annual report for the financial period ended 31 december 2018 · blood donation campaign 14th...

1

Annual Report for the Financial Period Ended 31 December 2018

Management’s Perspective

3Annual Report for the Financial Period Ended 2018

Our Annual Report theme this year represents the resilience and humility of our organisation as we take stock of our achievements and learnings from 2018.

This strategic direction is guided by our intent to fulfill our Vision and Mission with wisdom and consideration of our communities’ challenges.

MCT Berhad as a corporate citizen aims to create more homes, and in turn, build lasting relationships with our communities to achieve our organisational targets.

VisionTo build the perfect sustainable community.

MissionEmbracing sustainable ecosystem ideas in our properties to make our communities healthier, safer, greener, more liveable and more prosperous.

Rationale


KEY PERFORMANCE MEASURES

Sales Status

Cybersouth

as at end of financial period ended 31 December 2018 (“FPE 2018”)

97.9%

100%

99.1%

100%

89.3%

51.8%

Casa Wood

DuplexSOFO

En-BlocTower

SOFO Studios

OfficeSuites

Serviceapartments

Sold

Sold

Sold

Sold

Sold

Sold

99.6%

Casa Bluebell

Sold

100%

Casa View

Sold100%

Casa Green

Sold

Lakefront Skypark@Cyberjaya

LF residenceT1 & T2

98.8%

14.0%

PR1MA Homes

Market Homes

Sold

Sold

93.6% 85.6%

LF residenceT3 & T4

SoldSold

89.6%

LF residences Total

Sold


KEY PERFORMANCE MEASURES

Sizable Landbank

Unbilled Sales

RM

RM

billion

million

Estimated GDV of

from ongoing and future developments

as at FPE 2018, secured revenue stream until 2020

14.2

814.0Strategic Landbank Acquisitions

RM billion

Estimated combined GDV of

First land acquisition since 2013 in prime locations within Subang Jaya and Petaling Jaya.

to be recognised over the next 5 years

1.6

422.7Future Projects

Ongoing Projects

346.0 acres

76.7 acresacres

T O T A LL A N D B A N K

GDV — Gross Development Value


TABLE OF CONTENTS

03 HIGHLIGHTS

03 Mission and Vision

04 Key Performance Measures

08 Corporate Profile

10 Corporate Information

11 Corporate Structure

12 Calendar of Events

16 Financial Highlight

18MANAGEMENT’S PERSPECTIVE

18 Chairman’s Statement

22 CEO’s Statement

28 Management Discussion & Analysis

46 LEADERSHIP

46 Board of Directors

48 Board of Directors’ Profile

58 Key Management Team

59 Key Management Team Profile

62SUSTAINABILITY

62 Sustainability Statement


TABLE OF CONTENTS

Appendix I

FINANCIAL STATEMENTS

108OTHER INFORMATION

108 List of Properties

110 Analysis of Shareholdings

112 Notice of Annual General Meeting

117 Form of Proxy

86CORPORATE GOVERNANCE

86 Corporate Governance Overview Statement

100 Additional Compliance Information

101 Statement of Directors’ Responsibilities in Respect of the Statutory Financial Statements

102 Statement on Risk Management and Internal Control

106 Audit and Risk Management Committee Report

8 Highlights

CORPORATE PROFILE

MCT Berhad (“MCT” or “Company”) is a property developer in Malaysia that constructs and develops townships in the Klang Valley conurbation.

We were established in 1999 with a paid-up capital of RM250,000. In over 18 years, we have grown to a full-service, integrated property developer with in-house capabilities including development planning, architectural and engineering design, project management and construction.


CORPORATE PROFILE (Contd.)

Our successes include Lakefront@Cyberjaya, a high-density residential development in Cyberjaya with a GDV of RM2.1 billion; and Cybersouth, our first township covering 417.0 acres in Dengkil. In February 2018, we became a subsidiary of Ayala Land, Inc (“Ayala”) after a mandatory general offer (MGO) by Ayala’s wholly owned subsidiary Regent Wise Investments Limited (“RWIL”). MCT Berhad was listed on Bursa Malaysia in 2015, and records a market capitalisation of RM1.1 billion as at FPE 2018.

Our Mission to our communities is to serve their living needs with healthier and safer properties built on sustainable ecosystem concepts. We uphold our values to be Positive, Proactive and Innovative through our core competencies. We create ecological and societal benefits with our homes.

10 Highlights

CORPORATE INFORMATION

Tan Sri Dato’ Sri Abi Musa Asa’ari Bin

Mohamed Nor

Teh Heng Chong

Apollo Bello Tanco

Tan Sri Dato’ Hj. Abd Karim Bin Shaikh Munisar

Lao Chok Keang

Bernard Vincent Olmedo Dy

Anna Maria Margarita Bautista Dy

Ma. Luisa Dioquino Chiong

BOARD OF

DIRECTORS

AUDIT AND RISK MANAGEMENT COMMITTEE

Lao Chok Keang (Chairman)

Tan Sri Dato’ Sri Abi Musa Asa’ari Bin Mohamed Nor



REMUNERATION COMMITTEE

Tan Sri Dato’ Sri Abi Musa Asa’ari Bin Mohamed Nor (Chairman)



NOMINATION COMMITTEE

Tan Sri Dato’ Hj. Abd Karim Bin Shaikh Munisar (Chairman)



COMPANY SECRETARY

Wong Youn Kim (MAICSA 7018778)

Liew Fui Li (MAICSA 7051052)

REGISTERED OFFICE

Level 2, Tower 1, Avenue 5,Bangsar South City,59200 Kuala Lumpur,Wilayah Persekutuan,MalaysiaTel No. : +603-2241 5800Fax No. : +603-2282 5022

HEAD OFFICE/PRINCIPAL PLACE OF BUSINESS

Ground Floor, MCT Tower, One City,Jalan USJ 25/1,47650 Subang Jaya,Selangor Darul Ehsan, MalaysiaTel No. : +603-5115 9988Fax No. : +603-5115 9995Website : www.mct.com.my

REGISTRAR

Boardroom Share Registrars Sdn. Bhd.Level 6, Symphony House,Pusat Dagangan Dana 1,Jalan PJU 1A/46,47301 Petaling Jaya,Selangor Darul Ehsan, MalaysiaTel No. : +603-7849 0777Fax No. : +603-7841 8151

AUDITOR

Messrs. Deloitte PLTChartered AccountantsLevel 16, Menara LGB,1, Jalan Wan Kadir,Taman Tun Dr Ismail,60000 Kuala Lumpur, Wilayah Persekutuan, Malaysia

SOLICITORS

Messrs. Rajes Hisham Rahim & Gopal6th Floor, Yee Seng Building,15, Jalan Raja Chulan,50200 Kuala Lumpur,Wilayah Persekutuan, MalaysiaTel No. : +603-2026 6606Fax No. : +603-2026 6607

Messrs. Low & LeeSuite A-05-07, Block A, Level 5,Sky Park @ One City,Jalan USJ 25/1,47650 Subang Jaya,Selangor Darul Ehsan, MalaysiaTel No. : +603-5115 0007Fax No. : +603-5115 0020

Messrs. SkrineUnit No. 50-8-1, 8th Floor, Wisma UOA Damansara, 50, Jalan Dungun, Damansara Heights, 50490 Kuala Lumpur,Wilayah Persekutuan, MalaysiaTe No. : +603-2081 3999Fax No. : +603-2094 3211

PRINCIPAL BANKERS

Malayan Banking BerhadAmbank (M) Berhad

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities Berhad

Stock Name: MCT

Stock Code: 5182

INVESTOR RELATIONS

Email: [email protected]

CORPORATE STRUCTURE

Notes:(1) 70% held by Cherish Properties Sdn. Bhd. Except as otherwise expressly stated, all companies in this structure are wholly owned by their respective holding companies.


MCT

100%

100%

Berhad

MCT Consortium

Bhd.

Hospitality

Premium Cinema S/B

Skypark Fitness S/B

Energy &Utilities

MCT Green Technology S/B

Trading House

MCT Store S/B

MCT Construction Materials S/B

PropertyDeveloper

USJ One Avenue S/B

The Place Properties S/B

Lakefront Residence S/B

Eco Green City S/B

Next Delta S/B

Cherish Properties S/B

Sky Park Properties S/B

Undersea City S/B

One Residence S/B

Subang Residency S/B

One City Development S/B

SPCJ Green Tech S/B

70%

Vista Global Development S/B (1)

Property/ProjectManagement

MCT Homes S/B

MCT Property Management S/B

MCT Properties S/B

Contractor

Modular Construction Technology S/B

12

GROOMING WORKSHOP 14th September 2018 @ Level 13A, MCT Tower

August

October

2 0

2 0

18

18

September

November

2 0

2 0

18

18

CALENDAR OF EVENTS

BLOOD DONATION CAMPAIGN14th August 2018 @ Concourse Area, Skypark One City

BADMINTON TOURNAMENT11th October 2018 @ USJ 23 Badminton Court

DEEPAVALI CELEBRATION2nd November 2018 @ HQ and sites

A delightful afternoon where 20 female staff were given a treat on grooming from a facilitator as part of our self-empowerment initiative. Beauty from within reflects the outer beauty.

Highlights

A National Blood Center donation drive, hosted by MCT, was attended by 168 donors working within the mall coming together to save lives.

Continuing on the theme of fitness and health, and to foster increased engagement amongst employees, a badminton tournament was held in October.

4 out of 20 participants were selected from our staff to join the finals for “JZA - Jaime Zobel Ayala Cup” in the Philippines.

Deepavali is never quite complete without its staple snack - the muruku. Originating from India, muruku has twisted its way into the hearts of Malaysians regardless of race.

On this festive day, the muruku was distributed among our staff, to share the festive vibe with all during the Deepavali week.

Annual Report for the Financial Period Ended 2018 13

WORLD KINDNESS DAY13th — 21st November 2018

MCT HEALTH CHECK12th November 2018 @ HQ and sites

MCT HEALTH WEEK14th November 2018 @ HQ and sites

November2 0 18 (Contd.)

As of 31 October 2018, the Department of Official Statistics listed: ‘...the per cent of deaths caused by Ischaemic heart diseases was 13.9 per cent, followed by Pneumonia (12.7%), Cerebrovascular diseases (7.1%), Transport accidents (4.6%) and Malignant neoplasm of trachea, bronchus and lung (2.3%).’

We have consistently been an advocate for the health of our employees. Other than inviting a nutritionist to give a talk on ‘Proper Dieting’, we had doctors and health practitioners from Beacon Hospital to give free health checks on our staff.

To celebrate World Kindness Day, we contacted the Community Recycle Charity (CRC) to donate daily household items and books. The NGO collected boxes of bags, shoes, soft toys, and clothes to distribute to the needy.

We believe that good health is a contributing factor to our staff’s productivity. In respect to this, events and activities were organised for the promotion of healthy living.

CALENDAR OF EVENTS (Contd.)

14 Highlights


FIRE AND SAFETY TALK16th November 2018 @ Level 13A

November2 0 18 (contd.)

As safety is our top priority, we operate our business with vigilance, and are good stewards of the environment. We would also like our employees to understand that protecting our people and environment is every employee’s responsibility. In relation to this, a speaker from Fire Prevention Service Sdn Bhd educated our staff on fire safety awareness as part of Health and Safety Week.


We support charitable or non-governmental organisations through volunteering and non-monetary donations. We visited Rumah Amal Cahaya Tengku Ampuan Rahimah in December to help provide kids a meaningful end to a year. Staff organised contests with gifts such as novels and stationery.


VISITING RUMAH AMAL CAHAYA TENGKU AMPUAN RAHIMAH31st December 2018

December2 0 18

VISITING RUMAH KEBAJIKAN ORANG TUA YU XIANG21st December 2018

The winter solstice, a traditional Chinese festival, was commemorated by visiting the old folks home with handmade glutinous rice balls, called tangyuan, to observe the festival.

The winter season symbolises renewal and the rise of the new sun, with many families coming together to rejuvenate their bonds. The dessert tangyuan itself also has its name similar in sound to the ideal of union. The old folks at the House received biscuits, rice, noodles and Milo from us.

16

FINANCIAL HIGHLIGHTSHighlights

FINANCIAL RESULTS (RM)6 MONTHS ENDED 31 DECEMBER 2018

(“FPE 2018”)12 MONTHS ENDED 30 JUNE 2018

(“FY 2018”)

Revenue 330,879,384 693,492,875

Total Expenses (57,876,027) (85,778,339)

Profit Before Tax 78,870,953 208,028,007

Profit Attributable to Equity Holders 60,472,994 148,591,696

FINANCIAL POSITION (RM) FPE 2018 FY 2018

Total Cash and Bank Balances 344,354,396 186,696,413

Total Current Assets 816,773,743 953,437,687

Total Debts 337,539,109 234,691,104

Total Current Liabilities 678,819,931 571,970,961

Total Equity 883,532,742 823,074,380

FINANCIAL RATIOS FPE 2018 FY 2018

Basic Earning per Share (sen) 4.15 10.87

Net Assets per Share (RM) 0.61 0.6

Current Ratio (times) 1.22 1.70

Net Debt-to-Equity Ratio (%) N/A 5.8%

Return on Equity (%) 6.8% 18.1%

tehsannee

Typewritten Text

0


FINANCIAL HIGHLIGHTS (Contd.)

(6,467,007) (21,920,159)(49,385,851) (61,315,054)

(2,023,169) (2,543,126)

60,4

58,3

61

FPE 2018 FY 2018

Selling and marketing expenses

Direct operating & general administrative expenses

Finance costs

NET ASSET PER SHARE (RM)

0.61

FPE 2018 FY 2018

0.61

0.60

TOTAL CASH AND BANK BALANCES (RM)

344,354,396

NET DEBT-TO-EQUITY RATIO (%)

-0.8%

5.8

344,

354,

396

186,

696,

413

TOTAL EXPENSES (RM)

(57,876,027)

(57,876,027) (85,778,339)

FPE 2018 FY 2018

FPE 2018 FY 2018 FPE 2018

148,

571,

084

FY 2018

PROFIT AFTER TAX (RM)

60,458,361

Annual Report for the Financial Period Ended 2018

tehsannee

Typewritten Text

tehsannee

Sticky Note

N/A

tehsannee

Text Box

N/A

tehsannee

Text Box

N/A



Independent Non-Executive Chairman


CHAIRMAN’S STATEMENT

“ It is my pleasure to present MCT’s Annual Report for FPE 2018. In September 2018, the Board of Directors of the Company (“Board”) approved the change in the financial year end of the Company from 30 June to 31 December to be in line with Ayala’s financial year end. Thus, the Company’s current set of financial statements will be made up from 1 July 2018 to 31 December 2018, covering a period of six (6) months. Thereafter, the twelve-month financial year end of the Company shall end on 31 December for each subsequent year. 2018 was a challenging year for the property market amidst weak consumer buying sentiments and demand-supply mismatches. Notwithstanding the economic uncertainties, we capitalised on our integrated business model and intensified our efforts to deliver on strategy. I would like to commend our Management team and all our employees for their dedication and focus in executing the strategies to achieve all of our objectives.”

CORPORATE GOVERNANCEThe Board maintains a strong leadership through sound governance and ethical business conduct. We believe in achieving responsible commercial success while balancing the interest of our stakeholders, as we fervently uphold sustainability practices in our business. Recognising the importance of maintaining good business practices as set out by the Malaysian Code of

Corporate Governance, we reinforced the Enterprise Wide Risk Management Programme where MCT’s risk mapping and strategies were identified and shared throughout the organisation. The current whistleblowing policy of our Company and all our subsidiaries (“Group”) is also being enhanced, creating a more defined structure to encourage improvements.

Management’s Perspective20

OUTLOOKThe World Bank forecasts our country growing its economy at a moderate 4.7% in 2019. The Malaysian Government is targeting the development of the B40 bracket with housing assistance measures, matching our goal of building communities through our products.These include stamp duty exemptions for properties priced between RM300,000 and RM1.0 million, a strong pull factor for us, as the bulk of our products sit between the RM250,000 and RM700,000 bracket.

We foresee these changes to be fundamentally advantageous to our business, allowing more families to attain social mobility, moving across the segments of demographics, and that it will reflect not just in their lifestyle, but also their choice of residence.

In January 2019, the unemployment rate in Malaysia improved from 3.4% in 2018 to 3.3%. Any increase in the number of paid working citizens will reflect a higher appetite for home-owning as social mobility, post-university employment and cheaper housing create a pool of interested individuals, couples and families for us to connect with.

Our landbank for ongoing and future developments remains at a healthy 422.7 acres. We are well-positioned to meet evolving customer needs as all of our landbanks are located within the conurbation of Klang Valley, which has enduring appeal for both communities and investors. From these properties, we have the advantage of having a diverse development portfolio: offering low-cost, mid-tier and premier housing, which allows us to continue to be nimble in delivering products that cater to the demands of the market.

CHAIRMAN’S STATEMENT (Contd.)

With a strong foundation in place, we are now well-positioned to continue evolving our business, capturing opportunities ahead, and at the same time, creating long-term sustainable value and enhanced returns to all our stakeholders.


CHANGES IN BOARDROOM AND SENIOR LEADERSHIPIn January 2019, our then Chief Executive Officer (“CEO”) Jose Juan Z. Jugo and Chief Financial Officer (“CFO”) Maria Rochelle S. Diaz resigned to pursue personal interests. We would like to extend our gratitude to them for their dedicated service to our Group, and we wish them the best for all of their future endeavours.

In their stead, we appointed Teh Heng Chong as our CEO and Executive Director. He is a seasoned and highly experienced professional, with over 23 years of experience in the Malaysian real estate business. His insights and experience from his successful stint in Mah Sing Group and UOA Group will be valuable as he takes on management leadership.

To support our new CEO, we have also appointed Apollo Bello Tanco as our new Chief Operating Officer (“COO”) and Executive Director, as well as Susan Jacob Secreto as our CFO. Both of them have more than 20 years of experience in property development and were previously employees of Ayala.

We would also like to welcome Ma. Luisa Dioquino Chiong to our Board as our non-Independent non-Executive Director who has more than 20 years of experience in property development with Ayala and is also the CFO of two listed companies in the Philippines.

ACKNOWLEDGEMENTSI wish to express my deep appreciation to my fellow Board members for their advice and counsel for the past year and the previous years. As your Chairman, I extend my thanks to all employees who have worked tirelessly to make our Group continuously better and more competitive. As we progress into 2019 and beyond with a new management team and renewed purpose, we are in a much stronger position to compete and thrive.With a strong foundation in place, we are now well-positioned to continue evolving our business, capturing opportunities ahead, and at the same time, creating long-term sustainable value and enhanced returns to all our stakeholders.

CHAIRMAN’S STATEMENT (Contd.)


Teh Heng Chong

Chief Executive Officer


CEO’S STATEMENT

OUR RESULTSFPE 2018 was an eventful period for MCT. We built on the momentum of FY 2018, with disciplined capital recycling, portfolio diversification and operational excellence, whilst repositioning our business for the future. We divested non-core assets, successfully completed ongoing projects, and reinvested in new landbank in strategic markets. Most important of all, we accomplished these while keeping a close eye on returns and profitability.

OperationsAgainst a backdrop of uncertainty and market volatility, we have continued to perform well. During FPE 2018, we have completed and delivered several major projects, both Casa Green and Casa View@Cybersouth, Lakefront Residence Phase 1, and Skypark@Cyberjaya, marking the completion of a total of RM1.5 billion in GDV and over 2,300 in units of development projects. As a property developer, we are delighted to see projects that we started a few years ago are now transformed into living communities.

Our aggressive moves to complete and deliver our projects resulted in us recording profit after tax of RM60.5 million for FPE 2018. Our cash and bank balances also increased to RM344.4 million from RM186.7 million during FPE 2018, up 84.4% compared to the previous period as we handed over four major projects. The increase in cash and bank balances further reduced our net debt-to-equity ratio from 5.8% to a net cash position even after taking into consideration the drawdown of the term loan to finance our acquisition of the 9.1- acre land in Subang Jaya.

