Excellence in Progress ANNUAL REPORT 2013 About Us

Excellence In Progress ANNUAL REPORT 2013 About Us

Pasdec Holdings Berhad (“PASDEC”) is a leading government linked company based in Pahang listed on the Main Board of Bursa Malaysia Securities Berhad (Stock Code : 6912) under the property counter since 27 October 1997.

PASDEC is responsible for coordinating and marketing Pahang’s vast resources to create new opportunities for growth and prosperity. Its present authorised and paid up capital is RM500 million and RM205.9 million respectively.

As an investment holding company, PASDEC through its subsidiaries and associate companies is principally involved in property development, project management, civil and building construction, manufacturing of electrical wiring harness, seat components and catalytic converters for the automotive industry in South Africa, renewable energy, installation of UniFi, telecommunication services and provision of data centre services.

PASDEC is actively seeking for new business ventures and acquisition to expand its investment portfolio. Contents

2 Chairman’s Statement 11 Group Financial Summary 12 Corporate Information 13 Corporate Structure 14 Profile of Directors 23 Profile of Chief Executive Officer 24 Top Management 26 Statement on Corporate Governance 34 Statement of Directors’ Responsibilities 35 Audit Committee Report 37 Statement on Risk Management and Internal Control 39 Additional Compliance Information 40 Corporate Events 45 Analysis of Shareholdings 48 List of Properties 54 Financial Statements 162 Notice of Annual General Meeting 164 Statement Accompanying Notice of Annual General Meeting Proxy Form 2 PASDEC HOLDINGS BERHAD • Annual Report 2013 Chairman’s Statement

Dear Valued Shareholders,

On behalf of the Board of Directors, I am pleased to present to you the Annual Report and Audited Financial Statements of Pasdec Holdings Berhad (PASDEC) and its subsidiaries (Group) for the financial year ended 31 December 2013.

Dato’ Sri DiRaja Haji Adnan Bin Haji Yaakob Chairman Annual Report 2013 • PASDEC HOLDINGS BERHAD 3 Chairman’s Statement

OPERATING ENVIRONMENT

The global economy expanded at a modest pace in 2013 RM13.1 amid an uneven growth environment across economies. Strong domestic demand as well as increased private million profit consumption and investment drove the Malaysian economy attributable in 2013, but weak external demand and subdued public investment moderated the growth in the country’s gross to owners domestic product (GDP) to 4.7%, as compared with 5.6% in 2012. FINANCIAL PERFORMANCE

The on-going initiatives under the Government’s Economic The Group’s revenue stood at RM133.0 million for the Transformation Programme (ETP) which are gaining financial year ended 31 December 2013, compared to momentum as the country’s economy strengthens RM162.0 million for the previous financial year ended 31 supported the growth. December 2012 whilst profit attributable to owners of the parent increased notably to RM13.1 million over RM8.8 The property market in 2013 saw a 10.9% contraction in million last year. total transaction with an increase of 6.7% in value. There were 381,130 transactions valued at RM152.37 billion, The revenue for the year was largely derived from the compared to 2012 which recorded 427,520 transactions property, manufacturing and construction sectors. The valued at RM142.84 billion. In July 2013, Bank Negara drop in revenue was mainly due to the lower contribution Malaysia announced measures to control excessive of the property sector in year 2013 at RM58.0 million, 36% household debt levels and reinforce responsible lending lower than the previous financial year caused largely by practices, including a maximum tenure of 35 years for new the stringent guidelines in approving end financing by the mortgages and 10 years for personal loans, and the longer banks. Profit increased from last year mainly due to disposal term impact of these new initiatives remains to be seen. of quoted securities by the Group during the year.

Earnings per ordinary share for the year stood at 6.34 sen.

We are pleased to note that during the financial year ended 31 December 2013, the Group had settled its obligations under the RM150 million Rainbow Exchangeable Bonds (REBs). 4 PASDEC HOLDINGS BERHAD • Annual Report 2013 Chairman’s Statement

OPERATIONS REVIEW

Property Development and Construction

The commercial and residential segments of the Group’s property development did considerably well in the financial year 2013 despite a slowing down of activity in the first half of the year due to uncertainties of the general elections outcome.

During the year under review, the Group generated a turnover of RM68.7 million from the sales of development properties within its on-going projects.

The Group’s flagship residential and commercial developments at Bandar Putra, Pasdec Damansara, Balok Perdana, and Chendor Utama in Kuantan, continued to progress well in construction and sales, with new phases launched during the year.

During the financial year, the Group launched Phase 1 of Package 3 and Package 4 of Pasdec Damansara comprising 62 units of double-storey linked houses and 164 units of single and double-storey linked houses respectively, which todate have recorded strong sales with Package 3 being fully sold within months of its launch. At Balok Perdana, we launched 56 units of single storey houses and 51 units of single and double storey shop office catered largely for those working around the Gebeng Industrial Estate.

In 2013, we commenced the construction of 54 units of DIVIDEND high-end, spacious double storey and two-and-a-half storey semi-detached houses at Bandar Putra targeted In appreciation of our shareholders, I am pleased to largely toward buyers looking to upgrade their homes or announce that the Board has proposed a first and final single enhance the value of their purchase. Another phase within tier dividend of 4.0 sen per ordinary share for shareholders’ Bandar Putra launched during the year was 222 units linked approval at the forthcoming Eighteenth Annual General houses of single, double, two-and-a-half and three storeys. Meeting, translating into a total pay-out of RM8.24 million. Annual Report 2013 • PASDEC HOLDINGS BERHAD 5 Chairman’s Statement

Our Pasdec Pesona and Phase 1 of Vista Verde (Spanish Our construction arm, Pasdec Bina Sdn. Bhd., has on-going for ‘A Beautiful Panorama’) developments progressed order book worth RM110 million. The largest contract worth steadily during the year and are expected to be delivered RM57.9 million is the construction of a 9-storey specialist with Certificate of Completion and Compliance in the third hospital in Kuantan for Pahang Specialist Hospital Sdn. and fourth quarters of 2014 respectively. Sales have been Bhd. which until end of the year had progressed to 78%. very encouraging so far. As part of our commitment with UMS Link Holdings Sdn. The Group also commenced the development and sales Bhd. (UMS Link) to develop an educational hub and related of a new residential project in Temerloh known as Pasdec facilities for University Malaysia Sabah (UMS) in Sabah, the Idaman, offering 101 units of modern contemporary Group vide its wholly owned subsidiary, Pasdec Corporation designed double-storey linked houses, located strategically Sdn. Bhd., purchased 6.86 acres of land in Kuala Menggatal, at the vicinity of Hospital Sultan Haji Ahmad Shah and Kota Kinabalu, Sabah from Lintasan Mayang Development several primary and secondary schools. Sdn. Bhd. for a total cash consideration of RM24,802,193 in 2013 to be developed through purchase, build, lease and transfer (PBLT) concept 6 PASDEC HOLDINGS BERHAD • Annual Report 2013 Chairman’s Statement

Manufacturing in South Africa

Despite the undeniably low investor confidence in South Our wiring harnesses manufacture and supply subsidiary, Africa due to labour unrest, low productivity, increased costs Pasdec Automotive Technologies (Pty) Ltd. (PAT), had and South African Rand (ZAR) volatility, the automotive since 2012 embarked on a programme of acquiring new component manufacturing division’s revenue grew by technology and assets towards increasing capacity and 14.9% to ZAR177 million from the previous year’s revenue exploring new business opportunities. Towards this end, of ZAR154 million. A significant portion of the growth in in December 2013, a regenerated Cut and Crimp plant revenue was contributed by the new business generated (Plant 2) which included a state-of-the-art laboratory for from the full introduction of the Volkswagen South Africa analysis of crimping and producing micrograph report as (VWSA) PQ25 in 2013. per customer’s requirement, was officiated. We are proud to announce that the investment in new technology was Operating profit for the division declined by 17.5% to fundamental in PAT clinching the multi-million Rand VWSA ZAR9.5 million compared to last financial year, mainly due GP 250 contract, commencing full production in April 2014. to lost sales volumes amounting to ZAR14.8 million, high labour and energy costs and foreign exchange losses due to weakness in Rand in contrast with Euro zone based suppliers.

Pasdec’s electrical wiring harnesses and metal seats supplied to above car models. Annual Report 2013 • PASDEC HOLDINGS BERHAD 7 Chairman’s Statement

Other Divisions

Pursuant to the Group’s venture into renewable energy Upon completion and commencement, the plants at Sungai through small hydro power generation at two rivers in Benus and Sungai Sia will generate and supply to Tenaga Pahang, Sungai Benus in Bentong and Sungai Sia in Raub, Nasional Berhad (TNB) 5 Megawatt (MW) and 2MW power we are currently finalising the funding of the construction of respectively for a period of 21 years. the power plants by the appointed Engineering, Procurement and Construction (EPC) contractors with the bank. The Group has identified a parcel of industrial land in Gambang Halal Park as suitable for the development of In view of several glitches involved in the process of the proposed halal gelatine plant and has undertaken obtaining endorsement for site possession from the State negotiations with the East Coast Economic Region Forestry Department, the construction of the plants had Development Council (ECERDC) on the matter. Efforts to been delayed from the scheduled plan and accordingly the secure financing for the halal gelatine plant are underway. Group had obtained approval from the Sustainable Energy Development Authority Malaysia (SEDA) for the extension of the feed-in tariff commencement date of the plants to 15 September 2015. 8 PASDEC HOLDINGS BERHAD • Annual Report 2013 Chairman’s Statement

CORPORATE SOCIAL RESPONSIBILITY

Social responsibility and environmental sustainability are key values of the Group and PASDEC places a high priority on acting responsibly in the conduct of its business. In 2013, we continued to implement effective corporate responsibility initiatives to meet our commitment of balancing out economic ambitions with responsible corporate practices.

Our People At PASDEC, we care for the welfare and wellbeing of our employees, besides lending a helping hand to the We believe that the success of our company is driven by surrounding community. Towards this end, during the flood our employees and are constantly looking for new ways in disaster in December 2013, our Flood Relief Volunteer Team which we can better develop our workforce. At PASDEC worked relentlessly around-the-clock to provide emergency Group, our philosophy is not only our human capital a major assistance to the victims. They distributed drinking water asset; it is also a depreciating asset that needs continuing and food rations to the flood relief centres as well as aided investment. in the evacuation of the victims to dedicated flood relief centres. In addition, some 60 of our staff members affected In order to improve their abilities in daily tasks as well as by the tragedy received emergency monetary assistance and for career advancement, the Group provides its employees were offered temporary shelter at the Group’s condominium with continual training programmes of necessary skills and units at Kuantan Tembeling Resort during the floods. Our aptitude development as well as leadership and motivational team of volunteers also provided the necessary support workshops. and helping hand to the staff concerned to move back in and clean their house at the aftermath of the tragedy. The Employees are encouraged to upgrade themselves and Group has in place a policy to provide monetary aid to our enhance their knowledge by obtaining professional and employees affected by natural disasters to help them cope nationally recognised qualifications. and rebuild their lives.

Our subsidiary in South Africa has selected 17 employees from within the company to undergo a Future Leadership Programme to nurture future leaders by equipping them with skills for critical thinking and problem solving, communication, collaboration as well as creativity and innovation. The Programme, which started in July 2012 and spans over 18 months, is developed in collaboration with the Automotive Development Centre and will equip the successful graduates with a supervisory and management career in the automotive components sector. Annual Report 2013 • PASDEC HOLDINGS BERHAD 9 Chairman’s Statement

Community media center and infrastructure.The school which has more than 700 pupils is situated in the community that houses The Group contributes directly to the less privileged through many of our (PAT’s) staff. the provision of monetary support as well as in the spirit of volunteerism that sees employees invest their time and During the year, the Group became one of the major effort to help those in need. Throughout the year 2013, the sponsors for the Pahang First Touch Football Academy, Group contributed to local charities, voluntary organisations which presently comprises of 200 students aged between and schools, both in cash and in kind. 6 to 17 years old, as part of our initiatives to support the development of the sports in the county. In June 2013, our PASDEC Staff Volunteer team participated in a mission of enriching the living quarters of Rumah Anak Environment Yatim Nur Iman orphanage in Tanjung Lumpur, nearby our Bandar Putra development. The team cleaned the dorms As part of our dedicated efforts to cultivate eco-friendly and and living areas fixed the leaking fish pond and planted sustainable practices within the Group, a Local Stakeholders more trees around the orphanage; bringing extra joy to the Meeting in Bentong and Raub jointly organised with the children by spending time and dining with them. appointed emission consultant, YTL – SV Carbon Sdn. Bhd., was held during the year to engage the locals there about The Group also organised and participated in various the small hydro projects at Sungai Benus and Sungai Sia programmes for the benefit of the community in the which will be developed as clean development mechanism townships that we built among which the yearly Ramadhan projects. feast and contributions to mosques and surau. The Group played a role in promoting environment In South Africa, we support the Molelwaneng Primary friendly awareness and lifestyle to the local community by School in Lethlabile by giving significant cash donations organising an ECO Walk & Hunt at Taman Bandar, Kuantan and sports equipment as well as upgrading the school’s in conjunction with the PASDEC Sales Carnival 2013. 10 PASDEC HOLDINGS BERHAD • Annual Report 2013 Chairman’s Statement

LOOKING AHEAD ACKNOWLEDGEMENTS

The Malaysian economy is expected to grow at a stronger My fellow Directors and I would like to express our gratitude pace of between 5% and 5.5% in 2014 on firm domestic to our valued shareholders, customers, suppliers, business demand and recovery in exports (source: Economic Report partners and financiers for their support and confidence 2013/2014). Domestic demand is expected to remain in the Group. We must also thank the government and strong, and continues to be the driver of growth while regulatory authorities, especially the State Government of private investment is expected to continue, supported by Pahang, for their relentless support. accelerated implementation of on-going ETP. My deepest appreciation goes to the management and Property development and construction will continue to staff for their unwavering dedication and commitment to be the main revenue generator of the Group next year the Group. with an increase in the number of units built and design options available to the market. We have also earmarked I would like to express my heartfelt appreciation to my fellow approximately 300 acres of our land in Chendor, Pahang Board members for their invaluable insights and guidance to be developed into an integrated tourism related on steering the Group in the right direction. development via strategic partnership with a strong and reliable developer. Contribution of the manufacturing Special thanks go to Dato’ Haji Lias bin Mohd Noor, division in South Africa is expected to grow at the back who resigned on 25 April 2014, for his invaluable service of the new VWSA GP 250 contract that commenced full and dedication and we wish him the best in his future production in April 2014. undertakings. The Board would like to extend a warm welcome to Dato’ Haji Abdul Rahim bin Mohd Ali who was During the year, we embarked on a 3-year Strategic Plan appointed to the Board on 25 April 2014 and is confident for the year 2014 to 2016 and identified diversification of that he will contribute effectively to the Group. business activities into emerging industries like renewable energy and biotechnology as one of the strategic initiatives.

DATO’ SRI DIRAJA HAJI ADNAN BIN HAJI YAAKOB Chairman

14 May 2014 Annual Report 2013 • PASDEC HOLDINGS BERHAD 11 Group Financial Summary

Turnover Profit/(Loss) After Taxation (RM’million) (RM’million) 180 20 160 15 140 10 120 5 100 Earnings/(Loss) Per Share 0 80 (Sen) -5 60 8 40 -10 20 6 -15 ‘09 ‘10 ‘11 ‘12 ‘13 0 ‘09 ‘10 ‘11 ‘12 ‘13 4

2 Net Assets Net Assets Per Share 0 (RM’million) (RM)

400 -2 2.0 350 -4 ‘09 ‘10 ‘11 ‘12 ‘13 300 1.5 250 200 1.0 150 100 0.5 50 0 0 ‘09 ‘10 ‘11 ‘12 ‘13 ‘09 ‘10 ‘11 ‘12 ‘13

2009 2010 2011 2012 2013

Turnover 103,181 85,143 97,264 161,975 132,948 Profit/(Loss) After Taxation (8,706) 4,476 (4,178) 10,060 13,416 Net Assets 350,268 384,198 362,356 369,971 343,098 Net Assets Per Share (RM) 1.70 1.87 1.76 1.80 1.67 Earning/(Loss) Per share (Sen) (2.15) 0.51 (2.51) 4.25 6.34 12 PASDEC HOLDINGS BERHAD • Annual Report 2013 Corporate Information

BOARD OF DIRECTORS

YAB DATO’ SRI DIRAJA HAJI ADNAN BIN HAJI YAAKOB YH DATO’ MOHAMED AMIN BIN HAJI DAUD Non-Independent Non-Executive Chairman Senior Independent Non-Executive Director

YH DATO’ ABDUL GHANI BIN L. SULAIMAN YH DATO’ SRI KHALID BIN MOHAMAD JIWA Non-Independent Non-Executive Deputy Chairman Independent Non-Executive Director

YH DATO’ ABDUL RAHIM BIN MOHD ALI YH DATO’ ABDULLAH BIN A. RASOL Non-Independent Non-Executive Director Independent Non-Executive Director (Appointed on 25 April 2014) YH DATO’ HAJI LIAS BIN MOHD NOOR YH DATO’ DR. HAMDAN BIN JAAFAR Non-Independent Non-Executive Director Non-Independent Non-Executive Director (Resigned on 25 April 2014)

YH DATO’ HAJI MOHAMAD NOR BIN ALI Non-Independent Non-Executive Director

CHIEF EXECUTIVE OFFICER REGISTRAR YH DATO’ MOHD KHAIRUDDIN HJ. ABDUL MANAN Securities Services (Holdings) Sdn. Bhd. Level 7, Menara Milenium COMPANY SECRETARY Jalan Damanlela, Pusat Bandar Damansara MISS SHAKERAH ENAYETALI Damansara Heights, 50490 Kuala Lumpur Telephone : 03-2084 9000 REGISTERED OFFICE : 03-2094 9940 Tingkat 14, Menara Teruntum Facsimile : 03-2095 0292 Jalan Mahkota, 25000 Kuantan E-mail : [email protected] Telephone : 09-513 3888 Facsimile : 09-514 5988 PRINCIPAL BANKERS CIMB Bank Berhad WEBSITE Bank Islam Malaysia Berhad www.pasdec.com.my HSBC Bank Berhad RHB Bank Berhad AUDITORS AMBank Berhad Messrs. Hanafiah Raslan & Mohamad Public Accountants STOCK EXCHANGE LISTING Main Board of Bursa Malaysia Securities Berhad Annual Report 2013 • PASDEC HOLDINGS BERHAD 13 Corporate Structure

100% Pasdec Corporation Sdn. Bhd. 100% Pasdec Putra Sdn. Bhd.

Pasdec Cempaka Sdn. Bhd. 100% Kuantan Tembeling Resort Sdn. Bhd. 40%

Genting View Resort 100% Pasdec Land Sdn. Bhd. 40% Development Sdn. Bhd.

Pahang Specialist Hospital 30% 100% Pasdec Mega Sdn. Bhd. Sdn. Bhd.

20% Prima Prai Sdn. Bhd. 100% Sumbangan Sakti Sdn. Bhd.

Pahang Aircraft Industries 100% Mutiara Pasdec Sdn. Bhd. 100% Sdn. Bhd.

100% Pasdec Bina Sdn. Bhd. 100% Pasdec Trading Sdn. Bhd.

70% Pasdec Pintas Sdn. Bhd. 100% Pahang Off-Shore Sdn. Bhd.

100% Bentong Aquarium & Sanctuary Park Sdn. Bhd. 97% Pasdec Resources SA Ltd

100% Kimdec Corporation Sdn. Bhd. Femcotec Finance 100% (Pty) Ltd

100% Prima Net Technologies Sdn. Bhd. Pasdec Automotive 70% Technologies (Pty) Ltd

100% GELNAS Sdn. Bhd. CRH Africa 31% Automotive (Pty) Ltd 51% Pasdec Engineering Sdn. Bhd.

50% Pasdec Technology Centre & Services Sdn. Bhd. 14 PASDEC HOLDINGS BERHAD • Annual Report 2013 Profile of Directors

Dato’ Sri DiRaja Haji Adnan Bin Haji Yaakob Chairman Non-Independent Non-Executive Director

Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob, a Malaysian, aged 64, was appointed as Chairman and Director of Pasdec Holdings Berhad on 21 January 2003. He also serves as Chairman of the Tender Committee.

He holds a B.A (Hons) and Diploma in Education from University of Malaya. In October 2010, he was conferred a degree of Honorary Doctorate in Education Administration. Dato’ Sri DiRaja Haji Adnan is the first ever Malaysian to receive such honour from the most prestigious and oldest university in Jordan as a recognition towards his contribution to education especially in providing opportunity to the financially less fortunate students of Pahang to pursue higher education locally and internationally. In the same month, he was also conferred the Honorary Doctorate in Technology Management by Malaysia Pahang University (UMP).

Dato’ Sri DiRaja Haji Adnan is the first recipient of the Darjah Sri DiRaja Sultan Ahmad Shah Pahang (SDSA) which was bestowed upon him by His Royal Highness The Sultan of Pahang on His Royal Highness’ 80th birthday and carries the title Dato’ Sri DiRaja.

A well-known politician, he is a member of the Pahang State Legislative Assembly representing the Pelangai Constituency since 1986. Dato’ Sri DiRaja Haji Adnan has been the Chief Minister of Pahang since May 1999. He is also the Chairman of the State Executive Council of Pahang and holds portfolios in various committees.

Dato’ Sri DiRaja Haji Adnan is the Chairman of Mentiga Corporation Berhad and state owned agencies such as Perbadanan Kemajuan Negeri Pahang (PKNP), Pahang State Foundation, Amanah Saham Pahang (ASPA), Kumpulan Permodalan Bumiputera Pahang (KUMIPA), Lembaga Kemajuan Perusahaan Pertanian (LKPP) and Perbadanan Perpustakaan Awam Pahang (PPAP).

He does not have any family relationship with any other director and/or major shareholder, nor any conflict of interest with Pasdec Holdings Berhad. He has not been convicted for any offences (other than traffic offences) within the past 10 years. Annual Report 2013 • PASDEC HOLDINGS BERHAD 15 Profile of Directors

Dato’ Abdul Ghani Bin L. Sulaiman Deputy Chairman Non-Independent Non-Executive Director

Dato’ Abdul Ghani bin L. Sulaiman, a Malaysian, aged 71, was appointed as Deputy Chairman and Director of Pasdec Holdings Berhad on 22 April 2003. He graduated with a degree in Bachelor of Arts (Honours) from the University of Malaya in 1968 and served as an Officer of the Malaysian Administrative and Diplomatic Service in various government agencies.

Subsequently, he obtained his Diploma in Development Administration from Manchester University, United Kingdom in 1976, after which he continued to hold various posts in government agencies including the post of Malacca State Financial Officer, Sarawak State Development Officer, General Manager of Penang Regional Development Authority (PERDA) and Director of Pay and Allowance Division, Public Services Department, Malaysia.

Dato’ Abdul Ghani went on to serve as the State Secretary of Pahang in 1996 before retiring in 1998. Presently, he is the Chairman of Segi Perkasa (M) Sdn. Bhd. and the Chairman of the Remuneration Committee of Pasdec Holdings Berhad.

He does not have any family relationship with any other director and/or major shareholder, nor any conflict of interest with Pasdec Holdings Berhad. He has not been convicted for any offences (other than traffic offences) within the past 10 years. 16 PASDEC HOLDINGS BERHAD • Annual Report 2013 Profile of Directors

Dato’ Haji Abdul Rahim Bin Mohd Ali Non-Independent Non-Executive Director

Dato’ Haji Abdul Rahim bin Mohd Ali, a Malaysian, aged 57, was appointed to the Board of Pasdec Holdings Berhad on 25 April 2014. He holds a B.A (Hons) in Economy (Public Administration) from University Malaya.

Dato’ Haji Abdul Rahim is the Chief Executive Officer of Perbadanan Kemajuan Negeri Pahang (PKNP). He started his career with PKNP in 1980 as Assistant Manager of Industrial Promotion & Development, moving up to the post of Industrial Development Manager in 1988. He went on to become the Acting Deputy Chief Executive Officer and Deputy Chief Executive Officer (Development) before being promoted to his present post on 1 April 2014. He also sits on the Board of Tioman Island Resort Berhad.

Dato’ Haji Abdul Rahim is a member of the Nomination Committee and Tender Committee of Pasdec Holdings Berhad.

Dato’ Dr. Hamdan Bin Jaafar Non-Independent Non-Executive Director

Dato’ Dr. Hamdan bin Jaafar, a Malaysian aged 63, was appointed to the Board on 14 November 1995. He is an Economics Graduate from University Malaya and joined Perbadanan Kemajuan Negeri Pahang (PKNP) as an Administrative Officer upon his graduation in 1974.

He served in various departments within the PKNP Group and went on to become the Deputy General Manager before being promoted to Chief Executive of PKNP, a post which he held from 1994 to 2001. He was appointed as an Executive Director of Pasdec Holdings Berhad in December 1996 and subsequently in November 2001, he was seconded to Pasdec Holdings Berhad as the Group Managing Director where he served until early January 2005 before being called back to serve PKNP until his retirement in 2007.

During his tenure with PKNP, he attended the Stanford Top Management Program at Stanford University, USA in 1986. Dato’ Dr. Hamdan’s quest for knowledge earned him a doctorate in Business Administration from the European-American University at Oxford Centre and a Fellowship with The Oxford Centre for Leadership, United Kingdom in 2011. He has also been awarded a Doctorate in Business Administration by The Oxford Association of Management in 2006 and has been a Fellow of the Oxford Centre for Leadership in Business Administration since 2007.

Presently, he is running his own business. His experience ranges from township and real estate development to major socio-economic development in Pahang. Dato’ Dr. Hamdan is also a member of the Audit Committee and Remuneration Committee of Pasdec Holdings Berhad.

He does not have any family relationship with any other director and/or major shareholder, nor any conflict of interest with Pasdec Holdings Berhad. He has not been convicted for any offences (other than traffic offences) within the past 10 years. 18 PASDEC HOLDINGS BERHAD • Annual Report 2013 Profile of Directors

Dato’ Haji Mohamad Nor Bin Ali Non-Independent Non-Executive Director

Dato’ Haji Mohamad Nor bin Ali, a Malaysian, aged 68, was appointed to the Board on 22 August 2002. Having graduated from University of Malaya with a B.A (Hons) Sociology in 1969, Dato’ Haji Mohamad Nor went on to take his Diploma in Management Science, and subsequently earned an MBA (Investments) and MBO from Northrop University, USA. He is a Fellow of Canadian Comprehensive Auditing Foundation (CCAF) since 1986.

He has vast experience in the audit field having served in the Public Sector as Director of Audit in various states including Pahang, Terengganu, Johor and Selangor. He was the Assistant Auditor General in 1996 before being promoted to Deputy Auditor General, a post he held until his retirement in 2001.

He is a member of the Remuneration Committee and Tender Committee of Pasdec Holdings Berhad.

Dato’ Mohamed Amin Bin Haji Daud Independent Non-Executive Director

Dato’ Mohamed Amin bin Haji Daud, a Malaysian, aged 76, was appointed to the Board on 30 April 1997. He is a Barrister-at-law of the Honorable Society of Middle Temple and was called to the English Bar in November 1971. Upon returning to Malaysia, he joined Messrs. Ibam Sdn. Bhd. in 1972 as Company Secretary and was later promoted to Deputy General Manager of the same company. Subsequently, he went on to set-up his own law practice with two other lawyers in Kuantan.

He was a Member of Parliament of Pekan, Pahang from 1982 to 1986 and Rompin, Pahang from 1986 to 1990. He served as the Deputy Speaker of Dewan Rakyat Malaysia from 1986 until 1990. He was the Chairman of Lembaga Kemajuan Pahang Tenggara from 1986 until 1995 and Chairman of Kuantan Port Authority from 1985 until 1987.

He is a member of the Audit Committee and Nomination Committee of Pasdec Holdings Berhad.

