QCHBAR2021.pdf - Quality Concrete Holdings Bhd

Contents

02Corporate Information

09Directors’ Profile

176Analysis of Shareholdings

Online VersionThe online version of 2021 Annual Report can be viewed at http://www.qchb.com.my

24Statement on Risk Management and Internal Control

03Group’s Financial Highlights

11Profile of Key Management

178List of Properties

27Sustainability Statement

04Corporate Structure

12Audit Committee Report

179Notice of Annual General Meeting

37Directors’ Report and Audited Financial Statements

05Group Executive Chairman’s Statement and Management Discussion & Analysis

16Statement on Corporate Governance

Form of Proxy

2 QUALITY CONCRETE HOLDINGS BERHAD Annual Report 2021

CORPORATE & REGISTERED OFFICE

Room 209, 2nd Floor, Wisma Bukit Mata Kuching, Jalan Tunku Abdul Rahman, 93100 Kuching, Sarawak.Tel : +6 082-206 600 Fax : +6 082-206 607Email : [email protected]

BOARD OF DIRECTORS

Tiang Ching Kok (Executive Chairman)Paul Chiam Tau Keen (Executive Director)Felix Wong Khung Chui (Independent Non-Executive Director)Lynda Chong Hui Lyn (Independent Non-Executive Director)Ha Tiuen Kiong (Independent Non-Executive Director)Pang Kim Soo (Independent Non-Executive Director)

COMPANY SECRETARIES

Yeo Puay Huang [SSM PC No. 202008000727 (LS0000577)]Paul Chiam Tau Keen [SSM PC No.202008002707 (MIA14900)]

SHARE REGISTRAR

Securities Services (Holdings) Sdn. Bhd.Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala LumpurTel : +6 03-2084 9000Fax : +6 03-2094 9940

AUDITORS

Ernst & Young PLT Chartered Accountants(202006000003 (LLP0022760-LCA) & AF0039)

3rd Floor, Wisma Bukit Mata Kuching, Jalan Tunku Abdul Rahman, 93100 Kuching, Sarawak.Tel : +6 082-752 668 Fax : +6 082-421 287

Corporate Information

PRINCIPAL BANKERS

AmBank (M) BerhadBank Muamalat Malaysia BerhadBank of China (M) BerhadCIMB Bank BerhadHong Leong Bank BerhadMalayan Banking BerhadPublic Bank BerhadUnited Overseas Bank (Malaysia) Berhad

STOCK EXCHANGE LISTING

Main MarketBursa Malaysia Securities BerhadStock Code: 7544Stock Name: QUALITY

3QUALITY CONCRETE HOLDINGS BERHAD Annual Report 2021

Group’s Financial Highlights


QUALITY CONCRETE HOLDINGS BERHAD[199601005936 (378282-D)] Incorporated in Malaysia

70%QUALITY CONCRETE (MUKAH) SDN. BHD.[200201002659 (570322-P)]

Dormant.100%

QUALITY CONCRETE SDN. BHD.[198201012234 (091959-D)]

Manufacturing and trading of ready-mixed concrete, concrete products and goods.

70%QC WORKS & ROAD MAINTENANCE SDN. BHD.[201501020297 (1145633-H)]

Road Maintenance.

70%QCCE AND ASAS ULUNG JV SDN. BHD.[201901029604 (1338933-T)]

Road Maintenance.

70%JURUBINA CERGAS BSB SDN. BHD. [202001025979 (1382299-X)]

Construction & Engineering Works.

100%QC CONSTRUCTION & ENGINEERING SDN. BHD. [201101010175 (938314-K)]

Civil & Structural Construction.

30%MULTI BRILLIANCE RESOURCES SDN. BHD.[201501044915 (1170236-A)]

Marketing of Multi Layer PVC Pipe.100%

KUTEX SDN. BHD.[197201000177 (12880-T)]

Investment Holding.

100%POLYFLOW PIPES SDN. BHD.[199001005833 (197401-H)]

Manufacturing and trading of polyethylene pipes and fittings.

100%LEE LING TIMBER PRODUCTS SDN. BHD. [198901010350 (187652-K)]

Sawmilling and manufacturing of downstream timber products.

100%HONG WEI HOLDINGS SDN. BHD. [198201010291 (90015-K)]

Property development and construction.

60%AUDASA PHARMA SDN. BHD.[202001011343 (1367663-V)]

Manufacturing of pharmaceutical/ medical products.100%

MEDTECH & HEALTH SDN. BHD.[202001019371 (1375691-T)]

Manufacturing and supply of health products.

60%EXL PIPE (BORNEO) SDN. BHD. [201601025306 (1196245-X)]

Manufacturing and trading of Multi Layer PVC Pipe.

100%SERI BUMIJAYA SDN. BHD. [200601010796 (730546-K)]

Trading in Cement.

100%AGROWELL SDN. BHD. [198501001653 (134100-V)]

Quarry operations and trading of aggregates and related products.

100%ENRICH FORTRESS SDN. BHD. [201001023121 (906892-M)]

Investment in property.

100%CASA USAHA SDN. BHD. [201101010056 (938195-X)]

Investment in property.

55%POLYFLOW (B) SDN. BHD.* (AGO/RC/6372/05)

Manufacturing of polyethylene pipes for purposes of supply and trade.

* Incorporated in Brunei Darussalam

Corporate Structure


Group Executive Chairman’s Statement and Management Discussion & Analysis

REVIEW OF BUSINESS PERFORMANCE

The year 2020 has proven to be an extraordinary and challenging year for everyone from all walks of life due to the Covid-19 pandemic that engulfed the whole world. Many countries had taken lockdown measures as well as imposed movement restriction within countries and international travel ban in effort to curb the spread of the virus. Such actions have caused a huge disruption to the world supply chain and delay in international shipment of materials.

The Malaysian Government has also taken the similar path and implemented the same measures with the first Movement Control Order (“MCO”) in place nationwide from 18 March 2020 to 12 May 2020 and non-essential businesses have to cease or scale down their operations. This has put an enormous strain on an already muted domestic market reeling from the effects of trade tension between China and United States of America and uncertainties surrounding Brexit. At the same time, the local business community is still coming to grips with effects from the recent changes in the local political landscape.

Our Group’s operations were also affected by the impact of the pandemic as most of our manufacturing activities have to come to a halt during the MCO period. Revenue generated from the manufacturing segment was down by RM36 million from RM101.7 million recorded in the last financial year. However, the Group still managed to register higher total revenue of RM141.7 million and profit before tax of RM3.4 million that represented an encouraging improvement from the loss before taxation of RM1.4 million recorded in the previous year. These were mainly contributed by a better performance arising from the construction segment with a higher reported revenue and profit margin. We also managed to bring the operation and financing costs down by reviewing and examining our

operation efficiency and made changes to reduce redundancy and waste.

During the year, the Group managed to add approximately RM253 million worth of contract works to its existing book order and that will further strengthen the Group’s f inancial position.

PROSPECT

We foresee that the coming year will continue to be challenging as many countries are experiencing a resurgent in number of Covid-19 cases and governments are forced to take stringent measures and implement another lockdown to slow down and contain the spread of the viruses. Malaysia is currently having another lockdown and unless the vaccination program can be rolled out quickly businesses will continue to affected by the intermittent disruptions.

We will continue to ensure Standard Operating Procedures (“SOP”) are strictly adhered to at all levels to safeguard our people and put in place a few measures to ensure that our business will continue be sustainable and viable. We believe our Group will be able to perform reasonably well in the coming year and will continue to seek for more business opportunities to improve our financial position.

ACKNOWLEDGEMENT

On behalf of the Board of Directors, I would like to the management and staff of the Group for their dedication, hard work and commitment to the Group during the trying time. I also wish to extend my gratitude to our shareholders, customers, suppliers and business associates for their unwavering support of and confidence in our Group.

Lastly, I also wish to extend my sincere appreciation to my fellow Board members for the guidance and contributions to the Group.

Dear Valued Shareholders,

On behalf of the Board of Directors of Quality Concrete Holdings Berhad (“QC”), it is my pleasure to present to you the Annual Report and Audited Financial Statements of the Group for the financial year ended 31 January 2021.

Tiang Ching KokGROUP EXECUTIVE CHAIRMAN


Group Executive Chairman’s Statement and Management Discussion & Analysis (Contd.)

Manufacturing Segment

There are 3 divisions under this segment as listed below:

• Ready-Mixed Concrete Division (“RMC”)

Under this division, QC operates 7 ready-mixed concrete batching plants throughout Sarawak located in major towns and cities such as Kuching, Sibu, Mukah, Tanjung Manis and Saratok. Our RMC division offers various grades of ready-mixed concrete and concrete piles for both commercial development and government infrastructure projects.

• Pipes Division

QC produces High Density Polyethylene pipes (‘HDPE’) commonly used for water reticulation. The pipes are also used for underground power and telecommunication cable protection.

QC also produces High Impact Resistance Multi-Layer UPVC pipes commonly used for water reticulation and sewerage.

• Timber Division

QC produces sawn timber for export market and also produces all kinds of downstream timber products such as doors, wooden flooring.

Construction & Property Development Segment

• Property Development Division

QC has about 200 acres of land bank at various locations in Kuching and Johor Bahru. However, in view of the prevailing weak property market condition, there is no immediate development plan being carried out in the financial year under review.

• Construction Division

The Construc tion division focuses mainly on infrastructure projects such as water reticulation, road and bridges construction. Currently it has 3 infrastructure projects in hand with an outstanding order book of RM289 million to be completed in the next 3 years.

• Road Maintenance Division

This division is involved in the maintenance of state roads in Sri Aman and Betong for a period of 10 years with effect from 1 January 2020.

COMPANY OVERVIEW

QC is a public listed Company listed on the Main Market of Bursa Malaysia Securities Berhad and has 2 core business segments as follows:



Property Development Division

The Group’s property development division has remained inactive with no new project launches for the financial year under review. It has not recorded any revenue in the current financial year as there are no active developments ongoing. It recorded a loss before tax of RM1.0 million for the current financial year due to the interest cost arising from a term loan.

The property market remains challenging due to factors such as huge property overhang, strict lending policy and persistent lukewarm buying sentiment. In view of the current situation, the management will continue to monitor the market condition to determine a suitable development plan.

Construction Division

The construction division has posted revenue of RM40.9 million for the current financial year, an increase of RM15.7 million as compared to the last financial year. The revenue recorded was from 3 existing infrastructure projects at various location within Sarawak. It has recorded RM1.7 million of profit before tax as compared to profit before tax of RM1.0 million recorded in the last financial year in tandem with the increase in revenue. It is expected to contribute more in the coming year when the projects are in full operation.

Road Maintenance Division

The road maintenance division which started the road maintenance service with effect from 1st January 2020 has recorded revenue of RM34.4 million for the current financial year as compared to RM2.9 million recorded in the last financial year. Profit before tax stood at RM11.1 million for the current financial year as compared to RM1.1 million recorded in the last financial year. It is expected to provide a stable income over the next 10 years and will continue to contribute positively to the Group’s financial performance in the future.

REVIEW OF OPERATIONS AND FINANCIAL RESULTS

Despite having to cease most of our business activities during MCO period, the Group still managed to register higher revenue at RM141.7 million as compared to RM132.8 million recorded in the preceding year. Profit before tax stood at RM3.4 million which is a vast improvement compared to the loss before tax of RM1.4 million recorded in the year before. The improvement in the overall results was mainly attributable to better performance from Property and Construction Segment.

Property and Construction Segment


Ready-mixed Concrete

During the year, the ready-mixed concrete division has seen its revenue dropped by 39% to RM33.2 million. The significant decrease in revenue was due to the impact from the first MCO imposed by the government. After the first MCO was lifted, demand for ready mixed concrete remains soft as construction project progress remains slow as contractors are facing shortage of labour.

Loss before tax from the ready-mixed concrete division stood at RM3.6 million compared to RM2.6 million in the last financial year.

Nonetheless, we see that there are opportunities in the coming year as the State Government has rolled out various infrastructure projects such as the Coastal Highway and Second Trunk Road. The management is looking at various ways to increase our competiveness and secure more orders in the coming year.

Timber Products

The timber products division has recorded revenue of RM11.3 million in the current year, which is slightly higher than RM10.5 million revenue recorded in the previous year.

Although the revenue recorded are slightly higher, loss before tax recorded in the current financial year is at RM1.6 million as compared to RM0.6 million in the previous year as the division is facing margin compression due to the softer demand for both oversea and domestic market.

Pipes

The pipes division which consisted of HDPE and MPVC pipe has recorded a combined revenue of RM21.2 million in the current year which is RM15.5 million or 42.2% decrease from the RM36.7 million recorded in the previous financial year. The demand for pipes was also affected by the COVID 19 situation as MCO imposed by government has disrupted the production for around 2 months coupled with lesser demand from existing customers as most projects were experiencing a slow down due to shortage of construction workers while new proposed projects are either put on hold or slow to roll out.

As a result of the decrease in revenue, the pipes division has recorded a lower profit before tax of RM0.2 million as compared to RM3.1 million in the previous year.


Manufacturing Segment

The Manufacturing Segment is adversely affected by the COVID 19 situation during the current financial year. The Manufacturing segment which are involved in manufacturing of building products was not allowed to operation during the first Movement Control Order (“MCO”) imposed by the government to curb the spread of COVID 19. Revenue recorded is lower in the current financial year at RM65.7 million as compared to RM101.7 million recorded in the previous financial year, represents a drop of 35.4 %.


Directors’ Profile

TIANG CHING KOK Executive ChairmanAged 47, Male, Malaysian

Mr. Tiang Ching Kok was appointed to the Board of on 2 January 2002. He graduated with a Bachelor of Commerce degree from Deakin University, Australia in 1996 and joined Earthmover Group of Companies in 1996 as Executive Director and was responsible for the overall management of the group. His valuable management experience in sawmilling and logging activities is an asset to QC Group as one of QCHB’s subsidiaries, Lee Ling Timber Products Sdn. Bhd., is also involved in the timber business. Mr. Tiang is also a director to all of the QCHB’s subsidiaries. He has no other personal interest in any business arrangement involving the Company, except for those disclosed on pages 156 to 160 of this Annual Report. He attended all the four (4) Board Meetings held in the financial year ended 31 January 2021. He has no convictions for any offences within the past 5 years.

PAUL CHIAM TAU KEENExecutive DirectorAged 51, Male, Malaysian

Mr. Paul Chiam was appointed to the Board on 18 June 2020. He holds a Master of Business Administration from Heriot-Watt University, UK and is a qualified member of Malaysian Institute of Accountants, CPA Australia and Chartered Tax Institute of Malaysia. He joined Quality Concrete Holdings Berhad (“QCHB”) as Group Finance Manager on 7th January 2005 and was later promoted to the role of both Group General Manager and Chief Financial Officer. Prior to joining QCHB he has worked in an international accounting firm for more than 8 years with extensive experience in audit and also various corporate exercises such Merger and Acquisition, Corporate Privatisation and Initial Public Offer. He does not have any family relationship with any director and/or major shareholder of QCHB, nor any personal interest in any business arrangement involving the Company. He has attended all four (4) Board Meetings held in the financial year ended 31 January 2021. He has no convictions for any offences within the past 5 years.

From left to right:Paul Chiam Tau Keen, Pang Kim Soo, Tiang Ching Kok, Felix Wong Khung Chui, Lynda Chong Hui Lyn, Peter Ha Tiuen Kiong



FELIX WONG KHUNG CHUI Independent Non-Executive DirectorAged 50, Male, Malaysian

• Member of Audit Committee• Member of Remuneration & Nomination Committee

Mr. Felix Wong was appointed to the Board on 20 April 2018. Mr Felix Wong graduated from Monash University, Melbourne, Australia with a degree in Bachelor of Commerce majoring in Accounting. He is a qualified member of Malaysia Institute of Accountants, CPA Australia, Malaysian Institute of Certified Public Accountant and Chartered Tax Institute of Malaysia. He has been in public practice for more than 21 years mostly dealing with matters pertaining to audit and tax. Currently, Mr. Felix Wong is the managing partner of Felix Wong & Co., an approved licensed audit firm. He does not have any family relationship with any director and/or major shareholder of QCHB, nor any personal interest in any business arrangement involving the Company. He has attended all four (4) Board Meetings held in the financial year ended 31 January 2021. He has no convictions for any offences within the past 5 years.

LYNDA CHONG HUI LYN Independent Non-Executive Director Aged 40, Female, Malaysian

• Member of Audit Committee • Member of Remuneration & Nomination Commitee

Ms. Lynda Chong was appointed to the Board on 18 June 2020. She graduated from the University of Portsmouth in year 2003 with BEng Civil Engineering degree. She is a registered PEng with Board of Engineers Malaysia and also a member of the Institution of Engineers Malaysia. Ms Lynda Chong brings with her 16 years of experience in civil engineering works in the field of design and construction of roadworks and drainage. She started her career as a Design Engineer with a local engineering firm for 5 years before took up a position with Bolton Hennessy Sdn Bhd in Brunei where she was later promoted to the rank of Associate. Currently, she is the Director of Jurutera Perunding Lyn and also the shareholder and director of Jurutera Perunding Promanag Sdn Bhd. She does not have any family relationship with any director and/or major shareholder of QCHB, nor any personal interest in any business arrangement involving the Company. She has attended three (3) of the four (4) Board Meetings held in the financial year ended 31 January 2021 She has no convictions for any offences within the past 5 years.

PANG KIM SOO Independent Non-Executive DirectorAged 64, Male, Malaysian


Mr. Pang Kim Soo was appointed to the Board on 2 September 2014. Mr Pang obtained his Bachelor of Science in Building from the University of South Bank, (formerly known as Polytechnic of South Bank) United Kingdom in 1981 . He has extensive experience in the building industry having involved in it for the past 30 years. He is also the shareholder and executive director of several companies that are in trading, property development and services activities. Mr Pang has also previously served in Majlis Bandaraya Kuching Sarawak (“MBKS”) as a councilor and advisor for 12 years. He does not have any family relationship with any director and/or major shareholder of QCHB, nor any personal interest in any business arrangement involving the Company. He has attended all the four (4) Board Meetings held in the financial year ended 31 January 2021. He has no convictions for any offences within the past 5 years.

Directors’ Profile (Contd.)

PETER HA TIUEN KIONG Independent Non-Executive DirectorAged 53, Male, Malaysian


Mr. Peter Ha was appointed to the Board on 29 October 2012. He obtained his Master degree in Engineering Science in Civil Engineering from University of New South Wales in 1993 majoring in structural engineering. He is a qualified engineer and member of the Institution of Engineers Malaysia. Mr Ha has more than 20 years of experience in civil engineering works especially in the design of bridges and has involved in various bridge construction projects in Sarawak. Currently, he is a Director of a construction company and also the Principal of Peter Ha Consulting firm. He does not have any family relationship with any director and/or major shareholder of QCHB, nor any personal interest in any business arrangement involving the Company. He attended all the four (4) Board Meetings held in the financial year ended 31 January 2021. He has no convictions for any offences within the past 5 years.


Profile of Key Management

DAVID GOH HONG CHIANGGroup Chief Operating Officer

Aged 52, Male, Malaysian

SIM KIN HUIGeneral Manager, Pipes Division

Aged 57, Female, Malaysian

IR. LAU KIING CHUONGGeneral Manager, Property Division


TIANG CHING WHUGeneral Manager, Timber Division


Mr. David Goh graduated with a Bachelor Degree in Economics at Macquarie University, Australia. He began his career as an Officer with Arab-Malaysian Finance Bhd. He joined QCHB in May 1999, and was promoted to Group Chief Operating Officer on 2nd January 2006. He is the brother in law to Mr Tiang Ching Kok, the Managing Director of QCHB. He has no convictions for any offences within the past 5 years.

Mdm Sim Kin Hui joined Polyflow as Admin & Account Executive in 1991. She completed Diploma in Human Resource Management from American National University in 2006. She has a wide range of Administration, Human Resource, Sales & Marketing experiences covering the management system. She was promoted to Admin & HR Manager in-charge of Admin & HR Department & Sales Coordination in 2010 & again promoted to Senior Admin & HR Manager cum Sales Manager in 2014. She was subsequently promoted to General Manager on January 2018. She was appointed as the Management Representative in-charge of the company’s Quality Management System, ISO9001 certification program since 2014. Prior joining Polyflow, she worked with construction firms & trading companies as Admin & Account Assistant from 1982 to 1990. She does not have any family relationship with any director and/or major shareholder of QCHB. She has no convictions for any offences within the past 5 years.

Ir. Lau Kiing Chuong graduated with a Bachelor of Civil Engineering Degree from University of Roorke, India. He is a Professional Engineer to the Board of Engineers Malaysia and also member of Institute of Engineers, Malaysia. He was appointed as General Manager of the Property Development Division on 1st December 2002. He has vast experiences in the construction and civil works having been involved in variuos residential and commercial development project, and infrastructure work. He does not have any family relationship with any director and/or major shareholder of QCHB. He has no convictions for any offences within the past 5 years.

Mr Tiang Ching Whu graduated with a degree in Marketing & Finance from Curtin University, Australia. He joined the Company in 1997 as Marketing Executive to prepare yearly and other periodic marketing plan. He is also assisting General Manager in carrying out marketing strategies and undertake market research on competitor’s products. In September 2007, he was promoted to General Manager to oversee the operations of the company. He is also responsible for marketing to develop sales and marketing strategies for the company, analyse the current market trends and result, production planning and determine manpower, equipment and raw materials needed to cover production demand He does not have any family relationship with any director and/or major shareholder of QCHB. He has no convictions for any offences within the past 5 years.


Audit Committee Report

The Board of Directors of Quality Concrete Holdings Berhad is pleased to present the report of the Audit Committee of the Board for the year ended 31 January 2021.

The Audit Committee was established by a resolution of the Board on 7 October 1996.

MEMBERS AND MEETINGS

The members of the Audit Committee during the year comprised the directors listed below. During the year ended 31 January 2021, the Audit Committee held a total of four (4) meetings.

Name Status of directorship Independent Attendance of meetings

Felix Wong Kung Chui Independent Non-Executive Director Yes Attended 4 out of 4 meetings held

Ha Tiuen Kiong Independent Non-Executive Director Yes Attended 4 out of 4 meetings held

Pang Kim Soo Independent Non-Executive Director Yes Attended 4 out of 4 meetings held

Lynda Chong Hui Lyn Independent Non-Executive Director Yes Attended 3 out of 4 meetings held

TERMS OF REFERENCE Membership

The Audit Committee shall be appointed by the Board from amongst their number and shall consist of not less than three (3) members, all of whom shall be non-executive directors. The majority of the Committee members shall be independent directors with at least one of whom shall be a member of the Malaysian Institute of Accountants or a member who fulfils the requirements stated in Paragraph 15.09 (1) (c) (ii) and Practice Note No. 13/2002, (Paragraph 7) of the listing requirements of the Bursa Malaysia Securities. The Chairman of the Audit Committee shall be an independent non-executive director appointed by the Board.

Meetings and minutes

Meetings shall be held not less than four (4) times a year and the Group Executive Director, Group Internal Auditor and a representative of the external auditors shall normally be invited to attend the meetings. Other members of the Board may attend the meetings upon the invitation of the Audit Committee. At least once a year, the Audit Committee shall meet the external auditors without any executive directors present. A quorum shall be two (2) members present and a majority of whom must be independent directors. Minutes of each meeting shall be kept and distributed to each number of the Audit Committee and of the Board. The Chairman of the Audit Committee shall report on each meeting to the Board. The Secretary to the Audit Committee shall be the Company Secretary.


Authority

In carrying out their duties and responsibilities, the Audit Committee shall have the authority:

i. to investigate any activity within its terms of reference and shall have unrestricted access to both the internal and external auditors and to all employees of the Group;

ii. to have the resources which are required to perform its duties and to obtain independent professional or other advice it deems necessary;

iii. to have full and unrestricted access to information pertaining to the Company and the Group;

iv. to have direct communication channels with the internal and external auditors; and v. to obtain external legal or other independent professional advice as necessary.

Notwithstanding anything to the contrary hereinbefore stated, the Audit Committee does not have executive powers and shall report to the Board of Directors on matters considered and its recommendations thereon, pertaining to the Company and the Group.

Responsibility

Where the Audit Committee is of the view that a matter reported by it to the Board of Directors has not been satisfactorily resolved resulting in a breach of the Listing Requirements of Bursa Malaysia Securities, the Audit Committee has the responsibility to promptly report such matter to the Bursa Malaysia Securities Berhad.

REVIEW OF THE COMPOSITION OF THE AUDIT COMMITTEE

The term of office and performance of the Audit Committee and each of the members shall be reviewed by the Board of Directors at least once every three (3) years to determine whether the Audit Committee and its members have carried out their duties in accordance with their terms of reference.

Key Functions and Duties

The key functions and duties of the Audit Committee are:

i. to consider the appointment, resignation and dismissal of external auditors and the audit fee;

ii. to review the nature and scope of the audit with the internal and external auditors before the audit commences;

iii. to review the quarterly and annual financial statements of the Company and the Group focusing on the matters set out below, and thereafter to submit them to the Board:

• any changes in accounting policies and practices; • significant adjustments arising from the audit; • the going concern assumption; and • compliance with accounting standards and regulatory requirements.

iv. to discuss problems and reservations arising from the interim and final audits, and any matter the external auditors may wish to discuss;

Audit Committee Report (Contd.)


v. to review the audit reports prepared by the internal and external auditors, the major findings and management’s responses thereto;

vi. to review the adequacy of the scope, functions and resources of the internal and management audit department

and whether it has the necessary authority to carry out its work;

vii. to consider the report, major findings and management’s response thereto on any internal investigations carried out by the internal auditors;

viii. to review any appraisal or assessment of the performance of executive(s) in the internal and management audit department;

ix. to approve any appointment or termination of senior executive(s) in the internal and management audit department;

x. to be informed of any resignation of executives in the internal and management audit department and to provide the resigning executive an opportunity to submit his/her reason for resignation;

xi. to review the evaluation of the systems of internal control with the auditors;

xii. to review the assistance given by the Company’s and the Group’s employees to the auditors;

xiii. to review related party transactions entered into by the Company and the Group to ensure that such transactions are undertaken on the Group’s normal commercial terms and that the internal control procedures with regards to such transactions are sufficient; and

xiv. any such other functions as may be agreed to by the Audit Committee and the Board.

ACTIVITIES OF THE AUDIT COMMITTEE DURING THE YEAR

In line with the terms of reference of the Audit Committee, the following activities were carried out by the Audit Committee during the year ended 31 January 2021 in the discharge of its functions and duties:

i. review of the audit plans for the year for the Company and the Group prepared by the internal and external auditors;

ii. review of the audit reports for the Company and the Group prepared by the internal and external auditors and consideration of the major findings by the auditors and management’s responses thereto;

iii. review of the quarterly and annual reports of the Company and the Group prior to submission to the Board of Directors for consideration and approval;

iv. review of the disclosure on related party transactions entered into by the Company and the Group in the annual report of the Company;

v. review of the Circular to shareholders in relation to the General Mandate for recurring related party transactions before recommending it for the Board of Directors’ approval;

vi. commissioning of special reviews on specific areas of financial operations of the Group; and

vii. meet with the external auditors in the absence of management except the Company Secretary.



INTERNAL AUDIT FUNCTIONS

The Company has an Internal Audit Department whose principal responsibility is to undertake regular and systematic reviews of the systems of controls so as to provide reasonable assurance that such systems continue to operate satisfactorily and effectively in the Company and the Group. The Department is also responsible for the conduct of regular and systematic reviews of environmental, safety and health issues in the Company and the Group. The attainment of such objective involves the following activities being carried out by the Department:

i. reviewing and appraising the soundness, adequacy and application of accounting, financial and other controls and promoting effective control in the Company and the Group at reasonable cost;

ii. ascertaining the extent of compliance with established policies, procedures and statutory requirements;

iii. ascertaining the extent to which the Company’s and the Group’s assets are accounted for and safeguarded from losses of all kinds;

iv. appraising the reliability and usefulness of information developed within the Company and the Group for management;

v. recommending improvements to the existing systems of controls;

vi. carrying out audit work in liaison with the external auditors to maximise the use of resources and for effective coverage of audit risks;

vii. carrying out investigations and special reviews requested by management and/or the Audit Committee of the Company; and

viii. identifying opportunities and recommend to improve the operations of and processes in the Company and the Group.

The costs incurred for the internal audit function of the Group for financial year ended 31 January 2021 was RM50,900.

This Audit Committee Report was approved by the Board on 23 June 2021.



The Board of Directors (“Board”) of Quality Concrete Holdings Berhad (“the Company”) is committed in ensuring that the practice of good corporate governance in the conduct of the businesses and affairs of the Company and its subsidiaries (“the Group”).

The Board views the maintenance of good corporate governance is essential for sustainable long-term performance and value creation.

This statement is prepared in compliance with Bursa Malaysia Securities Berhad Main Market Listing Requirements (“MMLR”) and mainly describes the approaches that the Group has taken with respect to the principles and recommended practices in the Malaysian Code on Corporate Governance 2017 (“MCGG 2017”).

The Corporate Governance Report (“CG Report”) which discloses the Company’s application of each recommended practice in the MCCG 2017 is available on the Company’s website at www.qchb.com.my.

BOARD LEADERSHIP AND EFFECTIVENESS

Board Responsibilities

The Board is responsible for the oversight and overall management of the Group. The principal responsibilities are as follows:

• review and adopt strategic plan, as developed by Management of the Group, annual budgets and long-term business plans, taking into account the sustainability of the Group’s business;

• oversee the conduct and governance of the Group’s business and evaluating whether or not its businesses are being properly managed;

• identify principal business risks faced by the Group, and ensuring the implementation of appropriate internal control systems to manage such risks;

• overseeing the succession planning and human resource plan;• maintaining shareholder and investor relations for the Company; and• review the adequacy and integrity of the Group’s internal control systems.

The Board has delegated specific responsibilities to three (3) Board Committees, namely the Audit Committee, Nominating Committee and Remuneration Committee, to examine specific issues within their respective terms of reference. The final decision is the responsibility of the Board after considering the recommendations of the respective committee.

Board charter

The Company has adopted a Board Charter, setting out, inter-alia, the roles of the Board, Board Committees, Executive and Non-Executive Directors and Management. The Charter, which serves as a reference point for Board’s activities to enable Directors to carry out their stewardship role and discharge their fiduciary duties towards the Company, also contains a formal schedule of matters reserved to the Board for deliberation and decision so that the control and direction of the Company’s businesses are in its hands. The Board Charter is published on the Group’s website at www.qchb.com.my.

Composition of the Board

There are currently Six (6) Directors on the Board comprising of two (2) Executive Directors and four (4) Independent Non-Executive Directors. This provides the desired level of objectivity and independence in Board deliberations and decision making. The Board composition complies with Chapter 15.02 of the Main Market Listing Requirements which require a minimum of 2 or 1/3 of the Board to be independent directors. The profile of each Director is set out in this Annual Report.