In spite of the tepid property market, we managed to secure sales totaling RM296.0 million in GDV over a six-month period from our ongoing projects. This is mainly due to the result of excellent sales progress from our recent launches such as Casa Wood@Cybersouth and Market Homes@Lakefront Cyberjaya which are priced between RM400,000 and RM700,000. Unbilled sales stood at RM814.0 million at the end of FPE 2018 which leaves us on a good footing as our revenue stream for the next two financial years is already secured.

During the period, we continued to look for opportunities to streamline and strengthen our business portfolio in a cost-effective manner. We increased our landbank size with two acquisitions. Firstly, an acquisition of a 9.1-acre of prime development land in Subang Jaya, Selangor. The acquisition was closed in November 2018 at RM143.0 million and is estimated to generate a GDV of RM1.1 billion for our Group over a 5-year period. In August 2018, we initiated a second acquisition exercise for a 1.8- acre development land in Petaling Jaya, which we closed in March 2019, and will be expecting to generate a GDV of RM543.2 million for our Group.


CEO’S STATEMENT (Contd.)

Incident at the Seafield Sri Mahamariamman TempleIn November 2018, we attempted to execute the consent judgement for the transfer of the Seafield Sri Mahamariamman Temple which was issued in 2014 by the Shah Alam High Court. We were deeply saddened by the turn of events and the regrettable incident reminds us of the importance of value and respect that are required when dealing with something as important as land and religious beliefs. The temple transfer operations have always been coordinated with the local authorities and relevant agencies to ensure its proper and peaceful relocation. The arrangement from inception was positive, collaborative, and done in good faith and spirit on the part of MCT to respect the values of the Hindu community.We wish to reiterate that we are fully committed to being cooperative with the relevant authorities to finding an appropriate resolution at the earliest possible time.

OUR STRATEGY & OUTLOOKEvolution and thus, Resilience We foresee a recovery in the real estate market, on the back of moderate economic growth at 4.7% in 2019 as forecasted by The World Bank. The Malaysian population is expected to grow at 1.3% in 2019. Given the population median age at 28 years old, we anticipate a sustained growth in demand for affordable housing as the bulk of homebuyers are of the age range of 24 to 34. Leveraging on our past successes in the affordable housing segment, we believe that we are well positioned in this soft market as the bulk of our products are priced between RM250,000 to RM700,000 which caters perfectly to the market needs.

Our strategy resonates with the government initiatives to curb property speculation and encouragement of ownership for first-time homebuyers as tabled in Budget 2019. In particular, measures to lower costs of first-time ownership are: (i) six-month stamp duty exemption for completed properties priced between RM300,000 to RM1 million, starting on 1 January 2019; (ii) for properties priced up to RM500,000, stamp duty exemption of up to RM300,000 on sales and purchase agreements, as well as loan agreements for a period of two years until 31 December 2020.

With that, we are aligning our strategy to focus on two dynamic sectors of the Malaysia real estate sector: affordable to mid-tier residential market, and affordable commercial (offices, retail and leisure) market. Being active in these two sectors rather than one provides us with greater financial stability as they work to different cycles. We continue to focus on the Greater Klang Valley region with high population catchment, where transport links and public facilities are well-provided for.

We are confident with our upcoming launch pipelines from the recent land acquisitions in Subang Jaya and Petaling Jaya, coupled with our flagship projects at Lakefront@Cyberjaya and Cybersouth which will maximise our returns from our development portfolio, and deliver sustainable long-term shareholder value. Looking forward, we remain committed to acquire landbanks that will fit strategically to our portfolio to grow our financial and operational size and strength.


CEO’S STATEMENT (Contd.)

GRATITUDEIn closing, I wish to first welcome Apollo Bello Tanco, our COO, and Susan Jacob Secreto, our CFO into the MCT management team.

Secondly, I would like to thank Jose Juan Z. Jugo, my predecessor, and Maria Rochelle S. Diaz, our previous CFO for their efforts in guiding our Group. On behalf of MCT, I wish them all the best in their future endeavours.

Thirdly, my appreciation to our Board for their ever-present guidance in watching over the growth of our Group. Their overall guidance has been an integral part of our success.

Fourthly, to all our shareholders, I thank you all for your continuous belief in our resolve to bring value to your investment. Last, but certainly not least, I thank my peers, colleagues and fellow employees for all their hard work and planning, creative solutions, and uncompromising integrity to nurture our Group into where it is today. I look forward to continuing this journey with all of you to grow MCT to be amongst the nation’s top property developers.

In this uncertain and challenging environment, we have full confidence in our capacity to be resilient and remain committed to the quality of our portfolio, and to the strength of our finances. We remain optimistic for 2019 and beyond, with the continued guidance of a strategic shareholder in Ayala, a competent, experienced and multidisciplinary Board, dedicated and committed employees as well as supportive and unwavering shareholders.


MANAGEMENT DISCUSSION & ANALYSIS

This Annual Report highlights our accomplishments throughout the six-month period between 1 July 2018 and 31 December 2018 and is produced following the change in our financial year end from 30 June to 31 December, which we undertook in 2018. The next Annual Report will revert to the 12-month reporting period from January to December in 2019.

We have been busy expanding our footprint, strengthening our balance sheet, enhancing our team and delivered commendable results, despite the challenging market in 2018.

In 2019, we experienced a meaningful change in leadership, beginning with the election of three new members to our Board – Ma. Luisa D. Chiong, Teh Heng Chong and Apollo Bello Tanco. Our new Board in turn appointed a trio of new leadership – CEO Teh Heng Chong, COO Apollo Bello Tanco, and CFO Susan J. Secreto. This change in leadership provides our team with the clear mandate from shareholders to improve our Group, to break the mold in favor of potential synergistic actions.

We are in the business of creating long-term sustainable value for our communities, customers and shareholders. Success is only achieved through great people and great relationships. Our Board and our leadership team are ready to align on the key priorities to drive improved business performance.


MANAGEMENT DISCUSSION & ANALYSIS (Contd.)

Property Development

Complementary Businesses

Construction

We currently have 422.7 acres of landbank for our ongoing and future projects throughout the Klang Valley.

We are focused on delivering quality homes to the broader market segment across all our developments.

Drawing on our Management’s collective expertise and experience, we are focused on securing more landbank

at strategic areas and expand beyond our current footprint.

We undertake complementary businesses to service residents and locators at our completed developments. Such businesses currently include the leasing of office and retail space, provision of utilities and property management services as well as a fitness centre at

One City.

We adopt an integrated development philosophy centred around modular construction technology. For

any products, we are well-positioned to be flexible and agile to evolve with changing trends. We blend in-house expertise together with ideas from external consultants which will not preclude us from looking outwards to

develop better projects.

C O R E B U S I N E S S C O M P O N E N T



W H AT W E D O

W H AT W E D O

W H AT W E D O

1

2

3

Despite the challenges in the property market, we are set to deliver our commitments by taking actions to strengthen our business and competitive advantage in the long term. We are focused on expanding our footprint within the Klang Valley through strategic acquisitions and product enhancement, backed by operational excellence and efficiencies. We have started on this venture in 2018 with observed improvements throughout the organisation.

WHAT WE DOWe are a fully integrated property developer armed with capabilities to undertake every aspect of the property development value chain, from land acquisition and project development to design and construction as well as complementary businesses which services the residents and locators within our completed developments.

WHY WE DO ITOur purpose is to enrich the lives of the residents and locators in our communities and to provide the right space for businesses to thrive, the economy to grow and people to succeed.

To that end, we rely on a comprehensive strategy that also makes sure we have a coherent approach to our core business. We have decided on three facets of the business, which we identify as our core business components, the largest being property development. These components are laid out in a framework that defines our business model:


FINANCIAL REVIEWOn 25 September 2018, our Group changed the financial year end from 30 June to 31 December. The current accounting period, and this Annual Report, is for a 6-month period between 1 July 2018 and 31 December 2018.

We are pleased to report that during FPE 2018, we adopted the full framework of Malaysian Financial Reporting Standards (“MFRS”), which are effective for annual periods beginning on or after 1 January 2018.

For further details, please refer to Note 2 of the audited financial statements.


WHAT WE DID WELLFor FPE 2018, we recorded revenue of RM330.9 million, or 47.7% of the 12 months period ended 30 June 2018 (“FY 2018”), on the back of the high completion rate for our projects during FPE 2018 as we handed over 2,300 units of properties across four projects, namely Skypark@Cyberjaya, Lakefront Residence Phase 1, and Casa View and Casa Green at Cybersouth in FPE 2018. We also rode on the favourable take-up rate of 51.8% at the end of FPE 2018 for our newly launched project at Cybersouth, Casa Wood.

Our gross profit margin stood at 39.4%, up from 35.9% with savings from construction cost realised across our projects. Sales and marketing expenses stood at RM6.5 million, or 29.5% of FY 2018. Direct operating expenses for FPE 2018 was RM11.4 million, which is higher than FY 2018 by RM3.1 million as there was a provision for doubtful debts arising from our utilities business of RM4.1 million. General administrative expenses stood at RM38.0 million, or 71.6% of FY 2018.

We recorded RM60.5 million in profit after tax, with a margin of 18.3%, down from 21.4% for FY 2018 as we recognised one-off gain on disposal of RM39.4 million in FY 2018. Our Group’s effective tax rate for FPE 2018 was 23.3%, lower than the statutory tax rate of 24%, which was due to utilisation of business losses arising from certain loss-making subsidiaries. We are in the midst of a comprehensive tax review and planning exercise across our Group in efforts to further drive tax efficiency.

Our cash and bank balances increased to RM344.4 million from RM186.7 million during FPE 2018 as we handed over four projects during FPE 2018. Our Group’s total borrowings increased to RM337.5 million from RM234.7 million during FPE 2018 as we completed the RM143.0 million acquisition of the 9.1- acre land in Subang Jaya. Nevertheless, our Group’s net cash position demonstrates our ability to further leverage to support our landbanking activities.



FIRST-TIME HOMEOWNER EXPECTATIONS2019 is set to be challenging for the property development industry with the overall Malaysian economy dampened by low consumer confidence and volatility in global markets.

Budget 2019 saw the introduction of various measures that will impact the property development segment. Firstly, stamp duties for property transfers worth more than RM1.0 million will be increased from 3% to 4%. There will also be a 5% real property gains tax (“RPGT”) on individuals for disposals of properties held for more than five years as opposed to an exemption to RPGT before 1 January 2019.

However, Budget 2019 also saw the introduction of three measures to encourage home ownership, especially amongst first-time homebuyers:

• Two-year exemption on stamp duty for houses priced up to RM500,000 on the first RM300,000;

• Exemption on stamp duty for properties priced between RM300,000 and RM1.0 million, for six months starting 1 January 2019; and

• Exemption on stamp duty for sale and purchase agreements, as well as loan agreements, of up to RM300,000 for a period of two years until December 2020

The latest data from the government’s National Property Information Center (NAPIC) show that property transactions in Malaysia, although weak, has shown signs of improvement in the first half of 2018 especially in the affordability segment. Liquidity within the property development segment remains tight as stringent lending rules were enforced. As such, many buyers were either unable to obtain housing loans or did not manage to secure the required margin of finance in order to be able to purchase their desired home.

The property development segment remains the key revenue driver for our Group, contributing 96.9% of the Group’s total revenue. Amidst the challenging market conditions, we capitalised on opportunities and strategically placed our focus on the affordable market segment which remained resilient and robust in spite of the weak consumer sentiment. We remained focused on launching products priced between RM250,000 to RM700,000 per unit and on the continued disposal of existing inventories. We are also streamlining our construction sector for better productivity and improving efficiencies in our operating sectors.

We currently have 422.7 acres of landbank for our ongoing and future projects with RM14.2 billion in total GDV. In FPE 2018, we acquired a 1.8-acre land at Petaling Jaya which will contribute GDV of approximately RM543.2 million that will be recognised in the coming years as part of the project pipeline for launch. This purchase also marks our first venture into Petaling Jaya, in addition to our land parcels located out of Cyberjaya, Dengkil and Subang Jaya.

BUSINESS REVIEW

32 Management’s Perspective

BUSINESS REVIEW (Contd.)

PROPERTY DEVELOPMENT

Over the course of FPE 2018, we successfully unlocked the values of our developments by delivering more than 2,300 units with a combined GDV of over RM1.5 billion across four projects, namely Skypark@Cyberjaya, Casa Green and Casa View at Cybersouth and Towers 1 and 2 of Lakefront Residences. With the completion of these projects, we will be moving into an exciting phase with the acquisition of more landbanks and the launching of several new projects in the pipeline.

Despite the challenging market condition and mixed consumer sentiments in FPE 2018, we sold 454 units valued at RM296.0 million during FPE 2018, or 41.9% of the RM705.7 million sales recorded during FY 2018. The take-up rates for our new launches were also encouraging with 51.8% sold for Casa Wood@Cybersouth. We also launched Market Homes @ Lakefront in November 2018 and we sold 184 units valued at RM75.0 million in two months. The positive results in FPE 2018 demonstrate that even during cyclical downturns, there remain sizeable markets to be captured in resilient segments that are supported by strong underlying fundamental demand.

Our unbilled sales stood at RM814.0 million as we handed over four projects in FPE 2018. Nonetheless, our unbilled sales would be realised over the next two years, securing base revenue streams with clear earnings visibility for shareholders until 2020.




PROPERTY DEVELOPMENT (Contd.)


CYBERSOUTH@CYBERJAYA

Cybersouth is our maiden township development and is spread across 417.0 acres in Dengkil and a mere 6.0km south of Cyberjaya.

At the heart of the integrated township is a 25.0-acre central park and surrounded by beautiful homes with affordable prices and spacious built-up areas. It is suitable for families who are looking for properties with more space and lush greenery.

The development is well connected to major highways such as the Maju Expressway (MEX), SILK Highway, ELITE, KLIA Expressway, South Klang Valley Expressway (SKVE), LDP and the Putrajaya-Cyberjaya Expressway. It is also serviced by the Express Rail Link (ERL) and the future MRT Line 2.


L A U N C H Y E A R

2015

N O . O F U N I T S

418

T Y P E

Double-Storey Link Houses

G D V

RM239.8 Million

U N I T S S O L D

100%

L A U N C H Y E A R

2015

N O . O F U N I T S

530

T Y P E


G D V

RM392.4 Million

U N I T S S O L D

100%

Casa Green which was our maiden project in Cybersouth was launched in 2015 comprising 418 units of two-storey link houses with a combined GDV of RM239.8 million. The project is 100% sold and was completed and handed over to buyers was handed over to buyers in October 2018.

Casa View was launched in 2015, comprising 530 units of two-storey link houses with a combined units GDV of RM392.4 million. The project is 100% sold off and was completed and handed over to buyers in November 2018.

Casa Green Casa View





L A U N C H Y E A R

2017

N O . O F U N I T S

264

T Y P E

Townhouses

G D V

RM136.0 Million

U N I T S S O L D

99.6%

L A U N C H Y E A R

2018

N O . O F U N I T S

251

T Y P E


G D V

RM188.5 Million

U N I T S S O L D

51.8%

Casa Bluebell was launched in May 2017 and is the third phase in Cybersouth. Comprising 264 units of townhouses with a total GDV of RM136.0 million, this phase of townhouses proved popular with buyers and is 99.6% sold at the end of FPE 2018. We expect to hand-over to buyers by the second quarter of 2020.

Casa Wood was launched in May 2018 and is the latest phase to be launched in Cybersouth. Featuring 251 units of two-storey link houses with a GDV of RM188.5 million, this phase offers modern homes designed with a tropical garden concept. The project was 51.8% sold at the end of FPE 2018.

Casa Bluebell Casa Wood





MANAGEMENT DISCUSSION & ANALYSIS (contd.)


MCT Annual Report 2019 37

MANAGEMENT DISCUSSION & ANALYSIS (contd.)






LAKEFRONT@CYBERJAYA

Lakefront@Cyberjaya, a mixed development consisting of high rise condominiums, villas, and commercial outlets spread across 60.1 acres.

Lakefront@Cyberjaya also houses a Chinese school, SJK(C) Union which is the first Chinese school in Cyberjaya. The school is currently operational and is expected to increase the population and foot traffic at Lakefront@Cyberjaya moving forward.



L A U N C H Y E A R

2013

N O . O F U N I T S

86

T Y P E

Bungalows

G D V

RM206.9 Million

U N I T S S O L D

93.6%

L A U N C H Y E A R

2017

N O . O F U N I T S

3,243

T Y P E

Condominium (7 Towers)

G D V

RM1.1 Billion

U N I T S S O L D

98.8% (PR1MA homes)

Lakefront Villa Phase 1 consists of 86 zero-lot units two to three-storey bungalows and focuses on comfortable, green and healthy living, showcasing well-landscaped spaces and recreational facilities exclusively for residents. Phase 1 of Lakefront Villa was completed in August 2017 and is 93.6% sold at the end of FPE 2018.

Lakefront Homes is a vertical development which caters to the affordable housing segment and comprise 3,243 units with a combined GDV of RM1.1 billion. Phase 1 of the Lakefront Homes development is our PR1MA Homes comprising 1,932 units of affordable homes with an average price tag of RM280,000. PR1MA Homes is targeted to be completed by 2020 and is 98.8% sold as the end of FPE 2018. We launched phase 2 of Lakefront Homes - Market Homes - in November 2018. Comprising of 1,311 units of apartments with a GDV of RM526.6 million, we have recorded commendable sales of 184 units in less than two months.

Lakefront Villa Phase 1

Lakefront Homes

L A U N C H Y E A R

2013

N O . O F U N I T S

2,424

T Y P E

Condominium (8 Towers)

G D V

RM1.4 Billion

U N I T S S O L D

Lakefront Residence comprises eight towers with a total of 2,424 units with a combined GDV of RM1.4 billion. Phase 1, comprising of two towers was launched in 2013. As at the end of FPE 2018, we have recorded sales of 93.6%, and in November 2018 have handed over Phase 1 to purchasers. Phase 2 comprising towers 3 and 4 have received positive responses from the market as seen from its conversion status of 85.6% and shall be completed by 2020. We are targeting to launch Towers 5 and 6 by the end of 2019 comprising 606 units with a combined GDV of RM348.0 million.

Lakefront Residence

T1 & T2

93.6%T3 & T4

85.6%





SKYPARK@CYBERJAYA

Standing tall in Cyberjaya with a sky bridge at the 23rd floor, Skypark@Cyberjaya is a mixed development built on a 11.1-acre freehold land, boasting six towers which include serviced apartments, offices, retail and hotel components. The entire project was fully handed over at the end of FPE 2018.




CONSTRUCTION

Our in-house construction arm shall remain as the backbone of our property development projects by servicing our Group’s requirements either through full contractor or project management arrangements. An optimised mix between in-house contractor and outsourced services are to be reviewed to keep up with the expected project pipeline with optimised capital and human resources requirements.

COMPLEMENTARY BUSINESS

We maintained our property management, fitness centre and utilities services operations to service completed developments. We are currently reviewing our operating plans for the remaining operations under the complementary business for operational efficiency and excellence.


HOW WE MANAGE OUR RISKSIdentifying risks is a continual process. We review our risk management procedure at least once a year to address and mitigate internal and external risks. We consider both external and internal risks from the business units through to Group level, and this helps ensure that we are able to deliver on our committed growth plans and maintain our competitiveness in the property development segment over the longer term.



RISKS AND IMPACTS HOW WE MANAGE OUR RISKS CHANGE IN FPE 2018

DECLINING LANDBANK SIZEGeographical spread and size of landbank is paramount to us as development or monetisation of strategic landbank via sellable projects plays a key role in our future earnings growth.

