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Annual Report 2015

Ikhmas Jaya G

roup Berhad

VISIONMISSION

•To be the leading bore piling and bridge specialist in the markets we serve.

•Providing innovative solutions that leverage on our capabilities as the preferred bore piling and bridge specialists in Malaysia.

•To deliver sustainable value that determines a better future for all.

&Scope of Services

Piling & Foundation

Bridges

StrongFundamental

Our Business Philosophy & Model•Quality Products•Excellent Service•Maximising Stakeholder Returns•Good Corporate Governance•Social Responsibility

•Safety, Health & Environment •EfficiencyDriven•Employee Welfare•Teamwork•Innovation

Buildings

Other Civil Works

CorporateIkhmas Jaya Group Berhad (“IJGB” or the “Group”) was founded in 1992 by Dato’ Ang Cheng Siong (GroupManaging Director), Dato’ Ir. Dr. KhooPing Sen (Executive Director), Siew MunLout (Executive Director) and Yap YoonFatt (Head of Plant Division). IJGB isprincipally involved in the engineering and construction of piling and foundation, bridges and buildings. Since the Group’sestablishment, IJGB has accumulated an extensive track record with a portfolio of completed projects for both the public and private sectors summing up to a total contract value of approximately RM1.7 billion.

IJGB is highly recognised in the industry for its diverse expertise and experiences across multiple discipline of engineering and have been involved inanumberofhigh-profileprojects such as the award-winning Putra andPraiBridges,KlangValleyMassRapidTransit-KajangLine,KelanaJayaLightRailTransit Extension, Paradigm Mall and KLEco City just to name a few. Armed with its own in-house design and engineering professionals, IJGB is a competitive and formidable participant in the marketplace as a total multi-skilled solutions provider with a competitive edge and versatility to secure projects.

Profile

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ContentsVision&MissionCorporateProfileAwards & RecognitionsCorporate MilestonesCorporate InformationCorporate StructureDirectors’ProfileChairman’sStatementGroupManagingDirector’sReviewofOperationsBusiness Sustainability ReportCorporate Responsibility ReportStatement on Corporate GovernanceAudit & Risk Management Committee ReportStatement on Risk Management and Internal ControlFinancial StatementsList of PropertiesAnalysis of ShareholdingsNotice of Annual General MeetingStatement Accompanying Notice of Annual General MeetingForm of Proxy

0102040607081620252931414649

118120123125

Awards Recognitions

&

500 thousand man-hours without losttimeinjury-CertificateofAppreciationbyPembinaanKSTebrau Sdn Bhd

Good management on safety, health and environment in the workplace and contribution to the reduction of work related injury and disease – CertificateofAppreciationby MMC-Gamuda Joint Venturefortherailwayelectrificationanddoubletracking project from Ipoh to Padang Besar

2 million hours working without lost time injury–CertificateofAppreciation by MMC-GamudaJointVenturefortherailwayelectrificationand double tracking project from Ipoh to Padang Besar

Ranked 5th Position in the Super Golden Bull Category(2) of the Golden Bull Award 2010

Ranked 1st in the Super Golden Bull Category(2) of the Golden Bull Award 2011

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2.6 million man-hours without lost timeinjuryatPackageV8oftheKlangValleyMassRapidTransitSungaiBuloh-KajangLineprojectfrom1January2013to31December2013 by UEM Construction Sdn Bhd

9 million man hours without lost time injury–CertificateofAppreciationbyMMC-GamudaJointVenturefortherailwayelectrificationanddoubletracking project package N4 & N5

The IEM outstanding engineering achievement award for the year 2014 for the design and construction of the Prai swing bridge fortheelectrifieddoubletrack project between Ipoh and Padang Besar

ASEAN outstanding engineering achievement award for the year 2014 for the design and construction of the Prai swing bridge for the electrifieddoubletrackprojectbetween Ipoh and Padang Besar

Awards & Recognitions(cont’d)

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Corporate

1994

Ikhmas Jaya Sdn Bhd secured and commenced our firstprojectforthe

design, construction and commissioning

of water pipe laying works from Sentul

Hill Reservoir to KualaLumpurCity

CentreDevelopmentArea which was

completed in 1995

1997

Ikhmas Jaya Sdn Bhd was awarded two (2)

contracts to construct bridges in Putrajaya

as follows:

a) Bridge BR 10; and

b) Putra Bridge; both of which were

completedin 1999

2001

Ikhmas Jaya Sdn Bhd secured a contract

for the construction of a bridge at Chenor, Pahang which was completed in 2004

2002

Rekavista (Sarawak) Sdn Bhd secured and commenced its firstprojectfortheconstruction of a secondary school in Sibu, Sarawak which was completed in 2004

2003

Ikhmas Jaya Sdn Bhd secured our firstbuildingborepiling contract for the construction of a diaphragm wall for Prince Court Medical Centre, a private hospital in KualaLumpurwhichwas completed in the same year

2004

Ikhmas Jaya Sdn Bhdsecuredourfirstinfrastructure bore piling project for the construction of contiguous bored pile walls for the Gombak River Diversionfloodmitigation project in KualaLumpurwhichwas completed in 2006

2006

Ikhmas Jaya Sdn Bhd undertook piling and foundation works for an administration complex, “Pusat Pentadbiran KerajaanPersekutuan”, in Precinct 5, Putrajaya which was completedin2008

2008

Ikhmas Jaya Sdn Bhd commenced piling and foundation works for Paradigm Mall inKelanaJaya,Selangor

2009

Ikhmas Jaya Sdn Bhd undertook the following:

a) the design and-build building construction of a training centre for the Royal Malaysia Police (PULAPOL) in Terengganu; and

b) the infrastructure works, ground improvement, bridge structures, drainages, road works, landscape and associated works for JB Nusajaya Highway - Section 2: CH 2400 to CH 9500 which was completed in 2011

2010

Ikhmas Jaya Sdn Bhd undertook the design and construction of the Prai Swing Bridge in mainland Penang for the railway electrificationanddouble tracking project from Ipoh to Padang Besar which was completed in August 2013

2012

a) Rekavista Sdn Bhd undertook contiguous bored pile wall, earthworks, piling and basement structure works for Parcel C oftheKLEcoCity project at Bangsar,Kuala Lumpur which was completed in May 2014;

Milestones

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b) Ikhmas Jaya Sdn Bhd secured an additional contract for the substructure works and elevated roadway for ParcelDofthe KLEcoCity project; and

c) Ikhmas Jaya Sdn Bhd was awarded a contract to undertake bore piling, caisson piles and micro piles works for PackageV8of theKlangValley Mass Rapid Transit Sungai Buloh-Kajang Line project in Selangor

2013

a) Ikhmas Jaya Sdn Bhd undertook superstructure and other finishingworks including M&E and interior design works for Damai88

serviced apartments in Ampang,Kuala Lumpur; and

b) Ikhmas Jaya Sdn Bhd undertook infrastructure works for Subang Skypark Terminal Railway Track - Phase 1, a railway project between Saujana and Skypark Terminal in Subang

2014

Received the IEM Outstanding Engineering Achievement Award for the design and construction of the Prai Swing Bridge in mainland Penang for the railway electrificationand double tracking project between Ipoh and Padang Besar by the Institution of Engineers Malaysia

2015

a) Listed on Main Market of Bursa Malaysia Securities Berhad

b) Relocation and expansion of our prefabricated buildings system manufacturing facility

c) Letter of award from MRCB Builders Sdn Bhd for total contract value of RM161.12 million

2016

a) Awarded a RM166.40 million contract to undertake the construction of a serviced apartment awarded by Star Effort Sdn Bhd

b) Letter of award fromKayangan KemasSdnBhd for a total contract value of RM65.30 million for sub-contract works for a bridge construction

c) Letter of award by Gallimont Development Sdn Bhd for a total value of RM173.50 million for the construction of a 49 storey block of serviced apartments

Corporate Milestones(cont’d)

BOARd OF dIReCtORS

dato’ Syed Ariff Fadzillah bin Syed AwalluddinIndependentNon-Executive Chairman

dato’ Ang Cheng SiongGroup Managing Director

dato’ Ir dr Khoo Ping SenExecutive Director

Siew Mun LoutExecutive Director

Ang Wei ZhenExecutive Director

Dzulkifli David bin AbdullahIndependent Non-Executive Director

Yuen Choong LaiSenior IndependentNon-Executive Director

tan Ming-LiIndependent Non-Executive Director

AuDIT&RISKMANAGEMENT COMMITTEE

ChairmanYuen Choong Lai

Membersdato’ Syed Ariff Fadzillahbin Syed Awalluddintan Ming-LiDzulkifli David bin Abdullah

NOMINATION & REMUNERATION COMMITTEE

Chairmandato’ Syed Ariff Fadzillahbin Syed Awalluddin

MembersDzulkifli David bin AbdullahYuen Choong Laitan Ming-Li

COMPAnYSECRETARIES

Cynthia Gloria Louis(MAICSA7008306)Chew Mei Ling(MAICSA 7019175)

REGISTEREDOFFICE

Unit 621, 6th Floor, Block AKelanaCentrePointNo. 3, Jalan SS7/19KelanaJaya47301 Petaling JayaSelangorDarulEhsanTel : (03)78809699Fax : (03)78808699

HEADOFFICE

No. 35, 37 & 39,Jalan PJU 1A/41B PusatDagangannZXAra Jaya, PJU1A47301 Petaling Jaya SelangorDarulEhsanTel : (03)78850626/0612 / 0691Fax : (03)78830720Web : www.ikhmasjaya.comE-mail : [email protected]

STOCKEXCHAnGELISTInG

Main Market of Bursa Malaysia Securities Berhad

STOCKnAME/CODE

IKHMAS/5268

AuDITORS

KPMG(AF0758)Level10,KPMGTower8,FirstAvenueBandar Utama47800PetalingJayaSelangorDarulEhsanTel : (03)77213388Fax : (03) 7721 3399

SHARE REGISTRAR

Symphony Share RegistrarsSdnBhd(378993-D)Level 6, Symphony HousePusatDaganganDana1Jalan PJU 1A/4647301 Petaling JayaSelangorDarulEhsanTel : (03)78418000Fax : (03)78418151

PRInCIPALBAnKERS

AmBank (M) BerhadMalayan Banking BerhadCIMB Bank Berhad

CorporateInformation

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Corporate

Ikhmas JayaSdn Bhd

100%

RekavistaSdn Bhd

100%

Rekavista (Sarawak) Sdn Bhd

100%

MM2 BuildingSystem Sdn Bhd

60%

MM2 BuildersSdn Bhd

100%

Ikhmas JayaGroup Berhad

Ikhmas Equipment Sdn Bhd

100%

IJ GeotechnicSdn Bhd

100%

Structure

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directors’Profile

He is the Chairman of the Nomination and Remuneration Committee and a member of the Audit and Risk Management Committee.

Dato’SyedAriffFadzillahobtainedaBachelorofArtsDegreeinHistoryfromuniversitiMalayain1967,aDiplomainDevelopmentAdministrationfromLondonSchoolofEconomics(nowknownasLondonSchoolofEconomicsandPoliticalScience)in1974andaMasterofArtsinInternationalRelationsfromnewYorkuniversityin1984.

Hebeganhiscareerin1967asanAssistantDistrictOfficerofKulim,Kedahuntil1969.In1970,hejoinedthePublicServiceCommission,KualaLumpurasanAssistantSecretaryuntil1972beforehewastransferredtotheMinistryof Foreign Affairs in the same year. Thereafter, he was appointed as the First Secretary in the High Commission ofMalaysiainOttawa,Canadain1973,theCharge’deAffairesofMalaysiainTripoli,Libyain1976,thePrincipalAssistanceofSecretary,MinistryofForeignAffairsinMalaysiain1979andsubsequently,theDeputyPermanentRepresentativeof thePermanentMissionofMalaysia to theunitednations innewYorkbetween1982and1986.In1986,hewasappointedastheDeputyChiefofMissionintheMalaysianEmbassyinJakarta,Indonesiawhereheserveduntil1989.Subsequently,from1989to1991,heservedastheAmbassadorofMalaysiatoFijiwithconcurrentaccreditations to Tuvalu, Tonga,Western Samoa,Kiribatiandnauru.Healso servedas theundersecretaryattheMinistryofForeignAffairsinchargeofSoutheastAsiaandSouthPacificfrom1991to1992.Priortoretiringinnovember2001,heservedastheAmbassadorofMalaysiatotheRepublicofKoreawithjointaccreditation to Mongolia from 1992 to 1995 and Ambassador of Malaysia to Thailand from 1996 to 2001.

He iscurrently theChairman/ Independentnon-ExecutiveDirectorofEcofirstConsolidatedBhdandBerjayaAuto Berhad.

dato’ Syed Ariff Fadzillahbin Syed Awalluddin

MalaysianAged 73

Independent Non-Executive Chairman(Appointed on 24 December 2014)

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AsourGroupManagingDirector,Dato’AngChengSiongisresponsiblefortheoverallmanagement,strategicplanning and business development of our Group.

HeobtainedhisDiplomainBuildingTechnologyfromTunkuAbdulRahmanCollege(nowknownasTunkuAbdulRahmanuniversityCollege)in1980.HesubsequentlyobtainedhisMasterofBusinessAdministration(Finance)degreefromtheuniversityofHull,unitedKingdomin1992.

Hebeganhiscareerin1980withPembinaanLeowTuckChui&SonSdnBhdasaQuantitySurveyorandleftin1981.HethenjoinedSyarikatManongSdnBhdin1981asaSiteSupervisor.DuringhistenureinSyarikatManongSdnBhd,hewaspromotedtoSeniorSupervisorin1983andSiteAgentin1985.In1988,heleftSyarikatManongSdn Bhd and joined Ho Hup Construction Company Sdn Bhd (now known as Ho Hup Construction Company Berhad) as a Tender Manager. In 1992, he set up Ikhmas Jaya. Subsequently in 1994, he left Ho Hup Construction Company Berhad to manage Ikhmas Jaya. Hehasaccumulatedmorethan30yearsofextensiveexperienceandexpertiseintheconstructionfieldviahisinvolvement in various types of projects involving buildings, highways, dams, marine works, laying pipes, bridges, breakwater constructions, sewerage treatment plants, water supply projects and sports complexes.

dato’ Ang Cheng Siong

MalaysianAged 61Group Managing Director(Appointed on 5 December 2013)

Directors’ Profile(cont’d)

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Dato’IrDrKhooPingSenisresponsibleformanagingandsupervisingthedesignandmethodofconstructionfor all of the projects carried out by our Group. He is also responsible for the special projects undertaken by our GroupandourGroup’sbusinessdevelopment.

He graduated with a Bachelor of Engineering degree with Honours from Monash University, Australia in 1975. He was granted the Monash University Graduate Scholarship and pursued his doctorate degree at the same universityandobtainedhisDoctorofPhilosophydegreeinCivilEngineeringmajoringinstructuresin1979.

Hebeganhiscareer in1979withWanMohamed&KhooSdnBhdasanEngineer.HewaspromotedtothepositionsofSeniorEngineer,Associate,SeniorAssociateandDirectorbeforehe left thecompany in1990. In1990, he joined Ho Hup Construction Company Sdn Bhd (now known as Ho Hup Construction Company Berhad) asaSeniorProjectManager,wherehewasinchargeoftheDesignDepartmentandBorePilingDivision.In1997,he left Ho Hup Construction Company Berhad as a General Manager to join Ikhmas Jaya in the same year as theManagingDirector.HeisamemberoftheInstitutionofEngineersMalaysiasince1983.

He has been involved in the construction industry for more than 35 years and his expertise is in the area of structural design which focuses on bridges, high-rise buildings and industrial buildings. He also specialises in bore piling and foundation works.

dato’ Ir dr Khoo Ping Sen

MalaysianAged 64

Executive Director(Appointed on 5 December 2013)


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Mr Siew Mun Lout is responsible for the day-to-day operations of all of the projects undertaken by our Group.

He graduated with a Bachelor of Engineering in Civil Engineering with Honours from the University of New South Wales,Australiain1987.

HebeganhiscareerwithSyarikatManongSdnBhdin1987asaSiteEngineer.In1990,heleftSyarikatManongSdn Bhd and joined Ho Hup Construction Company Sdn Bhd (now known as Ho Hup Construction Company Berhad) as a Site Engineer. He was subsequently promoted to the positions of Construction Engineer and Project Engineer before he left in 1994 to join Ikhmas Jaya as a Project Manager in the same year. He was then promoted toSeniorProjectManagerin1997andpromotedtotheGeneralManagerofRekavistain1998.Subsequentlyin2002,hewaspromotedtoExecutiveDirectorofIkhmasJaya.

He has more than 25 years of construction experience in bridge works, earthworks and roadworks including breakwater constructions and was involved in numerous types of projects involving highways, dams, marine works, laying pipes, bridge constructions, bore piling and basement constructions.

Siew Mun Lout

MalaysianAged 53Executive Director(Appointed on 4 July 2014)


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AsourExecutiveDirector,MrAngWeiZhenisresponsiblefordevelopingandimplementingstrategicplanstopromotecostefficiencywithinourGroup’soveralloperations.Heisalsoresponsibleforprojectschedulingandbusiness development.

He graduated with a Bachelor of Applied Science degree majoring in Construction Management and Economics fromtheCurtinuniversityofTechnology,Australiain2008.

HebeganhiscareerwithRiderLevettBucknallPtyLtdinPerth,Australiain2008asaJuniorQuantitySurveyor,where he was primarily responsible for carrying out cost estimation work, document controls as well as producing bill of quantity. He left Rider Levett Bucknall Pty Ltd in 2009 and subsequently joined Ikhmas Jaya in the same year asDeputyProjectManagerandSeniorQuantitySurveyor.Hewaspartofthemanagementteaminvolvedintheproject coordination, project management, document control, cost control and cost forecasting.

Ang Wei Zhen

MalaysianAged 32

Executive Director(Appointed on 4 July 2014)


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EncikDzulkifliDavidbinAbdullahgraduatedfromuniversitiMalayawithaBachelorofArtsinEconomicsin1970.HecompletedandobtainedhisprofessionalqualificationfromInstituteofCostandManagementAccountants(nowknownasCharteredInstituteofManagementAccountants(CIMA)inEngland,unitedKingdomin1974.Heis a member of the Nomination and Remuneration Committee and the Audit and Risk Management Committee.

Hebeganhiscareer in 1975with EssoProductionMalaysia Inc. (“EPMI”) inKuala Lumpurwhereheworkedinvariousaccountingandfinancecapacities includingInternalControlSupervisorandFinancialAccountingDivisionManageruntil1981whenhewaspromotedto“SpecialAssistant”totheManagingDirectorofEPMI.Duringhistenureasthe“SpecialAssistant”totheManagingDirector,hisresponsibilitywasmainlytobealiaisonpersonin assisting the communications between the foreign professionals in the company and the team in Petronas. His role includes, but not limited to, assisting in reviewing the annual work program and budget, developing guidelines for authorisation to act on matters, arranging meetings as well as all written communications with Petronas, trackingof cost recoveriesand special assignments instructedby theManagingDirector suchasrepresentingthecompanyontheCommitteeofInternationalChamberofCommerce.Subsequently,in1982,hebecametheSupervisorofPlanningandBudgetingfortheEngineeringDivisionofEPMIbeforebeingassignedtoEssoEasternInc.inHouston,Texas,unitedStatesofAmerica(“uSA”)in1984andtoEssoAustraliaLimitedinSale,Victoria,Australiain1985onaTemporaryForeignAssignment(TFA).In1986,hereturnedtoKualaLumpurandbecametheAssistantControllerofEPMIuntil1988whenhewaspostedtoEPMIinKerteh,TerengganutobecometheRegionalAccountingManager,apositionheserveduntil1992.HereturnedtoKualaLumpur in1992astheMaterialsDepartment(Procurement)ManagerforEPMIandEssoMalaysiaBerhad(nowknownasPetronMalaysiaRefining&MarketingBhd)until1997. Inthesameyear,hewasassignedtoExxonCompanyInternational (ECI) new Jersey as the South East Asia Downstream Procurement Manager, based in KualaLumpuruntil1999beforehewaspostedtoFairfax,Virginia,uSAin1999tobecomeamemberoftheGlobalProcurement “Merger Transition Planning Team” for ExxonMobil Corporation (“ExxonMobil”) until 2000. In 2001, he was assigned to ExxonMobil Oil Indonesia Inc. in Jakarta, Indonesia as the Procurement Services Manager until2002whenheassumedtheroleastheAsiaPacificRegional“PurchasetoPay”ManagerforExxonMobil.

In 2002, he retired from ExxonMobil and started providing private consultancy services in the area of supply chain management to the group of companies under PT Bakrie and Brothers Tbk (“Bakrie and Brothers”) in Jakarta, Indonesiauntil2003.Inthesameyearin2003,hewasappointedastheVicePresidentofProcurementforPTBakrieTelecomTbkandSeniorVicePresidentofProcurementofPTCakrawalaAndalasTelevisiorcommonlyknownasAnTVinJakarta,Indonesia,bothofwhicharethesubsidiariesofBakrieandBrothers. Inearly2008,he left Bakrie and Brothers and returned to Malaysia. He currently freelances as a Consultant on supply chain management and management control processes.

Dzulkifli David bin Abdullah

MalaysianAged 69Independent Non-Executive Director(Appointed on 24 December 2014)


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He is the Chairman of the Audit and Risk Management Committee and a member of the Nomination and Remuneration Committee.

MrYuenChoongLaigraduatedfromuniversitiutaraMalaysiawithaBachelor(Honours)DegreeinAccountingin1988beforeobtainingaMasterofBusinessAdministrationinFinancefromtheuniversityofHull,unitedKingdomin1992.HeobtainedhisCorporateFinanceQualification(CFq)fromtheInstituteofCharteredAccountantsinEngland and Wales (ICAEW) in 2006 and is a member of the Corporate Finance Faculty of the ICAEW. He is also aCharteredAccountantoftheMalaysianInstituteofAccountants(MIA)since1992andaCertifiedPractisingAccountant(CPA)withCPAAustraliasince2008.

Hehasmore than25yearsofexperience in thefinanceandaccounting,bankingand investment industry.Presently,heistheChiefFinancialOfficerofFusionexInternationalPLC,asoftwarecompanythat is listedontheAlternativeInvestmentMarket(AIM)oftheLondonStockExchangeintheunitedKingdom.Hewasformerlythedirectorofalocalprivatefinancialconsultancyandinvestmentboutiquefirmthatspecialisesincorporateadvisoryandinvestmentfrom1995to2012.In1994,hewaswithKualaLumpurStockExchangeastheAccountantinthefinancedivisionoftheExchange.Priortothat,hehasembarkedonacareerinbankingwithHongkongandShanghaiBankingCorporationLimitedfrom1989to1994.In1988,hestartedhiscareerinauditwithPriceWaterhouse & Co.

Previously,hehasservedasanon-ExecutiveDirectorforseveralpubliccompaniesinMalaysiaincludingKurniaAsiaBerhad,KurniaInsurans(Malaysia)BerhadandAnalabsResourcesBerhad.

Yuen Choong Lai

MalaysianAged 52

Senior IndependentNon-Executive Director

(Appointed on 4 July 2014)


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Ms Tan Ming-Li is a member of the Nomination and Remuneration Committee and the Audit and Risk Management Committee.

Ms Tan Ming-Li graduated with a double degree in Law (Hons) and Science from University of Melbourne, Australia in 1993 and has been a member of the Malaysian Bar since 1994.

SheiscurrentlyapartnerinthelegalfirmofCheang&Ariffspecialisingincorporateandsecuritieslaw,wheresheisprincipally involved in advising on capital market transactions, mergers and acquisitions, corporate restructuring aswellasothercorporatefinancerelatedwork.Priorto joiningCheang&Ariff in1997,shepracticed lawinthefirmofAllen&Gledhill,KualaLumpur,intheareasofcorporateandcommerciallitigationandintellectualproperty.SheisanIndependentnon-ExecutiveDirectorofBPPlasticsHoldingBhdandTuneProtectGroupBhd(formerly Tune Ins Holdings Berhad). She is also a non-executive director of Tune Insurance Malaysia Berhad, a subsidiary of Tune Protect Group Bhd (formerly Tune Ins Holdings Berhad).

