story merdeka ventures sdn bhd, a subsidiary of permodalan nasional berhad. ... datuk wira hj. hamza...

STORYINSIDE

1 CorporateProfile

2 CorporateStructure

3 CorporateInformation

4 ProfileofDirectors

8 ProfileofChiefExecutiveOfficer

9 ProfileofKeySeniorManagement

12 FinancialHighlights

13 ManagementDiscussionandAnalysis

16 CorporateGovernanceOverviewStatement

27 SustainabilityStatement

35 AdditionalComplianceInformation

38 StatementonRiskManagementandInternalControl

40 AuditCommitteeReport

44 StatementofDirectors’ResponsibilitiesforthePreparationofFinancialStatements

45 ReportsandFinancialStatements

130 ListofProperties

132 StatementonDirectors’andChiefExecutiveOfficer’sInterests

133 AnalysisofShareholdings

136 NoticeofAnnualGeneralMeeting

ProxyForm

Package 10 - Rock blasting

Incorporated in December 2000 and listed on 17 November 2003, WCE Holdings Berhad is focused on the execution of the nation’s RM5,940.0 million West Coast Expressway Project by its 80%-owned subsidiary, West Coast Expressway Sdn Bhd, an ISO9001:2015 and ISO14001:2015 company. This build-operate-transfer privatisation project involves the development of a 233km highway from Banting in Selangor to Taiping in Perak. The construction of this highway is ongoing and some packages will be completed in late 2018.

In the property sector, the Group has also enjoyed success in the launches of its 1,879-acre Bandar Rimbayu mixed development project located next to Kota Kemuning, Shah Alam. The development which commenced in March 2013 has a total expected gross development value of RM11,500 million and it is to be developed over a period of approximately 20 years.

Moving forward, the Group is confident that its ventures in infrastructure and properties will position itself positively on a sustainable growth path.

CORPORATE PROFILE

Package 8 - Laying of binder layer at mainline carriageway completed

Aerial view of WISTERIA, the first landed strata development in Bandar Rimbayu

80%West Coast

Expressway Sdn Bhd339890-P

100%KEB Builders

Sdn Bhd248662-U

50%Ambang Usaha

Sdn Bhd341282-A

30%IJMC – KEBJoint Venture

30%Radiant Pillar Sdn Bhd

501699-W

10%

63%Tiasa Ria Sdn Bhd

527198-X

7%

100%Bandar Rimbayu

Sdn Bhd568093-K

100%KEB Plantations Holdings Sdn Bhd

451276-V

100%KEB Management

Sdn Bhd521369-K

100%

100%KEURO Trading

Sdn Bhd141294-M

100%KEURO Leasing

Sdn Bhd92129-H

100%Ratus Prestij Sdn Bhd

351342-D

100%Angsana Mestika

Sdn Bhd647303-A

100%Maximix Sdn Bhd

359439-D

100%Perkasa Jati

Holdings Sdn Bhd521368-W

n Subsidiariesn Associatesn Jointly Controlled Entity

WCE HighwayServices Sdn Bhd

287253-V(formerly known as

Ambang Vista Sdn Bhd)

CORPORATESTRUCTUREasat30June2018

WCE HOLDINGS BERHAD 2 Annual Report 2018

CORPORATEINFORMATION

BOARd OF dIRECTORs

datuk Ir. Hamzah bin Hasan (Chairman/IndependentNon-ExecutiveDirector)

datuk Oh Chong Peng(SeniorIndependentNon-ExecutiveDirector)

datuk Wira Hj. Hamza bin Taib(IndependentNon-ExecutiveDirector)

Tan Chor Teck (IndependentNon-ExecutiveDirector)

Lee Chun Fai(Non-IndependentNon-ExecutiveDirector)

Tang King Hua(Non-IndependentNon-ExecutiveDirector)

Vuitton Pang Hee Cheah(Non-IndependentNon-ExecutiveDirector)

COmPAny sECRETARy

Raw Koon Beng(MIA8521)

AudIT COmmITTEE

datuk Oh Chong Peng Chairman

datuk Ir. Hamzah bin HasanMember

datuk Wira Hj. Hamza bin Taib Member

Tan Chor TeckMember

Tang King Hua Member

nOmInATIOn COmmITTEE

datuk Wira Hj. Hamza bin TaibChairman

datuk Oh Chong Peng Member

Tang King Hua Member

REmunERATIOn COmmITTEE

datuk Oh Chong PengChairman

datuk Ir. Hamzah bin Hasan Member

Lee Chun Fai Member

Tan Chor TeckMember

PRInCIPAL BAnKERs

RHBInvestmentBankBerhadRHBBankBerhadMalayanBankingBerhad

CORPORATE OFFICE

37-2,No.8,JalanAnggerikVanillaBE31/BEKotaKemuning,Seksyen3140460ShahAlamTel :+60355258800Fax :+60355258666Website:www.wcehb.com.my

REgIsTEREd OFFICE

Unit30-01,Level30,TowerAVerticalBusinessSuiteAvenue3,BangsarSouth8JalanKerinchi59200KualaLumpurTelNo. :+60327839191FaxNo. :+60327839111

sHARE REgIsTRAR

metra management sdn Bhd30.02,30thFloor,MenaraMulti-PurposeCapitalSquare8JalanMunshiAbdullah50100KualaLumpurTelNo. :+60326983232FaxNo. :+60326980313

AudITORs

Baker Tilly monteiro Heng(AF0117)CharteredAccountantsBakerTillyMHTowerLevel10,Tower1,Avenue5BangsarSouthCity59200KualaLumpurTelNo. :+60322971000FaxNo. :+60322829980

sTOCK ExCHAngE LIsTIng

MainMarketofBursaMalaysiaSecuritiesBerhadStockCode :3565StockName:WCEHB

Package 8 - Teluk Intan Interchange

WCE HOLDINGS BERHAD3Annual Report 2018

PROFILE OFDIRECTORS

dATuK IR. HAmzAH BIn HAsAn Chairman/Independent non-Executive director

DatukIr.HamzahbinHasan,aMalaysian,male,aged67,wasappointedastheIndependentNon-ExecutiveDirectoroftheCompanyon2January2015andwasappointedastheChairmanoftheCompanyon23November2017.HeisamemberoftheAuditCommitteeandRemunerationCommittee of the Company. He was also appointed asthe Chairman and Director of West Coast ExpresswaySdn Bhd, an 80%-owned subsidiary of the Company on15April2015.

He obtained his Bachelor of Science (Honours) degreein Civil Engineering from Glasgow University, UnitedKingdom in 1975 and obtained his Master of Science(Construction Management) from LoughboroughUniversity,UnitedKingdomin1987.HeisaProfessionalEngineer of the Board of Engineers Malaysia, Fellow ofChartered InstituteofBuilding,FellowofRoyal InstituteofCharteredSurveyors,FellowofInstitutionofEngineersMalaysia, Fellow of Institute of Value EngineeringMalaysia,ASEANFederationofEngineeringOrganisationsandHonoraryFellowoftheProjectManagementInstituteMalaysia.

HestartedhiscareerasaCivilEngineerinthePublicWorksDepartment (“JKR”) in 1975. Since then he has servedJKRfor23yearsuntil1998.Withhisvastexperienceinboththepublicandprivatesectors,hewasappointedastheChiefExecutiveOfficerof theConstruction IndustryDevelopment Board (“CIDB”) in 2003 and then servedas the Chairman of CIDB from 2011 to February 2014andtheChairmanofMalaysianHighwayAuthorityfrom17February2014to31December2014.

He is currently an independent non-executive directorofIJMCorporationBerhad,apubliclistedcompany,anda director of the School of Professional and ContinuingEducation, University of Technology Malaysia and PNBMerdekaVenturesSdnBhd,asubsidiaryofPermodalanNasionalBerhad.

He has no family relationship with any other directorsand/ormajorshareholdersof theCompany.There isnoconflictofinterestwiththeCompany.Hehasnoconvictionforoffenceswithinthepastfive(5)years.Therewerenopublic sanction or penalty imposed by any regulatorybodiesonhimduringthefinancialyear.

Heattendedfive(5)ofsix(6)BoardofDirectors’meetingheldduringthefinancialyearended31March2018.

WCE HOLdIngs BERHAd 4 Annual Report 2018

dATuK OH CHOng PEngsenior Independent non-Executive director

DatukOhChongPeng,aMalaysian,male,aged74,wasappointedastheIndependentNon-ExecutiveDirector of the Company on 28 September 2007and was appointed as the Senior IndependentNon-Executive Director of the Company on21August2015.He is theChairmanof theAuditCommittee and Remuneration Committee of theCompany.HeisalsoamemberoftheNominationCommitteeoftheCompany.

He undertook his accountancy training inLondonandqualifiedasaCharteredAccountantin 1969. He is a Fellow of the Institute ofChartered Accountants, England and Wales.He joined Coopers & Lybrand (now known asPricewaterhouseCoopersPLT)inLondonin1969and in Malaysia in 1971. He was a partner ofCoopers&LybrandMalaysia from1974untilhisretirementin1997.

He is currently an independent non-executivedirectorofseveralpubliclistedcompanies,namelyBritish American Tobacco (Malaysia) Berhad,DialogGroupBerhad,MalayanFlourMillsBerhadandPUCBerhad.HeisalsoaDirectorofSaujanaResort(M)Berhad,anunlistedcompany,andEPPSolution Sdn Bhd, a subsidiary of PUC Berhad.In addition, he is a Trustee of UTAR EducationFoundation and a Government of Malaysia’sappointed member of the Labuan FinancialServicesAuthority.

His past appointments include being aGovernmentappointedmemberofBursaMalaysiaBerhad (formerlyknownasKualaLumpurStockExchange) (1990-1996) and also member of theListing Committee (2008-2009); a Governmentappointed member of Malaysian AccountingStandards Board (2003-2009); and a CouncilMember (1981-2002) and a past-president(1994-1996)oftheMalaysianInstituteofCertifiedPublic Accountants. He was also a Trustee ofHuaren Education Foundation (1993-2009),ChairmanofLand&GeneralBerhad(1999-2007),NanyangPressHoldingsBerhad(2001-2005)andAllianceFinancialGroupBerhad(2006-2017),andDirectorofHuarenHoldingsSdnBhd(1987-2009),Star Publications (Malaysia) Berhad (1987-2009),Powertek Berhad (1997-2003), Rashid HussainBerhad group of companies (1998-2003), UEMLandSdnBhd(formerlyknownasRenongBerhad)(2001-2003),IJMCorporationBerhad(2002-2012),IJM Plantations Berhad (2003-2012) and Rohas-EucoIndustriesBerhad(2007-2008).

He has no family relationship with any otherdirectors and/or major shareholders of theCompany. There is no conflict of interest withthe Company. He has no conviction for offenceswithinthepastfive(5)years.Therewerenopublicsanction or penalty by any regulatory bodies onhimduringthefinancialyear.

Heattendedallsix(6)BoardofDirectorsmeetingsheld during the financial year ended 31 March2018.

dATuK WIRA Hj. HAmzA BIn TAIB Independent non-Executive director

Datuk Wira Hj. Hamza bin Taib, a Malaysian, male, aged 62, wasappointedastheIndependentNon-ExecutiveDirectoroftheCompanyon23November2017.HeisamemberoftheAuditCommitteeandtheChairmanoftheNominationCommitteeoftheCompany.

HegraduatedwithLLB(Hons)BachelorofLawfromtheInternationalIslamic University Malaysia in 1998 and also obtained a LLB (Hons)DiplomainShariahLegalPracticefromthesameuniversityin2007.

HehasbeenwiththeRoyalMalaysianPoliceformorethan41yearsandwiththat,hegainedextensiveexperienceininvestigation,managementand legal matters particularly in the areas of criminal investigation,commercialcrimeinvestigation,trafficinvestigationandinternalaffairsinvestigation.HestartedhiscareerasanInvestigationOfficer in1976attached to the Criminal Investigation Department of the KuantanContingentPoliceHeadquartersoftheRoyalMalaysianPolice.Hewasthen promoted as the Head of Division of the Criminal InvestigationDepartment of the Raub District Police Headquarter in 1978 and in2003 he was the Perak State Traffic Chief. In 2005, he was the KualaLumpurTrafficChiefandin2007,hewastheFederalTrafficChief.Hewas the Deputy Commissioner of Police for Sarawak in 2008 and theCommissionerofPolice forSabah in2010. In2014,hewasappointedas the Deputy Director of Commercial Crime Investigation until hisretirement in 2017. Thereafter, he was appointed as Advocate andSolicitorofHighCourtofMalayain2017.

He is currently a director of Berjaya Guards Services Sdn Bhd, asubsidiary of Berjaya Land Berhad, a security advisor for PadiberasNasionalBerhadandadirectorofaprivatelimitedcompany.Previously,he was an independent non-executive director of Permaju IndustriesBerhad,andasecurityadvisorofOrixLeasingMalaysiaBerhad.

He has no family relationship with any other directors and/or majorshareholdersof theCompany.There isnoconflictof interestwiththeCompany.Hehasnoconvictionforoffenceswithinthepastfive(5)years.Therewerenopublicsanctionorpenaltybyanyregulatorybodiesonhimduringthefinancialyear.

Heattendedalltwo(2)oftwo(2)BoardofDirectorsmeetingsheldduringthefinancialyearended31March2018.

WCE HOLdIngs BERHAd5Annual Report 2018

TAn CHOR TECK Independent non-Executive director

Tan Chor Teck, a Malaysian, male, aged 56, was appointed as theIndependentNon-ExecutiveDirectoroftheCompanyon26February2018. He is a member of the Audit Committee and RemunerationCommitteeoftheCompany.

HegraduatedwithadegreeinLaw&ArtsfromMelbourneUniversityin1984andadegreeinFilmDirectingfromtheAustralianFilmTVandRadioSchoolin1988.HewasworkingprofessionallyinfilmandTVdirectingandproducinginSydneyuntilhisreturntoMalaysiain1996.Hesubsequentlyleftthefilm-makingindustrytoheadhisfamilybusinesses,mainlyinpropertydevelopmentandmanagement,andprivateinvestmentsfocusedonregionalequities.

He is currently an independent non-executive director of MWEHoldingsBerhad,apubliclistedcompanyandadirectorofseveralprivatelimitedcompanies.

Hehasnofamilyrelationshipwithanyotherdirectorsand/ormajorshareholdersof theCompany.There isnoconflictof interestwiththeCompany.Hehasnoconvictionforoffenceswithinthepastfive(5)years.Therewerenopublicsanctionorpenaltybyanyregulatorybodiesonhimduringthefinancialyear.

Heattendedallone(1)ofone(1)BoardofDirectorsmeetingsheldduringthefinancialyearended31March2018.

LEE CHun FAI non-Independent non-Executive director

Lee Chun Fai, a Malaysian, male, aged 47, wasappointed as the Non-Independent Non-ExecutiveDirectorof theCompanyon17February2014.He isa member of the Remuneration Committee of theCompany.

He graduated with a Bachelor of Accountancy(Honours) Degree from University Utara Malaysia in1995 and a Master of Business Administration fromNorthwesternUniversity(Kellogg)andTheHongKongUniversityofScience&Technologyin2012.

He started his career with a public accounting firm.InOctober1995,hejoinedRoadBuilder(M)HoldingsBhd (“RBH Group”) and was the Head of CorporateServicesDivisionofRBHGrouppriortotheacquisitionof RBH Group in 2007 by IJM Corporation Berhad(“IJM”),apublic listedcompany.Currently,he is theDeputyChiefExecutiveOfficerandDeputyManagingDirectorofIJMandisalsoHeadofCorporateStrategy&Investmentof IJMgroup.Previously,heservedastheDeputyChiefFinancialOfficer.

He is currently a Non-Independent Non-ExecutiveDirector of other public listed companies, namelyScomi Group Bhd and Scomi Energy Services Bhd.His directorships in other public companies includeIJMLandBerhad,RoadBuilder(M)HoldingsBhdandSebanaGolf&MarinaResortBerhad.

Hehasnofamilyrelationshipwithanyotherdirectorsand/ormajorshareholdersoftheCompany.Thereisno conflict of interest with the Company. He has noconviction foroffenceswithin thepastfive (5) years.There were no public sanction or penalty by anyregulatorybodiesonhimduringthefinancialyear.

He attended five (5) of six (6) Board of Directorsmeetings held during the financial year ended31March2018.

PROFILE OF DIRECTORS (continued)


TAng KIng HuAnon-Independent non-Executive director

Tang King Hua, a Malaysian, male, aged 60, wasappointed as the Non-Independent Non-ExecutiveDirectorof theCompanyon17February2014.He isa member of the Audit Committee and NominationCommittee of the Company. He was also appointedas the Director of West Coast Expressway Sdn Bhd,an80%-ownedsubsidiaryoftheCompanyon2April2014.

He graduated with a Bachelor’s degree in IndustrialEngineering from Canada Technical University ofNovaScotia in1982.He isan IndustrialEngineerbyprofession and held various managerial positions inrelatedindustriesbeforejoiningEastradeElectronics(M)SdnBhd(“EESB”)in1986asOperationsManager.Subsequently, he was appointed as the ManagingDirector of EESB and was actively involved in theoperationsofEESB.

In 1991, he joined Davex Group of Companies, anelectronicdivisionofMWEHoldingsBerhad(“MWE”),a public listed company, as its Managing Directorwherehewasresponsiblefortheoverallprofitabilityand viability of Davex Group. On 2 February 2000,he was appointed as an Executive Director of MWE,andsubsequentlyasaManagingDirectorofMWEon28August2002.

HeiscurrentlyalsoadirectorofMWEGolf&CountryClub Berhad, an unlisted company and director inseveralprivatelimitedcompanies.

Hehasnofamilyrelationshipwithanyotherdirectorsand/ormajorshareholdersoftheCompany.Thereisno conflict of interest with the Company. He has noconvictionsforoffenceswithinthepastfive(5)years.There were no public sanction or penalty by anyregulatorybodiesonhimduringthefinancialyear.

He attended all six (6) Board of Directors meetingsheldduringthefinancialyearended31March2018.

VuITTOn PAng HEE CHEAH non-Independent non-Executive director

VuittonPangHeeCheah,aMalaysian,male,aged37,wasappointedas the Non-Independent Non-Executive Director of the Companyon23February2018.Priortothis,hewasthealternatedirectortoTan Sri Pang Tee Chew from 28 August 2014 until the resignationof Tan Sri Pang Tee Chew as the Non-Executive Director of theCompanyon23February2018.

He graduated with a double degree in Information Systems andCommerce from the University of Melbourne in 2004. He startedhis career as a Management Associate for OSK Investment BankBerhad(“OSK”).WhileatOSK,hewasexposedtodifferentaspectsofbankingnamelyAssetManagement,CorporateFinanceandVentureCapital. After three (3) years with OSK, he joined Mamee-DoubleDecker(M)Berhad(“Mamee”)inApril2009andassumedtheroleofBusinessDevelopmentManager.HewasresponsibleformanagingMamee group’s investor relations and corporate exercises whichsawthegroup’smarketcapitalisationmorethandoublinginvalue.HealsoplayedaninstrumentalroleintheprivatisationofMameein2012.HeiscurrentlytheDirectorofCorporateStrategyandFinanceforMamee-DoubleDecker(M)SdnBhd.

Hehasno family relationshipwithanyotherdirectorsand/ormajorshareholders of the Company. There is no conflict of interest withthe Company. He has no conviction for offences within the past five(5)years.Therewerenopublicsanctionorpenaltybyanyregulatorybodiesonhimduringthefinancialyear.

Heattendedallone(1)ofone(1)BoardofDirectorsmeetingsheldduringthefinancialyearended31March2018.


PROFILE OFCHIEF EXECUTIVE OFFICER

dATO’ nEOH sOOn HIOng

Dato’ Neoh Soon Hiong, a Malaysian, male, aged 62, wasappointed as the Chief Executive Officer of the Company andManaging Director of West Coast Expressway Sdn Bhd, an80%-ownedsubsidiaryoftheCompanyon17February2014.

Dato’ Neoh graduated from the Paris Graduate School ofManagement, France with a European Masters Degree inBusinessAdministration.

He was with the Public Works Department (“JKR”) for morethan 10 years before he joined PLUS Expressways Berhad asan engineer of its Maintenance Management Department in1990. In 1995, he was transferred to Metramac CorporationSdnBhdandservedasanengineeruntilhejoinedBesraya(M)SdnBhd(“BSB”)asaProjectManagerin1997.HissubsequentappointmentsincludedHeadofOperationsofBSB(1999-2000),GeneralManagerofBSBandNewPantaiExpresswaySdnBhd(“NPE”)(2001-2004),ExecutiveDirectorofBSBandNPE(2004-2006),ManagingDirectorofBSBandNPE(2006-2011)andChiefExecutiveOfficerofLebuhrayaKajang-SerembanSdnBhd(2007-2011). BSB and NPE are wholly-owned subsidiaries of RoadBuilder (M) Holdings Berhad, which in turn is a wholly-ownedsubsidiaryofIJMCorporationBerhad(“IJM”).Hewasappointedas the Chief Executive Officer of West Coast Expressway SdnBhdafterheretiredastheHeadofIJMTollDivisionin2011.Hehas more than 30 years’ experience in highway construction,concessionandoperations.

His interest inthesecuritiesoftheCompany isstatedonpage132 of this Annual Report (Statement on Directors’ and ChiefExecutiveOfficer’sInterests).

Dato’Neohhasno family relationshipwithanyotherdirectorsand/ormajorshareholdersoftheCompany.ThereisnoconflictofinterestwiththeCompany.Hehasnoconvictionforoffenceswithinthepastfive(5)years.Therewerenopublicsanctionorpenalty imposed by any regulatory bodies on him during thefinancialyear.


PROFILE OFKEY SENIOR MANAGEMENT

LyndOn ALFREd FELIx

Chief Financial Officer

Mr.Lyndon,Malaysian,male,aged44,wasappointedastheChiefFinancialOfficeroftheCompanyon17February2014andjoinedtheBoardofWestCoastExpresswaySdnBhd,an80%-ownedsubsidiaryoftheCompanyon2April2014.

HegraduatedwithaBachelorofArts(Hons)inAccounting&FinancefromMiddlesexUniversity,UnitedKingdomin1996andcompletedtheAssociationofCharteredCertifiedAccountantsprofessionalexaminationsandappointedasmemberin2001.HestartedhiscareerwithPricewaterhouseCooperswherehewasattachedtotheaudit/assurancedivisionfrom1997to2002.HethenjoinedIJMCorporationBerhad(“IJM”)andwastheHeadofInternalAuditbeforehejoinedtheCompany.Duringhiseleven(11)yearsintheIJMGroup,hegainedextensiveexperienceintheaudit,financeandaccountingfunctionsinvariousbusinessessuchasconstruction,properties,infrastructure,manufacturingandplantations.

Hehasnodirectorshipinanypubliccompaniesorlistedpubliccompanies.Hehasnofamilyrelationshipwithanyotherdirectorsand/ormajorshareholdersoftheCompany.ThereisnoconflictofinterestwiththeCompany.Hehasnoconvictionsforoffenceswithinthepastfive(5)years.Therewerenopublicsanctionorpenaltyimposedbyanyregulatorybodiesonhimduringthefinancialyear.

RAW KOOn BEng

Company secretary

Mr.Raw,Malaysian,male,aged53,wasappointedCompanySecretaryoftheCompanyon11August2010.Heisamemberof the Malaysian Institute of Certified Public Accountants and Malaysian Institute of Accountants since 1993 and 1994respectively. He has 12 years of working experience in public auditing/accounting firms, six years each in KPMG PeatMarwickandErnst&Youngrespectively.Thereafter,15yearsofworkingexperienceinpubliclistedcompanies.PriortohisappointmentasCompanySecretaryintheCompany,hewaswithIJMCorporationBerhadasaseniormanagerintheAccountsandFinanceDepartment.

Hehasnodirectorshipinanypubliccompaniesorlistedpubliccompanies.Hehasnofamilyrelationshipwithanyotherdirectorsand/ormajorshareholdersoftheCompany.ThereisnoconflictofinterestwiththeCompany.Hehasnoconvictionforoffenceswithinthepastfive(5)years.Therewerenopublicsanctionorpenaltyimposedbyanyregulatorybodiesonhimduringthefinancialyear.

LIm sHEE sHEE

senior manager, Finance and Accounts

Ms.Lim,Malaysian,female,aged32,joinedtheCompanyon6November2017asSeniorManager,FinanceandAccounts.ShegraduatedfromTunkuAbdulRahmanUniversityCollegewithanAdvancedDiplomainAccounting(FinancialAccounting)in2008.SheisaCharteredAccountantoftheMalaysianInstituteofAccountantsandaFellowMemberofAssociationofCharteredCertifiedAccountants.

Shehas9yearsofworkingexperienceinapublicaccountingfirm.PriortoherappointmentwithWCEHB,shewasemployedinBakerTillyMonteiroHengasAssociateDirectorinauditandassurancedepartment.

She has no directorship in any public companies or listed public companies. She has no family relationship with anyotherdirectorsand/ormajorshareholdersoftheCompany.ThereisnoconflictofinterestwiththeCompany.Shehasnoconvictionforoffenceswithinthepastfive(5)years.Therewerenopublicsanctionorpenaltyimposedbyanyregulatorybodiesonherduringthefinancialyear.


mEj (B) IR. gnAnAsEKARAn A/L mARIAsOOsAy

general manager

Ir.Gnanasekaran,Malaysian,male,aged57,joinedWestCoastExpresswaySdnBhd(“WCE”),an80%-ownedsubsidiaryoftheCompanyasGeneralManageron1March2014.

HeholdsaBachelor’sDegreeinEngineeringfromtheUniversityofNewSouthWales,Sydney,Australia.HestartedhiscareerintheMalaysianArmedForcesin1985andleftuponthecompletionofhiscontractin1995withtherankofMajor.

PriortojoiningWCE,hehasbeeninvolvedinvariousconstructionprojects,includingthePetronasGasProcessingPlant5&6inPaka,Terengganu,theKualaLumpurMiddleRingRoadPackage3(SeriGombakInterchange)andtheSeremban–GemasElectrifiedDoubleTrackProject.HeisamemberoftheInstitutionofEngineersMalaysiaandaProfessionalEngineerregisteredwiththeBoardofEngineersMalaysiasince1996.

He has no directorship in any public companies or listed public companies. He has no family relationship with anyotherdirectorsand/ormajorshareholdersoftheCompany.ThereisnoconflictofinterestwiththeCompany.Hehasnoconvictionforoffenceswithinthepastfive(5)years.Therewerenopublicsanctionorpenaltyimposedbyanyregulatorybodiesonhimduringthefinancialyear.

ng BAK sOng

Assistant general manager, Technical

MrNg,Malaysian,male,aged46, joinedWCEHoldingsBerhadon2January2017asanAssistantGeneralManager,TechnicalDepartment.HeholdsaBachelorofEngineeringDegreewithHonours inCivilEngineering fromUniversityPutraMalaysiaand isamemberofProjectManagement Institute.Heembarked inconstruction industrysince1993,supervising construction works of the National Sports Complex at Bukit Jalil, Selangor for the 1998 CommonwealthGames. In 2000, he further enhanced his construction career with another reputable construction organisation forseventeen(17)years,holdingvariouspositionsforprojectsinMalaysiaandtheMiddleEast,andhadpositionedhimasahands-ontechnicalprofessionalspecialisinginhighways,bridgeworksandgeo-technicaltreatmentforadversegroundconditions.Heplayedpivotalrolesinthedesign,constructionandcompletionofseveralkeyprojectsincludingtheSultanAbdulHalimMuadzamShahBridge(formerlyknownasSecondPenangBridge),theBayanLepasExpressway,wideningofthefirstPenangBridgetoadualthreecarriagewayandtheconstructionoftheRibbonWrapStructureoftheCollegeofTechnologyinDoha,Qatar.


PROFILE OF KEY SENIOR MANAGEMENT (continued)


CHAn KIm HOng

Assistant general manager, Human Resources and Administration

MsChan,Malaysian,female,aged58,joinedWestCoastExpresswaySdnBhd(“WCE”)on1December2011astheSeniorManager,HumanResourcesandAdministration inWCEbeforebeingpromoted toAssistantGeneralManager inJuly2016.ShegraduatedfromTaiwanNormalUniversityin1984withaBachelorDegreeinSocialEducation.

ShewasaSub-EditorinShinMinDailyNews,anExecutiveintheTaiwanRepresentativeOfficeinMalaysia,beforeshejoinedRoadBuilder(M)HoldingsBhd(RBHGroup)asSecretarytoanexecutivedirectorin1994.ShewaspromotedtoPropertyExecutivein1999andAssistantAdministrationManagerin2002.ShecontinuedherservicewithIJMGroupaftertheacquisitionofRBHGroupbyIJMCorporationBerhad(“IJM”)in2007.ShewastransferredtoBesraya(M)SdnBhd(BSB),awholly-ownedsubsidiaryofRBHGroupwhichinturnisawholly-ownedsubsidiaryofIJMasAssistantManagertotheHumanResourcesandAdministrationDepartmentin2010andwaspromotedasManagertothedepartmentinthefollowingyear.SheleftBSBinDecember2011.

Shehasnodirectorship inanypubliccompaniesor listedpubliccompanies.Shehasno family relationshipwithanyotherdirectorsand/ormajorshareholdersoftheCompany.ThereisnoconflictofinterestwiththeCompany.Shehasnoconvictionforoffenceswithinthepastfive(5)years.Therewerenopublicsanctionorpenaltyimposedbyanyregulatorybodiesonherduringthefinancialyear.

IR. mAzLI BIn AB. RAHmAn

senior manager, Technical

Ir.Mazli,Malaysian,male,aged51, joinedWestCoastExpresswaySdnBhd (“WCE”),an80%-ownedsubsidiaryof theCompanyon1November2013asSeniorTechnicalManager.

HeholdsaBachelordegreeinCivilEngineeringfromMarquetteUniversity,UnitedStatesofAmerica.HeisamemberoftheBoardofEngineersMalaysiaandtheInstitutionofEngineersMalaysia.

Heworkedforvariousengineeringconsultantsundertakingdesignworksforcivilandinfrastructuresince1989,aftergainingmorethan15yearsofworkexperience,heworkedasAssistantResidentEngineerfor3yearsandthereafter,ResidentEngineeruntil2013,supervisingtheconstructionoftheroads,highwaysandtheMassRapidTransit.


HWA TEE HAI

senior manager, management Information system

MrHwa,Malaysian,male,aged44, joinedWestCoastExpresswaySdnBhd (“WCE”),an80%-ownedsubsidiaryof theCompanyon1November2013asSeniorManageroftheManagementInformationSystem(MIS)Department.

HegraduatedfromUniversityPutraMalaysia(“UPM”)in1988withaBachelorDegreeinComputerScience.HecompletedhisMasterDegreeinBusinessAdministrationfromPutraBusinessSchoolofUPMinyear2014.

HestartedhiscareerasaSystemAdministrator(1998-2002)inBesraya(M)SdnBhdandNewPantaiExpresswaySdnBhd,wholly-ownedsubsidiariesofRBHGroup.Subsequently,hewaspromotedtoAssistantManager(2003-2005),Manager(2006-2008) and Senior Manager (2009-2013) in the Toll Operations and the MIS Department of the IJM CorporationBerhadMalaysiaTollDivision.HewasresponsiblefortolloperationsandmanagementinformationsystemforhighwaysinMalaysia.HewassecondedtoWCEin2013.



FINANCIALHIGHLIGHTS

Rm million

gROuP 2018 2017 2016 2015 2014

Totalassets 4,132 2,943 2,358 755 410

Shareholders’fund 699 686 650 623 127

Netcurrentasset/(liabilities) 944 957 1,143 444 (102)

Revenue 868 817 529 19 14

Profit/(loss)beforetax 17 43 30 41 (33)

Earnings/(loss)pershare(sen) 1 4 3 5 (6)

Netassetpershare(RM) 0.70 0.68 0.65 0.62 0.22

Returnontotalassets 0.4% 1.2% 1.2% 5.2% (8.2%)

Returnonequity 2.2% 5.1% 4.3% 6.3% (26.5%)

Gearingratio 3.28 2.36 1.72 0.01 0.96

COmPAny

Totalassets 718 704 721 592 292

Shareholders’fund 587 600 584 580 120

Netcurrentasset/(liabilities) 327 374 420 416 (136)

(Loss)/profitbeforetax (12) 19 3 2 (92)

Returnontotalassets (1.8%) 2.3% 0.5% 0.2% (31.4%)

Returnonequity (2.2%) 2.7% 0.6% 0.3% (76.6%)

Gearingratio 0.00 0.00 0.00 0.00 0.93


MANAGEMENT DISCUSSIONAND ANALYSIS

The Group achieved revenue of RM868 million compared to RM817 million in the previous financial year. The increase is largely due to higher construction activities of the West Coast Expressway (the Project) recognised pursuant to IC Interpretation 12 – Service Concession Arrangements.

