 113 - - (891)Net tax assets/ (liabilities) (1,343) 302* - (1,041) 150 - - (891)

* Out of RM302,000, amount recognised to profi t or loss was RM262,000 and the remaining RM40,000 was recognised in equity upon conversion of preference shares and loan stocks into ordinary shares.

Movement in temporary differences during the year



8. Inventories

Group 2014 2013 RM’000 RM’000

Spare parts for vessels 1,319 735

9. Trade and other receivables

Group Company Note 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Trade Charter hire income from national oil corporation 5,710 19,727 - -Charter hire income from multinational oil corporations 52,455 32,572 - -Other trade receivables 268 1,522 - - 58,433 53,821 - - Non-trade Amount due from subsidiaries 9.1 - - 7,317 6,811Sundry receivables 9,602 7,007 41 37Staff advances 208 68 - -Prepayments 2,224 1,894 12 -Deposits 223 258 11 2 12,257 9,227 7,381 6,850 70,690 63,048 7,381 6,850

9.1 Amount due from subsidiaries

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

10. Cash and cash equivalents

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000

Cash and bank balances 17,032 20,938 625 273Deposits placed with licensed banks 43,633 70,868 21,750 1,800 60,665 91,806 22,375 2,073

Included in the deposits placed with licensed banks of the Group is RM nil (2013: RM1,650,000) charged to a performance bond in favour of Lembaga Lebuhraya Malaysia.

Deposits placed with licensed banks of the Group amounting to RM10,597,000 (2013: RM8,392,000) are pledged as securities for banking facilities granted to the Group.



11. Disposal group held for sale

The toll concessionaire segment of the Group is presented as a disposal group held for sale following the commitment of the Group’s management on 20 June 2014 to a plan to sell the segment. Effort to sell the disposal group has commenced and sale is expected to be completed in the next fi nancial year.

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

2014 Note Group Company RM’000 RM’000Assets classifi ed as held for sale

Investments in subsidiaries 4.1 - 160,000Goodwill 11.1 13,236 -Concession intangible assets 11.2 899,826 -Plant and equipment 11.3 2,192 -Deferred tax assets 7 137,826 -Trade and other receivables 11.4 609 -Cash and cash equivalents 11.5 53,844 - 1,107,533 160,000

Liabilities classifi ed as held for sale Sukuk Mudharabah 18 691,381 -Ijarah rental payable 20 327,250* -Hire purchase 51 -Trade and other payables 26,132 -Provisions 21 37,711 - 1,082,525 -Net assets 25,008 160,000

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

The carrying value of the goodwill, concession intangible assets and plant and equipment of the disposal group is the same as its carrying value before it was being reclassifi ed to current asset.

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

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

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

Note 11.2Concession intangible assets comprise the following: Group 2014 Note RM’000 Cost 5 956,677Accumulated amortisation 5 (56,851) 899,826Note 11.3Plant and equipment held for sale comprise the following: Group 2014 Note RM’000

Cost 3 3,411Accumulated depreciation 3 (1,219) 2,192



11. Disposal group held for sale (continued)

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

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

Included in the deposits placed with licensed banks is RM1,709,000 (2013: RM1,650,000) pledged for a bank facility granted to SILK.

12. Share capital

Group and Company Number Number Amount of shares Amount of shares 2014 2014 2013 2013 RM’000 ’000 RM’000 ’000

Ordinary shares of RM0.25 each Authorised 998,000 3,992,000 998,000 3,992,000 Issued and fully paid At 1 August 108,333 433,333 99,262 397,050 Issue of new shares 7,500 30,000 - - Issued upon conversion of: preference shares 13,187 52,747 4,871 19,484 loan stocks - - 4,200 16,799 At 31 July 129,020 516,080 108,333 433,333

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

Ordinary shares issued upon conversion of preference shares and loan stocks

During the fi nancial year, the Company issued:

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

• 52,746,667 (2013: 19,484,187) new ordinary shares of RM0.25 each upon conversion of 10,988,889 (2013: 4,111,111) CC-RPS together with their attendant accrued dividends at the rate of four (4) new ordinary shares for every RM1 of CC-RPS and its attendant coupon payable.

In the prior year, the Company issued 16,798,893 new ordinary shares of RM0.25 each pursuant to the conversion of 3,800,000 RCULS-B together with their attendant accrued dividends at the rate of four (4) new ordinary shares for every RM1 of RCULS-B and its attendant coupon payable.

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

13. Share premium, reverse acquisition defi cit and capital reserve

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

Reverse acquisition defi cit arose from the reverse acquisition of the Company by AQL.

Capital reserve arose from capital reduction exercise in prior years.



14. Preference shares

Preference shares consist of 10-Year Cumulative Convertible Redeemable Preference Shares (“CC-RPS”).

Group and Company Number Number Amount of shares Amount of shares 2014 2014 2013 2013 RM’000 ’000 RM’000 ’000

Preference shares of RM0.10 each Authorised 2,000 20,000 2,000 20,000 Issued and fully paid At 1 August 1,099 10,989 1,510 15,100 Converted into ordinary shares (1,099) (10,989) (411) (4,111) At 31 July - - 1,099 10,989 CC-RPS premium At 1 August 9,890 13,590 Converted into ordinary shares (9,890) (3,700) At end of year - 9,890 - 10,989

The CC-RPS were initially issued on 6 November 2003 as Cumulative Non-Convertible Redeemable Preference Shares (“CN-RPS”). The CN-RPS were varied to CC-RPS upon approval by the holders of the CN-RPS on 30 October 2009.

The salient terms of the CC-RPS were as follows:

(a) the CC-RPS were redeemable at the option of the Company for cash at RM1 per share at any time from the date commencing from the 5th anniversary of the issue date of 6 November 2003;

(b) the CC-RPS were transferable and were convertible at the holders’ option at the rate of one (1) CC-RPS for four (4) fully paid-up new ordinary shares of RM0.25 each in the Company. Unless earlier redeemed or converted, each CC-RPS should be redeemed on the maturity date of 6 November 2013;

(c) the CC-RPS ranked in priority to the ordinary shares of the Company in a return of capital in the event of winding-up/liquidation of the Company and payment of dividends.

The CC-RPS did not have any right to participate further in the distribution of the surplus in assets and profi ts of the Company; and

(d) the holders of CC-RPS were entitled to vote at any general meeting of the Company at which a resolution was relating to:

(i) the reduction of capital of the Company;(ii) the winding up of the Company;(iii) any abrogation or variation of the special rights and privileges attaching to the CC-RPS; and

(iv) the creation or issue of any further shares ranking in priority to or pari passu with the CC-RPS (unless consented in writing by 75% of the CC-RPS holders).

On 5 November 2013, all the preference shares and dividends payable were converted into ordinary shares.



14. Preference shares (continued)

The amounts recognised in the statements of fi nancial position of the Group and of the Company may be analysed as follows:

Group and Company 2014 2013 RM’000 RM’000

Equity component at beginning of year 1,384 1,901CC-RPS converted during the year (1,384) (517)Equity component at end of year - 1,384 Liability component at beginning of year 10,837 14,132CC-RPS converted during the year (10,989) (3,950)Interest expense recognised during the year 210 916Dividends payable during the year (58) (261)Liability component at end of year - 10,837

Interest expense on the CC-RPS was calculated on the effective yield basis by applying the effective interest rate of 7.51% (2013: 7.51%) per annum for an equivalent preference share to the liability component of the CC-RPS.

15. Loan stocks

Group and Company 2014 2013 RM’000 RM’000

Liability component of Redeemable Convertible Unsecured Loan Stocks (“RCULS”) 6,317 5,867

(a) RCULS-B

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

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

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

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

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

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

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



15. Loan stocks (continued)

(b) RCULS (CR)

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

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

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

RCULS-B RCULS (CR) TotalGroup and Company RM’000 RM’000 RM’000

Nominal value of RCULS At 1 August 2012 43,750 654 44,404Converted into ordinary shares during the year (3,800) - (3,800)At 31 July 2013/31 July 2014 39,950 654 40,604 Equity component of RCULS, net of deferred tax At 1 August 2012 36,721 550 37,271Converted into ordinary shares during the year (3,237) - (3,237)At 31 July 2013/31 July 2014 33,484 550 34,034 Liability component of RCULS At 1 August 2012 5,963 8 5,971Conversion of RCULS-B (541) (2) (543)Finance costs for the year 424 15 439At 31 July 2013 5,846 21 5,867Finance costs for the year 450 - 450At 31 July 2014 6,296 21 6,317

Interest expense on RCULS-B and RCULS (CR) is calculated on the effective yield basis by applying the effective interest rate of 7.51% (2013: 7.51%) per annum to the liability component.

As at the end of the reporting period, the cumulative RCULS coupon payable was RM6,132,000 (2013:RM4,780,000).

16. Employee trust shares

Employee trust shares of RM6,688,000 (2013: RM6,688,000) relates to 15,200,000 (2013:15,200,000) shares of the Company held by Jasa Merin Employee Trust, a trust set up by the subsidiary, Jasa Merin, pursuant to the acquisition of AQL.