Notes:

1. Family Relationship with director and/or Substantial Shareholder SaveforMrAngWeiZhen,theExecutiveDirectorwhoisthesonofDato’AngChengSiong,theGroup

ManagingDirectorandaSubstantialShareholderoftheCompany,noneoftheDirectorshaveanyfamilyrelationshipwithanyDirectorand/orSubstantialShareholderoftheCompany.

2. Conflict of Interest noneoftheDirectorshaveanyconflictofinterestwiththeCompany.

3. Conviction for Offences noneoftheDirectorshavebeenconvictedforoffenceswithinthepastten(10)years,otherthantraffic

offences, if any.

4. Board Meetings ThenumberofboardmeetingsattendedbytheDirectorsoftheCompanyaresetoutonpage41ofthis

Annual Report.

5. directors’ Shareholdings ThedetailsoftheDirectors’shareholdingsintheCompanyanditssubsidiariesaredisclosedonpage120

of this Annual Report.

tan Ming-Li

MalaysianAged 47Independent Non-Executive Director(Appointed on 11 May 2015)


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Chairman’sStatement

dato’ Syed Ariff Fadzillahbin Syed Awalluddin

Chairman

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Ikhmas Jaya was successfully listed on Bursa Malaysia’sMainMarketon27July2015anditsshareprice appreciated by 44% on its first day of listing/trading. The strong take-up was a clear reflectionof themarket’s confidence in our business andourprospects going forward. Aside from enhancing our profile within Corporate Malaysia, our public listingexerciseinFY2015alsoenabledustotapthecapitalmarkettostrengthenourfinancialposition.

FY2015 was certainly a challenging year forMalaysia’seconomy.Theyearunderreviewsawaneconomic slowdown, an overhang in the property sector, the introduction of GST and other factors that had a dampening effect on all players within the construction value chain.

However, despite the challenges, I am pleased to report that Ikhmas Jaya had successfully registered anotheryearofprogressandgrowthasreflectedinourfinancialperformanceforFY2015.

FINANCIAL PeRFORMANCe

For FY2015, Ikhmas Jaya registered a revenue ofRM268.66 million, an 8.45% decrease compared toFY2014’sperformanceofRM293.50millionwhileprofitafter tax (“PAT”) was recorded at RM24.30 million, an 13.55%improvementtoRM21.40millioninFY2014.

Given the Group’s increase in profit, the Board ofDirectors recommends a final dividend payout ofapproximately20.6%oftheGroup’sprofitattributableto shareholders, subject to the approval at the forthcoming Annual General Meeting to be held on 20 June 2016.

PRINCIPAL BUSINeSS ACtIVItIeS

Ikhmas Jaya’s principal business activities are inengineering and construction, with the Group being involved in piling and foundation works, bridge construction, building construction and other civil works. The Group also undertakes the manufacturing and installation of prefabricated building system and has successfully positioned itself as a bore piling and bridge specialist.

Over the years, we have established an extensive track record with a portfolio of completed projects for both the public and private sectors with a total value of approximately RM1.7 billion.

deAR SHAReHOLdeRS,

OnbehalfoftheBoardofDirectors,I am pleased to present the annual report and audited financialstatements of Ikhmas Jaya Group Berhad (“Ikhmas Jaya” or “the Group”) for the financial yearended31December2015.

Chairman’s Statement(cont’d)

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The Group owns and operates its own diversifiedfleetofmachineryandequipment to supportpilingand foundation works as well as bridge and building construction. The Group has total machineries assets withacarryingvalueofRM85.8millionforthefinancialyear ended 2015 which comprises crawlers and mobile cranes, bore piling hydraulic and mechanical rigs, excavators, CSM cutter machine, tower crane, vibro hammers and hydraulic breakers.

OPeRAtIONAL HIGHLIGHtS

During the year under review, the Group primarilyfocused on its core operations. This consisted of projects in hand, which were primarily centred in the KlangValleyarea.Ourgoalwastocompletealljobsinatimelymanner,whileensuringcostefficiencyandoptimum operational productivity.

Rising cost was a key challenge for all players in the construction industry, given the onset of GST, the depreciation of the ringgit and other factors. In FY2015, theGroupactivelysoughttoconsolidate itscost structure for projects while continuing to ensure the highest standards of Quality, Health, Safety and the Environment (QHSE).

In FY2015, the Group continued to make steadyprogress and achieved new milestones for QHSE. Full details of these achievements are given in the Sustainability section of this annual report.

OUtLOOK ANd PROSPeCtS

Given the current economic conditions, both globally andlocally,weexpectthegeneraloutlookforFY2016to remain challenging. Within the local construction sector, short to medium-term prospects remain promising with state and private sector spending on the increase as the Government had launched initiatives to spur industry growth. The construction sector will continue to see growth, spurred by the increasing demand for affordable housing, the implementation of various public sector infrastructure projects and other factors as outlined under the Government’s11thMalaysiaPlan.Accordingtotheresearch conducted on the Construction Market in Malaysia 2015-2019, the analyst forecasted that the construction market in Malaysia is expected to growatacompoundedannualgrowthrateof8.92%during 2014 to 2019.

Going forward, the Group will adopt a prudent approach to address the various challenges accordingly. We will continue to increase our operational capability and capacity, to aggressively bid for new contracts and look to grow our business beyondtheKlangValleyarea.

Although there is potential in the construction sector across Malaysia, the logistics of the contracts may be achallengeandmoving forwardweareconfidentof finding the right balance between expandingnationwide whilst optimising our resources to service these contracts.

We will also seek to grow our prefabricated Building System business as it provides several benefits

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over conventional building. These include less requirements for labour and building materials, reduced environmental impact, improved quality and safety control as well as reduce the time required for construction.

In essence, while we are fully cognisant of the challenging business and operational environment

ahead, we remain fairly confident that in FY2016,IkhmasJayawillmaintain itsprofitabilitybarringanyunforeseen circumstances.

ACKNOWLedGeMeNtS

On behalf of the Board of Directors, I wish to takethis opportunity to thank the staff and management of Ikhmas Jaya for their exemplary contributions and professionalism during the year under review. Our people have been a constant factor in our success and we are truly appreciative of their tireless dedication and efforts.

I also wish to express our sincere gratitude to the relevant Board Committees for their wise counsel and contributions; our business partners, clients, regulatory and government authorities for their continuous support and of course to our shareholders who have joined us in this journey during the year under review.

dato’ Syed Ariff Fadzillah bin Syed Awalluddin Independent Non-Executive Chairman

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Group Managing

Review of Operations

dato’ Ang Cheng Siong Group Managing Director

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director’s

The construction industry in Malaysia however, expanded by 10.3%, maintaining its momentum of double-digit growth underpinned by large capital expenditure projects from the public and private sectors in line with the Government’s EconomicTransformation Programme (“ETP”) and public-private partnership (“PPP”) initiative.

Against this backdrop, Ikhmas Jaya in its maiden year as a listed entity registered another year of growth and progressasreflectedinitsfinancialperformance.TheGroup has delivered sustainable growth and via our listingexercise,has takena significant step towardsbecoming a bigger and better company that is better positioned to compete in the marketplace.

FINANCIAL PeRFORMANCe

For FY2015, Ikhmas Jaya recorded revenue ofRM268.66 million, an 8.45% decrease compared toFY2014’sperformanceofRM293.50millionwhileprofitafter tax (“PAT”) was recorded at RM24.30 million, an 13.55% improvement compared to RM21.40 million recordedinFY2014.

Thegrowth inprofit inFY2015 isaclear reflectionofour growing business strength, our ability to secure contracts and to perform in a project-based business environment.

CONtRACtS SeCURed

Ikhmas Jaya has secured four major contracts for the period of November 2015 to March 2016 amounting to RM566.32 million in project revenue.

On 20 November 2015, Ikhmas Jaya was awarded a contract by MRCB Builders Sdn Bhd, the substructure works for a construction project valued at RM161.12 million. The project has since commenced and is on track for completion by July 2017.

ProfitAfterTax

13.55%in 2015

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Group Managing director’sReview of Operations

(cont’d)

deAR SHAReHOLdeRS,

InFY2015,Malaysia’sGDPgrowthhadmoderatedto4.5-5%amidsta11-yearrecordlow crude oil prices and a weakened ringgit against major international currencies.

On 4 January 2016, Ikhmas Jaya was awarded a contract by Star Effort Sdn Bhd for the provision of construction works for serviced “suites” apartments located in Jalan Talalla, Seksyen 69, Bandar KualaLumpur. The contract, valued at RM166.40 million is foraperiodof29monthstillJune2018.

On 3 February 2016, Ikhmas Jaya was awarded the sub-contract works for a bridge construction project inMalaccabyKayanganKemasSdnBhd.Valuedat

Group Managing director’sReview of Operations(cont’d)

Ikhmas Jaya is well positioned to remain profitableinthecoming years while making steady progress towards achieving its long-term business goals and objectives

“

“

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Group Managing director’sReview of Operations

(cont’d)

RM65.30 million; the job includes bore piling, bridge, sub-structure and super-structure works. The project has commenced and is expected to be completed tentatively in August 2017.

On 28March 2016, Ikhmas Jayawas appointedasMainContractorbyGallimontDevelopmentSdnBhdto undertake main building works for a 49-storey block of serviced apartments consisting of 364 residential units, located at Persiaran Stonor, Kuala Lumpur.Valued at RM173.50 million, the project involvesbore piling, sub-structure works and super-structure works. It is expected to commence in April 2016 with completion tentatively scheduled for August 2019.

OUtLOOK & PROSPeCtS

In FY2016, we foresee the Malaysian economy toremain sluggish and hampered by various global and domestic factors.

However, the construction sector is expected to maintain its encouraging pace of double-digit growth, driven by key infrastructure projects. These include the Mass Rapid Transit Second Line (“MRT2”), Bus Rapid Transit (“BRT”) and Light Rail Transit Line 3 (“LRT3”) lines, upgrading and extensions to the Pan Borneo Highway, works on privatised highways such asDuKE,SuKEandDASHetc.,theElectrifiedDoubleTracking Rail project from Gemas to Johor Bahru and the High Speed Rail Line (“HSRL”), and the Pengerang Project in Johor.

Given our long-standing track record and proven expertise as a bore piling and bridge and highway specialist,weareconfidentofwinning someof thepackages or works associated with these contracts. Our track record over the past 20 years which includes varioushigh-profile,publicandprivatesectorprojectshold us in good stead when bidding for future jobs. In recent years, Ikhmas Jaya has been involved in bore piling, substructure and superstructure works forvariousbridgesinPutrajaya,theDuta-uluKelangExpresswayinKualaLumpur,floodmitigationprojectsin northern Kuala Lumpur, the Sungai Buloh-KajangMRT Line and Kelana Jaya LRT line extension inSelangoraswellas theKLEcoCityproject inKualaLumpur.

One particular project, the Prai Swing Bridge which wasakeypartoftheElectrifiedDoubleTrackingRailproject between Ipoh and Padang Besar saw Ikhmas Jaya receiving two awards in recognition of its in-house design and engineering capabilities. These are the IEM Outstanding Engineering Achievement Award

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and ASEAN Outstanding Engineering Achievement Award.

In addition, the Malaysian Government has encouraged the use of the prefabricated building system among construction players, particularly for the construction of low to medium cost housing. In fact, an additional 500,000 units of affordable homes tobeprovidedbyPR1MAby2018willbelargelybuiltusing the prefabricated housing system. This certainly augurs well for Ikhmas Jaya going forward.

With regards to industry challenges, we foresee that market competition is likely to increase with the emergence of new players entering the market. The recent decision by the Government to freeze thehire of new foreign workers, the increase in levy and the rising cost of construction materials will have an impact on all industry players. In mitigating these, Ikhmas Jaya will continue to seek long-term contracts orfixedpricepositionswithsuppliers.

Our people, which are the Group’s core assets,consist of some of the industry’s top professionalswho possess many years of experience and a diverse range of related expertise. Supported by our own fleetofmachineryandequipmentandbycontinuingto adhere to the highest standards in Quality, Health, Safety and the Environment (“QHSE”), we are well poised to address the challenges ahead.

In essence, Ikhmas Jaya is well positioned to remain profitable in thecomingyearswhilemaking steadyprogress towards achieving its long-term business goalsandobjectives.WeremainpositivethatFY2016will be another year of growth for the Group.

dato’ Ang Cheng Siong Group Managing Director

Group Managing director’sReview of Operations(cont’d)

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Ikhmas Jaya Group Berhad (“IJGB” or “the Group”) views sustainability as a key strategy towards supporting its long-term business objectives while providing the impetus and roadmap for continued growth and progress. As we reach new milestones, we are cognisant that our journey as a business entity remains challenging but also replete with plenty of opportunities for success.

Hence, it is imperative that the Group remains focussed on the short, medium and long-term aspirations; that is tofindtheoptimalbalancetoensurethatIJGBremainsontracktowardsgreatersuccess.

FortheGroup,sustainabilityisdefinedorreflectedinseveralkeyareas,thatisdeliveringsustainablefinancialand operational results via sustainable business operations and practices. These are outlined in our approach totheGroup’soperationalstrategy,riskmanagement,humancapitalortalentaswellasquality,health,safetyand the environment.

Each are significant contributors to overall business sustainability and throughout FY2015, the Group hascontinued to emphasise these elements with specific action plans and programmes. These initiativeswerespecificallydesignedtodeliverastrongmeasureofconfidence ineachrespectiveareathatcontributes tobusiness sustainability.

HSSe, the Cornerstone of IJGB’s Operations

Health, Safety, Security and the Environment (HSSE) has always been the cornerstone of IJGB. It is the integral pillar,providingtheframeworkforourcontinuousbusinesssustainabilitysinceourincorporationin1992.Thisfirmbelief emanates from the top management and cascades down to all business entities and departments, as well as laterally, across all levels within our organisation.

HSSe: the Business driver for Safety

IJGB’scommitmentinupholdingthetenetsofHSSEisasourceofpridewithintheorganisation.OurrobustandcomprehensiveHSSE-orientedprocessesaredrilledhomeacrosstheentirerangeofourGroup’sprojects.

Upskilling Opportunities

ToreinforceIJGB’scultureforsafety,ourcomprehensivetrainingprogrammeismappedoutinadvanceforthecalendaryear,targetingemployeesacrossourbusinessoperations,basedeitherattheofficeordirectlyon-site.Where needed, employees are sponsored for external courses and conferences to enhance their understanding of HSSE and gain exposure to best practices with a view to implement in their job upon their return.

BusinessSustainability Report

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HSSe tRAINING

dAte (2015) PROJeCt SIte TRAINING8January Subang Skypark Terminal Railway

TrackSafety harness training

19 January Subang Skypark Terminal Railway Track

Safety handling for welders

23 & 25 March Subang SkyparkTerminal Railway Track

Lifting gear

30 July & 29 August KLEcoCity(ParcelD) Scaffolding Awareness Training (Practical, on-site)

30 July & 7 August KLEcoCity(ParcelD) Scaffolding Awareness Training (Practical, on-site)

eXteRNAL HSSe tRAINING COURSeS

date (2015) Course title Organisers12 March Pile Foundation – Testing Methods

and Best PracticeGeotechnical Engineering TechnicalDivision,IEMandMalaysian Geotechnical Society (MGS)

12 May Practical Construction Contract: Administration/ Management (Session Four)

Master Builders Association MalaysiaandBKEntrusty

26 – 27 May MBAM Annual Safety and Health Conference 2015

Master Builders Association Malaysia (MBAM)

29 - 30 May Rigging and Slinging – Level 2 Beruntung Skill Training Center (BSTC)

9 June Practical Construction Contract: Administration/ Management (Session Five)


Scaffolding Training (Theory) conducted at the Office Scaffolding Training (Practical) conducted on-site

BusinessSustainability Report(cont’d)

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IJGB’s core team discussing preparation for OHSAS 18001 and ISO 14001

eXteRNAL HSSe tRAINING COURSeS (cont’d)

date (2015) Course title Organisers7 July Practical Construction Contract:

Administration/ Management (Session Six)


20 August Introduction to Building Information Modelling (BIM) for Professionals

Women Engineers Section, IEM

24 August Staying Relevant Board of Engineers Malaysia1 – 10 September Intermediate Scaffolding

Competency (Level 2)KLIAProfessionalandManagement College

3 September Environment Aspects and Impacts (EIA)

SIRIM Training Services

COMPLIANCe WItH LOCAL ANd INteRNAtIONAL StANdARdS

Tofurtherestablishinternationallyacceptedbenchmarksofitsefficiencyandeffectivenessofoperations,IJGBispursuingaccreditationwithOHSAS18001andISO14001standards.AcoreteamhasbeensetupinDecember2015andtaskedtotakethisthroughtocertification.

TheOccupationalHealthandSafetyManagementSystems18001orOHSAS18001isanoccupationhealthandsafetyassessmentseriesforhealthandsafetymanagementsystems.Its’roleistoassistallkindsoforganisationsput in place sound occupational health and safety performance. It is a widely recognised and popular occupational health and safety management system.

Aninternationalaccreditedstandard,theISO14001isdesignedtoimproveresourceefficiency,reducewasteand minimise costs. It serves as an assurance to company management and employees as well as external stakeholders that environmental impact is being measured and improved upon.

BusinessSustainability Report

(cont’d)

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Risk

Since2008,TheGrouphaslookedtoassessandmitigateriskandtoreduceexposuretorisk.Riskisaddressedatall levels fromtheBoardofDirectorsandManagement, right totheworking levelswithacomprehensivereporting structure in place. This framework provides a consistent approach to risk mitigation while facilitating a reasonably accurate perception of acceptable risk by the Company.

In addition, the Group continued to adhere to the Malaysian Code of Corporate Governance 2012 to ensure the highest standards and best practices towards managing risk. One of such practices is the Board Charter which serves as a reference point, providing guidance and requirements of the Board and Board Committees whilst theCodeofEthicsandWhistleBlowingPolicyfurthersupportstheintegrityoftheGroup’sbusinessoperations.

Inaddition,awell-definedfinanciallimitofauthorityonallfinancialcommitmentsforeachlevelofmanagementwithin the Group and clearly documented internal policies, standards and procedures have been put in place. Theseareregularlyreviewedandupdatedtoreflectchangingrisksortoresolveoperationaldeficiencies.

On a more operational level, the Group has instituted a structured system to monitor the level of risks at ongoing projects as well as to assess other potential risks. The Safety, Health and the Environment (SHE) meetings as well as HSSE Management meetings are held monthly to review status at all project sites, assess their potential risks to health and safety, and take the necessary action or make recommendations to mitigate such risks.

To-date, our total manhours since last Lost Time Injury (LTI) is 271,720 with a total of 1,117,490 safe manhours achievedfromJanuarytoDecember2015.

training and People development

The Group views human capital as of vital importance to business sustainability and has initiated a comprehensive talent development programme for recruiting, training, retaining and rewarding staff at all levels of the organisation.

Ouremployees,whicharetheGroup’scoreasset,consistsofsomeofthetopindustryprofessionalswhopossessmany years of experience and have a diverse range of related expertise. This includes a team of in-house engineers comprising of Civil, Structural and Geotechnical Engineers. As such, our team is fully capable of designing optimum bore piling systems, taking into consideration factors such as cost effectiveness, practicality, safety, durability and environmental impact.

In FY2015, the Group focussed more on developing its internal talent by providing opportunities for skillsdevelopment, job promotion, career progression and training, as listed under HSSE above.

With regards to remuneration, the Group continue to compensate its employees competitively based on present industrybenchmarksaswellasjobperformanceandcompetency.Aboveandbeyondfinancialcompensation,the Group strives to deliver a conducive working experience and environment for all staff. This includes non-financialincentivesandvariousotherbenefits.

BusinessSustainability Report(cont’d)

Interactive and engaging discussions at the monthly meetings by the SHE and HSSE Management Team

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CorporateSocial Responsibility

The core objective of any successful business is to create value. Ikhmas Jaya Group Berhad (IJGB) is no different and we endeavour to instil a strong positive impact on our stakeholders, whilst creating lasting value. This simply means that we balance business objectives with an awareness on the needs of our employees, customers and community alike.

IJGBhascharteredsignificantdevelopmentsinceourhumblebeginnings in1992whenwefirstcommencedoperations. From gaining an initial foothold in the engineering and construction business in Malaysia, we have worked progressively to attain higher business goals, year after year. Throughout this remarkable journey, we have continuously emphasised the importance of Corporate Social Responsibility (CSR) initiatives for the marginalised community, to elevate their standard of living and in doing so enhance their quality of life.

As a responsible corporate citizen, IJGB has been spearheading various CSR activities for the underservedandweareespeciallyproudnot justofourundertakings,butalsoofouremployees for their strong, selflessparticipation. They have displayed true commitment in our numerous CSR initiatives over the years, involving themselves in a number of impactful initiatives to support the local community.

Highlights of some CSR initiatives over the last year is outlined below:

Yayasan Latihan Insan Istimewa Ipoh

Thischaritableorganisationwassetupin1998asafosterhomeforthecareof40physicallychallengedchildrenandadults, someafflictedwithDown Syndrome, their ages ranging from 9 years to 51 years. IJGB’s directinvolvement in support of this charitable home goes back a number of years. This year, in conjunction with ChinesenewYear, IJGBhascontinued itsCSR support bydonatingRM29,000 for thepurchaseofmedicalequipment and basic necessities. It is truly heartwarming to see the increased mobility of the children using their new wheelchairs and walkers with their broad smiles during the festival celebration.

A further RM20,000 was donated in mid-year by IJGB to this charitable home to help defray its operational expenses,ongoingmaintenanceaswellasprovidethemuch-neededreflexologyandacupuncturesessionsfor the children with medical disabilities. Ikhmas Jaya is proud to have lent a helping hand to help improve the quality of life for the children and adults living at this Home.

Chong Hwa Independent High School, Kuala Lumpur

Chong Hwa Independent High School, Kuala Lumpur is one of the oldest Chinese private high schools inMalaysia,providingeducationtooverfivethousandstudentsandteacherssinceitsestablishmentin1919.Withthe aim of providing affordable education in the Chinese language, the school fees are substantially lower than those at most other private schools. Being an independent high school, they are solely dependent on funds from private donors to ensure its uninterrupted and sustained education for its pupils. In commemoration with its 95th Anniversary, a fundraising initiative was organised with the objective to build a multipurpose complex to house its administrative, management, teaching and extracurricular activities. In this altruistic endeavour, IJGB is indeed proud to be one of the contributors, donating RM50,000 to support this teaching institution an established educational pillar for the community.

Nepal earthquake Humanitarian donation

Thedevastation of the series of earthquakes in 2015 claimed the lives of 8,000 peopleanddisplaced tensof thousands of inhabitants in the affected areas in Nepal. Such was the magnitude that it reverberated emotionally across the globe, touching the hearts and minds of people in other countries. In Malaysia, IJGB, as with other caring companies, stood up to provide assistance to Nepalese in their moment of distress with a humanitarian donation of RM25,000 for immediate relief efforts. It is our fervent hope that their quality of life, homes and infrastructure may be strengthened with such collective global relief effort.

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In the past, we have donated to the underserved community such as the physically challenged and for education initiatives. At the same time, in our business endeavours and in efforts reaching out to support such deserving communities, we have not forgotten another community, one which is within our own premise – our own employees. IJGB has involved itself on a personal level to ensure our staff welfare is prioritised, particularly intimesofcalamitieslikefloods,personallosswithbereavementorevencelebratoryoccasionslikeweddingsand births. We truly believe our biggest assets are not our technologically advanced machines and equipment, but our very own employees.

