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AN

NUA

L REPORT 2013

PUTRAJAYA PERDANA BERHAD(465327-P)

PUTRAJAYA PERDANA BERHAD (465327-P)

2nd & 3rd Floor5, Jalan P16Precinct 16

62150 PutrajayaMalaysia

w w w . p - p e r d a n a . c o m

ANNUAL REPORT 2013

Contents

Mission, Vision & Core Value Statements

Corporate Philosophy

Corporate Profile

Group Corporate Structure

Corporate Information

Board of Directors

Profile of Directors

Executive Committee

Executive Chairman’s Statement

Review of Operations

Group Financial Highlights

Corporate Milestones

Corporate Responsibility

Quality, Health and Safety,Environment Statement

Statement on Corporate Governance

Audit Committee Report

Statement on Risk Management and Internal Control

Financial Statements

Properties of PPB Group

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2 Putrajaya Perdana Berhad (465327-P)

Annual Report 2013

Our Core Values

Our Mission Statement

Our Vision Statement

IntegrItyUpholding absolute honesty guided by righteous moral principles.

reputatIonRecognition, trust and confidence accorded by our customers as a result of our excellent track record of timely delivery as well as high quality and innovative products.

CommItmentThe foundation to achieve our business goals through teamwork and the right resources to fulfil our obligation to the satisfaction of all stakeholders.

To be a RESPONSIBLE premier builder of EXCELLENCE in the provision of

INNOVATIVE and SUSTAINABLE integrated services in the construction,

development and concession businesses.

To become one of the top 5 public listed construction groups in Malaysia in

terms of market capitalisation by 2018.

3Putrajaya Perdana Berhad (465327-P)

Annual Report 2013

effeCtIve teamwork

Putrajaya Perdana Berhad is built on the solid

experience and expertise of its management team. Its

services are delivered by a workforce of team-oriented

individuals who share the goal of exceeding their clients’

expectations.

These underlying values of PPB - integrity, reputation

and commitment - form the foundation upon which the

Group is built.

The company prides itself with its pool of talented and

skilled workers, which produces a diversity of ideas and

creativity at PPB. It is this dynamic depth of ideas and

expertise, ingrained at every level, which turns visions

into reality and creates outstanding landmarks for our

clients.

Safety and traInIng

PPB believes that successful projects are not merely

measured by the finished product, but also by the quality

of the process.

Numerous safety courses and drills are implemented

as part of the Safety and Health Plan at all project sites,

reflecting an uncompromising commitment to safety,

training and quality. This plan aims to manage and

eliminate potential workplace hazards as well as creating

a condusive working environment.

SettIng new StandardS

PPB strives to continually set new standards in

construction and development. Meticulously planned

designs are executed with efficient work practices to

provide intelligent and elegant design solutions.

This foundation built on integrity, reputation and

commitment serves as the cornerstone of PPB, and

fulfills the diverse needs of our highly discerning clients

Menara Felda

Corporate Philosophy


Annual Report 2013

Corporate profIle

Delivering Integrated Building and Construction SolutionIncorporated in 1998, PPB is recognized as one of Malaysia’s most innovative and reliable integrated construction and property development groups. With the newly added expressway concessionaire business to its league, PPB continues to deliver prominent and large scale projects on a turnkey design-and-build basis as well as pioneering the construction of green buildings in the country.

pIoneerIng SuStaInable buIldIngS and developmentS

Over the years, the Group has built a reputation for itself as a leading player in the construction of sustainable or commonly known as green buildings in Malaysia. Our landmark projects include the Low Energy Office (“LEO”) building for the Ministry of Energy, Green Technology and Water; the Green Energy Office (“GEO”) for the Malaysia Green Technology Corporation and the Diamond Building for the Malaysian Energy Commission, among others.

With the Malaysian Government advocating green building development and offering attractive incentives to those opting to go green, the market is now flooded with green building opportunities. The Group will leverage fully on our proven expertise and strong track record in the development of green buildings to tap these opportunities and vigorously enlarge our market share in the green building business segment.

CreatIng promInent landmarkS

Since its inception, PPB has been involved in a multitude of landmark commercial, residential and

infrastructure projects throughout Malaysia. These include the construction of the majority of the Government complexes, offices and high-end residential units within the Federal Government’s administrative capital of Putrajaya.

Spreading its wings beyond Putrajaya are prominent commercial and residential projects within Kuala Lumpur City Centre such as Pavilion Kuala Lumpur and Pavilion Residences which have received accolades for architectural and design excellence. Also on its plates are green buildings such Manipal International University. Besides commercial and residential projects, PPB also expanded into building medical facilities and amongst them was the Sime Darby Parkcity Medical Centre.

buIldIng the natIon’S InfraStruCture

Leveraging on its construction expertise, the Group builds some of Malaysia’s busiest ports as well as highways, bridges, utility service tunnels, monorail

Westport CT6

Diamond Building

Corporate Profile


Annual Report 2013

For our commitment to pioneering energy efficiency and green building development, it won us the “Stamp of Approval” at the national level when the LEO, GEO and Diamond Building were showcased on the 2009 stamps and First-day Covers in support of Malaysia’s green technology initiatives.

On top of this, we garnered recognition for our corporate responsibility efforts when we qualified as one of the 20 shortlisted finalists in the CR Awards 2009 and 2010 events organized by The Star Publications and ICR Malaysia.

In purSuIt of new horIzonS

Going forward, the Group will fully leverage on its core competencies and strong track record to aggressively pursue new horizons. With the identification of three core business segments for the Group, which are construction, property development and expressway concessionaire, it will garner great synergy within the Group to best utilize its resources to add value to its stakeholders and the community.

We are also committed to delivering high quality business processes, services and products. We are one of the first few construction companies in the market to consolidate our ISO 9001 Quality Management System, ISO 14001 Environmental Management System and OHSAS 18001 Occupational Health and Safety Management System under a singular Integrated Management System.

Our receiving of the 5-S accreditation for our good housekeeping and safety management practices from SIRIM and International 5S Association further attests to our commitment to upholding international standards.

As we embark on the journey to be a great corporation in the industry, we will leverage on all our key strengths to achieve our mission and vision in becoming a key integrated building and construction solution provider in the international arena.

Stamp of Approval

projects and sub-structure projects in infrastructure works. Our experience also extends to developing public amenities and recreational facilities.

Riding on the rapid growth momentum in the country, PPB branched out to tap into the concession of expressway via its new subsidiary Putra Perdana Expressway Sdn Bhd which will contribute to its construction segment’s order book and generate recurring income for the Group.

developIng InnovatIve propertIeS

Our property development division also has a strong track record in the development of innovative and luxurious residential units and commercial buildings including green development projects especially in Putrajaya.

leveragIng on Strong Core CompetenCIeS

We owe our strong growth over the past decade to focusing on our core competencies in construction and property development, setting high standards of quality and efficiency and committing to timely delivery without compromise.

Our focus on cost effective solutions and our openness to exploring innovative technologies continues to hold us in good stead.

Backed by sound business fundamentals and a strong management team which has the foresight and ability to tap into lucrative new opportunities, PPB is well positioned to deliver on our promises in all our projects and markets.

reCognIzed for our effortS

As a testament to our efforts, the Group’s projects have received both local and international accolades from various organizations in several categories in the industry. These include the Malaysian Construction Industry Excellence Awards 2010 (for both the Contractor Awards G7 Category and Special Awards Innovation Category) for Diamond Building, a green building with double Platinum Rating Certifications from both Singapore’s BCA Green Mark and Malaysia’s Green Building Index. The same building developed and built by us also bagged the ASEAN Energy Awards as the winner for the New & Existing Buildings Category and second placing in the prestige ASHRAE Technology Award 2013 New Commercial Building Category.

Corporate Profile (cont’d)


Annual Report 2013

putrajaya perdana berhad

Putra PerdanaConstruction Sdn Bhd

Misi SerantauSdn Bhd

Putra PerdanaDevelopment Sdn Bhd

Putra PerdanaExpressways Sdn Bhd

TimeVantageSdn Bhd

Ipoh CityDevelopment

Sdn Bhd

SenandungBudimanSdn Bhd

Perdana LandDevelopment

Sdn Bhd

SarjanaSejati (M)Sdn Bhd

InfraSatin

Sdn Bhd

SaluranArena

Sdn Bhd

KuasaSezamanSdn Bhd

Trek SatinSdn Bhd

BumirayaSamudraSdn Bhd

Blue Ocean MasterSdn Bhd

Brilliant CorridorSdn Bhd

100%

57.14%

70%

50%

100% 100% 100% 100% 30% 100% 70%

60%

100% 100% 100%

70%

GroupCorporateStructure

as at 31 May 2014


Annual Report 2013

dato’ rosman bin abdullah(Non-Independent Executive Chairman)

angie ang ai hoon(Independent Non-Executive Director)

dato’ mohammed azhar bin osman khairuddin(Independent Non-Executive Director)

Jerome lee tak loong (Independent Non-Executive Director)

2nd & 3rd FloorNo. 5, Jalan P16, Precinct 1662150 PutrajayaTel : +60 3-8886 8888 Fax : +60 3-8886 8886Website: www.p-perdana.comEmail: [email protected]

KPMGChartered AccountantsLevel 10, KPMG Tower8, First Avenue, Bandar Utama47800 Petaling JayaSelangor Darul EhsanTel : +60 3-7721 3388 Fax : +60 3-7721 3399

Malayan Banking BerhadAmBank (M) BerhadAlliance Bank Malaysia Berhad

koo lai ngorMAICSA 7022379

3rd Floor, No. 5Jalan P16, Precinct 1662150 PutrajayaTel : +60 3-8886 8888 Fax: +60 3-8889 5668

Board of Directors Principal Place Of Business

Auditors

Principal Bankers

Company Secretary

Registered Office

Artist’s impression of Desiran Bayu’s semi-detached houses.

Corporate Information


Annual Report 2013

1 ms. angie ang ai hoon Independent Non-Executive Director

2 mr. Jerome lee tak loong Independent Non-Executive Director

3 dato’ rosman bin abdullah Executive Chairman

4 dato’ mohammed azhar bin osman khairuddin Independent Non-Executive Director

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Board of Directors


Annual Report 2013

Dato’ Rosman bin Abdullah was appointed as the Executive Chairman of Putrajaya Perdana Berhad (“PPB”) on 13 September 2012 pursuant to the acquisition of the entire stake in PPB by Cendana Destini Sdn Bhd, an investment holding company controlled by him. He is also the Chairman of PPB’s Executive Committee.

Dato’ Rosman holds a Bachelor of Commerce (Accounting) Degree from the Australian National University and attended the Advanced Management Programme at Oxford University under the British Government Chevening Scholarship Award. He is a member of the Malaysian Institute of Accountants and the Australian Society of Certified Practising Accountants.

Dato’ Rosman began his career in Arthur Andersen & Co in 1989 in the areas of auditing and financial advisory. He joined Malaysia Airports Holdings Berhad (“MAHB”) as an Executive Director in 1997. In April 2003, he left MAHB to join PECD Berhad as its Corporate Affairs Director. He was promoted to the Group Chief Executive Officer of PECD Berhad in July 2006. He was the Chief Executive Officer of Syarikat Air Negeri Sembilan Sdn Bhd from April 2009 to September 2012.

Dato’ Rosman also sits on the Board of the subsidiaries of PPB. He is also presently serving as an Independent Non-Executive Director of Cliq Energy Berhad, Narra Industries Berhad and Kumpulan FIMA Berhad.

He does not have any family relationship with any Director and/or major shareholder of PPB, nor any conflict of interest with PPB. He has had no convictions for any offences within the past 10 years.

Ms. Angie Ang Ai Hoon was appointed to the Board of PPB on 1 August 2013 as an Independent Non-Executive Director. She is the Chairman of the Audit Committee and Remuneration Committee and a member of the Nomination Committee.

Ms. Angie Ang graduated from University of Malaya with a Bachelor in Accounting (Hons). She is an Associate Chartered Accountant of the Institute of Chartered Accountants in England and Wales.

Ms. Angie Ang began her career in Touche Ross & Co, London. She spent about eight years with Hanafiah Raslan & Mohamad and Price Waterhouse in the areas of audit and business advisory from 1984 to 1992. She was a Senior Equity Analyst with Pesaka Jardine Fleming, SG Warburg (SBC Warburg) and Caspian Research from 1992 to 1998. She also served with Nomura Advisory Services Sdn Bhd since 1999 as an Associate Director, Nomura Malaysia Sdn Bhd as the Head of Debt Capital Market, and the Head of Fixed Income/Acting Head of Investment Banking. In 2007 she was appointed as the Country Head, Malaysia by Standard London (Asia) Sdn Bhd before undertaking the role as the Managing Director of Theia Sdn Bhd, an independent consultant to Standard Bank plc.

She does not have any family relationship with any Director and/or major shareholder of PPB, nor any conflict of interest with PPB. She has had no convictions for any offences within the past 10 years.

dato’ roSman bIn abdullah Executive Chairman Malaysian, Age 47

angIe ang aI hoonIndependent Non-Executive DirectorMalaysian, Age 57

Profile of Directors


Annual Report 2013

Dato’ Mohammed Azhar bin Osman Khairuddin was appointed as an Independent Non-Executive Director on 1 August 2013. He is the Chairman of Nomination Committee and member of Audit Committee and Remuneration Committee.

Dato’ Azhar holds a Bachelor of Laws (Honours) Degree from the University of Malaya. Dato’ Azhar is a member of the International Bar Association (IBA) and the Inter-Pacific Bar Association and has attended the Wharton Executive Development Program in 1997.

Dato’ Azhar started his career with Petroliam Nasional Berhad (“PETRONAS”) in 1979 where he worked for a total of 32 years. Dato’ Azhar was appointed to the position of Vice President of the Legal Division before his retirement from PETRONAS. Dato’ Azhar also held the position of Group Company Secretary of PETRONAS.

During his tenure in PETRONAS, Dato’ Azhar served as an audit and board member of PETRONAS Gas Bhd as well as a board member of KLCC Urusharta Sdn Bhd, Convex Malaysia Sdn Bhd and the Kuala Lumpur Convention Centre Sdn Bhd, and has also served on several other Boards within the PETRONAS Group, including the Universiti Teknologi Petronas (UTP), Petrosains, Prince Court Medical Centre. He also represented PETRONAS on the Board of Malaysia-Thailand Joint Development Authority from the mid 1990’s till 2010.

Dato’ Azhar currently sits on the Board of various private companies.

He does not have any family relationships with any Director and/or major shareholders of PPB, nor any conflict of interest with PPB. He has had no convictions for any offences within the past 10 years.

Mr. Jerome Lee was appointed to the Board of PPB on 28 March 2014. Mr. Jerome Lee is a member of the Executive Committee and Audit Committee. He is also the Chairman of the Long Term Incentive Plan Committee.

Mr. Jerome Lee graduated from Royal Melbourne Institute of Technology, Australia with a Bachelor of Business majoring in Economics & Finance.

Mr. Jerome Lee has 15 years’ experience in Corporate Finance, Corporate Advisory, Private Equity and Investment Banking.

Mr. Jerome Lee holds directorships in several private limited companies.

He does not have any family relationships with any Director and/or major shareholders of PPB, nor any conflict of interest with PPB. He has had no convictions for any offences within the past 10 years.

dato’ mohammed azharbIn oSman khaIruddInIndependent Non-Executive DirectorMalaysian, Age 58

Jerome lee tak loongIndependent Non-Executive DirectorMalaysian, Age 37

Profile of Directors (cont’d)


Annual Report 2013

1 Jerome lee tak loong Independent Non-Executive Director

2 ahmad ridzal bin ahmad Chief Executive Officer, Development

3 dato’ rosman bin abdullah Executive Chairman

4 Sit kam hock Group Chief Financial Officer

5 goh Ceah Chuang Chief Executive Officer, Construction

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4

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Executive Committee


Annual Report 2013

Mr. Goh Ceah Chuang, was appointed as member of the EXCO on 26 March 2013. Mr. Goh was appointed as the Chief Executive Officer and Director of Putra Perdana Construction Sdn Bhd (“PPC”), a wholly-owned subsidiary of Putrajaya Perdana Berhad on 14 March 2013.

Mr. Goh holds a Bachelor of Science Degree in Civil Engineering from the University of Aberdeen, United Kingdom. He is a registered Professional Engineer with the Board of Engineers, Malaysia and is also a member of the Institute of Engineers, Malaysia.

Mr. Goh has more than 30 years of experience in the construction and construction related industries which include infrastructure and building projects. He started his career as site engineer in a leading international construction company before joining a public listed company listed in the Main Market of Bursa Malaysia Securities Berhad where he was responsible for the construction and manufacturing businesses. He also worked in several other construction and development companies at different time of his career.

Mr. Goh joined PPC as the Senior General Manager in 2007 and was later transferred to PPC Abu Dhabi Branch Office in the United Arab Emirates as Head of Abu Dhabi Branch. He was subsequently promoted to Chief Operating Officer of PPC on 23 August 2010 before he assumed the current position.

Encik Ahmad Ridzal, was appointed as member of the EXCO on 28 August 2013. Encik Ahmad Ridzal was appointed as the Chief Executive Officer and Director of Putra Perdana Development Sdn Bhd, a wholly-owned subsidiary of PPB on 16 August 2013 and 28 August 2013 respectively.

Encik Ahmad Ridzal graduated from Bradley University, Illinois, USA with a Bachelor of Science in Civil Engineering.

He has over 24 years of experience in the property and construction sectors, where he started his career with Island & Peninsular Berhad and thereafter held key positions in several property organisations listed in the Main Market of Bursa Malaysia.

In July 2005, he was appointed as General Manager (Development) of Guthrie Property Development Holding Berhad, leading the development of Bukit Jelutong Township. Subsequently, he was appointed as Vice President 1 of Sime Darby Property Berhad, following the merger of Sime Darby Berhad, Kumpulan Guthrie Berhad and Golden Hope Plantation Berhad.

He then progressed as the Chief Executive Officer of Glenmarie Properties Sdn Bhd providing the necessary leadership in planning, development and business expansion of the organisation.

In 2011, he became the Director for Project Management of 1Malaysia Development Berhad, leading the management team in the relocation and development of Bandar Malaysia.

goh Ceah ChuangMalaysian, Age 56

ahmad rIdzal bIn ahmadMalaysian, Age 48

Executive Committee (cont’d)

‘‘ ‘‘

YBhg. Dato’ Rosman bin Abdullah was appointed as the Chairman of the Executive Committee (“EXCO”) on 2 October 2012 whilst Mr. Jerome Lee Tak Loong was appointed as member of EXCO on 9 April 2014. The profiles of YBhg. Dato’ Rosman bin Abdullah and Mr. Jerome Lee Tak Loong are set out in page 9 and 10 of this Annual Report.


Annual Report 2013

Mr. Sit Kam Hock, is the Group Chief Financial Officer. He was appointed as member of the EXCO on 26 March 2013. He heads the finance department overseeing the Group’s accounting, finance operations, taxation and corporate matters. He also oversees the group legal, risk management, information technology and administrative functions.

He is a member of the Malaysian Institute of Certified Public Accountants and the Malaysian Institute of Accountants and a Fellow member of CPA Australia.

He was attached to an international firm of Chartered Accountants both in Malaysia and Australia where he specialised in auditing and consultancy works before joining the corporate sector. He left the accounting profession in 1989 and joined the corporate sector in various senior positions.

He has over 20 years of consultancy, finance, accounting and general management experience.

SIt kam hoCkMalaysian, Age 54

Diamond Building - GBI Platinum & Green Mark Platinum

Executive Committee (cont’d)


Annual Report 2013

dato’ roSman bIn abdullah Executive Chairman

Executive Chairman’s Statement

‘‘ ‘‘On behalf of the Board of

Directors, it is my great pleasure

to present the Annual Report

and Financial Statements of

the Group and the Company

for the financial year ended 31

December 2013

Dear Shareholders,


Annual Report 2013

operatIng envIronment

Growth in the construction sector in 2013 continued to expand supported by higher activity in the residential segment and key infrastructure projects driven by both public and private spending. The various projects initiated by the Government in 2013 under the Economic Transformation Programme had contributed to the 10.9% growth of the construction sector in 2013. However, the construction sector continued to experience major challenges one of which is having sufficient number of skilled construction workers.

fInanCIal and buSIneSS revIew

For the financial year ended 31 December 2013 ( “FY 2013” ), the Group recorded the highest ever Return on Equity ( “ROE” ) of 21.2%. The Group also recorded

a higher revenue of RM705.2 million compared with RM688.6 million in the previous financial year ended 31 December 2012 ( “FY 2012” ), mainly contributed by good progress and increased activities in both our construction and development segments. In line with the higher revenue and coupled with a better financial discipline, the Group recorded an impressive 73% growth in net profit to RM45.0 million in FY 2013 compared to RM26.1 million in FY 2012.

Apart from the consistent and significant revenue and profit contribution from our engineering and construction segment, the development segment had also made a marked improvement where its revenue growth in FY 2013 was more than triple compared to FY 2012. This is in line with the Group’s strategy to grow our property development segment and turning it into one of the prominent property players in the country.

During Kinta Lake District Development Agreement Signing

Executive Chairman’s Statement (cont’d)


Annual Report 2013

SIgnIfICant Corporate development

In our continuous efforts to turn the Group into a sustainable and strategically aligned organization the Group had undergone a thorough review of the strategic direction, organizational, human resource and business focus perspectives.

I am pleased to report that the Group had implemented a Long Term Incentive Plan ( “LTIP” ) for all eligible Group employees. Under the LTIP, the aggregate amount shares to be made available, at no cost to the eligible employees, shall not exceed 5% of the Company’s enlarged issued and paid up ordinary share capital. The vesting of the LTIP shares shall be subjected to the Group and individual performance. During FY 2013, the Company has granted a total of 6.7 million share grants to eligible employees of the Group.