The Group’s pre-tax profit decreased to RM17.4 million from RM42.5 million in the previous financial year. The decrease is mainly due to a one-off impairment on long outstanding amounts owing by a former associate and lower distribution income from investment in unit trust. The Group is of the view that it was prudent to make an impairment on the long outstanding amounts owing by a former associate whilst the Group is still actively pursuing the recovery of this amount. On the other hand, lower distribution income earned from investment in unit trust is mainly due to utilisation of funds for the capital expenditure in relation to the Project.

PROjECT FInAnCIng

The Group’s 80%-owned subsidiary WestCoast Expressway Sdn Bhd (WCESB) is theconcessionairefortheProject,a233kmhighwaythatrunsfromBantinginSelangortoTaipinginPerak.

The Project is part financed via borrowings,including the Government support loan ofRM2,240 million, syndicated term loans fromlicensedfinancialinstitutionsofRM1,500millionand the issuance of debt securities, SukukMurabahah Bond of RM1,000 million. To date,WCESBhasdrawndownRM1,510.0millionandRM672.8millionfromtheGSLandTermLoansfacilities respectively. The Sukuk Bonds wereissuedenblocinAugust2015.

In addition, the Project is also funded byWCESB’sequitycontributionbyitsshareholders,via the issuanceofsharecapital, subordinatedadvances and issuance of RedeemableUnsecured Murabahah Loan Stocks (“RUMS”).At theendof thefinancialyear,WCESBraisedRM138.3millionfromtheissuanceofRUMS.

Theutilisationoftheabovefacilitiesarerequiredtobemadeinproportiontotheamountfinanced.Anydrawdowninexcessofutilisationareplacedin licensed Islamic financial institutions inMalaysia,earningprofit/interest.

Package 5 - Kapar Interchange

Package 8 - Bridge and pavement works in progress


PROjECT dEVELOPmEnT

The Project is divided into the following eleven (11)packages:

Package1 BantingI/C–SouthKlangValleyExpressway(SKVE)I/C

Package2 SKVEI/C–ShahAlamExpressway(KESAS)I/C

Package3 KESASI/C–FederalHighwayRoute2I/C

Package4 FederalHighwayRoute2I/C–NewNorthKlangStraitsBypassI/C

Package5 NewNorthKlangStraitsBypassI/C–KaparI/C

Package6 KaparI/C–AssamJawaI/C

Package7 AssamJawaI/C–TanjungKarangI/C

Package8 HutanMelintangI/C–TelukIntanI/C

Package9 KampungLekirI/C–ChangkatCerminI/C

Package10 ChangkatCerminI/C–BeruasI/C

Package11 BeruasI/C–TaipingSouthI/C

All packages have been awarded, and are in progress,except for Package 7 Part 2 which is pending theGovernment’sgoahead.Weexpectthis instructiontobeforthcoming soon. Sectional tolling involving Packages4 and 5 in Selangor and Packages 8 and 9 in Perak areexpectedtocommence in thefirstquarterof2019.WCEwillbeequippedforfullRFIDbasedtollcollectionsystem,thoughsmarttagandtouch&gocardusagewillstillbecateredfor.

MANAGEMENT DISCUSSION AND ANALYSIS (continued)

The Rest and Service Areas (RSA) will be built as theexpressway is opened up gradually, beginning withservice/fuel stations, to provide a unique experience totheexpresswayusersintermsofamenities,comfortandservice.

During the financial year, the Group incurred additionalRM1,020.7 million in Infrastructure DevelopmentExpenditure(IDE)andcumulativelyupto31March2018,theGrouphadincurredatotalIDEofRM2,612.6million.

Quality management system (IsO 9001) and Environmental management system (IsO 14001)

ToensurethattheGroupcontinuestomaintainarelevant,updatedandefficientsystem,theGrouphassuccessfullyundertaken the transition of its ISO 9001:2008 QualityManagement System by Sirim QAS International inJuly 2013 to the upgraded version ISO 9001:2015 on26 December 2017. The high-level structure andintegrationofqualityandriskinthenewISO9001:2015allows the leadership team to make fast and better-informed decisions which complement the overallcompanystrategy.

The Group has also successfully upgraded the ISO14001:2008certifiedinNovember2015toISO14001:2015on27February2018.Thenewsystemhasgreaterfocusonleadershipandproactiveinitiativestowardsenvironmentalresponsibilities. This will lead the Group to mitigateadverse environmental impact and strive for continualimprovementinitsday-to-dayactivities.

Package 9 - Bridge works in progress at Sitiawan North spur road


The Group is exposed to certain anticipated or knownrisks that may have material effect on our operations,performance, financial condition and liquidity. TheserisksandourstrategiestomitigatethemarestatedintheStatementonRiskManagementand InternalControlonpage38ofthisAnnualReport.

PROPERTy dEVELOPmEnT – BAndAR RImBAyu

The property market in Malaysia remained challengingas it continued to be weighed down by weak consumersentimentsduetoeconomicuncertainties,volatilityintheMalaysianRinggit,risingcostoflivingandbanks’stringentlendingrules.

The Property development activities are carried out bytheGroup’s40%-ownedassociate,RadiantPillarSdnBhdanditssubsidiary(“RPSBGroup”).Despitetheabove,theGroup’sshareofresultsfromRPSBGrouphasincreasedby15%fromRM24.7millioninthepreviousfinancialyeartoRM28.4millionincurrentfinancialyear,mainlyduetohighersalesrecordedfromongoingandcompletedphasesinthecurrentfinancialyear.

Moving forward, new launches in the pipeline includeaffordable terrace houses, targeting first time homebuyersandyoungworkingadults.RPSBGroupisexpectedtomaintainitsperformanceforthecomingfinancialyearonthebackoftheunbilledsalesandsatisfactoryresponsefromnewlaunches.

dIVIdEnd POLICy

The Board will deliberate a dividend policy after thecompletionoftheWCEProjectandwhenfutureoperatingcashflowscanbemoreclearlydetermined.

APPRECIATIOn

TherearemanypartieswhohavehelpedtheGroupalonginitsjourneysofarandwewouldliketoextendourheartfeltappreciationandgratitudetoourshareholders,boardofdirectors, lenders, contractors,businessassociates,andstafffortheircontinuoussupportandcommitmenttotheGroup. We also wish to extend our sincere gratitude toKementerian Kerja Raya, Lembaga Lebuhraya Malaysia,KementerianKewanganMalaysia,SecuritiesCommission,Bursa Malaysia Securities Berhad and all relevantauthoritiesfortheirsupport.

Package 3 - SAE Interchange, system interchange connecting KESAS

Package 9 - Bridge across FT005


The Board of Directors (“Board”) of WCE Holdings Berhad (“WCEHB” or “the Company”) recognises the importance of good corporate governance and fully supports the principles and recommendations as set out in the Malaysian Code on Corporate Governance 2017 (“Code”). The Board is therefore, committed towards instilling a high standard of corporate governance throughout the Group as a fundamental part of discharging its responsibility to enhance shareholders’ value and the financial performance of the Group. The Board will continue to apply principles and best practices as set out in the Code and evaluate the status of the Group’s practices and procedures from time to time.

This statement provides an overview of the Group’s application of the principles of the Code pursuant to paragraph 15.25 of Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements (“Listing Requirements”).

PRInCIPLE A: BOARd LEAdERsHIP And EFFECTIVEnEss

(1) Board Responsibilities

TheBoardisfullyresponsiblefortheGroup’soverallstrategicplansonbusinessperformance,overseeingtheproperconductofbusiness,successionplanning,risk management, shareholders’ communication,internalcontrol,management informationsystemsand statutory matters, while the management isaccountable for the execution of the expressedpolicies and attainment of the Group’s expressedcorporateobjectives.

The duties and responsibilities of the Board asoutlined in the Board Charter include amongstothers,thefollowing:-

(a) promoteagoodcorporategovernanceculturewithin the Group which reinforces ethical,prudentandprofessionalbehavior;

(b) review and adopt the overall strategic plansandprogrammesfortheGroupensuringthatthe strategic plan supports long term valuecreationandincludesstrategiesoneconomic,environmental and social considerationsunderpinningsustainability;

(c) overseeandevaluatetheconductofbusinessof the Group which includes supervision andassessmentofManagement’sperformancetodetermine whether the business is properlybeingmanaged;

(d) understand the principal risks of the Group,settheriskappetitewithinwhichManagementis expected to operate and ensure there isan appropriate risk management frameworkto identify, analyse, manage and monitorsignificantfinancialandnon-financialrisks;

(e) ensurethereisasoundframeworkforinternalcontrolsandriskmanagement;

(f) ensure the senior management has thenecessary skills and expertise, and thereare measure in place to provide for theorderly succession of the Board and seniormanagement;

(g) ensuretheCompanyhas inplaceproceduresto enable effective communication withstakeholders;and

(h) ensure the adequacy and the integrity of thefinancial and non-financial reporting of theGroup.

CORPORATE GOVERNANCEOVERVIEW STATEMENT


In all Board meetings, major operating divisionsreport their respective progress, financialachievement, performance compared to approvedbudget, business outlook and challenges includingproposedresolutionsthereon.

Aspartofitsefforttoensuretheeffectivedischargeof the Board’s duties, the Board has delegatedcertain functions to the following Committeeswith each operating with clearly defined termsof reference that provide independent oversightof the Management and to ensure that there areappropriatechecksandbalances:

(a) AuditCommittee

(b) NominationCommittee

(c) RemunerationCommittee

(d) ExecutiveCommittee

TheChairmanoftherespectiveCommitteesreportsto the Board on the outcome of the Committeemeeting and for action by the Board whereappropriate.

(2) Board Charter

The Board is guided by the Board Charter whichoutlinesthedutiesandresponsibilitiesandmattersreserved for the Board in discharging their duties.The Board Charter was updated on 22 February2018 and is available on the Company’s website atwww.wcehb.com.my.

TheBoardCharterwasestablished toensure thatall Board members are aware of their fiduciaryduties and responsibilities, various legislationsand regulations affecting their conduct, the needto safeguard the interests of the shareholders,customersandotherstakeholdersandthatahighstandard of corporate governance is applied inall their dealings on behalf of the Company. TheBoardCharteralsoservesasasourceofreferenceand primary induction literature, providinginsights toprospectiveboardmembersandseniormanagement.

The Board Charter clearly sets out the division ofresponsibility and powers of duties between theBoard and management, the different committeesestablishedbytheBoardandbetweentheChairmanandtheChiefExecutiveOfficer.

(3) Board Composition

TheBoardcurrentlyhassevenmemberscomprisingfourIndependentNon-ExecutiveDirectorsandthreeNon-IndependentNon-ExecutiveDirectors.

During the financial year, on 23 November 2017,Dato’ Abdul Hamid bin Mustapha resigned asChairman and Director of the Company havingattained 12-year tenure as a Director of theCompany.TheBoardunanimouslyappointedDatukIr.HamzahbinHasan,anIndependentNon-ExecutiveDirectorasChairmanoftheBoardtosucceedDato’Abdul Hamid bin Mustapha. The Company notedthe resignation of Mr U Chin Wei (IndependentNon-ExecutiveDirector)andTanSriPangTeeChew(Non-independent Non-Executive Director) andwelcometheappointmentofDatukWiraHj.Hamzabin Taib and Mr Tan Chor Teck as IndependentNon-Executive Directors and Mr Vuitton Pang HeeCheahasNon-IndependentNon-ExecutiveDirectoroftheCompany.

The Board takes this opportunity to thank alloutgoing directors for their outstanding services.Throughout the financial year, the composition ofthe independent non-executive directors were notbelow50%.

The Senior Independent Non-Executive Director isDatukOhChongPengwhowillattendtoanyqueryorconcernrelatingtheGroupwheretheChairmanandtheChiefExecutiveOfficerareconflicted.

Independent Non-Executive Directors provides thenecessary balance of power and authority to theBoardwithamixofindustry-specificknowledgeandbroad business and commercial experience. Theyensure thatallproposalsbymanagementare fullydeliberatedandexaminedaftertakingintoaccountthe interestofshareholdersandstakeholders.TheIndependent Non-Executive Directors play crucialroles inprovidingunbiasedandindependentviews,adviceandjudgmenttotheBoardtosafeguardtheinterestofminorityshareholders.

TheroleoftheIndependentNon-ExecutiveChairmanandChiefExecutiveOfficerisdistinctandseparatedto ensure balance of power and authority. TheIndependentNon-ExecutiveChairmanisresponsiblefor the leadership, effectiveness, conduct andgovernanceof theBoard,whiletheChiefExecutiveOfficerhasoverallresponsibility for theday-to-daymanagement of the business and implementationof the Board’s policies and decisions. The ChiefExecutiveOfficer isalsoresponsible toensuredueexecutionofthestrategicgoals,effectiveoperationwithintheGroup,andtoexplain,clarifyandinformtheBoardonmatterspertainingtotheGroup.


(4) Board diversity

TheDirectorshaveadiversesetofskills,experienceandknowledgenecessarytogoverntheGroup.TheDirectorsareprofessionalsinthefieldofengineering,finance,accounting,economic,legal,manufacturingand experienced senior public administrators.Together,theybringawiderangeofcompetencies,capabilities, technical skills and relevant businessexperience to ensure that the Group continues tobe a competitive leader with a strong reputationfor technical and professional competence. Inevaluating candidates for appointment to theBoard, the Nomination Committee and the Boardwill always evaluate and match the criteria of thecandidate based on experience, skill, competency,knowledge, potential contribution and boardroomdiversity(includinggender,ethnicityandage).

The Board consists of qualified individuals withdiverse set of skills, experience and knowledge togoverntheGroup.TheNon-ExecutiveDirectorsareprofessionals in the field of engineering, finance,accounting, economics, legal, manufacturing andseniorpublicadministrators.

TheprofilesoftheDirectorsaresetoutonpages4to7ofthisAnnualReport.Suchinformationisalsoavailable on the Company’s website, www.wcehb.com.my.

TheBoardismindfulofachievinggenderbalanceasrecommendedbytheCode.Inthisregard,sourcingfemalecandidates isalwaysan integralpartof therecruitmentfornewdirectorsfortheCompany.

(5) Code of Conduct

The Board has made a commitment to create acorporate culture within the Group to operate thebusiness in an ethical manner and to uphold ahigh standard of professionalism and exemplarycorporateconduct.TheCodeofEthicsandConductwhich sets out the principles and standards ofbusiness ethics and conduct of the Group hasbeen adopted and is applicable to all Directorsand employees of the Group. It was reviewed on22February2018andisavailableontheCompany’swebsiteatwww.wcehb.com.my.

(6) Whistle Blowing Policy

The Company recognises that any genuinecommitment of detecting and preventing actual orsuspected unethical, unlawful, illegal, wrongful orotherimproperconductmustincludeamechanismwhereby employees can report his/her concernsfreely without fear, reprisal or intimidation.Accordingly, the Company has adopted a WhistleBlowingPolicywhichhasbeendisseminated toallemployees.

The Code of Ethics and Conduct and WhistleBlowing Policy was reviewed on 22 February2018 and is available on the Company’s website,www.wcehb.com.my.

(7) Board meetings and supply of Information to the Board

Boardmeetingsschedulearedeterminedoneyearahead to enable Directors to fit their schedule tothe Board meeting dates. The Board conduct atleast five regular scheduled meetings annually,with additional meetings convened as and whennecessary, to consider all matters relating to theoverallcontrol,businessperformanceandstrategyoftheCompany.

In fostering the commitment of the Board that theDirectors shall devote sufficient time to carry outtheir responsibilities, the Directors are requiredto notify the Chairman before accepting any newdirectorshipandtoindicatethetimeexpectedtobespentonthenewappointment.TheChairmanshallalsonotifytheBoardifhehasanynewdirectorshiporsignificantcommitmentsoutsidetheCompany.AlltheDirectorsholdnotmorethanfivedirectorshipsinpubliclistedcompanies.

CORPORATE GOVERNANCE OVERVIEW STATEMENT (continued)

Package 4 - Federal Road 2 Interchange


The Board is satisfied with the level of timecommitmentgivenbytheDirectorstowardsfulfillingtheir roles and responsibilities as Directors ofthe Company. During the financial year ended31March2018,sixBoardmeetingswereheldandtheattendancerecordoftheDirectorsweresatisfactoryasevidencedinthetablesetoutbelow:

directors

number of meetings attended

DatukIr.HamzahbinHasan(Chairman)

5outof6

DatukOhChongPeng 6outof6

TangKingHua 6outof6

LeeChunFai 5outof6

TanSriPangTeeChew(resignedon23February2018)

3outof5

UChinWei(resignedon23November2017)

4outof4

Dato’AbdulHamidbinMustapha(resignedon23November2017)

4outof4

DatukWiraHjHamzabinTaib(appointedon23November2017)

2outof2

VuittonPangHeeCheah(appointedon23February2018)

1outof1

TanChorTeck(appointedon26February2018)

1outof1

All the Directors complied with the minimumrequirementsontheattendanceatBoardmeetingsasstipulated in theListingRequirementsofBursaSecurities.IntheintervalsbetweenBoardmeetings,for any matters requiring Board’s decisions, theBoard’s approvals are obtained through circularresolutions.TheresolutionspassedbywayofsuchcircularresolutionsarethennotedatthenextBoardmeeting.

A fullagendaof themeetingandallBoardpapersare distributed on a timely manner prior to BoardMeetings to enable the Directors to review andconsider the agenda items to be discussed at themeeting and where necessary, to obtain furtherexplanations inorder tobe fullybriefedbefore themeeting.TheBoardpapersincludereportsrelevantto the issues of the meeting, covering the areasof strategic, financial, operational and regulatorycompliancematters.

In discharging their duties, the Directors haveaccess to all information within the Company andto the advice and services of senior managementstaff and Company Secretary. If necessary, theDirectorsmayseekindependentprofessionaladviceandinformationinfurtheranceoftheirdutiesattheCompany’s expense, so as to ensure the Directorsare able to make independent and informeddecisions. Any such request is presented to theBoardforapproval.

Senior management staff, as well as advisers andprofessionals appointed on corporate proposals,maybeinvitedtoattendBoardmeetingstoprovidetheBoardwiththeirviewsandexplanationsandtofurnishclarificationonissuesthatmayberaisedbytheDirectors.

The Directors are notified of any corporateannouncements released to Bursa Securities.The minutes of previous Board meeting werecirculatedtoallDirectorsatleastfivedaysfortheirperusal/comment or to seek clarification beforebeingincludedintheBoardpapers.

The Board papers were then circulated to allDirectorsatleastfivebusinessdaysbeforetheBoardmeetingforconfirmationatthecommencementoftheBoardmeetingasacorrectrecordofproceedingsofthepreviousBoardmeeting.

Package 9 - Bridge works in progress at Kg. Lekir


TheCompanySecretaryplaysanimportantadvisoryrole and is a source of information and advice tothe Board and its Committees on issues relatingto compliance with laws, rules, regulations, boardpolicies and procedures and compliance with therelevant regulatory requirements affecting theCompany and Group. The Board is supported by asuitablyqualifiedandcompetentCompanySecretarywhoisamemberofaprofessionalbody.

Every Board member has ready and unrestrictedaccess to the advice and services of the CompanySecretarywhoiscapableofcarryingoutthedutiesand responsibilities, to which the post entails. TherolesandresponsibilitiesoftheCompanySecretaryincludethefollowing:

(a) advise the Board and management ongovernanceissues;

(b) ensure compliance of listing and relatedstatutoryobligations;

(c) attend Board, Committees and generalmeetings,andensuretheproperrecordingofminutes;

(d) ensure proper upkeep of statutory registersandrecords;

(e) assist Chairman in the preparation for andconductofmeetings;

(f) assist Chairman in determining the annualBoard plan and the administration of otherstrategicissues;

(g) assist the induction of new directors, andcontinuously update the Board on changesto listingrules,otherrelated legislationsandregulations;and

(h) serve as a focal point for stakeholders’communicationandengagementoncorporategovernanceissues.

TheCompanySecretariesensuresthatdeliberationsat Board and Board Committee meetings aredocumented and subsequently communicated totheManagementforappropriateactions.TheBoardis updated by the Company Secretaries on thefollow-upof itsdecisionsandrecommendationsbytheManagement.

(8) nomination Committee

The Nomination Committee comprises twoIndependent Non-Executive Directors and oneNon-Independent Non-Executive Director.During the financial year ended 31 March 2018,two meetings were held and attended by all themembers. The details of the members are asfollows:-

members designation

DatukWiraHj.HamzabinTaib(Chairman)(appointedon23November2017)

IndependentNon-ExecutiveDirector

DatukOhChongPeng SeniorIndependentNon-ExecutiveDirector

TangKingHua Non-IndependentNon-ExecutiveDirector





ThetermsofreferenceoftheNominationCommitteewasreviewedon22February2018and isavailableontheCompany’swebsite,www.wcehb.com.my.

The Nomination Committee is responsiblefor making recommendations to the Board ofsuitable candidates for appointment as Director,after which the Secretary ensures that allappointmentsareproperlymadeandall legalandregulatory compliance are met. In making theserecommendations, the Nomination Committeeevaluate and match the criteria of the candidatebasedonexperience,skill,competency,knowledge,potential contribution and boardroom diversity(including gender, ethnicity and age). In thecase of candidates proposed for appointment asIndependentNon-ExecutiveDirectors,theproposedcandidates will be required to confirm complianceto the criteria of an independent director asprescribed in the Listing Requirements prior torecommendingtotheBoardforapproval.

The re-appointment of an Independent Directorwhohasservedforacumulativetermofmorethantwelveyears,inordertocontinueservinginthesamecapacity,willrequiretheBoardofDirectorstojustify,recommendandseekshareholders’approvalforthatindividualtocontinueassuch,onayearlybasis.



Duringthefinancialyear,theNominationCommittee:

(a) assessedanddeliberatedof theappointmentof two proposed candidates for independentnon-executive director and one proposedcandidate for non-independent non-executivedirector. The Committee were satisfied thatthesecandidatesmatchedtherequiredcriteriaof experience, skill, competency, knowledge,potentialcontributionandboardroomdiversityand had recommended their appointment totheBoard;and

(b) conducted an annual assessment of theDirectorsandtheeffectivenessoftheBoardasawhole,Boardcommitteesandthecontributionof each individual Director and the ChiefExecutiveOfficer.BoardevaluationcomprisesSelf&PeerAssessmentandIndependenceofIndependentDirector.Theassessmentcriteriaincludecontributionstointeraction,rolesandduties, knowledge and integrity, governanceandriskmanagement.Theannualassessmentalso covers assessment of required mix ofskills,experienceandotherqualitiesincludingcorecompetencieswhichtheDirectorsshouldbring to the Board and identified areas forimprovement.Allassessmentsandevaluationscarried out by the Nomination Committee indischarging its functions have been properlydocumented.

(9) Appointment to the Board/Reelection of directors

The proposed appointment of a new Director is amatter for consideration and decision by the fullBoard, at the recommendation of the NominationCommittee. During the financial year, the BoardappointedDatukWiraHj.HamzabinTaibandMrTanChorTeckas IndependentNon-ExecutiveDirectorsandMrVuittonPangHeeCheahasNon-IndependentNon-ExecutiveDirectoroftheCompany.

InaccordancewiththeConstitutionoftheCompany,all Directors who are newly appointed to theBoard, are subject to re-election by shareholderssubsequent to their appointment at the immediateAnnual General Meeting. The Constitution alsoprovide that one-third of the Directors shall retirefrom office and be eligible for re-election at everyAnnualGeneralMeeting.AllDirectorsshallsubmitthemselvesforre-electionatleastonceeverythreeyears.

The re-election of each Director is voted onseparately.Toassistshareholdersintheirdecision,sufficient information, such as personal profile,meetings’attendanceandtheshareholdingsofeachDirector standing for re-election, are furnished inthisAnnualReport.

(10) directors’ Training and Continuing Education Programme

All the Directors have attended the MandatoryAccreditation Programme prescribed by BursaSecurities.TheCompanyisawareoftheimportanceof continuous training for its Directors to enablethemtoeffectivelydischargetheirdutiesandsustainactive participation in the Board deliberationsand will continuously evaluate and determine thetrainingneedsofitsDirectors.

The Directors are also aware of their duty tocontinuously update their knowledge and enhancetheirskillsthroughappropriatecontinuingeducationprogrammes.Theyareprovidedwiththeopportunity,and are encouraged, to attend training to keepthemselves updated on relevant new legislation,financialreportingrequirements,bestpracticesandchangingcommercialandotherrisks.

AlltheDirectorshaveattendedatleastonetrainingsession during the financial year ended 31 March2018.Someofthesetrainingprogrammes,seminarsorforumareasfollows:

1. GlobalMegatrendsandGameChangers,

2. ValueCreation&BusinessPartnering,

3. GlobalTransformationForum2017,

4. 20thAsianInvestmentConference2017,

5. CyberintheBoardroom:TheFirstPlacetoAddressCyberSecurityRisk,

6. TheFutureofFintech/DigitalDisruption,

7. RelatedPartyTransactions–ImplicationtoDirectorsandManagement,

8. KeyChangestotheMalaysianCodeonCorporateGovernanceIssuedin2017,

9. HowtoEngageandEnthuseBeyondCompliancewithSustainability,

10. InvestMalaysia2018,

11. TalenttoValueWorkshop,

12. WorldCapitalMarketsSymposium,

13. MCCGReporting&CGGuide,and

14. TheChangingRoleofCompany’sBoard&ItsMembersintheWakeoftheNewCGCode.

TheCompanySecretaryhascirculatedtherelevantguidelinesonstatutoryandregulatoryrequirementstotheBoardforreference.TheexternalauditorshavealsobriefedtheBoardmembersonthechangestothe Malaysian Financial Reporting Standards thataffecttheCompanyandGroup’sfinancialstatementsduringtheyear.


(11) directors’ and senior management Remuneration Policy and Procedure

The Board believes in a remuneration policy thatfairly supports Directors’ responsibilities andfiduciarydutiesinsteeringtheGrouptoachieveitslong term objectives and enhance shareholders’value.

The Board’s objective this respect is to offercompetitive remuneration packages in order toattract,developandretaindirectorsofsuchcaliberto provide the necessary skills and experienceto commensurate with the responsibilities of aneffectiveBoard.

Remuneration Committee is primarily responsibleforrecommendingthepolicyandrewardframeworkofdirectors’remuneration,termsandremunerationchief executive officer and senior management,totheBoardforapproval inordertoalignwiththebusiness strategy and long term objectives of theCompany.

The remuneration of chief executive officer andsenior management will be reviewed annually toensure that the remuneration package remainssufficiently attractive to attract and retain relevantexperience and expertise to govern the Groupeffectively.

The determination of the remuneration of non-executivedirectorsareamatterfortheBoardasawholefollowingtherelevantrecommendationmadeby theRemunerationCommittee,with theDirectorconcerned abstaining from deliberation and votingon his own remuneration. The remuneration ofnon-executivedirectorscomprisesofdirector’s feeand other emoluments which are determined bythe Board. The remuneration of the non-executivedirectors reflects the contribution and level ofresponsibilities undertaken by the particularnon-executivedirector.Director’sremunerationwillbe subject to the approval of shareholders at theAnnualGeneralMeeting.

The Remuneration Committee comprises threeIndependent Non-Executive Directors and oneNon-IndependentNon-ExecutiveDirector.

members designation

DatukOhChongPeng(Chairman)(appointedon23November2017)

SeniorIndependentNon-ExecutiveDirector

DatukIrHamzahbinHasan(appointedon23November2017)


LeeChunFai Non-IndependentNon-ExecutiveDirector







During the financial year ended 31 March 2018,onemeetingwasheldandwasattendedbyall themembers, except for Mr Tan Chor Teck as he wasappointedafterthedateofthemeeting.

The terms of reference of the RemunerationCommitteewasupdatedon22February2018andisavailableontheCompany’swebsite,www.wcehb.com.my.


Package 3 - Preparation of structure works for Sg. Klang bridge


ThedetailsoftheDirectors’remunerationintheCompanyandGroupforthefinancialyearended31March2018areasfollows:

FeesRm

salary, Bonus and

Performance Incentive

Benefits- in-kind

Rm

meeting Allowance

RmTotal

Rm

directors of the Company:

DatukIrHamzahbinHasan 113,525 - - 6,000 119,525

DatukOhChongPeng 160,900 - - 7,200 168,100

TangKingHua 124,000 - - 7,200 131,200

LeeChunFai 101,000 - - 6,200 107,200

DatukWiraHj.HamzabinTaib(appointedon23November207)

44,800 - - 2,200 47,000

VuittonPangHeeCheah(appointedon23February2018)

8,500 - - 1,200 9,700


11,160 - - 1,200 12,360

Dato’AbdulHamidbunMustapha(resignedon23November2017)

123,825 - - 5,000 128,825


91,000 - - 5,000 96,000

TanSriPangTeeChew(resignedon23February2018)

76,500 - - 6,000 82,500

855,210 - - 47,200 902,410

directors of subsidiary Companies:

TangKingHua - - - 1,000 1,000

DatukIrHamzahbinHasan - - 23,950 1,000 24,950

Dato’DavidFrederickWilson - - - 1,000 1,000

Dato’NeohSoonHiong - 2,114,268 23,950 - 2,138,218

855,210 2,114,268 47,900 50,200 3,067,578

DetailsoftheremunerationofthetopfiveseniormanagementstaffoftheCompanyandGroup(includingsalary,benefits-in-kindandotheremoluments)duringthefinancialyearended31March2018aredisclosedonanaggregatebasisandineachsuccessivebandofRM50,000asfollows:

Range of remuneration number of top 5 senior management staff

RM700,001toRM750,000 1

RM450,001toRM500,000 1

RM250,001toRM300,000 1

RM200,001toRM250,000 2


(12) Executive Committee

The Executive Committee consists of the directorsand senior management staff of the Group. TheExecutive Committee shall preferably meet onquarterly basis or whenever deemed necessary toreview the performance of the Group’s operatingdivisions.

During the financial year ended 31 March 2018,four meetings were held which were attended bythemembersof theCommittee.Thedetailsof themembersareasfollows:

members designation

Dato’NeohSoonHiong(Chairman)

ChiefExecutiveOfficer

LyndonAlfredFelix ChiefFinancialOfficer

TangKingHua Non-IndependentNon-ExecutiveDirector

ThetermsofreferenceoftheExecutiveCommitteewasreviewedon22February2018and isavailableontheCompany’swebsite,www.wcehb.com.my.

PRInCIPLE B: EFFECTIVE AudIT And RIsK mAnAgEmEnT

(1) Financial Reporting

TheBoardisresponsibletoensurethattheannualfinancialstatementsandquarterlyannouncementsof results of the Group presents a fair, balancedandmeaningfulassessmentoftheGroup’sfinancialposition, performance and prospects. The Boardensures that the Group’s financial statements aredrawn up in accordance with the provisions of theCompanies Act 2016 (“Act”) and the applicableapprovedaccountingstandardsinMalaysia.

The Board is assisted by the Audit Committee tooversee the financial reporting processes andthe quality of the financial reporting of the Group.The Audit Committee reviews and scrutinises theinformation of the Group’s annual and quarterlyfinancialstatementsintermsoftheoverallaccuracy,adequacy and completeness of disclosure andensuring the Group’s financial statements complywithapplicablefinancialreportingstandards.

The Statement of Responsibility by Directors inrespect of the preparation of the annual auditedfinancialstatementsoftheCompanyandtheGroupissetoutonpage44ofthisAnnualReport.