TheinvolvementofIJGB’semployeesfromvariousdepartmentscombiningtheireffortstosupportanoblecausecreates in itself an opportunity for teambuilding and to foster closer ties amongst colleagues. Interestingly, employees who participated in our CSR initiatives had expressed their personal satisfaction and sense of pride at having an opportunity to contribute back to society.

BesidesIJGB’sorganisedactivities,ouremployeesarealsoencouragedtovolunteertheirowntimeandefforttosupportvariouscharitableinitiativestobenefitthecommunity.Itcanbeseenthatsuchemployeescommittingthemselves in voluntary initiatives have themselves gained in terms of personal development and leadership qualitiessuchasimprovedcommunication,coaching,influencingandnegotiatingabilities.

IJGBisofthefirmbeliefthatCSRisamulti-sectorpartnership,andonlywiththiscanwetrulymoveforward,inthesame direction and pace, as one community.

CorporateSocial Responsibility(cont’d)

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Statement onCorporate Governance

TheBoardofDirectors(“theBoard”)ofIkhmasJayaGroupBerhad(“Company”)iscommittedtoacorporateculture that is based on the principles and best practices of corporate governance and is practised by the Company and its subsidiaries (“the Group”).

The Group will continue to endeavour to comply with all the key Principles and Best Practices of the Malaysian Code on Corporate Governance 2012 (“the Code”) in its effort to observe high standards of transparency, accountabilityandintegrity.TheGroupbelievesthatgoodcorporategovernancewillhelptorealizelongtermshareholders value, whilst taking into account the interest of other stakeholders.

The following paragraphs describe how the Group has applied the Principles and Best Practices of the Code.

1 . eStABLISH CLeAR ROLeS ANd ReSPONSIBILItIeS

TheBoard,comprisingmemberswithdiverse skills, experienceandqualifications, recognizes thecleardistinction of the roles and responsibilities between the Board and the Management. The Board is responsible for the overall strategic direction and leadership of the Group, the adequacy and effectiveness oftheGroup’sriskmanagementandinternalcontrolsystemandcompliancewiththerelevantlawsandregulations. The Management, on the other hand, is responsible for assisting the Board in implementing thestrategies,policiesandproceduresadoptedby theBoard toachieve theGroup’sobjectivesandin running theGroup’sday todaybusinessoperationsunder the stewardshipof theGroupManagingDirector.

The roles and responsibilities of the Board include, among others, the following:-

a. Reviewing and approving the overall strategic plans and direction of the Group. b. Ensuring that the statutory accounts of the Group are fairly stated and conform with the relevant

regulations including acceptable accounting policies that result in balanced and understandable financialstatements.

c. Reviewing and approving annual budgets, business expansion, restructuring plans, material acquisitions and disposals and issuance of new securities.

d. Identifying principal risks and ensuring implementation of a proper risk management system.e. Reviewing the adequacy and the integrity of the management information and internal controls

system of the Group.

Board Charter

The Company has established and adopted a Board Charter which serves as a reference point for Board activities. The Board Charter provides guidance for Directors andManagement regarding theresponsibilitiesof theBoardandBoardCommittees, the requirementsofDirectors incarryingout theirstewardshiprolesandindischargingtheirfiduciarydutiestowardstheCompanyaswellasboardroomactivities.TheBoardChartercanbefoundontheCompany’swebsiteatwww.ikhmasjaya.com.

The Board will review the Board Charter as and when necessary to ensure it remains consistent with the Board’sobjectivesandresponsibilities,andalltherelevantstandardsofcorporategovernance.

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Statement onCorporate Governance(cont’d)

1 . eStABLISH CLeAR ROLeS ANd ReSPONSIBILItIeS (cont’d)

Code of ethics and Whistle Blowing Policy

TheDirectorsobservetheCompanyDirectors’CodeofEthicsestablishedbytheCompaniesCommissionofMalaysia(“CCM”)whichcanbeviewedfromCCM’swebsiteatwww.ssm.com.my.

The Board also has in place a Whistle Blowing Policy for employees to raise genuine concerns, without fear, about any suspected and/or known misconduct, wrongdoings, corruption, fraud, waste and/or abuse. TheBoardhasidentifiedMrYuenChoongLaiastheSeniorIndependentnon-ExecutiveDirectortowhomconcernsmaybeconveyed.MrYuencanbecontactedviathefollowingchannel:-

c/o Ikhmas Jaya Group Berhad No 35, 37 and 39, Jalan PJU 1A/41B, PusatDagangannZX,AraJaya 47301PetalingJaya,SelangorDarulEhsan

Sustainability Policy

The Business Sustainability Report in this Annual Report provides further details on how efforts on sustainability are taken by the Board and the Management.

Access to Information and Advice

Prior to Board meetings, an agenda together with the relevant documents and information are distributed toallDirectors.TheSeniorManagementand/orotherrelevantBoardmemberswillprovidecomprehensiveexplanation of pertinent issues and recommendations. The issues would then be deliberated and discussed thoroughly by the Board prior to decision-making.

Apart from the above, the Board members are supplied with information and reports on financial,operational, corporate, regulatory, business development and audit matters by way of board reports orupon specific request toenable themtodischarge theirdutiesand responsibilities.AllDirectorsarenotifiedof thecorporate,announcements released toBursaMalaysia Securities Berhad (“BMSB”)andanyamendmenttoBMSB’sMainMarketListingRequirements(“ListingRequirements”).AllDirectorshaveaccess to the Management and Auditors for independent view and advice.

Infurtheranceoftheirduties,theDirectorsmayseekindependentprofessionaladviceifnecessary,attheexpense of the Company.

Company Secretary

The Company has appointed qualified named secretaries for the Group who possess the requisitequalificationandtheyplayasupportiverolebyensuringadherencetotheCompany’sconstitution,Boardpolicies and procedures and compliance with the relevant regulatory requirements, codes or guidance and legislations from time to time.

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(cont’d)

2. StReNGtHeN tHe COMPOSItION OF tHe BOARd

Board Composition and Balance

TheBoardconsistsofeight(8)memberscomprisingtheChairman,whoisanIndependentnon-ExecutiveDirector,three(3)Independentnon-ExecutiveDirectorsandfour(4)ExecutiveDirectors.

ItisamandatorypracticetohavetheDirectorsconcernedtodeclaretheirinterestsandabstainfromthedecisionmakingprocesswhenapotentialconflictofinterestarises.

TherolesoftheChairmanoftheBoardandtheGroupManagingDirectoraresegregated.TheChairmanis primarily responsible for the proper conduct and working of the Board whilst the Group Managing Directorisresponsiblefortheday-to-dayrunningofthebusinessandimplementationofBoard’spoliciesanddecisions.TheGroupManagingDirectorisassistedbytheExecutiveDirectors.

Thenon-ExecutiveDirectorsoftheCompanyareindependentofmanagementandfreefromanybusinessrelationship which could materially interfere with the exercise of their judgment. They are actively involved in various Board Committees. They provide guidance, unbiased, fully balanced and independent and objective views, advice and judgment to various areas such as performance monitoring, enhancement of corporate governance and controls so as to safeguard the interest of shareholders and stakeholders and to ensure that the highest standards of conduct and integrity are maintained by the Group.

Board Committees

The Board has delegated certain responsibilities to the Board Committees i.e. Audit and Risk Management Committee and Nomination and Remuneration Committee, who operate within the approved terms of reference. The Board Committees discuss the subject matters put forward, recommendations and report totheBoardforafinaldecision.

(a) Audit and Risk Management Committee (“ARMC”)

The primary objective of the ARMC is to assist the Board in fulfilling its responsibility relating toaccounting, risk management and reporting practices of the Group. The ARMC is accorded all resources required to perform its duties, have full and unrestricted access to any information pertaining to the Group, have direct communication channels with the external and internal Auditors and is entitled to obtain any external legal or other independent professional advice as necessary. The composition of the ARMC is as follows:-

MrYuenChoongLai(Chairman,SeniorIndependentnon-ExecutiveDirector)

Dato’SyedAriffFadzillahbinSyedAwalluddin(Member,Independentnon-ExecutiveDirector) EncikDzulkifliDavidbinAbdullah(Member,Independentnon-ExecutiveDirector)

MsTanMing-Li(Member,Independentnon-ExecutiveDirector)

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2. StReNGtHeN tHe COMPOSItION OF tHe BOARd (cont’d)

(b) Nomination and Remuneration Committee (“NRC”)

A NRC has been established by the Board and has no executive powers. The NRC comprises of exclusivelynon-ExecutiveDirectors,allofwhomareIndependent.TheappointmentofacommitteememberautomaticallyterminateswhenthememberceasestobeaDirector.Thecompositionofthe NRC is as follows:-

Dato’SyedAriffFadzillahbinSyedAwalluddin(Chairman,Independentnon-ExecutiveDirector)

MrYuenChoongLai(Member,SeniorIndependentnon-ExecutiveDirector)

EncikDzulkifliDavidbinAbdullah(Member,Independentnon-ExecutiveDirector)

MsTanMing-Li(Member,Independentnon-ExecutiveDirector)

The functions of the NRC are as follows:

The Board through the NRC shall periodically review its required mix of skills and experience and other qualities, including core competencieswhich non-Executive Directors should bring to theBoard. The NRC meetings shall be convened at least once a year and they may invite other Board members,officersoftheCompany,employeesandanyotherexternalpartiestoattendmeetingsorpart thereof as and when necessary. Through its Chairman, the NRC reports to the Board on matters discussedatthenextBoardofDirectors’Meetingaftereachmeeting.TheCompanySecretaryistheSecretary to the NRC.

As the Company was only listed on the Main Market of BMSB on 27 July 2015, the NRC met once whereby the activities undertaken included, among others, to conduct an annual assessment of theDirectorsandreviewthetrainingneedsoftheDirectors.SubsequenttoFinancialYearEnded31December2015anduptothedateofapprovalforissuanceofthisStatement,thenRChasheldtwomeetingswherebytheactivitiesundertakenincludedamongothers,todeterminetheDirectorsstanding for re-election/re-appointment at the forthcoming Annual General Meeting, reviewed the independence assessment of the independent directors, reviewed the remuneration package of theexecutivedirectorsand to review theDirectors fees before recommending the same fortheBoard’sapprovalforthesametobetabledattheAnnualGeneralMeetingforshareholders’approval, as the case may be.

The nomination and election process of Board Members are as follows:-

Appointment of New directors

TheBoarddoesnotsetspecificcriteriafortheassessmentandselectionofcandidatesforappointmentas director. Consideration would be taken on the need to meet the regulatory requirement such as the Companies Act, 1965 and the Listing Requirements, the experience, integrity, wisdom, independence of the candidate, ability to make analytical inquiries, ability to work as a team to supporttheBoard,possessionoftherequiredskill,qualificationandexpertisethatwouldaddvalueto the Board, understanding of the business environment and the willingness to devote adequate time and commitment to attend to the duties/functions of the Board.


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(b) Nomination and Remuneration Committee (“NRC”) (cont’d)

Appointment of New directors (cont’d)

ThenRCisresponsibletorecommendcandidatestotheBoardtofillvacancyarisingfromresignation,retirement or other reasons or if there is a need to appoint additional directors with the required skill orprofessiontotheBoardinordertoclosethecompetencygapintheBoardidentifiedbythenRC.The potential candidate may be proposed by existing directors, senior management, shareholders or third party referrals.

Upon receipt of the proposal, the NRC is responsible to conduct an assessment and evaluation on the proposed candidate.

Theassessment/evaluationprocessmayincludeamongothers,areviewofthecandidate’sresume,curriculumvitaeandqualification. ThenRCwouldalsoassess thecandidate’s integrity,wisdom,independence, ability to make independent and analytical inquiries, ability to work as a team to support the Board, understanding of the business environment and the willingness to devote adequate time and commitment to attend to the duties/functions of the Board.

Upon completion of the assessment and evaluation of the proposed candidate, the NRC would make its recommendation to the Board. Based on the recommendation of the NRC, the Board would evaluate and decide on the appointment of the proposed candidate.

Annual Assessment of existing directors

The director who is subject to re-election and/or re-appointment at the next Annual General Meeting shall be assessed by the NRC before a recommendation is made to the Board and shareholders for the re-election and/or re-appointment.

Re-election of directors

In accordance with the provisions of the Articles of Association of the Company, at least one-third (1/3)oftheDirectorsforthetimebeingor iftheirnumber isnotthree(3)ormultiplesofthree(3),thenthenumbernearesttoone-third(1/3)shallretirefromofficeandshallbeeligibleforre-electionateachAnnualGeneralMeeting(“AGM”).Consequently,eachDirectorshallretirefromofficeatleastonceineverythreeyearsbutshallbeeligibleforre-election.Directorswhoareappointedtothe Board during the year shall retire and seek re-election at the next AGM to be held following their appointments.

Directors over the age of seventy years are required to submit themselves for re-appointmentannually in accordance with Section 129 of the Companies Act, 1965.


(cont’d)

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diversity

The Board acknowledges the importance of diversity as an essential measure of good corporate governance and an attribute of a well-functioning board. Diversified views enhance Boarddiscussions and ensure that the discussions made by the Board have been considered from all points of view. The Board acknowledges that diversity presents itself in a number of forms, including but not limited to, gender, age, cultural, educational background, ethnicity, professional experience, skills and knowledge.

The Board takes appropriate measures to ensure that boardroom diversity is considered as part of its selection and recruitment exercise. However, the merits of the individual and the knowledge and expertise relevant to the Company will be the main criteria when considering the selection of new candidates to the Board.

Although the Company does not currently have a written policy on diversity pertaining to the selection of its Board members, the Board has always taken into account diversity as one of the selectioncriteriaofBoardappointeesasitrecognisesthatadiversifiedBoardwillprovideeffectiveand dynamic discussions at the Board level. Currently, we have one female director on our Board.

In evaluating candidates for appointment to the Board, the NRC and the Board will always evaluate andmatchthecriteriaofthecandidatesbasedonthecandidates’competency,skills,expertise,experience and commitment.

dIReCtORS’ ReMUNeRAtION

TheobjectivesoftheCompany’sremunerationpolicyonDirectors’remunerationistoattract,retainandmotivatetheDirectorsofthehighestqualityandtorecognizeandrewardthehighperformingDirectorsforachievingtheCompany’sbusinessandcorporategoals.

ThenRCshallensurethatthelevelsofremunerationaresufficienttoattractandretainDirectorsofthe quality required to manage the business of the Group. The NRC is entrusted under its terms of reference to assist the Board, amongst others, to recommend to the Board the remuneration of the executivedirectors.Inthecaseofnon-executivedirectors,thelevelofremunerationshallreflecttheexperience and level of responsibilities undertaken by the non-executive directors concerned.

DetailsofDirectors’ remuneration for thefinancialyearended31December2015aresetoutasbelow:-

executive directors (RM)

Non-executive directors(RM)

Salaries 1,517,000 -Fees - 183,667Other emoluments 1,003,179 26,000


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dIReCtORS’ ReMUNeRAtION (cont’d)

ThenumberofDirectorswhosetotalremunerationfallswithinthefollowingbandsforthefinancialyearended31December2015isasfollows:-

executive Non-executiveRM50,000 and below - 2RM50,001 to RM100,000 - 2RM250,001 to RM300,000 1 -RM600,001 to RM650,000 1 -RM700,001 to RM750,000 1 -RM900,001 to RM950,000 1 -

3. ReINFORCe INdePeNdeNCe

TheBoardconsistsofeight(8)memberscomprisingtheChairman,whoisanIndependentnon-ExecutiveDirector,three(3)Independentnon-ExecutiveDirectorsandfour(4)ExecutiveDirectors.

The Board has complied with Paragraph 15.02 of the Listing Requirements which requires at least two directorsorone-thirdoftheBoard,(whicheveristhehigher)tobeIndependentDirectors.ThepresenceofIndependentDirectorsprovidesobjectivityandindependentjudgmenttodecisionmaking.

Assessment on Independence of directors

In line with Principle 3 of the Code, the Board, with the assistance of the NRC, is required to review the independenceoftheCompany’sIndependentnon-ExecutiveDirectorsonanannualbasis.TheBoardadoptsthedefinitionofan“Independentnon-ExecutiveDirector”asprovidedbytheListingRequirements,andsuchdefinitionisusedascriteriaforDirectors’independenceassessment,whichhasbeencarriedoutat the date of this Statement.

The Code also recommends that the tenure of an independent director should not exceed a cumulative term of nine (9) years and, upon completion of the nine (9) years, an independent director may continue toserveontheboardsubjecttothedirector’sre-designationasnon-independentdirector.TheBoardhasincorporated this recommendation into the Board Charter.

TheCompanydoesnothaveanyIndependentnon-ExecutiveDirectorwhohasservedmorethannine(9)years as at the date of this Statement.

Number of directorsRange of Remuneration


(cont’d)

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4. FOSteR COMMItMeNt

TheBoardissatisfiedwiththeleveloftimecommitmentgivenbytheDirectorstowardsfulfillingtheirrolesand responsibilities asDirectors of theCompanyduring the financial year ended 31December 2015.Incompliancewith theListingRequirements,all theDirectorsdonotholddirectorshipsmorethanthatprescribedundertheListingRequirements.Therewerethree(3)BoardofDirectors’Meetingsheldduringthefinancialyearended31December2015andthedetailsoftheattendanceoftheDirectors’Meetingsare as follows:-

Attended HeldDato’SyedAriffFadzillahbinSyedAwalluddin 3 3Dato’AngChengSiong 3 3Dato’Ir.DrKhooPingSen 2 3Mr Siew Mun Lout 3 3MrAngWeiZhen 3 3MrYuenChoongLai 3 3EncikDzulkifliDavidbinAbdullah 3 3Ms Tan Ming-Li 2 3

directors’ training

The Board acknowledges that continuous education is vital for its Board members to gain insight and maintain the Board members awareness of the economy, technological advances, latest regulatory developments and management strategies. The NRC assesses from time to time the training needs of theDirectorsandensuresthefulfilmentofsuchtrainingdeemedappropriate.TheBoardmembersarealso encouraged to attend training programmes and seminars to keep abreast with developments in the industry as well as to enhance their professionalism and knowledge.

InAugust2015,theDirectorsattendedabriefingondutiesandliabilitiesofdirectorsofalistedCompanyorganizedbytheCompany.Inadditiontotheabove,someoftheDirectorshavealsoattendedtrainingthrough other companies under their directorship or required by their respective professional bodies.

5. UPHOLd INteGRItY IN FINANCIAL RePORtING

Financial Reporting

TheDirectorsareresponsibletopresentatrueandfairassessmentoftheGroup’spositionandprospectsintheannualreportsandquarterlyreports. ThequarterlyfinancialresultswerereviewedbytheARMCandapprovedbytheBoardofDirectorspriortosubmissiontoBMSB.Thefinancialstatementshavebeenprepared in conformity with the Malaysian Financial Reporting Standards, the Companies Act 1965 and any other applicable legislations and regulations.

Number of Board Meetingsdirectors


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5. UPHOLd INteGRItY IN FINANCIAL RePORtING (cont’d)

Relationship with Auditors

The Board has established a formal and transparent arrangement for maintaining appropriate relationships with the external auditors. The external auditors attend ARMC meetings when necessary and have direct access to the ARMC and internal auditors for independent discussion.

The ARMC reviews and monitors the suitability and independence of the external auditors on an annual basis.Inaddition,theARMChasobtainedconfirmationfromtheexternalauditorsthattheyareandhavebeen independent throughout the conduct of the audit engagement.

directors’ Responsibility Statement for the Annual Audited Financial Statements

TheDirectorsarerequiredbytheCompaniesAct,1965topreparefinancialstatementsforeachfinancialyear which have been made out in accordance with the applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 as to give a true and fair view of the state of affairsandtheresultsandcashflowsoftheCompanyandtheGroupforthefinancialyear.

InpreparingthefinancialstatementsoftheGroupfortheyearended31December2015,theDirectorshave adopted appropriate accounting policies and applied them consistently, made prudent and reasonable judgments and estimates and ensured the applicable accounting standards in Malaysia andtheprovisionsoftheCompaniesAct,1965havebeenfollowed.Thefinancialstatementshavebeenprepared on a going concern basis.

TheDirectorsacknowledgeandareresponsibleforensuringthatproperaccountingrecordsarekepttoreflectthereasonableaccuracyofthefinancialpositionoftheCompanyandtheGroupandtoensurethefinancialstatementscomplywithallrelevantrulesandregulations.

TheDirectorsalsohaveageneralresponsibilityfortakingsuchstepsasarereasonablyopentothemtosafeguard the assets of the Group and to prevent and detect fraud and other irregularities.

6. ReCOGNISe ANd MANAGe RISKS

Statement on Risk Management and Internal Control

The Board has an overall responsibility in maintaining a sound internal control system that provides reasonable assuranceofeffectiveandefficientoperationsandcompliancewithinternalproceduresandguidelines.The Statement on Risk Management and Internal Control is set out on page 46 of the Annual Report.

TheGrouphasoutsourceditsinternalauditfunctiontoaprofessionalservicefirmwhichisindependentofthe activities and operations of the Group. The outsourced internal auditors report directly to the ARMC. DetailsontheinternalauditfunctionaresetoutintheAuditandRiskManagementCommitteeReportandthe Statement on Risk Management and Internal Control of this Annual Report.


(cont’d)

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7. tIMeLY ANd HIGH QUALItY dISCLOSURe

Corporate disclosure Policy

The Group acknowledges the importance of timely dissemination of material information to the shareholders, investorsandpublicat large.TheBoardhasadoptedaCorporateDisclosurePolicyandProcedure for the Group which sets out, among others, the scope and extent of disclosure by the various parties within the organisations, timeliness of disclosure as well as assessment of the materiality and if it is reasonably expected to have a material effect on the price, value or market activity of any of the Company’s securities;or thedecisionofamemberof theCompanyoran investor indetermininghischoice of action.

8. ReLAtIONSHIP BetWeeN tHe COMPANY ANd tHe SHAReHOLdeRS

Recognizingtheimportanceoftimelydisseminationofinformationtoshareholdersandotherstakeholders,the Board is committed to ensuring that the shareholders and other stakeholders are well informed of major developments of the Company and the information is communicated to them through the following:-

(i) The Annual Report;(ii) The various disclosures and announcements made to BMSB including the Quarterly Results and

Annual Results;(iii) BriefingstotheCompany’skeyinvestorsorotherinvestmentcommunityinordertoprovidethema

betterunderstandingoftheGroup’soperationsandexplanationtoanyconcernhighlighted;and(iv) The website at www.ikhmasjaya.com which shareholders as well as members of the public are

invited to access for the latest information on the Group.

The Company’s AGM serves as a principal forum for dialogue with shareholders. Shareholders areencouraged to meet and communicate with the Board at the AGM and to vote on all resolutions. Extraordinary General Meetings are held as and when required.

At the commencement of the AGM after the calling of the Meeting to order, the Chairman would remind the shareholders, proxies and corporate representatives on their rights to demand for a poll in accordance with the provisions of the Articles of Association of the Company for any resolutions. The Chairman is also awarethathecandemandforapollforsubstantiveresolutionstabledattheshareholder’smeeting.

StAteMeNt ON COMPLIANCe WItH BeSt PRACtICeS OF tHe COde

PursuanttoParagraph15.25oftheListingRequirements,theBoardissatisfiedthattheCompanyhascompliedwiththeCodeduringthefinancialyearwithregardtotherecommendationssupportingthePrinciplesexceptas otherwise stated.

ThisstatementismadeattheBoardofDirectors’Meetingheldon5April2016.

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Audit & Risk ManagementCommittee Report

TheBoardofDirectorsofIkhmasJayaGroupBerhad(“Company”)ispleasedtopresentthereportoftheAuditandRiskManagementCommitteeforthefinancialyearended31December2015.