The Group’s development arm made significant progress in FY 2013 when it enters into two main arrangements that will bring potential Gross Development Value ( “GDV” ) in excess of RM4.5 billion over the next 10 years. Our wholly owned unit, Putra Perdana

Development Sdn Bhd (“PPD”) is partnering the State Government of Perak to develop a 264-acre land into a township at the outskirt of Ipoh. PPD has also entered into a joint venture agreement with Syarikat Prasarana Negara Berhad to undertake a mixed development project in Bukit Jalil, Kuala Lumpur not far from the LRT station. PPD is also well positioned to launch more projects in Putrajaya and Melaka with estimated GDV of about RM500 million.

FY 2013, also marked our entry into renewable energy activity as a concession business. The Group acquired 70% equity interest in Kuasa Sezaman Sdn Bhd (“KSSB”). KSSB, whose remaining 30% equity is held by Perak Hydro Renewable Energy Corporation Sdn Bhd (“PHREC”), is the concession owner of a 7 mega watt mini hydro plant that had entered into a 2-year Power Purchase Agreement with Tenaga Nasional Berhad. Works on the hydro-plant is expected to commence in 2014 and revenue can be expected from 2017 onwards.

The Group’s leadership team was further strengthened in 2013 through internal promotions and new appointments. Mr. Goh Ceah Chuang was promoted as



Annual Report 2013

the Chief Executive Officer of the construction business in March 2013. He is supported by Mr. Teh Kian Huat who rejoined the Group in June 2013 as the construction business Chief Operating Officer (Building Division) and Mr. Yong Khoon Seng who was promoted in July 2013 as the construction business Chief Operating Officer (infrastructure division). Meanwhile, the Group’s development business saw a slew of management changes led by the appointment of Encik Ahmad Ridzal Ahmad as its Chief Executive Officer in August 2013.

Corporate governanCe

Notwithstanding its status as a non-listed entity, the Group still takes it upon itself to adopt the corporate governance practices as prescribed by Bursa Malaysia to listed entities. During the year the Group has re-established the Audit Committee with terms of reference as recommended by the Malaysian Code of Corporate Governance.

dIvIdend

For FY 2013, the Board had approved and paid five interim single-tier dividend totaling RM55.1 million at various dates between 13 June 2013 and 13 March 2014.

The Board has recommended a payment of a final single-tier dividend amounting to RM2.2 million in respect of the FY 2013.

proSpeCtS

The Malaysian economy is expected to remain on a steady growth trajectory of 4.5% - 5.5% in 2014 (2013:4.7%). Specifically, the construction sector is expected to continue recording high growth at 10%, albeit at a more moderate pace in 2014 (2013:10.9%), as the completion of several large civil engineering projects will more than offset the progress in existing projects in the buildings, transport, utility and oil and gas sectors.

Initiatives undertaken by the Group in the past year have now positioned the company on a more strategic and stronger footing for the future. I am confident that the seeds that we are sowing now in strengthening our position in the construction sector, expanding and

Horizon Residences Project

Artis Impression of Serai Bukit Bandaraya Desiran Bayu - handed over to clients in 2013



Annual Report 2013

growing our presence in the property development sector and investment in concessions business in toll road and renewable energy, will form the backbone for the increase and sustainability of the Group future earnings.

The Group will continue to intensify its tendering efforts and follow ups to achieve better success rate in replenishing its order book. Special focus shall be given on green building projects which are now becoming a preference in the industry and also infrastructure projects which we already have expertise in.

Given the above and barring any unforeseen circumstances, the Board expects the Group to perform better in the financial year ending 31 December 2014.

appreCIatIon

I wish to thank my colleagues on the Board who have very successfully helped steer the company

through a very difficult transitional year . I would like to acknowledge the contributions of our past directors Ms Monica Oh Chin Chin, Encik Ishak Ahmad and Mr. Tan Vern Tact who resigned in March 2014. Our heartfelt appreciation for their valuable advice and guidance to the Group. I wish them the very best in their new undertakings.

On behalf of the Board, I would like to express our appreciation to the management team and all the employees for their contribution, dedication and commitment to the Group. Without your support we would not have had such a record year.

I would also like to extend my appreciation to our clients, business partners and all stakeholders of the Group for their continuous support, trust and confidence in the Group.

dato’ roSman bIn abdullahExecutive Chairman

Journey to Greatness at Ilham Resort, Port Dickson



Annual Report 2013

ConStruCtIon dIvISIon

The construction sector is expected to continue recording high growth backed by the ongoing implementation of various Government projects, particularly large-scale projects such as the MRT line 1 and 2, the RAPID project as part of the O&G sector. PPC continues to benefit from on this impressive performance which was supported by the robust construction activity in the civil engineering and residential subsector.

For FY2013, the company registered lower revenue of RM655.6 million compared to RM672.8 million in FY2012. This was mainly due to the lower revenue from projects completed in 2012 and 2013. However, this was mitigated by the additional revenue from new projects secured in 2013.

Two new projects were secured in 2013, which includes The Horizon Residences and Serai Bukit Bandaraya, in Klang Valley both of which are seeking GBI certification.

Located on a 6-acre land, the last piece of prime real estate in Bukit Bandaraya, Bangsar, Kuala Lumpur, the Serai project entails the construction of two towers of 21-storey luxury condominium with a 5-storey carpark podium cum 2-storey of facilities. This project which has a contract value of RM381.9 million consists of 121 units of prestigious and luxurious condominiums and targets to be completed in November 2015. The Horizon Residences is another green building currently under construction by PPC. These two 21 to 27-storey blocks of luxury service apartments are located in the prime land of KLCC, overlooking the famous Royal Selangor Golf Club in Kuala Lumpur and has a contract value of RM156.6 million.

PPC has to date recorded in access of RM2 billion worth of green buildings constructed under its wings. Riding on the upward trend of sustainable development in the country, PPC is confident to secure more green construction projects over conventional constructions to chalk up its order book for another two years.

Review of Operations

‘‘

‘‘

Construction Division continues to be the main driver of earnings for the Group, recording 93% of the total revenue of RM705.2 million in FY2013. The remainder was contribution from the Group’s Property Development division.


Annual Report 2013

property development dIvISIon

Putra Perdana Development Sdn Bhd (“PPD”), the property development division of the Group continues to contribute to the Group’s bottom line and achieved higher revenue recorded in FY2013 of RM49.6 million. Desiran Bayu which was targeted to be handed over in Q1 2014 was completed one month ahead of time and handed over in the final quarter of 2013. We continue to develop our land bank in Precint 16 which has a total GDV of RM980.76 million and the development will be carried out in 2014 onwards.

PPD has teamed up with the State Government of Perak to develop a 264-acre land into a mixed development project called Bandar Tasik Amanjaya. With a gross development value (GDV) of RM2.18 billion, this project

consist of 13 phases of eco-friendly and sustainable developments within the site and is expected to be completed within 15 years. Our first launch of affordable housing will be in 2014 and followed by retirement homes in early 2015.

eXpreSSway ConCeSSIonaIre dIvISIon

Saluran Arena Sdn Bhd (“Saluran Arena”), the expressway concessionaire for Lebuhraya Serdang-Kinrara-Putrajaya (SKIP) is anticipating the signing of the Concession Agreement in 2014. The Group expects Saluran Arena to begin contributing to the Group’s coffer sometime between 2018 and 2019. SKIP Expressway, is an intra-urban expressway dubbed the “missing link” to the existing highway/expressway network within Greater Kuala Lumpur.

Review of Operations (cont’d)


Annual Report 2013

PPB has 70 percent equity interest over Kuasa Sezaman Sdn Bhd, which has a licence to operate a 7MW mini hydro plant with a power purchase agreement (PPA) for 21 years after successfully acquiring Misi Serantau Sdn Bhd in 2013. This has brought our concessionaire division to another level, as we foresee the importance of diversifying our usual concessionaire business and embarking into hydro projects in attributing attractively to the future growth of our Group and contributing recurring income. We expect to start construction in Q3 of 2014 and expect to start operation of the mini hydro at the end of 2016.

green effortS

We are committed towards sustainable development and the protection of the earth and Putrajaya Perdana has been one of the main driving forces behind Malaysia’s green building movement. Over the years, we have progressed from being a pioneer in energy efficient building design and construction, to integrating other green elements such as indoor environmental quality, sustainable site planning and management, materials and resource utilization, water efficiency as well as innovation, into our projects.

We continue to bring into play our proven expertise and experience in the development of green or sustainable buildings. Our portfolio comprises several landmark buildings which have won awards and accolades for their innovative, trend-setting architecture and construction. Manipal International University is among the building that has LEED Platinum built by us.

The Group continues to pursuit for greener constructions and our Human Resources Department continues to double its efforts in beefing up our employees to acquire more knowledge and trainings pertaining to sustainable construction via participations in seminars, workshops and trainings organised by Construction Industry Development Board Malaysia (“CIDB”), Malaysian Green Building Confederation (“MGBC”) and other construction related associations such as GBI Facilitator Basic and Advance Courses, Seminar Empowering Green Technology Towards Sustainable Construction and MGBC Seminar on Green Development.

QualIty, health and Safety

We strongly believe that Health & Safety (“H&S”) is a vital part of our organization as our key business, which is structural construction.

The Management has openly accepted the full responsibility of providing a safe working environment to our employees. At the same time, employees are expected to take full responsibility of working in accordance with the H&S standards and practices set by the Group and monitored by our H&S Committee.

At PPB, we believe that we need to work as a team to ensure that safety and health is a priority. Therefore, the Group emphasizes on the 5S Practice endorsed by SIRIM and HK5SA where everyone has a role to play in promoting safety and health at the workplace and taking every reasonable measure to assure a safe working environment. Our Company H&S Committee continuously play a critical role in introducing and improving safety measures to minimize workplace hazards. Trainings and workshops on tool and

Manipal University

ERT-HQ Evacuation in January 2013



Annual Report 2013

machinery handling are carried out extensively at all construction sites to ensure proper handling of equipment to reduce possibility of injuries.

The Management also regularly conducts Site Safety Audits, Review Hazard Identification Risk Assessment Determining Control (“HIRADC”) and bi-monthly meetings on H&S related matters to ensure that H&S issues are given immediate attention and resolved before any mishap takes place. All tools and machinery are also routinely checked and serviced to ensure they are in prime working condition to avoid injuries and downtime.

Top Management has always stressed that Health & Safety is number 1 in our Priority list. To ensure that the message is cascaded down to all levels, the Roles & Responsibilities is regularly briefed to all staff at project sites, during which, their responsibilities are emphasized and also highlighted.

ConCluSIonS

Given the new Mission 190 to spur us to greater heights, our Construction Division will continue to work on tenders for both buildings and infrastructure projects in the country. The infrastructure sub-division is also expected to be driven by its new job in the RAPID project in Pengerang, Johor, expected to begin in mid 2013. The Group shall remain vigilant in our actions and proactive in management with cautious optimism while operating in a challenging and robust business environment. Whilst we have attained a record performance for the financial year under review, the Group will continue to improve on its performance with the aim to achieving sustainable growth and enhancing shareholder value.

Westport CT6-2 300m wharf and yard zones R&S



Annual Report 2013

Group Financial Highlights

180.7

243.1

208.5

216.0

218.9

132.2

76.3

37.0

27.5

34.0

39.2

46.2

654.2

(RM Million)Profit Before Tax¹

(RM Million)

Net Profit AttributableTo Owners Of The Company¹

(RM Million)Revenue¹

(RM Million)EBITDA¹

(RM Million)Total Assets

(RM Million)Total Borrowings

(RM Million)

Equity AttributableTo Owners Of The Company

43.1

54.6

51.4

40.2

62.3

673.0

613.7

562.6

568.1 NIL

NIL

NIL

0 200 400 600 800 1000 0 10 20 30 40 50 60 70 80

0 10 20 30 40 50 60 70 80 0 10 20 30 40 50

0 100 200 300 400 500 600 700 800

0 50 100 150 200 250

744.3

508.9

822.0

688.6

705.2

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

50.6

63.0

58.1

47.4

59.3

0 30 60 90 150120


Annual Report 2013

financial year ended 31 decemberrm’million 2013 2012 2011 2010 2009Revenue1 705.2 688.6 822.0 508.9 744.3Earnings before interest, taxes, depreciation and amortisation (EBITDA)1 59.3 47.4 58.1 63.0 50.6 Interest cost1 3.0 3.0 3.8 7.1 6.5 Profit before tax1 62.3 40.2 51.4 54.6 43.1 Net profit attributable to equity holders of the Company1 46.2 27.5 37.0 39.2 34.0 Total assets 568.1 562.6 613.7 673.0 654.2 Total borrowings - - - 76.3 132.2 Equity attributable to owners of the Company 218.9 216.0 208.5 243.1 180.7

financial Indicators: 2013 2012 2011 2010 2009Return of average equity1 (%) 21.2 12.9 16.4 18.5 20.8 Return of total assets1 (%) 7.9 4.6 5.9 5.8 5.2 Earnings per share1 (sen) 33.0 19.6 26.4 28.0 24.3 Dividend per share (sen) 40.9 16.3 43.2 21.4 11.0 Net assets per share (sen) 156.3 154.3 148.9 173.6 129.1 Gearing ratio2 (times) - - - 0.3 0.7

Note: 1 The comparative figures and ratios for years 2009 to 2011 have excluded the discontinued operations.2 Gearing ratio is calculated based on loans and borrowings over shareholders’ equity

Sarawak Energy Building

Group Financial Highlights (cont’d)


Annual Report 2013

Corporate Milestones

year 1986• deCember Indah Tegas Sdn Bhd (“ITSB”) was incorporated in Malaysia under the Companies Act, 1965 as a wholly-owned subsidiary of Kamunting Corporation Berhad (“KCB”) (now known as E&O Property Development Berhad).

year 1990• aprIl ITSB changed its name to Kamunting Construction Sdn Bhd (“KCSB”) and commenced construction activities.

year 1990-1996• aprIl ITSB changed its name to Kamunting Construction Sdn Bhd (“KCSB”) and commenced construction activities.

year 1997• aprIl Malaysian Plantations Berhad (“MPB”) (now known as Alliance Financial Group Berhad) acquired KCSB from KCB to serve as a joint venture (“JV”) vehicle between K.L. Land Development Sdn Bhd (“K.L. Land”), Putrajaya Holdings Sdn Bhd (“PJH”) and Kumpulan Pinang Golf & Country Resort Sdn Bhd (“KPGCR”) to jointly develop Putrajaya.

• September KCSB acquired Taman Melaka Raya Developments Sdn Bhd (“TMR”) from Bandar Raya Developments Berhad. TMR was principally engaged in the property development of Taman Melaka Raya, Melaka.

year 1998• July Putrajaya Perdana Sdn Bhd (“PPSB”) was incorporated as a new JV vehicle in place of KCSB.

• September KCSB and TMR changed their names to Putra Perdana Construction Sdn Bhd (“PPC”) and Putra Perdana Development Sdn Bhd (“PPD”) respectively.

• oCtober

PPSB acquired 100% equity interest in both PPC and PPD.

year 2000• July KCB acquired 62% equity interest in K.L. Land which holds 55% equity interest in PPSB from MPB.

• auguSt KCB further acquired 15% equity interest in PPSB from KPGCR by way of a Mandatory General Offer pursuant to the provisions of the Malaysian Code on Take-Overs and Mergers, 1998. As a result of these acquisitions, KCB holds 49.1% effective equity interest in PPSB.

• September Both PPC and PPD were awarded the MS ISO 9002:1994 Quality Systems certification from SIRIM QAS International Sdn Bhd / UKAS of United Kingdom.

• deCember PPD acquired the entire equity interest of Sarjana Sejati (M) Sdn Bhd (“SSSB”) from KCB. SSSB entered into a JV with Tunas Eksklusif Holding Sdn Bhd in January 2001 to jointly develop a piece of land in Bukit Katil, Melaka.


Annual Report 2013

Corporate Milestones (cont’d)

year 2000PPC won the Builders Award - Building works category for the commercial/office Building Project for the Construction and Completion of the Ministry of Finance Buidling, Putrajaya from CIDB.

• february PPC successfully secured the design and build project for the Low Energy Office (“LEO”) Building of the Ministry of Energy, Green Technology and Water in Putrajaya, its first involvement in the construction of energy efficient buildings.

• June PPSB converted to a public limited company, known as Putrajaya Perdana Berhad (“PPB”).

• July PPB moved to its own building at Danau Point, located in Precinct 16, Putrajaya.

year 2003PPC won the Malaysian Construction Industry Excellent Awards 2003 under the Project Award Major Engineering Category for the Ministry of Energy, Water and Communication’s LEO Building in Putrajaya.

year 2006

• July The LEO Building built by PPC was awarded with the ASEAN Energy Efficiency & Conservation Best Practices for Energy Efficient Building Award under the New & Existing Category by the ASEAN Center for Energy.

PPC completed the construction of Pavilion Kuala Lumpur, a renowned shopping mall in the golden triangle of Kuala Lumpur.

• September PPC obtained the Occupational Health and Safety Management Systems Certificate from SIRIM QAS International Sdn Bhd for the successful implementation of Occupational Health and Safety Management Systems complying with OHSAS 18001 : 1999. The scope of the certification covers construction services in building and civil engineering works.

SBSB launched its first green residential product of exclusive lake-front energy efficient bungalows, D’Heron at The Lake in Precinct 16, Putrajaya.

• oCtober PPB implemented the Employees’ Share Option Scheme (“ESOS”) which entails the issuance of up to 15% of PPB’s issued and fully paid-up share capital at any one time pursuant to the options to be granted under the ESOS, to eligible directors and employees of the Group. The ESOS is governed by the ESOS By-Laws approved by the shareholders at an Extraordinary General Meeting on 22 August 2006.

Listing of PPB’s entire issued and paid up share capital on the Main Market of Bursa Malaysia under the construction sector.

year 2004• June PPD acquired the entire equity interest of Senandung Budiman Sdn Bhd (“SBSB”) from PJH. SBSB is principally engaged in property development and construction.


Annual Report 2013


year 2007• auguSt Swan Symphony Sdn Bhd (“SBSB”), a special purpose vehicle owned by the Abu Dhabi - Kuwait - Malaysia Investment Corp (“ADKM Investment”) and Autron Investment, a subsidiary of Singapore and Australian-listed Autron Corp Ltd emerged as a new substantial shareholder at PPB after acquiring 50.6% of PPB shares from Eastern & Oriental Bhd.

PPC completed the construction of Pavilion Kuala Lumpur, a renowned shopping mall in the golden triangle of Kuala Lumpur.

• oCtober PPC completed and handed over the first GreenBuildingIndex certified green building, Green Energy Office for Malaysian Green Technology Corporation in Bangi, Selangor.

year 2008• oCtober UBG Berhad (“UBG”) acquired the entire equity interest held by SSSB in PPB. As a result of the completion of a conditional take-over offer and placement of shares by UBG, UBG now holds 85.85% direct interest in PPB.

year 2010• marCh PPB was named a finalist of StarBiz-ICR Malaysia Corporate Responsibility Awards 2009. PPB was one of the 20 finalists shortlisted from more than 300 public

year 2009• february PPC was awarded the MS ISO 14001:2004 Environmental Management System Certification from SIRIM QAS International Sdn Bhd.

• may PPB complete its acquisition of the entire equity interests in CMS Roads Sdn Bhd (“CMS Roads”) and CMS Pavement Tech Sdn Bhd (“CMS Pavement”) from UBG. CMS Roads principally undertakes the road management and maintenance work while CMS Pavement is a specialist provider of pavement works encompassing pavement construction, rehabilitation and maintenance.

listed companies in Malaysia who participated in this event. The award is a partnership between The Star and Institute of Corporate Malaysia, and is supported by the Securities Commission Malaysia and Bursa Malaysia.

• June PPC was awarded its inaugural hospital project at Desa Parkcity, Kuala Lumpur. This will pave the way for the company to expand into the medical and health care sector which requires different expertise and knowledge from commercial building construction.

• July PPC was awarded its first 5S certification from SIRIM and International 5S Organisation.

• november PPC won the Malaysian Construction Industry Excellence Award 2010 for 2 categories:1. Winner for Contractor Awards: Grade G72. Winner for Special Awards: Innovation For the Diamond Building of Suruhanjaya Tenaga

in Putrajaya. This double platinum rated green building from GBI and Green Mark was developed by PPD and built by PPC.

• deCember On 21 December 2010, PPB was delisted from the main market of Bursa Malaysia following the completion of an unconditional take-over of shareholding by Javace Sdn Bhd (“Javace”) and Sheikh Tarek Essam Ahmad Obaid.


Annual Report 2013

year 2011• february On 28 February 2011, both the subsidiaries, CMSR and CMSPT were disposed off following the same unconditional take-over.

• marCh PPB was again named one of the 21 finalists of StarBiz-ICR Malaysia Corporate Responsibility Awards 2010.

• To strengthen our core business in the construction arm, PPC on 11 March 2011 acquired 60% equity interest in a construction company named Saluran Arena Sdn Bhd.On 30 March 2011, UBG acquired the remaining PPB’s shares from Javace, making PPB a wholly-owned subsidiary of UBG.

• may On 1 May 2011, Mr. Cheah Ham Cheia was appointed to the Board and took over the rein of Chief Executive Officer of PPB from Mr. Wie Hock Kiong.

year 2012• September On 13 September 2012, Dato’ Rosman bin Abdullah was appointed to the Board as Executive Chairman.On 14 September 2012, Cendana Destini Sdn Bhd (“Cendana Destini”) completed its acquisition of the entire equity interest in PPB from UBG, making PPB a wholly-owned subsidiary of Cendana Destini.

year 2013• marCh On 14 March 2013, Mr. Goh Ceah Chuang assumed the position of Chief Executive Officer of PPC from Mr. Cheah Ham Cheia.

• JuneMr. Teh Kian Huat joined Putra Perdana Construction Sdn Bhd (“PPC”), a wholly-owned subsidiary of Putrajaya Perdana Berhad on 17 June 2013 as the Company’s Chief Operating Officer.