We currently have 422.7 acres of landbank for our ongoing and future projects throughout the Klang Valley with a GDV of RM14.2 billion that will sustain our project pipeline for the next 15 years

We completed a land purchase measuring combined 9.1 acres in Subang Jaya in November 2018. This is a continuation of our Group’s efforts to increase our presence in Klang Valley, and diversify our parcels away from our portfolio in Cyberjaya and Dengkil.

ECONOMIC OUTLOOK AND MARKET CONDITIONSThe Malaysian economic climate and future movements in interest rates present risks and opportunities in property and financing markets and the businesses of our customers which can impact both the delivery of our strategy and our financial performance.

The Property Development and Strategic Corporate Finance department reviews the economic environment in which we operate periodically to assess whether the changing economic outlook justifies a re-assessment of the Group’s risk appetite. We stress test and revise our business plan against downturns in outlooks to ensure our financial position is sufficiently resilient.

Malaysia recorded an upbeat economic growth in 2H 2018, averaging 4.6% over two quarters, driven mostly by manufacturing and private consumption expenditure. Construction activity grew 4.6% in Q3, but growth shrank to 2.6% in the final quarter as activity wind down for the year-end. Labour market conditions are positive with employment increasing on average 2.5% in 2H 2018. Consumer Price Index however, has fallen two consecutive quarters, 0.5% and 0.2%.

We remain mindful of potential headwinds. However, as an integrated developer with a commitment to deliver, we have the flexibility to scale our development activity up or down to respond to market conditions.

42


HOW WE MANAGE OUR RISKS (Contd.)


STRATEGIC DIRECTION (Contd.)

RISKS AND IMPACTS HOW WE MANAGE OUR RISKS CHANGE IN FPE 2018

POLITICAL AND REGULATORY OUTLOOKSignificant political events and regulatory changes brings risks principally in two areas:

(i) Investment decisions are delayed whilst businesses and customers evaluate possible outcomes

(ii) The impact of regulatory changes, especially those that directly affect real estate and construction on the case for investment of the Group.

The Group though unable to influence outcome of political and regulatory changes, the investment committee do take these uncertainties into account when making strategic investment and financing decisions. Internally we review and monitor proposals, policies and regulation to ensure compliance. We also engage subject matter experts to ensure we are briefed on the impacts of any regulatory changes.

Budget 2019 has several measures that is projected to have an impact on the real estate market, especially as they are targeted to increase home ownership for the M40 and B40 group of potential home buyers.

In addition to the measures mentioned above, the government has signaled a move to regulate rent and prices for low cost housing. Of which we estimate to a mixed to positive impact on the rental market and subsequently buying sentiments of the bottom 40% of household income group.

However, we are also taking into account the countervailing fiscal measures that could spur buying activity in both middle 40% household income group and B40 group. The government has allocated nearly RM1.5 billion for afforadable home programmes such as PR (Program Perumahan rakyat), PPAM (Perumahan Penjawat Awam Malaysia), PR1MA (Skim Perumahan Rakyat 1Malaysia) and SPNB (Syarikat Perumahan Nasional Bhd).


STRATEGIC DIRECTIONWhilst the property market has been stronger in the past, we are confident that stronger days lies ahead for the industry. 2019 will be a year of addressing weak market sentiment and supply overhang by leveraging on growth in our existing townships, and creating new townships to expand our footprint.

We intend to improve our products, realign market strategies, and optimise supply chain management in construction. We are cautiously optimistic that these calibrations will contribute to our resilient positioning in the property market, and we are confident the existing plans will turn 2019 into a year of growth.

RECENT ACQUISITIONS AND DISPOSALSDuring FPE 2018, we completed the purchase of the 9.1-acre development land in Subang Jaya. We also completed the acquisition of the 1.8-acre residential land in Petaling Jaya in March 2019. Both acquisitions are expected to contribute an aggregate of RM1.6 billion in GDV for our Group in the next five years. We are also excited to explore further strategic acquisitions to augment our engines.

We have also sold off parcels of land in locations that do not meet our criteria of growth potential, and recycled capital unlocked through these divestments into growing our land banks in areas that are aligned with our strategic focus, as well as into our property development arm which is where our strength lies.

2019: OUR LAUNCHESWe are expecting several key launches at our Cybersouth township and Lakefront @ Cyberjaya project, where there exists a thriving and growing community since the launch of these projects back in 2015. Our focus will remain at residential properties that are priced between RM250,000 and RM700,000, with some commercial units to complement our completed projects. Our landbanking efforts in 2018 will also bear fruit in 2019 as we are targeting to launch the first phase of our newly acquired land in Subang Jaya by the fourth quarter of 2019 with an estimated GDV of RM1.1 billion.

We see 2019 as a year of balancing our portfolio. As we are anticipating the overall real estate market in Malaysia to pause for breath, we are still uncovering pockets of growth in the affordable market - both in landed residential and retail segments, as demand was somewhat stronger than expected in 2018. The supply overhang market as reported by Malaysia’s National Property Information Center (NAPIC) is concentrated in the RM500,000 and above (39%) residential segments, whereas supply in the affordable segment RM300,000 and below is well below forecasted demand. The Malaysian government’s 5-year development plan of building 653,000 affordable homes by 2020 has only seen 26% of the target achieved by end October 2018. With our experience in mixed and affordable housing development, we are well poised to the serve this segment of the market.

44



STRATEGIC DIRECTION (Contd.)

2019: OUR ORGANISATIONWe consider our people as our greatest asset. Our 524 employees are split across our headquarters at Subang Jaya and various project sites in Greater Klang Valley. The scale of our operations has allowed us to attract an expert team, and we are continuously developing our people strategy to retain and attract new talents. Nurturing talent and supporting development remains an important part of our culture.

We have a formal annual appraisal for each member of our team, and personal development plans to empower their careers with. Close to two hundred of our staff have benefitted from our people development series comprising of trainings in leadership, pitching and negotiation, quality conformance, construction management and regulatory updates in the real estate sector since July 2018.

We are also investing in technology across the business, upgrading core operational systems, and adopting new capabilities in customer-focused research and marketing. We are moving beyond the norm by using chat applications and e-portals to register, track and respond to all customer queries and comments, and are working to use these data to analyse and understand customer needs and orientation.

Our focus has always been to create sustainable, long-term shareholder value via the development of sustainable spaces for communities. The encompassing theme in recent years has been the safety and the environmental-friendliness of a development. We have long recognised the importance of a sustainable space for our communities and customers. Through guidance from our parent company as well as feedback from our customers, local community and councils, we will continue to optimise our development schemes to bring forth ecosystems that adapts well to evolving community needs and improves everyone’s wellbeing.


Anna Maria Margarita Bautista DyNon-Independent

Non-Executive Director

Lao Chok Keang Independent Non-Executive Director

Apollo Bello Tanco Executive Director and Chief Operating Officer


Independent Non-Executive Director and Chairman

Leadership46

BOARD OF DIRECTORS

Ma. Luisa Dioquino ChiongNon-Independent Non-Executive Director

Tan Sri Dato’ Hj. Abd Karim Bin Shaikh MunisarIndependent Non-Executive Director

Teh Heng ChongExecutive Director and Chief Executive Officer

Bernard Vincent Olmedo DyNon-Independent Non-Executive Director


Leadership


Independent Non-Executive Director and Chairman

N AT I O N A L I T Y

MalaysianG E N D E R

MaleA G E

69

B O A R D M E E T I N G AT T E N D A N C E

5 / 5

BOARD OF DIRECTORS’ PROFILE

Tan Sri Dato’ Sri Abi Musa Asa’ari Bin Mohamed Nor was appointed to the Board as an Independent Non-Executive Director on 1 April 2015 and was subsequently re-designated as the Chairman of the Company on 3 April 2015. He is the Chairman of the Remuneration Committee and serves as a member of the Audit and Risk Management Committee and the Nomination Committee.

Tan Sri Dato’ Sri Abi Musa Asa’ari holds a Bachelor of Economics (Hons) from University of Malaya and D.D.A from University of Birmingham, United Kingdom. He obtained a Master’s in Business Administration from University of Birmingham, United Kingdom. He also holds an Honorary Doctorate in Economic Management from Universiti Pendidikan Sultan Idris.

Tan Sri Dato’ Sri Abi Musa Asa’ari has served the Malaysian Government for 33 years in various departments including the Public Services Department, the National Bureau of Investigation, National Institute of Public Administration and Petroleum Development unit (under the Prime Minister’s Department), the Ministry of Finance and the Ministry of Agriculture. He joined Lembaga Tabung Haji as Chairman in 2007, serving the organisation until 2013. He had also served as Chairman in the Board of Directors of Universiti Pendidikan Sultan Idris.

Tan Sri Dato’ Sri Abi Musa Asa’ari currently is the Chairman of Pelikan International Corporation Berhad and Chairman of Heitech Padu Bhd listed on the Main Market of Bursa Malaysia.

Notes:

Save as disclosed above, none of the Directors have:• any family relationship with any Director and/or major shareholder of the Company;• any conflict of interest with the Company;• have any conviction for offences within the past five (5) years (other than traffic offences),

if any; and• any public sanction or penalty imposed by the relevant regulatory bodies during the

financial year.

48


Teh Heng Chong

Executive Director and Chief Executive Officer

(Appointed on 4 March 2019)



MaleA G E

48


0 / 5

BOARD OF DIRECTORS’ PROFILE (Contd.)

Mr. Teh Heng Chong was appointed to the Board as an Executive Director and the Chief Executive Officer on 4 March 2019. He graduated with a Bachelor’s in Economics from University Malaya, Kuala Lumpur in 1995.

Mr. Teh has over 23 years extensive experience in the real estate industry, and was the Marketing Director of UOA Development Berhad from February 2017 to January 2019. Prior to this, he was the Chief Marketing Officer of MCT in 2016 and the Chief Operating Officer (Marketing) of Mah Sing Group Berhad from 2009 to 2015. Prior to 2009, he held various positions in various companies.

He does not hold any other directorship in public companies and listed issuers in Malaysia.


Mr. Apollo Bello Tanco was appointed to the Board as a Non-Independent Non-Executive Director on 23 January 2019 and subsequently was re-designated as an Executive Director and the Chief Operating Officer on 4 March 2019.

Mr. Tanco graduated cum laude from Central Philippine University, Iloilo City with Bachelor of Science in Commerce, Major in Accounting in 1987. He earned his Master of Arts in Applied Business Economics from University of Asia and the Pacific in 1994. He is also a Certified Public Accountant, who passed the Philippine licensure exams in 1987.

Mr. Tanco was Head of Project and Strategic Management Group and member of the Management Committee of Avida Land Corp., a subsidiary of Ayala. He is presently serving as an Assistant Vice President of Ayala and has been with Ayala for twenty-four (24) years assigned in the residential group. Prior to this, he was the Project Development Manager involved in the master planning of Nuvali as well as other major land development projects of Ayala.

He is currently serving as a director of the Group and is also a director of MCT Consortium Bhd., a non-listed public company. Save for the above, he does not hold any other directorship in public companies and listed issuers in Malaysia.

Apollo Bello TancoExecutive Director and Chief Operating Officer


FilipinoG E N D E R

MaleA G E

52


0 / 5(Appointed on 23 January 2019)

Notes:



financial year.

Leadership50



Tan Sri Dato’ Hj. Abdul Karim Bin Shaikh Munisar, PSM, DSSA, SSA, KMN, ASA, was appointed to the Board as an Independent Non-Executive Director on 22 December 2015. He was later re-designated as the Chairman of the Nomination Committee on 24 February 2017. He also served as a member of the Audit and Risk Management Committee and the Remuneration Committee.

Tan Sri Dato’ Hj. Abd Karim holds a Master in Business Administration (Business Finance) from University of Edinburgh, Advanced Diploma in Economic Development (with Distinction) from University of Manchester, United Kingdom and Bachelor of Economics (Hons) from University of Malaya. He also attended an Advance Course in Urban Planning JICA at Tokyo, Japan.


Independent Non-Executive Director



MaleA G E

68

In 1974, Tan Sri Dato’ Hj. Abd Karim was the Assistant Director at the Ministry of Finance, Malaysia. Between 1975-1980, he held different positions in various districts in the state of Perak as Assistant District Officer, Kinta; Chairman of Kinta District Council; Assistant District Officer 1, Kampar; Chairman of Kampar/Gopeng Municipal Council and also Assistant State Secretary of Perak (UPEN).

Tan Sri Dato’ Hj. Abd Karim was the Chief Assistant District Officer 1 (Land) of Kuantan District Office and Chief Assistant State Secretary of Pahang (Housing Division) in 1980; Deputy Director of Klang Valley Planning Secretariat, Prime Minister Department in 1982; Chief Assistant State Secretary of Selangor (Local Authority Division) in 1987.

Tan Sri Dato’ Hj. Abd Karim also served as the President of Ampang Jaya Municipal Council from 1992 to 1996. He had an outstanding career in the government sector and was the President of Petaling Jaya Municipal Council in 2003 and 2004. Prior to that, he was the District Officer cum Acting President of Sepang District Council from 1998-2003. In 2005, he agreed to join the corporate sector and was appointed as President of Kumpulan Darul Ehsan Berhad. Tan Sri Dato’ Hj. Abd Karim was previously the Executive Chairman of various companies listed in Bursa Malaysia such as Kumpulan Perangsang Selangor Berhad, Kumpulan Hartanah Selangor Berhad and Chairman of Taliworks Corporation Berhad from 2004 to 2011.

He was also Chairman of various other companies namely Konsortium Abass Sdn Bhd, Titisan Modal Sdn Bhd, Central Spectrum Sdn Bhd, Cekal Tulin Development Sdn Bhd, JAKS-KDEB Consortium Sdn Bhd, Hydrovest Sdn Bhd and Perangsang Hotel & Properties Sdn Bhd. In addition, Tan Sri Dato’ Hj. Abd Karim was also member of the Board of Directors for Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Syarikat Pengeluaran Air Selangor Holdings Berhad (Splash), Cyberview Sdn Bhd and Alam Flora Sdn Bhd.

Save for the above, he does not hold any other directorship in public companies and listed issuers in Malaysia.


5 / 5


Notes:



financial year.

Lao Chok KeangIndependent Non-Executive Director



MaleA G E

62


5 / 5

Mr. Lao Chok Keang was appointed as an Independent Non-Executive Director on 24 February 2017 and was subsequently appointed as the Chairman of the Audit and Risk Management Committee.

He started his career in a public accounting firm and is a member of the Malaysian Institute of Accountants.

He has held several senior management positions in large property development companies which include being the Chief Operating Officer of Saujana Triangle Sdn. Bhd., the developer for the 800-acre township development known as Damansara Perdana in Petaling Jaya, Selangor. He was also the Director of Murray Riverside Pty Ltd, the developer of a 1,000-acre mixed development in Western Australia.

In 2004, he joined Setia Haruman Sdn Bhd, the Master Developer of Cyberjaya, as Director/ Chief Operating Officer and has since been responsible for the overall performance of the Company. In 2013, he assumed the position of Executive Director of Setia Haruman Sdn Bhd. He was redesignated as Director/Business Advisor in May 2016.


Leadership52



Bernard Vincent Olmedo DyNon-Independent Non-Executive Director


FilipinoG E N D E R

MaleA G E

55


4 / 5

Bernard Vincent Olmedo Dy was appointed to the Board as a Non-Independent Non-Executive Director on 3 April 2015, and is a member of the Remuneration Committee and the Nomination Committee.

He is the President and Chief Executive Officer of Ayala and also the Chairman of Prime Orion Philippines, Inc. He received his Undergraduate Degree in Business Administration from the University of Notre Dame in 1985 and earned his Master’s Degree in Business Administration and M.A. in International Relations from the University of Chicago in 1989 and 1997, respectively.

In 2015, he was inducted as member of the Advisory Council of the National Advisory Group for the Police Transformation Development of the Philippine National Police and in 2017, he was elected Vice Chairman of the Junior Golf Foundation of the Philippines.

Prior to joining Ayala in 1997, he spent 16 years outside of Philippines and held senior regional roles for multinational companies in Hong Kong and China.



Anna Maria Margarita Bautista DyNon-Independent Non-Executive Director


FilipinoG E N D E R

FemaleA G E

49


5 / 5

Ms. Anna Maria Margarita Bautista was appointed to the Board as a Non-Independent Non-Executive Director on 7 May 2015 and served as a member of the Audit and Risk Management Committee.

She is presently the Senior Vice President and member of the Management Committee of Ayala and Head of Strategic Landbank Management. Her other significant positions are: Director and Executive Vice President of Fort Bonifacio Development Corporation; Director of Cebu Holdings, Inc.; Director and President of Nuevocentro, Inc., and Alviera Country Club, Inc.; Director of Aurora Properties, Inc., Vesta Properties Holdings, Inc., CECI Realty, Inc., and Next Urban Alliance Development Corp.

Prior to joining Ayala, she was a Vice President of Benpress Holdings Corporation.

She graduated magna cum laude from Ateneo De Manila University with a Bachelor of Arts Degree under the university’s Economics Honors Program. She earned her Master’s Degree in Economics from the London School of Economics and Political Science in the United Kingdom, her MBA at the Harvard Business School in Boston, USA.

She does not hold any other directorship in public companies and listed issuers in Malaysia.

Notes:



financial year.

Leadership54



Ma. Luisa Dioquino ChiongNon-Independent Non-Executive Director


FilipinoG E N D E R

FemaleA G E

47


0 / 5

Ms. Ma Luisa Dioquino Chiong was appointed to the Board as a Non-Independent Non-Executive Director on 23 January 2019.

Ms. Chiong received her Bachelor of Science in Commerce Major in Accounting and completed the academic requirements for a Master in Business Administration degree from De La Salle University, Manila in 1991 and 1998 respectively. She is also a Certified Public Accountant, who passed the Philippine licensure exams in 1992 and is a member of the Philippine Institute of Certified Public Accountants.

Ms. Chiong is presently an Assistant Vice President of Ayala and Chief Financial Officer for two (2) of Ayala’s strategic business units. She has been working with Ayala Group since May 1999. Prior to this, Ms. Chiong served as Group CFO of all ALI-Capital, Hotels, Resorts, and Offices Group of Ayala.

She is currently serving as a director of the Group and is also a director of MCT Consortium Bhd., a non-listed public company. Save for the above, she does not hold any other directorship in public companies and listed issuers in Malaysia.

(Appointed on 23 January 2019)

56

KEY MANAGEMENT TEAM

Apollo Bello TancoExecutive Director and

Chief Operating Officer

Teh Heng ChongExecutive Director and Chief Executive Officer

Susan Jacob SecretoChief Financial Officer

Leadership

Notes:

Save as disclosed above, none of the Key Management Team have:• any family relationship with any Director and/or major shareholder of the Company;• any conflict of interest with the Company;• have any conviction for offences within the past five (5) years (other than traffic offences), if any; and• any public sanction or penalty imposed by the relevant regulatory bodies during the financial year.


Teh Heng ChongExecutive Director andChief Executive Officer



MaleA G E

48

Please refer to page 49 for Mr. Teh’s profile

Ms. Susan Jacob Secreto is a Certified Public Accountant, passing the Philippine licensure exams in 1994. She earned her Degree of Bachelor of Science in Business Administration

major in Accounting from University of the City of Manila. She was appointed as CFO of our Company on

4 March 2019.

She is an experienced manager with a demonstrated history of working in the real estate industry. Previously,

Susan was a Division Manager of Ayala and has been with Ayala’s Finance Group for 23 years. Prior to joining MCT,

she was the Chief Financial Officer and member of the management committee of Ayala Land Offices (July 2017 - February 2019), Avida Land Corp. and subsidiaries (May 2014 – June 2017) and Amaia Land Corporation (March

2011 – April 2014). Prior to March 2011, she held various positions in Ayala Group in Philippines.

She does not hold any other directorship in public companies and listed issuers in Malaysia.