(2) Audit Committee

The Group’s financial reporting, audit, riskmanagement and internal control system arereviewed by theAuditCommitteewhichcomprisesfour Independent Non-Executive Directorsand oneNon-IndependentNon-ExecutiveDirector.TheAuditCommitteeischairedbyDatukOhChongPengandothermembersoftheAuditCommitteeareDatukIr.HamzahbinHasan,DatukWiraHj.HamzabinTaib,TanChorTeckandTangKingHua.

The composition, attendance of meeting andsummary of the activities carried out by the AuditCommitteeduringthefinancialyeararedisclosedintheAuditCommitteeReportonpages40to43ofthisAnnualreport.TheactivitiesoftheAuditCommitteeare governed by the terms of reference that isapprovedbytheBoard.

TheAuditCommitteemeetsnofewerthanfivetimesa year. During the financial year ended 31 March2018,atotaloffiveAuditCommitteemeetingswereheld.

AuditCommitteemeetingsisalwaysheldbeforetheBoard’s meeting to ensure that all critical issueshighlighted can be brought to the attention of theBoardonatimelybasis.TheChairmanoftheAuditCommitteewillreporttotheBoardontheoutcomeoftheAuditCommitteemeetingandforactionbytheBoardwhereappropriate.

The Audit Committee meets with the Group’sexternalauditorstoreviewthescopeandadequacyof the audit processes, the annual financialstatements and their audit findings. In line withthe good corporate governance practices, theAudit Committee also meets with the externalauditorsatleasttwiceayeartodiscussauditplans,audit findings and the financial statements of theCompany. These meetings are held without thepresenceoftheChiefExecutiveOfficerandseniormanagement.TheAuditCommitteealsomeetswiththeexternalauditorswheneveritdeemsnecessary.

ThetermsofreferenceoftheAuditCommitteewasupdatedon22February2018andisavailableontheCompany’swebsite,www.wcehb.com.my.



(3) External Auditors

Onanannualbasis,theAuditCommitteewillreviewthe suitability and independence of the externalauditors. The Audit Committee would also reviewthe provision of non-audit services by the externalauditors and noted the following for the financialyearended31March2018:

Audit Fees

Rm’000

non-Audit Fees

Rm’000Total

Rm’000

ByCompany 147 65 212

BySubsidiaries 120 20 140

Total 267 85 352

TheAuditCommitteehasobtainedwrittenassurancefrom the external auditor that they were, and hadbeen, independent throughout the conduct of theauditengagementinaccordancewiththetermsofallrelevantprofessionalandregulatoryrequirements.

The Audit Committee is satisfied with thecompetence and independence of the externalauditorsandhadrecommendedthere-appointmentoftheexternalauditorstotheshareholdersattheAnnualGeneralMeeting.TheexternalauditorsareinvitedtoattendtheAnnualGeneralMeetingoftheCompanyandareavailabletoanswershareholders’questionsonthematterswithregardtotheaudit,itspreparationandcontentoftheauditreport.

(4) Risk management and Internal Control

The Board acknowledges its responsibilities formaintaining a reliable system of internal controlswithintheGroupwhichcoversthefinancialcontrols,the operational and compliance controls andrisks management. The internal control system isdesignedtomeettheGroup’sneedsandtomanagerisks.Thisisacontinuingprocesswhichincludedriskassessments,internalcontrolsreviewsandinternalauditchecksonallcompanieswithintheGroup.ThiswillensurethattheCompanyandGroup’sassetsaresafeguardedtopreserveshareholders’investment.

The Audit Committee is entrusted to provideadvice and assistance to the Board in fulfilling itsstatutory and fiduciary responsibilities relating tothe Company and Group’s internal audit functions,risk management and compliance systems andpractices, financial statements, accounting andcontrolsystemsandmatters thatmaysignificantlyimpact the financial condition or affairs of thebusiness.

The Statement on Risk Management and InternalControl,whichprovidesanoverviewof thestateofriskmanagementandinternalcontrolandprocesseswithintheGroup,issetoutonpage38to39ofthisAnnualReport.

(5) Internal Audit Function

The Board has an overall responsibility formaintainingasoundsystemof internalcontrols tosafeguardshareholders’investment.Asthesystemofinternalcontrolsaredesignedtomitigateratherthan eliminate the likelihood of error or fraud, thesystem can only provide reasonable assuranceagainstmaterialmisstatementorloss.

TheCompanyandGroup’sinternalauditservicewasoutsourced to an independent professional serviceprovider.Theinternalauditserviceperformsregularreviews of business processes, appraisal on theeffectivenessofgovernance,riskmanagementandinternalcontrolsprocessesandreportsregularlytotheAuditCommittee.Theinternalauditengagementisfocusedonareasofpriorityaccordingtotheirriskassessmentandinaccordancewiththeannualauditplans approved by the Audit Committee. The AuditCommitteereviewsandapprovestheinternalauditplan on an annual basis. Areas of improvementas highlighted by the internal audit service wereimplementedbymanagement.


PRInCIPLE C: InTEgRITy In CORPORATE REPORTIng And mEAnIngFuL RELATIOnsHIP WITH sTAKEHOLdERs

(1) Effective Communication with stakeholders

The Board is aware of the need to establishcorporate disclosure policies and procedures toenable a comprehensive, accurate and timelydisclosures relating to the Company, to theregulators, shareholders and stakeholders. TheCompany has identified personnel authorisedand responsible to approve and disclose materialinformation to shareholders and stakeholders toensure compliance with the Listing Requirements.TheBoardhasdelegatedtheauthority to theChiefExecutiveOfficertoapproveallannouncementsforrelease to Bursa Malaysia Securities Berhad. TheChiefExecutiveOfficerworkscloselywiththeBoard,senior management and the Company Secretarywho are privy to the information to maintain strictconfidentialityoftheinformation.

The Company continues to recognise theimportance of transparency and accountabilityto its shareholders which are key element ofgood corporate governance. The Board ensuresthat shareholders are informed of the financialperformanceandmajordevelopmentintheGroup.Suchinformationiscommunicatedtoshareholdersby timely release of quarterly financial results,circulars, annual reports, announcements andpressreleases.

Apart from the mandatory announcementsthrough Bursa Securities, the information on theCompanyisavailableontheCompany’swebsiteatwww.wcehb.com.my.

TheGroupbelievesthatbyconsistentlymaintainingahighlevelofdisclosureandextensivecommunicationwithitsshareholders,theshareholdersandinvestorswillbeabletomakeinformedinvestmentdecision.Shareholders who wish to reach the Company orGroupcandoso through the “ContactUs”page inourwebsiteatwww.wcehb.com.my.

The Annual General Meeting (“AGM”) is anotherprincipal forum for communication and dialoguewithshareholders.Thenoticesofmeetingandtheannualreportsaresentouttoshareholdersatleast28daysbeforethedateofthemeetinginaccordancewith the Code. During AGM, the Board presentsthe progress and performance of the businessas contained in the Annual Report including the

responsestoquestionsbytheMinorityShareholderWatchdog group in relation to strategy andfinancial performance of the Group and corporategovernance matters which were submitted tothe Company prior to the AGM. The Board alsoprovides opportunities for shareholders to raisequestions pertaining to the business activities ofthe Company and Group. Members of the Board,Chairman of the Audit Committee, NominationCommittee, Remuneration Committee, ExecutiveCommittee and Risk Management Committee aswell as the external auditors of the Company arepresenttoprovideresponsestoquestionsfromtheshareholdersduringthesemeetings.Shareholders’suggestionsreceivedduringtheAGMarereviewedand considered for implementation wheneverpossible.

ApressconferenceisnormallyheldaftereachAGMand/orgeneralmeetingsoftheCompanytoprovidethemediaanopportunitytoreceiveanupdatefromtheBoardontheproceedingsofthemeetingandtoaddressanyqueriesorareasofinterest.

(2) shareholders’ Conduct and Participation at general meetings

The Company provides information to theshareholders with regards to, amongst others,detailsoftheAGM,theirentitlementstoattendtheAnnualGeneralMeeting, theright toappointproxyandalso,thequalificationsofaproxyviaitsAnnualReportwhichcontainstheNoticeofAGMwhichsetsoutthebusinesstobetransactedattheAGMandisalsopublishedinamajorlocalnewspaper.ItemsofspecialbusinessincludedintheNoticeofAGMwillbeaccompaniedbyanexplanationof theproposedresolutions.

General meetings are an important venue throughwhichtheshareholderscanexercisetheirrights.TheBoardwouldensuresuitabilityofvenueandtimingofmeetingtoencourageshareholders’participationinthemeetings.

Pursuant to Paragraph 8.29A of the ListingRequirement,allresolutionssetoutinthenoticeofanygeneralmeetingsshallbevotedbypollitmoreaccuratelyand fairly reflectsshareholders’ viewbyensuringthateveryvoteisrecognised,inaccordancewiththeprincipalof“oneshareonevote”.

ThisStatementismadeinaccordancewitharesolutionoftheBoardofDirectorsdated2July2018.



ABOuT THIs susTAInABILITy sTATEmEnT

The annual report 2018 represents our firstinclusion of the Sustainability ReportingFramework format in accordance with theenhanced reporting requirements incorporatingtheSustainabilityGuideissuedbyBursaMalaysiaBerhadintheyear2015.

Thissustainabilitystatementpresentsthefindingsof thisprocess. Itdescribesourperformanceonkey non-financial metrics for the period 1 April2017 to 31 March 2018 covering our initiativeson economic, environmental and social relatedsustainabilitymatters.Aspartofthisdrive,wehaveput into consideration key sustainability mattersaffecting direct and indirect stakeholders, whichinclude employees, shareholders and investors,government authorities, the surroundingcommunityandgeneralpublic.Wecollecteddatafor disclosures of key sustainability matters asdefined by the GRI Standards applicable to WCEGroup.

The scope of this statement covers the businessoperation of WCE Holdings Berhad and itssubsidiaries (collectively referred to as “WCEGroup”) in Malaysia. This statement, however,excludes data from associate companies. Beingthefirst year, reinstatementofperformanceandchanges to the aspect boundary and reportingscopeisnotapplicable.

SUSTAINABILITYSTATEMENT

OuR jOuRnEy And COmmITmEnT TOWARds susTAInABILITy

Our journey began with the RM5,940 million build-operate-transfer(“BOT”)projectawardoftheWestCoastExpresswaybytheGovernmentofMalaysiain2013.Theconstruction of this 233 kilometres long expressway,which spans from Banting in Selangor to Taiping inPerak,commencedbackinlate2014andisspearheadedbyastrongSeniorManagementteamwhohavebroughttogether a combination of related industry experienceand construction execution expertise. The expresswayconstructionison-goingandcertainsectionsareexpectedtobecompletedinlate2018.

Here at WCE Holdings Berhad (“WCEHB”), we are alsocommitted to uphold our corporate mission which is tobuild an expressway for the convenience of the nationwithoutcompromisingthebalanceofnatureandecology.

We embarked on our journey for sustainability with theestablishmentofWCEHB’sSustainabilityCommitteeandSustainability Reporting Framework in January 2018.ChairedbyourChiefExecutiveOfficer(“CEO”),WCEHB’sSustainability Committee plays its role to oversee thesustainability reporting process of key sustainabilitymatters, covering economic, environmental and socialaspects.

In line with the GRI Standards that are applicable toWCEHB, significant efforts were also put through tocapture information for disclosure of key sustainabilitymatters.Theseeffortsincludeestablishingacentralisedreporting database for sustainability and aligning ourcorporateactivitiesinamannerthatenableustocapturesustainabilityinformation.

Package 8- RSA Teluk Intan


susTAInABILITy gOVERnAnCE

Our sustainability strategy is determined by ourBoard who provides oversight of WCEHB’s corporatesustainabilityperformance.TheSustainabilityCommittee,headed by our Chief Executive Officer (“CEO”), overseesthe implementation of the organisation’s sustainabilityapproachandensuresthatkeytargetsarebeingmetwithsupportoftheChiefFinancialOfficer(“CFO”).

mATERIALITy AssEssmEnT And KEy susTAInABILITy mATTERs

We have engaged the stakeholders, both internally andexternally,toidentifyandprioritisethekeysustainabilitymatters. The facilitation of materiality assessment wasdriven by a desktop review on the Group’s businessoperation and risk areas, input from Board of Director/Management and engagement with key champions.Through our materiality assessment, we have identifiedthe key sustainability matters as outlined in the tablebelow.

Pillar Key sustainability matters

Economic • SustainableProcurement• Marketpresence• Anti-briberyandAnti-corruption• ValuecreationfromProject

Environmental • Energyconsumption• Waterconsumption• Biodiversity• Effluentandwaste• Environmentalcompliance

social • Employmentdiversityandequalopportunity

• Occupationalhealthandsafety• Trainingandeducation• Humanrights

(i.e.non-discrimination,childlabourandforcedlabour)

• Localcommunities• Socioeconomiccompliance

FEEdBACK

ThisSustainabilityStatementisavailabletoallstakeholdersinhardcopyonrequestandcanbedownloadedfromourcorporatewebsite(http://www.wcehb.com.my).

ECOnOmIC

Malaysia’sconstructionindustrycontinuestobealeadingsegment to boost the country’s economic and socialdevelopment.WCEGroupwillcontinuetoleverageonitsstrength as Malaysia’s leading infrastructure developerto be a key driver for nation building and industryadvancement.

Value Creation from Project

The West Coast Expressway was planned and designedtoenhanceconnectivitytotheexistingexpressways(suchasPLUS,SKVE,NKVE,NNKSB,LATAR,KESAS,etc.)andprovideroaduserswithmorerouteoptionswhiletravelling.Theentireexpresswaywith21interchangeswillenhancetrafficflowintheWestCoastregionthroughareductionin travel time and associated logistic costs. It is also acatalyst for economic growth through the enhancementof trade activities and the expected emergence of newtownshipdevelopmentsalongthenewgrowthcorridor.

sustainable Procurement

Projectsub-contractorsareselectedviatenderprocesses.WCEHB,throughitssubsidiary,hasinplaceaformalisedStandard Operating Procedures (“SOP”) for tenderprocesses.ATenderCommitteewassetuptogoverntheevaluationandselectionofsub-contractors,incorporatingacombinationof technical,financialandpricingcriteria.We are also committed towards the selection of localsub-contractors as an initiative towards sustainableprocurement.

Anti-Bribery and Anti-Corruption

WCE Group enforces a “No Gift” policy through its CodeofConduct.TheCodeofConductalsodefinesthecriteriaforacceptanceofgiftsanditsapprovalprotocolforthoseexceeding RM1,000. Permissible gifts include normalbusiness courtesies (meals or entertainment), tokengiftswhichareoccasional,giftsduring festiveorspecialoccasionsandgiftsfromsocialfunctionsattendedbytheDirectors or Employees on behalf of WCE Group. WCEGroup has a direct whistle blowing channel to the AuditCommittee which serves as an avenue to report anypotentialfraudormismanagement.

SUSTAINABILITY STATEMENT (continued)


EnVIROnmEnTAL

As part of our continuing efforts towards environmentalsustainability,theGroupensuresthattherearesufficientmeasures at all construction sites and work places topreventanyadverseimpactontheenvironment.

We are committed in carrying out businesses in acommunityandenvironmentallyfriendlymannerbasedonthefollowingCAREprinciples:-

• Complying to all environmental and other relevantlegalrequirements;

• Applying a continual improvement concept whileimplementing our Environmental ManagementSystem(“EMS”)andmonitoritsperformance;

• Reducing and preventing pollution by disposingwastes according to regulated means, conservingnatural resources and adopting environmentalfriendly approaches in all activities to minimisewater,airandnoisepollution;and

• Educating employees on the importance ofsustainabledevelopmentandpollutionprevention.

The highway concession project is being constructedbased on compliance to the Environment ImpactAssessment (“EIA”) Approval Conditions resulting inminimalimpacttotheenvironment.

Thenatureofourbusinessadverselyaffectstheenvironmentto some extent. Therefore, to minimise irreversibleenvironmental damage, we strive to take measures inmitigatingorpreventingenvironmentalpollution.

Energy management

TheenergyconservationmeasuresindailyoperationsaremonitoredmonthlyundertheWCEGroup’sEnvironmentalManagementSystem(“EMS”)objectives.Theapproachtoenergy management includes managing energy supplyand consumption efficiently and effectively. Further, weinstil an energy conservation mindset into our culturethroughvariousnoticesandmessagesintheworkspace.

TheenergyconsumptionofWCEGroup’sofficepremisesfrom2015to2017isshownbelow:

2015 2016 2017

1,582kW 1,527kW 1,363kW

Water management

In line with WCE Group’s Environmental ManagementSystem (“EMS”) objectives, we also measured themonthlywaterconsumptionattheofficepremises.Wearecommittedtoachievethewaterconsumptionbelow20m³permonth.

AverageactualwaterconsumptionofWCEGroup’sofficepremisesfrom2015to2017isshownbelow:

2015 2016 2017

10.19m³ 8.72m³ 10.02m³

Site vist by Director General LLM, YBhg. Datuk Ir Hj. Ismail


Environmental monitoring

Wehaveappointedexternalconsultantstoundertakeperiodicair,waterquality,vibrationandnoisemonitoringinlinewiththemonitoringprogramsoutlinedbyPreliminaryEnvironmentalImpactAssessment(“PEIA”)toensurereadingsdonotexceedlimitssetinthestandardsbyrespectiveregulatorybodies.

monitoring Components Compliance with standards Reporting Requirement

AirQuality MalaysianAirQualityGuidelines

DepartmentofEnvironment(“DoE”)AmbientAirQuality MalaysianAmbientAirQualityStandard(“MAAQS”)

NoiseQuality PlanningGuidesforEnvironmentalNoiseLimitandControl

RiverWaterQuality NationalWaterQualityStandards DoE&LembagaUrusAirSelangor

SiltTrap EIAConditionofApprovalDoE

Vibration ScheduleofRecommendedVibrationLimits

Environmental Compliance

For thefinancial yearended31March2018, therewerenopublicsanctionsorpenalties imposed fornon-compliancerelatingtoenvironmentallawsandregulationsintheWCEGroup.

Environmental Control measures and Activities

WCE Group’s environmental initiatives and efforts aregovernedbyrobustpolicies,proceduresandcertification,based on ISO 14001:2015 Environmental Management Systems. With this, there has been no event ofnon-compliance with relevant laws and regulationsduringthefinancialyearended31March2018.


Installation of Gabion Check Dams

Installation of Silt Fence

Scheduled waste & chemical storageand chemical storage

Usage of silt fence and sand bags


sOCIAL

Malaysia’s construction industry continues to boostthe country’s economy and social development. As theconstruction industrycontinuestobeasignificantdriverin economic and social enhancement, we will continueto leverage on this as Malaysia’s leading infrastructuredevelopertoadvancetheindustryandbuildthenation.

diversity and Equal Opportunity

We value our employees as they are key to competitivesuccess in the marketplace which is vital for businesssustainability.

As part of the WCE Group hiring practise, we do notdiscriminate against any race, gender or minorities.Theemployeesarealsoprovidedwithadequatemedicalbenefitsaswellashospitalisationandpersonalaccidentinsurance coverage. The statistics below indicate thegenderprofileandethnicityofWCEGroup.

Gender Profile

Ethnicity

Employee Benefits

WCEGroupoffersattractivebenefits inaddition tobasicremuneration. These benefits cover Annual PhysicalExamination,Hospitalisation&SurgicalInsuranceaswellas protection benefits whereby contributions are madein the Employees Provident Fund (“EPF”) applicable toall employees (including contract staff), Group PersonalAccidentBenefitsthatcoverstotalpermanentdisablementand/ordeathasaresultofanaccident,andGroupTermAssurancewithCriticalIllnessBenefits.

The Group thrives to foster a work-life balance culturethatcaters toemployees’physicalandemotionalneeds.InWCEGroup,weunderstand that theequitablegenderchoice formaternityandpaternity leave,can lead to thegreaterrecruitmentandretentionofqualifiedemployees.Thiswillboostemployeemorale,productivityandpositivelyimpactwomentotakesuchleavewithoutprejudicingtheircareers.

Occupational Health and safety

WCE Group is continuously working towards cultivatinga strong health and safety culture in the workplace. Wetake pride in our achievement towards maintaining highstandards on occupational health and safety measuresto ensure compliance with regulatory requirement. Wemaintain a strong belief that every stakeholder has therighttoreturnfromtheirrespectiveworkplacesunharmedandsafe.

Policy statement on Health, Safety and Environment

The West Coast Expressway Project Managementteam shall continuously improve its Health, Safety andEnvironmentalpracticeswiththefollowingobjectives:

• PreventOccupationalAccident

• PreventOccupationalIllness

• PreventEnvironmentalPollution

2

6

SeniorManagement

■ Bumiputera ■ Chinese ■ Indian

3

4

JuniorManagement

6

10

Executive

4

3

Non-Executive

■ Male ■ Female

76%

19%

5%

2

6

SeniorManagement

■ Bumiputera ■ Chinese ■ Indian

3

4

JuniorManagement

6

10

Executive

4

3

Non-Executive

■ Male ■ Female

76%

19%

5%

Package 9 - Changkat Cermin Interchange


Theprojectmanagementteam,contractorsandallthoseinvolvedintheprojectwillbeguidedbythemotto,“Health, safety and Environmental is Everyone’s responsibility” throughensuringthefollowing:-

• Compliance with all applicable legislation andrelatedrequirement

• Dissemination of relevant information to everyoneinvolved

• Performanceandobjectivesreviewedperiodically

• Minimisesafetyandhealthriskthroughadoptionofbestpractises

• Provide appropriate training to our employees andother related parties to improve awareness andknowledgeoftherequirements

• Committedtomonitorhealthandsafetyperformanceto ensure that standards are being met and it iscontinuously improved indicatingthatmanagementcontrolisworking

Training Programmes held in 2017

Training Programme date

ISO14001:2015EnvironmentManagementSystemAwarenessTraining

24January2017

3March2017

11October2017

ProgramHariKeselamatanDanKesihatanPekerjaanLLM2017

16November2017

TaklimatKursusYangDitawarkanolehCIDBBerkaitanPembinaan

14December2017

We have made basic safety training mandatory for allemployees and subcontractors relevant to their jobfunctions.

Other Health, Safety and Environment (“HSE”)programmes such as internal trainings and on-the-jobtrainingsthatareconductedatsiteareasfollows:-

Training description Frequency/date Held

ToolboxTalk Daily

Inductionfornewworkers Onceforeverynewworker

HSEManagementWalkabout

Monthly

Trainingportablefireextinguisher

28November2017

Our consistent and active initiatives on the safety andhealthmanagementhassuccessfullyledtonoaccidents/incidents cases reported in the financial year and thattherewerenolostworkdaysandlosttimeinjury.

Package 5 - Kapar Interchange

Site visit by then Chief Minister of Selangor, YAB Datuk Seri Azmin



Training and Education

Wearecommittedtothedevelopmentofouremployees.Traininganddevelopmentarefundamentaltothecontinuousimprovementofoperationalperformance.Ouraimistohelpallemployeestoreachtheirpotentialbydeliveringavarietyoftrainingprogrammes.

Operational support

ProgramPembentanganTeknikalAnjuranLLM–“TechnologyUpdatesinHighway”

OverviewofCompaniesAct2016&DutiesandResponsibilitesofDirectors

MalaysianGreenHighwayIndex(MyGHI)–TowardsSustainableRoadInfrastructures

2017Business&TaxSeminar

ProgramPembentaganTeknikalLLMSeminar–“GroundImprovementWorks”

BiztrackFinancialModules

SeminaronIntelligentTransportSystem(ITS)2017–DrivingITStoaNewNormal

GlobalMegatrendsandGameChangers

SesiDialogTransformasiIndustriPembinaan2050

BengkelPenggunaanSistemPemantauanPembinaanLebuhraya(SPPL)

HighValueEngineeringPrecastConcreteSystem

PembentanganLaporanProofofConcept(POC)2RFID&Isu-isuTeknikalPerlaksanaanRFIDStickerTag

SeminarAplikasiIBSuntukKontractor

Package 4 - Elevated structure across Federal Highway near Bukit Raja


A total of 920 hours comprising various trainingprogrammeswereconductedforouremployeestoachieveitsobjectiveof60%ofemployeehaving8hours trainingperyear.

Training 2017

Employeeparticipationintraining 42

Averagehoursperyearperemployee 21.9

WCEGroupofferssubsidyforapprovedself-developmentcourses as well as study and examination leave toencourageemployeelearninganddevelopment.

Our Performance management system

We adopt the Balanced Scorecard performancemanagement tool focused on managing theimplementation of business strategies and operationalactivities.Thisapproach focuseson fourelementsbeingFinancial,Customer,InternalandLearning&Growth.

The Internal and Customer perspective of the BalancedScorecard is covered under the Performance Factorand Core Values, where assessment on spokencommunication, job knowledge, integrity, efficiency,managementofcontractorsareassessed.TheLearning& Growth perspective is covered under the LeaderCompetencies whereby the assessment pertaining toself-growthandstrategicthinkingareassessed.


Corporate social Responsibility

We encourage our employees to get involved involunteering activities to make a positive contribution tothelocalcommunities.

On7April2018,theGroup,LembagaLebuhrayaMalaysiaand the National Blood Bank jointly organised a blooddonationcampaignatAeonMall,BukitTinggi,Selangor.The campaign successfully collected 121 pints of bloodfrom the public, registered donors and members of theorganisingcorporations.

Besides, the Group is also one of the sponsors in theNationalRugbySevensSeries2018organisedbyMalaysiaRugby Union. The tournament was held in Ipoh on24-25March2018.TheGroupalsomadeacontributiontoPersatuanBolasepakPerak(PAFA)fortheirmanagementandactivityfundinsourcingandtrainingofplayersforLigaMalaysia2018.Itishopedthatthesecontributionswillgotowards promoting and enhancing sports and sportingactivitiesinthecountry.

Blood donation campaign at AEON Mall, Bukit Tinggi, Selangor

Sponsor to Persatuan Bolasepak Perak

Sponsor to National Rugby Sevens Series 2018


1.0 nOn-AudIT FEEs

During the financial year, the Company incurred fees for non-audit services of RM64,500 by the Auditors of theCompany.

2.0 mATERIAL COnTRACTs

TherewerenomaterialcontractsenteredbytheCompanyanditssubsidiariesinvolvingitsDirectors’,ChiefExecutiveOfficer’sandMajorShareholders’interests,eitherstillsubsistingattheendofthefinancialyearorenteredintosincetheendofthepreviousfinancialyearend.

3.0 mATERIAL COnTRACTs RELATIng TO LOAns

TherewerenomaterialcontractsrelatingtoloansenteredbytheCompanyanditssubsidiariesinvolvingitsDirectors’,ChiefExecutiveOfficer’sandMajorShareholders’interests,eitherstillsubsistingattheendofthefinancialyearorenteredintosincetheendofthepreviousfinancialyearend.

4.0 sTATus OF uTILIsATIOn OF PROCEEds RAIsEd FROm CORPORATE PROPOsAL

(a) Proposed Renounceable Rights Issue

InSeptember2014,theCompanyundertookRenounceableRightsIssueof429,743,823newordinarysharesofRM1.00eachintheCompanyatanissuepriceofRM1.08perRightsShare,togetherwith214,871,911freedetachableWarrants,onthebasisofthreeRightsSharesforeveryfourexistingsharesintheCompanyheldandonefreeWarrantforeverytwoRightsSharessubscribedfor.TheWarrantsmaturedon26August2016andnoneofthewarrantswereexercisedandaccordinglylapsed.

Thestatusofutilisationofproceedsasat31March2018issetoutbelow:

Proposed utilisation of

Proceeds Rm’mil

utilisationRm’mil

BalanceRm’mil

Injectionasequity,convertiblesand/orsubordinatedadvancedintoWestCoastExpresswaySdnBhd,an80%-ownedsubsidiaryoftheCompany 357.0 (357.0) -

Repaymentofbankborrowings 92.0 (92.0) -

Workingcapitalandcontingencies 8.1 (8.1) -

DefrayRightsIssueexpenses 7.0 (4.8) 2.2*

464.1 (461.9) 2.2

* Theexcessamountwillbeutilisedasworkingcapital.

ADDITIONALCOMPLIANCE INFORMATIONasat31March2018


(b) Proposed disposal of 900 million ordinary shares in Talam Transform Berhad (Proposed disposal)

InJanuary2016,theCompanyproposedtodisposedof900millionordinarysharesinTalamTransformBerhad(TTB),representing21.34%equityinterestheldinTTBtoTanSriDato’(Dr)Ir.ChanAhChye@ChanChongYoonforatotalcashconsiderationofRM80.50million.TheProposedDisposalistobeundertakenintwotranches,asfollows:

(i) First tranche consisted of 500 million TTB shares for a total cash consideration of RM42.50 million(completedon18April2016),and

(ii) Secondtrancheconsistedof400millionTTBsharesforatotalcashconsiderationofRM38.00milliondueforcompletionon15August2017.Thecompletiondatewasfurtherextendedto16August2018withanadditionalconditionthatthedisposalconsiderationsofarthatremainsunpaid,shallbearinterestatarateof5.0%perannum.

ThestatusofutilisationofproceedsfromthefirsttrancheoftheProposedDisposal,asat31March2018issetoutbelow:

Proposed utilisation of

Proceeds Rm’mil

utilisationRm’mil

BalanceRm’mil

Injection as equity, convertibles and/orsubordinated advanced into West CoastExpressway Sdn Bhd, an 80%-ownedsubsidiaryoftheCompany 32.2 (29.1) 3.1

Workingcapitalandcontingencies 8.0 (6.1) 1.9

Defrayestimatedexpensesoftheproposeddisposal 2.3 (0.4) 1.9*

42.5 (35.6) 6.9

* Theexcessamountwillbeutilisedasworkingcapital.

ADDITIONAL COMPLIANCE INFORMATION (continued)asat31March2018

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5.0 RECuRREnT RELATEd PARTy TRAnsACTIOns OF A REVEnuE OR TRAdIng nATuRE

Details of recurrent related party transactions made during the financial year ended 31 March 2018 pursuant totheshareholders’mandateobtainedbytheCompanyattheAnnualGeneralMeetingheldon28August2017areasfollows:-

nature of Transactions undertaken by the Company and/or its subsidiaries Transacting Company

Transacted Value (Rm’000)

Interested Related Party

A. Transactions by the Company

Interest IJMConstructionSdnBhd(whollyownedsubsidiaryofIJMGroup)

808 IJM(Note2)

B. Transactions by Ijm Corporation Berhad (“Ijm”) group

Projectbillingsforconstructionwork

IJMC-KEBJointVenture(Note1)

625,113 IJM(Note2)

Interest IJMConstructionSdnBhd(whollyownedsubsidiaryofIJMGroup)

65 IJM(Note2)

Interest IJMC-KEBJointVenture(Note1)

133 IJM(Note2)

Notes:

1. IJMC-KEB Joint Venture is an unincorporated joint venture with the participating interest of the Company andIJMConstructionSdnBhdof30%and70%respectively.

2. IJMCorporationBerhadisaMajorShareholderoftheCompanybyvirtueofits26.46%directinterestintheCompany.

Package 8 - Hutan Melintang Interchange


Set out below is the Board of Directors’ (“the Board”) Statement on Risk Management and Internal Control for WCE Holdings Berhad and its subsidiaries (“the Group”), made in compliance with Paragraph 15.26(b) of the Listing Requirements of Bursa Malaysia Securities Berhad which outlines the key elements of risk management and internal control system within the Group for the financial year ended 31 March 2018.

BOARd’s REsPOnsIBILITIEs

TheBoardrecognisestheimportanceofasoundsystemofriskmanagementandinternalcontrolinordertoachievegoodcorporategovernance.TheBoardacknowledgesthattheBoardisultimatelyresponsiblefortheGroup’ssystemofriskmanagementandinternalcontrol,whichincludesthe establishment of an appropriate risk managementframework, as well as reviewing its adequacy, integrityand effectiveness. The system covers risk managementand internal controls relating to financial, operational,achievement of strategic goals and compliance withapplicablelawsandregulations.

Generally, the Group’s system of risk management andinternalcontrolisdesignedtomanagetheriskstowhichthe Group is exposed to while pursuing its businessobjectives. The Group’s system of risk managementand internal control is designed to mitigate ratherthan eliminate the risks. Therefore, the system of riskmanagement and internal control can only providereasonable but not absolute assurance against materialmisstatement,lossorfraud.