Statement on Corporate Governance


Independence of the Board

The Executive Chairman is responsible for the day to day running of the business operations of the Group with the support of a team of Management staff. Although the Chairman is an executive director, its independence is still maintained. The current composition of Independent Non-Executive Directors in the Board, which comprises a majority of Board members, provides for pertinent check and balance in the Board such that no one Director has unfettered powers in decision making.

The Chairman of the meeting is responsible for ensuring the adequacy and effectiveness of the Board’s governance process and acts as a facilitator at Board meetings to ensure that contributions from Directors are forthcoming on matters being deliberated and that no Board member dominates discussion. As the Managing Director, he implements the Group’s strategic initiatives, policies and decision adopted by the Board and oversees the operations and business development of the Group.

The Independent Non-Executive Directors bring to bear objective and independent views, advice and judgement on interests, not only of the Company, but also of shareholders and stakeholders. Independent Non-Executive Directors are essential for protecting the interests of shareholders and can make significant contributions to the Company’s decision making by bringing in the quality of detached impartiality. The Board recognizes the importance of establishing criteria on independence to be used in the annual assessment of its Independent Non-Executive Directors. The definition on independence accords with the MMLR of Bursa.

Tenure of Independent Directors

Practice 4.2 of the MCCG 2017 states the tenure of an independent director to be not exceeding a cumulative term limit of nine (9) years. However, the Board believes that a director’s independence should not be determined through the length of services as there are significant advantages to be gained from long-serving directors who over the years have developed deeper understanding of the Group’s business and process insight and in-depth knowledge of the Group’s business affairs.

Board Meetings

The Board meets at least four times (4) annually, with additional meetings being convened as and when necessary.

For the Board to deliberate effectively on agenda of meetings, relevant meeting papers or proposals will be furnished prior to and in advance of each meeting. This enables the Board to study the facts and have productive discussion and make informed decision at the meeting. At each Board meetings, the Board reviews the business performance of the Group and discusses major strategic, operational, compliance and financial issues. The Chairman of the Audit Committee briefs the Directors at each Board meeting the salient matters deliberated by the Audit Committee and which require the Board’s attention or direction, including approval, as the case may be. All pertinent issues discussed at Board meetings in arriving at decisions and conclusions are properly recorded by the Company Secretary by way of minutes of meetings, which are confirmed by the Chairman at the next meeting.

Minutes of proceedings and resolutions passed at each Board and Board Committees Meetings are kept in the minutes book at the registered office of the Company. In the event of a potential conflict of interest, the Director in such position will make a declaration to that effect as soon as practicable. The Director concerned will then abstain from any decision-making process in which he has an interest in.

Statement on Corporate Governance (Contd.)


During the financial year under review, four (4) Board meetings were held. Details of the attendance of the Directors at the Board Meetings are disclosed in their respective personal profiles set out as follows:-

Supply of, and access to, information

All Directors are provided with an agenda and a set of Board papers prior to Board meetings. This is issued in sufficient time to enable the Directors to prepare and deliberate on the issues prior to the meeting.

Senior Management members are also invited to attend Board Meetings to provide the Board with their views and explanation on certain agenda items tabled to the Board, and to clarify on issues that have been raised by Directors.

All Directors have access to the advice and services of the Company Secretaries, who is responsible for ensuring that Board Meeting procedures are adhered to and that applicable rules and regulations are complied with. The Board is updated and advised by the Company Secretaries from time to time on new statutes and directives issued by the regulatory authorities.

In addition, the Directors may obtain independent professional advice in the furtherance of their duties, at the Company’s expense.

Selection and assessment of Directors

The Nominating Committee, established by the Board with specific terms of reference, comprises the following Independent Non-Executive Directors as its members:

• Mr Pang Kim Soo (Chairman);• Mr Ha Tiuen Kiong; • Mr Felix Wong Khung Chui and• Ms Lynda Chong Hui Lyn (Appointed on 18 June 2020)

The Nominating Committee is primary responsible for recommending suitable appointments to the Board, taking into consideration the Board structure, size, composition and the required mix of expertise and experience which the director should bring to the Board. It assesses the effectiveness of the Board as a whole, the Board Committees and the contribution of each director. Where considered appropriate, the Nominating Committee considers recommendation for directorship by shareholders or existing directors. Based on its terms of reference, the Nominating Committee carries out the assessment process regardless of whether the candidate is for new appointment or re-appoinment.

Directors No. of meetings attended

Tiang Ching Kok 4 out of 4 Ha Tiuen Kiong 4 out of 4 Pang Kim Soo 4 out of 4 Felix Wong Khung Chui 4 out of 4 Lynda Chong Hui Lyn** 3 out of 4 Paul Chiam Tau Keen** 3 out of 4

** Appointed on 18 June 2020



The final decision on the appointment of a candidate recommended by the Nominating Committee rests with the Board. The Company Secretary ensures that all appointments are properly made upon obtaining all necessary information from the Director. During the financial year under review, the Nominating Committee met once, attended by all members. During the meetings and as at the date of this Statement, the Nominating Committee has carried out the following activities within its terms of reference and reported the outcome to the Board:

• evaluated the re-appointment of Directors, and recommended to the Board for approval;• evaluated on the appointment of new Directors (Mr Paul Chiam and Ms Lynda Chong);• reviewed training undertaken by Directors as well as those training that are available for Directors for the ensuing

year; and• conducted annual evaluation of the Board’s effectiveness and performance covering the assessment of the Board,

each individual Director, each Board Committee, and independence of the Independent Directors.

The Board has no specific policy on diversity of its members in terms of gender, age or ethnicity or target set to achieve a blend of these attributes, but believes that the Company should be appointing Directors who have the relevant skills, experience, knowledge, integrity, character and time to contribute towards realising the Company’s objectives.

Directors’ remuneration

The Remuneration Committee, is responsible for determining the level and make up of Executive Directors’ remuneration for Quality Concrete Holdings Berhad and its subsidiaries so as to ensure that the Group attracts and retains the Directors of the necessary caliber, experience and quality needed to run the Group successfully. The current members of the Remuneration Committee are Mr. Felix Wong Khung Chui, Mr Ha Tiuen Kiong, Mr Pang Kim Soo and Ms Lynda Chong Hui Lyn (Appointed on 18 June 2020).

During the financial year ended 31 January 2021, no meeting was held.

Details of Directors’ remuneration for the financial year ended 31 January 2021 are as follows:

Company

Category Fees Salaries & Bonus Defined Benefits Total Allowances Contribution in Kind Remuneration Plan RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Executive Directors Tiang Ching Kok 12 110 - 13 19 154 Paul Chiam Tau Keen 12 66 - 13 1 92

Non-Executive Directors Ha Tiuen Kiong 12 12 - - - 24 Pang Kim Soo 12 12 - - - 24 Felix Wong Khung Chui 12 12 - - - 24 Lynda Chong Hui Lyn 12 12 - - - 24

Total 72 224 - 26 20 342



Group

Category Fees Salaries & Bonus Defined Benefits Total Allowances Contribution in Kind Remuneration Plan RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Executive Directors Tiang Ching Kok 132 518 67 71 36 824 Paul Chiam Tau Keen 72 276 44 61 19 472 (Appointed on 18 June 2020)

Non-Executive Directors Ha Tiuen Kiong 36 12 - - - 48 Pang Kim Soo 12 12 - - - 24 Felix Wong Khung Chui 12 12 - - - 24 Lynda Chong Hui Lyn 12 12 - - - 24

Total 276 842 111 132 55 1,416

Directors’ Training – Continuing Education Programmes

The Board is mindful of the importance for its members to undergo continuous training to be apprised of changes to regulatory requirements and the impact such regulatory requirements have on the Group.

All the Directors of the Company have attended the Mandatory Accreditation Programme conducted by Bursa Malaysia Training Sdn Bhd within the stipulated timeframe required by the MMLR of Bursa.

During the financial year under review, Directors attended the following training:

• Safety & Quality Forum 2020• Section 17A, MACC (Amendment) Act 2018 And Adequate Procedures• 2021 Budget Seminar

The Directors are notified periodically by the Company Secretary on the types of training courses available in the market that the Directors may consider attending in order to enhance their skills and knowledge in the discharge of their stewardship role.



AUDIT AND RISK MANAGEMENT

Uphold integrity in financial reporting by the Company

The Board is committed to providing a balanced, clear and representative assessment of the Group’s financial performance and prospects at the end of each reporting period and financial year, primarily through the quarterly announcement of Group’s results to Bursa, the annual financial statements of the Group and Company as well as the message to shareholders in the Annual Report.

Audit Committee

In assisting the Board to discharge its duties on financial reporting, the Board has established an Audit Committee, comprising exclusively Independent Non-Executive Directors, chaired by Mr Felix Wong Khung Chui, who is a member of the Malaysian Institute of Accountants. The composition of the Audit Committee, including its roles and responsibilities, are set out in the Audit Committee Report included in this Annual Report. One of the key responsibilities of the Audit Committee in its specific terms of reference is to ensure that the financial statements of the Group and Company comply with applicable financial reporting standards in Malaysia. Such financial statements comprise the quarterly financial report announced to Bursa and the annual statutory financial statements.

The terms of reference of the Audit Committee include a policy on the types of non-audit services permitted to be provided by the external auditors of the Company so as not to compromise their independence and objectivity. In assessing the independence of external auditors, the Audit Committee obtains assurance by the external auditors, confirming that they are, and have been, independent throughout the conduct of the audit engagement with the Company in accordance with the independence criteria set out by the Malaysian Institute of Accountants and International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants.

Recognise and manage risks of the Group

The Board acknowledges its responsibility of maintaining a good system of internal control and risk management, and for reviewing regularly the adequacy and effectiveness of the risk management and internal control system to ensure that shareholders’ investment and the Group’s assets are safeguarded. This system can only provide reasonable, but not absolute assurance against any material misstatements, fraud or loss.

The Statement on Risk Management and Internal Control in this Annual Report provides an overview of the management of risk and state of internal controls within the Group.

The Internal Audit function reports directly to the Audit Committee. The activities carried out by the Internal Audit Department are set out in the Audit Committee Report of this Annual Report.



CORPORATE REPORTING AND RELATIONSHIP WITH STAKEHOLDERS

Shareholder participation at general meeting

The Annual General Meeting (“AGM”), which is the principal forum for shareholder dialogue, allows shareholders to review the Group’s performance via the Company’s Annual Report and pose questions to the Board for clarification. At the AGM, shareholders participate in deliberating resolutions being proposed or on the Group’s operations in general. At the last AGM, a question and answer session was held where the Chairman invited shareholders to raise questions with responses from the Board.

The Notice of AGM is circulated at least twenty one (21) days before the date of the meeting to enable shareholders to go through the Annual Report and papers supporting the resolutions proposed. Shareholders are invited to ask questions both about the resolutions being proposed before putting a resolution to vote as well as matters relating to the Group’s operations in general. All the resolutions set out in the Notice of the last AGM were put to vote by show of hands and duly passed. The outcome of the AGM was announced to Bursa on the same meeting day.

Communication and engagement with shareholders

The Board recognises the importance of being transparent and accountable to the Company’s investors and, as such, has various channels to maintain communication with them. The various channels are through the quarterly announcements on financial results to Bursa, relevant announcements and circulars, when necessary, the Annual and Extraordinary General Meetings and through the Group’s website where shareholders can access pertinent information concerning the Group.

Code of conduct and whistle-blower policy

The Board Charter sets out a Code of Ethics to be observed by Directors. As for the conduct of employees, the Board has formalized an Employees Handbook to be observed by employees in the Group. The Board has also adopted Whistle-Blowing Policies and Procedures, which outline when, how and to whom a concern may be properly raised about the actual or potential corporate fraud or breach of regulatory requirements involving employee, Management or Director in the Group. The Board is aware of the need for adherence to the Code of Conduct and Employees’ Handbook by Directors of the Company and employees in the Group respectively, and will take measures to put in place a process to ensure its compliance.

Ensure timely and high quality disclosure

The Board recognises the importance of an effective communication channel and timely dissemination of accurate information pertaining to the Group’s business activities and financial performance to its shareholders, investors and other stakeholders.

The Group’s financial results, announcements, annual report and circulars are the primary modes of disseminating information in relation to the Group’s business activities and financial information and this can be assessed from the Company’s website at www.qchb.com.my or Bursa Malaysia Securities Berhad’s website at www.bursamalaysia.com.



Additional Information

Utilisation of Proceeds

During the financial year, there were no proceeds raised from any corporate proposal.

Share Buybacks

The Company did not carry out any share buy-backs during the financial year.

Options, Warrants or Convertible Securities

There was no exercise of Options or Convertible Securities or conversion of warrants during the financial year.

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

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

Imposition of Sanctions/Penalties

There were no material sanction or penalties imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory bodies during the financial year.

Non-Audit Fees

The amount of audit and non-audit fees paid and payable to external auditors by the Group for the financial year ended 31 January 2021 is as follows:

Variation in Results

There is no material variance between the financial results and the unaudited results previously made for the financial year ended 31 January 2021.

Profit Guarantee

There was no profit guarantee given by the Company during the financial year.

Material Contracts

There were no material contracts outside the ordinary course of business entered into by the Company and its subsidiaries involving Director’s and major shareholder’s interest which were still subsisting at the end of the financial year or entered into since the end of the previous financial year.

Company Group RM RMAudit Fees 79,000 304,500 Non Audit Fees - Tax advisory & compliance 6,500 92,880- Review of Statement on Risk Management & Internal control 11,000 11,000

17,500 103,880



The Board of Directors of Quality Concrete Holdings Berhad (“Board”) is pleased to provide the following statement outlining the nature and scope of risk management and internal control of the Group pursuant to paragraph 15.26(b) of the Bursa Malaysia Securities Berhad’s Main Market Listing Requirements and Principle B of the Malaysian Code on Corporate Governance.

Board Responsibility

The Board acknowledges the importance of having an effective internal control system and a well structured risk management framework to safeguard the interest of shareholders, customers, employees and as well as the Group’s assets. The Board understands its overall responsibility for establishing an efficient and effective system of internal control covering not only financial controls but also relating to operational, compliance and risk management and for reviewing the adequacy and integrity of the system. However, due to the limitations that are inherent in any system of risk management and internal control, those systems are designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss.

The Board has established an ongoing process for identifying, evaluating and managing the principal risks faced, or potentially exposed to, by the Group in pursuing its business objectives. The process is being continually monitored and reviewed for its adequacy and effectiveness to ensure it is in accordance with the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers.

Risk Management Framework

The Board and Management are proactive in identifying significant risks associated with its business processes. The Risk Management Committee was established in April 2004 to coordinate the implementation of an enterprise-wide risk management programme for the Group. The Committee is made up of two (2) representatives from the Board and the Management representatives from the respective subsidiaries.

During the year, reviews have been conducted to assess and re-evaluate the risk profiles identified by the respective business units within the Group as well as assessing the effectiveness of the controls in place to address those risks.

Internal Audit Function

The Board acknowledges the importance of internal audit function and has in place an internal audit unit which is to report directly the Audit Committee on a quarterly basis. The internal audit function adopts a risk-based approach in developing its audit strategy and plan which focuses on identifying principal risks affecting the achievement of the Group’s business objectives, assessing the likelihood and impact of these risks, evaluating the effectiveness of the existing controls in place and formulating action plans to improve the internal control system. During the year, scheduled internal audit visits were carried out by the internal audit unit based on the audit plan presented to and approved by the Audit Committee. The Internal Auditor usually reports to the Audit Committee on areas for improvement and will subsequently follow up to ensure that corrective actions on reported weaknesses are remedied within the required time frame by Management of the respective subsidiaries.

Statement on Risk Management and Internal Control


As part of the ongoing process, the Internal Auditor has conducted detailed risk audits on the following areas as identified in the approved audit plan and other ad-hoc requests by the Audit Committee:

(a) Review of Human Resources Management (b) Review of Overtime Control System (c) Review on Credit Assessment, Granting of Credit Terms and Collections (d) Review of Impact of Covid-19 to Group’s operations

Key Elements of Internal Control

The Group has also put in place the following key elements of internal control:

• An organisational structure with well-defined scope of responsibilities, accountabilities and appropriate level of delegated authorities with clear line of reporting;

• Regular and comprehensive information provided to Management covering both financial and operational

performance and key business indicators, for effective monitoring and decision making;

• Regular visits to operating units and close involvement in daily operations of the Group by Managing Director and senior management;

• Regular Board and Audit Committee meetings are held to identify and resolve operational and financial issues;

• An independent Audit Committee comprising non-executive members of the Board, all being independent directors;

• The Audit Committee reviews the audit reports for the Company and the Group prepared by the internal and

external auditors and consideration of the major findings by the auditors and management’s responses thereto;

• Certain parts of the Group’s operations or subsidiaries have received ISO certification for their products and/or work processes, these operating units are committed to maintaining their certification by ensuring strict compliance with their respective ISO requirements which include periodic reviews from ISO;

• Training requirements are identified and reviewed on annual basis based on individual needs, departmental recommendations and certification bodies’ requirements; and

• A formalised Board Charter, Code of Conduct and Ethics, Board Diversity Policy, Whistle Blower Policy, Shareholders’ Communication Policy and Anti-Corruption and Bribery Policy.

Statement on Risk Management and Internal Control (Contd.)


Conclusion

Based on the processes set out above, the Board is of the view that the Group’s system of risk management and internal control are adequate to safeguard the shareholders’ investment and the Group’s assets and has received assurance from both the Executive Chaiman and Executive Director in this respect. Nevertheless, the Board and Management are committed towards operating a sound system of risk management and internal control and this system will continuously be reviewed and updated in line with the changes in the operating environment.

In the year under review, the Board is not aware of any material losses, contingencies or uncertainties that would require a separate disclosure in this Annual Report.

The external auditors have reviewed this Statement on Risk Management and Internal Control pursuant to the scope set out in Audit and Assurance Practice Guide 3, Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report (“AAPG 3”) issued by the Malaysian Institute of Accountants (“MIA”) for inclusion in the annual report of the Group for the year ended 31 January 2021, and reported to the Board that nothing has come to their attention that cause them to believe that the statement intended to be included in the annual report of the Group, in all material respects: has not been prepared in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers, or is factually inaccurate.

AAPG 3 does not require the external auditors to consider whether the Directors’ Statement on Risk Management and Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control system including the assessment and opinion by the Directors and management thereon. The report from the external auditors was made solely for, and directed solely to the Board in connection with their compliance with the listing requirements of Bursa Malaysia Securities Berhad and for no other purposes or parties. The external auditors do not assume responsibility to any person other than the board of directors in respect of any aspect of this report.

This statement is issued in accordance with a resolution of the Directors dated 23 June 2021.

Statement on Risk Management and Internal Control (Contd.)


Sustainability Report

INTRODUCTION

The content of this report draws upon guidance from Bursa Malaysia Securities Berhad listing requirements, which are aligned to international reporting framework.

At Quality Concrete Holdings Berhad (“QC”), we recognise the importance of conducting business responsibilities with due consideration given not only to the Group’s financial performance, but also the economic, environmental and social (“EES”) aspects. More specifically, in addition to managing sustainability governance, sustainable product development and environmental stewardship, we also aim to provide a balance development for our stakeholders.

Our Group recognise the importance of sustainability as a fundamental aspect of the business. Our Board of Directors and top management team are directly involved in the planning and strategizing of various sustainability initiatives. This requires effective governance, leadership and ongoing focus on compliance procedures. We also ensure the strategic initiatives are systematically crafted, with due attention to our stakeholders, so as to ensure the sustainability remains as an integral part of every business practice, process and project undertaken.



Sustainability Report (Contd.)

SUSTAINABILITY ENGAGEMENT

We have identified our stakeholders that have an impact on our business. Through various engagement channels, we seek to understand the views of the stakeholders, to communicate effectively with them and to respond to their concerns.

QC is a dynamic integrated manufacturer and infrastructure provider of diverse services. Our stakeholders consist of wide range of groups and we are committed to deepen our bond with the stakeholders through different methods that are tailored specifically to each group frequently.



MATERIALITY ASSESSMENT

To ensure the continued relevance of the Group’s material issues, we have conducted a new materiality review this year. Through the material assessment, we are able to identify the significant issues which enable us to improve and optimise our sustainability management. We seek to understand the opinions and views of the stakeholders through various communication channels, to communicate effectively with them and to respond to their concerns.At QC, priorities are ranked based on the actual and potential impacts of issues affecting business continuity and development. The list of material issues was reviewed and approved by the Top Management. Following our last year review, few issues were added in and some were ranked as highly material.

MATERIALITY MATRIX

Financial Performance

SustainableSupply Chain

Ethical Business & Compliance

Waste Management

Employees Benets

Anti-Bribery & Corruption

Innovation & Technology

Health and Safety

Training & Education

Customer Satisfaction

Product & Services

IMPO

RTA

NCE

TO

STA

KEH

OLD

ER

IMPORTANCE TO QC GROUP



SUSTAINING ECONOMIC VALUE

ECONOMIC AND BUSINESS PERFORMANCE

At QC, the economic sustainability is integral to our business so it is imperative to have a stable and sustainable financial system that upholds the Group. While the impact of the unprecedented pandemic on our Group’s overall financial performance was significant particularly on the manufacturing segment, it was mitigated by the better performance from the Group’s other core business segment, mainly Construction Division and Road Maintenance Division.

During the financial year under review, our Group has managed to strengthen our financial position further by procuring a new construction contract worth of RM254 million for the construction and completion of the Batang Igan Bridge, Mukah Division. The construction of the Igan Bridge across Sungai Batang Igan will lay a strong foundation for QC’s growth strategy. We are well-positioned to benefit from the State’s infrastructure development agenda and are optimistic that the Group will be able to deliver a satisfactory performance in near short term.

The Group also managed to secure a 10 years’ service contract with the State Government for the maintenance of state roads in Sri Aman and Betong Division. The service contract will provide our Group a stable stream of income.





The Covid-19 outbreak, which has been spreading rapidly worldwide had reached Malaysia in late January 2020. By March, a nationwide “Movement Control Order (MCO)” was announced that has disrupted and severely affected a lot of business. However, it also led us to explore the vast business opportunities in the healthcare sector that have arisen because of the Covid-19 pandemic.

On 20 July 2020, Medtech & Health Sdn. Bhd., a wholly-owned subsidiary was incorporated to manufacture and distribute medical grade of three-ply face mask. Despite competitive market condition, we see this as an opportunity to venture into healthcare sector.

Considering very few companies producing local personal protective equipment (“PPE”) in Sarawak, the management is keen to enter the healthcare market as the Sarawak’s leading medical mask manufacturer.

We are optimistic that the subsidiary will be able to deliver a satisfactory performance under the leadership of experienced management and quality product marketed.

At the same time, another subsidiary, Audasa Pharma was incorporated with the vision to be the main pharmaceutical products manufacturer and supplier in Borneo. We aim to reduce the reliance on supplies from West Malaysia and create products that could fulfil our local demand.

With our diverse business portfolios growth strategy, we expect to emerge stronger from the pandemic.





To strive for the Group’s growth, QC continue to lay strong foundations in strengthening the leadership bench. We believed that growth of the Group can only happen if there is a stable, sustained, dynamic, cohesive and engaging leadership in place for a long-term period. As such, QC continue to strengthen the leadership bench by maintaining experienced and qualified member on Board.

With the appointment of the high calibre professional management team, we hope to create a sound foundation towards a sustainable economic growth for the Group through improving core business together with the new strategic investments.

At QC, the Board attaches great importance to corporate governance to maintain the Group’s success, competitiveness and sustainability. We recognize the importance of effective governance and risk management policy and procedures are vital for achieving long-term success.

The introduction of the Corporate Liability Provision under Section 17A of the MACC Act, the Board is committed to uphold a high standard of ethical, moral and legal business conduct. With the adoption of the new policy, namely the Anti-Corruption and Bribery Policy among QC’s subsidiaries, the Group has set in place an anonymous reporting process where any employee, representative, supplier or contractor can be reported if there is breach of the policy in any way.

The Board is committed to upholding and implementing robust risk management and internal control measures to ensure the sustainable, long-term growth of the business, strengthening investor confidence, safeguarding our corporate reputation, and ensuring continued shareholder value creation. QC conducts its business with integrity and is fully supported by our Code of Conduct. Throughout the year, no case of misconduct had been reported by stakeholders.



PRESERVING THE ENVIRONMENT

ENVIRONMENTAL STEWARDSHIP

QC recognizes the importance to preserve the environment for future generations. Each of the subsidiaries under QC has undertaken various measures to reduce the adverse impacts on its operations. In minimizing the impact caused by our operations, appropriate actions have been taken to ensure the environmental sustainability.

Within our Construction and Development Segment, we continuously lookout our operations’ impact towards the surrounding environment. We are committed to being a responsible industry player and a conscientious steward of the available resources we have been entrusted with. We make sure the construction activities were generally carried out in an environmentally consicous manner.

On top of this, we engaged independent external party to conduct environmental assessment constantly following guideline and requirement from Natural Resources and Environment. The quarterly reports throughout the financial year had proved that the water quality, air quality and noise level within the project area has not been altered or severly affected by the on-going construction activities carried out.

We are focused on applying appropriate operating strategies and technologies to minimise our environmental footprint. We engaged with qualified environmental consultants to ensure that we preserve the environment at all time in an environmentally responsible practice.

CONSTRUCTION & DEVELOPMENT SEGMENT



PRESERVING THE ENVIRONMENT

MANUFACTURING SEGMENT

Energy-Efficient LightingAll the Group’s companies have been converting to energy efficient lighting in line with the measure to reduce the negative effect of toxic chemicals on the environment while minimising operational costs. As Light Emitting Diode (LED) lighting has proven to be the most feasible option due to its energy-efficiency were widely used in all the Group’s companies. Besides, the office building maximises natural lighting by using skylights and glass windows.

Fuel ConsumptionIn 2020, the Group’s total fuel consumption also decreased due to the reduced number of operational hours in all the Group’s companies during Movement Control Order (MCO) and limited operations during Recovery MCO (RMCO) period. The uses of cars, trucks, heavy machinery and other plant and equipment that run on fossils fuels had reduced significantly as compared to previous year. We also ensure all vehicles are properly maintain and are in good condition to ensure fuel efficient and reduce carbon emission.

Water ManagementAt QC, it is our goal to reduce water wastage through optimal planning, development, distribution and management of our water resources. As we consume a huge volume of water in daily operation especially the Ready-Mixed Concrete companies, we aim to increase water usage efficiency. As such, we harvest rainwater for activities such as washing trucks and tyres and road wetting.

Within QC’s Manufacturing Segment’s respective companies, the management are committed for more efficient use of energy.



ADVANCING SOCIAL PRACTICES

LABOUR PRACTICES

QC acknowledged that the most important asset is the human capital and it owes its success to its diligent and loyal employees. At QC, we are committed to create a conducive working environment and ensure the well-being of our employees.

At QC, we promote diversity workforce across all level of operations. We are committed to provide an equal employment opportunities and makes no discrimination based on race, religion, gender, age, or nationality. However, it has to be acknowledged that manufacturing and construction industry in general, is dominated by male workers.

As we aim to be an employer of choice in Sarawak, QC are committed to provide a decent work practices to ensure fair treatment to workforce. During the Covid-19 pandemic, QC did not retrench any staff or reduce their entitlement. Also, the prudent financial management ensure staff pay on time.

The Group’s employees are encouraged to report any improper treatment received from the workplace or behaviour that is offensive. We had zero tolerance towards any physical or verbal discriminatory harassment in the workplace. During the year, no cases of grievances or sexual harassment were reported.



MINIMUM WAGES

At QC, we comply with the Minimum Wages Order 2020. The monthly salary of the employee was adjusted accordingly from RM1,100 to the minimum threshold of RM1,200. We commit to exceeding the minimum wage while complying with the statutory requirements for calculating wages. The salary for QC’s employees shall be based on the market rate, the company’s capability to pay and the profile of work experience and internal equity.

ADVANCING SOCIAL PRACTICES

FAIR WORKING HOURS

QC upholds the fair working hours and does not deliberately practice excessive work hours. At QC, we promote flexible working hours that enable employees to manage their work and other commitments more effectively.

Due to the Covid-19 pandemic, we strictly follow the Standard Operating Procedures enforced by Sarawak Disaster Management Committee such as allowing staff to work from home or work in shift to reduce the number of workers at workplace.

MECHANISMS TO ENGAGE WITH MANAGEMENT

QC has a few mechanism or platforms in place which enable employees to engage with the Management. These include an open-door policy, coffee-talk session and discussion session.

Directors’ Report and Audited Financial Statements

38Directors’ Report

54Statements of Financial Position

62Notes to the Financial Statements

43Statement by Directors and Statutory Declaration

56Consolidated Statement of Changes in Equity

44Independent Auditors’ Report

58Company Statement of Changes in Equity

52Statements of Profit or Loss and Other Comprehensive Income

59Statements of Cash Flows


Directors’ Report

- 1 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad (Incorporated in Malaysia) Directors’ Report The directors hereby present their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 January 2021. Principal activities The principal activities of the Company are that of investment holding and the provision of management services. The principal activities of the subsidiaries are set out in Note 17 to the financial statements. There have been no significant changes in the nature of the principal activities during the financial year. Results Group Company RM’000 RM’000 Profit/(loss) for the year 375 (47) ===== ===== Profit/(loss) for the year attributable to: - Owners of the Company (1,956) (47) - Non-controlling interests 2,331 - –––––– –––––– 375 (47) ===== ===== In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature. Reserves and provisions There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements. Dividends No dividend has been paid or declared by the Company since the end of the previous financial year. The directors do not recommend any dividend payment in respect of the current financial year.


Directors’ Report (Contd.)

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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad (Incorporated in Malaysia) Directors’ Report Directors The directors of the Company in office since the beginning of the financial year to the date of this report are: Directors of the Company: Felix Wong Khung Chui Ha Tiuen Kiong (Also a director of a subsidiary) Pang Kim Soo Tiang Ching Kok (Also a director of certain subsidiaries) Paul Chiam Tau Keen (Also a director of certain subsidiaries) Lynda Chong Hui Lyn The directors of the Company’s subsidiaries in office since the beginning of the financial year and up to the date of this report (not including those directors listed above) are: Chin Yoke Lian Datuk Hajjah Raziah @ Rodiah Binti Mahmud Datin Ha Ai Ing David Goh Hong Chiang Kua Boo Tua Lee Ho Jin Tiang Chiin Ling Tiang Chiin Yew Ramon @ Raymond bin Taki Noor Fazlina binti Ramli Chai Ming Yung George Tang Yuon (Appointed on 14 May 2020) Irene Lau Meng Ing (Appointed on 14 May 2020) Sia Yuk Ching (Appointed on 14 May 2020 and resigned on

19 August 2020) Directors’ benefits Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.



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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad (Incorporated in Malaysia) Directors’ Report Directors’ benefits (contd.) 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 below) by reason of a contract made by the Company or a related corporation with a director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest, except as disclosed in Note 33 to the financial statements. Directors’ remunerations Details of directors’ remunerations for the financial year are disclosed in Note 9 to the financial statements. Directors’ interests According to the Register of Directors’ Shareholdings required to be kept under Section 59 of the Companies Act 2016, the interest of a director in office at the end of the financial year in shares in the Company or its related corporations during the financial year was as follows: Number of ordinary shares At 1 February 2020 and 31 January 2021 Direct interest: Tiang Ching Kok 3,282,500 Indirect interest*: Tiang Ching Kok 14,726,500 * Deemed interest pursuant to Section 59(11)(c) of the Companies Act 2016. None of the other directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year. Indemnification of directors and officers No indemnity was given to or insurance effected for any director and officers of the Group and of the Company during the financial year. No payment was made for any indemnification during or since the financial year and up to the date of this report.



