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VISION MISSIONTo Become the Preferred Assets and

Facilities Management

Solutions Provider

Synergising Property and Land

Development, Integrated Facilities

Management and Project Management

Consultancy Services towards Innovative

and Effective Solutions

Flexible with Integrity Transparent with Clarity United with Synergy

CORE VALUES

cove

r ra

tiona

le

In the year 2019, we have made concerted effort to enhance

business processes and operations throughout the Group.

While we are proud to be where we are today, we acknowledge

that there is still more to be done.

Driven by a winning mindset and a disciplined approach in

achieving operational excellence, DBhd will continue to

embrace the concept of Industry 4.0 while we expand our

horizon towards a sustainable future.

The Twenty NineteenC O N T E N T S

03CORPORATE GOVERNANCE

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Corporate Governance Overview Statement 64

Audit Committee Report 67

Statement on Risk Management and Internal Control 71

Statement on Directors’ Responsibility 77

Recurrent Related Party Transactions 78

Additional Compliance Information 79

Chairman’s Statement 42

ManagementDiscussion & Analysis 46

Sustainability Statement 53

02CORPORATE STATEMENTS

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APT

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Corporate Information 10

Corporate Structure 11

Group Financial Highlights 12

Awards and Recognition 2019 14

Media Milestones 15

Key Highlights 16

Board of Directors’ Profile 20

Key Senior Managements’ Profile 27

Group Management 38

01THECOMPANY

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2019C O N T E N T S

List of Properties held by the Group 163

Shareholdings Statistics 165

Shareholdings Statistics - Warrant 168

Notice of Annual General Meeting 171

Statement Accompanying the Notice of Annual General Meeting 176

Proxy Form

05OTHERINFORMATION

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APT

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Directors’ Report 82

Statement by Directors 86

Statutory Declaration 86

Independent Auditors’ Report 87

Statement of Comprehensive Income 92

Statement of Financial Position 93

Statement of Changes in Equity 95

Statement of Cash Flows 98

Notes to the Financial Statements 100

04FINANCIALSTATEMENTS

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/58thAnnual General Meeting ofDamansara Realty Berhad

Grand Ballroom, Level 1 Forest City Phoenix International Golf HotelJalan Persiaran 5, Forest City Golf Resort81550 Gelang Patah, Johor, Malaysia

11:30 a.m.

26 August 2020 Wednesday

DBhd has committed time and resources to adopt various solutions in becoming a technology-driven company. Despite the continuous challenges we face in the market and economic environment, DBhd saw an increase in Net Profit by 16.6% to RM22.79 million compared to last year’s performance

We are determined to deliver maximum value to all our stakeholders whilst building on the skills and capacity of our employees

95% Combined

Take-up Ratefor Aliff Square 1 & 2

Net Profit RM22.79

million

>RM210,000 Revenue

per staff

+RM40.7million

EBITDAVS 2018

GlanceAt a

06

Profit Before TaxRM25.59

million

PROF

ITABIL

ITY

SERV

ICES

>35 Years Experience

in constructionmanagement, project

planning, and consultantmanagement

28Service Offerings

across various industries

OUR

PRES

ENCE

Malaysia

Singapore

Philippines

Papua New Guinea

EMPL

OYEE

S

1,379 Permanent and

Contractemployees

303 Executives

856Non-Executives

07

VALU

E

RM3.5 billion

worth of propertydevelopment projects

>55,000 Parking Bays

operated

>500 Acres

undevelopedlandbank In Kuantan

and Johor Bahru

>RM290 million

worth of annual revenue

1,544 room accommodation

facility at the HIVE in RAPID Pengerang, Johor

Operating and Maintaining a

01 THE COMPANY

Corporate Information 10

Corporate Structure 11

Group Financial Highlights 12

Awards and Recognition 2019 14

Media Milestones 15

Key Highlights 16

Board of Directors’ Profile 20

Key Senior Managements’ Profile 27

Group Management 38

ENHANCING CAPABILITIES, POISED FOR THE FUTUREThe ability to adapt and evolve through a changing marketplace will ensure our resiliency to sustain our foothold in the industry. We are focuSsed on combining our vast expertise and diverse strength to build scalable capabilities throughout the organisation

DAMANSARA REALTY BERHADA N N U A L R E P O R T 2 0 1 9

10

Corporate Information & Structure

RISK MANAGEMENT COMMITTEEDATO’ MOHD AISOM BIN OMAR(Chairman)

SHAHRIZAM BIN A SHUKOR(Member)

VINIE CHONG PUI LING (Member)

COMPANY SECRETARYWAN RAZMAH BINTI WAN ABD RAHMAN(MAICSA 7021383) (SSM Practising Certificate No. 202008002111)

REGISTERED OFFICELot 10.3, Level 10 Wisma Chase Perdana Off Jalan Semantan Damansara Heights50490 Kuala Lumpur

T : 03 - 20812688F : 03 - 20812690E : [email protected]

SHARE REGISTRARTRICOR INVESTOR & ISSUING HOUSE SERVICES SDN. BHD.[197101000970 (11324-H)]

Unit 32-01, Level 32, Tower A Vertical Business SuiteAvenue 3, Bangsar SouthNo. 8 Jalan Kerinchi59200 Kuala Lumpur

T : 03 - 27839299F : 03 - 27839222E : [email protected]

STOCK EXCHANGE LISTINGMAIN MARKET OF BURSA MALAYSIA SECURITIES BERHADStock Code : 3484Stock Name : DBHD

AUDITORS MESSRS. JAMAL, AMIN & PARTNERS(AF 1067) No. 60-2B, 2nd Floor, Jalan 2/23A Off Jalan Genting KlangTaman Danau KotaSetapak53300 Kuala LumpurT : 03 - 41421626 F : 03 - 41421601E : [email protected]

PRINCIPAL BANKERCIMB BANK BERHAD

WEBSITE ADDRESSwww.dbhd.com.my

BOARD OF DIRECTORSDATO’ AHMAD ZAHRI BIN JAMILIndependent Non-Executive Chairman

HAJI ABDULLAH BIN MD YUSOFExecutive Vice Chairman

AZHARI BIN ABDUL HAMIDGroup Executive Director

DATO’ MOHD AISOM BIN OMARIndependent Non-Executive Director

SHAHRIZAM BIN A SHUKORIndependent Non-Executive Director

VINIE CHONG PUI LINGIndependent Non-Executive Director

AUDIT COMMITTEESHAHRIZAM BIN A SHUKOR(Chairman)

DATO’ MOHD AISOM BIN OMAR(Member)


NOMINATION & REMUNERATION COMMITTEEDATO’ AHMAD ZAHRI BIN JAMIL(Chairman)

DATO’ MOHD AISOM BIN OMAR(Member)


100%

45%• HealthcareTechnical Services (PNG) Limited

30%• DACPropertiesSdn.Bhd.

* Under members’ voluntary liquidation

** Struck off

• DamansaraTechnologySdn.Bhd.• DamansaraGalaxySdn.Bhd.• DamansaraRealty( Johor)Sdn.Bhd.• DamansaraRealty(Terengganu)Sdn.Bhd.• DamansaraRealty(NegeriSembilan)

Sdn. Bhd. (formerly known as Kesang Construction & Engineering Sdn. Bhd.)

• DamansaraProspectsSdn.Bhd.• DamansaraRealtyConstruction

Sdn. Bhd. **• DamansaraRealtyLandSdn.Bhd.**• DamansaraRealtyManagement

(Timber Operations) Sdn. Bhd.• DamansaraRealtyManagement

Services Sdn. Bhd.• DamansaraRealtyPropertiesSdn.Bhd.**• DamansaraPulseSdn.Bhd.

(formerly known as Damansara Urban Sdn. Bhd.)

• DACLandSdn.Bhd.

• DamansaraPMCServicesSdn.Bhd.• HartaFacilitiesManagementSdn.Bhd.• JOLSConstructionSdn.Bhd.• KesangEquipmentHireSdn.Bhd.**• KesangIndustriesSdn.Bhd.*• KesangPropertiesSdn.Bhd.• KesangTradingSdn.Bhd.• MetroEquipmentSystems(M)Sdn.Bhd.*• MetroParking(M)Sdn.Bhd.• MetroParking(Sabah)Sdn.Bhd.• SmartParkingManagement

Systems Sdn. Bhd.• TebingAurSdn.Bhd. • TMRACMVServicesSdn.Bhd.• TMRKollSdn.Bhd.• M.N.Koll(M)Sdn.Bhd.• TMRUrusharta(M)Sdn.Bhd.

95%• Kesang Kastory Enterprise

Sdn. Bhd.

70%• KesangQuarrySdn.Bhd.• TMRLCServicesSdn.Bhd.

85%• HCDuracleanSdn.Bhd.

55%• PedasQuarrySdn.Bhd.

80%• DamansaraRealty (Pahang) Sdn. Bhd.

51%• DHealthcareCentreSdn.Bhd.

SUBSIDIARIES

ASSOCIATEDCOMPANIES

WHOLLY-OWNED SUBSIDIARIES

DAMANSARA REALTY BERHADCORPORATE STRUCTURE

100%• MetroParking(B)Sdn.Bhd.• MetroParkingServices(India)

Pvt. Ltd. ** • MetroParkingManagement

(Philippines), Inc.• HTSInternationalLtd.

70%• MetroParking(S)Pte.Ltd.

55%• MetroParking(HK)Limited**Overseas

Companies

CorporateInformation

Corporate Structure

Group Financial Highlights

Awards and Recognitions 2019

THECOMPANY

11


12


2017RM’000

2018RM’000

2019RM’000

Revenue 249,742 304,125 293,459

Profit Before Tax 19,128 26,116 25,592

Net Profit 17,857 19,541 22,794

Share Capital 155,341 159,341 159,341

Shareholders Fund 147,403 170,178 188,983

Group Earning Per Share (Sen) 5.48 6.01 7.25

Net Asset Per Share (Sen) 50.17 54.91 60.73

Total Assets 316,726 332,961 423,467

Net Assets 155,719 174,829 193,350

Total No. of Shares 310,371 318,371 318,371

19,12

8

249,7

42

26,11

6

304,

125

25,5

92

293,4

59

Revenue (RM’000) ProfitBefore Tax (RM’000)

NetProfit (RM’000)

20192019 20182018 20172017

17,8

57 19,5

41

22,79

4

201920182017

CorporateInformation

Corporate Structure


Awards and Recognition 2019

THECOMPANY

13

ShareholdersFund (RM’000)

Net Assets (RM’000)

2017

2017

2018

2018

2019

2019

147,4

0315

5,719

170,

178

174,

829

188,9

8319

3,35

0

Group Earnings Per Share(Sen)

Net Assets Per Share (Sen)

2017

2017

2018

2018

2019

2019

5.48

50.17

6.01

54.9

1

7.25

60.73


Awards & Recognition 2019

10 FOCUSED RECOGNITIONAWARDS BY

PETRONAS

FOCUSEDRECOGNITION

PETRONAS Cultural Beliefs

With appreciation fromPETRONAS Refinery & Petrochemical Corporation

FOCUSEDRECOGNITION



FOCUSEDRECOGNITION



FOCUSEDRECOGNITION



FOCUSEDRECOGNITION



FOCUSEDRECOGNITION



FOCUSEDRECOGNITION



FOCUSEDRECOGNITION



FOCUSEDRECOGNITION



FOCUSEDRECOGNITION



14

Awards & Recognition 2019Media Milestones


MediaMilestones

KeyHighlights

Board ofDirectors’ Profile

THECOMPANY

15

Key Highlights


JAN2019

FEB2019

MAR2019

APR2019

MAY2019

• MetroInformationSystem(MIS)Teamwonthe Grand Prize of FPX and Win Campaign worth RM20,000

• ThelaunchofDBhdStaffapp

• DBhdGroupTownHall01/2019• MetroParkingMalaysiasecureda new contract with Menara UMW

• HCDuracleansecuredanewcontracton general cleaning services and washroom hygiene products at Phase 2C Annexes Building, Bangunan Dato’ Jaafar Muhammad (BDJM)• GroupLegalDivisionandGroupContractAdvisory&Risk

Management Division won the Construction and Heavy Industries In-House Team of the Year at Asian Legal Business (ALB) Malaysia Law Awards 2019 and was also shortlisted in ALB South East Asia Law Awards 2019 and In-House Community Counsels of the Year Awards 2019

• ParticipatedintheMalaysiaInternationalHalalShowcase2019atMITEC

• TMRUrushartasecuredanewcontractfromMalaysiaAirports Sepang Sdn. Bhd. on cleaning and related services at Kuala Lumpur International Airport worth over RM990,000 • DBhdGroupBowlingChallenge2019teambuildingactivity• ElmanbinMustafaElBakricertifiedasaProfessionalTechnologist

(Ts.) at Damansara Realty Berhad by the Malaysia Board of Technologists (MBOT)

• DBhdTheBiggestLoserCompetitionteambuildingactivity• EstablishmentoftheGroupContractAdvisory& Risk Management Division• EstablishmentofDamansaraTechnologySdn.Bhd.• TMRUrushartabaggedanewcontractfromMalaysiaMarine & Heavy Engineering for site toilet cleaning at MMHE Yard, Pasir Gudang, Johor