The main features of the trust include:

• all confi rmed full time permanent employees of Jasa Merin at the time of the grant date shall be eligible to participate in the trust;

• the award to the participants is through the realisation of any gains arising from the disposal of the shares held by the trust in accordance with the formula described by the trust rules and by laws;

• the trust shall continue to be in force at the discretion of the committee set up to administer the trust, for a maximum period of 12 months commencing from the date the trust purchases the shares or 6 months after the listing of the shares purchased, whichever is later; and

• the trust may be terminated at any time by the committee or, at the discretion of the committee by a resolution of Jasa Merin in general meeting, subject to all relevant approvals which may be required.

There were no outstanding grants at the end of the fi nancial year (2013: Nil).



17. Loans and borrowings

Group 2014 2013 Note RM’000 RM’000 restated

Non-current Sukuk Mudharabah 18 - 691,275 Secured term loans 17.1 816,394 812,132 Hire purchase payables 17.2 261 318 816,655 1,503,725Current Sukuk Mudharabah 18 - 18,895 Revolving credit 17.3 40,000 - Secured term loans 17.1 122,285 127,008 Hire purchase payables 17.2 114 229 162,399 146,132Add: Liability component of CC-RPS (Note 14) - 10,837Add: Liability component RCULS (Note 15) 6,317 5,867 985,371 1,666,561

17.1 Secured term loans

The term loans of the Group are secured by the following:

(a) debentures created over fi xed and fl oating assets of subsidiaries, Jasa Merin, up to RM nil (2013: RM34,534,000), JM Global 1 (Labuan) Plc and JM Global 2 (Labuan) Plc up to RM220,000,000 (2013: RM220,000,000), JM Global 3 (Labuan) Plc up to RM 153,175,000 (2013: RM 153,175,000) and JM Global 4 (Labuan) Plc up to RM153,175,000 (2013: RM153,175,000);

(b) fi rst legal/mortgage charge over the vessels; (c) corporate guarantee from a corporate shareholder of subsidiaries for RM nil (2013: RM199,530,000); (d) an irrevocable joint and several guarantee by certain directors of AQL; (e) assignment of charter proceeds in respect of the vessels to the proceed account of RM960,000 (2013:

RM512,000); (f) assignment of all benefi t, interest, rights and property over or in respect of the vessels under construction

contracts; and (g) assignment of insurance policy for all vessels in favour of the banks.

17.2 Hire purchase payables

Hire purchase liabilities are payable as follows:

Present Present Future value of Future value of minimum minimum Minimum minimum lease lease Lease lease payments Interest payments Payments Interest payments 2014 2014 2014 2013 2013 2013 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Less than one year 129 15 114 255 26 229Between one and fi ve years 280 19 261 351 33 318 409 34 375 606 59 547



17. Loans and borrowings (continued)

17.3 Revolving credit

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

18. Sukuk Mudharabah

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

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

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

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

(a) Capital repayment terms under Mudharabah contract

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

Pay to MTSB Retained by SILK

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

8th to 21st anniversary 94% of Excess Funds 6% of Excess Funds, or RM2 million per annum of the issue date whichever is lower.

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

Total available cash fl owLess:

Taxes and any other payment/fees to the authoritiesOperating expenditureCapital expenditureMinimum ljarah Rental APeriodic ljarah Rental BAny accrued Minimum ljarah Rental A and accrued Periodic ljarah Rental B

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

The Periodic ljarah Rental B is:

(i) for the amount of RM2 million per annum;(ii) payable annually in arrears;(iii) payable commencing 3rd year from the issue date;(iv) RM38 million for the whole period of the ljarah;

(v) not constitute an event of default for any non-payment of Periodic ljarah Rental B from the issue date until the 7th anniversary and continue to accrue notwithstanding the same; and

(vi) constitute a default under the ljarah Agreement for any non-payment of accrued and current Periodic ljarah Rental B from the 8th anniversary from the issue date.



18. Sukuk Mudharabah (continued)

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

The Periodic ljarah Rental A is:

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

(“Minimum ljarah Rental A”) that is payable commencing the 1st anniversary from the issue date; (vi) not constitute an event of default for non-payment of Minimum ljarah Rental A from the issue date until the 7th

anniversary and continue to accrue notwithstanding the same; (vii) not constitute an event of default for non-payment of Periodic ljarah Rental A throughout the Sukuk tenure; and (viii) constitute a default under the ljarah Agreement for any non-payment of accrued and current Minimum ljarah

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

(c) Profi t Payment C (“PPC”) and Profi t Payment D The Excess Funds of the Sukuk Mudharabah shall be distributed based on the distribution scheme as per Note 18(a).

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

1st to 7th 8th to 21st

anniversary anniversary

Percentage of Issuer’s portion of the Excess Funds (“Profi t Payment C”) 49.5% 59.4%Percentage of Issuer’s portion of the Excess Funds (“Profi t Payment D”) 49.5% 39.6%

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

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

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

(d) Securities

The Sukuk Mudharabah is secured by:

(i) fi xed and fl oating charge over all the assets and undertaking of SILK;(ii) fi xed and fl oating charge over all the assets and undertaking of MTSB; and(iii) limited guarantee given by the Company.

Under the limited guarantee given by the Company:

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

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

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



18. Sukuk Mudharabah (continued)

(e) Prepayment option of Sukuk Mudharabah

Prepayment is only allowed vide Expected Profi t Payment D and/or refi nancing through Islamic fi nancing facility (be it fi nancing facility or Islamic securities) by the Investors (“Sukuk holders”). The refi nancing by the Investors shall be led by Affi n Hwang Investment Bank Berhad. Should the Group intend to refi nance the Sukuk Mudharabah, a special resolution needs to be passed at the meeting of the Sukuk holders (duly convened and held in accordance with the provisions contained in the Trust Deed signed on 17 January 2008), which should be carried by 2 or more Sukuk Holders, holding in aggregate not less than 2/3 of the Sukuk Mudharabah remaining outstanding.

19. Trade and other payables

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Trade Trade payables 29,284 29,082 - - Non-trade Advance toll compensation from the Government of Malaysia - 3,634 - -Amount payable for new ship building 3,109 3,109 - -Advance license and access fees 19.1 - 12,740 - -Preference shares dividends payable 19.2 - 2,139 - 2,139Accruals 13,138 17,560 371 289Sundry payables - 945 - 2Deposits received - 44 - -Amounts due to subsidiaries 19.3 - - 6,836 9,948 45,531 69,253 7,207 12,378

19.1 Advance license and access fees

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

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

19.2 Preference shares dividends payable

Preference shares dividends payable relates to the accumulated dividends accrued in respect of 10-year Cumulative Convertible Redeemable Preference Shares (“CC-RPS”) as disclosed in Note 14. CC-RPS and the attendant dividends payable were converted at the rate of four (4) fully paid-up new ordinary shares of RM0.25 each in the Company for every RM1.00 of the CC-RPS on its maturity date of 5 November 2013.

19.3 Amounts due to subsidiaries

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



20. Ijarah rental payable

ljarah rental payable to Sukuk Mudharabah holders represents the balance due after payment of 3.5% Minimum ljarah Rental A as disclosed in Note 18(b)(v) and calculated on the effective yield basis by applying the effective interest rate of 9.53% (2013: 9.53%) per annum.

21. Provisions

Heavy repairs Lane widening TotalGroup RM’000 RM’000 RM’0002014 At 1 August 2013 3,073 34,509 37,582Unwinding of discount 129 - 129Transfer to liabilities held for sale (3,202) (34,509) 37,711At July 2014 - - - 2013, restated At 1 August 2012 2,536 - 2,536Unwinding of discount 168 - 168Provision during the year 1,300 34,509 35,809Utilised during the year (931) - (931)At July 2013 3,073 34,509 37,582 Analysed as: 2013, restated Current 2,181 - 2,181Non-current 892 34,509 35,401 3,073 34,509 37,582

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

Lane wideningProvision for lane widening relates to the estimated costs of the contractual obligations to upgrade the highway infrastructure as specifi ed in the Concession Agreement.

22. Revenue

Discontinued Continuing operation (refer operations to Note 26) Total 2014 2013 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group Vessel charter services 276,884 306,538 - - 276,884 306,538Highway toll collections - - 74,246 65,756 74,246 65,756Toll compensation revenue* - - 13,653 11,052 13,653 11,052 276,884 306,538 87,899 76,808 364,783 383,346 Company Management and guarantee fees from subsidiaries 4,784 3,183 - - 4,784 3,183Dividend income from subsidiaries 70 70 - - 70 70 4,854 3,253 - - 4,854 3,253

* Toll compensation is receivable from the Government of Malaysia in the event the Government approves and publishes in the Gazette lower toll rates than the agreed toll rates.