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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad (Incorporated in Malaysia) Directors’ Report Other statutory information (a) Before the statements of profit or loss and other comprehensive income and statements of

financial position of the Group and of the Company were made out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad

debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; 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.

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

render: (i) the amount written off for bad debts or the amount of the allowance for doubtful

debts in the financial statements of the Group and of the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group

and of the Company misleading. (c) At the date of this report, the directors are not aware of any circumstances which have

arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise

dealt with in this report or 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 year which secures the liabilities of any other person; or (ii) any contingent liability of the Group or of the Company which has arisen since

the end of the financial year.



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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad (Incorporated in Malaysia) Directors’ Report Other statutory information (contd.) (f) In the opinion of the directors: (i) no contingent or other liability has become enforceable or is likely to become

enforceable within the period of twelve months after the end of the financial year which will or may substantially affect the ability of the Group or of the Company to meet their obligations as and when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the

interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made.

Significant event Details of significant event are disclosed in Note 38 to the financial statements. Auditors The auditors, Ernst & Young PLT, have expressed their willingness to continue in office. Auditors’ remunerations are disclosed in Note 7 to the financial statements. To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young PLT, as part of the terms of its audit engagement against claims by third parties arising from the audit for an unspecified amount. No payment has been made to indemnify Ernst & Young PLT for the financial year 31 January 2021 and up to the date of this report. Signed on behalf of the Board in accordance with a resolution of the directors dated Tiang Ching Kok Paul Chiam Tau Keen

23 June 2021.


Statutory DeclarationPursuant to Section 251(1)(B) of The Companies Act 2016

Statement by DirectorsPursuant to Section 251(2) of The Companies Act 2016

We, Tiang Ching Kok and Paul Chiam Tau Keen, being two of the directors of Quality Concrete Holdings Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 52 to 175 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 January 2021 and of their financial performances and their cash flows for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the directors dated 23 June 2021.

Tiang Ching Kok Paul Chiam Tau Keen

I, Paul Chiam Tau Keen, being the director primarily responsible for the financial management of Quality Concrete Holdings Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 52 to 175 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed Paul Chiam Tau Keenat Kuching in the State of Sarawak on 23 June 2021. Paul Chiam Tau Keen (MIA 14900)

Before me,Tan Kee Heng(No. Q104)Commissioner For Oaths


Independent Auditors’ Report To The Members Of Quality Concrete Holdings Berhad (Incorporated In Malaysia)

Report on the audit of the financial statements

Opinion

We have audited the financial statements of Quality Concrete Holdings Berhad, which comprise the statements of financial position as at 31 January 2021 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 52 to 175.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 January 2021, and of their financial performance and their cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

Basis for opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence and other ethical responsibilities

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.


Independent Auditors’ ReportTo The Members Of Quality Concrete Holdings Berhad (Contd.)(Incorporated In Malaysia)

Report on the audit of the financial statements (contd.) Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current year. We have determined that there are no key audit matter to communicate in our report on the financial statements of the Company. The key audit matters for the audit of the financial statements of the Group are described below. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditors’ responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis of our audit opinion on the accompanying financial statements. We have identified two key audit matters as follows:

Revenue recognition relating to construction contracts

For the financial year ended 31 January 2021, the Group recorded revenue from construction contracts amounting to approximately RM42 million, representing 30% of the Group’s total revenue. The revenue relating to construction contracts may span more than one accounting period to complete and the scope of work may change during the construction period.

Revenue from construction contracts of the Group is measured using the input method, which is based on actual costs incurred for the work performed to the balance sheet date relative to the estimated total budgeted costs of the contract at completion, in accounting for the progress towards complete satisfaction of the Group’s performance obligation.

Management estimates the revenue and the budgeted costs at the inception of the contracts and regularly assesses the progress of the construction works as well as the financial impact arising from changes in scopes, claims, foreseeable losses and liquidated ascertained damages. The process to measure revenue and budgeted costs, including the determination of the appropriate timing of revenue recognition, involves significant management judgement and estimates and these factors may give rise to a risk of inappropriate recognition of revenue during the year. Considering the above, we determined this to be a key audit matter.



Report on the audit of the financial statements (contd.)

Key audit matters (contd.)

Revenue recognition relating to construction contracts (contd.)

Our audit procedures include, amongst others, the following:

- we obtained an understanding of the process and internal controls over the accuracy and timing of revenue recognised in the financial statements, including the controls maintained by management in estimating the total budgeted costs on each contract;

- we reviewed each contract and obtained an understanding of the salient terms and conditions of the contract;

- we evaluated the assumptions applied in estimating the budgeted costs for construction contracts by examining documentary evidence such as letters of award issued to contractors and bill of quantities to support the budgeted costs;

- we assessed the competency of the management’s experts involved in preparing the budgeted costs;

- we evaluated the determination of the progress towards complete satisfaction of the Group’s performance obligations by examining supporting evidence such as contractors’ progress claims;

- we assessed the financial implications arising from the potential delays in the execution of the contracts; and

- we have discussed with the respective key project team members to understand the status of the ongoing contracts.

The Group’s disclosures on revenue recognition are included in the summary of significant accounting policies in Note 2.23(b) to the financial statements, as well as the significant accounting judgements and estimates in Note 3.2(a) and the revenue recognised in Note 4 to the financial statements.



Key audit matters (contd.)

Impairment assessment of property, plant and equipment

As at 31 January 2021, the carrying value of property, plant and equipment of the Group was approximately RM52 million, representing 45% and 22% of the Group’s total non-current assets and total assets respectively. The Group is required to perform impairment test of the cash generating units (‘CGUs”) whenever there is an indication that the CGUs may be impaired by comparing the carrying amount with its recoverable amount. The Group estimated the recoverable amount as the higher of the CGU’s fair value less costs of disposal and its value in use (“VIU”). The management determined that there is an indication of impairment due to the market capitalisation of the Group being lower than the Group’s net assets.

We identified this as an area of audit focus, as the VIU determined using discounted cash flows is complex and involves significant management judgement and estimates, specifically the key assumptions on the sales and discount rate.

Our audit procedures include, amongst others, the following: - we obtained an understanding of the relevant internal controls over the estimation of the

recoverable amount of the CGUs;

- we evaluated the assumptions and methodologies used in performing the impairment assessment;

- we tested the basis of preparing the cash flow forecasts taking into account the historical evidence supporting the underlying assumptions;

- we evaluated the key assumptions, in particular, the weighted-average cost of capital discount rates assigned to the CGUs and growth rates of sales by comparing against internal information, and external economic and market data; and

- we also evaluated the adequacy of the disclosures of each key assumption on which the Group has based its cash flow projections. Key assumptions are those to which the recoverable amount is most sensitive, as disclosed in Note 3.2(b) to the financial statements.




Information other than the financial statements and auditors’ report thereon

The directors of the Company are responsible for the other information. The other information comprises the information included in the Directors’ Report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon, which we obtained prior to the date of this auditors’ report, and the annual report, which is expected to be made available to us after the date of this auditors’ report.

Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditors’ report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the directors of the Company and take appropriate action.

Responsibilities of the directors for the financial statements

The directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.




Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern.




Auditors’ responsibilities for the audit of the financial statements (contd.)

• Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial statements of the Group and of the Company for the current year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiary of which we have not acted as auditors, are disclosed in Note 17 to the financial statements.



Other matters

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

ERNST & YOUNG PLT LOW KHUNG LEONG202006000003 (LLP0022760-LCA) & AF 0039 No. 02697/01/2023 JChartered Accountants Chartered Accountant

Kuching, MalaysiaDate: 23 June 2021



Statements of Profit or Loss and Other Comprehensive Income For the Financial Year Ended 31 January 2021

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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Statements of Profit or Loss and Other Comprehensive Income For the financial year ended 31 January 2021 Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Revenue 4 141,734 132,820 1,750 750 Cost of sales (120,022) (111,794) - - ––––––– ––––––– –––––– –––––– Gross profit 21,712 21,026 1,750 750 Other income 5 3,159 1,210 645 902 Selling and marketing expenses (3,550) (5,252) - - Administrative expenses (9,563) (10,092) (1,234) (1,967) Other expenses (4,140) (4,068) (354) (463) ––––––– ––––––– –––––– –––––– Operating profit/(loss) 7,618 2,824 807 (778) Finance costs 6 (4,322) (4,546) (851) (1,191) Share of results of an associate 61 301 - - ––––––– ––––––– –––––– –––––– Profit/(loss) before tax 7 3,357 (1,421) (44) (1,969) Income tax expense 10 (2,982) (1,386) (3) - ––––––– ––––––– –––––– –––––– Profit/(loss) net of tax 375 (2,807) (47) (1,969) ––––––– ––––––– –––––– –––––– Other comprehensive (loss)/income Other comprehensive (loss)/income to be reclassified to profit or loss in subsequent periods*: Foreign currency translation 8 85 - - ––––––– ––––––– –––––– –––––– Total comprehensive income/(loss) for the year 383 (2,722) (47) (1,969) ====== ====== ===== ===== * There is no tax effect arising from each of the components of the other comprehensive income.


Statements of Profit or Loss and Other Comprehensive IncomeFor the Financial Year Ended 31 January 2021 (Contd.)

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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Statements of Profit or Loss and Other Comprehensive Income For the financial year ended 31 January 2021 (contd.) Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Profit/(loss) attributable to: Equity holders of the parent (1,956) (3,006) (47) (1,969) Non-controlling interests 2,331 199 - - ––––––– ––––––– –––––– –––––– 375 (2,807) (47) (1,969) ====== ====== ===== ===== Total comprehensive income/(loss) for the year Equity holders of the parent (1,948) (2,921) (48) (1,969) Non-controlling interests 2,331 199 - - ––––––– ––––––– –––––– –––––– 383 (2,722) (48) (1,969) ====== ====== ===== ===== Loss per share attributable to equity holders of the parent (sen): Basic and diluted 11 (3.37) (5.19) ===== ==== The accompanying accounting policies and explanatory notes form an integral part of the financial statements.


Statements of Financial Positionas at 31 January 2021

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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Statements of Financial Position As at 31 January 2021 Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 ASSETS Non-current assets Property, plant and equipment 12 52,484 54,025 321 556 Land held for property development 14 41,594 41,594 - - Investment properties 15 16,237 16,376 2,606 2,659 Investment in subsidiaries 17 - - 117,246 117,246 Investment in associate 18 446 535 - - Other investments 20 487 486 - - Deferred tax asset 29 704 209 - - Trade and other receivables 22 3,435 4,328 - - ––––––– ––––––– ––––––– ––––––– 115,387 117,553 120,173 120,461 ––––––– ––––––– ––––––– ––––––– Current assets Other investments 20 433 424 77 76 Inventories 21 38,848 35,663 - - Trade and other receivables 22 49,155 42,964 25,308 25,239 Other current assets 23 20,966 8,432 - - Tax recoverable 500 1,113 9 16 Cash and bank balances 26 9,801 11,763 115 121 ––––––– ––––––– ––––––– ––––––– 119,703 100,359 25,509 25,452 ––––––– ––––––– ––––––– ––––––– TOTAL ASSETS 235,090 217,912 145,682 145,913 ====== ====== ====== ====== EQUITY AND LIABILITIES Current liabilities Loans and borrowings 27 62,911 68,796 11,132 16,062 Trade and other payables 28 63,684 35,541 14,003 9,193 Contract liabilities 24 - 4,975 - - Income tax payable 2,249 849 - - ––––––– ––––––– ––––––– ––––––– 128,844 110,161 25,135 25,255 ––––––– ––––––– ––––––– –––––––

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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Statements of Financial Position As at 31 January 2021 (contd.) Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 EQUITY AND LIABILITIES (CONTD.) Non-current liabilities Loans and borrowings 27 4,949 6,263 167 231 Deferred tax liabilities 29 1,547 1,651 - - ––––––– ––––––– ––––––– ––––––– 6,496 7,914 167 231 ––––––– ––––––– ––––––– ––––––– TOTAL LIABILITIES 135,340 118,075 25,302 25,486 ––––––– ––––––– ––––––– ––––––– Equity attributable to owners of the Company Share capital 30 82,956 82,956 82,956 82,956 Other reserves 31 490 482 - - Retained earnings 13,644 15,600 37,424 37,471 ––––––– ––––––– ––––––– ––––––– 97,090 99,038 120,380 120,427 Non-controlling interests 2,660 799 - - ––––––– ––––––– ––––––– ––––––– TOTAL EQUITY 99,750 99,837 120,380 120,427 ––––––– ––––––– ––––––– ––––––– TOTAL EQUITY AND LIABILITIES 235,090 217,912 145,682 145,913 ====== ====== ====== ====== Net current (liabilities)/assets (9,141) (9,802) 374 197 Net assets 99,750 99,837 120,380 120,427 ====== ====== ====== ====== The accompanying accounting policies and explanatory notes form an integral part of the financial statements.


Statements of Financial Positionas at 31 January 2021 (Contd.)

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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Statements of Financial Position As at 31 January 2021 (contd.) Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 EQUITY AND LIABILITIES (CONTD.) Non-current liabilities Loans and borrowings 27 4,949 6,263 167 231 Deferred tax liabilities 29 1,547 1,651 - - ––––––– ––––––– ––––––– ––––––– 6,496 7,914 167 231 ––––––– ––––––– ––––––– ––––––– TOTAL LIABILITIES 135,340 118,075 25,302 25,486 ––––––– ––––––– ––––––– ––––––– Equity attributable to owners of the Company Share capital 30 82,956 82,956 82,956 82,956 Other reserves 31 490 482 - - Retained earnings 13,644 15,600 37,424 37,471 ––––––– ––––––– ––––––– ––––––– 97,090 99,038 120,380 120,427 Non-controlling interests 2,660 799 - - ––––––– ––––––– ––––––– ––––––– TOTAL EQUITY 99,750 99,837 120,380 120,427 ––––––– ––––––– ––––––– ––––––– TOTAL EQUITY AND LIABILITIES 235,090 217,912 145,682 145,913 ====== ====== ====== ====== Net current (liabilities)/assets (9,141) (9,802) 374 197 Net assets 99,750 99,837 120,380 120,427 ====== ====== ====== ====== The accompanying accounting policies and explanatory notes form an integral part of the financial statements.


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Company Statementof Changes In EquityFor The Financial Year Ended 31 January 2021

- 22 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Company Statement of Changes in Equity For the financial year ended 31 January 2021 Share Retained Total capital earnings equity (Note 30) RM’000 RM’000 RM’000 Company At 1 February 2020 82,956 37,471 120,427 Total comprehensive loss - (47) (47) –––––– –––––– ––––––– At 31 January 2021 82,956 37,424 120,380 ===== ===== ====== At 1 February 2019 82,956 39,440 122,396 Total comprehensive loss - (1,969) (1,969) –––––– –––––– ––––––– At 31 January 2020 82,956 37,471 120,427 ===== ===== ======

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

- 23 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Statements of Cash Flows For the financial year ended 31 January 2021 Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Cash flows from operating activities Profit/(loss) before tax 3,357 (1,421) (44) (1,969) Adjustments for: Amortisation of properties held for sale 7 11 22 - - Bad debts written off 7 20 73 - - Depreciation of property, plant and equipment 7 5,859 5,869 237 429 Depreciation of investment properties 7 139 132 53 53 Dividend income 4,5 (9) (15) (1,750) (752) Fair value changes in other investment 5 (1) - (1) - Gain on disposal of property, plant and equipment 5 (4) (4) - - Gain on disposal of properties held for sale 5 - (10) - - Impairment loss on investment in subsidiary 7 - - - 281 Impairment loss on: - trade receivables 7 152 710 - - - other receivables 7 38 - - - Interest income 5 (15) (148) (376) (677) Interest expense 6 4,155 4,253 799 1,185 Inventories written off 7 778 174 - - Net unrealised foreign exchange gain 7 (21) (35) - - Property, plant and equipment written off 7 18 8 - - Reversal of impairment loss on: - trade receivables (Note 22(a)) 5 (616) (268) - - - other receivables (Note 22(c)) 5 - (2) - - Share of results of an associate (61) (301) - - –––––– –––––– –––––– ––––––


- 22 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Company Statement of Changes in Equity For the financial year ended 31 January 2021 Share Retained Total capital earnings equity (Note 30) RM’000 RM’000 RM’000 Company At 1 February 2020 82,956 37,471 120,427 Total comprehensive loss - (47) (47) –––––– –––––– ––––––– At 31 January 2021 82,956 37,424 120,380 ===== ===== ====== At 1 February 2019 82,956 39,440 122,396 Total comprehensive loss - (1,969) (1,969) –––––– –––––– ––––––– At 31 January 2020 82,956 37,471 120,427 ===== ===== ======

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

- 23 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Statements of Cash Flows For the financial year ended 31 January 2021 Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Cash flows from operating activities Profit/(loss) before tax 3,357 (1,421) (44) (1,969) Adjustments for: Amortisation of properties held for sale 7 11 22 - - Bad debts written off 7 20 73 - - Depreciation of property, plant and equipment 7 5,859 5,869 237 429 Depreciation of investment properties 7 139 132 53 53 Dividend income 4,5 (9) (15) (1,750) (752) Fair value changes in other investment 5 (1) - (1) - Gain on disposal of property, plant and equipment 5 (4) (4) - - Gain on disposal of properties held for sale 5 - (10) - - Impairment loss on investment in subsidiary 7 - - - 281 Impairment loss on: - trade receivables 7 152 710 - - - other receivables 7 38 - - - Interest income 5 (15) (148) (376) (677) Interest expense 6 4,155 4,253 799 1,185 Inventories written off 7 778 174 - - Net unrealised foreign exchange gain 7 (21) (35) - - Property, plant and equipment written off 7 18 8 - - Reversal of impairment loss on: - trade receivables (Note 22(a)) 5 (616) (268) - - - other receivables (Note 22(c)) 5 - (2) - - Share of results of an associate (61) (301) - - –––––– –––––– –––––– ––––––

Statements of Cash Flows For The Financial Year Ended 31 January 2021


Statements of Cash Flows For The Financial Year Ended 31 January 2021 (Contd.)

- 24 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Statements of Cash Flows For the financial year ended 31 January 2021 (contd.) Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Cash flows from operating activities (contd.) Operating profit/(loss) before working capital changes 13,800 9,037 (1,082) (1,450) Increase in land held for property development and property development costs - (664) - - (Increase)/decrease in inventories (3,963) 3,708 - - Increase/(decrease) in receivables (4,892) (6,124) 1,705 (42) Increase in other current assets (12,545) (4,056) - - (Decrease)/increase in contract liabilities (4,975) 4,975 - - Increase in payables 28,164 5,981 171 25 –––––– –––––– –––––– –––––– Cash generated from/(used in) operations 15,589 12,857 794 (1,467) Interest paid (4,155) (4,253) (799) (1,185) Taxes paid, net of refund (1,567) (547) 4 16 –––––– –––––– –––––– –––––– Net cash generated from/(used in) operating activities 9,867 8,057 (1) (2,636) –––––– –––––– –––––– –––––– Cash flows from investing activities Acquisition of property, plant and equipment 12(e) (2,642) (816) (2) - Acquisition of investment property - (1,200) - - Dividends received 150 - - - Interest received 15 148 376 2 Proceeds from disposal of property, plant and equipment 5 5 - - Proceeds from disposal of properties held for sale - 1,399 - - Proceeds from issuance of shares to non-controlling interest 279 240 - - Dividend paid to non-controlling interest (750) - - - –––––– –––––– ––––––– –––––– Net cash (used in)/generated from investing activities (2,943) (224) 374 2 –––––– –––––– ––––––– ––––––

- 25 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Statements of Cash Flows For the financial year ended 31 January 2021 (contd.) Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Cash flows from financing activities (Increase)/decrease in amount due from subsidiary companies - - (25) 844 Increase in amount due to subsidiary companies - - 4,640 6,861 Repayment of lease liabilities (2,144) (2,448) (61) (57) Repayment of term loan (1,892) (1,248) - - Repayment of revolving credit (5,000) (5,000) (5,000) (5,000) Net drawdown of bankers’ acceptances 231 8,842 - - –––––– –––––– –––––– –––––– Net cash (used in)/generated from financing activities (8,805) 146 (446) 2,648 –––––– –––––– –––––– –––––– Net (decrease)/increase in cash and cash equivalents (1,881) 7,979 (73) 14 Effect of exchange rate changes (1) 95 - - Cash and cash equivalents at 1 February (1,702) (9,776) (5,380) (5,394) –––––– –––––– –––––– –––––– Cash and cash equivalents at 31 January 26 (3,584) (1,702) (5,453) (5,380) ===== ===== ===== ===== The accompanying accounting policies and explanatory notes form an integral part of the financial statements.


Notes to the Financial StatementsFor The Financial Year Ended 31 January 2021

- 26 -

Registration No: 199601005936 (378282-D)

Quality Concrete Holdings Berhad

Notes to the Financial Statements For the financial year ended 31 January 2021

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 and principal place of business is located at Room 209, 2nd Floor, Wisma Bukit Mata Kuching, Jalan Tunku Abdul Rahman, 93100 Kuching.

The principal activities of the Company are that of investment holding and the provision

of management services. The principal activities of the subsidiaries are set out in Note 17. There have been no significant changes in the nature of the principal activities during the financial year.

2. Basis of preparation and summary of significant accounting policies

2.1 Basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards (“IFRS”) and the requirements of the Companies Act 2016 in Malaysia. These financial statements have also been prepared on the historical cost basis except otherwise disclosed in the accounting policies below. The Group and the Company adhered to the same policies disclosed below unless otherwise stated. These financial statements are presented in Ringgit Malaysia (“RM”) and all values are rounded to the nearest thousand (“RM’000”) except when otherwise indicated. 2.2 Changes in accounting policies

On 1 January 2020, the Group and the Company adopted the following amendments which are effective for annual periods beginning on or after 1 January 2020. Effective for annual periods beginning Description on or after Amendments to MFRS 3: Definition of a Business 1 January 2020 Amendments to MFRS 9, MFRS 139 and MFRS 7 Interest Rate Benchmark Reform 1 January 2020 Amendments to MFRS 101 and MFRS 108: Definition of Material 1 January 2020 Amendments to References to the Conceptual Framework in MFRS Standards 1 January 2020

- 27 -




2. Basis of preparation and summary of significant accounting policies (contd.)

2.2 Changes in accounting policies

Effective for annual periods beginning Description on or after Amendments to MFRS 4, Extension of the Temporary Exemption from Applying MFRS 9 1 January 2020 Adoption of these amendments did not have any material effect on the financial performance or position of the Group and of the Company.

2.3 Standards issued but not yet effective

The standards and interpretations that are issued but not yet effective up to the

date of issuance of the Group’s and the Company’s financial statements are disclosed below. The Group and the Company intend to adopt these standards, if applicable, when they become effective.

Effective for annual periods beginning Description on or after Amendment to MFRS 16: Covid-19-Related Rent Concessions 1 June 2020 Amendments to MFRS 9, MFRS 139, MFRS 7, MFRS 4 and MFRS 16: Interest Rate Benchmark Reform - Phase 2 1 January 2021 Amendment to MFRS 16: Covid-19-Related Rent Concessions beyond 30 June 2021 1 April 2021 Amendments to MFRS 3: Reference to the Conceptual Framework 1 January 2022 Amendments to MFRS 116: Property, Plant and Equipment - Proceeds before Intended Use 1 January 2022 Amendments to MFRS 137: Onerous Contracts - Cost of Fulfilling a Contract 1 January 2022 Annual Improvements to MFRS Standards 2018 - 2020 1 January 2022 MFRS 17: Insurance Contracts 1 January 2023 Amendments to MFRS 17: Insurance Contracts 1 January 2023 Amendments to MFRS 101: Classification of Liabilities as Current or Non-current 1 January 2023 Amendments to MFRS 101: Disclosure of Accounting Policies 1 January 2023 Amendments to MFRS 108: Definition of Accounting Estimates 1 January 2023 Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Deferred


- 26 -




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 and principal place of business is located at Room 209, 2nd Floor, Wisma Bukit Mata Kuching, Jalan Tunku Abdul Rahman, 93100 Kuching.

The principal activities of the Company are that of investment holding and the provision

of management services. The principal activities of the subsidiaries are set out in Note 17. There have been no significant changes in the nature of the principal activities during the financial year.

2. Basis of preparation and summary of significant accounting policies

2.1 Basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards (“IFRS”) and the requirements of the Companies Act 2016 in Malaysia. These financial statements have also been prepared on the historical cost basis except otherwise disclosed in the accounting policies below. The Group and the Company adhered to the same policies disclosed below unless otherwise stated. These financial statements are presented in Ringgit Malaysia (“RM”) and all values are rounded to the nearest thousand (“RM’000”) except when otherwise indicated. 2.2 Changes in accounting policies

On 1 January 2020, the Group and the Company adopted the following amendments which are effective for annual periods beginning on or after 1 January 2020. Effective for annual periods beginning Description on or after Amendments to MFRS 3: Definition of a Business 1 January 2020 Amendments to MFRS 9, MFRS 139 and MFRS 7 Interest Rate Benchmark Reform 1 January 2020 Amendments to MFRS 101 and MFRS 108: Definition of Material 1 January 2020 Amendments to References to the Conceptual Framework in MFRS Standards 1 January 2020

- 27 -





2.2 Changes in accounting policies

Effective for annual periods beginning Description on or after Amendments to MFRS 4, Extension of the Temporary Exemption from Applying MFRS 9 1 January 2020 Adoption of these amendments did not have any material effect on the financial performance or position of the Group and of the Company.

2.3 Standards issued but not yet effective

The standards and interpretations that are issued but not yet effective up to the

date of issuance of the Group’s and the Company’s financial statements are disclosed below. The Group and the Company intend to adopt these standards, if applicable, when they become effective.

Effective for annual periods beginning Description on or after Amendment to MFRS 16: Covid-19-Related Rent Concessions 1 June 2020 Amendments to MFRS 9, MFRS 139, MFRS 7, MFRS 4 and MFRS 16: Interest Rate Benchmark Reform - Phase 2 1 January 2021 Amendment to MFRS 16: Covid-19-Related Rent Concessions beyond 30 June 2021 1 April 2021 Amendments to MFRS 3: Reference to the Conceptual Framework 1 January 2022 Amendments to MFRS 116: Property, Plant and Equipment - Proceeds before Intended Use 1 January 2022 Amendments to MFRS 137: Onerous Contracts - Cost of Fulfilling a Contract 1 January 2022 Annual Improvements to MFRS Standards 2018 - 2020 1 January 2022 MFRS 17: Insurance Contracts 1 January 2023 Amendments to MFRS 17: Insurance Contracts 1 January 2023 Amendments to MFRS 101: Classification of Liabilities as Current or Non-current 1 January 2023 Amendments to MFRS 101: Disclosure of Accounting Policies 1 January 2023 Amendments to MFRS 108: Definition of Accounting Estimates 1 January 2023 Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Deferred

Notes to the Financial StatementsFor The Financial Year Ended 31 January 2021 (Contd.)



- 28 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 2. Basis of preparation and summary of significant accounting policies (contd.)

2.3 Standards issued but not yet effective (contd.)

The directors do not expect any material impact from the adoption of the above standards in the period of initial application.

2.4 Basis of consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied for like transactions and events in similar circumstances. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has: (i) power over the investee (i.e. existing rights that give it the current ability to

direct the relevant activities of the investee); (ii) exposure, or rights, to variable returns from its involvement with the

investee; and (iii) the ability to use its power over the investee to affect its returns. Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: (i) the contractual arrangement(s) with the other vote holders of the investee; (ii) rights arising from other contractual arrangements; and (iii) the Group’s voting rights and potential voting rights. The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

- 29 -


2.4 Basis of consolidation (contd.)

Profit or loss and each component of other comprehensive income (“OCI”) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value. Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses. The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.



- 28 -


2.3 Standards issued but not yet effective (contd.)

The directors do not expect any material impact from the adoption of the above standards in the period of initial application.

2.4 Basis of consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied for like transactions and events in similar circumstances. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has: (i) power over the investee (i.e. existing rights that give it the current ability to

direct the relevant activities of the investee); (ii) exposure, or rights, to variable returns from its involvement with the

investee; and (iii) the ability to use its power over the investee to affect its returns. Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: (i) the contractual arrangement(s) with the other vote holders of the investee; (ii) rights arising from other contractual arrangements; and (iii) the Group’s voting rights and potential voting rights. The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

- 29 -



Profit or loss and each component of other comprehensive income (“OCI”) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value. Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses. The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.



- 30 -



Business combinations and goodwill (contd.) When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of MFRS 9 Financial Instruments, is measured at fair value with the changes in fair value recognised in the statement of profit or loss in accordance with MFRS 9. Other contingent consideration that is not within the scope of MFRS 9 is measured at fair value at each reporting date with changes in fair value recognised in profit or loss. Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.

- 31 -


2.5 Current versus non-current classification

The Group presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is: • Expected to be realised or intended to be sold or consumed in the normal

operating cycle; • Held primarily for the purpose of trading; • Expected to be realised within twelve months after the reporting period; or • Cash or cash equivalent unless restricted from being exchanged or used to

settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current. A liability is current when: • It is expected to be settled in the normal operating cycle; • It is held primarily for the purpose of trading; • It is due to be settled within twelve months after the reporting period; or • There is no unconditional right to defer the settlement of the liability for at

least twelve months after the reporting period.

The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. The Group classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.



- 32 -


2.6 Subsidiaries

A subsidiary is an entity over which the Group has all the following: (a) Power over the investee (i.e existing rights that give it the current ability

to direct the relevant activities of the investee); (b) Exposure, or rights, to variable returns from its investment with the

investee; and (c) The ability to use its power over the investee to affect its returns. In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

2.7 Investments in associates

An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. The considerations made in determining significant influence are similar to those necessary to determine control over subsidiaries. The Group’s investment in its associate is accounted for using the equity method. Under the equity method, the investment in an associate is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets of the associate since the acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is not tested for impairment separately. The statement of profit or loss reflects the Group’s share of the results of operations of the associate. Any change in OCI of the associate is presented as part of the Group’s OCI. In addition, when there has been a change recognised directly in the equity of the associate, the Group recognises its share of any changes, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the associate are eliminated to the extent of the interest in the associate. The aggregate of the Group’s share of profit or loss of an associate is shown on the face of the statement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate.

- 33 -


2.7 Investments in associates (contd.)

The financial statements of the associate are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group. After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associate. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value, and then recognises the loss within ‘Share of profit of an associate and a joint venture’ in the statement of profit or loss. Upon loss of significant influence over the associate, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss. In the Company’s separate financial statements, investments in associates are accounted for at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

2.8 Foreign currencies

(a) Functional and presentation currency

The Group’s consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency. For each entity, the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency. The Group uses the direct method of consolidation and on disposal of a foreign operation, the gain or loss that is reclassified to profit or loss reflects the amount that arises from using this method.



