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AddressPenthouse, The Crest 3 Two Square No. 2, Jalan 19/1 46300 Petaling Jaya Selangor Darul Ehsan, Malaysia

www.crestbuilder.com.myEmail : [email protected]

ContactTel : 603 7841 6000 Fax : 603 7841 6088

CREST BUILDER HOLDINGS BERHAD (573382-P)

A n n u a l R e p o r t 2 0 1 2

C.BuildArCov7k_FINAL.indd 1 5/22/13 5:25 PM

Contents

• CorporateProfile_2• Noticeof11thAnnualGeneralMeeting_3• StatementAccompanyingNoticeof11thAnnualGeneralMeeting_7• CorporateInformation_9• FinancialHighlights_10• Director’sProfile_12• Chairman’sStatement_14• ManagementReview_16• CorporateStructure_20• ReportoftheAuditCommittee_21• StatementonCorporateGovernance_25• StatementonRiskManagementandInternalControl_32• CorporateSocialResponsibility_34• StatementonDirectors’Responsibility_36• FinancialStatements_37• ListofTopTenPropertiesbyValue_131• AnalysisofShareholdings_132• ProxyForm[Enclosed]


[2]

CBHBwasincorporatedinMalaysiaundertheCompaniesAct,1965on9thMarch2002asapubliclimitedcompany.CBHBisprincipallyaninvestmentholdingcompanyandhadsuccessfullyundertakenaCorporateandDebtRestructuringSchemewhichinvolvedtakingoverthelistingstatusofMGRCorporationBerhad.CBHBwaslistedontheMainBoardofBursaMalaysiaon12thJune2003.

TheCBHBGroupwasfoundedin1985byMrYongSoonChow.Whatstartedoutasasmalltimeroflessthan10staffshasgrowntoastrongcorporationofover500staffsunderitsstable.Overthepast25years,theCBHBGrouphascarvedastrongfootholdinthelocalconstructionindustry.Within-depthindustryexperience,theCBHBgrouphasaproventrackrecordinthesector–especiallyinthecommercial,residentialandinstitutionalbuildingconstruction.TheGroupcountstopbrandeddevelopersandinternationalpropertyplayersamongstitsclientele.

Withangoodblendofexperienceandvibrantprotégésinitsmanagementteam,theCBHBGrouphasmovedalongthesupplychainanddiversifiedbeyondpurelyconstructionintootherconstruction-relatedactivities,suchaspropertydevelopment,M&Eservicesandprojectmanagement–andmostrecently,uponcompletionofourRM300millionmaidendevelopment3TwoSquare,theGrouphasalsodiversifiedintopropertymanagementaswellascarparkmanagement.

Withthevisiontobethe‘Preferred’organizationofchoicebythepartnersandcustomers,theGroupaspirestoachievedistinctionintheindustrythroughprudentcostmanagement,higheststandardsofqualityandcompletecustomersatisfaction.

BRINGINGA VISIONTO REALITY

CORPORATEPROFILE

ANNUALREPORT2012

[3]

NOTICE is hereby given that the 11th annual general meeting will be held

Venue SimeDarbyConventionCentre 1A,JalanBukitKiara1 60000KualaLumpur

Day,dateandtime Tuesday,25June2013at3.00p.m.

AGENDA

Ordinary business

1. Laying of audited accounts

Toreceiveandadoptthedulyauditedaccountsconsistingoftheconsolidatedstatementofcomprehensiveincome,theconsolidatedstatementoffinancialposition,thereportsoftheDirectorsandauditorsforthefinancialyearended31December2012,incompliancewithSection169(1)andSection174(1)oftheCompaniesAct,1965(“Act”)respectively.

Resolution 1

2. Declaration of dividend

THATthepaymentforafirstandfinaldividendof5%less25%taxationpershareinrespectofthefinancialyearended31.12.2012beherebyapproved.

Resolution 2

3. Election of director

THAT re-electionoftheManagingDirector,Mr.YongSoonChowwhoretiresinaccordancewithArticle80oftheCompany’sArticlesofAssociation,beherebyapproved.

Resolution 3

4. Election of director

THAT re-electionof the IndependentNon-ExecutiveDirector, EncikMohdKhasanBinAhmadwhoretiresinaccordancewithArticle80oftheCompany’sArticlesofAssociation,beherebyapproved.

Resolution 4

5. Appointment of auditors

THAT theappointmentofMessrsBakerTillyMonteiroHeng,CharteredAccountants,astheauditorsinaccordancewithArticle57oftheCompany’sArticlesofAssociationandpursuanttoSection172(2)oftheActfortheensuingfinancialyearending31December2013beconfirmedand that thedirectorsbeauthorised to fix the remunerationof theauditorspursuanttoSection172(16)(a)oftheAct,beherebyapproved.

Resolution 5

Special business

6. Approval for payment of directors’ fees

THATthepaymentofRM180,000asdirectors’feefortheyearended31December2012(2011:RM250,000)inaccordancewithArticle88oftheCompany’sArticlesofAssociationbeherebyapproved.

Resolution 6

NOTICE OF 11TH

ANNUAL GENERAL MEETING


[4]

7. Authority for issue of shares pursuant to Section 132D of the Act.

THAT pursuant toSection132Dof theAct and subject to theapproval of all relevantauthoritiesbeingobtained,theDirectorsbeempoweredtoissuesharesintheCompanyatanytimeanduponsuchtermsandconditionsandforsuchpurposesastheDirectorsmay,intheirabsolutediscretiondeemfit,providedthattheaggregatenumberofsharesissuedpursuanttothisresolutiondoesnotexceed10%oftheissuedandpaidupcapitaloftheCompanyforthetimebeingandthatsuchauthorityshallcontinueinforceuntiltheconclusionofthenextannualgeneralmeetingbeherebyapproved.

Resolution 7

8. Proposed renewal of shareholders’ mandate for existing recurrent related party transactions of a revenue or trading nature and mandate for additional recurrent related party transactions of a revenue or trading nature

THAT the shareholders’mandategrantedby the shareholdersof theCompanyon20

June2012pursuanttoparagraph10.09oftheListingRequirementsoftheBursaMalaysiaSecuritiesBerhad,authorizingtheCompanyanditssubsidiaries(the“CBHBGroup”),toenterintotheRecurrentRelatedPartyTransactionsofarevenueortradingnaturewhicharenecessaryfortheCBHBGroup’sday-to-dayoperationsassetoutinparagraph4.3of theCircular toShareholdersdated3 June2013 (“Circular”)with the relatedpartiesmentionedtherein,beandisherebyrenewedandTHATapprovalbeandisherebygiventotheCompanytoenterintoadditionalRecurrentRelatedPartyTransactionsofarevenueortradingnaturewiththerelatedpartiesmentionedtherein,providedthat:-

(i) thetransactionsareintheordinarycourseofbusinessandonnormalcommercialtermswhich are notmore favourable to the relatedparties than thosegenerallyavailabletothepublicandarenottothedetrimentoftheminorityshareholdersoftheCompany;and

(ii) thedisclosureofthebreakdownaggregatevalueofthetransactionsconductedduring

afinancialyearwillbedisclosedintheannualreportforthesaidfinancialyearbasedonthefollowinginformation:-

i. thetypeoftheRecurrentRelatedPartyTransactionsmade;

ii. thenamesoftherelatedpartiesinvolvedineachtypeoftheRecurrentRelatedPartyTransactionsmadeandtheirrelationshipwiththeCompany.

AND THAT theauthorityconferredbysuchrenewedandgrantedmandateshallcontinue

tobeinforceuntil:-

(i) theconclusionofthenextAnnualGeneralMeeting(“AGM”)oftheCompanyfollowingtheforthcomingAGMatwhichtheProposalisapproved,atwhichtimeitwilllapse,unlessbyaresolutionpassedattheAGM,themandateisagainrenewed;and

(ii) revokedorvariedbyresolutionpassedbytheshareholdersingeneralmeeting,

whicheveristheearlier;

AND THAT theDirectorsoftheCompanybeandareherebyauthorisedtocompleteanddoallsuchactsandthingsastheymayconsiderexpedientornecessarytogiveeffecttotheProposal.

Resolution 8

NOTICEOF11THANNUALGENERALMEETING(CONT’D)

ANNUALREPORT2012

[5]

9. Proposed renewal of share buy-back authority of up to ten percent (10%) of the issued and paid-up share capital

THAT subjecttotheCompaniesAct,1965(“theAct”),rulesandregulationsandordersmadepursuant to theAct, provisionsof theCompany’sMemorandumandArticles ofAssociation(“Articles”)andtherequirementsofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)andanyotherrelevantauthorities,theDirectorsoftheCompanybeandareherebyauthorisedtomakepurchasesofordinarysharescomprisedintheCompany’sissuedandpaid-upordinarysharecapital,suchpurchasestobemadethroughBursaSecuritiessubjectfurthertothefollowing:-

(i) theaggregatenumberofordinarysharesofRM1/-eachinCBHB(“CBHBShares”)

whichmaybepurchasedorheldbytheCompanyshallnotexceedtenpercent(10%)oftheissuedandpaid-upordinarysharecapitaloftheCompany(“ProposedShareBuy-Back”),subjecttotherestrictionthattheissuedandpaid-upordinarysharecapitalofCBHBdoesnotfallbelowtheminimumsharecapitalrequirementsoftheListingRequirementsofBursaSecurities(“ListingRequirements”)applicabletoacompanylistedontheMainBoardofBursaSecuritiesandthatthelistedissuercontinuestomaintainashareholdingspreadthatisincompliancewiththerequirementsoftheListingRequirementsafterthesharepurchase;

(ii) themaximumfundstobeallocatedbytheCompanyforthepurposeofpurchasing

theCBHBSharesundertheProposedShareBuy-Backshallnotexceedtheretainedprofitsand/orsharepremiumaccountoftheCompanyforthetimebeingwhichstoodatRM20,884,735/-andRMnilrespectivelyasat31December2012basedonthelatestauditedfinancialstatementsofCBHBforthefinancialyearended31December2012;

(iii) theauthorityconferredbythisresolutiontofacilitatetheProposedShareBuy-Back

willcommenceimmediatelyuponpassingofthisordinaryresolutionandwillcontinuetobeinforceuntil;

i. theconclusionofthenextannualgeneralmeeting(“AGM”)oftheCompanyat

whichsuchresolutionwaspassedatthewhichtimetheauthoritywouldlapseunlessrenewedbyordinaryresolution,eitherunconditionallyorconditionally;or

ii. theexpirationoftheperiodwithinthenextAGMoftheCompanyafterthatdate

isrequiredbylawtobeheld;oriii. the authority is revoked or varied by ordinary resolution passed by the

shareholdersoftheCompanyinageneralmeeting,

whicheveroccursfirst,butnotsoastoprejudicethecompletionofpurchase(s)bytheCompanyoftheCBHBSharesbeforetheaforesaidexpirydateand,madeinanyevent,inaccordancewiththeprovisionsoftheguidelinesissuedbyBursaSecuritiesandanyprevailinglaws,rules,regulations,orders,guidelinesandrequirementsissuedbyanyrelevantauthorities;and

Resolution 9

(iv) upon completion of the purchase(s) of theCBHBShares by theCompany, theDirectorsoftheCompanybeandareherebyauthorisedtoretaintheCBHBSharessopurchasedastreasuryshares,whichmaybedistributedasdividendstoshareholders,canceland/orresoldonBursaSecurities,inthemannerasprescribedbytheAct,rules,regulationsandordersmadepursuanttotheActandtherequirementsofBursaSecuritiesandanyotherrelevantauthorityforthetimebeinginforce,

AND THAT theDirectorsoftheCompanybeandherebyauthorisedtotakeallsuchstepsasarenecessaryorexpedienttoimplement,finalise,completeortoeffecttheProposedShareBuy-Backwithfullpowerstoassenttoanyconditions,modifications,resolutions,variationsand/oramendments(ifany)asmaybeimposedbytherelevantauthoritiesandtodoallsuchactsandthingsasthesaidDirectorsmaydeemfitandexpedientinthebestinterestoftheCompanytogiveeffecttoandtocompletethepurchaseofCBHBShares.



[6]

10. Continuing in Office as Independent Non-Executive Directors

10.1 THAT,approvalbeandisherebygiventoMr.KeongChoonKeatwhohasservedasanIndependentNon-ExecutiveDirectoroftheCompanyforacumulativetermofmorethannineyears,tocontinuetoactasanIndependentNon-ExecutiveDirectoroftheCompany

10.2 THAT,approvalbeandisherebygiventoEncikMohd.KhasanBinAhmadwhohasservedasanIndependentNon-ExecutiveDirectoroftheCompanyforacumulativetermofmorethannineyears,tocontinuetoactasanIndependentNon-ExecutiveDirectoroftheCompany

10.3 THAT,approvalbeandisherebygiventoMr.KamYongKanwhohasservedasanIndependentNon-ExecutiveDirectoroftheCompanyforacumulativetermofmorethannineyears,tocontinuetoactasanIndependentNon-ExecutiveDirectoroftheCompany

Resolution 10

Resolution 11

Resolution 12

NOTICE OF DIVIDEND ENTITLEMENT

Further NOTICEisherebygiventhatafirstandfinaldividendof5%less25%taxationpershareinrespectofthefinancialyearended31December2012ifapprovedbyshareholders,willbepaidon1August2013todepositorsregisteredintheRecordofDepositorsatthecloseofbusinesson10July2013.