• auguStDato’ Mohammed Azhar bin Osman Khairuddin and Ms Angie Ang Ai Hoon were appointed as Independent Non-Executive Directors on 1 August 2013.

On August 16, 2013 Mr. Ahmad Ridzal Bin Ahmad was appointed as the Chief Executive Officer.

• novemberIpoh City Development Sdn Bhd (ICDSB) and Menteri Besar Incorporated (MB Inc.) have joined forces to build a green, mixed-use project in Kinta Lake District, with a gross development value of RM2.18 billion.



Annual Report 2013

‘‘

Corporate reSponSIbIlIty polICy

We look to the following principles to guide us in our daily operations in order to fulfill our role as a responsible corporate citizen. We have also in place Corporate Governance, Risk Management, Quality, Environment and Health & Safety Policy to manage and support our CR practices.

relIable marketplaCe praCtICeS

• We are committed to complying with legal and regulatory requirements in all our activities, and we strive for continuous improvement in all our business practices.

• We actively promote a strong, healthy and safe culture within our supply chain, ensuring a safe and conducive working environment at all our project sites and the places where our employees and other business associates work.

• We promote sustainable construction and design

in our work to minimise any negative impact on the environment and society.

• We endeavor to engage actively with all stakeholders by anticipating and satisfying stakeholders’ needs, engaging in ethical procurement practices, and continuing to deliver and create value for our shareholders.

faIr workplaCe praCtICeS

• We uphold equal opportunities in all areas of work opportunities.

• We are committed to improving the quality of life of our employees through good remuneration packages, staff benefits and personal development programmes.

• We strive to cultivate and maintain a conducive working environment and healthy working culture at all times.

• We practice open-door communication between employees and management.

Corporate Responsibility

‘‘Putrajaya Perdana Berhad emphasizes the importance of positively contributing to our essential environment which involves the marketplace, workplace, environment and community.

We adopted the Japanese kaizen which advocates that we apply the principles of continuous improvement to every level of our CR implementation.


Annual Report 2013

SuStaInable envIronment praCtICeS

• We seek to protect and preserve the environment by promoting and maintaining best practices in our activities.

• We reduce waste through 3R (Reuse, Reduce and Recycling) whenever possible to enhance our waste management practices.

• We promote energy efficiency and sustainable development in all our products and services to reduce global carbon footprint.

• We take into consideration the value of all biodiversity within our construction sites to minimise any impact on the fauna and flora within the area.

ImpaCtful CommunIty praCtICeS

• We are committed to undertaking philanthropic efforts among the communities we operate in by supporting them in terms of monetary means and in kind with the overall aim of elevating their lives.

• We are involved in upgrading the standard of living of the community around our office and work sites via a structured community programme.

our CommItment towardS health & Safety (“h&S”)

We strongly believe that Health & Safety (“H&S”)has become a vital part of our organization as our key business, which is structural construction, is a dangerous working environment, and therefore H&S is given the highest priority in our operations.

The management has openly accepted full responsibility of providing a safe working environment to our employees. At the same time, employees are expected to take full responsibility of working in accordance with the H&S standards and practices set by the Group and

monitored by our H&S Committee.

At PPB, we believe that we need to work as a team to ensure safety and health. Therefore, the Group emphasizes on the 5-S Practice endorsed by SIRIM and I5SA where everyone has a role to play in promoting safety and health at the workplace and taking every reasonable measure to assure safe working environment. Our H&S Committee continuously play a critical role in introducing and improving safety measures to minimize workplace hazards. Trainings and workshops on tool and machinery handling are carried out extensively at all construction sites to ensure proper handling of equipment to reduce possibility of injuries.

Management also regularly conduct Site Safety Audits, Hazard Identification Risk Assessment Determining Control (“HIRADC”) and quarterly meetings on H&S related problems to ensure that H&S issues were given immediate attention and resolved before any mishap takes place. All tools and machinery are also routinely checked and serviced to ensure they are in prime working condition to avoid injuries and also downtime.

h&S related aCtIvItIeS held In 2013:

1. Company Health Safety Security Environmental Committee (CHSSEC) Meeting

2. Site Safety Assessment (modified from CIDB’s SHASSIC)

3. Site Safety & Health Programme (eg. Induction, Tool Box, Fire Extinguisher Demo etc)

4. Training (eg. First Aider)4. Internal Health & Safety Audit (combined with Q &

E)5. Management Review Board Meeting (combined

with Q & E)

Corporate Responsibility (cont’d)


Annual Report 2013

6. Health & Safety Audit by SIRIM (combined with Q & E)

7. 5-S Blue Belt Visit/Audit and 5-S Award (Quarterly)8. 5-S Audit by Prof Sam /SIRIM (Westport and Ara-

Greens)

our engagement wIth employeeS

In PPB, we value our employees’ contribution towards the company’s success. Just like any other service industry, having a talent with the right attitude and skills is the primary factor in successfully delivering of quality products within a given time.

Throughout 2013, our Human Resource Department had aggressively rolled out various trainings and internal communication activities to improve our employees’ technical knowledge and to encourage closer communication between employees and management. Particular trainings and workshops were carried out to help our employees grow and move upward in their career path. Teambuilding activities were also arranged

to boost each employee’s potential, increase self-confidence, trust amongst colleagues and readiness for new challenges.

human CapItal development

The company prides itself with its pool of talented and skilled workers, which produces a diversity of ideas and creativity at Putrajaya Perdana. It is this dynamic depth of ideas and expertise, ingrained at every level, which turns visions into reality and creates outstanding landmarks for our clients.

PPB also fosters a continuous learning culture. This was further enhanced with the Group-wide implementation of 5S in 2013. It is only through constant self-improvement and upgrading via trainings, workshops and seminars, that every employee can remain competitive in the market. We strongly believe that with this principle, the Group will have the added advantage to secure profitable projects which require skilled builders with advanced construction technology and expertise.



Annual Report 2013

reCognISIng employeeS ContrIbutIonS

Every effort contributed towards growing the Group will not pass unnoticed in PPB. Every employee’s contribution in the area of Health & Safety, operational procedures, innovations and improvements for the betterment of the Group will be recorded and rewarded accordingly.

1. Good Action Awards (“GAA”)

GAA is one of the most sought after employee awards in the Group. Besides the stringent qualifying procedure, this cash award is well-recognized for an employee’s contributions towards the furtherance of the Group. It is judged based on 5 categories, Standard Based Management System including 5-S, People’s Growth, Problem Solving and Innovation, Productivity and Service Excellence, Company Image and Branding.

For GAA 2013, a total of 30 nominations were received and three teams walked away with the first three prizes and another three with the consolation prizes.

2. Long Service Awards

PPB’s history dates back to 1986, and over these years, the Group has grown leaps and bounds, strongly supported by a team of loyal employees who went through thick and thin to see the Group grow from a humble beginning to its current position as a premier builder especially in energy efficient buildings in the country.

Therefore, the Group continuously reward its staff who stayed by the Group all these years with a

Long Service Award. The award is given during Annual Dinner to staff who has served the Group for 20 long and dedicated years. For 2012, two employees received this award. To date, we have about 14 employees who have already served the Group for more than 20 years.

3. Non-utilization of Staff Medical Claims Award

PPB appreciates those employees who serve the company with their utmost effort and as such, the company awards RM300 cash to those who had never utilized their Staff Medical Claims.

4. Non-utilization of Medical Leave Award

To encourage the employees to give their full commitment, PPB offers the Non-utilization of Medical Leave Award to those employees who had never utilized their medical leave.

buIldIng a work-lIfe balanCe Culture

We encourage our employees to practice a work-life balance to ensure their work productivity and health are both excellent. Realizing this, Kelab Sukan Putrajaya Perdana Berhad (“KSPPB”) was formed to inculcate a work-life balance culture for the Group’s employees.

It is the nature of the industry where the employees regularly work for long hours. By establishing this KSPBB, it is expected that the employees could use this as a platform for them to take a break from their daily routine and socialize with other colleagues.

KSPPB has organized several interactive and sport activities for all staffs in Head Office, Site Offices, and the neighborhood community.



Annual Report 2013

employee dIalogue

PPB organised its inaugural dialogue with employees in 2013 to receive the voices of grass-root employees. This is because the Group wanted to know the heartbeat of the employees besides creating a platform for the employees to convey and highlight their concern to the top management directly and have a better understanding of the Group’s direction.

A series of group dialogues were organized at Head Office and Site Offices where Executive Chairman, Dato’ Rosman Abdullah hosted the dialogues which covered employees’ concerns and suggestions to move the Group forward.

balanCe SCoreCard awareneSS brIefIng

On 11 November 2013, HR Department organized a Balance Scorecard Awareness Briefing, aimed to create awareness and common understanding of balance scorecard and to prepare for the focus groups on Key Performance Indicators (KPI) design.

In the briefing, PPB staffs were informed of the new objectives achieved during the recent “1 Vision, 1 Team” Management Retreat which includes the vision, mission, core values, goals and KPIs. The Corporate Scorecard across the four perspectives that PPB has set for the next three years were also clearly briefed to the employees.

aCtIvItIeS by kSppb for year 2013:-

activity Category number of participants (employees of ppb and external parties)Trip to Sg Lembing Employee Interaction 39

Chinese New Year Celebration Employee Interaction 400

Bowling Tournament 2013 Sports 60

Hari Raya Celebration Community and Employee Interaction 400

Annual Dinner 2013 Stakeholder Interaction 800

Group Exercises Sports 20

Recycling Campaign Environment Conservation Company-wide

Trip to Sg Lembing Employee Interaction 39

Chinese New Year Celebration Employee Interaction 400

Employee Dialogue with Executive Chairman



Annual Report 2013

our CommItment toward StakeholderS and CommunIty

PPB continues to play an active role in constant engagement with its stakeholders especially with its employees, customers and industry related organizations and authorities. Constant engagements with our stakeholders via formal and informal meetings enable us to exchange ideas, knowledge and technical know-how in the industry.

Besides, PPB has also established long tradition of social involvement, in particular through its corporate CR programmes to benefit the community and society in general. PPB has voluntarily taken up the responsibility to improve the livelihood of its surrounding community through various upgrading programmes such as improving the infrastructure of schools and charitable homes.

eaSy to aCCeSS CommunICatIon platformS for StakeholderS

PPB highly values the opportunity to communicate with our stakeholders and ensures that access to information that interests our stakeholders are easily available.

Although PPB is not a public-listed company, the Group continues to produce our annual report and half-yearly newsletters. These publications are aimed to regularly update our stakeholders’ about the Group’s progress.

Besides annual reports and newsletters, the Group also regularly maintains its website with the latest project updates, statistics, and activities.

Having a reputation of a premier green-builder, we are also frequently approached by undergraduates for interviews as part of their course curriculum. Besides the requests of responding to questionnaires, and interviews, we also frequently receive requests for field trips to assist their assignments and thesis requirements.

To improve communication with our business partners, employees, and surrounding community, PPB frequently organize corporate events such as the annual golf tournament, festive gatherings, annual dinner and other activities that bring our stakeholders together in an informal platform. We believe that through this informal setting, it further encourages sharing and exchanging of views and ideas.



Annual Report 2013

engagementS wIth government and ngoS

PPB engages with the Government agencies and NGOs in the industry mainly through membership participations by its subsidiaries. Among them are CIDB, MBAM, MGBC and REDHA. Being an active member in these NGOs has given PPB many opportunities to share industry know-how and exchange technical ideas among each other.

As one of the 14 core founders in Malaysia Green Building Confederation (“MGBC”) back in 2007, PPB was involved in the development of the Green Building Index rating tool for Malaysian buildings. Prior to this,

PPB lobbied hard with Government agencies back in 2000 to build sustainable buildings for their offices. As a result, we delivered three iconic green buildings in the country for the Ministry of Energy, Green Technology and Water; Malaysian Green Technology Corporation; and Malaysian Commission of Energy respectively.

PPB also supported the 2012 quarterly survey conducted by Bank Negara. We believe that our contribution towards the questionnaire is important in helping Bank Negara to obtain a more concrete outlook of the construction sector including raw material prices, labor market and work progress for construction jobs.

Chinese New Year celebration



Annual Report 2013

CarIng for the underprIvIleged

As a corporate member of the community, PPB realizes that it has a responsibility to lend a hand to the less fortunate and to contribute towards a common good of our society. As such, it has never stopped giving back to the society as PPB recognized that investing in our own community is another great way to give back to those who have helped support our businesses.

1. PPB Home Adoption Programme

For 2013, PPB rendered support to three charity homes which houses orphanages, the elderly, and people with special needs. PPB has customized its support to these homes according to their individual needs such as daily provisions, premises upgrading and visitations to boost morale of the residents.

In early 2013 during Chinese New Year, PPB showered the House of Hope and Light with joy and laughter. This old folks’ home which is located in Kajang had the ground floor area tiled up by PPB and its sub-contractor in the last quarter of 2012.

PPB also contributed RM5,000 for 40 under-privileged children at Pusat Jagaan Baitus Sakinah Wal Mahabbah, Kota Warisan, Selangor. This contribution will be used for the children’s school expenses in 2014.



Annual Report 2013

Contributions made towards the schools in 2013

name of School description of Contributions made value of Contribution in ringgit

SJK (T) Ladang West Country Barat, Sponsored transportation cost for RM7,260Kajang, Selangor Standard One underprivileged students

SJK © Chin Woo, Pudu, Sponsored a year’s tuition classes fees forWilayah Persekutuan 16 Standard Six underprivileged students RM7,200

SJK (T) Sungai Manggis, Banting, Sponsored lunches to 16 Standard Six RM5,520Selangor underprivileged students

We also visited Pertubuhan Kebajikan Skizofrenia Malaysia to celebrate Father’s Day with the patients. At the same time, PPB and its employees contributed various products mainly food items to meet their daily needs.

2. PPB School Adoption Programme

PPB initiated this programme in 2008 and has since contributed positively towards improving the infrastructure of the adopted schools. Besides that, the welfare of deserving and less fortunate students were also taken care of through financial aid which we hope to reduce the parents’ financial burden so that these children can achieve better academic results through extra tuition classes, provided meals and transportation.



Annual Report 2013

enhanCIng eduCatIonal opportunItIeS

1. PPB Scholarship

PPB upholds its belief in nurturing the young and giving opportunity to deserving Malaysian citizens to pursue higher education. Through its Scholarship Programme, PPB has helped many undergraduates to complete their higher education along the way. The scholarship also provides career opportunity for scholars to gain working experience at PPB and its subsidiary companies.

This Scholarship Award was first introduced in 2006 and to date, RM1.08 million has been awarded to almost 70 scholars. Successful scholars are selected among the local students with specific courses mainly Civil/Structural Engineering, Mechanical/Electrical Engineering, Quantity Surveying and Building/Construction Management. The students’ families’ financial background is also taken into account where priorities are given to those students who are financially challenged.



Annual Report 2013

2. Industrial Training Programme

In 2013, a total of 64 interns were trained under the PPB Internship Programme. These undergraduates who were mainly Year 3 students pursuing courses related to the construction industry such as civil engineering, quantity surveying and mechanical and electrical engineering were guided by appointed seniors at project sites throughout the programme.

3. Examination Excellence Reward Programme

This programme is to reward children of PPB’s employees who performed outstandingly in UPSR, PMR, SPM and STPM (or similar). The Group realizes that it is also important to support and reward the children of our own employees. The Group hopes with such reward, it will drive the parents to put more effort in nurturing their children to become high-valued citizens. For FY2013, a total of 16 students received the reward.



Annual Report 2013

Quality, Health, Safety and Environment Statement

We are committed to:

• Meet the quality requirement of our clients & customers;• Carry out our business in a manner that ensure the health and safety of our employees, workers, suppliers, sub-

contractors, clients, the public and other interested parties at all times, and• Carry out our business in a manner that preserves the environment at all times.

group polICy on QualIty

• To constantly enhance our Quality management System conforming to mS ISo 9001 Standards;• To continually improve our business processes and services via teamwork to meet our customers’ needs;• To derive realistic, practical and effective solutions to address issues we face;• To create and maintain a conducive work environment; and• To develop smart partnership with our business associates.

group polICy on oCCupatIonal health & Safety (ohS)

• To constantly enhance our ohS management System conforming to ohSaS 18001 Standards;• To comply with all applicable OHS legislations and other requirements;• To ensure a healthy and safe workplace for our employees and workers;• To provide continuous training and awareness in OHS practice to employees and workers; • To promote a healthy and safe workplace culture to minimize all forms of accidents and ill health; and• To continuously improve our OHS performance.

group polICy on envIronment

• To constantly enhance our environmental management System conforming to mS ISo 14001 Standards;• To comply with all applicable environmental legislations and other requirements;• To apply 3r practices at workplace i.e. to minimize the amount of resources and energy used / waste and

pollutants generated; and to maximize the frequency for reuse & recycle. • To create awareness, provide training and encourage participation in implementing good environmental

practices among our employees, workers as well as suppliers and subcontractors; and• To continuously improve the environmental friendliness of our businesses.

‘‘

‘‘Putrajaya Perdana Berhad’s aspiration to be the region’s Premier Builder builds very much on the Teamwork, Knowledge and Commitment of our people & business partners.


Annual Report 2013

Quality, Health, Safety and Environment Statement (cont’d)

To achieve our QHSE objectives, we practise……

two-way CommunICatIon

• Our day-to-day engagements at PPB involve regular dialogues and open debates at all levels to encourage free exchange of ideas and information.

• Frequent management-led meetings to strategize, plan, design and deliver higher performance and output.• Investment in Information Communication and Technology (“ICT”) system to promote company-wide online

contact.

ContInual Improvement

• Key critical processes are regularly identified for improvement.• Constant sourcing for new and improved techniques and technology to improve delivery speed, standards of

performance, and output quality.• Lessons learnt are captured for improved quality control and problem solving.• Regular audits to provide useful feedbacks.• Top management-led reviews and meetings are held regularly to provide guidance to all functional departments

and project teams.

benChmarkIng StandardS: ConQuaS, QlaSSIC & ShaSSIC

• We are trained in quality control and workmanship assessment standards since 2007.• We conduct regular in-house assessments using CONQUAS/QLASSIC/SHASSIC.• We invite independent bodies such as BCA and CIDB to carry out third-party independent assessments, in order

to benchmark our practice against the industry.

Certifications Company attained year attainedMS ISO 9001 (Quality) Putra Perdana Construction Sdn Bhd Since 2000

Putra Perdana Development Sdn Bhd Since 2000

MS OHSAS 18001 (Health & Safety) Putra Perdana Construction Sdn Bhd Since 2006

MS ISO 14001 (Environment) Putra Perdana Construction Sdn Bhd Since 2009

SIRIM/I5SO: 5-S Putra Perdana Construction Sdn Bhd Since 2010

CIDB “SCORE” Assessment Putra Perdana Construction Sdn Bhd Current Rating

(4-STARS rating)


Annual Report 2013

Quality, Health, Safety and Environment Statement (cont’d)

5-S praCtICe

• In 2009, we become the first Malaysian construction contractor to embark on the “5-S Practice” based on the standards developed by SIRIM and Hong Kong 5-S Association.

• All work sites are now required to carry out this practice as it serves as an important foundation for the Group’s QHSE Management.

• To date, we have 10 projects been certified by SIRIM/HK5SA for the implementation of 5-S Practice.• Our 5-S experience has been widely shared with fellow contractors.

5-S awardS

• The quarterly 5-S Award was introduced in 2012 to further enhances 5-S Practice at project sites.• The award is based Star rating system for five categories, namely Monthly Good Practice Photos; Producing

More Green Belts; Audit Team Review; 3rd Party Recognition and Leadership & 5-S Committee. • Certificates and cash are awarded to team based on the number of Stars received.

good aCtIon award (“gaa”)

• GAA was introduced in 2006 to encourage all employees to be proactive and creative in carrying out their duties in workplace.

• The award is opened to all employees in the Group.• It is meant to be a simple way to show our appreciation for the extra miles our People have taken in their day-to-

day commitment to work.


Annual Report 2013

Statement on Corporate Governance

The Board of Directors is committed to ensure that the standards of corporate governance are practised throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholders value and the performance of the Group.

The Board believes that observance with statutory requirements and market regulations are pivotal to sound corporate governance. A good corporate governance is fundamental to the long term prosperity of the Group. Hence, the Board is continuously dedicated to evaluate the Group’s corporate governance practices and procedures to ensure the principles and best practices in corporate governance as promulgated by the Malaysian Code on Corporate Governance (“the Code”) is applied and adhered to in the best interests of its stakeholders.

This disclosure statement sets out the manner in which the Group has applied and complied with the principles of the Code throughout the financial year.

1.0 board of dIreCtorS

PPB is led by a group of members from diversified background, which comprises of a wide spectrum of skills and experiences in the field of construction, business management, investment, finance, legal, banking and accounting.

The Board has the overall responsibility for effective performance and control of the Company and the Group, whereby collective decision and close monitoring is conducted on issues relating to strategic direction, formulation of policies, significant resource utilisation and investments of the Group. The Board also recognises its role in implementing an appropriate system of risk management and ensuring the adequacy and integrity of the Company’s system of internal control.

1.1 Composition of the board

The Board currently has four (4) members comprising one (1) Executive Director designated as Executive Chairman and three (3) Independent Non-Executive Directors. The Board is taking the necessary steps to enlarge its Board composition.

The Board members have vast and diverse experiences in the areas of finance, industry-specific technical knowledge, commercial and general management, which has been the key to charting the direction of the Group.

The Board believes that this composition of members is well-balanced which reflects the required mix of skills, background and specialisation and it fairly reflects the investment of minority shareholders. Brief backgrounds of each of the Directors are presented on Pages 9 to 10 of this Annual Report.

The Independent Non-Executive Directors play a key role in providing unbiased and independent views, advice and contributing their knowledge and experience towards the formulation of policies and in the decision making process. The Board structure ensures that no individual or group of individuals dominates the Board’s decision-making process.