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2.8 Foreign currency (contd.)

(b) Transactions and balances

Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognised in profit or loss with the exception of monetary items that are designated as part of the hedge of the Group’s net investment in a foreign operation. These are recognised in OCI until the net investment is disposed of, at which time, the cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those monetary items are also recognised in OCI. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively). In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Group initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Group determines the transaction date for each payment or receipt of advance consideration.

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(c) Group companies

On consolidation, the assets and liabilities of foreign operations are translated into RM at the rate of exchange prevailing at the reporting date and their statements of profit or loss are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in OCI. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is reclassified to profit or loss.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date.

2.9 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Subsequent to recognition, property, plant and equipment, except for freehold land, are measured at cost less accumulated depreciation and accumulated impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.



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(b) Transactions and balances

Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognised in profit or loss with the exception of monetary items that are designated as part of the hedge of the Group’s net investment in a foreign operation. These are recognised in OCI until the net investment is disposed of, at which time, the cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those monetary items are also recognised in OCI. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively). In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Group initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Group determines the transaction date for each payment or receipt of advance consideration.

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(c) Group companies

On consolidation, the assets and liabilities of foreign operations are translated into RM at the rate of exchange prevailing at the reporting date and their statements of profit or loss are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in OCI. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is reclassified to profit or loss.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date.

2.9 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Subsequent to recognition, property, plant and equipment, except for freehold land, are measured at cost less accumulated depreciation and accumulated impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.



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2.9 Property, plant and equipment (contd.) Freehold land has unlimited useful lives and therefore is not amortised. Leasehold land is amortised over their lease terms. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets at the following rates:

Buildings 2% - 25% Quarry reserve 5% Plant, machinery and operating equipment 6.67% - 25% Motor vehicles 10% - 25% Office furniture and equipment 10% - 33.3% Barges 10% Renovation 10%

Work-in-progress is not depreciated as these assets are not available for use. The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised. A contract which involves the use of an item of property, plant and equipment that meets the definition of a lease is recognised as a right-of-use asset.

2.10 Land held for property development and property development costs

(a) Land held for property development

Land held for property development consists of land on which no significant development work has been undertaken other than earthwork, infrastructure work and professional fees incurred to put the land ready for development or where development activities are not expected to be completed within the normal operating cycle. Included in land held for property development consists of leasehold land that meet the definition of right-of-use asset.

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(contd.)

(a) Land held for property development (contd.)

Land held for property development is classified as non-current asset and is stated at the lower of cost and net realisable value.

Costs associated with the acquisition of land include the purchase price of

the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies.

Net realisable value is the estimated selling price in the ordinary course of

business, less the costs of completion and applicable variable selling expenses.

Land held for property development is transferred to property development

costs (under current assets) when development activities have commenced and where the development activities can be completed within the Group’s normal operating cycle.

(b) Property development costs

Property development costs that meet the definition of inventories are recognised as an asset and are stated at the lower of cost and net realisable value. Such inventory costs are determined based on a specific identification basis. Property development costs comprise costs of land, direct materials, direct labour, other direct costs, attributable overheads and payments to subcontractors. Leasehold land that are included in property development costs meets the definition of right-of-use asset. Incremental costs of obtaining a contract with a customer are recognised as assets if the entity expects to recover those costs. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognised as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.



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2.9 Property, plant and equipment (contd.) Freehold land has unlimited useful lives and therefore is not amortised. Leasehold land is amortised over their lease terms. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets at the following rates:

Buildings 2% - 25% Quarry reserve 5% Plant, machinery and operating equipment 6.67% - 25% Motor vehicles 10% - 25% Office furniture and equipment 10% - 33.3% Barges 10% Renovation 10%

Work-in-progress is not depreciated as these assets are not available for use. The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised. A contract which involves the use of an item of property, plant and equipment that meets the definition of a lease is recognised as a right-of-use asset.


(a) Land held for property development

Land held for property development consists of land on which no significant development work has been undertaken other than earthwork, infrastructure work and professional fees incurred to put the land ready for development or where development activities are not expected to be completed within the normal operating cycle. Included in land held for property development consists of leasehold land that meet the definition of right-of-use asset.

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(contd.)

(a) Land held for property development (contd.)

Land held for property development is classified as non-current asset and is stated at the lower of cost and net realisable value.

Costs associated with the acquisition of land include the purchase price of

the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies.

Net realisable value is the estimated selling price in the ordinary course of

business, less the costs of completion and applicable variable selling expenses.

Land held for property development is transferred to property development

costs (under current assets) when development activities have commenced and where the development activities can be completed within the Group’s normal operating cycle.

(b) Property development costs

Property development costs that meet the definition of inventories are recognised as an asset and are stated at the lower of cost and net realisable value. Such inventory costs are determined based on a specific identification basis. Property development costs comprise costs of land, direct materials, direct labour, other direct costs, attributable overheads and payments to subcontractors. Leasehold land that are included in property development costs meets the definition of right-of-use asset. Incremental costs of obtaining a contract with a customer are recognised as assets if the entity expects to recover those costs. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognised as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.



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(contd.)

(b) Property development costs (contd.)

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and applicable variable selling expenses. The asset is subsequently recognised as an expense in profit or loss when or as the control of the asset is transferred to the customer over time or at a point in time. Where revenue recognised in profit or loss exceeds billings to purchasers, the balance is shown as contract assets under other current assets. Where billings to purchasers exceed revenue recognised in profit or loss, the balance is shown as contract liabilities under other current liabilities.

2.11 Investment properties

Investment properties are properties which are held either to earn rental income or for capital appreciation or both and are accounted for using the cost model. These include land held for a currently undetermined future use. Properties that are occupied by the companies in the Group are accounted for as owner-occupied rather than as investment properties. Investment properties are stated at cost less accumulated depreciation and impairment losses consistent with the accounting policies for property, plant and equipment. Investment properties are derecognised when either they have been disposed of (i.e., at the date the recipient obtains control) or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of derecognition. In determining the amount of consideration from the derecognition of investment property the Group considers the effects of variable consideration, existence of a significant financing component, non-cash consideration, and consideration payable to the buyer (if any). Transfers are made to (or from) investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. If owner-occupied property becomes an investment property, the Group accounts for such property in accordance with the policy stated under property, plant and equipment up to the date of change in use.

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2.12 Impairment of non-financial assets

The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash generating unit’s (“CGU”) fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. 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. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. The Group bases its impairment calculation on most recent budgets and forecast calculations, which are prepared separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. A long-term growth rate is calculated and applied to project future cash flows after the fifth year. Impairment losses of continuing operations are recognised in the statement of profit or loss in expense categories consistent with the function of the impaired asset.



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2.12 Impairment of non-financial assets (contd.)

For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit or loss. Goodwill is tested for impairment annually as at the reporting date and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods. Intangible assets with indefinite useful lives are tested for impairment annually as at the reporting date at the CGU level, as appropriate, and when circumstances indicate that the carrying value may be impaired.

2.13 Inventories

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

- Raw materials: purchase costs on a weighted average cost method. - Consumables: purchase costs on a weighted average cost method. - Finished goods and work-in-progress: costs of direct materials and

labour and a proportion of manufacturing overheads based on normal operating capacity. These costs are assigned on a weighted average cost

method. - Properties held for sale: cost associated with the acquisition of land,

direct costs and appropriate proportions of common costs.

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

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2.14 Contract assets and liabilities

A contract asset is initially recognised for revenue earned from construction contracts because the receipt of consideration is conditional on the rate of the construction work performed. Upon progress billings raised and acceptance by the customer, the amount recognised as contract assets is reclassified to trade receivables. Contract assets are subject to impairment assessment.

A contract liability is recognised if a payment is received or a payment is due (whichever is earlier) from a customer before the Group transfers the related goods or services. Contract liabilities are recognised as revenue when the Group performs under the contract (i.e., transfers control of the related goods or services to the customer).

(a) Incremental cost of obtaining a contract

The Group recognises incremental costs of obtaining contracts when the Group expects to recover these costs. These costs are expensed to the profit or loss in accordance with the rate of completion of the contract works.

(b) Cost to fulfil a contract

The Group recognises a contract cost that relates directly to a contract or to an anticipated contract as an asset when the cost generates or enhances resources of the Group, will be used in satisfying performance obligations in the future and it is expected to be recovered.

These contract costs are initially measured at cost and amortised on a systematic basis that is consistent with the pattern of revenue recognition to which the asset relates. An impairment loss is recognised in the profit or loss when the carrying amount of the contract cost exceeds the expected revenue less expected loss that will be incurred. Where the impairment condition no longer exists or has improved, the impairment loss is reversed to the extent that the carrying amount of the contract cost does not exceed the amount that would have been recognised had there been no impairment loss recognised previously.



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Notes to the Financial Statements For the financial year ended 31 January 2021 2. Basis of preparation and summary of significant accounting policies (contd.)

2.15 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(a) Financial assets

Initial recognition and measurement Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortised cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at fair value through OCI are held within a business model with the objective of both holding to collect contractual cash flows and selling.

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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad



2.15 Financial instruments (contd.)

(a) Financial assets (contd.)

Initial recognition and measurement (contd.)

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset. Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories: • Financial assets at amortised cost (debt instruments) • Financial assets at fair value through OCI with recycling of

cumulative gains and losses (debt instruments) • Financial assets designated at fair value through OCI with no

recycling of cumulative gains and losses upon derecognition (equity instruments)

• Financial assets at fair value through profit or loss

(i) Financial assets at amortised cost (debt instruments)

Financial assets at amortised cost are subsequently measured using the effective interest rate (“EIR”) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

(ii) Fair value through profit or loss (“FVTPL”)

Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss. This category includes derivative instruments and listed equity investments which the Group had not irrevocably elected to classify at fair value through OCI. Dividends on listed equity investments are recognised as other income in the statement of profit or loss when the right of payment has been established.



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2.15 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(a) Financial assets

Initial recognition and measurement Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortised cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at fair value through OCI are held within a business model with the objective of both holding to collect contractual cash flows and selling.

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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad





Initial recognition and measurement (contd.)

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset. Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories: • Financial assets at amortised cost (debt instruments) • Financial assets at fair value through OCI with recycling of

cumulative gains and losses (debt instruments) • Financial assets designated at fair value through OCI with no

recycling of cumulative gains and losses upon derecognition (equity instruments)

• Financial assets at fair value through profit or loss

(i) Financial assets at amortised cost (debt instruments)

Financial assets at amortised cost are subsequently measured using the effective interest rate (“EIR”) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

(ii) Fair value through profit or loss (“FVTPL”)

Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss. This category includes derivative instruments and listed equity investments which the Group had not irrevocably elected to classify at fair value through OCI. Dividends on listed equity investments are recognised as other income in the statement of profit or loss when the right of payment has been established.



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Subsequent measurement (contd.)

(iii) Fair value through OCI (debt instruments)

For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment losses or reversals are recognised in the statement of profit or loss and computed in the same manner as for financial assets measured at amortised cost. The remaining fair value changes are recognised in OCI. Upon derecognition, the cumulative fair value change recognised in OCI is recycled to profit or loss.

(iv) Fair value through OCI (equity instruments)

Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI when they meet the definition of equity under MFRS 132 Financial Instruments: Presentation and are not held for trading. The classification is determined on an instrument-by- instrument basis. Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the statement of profit or loss when the right of payment has been established, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment.

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(b) Financial liabilities

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. Subsequent to initial recognition, financial liabilities are classified in the following categories:

(i) Fair value through profit or loss (“FVTPL”)

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the statement of profit or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in MFRS 9 are satisfied.

(ii) Amortised cost (loans and borrowings)

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.



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(c) Derecognition

Financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the statements of financial position) when: • the rights to receive cash flows from the asset have expired; or • the Group has transferred its rights to receive cash flows from the

asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of its continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

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(c) Derecognition (contd.)

Financial liabilities

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

(d) Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group currently has a legally enforceable right to set off the amount and it intends either to settle them on a net basis or to realise the asset and liability simultaneously.

2.16 Impairment of financial assets

The Group recognises an allowance for expected credit losses (“ECL”) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).



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2.16 Impairment of financial assets (contd.)

For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

2.17 Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: • In the principal market for the asset or liability; or • In the absence of a principal market, in the most advantageous market for

the asset or liability

The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

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Notes to the Financial Statements For the financial year ended 31 January 2021 2. Basis of preparation and summary of significant accounting policies (contd.) 2.17 Fair value measurement (contd.)

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

• Level 1 inputs are quoted prices (unadjusted) in active markets for

identical assets or liabilities that the entity can access at the measurement date;

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

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

For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. At each reporting date, the Group analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Group’s accounting policies. For this analysis, the Group verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents. The Group also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable. For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.



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2. Basis of preparation and summary of significant accounting policies (contd.) 2.18 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the Group’s and of the Company’s cash management.

For the purpose of the statements of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of cash management.

2.19 Provisions

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

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

2.20 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

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2.21 Leases

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. (a) As a lessee

The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. (i) Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:

Buildings 1 to 10 years Leasehold land 4 to 58 years Plant and machinery 3 years Motor vehicles 7 to 8 years

If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment.



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2.21 Leases (contd.)

(a) As a lessee (contd.)

(ii) Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

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(iii) Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

(b) As a lessor

Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

2.22 Financial guarantee contracts

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

Financial guarantees issued are initially measured at fair value. Subsequently, they are measured at higher of:

• the amount of the loss allowance; and • the amount in accordance to the principles of MFRS 15.

Liabilities arising from financial guarantees are presented together with other provisions.



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(ii) Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

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(iii) Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

(b) As a lessor

Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

2.22 Financial guarantee contracts

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

Financial guarantees issued are initially measured at fair value. Subsequently, they are measured at higher of:

• the amount of the loss allowance; and • the amount in accordance to the principles of MFRS 15.

Liabilities arising from financial guarantees are presented together with other provisions.



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2.23 Revenue

Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.

Revenue is recognised when the Group satisfies a performance obligation by transferring a promised good and service to the customer, which is when the customer obtains control of the good or service. A performance obligation may be satisfied at a point in time or over time. The amount of revenue recognised is the amount allocated to the satisfied performance obligation.

(a) Sale of goods

Revenue from sale of goods is measured based on the consideration specified in a contract with a customer in exchange for transferring goods to a customer, excluding amounts collected on behalf of third parties. The Group recognises revenue when (or as) it transfers control over a product to customer. An asset is transferred when (or as) the customer obtains control over the asset.

The Group transfers control of a good at a point in time unless one of the following over time criteria is met:

• the customer simultaneously receives and consumes the benefits

provided as the Group performs; • the performance creates or enhances an asset that the customer

controls as the asset is created or enhanced; or • the performance does not create an asset with an alternative use and

the Group has an enforceable right to payment for performance completed to-date.

(b) Construction contracts

Revenue is recognised progressively based on the percentage of completion determined by the construction and other costs incurred to date as a proportion of the estimated total construction and other costs to be incurred.

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

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2.23 Revenue (contd.) (b) Construction contracts (contd.)

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

Contract revenue comprises the initial amount of revenue agreed in the contract and variations in the contract work and claims that can be measured reliably. A variation or a claim is only included in contract revenue when it is probable that the customer will approve the variation or negotiations have reached an advanced stage such that it is probable that the customer will accept the claim. Variation claim gives rise to a variable consideration which are estimated at either the expected value or most likely amount and included in revenue to the extent that it is highly probable that the revenue will not be reversed. No element of financing is deemed present as the payment schedule and credit terms of 30 days to 180 days are consistent with the market practice.

(c) Property development

Contracts with customers may include multiple promises to customers and therefore accounted for as separate performance obligations. In this case, the transaction price will be allocated to each performance obligation based on the standalone selling prices. When these are not directly observable, they are estimated based on expected cost plus margin.

Revenue from property development is recognised as and when the control of the asset is transferred to the customer and it is probable that the Group will collect the consideration to which it will be entitled in exchange for the asset that will be transferred to the customer. Depending on the terms of the contract and the laws that apply to the contract, control of the asset may transfer over time or at a point in time. Control of the asset is transferred over time if the Group’s performance does not create an asset with an alternative use to the Group has an enforceable right to payment for performance completed to date.

If control of the asset transfers over time, revenue is recognised over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognised at a point in time when the customer obtains control of the asset.



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2.23 Revenue (contd.) (c) Property development (contd.)

The Group recognises revenue over time using the input method based on the construction and other costs incurred to date as a proportion of the estimated total construction and other costs to be incurred.

The Group recognises revenue at a point in time for the sale of completed properties, when the control of the properties has been delivered to the customers, being when the properties are delivered to the customers.

(d) Dividend income Dividend income is recognised when the right to receive payment is

established. (e) Interest income Interest income is recognised on an accrual basis using the effective

interest method.

(f) Rental income Rental income is recognised on a straight line basis over the tenure of the lease.

2.24 Taxes

(a) Income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income. Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. .

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2.24 Taxes (contd.)

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised for all taxable differences, except: - where the deferred tax liability arises from the initial recognition of

goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of taxable temporary differences associated with investments in subsidiaries and associates, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

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

- where the deferred tax asset relating to the deductible temporary

difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries and associates, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.



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2.24 Taxes (contd.)

(b) Deferred tax (contd.)

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

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

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognised subsequently if new information about facts and circumstances change. The adjustment is either treated as a reduction in goodwill (as long as it does not exceed goodwill) if it was incurred during the measurement period or recognised in profit or loss.

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

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2.24 Taxes (contd.)

(c) Sales and Services Tax (“SST”) and Goods and Services Tax

(“GST”)

Revenue, expenses and assets are recognised net of the amount of SST or GST except: - Where the SST and GST incurred in a purchase of assets or services

is not recoverable from the taxation authority, in which case the SST and GST are recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

- Receivables and payables that are stated with the amount of SST and GST included.

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

2.25 Employee benefits (a) Short term benefits

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



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2.25 Employee benefits (contd.)

(b) Defined contribution plans

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

(c) Employee leave entitlements

Employee entitlements to annual leave are recognised as a liability when they accrue to the employees. The estimated liabilities for leave are recognised for services rendered by employees up to the reporting date.

2.26 Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 37, including the factors used to identify the reportable segments and the measurement basis of segment information.

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2.27 Share capital and share issuance expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all liabilities. Ordinary shares are equity instruments. Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transactions costs. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

2.28 Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future events not wholly within the control of the Group. Contingent liabilities and assets are not recognised in the statements of financial position but disclosures are made of its existence in the notes to the financial statements.

3. Significant accounting judgements and estimates

The preparation of the Group’s and the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future. 3.1 Critical judgements made in applying accounting policies

The following are judgements made by management in the process of applying the Group’s and the Company’s accounting policies that have the most significant effect on the amounts recognised in the financial statements. Determining the lease term of contracts with extension and termination options The Group and the Company determine the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.



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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 3. Significant accounting judgements and estimates (contd.)

3.1 Critical judgements made in applying accounting policies (contd.)

Determining the lease term of contracts with extension and termination options (contd.)

The Group and the Company have several lease contracts that include extension and termination options. The Group’s and the Company’s judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, they consider all relevant factors that create an economic incentive for it to exercise either the renewal or termination.

After the commencement date, the Group and the Company reassess the lease term if there is a significant event or change in circumstances that is within its control and affect their ability to exercise, renew or terminate.

The Group and the Company include the renewal periods as part of the lease term for leases of buildings when they are reasonably certain to be exercised. In addition, the periods covered by termination options are included as part of the lease term only when they are reasonably certain not to be exercised.

3.2 Key sources of estimation uncertainty

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

Revenue is recognised as and when the control of the asset is transferred to customers and it is probable that the Group or the Company will collect the consideration to which they will be entitled in exchange for the asset that will be transferred to the customer. The Group recognises contract revenue based on the percentage of completion method. The stage of completion is measured by reference to either the costs incurred to-date to the estimated total cost. Significant judgement is required in determining the stage of completion, the extent of the costs incurred and the estimated total revenue (for contracts other than fixed contracts) and costs. Total contract revenue also includes an estimation of the variation works that are recoverable from the customers. In making the judgement, the Group rely on past experience and work of specialists.

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3.2 Key sources of estimation uncertainty (contd.)

(b) Impairment of property, plant and equipment including right-of-use assets

Property, plant and equipment including right-of-use assets of the Group and of the Company are tested for impairment when there is an indication that they may be impaired. If such indication exists the recoverable amount of the asset is estimated. The recoverable amounts of the property, plant and equipment are assessed using higher of its value in use or fair value less cost sell.

When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. During the financial year, to reflect the uncertainties of the COVID-19 pandemic, the Group changed its valuation technique to estimate the recoverable amount for value-in-use from the traditional approach, which uses a single cash flow scenario, to the expected cash flow approach. The expected cash flow approach is based on different scenarios depending on the recovery of the business to the pre-pandemic level.

The Group’s property, plant and equipment were tested for impairment when indicators of impairment exists. No impairment was recorded in respect of these property, plant and equipment as their recoverable amounts based on value in use or fair value less costs to sell are higher than the carrying amounts of the property, plant and equipment. No reasonable changes in the assumptions used to determine the recoverable amounts based on value in use would result in impairment except for, in respect of the value-in-use assumptions used for a cash generating unit which was discounted at 13%. The following change in the discount rate, with all other inputs remaining constant, would result in an impairment.

Discount rate - increase by an additional 1.6%



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3.1 Critical judgements made in applying accounting policies (contd.)

Determining the lease term of contracts with extension and termination options (contd.)

The Group and the Company have several lease contracts that include extension and termination options. The Group’s and the Company’s judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, they consider all relevant factors that create an economic incentive for it to exercise either the renewal or termination.

After the commencement date, the Group and the Company reassess the lease term if there is a significant event or change in circumstances that is within its control and affect their ability to exercise, renew or terminate.

The Group and the Company include the renewal periods as part of the lease term for leases of buildings when they are reasonably certain to be exercised. In addition, the periods covered by termination options are included as part of the lease term only when they are reasonably certain not to be exercised.

3.2 Key sources of estimation uncertainty

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

Revenue is recognised as and when the control of the asset is transferred to customers and it is probable that the Group or the Company will collect the consideration to which they will be entitled in exchange for the asset that will be transferred to the customer. The Group recognises contract revenue based on the percentage of completion method. The stage of completion is measured by reference to either the costs incurred to-date to the estimated total cost. Significant judgement is required in determining the stage of completion, the extent of the costs incurred and the estimated total revenue (for contracts other than fixed contracts) and costs. Total contract revenue also includes an estimation of the variation works that are recoverable from the customers. In making the judgement, the Group rely on past experience and work of specialists.

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(b) Impairment of property, plant and equipment including right-of-use assets

Property, plant and equipment including right-of-use assets of the Group and of the Company are tested for impairment when there is an indication that they may be impaired. If such indication exists the recoverable amount of the asset is estimated. The recoverable amounts of the property, plant and equipment are assessed using higher of its value in use or fair value less cost sell.

When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. During the financial year, to reflect the uncertainties of the COVID-19 pandemic, the Group changed its valuation technique to estimate the recoverable amount for value-in-use from the traditional approach, which uses a single cash flow scenario, to the expected cash flow approach. The expected cash flow approach is based on different scenarios depending on the recovery of the business to the pre-pandemic level.

The Group’s property, plant and equipment were tested for impairment when indicators of impairment exists. No impairment was recorded in respect of these property, plant and equipment as their recoverable amounts based on value in use or fair value less costs to sell are higher than the carrying amounts of the property, plant and equipment. No reasonable changes in the assumptions used to determine the recoverable amounts based on value in use would result in impairment except for, in respect of the value-in-use assumptions used for a cash generating unit which was discounted at 13%. The following change in the discount rate, with all other inputs remaining constant, would result in an impairment.

Discount rate - increase by an additional 1.6%



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(c) Allowance for expected credit losses of trade receivables and contract assets

The Group uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns (i.e., product type, customer type and rating, and coverage by letters of credit and other forms of credit insurance).

The provision matrix is initially based on the Group’s and the Company’s historical observed default rates. The Group and the Company will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future.

(d) Impairment of interests in subsidiaries

The Company assesses whether there are any indicators of impairment for its interests in subsidiaries at each reporting date. In assessing whether there is any indication that its interests in subsidiaries may be impaired, the Company considers the external and internal sources of information. The Company estimated the recoverable amount of the interests in subsidiaries are based on estimated future cash flows and discounting them at an appropriate rate. In respect of the value-in-use assumption, the sensitivity of key assumptions is similar to those disclosed in Note 3.2(b).

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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 4. Revenue Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Revenue from contracts with customers 141,734 132,820 - - ====== ====== ===== ===== Revenue from other sources

- Dividends from a subsidiary - - 1,750 750 ====== ====== ===== =====

(a) Disaggregation of revenue from contracts with customers: Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000

Construction contracts 42,231 26,512 - - Property development - 720 - - Manufacturing 64,481 101,102 - - Trading 280 534 - - Quarry operations 319 1,041 - - Road maintenance 34,423 2,911 - - ––––––– ––––––– –––––– –––––– 141,734 132,820 - - ====== ====== ===== =====

Timing of revenue recognition: - at a point in time 65,080 103,397 - - - over time 76,654 29,423 - - ––––––– ––––––– –––––– –––––– 141,734 132,820 - - ====== ====== ===== =====

(b) Disaggregation of revenue from other sources:

Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000

Dividend income from subsidiaries - - 1,750 750 ====== ====== ===== =====

The information regarding receivables and contract balances are disclosed in Note

22 and Note 24, respectively.



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(c) Allowance for expected credit losses of trade receivables and contract assets

The Group uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns (i.e., product type, customer type and rating, and coverage by letters of credit and other forms of credit insurance).

The provision matrix is initially based on the Group’s and the Company’s historical observed default rates. The Group and the Company will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future.

(d) Impairment of interests in subsidiaries

The Company assesses whether there are any indicators of impairment for its interests in subsidiaries at each reporting date. In assessing whether there is any indication that its interests in subsidiaries may be impaired, the Company considers the external and internal sources of information. The Company estimated the recoverable amount of the interests in subsidiaries are based on estimated future cash flows and discounting them at an appropriate rate. In respect of the value-in-use assumption, the sensitivity of key assumptions is similar to those disclosed in Note 3.2(b).

- 65 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 4. Revenue Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Revenue from contracts with customers 141,734 132,820 - - ====== ====== ===== ===== Revenue from other sources

- Dividends from a subsidiary - - 1,750 750 ====== ====== ===== =====

(a) Disaggregation of revenue from contracts with customers: Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000

Construction contracts 42,231 26,512 - - Property development - 720 - - Manufacturing 64,481 101,102 - - Trading 280 534 - - Quarry operations 319 1,041 - - Road maintenance 34,423 2,911 - - ––––––– ––––––– –––––– –––––– 141,734 132,820 - - ====== ====== ===== =====

Timing of revenue recognition: - at a point in time 65,080 103,397 - - - over time 76,654 29,423 - - ––––––– ––––––– –––––– –––––– 141,734 132,820 - - ====== ====== ===== =====

(b) Disaggregation of revenue from other sources:


Dividend income from subsidiaries - - 1,750 750 ====== ====== ===== =====

The information regarding receivables and contract balances are disclosed in Note

22 and Note 24, respectively.



- 66 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 4. Revenue (contd.)

(c) Transaction prices allocated to the remaining performance obligations are as follows: Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000

Construction contracts - Within one year 75,366 46,098 - - - More than one year 289,584 31,665 - -

––––––– ––––––– –––––– –––––– 364,950 77,763 - - ====== ====== ===== ===== The Group applied the practical expedient in MFRS 15 and did not disclose

information about unsatisfied performance obligations for road maintenance, where the transaction price corresponds directly with the Group’s level of performance in the future.

The Group has applied the practical expedient in MFRS 15 and did not disclose

information about unsatisfied performance obligations for construction contracts where the original expected duration of the contract is one year or less.

(d) Salient terms of sales are as follows:

(i) Construction contracts - Credit period of 60 to 90 (2020: 60 to 90) days from invoicing date. Subject to defect liability period of at least 1 year from handover.

(ii) Property development - Credit period of 30 to 60 (2020: 60 to 90) days

from invoicing date. Subject to defect liability period of 6 months from vacant possession date.

(iii) Manufacturing - Credit period of 60 to 90 (2020: 60 to 90) days from

invoicing date. No material warranty or refund obligation.

(iv) Trading - Credit period of 30 to 60 (2020: 30 to 60) days from invoicing date. No material warranty or refund obligation.

(v) Quarry operations - Credit period of 60 to 90 (2020: 60 to 90) days from

invoicing date. No material warranty or refund obligation. (vi) Road maintenance - Credit period of 60 to 90 (2020: 60 to 90) days from


- 67 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 5. Other income Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000

Dividend income 9 15 - 2 Gain on disposal of property, plant and equipment 4 4 - - Gain on disposal of properties held for sale - 10 - - Interest income 15 148 376 677 Insurance claims - 78 - - Reversal of impairment loss on: - trade receivables (Note 22(a)) 616 268 - - - other receivables (Note 22(c)) - 2 - - Rental income 367 364 223 223 Realised foreign currency exchange gain 6 - - - Sundry income 448 280 - - Unrealised foreign exchange gain 21 41 - - Wages subsidies 1,672 - 45 - Fair value increase in other investment 1 - 1 - ––––––– ––––––– –––––– –––––– 3,159 1,210 645 902 ====== ====== ===== ===== 6. Finance costs Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Interest expense for financial liabilities: Bank borrowings 3,893 3,927 786 1,169 Lease liabilities 262 326 13 16 ––––––– ––––––– –––––– –––––– 4,155 4,253 799 1,185 Add: Bank charges 167 293 52 6 ––––––– ––––––– –––––– –––––– 4,322 4,546 851 1,191 ====== ====== ===== =====



- 66 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 4. Revenue (contd.)

(c) Transaction prices allocated to the remaining performance obligations are as follows: Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000

Construction contracts - Within one year 75,366 46,098 - - - More than one year 289,584 31,665 - -

––––––– ––––––– –––––– –––––– 364,950 77,763 - - ====== ====== ===== ===== The Group applied the practical expedient in MFRS 15 and did not disclose

information about unsatisfied performance obligations for road maintenance, where the transaction price corresponds directly with the Group’s level of performance in the future.

The Group has applied the practical expedient in MFRS 15 and did not disclose

information about unsatisfied performance obligations for construction contracts where the original expected duration of the contract is one year or less.

(d) Salient terms of sales are as follows:

(i) Construction contracts - Credit period of 60 to 90 (2020: 60 to 90) days from invoicing date. Subject to defect liability period of at least 1 year from handover.

(ii) Property development - Credit period of 30 to 60 (2020: 60 to 90) days

from invoicing date. Subject to defect liability period of 6 months from vacant possession date.

(iii) Manufacturing - Credit period of 60 to 90 (2020: 60 to 90) days from


(iv) Trading - Credit period of 30 to 60 (2020: 30 to 60) days from invoicing date. No material warranty or refund obligation.