Apollo Bello TancoExecutive Director and

Chief Operating Officer


FilipinoG E N D E R

MaleA G E

52

Please refer to page 50 for Mr. Tanco’s profile

Susan Jacob SecretoChief Financial Officer


FilipinoG E N D E R

FemaleA G E

47

KEY MANAGEMENT TEAM PROFILE

Corporate Governance


We are a fully integrated developer with capabilities of every aspect of the entire value chain of property development. We will create value and enrich the lives of residents and locators in our projects as well as our employees.

Sustainability

SUSTAINABILITY STATEMENT

Embracing sustainable ecosystem ideas in our properties to make our communities healthier, safer, greener and more liveable.

We aim to consistently focus and strive for excellence in Economic, Environmental and Social (“EES”) areas and continuously foster good relationships with all our stakeholders by working to exceed expectations to achieve sustainable communities.

60


SUSTAINABILITY STATEMENT (Contd.)

We are fully committed to developing sustainability plans that would transform our Group to align with Ayala’s reputation. We are leveraging on Ayala’s considerable experience as well as drawing from our inner strength in incorporating sustainable ecosystem ideas in our properties to make our communities healthier, safer, greener and more liveable.

OUR CORE VALUES Our core values are the standards and beliefs to which we adhere. These are the principles and norms that convey our attitude, unite our employees and shape our culture. PROACTIVE POSIT IVE INNOVATIVE

POSITIVE

SALES INFO MOVING-ININFO

E-PORTAL SATISFACTION &MONITORING

SEGREGATION

SEGREGATION OF DOMESTIC ...

DEPLOY WASTEWATERTREATMENT...

PROTECT DRAINAGESYSTEMS...

MONITORING...

PROACTIVE INNOVATIVE

ABOUT THIS REPORT Our Sustainability Statement exemplifies our accountability, transparency and commitment to promote sustainability practices. In this statement, we report our EES initiatives and present our responses towards minimising negative impacts and maximising positive impacts in the communities we serve and operate.

REPORTING CYCLE

Our Sustainability Statement coincides with our financial year end. Following the change of our financial year end from 30 June to 31 December which was implemented after the close of the financial year ending 30 June 2018, this report covers a period of six (6) months from 1 July 2018 to 31 December 2018. Thereafter, the financial year of our Group shall revert to twelve (12) months ending 31 December, and the sustainability report for the subsequent year will have a cycle of one (1) year.

ENGAGE WITH US

We would like to hear your feedback and comments. Please get in touch with us at [email protected].

REPORTING GUIDELINE

Bursa Malaysia Sustainability Reporting Guide.

SCOPE AND BOUNDARY

This sustainability statement covers all domestic operations of MCT, including the subsidiaries that MCT has direct control of and holds a majority stake.

REPORTING PERIOD

This report enumerates our EES activities from 1 July 2018 to 31 December 2018. Historical information from previous years were included to contextualise the information and display actionable patterns.

Sustainability62


MATERIALITY In compliance with the Bursa Malaysia framework, at the beginning of July 2018, we conducted our first materiality analysis which was based on the surveyed responses of our stakeholders, meetings with our management and mapping of our Group’s material issues. In our materiality assessment, we identified the EES issues that present risks or opportunities to our Group while addressing the most pressing issues that concern external stakeholders. There is no change in the scope of our business six months ago, and the material issues that we identified previously are a reflection of the type of business that we are today. As such, we deemed it unnecessary to revisit our materiality matrix in this report.

Identify Materiality Issues

Stakeholder Input

Draft Materiality Matrix

Review and Validate

Final Materiality Matrix

MATERIALITY ANALYSIS AND PROCESS

In determining the Group’s material concerns, we piloted our first materiality workshop through the following process:

• Created a comprehensive list and defined every positive and negative issue arising from the EES impacts of our Group’s operations.

• Categorised each issue according to the EES themes.

• Prioritised issues by selecting the most important concerns.

• Indicated the rankings and importance of each issue.

IDENTIFICATION

Our first stakeholder identification process enabled us to identify the areas of interests and the degrees of influence of the stakeholders in our business. We surveyed all stakeholder group representatives to consider their perspectives by ranking the sustainability matters according to importance.

The result of the matrix was reviewed by Management and subsequently submitted to top Management for validation and approval. The approval from our top Management indicates a clear communication of the tone from our Group’s leadership and will drive sustainability management throughout our organisation, thereby ensuring an adequate response to material sustainability matters.

The final matrix was reviewed by our Board to confirm whether the result is in line with our Group’s strategy.

REVIEW & VALIDATE

STAKEHOLDER INPUT

FINAL REVIEW



MATERIALITY (Contd.)

MATERIALITY MATRIX

The outcome of our materiality assessment of the significance of EES impacts to our Group or their influence on stakeholder assessments and decisions are illustrated below:

MED

IUM

HIG

HLO

W

MEDIUM

X: Important to MCT

Y: Im

porta

nt to

Sta

keho

lder

s

HIGH

1

2 34 5 67 8

9 1011 121314

15

16

ECONOMIC

4 Job Security

11 Inclusive Development & Accessible Pricing

12 Legal Compliance & Transparency

10 Employee Remuneration

ENVIRONMENT

1 Biodiversity

3 Water Consumption

5 Energy Efficiency

6 Eco Friendly Materials

7 Storm Control

8 Waste Management

SOCIAL

13 Great Employment Opportunity

14 Health & Social

9 Work-life Balance

15 People Development

16 Product Quality

2 Traffic & Pedestrian Mobility

The X-axis represents the EES issues relevant to our Group, and the Y-axis denotes the issues material to our stakeholders. Issues on the top right of the matrix are considered of the highest significance to our Group and stakeholders.

The sustainable aspects that are most important to our stakeholders and our Group are Product Quality, People Development, and Legal Compliance & Transparency.

The least important issues are Biodiversity and Traffic & Pedestrian Mobility. Our current project sites exert neither a potential impact nor an onsite disturbance on the natural habitats of wildlife and plant species. Our current and completed projects are not located in populated areas. As such, Traffic & Pedestrian Mobility do not warrant much of our attention at the moment but are expected to be addressed as we expand our landbank in the future with anticipated projects of varying logistical needs. Nevertheless, to develop our properties, we initiated projects with the Public–Private Partnership Unit (Unit Kerjasama Awam Swasta or UKAS) programme.

Sustainability


SUSTAINABILITY GOVERNANCEWe are committed towards achieving our sustainability Mission and Vision and being a responsible corporate entity. Our pledge for sustainability is to ensure and carry out the highest standard of sustainability management practices in our business strategies, compliance, policies, values and principles.

Our Board provides guidance and oversight to ensure that our Group is equipped with the appropriate strategies and risk processes to create sustainable value for all stakeholders. Our Management drives the operational responsibility matters and empowers the whole organisation in formulating and implementing sustainability policies across all functions in the organisations. Our Board is updated regularly about the sustainability initiatives that are adopted by our Group.

Pursuant to the MGO, our sustainability practices are being aligned towards global standards, given that Ayala is one of the highly recognised sustainable companies in the world and is listed in the Sustainability Yearbooks for 2017 and 2018. We are geared towards our parent company’s sincerity in developing communities that are sustainable.

Led by our Management team, we are dedicated and unified to the common goal of proactively enhancing the quality and awareness for safety, health and environmental practices throughout our Group. Our Health, Safety, Security and Environmental (“HSSE”) committee reports and updates our Management team and our Board in regards to sustainability issues and recommends the best practices for implementation.

Our Company’s internal control and risk management processes ensure that our shareholders’ investments and assets are safeguarded by implementing a robust and comprehensive framework.

ECONOMYCREATING ECONOMIC VALUE

The ongoing development of Cybersouth is aligned with the Government’s agenda to develop Cyberjaya, which is the core that forms a key part of the Multimedia Super corridor, along with Putrajaya, Malaysia’s seat of government.

We are leveraging a 417-acre township in Cyber South, which covers a 25-acre central park. This development presents the unique challenge of rejuvenating a brownfield - a former mining area into a green township that is fully accessible to city dwellers, a vibrant waterfront that maximises biodiversity potential, and a potential additional supply of affordable housing that alleviates the low-cost housing supply pressure.

COMPLIANCE AND TRANSPARENCY

Our Code of Ethics (COE) provides an ethical framework for all members of our Group and external stakeholders that affect our Group’s business and operations. The COE includes policies governing supplier responsibility, conflicts of interest, regulatory compliance and confidentiality. The Whistleblowing Policy is our secure and confidential channel for reporting impropriety. It incorporates matters of health and safety, anti-bribery and anti-corruption. This policy covers all employees and serves as the reporting and enforcement tool of our COE.

CYBERSOUTHCITY

C Y B E R J AYAP U T R A J AYA

K L I A

64



“We are conscientiously adding value to our

properties by developing a sustainable supply chain.”

SOCIAL: SUPPLY CHAIN MANAGEMENT

To ensure that good ethical practices and transparency are enforced and to review and oversee our bidding process, we have established the Tender Awards Committee (TAC). The TAC, which is composed of the heads of the various departments, performs checks and balances in terms of quality, supply specification, and pricing, amongst others. All purchased goods and services are then developed to provide the best value offering to our property buyers.

ENVIRONMENTAL AND SOCIAL REQUIREMENTS

Prior to their accreditation to our supply chain, contractors must comply with our Environmental, Heath and Safety (EHS) requirements. Competing brands and products are meticulously compared with particular regard to the environmental effects of these products throughout their life cycles, such as recyclability, toxicity, energy efficiency, and durability. Contracted vendors who are found to be non-compliant will be issued a non-compliance letter, fined, or blacklisted depending on the severity of the offence.

LOCAL PURCHASING

We are committed towards investing in the economy by incorporating sustainability attributes into our purchasing decisions. We assess the economic benefits by patronising local businesses, which in turn enables us to help strengthen the economy, communicate with our neighbours, and foster good relationships with the community. Our local purchasing performance has increased 55% in the six-month period ended 31 December 2018, as compared to the previous period, reflecting our continued commitment to supporting local businesses.

Our local purchasing performance is shown below:

PERIOD LOCALLY SOURCED PRODUCTS & SERVICES (RM MILLIONS)

FY 2017 105.3

FY 2018 41.2

FPE 2018 64.3

TENDER AWARDS COMMITTEE (TAC)

Our supply chain management prides itself in going beyond the customary practice of simply obtaining goods and services to supply our needs.

Sustainability


64

SOCIAL: CUSTOMERS Our key operational strategy is to execute total quality management. We are dedicated in maintaining high working standards in all aspects of our operations – from project inception to warranties against defect.

POLICY: ‘Building Excellence through Quality’

POLICY: ‘To provide our customers with best-value products and quality consumer experience’

PRODUCT QUALITY

Once again, we maintained our ISO 9001 certification in all our companies that have active construction sites and Quality Assessment System for Building Construction Works (QLASSIC) assessment for all of our development projects.

Our commitment is supported by our quality ISO 9001 certification, our QLASSIC, and our Company Quality Policy.

SERVICE QUALITY

Our service quality goes beyond sales transactions by offering after-sales service warranties against defects. We aspire to consistently provide our customers with quality service that not only satisfies their needs but hopefully exceeds their expectations.

The ISO 9001 certified companies and sites of our Group are

listed below:

• MCT Berhad

• Modular Construction Technology Sdn. Bhd.

• Sky Park Properties Sdn. Bhd.

• Lakefront Residence Sdn. Bhd.

• Eco Green City Sdn. Bhd.



SkyPark Cyberjaya HOVP Casa Green Cybersouth HOVP

Poor PoorExcellent ExcellentGood GoodSatisfactory SatisfactoryFair Fair

8%

14%

33%

28%

17%

18%

7 %

23%

31%

21%

Casaview Cybersouth HOVP Lakefront Residence HOVP

Poor PoorExcellent ExcellentGood GoodSatisfactory SatisfactoryFair Fair

26%

6%

19 %

27%

22%

8%

14%

33%

29%

16%

E- PORTAL:

We have created the E-rectification process for the immediate response and convenience of home buyers. Property owners can log a report through this platform. Updated reports are uploaded on the portal, and the rectification status is reflected so that owners can view the repair status.

SOCIAL: CUSTOMERS (Contd.)

HANDING OVER OF VACANT POSSESSION (HOVP): Owning a property and moving into a new home marks a major milestone in our buyers’ lives. For this reason, we strive to ease the purchaser’s anxiety by providing all necessary information and answering all customer queries during the HOVP.

CUSTOMER SATISFACTION SURVEY (CSS): Our Group values customer satisfaction metrics because they aid in monitoring customer health, identifying weaknesses, correcting processes, and improving customer experience. Understanding how our customers perceive our products, services, and support team is critical in planning our growth trajectory as an organisation.

During the FPE 2018, we conducted four (4) HOPV CSSs of our product and services for the completed units. The surveyed categories included product quality, design, infrastructure, landscaping, site cleanliness, after-sales services, and efficiency of joint inspection of which we obtained the following results:

Sustainability



QUALITY TRAININGS

Our paramount goal is to maximise value for customers, which is why we are consistently striving to improve employee skills by facilitating training activities.

PRODUCT TRAININGS

Our development team exerts significant effort to ensure that our properties are built with due technical diligence in accordance with not only QLASSIC and the ISO 9001 quality standards but also the required specifications.

SALES TRAININGS

We persistently sharpen the skills of our sales and marketing staff, so as to empower our employees and provide our buyers with top-notch experience. We organise monthly trainings through the “Sales Ninja” series as well as other retooling programmes and modules on legal compliance, loan servicing, and customer service.

For the financial period under review, we conducted a total of 145 hours of quality related training with 198 attendees as shown in the table below:

SUBJECT OBJECTIVES NO. OF ATTENDEES NO. OF HOURS

QUALITY TRAINING

Quality Conformance Awareness Training (QCAT)

Understand QLASSIC requirements and a proper work method as expected by our Group / Client

92 12

Quality Management System ISO9001

Awareness Training to New Joiners

Understand the basic knowledge on ISO and the system established in our Group

46 5

ISO9001:2015 Internal Auditing

To understand the philosophy, concepts and techniques of internal auditing

4 32

ISO9001:2015 Lead Auditor Training

Understand quality management definitions, concepts, guidelines and the requirements of the

ISO 9001:2015 standard

2 32

SALES TRAINING

Team Leader Training Help team leaders to develop the essential skills for influencing and motivating sales staff to achieve

exceptional performance.

4 24

Sales Staff Training Develop a positive mind-set/attitude and renew motivation to perform at a high level whilst

improving sales.

50 40

Total 198 145

68




CUSTOMER PRIVACY, LEGAL COMPLIANCE, TRANSPARENCY, AND REPUTATION

We consider legal compliance and transparency as utmost priorities in protecting our reputation. All contracts are vetted by our legal advisor. We comply with all of the regulations prescribed by the local council and the Ministry of Housing and Local Government (KPKT). We abide by the Personal Data Protection Act (PDPA) and implement measures that safeguard our customers’ privacy.

SOCIAL: EMPLOYEESWe believe that the health, happiness and well-being of our people are key factors to our success. We recognise that harnessing talent and having diverse workforce is fundamental to sustainability and competitive advantage. Investing in the development of our people is one of the core values of our Group which contributes not just to our Group’s growth but also to employee’s personal and professional advancement.

WORK-LIFE BALANCE

We stress the importance of work-life balance for our employees. In order to promote the relevance of work-life balance and care for our employees’ wellbeing, our Employee Affair Committee has enabled a series of benefits that support and contribute to their wellbeing.

MCT BADMINTON SELECTION FOR THE SPORTSFEST

To combat stress and maintain fitness, we facilitated sports activities and badminton games twice a week and provide free gym membership.

TOWNHALL MEETING

Our townhall meetings, which are conducted quarterly, are opportunities for our management and all employees to connect, collaborate and share company updates.

EMPLOYEE GATHERING

Every year, we hold our Group’s annual dinner, social gatherings and inter-department festive celebrations to foster better social ties and enhance team spirit.

Sustainability


SOCIAL: EMPLOYEES (Contd.)

PERFORMANCE REVIEW

We conduct a formal review annually with set metrics as our way of communicating with our employees with regards to their goals and expectations and the strategies that would foster their growth as well as our Group’s.

EMPOWERING OUR PEOPLE

We believe that creating a holistic development for our employees and grooming them to their full potential, will increase the overall level of competencies within our Group operations in the areas of technical, professional and general business knowledge and skills. By enriching and equipping our people with knowledge, we also fulfil our long-term goals and aspirations for stable and sustainable growth.

The table below lists the career development trainings conducted from 1 July to 31 December 2018.

SUBJECT OBJECTIVES NO. OF ATTENDEES NO. OF HOURS

Legal • Latest Regulatory Development• Strata Management

8 40

Health & Safety in Construction

Awareness, Training & Evaluation on SHASSIC. 2 16

Construction Management • Warehouse Management• Waterproofing • Aircon Management • Architecture and Design • Industry Latest Development

24 96

Accounting MFRS Implementation 59 66

Total 93 218

DIVERSITY

As a multicultural society, we understand that each culture, religion, race and individual is unique. At MCT, we practice inclusive diversity by maximising the ability of each employee and providing everyone with equal opportunities to grow and contribute to the organisational goals.

We launched a restructuring process pursuant to the MGO. This exercise was done to streamline our Group’s operations and increase productivity of our workforce. We believe that by empowering our employees with more significant tasks and responsibilities, we will help them grow in the long term.

With 12.5% of our members of the Board of Directors being female, we fall short of the 30% target as recommended by the Malaysian Code on Corporate Governance (MCCG) for all listed companies. In other measures, we too have yet to achieve sufficient gender diversity: 28% of our managers are females, while females comprise of 39% of our total workforce.

70




FY 2017 FY 2018 FPE 2018

Malay 262 236 269

Indian 39 33 33

Chinese 292 194 204

Others 20 19 18

FY 2017 FY 2018 FPE 2018

Male 370 289 316

Female 243 193 208

Total 613 482 524

ETHNIC COMPOSITION

GENDER COMPOSITION

FY 2017 FY 2018 FPE 2018

POSITION MALE FEMALE MALE FEMALE MALE R 2018 FEMALE

Board of Directors 8 1 7 1 7 1

Managers 108 50 54 34 89 36

Executives 254 194 229 158 220 171

PROJECT SITE NO. OF WORKERS

Skypark Cyberjaya 150

Lakefront Residence 523

Lakefront Homes 502

Cybersouth 521

TOTAL 1,696

AGE CATEGORY NO. OF EMPLOYEES

20 – 30 years old 161

31 – 40 years old 201

41 – 50 years old 101

51 years old and above 61

TOTAL 524

AVERAGE CONSTRUCTION WORKERS IN OUR PROJECT SITES

EMPLOYEE GENDER BREAKDOWN BY ROLE

EMPLOYEE BREAKDOWN BY AGE GROUP

20-30YEARS OLD

31-40YEARS OLD

41-50YEARS OLD

51YEARS OLD

&ABOVE

31%38%19%12%

Sustainability



COMPENSATION AND BENEFITS

We want our people to share our mutual success. MCT Berhad is committed to provide our people with total rewards schemes ensuring external competitiveness and internal fairness, based on merit and assessed individual performance, cooperation, and teamwork.

Aside from our competitive salary package and compulsory compensation mandated by the government and Malaysian Employment Act, we allocate special allowances for staff members who conduct construction site visits. We also provide group hospitalisation, medical outpatient and special treatment, dental and optical benefits as well as health screening benefits. Employees also enjoy other benefits such as free parking, marriage leaves, and parental leaves. Additional monetary benefits are granted to all employees who have worked hard to achieve their performance targets, so that they are acknowledged for their efforts and contribution to our Group.

HEALTH AND SAFETY

It is our goal to ensure all our employees return to their homes safe and unharmed. We believe that commitment to occupational safety and health is a joint responsibility between the Company and our employees in order to create a pleasant and safe working environment.

Health, Safety, Security and Environment (HSSE): The HSSE Committee reviews our Group’s performance and strategies in terms of HSSE practices. The members of this committee include the employer and employee representatives such as the MCT Management, the contractor’s management and the worker’s leader/supervisor. Our HSSE Team Committee regularly conducts health risk identification, control and assessment of various job-related activities which are vital in upholding our commitment to a safe and healthy working environment.

