SILK Holdings Berhad - Malaysiastock.biz SILK Holdings Berhad ... and Chairman of Proton Holdings Berhad. ... Malaysia Berhad) as Senior Manager Corporate planning,

SILK Holdings Berhad (formerly known as Sunway Infrastucture Berhad) (405897-V)

a n n u a l r e p o r t 2009

Uniten Interchange

Kajang Perdana Interchange

Kajang Perdana Interchange

Country Heights Interchange

Corporate Information

Profile Of Board Of Directors

Chairman’s Statement

Five-Year Group Financial Summary

Corporate Governance Statement

Terms Of Reference Of Risk Management Committee

Terms of Reference of Nomination and Remuneration Committee

Audit Committee Report

Terms of Reference of Special Regularisation Plan And Investment Committee

Statement On Internal Control

Enterprise Risk Management Framework

Statement of Corporate Social Responsibility

Financial Statements

Additional Compliance Information

Substantial Shareholders

Directors’ Interests In Shares And Cumulative Non-Convertible Redeemable PreferenceShares (“CN-RPS”)

Analysis Of Shareholdings

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SILK HOLDINGS BERHADANNuAL REPORT 20092

Corporate Information

BOARD OF DIRECTORS

AUDIT COMMITTEE

Tai Keat Chai (Chairman) Dato’ Seri Syed Zainol Rashid Jamalullail Dato’ Ir. Hj. Ibrahim bin Hj YakubDato’ Harun bin Md Idris(appointed on 12/8/2009)Abdul Hamid bin Sh. Mohamed (appointed on 14/9/2009)

RISK MANAGEMENT COMMITTEE

Johan Zainuddin bin Dzulkifli(Chairman) Dato’ Seri Syed Zainol Rashid JamalullailNik Abdul Malik bin Nik Mohd Amin(appointed on 5/8/2009)Jamaludin Mohd Nor

NOMINATION AND REMUNERATION COMMITTEE

Dato’ Mohammed Azlan bin Hashim (Chairman) Datuk Razman M Hashim Dato’ Harun bin Md Idris(appointed on 12/8/2009)Johan Zainuddin bin Dzulkifli (resigned on 12/8/2009)

SPECIAL REGULARISATION PLANAND INVESTMENT COMMITTEE

Datuk Razman M Hashim (Chairman)(appointed on 23/9/2008)Tai Keat Chai(appointed on 23/9/2008)Abdul Hamid bin Sh. Mohamed (appointed on 23/9/2008)

COMPANY SECRETARIES

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

REGISTERED OFFICE

Suite 2.03, 2nd FloorWisma MiramaJalan Wisma Putra50460 Kuala LumpurWilayah Persekutuan

Tel No. : (03) 2141 5013 & 03-2141 5830Fax No : (03) 2144 0827

PRINCIPAL PLACE OF BUSINESS

Plaza Tol Sungai BalakKM28.3A, Lebuhraya KAJANG SILK43000 KajangSelangor Darul EhsanMalaysia

Tel No : (03) 8921 0000Fax No : (03) 8921 0001

SHARE REGISTRAR

Symphony Share Registrars Sdn BhdLevel 26, Menara MultipurposeCapital SquareNo. 8, Jalan Munshi Abdullah50100 Kuala Lumpur

Tel No : (03) 2721 2222 Fax No : (03) 2721 2530 / 2721 2531

AUDITORS

Ernst & YoungChartered Accountants

SOLICITORS

Lee Ong & Kandiah

PRINCIPAL BANKERS

Affin Islamic Bank BerhadPublic Bank BerhadHSBC Bank Malaysia Berhad

STOCK EXCHANGE LISTING

Main Market of Bursa MalaysiaSecurities Berhad

WEBSITE ADDRESS

www.silk.my

Executive Chairman,Non-Independent Executive DirectorDato’ Mohammed Azlan bin Hashim

Deputy Chairman,Non-Independent Non-Executive DirectorDatuk Razman M Hashim

Non-Independent Non-Executive DirectorsJohan Zainuddin bin Dzulkifli Ahmad Ishak bin Haron (appointed on 24/2/2009,resigned on 16/6/2009)

Independent Non-Executive DirectorsDato’ Seri Syed Zainol Rashid JamalullailDato’ Ir. Hj. Ibrahim bin Hj. YakubTai Keat Chai Abdul Hamid bin Sh. Mohamed Nik Abdul Malik Nik Mohd Amin(appointed on 24/2/2009)Dato’ Harun bin Md Idris(appointed on 12/8/2009)Liew Kiam Woon(resigned on 24 February 2009)

SILK HOLDINGS BERHADANNuAL REPORT 2009 3


Dato’ Mohammed Azlan Bin Hashim

Malaysian, aged 52Executive Chairman (Non-Independent) Chairman, Nomination and Remuneration Committee

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

A Chartered Accountant by profession, he graduated with a Bachelor of Economics from Monash university, Australia. He is a Fellow Member of the Institute of Chartered Accountants, Australia, member of Malaysian Institute of Accountants, Fellow Member of Malaysian Institute of Directors, Fellow Member of the Institute of Chartered Secretaries and Administrators and Honorary Member of The Institute of Internal Auditors, Malaysia. He has extensive experience in the corporate sector including financial services and investments. Among others, he has served as Chief Executive / Executive Director of Bumiputra Merchant Bankers Berhad, Group Managing Director of Amanah Capital Malaysia Berhad, Executive Chairman of Bursa Malaysia Berhad (formerly known as Kuala Lumpur Stock Exchange) Group, and Chairman of Proton Holdings Berhad.

Current directorships in public companies and other organisations include Khazanah Nasional Berhad, Labuan Offshore Financial Services Authority, D&O Ventures Berhad and Scomi Group Bhd. He is also Chairman of universiti Darul Iman Malaysia and is currently a Member of the Investment Panel of the Employees Provident Fund.

He has attended 7 of the 8 Board Meetings held in the financial period.

Datuk Razman M Hashim

Malaysian, aged 70Non-Executive Deputy Chairman (Non-Independent) Chairman, Special Regularisation Plan and Investment CommitteeMember, Nomination and Remuneration Committee

Datuk Razman M Hashim was appointed to the Board of SILK as Non-Executive Deputy Chairman on 10 June 2002.

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

Current directorships in other public companies include Sunway City Berhad, Ranhill Berhad, Multi-Purpose Holdings Berhad, MAA Holdings Berhad and Berjaya Land Berhad.

He has attended 7 out of the 8 Board Meetings held in the financial period.



Dato’ Seri Syed Zainol Rashid Jamalullail

Malaysian, aged 56Independent Non-Executive DirectorMember, Audit Committee Member, Risk Management Committee

Dato’ Seri Syed Zainol Rashid Jamalullail was appointed to the Board of SILK on 9 August 2002. He studied Commerce and Marketing in Australia and in the united Kingdom, and attained a Higher National Diploma in Business Studies, Marketing & Advertising from the College for the Distributive Trades, London.

Has more than 10 years of experience in International Business Development, being the Malaysian affiliate of the Larive Group BV, Netherlands. The company specialises in market research and business development. Former Executive Chairman of Enersave Water Sdn Bhd, a water and wastewater treatment company based in Shah Alam, Selangor Darul Ehsan and is currently the President of Semada (Thai) Co. Ltd, a company which specialises in trade and business development between Malaysia and Thailand.

He has no directorship in other public companies.


Dato’ Ir. Hj. Ibrahim Bin Hj. Yakub

Malaysian, aged 63Independent Non-Executive DirectorMember, Audit Committee

Dato’ Ir. Hj Ibrahim Bin Hj Yakub was appointed to the Board of SILK on 9 August 2002.

He graduated from Portsmouth Polytechnics, united Kingdom with a Bachelor of Science Degree majoring in Civil Engineering. A Member of the Institution of Engineers, Malaysia, the Board of Engineers, Malaysia and the Road Engineering Association of Malaysia. Also a Senior Director of a major engineering consultancy firm and Director of a few private companies in Malaysia.

Began his career with JKR, Kelantan as a Building Engineer in 1974. In 1978, held the position of Deputy Superintendent Engineer for the East-West Highway, Jeli, Kelantan before being promoted to Senior Executive Engineer at JKR Seberang Prai, Penang. Subsequently in 1983, was promoted to Deputy Director of JKR Kelantan. Former Director of Development of universiti Kebangsaan Malaysia, Selangor from 1988 to 1991.

Appointed as Deputy Director of Federal Development Department, Sabah in 1991 and subsequently as Director of Planning of JKR headquarters, Kuala Lumpur in 1996. Subsequently in 1996, appointed as Director of JKR, Selangor and held the position until his retirement in 2001.


He has attended all of the 8 Board Meetings held in the financial period.



Johan Zainuddin Bin Dzulkifli

Malaysian, aged 47Non-Executive Director (Non-Independent)Chairman, Risk Management CommitteeMember, Nomination and Remuneration Committee (resigned on 12 August 2009)

Johan Zainuddin Bin Dzulkifli was appointed to the Board of SILK as Non-Executive Director on 4 June 2008.

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

He has no directorship in other public companies

He has attended all of the 8 Board Meetings held in the financial period.

Tai Keat Chai

Malaysian, aged 55Independent Non-Executive DirectorChairman, Audit CommitteeMember, Special Regularisation Plan and Investment Committee

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

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

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

Current directorships in other public listed companies include Chuan Huat Resources Berhad, Disccomp Berhad, Cuscapi Berhad, Imaspro Corporation Berhad and Opensys (M) Berhad.


SILK HOLDINGS BERHADANNuAL REpORt 2009�


Abdul Hamid bin Sh. Mohamed

Malaysian, aged 44Independent Non-Executive DirectorMember, Special Regularisation Plan and Investment CommitteeMember, Audit Committee

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

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

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

Current directorships in other public companies include Symphony House Berhad, pos Malaysia Berhad, Hartalega Holdings Berhad and MMC Corporation Berhad.


Nik Abdul Malik bin Nik Mohd Amin

Malaysian, aged 51Independent Non-Executive DirectorMember, Risk Management Committee

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

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

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





Dato’ Harun bin Md Idris

Malaysian, aged 58Independent Non-Executive DirectorMember, Audit Committee Member, Nomination and Remuneration Committee

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

Aged 58, and graduated from the university Kebangsaan Malaysia with Diploma of Police Science. Dato’ Harun joined the Royal Malaysian Police (RMP) on 1 June 1970 as a Probationary Inspector. He served the RMP for 39 years and retired on 9 April 2009 with the rank of Deputy Commissioner of Police (DCP). His last post was as the Deputy Director 1, Special Branch.

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


NOTES:

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

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

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

4. Attendance of Board Meetings The attendance of the Directors at Board of Directors’ Meetings is disclosed in the Corporate Governance

Statement.

SILK HOLDINGS BERHADANNuAL REpORt 2009�

Chairman's Statement

ON BEHALF OF THE BOARD OF DIRECTORS, I AM PLEASED TO PRESENT THE ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS OF SILK HOLDINGS BERHAD FOR THE 13 MONTHS ENDED 31 JULY 2009.

FINANCIAL PERFORMANCE

For the period ended 31 July 2009, SILK Holdings Berhad (“SILK” or “the Group”) recorded a loss before tax of RM 37.3 million on the back of an improved revenue of RM 40.9 million. this marks a reduction in loss before tax of 47.1%, compared with the pre-tax loss after excluding one-time gain of RM 70.5 million. Revenue improved 23.6% to RM 40.9 million from RM 33.1 million recorded for the previous financial year.

In addition, the financial performance was also augmented by the significant improvement in the Group’s ability to manage costs. Although the Kajang SILK Highway is maturing and requires increasing levels of maintenance, the Group has managed to peg these expenditures to that of the prior year

the improved results have enabled the Group to meet its debt obligations during the period. During the financial period, Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd paid the minimum annual Ijarah Rental obligation of RM39.4 million together with an Excess Funds payment of RM 9.2 million to its Sukuk Mudharabah lenders.

OPERATING CONDITIONS

Despite tentative signs of economic stabilisation in several economies in recent months, the major advanced economies remain in severe recession. Meanwhile, the conditions in the international financial system have yet to normalise. the Malaysian economy has been adversely impacted by these negative global developments economy with our own economy contracting by 6.2% and 3.9% in the first and second quarters of 2009 respectively. the domestic economy is expected to improve in the second half of the year, supported by stabilisation in global economic conditions. this condition is reinforced by the accelerated implementation of the fiscal measures, the further moderation in inflation, continued access to financing, as well as from the cumulative effects of the accommodative monetary environment.

At the operating level, SILK’s subsidiary, Kajang SILK Highway recorded traffic volume of 39.3 million vehicles for the period under review. Average Daily traffic Volume improved to 99,170 vehicles per day, which is a 14.2% improvement over the Average Daily traffic Volume of 86,850 vehicles per day recorded in the previous financial year. After excluding the non-recurrent items from the loan restructuring, this improvement consequently resulted in an increased operating profit before interest of RM 25.1 million in 2009 compared to RM 20.4 million recorded in the previous financial year.

CORPORATE DEVELOPMENTS

SILK has during the course of the period under review, carried out various strategic and tactical initiatives aimed at strengthening the foundation for future growth.

Approval of the Regularisation Scheme

SILK had announced on 24 November 2008, that it intends to undertake a Regularisation Scheme to address its status under Amended practice Note 17/2005 of the Listing Requirements of Bursa Securities (“pN17”).

As a company under pN17, the Group had limited options as to how to move forward. It was also at great risk of being de-listed, which would have been detrimental to all its shareholders. Doing nothing and remaining status quo also clearly not an option. It had to have a meaningful strategy to generate new sources of cash and revenue. unfortunately, at the time, SILK had neither cash, nor cash generating assets. Borrowing to acquire cash generating assets is also not possible, given its pN17 status. As such, the main priority was to implement a series of actions that would enable SILK to address these issues quickly, effectively and efficiently and thereafter to apply for the upliftment of the pN17 status.

the Regularisation Scheme is comprised of several components including proposals designed to reconstruct SILK’s balance sheet and recapitalise the Company. the proposed acquisition of a new business in a growth industry is to provide future growth opportunities to the Group. Further details relating to the Regularisation Scheme can be found in the Group’s Circular to Shareholders dated 8 April 2009.



The Group’s shareholders at its reconvened Extraordinary General Meeting held on 20 July 2009 approved the Regularisation Scheme. The High Court has also approved SILK’s propose Par Value Reduction exercise on 28 August 2009. SILK is currently in the midst of implementing the various aspects of the Regularisation Scheme and expects this to be completed by the fourth quarter of 2009.

Strengthening of managerial resources

As SILK progresses, its human capital requirements, particularly at the managerial level, will also evolve accordingly. Given this, during the period under review, SILK took the conscious step to strengthen its managerial resources, particularly those that are core to the Group’s operations.

The Group foresees that this strengthening will be an ongoing process, with emphasis on enhancing the talent pool of critical functions. SILK firmly believes that the step taken to strengthen the managerial resources is a necessary and prudent long-term investment for the Group.

PROSPECTS

SILK’s improved financial performance for the period ended 31 July 2009 is a clear reflection of the power of perseverance, as well as the need to continuously change, refocus one’s priorities and adapt to changing situations.

Existing highway business

SILK in its present form, with the core business in highway operations is expected to continue to incur accounting losses in the immediate to medium term. This is consistent with the nature of an infrastructure company, which has a long gestation period.