(v) Quarry operations - Credit period of 60 to 90 (2020: 60 to 90) days from

invoicing date. No material warranty or refund obligation. (vi) Road maintenance - Credit period of 60 to 90 (2020: 60 to 90) days from


- 67 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 5. Other income Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000

Dividend income 9 15 - 2 Gain on disposal of property, plant and equipment 4 4 - - Gain on disposal of properties held for sale - 10 - - Interest income 15 148 376 677 Insurance claims - 78 - - Reversal of impairment loss on: - trade receivables (Note 22(a)) 616 268 - - - other receivables (Note 22(c)) - 2 - - Rental income 367 364 223 223 Realised foreign currency exchange gain 6 - - - Sundry income 448 280 - - Unrealised foreign exchange gain 21 41 - - Wages subsidies 1,672 - 45 - Fair value increase in other investment 1 - 1 - ––––––– ––––––– –––––– –––––– 3,159 1,210 645 902 ====== ====== ===== ===== 6. Finance costs Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Interest expense for financial liabilities: Bank borrowings 3,893 3,927 786 1,169 Lease liabilities 262 326 13 16 ––––––– ––––––– –––––– –––––– 4,155 4,253 799 1,185 Add: Bank charges 167 293 52 6 ––––––– ––––––– –––––– –––––– 4,322 4,546 851 1,191 ====== ====== ===== =====



- 68 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 7. Profit/(loss) before tax The following amounts have been included in arriving at profit/(loss) before tax: Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Amortisation of properties held for sale (Note 25) 11 22 - - Auditors’ remunerations: - current year 321 271 79 72 - (over)/under provision in prior years (2) (13) - (4) Bad debts written off 20 73 - - Depreciation of investment properties (Note 15) 139 132 53 53 Depreciation of property, plant and equipment (Note 12) 5,859 5,869 237 429 Impairment loss on investment in subsidiary - - - 281 Impairment loss on: - trade receivables (Note 22(a)) 152 710 - - - other receivables (Note 22(c)) 38 - - - Inventories written off 778 174 - - Net unrealised foreign exchange gain (21) (35) - - Property, plant and equipment written off 18 8 - - ===== ===== ===== ===== 8. Employee benefits expense Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Salaries, allowances and bonus 12,936 12,207 608 732 Contributions to defined contribution plan 1,524 1,444 81 98 Social security contributions 193 189 9 10 Other benefits 215 426 24 12 –––––– –––––– ––––– –––––– 14,868 14,266 722 852 ===== ===== ==== =====



- 68 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 7. Profit/(loss) before tax The following amounts have been included in arriving at profit/(loss) before tax: Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Amortisation of properties held for sale (Note 25) 11 22 - - Auditors’ remunerations: - current year 321 271 79 72 - (over)/under provision in prior years (2) (13) - (4) Bad debts written off 20 73 - - Depreciation of investment properties (Note 15) 139 132 53 53 Depreciation of property, plant and equipment (Note 12) 5,859 5,869 237 429 Impairment loss on investment in subsidiary - - - 281 Impairment loss on: - trade receivables (Note 22(a)) 152 710 - - - other receivables (Note 22(c)) 38 - - - Inventories written off 778 174 - - Net unrealised foreign exchange gain (21) (35) - - Property, plant and equipment written off 18 8 - - ===== ===== ===== ===== 8. Employee benefits expense Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Salaries, allowances and bonus 12,936 12,207 608 732 Contributions to defined contribution plan 1,524 1,444 81 98 Social security contributions 193 189 9 10 Other benefits 215 426 24 12 –––––– –––––– ––––– –––––– 14,868 14,266 722 852 ===== ===== ==== =====

9. Directors’ remuneration

The details of remuneration receivable by directors of the Group and of the Company during the year are as follows: Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Directors of the Company

Executive: Salaries and other emoluments 905 540 176 120 Fees 204 96 24 12 Contributions to defined contribution plans 132 62 26 14 ——– ——– ——– —— Total executive directors’ remuneration 1,241 698 226 146 ——– ——– ——– ——

Non-executive: Fees 72 72 48 48 Other emoluments 48 48 48 48 ——– ——– ——– —— Total non-executive directors’ remuneration 120 120 96 96 ——– ——– ——– —— Total directors’ remuneration 1,361 818 322 242 Estimated money value of benefits-in-kind 55 36 20 19 ——– ——– ——– —— Total directors’ remuneration including benefits-in-kind 1,416 854 342 261 ==== ==== ==== ====



- 70 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 9. Directors’ remuneration (contd.) The details of remuneration receivable by directors of the Group and of the Company

during the year are as follows: Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Other directors Executive: Salaries and other emoluments 253 196 - - Fees 168 144 - - Contributions to defined contribution plans 42 39 - - ––––– ––––– ––––– –––– Total executive directors’ remuneration (excluding benefits-in-kind) 463 379 - - Estimated money value of benefits-in-kind 7 - - - ––––– ––––– ––––– –––– Total executive directors’ remuneration (including benefits-in-kind) 470 379 - - ––––– ––––– ––––– –––– Non-executive: Fees 96 108 - - ––––– ––––– ––––– –––– Total non-executive directors’ remuneration (excluding benefits-in-kind) 96 108 - - Estimated money value of benefits-in-kind 21 21 - - ––––– ––––– ––––– –––– Total non-executive directors’ remuneration (including benefits-in-kind) 117 129 - - ––––– ––––– ––––– –––– Total directors’ remuneration (excluding benefits-in-kind) 559 487 - - Estimated money value of benefits-in-kind 28 21 - - ––––– ––––– ––––– –––– Total directors’ remuneration (including benefits-in-kind) 587 508 - - ==== ==== ==== ==== Total directors’ remuneration (Note 33(c)) 2,003 1,362 342 261 ==== ==== ==== ====

- 71 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 10. Income tax expense Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Statements of profit or loss and other comprehensive income: Income tax: - Current year income tax 3,784 1,604 - - - (Over)/under provision in respect of previous years (203) (69) 3 - –––––– –––––– ––––– ––––– 3,581 1,535 3 - –––––– –––––– ––––– ––––– Deferred tax (Note 29): - Origination and reversal of temporary differences (720) 74 - - - Under/(over) provision in respect of previous years 121 (223) - - –––––– –––––– ––––– ––––– (599) (149) - - –––––– –––––– ––––– ––––– Income tax expense recognised in profit or loss 2,982 1,386 3 - ===== ===== ==== ====



- 72 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 10. Income tax expense (contd.) A reconciliation of income tax expense applicable to profit/(loss) 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 is as follows:

2021 2020 RM’000 RM’000 Group Profit/(loss) before tax 3,357 (1,421) ====== ====== Tax at Malaysian statutory tax rate of 24% (2020: 24%) 806 (341) Share of results of an associate (15) (72) Income not subject to tax (87) (8) Expenses not deductible for tax purposes 1,531 1,235 Deferred tax assets not recognised 889 1,063 Utilisation of previously unrecognised tax losses (20) (199) Utilisation of previously unrecognised other deductible temporary differences (40) - Over provision of income tax in respect of previous years (203) (69) Under/(over) provision of deferred tax in respect of previous years 121 (223) –––––– –––––– Income tax expense recognised in profit or loss 2,982 1,386 ===== =====

- 73 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 10. Income tax expense (contd.) 2021 2020 RM’000 RM’000 Company Loss before tax (44) (1,969) ===== ===== Tax at Malaysian statutory tax rate of 24% (2020: 24%) (11) (473) Income not subject to tax (474) - Expenses not deductible for tax purposes 473 460 Deferred tax assets not recognised 12 13 Under provision of income tax in respect of previous years 3 - –––––– –––––– Income tax expense recognised in profit or loss 3 - ===== ===== Current income tax is calculated at the Malaysia statutory tax rate of 24% (2020: 24%) of

the estimated assessable profit for the year.

Tax savings during the financial year arising from:

Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Utilisation of current year tax losses 80 44 - - Utilisation of tax losses brought forward 83 258 - - –––––– –––––– –––––– –––––– 163 302 - - ===== ===== ===== =====



- 74 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 10. Income tax expense (contd.)

At the reporting date, the Group and the Company have the following for offset against future taxable income:

Group Company

2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Unutilised tax losses 18,559 16,500 - - Unabsorbed capital allowances 16,492 13,287 - - Other deductible temporary differences 1,427 1,202 173 124 –––––– –––––– –––––– –––––– 36,478 30,989 173 124 ===== ===== ===== =====

Pursuant to Section 44(5F) of the Income Tax Act, 1967, the unutilised tax losses can only be carried forward until the following years of assessment:


Unutilised tax losses to be carried forward until:

- Year of assessment 2025 7,927 7,927 - - - Year of assessment 2026 6,650 6,650 - - - Year of assessment 2027 1,923 1,923 - - - Year of assessment 2028 2,059 - - - –––––– –––––– –––––– –––––– 18,559 16,500 - - ===== ===== ===== =====

- 75 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 11. Earnings per share (“EPS”)

(a) Basic

Basic earnings per share amounts are calculated by dividing loss for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares in issue during the financial year.

(b) Diluted

Diluted EPS amounts are calculated by dividing the loss attributable to ordinary equity holders of the parent (after adjusting for interest on the convertible preference shares) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. The Group did not issue any diluted financial instruments as at the reporting date and therefore, diluted loss per share is presented as equal to basic loss per share.

2021 2020

Loss attributable to owner of the parent (RM’000) (1,956) (3,006) ===== ===== Weighted average number of ordinary shares in issue (’000) 57,962 57,962 ===== ===== Basic and diluted loss per share (sen) (3.37) (5.19) ===== =====

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of authorisation of these financial statements.


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ontd

.)

- 79

-

Regi

strat

ion

No:

199

6010

0593

6 (3

7828

2-D

) Q

ualit

y C

oncr

ete H

oldi

ngs B

erha

d N

otes

to th

e Fin

anci

al S

tate

men

ts

Fo

r the

fina

ncia

l yea

r end

ed 3

1 Ja

nuar

y 20

21

12.

Prop

erty

, pla

nt a

nd e

quip

men

t (co

ntd.

)

O

ffice

furn

iture

Plan

t

Mot

or

and

Offi

ce

and

Build

ings

v

ehic

les

equi

pmen

t re

nova

tion

mac

hine

ries

To

tal

RM’0

00

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

C

ompa

ny

Cos

t

At 1

Feb

ruar

y 20

19

-

1,82

2 36

9 19

7 2,

250

4,63

8 Ef

fect

of a

dopt

ion

of M

FRS

16

34

9 -

- -

- 34

9

––––

––

––––

––

––––

––

––––

– ––

–––

––––

–––

At 3

1 Ja

nuar

y 20

20 a

nd 1

Feb

ruar

y 20

20

34

9 1,

822

369

197

2,25

0 4,

987

Add

ition

- -

2 -

- 2

––

––––

––

––––

––

––––

––

–––

––––

– ––

––––

– A

t 31

Janu

ary

2021

349

1,82

2 37

1 19

7 2,

250

4,98

9

====

= ==

===

====

= ==

==

====

==

====

A

ccum

ulat

ed d

epre

ciat

ion

At 1

Feb

ruar

y 20

19

-

1,40

4 32

8 17

5 2,

095

4,00

2 D

epre

ciat

ion

char

ge fo

r the

yea

r (N

ote

7)

64

18

3 16

11

15

5 42

9

––––

––

––––

––

––––

––

––––

– ––

––––

––

––––

A

t 31

Janu

ary

2020

and

1 F

ebru

ary

2020

64

1,58

7 34

4 18

6 2,

250

4,43

1

Dep

reci

atio

n ch

arge

for t

he y

ear (

Not

e 7)

64

148

15

10

- 23

7

––––

––

––––

––

––––

––

––––

– ––

––––

––

––––

A

t 31

Janu

ary

2021

128

1,73

5 35

9 19

6 2,

250

4,66

8

====

= ==

===

====

= ==

==

====

= ==

===


- 80

-

Regi

strat

ion

No:

199

6010

0593

6 (3

7828

2-D

) Q

ualit

y C

oncr

ete H

oldi

ngs B

erha

d N

otes

to th

e Fin

anci

al S

tate

men

ts

Fo

r the

fina

ncia

l yea

r end

ed 3

1 Ja

nuar

y 20

21

12.

Prop

erty

, pla

nt a

nd e

quip

men

t (co

ntd.

)

O

ffice

furn

iture

Plan

t

Mot

or

and

Offi

ce

and

Build

ings

v

ehic

les

equi

pmen

t re

nova

tion

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ries

To

tal

RM’0

00

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

C

ompa

ny (c

ontd

.) N

et c

arry

ing

amou

nt

At 3

1 Ja

nuar

y 20

20

2

85

235

25

11

- 55

6

====

= ==

===

====

= ==

==

====

= ==

===

At 3

1 Ja

nuar

y 20

21

22

1 87

12

1

- 32

1

====

= ==

===

====

= ==

==

====

= ==

===

Not

es t

o th

e Fi

nan

cial

Sta

tem

ents

For

The

Fin

anci

al Y

ear

End

ed 3

1 Jan

uar

y 20

21 (C

ontd

.)

- 81 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 12. Property, plant and equipment (contd.)

(a) Right-of-use assets Included in the carrying amount of property, plant and equipment are right-of-use

assets as follows: Leasehold Plant and Motor

Group land Buildings machinery vehicle Total RM’000 RM’000 RM’000 RM’000 RM’000

At 1 February 2020 - - - - - Effect of adoption of MFRS 16: - Recognition 13,026 963 847 293 15,129 - Reclassification - 1,045 5,400 6,445 Additions - 280 - 1,877 2,157 Depreciation charge for the year (321) (233) (381) (731) (1,666) –––––– –––––– –––––– –––––– –––––– At 31 January 2020 and 1 February 2020 12,705 1,010 1,511 6,839 22,065 Additions - 397 - 1,550 1,947 Lease settlement - - - (1,002) (1,002) Depreciation charge for the year (321) (302) (306) (939) (1,868) –––––– –––––– –––––– –––––– –––––– At 31 January 2021 12,384 1,105 1,205 6,448 21,142 ===== ===== ===== ===== ===== Company Buildings RM’000 At 1 February 2019 - Effect of adoption of MFRS 16 349 Depreciation charge for the year (64) –––––– At 31 January 2020 and 1 February 2020 285 Depreciation charge for the year (64) –––––– At 31 January 2021 221 =====



- 81 -


(a) Right-of-use assets Included in the carrying amount of property, plant and equipment are right-of-use

assets as follows: Leasehold Plant and Motor

Group land Buildings machinery vehicle Total RM’000 RM’000 RM’000 RM’000 RM’000

At 1 February 2020 - - - - - Effect of adoption of MFRS 16: - Recognition 13,026 963 847 293 15,129 - Reclassification - 1,045 5,400 6,445 Additions - 280 - 1,877 2,157 Depreciation charge for the year (321) (233) (381) (731) (1,666) –––––– –––––– –––––– –––––– –––––– At 31 January 2020 and 1 February 2020 12,705 1,010 1,511 6,839 22,065 Additions - 397 - 1,550 1,947 Lease settlement - - - (1,002) (1,002) Depreciation charge for the year (321) (302) (306) (939) (1,868) –––––– –––––– –––––– –––––– –––––– At 31 January 2021 12,384 1,105 1,205 6,448 21,142 ===== ===== ===== ===== ===== Company Buildings RM’000 At 1 February 2019 - Effect of adoption of MFRS 16 349 Depreciation charge for the year (64) –––––– At 31 January 2020 and 1 February 2020 285 Depreciation charge for the year (64) –––––– At 31 January 2021 221 =====



- 82 -


(a) Right-of-use assets (contd.)

The Group and the Company have lease contracts for various items of land, buildings, plant and machinery, and equipment and others used in its operations. The Group and the Company also applied judgement and assumptions in determining the incremental borrowing rate of the respective leases. The Group and the Company first determine the closest available borrowing rates before using significant judgement to determine the adjustments required to reflect the term, security, value or economic environment of the respective lease. The table below describes the nature of the Group’s and the Company’s leasing activities by type of right-of-use asset recognised on the statements of financial position:

Plant and Motor Group Land Buildings machinery vehicle

At 31 January 2021

No. of right-of use asset leased 14 20 1 15 No. of leases with extension option - 18 1 1 No. of leases with purchase option - - - - No. of leases with variable lease payments - - - - No. of leases with termination option - 15 1 - ===== ===== ===== ===== At 31 January 2020

No. of right-of use asset leased 14 11 1 1 No. of leases with extension option - 9 1 1 No. of leases with purchase option - - - - No. of leases with variable lease payments - - - - No. of leases with termination option - 7 1 - ===== ===== ===== =====

- 83 -


(a) Right-of-use assets (contd.) The table below describes the nature of the Company’s leasing activities by type of right-of-use asset recognised on the statements of financial position: Company Buildings At 31 January 2021

No. of right-of use asset leased 1 No. of leases with extension option 1 No. of leases with purchase option - No. of leases with variable lease payments - No. of leases with termination option 1 ===== At 31 January 2020

No. of right-of use asset leased 1 No. of leases with extension option 1 No. of leases with purchase option - No. of leases with variable lease payments - No. of leases with termination option 1 =====

(b) Fully depreciated property, plant and equipment

Cost of fully depreciated property, plant and equipment that are still in use at the reporting date of the Group and of the Company were RM56,676,129 (2020: RM53,440,288) and RM3,533,216 (2020: RM2,553,692), respectively.

(c) Assets pledged for banking facilities

At the reporting date, property, plant and equipment of the Group with a total carrying amount of RM2,605,629 (2020: RM2,659,036) are pledged for banking facilities granted to the Group (Note 27).

(d) The title to a parcel of leasehold land of the Group with carrying amount of RM1,151,505 (2020: RM1,151,505) has yet to be issued by the relevant authority.



- 84 -


(e) Reconciliation to the statement of cash flows

Reconciliation to the cash flow for purchase of property, plant and equipment is as follows:

Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Additions for the financial year 4,328 2,735 2 - Less: Leasing arrangements (Note 27(e)) (1,686) (1,919) - - –––––– –––––– ––––– ––––– Total cash payments during the financial year 2,642 816 2 - ===== ===== ==== ==== 13. Prepaid land lease payments Group Company RM’000 RM’000 RM’000 RM’000 Cost: At 1 February 2020/2019 - 18,199 - 4,766 Effect of adoption of MFRS 16 - (18,199) - (4,766) –––––– –––––– ––––– ––––– At 31 January 2021/2020 - - - - ===== ===== ==== ====

Accumulated amortisation:

At 1 February 2020/2019 - 5,173 - 2,054 Effect of adoption of MFRS 16 - (5,173) - (2,054) –––––– –––––– ––––– ––––– At 31 January 2021/2020 - - - - ===== ===== ==== ==== Net carrying amount: At 31 January 2021/2020 - - - - ===== ===== ==== ====

- 85 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 14. Land held for property development and property development costs

A summary of movement in land held for property development and property development cost is set out below.

Land held for property development Group RM’000 RM’000

At 1 February 2020/2019 41,594 36,323 Additions - 664 Transfer from property development cost - 4,607 ——— —––— At 31 January 2021/2020 41,594 41,594

===== =====

Certain parcels of leasehold land of the Group amounting to RM27,976,139 (2020: RM27,679,987) are pledged as securities for borrowings as disclosed in Note 27.

Property development cost Group RM’000 RM’000

At 1 February 2020/2019 - 4,607 Transfer to land held for property development - (4,607) ——— —––— At 31 January 2021/2020 - - ===== =====



- 86 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 15. Investment properties Freehold Leasehold land land Buildings Total RM’000 RM’000 RM’000 RM’000

Group

Cost At 1 February 2019 13,088 - 3,182 16,270 Additions - 1,200 - 1,200 —––— —––— —––— —––— At 31 January 2020 and 1 February 2020 13,088 1,200 3,182 17,470 Additions - - - - —––— —––— —––— —––— At 31 January 2021 13,088 1,200 3,182 17,470 —––— —––— —––— —––— Accumulated depreciation At 1 February 2019 - - 962 962 Depreciation charge for the year (Note 7) - 18 114 132 —––— —––— —––— —––— At 31 January 2020 and 1 February 2020 - 18 1,076 1,094 Depreciation charge for the year (Note 7) - 24 115 139 —––— —––— —––— —––— At 31 January 2021 - 42 1,191 1,233 —––— —––— —––— —––— Net carrying amount At 31 January 2020 13,088 1,182 2,106 16,376 ===== ===== ===== ===== At 31 January 2021 13,088 1,158 1,991 16,237 ===== ===== ===== =====

2021 2020 RM’000 RM’000 Estimated fair value (level 3) 48,800 47,595 ===== =====

- 87 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 15. Investment properties (contd.) Leasehold land RM’000

Company

Cost

At 1 February 2019 - Effect of adoption of MFRS 16 2,712 —––— At 31 January 2020 and 1 February 2020 2,712 Additions - —––— At 31 January 2021 2,712 —––—

Accumulated depreciation

At 1 February 2019 - Depreciation charge for the year (Note 7) 53 At 31 January 2020 and 1 February 2020 —––— 53 Depreciation charge for the year (Note 7) 53 —––— At 31 January 2021 106 —––—

Net carrying amount

At 31 January 2020 2,659 =====

At 31 January 2021 2,606 ===== 2021 2020 RM’000 RM’000 Estimated fair value (level 3) 4,006 4,006 ===== =====



- 88 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 15. Investment properties (contd.) The following are recognised in profit or loss in respect of investment properties:


Rental income derived from investment properties 24 24 223 223 ====== ====== ====== ====== Direct operating expenses - income generating 21 24 - - - non-income generating 3 2 - - ====== ====== ====== ======

The fair value of the investment properties is estimated by the directors’ based on transacted dealings of comparable properties in nearby locations. The fair value of these properties is categorised under Level 3 of the fair value hierarchy.

Certain investment properties of the Group of RM60,528,925 (2020: RM60,575,112) are pledged as securities for borrowings as disclosed in Note 27.

The Group and the Company have no restriction on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

16. Goodwill on consolidation

Group RM’000 RM’000 Cost

At 31 January 2021/2020 799 799

===== =====

Accumulated impairment loss

At 31 January 2021/2020 (799) (799) ===== ===== Net carrying amount At 31 January 2021/2020 - - ===== =====

- 89 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021

17. Investment in subsidiaries Company 2021 2020 RM’000 RM’000

Unquoted shares, at cost 117,527 117,527 Less: Accumulated impairment loss (281) (281) ––––––– ––––––– 117,246 117,246 ====== ====== Movement in accumulated impairment losses are as follows:

Company 2021 2020 RM’000 RM’000

As at 1 Feb 2020/2019 281 - Impairment loss during the year (Note 7) - 281 –––––––––– –––––––––– As at 1 Jan 2021/2020 281 281 ========= =========

Details of the subsidiaries are as follows: Proportion of Country of ownership interest Name of subsidiaries incorporation Principal activities 2021 2020 % % Held by the Company: Quality Concrete Malaysia Manufacturing and trading 100 100 Sdn. Bhd. of ready-mixed concrete, sale of concrete products and trading of goods Polyflow Pipes Sdn. Bhd. Malaysia Manufacturing and trading 100 100 of polyethylene pipes Kutex Sdn. Bhd. Malaysia Investment holding 100 100



- 88 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 15. Investment properties (contd.) The following are recognised in profit or loss in respect of investment properties:


Rental income derived from investment properties 24 24 223 223 ====== ====== ====== ====== Direct operating expenses - income generating 21 24 - - - non-income generating 3 2 - - ====== ====== ====== ======

The fair value of the investment properties is estimated by the directors’ based on transacted dealings of comparable properties in nearby locations. The fair value of these properties is categorised under Level 3 of the fair value hierarchy.

Certain investment properties of the Group of RM60,528,925 (2020: RM60,575,112) are pledged as securities for borrowings as disclosed in Note 27.

The Group and the Company have no restriction on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

16. Goodwill on consolidation

Group RM’000 RM’000 Cost

At 31 January 2021/2020 799 799

===== =====

Accumulated impairment loss

At 31 January 2021/2020 (799) (799) ===== ===== Net carrying amount At 31 January 2021/2020 - - ===== =====

- 89 -


17. Investment in subsidiaries Company 2021 2020 RM’000 RM’000

Unquoted shares, at cost 117,527 117,527 Less: Accumulated impairment loss (281) (281) ––––––– ––––––– 117,246 117,246 ====== ====== Movement in accumulated impairment losses are as follows:

Company 2021 2020 RM’000 RM’000

As at 1 Feb 2020/2019 281 - Impairment loss during the year (Note 7) - 281 –––––––––– –––––––––– As at 1 Jan 2021/2020 281 281 ========= =========

Details of the subsidiaries are as follows: Proportion of Country of ownership interest Name of subsidiaries incorporation Principal activities 2021 2020 % % Held by the Company: Quality Concrete Malaysia Manufacturing and trading 100 100 Sdn. Bhd. of ready-mixed concrete, sale of concrete products and trading of goods Polyflow Pipes Sdn. Bhd. Malaysia Manufacturing and trading 100 100 of polyethylene pipes Kutex Sdn. Bhd. Malaysia Investment holding 100 100



- 90 -


17. Investment in subsidiaries (contd.) Details of the subsidiaries are as follows: (contd.) Proportion of Country of ownership interest Name of subsidiaries incorporation Principal activities 2021 2020 % % Held by the Company: (contd.) Hong Wei Holdings Malaysia Property development and 100 100 Sdn. Bhd. construction

Lee Ling Timber Malaysia Sawmilling and manufacture 100 100

Products Sdn. Bhd. of downstream timber products Agrowell Sdn. Bhd. Malaysia Quarry operations and 100 100 sale of aggregates and related products Polyflow (B) Sdn. Bhd.* Brunei Manufacture and sale of 55 55 Darussalam polyethylene pipes Seri Bumijaya Sdn. Bhd. Malaysia Trading in cement 100 100 Enrich Fortress Sdn. Bhd. Malaysia Investment in property 100 100

Casa Usaha Sdn. Bhd. Malaysia Investment in property 100 100 QC Construction & Engineering Sdn. Bhd. Malaysia Civil and structural 100 100 Construction EXL Pipe (Borneo) Malaysia Manufacturing and trading of 60 60 Sdn. Bhd. Multi Layer PVC pipes . Medtech & Health Malaysia Manufacturing and supply Sdn. Bhd. of health products 100 -

- 91 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 17. Investment in subsidiaries (contd.) Details of the subsidiaries are as follows: (contd.) Proportion of Country of ownership interest Name of subsidiaries incorporation Principal activities 2021 2020 % % Subsidiaries of Quality Concrete Sdn. Bhd.: Quality Concrete Malaysia Dormant 70 70 (Mukah) Sdn. Bhd. Subsidiaries of QC Construction & Engineering Sdn. Bhd.: QC Works & Road Malaysia Road engineering 70 70 Maintenance Sdn. Bhd. and maintenance (Formerly known as works Konsortium Wira Jaya Sdn. Bhd. QCCE and Asas Ulung JV Malaysia Road maintenance 70 70 Sdn. Bhd. Jurubina Cergas BSB Malaysia Construction and 100 - Sdn. Bhd. engineering works Subsidiary of Medtech & Health Sdn. Bhd.: Audasa Pharma Malaysia Manufacturing of 60 - Sdn. Bhd. pharmaceutical/ medical products * Audited by firms other than Ernst & Young PLT, Malaysia.



- 92 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 17. Investment in subsidiaries (contd.) Details of the subsidiaries are as follows: (contd.)

(a) Subscription of shares in a subsidiary

In previous year, the Group subscribed for 70% equity interest in QCCE and Asas Ulung JV Sdn. Bhd. (“QAJV”) through QC Construction & Engineering Sdn. Bhd., a 100% owned subsidiary, for a cash consideration of RM70. Upon the subscription, QCCE and Asas Ulung JV Sdn. Bhd. became a subsidiary of the Group. During the financial year, the Group subscribed for an additional 559,930 ordinary shares for cash consideration of RM559,930 in QAJV.

(b) Disposal of shares in a subsidiary

In previous year, the Company disposed of 30 ordinary shares in QC Works & Road Maintenance Sdn. Bhd. to a third party for a total consideration of RM30, thereby reduced the equity interest in this subsidiary from 100% to 70%.

(c) Incorporation of subsidiaries

On 20 July 2020, the Company incorporated a wholly owned subsidiary, Medtech & Health Sdn. Bhd. (“MHSB”) with a total paid up capital of 100 ordinary shares of RM1 each. On 1st September 2020, QC Construction & Engineering Sdn. Bhd, the subsidiary of the Company incorporated a wholly owned subsidiary, Jurubina Cergas BSB Sdn. Bhd. with a total paid up capital of 100 ordinary shares of RM1 each.

(d) Acquisition of subsidiaries

On 19 August 2020, a wholly owned subsidiary of the Company, Medtech & Health Sdn. Bhd. (“MHSB”) acquired 60,000 ordinary shares of RM1 each, representing 60% of equity interest in Audasa Pharma Sdn. Bhd. (“APSB”) for a consideration of RM60,000. APSB was incorporated on 14 May 2020.


- 92 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 17. Investment in subsidiaries (contd.) Details of the subsidiaries are as follows: (contd.)

(a) Subscription of shares in a subsidiary

In previous year, the Group subscribed for 70% equity interest in QCCE and Asas Ulung JV Sdn. Bhd. (“QAJV”) through QC Construction & Engineering Sdn. Bhd., a 100% owned subsidiary, for a cash consideration of RM70. Upon the subscription, QCCE and Asas Ulung JV Sdn. Bhd. became a subsidiary of the Group. During the financial year, the Group subscribed for an additional 559,930 ordinary shares for cash consideration of RM559,930 in QAJV.

(b) Disposal of shares in a subsidiary

In previous year, the Company disposed of 30 ordinary shares in QC Works & Road Maintenance Sdn. Bhd. to a third party for a total consideration of RM30, thereby reduced the equity interest in this subsidiary from 100% to 70%.

(c) Incorporation of subsidiaries

On 20 July 2020, the Company incorporated a wholly owned subsidiary, Medtech & Health Sdn. Bhd. (“MHSB”) with a total paid up capital of 100 ordinary shares of RM1 each. On 1st September 2020, QC Construction & Engineering Sdn. Bhd, the subsidiary of the Company incorporated a wholly owned subsidiary, Jurubina Cergas BSB Sdn. Bhd. with a total paid up capital of 100 ordinary shares of RM1 each.

(d) Acquisition of subsidiaries

On 19 August 2020, a wholly owned subsidiary of the Company, Medtech & Health Sdn. Bhd. (“MHSB”) acquired 60,000 ordinary shares of RM1 each, representing 60% of equity interest in Audasa Pharma Sdn. Bhd. (“APSB”) for a consideration of RM60,000. APSB was incorporated on 14 May 2020.

Not

es t

o th

e Fi

nan

cial

Sta

tem

ents

For

The

Fin

anci

al Y

ear

End

ed 3

1 Jan

uar

y 20

21 (C

ontd

.)

