Minutes of the 24th Annual General Meeting

DIRECTORS’ FEES FOR THE FINANCIAL YEAR ENDED 31 MARCH 2025

Shareholder

Shareholder

PAYMENT OF DIRECTORS’ BENEFITS

Shareholder

Shareholder

RE-ELECTION OF DATUK OH CHONG PENG AS DIRECTOR

Shareholder

Shareholder

RE-ELECTION OF DATO’ LEE CHUN FAI AS DIRECTOR

Shareholder

Shareholder

RE-APPOINTMENT OF MESSRS BAKER TILLY MONTEIRO HENG PLT AS AUDITORS OF THE COMPANY

Shareholder

Shareholder

PROPOSED CONTINUATION OF DATUK IR. HAMZAH BIN HASAN IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTOR

Shareholder

Shareholder

Shareholder

Shareholder

AUTHORITY TO ALLOT SHARES

Shareholder

Shareholder

PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE (“PROPOSED SHAREHOLDERS’ MANDATE FOR RRPT”)

Shareholder

Shareholder

1. Referring to the Annual Report, over the five-year period from 2021 to 2025, WCE Holdings Berhad (“the Company”) recorded a profit only in the year 2023. Despite this, it has accumulated losses amounting to RM771 million. As of the latest reporting period, the Company also carried loans and borrowings totaling RM4.3 billion. Given these financial challenges, it is hoped that the Company will take immediate and effective measures to mitigate further losses. It is worth noting that, beginning in 2023, there was a surge in investor interest with significant share purchases. However, the share price has since declined and currently stands at only RM0.70.
2. Referring to page 185 of the Annual Report: Could the Company provide further clarification or context about the tax penalty status?
3. Referring to pages 228 and 229 of the Annual Report: In the list of properties, particularly items numbered 2 to 9, the weighted property values appear unusual. Are these properties located in suboptimal or inappropriate locations?

1. The Company acknowledges the concern regarding the accumulated losses. As the business is currently in the development stage of the highway project, it is expected that it will take time before significant revenue can be realised. At this point in time, our primary focus is on completing Section 3 and Section 7, as their completion is critical to achieving continuous traffic flow across the entire corridor. This full connectivity is essential to meeting our traffic volume projections, which in turn will enable us to generate sufficient revenue to cover key operating expenses, interest payments, and fixed costs.We are encouraged by the current performance of our traffic revenue, which has shown a healthy growth trend. Furthermore, economic activities along the highway corridor continue to grow, which supports the optimistic outlook. Once full operations are achieved and traffic projections are met, we are confident in our ability to turn the business towards profitability and deliver long-term value to stakeholders.
2. With regard to the tax penalty disclosed, there are currently two ongoing tax cases. We are reasonably confident that the Company has strong grounds to resolve both cases in our favour. One of these arising during the FY2025 relates to Real Property Gains Tax (“RPGT”) in respect of the disposal of Radiant Pillar shares. For both ongoing cases, the Company has obtained professional advice from our tax consultants and lawyers, and based on their assessments, we remain confident in our position and believe that we have strong grounds to succeed. Nonetheless, we will continue to keep shareholders informed of any developments through our quarterly announcements.
3. To provide some background, these properties were inherited over 10 years ago from the Company’s previous business operations, under the former entity known as Kumpulan Europlus Berhad. Unfortunately, these properties mostly remained dormant. That said, we are continuously exploring ways to repurpose or optimise these assets to make them more commercially viable and efficient.

Albert Chu

1. It is noted that the completion date for Section 7 is now projected to be 31 December 2026. However, this represents a delay from the previously communicated target of 2025. Additionally, there appears to be a change in the intended use or public access of Section 7, with some stakeholders now indicating that it may not be made available for public use as initially planned. This has caused concern and disappointment among investors.Could the Company provide a clear explanation for the delay and any changes to the intended use or accessibility of Section 7?
2. Section 4 was completed prior to the Movement Control Order (“MCO”). Given this, can the Company confirm whether vehicles traveling from the Federal Highway will be able to access Section 5 via the completed Section 4?
3. There is a longstanding issue in Section 3, where the landowners have reportedly refused to vacate the property. This continues to hinder progress. The Company is urged to find a resolution and address this matter without further delay.