AUdIt ANd RISK MANAGeMeNt COMMIttee COMPOSItION ANd MeetINGS

The Audit and Risk Management Committee (“the Committee”) comprises of four (4) members of the Board all ofwhomareIndependentnon-ExecutiveDirectorsasfollows:-

Chairman: MrYuenChoongLai(SeniorIndependentnon-ExecutiveDirector)Members: Dato’SyedAriffFadzillahbinSyedAwalluddin(Independentnon-ExecutiveDirector) EncikDzulkifliDavidbinAbdullah(Independentnon-ExecutiveDirector) MsTanMing-Li(Independentnon-ExecutiveDirector) Therewerethree(3)meetingsheldduringthefinancialyearended31December2015astheCompanywasonly listed on 27 July 2015 and the record of attendance of the Committee Members is as follows:-

Attended HeldMrYuenChoongLai 3 3Dato’SyedAriffFadzillahbinSyedAwalluddin 3 3EncikDzulkifliDavidbinAbdullah 3 3Ms Tan Ming-Li 2 3

the Committee terms of Reference

Purpose

TheobjectiveoftheCommitteeistoassisttheBoardindischargingitsresponsibilitiestosafeguardtheCompany’sassets, manage the overall risk exposure of the Group, maintain adequate accounting records, develop and maintain effective systems of internal control, with the overall objective of ensuring that Management creates and maintains an effective control environment in the Group. The Committee also provides a channel of communicationbetweentheBoardofDirectors,Management,ExternalAuditorsandInternalAuditors.

Composition

1. The members of the Committee are to be appointed by the Board based on the recommendation of thenominationandRemunerationCommitteefromamongsttheDirectorsoftheCompanywhofulfilthefollowing requirements:-

(a) the Committee must composed of no fewer than three (3) members;

(b) allmembers of theCommitteemust benon-ExecutiveDirectors,with amajority of thembeingIndependentDirectors;

(c) allmembersoftheCommitteeshouldbefinanciallyliterate;and

Number of meetings

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(d) atleastonememberoftheCommitteemustfulfiltheexpertiserequisiteoftheBursaMalaysiaSecuritiesBerhad (“Bursa Securities”) Main Market Listing Requirements (“Listing Requirements”) as follows:

(i) he must be a member of the Malaysian Institute of Accountants (“MIA”); or

(ii) ifheisnotamemberoftheMIA,hemusthaveatleastthree(3)years’workingexperienceand:

(1) hemusthavepassedtheexaminationsspecifiedinPartIoftheFirstScheduleoftheAccountantsAct 1967; or

(2) hemustbeamemberofoneoftheassociationsofaccountantsspecifiedinPartIIoftheFirstSchedule of the Accountants Act 1967; or

(iii) fulfilssuchotherrequirementsasprescribedorapprovedbyBursaSecurities.

2. noAlternateDirectorshallbeappointedasamemberoftheCommittee.

3. If a member of the Committee resigns, dies or for any reason ceases to be a member resulting in the non-complianceofparagraph1above,theBoardmustfillthevacancywithinthree(3)months.

4. ThetermsofofficeandperformanceoftheCommitteeandeachofitsmembersshallbereviewedbytheBoard at least once every three (3) years. However, the appointment terminates when a member ceases tobeaDirector.

5. The Board shall have the discretion as it deems fit to rescind and/or revoke the appointment of anyperson(s) in the Committee.

Meetings

1. The Committee shall meet at least four (4) times a year and such additional meetings as the Chairman shall decide.

2. The quorum for a Committee Meeting shall be at least two (2) members; the majority present must be independent directors.

3. Notwithstanding paragraph 1 above, upon the request of any member of the Committee, non-member Directors,theInternalorExternalAuditors,theChairmanshallconveneameetingoftheCommitteetoconsider the matters brought to its attention.

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

5. The non-member Directors and employees of theCompany and of theGroup shall normally attendthemeetingsattheCommittee’sinvitation,toassistinitsdeliberationsandresolutionsofmattersraised.However, at least twice a year, the Committee should meet with the External Auditors without the presence of the executive board members and employees.

The Internal Auditors shall present and discuss the internal audit reports and other related matters.

Audit & Risk ManagementCommittee Report(cont’d)

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(cont’d)

6. In addition to the availability of detailed minutes of the Committee Meetings to the Board, the Chairman oftheCommitteeateachBoardMeeting,willreportasummaryofsignificantmattersandresolutions.

7. A resolution in writing signed or approved via letter, telex, email or facsimile by all Committee members shall be effective for all purposes of a resolution passed at a meeting of the Committee duly convened, held and constituted. Any such resolution may be contained in a single document or may consist of several documents all in the like form signed by one or more members.

Rights

The Committee is authorised to:-

1. Investigate any matter within its terms of reference.

2. Have adequate resources required to perform its duties.

3. Have full and unrestricted access to information, records, documents, facilities and personnel of the Group necessary for the Committee to discharge its duties and responsibilities.

4. Have direct communication channels with the External Auditors and person(s) carrying out the internal audit function or activity.

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

6. ConductorauthoriseathirdpartytoconductspecificassessmentintoanyactivityorfunctionwithintheGroup so far as it relates to the duties of the Committee and is in accordance with its terms of reference, and make recommendations to the Board regarding appropriate action resulting from any such assessment.

7. Convene meetings with the External Auditors, Internal Auditors or both, excluding the attendance of other DirectorsandemployeesoftheCompany,wheneverdeemednecessary.

Functions and duties – Audit

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

2. To formulate corporate governance and integrity policies, regulations and procedures and to monitor their compliance as well as to recommend and report to the Board where necessary.

3. To review the following and report the same to the Board:-

(a) With the External Auditors:

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

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(ii) their evaluation of the system of internal controls;

(iii) the audit fee and on matter concerning their suitability for nomination, appointment and re-appointment and the underlying reasons for resignation or dismissal as External Auditors;

(iv) themanagementletterandmanagement’sresponse;

(v) issues and reservations arising from audits; and

(vi) any suspected fraud or irregularity, or suspected infringement of any relevant laws, rules or regulations,whichhasorislikelytohaveamaterialimpactontheCompany’sandtheGroup’soperatingresultsorfinancialposition,andManagement’sresponse.

(b) WiththeInternalAuditDepartment:

(i) the adequacy and relevance of the scope, functions, competency and resources of the internal audit function and the necessary authority to carry out its work;

(ii) the audit plan of work programme, processes, the results of internal audit programme, processes or investigation undertaken and whether appropriate action is taken on the recommendation of the internal audit function, including recommendations and actions taken;

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

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

(c) ThequarterlyresultsandyearendfinancialstatementspriortotheapprovalbytheBoard,focusingparticularly on:-

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

(ii) significantandunusualissues;

(iii) going concern assumption;

(iv) major risks areas; and

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

(d) Themajorfindingsofinvestigationsandmanagementresponse.

(e) Theproprietyofanyrelatedpartytransactionandconflictofinterestsituationthatmayarisewithinthe Company or the Group including any transaction, procedure or course of conduct that raises questions of management integrity.

Audit & Risk ManagementCommittee Report(cont’d)

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(cont’d)

(f) ToverifytheofallocationofshareoptionstotheGroup’seligibleemployeesincompliancewiththecriteriasetoutintheBy-LawsoftheCompany’sEmployees’ShareOptionScheme,attheendofeachfinancialyear(ifapplicable).

4. To report any breach of the Listing Requirements which has not been satisfactorily resolved to Bursa Securities.

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

Functions and duties - Risk

1. Tooverseethemanagement’sactivitiesinmanagingtheGroup’scriticalrisksrelatedtostrategic,financial,operational, legal and other risks.

2. To advise the Board on matters related to risk management.

3. ToassisttheBoardtofulfilitscorporategovernance,riskmanagementandstatutoryresponsibilitiesinorderto manage the overall risk exposure of the Group.

4. Reviewing and recommending risk management strategies, policies and risk appetite/ tolerance for the Board’sapproval.

5. Reviewing and assessing the adequacy of risk management policies and framework in identifying, measuring, monitoring and controlling risks and the extent to which these are operating effectively.

6. Ensuring infrastructure, resources and systems are in place for risk management.

7. Ensuring that the staff responsible for implementing risk management systems perform those duties independentlyofthebusinessunits’risk-takingactivities.

Summary of Activities

Duringthefinancialyearended31December2015anduptothedateofapprovalforissuanceofthisReport,the Committee had, in discharging its functions and duties, carried out, among others, the following activities:-

a) reviewed the audit plan with the External Auditors;b) reviewed and recommended for the Board’s approval the unaudited quarterly financial results for

announcement to Bursa Securities;c) reviewed the audited financial statements and the relevant reports in the Annual Report before

recommendingfortheBoard’sapproval;d) reviewed and approved the appointment of the outsourced internal auditors; e) reviewed the Statement on Risk Management and Internal Control for inclusion in the Annual Report; andf) reviewedanddiscussedwiththeoutsourcedinternalauditorstheirauditplanforthefinancialyearending

31December2016.

This report is approved for issuance pursuant to the resolution of the Board dated 5 April 2016.

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Statement on RiskManagement & Internal Control

INtROdUCtION

The Board is pleased to present its Statement on Risk Management and Internal Control which outlines the natureandscopeoftheriskmanagementandinternalcontroloftheGroupforthefinancialyear31December2015. This Statement on Risk Management and Internal Control is issued in line with the Main Market Listing RequirementsofBursaMalaysiaSecuritiesBerhadonthestatusoftheGroup’scompliancewiththeprinciplesand best practices relating to risk management and internal control as stipulated in the Malaysian Code of Corporate Governance 2012 (“the Code”).

The Code sets out the principle that the Board of a listed company should establish a sound risk management frameworkandinternalcontrolsystemtosafeguardshareholders’investmentsandassetsoftheGroup.

BOARd ReSPONSIBILItIeS

TheBoardofDirectorsaffirms itsoverall responsibility for theGroup’ssystemof internalcontrol, includingtheassurance of its adequacy and integrity, and its alignment with business objectives. However, it should be noted that control systems are designed to manage, rather than to totally eliminate associated risks and as such, can only provide reasonable but not absolute assurance against material loss or failure.

TheBoardhasalsoreceivedassurancefromtheGroupManagingDirectorandChiefFinancialOfficerthattheGroup’sriskmanagementandinternalcontrolsystemareinplaceforthefinancialyear2015andisoperatingeffectively in all material aspects.

RISK MANAGeMeNt

Subsequent to the reporting year end, the Group has, with the assistance of external consultants, developed an Enterprise Risk Management (“ERM”) framework to achieve the following objectives:

• communicateanddisseminateacrosstheorganisationthevision,roleanddirectionoftheGroup;• identify,assess,evaluateandmanagethevariousprincipalriskswhichaffecttheGroup’sbusiness;• createarisk-awarenesscultureandriskownershipformoreeffectivemanagementofrisks;• formulateasystematicprocessofreview,trackingandreportingonkeysrisksidentifiedandcorresponding

mitigation procedures.

SomeoftheprincipalrisksidentifiedintheERMFrameworkarecategorisedasfollows:

• Strategic,whicharerisksthatimpactthebusinessdirectionoftheGroup• Operational, which are risks that affect the operational efficiency and effectiveness of the Group’s

activities and products• Financial,whicharerisksrelatedtofinancialprocessesandreporting• Competency,whicharerisksassociatedwithknowledgeandresourcesinoperationalmanagementand

activities

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With the implementation of the ERM framework, the Group has commenced the necessary risk management infrastructurewhich incorporates theprocess of identification, assessment, evaluationandmanagement ofprincipal risks, and complemented with relevant monitoring, tracking and reporting functions. Notwithstanding this, risk management principles, policies, procedures and practices are being updated regularly to ensure relevance and compliance with current/applicable laws and regulations, and are made available to all employees.

INteRNAL AUdIt FUNCtION

The Board has given the responsibility for reviewing the adequacy and integrity of the internal control system to the Audit and Risk Management Committee (“ARMC”). The ARMC assessed the adequacy and integrity of theinternalcontrolsystemanditscompliancewiththeGroup’spoliciesandproceduresthroughindependentreviews performed by the outsourced internal audit function which was engaged subsequent to the reporting year end. In this respect, the Board, through the ARMC receives and reviews reports on internal control from the outsourced internal audit function.

The ARMC reviewed and approved the audit plan, scope of work and reviewed reports of the outsourced internal audit function. The internal audit function reports to the ARMC on areas for improvement and will subsequently follow up to determine the extent to which their recommendations have been implemented.

KeY eLeMeNtS OF tHe GROUP’S RISK MANAGeMeNt ANd INteRNAL CONtROL SYSteMS

• Control Environment

The Board is committed towards maintaining a strong control structure and environment for the proper conductoftheGroup’sbusinessoperationsandtowardsachievingasoundsystemofinternalcontrol.

• Organisation Structure

Thereisadefinedorganisationstructurewithscopesofresponsibilitylinesofreporting,andappropriatelevels of delegated authority. There is a process of hierarchical reporting which provides for a documented and auditable trail of accountability.

• Group Policies and Procedures

The Group has in place standard operating procedures and controls to ensure regular and comprehensive informationisprovidedtomanagement,coveringfinancialandoperationalperformanceandkeybusinessindicators,foreffectivemonitoringanddecisionmaking.Delegationofauthoritiesincludingauthorisationlimitsaredefinedtoensureaccountabilityandresponsibility.

Statement on RiskManagement & Internal Control

(cont’d)

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Statement on RiskManagement & Internal Control(cont’d)

• Financial Performance Planning, Review and Tracking

Financial results and performance are reviewed and tracked. There is close monitoring of results against budget, with major variances being followed up and management action taken, where necessary.

• Visits to Operating Units

Members of the Senior Management have made regular visits to operating units.

The Board continues to review and implement measures to strengthen the internal control environment of the Group.

ReVIeW OF tHe StAteMeNt BY eXteRNAL AUdItORS

The external auditors have reviewed this Statement on Risk Management and Internal Control pursuant to the scope set out in Recommended Practice Guide (“RPG”) 5 (Revised 2015), Guidance for Auditors on Engagement to Report on the Statement on Risk Management and Internal Control Included in the Annual Report issued by the Malaysian Institute of Accountants (“MIA”) for inclusion in the annual report of the Group for the year ended 31December2015,andreportedtotheBoardthatnothinghascometotheirattentionthatcausethemtobelieve that the statement intended to be included in the annual report of the Group, in all material respects, has not been prepared in accordance with the disclosures required by paragraphs 41 and 42 of the Statement onRiskManagementandInternalControl:GuidelinesforDirectorsofListedIssuers,orisfactuallyinaccurate. RPG5(Revised2015)doesnotrequiretheexternalauditorstoconsiderwhethertheDirectors’StatementonRisk Management and Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectivenessoftheGroup’sriskmanagementandinternalcontrolsystemincludingtheassessmentandopinionbytheBoardofDirectorsandmanagementthereon.Theauditorsarealsonotrequiredtoconsiderwhethertheprocessesdescribedtodealwithmaterialinternalcontrolaspectsofanysignificantproblemsdisclosedintheannual report will, in fact, remedy the problems.

CONCLUSION

The Board is of the view that the risk management and internal control systems are satisfactory and have not resultedinanymateriallosses,contingenciesoruncertaintiesthatwouldrequiredisclosureintheGroup’sAnnualReport.TheBoardcontinuestotakepertinentmeasurestosustainand,whererequired,toimprovetheGroup’sriskmanagementandinternalcontrolsystemsinmeetingtheGroup’sstrategicobjectives.

This statement is made in accordance with a resolution of the Board dated 19 April 2016.

Financial Statements50 Directors’Report55 StatementbyDirectors55 StatutoryDeclaration56 IndependentAuditors’ReporttotheMembers58 Statements of Financial Position59 StatementsofProfitorLossand Other Comprehensive Income60 Consolidated Statement of Changes in Equity62 Statement of Changes in Equity63 Statements of Cash Flows66 Notes to the Financial Statements115 Supplementary Information116 Additional Compliance Information

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roup Berhad

Directors’Reportfortheyearended31December2015

TheDirectorshavepleasureinsubmittingtheirreportandtheauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended31December2015.

Principal activities

The Company is principally engaged in investment holding activities. The principal activities of the subsidiaries areasstatedinnote5tothefinancialstatements.Therehasbeennosignificantchangeinthenatureoftheseactivitiesduringthefinancialyear.

Results

Group Company RM’000 RM’000

Profit/(Loss)fortheyearattributableto: OwnersoftheCompany 25,157 (608)non-controllinginterests (854) -

24,303 (608)

Reserves and provisions

Therewerenomaterialtransferstoorfromreservesandprovisionsduringthefinancialyearunderreview.

dividends

TheDirectorshaveproposedafirstandfinalsingletiercashdividendof1senperordinaryshareforthefinancialyearended31December2015,whichissubjecttoshareholders’approvalattheforthcomingAnnualGeneralMeeting.

directors of the Company

Directorswhoservedsincethedateofthelastreportare:

Dato’AngChengSiongDato’Ir.Dr.KhooPingSenSiew Mun LoutAngWeiZhenYuenChoongLaiDato’SyedAriffFadzillahbinSyedAwalluddinDzulkifliDavidbinAbdullahTan Ming-Li (appointed on 11 May 2015)

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Directors’Report

fortheyearended31December2015(cont’d)

directors’ interest in shares

The interests and deemed interests in the shares of the Company and of its related corporations of those who wereDirectorsat financial yearend (including the interests of the spousesor childrenof theDirectorswhothemselvesarenotDirectorsoftheCompany)asrecordedintheRegisterofDirectors’Shareholdingsareasfollows:

Number of ordinary shares of RM0.25 each At Share disposal/ At 1.1.2015 split Acquired transfer 31.12.2015

Interests in the Company Dato’AngChengSiong 51* 153 120,498,196 (120,498,400) -Dato’Ir.Dr.KhooPingSen 49* 147 93,995,004 (93,995,200) -Siew Mun Lout - - 35,250,000 (35,250,000) -AngWeiZhen - - 1,000,000 - 1,000,000YuenChoongLai - - 1,500,000 (160,000) 1,340,000Dato’SyedAriffFadzillahbinSyedAwalludin - - 1,000,000 (200,000) 800,000DzulkifliDavidbinAbdullah - - 500,000 - 500,000TanMing-Li - - 228,000 (200,000) 28,000 deemed interests in the Company Dato’AngChengSiong(1) - - 394,000,000 (56,000,000) 338,000,000Dato’Ir.Dr.KhooPingSen(1) - - 394,000,000 (56,000,000) 338,000,000

Notes:

(1) DeemedinterestedbyvirtueoftheirinterestsinIkhmasJayaHoldingsSdn.Bhd.pursuanttoSection6Aofthe Companies Act 1965.

* OrdinarysharesofRM1.00each.

ByvirtueoftheirinterestsintheordinarysharesoftheCompany,Dato’AngChengSiongandDato’Ir.Dr.KhooPingSenarealsodeemedinterestedintheordinarysharesofthesubsidiariesduringthefinancialyeartotheextent that Ikhmas Jaya Group Berhad has an interest.

Directors’ benefits

Sincetheendofthepreviousfinancialyear,noDirectoroftheCompanyhasreceivednorbecomeentitledtoreceiveanybenefit(otherthanabenefitincludedintheaggregateamountofemolumentsreceivedordueandreceivablebyDirectorsasshowninthefinancialstatementsorthefixedsalaryofafulltimeemployeeoftheCompany or of related corporations) by reason of a contract made by the Company or a related corporation withtheDirectororwithafirmofwhichtheDirectorisamember,orwithacompanyinwhichtheDirectorhasasubstantialfinancialinterest.

Therewerenoarrangementsduringandat theendof thefinancialyearwhichhadtheobjectofenablingDirectorsof theCompany toacquirebenefitsbymeansof theacquisitionof shares inordebenturesof theCompany or any other body corporate.

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roup Berhad

Issue of shares and debentures

On 7 May 2015, the Company subdivided its authorised share capital from RM400,000 comprising 400,000 ordinary shares of RM1.00 each to RM400,000 comprising 1,600,000 ordinary shares of RM0.25 each.

On 7 May 2015, the Company subdivided its paid up capital from RM100 comprising 100 ordinary shares of RM1.00 each to RM100 comprising 400 ordinary shares of RM0.25 each.

Duringthefinancialyear,theCompanyissued:

a) 393,999,600newordinarysharesofRM0.25eachatparasthetotalconsiderationofRM98,499,900fortheacquisition of Ikhmas Jaya Sdn. Bhd. as disclosed in Note 26; and

b) 126,000,000 new ordinary shares of RM0.25 each as part of the Initial Public Offering at RM0.57 per ordinary share.

On8May2015,theauthorisedsharecapitaloftheCompanyincreasedfromRM400,000dividedinto1,600,000ordinary shares of RM0.25 each to RM250,000,000 divided into 1,000,000,000 ordinary shares of RM0.25 each by thecreationofanadditional998,400,000ordinarysharesofRM0.25eachrankingparipassuwiththeexistingshares in the Company.

There were no other changes in the authorised, issued and paid-up capital of the Company and no debenture wasissuedduringthefinancialyear.

Options granted over unissued shares

nooptionsweregrantedtoanypersontotakeupunissuedsharesoftheCompanyduringthefinancialyear.

Other statutory information

BeforethefinancialstatementsoftheGroupandoftheCompanyweremadeout,theDirectorstookreasonablesteps to ascertain that:

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

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

Atthedateofthisreport,theDirectorsarenotawareofanycircumstances:

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

ii) thatwouldrenderthevalueattributedtothecurrentassetsinthefinancialstatementsoftheGroupandof the Company misleading, or

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

Directors’Reportfortheyearended31December2015(cont’d)

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Other statutory information (cont’d)

iv) nototherwisedealtwithinthisreportorthefinancialstatementsthatwouldrenderanyamountstatedinthefinancialstatementsoftheGroupandoftheCompanymisleading.

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

i) anychargeontheassetsoftheGrouporoftheCompanythathasarisensincetheendofthefinancialyear and which secures the liabilities of any other person, or

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

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to becomeenforceablewithintheperiodoftwelvemonthsaftertheendofthefinancialyearwhich,intheopinionof theDirectors,will ormay substantiallyaffect theabilityof theGroupandof theCompany tomeet theirobligations as and when they fall due.

IntheopinionoftheDirectors,thefinancialperformanceoftheGroupandoftheCompanyforthefinancialyearended31December2015havenotbeensubstantiallyaffectedbyany item,transactionoreventofamaterial and unusual nature nor has any such item, transaction or event occurred in the interval between the endofthatfinancialyearandthedateofthisreport.

Significant events during the financial year

Significanteventsduringthefinancialyeararedisclosedinnote26tothefinancialstatements.

Directors’Report


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roup Berhad

Auditors

Theauditors,MessrsKPMG,haveindicatedtheirwillingnesstoacceptre-appointment.

SignedonbehalfoftheBoardofDirectorsinaccordancewitharesolutionoftheDirectors:

…………………………………………………………dato’ Ang Cheng Siong

…………………………………………………………dato’ Ir. dr. Khoo Ping Sen

KualaLumpur,

Date:7April2016

Directors’Reportfortheyearended31December2015(cont’d)

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StatementbyDirectors

pursuant to Section 169(15) of the Companies Act, 1965

StatutoryDeclaration

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

IntheopinionoftheDirectors,thefinancialstatementssetoutonpages58to114aredrawnupinaccordancewith Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements oftheCompaniesAct,1965inMalaysiasoastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasof31December2015andoftheirfinancialperformanceandcashflowsforthefinancialyear then ended.

In the opinion of theDirectors, the information set out innote 28 onpage 115 to the financial statementshas been compiled in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

SignedonbehalfoftheBoardofDirectorsinaccordancewitharesolutionoftheDirectors:

……………………………………………………….. ………………………………………………………..dato’ Ang Cheng Siong dato’ Ir. dr. Khoo Ping Sen

KualaLumpur,

Date:7April2016

I, Lim Fung Nee,theofficerprimarilyresponsibleforthefinancialmanagementofIkhmasJayaGroupBerhad,dosolemnlyandsincerelydeclarethatthefinancialstatementssetoutonpages58to115are,tothebestofmy knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true,andbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,1960.

SubscribedandsolemnlydeclaredbytheabovenamedinKualaLumpuron7April2016.