16


MediaMilestones

KeyHighlights

Board ofDirectors’ Profile

THECOMPANY

SEP2019

OCT2019

NOV2019

JUN2019

JUL2019

AUG2019

DEC2019

• HCDuracleanreceivedacontractextensionfor Cleaning Services at Health Department of Federal Territory Kuala Lumpur & Putrajaya worth over RM7 million• DBhdCulinaireMalaysia2019Competitionteam

building activity

• DBhdGroupTownHall02/2019• GroupTownHallSingapore• ThankYourCleanerDay2019by

Kärcher Malaysia

• Securedamixeddevelopmentprojectin Sendayan, Negeri Sembilan with Menteri Besar Negeri Sembilan Inc worth more than RM770 million GDV • DBhdMelakaCulinaryChallenge2019

team building activity • DBhdGroupAnnualRayaDinner2019• MetroParkingsecuredanew contract with Stadthuys, Malacca • MetroParkingPhilippines

awarded a contract to construct & manage Steel Deck Parking Facility and the Renewal of Parking Contracts in Southern Manila, Philippines worth RM62 million

• TMRUrushartareceivedacontractextensionfor security management services at RAPID, Pengerang worth over RM3 million • DBhdGroupBadmintonChallenge2019team

building activity

• TheGroundbreakingCeremonyandthe Launch of Business Boulevard @ Central Park, Johor Bahru• MetroParkingSingaporesecuredanew contract to operate at the basement carpark at Anchorpoint Shopping Centre, Singapore

• GroupTownHallPhilippines• GroupStrategyRetreat• DBhdawardedtheMBOTMost

Supportive Industry Award

17


Board of Directors

HAJI ABDULLAH BIN MD YUSOF

Executive Vice Chairman

DATO’ AHMAD ZAHRI BIN JAMIL

Chairman Independent Non-Executive

AZHARI BIN ABDULHAMID

GroupExecutive Director

18

Board of Directors’ Profile

Key Senior Managements’ Profile

Group Management

THECOMPANY

SHAHRIZAMBIN A SHUKOR

Independent Non-Executive Director

VINIE CHONGPUI LING


WAN RAZMAH BINTI WAN ABD RAHMAN

Company Secretary

DATO’ MOHD AISOM BIN OMAR


19


20


DATO’ AHMAD ZAHRI BIN JAMILIndependent Non-Executive Chairman

Board Committee Memberships• NominationandRemunerationCommittee(Chairman)• TenderCommittee(Chairman)

Academic / Professional Qualification:Bachelor of Arts (History), University of Malaya, Malaysia

Date of Appointment / Working Experience:Dato’ Ahmad Zahri was appointed to the Board of DBhd as an Independent Non-Executive Chairman on 22 August 2014. Prior to this, he was a Director of Johor Corporation ( JCorp) from 2009 to 2013 and served as a Director of Yayasan Pelajaran Johor from 2004 to 2013. He was also the Chairman of the Executive Committee for Housing, Local Government and Public Amenities of the State of Johor from 2008 to 2013. He was also the State Assemblyman of Sri Medan and Parit Sulong, in Batu Pahat, Johor from 1999 to 2013.

He started his career in the Johor Civil Service by holding a post at the Batu Pahat Land Office from 1973 to 1974. He later progressed to the Segamat Land Office from 1974 until 1977. From 1977 to 1982, he served at the Office of the Commissioner of Land and Mines, Johor. Thereafter, he was the Private Secretary to the then Menteri Besar of Johor from 1982 to 1986, and subsequently, he was appointed as the Political Secretary at the Prime Minister Office from 1986 to 1987.

Directorship(s):Listed Companies: NilOther Public Companies: Nil

Family relationship with any director and/or major shareholder: Nil

Interest in the Company:He holds 20,000 units of ordinary shares in DBhd

Board Meeting Attendance in 2019:He attended four (4) out of five (5) Board Meetings held in FY2019

Length of Service: 5 years 7 months (as at 30 April 2020)

Date of Last Re-election: 24 May 2017

Convictions for Offences within Past Five (5) Years: Nil

DATO’ AHMAD ZAHRI BIN JAMIL

Age : 71 Gender : Male

Malaysian

21


Board Committee Membership:• TenderCommittee

Academic / Professional Qualification:• BachelorofArtsinHistory(Hons),UniversityofMalaya,Malaysia

Date of Appointment / Working Experience:Haji Abdullah was appointed to the Board of DBhd on 6 June 2014 until his re-designation as an Executive Vice Chairman on 18 March 2020. As the Executive Vice Chairman of the Group, Haji Abdullah oversees, direct and monitors the operations and strategic directions of the Group.

He is the Chairman of Polytax and Accounting Services, a company which provides Company Secretarial and Business Consultancy services since 2004. He also served as a Member of Majlis Bandaraya, Johor Bahru from year 2007 to 2014, and reappointed in year 2016 up to 2018.

In 2015, he was appointed as the Executive Chairman of Pandan Uptown Sdn. Bhd. He has been actively involved in community service as the Ketua Penerangan Majlis / Vice President Gabungan NGO Melayu Negeri Johor (GABUNG) and as Yang DiPertua (YDP) Persatuan Penjaja, Peniaga dan Pengusaha Industri Kecil Melayu, Johor Bahru since year 2002 and 2011, respectively.



Interest in the Company: Nil

Board Meeting Attendance in 2019:He attended all five (5) Board Meetings held in the FY2019


Date of Last Re-election: 19 June 2019


HAJI ABDULLAH BIN MD YUSOF


Malaysian



Group Management

THECOMPANY


22


Board Committee Membership:• TenderCommittee

Academic / Professional Qualification:• BachelorofEconomics(Hons),UniversityofMalaya,Malaysia• BritishInstituteofCleaningScience,UnitedKingdom

Date of Appointment / Working Experience:Azhari was appointed as the Group Executive Director of DBhd on 2 July 2018. Prior to that he was the Managing Director of HC Duraclean Sdn. Bhd. (HCD), a subsidiary of DBhd from 1998 to July 2018.

He began his career with JCorp since 1989 and was appointed to several key positions in JCorp and its subsidiaries. He was seconded to Harta Consult Sdn. Bhd., a subsidiary of JCorp from 1991 until 1996. Due to his excellent service and contribution, he was promoted as the General Manager of Johor Franchise Development Sdn. Bhd., a subsidiary of JCorp in 1997. During his career, he has been awarded by JCorp as ‘Intrapreneur of the Year’ and ‘Outstanding CSR Award’ in 2005/2006.

He was also awarded with ‘Distinguished Achievement Award 2000’ from International Franchise Association (USA). His achievement has been recognised by the Malaysian Franchise Association for Master Franchise of the Year in 2005.

He also holds directorships in DBhd Group of Companies.



Interest in the Company:He holds 291,854 ordinary shares or 15% in HC Duraclean Sdn. Bhd., a subsidiary of DBhd

Board Meeting Attendance in 2019:He attended all five (5) Board Meetings held in the FY2019




AZHARI BIN ABDUL HAMIDAZHARI BIN ABDUL HAMID


Malaysian

Board of Directors’ Profile (cont’d)

23

DATO’ MOHD AISOM BIN OMAR

DATO’ MOHD AISOM BIN OMAR Independent Non-Executive Director

Board Committee Memberships• RiskManagementCommittee(Chairman)• AuditCommittee• NominationandRemunerationCommittee• TenderCommittee

Academic / Professional Qualification:• BachelorofLaw(LLBHons),UniversityofMalaya,Malaysia

Date of Appointment / Working Experience: Dato’ Mohd Aisom was appointed to the Board of DBhd on 15 December 2015. He started his career in 1983 as a Legal Assistant with Messrs Tahir & Salleh in Johor Bahru. Subsequently, he ventured into the corporate world to join Sri Tenaga Perunding Sdn. Bhd. as their General Manager, Corporate and Legal Affairs in 1984, and later joined Astaka Group of Companies as their Group General Manager, Legal Affairs.

Due to his high spirits and passion in legal practice, he joined Messrs Zamani Ibrahim, Tarmizan & Co. as a Partner in June 2004. In 2005, he set up his own legal practice through Messrs Omar Ismail & Co, which is now known as Messrs Omar Ismail, Hazman & Co.




Board Meeting Attendance in 2019: He attended all five (5) Board Meetings held in the FY2019



Convictions for Offences within the past five (5) years: Nil


Malaysian




Group Management

THECOMPANY


24

SHAHRIZAM BIN A SHUKOR

SHAHRIZAM BIN A SHUKOR Independent Non-Executive Director

Board Committee Membership• AuditCommittee(Chairman)• RiskManagementCommittee

Academic / Professional Qualification:• BachelorofAccountancy(Hons),UniversitiPutraMalaysia,Malaysia• MemberoftheMalaysianInstituteofAccountants(MIA)• Associate Member of Certified Practising Accountants (CPA),

Australia

Date of Appointment / Working Experience: Shahrizam was appointed to the Board of DBhd on 15 December 2015. He started his career in 1996 with Messrs Coopers & Lybrand, and thereafter joined Messrs Azman, Wong Salleh & Co. until 2002, in the areas of auditing and financial advisory. He then set up his own financial advisory firm, known as Westland Consulting Sdn. Bhd..

Currently, he is the Chief Financial Officer of Seri Pacific Hotel Corporation Sdn. Bhd. Prior to that, he was the Chief Financial Officer of TH Travel & Services Sdn. Bhd., a wholly-owned subsidiary of Lembaga Tabung Haji. With his vast experience in finance and accounting areas, he has been appointed as an Independent Non-Executive Director of Stella Holdings Berhad (formerly known as Merge Energy Berhad), a strategic investment holding company since 6 May 2019. He is also a Director of PDT Technique Sdn. Bhd., a subsidiary of Permodalan Darul Ta’zim since 19 December 2019.

Directorship(s):Listed Companies: Stella Holdings Berhad (formerly known as Merge Energy Berhad) (appointed on 6 May 2019)Other Public Companies: Nil



Board Meeting Attendance in 2019: He attended all five (5) Board Meetings held in the FY2019


Malaysian



Convictions for Offences within the past five (5) years: Nil


25

VINIE CHONG PUI LINGIndependent Non-Executive Director

Board Committee Membership:• AuditCommittee• NominationandRemunerationCommittee• RiskManagementCommittee

Academic / Professional Qualification:• BachelorofCommerce,theUniversityofMelbourne,Australia• VictorianCertificateofEducation(VCE),Australia• ACFACharterholder(CharteredFinancialAnalyst)• AssociateMemberofCertifiedPractisingAccountant(CPA),Australia

Date of Appointment / Working Experience :Vinie was appointed to the Board of DBhd on 1 July 2018. She has extensive experience in investment and fundraising exercises, which have won numerous prestigious awards from the esteemed RAM Rating, Euromoney, Triple A Asset Award, International Financing Review and Alpha Southeast Asia for best transactions and innovation in finance.

She is currently the Group Chief Financial Officer of Cenergi SEA Sdn. Bhd., a subsidiary of Khazanah Nasional Berhad which provides sustainable and renewable energy solutions to reduce carbon emissions across Southeast Asia.

She started her career in 2001 with an asset management firm as an Executive in product development and marketing, and subsequently joined a boutique financial advisory firm in 2003 as a Senior Financial Analyst covering Malaysia and the Middle East regions. She later joined Malaysia’s largest business process outsourcing firm, Efficient E-Solutions Berhad Group in 2007 as a Manager in the CEO’s office in charge of corporate finance, business advisory, investment and cross functional initiatives.

She was appointed as the General Manager, Corporate Finance, Treasury & Investor Relations at Malaysia Airports Holdings Berhad (MAHB) in 2014, overseeing the investment and finance strategy area, and was instrumental in the mergers and acquisitions transactions which propelled MAHB to the second largest listed airport group in the world in 2015. She served as the Board member in two of MAHB’s investee companies in 2015 - Segi Astana Sdn. Bhd. which owns and operates the shopping mall connected to klia2; and MFMA Development Sdn. Bhd. which operates the premium outlet park in Sepang. She subsequently joined Astro Malaysia Group as the Vice President of Strategy & Commercial, which she had led financial transformation and strategic repositioning of Astro’s production business as the largest production house in the region.

She was twice voted as the best investor relations professional in Asia in the globally renowned Institutional Investor’s survey for the AllAsia Executive Team, for transportation and industrial sectors in 2013 and 2015 respectively.

VINIE CHONG PUI LING

VINIE CHONG PUI LING

Age : 41 Gender : Female

Malaysian




Board Meeting Attendance in 2019:She attended all five (5) Board Meetings held in the FY2019

Length of Service: 1 year 9 months (as at 30 April 2020)






Group Management

THECOMPANY


26



WAN RAZMAH BINTI WAN ABD RAHMAN, ACIS Company Secretary

Academic / Professional Qualification:• Chartered Secretary of the Institute of Chartered Secretaries and

Administrators (ICSA) United Kingdom • Member of the Malaysian Institute of Chartered Secretaries and

Administrators (MAICSA)

Date of Appointment / Working Experience:Wan Razmah was appointed as the Company Secretary of DBhd on 15 March 2017. Her career in public listed company began in 1996 when she joined Amcorp Properties Berhad as an Assistant Company Secretary. In 2010, she joined Idaman Unggul Berhad as the Company Secretary and Head of Human Resources.