1.2 duties and responsibilities

The Board is fully aware of its role in charting the strategic direction, development and control of the Group and has adopted the specific responsibilities that are listed in the Code, which facilitates the discharge of the Board’s stewardship responsibilities.

The Board has assumed the following responsibilities in discharging its stewardship:-

• Review and adopt a strategic plan for the Group.• Oversee and evaluate the conduct of the Company’s business.• Identify and manage principle risks.• Succession planning.• Review adequacy and integrity of the Company’s internal control system and management information

system, including compliance with applicable laws and regulations.


Annual Report 2013

Statement on Corporate Governance (cont’d)

The Board had also adopted matters reserved for the Board where it includes the review of long term objectives and strategic direction, yearly business plans and budget, dividend policy, system of internal control and risk management, major capital projects, investments or contracts and issuance of new securities.

There is a clear division of responsibilities between the roles of the Chairman and the chief executives. The Chairman is overseeing the business operations on the Group basis while the Chief Executive Officer of subsidiaries (CEOs) are to ensure that there is equilibrium of power and authority in managing and directing the business of the subsidiaries. The Chairman serves as the primary link between the Board and the Management. The Chairman is responsible for the orderly conduct and management of the Board and provides leadership to the Board and ensures that the Board works effectively and discharges its responsibilities. The CEOs oversees the day-to-day management of the subsidiaries’ business and operations, developing the business strategies, implementation of policies and strategies adopted by the Board and is accountable to the Board for all authorities delegated to the Management. These key positions are held by separate individual directors.

The Independent Non-Executive Directors provide considerable depth of knowledge collectively gained from experiences in a variety of public and private companies. The Independent Non-Executive Directors are independent of management and free from any business or other relationships, which could materially interfere with the exercise of their independent judgement. They provide unbiased and independent views in ensuring that the strategies proposed by the management are fully deliberated and examined, provide an effective check and balance to the Board’s decision making process in the interest of shareholders, employees, customers, and the many communities in which the Group conducts its business.

To facilitate effective discharge of responsibilities, various board committees were established. The board committees are chaired by Independent Non-Executive Directors except the EXCO which is chaired by the Executive Chairman. Details of the board committees and their respective responsibilities are provided in Section 2 of this Statement.

1.3 board meetings

During the financial period ended 31 December 2013, the Board met six (6) times, where they have deliberated and considered significant matters, amongst others, the Group’s financial results, acquisitions and disposals, Group’s operating performances and business direction of the Group.

The Board met six (6) times during the financial year and the attendance of each Director is as follows :

name of director designation no. of meetings attended

Dato’ Rosman bin Abdullah Executive Chairman, 6/6 Non-Independent Executive Director

Angie Ang Ai Hoon Independent Non-Executive Director 2/2 (Appointed on 1 August 2013)

Dato’ Mohammed Azhar bin Independent Non-Executive Director 2/2 Osman Khairuddin (Appointed on 1 August 2013)

Monica Oh Chin Chin Non-Independent Non-Executive Director 6/6 (Resigned on 28 March 2014)

Ishak bin Ahmad Non-Independent Non-Executive Director 5/6 (Resigned on 28 March 2014)

Jerome Lee Tak Loong Independent Non-Executive Director Not applicable (Appointed on 28 March 2014)


Annual Report 2013


1.4 board appointment process

All nominees to the Board are considered by the Board, taking into account the required mix of skills and experience and other qualities.

1.5 re-election of directors

In accordance with the Company’s Articles of Association, all new Directors are subject to re-election at the Annual General Meeting (“AGM”) following their first appointment. The Articles also provide that all other Directors including the Executive Director are subject to re-election by rotation once at least every three years and re-election of Directors shall take place at each AGM. Directors over the age of seventy (70) are required to retire annually. A retiring Director shall be eligible for re-election. The re-election of Directors ensures that the shareholders have a regular opportunity to reassess the composition and effectiveness of the Board. YBhg’ Dato’ Rosman shall retire pursuant to Article 82 of the Company’s Articles of Association while YBhg. Dato’ Mohammed Azhar bin Osman Khairuddin, Ms Angie Ang Ai Hoon and Mr. Jerome Lee Tak Loong who were appointed during the period under review shall retire pursuant to Article 89 of the Company’s Articles of Association.

1.6 director’s training

The Group acknowledges that continuous education is important to ensure that Board members are kept up to date with developments in the Group’s industry and business environment. In this regard, the Board will ensure that all its members undergo the necessary training programs as prescribed by the regulatory and statutory bodies. They are provided with the opportunity for training and updates from time to time, particularly on relevant new laws and regulations, financial reporting, risk management and investor relations to equip themselves with the knowledge to effectively discharge their duties as Directors.

During the year, the Directors have attended various training programmes and seminars which were relevant to them in discharging their duties and responsibilities, such as:

• Bursa Malaysia - Advocacy Sessions on Corporate Disclosure for Directors• Invest Malaysia 2013• EY- Risk Management Training• World Islamic Economic Forum (WIEF)• The 18th Malaysian Capital Market Summit - ASLI• Tax Planning and Issue for Property • MFRS Update 2012/2013• MIA International Conference 2013 • KPMG Malaysian Tax Summit 2013 • MFRS Update 2013/2014 Seminar• IFRS Convergence Workshop for Property Development Industry• Directors Remuneration 2013 “The Best Practice” – MICG• Bursa Malaysia Sustainability Training for Directors Practitioners • Risk Awareness Programme -Tricor Roots

The Directors will continue to attend relevant training programmes to further enhance their skills and knowledge and fully equip themselves to effectively discharge their duties.

2.0 board CommItteeS

The Board has established the following committees to assist the Board in the discharge of their duties and responsibilities. The committees are provided with written terms of reference. The Chairman of the various committees reports the decision and outcome of the committee meetings to the Board.


Annual Report 2013


2.1 audit Committee

The report of the Audit Committee is set out on pages 50 to 53 of this Annual Report.

2.2 nomination Committee

The Board had during the Special Board Meeting held on 22 April 2014 established the Nomination Committee (“NC”). The NC comprises exclusively of Independent Non-Executive Directors.

The NC comprises of the following members :

Chairman : YBhg. Dato’ Mohammed Azhar bin Osman Khairuddin

Members : Ms. Angie Ang Ai Hoon Mr. Jerome Lee Tak Loong

The responsibilities of the NC are as follows:

i) To assess and recommend to the Board candidature for directors in the Company.ii) To recommend to the Board, Directors to fill the seats on Board Committees of the Companyiii) To review regularly the Board structure, size and composition and make recommendations to the Board

with regard to any changes.iv) To review annually the required mix of skills and experience and other qualities, including core competencies

which Non-Executive Directors should bring to the Board.v) To assess the effectiveness of the Board, committees of the Board and contributions of each individual

director of the Board.

2.3 remuneration Committee

The Board had during the Special Board Meeting held on 22 April 2014 formed the Remuneration Committee (“RC”). The RC consists exclusively of Independent Non-Executive Directors.

The members of the RC are as follows:

Chairman : Ms. Angie Ang Ai Hoon

Members : YBhg. Dato’ Mohammed Azhar bin Osman Khairuddin Mr. Jerome Lee Tak Loong

The RC was formed to assist the Board in determining and developing remuneration policy for Directors and to recommend the appropriate remuneration packages. It is the ultimate responsibility of the entire Board to approve the remuneration of these Directors.

The responsibilities of the RC are as follows :

i) To review and recommend to the Board the remuneration packages including the terms of employment of the Executive Directors, and to recommend to the Board the remuneration of the Executive Directors in all its forms, drawing from outside advice as necessary;

ii) To review and recommend to the Board the remuneration packages including the terms of employment of the Chief Executives, and to recommend to the Board the remuneration of the Chief Executives in all its forms, drawing from outside advice as necessary

ii) To recommend the remuneration levels of the Non-Executive Directors with reference to market practice.


Annual Report 2013

2.4 executive Committee

The Executive Committee (“EXCO”) is to assist the Board in discharging its responsibilities in respect of various matters or aspects that the Board mandates through more frequent meetings of a smaller number of appointed members of the Board and the Chief Executives of the Group who have the power to provide direction to the Management of the Company and to ensure the smooth and effective running of the Group.

The functions of the EXCO shall be :

i) To review and approve the Operation Manual, Human Resources Policy and terms and conditions relating to the engagement of consultants, contractors, legal or professional advisers of the Group;

ii) To implement all policies and decisions made by the Board, and to assist the Board in implementing the strategic plans and policies of the Group;

iii) To review the performance of the Group’s operating units; risk management issues and internal control process improvement and set the key performance indicators for the Board’s approval.

The EXCO comprises the following members :

1. YBhg. Dato’ Rosman bin Abdullah (Chairman)2. Mr. Jerome Lee Tak Loong (appointed on 9 April 2014)3. Mr. Goh Ceah Chuang4. Encik Ahmad Ridzal bin Ahmad 5. Mr. Sit Kam Hock6. Ms. Monica Oh Chin Chin (ceased as member on 28 March 2014)

The profile of the EXCO is set out on pages 11 to 13 of this Annual Report.

2.5 long term Incentive plan Committee

The Long Term Incentive Plan (“LTIP”) Committee has been appointed by the Board to administer the PPB LTIP in accordance with the objectives and LTIP’s By-laws thereof.

The LTIP Committee comprises the following members :

1. Mr. Jerome Lee Tak Loong (Chairman, appointed on 14 April 2014)2. Mr. Sit Kam Hock 3. Mr. Goh Ceah Chuang4. Ms. Anna Maria Verghis, Head of Human Resource. 5. Ms. Monica Oh Chin Chin (ceased as the Chairman on 14 April 2014)

3.0 dIreCtorS’ remuneratIon

The determination of the remuneration of Directors is reviewed and assessed by the Remuneration Committee which takes into cognisance of market practices. The CEO is paid a salary, bonus and other benefits-in-kind. Remuneration of Non-Executive Directors is based on standard fixed fee, additional allowances are also paid in accordance with the number of meetings attended for Non-Executive Directors.

Remuneration is differentiated for the Chairman and other Non-Executive Directors to reflect their respective contribution and responsibility.

The Committee as a whole recommends the remuneration of Non-Executive Directors for the board’s and shareholders’ approval at the Annual General Meeting. No Director will participate in the deliberation and decision in respect of their own remuneration.



Annual Report 2013

Details of Directors’ Remuneration for the financial period ended 31 December 2013 are as follow:-

(a) Summary of Directors’ Remuneration is as follows:

Categories of remunerations executive non-executive directors directors (rm) (rm)

Salary and other emoluments 1,593,000 25,800 Fees - 179,167

Total 1,593,000 204,967

(b) The number of Directors whose total remuneration falls within the following categories:-

remuneration band number of directors executive non-executive

RM 50,000 and below - 2 RM 50,001 - RM 100,000 - 2 RM1,550,001 – RM1,600,000 1 -

Total 1 4

4.0 board ConduCt

4.1 availability of Information to the board

The Board has unrestricted and timely access to all information necessary for the discharge of its responsibilities. The Board is supplied with all relevant information and reports on financial, operational, corporate, regulatory, business development, and audit matters by way of Board papers or upon specific request for informed decision making and effective discharge of their duties. Notice of Board Meetings and board papers are provided to directors in advance so that meaningful deliberation and sound decisions can be made at Board meetings.

All Directors, whether as a full Board or in their individual capacity, have access to the advice and services of Company Secretaries, management representatives and, if deemed necessary, other independent professionals at the expense of the Group in the discharge of their duties.

4.2 relationship of the board with management

Senior Management staffs are invited to the Board and various committee meetings where necessary to provide additional information and insights to items being discussed.

All Board decisions are clearly recorded in the minutes. The Secretary will be advised to communicate to the Management the Board’s decisions for implementation of the decisions and policies.

In order to enhance the accountability of the Board and the Management, the Company has set in place a limit of authority which sets out the limit to which each level of management is authorised to approve.



Annual Report 2013

4.3 Conflict of Interest

The Directors have a continuing responsibility to determine whether they have a potential or actual conflict of interest in relation to any items being discussed. The Directors must also declare their interest if there is any related party transaction and abstain from deliberation and voting in respect of such transaction when considering such matter.

5.0 aCCountabIlIty and audIt

5.1 financial reporting

The Board of Directors aims to provide and present a balanced and understandable assessment of the Group’s financial performance and prospects through the annual financial statements, quarterly announcement to shareholders as well as Chairman’s Statement and Financial Review in the Annual Report. In this respect, the Audit Committee assists the Board by overseeing the Group’s financial reporting processes and the quality of the financial reporting.

5.2 directors’ responsibility Statement

The Directors are required under the Companies Act, 1965 (the Act), to ensure that the maintenance of accounting records and the preparation of the annual financial statements of the Company and of the Group are in accordance with the applicable Financial Reporting Standards in Malaysia which give a true and fair view of the state of affairs of the Company and the Group as at the end of the financial year and of the results and cash flows of the Company and the Group for the financial year.

In preparing the financial statements, the Directors have:

• applied appropriate and relevant accounting policies on a consistent basis;• made judgements and estimates that are reasonable and prudent;• prepared the financial statements on a going concern basis; and• kept appropriate accounting records to ensure that the financial statements comply with the provisions of

the Act.

5.3 Internal Control

The Board acknowledges its responsibility for maintaining a sound system of internal control to safeguard shareholders’ investment and the Group’s assets. Hence reviews to determine the adequacy and effectiveness of internal control systems were carried out during the year.

The Internal Control Statement of the Group is set out on pages 54 to 56 of this Annual Report.

5.4 relationship with auditors

The Company maintained a transparent and appropriate relationship with both the external and internal auditors through the Audit Committee. The role of the Audit Committee in relation to both the external and internal auditors is stated on pages 52 of this Annual Report.



Annual Report 2013

Audit Committee Report

The Audit Committee assists the Board in fulfilling its responsibilities in relation to the Group’s risk management and internal control system, internal and external audit functions, accounting policies and practices and financial reporting.

memberS of the audIt CommIttee

The Audit Committee comprises of three (3) members, all of whom are Independent Non-Executive Directors.

The members of the Audit Committee are:-

Angie Ang Ai Hoon Chairman Independent Non-Executive Director

Dato’ Mohammed Azhar bin Member Osman Khairuddin Independent Non-Executive Director

Monica Oh Chin Chin Member(resigned on 28 March 2014) Non-Independent Non-Executive Director

Mr. Jerome Lee Tak Loong Member(appointed on 14 April 2014) Independent Non-Executive Director

All members of the Audit Committee are Non-Executive Directors, the Chairman is an Independent Non-Executive Director and a member of the Institute of Chartered Accountants in England and Wales.

meetIng and attendanCe

The Audit Committee was established on 1 August 2013 and during the financial year under review, the Audit Committee convened two (2) meetings. Details of the attendance of Audit Committee meetings for the year are as follows:-

name of director no. of meetings attended %

Angie Ang Ai Hoon 2/2 100Dato’ Mohammed Azhar bin Osman Khairuddin 2/2 100Monica Oh Chin Chin (resigned on 28 March 2014) 2/2 100Jerome Lee Tak Loong (appointed on 14 April 2014) n/a n/a

The Audit Committee has met twice with the external auditors without the presence of the executive board members in the financial year under review.

Representatives of internal audit attended meetings held during the financial year. Other senior management members and representatives of the external auditors also attended meetings upon invitation to brief on specific issues.


Annual Report 2013

Audit Committee Report (cont’d)

termS of referenCe

The terms of reference of the Audit Committee are set out below:

1.0 Composition

1.1 The Audit Committee shall be appointed by the Board of Directors from amongst their number and shall consist of not less than three (3) members, all of whom must be non-executive directors, with a majority of them being independent directors.

1.2 The Board shall at all times ensure that at least one (1) member of the Audit Committee:

• must be a member of the Malaysian Institute of Accountants (MIA); or • if he is not a member of the MIA, he must have at least three (3) years’ working experience and:

(a) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967; or

(b) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants’ Act 1967; or

• fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad.

1.3 in the event of any vacancy in the Audit Committee resulting in the numbers of member being reduced to below three (3), the Board of Directors shall within 3 months appoint such number of new members as may be required to make up the minimum number of three (3) members.

1.4 No alternate director shall be appointed as a member of the Audit Committee.

1.5 The members of the Audit Committee shall elect a Chairman from amongst their number who shall be an independent director.

1.6 The term of office and performance of the Audit Committee and each of its members shall be reviewed by the Board at least once every three (3) years.

2.0 Quorum and procedures of meetings

2.1 The Audit Committee shall meet as the Chairman deems necessary but not less than four times a year.

2.2 The Audit Committee may, as and when deemed necessary, invite other Board members, senior management personnel and external independent professional advisers to attend the meetings.

2.3 In order to form a quorum in respect of a meeting of the Audit Committee, the majority of members of the Audit Committee present at the meeting must be independent directors.

2.4 The Secretary is responsible for sending out notices of meetings, preparing and keeping minutes of meetings and circulating the minutes of meetings to the Audit Committee.

2.5 The Audit Committee shall meet with the external auditors, without the executive board members present, at least twice in a financial year.


Annual Report 2013


3.0 authority

3.1 The Audit Committee shall have the authority to:

(a) investigate any matter within its terms of reference;(b) have the resources which are required to perform its duties;(c) have full and unrestricted access to any information pertaining to the Company;(d) have direct communication channels with the external auditors or person(s) carrying out the internal audit

function or activity (if any);(e) obtain independent professional or other advice; and(f) convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other

directors and employees of the Company, whenever deemed necessary.

4.0 duties and responsibilities

The Audit Committee shall review and report to the Board of Directors the following, where appropriate:

(a) Risk Management and Internal Control

• The adequacy and integrity of risk management, internal control and governance systems instituted in the Company and the Group

• Overall risk management processes, risk management policies and implementation of systems to manage risks

• The appointment or termination of the head of risk management unit• The report of the risk management unit

(b) Internal Audit

• The outsourced internal audit function will report directly to the Audit Committee• The adequacy of the scope, functions, competency and resources of the outsourced internal audit

function, and that it has the necessary authority to carry out its work• Appraise or assess the performance of the outsourced internal audit function• Approve any appointment or termination of the outsourced internal audit function• Take cognisance of the determination of any outsourced internal audit function and provide it with an

opportunity to submit its reasons for determining its function

(c) External Audit

• Review of the audit plan and scope of their audits, including any changes to the scope of the audit plan with the external auditors

• The external auditors’ audit report and their evaluation of the system of internal controls• The assistance given by the employees of the Company to the external auditors• The appointment and performance of external auditors, the audit fee and any question of resignation

or dismissal including any written explanations before making recommendations to the Board

(d) Audit Reports

• The internal audit programme, processes, the results of the internal audit programme, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function

• The major findings of internal investigations and related management responses


Annual Report 2013


(e) Financial Reporting

The quarterly results and the year end financial statements of the Company and the Group for recommendation to the Board of Directors for approval, focusing particularly on:

• Changes in or implementation of accounting policies and practices; • Significant and unusual events;• Compliance with accounting standards and other legal requirements; and • Going concern assumption

(f) Related Party Transactions

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

(g) Allocation of Share Options

Verification on the allocation of share options to ensure compliance with the criteria for allocation of share options pursuant to the share scheme for employees of the Group at the end of each financial year, if any.

(h) Other Functions

Any such other functions as the Audit Committee considers appropriate or as authorised by the Board of Directors.

aCtIvItIeS durIng the year

Summary of activities of the audit Committee

The Audit Committee had reviewed and deliberated the following matters during the year under review:

(a) the external auditors’ audit planning memorandum for the financial year ended 31 December 2013 and considered their proposed audit fees;

(b) discussed with the external auditors the overview of the audit process, updates of new developments on accounting standards issued by the Malaysian Accounting Standards Board;

(c) quarterly and annual financial reporting and made recommendation to the Board for approval;

(d) the outsourced Internal Auditors’ report, findings and areas for improvement by the management. Follow-up audits reports were also reviewed to ensure that appropriate actions are taken to improve the system of internal control and procedures;

(e) related party transactions of the Group and recurrent related party transactions entered during the financial year based on the disclosures submitted by the Management; and

(f) The quarterly reports of the enterprise risk management programme.

Statement on Internal audIt funCtIon

The Group outsourced its internal audit function to Audex Governance Sdn Bhd, a professional service provider firm to assist the Audit Committee in discharging its duties and responsibilities by executing independent reviews on the Group’s system of internal control on a systematic basis.

The activities carried out by internal audit during the year include execution of internal audits in accordance with the approved audit plan and reporting of the audit results, findings and follow-up actions to the Audit Committee on a quarterly basis.


Annual Report 2013

Statement on Risk Management and Internal Controlfor financial year ended 31 December 2013

IntroduCtIon

The Board of Directors (“the Board”) of Putrajaya Perdana Berhad (“PPB”) is pleased to present its Statement on Risk Management and Internal Control for the financial year ended 31 December 2013, which has been prepared in accordance with the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers (“the Guidance”).The statement below outlines the nature and scope of risk management and internal control of the Group during the financial year under review.

board reSponSIbIlIty

The Board acknowledges its overall responsibility for maintaining a sound system of risk management and internal control to safeguard shareholders’ investments and the Group’s assets as well as for reviewing the adequacy and integrity of such system, except for joint ventures and associate companies which are not under the control of the group.

However, as there are inherent limitations in any system of internal control, such system can only reduce but cannot eliminate the risks that may impede the achievement of the Group’s business objectives. Therefore, such internal control system can only provide reasonable and not absolute assurance against material misstatement or loss.

key elementS of the groupS rISk management and Internal Control SyStem

Key elements of the Group’s risk management and internal control system that have been established to facilitate the proper conduct of the Group’s businesses are described below.

1. Control environment

• organisation Structure & authorisation procedures The Group maintains a formal organisation structure with well-defined lines of reporting as well as clear

delegation of responsibilities and accountability within the Group. The Group also sets out roles and responsibilities, appropriate authority limits as well as structured review and approval procedures in order to enhance the decision making process and the internal control system of the Group.