He does not have any family relationship with any other director and/or major shareholder, nor any conflict of interest with Pasdec Holdings Berhad. He has not been convicted for any offences (other than traffic offences) within the past 10 years. 20 PASDEC HOLDINGS BERHAD • Annual Report 2013 Profile of Directors

Dato’ Sri Khalid Bin Mohamad Jiwa Independent Non-Executive Director

Dato’ Sri Khalid bin Mohamad Jiwa, a Malaysian aged 55, was appointed to the Board of Pasdec Holdings Berhad on 30 April 1997. He serves as Chairman of the Nomination Committee and a member of the Audit Committee of Pasdec Holdings Berhad.

He also currently sits on the Board of DFZ Capital Berhad and previously on the Board of Naluri Corporation Berhad, Atlan Holdings Berhad, Asian Composite Manufacturing Sdn. Bhd. and United Industries Sdn. Bhd. Dato’ Sri Khalid is the Group Executive Chairman of K-Corporation Sdn. Bhd. and its group of companies dealing with construction, property management, cosmetic products, specialised trading, IT and media services and agriculture activities.

Dato’ Sri Khalid is a business graduate and had previously worked in the financial sector after completing his studies in 1981. He then left the bank to start his own business with vast experience and knowledge in financial business. He is the Founder and Chairman of Yayasan Nurjiwa, a foundation that is actively involved in charity and social activities.

Dato’ Abdullah Bin A. Rasol Independent Non-Executive Director

Dato’ Abdullah bin A. Rasol, a Malaysian, aged 64, was appointed to the Board on 23 May 2002. Dato’ Abdullah is a Fellow of the Chartered Association of Certified Accountants, United Kingdom and a Chartered Accountant with the Malaysian Institute of Accountants. He is presently the Director, Corporate Affairs of Eden Inc. Berhad.

Prior to joining Eden Inc. Berhad, he was the Executive Director and Chief Executive Officer of Amanah General Insurance Berhad. He served the Amanah Capital Group since 1984, initially serving as the Finance Manager of Amanah Merchant Bank Berhad (AMBB) and moving on towards corporate banking and subsequently as the General Manager of AMBB. His tasks whilst at AMBB include marketing and evaluation of credit facilities, management of assets, financial advisory, equity restructuring and project financing. He gained audit and accounting experience in Coopers & Lybrand, Guthrie Malaysia Holdings Bhd and Pernas Construction Sdn. Bhd. prior to joining AMBB.

Dato’ Abdullah serves as Chairman of the Audit Committee and a member of the Remuneration Committee of Pasdec Holdings Berhad.

He does not have any family relationship with any other director and/or major shareholder, nor any conflict of interest with Pasdec Holdings Berhad. He has not been convicted for any offences (other than traffic offences) within the past 10 years. 22 PASDEC HOLDINGS BERHAD • Annual Report 2013 Profile of Directors

Dato’ Haji Lias Bin Mohd Noor Non-Independent Non-Executive Director (Resigned on 25 April 2014)

Dato’ Haji Lias bin Mohd Noor, a Malaysian, aged 63, was appointed to the Board on 19 August 2002 and resigned on 25 April 2014.

He is a B.A (Econs) (Hons) graduate of Universiti Kebangsaan Malaysia. In 1993, he attended the Stanford Executive Program at Stanford University, USA and later in 2000 earned an MBA from Universiti Kebangsaan Malaysia.

He served as the Chief Executive Officer of Perbadanan Kemajuan Negeri Pahang (PKNP) from 1 January 2003 to 31 March 2014. Prior to that, he was the Acting Chief Executive Officer and Deputy General Manager of PKNP.

Dato’ Mohd Khairuddin Hj Abdul Manan Chief Executive Officer

Dato’ Mohd Khairuddin Hj Abdul Manan, a Malaysian, aged 57, was appointed as Chief Executive Officer of Pasdec Holdings Berhad on 11 March 2009. He holds a B.A (Hons) in Strategic Environmental Planning Studies from Liverpool John Moores University, England.

Dato’ Mohd Khairuddin started his career as a Forecaster/Demographer at Binafon Sdn. Bhd. after graduating in 1982 and went on to gain experience and in depth knowledge in the property development and construction industry while serving Rimman International Sdn. Bhd., Housecoff Sdn. Bhd. and Panji Timor Sdn. Bhd. as Project Manager and General Manager.

He ventured into his own property development and construction business in 1992 and has undertaken projects in Seremban, Klang Valley, Pahang and Kedah prior to joining Pasdec Holdings Berhad. Among the notable projects undertaken by Dato’ Mohd Khairuddin are the Terminal One and Light Industrial Park in Seremban, Water Treatment Plant in Habu, Cameron Highland and Langkawi Hospital in Kuah, Langkawi.

Dato’ Mohd Khairuddin is also a member of the Malay College Old Boys’ Association of the Malay College Kuala Kangsar and a committee member of its Negeri Sembilan branch.

He does not have any family relationship with any other director and/or major shareholder, nor any conflict of interest with Pasdec Holdings Berhad. He has not been convicted for any offences (other than traffic offences) within the past 10 years and does not hold any shares in Pasdec Holdings Berhad or its subsidiaries. 24 PASDEC HOLDINGS BERHAD • Annual Report 2013 Top Management

From Left to Right Goh Song Han Dato’ Mohd Khairuddin Hj Mohd Azman Sa’ad Haji Anwar Bin Matnor Senior Vice President Abdul Manan Senior Vice President Senior Manager Technical Corporate Resources Group Property Chief Executive Officer Annual Report 2013 • PASDEC HOLDINGS BERHAD 25 Top Management

Ali Bin Md Mokhtar Kevin Pather Shakerah Enayetali Zulhkiple Bin A. Bakar General Manager Chief Executive Officer Group General Manager Pasdec Bina Sdn. Bhd. Pasdec Resources SA Ltd Company Secretary Pasdec Engineering Sdn. Bhd. 26 PASDEC HOLDINGS BERHAD • Annual Report 2013 Statement on Corporate Governance

The Board of Directors (“Board”) of Pasdec Holdings Berhad (“PASDEC” or “Company”) is committed to manage the Group in line with corporate governance practices recommended in the Malaysian Code on Corporate Governance 2012 (“Code”). The Board believes that corporate accountability complements business practices that will facilitate the achievement of PASDEC Group’s goals and objectives with the ultimate aim of enhancing shareholders’ value whilst protecting the interests of other stakeholders.

Pursuant to Paragraph 15.25 of the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Board is pleased to report the manner in which the Group has applied the principles and recommendations of the Code and the extent of compliance with the best practices provisions in the Code.

1. BOARD OF DIRECTORS

(a) Roles and Responsibility of the Board

The Board is generally entrusted with the overall governance of the Group, the responsibility to exercise reasonable and proper care of the Company’s resources for the best interests of its stakeholders as well as to safeguard the Company’s assets.

The Board understands and is mindful of its roles and responsibilities in discharging its fiduciary and leadership functions for PASDEC Group and in this regard, has assumed the following responsibilities as recommended in the Code:-

(i) Reviews and adopts the strategic plan as well as annual business plan and budget. (ii) Oversees the conduct of business and evaluate whether the business is being properly managed. (iii) Identifies principal risks and ensure the implementation of appropriate internal controls and mitigation measures. (iv) Oversees the succession planning and appointment of senior management. (v) Oversees the development and implementation of an investor relations policy. (vi) Reviews the adequacy and integrity of the internal controls and management information systems, ensuring the establishment of a sound framework of internal controls and regulatory compliance.

The Board has adopted a Board Charter which documents the strategic intent, duties, functions and roles and responsibilities of the Board including the division of responsibilities and powers between the Board and Management, the different committees established by the Board, and between the Chairman and the Chief Executive Officer/President (“CEO”). The Board Charter shall be periodically reviewed and updated, as and when necessary. A copy of the Board Charter is available at the Company’s website.

The roles of the Chairman and the CEO are separate and clearly defined to ensure a balance of power and authority. The Chairman is primarily responsible for the orderly conduct and effectiveness of the Board and leads the Directors in the performance of the Board’s responsibilities whilst the CEO, who is accountable to the Board, has the overall responsibility for the day-to-day running of the business, operational decision-making and implementation of Board policies and decisions in accordance with the powers and authority delegated to him by the Board. Annual Report 2013 • PASDEC HOLDINGS BERHAD 27 Statement on Corporate Governance

1. BOARD OF DIRECTORS (CONT’D)

(a) Roles and Responsibility of the Board (Cont’d)

The Board recognizes its role in establishing a corporate culture which stimulates ethical conduct within the Group. Towards this end, PASDEC has implemented a Code of Business Conduct and Work Ethics (“Code of Conduct”) which sets out the standards of behaviour and ethical conduct to be observed by the Directors and employees in performance of their duties. The Code of Conduct shall be periodically reviewed and updated, as and when necessary. A copy of the Code of Conduct is available at the Company’s website. The Company’s Whistleblowing Policy provides an avenue for all employees and stakeholders to disclose any improper, unethical or unlawful conduct within PASDEC without fear of reprisal. The identity of the whistleblower and the concerns raised will be treated with confidentiality.

The Board is also mindful of the importance in promoting sustainability by balancing the environmental, social and governance aspects of Company’s business with the interests of its stakeholders. The Group’s activities in promoting social responsibility are elaborated in the Chairman’s Statement on pages 8 to 9 of this annual report.

(b) Board Balance

The Board currently has eight (8) members comprising of a Non-Independent Non-Executive Chairman, a Non- Independent Non-Executive Deputy Chairman, three (3) Independent Non-Executive Directors and three (3) Non- Independent Non-Executive Directors.

The current composition of the Board is in compliance with Paragraph 15.02 of the MMLR as one-third of its members are Independent Directors.

With regards to the recommendation of the Code that the Board must comprise a majority of independent directors where the chairman of the Board is not an independent director, the Board is of the opinion that the present Chairman is the most appropriate person for the role and the current number of Independent Directors is sufficient to ensure balance of power and authority on the Board.

The Board’s composition represents a mix of knowledge, skills, experience and expertise relevant to the Company’s operations to provide a strong, effective and competent leadership and control of the Group.

A brief profile of each Director is presented on pages 14 to 22 of this annual report.

The Non-Executive Directors bring a wide range of business and financial experience and have proven track record in the private and public service sectors that are vital for the success of the Group. They have the necessary expertise and skills to ensure that the strategies proposed by the Management are properly deliberated and evaluated, taking into account the interest of the shareholders and stakeholders. The Non-Executive Directors also contribute to policy formulation and are actively involved in decision-making and act in the Group’s best interest by providing objective views, advice and judgement.

The Directors who are nominated as the representatives of Perbadanan Kemajuan Negeri Pahang (PKNP) always act in the best interest of the Company when making any decision, in line with Section 132(1E) of the Malaysian Companies Act, 1965.

28 PASDEC HOLDINGS BERHAD • Annual Report 2013 Statement on Corporate Governance

1. BOARD OF DIRECTORS (CONT’D)

(b) Board Balance (Cont’d)

The Board recognises the importance and contribution of its Independent Directors where they provide unbiased and independent views, advice and judgement and ensure there is adequate check and balance at the Board. The Board holds the view that the ability of an Independent Director to exercise independence is not dependent on his length of service as an Independent Director. The suitability and ability of an Independent Director to carry out his roles and responsibilities is very much a function of his calibre, experience, qualifications and personal qualities.

Currently, all there (3) of the Independent Directors of the Company had served the Board as independent directors for a cumulative term of more than nine (9) years. The Code recommends that an independent director who has served the board for a cumulative period exceeding nine (9) years may continue to serve the Board subject to re-designation to a non-independent director. However, the Board can retain the independent director as an independent director by seeking shareholders’ approval in a general meeting.

The concept of independence adopted by the Board is in accordance with the definition of an independent director in Paragraph 1.01 of the MMLR. Following an assessment of the Independent Directors, the Board recommends that Dato’ Mohamed Amin bin Haji Daud, Dato’ Sri Khalid bin Mohamad Jiwa and Dato’ Abdullah bin A. Rasol continue to serve as Independent Directors subject to shareholders’ approval at the forthcoming Annual General Meeting (“AGM”) of the Company. Justifications on the continuation of Dato’ Mohamed Amin bin Haji Daud, Dato’ Sri Khalid bin Mohamad Jiwa and Dato’ Abdullah bin A. Rasol as Independent Directors are provided in the Notice of the 18th AGM on page 164 of this annual report.

The Board has identified Dato’ Mohamed Amin bin Haji Daud, as the Senior Independent Non-Executive Director to whom concerns may be conveyed.

Board meetings are held at quarterly intervals every financial year with additional meetings, including special meetings, convened whenever necessary. Five (5) Board meetings were held during the financial year ended 31 December 2013. Details of attendance of the Directors to the Board meetings are as follows:-

Director No. of meetings attended % Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob 5/5 100 Dato’ Abdul Ghani bin L. Sulaiman 5/5 100 Dato’ Haji Lias bin Mohd Noor (Resigned on 25 April 2014) 5/5 100 Dato’ Dr.Hamdan bin Jaafar 3/5 60 Dato’ Haji Mohamad Nor bin Ali 5/5 100 Dato’ Mohamed Amin bin Haji Daud 4/5 80 Dato’ Sri Khalid bin Mohamad Jiwa 3/5 60 Dato’ Abdullah bin A. Rasol 5/5 100 Annual Report 2013 • PASDEC HOLDINGS BERHAD 29 Statement on Corporate Governance

1. BOARD OF DIRECTORS (CONT’D)

All the Directors that served in the year 2013 have complied with the minimum 50% attendance requirement in respect of Board Meetings as stipulated by the MMLR.

The Directors are provided with agenda and Board papers covering the agenda items in a timely manner and in the appropriate quality prior to Board meetings to enable the Directors to have a good assessment of the subject matter in order to discharge their duties and responsibilities competently and to facilitate informed decision-making.

The CEO leads the presentation of the Board papers and provides comprehensive explanation on pertinent issues. Senior management staff may be called to participate at the Board meetings to provide detailed explanation and clarifications on issues that are being deliberated. Resolutions are properly recorded and minutes of proceedings of meetings are circulated to directors for comments before they are confirmed. All confirmed minutes of the Board meetings are properly maintained by the Company Secretary and kept at the registered office of the Company.

The Board is kept updated on the Company’s activities and operations on a regular basis. All Directors have full access to information pertaining the Company’s activities, both financial and operational, during deliberations at the Board meetings as well as through regular interaction with the senior management. In addition, the Directors may seek independent professional advice at the Company’s expense, if necessary, in the furtherance of their duties.

All Directors have access to the advice and support of a suitably qualified Company Secretary, whose appointment and removal is a matter for the Board as a whole. The Company Secretary ensures that Board procedures are followed and advices the Board and the Management on statutory and regulatory development, the implementation of corporate governance measures and compliance matters as applicable to PASDEC Group.

The Board may, whenever required, set up committees delegated with specific powers and responsibilities.

(d) Appointments to the Board

The Board decides on appointment of new directors to the Board based on the recommendation of the Nomination Committee. In considering appointments to the Board, due regard would be given to the skills, experience, contribution and commitment that a person would bring to the Board. Whilst the Board recognise the contribution that women could bring to the Board, it does not have a specific policy in gender diversity.

All Directors are required to notify the Chairman on their appointment as director in other companies.

(e) Re-election

In accordance with the Company’s Articles of Association, all Directors who are appointed by the Board are subjected to re-election by the shareholders in the next AGM subsequent to their appointment. In addition, at least one-third (1/3) of the remaining Directors are required to submit themselves for re-election at least once in every three years in the AGM.

Directors of the age of 70 years and above are required to submit themselves for re-appointment annually in accordance with Section 129 of the Malaysian Companies Act, 1965. 30 PASDEC HOLDINGS BERHAD • Annual Report 2013 Statement on Corporate Governance

1. BOARD OF DIRECTORS (CONT’D)

(f) Directors’ Training

All the Directors, except Dato’ Haji Abdul Rahim bin Mohd Ali who was appointed on the Board on 25 April 2014, have attended the Mandatory Accreditation Programme prescribed by Bursa Securities.

New directors appointed on the Board will be provided with the relevant information of the Company, including its Board Charter and Memorandum and Articles of Association, and will be given regular briefings and updates on the Group’s business plan, operations, financial performance and activities.

The Directors are encouraged to attend seminars, briefings, courses and training programmes to keep abreast with the latest developments in the industry and business environment, regulatory up dates or changes as well as to enhance their skills and knowledge. During the financial year, the Directors attended, either individually or collectively, development and training programmes organised by various agencies, including among others, the following:-

• In-house Directors’ Training On Roles And Responsibilities Of Directors On Financial Statements • Directors’ Remuneration Seminar 2013 • Inaugural Asean Corporate Governance Summit 2013 • Fraud Detection And Prevention : A Necessity, Not A Choice

2. BOARD COMMITTEES

The Board has established the following Board committees in order to effectively discharge its duties:-

• Audit Committee • Nomination Committee • Remuneration Committee • Tender Committee • Executive Committee (Dissolved on 17 March 2014)

All Board committees have written terms of reference outlining their duties, responsibilities and authority and are reviewed from time to time to ensure that they are relevant and up-to-date.

Audit Committee

The composition of the Audit Committee complies with the provisions of the MMLR. The key functions and responsibilities of the Audit Committee, its activities and number of meetings held during the financial year and details of attendance of each member are set out in the Audit Committee Report on pages 35 to 36 of this annual report. Annual Report 2013 • PASDEC HOLDINGS BERHAD 31 Statement on Corporate Governance

2. BOARD COMMITTEES (CONT’D)

Nomination Committee

The Nomination Committee comprises of three (3) Non-Executive Directors, two (2) of whom are Independent Non-Executive Directors. The members of the Nomination Committee are as follows:-

• Dato’ Sri Khalid bin Mohamad Jiwa (Chairman) • Dato’ Mohamed Amin bin Haji Daud • Dato’ Haji Lias bin Mohd Noor (Resigned on 25 April 2014) • Dato’ Haji Abdul Rahin bin Mohd Ali (Appointed on 25 April 2014)

The Nomination Committee is primarily responsible for proposing and recommending new nominees to the Board as well as Directors to fill seats on Board committees, assessing the effectiveness of the Board and the Board committees and reviewing the required mix of skills, experience, core competencies and other qualities which Directors should bring to the Board. The Committee is also responsible for assessing and recommencing the appointment of the key senior management of the Group.

The assessment of the performance of the Board, the Board committees and each individual Director, via a prescribed evaluation form, is undertaken annually and formally documented.

During the financial year, the Nomination Committee:-

• Assisted the Board in assessing the independence of its Independent Directors; • Reviewed the annual assessment of the CEO by the Directors; and • Assessed and evaluated the effectiveness of Directors through self and peer assessments and the assessment of the Board as a whole; and • Considered new nomination to the Board of the Company.

The Nomination Committee meets as and when required. All recommendations of the Nomination Committee are subject to the endorsement of the Board.

Remuneration Committee

The Remuneration Committee comprises of four (4) Non-Executive Directors, one of whom is Independent Non-Executive Director. The members of the Remuneration Committee are as follows:-

• Dato’ Abdul Ghani bin L. Sulaiman (Chairman) • Dato’ Dr. Hamdan bin Jaafar • Dato’ Haji Mohamad Nor bin Ali • Dato’ Abdullah bin A. Rasol

The Remuneration Committee reviews the remuneration package, terms of employment, benefits and reward structure of the executive directors and the CEO and makes the necessary recommendations for the decision of the Board. The Remuneration Committee also recommends to the Board the proposed performance bonus and salary increment to the key senior management and employees after reviewing the Company’s actual performance against the KPIs approved earlier during the year. 32 PASDEC HOLDINGS BERHAD • Annual Report 2013 Statement on Corporate Governance

2. BOARD COMMITTEES (CONT’D)

Other Committee

The Board has also established a Tender Committee to ensure control over award of contracts to contractors.

3. DIRECTORS’ REMUNERATION

The Board as a whole reviews the level of remuneration of the Directors to ensure that it is sufficient to attract and retain the Directors needed to lead the Company to growth and success. The level of remuneration of the Non-Executive Directors is structured to be aligned to the market and their duties and responsibilities. The individual Director does not participate in decision regarding his own remuneration package. Directors’ fees are approved by the shareholders at the AGM.

The aggregate remuneration of Directors of the Company for the financial year ended 31 December 2013 categorised into the appropriate components and range of remuneration are as follows:-

Non-Executive Remuneration Directors (RM) Fees 501,000 Other emoluments 95,100 Total 596,100

The remuneration paid to the Directors within bands of RM50,000 is as follows:- Non-Executive Range of Remuneration Directors RM50,001 – RM100,000 7 RM100,001 – RM150,000 1

4. RELATIONSHIP AND COMMUNICATION WITH SHAREHOLDERS AND INVESTORS

(a) Corporate Disclosures

The Board recognises the importance of timely dissemination of information to its shareholders and other stakeholders, and in line with its commitment to transparency and accountability, the Company adheres strictly to the disclosure requirements under the MMLR and other applicable laws.

Information on the Group’s performance, operations and major developments are communicated to shareholders and investors through annual report, quarterly financial results, various announcements and disclosures made to Bursa Securities and the Company’s website (www.pasdec.com.my). The Company’s website allows shareholders and the general public access to information such as corporate profile, contact details of designated persons, relevant policies and announcements made to Bursa Securities.

The Company has established an internal Corporate Disclosure Policy to facilitate disclosure of information based on the requirements set out in the MMLR. Annual Report 2013 • PASDEC HOLDINGS BERHAD 33 Statement on Corporate Governance

4. RELATIONSHIP AND COMMUNICATION WITH SHAREHOLDERS AND INVESTORS (CONT’D)

(b) AGM

The AGM serves as a primary channel in shareholders’ communication. It gives an opportunity to all shareholders to have direct access to the Board and to raise questions on resolutions proposed at the AGM. Shareholders are encouraged to attend the AGM and actively participate in the proceedings.

During the AGM, the Chairman, Directors, CEO and senior management are available to respond to shareholders’ questions on the Group’s business and performance. All resolutions are put to vote on a show of hands unless a request for poll is put forward. As and when necessary, a press conference is held immediately after the AGM and the Chairman will brief the members of the media on the resolutions passed and answer questions relating to the development and operations of the Group.

5. ACCOUNTABILITY AND AUDIT

(a) Financial Reporting

The Board is responsible to present a balanced and comprehensive assessment of the Group’s financial position and prospects to shareholders by means of its annual and quarterly financial reports. In this regard, the Board is responsible for the preparation of the financial statements that present a fair and balanced view of the Group’s financial state of affairs.

The Board has delegated to the Audit Committee the responsibility of reviewing and ensuring that the financial statements of the Group comply with applicable financial reporting standards.

(b) Related Party Transaction

Directors recognise that they have to declare their respective interests in transactions with the Company and the Group, and abstain from deliberation and voting on the relevant resolution in respect of such transactions at the Board or at any general meetings convened to consider the matter. All related party transactions are reviewed as part of the annual internal audit plan, and the Audit Committee reviews any related party transaction and conflict of interest situation that may arise within the Group including any transaction, procedure or course of conduct that causes questions of Management integrity to arise.

The Board acknowledges its responsibility to maintain a sound system of risk management and internal control to safeguard shareholders’ investment and the Group’s assets. The Statement on Risk Management and Internal Control, which provides an overview of the management of risks and state of internal controls within the Group, is set out on pages 37 to 38 of this annual report.

(d) Relationship with External Auditors

The Board, through the Audit Committee, has a transparent and appropriate relationship with the Company’s external auditors. The relationship of the Audit Committee with the external auditors is described in the Audit Committee Report of this annual report.

The Company constantly reviews and assess the suitability and independence of the external auditors. The Audit Committee obtains assurance from the external auditors on their independence in discharging their duties.

28 April 2014 34 PASDEC HOLDINGS BERHAD • Annual Report 2013 Statement of Directors’ Responsibilities In Relation To The Financial Statements

The Directors are responsible to ensure that the annual audited financial statements of the Group and of the Company are properly drawn up so as to give a true and fair view of the state of affairs of the Group and the Company as at 31 December 2013, and of the results of their operations and cash flows for the year ended on that date.

In ensuring the preparation of these financial statements, the Directors have:-

1. ensured compliance with applicable approved accounting standards; 2. adopted suitable accounting policies that are applied consistently; and 3. made reasonable and prudent judgments and estimates.

The Directors are responsible for ensuring that the accounting and other records and registers required by the Companies Act, 1965 to be retained by the Company and its subsidiaries have been properly kept in accordance with the provisions of the said Act.

The Directors have general responsibilities for taking such steps that are reasonably available to them to safeguard the assets of the Group and the Company, and to prevent and detect fraud and other irregularities. Annual Report 2013 • PASDEC HOLDINGS BERHAD 35 Audit Committee Report

The Audit Committee (the Committee) was established on 12 June 1997 to act as a Committee of the Board of Directors.

MEMBERS AND MEETINGS

A total of seven (7) meetings were held during the year. Details of the composition of the Committee and attendance by each member at the Committee meetings are set out below:

Name of Director Status of Directorship Attendance of Meetings % 1 Dato’ Abdullah bin A. Rasol Independent Non-Executive Director 7/7 100 Chairman of the Committee 2 Dato’ Mohamed Amin bin Haji Daud Senior Independent Non-Executive Director 7/7 100 Member of the Committee 3 Dato’ Sri Khalid bin Mohamad Jiwa Independent Non-Executive Director 4/7 57.14 Member of the Committee 4 Dato’ Dr. Hamdan bin Jaafar Non-Independent Non-Executive Director 6/7 85.71 Member of the Committee

The Chief Executive Officer, the Head of Group Internal Audit and other members of senior management attend meetings of the Committee as and when required by the Committee Members. The Company Secretary is the Secretary of the Committee.

The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee. The Committee is authorised by the Board to obtain such outside legal or other independent professional advice and to secure the attendance of such outsiders with relevant experience and expertise as it may consider necessary. The Committee is able to convene meetings with external auditors, the internal auditors or both, excluding the attendance of other Directors and management, whenever deemed necessary.

RESPONSIBILITIES AND DUTIES

The Committee shall undertake the following responsibilities and duties: 1. To review with the external auditors, the audit plan, the scope of audit and their audit report. 2. To review the evaluation of the system of internal control with the internal and external auditors. 3. To review the adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the necessary authority to carry out its work. 4. To review the internal audit plan and review the results of the internal audit plan or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function. 5. To review the quarterly results and the year end financial statements of the Group prior to the approval by Board of Directors, focusing particularly on: • Changes in or implementation of major accounting policies; • Significant and unusual events; and • Compliance with accounting standards and other regulatory requirements. 6. To review the procedures of recurrent related party transactions undertaken by the Company and the Group. 36 PASDEC HOLDINGS BERHAD • Annual Report 2013 Audit Committee Report

RESPONSIBILITIES AND DUTIES (CONT’D)

7. To review related party transactions entered into by the Company and the Group to ensure that they are in the best interest of the Group; fair, reasonable and on normal commercial terms; and not detrimental to minority interest. 8. To review with the external auditors with regards to problems and reservations arising from their interim and final audits. 9. To recommend the nomination of a person or persons as external auditors. 10. To assess the performance of the external auditors and make recommendations to the Board of Directors on their appointment and removal. 11. To review any letter of resignation from the external auditors and any questions of resignation or dismissal. 12. To monitor the Group’s compliance to the Bursa Malaysia Listing Requirements (LR) and the Malaysian Code of Corporate Governance from assurances by the Company Secretary and the results of review by the external and internal audits. 13. To report to Bursa Malaysia, any breaches of the LR which have not been satisfactory resolved. 14. To undertake such other functions as may be agreed by the Committee and the Board of Directors.

ACTIVITIES DURING THE FINANCIAL YEAR

During the year, the Committee carried out its duties as set out in its terms of reference. The main activities undertaken by the Committee were as follows: 1. Reviewed the internal and external auditors’ scope of work and annual audit plans for the Group. 2. Reviewed management letters and the audit report of the external auditors. 3. Reviewed the quarterly and annual reports of the Group to ensure compliance with the LR, applicable approved accounting standards and other statutory and regulatory requirements prior to recommending for approval by the Board of Directors. 4. Reviewed 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. 5. Reviewed the resource requirements of the Group Internal Audit function. 6. Met the external auditors during the year in the absence of management.

INTERNAL AUDIT FUNCTION

The Group has in-house Group Internal Audit function whose responsibility is to evaluate and improve the effectiveness of risk management, control and governance processes. The Group Internal Audit function adopts a risk-based methodology in planning and conducting audits by focusing on key risks areas.