Adepositorshallqualifyforentitlementonlyinrespectof:-

(a) sharetransferredintothedepositor’ssecuritiesaccountbefore4:00noonon10July2013inrespectofordinarytransfers;and

(b) sharesboughtontheBursaMalaysiaSecuritiesBerhadonacumentitlementbasisaccordingtotheRulesoftheBursaMalaysiaSecuritiesBerhad.

ByorderoftheBoard

Company SecretariesHengChiangPoohFCIS(MAICSA7009923)ChiamHanTweeFCIS(MAICSA7009910)

Dated:3June,2013

Notes :-

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint not more than two proxies to attend and vote on in his stead. A proxy may but need not be a member of the Company. A member may appoint any person to be his proxy without limitation and the provisions of Section 149(1)(a) and Section 149(1)(b) of the Companies Act, 1965 shall not apply.

2. Shareholders’ attention is hereby drawn to the Listing Requirements of the Bursa Malaysia Securities Berhad, which allows a member of the Company who is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, to appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities.

3. Where a member appoints two (2) proxies, the appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.

4. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or, if the appointer is a corporation, either under its Common Seal or under the hand of a officer or attorney duly authorised.

5. The instrument appointing a proxy must be deposited at No. 14-2, Jalan 4A/27A, Section 2, Wangsa Maju, 53300 Kuala Lumpur not less than 48 hours before the time set for holding for the meeting or any adjournment thereof.

6. In respect to the deposited securities, only members whose name appear in the Record of Depositors on 18 June 2013 shall be eligible to attend the meeting or to appoint proxy to attend and/or vote on his behalf.


ANNUALREPORT2012

[7]

1. ORDINARY BUSINESS – RESOLUTION 2

TheDirectorsnowrecommendafirstandfinaldividendof5%or5sen(RM0.05)less25%incometaxpereachordinaryshareheldinrespectofthefinancialyearended31December2012,givingrisetototalnetdividendforthefinancialyearof3.75senperordinaryshareheld.

2. ORDINARY BUSINESS – RESOLUTION 3 & 4

TheparticularsoftheretiringDirectorswhoarestandingforre-electionaresetoutintherelevantpagesoftheAnnualReportasfollows:-

Name of Directors Directors’ Profile Directors’ Shareholdings

YongSoonChow Page12 Page43,44&138

MohdKhasanBinAhmad Page12 Page43,44&138

DetailsofDirectors’attendanceatBoardMeetingsaresetoutintheStatementonCorporateGovernanceonPage25oftheAnnualReport.

3. SPECIAL BUSINESS – RESOLUTION 6

Thisauthorisationbythegeneralmeetingwouldenablethepaymentofdirectors’remunerationinaccordancewithArticle88oftheCompany’sArticlesofAssociationasfollows:-

Article 88 Directors’ Remuneration The Directors shall be paid by way of remuneration for their services such fixed sums (if any) as shall from time

to time be determined by the company in general meeting, and such remuneration shall be divided among the Directors in such proportion and manner as the Directors may determine. Provided always that:-

(a) fees payable to Directors who hold no executive office in the company shall be paid by a fixed sum and not by a commission on or percentage of profits or turnover;

(b) salaries payable to Directors who do hold an executive office in the Company may not include a commission on or percentage of turnover;

(c) fees payable to Directors shall not be increased except pursuant to a resolution passed at a general meeting, where notice of the proposed increase has been given in the notice convening the meeting;

(d) any fee paid to an Alternate Director shall be such as agreed between himself and the Director nominating him shall be paid out of the remuneration of the latter.


TheCompanyhadduring its10thAnnualGeneralMeetingheldon20June2012,obtaineditsshareholders’approvalforthegeneralmandateforissuanceofsharespursuanttoSection132DoftheCompaniesAct,1965.TheCompanyhad25June2012issued11,300,000Sharesunderthesaidmandate.

ThisProposedResolutionNo.7whichisanOrdinaryResolution,ifpassed,willgrantarenewedgeneralmandatewhichwillprovideflexibilityfortheCompanyandwillempowertheDirectorstoallotandissuenewsharesintheCompanyuptoanamountnotexceedingintotal10%oftheissuedsharecapitaloftheCompanyforthepurposeoffundingcurrentand/orfutureinvestmentprojects,workingcapital,and/orstrategicdevelopmentoftheGroup.Thiswouldeliminateanydelayarisingfromandcostinvolvedinconveningageneralmeetingtoobtainapprovaloftheshareholdersforsuchissuanceofshares.Thisauthority,unlessrevokedorvariedatageneralmeeting,willbevaliduntiltheconclusionofthenextannualgeneralmeeting.

Atthisjuncture,thereisnodecisiontoissuenewshares.Ifthereshouldbeadecisiontoissuenewsharesafterthegeneralmandateissought,theCompanyshallmakeanannouncementinrespectthereof.

STATEMENT ACCOMPANYINGNOTICE OF 11TH ANNUAL GENERAL MEETING


[8]


TheProposedShareholders’Mandate,ifapprovedbytheshareholdersoftheCompany,andtherenewalthereofonanannualbasis,willeliminatetheneedbytheCompanytoannounceand/orconveneseparategeneralmeetingsfromtimetotimetoseekshareholders’approvalfortheGrouptoenterintotheRecurrentRelatedPartyTransactionswithFarimaSdnBhd.Thiswouldreducesubstantialadministrativetime,inconvenienceandexpensesassociatedwiththeconveningofsuchmeetings,withouthowevercompromisingthecorporateobjectivesoftheGrouporadverselyaffectingthebusinessopportunitiesavailabletotheGroup.FurtherinformationcanbeobtainedinPartAoftheaccompanyingcirculardated3June2013.


TheProposedSharebuy-backofuptotenpercent(10%)oftheissuedandpaid-upsharecapital,ifapprovedbytheshareholdersoftheCompany,willenabletheCompanytomakepurchasesofordinarysharescomprisedintheCompany’sissuedandpaid-upordinarysharecapital.FurtherinformationcanbeobtainedinPartBoftheaccompanyingcirculardated3June2013.

7. SPECIAL BUSINESS – RESOLUTION 10, 11 & 12

PursuanttotheMalaysianCodeonCorporateGovernance2012,theBoardofDirectorshasviatheNominationCommitteeassessedtheIndependenceofMr.KeongChoonKeat,EncikMohdKhasanBinAhmadandMr.KamYongKanwhoeachhasservedasanIndependentNon-ExecutiveDirectoroftheCompanyforacumulativetermofmorethannineyears,andrecommendedthemtocontinuetoactasIndependentNon-ExecutiveDirectorsoftheCompanybasedonthefollowingjustifications:-

(i) eachofthemfulfillsthecriteriaofanIndependentDirectorpursuanttotheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad;

(ii) eachofthemisfamiliarwiththeCompany’sbusinessoperationsaseachhasbeenwiththeCompanyformorethan9years;

(iii) eachof themhasdevotedsufficient timeandattention tohis responsibilitiesasan IndependentNon-ExecutiveDirectoroftheCompany;and

(iv) eachofthemhasexercisedduecareduringhistenureasanIndependentDirectoroftheCompanyandcarriedouthisdutyintheinterestoftheCompanyandshareholders.

TheproposedResolutions10,11and12,ifpassed,willenableMr.KeongChoonKeat,EncikMohdKhasanBinAhmadandMr.KamYongKantocontinueinofficeasIndependentNon-ExecutiveDirectors.

STATEMENTACCOMPANYINGNOTICEOF11THANNUALGENERALMEETING(CONT’D)

ANNUALREPORT2012

CORPORATEINFORMATION

REGISTERED OFFICE

No.14-2,Jalan4A/27ASection2,WangsaMaju53300KualaLumpurTel : 03-41498128Fax : 03-41423128

PRINCIPAL PLACE OF BUSINESS

Penthouse,TheCrest3TwoSquareNo.2,Jalan19/146300PetalingJayaSelangorDarulEhsanTel : 03-78416000Fax : 03-78416088Email : [email protected]

SHARE REGISTRAR

ShareWorksSdnBhdNo.10-1,JalanSriHartamas8,SriHartamas50480KualaLumpurTel : 03-62011120Fax : 03-62013121

AUDITORS

BakerTillyMonteiroHengBakerTillyMHTowerLevel10,Tower1Avenue5BangsarSouthCity59200KualaLumpurMalaysiaTel : 03-22971000Fax : 03-22829980

PRINCIPAL BANKERS

HongLeongBankBerhadAmBankBerhadCIMBBankMayBankBerhadBankIslamMalaysiaBerhad

STOCK EXCHANGE LISTING

BursaMalaysiaSecuritiesBerhad-MainMarketSector:Construction

BOARD OF DIRECTORS

TengkuDato’SulaimanShah binTengkuAbdulJalilShah-Non-ExecutiveChairman

YongSoonChow-ManagingDirector

KohHuaLan(f)-ExecutiveDirector

YongShangMing-ExecutiveDirector

KeongChoonKeat-SeniorIndependentNon-ExecutiveDirector

MohdKhasanbinAhmad-IndependentNon-ExecutiveDirector

KamYongKan-IndependentNon-ExecutiveDirector

YongTiokKeng(f)-ExecutiveDirector,AlternatetoKohHuaLan

AUDIT COMMITTEE

MohdKhasanbinAhmad,ChairmanKeongChoonKeatKamYongKan

REMUNERATION COMMITTEE

YongSoonChow,ChairmanKeongChoonKeatMohdKhasanbinAhmad

NOMINATION COMMITTEE

KamYongKan,ChairmanKeongChoonKeatMohdKhasanbinAhmad

OPTION COMMITTEE

KeongChoonKeat,ChairmanMohdKhasanbinAhmadYongSoonChow

COMPANY SECRETARIES

HengChiangPoohFCIS(MAICSA7009923)ChiamHanTweeFCIS(MAICSA7009910)

[9]


[10]

Financial Year End2008

RM2009

RM2010

RM2011

RM2012

RM

Revenue 270,275,129 329,563,766 460,078,516 441,501,420 565,717,350

Profit Before Taxation 18,607,593 17,564,685 20,120,723 37,350,323 47,486,047

Profit After Taxation[Pre-acquisition loss/(profit)]

12,343,260 10,986,558 13,913,915 29,414,961 39,574,569

Profit Attributable to Shareholdersafter deduction/(addition) of pre-acquisition profit/(loss)]

12,343,260 10,986,558 13,938,701 30,423,570 39,929,590

Total Equity Attributable to Owners of the Company

222,541,616 230,781,043 240,823,111 267,531,117 315,974,933

Net Assets Per Share (sen) 1.79 1.86 1.94 2.16 2.30

Total Number of Shares 124,089,450 124,089,450 124,089,450 124,089,450 138,010,450

Basic Earnings per Share (sen) 9.95 8.85 11.23 24.56 30.65

Diluted Earnings per Share(after full conversion of Warrants)

9.95 8.85 11.23 24.56 30.65

Gross Dividend (%) 3.0 4.0 4.0 5.0 5.0

REVENUE (RM) PROFIT BEFORE TAXATION (RM)

500,000,000

400,000,000

300,000,000

200,000,000

100,000,000

02008 2009 2010 2011 2012

270,275,129

329,563,766

460,078,516

441,501,420

565,717,350 35,000,000

40,000,000

45,000,000

30,000,000

25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

02008 2009 2010 2011 2012

18,607,593

17,564,685

20,120,723

37,350,323

47,486,047FINANCIALHIGHLIGHTS

ANNUALREPORT2012

[11]

40,000,000

30,000,000

20,000,000

10,000,000

02008 2009 2010 2011 2012

12,343,260

10,986,558

13,913,915

29,414,961

39,574,569

40,000,000

30,000,000

20,000,000

10,000,000

2008 2009 2010 2011 2012

12,343,260

10,986,558

13,938,701

30,423,570

39,929,590

2.50

2.00

1.50

1.00

0.50

02008 2009 2010 2011 2012

1.79

1.86

1.94

2.16

2.30

35.00

30.00

25.00

20.00

15.00

10.00

5.00

02008 2009 2010 2011 2012

9.95

8.85

11.23

24.56

30.65

PROFIT AFTER TAXATION (RM)

NET ASSETS PER SHARE (SEN)

PROFIT ATTRIBUTABLE TO SHAREHOLDERS (RM)

BASIC EARNINGS PER SHARE (SEN)

FINANCIALHIGHLIGHTS(CONT’D)


[12]

TENGKU DATO’ SULAIMAN SHAH BIN TENGKU ABDUL JALIL SHAH[Non-ExecutiveChairman],aged57,wasappointedtotheBoardon26February2003asExecutiveChairmanandhewasre-designatedastheNon-ExecutiveChairmanwitheffectfrom1March2005.TengkuDato’SulaimanShahhasover20yearsofexperienceintheconstruction,printing,advertising,freightindustriesandhealthproducts.Hewasappointedthe“OrangBesarIstana”intheyear1996withthebestowedtitleof“TengkuSetiaSelangor”.Inthefollowingyear,hewasalsoconferred“DatoDiRajaSelangor”.Intheyear2007,hewasawarded“DatoSultanSharafuddinIdrisShah”(D.S.I.S).HeisprimarilyresponsiblefortheorderlyconductandworkingoftheBoardandthepublicrelationandcommunicationaffairsoftheGroup.Heattendedallofthefive(5)Boardmeetingsheldduringthefinancialyearended31December2012.

YONG SOON CHOW*[ManagingDirector],aged61,wasappointedtotheBoardon26February2003.MrYongistheco-founderofCrestBuilderSdnBhdandisthedrivingforcebehindtheGroup.MrYongstartedhiscareerasanengineerwithJabatanKerjaRayafrom1977to1981. Inyear1983,heformedCrestBuilderSdnBhdandhassuccessfullyturneditintoaprofitableconcern.Overtheyears,hehasaccumulatedinvaluableexperienceandindepthknowledgeofcivilengineeringandconstructionindustryingeneralfromonthejobtraining.HeisresponsiblefortheoverallbusinessoperationsandtheimplementationofpoliciesandstrategiesoftheGroup.Heattendedallofthefive(5)Boardmeetingsheldduringthefinancialyearended31December2012.