• ISo procedures Clearly defined ISO procedures are in place and are undergoing constant improvements to ensure that they

continue to support the Group’s business activities as the Group continues to grow.

• monitoring and reporting procedures Appropriate infrastructures, controls, systems and people are in place throughout the Group’s businesses

to ensure operational risks are mitigated. Key organisational controls employed in managing operating risks include segregation of duties, transaction authorisation, monitoring of financial performance and management reporting.

• human resource policy Comprehensive and rigorous guidelines on employment, performance appraisal, training and retention

of employees are in place to ensure that the Group has a team of employees who are well trained and equipped with all the necessary knowledge, skills and abilities to carry out their roles and responsibilities effectively.

• annual budget In monitoring the performance of the Group, an elaborate annual budgetary planning and review process

is practised. This is to ensure that the performance of the various business units are monitored and benchmarked, and the interests of all stakeholders are safeguarded.


Annual Report 2013

Statement on Risk Management and Internal Control (cont’d)for financial year ended 31 December 2013

2. risk management framework

The Group has a structured risk management framework, which includes a risk management assessment process to identify significant risks and the mitigating measures thereof. The framework also addresses the compilation of risk register and specific risk profiles of each company in the Group Key risks relating to the Group’s operations, strategic and business directions are addressed at periodic management meetings. In addition, the responsibility of managing the risks of each department and projects lies with the respective Heads of Department and, Head of Project and Senior General Manager in-charge. During the periodic management meetings significant risks identified and the corresponding controls implemented are communicated to the Chief Executive Officer, Chief Finance Officer and Senior Management. The action plans and internal controls that Management has taken and/or is taking are documented and discussed in the Risk Committee Meetings.

3. Internal audit function

The responsibility for reviewing the adequacy and integrity of the internal control system has been delegated by the Board to the Audit Committee. The Audit Committee in turn assesses the adequacy and integrity of the Group’s internal control system based on reports from independent reviews conducted by the external auditors, internal auditors and the Management. Significant internal control matters are brought to the attention of the Audit Committee who will in turn highlights them to the Board.

The Group has outsourced its internal audit function to a professional services firm as part of its strategy to provide the Board with assurance on the adequacy and integrity of the Group’s system of internal control. The outsourced internal audit function focuses its review on areas which are related to the significant risks of PPB Group. The areas of review are set out in a risk based internal audit plan which has been approved by the Audit Committee.

During the financial year, scheduled reviews on the Group’s system of internal control were completed according to approved audit plan. Although a number of internal control weaknesses were identified, none of the weaknesses have resulted in any material losses, contingencies or uncertainties that would require separate a disclosure in this annual report.

The costs incurred in maintaining the outsourced internal audit function for the financial year ended 31 December 2013 amounted to RM87, 613.

4. management Style

Enhancing the Group’s ability to achieve its business objectives remains as the Board’s primary objective and direction in managing PPB Group. In ensuring that this objective is achieved, the Board will continue to rely on Senior Management to ensure that the performances of their businesses are within the agreed business strategies. The Board will in turn monitor the performances and profitability through the reports it received and its involvement in operational and strategic meetings. Matter arising which are significant in nature are brought to the attention of the Chief Executive Officer, who in turn, will direct these matters, if necessary, to the Board for its attention.

The Group continues to maintain its proven ‘open-door’ and ‘hands-on’ approach to allow for the efficient resolution of matters arising.

5. Information and Communication

Information critical to the achievement of the Company’s business objectives are communicated through established reporting lines across the Group. This is to ensure that matters that require the Board and Senior Management’s attention are highlighted for review, deliberation and decision on a timely basis.


Annual Report 2013

6. review & monitoring process

Regular management meetings are held to discuss and monitor the Group’s operations and performances, including meetings to discuss deviation of results against performance targets, with significant variances explained for and corrective action formulated and implemented, where necessary. In addition to the above, scheduled and ad-hoc meetings are held at operational and management levels to identify, discuss and resolve business and operational issues as and when necessary.

For the financial year ended 31 December 2013 the Group has investments in jointly controlled entities and associate companies. The Group’s interest in these companies is served through representation in the joint management committee or representation on the Board. This representation provided the Board with access to review and monitor the performance of these investments. The Board is provided with periodic reports and information on their activities.

ConCluSIon

In line with the Guideline, the Group Chief Executive Officer and Chief Financial Officer have provided assurance to the Board that the Group’s risk management and internal control systems have operated adequately and effectively, in all materials aspects, to meet Group’s objectives during the financial year under review.

The Board is of the view that the Group’s system of risk management and internal controls is adequate to safeguard shareholders’ investments and the Company’s assets. However, the Board is also cognizant of the fact that the Group’s system of internal control and risk management practices must continuously evolve to meet the changing and challenging business environment. Therefore, the Board will, when necessary, put in place appropriate action plans to further enhance the system of risk management and internal control.

This statement is made in accordance with the Board’s resolution dated 22 April 2014.

Statement on Risk Management and Internal Control (cont’d)for financial year ended 31 December 2013

Financial Statements

58 Directors’ Report

63 Statements of Financial Position

64 Statements of Profit or Loss and Other Comprehensive Income

65 Statements of Changes in Equity

68 Statements of Cash Flows

70 Notes to the Financial Statements

120 Statement by Directors / Statutory Declaration

121 Independent Auditors’ Report


Annual Report 2013

Directors’ Reportfor the year ended 31 December 2013

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the year ended 31 December 2013.

PrinciPal activities

The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries are disclosed in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

results

Group company rM’000 rM’000

Profit/(Loss) for the year attributable to: Owners of the Company 46,170 66,929 Non-controlling interests (1,163) -

Profit for the year 45,007 66,929

reserves and Provisions

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

dividends

Since the end of the previous financial year, dividends paid by the Company were as follows:

In respect of the financial year ended 31 December 2012

(i) second interim single-tier dividend of approximately 2.00 sen per ordinary share totalling RM2,810,000 on 13 March 2013.

In respect of the financial year ended 31 December 2013

(i) first interim single-tier dividend of approximately 2.05 sen per ordinary share totalling RM2,870,000 on 13 June 2013;

(ii) second interim single-tier dividend of approximately 14.28 sen per ordinary share totalling RM20,000,000 on 13 June 2013;

(iii) third interim single-tier dividend of approximately 12.55 sen per ordinary share totalling RM17,571,000 on 13 September 2013;

(iv) fourth interim single-tier dividend of approximately 1.69 sen per ordinary share totalling RM2,360,000 on 13 December 2013; and

(v) fifth interim single-tier dividend of approximately 8.777 sen per ordinary share totalling RM12,290,000 declared on 27 February 2014 and paid on 13 March 2014.


Annual Report 2013

Directors’ Reportfor the year ended 31 December 2013 (cont’d)

dividends (cont’d)

At the forthcoming Annual General Meeting, a final single-tier dividend in respect of the financial year ended 31 December 2013, of approximately 1.58 sen per ordinary share amounting to RM2,212,395 at book closure date, will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, when approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2014.

directors of the coMPany

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

Dato’ Rosman Bin Abdullah Dato’ Mohammed Azhar Bin Osman Khairuddin (Appointed on 1 August 2013) Ang Ai Hoon (Appointed on 1 August 2013)Jerome Lee Tak Loong (Appointed on 28 March 2014) Monica Oh Chin Chin (Resigned on 28 March 2014)Ishak Bin Ahmad (Resigned on 28 March 2014)Tan Vern Tact, alternate director to (Resigned on 28 March 2014) Monica Oh Chin Chin

directors’ interests

The interests and deemed interests in the shares and options over shares of the Company and of its related corporations (other than wholly-owned subsidiaries) of those who were Directors at financial year end (including the interests of the spouses or children of the Directors who themselves are not Directors of the Company) as recorded in the Register of Directors’ Shareholdings are as follows:

number of ordinary shares of rM0.50 each at at 1.1.2013 Bought sold 31.12.2013

Deemed interests in the Company: Dato’ Rosman Bin Abdullah 140,025,000 - - 140,025,000 number of options over ordinary shares of rM0.50 each at at 1.1.2013 Granted vested 31.12.2013

Interests in the Company: Dato’ Rosman Bin Abdullah - 393,000 - 393,000

number of ordinary shares of rM1.00 each at at 1.1.2013 Bought sold 31.12.2013

Interests in a related company Rosetta Stone Sdn Bhd: Dato’ Rosman Bin Abdullah 99 - - 99 Ishak Bin Ahmad 1 - - 1 Deemed interests in ultimate holding company Cendana Destini Sdn Bhd: Dato’ Rosman Bin Abdullah 10,000,000 20,500,000 - 30,500,000


Annual Report 2013


directors’ interests (cont’d)

By virtue of his deemed interests in the shares of the Company, Dato’ Rosman Bin Abdullah is also deemed interested in the shares of the subsidiaries during the financial year to the extent that Putrajaya Perdana Berhad has an interest.

None of the other Directors holding office at 31 December 2013 had any interest in the shares, options over shares and Long Term Incentive Plan of the Company and of its related corporations during the financial year.

directors’ Benefits

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by Directors or the fixed salary of a full time employee of the Company or of related corporations as shown in Note 20 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest.

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, other than those arising from the share options under the Company’s Long Term Incentive Plan.

issue of shares and deBentures

There were no changes in the authorised, issued and paid-up capital of the Company during the financial year.

There were no debentures issued during the financial year.

oPtions Granted over unissued shares

No options were granted to any person to take up unissued shares of the Company during the financial year, apart from the issue of options pursuant to the Long Term Incentive Plan (“LTIP”), which is governed by LTIP By-Laws.

At an extraordinary general meeting held on 31 May 2013, the Company’s shareholders approved the establishment of the LTIP to eligible Directors and employees of the Group.

The salient terms and features, including the vesting conditions of the LTIP are disclosed in Note 30 to the financial statements.

During the financial year, the Company awarded a total of 6,751,400 shares under the LTIP to its eligible Directors (including the Executive Chairman) and employees of the Group.

The Company has been granted an exemption by the Companies Commission of Malaysia from having to disclose in this report the names and details of holdings of persons to whom have been granted not more than 139,600 options during the financial year as required by Section 169(11) of the Companies Act, 1965.


Annual Report 2013


oPtions Granted over unissued shares (cont’d)

The names of the persons who were awarded LTIP shares of RM0.50 each of 139,600 or more during the financial year are as follows:

no of share options under the ltiP of rM0.50 each at Granted on atinterests in the company: 1.1.2013 31.5.2013 vested 31.12.2013

Goh Ceah Chuang - 434,700 - 434,700Dato’ Rosman Bin Abdullah - 393,000 - 393,000Sit Kam Hock - 388,900 - 388,900Wie Hock Kiong - 300,000 - 300,000Yong Khoon Seng - 233,200 - 233,200Yang Kon Bee @ Wong Kon Bee - 192,500 - 192,500Ong Eng Swee - 178,500 - 178,500Tang Yee Thong - 159,600 - 159,600Ng Lean Wu - 148,700 - 148,700Wong Chin Moo - 139,600 - 139,600

other statutory inforMation

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

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

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

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

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

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

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

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

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

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

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


Annual Report 2013

other statutory inforMation (cont’d)

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

In the opinion of the Directors, the financial performance of the Group and of the Company for the financial year ended 31 December 2013 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report.

suBsequent event

The details of the subsequent event are disclosed in Note 32 to the financial statements.

auditors

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

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

dato’ rosman Bin abdullah

ang ai hoon

Kuala Lumpur,

22 April 2014



Annual Report 2013

Statements of Financial Positionas at 31 December 2013

Group company note 2013 2012 2013 2012 rM’000 rM’000 rM’000 rM’000

assets Property, plant and equipment 3 41,137 37,953 - - Intangible assets 4 11,930 3,267 - - Investments in subsidiaries 5 - - 106,670 89,864 Land held for property development 6 54,279 47,592 - - Club memberships 493 280 - - Deferred tax assets 7 14,734 12,639 - -

total non-current assets 122,573 101,731 106,670 89,864

Inventories 8 - 2,785 - - Property development costs 9 2,182 11,579 - - Trade and other receivables 10 308,653 270,071 21,314 6,575 Other current assets 11 4,660 4,007 - - Current tax assets 986 951 228 178 Cash and cash equivalents 12 129,092 171,464 2,329 15,057

total current assets 445,573 460,857 23,871 21,810

total assets 568,146 562,588 130,541 111,674

equity Share capital 70,013 70,013 70,013 70,013 Share premium 18,518 18,518 18,518 18,518 Reserves 130,337 127,470 34,232 10,743

total equity attributable to owners of the company 13 218,868 216,001 122,763 99,274non-controlling interests 6,225 1,845 - -

total equity 225,093 217,846 122,763 99,274

liabilities Deferred tax liabilities 7 4 8 - -

total non-current liabilities 4 8 - -

Trade and other payables 14 323,407 316,837 7,778 12,392 Other current liabilities 15 17,021 18,101 - - Current tax liabilities 2,621 9,796 - 8

total current liabilities 343,049 344,734 7,778 12,400

total liabilities 343,053 344,742 7,778 12,400

total equity and liabilities 568,146 562,588 130,541 111,674

The notes on pages 70 to 119 are an integral part of these financial statements.


Annual Report 2013

Statements of Profit or loss and Other Comprehensive Incomefor the year ended 31 December 2013


Revenue 16 705,225 688,627 67,500 20,000Cost of sales (611,112) (609,984) - -

Gross profit 94,113 78,643 67,500 20,000Other income 3,677 2,401 - -Administrative expenses (38,647) (32,068) (973) (264)Selling and marketing expenses (440) (346) - -Other expenses (2,663) (14,740) (34) (60)

results from operating activities 56,040 33,890 66,493 19,676Finance income 17 9,232 9,328 416 1,016Finance costs 18 (2,997) (3,032) - -

Profit before tax 19 62,275 40,186 66,909 20,692Tax expense 21 (17,268) (14,123) 20 (139)

Profit for the year 45,007 26,063 66,929 20,553

other comprehensive income/(expense), net of taxitems that are or may be reclassified subsequently to profit or loss Foreign currency translation differences for foreign operations 137 (8) - -

total other comprehensive income/ (expense) for the year 137 (8) - -

total comprehensive income for the year 45,144 26,055 66,929 20,553

Profit/(loss) attributable to: Owners of the Company 46,170 27,468 66,929 20,553 Non-controlling interests (1,163) (1,405) - -

Profit for the year 45,007 26,063 66,929 20,553 total comprehensive income/ (expense) attributable to: Owners of the Company 46,307 27,460 66,929 20,553 Non-controlling interests (1,163) (1,405) - -

total comprehensive income for the year 45,144 26,055 66,929 20,553 Basic earnings per ordinary share (sen): 23 32.97 19.62



Annual Report 2013

Annual Report 2012

Statements of Changes in Equityfor the year ended 31 December 2013

attributable to owners of the company Non-distributable Distributable share non- share share option translation retained controlling totalGroup note capital premium reserve reserve earnings total interests equity rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

at 1 January 2012 70,013 18,518 - (117) 120,127 208,541 3,250 211,791 Total other comprehensive income for the year - foreign currency translation differences for foreign operations - - - (8) - (8) - (8)Profit/(loss) for the year - - - - 27,468 27,468 (1,405) 26,063

Total comprehensive (expense)/ income for the year - - - (8) 27,468 27,460 (1,405) 26,055 Dividend to owners of the Company 22 - - - - (20,000) (20,000) - (20,000)

Total transactions with owners of the Company - - - - (20,000) (20,000) - (20,000)

at 31 december 2012 70,013 18,518 - (125) 127,595 216,001 1,845 217,846


Annual Report 2013

Statements of Changes in Equityfor the year ended 31 December 2013 (cont’d)

attributable to owners of the company Non-distributable Distributable share non- share share option translation retained controlling totalGroup note capital premium reserve reserve earnings total interests equity rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

at 1 January 2013 70,013 18,518 - (125) 127,595 216,001 1,845 217,846 Total other comprehensive income for the year - foreign currency translation differences for foreign operations - - - 137 - 137 - 137Profit/(loss) for the year - - - - 46,170 46,170 (1,163) 45,007

Total comprehensive income/(expense) for the year - - - 137 46,170 46,307 (1,163) 45,144 Share-based payment under LTIP 30 - - 2,171 - - 2,171 - 2,171Dividends to owners of the Company 22 - - - - (45,611) (45,611) - (45,611)

- - 2,171 - (45,611) (43,440) - (43,440)Changes in ownership interest in subsidiaries - - - - - - 5,543 5,543

Total transactions with owners of the Company - - 2,171 - (45,611) (43,440) 5,543 (37,897)

at 31 december 2013 70,013 18,518 2,171 12 128,154 218,868 6,225 225,093



Annual Report 2013

Statements of Changes in Equityfor the year ended 31 December 2013 (cont’d)


attributable to owners of the company Non-distributable Distributable share share share option retained company note capital premium reserve earnings total rM’000 rM’000 rM’000 rM’000 rM’000 at 1 January 2012 70,013 18,518 - 10,190 98,721 Profit and total comprehensive income for the year - - - 20,553 20,553Dividend to owners of the Company 22 - - - (20,000) (20,000)

at 31 december 2012/ 1 January 2013 70,013 18,518 - 10,743 99,274 Profit and total comprehensive income for the year - - - 66,929 66,929Share-based payment transactions - - 2,171 - 2,171Dividends to owners of the Company 22 - - - (45,611) (45,611)

at 31 december 2013 70,013 18,518 2,171 32,061 122,763


Annual Report 2013

Statements of Cash Flowsfor the year ended 31 December 2013


cash flows from operating activities Profit before tax 62,275 40,186 66,909 20,692 Adjustments for: Finance income 17 (9,232) (9,328) (416) (1,016) Finance costs 18 2,997 3,032 - - Property, plant and equipment - depreciation 3 2,568 3,707 - - - written off 304 602 - - - net loss/(gain) on disposals 51 (536) - - Intangible assets - amortisation 4 694 514 - - - written off - 301 - - - loss on disposal - 2 - - Short term accumulating compensated absences (5) 43 - - Impairment loss on goodwill upon acquisition of subsidiaries - 1,158 - - Dividend income 16 - - (67,500) (20,000) Share-based payment under LTIP 30 2,171 - - - Reversal of impairment loss on receivables (1,795) (533) - - Impairment loss on receivables - 12,500 - -

operating profit/(loss) before changes in working capital 60,028 51,648 (1,007) (324) Change in land held for property development and property development costs 2,710 380 - - Change in development costs (1,261) - - - Change in inventories 2,785 - - - Change in trade and other receivables (31,149) 7,770 (1) (47) Change in trade and other payables 3,189 (6,256) 842 (230) Change in subsidiaries’ balances - - (4) (12,573) Change in other current assets and other current liabilities 617 (3,318) - -

cash generated from/(used in) operations 36,919 50,224 (170) (13,174) Interest received 3,740 4,751 155 513 Interest paid (9) (8) - - Income tax refunded 20 3 20 3 Income tax paid (26,597) (17,524) (58) (224)

net cash generated from/(used in) operating activities 14,073 37,446 (53) (12,882)


Annual Report 2013

Statements of Cash Flowsfor the year ended 31 December 2013 (cont’d)


cash flows from investing activities Acquisition of land 6 - (4,037) - - Acquisition of intangible assets 4 (449) (1,462) - - Acquisition of subsidiaries, net of cash acquired 31 (7,433) 1 (7,435) - Increase in investment in a subsidiary 5 - - (7,200) - Property, plant and equipment - proceeds from disposal 479 1,137 - - - acquisition 3 (8,772) (6,943) - - Purchase of club memberships (213) - - - Dividends received - - 47,571 34,625

net cash (used in)/generated from investing activities (16,388) (11,304) 32,936 34,625

cash flows from financing activities Non-controlling interest contribution 6,543 - - - Acquisition of non-controlling interest (1,000) - - - Dividends paid (45,611) (40,500) (45,611) (40,500)

net cash used in financing activities (40,068) (40,500) (45,611) (40,500)

net decrease in cash and cash equivalents (42,383) (14,358) (12,728) (18,757)Effect of exchange rate fluctuations on cash held 11 264 - -Cash and cash equivalents at 1 January 171,464 185,558 15,057 33,814

cash and cash equivalents at 31 december 129,092 171,464 2,329 15,057

cash and cash equivalents

Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial position amounts:


Deposits placed with licensed banks 12 99,603 144,837 2,000 15,000Cash and bank balances 12 29,489 26,627 329 57

129,092 171,464 2,329 15,057



Annual Report 2013

Notes to the Financial Statements

Putrajaya Perdana Berhad is a private limited liability company, incorporated and domiciled in Malaysia. The addresses of the principal place of business and registered office of the Company are as follows:

Principal place of business registered office2nd and 3rd Floor, No. 5 3rd Floor, No. 5Jalan P16, Precinct 16 Jalan P16, Precinct 1662150 Putrajaya 62150 Putrajaya

The consolidated financial statements of the Company as at and for the year ended 31 December 2013 comprise the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”). The financial statements of the Company as at and for the year ended 31 December 2013 do not include other entities.

The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries are as stated in Note 5 to the financial statements. There have been no significant changes in the nature of these principal activities during the financial year.

The immediate and ultimate holding company is Cendana Destini Sdn Bhd, incorporated in Malaysia.

These financial statements were authorised for issue by the Board of Directors on 22 April 2014.

1. Basis of PreParation

(a) statement of compliance

The financial statements of the Group and the Company have been prepared in accordance with Financial Reporting Standards (“FRSs”) and the Companies Act, 1965 in Malaysia.