The terms of reference of the Group Internal Audit function are clearly spelt out in the approved Group Internal Audit Charter. The Group Internal Audit operates and functions in accordance with the principles of the Charter. The Group Internal Audit reports directly to the Committee, and is independent of the audited activities.

During the financial year, the Group Internal Audit function had undertaken the following activities: 1. Prepared the annual audit plan for approval by the Committee. 2. Performed risk based audit based on the annual audit plan, including follow-up of matters from previous audit reports. 3. Issued internal audit reports to the management on risk management, control and governance issues identified from the risk based audits together with recommendations for improvements in these processes.

The total cost incurred for the Group Internal Audit function in respect of the financial year ended 31 December 2013 amounted to RM567,147 (2012: RM237,124). Annual Report 2013 • PASDEC HOLDINGS BERHAD 37 Statement on Risk Management and Internal Control

RISK MANAGEMENT

The Group has formalised the Risk Management Framework in early 2013. The Risk Management Framework involves all level of management and employees within the Group. Level Roles Review, Communication, RISK MANAGEMENT

AUDIT COMMITTEE (AC) OVERSIGHT UNIT (RMU) : Monitor,

RISK MANAGEMENT WORKING COMMITTEE (RMWC) STRATEGIC LEVEL Consultation

HEAD OF DEPARTMENTS (HOD) TACTICAL LEVEL

RISK CHAMPIONS WORKING LEVEL

RISK AWARENESS FOR ALL EMPLOYEES

Risk Management Working Committee (RMWC) which consists of CEO and Senior Management are overall responsible for implementation of Pasdec’s risk management. They are reporting to Audit Committee on quarterly basis. The Risk Management Unit assists Senior Management to monitor, review, communicates and provides consultation and training for Pasdec’s risk management. The group’s risk management process is depicted below;

Establish the Context COMMUNICATE AND CONSULT MONITOR AND REVIEW

Risk Identification RISK ASSESSMENT Risk Analysis

Risk Evaluation

Risk Treatment 38 PASDEC HOLDINGS BERHAD • Annual Report 2013 Statement on Risk Management and Internal Control

INTERNAL CONTROL

Internal controls are embedded in the Group’s decision making and operations. The followings have been in place and implemented;

1. Clear organization structure with defined reporting lines. 2. Defined level of authorities and lines of responsibilities from operating units up to the Board level to ensure accountabilities for risk management and control activities. 3. A detailed budgeting process for each business which is approved by both operating level and the Board. 4. Periodic reporting of actual results and review against the budget. 5. Regular information provided by Management to the Board and its committees, covering financial performance and key performance indicators including staff utilization and cash flow. 6. Review and award of contracts by Tender Committee. A minimum of three quotations is called for and tenders are awarded based on criteria such as pricing, quality, track record and speed of delivery. 7. Clearly documented standard operating procedures manuals which set out policies and procedures for day to day operations to be carried out. Regular reviews are performed to ensure that documentation remains current and relevant. Pasdec is an ISO 9001:2008 certified company. 8. Periodic examination of business processes and the state of internal control by the internal audit function. Reports on the reviews carried out by the internal audit function are submitted on a regular basis to the Audit Committee.

In order to strengthen internal controls and in view of good governance, in early 2013 a whistle blowing policy and an internal control manual was introduced.

The Board acknowledges its responsibility of ensuring the effectiveness of risk management system and adequacy of the internal control system, financial, operational and compliance controls within the Group. The Board shall also periodically review all internal control mechanism as to ensure its strengths are being maintained and weaknesses are being remedied. The Board, however, does not regularly review the internal control system of its associated companies, as the Board does not have any direct control over their operations. Annual Report 2013 • PASDEC HOLDINGS BERHAD 39 Additional Compliance Information

The information set out below is disclosed in compliance with Appendix 9C, Part A of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad:-

1. Utilisation of Proceeds

No proceeds were raised by the Company from any corporate proposal during the financial year.

2. Share Buybacks

The Company did not carry out any share buybacks during the financial year.

3. Options, Warrants or Convertibles Securities

The Company did not issue any options, warrants or convertible securities during the financial year.

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

The Company did not sponsor any ADR or GDR programme during the financial year.

5. Sanctions/Penalties

There were no public sanctions and/or penalties imposed on the Company and its subsidiaries, Directors and Management by the relevant regulatory bodies during the financial year.

6. Non-audit fees

The amount of non-audit fees incurred by the Company and its subsidiaries for services rendered by the external auditors or their associates for the financial year amounted to RM219,704.

7. Variation In Results

The Company did not make any release on the profit estimate, forecast or projection for the financial year. There is no material variance between the results for the financial year and the unaudited results previously released by the Company.

8. Profit Guarantee

The Company did not give any profit guarantees during the financial year.

9. Material Contracts Involving Directors and Major Shareholders

There were no material contracts including contracts relating to loans (not being contracts entered into in the ordinary course of business) entered into by the Company and its subsidiaries which involved Directors’ and major shareholders’ interests either still subsisting at the end of the financial year ended 31 December 2013 or entered into since the end of the previous financial year.

10. Recurrent Related Party Transactions of a Revenue or Trading Nature

The Company will not be seeking shareholders’ mandate for recurrent related party transactions of a revenue or trading nature (“Recurrent Transactions”) entered or to be entered into by the Company and/or its subsidiaries (“the Group”) as required under Paragraph 10.09 of the Main Market Listing Requirements and Practice Note 12 of Bursa Malaysia Securities Berhad since the Group does not expect the yearly aggregate value of the Recurrent Transactions entered or to be entered into with any related party to exceed the prescribed threshold limit. 40 PASDEC HOLDINGS BERHAD • Annual Report 2013 Corporate Events

MARCH

MARCH 11 Bandar Putra Housing Projects key handover.

APRIL APRIL 15 PASDEC Automotive Technologies - Official Opening of the VWSA Line Annual Report 2013 • PASDEC HOLDINGS BERHAD 41 Corporate Events

JUNE

JUNE 15 JUNE 26 & 27 Pasdec community outreach at Rumah Anak Yatim Stakeholders meeting with the local authorities and public for Small Nur Iman, Kuantan. Hydro projects at Raub and Bentong. The Group’s commitment for the community is an immense responsibility

JUNE 28 PASDEC 17th Annual General Meeting at Hyatt Regency Kuantan Resort, Teluk Chempedak, Kuantan. 42 PASDEC HOLDINGS BERHAD • Annual Report 2013 Corporate Events

JULY

JULY 4 JULY 23 Football academy sponsorship Launching ceremony and seminar of ‘Data Centre’ for the - First Touch Kuantan. One of PASDEC initiatives in supporting government agencies at Zenith Hotel, Kuantan organized by local sport’s development. ‘Pasdec Technology Centre & Services’.

JULY 19 Fund Contribution to numbers of Mosque at PASDEC’s residential areas during the Holy month of Ramadhan 2013. This is another way of The Group’s effort in giving back to the community.

JULY 29 Pasdec Damansara’s ‘Phase 1, Package 2’ Double-Storey linked houses key handover to the home buyers. Annual Report 2013 • PASDEC HOLDINGS BERHAD 43 Corporate Events

AUGUST AUGUST 8 Corporate Social Responsibility - Pasdec has sponsors significant cash donations, the provision of sports equipment, the upgrading of the schools media centre and the infrastructural needs of the Molelwaneng Primary School in Lethlabile, South Africa.

SEPTEMBER

SEPTEMBER 7 SEPTEMBER 20, 21- 22 ECO Walk & Hunt at Taman Bandar,Kuantan in conjunction PASDEC Annual Sales Carnival 2013 at Kuantan Parade, with PASDEC Sales Carnival 2013. This event also part of The Kuantan launched by YB Dato’ Wan Rosdy b. Wan Ismail. Group social responsibilities as we promote the eco-friendly awareness to the public during this event. 44 PASDEC HOLDINGS BERHAD • Annual Report 2013 Corporate Events

OCTOBER NOVEMBER OCTOBER 16 NOVEMBER 15-18 Corporate Relationship Hari Raya Aidiladha’s Program and fund contribution for PASDEC participation in the 3rd Federation of Public Listed PASDEC Damansara’s residents and Bandar Putra’s residents. Companies (FPLC) Inter-Media Bowling Cup 2013 at U-Bowl This is part of our community services for the neighborhood. One Utama, Selangor. The event was launched by FPLC President, Tan Sri Dato’ Seri Megat Najmuddin Khas. NOVEMBER 25 PASDEC Automotive Technologies (PAT) DECEMBER Launching of New Production Line in Plant 2 of PAT in Brits, South Africa.

DECEMBER 24 Balok Perdana’s ‘3A2 Zone’ residential project key handover.

DECEMBER 3-6 Community Service – A task force has been set up during ‘Flood Disaster’ hits Kuantan. PASDEC Volunteers distributed Mineral Water and foods to the ‘Flood Victims Evacuation Centre’ in Kuantan and Pekan area. DECEMBER 30 In-House Seminar On Roles & Responsibility of Directors on Financial Statements This seminar, jointly organised with Tricor Malaysia, was attended by all Directors and Senior Managers as well as several directors of the subsidiaries of Pahang State. Annual Report 2013 • PASDEC HOLDINGS BERHAD 45 Analysis of Shareholdings As at 24 April 2014

Authorised Share Capital : RM500,000,000 Issued and Paid-up Capital : RM205,978,000 Class of Shares : Ordinary Shares of RM1.00 each Voting Rights : One vote per shareholder on a show of hands or one vote per ordinary share on a poll

Analysis Of Shareholdings

No. Of No. Of Size Of Shareholdings Shareholders % Shares % 1 - 99 6 0.13 170 0.00 100 – 1,000 1,640 36.44 1,613,537 0.78 1,001 – 10,000 2,072 46.03 9,286,710 4.51 10,001 – 100,000 685 15.22 22,050,133 10.71 100,001 – 10,298,899(*) 96 2.13 53,545,000 26.00 10,298,900 and above (**) 2 0.04 119,482,450 58.01 Total 4,501 100.00 205,978,000 100.00

Remark:

* Less than 5% of issued holdings ** 5% and above of issued holdings

Directors’ Shareholdings

Direct Indirect No. Of No. Of No Name Shares Held % Shares Held % 1. Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob - - - - 2. Dato’ Abdul Ghani bin L. Sulaiman - - - - 3. Dato’ Haji Lias bin Mohd Noor - - - - 4. Dato’ Dr. Hamdan bin Jaafar - - - - 5. Dato’ Haji Mohamad Nor bin Ali - - - - 6. Dato’ Mohamed Amin bin Haji Daud - - - - 7. Dato’ Sri Khalid bin Mohamad Jiwa - - - - 8. Dato’ Abdullah bin A. Rasol - - - - 9. Dato’ Haji Abdul Rahim bin Mohd Ali 10,000 0.004 - - (appointed on 25 April 2014)

46 PASDEC HOLDINGS BERHAD • Annual Report 2013 Analysis of Shareholdings As at 24 April 2014

Substantial Shareholders

Direct Indirect No. Of No. Of Name Shares Held % Shares Held % Perbadanan Kemajuan Negeri Pahang 106,395,650 51.65 - - Buma Bina Sdn. Bhd. 18,563,800 9.01 - -

Thirty Largest Shareholders (Without Aggregating Securities From Different Securities Accounts Belonging To The Same Person)

No. Name No. Of Shares % 1. Bank Kerjasama Rakyat Malaysia Berhad - Perbadanan Kemajuan Negeri Pahang 100,918,650 48.99 2. Buma Bina Sdn. Bhd. 18,563,800 9.01 3. HLIB Nominees (Tempatan) Sdn. Bhd. - Hong Leong Fund Management Sdn. Bhd. for Pembinaan Sri Jati Sdn. Berhad 9,929,400 4.82 4. Perbadanan Kemajuan Negeri Pahang 4,300,000 2.09 5. Chin Kian Fong 2,663,600 1.29 6. Yeoh Kean Hua 2,140,000 1.04 7. Poo Choo @ Ong Poo Choi 1,709,800 0.83 8. S’ng Hooi Seah 1,524,400 0.74 9. Alliance Group Nominees (Tempatan) Sdn. Bhd. - Tan Kian Chuan 1,220,000 0.59 10. Perbadanan Kemajuan Negeri Pahang 1,177,000 0.57 11. Cimsec Nominees (Tempatan) Sdn. Bhd. - Teh Swee Heng 1,076,200 0.52 12. RHB Nominees (Tempatan) Sdn. Bhd. - Kua Jing Kea @ Kua Nee Nee 1,065,000 0.52 13. Chin Khee Kong & Sons Sdn. Bhd. 1,036,000 0.50 14. Gan Ah Kow 1,020,000 0.50 15. Gan Ah Kow 993,000 0.48 16. Ooi Chai Tiew 902,200 0.44 17. Lee Chee Heang 900,000 0.44 Annual Report 2013 • PASDEC HOLDINGS BERHAD 47 Analysis of Shareholdings As at 24 April 2014

Thirty Largest Shareholders (Without Aggregating Securities From Different Securities Accounts Belonging To The Same Person) (Cont’d)

No. Name No. Of Shares % 18. Zenith Aim Sdn Bhd 867,900 0.42 19. Chuang Show Chuan 834,800 0.41 20. Chin Sin Lin 814,300 0.40 21. RHB Nominees (Tempatan) Sdn. Bhd. - Chin Kiam Hsung 785,000 0.38 22. Kenanga Nominees (Tempatan) Sdn. Bhd. - Chin Kiam Hsung 701,800 0.34 23. Tan Swee Heng 611,000 0.30 24. TA Nominees (Tempatan) Sdn. Bhd. - Chuang Nee Wang Kim Lien 571,600 0.28 25. Tew Khim Thin 520,000 0.25 26. Tan Yee Ming 500,100 0.24 27. Alliance Group Nominees (Tempatan) Sdn. Bhd. - Koay Chee Hong 480,000 0.23 28. Ciptaan Meriang Sdn Bhd 460,000 0.22 29. Tan Sei Han 409,000 0.20 30. Alliance Group Nominees (Tempatan)Sdn. Bhd. - Pheng Yin Huah 400,000 0.19 159,094,750 77.24 48 PASDEC HOLDINGS BERHAD • Annual Report 2013 List of Properties As at 31 December 2013

Decription of Prop/ Projects Lot/PT Existing NB Value (RM) Year of No Description Titles No No Tenure Use Area (Ac) @31-12-2013 Remarks Acquisition KUANTAN 1 Kuantan PN5601 Lot 38 L/hold 99 yrs Commercial 2.168 2,034,466.00 Block title 1996 Waterfront, Sek 12 (23.04.2072) Bandar Kuantan 2 Pasdec Pesona, PN7736 Lot L/hold 99 yrs Vac Land/ 19.480 3,761,539.00 Indiv. 1996 Paya Tiga, 108560 (18.04.2105) Bldg Res titles Mukim Kuala Kuantan 3 Kuantan Piazza, HSM PT L/hold 99 yrs Vac Land/ 5.930 1,102,493.00 Block title Tg Lumpur, 65652 83065 (17.04.2106) Bldg Comm Mukim Kuala Kuantan 4 Harbour Park, 3/3/24313 L/hold 99 yrs Vac Land/ 164.000 1,079,244.00 Block title 1997 Tg Gelang Industry Industrial Area 5 Bukit Tenggek, HSD PT 992 L/hold 99 yrs Vac Land/ 49.420 425,849.00 Block title 1996 Mukim Ulu 15538 (03.06.2095) Bldg Res Kuantan 6 Astana Villa, HSM PT L/hold 99 yrs Vac Land/ 16.000 4,536,041.00 Indiv. 1998 Bandar Indera (22.05.2092) Bldg Res titles Mahkota 7 Astana Hotel, HSM PT L/hold 99 yrs Vac Land 4.930 1,397,668.00 Block title 1998 Bandar Indera 28692 30731 (22.05.2092) Mahkota 8 Astana HSM PT L/hold 99 yrs Vac Land 2.510 711,591.00 Block title 1998 Maintenance 28693 30733 (22.05.2092) Center, Bandar Indera Mahkota 9 Pasdec Avenue, HSD PT L/hold 99 yrs Vac Land/ 28.961 13,556,720.00 Block title 2007 Sektor 3, Bandar 34943 102786 (30.05.2096) Bldg Res Indera Mahkota 10 Mahkota Idaman HSM PT L/hold 99 yrs Commercial 0.300 1,352,000.00 Indiv title 1996 (6 Lots), 44389- 55557 (24.05.2097) Building Sector 3, BIM 11 Mahkota HSD PT L/hold 99 yrs Vac Land/ 2.610 Block title 1996 Perdana III, 24695 78434 (29.04.2102) Bldg Res Sector 3, BIM 12 Apartment L/hold 99 yrs Apartment 1,005,098.00 Strata 1996 Medan Warisan (12.04.2086) title (9 units) Annual Report 2013 • PASDEC HOLDINGS BERHAD 49 List of Properties As at 31 December 2013

Decription of Prop/ Projects Lot/PT Existing NB Value (RM) Year of No Description Titles No No Tenure Use Area (Ac) @31-12-2013 Remarks Acquisition KUANTAN 13 Kuantan PN4075 Lot 9 L/hold 99 yrs Residential 13.210 5,946,211.00 Strata 1992 Tembeling Resort (12.12.2092) Building title 14 Vista Verde GM 10006/7 Freehold Residential 14,380,809.00 Indiv. 2010 16993/4 Building titles 15 Bandar Putra HSD PT Freehold Vac Land/ 4.330 Block title 2003 -Condo 28947 90709 Bldg Res 16 Bandar Putra HSD PT Freehold Vac Land/ 24.590 Block title 2003 (1226) 29913 91675 Bldg Comm 17 Bandar Putra HSD PT Freehold Vac Land/ 110.720 Block title 2003 (1221) 29908 91670 Agriculture 70,675,462.00 18 Bandar Putra HSD PT Freehold Vac Land/ 49.780 Block title 2003 (1228) 29915 91677 Agriculture 19 Bandar Putra HSD PT Freehold Vac Land/ 32.277 Indiv. 2003 (SD) Bldg Res titles 20 Damansara Zon HSD PT. Freehold Vac Land/ 4.110 Indiv. 2005 2A2 Fasa 3 Bldg Res. titles 21 Damansara Zon HSD PT. Freehold Vac Land/ 13.410 Indiv. 2005 2A2 Fasa 4 Bldg Res. titles 22 Damansara HSD PT Freehold Vac Land/ 20.241 Block title 2013 Block 11 41876 17433 Agriculture 23 Damansara HSD PT Freehold Vac Land/ 5.673 Block title 2013 Block 13 41877 17435 Agriculture 24 Damansara HSD PT Freehold Vac Land/ 34.045 Block title 2013 Block 14 41879 17436 Agriculture 25 Damansara HSD PT Freehold Vac Land/ 20.252 Block title 2013 Block 15 41890 5983 Industrial 26 Damansara HSD PT Freehold Vac Land/ 12.233 Block title 2013 Block 16 41880 17453 Agriculture 27 Damansara HSD PT Freehold Vac Land/ 98.705 Block title 2013 Block 17 4881 17438 Agriculture 28 Damansara HSD PT Freehold Vac Land/ 3.373 Block title 2013 Block 21 41888 5986 Agriculture 29 Damansara HSD PT Freehold Vac Land/ 8.569 Block title 2013 Block 23 41891 5988 Agriculture 30 Damansara HSD PT Freehold Vac Land/ 3.127 Block title 2013 Block 26 41894 5991 Agriculture 50 PASDEC HOLDINGS BERHAD • Annual Report 2013 List of Properties As at 31 December 2013

Decription of Prop/ Projects Lot/PT Existing NB Value (RM) Year of No Description Titles No No Tenure Use Area (Ac) @31-12-2013 Remarks Acquisition KUANTAN 31 Damansara HSD PT Freehold Vac Land/ 43.972 Block title 2013 Block 37 41898 5999 Agriculture

32 Damansara HSD PT Freehold Vac Land/ 10.000 41,381,266.00 Block title 2013 Block 38 41899 6000 Agriculture 33 Damansara HSD PT6002 Freehold Vac Land/ 13.304 Block title 2013 Block 40 41900 Agriculture 34 Damansara HSD PT6008 Freehold Vac Land/ 17.215 Block title 2013 Block 46 41905 Agriculture 35 Damansara HSD PT Freehold Vac Land/ 1.977 Block title 2013 Block 55 41883 17443 Agriculture 36 Damansara HSD PT Freehold Vac Land/ 8.725 Block title 2013 Block 57 41884 17445 Agriculture 37 Damansara PT8078- Freehold Vac Land/ 21.316 Indiv. 2013 (Lowcost) PT8457 Bldg Res. titles 38 Balok Perdana HSD PT. L/hold 99 yrs Vac Land/ 2.940 Indiv. 1996 Zon 2AF2 (16.01.99) Bldg Comm titles (33 Lots) 39 Balok Perdana HSD PT. L/hold 99 yrs Vac Land/ 4.667 Indiv. 1996 Zon 2AF3 (16.01.99) Bldg Comm titles (56 Lots) 40 Balok Perdana HSD PT. L/hold 99 yrs Vac Land/ 6.380 Indiv. 1996 Zon 2AF4 (16.01.99) Bldg Comm titles (73 Lots) 41 Balok Perdana HSD PT9314 L/hold 99 yrs Vac Land/ 33.186 Block title 1996 Zon 2B 23616 (16.01.99) Bldg Comm 42 Balok Perdana HSD PT9315 L/hold 99 yrs Vac Land/ 2.594 8,789,168.00 Block title 1996 Zon 2C 23617 (16.01.99) Bldg Comm 43 Balok Perdana PN Lot L/hold 99 yrs Residential 5.590 Indiv. 1996 Zon 3AF2 7467 11083 (16.01.99) titles (42 Lots) 44 Balok Perdana -sda- L/hold 99 yrs Residential 2.250 Indiv. 1996 Zon 3AF3 (16.01.99) titles (26 Lots) 45 Balok Perdana -sda- L/hold 99 yrs Residential 3.550 Indiv. 1996 Zon 3AF4 (16.01.99) titles (34 Lots) Annual Report 2013 • PASDEC HOLDINGS BERHAD 51 List of Properties As at 31 December 2013

Decription of Prop/ Projects Lot/PT Existing NB Value (RM) Year of No Description Titles No No Tenure Use Area (Ac) @31-12-2013 Remarks Acquisition KUANTAN 46 Balok Perdana -sda- L/hold 99 yrs Residential 2.470 Indiv. 1996 Zon 3AF5 (16.01.99) titles (37 Lots) 47 Balok Perdana -sda- L/hold 99 yrs Residential 7.854 Indiv. 1996 Zon 3AF6 (16.01.99) titles (56 Lots) 48 Balok Perdana PN Lot L/hold 99 yrs Vac Land/ 6.724 Pros to 1996 Zon 3AF7 12807 11084 (16.01.99) Bldg Res sub 18,131,805.00 49 Balok Perdana PN Lot L/hold 99 yrs Vac Land/ 1.630 Pros to 1996 Zon 3C2 7467 11083 (16.01.99) Bldg Res sub 50 Balok Perdana PN Lot L/hold 99 yrs Vac Land/ 14.600 Block title 1996 Zon 4 4500 9730 (16.01.99) Bldg Res 51 Balok Perdana PN Lot L/hold 99 yrs Vac Land/ 14.522 Pros to 1996 Zon 5 14854 11093 (16.01.99) Bldg Res sub 52 Balok Perdana PN Lot 9731 L/hold 99 yrs Vac Land/ 33.200 Block title 1996 Zon 6 4501 (16.01.99) Bldg Res 53 Chendor PN Lot L/hold 99 yrs Vac Land/ 5.956 Block title 1997 Utama 1 11523 27002 (30.09.2100) Bldg Comm 54 Chendor PN Lot L/hold 99 yrs Vac Land/ 16.375 Block title 1997 Utama 2 17358 30406 (30.09.2100) Bldg Comm 55 Chendor PN Lot L/hold 99 yrs Vac Land/ 77.416 Block title 1997 7,009,115 Utama 3 17359 30407 (30.09.2100) Bldg Res 56 Chendor PN Lot L/hold 99 yrs Vac Land/ 60.737 Block title 1997 Utama 4 17360 30408 (30.09.2100) Bldg Res 57 Chendor PTK.3/3/ L/hold 99 yrs Vac Land/ 621.160 Block title 2012 Perdana 23255- Agric. 58 K. Teruntum PN Lot 146 L/hold 99 yrs Building/ 1,352,512.00 1991 (Lot 2.15, 2.16, 398 Sek 18 (08.06.2075) Commercial 3.13-3.15, G19 20,2.20-2.23) PEKAN 59 Commercial HSD PT 3.108 1,243,630 Indiv. Peramu Pekan 4389- 12189 - titles ROMPIN 60 Kampung HSD PT L/hold 99 yrs Vac Land/ 391.360 187,556.00 Block title 1996 Sembayan 1, 3329 2545 (15.01.2094) Agric. Mukim Rompin 52 PASDEC HOLDINGS BERHAD • Annual Report 2013 List of Properties As at 31 December 2013

Decription of Prop/ Projects Lot/PT Existing NB Value (RM) Year of No Description Titles No No Tenure Use Area (Ac) @31-12-2013 Remarks Acquisition ROMPIN 61 Kampung HSD PT L/hold 99 yrs Vac Land/ 468.930 Block title 1996 Sembayan 2, 3330 2546 (15.01.2094) Agric. Mukim Rompin 258,581.00 62 Rompin Permai HSM PT Freehold Vac Land/ 0.570 Indiv. 1996 (20 Lots) Bldg Res. titles MARAN 63 Kuari Kampung HSD PT L/hold 21 yrs Quarry 17.170 91,673.00 Block title 1996 Kuala Sentul, 605 8139 (14.08.2015) Mukim Chenor 64 Land at Mukim HSD PT Vac Land/ 28.071 1,019,125.00 Block title 2011 Chenor, Maran 838 21297 Bldg Res. TEMERLOH 65 Kimdec 1, Mukim GRN Lot Freehold Vac Land/ 25.532 Block title 2011 Mentakab 5979 1207 Bldg Res. 66 Kimdec 2, Mukim GRN Lot Freehold Vac Land/ 30.375 Block title 2011 Mentakab 7229 1131 Bldg Res. 67 Kimdec 3, Mukim GRN Lot Freehold Vac Land/ 25.250 22,537,760 Block title 2011 Mentakab 7325 1208 Bldg Res. 68 Kimdec 4, Mukim HSD PT Freehold Vac Land/ 4.459 Indiv. 2011 Mentakab (99 Bldg Res. titles Lots) 59 Pasdec Idaman, GM Lot 916/ Freehold Vac Land/ 8.015 6,125,829 Indiv. 2011 Paya Pulai 345/722 2194 Bldg Res. titles JERANTUT 69 Kuala Tembeling HSD391 PT667 L/hold 99 yrs Vac Land/ 12.500 Block title 1996 1, Mukim Kuala (11.03.2076) Bldg Res. Tembeling 70 Kuala Tembeling HSD392 PT668 L/hold 99 yrs Vac Land/ 79.880 Block title 1996 2, Mukim Kuala (11.03.2076) Bldg Res. Tembeling 71 Kuala Tembeling HSD393 PT669 L/hold 99 yrs Vac Land/ 4.000 330,944.00 Block title 1996 3, Mukim Kuala (11.03.2076) Bldg Res. Tembeling 72 Kuala Tembeling HSD394 PT670 L/hold 99 yrs Vac Land/ 19.000 Block title 1996 4, Mukim Kuala (11.03.2076) Bldg Res. Tembeling Annual Report 2013 • PASDEC HOLDINGS BERHAD 53 List of Properties As at 31 December 2013

Decription of Prop/ Projects Lot/PT Existing NB Value (RM) Year of No Description Titles No No Tenure Use Area (Ac) @31-12-2013 Remarks Acquisition BENTONG 73 Bukit Tinggi HSD1 PT L/hold 99 yrs Vac Land/ 90.490 35,652,375.00 Block title 4686 18197 (01.09.2101) Bldg Res. RAUB 74 Raub Perdana 1 HSD PT L/hold 99 yrs Building/ 0.510 - Indiv. 1996 (33 Lots) 6838- 16730 (03.01.2093) Commercial titles 75 Cheroh Perdana HSD3143 PT L/hold 99 yrs Vac Land/ 3.750 - Indiv. 1996 3 (22 Lots) 9367 (19.04.2086) Bldg Res. titles 76 Quarry Land HSD Lot L/hold 21 yrs Industrial / 19.970 206,421.00 Block title 1996 Kg. Besu 10608 1595 (11.07.2023) Quarry CAMERON HIGHLAND 77 Lembah Ruil F2 HSD PT L/hold 60 yrs Vac Land/ 113.390 209,584.00 Block title 2011 4179 2497 (14.12.2052) Agric. TOTAL 3,141.594 155,179,471.000 Financial Statements 55 Directors’ Report 59 Statement by Directors 59 Statutory Declaration 60 Independent Auditors’ Report 62 Statements of Profit or Loss and Other Comprehensive Income 64 Statements of Financial Position 66 Statements of Changes in Equity 69 Statements of Cash Flows 71 Notes to the Financial Statements 161 Supplementary Information Annual Report 2013 • PASDEC HOLDINGS BERHAD 55 Directors’ Report

The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2013.