In 2014, she joined Malaysia Airports Holdings Berhad (MAHB) as Senior Manager, Company Secretarial Division and thereafter, in 2016, she joined Tune Group Sdn. Bhd. as the Corporate Affairs Manager.





Age : 51 Gender : Female

Malaysian


27



For details of Haji Abdullah’s profile, please refer to page 21 of this Annual Report.



Group Management

THECOMPANY


28

Key Senior Managements’ Profile (cont’d)


For details of Azhari’s profile, please refer to page 22 of this Annual Report.

29


WAN RAZMAH BINTI WAN ABD RAHMANCompany Secretary

For details of Wan Razmah’s profile, please refer to page 26 of this Annual Report.



Group Management

THECOMPANY


30

ZAIN AZRAI BIN ZAINUDDINGroup Chief Financial Officer

Age / Gender: 47 / Male

Nationality: Malaysian

Academic / Professional Qualification:• BachelorofBusiness(Accounting),MonashUniversity,Melbourne,

Australia • MemberofMalaysianInstituteofAccountants(MIA)• MemberofCertifiedPracticingAccountant(CPA),Australia

Date of Appointment / Working Experience:Zain was appointed as the Group Chief Financial Officer of DBhd on 1 September 2016. He has more than 20 years of experience in the field of auditing, consultancy and finance. Prior to joining DBhd, he was the Vice President of the Finance Department, UDA Holdings Berhad (UDA) and was later promoted to Senior Vice President leading UDA’s Group Finance in 2015.

He began his career in 1995 with Messrs Deloitte Kassim Chan (Deloitte), Malaysia and Deloitte & Touche, New Jersey, USA. In 2007, he joined Pricewaterhouse Coopers (PwC) Advisory Services Sdn. Bhd. in Transaction Services Department specialising in merger and acquisition.

Directorship(s):Listed Companies : NilOther Public Listed Companies : Nil




ZAIN AZRAI BIN ZAINUDDINGroup Chief Financial Officer

31

AZUA BINTI KAMARUDINManaging Director of Metro Parking (M) Sdn. Bhd.

Age / Gender: 45 / Female


Academic / Professional Qualification:• Master in Business Administration, Universiti Utara Malaysia

(UUM), Malaysia• Bachelor Degree in Business Administration, Universiti

Teknologi MARA (UiTM), Malaysia• DiplomainBankingStudies,UniversitiTeknologiMARA(UiTM),

Malaysia

Date of Appointment / Working Experience:Azua was appointed as Managing Director of Metro Parking (M) Sdn. Bhd. on 1 September 2019. Prior to that, she was the Executive Director of TMR Urusharta (M) Sdn. Bhd. since 2017.

She started her career in banking industry with RHB Bank Berhad, where she held various positions under the Operations Services Department, Credit Card Services Division and Processing Department from 1998 to 2006.

Prior to joining TMR, she was with MAHB as a Manager in the Transformation Management Office (TMO), responsible in managing the implementation of Lean Program in the company before being promoted as a Senior Manager in November 2010, which also covered the General Manager, TMO position. She led and facilitated the implementation of continuous improvement programs which resulted in a savings of RM118 million from 2010 until 2015. She also developed the Innovative and Creative Circle (ICC) program, which entails consulting and leading the ICC team to winning the Gold Award during Regional ICC Convention, The Three Star Award and The Best Top 10 Award during National ICC Convention. The team was also selected to compete in the International ICC Convention in 2012 and 2015.

From 2006 until 2008, she was the Manager at Prudential Services Asia Sdn. Bhd. holding a Six Sigma Black Belt certificate. She successfully developed the organisation’s quality management system that enabled and the company to obtain the ISO 9001:2000 certification, with no major or minor lapses were sighted during the Compliance Audit by SIRIM Berhad.




AZUA BINTI KAMARUDINManaging Director of Metro Parking (M) Sdn. Bhd.




Group Management

THECOMPANY


32


AZUAN BIN HAJI ABU BAKARSpecial Officer to Executive Vice Chairman



Academic / Professional Qualification:• Bachelor of Computer and Management, CICT International

College Malaysia Twinning Programme with James Watt College, United Kingdom

• Diploma inComputer&ManagementAdmin,CICT InternationalCollege (CICT), Malaysia

Date of Appointment / Working Experience:Azuan was appointed as General Manager, Group Business Development of DBhd on 18 July 2018. He was then re-designated as the Special Officer to Executive Vice Chairman on 18 March 2020.

He started his career as the Customer Services Executive for the Customer Access Unit of Microsoft Malaysia in 1997. From 2001 to 2008, he joined Formis Group of Companies as the Strategic Channel and Account Manager. Subsequently, in 2008, he served as the Country Manager for CMS I – System (India) Pvt. Ltd. and CMI I System (Dubai).

From 2014 to 2017, he joined Masterplan Consulting Sdn. Bhd. as the Head of Corporate Affairs where he gained extensive experience in the field of corporate affairs and communications. Prior to that, he was the Head Marcom for TIME dotCom Berhad from 2011 to 2013. Later in 2017, he joined TMR Urusharta (M) Sdn. Bhd. as the General Manager of Stakeholder Relations and Business Development to seek out new clients and new businesses before he was promoted as the General Manager, Group Business Development in DBhd.




AZUAN BIN HAJI ABU BAKARSpecial Officer to Executive Vice Chairman

33


MOHD ISA BIN MOHD DAUDGeneral Manager of Group Finance



Academic / Professional Qualification:• Bachelor Degree in Accountancy (Hons.), Universiti Teknologi

MARA (UiTM), Malaysia• Diploma in Accountancy, Universiti Teknologi MARA (UiTM),

Malaysia

Date of Appointment / Working Experience:Mohd Isa joined DBhd as the Head of Group Finance in July 2018 and was promoted as the General Manager on 1 February 2020, where he leads the DBhd’s Group Finance and Accounting Division.

He started his career as an Account Assistant with Rimba Ramin Sdn. Bhd. before joining Messrs. Azman, Wong, Salleh & Co. as a Senior Auditor from 2009 until 2012 where he gained extensive experience in auditing listed companies and private limited companies. Later in 2012, he joined KTM Distribution Sdn. Bhd., a subsidiary of KTM Holdings Berhad as an Accountant.

From 2012 until 2018, he re-joined Messrs. Azman, Wong, Salleh & Co. and held a position as Senior Auditor.




MOHD ISA BIN MOHD DAUDGeneral Manager of Group Finance



Group Management

THECOMPANY


34

SHAMSUL BIN MOHD SALLEH Managing Director of TMR Urusharta (M) Sdn. Bhd.



Academic / Professional Qualification:• BachelorofScienceinMechanicalEngineering,SouthernIllinois

University at Carbondale, United States of America• Certificate Level 1, Thermographer, Infrared Training Centre –

Europe & Asia • ProfessionalMember,TheInstituteofInternalAuditorsMalaysia

Date of Appointment / Working Experience:Shamsul was appointed as the Managing Director of TMR Urusharta (M) Sdn. Bhd. on 12 January 2017. His career started as Junior Production Executive at Panasonic AVC Network (M) Sdn. Bhd. in 1992. In 2000, he was promoted as a Production Manager for final assembly to improve departmental targets on efficiency, and a leader for new production assembly method from conventional line assembly to cell assembly.

Based on his vast experience and performance, he was promoted to Senior Production Manager Audio assemblies.

He joined TMR Urusharta (M) Sdn. Bhd. in 2007 as the Deputy General Manager for Engineering and Technical Support until 2016, when he was transferred to DBhd to hold the position as the General Manager and Head of Business Planning Unit with the main task to formulate planning and strategies for new business development and re-engineering processes until his appointment as the Managing Director of TMR Urusharta (M) Sdn. Bhd. in November 2016.





SHAMSUL BIN MOHD SALLEH Managing Director of TMR Urusharta (M) Sdn. Bhd.

35

RUSHDAN BIN RAMLI Managing Director of Damansara PMC Services Sdn. Bhd.



Academic / Professional Qualification:• BachelorofEconomics,InternationalIslamicUniversity,Malaysia• Post Graduate Diploma in Hospital Management, South Bank

University, United Kingdom • Diploma inManagement,HenleyBusinessSchool,Universityof

Reading, United Kingdom

Date of Appointment / Working Experience:Rushdan was appointed as the Managing Director of Damansara PMC Services Sdn. Bhd. (DPMC) on 1 October 2018. His career started as an Executive Trainee with KPJ Healthcare Berhad (KPJ) in 1994, before being appointed as a Corporate Executive of KPJ’s Commissioning Team.

During his tenure in the Commissioning Team, he was responsible in ensuring the successful commissioning of KPJ Ampang Puteri Specialist Hospital and KPJ Damansara Specialist Hospital. In 2000, he was appointed as the Business Development Manager of KPJ Damansara Specialist Hospital.

After five years in hospital operations, he joined Healthcare Technical Services Sdn. Bhd. (HTS) in 2006 as Senior Operation Manager and became the Assistant General Manager in 2009. He was promoted as General Manager in 2013 and subsequently in 2015 became the Chief Financial Officer of HTS. Following his success, he was then promoted as the Managing Director of HTS in 2017.





RUSHDAN BIN RAMLI Managing Director of Damansara PMC Services Sdn. Bhd.



Group Management

THECOMPANY


36

Ts. MOHD ZAHIRUDDIN BIN MOHD TOHIRManaging Director of Damansara Technology Sdn. Bhd.



Academic / Professional Qualification:• ProfessionalTechnologist(Ts.)fromMBOT• Bachelor of Science in Computer Engineering, California State

University of Sacramento (CSUS), California, United States of America

• AssociateDegreeinAppliedScience,StateUniversityofNewYorkat Buffalo (SUNY), New York, United States of America

Date of Appointment / Working Experience:Ts. Zahiruddin was appointed as the Chief Executive Officer of Damansara Technology Sdn. Bhd. (DTech) on 1 March 2019 with more than 22 years of experiences and expertise in Information Technology. Following his success, he was then promoted as the Managing Director of DTech on 3 February 2020.

He started his career as the System Engineer at Mesiniaga Berhad in 1995. From 1999 to 2003, he joined Ericsson Global IT Services as the Technical Specialist. Later, he joined DHL Asia Pacific Shared Service in 2004 as the Principle Infrastructure Engineer. From 2006 to 2007, he held a position as Technical Consultant at BMC Software, Singapore. In 2008, he joined Edymium Technology Sdn. Bhd. as the Chief Marketing Officer. From 2011 to 2014, he served as the Chief Executive Officer of Ultimus Holdings Sdn. Bhd..

In 2017, he was the Manager of Management Information System (MIS) at Metro Parking (M) Sdn. Bhd. Later in the same year, he received the ‘Certified Professional Technologist’ recognition from MBOT which carries the title Ts. Thereafter, he was promoted as the General Manager in 2018, prior to him joining DTech.





Ts. MOHD ZAHIRUDDIN BIN MOHD TOHIRManaging Director of Damansara Technology Sdn. Bhd.

37

SYED ZAID BIN SYED FADZILExecutive Director of HC Duraclean Sdn. Bhd.



Academic / Professional Qualification:• Advanced Diploma in Accountancy, Universiti Teknologi MARA

(UiTM), Malaysia

Date of Appointment / Working Experience:Syed Zaid started his career in 1985 as an Account Assistant in JCorp (formerly known as PKENJ). He was appointed as an Accountant in 1990 after graduating from UiTM which was formerly known as Institute Teknologi MARA (ITM). Just only a year, he was promoted as the Deputy Manager in Harta Consult Sdn. Bhd. (currently known as Damansara Assets Sdn. Bhd., a wholly-owned subsidiary of JCorp).

In November 1997, he joined HC Duraclean Sdn. Bhd. (HCD) as a Manager. Based on his extensive work experience and contribution to HCD in Finance & Administration, in 2009 he was appointed as the General Manager. He was promoted in 2013 where he serves as the Executive Director until this day.




SYED ZAIDBIN SYED FADZIL Executive Director of HC Duraclean Sdn. Bhd.




Group Management

THECOMPANY

38

Group Management

LOKMAN HAKIM BIN ZUBIR

Head of Group Procurement

MASSABRINABINTI MASMARIYUNO

Head of Group Corporate Communications

SUHANABINTI MOKHTAR

Head of Group Legal


39

SAFIAHBINTI ADNAN

Head of Group Human Resources (Operation)

AUZAN SYAIDIBIN ABDUL LATEH

Head of Group Contract Advisory & Risk Management

AZULLAIHABINTI ABDULLAH

Head of Group Internal Audit

ALLIABINTI ZAINUN

Head of Group Human Resources (Strategy)



Group Management

THECOMPANY

02EXPANDING POSSIBILITIES, CREATING OPPORTUNITIESSeizing opportunities as they come, we believe that embracing a committed and resilient mindset promises endless possibilities. We are committed to excellence in our business and operations, as we actively pursue avenues to advance and scale up in the market.

CORPORATE STATEMENTS

Chairman’s Statement 42

ManagementDiscussion & Analysis 46

Sustainability Statement 53


42


Chairman’s StatementDear Shareholders and Stakeholders,

The past four years since our transformation in 2016 has taken DBhd on a remarkable journey. In 2019, we have gone through several structural changes which brought on important shifts in our mindsets and in the way we approach our business operations. It has been a challenging journey, but these changes are now bearing the fruits of our labour as we are witnessing steady positive outcomes and strengthened business resiliency.