72




HEALTH AND SAFETY (Contd.) H&S Training: We implemented the Continuous Education Programme training for our Safety and Health Officers as well as our Site Safety Supervisors to equip them with the proper knowledge and skills on safety and health. In FPE 2018, we conducted various Safety, Health and Environment trainings for all 1,696 MCT construction workers from project Skypark Cyberjaya, Lakefront@Cyberjaya, Lakefront Homes and Cybersouth.

The team stresses the importance of the use of personal protective equipment (“PPE”) at work and continuously instil in all employees to be conscious of safety at all times. In addition, we also conduct periodic inspection related to drugs, alcohol and diseases. We do not tolerate the use of drugs and alcohol in the workplace. We value life and we aspire to impart to our employees the significance of having a healthy life.

In addition to formal and informal trainings, we conduct weekly toolbox meetings at the site which covers intensive HSSE topics and are attended by all construction site workers.

During the period under review, we reported 12 incidents at our managed sites, as per the Department of Occupational Safety and Health (DOSH) Malaysia’s requirements, an increase from the previous period. Following the Bukit Bintang City Center incident and tragedy at KL Eco City, we will continue to enhance our HSSE practices and provide renewed HSSE trainings for employees in relevant roles.

Health and Safety Indicators:

FY 2018 FPE 2018

Total Recordable Injury Frequency rate (No. of cases) 0 12

Lost Time Injury Frequency (No. of cases) 0 0

Fatal Accident rate involving staff (No. of cases) 0 0

Lost day rate 0 0

SOCIAL: COMMUNITY

SUSTAINABLE URBANISATION Forming strong relationships with the community and the regulatory authorities is critical in all of our projects. Our objective is not only to deliver projects but also create sustainable communities that will support our customers for decades.

Pedestrian Mobility: We are leveraging on our 417-acre Cybersouth township. The close proximity of Cybersouth to Cyberjaya, Putrajaya, and an international airport allows us to strategise and complement our development in conjunction with the local urbanisation masterplan. We closely collaborate with various agencies, such as the Urban Planning Centre (UPC) and the Sepang Local Government, and take advantage of the benefits in areas of connectivity and access to public transportation.

CYBERSOUTH417-ACRE

C Y B E R J AYA

K L I A

P U T R A J AYA

Sustainability


SOCIAL: COMMUNITY (Contd.)

SUSTAINABLE URBANISATION (Contd.)

Location Launch Year

Lakefront@Cyberjaya 2017

Target Completion Units Launched

2020 1,932

Sold Build Up

98.8% 850 sq.ft.

Layout Price

3 Bedrooms + 2 Bathrooms RM280,000.00 — RM285,000.00/Unit

Inclusive Development and Accessible Pricing: Aligned with the Malaysian government policy to provide low-cost housing, we have built strategically located, quality, well-designed and affordable housing supported by infrastructure, facilities and amenities. PR1MA Homes, with a target completion of 2020, has a total of 1,932 family units launched. As of 31 Dec 2018, we have achieved a sold rate of 98.8%, up 2.5% compared to the previous financial period.

Creating Employment Opportunities: Our integrated mixed development of homes, offices, retail, commercial and hotels has attracted both investors and visitors, thereby creating employment opportunities.

COMMUNITY CARE PROGRAMMES

Our community care programmes bring support, happiness, and compassion to both our employees and the recipients.

Blood Donation Campaign: In collaboration with the National Blood Centre, we conducted a blood donation campaign at Skypark One City. A total of 168 tenants of Skypark Mall registered as donors.

74



SOCIAL: COMMUNITY (Contd.)

COMMUNITY CARE PROGRAMMES (Contd.)

Visit to Old Folks Home: MCT employees brought joy to the residents of the Rumah Kebajikan Orang Tua Yi Xiang old folks home during the winter solstice festival. The HR department cooked glutinous rice balls and gifted groceries.

Visit to Orphanage: An experience filled with emotion and shared laughter was the visit to Rumah Amal Cahaya Tengku Ampuan Rahimah. Books and stationaries were donated, and a colouring contest was held. In partnership with the Community Recycle Charity (CRC), employees donated recyclable items. Clothes, shoes, bags, and other reusable items are delivered to charity homes, whereas recyclables such as paper, glass, plastic, and metal objects, are segregated at the CRC sorting location and sold to fund charitable activities of the CRC.

Sustainability


ENVIRONMENT

“We aim to attain equitable growth for our stakeholders and consequently create long-term value for everyone.”

One of the core missions of our Group is the sustainability to attain equitable growth for our stakeholders and consequently creating long-term value for everyone. We consider it our goal to maintain our Group’s ecological footprint to a minimum at all stages of business activities. Thus, we ensure the inclusion of environmental criteria when evaluating projects, products, processes, and purchases.

Consistent with our objective, we regularly evaluate our Group’s environmental measures and performance during monthly HSSE committee meetings. Our main activities, which are targeted towards maintaining a high level of corporate awareness to promote environmental sustainability, are as follows:

RISK ASSESSMENT & RISK CONTROL

Prior to commencing our projects, we conduct detailed identification and examination of any foreseeable environmental impacts. We analyse key material issues, such as flood mitigation and pollution. Our main objectives are to improve our implementation processes and avoid pitfalls during and after construction.

Green Building: We are pleased to report that two of our projects, namely, Skypark@One City and The Place@Cyberjaya, have received a Green Building Index Certification on Design Assessment. The Green Building Index is Malaysia’s industry-recognised green rating tool utilised for buildings to promote sustainability in the built environment and raise awareness amongst developers.

SUSTAINABLE LANDSCAPING

“We ensure the ecosystem balance through sustainable landscaping.”

To minimise negative environmental impacts, we apply ecologically sound landscaping at all stages of our project development programmes, including design and planning, construction, and maintenance. We analyse various environmental criteria, such as soil condition, current situation of the flora and fauna thriving in the area of interest, and alternative water resources.

76



ENVIRONMENT (Contd.)

SUSTAINABLE LANDSCAPING (Contd.)

Flora and Fauna Cohabitation: Employing the ‘right plant – right place’ method enables us to conserve resources, prevent pollution and reduce heat. We do not introduce invasive plants so as not to disrupt the ecological community. In addition, we choose species that flourish in cohabitation to limit the need for maintenance and minimise the use of fertilisers, pesticides, and water.

A Haven for Birds and Birdwatchers: Part of our 417-acre Cybersouth development is a 25-acre lake and central park. These old mining lakes have become havens for residential and migratory birds. In order not to disrupt the natural wildlife and bird migration, the lake was left undeveloped and instead enhanced to attract not only birds but also birdwatchers.

LOCATION NO. OF TREES

NO. OF SHRUBS

TURFING (SQ.M.)

Casa Green 1,256 27,330 34,650

Casa Wood 1,247 322,000 45,219

Sales Gallery 174 25,028 1,165

Cybersouth Central Park

2,500 130,032 52,126

Overall road 1,974 51,306 56,000

Greeneries in Numbers

Sustainability



ENVIRONMENTAL TRAINING AND MONITORING

We promote awareness for environmental protection amongst all of our employees by incorporating environmental education discussions during our induction activities and weekly toolbox meetings. To ensure that environmental rules and regulations are observed, the site supervisor conducts frequent inspections. Any employee who is caught contravening environmental practices will be issued a non-compliance form, and subsequent offences will result in penalties.

MATERIAL MANAGEMENT

We strictly monitor the materials that we use in our construction and operations to minimise environmental impacts. At our construction sites, we use prefabricated beams and walls, pre-sized steel, and timber products. In addition, materials are purchased in bulk to reduce packaging.

To eliminate the waste associated with formworks and scaffoldings, durable modular form systems are demounted and reused in other projects. Scaffoldings are properly maintained through regular inspections for health and safety reasons and repaired as necessary for reuse in future projects.

TRAINING SUBJECT SPECIFIC TOPICS FREQUENCY ATTENDEES

Tool box meeting Environmental Reminder Once weekly All construction workers

Induction of new workers Environmental Explanation to all new workers

First day of work All new workers

S&S Committee Environmental Discussion Once Monthly All main and subcontractors

TRAINING SUBJECT OBJECTIVES NO. OF ATTENDEES

Green 5S To gain knowledge in the principles and practices in undertaking Green 5S. 30

CIDB Green Card Training To facilitate registration and accreditation of our Construction Personnel to enhance the security level at the construction site.

40

MATERIALS USED FPE 2018

Sand 90,128

Aggregate 71,460

Steel Bars 5,323

Bulk Cement 27,959

Ordinary Portland Cement 1,981

78




WASTE MANAGEMENT

WASTES GENERATED FY 2017 (TONS) (12MONTHS)

FY 2018(TONS)

FPE 2018 (TONS)

General Waste 1,378.00 791.72 898.71

Segregation: Efficient identification and sorting of materials are important aspects of our waste management. Recyclable waste is recycled by licensed waste contractors, who provide bins specific for each type of waste. The waste contractor disposes of oil waste according to the scheduled waste regulation. In addition, our property management division coordinates closely with property owners in promoting environmental awareness and implementing recycling programmes.

Waste and Effluents: The following are the preventive and monitoring measures applied at our construction sites to avoid the flooding and damaging of downstream water bodies.

Construction Waste

Segregation of domestic sewerage from construction wastewater and surface runoff

Deploy wastewater treatment facilities on sites treating wastewater to meet regulatory conditions prior to discharging.

Protect drainage systems and discharge points to avoid blockage.

Conduct regular self-monitoring checks to ensure that the quality of the discharged effluent meets the prescribed standard.

Sustainability



WATER MANAGEMENT

At our construction sites, we optimise and use alternative water sources to reduce the dependence on clean water. A number of alternative sources used for construction activities include storm water run-off from temporary sedimentation tanks, groundwater and pond water.

CONSTRUCTION SITE

+

–

Use alternative water sources to reduce the

dependence on clean water.

Storm water

Sedimentation tanks

Storm water

Groundwater

Storm water

Pond water

Moreover, some of our built properties are installed with water-harvesting technology that traps rainwater for landscape and toilet use. In addition, water-saving devices are installed to minimise water use.

BUILTPROPERTIES

Installed with water harvesting technology

Traps rainwater

For landscape

For toilet

PERIOD FY 2017 FY 2018 FPE 2018

Total water consumption for MCT Berhad (m3)

126,156.41 71,688.41 80,803.61

80




ENERGY MANAGEMENT

Our Group is dedicated to reducing greenhouse gas footprint by implementing various energy-saving strategies and initiatives in our operations and development projects. A part of the energy management initiative that we applied is the formulation of the following guidelines:

Pre-Construction Planning: Proper and meticulous planning is conducted in the pre-construction phase, during which energy profiling is created to identify the activities that consume energy, thereby predicting the necessary allocation. A system that uses the least energy-intensive methods and materials for construction was developed to maximise energy efficiency.

Regulating Heating Networks and Air-conditioning (AC) Systems: To regulate a building’s heating and AC systems, water and power circulations are adjusted to function based on a scrupulous plan. In this way, sustainable temperatures are maintained whilst saving energy.

We have succeeded in minimising energy use by engaging in various efforts, such as activating a building automation system and fine-tuning the chiller operations. Our savings are reflected in our energy consumption for the second half of the reporting period (1 July – 31 December 2018), which presented a decrease of 18.7% from the 1 January – 30 June 2018 figure.

ENVIRONMENTAL COMPLIANCE

We are committed to strictly abide by the rules, regulations, and international standards of environmental management. During the reporting period, we did not receive any environment-related non-compliance report from the local or national government. We pledge to continue finding schemes for resource conservation to protect and serve not only our clienteles but also the communities with which we co-exist.

PERIOD FY 2017 FY 2018 FPE 2018

Energy consumption at the construction sites (kwH)

2,777,559.8 2,246,736.21 1,827,755.87


The Board acknowledges the importance and is committed to enhance by implementing good corporate governance practices at all levels within MCT Group’s daily business operations with the objective of fostering the long-term sustainability of the Group’s business and safeguarding the interests of the shareholders and other stakeholders.


The Board of Directors (“Board”) of MCT Berhad (“MCT” or “Company”) acknowledges the importance and is committed to enhance by implementing good corporate governance practices at all levels within the daily business operations of MCT group of companies (“Group”) with the objective of fostering the long-term sustainability of the Group’s business and safeguarding the interests of the shareholders and other stakeholders.

This statement sets out the extent of compliance applied to achieve the intended outcomes by the Company with the principles and recommendations of the new Malaysian Code on Corporate Governance issued by the Securities Commission Malaysia which come into force on 26 April 2017 (“MCCG 2017”) and paragraph 15.25(1) of the Main Market Listing Requirements (“Main LR”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) for the financial period between 1 July 2018 and 31 December 2018 (“FPE 2018”).

The Company has disclosed its application with reference to the three (3) principles set out in the MCCG 2017 in a prescribed format of Corporate Governance Report (“CG Report”) and the said CG Report can be viewed and downloaded in the Company’s corporate website www.mct.com.my.

CORPORATE GOVERNANCE OVERVIEW STATEMENT

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS I. BOARD RESPONSIBILITIESThe Board is responsible for the governance of the Group as well as the conduct of the Group’s overall strategic direction. It has established clear functions reserved for the Board and those delegated to Management. These functions have been clearly described and understood by both parties to ensure accountability.

1.1 CLEAR FUNCTIONS RESERVED FOR BOARD AND DELEGATION TO MANAGEMENT The role of the Chairman and the Chief Executive Officer (“CEO”) are divided and separated from

each other with clear scope of duties and responsibilities. The Chairman is responsible for ensuring the effectiveness of the Board’s performance, whilst the day-to-day management of the Group and implementation of the Board’s policies, strategies and decisions is delegated to the CEO within the prescribed limits of authority as approved by the Board.

This formal structure of delegation is further cascaded by the CEO to the Management who is responsible and accountable for the day-to-day management of financial and operational matters of the Group in accordance with the strategic direction approved by the Board.

84


PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (Contd.)

I. BOARD RESPONSIBILITIES (Contd.)

1.2 CLEAR ROLES AND RESPONSIBILITIES The roles and responsibilities of the Board are clearly described in the Board charter. As the Board is

entrusted with the role of safeguarding the interests of shareholders and other stakeholders as well as ensuring sustainability in the Group’s business, every Director has a legal duty to act in the best interest of the Company. Thus, the Board assumes, amongst others, the following significant responsibilities:

• reviewing and adopting strategic plans, business direction and policies; • reviewing the adequacy and integrity of the internal control systems and risk management

framework and policy; • adopting succession planning policies; • adopting an investor relations programme; and • reviewing financial performance and annual budget.

1.3 SEPARATION OF POSITION OF THE CHAIRMAN AND EXECUTIVE DIRECTOR CUM CEO The roles of the Chairman and CEO are undertaken by separate persons. The Chairman is an Independent Non-Executive Director.

1.4 COMPANY SECRETARIES The Directors have full and unrestricted access to the advice and dedicated support services of the

Company Secretaries, as and when the need arises to enable them to discharge their duties effectively. The Company Secretaries are suitably qualified and experienced, are responsible to advise and update the Board on corporate governance matters, and matters related to procedural and regulatory requirements to ensure the Board adheres to policies, procedures and regulatory requirement to proper function in accordance to the Board charter and best practices, required of their role.

1.5 SUPPLY OF INFORMATION The agenda and board papers are circulated to all Directors in advance to ensure that the Directors

are given sufficient time to request additional information or seek clarification, where necessary. Matters that require the Directors’ approval, a clear and detailed information will be given to the Board, in a timely basis, to enable them to discharge their duties. The Directors have direct access to the Management to seek further information, explanations and updates on any aspect of the Group’s operations and businesses as well as the advice and services of the Company Secretaries. In addition, the Directors may also seek independent professional advice, at the Company’s expense, if required.

CORPORATE GOVERNANCE OVERVIEW STATEMENT (Contd.)



1.6 TIME COMMITMENT

The Board meets at least four (4) times a year with additional meetings to be convened when necessary. During the FPE 2018, the Board has held five (5) meetings and details of the attendance of the Directors at the Board meetings are as follows:

NAME OF DIRECTOR DESIGNATION NO. OF MEETINGS ATTENDED / NO. OF MEETINGS HELD


Chairman, Independent Non-Executive Director

5/5

Jose Juan Z. Jugo (1) Executive Director and Chief Executive Officer 4/5

Tan Sri Dato’ Sri Goh Ming Choon (6) Non-Independent Non-Executive Director 3/5


Independent Non-Executive Director 5/5

Bernard Vincent Olmedo Dy Non-Independent Non-Executive Director 4/5

Anna Maria Margarita Bautista Dy Non-Independent Non-Executive Director 5/5

Lao Chok Keang Independent Non-Executive Director 5/5

Ching Hong Seng (2) Alternate Director to Tan Sri Dato’ Sri Goh Ming Choon

2/5

Apollo Bello Tanco (3) Executive Director and Chief Operating Officer 0/5

Ma. Luisa Dioquino Chiong (4) Non-Independent Non-Executive Director 0/5

Teh Heng Chong (5) Executive Director and Chief Operating Officer 0/5

Note: (1) Resigned as Executive Director on 23 January 2019. (2) Due to business commitments overseas Tan Sri Dato’ Sri Goh Ming Choon arranged for his alternate, Mr. Ching Hong Seng, to attend the special

board meetings held in October and December 2018, albeit the attendance of the alternate has not been counted in his attendance record. Following the resignation of Tan Sri Dato’ Sri Goh Ming Choon as a Director of the Company, Mr. Ching ceased as the Alternate Director to Tan Sri Dato’ Sri Goh Ming Choon on 15 April 2019.

(3) Appointed as a Non-Independent Non-Executive Director on 23 January 2019 and subsequently, he was redesignated as an Executive Director and the Chief Operating Officer on 4 March 2019.

(4) Appointed as a Non-Independent Non-Executive Director on 23 January 2019. (5) Appointed as an Executive Director and the CEO on 4 March 2019. (6) Resigned as Non-Independent Non-Executive Director on 15 April 2019.

1.7 DIRECTORS’ TRAINING The Directors, namely Apollo Bello Tanco, Ma. Luisa Dioquino Chiong and Teh Heng Chong being

appointed subsequent to FPE 2018 had successfully attended and completed the Mandatory Accreditation Programme (“MAP”) as required by Bursa Malaysia. The Directors are also encouraged to attend courses and seminars that are relevant to the Group’s operations and businesses conducted by professionals. Every Director of the Company undergoes continuous training as an ongoing process to equip himself/herself to effectively discharge his/her duties as a Director of the Company. For that purpose, he/she ensures that he/she attends such training programmes to continually develop and update himself/herself from time to time. The Company also provides an induction programme for new members of the Board, to ensure that they have a comprehensive understanding of the operations of the Group and the Company.


Corporate Governance86




1.7 DIRECTORS’ TRAINING (Contd.) All the Directors have attended at least one (1) training session on the topics related to Advanced

Corporate Governance Training, Risk Management and Internal Control and other trainings on various topics that were relevant in keeping abreast with the general economic, industrial and technical development. In addition, the External Auditors and Company Secretaries have briefed the Board on the relevant updates on statutory and regulatory requirements from time to time during the Board meetings.

1.8 BOARD CHARTER The Company has adopted a Board charter to provide guidance and clarity on the Board’s roles and

responsibilities as well as the relationship between the Board and shareholders. The Board will review the Board charter, where necessary, to ensure it remains consistent and relevant with the Board’s objectives and practice. A copy of the Board charter is available on the Company’s website at www.mct.com.my.

1.9 CODE OF ETHICS & WHISTLEBLOWING POLICY The Group is committed to upholding good corporate governance practices; thus, every Director is

required to observe the Code of Ethics (“the Code”) set out by the Companies Commission of Malaysia as a guideline. The Code is formulated to enhance the standard of corporate governance and ethical behaviour with the intention of achieving the following aims:

i. To establish a standard of ethical behaviour for directors, including Executive and Non-Executive Directors, based on trustworthiness and values that can be accepted, are held or upheld by any one (1) person.

ii. To uphold the spirit of responsibility and social responsibility in line with the legislation, regulations and guidelines for administrating a company.