1. The Management fully agrees that Section 7 is a critical component of the highway project because it represents the missing link that connects Selangor and Perak, covering approximately 30 kilometers (“km”). It is important to understand that the development of this section has faced numerous challenges, many of which were unfortunately beyond our control.One of the key setbacks was related to alignment issues. Previously, the former Member of Parliament (“MP”) of Section 7 disagreed with the gazetted alignment and proposed to realign the Section 7 alignment to pass through Tanjong Karang town. At the outset, it is understood that a major highway cannot pass through a town area. However, due to the political situation at that time, the government allowed the former MP to submit an alternative proposal, and instructed all relevant government agencies to study such proposal.This process resulted in a delay of 4 to 5 years as we had to wait for the necessary endorsement and confirmation to proceed with our original alignment. That approval to go ahead with the original alignment was only granted in 2018.The good news is that the Company has since cleared all the major encumbrances related to Section 7 and we are now confident that we will be able to execute the works as planned, and meet the targeted completion date of 31 December 2026.
2. That is the intention, it will connect to the Federal Highway. Section 4 is a strategically important segment of the highway as it provides the critical connection to the Federal Highway. While we had initially hoped to complete Section 4 earlier, it has unfortunately experienced the most significant delays, primarily due to land acquisition issues.So, the Company has initiated discussions with the government to propose a solution specifically to enable northbound traffic access via Section 4 by leveraging partial segment of Section 3 that have already been completed and the government has been supportive of this proposal. If progress continues as expected, we are optimistic that this solution could be implemented by early next year, which would significantly improve connectivity in the meantime.
3. The situation in Section 3 has been one of the most frustrating challenges we’ve encountered, as the land acquisition falls under the jurisdiction of the State Government and in this particular case, the acquisition process is being undertaken by the Federal Government, which is the responsible authority managing the matter. Unfortunately, the Company does not have any legal authority to intervene directly in the process. However, we have been actively facilitating and pushing for a resolution over the past six months.Following increased attention from media, the State Government has issued instructions to the relevant authorities to proceed with enforcement action, including eviction if the landowner continue to refuse to vacate. Thus, it is expected that this issue will be positively resolved by the end of September.

Minority Shareholder Watch Group

(“MSWG”) –

Dr. Ismet Yusoff

1. Referring to the report concerning WCE’s RM1 billion debt instrument, the recent report highlighted two key rating drivers. One of the major concerns raised was the debt servicing liability, where the concern is the delays in project completion as well as the 5% cost overrun attributed to lower traffic volumes. While the full completion of the highway is now targeted for 2027, with all sections expected to be operational.Assuming post-FY2028 operations, what actions is the Company taking or planning to take to ensure that the overall cost of running the business continues to decrease year-on-year, in line with the efforts currently being undertaken?
2. The toll rate disparity between WCE and PLUS Highway raises some concerns. Based on available data, PLUS implemented an 18% toll rate adjustment in 2020, and currently charges approximately RM0.11 per km, whereas WCE charges RM0.16 per km. This results in a cost difference of about 48%, making PLUS the significantly cheaper option for road users. Given that the Company has expressed its strategic focus on attracting commercial vehicles, there is concern that these users may prefer to continue using the more cost-effective PLUS route.What measures is the Company taking to address this competitive disadvantage? Are there any planned incentives or promotional programmes to encourage more traffic?
3. Furthermore, the overall project cost has increased from RM6 billion to RM9 billion since 2013. While a portion of this increase is explained by various factors, it was noted that RM1 billion is now allocated for land acquisition.

Can the Company clarify why the RM1 billion land acquisition cost has only recently appeared, given that this component should have been more predictable during the initial project planning? What caused this significant increase compared to the original estimates?

1. With regard to the Company’s debt coverage and ability to cover debt, we wish to highlight that the recent loan of RM1.15 billion has been structured not only to cover the remaining construction costs, but also to account for interest expenses during the construction of the highway. This ensures that the Company’s funding requirements are fully covered from now until the highway’s full completion.While these are based on financial projections, we remain cautiously optimistic that actual performance particularly traffic volume upon opening of all sections will be in line with the expectations or at least meet interest obligations. In terms of long-term outlook, we expect the Company to be cash flow positive and to have adequate liquidity to meet all financial and operational commitments once the highway is fully operational.
2. The 2020 toll rate adjustment, including the 18% reduction for PLUS, affected the entire highway industry. However, in our case, we have not seen a significant impact on the Company traffic volumes. This is largely because two key segments of the alignment are integrated with the existing Federal Road, and these portions are toll-free.Following the 2020 adjustment, the government has capped toll rate for PLUS, whereas under our concession agreement, the Company is permitted to adjust toll rates periodically over time. As a result, the rate gap between the Company and PLUS is likely to widen further. The Company continues to engage with the relevant Government agencies on the toll rate disparity as this is also an industry wide matter to be carefully considered by the Government.
3. Under the old generation concession agreements, the land acquisition costs were to be fully responsible by the government. However, under our current concession agreement, the government introduced a cap on the amount they would cover for land acquisition. At the time, the initial estimated cost for land acquisition was approximately RM1 billion, which was aligned with the government’s budget. However, the actual land acquisition cost has since increased to RM2.3 billion. As a result, the Company is now responsible for covering the remaining RM1.3 billion.

Lim San Kim

Ho Yueh Weng

1.  Can we request Management to prepare presentation on the traffic flow projections and provide clarification on the Board’s expectations regarding traffic volume, including the figures.We would also like to know about the number of commercial vehicle users on the Company’s highways and whether projections are available. How about the expected growth if a free highway is introduced, what factors would attract users to the Federal Highway, and how the Company intends to encourage usage?
2. In addition, we have concerns regarding Section 7 not being ready, noting this as a major issue that may take several years to resolve before achieving the targeted outcomes.
3. We also wonder whether the Company’s have sufficient funds to complete all projects without requiring further loans. Therefore, please clarify on the total expenditure planned, how it will be covered, and whether there is an intention to raise additional funds from shareholders.