At the operating level, efforts are being taken in the immediate term to contain and manage operational costs, including detailed identification of critical and non-critical costs and optimising of highway maintenance works. On a longer term basis, other measures being considered include:-

i) Improving traffic flow by promoting development along the highway;

ii) Working closely with adjacent highway concessionaires to improve connectivity and increasing traffic throughput;

iii) Improving non-toll revenue including:

(a) advertising and promotion revenue; and

(b) development of rest and service areas and to provide commercial activities including petrol stations

New business

As part of the strategic objective to enhance the financial performance of the Group, the Board has identified the oil and gas sector as the additional business driver for SILK. The initial investment in this sector is via the acquisition of AQL Aman Sdn Bhd (“AQL”), the holding company of Jasa Merin (M) Sdn Bhd (“Jasa Merin”), an offshore marine support services company, to the oil and gas sector.

Having reviewed the oil and gas industry, the Board of SHB is of the view that there are continuing prospects in the Malaysian market for Offshore Supply Vessels (“OSV”).

Malaysia currently has approximately two hundred and fifty (250) offshore oil and gas platforms. The planned development work for the Malaysian oil and gas industry is estimated to require approximately sixty (60) to seventy (70) new platforms over the next three (3) years. For every oil and gas platform, an estimated two (2) to three (3) AHTSVs and/or SSVs are required for transportation and logistic support. This would translate to an estimated additional demand for at least one hundred and twenty (120) new offshore vessels for the period.

The demand of OSVs is dependent on the level of activities in the oil and gas industry. At the exploration and development stage, high fuel prices would encourage development and exploration activities undertaken by the oil and gas majors and hence increase the demand for offshore support services. Where fuel prices are low, it is expected that the oil majors are likely to reduce or postpone some of the activities, given the substantial capital outlay involved.


However, with oil and gas being a depleting commodity and therefore scarce, it is expected that oil and gas prices will continue to experience an upward movement over the medium to longer term. Given that the majority of Malaysia’s oil and gas exploration, development and production activities are offshore, this is expected to translate into continued and increasing demand for offshore marine support services. Also, given the high cost of mobilisation and demobilisation, the impact of fluctuation in oil prices during the period on the level of exploration and development activities will be somewhat tempered.

However, in the event there is a major decline in the fuel price that is sustained over a longer period such that it is not economical for oil and gas majors to continue with the exploration and development activities, this will affect the demand for offshore support services.

In the case of AQL Group however, the risks of impact from fluctuating oil and gas prices is further mitigated as its vessels are mainly chartered to oil and gas majors on time charter contracts ranging from one (1) to ten (10) years.

In addition, in view of the large foreign participation in the Malaysian offshore support services sector, with an estimated 60-65% market share of OSVs, the prospects for local OSV operators to penetrate further into the market are considered bright.

In view of the above, AQL Group is in a good position to benefit from the continuing opportunity in the oil and gas sector. In this respect, AQL Group is currently pursuing a renewal and expansion program with the acquisition of six (6) new vessels which have been contracted for construction and are expected to be delivered during 2010 to 2012.

From a realistic perspective, it will clearly take time, significant effort and continued support from all stakeholders for SILK to achieve what it has set out to accomplish. The task is not insurmountable if everyone in SILK, from the Board to Management to our employees, along with the support of all the shareholders work together to take the Group to greater heights.

DIVIDENDS

In view of the absence of accumulated retained earnings and given the need to ensure that the Group is viably strengthened and able to achieve long-term and sustainable growth, the Board of Directors are not able to recommend the declaration of any dividend for the period ended 31 July 2009. With improved operating and financial performance in the future arising from the successful implementation of the Regularisation Scheme, the Board will revisit and review this position for the benefit of its shareholders.

ACKNOWLEDGEMENT

On behalf of the Board of Directors, I wish to convey our sincere appreciation to SILK’s management, staff and employees, at all levels and across the various functions. The Board is indeed appreciative of the perseverance and dedication shown by the Group staff throughout the challenging period of the last few years. It is my hope that all those connected with SILK will continue to work as one, to ensure the Group’s continued success, as it moves forward. My sincerest appreciation also goes out to our Board of Directors for their vision and commitment to guide SILK forward.

I would also like to take this opportunity to express my sincere gratitude to Y. Bhg. Dato’ Seri Syed Zainol Rashid Jamalullail and Y. Bhg. Dato. Ir. Hj. Ibrahim bin Hj. Yakub who will be retiring at this forthcoming Annual General Meeting and who have decided not to seek reappointment to the Board, for their service and contribution to the Company over the years.

And most certainly our greatest appreciation is to all our shareholders, big and small, who deserve much praise for continuing to remain with us throughout the challenges and difficulties encountered. I sincerely thank you all for this support, without which we could not have come this far. Going forward, we will continue to strive ahead to enhance shareholder value for the long term.

Thank you.

DATO’ MOHAMMED AZLAN BIN HASHIMExecutive Chairman



Five-Year Group Financial Summary

*2009 2008 2007 **2006 2004

RM’000 RM’000 RM’000 RM’000 RM’000

REVENUE 40,926 33,127 28,952 37,635 8,481

(Loss)/profit before taxation (37,323) 178,029 (82,870) (114,101) (35,282)Taxation (95) (13) (13) (9) (659)(Loss)/profit after taxation (37,418) 178,016 (82,883) (114,110) (35,941)(LOSS)/PROFIT ATTRIBUTABLE TO SHAREHOLDERS (37,418) 178,016 (82,883) (114,110) (35,941)

Other investment 0 0 17 17 17Property, plant and equipment 2,797 2,637 3,234 3,805 3,221Expressway development expenditure 920,277 921,110 925,325 929,296 914,455Current assets 5,893 26,779 121,114 105,759 91,504TOTAL ASSETS 928,967 950,527 1,049,690 1,038,877 1,009,197

Current Liabilities 60,931 37,572 1,066,988 24,100 14,606Long-term borrowings 764,736 772,237 20,000 969,192 834,896TOTAL LIABILITIES 825,667 809,809 1,086,988 993,292 849,502

TOTAL NET ASSETS/(LIABILITIES) 103,300 140,718 (37,298) 45,585 159,695

SHARE CAPITAL 90,000 90,000 90,000 90,000 90,000

SHAREHOLDERS’ FUNDS 103,300 140,718 (37,298) 45,585 159,695

EARNING/(LOSS) PER SHARE (SEN) (20.8) 98.9 (46.0) (63.4) (20.0)

NET TANGIBLE ASSETS/(LIABILITIES) PER SHARE (SEN) 57.4 78.2 (20.7) 25.3 88.7

* The Company changed its financial year end from 30 June to 31 July with effect from the financial period ended 31 July 2009 and accordingly, the results for that financial period are for 13 months.

** The Company changed its financial year end from 31 December to 30 June with effect from the financial period ended 30 June 2006 and accordingly, the results for that financial period are for 18 months.


The Board is committed to implementing the Malaysian Code on Corporate Governance (“the Code”) wherever applicable in the best interest of the shareholders of the Company.

A. DIRECTORS

THE BOARD AND ITS RESPONSIBILITIES

The Board leads and controls the Group. It regularly meets to perform its main functions, amongst others, as follows:-

• Setting the objectives, goals and strategic plans for the Group with a view to maximising shareholders’ value.• Adopting and monitoring progress of the Company’s strategies, budgets, plans and policies.• Overseeing the conduct of the Group’s businesses to evaluate whether the businesses are properly managed.• Identifying principal risks of the Group and ensuring the implementation of appropriate systems to mitigate and

manage these risks. The Board through the Risk Management Committee, sets, where appropriate, objectives, performance targets and policies to manage the key risks faced by the Group.

• Considering Management’s recommendations on key issues including acquisitions, divestments, restructuring, funding and significant capital expenditure.

• Human resources planning and development.• Reviewing the adequacy and integrity of the Company’s internal control systems and management information

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

The Board delegates certain responsibilities to the Board Committees, all of which operate within defined terms of reference.

BOARD COMPOSITION

The current Board consists of 9 members, 6 or 2/3 are Independent Non-Executive Directors. The composition reflects a balance of Executive and Non-Executive Directors with a mix of suitably qualified and experienced professionals in the fields of construction, civil engineering, accountancy, finance, banking and business administration. This combination of different professions and skills working together enables the Board to effectively lead and control the Company. The Board composition also fairly reflects the investment in the Company by shareholders other than the significant shareholder.

A brief profile of each Director is presented on pages 3 to 7 of the Annual Report.

MEETINGS AND SUPPLY OF INFORMATION

unless there are urgent matters, the Board normally meets quarterly to review financial, operational and business performances. Notices and agenda of meetings duly endorsed by the Executive Chairman together with relevant board papers are normally given at least 1 week prior to the meetings for the Directors to study and evaluate the matters to be discussed. The board papers provided include inter alia, financial results, business plan and budget, progress report on the Company’s developments, minutes of meetings of Board Committees, regulatory/statutory updates and other operational and financial issues for the Board’s information and/or approval.

All Directors are entitled to information pertaining the Company. In addition, all Directors have direct access to the advice and services of the Company Secretaries. They are also permitted to seek independent advice whenever deemed necessary, at the Company’s expense.

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



The Board met 8 times during the financial period ended 31 July 2009 and the attendance of the respective Directors was as follows:-

Number of Percentage of Meetings AttendanceName of Directors Attended (%)

Dato’ Mohammed Azlan bin Hashim 7/8 88Datuk Razman Md Hashim bin Che Din Md Hashim 7/8 88Dato’ Seri Syed Zainol Rashid Jamalullail 7/8 88Dato’ Ir Hj Ibrahim bin Hj Yakub 8/8 100Johan Zainuddin bin Dzulkifli 8/8 100Tai Keat Chai 7/7 100Liew Kiam Woon 2/4 50Abdul Hamid bin Sheikh Mohamed 7/7 100Nik Abdul Malik bin Nik Mohd Amin 4/4 100Dato’ Harun bin Md Idris 0/0 n/aAhmad Ishak bin Haron 2/3 67

DIRECTORS’ TRAINING

During the financial period, the Directors had attended various training programmes and seminars organised by the relevant regulatory authorities and professional bodies to broaden their knowledge and to keep abreast with the relevant changes in law, regulations and the business environment.

The training programmes, seminars and workshops attended by the Directors during the financial period are, inter-alia, on areas relating to corporate governance, risk management and financial reporting.

Training Programmes, Seminars and Workshops Attended by Directors

Course Title / Organiser Date

Off-Site Board Strategic(Affin Bank Berhad) 11-12 August 2008

Khazanah Global LecturesBy Dr. A.P.J. Abdul Kalam (former President of India)(Khazanah Nasional) 28 August 2008

Strategy, Assessment & Structure of Risk Management(Malaysian Institute of Accountants) 23 October 2008

Off-Site Board Strategic(Affin Bank Berhad) 25-26 October 2008

Dialogue Session with FTSE Group & Bursa Malaysia 13 April 2009

Evaluating the Performance of Board(Chartered Institute of Management Accounts) 7 May 2009

All Directors were also constantly updated by the Company Secretary on changes to the relevant guidelines on the regulatory and statutory requirements.



RETIREMENT BY ROTATION AND RE-ELECTION

The Company’s Articles of Association provides that 1/3 of the Board are subject to retirement by rotation at each Annual General Meeting. Each Director shall retire at least once every 3 years but shall be eligible for re-election. The Directors to retire in each year are those who have been longest in office since their last election or appointment.

To assist the shareholders in their decision, sufficient information such as personal profile, attendance of meetings and the shareholdings of each Director standing for re-election are disclosed in the Statement Accompanying Notice of Annual General Meeting.

BOARD COMMITTEES

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

1. Audit Committee

The Audit Committee comprises Tai Keat Chai as Chairman, Dato’ Seri Syed Zainol Rashid Jamalullail, Dato’ Ir. Hj. Ibrahim bin Hj. Yakub, Dato’ Harun bin Md Idris and Abdul Hamid bin Sh. Mohamed.

The Audit Committee is set up to play an active role in assisting the Board in discharging its governance responsibilities.

The composition of the Audit Committee, its terms of reference, attendance of meetings and a summary of its activities are set out on pages 21 to 25 of the Annual Report.

2. Risk Management Committee

The Risk Management Committee comprises Johan Zainuddin bin Dzulkifli as Chairman, Dato’ Seri Syed Zainol Rashid Jamalullail, Nik Abdul Malik bin Nik Mohd Amin and Jamaludin bin Mohd Nor.

The Risk Management Committee is tasked with the responsibility to oversee the risk management activities of the Group, approving appropriate risk management procedures and measurement methodologies across the organisation as well as identification and management of strategic business risks of the Group. The terms of reference of the Risk Management Committee are set out on pages 17 and 18 of the Annual Report.

3. Nomination and Remuneration Committee The Nomination and Remuneration Committee was formed on 24 June 2008 and comprises Dato’ Mohammed Azlan

bin Hashim as Chairman, Datuk Razman M Hashim and Johan Zainuddin bin Dzulkifli until his resignation on 12 August 2009, and Dato’ Harun bin Md Idris.

The terms of reference of the Nomination and Remuneration Committee are set out on pages 19 and 20 of the Annual Report.

4. Special Regularisation Plan and Investment Committee

The Special Regularisation Plan and Investment Committee (“Special Committee”) was formed on 23 September 2008 and comprises Datuk Razman M Hashim as Chairman, Tai Keat Chai and Abdul Hamid bin Sh. Mohamed. The Special Committee was established to evaluate and recommend to the Board the proposed Regularisation Plan of SILK Holdings Berhad for submission to Bursa Securities and Securities Commission.

In addition, the Special Committee was also expected to evaluate and recommend to the Board the Regularisation Plan taking into consideration the need to uplift SILK Holdings from its PN17 status and strengthening the financial position of SILK Holdings moving forward.

The terms of reference of the Special Regularisation Plan and Investment Committee are set out on page 26 of the Annual Report.



B. DIRECTORS’ REMUNERATION

The remuneration of the Executive Director is structured on the basis of linking rewards to corporate and individual performance. For Non-Executive Directors, the level of remuneration reflects the experience and level of responsibilities.

The Board as a whole resolves on the fees for the Non-Executive Directors with individual Directors abstaining from decisions in respect of their individual remuneration. The fees payable to the Non-Executive Directors are subject to the approval of shareholders.

The breakdown of the Directors’ remuneration during the financial period is as follows:-

Executive Non-Executive Director Directors Total RM RM RM

Fees 0 138,000 138,000Other Emoluments 0 58,000 58,000Salaries and other Remuneration 474,858 0 474,858Bonus 27,261 0 27,261Benefits-in –kind 1,200 0 1,200

Total: 503,319 196,000 699,319

The number of Directors whose remuneration falls under the following bands:-

Executive Non-ExecutiveRange of Remuneration Directors Directors Total

Below RM50,000 0 8 8 RM200,001 to RM250,000 1 0 1RM250,001 to RM300,000 1 0 1

Total: 2 8 10

C. SHAREHOLDERS

DIALOGUE BETWEEN THE COMPANY AND INVESTORS

The Board values constant dialogue and is committed to clear communication with its shareholders and investors. In this respect, as part of the Group’s active investor relations programme, discussions and dialogues are held with fund managers, financial analysts and shareholders to convey information about the Group’s performance, corporate strategy and other matters affecting shareholders’ interests.

In addition to published Annual Report and Quarterly Reports announced to Bursa Securities, the Group has established a website at http://www.silk.my from which investors and shareholders can access for information.