…………………………..………..Lim Fung Nee

Before me:

Commissioner for OathsKalasagarnairLicense No : W513

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roup Berhad

IndependentAuditors’ReportTo the members of Ikhmas Jaya Group Berhad and its subsidiaries

Report on the Financial Statements

Wehaveauditedthefinancialstatementsof IkhmasJayaGroupBerhad,whichcomprisethestatementsoffinancialpositionasat31December2015oftheGroupandoftheCompany,andthestatementsofprofitorlossandothercomprehensiveincome,changesinequityandcashflowsoftheGroupandoftheCompanyfortheyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation,assetoutonpages58to114.

Directors’ Responsibility for the Financial Statements

TheDirectorsoftheCompanyareresponsibleforthepreparationoffinancialstatementssoastogiveatrueand fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting StandardsandtherequirementsoftheCompaniesAct,1965inMalaysia.TheDirectorsarealsoresponsibleforsuchinternalcontrolastheDirectorsdetermineisnecessarytoenablethepreparationoffinancialstatementsthat are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.Weconductedouraudit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financialstatementsarefreefrommaterialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements.Theproceduresselecteddependonourjudgement,includingtheassessmentofrisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,weconsiderinternalcontrolrelevanttotheentity’spreparationoffinancialstatementsthatgiveatrueandfairview in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressinganopinionontheeffectivenessoftheentity’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouraudit opinion.

Opinion

Inouropinion,thefinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasof31December2015andoftheirfinancialperformanceandcashflowsfortheyearthenendedin accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

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IndependentAuditors’Report

TothemembersofIkhmasJayaGroupBerhadanditssubsidiaries(cont’d)

Report on Other Legal and Regulatory Requirements

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

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

(b) WearesatisfiedthattheaccountsofthesubsidiariesthathavebeenconsolidatedwiththeCompany’sfinancialstatementsareinformandcontentappropriateandproperforthepurposesofthepreparationofthefinancialstatementsoftheGroupandwehavereceivedsatisfactoryinformationandexplanationsrequired by us for those purposes.

(c) Ouraudit reportson theaccountsof thesubsidiariesdidnotcontainanyqualificationoranyadversecomment made under Section 174(3) of the Act.

Other Reporting Responsibilities

Ourauditwasmadeforthepurposeofforminganopiniononthefinancialstatementstakenasawhole.Theinformationsetoutinnote28onpage115tothefinancialstatementshasbeencompiledbytheCompanyasrequired by the Bursa Malaysia Securities Berhad Listing Requirements and is not required by Malaysian Financial Reporting Standards or International Financial Reporting Standards. We have extended our audit procedures to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all material respects, in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

Other Matters

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

KPMG Foong Mun KongFirmnumber:AF0758 Approvalnumber:2613/12/16(J)Chartered Accountants Chartered Accountant

Petaling Jaya, Selangor

Date:7April2016

58

Annual Report 2015

Ikhmas Jaya G

roup Berhad

Statements ofFinancial Positionasat31December2015

Group Company Note 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

Assets Property, plant and equipment 3 102,167 79,466 - - Investment property 4 2,930 2,162 - -Investmentsinsubsidiaries 5 - - 98,760 - Other investments 6 226 226 - -Deferredtaxassets 7 108 19 - -

total non-current assets 105,431 81,873 98,760 -

Tradeandotherreceivables 8 223,787 178,190 58,072 4 Inventories 9 449 245 - -Currenttaxassets 482 82 14 -Cashandcashequivalents 10 35,705 27,060 9,781 2

total current assets 260,423 205,577 67,867 6

total assets 365,854 287,450 166,627 6

equity Sharecapital 11 130,000 * 130,000 * Share premium 11 36,747 - 36,747 - Reserves 11 22,603 95,946 (621) (13)

equity attributable to owners of the Company 189,350 95,946 166,126 (13)Non-controlling interests (655) 199 - -

total equity 188,695 96,145 166,126 (13)

Liabilities Loansandborrowings 12 15,354 19,880 - -Deferredtaxliabilities 7 8,077 5,561 - -

total non-current liabilities 23,431 25,441 - -

Tradeandotherpayables 13 91,275 102,480 501 19 Loans and borrowings 12 61,116 57,317 - - Current tax liabilities 1,337 6,067 - -

total current liabilities 153,728 165,864 501 19

total liabilities 177,159 191,305 501 19

total equity and liabilities 365,854 287,450 166,627 6

* DenotesRM100

Thenotesonpages66to115areanintegralpartofthesefinancialstatements.

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Group Company Note 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Revenue -Constructioncontracts 268,656 293,154 - -- Sale of goods - 351 - -

total revenue 268,656 293,505 - -Cost of sales (201,321) (235,605) - -

Gross profit 67,335 57,900 - -Otherincome 383 259 - -Administrativeexpenses (10,807) (8,980) (863) (7)Other operating expenses (19,344) (15,753) - -

Results from operating activities 37,567 33,426 (863) (7)Financeincome 14 909 686 255 -Finance costs 15 (5,711) (5,277) - -

Profit/(Loss) before tax 32,765 28,835 (608) (7)Taxexpense 16 (8,462) (7,426) - -

Profit/(Loss) and total comprehensive income/ (expense) for the year 17 24,303 21,409 (608) (7)

Profit/(Loss) and total comprehensive income/ (expense) attributable to: OwnersoftheCompany 25,157 21,546 (608) (7)non-controllinginterests (854) (137) - -

Profit/(Loss) and total comprehensive income/ (expense) for the year 24,303 21,409 (608) (7)

Basic earnings per ordinary share (sen) 18 5.63 5.47


StatementsofProfitorLoss&Other Comprehensive Income

fortheyearended31December2015

60

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roup Berhad

Con

solid

ated

Sta

tem

ent o

f Cha

nges

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quity

forthe

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95,731

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95,946

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*Den

otesRM100

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ual R

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Con

solid

ated

Sta

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95,946

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roup Berhad

Non-distributable distributable Share Share Accumulated total capital premium losses equity RM’000 RM’000 RM’000 RM’000

Company At 1 January 2014 * - (6) (6)Issueofordinaryshares ** - - **Loss and total comprehensive expense for the year - - (7) (7)

At 31 december 2014/1 January 2015 *** - (13) (13)Contributions by and distributions to owners of the CompanyEffectofacquisitionofsubsidiaries 98,500 - - 98,500Issueofordinaryshares 31,500 40,320 - 71,820Share issue expenses - (3,573) - (3,573)total transactions with owners of the Company 130,000 36,747 - 166,747Loss and total comprehensiveexpensefortheyear - - (608) (608)

At 31 december 2015 130,000 36,747 (621) 166,126

Note 11.1 Note 11.2

* DenotesRM2** DenotesRM98*** DenotesRM100


Statement ofChanges in Equityfortheyearended31December2015

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Statements ofCash Flows

fortheyearended31December2015

Group Company Note 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Cash flows from operating activities Profit/(Loss)beforetax 32,765 28,835 (608) (7) Adjustments for: Depreciationofproperty,plantandequipment 3 10,926 8,863 - - Gain on disposal of property, plant and equipment (30) (79) - - Property, plant and equipment written off 1 - - -Financeincome 14 (909) (686) (255) - Finance costs 15 5,711 5,277 - -

Operating profit/(loss) before changes in working capital 48,464 42,210 (863) (7)Inventories (204) 543 - -Tradeandotherreceivables (45,597) (59,560) (58,068) (4)Tradeandotherpayables (11,205) 38,365 482 13

Cash (used in)/generated from operations (8,542) 21,558 (58,449) 2Tax paid (11,190) (5,341) (14) -Tax refund 25 115 - -Interest paid (5,711) (5,277) - -

Net cash (used in)/generated from operating activities (25,418) 11,055 (58,463) 2

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Statements ofCash Flows fortheyearended31December2015(cont’d)


Cash flows from investing activities Acquisition of a subsidiary - - (260) -Acquisition of property, plant and equipment (i) (27,130) (4,167) - -Acquisitionofinvestmentproperty 4 (768) (1,579) - -Proceeds from disposal of property, plant andequipment 472 584 - -Interestreceived 909 686 255 -

Net cash used in investing activities (26,517) (4,476) (5) -

Cash flows from financing activities Proceedsfrombankers’ acceptances and trust receipts 3,245 5,575 - -Proceeds from loans and other borrowings 4,076 7,479 - -Proceedsfromissuanceofshares 68,247 160 68,247 *Repaymentoffinanceleaseliabilities (13,805) (19,201) - -Decrease/(Increase)inpledgedfixeddeposits 319 (151) - -

Net cash from/(used in) financing activities 62,082 (6,138) 68,247 *

Net increase in cash and cash equivalents 10,147 441 9,779 2Cash and cash equivalents at 1 January (ii) (9,846) (10,287) 2 **

Cash and cash equivalents at 31 december (ii) 301 (9,846) 9,781 2

* DenotesRM98** DenotesRM2

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Statements ofCash Flows


(i) Acquisition of property, plant and equipment

During the year, the Group acquired property, plant and equipment with an aggregate cost ofRM34,070,000(2014:RM18,722,000),ofwhichRM6,940,000(2014:RM14,555,000)wereacquiredbymeansoffinanceleases.

(ii) Cash and cash equivalents

Cashandcashequivalentsincludedinthestatementsofcashflowscomprisethefollowingstatementsoffinancialpositionamounts:

Group Company Note 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Fixeddepositswithlicensedbanks 10 29,649 26,484 5,000 -Less:Pledgeddeposits (23,387) (23,706) - -

6,262 2,778 5,000 -Cashandbankbalances 10 6,056 576 4,781 2Bank overdrafts 12 (12,017) (13,200) - -

301 (9,846) 9,781 2


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Notes to theFinancial Statements

Ikhmas Jaya Group Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The addresses of the principal place of business andregisteredofficeoftheCompanyareasfollows:

Principal place of business Registered officeNo. 35, 37 & 39 Unit 621, 6th Floor, Block AJalanPJu1A/41B KelanaCentrePointPusatDagangannZX no.3,JalanSS17/9,KelanaJayaAra Jaya, PJU 1A 47301 Petaling Jaya47301 Petaling Jaya Selangor, MalaysiaSelangor, Malaysia

TheconsolidatedfinancialstatementsoftheCompanyasatandforthefinancialyearended31December2015 comprise the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”).

The Company is principally engaged in investment holding activities. The principal activities of the subsidiaries areasstatedinnote5tothefinancialstatements.

ThesefinancialstatementswereauthorisedforissuebytheBoardofDirectorson7April2016.

1. Basis of preparation

(a) Statement of compliance

ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedinaccordancewith Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of Companies Act, 1965 in Malaysia.

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

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2016• AmendmentstoMFRS5,Non-current Assets Held for Sale and Discontinued Operations (Annual

Improvements 2012-2014 Cycle)• Amendments toMFRS7,Financial Instruments: Disclosures (Annual Improvements 2012-2014

Cycle)• AmendmentstoMFRS10,Consolidated Financial Statements, MFRS 12, Disclosure of Interests

in Other Entities and MFRS 128, Investments in Associates and Joint Ventures – Investment Entities: Applying the Consolidation Exception

• Amendments to MFRS 11, Joint Arrangements – Accounting for Acquisitions of Interests in Joint Operations

• MFRS 14, Regulatory Deferral Accounts• Amendments to MFRS 101, Presentation of Financial Statements – Disclosure Initiative

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(cont’d)

1. Basis of preparation (cont’d)

(a) Statement of compliance (cont’d)

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2016 (cont’d)• AmendmentstoMFRS116,Property, Plant and Equipment and MFRS138, Intangible Assets –

Clarification of Acceptable Methods of Depreciation and Amortisation• Amendments to MFRS 116, Property, Plant and Equipment and MFRS 141, Agriculture –

Agriculture: Bearer Plants• AmendmentstoMFRS119,Employee Benefits (Annual Improvements 2012-2014 Cycle)• Amendments to MFRS 127, Separate Financial Statements – Equity Method in Separate

Financial Statements• AmendmentstoMFRS134, Interim Financial Reporting (Annual Improvements 2012-2014 Cycle)

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January2018• MFRS9,Financial Instruments (2014)• MFRS15,Revenue from Contracts with Customers

MFRSs, Interpretations and amendments effective from a date yet to be confirmed• Amendments to MFRS 10, Consolidated Financial Statements and MFRS128, Investments in

Associates and Joint Ventures – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

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

• from theannualperiodbeginningon1 January2016 for those standards,amendmentsorinterpretations that are effective for annual periods beginning on or after 1 January 2016;

• from theannualperiodbeginningon1 January2018 for those standards,amendmentsorinterpretationsthatareeffectiveforannualperiodsbeginningonorafter1January2018.

The initial application of the accounting standards, amendments or interpretations are not expected tohaveanymaterialfinancialimpactstothecurrentperiodandpriorperiodfinancialstatementsofthe Group and the Company except as mentioned below:

MFRS 15, Revenue from Contracts with Customers MFRS 15 replaces the guidance in MFRS 111, Construction Contracts, MFRS 118, Revenue, IC

Interpretation 13, Customer Loyalty Programmes, IC Interpretation 15, Agreements for Construction of Real Estate, IC Interpretation18, Transfers of Assets from Customers and IC Interpretation 131, Revenue – Barter Transactions Involving Advertising Services.

TheGroupiscurrentlyassessingthefinancialimpactthatmayarisefromtheadoptionofMFRS15.

MFRS 9, Financial Instruments MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement

on the classificationandmeasurementof financialassetsandfinancial liabilities,andonhedgeaccounting.

TheGroupiscurrentlyassessingthefinancialimpactthatmayarisefromtheadoptionofMFRS9.

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Notes to theFinancial Statements (cont’d)


(b) Presentation format

As disclosed in Note 26, the Company entered into a business combination exercise with Ikhmas Jaya Sdn. Bhd. and its subsidiaries (1), hereinafter referred to as “the Acquisition”.

(1) Includes three direct wholly owned subsidiaries, namely IJ Geotechnic Sdn. Bhd., Ikhmas Equipment Sdn. Bhd., Rekavista Sdn. Bhd. and its direct wholly owned subsidiary, Rekavista (Sarawak) Sdn. Bhd. and 60% interest in MM2 Building System Sdn. Bhd. and its direct wholly owned subsidiary, namely MM2 Builders Sdn. Bhd..

As the combining entities are controlled by the same parties both before and after the combination, book value accounting is applied. The implication of book value accounting on the presentation of theconsolidatedfinancialstatementsisasfollows:

i) Theconsolidatedstatementsoffinancialpositionforthecurrentreportingperiodcomprisetheconsolidation of:• thefinancialpositionofthesubsidiariesasat31December2015;and• thefinancialpositionoftheCompanyasat31December2015.

ii) Theconsolidatedstatementsoffinancialposition for thecomparativeperiodcomprise theconsolidation of:• thefinancialpositionof IkhmasJayaSdn.Bhd.anditssubsidiariesasat31December

2014; and• thefinancialpositionoftheCompanyasat31December2014.

iii) Theconsolidatedstatementsofprofitorlossandothercomprehensiveincomeandcashflowsfor the current reporting period comprise the consolidation of:• thefinancial resultsandcashflowsof thesubsidiaries for thefinancialyearended31

December2015;and• the financial resultsandcash flowsof theCompany for the financial yearended31

December2015.

iv) Theconsolidatedstatementsofprofitorlossandothercomprehensiveincomeandcashflowsfor the comparative period comprise the consolidation of:• thefinancialresultsandcashflowsofIkhmasJayaSdn.Bhd.anditssubsidiariesforthe

financialyearended31December2014;and• the financial resultsandcash flowsof theCompany for the financial yearended31

December2014.

v) The consolidated statement of changes in equity for the current reporting period comprises:• theopeningequitybalancesof the subsidiariesasat1 January2015and theequity

transactionsforthefinancialyearended31December2015;and• theopeningequity balances of theCompanyas at 1 January 2015and theequity

transactionsforthefinancialyearended31December2015.

vi) The consolidated statement of changes in equity for the comparative period comprises:• the consolidated statement of changes in equity of Ikhmas Jaya Sdn. Bhd. and its

subsidiariesforthefinancialyearended31December2014;and• theequitytransactionsoftheCompanyforthefinancialyearended31December2014.

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(cont’d)


(c) Basis of measurement

ThefinancialstatementshavebeenpreparedonthehistoricalcostbasisotherthanasdisclosedinNote 2.

(d) Functional and presentation currency

These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’sfunctionalcurrency.AllfinancialinformationispresentedinRMandhasbeenroundedtothenearestthousand, unless otherwise stated.

(e) Use of estimates and judgements

ThepreparationofthefinancialstatementsinconformitywithMFRSsrequiresmanagementtomakejudgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

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

There are no significant areas of estimation uncertainty and critical judgements in applyingaccounting policies that have significant effect on the amounts recognised in the financialstatements other than those disclosed in the following note:

• note23–Contingencies

2. Significant accounting policies

The accounting policies set out below have been applied consistently to the periods presented in these financialstatementsandhavebeenappliedconsistentlybytheGroupentities,unlessotherwisestated.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiariesareentities,includingstructuredentities,controlledbytheCompany.Thefinancialstatementsofsubsidiariesareincludedintheconsolidatedfinancialstatementsfromthedatethat control commences until the date that control ceases.

The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group also considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investeethatsignificantlyaffecttheinvestee’sreturn.

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2. Significant accounting policies (cont’d)

(a) Basis of consolidation (cont’d)

(i) Subsidiaries (cont’d)

InvestmentsinsubsidiariesaremeasuredintheCompany’sstatementoffinancialpositionatcostlessanyimpairmentlosses,unlesstheinvestmentisclassifiedasheldforsaleordistribution.The cost of investments includes transaction costs.

(ii) Business combinations

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

For new acquisitions, the Group measures the cost of goodwill at the acquisition date as:• thefairvalueoftheconsiderationtransferred;plus• therecognisedamountofanynon-controllinginterestsintheacquiree;plus• if thebusinesscombination isachieved in stages, the fairvalueof theexistingequity

interest in the acquiree; less• thenetrecognisedamount(generallyfairvalue)oftheidentifiableassetsacquiredand

liabilities assumed.

Whentheexcessisnegative,abargainpurchasegainisrecognisedimmediatelyinprofitorloss.

For each business combination, the Group elects whether it measures the non-controlling interests intheacquireeeitherat fairvalueorattheproportionateshareoftheacquiree’sidentifiablenetassetsattheacquisitiondate.

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.

(iii) Non-controlling interests

Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the owners of the Company, are presented in the consolidatedstatementoffinancialpositionandstatementofchangesinequitywithinequity,separately from equity attributable to the owners of the Company. Non-controlling interests in theresultsoftheGroupispresentedintheconsolidatedstatementofprofitorlossandothercomprehensiveincomeasanallocationoftheprofitorlossandtotalcomprehensiveincomefor the year between non-controlling interests and owners of the Company.

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


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(a) Basis of consolidation (cont’d)

(iv) Restructuring among common shareholders

Duringarestructuringwherethecombiningentitiesarecontrolledbythesamepartiesbothbefore and after the combination, book value accounting is applied. The assets and liabilities acquiredarerecognisedintheconsolidatedfinancialstatementsattheirrespectivecarryingamounts without restatement. The differences between the cost of acquisition and the nominal value of the shares acquired are taken to merger reserve (or adjusted against any suitable reserve in the case of debit differences). The other components of equity of the acquired entities are added to the same components within Group equity.

(v) Loss of control

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any non-controlling interests and the other components of equity related totheformersubsidiaryfromtheconsolidatedstatementoffinancialposition.Anysurplusordeficitarisingonthelossofcontrolisrecognisedinprofitorloss.IftheGroupretainsanyinterestin the former subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity accounted investee or as an available-for-salefinancialassetdependingonthelevelofinfluenceretained.

(vi) transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-grouptransactions,areeliminatedinpreparingtheconsolidatedfinancialstatements.

(b) Foreign currency

Foreign currency transactions

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

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

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

Foreign currency differences arising on retranslation are recognised in profit or loss, except fordifferencesarisingontheretranslationofavailable-for-saleequityinstrumentsorafinancialinstrumentdesignated as a hedge of currency risk, which are recognised in other comprehensive income.


(cont’d)

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(c) Financial instruments

(i) Initial recognition and measurement

Afinancialassetorafinancialliabilityisrecognisedinthestatementoffinancialpositionwhen,and only when, the Group or the Company becomes a party to the contractual provisions of the instrument.

A financial instrument is recognised initially, at its fair valueplus, in thecaseofa financialinstrumentnotatfairvaluethroughprofitorloss,transactioncoststhataredirectlyattributabletotheacquisitionorissueofthefinancialinstrument.

An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risksofthehostcontractandthehostcontractisnotcategorisedatfairvaluethroughprofitor loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the host contract.

(ii) Financial instrument categories and subsequent measurement

TheGroupandtheCompanycategorisefinancialinstrumentsasfollows:

Financial assets

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

Fair value throughprofit or loss category comprises financial assets that are held fortrading, including derivatives (except for a derivative that is a financial guaranteecontract or a designated and effective hedging instrument), contingent consideration inabusinesscombinationor financialassets thatare specificallydesignated into thiscategory upon initial recognition.

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

Otherfinancialassetscategorisedasfairvaluethroughprofitor lossaresubsequentlymeasuredattheirfairvalueswiththegainorlossrecognisedinprofitorloss.

(b) Loans and receivables

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

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


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(c) Financial instruments (cont’d)

(ii) Financial instrument categories and subsequent measurement (cont’d)

Financial assets (cont’d)

(c) Available-for-sale financial assets

Available-for-sale category comprises investment in club memberships that are not held for trading.

Investments in club memberships that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost.

Allfinancialassets,exceptforthosemeasuredatfairvaluethroughprofitorloss,aresubjecttoreview for impairment (see Note 2 (j)).

Financial liabilities

All financial liabilities are subsequently measured at amortised cost other than thosecategorisedasfairvaluethroughprofitorloss.

Fair value through profit or loss category comprises financial liabilities that are derivatives(exceptforaderivativethatisafinancialguaranteecontractoradesignatedandeffectivehedginginstrument),contingentconsiderationinabusinesscombinationorfinancialliabilitiesthatarespecificallydesignatedintothiscategoryuponinitialrecognition.

Derivativesthatarelinkedtoandmustbesettledbydeliveryofequityinstrumentsthatdonothave a quoted price in an active market for identical instruments whose fair values otherwise cannot be reliably measured are measured at cost.

Other financial liabilities categorised as fair value through profit or loss are subsequentlymeasuredattheirfairvalueswiththegainorlossrecognisedinprofitorloss.

(iii) derecognition

Afinancialassetorpartofitisderecognisedwhen,andonlywhenthecontractualrightstothecashflowsfromthefinancialassetexpireorcontroloftheassetisnotretainedorsubstantiallyalloftherisksandrewardsofownershipsofthefinancialassetaretransferredtoanotherparty.Onderecognitionofafinancialasset,thedifferencebetweenthecarryingamountandthesum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profitorloss.

Afinancialliabilityorapartofitisderecognisedwhen,andonlywhen,theobligationspecifiedinthecontractisdischarged,cancelledorexpires.Onderecognitionofafinancialliability,thedifferencebetweenthecarryingamountofthefinancial liabilityextinguishedortransferredto another party and the consideration paid, including any non-cash assets transferred or liabilitiesassumed,isrecognisedinprofitorloss.


(cont’d)

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(d) Property, plant and equipment

(i) Recognition and measurement

Freehold land and assets under construction are stated at cost. Other items of property, plant and equipment are measured at cost less any accumulated depreciation and any accumulated impairment losses.

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

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 usefullives, they are accounted for as separate items (major components) of property, plant and equipment.

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

(ii) Subsequent costs

The cost of replacing a component of an item of property, plant and equipment is recognised inthecarryingamountoftheitemifitisprobablethatthefutureeconomicbenefitsembodiedwithinthecomponentwillflowtotheGrouportheCompany,anditscostcanbemeasuredreliably.Thecarryingamountofthereplacedcomponentisderecognisedtoprofitorloss.Thecostsoftheday-to-dayservicingofproperty,plantandequipmentarerecognisedinprofitorloss as incurred.