KOH HUA LAN (F)[ExecutiveDirector],aged61,wasappointedtotheBoardon26February2003.MadamKohisaco-founderofCrestBuilderSdnBhdandshehasmorethan20yearsofexperienceinfinancialandadministrationmanagement.Sheisprincipallyresponsiblefortheadministration,humanresourceandmanagementsupportservicesoftheGroup.Sheattendedallofthefive(5)Boardmeetingsheldduringthefinancialyearended31December2012.

YONG SHANG MING[ExecutiveDirector],aged30wasappointedtotheBoardon31January2008.HegraduatedfromCityUniversity,LondonwithaHonoursDegreeinCivilEngineering.HejoinedtheGroupinJune2003astheSpecialAssistanttotheGroupManagingDirector.HeisinvolvedintheprojectprocurementandimplementationaswellasthebusinessdevelopmentventuresoftheGroup.Heisalsoinvolvedintheprojectplanning,developmentandmarketingoperationsoftheGroup’spropertydevelopmentprojects.Heattendedallofthefive(5)Boardmeetingsheldduringthefinancialyearended31December2012.

KEONG CHOON KEAT[SeniorIndependentNon-ExecutiveDirector],aged68,wasappointedtotheBoardon25February2003andisamemberoftheAuditCommittee.HeisamemberoftheMalaysianInstituteofAccountantsandaFellowMemberoftheInstituteofCharteredAccountantsinEnglandandWales.HewasattachedtoBristolMyers&CompanyLtd.inEnglandasanAccountantin1968.HethenleftandjoinedMalaysianTobaccoCompanyBerhadasanAccountantin1969.From1974to1999hewasattachedtoUMWHoldingsBhdwhereheheldvariousmanagementpositionsinthegroupbeforebeingpromotedtothepositionofanExecutiveDirectorin1988.Uponretirementin1999,hejoinedaconsultancyfirmprovidingoutplacementandcareermanagementconsultancyservicesinMalaysia.HealsoservesontheBoardofJTInternationalBerhad,ChinTeckPlantationsBerhadandNegeriSembilanOilPalmsBerhad.Heattendedallofthefive(5)Boardmeetingsheldduringthefinancialyearended31December2012.

MOHD KHASAN BIN AHMAD*[IndependentNon-ExecutiveDirector],aged52,wasappointedtotheBoardon25February2003andistheChairmanoftheAuditCommittee.HegraduatedfromUniversitiTeknologiMARAwithadegreeinAccountancy.HeisamemberoftheMalaysianInstituteofAccountants.HeservedinBankNegaraMalaysiaforaperiodofabout7years,thelast2yearsofwhichhewassecondedtothethenCapitalIssuesCommitteeasitsPrincipalAssistantSecretary.Subsequently,hejoinedtheSecuritiesCommissionforaperiodofabout6yearsandhislastcapacitywasasanAssistantManagerinitsIssuesandInvestmentDivision.Duringthetenureofhisaboveappointments,hewasinvolvedinvariouscorporateexercisesrangingfrominitialpublicofferings,mergersandacquisitions,reversetake-overs,issuanceofbondsandothercapitalraisingexercises.Hethenjoinedtheprivatesectorin1997andheldvariousseniormanagementpositions.HeisalsotheDirectorofTaWinHoldingsBerhad,FarmBestBerhadandHomeritzCorporationBerhad.Heattendedallofthefive(5)Boardmeetingsheldduringthefinancialyearended31December2012.

DIRECTOR’SPROFILE

ANNUALREPORT2012

[13]

KAM YONG KAN[IndependentNon-ExecutiveDirector],aged54,wasappointedtotheBoardon26February2003andalsoamemberoftheAuditCommittee.Heisanex-fellowmemberoftheAssociationofCharteredCertifiedAccountants,UnitedKingdom,anex-memberoftheMalaysianInstituteofAccountantsandanAssociatememberoftheMalaysianInstituteofTaxation.Hehasover25yearsexperienceinaudit,finance,corporatefinance,taxandtreasuryfunctionsinpropertyrelatedindustries.Hewasattachedtoalistedpropertygroupfrom1991to2000andheldthepositionofaFinanceDirectorduringthelast4yearsofhistenureinthepropertygroup.Heattendedallofthefive(5)Boardmeetingsheldduringthefinancialyearended31December2012.

YONG TIOK KENG (F) [ExecutiveDirector,AlternatetoKohHuaLan(f)],aged34,wasappointedtotheBoardon25May2009.SheholdsaB.ScinAccounting&FinancefromLondonSchoolofEconomicsin2001.Shehasover11yearsofexperienceinthefieldsofaccountingandcorporatefinanceactivitiesandsheiscurrentlytheCorporateAffairsManagerofCBHB.SheisprincipallyresponsiblefortheCorporateAffairsandfinancialpoliciesoftheGroup.Sheattendedallofthefive(5)Boardmeetingsheldduringthefinancialyearended31December2012.

Further informationAlltheDirectorsareMalaysian.

ExceptforcertainrecurrentrelatedpartytransactionofrevenuenatureortradingnaturewhicharenecessaryforthedaytodayoperationoftheGroupandforwhichTengkuDatoSulaimanShahBinTengkuAbdulJalilShahisdeemedtobeinterestedasdisclosedinpage31.

YongSoonChowandKohHuaLanarehusbandandwife.YongShangMingisthesontoYongSoonChowandKohHuaLan.YongTiokKengisthedaughtertoYongSoonChowandKohHuaLan.YongTiokChin(amajorshareholder)isthedaughtertoYongSoonChowandKohHuaLanandsiblingtoYongShangMingandYongTiokKeng.Savedasdisclosedherein,therearenofamilyrelationshipsbetweentheDirectorsand/ormajorshareholdersoftheCompany,oranypersonalinterestorconflictofinterestinanybusinessarrangementinvolvingtheGroup.

ThesecuritiesholdingsoftheDirectorsaredisclosedonpage138.ByvirtueoftheirinterestinsharesoftheCompanyandunderSection6AoftheCompaniesAct1965,YongSoonChowandKohHuaLanaredeemedtobeinterestedinthesharesofallthesubsidiariestotheextenttheCompanyhasaninterest.

NoneoftheDirectorshasbeenconvictedofanyoffencewithinthepasttenyearsotherthantrafficoffencesifany.

Note :

* Indicates Directors who retire according to the Articles of Association of the Company and are eligible to offer themselves for re-election.

DIRECTOR’SPROFILE(CONT’D)


[14]

Dear Shareholders,

On behalf of the Board of Directors of Crest Builder Holdings Berhad (“CBHB” or the “Company”), it is with great pleasure to present the Annual Report and Financial Statement of the Company for the financial year ended 31 December 2012. (FY2012)

FINANCIAL REVIEW FY2012

2012hadtheMalaysianmarketswarmedwithaseriousoftougheconomicconditionsasaresultofthecontinuedfinancialcrisisintheWestandfluctuatingpropertyspeculationsfrominvestorsduetodomesticsupplyanddemand.However,despitethemacroeconomicuncertaintiesCBHBcontinuestodeliverastrongfinancialyearwitharevenueofRM565.72million,atoplineincreaseof28.14%ascomparedtoRM441.50millionreportedinourpreviousyear.TheCompanyreportedanincreaseinProfitbeforeTax(‘PBT’)of27.15%(RM47.49millioninFY2012ascomparedtoRM37.35millioninFY2011).

IntermsofoursegmentalincomeforFY2012,ourconstructionsegmentremainstobetheleadingcontributorreportingarevenueofRM428.30million,followedbyourpropertysegmentwitharevenueofRM52.74million;representinganincreaseof8.45%and14.63%,respectively.

IbelievethattheCompany’scontinuedpositivefinancialgrowthandresilienceisaresultofourmanagement’smindfulandstrategicallystructuredbusinessplansandoperations.

CORPORATE DEVELOPMENTS

Suffice to say, this year has been quite an eventful and fulfilling year fortheCompany. In our first quarter,we secured a sizable joint developmentprojectwithSyarikatPrasaranaNegaraBhd(“Prasarana”)withatotalGrossDevelopmentValue(GDV)ofRM1.04billionwhichmarkstheCompany’sfirstbillion-ringgitpropertydevelopmentprojectintheheartofKualaLumpur.Thismixed-developmentproject,comprisingaretailmall,servicedresidentialsuites,hotelandofficeslocatedatDangWangiLRTStationisexpectedtocommencephysicalworksinthesecond-halfofFY2013withaconstructiontime-lineoffive(5)years.TheBoardisgratifiedwithsuchadealaswearenotboggeddownbyhugelandcostorinitialhugecapitalrequirements,aspaymentstoPrasaranawillbemadebywayofacombinationofcashandpaymentinkindoverthelifeoftheproject.InJune,theCompany’shardworkcontinuedtopayoffwhenwesecuredoursecondbillion-ringgitpropertydevelopmentprojectwithMalaysiaRubberBoard(“MRB”).ThisjointdevelopmentprojectwithaGDV

ofRM1.3billionandalandsizeof2.2hainJalanAmpangisexpectedtostartphysicalworksinparallelwithourDangWangiprojectduringthesecond-halfofFY2013.Securingtwobillion-ringgitprojectswithinayearforCBHBisevidencethatthemanagementissteeringtheCompanyintherightdirectioninbuildingsuccessfulgrowthanditisaddingtotheCompany’sdrivingforcetoexpandanddiversifyitsbusinessblueprintbothintheconstructionandpropertydevelopmentindustries.

CHAIRMAN’SSTATEMENT

ANNUALREPORT2012

[15]

AddingastrongpositivecontributiontoourbooksforFY2012isourTierraCrestpropertyinKelanaJaya,whichwesuccessfullysignedandsecuredanine-year(3+3+3years)tenancyagreementwithUnitarInternationalUniversity(“Unitar”),wherebytheUniversitywillbeoccupyingthetwoofficetowersastheirheadquarters.Unitar’soccupancyoverthenextnineyearswillgenerateannualrevenueofapproximatelyRM6.0millionforCBHB.TierraCrestisstrategicallylocatedattheheartofKelanaJayawithaccesstoandfromallsurroundingmajorhighways,thusprovidingastrongattractionforourthree-levelretailpodiumuponcompletionin2013.Lastyear,wehadbrieflyhighlightedourUNITAPAHConcessionProjectwiththeMinistryofHigherEducationwhichseesCBHBdevelopingacampustoundertakeacapacityof5,000students.TheprogressofthisprojectisonscheduleforitstargetedcompletiondateofJanuary2014.Duringthelastquarteroftheyear,CBHBhadalsocompleteda10%placementwhichwasfullytakenupbyvariousinstitutionalinvestors.Simultaneously,abonusissueofnewwarrantswasalsoexecutedwithaswapratioofthree(3)newwarrantsforeveryten(10)existingordinaryshares.DIVIDENDTheBoardbelievesinbuildingshareholder’sinterestandsharingoursuccessbyrewardingourshareholderswhileatthesametimemaintainingsufficientfundstoinvestintheCompany’slongtermgrowth.ForFY2012,theBoardhasrecommendedafirstandfinalgrossdividendof5.0senpershare,lessincometaxof25%atthisAnnualGeneralMeeting.MARKET OUTLOOK AND FUTURE PROSPECTSDespitetheglobalwhirlwindeffectsfromtheon-goingEuropeanFinancialCrisis,Malaysiahasmaintainedahealthygrowthof5.6%for2012,placingMalaysiaasoneofthebestregionalperformers.Accordingtoreports,Malaysia’sresilienteconomyischaracterisedbycrediblegrowth,lowinflation,fullemployment,risinginvestmentfrombothforeignanddomesticinvestors,healthyforeignreservesandstrongforeigninterestonthelocalbourse.Positivegrowthandincreasingmarketinvestmentsfrom2012areexpectedtospilloverandcontinuefor2013.ThepositiveoutlookissupportedbyanumberofnationalprojectsandinitiativessuchasTheEconomicTransformationProgramme(ETP), theNationalKeyResultsAreas (NKRAs), theNationalKeyEconomicAreas (NKEAs)andsoon.ThesenationalprojectsareleadingtothehigherinvestmentsandinfrastructuredevelopmentprojectssuchastheMRTProject,henceincreasingprojectopportunitiesfortheindustry.OneofMalaysia’sVision2020keyinitiativesistodriveMalaysiaintoadevelopedandhighincomenationby2020.Thuswithreferencetorecentrecords,theaveragehouseholdincomehasbeenontherisewithanannualincreaseof7.2%p.a.overthelastthreeyears.Withthesestatisticsinsight,webelievethatitwillincreasethepropertymarketandhousingdemandsgoingforward.MOVING FORWARD AsatthecloseofFY2012,theGroup’sorderbookstoodatahealthyRM1.9billionwithanunbilledorderbookofRM1.26billion.TheGroupiscontinuouslybiddingforprojectstoensurethatwemaintainastrongfinancialstreaminthelongterm.ThuswithatenderbookofapproximatelyRM6.0billioninthepipeline,theGroupisanticipatinginmaintainingasteadygrowthfortheGroup’srevenuestream.WiththeGroup’sportfolionowreinforcedwithourtwobillion-ringgitprojects,webelievethatwehaveachievedinbringingCBHBtothenextstageandwehopetocontinuouslybuildourportfoliowithsuchprojects.Therefore,wearealwayscommittedtoon-goingadvancementofourprofessionalexpertiseandtechnicalcapabilitiessothatwearealwaysinastrongpositionforprojectopportunitiesthatarisesandlinedwithacompetitiveedge.APPRECIATIONOnbehalfoftheBoardofDirectors,Iwishtoexpressourheart-feltappreciationtoallourcustomers,vendors,suppliers,consultants,associates,bankersandbusinesspartnersfortheirbusiness,support,loyalty,advice,cooperationandtrust.OnbehalfoftheBoard,IalsowishtoexpressourthanksandappreciationtoourmanagementandstafffortheircontinuedhardworkanddedicationtotheCompany.ToourvaluedShareholders,theBoardofDirectorsandIthankyouforyourcontinuedsupport,confidenceandtrustinus.WewillcontinuetoworkhardforthecreationandpreservationofshareholdervalueintheGroup.