Principal activities

The principal activities of the Company are investment holding and provision of management services to the subsidiaries.

The principal activities of the subsidiaries are described in Note 18 to the financial statements. There have been no significant changes in the nature of the principal activities during the financial year.

Results

Group Company RM RM Profit net of tax 13,415,681 12,332,076

Profit attributable to: Owners of the parent 13,058,543 12,332,076 Non-controlling interests 357,138 - 13,415,681 12,332,076

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

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature other than:

(a) the effects arising from the changes in accounting policies due to the adoption of FRS 119 Employee Benefits which has resulted in a decrease in the Group’s and the Company’s retained earnings by RM370,863 and RM74,153 as at 1 January 2012 respectively as disclosed in Note 2.2 to the financial statements.

(b) the effect arising from the impairment of goodwills which has resulted in a decrease in the Group’s retained earnings by RM15,647,938 as disclosed in Note 17 to the financial statements.

(c) the effect arising from the impairment of investment in a subsidiary which has resulted in a decrease in the Group’s retained earnings by RM57,299,279 as disclosed in Note 18 to the financial statements. 56 PASDEC HOLDINGS BERHAD • Annual Report 2013 Directors’ Report

Dividends

At the forthcoming Annual General Meeting, a final tax exempt (single-tier) dividend in respect of the financial year ended 31 December 2013, of 4% on 205,978,000 ordinary shares, amounting to a dividend payable of RM8,239,120 (4 sen per ordinary share) will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2014.

Directors

The names of the directors of the Company in office since the date of the last report and at the date of this report are:

Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob Dato’ Abdul Ghani bin L. Sulaiman Dato’ Haji Lias bin Mohd. Noor Dato’ Dr. Hamdan bin Jaafar Dato’ Abdullah @ Mohamad Nor bin Ali Dato’ Mohamed Amin bin Haji Daud Dato’ Sri Khalid bin Mohamad Jiwa Dato’ Abdullah bin A. Rasol

Directors’ benefits

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full-time employee of the Company as shown in Note 11 and Note 34 to the financial statements) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

Directors’ interest

None of the directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year. Annual Report 2013 • PASDEC HOLDINGS BERHAD 57 Directors’ Report

Exchangeable bonds

On 15 November 2006, the Company issued RM150 million Rainbow Exchangeable Bonds (“REBs”) at 100% of its nominal value comprising two (2) series as follows:-

(a) RM15 million REBs (“Series I”) exchangeable into 4,792,333 ordinary shares of Road Builder (M) Holdings Berhad issued for a maturity of 5 years from the issue date; and

(b) RM135 million REBs (“Series II”) exchangeable into 40,785,500 ordinary shares of YTL Cement Berhad issued for a maturity of 7 years from the issue date.

Series I REBs have been fully exchanged in prior years. During the year, the entire RM135 million nominal amount of REBs under Series II have been redeemed. Details of the REBs are disclosed in Note 29 to the financial statements.

Other statutory information

(a) Before the statements of profit or loss and other comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.

(b) At the date of this report, the directors are not aware of any circumstances which would render:

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

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading. 58 PASDEC HOLDINGS BERHAD • Annual Report 2013 Directors’ Report

Other statutory information (Cont’d)

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

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

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

(f) In the opinion of the directors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and

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

Significant events

The significant events during the year are as disclosed in Note 39 to the financial statements.

Subsequent event

Details of subsequent event are disclosed in Note 40 to the financial statements.

Auditors

The auditors, Hanafiah Raslan & Mohamad, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors dated 24 April 2014.

Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob Dato’ Abdul Ghani bin L. Sulaiman Annual Report 2013 • PASDEC HOLDINGS BERHAD 59 Statement by Directors Pursuant to Section 169 (15) of the Companies Act 1965

We, Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob and Dato’ Abdul Ghani bin L. Sulaiman, being the directors of Pasdec Holdings Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 62 to 160 are drawn up in accordance with Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2013 and of their financial performance and cash flows for the year then ended.

The information set out in Note 43 to the financial statements have been prepared in accordance with the Guidance of Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Signed on behalf of the Board in accordance with a resolution of the directors dated 24 April 2014.

Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob Dato’ Abdul Ghani bin L. Sulaiman

Statutory Declaration Pursuant to Section 169 (16) of the Companies Act 1965

I, Goh Song Han, (NRIC No.: 621218-06-5483) being the officer primarily responsible for the financial management of Pasdec Holdings Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 62 to 161 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed Goh Song Han at Kuantan in the state of Pahang Darul Makmur on 24 April 2014. Goh Song Han

Before me, 60 PASDEC HOLDINGS BERHAD • Annual Report 2013 Independent Auditors’ Report To the members of Pasdec Holdings Berhad (Incorporated in Malaysia)

Report on the financial statements

We have audited the financial statements of Pasdec Holdings Berhad, which comprise statements of financial position as at 31December 2013 of the Group and the Company, and statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 62 to 160.

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 at 31December 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. Annual Report 2013 • PASDEC HOLDINGS BERHAD 61 Independent Auditors’ Report To the members of Pasdec Holdings Berhad (Incorporated 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 of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 18 to the financial statements, being financial statements that have been included in the consolidated financial statements.

(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes.

(d) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification material to the consolidated financial statements and did not include any comment required to be made under Section 174(3) of the Act.

Other reporting responsibilities

The supplementary information set out in Note 43 on page 161 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

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.

Hanafiah Raslan & Mohamad Mohd Sukarno bin Tun Sardon AF: 0002 No. 1697/03/15(J) Chartered Accountants Chartered Accountant

Kuantan, Pahang, Malaysia 24 April 2014 62 PASDEC HOLDINGS BERHAD • Annual Report 2013 Statements of Profit or Loss and Other Comprehensive Income For the financial year ended 31 December 2013

Group Company Note 2013 2012 2013 2012 RM RM RM RM Restated Restated Revenue 4 132,948,250 161,974,596 82,013,920 12,025,920 Cost of sales 5 (100,624,546) (93,892,130) - - Gross profit 32,323,704 68,082,466 82,013,920 12,025,920

Other items of income: Interest income 6 670,740 793,763 3,309,810 18,010,507 Other income 7 47,300,508 23,174,271 4,250,614 14,299,337

Other items of expense: Administrative expenses (28,304,888) (20,420,236) (10,803,336) (7,734,439) Other expenses (33,015,670) (46,454,715) (62,104,910) (16,254,305) Finance costs 8 (4,825,606) (6,790,394) (4,871,364) (4,110,599)

Share of (loss)/profit of associates (79,383) 769,344 - -

Profit before tax 9 14,069,405 19,154,499 11,794,734 16,236,421 Income tax (expense)/benefit 12 (653,724) (9,094,760) 537,342 (5,214,906) Profit net of tax 13,415,681 10,059,739 12,332,076 11,021,515

Profit attributable to: Owners of the parent 13,058,543 8,758,556 12,332,076 11,021,515 Non-controlling interests 357,138 1,301,183 - - 13,415,681 10,059,739 12,332,076 11,021,515

Earnings per share attributable to equity holders of the Company (sen): Basic earnings per share 13 6.34 4.25 Annual Report 2013 • PASDEC HOLDINGS BERHAD 63 Statements of Profit or Loss and Other Comprehensive Income For the financial year ended 31 December 2013

Group Company Note 2013 2012 2013 2012 RM RM RM RM Restated Restated Other comprehensive loss Other comprehensive loss to be reclassified to profit or loss in subsequent periods:

Net (loss)/gain on available-for-sale financial assets - (Loss)/gain on fair value changes (2,056,988) 16,518,924 - - - Transfer to profit or loss upon disposal 7 (35,252,364) (14,276,708) - - Foreign currency translation (2,623,696) (2,855,061) - -

Net other comprehensive loss to be reclassified to profit or loss in subsequent periods (39,933,048) (612,845) - -

Other comprehensive loss not to be reclassified to profit or loss in subsequent periods:

Net loss on remeasurement of defined benefit liability (354,719) (105,480) (314,813) (30,691)

Other comprehensive loss for the year, net of tax (40,287,767) (718,325) (314,813) (30,691)

Total comprehensive (loss)/income for the year, net of tax (26,872,086) 9,341,414 12,017,263 10,990,824

Total comprehensive (loss)/income attributable to: Owners of the parent (27,184,109) 8,227,948 12,017,263 10,990,824 Non-controlling interests 312,023 1,113,466 - - (26,872,086) 9,341,414 12,017,263 10,990,824

The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 64 PASDEC HOLDINGS BERHAD • Annual Report 2013 Statements of Financial Position For the financial year ended 31 December 2013

Group Company Note 2013 2012 1.1.2012 2013 2012 1.1.2012 RM RM RM RM RM RM Restated Restated Restated Restated Assets Non-current assets Property, plant and equipment 14 18,839,609 15,132,628 15,744,920 1,245,146 779,280 810,023 Land held for property development 15(a) 129,217,286 100,674,768 141,194,472 - - - Investment properties 16 8,290,273 9,815,196 10,049,188 - - - Investments in subsidiaries 18 - - - 164,148,467 221,396,748 66,531,233 Investments in associates 19 20,982,003 19,466,549 20,081,507 - - - Marketable securities 24 589,225 54,265,281 63,376,719 - - - Deferred tax assets 33 6,460,486 7,471,414 11,007,820 - - 409,979 Intangible asset 17 - 15,647,938 30,327,648 - - - 184,378,882 222,473,774 291,782,274 165,393,613 222,176,028 67,751,235

Current assets Property development costs 15(b) 163,568,950 136,809,341 89,510,841 - - - Inventories 20 69,975,032 73,482,283 77,370,736 - - - Trade and other receivables 21 63,709,927 61,698,702 60,836,396 107,927,431 65,564,580 221,014,078 Other current assets 22 17,391,827 17,983,844 4,166,358 2,277,558 141,820 247,809 Cash and bank balances 25 17,760,412 24,086,874 33,002,510 14,555 6,031,160 11,208,305 332,406,148 314,061,044 264,886,841 110,219,544 71,737,560 232,470,192 Total assets 516,785,030 536,534,818 556,669,115 275,613,157 293,913,588 300,221,427

Equity and liabilities

Current liabilities Retirement benefit obligations 26 322,983 110,000 292,039 286,647 32,006 58,393 Loans and borrowings 27 47,391,074 68,513,787 43,238,316 82,585 29,973,371 80,295 Trade and other payable 30 63,414,350 62,718,277 73,234,565 5,559,024 9,841,629 8,416,337 Tax payable 241,668 1,984,099 136,704 - - - 111,370,075 133,326,163 116,901,624 5,928,256 39,847,006 8,555,025 Annual Report 2013 • PASDEC HOLDINGS BERHAD 65 Statements of Financial Position For the financial year ended 31 December 2013

Group Company Note 2013 2012 1.1.2012 2013 2012 1.1.2012 RM RM RM RM RM RM Restated Restated Restated Restated Net current assets 221,036,073 180,734,881 147,985,217 104,291,288 31,890,554 223,915,167

Non-current liabilities Retirement benefit obligations 26 5,111,689 4,533,618 3,978,936 4,536,625 1,319,122 795,579 Loans and borrowings 27 49,117,961 24,664,617 73,432,242 568,303 184,750 49,298,937 Other payable 30 8,086,770 4,039,799 - - - - 62,316,420 33,238,034 77,411,178 5,104,928 1,503,872 50,094,516

Total liabilities 173,686,495 166,564,197 194,312,802 11,033,184 41,350,878 58,649,541

Net assets 343,098,535 369,970,621 362,356,313 264,579,973 252,562,710 241,571,886

Equity attributable to owners of the parent Share capital 31 205,978,000 205,978,000 205,978,000 205,978,000 205,978,000 205,978,000 Share premium 43,007,997 43,007,997 43,007,997 45,515,750 45,515,750 45,515,750 Other reserves 32 (17,592,083) 22,295,850 22,720,978 - - - Retained earnings/ (accumulated losses) 109,890,650 97,407,756 88,754,680 13,086,223 1,068,960 (9,921,864) 341,284,564 368,689,603 360,461,655 264,579,973 252,562,710 241,571,886 Non-controlling interests 1,813,971 1,281,018 1,894,658 - - - Total equity 343,098,535 369,970,621 362,356,313 264,579,973 252,562,710 241,571,886

Total equity and liabilities 516,785,030 536,534,818 556,669,115 275,613,157 293,913,588 300,221,427

The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 66 PASDEC HOLDINGS BERHAD • Annual Report 2013 Statements of Changes in Equity For the financial year ended 31 December 2013

Attributable to owners of the parent Non-distributable Distributable Non-distributable Total Premium equity paid on attributable Total Foreign acquisition to owners other Fair value currency of non- Non- Total of the Share Share Retained reserves adjustment translation controlling controlling equity parent capital premium earnings (Note 32) reserve deficit interests interests 2013 RM RM RM RM RM RM RM RM RM RM

Group Opening balance at 1 January 2013 As previously stated 370,445,322 369,164,304 205,978,000 43,007,997 97,882,457 22,295,850 37,449,601 (5,255,480) (9,898,271) 1,281,018 Effects of adopting FRS 119 (474,701) (474,701) - - (474,701) - - - - -

At 1 January 2013 (restated) 369,970,621 368,689,603 205,978,000 43,007,997 97,407,756 22,295,850 37,449,601 (5,255,480) (9,898,271) 1,281,018

Profit for the year 13,415,681 13,058,543 - - 13,058,543 - - - - 357,138 Other comprehensive loss (40,287,767) (40,242,652) - - (354,719) (39,887,933) (37,309,352) (2,578,581) - (45,115)

Total comprehensive (loss)/income (26,872,086) (27,184,109) - - 12,703,824 (39,887,933) (37,309,352) (2,578,581) - 312,023

Transactions with owners (Dilution)/accretion on change in stake - (220,930) - - (220,930) - - - - 220,930

Closing balance at 31 December 2013 343,098,535 341,284,564 205,978,000 43,007,997 109,890,650 (17,592,083) 140,249 (7,834,061) (9,898,271) 1,813,971 Annual Report 2013 • PASDEC HOLDINGS BERHAD 67 Statements of Changes in Equity For the financial year ended 31 December 2013

Group Opening balance at 1 January 2012 As previously stated 362,727,176 360,832,518 205,978,000 43,007,997 89,125,543 22,720,978 35,207,385 (2,588,136) (9,898,271) 1,894,658 Effects of adopting FRS 119 (370,863) (370,863) - - (370,863) - - - - -

At 1 January 2012 (restated) 362,356,313 360,461,655 205,978,000 43,007,997 88,754,680 22,720,978 35,207,385 (2,588,136) (9,898,271) 1,894,658

Profit for the year 10,059,739 8,758,556 - - 8,758,556 - - - - 1,301,183 Other comprehensive (loss)/income (718,325) (530,608) - - (105,480) (425,128) 2,242,216 (2,667,344) - (187,717)

Total comprehensive (loss)/income 9,341,414 8,227,948 - - 8,653,076 (425,128) 2,242,216 (2,667,344) - 1,113,466

Transactions with owners Dividends paid to non-controlling interests (1,727,106) ------(1,727,106)

Closing balance at 31 December 2012 369,970,621 368,689,603 205,978,000 43,007,997 97,407,756 22,295,850 37,449,601 (5,255,480) (9,898,271) 1,281,018

The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 68 PASDEC HOLDINGS BERHAD • Annual Report 2013 Statements of Changes in Equity For the financial year ended 31 December 2013

Non-Distributable Distributable Profit/ Share Share (Accumulated capital premium losses) Total RM RM RM RM Company

Opening balance at 1 January 2013 As previously stated 205,978,000 45,515,750 1,207,081 252,700,831 Effects of adopting FRS 119 - - (138,121) (138,121) As restated 205,978,000 45,515,750 1,068,960 252,562,710

Total comprehensive income - - 12,017,263 12,017,263

Closing balance at 31 December 2013 205,978,000 45,515,750 13,086,223 264,579,973

Opening balance at 1 January 2012 As previously stated 205,978,000 45,515,750 (9,847,711) 241,646,039 Effects of adopting FRS 119 - - (74,153) (74,153) As restated 205,978,000 45,515,750 (9,921,864) 241,571,886

Total comprehensive income - - 10,990,824 10,990,824

Closing balance at 31 December 2012 205,978,000 45,515,750 1,068,960 252,562,710

The accompanying accounting policies and explanatory notes form an integral part of the financial statements. Annual Report 2013 • PASDEC HOLDINGS BERHAD 69 Statements of Cash Flows For the financial year ended 31 December 2013

Group Company Note 2013 2012 2013 2012 RM RM RM RM Restated Restated Operating activities

Profit before taxation 14,069,405 19,154,499 11,794,734 16,236,421 Adjustments for: Reversal of allowance for impairment of trade and other receivables 7 (297,646) (3,661,949) (45,680) (13,400,110) Depreciation of property, plant and equipment 9 1,443,049 1,234,165 186,009 148,504 Depreciation of investment properties 9 145,469 233,992 - - Gain on disposal of quoted investments 7 (35,252,364) (14,276,708) - - Gain on derivative liabilities 9 (3,893,857) (378,971) (3,893,857) (378,971) Gain on disposal of investment properties 9 (774,585) - - - Accretion on change in stake (220,930) - - - Property, plant and equipment written off 9 - 6,957 - - Provision for liquidated ascertained damages 9 224,577 1,256,556 - - Reversal of amortisation on premium and coupon upon redemption of REBs 7 (311,077) (520,256) (311,077) (520,256) Gain on disposal of property, plant and equipment 7 (26,198) (419,894) - - (Reversal)/impairment loss on inventories 9 (572,917) 65,393 - - Impairment loss on investments in subsidiaries 9 - - 57,299,279 10,892,779 Impairment loss of intangible asset 9 15,647,938 14,679,710 - - Waiver of other payables 7 (1,077,249) - - - Impairment loss of property development costs 9 29,314 36,020 - - Share of (loss)/profit of associates 79,383 (769,344) - - Provision for retirement benefits 10 536,090 563,744 965,464 466,465 Impairment loss on receivables 9 3,217,236 883,021 13,200 874,512 Interest expense 8 4,825,606 6,790,394 4,871,364 4,110,599 Interest income 6 (670,740) (793,763) (3,309,810) (18,010,507) Dividend income 4 (802,268) (1,589,021) (70,000,000) - Total adjustments (17,751,169) 3,340,046 (14,225,108) (15,816,985) Operating cash flows before changes in working capital brought forward (3,681,764) 22,494,545 (2,430,374) 419,436 70 PASDEC HOLDINGS BERHAD • Annual Report 2013 Statements of Cash Flows For the financial year ended 31 December 2013

Group Company Note 2013 2012 2013 2012 RM RM RM RM Restated Restated Changes in working capital Increase in receivables (4,930,815) (2,301,077) (40,431,172) (13,205,903) Decrease/(increase) in other current assets 592,017 (12,134,217) (2,135,738) 105,989 Decrease in inventories 4,080,168 3,823,060 - - (Increase)/decrease in land held for development (28,542,518) 40,519,704 - - Increase in property development costs (26,788,923) (47,334,520) - - Increase/(decrease) in payables 11,287,980 (7,566,432) 69,611,252 1,858,702 Total changes in working capital (44,302,091) (24,993,482) 27,044,342 (11,241,212) Income taxes paid (2,377,562) (1,873,876) (3,067,693) (2,382,222) Retirement benefits paid 26 (99,755) (296,581) (99,755) - Net cash flows (used in)/from operating activities (50,461,172) (4,669,394) 21,443,978 (13,203,998)

Investing activities

Acquisition of an associate 19(a) (3,756,750) - - - Proceeds from disposal of investment 46,330,145 12,603,362 - - Purchase of property, plant and equipment (5,667,387) (1,677,484) (169,875) (117,761) Proceeds from disposal of property, plant and equipment 416,277 1,677,568 - - Additional investment in a subsidiary 18 - - (50,998) - Proceeds from disposal of investment properties 2,154,039 - - - Interest received 670,740 793,763 3,309,810 18,010,507 Dividends received 802,268 1,589,021 - - Dividends paid - (1,727,106) - - Net cash flows from investing activities 40,949,332 13,259,124 3,088,937 17,892,746

Financing activities

Proceeds from term loans 44,217,920 4,615,244 - - Repayments of term loans (34,166,472) (13,814,434) (25,613,923) (5,675,000) Repayments of obligations under finance leases (516,413) (221,131) (64,233) (80,294) Interest paid (4,825,606) (6,790,394) (4,871,364) (4,110,599) Net cash flows from/(used in) financing activities 4,709,429 (16,210,715) (30,549,520) (9,865,893) Net decrease in cash and cash equivalents (4,802,411) (7,620,985) (6,016,605) (5,177,145) Cash and cash equivalents at 1 January (8,727,656) (1,106,671) 6,031,160 11,208,305 Cash and cash equivalents at 31 December 25 (13,530,067) (8,727,656) 14,555 6,031,160

The accompanying accounting policies and explanatory notes form an integral part of the financial statements. Annual Report 2013 • PASDEC HOLDINGS BERHAD 71 Notes to the Financial Statements For the financial year ended 31 December 2013

1. Corporate information

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Bursa Malaysia Securities Berhad. The registered office of the Company is located at 14th Floor, Kompleks Teruntum, Jalan Mahkota, 25000 Kuantan, Pahang Darul Makmur.

The holding corporation of the Company is Perbadanan Kemajuan Negeri Pahang, a statutory body incorporated in Malaysia under the Pahang State Enactment No. 12, 1965.

The principal activities of the Company are investment holding and provision of management services to the subsidiaries. The principal activities of the subsidiaries are described in Note 18. There have been no significant changes in the nature of the principal activities during the financial year.

2. Summary of significant accounting policies

2.1 Basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards (“FRS”) in Malaysia. At the beginning of the current financial year, the Group and the Company adopted new and revised FRS which are mandatory for financial periods beginning on or after 1 July 2012 and 1 January 2013 as described fully in Note 2.2.

The financial statements have been prepared on a historical cost basis except as disclosed in the accounting policies below.

The financial statements are presented in Ringgit Malaysia (“RM”).

2.2 Changes in accounting policies

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

On 1 January 2013, the Group and the Company adopted the following new and amended FRS and IC Interpretation mandatory for annual financial periods beginning on or after 1 January 2013.

72 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.2 Changes in accounting policies (Cont’d)

Effective for annual periods Description beginning on or after FRS 101 Presentation of Items of Other Comprehensive Income (Amendments to FRS 101) 1 July 2012 Amendments to FRS 101: Presentation of Financial Statements (Improvements to FRSs (2012)) 1 January 2013 FRS 10 Consolidated Financial Statements 1 January 2013 FRS 12 Disclosure of interests in Other Entities 1 January 2013 FRS 13 Fair Value Measurement 1 January 2013 FRS 119 Employee Benefits 1 January 2013 FRS 127 Separate Financial Statements 1 January 2013 FRS 128 Investment in Associate and Joint Ventures 1 January 2013 Amendments to FRS 7: Disclosures – Offsetting Financial Assets and Financial Liabilities 1 January 2013 Amendments to FRS 1: First-time Adoption of Malaysian Financial Reporting Standards (Improvements to FRSs (2012)) 1 January 2013 Amendments to FRS 116: Property, Plant and Equipment (Improvements to FRSs (2012)) 1 January 2013 Amendments to FRS 132: Financial Instruments: Presentation (Improvements to FRSs (2012)) 1 January 2013 Amendments to FRS134: Interim Financial Reporting (Improvements to FRSs (2012)) 1 January 2013 Amendments to FRS 10: Consolidated Financial Statements: Transition Guidance 1 January 2013 Amendments to FRS 12: Disclosure of Interests in Other Entities: Transition Guidance 1 January 2013

IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine will also be effective for annual periods beginning on or after 1 January 2013. This FRS is, however, not applicable to the Group or the Company.

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

Amendments to FRS 101 Presentation of Items of Other Comprehensive Income

The Amendments to FRS 101 change the grouping of items presented in Other Comprehensive Income. Items that could be reclassified (or “recycled”) to profit or loss at a future point in time (for example, upon derecognition or settlement) would be presented separately from items that will never be reclassified. The amendments affect presentation only and have no impact on the Group’s and Company’s financial position or performance. Annual Report 2013 • PASDEC HOLDINGS BERHAD 73 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.2 Changes in accounting policies (Cont’d)

FRS 10 Consolidated financial statements

FRS 10 replaces part of FRS 127 Consolidated and Separate Financial Statements that deals with consolidated financial statements and IC Interpretation 112 Consolidation – Special Purpose Entities.

Under FRS 10, an investor controls an investee when (a) the investor has power over an investee, (b) the investor has exposure, or rights, to variable returns from its investment with the investee, and (c) the investor has ability to use its power over the investee to affect the amount of the investor’s returns. Under FRS 127 Consolidated and Separate Financial Statements, control was defined as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

FRS 10 includes detailed guidance to explain when an investor that owns less than 50 per cent of the voting shares in an investee has control over the investee. FRS 10 requires the investor to take into account all relevant facts and circumstances, particularly the size of the investor’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders. The application of FRS 10 has no impact on the Group’s financial position or performance.

FRS 12 Disclosure of Interests in Other Entities

FRS 12 includes all disclosure requirements for interests in subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are required. This standard affects disclosures only and has no impact on the Group’s financial position or performance.

FRS 13 Fair Value Measurement

FRS 13 establishes a single source of guidance under FRS for all fair value measurements. FRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under FRS. FRS 13 defines fair value as an exit price. As a result of the guidance in FRS 13, the Group re-assessed its policies for measuring fair values, in particular, its valuation inputs such as non-performance risk for fair value measurement of liabilities. FRS 13 also requires additional disclosures.

Application of FRS 13 has not materiality impacted the fair value measurement of the Group. Additional disclosures where required, are provided in the individual notes relating to the assets and liabilities whose fair values were determined. 74 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.2 Changes in accounting policies (Cont’d)

FRS 127 Separate Financial Statements

As a consequence of the new FRS 10 and FRS 12, FRS 127 is limited to accounting for subsidiaries, jointly controlled entities and associates in separate financial statements. The adoption of FRS 127 has no impact on the Group’s financial position or performance.

FRS 128 Investments in Associates and Joint Ventures

As a consequence of the new FRS 11 and FRS 12, FRS 128 is renamed as FRS 128 Investments in Associates and Joint Ventures. This new standard describes the application of the equity method to investments in joint ventures in addition to associates. The adoption of FRS 128 has no impact on the Group’s financial position or performance.

Amendments to FRS 7 Disclosures - Offsetting Financial Assets and Financial Liabilities

The Amendments require additional information to be disclosed to enable users of financial statements to evaluate the effect or potential effect of netting arrangements, including rights of set-off associated with the entity’s recognised financial assets and recognised financial liabilities, on the entity’s financial position. The amendments affect disclosure only and have no impact on the Group’s financial position or performance.

FRS 119 Employee Benefits

The Group applied FRS 119 (revised) retrospectively in the current period in accordance with the transitional provisions set out in the revised standard. The opening statement of financial position of the earliest comparative period presented (1 January 2012) and the comparative figures have been accordingly restated.