RIsK mAnAgEmEnT FRAmEWORK

A sound framework of risk management and internalcontrol is fundamental to good corporate governance.TheRiskManagementSystem(“RMS”)isusedtomanagekeybusinessrisksandtoprovideassurancetotheBoardand stakeholders that the risks faced by the Group areadequatelyandeffectivelymanagedandtheshareholders’investment and the Group’s assets are safeguarded.The effectiveness of the Group’s RMS is reviewed andimproved,bothatthemanagementandtheBoardlevels,asandwhennecessary.

The Risk Management Committee (“RMC”) is chaired bythe Chief Executive Officer and its members comprisesenior management of the Group. The RMC ensuresthe Group has in place an ongoing process for theyear under review and up to the date of approval ofthis statement for identifying, evaluating, assessing,monitoring and managing key business risks that mayaffecttheachievementoftheGroup’sbusinessobjectivesand also ensure that the Group’s corporate objectivesareachievedwithinacceptableriskappetite. Thereviewcovers responses to significant risks identified includingnon-compliance with applicable laws, rules, regulationsandguidelinesandprovidesassurancetotheBoardthatprocessesputinplacecontinuetooperateadequatelyandeffectively.Asthebusinessriskprofilechanges,newareasareintroducedintheriskmanagementprocess.

Keybusinessrisksaredocumentedintheriskprofilethataddressesriskstotheachievementofstrategic,financialand operational objectives. The risk profile lists allidentifiedrisksandthereafterassesses the likelihoodofoccurringanditsquantitativeandqualitativeimpacttotheGroup.Italsolistscontrolsandmeasuresusedtomonitorandmitigatethoserisks.

Risksthatarelikelyoralmostcertaintooccurandhavemajor or catastrophic impact (“Principal Risks”) arespeciallyassessedtoascertainmeasurestakentomonitorandmitigatetherisksareadequateandeffectiveandarereportedtotheAuditCommittee.

The main identified Principal Risks during the financialyearareasfollows:

(a) uncertainty of highway alignment

delay in obtaining final alignment consensus from the Authorities.

To mitigate this risk, the Group liaise closely withKementerian Kerja Raya Malaysia (KKR), LembagaLebuhraya Malaysia (LLM) and relevant StateAuthoritiesinensuringcompliancewithbothStateandFederallawsandregulations.

(b) delay in land acquisition and Land acquisition cost overrun

The West Coast Expressway Project stretches 233 km and may face delays in land acquisition.

To mitigate these risks, among others, the GroupliaisecloselywithJabatanKetuaPengarahTanahdanGalian(JKPTG)toidentifyavailablereplacementlandsfor malay reserve land subject to acquisition for theProject,whererequiredtodosobyStateregulations.

STATEMENT ON RISK MANAGEMENTAND INTERNAL CONTROL


The Group regularly monitors the land acquisitionexpenditureagainstavailablebudgettoascertainfundingadequacy and during the financial year has successfullyapplied to the Government of Malaysia for budget re-allocationtopartiallycoverlandacquisitioncostoverrun.In addition, the Company is in the midst of preparingfor a renounceable rights issue as announced via BursaSecuritiesMalaysiaBerhadon26March2018.

InTERnAL AudIT’s REsPOnsIBILITIEs

The Group’s internal audit service is outsourced to aprofessional firm that performs reviews of businessprocessestoassesstheeffectivenessofinternalcontrolsand reports to the Audit Committee. The internal auditprovides an assessment as to whether risk, which mayhinder the Group from achieving its objectives, arebeing adequately evaluated, managed and controlled ormitigated.Italsoevaluatesthesystemofinternalcontroland effectiveness of governance in accordance with theapprovedannualinternalauditplan.

OTHER KEy ELEmEnTs OF RIsK mAnAgEmEnT And InTERnAL COnTROL

1. Operationalorganisationstructurewithdefinedlinesofresponsibilitiesanddelegationofauthoritywhichfacilitatesaprocessofreportingandprovidesforadocumentedandauditabletrailofaccountability.

2. Management reports, which are presented bythe respective division heads to the ManagementCommittee,providesfinancialinformation,includinginformation of significant changes in accountingstandardsandreporting;

3. ExecutiveCommitteemeetingsconvenedtodiscussthe Group’s operations and performance. Themeetings enable the monitoring of results againstbudget, with significant variance explained andappropriateactiontaken;

4. Definedlimitsofauthorityforvarioustransactions,includingpurchasingandpayments;

5. Standing Instructions and Standard OperatingProceduresarereviewedandupdatedasandwhennecessary to ensure effective management of theGroup’soperations;and

6. Review of quarterly financial results by the AuditCommitteeandtheBoard.

AssOCIATEs

TheStatementonRiskManagementandInternalControldoesnotdealwiththeassociatesastheGroupdoesnothavemanagementcontrolovertheiroperations.

jOInT VEnTuRE

TheStatementonRiskManagementandInternalControldoesnotcoverthejointventureasthejointventureisjointlycontrolledbytheGroupandanotherjointventurepartner.In respect of the joint venture entered by the Group,the Management of the joint venture, which consists ofrepresentationfromtheGroupandtheotherjoint-venturepartner, are responsible to oversee the administration,operationandperformanceofthejointventure.FinancialandoperationalreportsofthisjointventureareprovidedmonthlytotheManagementoftheGroup.

BOARd’s COmmITmEnT

The Board recognises that the Group operates ina dynamic business environment in which the riskmanagement and internal control system must beresponsive inorder tobeable tosupport itsbusinessobjectives. To this end, the Board remains committedtowards maintaining a sound system of RiskManagement and Internal Control and believe that abalanced achievement of its business objectives andoperationalefficiencycanbeattained.

REVIEW OF sTATEmEnT By ExTERnAL AudITORs

TheexternalauditorshaveperformedalimitedassuranceengagementontheStatementonRiskManagementandInternal Control for inclusion in the Annual Report oftheCompanyforthefinancialyearended31March2018pursuanttothescopesetoutintheAuditandAssurancePracticeGuide3:GuidanceforAuditorsonEngagementsto Report on the Statement on Risk managementand Internal Control, issued by Malaysia Institute ofAccountants and reported that nothing has come totheirattentionthatwouldcausethemtobelievethattheStatement is not prepared, in all material aspects, inaccordance with the disclosures required by paragraph41 and 42 of the “Statement on Risk Management andInternal Control: Guidelines for Directors of ListedIssuers”noristhesamefactuallyinaccurate.

COnCLusIOn

The Board is pleased to report that it has received theassurancefromtheChiefExecutiveOfficerandtheChiefFinancialOfficer that theGroup’sRiskManagementandInternal Control system is operating adequately andeffectivelyinallmaterialaspects.

TheBoard isof theview that theRiskManagementandInternal Control system is adequate and effective andtherewerenomaterialweaknessinthesystemofinternalcontrolduringthefinancialyearthatwouldhavematerialadverseeffectontheresultsof theGroupfortheperiodunderreview.TheBoardwillcontinuetotakemeasurestostrengthentheinternalcontrolenvironmenttosafeguardshareholders’investmentandtheGroup’sasset.

ThisStatementisapprovedbytheBoardon2July2018.


COmPOsITIOn

members of the Committee designation

1. DatukOhChongPeng(Chairman)


2. DatukIr.HamzahbinHasan


3. DatukWiraHj.HamzabinTaib


4. TanChorTeck IndependentNon-ExecutiveDirector

5. TangKingHua Non-IndependentNon-ExecutiveDirector

TERms OF REFEREnCE

ThefollowingtermsofreferenceoftheAuditCommitteeand is available on the Company’s website, www.wcehb.com.my.

Constitution

The Audit Committee was established by the Board on17July2003.

membership

TheCommitteeshallbeappointedbytheBoardofDirectorsfromamongsttheirnumbersandshallconsistofnotlessthan3members,ofwhomamajorityshallbeIndependentDirectors.AnIndependentDirectorshallbeonewhofulfilstherequirementasprovidedforintheListingRequirementsofBursaMalaysiaSecuritiesBerhad.

At leastonememberof theAuditCommitteemustbeamemberoftheMalaysianInstituteofAccountants,orifheisnotamemberoftheMalaysianInstituteofAccountants,hemusthave:-

- at least3years’workingexperienceandpassed theexaminationsspecifiedinPartIoftheFirstScheduleoftheAccountantsAct1967,or

- atleast3years’workingexperienceandisamemberofoneoftheassociationsofaccountantsspecifiedinPartIIoftheFirstScheduleoftheAccountantsAct1967,or

- adegree/masters/doctorateinAccountingorFinanceandat least3years’postqualificationexperience inAccountingorFinance,or

- at least 7 years’ experience being a Chief FinancialOfficer of a corporation, or having the function ofbeing primarily responsible for the management ofthefinancialaffairsofacorporation.

The members of the Audit Committee shall elect aChairman from amongst their number, who shall be anIndependentDirector.IfamemberoftheAuditCommitteeresigns, dies or for any other reason ceases to be amemberwith theresult that thenumberofmembers isreduced to below 3, the Board of Directors shall, within3 months of that event, appoint such number of newmembers as may be required to make up the minimumnumberof3members.

NoalternatedirectorcanbeappointedasamemberoftheAuditCommittee.

Formerkeyauditpartnerarerequiredtoobserveacooling-offperiodofatleasttwoyearsbeforebeingappointedasamemberoftheAuditCommittee.

Authority

TheAuditCommitteeisgrantedtheauthoritytoinvestigateanyactivityoftheCompanyanditssubsidiarieswithinitstermsofreference.Inparticular,theAuditCommitteehastheauthorityto:

- have resources, which are required to perform itsduties,

- havefullandunrestrictedaccesstoanyinformation,including any information it requires from anyemployee,andallemployeesaredirectedtoco-operatewithanyrequestmadebytheAuditCommittee,

- be able to obtain independent professional or otheradvice,and

- havedirectcommunicationchannelswiththeexternalandinternalauditors.

meetings and Reporting Procedures

TheAuditCommitteewillmeetatleastfourtimesayear.Aquorumforameetingshallbetwomembers,bothbeingIndependent Directors. At least twice a year, the AuditCommitteeshallmeetwiththeExternalAuditorswithoutany Executive Directors/Chief Executive Officer beingpresent.TheExternalAuditorsmayrequestforameeting,iftheyconsidernecessary.

The Directors and employees will attend any particularAudit Committee Meeting only at the Audit Committee’sinvitation,specifictotherelevantmeeting.

TheCompanySecretaryshallbethesecretaryoftheAuditCommittee.Minutesofthemeetingshallbedulyenteredin the books provided therefrom. The minutes will becirculated to all members of the Board of Directors andshallbepresentedattheBoardofDirectors’meeting.

AUDIT COMMITTEEREPORT


duties and Functions

ThedutiesandfunctionsoftheAuditCommitteeshallbe:-

(i) To consider appointment of external auditors, auditfee,andanyquestionsofresignationordismissalofexternalauditorsbeforemakingrecommendation totheBoardofDirectors;

(ii) To discuss with external auditors before the auditcommences,auditplan,natureandscopeoftheauditandtoensurecoordinationwheremorethanoneauditfirmsareinvolved;

(iii)Toreviewthequarterlyresultsandyear-endfinancialstatements prior to the approval by the Board ofDirectors,focusingparticularlyon:-

- anychangesinaccountingpoliciesandpractices,

- significantandunusualevents,

- thegoingconcernassumption,and

- compliance with accounting standards, stockexchangeandlegalrequirements.

(iv) To review any related party transaction and conflictof interest situation that may arise in the Companyincluding any transaction, procedure or courseof conduct that raises questions of managementintegrity;

(v) Todiscussproblemsandreservationsarisingfromtheinterimandfinalaudits,andmatterstheauditorsmaywishtodiscuss(intheabsenceofmanagementwherenecessary);

(vi) InrelationtoInternalAuditfunction/service:-

- to review the adequacy of the scope, functions,competency and resources of the internalaudit function/service that it has the necessaryauthoritytocarryoutitswork;

- to review the internal audit programme andresultsof the internalauditprocessand,wherenecessary, ensure that appropriate actions aretaken on the recommendations of the internalauditfunction/service;

- to review any appraisal or assessment of theperformance of members of the internal auditfunction/service;

- to approve any appointment or terminationof senior staff members of the internal auditfunction/service;and

- to take cognizance of resignations of internalaudit staff members and provide the resigningstaffmemberanopportunitytosubmithisreasonforresigning.

(vii)To keep under review the effectiveness of InternalControl system and in particular review ExternalAuditors’ management letter and management’sresponse;

(viii)Toreviewtheauditreports;

(ix) To review the reports of the Risk ManagementCommittee;

(x) To make periodic report to the Board of Directorssummarizing the work performed in fulfilling theAuditCommittee’sprimaryresponsibilities;and

(xi) Toconsiderother topics,asdefinedby theBoardofDirectors.

ATTEndAnCE AT AudIT COmmITTEE mEETIngs

Duringthefinancialyearended31March2018,therewerefive(5)AuditCommitteeMeetingsheldandthenumberofmeetingsattendedbyeachAuditCommitteememberareasfollows:-

Audit Committee members number of meetings Attended

1. DatukOhChongPeng(Chairman)

5outof5

2. TangKingHua 5outof5

3. Dato’AbdulHamidbinMustapha(resignedon23November2017)

4outof4

4. UChinWei(resignedon23November2017)

4outof4

5. DatukIr.HamzahbinHasan(appointedon23November2017)

1outof1

6. DatukWiraHj.HamzabinTaib(appointedon23November2017)

1outof1

7. TanChorTeck(appointedon26February2018)

1outof1


REVIEW OF THE AudIT COmmITTEE

AnannualassessmentandevaluationontheperformanceandeffectivenessoftheAuditCommitteewasundertakenbytheBoardofDirectorsforthefinancialyearended31March 2018. The Audit Committee was assessed basedon four (4) key areas, namely effectiveness and quality,internalandexternalaudit,riskmanagementandinternalcontrolandfinancialreporting,todeterminewhethertheAuditCommitteehadcarriedoutitsdutiesinaccordancewithitstermsofreference.

summARy OF AudIT COmmITTEE ACTIVITIEs

Duringthefinancialyearended31March2018,theAuditCommittee carried out its duties, amongst others, inaccordancewithitstermsofreference,asfollows:-

(i) Reviewed the quarterly financial results prior torecommending them for consideration and approvalbytheBoardofDirectors;

(ii) ReviewedanddiscussedwiththeExternalAuditorstheauditplanningmemorandumbeforecommencementoftheyearendaudit;

(iii) Reviewed and discussed with External Auditors’findings during the course of their audit andManagement’s response, including having twoconfidential private sessions with the ExternalAuditors;

(iv) Reviewed the Annual Audited Financial StatementsandrecommendforapprovalbytheBoardofDirectors;

(v) Reviewed and deliberated the Recurrent RelatedPartyTransactions;

(vi) Reviewed and approved the appointment ofoutsourced professional firm engaged to assist theRiskManagementCommittee toperformEnterpriseRiskManagementsreviewandInternalAuditServices;

(vii)ReviewedanddeliberatedtheInternalAuditreports;and

(viii)Reviewed Risk Management report by the RiskManagementCommittee.

Financial Reporting

In overseeing the Company’s financial reporting, the ACreviewedthequarterlyfinancialstatementsandtheannualaudited financial statements. The quarterly financialstatementsforthefirst,second,thirdandfourthquartersended31March2018wereprepared incompliancewiththe Malaysian Financial Reporting Standards (“MRFS”)134InterimFinancialReporting,InternationalAccountingStandards34InterimFinancialReportingandparagraph9.22, including Appendix 9B of the Main Market ListingRequirement(“MMLR”),werereviewedattheACmeetingson21August2017,22November2017,22February2018and24May2018respectively.

On 2 July 2018, the AC reviewed the annual auditedfinancial statements for financial year ended 31 March2018.

Inallofthedeliberations,theChiefFinancialOfficerhadgiventhefollowingassurancestotheAC:-

(a) Appropriateaccountingpolicieshadbeenadoptedandappliedconsistently,

(b) The going concern basis applied in the InterimFinancial Statements and Annual FinancialStatementswasappropriate,

(c) Prudent judgement and reasonable estimates hadbeen made in accordance with the requirement setoutintheMFRSs,

(d) Adequate processes and controls were in placefor effective and efficient financial reporting anddisclosuresundertheMFRSsandMMLR,and

(e) TheInterimFinancialStatementsandAnnualFinancialStatements did not contain material misstatementsandgaveatrueandfairviewofthefinancialpositionoftheCompanyandGroup.

AUDIT COMMITTEE REPORT(continued)


External Audit (EA)

On 22 February 2018, the AC reviewed the EAs’ AuditPlanning Memorandum (APM) for the audit for thefinancial year ending 31 March 2018 outlining the scopeof theirauditwork includingotherrelatedservicessuchasReviewofStatementonRiskManagementandInternalControls and the Reading and Considering the OtherInformation.TheAPMalsoprovidedanexplicitassurancetotheACthattheEAhavecompliedwiththerequirementsfor independence in accordance with the terms of allrelevant professional and regulatory requirements. Inaddition to the above, the APM also contain informationontheMalaysianAccountingStandardsBoard’sApprovedAccountingStandardsthathavebeenissuedbutnotyettobeeffective.

On 24 May 2018, the AC reviewed the EAs’ Audit ReviewMemorandum (ARM) for the financial year ended31 March 2018 detailing the status, findings andoutstanding matters of the annual audit. The ARM alsoprovidedanexplicitassurancetotheACthattheEAhavecomplied with the requirements for independence inaccordancewiththetermsofallrelevantprofessionalandregulatoryrequirements.

On 2 July 2018, the AC reviewed the Audited FinancialStatements (AFS) for the financial year ended 31 March2018.AttheinvitationoftheAC,theEAandManagementbriefedtheACsalientpointsoftheAFSandthekeyauditmatters(KAMs)statedintheIndependentAuditors’ReporttotheMembersoftheCompany.

TheACdeliberatedontheKAMsandaresatisfiedtheauditprocedurescarriedoutbytheEAissufficient.Inaddition,the AC opines that significant judgments and estimatesprovidedbyseniormanagementtotheBoardofDirectorsandtheEAweresoundandreasonable.Therefore,theACrecommendedtheAFStotheBoardforapproval.

For thefinancial yearended31March2018, theAChadtwoprivatemeetingwiththeEAwithoutthepresenceofchiefexecutiveofficer,seniormanagementandcompanysecretaries.

InTERnAL AudIT sERVICE

The Audit Committee is supported by the Internal Auditservice provided by an independent professional serviceprovider. The Committee is aware of the fact that theInternal Audit Service is essential to assist in obtainingassurance regarding the effectiveness of the system ofInternalControlintheGroup.

The primary objective of the Internal Audit service is toreviewtheeffectivenessofthesystemofinternalcontrolandthisisperformedwithimpartiality,proficiencyandwithdueprofessionalcare.TheInternalAuditServiceenablestheAuditCommitteetodischargeitsdutiesbyundertakingindependentregularandsystematicreviewsofthesystemofinternalcontrol,soastoprovidereasonableassurancethat such system continue to operate satisfactorily andeffectively.

The internal audit approach was risk based and incompliance with the IIA Standard. During the financialyear, the internal audit service carried out two internalaudit assessments on the Company and West CoastExpresswaySdnBhd.Theinternalauditserviceassessedkey internal controls for processes and key associatedrisksinthefollowingareas:-

(a) Project management

Landacquisitionprocess,Stakeholders’management,Projectmonitoringandreportingprocess,Concessionmonitoring process, Contract management process,Project cost monitoring, Project tender process andConsultant/sub-contractorperformanceevaluation.

(b) Health, safety & Environment

Health and Safety management and Environmentimpactmonitoring.

(c) Information Technology

User access management, IT security monitoring,Data recovery and backup procedure and Physicalaccessatoffice;

(d) Human Resource

Training and on-job training, Staff performanceappraisalandStaffcompetencyassessment;

(e) Finance

Cash flow planning, Budgetary control and Projectinsurancecoverage.

The internal audit reports were deliberated at AC andremedialactionshavebeentakenbymanagementontheidentifiedrisks.

Total cost incurred in respect of internal audit servicesduring the financial year ended 31 March 2018 wasRM54,000.


TheDirectorsarerequiredbytheCompaniesAct2016(“theAct”)topreparefinancialstatementsforeachfinancialyearinaccordancewiththeprovisionsoftheActandapplicableapprovedaccountingstandardstogiveatrueandfairviewofthestateofaffairsoftheGroupandtheCompanyattheendofthefinancialyearandoftheirresultsandcashflowsforthefinancialyearthenended.Wheretherearenewaccountingstandardsorpoliciesthatbecomeeffectiveduringtheyear,theimpactofthesenewtreatmentswouldbestatedinthenotestothefinancialstatementsaccordingly.

Inpreparingthefinancialstatementsforthefinancialyearended31March2018,theDirectorshave:-

(1) adoptedappropriateaccountingpolicieswhichwereconsistentlyapplied;

(2) madejudgmentsandestimatesthatarereasonableandprudent;

(3) ensuredthatallapplicableapprovedaccountingstandardshavebeenfollowed;and

(4) preparedfinancialstatementsongoingconcernbasis.

TheDirectorsareresponsibleforensuringthattheCompanykeepsaccountingrecords,whichdiscloseswithreasonableaccuracythefinancialpositionoftheGroupandtheCompanyandcomplywiththeprovisionsoftheAct.TheDirectorsarealsoresponsiblefortakingreasonablestepstosafeguardtheassetsoftheGroupandCompanyandtopreventanddetectmaterialfraudandotherirregularities.

STATEMENT OFDIRECTORS’ RESPONSIBILITIESforthePreparationofFinancialStatements

Package 3 - Construction of bridge crossing Jalan Sg. Kandis


REPORTS AND FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 MARCH 2018

46 Directors’ Report

50 Statements of Financial Position

51 Statements of Comprehensive Income

53 Statements of Changes in Equity

55 Statements of Cash Flows

58 Notes to The Financial Statements

124 Statement by Directors

125 Statutory Declaration

126 Independent Auditors’ Report

The directors hereby submit their report together with the audited financial statements of WCE Holdings Berhad (“the Company”) and its subsidiaries (“the Group”) for the financial year ended 31 March 2018.

PRINCIPAL ACTIVITIES

The Company is principally involved in investment holding. The principal activities of its subsidiaries and associates are disclosed in Note 8 and Note 9 to the financial statements.

There have been no significant changes in the nature of these principal activities during the financial year.

RESULTS

Group Company RM’000 RM’000

Profit/(loss) for the financial year, net of tax 15,054 (12,866)

Profit/(loss) attributable to:Owners of the Company 13,681 (12,866)Non-controlling interests 1,373 -

15,054 (12,866)

DIVIDEND

No dividend was paid or declared by the Company since the end of the previous financial year.

The directors do not recommend the payment of any dividend in respect of the financial year ended 31 March 2018.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.

BAD AND DOUBTFUL DEBTS

Before the financial statements of the Group and of the Company were prepared, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances which would render the amount written off for bad debts or the amount of allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent.

CURRENT ASSETS

Before the financial statements of the Group and of the Company were prepared, the directors took reasonable steps to ensure that any current assets which were unlikely to be realised in the ordinary course of business including their values as shown in the accounting records of the Group and of the Company had 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 which would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

DIRECTORS’ REPORT


VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances 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.

CONTINGENT AND OTHER LIABILITIES

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

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; and

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

In the opinion of the directors, no contingent or other liability of the Group or of the Company has become enforceable, or is likely to become enforceable, within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations as and when they fall due.

CHANGE OF CIRCUMSTANCES

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

ITEMS OF MATERIAL AND UNUSUAL NATURE

In the opinion of the directors,

(i) the results of the operations of the Group and of the Company for the financial year were not substantially affected by any item, transaction or event of a material and unusual nature other than the allowance for impairment loss as disclosed in Note 22 to the financial statements; and

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

ISSUE OF SHARES AND DEBENTURES

During the financial year, no new issue of shares or debentures were made by the Company.

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up the unissued shares of the Company during the financial year.


DIRECTORS’ REPORT (continued)

DIRECTORS

The directors in office during the financial year and during the period from the end of the financial year to the date of the report are:

Datuk Ir. Hamzah bin Hasan*Datuk Oh Chong Peng Lee Chun FaiTang King Hua*Datuk Wira Hj Hamza bin Taib (Appointed on 23 November 2017)Vuitton Pang Hee Cheah (Appointed on 23 February 2018)Tan Chor Teck (Appointed on 26 February 2018)U Chin Wei (Resigned on 23 November 2017) Dato’ Abdul Hamid bin Mustapha (Resigned on 23 November 2017)Tan Sri Pang Tee Chew (Resigned on 23 February 2018)

* Directors of the Company and certain subsidiaries

Other than as stated above, the names of the directors of the subsidiaries of the Company in office during the financial year and during the period from the end of the financial year to the date of the report are:

Dato’ Neoh Soon HiongDato’ David Frederick WilsonLyndon Alfred Felix

DIRECTORS’ INTERESTS

According to the Register of Directors’ shareholdings required to be kept by the Company under Section 59 of the Companies Act 2016 in Malaysia, the interests of directors in office at the end of the financial year in shares in the Company and its related corporations during the financial year were as follows:

Number of Ordinary Shares At At 1.4.2017 Bought Sold 31.3.2018

The CompanyDirect interestTang King Hua 350,000 - - 350,000 Tan Chor Teck - 45,000 - 45,000

The CompanyIndirect interestTan Chor Teck - 135,000 - 135,000 #

# Deemed interested in the shares held by Simansu Sdn. Bhd. by virtue of Section 8(4) of the Companies Act 2016 in Malaysia.

Other than as stated above, none of the other directors in office at the end of the financial year had any interest in shares of the Company and its related corporations during the financial year.


DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director of the Company has received or become entitled to receive any benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable, by the directors as disclosed in Directors’ Remuneration and Note 29 to the financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.

Neither during, nor at the end of the financial year, was the Company a party to any arrangements where the object is to enable the directors to acquire benefits by means of the acquisition of shares in, or debentures of the Company or any other body corporate.

INDEMNITY TO DIRECTORS AND OFFICERS

During the financial year, the total amount of indemnity coverage and insurance premium paid for the directors and officers of the Group were RM30,000,000 and RM37,470 respectively.

SUBSIDIARIES

The details of the Company’s subsidiaries are disclosed in Note 8 to the financial statements.

SIGNIFICANT EVENTS DURING AND SUBSEQUENT TO THE FINANCIAL YEAR

Details of significant events during and subsequent to the financial year end are disclosed in Note 34 to the financial statements.

AUDITORS’ REMUNERATION

The details of the auditors’ remuneration are disclosed in Note 22 to the financial statements.

AUDITORS

The auditors, Messrs. Baker Tilly Monteiro Heng, have expressed their willingness to continue in office.

The Company has agreed to indemnify the auditors of the Company as permitted under Section 289 of the Companies Act 2016 in Malaysia.

This report was approved and signed on behalf of the Board of Directors in accordance with a resolution of the directors:

DATUK IR. HAMZAH BIN HASANDirector

DATUK OH CHONG PENGDirector

Date: 2 July 2018


Group Company 2018 2017 2018 2017 Note RM’000 RM’000 RM’000 RM’000

ASSETSNon-current assetsProperty, plant and equipment 5 2,122 3,119 138 162 Goodwill on consolidation 6 5,369 5,369 - - Infrastructure development expenditure 7 2,612,584 1,591,843 - - Investment in subsidiaries 8 - - 160,746 160,746 Investment in associates 9 125,364 96,946 - - Other investment 10 - - 95,000 64,800 Trade receivables, other receivables and prepayments 11 - - 5,748 1,250

Total non-current assets 2,745,439 1,697,277 261,632 226,958

Current assetsTrade receivables, other receivables and prepayments 11 81,107 113,858 440,862 372,566 Tax recoverable 742 145 600 - Other investments 10 8,462 78,109 8,035 77,697 Deposits placed with licensed banks 12 1,176,367 1,004,602 5,700 25,770 Cash and bank balances 119,851 49,339 982 976

Total current assets 1,386,529 1,246,053 456,179 477,009

TOTAL ASSETS 4,131,968 2,943,330 717,811 703,967

Equity attributable to the owners of the CompanyShare capital 13 1,045,081 1,045,081 1,045,081 1,045,081 Accumulated losses (345,740) (359,421) (457,691) (444,825)

Equity attributable to the owners of the Company 699,341 685,660 587,390 600,256 Non-controlling interests 40,678 39,305 - -

Total equity 740,019 724,965 587,390 600,256

Non-current liabilities Deferred tax liabilities 14 6,347 3,749 1,679 300 Deferred income 15 586,637 286,162 - - Loans and borrowings 16 2,292,849 1,619,853 - - Other payables 17 63,349 19,743 - -

Total non-current liabilities 2,949,182 1,929,507 1,679 300

Current liabilitiesTrade and other payables 17 442,735 287,433 82,003 68,461 Amount due to customer for contract works 18 - - 46,739 33,560 Tax payable 32 1,425 - 1,390

Total current liabilities 442,767 288,858 128,742 103,411

TOTAL LIABILITIES 3,391,949 2,218,365 130,421 103,711

TOTAL EQUITY AND LIABILITIES 4,131,968 2,943,330 717,811 703,967

The accompanying notes form an integral part of these financial statements.