CHAIRMAN’SSTATEMENT(CONT’D)


[16]

MANAGEMENTREVIEW

Crest Builder Holdings Berhad (“CBHB”orthe“Group”) isprincipally involvedingeneralconstructionworksandconstruction-related activities. TheGroup is a registeredClassAContractorwith theMinistry of EntrepreneurialDevelopmentandaCategoryG7withtheConstructionIndustryDevelopmentBoard.SecuringtheseregistrationshasenabledtheGrouptotenderandcarryoutallcategoriesofbothgovernmentandprivateconstructioncontracts.Wepossessthenecessaryexpertiseandcapabilitytocovervariousareasofconstruction-relatedservicesincludingpropertydevelopment,propertymanagement,M&Eservices,projectmanagementandcarparkmanagement.TheconstructionbusinessoftheGroupfocusesontheinfrastructureandbuildingworksofresidentialdevelopments,healthcare amenities, infrastructure, leisure and education amenities, education facilities etc.with regards to ourinfrastructureworks,weprovideacomprehensiveservicethatincludesthedesign,construction,finalcompletionandmaintenanceofroads,bridgesandotherbasicfacilities.Ourproperty development iscomprehensivelysupportedbyourconstructiondivision inprovidingCBHBwithanintegratedoperationbenefitunderoneroof.Equippedwithourownin-houseexpertise,weareinvolvedinallaspectsoftherealestatebusiness,fromplanningsubmissiontothecompletionofinteriorfurnishingofourowndevelopments.

CBHBmaidenpropertydevelopmentprojectwhich launched in2007–3TwoSquare,PetalingJaya– isamixeddevelopmentwheretheGroup’sheadquartersarecurrentlylocated.CBHBistheassetowner,andproperty and car park managementofthe13-storeyCorporateTowerandattachedcarparklots,forwhichtherentalcontributesanannualincomeofapproximatelyRM8.85million.

FINANCIAL PERFORMANCE

Fortheyearended31December2012,theGroupreporteda12-monthrevenueofRM565.72million,givinga28.14%increaseascomparedtothepreviousyearofRM441.50million.Withregardstoourprofitfortheperiod(‘PAT’),RM39.57millionwasreportedforFY2012,translatingtoearningspershareof30.65sen,a34.55%increasefromtheprofitofRM29.41millionreportedinFY2011.TheGroup’sbusinessoperationsandfinancialactivitiesaremanagedandreportedseparatelyininthreedivisionswhichenablestheimplementationofastreamlinedmanagementstructure.

Construction

TheGroup’sfoundingdivisioncontinuestobetheleadingcontributortoCBHB’sprofitforFY2012,witharevenueofRM428.30million, representing75.71%of theGroup’stotal revenue.FY2012earningsbefore interestandtaxation(“EBIT”)reportedasumofRM30.55million.Theincreaseinthedivision’sprofitsforFY2012wasmainlyduetoprogressiveincomethatwasrecognisedduringtheyearforafewofourcompletedconstructionprojects,namelyVerticasResidensi,MenaraBinjai,SkyResidenceandUiTMTapahIIBranchCampus.(‘Unitapah’).

Property Development

ForFY2012,thepropertydevelopmentdivisionrecordedarevenueofRM52.74million,showinganincreaseof14.63%comparedtoitspreviousyearofRM46.01millionandanEBITofRM9.12million.

Therewasarespectiveincreaseinourfourthquarterperformanceduetoprogressiveprofitsrecognised,suchasthe25%salesofournewdevelopmentproject,AvenueCrestOfficeSuites.AvenueCrestisa24-storeycommercialbuildingcomprising495unitsofboutiqueofficesuitesandSOFOsuiteslocatedinBatuTiga,ShahAlam.AlsocontributingtoourprofitsforFY2012isPhase3ofourBatuTigaresidentialdevelopment,AlamIdaman,whichsuccessfullysaw100%sales,translatingtoatotalof326unitssold.

ANNUALREPORT2012

[17]

MANAGEMENTREVIEW(CONT’D)

Investment

ForFY2012,theGroup’sinvestmentdivisionrecordedarevenueofRM9.02millionandanEBITofRM38.24million.Theinvestments’EBITcomparedtoourtoplinewashugelyskewedasprofitswereduetothefairvaluegainfromourinvestmentproperties,namelyTheCrestCorporateToweranditsattachedcarparklots,andashopunitslocatedinTamanMegah,whichamountedtoRM19.62million.

PROJECT DEVELOPMENTS

2012wasafruitfulyearfortheGroupwhichsawastrongstarttothefirstquarterwhenwesecuredajointdevelopmentprojectwithSyarikatPrasaranaNegaraBhdpertainingatotalGDVvalueofRM1.04billion.Thismixeddevelopmentproject, locatedatDangWangiLRTStationattheheartofKualaLumpur,encompassesaretailmall,SOFOsuites,offices,apartmentunitsandahotel.Themixeddevelopmentproject,code-named“The Bank”,isexpectedtostartitsphysicalworksduringthesecondhalfof2013withatargetedcompletiondateof2018.ThesuccessofsecuringaprojectsuchasDangWangicontinuedwhenweprocuredoursecondmajordevelopmentprojectfortheyearwiththeMalaysiaRubberBoard(‘MRB’),withatotalGDVofRM1.33billion.Thisjointdevelopment,code-named“The Galleria”,islocatedonJalanAmpangandsitson2.2haoflandinthecentreofKualaLumpur.Theproposeddevelopmentwillcomprisea28-storeyapartmenttower,SOHOtowers,a33-storeycorporatetoweranda6-storeyboutiqueretailmall.PhysicalworksforTheGalleriaisexpectedtostartonacorrespondingtimelinewiththeDangWangiproject–duringthesecondhalfof2013withanexpectedconstructiontimelineofsixyears.In termsof initial financial requirementsandcommitments for theabovementionedprojects,CBHB isgrateful andfortunate tohavesecuredsuchprojectswhereby theGroup isnotconstrainedbysubstantial landcostsnor initialcapitalrequirementstosupporttheseprojects.ThesefavourabletermsaremadepossiblebecauseCBHB’sjointprojectpartnersareprovidingtherespectivelandasequityandCBHBprojectcapitalrequirementswillbemadebywayofacombinationofcashandpaymentinkindoverthelifeoftheproject.TheGalleriaandTheBankareexpectedtoprovidepositivecontributionstotheGroupsometimeinFY2014.OneofourkeypropertydevelopmentprojectswhichhasstartedtocontributetoourincomeforFY2012isTierra CrestlocatedinKelanaJaya,whichisthenewUNITARheadquarters.Wesuccessfullysecuredanine-years(3+3+3)tenancyagreementwithUNITARon18October2012.UNITARwillbeoccupyingtheentiretyofthetwoofficetowers,makingupapproximately85%ofthetotallettableareaof280,000squarefeet.TierraCrestisstrategicallylocatedinKelanaJayawithdirectaccessfromallthemajorhighwaysintheareasuchastheFederalHighway,LDPandSprint,andisalreadysurroundedbywell-knownuniversitiessuchasKDUUniversity,SunwayUniversity,TaylorsandUNITAR’sexistingcampus.TierraCrestisa16-storeydevelopmentconstructedonalandareaofapproximately1.82acres,withtwoofficetowersanda3-storeyretailpodium.ThisRM130-millionprojectconsistsofonlytwounitsperfloorintheofficetowerswithabuilt-upareaofapproximately8,000squarefeetperunit,towhichUNITARarecommittinganannualrentalofRM6.0million.ThisthuscontributesanadditionalrecurringincomestreamforCBHBforthetermofthetenancycontractperiod.TheGroupisretainingandengagingthepropertymanagementoftheretailpodium,whichsetsusontrackandprovidesthemanagementwiththenecessaryexperiencegoingforwardwiththeupcomingMRBandDangiprojects.WithKelanaJayabeinggrantedthe“CITY”statusandconsideringthecatchmentpopulationofapproximately250,000withina3-kmradius,themanagementbelievesthatitsstrategiclocationwillstronglyattractretailersandpotentialinvestors.

UiTM Tapah II Campusproject,whichwassecuredin2010,istheGroup’sfirstconcessionprojectattachedtoa23-yearsagreementwiththeMinistryofEducationandUniverstiTeknologiMaratobuildandmaintainthecampusfacilitiesforthecourseoftheconcessionperiod.Theproject,whichcarriesacontractsumofRM292.71millionandaconstructioncostofRM284.89million,willgenerateanannualcashflowofapproximatelyRM45.25millionuntiltheyear2034,beingtheendoftheconcessionperiod.Thefullycompletedcampus,builton75acresoflandwillcaterforacapacityofupto5,000students.UNITAPAH’s75acresissittingononlyasmallfractionofatotallandmassof1,200acres,whichhasthecapacitytoaccommodateupto50,000students.Wethereforehavereasontobelievethatthereisstrongpotentialforustobeengagedforfurtherexpansioninthedevelopmentofthisland.Ourportfolioofnewpropertydevelopments isoneofourkeystrategicplans forenhancingandstrengthening theGroup’searningsbybuildingastableandrecurringincomeplatformthatwillenableustoensuresustainablegrowthtomoveforward.


[18]

CORPORATE ACTIVITIES

On30October2012,CBHBcompleteda10%placementwhichwasfullytakenupbyvariousinstitutionalinvestors.ThisraisedatotalofRM11.3million,aresultthatbuilttheGroup’sconfidenceandsupportedinvestors’confidenceinCBHB.Postthe10%placement,abonusissueofnewwarrantswasalsoexecutedwithaswapratioofthree(3)newwarrantsforeveryten(10)existingordinaryshares.TheBoardofCBHBbelieves insharingthefruitsof itssuccesswith itsshareholderswhileconsciouslymaintainingstructuredinvestmentrequirementsfortheGroup’slong-termgrowth.Thus,inachievingthisbalanceandincontinuingtodeliverandbuildourshareholders’interestforFY2012,theBoardhasrecommendedafirstandfinalgrossdividendof5.0senpershare,lessincometaxof25%atthisAnnualGeneralMeeting.

MOVING FORWARD

FloatingwithahealthyorderbookofRM1.9billionandanunbilledorderbookofRM1.26billion,weareconfidentthattheseprojectswillcarryusforwardforanother5years.Asadrivenandgrowingbusiness,theGroupiscontinuouslybiddingforprojectstoensurethatwemaintainastrongfinancialincomestreamandgearingforlongtermsustainablegrowth.WearecurrentlybiddingonatenderbookofapproximatelyRM6.0billion,andwiththis,weareconfidentthatwewillbeabletomaintainasteadygrowthforFY2013,barringanyunforeseencircumstances.ForFY2013,theGroupwillbekeptonabusyschedulewiththecommencementoftheMRBandDangWangidevelopmentprojectsandsecuringfulloccupationoftheretailpodiumofTierraCrest,tohaveitrunningatfullcapacity.ThisaddstotheGroup’srevenuestreamforFY2013.TheseprojectswillbethekeydriverstoourpropertydevelopmentandinvestmentdivisionandinlaunchingtheGrouponitsnextlevelofgrowth.Forourpropertydevelopment,wewillfocusonmatureareasandpocketlands,mainlyintheKlangValley.Developmentprojectswithinmatureareasprovideareadypopulation,advancedinfrastructure,keyaccessroutesandotherservingamenitiesandhencereducesmarketingcostsandthewaitingperiodfortheareacapacitytodevelop.Themanagementbelievesthatfocusingonpocketlanddevelopmentsthatreducesinitialfinancialrequirementsanddevelopmentrisksinthelongterm–ascomparedtothedevelopmentoflargetownshipsperse–willprovideastrongstablegrowthfortheGroup.Fortheconstructiondivision,wewillcontinuetofocusonapartments,corporateofficesandretaildevelopmentsasthemanagementforeseesagrowingdemandinthesemarketsgoingforward.Withrespecttothecorporateoffices,themarketisdrivingthedemandformoreadvanced,high-techandGradeAoffices.Theworkingclassandtheyounger,upcominggenerationaredrivingthedemandforthesupplyofnewhomes.As the industryexperiencescontinuousgrowth inbuildingmaterialand technologyadvancements, theGroupalsoworkscontinuouslytoensurethatweareequippedinallrequiredaspectsinordertomaintainacompetitiveedge.Inourindustry,professional,technicalandfieldexpertiseareaconstantdemand,andwethereforecommittoprovidingon-goingtrainingandknowledgeadvancementforourteamofexpertsandconsultants.