While the Company endeavours to provide as much information as possible to its shareholders and stakeholders, it is mindful of the legal and regulatory framework governing the release of material and price-sensitive information. To achieve this, the Board had approved and adopted a Corporate Disclosure Policy which outlines the Company’s approach toward the determination and dissemination of material information, the circumstances under which the confidentiality of information will be maintained, response to market rumours and restrictions on insider trading. This Policy also provides guidance and structure in disseminating corporate information to, and in dealing with, investors, analysts, media and the investing public.

ANNUAL GENERAL MEETING

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




D. ACCOUNTABILITY AND AUDIT

FINANCIAL REPORTING

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

INTERNAL CONTROL The Statement on Internal Control set out on pages 27 to 28 of the Annual Report provides an overview of the state of internal controls within the Group.

RELATIONSHIP WITH THE AUDITORS

The Board maintains, via the Audit Committee, an active, transparent and professional relationship with its Auditors. The role of the Audit Committee in relation to the Independent Auditors is disclosed in the Audit Committee Report set out on pages 21 to 25 of the Annual Report.

E. DIRECTORS’ RESPONSIBILITY STATEMENT ON ANNUAL AUDITED FINANCIAL STATEMENTS

The Directors are responsible in the preparation of the Annual Audited Financial Statements to give a true and fair view of the state of affairs, results and cash flows of the Company and of the Group at the end of the financial period.

In preparing the financial statements, the Directors will ensure that suitable accounting policies have been applied consistently, and that reasonable and prudent judgments and estimates have been made. All applicable approved accounting standards and provisions of the Companies Act, 1965 have been complied with.

The Directors are also responsible for ensuring that proper accounting and other records are kept which disclose with reasonable accuracy, the financial position of the Company and of the Group and which enables them to ensure that the financial statements comply with the relevant statutory requirements.

F. COMPLIANCE WITH THE CODE

The Group has complied substantially with the principles and best practices outlined in the Code except for the following:-

1. Appointment of Senior Independent Non-Executive Director

The Board has not found it necessary to identify a Senior Independent Non-Executive Director to whom concerns relating to the affairs of the Group may be conveyed, as there are a number of experienced and competent senior independent directors on the Board. In addition, the Executive Chairman encourages full deliberation of issues affecting the Group by all members of the Board.

This Corporate Governance Statement was approved by the Board of Directors on 14 September 2009.

Dato’ Mohammed Azlan bin HashimExecutive Chairman


1. MEMBERSHIP

(a) The Risk Management Committee (“RMC”) shall be appointed by the Board and shall comprise not fewer than 3 in number.

(b) The members of the RMC shall elect a Chairman from among their number.

(c) In the event of any vacancy in the RMC resulting in the number of members being reduced to below 3, the Board shall, within 3 months fill the vacancy.

(d) The Board shall have the discretion as it deems fit to rescind and/or revoke the appointment of any person(s) in the RMC.

2. ROLES AND FUNCTIONS

The RMC has the overall responsibility for overseeing the risk management activities of the Group, approving appropriate risk management procedures and measurement methodologies across the organization as well as identification and management of strategic business risks of the Group. Its primary roles include the following:-

(a) To champion and promote the Enterprise Risk Management and to ensure that the risk management process and culture are embedded throughout the Group.

(b) To ensure the implementation of the objectives outlined in the Risk Management Policy and compliance with them.

(c) To provide routine quarterly reporting and update the Board on key risk management issues as well as ad hoc reporting and evaluation on investment proposals.

(d) To work with the Group Financial Controller and Group Internal Auditor in the preparation of the Statement on Internal Control for inclusion in the Company’s Annual Report and to recommend the same for the approvals of the Audit Committee and Board.

2.1 Routine Roles and Responsibilities

(a) Review the effectiveness of overall risk management at the enterprise level. (b) Follow-up on management action plans based on the status of implementation compiled by the

management.

(c) Identify new strategic risks including corporate matters e.g. Regulatory, business development, etc.

(d) Review the enterprise risk scorecard and determine the risks to be escalated to the Board on the quarterly basis.

2.2 Ad hoc Roles and Responsibilities

(a) Propose to the Board, the monetary threshold and nature of proposed investments that require the RMC’s evaluation and endorsement before submission to the Board.

(b) Review proposals/feasibility studies prepared by project sponsor which meet the requisite threshold before recommending to the Board for final decision.

Terms of Reference of Risk Management Committee


Terms of Reference of Risk Management Committee

3. MEETINGS

(a) The RMC shall meet at least quarterly in a year. However, additional meetings may be called at any time at the RMC Chairman’s discretion.

(b) The quorum for the meeting shall be 2 members.

4. REPORTING

The Chairman of the RMC shall report the proceedings of each Committee Meeting to the Board.

5. SECRETARY

The Secretary to the RMC shall be the Company Secretary.


1. MEMBERSHIP

(a) The Nomination and Remuneration Committee shall be appointed by the Board from among their number and shall comprise not fewer than three (3) in number.

(b) The majority of the members of the Committee shall be Non- Executive Directors.

(c) The members of the Committee shall elect a Chairman from among their number.

(d) In the event of any vacancy in the Committee resulting in the number of members being reduced to below three (3), the Board shall, within three (3) months fill the vacancy.

2. AUTHORITY

(a) The Nomination and Remuneration Committee is entrusted with the task of proposing new nominees for the Board and for assessing existing Directors on an on-going basis.

(b) The ultimate decision as to who shall be nominated should be the responsibility of the full Board after considering the recommendation of such a Committee.

3. FUNCTIONS

(a) To determine the core competencies and skills required of Board members to best serve the business and operations of the Group as a whole and the optimum size of the Board to reflect the desired skills and competencies.

(b) To review the size of Non-Executive participation, Board balance and determine if additional Board members are required and also to ensure that at least one-third (1/3) of the Board is independent.

(c) To recommend to the Board on the appropriate number of Directors to comprise the Board which should fairly reflect the investments of the minority shareholders in the Company, and whether the current Board representation satisfies this requirement.

(d) To recommend to the Board, candidates for all directorships to be filled by the shareholders of the Board.

(e) To consider in making its recommendations, candidates for directorships proposed by the Chief Executive Officer and, within the bounds of practicability, by any other senior executive or any Director or shareholder.

(f ) To recommend to the Board, Directors or officers of the Company to fill the seats on Board Committees.

(g) To undertake an annual review of the required mix of skills and experience and other qualities of Directors, including core competencies which Non- Executive Directors should bring to the Board and to disclose this in the Annual Report.

(h) To assist the Board to implement a procedure to be carried out by the Nomination and Remuneration Committee

annually for assessing the effectiveness of the Board as a whole, the Committees of the Board and for assessing the contributions and performance of Directors and Board of Committee members.

(i) To introduce such regulations or guidelines, procedures to function effectively and fulfill the Committee’s objective.

(j) To ensure that the Company’s Executive Directors are fairly rewarded for their individual contributions to the Company’s overall performance and the levels of remuneration should be sufficient to attract and retain Directors to run the Company successfully.




(k) To demonstrate to all stakeholders in the business that the remuneration of the Executive Directors of the Company is set by a Committee of Board members who have no personal interest in the outcome of their decisions and who will give due regard to the interests of the stakeholders and to the financial and commercial health of the Company.

(l) To recommend to the Board the remuneration of the Executive Chairman and Executive Directors.

(m) To assume responsibility for all elements of Executive Directors’ remuneration eg:

(i) Basic salary (ii) Profit sharing schemes (if any) (iii) Share Options (iv) Any other benefits (v) Compensation for early termination

(n) To ensure that a fair differential between the remuneration of Board members and other levels of management is maintained.

(o) To conduct continued assessment of individual Executive Directors to ensure that remuneration is directly related to corporate and individual performance.

(p) To obtain the advice and information from external source, if necessary, to compare the remuneration currently earned by the Executive Directors and those paid to Executive Directors of other companies of a similar size in a comparable industry sector.

(q) To ensure that the base salary element is competitive but fair.

(r) To advise on and monitor, a suitable performance related formula ie. whether the formula is based on individual performance, company profit performance, earnings per share etc.

(s) To provide an objective and independent assessment of the benefits granted to Executive Directors.

(t) To introduce any policy or guidelines which would enable the smooth administration and effective discharge of the Committee’s duties and responsibilities.

(u) To furnish a report to the Board of any findings of the Committee.

4. MEETINGS

(a) The Committee shall meet at least once a year. However, additional meetings may be called at any time at the Nomination and Remuneration Committee Chairman’s discretion.

(b) The quorum for the meeting shall be two (2) members.

5. REPORTING

The Chairman of the Committee shall report on each meeting to the Board.

6. SECRETARY

The Secretary to the Committee shall be the Company Secretary.


FORMATION

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

The objective of the Audit Committee is to assist the Board of Directors in fulfilling its fiduciary responsibilities relating to internal controls, financial and accounting records and policies as well as financial reporting practices of the Company and its subsidiaries (“the Group).

COMPOSITION

The members of the Audit Committee as at 30 September 2009 were as follows:

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

2. Dato’ Seri Syed Zainol Rashid Jamalullail (Independent Non-Executive Director)

3. Dato’ Ir. Hj. Ibrahim bin Hj. Yakub (Independent Non-Executive Director)

4. Dato’ Harun bin Md Idris (appointed on 12 August 2009) (Independent Non-Executive Director)

5. Abdul Hamid bin Sh. Mohamed (appointed on 14 September 2009) (Independent Non-Executive Director)

MEETING AND ATTENDANCE

The Audit Committee held 5 meetings during the financial period and the attendance of the Committee Members was as follows :

Number of MeetingsName of Committee Member Attended

Tai Keat Chai 5/5Dato’ Seri Syed Zainol Rashid Jamalullail 4/5Dato’ Ir. Hj. Ibrahim bin Hj. Yakub 5/5

The Company Secretaries and the Internal Auditors and the Chief Financial Officer were present at all meetings. At 2 of the meetings, the Independent Auditors were present.

TERMS OF REFERENCE

1. Membership

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

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

1.3 The Committee shall include at least 1 person :

(a) who is a member of the Malaysian Institute of Accountants; or

(b) who must have at least 3 years working experience and:-




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

(ii) is a member of 1 of the Associations specified in Part II of the 1st Schedule of the Accountants Act, 1967; or

(c) who must have at least 3 years post qualification experience in accounting or finance and:-

(i) has a degree/masters/doctorate in accounting or finance; or

(ii) is a member of 1 of the professional accountancy organisations which has been admitted as a full member of the International Federation of Accountants; or

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

1.4 No Alternate Director shall be appointed as a member of the Committee.

1.5 The members of the Committee shall elect a Chairman from amongst their number.

1.6 If a member of the Committee resigns, dies or for any reason ceases to be a member with the result that the number of members is reduced below 3, the Board shall, within 3 months appoint such number of new members as may be required to make up the minimum of 3 members.

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

2. Meetings

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

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

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

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

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

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

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

2.8 The Secretary of the Committee shall be entrusted to record all proceedings and minutes of all meetings of the Committee.

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


3. Right and Authority

The Committee is authorized to:-

3.1 Investigate any matter within its terms of reference.

3.2 Have adequate resources required to perform its duties.

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

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

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

4. Functions and Duties

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

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

(a) With the Independent Auditors;-

(i) the audit plan and audit report and the extent of assistance rendered by employees of the Auditee.

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

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

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

(v) issues and reservations arising form audits.

(b) With the Internal Auditors:-

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

(ii) the audit plan to work programme and results of internal audit processes including recommendations and actions taken;

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

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

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

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

(ii) significant and unusual issues;

(iii) going concern assumption; and

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

(d) The major findings of investigations and management response.



(e) The propriety of 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.

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

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

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

(b) the terms of reference of the Committee; (c) the number of meetings held and details of attendance of each members;

(d) a summary of the activities of the Committee in the discharge of its functions and duties; and

(e) a summary of the activities of the internal audit function.

4.5 To review the following for publication in the Company’s Annual Report;-

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

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

(ii) the extent of compliance with the best practices set out in Part II of the Malaysian Code on Corporate Governance, specifying reasons for any area of non-compliance and the alternative measures adopted in such areas.

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

(c) the disclosure statement on the state of the internal controls system of the Company and of the Group.

(d) the statement by the Audit Committee on the verification of allocation of share options to the Group’s eligible employees in compliance with the criteria set out in the Bye-Laws of the Company’s Employees’ Share Option Scheme, at the end of each financial year.

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

Market Listing Requirements of Bursa Securities.

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

5. Internal Audit Function

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

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

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

5.4 The total costs incurred for the internal audit function of the Group for the financial period ended 31 July 2009 was RM47,000.




ACTIVITIES OF THE COMMITTEE FOR THE FINANCIAL PERIOD ENDED 31 JULY 2009

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

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

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

(c) Reviewed with the Independent Auditors, the audit plan of the Company and of the Group for the year (Inclusive of risk and audit approach, system evaluation, audit fees, issues and management responses) prior to the commencement of the annual audit.

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

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

(f ) Reviewed the quarterly results and financial statements for the financial period ended 31 July 2009 with management and the Independent Auditors for recommendation to the Board of Directors for approval and release to Bursa Securities.

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

(h) Reviewed and approved the Circular to Shareholders and the statements by the Audit Committee in respect of the Proposed Shareholders’ Mandate for Recurrent Related Party Transactions.

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

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

INTERNAL AUDIT ACTIVITIES REPORT FOR THE FINANCIAL PERIOD ENDED 31 JULY 2009

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

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

(b) Performed risk based audits on strategic business units of the Company and of the Group, which covered reviews of the internal control system, accounting and management information system and risk management.

(c) Issued audit reports to the Committee and management identifying weaknesses and issues as well as highlighting recommendations for improvements.

(d) Acted on suggestions made by the Committee and/or senior management on concerns over operations or controls and significant issues pertinent to the Company and of the Group.

(e) Reported to the Committee on review of the adequacy, appropriateness and compliance with the procedures established to monitor highway management, toll operations, procurement, information management and strategic management.

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

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


Terms of Reference of Special Regularisation Plan And Investment Committee

Membership

The Committee shall comprise 3 members from the Board of Directors. In the interest of independence and transparency, Independent Non-Executive Directors, with experience in corporate exercises, shall form the majority of the committee. The members of the special committee are: 1. Datuk Razman M Hashim (Chairman)2. Tai Keat Chai3. Abdul Hamid bin Sh. Mohamed

The Committee shall be assisted, where necessary, by relevant advisers such as investment bank, lawyers and accountants or any other advisers deemed necessary.

Authority and Responsibilities:

The Board grants the Committee authority and responsibility to:

1. Review and recommend for approval by the Board the Regularisation Plan as proposed by the Management to be submitted to Bursa Malaysia and Securities Commission

2. Approve/ratify of the appointment of advisers such as investment bankers, lawyers, accountants, consultants and other investment professionals as appropriate and recommended by Management

The Committee is guided as follows:-:

1. The Committee shall decide on the number of meetings necessary. 2. A quorum shall consist of a majority of the members.3. The Committee Chairman, who shall be a member, shall preside at all meetings and the Chairman shall present any

findings or recommendations to the Board.4. The Committee shall have the authority to delegate to subcommittees and to Management staff.5. The Administrator shall be the Company’s secretary.6. The Committee’s conclusions shall be reached by consensus; any minority views shall be recorded in the minutes of

the meeting.7. A record shall be drawn up of every meeting of the Committee. After the Committee has approved it, a copy shall be

forwarded to the Board of Directors.


INTRODUCTION

The Malaysian Code on Corporate Governance stipulates that the Board of Directors of listed companies should maintain a sound system of internal control to safeguard shareholders’ investment and Group’s assets. Set out below is the Group Statement on Internal Control (“Statement”), made in compliance with Paragraph 15.27 of the Main Market Listing Requirements of Bursa Securities and the Statement on Internal Control: Guidance for Directors of Public Listed Companies.