(iii) depreciation

Depreciationisbasedonthecostofanassetlessitsresidualvalue.Significantcomponentsofindividual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that component is depreciated separately.

Depreciation is recognised inprofitor lossonastraight-linebasisover theestimatedusefullives of each component of an item of property, plant and equipment from the date that they are available for use. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.


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(d) Property, plant and equipment (cont’d)

(iii) depreciation (cont’d)

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

• Buildings 50years• Motorvehicles 5-8years• Machineryandequipment 5-50years• Furniture,fittingsandequipment 10years

Depreciationmethods,usefullivesandresidualvaluesarereviewedattheendofthereportingperiod, and adjusted as appropriate.

(e) Leased assets

(i) Finance lease

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

Minimumleasepaymentsmadeunderfinanceleasesareapportionedbetweenthefinanceexpenseandthereductionof theoutstanding liability.Thefinanceexpense isallocatedtoeach period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment isconfirmed.

Leasehold land which in substance is a finance lease is classified as property, plant and

equipment.

(ii) Operating lease

Leases, where the Group or the Company does not assume substantially all the risks and rewardsofownershipareclassifiedasoperatingleasesand,exceptforpropertyinterestheldunderoperating lease, the leasedassetsarenot recognisedon the statementof financialposition. Property interest held under an operating lease, which is held to earn rental income orforcapitalappreciationorboth,isclassifiedasinvestmentpropertyandmeasuredusingfairvalue model.

Paymentsmadeunderoperatingleasesarerecognisedinprofitorlossonastraight-linebasisover the termof the lease.Lease incentives receivedare recognised inprofitor lossasanintegral part of the total lease expense, over the term of the lease. Contingent rentals are chargedtoprofitorlossinthereportingperiodinwhichtheyareincurred.


(cont’d)

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(e) Leased assets (cont’d)

(ii) Operating lease (cont’d)

Leasehold land which in substance is an operating lease is classified as prepaid leasepayments.

(f) Investment property

Investment property carried at fair value

Investment properties are properties which are owned to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes.

Investment properties are measured initially at cost and subsequently at fair value with any changesthereinrecognisedinprofitorlossfortheperiodinwhichtheyarise.Wherethefairvalueof the investment property under construction is not reliably determinable, the investment property under construction is measured at cost until either its fair value becomes reliably determinable or construction is complete, whichever is earlier.

Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost of self-constructed investment property includes the cost of materials and direct labour, any other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalised borrowing costs.

An investment property is derecognised on its disposal, or when it is permanently withdrawn from use andnofutureeconomicbenefitsareexpectedfromitsdisposal.Thedifferencebetweenthenetdisposalproceedsandthecarryingamountisrecognisedinprofitorlossintheperiodinwhichtheitem is derecognised.

(g) Inventories

Inventories are measured at the lower of cost and net realisable value.

The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringingthemtotheirexistinglocationandcondition.Inthecaseofwork-in-progressandfinishedgoods, cost includes an appropriate share of production overheads based on normal operating capacity.

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


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(h) Construction work-in-progress

Construction work-in-progress represents the gross unbilled amount expected to be collected from customers for contractworkperformed todate. It ismeasuredat cost plusprofit recognised todate less progress billings and recognised losses. Cost includes all expenditure related directly to specificprojectsandanallocationoffixedandvariableoverheadsincurredintheGroup’scontractactivities based on normal operating capacity.

Construction work-in-progress is presented as part of trade and other receivables as amount duefromcontractcustomersinthestatementoffinancialpositionforallcontractsinwhichcostsincurredplus recognisedprofitsexceedprogressbillings. Ifprogressbillingsexceedcosts incurredplusrecognisedprofits,thenthedifferenceispresentedasamountduetocontractcustomerswhichispartofthetradeandotherpayablesinthestatementoffinancialposition.

(i) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquidinvestmentswhichhaveaninsignificantriskofchangesinfairvaluewithoriginalmaturitiesofthree months or less, and are used by the Group and the Company in the management of their short termcommitments.Forthepurposeofthestatementofcashflows,cashandcashequivalentsarepresented net of bank overdrafts and pledged deposits.

(j) Impairment

(i) Financial assets

Allfinancialassets(exceptforfinancialassetscategorisedasfairvaluethroughprofitorlossand investments in subsidiaries) are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on theestimatedfuturecashflowsoftheasset.Lossesexpectedasaresultoffutureevents,nomatterhowlikely,arenotrecognised.Foraninvestmentinanequityinstrument,asignificantor prolonged decline in the fair value below its cost is an objective evidence of impairment. If anysuchobjectiveevidenceexists,thentheimpairmentlossofthefinancialassetisestimated.

An impairment loss in respectof loansand receivables is recognised inprofitor lossand ismeasured as the difference between the asset’s carrying amount and the present valueofestimated futurecashflowsdiscountedat theasset’soriginaleffective interest rate. Thecarrying amount of the asset is reduced through the use of an allowance account.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised inprofitorlossandismeasuredasthedifferencebetweenthefinancialasset’scarryingamountandthepresentvalueofestimatedfuturecashflowsdiscountedatthecurrentmarketrateofreturnforasimilarfinancialasset.


(cont’d)

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(j) Impairment (cont’d)

(i) Financial assets (cont’d)

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

(ii) Other assets

The carrying amounts of other assets (except for inventories, amount due from contract customers, deferred tax assets and investment property measured at fair value) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. Ifanysuchindicationexists,thentheasset’srecoverableamountisestimated.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets thatgeneratescash inflowsfromcontinuingusethatare largely independentof thecashinflowsofotherassetsorcash-generatingunits.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use anditsfairvaluelesscostsofdisposal.Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheassetorcash-generatingunit.

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

Impairmentlossesarerecognisedinprofitorloss.Impairmentlossesrecognisedinrespectofcash-generating units are allocated to reduce the carrying amounts of the other assets in the cash-generating unit (or a group of cash-generating units) on a pro rata basis.

Impairment losses recognised in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to theextentthattheasset’scarryingamountdoesnotexceedthecarryingamountthatwouldhave been determined, net of depreciation or amortisation, if no impairment loss had been recognised.Reversalsofimpairmentlossesarecreditedtoprofitorlossinthefinancialyearinwhich the reversals are recognised.


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(k) equity instruments

Instrumentsclassifiedasequityaremeasuredatcostoninitialrecognitionandarenotremeasuredsubsequently.

(i) Issue expenses

Costsdirectlyattributable to the issueof instrumentsclassifiedasequityare recognisedasdeduction from equity.

(ii) Ordinary shares

Ordinarysharesareclassifiedasequity. (iii) distributions of assets to owners of the Company

The Group measures a liability to distribute assets as a dividend to the owners of the Company at the fair value of the assets to be distributed. The carrying amount of the dividend is remeasured at each reporting period and at the settlement date, with any changes recognised directly in equity as adjustments to the amount of the distribution. On settlement of the transaction, the Group recognises the difference, if any, between the carrying amount of the assets distributed andthecarryingamountoftheliabilityinprofitorloss.

(l) Employee benefits

(i) Short-term employee benefits

Short-termemployeebenefitobligationsinrespectofsalaries,annualbonuses,paidannualleave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus orprofit-sharingplansiftheGrouphasapresentlegalorconstructiveobligationtopaythisamount as a result of past service provided by the employee and the obligation can be estimated reliably.

(ii) State plans

TheGroup’scontributionstostatutorypensionfundsarechargedtoprofitorlossinthefinancialyear to which they relate. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future repayments is available.


(cont’d)

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(m) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligationthatcanbeestimatedreliably,anditisprobablethatanoutflowofeconomicbenefitswill be required to settle the obligation. Provisions are determined by discounting the expected futurecash flowsatapre-tax rate that reflectscurrentmarketassessmentsof the timevalueofmoneyandtherisksspecifictotheliability.Theunwindingofthediscountisrecognisedasfinancecost.

(n) Revenue and other income

(i) Goods sold

Revenue from the sale of goods in the course of ordinary activities is measured at fair value of the consideration received or receivable, net of returns and allowances, trade discount and volume rebates. Revenue is recognised when persuasive evidence exists, usually in the form of anexecutedsalesagreement,thatthesignificantrisksandrewardsofownershiphavebeentransferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.

(ii) Construction contracts

Contract revenue includes the initial amount agreed in the contract plus any variations in contract work, claims and incentive payments, to the extent that it is probable that they will result in revenue and can be measured reliably. As soon as the outcome of a construction contract can be estimated reliably, contract revenue and contract cost are recognised in profitorlossinproportiontothestageofcompletionofthecontract.Contractexpensesarerecognised as incurred unless they create an asset related to future contract activity.

Thestageofcompletionisassessedbyreferencetothesumscertifiedbysurveyorsforworkperformed to-date.

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that are likely to be recoverable. An expectedlossonacontractisrecognisedimmediatelyinprofitorloss.

(iii) Rental income

Rentalincomefrominvestmentpropertyisrecognisedinprofitorlossonastraight-linebasisover the term of the lease.


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(n) Revenue and other income (cont’d)

(iv) Interest income

Interestincomeisrecognisedasitaccruesusingtheeffectiveinterestmethodinprofitorloss.

(v) dividend income

DividendincomeisrecognisedinprofitorlossonthedatethattheGroup’sortheCompany’sright to receive payment is established.

(o) Borrowing costs

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifyingassetarerecognisedinprofitorlossusingtheeffectiveinterestmethod.

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

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

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

(p) Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised inprofitor lossexcepttotheextentthat it relatestoabusinesscombinationor itemsrecognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustmenttotaxpayableinrespectofpreviousfinancialyears.

Deferredtaxisrecognisedusingtheliabilitymethod,providingfortemporarydifferencesbetweenthecarryingamountsofassetsandliabilitiesinthestatementoffinancialpositionandtheirtaxbases.Deferredtaxisnotrecognisedfortheinitialrecognitionofassetsorliabilitiesinatransactionthatisnotabusinesscombinationandthataffectsneitheraccountingnortaxableprofitorloss.Deferredtax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.


(cont’d)

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(p) Income tax (cont’d)

Deferredtaxassetsandliabilitiesareoffsetifthereisalegallyenforceablerighttooffsetcurrenttaxliabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax assets and liabilities on a net basis or their tax assets and liabilities will be realised simultaneously.

Adeferredtaxassetisrecognisedtotheextentthatitisprobablethatfuturetaxableprofitswillbeavailableagainstwhichthetemporarydifferencecanbeutilised.Deferredtaxassetsarereviewedat the end of each reporting period and are reduced to the extent that it is no longer probable that therelatedtaxbenefitwillberealised.

(q) earnings per ordinary share

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

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

(r) Contingent liabilities

Whereitisnotprobablethatanoutflowofeconomicbenefitswillberequired,ortheamountcannotbeestimatedreliably,theobligationisnotrecognisedinthestatementsoffinancialpositionandisdisclosedasacontingentliability,unlesstheprobabilityofoutflowofeconomicbenefitsisremote.Possibleobligations,whoseexistencewillonlybeconfirmedbytheoccurrenceornon-occurrenceof one or more future events, are also disclosed as contingent liabilities unless the probability of outflowofeconomicbenefitsisremote.

(s) Fair value measurements

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

Fornon-financialasset,thefairvaluemeasurementtakesintoaccountamarketparticipant’sabilitytogenerateeconomicbenefitsbyusingtheassetinitshighestandbestuseorbysellingittoanothermarket participant that would use the asset in its highest and best use.


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(s) Fair value measurements (cont’d)

When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs 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.

(t) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions withanyof theGroup’sothercomponents.Operatingsegment resultsare reviewedregularlybythechiefoperatingdecisionmaker,which in thiscase is theGroupManagingDirector, tomakedecisions about resources to be allocated to the segment and to assess its performance, and for whichdiscretefinancialinformationisavailable.


(cont’d)

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3.

Prop

erty

, pla

nt a

nd e

quip

men

t

Furn

iture

,

Mac

hine

ry

fittin

gs

Fr

eeho

ld

M

otor

an

d an

d Un

der

land

Bu

ildin

gs

vehi

cles

eq

uipm

ent

equi

pmen

t co

nstru

ctio

n to

tal

RM’0

00

RM’0

00

RM’0

00

RM’0

00

RM’0

00

RM’0

00

RM’0

00

G

roup

C

ost

At1Jan

uary2014

8,628

3,158

9,508

102,881

3,952

5128,132

Addition

s108

-668

17,876

70

-18,722

Disp

osals

--

(265)

(1,023)

(19)

(2)

(1,309)

Writtenoff

--

(87)

--

-(87)

At31Dec

embe

r2014/1Janu

ary2015

8,736

3,158

9,824

119,734

4,003

3145,458

Ad

diti

ons

- -

599

33,2

64

207

- 34

,070

Disp

osals

--

(1,499)

(140)

(21)

-(1,660)

Writ

ten

off

- -

- -

(3)

- (3

)

At31Dec

embe

r2015

8,736

3,158

8,924

152,858

4,186

3177,865

de

prec

iatio

n

At1Jan

uary2014

-460

5,392

50,547

1,621

-58,020

Dep

reciationforthe

yea

r-

63

812

7,667

321

-8,863

Disp

osals

--

(68)

(727)

(9)

-(804)

Writtenoff

--

(87)

--

-(87)

At31Dec

embe

r2014/1Janu

ary2015

-523

6,049

57,487

1,933

-65,992

Dep

reciationforthe

yea

r-

63

850

9,687

326

-10,926

Disp

osals

--

(1,090)

(110)

(18)

-(1,218)

Writ

ten

off

- -

- -

(2)

- (2

)

At31Dec

embe

r2015

-586

5,809

67,064

2,239

-75,698

Not

es to

the

Fina

ncia

l Sta

tem

ents

(con

t’d)

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3.

Prop

erty

, pla

nt a

nd e

quip

men

t (co

nt’d

)

Furn

iture

,

Mac

hine

ry

fittin

gs

Fr

eeho

ld

M

otor

an

d an

d Un

der

land

Bu

ildin

gs

vehi

cles

eq

uipm

ent

equi

pmen

t co

nstru

ctio

n to

tal

RM’0

00

RM’0

00

RM’0

00

RM’0

00

RM’0

00

RM’0

00

RM’0

00

G

roup

C

arry

ing

amou

nts

At1Jan

uary2014

8,628

2,698

4,116

52,334

2,331

570,112

At31Dec

embe

r2014/

1Jan

uary2015

8,736

2,635

3,775

62,247

2,070

379,466

At31Dec

embe

r2015

8,736

2,572

3,115

85,794

1,947

3102,167

Not

es to

the

Fina

ncia

l Sta

tem

ents

(con

t’d)

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3. Property, plant and equipment (cont’d)

3.1 Security

At31December2015,freeholdlandandotherbuildingsoftheGroupwithanaggregatecarryingamountofRM8,736,000andRM2,572,000(2014:RM8,736,000andRM2,635,000) respectivelyhavebeen pledged as security for the bank facilities granted to the Group (see Note 12).

3.2 Assets under finance lease

Included in property, plant and equipment of the Group are machinery and equipment and motorvehiclesacquiredunderfinanceleasearrangementswithanaggregatecarryingamountofRM53,732,000 (2014: RM54,039,000) (see Note 12).

4. Investment property

Group 2015 2014 RM’000 RM’000 At1January 2,162 583 Additions 768 1,579

At31December 2,930 2,162 At cost Building under construction 2,930 2,162

5. Investments in subsidiaries

Company 2015 2014 RM’000 RM’000 unquotedshares,atcost 98,760 -


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5. Investments in subsidiaries (cont’d)

Detailsofthesubsidiariesareasfollows:

effective ownership interest Country of Name of subsidiary incorporation Principal activities 2015 2014 % % Ikhmas Jaya Sdn. Bhd. and Malaysia Piling and foundation 100 - its subsidiaries: works, construction of bridges and buildings, and other civil works IJ Geotechnic Sdn. Bhd. Malaysia Geotechnical works and 100 - provision of cutter soil mixing technology

Ikhmas Equipment Sdn. Bhd. Malaysia Rental of plant, 100 - machinery and equipment Rekavista Sdn. Bhd. and Malaysia General civil and 100 - its subsidiary: building construction

Rekavista (Sarawak) Malaysia General civil and 100 - Sdn. Bhd. building construction MM2 Building System Malaysia Manufacturing of 60 - Sdn. Bhd. and its prefabricated building system subsidiary: MM2 Builders Sdn. Bhd. Malaysia Installation of 60 - prefabricated building system


(cont’d)

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6. Other investments Group 2015 2014 RM’000 RM’000

Financialassetsatfairvaluethroughprofitorloss: - Quoted investments held for trading 4 4 At costs, - Club memberships 222 222

226 226 Market value of quoted investments 6 6

7. deferred tax assets and liabilities

Recognised deferred tax assets and liabilities

Deferredtaxassetsandliabilitiesareattributabletothefollowing:

Assets Liabilities Net 2015 2014 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group Property, plant

andequipment 89 - (8,330) (6,337) (8,241) (6,337) Provisions - 523 - - - 523 Other items 272 272 - - 272 272 Set off of tax (253) (776) 253 776 - -

Tax assets/ (liabilities) 108 19 (8,077) (5,561) (7,969) (5,542)


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7. deferred tax assets and liabilities (cont’d)

Movement in temporary differences during the financial year

Recognised Recognised in profit in profit At or loss At or loss At 1.1.2014 (Note 16) 31.12.2014 (Note 16) 31.12.2015 RM’000 RM’000 RM’000 RM’000 RM’000

Group Property, plant and equipment (5,528) (809) (6,337) (1,904) (8,241) Provisions 37 486 523 (523) - Other items 26 246 272 - 272

(5,465) (77) (5,542) (2,427) (7,969)

Unrecognised deferred tax assets

Deferredtaxassetshavenotbeenrecognisedinrespectofthefollowingitems(statedatgross):

Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Taxlosscarry-forwards 3,270 28 579 - Other deductible temporary differences 201 - - -

3,471 28 579 -

Thetaxlosscarry-forwardsdonotexpireundercurrenttaxlegislation.Deferredtaxassetshavenotbeen

recognisedinrespectoftheseitemsbecauseitisnotprobablethatfuturetaxableprofitwillbeavailableagainstwhichtheGroupandtheCompanycanutilisethebenefitstherefrom.


(cont’d)

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8. trade and other receivables

Group Company 2015 2014 2015 2014 Note RM’000 RM’000 RM’000 RM’000

Current trade Tradereceivables 8.1 135,424 126,527 - -

Amount due from contractcustomers 8.2 82,877 45,859 - -

218,301 172,386 - -

Non-trade Amount due from

subsidiaries 8.3 - - 57,991 - Otherreceivables 2,277 1,003 80 4

2,277 1,003 58,071 4 Deposits 2,085 1,843 - - Prepayments 1,124 2,958 1 -

5,486 5,804 58,072 4

223,787 178,190 58,072 4

8.1 trade receivables

Included in trade receivables at 31 December 2015 are retention sums relating to constructionwork-in-progress. Retention sums are unsecured, interest free and are expected to be collected as follows:

Group 2015 2014 RM’000 RM’000

Within1year 28,331 22,509 1-2years 4,944 7,284 2-3years 12,187 11,968 3 - 4 years 133 35 More than 4 years - -

45,595 41,796


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8. trade and other receivables (cont’d)

8.2 Construction work-in-progress

Group Note 2015 2014 RM’000 RM’000

Aggregate costs incurred to date 1,056,237 947,970 Add:Attributableprofits 126,204 98,060 Less: Foreseeable losses (320) (115)

1,182,121 1,045,915 Less:Progressbillings (1,103,781) (1,007,741)

78,340 38,174 Represented by: Amountduefromcontractcustomers 82,877 45,859 Amountduetocontractcustomers 13 (4,537) (7,685)

78,340 38,174

8.3 Amount due from subsidiaries

Amount due from subsidiaries is unsecured, interest free and repayable on demand.

9. Inventories

Group 2015 2014 RM’000 RM’000 Work-in-progress 5 12 Constructionmaterialsonsite 182 61 Raw materials and consumables 90 57 Finished goods 172 115

449 245


(cont’d)

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10. Cash and cash equivalents

Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Cashandbankbalances 6,056 576 4,781 2 Fixeddepositsplacedwithlicensedbanks 29,649 26,484 5,000 -

35,705 27,060 9,781 2

Included in deposits placed with licensed banks of the Group are deposits of RM23,387,000 (2014:RM23,706,000)whichhavebeenpledgedtofinancialinstitutionsassecurityforbankguaranteeandcreditfacilities granted to the Group as disclosed in Note 12.

11. Capital and reserves

11.1 Share capital

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

Authorised: Ordinary shares of RM1.00 each At31December2014/1January2014 400 400

Ordinary shares of RM0.25 each Share split to RM0.25 each 400 1,600 Createdduringtheyear 249,600 998,400

At31December2015 250,000 1,000,000


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11. Capital and reserves (cont’d)

11.1 Share capital (cont’d)

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

Issued and fully paid up: Ordinary shares of RM1.00 each At1January2014 * ** Issuedforcash *** ****

At31December2014 ***** ******

Ordinary shares of RM0.25 each SharesplittoRM0.25each ***** ******* Issuedforacquisitionofsubsidiaries 98,500 394,000 Public issue 31,500 126,000

At31December2015 130,000 520,000

* DenotesRM2** Denotes2ordinaryshares*** DenotesRM98**** Denotes98ordinaryshares***** DenotesRM100****** Denotes100ordinaryshares******* Denotes400ordinaryshares

Ordinary shares

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.

11.2 Share premium

Share premium comprises the premium paid on subscriptions of shares in the Company over and above the par value of the shares.

11.3 Merger reserve/(deficit)

Themerger reserve/(deficit) comprises the difference between the cost of acquisition and thenominal value of shares acquired during the acquisition of Ikhmas Jaya Sdn. Bhd. as stated in Note 26 (c).


(cont’d)

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12. Loans and borrowings

Group Note 2015 2014 RM’000 RM’000

Non-current Finance lease liabilities 12.1 9,577 13,611 Secured term loans 5,777 6,269

15,354 19,880 Current Secured bank overdrafts 12,017 13,200 unsecuredbankers’acceptances/trustreceipts 14,029 10,784 Financeleaseliabilities 12.1 10,168 12,999 Factoring facility 24,062 19,444 Securedtermloans 840 890

61,116 57,317

76,470 77,197

Security

ThetermloansaresecuredovertheGroup’slandandbuildings(seenote3.1).

Thebankoverdraftfacilitiesarerepayableondemandandbearinterestrangingfrom6.85%-8.60%(2014:6.85%-8.60%)perannum.Thesefacilitiesaresecuredandsupportedbyfreeholdlandas(seenote3.1)and deposits placed with licensed banks (see Note 10).


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12. Loans and borrowings (cont’d)

12.1 Finance lease liabilities

Finance lease liabilities are payable as follows:

Present Present Future value of Future value of minimum minimum minimum minimum lease lease lease lease payments Interest payments payments Interest payments 2015 2015 2015 2014 2014 2014 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group Less than oneyear 11,097 (929) 10,168 14,314 (1,315) 12,999 Between one and fiveyears 10,180 (603) 9,577 14,771 (1,160) 13,611

21,277 (1,532) 19,745 29,085 (2,475) 26,610

13. trade and other payables


Current trade Tradepayables 13.1 62,948 77,993 - -

Amount due to contract customers 8.2 4,537 7,685 - -

67,485 85,678 - -

Non-trade Amount due to director 550 17 11 11

Otherpayables 13.2 15,184 11,616 32 3 Accruals 8,056 5,169 458 5

23,790 16,802 501 19

91,275 102,480 501 19


(cont’d)

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13. trade and other payables (cont’d)

13.1 Included in trade payables at 31 December 2015 are retention sums payable amounting toRM8,395,000(2014:RM5,767,000).