INDUSTRY OUTLOOK AND FUTURE PROSPECTS

Inspiteofthevariouseconomicconditionsandtheon-goingEuropeanFinancialCrisis,Malaysia’seconomyhasremainedresilienttoallthenegativemarketeffectsandcontinuedtodeliverapositivegrowthof5.6%.2012’spositivegrowthandincreasingmarketinvestmentsareexpectedtocontinuefor2013andthepropertymarketisexpectedtodeliverfurthergrowthascomparedto2012.Accordingtoreports, resources, thepropertymarketcorrelatestoeconomicgrowth.Malaysia’sresidentialsector isalsodrivenbyhighhousehold formationstemmingfromMalaysia’srelativelyyoungpopulationwithrisingincomes.Asresidentialpropertiesaremainlyowner-occupied,thereisaconstant,growingdemandforresidentialpropertiesasMalaysia’syoungpopulationcontinuestoincrease.


ANNUALREPORT2012

[19]

Malaysia’spropertymarketiscurrentlyintheearlystagesofapromisinggrowthspurt.Duetoitsstrongeconomicclimateandgovernmentinitiatives,thisgrowthnotonlyencourageslocal investmentsbutalsoattractsforeigninvestments.Forexample,thepromisingIskandardevelopmentiscurrentlyattractingforeigninvestments,especiallyfromSingaporeastheirownpropertymarketisbecomingsaturated.Asmoreandmoreforeigninvestmentsenter,Malaysia’smarketdemandandpricingwillbeboostedinthelongterm.NationalinitiativesandprojectssuchastheETPProgramme,theNKEA,theGreaterKLProgrammeetc.areresultingin the increased investments in infrastructuredevelopmentssuchas theKlangValleyMRTProject.Malaysia’sETPProgrammeissettospendasurplusofRM100billionoverthenextfivetosixyearsindevelopingandadvancingtherailwayinfrastructure–i.e.theMRT,LRT,Monorail,andElectrifiedDoubleRailwayProject(EDTP)–andinvestingintonewbuildingsinKLCitythroughtheGreaterKLprogramme.Asaresultoftheadvancingrailwaysystems,thedevelopmentimpactwillspillovertoitssurroundingareasandothersectors,especiallythepropertysector.DrivingMalaysiaintoadevelopednationandahigh-incomenationbytheyear2020isoneofthekeyaspectsoftheGovernment’sVision2020.Thus,thedevelopmentandadvancementofitstransitandGreaterKLinfrastructureisoneofitsmainfocusesinmeetingthisgoal.Hence,asanadvancedconstructionandpropertydevelopmentcompany,withover30yearsofexperienceunderourbelt,webelievethatweareinastrongpositiontobenefitfromtheincreasingprojectopportunitiesintheindustry.


100%

51%

51%

51%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Investment Holding

CRESTLAND DEVELOPMENT SDN BHD316852-A

Property Investment

LANDASAN BAYU SDN BHD978758-T


CREST BUILDER SDN BHD110330-K

Construction

CBTECH (M) SDN BHD508386-M

Mechanical & Electrical Engineering Services

3 TWO SQUARE SDN BHD617273-X

Property Investment

CB LAND SDN BHD658719-D


NEPFIELD SDN BHD592256-M


VERTICAL SUCCESS SDN BHD691623-V

Property Investment

CRESTLAND PROJECTMANAGEMENT SDN BHD

659478-VProject Management

CREST BUILDERINTERNATIONAL SDN BHD

644441-TInvestment Holding

DAMANSARA ONE SDN BHD669184-V


UNITAPAH SDN BHD846665-X

Concession holder

INTAN SEKITAR SDN BHD985063-T



[20]

CORPORATESTRUCTURE

100%

51%

51%

51%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Investment Holding

CRESTLAND DEVELOPMENT SDN BHD316852-A

Property Investment

LANDASAN BAYU SDN BHD978758-T


CREST BUILDER SDN BHD110330-K

Construction

CBTECH (M) SDN BHD508386-M

Mechanical & Electrical Engineering Services

3 TWO SQUARE SDN BHD617273-X

Property Investment

CB LAND SDN BHD658719-D


NEPFIELD SDN BHD592256-M


VERTICAL SUCCESS SDN BHD691623-V

Property Investment

CRESTLAND PROJECTMANAGEMENT SDN BHD

659478-VProject Management

CREST BUILDERINTERNATIONAL SDN BHD

644441-TInvestment Holding

DAMANSARA ONE SDN BHD669184-V


UNITAPAH SDN BHD846665-X

Concession holder

INTAN SEKITAR SDN BHD985063-T


ANNUALREPORT2012

[21]

REPORT OF THEAUDIT COMMITTEE

COMPOSITION AND MEMBERS

The currentAuditCommittee comprises three (3)members of theBoardwho are all IndependentNon-ExecutiveDirectors.AlltheIndependentNon-ExecutiveDirectors,MohdKhasanBinAhmad,KeongChoonKeatandKamYongKanaremembersoftheMalaysianInstituteofAccountants.BelowarethemembersoftheAuditCommitteeduringthefinancialyear:-

Directors Status1. MohdKhasanBinAhmad-Chairman IndependentNon-ExecutiveDirector2. KeongChoonKeat SeniorIndependentNon-ExecutiveDirector3. KamYongKan IndependentNon-ExecutiveDirector

TERMS OF REFERENCE

TheAuditCommitteeisgovernedbythefollowingtermsofreference:-

1. Composition

(i) TheCommitteeshallbeappointedbytheBoardfromamongsttheDirectorsexcludingAlternateDirectors;shallconsistofnotlessthanthreemembers,allcurrentmembersareindependantnon-executiveDirectors;andatleastonememberoftheauditcommittee:-

(a) mustbeamemberoftheMalaysianInstituteofAccountants;or

(b) ifheisnotamemberoftheMalaysianInstituteofAccountants,hemusthaveatleast3years’workingexperienceand:-

(aa) hemusthavepassedtheexaminationsspecifiedinPart1ofthe1stScheduleoftheAccountantsAct1967;or

(bb) hemustbeamemberofoneoftheassociationsofaccountantsspecifiedinPart11ofthe1stScheduleoftheAccountantsAct1967.

(c) fulfilssuchotherrequirementsasprescribedbyBursaMalaysiaSecuritiesBerhad or approved bytheSecuritiesCommission

TheChairmanshallbeanindependentnon-executiveDirectorelectedbythemembersoftheCommittee.

(ii) IntheeventofanyvacancyintheCommitteeresultinginthenon-complianceofparagraph(i)above,theBoardmustfillthevacancywithin3months.

(iii) ThetermofofficeandperformanceoftheCommitteeandeachofitsmembersshallbereviewedbytheBoardatleastonceevery3yearstodeterminewhethertheCommitteeanditsmembershavecarriedouttheirdutiesinaccordancewiththeirtermsofreference.

2. Authority

TheCommitteeisgrantedtheauthoritytoinvestigateanyactivityoftheCompanyanditssubsidiarieswithinitstermsofreference,andallemployeesaredirectedtoco-operateasrequestedbymembersoftheCommittee.TheCommitteeisempoweredtoobtainindependentprofessionalorotheradviceandretainpersonshavingspecialcompetenceasnecessarytoassisttheCommitteeinfulfillingitsresponsibility.


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3. Responsibility

TheCommitteeistoserveasafocalpointforcommunicationbetweennon-CommitteeDirectors,theexternalauditors,internalauditorsandtheManagementonmattersinconnectionwithfinancialaccounting,reportingandcontrols.TheCommitteeistoassisttheBoardinfulfillingitsfiduciaryresponsibilitiesastoaccountingpoliciesandreportingpracticesoftheCompanyandallsubsidiariesandthesufficiencyofauditingrelativethereto.ItistobetheBoard’sprincipalagentinassuringtheindependenceoftheCompany’sexternalauditors,theintegrityofthemanagementandtheadequacyofdisclosurestoshareholders.

IftheCommitteeisoftheviewthatamatterreportedtotheBoardhasnotbeensatisfactorilyresolvedresultinginabreachoftheBursaMalaysiaSecuritiesBerhad’s(“BursaSecurities”)ListingRequirements,theCommitteeshallpromptlyreportsuchmattertotheExchange.

4. Functions

ThefunctionsoftheCommitteeareasfollows:-

(i) reviewwiththeexternalauditors,theirauditplan;

(ii) reviewwiththeexternalauditors,theirevaluationofthesystemofinternalcontrols;

(iii) reviewwiththeexternalauditors,theirauditreport;

(iv) reviewtheassistancegivenbytheCompany’sofficerstotheexternalauditors;

(v) reviewtheadequacyofthescope,functions,competencyandresourcesoftheinternalauditfunctionsandthatithasthenecessaryauthoritytocarryoutitswork;

(vi) reviewtheinternalauditprogramme,processes,theresultsoftheinternalauditprogramme,processesorinvestigationundertakenandwhetherornotappropriateactionistakenontherecommendationsoftheinternalauditfunction;

(vii) reviewthequarterlyresultsandyearendfinancialstatements,priortotheapprovalbytheBoard,focusingparticularlyon:-

(a) changesinorimplementationofmajoraccountingpolicychanges;(b) significantandunusualevents;(c) significantadjustmentsarisingfromtheaudit;(d) compliancewithaccountingstandardsandotherlegalrequirements;(e) compliancewithBursaMalaysiaSecuritiesBerhad;and(f) thegoingconcernassumption.

(viii) reviewanyrelatedpartytransactionandconflictofinterestsituationthatmayarisewithintheCompanyorGroupincludinganytransaction,procedureorcourseofconductthatraisesquestionsofmanagementintegrity;

(ix) considerthenomination,appointmentandre-appointmentofexternalauditors;theirauditfees;andanyquestionsonresignationorremoval;and

(x) reviewtheallocationofoptionsduringtheyearundertheCompany’sEmployeesShareOptionScheme(“ESOS”)toensurethatitisinaccordancewiththecriteriadeterminedbytheOptionCommitteeandincompliancewiththeESOSby-laws.

REPORTOFTHEAUDITCOMMITTEE(CONT’D)

ANNUALREPORT2012

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5. Meetings

(i) TheCommitteeistomeetatleastfourtimesayearandasmanytimesastheCommitteedeemsnecessary.

(ii) InordertoformaquorumforanymeetingoftheCommittee,two(2)ofthemembersmustbepresentandallpresentmustbeNon-ExecutiveDirectorsandmajoritymustbeIndependentDirectors.

(iii) ThemeetingsandproceedingsoftheCommitteearegovernedbytheprovisionsoftheArticlesofAssociationoftheCompanyregulatingthemeetingsandproceedingsoftheBoardsofarasthesameareapplicable.

(iv) Thedirector/person responsible for thefinancialmanagementof theparentcompanyand theheadofinternalauditshallnormallyattendmeetingsoftheCommittee.Thepresenceofarepresentativeoftheexternalauditorswillberequestedifrequired.

(v) Uponrequestbytheexternalauditors,theChairmanoftheCommitteeshallconveneameetingoftheCommitteetoconsideranymatterstheexternalauditorsbelieveshouldbebroughttotheattentionoftheDirectorsormembersoftheCompany.

(vi) Atleasttwiceayear,theCommitteeshallmeetwiththeexternalauditorswithoutthepresenceofotherdirectors,andemployeesofthelistedissuerwheneverdeemednecessary.

6. Secretary and minutes

ThesecretaryoftheCommitteeshallbetheCompanySecretary.MinutesofeachmeetingaretobepreparedandsenttotheCommitteemembers,andtheCompany’sDirectorswhoarenotmembersoftheCommittee.

MEETINGS

TheAuditCommitteeconvenedfive(5)meetingsinrespectforfinancialyearended31December2012.Theattendanceforthemeetingswereasfollows:

No. of Meetings No. of Meetings HeldMembers Attended During Tenure

1. MohdKhasanBinAhmad-Chairman 5 52. KeongChoonKeat 5 53. KamYongKan 5 5

SUMMARY OF ACTIVITIES

Forthefinancialyearunderreview,theAuditCommitteecarriedoutitsdutiesassetoutinthetermsofreference.TheCommitteeconvenedfive(5)meetingstoreviewthefollowing:-

• TheannualfinancialstatementspriortosubmissiontotheBoardofDirectorsforconsiderationandapproval;• TheunauditedQuarterlyFinancialResultsforfourquartersinyear2012forthereleasetotheBursaMalaysia

SecuritiesBerhad;• TheRecurrentRelatedPartyTransactionsandRelatedPartyTransactionsoftheCompany;• TheStatementofCorporateGovernanceandInternalControlStatementfordisclosureinAnnualReportyear

2011;• Reviewoftheinternalauditreportforfinancialyear2011&2012includinginternalcontrols;andimplementation

ofrecommendations;• TheinternalandexternalauditplanningmemorandumsandprogrammesoftheInternalandExternalAuditorsfor

thefollowingyearaswellastherecommendationoftheirrespectivefeestotheBoard;• ConsiderandrecommendtotheBoardofDirectorstheappointmentofexternalandinternalauditors;• Therecommendationsbytheexternalauditorsinrespectofcontrolweaknessesnotedduringthecourseoftheir

audit;and• TheallocationofoptionsundertheCompany’sESOSschemetoensureitscompliancewithBy-laws.

Themeetingswereappropriatelystructuredthroughtheuseofagendasandmeetingpapers,whichweredistributedtomemberswithsufficientnotification.



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INTERNAL AUDIT FUNCTION

TheCompanyhasanout-sourcingarrangementwithanindependentprofessionalfirmtoprovideinternalauditserviceswhichassiststheAuditCommitteeinthedischargeofitsfunctions.TheInternalAuditoristoprovideindependentandobjective reportson theorganization’smanagement records,accountingpoliciesandcontrolsdirectly to theAuditCommittee.Suchaudits/reviewsalsoensureinstitutedcontrolsareappropriateandareeffectivelyappliedtoachieveacceptablerisksexposures.