THE BOARD’S RESPONSIBILITY

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

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

The Group has in place an on-going process of identifying, evaluating, monitoring and managing the key risks affecting the achievement of its business objectives throughout the period. The Board reviews this process on a quarterly basis.

THE GROUP’S SYSTEM OF INTERNAL CONTROL

Monitoring Mechanisms and Management Style

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

The daily running of the business is entrusted to the Chief Operating Officer and his management team. under the purview of the Chief Operating Officer, the heads of department are empowered with the responsibility of managing their respective operations. The Chief Operating Officer actively communicates the Board’s expectations to management at management meetings as well as through attendance at various operations meetings. At these meetings, operational and financial risks are discussed and dealt with.

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


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

The details on Enterprise Risk Management Framework are set out on page 29 of the Annual Report.

Statement on Internal Control


Statement on Internal Control

Key Elements of the Group’s System of Internal Control

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

• Clear Group vision, mission and corporate philosophy and strategic direction, which is communicated to employees at all level.

• An effective Board which retains control over the Group with appropriate management reporting mechanisms which enable the Board to review the Group’s progress.

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

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

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

handbook which is also available on the intranet. • A systematic performance appraisal system for all levels of staff.• Relevant training provided to personnel across all functions to maintain a high level of competency and capability. • An internal audit function that carries out internal audits based on an annual risk-based audit plan approved by the

Audit Committee (see also Assurance Mechanisms below).

Assurance Mechanisms

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

In addition, the AC also reviews and deliberates on any matters relating to internal control highlighted by the external auditors in the course of their statutory audit of the financial statements of the Group. There were no major internal control weaknesses identified during the financial period.

The Report of the AC is set out on pages 21 to 25 of the Annual Report.

THE BOARD’S COMMITMENT

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

This Statement on Internal Control was approved by the Board of Directors on 14 September 2009.

Dato’ Mohammed Azlan bin Hashim Executive Chairman



The SILK Group (“the Group”) utilises Enterprise Risk Management (“ERM”) to identify all potential risks that need to be addressed to ensure that the Group will be able to achieve its goal.

The Group has an integrated ERM structure that enables the Group to identify, evaluate, monitor and manage all key risks pertaining to the business and its environment. The Group strives to maximise every opportunity, and thus seeks to minimise all potential risks through proactive management.

RISK MANAGEMENT PROCESS

It is the Board’s view that the Group’s objectives, its internal organisation and the environment in which it operates continuously evolve; and as a result, the risks that it faces also change. A sound system of internal control therefore depends on a thorough and regular evaluation of the nature and extent of the risks to which the Group is exposed to.

To ensure effective risk management within the Group, the following risk management framework has been identified and implemented throughout the Group. It is acknowledged that risks are very closely integrated with opportunities and returns, and thus has to be managed to ensure that the Group is able to achieve its corporate strategy and objectives.

THE GROUP’S ERM FRAMEWORK

Corporate Strategiesand Objectives

Risk Identification

Risk Assessment

Risk Response

Control Activities

Risk Monitoring



RISK MANAGEMENT STRUCTURE

Strategic and effective risk management is performed through a centralised reporting and managing structure that has been put into place. 3 major levels have been identified to promote accountability and responsibility of managing risks within the Group.

(a) Risk Working Committee (“RWC”)

The RWC consists of representatives from the divisional heads. The RWC will meet when the need arises, where representatives from the respective divisions have the overall responsibility to report key risks to the attention of the RWC.

(b) Risk Management Committee (“RMC”)

The key responsibilities of the RMC are to report and update the Board on key risk management issues as well as ad-hoc reporting and evaluation on investment proposals. The RMC is also responsible to champion and promote the Enterprise Risk Management and to ensure that the risk management process and culture are embedded throughout the Group.

(c) Board of Directors

The Board of Directors serves as an oversight to the risk management process of the entire Group. Roles of the Board include identifying principal risks of the Group and ensuring the implementation of appropriate systems to mitigate and manage these risks. The Board, through the RMC sets, where appropriate, objectives, performance targets and policies to manage the key risks faced by the Group.

Risk Working Committee

Risk Management Committee

Board of Directors


The company recognises it has obligations to protect and contribute positively to the needs of a range of stakeholders in the community and environment in which it operates. Towards this end, it has adopted a series of Standard Operating Procedures (“SOPs”) to guide its employees and to create awareness in support of its Corporate Social Responsibility initiatives. The SOPs includes guides to appropriate workplace behaviour. Employee health and well-being is constantly looked after through the effective and stringent implementation of good Occupational Safety and Health practices in all its business operations. The SOPs also enunciates the company’s approach to supporting community and environmental programmes.

The Company is dedicated to meeting or exceeding the regulatory requirements that govern its activities and will continually look to applying environmentally friendly practices. The Group has made consistent donations to various worthwhile causes to help the needy and to elevate the standard of living and the quality of life of communities.

Statement of Corporate Social Responsibility

FinancialStatement

Directors’ Report

Statement By Directors

Statutory Declaration

Independent Auditors’ Report

Balance Sheets

Income Statements

Statements of Changes In Equity

Cash Flow Statements

Notes To The Financial Statements

33 - 36

37

37

38 - 39

40

41

42

43 - 44

45 - 72


Directors’ Report

The directors hereby present their report together with the audited financial statements of the Group and of the Company for the period ended 31 July 2009. PRINCIPAL ACTIVITIES AND AFFECTED LISTED ISSUER STATUS The principal activity of the Company is investment holding. The principal activities of the subsidiaries are disclosed in Note 5 to the financial statements. There have been no significant changes in the nature of the principal activities during the financial period.

Pursuant to the amendments to the Listing Requirements (“LR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) in relation to Practice Note No. 17/2005 (“Amended PN17”) which is effective from 5 May 2006, the Company on 28 November 2006 announced (“First Annoucement”) that the Company is deemed an Affected Listed Issuer as defined in the Amended PN17 as the auditors have expressed a modified opinion with emphasis on the Company’s going concern in the Company’s audited financial statements for the period ended 30 June 2006 and the unaudited shareholders’ equity of approximately RM26.702 million based on its quarterly results for the period ended 30 September 2006 is less than 50% of its issued and paid up capital of RM90 million.

As an Affected Listed Issuer, the Company is required to submit a Regularisation Plan as defined in paragraph 8.14C(3) of Bursa Securities LR to the Securities Commission (“SC”) and other relevant authorities for approval (collectively referred to as the “Approving Authority”) within 8 months from the date of the First Announcement (“Submission Timeframe”) or as extended by SC.

On 12 December 2008, the Company submitted an application on the Proposed Regularisation Scheme, as disclosed in Note 24(c), to SC for approval. The Proposed Regularisation Scheme was approved by SC on 30 March 2009, and subsequently, by the shareholders of the Company on 20 July 2009.

At the date of this report, the Company is implementing the Proposed Regularisation Scheme and is expected to complete the Proposed Regularisation Scheme by end of 2009 as disclosed in Note 25.

CHANGE OF FINANCIAL YEAR END

During the financial period, the Group changed its financial year end from 30 June to 31 July. Accordingly, the financial statements cover a 13-month period from 1 July 2008 to 31 July 2009.

RESULTS

Group Company RM RM

Loss for the period (37,417,932) (1,707,504)

There were no material transfers to or from reserves or provisions during the financial period.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial period were not substantially affected by any item, transaction or event of a material and unusual nature, other than the gain on sale of shares pledged by a former guarantor of BaIDS of RM3,136,256 as disclosed in Note 24(a) to the financial statements.


Directors’ Report

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’ Mohammed Azlan bin HashimDatuk Razman M Hashim Dato’ Seri Syed Zainol Rashid JamalullailDato’ Ir Hj Ibrahim bin Hj YakubJohan Zainuddin bin DzulkifliAbdul Hamid bin SH MohamedTai Keat ChaiNik Abdul Malik bin Nik Mohd Amin (appointed on 24 February 2009)Dato’ Harun bin Md Idris (appointed on 12 August 2009)Liew Kiam Woon (resigned on 24 February 2009)Ahmad Ishak bin Haron (appointed on 24 February 2009 and resigned on 16 June 2009)

DIRECTORS’ BENEFITS Neither at the end of the financial period, nor at any time during that period, 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 18 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, except as disclosed in Note 21 to the financial statements.

DIRECTORS’ INTEREST

According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial period in shares in the Company during the financial period were as follows: Number of Ordinary Shares of RM0.50 Each 1.7.2008 Acquired Sold 31.7.2009

Direct interestDatuk Razman M Hashim 1,175,000 – (1,175,000) –Dato’ Ir Hj Ibrahim bin Hj Yakub 79,000 – – 79,000 Dato’ Seri Syed Zainol Rashid Jamalullail 75,000 – – 75,000

Deemed interestDatuk Razman M Hashim + 31,707,001 – (31,707,001) – Dato’ Mohammed Azlan bin Hashim * 65,090,802 – – 65,090,802 Johan Zainuddin bin Dzulkifli * 65,090,802 – – 65,090,802

Number of Unexercised Warrants 2003/2008 1.7.2008 Acquired Expired 31.7.2009

Direct interestDatuk Razman M Hashim 137,500 – (137,500) – Dato’ Seri Syed Zainol Rashid Jamalullail 37,500 – (37,500) –Dato’ Ir Hj Ibrahim bin Hj Yakub 37,500 – (37,500) –

Deemed interestDatuk Razman M Hashim + 527,500 – (527,500) –


Directors’ Report

DIRECTORS’ INTEREST (CONT’D)

Number of CN-RPS of RM0.10 each 1.7.2008 Acquired Sold 31.7.2009

Deemed interestDatuk Razman M Hashim @ 5,100,000 – (596,667) 4,503,333

+ By virtue of his interest in shares of Petroforce (M) Sdn. Bhd. (“PMSB”), Dekon Holdings Sdn. Bhd. (“DHSB”) and Dekon Sdn. Bhd. (“DSB”), Datuk Razman M Hashim is deemed to have an interest in the shares and warrants of the Company to the extent PMSB, DHSB and DSB have an interest.

@ By virtue of his interest in shares of PMSB, Datuk Razman M Hashim is deemed to have an interest in CN-RPS of the Company to the extent PMSB has an interest.

* By virtue of their interests in the shares of Infra Bumitek Sdn Bhd (“IBSB”), Dato’ Mohammed Azlan bin Hashim and Johan Zainuddin bin Dzulkifli are deemed to have interests in the shares of the Company to the extent IBSB has an interest.

By virtue of their interests in the shares of the Company, Datuk Razman M Hashim, Dato’ Mohammed Azlan bin Hashim and Johan Zainuddin bin Dzulkifli are also deemed to have interests in the shares of the subsidiaries of the Company to the extent that the Company has an interest. WARRANTS The Warrants 2003/2008 were constituted under a Deed Poll dated 25 August 2003 in conjunction with the Company’s Public Issue and Renounceable Rights Issue in December 2003. The salient features of the warrants are as follows: (a) each warrant entitles its registered holder to subscribe for one new ordinary share of RM0.50 each at the exercise

price during the exercise period;

(b) the exercise price is RM1.50 per share subject to adjustments thereto in accordance with conditions of the Deed Poll;

(c) the exercise period of the warrants is for five years from their issue date and expired on 10 December 2008; and

(d) the new ordinary shares of RM0.50 each to be issued pursuant to the exercise of the warrants will rank pari passu in all respects with the existing ordinary shares of the Company.

During the financial period, no warrants were converted to ordinary shares. There were 30,000,000 outstanding warrants as at the date of expiration, 10 December 2008. The expired Warrants were subsequently removed from the Official List of Bursa Securities on 11 December 2008.

OTHER STATUTORY INFORMATION

(a) Before the balance sheets and income statements 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 there were no known bad debts and that no provision for doubtful debts was necessary; and

(ii) to ensure that any current assets which were unlikely to realise their values 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.


Directors’ Report

OTHER STATUTORY INFORMATION (CONT’D)

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

(i) it necessary to write off any bad debts or to make any provision for doubtful debts in respect of the financial statements of the Group and of the Company; 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 financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

(e) As 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 period 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 period.

(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 period 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 period 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 period in which this report is made.

SIGNIFICANT EVENTS

Details of significant events are disclosed in Note 24 to the financial statements.

SUBSEqUENT EVENT

Details of subsequent event are disclosed in Note 25 to the financial statements.

AUDITORS

The auditors, Ernst & Young, have expressed their willingness to continue in office. Signed on behalf of the Board in accordance with a resolution of the directors dated 14 September 2009.

DATO’ MOHAMMED AZLAN BIN HASHIM JOHAN ZAINUDDIN BIN DZULKIFLI


We, DATO’ MOHAMMED AZLAN BIN HASHIM and JOHAN ZAINuDDIN BIN DZuLKIFLI, being two of the directors of SILK HOLDINGS BERHAD (FORMERLY KNOWN AS SuNWAY INFRASTRuCTuRE BERHAD), do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 40 to 72 are drawn up in accordance with the provisions of the Companies Act, 1965 and Financial Reporting Standards 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 July 2009 and of the results and the cash flows of the Group and of the Company for the period then ended. Signed on behalf of the Board in accordance with a resolution of the directors dated 14 September 2009.

DATO’ MOHAMMED AZLAN BIN HASHIM JOHAN ZAINUDDIN BIN DZULKIFLI

Statutory DeclarationPursuant to Section 169(16) of The Companies Act, 1965

I, JAMALuDIN MOHD NOR, being the Officer primarily responsible for the financial management of SILK HOLDINGS BERHAD (FORMERLY KNOWN AS SuNWAY INFRASTRuCTuRE BERHAD), do solemnly and sincerely declare that the accompanying financial statements set out on pages 40 to 72 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 declaredby the abovenamed JAMALuDIN MOHD NORat Kuala Lumpur in the FederalTerritory on 14 September 2009 JAMALUDIN MOHD NOR

Before me,

Statement By DirectorsPursuant to Section 169(15) of The Companies Act, 1965



Independent auditors’ report to the members ofSILK HOLDINGS BERHAD (formerly known as Sunway Infrastructure Berhad)(Incorporated in Malaysia)

REPORT ON THE FINANCIAL STATEMENTS We have audited the financial statements of SILK Holdings Berhad (formerly known as Sunway Infrastructure Berhad), which comprise the balance sheets as at 31 July 2009 of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the period then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 40 to 72.

Directors’ responsibility for the financial statements

The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

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 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 judgment, 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 and fair presentation of the financial statements 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 the 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 have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 July 2009 and of their financial performance and cash flows for the period then ended.

REPORT ON OTHER LEGAL AND REGULATORY REqUIREMENTS

In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following: (a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company

and its subsidiaries have been properly kept in accordance with the provisions of the Act. (b) We are satisfied that the accounts of the subsidiaries that have been consolidated with the 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.

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


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.