All Directors should at all times observe high ethical business standards in discharging their duties and responsibilities as a Director and to act in good faith and in the best interests of the Company and its shareholders.

The Company has also issued a separate business of the Code that applies to all Managers and Management (“Executives”) of the Group to sustain the confidence and trust of its customers and suppliers. The Code sets out the standards of business conduct and ethical behaviour, such as integrity, dealing with conflict of interest, proper use of Group’s assets, compliance with all applicable laws, rules and regulations of the relevant regulatory/governmental authorities, confidentiality, fairness, etc. for all Executives in the performance and exercise of their responsibilities as Executives.




1.9 CODE OF ETHICS & WHISTLEBLOWING POLICY (Contd.) The Board has implemented a set of Whistleblowing Policy and procedures to provide employees to

raise genuine concerns related to possible improprieties in matters of financial reporting, compliance and other malpractices at the earliest opportunity, and in an appropriate way. Following the resignation of the Senior Independent Non-Executive Director who was appointed by the Board to act as a designated contact to whom executives’ or employees’ concerns and queries may be raised, the Management had outsourced its whistleblowing program to a third party with a dedicated hotline and procedures to allow review and investigation of incidents reported with the approval from the Board. The Whistleblowing Policy shall be available on the Company’s website at www.mct.com.my, subject to amendments, if any.

II. BOARD COMPOSITION

1.1 BOARD COMPOSITION The Board currently consists of eight (8) members, comprising of three (3) Independent Non-Executive

Directors (“INED”), three (3) Non-Independent Non-Executive Directors (“NINED”) and two (2) Executive Directors (“ED”). Hence, the composition of the Board fulfils the requirement that one-third (1/3) of the number of the Directors on the Board be independent. The Board’s composition is in line with Paragraph 15.02 of the Main LR, which stipulates that at least two (2) Directors or one-third (1/3) of the Board, whichever is higher, must be independent. In the event of any vacancy in the Board resulting in non-compliance with Paragraph 15.02(1) of the Main LR, the Company must fill the vacancy within three months. The Board takes cognisance that the current board composition is not aligned with the best practices of MCCG 2017 which stipulating that at least half of the Board comprises Independent Directors. The Board is endeavours to seek for suitable and calibre candidates as additional Independent Director of the Company so that it applies the best practices of the MCCG 2017.

The Board comprises a mixture of Directors from diverse professional backgrounds, skills and experiences in the areas of business, marketing and commercial management, economics, construction, management and finance, required for effective and independent decision-making at the Board level. The Board considers its current size adequate given the present scope and nature of the Group’s business operations. The Directors of the Company have exercised independent and objective judgement, discharged their duties with reasonable care, skill and diligence and have the integrity and ethics that are essential indicators of independence.







1.2 TENURE OF INDEPENDENT DIRECTORS The purpose of appointing Independent Directors is to ensure that the Board includes Directors who

can effectively exercise their independent and objective judgement during the Board’s deliberations, particularly during decision-making of the Board and the Committees. As at the date of approval of this statement, there were no Independent Directors serving the Board beyond 9 years.

However, the Board acknowledges that the tenure of an Independent Director should not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, the Independent Director may continue to serve on the Board subject to the Directors’ re-designation as Non-Independent Director. Otherwise, the Board must justify and seek shareholders’ approval in the event such Director will be retained as an Independent Director.

As for the retention of an Independent Director above twelve (12) years, the Board shall seek shareholders’ approval through the two-tier voting process.


II. BOARD COMPOSITION (Contd.)

1.3 ANNUAL ASSESSMENT OF INDEPENDENCE The Board has set out policies and procedures to ensure the effectiveness of the Independent Non-

Executive Directors. Assessment of the independence of the Independent Director is carried out annually.

The Board and the Nomination Committee (“NC”) have upon their annual assessment, concluded that each of the three (3) Independent Non-Executive Directors has fulfilled the criteria of independence as prescribed under the Main LR. They have exercised independent and objective judgement, discharged their duties with reasonable care, skill and diligence and have the integrity and ethics that are essential indicators of independence.

1.4 BOARD COMMITTEES

The Board has established and assigned specific responsibilities to three (3) Board Committees of the Board which are entrusted with specific responsibilities to oversee the Group’s affairs, in accordance with their respective clearly defined written terms of reference (“TOR”). The Board reviews the Board Committees’ authority and TOR from time to time to ensure their relevance. The Board Committees are responsible for examining particular issues within clearly defined TOR and reporting back to the Board with their recommendations. The activities of the Board Committees are further explained in this Statement.



1.4 BOARD COMMITTEES (Contd.)

The Board Committees are: • Audit and Risk Management Committee (“ARMC”); • Remuneration Committee (“RC”); and • NC. The minutes of Board Committee meetings and circular resolutions passed are presented to the Board

for information. The Chairman of the relevant Board Committees also report to the Board on the key issues deliberated by the Board Committees at their respective meetings. 1.4.1 Audit and Risk Management Committee

The ARMC is responsible to assist the Board in discharging its duties and responsibilities relating to the accounting and reporting practices of the Group. The ARMC reviews the Group’s accounting and risk management processes, internal controls and the independence of the Group’s internal and external auditors. The activities during FPE 2018 have been laid out in the ARMC Report in this Annual Report. The full TOR of the ARMC is available on the Company’s website at www.mct.com.my.

1.4.2 Nomination Committee The NC was established by the Board with the responsibilities of overseeing the selection

of new appointments to the Board and reviewing the effectiveness of the Board, through performance assessment of the Board, Board Committees and individual Directors. The full TOR of the NC is available on the Company’s website at www.mct.com.my.

During the FPE 2018, the NC comprises of three (3) members and all of whom are Non-Executive Directors with a majority being Independent Directors. Their meeting attendances are set out below:

(a) The duties and responsibilities of the NC are as follows: i. identifying and recommending new nominees to the Board as well as committees of

the Board of MCT and its subsidiaries;



NAME DESIGNATION NO. OF MEETINGS ATTENDED / NO. OF MEETINGS HELD


Chairman, Independent Non-Executive Director

2/2


Member, Independent Non-Executive Director and Chairman

2/2

Bernard Vincent Olmedo Dy Member, Non-Independent Non-Executive Director

1/2

90






1.4.2 Nomination Committee (Contd.)

(a) The duties and responsibilities of the NC are as follows:ii. reviewing on an annual basis the required mix of skills and experience and other

qualities including core competencies which Non-Executive Directors should bring tothe Board and to assess the effectiveness of the Board as a whole, the Committeesof the Board, and the contribution of each individual Director. In the event ofIndependent Director(s) who are retained beyond nine (9) years, the NC shouldconduct an assessment of the Independent Director(s) and recommend to the Boardwhether the Director should remain as independent or be re-designated;

iii. to review the term of office and performance of an ARMC and each of its membersannually to determine whether such ARMC and members have carried out their dutiesin accordance with the TOR of the ARMC.

iv. recommending to the Board the re-election of Directors retiring in accordance withthe provisions of the Company’s Constitution, for approval by shareholders.

(b) Board Diversityi. Gender Diversity

The Board acknowledges the need to enhance board gender diversity. Currently,there are two (2) female Directors on the Board, namely Anna Maria MargaritaBautista Dy and Ma. Luisa Dioquino Chiong.

ii. Ethnicity Diversity At present, the Board comprises of two (2) Malay Directors, two (2) Chinese Directorsand four (4) Philippine Directors.

iii. Age Diversity The general age profile of the Directors is between forty to seventy years of age.

In so far as board diversity is concerned, the Board does not discriminate on the basis of gender, ethnicity, age or religion. The evaluation of the suitability of candidate(s) for filing of casual vacancy, re-election or re-appointment is solely based on the competency, character, time commitment, integrity and experience of the candidate(s) in meeting the needs of the Company, including, where appropriate, the ability of the candidate(s) to act as Independent Non-Executive Directors, as the case may be. The NC has also taken this into consideration when assessing the performance of the Directors.

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (Contd.)II. BOARD COMPOSITION (Contd.)


1.4.2 Nomination Committee (Contd.)(c) Appointment to the Board

The NC is responsible for identifying and recommending new nominees to the Board as well as committees of the Board. The selection of candidates is facilitated through recommendation from the Directors and Management including the Company’s contacts in related industries and professions. In evaluating the appointment of a Director, the NC will review the skills, experience, integrity and core competencies of the candidate that is required by the Board.

(d) Board Effectiveness Assessment During FPE 2018, the NC met twice (2) and carried out the following activities, and reported to the Board the outcome of:

i. reviewing the effectiveness of the Board, Board Committees and contribution of eachindividual Director;

ii. reviewing the term of office and performance of the ARMC and each of its membersto determine whether the ARMC and members have carried out their duties;

iii. assessing the independence of each Independent Director in carrying out theirrespective functions during the year; and

iv. reviewing and recommending the re-appointment/re-election of Directors retiringpursuant to the Articles 81 of the Company’s Constitution, who were re-appointedand/or re-elected by the shareholders at the Ninth Annual General Meeting (“AGM”)of the Company held on 28 November 2018.

The NC had assessed and recommended the appointments of Mr. Lyle Aguilar Abadia and Ms. Ma. Luisa Dioquino Chiong as additional Directors of the subsidiary companies of MCT vide passing a resolution at a special NC meeting held on 12 December 2018.

Subsequent to FPE 2018, the NC has conducted the following annual assessments in accordance with the TOR of the Company and the results were reported to the Board:

i. reviewed the effectiveness of the Board, Board Committees and contribution of eachindividual Director;

ii. reviewed the term of office and performance of the ARMC and each of its membersto determine whether the ARMC and members have carried out their duties;








1.4.2 Nomination Committee (Contd.) (d) Board Effectiveness Assessment (Contd.)

iii. assess the independence of each Independent Director in carrying out their respectivefunctions during the year; and

iv. reviewed and recommended the re-election of Directors retiring pursuant to theArticles 81 and 88 of the Company’s Constitution for the Shareholders’ approval atthe forthcoming Tenth AGM of the Company to be held on 26 June 2019.

The NC had accessed and recommended the appointments of: • Mr. Apollo Bello Tanco and Ms. Ma. Luisa Dioquino Chiong as Director of the

Company and group of subsidiary companies, in place of Mr. Jose Juan Z. Jugo, whohad resigned as Director of MCT and group of subsidiary companies on 23 January2019;

• Mr. Kogelevanan A/L Thinakaram as Director of the subsidiary companies, in placeof Ms. Maria Rochelle Siloterio Diaz, who had resigned as Director of the subsidiarycompanies on 23 January 2019;

• Mr. Aw Chong Seng as an additional Director of MCT Consortium Bhd., a wholly-owned subsidiary company of MCT;

• Mr. Teh Heng Chong as Director and the CEO of the Company; and

• Ms. Susan Jacob Secreto as the Chief Financial Officer of the Company.

The criteria used in the performance assessment of the Board, Board Committees and individual Directors include:

i. appropriate size, composition, degree of independence, right mix of expertise,experience and skills within the Board and the Board Committees;

ii. open communication of information and active participation within the Board andBoard Committee;

iii. clear understanding of the Board and Board Committees’ roles and responsibilitiesand the Group’s direction and strategy; and

iv. the characteristics, integrity, competency and time commitment of the members of theBoard and Board Committee in discharging their duties.




1.4.2 Nomination Committee (Contd.)

Article 88 of the Company’s Constitution also provides that any Director so appointed shall hold office only until the next AGM, and shall then be eligible for re-election. With the recommendation of the NC, the Board also takes pleasure in proposing the re-election of the following Directors, who have offered themselves for re-election, during the forthcoming Tenth AGM:

i. Mr. Apollo Bello Tanco;ii. Ms. Ma. Luisa Dioquino Chiong; andiii. Mr. Teh Heng Chong.

(e) Re-election of Directors

Pursuant to Article 81 of the Company’s Constitution, at least one third (1/3) of the Directors of the Company shall retire and be eligible for re-election at the AGM of the Company provided that all Directors shall retire at least once in every three (3) years. Based on the chronology of Directors’ appointment to the Board and upon recommendation by the NC, the Board takes pleasure in proposing the re-election of the following Directors, who have offered themselves for re-election, during the forthcoming Tenth AGM:

i. Tan Sri Dato’ Sri Abi Musa Asa’ari Bin Mohamed Nor; andii. Tan Sri Dato’ Hj. Abd Karim Bin Shaikh Munisar.

1.4.3 Remuneration Committee (“RC”) The RC was established by the Board to review matters on Directors’ remuneration and make relevant recommendation to the Board. The Board recognises that levels of remuneration must be sufficient to attract, retain and motivate the Directors with the quality required to manage the business of the Group and to align the interest of the Directors with those of the shareholders. The TOR for the RC is available on the Company’s website at www.mct.com.my.

During the FPE 2018, the RC comprises the following three (3) Non-Executive Directors, the majority of whom are Independent Directors:



NAME DESIGNATION NO. OF MEETINGS ATTENDED / NO. OF MEETINGS HELD


Chairman, Independent Non-Executive Director and Chairman

1/1


Member, Independent Non-Executive Director

1/1

Bernard Vincent Olmedo Dy Member, Non-Independent Non-Executive Director

0/1

94



III. REMUNERATION

1.1 DIRECTORS’ REMUNERATION In compliance with the Main LR and MCCG 2017 practice, the details of the remuneration of the Directors for FPE 2018, are as follows:

The Board is of the opinion that the disclosure on the remuneration of the Key Senior Management on a named basis would not be in the best interest of the Group due to confidentiality and sensitivity concerns as well as the issue of competitiveness of the Company in engaging its employees.

The Board will ensure that the remuneration of the Key Senior Management commensurate with their duties and responsibilities, the performance of the Company and without excessive remuneration payouts. The aggregate remuneration paid to the Key Senior Management was RM1,586,678.11 which comprises of their annual salary, allowances, bonus and benefits-in-kind.

In addition, the Company also provides Directors’ and Officers’ Liability Insurance Policy for Directors of the Group. However, the said insurance policy will not indemnify the Director against any liability which by law would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust.


DIRECTORS’ FEES(RM)

SALARIES/ ALLOWANCES

(RM)

BONUSES(RM)

BENEFITS- IN-KIND

(RM)

OTHER EMOLUMENTS

(RM)

TOTAL(RM)


53,435.62 5,000.00 - - - 58,435.62

Jose Juan Z. Jugo - 324,646.05 59,830.28 19,767.50 - 404,243.83

Tan Sri Dato’ Sri Goh Ming Choon

25,205.48 3,000.00 - - - 28,205.48


38,312.33 5,000.00 - 17,308.17 - 60,620.50


33,271.23 4,000.00 - - - 37,271.23


29,238.36 5,000.00 - - - 34,238.36

Lao Chok Keang 31,254.79 5,000.00 - - - 36,254.79

Ching Hong Seng - - - - - -

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT (Contd.)

I. AUDIT AND RISK MANAGEMENT COMMITTEE

The composition and details of activities carried out by the ARMC during FPE 2018 are set out in the ARMC Report of this Annual Report.

1.1 COMPLIANCE WITH APPLICABLE FINANCIAL REPORTING STANDARDS The Board, which is assisted by the ARMC, aims to present a balanced and understandable assessment of the Group’s position and prospects through the annual financial statements and quarterly announcements of results to Bursa Malaysia. The composition of the ARMC, including its roles and responsibilities, are set out in the TOR of the ARMC which is available on the Company’s website.

The Directors are responsible for ensuring that the annual financial statements are prepared in accordance with the provisions of the Companies Act, 2016 and applicable approved accounting standards in Malaysia which gives a true and fair view of the Group and of the Company’s state of affairs, results and cash flows.

A statement by the Directors of their responsibilities in preparing the financial statements is set out in this Annual Report.

1.2 ASSESSMENT OF SUITABILITY AND INDEPENDENCE OF EXTERNAL AUDITORS Subsequent to the FPE 2018, the ARMC has discussed the suitability of the proposed new External Auditors who are to be appointed in place of the retiring External Auditors, Messrs. Deloitte PLT and made recommendation to the Board to seek the approval of the shareholders of the Company at the forthcoming Tenth Annual General Meeting for the appointment of Messrs. Ernst & Young as the External Auditors of the Company and Group for the financial year ending 31 December 2019.

1.3 RELATED PARTY TRANSACTIONS (“RPT”) (Contd.) The Board approved the revised policies and procedures on RPT of the Group and through its ARMC, to review all related party transactions and conflicts of interest situations, if any, on a quarterly basis.

A Director, who has an interest in a transaction, must abstain from deliberating and voting on the relevant resolution, in respect of such transaction at the meeting of the Board of Directors and at the AGM or Extraordinary General Meeting convened to consider the said matter.


II. RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK

1.1 SOUND RISK MANAGEMENT FRAMEWORK In recognising the importance of risk management and internal controls, the Board outsourced its Risk Management function to an independent consulting firm, KPMG Management & Risk Consulting Sdn. Bhd..





II. RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK (Contd.)

The role of the external Risk Management Consultant is to enhance the Enterprise Risk Management Framework of the Group to facilitate systematic application of risk management practices and reporting on risk management results effectively. The Board noted the update on the Enterprise-wide Risk Management Review which was assessed, reviewed and recommended by the ARMC.

Full details of the risk management framework are set out in the Statement on Risk Management and Internal Control in this Annual Report.

1.2 INTERNAL AUDIT FUNCTION The Group’s Internal Audit Department continues to undertake regular and systematic reviews of the Group’s internal controls to provide reasonable assurance to the ARMC, the Board and the Management that the system of internal controls is effective in addressing the risks identified and improving the Group’s operational efficiency. The internal audit function is independent of the Management and has full access to all of the Group’s entities, records and personnel. The scope and activities of the Company’s internal audit function as well as the cost incurred in maintaining it are reported in the Report of the ARMC and the Statement on Risk Management and Internal Control in this Annual Report.

PRINCIPLE C: INTERGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

1.1 CORPORATE DISCLOSURE POLICY AND PROCEDURE The Company values the importance of dissemination of relevant and material information on the development of the Group to its shareholders and stakeholders in a timely and equitable manner. The Company’s corporate website at www.mct.com.my serves as one (1) of the most convenient ways for the shareholders and members of the public to gain access to corporate information, announcements, quarterly results, annual reports, media releases, etc. There is also a section focusing on Corporate Governance that comprises the Company’s Board charter, Code of Ethics, Whistle-Blowing Policy, TOR for ARMC, NC and RC.

1.2 ENCOURAGE SHAREHOLDERS PARTICIPATION AT GENERAL MEETINGS The AGM is the principal forum for dialogue and interaction with all shareholders, who are given the opportunity to enquire and seek clarification on the operations and financial performance of the Company.

The Board will ensure that the general meetings of the Company are conducted in an efficient manner and serve as a mode of shareholder communication. This includes the supply of comprehensive and timely information to shareholders and encourage active participation at the general meetings.

1.3 POLL VOTING In line with the recent amendments to the Main LR of Bursa Malaysia, the Company will implement poll voting for all the resolutions set out in the Notice of AGM. An Independent Scrutineer will be appointed to validate the votes cast at the AGM.

This Statement is made in accordance with the resolution of the Board dated 22 April 2019.


EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”)The effective date of implementation of the Company’s ESOS was 3 May 2016 (“Implementation Date”) and shall be in force for five (5) years from the Implementation Date.

No options or shares were granted between the Implementation Date and 31 December 2018.

AUDIT AND NON-AUDIT FEESThe details of the fees paid or payable for audit and non-audit services rendered to the Company and the Group by the External Auditors during FPE 2018 are as follows:

MATERIAL CONTRACTSThere were no material contracts (not being contracts entered into in the ordinary course of business) entered into by the Company and/or the Group, which involve the interest of Directors and major shareholders of the Company during FPE 2018.