23. Finance costs

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 restated Finance costs on: Term loans 60,463 50,903 - -Convertible preference shares (Note 14) 210 916 210 916Convertible loan stocks 450 439 450 439Revolving credits 1,614 - - -Hire purchase payables 13 16 - - 62,750 52,274 660 1,355Less: Finance costs capitalised in property, vessels and equipment (5,243) (321) - -Total fi nance costs 57,507 51,953 660 1,355

24. Profi t before tax

The following amounts have been included in arriving at profi t before tax:

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000 restated

Profi t before tax is arrived at after charging:Auditors’ remuneration: Statutory audit 130 133 40 37 Other services 96 11 6 5Employee benefi ts expense 24.1 46,737 42,878 308 269Non-executive directors’ remuneration 24.2 246 156 246 156Amortisation of dry-docking expenditure 3 13,504 9,156 - -Depreciation of property, vessels and equipment 3 77,763 69,661 - -Property, vessels and equipment written off 100 - - -Rental of offi ce and warehouse 208 152 - -Realised loss on foreign exchange 515 - - -Unrealised loss on foreign exchange 46 161 - -

and after crediting: Gain on disposal of property, vessels and equipment (11,043) - - -Interest income (947) (702) (137) (59)Rental income - (184) - -Realised gain on foreign exchange - (61) - -



24. Profi t before tax (continued)

24.1 Employee benefi ts expense Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 restated

Wages and salaries 36,371 35,139 284 257Defi ned contribution plan 3,016 2,247 24 12Social security contributions 222 157 - -Retirement benefi ts - (29) - -Other staff related expenses 7,128 5,343 - -Short term accumulating compensated absence - 21 - - 46,737 42,878 308 269

Included in employee benefi ts expense of the Group and of the Company are executive directors’ remuneration amounting to RM1,482,000 (2013: RM1,568,000) and RM308,000 (2013: RM269,000) respectively.

24.2 Directors’ remuneration Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 restated

Executive directors: - salaries 803 998 204 193- bonus 380 414 80 64- fees 10 10 - -- defi ned contribution plan 146 139 24 12- allowances and other emoluments 136 - - -- benefi ts-in-kind 7 7 - -Total executive directors’ remuneration 1,482 1,568 308 269 Non-executive directors: - fees 156 96 156 96- other emoluments 90 60 90 60Total non-executive directors’ remuneration 246 156 246 156Total directors’ remuneration including benefi ts-in-kind 1,728 1,724 554 425

25. Tax expense

Recognised in profi t or loss Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 restated

Current tax expense Malaysian - current year 1,259 1,186 1,106 711- under/(over) provision in prior years 659 (57) 659 -Total current tax recognised in profi t or loss 1,918 1,129 1,765 711 Deferred tax expense - origination and reversal of temporary differences (1,049) 6,552 (151) (262)- (over)/under provision in prior years (122) 1 - - (1,171) 6,553 (151) (262)Total income tax expense 747 7,682 1,614 449



25. Tax expense (continued)

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 restatedReconciliation of tax expense Profi t before tax 41,959 42,927 3,523 1,155 Income tax using Malaysian tax rate of 25% (2013:25%) 10,490 10,732 881 289Different tax rate in Labuan (8,558) (3,346) - -Non-deductible expenses 610 427 74 160Tax exempt income - (75) - -(Over)/under provision of deferred income tax in prior years (122) 1 - -Under/(over) provision of current income tax expense in prior year 659 (57) 659 -Effect of changes in tax rate* (2,332) - - -Total income tax expense 747 7,682 1,614 449

* In the Malaysian Budget 2014, it was announced that corporate income tax rate will be reduced to 24% for the year of assessment 2016 (“YA 2016”) onwards. Consequently, any temporary differences expected to be incurred in YA 2016 onwards are measured using this rate.

Domestic income tax is calculated at the Malaysian statutory tax rate of 24% (2013: 25%) on the estimated assessable profi t for the year.

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

26. Discontinued operation

During the year, the Group entered into a share sale agreement to dispose its entire interest in the toll concessionaire segment. The segment was not a discontinued operation or classifi ed as held for sale as at 31 July 2013 and the comparative consolidated statement of profi t or loss and other comprehensive income and cash fl ow have been re-presented to show the discontinued operation separately from continuing operations. Management committed to a plan to sell this segment on 20 June 2014 due to the strategic decision to place greater focus on the Group’s core operation, being the offshore marine support services.

Loss attributable to the discontinued operation was as follows:

Results of discontinued operation Group Note 2014 2013 RM’000 RM’000

Revenue 22 87,899 76,808Direct costs (28,105) (28,675)Gross profi t 59,794 48,133Other income 985 940Administrative expenses (8,672) (6,690)Results from operating activities 52,107 42,383Finance income 1,334 1,123Finance cost (94,045) (90,588)Loss before tax (40,604) (47,082)Tax benefi t 7 4,116 10,942Loss for the year (36,488) (36,140)



26. Discontinued operation (continued)

Included in loss before tax of discontinued operation are: Group 2014 2013 Note RM’000 RM’000 restated

Auditors’ remuneration : Statutory audit 62 62 Other services 250 -Depreciation of plant and equipment 612 680Employee benefi ts expense (i) 11,600 9,791Non-executive directors’ remuneration 124 65 Provision for heavy repairs - 1,300Amortisation of concession intangible assets 13,051 13,976Impairment loss on other receivables 475 -Plant and equipment written off 5 -Finance cost 94,045 90,588Gain on disposal of plant and equipment - (26)Gain on disposal of non-current asset classifi ed as held for sale (33) (69)Interest income (1,334) (1,109)Rental income - (2)

(i) Included in employee benefi ts expense of the discontinued operation are executive directors’ remuneration amounting to RM1,318,000 (2013: RM1,153,000).

The loss from discontinued operation of RM36,488,000 (2013:RM36,140,000) is attributable entirely to the owners of the Company.

Cash fl ows from/(used in) discontinued operation Group 2014 2013 RM’000 RM’000

Net cash from operating activities 72,821 62,716Net cash used in investing activities (1,041) (1,605)Net cash used in fi nancing activities (60,406) (53,702)Effect on cash fl ows 11,374 7,409

27. Earnings/(loss) per ordinary share

(a) Basic earnings/(loss) per ordinary share

The calculation of basic earnings/(loss) per ordinary share at 31 July 2014 was based on the profi t/(loss) attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding, excluding employee trust shares held by the Company and is calculated as follows:

Continuing DiscontinuedGroup operations operation Total

2014 Profi t/(loss) attributable to owners (RM’000) 26,074 (36,488) (10,414)Weighted average number of ordinary shares in issue (‘000) 462,122 462,122 462,122Basic earnings/(loss) per share (sen) 5.64 (7.89) (2.25) 2013, restated Profi t/(loss) attributable to owners (RM’000) 20,901 (36,140) (15,239)Weighted average number of ordinary shares in issue (‘000) 398,501 398,501 398,501Basic earnings/(loss) per share (sen) 5.24 (9.06) (3.82)



27. Earnings/(loss) per ordinary share (continued)

(b) Diluted

The calculation of diluted earnings/(loss) per ordinary share at 31 July 2014 was based on profi t/(loss) attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive effects of convertible loan stocks, convertible preference shares and the attached dividends payable is calculated as follows:

Continuing Discontinued operations operation TotalGroup RM’000 RM’000 RM’000

2014 Profi t/(loss) attributable to owners 26,074 (36,488) (10,414)After-tax effect of interest on convertible loan stocks and convertible preference shares 509 - 509Profi t/(loss) attributable to owners of the parent including assumed conversion 26,583 (36,488) (9,905)

2013, restated Profi t/(loss) attributable to owners 20,901 (36,140) (15,239)After-tax effect of interest on convertible loan stocks and convertible preference shares 1,093 - 1,093Profi t/(loss) attributable to owners of the parent including assumed conversion 21,994 (36,140) (14,146)

Number of shares 2014 2013 ’000 ’000

Weighted average number of ordinary shares at 31 July (basic) 462,122 398,501Effect of dilution Convertible loan stocks 178,920 190,191Convertible preference shares and its dividends payable 14,018 70,956Weighted average number of ordinary shares at 31 July (diluted) 655,060 659,648

Group 2014 2013 sen sen

Diluted earnings/(loss) per share From continuing operations 4.06 3.33 From discontinued operation (5.57) (5.48) (1.51) (2.15)



28. Employee benefi ts

A subsidiary operated a retirement benefi t scheme for its eligible employees. The Group set aside provision for retirement benefi ts based on the entitlement rate each eligible employee was entitled to at the end of each fi nancial year of service over the employee’s period of employment. The plan was limited to those employees who were in employment with Jasa Merin as at 14 October 2009.

On 13 December 2011, the Board of Directors approved the proposal by the management to abolish the retirement benefi ts scheme. Subsequent to the abolishment, the subsidiary had made full payout to all eligible employees.

Movements of the net liability were as follows: Group 2014 2013 RM’000 RM’000

At beginning of year - 4,637Recognised in profi t or loss - (29)Benefi ts paid during the year - (4,608)At end of year - -

29. Contingent liabilities

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

Group 2014 2013 Note RM’000 RM’000

Contingent liability not considered remote Litigation (unsecured) 29.1 28,400 28,400

29.1 Litigation (unsecured)

Following the compulsory acquisition of land falling under the Expressway that was undertaken by SILK pursuant to the Concession Agreement, certain land owners whose land have been acquired, have fi led their objection in Court against the Land Administrator’s award of compensation. In the SILK’s funded stretch, there are 240 cases with claims amounting to RM503.7 million. Out of the 240 cases, 238 cases have been resolved and 2 cases with claims of RM28.4 million are still pending Court hearing.