13.2 Included in other payables at 31 December 2015 is amount due to a substantial shareholderamountingtoRM2,587,000(2014:RM4,000).

14. Finance income

Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

Interestincomeoffinancial assets that are not at fair valuethroughprofitorloss: - interest received from licensedbanks 909 686 255 -

15. Finance costs

Group 2015 2014 RM’000 RM’000

Interestexpenseoffinancialliabilitiesthatare notatfairvaluethroughprofitorloss: -financeleaseliabilities 1,704 1,894 - secured term loans 464 729 -securedbankoverdrafts 785 1,025 -unsecuredbankers’acceptances/trustreceipts 1,028 342 -factoringfacility 1,343 1,048 -others 387 239

5,711 5,277


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16. tax expense

Recognised in profit or loss


Current tax expense - Current year 6,595 7,515 - -

- Prior years (560) (166) - -

Total current tax recognised inprofitorloss 6,035 7,349 - - deferred tax expense

Origination and reversal of temporarydifferences 2,844 689 - - Over provision in prior years (417) (612) - -

Total deferred tax recognised inprofitorloss 2,427 77 - -

Totalincometaxexpense 8,462 7,426 - - Reconciliation of tax expense

Profit/(Loss)beforetax 32,765 28,835 (608) (7) Income tax calculated using Malaysiantaxrateof25% 8,191 7,209 (152) (2) Non-deductible expenses 719 993 7 2 Recognition of previously unrecognised tax losses - (2) - - Effect of changes in tax rate (297) - 6 - Current year losses for which nodeferredtaxassetwasrecognised 826 4 139 -

9,439 8,204 - - Overprovisioninprioryears (977) (778) - -

8,462 7,426 - -


(cont’d)

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17. Profit/(Loss) for the year


Profit/(Loss) for the year is arrived at after charging:

Auditors’remuneration -Statutoryauditfees 186 215 22 3

-Non-audit fees 71 - 71 - Bad debts written off - 12 - - Depreciationofproperty, plantandequipment 3 10,926 8,863 - - Directors’remuneration -fees 19 184 6 184 - - other emoluments 19 2,546 1,770 519 - Property, plant and equipment written off 1 - - - Personnel expenses (including key management personnel): -ContributionstoEmployees’

Provident Fund 617 553 - - - Wages, salaries and others 6,622 6,059 - - Realised loss on foreign exchange 25 5 - - and after crediting:

Gain on disposal of property, plant and equipment 30 79 - - Rental income from premises 174 210 - -


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18. earnings per ordinary share

The calculation of basic earnings per ordinary share at 31 December 2015 was based on the profitattributable to ordinary shareholders and a weighted average number of ordinary shares outstanding, calculated as follows:

2015 2014 RM’000 RM’000

Group Profitattributabletoordinaryshareholders 25,157 21,546

2015 2014 ’000 ’000

Weighted average number of ordinary shares at31December 446,500 394,000

2015 2014 sen sen Basic earnings per ordinary share 5.63 5.47

Inthecalculationofearningspershareforfinancialyearended31December2014, it isassumedthat394,000,000 ordinary shares, being the number of shares in issue just before the public issue as stated in Note 26 (e), were issued since the inception of the Group.

DilutedearningsperordinaryshareisnotpresentedastheGrouphasnosharesorotherinstrumentswithpotentialdilutiveeffectsasat31December2015.

19. Key management personnel compensation

The key management personnel compensation is as follows:


Directors: -Fees 184 6 184 - - Remuneration 2,546 1,770 519 -

Total short-term employee benefits 2,730 1,776 703 -


(cont’d)

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20. dividends

DividendsrecognisedbytheGroup:

Sen per total amount date of share RM’000 payment

2015 Paid by a subsidiary to the previous owners First interim 2015 (single tier) 37.34 11,200 2 June 2015 Second interim 2015 (single tier) 33.77 10,131 3 June 2015

21,331

TheDirectorshaveproposed the followingdividendwhich is subject to shareholders’approvalat theforthcoming Annual General Meeting.

Sen per total amount share RM’000 Firstandfinalsingletiercashdividendforthe financialyearended31December2015 1.0 5,200

21. Segment reporting

The Group is predominantly involved in civil and building construction, which is the only reportable segment. Other non-reportable segments comprise manufacturing and sales of prefabricated building system. None of these segments met the quantitative thresholds for reporting segments in 2015 and 2014. AlltheGroup’soperationsarecarriedoutinMalaysia.

22. Financial instruments

22.1 Categories of financial instruments

Thetablebelowprovidesananalysisoffinancialinstrumentscategorisedasfollows:

(a) Loans and receivables (“L&R”);(b) Available-for-salefinancialassets(“AFS”);(c) Fairvaluethroughprofitorloss(“FVTPL”);and(d) Financial liabilities measured at amortised cost (“FL”).


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22. Financial instruments (cont’d)

22.1 Categories of financial instruments (cont’d)

Note Carrying L&R/ amount (FL) AFS FVtPL

RM’000 RM’000 RM’000 RM’000

Group 2015 Financial assets Other investments 6 226 - 222 4

Trade and other receivables 222,663 222,663 - - Cash and cash equivalents 10 35,705 35,705 - -

258,594 258,368 222 4

Financial liabilities Loans and borrowings 12 (76,470) (76,470) - -

Trade and other payables 13 (91,275) (91,275) - -

(167,745) (167,745) - -

2014 Financial assets Other investments 6 226 - 222 4

Trade and other receivables 175,232 175,232 - - Cash and cash equivalents 10 27,060 27,060 - -

202,518 202,292 222 4

Financial liabilities Loans and borrowings 12 (77,197) (77,197) - -

Tradeandotherpayables 13 (102,480) (102,480) - -

(179,677) (179,677) - -


(cont’d)

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22.1 Categories of financial instruments (cont’d)

Note Carrying L&R/ amount (FL) RM’000 RM’000

Company 2015 Financial assets Tradeandotherreceivables 58,071 58,071 Cashandcashequivalents 10 9,781 9,781

67,852 67,852

Financial liabilities Trade and other payables 13 (501) (501)

2014 Financial assets Trade and other receivables 4 4 Cash and cash equivalents 10 2 2

6 6

Financial liabilities Trade and other payables 13 (19) (19)

22.2 Net gains and losses arising from financial instruments


Loans and receivables 909 674 255 - Financial liabilities measuredatamortisedcost (5,736) (5,282) - -

(4,827) (4,608) 255 -


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22.3 Financial risk management

TheGrouphasexposuretothefollowingrisksfromitsuseoffinancialinstruments:

• Creditrisk• Liquidityrisk• Marketrisk

22.4 Credit risk

Credit risk is the riskofa financial loss to theGroup ifacustomerorcounterparty toa financialinstrumentfailstomeetitscontractualobligations.TheGroup’sexposuretocreditriskarisesprincipallyfromitsreceivablesfromcustomers.TheCompany’sexposuretocreditriskarisesprincipallyfromitsreceivables from customers and advances to subsidiaries.

Receivables

Risk management objectives, policies and processes for managing the risk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Normally credit evaluations are performed on customers requiring credit over a certain amount.

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is representedbythecarryingamountsinthestatementoffinancialposition.

Management has taken reasonable steps to ensure that receivables that are neither past due nor impairedarestatedattheirrealisablevalues.Asignificantportionofthesereceivablesareregularcustomers that have been transacting with the Group. The Group uses ageing analysis to monitor thecreditqualityof thereceivables.Anyreceivableshavingsignificantbalancespastduemorethan 60 days, which are deemed to have higher credit risk, are monitored individually.


(cont’d)

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roup Berhad


22.4 Credit risk (cont’d)

Receivables (cont’d)

Impairment losses

The ageing of trade receivables as at the end of the reporting period was:

Individual Gross impairment Net RM’000 RM’000 RM’000

Group 2015 notpastdue 75,968 - 75,968 Pastdue1-30days 4,862 - 4,862 Pastdue31-120days 16,880 - 16,880 Past due more than 120 days 37,714 - 37,714

135,424 - 135,424

2014 Not past due 71,945 - 71,945 Past due 1 - 30 days 20,062 - 20,062 Pastdue31-120days 11,870 - 11,870 Past due more than 120 days 22,650 - 22,650

126,527 - 126,527

As at the end of the reporting period, there was no indication that the receivables are not

recoverable.TheDirectorsarereasonablyconfidentthatalldebtscanberecoveredwithinthenext12 months.

Investments


Investments are allowed only in liquid securities and only with counterparties that have a credit rating equal to or better than the Group.


As at the end of the reporting period, the Group and the Company have only invested in domestic securities. The maximum exposure to credit risk is represented by the carrying amounts in the statementoffinancialposition.

The investments are unsecured.


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22.4 Credit risk (cont’d)

Inter company advances


The Company provides unsecured advances to subsidiaries. The Company monitors the results of the subsidiaries regularly.


As at the end of the reporting period, the maximum exposure to credit risk is represented by their carryingamountsinthestatementoffinancialposition.

Impairment losses

As at the end of the reporting period, there was no indication that the advances to the subsidiaries arenotrecoverable.TheCompanydoesnotspecificallymonitortheageingoftheadvancestosubsidiaries.

Financial guarantees


TheCompanyprovides unsecured financial guarantees tobanks in respect of banking facilitiesgranted to a subsidiary. The Company monitors on an ongoing basis the results of the subsidiary and repayments made by the subsidiary.


The maximum exposure to credit risk amounts to RM44,956,000 (2014: RM40,955,000) representing the outstanding banking facilities of the subsidiaries as at the end of the reporting period.

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

Thefinancialguaranteeshavenotbeenrecognisedsincethefairvalueoninitialrecognitionwasnot material.

22.5 Liquidity risk

LiquidityriskistheriskthattheGroupwillnotbeabletomeetitsfinancialobligationsastheyfalldue.TheGroup’sexposuretoliquidityriskarisesprincipallyfromitsvariouspayables,loansandborrowings.

The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by themanagementtoensure,asfaraspossible,thatitwillhavesufficientliquiditytomeetitsliabilitieswhen they fall due.


(cont’d)

106

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roup Berhad

22.

Fina

ncia

l ins

trum

ents

(con

t’d)

22.5

Liq

uidi

ty ri

sk (c

ont’d

)

M

atur

ity a

naly

sis

Thetablebe

lowsum

marise

sthematurityprofileofthe

Group

’sand

the

Com

pany’sfina

ncialliabilitiesasattheen

doftherepo

rting

periodbased

on

und

iscou

nted

con

tract

ual p

aym

ents

:

M

ore

C

arry

ing

Con

tract

ual

Con

tract

ual

Unde

r 1

1 - 2

2

- 5

than

am

ount

in

tere

st ra

te

cash

flow

s ye

ar

year

s ye

ars

5 ye

ars

RM

’000

%

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

Gro

up20

15

N

on-d

eriv

ativ

e fin

anci

al lia

bilit

ies

Secu

redte

rmloan

s

6,617

4.75-8.60

8,168

1,238

1,238

1,998

3,694

Secu

redban

koverdrafts

12,017

6.85-8.60

12,017

12,017

--

-un

secu

redban

kers’

acc

eptanc

es/trustre

ceipts

14,029

4.08-8.35

14,029

14,029

--

-Fina

nceleaseliabilities

19,745

2.10-4.35

21,277

11,097

6,242

3,938

-Factoringfacility

24,062

8.10-8.35

24,062

24,062

--

-Tr

ade

and

oth

er p

ayab

les

91

,275

-

91,2

75

91,2

75

- -

-Ba

nk g

uara

ntee

s

- -

44,9

56

44,9

56

- -

-

167,745

215,784

198,674

7,480

5,936

3,694

2014

Non

-der

ivat

ive

finan

cial

liabi

litie

s

Secu

redte

rmloan

s

7,159

4.75-8.60

8,999

1,083

1,083

3,303

3,530

Secu

redban

koverdrafts

13,200

6.85-8.60

13,200

13,200

--

-un

secu

redban

kers’

acc

eptanc

es/trustre

ceipts

10,784

3.94-8.35

10,784

10,784

--

-Fina

nceleaseliabilities

26,610

2.10-4.35

29,085

14,314

7,650

7,121

-Factoringfacility

19,444

8.35

19,444

19,444

--

-Trad

ean

dotherpay

ables

102,480

-102,480

102,480

--

-Ba

nk g

uara

ntee

s

- -

40,9

55

40,9

55

- -

-

179,677

224,947

202,260

8,733

10,424

3,530

Not

es to

the

Fina

ncia

l Sta

tem

ents

(con

t’d)

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22.5 Liquidity risk (cont’d)

Maturity analysis (cont’d)

Carrying Contractual Under amount cash flows 1 year RM’000 RM’000 RM’000

Company 2015 Non-derivative financial liabilities Trade and other payables 501 501 501

2014 Non-derivative financial liabilities Trade and other payables 19 19 19

22.6 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates andotherpricesthatwillaffecttheGroup’sfinancialpositionorcashflows.

22.6.1 Interest rate risk

TheGroup’sfixedrateborrowingsareexposedtoariskofchangeintheirfairvalueduetochangesininterestrates.TheGroup’svariablerateborrowingsareexposedtoariskofchangeincashflowsduetochangesininterestrates.Investmentsinequitysecuritiesandshorttermreceivablesandpayablesarenotsignificantlyexposedtointerestraterisk.


TheGroupmanagesitsinterestrateexposurebymaintainingamixoffixedandfloatingrateborrowings.

Exposure to interest rate risk

TheinterestrateprofileoftheGroup’sandtheCompany’ssignificantinterest-bearingfinancialinstruments, based on carrying amounts as at the end of the reporting period were:


Fixed rate instruments Financialassets 29,649 26,484 5,000 -

Financial liabilities (19,745) (26,610) - -

Floating rate instruments Financialliabilities (56,725) (50,587) - -


(cont’d)

108

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roup Berhad


22.6 Market risk (cont’d)

22.6.1 Interest rate risk (cont’d)

Interest rate risk sensitivity analysis

Fair value sensitivity analysis for fixed rate instruments

TheGroupdoes not account for any fixed rate financial assets and liabilities at fair valuethroughprofitorloss,andtheGroupdoesnotdesignatederivativesashedginginstrumentsunder a fair value hedge accounting model. Therefore, a change in interest rate at the end ofthereportingperiodwouldnotaffectprofitorloss.

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points (“bp”) in interest rates at the end of the reporting period would haveincreased/(decreased)post-taxprofitorlossbytheamountsshownbelow.Thisanalysisassumes that all other variables remained constant.

Profit or (loss) 100 bp 100 bp increase decrease RM’000 RM’000

Group 2015 Floating rate instruments (425) 425

2014 Floating rate instruments (379) 379

22.7 Fair value information

The carrying amounts of cash and cash equivalents, short term receivables and payables and short term borrowings reasonably approximate their fair values due to the relatively short term nature of thesefinancialinstruments.


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Not

es to

the

Fina

ncia

l Sta

tem

ents

(con

t’d)

22.

Fina

ncia

l ins

trum

ents

(con

t’d)

22.7

Fai

r val

ue in

form

atio

n (c

ont’d

)

Thetablebe

lowana

lysesfina

ncialin

strumen

tscarriedatfairvalue

and

thoseno

tcarriedatfairvalue

forw

hich

fairva

lueisdisc

losed,tog

ethe

rwithth

eirfair

valuesand

carryingam

ountssho

wninth

estatem

ento

ffina

ncialposition

.

tota

l fai

r C

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ing

G

roup

Le

vel 1

Le

vel 2

Le

vel 3

to

tal

Leve

l 1

Leve

l 2

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l 3

tota

l va

lue

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nt

2015

RM

’000

RM

’000

RM

’000

RM

’000

RM

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RM

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RM

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RM

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RM

’000

RM

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ps

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1 -

371

371

222

6 -

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371

377

226

Fi

nanc

ial l

iabi

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s

Se

cure

d te

rm lo

ans

- -

- -

- -

(6,4

66)

(6,4

66)

(6,4

66)

(6,6

17)

Fi

nanc

e le

ase

liabilities

--

--

--

(19,681)

(19,681)

(19,681)

(19,745)

- -

- -

- -

(26,

147)

(2

6,14

7)

(26,

147)

(2

6,36

2)

20

14

Fina

ncia

l ass

ets

Quo

ted

shar

es

6 -

- 6

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- -

6 4

C

lub

mem

bers

hips

-

- -

- -

395

- 39

5 39

5 22

2

6 -

- 6

- 39

5 -

395

401

226

Fi

nanc

ial l

iabi

litie

s

Se

cure

d te

rm lo

ans

- -

- -

- -

(7,0

51)

(7,0

51)

(7,0

51)

(7,1

59)

Fi

nanc

e le

ase

l

iabi

litie

s -

- -

- -

- (2

6,99

9)

(26,

999)

(2

6,99

9)

(26,

610)

- -

- -

- -

(34,

050)

(3

4,05

0)

(34,

050)

(3

3,76

9)

Fair

valu

e of

fina

ncia

l ins

trum

ents

no

t car

ried

at fa

ir va

lue

Fair

valu

e of

fina

ncia

l ins

trum

ents

ca

rried

at f

air v

alue

110

Annual Report 2015

Ikhmas Jaya G

roup Berhad


22.7 Fair value information (cont’d)

Level 1 fair value

Level1fairvalueisderivedfromquotedprice(unadjusted)inactivemarketsforidenticalfinancialassets or liabilities that the entity can access at the measurement date.

Level 2 fair value

Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observableforthefinancialassetsorfinancialliabilities,eitherdirectlyorindirectly.

Non-derivative financial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of futureprincipalandinterestcashflows,discountedatthemarketrateofinterestattheendofthereporting period.

Transfers between Level 1 and Level 2 fair values TherehasbeennotransferbetweenLevel1and2fairvaluesduringthefinancialyear(2014:no

transfer in either directions).

Level 3 fair value

Level3fairvalueisestimatedusingunobservableinputsforthefinancialassetsandliabilities.

The following table shows the valuation techniques used in the determination of fair values within Level 3, as well as the key unobservable inputs used in the valuation models.

Financial instruments not carried at fair value type description of valuation technique and inputs used Financelease Discountedcashflowsusingaratebasedonthecurrentmarketrateof

liabilities and borrowings of the respective Group entities at the reporting date. secured term loans

Valuation processes applied by the Group for Level 3 fair value

TheGroupusesdiscountedcash flows in respectof themeasurementof fair valuesof financialinstruments. The management has overall responsibility for overseeing all significant fair valuemeasurements, including Level 3 fair values.


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23. Contingencies

Group 2015 2014 RM’000 RM’000

Bank guarantees issued to customers for performance of projects 44,101 40,542 Bankguaranteesissuedfortenderofprojects 855 413

44,956 40,955

24. Related parties

Identity of related parties

Forthepurposesofthesefinancialstatements,partiesareconsideredtoberelatedtotheGrouportheCompany if the Group or the Company has the ability, directly or indirectly, to control or jointly control the partyorexercisesignificantinfluenceoverthepartyinmakingfinancialandoperatingdecisions,orviceversa, or where the Group or the Company and the party are subject to common control. Related parties may be individuals or other entities.

Relatedpartiesalsoincludekeymanagementpersonneldefinedasthosepersonshavingauthorityandresponsibility for planning, directing and controlling the activities of the Group either directly or indirectly. Thekeymanagementpersonnel includeall theDirectorsoftheGroup,andcertainmembersofseniormanagement of the Group.

The Group has related party relationship with its substantial shareholder and subsidiaries.

Significant related party transactions

Related party transactions have been entered into in the normal course of business under negotiated terms.ThesignificantrelatedpartytransactionsoftheGroupandtheCompanyareshownbelow.Thebalance related to the below transactions is shown in Note 13.

Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Advances received from asubstantialshareholder (2,873) - - -


(cont’d)

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25. Capital management

TheGroup’sobjectivewhenmanagingcapital istomaintainastrongcapitalbaseandsafeguardtheGroup’sabilitytocontinueasagoingconcern,soastomaintaininvestorandcreditorconfidenceandtosustainfuturedevelopmentofthebusiness.TheDirectorsmonitorandaredeterminedtomaintainanoptimal debt-to-equity ratio that complies with debt covenants and regulatory requirement.

Thedebt-to-equityratiosat31December2015and31December2014wereasfollows:

Note 2015 2014 RM’000 RM’000 Total loans and borrowings 12 76,470 77,197 Less: Cash and cash equivalents 10 (35,705) (27,060)

Net debt 40,765 50,137

Totalequity 188,695 96,145

Net debt-to-equity ratio 0.22 0.52

TherewasnochangeintheGroup’sapproachtocapitalmanagementduringthefinancialyear.

26. Significant events during the financial year

Inconjunctionwith,andasanintegralpartoftheCompany’slistingontheMainMarketofBursaMalaysiaSecurities Berhad, the following listing scheme was undertaken by the Company:

a) dividend Payment

Prior to the completion of the Acquisitions as disclosed in note 26 (c) below, the Company’ssubsidiary, Ikhmas Jaya Sdn. Bhd., had, on 2 June 2015 and 3 June 2015, paid interim dividends in respectof thefinancialyearended31December2015totallingRM11,200,000andRM10,131,000respectively to its then existing shareholders.

b) Subdivision

On 7 May 2015, the Company subdivided its authorised share capital from RM400,000 comprising 400,000 ordinary shares of RM1 each to RM400,000 comprising 1,600,000 ordinary shares of RM0.25 each.

On 7 May 2015, the Company subdivided its paid up capital from RM100 comprising 100 ordinary shares of RM1 each to RM100 comprising 400 ordinary shares of RM0.25 each.

On8May2015,theauthorisedsharecapitaloftheCompanywasincreasedfromRM400,000dividedinto 1,600,000 ordinary shares of RM0.25 each to RM250,000,000 divided into 1,000,000,000 ordinary sharesofRM0.25eachbythecreationofanadditional998,400,000ordinarysharesofRM0.25eachranking pari passu with the existing shares in the Company.


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26. Significant events during the financial year (cont’d)

c) Acquisitions

(i) On 3 June 2015, the Company acquired the entire issued and paid-up share capital in Ikhmas Jaya Sdn. Bhd. comprising 30,000,000 ordinary shares of RM1.00 each for a total purchase considerationofRM98,499,900satisfiedbytheissuanceof393,999,600newordinarysharesofRM0.25 each in the Company at an issue price of RM0.25 each.

(ii) On3June2015,theCompanyacquiredIkhmasJayaSdn.Bhd.’s60%interestintheissuedandpaid-up share capital of MM2 Building System Sdn. Bhd. comprising 240,600 ordinary shares of RM1.00 each for a total purchase consideration of RM260,000.

These acquisitions were completed on 3 June 2015.

d) Vendors’ Shareholdings Reorganisation

TheVendors(beingDato’AngChengSiong,AuraPerdana(Malaysia)Sdn.Bhd.,Dato’Ir.Dr.KhooPingSen,SiewMunLout,YapYoonFatt,YapBengTeckandWooCheeMeng)undertookareorganisationexercise involving the transfer of 394,000,000 ordinary shares of RM0.25 each in the Company which they received from the acquisition of Ikhmas Jaya Sdn. Bhd. (refer to Note 26 (c)(i) above) to Ikhmas JayaHoldingsSdn.Bhd.,aninvestmentholdingcompanysubstantiallyownedbytheVendors.

e) Initial Public Offering

Public Issue

The Company undertook a public issue of 126,000,000 new ordinary shares of RM0.25 each, representingapproximately24.2%oftheCompany’senlargedissuedandpaid-upsharecapital,atan issue price of RM0.57 per share in the following manner:

(i) 26,000,000 new ordinary shares reserved for application by the public, of which at least 50% were set aside for Bumiputera Investors including individuals, companies, societies, co-operatives and institutions;

(ii) 26,000,000newordinarysharesreservedforapplicationbyeligibleDirectors,employeesandbusiness associates (which include the suppliers, sales agents, customers and others) of the Group; and

(iii) 74,000,000 new ordinary shares reserved for placement to selected investors.