RECURRENT RELATED PARTY TRANSACTIONS (“RRPT”) OF REVENUE OR TRADING NATURE:The Company did not enter into any RRPT which requires the shareholders’ mandate during FPE 2018.

UTILISATION OF PROCEEDSThe proceeds raised from the disposal of One City Properties Sdn. Bhd. and Ecity Hotel Sdn. Bhd. were fully utilised for working capital requirements of the Group.

ADDITIONAL COMPLIANCE INFORMATION


FEES PAID/PAYABLE GROUP (RM)

COMPANY (RM)

Audit 269,200 40,000

Non-Audit 181,244 135,000

98


The Directors have the responsibility to prepare financial statements for the financial period which have been made out in accordance with applicable approved accounting standards and the requirements of the Companies Act, 2016 (“Act”) and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad which provide a true and fair view of the state of affairs of the Group and the Company as at the end of 31 December 2018, and of the financial results and cash flows of the Group and the Company for the period then ended.

In preparing the statutory financial statements for the financial period ended 31 December 2018, the Directors have:

a) adopted appropriate accounting policies and applied them consistently;b) made judgements and estimates that are reasonable and prudent; andc) prepared the financial statements on a going concern basis.

The Directors are responsible for ensuring that the Group and the Company maintain accounting records which disclose with reasonable accuracy the financial position of the Group and the Company. These financial records are used to ensure that the financial statements comply with the provision of the Act and the applicable approved accounting standards in Malaysia.

The Directors are responsible for taking such steps as are reasonably open to them to preserve the interests of stakeholders and to safeguard the assets of the Group and the Company, and to detect and prevent fraud and other irregularities.

The statutory financial statements of the Company and the Group for the financial period ended 31 December 2018 are set out in this annual report.

STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE STATUTORY FINANCIAL STATEMENTS

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL


The Board of Directors (“Board”) of MCT Berhad (“Company”) is committed to nurture and maintain sound risk management processes and systems of internal control throughout its group of companies (“Group”). The Board’s Statement on Risk Management and Internal Control (“Statement”) featuring the Group’s risk management process and its state of internal control systems is outlined below.

The Statement is made in accordance with Paragraph 15.26(b) of the Main Market Listing Requirements (“Main LR”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”), the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers pursuant to Practice Note 9 of Main LR and Principle B (II) of the Malaysian Code on Corporate Governance 2017.

THE BOARD’S RESPONSIBILITYThe Board affirms its overall responsibility for the Group’s systems of internal control and risk management process in order to safeguard shareholders’ investment and the Group’s assets. The Board is responsible to determine the Group’s level of risk tolerance as well as articulating, implementing and reviewing the Group’s risk management and internal control framework.

Board Committees have been established to carry out duties and responsibilities delegated by the Board, governed by the respective written Terms of Reference. The Meetings of the Board and Board Committees are carried out to review the performance of the Group, from financial to operational perspectives. The Board’s role is to discuss the business plans and strategies after taking into consideration the risk factors.

The Board must ensure the adequacy, effectiveness and integrity of the internal control systems through regular reviews, accompanied by ongoing risk management processes.

It should be noted that such systems are designed to manage rather than eliminate the risk of failure so as to achieve business objectives and therefore, can provide only reasonable and not absolute assurance against material misstatement or loss.

RISK MANAGEMENTThe Company has appointed a third-party consulting firm, namely KPMG Management & Risk Consulting Sdn. Bhd., to assess the adequacy and comprehensiveness of the Group’s Enterprise Risk Management Framework in line with ISO 31000:2009 Risk Management Standard. Key features of the activities undertaken for the period are as follows:

(a) Evaluate the adequacy and integrity of the Group’s Enterprise Risk Management Framework, policies and risk assessment process (i.e. identification, controlling, reporting and monitoring of key business risks).

100


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (Contd.)

RISK MANAGEMENT (Contd.)

(b) Conduct reviews and updates of risk profiles of key business risks both internal and external risks which may potentially derail the achievement of the business objectives and goals.

(c) Review the current risk appetite through having a set of measureable parameters related to key business risks of the Group.

(d) Facilitate the identification of key business risks faced by the Group by conducting awareness sessions, face-to-face discussions and workshops with risk owners.

(e) Assist the Group in formulating action plans for mitigating key business risks.

Internal auditors review the status of agreed action plans on a quarterly basis after the above-mentioned activities are concluded.

INTERNAL CONTROLThe key processes that the Group has established in reviewing the adequacy and integrity of the Group’s systems of internal control include the following:

(a) Internal policies and procedures which are set out in a series of clearly documented standard operating manuals covering a majority of areas within the Group are maintained and subject to review as considered necessary.

(b) Clearly defined and documented responsibility and accountability have been established through the relevant terms of reference and organisational structures, including matters requiring the Board’s approval. The corporate structure further enhances the ability of each subsidiary or division, as the case may be, to focus on its assigned core or support functions within the Group. Lines and limits of authority are put in place to monitor and control the Group’s business activities.

(c) Appropriate business plans are established where the Group’s business objectives, strategies and targets are articulated. Business planning and budgeting are undertaken annually to establish plans and targets against which performance is monitored on an ongoing basis.

(d) The Group’s management team monitors and reviews financial and operational results, including monitoring and reporting of performance against the operating plans. The management team formulates and communicates action plans to address areas of concern.

(e) The Board has set the tone at the top for corporate behavior and corporate governance. All employees of the Group shall adhere to the Code of Ethics and Conduct of the Group which sets out the principles and standard to guide employees in carrying out their duties and responsibilities to the highest standards of personal and corporate integrity when dealing within the Group and with external parties.



INTERNAL CONTROL (Contd.)

(f) The Group takes continuous efforts in maintaining the quality of its products and services. Accordingly, the Group has a process to enable timely adherence to safety and health regulations, environmental requirements and relevant legislations affecting the Group’s operations.

(g) Sufficient insurance coverage and physical safeguards over major assets of the Group are in place to enable assets to be adequately covered against calamities and/or theft that may result in material losses to the Group.

(h) Regular internal audit visits to assess and provide independent reports and assurance on the state of internal control systems of the Group’s various operations.

(i) A whistleblowing process has been established to provide an avenue for employees to communicate their concerns on matters of integrity in a confidential manner. The Whistleblowing Policy has been reviewed and updated, where the protection afforded to whistleblowers has been further enhanced.

(j) Continuous training and development programmes covering all levels of the Group’s employees have been designed to ensure and maintain the competency and efficiency of the employees.

(k) Undertakes the compliance review functions to ensure adherence to rules and regulations laid down by the various regulators and authorities.

During the period under review, the internal auditors highlighted some areas for improvement in the internal control systems, and the Management has taken appropriate measures to address them accordingly. The internal control enhancements highlighted were mainly operational in nature and does have an impact on the operational results of the Group.

102



REVIEW OF THE STATEMENT BY EXTERNAL AUDITORSAs required by Paragraph 15.23 of the Main LR of Bursa Malaysia, the external auditors, Deloitte PLT have reviewed the Statement for inclusion in the annual report of the Company for the 6-month period ended 31 December 2018. Their limited assurance review was performed in accordance with Malaysian Approved Standard on Assurance Engagements, Assurance Engagements other than Audits or Reviews of Historical Financial Information and AAPG 3, Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control Included in the Annual Report issued by the Malaysian Institute of Accountants.

Based on the review, the external auditors have reported to the Board that no issue has come to their attention that caused them to believe that the Statement is inconsistent with their understanding of the processes adopted by the Board in reviewing the adequacy and effectiveness of the risk management process and internal control systems of the Group.

THE BOARD’S CONCLUSION AND ASSURANCE PROVIDED BY THE MANAGEMENTThe Board has reviewed the risk management process and internal control systems and believes that the risk management process and internal control systems of the Group are in place for the period under review.

The Board also believes that up to the date of issuance of the financial statements, they are effective and adequate to safeguard the shareholders’ investment as well as the interests of regulators and employees.The Board has also received reasonable assurance from Teh Heng Chong, the Chief Executive Officer, and Susan Jacob Secreto, the Chief Financial Officer, that the Group’s risk management process and internal control systems are operating adequately and effectively, in all material aspects, based on the risk management process and internal control systems of the Group.

Moving forward, the Group will continue to improve and enhance the existing risk management process and internal control systems, taking into consideration the changing business environment.

The Statement was approved by the Board on 30 April 2019.

COMPOSITIONThe ARMC currently comprises of four (4) members and all of whom are Non-Executive Directors with majority being Independent Directors. All the members of the ARMC are financially literate and able to analyse and interpret financial statements in order to effectively carry out their duties and responsibilities as members of the ARMC.

Mr. Lao Chok Keang, Chairman of the ARMC, is a member of the Malaysian Institute of Accountants. As such, the composition of the ARMC is in compliance with Paragraph 15.09(1) of the Main Market Listing Requirements (“Main LR”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”). Details of the ARMC members are set out in the Directors’ Profile in this Annual Report.

The ARMC who served during the FPE 2018 and their attendance are set out below:

AUDIT AND RISK MANAGEMENT COMMITTEE REPORT

The Board of Directors (“Board”) of MCT Berhad is pleased to present the report of theAudit and Risk Management Committee (“ARMC”) and its activities for the financial period ended 31 December 2018 (“FPE 2018”).

NAME OF AUDIT AND RISK MANAGEMENT COMMITTEE DESIGNATION NO. OF MEETINGS ATTENDED / NO. OF MEETINGS HELD

Lao Chok Keang Chairman, Independent Non-Executive Director

4/4


Member, Independent Non-Executive Director and

Chairman

4/4


Member, Independent Non-Executive Director

4/4

Anna Maria Margarita Bautista Dy Member, Non-Independent Non-Executive Director

4/4



AUDIT AND RISK MANAGEMENT COMMITTEE REPORT (Contd.)

MEETINGSThe ARMC convened a total of four (4) meetings during FPE 2018. The meetings were held on 6 August 2018, 25 September 2018, 13 October 2018 and 14 November 2018.

The Chief Financial Officer was invited to present the quarterly financial results and the Head of Internal Audit was invited to report the outcome of their audit at the ARMC meetings. Other person were invited to attend the ARMC meeting, upon invitation, as and when necessary.

The ARMC met with the External Auditors three (3) times during FPE 2018 to discuss their audit planning memorandum, professional service planning memorandum, audit findings and the Company’s financial statements. In addition to that, the External Auditors had a private session with the ARMC without the presence of the Executive Directors or Senior Management. The Chairman of the ARMC engaged directly with the Head of Internal Audit and External Auditors, and vice versa, including Senior Management, for discussion on issues of concern during FPE 2018.

Subsequent to the FPE 2018, the ARMC has discussed the suitability of the proposed new External Auditors who are to be appointed in place of the retiring External Auditors, Messrs. Deloitte PLT and made recommendation to the Board to seek the approval of the shareholders of the Company at the forthcoming Tenth Annual General Meeting for the appointment of Messrs. Ernst & Young as the External Auditors of the Company and Group for the financial year ending 31 December 2019.

TERMS OF REFERENCEThe Terms of Reference (“TOR”) of the ARMC which were reviewed, revised and adopted on 3 May 2016 in accordance with the amendments to the Main LR of Bursa Malaysia are available for reference on the Company’s website: www.mct.com.my.



SUMMARY OF ACTIVITIES DURING THE FINANCIAL YEARDuring FPE 2018, the ARMC carried out the following activities:

(a) Reviewed the unaudited quarterly financial reports before they were presented to the Board for approval.

(b) Reviewed the annual audited financial statements of the Group and obtained assurance that the financial reporting and disclosure requirements of the relevant authorities had been duly complied with.

(c) Reviewed with the External Auditors, focusing on changes in accounting policies and practices, major judgemental and risk areas, significant adjustments resulting from the audit, unusual events, the going concern assumption, compliance with accounting standards, compliance with the Main LR and other legal requirements.

(d) Reviewed with the External Auditors, their audit planning memorandum covering the audit objectives and approach, key audit areas and the relevant accounting standards issued by the Malaysian Accounting Standard Board and other relevant technical pronouncements that are relevant to the Group, as well as, the impact of any changes to the accounting policies.

(e) Reviewed with the External Auditors, their audit report and findings on financial reporting matters, and reported such matters to the Board.

(f) Met with the External Auditors without the presence of the Executive Directors and the Management.

(g) Evaluated the performance of the External Auditors and made recommendations to the Board on their re-appointment and audit fee.

(h) Discussed the suitability of the proposed new External Auditors who are to be appointed in place of the retiring External Auditors, Messrs. Deloitte PLT and made recommendation to the Board to seek the approval of the shareholders of the Company at the forthcoming Annual General Meeting.

(i) Reviewed the adequacy of resources to complete the audit plan.

(j) Reviewed the internal auditors’ observations, recommendations for improvements and management’s response thereto.

(k) Reported major findings to the Board and made recommendations to the Board for consideration and approval based on the internal audit reports.

(l) Approved the Risk Management Framework and Policy, including the Business Continuity Plan and Crisis Management for the Group.

(m) Recommendation to the Board to engage an external party to carry on with the Risk Management function and reviewing the revised Enterprise Risk Management program for the Group.

(n) Quarterly reviewed and verified the related party transactions and conflicts of interest of the Board of Directors.

(o) Reviewed and recommended the Statement on Risk Management and Internal Control, ARMC Committee Report, Sustainability Statement and Management Discussion and Analysis for Board’s approval for inclusion in the Annual Report.

The Board is satisfied that the ARMC and its members have carried out their responsibilities and duties in accordance with the ARMC’s TOR.

106



INTERNAL AUDIT FUNCTIONThe Company has an in-house Internal Audit Department (“IAD”) led by a qualified and experienced Senior Manager with two (2) assistants to carry out its appraisal function independently from the Management, with the Head of Internal Audit who directly reports to the ARMC. The function of the IAD is to assist the ARMC, Board and Management in discharging their governance responsibilities, to provide the assurance on the adequacy and effectiveness of the internal control systems, risk management and recommending improvements to add value to the Group’s operational efficiency.

The Board has put in place an Internal Audit Charter recommended by the ARMC as a guide to the IAD in its objectives and scope of authority. The internal audit function fully abides by the provisions of its charter.

The activities undertaken by the IAD during the period under review included the following:

(a) assisted the Management in coordinating risk management activities;

(b) assisted the Management in running whistleblowing campaigns and handling 8 complaints from whistleblowers;

(c) prepared a risk-based annual internal audit plan for the review and approval of the ARMC; and

(d) reviewed compliance with the Housing Development (Control and Licensing) Act 1966, the management of construction subcontracts, operations of the Admin Section, operations of the HSSE Section as well as the management of sales and marketing expenses for property development projects. Reported findings from the reviews to the Management and the ARMC for the formulation and implementation of effective action plans.

The total cost incurred for the internal audit function of the Group for the financial period under review was approximately RM286,726.31.

This ARMC Report is made in accordance with the resolution of the Board dated 22 April 2019.

Other Information

LIST OF PROPERTIES

COMPANY / ADDRESSLAND AREA

(ACRES) EXISTING USE TENUREREMAINING USEFUL LIFE

YEAR OF ACQUISITION/YEAR OF COMPLETION*

NET BOOK VALUE AS AT 31 DEC 2018 (RM)

NEXT DELTA SDN. BHD.

Lot 72024, Pekan Country Height, Daerah Petaling, Selangor Darul Ehsan

5.61 Land Held for Development

Freehold NA 09.11.2018 143,000,000

Lot 72025, Pekan Country Height, Daerah Petaling, Selangor Darul Ehsan

3.51 Land Held for Development

Freehold NA 09.11.2018

ONE CITY DEVELOPMENT SDN. BHD.

Lot 81278, Mukim Damansara, Daerah Petaling, Selangor Darul Ehsan

14.35 One City Phase 3 (Land held for development)

Freehold NA 1998 10,907,612

Lot 91374 Mukim Damansara, Daerah Petaling, Selangor Darul Ehsan

2.90 One City Phase 3 (Land held for development)

Freehold NA 2012 2,592,388

THE PLACE PROPERTIES SDN. BHD.

The Place@Cyberjaya, Jalan Teknokrat 1/1, Cyberjaya, 63000 Selangor Darul Ehsan

10.52 Basement carpark and retail lots

Freehold NA 31.03.2015* 29,479,171

Sky Park@One City, Jalan USJ 25/1, 47650 Subang Jaya, Selangor Darul Ehsan

2.22 Retail lots Freehold NA 16.12.2013* 47,738,000

TIMELESS HECTARES SDN. BHD.

Lot 0108632, Mukim Dengkil, Daerah Sepang, Selangor Darul Ehsan

23.10 Lakefront (Land under development)

Freehold NA 25.03.2011 34,506,960






Freehold NA 25.03.2011 24,845,000




108


LIST OF PROPERTIES (Contd.)

COMPANY / ADDRESSLAND AREA

(ACRES) EXISTING USE TENUREREMAINING USEFUL LIFE

YEAR OF ACQUISITION/YEAR OF COMPLETION*

NET BOOK VALUE AS AT 31 DEC 2018 (RM)

SOLID BENEFIT SDN. BHD.

Lot 104161 Mukim Dengkil, Daerah Sepang, Selangor Darul Ehsan

73.83 Cybersouth (Land held for development)

Leasehold expiring

01.02.2104

86 2008 5,259,154



Leasehold expiring

01.02.2104

86 2008 8,866,407



Leasehold expiring

01.02.2104

86 2008 3,882,214



Leasehold expiring

01.02.2104

86 2008 3,465,500



Leasehold expiring

01.02.2104

86 2009 8,226,733

SOLID RECOMMENDATION SDN. BHD.


11.13 Skypark@Cyberjaya (Land under development)

Freehold NA 22.09.2010 43,160,000

VISTA GLOBAL DEVELOPMENT SDN. BHD.

Lot PT12016, Mukim Dengkil, Daerah Sepang, Selangor Darul Ehsan

7.20 Cyber ONE (Land held for investment)

Freehold NA 20.09.2013 31,371,912

Other Information

ANALYSIS OF SHAREHOLDINGSAs at 15 April 2019

SHARE CAPITAL

Total Number of Issued Shares : 1,456,995,471 ORDINARY SHARESTypes of Shares : Ordinary share Voting Rights : One (1) vote per ordinary share

DISTRIBUTION OF SHAREHOLDINGS

SIZE OF SHAREHOLDING NO. OF HOLDERS % OF HOLDERS NO. OF HOLDINGS % OF ISSUED SHARE CAPITAL

Less than 100 66 6.56 1,715 0.00

100 to 1,000 421 41.85 108,808 0.01

1,001 to 10,000 325 32.30 1,940,375 0.13

10,001 to 100,000 155 15.41 4,277,546 0.29

100,001 to less than 5% of issued shares 35 3.48 351,984,612 24.16

5% and above of issued shares 4 0.40 1,098,682,415 75.41

Total 1,006 100.00 1,456,995,471 100.00

LIST OF THIRTY (30) LARGEST SECURITIES ACCOUNT HOLDERS AS PER THE RECORD OF DEPOSITORS

NO. NAME OF SHAREHOLDER NO. OF SHARES HELD % OF ISSUED SHARE CAPITAL

1 Regent Wise Investments Limited 439,809,059 30.19

2 Regent Wise Investments Limited 295,277,782 20.27

3 CIMSEC Nominees (Asing) Sdn Bhd - Pledged Securities Account for Regent Wise Investments Limited

230,115,574 15.79

4 Urusharta Jamaah Sdn Bhd 133,480,000 9.16

5 Goh Meng Keong 70,537,755 4.84

6 CIMSEC Nominees (Tempatan) Sdn Bhd - CIMB Bank for Tan Sri Dato’ Sri Goh Ming Choon (PBCL-0G0264)

66,700,000 4.58

7 Citigroup Nominees (Tempatan) Sdn Bhd - Exempt An for AIA Bhd.

48,967,100 3.36

8 Maybank Nominees (Tempatan) Sdn Bhd - Pledged securities account for Dato’ Sri Tong Seech Wi

42,776,425 2.94

9 Kumpulan Wang Persaraan (Diperbadankan) 36,645,700 2.52

10 CIMSEC Nominees (Tempatan) Sdn Bhd - CIMB for Ng Lee Ling (PB)

25,032,900 1.72

11 CIMSEC Nominees (Tempatan) Sdn Bhd - CIMB for Tan Sri Dato’ Sri Goh Ming Choon (PB)

18,639,790 1.28

12 Linbaq Holding Sdn Bhd 11,666,667 0.80

13 CIMSEC Nominees (Tempatan) Sdn Bhd - CIMB Bank for Rickoh Corporation Sdn Bhd (MY0507)

7,134,000 0.49

14 Alliancegroup Nominees (Tempatan) Sdn Bhd - Pledged securities account for Koh Kin Lip (7003423)

7,125,000 0.49

15 CIMSEC Nominees (Tempatan) Sdn Bhd - CIMB Bank for Lai Ming Chun @ Lai Poh Lin (PB)

3,701,000 0.25

16 Tan Siew Ching 3,069,400 0.21

17 WHC Capital Sdn. Bhd. 1,562,000 0.11

18 HSBC Nominees (Asing) Sdn Bhd - JP Morgan Securities Plc

1,208,900 0.08

110


ANALYSIS OF SHAREHOLDINGS (Contd.)