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

30. Operating segments

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

- tolled highway concessionaire; this segment was classifi ed as discontinued operation (refer to Note 26).- offshore marine support services.

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 profi t or loss which, in certain respects as explained in the table below, is measured differently from operating profi t or loss in the consolidated fi nancial statements.



30.

Op

erat

ing

seg

men

ts (c

ont

inue

d)

Th

e fo

llow

ing

tabl

es p

rovid

e an

alysis

of t

he G

roup

’s re

venu

e, re

sults

, ass

ets,

liabi

lities

and

oth

er in

form

atio

n by

bus

ines

s se

gmen

t:

Tol

l hig

hway

O

ffsh

ore

mar

ine

Oth

ers

Adj

ustm

ents

and

P

er c

onso

lidat

ed

c

once

ssio

naire

sup

port

ser

vice

s

e

limin

atio

ns

fi n

anci

al s

tate

men

ts

(d

isco

ntin

ued)

20

14

2013

20

14

2013

20

14

2013

20

14

2013

20

14

2013

R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’000

rest

ated

rest

ated

Rev

enue

:

Exte

rnal

cust

omer

s

87,8

99

76,8

08

276,

884

306,

538

- -

(87,

899)

(7

6,80

8)

276,

884

306,

538

Inte

r-seg

men

t

- -

- -

4,85

4 3,

253

(4,8

54)

(3,2

53)

- -

Tota

l rev

enue

87,8

99

76,8

08

276,

884

306,

538

4,85

4 3,

253

(92,

753)

(8

0,06

1)

276,

884

306,

538

Seg

men

t (lo

ss)/

profi

t

(36,

488)

(3

6,14

0)

39,9

79

34,5

17

1,96

9 70

6 35

,752

36

,162

41

,212

35

,245

Incl

uded

in th

e m

easu

re o

f s

egm

ent p

rofi t

/(los

s) a

re:

G

ain o

n di

spos

al of

pro

perty

,

vess

els a

nd e

quip

men

t -

- 11

,043

-

- -

- -

11,0

43

-In

tere

st in

com

e

1,33

4 1,

123

714

630

233

58

(1,3

34)

(1,1

23)

947

688

Depr

eciat

ion

and

amor

tisat

ion

(13,

663)

(1

4,39

2)

(91,

269)

(7

8,81

7)

- -

13,6

63

14,3

92

(91,

269)

(7

8,81

7)Fi

nanc

e co

sts

(9

4,04

5)

(90,

588)

(6

1,31

2)

(53,

211)

(6

60)

(1,3

55)

98,5

10

93,2

01

(57,

507)

(5

1,95

3)In

com

e ta

x be

nefi t

/(exp

ense

) 4,

116

10,9

42

899

(7,2

26)

(1,6

38)

(449

) (4

,124

) (1

0,94

9)

(747

) (7

,682

)

A

sset

s an

d lia

bilit

ies

Ad

ditio

ns to

non

-cur

rent

ass

ets

2,46

3 88

9 15

4,41

3 32

6,21

9 -

- (2

,463

) (8

89)

154,

413

326,

219

Segm

ent a

sset

s

1,07

3,02

4 1,

053,

832

1,28

7,73

4 1,

261,

035

283,

250

258,

581

(263

,596

) (2

47,0

30)

2,38

0,41

2 2,

326,

418

Segm

ent l

iabilit

ies

1,

048,

016

1,00

8,30

3 1,

090,

677

1,05

0,72

8 14

,574

30

,578

(1

6,08

8)

(16,

226)

2,

137,

179

2,07

3,38

3



30. Operating segments (continued)

Note:Nature of adjustments and eliminations to arrive at amounts reported in the consolidated fi nancial statements:

(a) Inter-segment transactions and balances are eliminated on consolidation;(b) Reclassifi cation of discontinued operation (Note 26);(c) Other non-cash expenses; and(d) Additions to non-current assets consist of:

Group 2014 2013 Note RM’000 RM’000

Property, vessels and equipment 3 154,890 327,108Concession intangible assets 5 1,986 34,509 156,876 361,617

Geographical segments

Revenue from the tolled highway concessionaire segment and the offshore marine support services segments are attributable to customers in Malaysia.

All of the Group’s non-current assets are located in Malaysia.

Major customers

During the fi nancial year, the number of major customers of the Group with revenue equal or more than 10% of the Group’s total revenue is 3 (2013: 3) representing offshore marine support services segment and the total revenue contributed by these major customers are RM168,419,000 (2013:RM234,062,000).

31. Financial instruments

31.1 Categories of fi nancial instruments

The table below provides an analysis of fi nancial instruments categorised as follows:

(a) Loans and receivables (“L&R”); and (b) Financial liabilities measured at amortised cost (“FL”).

2014 2013 Carrying L&R/ Carrying L&R/ amount (FL) amount (FL) RM’000 RM’000 RM’000 RM’000 restated* restated*GroupFinancial assetsTrade and other receivables 68,466 68,466 61,154 61,154Cash and cash equivalents 60,665 60,665 91,806 91,806 129,131 129,131 152,960 152,960 Financial liabilities Loans and borrowings (979,054) (979,054) (1,649,857) (1,649,857)Ijarah rental payable - - (274,684) (274,684)Trade and other payables (45,531) (45,531) (69,253) (69,253)Liability component of convertible loan stocks (6,317) (6,317) (5,867) (5,867) (1,030,902) (1,030,902) (1,999,661) (1,999,661)



31. Financial instruments (continued)

31.1 Categories of fi nancial instruments (continued)

2014 2013 Carrying L&R/ Carrying L&R/ amount (FL) amount (FL) RM’000 RM’000 RM’000 RM’000 restated* restated*

Company Financial assets Trade and other receivables 7,369 7,369 6,850 6,850Cash and cash equivalents 22,375 22,375 2,073 2,073 29,744 29,744 8,923 8,923

Financial liabilities Trade and other payables (7,207) (7,207) (12,378) (12,378)Liability component of convertible loan stocks (6,317) (6,317) (5,867) (5,867) (13,524) (13,524) (18,245) (18,245)

* Not applicable for the Company

31.2 Net losses and gains arising from fi nancial instruments


Net (losses)/gains on: Loans and receivables 947 688 137 59Financial liabilities (58,067) (52,053) (660) (1,355) (57,120) (51,365) (523) (1,296)

31.3 Financial risk management

The Group has exposure to the following risks from its use of fi nancial instruments:

• Credit risk• Liquidity risk• Market risk

31.4 Credit risk

Credit risk is the risk of a fi nancial loss to the Group if a customer or counterparty to a fi nancial instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its trade and other receivables. The Company’s exposure to credit risk arises principally from amount due from subsidiaries.

Receivables

Risk management objectives, policies and processes for managing the risk

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not signifi cant.

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by the carrying amounts in the statement of fi nancial position. The trade receivables represent amounts due from 3 (2013: 3) of its major customers amounting to RM29,682,000 (2013: RM42,721,000). The Directors closely monitor the Group’s credit risk exposure to these customers.




31.4 Credit risk (continued)

Receivables (continued)

Impairment losses

The Group maintains an ageing analysis in respect of trade receivables only. The ageing of trade receivables as at the end of the reporting period was:

Individual Gross impairment NetGroup RM’000 RM’000 RM’000

2014 Not past due 27,594 - 27,594Past due 1 - 30 days 17,141 - 17,141Past due 31 - 90 days 8,249 - 8,249Past due more than 90 days 5,449 - 5,449 58,433 - 58,4332013 Not past due 23,914 - 23,914Past due 1 - 30 days 21,481 - 21,481Past due 31 - 90 days 5,474 - 5,474Past due more than 90 days 2,952 - 2,952 53,821 - 53,821

Inter company balances


The receivables from related companies principally arise from dividends and fees receivable. The Company does not specifi cally monitor the recoverability of these amounts as balances are repayable on demand.


As at the end of the reporting period, the maximum exposure to credit risk represented by their carrying amounts in the statement of fi nancial position.

Impairment losses

As at the end of the reporting period, there was no indication that the amount due from subsidiaries are not recoverable.

Financial guarantees


The Company provides fi nancial guarantees to banks in respect of banking facilities granted to certain subsidiaries. The Company monitors on an ongoing basis the results of the subsidiaries and repayment made by the subsidiaries.


The maximum exposure to credit risk amounts to RM554,550,000 (2013: RM459,229,000) representing the outstanding banking facilities of the Group as at end of the reporting period which are guaranteed by the Company.

As at the end of the reporting period, there was no indication that any subsidiary would default on repayment.

Cash and cash equivalents


The Group and the Company are also exposed to counterparty credit risk from licensed fi nancial institutions through placement of deposits and bank balances. Placements are only made with approved counterparties who met the appropriate rating and other relevant criteria.


Most of these balances are unsecured, however, in view of the sound credit rating of counterparties, management does not expect any counterparty to fail to meet its obligation.




31.5 Liquidity risk

Liquidity risk is the risk that the Group will not able to meet its fi nancial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables.

The Group maintains a level of cash and cash equivalents deemed adequate by the management to ensure, as far as possible, that it will have suffi cient liquidity to meet its liabilities when they fall due.