Ernst & Young Abdul Rauf RashidAF: 0039 No. 2305/05/10(J)Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia14 September 2009



Group Company 31.7.2009 30.6.2008 31.7.2009 30.6.2008 Note RM RM RM RM

Assets Non-current assetsProperty, plant and equipment 3 2,796,710 2,637,357 – –Expressway development expenditure 4 920,276,861 921,109,856 – –Investment in a subsidiary 5 – – 160,000,000 160,000,000

923,073,571 923,747,213 160,000,000 160,000,000

Current assetsReceivables 6 1,234,078 442,595 2,000 2,000 Short term deposits with financial institutions 7 1,570,969 23,137,639 – – Cash and bank balances 3,088,222 3,199,163 77,257 71,447 5,893,269 26,779,397 79,257 73,447

Total assets 928,966,840 950,526,610 160,079,257 160,073,447

Equity and liabilitiesEquity attributable to equity holders of the CompanyShare capital 8 90,000,002 90,000,002 90,000,002 90,000,002 Share premium 9 53,632,520 53,632,520 53,632,520 53,632,520 Merger reserve 60,000,000 60,000,000 – –Accumulated losses (100,332,882) (62,914,950) (7,743,770) (6,036,266)

Total equity 103,299,640 140,717,572 135,888,752 137,596,256

Non-current liabilityBorrowings 10 764,735,992 772,236,660 20,000,000 20,000,000

764,735,992 772,236,660 20,000,000 20,000,000

Current liabilitiesPayables 11 60,755,975 37,569,524 3,264,024 1,968,939 Amount due to a subsidiary 12 – – 806,648 505,398 Tax payable 119,833 2,854 119,833 2,854 Borrowings 10 55,400 – – –

60,931,208 37,572,378 4,190,505 2,477,191

Total liabilities 825,667,200 809,809,038 24,190,505 22,477,191

Total equity and liabilities 928,966,840 950,526,610 160,079,257 160,073,447

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

Balance Sheets As At 31 July 2009


Group Company 1.7.2008 1.7.2007 1.7.2008 1.7.2007 to to to to 31.7.2009 30.6.2008 31.7.2009 30.6.2008 Note RM RM RM RM

Revenue 16 40,925,654 33,121,594 770,602 –Direct costs (11,872,528) (12,762,329) – –

Gross profit 29,053,126 20,359,265 770,602 –Net gain on settlement of BaIDS – 198,544,848 – –Compensation received upon release of Letter of undertaking by Sunway Holdings Berhad – 50,000,000 – – Gain on sale of shares pledged by a former guarantor of BaIDS 24(a) 3,136,256 – – –Other income 1,970,262 4,444,711 – 17,533 Administrative expenses (5,925,918) (12,908,484) (1,949,924) (881,704)

Operating profit/(loss) 28,233,726 260,440,340 (1,179,322) (864,171)Finance costs 17 (65,556,809) (82,411,330) (433,333) (400,000)

(Loss)/profit before tax 18 (37,323,083) 178,029,010 (1,612,655) (1,264,171)Income tax expense 19 (94,849) (13,392) (94,849) (13,392)

(Loss)/profit for the period (37,417,932) 178,015,618 (1,707,504) (1,277,563)

(Loss)/earnings per share (sen)- basic 20 (20.8) 98.9- diluted 20 (20.8) 98.9


Income Statements For The Period Ended 31 July 2009


Statement of Changes In Equity For The Period Ended 31 July 2009

Share Share Merger Accumulated Capital Premium Reserve Losses Total RM RM RM RM RM

Group

At 1 July 2007 90,000,002 53,632,520 60,000,000 (240,930,568) (37,298,046)Profit for the year – – – 178,015,618 178,015,618

At 30 June 2008 90,000,002 53,632,520 60,000,000 (62,914,950) 140,717,572 Loss for the period – – – (37,417,932) (37,417,932)

At 31 July 2009 90,000,002 53,632,520 60,000,000 (100,332,882) 103,299,640

Company

At 1 July 2007 90,000,002 53,632,520 – (4,758,703) 138,873,819 Loss for the year – – – (1,277,563) (1,277,563)

At 30 June 2008 90,000,002 53,632,520 – (6,036,266) 137,596,256 Loss for the period – – – (1,707,504) (1,707,504)

At 31 July 2009 90,000,002 53,632,520 – (7,743,770) 135,888,752



Consolidated Cash Flow Statement For The Period Ended 31 July 2009

1.7.2008 1.7.2007 to to 31.7.2009 30.6.2008 Note RM RMGroup (Restated)

Cash flows from operating activities

Collection of toll revenue 40,347,766 33,121,594 Collection of other income 4,010,208 1,667,011 Tax recovered 22,130 – 44,380,104 34,788,605 Payment of expenses (14,801,422) (25,912,645)

Net cash generated from operating activities 29,578,682 8,875,960

Cash flows from investing activities

Interest and profits received from Syariah placements 876,915 2,856,985 Proceeds from disposal of property, plant and equipment 5,800 347,000 Government grants received – 820,220 Purchase of property, plant and equipment (a) (280,922) (46,078)Addition to expressway development expenditure – (294,000)

Net cash generated from investing activities 601,793 3,684,127

Cash flows from financing activities

Repayment of borrowings (7,745,268) – Repayment of finance costs (44,112,818) – Compensation received upon release of Letter of undertaking by Sunway Holdings Berhad – 50,000,000 Payment of transaction costs on settlement of BaIDS – (603,805)Part repayment of BaIDS in cash – (153,000,000)

Net cash used in financing activities (51,858,086) (103,603,805)

Net decrease in cash and cash equivalents (21,677,611) (91,043,718)

Cash and cash equivalents at beginning of the period/year 26,336,802 117,380,520

Cash and cash equivalents at end of the period/year (b) 4,659,191 26,336,802


Consolidated Cash Flow Statement For The Period Ended 31 July 2009

Note

a) During the period/year, property, plant and equipment were acquired by the following means:

31.7.2009 30.6.2008 RM RM

Cash 280,922 46,078 Hire purchase 300,000 – 580,922 46,078

b) Cash and cash equivalents comprise the following balance sheet amounts: 31.7.2009 30.6.2008 RM RM

Short term deposits with financial institutions 1,570,969 23,137,639 Cash and bank balances 3,088,222 3,199,163

4,659,191 26,336,802

1.7.2008 1.7.2007 to to 31.7.2009 30.6.2008 RM RMCompany (Restated)

Cash flows from operating activities

Collection of revenue – 12,500 Payment of expenses (16,340) (357,021)Tax recovered 22,130 –

Net cash generated from operating activities 5,790 (344,521)

Cash flows from investing activity Interest received, representing net cash flow from investing activity 20 5,505

Net increase/(decrease) in cash and cash equivalents 5,810 (339,016)Cash and cash equivalents at beginning of the period/year 71,447 410,463

Cash and cash equivalents at end of the period/year 77,257 71,447



Notes To The Financial Statements 31 July 2009

1. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at Suite 2.03, 2nd Floor, Wisma Mirama, Jalan Wisma Putra, 50460 Kuala Lumpur, Wilayah Persekutuan.

The principal activity of the Company is investment holding. The principal activities of the subsidiaries are disclosed in Note 5. There have been no significant changes in the nature of the principal activities during the financial period.

Pursuant to the amendments to the Listing Requirements (“LR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) in relation to Practice Note No. 17/2005 (“Amended PN17”) which is effective from 5 May 2006, the Company on 28 November 2006 announced (“First Announcement”) that the Company is deemed an Affected Listed Issuer as defined in the Amended PN17 as the auditors have expressed a modified opinion with emphasis on the Company’s going concern in the Company’s audited financial statements for the period ended 30 June 2006 and the unaudited shareholders’ equity of approximately RM26.702 million based on its quarterly results for the period ended 30 September 2006 is less than 50% of its issued and paid up capital of RM90 million.

As an Affected Listed Issuer, the Company is required to submit a Regularisation Plan as defined in paragraph 8.14C(3) of Bursa Securities LR to the Securities Commission (“SC”) and other relevant authorities for approval (collectively referred to as the “Approving Authority”) within 8 months from the date of the First Announcement (“Submission Timeframe”) or as extended by SC.

On 12 December 2008, the Company submitted an application on the Proposed Regularisation Scheme, as disclosed in Note 24(c), to SC for approval. The Proposed Regularisation Scheme was approved by SC on 30 March 2009, and subsequently, by the shareholders of the Company on 20 July 2009.

At the date of this report, the Company is implementing the Proposed Regularisation Scheme and is expected to complete the Proposed Regularisation Scheme by end of 2009 as disclosed in Note 25.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 14 September 2009.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements comply with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia.The financial statements of the Group and of the Company have also been prepared on a historical cost basis.

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

2.2 Summary of significant accounting policies

(a) Subsidiary and basis of consolidation

(i) Subsidiaries

Subsidiaries are entities over which the Group has the ability to control the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity.

In the Company’s separate financial statements, investments in subsidiaries are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in the income statement.



2. SIGNIFICANT ACCOUNTING POLICIES (CONTD)

2.2 Summary of significant accounting policies (contd)

(a) Subsidiary and basis of consolidation (contd)

(ii) Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the balance sheet date. The financial statements of the subsidiaries are prepared for the same reporting date as the Company.

Subsidiaries are consolidated using the acquisition method from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. In preparing the consolidated financial statements, intragroup balances, transactions and unrealised gains or losses are eliminated in full. uniform accounting policies are adopted in the consolidated financial statements for like transactions and events in similar circumstances.

Prior to 1 January 2006, acquisition of subsidiaries that meets the conditions of a merger are allowed to be accounted for using the merger method. The acquisition of the subsidiary, Sistem Lingkaran-Lebuhraya Kajang Sdn. Bhd. (“SILK”) had been satisfied entirely by the issue of shares in the Company, and has been accounted for by application of the principles of merger accounting. By the merger method of accounting, the results of the Company and its subsidiaries are presented as if the companies have been in combination throughout the current and previous financial years. The difference between the cost of acquisition over the fair value of the share capital of the subsidiary acquired is taken to merger reserve.

(b) Property, plant and equipment, and depreciation

All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when 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. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. 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 life, at the following annual rates: Building 2% Motor vehicles 20% Furniture, fittings, computer and office equipment 10% to 33 1/3% Renovation 8%

The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognised in the income statement.





(c) Impairment of non-financial assets

The carrying amounts of non-financial assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine the amount of impairment loss.

For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash-generating unit (“CGu”) to which the asset belongs to.

An asset’s recoverable amount is the higher of an asset’s or CGu’s fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. An impairment loss is recognised in the income statement in the period in which it arises.

An impairment loss for an asset is reversed if, and 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. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset is recognised in the income statement.

(d) Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where 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. Where discounting is used, the increase in the provision due to the passage of time is recognised as finance cost.

(e) Expressway development expenditure

Expressway Development Expenditure (“EDE”) comprises development expenditure, upgrading expenditure (including borrowing costs during the period of construction, net of interest income) incurred in connection with the Concession, net of Government grants.

EDE is stated at cost less accumulated amortisation and impairment loss.

upon commencement of tolling operations, at each balance sheet date, the cumulative actual expenditure on EDE incurred is amortised to the income statement based on the following formula:

(Cumulative Actual Less

Accumulated Toll Revenue to date )

X Cumulative Actual EDE Amortisation

(Projected Total Toll Revenue at beginning of The Concession) of the financial period





(e) Expressway development expenditure (contd)

The projected total toll revenue of the Concession is based on the “base case” traffic volumes projected by the management, taking into account the minimum toll rates as provided for in the Concession Agreement. The toll revenue projection is updated from time to time to reflect latest available information.

In the application of these accounting policies, the effects of any change in estimates in a financial period will be included in the amortisation for that period.

(f) Income tax

Income tax on the profit or loss for the period comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of taxable profit for the year and is measured using tax rates that have been enacted at the balance sheet date.

Deferred tax is provided for, using the liability method. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is to be settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised as income or an expense and included in the profit and loss for the period, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also recognised directly in equity.

(g) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of these assets, until such time as the assets are substantially ready for their intended use or sale. Such capitalisation ceases when substantially all activities necessary to prepare those assets for their intended use or sale are completed.

All other borrowing costs are recognised in the income statement in the period in which they are incurred.

(h) Employee benefits

(i) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as expenses in the period 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.





(h) Employee benefits (contd)

(ii) Defined contribution plans

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to the employee services in the current and preceding financial years. Such contributions are recognised as an expense in the income statement as incurred. As required by law, companies in Malaysia make contributions to the Employees Provident Fund (“EPF”).

(i) Revenue recognition

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. The following specific recognition criteria must also be met before revenue is recognised:

(i) Toll revenue

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

(ii) Interest income

Interest income is recognised on an accrual basis using the effective interest method.

(iii) License fees

License fees are recognised based on contract value upon transfer of the significant risks and rewards of ownership of the rights.

(iv) Advertising income and maintenance fees

Advertising income and maintenance fees are recognised when the services are rendered and over the term of the agreements.

(v) Rental income

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

(j) Financial instruments

Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends and gains and losses relating to a financial instrument classified as a liability, are reported as expense or income. Distributions to holders of financial instruments classified as equity are recognised directly in equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.





(j) Financial instruments (contd)

(i) Cash and cash equivalents

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

(ii) Receivables

Receivables are carried at anticipated realisable values. Bad debts are written off when identified. An estimate is made for doubtful debts based on a review of all outstanding amounts as at the balance sheet date.

(iii) Payables

Payables are stated at the fair value of the consideration to be paid in the future for goods and services received.

(iv) Sukuk Mudharabah

Sukuk Mudharabah is an Islamic financing arrangement issued under the Islamic contract of

Mudharabah. under the Mudharabah, the Group as a Mudharib or an enterpreneur who solely manages the project entered into an Islamic contract with a Rabbul Mal or an investor who solely provides the capital. If the venture is profitable, the profit wil be distributed based on a pre-agreed ratio. In the event of a business loss, the loss shall be borne solely by the provider of the capital.

Sukuk Mudharabah is initially recognised at cost, being the fair value of the consideration received. After initial recognition, Sukuk Mudharabah is subsequently measured at amortised cost using the effective interest method. Further details of the Sukuk Mudharabah in issue are disclosed in Note 13.

(v) Cumulative Non-Convertible Redeemable Preference Shares (“CN-RPS”)

The CN-RPS is recorded at the amount of proceeds received, net of transaction costs.

The CN-RPS is classified as non-current liabilities in the balance sheet and the preferential dividends are recognised as finance costs in the income statement in the period in which they are incurred.

(vi) Hire purchase

Hire purchase is initially recognised at the fair value of the consideration received. After initial recognition, interest bearing hire purchase is subsequently measured at amortised cost using the effective interest method.

(vii) Equity instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in

the period in which they are declared.

The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transaction costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been avoided.





(k) Leases

(i) Classification

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental to ownership. Leases of land and buildings are classified as operating or finance leases in the same way as leases of other assets and the land and buildings elements of a lease of land and buildings are considered separately for the purposes of lease classification. All leases that do not transfer substantially all the risks and rewards are classified as operating leases.

(ii) Finance leases - the Group as lessee

Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation and impairment losses. The corresponding liability is included in the balance sheet as borrowings. In calculating the present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it is practicable to determine; otherwise, the Group’s incremental borrowing rate is used. Any initial direct costs are also added to the carrying amount of such assets.

Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised in the profit or loss over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period.

The depreciation policy for leased assets is in accordance with that for depreciable property, plant and equipment as described in Note 2.2(b).

(iii) Operating Leases - the Group as lessee

Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. 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.

In the case of a lease of land and buildings, the minimum lease payments or the up-front payments made are allocated, whenever necessary, between the land and the buildings elements in proportion to the relative fair values for leasehold interests in the land element and buildings element of the lease at the inception of the lease. The up-front payment represents prepaid lease payments and are amortised on a straight-line basis over the lease term.

(iv) Operating Leases - the Group as lessor

Assets leased out under operating leases are presented on the balance sheet according to the nature of the assets. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease (Note 2.2(i)(v)). Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.