- 93

-

Regi

strat

ion

No:

199

6010

0593

6 (3

7828

2-D

) Q

ualit

y C

oncr

ete H

oldi

ngs B

erha

d N

otes

to th

e Fin

anci

al S

tate

men

ts

Fo

r the

fina

ncia

l yea

r end

ed 3

1 Ja

nuar

y 20

21

17.

Inve

stm

ent i

n su

bsid

iari

es (c

ontd

.)

The

Gro

up’s

sub

sidia

ries

that

hav

e m

ater

ial

non-

cont

rolli

ng in

tere

st (“

NCI

”) a

re s

et o

ut b

elow

. The

sum

mar

ised

finan

cial

info

rmat

ion

pres

ente

d be

low

is th

e am

ount

bef

ore i

nter

-com

pany

elim

inat

ion.

(i)

Sum

mar

ised

stat

emen

ts o

f fin

anci

al p

ositi

on

Q

C W

orks

& R

oad

QC

CE

and

Asa

s

EX

L P

ipes

(Bor

neo)

M

aint

enan

ce S

dn. B

hd

Ulu

ng J

V S

dn. B

hd.

Sd

n. B

hd.

20

21

2020

20

21

2020

20

21

2020

RM’0

00

RM’0

00

RM’0

00

RM’0

00

RM’0

00

RM’0

00

Non

-cur

rent

ass

ets

1,95

2 62

2 -

-

4,32

7 4,

750

Cu

rrent

asse

ts

13,2

14

2,59

7 10

,406

5,

414

4,56

7 3

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––––

––––

––

––––

––

––––

––––

––

––––

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––––

––––

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––––

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Tota

l ass

ets

15,1

66

3,21

9 10

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5,

414

8,89

4 8

,105

Cu

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liab

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s (7

,456

) (2

,160

) (8

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) (4

,538

) (6

,349

) (5

,141

)

Non

-cur

rent

liab

ilitie

s (1

,155

) (2

83)

- -

(1,2

81)

(1,

247)

––––

––––

––

––––

––

––––

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––

––––

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––––

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Tota

l lia

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(8,6

11)

(2,4

43)

(8,5

81)

(4,

538)

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)

––

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N

et a

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s 6,

555

776

1,82

5 87

6 1,

264

1,7

17

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Eq

uity

attr

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able

to

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wne

rs o

f the

Com

pany

4,

589

543

1,27

8 61

3 75

8 1,

030

N

on-c

ontro

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inte

rests

1,

966

233

547

263

506

687

====

===

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====

===

====

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Regi

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No:

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- 96 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 18. Investment in associate Group 2021 2020 RM’000 RM’000

Unquoted shares, at cost 60 60 Share of post-acquisition reserves 386 475 ––––––– –––––––

446 535 ====== ======

Details of the associate are as follows: Proportion of Country of ownership interest Name of associate incorporation Principal activities 2021 2020 % % Held by the Group: Multi Brilliance Malaysia Wholesale of other 30 30 Resources Sdn. Bhd. construction materials, hardware, plumbing and heating equipment and supplies N.E.C Summarised statement of financial position: Multi Brilliance Resources Sdn. Bhd. 2021 2020 RM’000 RM’000

Assets and liabilities

Current assets 2,719 3,157 Non-current assets 299 160 –––––– –––––– Total assets 3,018 3,317 –––––– –––––– Total liabilities 1,531 1,534 –––––– –––––– Net assets 1,487 1,783 ===== =====

- 97 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 18. Investment in associate (contd.) Summarised statement of profit or loss and other comprehensive income:

Multi Brilliance Resources Sdn. Bhd. 2021 2020

RM’000 RM’000

Revenue 5,969 9,679 Profit before tax 605 1,241 Profit for the year, representing total comprehensive income for the period 204 1,003 Dividend paid (500) - ====== ====== Reconciliation of the summarised financial information presented above to the carrying amount of the Group’s interest in associate:

Multi Brilliance Resources Sdn. Bhd.

2021 2020 RM’000 RM’000

Net assets at the 1 February 2020/2019 1,783 780 Profit for the year 204 1,003 Dividend received (500) - –––––– –––––– Net assets at 31 January 2021/2020 1,487 1,783 ===== =====

Share of Group’s interests in associate 446 535 Share of profit for the year 61 301 Dividend received (150) - ===== =====



- 98 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 19. Financial instruments

Categories of financial instruments

The table below provides an analysis of the Group’s and the Company’s financial instruments as at the reporting date are categorised as follows:

Financial assets

Carrying Amortised At amount cost FVTPL Group RM’000 RM’000 RM’000

2021

Other investments 920 - 920 Trade and other receivables 52,590 52,590 - Cash and bank balances 9,801 9,801 - –––––––– –––––––– –––––––– 63,311 62,391 920 ======= ======= =======

2020 Other investments 910 - 910 Trade and other receivables 47,292 47,292 - Cash and bank balances 11,763 11,763 - –––––––– –––––––– –––––––– 59,965 59,055 910 ======= ======= =======

Financial liabilities Carrying Amortised At amount cost FVTPL Group RM’000 RM’000 RM’000

2021 Trade and other payables 63,684 63,684 - Loans and borrowings 67,860 67,860 - –––––––– –––––––– –––––––– 131,544 131,544 - ======= ======= =======


- 99 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 19. Financial instruments (contd.)

Categories of financial instruments (contd.)

The table below provides an analysis of the Group’s and the Company’s financial instruments as at the reporting date are categorised as follows: (contd.)

Financial assets Carrying Amortised At Company amount cost FVTPL RM’000 RM’000 RM’000

2021 Other investments 77 - 77 Trade and other receivables 25,308 25,308 - Cash and bank balances 115 115 - ––––––––– ––––––––– ––––––––– 25,500 25,423 77 ======== ======== ========


Financial liabitlies Carrying Amortised At Company amount cost FVTPL RM’000 RM’000 RM’000 2021 Trade and other payables 14,003 14,003 - Loans and borrowings 11,299 11,299 - ––––––––– ––––––––– ––––––––– 25,302 25,302 - ======== ======== ========

2020 Trade and other payables 9,193 9,193 - Loans and borrowings 16,293 16,293 - ––––––––– ––––––––– ––––––––– 25,486 25,486 - ======== ======== ========



- 98 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 19. Financial instruments

Categories of financial instruments

The table below provides an analysis of the Group’s and the Company’s financial instruments as at the reporting date are categorised as follows:

Financial assets

Carrying Amortised At amount cost FVTPL Group RM’000 RM’000 RM’000

2021

Other investments 920 - 920 Trade and other receivables 52,590 52,590 - Cash and bank balances 9,801 9,801 - –––––––– –––––––– –––––––– 63,311 62,391 920 ======= ======= =======

2020 Other investments 910 - 910 Trade and other receivables 47,292 47,292 - Cash and bank balances 11,763 11,763 - –––––––– –––––––– –––––––– 59,965 59,055 910 ======= ======= =======

Financial liabilities Carrying Amortised At amount cost FVTPL Group RM’000 RM’000 RM’000



- 99 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 19. Financial instruments (contd.)

Categories of financial instruments (contd.)

The table below provides an analysis of the Group’s and the Company’s financial instruments as at the reporting date are categorised as follows: (contd.)

Financial assets Carrying Amortised At Company amount cost FVTPL RM’000 RM’000 RM’000



Financial liabitlies Carrying Amortised At Company amount cost FVTPL RM’000 RM’000 RM’000 2021 Trade and other payables 14,003 14,003 - Loans and borrowings 11,299 11,299 - ––––––––– ––––––––– ––––––––– 25,302 25,302 - ======== ======== ========

2020 Trade and other payables 9,193 9,193 - Loans and borrowings 16,293 16,293 - ––––––––– ––––––––– ––––––––– 25,486 25,486 - ======== ======== ========



- 100 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 20. Other investments Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Non-current Financial assets at fair value through profit or loss Equity instruments (quoted in Malaysia) 50 49 - - Equity instruments (unquoted) 437 437 - - –––––– –––––– ––––– ––––– Total other investments (non-current) 487 486 - - –––––– –––––– ––––– ––––– Current Financial assets at fair value through profit or loss Investment in money market fund (unquoted) 433 424 77 76 –––––– –––––– ––––– ––––– Total investments 920 910 77 76 ===== ===== ===== ===== Market value: Equity instruments (quoted in Malaysia) 50 49 - - Equity instruments (unquoted) 437 437 - - Investment in money market fund 433 424 77 76 –––––– –––––– ––––– ––––– 920 910 77 76 ===== ===== ===== =====

- 101 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 21. Inventories Group 2021 2020 RM’000 RM’000 At cost Raw materials 5,738 5,513 Sawn timber 3,678 4,266 Semi-finished and finished goods 16,062 14,057 Spare parts and consumables 120 113 Properties held for sale 11,053 11,053 Others 28 15 Goods-in-transit 1,524 - –––––– –––––– 38,203 35,017 At net realisable value Finished goods 645 646 –––––– –––––– 38,848 35,663 ====== ====== During the year, inventories recognised as an expense in cost of sales of the Group was

RM58,374,593 (2020: RM86,751,109).

Certain parcels of vacant land and shophouses under properties held for sale of the Group amounting to RM3,048,701 (2020: RM3,048,701) are pledged as securities for borrowings as disclosed in Note 27.



- 102 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 22. Trade and other receivables Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000

Current

Trade receivables Third parties 46,917 44,081 720 720 Amounts due from related parties 757 166 - - Amount due from an associate - 1,519 - - Retention sum on contract (Note 24) 1,525 1,525 - - –––––– –––––– –––––– –––––– 49,199 47,291 720 720 Less: Allowance for impairment (17,827) (19,263) (720) (720) –––––– –––––– –––––– –––––– Trade receivables, net 31,372 28,028 - - –––––– –––––– –––––– –––––– Other receivables Amounts due from subsidiaries - - 24,478 24,453 Amounts due from related parties 888 151 371 118 Deposits 8,681 9,067 75 75 Sundry receivables 14,073 11,510 917 1,126 –––––– ––––––– –––––– –––––– 23,642 20,728 25,841 25,772 Less: Allowance for impairment (5,859) (5,792) (533) (533) –––––– ––––––– –––––– –––––– Other receivables, net 17,783 14,936 25,308 25,239 –––––– ––––––– –––––– –––––– Total trade and other receivables (current) 49,155 42,964 25,308 25,239 –––––– ––––––– –––––– –––––– Non-current

Other receivables Third party 4,157 5,079 - - Less: Allowance for impairment (722) (751) - - –––––– ––––––– –––––– –––––– Other receivables, net 3,435 4,328 - - –––––– ––––––– –––––– –––––– Total trade and other receivables 52,590 47,292 25,308 25,239 ===== ===== ===== =====

- 103 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 22. Trade and other receivables (contd.)

(a) Trade receivables

Trade receivables are non-interest bearing and are generally on 60 to 90 days (2020: 60 to 90 days) terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

Included in trade receivables of the Group and of the Company are amount totalling RM756,713 (2020: RM1,685,005) due from companies in which certain directors of the Group has substantial financial interest and from an associate. The amounts are subject to the same terms disclosed above.

Further details on related party transactions are disclosed in Note 33.

Information about the credit exposures are disclosed in Note 35(a).

The Group and the Company measure the loss allowance for trade receivables at an amount equal to lifetime expected credit loss (“ECL”). The expected credit losses on trade receivables are estimated using provision matrices by reference to past default experience of debtors and analysis of the debtors’ current financial position, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date. The Group and the Company have recognised a loss allowance of 100% against all trade receivables over 365 days past due because historical experience has indicated that these receivables are generally not recoverable.

There has been no change in the estimation techniques or significant assumptions made during the current reporting period. The Group and the Company write off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, i.e. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or when the trade receivables are over two years past due, whichever occurs earlier. None of the trade receivables that have been written off were subject to enforcement activities.



- 102 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 22. Trade and other receivables Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000

Current

Trade receivables Third parties 46,917 44,081 720 720 Amounts due from related parties 757 166 - - Amount due from an associate - 1,519 - - Retention sum on contract (Note 24) 1,525 1,525 - - –––––– –––––– –––––– –––––– 49,199 47,291 720 720 Less: Allowance for impairment (17,827) (19,263) (720) (720) –––––– –––––– –––––– –––––– Trade receivables, net 31,372 28,028 - - –––––– –––––– –––––– –––––– Other receivables Amounts due from subsidiaries - - 24,478 24,453 Amounts due from related parties 888 151 371 118 Deposits 8,681 9,067 75 75 Sundry receivables 14,073 11,510 917 1,126 –––––– ––––––– –––––– –––––– 23,642 20,728 25,841 25,772 Less: Allowance for impairment (5,859) (5,792) (533) (533) –––––– ––––––– –––––– –––––– Other receivables, net 17,783 14,936 25,308 25,239 –––––– ––––––– –––––– –––––– Total trade and other receivables (current) 49,155 42,964 25,308 25,239 –––––– ––––––– –––––– –––––– Non-current

Other receivables Third party 4,157 5,079 - - Less: Allowance for impairment (722) (751) - - –––––– ––––––– –––––– –––––– Other receivables, net 3,435 4,328 - - –––––– ––––––– –––––– –––––– Total trade and other receivables 52,590 47,292 25,308 25,239 ===== ===== ===== =====

- 103 -


(a) Trade receivables

Trade receivables are non-interest bearing and are generally on 60 to 90 days (2020: 60 to 90 days) terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

Included in trade receivables of the Group and of the Company are amount totalling RM756,713 (2020: RM1,685,005) due from companies in which certain directors of the Group has substantial financial interest and from an associate. The amounts are subject to the same terms disclosed above.


Information about the credit exposures are disclosed in Note 35(a).

The Group and the Company measure the loss allowance for trade receivables at an amount equal to lifetime expected credit loss (“ECL”). The expected credit losses on trade receivables are estimated using provision matrices by reference to past default experience of debtors and analysis of the debtors’ current financial position, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date. The Group and the Company have recognised a loss allowance of 100% against all trade receivables over 365 days past due because historical experience has indicated that these receivables are generally not recoverable.

There has been no change in the estimation techniques or significant assumptions made during the current reporting period. The Group and the Company write off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, i.e. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or when the trade receivables are over two years past due, whichever occurs earlier. None of the trade receivables that have been written off were subject to enforcement activities.



- 104 -


(a) Trade receivables (contd.)

The movements in the allowance for impairment losses in respect of the Group’s and the Company’s trade receivables during the year are shown below:

Trade receivables Lifetime Credit ECL impaired Total RM’000 RM’000 RM’000 Group

At 1 February 2019 12,349 6,545 18,894 Net remeasurement of loss allowance 231 138 369 –––––––– ––––––– ––––––– At 31 January 2020/1 February 2020 12,580 6,683 19,263 Net remeasurement of loss allowance (1,374) (62) (1,436) –––––––– ––––––– ––––––– At 31 January 2021 11,206 6,621 17,827 ======= ====== ======

Trade receivables Lifetime Credit ECL impaired Total RM’000 RM’000 RM’000 Company

At 1 February 2020/2019 and 31 January 2021/2020 - 720 720 ======= ====== ======

The movements in the allowance for impairment losses of the Group’s and the Company’s trade receivables during the financial year are shown below:

Group Company RM’000 RM’000 RM’000 RM’000

At 1 February 2020/2019 19,263 18,894 720 720 Charges for the year (Note 7) 152 710 - - Reversal of impairment loss (Note 5) (616) (268) - - Amount written off (972) (73) - - –––––– –––––– –––––– –––––– At 31 January 2021/2020 17,827 19,263 720 720

===== ===== ===== =====

- 105 -


(b) Amounts due from related parties These amounts arose from miscellaneous billings to certain companies in which certain directors of the Company have financial interests. These amounts are unsecured, non-interest bearing and are repayable on demand.


(c) Other receivables Other receivables that are impaired The movements in the allowance for impairment in respect of the Group’s and the Company’s other receivables during the year are shown below:

Other receivables Credit impaired

RM’000 Group At 1 February 2019 6,545 Net remeasurement of loss allowance (2) –––––––– At 31 January 2020 and 1 February 2020 6,543 Net remeasurement of loss allowance 38 –––––––– At 31 January 2021 6,581 =======


RM’000 Company

At 1 February 2020/2019 and 31 January 2021/2020 533 =======



- 104 -


(a) Trade receivables (contd.)

The movements in the allowance for impairment losses in respect of the Group’s and the Company’s trade receivables during the year are shown below:

Trade receivables Lifetime Credit ECL impaired Total RM’000 RM’000 RM’000 Group

At 1 February 2019 12,349 6,545 18,894 Net remeasurement of loss allowance 231 138 369 –––––––– ––––––– ––––––– At 31 January 2020/1 February 2020 12,580 6,683 19,263 Net remeasurement of loss allowance (1,374) (62) (1,436) –––––––– ––––––– ––––––– At 31 January 2021 11,206 6,621 17,827 ======= ====== ======

Trade receivables Lifetime Credit ECL impaired Total RM’000 RM’000 RM’000 Company

At 1 February 2020/2019 and 31 January 2021/2020 - 720 720 ======= ====== ======

The movements in the allowance for impairment losses of the Group’s and the Company’s trade receivables during the financial year are shown below:


At 1 February 2020/2019 19,263 18,894 720 720 Charges for the year (Note 7) 152 710 - - Reversal of impairment loss (Note 5) (616) (268) - - Amount written off (972) (73) - - –––––– –––––– –––––– –––––– At 31 January 2021/2020 17,827 19,263 720 720

===== ===== ===== =====

- 105 -


(b) Amounts due from related parties These amounts arose from miscellaneous billings to certain companies in which certain directors of the Company have financial interests. These amounts are unsecured, non-interest bearing and are repayable on demand.


(c) Other receivables Other receivables that are impaired The movements in the allowance for impairment in respect of the Group’s and the Company’s other receivables during the year are shown below:


RM’000 Group At 1 February 2019 6,545 Net remeasurement of loss allowance (2) –––––––– At 31 January 2020 and 1 February 2020 6,543 Net remeasurement of loss allowance 38 –––––––– At 31 January 2021 6,581 =======


RM’000 Company

At 1 February 2020/2019 and 31 January 2021/2020 533 =======



- 106 -


(c) Other receivables (contd.) Other receivables that are impaired (contd.)

The movements in the allowance for impairment losses of the Group’s and the Company’s other receivables were shown below:


At 1 February 2020/2019 6,543 6,545 533 533 Charges for the year (Note 7) 38 - - - Reversal of impairment loss (Note 5) - (2) - - –––––– –––––– –––––– –––––– At 31 January 2021/2020 6,581 6,543 533 533

===== ===== ===== ===== (d) Amounts due from subsidiaries

These amounts are unsecured and are repayable on demand. The amount bears interest ranging from 4.16% to 6.00% (2020: 5.00% to 6.28%)

Further details on related party transactions are disclosed in Note 33. 23. Other current assets Group 2021 2020 RM’000 RM’000 Contract assets from construction contracts (Note 24) 11,324 - Contract assets from property development (Note 24) 89 89 GST receivable - 204 Prepayments 4,686 2,764 Properties held for sale (Note 25) 4,867 5,375 –––––– –––––– 20,966 8,432 ===== =====

Included in prepayments are amounts totalling RM2,658,244 (2020: 1,767,818) paid to a supplier for prepayment for services to be used in the Group’s road maintenance segment.


- 106 -


(c) Other receivables (contd.) Other receivables that are impaired (contd.)

The movements in the allowance for impairment losses of the Group’s and the Company’s other receivables were shown below:


At 1 February 2020/2019 6,543 6,545 533 533 Charges for the year (Note 7) 38 - - - Reversal of impairment loss (Note 5) - (2) - - –––––– –––––– –––––– –––––– At 31 January 2021/2020 6,581 6,543 533 533

===== ===== ===== ===== (d) Amounts due from subsidiaries

These amounts are unsecured and are repayable on demand. The amount bears interest ranging from 4.16% to 6.00% (2020: 5.00% to 6.28%)

Further details on related party transactions are disclosed in Note 33. 23. Other current assets Group 2021 2020 RM’000 RM’000 Contract assets from construction contracts (Note 24) 11,324 - Contract assets from property development (Note 24) 89 89 GST receivable - 204 Prepayments 4,686 2,764 Properties held for sale (Note 25) 4,867 5,375 –––––– –––––– 20,966 8,432 ===== =====

Included in prepayments are amounts totalling RM2,658,244 (2020: 1,767,818) paid to a supplier for prepayment for services to be used in the Group’s road maintenance segment.

Not

es t

o th

e Fi

nan

cial

Sta

tem

ents

For

The

Fin

anci

al Y

ear

End

ed 3

1 Jan

uar

y 20

21 (C

ontd

.)

- 10

7 -

Regi

strat

ion

No:

199

6010

0593

6 (3

7828

2-D

) Q

ualit

y C

oncr

ete H

oldi

ngs B

erha

d N

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to th

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- 109 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 24. Contract assets/(contract liabilities) (contd.)

Group 2021 2020 RM’000 RM’000 Retention sums on construction contracts included in: - trade receivables (Note 22) 1,525 1,525 - trade payables (Note 28) 4,959 3,667 - trade payables – related parties (Note 28) 240 240 ======= ====== 25. Properties held for sale Group RM’000 RM’000 At 1 February 2020/2019 5,375 2,679 Additions 519 4,107 Amortisation for the year (Note 7) (11) (22) Disposal (1,016) (1,389) –––––– –––––– At 31 January 2021/2020 4,867 5,375 ===== =====

These are properties in which the Group received in consideration of settlement of debts due to the Group. Included herein is a property with a carrying amount of RM70,314 (2020: RM75,751) registered in the name of a third party.

26. Cash and bank balances Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Cash on hand and at bank 9,701 11,663 115 121 Deposit with a licenced bank 100 100 - - –––––– –––––– ––––– ––––– Cash and bank balances 9,801 11,763 115 121 ===== ===== ==== ====

The weighted average effective interest rate (“WAEIR”) of short-term deposits with licensed banks of the Group at the reporting date is 1.62% (2020: 3.25%) per annum with an average maturity of 30 days (2020: 30 days).



- 109 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 24. Contract assets/(contract liabilities) (contd.)

Group 2021 2020 RM’000 RM’000 Retention sums on construction contracts included in: - trade receivables (Note 22) 1,525 1,525 - trade payables (Note 28) 4,959 3,667 - trade payables – related parties (Note 28) 240 240 ======= ====== 25. Properties held for sale Group RM’000 RM’000 At 1 February 2020/2019 5,375 2,679 Additions 519 4,107 Amortisation for the year (Note 7) (11) (22) Disposal (1,016) (1,389) –––––– –––––– At 31 January 2021/2020 4,867 5,375 ===== =====

These are properties in which the Group received in consideration of settlement of debts due to the Group. Included herein is a property with a carrying amount of RM70,314 (2020: RM75,751) registered in the name of a third party.

26. Cash and bank balances Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Cash on hand and at bank 9,701 11,663 115 121 Deposit with a licenced bank 100 100 - - –––––– –––––– ––––– ––––– Cash and bank balances 9,801 11,763 115 121 ===== ===== ==== ====

The weighted average effective interest rate (“WAEIR”) of short-term deposits with licensed banks of the Group at the reporting date is 1.62% (2020: 3.25%) per annum with an average maturity of 30 days (2020: 30 days).



- 110 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 26. Cash and bank balances (contd.) For the purpose of the statements of cash flows, cash and cash equivalents comprise the

following as at the reporting date: Group Company

2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Cash and bank balances 9,801 11,763 115 121 Bank overdrafts (Note 27) (13,385) (13,465) (5,568) (5,501) –––––– ––––– ––––– ––––– Total cash and cash equivalents (3,584) (1,702) (5,453) (5,380) ===== ==== ==== ====

27. Loans and borrowings Group Company

2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000

Current

Secured: Bank overdrafts (Note 26) 13,385 13,334 5,568 5,501 Bankers’ acceptances 28,673 19,412 - - Term loans 1,051 1,954 - - Revolving credit 10,500 15,500 5,500 10,500 Lease liabilities 1,933 2,066 64 61 –––––– –––––– –––––– –––––– 55,542 52,266 11,132 16,062 –––––– –––––– –––––– –––––– Unsecured: Bank overdrafts (Note 26) - 131 - - Bankers’ acceptances 7,369 16,399 - -

–––––– –––––– –––––– –––––– 7,369 16,530 - - –––––– –––––– –––––– –––––– 62,911 68,796 11,132 16,062 –––––– –––––– –––––– ––––––

- 111 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 27. Loans and borrowings (contd.) Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000

Non-current

Secured:

Term loans 1,961 2,950 - - Lease liabilities 2,988 3,313 167 231 –––––– –––––– –––––– –––––– 4,949 6,263 167 231 –––––– –––––– –––––– –––––– Total loans and borrowings 67,860 75,059 11,299 16,293 ===== ===== ===== =====

The remaining maturities of loans and borrowings as at the reporting date are as follows:

Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 On demand or within 1 year 62,911 68,796 11,132 16,062 More than 1 year or less than 2 years 2,151 2,845 167 64 More than 2 years or less than 5 years 1,088 2,336 - 167 More than 5 years 1,710 1,082 - - –––––– –––––– –––––– –––––– 67,860 75,059 11,299 16,293 ===== ===== ===== =====

The interest rates of the Group and of the Company are as follows:

Group Company 2021 2020 2021 2020 % % % % Bank overdrafts 5.85 to 8.64 7.10 to 8.64 5.85 to 7.97 7.10 to 8.47 Bankers’ acceptances 2.25 to 5.59 2.25 to 5.59 - - Term loans 4.15 to 8.14 4.15 to 8.14 - - Revolving credit 4.16 to 6.28 5.00 to 6.28 4.16 to 6.00 5.00 to 6.28 Lease liabilities 2.31 to 6.51 2.31 to 7.00 5.00 5.00 ========= ========= ========= =========



- 112 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 27. Loans and borrowings (contd.)

(a) Bank overdrafts

Bank overdrafts of the Company are denominated in RM which are secured by a third party first legal charge over 6 parcels of vacant land as disclosed in Note 15.

Bank overdrafts of a subsidiary are denominated in RM which are secured by a third party first legal charge over a property as disclosed in Note 12, a first party first and second legal charge over 2 parcels of vacant land as disclosed in Note 14, a first party, first legal charge over 10 units of shophouses as disclosed in Note 14 and a corporate guarantee from the Company.

(b) Bankers’ acceptances

The bankers’ acceptances are secured by a fixed and floating charge over the leasehold property as disclosed in Note 12 and by corporate guarantee from the Company.

(c) Revolving credits

Revolving credit of the Company is secured by a third party first legal charge over 6 parcels of vacant land as disclosed in Note 15.

Revolving credit of a subsidiary is secured by first party first and second legal charge over one parcel of vacant land as disclosed in Note 15 and corporate guarantees from the Company.

(d) Term loans

Term loan of a subsidiary is secured by a first party first and second legal charge over 2 parcels of vacant land and a first party charge over 1 parcel of land attached with 3-storey shophouse as disclosed in Note 14, first legal charge over 10 units of shophouses as disclosed in Note 14 and a corporate guarantee of the Company. This loan is to be repaid over a period of 10 years inclusive of the first three years grace period of interest servicing.

- 113 -


(e) Lease liabilities

The movement of lease liabilities during the financial year is as follows: Group Company RM’000 RM’000 RM’000 RM’000

At 1 February 2019/2020 5,379 - 292 - Effect of adoption of MFRS 16: - Recognition - 2,103 - 349 - Reclassification - 3,805 - - Additions 1,686 1,919 - - Accretion of interest charged (Note 6) 262 326 13 16 Payment of: - principal (2,144) (2,448) (61) (57) - interest (262) (326) (13) (16)

–––––– –––––– –––––– –––––– At 31 January 2020/2021 4,921 5,379 231 292

===== ===== ===== =====

Analysed as follows: Current 1,933 2,066 64 61 Non-current 2,988 3,313 167 231

–––––– –––––– –––––– –––––– 4,921 5,379 231 292

===== ===== ===== =====

The expenses relating to payments not included in the measurement of the lease liabilities are as follows:


Depreciation of right-of-use assets 335 874 64 117 Interest expense on finance leases 262 326 13 16 Expenses relating to short-term leases 174 471 - - Expenses relating to leases of low-value assets 2 12 - - ===== ===== ===== =====



- 112 -


(a) Bank overdrafts

Bank overdrafts of the Company are denominated in RM which are secured by a third party first legal charge over 6 parcels of vacant land as disclosed in Note 15.

Bank overdrafts of a subsidiary are denominated in RM which are secured by a third party first legal charge over a property as disclosed in Note 12, a first party first and second legal charge over 2 parcels of vacant land as disclosed in Note 14, a first party, first legal charge over 10 units of shophouses as disclosed in Note 14 and a corporate guarantee from the Company.

(b) Bankers’ acceptances

The bankers’ acceptances are secured by a fixed and floating charge over the leasehold property as disclosed in Note 12 and by corporate guarantee from the Company.

(c) Revolving credits

Revolving credit of the Company is secured by a third party first legal charge over 6 parcels of vacant land as disclosed in Note 15.

Revolving credit of a subsidiary is secured by first party first and second legal charge over one parcel of vacant land as disclosed in Note 15 and corporate guarantees from the Company.

(d) Term loans

Term loan of a subsidiary is secured by a first party first and second legal charge over 2 parcels of vacant land and a first party charge over 1 parcel of land attached with 3-storey shophouse as disclosed in Note 14, first legal charge over 10 units of shophouses as disclosed in Note 14 and a corporate guarantee of the Company. This loan is to be repaid over a period of 10 years inclusive of the first three years grace period of interest servicing.

- 113 -


(e) Lease liabilities

The movement of lease liabilities during the financial year is as follows: Group Company RM’000 RM’000 RM’000 RM’000

At 1 February 2019/2020 5,379 - 292 - Effect of adoption of MFRS 16: - Recognition - 2,103 - 349 - Reclassification - 3,805 - - Additions 1,686 1,919 - - Accretion of interest charged (Note 6) 262 326 13 16 Payment of: - principal (2,144) (2,448) (61) (57) - interest (262) (326) (13) (16)

–––––– –––––– –––––– –––––– At 31 January 2020/2021 4,921 5,379 231 292

===== ===== ===== =====

Analysed as follows: Current 1,933 2,066 64 61 Non-current 2,988 3,313 167 231

–––––– –––––– –––––– –––––– 4,921 5,379 231 292

===== ===== ===== =====

The expenses relating to payments not included in the measurement of the lease liabilities are as follows:


Depreciation of right-of-use assets 335 874 64 117 Interest expense on finance leases 262 326 13 16 Expenses relating to short-term leases 174 471 - - Expenses relating to leases of low-value assets 2 12 - - ===== ===== ===== =====



- 114 -


(e) Lease liabilities (contd.)

The Group and the Company had total cash outflows for leases as follows:

Group Company 2021 2020 2021 2020 RM RM RM RM

Total cash outflow for leases 2,584,281 3,256,181 73,525 73,525 ======= ======= ======= ======= There were no leases with residual value guarantee or leases not yet commenced to which the Group and the Company are committed.