FRS 119 (revised) changes, amongst other things, the accounting for defined benefit plans. Some of the key changes that impacted the Group and the Company include the following:

All past service costs are recognised at the earlier of when the amendment/curtailment occurs or when the related restructuring or termination costs are recognised. As a result, unvested past service costs can no longer be deferred and recognised over the future vesting period. Previously, the Group had a balance of unrecognised service cost as at 1 January 2012. Upon transition to FRS 119 (revised), this balance was taken to equity (retained earnings) as at 1 January 2012 along with the consequential tax impact. Amortisation on past service costs for the year ended 31 December 2012 was reversed. Annual Report 2013 • PASDEC HOLDINGS BERHAD 75 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.2 Changes in accounting policies (Cont’d)

(i) Impact of the application of FRS 119 (revised) on net assets and equity of the Group and the Company as at 1 January 2012 and 31 December 2012

1.1.2012 31.12.2012 as as previously FRS 119 1.1.2012 previously FRS 119 31.12.2012 stated adjustments As restated stated adjustments As restated RM RM RM RM RM RM Group

Assets Non-current assets Property, plant and equipment 15,744,920 - 15,744,920 15,132,628 - 15,132,628 Land held for property development 141,194,472 - 141,194,472 100,674,768 - 100,674,768 Investment properties 10,049,188 - 10,049,188 9,815,196 - 9,815,196 Investments in associates 20,081,507 - 20,081,507 19,466,549 - 19,466,549 Marketable securities 63,376,719 - 63,376,719 54,265,281 - 54,265,281 Deferred tax assets 11,007,820 - 11,007,820 7,471,414 - 7,471,414 Intangible asset 30,327,648 - 30,327,648 15,647,938 - 15,647,938 291,782,274 291,782,274 222,473,774 222,473,774

Current assets Property development costs 89,510,841 - 89,510,841 136,809,341 - 136,809,341 Inventories 77,370,736 - 77,370,736 73,482,283 - 73,482,283 Trade and other receivables 60,836,396 - 60,836,396 63,381,971 - 63,381,971 Other current assets 4,166,358 - 4,166,358 16,300,575 - 16,300,575 Cash and bank balances 33,002,510 - 33,002,510 24,086,874 - 24,086,874 264,886,841 264,886,841 314,061,044 314,061,044 Total assets 556,669,115 556,669,115 536,534,818 536,534,818 76 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.2 Changes in accounting policies (Cont’d)

(i) Impact of the application of FRS 119 (revised) on net assets and equity of the Group and the Company as at 1 January 2012 and 31 December 2012 (Cont’d)

1.1.2012 31.12.2012 as as previously FRS 119 1.1.2012 previously FRS 119 31.12.2012 stated adjustments As restated stated adjustments As restated RM RM RM RM RM RM Group

Equity and liabilities Current liabilities Retirement benefit obligations 315,507 (23,468) 292,039 275,209 (165,209) 110,000 Loans and borrowings 43,238,316 - 43,238,316 68,513,787 - 68,513,787 Trade and other payables 73,234,565 - 73,234,565 62,718,277 - 62,718,277 Tax payable 136,704 - 136,704 1,984,099 - 1,984,099 116,925,092 116,901,624 133,491,372 133,326,163 Net current assets 147,961,749 147,985,217 180,569,672 180,734,881

Non-current liabilities Retirement benefit obligations 3,584,605 394,331 3,978,936 3,893,708 639,910 4,533,618 Loans and borrowings 73,432,242 - 73,432,242 24,664,617 - 24,664,617 Other payable - - - 4,039,799 - 4,039,799 77,016,847 77,411,178 32,598,124 33,238,034 Total liabilities 193,941,939 194,312,802 166,089,496 166,564,197 Net assets 362,727,176 362,356,313 370,445,322 369,970,621

Equity attributable to owners of the parent Share capital 205,978,000 - 205,978,000 205,978,000 - 205,978,000 Share premium 43,007,997 - 43,007,997 43,007,997 - 43,007,997 Other reserves 22,720,978 - 22,720,978 22,295,850 - 22,295,850 Retained earnings 89,125,543 (370,863) 88,754,680 97,882,457 (474,701) 97,407,756 360,832,518 360,461,655 369,164,304 368,689,603 Non-controlling interests 1,894,658 - 1,894,658 1,281,018 - 1,281,018 Total equity 362,727,176 362,356,313 370,445,322 369,970,621 Total equity and liabilities 556,669,115 556,669,115 536,534,818 536,534,818 Annual Report 2013 • PASDEC HOLDINGS BERHAD 77 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.2 Changes in accounting policies (Cont’d)

(i) Impact of the application of FRS 119 (revised) on net assets and equity of the Group and the Company as at 1 January 2012 and 31 December 2012 (Cont’d)

1.1.2012 31.12.2012 as as previously FRS 119 1.1.2012 previously FRS 119 31.12.2012 stated adjustments As restated stated adjustments As restated RM RM RM RM RM RM Company

Assets Non-current assets Property, plant and equipment 810,023 - 810,023 779,280 - 779,280 Investments in subsidiaries 66,531,233 - 66,531,233 221,396,748 - 221,396,748 Deferred tax assets 409,979 - 409,979 - - - 67,751,235 67,751,235 222,176,028 222,176,028 Current assets Trade and other receivables 221,014,078 - 221,014,078 65,564,580 - 65,564,580 Other current assets 247,809 - 247,809 141,820 - 141,820 Cash and bank balances 11,208,305 - 11,208,305 6,031,160 - 6,031,160 232,470,192 232,470,192 71,737,560 71,737,560 Total assets 300,221,427 300,221,427 293,913,588 293,913,588

Equity and liabilities Current liabilities Retirement benefit obligations 66,547 (8,154) 58,393 214,671 (182,665) 32,006 Loans and borrowings 80,295 - 80,295 29,973,371 - 29,973,371 Trade and other payables 8,416,337 - 8,416,337 9,841,629 - 9,841,629 8,563,179 8,555,025 40,029,671 39,847,006 Net current assets 223,907,013 223,915,167 31,707,889 31,890,554 78 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.2 Changes in accounting policies (Cont’d)

(i) Impact of the application of FRS 119 (revised) on net assets and equity of the Group and the Company as at 1 January 2012 and 31 December 2012 (Cont’d)

1.1.2012 31.12.2012 as as previously FRS 119 1.1.2012 previously FRS 119 31.12.2012 stated adjustments As restated stated adjustments As restated RM RM RM RM RM RM Company

Non-current liabilities Retirement benefit obligations 713,272 82,307 795,579 998,336 320,786 1,319,122 Loans and borrowings 49,298,937 - 49,298,937 184,750 - 184,750 50,012,209 50,094,516 1,183,086 1,503,872 Total liabilities 58,575,388 58,649,541 41,212,757 41,350,878 Net assets 241,646,039 241,571,886 252,700,831 252,562,710

Equity attributable to owners of the parent Share capital 205,978,000 - 205,978,000 205,978,000 - 205,978,000 Share premium 45,515,750 - 45,515,750 45,515,750 - 45,515,750 (Accumulated losses)/ retained earnings (9,847,711) (74,153) (9,921,864) 1,207,081 (138,121) 1,068,960 Total equity 241,646,039 241,571,886 252,700,831 252,562,710 Total equity and liabilities 300,221,427 300,221,427 293,913,588 293,913,588 Annual Report 2013 • PASDEC HOLDINGS BERHAD 79 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.2 Changes in accounting policies (Cont’d)

(ii) Impact of the application of FRS 119 (revised) on the profit of the Group and the Company

Group Company 2012 2012 RM RM Restated Restated Statements of profit or loss and other comprehensive income Decrease/(increase) in administrative expenses 1,642 (33,277) Increase/(decrease) in profit net of tax 1,642 (33,277) Decrease in remeasurement of defined benefit obligation (105,480) (30,691) Increase in other comprehensive loss for the year, net of tax (105,480) (30,691) Total comprehensive loss for the year (103,838) (63,968) Profit/(loss) for the year attributable to: Owners of the parent 1,642 (33,277) Total comprehensive loss attributable to: Owners of the parent (103,838) (63,968)

The adoption of FRS does not result in material differences to the Group’s basic earnings per share.

(iii) Impact of the application of FRS 119 (revised) on cash flows of the Group for the year

The adoption of FRS 119 (revised) does not result in material differences to the Group’s and the Company’s statements of cash flows.

2.3 Standards issued but not yet effective

The standards and interpretations that are issued but not yet effective up to the date of issuance of the Group’s and the Company’s financial statements are disclosed below. The Group and the Company intend to adopt these standards, if applicable, when they become effective. 80 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.3 Standards issued but not yet effective (Cont’d) Effective for annual periods Description beginning on or after Amendments to FRS 132 Offsetting Financial Assets and Financial Liabilities 1 January 2014 Amendments to FRS 10, FRS 12 and FRS 127: Investment Entities 1 January 2014 Amendments to MFRS 136: Recoverable Amount Disclosures for Non-Financial Assets 1 January 2014 Amendments to MFRS 139: Novation of Derivatives and Continuation of Hedge Accounting 1 January 2014 IC Interpretation 21 Levies 1 January 2014 Amendments to MFRS 119: Defined Benefit Plans: Employee Contributions 1 July 2014 Annual Improvements to MFRSs 2010–2012 Cycle 1 July 2014 Annual Improvements to MFRSs 2011–2013 Cycle 1 July 2014 FRS 9 Financial Instruments (IFRS 9 issued by IASB in November 2009) To be announced FRS 9 Financial Instruments (IFRS 9 issued by IASB in October 2010) To be announced FRS 9 Financial Instruments: Hedge Accounting and amendments to FRS 9, FRS 7 and FRS 139 To be announced

The directors expect that the adoption of the standards, Amendments and IC Interpretation above will have no material impact on the financial statements in the period of initial application, except as disclosed below:

Amendments to FRS 132: Offsetting Financial Assets and Financial Liabilities

The Amendments to FRS 132 clarified that a legally enforceable right to set off is a right of set off that must not be contingent on a future event; and must be legally enforceable in the normal course of business, the event of default and the event of insolvency or bankruptcy of the entity and all of the counterparties. The amendments further clarified that an entity will meet the net settlement criterion as provided in FRS 132 if the entity can settle amounts in a manner that the outcome is, in effect, equivalent to net settlement.

FRS 9 Financial Instruments

FRS 9 reflects the first phase of work on the replacement of FRS 139 and applies to classification and measurement of financial assets and financial liabilities as defined in FRS 139. The standard was initially effective for annual periods beginning on or after 1 January 2013, but Amendments to FRS 9: Mandatory Effective Date of FRS 9 and Transition Disclosures, issued in March 2012, moved the mandatory effective date to 1 January 2015. Subsequently, on 14 February 2014, it was announced that the new effective date will be decided when the project is closer to completion. The adoption of the first phase of FRS 9 will have an effect on the classification and measurement of the Group’s financial assets, but will not have an impact on classification and measurements of the Group’s financial liabilities. The Group will quantify the effect in conjunction with the other phases, when the final standard including all phases is issued.

Annual Report 2013 • PASDEC HOLDINGS BERHAD 81 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.3 Standards issued but not yet effective (Cont’d)

Malaysian Financial Reporting Standards (MFRS Framework)

On 19 November 2011, the Malaysian Accounting Standards Board (“MASB”) issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards (“MFRS Framework”) to be adopted by non-private entities for annual periods beginning on or after 1 January 2012. However, adoption of the MFRS Framework by Transitioning Entities will only be mandatory for annual periods beginning on or after 1 January 2015.

The Group falls within the scope definition of Transitioning Entities and accordingly, will be required to prepare financial statements using the MFRS Framework in its first MFRS financial statements for the year ending 31 December 2015. In presenting its first MFRS financial statements, the Group will be required to restate the comparative financial statements to amounts reflecting the application of MFRS Framework. The majority of the adjustments required on transition will be made retrospectively.

The major differences between FRS framework and MFRS framework are as follow:

A. Agreement for the Construction of Real Estates

(i) Revenue recognition for property under development

Under the FRS framework, under FRS 201, when the financial outcome of a development activity can be reliably estimated, property development revenue and expenses are recognised using the stage of completion method.

Under the MFRS framework, in accordance to IC Interpretation 15: Agreements for the Construction of Real Estate (“IC 15”), property development revenue and expenses from development of real estate units are recognized upon completion. This change in accounting policy, including the related deferred tax impact, shall be accounted for retrospectively.

(ii) Land held for development

Under the FRS framework, land held for future development are stated at cost. Under MFRS, land held for future development are to be stated at the lower of cost and net realisable value. 82 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.3 Standards issued but not yet effective (Cont’d)

B. Agriculture

Under the MFRS framework, MFRS 141 Agriculture (MFRS 141) , requires biological assets to be measured at fair value less costs to sell unless it is not possible to measure fair value reliably, in which case they are measured at cost. Gains and losses from changes in fair value less costs to sell are recognised in profit or loss. Agricultural produce harvested from a biological asset are measured at fair value less costs to sell at the point of harvest. Thereafter, the standard on inventories generally applies. However this MFRS is not applicable to the Group.

At the date of these financial statements, the Group has not completed its quantification of the financial effects on the financial statements of the differences arising from the change from FRS to MFRS. Accordingly, the consolidated financial performance and financial position as disclosed in these financial statements for the financial years ended 31 December 2012 and 31 December 2013 could be different if prepared under the MFRS Framework.

2.4 Basis of consolidation

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

The Company controls an investee if and only if the Company has all the following:

(i) Power over the investee (i.e existing rights that give it the current ability to direct the relevant activities of the investee); (ii) Exposure, or rights, to variable returns from its investment with the investee; and (iii) The ability to use its power over the investee to affect its returns.

When the Company has less than a majority of the voting rights of an investee, the Company considers the following in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power over the investee:

(i) The size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders; (ii) Potential voting rights held by the Company, other vote holders or other parties; (iii) Rights arising from other contractual arrangements; and (iv) Any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings. Annual Report 2013 • PASDEC HOLDINGS BERHAD 83 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.4 Basis of consolidation (Cont’d)

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses within a subsidiary are attributed to the non-controlling interests even if that results in a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets and liabilities of the subsidiary and any non-controlling interest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has been recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss or where applicable, transferred directly to retained earnings. The fair value of any investment retained in the former subsidiary at the date control is lost is regarded as the cost on initial recognition of the investment.

Business combinations

Acquisitions of subsidiaries are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non- controlling interests in the acquiree. The Group elects on a transaction-by-transaction basis whether to measure the non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Transaction costs incurred are expensed and included in administrative expenses.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes in the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in accordance with FRS 139 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it will not be remeasured. Subsequent settlement is accounted for within equity. In instances where the contingent consideration does not fall within the scope of FRS 139, it is measured in accordance with the appropriate FRS.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

84 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.4 Basis of consolidation (Cont’d)

Business combinations (Cont’d)

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss. The accounting policy for goodwill is set out in Note 2.9.

2.5 Transactions with non-controlling interests

Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and is presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position, separately from equity attributable to owners of the Company.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent.

2.6 Foreign currency

a) Functional and presentation currency

The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency. Annual Report 2013 • PASDEC HOLDINGS BERHAD 85 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.6 Foreign currency (Cont’d)

b) Foreign currency transactions

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non- monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

c) Foreign operations

The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the reporting date and income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in the profit or loss.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the reporting date. 86 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.7 Property, plant and equipment

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

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

Depreciation of property, plant and equipment is provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful lives as follows:

Leasehold improvement 10 years Buildings 20 years Plant and machinery 5 to 10 years Motor vehicles 5 to 10 years Office equipment 5 to 10 years Office renovation 10 to 12.5 years Furniture and fittings 5 to 10 years

Work in progress is not depreciated as this asset is not yet available for use.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

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

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised. Annual Report 2013 • PASDEC HOLDINGS BERHAD 87 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.8 Investment properties

Investment properties are properties which are held either to earn rental income or for capital appreciation, or for both. Such properties are measured initially at cost including transaction costs. Following initial recognition, investment properties are carried at cost less any accumulated depreciation and accumulated impairment losses. The buildings are depreciated at 2% per annum on a straight line method.

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

Transfers are made to or from investment property only when there is a change in use.

2.9 Intangible assets

Goodwill

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group’s cash-generating units that are expected to benefit from the synergies of the combination.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.

2.10 Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount. 88 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.10 Impairment of non-financial assets (Cont’d)

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units (“CGU”)).

In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

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

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment loss on goodwill is not reversed in a subsequent period.

2.11 Subsidiaries

A subsidiary is an entity over which the Group has all the following:

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss. Annual Report 2013 • PASDEC HOLDINGS BERHAD 89 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.12 Investments in associates

An associate is an entity in which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

On acquisition of an investment in associate, any excess of the cost of investment over the Group’s share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill and included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities of the investee over the cost of investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate’s or joint venture’s profit or loss for the period in which the investment is acquired.

An associate is equity accounted for from the date on which the investee becomes an associate.

Under the equity method, on initial recognition the investment in an associate is recognised at cost, and the carrying amount is increased or decreased to recognise the Group’s share of the profit or loss and other comprehensive income of the associate after the date of acquisition. When the Group’s share of losses in an associate equal or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

Profits and losses resulting from upstream and downstream transactions between the Group and its associate are recognised in the Group’s financial statements only to the extent of unrelated investors’ interests in the associate. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.

The financial statements of the associates are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

After application of the equity method, the Group applies FRS 139 Financial Instruments: Recognition and Measurement to determine whether it is necessary to recognise any additional impairment loss with respect to its net investment in the associate. When necessary, the entire carrying amount of the investment is tested for impairment in accordance with MFRS 136 Impairment of Assets as a single asset, by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss is recognised in profit or loss. Reversal of an impairment loss is recognised to the extent that the recoverable amount of the investment subsequently increases.

In the Company’s separate financial statements, investments in associates are accounted for at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss. 90 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.13 Land held for property development and property development costs

a) Land held for property development

Land held for property development consists of land where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Such land is classified within non-current assets and is stated at cost less any 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 normal operating cycle.

b) Property development costs

Property development costs comprise 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 and 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 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, and 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 are recognised as an asset, which is measured at the lower of cost and net realisable value.

The excess of revenue recognised in the income statement over billings to purchasers is classified as accrued billings within trade receivables and the excess of billings to purchasers over revenue recognised in the income statement is classified as progress billings within trade payables. Annual Report 2013 • PASDEC HOLDINGS BERHAD 91 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.14 Construction contracts

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

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

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

Contract revenue comprises the initial amount of revenue agreed in the contract and variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and they are capable of being reliably measured.

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

2.15 Financial assets

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

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets.

The Group and the Company classified their financial assets as available-for-sale and loans and receivables. 92 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.15 Financial assets (Cont’d)

a) Available-for-sale financial assets

Available-for-sale financial assets are measured at fair value. Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in profit or loss when the Group’s right to receive payment is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.

b) Loans and receivables

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

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current.

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date that the Group and the Company commit to purchase or sell the asset. Annual Report 2013 • PASDEC HOLDINGS BERHAD 93 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.16 Impairment of financial assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.

a) Trade and other receivables and other financial assets carried at amortised cost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

b) Available-for-sale financial assets

Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market are considerations to determine whether there is objective evidence that investment securities classified as available-for-sale financial assets are impaired.

If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss.

Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income. For available-for-sale debt investments, impairment losses are subsequently reversed in profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss in profit or loss. 94 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.17 Cash and cash equivalents

For the purposes of the cash flow statements, cash and cash equivalents include cash in hand and at banks and deposits at call which have an insignificant risk of changes in value, net of outstanding bank overdrafts.

2.18 Inventories

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

- Raw materials: purchase costs on a first-in first-out basis. - Finished goods and work-in-progress: costs of raw materials, direct labour, other direct costs and appropriate proportions of production overheads.

The cost of unsold properties comprises cost associated with the purchase of land, direct costs and appropriate proportions of common costs.

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

2.19 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

2.20 Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities, within the scope of FRS 139, are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities. Annual Report 2013 • PASDEC HOLDINGS BERHAD 95 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.20 Financial liabilities (Cont’d)

a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Derivative liabilities are initially measured at fair value and subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss.

The Group’s fair value through profit or loss includes derivative liabilities.

b) Other financial liabilities

The Group’s and the Company’s other financial liabilities include trade and other payables and loans and borrowings.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Loans and borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

2.21 Borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs consist of interest and other costs that the Group incurred in connection with the borrowing of funds. 96 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.22 Employee benefits

a) Short term benefits

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

b) Defined contribution plans

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

c) Defined benefit plans

The net defined benefit liability or asset is the aggregate of the present value of the defined benefit obligation (derived using a discount rate based on high quality corporate bonds) at the end of the reporting period reduced by the fair value of plan assets (if any), adjusted for any effect of limiting a net defined benefit asset to the asset ceiling. The asset ceiling is the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.

The cost of providing benefits under the defined benefit plans is determined separately for each plan using the projected unit credit method.

Defined benefit costs comprise the following: - Service cost - Net interest on the net defined benefit liability or asset - Remeasurements of net defined benefit liability or asset

Service costs which include current service costs, past service costs and gains or losses on non-routine settlements are recognised as expense in profit or loss. Past service costs are recognised when plan amendment or curtailment occurs.

Net interest on the net defined benefit liability or asset is the change during the period in the net defined benefit liability or asset that arises from the passage of time which is determined by applying the discount rate based on high quality corporate bonds to the net defined benefit liability or asset. Net interest on the net defined benefit liability or asset is recognised as expense or income in profit or loss. Annual Report 2013 • PASDEC HOLDINGS BERHAD 97 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.22 Employee benefits (Cont’d)

c) Defined benefit plans (Cont’d)

Remeasurements comprising actuarial gains and losses, return on plan assets and any change in the effect of the asset ceiling (excluding net interest on defined benefit liability) are recognised immediately in other comprehensive income in the period in which they arise. Remeasurements are recognised in retained earnings within equity and are not reclassified to profit or loss in subsequent periods.

Plan assets are assets that are held by a long-term employee benefit fund or qualifying insurance policies. Plan assets are not available to the creditors of the Group, nor can they be paid directly to the Group. Fair value of plan assets is based on market price information. When no market price is available, the fair value of plan assets is estimated by discounting expected future cash flows using a discount rate that reflects both the risk associated with the plan assets and the maturity or expected disposal date of those assets (or, if they have no maturity, the expected period until the settlement of the related obligations).

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

2.23 Leases

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

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

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis. 98 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.24 Revenue

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

a) Sale of properties

Revenue from sale of properties is accounted for by the stage of completion method as described in Note 2.13(b).

b) Construction contracts

Revenue from construction contracts is accounted for by the stage of completion method as described in Note 2.14.

c) Sale of goods

Revenue is recognised net of sales taxes and upon transfer of significant risk and rewards of ownership to the buyer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

d) Revenue from services

Revenue from services is recognised net of service taxes and discounts as and when the services are performed.

e) Dividend income

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

f) Rental income

Rental income from investment property is recognised on a straight-line basis over the term of the lease.

g) Interest income

Interest income is recognised using the effective interest method.

h) Management fees

Management fees are recognised when services are rendered. Annual Report 2013 • PASDEC HOLDINGS BERHAD 99 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.25 Income taxes

a) Current tax

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

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

b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

- where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and - in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:

- where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and - in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised. 100 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.25 Income taxes (Cont’d)

b) Deferred tax (Cont’d)

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

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

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

2.26 Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 38, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.27 Share capital and share issuance expenses

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

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared. Annual Report 2013 • PASDEC HOLDINGS BERHAD 101 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.28 Contingencies

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

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

2.29 Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is presented in the balance sheets, when and only when, there is a currently enforceable legal right to set off the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

2.30 Fair value measurements

Fair value is 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 fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

(i) In the principal market for the asset or liability, or (ii) In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible to by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset 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.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

102 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

2. Summary of significant accounting policies (Cont’d)

2.30 Fair value measurements (Cont’d)

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

3. Significant accounting judgements and estimates

The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.

3.1 Judgements made in applying accounting policies

In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements:

(a) Impairment of available-for-sale investments

The Group reviews its debt securities classified as available-for-sale investments at each reporting date to assess whether they are impaired. The Group also records impairment charges on available-for-sale equity investments when there has been a significant or prolonged decline in the fair value below their cost.

The determination of what is “significant” or “prolonged” requires judgement. In making this judgement, the Group evaluates, among other factors, historical share price movements and the duration and extent to which the fair value of an investment is less than its cost. Annual Report 2013 • PASDEC HOLDINGS BERHAD 103 Notes to the Financial Statements For the financial year ended 31 December 2013

3. Significant accounting judgements and estimates (Cont’d)

3.2 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Useful lives of plant and machinery

The cost of plant and machinery is depreciated on a straight-line basis over assets’ estimated economic useful lives.Management estimates the useful lives of these plant and machinery to be 5 to 10 years. These are common life expectancies applied in the automotive industry. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore, future depreciation charges could be revised. The carrying amount of the Group’s plant and equipment at the reporting date is disclosed in Note 14.

(b) Impairment of loans and receivables

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

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

The Group recognises property development revenue and expenses in the statement of comprehensive income 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.

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

The carrying amounts of assets and liabilities of the Group arising from property development activities are disclosed in Note 15(b). 104 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

3. Significant accounting judgements and estimates (Cont’d.)

3.2 Key sources of estimation uncertainty (Cont’d.)

(d) Impairment of goodwill

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

When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. Further details of the carrying value, the key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are given in Note 17.

(e) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing and level of future taxable profits together with future tax planning strategies.

Assumptions about generation of future taxable profits depend on management’s estimates of future cash flows. These depends on estimates of future production and sales volume, operating costs, capital expenditure, dividends and other capital management transactions. Judgement is also required about application of income tax legislation. These judgements and assumptions are subject to risks and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets recognised in the statements of financial position and the amount of unrecognised tax losses and unrecognised temporary differences.