Duringthefinancialyear,theInternalAuditorconductedindependentreviewsandevaluatedriskexposuresrelatingtotheGroup’sgovernance,operationsandinformationsystemasfollows:-

• Reliabilityandintegrityoffinancialandoperationalinformation.• Effectivenessandefficiencyofoperations.• Safeguardingofassets.• Compliancewithpoliciesandprocedures,laws,regulationsandcontractsi.e.reasonablyensuringconformity

andadherencetothesematters.

TheInternalAuditoralsoestablishedfollow-upaudits/reviewstomonitorandtoensurethatinternalaudit’srecommendationshavebeeneffectivelyimplemented.Reports,includingwhererelevant,actionplansagreedwiththeoperationallevelmanagement,arecirculatedtoSeniorManagementandaretabledattheAuditCommitteeMeeting.InternalauditfeesofRM65,000waspaidtotheoutsourcedinternalauditorsforthefinancialyearended31December2012.

Duringthefinancialyear,theinternalauditactivitieshavebeencarriedoutaccordingtotheinternalauditplanwhichhasbeenapprovedbytheAuditCommittee.


ANNUALREPORT2012

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STATEMENT ONCORPORATE GOVERNANCE

TheBoardofDirectorsremainscommittedtoachievingandmaintainingthehigheststandardsofcorporategovernancethroughout theGroup. TheBoard views corporate governance as synonymouswith four key concepts; namelytransparency,accountability,integrityaswellascorporateperformance.

MeasuresandeffortshaveandshallbetakentoensureasfaraspracticabletheadoptionandimplementationofthePrinciplesandRecommendationssetoutintheMalaysianCodeonCorporateGovernance(“theCode”)andintheMainMarketListingRequirements(“MMLR”)oftheBursaMalaysiaSecuritiesBerhad(“BursaSecurities”).

SetoutbelowisadescriptionofhowtheGrouphasappliedthePrinciplesoftheCodeandhowtheBoardofDirectorshascompliedwiththeRecommendationssetoutintheCodethroughoutthefinancialyearended31December2012.

SECTION A - BOARD OF DIRECTORS

The Board

TheGroup recognizes the important role playedby theBoardofDirectors in the stewardship of its direction andoperationsandultimatelytheenhancementoflongtermshareholdervalue.Tofulfillthisrole,theBoardisresponsiblefortheoverallcorporategovernanceoftheGroup,includingitsstrategicdirection,establishinggoalsformanagementandmonitoringtheachievementofthesegoals.

TheBoardhasaformalscheduleofmattersreservedtoitselffordecision,whichincludestheoverallGroupstrategyanddirection,acquisitionanddivestmentpolicy,approvalofmajorcapitalexpenditureprojectsandsignificantfinancialmatters.ThescheduleensuresthatthegovernanceoftheGroupisinitshands.

Duties and Responsibilities of the Board

TheresponsibilitiesoftheBoardofDirectorsoftheCompanyareasfollows:-• ReviewingandadoptingastrategicplanfortheCompanywhichwillenhancethefuturegrowthoftheCompany;• OverseeingtheconductoftheCompany’sbusinesstoevaluatewhetherthebusinessisbeingproperlymanaged;• Identifyingprincipalrisksofthebusinessandensuretheimplementationofappropriatesystemstomanagethese

risks;• Successionplanning;• OverseeingthedevelopmentandimplementationofshareholdercommunicationspolicyfortheCompany;and• ReviewingtheadequacyandtheintegrityoftheCompany’sinternalcontrolsystemsandmanagementinformation

systems,includingsystemsforcompliancewithapplicablelaws,regulations,rules,directivesandguidelines.

Board Balance & Independence Of Directors

AsatthedateofthisstatementtheBoardhaseight(8)members,comprisingfour(4)Non-ExecutiveDirectorsandfour(4)ExecutiveDirectors.Three(3)oftheeight(8)DirectorsareIndependentNon-ExecutiveDirectors.AbriefprofileofeachDirectorispresentedonpages12and13ofthisAnnualReport.

ThereisacleardivisionofresponsibilitybetweentheChairmanandtheManagingDirectoroftheGroupinordertoprovide forbalanceofpowerandauthority.TheChairman is responsible forensuring theBoardeffectivenessandconductwhilsttheManagingDirectorhasanoverallresponsibilityovertheoperatingunits,organizationaleffectivenessandimplementationoftheBoard’spoliciesanddecisions.

AlltheIndependentNon-ExecutiveDirectorsareindependentofManagementandarefreefromanybusinessorotherrelationshipthatcouldmaterially interferewiththeexerciseof their independent judgment.TheyhavethecalibretoensurethatthestrategiesproposedbytheManagementarefullydeliberatedandexaminedinthelong-terminterestoftheGroup,aswellasshareholders,employeesandcustomers.

OneoftherecommendationsoftheCodestatesthatthetenureofanindependentdirectorshouldnotexceedacumulativetermof9years.However,theNominationCommitteeandtheBoardhaveupontheirannualassessment,concludedthateachofthe3IndependentNon-ExecutiveDirectors,MrKeongChoonKeat,EncikMohdKhasanBinAhmadandMrKamYongKancontinuetodemonstrateconductandbehaviourthatareessentialindicatorsofindependence,andthateachofthemcontinuestofulfillthedefinitionofindependenceassetoutintheMMLR.ThelengthoftheirserviceontheBoarddoesnotinanywayinterferewiththeirexerciseofindependentjudgementandabilitytoactinthebestinterestofCrestBuilderHoldingsBerhad.


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Directors’ Code of Conduct

TheDirectorsobserveacodeofethicsinaccordancewiththecodeofconductexpectedofDirectorsintheCompanyDirectors’CodeofEthicsestablishedbytheCompaniesCommissionofMalaysia.

Board Meetings

TheBoardordinarilymeetsatleastfour(4)timesayearatquarterlyintervalswithadditionalmeetingsconvenedwhenurgentandimportantdecisionsneedtobetakenbetweenthescheduledmeetings.Duringthefinancialyear,theBoardmetonfive(5)occasions,whereitdeliberateduponandconsideredavarietyofmattersincludingtheGroup’sfinancialresults,majorinvestmentsandstrategicdecisions,thebusinessdirectionoftheGroupandcorporategovernancematters.

DetailsoftheattendanceoftheDirectorsattheBoardMeetingsareasfollows:-

Directors Number of meetings attended

(i) TengkuDato’SulaimanShahBinTengkuAbdulJalilShah 5/5

(ii) YongSoonChow 5/5

(iii) KohHuaLan 4/5

(v) YongShangMing 5/5

(vi) KeongChoonKeat 5/5

(vii) MohdKhasanBinAhmad 5/5

(viii) KamYongKan 5/5

(ix) YongTiokKeng(AlternatetoKohHuaLan) 5/5

WhereapotentialofconflictariseintheGroup’sinvestment,projectsoranytransactionsinvolvingDirector’sinterest,suchDirectorisrequiredtodeclarehisinterestandabstainfromfurtherdiscussionandthedecisionmakingprocess.

Board Committees

Whereappropriate,mattershavebeendelegatedtoBoardCommittees,allofwhichhavewrittenconstitutionsandtermsofreferencetoassisttheBoardindischargingitsdutiesandresponsibilities.TheBoardwillthenreceivethereportsoftheirproceedingsanddeliberationsinitsscheduledBoardmeetings.

(i) Audit Committee

TheAuditCommitteewhosecompositionmeetstherevisedListingRequirementsofBursaMalaysiaSecuritiesBerhad,i.e.AllmembersareNon-ExecutiveDirectorsandatleastonememberisaqualifiedaccountant.TheprimaryobjectiveoftheAuditCommitteeistoassisttheBoardofDirectorsinfulfillingitsresponsibilitiesrelatingtoaccountingandreportingpracticesoftheGroup.TheAuditCommitteeReportissetoutonpage21.TheAuditCommitteeisempoweredtoobtainexternalprofessionaladviceandtoinviteoutsiderswithrelevantexperiencetoattenditsmeetingwhennecessary.

(ii) Nomination Committee

TheNominationCommitteehasbeenchargedwithidentifyingandrecommendingnewnomineestotheBoardaswellascommitteesoftheBoardofCrestBuilderHoldingsBerhad.However,theBoardmakesalldecisionsonappointmentsafterconsideringtherecommendationsoftheCommittee.

TheCommitteewillreviewtherequiredmixofskills,experienceandotherqualitiesincludingcorecompetencieswhichNon-ExecutiveDirectorsshouldbringtotheBoard.

STATEMENTONCORPORATEGOVERNANCE(CONT’D)

ANNUALREPORT2012

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ThemembersoftheNominationCommittee,allofwhomareIndependentNon-ExecutiveDirectorsareasfollows:-

(i)KamYongKan(Chairman)(ii)KeongChoonKeat(iii)MohdKhasanbinAhmad

Duringthefinancialyear,one(1)meetingwasheldandwasattendedbyallmembersoftheNominationCommittee.

(iii) Remuneration Committee

TheRemunerationCommitteeisresponsiblefordevelopingtheGroup’sremunerationpolicyanddeterminingtheremunerationpackagesoftheExecutiveDirectorsoftheGroup.TheRemunerationCommitteeproposes,subjecttotheapprovaloftheBoard,theremunerationandtermsandconditionsofserviceandtheremunerationtobepaidtoeachDirectorforhisservicesasamemberoftheBoardaswellasCommitteeoftheBoard.

ThemembersoftheRemunerationCommitteeareasfollows:-

(i)YongSoonChow(Chairman)(ii)KeongChoonKeat(iii)MohdKhasanbinAhmad

During the financial year, one (1)meetingwasheld andwasattendedby allmembersof theRemunerationCommittee.

(iv) Option Committee

TheOptionCommitteewasestablishedon15March2007.TheOptionCommitteewasestablishedtoadministertheGroup’sEmployeeShareOptionScheme (“ESOS”) inaccordancewith theBy-Lawsof theESOSand insuchmanneras itshalldeemfitand,withsuchpowersanddutiesasareconferredupon itbytheBoardofDirectors.

ThemembersoftheOptionCommitteeareasfollows:-(i) KeongChoonKeat(Chairman)(ii) MohdKhasanbinAhmad(iii) YongSoonChow

Duringthefinancialyear,one(1)meetingwasheldandwasattendedbyallmembersoftheOptionCommittee.

Supply of Information

AllscheduledmeetingsheldduringthefinancialyearwereprecededwithaformalagendaissuedbytheCompanySecretaryinconsultationwiththeChairmanandtheManagingDirector.TheagendaforeachmeetingwasaccompaniedbytheminutesofprecedingmeetingsoftheBoardandBoardCommittees,reportsonGroupfinancialperformance,industry trends,businessplansandproposals,quarterly resultannouncementsandother relevant information.TheBoardpapersarecomprehensiveandencompassallmaterialaspectsofthemattersbeingconsidered,enablingtheBoardtolookatbothquantitativeandqualitativefactorssothatinformeddecisionsaremade.AllDirectorshaveaccess to theadviceandservicesof theCompanySecretary.Directorsare informedandawarethattheymaytakeindependentprofessionaladvice,ifnecessaryandappropriateinfurtheranceoftheirduties,attheexpenseoftheGroup.

Appointments and Re-elections to the Board

TheNominationCommitteeisresponsibleformakingrecommendationsforanyappointmentstotheBoard.Inmakingthese recommendations, theNominationCommitteeconsiders the requiredmixofskillsandexperiencewhich theDirectorsshouldbringtotheBoard.

InaccordancewiththeCompany’sArticlesofAssociation,allDirectorswhoareappointedbytheBoardaresubjecttore-electionbyrotationbyshareholdersatthefirstopportunityaftertheirappointments.TheArticlesalsoprovidethatatleast1/3oftheremainingDirectorsbesubjecttore-electionbyrotationateachAnnualGeneralMeeting,providedthatallDirectorsincludingtheManagingDirectorshallretirefromofficeatleastonceeverythreeyearsbutshallbeeligibleforre-election.



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Directors Training

AlltheDirectorsoftheCompanyhaveattendedtheMandatoryAccreditionProgramme(MAP)prescribedbyBursaSecuritiesfordirectorsofpubliclistedcompanies.

TheBoardencouragesDirectors toparticipate inongoingeducation,aswellasparticipation inaccrediteddirectoreducationprogrammes.

Duringthefinancialyear2012,allDirectorshadattendedvarioustrainingprogrammes,conferences,seminarsandworkshopswhichtheyhaveindividuallyorcollectivelyconsideredasrelevantandusefulincontributingtotheeffectivedischargeoftheirdutiesasDirectors.TheDirectorshadattended/participatedinoneormoreofthefollowingtrainingprogrammes/conferences/seminars/workshopsin2012:-

• MalaysiaCodeofCorporateGovernance2012• ManagingTalent&SuccessionForBusinessContinuity• CorporateFinancialReportingStandards• ResponsibilitiesofIndependentDirector,AuditandRiskCommittees• TransferPricingDevelopmentinMalaysia• CorporateintegritysystemMalaysia-CEODialogue• CIDBWorkshoponGreenPassGuidelines• TheMiracleProcessOfHotDipGalvanisingandTheHonestyOfTheCorrosionProtection• NIOSHSEMINARMS1722:2011-ImprovingOccupationalSafety&HealthManagementSystemEffectiveness• GovernmentTransformationProgramme• IBSandMechanisation2012• QualityControlofConstructionMaterialsinConstructionIndustry,Malaysia[Act520(Amendment2011)]

TheDirectorsarealsokeptinformedofthevariousrequirementsandupdatesissuedbyregulatoryauthorities.