Maturity analysis

The table below summarises the maturity profi le of the Group’s fi nancial liabilities as at the end of the reporting period based on undiscounted contractual payments:

Carrying Contractual Contractual Under 1 – 2 2 – 5 More than amount interest rate cash fl ows 1 year years years 5 years2014 RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000Group Secured term loans 938,679 4.75% to 7.20% 1,176,935 170,339 182,572 473,574 350,450Hire purchase liabilities 375 2.30% to 2.90% 409 129 97 183 -Revolving credit 40,000 5.30% to 5.50% 42,160 42,160 - - -Trade and other payables 45,531 - 45,531 45,531 - - -Liability component of convertible loan stocks 6,317 3% 6,414 6,414 - - - 1,030,902 1,271,449 264,573 182,669 473,757 350,450

Company Trade and other payables 7,207 - 7,207 7,207 - - -Liability component of convertible loan stocks 6,317 3% 6,414 6,414 - - - 13,524 13,621 13,621 - - -

2013Group Sukuk Mudharabah and ijarah rental payable 984,854 8% + PPC* 2,725,664 60,232 69,278 285,267 2,310,887Secured term loans 939,140 4.75% to 7.20% 1,229,954 175,806 164,262 468,336 421,550Hire purchase liabilities 547 2.30% to 4.24% 547 238 238 71 -Trade and other payables 69,253 - 69,253 69,253 - - -Liability component of convertible loan stocks 5,867 3% 6,414 - 6,414 - - 1,999,661 4,031,832 305,529 240,192 753,674 2,732,437 Company Trade and other payables 12,378 - 12,378 12,378 - - -Liability component of convertible loan stocks 5,867 3% 6,414 - 6,414 - - 18,245 18,792 12,378 6,414 - - * PPC – Profi t Payment C (refer to Note 18(c))




31.6 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rate and other prices that will affect the Group’s fi nancial position or cash fl ows.

31.6.1 Currency risk

The Group is exposed to foreign currency risk on purchases and bank balances that are denominated in a currency other than the respective functional currencies of the Group entities. The currencies giving rise to this risk are primarily U.S. Dollar (“USD”), Singapore Dollars (“SGD”) and Euro.


Exposure to foreign currency risk is monitored on an ongoing basis. The Group does not perform hedging on foreign currency transactions.

Exposure to foreign currency risk The Group’s exposure to foreign currency (a currency which is other than the currency of the Group entities) risk, based on carrying amounts as at the end of the reporting period was:

Denominated in USD SGD EURO

Group RM’000 RM’000 RM’0002014 Cash and cash equivalents 204 - -Trade and other payables (4,320) (299) (216)Net exposure in the statement of fi nancial position (4,116) (299) (216) 2013 Cash and cash equivalents 2,635 - -Trade and other payables (561) (57) -Net exposure in the statement of fi nancial position 2,074 (57) -

Currency risk sensitivity analysis

A 10% (2013: 10%) strengthening of the Ringgit Malaysia against the following currencies at the end of the reporting period would have increased/(decreased) post-tax profi t or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates remained constant.

Profi t or loss 2014 2013

Group RM’000 RM’000 USD (412) 207SGD (30) (6)EURO (22) - (464) 201

A 10% (2013: 10%) weakening of Ringgit Malaysia against the above currencies at the end of the reporting period would have had equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remained constant.

31.6.2 Interest rate risk

The Group’s variable rate borrowings are exposed to a risk of change in cash fl ows due to changes in interest rates. Short term receivables and payables are not signifi cantly exposed to interest rate risk.


Management has an informal interest rate policy in place and management reviews interest rates exposure closely.




31.6 Market risk (continued)

31.6.2 Interest rate risk (continued)

Exposure to interest rate risk

The interest rate profi le of the Group’s and the Company’s signifi cant interest-bearing fi nancial instruments, based on carrying amounts as at the end of the reporting period was:


Fixed rate instruments Financial assets 43,633 70,868 21,750 1,800Financial liabilities (695,330) (700,917) - - (651,697) (630,049) 21,750 1,800 Floating rate instruments Financial liabilities (283,723) (1,223,307) - -

Interest rate risk sensitivity analysis

Fair value sensitivity analysis for fi xed rate instrumentsThe Group does not account for any fi xed rate fi nancial assets and liabilities at fair value through profi t or loss. Therefore, a change in interest rates at the end of the reporting period would not affect profi t or loss.

Cash fl ow sensitivity analysis for variable rate instrumentsA change of 1% (2013: 1%) in effective interest rates at the end of the reporting period would have increased/(decreased) equity and pre-tax profi t or loss by the amounts shown below. This analysis assumes that all other variables remain constant.

Equity and profi t or loss 1% 1% Increase Decrease RM’000 RM’000Group 2014 Floating rate instruments 2,837 (2,837)2013 Floating rate instruments 12,233 (12,233)

31.7 Fair value information

The carrying amounts of cash and cash equivalents, trade and other receivables and trade and other payables reasonably approximate their fair values due to the relatively short term nature of these fi nancial instruments.

The fair values of loans and borrowings, together with the carrying amounts shown in the statement of fi nancial position, are as follows:

Fair value of fi nancial instruments not carried at fair value* Carrying Level 1 Level 2 Level 3 Total amount RM’000 RM’000 RM’000 RM’000 RM’000

Group 2014 Financial liabilities Secured term loans - - 929,763 929,763 938,679Hire purchase payables - - 375 375 375 - - 930,138 930,138 939,054




31.7 Fair value of information (continued)

Fair value of fi nancial instruments not carried Carrying at fair value* amount RM’000 RM’000

Group 2013, restated Financial liabilities Secured term loans 952,902 939,140Hire purchase payables 547 547Sukuk Mudharabah 710,170 710,170Liability component of CC-RPS 10,837 10,837Liability component of RCULS 5,867 5,867 1,680,323 1,666,561 There are no fi nancial instruments carried at fair value.

* Comparative fi gures have not been analysed by levels, by virtue of transitional provision given in Appendix C2 of MFRS 13.

Policy on transfer between levels

The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer.

Level 1 fair value

Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical fi nancial assets or liabilities that the entity can access at the measurement date.

Level 2 fair value

Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the fi nancial assets or liabilities, either directly or indirectly.

Non-derivative fi nancial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash fl ows, discounted at the market rate of interest at the end of the reporting period.

Transfer between Level 1 and Level 2 fair values

There has been no transfer between Level 1 and 2 fair values during the fi nancial year (2013: no transfer in either directions).

Level 3 fair value

Level 3 fair value is estimated using unobservable inputs for the fi nancial liabilities using discounted cash fl ow method.

32. Capital management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 July 2014 and 31 July 2013.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group considers the net debt as loans and borrowings, trade and other payables, ijarah rental payable, less cash and cash equivalents.



32. Capital management (continued)

Group Company 2014 2013 2014 2013 Note RM’000 RM’000 RM’000 RM’000

Continuing operations

Loans and borrowings 17 985,371 1,666,561 - -Trade and other payables 19 45,531 69,253 7,207 12,378Ijarah rental payable 20 - 274,684 - -Less: Cash and cash equivalents 10 (60,665) (91,806) (22,375) (2,073)Net debt from continuing operations 970,237 1,918,692 (15,168) 10,305 Discontinued operation

Sukuk Mudharabah 11 691,381 - - -Trade and other payables 11 37,711 - - -Ijarah rental payable 11 327,250 - - -Less: Cash and cash equivalents 11 (53,844) - - -Net debt from discontinued operation 1,002,498 - - -Total net debt 1,972,735 1,918,692 (15,168) 10,305 Total equity attributable to the owners of the Company 184,715 163,236 264,849 228,003 Capital and net debt 2,157,450 2,081,928 249,681 238,308 Gearing ratio 91% 92% n/a 4%

33. Related parties

Identity of related parties

For the purposes of these fi nancial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control or jointly control the party or exercise signifi cant infl uence over the party in making fi nancial and operating decisions, or vice versa, or where the Group and the party are subject to common control. Related parties may be individuals or other entities.

Related parties also include key management personnel defi ned as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. Key management personnel include all the Directors of the Group.

Signifi cant related party transactions

The signifi cant related party transactions of the Group and of the Company, other than key management personnel compensation, are as follows:

Company 2014 2013 RM’000 RM’000 Subsidiaries: CRPS dividend income 70 70 Management fees 420 600 Corporate guarantee fees 4,364 2,583 Back charged of professional fees 399 22

The directors of the Company are of the opinion that the above transactions have been entered into in the normal course of business and have been established on terms and conditions that are mutually agreed between the companies.

The outstanding balances arising from the above transactions have been disclosed in Note 9 and Note 19 to the fi nancial statements.