4. Revenue

Group Company 2013 2012 2013 2012 RM RM RM RM Sale of properties 53,316,334 89,581,252 - - Construction contracts 12,760,794 7,519,966 - - Sale of goods 57,762,230 58,029,640 - - UniFi installation services 4,435,510 1,381,430 - - Management fees 180,000 180,000 12,013,920 12,025,920 Rental income 3,691,114 3,693,287 - - Dividend income 802,268 1,589,021 70,000,000 - 132,948,250 161,974,596 82,013,920 12,025,920

Annual Report 2013 • PASDEC HOLDINGS BERHAD 105 Notes to the Financial Statements For the financial year ended 31 December 2013

5. Cost of sales

Group 2013 2012 RM RM Property development costs (Note 15(b)) 41,758,831 21,167,082 Additional costs for completed projects 241,517 325,558 Cost of land held for property development sold (Note 15(a)) 2,196,880 16,965,125 Cost of property development sold (Note 15(b)) 3,689,908 5,317,537 Cost of inventories sold 45,459,656 41,305,466 Cost of services rendered 2,995,425 2,516,603 Cost of construction contracts 4,282,329 6,294,759 100,624,546 93,892,130

6. Interest income

Group Company 2013 2012 2013 2012 RM RM RM RM Interest income from: Loans and receivables 148,821 307,051 3,232,073 17,769,706 Deposits with licensed banks 521,919 486,712 77,737 240,801 670,740 793,763 3,309,810 18,010,507

7. Other income

Group Company 2013 2012 2013 2012 RM RM RM RM Rental income 299,850 313,650 - - Net gain on disposal of property, plant and equipment 26,198 419,894 - - Reversal of allowance for impairment of trade and other receivables (Note 21 (a) and (b)) 297,646 3,661,949 45,680 13,400,110 Bad debts recovered - 390,777 - - Gain on disposal of quoted investments 35,252,364 14,276,708 - - Reversal of amortisation on premium and coupon upon redemption of REBs 311,077 520,256 311,077 520,256 Reversal of derivative liability 3,893,857 378,971 3,893,857 378,971 Training and other recoveries 1,385,581 1,131,457 - - Sales of scrap 2,009,997 402,202 - - Duty drawback 1,042,084 1,365,083 - - Gain on disposal of investment properties 774,585 - - - Waiver of other payables 1,077,249 - - - Miscellaneous 930,020 313,324 - - 47,300,508 23,174,271 4,250,614 14,299,337

106 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

8. Finance costs

Group Company 2013 2012 2013 2012 RM RM RM RM Interest expense on: Hire purchase 84,715 16,989 18,701 14,745 Term loans 1,786,761 3,304,547 135,139 345,049 Overdrafts 2,360,990 2,698,008 - - Revolving credits 140,157 172,283 - - (Reversal)/charge of REBs (41,421) 54,539 (41,421) 54,539 Other interests 494,404 544,028 4,758,945 3,696,266 4,825,606 6,790,394 4,871,364 4,110,599

9. Profit before tax

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

Group Company 2013 2012 2013 2012 RM RM RM RM Restated Restated Auditors’ remuneration 392,355 434,890 25,000 15,000 Employee benefits expense (Note 10) 29,846,684 26,125,048 10,803,336 7,279,830 Non-executive directors’ remuneration (Note 11) 925,644 689,300 596,100 638,300 Depreciation of property, plant and equipment (Note 14) 1,443,049 1,234,165 186,009 148,504 Property, plant and equipment written-off - 6,957 - - Impairment of property development costs (Note 15(b)) 29,314 36,020 - - Depreciation of investment properties (Note 16) 145,469 233,992 - - Provision for impairment losses in investments in subsidiaries - - 57,299,279 1,031,864 Impairment of intangible asset (Note 17) 15,647,938 14,679,710 - - (Reversal)/provision for impairment losses in inventories (572,917) 65,393 - - Impairment loss on financial assets 3,217,236 883,021 13,200 874,512 - Trade receivables (Note 21 (a)) 2,604,252 820,445 - - - Other receivables (Note 21 (b)) 612,984 62,576 13,200 874,512 Office rental 59,635 604,846 - 444,179 Rental - others 1,365,253 1,312,605 - - Provision for liquidated ascertained damages 224,577 1,256,556 - - Annual Report 2013 • PASDEC HOLDINGS BERHAD 107 Notes to the Financial Statements For the financial year ended 31 December 2013

10. Employee benefits expense

Group Company 2013 2012 2013 2012 RM RM RM RM Restated Restated Wages and salaries 18,802,118 17,488,638 6,332,710 5,237,920 Social security contributions 93,308 94,054 74,144 69,718 Short-term accumulating compensated absences 442,954 (183,019) 428,483 (29,106) Contributions to defined contribution plan 1,177,529 924,744 947,431 693,166 Pension costs - defined benefit plan (Note 26) 536,090 563,744 965,464 466,465 Other staff related expenses 8,794,685 7,236,887 2,055,104 841,667 29,846,684 26,125,048 10,803,336 7,279,830

Included in employee benefits expense of the Group are executive directors’ remuneration amounting to RM1,475,658 (2012: RM2,312,741) as further disclosed in Note 11.

11. Directors’ remuneration

Group Company 2013 2012 2013 2012 RM RM RM RM Executive director’s remuneration (Note 10): Salaries and other emoluments 1,475,658 2,312,741 - -

Non-executive directors’ remuneration (Note 9): Fees 822,244 501,000 501,000 501,000 Other emoluments 103,400 188,300 95,100 137,300 925,644 689,300 596,100 638,300 Total directors’ remuneration 2,401,302 3,002,041 596,100 638,300

The number of directors of the Company whose total remuneration during the financial year fell within the following bands is analysed below:

Number of Directors 2013 2012 Non-executive directors: RM50,001 – RM100,000 7 7 RM100,001 – RM150,000 1 1

108 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

12. Income tax expense/(benefit)

Major components of income tax expense/(benefit)

The major components of income tax expense/(benefit) for the years ended 31 December 2013 and 2012 are:

Group Company 2013 2012 2013 2012 RM RM RM RM Statement of profit or loss and other comprehensive income: Current income tax: Malaysian income tax 750,464 4,943,628 101,617 3,492,296 (Over)/under provision in prior years (115,333) 1,312,073 (638,959) 1,312,631 635,131 6,255,701 (537,342) 4,804,927 Deferred income tax (Note 33): Relating to originating and reversal of temporary differences 414,383 2,841,471 - 409,979 Over provision in prior years (395,790) (2,412) - - 18,593 2,839,059 - 409,979 Total income tax expense/(benefit) 653,724 9,094,760 (537,342) 5,214,906

Reconciliation between tax expense/(benefit) and accounting profit

The reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate for the years ended 31 December 2013 and 2012 are as follows: 2013 2012 RM RM Group Profit before taxation 14,069,405 19,154,499

Tax at Malaysian statutory tax rate of 25% (2012: 25%) 3,517,351 4,788,625 Different tax rate in another country 5,268 76,093 Utilisation of Group relief (1,803,746) (839,253) Effect of income not subject to tax (9,251,700) (8,897,250) Effect of expenses not deductible for tax purposes 6,452,938 9,044,546 Effect of utilisation of previously unrecognised tax losses and unabsorbed capital allowances (2,569,205) (34,513) Deferred tax assets not recognised in respect of current year’s tax losses and unabsorbed capital allowances 4,815,036 3,815,589 Over provision of deferred tax in prior years (395,790) (2,412) (Over)/under provision of income tax in prior years (115,333) 1,312,073 Share of results of associate (1,095) (168,738) Tax expense for the year 653,724 9,094,760

Annual Report 2013 • PASDEC HOLDINGS BERHAD 109 Notes to the Financial Statements For the financial year ended 31 December 2013

12. Income tax expense/(benefit) (Cont’d)

2013 2012 RM RM Company Profit before taxation 11,794,734 16,236,421

Tax at Malaysian statutory tax rate of 25% (2012: 25%) 2,948,684 4,067,425 Utilisation of Group relief (848,202) (248,280) Effect of income not subject to tax (21,010,569) (3,350,028) Effect of expenses not deductible for tax purposes 18,057,187 2,960,672 Deferred tax assets not recognised 954,517 472,486 (Over)/under provision of income tax in prior years (638,959) 1,312,631 Tax (benefit)/expense for the year (537,342) 5,214,906

Domestic income tax is calculated at statutory tax rate of 25% (2012: 25%) of the estimated assessable profit for the year. The domestic statutory tax rate will be reduced to 24% from the current year’s rate of 25%, effective from year of assessment 2016. The computation of deferred tax as at 31 December 2013 has reflected these changes.

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

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

Tax savings during the financial year arising from:

Group Company 2013 2012 2013 2012 RM RM RM RM Utilisation of previously unrecognised tax losses and unabsorbed capital allowances 2,569,205 34,513 - - 110 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

13. Earnings per share

(a) Basic

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

Group 2013 2012 Restated Profit attributable to ordinary equity holders of the Company (RM) 13,058,543 8,758,556 Weighted average number of ordinary shares in issue (units) 205,978,000 205,978,000 Basic earnings per share (sen) 6.34 4.25

(b) Diluted

No diluted earnings per share were presented as there were no potential dilutive ordinary shares outstanding as at 31 December 2013.

14. Property, plant and equipment

Leasehold Plant and Work in Other improvement Buildings machinery progress assets* Total RM RM RM RM RM RM Group

Cost:

At 1 January 2012 399,497 8,893,814 6,041,806 - 7,630,547 22,965,664 Additions 92,724 - 1,089,547 445,896 737,952 2,366,119 Disposals - (1,456,476) - - (99,979) (1,556,455) Write-off - - - - (9,360) (9,360) Exchange differences (31,942) - (482,033) - (50,172) (564,147) At 31 December 2012 and 1 January 2013 460,279 7,437,338 6,649,320 445,896 8,208,988 23,201,821 Additions 37,934 323,203 4,607,438 47,488 1,570,971 6,587,034 Disposals - (437,492) - - - (437,492) Exchange differences (59,638) - (1,067,181) - (155,011) (1,281,830) At 31 December 2013 438,575 7,323,049 10,189,577 493,384 9,624,948 28,069,533 Annual Report 2013 • PASDEC HOLDINGS BERHAD 111 Notes to the Financial Statements For the financial year ended 31 December 2013

14. Property, plant and equipment (Cont’d)

Leasehold Plant and Work in Other improvement Buildings machinery progress assets* Total RM RM RM RM RM RM Group (Cont’d)

Accumulated depreciation:

At 1 January 2012 49,211 1,137,302 908,529 - 5,125,702 7,220,744 Charge for the year (Note 9) 38,565 170,739 405,300 - 619,561 1,234,165 Disposals - (205,463) - - (93,318) (298,781) Write-off - - - - (2,403) (2,403) Exchange differences (3,934) - (71,592) - (9,006) (84,532) At 31 December 2012 and 1 January 2013 83,842 1,102,578 1,242,237 - 5,640,536 8,069,193 Charge for the year (Note 9) 38,739 170,275 566,050 - 667,985 1,443,049 Disposals - (47,413) - - - (47,413) Exchange differences (12,796) - (187,731) - (34,378) (234,905) At 31 December 2013 109,785 1,225,440 1,620,556 - 6,274,143 9,229,924 Net carrying amount: At 31 December 2012 376,437 6,334,760 5,407,083 445,896 2,568,452 15,132,628

At 31 December 2013 328,790 6,097,609 8,569,021 493,384 3,350,805 18,839,609

* Other assets consist of office renovation, furniture and fittings, office equipment, and motor vehicles.

Office Motor Furniture & Office equipment vehicles fittings renovation Total RM RM RM RM RM Company

Cost: At 1 January 2012 345,401 598,323 9,166 65,439 1,018,329 Additions 97,803 - 7,748 12,210 117,761 At 31 December 2012 and 1 January 2013 443,204 598,323 16,914 77,649 1,136,090 Additions 114,253 512,142 25,480 - 651,875 At 31 December 2013 557,457 1,110,465 42,394 77,649 1,787,965 112 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

14. Property, plant and equipment (Cont’d)

Office Motor Furniture & Office equipment vehicles fittings renovation Total RM RM RM RM RM Company (Cont’d)

Accumulated depreciation: At 1 January 2012 61,191 140,787 480 5,848 208,306 Charge for the year (Note 9) 80,649 59,832 1,361 6,662 148,504 At 31 December 2012 and 1 January 2013 141,840 200,619 1,841 12,510 356,810 Charge for the year (Note 9) 95,623 79,838 2,784 7,764 186,009 At 31 December 2013 237,463 280,457 4,625 20,274 542,819

Net carrying amount: At 31 December 2012 301,364 397,704 15,073 65,139 779,280

At 31 December 2013 319,994 830,008 37,769 57,375 1,245,146

During the financial year, the Group and the Company acquired property, plant and equipment with an aggregate costs of RM919,647 (2012: RM688,635) and RM482,000 (2012: RM Nil) respectively by means of hire purchase. The cash outflow on acquisition of property, plant and equipment by the Group and the Company amounted to RM5,667,387 (2012: RM1,677,484) and RM169,875 (2012: RM117,761) respectively. Net carrying amounts of property, plant and equipment held under hire purchase arrangements are as follows:

Group Company 2013 2012 2013 2012 RM RM RM RM Motor vehicles 1,163,286 836,626 830,008 397,704 Plant and machinery 533,145 - - - 1,696,431 836,626 830,008 397,704 Annual Report 2013 • PASDEC HOLDINGS BERHAD 113 Notes to the Financial Statements For the financial year ended 31 December 2013

15. Land held for property development and property development costs

(a) Land held for property development

Freehold Leasehold land land Total RM RM RM Group

At 31 December 2013

Cost At 1 January 2013 25,110,413 95,680,722 120,791,135 Additions 39,024,904 1,407,461 40,432,365 Disposals (Note 5) - (2,196,880) (2,196,880) Transfer to property development costs (Note 15(b)) (8,831,466) (861,501) (9,692,967) At 31 December 2013 55,303,851 94,029,802 149,333,653 Accumulated impairment losses At 1 January 2013/at 31 December 2013 - (20,116,367) (20,116,367) Carrying amount at 31 December 2013 55,303,851 73,913,435 129,217,286

At 31 December 2012

Cost At 1 January 2012 50,398,568 111,294,271 161,692,839 Additions 21,941 1,929,664 1,951,605 Disposals (Note 5) (8,197,342) (8,767,783) (16,965,125) Reclassification (15,814,254) 15,814,254 - Transfer to property development cost (Note 15(b)) (916,500) (24,589,684) (25,506,184) Written off (382,000) - (382,000) At 31 December 2012 25,110,413 95,680,722 120,791,135 Accumulated impairment losses At 1 January 2012 (382,000) (20,116,367) (20,498,367) Written off 382,000 - 382,000 At 31 December 2012 - (20,116,367) (20,116,367) Carrying amount at 31 December 2012 25,110,413 75,564,355 100,674,768

114 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

15. Land held for property development and property development costs (Cont’d)

(b) Property development costs

Freehold Leasehold Development land land costs Total RM RM RM RM Group At 31 December 2013

Cumulative property development costs At 1 January 2013 42,508,414 5,587,208 144,863,716 192,959,338 Costs incurred during the year - 54,085 65,063,845 65,117,930 Transfer from land held for property development (Note 15(a)) 8,831,466 861,501 - 9,692,967 Reclassification (1,706,659) 794,390 912,269 - Disposals (Note 5) (1,138,581) - (2,551,327) (3,689,908) Reversal of completed projects in prior years (2,689,595) (243,380) (42,140,854) (45,073,829) Unsold units transferred to inventories (38,302) (54,085) (2,480,848) (2,573,235) At 31 December 2013 45,766,743 6,999,719 163,666,801 216,433,263

Accumulated impairment losses At 1 January 2013 - - (3,561,699) (3,561,699) Impairment loss for the year (Note 9) - - (29,314) (29,314) At 31 December 2013 - - (3,591,013) (3,591,013)

Cumulative costs recognised in profit or loss At 1 January 2013 (387,046) (533,633) (51,667,619) (52,588,298) Recognised during the year (Note 5) (2,281,320) - (39,477,511) (41,758,831) Reversal of completed projects in prior years 2,689,595 243,380 42,140,854 45,073,829 At 31 December 2013 21,229 (290,253) (49,004,276) (49,273,300)

Property development costs at 31 December 2013 45,787,972 6,709,466 111,071,512 163,568,950 Annual Report 2013 • PASDEC HOLDINGS BERHAD 115 Notes to the Financial Statements For the financial year ended 31 December 2013

15. Land held for property development and property development costs (Cont’d)

(b) Property development costs (Cont’d)

Freehold Leasehold Development land land costs Total RM RM RM RM Group

At 31 December 2012

Cumulative property development costs At 1 January 2012 25,072,584 6,969,955 203,967,256 236,009,795 Costs incurred during the year - 2,599,400 45,713,555 48,312,955 Transfer from land held for property development (Note 15(a)) 916,500 24,589,684 - 25,506,184 Reclassification 21,374,948 (28,443,469) 7,068,521 - Disposal (Note 5) (1,138,581) - (4,178,956) (5,317,537) Reversal of completed property development projects (3,717,037) - (107,557,758) (111,274,795) Written off (Note 9) - (128,362) (148,902) (277,264) At 31 December 2012 42,508,414 5,587,208 144,863,716 192,959,338

Accumulated impairment losses At 1 January 2012 - (92,342) (3,710,601) (3,802,943) Impairment loss for the year (Note 9) - (36,020) - (36,020) Written off - 128,362 148,902 277,264 At 31 December 2012 - - (3,561,699) (3,561,699)

Cumulative costs recognised in profit or loss At 1 January 2012 (4,104,083) (302,459) (138,289,469) (142,696,011) Recognised during the year (Note 5) - (231,174) (20,935,908) (21,167,082) Reversal of completed projects 3,717,037 - 107,557,758 111,274,795 At 31 December 2012 (387,046) (533,633) (51,667,619) (52,588,298)

Property development costs at 31 December 2012 42,121,368 5,053,575 89,634,398 136,809,341 116 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

15. Land held for property development and property development costs (Cont’d)

The freehold land and leasehold land of certain subsidiaries with a carrying value of RM45,374,299 (2012: RM33,128,331) have been charged as security for short term borrowings (Note 27).

The title of leasehold land held for development of a subsidiary with a carrying value of RM21,026,378 (2012: RM21,026,378) is still pending transfer to the subsidiary’s name from the ultimate holding corporation, Perbadanan Kemajuan Negeri Pahang.

The title of freehold land and leasehold land held for development of a subsidiary with carrying value of RM19,527,417 (2012: RM19,527,417) and RM35,627,018 (2012: RM35,627,018) respectively are still pending transfer to the subsidiary’s name from the vendors.

16. Investment properties

Group 2013 2012 RM RM Buildings

Cost At 1 January 11,751,120 11,751,120 Disposal (1,485,164) - At 31 December 10,265,956 11,751,120

Accumulated depreciation At 1 January 1,935,924 1,701,932 Charge for the year (Note 9) 145,469 233,992 Disposal (105,710) - At 31 December 1,975,683 1,935,924

Net carrying amount At 31 December 8,290,273 9,815,196

Investment properties, at fair value - Level 2 At 31 December 14,889,446 12,842,658 Annual Report 2013 • PASDEC HOLDINGS BERHAD 117 Notes to the Financial Statements For the financial year ended 31 December 2013

16. Investment properties (Cont’d)

Level 2 fair value of investment properties have been generally derived using sales comparison approach. The most significant input into this approach is current selling price available of comparable properties.

Part of the building of a subsidiary with carrying value amounting to RM126,399 (2012: RM131,627) is pledged to financial institutions for credit facilities granted to a subsidiary (Note 27).

Investment properties comprise commercial properties which are leased out for rental income. Each of the leases contains an initial non-cancellable leases of the period between 1 to 5 years. All leases include a clause to enable upward revision of the rental charge on an annual basis based on prevailing market conditions.

The rental income and depreciation recognised in profit or loss in respect of investment properties are RM3,691,114 (2012: RM3,693,287) and RM145,469 (2012: RM233,992) respectively.

17. Intangible asset

Group 2013 2012 RM RM Goodwill

Cost: At 1 January and 31 December 34,905,293 34,905,293

Impairment: At 1 January 19,257,355 4,577,645 Recognised in profit or loss (Note 9) 15,647,938 14,679,710 At 31 December 34,905,293 19,257,355

Net carrying amount: At 31 December - 15,647,938 118 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

17. Intangible asset (Cont’d)

Impairment testing of goodwill

Goodwill arising from business combinations has been allocated to two individual cash-generating units (“CGU”) for impairment testing as follows:

- Manufacturing segment - Property development segment

As at 31 December 2012, the entire carrying amount of goodwill was related to manufacturing segment.

The recoverable amount of the goodwill, for purpose of the impairment testing, is determined based on value-in-use calculations using cash flow projections covering a five-year period. The key assumptions used for value-in-use calculations are as follows:

2013 2012 RM RM Budgeted gross margins 25.0% 27.0% Growth rates 8.0% 5.0% Pre-tax discount rates 15.2% 13.8%

Budgeted gross margins – Gross margins are based on average values achieved in the three years preceding the start of the budget period. These are maintained over the budget period.

Growth rates – The forecasted growth rates are based on management’s estimate and do not exceed the long-term average growth rate for the industries.

Pre-tax discount rates – Discount rates have been estimated using discounted cash flow model.

Impairment loss recognised

During the financial year, an impairment loss of RM15,647,938 (2012: RM14,679,710) was recognised to write-down the goodwill. Annual Report 2013 • PASDEC HOLDINGS BERHAD 119 Notes to the Financial Statements For the financial year ended 31 December 2013

18. Investments in subsidiaries

Company 2013 2012 RM RM Unquoted shares at cost 265,201,863 99,443,569 Add: Additions during the year 50,998 165,758,294 265,252,861 265,201,863 Less: Accumulated impairment losses (101,104,394) (43,805,115) 164,148,467 221,396,748

Details of the subsidiaries are as follows:

Country of % of ownership incorporation/ % of ownership interest held by Principal Place interest held by non-controlling Name of business Principal activities the Group interest 2013 2012 2013 2012 Held by the Company:

Pasdec Corporation Malaysia Property development and 100 100 - - Sdn. Bhd. project management

Kuantan Tembeling Malaysia Property development and 100 100 - - Resort Sdn. Bhd. property management

Pasdec Land Sdn. Bhd. Malaysia Property development 100 100 - -

Pasdec Bina Sdn. Bhd. Malaysia Building and civil construction 100 100 - -

Kimdec Corporation Malaysia Property development 100 100 - - Sdn. Bhd.

Sumbangan Sakti Malaysia Property development and 100 100 - - Sdn. Bhd. renewable energy

Pasdec Mega Sdn. Bhd. Malaysia Property development and 100 100 - - renewable energy

Pasdec Pintas Sdn. Bhd.# Malaysia Dormant 70 70 30 30 120 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

18. Investments in subsidiaries (Cont’d)

Mutiara Pasdec Sdn. Bhd. Malaysia Investment holding 100 100 - -

Bentong Aquarium & Malaysia Dormant 100 70 - 30 Sanctuary Park Sdn. Bhd.#

Pasdec Engineering Malaysia Value engineering and 51 100 49 - Sdn. Bhd. consultancy services

Gelnas Sdn. Bhd. * Malaysia Manufacturing and supply of halal 100 100 - - gelatine and gelatine based products.

Prima Net Technologies Malaysia UniFi installation services 100 100 - - Sdn. Bhd. * and ICT related business

Held through Pasdec Corporation Sdn. Bhd.:

Pasdec Putra Sdn. Bhd. Malaysia Property development 100 100 - -

Held through Mutiara Pasdec Sdn. Bhd.:

Pahang Aircraft Industries Malaysia Dormant 100 100 - - Sdn. Bhd.#

Pasdec Trading Sdn. Bhd. Malaysia Trading of building materials 100 100 - - and provision of insurance services

Pahang Off-Shore Malaysia Investment holding 100 100 - - Sdn. Bhd. **

Annual Report 2013 • PASDEC HOLDINGS BERHAD 121 Notes to the Financial Statements For the financial year ended 31 December 2013

18. Investments in subsidiaries (Cont’d)

Pasdec Resources South Africa Investment holding 97 97 3 3 S.A. Limited*

Held through Pasdec Resources S.A. Limited:

Pasdec Automotive South Africa Manufacturing and supply of 70 70 30 30 Technologies (Pty) Ltd.* automotive wiring harnesses

Femcotec Finance South Africa Dormant 100 100 - - (Proprietary) Ltd.*

Femco Mining Motors South Africa Dormant 100 100 - - (Proprietary) Ltd.*

* Audited by a firm of chartered accountants other than Hanafiah Raslan & Mohamad.

** Audited by Ernst & Young, Malaysia of which Hanafiah Raslan & Mohamad is a member firm.

# The auditors’ report of this company refers to the going concern assumption and dependent on continues financial support from the holding company. The report is not qualified.

The Group had pledged the equity interest in Pasdec Automotive (Pty) Ltd. with carrying value of RM12,138,571(2012: RM13,373,630) as a security for borrowings granted to the Group amounting to RM6,778,013 (2012: RM3,179,832) (Note 27).

During the financial year, Pasdec Engineering Sdn. Bhd. has increased its issued and paid-up ordinary share capital from RM2 to RM100,000 by way of the issuance of 50,998 ordinary shares of RM1 each via capitalisation of amount due to Pasdec Holdings Berhad and 49,000 ordinary shares at an issue price of RM1 each via cash to non-controlling interest.

Acquisition of non-controlling interests

On 4 September 2013, the Company acquired an additional 30% equity interest in Bentong Aquarium & Sanctuary Park Sdn. Bhd. (“BASP”) from its non-controlling interests for a cash consideration of RM1.00. As a result of this acquisition, BASP became a wholly-owned subsidiary of the Company. 122 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

19. Investments in associates

Group 2013 2012 RM RM Unquoted shares, at cost 23,290,750 19,534,000 Share of post-acquisition reserves 2,782,291 2,861,673 26,073,041 22,395,673 Exchange differences (5,021,038) (2,859,124) 21,052,003 19,536,549 Less: Accumulated impairment losses (70,000) (70,000) 20,982,003 19,466,549

(a) Details of the associates are as follows:

Country of incorporation/ % of ownership Accounting Principal place interest held by model Name of business Principal activities the Group applied 2013 2012 Held by the Company

Pasdec Technology Malaysia Operations maintenance of high 50 50 Equity method Centre and Services end data centre. The Company Sdn. Bhd. * is yet to commence operations

Held through subsidiaries:

Prima Prai Sdn. Bhd. * Malaysia Property development 20 20 Equity method

Genting View Resort Malaysia Ceased operations 40 40 Equity method Development Sdn. Bhd.*

Pasdec Cempaka Sdn. Bhd.* Malaysia Dormant 40 40 Equity method

CRH Africa Automotive South Africa Manufacturing of automobile seat 30.87 30.87 Equity method (Pty) Ltd.* components and catalytic converters

Pahang Specialist Hospital Malaysia Dormant 30 - Equity method Sdn. Bhd (formerly known as Evolusi Spektra (M) Sdn. Bhd.)*

* Audited by a firm of chartered accountants other than Hanafiah Raslan & Mohamad. Annual Report 2013 • PASDEC HOLDINGS BERHAD 123 Notes to the Financial Statements For the financial year ended 31 December 2013

19. Investments in associates (Cont’d)

(a) Details of the associates are as follows: (Cont’d)

The financial statements of the above associates are coterminous with those of the Group, except for Prima Prai Sdn. Bhd. and Genting View Resort Development Sdn. Bhd. which have financial years end on 31 March and 30 June respectively. For the purpose of applying the equity method of accounting, the management accounts of Prima Prai Sdn. Bhd. and Genting View Resort Development Sdn. Bhd. for the respective year and period ended 31 December 2013 have been used.

During the financial year, the Group acquired 30% equity interest in Pahang Specialist Hospital Sdn. Bhd. (formerly known as Evolusi Spektra (M) Sdn. Bhd.) for a purchase consideration of RM3,756,750.

(b) Summarised financial information of CRH which represent associates that are material to the Group is set out below. The summarised financial information represents the amounts in the FRS financial statements of the associate and not the Group’s share of those amounts. Other associates are not material to the Group.

(i) Summarised statement of financial position

CRH Automotive (Pty) Ltd. 2013 2012 RM RM Non-current assets 44,188,515 54,287,792 Current assets 70,810,444 74,865,824 Total assets 114,998,959 129,153,616

Current liabilities 6,613,191 9,890,880 Non-current liabilities 53,401,486 55,862,903 Total liabilities 60,014,677 65,753,783 Net assets 54,984,282 63,399,833 124 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

19. Investments in associates (Cont’d)

(ii) Summarised statement of profit or loss and other comprehensive income

CRH Automotive (Pty) Ltd. 2013 2012 RM RM Revenue 201,465,835 197,958,237 Profit before tax 549,904 3,284,941 Profit for the year 12,673 2,507,759 Total comprehensive income 12,673 2,507,759

(iii) Reconciliation of the summarised financial information presented above to the carrying amount of the Group’s interest in associates

CRH Automotive (Pty) Ltd. 2013 2012 RM RM Net assets at 1 January 63,399,832 66,303,463 Profit for the year 12,673 2,507,759 Foreign currency translation reserve (8,428,223) (5,411,425) Net assets at 31 December 54,984,282 63,399,797 Interest in associates 30.87% 30.87% Carrying value of Group’s interest in associates 16,973,648 19,571,517

2013 2012 RM RM The Group’s share of (loss)/profit before tax (194,647) 80,796 The Group’s share of (loss)/profit after tax (80,944) 412,437 The Group’s share of total comprehensive (loss)/income (80,944) 412,437 Annual Report 2013 • PASDEC HOLDINGS BERHAD 125 Notes to the Financial Statements For the financial year ended 31 December 2013

19. Investments in associates (Cont’d)

(d) Significant restrictions

The Group had pledged the equity interest in CRH Africa Automotive (Pty) Ltd. with carrying value of RM19,571,528 (2012: RM19,571,528) as a security for borrowings granted to the Group amounting to RM8,647,704 (2012: RM8,647,704) (Note 27).