SECTION B - DIRECTORS’ REMUNERATION

TheobjectiveoftheGroup’sRemunerationPolicyistoattractandretaintheDirectorsrequiredtoleadandcontrolthegroupeffectively.Generally,theremunerationofeachDirectorreflectsthelevelofresponsibilityandcommitmentthatgoeswiththeBoardCommitteemembership.InthecaseofExecutiveDirectors,thecomponentpartsoftheremunerationarestructuredsoastolinkrewardstoindividualandtheGroupperformance.

TheRemunerationCommitteeshallrecommendtotheBoardtheframeworkoftheExecutiveDirectors’remunerationandtheremunerationpackageforeachExecutiveDirectoroftheGroup.TheRemunerationCommitteealsoreviewsandrecommendsfortheBoard’sapprovalallotherDirector’sfees.

Disclosure

TheBoardhasconsidereddisclosureofdetailsoftheremunerationofeachDirector.TheBoardisoftheviewthatthetransparencyandaccountabilityaspectsofcorporategovernanceasapplicabletoDirectors’Remunerationareappropriatelyservedbythe“banddisclosure”asrequiredbytheListingRequirements.

Theremuneration/feesreceivedbytheDirectorsfromtheGroupforthefinancialyearended31December2012asfollows:-

Executive Director Non-Executive DirectorSalary Band (Number of Directors) (Number of Directors)

Lessthan50,000 – 4200,001to250,000 2 –250,000to300,000 1 –850,000to900,000 1 –


ANNUALREPORT2012

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AggregateremunerationofDirectorsiscategorizedintoappropriatecomponents:

Salaries and/or Directors’ Other Fees Emoluments Total (RM) (RM) (RM)

ExecutiveDirectors – 1,595,462 1,595,462Non-ExecutiveDirectors 180,000 – 180,000

Total 180,000 1,595,462 1,775,462

SECTION C - SHAREHOLDERS

Dialogue between the Company and Investors

TheGroupvaluescommunicationwithitsshareholdersandinvestorsanddoesthisthroughtheAnnualReport,AnnualGeneralMeetingandCorporateAnnouncements.Allenquiriesmadearenormallydealtwithaspromptlyaspracticable.

TheCompanyalsoholdsbriefingswithresearchanalysts,fundmanagersandinvestorstoexplaintheGroup’sstrategies,performanceandmajordevelopmentsandtheBoardplanstoconductregulardialogueswithinstitutionalinvestors,fundmanagersandanalystswiththeaimoffosteringmutualunderstandingoftheGroup’sobjectives.

The Annual General Meeting

TheCompanyhasusedtheAnnualGeneralMeetingasaforumofcommunicationwithitsshareholders.TheBoardencouragesparticipation from shareholders by having a question and answer sessionduring theAnnualGeneralMeetingwherebytheDirectorsareavailabletodiscussaspectsoftheGroup’sperformanceanditsbusinessactivities.Eachitemofspecialbusinessincludedinthenoticeofthemeetingisaccompaniedbyafullexplanationoftheeffectsofaproposedresolution.SeparateresolutionsareproposedforsubstantiallyseparateissuesatthemeetingandtheChairmandeclaresthenumberofproxiesreceived,bothforandagainsteachseparateresolution,whereappropriate.

SECTION D - ACCOUNTABILITY AND AUDIT

Financial Reporting

TheBoardaimstoprovideandpresentabalancedandmeaningfulassessmentoftheGroup’sfinancialperformanceandprospectsattheendofthefinancialyear,primarilythroughtheannualfinancialstatements,quarterlyannouncementofresultstoshareholdersaswellastheChairman’sstatementintheAnnualReport.

TheDirectorsconsiderthatinpreparingthefinancialstatements,theGrouphasusedappropriateaccountingpolicies,consistentlyappliedandsupportedbyreasonableandprudentjudgmentsandestimates.AllaccountingstandardswhichtheBoardconsiderstobeapplicablehavebeencompliedwith.

TheBoardisassistedbytheAuditCommitteetooverseetheGroup’sfinancialreportingprocessesandthequalityofitsfinancialreporting.

Internal Control

TheBoardofDirectorsacknowledgesresponsibilityformaintainingasoundsystemofinternalcontrolandforreviewingitsadequacyandintegrity.Thesystemofinternalcontrolisdesignedtosafeguardtheshareholders’investmentsandtheGroup’sassets,byitsnaturecanonlymanageratherthaneliminateriskoffailuretoachievebusinessobjectivesandinherentlycanonlyprovidereasonableandnotabsoluteassuranceagainstmaterialmisstatementorloss.

TheBoardofDirectorsregardriskmanagementasanintegralpartofthebusinessoperations.Duringtheyear,managersintheGroupattendedaseriesofbriefingsonriskmanagementwhichwerefacilitatedbyexternalconsultantstoraisethelevelofknowledgeofriskmanagementamongstmanagerstoenhancetheirunderstandingoftheriskswhichpotentiallyaffecttheachievementoftheirrespectiveoperatingunit’sbusinessobjectives.

InformationontheGroup’sinternalcontrolispresentedintheStatementonInternalControllaidoutonpage32topage33ofthisAnnualReport.



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Relationship with Auditors

ThroughtheAuditCommittee,theGrouphasestablishedatransparentandappropriaterelationshipwiththeGroup’sauditors,bothexternalandinternal,inseekingprofessionaladviceandensuringcompliancewiththeaccountingstandardsinMalaysia.InrelationtotheFinancialStatement,theroleoftheAuditCommitteeinrelationtotheexternalauditorsarecontainedintheAuditCommitteeReportsetoutonpage21topage24ofthisAnnualReport.

ADDITIONAL COMPLIANCE INFORMATION

InconformancewithBursaSecuritiesListingRequirements,thefollowinginformationisprovided:-

1. Utilisation of Proceeds

Duringthefinancialyearended31December2012,therewasaissuanceandplacementof11,300,000shares.TheproceedsofthesaidplacementareutilisedasworkingcapitalfortheGroup.

2. Share Buy-Back

Detailsofthesharespurchasedduringthefinancialyearended31December2012aresetoutbelow:

No. of Shares Highest Price Lowest Price TotalMonth Purchased Paid per Share Paid per Share Consideration (RM) (RM) (RM)

December 487,200 0.860 0.830 413,161.46

Total 487,200 413,161.46

Allthesharespurchasedduringthefinancialyearended31December2012wereheldastreasuryshares.Thereisnoresaleoftreasurysharesmadeduringthefinancialyear

Asat31December2012,724,500shareswereheldastreasuryshares.

3. Exercise of Options, Warrants or Convertible Securities

Duringthefinancialyearended31December2012,2,621,000optionswereexercisedinrelationtotheEmployeesShareOptionScheme.

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

TheCompanydidnotsponsoranyADRorGDRProgrammeduringfinancialyear.

5. Imposition of Sanctions/Penalties

Therewerenosanctions/penaltiesimposedontheCompanyand/oritssubsidiaries,Directorsormanagementarisingfromanysignificantbreachofrules/guidelines/legislationsbytherelevantregulatoryauthorities.

6. Non-Audit Fees

Non-audit feesamounting toRM13,650/-werepaid to theexternal auditors for the financial yearended31December2012.


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7. Profit Estimate, Forecast or Projection

TheCompanydidnotreleaseanyprofitestimate,forecastorprojectionduringthefinancialyear.

8. Profit Guarantee

TherewasnoprofitguaranteegivenbytheCompanyduringthefinancialyear.

9. Material Contracts (Recurrent Related Party Transactions)

Saveasdisclosedhereunder,therewerenomaterialcontractsenteredintobytheCompanyanditssubsidiarieswhichinvolvedDirectors’andMajorShareholders’interestsduringthefinancialyear.

Recurrent Related Party Transactions

Related Party Contracting PartyNature ofTransaction

Transacted Value for Financial Year

Ended 31.12.2012(RM)

FarimaSdnBhd(personconnectedtoTDSS)

CrestBuilderSdnBhd AwardofContract(Constructionandcompletionofbuildingwork)

9,646,878

GrandlandCorporationSdnBhd(personconnectedtoYSC&KHL)

CrestBuilderSdnBhd Officerental 18,000


3TwoSquareSdnBhd Officerental 60,000


UnitapahSdnBhd Officerental 18,000

10. Revaluation Policy

TherevaluationPolicyonlandedpropertiesoftheCompanyanditssubsidiariesisdisclosedinNote2.3.3totheFinancialStatements.

11. Variation in Results

Therewasnosignificantvariationinresults(differby10%ormore)fromanyprofitestimation/forecast/projection/unauditedresultannounced.



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STATEMENT ON RISK MANAGEMENTAND INTERNAL CONTROL

THE BOARD’S RESPONSIBILITIES

In relation to internal control, pursuant to the requirements under theMalaysianCode ofCorporateGovernancefor companies listedonBursaMalaysiaSecuritiesBerhad [“BursaMalaysia”], theBoardofDirectors (“theBoard”)acknowledgestheirresponsibilityundertheBursaMalaysiaListingRequirementsto:

• Identifyprincipalrisksandensureimplementationofappropriatecontrolmeasurestomanagetherisk.

• Review theadequacyand integrityof the internalcontrolsystemandmanagement informationsystemsandsystemsforcompliancewithapplicablelaws,regulations,rules,directivesandguidelines.

Itshouldbenotedthataninternalcontrolsystemisdesignedtomanagerisksratherthaneliminatethem,andcanprovideonlyreasonablebutnotabsoluteassuranceagainstanymaterialmisstatementorloss.

TheBoardconfirmsthatthereisanongoingriskmanagementprocessestablishedtoidentify,evaluate,andmanagesignificantriskstoeffectivelymitigatetherisksthatmayimpedetheachievementofCrestBuilderGroupofCompanies(“theGroup”)businessandcorporateobjectives.TheBoardreviewstheprocessonaregularbasistoensurepropermanagementofriskandmeasuresaretakentomitigateanyweaknessesinthecontrolenvironment.

RISK MANAGEMENT FRAMEWORK

TheenterpriseriskmanagementframeworkprevalentintheGroupwassetupin2003withtheassistanceofaprofessionalfirmofconsultants.Theformalisationoftheenterpriseriskmanagementframeworkinvolveddevelopingtheriskprofilewhereprincipalbusinessrisks,whichcouldaffecttheachievementofthestrategicbusinessobjectiveoftheGroup,aresystematicallyidentified,evaluatedandmitigated.

Ariskmanagementcommitteewasformalisedin2006.ThecommitteeisdedicatedtomeetitsobligationsandfiduciaryresponsibilitiestostakeholdersoftheGroup.Itisactivelyreviewingtheframeworktoenhancetheidentification,evaluationandcommunicationoftheoverallriskprocesstoensurecriticalrisks(presentandpotential)aremanagedsystematicallyandcommunicatedtotheBoardonatimelybasis.Thecommitteealsowouldensuretheframeworkisrelevantandadaptivetochangesinthebusinessenvironmentfromtimetotime.

INTERNAL CONTROL

Instrivingtooperateasystemof internalcontrol thatwilldrive theGrouptowards itsgoals, theBoardreliesuponbalancedmonitoringandreviewingofthesystembytheManagementCommitteeandAuditCommitteerespectively.

Audit Committee

TheAuditCommitteereceivedreportsfromtheinternalandexternalauditorsonaregularbasis.TheGrouphasanout-sourcingarrangementwithanindependentprofessionalfirminrelationtoitsinternalauditfunction.Theinternalauditfunctionadoptsarisk-basedapproachwhichfocusesontheprincipalrisksaffectingthekeybusinessprocessesoftheGroup.Periodicscheduledinternalauditvisitshavebeencarriedoutinaccordancewiththeapprovedinternalauditplan.

TheinternalauditfunctionisresponsibleforundertakingregularandsystematicreviewoftheinternalcontrolstoprovidetheAuditCommitteeandtheBoardwithsufficientassurancethatthesystemsofinternalcontrolareeffectiveinaddressingtherisksidentified.Onahalfyearlybasis,internalauditorssubmitauditreportsandplanstatusforreviewandapprovalbytheAuditCommittee.Includedinthereportsarerecommendedcorrectivemeasuresonrisksidentified,ifany,forimplementationbytheManagement.

TheexternalauditorsprovideassuranceintheformoftheirannualstatutoryauditofthefinancialstatementsoftheGroup.AnyareasforimprovementidentifiedduringthecourseofstatutoryauditbytheexternalauditorsarebroughttotheattentionoftheAuditCommitteethroughAuditReviewMemorandum,orarearticulatedatAuditCommitteemeetings.

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Management Committee

TheManagementCommitteeoverseestheday-to-dayoperationsandconductoftheGroup’sbusinesses.Scheduledmeetingsareheldatoperationalandmanagementlevelstoidentify,discussandresolvebusinessandoperationalissues.TheseincludescheduledmanagementmeetingsatGroupandindividualsubsidiarylevels,projectmanagersmeetingsandsitemeetings.MinutesofthesemeetingsandmanagementreportsareescalatedtotherelevantExecutiveDirectorsonatimelybasis.PeriodicmeetingsareheldaspartofanongoingprocesstoreviewandassesstheadequacyandeffectivenessoftheGroup’sriskmanagementandcontrolsandtoensurethatanyshortcomingsidentifiedareaddressedonatimelybasis.