Other information on financial risks of loans and borrowings are disclosed in Note 36. Change in liabilities arising from financing activities


At 1 February 2020/2019 75,059 71,673 16,293 21,031 Addition to lease liabilities (Note 12(e)) 1,686 1,919 - - Drawdown of bankers’ acceptances 231 8,842 - - Effect of adoption of MFRS 16 - 2,103 - 349 Repayment of lease liabilities (2,144) (2,448) (61) (57) Repayment of term loan (1,892) (1,248) - - Repayment of revolving credit (5,000) (5,000) (5,000) (5,000) (Repayment)/addition in bank overdraft (80) (782) 67 (30) –––––– –––––– –––––– –––––– At 31 January 2021/2020 67,860 75,059 11,299 16,293 ===== ===== ===== =====

- 115 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 28. Trade and other payables Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Trade payables Third parties 31,024 16,292 - - Retention sum - third parties (Note 24) 4,959 3,667 - - Retention sum - related parties (Note 24) 240 240 - - Amounts due to related parties 9,638 5,891 - - ––––––– ––––––– ––––––– ––––––– 45,861 26,090 - - ––––––– ––––––– ––––––– ––––––– Other payables Accruals 7,783 2,160 364 206 Amounts due to subsidiary companies - - 13,577 8,937 Amount due to a related party 9 154 - - Sundry payables 9,891 6,982 62 50 Deposits 140 155 - - ––––––– ––––––– ––––––– ––––––– 17,823 9,451 14,003 9,193 ––––––– ––––––– ––––––– ––––––– Total trade and other payables 63,684 35,541 14,003 9,193 ====== ====== ====== ======

(a) Trade payables

Trade payables are non-interest bearing and the normal trade credit terms granted

to the Group range from 30 to 120 days (2020: 30 to 120 days).

Included in trade payables of the Group are amounts totalling RM9,877,599 (2020: RM6,131,372) due to companies in which certain directors of the Group and of the Company have substantial financial interest. These amounts are unsecured, non-interest bearing and are subject to the normal trade terms.



- 116 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 28. Trade and other payables

(b) Sundry payables

These amounts are unsecured, non-interest bearing and payable on demand.

(c) Amounts due to subsidiary companies and related party

These amounts are unsecured, non-interest bearing and are payable on demand. Other information on financial risk of the other payables are disclosed in Note 35.

29. Deferred tax liabilities/(assets) Group RM’000 RM’000

At 1 February 2020/2019 1,442 1,591 Recognised in statements of profit or loss and other comprehensive income (Note 10) (599) (149) ––––– ––––– At 31 January 2021/2020 843 1,442 ==== ====

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set-off current tax assets against current tax liabilities and when the deferred income taxes relate to the same tax authority. The net deferred tax assets and liabilities shown on the statement of financial position after appropriate offsetting are as follows:

Group 2021 2020 RM’000 RM’000

Deferred tax assets (704) (209) Deferred tax liabilities 1,547 1,651 ––––– ––––– 843 1,442 ==== ====

- 117 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 29. Deferred tax liabilities/(assets) (contd.) Deferred tax assets and liabilities prior to offsetting are summarised as follows: Group 2021 2020 RM’000 RM’000 Deferred tax assets (3,343) (2,041) Deferred tax liabilities 4,186 3,483 ––––– ––––– 843 1,442 ==== ==== Deferred tax assets of the Group Unutilised business losses and unabsorbed capital allowances Others Total RM’000 RM’000 RM’000

At 1 February 2019 (995) (956) (1,951) Recognised in statements of profit or loss and other comprehensive income (46) (44) (90) ––––– ––––– ––––– At 31 January 2020 (1,041) (1,000) (2,041) Recognised in statements of profit or loss and other comprehensive income (311) (991) (1,302) ––––– ––––– ––––– At 31 January 2021 (1,352) (1,991) (3,343) ==== ==== ==== Deferred tax liabilities of the Group

Property plant and equipment RM’000

At 1 February 2019 3,542

Recognised in statements of profit or loss and other comprehensive income (59) –––––– At 31 January 2020 3,483 Recognised in statements of profit or loss and other comprehensive income 703 –––––– At 31 January 2021 4,186 =====



- 118 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 29. Deferred tax liabilities/(assets) (contd.) Deferred tax assets have not been recognised in respect of the following items: Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Unutilised tax losses 13,417 12,313 - - Unabsorbed capital allowances 14,989 12,077 - - Other deductible temporary differences 4,071 4,631 173 124 –––––– –––––– –––––– –––––– 32,477 29,021 173 124 ===== ===== ===== ===== Deferred tax asset @ 24%, if recognised 7,794 6,965 42 30 ===== ===== ===== =====

At the reporting date, the Group has losses and allowances as shown above that are available for offset against future taxable profits of the Group, for which no deferred tax asset is recognised due to uncertainty of their recoverability and they may not be used to offset taxable profits elsewhere in the Group.

30. Share capital Number of ordinary shares Amount ’000 ’000 RM’000 RM’000 Group and Company Issued and fully paid At 1 February 2020/2019 and 31 January 2021/2020 57,962 57,962 82,956 82,956 ===== ===== ===== ===== The holders of ordinary shares are entitled to receive dividends as and when declared by

the Company. All ordinary shares carry one vote per share without restrictions and rank equally with regard to the Company’s residual assets.

- 119 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 31. Other reserves Foreign exchange reserve RM’000 RM’000 Group At 1 February 2020/2019 482 397 Foreign currency translation 8 85 ––––– ––––– At 31 January 2021/2020 490 482 ==== ==== Foreign exchange reserve The foreign exchange reserve is used to record exchange differences arising from the

translation of the financial statements of a foreign subsidiary whose functional currency is different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s net investment in foreign subsidiary, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign subsidiary.

32. Commitments Capital commitments Group 2021 2020 RM’000 RM’000

Approved and contracted for - Plant and machineries 11,106 -

======== ======



- 120 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 33. Related party disclosures

In addition to the transactions detailed elsewhere in the financial statements, the Group and

the Company had the following transactions with related parties during the financial year, in the normal course of business and transacted on terms agreed by both parties:

(a) Sale and purchase of goods and services

Company 2021 2020 RM’000 RM’000 (i) Transactions with subsidiaries:

Income Rental income (180) (180) Dividend income (1,750) (750) Interest income (374) (675)

==== ==== Expenditure Construction works 283 -

==== ==== Information regarding outstanding balances with subsidiaries as at 31

January 2021 is disclosed in Note 22 and 28. Group 2021 2020 RM’000 RM’000

(ii) Transaction with an associate: Income

Sale of pipes (5,405) (7,896) ====== =====

Information regarding outstanding balance with an associate as at 31 January 2021 is disclosed in Note 22.

- 121 -



Notes to the Financial Statements For the financial year ended 31 January 2021 33. Related party disclosures (contd.)

(a) Sale and purchase of goods and services (contd.)

(iii) Transactions with companies in which certain Directors of the Company and/or persons connected to them have a substantial financial interest and/or are directors: Group Company

2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Income

Sale of pipe/fittings to: - Limba Jaya Sdn. Bhd. (i) - (1) - - Sale of pipe/fittings and sawn timber to: - Lee Ling Timber Sdn. Bhd. (ii) (19) (58) - - Sale of concrete, cement, steel bars, R.C. piles, sawn timber and stones to: - Lee Ling Construction & Development Sdn. Bhd. (iii) (16) (335) - - Rental income from: - Lee Ling Construction & Development Sdn. Bhd. (iii) (43) (47) (43) (43) Rental income from: - Lee Ling Timber Sdn. Bhd.(ii) (240) (240) - -

Expenditure

Construction works from: - Lee Ling Construction & Development Sdn. Bhd. (iii) - 200 - - Freight charges from: - Lee Ling Timber Sdn. Bhd.(ii) - 97 - - Purchase of logs and sawn timber from: - Lee Ling Timber Sdn. Bhd. (ii) 8,621 7,068 - - Purchase of finished goods and raw materials from: - ABTP Marketing Sdn. Bhd. (iv) 4,563 3,584 - - ===== ===== ===== =====



- 120 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 33. Related party disclosures

In addition to the transactions detailed elsewhere in the financial statements, the Group and

the Company had the following transactions with related parties during the financial year, in the normal course of business and transacted on terms agreed by both parties:

(a) Sale and purchase of goods and services

Company 2021 2020 RM’000 RM’000 (i) Transactions with subsidiaries:

Income Rental income (180) (180) Dividend income (1,750) (750) Interest income (374) (675)

==== ==== Expenditure Construction works 283 -

==== ==== Information regarding outstanding balances with subsidiaries as at 31

January 2021 is disclosed in Note 22 and 28. Group 2021 2020 RM’000 RM’000

(ii) Transaction with an associate: Income

Sale of pipes (5,405) (7,896) ====== =====

Information regarding outstanding balance with an associate as at 31 January 2021 is disclosed in Note 22.

- 121 -





(iii) Transactions with companies in which certain Directors of the Company and/or persons connected to them have a substantial financial interest and/or are directors: Group Company

2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 Income

Sale of pipe/fittings to: - Limba Jaya Sdn. Bhd. (i) - (1) - - Sale of pipe/fittings and sawn timber to: - Lee Ling Timber Sdn. Bhd. (ii) (19) (58) - - Sale of concrete, cement, steel bars, R.C. piles, sawn timber and stones to: - Lee Ling Construction & Development Sdn. Bhd. (iii) (16) (335) - - Rental income from: - Lee Ling Construction & Development Sdn. Bhd. (iii) (43) (47) (43) (43) Rental income from: - Lee Ling Timber Sdn. Bhd.(ii) (240) (240) - -

Expenditure

Construction works from: - Lee Ling Construction & Development Sdn. Bhd. (iii) - 200 - - Freight charges from: - Lee Ling Timber Sdn. Bhd.(ii) - 97 - - Purchase of logs and sawn timber from: - Lee Ling Timber Sdn. Bhd. (ii) 8,621 7,068 - - Purchase of finished goods and raw materials from: - ABTP Marketing Sdn. Bhd. (iv) 4,563 3,584 - - ===== ===== ===== =====



- 122 -





(iii) Transactions with companies in which certain Directors of the Company and/or persons connected to them have a substantial financial interest and/or are directors: (contd.) Group Company

2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000

Expenditure (contd.) Subcontractor charges from: - Asas Ulung Sdn. Bhd. (v) - 16,567 - - ===== ===== ===== =====

(i) Tiang Ching Kok is a shareholder and director of Limba Jaya Sdn. Bhd..

(ii) Tiang Ching Kok is a shareholder and director of Lee Ling Timber Sdn. Bhd..

(iii) Tiang Ching Kok is a shareholder of Lee Ling Construction &

Development Sdn. Bhd.. (iv) Chin Yoke Lian is a director of ABTP Marketing Sdn. Bhd..

(v) Asas Ulung Sdn. Bhd. is a corporate shareholder of one of its

subsidiaries. Information regarding outstanding balances arising from related party transactions as at 31 January 2021 are disclosed in Note 22 and 28.

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(b) Year-end balances arising from sale and purchase of goods and services


Receivable/(payable) to Lee Ling Construction & Development Sdn. Bhd. (iii) 450 (4,475) 161 118 (Payable)/receivable from Lee Ling Timber Sdn. Bhd. (ii) (3,384) (1,033) - - Payable to ABTP Marketing Sdn. Bhd. (iv) (1,343) (66) - - Receivable from Asas Ulung Sdn. Bhd. (v) 210 56 210 210 ====== ===== ===== =====

(c) Compensation of key management personnel

The remuneration of directors during the year was as follows:


Executive:

Salaries and other emoluments 1,158 736 176 120 Fees 372 240 24 12 Contributions to defined contribution plans 174 101 26 14 ––––– ––––– ––––– –––– Total executive directors’ remuneration (excluding benefits-in-kind) 1,704 1,077 226 146 Estimated money value of benefits-in-kind 62 36 20 19 ––––– ––––– ––––– –––– Total executive directors’ remuneration (including benefits-in-kind) 1,766 1,113 246 165 ––––– ––––– ––––– ––––



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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 33. Related party disclosures (contd.)

(c) Compensation of key management personnel (contd.)

The remuneration of directors during the year was as follows: (contd.)


Non-executive: Fees 168 180 48 48 Other emoluments 48 48 48 48 ––––– ––––– ––––– –––– Total non-executive directors’ remuneration (excluding benefits-in-kind) 216 228 96 96 Estimated money value of benefits-in-kind 21 21 - - ––––– ––––– ––––– –––– Total non-executive directors’ remuneration (including benefits-in-kind) 237 249 96 96 ––––– ––––– ––––– –––– Total directors’ remuneration 2,003 1,362 342 261 ==== ==== ==== ====

34. Fair value of financial instruments (a) Determination of fair value

For financial instruments measured at fair value, where available, quoted and observable market prices in an active market or dealer price quotations are used to measure fair value. These include listed equity securities and broker quotes on Bloomberg and Reuters.

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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 34. Fair value of financial instruments (contd.)

(a) Determination of fair value (contd.)

Where such quoted and observable market prices are not available, fair values are determined using appropriate valuation techniques, which include the use of mathematical models, such as discounted cash flow models and option pricing models, comparison to similar instruments for which market observable prices exist and other valuation techniques. The objective of valuation techniques is to arrive at a fair value determination that reflects the price of the financial instrument at the reporting date, that would have been determined by market participants acting at arm’s length. Valuation techniques used incorporate assumptions regarding discount rates, interest/profit rate yield curves, estimates of future cash flows and other factors, as applicable. Changes in these assumptions could materially affect the fair values derived. The Group and the Company generally use widely recognised valuation techniques with market observable inputs, if available, for the determination of fair value, which require minimal management judgement and estimation, due to the low complexity of the financial instruments held. MFRS 13 Fair Value Measurement requires each class of assets and liabilities measured at fair value in the statements of financial position after initial recognition to be categorised according to a hierarchy that reflects the significance of inputs used in making the measurements, in particular, whether the inputs used are observable or unobservable. The following levels of hierarchy are used for determining and disclosing the fair value of those financial instruments and non-financial assets:

Level 1 - Quoted market prices: quoted prices (unadjusted) in active market

for identical instruments;

Level 2 - Fair values based on observable inputs: inputs other than quoted prices included within Level 1 that are observable for the instrument, whether directly (i.e. prices) or indirectly (i.e. derived from prices), are used; and

Level 3 - Fair values derived using unobservable inputs: inputs used are not

based on observable market data and the unobservable inputs may have a significant impact on the valuation of the financial instruments and non-financial assets.



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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 33. Related party disclosures (contd.)

(c) Compensation of key management personnel (contd.)

The remuneration of directors during the year was as follows: (contd.)


Non-executive: Fees 168 180 48 48 Other emoluments 48 48 48 48 ––––– ––––– ––––– –––– Total non-executive directors’ remuneration (excluding benefits-in-kind) 216 228 96 96 Estimated money value of benefits-in-kind 21 21 - - ––––– ––––– ––––– –––– Total non-executive directors’ remuneration (including benefits-in-kind) 237 249 96 96 ––––– ––––– ––––– –––– Total directors’ remuneration 2,003 1,362 342 261 ==== ==== ==== ====

34. Fair value of financial instruments (a) Determination of fair value

For financial instruments measured at fair value, where available, quoted and observable market prices in an active market or dealer price quotations are used to measure fair value. These include listed equity securities and broker quotes on Bloomberg and Reuters.

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(a) Determination of fair value (contd.)

Where such quoted and observable market prices are not available, fair values are determined using appropriate valuation techniques, which include the use of mathematical models, such as discounted cash flow models and option pricing models, comparison to similar instruments for which market observable prices exist and other valuation techniques. The objective of valuation techniques is to arrive at a fair value determination that reflects the price of the financial instrument at the reporting date, that would have been determined by market participants acting at arm’s length. Valuation techniques used incorporate assumptions regarding discount rates, interest/profit rate yield curves, estimates of future cash flows and other factors, as applicable. Changes in these assumptions could materially affect the fair values derived. The Group and the Company generally use widely recognised valuation techniques with market observable inputs, if available, for the determination of fair value, which require minimal management judgement and estimation, due to the low complexity of the financial instruments held. MFRS 13 Fair Value Measurement requires each class of assets and liabilities measured at fair value in the statements of financial position after initial recognition to be categorised according to a hierarchy that reflects the significance of inputs used in making the measurements, in particular, whether the inputs used are observable or unobservable. The following levels of hierarchy are used for determining and disclosing the fair value of those financial instruments and non-financial assets:

Level 1 - Quoted market prices: quoted prices (unadjusted) in active market

for identical instruments;

Level 2 - Fair values based on observable inputs: inputs other than quoted prices included within Level 1 that are observable for the instrument, whether directly (i.e. prices) or indirectly (i.e. derived from prices), are used; and

Level 3 - Fair values derived using unobservable inputs: inputs used are not

based on observable market data and the unobservable inputs may have a significant impact on the valuation of the financial instruments and non-financial assets.



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(b) Financial instruments measured at fair value

The following tables provide an analysis of financial instruments and non-financial assets carried at fair values at the reporting date analysed by the various levels within the fair value hierarchy:

Level 1 Level 2 Level 3 Total RM’000 RM’000 RM’000 RM’000 Group

31 January 2021

Financial assets measured at fair value

Other investments - quoted equity instruments 50 - - 50 - unquoted equity instruments - - 437 437 - money market fund - 433 - 433 ===== ===== ===== =====

2020



Company

31 January 2021


Other investments - money market fund - 77 - 77 ===== ===== ===== =====

31 January 2020



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(b) Financial instruments measured at fair value (contd.)

The fair value of Level 1 financial instruments above is based on available quoted market prices.

The fair value of Level 2 financial instruments is based on confirmation by a licensed fund manager regulated by the Securities Commission of Malaysia.

The fair value of the unquoted equity instruments is based on the estimated fair value less cost to sell of these shares.

The Level 3 fair value of the investment properties is disclosed in Note 15.

The Group and the Company recognise transfers between levels of the fair value hierarchy at the end of the reporting period during which the transfer has occurred. The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer. There were no transfers between the Levels of the fair value hierarchy during the financial year.

(c) Financial instruments not measured at fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair values:

Note

Trade and other receivables 22 Loan and borrowings 27 Trade and other payables 28

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or they are already discounted at appropriate discount rates.

35. Financial risk management objectives and policies

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The Group’s and the Company’s principal financial instruments comprise bank overdrafts, other borrowings and cash and short-term deposits. The main purpose of these financial instruments is to manage the Group’s funding and liquidity requirements. The Group and the Company has other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations.



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(b) Financial instruments measured at fair value

The following tables provide an analysis of financial instruments and non-financial assets carried at fair values at the reporting date analysed by the various levels within the fair value hierarchy:

Level 1 Level 2 Level 3 Total RM’000 RM’000 RM’000 RM’000 Group

31 January 2021



2020



Company

31 January 2021



31 January 2020



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(b) Financial instruments measured at fair value (contd.)

The fair value of Level 1 financial instruments above is based on available quoted market prices.

The fair value of Level 2 financial instruments is based on confirmation by a licensed fund manager regulated by the Securities Commission of Malaysia.

The fair value of the unquoted equity instruments is based on the estimated fair value less cost to sell of these shares.

The Level 3 fair value of the investment properties is disclosed in Note 15.

The Group and the Company recognise transfers between levels of the fair value hierarchy at the end of the reporting period during which the transfer has occurred. The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer. There were no transfers between the Levels of the fair value hierarchy during the financial year.

(c) Financial instruments not measured at fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair values:

Note

Trade and other receivables 22 Loan and borrowings 27 Trade and other payables 28

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or they are already discounted at appropriate discount rates.

35. Financial risk management objectives and policies

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The Group’s and the Company’s principal financial instruments comprise bank overdrafts, other borrowings and cash and short-term deposits. The main purpose of these financial instruments is to manage the Group’s funding and liquidity requirements. The Group and the Company has other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations.



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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 35. Financial risk management objectives and policies (contd.)

The Board of Directors, with the assistance of professionals and advisers such as Internal Auditors, Management Executive Committee and Risk Management Committee, has the overall responsibility for the establishment and oversight of the Group’s risk management framework. The Management Executive Committee, represented by the Group Managing Director, Group Executive Director, Executive Director and Chief Financial Officer are the key management personnel responsible for the implementation of decisions and policies formulated by the Board. The Risk Management Committee comprising Executive Directors and senior management staff who are responsible under their respective scope of work for the day-to-day operations carries out risks identification, evaluate, monitor and formulate mitigation strategies on risks identified and periodically review risk management processes and policies. The Audit Committee provides independent oversight to the effectiveness of the risk management process. The key financial risks include credit risk, liquidity risk, interest rate risk, foreign currency risk and market price risk. The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial risks and the objective, policies and processes for the management of these risks. (a) Credit risk

Credit risk is the risk of loss that may arise from the outstanding financial instruments should a counterparty default on its obligations. At the reporting date, the Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivables balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. Where necessary, customers may be requested to provide security before goods are sold. Management does not expect any counterparty to fail to meet its obligations. At the reporting date, the Group’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position. There was no significant concentration of credit risk with any entity.

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Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021

35. Financial risk management objectives and policies (contd.)

(a) Credit risk (contd.)

Trade receivables

• Recognition and measurement of impairment loss

The following table provides information about the exposure to credit risk and ECLs for trade receivables as at the reporting date which are grouped together as they are expected to have similar risk nature.

Gross carrying Loss Net

amount allowance balance RM’000 RM’000 RM’000

Group

31 January 2021

Current (not past due) 18,921 (429) 18,492 1 to 30 days past due 6,321 (213) 6,108 31 to 60 days past due 4,201 (156) 4,045 61 to 90 days past due 414 (117) 297 More than 90 days past due 12,078 (10,291) 1,787 –––––––– ––––––– –––––––– 41,935 (11,206) 30,729 Credit impaired Individually impaired 7,264 (6,621) 643 –––––––– ––––––– –––––––– 49,199 (17,827) 31,372 ======= ====== =======

31 January 2020 Current (not past due) 19,534 (479) 19,055 1 to 30 days past due 3,239 (171) 3,068 31 to 60 days past due 3,339 (197) 3,142 61 to 90 days past due 280 (46) 234 More than 90 days past due 13,826 (11,687) 2,139 –––––––– ––––––– –––––––– 40,218 (12,580) 27,638 Credit impaired Individually impaired 7,073 (6,683) 390 –––––––– ––––––– –––––––– 47,291 (19,263) 28,028 ======= ====== =======



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Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 35. Financial risk management objectives and policies (contd.)

The Board of Directors, with the assistance of professionals and advisers such as Internal Auditors, Management Executive Committee and Risk Management Committee, has the overall responsibility for the establishment and oversight of the Group’s risk management framework. The Management Executive Committee, represented by the Group Managing Director, Group Executive Director, Executive Director and Chief Financial Officer are the key management personnel responsible for the implementation of decisions and policies formulated by the Board. The Risk Management Committee comprising Executive Directors and senior management staff who are responsible under their respective scope of work for the day-to-day operations carries out risks identification, evaluate, monitor and formulate mitigation strategies on risks identified and periodically review risk management processes and policies. The Audit Committee provides independent oversight to the effectiveness of the risk management process. The key financial risks include credit risk, liquidity risk, interest rate risk, foreign currency risk and market price risk. The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial risks and the objective, policies and processes for the management of these risks. (a) Credit risk

Credit risk is the risk of loss that may arise from the outstanding financial instruments should a counterparty default on its obligations. At the reporting date, the Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivables balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. Where necessary, customers may be requested to provide security before goods are sold. Management does not expect any counterparty to fail to meet its obligations. At the reporting date, the Group’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position. There was no significant concentration of credit risk with any entity.

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Trade receivables

• Recognition and measurement of impairment loss

The following table provides information about the exposure to credit risk and ECLs for trade receivables as at the reporting date which are grouped together as they are expected to have similar risk nature.

Gross carrying Loss Net

amount allowance balance RM’000 RM’000 RM’000

Group

31 January 2021

Current (not past due) 18,921 (429) 18,492 1 to 30 days past due 6,321 (213) 6,108 31 to 60 days past due 4,201 (156) 4,045 61 to 90 days past due 414 (117) 297 More than 90 days past due 12,078 (10,291) 1,787 –––––––– ––––––– –––––––– 41,935 (11,206) 30,729 Credit impaired Individually impaired 7,264 (6,621) 643 –––––––– ––––––– –––––––– 49,199 (17,827) 31,372 ======= ====== =======

31 January 2020 Current (not past due) 19,534 (479) 19,055 1 to 30 days past due 3,239 (171) 3,068 31 to 60 days past due 3,339 (197) 3,142 61 to 90 days past due 280 (46) 234 More than 90 days past due 13,826 (11,687) 2,139 –––––––– ––––––– –––––––– 40,218 (12,580) 27,638 Credit impaired Individually impaired 7,073 (6,683) 390 –––––––– ––––––– –––––––– 47,291 (19,263) 28,028 ======= ====== =======



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Trade receivables (contd.)

• Recognition and measurement of impairment loss (contd.)

Gross carrying Loss Net amount allowance balance RM’000 RM’000 RM’000 Company 31 January 2021

More than 90 days past due 720 (720) - ======= ====== ======= 31 January 2020 More than 90 days past due 720 (720) - ======= ====== =======

The movements in the allowance for impairment is disclosed in Note 22.

(b) Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group adopts a prudent approach to managing its liquidity risk. The Group always maintains sufficient cash and cash equivalents, and has available funding through a diverse source of committed and uncommitted credit facilities from various banks.

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35. Financial risk management objectives and policies (contd.) (b) Liquidity risk (contd.), Analysis of financial instruments by remaining contractual maturities

The table below analyses the maturity profile of the Group’s and the Company’s financial liabilities based on contractual undiscounted repayment obligations.

Cash Flows On demand One to Over Carrying or within five five amount one year years years Total RM’000 RM’000 RM’000 RM’000 RM’000 Group 31 January 2021 Financial liabilities: Trade and other payables 63,684 63,684 - - 63,684 Loans and borrowings 67,860 65,218 5,126 5,597 75,941 ––––––– ––––––– ––––– ––––– ––––––– 131,544 128,902 5,126 5,597 139,625 ====== ====== ===== ==== ====== 31 January 2020 Financial liabilities: Trade and other payables 35,541 35,541 - - 35,541 Loans and borrowings 75,059 71,156 5,668 6,530 83,354 ––––––– ––––––– ––––– ––––– ––––––– 110,600 106,697 5,668 6,530 118,895 ====== ====== ===== ==== ======



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35. Financial risk management objectives and policies (contd.) (b) Liquidity risk (contd.)

Analysis of financial instruments by remaining contractual maturities (contd.)

Cash Flows On demand One to Over Carrying or within five five amount one year years years Total RM’000 RM’000 RM’000 RM’000 RM’000

Company 31 January 2021 Financial liabilities: Trade and other payables 14,003 14,003 - - 14,003 Loans and borrowings 11,299 11,215 355 - 11,570 Financial guarantees* - 198,500 - - 198,500 ––––––– ––––––– ––––– ––––– ––––––– 25,302 223,718 355 - 224,073 ====== ====== ===== ==== ====== 31 January 2020 Financial liabilities: Trade and other payables 9,193 9,193 - - 9,193 Loans and borrowings 16,293 16,075 251 - 16,326 Financial guarantees* - 198,500 - - 198,500 ––––––– ––––––– ––––– ––––– ––––––– 25,486 223,768 251 - 224,019 ====== ====== ===== ==== ====== * Based on the maximum amount that can be called under the financial

guarantee contracts

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Notes to the Financial Statements For the financial year ended 31 January 2021 35. Financial risk management objectives and policies (contd.)

(c) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates. The Group’s and the Company’s exposure to market risk for changes in interest rates arise primarily from their fixed/treasury deposits and loans and bank borrowings. The Group and the Company’s fixed/treasury deposits and borrowings at floating rates are contractually re-priced at intervals of less than 6 months (2020: less than 6 months) from the reporting date. Sensitivity analysis for interest rate risk At the reporting date, it is estimated that a thousand basis points increase in interest rate, with all other variables held constant, would increase the Group’s and the Company’s loss net of tax by approximately RM282,504 (2020: RM471,276) and RM51,124 (2020: RM78,832) respectively, arising mainly as a result of higher interest expense on net floating borrowing position. A decrease in interest rate would have had the equal but opposite effect on the aforesaid amount, on the basis that all other variables remain constant.

(d) Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the respective functional currencies of Group entities, primarily RM. The foreign currencies in which these transactions are denominated are mainly US Dollars (“USD”).

The Group’s trade receivable balances at the reporting date have similar exposures. The Group is also exposed to currency translation risk arising from its net investments in foreign operations Brunei Darussalam (“Brunei”). The Group’s net investments in Brunei are not hedged as currency positions in Brunei Dollars is considered to be long-term in nature.



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35. Financial risk management objectives and policies (contd.) (b) Liquidity risk (contd.)

Analysis of financial instruments by remaining contractual maturities (contd.)

Cash Flows On demand One to Over Carrying or within five five amount one year years years Total RM’000 RM’000 RM’000 RM’000 RM’000

Company 31 January 2021 Financial liabilities: Trade and other payables 14,003 14,003 - - 14,003 Loans and borrowings 11,299 11,215 355 - 11,570 Financial guarantees* - 198,500 - - 198,500 ––––––– ––––––– ––––– ––––– ––––––– 25,302 223,718 355 - 224,073 ====== ====== ===== ==== ====== 31 January 2020 Financial liabilities: Trade and other payables 9,193 9,193 - - 9,193 Loans and borrowings 16,293 16,075 251 - 16,326 Financial guarantees* - 198,500 - - 198,500 ––––––– ––––––– ––––– ––––– ––––––– 25,486 223,768 251 - 224,019 ====== ====== ===== ==== ====== * Based on the maximum amount that can be called under the financial

guarantee contracts

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(c) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates. The Group’s and the Company’s exposure to market risk for changes in interest rates arise primarily from their fixed/treasury deposits and loans and bank borrowings. The Group and the Company’s fixed/treasury deposits and borrowings at floating rates are contractually re-priced at intervals of less than 6 months (2020: less than 6 months) from the reporting date. Sensitivity analysis for interest rate risk At the reporting date, it is estimated that a thousand basis points increase in interest rate, with all other variables held constant, would increase the Group’s and the Company’s loss net of tax by approximately RM282,504 (2020: RM471,276) and RM51,124 (2020: RM78,832) respectively, arising mainly as a result of higher interest expense on net floating borrowing position. A decrease in interest rate would have had the equal but opposite effect on the aforesaid amount, on the basis that all other variables remain constant.

(d) Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the respective functional currencies of Group entities, primarily RM. The foreign currencies in which these transactions are denominated are mainly US Dollars (“USD”).

The Group’s trade receivable balances at the reporting date have similar exposures. The Group is also exposed to currency translation risk arising from its net investments in foreign operations Brunei Darussalam (“Brunei”). The Group’s net investments in Brunei are not hedged as currency positions in Brunei Dollars is considered to be long-term in nature.



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(d) Foreign currency risk (contd.)

Sensitivity analysis for foreign currency risk The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible 10% strengthening of the USD and BND exchange rates against the functional currency of the Group, with all other variables held constant.