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

FRSs,InterpretationsandAmendmentseffectiveforannualperiodsbeginningonorafter1January2014• Amendments to FRS 10, Consolidated Financial Statements: Investment Entities• Amendments to FRS 12, Disclosure of Interests in Other Entities: Investment Entities• Amendments to FRS 127, Separate Financial Statements (2011): Investment Entities• Amendments to FRS 132, Financial Instruments: Presentation – Offsetting Financial Assets and

Financial Liabilities• Amendments to FRS 136, Impairment of Assets – Recoverable Amount Disclosures for Non-Financial

Assets• Amendments to FRS 139, Financial Instruments: Recognition and Measurement – Novation of

Derivatives and Continuation of Hedge Accounting• IC Interpretation 21, Levies

frss, interpretations and amendments effective for annual periods beginning on or after 1 July 2014• Amendments to FRS 2, Share-based Payment (Annual Improvements 2010-2012 Cycle)• Amendments to FRS 3, Business Combinations (Annual Improvements 2010-2012 Cycle and 2011-

2013 Cycle)• Amendments to FRS 8, Operating Segments (Annual Improvements 2010-2012 Cycle)• Amendments to FRS 13, Fair Value Measurement (Annual Improvements 2010-2012 Cycle and 2011-

2013 Cycle)


Annual Report 2013

Notes to the Financial Statements (cont’d)

1. Basis of PreParation (cont’d)

(a) statement of compliance (cont’d)

FRSs,InterpretationsandAmendmentseffectiveforannualperiodsbeginningonorafter1July2014(Cont’d)• Amendments to FRS 116, Property, Plant and Equipment (Annual Improvements 2010-2012 Cycle)• Amendments to FRS 119, Employee Benefits – Defined Benefit Plans: Employee Contributions• Amendments to FRS 124, Related Party Disclosures (Annual Improvements 2010-2012 Cycle)• Amendments to FRS 138, Intangible Assets (Annual Improvements 2010-2012 Cycle)• Amendments to FRS 140, Investment Property (Annual Improvements 2011-2013 Cycle)

FRSs,InterpretationsandAmendmentseffectivefromadateyettobeconfirmed• FRS 9, Financial Instruments (2009)• FRS 9, Financial Instruments (2010)• FRS 9, Financial Instruments – Hedge Accounting and Amendments to FRS 9, FRS 7 and FRS 139• Amendments to FRS 7, Financial Instruments: Disclosures – Mandatory Effective Date of FRS 9 and

Transition Disclosures

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

• from the annual period beginning on 1 January 2014 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2014.

• from the annual period beginning on 1 January 2015 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 July 2014.

The initial application of the other accounting standards, amendments and interpretations are not expected to have any material financial impacts to the current period and prior period financial statements of the Group and the Company.

The Group falls within the scope of IC Interpretation 15, Agreements for the Construction of Real Estate. Therefore, the Group is currently exempted from adopting the Malaysian Financial Reporting Standards (“MFRS”) and is referred to as a “Transitioning Entity”. Being a Transitioning Entity, the Group will adopt the MFRS and present its first set of MFRS financial statements when adoption of the MFRS is mandated by the MASB.

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2.

(c) functional and presentation currency

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

(d) use of estimates and judgements

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


Annual Report 2013


1. Basis of PreParation (cont’d)

(d) use of estimates and judgements (cont’d)

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 applying accounting policies that have significant effect on the amounts recognised in the financial statements other than those disclosed in the following notes:

• Intangible assets (Note 4) • Deferred tax assets/(liabilities) (Note 7) • Property development (Note 9) • Impairment of receivables (Note 10) • Construction contracts (Note 11 and 15) • Provision for foreseeable losses (Note 11) • Provisions for maintenance warranties (Note 14)

2. siGnificant accountinG Policies

The accounting policies set out below have been applied consistently to the periods presented in these financial statements and have been applied consistently by Group entities, unless otherwise stated.

(a) Basis of consolidation

(i) subsidiaries

Subsidiaries are entities controlled by the Company.

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

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

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

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

The change in accounting policy has been made retrospectively and in accordance with the transitional

provision of FRS 10. The adoption of FRS 10 has no significant impact to the financial statements of the Group.

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


Annual Report 2013


2. siGnificant accountinG Policies (cont’d)

(a) Basis of consolidation (cont’d)

(ii) accounting for 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.

Acquisitionsonorafter1January2011

For acquisitions on or after 1 January 2011, the Group measures goodwill at the acquisition date as:

• the fair value of the consideration transferred; plus• the recognised amount of any non-controlling interests in the acquiree; plus• if the business combination is achieved in stages, the fair value of the existing equity interest in

the acquiree; less• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities

assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. The consideration transferred does not include amounts related to the settlement of pre-existing

relationships. Such amounts are generally recognised in profit or loss.

Costs related to the acquisition, 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.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

Acquisition of subsidiaries that meets the conditions of a merger are accounted for using the merger method. Under the merger method of accounting, the results of entities or businesses under common control are presented as if the merger had been effected throughout the current and previous financial periods. The assets and liabilities combined are accounted for based on the carrying amounts from the perspective of the common control shareholder at the date of transfer.

On consolidation, the difference between the carrying value of the investment in the subsidiaries over

the nominal value of the share acquired is taken to merger reserve and regarded as a non-distributable reserve. Merger deficit is set-off against suitable reserves on the consolidated financial statements.

(iii) acquisitions of non-controlling interests

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


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(a) Basis of consolidation (cont’d)

(iv) loss of control

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any non-controlling interests and the other components of equity related to the former subsidiary from the consolidated statement of financial position. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

(v) non-controlling interests

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

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

(vi) transactions eliminated on consolidation

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

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

(b) foreign currency

(i) foreign currency transactions

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

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

Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the

end of the reporting 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 for differences arising on the retranslation of available-for-sale equity instruments or a financial instrument designated as a hedge of currency risk, which are recognised in other comprehensive income.


Annual Report 2013



(b) foreign currency (cont’d)

(ii) operations denominated in functional currencies other than ringgit Malaysia

The assets and liabilities of operations denominated in functional currencies other than RM are translated to RM at exchange rates at the end of the reporting period. The income and expenses of foreign operations are translated to RM at exchange rates at the dates of the transactions.

Foreign currency differences are recognised in other comprehensive income and accumulated in the translation reserve in equity. When a foreign operation is disposed of, the cumulative amount in the translation related to that foreign operation is reclassified to profit or loss as part of the profit or loss on disposal.

(c) financial instruments

(i) initial recognition and measurement

A financial asset or a financial liability is recognised in the statement of financial position when, 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 value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.

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 risks of the host contract and the host contract is not categorised at fair value through profit or 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

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

Financialassets

(a) Financialassetsatfairvaluethroughprofitorloss

Financial assets at fair value through profit or loss category comprises financial assets that are held for trading, including derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial assets that are specifically designated into this category upon initial recognition.

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

Other financial assets categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss.

At the reporting date, the Group and the Company do not have any financial assets at fair value through profit or loss.


Annual Report 2013



(c) financial instruments (cont’d)

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

Financialassets(Cont’d)

(b) Held-to-maturityinvestments

Held-to-maturity investments category comprises debt instruments that are quoted in an active market and the Group or the Company has the positive intention and ability to hold them to maturity.

Financial assets categorised as held-to-maturity investments are subsequently measured at amortised cost using the effective interest method.

At the reporting date, the Group and the Company do not have any held-to-maturity investments.

(c) Loansandreceivables

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. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

(d) Available-for-salefinancialassets

Available-for-sale category comprises investment in equity and debt securities instruments that are not held for trading.

Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Other financial assets categorised as available-for-sale are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair value hedges which are recognised in profit or loss. On derecognition, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss.

Interest calculated for a debt instrument using the effective interest method is recognised in profit or loss.

At the reporting date, the Group and the Company do not have any available-for-sale financial assets.

All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment (see Note 2(l)(i)).


Annual Report 2013




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

Financialliabilities

(a) Financialliabilitiesatfairvaluethroughprofitorloss

Financial liabilities at fair value through profit or loss category comprises financial liabilities that are derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial liabilities that are specifically designated into this category upon initial recognition.

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

Other financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss.

At the reporting date, the Group and the Company do not have any financial liabilities at fair value through profit or loss.

(b) Otherfinancialliabilities

As at the reporting date, other financial liabilities of the Group and the Company comprised of trade and other payables, other current liabilities and amount due to subsidiaries.

Trade payables, other payables and amount due to subsidiaries are subsequently measured at amortised cost using the effective interest method.

Gains and losses on other financial liabilities are recognised in profit or loss when the liabilities are derecognised and through the amortisation process.

(iii) regular way purchase or sale of financial assets

A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned.

A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date, ie. the date that the Group and the Company commit to purchase or sell the asset.

(iv) derecognition

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


Annual Report 2013




(iv) derecognition (cont’d)

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

(d) Property, plant and equipment

(i) recognition and measurement

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, 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. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs.

When significant parts of an item of property, plant and equipment have different useful lives, they are

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

The gains or losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within “other income” or “other expenses” respectively in profit or loss.

(ii) subsequent costs

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

(iii) depreciation

Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. Significant components of individual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that component are depreciated separately.


Annual Report 2013



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

(iii) depreciation (cont’d)

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment except for those assets that are related directly to specific projects which are capitalised as part of construction contract costs. 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. The estimated useful lives of the property, plant and equipment for the current and comparative periods are as follows:

• Buildings 50 years • Machineries and construction equipments 5 years • Motor vehicles 5 years • Office equipment, furniture and fittings 5 years

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

For impairment policy, please refer to Note 2(l)(ii).

(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 leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

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

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 rewards of ownership are classified as operating leases and, except for property interest held under operating lease, the leased assets are not recognised in the statement of financial position. Property interest held under an operating lease, which is held to earn rental income or for capital appreciation or both, is classified as investment property.


Annual Report 2013



(e) leased assets (cont’d)

(ii) operating lease (cont’d)

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

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

(f) intangible assets

(i) Goodwill

Goodwill arises on business combinations is measured at cost less any accumulated impairment losses. In respect of equity-accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity-accounted investee.

(ii) other intangible assets

Intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less any accumulated amortisation and any accumulated impairment losses.

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

(iii) subsequent expenditure

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

(iv) amortisation

Amortisation is based on the cost of an asset less its residual value.

Intangible assets with indefinite useful lives are not amortised but are tested for impairment annually and whenever there is an indication that they may be impaired. Other intangible assets are amortised from the date that they are available for use.

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, except for those assets that are related directly to specific projects which are capitalised as part of construction contract costs.

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

• Software costs 3 years

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

For impairment policy, please refer to Note 2(l)(ii).


Annual Report 2013



(g) inventories

Inventories of completed properties are measured at the lower of cost and net realisable value. Cost is determined on the specific identification basis and includes costs of land, construction, development costs and appropriate overheads.

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

(h) construction contracts

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

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

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. Provision is made for all anticipated losses on construction work. Provision for maintenance warranties is made for expected or estimated repair costs for making good certain defects and damages during the warranty periods.

Contract revenue comprises the initial amount of revenue agreed in the contract and variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and they are capable of being reliably measured. Contract costs include all expenditure related directly to specific projects and an allocation of fixed and variable overheads incurred in the Group’s construction contract activities based on normal operating capacity.

When the total of costs incurred on a construction contract plus recognised profits (less recognised losses) exceeds progress billings, the balance is classified as amount due from customers on contracts in the statement of financial position. When progress billings exceed costs incurred plus recognised profits (less recognised losses), the balance is classified as amount due to customers on contracts in the statement of financial position.

(i) land held for property development

Land held for property development consist of land or such portions thereof on which no development activities have been carried out or where development activities are not expected to be completed within the Group’s normal operating cycle. Such land is classified as non-current assets and is stated at cost less accumulated impairment losses.

Land held for property development is reclassified as property development costs at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the Group’s normal operating cycle.


Annual Report 2013



(j) Property development costs

Property development costs comprise costs associated with the acquisition of land and all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities.

When the financial outcome of a development activity can be reliably estimated, property development revenue and expenses are recognised in profit or loss by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs.

Where the financial outcome of a development activity cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable will be recoverable. Property development costs on properties sold are recognised as an expense in the period in which they are incurred.

Any expected loss on a development project, including costs to be incurred over the defects liability period, is recognised as an expense immediately.

Property development costs not recognised as an expense is recognised as an asset and is stated at the lower of cost and net realisable value. The excess of revenue recognised in profit or loss over billings to purchasers is shown as accrued billings under other current assets in the statement of financial position and the excess of billings to purchasers over revenue recognised in the income statement is shown as progress billings under other current liabilities in the statement of financial position.

(k) cash and cash equivalents

Cash and cash equivalents consist of cash in hand, balances and deposits with banks and highly liquid investments which have an insignificant risk of changes in fair value. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts, if any.

(l) impairment

(i) financial assets

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

An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced either directly or through the use of an allowance account.

An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale financial asset has been recognised in other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity to profit or loss.


Annual Report 2013



(l) impairment (cont’d)

(i) financial assets (cont’d)

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale is not reversed through profit or loss.

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 profit or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.

(ii) other assets

The carrying amounts of non-financial assets (except for inventories, amount due from contract customers and deferred tax assets) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each period at the same time.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of non-financial assets or cash-generating units. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to group of cash-generating units that are expected to benefit from the synergies of the combination.

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

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

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (or a group of cash-generating units) and then to reduce the carrying amounts of the non-financial assets in the cash-generating unit (or a group of cash-generating units) on a pro rata basis.

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


Annual Report 2013



(m) share capital

Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.

Costs directly attributable to the issue of instruments classified as equity are recognised as a deduction from equity.

(n) employee benefits

(i) short term employee benefits

Short-term employee benefit obligations in respect of salaries and annual bonuses 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 if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(ii) defined contribution plans

The Group makes contributions to the statutory pension scheme as required by the law. Such contributions are recognised as an expense in profit or loss as and when incurred.

(iii) share-based payment transactions

The grant date fair value of share-based payment granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

The fair value of employee share options is measured using a binomial lattice model. Measurement

inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments (based on historical experience and general option holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value.

(iv) employees’ leave entitlements

Employees’ leave entitlements are recognised as an expense when services are rendered by employees that increase their entitlement to future compensated absences. The estimated liability is recognised based on the existing employees of the Group as at financial year end. Short term non-accumulating compensated absences such as sick leave, maternity and paternity leave are recognised when the absences occur.


Annual Report 2013


2. siGnificant accountinG Policies (cont’d) (o) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Maintenance warranties

A provision for maintenance warranties is recognised when the underlying project is completed. The provision is based on historical warranty data and a weighting of all possible outcomes against their associated probabilities. Provisions for maintenance warranties are reviewed at each reporting date and adjusted to reflect current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision will be reversed.

(p) revenue and other income

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

(i) construction contracts

Revenue from construction contracts is accounted for by the stage of completion method as described in Note 2(h).

(ii) sale of properties

Revenue from sale of properties is recognised based on the stage of completion method as described in Note 2(j).

Revenue from sale of completed properties is recognised upon the finalisation of sale and purchase agreements and when the risks and rewards of ownership have been transferred to the purchasers.

(iii) Building maintenance contract

Revenue from building maintenance contract is based on fixed rate in accordance to the terms as stipulated in the Maintenance Agreement. The revenue is recognised upon performance of work.

(iv) rental income

Rental income is recognised in profit or loss on a straight-line basis over the term of the lease. Rental income from subleased property is recognised as other income.

(v) dividend income

Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to receive payment is established.

(vi) interest income

Interest income is recognised as it accrues using the effective interest method in profit or loss unless collectability is in doubt which in this case, it is recognised on receipt basis.


Annual Report 2013



(q) Borrowing costs

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

Borrowing costs directly attributable to the acquisition, construction or production of qualifying 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 their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

(r) income tax

Income tax expense comprises current and deferred tax.

(i) current tax

Current tax is recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.

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

(ii) deferred tax

Deferred tax is recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.

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

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


Annual Report 2013



(r) income tax (cont’d)

(ii) deferred tax (cont’d)

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

A tax incentive that is not a tax base of an asset is recognised as a reduction of tax expense in profit or loss as and when it is granted and claimable. Any unutilised portion of the tax incentive is recognised as a deferred tax asset to the extent that it is probable that future taxable profits will be available against which the unutilised tax incentive can be utilised.

(s) earnings per ordinary share

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

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

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

(t) operating segments

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

(u) fair value measurement

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

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

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


Annual Report 2013


3. ProPerty, Plant and equiPMent

office Machineries equipment, and furniture construction Motor and construction Group land Buildings equipments vehicles fittings in-progress total rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

cost At 1 January 2012 13,229 9,101 77,511 14,593 11,435 - 125,869 Additions 828 - 2,474 1,773 780 1,088 6,943 Disposals - - (2,261) (1,994) (187) - (4,442) Written off - - (192) (780) (1,024) - (1,996)

At 31 December 2012/ 1 January 2013 14,057 9,101 77,532 13,592 11,004 1,088 126,374 Additions 21 2,120 4,768 735 666 462 8,772 Disposals - - (537) (1,315) (121) - (1,973) Written off - - (311) (391) (1,115) - (1,817)

At 31 December 2013 14,078 11,221 81,452 12,621 10,434 1,550 131,356

accumulated depreciation At 1 January 2012 21 2,054 71,526 5,884 8,620 - 88,105 Depreciation charge for the year - recognised in profit or loss 1 305 1,931 712 758 - 3,707 - capitalised in construction contract costs (Note 11) - - 1,067 406 371 - 1,844 1 305 2,998 1,118 1,129 - 5,551 Disposals - - (2,191) (1,536) (114) - (3,841) Written off - - (191) (218) (985) - (1,394)

At 31 December 2012/ 1 January 2013 22 2,359 72,142 5,248 8,650 - 88,421 Depreciation charge for the year - recognised in profit or loss 2 329 584 1,074 579 - 2,568 - capitalised in construction contract costs (Note 11) - - 1,535 280 371 - 2,186 2 329 2,119 1,354 950 - 4,754 Disposals - - (537) (789) (117) - (1,443) Written off - - (302) (129) (1,082) - (1,513)

At 31 December 2013 24 2,688 73,422 5,684 8,401 - 90,219


Annual Report 2013


3. ProPerty, Plant and equiPMent (cont’d)

office Machineries equipment, and furniture construction Motor and construction Group land Buildings equipments vehicles fittings in-progress total rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

carrying amounts At 1 January 2012 13,208 7,047 5,985 8,709 2,815 - 37,764

At 31 December 2012/ 1 January 2013 14,035 6,742 5,390 8,344 2,354 1,088 37,953

At 31 December 2013 14,054 8,533 8,030 6,937 2,033 1,550 41,137

3.1 land

Group 2013 2012 rM’000 rM’000

Included in the carrying amounts of land are: Freehold land 13,978 13,957 Leasehold land with unexpired lease period of more than 50 years 76 78 14,054 14,035

4. intanGiBle assets

software expressway development Group Goodwill costs concession costs total rM’000 rM’000 rM’000 rM’000 rM’000

cost

At 1 January 2012 - 3,376 1,156 - 4,532 Additions - 60 1,402 - 1,462 Disposal - (4) - - (4) Written off - (78) (301) - (379)

At 31 December 2012/ 1 January 2013 - 3,354 2,257 - 5,611 Acquisition through business combinations (Note 31) 7,811 - - 1,261 9,072 Additions - 205 244 - 449

At 31 December 2013 7,811 3,559 2,501 1,261 15,132


Annual Report 2013


4. intanGiBle assets (cont’d)

software expressway development Group Goodwill costs concession costs total rM’000 rM’000 rM’000 rM’000 rM’000

accumulated amortisation At 1 January 2012 - 1,763 - - 1,763 Amortisation for the year - recognised in profit or loss - 514 - - 514 - capitalised in construction contract costs (Note 11) - 147 - - 147 Disposal - (2) - - (2) Written off - (78) - - (78)

At 31 December 2012/ 1 January 2013 - 2,344 - - 2,344 Amortisation for the year - recognised in profit or loss - 694 - - 694 - capitalised in construction contract costs (Note 11) - 164 - - 164

At 31 December 2013 - 3,202 - - 3,202

carrying amounts At 1 January 2012 - 1,613 1,156 - 2,769

At 31 December 2012/ 1 January 2013 - 1,010 2,257 - 3,267

At 31 December 2013 7,811 357 2,501 1,261 11,930

development costs

A subsidiary of the Company is involved in the initial stage of developing and subsequently constructing a mini hydro power plant. Currently, all associated costs attributable to this project are recognised as development costs until the project reaches construction stage.

5. investMents in suBsidiaries company 2013 2012 rM’000 rM’000

At cost: Unquoted shares 106,670 89,864

On 16 December 2013, the Company has further subscribed 7,199,998 shares in Putra Perdana Expressways Sdn Bhd (“PPE”) for cash consideration of RM7,199,998.

Acquisitions of subsidiaries during the year are further explained in Note 31.


Annual Report 2013


5. investMents in suBsidiaries (cont’d)

Details of the subsidiaries are as follows:

effective ownership country of interest and name of subsidiary incorporation Principal activities voting interest 2013 2012 % %

(i) subsidiaries of Putrajaya Perdana Berhad Putra Perdana Construction Malaysia Construction 100 100 Sdn Bhd Putra Perdana Development Malaysia Property development, 100 100 Sdn Bhd property management and investment holding Putra Perdana Expressways Sdn Bhd Malaysia Investment holding 100 100 Misi Serantau Sdn Bhd Malaysia Investment holding 100 -

(ii) subsidiaries of Putra Perdana development sdn Bhd Perdana Land Development Malaysia Dormant 100 100 Sdn Bhd Sarjana Sejati (M) Sdn Bhd Malaysia Property development 100 100 Senandung Budiman Malaysia Property development 100 100 Sdn Bhd and construction Ipoh City Development Malaysia Property development 100 - Sdn Bhd Time Vantage Sdn Bhd Malaysia Investment holding 57.14 - (iii) subsidiaries of Putra Perdana expressways sdn Bhd Saluran Arena Sdn Bhd Malaysia Expressway concessionaire* 70 60 Infra Satin Sdn Bhd Malaysia Investment holding 100 100 (iv) subsidiary of infra satin sdn Bhd Trek Satin Sdn Bhd Malaysia Dormant 60 60 (v) subsidiary of Misi serantau sdn Bhd (note 31) Kuasa Sezaman Sdn Bhd Malaysia Mini hydro power plant 70 - concessionaire*


Annual Report 2013


5. investMents in suBsidiaries (cont’d)

Details of the subsidiaries are as follows:

effective ownership country of interest and name of subsidiary incorporation Principal activities voting interest 2013 2012 % %

(vi) subsidiary of time vantage sdn Bhd (note 31) Blue Ocean Master Sdn Bhd Malaysia Property development* 70 - (vii) subsidiary of Blue ocean Master sdn Bhd (note 31) Brilliant Corridor Sdn Bhd Malaysia Property development* 50 - * The physical construction/development has yet to commence as at year end.