2.3 Standards and interpretations issued but not yet effective

At the date of authorisation of these financial statements, the following new FRSs and Interpretations were issued but not yet effective and have not been applied by the Group and Company:

Effective for financial periodsFRS, Amendment to FRS and Interpretation beginning on or after

FRS 8 Operating Segments 1 July 2009FRS 7 Financial Instruments: Disclosures 1 January 2010FRS 139 Financial Instruments: Recognition 1 January 2010 and MeasurementIC Interpretation 9 Reassessment of Embedded Derivatives 1 January 2010IC Interpretation 10 Interim financial reporting and impairment 1 January 2010

The new FRSs and Interpretations above are expected to have no significant impact on the financial statements of the Group and Company upon their initial application.

The Group and Company are exempted from disclosing the possible impact, if any, to the financial statements upon the initial application of FRS 7 and FRS 139.

2.4 Significant accounting estimates and judgements

(a) Critical judgements made in applying accounting policies

There are no critical judgements made by management in the process of applying the Group’s accounting policies that have significant effect on the amounts recognised in the financial statements.

(b) Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet 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.

(i) Amortisation of EDE

The cost of EDE and Government grant received is amortised over the Concession Period by applying the formula in Notes 2.2(e). The denominator of the formula includes projected total toll revenue for subsequent years to year 2037 and is based on the latest traffic volume projections prepared using the base case assumptions on traffic volume growth rate multiplied by the toll rates in accordance with the Concession Agreement. The toll revenue projection is updated from time to time to reflect latest available information. Changes in the expected traffic volume would impact future amortisation charges. The management has revised the toll revenue projections during the period and the changes in the expected traffic volume have resulted in a decrease in current period’s amortisation.

(ii) Impairment of investment in subsidiary and EDE

The Company determines whether investment in subsidiary and EDE are impaired at least on an annual basis. This requires an estimation of the value-in-use of investment in subsidiary and EDE. Estimating value-in-use amounts requires management to make an estimate of the expected future cash flows from investment in subsidiary and EDE and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amounts of investment in subsidiary of the Company and EDE of the Group as at 31 July 2009 was RM160 million and RM920,276,861 (30 June 2008: RM160 million and RM921,109,856) respectively. Further details are disclosed in Note 4 and 5.




2.4 Significant accounting estimates and judgements (contd)

(b) Key sources of estimation uncertainty (contd)

(iii) Deferred tax assets

Deferred tax assets are only recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the losses and capital allowances can be utilised. Significant judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. No deferred tax assets of the Group are recognised and the unrecognised tax losses of the Group as at 31 July 2009 amounted to RM319,804,456 (30 June 2008: RM279,920,872).

3. PROPERTY, PLANT AND EqUIPMENT

Furniture, fittings, computer Motor and office Building vehicles equipment Renovation Total RM RM RM RM RM

Group

At 31 July 2009

Cost At 1 July 2008 1,224,000 1,334,672 1,018,019 1,210,884 4,787,575 Additions – 467,638 113,284 – 580,922 Disposals – (37,615) – – (37,615)

At 31 July 2009 1,224,000 1,764,695 1,131,303 1,210,884 5,330,882

Accumulated depreciation At 1 July 2008 77,520 1,035,174 678,139 359,385 2,150,218 Charge for the period 26,520 214,210 75,896 104,943 421,569 Disposals – (37,615) – – (37,615)

At 31 July 2009 104,040 1,211,769 754,035 464,328 2,534,172

Net carrying amount 1,119,960 552,926 377,268 746,556 2,796,710



3. PROPERTY, PLANT AND EqUIPMENT (CONTD)

Furniture, fittings, computer Motor and office Building vehicles equipment Renovation Total RM RM RM RM RM

Group

At 30 June 2008

CostAt 1 July 2007 1,224,000 2,124,253 982,541 1,200,284 5,531,078 Additions – – 35,478 10,600 46,078 Disposals – (789,581) – – (789,581)

At 30 June 2008 1,224,000 1,334,672 1,018,019 1,210,884 4,787,575

Accumulated depreciationAt 1 July 2007 53,040 1,367,728 613,494 263,150 2,297,412 Charge for the year 24,480 194,558 64,645 96,235 379,918 Disposals – (527,112) – – (527,112)

At 30 June 2008 77,520 1,035,174 678,139 359,385 2,150,218

Net carrying amount 1,146,480 299,498 339,880 851,499 2,637,357

The property, plant and equipment are pledged as securities for borrowings as disclosed in Note 13 to the financial statements.

4. EXPRESSWAY DEVELOPMENT EXPENDITURE (“EDE”)

Group 31.7.2009 30.6.2008 RM RM

CostAt beginning of the period/year 933,271,353 933,797,573 Increase during the period/year – 294,000 Govertment grants received – (820,220)

At end of the period/year 933,271,353 933,271,353

Accumulated amortisation At beginning of the period/year 12,161,497 8,472,502 Amortisation during the period/year (Note 18) 832,995 3,688,995

At end of the period/year 12,994,492 12,161,497

Net carrying amount 920,276,861 921,109,856



5. INVESTMENT IN A SUBSIDIARY

Company 31.7.2009 30.6.2008 RM RM

unquoted shares at cost 160,000,000 160,000,000

Details of the subsidiaries which are incorporated in Malaysia are as follows:

Proportion of Name of Subsidiaries Principal Activities Ownership Interest 31.7.2009 30.6.2008 % %

Held by the Company:

Sistem Lingkaran-Lebuhraya Kajang Highway Concessionaire 100 100 Sdn. Bhd. (“SILK”)

Held through subsidiary:

Manfaat Tetap Sdn Bhd (“MTSB”) Special Purpose Vehicle to facilitate 100 100 the issuance of Sukuk Mudharabah (Note 13)

On 8 October 1997, SILK signed a Concession Agreement with the Government of Malaysia pertaining to the privatisation of the Kajang Traffic Dispersal Ring Road (the “Expressway”). By virtue of the Concession Agreement, SILK is responsible for the construction of the Expressway which involves the upgrading and widening of existing roads, and the design and construction of a new alignment and thereafter its operation, including deriving toll revenue and maintenance, for 33 years.

On 1 August 2001, SILK entered into a Supplemental Concession Agreement with the Government of Malaysia whereby the concession period was extended from 33 years to 36 years.

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

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

The Concession is pledged for a financing facility as disclosed in Note 13.



6. RECEIVABLES

Group Company 31.7.2009 30.6.2008 31.7.2009 30.6.2008 RM RM RM RM

Other receivables 1,056,059 150,000 – – Interest receivable 17,787 118,120 – – Prepayments 154,482 171,705 – –Deposits 5,750 2,770 2,000 2,000

1,234,078 442,595 2,000 2,000

The Group has significant concentration of credit risks in the form of outstanding balances due from 2 debtors (30 June 2008: 1) representing 85% (30 June 2008: 34%) of the total other receivables.

7. SHORT TERM DEPOSITS WITH FINANCIAL INSTITUTIONS

Group 31.7.2009 30.6.2008 % %

Weighted average effective profit/interest rate of deposits at the balance sheet date 3.51% 3.64%

Average maturity of deposits as at the balance sheet date 246 50

8. SHARE CAPITAL

Number of ordinary shares of RM0.50 each Amount

31.7.2009 30.6.2008 31.7.2009 30.6.2008 RM RM

Authorised At beginning and end of the period/year 1,996,000,000 1,996,000,000 998,000,000 998,000,000

Issued and fully paid:At beginning and end of the period/year 180,000,004 180,000,004 90,000,002 90,000,002

The portion of authorised share capital relating to 20% 10-year Cumulative Non-Convertible Redeemable Preference Shares is disclosed in Note 14.

9. SHARE PREMIUM

Share premium arose from a prior year renounceable rights issue and public issue, net of shares issuance cost.



10. BORROWINGS


Non-current liabilitiesSukuk Mudharabah (Note 13) 744,504,918 752,236,660 – – 20% 10-year Cumulative Non-Convertible Redeemable Preference Shares (Note 14) 20,000,000 20,000,000 20,000,000 20,000,000 Hire purchase payable (Note 15) 231,074 – – –

Total borrowings 764,735,992 772,236,660 20,000,000 20,000,000

Current liabilitiesHire purchase payable (Note 15) 55,400 – – – 55,400 – – –

11. PAYABLES


Ijarah rental payable to Sukuk holders 46,988,682 25,885,185 – –Dividend payable 2,294,793 1,861,460 2,294,793 1,861,460 Advance licence fees 7,962,500 7,775,000 – – Advance maintenance fees – – – – Accruals 802,294 343,672 3,338 3,338 Other payables 2,707,706 1,704,207 965,893 104,141 60,755,975 37,569,524 3,264,024 1,968,939

Ijarah rental payable to Sukuk holders relates to the Periodic Ijarah Rental A at 8% per annum payable semi annually under the required payment terms as disclosed in Note 13(b). Non payment of the Ijarah Rental A shall not constitute an event of default of the Sukuk Mudharabah from the Issue Date until the 7th anniversary.

Dividend payable relates to the accumulated dividend accrued in respect of the 20% 10-year Cumulative Non-Convertible Redeemable Preference Shares as disclosed in Note 14.

Advance licence fees relate to fees charged for the transfer of all the rights to the licensees to enter upon and occupy the designated land area for permitted use for the entire duration of the concession period, subject to the terms and conditions specified in the licence agreement (“Agreement”). The licence fees, after setting off associated costs, will be recognised in the income statement over the remaining concession period upon completion of the relevant terms in the Agreement.

All payables are non-interest bearing, repayable on demand, unsecured and are to be settled in cash.



12. AMOUNT DUE TO A SUBSIDIARY

Amount due to a subsidiary is unsecured, interest-free and has no fixed terms of repayment.

13. SUKUK MUDHARABAH

The RM752,236,660 Sukuk Mudharabah was issued by MTSB on 25 January 2008, and is constituted by a Trust Deed dated 25 January 2008 entered into by MTSB, SILK and the Trustee for all the Sukuk holders.

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

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

a) non-transferable;b) not listed;c) not underwritten;d) not rated; ande) non-tradable.

(a) Capital repayment terms under Mudharabah contract

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

The Periodic Ijarah Rental B is:

(i) for the amount of RM2 million per annum; (ii) payable annually in arrears; (iii) payable commencing on the 3rd year from the Issue Date; (iv) RM38 million for the whole period of the Ijarah; (v) not constitute an Event of Default for any non-payment of Periodic Ijarah Rental B from the Issue Date

until the 7th anniversary and continue to accrue notwithstanding the same; and (vi) constitute a default under the Ijarah Agreement for any non-payment of accrued and current Periodic

Ijarah Rental B from the 8th anniversary from the Issue Date.

(b) Profit payment is by way of Periodic Ijarah (“lease”) Rental A as follows:

The Periodic Ijarah Rental A is:

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

Mudharabah (“Minimum Ijarah Rental A”) that is payable commencing from the 1st anniversary from the Issue Date;

(vi) not constitute an Event of Default for non-payment of Minimum Ijarah Rental A from the Issue Date until the 7th anniversary and continue to accrue notwithstanding the same;

(vii) not constitute an Event of Default for non-payment of Periodic Ijarah Rental A throughout the Sukuk Tenure; and

(viii) constitute a default under the Ijarah Agreement for any non-payment of accrued and current Minimum Ijarah Rental A from the 8th anniversary from the Issue Date.



13. SUKUK MUDHARABAH (CONTD)

(c) Securities

The Sukuk Mudharabah is secured by:

(i) fixed and floating charge over all the assets and undertaking of SILK; (ii) fixed and floating charge over all the assets and undertaking of MTSB; (iii) corporate guarantee given by SILK; and (iv) limited guarantee given by the Company.

under the limited guarantee given by the Company:

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

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

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

14. 20% 10-YEAR CUMULATIVE NON-CONVERTIBLE REDEEMABLE PREFERENCE SHARES (“20% 10-YEAR CN-RPS”)

Number of CN-RPS of RM0.10 each Amount

31.7.2009 30.6.2008 31.7.2009 30.6.2008 RM RM

Authorised:At beginning and end of the period/year 20,000,000 20,000,000 2,000,000 2,000,000

Issued and fully paid: At beginning and end of the period/year 20,000,000 20,000,000 2,000,000 2,000,000

31.7.2009 30.6.2008 RM RM

Nominal value of RM0.10 each 2,000,000 2,000,000 Share premium (Note 9) 18,000,000 18,000,000

20,000,000 20,000,000



14. 20% 10-YEAR CUMULATIVE NON-CONVERTIBLE REDEEMABLE PREFERENCE SHARES (“20% 10-YEAR CN-RPS”) (CONTD)

The salient terms of the 20% 10-year CN-RPS are as follows:

(a) the 20% 10-year CN-RPS shall be redeemable at the option of the Company for cash at RM1 per share at any time from the date commencing from the 5th anniversary of the issue date of 6 November 2003;

(b) the 20% 10 year CN-RPS are transferable and are not convertible:

(c) the 20% 10-year CN-RPS shall rank in priority to the ordinary shares of the Company in a return of capital in the event of winding-up/liquidation of the Company and payment of dividends. The 20% 10-year CN-RPS shall not have any right to participate further in the distribution of the surplus in assets and profits of the Company; and

(d) The holders of 20% 10-year CN-RPS shall be entitled to vote at any general meeting of the Company at which a resolution is relating to:

(i) the capital reduction of the Company; (ii) winding-up of the Company; (iii) any abrogation or variation of the special rights and privileges attached to the 20% 10-year CN-RPS;

and (iv) the creation or issue of any further shares ranking in priority to or pari passu with the 20% 10-year CN-

RPS (unless consented in writing by 75% of the 20% 10-year CN-RPS holders).

15. HIRE PURCHASE PAYABLE

Group 31.7.2009 30.6.2008 RM RM

Future minimum hire purchase payments:Not later than 1 year 66,696 – Later than 1 year and not later than 2 years 66,696 –Later than 2 years and not later than 5 years 183,384 –

Total minimum future hire purchase payments 316,776 – Less: Future finance charges (30,302) –

Present value of hire purchase liabilities 286,474 –

Analysis of present value of hire purchase liabilities:Not later than 1 year 55,400 –Later than 1 year and not later than 2 years 58,032 –Later than 2 years and not later than 5 years 173,042 –

286,474 –Amount due within 12 months (55,400) –

Amount due after 12 months 231,074 –

The hire purchase liabilities bore interest at the balance sheet date at 2.23% per annum.