20. Inventories

Group 2013 2012 RM RM Cost Properties held for sale 53,855,825 54,003,364 Raw material 9,459,417 11,931,136 Work-in-progress 4,977,696 5,097,073 68,292,938 71,031,573

Net realisable value Properties held for sale 659,176 659,176 Finished goods 1,022,918 1,791,534 1,682,094 2,450,710 69,975,032 73,482,283

The Group has pledged the properties held for sale amounting to RM38,875,560 (2012: RM38,875,560), as security for bank facilities (Note 27).

126 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

21. Trade and other receivables

Group Company 2013 2012 2013 2012 RM RM RM RM Restated Current

Trade receivables 52,289,711 41,310,209 - 152,914 Construction contracts: Retention sum receivable (Note 23) 1,270,990 602,500 - - 53,560,701 41,912,709 - 152,914 Less: Allowance for impairment (5,740,545) (3,433,939) - - 47,820,156 38,478,770 - 152,914

Other receivables Amounts due from related parties: Subsidiaries - - 111,300,763 68,569,590 Holding corporation 17,065,320 19,623,047 17,065,320 17,435,353 Related companies 4,530,914 5,336,324 - 593,842 21,596,234 24,959,371 128,366,083 86,598,785 Deposits 1,312,718 4,326,077 - - Sundry receivables 18,371,376 19,533,856 - 119,012 41,280,328 48,819,304 128,366,083 86,717,797

Less: Allowance for impairment Third parties (9,614,393) (7,487,967) - (66,642) Subsidiaries - - (4,662,488) (4,869,483) Holding corporation (15,776,164) (15,776,164) (15,776,164) (15,776,164) Related companies - (2,335,241) - (593,842) (25,390,557) (25,599,372) (20,438,652) (21,306,131) 15,889,771 23,219,932 107,927,431 65,411,666

Total trade and other receivables 63,709,927 61,698,702 107,927,431 65,564,580 Add: Cash and bank balances (Note 25) 17,760,412 24,086,874 14,555 6,031,160 Total loans and receivables 81,470,339 85,785,576 107,941,986 71,595,740

Annual Report 2013 • PASDEC HOLDINGS BERHAD 127 Notes to the Financial Statements For the financial year ended 31 December 2013

21. Trade and other receivables (Cont’d.)

(a) Trade receivables

Trade receivables are non-interest bearing and are generally on 30 to 120 day (2012: 30 to 120 day) terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

Ageing analysis of trade receivables

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

Group Company 2013 2012 2013 2012 RM RM RM RM Neither past due nor impaired 29,120,716 29,936,930 - 152,914 1 to 30 days past due not impaired 6,040,621 3,002,689 - - 31 to 60 days past due not impaired 5,047,878 2,336,177 - - 61 to 90 days past due not impaired 3,937,457 1,815,166 - - More than 91 days past due not impaired 3,673,484 1,387,808 - - 18,699,440 8,541,840 - - Impaired 5,740,545 3,433,939 - - 53,560,701 41,912,709 - 152,914

Receivables that are neither past due nor impaired

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

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

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM18,699,440 (2012: RM8,541,840) that are past due at the reporting date but not impaired.

Trade receivables that were past due but not impaired relate to customers that have a good track record with the Group. Based on past experience and no adverse information to date, the directors of the Group are of the opinion that no provision for impairment is necessary in respect of these balances as there has not been a significant change in the credit quality and the balances are still considered fully recoverable. 128 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

21. Trade and other receivables (Cont’d.)

(a) Trade receivables (Cont’d)

Trade receivables that are impaired

The Group’s trade receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:

Individually impaired 2013 2012 RM RM Group

Trade receivables - nominal amounts 5,740,545 3,433,939 Less: Allowance for impairment (5,740,545) (3,433,939) - -

Movement in allowance accounts:

Group 2013 2012 RM RM At 1 January 3,433,939 2,741,401 Charge for the year (Note 9) 2,604,252 820,445 Reversal (Note 7) (297,646) (127,167) Written off - (740) At 31 December 5,740,545 3,433,939

(b) Other receivables

Amounts due from subsidiaries amounting to Nil (2012: RM30,706,062) bear interest of Nil (2012: 6%) per annum and are repayable on demand. The remaining amounts due from subsidiaries bear interest at 3.0% (2012: 8.6%) per annum. The amounts are unsecured and are to be settled in cash.

The amounts due from holding corporation and related companies are unsecured, non-interest bearing, repayable on demand and are to be settled in cash. Annual Report 2013 • PASDEC HOLDINGS BERHAD 129 Notes to the Financial Statements For the financial year ended 31 December 2013

21. Trade and other receivables (Cont’d.)

(b) Other receivables

Other receivables that are impaired

The Group’s and Company’s other receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:

Individually impaired Group Company 2013 2012 2013 2012 RM RM RM RM Other receivables - nominal amounts 26,364,713 27,258,561 26,622,265 42,677,925

Less: Allowance for impairment (25,390,557) (25,599,372) (20,438,652) (21,306,131) 974,156 1,659,189 6,183,613 21,371,794

Movement in allowance accounts:

Group Company 2013 2012 2013 2012 RM RM RM RM At 1 January 25,599,372 29,071,578 21,306,131 33,831,729 Charge for the year (Note 9) 612,984 62,576 13,200 874,512 Reversal (Note 7) - (3,534,782) (45,680) (13,400,110) Written off (821,799) - (821,799) - At 31 December 25,390,557 25,599,372 20,438,652 21,306,131 130 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

22. Other current assets

Group Company 2013 2012 2013 2012 RM RM RM RM Restated Prepaid operating expenses 250,686 241,095 156,418 141,820 Accrued billings in respect of property development costs 11,048,572 14,371,207 - - Amount due from customers for contract (Note 23) 1,467,994 1,688,273 - - Tax recoverable 4,624,575 1,683,269 2,121,140 - 17,391,827 17,983,844 2,277,558 141,820

23. Gross amount due from customers

Group 2013 2012 RM RM Construction contract costs incurred todate 11,041,281 27,657,566 Attributable profits 382,105 2,399,018 11,423,386 30,056,584 Less : Progress billings (9,955,392) (28,368,311) 1,467,994 1,688,273

Presented as: Gross amount due from customers for contract work (Note 22) 1,467,994 1,688,273

Retention sum on contracts, included within trade receivables (Note 21) 1,270,990 602,500 Annual Report 2013 • PASDEC HOLDINGS BERHAD 131 Notes to the Financial Statements For the financial year ended 31 December 2013

24. Marketable securities

2013 2012 RM RM Available-for-sale financial assets At fair value: Shares quoted in Malaysia 26,054 53,742,733 Unit trusts quoted in Malaysia 563,171 522,548 589,225 54,265,281

Investments pledged as security

In prior year, the Group’s investments in quoted shares with a carrying amount of RM7,400,491 were pledged to financial institutions for issuance of RM150 million REBs (Note 29).

In prior year, the Group’s investments in quoted shares with carrying amount of RM48,644,279 were pledged to banks for certain facilities granted to a subsidiary (Note 27).

25. Cash and cash equivalents

Group Company 2013 2012 2013 2012 RM RM RM RM Cash in hand and at banks 5,823,346 12,938,442 14,555 419,441 Deposits with licensed banks 11,937,066 11,148,432 - 5,611,719 Cash and bank balances 17,760,412 24,086,874 14,555 6,031,160

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and three months depending on the immediate cash requirements of the Group and the Company, and earn interests at the respective short-term deposit rates. The weighted average effective interest rates as at 31 December 2013 for the Group and the Company were 3.81% (2012: 3.37%) per annum and 2.77% (2012: 3.02%) per annum respectively.

Included in cash at banks of the Group is an amount of RM3,443,072 (2012: RM1,917,689) held pursuant to Section 7A of the Housing Development (Control and Licensing) Act 1966 and therefore restricted from use in other operations.

132 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

25. Cash and cash equivalents (Cont’d)

Deposits with licensed banks of the Group amounting to RM11,937,066 (2012: RM11,148,432) are pledged to banks for credit facilities granted to certain subsidiaries (Note 27).

For the purpose of the statements of cash flows, cash and cash equivalents comprise the following at the reporting date:

Group Company 2013 2012 2013 2012 RM RM RM RM Cash and bank balances 17,760,412 24,086,874 14,555 6,031,160 Bank overdrafts (Note 27) (31,290,479) (32,814,530) - - Cash and cash equivalents (13,530,067) (8,727,656) 14,555 6,031,160

26. Retirement benefit obligations

The Group operates an unfunded, defined Retirement Benefit Scheme (“the Scheme”) for its eligible employees. Under the Scheme, eligible employees are entitled to retirement benefits with 7.5% of gross salary multiplied by plan service with maximum of 300 or 312 months payable on attainment of the compulsory retirement age of either 55 years or 56 years.

The following tables summarise the components of net benefit expense recognised in profit or loss and the unfunded status and amounts recognised in the statements of financial position for the plans:

Group Company 2013 2012 2013 2012 RM RM RM RM Restated Restated Net benefit expense

Current service costs 194,176 316,951 648,251 260,600 Interest cost on benefit obligation 341,914 246,793 317,213 205,865 Net benefit expense, included in employee benefits expense (Note 10) 536,090 563,744 965,464 466,465 Annual Report 2013 • PASDEC HOLDINGS BERHAD 133 Notes to the Financial Statements For the financial year ended 31 December 2013

26. Retirement benefit obligations (Cont’d)

Benefit liability Group Company 2013 2012 1.1.2012 2013 2012 1.1.2012 RM RM RM RM RM RM Restated Restated Restated Restated Defined benefit obligation represents total benefit liability 5,434,672 4,643,618 4,270,975 4,823,272 1,351,128 853,972

Changes in present value of defined benefit obligations are as follows:

Group Company 2013 2012 1.1.2012 2013 2012 1.1.2012 RM RM RM RM RM RM Restated Restated Restated Restated At 1 January 4,643,618 4,270,975 3,775,568 1,351,128 853,972 692,437 Current service costs 194,176 316,951 309,195 648,251 260,600 61,823 Transfer from subsidiaries - - - 2,291,622 - - Remeasurement loss/(gain) - Changes in plan experience (240,312) - - (213,277) - - - Changes in demographic assumptions 24,732 - - 21,950 - - - Changes in financial assumption changes 570,299 105,480 259,131 506,140 30,691 51,813 Interest cost 341,914 246,793 239,556 317,213 205,865 47,899 Benefit paid (99,755) (296,581) (312,475) (99,755) - - At 31 December 5,434,672 4,643,618 4,270,975 4,823,272 1,351,128 853,972

Analysed as: Current 322,983 110,000 292,039 286,647 32,006 58,393 Non-current 5,111,689 4,533,618 3,978,936 4,536,625 1,319,122 795,579 5,434,672 4,643,618 4,270,975 4,823,272 1,351,128 853,972 134 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

26. Retirement benefit obligations (Cont’d)

The principal assumptions used in determining defined benefit plans are shown below:

2013 2012 1.1.2012 % % % Discount rate 4.75 5.50 6.00 Future salary increases 5.00 5.00 5.00

The sensitivity analysis below has been determined based on reasonably possible changes of each significant assumption on the defined benefit obligation as of the end of the reporting period, assuming if all other assumptions were held constant:

Group Company Increase Decrease Increase Decrease RM RM RM RM 2013 Discount rate (1% of movement) (2,581) 2,581 (2,291) 2,291 Future salary (1% of movement) (2,717) 2,717 (2,412) 2,412

27. Loans and borrowings

Group Company 2013 2012 2013 2012 RM RM RM RM Current

Secured: Bank overdrafts 31,290,479 32,814,530 - - Revolving credits 2,000,000 2,000,000 - - Term loans 10,186,723 27,757,624 - 24,325,000 Loan at prime + 2.0% per annum 1,874,544 - - - Loan at prime overdraft - 0.7% per annum 1,545,130 - - - Rainbow Exchangeable Bonds (Note 29) - 5,600,000 - 5,600,000 Obligations under finance leases (Note 28 (b)) 494,198 341,633 82,585 48,371 47,391,074 68,513,787 82,585 29,973,371 Annual Report 2013 • PASDEC HOLDINGS BERHAD 135 Notes to the Financial Statements For the financial year ended 31 December 2013

27. Loans and borrowings (Cont’d)

Group Company 2013 2012 2013 2012 RM RM RM RM Non-current

Secured: Term loans 39,525,312 12,174,045 - - Loan at prime + 2.0% per annum 3,749,088 8,647,704 - - Loan at prime overdraft - 0.7% per annum 4,929,857 3,179,833 - - Obligations under finance leases (Note 28 (b)) 913,704 663,035 568,303 184,750 49,117,961 24,664,617 568,303 184,750

Total loans and borrowings 96,509,035 93,178,404 650,888 30,158,121

The remaining maturities of the loans and borrowings as at 31 December 2013 are as follows:

Group Company 2013 2012 2013 2012 RM RM RM RM On demand or within one year 47,391,074 68,513,787 82,585 29,973,371 More than 1 year and less than 2 years 10,681,192 6,302,883 88,325 48,371 More than 2 years and less than 5 years 22,019,559 15,732,245 296,305 136,379 5 years or more 16,417,210 2,629,489 183,673 - 96,509,035 93,178,404 650,888 30,158,121

Bank overdrafts

The bank overdrafts of the Group are secured against the land registered under the name of the holding corporation, first legal charge over long term leasehold land and building of certain subsidiaries, fixed and floating charges over certain assets of subsidiaries, joint and several guarantee by the directors of a corporate shareholder of a subsidiary and corporate guarantee by a subsidiary and the Company. The weighted average effective interest as at 31 December 2013 for the Group was 7.55% (2012: 8.30%) per annum.

Revolving credits

The secured revolving credits of the Group are for a period of six months and are secured against fixed legal charge over certain freehold land of a subsidiary, corporate guarantee by the Company and joint and several guarantee by the directors of a corporate shareholder. The weighted average effective interest as at 31 December 2013 for the Group was 7.01% (2012: 8.10%) per annum. 136 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

27. Loans and borrowings (Cont’d)

Term loans

The term loans are secured by the following:

(a) First legal charge over the freehold land and leasehold land of certain subsidiaries; (b) Fixed and floating charges over certain assets of subsidiaries; (c) Joint and several guarantee by the directors of a corporate shareholder of the respective subsidiary; and (d) Corporate guarantee by a subsidiary and the Company.

Term loans bear interest at respective term loan rates. The weighted average effective interest as at 31 December 2013 for the Group was 7.80% (2012: 8.10%) per annum. The repayment of the Group’s term loans are ranging from 2 years to 5 years.

Loan at prime + 2.0% per annum

The loan is secured by the following:

(a) Corporate guarantee from the Company; and (b) 30.87% of ordinary shares held in CRH Africa Automotive (Pty) Ltd.

Loan at prime overdraft rate - 0.7% per annum

The loan is secured by fixed and floating charges over certain assets of subsidiaries.

Rainbow Exchangeable Bonds

In prior year the REBs of the Group and of the Company were secured against part of the marketable securities as disclosed in Note 24. The bonds bore interest at 5.25% per annum.

Obligations under finance leases

The secured obligations under finance leases of the Group are secured against corporate guarantee by a subsidiary company. The weighted average effective interest as at 31 December 2013 for the Group and the Company were 6.02% (2012: 7.68%) per annum and 2.87% (2012: 2.60%) per annum respectively. Annual Report 2013 • PASDEC HOLDINGS BERHAD 137 Notes to the Financial Statements For the financial year ended 31 December 2013

28. Commitments

(a) Operating lease commitments – as lessee

The Group has entered into commercial lease on office properties. Leases are negotiated for an average term of seven years. Rentals are fixed for an average of three years.

Future minimum rentals payable under non-cancellable operating leases at the reporting date are as follows:

Group 2013 2012 RM RM Not later than 1 year 834,586 609,663 Later than 1 year but not later than 5 years 3,010,377 3,048,316 Later than 5 years 454,448 - 4,299,411 3,657,979

(b) Finance lease commitments

The Group has finance leases for certain items of plant and equipment and furniture and fixtures (Note 14). These leases do not have terms of renewal, but have purchase options at nominal values at the end of the lease term.

Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:

Group Company 2013 2012 2013 2012 RM RM RM RM Minimum lease payments: Not later than 1 year 571,206 411,305 114,984 59,440 Later than 1 year and notlater than 5 years 819,680 683,660 456,830 166,560 Later than 5 years 190,224 43,361 190,224 43,361 1,581,110 1,138,326 762,038 269,361 Less: Future finance charges (173,208) (133,658) (111,150) (36,240) Present value of lease liabilities 1,407,902 1,004,668 650,888 233,121 138 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

28. Commitments (Cont’d)

(b) Finance lease commitments (Cont’d)

Group Company 2013 2012 2013 2012 RM RM RM RM Analysed as: Secured Current (Note 27) 494,198 341,633 82,585 48,371

Non-current (Note 27) 913,704 663,035 568,303 184,750 1,407,902 1,004,668 650,888 233,121

Group 2013 2012 RM RM Capital expenditure Approved but not contracted for: Property plant and equipment - 74,467,779

Approved and contracted for: Property plant and equipment 74,467,779 -

29. Rainbow Exchangeable Bonds

On 15 November 2006, the Company issued RM150 million Rainbow Exchangeable Bonds (“REBs”) at 100% of its nominal value comprising two series as follows:

(i) Series 1 - up to RM15 million REBs or such other amount exchangeable into 4,792,333 or such other appropriate number of ordinary shares in Road Builder (M) Holdings Berhad (“RBH”) (“Exchange Shares”); and

(ii) Series 2 - up to RM135 million REBs or such other amount exchangeable into 40,785,500 or such other appropriate number of ordinary shares in YTL Cement Berhad (“Exchange Shares”). Annual Report 2013 • PASDEC HOLDINGS BERHAD 139 Notes to the Financial Statements For the financial year ended 31 December 2013

29. Rainbow Exchangeable Bonds (Cont’d.)

The salient features of REBs issued by the Company are as follows:

(a) The tenures of the Series 1 and 2 are 5 and 7 years respectively.

(b) The REBs carry an interest or coupon rate of 5% per annum for both series and payable semi-annually in arrears from the date of issue of the REBs, with the last coupon payment to be made on the respective maturity dates.

(c) Each REB entitles the REBs holders to exchange for one Exchange Share at the Exchange Price which is indicatively set at a premium of 10% to 30% from five-day Weighted Average Market Price of the relevant Exchange Shares prior to the price fixing date or at par, whichever is higher at any time after the Securities Commission’s approval, for the relevant series at any time during the Exchange Period.

(d) The REBs are secured by the following:

(i) A Put-Option written by the Put-Option Writer to acquire the Exchange Shares at an agreed Option Price, upon the terms and conditions contained in the Put-Option agreements;

(ii) Deposit/ pledge of the Exchange Shares with the Security Trustee, for the benefit of the REBs holders;

(iii) Assignment/ charge of an Escrow Account, a Disbursement Account (“DA”), and Debt Service Reserve Account (“DSRA”), in favour of the Security Trustee for the REBs holders; and

(iv) Assignment of the proceeds under an irrevocable Standby Line from a financial institution (“Liquidity Reserve Provider”) equivalent to one (1) coupon payment payable during the tenor of the REBs, in favour of the Security Trustee for the REBs Holders; or

If no Standby Line is established, an assignment/ charge of a Liquidity Reserve Account (“LRA”), into which an amount equivalent to one (1) coupon payment payable during the tenor of the REBs shall be deposited.

(e) The Option Price with regards to Series 1 and 2 are as follows:

Series 1: the outstanding amounts, owing or payable by the Company to the REBs holders under the relevant Transaction Documents, as at the date of the put option notice as referred to in the Put-Option agreements;

Series 2: the outstanding amounts, owing or payable by the Company to the REBs holders under the relevant Transaction Documents, as at the date of the put option notice less the amount of:- - any standby facilities procured by the Company; and - any cash deposits by the Company into the DSRA. 140 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

29. Rainbow Exchangeable Bonds (Cont’d.)

(f) The REBs shall be redeemed by the Issuer on the respective maturity dates at approximately 122% to 140% of the Issue Price of the relevant Series save and except for the following circumstances:-

(i) The REBs are exchangeable at any time by the REBs holders into the Exchange Shares, during the tenors of the REBs;

(ii) The REBs may be redeemed by the Issuer after the expiry of three (3) years from the issue date of the REBs and subject to the market price of the relevant Exchange Shares as traded on Bursa Malaysia Securities Berhad being at least 130% of the Exchange Price of the relevant Exchange Shares;

(iii) The Issuer may, at any time, purchase the REBs at any price in the open market or by private treaty;

(iv) The REBs shall be cancelled and cannot be reissued if the REBs have been exchanged into the Exchange Shares by the REBs holders, redeemed by the Issuer after year 3 and/or purchased by the Issuer in the open market.

The REBs are accounted for in the statements of financial position of the Group and of the Company as follows:

Group and Company 2013 2012 RM RM Nominal value - issued and fully paid At 1 January 4,000,000 17,000,000 Exchanged into Exchange Shares (4,000,000) (13,000,000) At 31 December - 4,000,000

Redemption premium At 31 December - 1,600,000 Total included in loans and borrowings (Note 27) - 5,600,000 Annual Report 2013 • PASDEC HOLDINGS BERHAD 141 Notes to the Financial Statements For the financial year ended 31 December 2013

30. Trade and other payables

Group Company 2013 2012 2013 2012 RM RM RM RM Current Trade payables Third parties 35,107,791 27,649,189 - -

Other payables Amounts due to related parties: Due to a corporate shareholder of subsidiary companies 547,513 1,481,170 - - Due to a director - 12,841 - - Due to holding corporation 3,595,676 6,126,171 2,599,203 2,591,970 4,143,189 7,620,182 2,599,203 2,591,970 Other payables 15,445,178 16,034,450 1,789,215 1,483,895 Accruals 8,718,192 7,421,750 1,170,606 1,773,058 Coupon on bonds - 98,850 - 98,850 Derivative liability - 3,893,856 - 3,893,856 28,306,559 35,069,088 5,559,024 9,841,629 63,414,350 62,718,277 5,559,024 9,841,629

Non-current Other payable 8,086,770 4,039,799 - -

Total trade and other payables 71,501,120 66,758,076 5,559,024 9,841,629 Add: Loans and borrowings (Note 27) 96,509,035 93,178,404 650,888 30,158,121 Total financial liabilities carried at amortised cost 168,010,155 159,936,480 6,209,912 39,999,750 142 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

30. Trade and other payables (Cont’d.)

(a) Trade payables Trade payables are non-interest bearing and the normal trade credit term granted to the Group ranges from 30 to 90 days (2012: 30 to 90 days).

(b) Amounts due to related parties The amounts due to related parties are unsecured, non-interest bearing, repayable on demand and are to be settled in cash.

(c) Other payables Current These amounts are unsecured, non-interest bearing, repayable on demand and are to be settled in cash.

Non-current Other payables amounting to RM5,000,000 (2012: Nil) bear interest of 5.0% (2012: Nil) per annum and is secured by way of RM5,000,000 face value of shares in Pasdec Resources S.A. Limited (“PRSA”). The amount is repayable on the fifth year from 29 April 2013, the date of agreement. The remaining other payable is non-interest bearing and secured by an equity interest in a subsidiary of PRSA.

31. Share capital

Number of ordinary shares of RM1 each Amount 2013 2012 2013 2012 RM RM Authorised 1 January/31 December 500,000,000 500,000,000 500,000,000 500,000,000

Issued and fully paid 1 January/31 December 205,978,000 205,978,000 205,978,000 205,978,000

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 general meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets. Annual Report 2013 • PASDEC HOLDINGS BERHAD 143 Notes to the Financial Statements For the financial year ended 31 December 2013

32. Other reserves

Premium Foreign paid on Fair value currency acquisition of adjustment translation non-controlling reserve deficit interest Total RM RM RM RM Group

At 1 January 2013 37,449,601 (5,255,480) (9,898,271) 22,295,850

Other comprehensive income: Available-for-sale financial assets: Loss on fair value changes (2,056,988) - - (2,056,988) Transfer to profit or loss upon disposal (35,252,364) - - (35,252,364) Foreign currency translation - (2,623,696) - (2,623,696) Less: Non-controlling interest - 45,115 - 45,115 (37,309,352) (2,578,581) - (39,887,933) At 31 December 2013 140,249 (7,834,061) (9,898,271) (17,592,083)

At 1 January 2012 35,207,385 (2,588,136) (9,898,271) 22,720,978

Other comprehensive income: Available-for-sale financial assets: Gain on fair value changes 16,518,924 - - 16,518,924 Transfer to profit or loss upon disposal (14,276,708) - - (14,276,708) Foreign currency translation - (2,855,061) - (2,855,061) Less: Non-controlling interest - 187,717 - 187,717 2,242,216 (2,667,344) - (425,128) At 31 December 2012 37,449,601 (5,255,480) (9,898,271) 22,295,850

Fair value adjustment reserve Fair value adjustment reserve represents the cumulative fair value changes of available-for-sale financial assets until they are disposed or impaired.

Foreign currency translation reserve The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign subsidiaries. 144 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

33. Deferred tax

Deferred income tax as at 31 December relates to the following:

Group

As at 1 Recognised As at 31 Recognised As at 31 January in profit Exchange December in profit Exchange December 2012 or loss differences 2012 or loss differences 2013 RM RM RM RM RM RM RM Deferred tax liabilities:

Property, plant and equipment 1,240,889 206,567 (97,152) 1,350,304 198,984 (169,006) 1,380,282

Deferred tax assets:

Provision and others (268,421) (414,963) 21,783 (661,601) 25,965 80,744 (554,892) Retirement benefit obligations (813,495) 813,495 - - (91,898) - (91,898) Unutilised tax lossess and unabsorbed capital allowances (11,166,793) 2,233,960 772,716 (8,160,117) (114,458) 1,080,597 (7,193,978) (12,248,709) 2,632,492 794,499 (8,821,718) (180,391) 1,161,341 (7,840,768) (11,007,820) 2,839,059 697,347 (7,471,414) 18,593 992,335 (6,460,486)

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

Group 2013 2012 RM RM Unrecognised tax losses 14,392,412 19,575,912 Unabsorbed capital allowances - 51,760 Provisions and others 464,857 491,454 14,857,269 20,119,126

Deferred tax assets have not been recognised in respect of these items as they have arisen in companies that have a recent history of losses or in companies where future taxable profits may be insufficient to trigger the utilisation of these items. Annual Report 2013 • PASDEC HOLDINGS BERHAD 145 Notes to the Financial Statements For the financial year ended 31 December 2013

33. Deferred tax (Cont’d)

Section 44(5A) and Paragraph 75A of Schedule 3 of the Malaysia Income Tax Act 1967 which became effective in Year of Assessment 2006 restricts the utilisation of unabsorbed business losses and capital allowance where there is a substantial change in the ordinary shareholder of a company. The test for determining whether there is a substantial change in shareholders is carried out by comparing the shareholders on the last day of the basis period in which the unabsorbed losses/capital allowances were ascertained with those on the first day of the basis period in which the unabsorbed losses/capital allowances are to be utilised.

Pursuant to guidelines issued by the Malaysian tax authorities in 2008, the Ministry of Finance has exempted all companies from the provision of Section 44(5A) and Paragraph 75A of Schedule 3 except dormant companies. Therefore, all active subsidiaries are allowed to carry forward their unabsorbed capital allowances and business losses.