1. Traffic projections are typically prepared based on the overall average daily traffic (“ADT”). Upon full completion, the projected ADT is approximately 300,000. Selangor is expected to contribute about 200,000 ADT, which is roughly double the projection for Perak at 100,000 ADT. Based on the traffic flow, the projected toll revenue is in the range of RM230 million to RM260 million per year.The highway has been designed to be commercial vehicle friendly. Following the opening of Sections 1 and 2, a noticeable impact on commercial vehicle traffic has already been observed. In particular, Section 2 recorded almost 20% heavy vehicle usage out of total traffic, while other sections recorded between 10% and 12%. This proportion is higher than PLUS, which averages around 9%, and is considered a positive start as the highway directly connects the Banting industrial area to Port Klang. Travel time, which previously took approximately 1.5 hours, has now been reduced to about 45 minutes.Despite a relatively higher toll rate, the time savings provide clear value to users. Therefore, once Section 7 is completed, a further increase in commercial vehicle traffic is expected.
2. Section 7 is a critical component and confirmed that full attention is being given to its completion. A capable contractor has been appointed, and management emphasized the importance of not rushing during the surcharge period. Rushing this process could create long-term settlement issues, which would subsequently increase future maintenance costs and negatively impact the highway’s performance. So, a balanced approach is being taken to ensure the surcharge period is respected while also monitoring progress closely to avoid undue delays in execution.
3. RM1.15 billion facility is primarily allocated to cover construction costs through to completion, as well as to meet interest obligations during the construction period. With only two sections remaining — Sections 3 and 7, the level of uncertainty has been significantly reduced, enabling more accurate budgeting and financial planning. Given the project’s advanced stage, it is confidence that the available funding is sufficient to complete the construction works. As the sections are newly opened, there are currently no major maintenance issues. However, routine and periodic maintenance will become necessary after approximately five to six years of operation.

Mr Lew Tuek Wai

1. Please provide clarification on the Government-supported term loan. Noted that the total drawdown was RM2.24 billion, with repayment scheduled to start in 2021, six years after the initial drawdown. Referring to the cash flow statement, where the government loan repayments were reflected?
2. Even assuming positive toll revenue collection, last year’s statement showed a negative cash flow of RM62 million and actual interest payments of RM117 million. So, to understand whether the Company would rely on borrowings to meet interest obligations, and if no additional funds were available, what commitments existed, including potential links to loan restructuring?

1. The repayment of the Government-supported loan is back-ended, with only a nominal amount of approximately RM125,000 per quarter. Given the small size relative to overall cash flows, this repayment was considered insignificant and reflected in the cash flow statement as interest paid under financing activities.
2. The Company has considered these scenarios to ensure a positive cash flow. The current key measures include the new RM1.15 billion loan facility and continued toll revenue collection, which are expected to cover interest costs during the construction phase. Upon full completion of the highway, the Company targets toll revenue of RM300 – RM350 million per year, which is projected to be sufficient to cover interest obligations and maintain a positive cash flow position.Currently, under consideration is the restructuring of the concession. By the end of 2026, the Company plans to initiate a refinancing exercise as many of the existing loan facilities were structured to cover the construction. However, as project completion has taken longer than initially anticipated, refinancing will be necessary. Accordingly, both restructuring and refinancing measures are being planned to ensure alignment with the extended construction and operational timelines.

Albert Chu

1. Does the concession agreement allows the Company to add additional interchanges if required by the project owner, and if so, who would bear the associated costs, given that such additions would increase the overall highway project cost?
2. What is the total loan and how much for the total interest?

1. The Company is obliged to provide for an interchange if required by the project owner. In such cases, the Company would undertake both the construction and subsequent maintenance of the interchange, provided that it is profitable. The Company will also continue to explore opportunities for securing strategically located land to support such developments.
2. The original project financing comprised a Government loan of RM2.24 billion, a term loan of RM1.5 billion, and a Sukuk issuance of RM1.0 billion. With the increase in project costs, an additional loan facility of RM1.15 billion was secured, bringing the total borrowings to approximately RM5.98 billion, or about RM6.0 billion in aggregate. The annual interest obligation on these borrowings is approximately RM160 million.

Hiew Sze Chuan

Mr Pillay

1. Are there any development plans for the land along the roadside of the highway?
2. Is there any potential for planting high-value trees, similar to those along the PLUS highway?

Mr Liew Hin Choy

Have any of the Directors had personally driven through all the completed sections of the WCE highway?

Section 11 is impressive, while Sections 8, 9, and 10 appeared less dedicated. Besides, Sections 1 and 2 were in poor condition. Are these sections currently covered under defect liability from the contractor?