Other Features of the Group’s System of Internal Control

OtherfeaturesoftheGroup’ssystemofinternalcontrolincludethefollowing:-:QualityPolicyandQualityObjectiveswhichclearlyoutlinedtheGroup’sdirection:Clearorganisationstructurewithdelineatedreportinglines:ClearlydefinedobjectivesandtermofreferenceofthevariousCommitteesestablishedbytheBoard.:FrequentvisitstothejobsitesbyExecutiveDirectorsandSeniorManagement:ProcessandproceduresinaccordancewiththerequirementsofMSISO9001:2008certification:StaffHandbookavailableforreference:ProjectBudgetandcontrols

TheBoardrecognisesthattheGroupoperatesinadynamicbusinessenvironmentandthattheGroup’sinternalcontrolsystemmustberesponsivetochangesinthebusinessenvironmentandcontinuouslyevolvestosupportitsbusinessobjectives.Thereviewofallcontrolprocedureswerecontinuouslycarriedoutthroughouttheperiodunderreviewtoensureaneffectiveandefficientsystemofinternalcontrol.TheBoardremainscommittedtowardscontinuousimprovementsandenhancementsofitssystemofinternalcontrolandwill,whennecessary,putinplaceactionplanstoensurethatthereisincreasedcertaintyoftheachievementofbusinessobjectives,thusenhancingshareholders’value.

ThisStatementismadeinaccordancewiththeresolutionoftheBoardofDirectorsdated22May2013.

STATEMENTONRISKMANAGEMENTANDINTERNALCONTROL(CONT’D)


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CORPORATE SOCIALRESPONSIBILITY

The Board of Directors of Crest Builder Holdings Berhad acknowledges the significance of Corporate SocialResponsibilities(“CSR”).

EncouragedbythesuccessoftheCSRinitiativesinthepreviousyear,theGroupcontinuestostrengthenitscommitmentinCSRthisyear.

COMMUNITY ENGAGEMENT

TheGroupcontinuetofocusandremaincommittedthroughvariousCSRinitiatives

TheGroupstepsforwardandservesthecommunityinwhichitoperatesandstrivestomakepositivecontrbutiontothecommunityparticularlyinhelpingtheunderprivilegedandthelessfortunate.

TheGroupcontinuetolendssupportintermsoffinancialassistancetothefollowingcharitablebodiessuchasNationalKidneyFoundationofMalaysia,PusatPenjagaanKanak-KanakCacatTamanMegah,MalaysianDiabetesAssociationandBreastCancerWelfareAssociationMalaysia

ANNUALREPORT2012

[35]

CORPORATESOCIALRESPONSIBILITY(CONT’D)

TheGrouphavealsobeentakinginstudentsfromvariousuniversitiesandcollegestoundergopracticaltrainings.Inyear2012,studentsfromthefollowinginstitutionscompletedtheirrespectedtrainingswiththeGroup:-

- UniversitiTunkuAbdulRahman(1student)

- UniversitiTenagaNasional(6students)

- UniversitiTunHusseinOnnMalaysia(1student)

- UniversitiTeknologiMara(3students)

- UniversitiMalaya(3students)

- UniversitiPutraMalaysia(2students)

- SEGiUniversityCollege(1student)

- CurtinUniversity,Sarawak(1student)

- SunwayUniversity(1student)

- NottinghamUniversity(2students)

- UniversityCollegeLondon(1student)

- UniversityPertahananNasionalMalaysia(5students)

- KolejKemahiranTinggiMARA(1student)

- TunkuAbdulRahmanCollege(3students)

- PoliteknikSultanAzlanShah,Behrang(2students)

- PoliteknikUngkuOmar,Ipoh(1student)

- NationalYouthSkillTrainingInstitutKinarut,Sabah(1student)

WORKPLACE DEVELOPMENT

TheGrouprecognisestheimportanceofequippingitsmanagementandstaffwiththerightskillsandknowledgeinordertoperformtheirdutiesprofessionally.TheGroupcontinuedtoprovideemployeeswiththenecessarytraininganddevelopmentbyattendingseminar,coursesofferedbyprofessionalbodiesincludingsubjectsinConstructionTechology,ConstructionManagement,FinanceandAccounting,Management,andMarketing.

TheGroupcontinuetomaintainasafeandhealthyworkingenvironmentforallemployeesandworkersthroughvariousmeasures.TheConstructiondivisionhasrecentlyobtainedtheEnvironmental,Safety&HealthManagementSystemsMSISO14001:2004,BSOHSAS18001:2007andMS1722:Part1:2005Certifications

ENVIRONMENTAL SUSTAINABILITY

Asaconstructionplayerinthecountry,theGroup’sactivitiesareoftenbesubjectedtoadverseenvironmentalimpact.TheGroupismindfulofthedirectimpactourbusinesseshaveonenvironment.Variousenvironmentalbestpracticesandpreservationinitiativesarecontinuallybeingintroducedandcarriedoutatourprojectsites.Throughtheadoptionofinternationallyrecognizedconstructionmethodologyandpractices,theGroupcontinuestooperateinaresponsiblemannerbyoptimizingourresourcesandreducingthegenerationofwaste.


[36]

STATEMENT ONDIRECTORS’ RESPONSIBILITY

As requiredunder theCompaniesAct, 1965 (“Act”), theDirectorsofCrestBuilderHoldingsBerhadhavemadeastatementexpressinganopiniononthefinancialstatements.TheBoardisoftheopinionthatthefinancialstatementshavebeendrawnupinaccordancewithapplicableapprovedaccountingstandardsinMalaysiasoastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyforthefinancialyearended31December2012.

Intheprocessofpreparingthesefinancialstatements,theDirectorshavereviewedtheaccountingpoliciesandpracticestoensurethattheywereconsistentlyappliedthroughouttheyear.Incaseswherejudgementandestimatesweremade,theywerebasedonreasonablenessandprudence.

Additionally,theDirectorshavereliedonthesystemofinternalcontrolstoensurethattheinformationgeneratedforthepreparationofthefinancialstatementsfromtheunderlyingaccountingrecordsisaccurateandreliable.

ThisstatementismadeinaccordancewitharesolutionoftheBoardofDirectorsdated22May2013.

FinancialStatements

• Directors’Report_38

• ConsolidatedStatementofFinancialPosition_46

• ConsolidatedStatementofComprehensiveIncome_48

• ConsolidatedStatementofChangesinEquity_49

• ConsolidatedStatementofCashFlows_50

• StatementofFinancialPosition_52

• StatementofComprehensiveIncome_53

• StatementofChangesinEquity_54

• StatementofCashFlows_55

• NotestotheFinancialStatements_57

• SupplementaryInformation_127

• StatementbyDirectors/StatutoryDeclaration_128

• IndependentAuditor’sReport_129


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ThedirectorsherebysubmittheirreporttogetherwiththeauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended31December2012.

PRINCIPAL ACTIVITIES

TheCompany is principally engaged as an investment holding company. Theprincipal activities of the subsidiarycompaniesareasdisclosedinNote6tothefinancialstatements.

Therehasbeennosignificantchangeinthenatureoftheseprincipalactivitiesduringthefinancialyear.

RESULTS

Group Company RM RM Netprofitforthefinancialyear 39,574,569 6,022,057Othercomprehensiveincome,netoftax – – Totalcomprehensiveincomeforthefinancialyear 39,574,569 6,022,057 Attributableto:- OwnersoftheCompany 39,929,590 6,022,057Non-controllinginterests (355,021) – 39,574,569 6,022,057 DIVIDENDS

Sincetheendofthepreviousfinancialyear,theCompanypaidafirstandfinaldividendof5senperordinarysharelessincometaxat25%amountingtoRM5,068,190/-inrespectoffinancialyearended31December2011on3August2012.AttheforthcomingAnnualGeneralMeeting,afirstandfinaldividendof5senperordinarysharelessincometaxat25%on137,285,950ordinaryshares(theoutstandingissuedandpaid-upsharecapitaloftheCompanywithvotingrightsasat31December2012,pendinganyconversionofwarrants,exerciseofemployeeshareoptionschemeandrepurchaseofsharesbytheCompanysubsequentto31December2012)ofRM1/-eachamountingtoRM5,148,223/-(3.75sennetperordinaryshare)inrespectofthecurrentfinancialyearended31December2012willbeproposedforshareholders’approval.Thefinancialstatementsforthecurrentfinancialyeardonotreflectthisproposeddividend.Suchdividend,ifapprovedbytheshareholders,willbeaccountedforintheshareholders’equityasanappropriationofretainedearningsinthefinancialyearending31December2013.

RESERVES AND PROVISIONS

Allmaterialtransferstoandfromreservesandprovisionsduringthefinancialyearhavebeendisclosedinthefinancialstatements.

DIRECTORS’REPORT

ANNUALREPORT2012

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DIRECTORS’REPORT(CONT’D)

BAD AND DOUBTFUL DEBTS

BeforethestatementsofcomprehensiveincomeandstatementsoffinancialpositionoftheGroupandoftheCompanyweremadeout,thedirectorstookreasonablestepstoascertainthatactionhadbeentakeninrelationtothewritingoffofbaddebtsandthemakingofallowanceforimpairmentlossesonreceivables,andhadsatisfiedthemselvesthatallknownbaddebtshadbeenwrittenoffandadequateallowancehadbeenmadeforimpairmentlossesonreceivables.

Atthedateofthisreport,thedirectorsarenotawareofanycircumstancesthatwouldrendertheamountwrittenoffforbaddebts,ortheamountoftheallowanceforimpairmentlossesonreceivables,inthefinancialstatementsoftheGroupandoftheCompanyinadequatetoanysubstantialextent.

CURRENT ASSETS

BeforethestatementsofcomprehensiveincomeandstatementsoffinancialpositionoftheGroupandoftheCompanyweremadeout,thedirectorstookreasonablestepstoensurethatanycurrentassets,otherthandebts,whichwereunlikelytoberealisedintheordinarycourseofbusiness,theirvaluesasshownintheaccountingrecordsoftheGroupandoftheCompanyhadbeenwrittendowntoanamountthattheymightbeexpectedtoberealised.

Atthedateofthisreport,thedirectorsarenotawareofanycircumstancesthatwouldrenderthevaluesattributedtothecurrentassetsinthefinancialstatementsoftheGroupandoftheCompanymisleading.

VALUATION METHODS

Atthedateofthisreport,thedirectorsarenotawareofanycircumstanceshavearisenwhichrenderadherencetotheexistingmethodsofvaluationofassetsorliabilitiesoftheGroupandoftheCompanymisleadingorinappropriate.

CONTINGENT AND OTHER LIABILITIES

Atthedateofthisreport,theredoesnotexist:-

(i) anychargeontheassetsoftheGroupandoftheCompanythathasarisensincetheendofthefinancialyearwhichsecurestheliabilitiesofanyotherperson,or

(ii) anycontingentliabilitiesinrespectoftheGroupandoftheCompanythathasarisensincetheendofthefinancialyear.

Intheopinionofthedirectors,nocontingentliabilitiesorotherliabilitiesoftheGroupandoftheCompanyhasbecomeenforceable,orislikelytobecomeenforceablewithintheperiodoftwelvemonthsaftertheendofthefinancialyearwhich,willormaysubstantiallyaffecttheabilityoftheGroupandoftheCompanytomeettheirobligationsasandwhentheyfalldueotherthanasdisclosedinNote36tothefinancialstatements.

CHANGE OF CIRCUMSTANCES

Atthedateofthisreport,thedirectorsarenotawareofanycircumstances,nototherwisedealtwithinthisreportorthefinancialstatementsoftheGroupandoftheCompanythatwouldrenderanyamountstatedinthefinancialstatementsmisleading.


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ITEMS OF AN UNUSUAL NATURE

TheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearwerenot,intheopinionofthedirectors,substantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnature.

Noitem,transactionoreventofamaterialandunusualnaturehasarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportwhichislikelytoaffectsubstantiallytheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearinwhichthisreportismade.

ISSUE OF SHARES AND DEBENTURES

During the financial year, the issuedandpaid-upordinary sharecapital of theCompanyhasbeen increased fromRM124,089,450/-toRM138,010,450/-bywayoftheallotmentsasfollowing:-

a) 2,621,000newordinarysharesofRM1/-eachforcashpursuanttotheEmployees’ShareOptionScheme(“ESOS”)oftheCompanyatanexercisepriceofRM1/-pershare;and

b) 11,300,000newordinarysharesofRM1/-eachforcashpursuantfortheprivateplacementexerciseatapriceofRM1/-pershare.

ThenewsharesissuedrankparipassuinallrespectswiththethenexistingordinarysharesoftheCompany.

TheCompanydidnotissueanydebenturesduringthefinancialyear.

WARRANTS 2003/2013

On25February2003,theCompanyissuedarenounceablerightsissueof24,000,000warrantswhichentitledshareholdersatanissuepriceofRM0.30perwarrant,onthebasisof1.008Warrants2003/2013foreveryfour(4)existingsharesheldontheentitlementdate.

NoWarrants2003/2013wereconvertedduringthefinancialyear.

Asat31December2012,thetotalnumberofwarrantswhichremainunconvertedamountedto23,999,050units.

DetailsoftheWarrants2003/2013aredisclosedinNote21(a)tothefinancialstatements.

WARRANTS 2012/2015 (“WARRANTS B”)

On18October2012,theCompanyissuedabonusissueof41,331,912warrantswhichentitledshareholdersonthebasisofthree(3)WarrantsBforeveryten(10)existingsharesheldontheentitlementdate.

NoWarrantsBwereconvertedduringthefinancialyear.

Asat31December2012,thetotalnumberofWarrantsBwhichremainsunconvertedamountedto41,331,912units.

DetailsoftheWarrantsBaredisclosedinNote21(b)tothefinancialstatements.

DIRECTORS’REPORT(CONT’D)

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