For the financial year ended 31 December 2019, we continue to uphold our position of strength and resiliency, posting another year of growth with net profit increasing 16.6 percent to RM22.79 million while profit before tax fell by 2 percent to RM25.59 million. Despite Malaysia’s slower economic growth in 2019, we have successfully maintained our profit track record thanks to the concerted efforts throughout the Group.

Last year, Malaysia recorded a lower Gross Domestic Product (GDP) growth of 4.3 percent compared to 4.7 percent registered in 2018. This was compounded by the global economic slowdown, arising from unresolved China-US trade tensions, fluctuating currencies and oil prices around the world and the uncertainty over Brexit.

During this time, we took measures to increase our resilience against market uncertainties and made strategic initiatives to ensure we maximise on future opportunities. In short, we have been preparing ourselves to further widen our horizons.

POISED FOR GROWTH

As we anticipated, the property market did not improve much in 2019. The changes in policies and the increasingly competitive market environment have proven to be challenging for our Property and Land Development (PLD) business segment this year.

42

43

DATO’ AHMAD ZAHRIBIN JAMILIndependent Non-Executive Chairman

Despite these headwinds, PLD returned to the black during the year with encouraging property sales, especially in Johor Bahru. This performance bore out our reading of the property market, that there remain pockets of unmet demand for the right property in the right location for the right price.

This has given us the confidence to forge ahead a key strategic alliance with Menteri Besar Negeri Sembilan Incorporated (MBINS) to jointly develop a mixed-development project in Bandar Sri Sendayan, Negeri Sembilan worth more than RM770 million. This 50-acre commercial plot is to be developed over the next 5 to 10 years. We originally planned to break groundwithin the second quarter (Q2)of 2020, however, in the light of the COVID-19 pandemic, we have decided to put these plans on hold until economic conditions and COVID-19 situation recovers.

Meanwhile, we remain vigilant of the standard operating procedures (SOPs) enforced by the National Security Counsel for strict safety and sanitisation measures to safeguard the well- being of our workforce and the communities we serve.

Our subsidiary Damansara Technology Sdn. Bhd. (DTech), is spearheading new Digital Technology initiatives this year which will support us as we examine our internal workings for more efficiencies to unlock. Currently, DTech is looking to boost our internal business efficiencies and operational capabilities while

16.6%

NET PROFIT TORM22.79 million

43

we look beyond the DBhd Group for future business opportunities in the tech-space.

We remain prudent in our assessment of opportunities and implementation of cost optimisation initiatives. Having said that, we will keep on sharpening our focus to continuously strengthen and ensure sustainable growth in all of our business segments – PLD, Integrated Facilities Management (IFM), and Project Management Consultancy (PMC).

Chairman’sStatement

Management Discussion& Analysis

SustainabilityStatement

CORPORATESTATEMENTS


44

Chairman’s Statement (cont’d)

MAINTAINING THE CONFIDENCE OF OUR SHAREHOLDERS

We continue to work hard to generate returns for our shareholders whose loyalty and patience are reminders for us to strive harder every year. We remain confident of our growth trajectory; thanks to the various strategic initiatives and transformational changes we have implemented over the past four years. As a result, we have improved our net earnings per share to 7.25 sen in 2019 from 6.01 sen in FY2018. We have also grown our net asset per share to 61 sen per share in FY2019, from 54.9 sen per share in FY2018.

CREATING SUSTAINABLE VALUE FOR ALL

Moving into FY2020, Malaysia went through several major challenges over the past six months, which includes changes political climate as well as the huge setback brought on by the COVID-19 pandemic crisis. This pandemic has swept through the nation and affected the whole world, halting many businesses since the beginning of the year. Nonetheless, we remain steadfast and focussed on our commitment

7.25sen

net EarningPer Sharein 2019

61sen

net ASSETPer Sharein 2019

towards creating sustainable value for all of our stakeholders by implementing reactive measures amid these challenges.

We are still in the second phase of our Strategic Restructuring Plan (SRP) executed under our five-year business plan. We are approaching the SRP as a live document and a guide that is flexible and adaptable to best suit the economic conditions and customer sentiments from year to year.

To deliver on our promises, we are empowering our people and building a dynamic organisation. We are focusing on talent development and succession planning while catalysing growth from within the organisation. We believe in the strength of our people and that they are the most important driver for our growth.

2017

Gro

win

g D

Bhd

Val

ue

2018

TRANSFORMATION GROWTH HIGH GROWTH

2022 2023 2027

Phase 01 Phase 02 Phase 03

CraftingBusiness Plan

StrategicRestructuring

Plan (SRP)

Volume Outcome Post-BP:• >50% Recurring Income from

Tenancy of Property• Continuous Contract Renewal• Additional New Contracts• Expansion on Business• Strong Brand Presence• Industry Reference• Long-term Sustainability

Volume Outcome by 2020• Preferred Solutions Provider• Rebuilding Property Brand

5-Years Business Plan• Perception and Reputation• Business E�ciency and

Innovation

DBhd Group Above and Beyond• Recurring Income from

Property• Recurring Income from IFM

Complete SRP:• Re-alignment of 3 Business

Segments• Improved Work Culture• Improved Governance and

Internal Processes• Promote Synergy

45

Chairman’s Statement (cont’d)

I would like to commend the DBhd Group for creating the Annual Excellence Award, an acknowledgement for employees who have shown exemplary performance in their respective divisions. This incentive to motivate and thank employees underlines the importance of our people to every effort and initiative we undertake. A total of RM8,000 was allocated for the 20 recipients this year. I would like to congratulate these outstanding employees for their contributions to the Group.

HEADING INTO 2020

The year certainly didn’t take off with a good start for the industry, the nation and worldwide. Since February 2020, not only did we experienced a change in government, we now also face the unprecedented economic and financial impact of the COVID-19 global health crisis. These events will almost certainly bring on new measures, policies and regulations with which we must comply to support recovery and future growth of the industry and our economy.

Our outlook remains cautious as we anticipate an even more challenging economic environment within the area where we expect to operate for the rest of 2020. These challenges ahead signal that financial resiliency is critical in order to withstand and respond to the impacts of external shocks such as the COVID-19 pandemic.

The Board and I will continue to ensure we remain objective amid these challenging times. For now, our main priority is to keep our employees and the community we serve safe and healthy. We have put in immediate measures to help all employees of DBhd weather through this time of crisis.

Moving forward, it is critical for the Group to intensify our approaches to elevate our sustainability and enhance our innovative thinking to create meaningful value for our various stakeholders. As we continue to move ahead with our strategic plans, we continuously seek opportunities to improve and strengthen our business efficiencies through active engagements with and amongst the Board members.

ACKNOWLEDGEMENTS

The Board and I would like to express our gratitude to Ts. Brian Iskandar bin Zulkarim, the Group Managing Director who stepped down from the Board and company’s position in March 2020. Please join me in thanking my fellow Board member who has helped in providing the Group with greater clarity on the business direction and growth aspirations. I am also taking this opportunity to acknowledge the valuable contributions of our senior management for their unrelenting dedication to delivering positive results for the Group.

Last but not the least, I would like to express my sincere gratitude to those who have put their confidence in our capabilities and played a big role in our growth – our business partners, clients, vendors, suppliers, and employees who have walked with us through the many ups and downs.

DATO’ AHMAD ZAHRI BIN JAMILIndependent Non-Executive Chairman

Town hall engagement with DBhd employees held on 10 October 2019




CORPORATESTATEMENTS


Management Discussion & Analysis

46

The Group is pleased to have achieved another year of growth and extended our track record of profitability for the financial year ended 31 December 2019 (FY2019).

This performance is a testament to the focus and commitment of DBhd in attaining the goals outlined in our Five-Year Business Plan. Our achievement came amid tougher conditions as the economy continued to moderate, while regional growth trends levelled off in late 2019 as the US-China trade tensions weighed on the global economy.

We remain determined in our approach in executing our transformation and growth plans despite market uncertainties, and in furthering our business opportunities and partnership synergies. We have worked hard in executing steps to limit the risks of the Group, through prudent management policies including continuous assessment and review of the Group’s operations and strategies. We have maintained close working relationships with our stakeholders, especially government authorities, and have stayed abreast of technology upgrades in line with industry trends.

This year, we explored different business opportunities involving information technology solutions through our subsidiary DTech which will complement our existing business segments – PLD, IFM, and PMC. The synergies and improved optimisation across our business segments is what contributes to the 16.6 percent increase in our net profit, further boosted by the sale of our properties in Central Park, Johor Bahru and Damansara Hills, Kuantan.

47

Launch of the double-storey garden terrace show unit for the Central Park project development in Tampoi, Johor Bahru in October 2019

A CHALLENGING 2019, A SPILL OVER FROM 2018

Throughout 2019, the property sector remained subdued largely due to macroeconomic factors such as financial market volatility, external trade tensions and weak buyer sentiment. This prolonged uncertainty dampened buyers’ interest and market sentiment consequently posed downside risks to the growth of the industry. Additionally, the property development sector continued to be affected by banks’ stringent lending policies, which contributed to an increase in unsold property units. Through focus and commitment, DBhd maintained its footing in the market, which allowed the Group to unlock the value of its property inventory in Johor Bahru and Kuantan. In doing so, our PLD business segment was instrumental in sustaining the Group’s profitability.




CORPORATESTATEMENTS


48

Management Discussion & Analysis (cont’d)

During the year, we sold all remaining units in Aliff Square 1, in Tampoi, Johor Bahru, while Aliff Square 2 was 87.5 percent sold. In the process, we observed signs of pent-up demand for commercial property in the Tampoi area. This paved the way for the Group to proceed with a joint venture with our partner Active Estates Sdn. Bhd. to create a brand-new commercial hub named Business Boulevard @ Central Park. This 6.9-acre development will consist of 68 units of freehold commercial shop lots to be developed over five years with an estimated Gross Development Value (GDV) worth more than RM150 million. The ground-breaking ceremony of Business Boulevard @ Central Park, held on 11 December 2019 cemented another milestone achievement for DBhd’s partnership with Active Estates.

Additionally, we also sold 67 percent of our Super Terrace Units in Damansara Kuantan, with only 16 available units remaining for sale at this point in time. Meanwhile, DAC Properties Sdn. Bhd., our 30 percent associate company also sold 1,318 units of its Central Park residential development, which is under a joint venture with Country Garden Management Sdn. Bhd.

This resulted in PLD segment making the highest contribution worth RM13.11 million, or more than half of the Group’s net profit for the year. This pushed DBhd’s net profit higher, to RM22.79 million, a growth of 16.6 percent or RM3.25 million compared to the year before.

On 11 December 2019, we held a ground-breaking ceremony of Business Boulevard @ Central Park in Tampoi, Johor Bahru

1,318 67 % 87.5%

UNITS SOLD Take-Up Rate Take-Up RateCountry Garden, Johor

Damansara Hills, Pahang

Aliff Square 2, Johor

87.5%

49


In Bank Negara Malaysia’s 2019 third quarter bulletin, on average, Malaysian banks usually approve three out of four housing loan applications received. In 2019 alone, banks approved housing loans worth RM119 billion to about 273,000 borrowers, a notable increase in approvals over the past three years. Some 42 percent were granted to first-time homeowners. Recognising this opportunity, we have mobilised further expansion of our targets and horizons for PLD by forming strategic alliances and initiatives.

In June 2019, the Group inked a Memorandum of Understanding (MoU) with Menteri Besar Negeri Sembilan (Incorporated) (MBINS) to jointly develop a 50-acre plot in Sri Sendayan, Negeri Sembilan - a project worth more than RM770 million in GDV. This partnership marks the commencement of DBhd’s maiden project in Negeri Sembilan which will comprise of shop lots, commercial podiums and residential units to be constructed in three phases over the next 10 years.

Nonetheless, having secured this partnership project which will keep us busy over the next 10 years, we are careful not to be complacent as we continue to seek more partnership opportunities. We continue to follow strict guidelines in matching our products to market demand and sentiment and shall remain prudent with our decisions. We will only venture into projects we see as feasible and profitable in the future.

With regards to the IFM segment, the biggest challenges in FY2019 were the higher minimum wage imposed by the government and intense competition within the industry. The IFM industry is heavily reliant on manpower and the rise in the minimum wage to RM1,200 has impacted our operations as labour cost comprises 24 percent of our operating costs.

Amid the rising costs and intense competition, the facilities management market is also facing higher client expectations as clients continually expect and demand more value and services for the same fees. This has brought home to us the importance of developing new offerings and complementary services to meet the needs of our clients.

50-acres mixed development land project in Negeri Sembilan

To meet the ever-evolving needs of our clients as well as to maintain our cost efficiencies, we are leveraging on innovative technologies such as cashless payment systems and automation as an integral enabler in our IFM services.

The IFM segment provides a range of service offerings such as building maintenance, engineering & technical, cleaning & hygiene, parking management & operations, infrastructure, systems & equipment for parking management, and assets management through our subsidiaries TMR Urusharta (M) Sdn. Bhd. (TMR), HC Duraclean Sdn. Bhd. (HCD), and Metro Parking (M) Sdn. Bhd. (MPM). We have a regional presence through the Metro Parking group subsidiaries in Singapore and Philippines.