For the financial year ended 31 December 2013, all subsidiaries are audited by KPMG.

6. land held for ProPerty develoPMent

leasehold freehold development development Group land land rights costs total rM’000 rM’000 rM’000 rM’000 rM’000 At 1 January 2012 - 36,845 - 18,056 54,901 Additions 4,037 - - 277 4,314 Transfer to property development costs (Note 9) - (4,967) - (6,656) (11,623)

At 31 December 2012/ 1 January 2013 4,037 31,878 - 11,677 47,592 Additions - - 6,000 687 6,687

At 31 December 2013 4,037 31,878 6,000 12,364 54,279

(i) freehold land Pursuant to the Development Agreement dated 30 January 2004, a subsidiary of the Company is the

beneficial owner for the land held for development in Precinct 16 and Precinct 2, Putrajaya. The land titles of these lands are registered under Putrajaya Holdings Sdn Bhd, the Master Developer of Putrajaya.

(ii) leasehold land

A subsidiary of the Company is the beneficial owner for the land held in Mukim Ayer Panas, Daerah Jasin, Melaka. The leasehold term expires on 26 February 2100.


Annual Report 2013


6. land held for ProPerty develoPMent (cont’d)

(iii) development rights

This is in relation to the Development Agreement (“DA”) entered into between Menteri Besar Incorporated Negeri Perak Darul Ridzuan (“MBInc”) and a newly acquired subsidiary of the Company on 19 November 2013, for a Development Sum of RM46.06 million, of which RM6 million commitment fee has been paid upon the execution of the DA. The remaining Development Sum are to be paid on an annual basis over 7 payments to MBInc from year 2014 to year 2020. Pursuant to the DA, the subsidiary will develop the 264.37 acres land located at Kinta, Perak. The land is a 99-year lease expiring on 16 July 2111. MBInc is entitled to 20% audited net profit from the development.

7. deferred tax assets/(liaBilities)

recognised deferred tax assets/(liabilities)

Deferred tax assets and liabilities are attributable to the following:

assets liabilities net Group 2013 2012 2013 2012 2013 2012 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 Property, plant and equipment - - (3,328) (3,450) (3,328) (3,450) Payables 50 528 - - 50 528 Provisions 16,772 14,144 - - 16,772 14,144 Other items 1,236 1,409 - - 1,236 1,409

Tax assets/(liabilities) 18,058 16,081 (3,328) (3,450) 14,730 12,631 Set off of tax (3,324) (3,442) 3,324 3,442 - -

Net tax assets/(liabilities) 14,734 12,639 (4) (8) 14,730 12,631

Movement in temporary differences during the year

recognised recognised in profit at in profit at or loss 31.12.2012/ or loss at Group 1.1.2012 (note 21) 1.1.2013 (note 21) 31.12.2013 rM’000 rM’000 rM’000 rM’000 rM’000 Property, plant and equipment (3,898) 448 (3,450) 122 (3,328) Receivables 2,640 (2,640) - - - Payables - 528 528 (478) 50 Provisions 4,912 9,232 14,144 2,628 16,772 Other items 1,396 13 1,409 (173) 1,236

5,050 7,581 12,631 2,099 14,730


Annual Report 2013


8. inventories

Group 2013 2012 rM’000 rM’000

Properties held for sale - 2,785

9. ProPerty develoPMent costs freehold development Group land costs total rM’000 rM’000 rM’000

cumulative property development costs At 1 January 2012 5,419 27,125 32,544 Costs incurred during the year 461 9,072 9,533 Transfer from land held for property development (Note 6) 4,967 6,656 11,623

At 31 December 2012/1 January 2013 10,847 42,853 53,700 Costs incurred during the year 83 24,702 24,785

At 31 December 2013 10,930 67,555 78,485 cumulative costs recognised in profit or loss At 1 January 2012 (4,808) (27,124) (31,932) Recognised during the year (1,806) (8,383) (10,189)

At 31 December 2012/1 January 2013 (6,614) (35,507) (42,121) Recognised during the year (4,316) (29,866) (34,182)

At 31 December 2013 (10,930) (65,373) (76,303) Property development costs at 1 January 2012 612 Property development costs at 31 December 2012/1 January 2013 11,579 Property development costs at 31 December 2013 2,182


Annual Report 2013


10. trade and other receivaBles


current trade Third parties 184,623 189,278 - - Less: Impairment loss - (10,027) - - 184,623 179,251 - - Stakeholders sum in respect of properties sold 10.1 3,194 1,329 - - Retention sums on contracts 10.2 84,338 74,331 - - 272,155 254,911 - - non-trade Deposits 15,263 4,994 - 50 Other receivables 10.3 33,735 22,666 814 503 Amount due from subsidiaries 10.4 - - 571 6,022 Dividend receivable - - 19,929 - Less: Impairment loss (12,500) (12,500) - - 36,498 15,160 21,314 6,575 308,653 270,071 21,314 6,575

10.1 Stakeholder sums in respect of properties sold in which collections are expected in future periods are recognised at amortised cost using effective interest method. The amount stated is net of the amortisation cost which is the difference between the amount receivable and the present value of the estimated future cash flow at the applicable discounting rates at the time of billings.

10.2 Retention sum receivables relating to construction contracts are unsecured, interest-free and collections are expected in future periods and are recognised at amortised cost using the effective interest method. The amounts stated are net of amortisation cost which is the difference between the contractual amounts receivable and the present value of the estimated future cash flows at the applicable discounting rate at the time of billings.

10.3 Included in other receivables is an amount of approximately RM3,015,000 (2012: RM4,008,000) which represents the amount due from the non-controlling interests to the Group.

10.4 Amount due from subsidiaries is non-trade in nature, unsecured and repayable on demand.


Annual Report 2013


11. other current assets

Group note 2013 2012 rM’000 rM’000

Amounts due from customers on contracts 11.1 4,660 3,327 Prepayments - 30 Accrued billings in respect of property development activities - 650 4,660 4,007

11.1 amount due from/(to) customers on contracts

Construction contract costs incurred to date 863,146 809,042 Add: Attributable profits 72,044 85,084 Less: Provision for foreseeable losses (21,497) (23,412) 913,693 870,714 Less: Progress billings (926,054) (885,488) (12,361) (14,774)

Represented by: Amounts due from customers on contracts 4,660 3,327 Amounts due to customers on contracts (Note 15) (17,021) (18,101) (12,361) (14,774)

The costs incurred to date on construction contracts include the following charges for the year.

Group note 2013 2012 rM’000 rM’000

Employee benefits expense 20 25,964 23,395 Depreciation of property, plant and equipment 3 2,186 1,844 Amortisation of intangible assets 4 164 147

12. cash and cash equivalents

Group company 2013 2012 2013 2012 rM’000 rM’000 rM’000 rM’000

Deposits placed with licensed banks 99,603 144,837 2,000 15,000 Cash and bank balances 29,489 26,627 329 57

129,092 171,464 2,329 15,057


Annual Report 2013


12. cash and cash equivalents (cont’d)

Included in cash and bank balances of the Group are amounts of RM695,000 (2012: RM797,000) held pursuant to Section 7A of the Housing Development (Control and Licensing) Act, 1966 and are restricted from use in other operations.

The weighted average effective interest rates of the deposits placed with licensed banks of the Group and the

Company are 3.15% and 2.97% (2012: 3.14% and 3.35%) per annum, respectively.

13. caPital and reserves

share capital

Group and company number number amount of shares amount of shares 2013 2013 2012 2012 rM’000 ’000 rM’000 ’000

Authorised: Ordinary shares of RM0.50 each At 1 January/31 December 100,000 200,000 100,000 200,000

Issued and fully paid: Ordinary shares of RM0.50 each At 1 January/31 December 70,013 140,025 70,013 140,025

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 and rank equally with regard to the Company’s residual assets.

share premium

This comprises the premium paid on subscription of shares in the Company over and above the par value of the shares.

translation reserve

Translation reserve represents the exchange differences arising from the translation of the financial statements of the foreign operations with functional currencies other than RM.

share option reserve

The share option reserve represents the equity-settled share options granted to employees. Further details are disclosed in Note 30 to the financial statements.


Annual Report 2013


14. trade and other PayaBles


trade Third parties 204,217 207,973 - - Retention sum payables 14.1 65,921 73,421 - - 270,138 281,394 - - non-trade Other payables 14.2 6,484 977 75 26 Accruals and provisions 14.3 46,785 34,466 870 77 Amount due to subsidiaries 14.4 - - 6,833 12,289 53,269 35,443 7,778 12,392 323,407 316,837 7,778 12,392

14.1 These amounts which are unsecured and non-interest bearing and are payable to contractors in future periods, are recognised at amortised cost using the effective interest method.

14.2 Included in other payables are advance payments received from clients prior to commencement of construction contract of approximately RM4,238,000 (2012: Nil) by a subsidiary of the Company. These advances are to be recouped progressively against progress claims for work done.

14.3 Included in accruals and provisions are provisions made in respect of maintenance warranties for construction projects undertaken by a subsidiary of the Company for expected or estimated repair costs for making good certain defects during the warranty periods.

Group 2013 2012 rM’000 rM’000

At 1 January 21,240 7,814 Provisions made during the year 10,539 15,318 Provisions used during the year (707) (300) Provisions reversed during the year (172) (1,592)

At 31 December 30,900 21,240

14.4 These are unsecured advances which arose from non-trade activities, are non-interest bearing and repayable on demand.


Annual Report 2013


15. other current liaBilities

Group note 2013 2012 rM’000 rM’000

Amounts due to customers on contracts 11.1 17,021 18,101

16. revenue Group company 2013 2012 2013 2012 rM’000 rM’000 rM’000 rM’000

Construction activities 655,636 672,777 - - Property development activities 49,589 14,538 - - Building maintenance - 1,312 - - Dividend income from subsidiary - - 67,500 20,000 705,225 688,627 67,500 20,000

17. finance incoMe


Interest income from: Financial institutions 4,144 5,415 416 1,016 Unwinding of discount* 5,088 3,913 - - 9,232 9,328 416 1,016

* Represents the effect of unwinding of discount due to passage of time of financial assets of the Group measured at amortised cost.

18. finance costs


Interest expense on: Bank overdrafts 10 8 - - Unwinding of discount* 2,987 3,024 - - 2,997 3,032 - -

* Represents the effect of unwinding of discount due to passage of time of financial liabilities of the Group measured at amortised cost.


Annual Report 2013


19. Profit Before tax


Profit before tax is arrived at after charging/(crediting): Auditors’ remuneration: - statutory audit current year - KPMG 162 138 25 25 - under/(over) provision in prior years - KPMG (2) 8 - 5 - other auditors - (13) - - - other services current year - KPMG 1 1 - - Property, plant and equipment - depreciation 3 2,568 3,707 - - - written off 304 602 - - - net loss/(gain) on disposals 51 (536) - - Intangible assets - amortisation 4 694 514 - - - written off - 301 - - - loss on disposal - 2 - - Net foreign exchange loss/(gain) 135 (2) - - Dividend income from subsidiary (unquoted) 16 - - (67,500) (20,000) Reversal of impairment loss on receivables (1,795) (533) - - Impairment loss on receivables - 12,500 - - Impairment loss on goodwill upon acquisition of subsidiaries - 1,158 - - Provision for foreseeable losses 11 - 23,412 - - Rental income - on premises (415) (396) - - - from letting of machinery (175) (217) - - Operating expenses: - minimum lease payments on motor vehicles and equipment 11 1 - - - minimum lease payments on buildings 226 304 - -


Annual Report 2013


20. eMPloyee Benefits exPense and key ManaGeMent Personnel coMPensation

employee benefits expense

Group 2013 2012 rM’000 rM’000 Recognised in profit or loss 25,927 20,213 Capitalised under construction contract costs incurred to date (Note 11) 25,964 23,395 51,891 43,608

Analysis: Wages and salaries 39,820 31,751 Defined contribution plan 5,455 4,239 Social security contributions 217 209 Employees’ leave entitlements - 132 Other benefits 4,228 7,277 Long term incentives 2,171 - 51,891 43,608

Included in the employee benefits expense of the Group are Executive Directors’ remuneration (including benefits-in-kind) amounting to RM1,733,000 (2012: RM1,401,000).

The key management personnel compensations are as follows:


Executive Director: - Remuneration (including benefits-in-kind) 1,610 1,017 - - - Other long term benefits - 384 - - - Long term incentives 123 - - - 1,733 1,401 - - Non-executive Directors: - Fees 179 224 179 224 - Other emoluments 26 14 26 14 205 238 205 238 Total Directors’ remuneration 1,938 1,639 205 238 Other key management personnel: - Short term employee benefits 6,531 4,602 - - - Other long term benefits 113 1,892 - - - Long term incentives 694 - - - 7,338 6,494 - - Total key management personnel compensation 9,276 8,133 205 238


Annual Report 2013


21. tax exPense

recognised in profit or loss


current tax expense Current year 19,357 24,420 - 140 Under/(Over) provision in prior years 10 (2,716) (20) (1) 19,367 21,704 (20) 139 deferred tax expense Origination and reversal of temporary differences (2,168) (10,170) - - Under provision in prior years 69 2,589 - - (2,099) (7,581) - - 17,268 14,123 (20) 139 Reconciliationofeffectivetaxexpense Profit before tax 62,275 40,186 66,909 20,692 Income tax calculated using Malaysian tax rate of 25% 15,569 10,047 16,727 5,173 Non-deductible expenses 2,164 4,738 249 93 Non-taxable income (547) (527) (16,976) (5,126) Other tax items 3 (8) - - Under/(Over) provision of current tax in prior years 10 (2,716) (20) (1) Under provision of deferred tax in prior years 69 2,589 - - 17,268 14,123 (20) 139

22. dividends

Dividends recognised by the Group and the Company are:

sen per total share amount date of payment rM’000

2013 Second interim single-tier 2012 ordinary 2.00 2,810 13 March 2013 First interim single-tier 2013 ordinary 2.05 2,870 13 June 2013 Second interim single-tier 2013 ordinary 14.28 20,000 13 June 2013 Third interim single-tier 2013 ordinary 12.55 17,571 13 September 2013 Fourth interim single-tier 2013 ordinary 1.69 2,360 13 December 2013

45,611

2012 First interim single-tier 2012 ordinary 14.28 20,000 12 July 2012


Annual Report 2013


22. dividends (cont’d)

On 27 February 2014, a fifth interim single-tier dividend of approximately 8.777 sen per ordinary share totalling RM12,290,000 was declared for the financial year ended 31 December 2013 and was paid on 13 March 2014.

At the forthcoming Annual General Meeting, a final single-tier dividend in respect of the financial year ended 31 December 2013, of approximately 1.58 sen per ordinary share amounting to RM2,212,395 at book closure date, will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend.

Such dividend, when approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2014.

23. earninGs Per ordinary share

Basic earnings per ordinary share

Basic earnings per ordinary share is calculated based on the profit attributable to ordinary shareholders over weighted average number of ordinary shares outstanding as at 31 December, as follows:

Group 2013 2012 rM’000 rM’000 Profit for the year attributable to owners of the Company 46,170 27,468 Weighted average number of ordinary shares 140,025 140,025

Basic earnings per ordinary share (sen) 32.97 19.62

24. financial instruMents

24.1 categories of financial instruments

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

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

carrying 2013 amount l&r fl rM’000 rM’000 rM’000

financial assets Group Trade and other receivables 308,653 308,653 - Other current assets 4,660 4,660 - Cash and cash equivalents 129,092 129,092 -

442,405 442,405 - financial assets company Trade and other receivables 21,314 21,314 - Cash and cash equivalents 2,329 2,329 - 23,643 23,643 -


Annual Report 2013


24. financial instruMents (cont’d)

24.1 categories of financial instruments (cont’d)

carrying 2013 amount l&r fl rM’000 rM’000 rM’000

financial liabilities Group Trade and other payables* (280,851) - (280,851) Other current liabilities (17,021) - (17,021)

(297,872) - (297,872) company Trade and other payables (7,778) - (7,778)

2012 financial assets Group Trade and other receivables 270,071 270,071 - Other current assets 3,977 3,977 - Cash and cash equivalents 171,464 171,464 -

445,512 445,512 - financial assets company Trade and other receivables 6,575 6,575 - Cash and cash equivalents 15,057 15,057 -

21,632 21,632 - financial liabilities Group Trade and other payables* (286,261) - (286,261) Other current liabilities (18,101) - (18,101)

(304,362) - (304,362) company Trade and other payables (12,392) - (12,392)

* Excluding provisions


Annual Report 2013



24.2 net gains and losses arising from financial instruments


Loans and receivables 11,098 (2,599) 416 1,016 Financial liabilities measured at amortised cost (2,997) (3,032) - -

Net gains/(losses) 8,101 (5,631) 416 1,016

24.3 financial risk management

The Group and the Company have exposure to the following risks from its use of financial instruments:

• Credit risk• Liquidity risk• Market risk

24.4 credit risk

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

receivables

Risk management objectives, policies and processes for managing the risk

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers wish to trade on credit terms are subject to credit evaluations procedures and the exposure to credit risk is monitored on an ongoing basis.

For other financial assets (including investment securities and cash and bank balances), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.

Exposure to credit risk, credit quality and collateral

As the Group and the Company do not hold any collateral, the maximum exposure to credit risk arising from the financial assets is the carrying amount of each class of financial assets as recognised in the statements of financial position. A significant portion of these receivables are regular customers that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due more than 90 days, which are deemed to have higher credit risk, are monitored individually.

At the end of the reporting period, approximately 74% (2012: 64%) of the Group’s trade receivables were due from 5 major customers located in Malaysia.


Annual Report 2013



24.4 credit risk (cont’d)

receivables (cont’d)

Exposure to credit risk, credit quality and collateral (Cont’d)

The exposure of credit risk for trade receivables as at the end of the reporting period by industry sector and geographic region were:

Group 2013 2012 rM’000 % of total rM’000 % of total

By industry sector: Construction 258,642 95 245,736 96 Property development 13,513 5 9,175 4 272,155 100 254,911 100

By geographical: Malaysia 272,155 100 254,785 99 United Arab Emirates - - 126 1 272,155 100 254,911 100

Impairment losses

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

individual Group Gross impairment net rM’000 rM’000 rM’000 2013 Not past due 267,396 - 267,396 Past due 1 - 30 days 36,271 - 36,271 Past due 31 - 60 days 2,814 - 2,814 Past due 61 - 90 days 546 - 546 Past due more than 90 days 14,126 (12,500) 1,626 321,153 (12,500) 308,653

2012 Not past due 249,220 - 249,220 Past due 1 - 30 days 14,606 - 14,606 Past due 31 - 60 days - - - Past due 61 - 90 days 2,994 - 2,994 Past due more than 90 days 25,778 (22,527) 3,251 292,598 (22,527) 270,071


Annual Report 2013



24.4 credit risk (cont’d)

receivables (cont’d)

Impairment losses (Cont’d)

The movements in the allowance for impairment losses on receivables during the financial year were:

Group 2013 2012 rM’000 rM’000

At 1 January 22,527 10,560 Impairment loss recognised - 12,500 Impairment loss reversed (1,795) (533) Impairment loss written-off (8,232) -

At 31 December 12,500 22,527

other financial assets


Investments are allowed only in liquid securities and transactions involving financial instruments are with approved financial institutions.


As at the end of the reporting period, the Group has only invested in domestic securities. The maximum exposure to credit risk is represented by the carrying amounts in the statement of financial position.

The other financial assets are unsecured.

inter company balances


The Company provides 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 was represented by their carrying amounts in the statement of financial position.

Impairment losses

As at the end of the reporting period, there was no indication that the advances to the subsidiaries were not recoverable. The Company monitored these advances regularly.


Annual Report 2013



24.5 liquidity risk

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

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

Maturity analysis

The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the reporting period based on undiscounted contractual payments:

carrying contractual under amount cash flows 1 year rM’000 rM’000 rM’000 Group 2013 Non-derivative financial liabilities Trade and other payables 280,851 284,777 284,777 Other current liabilities 17,021 17,021 17,021 297,872 301,798 301,798 2012 Non-derivative financial liabilities Trade and other payables 286,261 290,057 290,057 Other current liabilities 18,101 18,101 18,101 304,362 308,158 308,158 company 2013 Non-derivative financial liabilities Trade and other payables 7,778 7,778 7,778 2012 Non-derivative financial liabilities Trade and other payables 12,392 12,392 12,392


Annual Report 2013



24.6 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices will affect the Group’s financial position or cash flows.

24.6.1 currency risk

The Group is exposed to foreign currency risk on balances that are denominated in a currency other than the respective functional currencies of Group entities. At the reporting date the currency giving rise to this risk is primarily United Arab Emirates Dirham (AED).


As at the reporting date, the Group did not enter into any forward exchange contracts.

Exposure to foreign currency risk

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

denominated in aed Group 2013 2012 rM’000 rM’000

Cash and cash equivalents 579 658 Other receivables 44 168 Trade and other payables (557) (742)

Net exposure 66 84

Currency risk sensitivity analysis

A 3% (2012: 3%) strengthening of the Ringgit Malaysia against the following currencies at the end of the reporting period would have increased (decreased) pre-tax profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remained constant and ignores any impact of forecasted sales and purchases.