(cont’d)

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roup Berhad

26. Significant events during the financial year (cont’d)

e) Initial Public Offering (cont’d)

Offer for sale

Offer for sale of 56,000,000 existing ordinary shares of RM0.25 each, representing approximately 10.8%oftheCompany’senlargedissuedandpaid-upsharecapital,byIkhmasJayaHoldingsSdn.Bhd. at an offer price of RM0.57 per share in the following manner:

(i) Up to 52,000,000 existing shares reserved for placement to Bumiputera investors approved by the Ministry of International Trade and Industry; and

(ii) Up to 4,000,000 existing shares reserved for placement to selected investors.

f) Listing and Quotation on Bursa Securities Malaysia Berhad

ThelistingofandquotationfortheCompany’sentireenlargedissuedandpaid-upsharecapitalofRM130,000,000 comprising 520,000,000 ordinary shares of RM0.25 each on the Main Market of Bursa Malaysia Securities Berhad was completed on 27 July 2015.

27. Comparative figures

Asdisclosedinnote1(b),thecomparativesoftheGroupcomprisesolelythefinancialpositionandresultsof Ikhmas Jaya Sdn. Bhd. and its subsidiaries and the Company for the year from 1 January 2014 to 31 December2014.


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28. Supplementary financial information on the breakdown of realised and unrealised profits or losses

ThebreakdownoftheretainedearningsoftheGroupandoftheCompanyat31December,intorealisedandunrealisedprofitsorlosses,pursuanttoParagraphs2.06and2.23ofBursaMalaysiaSecuritiesBerhadMain Market Listing Requirements, are as follows:

Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Total retained earnings/ (accumulated losses) of the Company and its subsidiaries -realised 99,381 71,146 (621) (13) - unrealised (7,969) (5,542) - -

91,412 65,604 (621) (13) Less: Consolidated adjustments (309) 342 - -

Total retained earnings/ (accumulated losses) 91,103 65,946 (621) (13)

Thedeterminationofrealisedandunrealisedprofits isbasedontheGuidanceonSpecialMatterno.1,

Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December2010.


(cont’d)

116

Annual Report 2015

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roup Berhad

AdditionalCompliance Information

The following disclosures are made in accordance with Part A of Appendix 9C of the Main Market Listing Requirement of Bursa Securities.

Utilisation of Proceeds From Public Issue

Ikhmas Jaya Group Berhad was listed on the Main Market of Bursa Malaysia Securities Berhad on 27 July 2015 (Listing). In conjunction with the Listing, the Company undertook a public issue of 126,000,000 new ordinary sharesofRM0.25eachatanissuepriceofRM0.57pershare(PublicIssue),raisinggrossproceedsofRM71.82million. The status or the utilisation of the gross proceeds from the Public Issue as at 31 March 2016 is as follows:-

Purpose timeframe for Utilisation upon

Listing

total Amount (RM’000)

Utilised Amount (RM’000)

Unutilised Balance (RM’000)

Purchase of construction equipment

Within 24 months 31,820 29,228 2,592

Purchase of machinery and equipment for manufacturing of prefabricated building system

Within 24 months 5,000 - 5,000

Repayment of bank borrowings

Within 6 months 12,000 12,000 -

Working capital Within 6 months 18,000 18,000 -

Estimated listing expenses

Immediate 5,000 5,000 -

Share Buybacks

TheCompanydidnothaveasharebuy-backprogrammeinplaceduringthefinancialyearended31December2015.

Options, Warrants and Convertible Securities

Therewerenooptions,warrantsorconvertiblesecuritiesissuedforthefinancialyearended31December2015.

Non-Audit Fee

Thenon-auditfeespaidtotheExternalAuditors,KPMGbytheGroupforthefinancialyearended31December2015 amounted to RM 71,000.00

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AdditionalCompliance Information

(cont’d)

American depository Receipt (“AdR”)/Global depository Receipt (“GdR”)

TherewerenoAmericanDepositoryReceipt(ADR)orGlobalDepositoryReceipt(GDR)programssponsoredbythe Company.

Imposition of Sanctions and/or Penalties

There were no Sanctions and/or Penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies.

Variation in Results

There was no material variance between the results for the financial year end and the unaudited resultspreviously announced.

Profit Guarantee

TheCompanydidnotgiveanyProfitGuaranteeduringthefinancialyearended31December2015.

Material Contracts

TherewerenomaterialcontractsenteredintobytheCompanyanditssubsidiariesinvolvingdirectors’andmajorshareholders’interesteithersubsistingattheendofthefinancialyearended31December2015orenteredintosincetheendofthepreviousfinancialyear.

Revaluation Policy on Landed Properties

The Company does not have any revaluation policy on its landed properties.

Recurrent Related Party transactions

There were no Recurrent Related Party Transactions of a revenue or trading nature between the Company and itsrelatedpartieswhichrequiresshareholdersmandateduringthefinancialperiodunderreview.

118

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roup Berhad

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Ann

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epor

t 201

5Ik

hmas

Jay

a G

roup

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List o

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perti

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ont’d)

120

Annual Report 2015

Ikhmas Jaya G

roup Berhad

Class of shares : Ordinary shares of RM0.25 eachVotingRights : OnevotepershareAuthorised Share Capital : RM250,000,000.00 comprising of 1,000,000,000 ordinary shares of RM0.25 eachIssued and Paid-up Capital : RM130,000,000.00 comprising of 520,000,000 ordinary shares of RM0.25 each

Size of Shareholdings No. ofShareholders

% of Shareholders No. of Shares % of Issued Share Capital

Less than 100 0 0.00 0 0.00100 – 1,000 150 6.41 107,600 0.021,001 – 10,000 7,710,100 1.4810,001 – 100,000 812 26,191,100 5.04100,001 to 25,999,999 (less than 5% of issued shares)

190 8.12 147,991,200 28.46

26,000,000 and above (5% and above of issued shares)

1 0.04 338,000,000 65.00

Total 520,000,000

SUBStANtIAL SHAReHOLdeRS’ SHAReHOLdINGS(According to the Register of Substantial Shareholders as at 1 April 2016)

No. of Shares % of issued share capital


1. Ikhmas Jaya Holdings Sdn. Bhd.

338,000,000 65.00 - -

2. Dato’AngChengSiong - - 338,000,000 65.003. DatinKunHawChoy - - 338,000,000 65.004. Aura Perdana Sdn. Bhd. - - 338,000,000 65.005. Dato’IrDrKhooPingSen - - 338,000,000 65.00

dIReCtORS’ SHAReHOLdINGS (AccordingtotheRegisterofDirectors’Shareholdingsasat1April2016)



1. Dato’AngChengSiong - - 338,000,000 65.002. Dato’IrDrKhooPingSen - - 338,000,000 65.003. AngWeiZhen 300,000 0.06 - -4. Dato’SyedAriffFadzillah

bin Syed Awalluddin800,000 0.15 - -

5. YuenChoongLai 0.26 - -6. DzulkifliDavidbinAbdullah 500,000 0.10 - -7. Tan Ming-Li 28,000 0.01 - -

Analysisof Shareholdingsas at 1 April 2016

No. Name of SubstantialShareholder

direct Indirect

No. Name of directordirect Indirect

(a)

(a)

(b)

(c)

(c)

(c)

50.7334.70

1,187

100.00 100.002,340

1,330,000

121

Ann

ual R

epor

t 201

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a G

roup

Ber

had

Analysisof Shareholdings

asat1April2016(cont’d)

dIReCtORS’ SHAReHOLdINGS (cont’d)(AccordingtotheRegisterofDirectors’Shareholdingsasat1April2016)(cont’d)

(a) Deemedinterestedbyvirtueofhisshareholdings in IkhmasJayaHoldingsSdn.Bhd.andAuraPerdanaSdn. Bhd. pursuant to Section 6A of the Companies Act, 1965 (the Act).

(b) DeemedinterestedbyvirtueofhershareholdingsinAuraPerdanaSdn.Bhd.pursuanttoSection6AoftheAct.

(c) Deemedinterestedbyvirtueofits/hisshareholdingsinIkhmasJayaHoldingsSdn.Bhd.pursuanttoSection6A of the Act.

In the subsidiaries

ByvirtueoftheirsubstantialinterestsinthesharesoftheCompany,Dato’AngChengSiongandDato’IrDrKhooPing Sen are also deemed interested in the shares of the subsidiaries to the extent the Company has an interest.

LISt OF 30 LARGeSt SHAReHOLdeRS AS At 1 APRIL 2016

No. Name of Shareholders No. of Shares % of issued share capital

1. IKHMASJAYAHOLDInGSSDn.BHD. 338,000,000 65.002. CITIGROuPnOMInEES(TEMPATAn)SDn.BHD.

EXEMPTAnFORAIABHD.16,905,000 3.25

3. MALAYSIAnOMInEES(TEMPATAn)SEnDIRIAnBERHADGREATEASTERnLIFEASSuRAnCE(MALAYSIA)BERHAD(LEEF)

7,029,800 1.35

4. MALAYSIAnOMInEES(TEMPATAn)SEnDIRIAnBERHADGREATEASTERnLIFEASSuRAnCE(MALAYSIA)BERHAD(LBF)

6,992,500 1.34

5. AMAnAHRAYATRuSTEESBERHADAMITTIKAL

4,865,600 0.94

6. CITIGROuPnOMInEES(TEMPATAn)SDn.BHD.EMPLOYEESPROVIDEnTFunDBOARD(KIB)

4,805,300 0.92

7. DB(MALAYSIA)nOMInEE(TEMPATAn)SEnDIRIAnBERHADDEuTSCHETRuSTEESMALAYSIABERHADFOREASTSPRInGInVESTMEnTSDAnAAL-ILHAM

4,157,200 0.80

8. CARTABAnnOMInEES(TEMPATAn)SDn.BHD.TMFTRuSTEESMALAYSIABERHADFORRHBPRIVATEFunD-SERIES 6

4,000,000 0.77

9. MAYBAnKnOMInEES(TEMPATAn)SDnBHDMAYBAnKTRuSTEESBERHADFORRHBCAPITALFunD

3,500,000 0.67

10 DB(MALAYSIA)nOMInEE(TEMPATAn)SEnDIRIAnBERHADDEuTSCHETRuSTEESMALAYSIABERHADFOREASTSPRInGInVESTMEnTSSMALL-CAPFunD

3,445,400 0.66

11. CITIGROuPnOMInEES(TEMPATAn)SDn.BHD.KuMPuLAnWAnGPERSARAAn(DIPERBADAnKAn)(KnGASMLCAPFD)

2,937,400 0.56

122

Annual Report 2015

Ikhmas Jaya G

roup Berhad

No. Name of Shareholders No. of Shares % of issued share capital

12. HSBCnOMInEES(TEMPATAn)SDn.BHD.HSBC(M)TRuSTEEBHDFORALLIAnZLIFEInSuRAnCEMALAYSIABERHAD(MEF)

2,725,800 0.52

13. CARTABAnnOMInEES(TEMPATAn)SDn.BHD.SSBTAFMFunDSAGSFORunIVERSITIMALAYA

2,509,700 0.48

14. AMSECnOMInEES(TEMPATAn)SDn.BHD.nOMuRAASSETMAnAGEMEnTMALAYSIASDn.BHD.FORTEnAGAnASIOnALBERHADRETIREMEnTBEnEFITTRuSTFunD

2,370,000 0.46

15. AMSECnOMInEES(TEMPATAn)SDn.BHD.EXEMPTAnFORAMBAnK(M)BERHAD(IKHMAS)*nOTFORTRADInG*

2,256,000 0.43

16. WOnGPuIYOOnG 2,006,700 0.3917. AMSECnOMInEES(TEMPATAn)SDn.BHD.

PLEDGEDSECuRITIESACCOunT-AMBAnK(M)BERHADFORGARYLEESEATOn(IKHMAS)

1,850,000 0.36

18. DB(MALAYSIA)nOMInEE(TEMPATAn)SEnDIRIAnBERHADDEuTSCHETRuSTEESMALAYSIABERHADFOREASTSPRInGInVESTMEnTSMYFOCuSFunD

1,768,400 0.34

19. CARTABAnnOMInEES(TEMPATAn)SDn.BHD.SSBTAFMFunDSAMGFORAMGEnERALInSuRAnCEBERHAD

1,767,300 0.34

20. CITIGROuPnOMInEES(TEMPATAn)SDn.BHD.EXEMPTAnFORAIAPuBLICTAKAFuLBHD.

1,751,900 0.34

21. CITIGROuPnOMInEES(TEMPATAn)SDn.BHD.KEnAnGAISLAMICInVESTORSBHDFORLEMBAGA TABUNG HAJI

1,741,600 0.33

22. MALAYSIAnOMInEES(TEMPATAn)SEnDIRIAnBERHADGREATEASTERnLIFEASSuRAnCE(MALAYSIA)BERHAD(SHF)

1,662,400 0.32

23. CIMBGROuPnOMInEES(TEMPATAn)SDnBHDEXEMPTAnFORPETROLIAMnASIOnALBERHAD(AMFunDS)

1,464,700 0.28

24. DB(MALAYSIA)nOMInEE(TEMPATAn)SEnDIRIAnBERHADDEuTSCHETRuSTEESMALAYSIABERHADFORAIAPAM-ISLAMICMODERATEFunD

1,437,100 0.28

25. unIVERSALTRuSTEE(MALAYSIA)BERHADKAFDAnAADIB

1,425,000 0.27

26. MALAYSIAnOMInEES(TEMPATAn)SEnDIRIAnBERHADGREATEASTERnLIFEASSuRAnCE(MALAYSIA)BERHAD(nuLF1)

1,400,100 0.27

27. CARTABAnnOMInEES(TEMPATAn)SDn.BHD.RHBTRuSTEESBERHADFORKAFVISIOnFunD

1,300,000 0.25

28. YAPYOOnFATT 1,283,000 0.2529. WAnMEOWKWAn 1,200,000 0.2330. nOMuRASECuRITIESMALAYSIASDn.BHD.

EXEMPTAnCLRFOREASTSPRInGInVESTMEnTSBERHAD1,090,700 0.21

Analysisof Shareholdingsasat1April2016(cont’d)

123

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ual R

epor

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NOtICe IS HeReBY GIVeN tHAt the Third (3rd) Annual General Meeting of Ikhmas Jaya Group Berhad (“IJGB” or“theCompany”)willbeheldatZamrud1Room,TheSaujanaHotel,JalanLapanganTerbangSAAS,40150SelangorDarulEhsanonMonday,20June2016at10.30a.m.forthefollowingpurposes:

AGeNdA

As Ordinary Business

1. To receive the Audited Financial Statements for the financial year ended 31December2015togetherwiththeReportsoftheDirectorsandAuditorsthereon.

2. Todeclareafinalsingletierdividendof1senperordinaryshareforthefinancialyearended31December2015.

3. ToapproveDirectorsFeeofRM183,667.00forthefinancialyearended31December2015.

4. ToapproveDirectorsFeeofRM174,000.00forthefinancialyearending31December2016.

5. Tore-electthefollowingDirectorswhoretireasDirectorsoftheCompanypursuanttotheArticle122oftheCompany’sArticlesofAssociation

(i) Dato’IrDrKhooPingSen(ii) Siew Mun Lout

6. Tore-appointMessrsKPMGasAuditorsoftheCompanyfortheensuingyearandtoauthorisetheDirectorstofixtheirremuneration.

As Special Business

Toconsiderandifthoughtfit,topassthefollowingresolutionswithorwithoutmodifications:-

7. To consider and if thought fit, to pass the following Ordinary Resolution in accordance with Section 129 of the Companies Act, 1965:

“THATDato’SyedAriffFadzillahbinSyedAwalluddinretiringpursuanttoSection129oftheCompaniesAct,1965beandareherebyre-appointedasaDirectoroftheCompanytoholdofficeuntilthenextAnnualGeneralMeeting.

8. Authority to Allot and Issue Shares pursuant to Section 132d of the Companies Act, 1965

“THATpursuanttoSection132DoftheCompaniesAct,1965,theDirectorsbeandarehereby authorised 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 suchpurposesastheDirectorsmay,intheirabsolutediscretion,deemfitprovidedthat the aggregate number of shares to be issued does not exceed ten per centum of the issued share capital of the Company for the time being, subject always to the approvals of all the relevant regulatory authorities being obtained for such issue and allotment.”

Please refer toNote (b)

Resolution 1

Resolution 2

Resolution 3

Resolution 4Resolution 5

Resolution 6

Resolution 7

Resolution 8

Notice ofAnnual General Meeting

124

Annual Report 2015

Ikhmas Jaya G

roup Berhad

Notice ofAnnual General Meeting(cont’d)

9. To transact any other matter for which due notice shall have been given in accordancewiththeCompany’sArticlesofAssociationandtheCompaniesAct,1965.

NOtICe OF dIVIdeNd eNtItLeMeNt ANd PAYMeNt

nOTICE ISALSOHEREBYGIVEnthatsubject totheapprovalof theshareholdersat theThirdAnnualGeneralMeetingtobeheldon20June2016,afinalsingletierdividendof1senperordinaryshare inrespectofthefinancialyearended31December2015willbepaidon9September2016.Theentitlementdateforthedividendpaymentis18August2016.

ADepositorshallqualifyfortheentitlementtothedividendonlyinrespectof:-

(a) SecuritiestransferredintotheDepositor’sSecuritiesAccountbefore4.00p.m.on18August2016inrespectof transfers; and

(b) Securities bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the rules of Bursa Malaysia Securities Berhad.

By Order of the Board

CYNtHIA GLORIA LOUIS (MAICSA 7008306)CHeW MeI LING (MAICSA 7019175)Company Secretaries

Petaling Jaya29 April 2016

NOTES:

(a) OnlymemberswhosenamesappearintheRecordofDepositorsasat10June2016willbeentitledtoattendandvoteat the meeting.

(b) This Agenda item is meant for discussion only, as the provision of Section 169 of the Companies Act, 1965 does not require a formal approval of the shareholders for the Audited Financial Statements. Hence, this Agenda item is not put forward for voting.

(c) A member entitled to attend and vote at this meeting is entitled to appoint up to two (2) proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply. Where a member appoints more than one proxy, the appointment shall be invalid unlesshespecifiestheproportionofhisshareholdingstoberepresentedbyeachproxy.

(d) Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiplebeneficialowners inonesecuritiesaccount(“omnibusaccount”), there isno limit tothenumberofproxieswhich the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds.

(e) The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or, if the appointer is a corporation, under its common seal, or the hand of its attorney duly authorised.

(f) TheinstrumentappointingaproxymustbedepositedattheofficeoftheCompany’sShareRegistrar,SymphonyShareRegistrarsSdn.Bhd.,Level6,SymphonyHouse,PusatDaganganDana1,JalanPJu1A/46,47301PetalingJaya,SelangorDarulEhsannotlessthanforty-eighthoursbeforethetimesetforholdingthemeetingoranyadjournmentthereof.

125

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ual R

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explanatory Notes on Special Business

Resolution 7 - director seeking re-appointment pursuant to Section 129 of the Companies Act, 1965

There-appointmentofDato’SyedAriffFadzillahbinSyedAwalluddin,whoisovertheageof70yearstoholdofficeuntiltheconclusionofthenextAnnualGeneralMeetingoftheCompanyshalltakeeffectiftheproposedResolution 7 is passed by a majority of not less than three-fourths (3/4) of members entitled to vote in person or by proxy at the Third Annual General Meeting.

Resolution 8 - Authority to Allot and Issue Shares

TheproposedResolution8,ifpassed,wouldprovideflexibilitytotheDirectorstoundertakefundraisingactivities,includingbutnotlimitedtoplacementofsharesforthefundingoftheCompany’sfutureinvestmentprojects,working capital and/or acquisitions, by the issuance of shares in the Company to such persons at any time as the Directorsmaydeemfit,withouthavingtoconveneageneralmeeting.Thisauthority,unlessrevokedorvariedby the Company in a general meeting will expire at the conclusion of the next Annual General Meeting of the Company.

Statement Accompanying Notice Of Annual General Meeting

Additionalinformationpursuanttoparagraph8.27(2)oftheMainMarketListingRequirementsofBursaMalaysiaSecurities Berhad is set out below:-

TheprofileoftheDirectorswhoarestandingforre-electionandre-appointment(asperResolutions4,5and7)aresetoutonpage8to15ofthisAnnualReport.

DetailsofanyinterestinthesecuritiesofIkhmasJayaGroupBerhadanditssubsidiariesheldbytheDirectorsareset out page 120 to 121 of this Annual Report.

Notice ofAnnual General Meeting

(cont’d)

this page has been intentionally left blank

IKHMAS JAYAGROUP BeRHAd

1072872-D

CDSACCOunTnO.nO.OFSHARESHELD

FORM OF PROXY

I/We____________________________________________________________________________________________________________NRIC No. (New)_______________________________(Old)_____________________________/Company No. __________________of____________________________________________________________________________________________________________being a member / members of IKHMAS JAYA GROUP BeRHAd (1072872-d) hereby appoint the following person(s):-

Name Address NRIC/ Passport No. Proportion ofShareholdings (%)

or failing him/her/them, THE CHAIRMAN OF THE MEETING, as my/our proxy/proxies, to vote for me/us on my/our behalf attheThirdAnnualGeneralMeeting(“3rdAGM”)oftheCompanytobeheldatZamrud1Room,TheSaujanaHotel,Jalan Lapangan Terbang SAAS, 40150 SelangorDarul Ehsan onMonday, 20 June 2016 at 10.30 a.m. andat anyadjournment thereof in the manner as indicated below in respect of the following Resolutions:-

ReSOLUtIONS FOR AGAINStResolution 1 Declarationofafinalsingletierdividendof1senperordinaryshare.Resolution 2 ApprovalofDirectors’Feesforthefinancialyearended31December

2015.Resolution 3 ApprovalofDirectors’Feesforthefinancialyearending31December

2016.Resolution 4 Re-electionofDato’IrDrKhooPingSenasaDirectorResolution 5 Re-electionofSiewMunLoutasaDirectorResolution 6 Re-appointmentofMessrsKPMGasAuditorsandtoauthorizethe

Directorstofixtheirremuneration.Resolution 7 Re-appointmentofDato’SyedAriffFadzillahbinSyedAwalluddinasa

DirectorpursuanttoSection129oftheCompaniesAct,1965Resolution8 AuthoritytoallotandissuesharespursuanttoSection132Dofthe

Companies Act, 1965

Pleaseindicatewithan“X”intheappropriatespacehowyouwishyourvotestobecast.IfyoudonotindicatehowyouwishyourproxytovoteonanyResolution, the proxy will vote or abstain from voting at his/her/their discretion.

Date:___________________________ __________________________________________ Signature of Shareholder(s)

Notes:

(a) OnlymemberswhosenamesappearintheRecordofDepositorsasat10June2016willbeentitledtoattendandvoteatthemeeting.

(b) A member entitled to attend and vote at this meeting is entitled to appoint up to two (2) proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965shallnotapply.Whereamemberappointsmorethanoneproxy,theappointmentshallbeinvalidunlesshespecifiestheproportion of his shareholdings to be represented by each proxy.

(c) Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficialownersinonesecuritiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxieswhichtheExemptAuthorised Nominee may appoint in respect of each omnibus account it holds.

(d) The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or, if the appointer is a corporation, under its common seal, or the hand of its attorney duly authorised.

(e) TheinstrumentappointingaproxymustbedepositedattheofficeoftheCompany’sShareRegistrar,SymphonyShareRegistrarsSdn.Bhd.,Level6,SymphonyHouse,PusatDaganganDana1,JalanPJu1A/46,47301PetalingJaya,SelangorDarulEhsannotless than forty-eight hours before the time set for holding the meeting or any adjournment thereof.

*And/orfailinghim/her(deleteasappropriate)

the Share Registrar SYMPHOnYSHAREREGISTRARSSDn.BHD.

Level 6, Symphony HousePusatDaganganDana1

Jalan PJU 1A/4647301 Petaling JayaSelangorDarulEhsan

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