The Metro Parking Philippines team led by Chief Executive Officer, Khairil Anwar bin Mohd Hamzah (Front row, centre)

Additionally, we’ve expanded our parking management and operations services across the region through our Metro Parking group subsidiaries, namely Metro Parking (S) Pte. Ltd. (MPS) in Singapore, and Metro Parking Management (Philippines) Inc. (MPP) in the Philippines.

For FY2019, our tender book value stood at RM781 million and out of the total tender book value, DBhd manage to secure a total of RM161.17 million with a success rate of 20.63 percent. Out of the RM161.17 million total contracts secured in 2019, 85 percent consists of new contracts valued at RM136.3 million while 15 percent were renewed contracts valued at RM24.8 million. Among our IFM subsidiaries, TMR Urusharta Group was the largest contributor to our tender book at 53 percent in FY2019, while the largest single contract, worth RM62 million, came from MPP in the Philippines spanning over a duration of 20 years.

This contract is our first build-operate-transfer (BOT) project to develop a 208-bay steel deck parking facility in southern Manila, Philippines. The parking facility will be at the centre of Madrigal Business Park, a bustling business hub in the affluent suburb of Ayala Alabang, located near Alabang Town Centre, one of Metro Manila’s best-known shopping and lifestyle centres. The project includes management rights that will contribute to the Group’s recurring income for the next 20 years with




CORPORATESTATEMENTS


50


Participants from various biomedical organisations attending Pulse medical device training held at Rumah Universiti, University of Malaya

Artist’s impression of the 208-bay steel deck parking facility in southern Manila, Philippines

an additional five years, as and when MPP constructs another parking facility storey.

Meanwhile, our project management consultancy and training initiatives made good progress in its second year. Through our subsidiary, Damansara PMC Services Sdn. Bhd. (DPMC), we identified a gap in training & certification for medical technology personnel (users,

engineers and technicians) in Malaysian hospitals. Given that Malaysia’s total healthcare sector is expected to grow to RM127.9 billion in 2027, this gap represents an urgent need and a valuable opportunity. The timely development and launch of our training course for biomedical engineers & technicians was well received with more than 10 medical equipment modules undertaken by approximately more than 300 participants at Rumah Universiti, University of Malaya.

We have also registered with Pembangunan Sumber Manusia Berhad (HRDF) and secured our appointment as Training Provider (TP) from Majlis Amanah Rakyat (MARA), to strategically develop and conduct technical training, internship and job placement for MARA students from Kolej Kemahiran Tinggi MARA (KKTM Ledang) and Universiti Kuala Lumpur (UniKL Gombak) to 20 Medical Technology Provider (MTP) companies in Malaysia. In addition to student training, we also aim to provide more modules for technical and vocational education training (TVET) for professionals working in healthcare industries such as biomedical engineers, technicians and other healthcare practitioners.

Meanwhile, our long-standing partnership with the MBOT continues to be a driver of continuing education for the Group and the facilities management industry, through the award of Continuing Professional Development (CPD) points on MBOT courses and DBhd’s training courses under DPMC’s Pulse program. Currently, the Group has one qualified Technologist (Ts.) in our Key Management Team who is also serving as the Managing Director of DTech.

STRONGER BALANCE SHEET AND INCREASED PROFITABILITY


For FY2019, the Group recorded a net profit of RM22.79 million, an increase of 16.6 percent compared to the same period in 2018. This was driven predominantly by the PLD segment with 64 percent of net profit contribution, followed by IFM with 34 percent and PMC with 2 percent. Our earnings before interest, taxes, depreciation, and amortisation (EBITDA) increase to RM74.7 million against RM34.02 million in the previous year, due to the increased contribution from IFM.

We currently hold more than RM666.11 million in active IFM contracts. Compared to the previous year, the contribution in revenue from the IFM segment decreased by 8.6 percent, mainly due to maturing operations in key contracts. Progress in the construction and commissioning of the Refinery and Petrochemical Integrated Development (RAPID) project in Pengerang, Johor, meant reduced requirements for accommodation and food & beverage catering services at The Hive. Consequently, other key contracts related to RAPID were also affected, with our Small Medical Facilities Services (SMF) and Security Management Services having completed contracts each in September 2019.

We also saw the completion of our manpower supply contract for the Kuala Lumpur International Airport (KLIA) 1 which ended in September 2019. This was replaced with a new contract with Urusan Teknologi Wawasan Sdn. Bhd. (UTW) for the provision of skilled manpower for cleaning services is worth RM21 million. The new contract awarded by UTW demonstrates our ability to leverage on our niche in providing skilled labour while realising higher quality revenue streams for the Group.

In addition to this, our active contracts include cleaning and maintenance contracts for the TM Annexes building, Menara TM, TM Semarak, Petronas Hyper stations, KLIA, Klinik Kesihatan Kuala Lumpur and Putrajaya, as well as several other places in Johor.

Another major contribution in IFM segment came from MPP in the Philippines amounting to RM3.05 million in net profit, while MPS in Singapore ended its three-year loss streak, charting a net profit of RM1.19 million in FY2019. This is thanks to the successful application of similar initiatives taken from the Group’s Strategic Restructuring Plan (SRP) to implement turnaround measures at MPS in Singapore.

We continue to build our PMC segment, which contributed RM0.49 million in net profit to the group. For the year 2019, there were

51

no exceptional items. We remain confident in our ability to generate sustainable growth as we progress to Phase Two of our SRP.

Towards Better Business Sustainability

Our risk assessment for FY2019 is better compared to 2018. We are conscious of the importance of continuously assessing, evaluating and addressing potential risks associated with the long-term growth of our business. To that end, we continue to place high priority in managing risks and opportunities while elevating our business performance in support of the long-term interests of the Group. As such, we have established a new division, Group Contract Advisory and Risk Management Division (CARM) earlier in the year.

Purpose and Role of CARM

The decision to establish CARM in March 2019 was mainly to administer and handle the corporate legal matters, as well as the projects and risk management functions of the Group. Initially in 2017, this risk management function was incubated under the purview of the


21%

success rate,

EBITDA

>RM666.11 millionin IFM CONTRACTS

RM74.7 MILLION

The Metro Parking Singapore team led by Managing Director, Mohd Afiq Farhan bin Md Hanif (Front row, centre)

CONTRACT ADVISORY DEPARTMENT

PROJECTS & CORPORATE LEGAL DEPARTMENT

RISK MANAGEMENT DEPARTMENT

Corporate Planning & Transformation (CPT), however as the importance of risk management grew after three years, the management decided to establish an independent division. This division will now carry this function in addition to the responsibilities of governing contract and compliance matters as DBhd’s business continues to grow.

CARM’s responsibilities span across three main departments:

Contract Advisory Department

The Contract Advisory Department (CAD) is the central point for contract drafting and compilation. Its one-stop-centre function is further enriched with another important function, which is contract compliance. All these processes form the crux of contract advisory for the whole Group as the CAD function often requires fast turnarounds for all contracts-related matters including contract negotiation with potential business partners of the Group. In the event of tender and award procedure, the CAD liaises closely with the Group Procurement Division on matters pertaining to contract negotiation including preparation of necessary legal documents deriving from the same.

Projects and Corporate Department

The Projects and Corporate Department (PCD) manages all corporate legal-related portfolios which includes assisting in legal advisory for corporate exercises and projects especially in rendering services for corporate organisation, compliance and relevant legal documents for these corporate exercises including but not limited to private placement and acquisition of shares. In its Conveyancing and Land Matters portfolio, PCD equips the operations chain and strengthen our Property team with on-the-go advisory and preparation of necessary documents for land-related transactions.

Risk Management Department

The Risk Management Department’s (RMD) duty is to identify, monitor and assess risks (for both operations and projects) faced by the Group via quarterly reports and meetings. The reports and meetings are designed to identify and establish mitigation plans and solutions, risk policies and protocols to minimise the exposure to the risks identified. RMD also reports risk mitigation outcomes to the Board Risk Management Committee (BRMC) to help the BRMC familiarise with the impact of these risks to the business as well as to gain a more thorough understanding on the scene on ground, and assessment on how compliance is being carried out within the organisation.

Looking ahead for 2020, CARM will also spearhead the corporate compliance function of the Group. A robust compliance policy will




CORPORATESTATEMENTS


52

ensure that appropriate operational processes and corporate structures are in place to enable the company to operate in a compliant manner.

Forward-Looking Statement

In FY2019, as we delved further into Financial Technology (FinTech), Software Development, Mobile Apps Solutions, Internet of Things (IoT) and Big Data Technology Solutions.

The rising need for new digital industrial technology under Industry 4.0 (IR4.0) puts a heavy focus on machine data, interconnectivity, real-time data and automation. In order to remain relevant and competitive, we are rising to the challenge in ensuring connectedness and access to real-time insights across process, partners, products and people. DBhd has seized this opportunity to venture into activities related to and supporting IR4.0 starting internally with our own operations. We are not looking to merely invest in new technologies to improve efficiency, but we aim to revolutionise the way our entire business operates and grows.

Optimising Business Segment

As we continue to face many headwinds in our operating environment in addition to the global economic slowdown, the Group aims to remain resilient in strengthening our financial position and in achieving our targets under our existing SRP.

The SRP is a live plan and we will review the strategies and targets set in place every year to ensure that it is relevant and reactive to the current market and economic conditions. In line with the Group’s goals, we will be re-evaluating our capacity and strengths in FY2020 by reviewing our business segments and redefining our businesses. Our rationale in redefining of our business segments is to ensure that each segment is determined by its own unique target market and set of goals, building of synergies across segments and avoiding overlap in functions to achieve optimisation throughout the Group.

We believe in the strength of our people. We already have an extensive experience and in-depth technical knowledge in the healthcare field through our subsidiary; Damansara PMC Services Sdn. Bhd. (DPMC). We believe the leveraging on this strength will help DBhd to venture further into the healthcare industry. All initiatives taken will be guided by the DBhd’s SRP to help us achieve our goals and target market for sustainability in business. One of the initiatives is to strengthen the brand presence. We are exploring future possibility to establish a physical or satellite training academy and e-module learning to enhance the existing technical and vocational demand in the market. We believe that we can leverage on DPMC’s strong network and brand presence as a reliable biomedical equipment provider. This will allow us to venture further in providing a quality and enhanced training to the other healthcare practitioners, such as nurses, radiographers, perfusionist, physiotherapist, medical lab technicians (MLTs) and hospital support service technicians.

In addition to training, we will also serve as a project consultants and


gearing for procurement house services for Malaysian hospitals to procure medical equipment packages with us. This will help hasten the process of appointing biomedical engineers, technicians and operators for hospitals and healthcare centres, which on average can take months to source and appoint. We are confident that these initiatives will bring positive contributions to the Group.

Staying on Track

Over the past four years, the Group has laid the foundations for the future growth of its property development and other strategic investment through its business segments. The implementation of the various action plans and these on-going activities will reinforce and continue to drive sustainable growth and expansion of DBhd in the coming years.

For the current year 2020, prospects for the global economic outlook are dimming due to the spread of COVID-19 outbreak across the globe. Though the efforts to contain the spread of the virus has proved effective, we are still a long way from normalcy until a vaccine can be found. The recent enforcement of the Recovery Movement Control Order (RMCO) by our Prime Minister Tan Sri Muhyiddin Yassin signals that Malaysia still needs more time to recover from this crisis.

The multiple movement control orders across cities and borders had directly impacted our eight Malaysian employees working at MPS. We have taken the necessary measures in providing these employees with temporary accommodation in Singapore to ensure their health and safety during this period. We remain vigilant and focussed in making sure the health and safety of our employees comes first and that they are well taken care of. While some of our office employees are working from home during this RMCO period, our operations team under the IFM segments who are attached to essential services have been provided with proper Personal Protective Equipment (PPE) and precautions as per required by their duties.

The economic impact and repercussions of COVID-19 on the entire world and Malaysia coupled with the new political climate at home will weigh heavily on our business directions as we navigate through the rest of 2020. Through close monitoring of our cash reserves, our Group performance and frequent gap analysis, we are cautiously confident that we are able to weather this crisis and leverage on all opportunities as we expand our horizons to ensure a strong and sustainable future for DBhd.

53

Sustainability Statement

Our Sustainability Statement highlights

the strategic management of the

Group’s Economic, Environment and

Social (EES) matters within our THREE

business segments in Malaysia; PLD, IFM,

AND PMC.

We are into our fourth full year of transformation since our Strategic Restructuring Plan (SRP) was implemented in late 2016 and are currently in Phase Two. The objective of Phase Two is to entrench foundations of sustainability and profitability while balancing the risks and opportunities of our businesses. Throughout this phase, we will be thoroughly embedding EES sustainability approaches in the way we work and think.

SCOPE AND BOUNDARY

Our Sustainability Statement is guided by Bursa Malaysia’s Sustainability Reporting Guidelines and where relevant, we also draw guidance from the United Nations’ Sustainable Development Goals (SDGs) which establishes global community issues identified as future priorities.

In managing our EES matters, our business is consistently conducted in a professional and ethical manner to create long-term value for all our stakeholders. We also realise that post-transformation is where DBhd enters the next crucial stage of growth. To safeguard the long-term sustainability and viability of our business, we have identified and incorporated EES sustainability approaches in all aspects of our work, starting from our culture, decision-making, operations, to our service offerings.