33. Related parties (continued)

Compensation of key management personnel

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Salaries and bonus 4,536 5,306 284 257Fees 362 230 156 96Allowance and other emoluments 570 146 90 60Defi ned contribution plan 548 541 24 12Other benefi ts 90 60 - - 6,106 6,283 554 425

34. Capital and other commitments

Capital expenditure as at the reporting date is as follows: Group 2014 2013 RM’000 RM’000Capital expenditure Approved and contracted for: Vessels and equipment - 150,687 Approved but not contracted for: Vessels and equipment 16,600 112,658

35. Acquisition of non-controlling interests

On 17 December 2013, the Group acquired the remaining 49% shares (through its subsidiary, Jasa Merin) in JM Global 1 (Labuan) Plc, JM Global 2 (Labuan) Plc, JM Global 3 (Labuan) Plc and JM Global 4 (Labuan) Plc for RM49,463,000 in cash, increasing its ownership from 51% to 100% and accordingly increase the Group effective ownership interest in these subsidiaries from 36% to 70%. The total carrying amount of these subsidiaries was RM92,004,000. The Group recognised a decrease in non-controlling interests of RM46,419,000 and a decrease in retained earnings of RM3,044,000.

The following summarises the effect of changes in the equity interest in JM Global 1 (Labuan) Plc, JM Global 2 (Labuan) Plc, JM Global 3 (Labuan) Plc and JM Global 4 (Labuan) Plc that is attributable to the owners of the Company:

2014 RM’000Equity interest at 1 August 2013 41,153Effect of increase in Company’s ownership interest 46,419Share of comprehensive income 15,561Equity interest at 31 July 2014 103,133

36. Prior year adjustments

36.1 Sukuk Mudharabah

In prior years, the Group had:

• recognised the fi nance cost of Sukuk Mudharabah based on the contractual ijarah rental rate, instead of its initial effective interest rate (“EIR”).

• calculated the EIR on the assumption that the Group would be able to refi nance the Sukuk Mudharabah during 2014. The cash fl ow projection used in the EIR computation did not refl ect the contractual terms of excess funds sharing until full settlement of Sukuk Mudharabah.

Based on a revised cash fl ow projection ignoring the refi nancing, the EIR should have been 9.53% per annum had the same cash fl ow been used since the inception of Sukuk Mudharabah.



36. Prior year adjustments (continued)

36.2 Deferred tax assets

Based on the cash fl ow projection used by the Group in assessing the EIR of Sukuk Mudharabah (refer to Note 36.1), there were clear indications that the Group would be able to utilise the deferred tax assets that were not recognised in the previous year. The Group had also started utilising its unabsorbed capital allowances since 2012. To comply with MFRS 112, the Group has recognised the deferred tax assets retrospectively amounting to RM133,710,000 as at 31 July 2013 since it is probable at that point the Group would be able to utilise the deferred tax assets.

36.3 Goodwill

As a result of the prior year adjustment on the EIR fi nance cost of Sukuk Mudharabah (Note 36.1) in fi nancial year 2010, the Group had also reassessed the purchase price allocation of the business combination of the Company and AQL which resulted in a reverse acquisition. A negative goodwill amounted to RM11.9 million which had been recognised to profi t or loss during the reverse acquisition in fi nancial year 2010 is reversed and a goodwill of RM13.2 million is recognised, instead.

The reconciliation between the asset and liability from the reverse acquisition previously reported and restated are as follows:

Fair value recognised on acquisition As previously Prior year stated adjustment Restated RM’000 RM’000 RM’000

Plant and equipment 2,719 - 2,719Expressway heavy repairs 764 - 764Expressway development expenditure 919,559 - 919,559Receivables 599 - 599Deposits with fi nancial institutions 14,071 - 14,071Cash and cash equivalents 699 - 699 938,411 - 938,411 Borrowings 764,722 25,105 789,827Payables 73,773 - 73,773Tax payables 120 - 120 838,615 25,105 863,720 Fair value of net assets 99,796 74,691Less: Non-controlling interest - -Group’s share of net assets 99,796 74,691Goodwill on acquisition (11,869) 13,236Total cost of business combination 87,927 87,927

36.4 Provision for lane widening

Based on the Concession Agreement, the Group has contractual obligations for future lane widening once specifi c conditions stipulated in the agreement are met.

In 2013, although the Group met the specifi c condition, no provision for lane widening was recognised.

Accordingly, the Group’s provision for lane widening and CIA were understated by RM34.5 million and this has been adjusted retrospectively.




36.5 Consolidated statement of cash fl ows

In 2013, the Group’s cash and cash equivalents presented in the consolidated statement of cash fl ows amounted to RM91.8 million (2012: RM71.4 million) which included pledged deposits of RM10 million (2012: RM7.3 million).

For the purpose of the statement of cash fl ows, cash and cash equivalents should be presented net of pledged deposits (refer to Note 2(i)).

As a result of this, the cash and cash equivalents in the consolidated statement of cash fl ows for the fi nancial year ended 31 July 2013 has been restated to its total net available cash and cash equivalents at RM81.8 million (2012: RM64.1 million), net of pledged deposits.

The following are the summary of the fi nancial impact of the adjustments made for the Sukuk Mudharabah carried at amortised cost method using EIR (Note 36.1), under recognition of deferred tax assets (Note 36.2), under recognition of goodwill (Note 36.3) and under recognition of provision for lane widening (Note 36.4):

As Effect of previously Prior year stated adjustment Restated RM’000 RM’000 RM’000

Statement of fi nancial position Ijarah rental payable (Note 36.1) 2012 (131,958) (90,703) (222,661)2013 (153,387) (121,297) (274,684) Deferred tax assets (Note 36.2) 2012 - 122,768 122,7682013 - 133,710 133,710 Goodwill (Note 36.3) 2012 647 13,236 13,8832013 647 13,236 13,883 Concession intangible assets (Note 36.4) 2013 876,382 34,509 910,891 Provisions (non-current) (Note 36.4) 2013 892 34,509 35,401 Retained earnings 2012 (34,857) (45,301) (80,158)2013 (39,270) (25,649) (64,919)



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36.6 Reconciliation of profi t or loss and other comprehensive income for the fi nancial year ended 31 July 2013 Effect of reclassifi cation of Effect of prior discontinued As previously year operation stated adjustments (Note 11) Restated RM’000 RM’000 RM’000 RM’000

Continuing operations Revenue 383,346 - (76,808) 306,538Direct costs (223,714) - 28,675 (195,039)Gross profi t 159,632 - (48,133) 111,499 Interest income 1,811 - (1,123) 688Other income 1,045 - (940) 105Administrative expenses (24,102) - 6,690 (17,412)Operating profi t 138,386 - (43,506) 94,880Finance costs (111,947) (30,594) 90,588 (51,953)Loss before tax 26,439 (30,594) 47,082 42,927Tax expense (7,682) 10,942 (10,942) (7,682)Profi t for the year 18,757 (19,652) 36,140 35,245 Discontinued operation Loss from discontinued operation, net of tax - - (36,140) (36,140)Profi t/(loss) net of tax, representing total comprehensive income for the year 18,757 (19,652) - (895)

Profi t/(loss) and total comprehensive income attributable to: Owners of the Company 4,413 (19,652) - (15,239) Non-controlling interests 14,344 - - 14,344Profi t/(loss) and total comprehensive income for the year 18,757 (19,652) - (895)




36.7 Reconciliation of cash fl ow for the fi nancial year ended 31 July 2013

As Effect of previously prior year stated adjustments Restated RM’000 RM’000 RM’000

Cash fl ows from operating activities Collection of revenue 409,041 - 409,041 Collection of other income 3,235 - 3,235 Cash generated from operations 412,276 - 412,276 Payment of expenses (156,376) - (156,376) Tax paid (1,492) - (1,492) Net cash generated from operating activities 254,408 - 254,408 Cash fl ows from investing activities Proceeds from sale of property, vessels and equipment 76 - 76 Proceeds from sale of non-current assets classifi ed as held for sale 197 - 197 Purchase of property, vessels and equipment (326,340) - (326,340) Payment of expressway heavy repairs (931) - (931) Increase in pledged deposits - (2,752) (2,752)Net cash used in investing activities (326,998) (2,752) (329,750) Cash fl ows from fi nancing activities Drawdown of borrowings 262,665 - 262,665 Repayment of borrowings (80,389) - (80,389) Payment of fi nance costs (88,995) - (88,995) Dividend paid by a subsidiary to non- controlling shareholder (300) - (300)Net cash from fi nancing activities 92,981 - 92,981 Net increase in cash and cash equivalents 20,391 (2,752) 17,639Cash and cash equivalents at beginning of year 71,415 (7,290) 64,125Cash and cash equivalents at end of year 91,806 (10,042) 81,764



37. Supplementary information on the breakdown of realised and unrealised profi ts

The breakdown of the retained earnings of the Group and of the Company as at 31 July 2014, into realised and unrealised profi ts, pursuant to Paragraph 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements are as follows:

Group Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 restated Total retained earnings of the Company and its subsidiaries: - Realised (15,570) (27,047) 3,398 1,639 - Unrealised (73,481) (46,514) (891) (1,041) (89,051) (73,561) 2,507 598Less: Consolidation adjustments 140,512 138,480 - -Total retained earnings 51,461 64,919 2,507 598

The determination of realised and unrealised profi ts is based on the Guidance of Special Matter No.1, Determination of Realised and Unrealised Profi ts or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by Malaysian Institute of Accountants on 20 December 2010.