STATEMENTS OF FINANCIAL POSITIONas at 31 March 2018


STATEMENTS OF COMPREHENSIVE INCOME for the financial year ended 31 March 2018


Continuing operationsRevenue 19 868,047 817,489 178,653 233,492 Cost of sales 20 (858,848) (799,458) (178,639) (217,103)

Gross profit 9,199 18,031 14 16,389 Other income 5,671 9,406 9,946 9,261 Administrative expenses (4,363) (4,827) (3,662) (3,996)

Operating profit 10,507 22,610 6,298 21,654 Other expenses (21,330) (2,164) (17,918) (1,164)Finance costs 21 (198) (1,642) (198) (1,445)Share of results of associates, net of tax 28,418 23,727 - -

Profit/(loss) before tax 22 17,397 42,531 (11,818) 19,045 Income tax expense 23 (2,343) (4,404) (1,048) (2,691)

Profit/(loss) for the financial year from continuing operations 15,054 38,127 (12,866) 16,354

Discontinued operationLoss for the financial year from

discontinued operation, net of tax 24 - (3,019) - -

Profit/(loss) for the financial year 15,054 35,108 (12,866) 16,354 Other comprehensive income, net of taxItem that may be reclassified subsequently to

profit or loss- Reclassification adjustment of foreign exchange reserve - 529 - -

Total comprehensive income/(loss) for the financial year 15,054 35,637 (12,866) 16,354



Profit/(loss) for the financial year attributable to:Owners of the Company- From continuing operations 13,681 38,385 (12,866) 16,354 - From discontinued operation - (3,229) - -

13,681 35,156 (12,866) 16,354 Non-controlling interests- From continuing operations 1,373 (258) - - - From discontinued operation - 210 - -

1,373 (48) - -

15,054 35,108 - 16,354

Total comprehensive income/(loss) for the financial year attributable to:

Owners of the Company- From continuing operations 13,681 38,914 (12,866) 16,354 - From discontinued operation - (3,229) - -

13,681 35,685 (12,866) 16,354 Non-controlling interests

- From continuing operations 1,373 (258) - - - From discontinued operation - 210 - -

1,373 (48) - -

15,054 35,637 (12,866) 16,354

Earnings/(loss) per ordinary share (sen)Basic earnings/(loss) per ordinary share- from continuing operations 25 1.36 3.83 - from discontinued operation 25 - (0.32)

1.36 3.51

Diluted earnings/(loss) per ordinary share- from continuing operations 25 1.36 3.83 - from discontinued operation 25 - (0.32)

1.36 3.51


STATEMENTS OF COMPREHENSIVE INCOME (continued)for the financial year ended 31 March 2018


Attributable to owners of the Company Foreign Exchange Reserve Classified Non- Share Share Warrant as Held Accumulated controlling Total Capital Premium Reserve for Sale Losses Total Interests EquityGroup Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 April 2016 1,002,736 42,345 51,569 (529) (446,146) 649,975 42,964 692,939

Total comprehensive income/(loss) for the financial year

Profit/(loss) for the financial year - - - - 35,156 35,156 (48) 35,108

Other comprehensive income:

- Reclassification adjustment of foreign exchange reserve - - - 529 - 529 - 529

Total comprehensive income/(loss) - - - 529 35,156 35,685 (48) 35,637

Transactions with owners:Transition to no-par

value regime 13 42,345 (42,345) - - - - - - Expiry of warrants - - (51,569) - 51,569 - - - Disposal of subsidiary - - - - - - (2,107) (2,107)Dividend paid on

shares by subsidiary 8 - - - - - - (1,504) (1,504)

Total transactions with owners 42,345 (42,345) (51,569) - 51,569 - (3,611) (3,611)

At 31 March 2017 1,045,081 - - - (359,421) 685,660 39,305 724,965

At 1 April 2017 1,045,081 - - - (359,421) 685,660 39,305 724,965

Total comprehensive income for the financial year

Profit for the financial year - - - - 13,681 13,681 1,373 15,054

Total comprehensive income - - - - 13,681 13,681 1,373 15,054

At 31 March 2018 1,045,081 - - - (345,740) 699,341 40,678 740,019

STATEMENTS OF CHANGES IN EQUITYfor the financial year ended 31 March 2018


Share Share Warrant Accumulated Total Capital Premium Reserve Losses EquityCompany Note RM’000 RM’000 RM’000 RM’000 RM’000

At 1 April 2016 1,002,736 42,345 51,569 (512,748) 583,902

Total comprehensive income for the financial year

Profit for the financial year - - - 16,354 16,354

Total comprehensive income - - - 16,354 16,354

Transaction with owners:

Transition to no-par value regime 42,345 (42,345) - - -

Expiry of warrants - - (51,569) 51,569 -

Total transactions with owners 42,345 (42,345) (51,569) 51,569 -

At 31 March 2017 1,045,081 - - (444,825) 600,256

Total comprehensive loss for the financial year

Loss for the financial year - - - (12,866) (12,866)

Total comprehensive loss - - - (12,866) (12,866)

At 31 March 2018 1,045,081 - - (457,691) 587,390


STATEMENTS OF CHANGES IN EQUITY (continued)for the financial year ended 31 March 2018



CASH FLOWS FROM OPERATING ACTIVITIES:Profit/(loss) before taxation - Continuing operations 17,397 42,531 (11,818) 19,045 - Discontinued operation - (2,737) - -

17,397 39,794 (11,818) 19,045 Adjustments for:

Depreciation of property, plant and equipment 54 313 29 28 Distribution income from unit trusts (943) (4,898) (927) (4,885)Dividend income from a subsidiary - - - (6,429)Impairment loss on other investments 890 - 890 - Gain/(loss) on disposal of subsidiaries - 3,866 - (2,187)Loss on disposal of an associate - 1,457 - 928 Impairment loss on property, plant and equipment - 231 - - Impairment loss on receivables- trade and other receivables 20,388 - 16,999 - - subsidiaries - - - 209 Impairment loss on property,

plant and equipment no longer required (38) - - - Impairment loss on receivables no longer required - - (1,810) (6)Profit arising from IC Interpretation 12

Service Concession Arrangements (9,185) (18,491) - - Gain on disposal of property, plant and equipment (1,517) (40) - - Interest income:- deposits with licensed banks (696) (672) (696) (658)- murabahah stocks from subsidiary - - (4,497) (1,250)- others (1,227) - (1,227) - Interest expenses 198 1,642 198 1,445 Share of results of associates (28,418) (23,727) - - Waiver of debt (808) (197) (808) (197)

Operating loss before changes in working capital (3,905) (722) (3,667) 6,043

Changes In Working Capital:Inventories - 346 - - Receivables 4,312 (3,245) (33,428) 46,073 Payables (917) (1,975) 14,427 (17,876)Balances with customers for contract works - - 13,179 (14,739)

Cash flows used in operations (510) (5,596) (9,489) 19,501 Income tax paid (1,666) (1,381) (1,659) (1,001)Income tax refunded 3 - - - Interest paid (270) - - -

Net cash used in operating activities (2,443) (6,977) (11,148) 18,500

STATEMENTS OF CASH FLOWSfor the financial year ended 31 March 2018


STATEMENTS OF CASH FLOWS (continued)for the financial year ended 31 March 2018


CASH FLOWS FROM INVESTING ACTIVITIES:Additions to property, plant and equipment (22) (573) (5) - Additions to infrastructure

development expenditure 7 (873,023) (1,001,393) - - Interest received 736 672 736 658 Subcription of Murabahah loan stocks

of a subsidiary - - (30,200) (64,800)Net change in amount owing by subsidiaries - - (48,869) (22,494)Net change in amount owing by associates (12) 152 (79) 2,227 Proceeds from other investments 69,700 39,984 69,699 39,984 Proceeds from disposal of a subsidiary - 5,372 - 5,372 Proceeds from disposal of an associate - 42,364 - 42,364 Proceeds from disposal of property,

plant and equipment 1,911 40 - - (Placement)/upliftment of fixed deposits (357,961) 941,567 - -

Net cash (used in)/from investing activities (1,158,671) 28,185 (8,718) 3,311

CASH FLOWS FROM FINANCING ACTIVITIES:Drawdown of government support loan 710,000 400,000 - - Drawdown of term loan 238,345 284,755 - - Issuance of murabahah loan stocks 27,100 16,200 - - Dividend paid to minority shareholders

of a subsidiary - (1,504) - - Transaction costs of financing facilities - (23,553) -Interest paid - (77) (198) (77)Amount owing to a subsidiary of

a major shareholder 69,985 - - - Net change in amount owing to subsidiaries - - - 3,034

Net cash from/(used in) financing activities 1,045,430 675,821 (198) 2,957

NET CHANGE IN CASH AND CASH EQUIVALENTS (115,684) 697,029 (20,064) 24,768 CASH AND CASH EQUIVALENTS AT THE BEGINNING

OF THE FINANCIAL YEAR 1,049,956 352,927 26,746 1,978

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 934,272 1,049,956 6,682 26,746

ANALYSIS OF CASH AND CASH EQUIVALENTS:Deposits placed with licensed banks 1,176,367 1,004,602 5,700 25,770 Cash and bank balances 119,851 49,339 982 976 Less: Deposits with maturity of more than 3 months (361,946) (3,985) - -

934,272 1,049,956 6,682 26,746



(a) Reconciliation of liabilities arising from financing activities:

1 April 1 April Cash Fair value Other 31 March 2017 flows adjustments changes 2018 RM’000 RM’000 RM’000 RM’000 RM’000

Bond - Sukuk Murabahah (‘Sukuk”) 924,888 - - 1,779 926,667 Government support loan 360,491 710,000 (300,475) (3,651) 766,365 Term loans 318,661 238,345 - 172 557,178 Murabahah loan stocks 15,813 27,100 - (274) 42,639

1,619,853 975,445 (300,475) (1,974) 2,292,849


1. CORPORATE INFORMATION

WCE Holdings Berhad (“the Company”) is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office of the Company is Unit 30-01, Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur. The principal place of business of the Company is 37-2, No. 8, Jalan Anggerik Vanilla BE 31/BE, Kota Kemuning, Seksyen 31, 40460 Shah Alam, Selangor Darul Ehsan.

The Company is principally involved in investment holding. The principal activities of its subsidiaries and associates are disclosed in Note 8 and Note 9 to the financial statements.

There have been no significant changes in the nature of these principal activities during the financial year.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 2 July 2018.

2. BASIS OF PREPARATION

2.1 Statement of Compliance

The financial statements of the Group and of the Company have been prepared in accordance with the Financial Reporting Standards (“FRSs”) and the requirements of the Companies Act 2016 in Malaysia.

2.2 Basis of measurement

The financial statements of the Group and of the Company have been prepared under the historical cost basis, except as disclosed in the significant accounting policies in Note 3 to the financial statements.

2.3 Use of estimates and judgement

The preparation of financial statements in conformity with FRSs requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of the revenue and expenses during the reported period. It also requires directors to exercise their judgement in the process of applying the Group’s and the Company’s accounting policies. Although these estimates and judgement are based on the directors’ best knowledge of current events and actions, actual results may differ.

The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4 to the financial statements.

2.4 Functional and presentation currency

The individual financial statements of each entity in the Group are measured using the currency at the primary economic environment in which they operate (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency, and has been rounded to the nearest thousand, unless otherwise stated.

NOTES TO THE FINANCIAL STATEMENTS


2. BASIS OF PREPARATION (CONTINUED)

2.5 Adoption of amendments/improvements to FRSs

The Group and the Company have adopted the following amendments/improvements to FRSs that are mandatory for the current financial year:

Amendments/Improvements to FRSs

FRS 12 Disclosure of Interests in Other EntitiesFRS 107 Statement of Cash FlowsFRS 112 Income Taxes

The adoption of the above amendments/improvements to FRSs did not have any significant effect on the financial statements of the Group and of the Company, and did not result in significant changes to the Group’s and the Company’s existing accounting policies, except as discussed below:

Amendments to FRS 107 Statement of Cash Flows

Amendments to FRS 107 require entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including changes from cash flows and non-cash changes. The disclosure requirement could be satisfied in various ways, and one method is by providing reconciliation between the opening and closing balances in the statement of financial position for liabilities arising from financing activities.

The Group has applied the amendments prospectively and accordingly, has disclosed the reconciliation in the statements of cash flows.

2.6 New FRSs, amendments/improvements to FRSs and new IC Interpretation (“IC Int”) that have been issued, but yet to be effective

MASB Approved Accounting Standards, MFRSs

In conjunction with the planned convergence of FRSs with International Financial Reporting Standards as issued by the International Accounting Standards Board on 1 January 2012, the MASB had on 19 November 2011 issued a new MASB approved accounting standards, MFRSs (“MFRSs Framework”) for application in the annual periods beginning on or after 1 January 2012.

The MFRSs Framework is mandatory for adoption by all Entities Other Than Private Entities for annual periods beginning on or after 1 January 2012, with the exception of entities subject to the application of MFRS 141 Agriculture and/or IC Int 15 Agreements for the Construction of Real Estate (“Transitioning Entities”). The Transitioning Entities are given an option to defer the adoption of MFRSs Framework and shall apply the MFRSs framework for annual periods beginning on or after 1 January 2018. Transitioning Entities also include those entities that consolidate or equity account or proportionately consolidate another entity that has chosen to continue to apply the FRSs framework for annual periods beginning on or after 1 January 2012.

Accordingly, the Group and the Company which are Transitioning Entities have chosen to defer the adoption of the MFRSs framework. As such, the Group and the Company will prepare their first MFRSs financial statements using the MFRSs framework for financial year ending 31 March 2019. The main effects arising from the transition to the MFRSs Framework are discussed below.


NOTES TO THE FINANCIAL STATEMENTS (continued)


2.6 New FRSs, amendments/improvements to FRSs and new IC Interpretation (“IC Int”) that have been issued, but yet to be effective (continued)

MASB Approved Accounting Standards, MFRSs (continued)

Application of MFRS 1: First-time Adoption of Malaysian Financial Reporting Standards (“MFRS 1”)

MFRS 1 requires comparative information to be restated as if the requirements of MFRSs have always been applied, except when MFRS 1 allows certain elective exemptions from such full retrospective application or prohibits retrospective application of some aspects of MFRSs.

The Group and the Company are currently assessing the impact of adoption of MFRS 1, including identification of the differences in existing accounting policies as compared to the new MFRSs and the use of optional exemptions as provided for in MFRS 1. As at the date of authorisation of issue of the financial statements, accounting policy decisions or elections have not been finalised. Thus, the impact of adoption of MFRS 1 cannot be determined and estimated reliably until the process is completed.

MFRS 9 Financial Instruments

MFRS 9 replaces the guidance of MFRS 139, Financial Instruments: Recognition and Measurement on the classification and measurement of financial assets and liabilities, on impairment of financial assets, and on the hedge accounting.

Key requirements of MFRS 9:

• MFRS 9 introduces an approach for classification and measurement of financial assets which is driven by cash flow characteristics and the business model in which an asset is held. The new model also results in a single impairment model being applied to all financial instruments.

In essence, if a financial asset is a simple debt instrument and the objective of the entity’s business model within which it is held is to collect its contractual cash flows, the financial asset is measured at amortised cost. In contrast, if that asset is held in a business model the objective of which is achieved by both collecting contractual cash flows and selling financial assets, then the financial asset is measured at fair value in the statements of financial position, and amortised cost information is provided through profit or loss. If the business model is neither of these, then fair value information is increasingly important, so it is provided both in the profit or loss and in the statements of financial position.

• MFRS 9 introduces a new, expected-loss impairment model that will require more timely recognition of expected credit losses which replaces the “incurred loss” model in MFRS 139. Specifically, this Standard requires entities to account for expected credit losses from when financial instruments are first recognised and to recognise full lifetime expected losses on a more timely basis. The model requires an entity to recognise expected credit losses at all times and to update the amount of expected credit losses recognised at each reporting date to reflect changes in the credit risk of financial instruments. This model eliminates the threshold for the recognition of expected credit losses, so that it is no longer necessary for a trigger event to have occurred before credit losses are recognised. Trade receivables and contract assets that do not contain a significant financing component shall always measure the loss allowance at an amount equal to lifetime expected credit losses.

• MFRS 9 introduces a substantially-reformed model for hedge accounting, with enhanced disclosures about risk management activity. The new model represents a significant overhaul of hedge accounting that aligns the accounting treatment with risk management activities, enabling entities to better reflect these activities in their financial statements. In addition, as a result of these changes, users of the financial statements will be provided with better information about risk management and the effect of hedge accounting on the financial statements.

The Group is currently assessing the impact of the adoption of this standard.



2.6 New FRSs, amendments/improvements to FRSs and new IC Interpretation (“IC Int”) that have been issued, but yet to be effective (continued)

MASB Approved Accounting Standards, MFRSs (continued)

MFRS 15 Revenue from Contracts with Customers

The core principle of MFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with the core principle by applying the following steps:

(i) identify the contracts with a customer;

(ii) identify the performance obligation in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract;

(v) recognise revenue when (or as) the entity satisfies a performance obligation.

MFRS 15 also includes new disclosures that would result in an entity providing users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows from contracts with customers.

The following MFRSs and IC Interpretations will be withdrawn on the application of MFRS 15:

MFRS 111 Construction Contracts

MFRS 118 Revenue

IC Interpretation 13 Customer Loyalty Programmes

IC Interpretation 15 Agreements for the Construction of Real Estate

IC Interpretation 18 Transfers of Assets from Customers

IC Interpretation 131 Revenue – Barter Transactions Involving Advertising Services

The Group is currently assessing the impact of the adoption of this standard.

MFRS 16 Leases

Currently under MFRS 117 Leases, leases are classified either as finance leases or operating leases. A lessee recognises on its statement of financial position assets and liabilities arising from the finance leases.

MFRS 16 eliminates the distinction between finance and operating leases for lessees. All leases will be brought onto its statement of financial position except for short-term and low value asset leases.

On initial adoption of MFRS 16, there may be impact on the accounting treatment for leases, which the Group as a lessee currently accounts for as operating leases. On adoption of this standard, the Group will be required to capitalise its rented premises and equipment on the statements of financial position by recognising them as ‘right-of-use’ assets and their corresponding lease liabilities for the present value of future lease payments.

The Group and the Company plan to adopt this standard when it becomes effective in the financial year beginning 1 April 2019 by applying the transitional provisions, and include the required additional disclosure in their financial statements of that year.



3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unless otherwise stated, the following accounting policies have been applied consistently to all the financial years presented in the financial statements of the Group and of the Company.

3.1 Economic Entities and Basis of Consolidation

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

(i) Subsidiaries and business combination

Subsidiaries are entities (including structured entities) over which the Group is exposed, or has rights, to variable returns from its involvement with the acquirees and has the ability to affect those returns through its power over the acquirees.

The financial statements of subsidiaries are included in the consolidated financial statements from the date the Group obtains control of the acquirees until the date the Group losses control of the acquirees.

The Group applies the acquisition method to account for business combination from the acquisition date.

For a new acquisition, goodwill is initially measured at cost, being the excess of the following:

• the fair value of the consideration transferred, calculated as the sum of the acquisition-date fair value of assets transferred (including contingent consideration), the liabilities incurred to former owners of the acquiree and the equity instruments issued by the Group. Any amounts that relate to pre-existing relationships or other arrangements before or during the negotiations for the business combination, that are not part of the exchange for the acquire, will be excluded from the business combination accounting and be accounted for separately; plus

• the recognised amount of any non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date (the choice of measurement basis is made on an acquisition-by-acquisition basis); plus

• if the business combination is achieved in stages, the acquisition-date fair value of the previously held equity interest in the acquiree; less

• the net fair value of the identifiable assets acquired and the liabilities (including contingent liabilities) assumed at the acquisition date.

The accounting policy for goodwill is set out in Note 3.6 to the financial statements.

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

If the business combination is achieved in stages, the Group remeasures the previously held equity interest in the acquiree to its acquisition-date fair value, and recognises the resulting gain or loss, if any, in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss or transferred directly to retained earnings on the same basis as would be required if the acquirer had disposed directly of the previously held equity interest.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the business combination occurs, the Group uses provisional fair value amounts for the items for which the accounting is incomplete. The provisional amounts are adjusted to reflect new information obtained about facts and circumstances that existed as of the acquisition date, including additional assets or liabilities identified in the measurement period. The measurement period for completion of the initial accounting ends as soon as the Group receives the information it was seeking about facts and circumstances or learns that more information is not obtainable, subject to the measurement period not exceeding one year from the acquisition date.


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

3.1 Economic Entities and Basis of Consolidation (continued)

(i) Subsidiaries and business combination (continued)

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 from the consolidated statement of financial position. Any gain or loss arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an associate, a joint venture, an available-for-sale financial asset or held for trading financial asset.

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The difference between the Group’s share of net assets before and after the change, and the fair value of the consideration received or paid, is recognised directly in equity.

(ii) Non-controlling interests

Non-controlling interests represent the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company and are presented separately in the consolidated statement of financial position within equity.

Losses attributable to the non-controlling interest are allocated to the non-controlling interests even if the losses exceed the non-controlling interest.

(iii) Associates

Associates are entities over which the Group has significant influence, but not control, to the financial and operating policies.

Investment in associates are accounted for in the consolidated financial statements using the equity method.

Under the equity method, the investment in associates are initially recognised at cost. The cost of investment includes transaction costs. Subsequently, the carrying amount is adjusted to recognise changes in the Group’ share of net assets of the associate.

When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest including any long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the associate.

When the Group ceases to have significant influence over an associate, any retained interest in the former associate at the date when significant influence is lost is measured at fair value and this amount is regarded as the initial carrying amount of an available-for-sale financial asset or a held for trading financial asset. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss.

When the Group’s interest in an associate decreases but does not result in a loss of significant influence, any retained interest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gains or losses previously recognised in other comprehensive income are also reclassified proportionately to the profit or loss if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.




3.1 Economic Entities and Basis of Consolidation (continued)

(iv) Joint arrangements

Joint arrangements arise when the Group and another party or parties are bound by a contractual arrangement, and the contractual arrangement gives the Group and the other party or parties, joint control of the arrangement. Joint control exists when there is contractually agreed sharing of control of an arrangement whereby decisions about the relevant activities require the unanimous consent of the parties sharing control.

Joint arrangements are classified and accounted for as follows:

• A joint arrangement is classified as a “joint operation” when the Group has rights to the assets and obligations for the liabilities relating to the arrangement.

• A joint arrangement is classified as “joint venture” when the Group has rights to the net assets of the arrangements.

The Group has assessed the nature of its joint arrangement and determined them to be a joint operation. The Group accounts for its share of the assets (including its share of any assets held jointly), the liabilities (including its share of any liabilities incurred jointly), its revenue from sale of its share of the output arising from the joint operation, its shares of the revenue from the sale of output by the joint operation and its expenses (including its share of any expenses incurred jointly).

The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in accordance with the FRSs applicable to the particular assets, liabilities, revenues and expenses.

Profits and losses resulting from transactions between the Group and its joint operation are recognised in the Group’s financial statements only to the extent of unrelated investors’ interests in the joint operation.

(v) Transactions eliminated on consolidation

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

Unrealised gains arising from transactions with equity-accounted associates are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

3.2 Separate Financial Statements

In the Company’s statement of financial position, investment in subsidiaries, joint ventures and associates are measured at cost less any accumulated impairment losses, unless the investment is classified as held for sale or distribution. The cost of investment includes transaction costs. The policy for the recognition and measurement of impairment losses shall be applied on the same basis as would be required for impairment of non-financial assets as disclosed in Note 3.18(ii) to the financial statements.



3.3 Financial Instruments

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

Financial instruments are recognised initially at fair value, except for financial instruments not measured at fair value through profit or loss, they are measured at fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial instruments.

(i) Subsequent measurement

The Group and the Company categorise the financial instruments as follows:

(a) Financial assets

Financial assets at fair value through profit or loss

Financial assets are classified as financial assets at fair value through profit or loss when the financial assets is either held for trading, including derivatives or it is designated into this category upon initial recognition.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value with the gain or loss recognised in profit or loss.

Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at costs.

Loans and receivables

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

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method less accumulated impairment losses, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 3.18(i) to the financial statements. Gains and losses are recognised in profit or loss through the amortisation process.

Held-to-maturity investments

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

Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method less accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 3.18(i) to the financial statements. Gains and losses are recognised in profit or loss through the amortisation process.

Available-for-sale financial assets

Available-for-sale financial assets comprise investment in equity and debt securities that are designated as available for sale or are not classified in any of the three preceding categories.

Subsequent to initial recognition, available-for-sale financial assets are measured at fair value. Gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except for impairment losses and foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair values hedges which are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in profit or loss when the Group’s and the Company’s right to receive payment is established.




3.3 Financial Instruments (continued)

(i) Subsequent measurement (continued)

(b) Financial liabilities

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading, including derivatives or financial liabilities designated into this category upon initial recognition.

Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value with the gain or loss recognised in profit or loss.

Derivatives that are linked to and must be settled by delivery of equity instruments that do not have a quoted price in an active market for identical instruments whose fair values otherwise cannot be reliably measured are measured at cost.

The Group has not designated any financial liabilities at fair value through profit or loss.

Other financial liabilities

Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss through the amortisation process.

(ii) Financial Guarantee Contracts

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

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs that are directly attributable to the issuance of the guarantee. Subsequent to initial recognition, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation.

(iii) Derecognition

A financial asset or a part of it is derecognised when, and only when, the contractual rights to receive the cash flows from the financial asset expire or control of the asset is not retained or substantially all of the risks and rewards of ownership of the financial asset are transferred to another party. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

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

(iv) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is presented in the statements of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.



3.4 Property, Plant and Equipment

(i) Recognition and measurement

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment loss, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 3.18(ii) to the financial statements.

Cost of assets includes expenditure that are directly attributable to the acquisition of the asset and any other cost that are 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 cost of materials, direct labour, and any other direct attributable costs but excludes internal profit. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs in Note 3.10 to the financial statements.

Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as a separate items of property, plant and equipment.

(ii) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that the future economic benefits associated with the part will flow to the Group or the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the profit or loss as incurred.

(iii) Depreciation

Freehold land has an unlimited useful life and therefore is not depreciated.

All other property, plant and equipment are depreciated on straight-line basis by allocating their depreciable amounts over their remaining useful lives at the following rates:Leasehold land 79 - 95 yearsBuildings 2%Renovation 10 - 20%Plant and machinery 10 - 20%Furniture, fixtures and fittings 10 - 20%Office equipment 10 - 50%Motor vehicles 20%

The residual value, useful lives and depreciation methods are reviewed at the end of each reporting period and adjusted as appropriate.

(iv) Derecognition

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




3.5 Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets.

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases that do not meet this criterion are classified as operating leases.

(i) Lessee accounting

If an entity in the Group is a lessee in a finance lease, it capitalises the leased asset and recognises the related liability. The amount recognised at the inception date is the fair value of the underlying leased asset or, if lower, 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 assets.

Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge 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 charged as expenses in the periods in which they are incurred.

The capitalised leased asset is classified by nature as property, plant and equipment.

For operating leases, the Group does not capitalise the leased asset or recognise the related liability. Instead lease payments under an operating lease are recognised as an expense on the straight-line basis over the lease term unless another systematic basis is more representative of the time pattern of the user’s benefit.

(ii) Lessor accounting

If an entity in the Group is a lessor in a finance lease, it derecognises the underlying asset and recognises a lease receivable at an amount equal to the net investment in the lease. Finance income is recognised in profit or loss based on a pattern reflecting a constant periodic rate of return on the lessor’s net investment in the finance lease.

If an entity in the Group is a lessor in operating lease, the underlying asset is not derecognised but is presented in the statement of financial position according to the nature of the asset. Lease income from operating leases is recognised in profit or loss on a straight-line basis over the lease term, unless another systematic basis is more representative of the time pattern in which use benefit derived from the leased asset is diminished.

3.6 Goodwill on Consolidation

Goodwill arising from business combinations is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. After initially recognition, goodwill is measured at cost less any accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 3.18 to the financial statements.

In respect of equity-accounted associates and joint venture, goodwill is included in the carrying amount of the investment and is not tested for impairment individually. Instead, the entire carrying amount of the investment is tested for impairment as a single asset when there is objective evidence of impairment.



3.7 Other Intangible Asset

The Group recognises infrastructure development expenditure as an intangible asset. This arises from a service concession arrangement where it has a right to charge users for usage of the concession infrastructure under the intangible asset model, as defined in IC Interpretation 12 Service Concession Arrangements (“IC Int 12”). Intangible asset received as consideration for providing construction work in a service concession arrangement is measured at fair value upon initial recognition. Subsequent to initial recognition, intangible asset is measured at cost less accumulated amortisation and any accumulated impairment loss.

The intangible asset model, as defined in IC Int 12, applies to service concession arrangements where the grantor has not provided a contractual guarantee in respect of the amount receivable for constructing and operating the assets. Under this model, during construction phase, the Group records an intangible asset representing the right to charge users of the public service and recognise profits from the construction of the public service infrastructure. Income and expenses associated with construction contracts are recognised in accordance with FRS 111 Construction Contracts.

Upon completion of construction works and commencement of road tolling operations, the intangible asset is to be amortised. Amortisation is calculated to write off the cost of intangible assets arising from a service concession arrangement on systematic basis over the estimated useful life. Both the period and method of amortisation are reviewed annually.

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific assets to which it relates. All other expenditure is recognised in the profit or loss as incurred.

At the end of each of the reporting period, the Group assesses whether there is any indication of impairment. If such indication exists, the carrying amount is assessed and written down immediately to its recoverable amount.

3.8 Non-current Assets Held for Sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than continuing use. The criteria for held for sale classification is regarded as met only when:

• the asset is available for immediate sale in present condition;

• the management is committed to a plan to sell the asset and the asset is actively marketed for sale at a price that is reasonable in relation to its current fair value; and

• the sale is expected to be completed within one year from the date of classification and action required to complete the plan indicates that is unlikely that significant changes to the plan will be made or that the sale will withdrawn.

Immediately before classification as held for sale, the assets, are remeasured in accordance with the Group’s accounting policies. Thereafter, generally the assets are measure at the lower of carrying amount and fair value less cost to sell.

Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.

Intangible assets and property, plant and equipment once classified as held for sale are not amortised or depreciated. In addition, equity accounting of equity-accounted associates and joint venture ceases once classified as held for sale.

Assets and liabilities classified as held for sale are presented separately as current items in the statements of financial position.




3.9 Construction Contracts

Construction works are stated at cost plus attributable profit less progress billings. Cost comprises direct labour, material costs, sub-contract sum and an allocated proportion of directly related overheads. Administrative and general expenses are charged to the profit or loss as and when incurred.

When the outcome of a construction contract can be reliably estimated, contract revenue is recognised by using the stage of completion method. The stage of completion is measured by reference to the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs. Costs incurred in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. They are presented as inventories, prepayments or other assets, depending on their nature.

When the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised only to the extent of contract costs incurred that is probable will be recoverable.

Irrespective of whether the outcome of a construction contracts can be estimated reliably, when it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised in profit or loss immediately. Provision is made for all anticipated losses on construction work. Provision for warranties is made for expected/estimated repair costs for making good certain defects and damages during the warranty periods.

When costs incurred on construction contracts plus recognised profits (less recognised losses) exceed progress billings, the balance is shown as amount due from customers for contract works. When progress billings exceed costs incurred plus recognised profit (less recognised losses), the balance is shown as amount due to customers for contract works.

3.10 Borrowing Costs

Borrowing costs are interests and other costs that the Group and the Company incur in connection with borrowing of funds.

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

Borrowing costs that are 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 added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

The Group and the Company begin capitalising borrowing costs when the Group and the Company have incurred the expenditures for the asset, incurred related borrowing costs and undertaken activities that are necessary to prepare the asset for its intended use or sale.

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



3.11 Government Grants

Grants from the government are recognised at their fair values where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions.

Where the grant relates to an asset, it is recognised as deferred income in the statements of financial position and transferred to profit or loss over the expected useful life of the related asset. Where the grant relates to an expense item, it is recognised in profit or loss, under the heading of “other income”, on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed.

The benefit derived from a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates, which will be credited to the statements of comprehensive income over the expected life of the related assets on bases consistent with the depreciation or amortisation of the related assets for which the loan was granted to the Group.

3.12 Employee Benefits

(i) Short term employee benefits

Short-term employee benefit obligations in respect of wages, salaries, social security contributions, annual bonuses, paid annual leave, sick leave and non-monetary benefits are recognised as an expense in the financial year where the employees have rendered their services to the Group and the Company.

(ii) Defined contribution plans

As required by law, the Group and the Company contribute to the Employees Provident Fund (“EPF”), the national defined contribution plan. Such contributions are recognised as an expense in the profit or loss in the period in which the employees render their services.

3.13 Contingencies

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

Contingent liability is also referred as a present obligation that arises from past events but is not recognised because:

(a) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(b) the amount of the obligation cannot be measured with sufficient reliability.

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




3.14 Foreign Currencies

(i) Translation of foreign currency transactions

Foreign currency transactions are translated to the respective functional currencies of the Group entities at the exchange rates prevailing at the dates of the transactions.

At the end of each reporting date, monetary items denominated in foreign currencies are retranslated at the exchange rates prevailing at the reporting date.

Non-monetary items denominated in foreign currencies that are carried at fair value are retranslated at the rates prevailing at the dates the fair values were determined. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated at the historical rates as at the dates of the initial transactions.

Foreign exchange differences arising on settlement or retranslation of monetary items are recognised in profit or loss except for monetary item that is designated as a hedging instrument in either a cash flow hedge or a hedge of the Group’s net investment of a foreign operation. When settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, exchange differences are recognised in profit or loss in the separate financial statements of the parent company or the individual financial statements of the foreign operation. In the consolidated financial statements, the exchange differences are considered to form part of a net investment in a foreign operation and are recognised initially in other comprehensive income until its disposal, at which time, the cumulative amount is reclassified to profit or loss.

The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e. translation differences on items whose fair value gain or loss is recognised in other comprehensive income or profit or loss are also recognised in other comprehensive income or profit or loss, respectively).

(ii) Translation of foreign operations

The assets and liabilities of foreign operations denominated in the functional currency different from the presentation currency, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at exchange rates prevailing at the reporting date. The income and expenses of foreign operations are translated at exchange rates at the dates of the transactions.

Exchange differences arising on the translation are recognised in other comprehensive income. However, if the foreign operation is a non-wholly owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests.

When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in foreign exchange translation reserves related to that foreign operation is reclassified to profit or loss. For a partial disposal not involving loss of control of a subsidiary that includes a foreign operation, the proportionate share of cumulative amount in foreign exchange translation reserve is reattributed to non-controlling interests. For partial disposals of associates or joint ventures that do not result in the Group losing significant influence or joint control, the proportionate share of the cumulative amount in foreign exchange translation reserve is reclassified to profit or loss.



3.15 Taxes

(a) Income Tax

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

(i) Current tax

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

(ii) Deferred tax

Deferred tax is recognised using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts in the statements of financial position. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences, unused tax losses and unused tax credits, to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.

Deferred tax is not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries, associates and interest in joint ventures, except where the Group is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

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

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

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

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




3.15 Taxes (continued)

(b) Goods and services tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”) except:

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

• receivables and payables that are stated with the amount of GST included.