SUSTAINABILITY GOVERNANCE

Since the beginning of 2019, we have been more assertive in setting the Group’s sustainability standards, monitoring, and collecting valuable data for assessments related to sustainability. Furthermore, we have set up a Management Sustainability Committee (MSC) in 26 September 2019, to guide the Group on sustainability and governance matters while setting the ‘tone at the top’ through existing and future sustainability goals and policies. Throughout the financial year ended 31 December 2019 (FY2019), our EES sustainability approaches include the centralisation of account receivables and payables.

The rationales of the centralisation are to ensure efficiency and responsiveness in the Group. Centralisation in this business process allows for standardisation of process and flow and improved productivity where there would be improvement of the supervision between the Group and all the subsidiaries.

A more systematic control on cashflow monitoring can be conducted by the Finance team to ensure healthy cashflow within the Group. This move will also ensure that the Group will comply with any finance rules and regulations guidelines. Centralisation will result in less conflict of authority and duplication of work within the Group.

Business efficiencies has become the guiding principle for the Group. As a result, these EES considerations and practices have been integrated into our daily operations and working culture by the senior management constituted as the Group’s Executive Committee (EXCO).

The MSC analyses the impact of our current businesses on the Group’s sustainability goals and formulates action plans for execution through our Sustainability framework. These plans have specific targets and milestones to maximise the impact of our businesses through direct or indirect contribution to societal development and the local economy as well as minimise any environmental impact in the areas in which we operate.




CORPORATESTATEMENTS


54

SHAPING POSITIVE CHANGE THROUGH OUR SUSTAINABILITY FRAMEWORK

We continuously review and enhance our approach to sustainability in our operations and management. Our focus is on areas that are important to both us and our stakeholders. Through open and consistent communication, we aim to create positive change in these key areas. These focus areas form the foundation of our sustainability framework and are used to bring positive change across the Group’s Workforce, Business Operations, and Community & Environment.

Theme EES Area Sustainability Matter Relevant SDGs

Workforce Economic

Social

• TalentManagement

• StakeholderEngagement

• Diversity

• OccupationalSafetyandHealth

• GoodHealthandWellBeing

• QualityEducation

• DecentWorkandEconomicGrowth

Business Operations Economic • Innovation


• CorporateGovernance

• Environment


• Industry,InnovationandInfrastructure

Community and Environment

Economic

Social


• LocalCommunity

• Environment


• SustainableCitiesandCommunities

Group ChiefStrategy Officer

Chairman

Group ChiefFinancial Officer

Committee Member

Group ChiefOperating Officer

Committee Member

Managing Directors/ Subsidiaries

Committee Member

Head of Group Human Resources (Strategy)

Secretariat

Head of Group Corporate

Communications

Secretariat

Management Sustainability Committee Structure

Sustainability Statement (cont’d)

55


STAKEHOLDER ENGAGEMENTS

Proactive stakeholder engagements are important to ensure our business operations and directions remain viable, strategic and relevant. Throughout FY2019, various divisions across DBhd Group had initiated engagements with our internal and external stakeholders consistently. A high-level view of these engagements is summarised in the diagram and table below:

Stakeholder Group Programme Discussion Engagement Frequency

Shareholders & Investors • AnnualReport • FinancialperformanceofDBhd

• Annually

• FormalAnnualGeneralMeetings (AGM) and Extraordinary General Meetings (EGM)

• Approvalfromshareholders • AnnuallyandAd-hoc

• Conversationsbetweeninvestors, sustainability and responsibility team, and investor relations team

• Regularly

• Onlinecommunications • Regularly

Business Partners • DBhdpartnershipevents • Buildingrapportandstrengthening the bond with business partners in an informal setting

• Quarterly

Employees • TownHallmeetings

• Teammeetings

• Employeeinternalshouts(newsletters)

• Sportstournaments(inter-department and Group level)

• DBhdStaffApp

• Policies,procedures,operations

• Internal/ExternalCSRactivities

• Bi-annually

• Regularly

• Regularly

• Regularly

• Asandwhenneeded

Government • DirectGovernmentrelationsmeetings

• Employmentmatters

• Policychangesandimprovements

• Asandwhenneeded

Customers (Current & Potential)

• Customercarelines

• Surveys

• Events

• Serviceofferingsinformationand updates

• Networking

• Servicequalityassurance

• Daily

• Bi-annually

• Ad-hoc

• Regularly




CORPORATESTATEMENTS


56


STAKEHOLDER ENGAGEMENTS (cont’d)

Stakeholder Group Programme Discussion Engagement Frequency

Mainstream Media • Mediabriefings

• Pressconferences

• One-on-oneinterviews

• Pressreleases

• Medialuncheons

• Knowledgesharingandnetworking

• Bi-annually

• Ad-hoc

• Asandwhenneeded

• Asandwhenneeded

• Ad-hoc

Suppliers • One-on-onemeetings

• Briefings

• Workexpectationsanddeliverables during project implementation and/or vendor evaluation process

• Ad-hoc

• Regularly

Regulators • Conferences

• Workshops

• Policychangesandimprovements

• Potentialsolutionstochallenges faced by compliance and risk – preparation future compliance risks

• Regulatoryguidelines

• Ad-hoc

• Ad-hoc

General Public • Sponsorshiptowardslocalactivities

• SmallscaleCSRactivities

• AnnualReport

• Ad-hoc

• Ad-hoc

• Annually

Analysts • One-on-onemeetingsorconversations

• Analystbriefings

• Financialandbusinessperformance of DBhd

• Strategicplans

• Regularly

• Bi-annually

The Board engages with shareholders, the investment community and other stakeholders through general meetings which is the main forum for shareholders to seek information and clarifications on the Group’s operations, performance and strategies. All the Directors were present during the 57th Annual General Meeting held on 19 June 2019 and engaged with shareholders who were present.

To keep the investment community informed and to engage with research analysts, the senior management held an analyst briefing on 15 August 2019. This analyst briefing is aimed to announce and update the analysts on DBhd’s financial results for the six months ended 31 December 2018. The briefing was then followed by a media briefing attended by business journalists from mainstream media.

57


The senior management also continually engage with all employees through a series of regular town halls, led by the then Group Managing Director. These town halls provide updates and information of the Group’s achievements, business milestones and Key Performance Indicators (KPIs). In addition, other annual team building events were held to boost camaraderie as well as to promote the health and well-being of our employees. The events held are as follows:

• BuburLambukDistributionon9May2019

• DBhdGroupBowlingChallenge2019on13April2019

• TheBiggestLoserFitnessCompetitionfrom7Mayto28May2019

• DBhdGroupAnnualRayaDinner2019on27June2019

• DBhdGroupBadmintonChallenge2019on24August2019

• GroupTownHall01/2019on28February2019

• GroupTownHall02/2019on10October2019

• GroupTownHallforMetroParkingSingaporeon21October2019

• GroupTownHallforMetroParkingPhilippineson15November2019

• AGMofKelabSukan&KebajikanDamansaraRealtyBerhadon21November2019

WORKFORCE

Total Employees 1,411

Permanent 578

Contract 801

Part Time 32

Male 991

Female 420

Executive 303

Non-executive 1,108

Breakdown of DBhd Workforce




CORPORATESTATEMENTS


58


We are continuing to develop a more diversified workforce, taking cue from the Board’s Gender Diversity Policy. Female employees are given equal opportunities to perform and excel at work and are represented across all levels of the organisation. For FY2019, DBhd’s female employees account for 29.8 percent of our workforce in Malaysia. Gender equality is also represented at upper management level with one female Independent Non-Executive Director on the Board and four females on our ten-member Senior Management team.

We are in a people-centric business and human touch forms the core of our service offerings particularly in our IFM segment. This makes our people the key to our success. Training and education are the key thrusts within our Talent Management initiatives. This is emphasised through the Group’s continuous investment in its people in support of continuous learning.

HQ DPMC DTECH TMR MPM HCD TMR LC

Total Hours 312 120 8 192 288 32 880

External Training / Seminars

304 120 - 120 24 16 8

In-house Training 8 - 8 72 264 16 872

Training and Continued Learning Hours

Other than the external and in-house training sessions under our Talent Management initiatives, this year we have also introduced Knowledge Sharing Sessions (KSS) to promote open communication and knowledge sharing culture among our staff. Led by the respective Head of Group Divisions, these sessions aim to enhance the public speaking and interpersonal skills of our future leaders as well as to develop their personal growth.

In FY2019, a total of 107 employees participated in nine KSS sessions, which accounts for a cumulative total of 18 learning hours. We aim to increase our KSS learning hours in the future. Below are the KSS sessions that was conducted this year:

No Lead Name Topic Division Attendees Date

1 Azullaiha binti Abdullah Fraud / Non-Compliance: Three Lines of Defence

Group Internal Audit 14 12/07/2019

2 Safiah binti Adnan Claims - Employee Benefits Group Human Resources (Operation)

14 25/07/2019

3 Lokman Hakim bin Zubir A Process, it’s Mechanism and The Management

Group Procurement 14 01/08/2019

4 Suhana binti Mokhtar Revised Legal Directive / SOP Group Legal 12 08/08/2019

5 Wan Razmah binti Wan Abd Rahman

Executive Summary for Directors Resolutions: Comprehensive Guides

Company Secretary 17 05/09/2019

6 Mohd Isa bin Mohd Daud Deferred Tax Group Finance 12 30/10/2019

7 Farah Hazwani binti Mohd Zulkufli

6 Gates to Collaborate Group Corporate Planning and Transformation

12 12/12/2019

8 Auzan Syaidi bin Abdul Lateh 6 Gates to Collaborate Group Contract Advisory and Risk Management

12 12/12/2019

9 Allia binti Zainun Performance Improvement Plan

Group Human Resources (Strategy)

12 24/12/2019

59


We also provide opportunities for continuous education to enhance our employees’ path to professional development and leadership skills. In FY2019 we provided the following courses:

• Empowering Women Series under Bursa Malaysia DiversityExperience

• BECEOForum2019

• CorporateDirectorsTrainingProgrammeFundamental2.0

• Critical Thinking, Problem Solving & Leadership Skills forManagers

• 2019BusinessExcellenceCEOForum

• LeadershipProgramforSupervisors,Leaders&Managers

• NewBusinessModelMindsetforHODs

Aiming to move up the value chain, we are progressively innovating our offerings and must ensure more of our people are empowered to collaborate and innovate. We are equipping them with the right skill sets to better serve our customers’ and clients’ needs. Additionally, we have also instituted a Group-wide policy that helps our employees obtain the necessary professional certification or Continuing Professional Development (CPD) points, from the related education bodies for skills relevant to their areas of expertise, including the following:

• KerjaBangunan–HospitalforCIDB’sB29licence

• Construction Evolution 2019 (Construction, Engineering &Architectural Technology)

• KursusAutoCAD2D&3D

• IndustrialisedBuildingSystem(IBS)ProfessionalProgram

• CertificateinMolecularGastronomy

• FoodHandlerCertificate&Card

A large component of our IFM service offerings, provided through our TMR LC Services Sdn. Bhd (TMR LC) subsidiary, TMR LC also involves customer centric requirements. These include services rendered for food & beverage catering hotel and banquet management and cleaning services. This has led the Group to invest heavily in training to upskill its employees and contract staff, in areas such as:

• Housekeeping

• FoodHandling

• GroomingStandards

• ISO45001:2018Documentation&Implementation(ADI)

To meet the constant requirement for training, 13 staff from TMR LC attended an external two-day Train-the-Trainer course, to gain the necessary skills to deliver training and to share knowledge with other employees. Supervisors and team leaders were also taught basic management skills such as:

• TheRightWaytoHoldPeopleAccountable

• StepstoTakeDisciplinaryAction

Within our non-executive staff, employees who show the potential in furthering their careers are provided training such as:

• UnderstandingWorkProcessFlow

• E-OfficeSkills

• UnderstandingtheUrgent/ImportantMatrix

Underlining our commitment to ensuring Occupational Safety and Health (OSH) for all our employees, we arranged 12 employees to attend the TM Safety Passport course conducted by the National Institute of Occupational Safety and Health (NIOSH) in Bangi. This course helps workers cultivate the safety-first culture and to provide basic OSH training on the hazards and risks present in the telecommunication industry. In addition, 70 of our employees also attended an internal training on Safety and Customer Operations Performance Centre (COPC).

BUSINESS OPERATIONS

At DBhd, we are dedicated to enhancing our business performance, while embracing responsible business practices, to meet our shareholders’ expectations.

For more details on operational highlights and growth strategies, please refer to the Management Discussion and Analysis in the Annual Report on page 46.

During the year, we undertook key initiatives to develop and implement more automation solutions to improve our business performance, particularly in our IFM segment. We have moved beyond our traditional IFM offerings and expanded our facilities management services to better serve the ever-evolving needs and requirements of our clients This includes embarking on joint ventures with other companies to create new services and solutions.

Reduce, Reuse, Recycle

A key initiative in our continuous push for business sustainability is the management of cost and resources. Through close monitoring and management, we aim to minimise our environmental impact while ensuring efficient and effective use of limited and non-renewable resources. To this end, we have managed to reduce our electricity consumption by 23.9 percent as compared to the previous year.