Group profit or loss 2013 2012 rM’000 rM’000

AED (2) (3)

A 3% (2012: 3%) weakening of Ringgit Malaysia against the above currencies at the end of the reporting period would have had equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remained constant.


Annual Report 2013



24.6 Market risk (cont’d)

24.6.2 interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.


The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate loans and borrowings. This strategy allows it to capitalise on cheaper funding in a low interest rate environment and achieve a certain level of protection against rate hikes. Currently, the Group have no loans and borrowings.

Exposure to interest rate risk

The Group’s investments in financial assets are mainly short term in nature and are not held for speculative purposes and include funds in fixed deposit or funds in asset management companies which yield better returns than cash at bank.

The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instruments, based on carrying amounts as at the end of the reporting period were:


floating rate instruments Deposits placed with licensed banks 99,603 144,837 2,000 15,000

Interest rate risk sensitivity analysis

(a) Cash flow sensitivity analysis for variable rate instruments

The Group’s and Company’s placements with financial institutions are exposed to a risk of change in cash flows due to changes in interest rates. The management monitors these rates on a regular basis and the exposure is not expected to be material.

24.7 fair value of financial instruments

The carrying amounts of cash and cash equivalents, short term receivables and payables and short term borrowings approximate fair values due to the relatively short term nature of these financial instruments.

25. caPital ManaGeMent

The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Group monitors and is determined to maintain an optimal debt-to-equity ratio that complies with debt covenants of the immediate and ultimate holding company and regulatory requirements.


Annual Report 2013


26. oPeratinG leases

leases as lessee

The Group has entered into commercial leases on office buildings and residential houses for purposes of branch office and staff quarters. These leases have an average tenure of between one and three years with renewal option at the discretion of the lessor. The Group is restricted from subleasing the leased properties to third parties.

Minimum leased payments recognised during the financial year were as follows:

2013 2012 rM’000 rM’000

Recognised in profit or loss 226 304 Capitalised in construction contract costs 1,043 478

Future minimum rentals payable under non-cancellable operating leases at the reporting date are as follows:

Group 2013 2012 rM’000 rM’000

Within 1 year 807 286 Between 1 year to 5 years 437 55 1,244 341

leases as lessor The Group has entered into commercial property leases on its buildings. These non-cancellable leases have

remaining lease terms of between two and three years.

Future minimum rentals receivable under non-cancellable operating leases at the reporting date are as follows:

Group 2013 2012 rM’000 rM’000

Within 1 year 487 517 Between 1 year to 3 years 216 291 703 808


Annual Report 2013


27. caPital coMMitMents

Capital expenditure commitments as at the reporting date are as follows:

Group 2013 2012 rM’000 rM’000

Property, plant and equipment Contracted but not provided for - 3 Authorised but not contracted for 12,449 11,282 12,449 11,285

land held for property development Contracted but not provided for 96,060 -

28. related Parties

identity of related parties

For the purposes of these financial statements, parties are considered to be related to the Group or the Company if the Group or the Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control. Related parties may be individuals or other entities.

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

The Group has related party relationship with its holding company, Directors and key management personnel.

related party transactions

The related party transactions of the Group and the Company, other than key management personnel compensation (see Note 20) and dividend income from subsidiaries (see Note 16), are as follows:

Group amount transacted during the year 2013 2012 rM’000 rM’000 Letting of machinery - Pesona Metro Sdn Bhd* 175 217 Provision of consultancy services - Warisan Az-Sya Sdn Bhd* 65 -

Balances with related parties at the reporting date are disclosed in Note 10 and Note 14 to the financial statements.

These transactions have been entered into on a negotiated term basis.

* Company in which a Director of a subsidiary has significant influence in making decisions.


Annual Report 2013


29. oPeratinG seGMents

The Group operates mainly within construction and property development industry in Malaysia and the Group’s foreign operation is not material. Hence, the reporting on geographical segment is not presented. For management purposes, the Group’s strategic business units are organised into two reportable operating segments as follows:

(a) Construction contracts

The construction contracts segment is in the business of design and construction of residential and commercial buildings as well as infrastructures.

(b) Property development

The property segment is in the business of developing and selling of properties.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on segment profit before tax, interest, depreciation and amortisation, as included in the internal management reports that are reviewed by the Executive Chairman, who is the Group’s chief operating decision maker. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of these segments relative to other entities that are operate within the same industries.

Transfer prices between operating segments, if any are on arm’s length basis in a manner similar to transactions with third parties. Segment revenue, expenses and results include transfers between operating segments are eliminated on consolidation.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, liabilities and expenses.

segment assets

The total of segment asset is measured based on all assets of a segment, as included in the internal management reports that are reviewed by the Group’s Executive Chairman. Segment total asset is used to measure the return of assets of each segment.


Annual Report 2013


29. oPeratinG seGMents (cont’d)

elimination of inter- construction Property sub- segment Group contracts development others total transactions total 2013 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

segment profit/(loss) 53,599 8,570 (2,867) 59,302 - 59,302

Included in the measure of segment profit/(loss) are: Revenue from external customers 655,636 49,589 - 705,225 - 705,225 Other non-cash expenses - Property, plant and equipment written off (304) - - (304) - (304) - Reversal of impairment loss on receivables 1,795 - - 1,795 - 1,795

Not included in the measure of segment profit/(loss) but provided to Executive Chairman: Amortisation of intangible assets (679) (4) (11) (694) - (694) Depreciation of property, plant and equipment (2,143) (331) (99) (2,573) 5 (2,568) Finance costs (2,899) (3,517) - (6,416) 3,419 (2,997) Finance income 12,264 387 - 12,651 (3,419) 9,232 Tax expense (15,649) (1,619) - (17,268) - (17,268)

segment assets 450,252 99,194 2,981 552,427 - 552,427 Unallocated assets 6,445 9,274 - 15,719 - 15,719

Total assets 456,697 108,468 2,981 568,146 - 568,146

Included in the measure of segment assets are: Additions to non-current assets other than financial instruments and deferred tax assets 8,397 7,230 281 15,908 - 15,908


Annual Report 2013



elimination of inter- construction Property sub- segment Group contracts development others total transactions total 2012 rM’000 rM’000 rM’000 rM’000 rM’000 rM’000

segment profit/(loss) 59,218 (18,840) (2,267) 38,111 - 38,111

Included in the measure of segment profit/(loss) are: Revenue from external customers 672,777 15,850 - 688,627 - 688,627 Other non-cash expenses - Property, plant and equipment written off (602) - - (602) - (602) - Impairment loss on receivables (12,500) - - (12,500) - (12,500) - Reversal of impairment loss on receivables 533 - - 533 - 533

Not included in the measure of segment profit/(loss) but provided to Executive Chairman: Amortisation of intangible assets (506) (2) (6) (514) - (514) Depreciation of property, plant and equipment (3,306) (310) (96) (3,712) 5 (3,707) Finance costs (2,958) (74) - (3,032) - (3,032) Finance income 8,966 362 - 9,328 - 9,328 Tax expense (18,750) 4,627 - (14,123) - (14,123)

segment assets 456,389 89,832 2,777 548,998 - 548,998 Unallocated assets 4,146 9,444 - 13,590 - 13,590

Total assets 460,535 99,276 2,777 562,588 - 562,588

Included in the measure of segment assets are: Additions to non-current assets other than financial instruments and deferred tax assets 5,893 4,330 1,107 11,330 - 11,330


Annual Report 2013



reconciliations of reportable segment revenues, profit or loss, assets and other material items

Group note 2013 2012 rM’000 rM’000

Profit or loss Total profit or loss for reportable segments 59,302 38,111 Finance income 17 9,232 9,328 Depreciation and amortisation (3,262) (4,221) Finance costs 18 (2,997) (3,032)

Consolidated profit before tax 62,275 40,186

30. lonG terM incentive Plan

The Putrajaya Perdana Berhad Long Term Incentive Plan (“LTIP”) is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting held on 31 May 2013. The LTIP was implemented on 31 May 2013 and is to be in force for a maximum period of five (5) years from the effective date, and it may be extended subject to approval by the shareholders of the Company.

The salient terms and features of the LTIP are as follows:

1. The aggregate amount of the LTIP shares which may be made available shall not exceed 5% of the Company’s enlarged issued and paid-up ordinary share capital (excluding treasury shares, if any).

2. The plan will entail the issuance of ordinary shares to eligible employees of the Group. The shares will be issued to the eligible employees at no cost. Any employee of the Group shall be eligible to participate in the LTIP if the following conditions are satisfied:

(i) He/She must be at least eighteen (18) years of age and is not an undischarged bankrupt;(ii) His/Her employment has been confirmed in writing and continues to be employed by the Group as at

the offer date; and(iii) He/She meets any other criteria as may be determined by the LTIP committee in its sole discretion

from time to time.

3. The LTIP will be subject to vesting conditions. Amongst others, at each vesting date (except for the first vesting), the Group has to achieve 90% of the net profit after tax which is budgeted for the financial year immediately prior to the vesting date.

The shares are to be vested over a period of time as follows:(i) 40% on first vesting date, being the proposed listing date of PPB;(ii) 30% on the first anniversary of the listing date; and(iii) 30% on the second anniversary of the listing date

The fair value of LTIP shares granted was estimated based on approximate net asset value at grant date of RM1.52 per share.

During the financial year, the Company granted a total of 6,751,400 share options to Executive Directors, key management personnel and also eligible employees. As at 31 December 2013, total expenses recognised as share based payments are RM2,171,000.


Annual Report 2013


31. acquisitions of suBsidiaries

During the financial year, the following subsidiaries were acquired by the Group:

31.1 acquisitions of subsidiary – ipoh city development sdn Bhd

On 2 July 2013, Putra Perdana Development Sdn Bhd (“PPDSB”) acquired 1 share in Ipoh City Development Sdn Bhd (“ICDSB”), a company incorporated in Malaysia for cash consideration of RM1, representing 50% equity interest in ICDSB. On 15 July 2013 and 23 December 2013, PPDSB subscribed for additional 999,997 shares and 6,000,000 shares in ICDSB for cash consideration of RM999,997 and RM6,000,000 respectively. Upon the subscription of additional shares, PPDSB holds 100% equity interest in ICDSB effective 15 July 2013.

ICDSB is principally engaged in property development. For the post acquisition period during the financial year ended 31 December 2013, the subsidiary incurred loss after tax of RM551,588.

The Group did not assume any assets or liabilities in the acquisition of ICDSB and the acquisition had no material financial impact on the Group.

31.2 acquisitions of subsidiary – time vantage sdn Bhd

On 5 July 2013, PPDSB acquired 2 shares in Time Vantage Sdn Bhd (“TVSB”), a company incorporated in Malaysia for cash consideration of RM2, representing 50% equity interest in TVSB. On 29 August 2013 and 12 December 2013, PPDSB subscribed for additional 5,712 shares and 4,194,076 shares in TVSB for cash consideration of RM5,712 and RM4,194,076 respectively. Upon the subscription of additional shares, PPDSB holds 57.14% equity interest in TVSB effective 29 August 2013.

TVSB is principally engaged in investment holding. For the post acquisition period during the financial year ended 31 December 2013, the subsidiary incurred loss after tax of RM43,334.

The Group did not assume any assets or liabilities in the acquisition of TVSB and the acquisition had no material financial impact on the Group.

31.3 acquisitions of subsidiary – Blue ocean Master sdn Bhd

On 5 July 2013, TVSB acquired 70 shares in Blue Ocean Master Sdn Bhd (“BOMSB”), a company incorporated in Malaysia for cash consideration of RM70, representing 70% equity interest in BOMSB. On 12 December 2013, TVSB subscribed for an additional 7,349,930 shares in BOMSB for cash consideration of RM7,349,930.

BOMSB’s intended principal activity is property development. For the post acquisition period during the financial year ended 31 December 2013, the subsidiary incurred loss after tax of RM275,673.

The Group did not assume any assets or liabilities in the acquisition of BOMSB and the acquisition had no material financial impact on the Group.

31.4 acquisitions of subsidiary – Brilliant corridor sdn Bhd

On 16 August 2013, BOMSB acquired 1 share in Brilliant Corridor Sdn Bhd (“BCSB”), a company incorporated in Malaysia for cash consideration of RM1, representing 50% equity interest in BCSB.

BCSB’s intended principal activity is property development. For the post acquisition period during the financial year ended 31 December 2013, the subsidiary incurred loss after tax of RM51,158.

The Group did not assume any assets or liabilities in the acquisition of BCSB and the acquisition had no material financial impact on the Group.


Annual Report 2013


31. acquisitions of suBsidiaries (cont’d)

31.5 acquisitions of subsidiaries – Misi serantau sdn Bhd and kuasa sezaman sdn Bhd

The Company acquired 100% equity interest in Misi Serantau Sdn Bhd (“MSSB”), which in turn owns 70% equity interest in Kuasa Sezaman Sdn Bhd (“KSSB”) (both referred as “MSSB Group”) for a total cash consideration of RM 8 million. Both MSSB and KSSB were incorporated in Malaysia.

The principal activity of MSSB is investment holding, whilst KSSB’s intended principal activity is a mini hydro power plant concessionaire. The acquisition of MSSB Group was completed on 30 December 2013. The financial results of these companies for the financial year ended 31 December 2013 are not significant and hence, not taken into account for the Group’s consolidation purposes.

The following summarises the major classes of consideration transferred, and the recognised amounts of assets acquired and liabilities assumed at the acquisition date for MSSB Group.

Group results of acquisitions

MssB MssB kssB consolidation Group 30.12.13 – 30.12.13 – 30.12.13 – 30.12.13 – 31.12.13 31.12.13 31.12.13 31.12.13 rM’000 rM’000 rM’000 rM’000 loss for the period - - - - identifiable assets acquired and liabilities assumed Investment in subsidiary 565 - (565) - Development costs - 1,260 - 1,260 Cash and cash equivalents - 2 - 2 Other payables and accruals (2) (829) - (831) Amount due to outgoing holding company (565) - - (565) Non-controlling interests - - (242) (242)

Total identified net (liabilities)/assets (2) 433 (807) (376) MssB MssB kssB Group rM’000 rM’000 rM’000

net cash outflow arising from acquisition of subsidiaries Purchase consideration settled in cash and cash equivalents (8,000) - (8,000) Less: Waiver of amount due to outgoing holding company for debt owing by MSSB 565 - 565

Net purchase consideration (7,435) - (7,435) Cash on hand acquired - 2 2

Acquisition of subsidiaries, net of cash acquired (7,435) 2 (7,433)


Annual Report 2013


31. acquisitions of suBsidiaries (cont’d)

31.5 acquisitions of subsidiaries – Misi serantau sdn Bhd and kuasa sezaman sdn Bhd (cont’d)

MssB Group rM’000

Goodwill at date of acquisition Total consideration transferred 7,435 Fair value of identified net liabilities 376

Goodwill 7,811

32. suBsequent event

On 1 April 2014, the Group has entered into a sale and purchase agreement (“Agreement”) for the acquisition of 37.5% equity interest in Iskandar (Holdings) Company Ltd (“IHC”), a company incorporated in Cayman Islands for a total cash consideration of RM240.0 million. IHC is an investment holding company. IHC has a 60% equity interest in Global Capital and Development Sdn Bhd (“GCD”) which owns land bank in Medini, Iskandar Malaysia, Johor. This transaction is undertaken on a willing buyer willing seller basis and based on the valuation undertaken on a comparison basis.

The purchase consideration shall be paid in the following manner:

(i) RM100.0 million (“Deposit”) shall be paid immediately upon approval from the relevant authority; and (ii) RM140.0 million (“Balance Sum”) shall be paid within 90 days from the date of the Agreement.

Upon payment of Deposit, the vendor shall transfer 25% equity interest in IHC to the Group and upon payment of Balance Sum, the vendor shall transfer the balance of 12.5% in IHC to the Group.

In the event that the Group is unable to make payment of the Balance Sum within 90 days from the date of the Agreement, the vendor shall be entitled to elect to either terminate the Agreement and refund the Deposit free of interest to the Group or to provide the Group with an additional period of 90 days to pay the Balance Sum or to waive the payment of the Balance Sum and deem that the Deposit paid for the 25% equity interest so transferred to the Group represents the full consideration for the fulfilment of the Agreement while the balance of 12.5% equity interest in IHC shall not be purchased by the Group.


Annual Report 2013

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

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

In the opinion of the Directors, the financial statements set out on pages 63 to 119 are drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 December 2013 and of their financial performance and cash flows for the financial year then ended.

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

dato’ rosman bin abdullah

ang ai hoon

Kuala Lumpur,

22 April 2014

I, sit kam hock, the officer primarily responsible for the financial management of Putrajaya Perdana Berhad, do solemnly and sincerely declare that the financial statements set out on pages 63 to 119 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the above named in Kuala Lumpur on 22 April 2014.

sit kam hock

Before me:

Lee Chin HinNo. W493Commissioner for Oaths


Annual Report 2013

Independent Auditors’ Reportto the members of Putrajaya Perdana Berhad

rePort on the financial stateMents

We have audited the financial statements of Putrajaya Perdana Berhad, which comprise the statements of financial position as at 31 December 2013 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 63 to 119.

Directors’ Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

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

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

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 31 December 2013 and of their financial performance and cash flows for the year then ended in accordance with Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

rePort on other leGal and reGulatory requireMents

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

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

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

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


Annual Report 2013

Independent Auditors’ Reportto the members of Putrajaya Perdana Berhad (cont’d)

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 ahmad nasri abdul WahabFirm Number: AF 0758 Approval Number: 2919/03/16(J)Chartered Accountants Chartered Accountant

Petaling Jaya,

Date: 22 April 2014


Annual Report 2013

Properties of PPB Groupas at 31 December 2013

approx. net Book approximate age of value as at year of land area / description and Building 31.12.2013location tenure acquisition units existing use (years) (rM’000)

Danau Point Freehold 2005 1 unit 4-storey 11 7,339 PT 2494 HS(D) 794, commercial building Presint 16, Bandar & with one (1) level Daerah Putrajaya, sub-basement car Wilayah Persekutuan park (principally Putrajaya used as the main office of PPB Group. The remaining areas are for rent)

PT 2395 HS(D) 712, Freehold 2005 20.283 acres Land held for - 30,403PT 2317 HS(D) 680 - developmentPT 2320 HS(D) 683, PT 2328 HS(D) 685- PT 2330 HS(D) 687, PT 2332 HS(D) 689, PT 2334 HS(D) 691, PT 2336 HS(D) 693, PT 2338 HS(D) 695, PT 2396 HS(D) 713 - PT 2403 HS(D) 720, PT 2450 HS(D) 756 - PT 2461 HS(D) 767, PT 2463 HS(D)769 - PT 2467 HS(D) 773, PT 2469 HS(D) 775, PT 2471 HS(D) 777, PT 2472 HS(D) 778, Presint16, Bandar & Daerah Putrajaya, Wilayah Persekutuan Putrajaya (¹)

PT 7555 HS(D) 6955 Freehold 2010 3,250 sq m Land held for - 13,806 Presint 2, Bandar & development Daerah Putrajaya, Wilayah Persekutuan Putrajaya (¹)

Lot 969 PN 14416 Lease 1999 1 unit 3-Storey Shop 17 243 (previously HS(D) 29486), expiring Office (vacant) Kawasan Bandar XXXIX, 20.3.2094 Melaka Tengah, Melaka (Plot No. 82)


Annual Report 2013

Properties of PPB Groupas at 31 December 2013 (cont’d)

approx. net Book approximate age of value as at year of land area / description and Building 31.12.2013location tenure acquisition units existing use (years) (rM’000)

HS(D) 360860 & 360861 Freehold 2008 2 units Double Storey 11 613 PTD 5118 & 5119 Terrace Mukim Jelutong, Shop OfficeJohor Bahru, Johor

Lot 12460 Mukim Dengkil Freehold 2011 1 unit Store - 13,846 Daerah Sepang, Selangor

Office No.1-6, 2nd flr & Lease 2013 11 units Stratified office 6 2,095Office No.8-12, 3rd flr, expiring Lots (vacant)Bangunan Umno 29.8.2106Bahagian Pekan, Jalan Teng Quee,Pekan, Pahang Darul Makmur

HS(D) 10226 PT 8783, Leasehold 2012 9.387 Land held for - 4,037 Lot 24709, PN 54124, (expiring hectare development(previously HS(D) 26.2.2100) 10227 PT 8784),Mukim Ayer Panas, Daerah Jasin, Melaka.

Kinta Lake district, Perak Leasehold 2013 264.37 acres Land held for - 6,033 PT 183716 HS(D) 206982 (expiring developmentPT 183717 HS(D) 206983 16.7.2111) PT 183718 HS(D) 206984 PT 183719 HS(D) 206985 PT 183720 HS(D) 206986 PT 183721 HS(D) 206987 PT 183726 HS(D) 206992 Mukim Belanja Daerah Kinta, Perak. (2)

total 78,415

Note:- ¹ Held as beneficial owner pursuant to the Development Agreement dated 30 January 2004.2 Pursuant to the development agreement dated 19 November 2013, PPB Group is granted an exclusive right to carry out

and complete the development of part of the Kinta Lake District project measuring approximately 264.37 acres. Legal ownership of the land will be transferred to PPB Group upon payment of the full development sum of RM46.06 million. The commitment fee of RM6.0 million has been paid and the balance development sum will be paid by seven (7) yearly instalment of RM6.0 million each for the first six (6) instalments and RM4.06 million for the last instalment.

for excellenceP A S S I O N

AN

NUA

L REPORT 2013

PUTRAJAYA PERDANA BERHAD(465327-P)

PUTRAJAYA PERDANA BERHAD (465327-P)

2nd & 3rd Floor5, Jalan P16Precinct 16

62150 PutrajayaMalaysia

w w w . p - p e r d a n a . c o m

ANNUAL REPORT 2013

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