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

3.16 Discontinued operation

A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and:

• represents a separate major line of business or geographical area of operations;

• is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or

• is a subsidiary acquired exclusively with a view to resale.

Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale. When an operation is classified as a discontinued operation, the comparative statements of profit or loss and other comprehensive income is re-presented as if the operation had been discontinued from the start of the comparative period.

3.17 Revenue Recognition

The Group recognised revenue when the amount of revenue can be reliably measured, it is probable that future economic benefit will flow to the entity and specific criteria have been met for each of the Group’s activities as described below:

(i) Construction

Revenue from construction is recognised based on the stage of completion method as described in Note 3.9 to the financial statements.

(ii) Sales of goods

Revenue is recognised upon delivery of products and customers’ acceptance, net of sales tax, discounts and returns and when the significant risk and reward of ownership have been passed to the buyer.

(iii) Interest income

Interest income is recognised using the effective interest method.

(iv) Management fee

Management fee is recognised upon completion of services rendered in accordance with the terms of the agreement entered into.



3.17 Revenue Recognition (continued)

(v) Rental income

Rental income is recognised on a straight-line basis over the lease period.

(vi) Distribution income from unit trusts

Distribution income from unit trusts is recognised when the right to receive the payment is established.

3.18 Impairment of Assets

(i) Impairment and uncollectibility of financial assets

At each reporting date, all financial assets (except for financial assets categorised as fair value through profit or loss and investment in subsidiaries, associates and joint ventures) are assessed whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the financial asset that can be reliably estimated. Losses expected as a result of future events, no matter how likely, are not recognised.

Evidence of impairment may include indications that the debtors or a group of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Loans and receivables and held-to-maturity investments

The Group and the Company first assess whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If there is no objective evidence for impairment exists for an individually assessed financial asset, whether significant or not, the Group and the Company include the financial asset in a group of financial assets with similar credit risk characteristics and collectively assess them for impairment. Financial assets that are individually assessed for impairment for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment.

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

If, in a subsequent period, the amount of the impairment loss decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed by adjusting an allowance account to the extent that the carrying amount of the financial asset does not exceed what the amortised cost would have been had the impairment not been recognised.

Loans together with the associated allowances are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group and the Company. If a write-off is later recovered, the recovery is credited to the profit or loss.




3.18 Impairment of Assets (continued)

(i) Impairment and uncollectibility of financial assets (continued)

Available-for-sale financial assets

In the case of equity investments classified as available for sale, a significant or prolonged decline in the fair value below its cost is considered to be objective evidence of impairment. The Group and the Company use their judgement to determine what is considered as significant or prolonged decline, evaluating past volatility experiences and current market conditions.

When a decline in the fair value of an available-for-sale financial asset has been recognised in the other comprehensive income, the cumulative loss that had been recognised in other comprehensive income shall be reclassified from equity to profit or loss as a reclassification adjustment even though the financial asset has not been derecognised. The amount of cumulative loss that is reclassified from equity to profit or loss shall be the difference between its cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss.

Impairment losses on available-for-sale equity investments are not reversed through profit or loss in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income.

For available-for-sale debt investments, impairment losses are subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to loss event occurring after the recognition of the impairment loss in profit or loss.

(ii) Impairment of non-financial assets

The carrying amounts of non-financial assets (except for inventories, amount due from customers for contract work, deferred tax assets and non-current assets 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, the Group and the Company make an estimate of the asset’s recoverable amount. For goodwill and intangible assets that have indefinite useful life and are not yet available for use, the recoverable amount is estimated at each reporting date.

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

The recoverable amount of an asset of CGU is the higher of its fair value less costs of disposal and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. In determining the fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.

Where the carrying amount of an asset exceed its recoverable amount, the carrying amount of asset is reduced to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.



3.18 Impairment of Assets (continued)

(ii) Impairment of non-financial assets (continued)

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

Impairment loss in respect of goodwill is not reversed. In respect of other assets, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. An impairment loss is reversed only if there has been a change in the estimates used to determine the assets 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 previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

3.19 Cash and Cash Equivalents

For the purpose of the statements of cash flows, cash and cash equivalents comprise cash on hand, bank balances and deposits and other short-term, highly liquid investments with a maturity of three months or less, that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents are presented net of bank overdrafts.

3.20 Share Capital

(i) Ordinary shares

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

Prior to Companies Act 2016 which came into operation on 31 January 2017, incremental external costs directly attributable to the issuance of new shares are deducted against the share premium account. Effective on 31 January 2017 and subsequent period, incremental external costs directly attributable to the issuance of new shares are deducted against equity.

Dividends on ordinary shares are recognised in equity in the period in which they are declared.

(ii) Warrants

Warrants are classified as equity. The issue of ordinary shares upon exercise of the warrants are treated as new subscription of ordinary shares for the consideration equivalent to the warrants exercise price.

3.21 Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chief Executive Officer of the Group that makes strategic decisions.




3.22 Fair Value Measurements

Fair value of an asset or a liability, except for lease transactions, is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market.

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

When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair value are categorised into different levels in a fair value hierarchy based on the input used in the valuation technique as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

The Group recognises transfers between levels of the fair value hierarchy as of the date of the event or change in circumstances that caused the transfers.

3.23 Earnings Per Share

The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”). Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.

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


4. SIGNIFICANT ACCOUNTING JUDGEMENT, ESTIMATES AND ASSUMPTIONS

Significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have significant effect in determining the amount recognised in the financial year included the following:

(i) Impairment of goodwill

Goodwill is tested for impairment annually and at other times when such indicators exist. This requires an estimation of the value-in-use of the cash-generating units to which goodwill is allocated.

When value-in-use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. Further details of the carrying value, the key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are disclosed in Note 6 to the financial statements.

(ii) Impairment of infrastructure development expenditure

The Group tests infrastructure development expenditure for impairment in accordance with its accounting policy. The Group makes an estimate of the infrastructure development expenditure’s recoverable amount based on the value-in-use calculation using the cash flow projections from financial budgets approved by the Group covering the remaining period of the concession agreement.

Significant judgement is required in the estimation of the present value of future cash flows generated from the infrastructure development expenditure, which involve uncertainties and are significantly affected by assumptions used and judgement made regarding estimates of future cash flows and discount rate. Changes in assumptions could significantly affect the results of the Group’s tests for impairment of infrastructure development expenditure.

The carrying amount of the infrastructure development expenditure is disclosed in Note 7 to the financial statements.

(iii) Impairment of amounts owing by former associate and its subsidiaries

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

The directors assessed events that resulted in objective evidence of impairment and estimated the amount of impairment loss on the amounts owing by the former associate and its subsidiaries.

The carrying amount of the Group’s and the Company’s receivables at the reporting date is disclosed in Note 11 to the financial statements.

(iv) Contingent liability

Determination of the treatment of contingent liabilities in the financial statements is based on the Group’s view of the expected outcome of the applicable contingency, after taking appropriate legal advice. The contingent liabilities of the Group is disclosed in Note 27 to the financial statements.



5. PROPERTY, PLANT AND EQUIPMENT

Furniture, fixtures Freehold Leasehold and Office Motor Group land land Buildings Renovation fittings equipment vehicles Total2018 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

CostAt 1 April 2017 117 13,688 11,625 802 69 618 1,267 28,186 Additions - - - - 1 21 - 22 Disposal - (454) - - - - - (454)Write-off - - - (484) - - - (484)

At 31 March 2018 117 13,234 11,625 318 70 639 1,267 27,270

Accumulated DepreciationAt 1 April 2017 - 1,975 823 247 43 466 732 4,286 Depreciation for the financial year - 7 17 421 7 45 166 663 Disposal - (60) - - - - - (60)Write-off - - - (484) - - - (484)

At 31 March 2018 - 1,922 840 184 50 511 898 4,405

Accumulated Impairment LossAt 1 April 2017 31 10,873 9,877 - - - - 20,781 Reversal of impairment loss

no longer required (15) - (23) - - - - (38)

At 31 March 2018 16 10,873 9,854 - - - - 20,743

Carrying AmountAt 31 March 2018 101 439 931 134 20 128 369 2,122


5. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Furniture, fixtures Freehold Leasehold Plant and and Office Motor Group land land Buildings Renovation machinery fittings equipment vehicles Total2017 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

CostAt 1 April 2016 117 15,387 15,909 1,665 10,745 69 1,150 1,352 46,394 Additions - - - 210 101 - 99 163 573 Disposal - - - - - - - (223) (223)Disposal of a subsidiary - (1,699) (4,284) (1,073) (10,846) - (631) (25) (18,558)

At 31 March 2017 117 13,688 11,625 802 - 69 618 1,267 28,186

Accumulated Depreciation

At 1 April 2016 - 2,087 1,289 332 9,873 33 898 751 15,263 Depreciation for the

financial year - 28 98 89 109 10 73 229 636 Disposals - - - - - - - (223) (223)Disposals of a subsidiary - (140) (564) (174) (9,982) - (505) (25) (11,390)

At 31 March 2017 - 1,975 823 247 - 43 466 732 4,286

Accumulated Impairment Loss

At 1 April 2016 31 10,873 9,646 - - - - - 20,550 Impairment for the

financial year - - 231 - - - - - 231

At 31 March 2017 31 10,873 9,877 - - - - - 20,781

Carrying AmountAt 31 March 2017 86 840 925 555 - 26 152 535 3,119



5. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Office Company Renovation equipment Total2018 RM’000 RM’000 RM’000

CostAt 1 April 2017 215 46 261 Additions - 5 5

At 31 March 2018 215 51 266

Accumulated DepreciationAt 1 April 2017 83 16 99 Depreciation for the financial year 22 7 29

At 31 March 2018 105 23 128

Carrying AmountAt 31 March 2018 110 28 138

2017

CostAt 1 April 2016 215 46 261 Additions - - -

At 31 March 2017 215 46 261

Accumulated DepreciationAt 1 April 2016 61 10 71 Depreciation for the financial year 22 6 28

At 31 March 2017 83 16 99

Carrying AmountAt 31 March 2017 132 30 162

(a) Impairment Loss

During the financial year, a reversal of impairment loss of RM37,600 (2017: Nil) was recognised in profit or loss under other income.

The estimated recoverable amount of RM570,000 (2017: RM415,000) on freehold land and buildings is determined using fair value less costs of disposal, which is based on comparison method by reference to independent valuation carried out by a professional valuer. The fair value is within Level 3 of the fair value hierarchy. The key assumptions used in estimating the fair value are the price per square foot and the adjustments on the differences in location, size and shapes, accessibility, infrastructure available and other value considerations.

(b) Land Titles

As at the reporting date, the titles to the freehold and leasehold land and buildings of the Group with net carrying amount of RM1,052,000 (2017: RM1,444,000) are not registered in the name of the Group.


6. GOODWILL ON CONSOLIDATION

Group 2018 2017 RM’000 RM’000

At costAt the beginning/end of the financial year 8,955 8,955

Accumulated impairment lossAt the beginning/end of the financial year (3,586) (3,586)

Carrying amountAt the end of the financial year 5,369 5,369

Goodwill on consolidation has been allocated to the Group’s cash generating units (“CGU”) identified according to business segments as follows:

Group 2018 2017 RM’000 RM’000

Toll concession 5,369 5,369

The recoverable amount of the goodwill on consolidation is determined based on a value-in-use calculation using cash flow projections from financial budgets approved by the management as follows:

• Cash flows covering a 47-year (2017: 48-year) period which is the remaining period of the concession;

• West Coast Expressway Sdn. Bhd’s revenue will mainly be derived from toll collection based on projected traffic-volume and where toll rates are expected to increase at regular intervals;

• Operational expenses were projected by the management based on past experience; and

• The pre-tax discount rate of 6.43% (2017: 6.04%) was used in determining the value-in-use of the goodwill on consolidation. The discount rate was estimated based on the weighted average cost of capital derived from industry average.

The value assigned to the key assumptions represents the management’s assessment on the future trends of the expressway operation services industry and are based on both external and internal sources. The Directors are of the opinion that the key bases and assumption used are reasonable and there is no impairment to the carrying amount of goodwill.

Sensitivity to changes in assumption

There are no reasonable possible changes in key assumptions which would cause the carrying value of goodwill on consolidation to exceed its recoverable amount.



7. INFRASTRUCTURE DEVELOPMENT EXPENDITURE

Group 2018 2017 RM’000 RM’000

At costAt the beginning of the financial year 1,591,843 691,411 Additions 1,020,741 900,432

At the end of the financial year 2,612,584 1,591,843

The recoverable amount of the infrastructure development expenditure on consolidation is determined based on a value-in-use calculation using cash flow projections from financial budgets approved by the management and the value assigned to the key assumptions are disclosed in Note 6 to the financial statements.

Included in the additions of infrastructure development expenditure during the financial year are as follows:

Group 2018 2017 RM’000 RM’000

Interest expense 89,939 35,895

During the financial year, the Group made the following cash payments for infrastructure development expenditure:

Group 2018 2017 RM’000 RM’000

Additions during the financial year 1,020,741 900,432 Movement in payables and accruals (137,924) 115,206 Movement in GST refundable - 4,569 Depreciation related to infrastructure development expenditure (609) (323)Profit arising from IC Int 12 Service Concession Arrangement (9,185) (18,491)

Cash payments 873,023 1,001,393

On 2 January 2013, West Coast Expressway Sdn. Bhd. (“WCESB”), an 80%-owned subsidiary of the Company signed the Concession Agreement (“CA”) with the Government of Malaysia in relation to the West Coast Expressway Project (“WCE Project”). The WCE Project involves the development of the West Coast Expressway from Banting in Selangor to Taiping in Perak with 233km of tolled highway. The project cost is estimated to be in the region of RM6 billion and the construction period is for 5 years.


7. INFRASTRUCTURE DEVELOPMENT EXPENDITURE (CONTINUED)

The key agreed terms of the CA are as follows:

(i) the WCE Project is a build-operate-transfer project with a concession period of 50 years. The concession period will be extended for another 10 years if the agreed targeted Internal Rate of Return (“IRR”) is not achieved;

(ii) to enhance the viability of the WCE Project, a Government Support Loan (“GSL”) of RM2.24 billion at an interest rate of 4% per annum is provided by the Government of Malaysia subject to the Government Support Loan Facility Agreement executed with the Ministry of Finance as disclosed in Note 16(b);

(iii) the land acquisition cost of up to RM980 million for the WCE Project will be borne by the Government of Malaysia;

(iv) toll revenue in excess of an agreed traffic volume will be shared as follows:

• during the GSL tenure, 70% of the excess revenue will be utilised as repayment or prepayment of the GSL; and

• after settlement of the GSL, on the basis of 30:70 between the Government of Malaysia and WCESB if the targeted IRR is not achieved and 70:30 if the actual IRR is more than the targeted IRR.

(v) the construction works of the WCE Project will be implemented by WCESB through a tender committee;

(vi) liquidated and ascertained damages of RM100,000 shall be paid by WCESB to the Government of Malaysia for each day of delay of construction if the construction is not completed by the agreed completion date; and

(vii) cost savings from the construction costs shall be utilised to repay the GSL amount or for other purposes as may be determined by the Government of Malaysia.

On 19 May 2014, the Government of Malaysia approved the appointment of a consortium comprising IJM Construction Sdn. Bhd. and the Company (known as the “IJMC-KEB Joint Venture”) as the Turnkey/Engineering and Procurement Contractor for the construction of the WCE Project.

On 25 August 2014, WCESB received a letter from Lembaga Lebuhraya Malaysia to confirm the date of commencement of construction.

8. INVESTMENT IN SUBSIDIARIES

Company 2018 2017 RM’000 RM’000

Unquoted shares, at costAt the beginning of the financial year 177,396 180,581 Disposal - (3,185)

177,396 177,396 Less: Accumulated impairment loss (16,650) (16,650)

At the end of the financial year 160,746 160,746



8. INVESTMENT IN SUBSIDIARIES (CONTINUED)

The following information relates to the subsidiaries all of which have their principal place of business and are incorporated in Malaysia:

Effective Ownership Interest/Voting Rights

2018 2017Name of Company % % Principal Activities

Direct subsidiariesAngsana Mestika Sdn. Bhd. 100 100 Inactive.KEB Management Sdn. Bhd. 100 100 Inactive.KEB Plantations Holdings Sdn. Bhd. 100 100 Inactive.Keuro Leasing Sdn. Bhd. 100 100 Inactive.Keuro Trading Sdn. Bhd. 100 100 Inactive.WCE Highway Services Sdn. Bhd.

(formerly known as Ambang Vista Sdn. Bhd.)100 100 Inactive.

West Coast Expressway Sdn. Bhd. 80 80 Design, construction and development of the West Coast Expressway Project and managing its toll operations.

Indirect subsidiaries

Held through KEB Plantations Holdings Sdn. Bhd.KEB Builders Sdn. Bhd. 100 100 Inactive.Tiasa Ria Sdn. Bhd. 63 63 Inactive.

Held through KEB Management Sdn. Bhd.Tiasa Ria Sdn. Bhd. 7 7 Inactive.

Held through WCE Highway Serivces Sdn. Bhd. (formerly known as Ambang Vista Sdn. Bhd.)Ratus Prestij Sdn. Bhd. 100 100 Dormant.

Held through Keuro Trading Sdn. Bhd.Maximix Sdn. Bhd. 100 100 Inactive.

Held through Maximix Sdn. Bhd.Perkasa Jati Holdings Sdn. Bhd. 100 100 Inactive.



(a) Disposal of subsidiary

2017

The Company had on 21 June 2016 entered into a Share Purchase Agreement (“SPA”) binding the Company, KEB Management Sdn. Bhd., a wholly owned subsidiary of the Company and United Geofelt Sdn. Bhd. for the disposal of the Group’s entire equity interest comprising 2,535,000 ordinary shares of RM1 each and 650,000 5% cumulative redeemable preference shares of RM1 each held in the total issued and paid-up capital of Asian Resinated Felt Sdn. Bhd. (“ARF”) to United Geofelt Sdn. Bhd., at a total consideration of RM5,372,059.

On 19 January 2017, the Company completed the disposal of its entire equity interest in ARF, comprising 2,535,000 ordinary shares and 650,000 preference shares, for a cash consideration of RM4,722,059 for the ordinary shares and RM650,000 for the preference shares.

The effects of the disposal of ARF on the financial position of the Group are as follows:

2017 RM’000

AssetsProperty, plant and equipment 7,168 Inventories 1,805 Trade and other receivables 2,797 Prepayments 153 Tax recoverable 1,137 Cash and bank balances 633

13,693

LiabilitiesDeferred tax liabilities 172 Trade and other payables 2,176

2,348

11,345 Non controlling interest (2,107)

Net assets 9,238 Cash consideration received (5,372)

Loss on disposal of subsidiaries 3,866

Cash consideration received 5,372 Less: Cash and cash equivalents of subsidiary (633)

Net cash inflows on disposal 4,739




(b) Non-controlling interests in subsidiaries

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

2018 Other West Coast individually Expressway immaterial Sdn. Bhd. subsidiaries Total RM’000 RM’000 RM’000

NCI percentage of ownership interest and voting interest 20%Carrying amount of NCI 40,685 (7) 40,678

Profit/(Loss) allocated to NCI in current financial year 1,375 (2) 1,373

Summarised financial information before intra-group elimination

As at 31 March 2018Non-current assets 2,665,580 Current assets 1,318,922 Non-current liabilities (2,980,533)Current liabilities (800,542)

Net assets 203,427

Financial year ended 31 March 2018Revenue 914,786 Profit for the financial year 6,876 Total comprehensive income 6,876

Cash flows from operating activities 2,265 Cash flows used in investing activities (1,218,133)Cash flows from financing activities 1,120,304

Net decrease in cash and cash equivalents (95,564)



(b) Non-controlling interests in subsidiaries (continued)

2017 Asian Other West Coast Resinated individually Expressway Felt immaterial Sdn. Bhd. Sdn. Bhd. subsidiaries Total RM’000 RM’000 RM’000 RM’000

NCI percentage of ownership interest and voting interest 20% -

Carrying amount of NCI 39,310 - (5) 39,305

(Loss)/Profit allocated to NCI in current financial year (257) 210 (1) (48)

Summarised financial information before intra-group elimination

As at 31 March 2017Non-current assets 1,638,260 - Current assets 1,065,194 - Non-current liabilities (1,974,564) - Current liabilities (532,337) -

Net assets 196,553 -

Financial year ended 31 March 2017Revenue 861,554 7,820 Profit for the financial year 6,277 846 Total comprehensive income 6,277 846

Cash flows (used in)/from operating activities (1,835) 957 Cash flows (used in)/from investing activities (964,016) 3,065 Cash flows from/(used in) financing activities 742,203 (7,933)

Net decrease in cash and cash equivalents (223,648) (3,911)

(c) There are no significant restrictions on the Group’s ability to access or use the assets of the subsidiaries and settle the liabilities of the Group except for West Coast Expressway Sdn. Bhd. (“WCESB”) which is restricted to make any distribution of profits and create any contract or obligation to pay money or money’s worth to the Group unless prior approval is obtained from the non-controlling interests shareholder and upon fulfilment of certain financial covenants underlying the borrowings of WCESB. The assets to which such restrictions apply are the cash and cash equivalents and other investments included in the consolidated financial statements totalling RM1,289,743,000 (2017: RM1,027,330,000).



9. INVESTMENT IN ASSOCIATES

Investment in associates consists of:

Group Company 2018 2017 2018 2017 RM’000 RM’000 RM’000 RM’000

At CostUnquoted shares 400 400 - -

400 400 - - Share of post-acquisition reserves, net of dividends received 124,964 96,546 - -

125,364 96,946 - -

Investment in associates is accounted for in the consolidated financial statements using the equity method.

The following information relates to the associates which have principal place of business and are all incorporated in Malaysia:

Effective Ownership Interest/Voting Rights

2018 2017

Name of Companies % % Nature of the relationship

Held through direct subsidiary

Held through KEB Management Sdn. Bhd.Radiant Pillar Sdn. Bhd. + 10 10 Investment holding and

property development.

Held through indirect subsidiary

Held through KEB Builders Sdn. Bhd.Radiant Pillar Sdn. Bhd. + 30 30 Investment holding and

property development.Ambang Usaha Sdn. Bhd. 50 50 Dormant.

+ This company was audited by another firm of chartered accountants other than Messrs. Baker Tilly Monteiro Heng.


9. INVESTMENT IN ASSOCIATES (CONTINUED)

The following table summarises the information of the Group’s material associates, adjusted for any differences in accounting policies and reconciles the information to the carrying amount of the Group’s interest in the associate.

2018 Radiant Pillar Other Sdn. Bhd. individually and its immaterial subsidiaries associate TotalGroup RM’000 RM’000 RM’000

Summarised financial informationAs at 31 March 2018Non-current assets 181,760 Current assets 1,013,006 Non-current liabilities (40,188)Current liabilities (841,058)

Net assets 313,520

Financial year ended 31 March 2018Profit for the financial year 71,047 Other comprehensive income -

Total comprehensive income 71,047

Included in the total comprehensive income is:Revenue 432,155

As at 31 March 2018Group’s share of net assets 125,408 (44) 125,364

Group’s share of resultsFinancial year ended 31 March 2018Group’s share of profit/(loss) 28,419 (1) 28,418 Group’s share of other comprehensive income - - -

Group’s share of total comprehensive income/(loss) 28,419 (1) 28,418



9. INVESTMENT IN ASSOCIATES (CONTINUED)

2017 Radiant Pillar Other Sdn. Bhd. individually and its immaterial subsidiaries associate TotalGroup RM’000 RM’000 RM’000

Summarised financial informationAs at 31 March 2017Non-current assets 95,683 Current assets 1,082,337 Non-current liabilities (132,676)Current liabilities (802,978)

Net assets 242,366

Financial year ended 31 March 2017Profit for the financial year 63,451 Other comprehensive income - Total comprehensive income 63,451

Included in the total comprehensive income is:Revenue 359,613

As at 31 March 2017Group’s share of net assets less accumulated impairment losses 96,946 - 96,946

Group’s share of resultsFinancial year ended 31 March 2017Group’s share of profit/(loss) 24,675 (948) 23,727 Group’s share of other comprehensive income - - -

Group’s share of total comprehensive income/(loss) 24,675 (948) 23,727


10. OTHER INVESTMENTS


Non-currentHeld-to-maturity investments- Private debt securities - - 95,000 64,800

CurrentFinancial assets at fair value through profit or loss- Unquoted unit trusts in Malaysia 5,213 73,931 4,786 73,519

Available-for-sale (“AFS”) financial asset- Quoted equity securities in Malaysia 3,249 4,178 3,249 4,178

8,462 78,109 8,035 77,697

Market Value- Quoted equity securities 3,249 4,178 3,249 4,178

Private debt securities are investment in the Murabahah loan stocks issued by a subsidiary of the Company. The profit rate and effective rate of the Murabahah loan stocks is at 10% and 6.68% - 6.98% (2017: 10% and 6.68% - 6.77%) respectively per annum, cumulative and non-compounding. The maturity date of the Murabahah loan stocks is on 12 July 2056. The profit payment and principal redemption will be subject to the issuer’s financing covenants.

Unit trusts are funds invested mainly in money market and fixed income instruments and are managed by investment management companies.



11. TRADE AND OTHER RECEIVABLES


Non-CurrentOther receivablesAmount owing by subsidiary - - 5,748 1,250

CurrentTrade receivablesExternal parties 11,971 11,971 - - Amount owing by subsidiary - - 108,493 70,352 Amount owing by subsidiaries of former associate 696 696 - -

12,667 12,667 108,493 70,352

Less: Accumulated impairment lossExternal parties (11,971) (11,971) - - Amount owing by subsidiaries of former associate (688) - - -

(12,659) (11,971) - -

Trade receivables, net 8 696 108,493 70,352

Other receivablesExternal parties 125,633 126,855 79,585 80,737 GST refundable 4,072 6,443 4,072 6,443 Amount owing by subsidiaries - - 351,109 302,241 Amount owing by associates 100 88 80 79 Amount owing by former associate and its subsidiaries 27,854 27,384 24,684 24,684 Refundable deposits 86 88 13 15

157,745 160,858 459,543 414,199

Less: Accumulated impairment lossExternal parties (85,481) (85,481) (39,851) (39,851)Amount owing by subsidiaries - - (70,317) (72,127)Amount owing by associates (11) (11) (11) (11)Amount owing by former associate and its subsidiaries (19,700) - (16,999) -

(105,192) (85,492) (127,178) (111,989)

Other receivables, net 52,553 75,366 332,365 302,210

Prepayments 28,546 37,796 4 4

Total current receivables 81,107 113,858 440,862 372,566

Total trade receivables, other receivables and prepayments 81,107 113,858 446,610 373,816


11. TRADE AND OTHER RECEIVABLES (CONTINUED)

(a) Trade and other receivables

Trade receivables are non-interest bearing and are generally on 30 to 90 (2017: 30 to 90) days terms. Other credit terms are assessed and approved on a case-by-case basis.

Ageing analysis on trade receivables

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


Neither past due nor impaired - - 55,823 -

Past due 1 - 30 days but not impaired - - - - Past due 31 - 120 days but not impaired - - 52,670 70,190 Past due more than 120 days but not impaired 8 696 - 162

8 696 52,670 70,352 Impaired 12,659 11,971 - -

12,667 12,667 108,493 70,352

Receivables that are neither past due nor impaired

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

Receivables that are past due but not impaired

There were no significant concentration of credit risk of the Group’s and the Company’s trade receivables that are past due but not impaired and are unsecured in nature other than the amount owing by subsidiaries. The management is confident that the amounts due are still recoverable as there has not been a significant change in the credit quality of these receivables.

Receivables that are impaired

The Group’s and the Company’s trade and other receivables that are impaired at the reporting date are as follows:


Individually impairedTrade and other receivables- nominal amounts 117,869 97,481 127,251 112,073 Less: Accumulated Impairment loss (117,851) (97,463) (127,178) (111,989)

18 18 73 84



11. TRADE AND OTHER RECEIVABLES (CONTINUED)

(a) Trade and other receivables (continued)

Movements in accumulated impairment loss:


Trade receivablesAt the beginning of the financial year 11,971 12,059 - - Charge for the financial year 688 - - - Disposal/struck off of subsidiaries - (88) - -

At the end of the financial year 12,659 11,971 - -

Other receivablesAt the beginning of the financial year 85,492 85,618 111,989 111,786 Charge for the financial year 19,700 - 16,999 209 Reversal of impairment loss - (6) (1,810) (6)Disposal/struck off of subsidiaries - (120) - -

At the end of the financial year 105,192 85,492 127,178 111,989

Total impairment loss 117,851 97,463 127,178 111,989

Receivables that are individually determined to be impaired at the reporting date relate to debtors that are with long outstanding debts, in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

(b) Amount owing by subsidiaries (non-trade)

The amount owing by subsidiaries is non-trade in nature, unsecured, non-interest bearing, repayable on demand and expected to be settled in cash or equity. Included in non-current amount owing by subsidiary is an amount of RM5,748,000 (2017: RM1,250,000) representing interest receivable from the Murabahah loan stocks issued by West Coast Expressway Sdn. Bhd. (“WCESB”). The profit repayment will be subject to the fulfilment of the WCESB’s financing covenants.

(c) Amount owing by associates (non-trade)

The amount owing by associates of the Group and of the Company is non-trade in nature, unsecured, repayable on demand, expected to be settled in cash and non-interest bearing.

(d) Other receivables

Included in other receivables of the Group and of the Company are:

(i) an amount of RM39,187,000 (2017: RM38,000,000) representing amount receivable from the disposal of second tranche of 400,000,000 ordinary shares held in Talam Transform Berhad, a former associate of the Company which was originally due to be completed and receivable by 16 August 2017. During the financial year, the Company and the purchaser mutually agreed to extend the completion date to 16 August 2018 and the amount of RM38,000,000 shall bear interest at a rate of 5% per annum for the extended period; and

(ii) an amount of RM1,046,576 and RM632,976 respectively owing by IJM Group, a major shareholder of the Company which are unsecured, interest free and repayable on demand in cash.

(e) Prepayments

Included in prepayments of the Group is an amount of RM28,542,000 (2017: RM33,790,000) which represent transaction costs in relation to the undrawn loan facilities of the Group.


12. DEPOSITS PLACED WITH LICENSED BANKS

The effective interest rates as at the reporting date of the deposits placed with licensed banks range from 2.90% to 4.60% (2017: 3.20% to 4.60%) per annum. The deposits placed with licensed banks have maturity periods ranging from 1 day to 12 months (2017: 1 day to 12 months).

Included in the deposits placed with licensed banks of the Group is an amount of RM1,170,667,000 (2017: RM978,832,000) representing the excess funds from the drawdown of financing facilities for the purpose of financing WCE Project and therefore is restricted from use in other operations.

13. SHARE CAPITAL Group and Company 2018 2017 Number Number of Shares of Shares ‘000 Units RM’000 ‘000 Units RM’000

Issued and fully paid:Ordinary sharesAt the beginning of the financial year 1,002,736 1,045,081 1,002,736 1,002,736 Transition to no-par value regime - - - 42,345

At the end of the financial year 1,002,736 1,045,081 1,002,736 1,045,081

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

The Companies Act 2016 (the “Act”), which came into operation on 31 January 2017, abolished the concept of authorised share capital and par value of share capital. Consequently, the amounts standing to the credit of the share premium account of RM42,345,550 became part of the Company’s share capital pursuant to the transitional provisions set out in Section 618(2) of the Act. Notwithstanding this provision, the Company may within 24 months from the commencement of the Act, use the amount standing to the credit of its share premium account of RM42,345,550 for purposes as set out in Section 618(3). There is no impact on the number of ordinary shares in issue or the relative entitlement of any of the members as a result of this transition.