Group 2021 2020 RM’000 RM’000

United States Dollar 185 (228) Brunei Dollar 139 (168)

==== ==== A 10% weakening of the above foreign currencies against the underlying functional currencies at the reporting date would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

(e) Market price risk Market price risk is the risk that the fair value or future cash flows of the

Group’s financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates).

The Group is exposed to market price risk and the risk of impairment in the value of investments held. The Company manages the risk of impairment by evaluation of investment securities, continuously monitoring the performance of investments held and assessing market risk relevant to which the investments operate.

Sensitivity analysis for equity price risk

At the reporting date, if prices for equity securities increase by 10% with all other variables being held constant, the loss net of tax will be RM48,346 (2020: RM47,250 ) lower as a result of higher fair value gain on fair value through profit or loss investments in equity instruments. A 10% decrease in the underlying equity prices would have had the equal but opposite effect to the amounts shown above.

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Notes to the Financial Statements For the financial year ended 31 January 2021 36. Capital management The primary objective of the Group’s and the Company’s capital management is to ensure

that it maintains healthy capital ratios to support its business and maximise shareholders value. No changes were made in the objective, policies and processes during the years ended 31 January 2021 and 2020.

The Group and the Company review their capital structure and make adjustments to reflect

economic conditions, business strategies and future commitments on a continuous basis. The Group and the Company monitor capital using a gearing ratio, which is net debt

divided by total capital plus net debt. The Group and the Company includes within net debt, trade and other payables, and hire purchase liabilities, less cash and bank balances. Capital includes equity attributable to the equity holders of the parent less translation adjustment account.

The Group and the Company are in compliance with all externally imposed capital requirements in respect of certain external borrowings for the financial years ended 31 January 2021 and 2020.

Group Company Note 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000

Loans and borrowings 27 67,860 75,059 11,299 16,293 Trade and other payables 28 63,684 35,541 14,003 9,193 Less: Cash and bank balances 26 (9,801) (11,763) (115) (121) ––––––– ––––––– ––––––– ––––––– Net debt 121,743 98,837 25,187 25,365 ––––––– ––––––– ––––––– ––––––– Equity attributable to owner of the Company 97,090 99,038 120,380 120,427 ––––––– ––––––– ––––––– ––––––– 218,833 197,875 145,567 145,792 ====== ====== ====== ====== Gearing ratio 56% 50% 17% 17% ====== ====== ====== =====



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Notes to the Financial Statements For the financial year ended 31 January 2021 37. Segment information For management purposes, the Group is organised into business based on their strategic

business units, and has five reportable operating segments as follows:

(i) Property development, construction and road maintenance - sale of properties, construction and road maintenance;

(ii) Manufacturing - manufacture and sale of ready-mixed concrete, concrete products,

polyethylene pipes, woven polypropylene bags and polyethylene liners, sawmilling and manufacture of downstream timber products;

(iii) Trading - general trading; (iv) Quarry operations - extracting and sale of aggregates; and (v) Investment and management services - investment holding and advisory.

Except as indicated above, no operating segments has been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the

purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments.

Segment results, assets and liabilities include items directly attributable to a segment

as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, liabilities, income and expenses.

Transfer prices between business segments are on an arm’s length basis in a manner similar to transactions with third parties. Segment revenue, expenses and results include transactions between business segments. These transactions are eliminated on consolidation. Segment analysis by geographical locations has not been presented as the Group’s operations are predominantly conducted in Malaysia.


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Notes to the Financial Statements For the financial year ended 31 January 2021 37. Segment information For management purposes, the Group is organised into business based on their strategic

business units, and has five reportable operating segments as follows:

(i) Property development, construction and road maintenance - sale of properties, construction and road maintenance;

(ii) Manufacturing - manufacture and sale of ready-mixed concrete, concrete products,

polyethylene pipes, woven polypropylene bags and polyethylene liners, sawmilling and manufacture of downstream timber products;

(iii) Trading - general trading; (iv) Quarry operations - extracting and sale of aggregates; and (v) Investment and management services - investment holding and advisory.

Except as indicated above, no operating segments has been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the

purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments.

Segment results, assets and liabilities include items directly attributable to a segment

as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, liabilities, income and expenses.

Transfer prices between business segments are on an arm’s length basis in a manner similar to transactions with third parties. Segment revenue, expenses and results include transactions between business segments. These transactions are eliminated on consolidation. Segment analysis by geographical locations has not been presented as the Group’s operations are predominantly conducted in Malaysia.

Not

es t

o th

e Fi

nan

cial

Sta

tem

ents

For

The

Fin

anci

al Y

ear

End

ed 3

1 Jan

uar

y 20

21 (C

ontd

.)

- 13

7 -

Regi

strat

ion

No:

199

6010

0593

6 (3

7828

2-D

)

Qua

lity

Con

cret

e Hol

ding

s Ber

had

Not

es to

the F

inan

cial

Sta

tem

ents

For t

he fi

nanc

ial y

ear e

nded

31

Janu

ary

2021

37

.

Segm

ent i

nfor

mat

ion

(con

td.)

Prop

erty

Inve

stm

ent

deve

lopm

ent,

an

d

Adj

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t T

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Man

ufac

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ng

Tra

ding

op

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se

rvic

es

segm

ents

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imin

atio

ns

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e C

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lidat

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20

21

RM’0

00

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Inte

r-se

gmen

t sal

es

31,9

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1,2

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11,

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3

80

1,7

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46,

933

(46

,933

) A

-

––––

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Tota

l rev

enue

1

08,6

39

65,

723

1

1,85

6

699

1

,750

1

88,6

67

(46

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)

141

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==

====

==

====

==

====

==

===

====

= ==

====

==

====

====

==

R

esul

ts

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gmen

t ope

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g pr

ofit/

(loss

) 13

,918

(

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207

2

20

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1

1,40

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(3,

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7,61

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nce

costs

(2

,052

) (

1,45

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(14

4)

(36

) (

851)

(

4,53

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211

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are

of re

sult

of a

ssoc

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-

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3,

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com

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(2

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Prof

it fo

r the

yea

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37

5

==

====

Ass

ets

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gmen

t ass

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1

42,9

56

122,

037

7

,100

6

,789

1

59,6

18

438

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(

203,

410)

235,

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====

==

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= ==

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==

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Lia

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110,

566

7

7,26

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97

1,5

47

26,

153

2

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31

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135,

340

====

==

====

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Oth

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115

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616)

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-

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(21

)

==

====

==

====

==

====

==

===

====

= ==

====

==

====

====

==


- 13

8 -

Regi

strat

ion

No:

199

6010

0593

6 (3

7828

2-D

)

Qua

lity

Con

cret

e Hol

ding

s Ber

had

Not

es to

the F

inan

cial

Sta

tem

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For t

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nanc

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ear e

nded

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2021

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====

==

====

==

====

==

====

= ==

===

====

==

====

==

==

====

Res

ults

Segm

ent o

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ting

prof

it/(lo

ss)

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496

326

(794

) 4,

311

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sts

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Sh

are

of re

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- 30

1

301

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(1

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me

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ss fo

r the

yea

r

(2

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)

==

====

Ass

ets

Se

gmen

t ass

ets

105

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12

5,61

3 8,

170

6,88

7 15

9,85

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5,87

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21

7,91

2

==

====

==

====

==

====

==

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====

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====

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====

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==

L

iabi

litie

s

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s 78

,538

75

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6,

820

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5 26

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9,15

1 (7

1,07

6)

11

8,07

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==

====

==

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==

====

==

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O

ther

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rmat

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of p

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and

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ipm

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466

5,14

1 3

38

429

6,07

7 (2

08)

5,

869

D

epre

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of in

vest

men

t pro

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-

115

- 18

53

18

6 (5

4)

13

2

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n of

pro

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for s

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- 22

-

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22

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s writ

ten

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- 17

4 -

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174

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174

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s 27

5 31

3 -

122

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-

8

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Rev

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l of i

mpa

irmen

t los

s on

trade

rece

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les

- (2

38)

(32)

-

- (2

70)

-

(270

)

==

====

==

====

==

====

==

===

====

= ==

====

==

====

====

==

Not

es t

o th

e Fi

nan

cial

Sta

tem

ents

For

The

Fin

anci

al Y

ear

End

ed 3

1 Jan

uar

y 20

21 (C

ontd

.)

- 139 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 37. Segment information (contd.)

Notes Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements

A Inter-segment revenues are eliminated on consolidation.

38. Significant events COVID-19 pandemic has affected many businesses and the Malaysian economy as a

whole. On 16 March 2020, the Malaysian Government issued the Movement Control Order (“MCO”) from 18 March to 12 May 2020 as a preventive measure against the spread of COVID-19 which requires the closure of all government and private premises except for those involved in the provision of essential services. The MCO was subsequently followed by Conditional MCO, Extended MCO and then, Recovery MCO.

As the situation is fluid and still evolving and given the widespread nature of the outbreak and the unpredictability of future development of COVID-19, it is not practicable to provide a quantitative estimate of the potential financial impact of COVID-19 on the Group’s and the Company’s financial statements for the financial year ending 31 January 2022 reliably at this juncture.

39. Authorisation of financial statements for issue

The financial statements for the year ended 31 January 2021 were authorised for issue by the Board in accordance with a resolution of the directors on



- 139 -

Registration No: 199601005936 (378282-D) Quality Concrete Holdings Berhad Notes to the Financial Statements For the financial year ended 31 January 2021 37. Segment information (contd.)

Notes Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements

A Inter-segment revenues are eliminated on consolidation.

38. Significant events COVID-19 pandemic has affected many businesses and the Malaysian economy as a

whole. On 16 March 2020, the Malaysian Government issued the Movement Control Order (“MCO”) from 18 March to 12 May 2020 as a preventive measure against the spread of COVID-19 which requires the closure of all government and private premises except for those involved in the provision of essential services. The MCO was subsequently followed by Conditional MCO, Extended MCO and then, Recovery MCO.

As the situation is fluid and still evolving and given the widespread nature of the outbreak and the unpredictability of future development of COVID-19, it is not practicable to provide a quantitative estimate of the potential financial impact of COVID-19 on the Group’s and the Company’s financial statements for the financial year ending 31 January 2022 reliably at this juncture.

39. Authorisation of financial statements for issue

The financial statements for the year ended 31 January 2021 were authorised for issue by the Board in accordance with a resolution of the directors on

23 June 2021.


Issued Share Capital : RM82,956,000 comprising 57,962,000 Ordinary Shares Class of Shares : Ordinary Shares Voting Rights : One Vote Per Ordinary Share

Distribution ScheduleSize of Shareholdings No. of Holders % of Holders No. of Shares % of Holders

less than 100 10 0.71 266 0.00 100 to 1,000 782 55.27 765,400 1.32 1,001 to 10,000 525 37.10 1,831,731 3.16 10,001 to 100,000 76 5.37 2,128,109 3.67 100,001 to less than 5% of issued shares 18 1.27 23,008,594 39.70 5% and above of issued shares 4 0.28 30,227,900 52.15

1,415 100.00 57,962,000 100.00

Substantial Shareholders as at 17 May 2021According to the Register of substantial shareholders, the substantial shareholders of the Company as at 17 May 2021 are as follows:

Name of Substantial Shareholders Direct % Deemed interest %

1. CIMSEC Nominees (Asing) Sdn Bhd CIMB Securities (Singapore) Pte Ltd for Entrequest Holdings Limited 10,500,000 18.12 - -

2. Cahaya Besi (Sarawak) Sdn. Bhd. 8,149,900 14.06 - -

3. Datin Ha Ai Ing 7,001,000 12.08 11,008,000 18.99

4. Tiang Chiin Yew 5,282,500 9.11 12,726,500 21.96

5 Tiang Ching Kok 3,282,500 5.66 14,726,500 25.41

List of Directors’ InterestAccording to the Register of Directors’ Shareholdings, the interest of Directors in the ordinary shares of the Company as at 17 May 2021 are as follows:

Direct % Deemed interest %

1. Tiang Ching Kok 3,282,500 5.66 14,726,500 25.41 2. Felix Wong Khung Chui - - - - 3. Ha Tiuen Kiong - - - - 4. Pang Kim Soo - - - - 5. Paul Chiam Tau Keen - - - - 6. Lynda Chong Hui Lyn - - - -

Analysis of Shareholdingsas at 17 May 2021


Thirty Largest Shareholers as at 17 May 2021 No. of Shares % of shareholdings

1. CGS-CIMB Nominees (Asing) Sdn. Bhd. Exempt AN for CIMB Securities (Singapore) Pte Ltd (Retail Clients) 10,516,000 18.142. Ha Ai Ing 7,001,000 12.083. Kenanga Nominees (Tempatan) Sdn. Bhd. Pledged securities account for Cahaya Besi (Sarawak) Sdn. Bhd. 6,145,900 10.604. Tiang Chiin Yew 3,282,500 5.665. Tiang Ching Kok 3,282,500 5.666. Affin Hwang Nominees (Tempatan) Sdn. Bhd. Pledged securities account for Wangsa Bumimas Timber Sdn. Bhd. 2,804,000 4.847. Alliance Group Nominees (Tempatan) Sdn. Bhd. Quality Podium Sdn. Bhd. 2,700,000 4.668. Affin Hwang Nominees (Tempatan) Sdn. Bhd. Pledged securities account for Yesgains Sdn. Bhd. 2,682,300 4.639. Maybank Nominees (Tempatan) Sdn. Bhd. Pledged securities account for Wee Song Ching 2,661,200 4.5910. D’Hamskor Trading Co. Sdn. Bhd. 2,113,200 3.6511. Cahaya Besi (Sarawak) Sdn. Bhd. 2,004,000 3.4612. HLB Nominees (Tempatan) Sdn. Bhd. Pledged securities account for Tiang Chiin Yew 2,000,000 3.4513. CIMSEC Nominees (Tempatan) Sdn. Bhd. CIMB Bank for Sincere Success Sdn. Bhd. 1,914,500 3.3014. Amsec Nominees (Tempatan) Sdn. Bhd. Pledged Securities account for Bong Lee Min 1,248,400 2.1515. Amsec Nominees (Tempatan) Sdn. Bhd. Pledged Securities account for Chiaw Lik Chiat 830,700 1.4316. Kenanga Nominees (Tempatan) Sdn. Bhd. Pledged securities account for Tiang Chiin Ling 525,000 0.9117. Encorp Properties Sdn. Bhd. 448,494 0.7718. Datuk Hajjah Raziah @ Rodiah Binti Mahmud 260,000 0.4519. CGS-CIMB Nominees (Tempatan) Sdn. Bhd. CIMB Bank for Bong Lee Min 218,500 0.3820. Datuk Mazelan Bin Bugo 164,000 0.2821. CGS-CIMB Nominees (Tempatan) Sdn. Bhd. Pledged securities account for Abdul Aziz Bin Husain 156,000 0.2722. Kenanga Nominees (Tempatan) Sdn. Bhd. Pledged securities account for Too Boon Siong 141,900 0.2423. Chieng Ngee Ong 136,400 0.2424. Abdul Hamed Bin Sepawi 100,000 0.1725. Inmost Tech Sdn Bhd 80,000 0.1426. Ngui Siew Kong @ Ngui Hua Yen 80,000 0.1427. Tang King Hung 77,000 0.1328. Maybank Nominees (Tempatan) Sdn. Bhd. Pledged securities account for Too Boon Siong 74,800 0.1329. Ngu Kee Tiong 72,700 0.1330. Sii How Hua 66,000 0.11 53,786,994 92.79

Analysis of Shareholdingsas at 17 May 2021 (Contd.)


Address Brief Description Existing use Tenure & Age of Net Book Date of last Expiry Date Buildings Value (RM) revaluation/ acquisition Lot 706, Block 7, Industrial Land with Factory 2054 24 17,352,914 Land acquired on 2.4.1997MTLD, Sejingkat factory buildings of & staff Buildings completed onIndustrial Park, approx. 6.980 quarter December 1997 New93050 Kuching. hectares extension completed in 2002 Land & buildings revalued on 28.10.1999

Lot 1910, 1960, 2372, Agricultural Land of Vacant Land Freehold - 13,087,746 Land acquired in 20122405, 2406, Mukim approx. 55.35 acresJeram Batu, Daerah Pontian, Johor.

Lot 27, Blk 4 Industrial land & Factory Leasehold 13 & 21 7,315,504 Land acquired on 24.4.1997.Muara Tebas factory buildings of 2069 Land lease renewedLand District. approx. 6.0620 on 05.11.2009. Building hectares completed on 26.7.2000 2nd building completed in 2008

Sublot 11 of Parent 3 storey shophouse Rented out Leasehold 3 1,283,179 Property acquired inlot 3280, Block 217, of approx. 343.8 sq. 60 years 2019Kuching North Land meter from titleDistrict issue

Sublot 29, Lot 329 & 3 storey shophouse Rented out Leasehold 3 1,158,000 Property acquired in332, Sentosa Parade, of approx. 387.1 sq. 60 years 2019Block 46, KCLD, meter from titlePenrissen Road, Kuching issue

Lot 8024-8029, Industrial land Vacant Leasehold - 1,151,505 Land acquired in 20088083-8084, Blk 5, of approx. 7,315 60 yearsKBLD D.Senadin, sq. meter from title Miri. issue

Lot 602, Blk 20 Kemena Plant office, laboratory, Office, Leasehold 17 895,315 Land acquired onLand District Kidurong cement store & worker laboratory, 2067 23.07.2001.Industrial Area, Bintulu. quarter store & worker Building completed in 2002. approx. 1.2142 hectares quarter Worker quarter extension completed in 2009.

Industrial Lot#103, Industrial land Vacant Leasehold - 424,661 Land acquired in 1997Tanjung Manis of approx. 1.6637 2051Timber processing zone. hectares

Lot 368, Blk 53, Mukah Industrial land Office, Leasehold 16 330,875 Land acquired onLand District, Mukah. of approx. 1.32 acre laboratory, 2063 20.01.2003. Building store & workers’ completed in 2009 quarter

M3-324, Mixed Zone Land of Vacant land Leasehold - 18,628 Land acquiredSeniawan Sbrang, Bau. approx. 2.934 hectares 2034 on 13.7.2000 No. 8, Level 10 1 unit Condominium Staff usage Leasehold 20 1 Building acquiredChonglin Plaza, of approx. 1,226 sq. 2925 on 9.12.1999Kuching. feet 43,018,328

List of Propertiesas at 31st January 2021


Note 1

Resolution 1Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements for the financial year ended 31 January 2021 together with the Reports of the Directors and Auditors thereon.

2. To re-elect the following directors, who are due to retire in accordance with Clause 119 of the Company’s Constitution and being eligible, have offered themselves for re-election.

(a) Mr. Pang Kim Soo (b) Mr. Felix Wong Khung Chui

3. To approve Directors’ fees of RM72,000.00 and meeting allowance of RM48,000.00 in respect of the financial year ended 31 January 2022.

4. To re-appoint Messrs. Ernst & Young PLT as Auditors of the Company and to authorise the Directors to fix their remuneration.

AS SPECIAL BUSINESS

To consider and, if thought fit, to pass the following as ordinary resolutions:

5. Authority to issue Shares Pursuant to Sections 75 and 76 of the Companies Act 2016

“THAT subject always to the Companies Act 2016, the Constitution of the Company and approvals of the relevant authorities, the Directors be and are hereby authorised pursuant to Sections 75 and 76 of the Companies Act 2016, to issue and allot shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares does not exceed ten per centum (10%) of the issued share capital of the Company for the time being and the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad; AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

6. Proposed Renewal of Shareholders’ Mandate For Recurrent Related Party Transaction Of A Revenue Or Trading Nature

“THAT subject always to the Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given to the Company and its subsidiaries to enter into any of the category of recurrent transactions of a revenue or trading nature as set out in Paragraph 2.2 of the Company’s Circular to Shareholders dated 25 June 2021 with the related parties mentioned therein which are necessary for Quality Concrete Holdings Berhad Group’s day-to-day operations subject to the following:-

NOTICE IS HEREBY GIVEN that the Twenty-Fifth Annual General Meeting (“25th AGM”) of QUALITY CONCRETE HOLDINGS BERHAD will be held at Room 209, 2nd Floor, Wisma Bukit Mata Kuching, Jalan Tunku Abdul Rahman, 93100 Kuching, Sarawak, on Monday, 30th August 2021 at 10.30 a.m. for the following purposes :-

AGENDA

Notice of Annual General Meeting


a) the transactions are in the ordinary course of business and are on normal commercial terms which are not more favourable to the related parties than those available to the public and on terms not to the detriment of the minority shareholders; and

b) disclosure is made in the annual report of the breakdown of the aggregate value of transactions conducted pursuant to the Shareholders’ Mandate during the financial year based on the following information:

i) The types of recurrent related party transactions made; and ii) The names of the related parties involved in each type of the recurrent related party

transactions made and their relationship with the Company.

AND THAT such approval shall continue to be in force until:-

a) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the forthcoming AGM at which such Proposed Renewal of Shareholders’ Mandate was passed, at which time it will lapse, unless by a resolution passed at an AGM whereby the authority is renewed;

b) the expiration of the period within which the next AGM of the Company subsequent to the date it is required to be held pursuant to the provisions of the Act; or

c) revoked or varied by resolution passed by the shareholders in an AGM or Extraordinary General Meeting,

whichever is earlier;

And the Directors and/or any of them be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) to give effect to the transactions contemplated and/or authorised by this resolution.”

7. To transact any other business for which due notice shall have been given in accordance with the Companies Act 2016 and the Constitution of the Company.

By Order of the Board,

Yeo Puay Huang [SSM PC No. 202008000727 (LS0000577)]Paul Chiam Tau Keen [SSM PC No.202008002707 (MIA14900)]Company SecretariesDated : 25 June 2021

Notice of Annual General Meeting (Contd.)


Explanatory Notes to Special Business

a) Ordinary Resolution 5– Authority to issue shares pursuant to Sections 75 and 76 of the Companies Act 2016.

The proposed Ordinary Resolution 5, if passed, will give a renewed mandate to the Directors of the Company, pursuant to Sections 75 and 76 of the Companies Act 2016 (“Renewed Mandate”) for such purposes as the Directors may deem fit and in the interest of the Company. The Renewed Mandate, unless revoked or varied by the Company in a general meeting will expire at the conclusion of the next Annual General Meeting of the Company.

The authority to issue shares pursuant to the Companies Act 2016 will provide flexibility and expediency to the Company for any possible fund raising activities involving the issuance or placement of shares to facilitate business expansion or strategic merger and acquisition opportunities involving equity deals or part equity or to fund future investment project(s) or for working capital requirements which the Directors of the Company consider to be in the best interest of the Company. The approval is sought to avoid any delay and cost in convening a general meeting to approve such issuance of shares.

The Company had been granted a mandate by its shareholders at the Twenty-Fourth Annual General Meeting of the Company held on 28 July 2020 (“Previous Mandate”). As at the date of this Notice, no new shares were issued pursuant to the Previous Mandate and hence, no proceeds were raised therefrom.

b) Proposed General Mandate for Recurrent Related Party Transactions

The proposed Ordinary Resolution 6, if passed, will provide a renewed mandate for the Company and/or its subsidiaries to enter into recurrent related party transactions of a revenue or trading nature with Related Parties in the ordinary course of business based on commercial terms which are not more favourable to the Related Parties than those generally available to the public and which are necessary for the Group’s day-day operations. This mandate shall lapse at the conclusion of the next Annual General Meeting unless authority for the renewal is obtained from the shareholders of the company at a general meeting.

Detailed information of the Proposed Renewal of Shareholders’ Mandate is set out in the Circular to Shareholders dated 25 June 2021 circulated together with this Annual Report.

Notes Accompany Notice of 25th AGM

1. Agenda 1 is meant for discussion only as the provision of Section 340(1)(a) of the Companies Act 2016 does not require a formal approval of the members for the Audited Financial Statements. Hence, this Agenda item is not put forward for voting.

2. Only Depositors whose names appear in the General Meeting Record of Depositors as at 23 August 2021 be regarded as Members and shall be entitled to attend, speak and vote at the Annual General Meeting.

3. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his/her place. A proxy need not be a member of the Company. Where a holder appoints two or more proxies, he/she shall specify the proportion of his/her shareholdings to be represented by each proxy.

4. Where a member of the Company is an exempt authorized nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (omnibus account), there is no limit to the number of proxies which the exempt authorized nominee may appoint in respect of each omnibus account it holds.



5. A corporation which is a member may by resolution of its directors authorise such person as it thinks fit to act as its representative at the meeting.

6. The instrument appointing a proxy or proxies shall be in writing under the hand of the appointer or of his/her attorney duly authorized in writing or, if such appointer is a corporation, under its Common Seal or the hand of its attorney duly authorized.

7. The instrument appointing a proxy or proxies must be deposited at the registered office, Room 209, 2nd Floor, Wisma Bukit Mata Kuching, Jalan Tunku Abdul Rahman, 93100 Kuching, Sarawak not less than 48 hours before the time appointed for holding the Annual General Meeting or any adjournment thereof.

8. Pursuant to Paragraph 8.29A(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all resolutions set out in this Notice will be put to vote by way of poll.

9. Registration will start at 9:30 a.m. at Room 209, 2nd Floor, Wisma Bukit Mata Kuching, Jalan Tunku Abdul Rahman, 93100 Kuching, Sarawak, on Monday, 30 August 2021.

10. As a precautionary measure against the spread of COVID-19, members are strongly encouraged to appoint either the Chairman of the Meeting or any of the Independent Directors as proxy to vote in his stead.

At the physical meeting, members are advised to observe the applicable directives, safety and precautionary requirements as prescribed by the Government, the Ministry of Health, the Malaysian National Securities Council, and other relevant authorities to curb the spread of Covid-19 are abided by; ensure a physical distance of at least one (1) meter between each meeting participant at all times; and all participants have to wear face masks.

The Company will continue to monitor the Covid-19 pandemic situation closely and may adopt further procedures and measures at short notice as public health situation changes. Members can check further update on the Company’s website at www.qchb.com.my.

11. Details of Individuals who are standing for election as Directors

The details of Individuals who are standing for election as directors are stated on page 9 to page 10 of the Annual Report 2021.



I/We IC No. / Company No.

of

being a member/members of QUALITY CONCRETE HOLDINGS BERHAD hereby appoint IC No.

of

or failing him/her, the Chairman of the meeting as my/our proxy/proxies to vote for me/us on my/our behalf, at the Annual General Meeting of the Company to be held at Room 209, 2nd Floor, Wisma Bukit Mata Kuching, Jalan Tunku Abdul Rahman, 93100 Kuching, Sarawak, on Monday, 30th August 2021 at 10.30 a.m. for the following purposes :-

(Please indicate with an “X” in the appropriate spaces above how you wish your votes to be cast. If you do not indicate how you wish your proxy to vote on any resolution, the proxy shall vote as he thinks fit, or at his discretion, abstain from voting.)

NO. RESOLUTION FOR AGAINST

1. To re-elect Mr Pang Kim Soo, who is due to retire in accordance with Clause 119 of the Company’s Constitution and being eligible, has offered themselves for re-election.

2. To re-elect Mr Felix Wong Khung Chui, who is due to retire in accordance with Clause 119 of the Company’s Constitution and being eligible, has offered themselves for re-election.

3. To approve Directors’ fees of RM72,000.00 and meeting allowance of RM48,000.00 in respect of the financial year ended 31 January 2022.

4. To re-appoint Messrs. Ernst & Young PLT as Auditors of the Company and to authorise the Directors to fix their remuneration.

5. To authorise Directors to allot and issue Shares Pursuant to Sections 75 and 76 of the Companies Act 2016.

6. Proposed Renewal of Shareholders’ Mandate For Recurrent Related Party Transaction Of A Revenue Or Trading Nature.

Signed this day of , 2021

Signature / Common Seal of Shareholder

Notes Accompany Notice of 25th AGM1. Agenda 1 is meant for discussion only as the provision of Section 340(1)(a) of the Companies Act 2016 does not require a formal approval of

the members for the Audited Financial Statements. Hence, this Agenda item is not put forward for voting.2. Only Depositors whose names appear in the General Meeting Record of Depositors as at 23 August 2021 be regarded as Members and shall

be entitled to attend, speak and vote at the Annual General Meeting.3. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his/her place. A proxy need

not be a member of the Company. Where a holder appoints two or more proxies, he/she shall specify the proportion of his/her shareholdings to be represented by each proxy.

4. Where a member of the Company is an exempt authorized nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (omnibus account), there is no limit to the number of proxies which the exempt authorized nominee may appoint in respect of each omnibus account it holds.

5. A corporation which is a member may by resolution of its directors authorise such person as it thinks fit to act as its representative at the meeting.

6. The instrument appointing a proxy or proxies shall be in writing under the hand of the appointer or of his/her attorney duly authorized in writing or, if such appointer is a corporation, under its Common Seal or the hand of its attorney duly authorized.

7. The instrument appointing a proxy or proxies must be deposited at the registered office, Room 209, 2nd Floor, Wisma Bukit Mata Kuching, Jalan Tunku Abdul Rahman, 93100 Kuching, Sarawak not less than 48 hours before the time appointed for holding the Annual General Meeting or any adjournment thereof.

(Full Name in Capital Letters)

(Full Name in Capital Letters)

(Full Address in Capital Letters)

(Full Address in Capital Letters)


No. of Shares Held:Form of Proxy


Room 209, 2nd Floor, Wisma Bukit Mata Kuching,Jalan Tunku Abdul Rahman, 93100 Kuching, Sarawak.Tel: +6082-206600 Fax: +6082-206607

S T A M P

1st fold here

2nd fold here

8. Pursuant to Paragraph 8.29A(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all resolutions set out in this Notice will be put to vote by way of poll.

9. Registration will start at 9:30 a.m. at Room 209, 2nd Floor, Wisma Bukit Mata Kuching, Jalan Tunku Abdul Rahman, 93100 Kuching, Sarawak, on Monday, 30 August 2021.

10. As a precautionary measure against the spread of COVID-19, members are strongly encouraged to appoint either the Chairman of the Meeting or any of the Independent Directors as proxy to vote in his stead.

At the physical meeting, members are advised to observe the applicable directives, safety and precautionary requirements as prescribed by the Government, the Ministry of Health, the Malaysian National Securities Council, and other relevant authorities to curb the spread of Covid-19 are abided by; ensure a physical distance of at least one (1) meter between each meeting participant at all times; and all participants have to wear face masks.

The Company will continue to monitor the Covid-19 pandemic situation closely and may adopt further procedures and measures at short notice as public health situation changes. Members can check further update on the Company’s website at www.qchb.com.my.

11. Details of Individuals who are standing for election as Directors The details of Individuals who are standing for election as directors are stated on page 9 to page 10 of the Annual Report 2021.

QUALITY CONCRETE HOLDINGS BERHAD[19960 1005936 (378282-D)]

www.qchb.com.my

Room 209, 2nd Floor, Wisma Bukit Mata Kuching, Jalan Tunku Abdul Rahman,93100 Kuching, Sarawak, Malaysia.

Tel : +6082 206 600 • Fax : +6082 206 607Email : [email protected]

QCHBAR2021.pdf - Quality Concrete Holdings Bhd

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