29.4%2017 23.9%RM191,984.85

2018RM135,525.82

2019RM103,137.28




CORPORATESTATEMENTS


60

We have also rationalised our geographical spread to reduce the cost of rental in view of unutilised office space at headquarters (HQ) in Wisma Chase Perdana, which resulted in our subsidiary DPMC relocating toHQ.Consequently,theGroup’spaperusagehasrisenduetoDPMC’sheavy reliance on printed material for training purposes. DPMC holds monthly courses for all its employees and has held 11 courses over the course of 2019. The higher paper use also reflects higher level of activities, with the SRP generating the need for more printed materials to be submitted to the Board and Management Committees for considerations and approvals.

Paper Usage

• DPMC Training Handouts – 11 classes with more than 300 participants

• EXCO Papers – 6 EXCO meetings in 2019

• Board Papers – 5 BOD meetings in 2019

We recognised the increment of paper usage in the Group level and we are considering steps to improve towards the sustainability of paper usage in the future. Different initiatives such as digital platform for training modules and digital paper for meetings are underway to help us realise these initiatives.

We continue to encourage paper recycling primarily at the headquarter level by responsibly disposing our used paper. For FY2019, we have recycled nearly 90kg of paper on a quarterly basis. We aim to be more systematic in our efforts and extend this practice throughout the Group in the future.

Water Bottles

We have taken steps to stop serving bottled water during meetings as part of our initiative to reduce plastic waste at Group level. Since then, our plastic bottle waste generation has reduced by 75 percent.

To continue our push for improved environmental sustainability, we constantly remind our employees to avoid wasting resources. We’ve put up multiple public service announcements (PSAs) at visible locations that serve as reminders for our people to practice sustainability by:

• Printingonlywhennecessary

• Usingrecycledpaper

• Switchingofflightsandequipmentwhennotinuse

• Distributionofsustainability-themedcalendarforallemployees


Shredded used paper for recycling

13.8%2017 17.8%257,400 pieces

2018292,950 pieces

2019345,100 pieces

2017 75%960 usage

2018960 usage

2019242 usage

61


COMMUNITY

We are committed to supporting the Malaysia’s TVET policies and initiatives as well as our nation’s community of technologists and technicians through continuous learning and education. We believe that training and upskilling talent is the key to ensuring the Malaysian workforce could meet future challenges under Industry 4.0.

DBhd is also an active supporter of MBOT, a professional body that gives professional recognition to technologists and technicians in related technology and technical fields, with a focus on cross-disciplinary fields.

DBhd through DMPC provides technical education and training in the biomedical technology field. In 2019, DPMC successfully upskilled more than 200 technical personnel, of which 35 were then recruited by 15 medical equipment principals and distributors including Fujifilm (M) Sdn. Bhd., Canon Medical System Sdn. Bhd., and Ebdesk Malaysia Sdn.Bhd.

The DBhd Group also has two in-house Technologists (Ts.), namely:

• Ts.MohdZahiruddinbinMohdTohir(ManagingDirector,DTech)

• Ts.ElmanbinMustafaElBakri(ExecutiveDirector,DPMC)

DBhd’s two technologists will be part of MBOT’s Technological and Technical Accreditation Council (TTAC), which confers membership of MBOT’s Technology Expert Panel (TEP). The TEP conducts professional assessments for MBOT’s technology accreditation programs. On 25 Nov 2019, DPMC was awarded MBOT’s Most Supportive Industry Award in recognition of its expertise in the biomedical technology and technical fields as well as contributions in elevating the industry efficiencies.

Giving Back to the Community

Our strong presence in Pengerang, Johor since 2017 has provided us with the opportunity to give back to the local communities in which we operate in. In June 2019, we collaborated with Johor Petroleum Development Corporation ( JPDC), to be part of their Giving Tree Project which aims to give contributions to Asnaf families in Taman Bayu Damai, Pengerang, comprising of of single mothers and their children, underprivileged families and those with special needs.

Category of Asnaf Recipients in Taman Bayu Damai, Pengerang, Johor

Pax

Single mothers 45

Underprivileged 19

Underprivileged school-going children under 17 years old

11

Persons with disabilities (OKUs) 20

TOTAL 95

We also took the opportunity to contribute to our own employees who also falls in this category. A total collection of RM29,700 was distributed to 33 recipients.

CONCLUSION

In our journey to embed a strong sense of sustainability in our business and operations, DBhd is committed to establish formal procedures in internalising sustainability considerations in our organisation. We will continue to make every effort to further seek enhancement opportunities in pursuing our EES responsibilities.

Azhari bin Abd Hamid (Group Executive Director) seen here with one of the Asnaf recipients at Taman Bayu Damai, Pengerang, Johor




CORPORATESTATEMENTS

03 Corporate Governance Overview Statement 64

Audit Committee Report 67

Statement on Risk Management and Internal Control 71

Statement on Directors’ Responsibility 77

Recurrent Related Party Transactions 78

Additional Compliance Information 79

CORPORATEGOVERNANCE

BUILDING MOMENTUM TOGETHERTogether, we are building momentum to excel in all that we do, delivering effective and efficient services beyond expectations. In addition, our collaborations with key industry partners is also a key driver in our business strategy to broaden our scope as we work to further propel the Group’s growth.


64

Corporate Governance Overview StatementDISCLOSURE ON MALAYSIAN CODE ON CORPORATE GOVERNANCE

The Board of DBhd wishes to present this statement to its shareholders and stakeholders with an overview of DBhd’s application of the Malaysian Code on Corporate Governance (MCCG) practices for financial year ended 31 December 2019.

The contextual approach of how the Company applied each of the MCCG’s practices includes its explanations and alternative practices for any departure of the MCCG practices in the Company should be read together with the Corporate Governance (CG) Report of DBhd, which accompanies this annual report and published at our corporate website at www.dbhd.com.my.

In building a sustainable business and discharging its regulatory role, the Board is mindful of its culpability towards the shareholders and various stakeholders. Hence, the Board is committed in ensuring that it provides effective leadership and promotes uncompromising ethical standards in the organisation. One of the ways in which the Board achieves this is by requiring that good governance principles and practices are adhered throughout the Group.

As such, the Board fully supports all 32 practices as set out in the MCCG, by applying the best corporate governance standard through the Company’s structures, systems, processes and development of a corporate governance culture and environment, by implementing almost all of the practices in substance to achieve the intended outcomes of building and supporting a strong corporate governance culture throughout the Company.

Further, the Board has continuously reviewed, and where appropriate, has taken the necessary steps to promote thoughtful application of good corporate governance practices as well as to provide a fair and meaningful disclosure on the application of the corporate governance practices by the Group.

APPLICATION OF THE PRINCIPLES AS SET OUT IN THE MCCG

Principle A – Board Leadership and Effectiveness

The Board Charter has been revised to align with the spirit and the intended outcome of the MCCG, in the following areas:

i. Separation of positions of Chairman and GMD;

ii. Responsibilities of the Chairman;

iii. Board composition to have at least half of Independent and Non-Executive Directors (INED);

iv. Duties and responsibilities of Board, Board Committees, individual directors and GMD;

v. Gender Diversity Policy; and

vi. Board Meeting Administration

The revised Board Charter is available in our corporate website at www.dbhd.com

In addition, the Board has put in place a succession framework to provide for an orderly succession of Board and senior management in accordance with the corporate governance practices, to ensure necessary resources are in place within the Group to achieve the Group’s business objectives and strategies.

The Board is responsible to plan the strategic direction and development of the Group consistent with the best practices as recommended by the MCCG. In discharging the Board’s stewardship responsibilities, the Group’s Executive Directors, comprising of a Group Managing Director and a Group Executive Director are responsible in planning and implementing operational and corporate decisions. Alternatively, the Non-Executive and Independent Directors have to ensure corporate accountability by providing independent and unbiased opinions, advices and judgements as well as check and balance to the executive decision made in order to secure the minority shareholders’ interest in the Company.

The current composition of the Board comprises of seven (7) directors, of whom five (5) are Independent Non-Executive Directors, one (1) Group Managing Director and one (1) Group Executive Director. This composition complies with the best practice of having at least 50% representation of independent directors.

65

Corporate Governance Overview Statement

Audit Committee Report

Statement on Risk Management and Internal Control

CORPORATEGOVERNANCE

Corporate GovernanceOverview Statement (cont’d)

The Board, in ensuring the independency of the Independent directors, had emphasised in its Board Charter that the tenure of the independent directors of the Company does not exceed a cumulative term limit of nine (9) years and in the event the Company wishes to retain a particular Independent Director, beyond nine (9) years, it shall seek annual shareholders’ approval at its Annual General Meeting (AGM). However, if the Board wishes to retain the Independent Director after 12 year, the Board shall seek annual shareholders’ approval through a 2-tier voting process as recommended by MCCG. This provision has been included in its Board Charter as published in the corporate website.

The Board has established a gender policy to have at least one female director of which the current Board’s composition has already met such gender policy. The Board also recognises the importance of gender policy in senior management and the current senior management which comprises of two (2) women, also met the Board’s target of at least 18% women’s participation.

The Board believes that a truly diverse and inclusive Board will leverage on the differences in thought, perspective, knowledge, skills and industry experience, as this will ensure that Group retains its competitive edge. Diversity is a critical attribute of a well-functioning leadership team. Hence, in maintaining the good practice of diversity, the Board stouts its composition by maintaining and up strength its diversity.

To provide guidance on acceptable behavior to all directors, management and employees in operating and managing the Group’s businesses and affairs, the Code of Conduct and Ethics has been established by the Board. The Code of Conduct and Ethics has been supported by other policies which include whistleblowing policy and corporate disclosure policy and were accordingly published on the Company’s website.

The Board via its Board Remuneration and Nomination Committee (BNRC) is responsible to review and assess annually the effectiveness of the Board as a whole and the individual directors as recommended by the MCCG. The annual assessment is done based on the criteria such as competency, expected contribution and diversity representation. The evaluation for the financial year 2019 were carried out and assisted by the Company Secretary by using questionnaires as recommended by the MCCG’s best practices. The annual performance evaluations include:

i. Directors’ and Key Officers’ Evaluation

ii. Board and Board Committees Evaluation

iii. Self and Peer Evaluation for Board Audit Committees’ Members

Further duties of BNRC are stipulated in its Terms of Reference which has been published on the Company’s website.

All Directors of the Company and the Group are expected to discharge their fiduciary duties in determining the best objectives, vision and mission of the Company for the benefits and interest of all stakeholders. With the introduction of the new Section 17A of Malaysian Anti-Corruption Commission Act 2009 (MACC Act) on Corporate Liability for Corruptions, all Directors were equipped with knowledge on the implementation of MACC Act by attending the relevant in-house trainings organised by the Company in 2019.

Furthermore, the Directors’ site visit was also held to give Directors a better understanding on the Group’s business operations as well as to enhance the awareness on any risk associated with the business. The site visit also empowered the Board to have an effective channel of communication and interaction with the Company’s Management in regard to the improvements required for the business operations.

The Board is responsible to attract and retain the right talent in the Board’s composition and senior management to propel the Company’s long-term objectives by determining the remuneration of directors and senior management, which taking into account the demands, complexities and performance of the Group as well as knowledge, skills and experience required.

Practice 7.1 of the Corporate Governance Report highlighted on the commensurate remuneration awarded to the Directors’ of the Company that are based on the individual performance of the Directors by disclosing it publicly on the named basis. Nevertheless, the Board has departed Practice 7.2 by only disclosing the top five senior management’s remuneration in bands of RM100,000 instead of RM50,000 as recommended by the MCCG. The Board chooses a more general alternative disclosure of the senior management’s remuneration in order to retain the harmonised environment among the employees of the Company and to protect the confidentiality of the information. The Company’s ability to retain suitable and talented senior management is one of the Group’s strengths in its succession planning.

Principle B – Effective Audit and Risk Management

The Board has established an effective risk management and internal control framework to safeguard the Group’s business interests from risks events that may impede the achievements of its business strategies and growth opportunities besides than providing reasonable assurance to all stakeholders that internal controls are effective.

The Board conducts robust assessments of the principal risks faced by the Group by implementing a Risk Management framework to identify, assess, monitor, report and mitigate risks impacting the Group’s business and supporting activities in accordance with the Committee of Sponsoring Organis ations of the Treadway Commission’s (COSO) Internal Control-Integrated Framework.


66

In upholding the independency and effectiveness of the Board Audit Committee (BAC), the Chairman of the BAC and the Chairman of the Board are two different persons, in which the BAC is chaired by an independent non-executive director who possesses the literacy on financial knowledge and wide range of the necessary skills in discharging their fiduciary duties.

Through the BAC, the Company has established a transparent and healthy relationship with the Company’s External Auditors. The External Auditors meet and report their findings to the BAC in respect of their audit works for each financial year.

The BAC is responsible to assist the Board in ensuring the adequacy and effectiveness of the Group’s internal controls. The Board is of the view that the system of internal control and the risk management in place during 2019, are sound and sufficient to safeguard the Group’s assets, as well as shareholders’ investments, and the interests of customers, regulators, employees and other stakeholders.

The Terms of Reference of the BAC is published for reference in the corporate website at www.dbhd.com.my.

Principle C – Integrity in Corporate Reporting and Meaningful Relationship with Stakeholders

In the effort to encourage the media and analyst engagement, the Management of DBhd has conducted one (1) media and analyst briefing with the investor community on the Group’s Corporate and Business Strategies and other corporate updates. In 2019, the Company also issued 13 press statements in conjunction with the announcements of material information pursuant to the Company’s corporate disclosure policy. The issuance of press statements was not only to create awareness of the Company’s marketing plan but also to engage with other stakeholders’ communities. Shareholders of the Company were updated on the latest progress and development of the Group’s business plans through the release of press statements and announcements to Bursa Malaysia via Bursa LINK.