16. REVENUE

Group Company 1.7.2008 1.7.2007 1.7.2008 1.7.2007 to to to to 31.7.2009 30.6.2008 31.7.2009 30.6.2008 RM RM RM RM

Toll collections 40,925,654 33,121,594 – –Management fees – – 770,582 – 40,925,654 33,121,594 770,582 –

17. FINANCE COSTS


Finance costs on: Sukuk Mudharabah 65,120,328 25,885,185 – – 20% 10-year CN-RPS 433,333 400,000 433,333 400,000 Hire purchase 3,148 – – – BaIDS – 56,126,145 – –

65,556,809 82,411,330 433,333 400,000

18. (LOSS)/PROFIT BEFORE TAX

The following amounts have been included in arriving at (loss)/profit before tax:


Auditors’ remuneration: Statutory audit - current year 85,000 50,000 35,000 15,000 - underprovision in prior year 11,856 – 7,000 –Other services 518,000 66,500 413,000 – Depreciation of property, plant and equipment (Note 3) 421,569 379,918 – –Employee benefits expense (Note a) 5,448,724 4,711,300 – – Directors’ remuneration (Note b) 698,119 448,017 178,000 422,817 Amortisation of Expressway Development Expenditure (Note 4) 832,995 3,688,995 – –Gain on disposal of property, plant and equipment (5,800) (84,531) – – Interest income (776,585) (2,623,439) – – Rental income (30,055) (16,040) – –Intangible asset written off – 17,500 – –



18. (LOSS)/PROFIT BEFORE TAX (CONTD)

Note


(a) Employee benefits expense

Wages and salaries 4,424,632 3,713,446 – –Defined contribution plans 413,990 405,948 – – Provision / (reversal) for unutilised leave 68,676 (43,824) – –Other staff related costs 541,426 635,730 – –

5,448,724 4,711,300 – –

(b) Directors’ remuneration

Executive director’s remuneration: Other emoluments 502,119 387,017 – 361,817

Non-executive directors’ remuneration: Fees 138,000 36,000 120,000 36,000 Other emoluments 58,000 25,000 58,000 25,000

196,000 61,000 178,000 61,000

Total directors’ remuneration (Note 21(b)) 698,119 448,017 178,000 422,817 Estimated money value of benefits-in-kind 1,200 1,770 – 1,770

Total directors’ remuneration including benefits-in-kind 699,319 449,787 178,000 424,587



18. (LOSS)/PROFIT BEFORE TAX (CONTD)

(b) Directors’ remuneration (contd)

The details of remuneration receivable by directors of the Company during the financial period/year are as follows:


Executive: Salaries and other emoluments 421,000 308,045 – 285,545 Bonus: - current year’s provisions 27,261 37,500 – 37,500 Defined contribution plans 53,858 41,472 – 38,772 Estimated money value of benefits-in-kind 1,200 1,770 – 1,770

503,319 388,787 – 363,587

Non-Executive: Fees 138,000 36,000 120,000 36,000 Other emoluments 58,000 25,000 58,000 25,000

699,319 449,787 178,000 424,587

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

Number of Directors 1.7.2008 1.7.2007 to to 31.7.2009 30.6.2008

Executive directors:Below RM50,000 – 2 RM200,001 - RM300,000 2 –RM300,001 - RM400,000 – 1

Non-executive directors: Below RM50,000 8 3



19. INCOME TAX EXPENSE


Current income tax:

Malaysian income tax 121,633 13,392 121,633 13,392 Overprovision in prior year (26,784) – (26,784) –

94,849 13,392 94,849 13,392

Domestic current income tax is calculated at the statutory tax rate of 25% (2008: 26%) of the estimated assessable profit for the period/year.

The reconciliations of income tax expense applicable to (loss)/profit before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company are as follows:

1.7.2008 1.7.2007 to to 31.7.2009 30.6.2008 RM RM (Restated)

Group

(Loss)/profit before tax (37,323,083) 178,029,010

Taxation at Malaysian statutory tax rate of 25% (2008: 26% ) (9,330,771) 46,287,543 Expenses not deductible for tax purposes 759,863 696,400 Income not subject to tax (1,278,356) (40,512,172)Deferred tax assets not recognised 9,970,897 –Deferred tax assets recognised on unused tax losses brought forward not recognised in prior year – (6,458,379)Overprovision of tax expense in prior years (26,784) –

Income tax expense for the period/year 94,849 13,392

Company

Loss before tax (1,612,655) (1,264,171)

Taxation at Malaysian statutory tax rate of 25% (2008:26% ) (403,164) (328,684)Expenses not deductible for tax purposes 524,797 342,076 Overprovision of tax expense in prior years (26,784) –

Income tax expense for the period/year 94,849 13,392



19. INCOME TAX EXPENSE (CONTD)

The deferred tax movements of the Group are as follows:

Group 31.7.2009 30.6.2008 RM RM

Deferred tax liabilities 153,034,270 145,771,497 Deferred tax assets (153,034,270) (145,771,497)

– –

Deferred tax liabilities of the Group:

Property Expressway plant and development equipment expenditure Total RM RM RM

At 1 July 2008 85,064 145,686,433 145,771,497 Recognised in income statement (25,095) 7,287,868 7,262,773

At 31 July 2009 59,969 152,974,301 153,034,270

At 1 July 2007 (5,460) 144,499,830 144,494,370 Recognised in income statement 90,524 1,186,603 1,277,127

At 30 June 2008 85,064 145,686,433 145,771,497

Deferred tax assets of the Group:

Unutilised business losses Advance and unabsorbed license capital fees Provision allowances Total RM RM RM RM

At 1 July 2008 (1,943,750) (14,777) (143,812,970) (145,771,497)Recognised in income statement (46,875) (15,065) (7,200,833) (7,262,773)

At 31 July 2009 (1,990,625) (29,842) (151,013,803) (153,034,270)

At 1 July 2007 (1,794,000) (23,512) (142,879,690) (144,697,202)Recognised in income statement (149,750) 8,735 (933,280) (1,074,295)

At 30 June 2008 (1,943,750) (14,777) (143,812,970) (145,771,497)



19. INCOME TAX EXPENSE (CONTD)

Deferred tax assets have not been recognised in respect of the following item:

Group 31.7.2009 30.6.2008 RM RM (Restated)

unused tax losses 319,804,456 279,920,872

The availability of unused tax losses and unabsorbed capital allowances for offsetting against future taxable profits of the subsidiary is subject to no substantial changes in shareholdings of the subsidiary under the Income Tax Act, 1967 and guidelines issued by the tax authority.

20. (LOSS)/EARNINGS PER SHARE

(a) Basic (loss)/earnings per share

Basic (loss)/earnings per share is calculated by dividing the (loss)/profit for the financial period/year by the weighted average number of ordinary shares in issue during the financial period/year.

Group 1.7.2008 1.7.2007 to to 31.7.2009 30.6.2008

(Loss)/profit for the financial period/year (RM) (37,417,932) 178,015,618 Weighted average number of ordinary shares in issue 180,000,004 180,000,004 Basic (loss)/earnings per share (sen) (20.8) 98.9

(b) Diluted (loss)/earnings per share

For the calculation of diluted earnings/(loss) per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The Warrants 2003/2008 which could potentially be converted into ordinary shares had expired during the period.



21. SIGNIFICANT RELATED PARTY TRANSACTIONS

(a) In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the following significant transactions with related parties during the financial period/year:

1.7.2008 1.7.2007 to toName of companies Nature of transactions 31.7.2009 30.6.2008 RM RM

GroupDekon Sdn Bhd General maintenance and Group (Note i) landscaping 2,119,000 1,956,000

Sunway Holdings Insurance premium – 259,668 Berhad (Note ii) Management and accounting – 134,532 services Corporate advisory services – 450,000

Sunway City Hotel and related services – 27 Berhad Group Medical services – 4,270 (Note ii) Recreational services – – Ticketing and tour – 1,304

Adasia (M) Sdn Advertising services – 74,265 Bhd (Note iii)

CompanySistem Lingkaran- Management fees (770,582) – Lebuhraya Kajang Payment on behalf by SILK (1,061,250) (505,398) Sdn. Bhd.

Sunway City Ticketing and tour – 1,304 Berhad Group (Note ii)

Adasia (M) Sdn Advertising services – 3,200 Bhd (Note iii)

(a) (i) Dekon Sdn Bhd (“DSB”) is deemed related to the Group by virtue of Datuk Razman M Hashim’s mutual interest and directorship in DSB and the Group.

(ii) Sunway Holdings Berhad Group and Sunway City Berhad Group were deemed related to the Group prior to 8 April 2008 by virtue of Tan Sri Dato’ Seri Dr Cheah Fook Ling’s mutual interests and directorships in the above companies and the Group. Sunway was a significant shareholder of the Company prior to 8 April 2008 and is also the holding company of Sunway Construction Sdn Bhd (“SCSB”).

(iii) Adasia (M) Sdn Bhd (“Adasia”) was deemed related to the Group prior to 8 April 2008 by virtue of Tan Sri Dato’ Seri Dr Cheah Fook Ling’s deemed interest in Adasia and interest in the Group.

The directors of the Company are of the opinion that the above transactions have been entered into in the normal course of business and have been established under negotiated terms. The balances with related parties at the balance sheet date have been disclosed in Notes 6 and 11.



21. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONTD)

(b) Compensation of key management personnel

The remuneration of directors and other members of key management during the period/year was as follows:


Wages and salaries 591,575 717,536 – 321,545 Bonus 42,220 148,100 – 37,500 Defined contribution plan 76,178 98,360 – 38,772 Other benefits 197,200 54,904 178,000 25,000

907,173 1,018,900 178,000 422,817

Included in the total key management personnel are:


Directors’ remuneration (Note 18(b)) 698,119 448,017 178,000 422,817

22. MATERIAL LITIGATIONS

Following the compulsory acquisition of land falling under the Expressway, which was undertaken by the Company pursuant to the Concession Agreement, certain land owners whose land have been acquired, have filed their objection in Court against the Company for higher compensation. In the Company funded stretch, there are 230 cases comprising 200 cases with claims amounting to RM479.54 million while the land owners’ claim for 30 cases are yet to be determined. Out of the 230 cases, 103 cases have been settled out of court while other cases are still pending Court hearing.

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

23. SEGMENTAL REPORTING

There is no disclosure of Segmental Information as required by FRS 8: Operating Segments, as the Group is principally involved in tolling operations conducted predominantly in Malaysia.



24. SIGNIFICANT EVENTS

(a) Gain on sale of shares pledged by a former guarantor of BaIDS

On 24 January 2008, Sunway Holdings Berhad transferred 65,090,802 ordinary shares in the Company (“SILK Shares”) to Affin Investment Bank Berhad (“AIBB”), being the Security Agent of the RM752,236,660 Sukuk Mudharabah. The shares transferred constituted 36.16% of the total issued and paid up capital of the Company, free from all claims, charges, lien, encumbrances and equity to AIBB to be held in trust of the holders of the Sukuk Mudharabah.

Following the sale of the SILK Shares to Infra Bumitek Sdn Bhd on 27 February 2008, the proceeds amounting to RM11,065,436 was subsequently disbursed to the holders of the Sukuk Mudharabah. Of the total disbursement, an amount of RM3,136,256 was applied by a holder of the Sukuk Mudharabah to reduce the balance of Sukuk Mudharabah during the financial period, while the remainder was treated for other benefits of the holders of the Sukuk Mudharabah.

(b) Warrants 2003/2008

The 30,000,000 warrants were issued by the Company on 11 December 2003 and were constituted by a Deed Poll dated 25 August 2003. The warrants entitled the holders to subscribe for one (1) new ordinary share of the Company for every one (1) Warrant 2003/2008 held at an exercise price of RM1.50.

During the financial period, no warrants were converted to ordinary shares. There were 30,000,000 outstanding warrants as at the date of expiration, 10 December 2008. The expired warrants were subsequently removed from the Official List of Bursa Securities on 11 December 2008.

(c) Proposed Regularisation Scheme

On 12 December 2008, the Company submitted the application to the Securities Commission (“SC”) for its approval for the Proposed Regularisation Scheme comprising the following proposed transactions (collectively known as “the Proposals”):

(i) proposed renounceable rights issue of up to RM10 million nominal value 3.00% Redeemable Convertible unsecured Loan Stocks-A (“RCuLS-A”) at 100% of its nominal value of RM1.00 each on the basis of one (1) RCuLS-A for every eighteen (18) existing ordinary shares of RM0.50 each in the Company held prior to the Proposed Par Value Reduction to be undertaken based on a Minimum Subscription level;

(ii) proposed reduction in the existing issued and paid up share capital of the Company via cancellation of RM0.25 of the par value of each existing shares of the Company (“Proposed Par Value Reduction”);

(iii) proposed acquisition of 4,706,000 ordinary shares of RM1.00 each representing the entire equity interests

in AQL Aman Sdn Bhd (“AQL”) for a purchase consideration of RM87.5 million to be satisfied by the issuance of;-

• 175 million new ordinary shares of RM0.25 each in the Company after the Proposed Par Value Reduction, and

• RM43.75 million nominal value 3.00% Redeemable Convertible unsecured Loan Stocks-B (“RCuLS-

B”) of RM1.00 each, and in addition,

the assumption of liabilities owing by Jasa Merin Employee Trust to Jasa Merin (Malaysia) Sdn Bhd, a 70%-owned subsidiary of AQL amounting to RM6,530,500 (“Proposed Acquisition”), and

(iv) proposed issuance of up to approximately RM7.024 million nominal value 3.00% Redeemable Convertible

unsecured Loan Stocks-CR (“RCuLS-CR”) of RM1.00 each to satisfy the coupon payment of the RCuLS-B and RCuLS-CR already in issue (“Proposed Issuance of RCuLS-CR”).



24. SIGNIFICANT EVENTS (CONTD)

(c) Proposed Regularisation Scheme (contd)

As at the end of the financial period, the Company has obtained the following approvals from:

(i) BNM for the issuance of RCuLS-A to non-residents of Malaysia pursuant to the Proposed Rights Issue, the approval of which was obtained vide its letter dated 24 February 2009;

(ii) SC for the proposed Regularisation Scheme pursuant to the FIC Guidelines, of which SC has stated that it has no objection on SHB’s application vide its letter dated 30 March 2009;

(iii) SC for the Proposed Regularisation Scheme, the approval of which was obtained vide its letter dated 30 March 2009;

(iv) the ordinary shareholders for the Proposed Regularisation Scheme, the approval of which was obtained during the adjourned Extraordinary General Meeting on 20 July 2009;

(v) holders of the 20,000,000 20% 10-year Cumulative Non-Convertible Redeemable Preference Shares of RM0.10 each for the Proposed Par Value Reduction, the approval of which was obtained during the adjourned Extraordinary General Meeting on 20 July 2009; and

(vi) SC for the Proposed Exemptions to En. Johan Zainuddin bin Dzulkifli, Tuan Haji Abdul Rahman bin Ali and persons acting in-concert with them vide its letter dated 29 July 2009.

In view of the interest of a major shareholder and directors of the Company in the Proposed Acquisition, the Proposed Acquisition is deemed a related party transaction pursuant to paragraph 10.08 of the Listing Requirements of Bursa Securities.

25. SUBSEqUENT EVENT

Proposed Regularisation Scheme

(a) Bursa Malaysia Securities Berhad had, vide its letters dated 26 August 2009, approved in-principle the following:

(i) the admission to the Official List and the listing of and quotation for up to RM10,000,000 nominal value RCuLS-A to be issued pursuant to the Proposed Rights Issue;

(ii) the listing of up to 40,000,001 new ordinary shares of RM0.50 each in SHB (for conversion prior to the

Proposed Par Value Reduction) or RM0.25 each (for conversion after the Proposed Par Value Reduction) to be issued upon the conversion of the RCuLS-A;

(iii) the listing of 175,000,000 new ordinary shares of RM0.25 each in SHB to be issued pursuant to the

Proposed Acquisition; and (iv) the listing of up to 203,094,644 new ordinary shares of RM0.25 each in SHB to be issued upon the

conversion of the RCuLS-B and RCuLS (CR).

(b) On 14 September 2009, the Company issued the Abridged Prospectus to the eligible shareholders in relation to the Proposed Rights Issue.

The Company is expected to complete the Proposed Regularisation Scheme by end of 2009 after completion of the issuance of RCuLS-A, and the Proposed Acquisition.