14. DEFERRED TAX LIABILITIES


At the begninning of the year 3,749 1,683 300 - Charge to profit or loss (Note 23) 2,598 2,238 1,379 300 Disposal of a subsidiary - (172) - -

At the end of the year 6,347 3,749 1,679 300

Deferred tax assets (7,050) (6,473) - - Deferred tax liabilities 13,397 10,222 1,679 300

6,347 3,749 1,679 300

Representing the tax effects of:

Deferred tax assets:Property, plant and equipment (265) (235) - - Unutilised tax losses (6,785) (6,238) - -

(7,050) (6,473) - -

Deferred tax liabilities:Infrastructure development expenditure 13,397 10,222 - - Interest from murabahah stock and other receivable - - 1,679 300

13,397 10,222 1,679 300

15. DEFERRED INCOME

Group 2018 2017 RM’000 RM’000

Non-currentGovernment grant:At 31 March 586,637 286,162

West Coast Expressway Sdn. Bhd. (“WCESB”), an 80%-owned subsidiary of the Company, had entered into Government Support Loan Facility Agreement with the Government of Malaysia for a term loan facility of RM2.24 billion at interest rate of 4% per annum to finance the construction and operation of West Coast Expressway Project (“WCE Project”).

As at 31 March 2018, the Group received total drawdown of RM1,360,000,000 (2017: RM650,000,000) from the Government Support Loan Facility. The repayment of the loan commences on the 6th year from first draw down. The fair value of the loan is estimated using the prevailing market interest rate of 6.03% – 6.49% (2017: 6.03% – 6.49%) per annum for an equivalent loan. The difference of gross proceeds and the fair value of the loan is recognised as deferred income.


16. LOANS AND BORROWINGS

Group 2018 2017 Note RM’000 RM’000

Non-current (secured)Bond - Sukuk Murabahah (“Sukuk”) (a) 926,667 924,888 Government support loan (b) 766,365 360,491 Term loans (c) 557,178 318,661

2,250,210 1,604,040

Non-current (unsecured)Murabahah loan stocks (d) 42,639 15,813

Total loans and borrowings 2,292,849 1,619,853

(a) Bond - Sukuk Murabahah (“Sukuk”)

Group 2018 2017 RM’000 RM’000

Proceeds from issuance of bond 1,000,000 1,000,000 Transaction costs (73,333) (75,112)

926,667 924,888

On 28 August 2015, West Coast Expressway Sdn. Bhd. (“WCESB”), an 80%-owned subsidiary of the Company, issued RM1,000,000,000 secured Sukuk under an Islamic Securities Programme.

The Sukuk was issued at its nominal value with profit rates ranging from 4.95% to 5.38% per annum. It is repayable in 10 annual instalments, commencing on the 12th year after the issue date.

As at 31 March 2018, the effective profit rate of the Sukuk range from 5.84% to 6.06% (2017: 5.84% to 6.06%) per annum.

The Sukuk is guaranteed by financial guarantors and contains covenants which require WCESB to maintain a financial service cover ratio of at least 1.25 times and debt equity ratio of not greater than 80:20 upon the commencement of toll collection.

(b) Government support loan

On 30 June 2015, WCESB entered into a Government Support Loan Facility Agreement with the Government of Malaysia for a term loan facility of RM2.24 billion at interest rate of 4% per annum.

The Group received total drawdown of RM1,360,000,000 (2017: RM650,000,000) from the Government Support Loan Facility. It is repayable by 108 quarterly instalment, commencing on the 6th year from first draw down. The fair value of the loan is estimated using the prevailing market interest rate of 6.03% – 6.49% (2017: 6.03% – 6.49%) per annum for an equivalent loan. The difference between the gross proceeds and the fair value of the loan is recognised as deferred income as disclosed in Note 15.

(c) Term loans

The effective interest rate of the term loans of the Group as at the reporting date ranges from 6.51% to 6.57% (2017: 6.69% to 6.80%) per annum. It is repayable within 12 years from the first drawdown date.



16. LOANS AND BORROWINGS (CONTINUED)

(d) Murabahah loan stocks

During the financial year, WCESB issued Islamic loan stocks based on the Shariah principle of Murabahah via Tawarruq arrangement under redeemable unsecured Murabahah stocks. The profit rate and effective rate of the Murabahah loan stocks is at 10% and 6.68% - 6.98% (2017: 10% and 6.68% - 6.77%) respectively per annum, cumulative and non-compounding. The maturity date of Murabahah loan stocks is on 12 July 2056. The profit payment and the principal redemption will be subject to the fulfilment of the WCESB’s financing covenants.

As at 31 March 2018, the Group has issued Murabahah loan stocks to the minority shareholder of WCESB.

(e) Security

The bond, government support loan and term loans are secured as follows:

(i) Commercial Financier’s Debenture;

(ii) Assignment and Charge I

• an assignment of all WCESB’s present and future rights, title, interest and benefits in, to and under the WCE Project Document including any and all monies which may now or hereafter or from time to time be due, paid or payable to WCESB under or arising from or in connection with any of the WCE Project Document; and

• all property as may be added thereto from time to time by way of retention investment and/or reinvestment of income.

(iii) Assignment and Charge II

• Proceeds of all toll collection, income and other revenue of WCESB arising from or in connection with the Concession Agreement (“CA”);

• any compensation payable to WCESB for any reduction in toll rate under the CA;

• WCESB’s present and future rights, interest, title and benefits in relation to the Money Insurance;

• the credit balance and all of WCESB’s present and future rights, title, interest and benefit in and to the Credit Balance and each of the Designated Accounts and all other accounts as may be required to be opened in relation to the financing of the WCE Project;

• all Permitted Investment made or held by or on behalf of WCESB or standing to the credit of or payable to WCESB, the proceeds and all income and or profit earned or derived from the Permitted Investment and all of WCESB’s present and future rights, title, interest and benefit therein and thereto; and

• the Shareholder Agreement and all of the WCESB’s present and future rights, title interest and benefits therein and thereto.

(iv) Assignment and Charge III

• the credit balance and all of the WCESB’s present and future rights, title, interest and benefit in and to the Credit Balance and each of the Disbursement Account; and

• all Permitted Investment in relation to the Disbursement Account made or held by or on behalf of WCESB or standing to the credit of or payable to WCESB, the proceeds and all income and or profit earned or derived from the Permitted Investment and all of WCESB’s present and future rights, title, interest and benefit therein and thereto.


17. TRADE AND OTHER PAYABLES


Non-CurrentAccruals 63,349 19,743 - -

CurrentTrade payables

Trade payables 189,302 191,530 64,325 60,590 Accruals 132,369 61,159 - -

321,671 252,689 64,325 60,590

Other payablesOther payables 92,081 10,099 12,813 2,969 Deposits 133 133 - - Accruals 15,915 11,499 2,017 1,976 Amount owing to associates 403 403 - - Amount owing to subsidiaries of former associate 12,532 12,610 2,848 2,926

121,064 34,744 17,678 7,871

Total trade and other payables 506,084 307,176 82,003 68,461

(a) Trade payables

The Group’s normal trade credit term ranges from 14 to 90 (2017: 14 to 90) days.

Included in trade payables of the Group is retention sum payable of RM925,000 (2017: RM925,000).

Included in trade payables of the Group and of the Company is an amount of RM314,957,000 and RM64,325,000 (2017: RM239,527,000 and RM60,590,000) respectively owing to IJM Group, a major shareholder of the Company.

(b) Other payables

Included in other payables of the Group and of the Company are amounts of RM87,846,000 and RM11,312,530 (2017: RM6,269,000 and RM1,766,000) respectively owing to IJM Group, a major shareholder of the Group and of the Company. The amounts owing are unsecured, interest free and repayable on demand in cash except for the amounts of RM11,312,530 (2017: RM1,766,000) which bear interest ranges from 6.00% to 7.90% (2017: 7.85% to 8.85%) per annum.

(c) Accruals

Included in non-current and current accruals of the Group are amounts of RM76,509,000 (2017: RM28,705,000) which represent interest charges in relation to the borrowings of the Group.

(d) Amount owing to associates

The amount owing to associates is non-trade in nature, unsecured, repayable on demand, expected to be settled in cash and non-interest bearing.



18. AMOUNT DUE TO CUSTOMER FOR CONTRACT WORKS


Aggregate costs incurred to date - - 517,320 338,680 Recognised profits - - 10,470 10,457

- - 527,790 349,137 Progress billings - - (574,529) (382,697)

- - (46,739) (33,560)

Amount due to customer for contract works included in current liabilities - - (46,739) (33,560)

Construction contracts costs recognised as contract expenses during the financial year - - 178,640 217,103

Progress billings recognised as contract revenue during the financial year - - 178,653 227,063

This balance relates to the construction works of WCE Project billed by IJMC-KEB Joint Venture to a subsidiary of the Company, WCESB (“Customer”) pursuant to the Turnkey/Engineering and Procurement Contract.

During the financial year, the following expenses have been included in the aggregate costs incurred to date:

Company 2018 2017 RM’000 RM’000

Staff costs - Wages, salaries and bonus 423 - - Defined contribution retirement plan 30 - - Other employee benefits 1 -

19. REVENUE


Dividend received from subsidiary - - - 6,429 Construction contracts 868,047 817,489 178,653 227,063

868,047 817,489 178,653 233,492

The revenue from construction contracts of the Group represents construction revenue recognised pursuant to IC Interpretation 12 Service Concession Arrangements from the construction of a public service infrastructure.


20. COST OF SALES


Construction contracts 858,848 798,998 178,639 217,103 Leasing, management services and investment holding - 460 - -

858,848 799,458 178,639 217,103

The cost of sales from construction contracts of the Group represents construction cost recognised pursuant to IC Interpretation 12 Service Concession Arrangements from the construction of a public service infrastructure.

21. FINANCE COSTS


Others- Amount owing to associate - 197 - - - Other payables 198 77 198 77 Unwinding of discounts on trade payables - 1,368 - 1,368

198 1,642 198 1,445



22. PROFIT/(LOSS) BEFORE TAX

Other than disclosed elsewhere in the financial statements, the following items have been charged/(credited) in arriving at profit before tax:


Auditor’s remuneration- statutory audit

- current year 259 254 140 140 - under/(over) accrual in prior years 1 (6) - (5)

- other services - 13 - 13 Depreciation of property, plant and equipment 663 389 29 28 Directors’ remuneration- fees 855 885 855 885 - other emoluments 47 24 47 - Impairment loss on:- trade and other receivables 20,388 - 16,999 - - subsidiaries - - - 209 - other investments 890 - 890 - - property, plant and equipment - 231 - - Rental of premises 112 87 37 41 Staff costs- Salaries, wages, overtime, bonus and allowances 5,404 6,787 1,123 1,337 - Employees Provident Fund 775 782 163 188 - Other staff related expenses 58 63 58 62 Loss on disposal of an assosiate classified as held for sale - 1,457 - 928 Distribution income from unit trusts (943) (4,898) (927) (4,885)Gain on disposal of subsidiary - - - (2,187)Gain on disposal of property, plant and equipment (1,517) (40) - - Impairment loss on other receivable no longer required - (6) (1,810) (6)Interest income- deposits with licensed banks (696) (396) (696) (396)- murabahah loan stocks - - (4,497) (1,250)- other receivables (1,187) - (1,187) - - others (40) (262) (40) (262)Rental income (31) (24) - - Reversal of impairment loss on property, plant and equipment (38) - - - Waiver of debt (808) (197) (808) (197)

Included in staff costs are director’s remuneration amounting to RM2,022,000 (2017: RM1,714,000) and an estimated monetary value of benefits-in-kind received and receivable by director from the Group amounting to RM24,000 (2017: RM24,000).


23. INCOME TAX EXPENSE

The major components of income tax expense for the financial years ended 31 March 2018 and 2017 are as follows:


Continuing operations Current taxationcurrent year (4) (2,399) - (2,390)- over/(under) accrual in prior year 331 233 331 (1)- real property gain tax (72) - - -

255 (2,166) 331 (2,391)Deferred taxation (Note 14)- current year (2,603) (2,239) (1,379) (300)- over accrual in prior year 5 1 - -

(2,598) (2,238) (1,379) (300)

Tax expense for the financial year (2,343) (4,404) (1,048) (2,691)

Income tax expense attributable to continuing operations (2,343) (4,404) (1,048) (2,691)Income tax expense attributable to discontinuing

operations (Note 24) - (282) - -

(2,343) (4,686) (1,048) (2,691)

Domestic income tax is calculated at the Malaysian statutory income tax rate of 24% (2017: 24%) of the estimated assessable profit for the financial year.

The reconciliations from the tax amount at the statutory income tax rate to the Group’s and the Company’s tax expense are as follows:


Profit/(loss) before taxation from continuing operations 17,397 42,531 (11,818) 19,045 Loss before taxation from discontinued operations - (2,737) - -

17,397 39,794 (11,818) 19,045

Taxation at statutory tax rate of 24% (4,175) (9,550) 2,836 (4,571)

Tax effects of:- non-deductible expenses (6,074) (2,678) (5,061) (1,427)- utilisation of deferred tax assets previously not recognised - 461 - - - tax effect on share of results of associates 6,820 5,695 - - - non-taxable income 822 1,152 846 3,308 - real property gain tax (72) - - - - over/(under) accrual in prior year 336 234 331 (1)

Tax expense for the financial year (2,343) (4,686) (1,048) (2,691)



23. INCOME TAX EXPENSE (CONTINUED)

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


Unutilised tax losses 77,040 77,040 - - Unabsorbed capital allowances 767 767 - - Other taxable differences (2) (2) - -

77,805 77,805 - -

Potential deferred tax assets not recognised at 24% 18,673 18,673 - -

24. DISCONTINUED OPERATION

2017

As mentioned in Note 8(a) above, the Company had disposed a subsidiary on 19 January 2017 and hence discontinued its manufacturing and trading of industrial products business. The comparative consolidated statement of comprehensive income has been re-presented to show the discontinued operation separately from continuing operation.

(a) The results attributable to the discontinued operation were as follows:

Group 2017 RM’000

Revenue 7,820 Cost of sales (5,340)

Gross profit 2,480 Other income 26 Administrative and selling expenses (1,377)

Profit from operations of discontinued operation 1,129 Loss on disposal of a subsidiary (3,866)

Loss before taxation from discontinued operation (2,737)

TaxationCurrent taxation:- current year (282)- over accrual in prior year -

(282)

Loss after taxation from discontinued operation (3,019)Other comprehensive income, net of tax -

Total comprehensive income from discontinued operation (3,019)


24. DISCONTINUED OPERATION (CONTINUED)

(b) The following items had been charged/crediting in arriving at profit/(loss) before taxation :

Group 2017 RM’000 Audit fees- statutory- current year 10 Depreciation of property, plant and equipment 247 Rental of premises - current year 16 Staff costs- Salaries, wages, overtime, bonus and allowances 1,597 - Employees Provident Fund 152 - Other staff related expenses 55 Interest income - deposits with licensed banks 14

(c) Cash flows generated used in discontinued operation:

Group 2017 RM’000

Operating activities 957 Investing activities 3,065 Financing activities (7,933)

Net cash outflows (3,911)

25. EARNINGS/(LOSS) PER ORDINARY SHARE

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

Basic earnings/(loss) per ordinary share is calculated by dividing the net profit/(loss) for the financial year attributable to owners of the Company by the weighted average number of ordinary shares in issue during the financial year:

Group 2018 2017 RM’000 RM’000

Net profit/(loss) for the financial year attributable to owners of the Company- from continuing operations 13,681 38,385 - from discontinued operation - (3,229)

13,681 35,156

Weighted average number of shares (‘000 unit) 1,002,736 1,002,736

Basic earnings/(loss) per ordinary share (sen):- from continuing operations 1.36 3.83 - from discontinued operation - (0.32)

1.36 3.51



26. INTEREST IN JOINT OPERATION

Details of the joint operation are as follows:

Participated by the Company Name of Joint Operation Participation Interest Economic Activity

2018 2017% %

Unincorporated in MalaysiaIJM Construction Sdn. Bhd. - Kumpulan Europlus Berhad Joint Venture (“IJMC - KEB JV”)*

30 30 Undertake engineering, procurement and construction of West Coast Expressway Project

* audited by another firm of chartered accountants other than Baker Tilly Monteiro Heng.

Pursuant to FRS 11 Joint Arrangements, IJMC – KEB JV is deemed to be a joint operation of the Company as the parties involved that have joint control have rights to the assets and obligations for the liabilities relating to the arrangement.

27. CONTINGENT LIABILITY (UNSECURED)

A subsidiary of the Company was indebted to a bank which had on 7 September 2010 auctioned and disposed of a piece of land belonging to a subsidiary of Talam Transform Berhad (“Talam”), a former associate, which secured the borrowings of this subsidiary. Talam had taken legal action against the bank for foreclosing and auctioning the pledged land. The difference between the auction price and the market value of the land amounts to RM33.7 million. In the previous financial year, the High Court has dismissed Talam’s claim against the Bank and subsequently, Talam had filed an appeal to the Court of Appeal. On 22 August 2016, the Court of Appeal dismissed this appeal. On 19 September 2016, Talam further filed a Notice of Motion for leave to appeal to the Federal Court which was dismissed on 2 March 2017. Based on correspondences with Talam, Talam indicated its intention to claim against the Company for compensation of RM38.78 million (which includes legal fees, court charges incurred on civil suit against the bank and interest charges). Talam and the Company are in negotiation to settle the matter.

The Group and the Company may be liable for the claim amount as indicated by Talam. The directors are of the opinion, after taking appropriate legal advice, that Talam has no valid claim against the Company and as such, no provision is necessary.

28. CAPITAL COMMITMENT

The outstanding commitment in respect of infrastructure development expenditure as follows:

Group 2018 2017 RM’000 RM’000

Infrastructure development expenditure- Contracted but not provided for 3,344,438 4,222,926


29. RELATED PARTY DISCLOSURES

Other than as disclosed elsewhere in the financial statements, the related parties and their relationship with the Company and its subsidiaries are as follows:

Radiant Group Radiant Pillar Sdn. Bhd. (“Radiant”), an associate of the Group, and its subsidiary. IJM Group has substantial direct and indirect equity interests in Radiant Group. Radiant Group became subsidiaries of IJM Group with effect from 24 January 2014.

IJM Group IJM Corporation Berhad (“IJM”) and its subsidiaries. IJM is a major shareholder of the Company.

Ambang Usaha Sdn. Bhd. Ambang Usaha Sdn. Bhd. is an associate of the Group. IJM Group is the shareholder of its remaining equity interest.

MWE Group MWE Holdings Berhad (“MWE”) and its subsidiaries. MWE is a major shareholder of the Company.

IJMC- KEB Joint Venture A joint operation between the Company and IJM Construction Sdn. Bhd.

(a) Transactions with related parties


Radiant Group:Interest income - 262 - 262 Interest expenses - (197) - -

IJM Group:Waiver of interest expenses 808 1,020 808 - Interest expenses (198) (77) (198) (77)Construction works (625,113) (673,433) (178,639) (217,103)

MWE Group:Share registration fees (87) (107) (87) (107)

West Coast Expressway Sdn. Bhd.Construction works - - 178,652 271,128 Murabahah loan stocks profit - - 4,498 1,250



29. RELATED PARTY DISCLOSURES (CONTINUED)

(b) Balances with related parties


Other receivablesIJM Group 1,047 - 633 -

Trade payablesIJM Group 314,957 239,527 111,065 60,590

Other payables IJM Group 87,890 6,269 11,313 1,766

Amount owing by associates Radiant Group 79 69 67 67 Ambang Usaha Sdn. Bhd. 10 8 2 1

89 77 69 68

Amount owing to associates Radiant Group 403 403 - -

Amount owing by subsidiary (trade)West Coast Expressway Sdn. Bhd. - - 108,493 70,352


29. RELATED PARTY DISCLOSURES (CONTINUED)

(c) Key management compensation

The remuneration of key management personnel and directors’ remuneration (including directors who retired or resigned during the financial year), are disclosed as follows:


DirectorsNon-executive directors of the Company:- Fees 855 885 855 885 - Other emoluments 47 24 47 -

902 909 902 885 Executive directors of subsidiary:- Salaries, allowance, bonus and incentive 1,743 1,690 147 - - Estimated monetary value of benefits-in-kind 24 24 - - - Employees Provident Fund 279 24 24 -

2,046 1,738 171 -

2,948 2,647 1,073 885

Other key management personnel- Salaries, allowance, bonus and incentive 1,532 524 705 402 - Estimated monetary value of benefits-in-kind 14 - 8 - - other emoluments 179 261 179 261 - Employees Provident Fund 217 48 101 48

1,942 833 993 711

4,890 3,480 2,066 1,596

30. OPERATING SEGMENTS

Measurement of reportable segments

Operating segments are prepared in a manner consistent with the internal reporting provided to the Group in order to allocate resources to segments and to assess their performance. For management purposes, the Group is organised into business units based on their products and services provided.

The Group assesses the performance of the operating segments based on operating profit or loss which is measured differently from those disclosed in the consolidated financial statements.

Assets, liabilities and expenses which are common and cannot be meaningfully allocated to the operating segments are presented under unallocated items. Unallocated items comprise mainly former associate classified as non-current asset held for sale, investment in associates, other investments, tax refundable, tax payable and deferred tax liabilities.

Business segments

The Group’s operating businesses are classified according to the nature of activities as follows:

Toll concession segment : Involved in the business of construction, management and tolling of highway operation;

Construction segment : Involved in the business of construction contracting; and

Others : Involved in the business of construction contracting, leasing, management services, and investment holding.



30. OPERATING SEGMENTS (CONTINUED)

Business segments (continued)

Toll2018 Concession Construction Others Elimination ConsolidatedGroup RM’000 RM’000 RM’000 RM’000 RM’000

RevenueExternal sales 914,786^ - - (50,613) 864,173 Inter-segment sales 178,653 - - (178,653) -

Total revenue 1,093,439 - - (229,266) 864,173

ResultsSegment results 9,174 (3,406) (12,365) (6,184)A (12,781)Finance costs (198)Share of results of associates 28,418 Interest income 1,958

Profit before tax 17,397 Taxation (2,343)

Profit for the financial year 15,054

Consolidated Statement of Financial Position

AssetsSegment assets 3,984,074 213 716,770 (703,659)B 3,997,398 Investment in associates - 300 125,065 - 125,365 Other investments 428 - 8,035 - 8,463 Tax recoverable - - 742 - 742

Consolidated total assets 3,984,502 513 850,612 (703,659) 4,131,968

LiabilitiesSegment liabilities 3,680,027 55,746 306,905 (657,108)C 3,385,570 Tax payables/deferred tax liabilities 6,047 - 332 - 6,379

Consolidated total liabilities 3,686,074 55,746 307,237 (657,108) 3,391,949

Other InformationCapital expenditure 1,020,758 - 5 - 1,020,763D

Depreciation of property, plant and equipment - - 53 - 53

Non-cash expenses other than depreciation - 3,388 17,890 - 21,278E

Other non-cash income - - 1,517 - 1,517F



Business segments (continued)

(Note 24) Toll Discontinued2017 Concession Construction Others Operation Elimination ConsolidatedGroup RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

RevenueExternal sales 817,489^ - - 7,820 - 825,309 Inter-segment sales 227,063 - 6,429 - (233,492) -

Total revenue 1,044,552 - 6,429 7,820 (233,492) 825,309

ResultsSegment results 8,712 (31) 18,771 (2,737) (7,679)A 17,036 Finance costs (1,642)Share of results of associates 23,727 Interest income 673

Profit before tax 39,794 Taxation (4,686)

Profit for the financial year 35,108

Consolidated Statement of Financial Position

AssetsSegment assets 2,703,039 3,602 644,900 - (583,411)B 2,768,130 Investment in associates - 300 96,646 - - 96,946 Other investments 412 - 77,697 - - 78,109 Tax recoverable 2 - 143 - - 145

Consolidated total assets 2,703,453 3,902 819,386 - (583,411) 2,943,330

LiabilitiesSegment liabilities 2,438,353 55,729 292,351 - (573,242)C 2,213,191 Tax payables/

deferred tax liabilities 3,749 - 1,425 - - 5,174

Consolidated total liabilities 2,442,102 55,729 293,776 - (573,242) 2,218,365

Other InformationCapital expenditure 945,955 - - 365 (45,315) 901,005D

Depreciation of property, plant and equipment - - 66 247 - 313

Non-cash expenses other than depreciation - - 231 - - 231E

Other non-cash income 40 - - - - 40F

^ Represents construction revenue recognised pursuant to IC Interpretation 12 Service Concession Arrangements from the construction of a public service infrastructure.

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




A The following items are deducted from in segment results to arrive at profit before taxation:

2018 2017 RM’000 RM’000

Impairment loss on amount owing by subsidiaries 129 - Dividend received from subsidiary - (6,429)Impairment loss on amount owing by subsidiaries no longer required (1,816) - Interest income on murabahah loan stocks from subsidiary (4,497) (1,250)

(6,184) (7,679)

B The following items are deducted from segment assets to arrive at total assets reported in the consolidated statement of financial position:

2018 2017 RM’000 RM’000

Investment in subsidiaries (160,746) (160,746)Inter-segment assets (542,913) (422,665)

(703,659) (583,411)

C The following items are deducted from segment liabilities to arrive at total liabilities reported in the consolidated statement of financial position:

2018 2017 RM’000 RM’000

Inter-segment liabilities (657,108) (573,242)

D Additions of capital expenditure consist of:

2018 2017 RM’000 RM’000

Property, plant and equipment 22 573 Infrastructure development expenditure 1,020,741 900,432

1,020,763 901,005

E Other non-cash expenditure consist of:

2018 2017 RM’000 RM’000

Impairment loss on:- trade and other receivables 20,388 -- property, plant and equipment - 231 - other investments 890 -

21,278 231

F Other non-cash income consists of:

2018 2017 RM’000 RM’000

Gain on disposal of property, plant and equipment 1,517 40



Geographical segment

The activities of the Group are mainly carried out in Malaysia and as such, geographical segment reporting is not presented.

Information about major customers

Included in the Group revenue is an amount of RM868,047,000 (2017: RM817,489,000) from the toll concession segment, which accounted for more than 10% of the Group revenue and is derived from the Government of Malaysia.

31. FINANCIAL INSTRUMENTS

(a) Categories of financial instruments

The following table analyses the financial assets and liabilities in the statements of financial position by the class of financial instruments to which they are assigned, and therefore by the measurement basis:

Fair value Held-to- Available- Financial Loans through maturity for-sale liabilities

2018 and profit financial financial at amortisedGroup receivables or loss assets assets cost Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assetsOther investments - 5,213 - 3,249 - 8,462 Trade receivables 8 - - - - 8 Other receivables

and deposits 48,481 - - - - 48,481 Deposits with

licensed banks 1,176,367 - - - - 1,176,367 Cash and bank balances 119,851 - - - - 119,851

1,344,707 5,213 - 3,249 - 1,353,169

Financial liabilitiesLoans and borrowings - - - - (2,292,849) (2,292,849)Trade payables - - - - (321,671) (321,671)Other payables,

deposits and accruals - - - - (184,413) (184,413)

- - - - (2,798,933) (2,798,933)

CompanyFinancial assetsOther investments - 4,786 95,000 3,249 - 103,035 Trade receivables 108,493 - - - - 108,493 Other receivables


licensed banks 5,700 - - - - 5,700 Cash and bank balances 982 - - - - 982

443,468 4,786 95,000 3,249 - 546,503

Financial liabilitiesTrade payables - - - - (64,325) (64,325)Other payables,


- - - - (82,003) (82,003)



31. FINANCIAL INSTRUMENTS (CONTINUED)

(a) Categories of financial instruments (continued)

Fair value Held-to- Available- Financial Loans through maturity for-sale liabilities

2017 and profit financial financial at amortisedGroup receivables or loss assets assets cost Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assetsOther investments - 73,931 - 4,178 - 78,109 Trade receivables 696 - - - - 696 Other receivables


licensed banks 1,004,602 - - - - 1,004,602 Cash and bank balances 49,339 - - - - 49,339

1,123,560 73,931 - 4,178 - 1,201,669

Financial liabilitiesLoans and borrowings - - - - (1,619,853) (1,619,853)Trade payables - - - - (252,689) (252,689)Other payables,


- - - - (1,927,029) (1,927,029)

CompanyFinancial assetsOther investments - 73,519 64,800 4,178 - 142,497 Trade receivables 70,352 - - - - 70,352 Other receivables


licensed banks 25,770 - - - - 25,770 Cash and bank balances 976 - - - - 976

394,115 73,519 64,800 4,178 - 536,612

Financial liabilitiesTrade payables - - - - (60,590) (60,590)Other payables,


- - - - (68,461) (68,461)



(b) Fair values

(i) Fair value of financial instruments that are carried at fair value

The fair value hierarchy used to measure the fair value of financial asset carried at fair value are as follows:

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3 fair value measurements are those derived from inputs for the asset or liability that are not based on observable market data (observable inputs).

As at 31 March 2018, the fair value of other investments as disclosed in Note 10 to the financial statements is measured under Level 1, of which is determined directly by reference to prices provided either by investment management companies or based on bid price of the quoted equity securities.

During the financial year ended 31 March 2018, there were no transfers between Level 1 and Level 2 fair value measurements.

(ii) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value at the reporting date:

Note

Trade and other receivables 11Deposits placed with licensed banks 12Cash and bank balances -Loans and borrowings (current) 16Trade and other payables 17

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date.

The carrying amounts of the current portion of loans and borrowings are reasonable approximation of fair values due to the insignificant impact of discounting.




(b) Fair values (continued)

(iii) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value

Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value are as follows:

2018 2017 Company Company

Carrying Carrying amount Fair value amount Fair value Note RM’000 RM’000 RM’000 RM’000

Financial asset Other investments(categorised as held-to-maturity)- Private debt securities 10 95,000 95,000 64,800 64,800

2018 2017 Group Group

Carrying Carrying amount Fair value amount Fair value Note RM’000 RM’000 RM’000 RM’000

Financial liabilitiesLoans and borrowings:- Bond 16 926,667 918,953 924,888 920,243 - Government support loan 16 766,365 773,363 360,491 363,837 - Murabahah loan stocks 16 42,639 42,639 15,813 15,813

1,735,671 1,734,955 1,301,192 1,299,893

The following table provides the fair value measurement hierarchy of the Group’s financial instruments:

Fair value of financial instruments not carried at fair value Fair Fair value Value Level 1 Level 2 Level 3 Total Note RM’000 RM’000 RM’000 RM’000 RM’000

2018CompanyFinancial assetsOther investment(categorised as

held-to-maturity)- Murabahah loan stocks 10 95,000 - 95,000 - -

2018GroupFinancial liabilitiesLoans and borrowings:- Bond 16 918,953 - 918,953 - - - Government

support loan 16 773,363 - 773,363 - - - Murabahah loan stocks 16 42,639 - 42,639 - -

1,734,955 - 1,734,955 - -



(b) Fair values (continued)

(iii) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value (continued)

Fair value of financial instruments not carried at fair value Fair Fair value Value Level 1 Level 2 Level 3 Total Note RM’000 RM’000 RM’000 RM’000 RM’000

2017CompanyFinancial assetsOther investment(categorised as

held-to-maturity)- Murabahah loan stocks 10 64,800 - 64,800 - -

2017GroupFinancial liabilitiesLoans and borrowings:- Bond 16 920,243 - 920,243 - - - Government

support loan 16 363,837 - 363,837 - - - Murabahah loan stocks 16 15,813 - 15,813 - -

1,299,893 - 1,299,893 - -

Fair value of financial instruments not carried at fair value

The fair value of the bond, government support loan and murabahah loan stocks are calculated based on the present value of future principal and interest cash flows, discounted at the market interest rates of similar liabilities and issuer’s borrowing rate.



32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The operations of the Group and of the Company are subject to a variety of financial risks, including credit risk, liquidity risk and interest rate risk. The Group and the Company have formulated a financial risk management framework whose principal objective is to minimise the Group’s and the Company’s exposure to risks and/or costs associated with the financing, investing and operating activities of the Group and of the Company.

(i) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including other investments, deposits placed with licensed banks and cash and bank balances), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.

The Group and the Company do not hold any collateral as security and other credit enhancements for the above financial assets.

The management has a credit policy in place to monitor and minimise the exposure of default. The Group trades only with recognised and credit worthy third parties. Trade receivables are monitored on an ongoing basis.

As at the reporting date, there were no significant concentration of credit risk in the Group. The maximum exposure to credit risk for the Group is represented by the carrying amount of each financial instrument. The Company also has credit risk exposure arising form of financial guarantees given to banks in respect of loans granted to a subsidiary.

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 11 to the financial statements. Deposits with licensed banks that are neither past due nor impaired are placed with reputable financial institutions with no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are past due or impaired is disclosed in Note 11 to the financial statements.