The information set out below is disclosed in compliance with the Main Market Listing Requirements of Bursa Securities:-

1. STATUS OF UTILISATION OF PROCEEDS RAISED FROM CORPORATE PROPOSAL

On 20 June 2014, the Company entered into a conditional Share Sale Agreement (“SSA”) with Road Builder (M) Holdings Berhad (“RBH”) in relation to the proposed disposal of the entire interest in Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd (“SILK”) for a total cash consideration of RM395 million (“Proposed SILK Disposal”). As at 21 October 2014, the SSA is pending approvals.

Except for the Proposed SILK Disposal, there is no corporate exercise that has been completed during the current fi nancial year or is pending as at the end of the current fi nancial year.

2. SHARE BUY-BACK

The Company does not have a scheme to buy-back its own shares.

3. OPTIONS OVER ORDINARY SHARES, WARRANTS OR CONVERTIBLE SECURITIES EXERCISED

During the fi nancial year, the Company increased its issued and paid up share capital by way of the conversion of 10,988,889 Cumulative Convertible Redeemable Preference Shares and dividends payable to 52,746,667 ordinary shares of RM0.25 each at par.

Apart from the convertible loan stocks and preference shares, the Company did not issue any convertible securities or grant any options over ordinary shares.

4. AMERICAN DEPOSITORY RECEIPT (“ADR”) OR GLOBAL DEPOSITORY RECEIPT (“GDR”) PROGRAMME

The Company did not sponsor any ADR or GDR programme during the fi nancial year ended 31 July 2014.

5. SANCTIONS AND/OR PENALTIES

There were no public sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the fi nancial year ended 31 July 2014.

6. NON-AUDIT FEES

The non-audit fees paid/payable to the independent auditors of the Company and its subsidiaries for the fi nancial year ended 31 July 2014 amounted to RM346,000.

7. VARIATION IN RESULTS

There was no variance of 10% or more between the audited results for the fi nancial year ended 31 July 2014 and the unaudited results previously announced by the Company.

8. PROFIT GUARANTEE

There was no profi t guarantee given by the Company during the fi nancial year ended 31 July 2014.

9. MATERIAL CONTRACTS INVOLVING DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

There were no material contracts (not being contracts entered into in the ordinary course of business) entered into by the Company and/or its subsidiaries involving directors’ and major shareholders’ interests during the fi nancial year ended 31 July 2014.

10. REVALUATION POLICY ON LANDED PROPERTIES

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

11. STATEMENT BY AUDIT COMMITTEE IN RELATION TO THE ALLOCATION OF OPTIONS OVER ORDINARY SHARES PURSUANT TO THE EMPLOYEES’ SHARE OPTION SCHEME

As at 31 July 2014, the Company has not allocated any options over ordinary shares pursuant to Employees’ Share Option Scheme.

12. RECURRENT RELATED PARTY TRANSACTIONS There were no recurrent related party transactions of a revenue nature entered into during the fi nancial year ended 31 July 2014.

ADDITIONAL COMPLIANCE INFORMATION


No. of Shares %

1. Abdul Rahman bin Ali* 203,090,834 28.95% 2. Johan Zainuddin bin Dzulkifl i** 201,719,009 28.75% 3. Bijak Permai Sdn Bhd 81,236,333 11.58% 4. Dato’ Mohd Azlan Hashim*** 79,217,893 11.29% 5. Infra Bumitek Sdn Bhd 59,555,426 8.49% Notes: * Direct and deemed interest through Temuras Jaya Sdn Bhd ** Direct and deemed interest through Infra Bumitek Sdn Bhd and Bijak Permai Sdn Bhd *** Deemed interest through Infra Bumitek Sdn Bhd and RHB Capital Nominees (Tempatan) Sdn Bhd

SUBSTANTIAL SHAREHOLDERS AS AT 17 OCTOBER 2014


No. of Shares %

1. Johan Zainuddin bin Dzulkifl i - direct interest 60,927,250 8.68% - deemed interest* 140,791,759 20.07%

201,719,009 28.75% 2. Dato’ Mohd Azlan Hashim - deemed interest** 79,217,893 11.29% 3. Nik Abdul Malik bin Nik Mohd Amin - direct interest 2,400,000 0.34% 4. Tai Keat Chai - deemed interest*** 1,000,000 0.14% 5. Abdul Hamid bin Sh. Mohamed - direct interest 1,000,000 0.14% Notes: * Deemed interest through Infra Bumitek Sdn Bhd and Bijak Permai Sdn Bhd ** Deemed interest through Infra Bumitek Sdn Bhd and RHB Capital Nominees (Tempatan) Sdn Bhd *** Deemed interest through the shares held by his spouse

DIRECTORS’ INTERESTS IN SHARES AS AT 17 OCTOBER 2014


ANALYSIS OF SHAREHOLDINGS AS AT 17 OCTOBER 2014

Ordinary Cumulative Total (RM) Shares Convertible - Redeemable Preference Shares (“CC-RPS”)

Authorised Share Capital : 3,992,000,000 20,000,000 1,000,000,000 Issued and Paid-up Share Capital : 701,533,561 - 175,383,390 Class of Shares : Ordinary Shares of RM0.25 eachVoting Rights : One vote per ordinary share

Note: The CC-RPS has matured on 5 November 2013 and all outstanding preference shares at that date were converted into ordinary shares of RM0.25 each.

(A) ORDINARY SHARES

Distribution of shareholdings

Size of Shareholdings No. of % of No. of % of Shareholders Shareholders shares Held Shareholdings

1 - 99 29 1.27% 1,037 0.00%100 - 1,000 582 25.57% 499,963 0.07%1,001 - 10,000 885 38.88% 5,118,520 0.73%10,001 - 100,000 574 25.22% 21,378,801 3.05%100,001 - 35,076,677* 203 8.92% 375,426,354 53.52%35,076,678 and above** 3 0.13% 299,108,886 42.64% 2,276 100.00% 701,533,561 100.00%

* Less than 5% of issued shares** 5% and above of the issued shares


ANALYSIS OF SHAREHOLDINGS AS AT 17 OCTOBER 2014THIRTY LARGEST SHAREHOLDERS AS PER THE REGISTER OF DEPOSITORS

Name of Shareholders Name of Benefi cial Owners No. of Share %

1. Abdul Rahman bin Ali 182,781,751 26.05%2. Bijak Permai Sdn Bhd 81,236,333 11.58%3. ABB Nominee (Tempatan) Sdn Bhd Infra Bumitek Sdn Bhd 35,090,802 5.00%4. Johan Zainuddin bin Dzulkifl i 32,727,250 4.67%5. Mohd Noor Ismardi bin Idris 31,998,893 4.56%6. Kenanga Nominees (Tempatan) Sdn Bhd Titian Tegap Sdn Bhd 30,000,000 4.28%7. Johan Zainuddin bin Dzulkifl i 28,200,000 4.02%8. Infra Bumitek Sdn Bhd 24,464,624 3.49%9. Temuras Jaya Sdn Bhd 20,309,083 2.89%10. Suasa Unggul Sdn Bhd 20,000,000 2.85%11. RHB Capital Nominees (Tempatan) Sdn Bhd Mohammed Azlan bin Hashim 19,662,467 2.80%12. Citigroup Nominees (Tempatan) Sdn Bhd Employees Provident Fund Board 13,474,000 1.92%13. Pelaburan MARA Berhad 12,900,000 1.84%14. EB Nominees (Tempatan) Sendirian Berhad Tey Chee Thong 10,500,000 1.50%15. Tey Chee Thong 10,072,321 1.44%16. Citigroup Nominees (Tempatan) Sdn Bhd Kumpulan Wang Persaraan (Diperbadankan) 6,510,500 0.93%17. Amanahraya Trustees Berhad PMB Dana Al-Aiman 3,900,000 0.56%18. CIMSEC Nominees (Tempatan) Sdn Bhd Mohammed Amin bin Mahmud 3,891,100 0.55%19. HSBC Nominees (Asing) Sdn Bhd Credit Suise (SG BR-TST-Asing) 3,632,600 0.52%20. DB (Malaysia) Nominee (Tempatan) Eastspring Investments Dana Al-Ilham 3,020,000 0.43% Sendirian Berhad 21. Ghazali Bin Mat Ariff 3,000,000 0.43%22. Maybank Nominees (Tempatan) Sdn Bhd Wee Seng Yeen 2,777,000 0.40%23. Maybank Nominees (Tempatan) Sdn Bhd Ahmad Nazim Bin Abd Rahman 2,750,000 0.39%24. Maybank Nominees (Tempatan) Sdn Bhd Etiqa Insurance Berhad (Life Non - Par FD) 2,459,300 0.35%25. MIDF Amanah Investment Nominees Intan Ainirawati Binti Abdul Razak 2,443,000 0.35% (Tempatan) Sdn Bhd26. Maybank Nominees (Tempatan) Sdn Bhd Etiqa Insurance Berhad (Shareholders’ FD) 2,437,000 0.35%27. Mohtar Bin Nong 2,400,000 0.34%28. Nik Abdul Malik Bin Nik Mohd Amin 2,400,000 0.34%29. How Wong Yuh 2,300,000 0.33%30. Fakhri Yassin Bin Mahiaddin 2,000,000 0.29%


NOTICE OF 17TH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Seventeenth Annual General Meeting of SILK Holdings Berhad (“the Company”) will be held at Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Friday, 21 November 2014 at 10.00 am for the following purposes :

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the fi nancial year ended 31 July 2014 together with the Reports of the Directors and Auditors thereon.