26. FINANCIAL INSTRUMENTS

(a) Financial risk management objectives and policies

The Group’s financial risk management policy seek to ensure that adequate financial resources are available for the development of the Group’s business whilst managing its interest rate risks (both fair value and cash flow), foreign currency risk, liquidity risk and credit risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below. It is, and has been throughout the period under review, the Group’s policy that no trading in derivative financial instruments shall be undertaken.

(b) Interest rate risk

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. The Group’s significant interest-bearing financial assets are mainly short term in nature and have been mostly placed in fixed deposits.

The Group’s external financing comprises primarily the Sukuk Mudharabah, CN-RPS and hire purchase.

The Group’s interest rate risk arises primarily from interest-bearing borrowings that are obtained for construction of the Expressway. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk.

The information relating to the effective interest rate, maturity dates and profit element of short term deposits, Sukuk Mudharabah, 20% 10-year CN-RPS and hire purchase are as disclosed in their respective notes.

(c) Foreign currency risk

There were no foreign currency financing facilities obtained by the Group and the Company for the financial period ended 31 July 2009 and there is no anticipation of foreign currency risk exposure for future transactions.

(d) Credit risk

The carrying amount of receivables, including related company receivables, represents the Group’s and the Company’s maximum exposure to credit risk.

The information pertaining to the concentration of credit risk related to the financial instruments is disclosed in Note 6.

(e) Liquidity risk

The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to maintain a balance between meeting debt service obligations and covenants, Expressway capital and operating expenditure, and meeting shareholder distribution expectations.

(f) Fair values

The fair value of the Sukuk Mudharabah is estimated by discounting the expected future cash flows using the indicative market rates available for the instrument.

The fair value of hire purchase payable (non-current) has been determined using discounted estimated cash flows. The discount rate used is the current market incremental lending rates for similar types of hire purchase arrangements.

It is not practical to estimate the fair value of the CN-RPS due to lack of available market information in respect of similar financing arrangements and inability to estimate without incurring excessive costs.



26. FINANCIAL INSTRUMENTS (CONTD)

(f) Fair values (contd)

It is not practical to estimate the fair value of amounts due to a subsidiary due principally to no fixed repayment terms entered into by the parties involved and without incurring excessive costs. However, the Company does not anticipate the carrying amount recorded at balance sheet date to be significantly different from the value that would eventually be settled.

The carrying amounts of financial assets and liabilities of the Group and of the Company at the balance sheet date approximated their fair values except for the following:

Group Carrying Fair amount value Note RM RM

At 31 July 2009Non-current liabilities:Sukuk Mudharabah 10 744,504,918 1,203,578,571 Hire purchase payable 10 231,074 231,074

At 30 June 2008Non-current liability: Sukuk Mudharabah 10 752,236,660 752,236,660

The Group’s covenanted obligation is at carrying value and not fair value. 27. COMPARATIVES

The current period’s financial statements covered a period of 13 months as the year end of the Group was changed from 30 June to 31 July. Accordingly, comparative amounts for the income statement, statement of changes in equity, cash flow statement and the related notes are not in respect of comparable periods.


The information set out below is disclosed in compliance with the Main Market Listing Requirements of Bursa Securities :-

1. STATUS OF UTILISATION OF PROCEEDS RAISED FROM CORPORATE PROPOSAL

On 12 December 2008, the Company submitted the application to the Securities Commission for its approval for the Proposed Regularisation Scheme which comprises of:

I. Proposed renounceable rights issue of up to RM10.0 million nominal value 3.00% Redeemable Convertible

unsecured Loan Stocks (“RCuLS-A”) at 100% of its nominal value of RM1.00 each on the basis of one (1) RCuLS-A for every eighteen (18) existing ordinary shares of RM0.50 each in SILK Holdings Berhad (“SHB” and “SHB shares”) held prior to the proposed par value reduction to be undertaken based on a minimum subscription level;

II. Proposed reduction in the existing issued and paid-up share capital of SHB via the cancellation of RM0.25 of the par value of each existing SHB shares; and

III. Proposed acquisition of 4,706,000 ordinary shares of RM1.00 each representing the entire equity interest in AQL Aman Sdn Bhd (“AQL”) for a purchase consideration of RM87.5 million to be satisfied by the issuance of 175 million new ordinary shares of RM0.25 each in SHB after the Proposed Par Value Reduction (“consideration shares”) and RM43.75 million nominal value Redeemable Convertible unsecured Loan Stocks-B (“RCuLS-B”) of RM1.00 each and assumption of liabilities owing by Jasa Merin Employee Trust to Jasa Merin Sdn Bhd, a 70% subsidiary of AQL amounting to RM6,530,500;

The Proposed Regularisation Scheme has not been completed as at the end of the current financial period as further mentioned in Note 25 to the financial statements in this Annual Report.

The Group’s shareholders at its reconvened Extraordinary General Meeting on 20 July 2009 approved the Regularisation Scheme. The High Court has also approved SILK’s proposed Par Value Reduction exercise on 28 August 2009. SILK is currently in the midst of implementing the various aspects of the Regularisation Scheme and expects this to be completed by the fourth quater of 2009.

Besides the above, the Company did not undertake any corporate proposal to raise proceeds during the financial period ended 31 July 2009.

2. SHARE BUY-BACK

The Company does not have a scheme to buy-back its own shares.

3. OPTIONS OVER ORDINARY SHARES, WARRANTS OR CONVERTIBLE SECURITIES EXERCISED

There was no exercise of warrants during the financial period ended 31 July 2009. Apart from the warrants, the Company did not grant any options over ordinary shares or issue any convertible securities.

During the financial period, the 30,000,000 Warrants 2003/2008 expired on 10 December 2008. The expired Warrants were subsequently removed from the Official List of Bursa Securities on 11 December 2008.

4. AMERICAN DEPOSITORY RECEIPT (“ADR”) OR GLOBAL DEPOSITORY RECEIPT (“GDR”) PROGRAMME

The Company did not sponsor any ADR or GDR programme during the financial period ended 31 July 2009.

5. SANCTIONS AND/OR PENALTIES

There were no public sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the financial period ended 31 July 2009.

Additional Compliance Information


6. NON-AUDIT FEES

The non-audit fees paid/payable to the external auditors of the Company and its subsidiaries for the financial period ended 31 July 2009 amounted to RM518,000.

7. VARIATION IN RESULTS

On 8 April 2009, the Company issued a profit forecast for the 13 months period ended 31 July 2009 via the issuance of Circular to Shareholders in relation to the Proposed Regularisation Scheme.

The consolidated profit after taxation and minority interests of RM9.582 million was based on the assumption that the Proposed Regularisation Scheme is completed in May 2009. However, since the completion of the Proposed Regularisation Scheme is delayed to the next financial year, the Group has recorded loss after taxation of RM37.4 million for the current financial period.

8. PROFIT GUARANTEE

There was no profit guarantee given by the Company during the financial period ended 31 July 2009.

9. MATERIAL CONTRACTS INVOLVING DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

The Company had on 24 November 2008 entered into a conditional sale and purchase agreement for shares (“SPA”) with Hj. Abdul Rahman Ali, Bijak Permai Sdn Bhd, Johan Zainuddin Dzulkifli, Jasa Merin Employee Trust (“JMET”) and Temuras Jaya Sdn Bhd to acquire 4,706,000 ordinary shares of RM1.00 each (“AQL Shares”) representing the entire equity interest in AQL for a purchase consideration of RM87.5 million to be satisfied by the issuance of 175 million Consideration Shares and RM43.75 million nominal value RCuLS-B of RM1.00 each, and assumption of liabilities owing by JMET to Jasa Merin Sdn Bhd (“Jasa Merin”), a 70%-owned subsidiary of AQL amounting to RM6,530,500 as mentioned in note 1 above.

Encik Johan Zainuddin Dzulkifli is deemed interested by virtue of his 36.16% indirect shareholding in the Company and his membership in the Company’s Board of Directors.

Besides the above, there were no material contracts (not being contracts entered into in the ordinary course of business) entered into by the Company and/or its subsidiaries involving directors’ and major shareholders’ interests during the financial period ended 31 July 2009.

10. REVALUATION POLICY ON LANDED PROPERTIES

The Company does not own any properties and hence, does not have a revaluation policy on landed properties.

11. STATEMENT BY AUDIT COMMITTEE IN RELATION TO THE ALLOCATION OF OPTIONS OVER ORDINARY SHARES PURSUANT TO THE EMPLOYEES’ SHARE OPTION SCHEME

The Company does not have an Employees’ Share Option Scheme.

12. RECURRENT RELATED PARTY TRANSACTIONS Pursuant to Chapter 10, Paragraph 10.09 of the Main Market Listing Requirements of Bursa Securities, the Recurrent

Related Party Transaction of a revenue or trading nature of the Group with value equals to or exceeding RM1 million, conducted pursuant to the Shareholders’ Mandate during the financial period ended 31 July 2009 is set out in Note 21 to the financial statements in this Annual Report.

Additional Compliance Information (cont’d)


ORDINARY SHARES

Name of Shareholders No. of Shares %

1. Dato’ Mohammed Azlan bin Hashim (#a) 65,090,802 36.16

2. Johan Zainuddin bin Dzulkifli (#a) 65,090,802 36.16

3. Infra Bumitek Sdn. Bhd. 65,090,802 36.16

4. Tey Chee Thong 16,831,901 9.35

NOTES:

#a Deemed interest through Infra Bumitek Sdn. Bhd.

Substantial Shareholders As At 30 September 2009


Directors’ Interests In Shares and Cumulative Non-Convertible Redeemable Preference Shares (“CN-RPS”)As At 30 September 2009

Ordinary Shares of RM0.50 each No. %

Direct Interest

Dato’ Ir Hj Ibrahim Bin Hj Yakub 79,000 0.04

Dato’ Seri Syed Zainol Rashid Jamalullail 75,000 0.04

Deemed Interest

Dato’ Mohammed Azlan bin Hashim (a) 65,090,802 36.16

Johan Zainuddin bin Dzulkifli (a) 65,090,802 36.16

CN-RPS of RM0.10 each No. %

Deemed Interest

Datuk Razman Md Hashim bin Che Din Md Hashim (b) 4,503,333 22.52

Notes

(a) Deemed interest through Infra Bumitek Sdn. Bhd.

(b) Deemed interest through Petroforce (M) Sdn. Bhd


Analysis of Shareholdings As At 30 September 2009

20% Cumulative Non-convertible Redeemable Ordinary Shares Preference Shares Total (“CN-RPS”) RM

Authorised Share Capital 1,996,000,000 20,000,000 1,000,000,000Issued and Paid-up Share Capital 180,000,004 20,000,000 90,00,002 Ordinary Shares of CN-RPS ofClass of Shares RM0.50 each RM0.10 each –Voting Rights One vote per * One vote per ordinary share CN-RPS –

* Each holder of CN-RPS shall have one vote per CN-RPS only if the business of the general meeting includes the reduction of capital of the Company, the winding up of the Company, any abrogation or variation of the special rights and privileges attached to the CN-RPS and the creation or issue of any further shares ranking in priority to or pari passu with the CN-RPS but shall otherwise have no right to vote at general meetings of the Company.

(A) ORDINARY SHARES

DISTRIBUTION OF SHAREHOLDINGS

No. of % of No. of % ofSize of Shareholdings Shareholders Shareholders Shares Held Shareholdings

1 - 99 13 0.73 411 0.00100 - 1,000 683 38.48 615,300 0.341,001 - 10,000 539 30.37 2,789,200 1.5510,001 - 100,000 415 23.38 16,944,190 9.41100,001 - 8,999,999 (Less than 5% of issued shares) 123 6.93 77,728,200 43.189,000,000 (5%) and above 2 0.11 81,922,703 45.51 1,775 100.00 180,000,004 100.00

THIRTY LARGEST SHAREHOLDERS AS PER RECORD OF DEPOSITORS

Name of Shareholders Name of Beneficial Owners No. of Shares %

1 ABB Nominee (Tempatan) Sdn Bhd Infra Bumitek Sdn Bhd 65,090,802 36.162 Tey Chee Thong 16,831,901 9.353 Lee Kuan Chen 7,312,200 4.064 HDM Nominees (Asing) Sdn Bhd Exempt AN for uOB 5,000,000 2.78 Kay Hian Pte. Ltd. 5 CIMSEC Nominees (Tempatan) Sdn Bhd Mohammed Amin bin Mahmud 3,292,100 1.836 MIDF Amanah Investment Nominees Intan Ainirawati binti Abdul Razak 2,540,000 1.41 (Tempatan) Sdn Bhd7 Teh Beng Boon 2,500,000 1.398 CIMSEC Nominees (Tempatan) Sdn Bhd Caroline Ann Teoh 2,500,000 1.399 Citigroup Nominees (Tempatan) Sdn Bhd Lai Siew Wah 2,500,000 1.3910 Public Nominees (Tempatan) Sdn Bhd Wong Choo Mok 2,365,000 1.3111 Yeo Kian 2,172,000 1.2112 Yeo Kian 2,006,000 1.1113 Lee Chee Wai 1,825,000 1.0114 Nor Ashikin binti Khamis 1,765,900 0.9815 Ooi Lee Peng 1,532,000 0.85

SILK HOLDINGS BERHADANNuAL REpORt 200978

Analysis of Shareholdings As At 30 September 2009

THIRTY LARGEST SHAREHOLDERS AS PER RECORD OF DEPOSITORS (COnTD)

name of Shareholders name of Beneficial Owners no. of Shares % 16 Abdul Aziz bin Abdul Kadir 1,493,100 0.8317 HSBC Nominees (tempatan) Sdn Bhd Amanah Saham Sarawak 1,388,300 0.7718 How Wong Yuh 1,104,000 0.6119 tan Kia Loke 1,075,000 0.6020 CIMSEC Nominees (tempatan) Sdn Bhd Lee Chee Wai 1,005,000 0.5621 CIMSEC Nominees (tempatan) Sdn Bhd tan Kia Loke 1,000,000 0.5622 Gnanalingam A/L Gunanathlingam 1,000,000 0.5623 Liew Ah Yong 1,000,000 0.5624 MIDF Amanah Investment Nominees Hairizar bin Hakimi 892,000 0.50 (tempatan) Sdn Bhd25 Mayban Securities Nominees (tempatan) Liew thin Sang 873,000 0.48 Sdn Bhd26 Seah tin Kim 858,000 0.4827 Sharom bin Abdul Majid 841,000 0.4728 Liew tian Kooi 800,000 0.4429 tan Nam King 714,600 0.4030 Lim Sin Shen 701,000 0.39

SUBSTAnTIAL SHAREHOLDERS

name of Shareholders no. of Shares %

Dato’ Mohammed Azlan bin Hashim (#a) 65,090,802 36.16Johan Zainuddin bin Dzulkifli (#a) 65,090,802 36.16Infra Bumitek Sdn. Bhd. 65,090,802 36.16tey Chee thong 16,831,901 9.35

nOTES:

#a Deemed interest through Infra Bumitek Sdn. Bhd.

(B) 20% CUMULATIVE nOn-COnVERTIBLE REDEEMABLE PREFEREnCE SHARES

name of Shareholders no. of Shares %

Sunway Holdings Berhad 8,830,000 44.15petroforce (M) Sdn Bhd 4,503,333 22.52Lee Muk Siong 2,028,320 10.14Lew Mew Choi 1,800,000 9.00Hairizar bin Hakimi 1,766,667 8.83Liew Meow Nyean 1,071,680 5.36

20,000,000 100.00

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SILK Holdings Berhad - Malaysiastock.biz SILK Holdings Berhad ... and Chairman of Proton Holdings Berhad. ... Malaysia Berhad) as Senior Manager Corporate planning,