LIST OF THIRTY (30) LARGEST SECURITIES ACCOUNT HOLDERS AS PER THE RECORD OF DEPOSITORS (Contd.)

NO. NAME OF SHAREHOLDER NO. OF SHARES HELD % OF ISSUED SHARE CAPITAL

19 Citigroup Nominees (Tempatan) Sdn Bhd - Exempt An for AIA Public Takaful Bhd.

1,174,700 0.08

20 Leong Yee Keong 1,000,000 0.07

21 Tan Pei Geok 1,000,000 0.07

22 Toh Chee Ming 390,000 0.03

23 Datuk Lim Kok Boon 372,625 0.03

24 Yeoh Soo Ann 349,550 0.02

25 Lim Chong Hoe 300,000 0.02

26 Elvin A/L Berty Luke Fernandez 250,000 0.02

27 TA Nominees (Tempatan) Sdn Bhd - Pledged securities account for Foo Yin Kang

250,000 0.02

28 Dato’ Jessie Yow Yoon Khoon 243,000 0.02

29 Beh Eng Par 232,000 0.02

30 Lim Thuang Boo 230,200 0.02

1,449,241,127 99.50

SUBSTANTIAL SHAREHOLDERS AS PER THE REGISTER OF SUBSTANTIAL SHAREHOLDERS

NO. NAME OF SUBSTANTIAL SHAREHOLDERS NO. OF SHARES HELD

DIRECT INTEREST % INDIRECT INTEREST %

1 Regent Wise Investments Limited 965,202,415 66.246 - -

2 Ayala Land, Inc. (1) - - 965,202,415 66.246

3 Urusharta Jamaah Sdn. Bhd. 133,480,000 9.161 - -

4 Tan Sri Dato’ Sri Goh Ming Choon 85,339,790 5.857 - -

Note: (1) Deemed interested in the shares held by Regent Wise Investments Limited pursuant to Section 8(4) of the Companies Act, 2016.

DIRECTORS’ SHAREHOLDINGS AS PER THE REGISTER OF DIRECTORS’ SHAREHOLDINGS

NO. NAME OF DIRECTORSDIRECT INTEREST INDIRECT INTEREST

NO. OF SHARES % OF SHARES NO. OF SHARES % OF SHARES

1 Tan Sri Dato’ Sri Abi Musa Asa’ari Bin Mohamed Nor - - - -

2 Tan Sri Dato’ Hj. Abd Karim Bin Shaikh Munisar - - - -

3 Bernard Vincent Olmedo Dy - - - -

4 Anna Maria Margarita Bautista Dy - - - -

5 Lao Chok Keang - - - -

6 Apollo Bello Tanco - - - -

7 Ma. Luisa Dioquino Chiong - - - -

8 Teh Heng Chong - - - -

AGENDA

AS ORDINARY BUSINESS1. To receive the Audited Financial Statements for the financial period ended

31 December 2018 together with the Directors’ and Auditors’ Reports thereon.

2. To approve the payment of Directors’ fees of RM210,717.81 for the financial period ended 31 December 2018.

3. To re-elect the following Directors, each of whom retires by rotation in accordance with Article 81 of the Constitution of the Company and whom, being eligible, have offered themselves for re-election:

3.1 Tan Sri Dato’ Sri Abi Musa Asa’ari Bin Mohamed Nor 3.2 Tan Sri Dato’ Hj. Abd Karim Bin Shaikh Munisar

4. To re-elect the following Directors, each of whom retires by rotation in accordance with Article 88 of the Constitution of the Company and whom, being eligible, have offered themselves for re-election:

4.1 Mr. Apollo Bello Tanco 4.2 Ms. Ma. Luisa Dioquino Chiong 4.3 Mr. Teh Heng Chong

5. To appoint Messrs. Ernst & Young as Auditors of the Company for the financial year ending 31 December 2019 in place of the retiring Auditors, Messrs. Deloitte PLT and to authorise the Directors to determine their remuneration.

AS SPECIAL BUSINESSTo consider and, if thought fit, to pass the following resolutions with or without modifications:

(Please refer to explanatory Note 1)

(Resolution 1)

(Resolution 2)(Resolution 3)

(Resolution 4)(Resolution 5)(Resolution 6)

(Resolution 7)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Tenth (“10th”) Annual General Meeting (“AGM”) of the Company will be held at Sheraton 6-7, Level 3C, Sheraton Petaling Jaya Hotel, Jalan Utara C, 46200 Petaling Jaya, Selangor Darul Ehsan on Wednesday, 26 June 2019 at 10:30 a.m. for the following purposes:

Other Information112


(Resolution 8)

(Resolution 9)

(Resolution 10)

NOTICE OF ANNUAL GENERAL MEETING (Contd.)

AS SPECIAL BUSINESS (Contd.)

To consider and, if thought fit, to pass the following resolutions with or without modifications:6. Ordinary Resolution 1 -

Payment of Benefits Payable (excluding Directors’ Fee) to the Directors pursuant Section 230 of the Companies Act, 2016

“THAT the payment of benefits (excluding Directors’ Fee) of up to RM200,000.00 payable to the Directors pursuant to Section 230 of the Companies Act, 2016 for the period from 27 June 2019 until the conclusion of the next Annual General Meeting of the Company to be held in year 2020 be and is hereby approved.”

7. Ordinary Resolution 2 - Authority to allot shares pursuant to Sections 75 and 76 of the Companies Act, 2016

“THAT subject always to the Companies Act, 2016, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Malaysia”), the Company’s Constitution and the approval of the relevant government/regulatory authorities, the Directors be and are hereby authorised and empowered pursuant to Sections 75 and 76 of the Companies Act, 2016 to issue and allot new shares in the Company at any time at such price, upon such terms and conditions, for such purposes and to such person(s) whomsoever as the Directors may in their absolute discretion, deem fit and expedient in the interest of the Company, provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten per cent (10%) of the total number of issued shares of the Company for the time being. THAT the Directors be and are also empowered to obtain the approval from Bursa Malaysia for the listing of and quotation for the additional shares so issued AND THAT such authority shall commence immediately upon the passing of this Resolution and continue to be in force until the conclusion of the next AGM of the Company.”

8. Special Resolution – Proposed Adoption of New Constitution “THAT approval be and is hereby given to revoke the existing Constitution of the Company with immediate effect and in place thereof, the proposed new Constitution of the Company as set out in Appendix A be and is hereby adopted as the Constitution of the Company. AND THAT the Directors of the Company be and are hereby authorised to assent to any modifications, variations and/ or amendments as may be required by the relevant authorities and to do all acts and things and take all such steps as may be considered necessary to give full effect to the foregoing.”

NOTES1. For the purpose of determining a member who shall be entitled to attend, speak and vote at this 10th AGM, the Company shall be requesting

Bursa Malaysia Depository Sdn. Bhd. in accordance with Article 58(b) of the Company’s Constitution and Section 34(1) of the Securities Industry (Central Depositories) Act 1991, to issue a General Meeting Record of Depositors as at 20 June 2019. Only a depositor whose name appears on the Record of Depositors as at 20 June 2019 shall be eligible to attend, speak and vote at the Meeting or appoint proxies to attend, speak and vote on his/her behalf.

2. Subject to note 5 below, a member is entitled to attend and vote at a meeting of the Company and is entitled to appoint not more than two (2) proxies to attend and vote in his stead in respect of each securities account he holds with ordinary shares of the Company standing to the credit of the said securities account.

3. A proxy may but need not be a member of the Company and there shall be no restriction as to the qualification of the proxy. Where a member appoints more than one (1) proxy, the appointments shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.

4. The form of proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing. In the case of a corporate member, the instrument appointing a proxy must be either under its common seal or under the hand of its officer or attorney duly authorised.

5. A member who is an Authorised Nominee may appoint 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 account. Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositors) Act 1991 which hold ordinary shares in the Company for multiple beneficial owner in one (1) securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

6. The instrument appointing a proxy must be deposited at the Company’s Registered Office at Level 2, Tower 1, Avenue 5, Bangsar South City, 59200 Kuala Lumpur, Wilayah Persekutuan not less than twenty-four (24) hours before the time set for holding the meeting or any adjournment thereof as Paragraph 8.29(A) of the Main Market Listing Requirements of Bursa Malaysia requires all resolutions set out in the Notice of General Meeting to be put to vote by poll.

7. PERSONAL DATA PRIVACY: By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the AGM and/or any adjournment thereof, a member of the Company (i) consents to the collection, use and disclosure of the member’s personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its agents) of proxies and representatives appointed for the AGM (including any adjournment thereof), and the preparation and compilation of the attendance lists, minutes and other documents relating to the AGM (including any adjournment thereof), and in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”); (ii) warrants that where the member discloses the personal data of the member’s proxy(ies) and/or representative(s) to the Company (or its agents), the member has obtained the prior consent of such proxy(ies) and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/or representative(s) for the Purposes; and (iii) agrees that the member will indemnify the Company in respect of any penalties, liabilities, claims, demands, losses and damages as a result of the member’s breach of warranty.


Other Information

AS SPECIAL BUSINESS (Contd.)

9. To transact any other business of the Company of which due notices shall be given in accordance with the Constitution of the Company and the Companies Act, 2016

BY ORDER OF THE BOARD

WONG YOUN KIM (MAICSA 7018778)LIEW FUI LI (MAICSA 7051052)Company Secretaries

Kuala Lumpur30 April 2019

114



EXPLANATORY NOTE 1:This agenda item is meant for discussion only as the provision of Section 340(1)(a) of the Companies Act, 2016 requires the Audited Financial Statements for the financial period ended 31 December 2018 together with the Directors’ and Auditors’ Reports thereon to be laid at the AGM. As such, this agenda item does not require members’ approval and hence, is not put forward for voting.

EXPLANATORY NOTES ON SPECIAL BUSINESS:Ordinary Resolution 1 - Payment of Benefits Payable (excluding Directors’ Fee) to the Directors pursuant to Section 230 of the Companies Act, 2016

The proposed resolution 8 relates to the Directors’ benefits payable (excluding Directors’ Fee) of up to RM200,000.00 comprising meeting allowances based on the number of scheduled and unscheduled Board and Board Committee Meetings as and when required to be held for the period from 27 June 2019 until the next Annual General Meeting of the Company including benefits-in-kind and assuming that all Non-Executive Directors will hold office until the conclusion of the next AGM.

Ordinary Resolution 2 – Authority to allot shares pursuant to Sections 75 and 76 of the Companies Act, 2016

The proposed resolution 9, if approved, will empower the Directors of the Company, from the date of the 10th AGM, authority to issue and allot shares in the Company up to an aggregate amount not exceeding ten per cent (10%) of the total number of issued shares of the Company for such purposes as the Directors consider would be in the interest of the Company. This authority unless revoked or varied at a general meeting will expire at the next AGM of the Company.

This mandate is as renewal of the mandate granted by the members at the last AGM held on 28 November 2018. As at the date of the Notice of AGM, the mandate granted at the last AGM was not utilised by the Company and thus, no proceeds were raised.

This authority will provide flexibility and to avoid delay and cost in convening general meetings to approve such issuance of shares for fund raising activities, including but not limited to further placement of shares for purposes of funding future investment project(s), working capital and/or acquisition(s).

Special Resolution – Proposed Adoption of New Constitution

The proposed resolution 10, if passed, will align the Constitution of the Company with the Companies Act, 2016 which came into force on 31 January 2017, the updated provisions of the Main Market Listing Requirements of Bursa Malaysia and the prevailing statutory and regulatory requirements as well as to provide clarity and consistency with the amendments that arise from the Companies Act, 2016 and Main Market Listing Requirements of Bursa Malaysia.

STATEMENT ACCOMPANYING NOTICE OF 10TH AGM:NAMES OF DIRECTORS STANDING FOR RE-ELECTION

1. Resolutions 2 and 3 - Re-election of Directors The Directors who are retiring pursuant to Article 81 of the Constitution of the Company and seeking

for re-election at the forthcoming 10th AGM are as follows:

(a) Tan Sri Dato’ Sri Abi Musa Asa’ari Bin Mohamed Nor; and (b) Tan Sri Dato’ Hj. Abd Karim Bin Shaikh Munisar.

2. Resolutions 4, 5 and 6 - Re-election of Directors The Directors who are retiring pursuant to Article 88 of the Constitution of the Company and seeking

for re-election at the forthcoming 10th AGM are as follows:

(a) Mr. Apollo Bello Tanco; (b) Ms. Ma. Luisa Dioquino Chiong; and (c) Mr. Teh Heng Chong.

Details of the above Directors are set out in the Directors’ Profile section and their shareholdings in the Company, where applicable, are set out in the Analysis of Shareholdings section appearing on pages 48 to 55 and 110 to 111 of the Company’s Annual Report respectively.


Other Information116

I/We (FULL NAME IN CAPITAL LETTERS) ................................................................................................................................................................................................

NRIC No./Passport No./Company No. .................................................................................................... of ........................................................................

(FULL ADDRESS)............................................................................................................................................................................................................................

being a Member/Members of MCT BERHAD hereby appoint (FULL NAME) .........................................................................................................................................

NRIC No./Passport No........................................................................................................................... of ............................................................................

or failing whom (FULL NAME), ......................................................................................................................................................................................................

NRIC No./Passport No........................................................................................................................... of ........................................................................

(FULL ADDRESS)............................................................................................................................................................................................................................

or failing whom THE CHAIRMAN OF THE MEETING as my/our proxy to vote for me/us on my/our behalf at the Tenth (10th) Annual General Meeting of the Company

(“AGM”) to be held at Sheraton 6-7, Level 3C, Sheraton Petaling Jaya Hotel, Jalan Utara C, 46200 Petaling Jaya, Selangor Darul Ehsan on Wednesday, 26 June 2019

at 10:30 a.m. and, at any adjournment thereof for/against *the resolution(s) to be proposed thereat.

RESOLUTIONS FOR AGAINST

ORDINARY BUSINESSResolution 1 To approve the payment of Directors’ fees of RM210,717.81 to the Non-Executive Directors for the financial

period ended 31 December 2018.

Resolution 2 To re-elect Tan Sri Dato’ Sri Abi Musa Asa’ari Bin Mohamed Nor as a Director of the Company.

Resolution 3 To re-elect Tan Sri Dato’ Hj. Abd Karim Bin Shaikh Munisar as a Director of the Company.

Resolution 4 To re-elect Mr. Apollo Bello Tanco as a Director of the Company.

Resolution 5 To re-elect Ms. Ma. Luisa Dioquino Chiong as a Director of the Company.

Resolution 6 To re-elect Mr. Teh Heng Chong as a Director of the Company.

Resolution 7 To appoint Messrs. Ernst & Young as Auditors of the Company for the financial year ending 31 December 2019 in place of the retiring Auditors, Messrs. Deloitte PLT and to authorise the Directors to determine their remuneration.

SPECIAL BUSINESSResolution 8 Ordinary Resolution 1:

To approve the payment of benefits (excluding Directors’ Fee) of up to RM200,000.00 payable to the Directors pursuant to Section 230 of the Companies Act, 2016 for the period from 27 June 2019 until the conclusion of the next Annual General Meeting of the Company to be held in year 2020.

Resolution 9 Ordinary Resolution 2:To authorise the Directors to issue shares pursuant to Sections 75 and 76 of the Companies Act, 2016.

Resolution 10 Special Resolution:To approve the proposed adoption of new Constitution of the Company.

(Please indicate with an “X” in the space provided above on how you wish your vote to be cast. If no specific instruction as to voting is given, the proxy shall vote or abstain from voting at his/her discretion.)

For appointment of 2 proxies, the percentage of shareholdings to be represented by the proxies:

NO. OF SHARES PERCENTAGE

1st Proxy %

2nd Proxy %

Total: 100%

As witness my/our hand(s) this.................................... day of ..................................... 2019.

MCT BERHAD (881786-X)(Incorporated in Malaysia)

FORM OF PROXY No. of ordinary shares held

CDS Account No.

Notes:

1. For the purpose of determining a member who shall be entitled to attend, speak and vote at this 10th AGM, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd. in accordance with Article 58(b) of the Company’s Constitution and Section 34(1) of the Securities Industry (Central Depositories) Act 1991, to issue a General Meeting Record of Depositors as at 20 June 2019. Only a depositor whose name appears on the Record of Depositors as at 20 June 2019 shall be eligible to attend, speak and vote at the Meeting or appoint proxies to attend, speak and vote on his/her behalf.

2. Subject to note 5 below, a member is entitled to attend and vote at a meeting of the Company and is entitled to appoint not more than two (2) proxies to attend and vote in his

stead in respect of each securities account he holds with ordinary shares of the Company standing to the credit of the said securities account.

3. A proxy may but need not be a member of the Company and there shall be no restriction as to the qualification of the proxy. Where a member appoints more than one (1) proxy, the appointments shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.

4. The form of proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing. In the case of a corporate member, the instrument appointing a proxy must be either under its common seal or under the hand of its officer or attorney duly authorised.

5. A member who is an Authorised Nominee may appoint 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 account. Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositors) Act 1991 which hold ordinary shares in the Company for multiple beneficial owner in one (1) securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

6. The instrument appointing a proxy must be deposited at the Company’s Registered Office at Level 2, Tower 1, Avenue 5, Bangsar South City, 59200 Kuala Lumpur, Wilayah Persekutuan not less than twenty-four (24) hours before the time set for holding the meeting or any adjournment thereof as Paragraph 8.29(A) of the Main Market Listing Requirements of Bursa Malaysia requires all resolutions set out in the Notice of General Meeting to be put to vote by poll.

7. PERSONAL DATA PRIVACY: By submitting an instrument appointing a proxy(ies) and/or representative(s), the members accept and agree to the Personal Data Privacy terms set out in the Notice of AGM dated

30 April 2019.

.…………………………………..........................

Signature(s) / Common Seal of Member(s)


THE COMPANY SECRETARIES MCT BERHAD (881786-X) LEVEL 2, TOWER 1, AVENUE 5, BANGSAR SOUTH CITY, 59200 KUALA LUMPUR, WILAYAH PERSEKUTUAN

1st Fold here

Then fold here

Fold this flap for sealing

AFFIXSTAMP


MCT BERHADGround Floor, MCT Tower, One City, Jalan USJ 25/1

47650 Subang Jaya, Selangor Darul Ehsan, Malaysia.

Tel: +603-5115 9988 Fax: +603-5115 9995

annual report for the financial period ended 31 december 2018 · blood donation campaign 14th...

Documents