2. To re-elect the following Directors who retire by rotation pursuant to Article 107 of the Company’s Articles of Association, and being eligible, offer themselves for re-election :

(i) Tai Keat Chai (ii) Abdul Hamid bin Sh Mohamed 3. To approve the Directors’ fees amounting to RM256,000 in respect of the fi nancial year ended 31 July 2014.4. To re-appoint Messrs KPMG as Auditors and to authorise the Directors to determine their remuneration.

AS SPECIAL BUSINESS

To consider and, if thought fi t, to pass with or without modifi cations, the following Resolutions:- 5. Re-Appointment of Tan Sri Datuk Seri Razman M Hashim as a Director Pursuant to Section 129(6) of the

Companies Act, 1965

“THAT Tan Sri Datuk Seri Razman M Hashim, being over the age of 70 years and retiring in accordance with Section 129(6) of the Companies Act 1965, be and is hereby re-appointed as director of the Company to hold offi ce until the conclusion of the next Annual General Meeting of the Company.”

6. Authority to Allot and Issue Shares Pursuant to Section 132D of the Companies Act, 1965 “THAT pursuant to Section 132D of the Companies Act, 1965 and approvals from Bursa Malaysia Securities

Berhad for the listing of and quotation for the additional shares so issued and other relevant authorities, where approval is necessary, authority be and is hereby given to the Directors to allot and issue shares in the Company at any point of time upon such terms and conditions and for such purposes as the Directors may in their absolute discretion deem fi t provided always that the aggregate number of shares to be issued shall not exceed 10% of the issued share capital of the Company for the time being AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

7. To transact any other business of the Company of which due notice shall have been given.

By Order of the Board

KWAN WAI KEIN (MAICSA 7055765)SOTHIRAJEN a/l S. PARANJOTHI (LS 0005734)

Company Secretaries

Kuala Lumpur31 October 2014

(Resolution 1)

(Resolution 2)

(Resolution 3)(Resolution 4)(Resolution 5)

(Special Resolution 6)

(Resolution 7)


NOTICE OF 17TH ANNUAL GENERAL MEETING

NOTES:

1. Appointment of Proxy

i. A member of the Company entitled to attend and vote, is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy need not be a member of the Company.

ii. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing, or if the appointer is a corporation, either under the corporation’s seal, or under the hand of an offi cer or attorney duly authorised.

iii. If a member appoints 2 proxies, the appointment will be invalid unless he states the percentage of his shareholding to be represented by each proxy.

iv. The instrument appointing a proxy must be deposited at the Registered offi ce of the Company at Level 22, Axiata Tower, No. 9, Jalan Stesen Sentral 5, Kuala Lumpur Sentral, 50470 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof, either by hand, post, electronic mail or fax to (03) 2273-8310. In the case where the member is a corporation and the proxy form is delivered by fax or electronic mail, the original form shall also be deposited at the Registered offi ce, either by hand or post not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

2. Explanatory Notes on Special Businesses

i) Special Resolution 6 – Section 129(6) of the Companies Act, 1965

The Special Resolution proposed under Agenda 5 is to seek shareholders approval for the appointment of a Director who is over the age of 70 years.

ii) Ordinary Resolution 7 – Authority to Allot and Issue new Ordinary Shares pursuant to Section 132D of the Companies Act 1965

The Ordinary Resolution proposed under Agenda 6 is to seek a renewal of the general mandate which was approved at the 16th Annual General Meeting of the Company held on 13 December 2013 and will lapse at the conclusion of the forthcoming Annual General Meeting to be held on 21 November 2014.

The general mandate, if approved, will provide fl exibility to the Company for any possible fund raising activities, including but not limited to placing of shares for the purpose of funding future investment project(s) and acquisition(s) and for strategic reasons.

In order to eliminate any delay and costs in convening a general meeting to specifi cally approve such issuance of shares, it is considered appropriate that the Directors be empowered, as proposed under item 6 of the Agenda, to allot and issue new shares in the Company up to an amount not exceeding in total ten percent (10%) of the issued share capital of the Company for the time being. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next annual general meeting of the Company. The Company has issued 30,000,000 new shares on 28 May 2014 pursuant to Section 132D of the Companies Act, 1965 under the general mandate which was approved at the 16th Annual General Meeting of the Company.

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

DIRECTORS WHO ARE STANDING FOR RE-ELECTION

(a) Tai Keat Chai

(b) Abdul Hamid bin Sh Mohamed

(c) Tan Sri Datuk Seri Razman M Hashim

The details of the above Directors who are standing for re-election are set out on page 3 and page 4 of the Annual Report.

Their interests in the securities of the Company are set out on page 94 of the Annual Report.


FORM OF PROXY

17th Annual General MeetingNumber of share(s) heldCDS Account No.

PROXY “A”

I/We …………………………………..…..…………. *NRIC No./Passport No./Company No………………………………...……....… Tel./HP No ………………….…………………………………… of ...…………………………...……………………………………......… ……………………………………………………...………………………………………………….………………………………....being a member of SILK HOLDINGS BERHAD and entitled to vote hereby appoint…………………………………………………....…………… *NRIC No./Passport No …………………………………….…........ Tel./HP No ………………….…………………………………… of ...…………………………...……………………………………..…......or failing him/her, the Chairman of the Meeting as my/our proxy to attend and vote for me/us on my/our behalf at the 17th Annual General Meeting of the Company to be held at Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Friday, 21 November 2014 at 10.00 am and at any adjournment thereof.

WHERE THE MEMBER DESIRES TO APPOINT A 2ND PROXY, THIS SECTION MUST ALSO BE COMPLETED, OTHERWISE IT SHOULD BE DELETED

PROXY “B”

I/We ………………………………………….. *NRIC No./Passport No./Company No…………………….…….…….…………..… Tel./HP No …………………………..………………………. of ……………………………….…….…………...……......... being a member of SILK HOLDINGS BERHAD and entitled to vote hereby appoint………..………....................................…. *NRIC No./Passport No ……………………….................………Tel./HP No ……………………...………………………. of …………………………...………………………….…….…..………or failing him/her, the Chairman of the Meeting as my/our proxy to attend and vote for me/us on my/our behalf at the 17th Annual General Meeting of the Company to be held at Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Friday, 21 November 2014 at 10.00 am and at any adjournment thereof.

The proportions of my/our holding to be represented by my/our proxies are as follows :

1st Proxy “A” - % (to be completed)

2nd Proxy “B” - % (to be completed)

Total: 100 %In case of a vote taken by a show of hands, *1st Proxy “A” / *2nd Proxy “B” shall vote on my/our behalf.

* Delete if inapplicableMy/our proxy/proxies shall vote as follows :(Please indicate with an “X” in the space below how you wish your votes to be cast. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting on the resolutions at his/their discretion)

No. RESOLUTIONS1ST PROXY “A” 2ND PROXY “B”

FOR AGAINST FOR AGAINST1. To receive the Audited Financial Statements of the Company for the

fi nancial year ended 31 July 2014 together with the Directors’ and Auditors Reports thereon.

2. To re-elect the following Directors:- Tai Keat Chai

3. Abdul Hamid bin Sh Mohamed4. To approve the payment of Directors’ fees

5. To re-appoint Messrs. KPMG as Auditors and to authorise and the Directors to fi x their remuneration

6. To re-elect Tan Sri Datuk Seri Razman M Hashim as Director7. To authorise the issue of shares pursuant to Section 132D of the

Companies Act, 1965Dated this ………………………day of …………………………2014 Signature of Member……………………………………………………NOTES: 1. A member of the Company entitled to attend and vote, is entitled to appoint a proxy or proxy to attend and vote in his stead. A proxy need not be a

member of the Company. 2. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing, or if the appointer is a

corporation, either under the corporation's seal, or under the hand of an offi cer or attorney duly authorised. 3. If a member appoints 2 proxies, the appointment will be invalid unless he states the percentage of his shareholding to be represented by each proxy.4. The instrument appointing a proxy must be deposited at the Registered Offi ce of the Company at Level 22, Axiata Tower, No. 9, Jalan Stesen Sentral

5, Kuala Lumpur Sentral, 50470 Kuala Lumpur, Malaysia not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof, either by hand, post, electronic mail or fax to 03-2273-8310. In the case where the member is a corporation and the proxy form is delivered by fax or electronic mail, the original form shall also be deposited at the Registered Offi ce, either by hand or post not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

SILK HOLDINGS BERHAD (405897-V)(Incorporated in Malaysia)Registered Offi ce :Level 22, Axiata Tower , No. 9, Jalan Stesen Sentral 5 Kuala Lumpur Sentral 50470 Kuala Lumpur Tel : 03-2273-1919 Fax : 03-2273-8310


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FOLD THIS FLAP FOR SEALING

FOLD HERE

FOLD HERE

AFFIXSTAMPHERE

The Company SecretarySILK HOLDINGS BERHAD (405897-V) Level 22, Axiata Tower, No. 9 Jalan Stesen Sentral 5Kuala Lumpur Sentral 50470 Kuala Lumpur

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