34. Related party transactions

(a) Sale and purchase of goods and services

In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place at terms agreed between the parties during the financial year:

Group Company 2013 2012 2013 2012 RM RM RM RM Holding corporation - office rental and service charge 585,084 585,084 - - Subsidiaries - interest income - - (3,232,073) (17,769,706) - management fee income - - (12,013,920) (12,025,920) Rental paid to a shareholder of subsidiary 579,563 637,631 - - Rental paid to a related party 200,606 231,157 - - 146 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

34. Related party transactions (Cont’d)

(b) Compensation of key management personnel

The remuneration of directors and other members of key management during the year was as follows:

Group Company 2013 2012 2013 2012 RM RM RM RM Short term employee benefits 3,442,465 3,949,929 1,637,263 1,586,188 Post-employment benefits - Defined contribution plan 110,640 112,656 110,640 112,656 - Defined benefit plan 12,953 - 12,953 - 3,566,058 4,062,585 1,760,856 1,698,844

Included in the total key management personnel are:

Group Company 2013 2012 2013 2012 RM RM RM RM Directors’ remuneration 2,401,302 3,002,041 596,100 638,300

35. Fair value of financial instruments

A. Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value

Group Company Carrying Fair Carrying Fair Note amount value amount value RM RM RM RM 2013 Financial liabilities: Loans and borrowings (non-current) - Term loans 27 39,525,312 36,319,889 - - - Loan at prime + 2% per annum 27 3,749,088 3,731,790 - - - Loan at prime overdraft - 0.7% per annum 27 4,929,857 4,611,168 - - - Obligations under finance leases 28 913,704 826,091 568,303 444,330 Other payables (non-current) 30 5,000,000 4,433,919 - - Annual Report 2013 • PASDEC HOLDINGS BERHAD 147 Notes to the Financial Statements For the financial year ended 31 December 2013

35. Fair value of financial instruments (Cont’d)

A. Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value (Cont’d)

Group Company Carrying Fair Carrying Fair Note amount value amount value RM RM RM RM 2012 Financial liabilities: Loans and borrowings (non-current) - Term loans 27 12,174,045 12,895,789 - - - Loan at prime + 2% per annum 27 8,647,704 8,856,209 - - - Rainbow Exchangeable Bonds 29 3,179,833 3,694,629 - - - Obligations under finance leases 28 663,035 601,829 184,750 183,305

B. Determination of fair value

Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value:

Note Trade and other receivables 21 Trade and other payables 30 Loans and borrowings (current) 27

The carrying amounts of these financial assets and liabilities are reasonable approximations of fair values due to their short term nature.

The carrying amounts of current loans and borrowings are reasonable approximations of fair values due to the insignificant impact of discounting.

The fair values of current loans and borrowings are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date. 148 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

35. Fair value of financial instruments (Cont’d)

B. Determination of fair value (Cont’d)

Amounts due from/to subsidiaries

The fair values of these financial instruments are estimated by charging expected future cash flows at market incremental lending rate for similar types of lending or borrowing at the reporting date.

Quoted equity instruments

Fair value is determined directly by reference to their published market bid price at the reporting date.

31 December 2013 Level 1 Financial asset: Note RM Equity instruments available-for-sale (quoted) 24 589,225

31 December 2012 Financial asset: Equity instruments available-for-sale (quoted) 24 54,265,281

36. Financial risk management objectives and policies

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk, market price risk and foreign currency risk.

The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are executed by the Chief Executive Officer, Senior Vice President Corporate Resources and Senior Vice President Property. The Audit Committee provides independent oversight to the effectiveness of the risk management process.

It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall be undertaken except for the use as hedging instruments where appropriate and cost-efficient. The Group and the Company do not apply hedge accounting.

The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks. Annual Report 2013 • PASDEC HOLDINGS BERHAD 149 Notes to the Financial Statements For the financial year ended 31 December 2013

36. Financial risk management objectives and policies (Cont’d)

(a) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including investment securities, cash and bank balances and derivatives), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. For transactions that do not occur in the country of the relevant operating unit, the Group does not offer credit terms without the approval of the Senior Vice President Corporate Resources. Since the Group trades only with recognised and creditworthy third parties, there is no requirement for collateral.

Exposure to credit risk

At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statements of financial position.

Credit risk concentration profile

The Group determines concentrations of credit risk by monitoring industry sector profile of its trade receivables on an ongoing basis. The credit risk concentration profile of the Group at the reporting date is as follows:

Group 2013 2012 RM % of total RM % of total By industry sectors:

Property development 40,860,412 85.5% 28,946,568 75.2% Manufacturing 867,835 1.8% 1,405,737 3.7% Construction 3,539,438 7.4% 4,524,440 11.8% Others 2,552,471 5.3% 3,602,025 9.3% 47,820,156 100.0% 38,478,770 100.0%

150 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

36. Financial risk management objectives and policies (Cont’d)

(a) Credit risk (Cont’d)

Group 2013 2012 RM % of total RM % of total By country:

Malaysia 46,952,321 96.6% 37,071,878 96.6% South Africa 867,835 3.3% 1,405,737 3.3% Japan - 0.1% 1,155 0.1% 47,820,156 100.0% 38,478,770 100.0%

At the reporting date, approximately 9% (2012: 6%) of the Group’s trade and other receivables were due from related parties while almost all of the Company’s receivables were balances with related parties.

Financial assets that are neither past due nor impaired

Information regarding trade receivables that are neither past due nor impaired is disclosed in Note 21. Deposits with banks and other financial institutions and investment securities that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 21.

(b) Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions and balances its portfolio with some short term funding so as to achieve overall cost effectiveness.

At the reporting date, approximately 49% (2012: 74%) of the Group’s loans and borrowings (Note 27) will mature in less than one year based on the carrying amount reflected in the financial statements. 13% (2012: 99%) of the Company’s loans and borrowings will mature in less than one year at the reporting date. Annual Report 2013 • PASDEC HOLDINGS BERHAD 151 Notes to the Financial Statements For the financial year ended 31 December 2013

36. Financial risk management objectives and policies (Cont’d)

(b) Liquidity risk (Cont’d)

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

2013 On demand or within One to Over five one year five years years Total RM RM RM RM Group

Financial liabilities:

Trade and other payables 63,414,350 8,086,770 - 71,501,120 Loans and borrowings 47,962,280 49,937,641 190,224 98,090,145 Total undiscounted financial liabilities 111,376,630 58,024,411 190,224 169,591,265

2012

Group

Financial liabilities:

Trade and other payables 62,718,277 4,039,799 - 66,758,076 Loans and borrowings 76,395,462 28,619,759 305,274 105,320,495 Total undiscounted financial liabilities 139,113,739 32,659,558 305,274 172,078,571 152 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

36. Financial risk management objectives and policies (Cont’d)

(b) Liquidity risk (Cont’d)

Analysis of financial instruments by remaining contractual maturities (Cont’d)

2013 On demand or within One to Over five one year five years years Total RM RM RM RM Company

Financial liabilities:

Other payables 5,559,024 - - 5,559,024 Loans and borrowings 114,984 456,830 190,224 762,038 Total undiscounted financial liabilities 5,674,008 456,830 190,224 6,321,062

2012 Company

Financial liabilities:

Other payables 9,841,629 - - 9,841,629 Loans and borrowings 51,645,817 184,750 - 51,830,567 Total undiscounted financial liabilities 61,487,446 184,750 - 61,672,196

c) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s and the Company’s exposure to interest rate risk arises primarily from their loans and borrowings, loans at floating rates given to related parties and investments in equity securities classified as available-for-sale. The Company’s loans at floating rate given to subsidiaries form a natural hedge for its non-current floating rate bank loan.

The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate borrowings to achieve the overall cost effectiveness. Annual Report 2013 • PASDEC HOLDINGS BERHAD 153 Notes to the Financial Statements For the financial year ended 31 December 2013

36. Financial risk management objectives and policies (Cont’d)

c) Interest rate risk (Cont’d)

Sensitivity analysis for interest rate risk

At the reporting date, if interest rates had been 50 basis points lower/higher, with all other variables held constant, the Group’s profit net of tax would have been RM204,506 higher/lower, arising mainly as a result of lower/higher interest expense on floating rate loans.The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment.

(d) Market price risk

Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates).

The Group is exposed to equity price risk arising from its investment in quoted equity instruments. The quoted equity instruments in Malaysia are listed on Bursa Malaysia. These instruments are classified as held for trading or available-for- sale financial assets. The Group does not have exposure to commodity price risk.

(e) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the respective functional currencies of Group entities, primarily South Arican Rand (“ZAR”). The foreign currencies in which these transactions are denominated are mainly ZAR.

Approximately 43% (2012: 36%) of the Group’s sales are denominated in foreign currencies whilst all costs are denominated in the respective functional currencies of the Group entities. The Group’s trade receivable and trade payable balances at the reporting date have similar exposures.

The Group also holds cash and cash equivalents denominated in foreign currencies for working capital purposes. At the reporting date, such foreign currency net credit balances (mainly in ZAR) amount to RM7,325,946 (2012: RM9,828,696).

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the ZAR and Euro (“EUR”) exchange rates against the respective functional currencies of the Group entities, with all other variables held constant. 154 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

36. Financial risk management objectives and policies (Cont’d)

(e) Foreign currency risk(Cont’d)

Profit net of tax 2013 2012 RM RM ZAR/RM - strengthened 3% (2012: 3%) (65,789) (216,273) - weakened 3% (2012: 3%) 65,789 216,273 EUR/RM - strengthened 3% (2012: 3%) (48,769) (212,585) - weakened 3% (2012: 3%) 48,769 212,585

37. Capital management

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

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 December 2013 and 31 December 2012.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group includes within net debt, loans and borrowings, trade and other payables, less cash and bank balances. Capital includes equity attributable to the owners of the parent less the fair value adjustment reserve. Annual Report 2013 • PASDEC HOLDINGS BERHAD 155 Notes to the Financial Statements For the financial year ended 31 December 2013

37. Capital management (Cont’d)

Group Company Note 2013 2012 2013 2012 RM RM RM RM Loans and borrowings 27 96,509,035 93,178,404 650,888 30,158,121 Trade and other payables 30 71,501,120 66,758,076 5,559,024 9,841,629 Less: - Cash and bank balances 25 (17,760,412) (24,086,874) (14,555) (6,031,160) Net debt 150,249,743 135,849,606 6,195,357 33,968,590 Equity attributable to the owners of the parent 341,284,564 368,689,603 264,579,973 252,562,710 Less: Fair value adjustment reserve 32 (140,249) (37,449,601) - - Total capital 341,144,315 331,240,002 264,579,973 252,562,710

Capital and net debt 491,394,058 467,089,608 270,775,330 286,531,300

Gearing ratio 31% 29% 2% 12%

38. Segment information

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

I. Investment holding - provision of management services; II. Property development - the development of residential and commercial properties; III. Construction - construction of residential and commercial properties; IV. Manufacturing - manufacture of automotive related products; V. Others - value engineering and consultancy services.

Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a Group basis and are not allocated to operating segments. 156 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

38. Segment information (Cont’d)

Investment Property Manufac- holding development Construction turing Others Total Elimination Note Consolidated RM RM RM RM RM RM RM RM

31 December 2013

Revenue - Sales to external customers - 57,543,502 12,721,543 57,762,230 4,920,975 132,948,250 - 132,948,250 - Inter-segment sales 82,013,920 3,900 135,316 - 2,236,412 84,389,548 (84,389,548) A -

Total revenue 82,013,920 57,547,402 12,856,859 57,762,230 7,157,387 217,337,798 (84,389,548) 132,948,250

Results Depreciation 186,009 290,675 32,319 889,498 190,017 1,588,518 - 1,588,518 Share of results of associates - - - 3,912 - 3,912 (83,295) (79,383) Other non-cash expenses 16,184,028 2,948,904 - (572,917) - 18,560,015 - B 18,560,015 Profit/(loss) before tax (35,319,426) 35,285,476 (252,206) (2,610,403) 202,505 (2,694,054) 16,763,459 C 14,069,405

Assets Investment in associates - 4,956,750 - 14,104,400 - 19,061,150 1,920,853 20,982,003 Addition to non-current asset 651,875 40,461,365 27,091 4,683,365 1,195,703 47,019,399 - D 47,019,399 Segment assets 284,985,695 522,974,555 10,976,739 57,141,550 21,946,269 898,024,808 (381,239,778) E 516,785,030

Segment liabilities 12,559,123 234,609,367 9,643,316 59,055,661 10,774,323 326,641,790 (152,955,295) F 173,686,495 Annual Report 2013 • PASDEC HOLDINGS BERHAD 157 Notes to the Financial Statements For the financial year ended 31 December 2013

38. Segment information (Cont’d)

Investment Property Manufac- holding development Construction turing Others Total Elimination Note Consolidated RM RM RM RM RM RM RM RM Restated

31 December 2012

Revenue - Sales to external customers - 94,426,710 7,469,877 58,026,565 2,051,444 161,974,596 - 161,974,596 - Inter-segment sales 12,025,920 11,600 4,631,740 - 1,508,037 18,177,297 (18,177,297) A -

Total revenue 12,025,920 94,438,310 12,101,617 58,026,565 3,559,481 180,151,893 (18,177,297) 161,974,596

Results Depreciation 148,504 557,371 13,673 557,055 191,554 1,468,157 - 1,468,157 Share of results of associates - - - 739,090 - 739,090 30,254 769,344 Other non-cash expenses 11,324,325 (2,487,559) (68,490) 14,728,317 (37,875) 23,458,718 (10,892,779) B 12,565,939 Profit/(loss) before tax 13,409,556 20,746,716 (227,726) (12,696,935) 504,396 21,736,007 (2,581,508) C 19,154,499

Assets Investment in associates - 1,200,000 - 16,262,402 - 17,462,402 2,004,147 19,466,549 Addition to non-current asset 117,761 2,397,501 - 1,576,404 226,058 4,317,724 - D 4,317,724 Segment assets 349,779,220 505,500,967 9,206,402 56,927,638 19,889,250 941,303,477 (404,768,659) E 536,534,818

Liabilities Segment liabilities 38,649,020 140,758,889 7,645,017 60,198,484 10,477,827 257,729,237 (91,165,040) F 166,564,197 158 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

38. Segment information (Cont’d)

A Inter-segment revenues are eliminated on consolidation.

B Other material non-cash expenses consist of the following items as presented in the respective notes to the financial statements:

Note 2013 2012 RM RM Impairment of goodwill 9 15,647,938 14,679,710 Impairment of financial assets 9 3,217,236 883,021 Reversal of impairment losses 7 (297,646) (3,661,949) Impairment of property development cost 9 29,314 36,020 (Reversal)/provision for impairment of inventories 9 (572,917) 65,393 Increase in liability for defined benefit plan 10 536,090 563,744 18,560,015 12,565,939

C The following items are (deducted from)/added to segment profit to arrive at “Profit before tax from continuing operations” presented in the consolidated statement of comprehensive income:

2013 2012 RM RM Share of results of associates (83,295) 769,344 Profit from inter-segment sales 18,812,443 (1,414,499) Finance income (9,536,781) (25,528,341) Finance costs 9,536,781 25,528,341 Unallocated corporate (income)/expenses (1,965,689) (1,936,353) 16,763,459 (2,581,508)

D Additions to non-current assets consist of:

2013 2012 RM RM Property, plant and equipment 6,587,034 2,366,119 Land held for property development 40,432,365 1,951,605 47,019,399 4,317,724 Annual Report 2013 • PASDEC HOLDINGS BERHAD 159 Notes to the Financial Statements For the financial year ended 31 December 2013

38. Segment information (Cont’d)

E The following items are added to/(deducted from) segment assets to arrive at total assets reported in the consolidated statement of financial position:

2013 2012 RM RM Investment in associates 1,920,853 2,004,147 Investment in subsidiaries (235,641,278) (339,383,653) Inter-segment assets (147,519,353) (67,389,153) (381,239,778) (404,768,659)

F The following item is deducted from segment liabilities to arrive at total liabilities reported in the consolidated statement of financial position:

2013 2012 RM RM Inter-segment liabilities (152,955,295) (91,165,040)

Geographical information

Revenue and non-current assets information based on the geographical location of customers and assets respectively are as follows:

Revenues Non-current assets 2013 2012 2013 2012 RM RM RM RM Malaysia 75,186,020 103,948,031 154,345,359 181,156,074 South Africa 57,762,230 58,026,565 30,033,523 41,317,700 132,948,250 161,974,596 184,378,882 222,473,774 160 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notes to the Financial Statements For the financial year ended 31 December 2013

38. Segment information (Cont’d)

E The following items are added to/(deducted from) segment assets to arrive at total assets reported in the consolidated statement of financial position: (Cont’d)

Geographical information (Cont’d)

Non-current assets information presented above consist of the following items as presented in the consolidated statement of financial position:

2013 2012 RM RM Property, plant and equipment 18,839,609 15,132,628 Land held for property development 129,217,286 100,674,768 Investment properties 8,290,273 9,815,196 Investments in associates 20,982,003 19,466,549 Marketable securities 589,225 54,265,281 Deferred tax assets 6,460,486 7,471,414 Intangible asset - 15,647,938 184,378,882 222,473,774

39. Significant events

(a) During the year, the entire RM135 million nominal amount of REBs under Series 2 have been redeemed as disclosed in Note 29.

(b) On 10 June 2013, Pasdec Corporation Sdn. Bhd., a wholly owned subsidiary, had entered into a Sale and Purchase Agreement with Lintasan Mayang Development Sdn. Bhd. for the acquisition of 6.86 acres of land in Kuala Menggatal, Kota Kinabalu, Sabah for a total consideration of RM24,802,193.

40. Subsequent event

On 28 March 2014, Kimdec Corporation Sdn. Bhd., a wholly owned subsidiary, had disposed its land in Temerloh, Pahang Darul Makmur for a total consideration of RM25,905,328, resulting in a gain on disposal to the Group of RM3,367,568.

41. Comparatives

Certain comparative amounts have been reclassified and restated to conform with current year presentation.

42. Authorisation of financial statements for issue

The financial statements for the year ended 31 December 2013 were authorised for issue in accordance with a resolution of the directors on 24 April 2014. Annual Report 2013 • PASDEC HOLDINGS BERHAD 161 Notes to the Financial Statements For the financial year ended 31 December 2013

43. Supplementary information – breakdown of retained profits into realised and unrealised

The breakdown of the retained profits of the Group and of the Company as at 31 December 2013 into realised and unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Group Company 2013 2012 2013 2012 RM RM RM RM Restated Restated Total retained earnings/(accumulated losses) of the Company and its subsidiaries - Realised (66,395,255) (2,044,944) 13,086,223 1,068,960 - Unrealised 6,460,486 10,224,550 - - (59,934,769) 8,179,606 13,086,223 1,068,960 Total share of retained earnings from associates - Realised 2,782,291 2,861,673 - - (57,152,478) 11,041,279 13,086,223 1,068,960 Less: Consolidation adjustments (167,043,128) (86,366,477) - - Retained profits as per financial statements 109,890,650 97,407,756 13,086,223 1,068,960 162 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Eighteenth (18th) Annual General Meeting of PASDEC HOLDINGS BERHAD will be held at Meranti 1, Hyatt Regency Kuantan Resort, Telok Chempedak, 25050 Kuantan, Pahang Darul Makmur on Tuesday, 24 June 2014 at 10:30 a.m. for the following purposes:-

AGENDA

1. To receive the audited financial statements for the year ended 31 December 2013 together with the [Please refer reports of the Directors and Auditors thereon. Explanatory Note (i)] 2. To approve the payment of first and final tax exempt (single-tier system) dividend of 4 sen per ordinary share in respect of the financial year ended 31 December 2013. (Resolution 1)

3. To re-elect Dato’ Haji Abdul Rahim bin Mohd Ali who retires in accordance with Article 82 of the Company’s Articles of Association. (Resolution 2)

4. To re-elect the following Directors who retire in accordance with Article 83 of the Company’s Articles of Association:-

a) Dato’ Haji Mohamad Nor bin Ali (Resolution 3) b) Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob (Resolution 4)

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

i. “That pursuant to Section 129(6) of the Companies Act, 1965 Dato’ Abdul Ghani bin L. Sulaiman, who is over the age of seventy (70) years, be re-appointed as Director of the Company to hold office until the next Annual General Meeting”. (Resolution 5)

ii. “That pursuant to Section 129(6) of the Companies Act, 1965 Dato’ Mohamed Amin bin Haji Daud, who is over the age of seventy (70) years, be re-appointed as Director of the Company to hold office until the next Annual General Meeting”. (Resolution 6)

6. To approve Directors’ fees for the year ended 31 December 2013. (Resolution 7)

7. To re-appoint Messrs Hanafiah Raslan & Mohamad as Auditors and to authorise the Directors to fix their remuneration. (Resolution 8) Annual Report 2013 • PASDEC HOLDINGS BERHAD 163 Notice of Annual General Meeting

As Special Business To consider and if thought fit, to pass the following resolutions:-

8. Ordinary Resolution - Retention of Independent Directors

(a) “THAT subject to the passing of Ordinary Resolution 6, approval be and is hereby given to Dato’ Mohamed Amin bin Haji Daud, who has served as Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years to continue to act as an Independent Non-Executive Director of the Company in accordance with the Malaysian Code on Corporate Governance 2012.” (Resolution 9)

(b) “THAT approval be and is hereby given to Dato’ Sri Khalid bin Mohamad Jiwa, who has served as Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years to continue to act as an Independent Non-Executive Director of the Company in accordance with the Malaysian Code on Corporate Governance 2012.” (Resolution 10)

(c) “THAT approval be and is hereby given to Dato’ Abdullah bin A. Rasol, who has served as Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years to continue to act as an Independent Non-Executive Director of the Company in accordance with the Malaysian Code on Corporate Governance 2012.” (Resolution 11)

9. To consider any other business of which due notice shall have been given. NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS ALSO HEREBY GIVEN THAT a first and final tax exempt dividend (single their system) of 4 sen per ordinary share in respect of the financial year ended 31 December 2013, if approved by the shareholders at the Eighteenth Annual General Meeting, will be paid on 18 September 2014 to shareholders whose names appear in the Register of Depositors on 29 August 2014.

A depositor shall qualify for entitlement to the dividend only in respect of:- a. Shares transferred into the Depositors’ Securities Account before 4:00 p.m. on 29 August 2014 in respect of ordinary transfers; and b. Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.

By Order Of The Board,

SHAKERAH ENAYETALI Company Secretary

Kuantan 26 May 2014 164 PASDEC HOLDINGS BERHAD • Annual Report 2013 Notice of Annual General Meeting

NOTES :

1. In respect of deposited securities, only members whose names appear in the Record of Depositors on 18 June 2014 shall be entitled to attend and vote at the Meeting or appoint proxies to attend or vote in his/her stead.

2. A member entitled to attend and vote at the meeting may appoint not more than two proxies to attend and vote in his stead. A proxy may, but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to the qualification of the proxy.

3. A member of the Company who is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991 (SICDA) may appoint at least one proxy but not more than two proxies in respect of each securities account with ordinary shares in the Company standing to the credit of the said securities account.

4. Where a member is an exempt authorised nominee which holds ordinary shares in the Company for the omnibus account, there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. An exempt authorised nominee refers to an authorised nominee defined under the SICDA which is exempted from compliance with the provisions of subsection 25A (1) of the SICDA.

5. Where a member or the authorised nominee appoints two proxies, or where an exempt authorised nominee appoints two or more proxies, the proportion of shareholdings to be represented by each proxy must be specified in the instrument appointing the proxies.

6. The instrument appointing a proxy shall be signed by the appointor or his attorney duly authorised in writing or if the appointor is a corporation either under common seal or under the hand of an attorney or an officer duly authorised.

7. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 14th Floor, Menara Teruntum, Jalan Mahkota, 25000 Kuantan, Pahang Darul Makmur, at least 48 hours before the time appointed for holding the meeting or any adjournment thereof.

8. Explanatory Notes

(i) Item 1 of the Agenda

This item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of the shareholders for the audited financial statements. Hence, this item is not put forward for voting.

(ii) Retention of Independent Directors-Ordinary Resolutions 9, 10 and 11

The Board had assessed the independence of the Independent Non-Executive Directors who had served for a cumulative term of more than nine (9) years and recommended them to continue as Independent Non-Executive Directors of the Company. The Board had determined that Dato’ Mohamed Amin bin Haji Daud, Dato’ Sri Khalid bin Mohamad Jiwa and Dato’ Abdullah bin A. Rasol are fair and impartial in carrying out their duties to the Company. As Directors, they continue to bring independent and objective judgements to Board deliberations and the decision making process as a whole. They also possess diverse set of experience and expertise and bring the right mix of competencies and skills to the Board. Statement Accompaying Notice of Annual General Meeting (Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)

DETAILS OF INDIVIDUALS WHO ARE STANDING FOR ELECTION AS DIRECTORS (EXCLUDING DIRECTORS STANDING FOR RE-ELECTION)

No individual is seeking election as a Director at the Eighteenth Annual General Meeting of the Company. Proxy Form

I/We NRIC (New)/Company No.: (insert full name in block capital) of (full address) being a member/members of PASDEC HOLDINGS BERHAD hereby appoint (insert full name in block capital) NRIC (New)/Company No.: of (full address)

(full address) and/or NRIC (New) No.: (insert full name in block capital) of (full address) or failing him/her the Chairman of the meeting as my/our proxy/proxies to vote for me/us and on my/our behalf at the Eighteenth (18th) Annual General Meeting of the Company to be held at Meranti 1, Hyatt Regency Kuantan Resort, Teluk Chempedak, 25050 Kuantan, Pahang Darul Makmur on Tuesday, 24 June 2014 at 10:30 a.m. or any adjournment thereof, and to vote as indicated below:- (Please indicate with an “X” in the appropriate spaces provided below as to how you wish your vote to be cast. If you do not do so, the proxy/proxies will vote or abstain from voting at his/their discretion.) NO. AGENDA 1. To receive the Audited Financial Statements for the financial year ended 31 December 2013 together with the Reports of the Directors and Auditors thereon. Resolution For Against 2. To approve the payment of a first and final tax exempt (single-tier system) dividend of 4 sen per ordinary share in respect of the financial year ended 31 December 2013 1 3. Re-election of Dato’ Haji Abdul Rahim bin Mohd Ali 2 4. Re-election of Dato’ Haji Mohamad Nor bin Ali 3 5. Re-election of Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob 4 6. Re-appointment of Dato’ Abdul Ghani bin L. Sulaiman 5 7. Re-appointment of Dato’ Mohamed Amin bin Haji Daud 6 8. Approval of Directors’ Fees 7 9. Re-appointment of Messrs. Hanafiah Raslan & Mohamad as Auditors 8 10. Retention of Dato’ Mohamed Amin bin Haji Daud as Independent Director 9 11. Retention of Dato’ Sri Khalid bin Mohamad Jiwa as Independent Director 10 12. Retention of Dato’ Abdullah bin A. Rasol as Independent Director 11

Dated this day of 2014 No. of ordinary shares held: CDS Account No.: Proportion of First Proxy : % shareholdings to be represented by Second Proxy : % proxies Signature of Member/Common Seal Contact No.: NOTES : 1. In respect of deposited securities, only members whose names appear in the Record of 5. Where a member or the authorised nominee appoints two proxies, or where an exempt Depositors on 18 June 2014 shall be entitled to attend and vote at the Meeting or appoint authorised nominee appoints two or more proxies, the proportion of shareholdings to be proxies to attend or vote in his/her stead. represented by each proxy must be specified in the instrument appointing the proxies. 2. A member entitled to attend and vote at the meeting may appoint not more than two proxies 6. The instrument appointing a proxy shall be signed by the appointor or his attorney duly to attend and vote in his stead. A proxy may, but need not be a member of the Company and authorised in writing or if the appointor is a corporation either under common seal or under the the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. hand of an attorney or an officer duly authorised. There shall be no restriction as to the qualification of the proxy. 7. The instrument appointing a proxy must be deposited at the Registered Office of the Company 3. A member of the Company who is an authorised nominee as defined under the Securities at 14th Floor, Menara Teruntum, Jalan Mahkota, 25000 Kuantan, Pahang Darul Makmur, at Industry (Central Depositories) Act, 1991 (SICDA) may appoint at least one proxy but not more least 48 hours before the time appointed for holding the meeting or any adjournment thereof. than two proxies in respect of each securities account with ordinary shares in the Company standing to the credit of the said securities account. 4. Where a member is an exempt authorised nominee which holds ordinary shares in the Company for the omnibus account, there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. An exempt authorised nominee refers to an authorised nominee defined under the SICDA which is exempted from compliance with the provisions of subsection 25A (1) of the SICDA. Fold this flap for sealing

Then fold here

STAMP

The Company Secretary

PASDEC HOLDINGS BERHAD 14th Floor, Menara Teruntum Jalan Mahkota, 25000 Kuantan Pahang Darul Makmur

1st fold here PASDEC HOLDINGS BERHAD (367122-D) 14th Floor, Menara Teruntum, Jalan Mahkota, 25000 Kuantan, Pahang Darul Makmur. Telephone / Telefon : 09-513 3888 Facsimile / Faksimili : 09-514 5988 Website : www.pasdec.com.my