32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(ii) Liquidity risk

Liquidity risk is the risk that the Group or the Company will not be able to meet their financial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables, loans and borrowings.

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

Maturity analysis

The table below summarises the maturity profile of the Group’s and of the Company’s liabilities as at the reporting date based on contractual undiscounted repayment obligations:

Contractual cash flows On demand Carrying or within One to Over five Amount one year five years years Total RM’000 RM’000 RM’000 RM’000 RM’000

2018GroupFinancial liabilitiesTrade payables 321,671 321,671 - - 321,671 Other payables and accruals 121,064 121,064 - - 121,064 Loans and borrowings

(including interest accruals):- Bond 926,667 51,664 206,797 1,509,666 1,768,127 - Government support loan 768,229 - 290 3,878,593 3,878,883 - Term loans 557,178 58,595 140,726 691,792 891,113 - Murabahah loan stocks 104,124 - - 211,913 211,913

2,798,933 552,994 347,813 6,291,964 7,192,771

CompanyFinancial liabilitiesTrade payables 64,325 64,325 - - 64,325 Other payables and accruals 17,678 17,678 - - 17,678

82,003 82,003 - - 82,003




(ii) Liquidity risk (continued)

Maturity analysis (continued)

Contractual cash flows On demand Carrying or within One to Over five Amount one year five years years Total RM’000 RM’000 RM’000 RM’000 RM’000

2017GroupFinancial liabilitiesTrade payables 252,689 252,689 - - 252,689 Other payables and accruals 41,218 60,961 - - 60,961 Loans and borrowings

(including interest accruals):- Bond 924,888 51,040 206,797 1,561,326 1,819,163 - Government support loan 379,922 - 151 1,902,381 1,902,532 - Term loans 318,661 32,096 83,873 422,034 538,003 - Murubahah loan stocks 16,125 - - 16,125 16,125

1,933,503 396,786 290,821 3,901,866 4,589,473

CompanyFinancial liabilitiesTrade payables 60,590 60,590 - - 60,590 Other payables and accruals 7,871 7,871 - - 7,871

68,461 68,461 - - 68,461

(iii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and of the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s and the Company’s exposure to interest rate risk arises primarily from their loans and borrowings.

The Group and the Company manage the net exposure to interest rate risks by maintaining sufficient lines of credit to obtain acceptable lending costs and by monitoring the exposure to such risks on an ongoing basis. Management does not enter into interest rate hedging transactions since it considers that the cost of such instruments outweigh the potential risk of interest rate fluctuation.

The fixed deposit placed with licensed bank at fixed rate exposes the Group to fair value interest rate risk. The term loans totalling RM557,178,000 (2017: RM318,661,000) at floating rate expose the Group to cash flow interest rate whilst the bond, murabahah loan stocks and government support loan of RM1,735,671,000 (2017: RM1,301,192,000) expose the Group to fair value interest rate risk.

The information on maturity dates and effective interest rate of financial assets and liabilities are disclosed in their respective notes.



(iii) Interest rate risk (continued)

Sensitivity analysis for interest rate risk

Fair value sensitivity analysis for fixed rate instruments

The Group and the Company do not account for any fixed rate financial assets at fair value through profit or loss and equity. Therefore a change in interest rates at the reporting date would not affect profit or loss and equity.

Any change in interest rate would not have significant effect on equity and profit or loss for the current financial year as the borrowing costs are capitalised in infrastructure development expenditure during the construction period.

33. CAPITAL MANAGEMENT

The primary objective of the Group’s capital management is to ensure that it maintains a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The directors monitor and determine to maintain an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.

The debt-to-equity ratio as at 31 March 2018 and 31 March 2017 were as follows:

Group 2018 2017 RM’000 RM’000

Total borrowings 2,292,849 1,619,853

Equity attributable to owners of the Company 699,341 685,660

Debt-to-equity ratio (times) 3.28 2.36

There were no changes in the Group’s approach to capital management during the financial year.

As part of its financing covenants, a subsidiary is required to maintain a financial service cover ratio of at least 1.25 times and debt equity ratio of not greater than 80:20 upon the commencement of toll collection.

34. SIGNIFICANT EVENTS DURING AND SUBSEQUENT TO THE FINANCIAL YEAR

(i) On 26 March 2018, the Company announced to undertake a proposed renounceable rights issue of five years, zero coupon redeemable convertible unsecured loan stocks to be issued at 100% of its nominal value of RM0.50 each (“RCULS”) together with free detachable warrants (“Warrants”), on the basis of five RCULS for every six ordinary shares held in the Company and one warrant for every three RCULS subscribed for on an entitlement date to be determined later (“Proposed Rights Issue”). On 7 June 2018, the Company submitted an application to the Securities Commission Malaysia for the issuance of the RCULS pursuant to the Proposal Rights Issue.

(ii) On 14 May 2018, the Company has obtained a term loan facility of RM150,000,000 as a bridging facility for the 80% equity portion of West Cost Expressway Sdn. Bhd equity requirement, pending the completion of the Proposed Rights Issue.


We, DATUK IR HAMZAH BIN HASAN and DATUK OH CHONG PENG, being two of the directors of WCE Holdings Berhad, do hereby state that in the opinion of the directors, the accompanying financial statements as set out on pages 50 to 123 are drawn up in accordance with the Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of Group and of the Company as at 31 March 2018 and of their financial performance and cash flows for the financial year then ended.

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

DATUK IR. HAMZAH BIN HASANDirector

DATUK OH CHONG PENGDirector

Date: 2 July 2018

STATEMENT BY DIRECTORSPursuant to Section 251(2) of the Companies Act 2016


STATUTORY DECLARATIONPursuant to Section 251(1) of the Companies Act 2016

I, LYNDON ALFRED FELIX, being the officer primarily responsible for the financial management of WCE Holdings Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the accompanying financial statements as set out on pages 50 to 123, 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.

LYNDON ALFRED FELIX

Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory on 2 July 2018.

Before me,

TAN KIM CHOOI (W 661)Commissioner for Oaths


REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the financial statements of WCE Holdings Berhad, which comprise the statements of financial position as at 31 March 2018 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 50 to 123.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 March 2018, and of their financial performance and their cash flows for the financial year then ended in accordance with the Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

Basis for Opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current financial year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Infrastructure development expenditure (Note 4(ii) and 7 to the financial statements)

The Group has significant infrastructure development expenditure. We focused on this area because the impairment assessment of the infrastructure development expenditure, which involves uncertainties, requires the application of significant judgements and estimates by the directors on the discount rate applied in the recoverable amount calculation and the assumptions supporting the underlying cash flow projections, including the forecast traffic volume, operational expenses and forecast growth rates over the projection period.

Our response:

Our audit procedures focused on evaluating the cash flow projections and the Group’s forecasting procedures which included, among others:

• understanding the design and implementation of controls over the updating of the assumptions used in the preparation of the impairment assessment and approval by appropriate personnel of the final cash flow projections;

• comparing the Group’s assumptions to externally derived data as well as our assessments in relation to key assumptions based on our understanding of the project and analysis of changes in assumptions from previous year;

• comparing the discount rate applied against the weighted average cost of capital derived from a selection of comparable companies;

• testing the mathematical accuracy of the recoverable amount calculation; and

• performing a sensitivity analysis around the key assumptions that are expected to be most sensitive to the recoverable amount.

INDEPENDENT AUDITORS’ REPORTto the members of WCE Holdings Berhad (Incorporated in Malaysia)


Amount owing by a former associate and its subsidiaries (Note 4(iii) and 11 to the financial statements)

The Group and the Company have significant receivables owing by a former associate and its subsidiaries as at 31 March 2018 which have been long outstanding. The directors assessed events that resulted in objective evidence of impairment and estimated the amount of impairment loss. As at 31 March 2018, an impairment loss of RM20,387,000 and RM16,999,000 respectively was recognised on the said receivables of the Group and of the Company. We focused on this area because the assessment on the recoverability of these receivables and estimation of amount of impairment loss involve subjective judgement of the directors.

Our response:

Our audit procedures included, among others:

• obtaining confirmation of balances from the former associate;

• reviewing reconciliations prepared by the management on the differences in outstanding balance with the replied confirmation and consider the appropriateness of the management’s justification for not adjusting those differences in the financial statements; and

• reviewing correspondences and management explanation on recoverability of the receivables and on the estimated impairment loss.

Contingent liability (Note 4(iv) and 28 to the financial statements)

A subsidiary of the Company was indebted to a bank which had on 7 September 2010 auctioned and disposed of a piece of land belonging to a subsidiary of a former associate of the Company, which secured the borrowings of this subsidiary. The Group and the Company may be liable for the claim amount as indicated by the former associate. We focused on this area because the determination of the treatment of contingent liability in the financial statements is based on the directors’ view on the expected outcome of the contingency.

Our response:

Our audit procedures included, among others:

• discussing with the management on the status of the contingent liability;

• obtaining and reading the solicitor’s confirmation on any further update in respect of the contingent liability and considering the probability of the liability crystalising; and

• assessing the adequacy of disclosure made in the financial statements.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITORS’ REPORT THEREON

The directors of the Company are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.


INDEPENDENT AUDITORS’ REPORT (continued)to the members of WCE Holdings Berhad (Incorporated in Malaysia)

RESPONSIBILITIES OF THE DIRECTORS FOR THE FINANCIAL STATEMENTS

The directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give a true and fair view in accordance with the Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

The directors of the Company are responsible for overseeing the Group’s financial reporting process.

AUDITORS’ RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Company’s internal control.

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern.

• evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation.

• obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.


We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial statements of the Group and of the Company for the current financial year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

OTHER MATTERS

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the contents of this report.

Baker Tilly Monteiro Heng Lee Kong WengNo. AF 0117 No. 02967/07/2019 JChartered Accountants Chartered Accountant

Kuala LumpurDate: 2 July 2018


Owner Location

Land/ Built-UpArea

Existing use/ Description

Date of Acquisition Tenure Expiry

Approximate Age of

Building (Years)

Net Book Value as at

31.3.2018 RM’000

1. KEURO Trading Sdn Bhd

1-1A, 1st Floor Jalan U/P 1/3 Taman Ukay Perdana 68000 Ampang, Selangor

165 sq.m. Rented (4 units of shop office at Ukay Perdana)

17.07.2001 Leasehold (99 years)

10.10.2100 15 511

1-1B, 1st Floor Jalan U/P 1/3 Taman Ukay Perdana 68000 Ampang, Selangor

173 sq.m.

3-1B, 1st Floor Jalan U/P 1/3 Taman Ukay Perdana 68000 Ampang, Selangor

61 sq.m.

26-3B, 3rd Floor Jalan U/P 1/2 Taman Ukay Perdana 68000 Ampang, Selangor

114 sq.m.


Mukim of Ampang District of Hulu Langat Selangor Darul Ehsan

546 sq.m. Vacant (4 parcels of residential land at Pandan Perdana)


30.10.2195 - 152



248 sq.m Vacant (2 parcels of residential land at Pandan Perdana)


11.01.2091 - 70



783 sq.m. Vacant (9 parcels of residential land at Pandan Perdana)


10.12.2195 - 218


No. 11, Jalan Orkid 10 Seksyen BB1 Bandar Bukit Beruntung 48300 Rawang, Selangor

601 sq.m. Vacant (1 unit Bungalow lot)

01.07.2008 Freehold - - 100

LIST OF PROPERTIES


Owner Location

Land/ Built-UpArea

Existing use/ Description

Date of Acquisition Tenure Expiry

Approximate Age of

Building (Years)

Net Book Value as at

31.3.2018 RM’000


No. 63, Jalan Widuri 2B Seksyen BB18 Bukit Beruntung 3 48300 Rawang, Selangor

1,179 sq.m. Vacant (4 units Single Storey House)

01.04.2009 Freehold - - 422

No. 63, Jalan Widuri 2D/2 Seksyen BB18 Bukit Beruntung 3 48300 Rawang, Selangor

No. 21 Jalan Widuri 2F Seksyen BB18 Bukit Beruntung 3 48300 Rawang, Selangor

No. 2, Jalan Widuri 2F/3 Seksyen BB18 Bukit Beruntung 3 48300 Rawang, Selangor


Metro Larkin District of Johor Bahru Johor Darul Ta’zim

58 sq.m. Vacant (2 units of shop office and retail space)


21.04.2094 10 -

8. KEURO Leasing Sdn Bhd


1,397 sq.m. Vacant (21 units of shop office and retail space)


21.04.2094 10 -

9. KEURO Leasing Sdn Bhd


321 sq.m. Vacant (13 units of shop office and retail space)


21.04.2094 10 -

10. KEB Builders Sdn Bhd


72 sq.m. Vacant (1 unit of shop office and retail space)


21.4.2094 10 -


THE COMPANY

ORDINARY SHARES

No. of Ordinary Shares Direct % Deemed Interest Interest %The Company1. Tang King Hua 350,000 0.035 0 0.0002. Tan Chor Teck 45,000 0.004 135,000*1 0.0133. Dato’ Neoh Soon Hiong 270,000 0.026 382,200*2 0.038

Notes: *1 Deemed interested by virtue of his interests in Simansu Sdn Bhd pursuant to Section 8 of the Companies Act, 2016 (“Act”). *2 Deemed interested through his spouse, Datin Tan Yoke Sum pursuant to Section 59(11)(c) of the Act.

Save as disclosed above, none of the other Directors of the Company have any interests in the securities of the Company and its related corporation as at 30 June 2018.

STATEMENT ON DIRECTORS’ AND CHIEF EXECUTIVE OFFICER’S INTERESTSas at 30 June 2018


ANALYSIS OF SHARE CAPITAL

Issued and paid-up share capital : RM1,002,735,588Class of share : Ordinary share

DISTRIBUTION OF SHAREHOLDINGS

Size of Holdings No. of % of No. of % of Shareholders Shareholders Shares held Shares held

1 – 99 793 8.73 30,397 0.003100 – 1,000 1,830 20.14 1,408,468 0.1411,001 – 10,000 4,520 49.74 19,375,731 1.93210,001 – 100,000 1,567 17.25 50,450,259 5.031100,001 – 50,136,780* 371 4.08 341,305,309 34.03750,136,781 and above** 5 0.06 590,165,424 58.856

Total 9,086 100.00 1,002,735,588 100.000

Notes:There is only one class of shares in the paid-up share capital of the Company. Each share entitles the holder to one vote. * Less than 5% of issued shares** 5% and above of issued shares

THIRTY LARGEST SHAREHOLDERS

Name of Shareholders No. of Shares %

1 IJM CORPORATION BERHAD 265,184,824 26.45

2 UNITED FRONTIERS HOLDINGS LIMITED 93,415,100 9.32

3 MALAYSIA NOMINEES (TEMPATAN) SENDIRIAN BERHAD 90,000,000 8.98 Pledged Securities Account for MWE HOLDINGS BERHAD

4 MWE HOLDINGS BERHAD 85,765,500 8.55

5 HLB NOMINEES (TEMPATAN) SDN BHD 55,800,000 5.56 Pledged Securities Account for MWE HOLDINGS BERHAD

6 CITIGROUP NOMINEES (ASING) SDN BHD 36,095,500 3.60 Exempt An for UBS AG SINGAPORE (FORIEGN)

7 HSBC NOMINEES (ASING) SDN BHD 33,223,800 3.31 Exempt An for CREDIT SUISSE (HK BR-TST-ASING)

8 HSBC NOMINEES (ASING) SDN BHD 26,601,800 2.65 Exempt An for CREDIT SUISSE (SG BR-TST-ASING)

9 CIMB ISLAMIC NOMINEES (TEMPATAN) SDN BHD 25,000,000 2.49 Pledged Securities Account for MWE HOLDINGS BERHAD

10 KEJORA POSITIF SDN BHD 10,000,000 1.00

ANALYSIS OF SHAREHOLDINGSas at 29 June 2018


ANALYSIS OF SHAREHOLDINGS (continued)as at 29 June 2018

THIRTY LARGEST SHAREHOLDERS

Name of Shareholders No. of Shares %

11 HSBC NOMINEES (ASING) SDN BHD 8,702,000 0.87 KBL EURO PB for SAMARANG UCITS – SAMARANG ASIAN PROSPERITY

12 HSBC NOMINEES (ASING) SDN BHD 7,176,400 0.72 Exempt An for BANK JULIUS BAER & CO. LTD. (SINGAPORE BCH)

13 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 6,543,828 0.65 Exempt An for OCBC SECURITIES PRIVATE LIMITED

14 AZIZ BIN BAHAMAN 5,775,000 0.58

15 LIEW KHANG @ LIEW WAN KHANG 4,255,000 0.42

16 CIMSEC NOMINEES (TEMPATAN) SDN BHD 4,000,000 0.40 CIMB for SEOW LUN HOO @ SEOW WAH CHONG

17 GENERAL TECHNOLOGY SDN BHD 3,547,099 0.35

18 MAYBANK NOMINEES (TEMPATAN) SDN BHD 3,411,000 0.34 Pledged Securities Account for THAM TOO KAM

19 MAYBANK NOMINEES (TEMPATAN) SDN BHD 3,250,000 0.32 Pledged Securities Account for YOONG KAH YIN

20 ONG YENG TIAN & ONG WENG TIAN 3,047,993 0.30

21 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD 3,000,000 0.30 Pledged Securities Account for SI THO YOKE MENG

22 ONG SIOK LIAN 2,956,800 0.29

23 CHIN PEK SOO HOLDINGS SDN BHD 2,819,100 0.28

24 TEE SEE KIM 2,783,000 0.28

25 MPI GENERALI INSURANS BERHAD 2,764,000 0.28

26 AMSEC NOMINEES (TEMPATAN) SDN BHD 2,600,000 0.26 Pledged Securities Account for SI THO YOKE MENG

27 LIM BING CHAI 2,590,000 0.26

28 RESON SDN BHD 2,588,300 0.26

29 ONG SEH CHOON 2,500,000 0.25

30 OLIVE LIM SWEE LIAN 2,495,000 0.25

797,891,041 79.57


LIST OF SUBSTANTIAL SHAREHOLDERS

As shown in the Register of Substantial Shareholders

Name of Substantial Shareholders Number of Ordinary Shares Direct Deemed Interest % Interest %

1. IJM CORPORATION BERHAD 265,368,574 26.46 - -2. MWE HOLDINGS BERHAD 256,565,500 25.58 - -3. UNITED FRONTIERS HOLDINGS LIMITED 93,415,100 9.31 - -4. PINJAYA SDN BHD - - 256,565,500(1) 25.585. TAN SRI DATO’ SURIN UPATKOON - - 256,565,500(2) 25.586. TAN SRI PANG TEE CHEW 35,000 0.003 93,415,100(3) 9.317. DATUK WIRA PANG TEE NAM - - 93,415,100(3) 9.31

Notes:(1) Deemed interested by virtue of its interest in MWE Holdings Berhad pursuant to Section 8 of the Companies Act, 2016 (“Act”).(2) Deemed interested by virtue of his interest in Pinjaya Sdn Bhd pursuant to the Act.(3) Deemed interested by virtue of their interest in United Frontiers Holdings Limited pursuant to the Act.


NOTICE IS HEREBY GIVEN THAT the 17th Annual General Meeting of WCE Holdings Berhad (“the Company”) will be held at Victorian Ballroom, Level 1, Holiday Villa Hotel & Conference Centre Subang Selangor, 9 Jalan SS12/1, 47500 Subang Jaya, Selangor Darul Ehsan on Monday, 3 September 2018 at 2.30 p.m. for the following purposes:-

AGENDA

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the financial year ended 31 March 2018 and the Reports of the Directors and Auditors thereon.

(Please refer to Explanatory Note A)

2. To approve the payment of the Directors’ fees of RM855,210.00 for the financial year ended 31 March 2018

(Ordinary Resolution 1)

3. To re-elect Tang King Hua who is retiring by rotation pursuant to Article 97 of the Constitution of the Company.


4. To re-elect the following Directors who are retiring pursuant to Article 81 of the Constitution of the Company:-

4.1 Datuk Wira Hj. Hamza Bin Taib (Ordinary Resolution 3)

4.2 Tan Chor Teck (Ordinary Resolution 4)

4.3 Vuitton Pang Hee Cheah (Ordinary Resolution 5)

5. To re-appoint Messrs Baker Tilly Monteiro Heng as Auditors of the Company and to authorise the Directors to fix their remuneration.


AS SPECIAL BUSINESSTo consider and if thought fit, to pass the following Ordinary Resolutions:-

6. PAYMENT OF DIRECTORS’ BENEFITS

To approve the payment of the Directors’ Benefits of up to RM150,000.00 for the period from 17th Annual General Meeting until the 18th Annual General Meeting.


7. AUTHORITY TO ISSUE SHARES PURSUANT TO SECTIONS 75 AND 76 OF THE COMPANIES ACT 2016 (“THE ACT”)

“THAT, pursuant to Sections 75 and 76 of the Act and the Constitution of the Company and subject to the approvals from Bursa Malaysia Securities Berhad and other relevant government/regulatory authorities, where such approval is necessary, the Directors of the Company be and are hereby empowered pursuant to Sections 75 and 76 of the Act to issue shares in the Company at any time until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Board of Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares to be issued during the preceding 12 months does not exceed 10% of the total number of the issued shares (excluding treasury shares) of the Company for the time being AND THAT the Board of Directors be and are also empowered to obtain approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad.”


NOTICE OF ANNUAL GENERAL MEETING


8. PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE (“PROPOSED SHAREHOLDERS’ MANDATE FOR RRPT”)

“THAT, subject always to the Listing Requirements of Bursa Malaysia Securities Berhad, the Company and its subsidiary companies shall be mandated to enter into such recurrent transactions of a revenue or trading nature which are necessary for their day-to-day operations and with those related parties as specified in Section 2.4 of the Circular to Shareholders dated 31 July 2018 subject further to the following:-

(i) the transactions are in the ordinary course of business of the Company and its subsidiary companies on terms not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders of the Company; and

(ii) disclosure will be made in the Annual Report of the aggregate value of transactions of the Proposed Shareholders’ Mandate for RRPT conducted during the financial year, including amongst others, the following information:-

(a) the type of the recurrent transactions made; and

(b) the names of the related parties involved in each type of the recurrent related party transactions made and their relationship with the Company and/or its subsidiary companies.

AND THAT such mandate shall commence upon passing of this resolution and shall continue to be in force until:-

(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the AGM at which such mandate was passed, at which time it will lapse unless by the resolution passed at a general meeting, the authority is renewed; or

(ii) the expiration of the period within which the next AGM of the Company after the date it is required to be held pursuant to Section 340(2) of the Companies Act 2016 (“the Act”) (but shall not extend to such extension as may be allowed pursuant to Section 340(4) of the Act); or

(iii) revoked or varied by resolution passed by the shareholders of the Company in general meeting,

whichever is the earlier;

AND FURTHER THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the Proposed Shareholders’ Mandate for RRPT.”



NOTICE OF ANNUAL GENERAL MEETING (continued)

9 PROPOSED PROVISION OF FINANCIAL ASSISTANCE TO RADIANT PILLAR SDN BHD (“RPSB”), AN ASSOCIATE COMPANY OF WCE HOLDINGS BERHAD (“PROPOSED PROVISION OF FINANCIAL ASSISTANCE”)

“THAT subject to the approval from all relevant authorities (where applicable), the Board of Directors of the Company (“Board”) be and is hereby authorised to provide financial assistance to RPSB in the form of corporate guarantees for banking facilities up to an aggregate amount of RM152.00 million in favour of a financial institution for the bankers guarantee and term loan facilities to be granted to RPSB in respect of the outstanding main/common infrastructure works of the Bandar Rimbayu township.

AND THAT the Board be and is hereby authorised to do all acts, things and to execute, sign and deliver or caused to be delivered for and on behalf of the Company, all such documents (including corporate guarantees) as it may consider necessary and/or expedient in the best interest of the Company in order to implement, finalise and give full effect to the Proposed Provision of Financial Assistance with full power to assent to any terms, conditions, modifications, variations and/or amendments in any manner as the Board may deem necessary and/or expedient in the best interest of the Company.”


BY ORDER OF THE BOARD

RAW KOON BENG (MIA 8521)WONG WAI FOONG (MAICSA 7001358)LIM POH YEN (MAICSA 7009745)Company Secretaries

Kuala Lumpur31 July 2018

Notes:

1. A member entitled to attend and vote at this meeting is entitled to appoint one (1) proxy to attend the meeting and vote in his stead. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting and where a member appoints two (2) proxies, the appointment shall be invalid unless the member specifies the proportions of his holdings to be represented by each proxy. A proxy need not be a member of the Company and a member may appoint any person to be his proxy. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the meeting of the Company shall have the same rights as the members to speak at the meeting.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation, either under seal or in some other manner approved by the Directors.

3. Where a member of the Company is an Authorised Nominee, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. An Authorised Nominee shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting and where an Authorised Nominee appoints two (2) proxies in respect of each Securities Account, the appointment shall be invalid unless the Authorised Nominee specifies the proportions of his holdings to be represented by each proxy.

4. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares of the Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each Omnibus Account it holds. Where an Exempt Authorised Nominee appoints more than one (1) proxy in respect of each Omnibus Account, the appointment shall not be invalid unless the Exempt Authorised Nominee specifies the proportions of his holdings to be represented by each proxy.


5. All Proxy Forms must be deposited at the Registered Office of the Company situated at Unit 30-01, Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, or alternatively, the Customer Services Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, not less than 48 hours before the time for holding the meeting or any adjourned meeting.

6. For the purpose of determining members who shall be entitled to attend the Annual General Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to issue a Record of Depositors as at 23 August 2018. Only depositors whose names appear therein shall be entitled to attend the said meeting or appoint a proxy to attend and vote on their behalf.

EXPLANATORY NOTE A

This Agenda item is meant for discussion only as the provision of Section 340(1)(a) of the Act, does not require a formal approval of the shareholders for the Audited Financial Statements. Hence, this Agenda item is not put forward for voting.

EXPLANATORY NOTES TO THE SPECIAL BUSINESSES

1. Ordinary Resolution 7 – Payment of Directors’ BenefitsThe details of the benefits payable to the Directors are as follows:-

Description Board Member The Company/its subsidiary

Meeting Allowance (RM1,200 per meeting)• Board Meeting• General Meeting

Each Board member The Company and its subsidiary companies

Benefits in kind (a) Directors and Officers

Liability Insurance Package

(b) Car and fuel benefit

(a) All Board members (b) Datuk Ir. Hamzah bin Hasan

(a) The Company and its subsidiary companies

(b) West Coast Expressway Sdn. Bhd., an 80%-owned subsidiary of the Company

2. Ordinary Resolution 8 – Authority to issue shares pursuant to Sections 75 and 76 of the ActThe Proposed Ordinary Resolution 8 is a renewal of the general mandate pursuant to Sections 75 and 76 of the Act (“General Mandate”) obtained from the shareholders of the Company at the previous Annual General Meeting and, if passed, will empower the Directors of the Company to issue new shares in the Company from time to time provided that the aggregate number of shares issued pursuant to the General Mandate does not exceed 10% of the issued share capital of the Company for the time being.

The General Mandate, unless revoked or varied by the Company in general meeting, will expire at the conclusion of the next Annual General Meeting of the Company.

As at the date of this Notice, no new ordinary shares in the Company were issued pursuant to the general mandate which was approved at the 16th Annual General Meeting held on 28 August 2017 and which will lapse at the conclusion of the 17th Annual General Meeting.

The General Mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for purpose of funding current and/or future investment project(s), working capital, acquisition and/or for issuance of shares as settlement of purchase consideration.

3. Ordinary Resolution 9 – Proposed Shareholders’ Mandate for RRPTThe detailed information on Resolution 9 pertaining to the Proposed Shareholders’ Mandate for RRPT, is set out in the Circular to Shareholders dated 31 July 2018 which is enclosed together with the Company’s 2018 Annual Report.

4. Ordinary Resolution 10 – Proposed Provision of Financial AssistanceThe detailed information on Resolution 10 pertaining to the Proposed Provision of Financial Assistance, is set out in the Circular to Shareholders dated 31 July 2018 which is enclosed together with the Company’s 2018 Annual Report.


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I/We ___________________________________________________________ (NRIC/Passport/Company No. _______________________)(Name in full and in block letters)

of ______________________________________________________________________________________________________________(Full address)

being a member/members of WCE HOLDINGS BERHAD (534368-A) hereby appoint ____________________________________________

________________________________________________________________________________________________________________(Name in full and in block letters)

(NRIC/Passport No. ________________________________________________________________) of ____________________________(Full address)

________________________________________________________________________________________________________________or failing him/her, the Chairman of the meeting as my/our proxy to vote on my/our behalf at the 17th Annual General Meeting of the Company to be held at Victorian Ballroom, Level 1, Holiday Villa Hotel & Conference Centre Subang Selangor, 9 Jalan SS12/1, 47500 Subang Jaya, Selangor Darul Ehsan on Monday, 3 September 2018 at 2.30 p.m. and at any adjournment thereof, on the resolutions referred to in the Notice of the Annual General Meeting.

My/our proxy is to vote as indicated below:-

No. Resolutions For Against

As Ordinary Business

1 To approve the payment of the Directors’ fees of RM855,210.00 for the financial year ended 31 March 2018.

2 To re-elect Tang King Hua who is retiring by rotation pursuant to Article 97 of the Constitution of the Company.

3 To re-elect Datuk Wira Hj. Hamza Bin Taib as Director who is retiring pursuant to Article 81 of the Constitution of the Company.

4 To re-elect Tan Chor Teck as Director who is retiring pursuant to Article 81 of the Constitution of the Company.

5 To re-elect Vuitton Pang Hee Cheah as Director who is retiring pursuant to Article 81 of the Constitution of the Company.

6 To re-appoint Messrs Baker Tilly Monteiro Heng as Auditors of the Company and to authorise the Directors to fix their remuneration.

As Special Business

7 To approve the payment of the Directors’ Benefits of up to RM150,000.00 for the period from 17th Annual General Meeting until the 18th Annual General Meeting.

8 Authority to issue shares pursuant to Sections 75 and 76 of the Companies Act 2016.

9 Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature.

10 Proposed Provision of Financial Assistance in the form of Corporate Guarantees of up to RM152.00 million to Radiant Pillar Sdn. Bhd., an associate company of the Company.

Please indicate with an “X” in the spaces as to how you wish your vote to be cast. If you do not do so, the Proxy will vote or abstain from voting at his/her discretion.

Dated this ____________ day of _____________ 2018

____________________________________________Signature/Common Seal of member

Notes:1. A member entitled to attend and vote at this meeting is entitled to appoint one (1)

proxy to attend the meeting and vote in his stead. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting and where a member appoints two (2) proxies, the appointment shall be invalid unless the member specifies the proportions of his holdings to be represented by each proxy. A proxy need not be a member of the Company and a member may appoint any person to be his proxy. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the meeting of the Company shall have the same rights as the members to speak at the meeting.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation, either under seal or in some other manner approved by the Directors.

3. Where a member of the Company is an Authorised Nominee, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. An Authorised Nominee shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting and where an Authorised Nominee appoints two (2) proxies in respect of each Securities Account, the appointment shall be invalid unless the Authorised Nominee specifies the proportions of his holdings to be represented by each proxy.

4. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares of the Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each Omnibus Account it holds. Where an Exempt Authorised Nominee appoints more than one (1) proxy in respect of each Omnibus Account, the appointment shall not be invalid unless the Exempt Authorised Nominee specifies the proportions of his holdings to be represented by each proxy.

5. All Proxy Forms must be deposited at the Registered Office of the Company situated at Unit 30-01, Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, or alternatively, the Customer Services Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, not less than 48 hours before the time for holding the meeting or any adjourned meeting.

6. For the purpose of determining members who shall be entitled to attend the Annual General Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to issue a Record of Depositors as at 23 August 2018. Only depositors whose names appear therein shall be entitled to attend the said meeting or appoint a proxy to attend and vote on their behalf.

PROXY FORMCDS ACCOUNT NO.

NO. OF SHARES HELD

For appointment of two proxies, percentage of shareholdings to be represented by the proxies:-

Proxy No. of units Percentage (%)

1

2

Total 100

WCE HOLDINGS BERHAD (534368-A)

Customer Services Centre at Unit G-3 Ground Floor, Vertical Podium, Avenue 3, Bangsar South No. 8, Jalan Kerinchi, 59200 Kuala Lumpur

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