During the financial year under review, the Company has complied with the MCCG’s best practices by issuing the notice of its 57th AGM to the shareholders at least 28 days prior to the AGM. The Chairman of the Board chaired the 57th AGM in an orderly manner and allowed the shareholders and the proxies with the opportunity to speak and ask questions during the meeting. The Group Chief Financial Officer presented to the AGM the financial position of the Group and the senior management of the Company were also present to respond to any enquiries from the shareholders.

Moving forward, to ensure the highest level of Corporate Governance standard is consistently adhered by the Company, all Directors will be attending this year’s AGM to provide opportunities for the shareholders to effectively engage with the directors.

COMPLIANCE WITH THE MCCG

The Board is of the opinion that the Group had complied with the spirit and objectives of the MCCG. Even though, there are three (3) departures of the practices recommended in the MCCG, the Board believes that there are justifiable reasons for such and that the overall corporate governance of the Group is not in any way compromised. Nevertheless, DBhd will continue to strengthen its governance practices to safeguard the best interest of its shareholders and other stakeholders.

This Corporate Governance Overview Statement was approved by the Board on 13 May 2020.

Corporate GovernanceOverview Statement (cont’d)

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Audit CommitteeReportCOMPOSITION OF MEMBERS

The composition of the Board Audit Committee (BAC) are as follows:

1. Shahrizam bin A Shukor (Chairman - Independent Non-Executive Director)

2. Haji Abdullah bin Md Yusof (Independent Non-Executive Director)

3. Vinie Chong Pui Ling (Independent Non-Executive Director)

This meets the requirements of paragraph 15.09(1)(a) and (b) of Bursa Securities’ MMLR.

BAC Chairman, Shahrizam bin A Shukor, is an Associate Member of Certified Practising Accounting Australia and a Member of the Malaysian Institute of Accounting (MIA). Accordingly, DBhd complies with paragraph 15.09(1)(c)(ii) and 15.10 of MMLR.

MEETINGS

BAC met five (5) times during the year under review. The Directors holding executive positions, DBhd’s Internal Auditors, representatives of the DBhd’s External Auditors and members of the Management were invited to the Audit Committee Meetings (ACM).

The attendance of each BAC Member during the financial year was as follows:

Members 19/02/19 (91st ACM)

19/03/19 (Special ACM)

14/05/19(92nd ACM)

15/08/19(93rd ACM)

12/11/19(94th ACM)

Shahrizam bin A Shukor Yes Yes Yes Yes Yes

Haji Abdullah bin Md Yusof Yes Yes Yes Yes Yes

Vinie Chong Pui Ling Yes Yes Yes Yes Yes

TERMS OF REFERENCE

Objectives

The objectives of the BAC are as follows:

1. To assist the Board in discharging its responsibilities relating to the Group and DBhd’s management of principal risks, internal controls, corporate governance, financial reporting and compliance of statutory and legal requirements.

2. To provide, by way of regular meetings, a line of communication between the Board, Senior Management and External Auditors.

3. To provide emphasis on the internal audit functions by increasing the objectivity and independence of the Internal Auditors and provide a forum for discussion that is independent of the Management.

4. To review the quality of the audits conducted by the Internal and External Auditors of DBhd.




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68

Authorities

BAC is authorised by the Board:

1. To investigate any matter within its Terms of Reference.

2. To have full, free and unrestricted access to any information, records, properties and personnel of the Company and any other companies within the Group.

3. To have direct communication channels with the External Auditors and person(s) carrying out the internal audit functions or activities.

4. To obtain independent professional or other advice.

5. To convene meetings with the External Auditors, without the presence of the Management (executive members) at least once a year.

Duties and Responsibilities

Duties and responsibilities of the BAC are as follows:

1. To review with the Management and recommend acceptance or otherwise of major accounting policies, principles and practices especially on management accounting, financial reporting, risk management and business practices.

2. To review the Group’s quarterly and year-end financial statements before submission to the Board.

3. To consider the appointment of the External Auditors, the terms of reference of their appointment, the audit fee and any proposal of their resignation as auditors.

4. To review with the External Auditors, the nature and scope of their audit plans and their audit reports.

5. To review the External Auditor’s Management Letter and discuss any matter that the External Auditors may wish to raise in the absence of Management, where necessary.

6. To review the Internal Audit Charter and the yearly audit plan and budget to ensure that the internal audit functions are adequately resourced to undertake its functions and have appropriate standing in the Group.

7. To review the internal audit functions and the result of the internal audit programs or investigations undertaken and whether or not Management has taken appropriate actions on the recommendations made by the Internal Auditors.

8. To review any related party transactions and conflict of interest situation that may arise within DBhd or Group including any transactions, procedures or courses of conduct that raise questions of Management’s integrity.

9. To review inspection and examination reports issued by any regulatory authority and to ensure prompt and appropriate actions are taken in respect of any findings.

Audit Committee Report (cont’d)

10. To receive reports and deliberate on the implementation of the risk-control process and the progress of risk management activities undertaken by the Group.

11. To perform any other functions as authorised by the Board

Summary of Activities

The BAC’s activities during 2019 comprised the following:

A) Financial Reporting

1. BAC reviewed the financial statements and theQuarterlyResults as presented by GCFO in accordance with the approved accounting standards adopted by the Malaysian Financial Reporting Standard (MFRS).

2. GCFO had presented to the BAC, on quarterly meetings that:

i. Appropriate accounting policies had been consistently adopted and applied;

ii. The going concern basis applied in the Annual Financial Statements and Consolidated Financial Statements was appropriate;

iii. Prudent judgements and reasonable estimates had been made in accordance with the requirements set out in the MFRSs;

iv. Adequate processes and controls were in place for effective and efficient financial reporting and disclosures under the MFRSs;

v. The Annual Financial Statements and QuarterlyConsolidated Financial Statements did not contain material misstatements and gave a true and fair view of the financial position of the Group and the respective companies within the Group for financial year 2019;

vi. Quarterly results were reviewed by the ExternalAuditors, Jamal, Amin & Partners ( JAP) prior to the announcement to Bursa Securities.

3. Significant issues reviewed by the BAC during the financial year were as follows:

i. Compliance with MFRS

ii. Compliance with statutory requirements including Appendix 9B of the MMLR

iii. Budget and expenditure

iv. Unexpected expenses

v. Financial performance

vi. Audit findings reports

vii. Statutory requirements (EPF,SOCSO & TAX)

4. The BAC was satisfied with the issues reviewed.

69


Summary of Activities (cont’d)

The BAC’s activities during 2019 comprised the following: (cont’d)

B) Internal Audit Functions

1. The Internal Auditors ultimately report to the BAC and administratively to GMD. They have carried out their internal audit functions for the Group independently with impartiality, proficiency and due professional care.

2. The core function of internal audit is to perform an independent appraisal of the Group’s activities as a service to the Management. The internal audit functions play an important role in helping Management to establish and maintain the best possible internal control environment within the Group. The sound internal control environment would ensure the Group’s compliance with legal and regulatory requirements, safeguarding of assets, adequacy of records, prevention or early detection of frauds, material errors and irregularities as well as efficiency of operations.

3. The Internal Auditors had ensured that:

i. The internal audit plans and programs were appropriately developed to commensurate with the Group’s activities and appropriate focus and resources were allocated;

ii. The internal audit plans and programs were continuously reviewed and where necessary were adjusted accordingly to reflect any significant changes in the Group’s business environment, structure, activities, risk exposures or systems; and

iii. The activities of internal audit are consistent with the long term goals of the Group and are in line with its internal controls, policies and procedures

4. The BAC met the Internal Auditors quarterly and the following topics were discussed:

i. Internal audit reports

ii. Follow up audit reports

iii. Unresolved audit findings

5. The Internal Auditors conducted a risk based approach during the development of the annual audit plan.

The coverage of auditable areas takes into consideration the functions of governance, review of controls and compliance, operational risks, audit history and request by the top management or the BAC that is aligned to the Company’s strategic objectives.

6. The scope of internal audit covers the audits of all of the Group’s operational units, including its subsidiary companies based on the approved 2019’s audit plan. Among the key areas covered during the financial year were:

i. Revenue Recognition

ii. Billings

iii. Debtors’ and Creditors’ Ageing

iv. Bank Reconciliation

v. Inventory Management

vi. Operations and Maintenance

vii. Planning

viii. Project Management

ix. Procurement

x. Asset Management

xi. Financial Management

xii. Human Resources Management

xiii. Contracts

xiv. Legal and Governmental Regulations

xv. Standard Operating Procedures (SOPs)

7. The Internal Auditors presented audit reports that contain purpose, scope and results of the audit, including findings, conclusions and recommendations, management response and corrective actions in areas with significant risks and internal control deficiencies to BAC on a quarterly basis. During the year, 25 audit activities (including 18 audits and 7 follow-ups) were undertaken throughout the Group and 25 audit reports issued.

8. The Internal audit findings in 2019 continued to reflect a moderate internal control system. Internal audit reports provide a formal means of communicating audit results and recommended actions to the Management and BAC. Audit reports provide the basis for the BAC to highlight significant weaknesses and the Management’s proposed remedial measures to the Board. The Internal Auditors’ recommendations are for reducing risks, strengthening internal controls and correcting errors. The BAC was satisfied with the Internal Auditors’ review and instructed the Management to take all necessary actions to resolve the issues raised by Internal Auditors.

9. As at 31 December 2019, IAD had a total of five auditors, comprising staff from various backgrounds. The total costs incurred during the financial year for the internal audit functions for the Group level was approximately RM396,223 as compared to RM290,424 in 2018.




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Summary of Activities (cont’d)

The BAC’s activities during 2019 comprised the following: (cont’d)

C) External Audit

1. On 19 March 2019 and 12 November 2019, the BAC had private meetings with the External Auditors without the presence of the GMD, Management and Internal Auditors. The BAC questioned about Management’s cooperation with the External Auditors, their sharing of information and the proficiency and adequacy of resources in financial reporting functions with applicable MFRSs. The BAC Chairman also requested the External Auditors to inform the BAC at any time should they be aware of incidents or matters in the course of their audits or reviews that needed the BAC’s attention.

2. Policies established and adopted by the Board for the BAC to assess suitability and independence of External Auditors. On 19 February 2020, the BAC performed an annual assessment on lead audit engagement partner and engagement team which covered their performance and quality of audit, communications with the BAC and Bursa Malaysia, and JAP’s independence, objectivity and professionalism.

3. Assessment questionnaires were used as a tool to obtain input from DBhd’s personnel who had considerable contact with the external audit team throughout the year. A five-point scale was used to evaluate JAP’s performance which encompassed on their ability to provide advice, suggestions or clarifications pertaining to the presentation of financial statements, ability to provide realistic analysis of issues using technical knowledge and independent judgment, and maintain active engagement, via both verbal and written communication during the audit process, as well as their responsiveness to issues.

4. The BAC was satisfied with the suitability of JAP, based on the quality of services and sufficiency of resources they provided to the Group. The BAC also acknowledged the communication and interaction with the lead audit engagement partner and engagement team, which revealed their independence, objectivity and professionalism.

5. Result of the performance assessment of JAP for 2019 supports the BAC’s recommendation to the Board for approval of the appointment of JAP as External Auditors for the financial year ending 31 December 2020.

6. The Board at its meeting approved the BAC’s recommendation to appoint JAP, subject to the shareholders’ approval being sought at the forthcoming 58th AGM on the appointment of JAP as external auditors of DBhd for the financial year ending 31 December 2020.

7. On 31 December 2019, the GCFO reported that audit fees incurred in 2019 amounted to RM476,800 to the External Auditors for the financial year 2019. The GCFO also sought the BAC’s approval for the proposed audit services to be provided by the External Auditors in the same year. The non-audit service fees incurred during the financial year amounted to RM17,600.

8. JAP had provided a written assurance on 13 May 2020 to the BAC that, in accordance with the terms of all relevant professional and regulatory requirements, they had been independent throughout the audit engagement for 2019.

71

Statement on Risk Manangement and Internal ControlThe Board is pleased to provide the Statement on Risk Management and Internal Control prepared as stipulated in the Malaysian Code on Corporate Governance (MCCG) and in accordance with the Statement on Risk Management and Internal Control – Guidelines for Directors of Listed Issuers endorsed by Bursa Malaysia Securities Berhad. This guideline outlines the processes to be adopted by the Board in reviewing the adequacy and effectiveness of the risk management and internal control system of the Group.

In assessing the adequacy and integrity of the Group and in sustaining the Group’s assets and shareholders’ investment, a systematic approach in the management of the risks was put in place. Accordingly, consistent with the guideline, this statement was prepared and issued by the Group Contract Advisory and Risk Management Division of DBhd.

BOARD RESPONSIBILITY

The Board is committed to establish and maintain a sound, effective and efficient system of risk management and internal control to safeguard shareholders’ investment and the Group’s assets. There is an ongoing review process undertaken by the Board to ensure adequacy and integrity of our risk management and internal control system. The system is designed to identify and manage the Group’s risk within the acceptable risk tolerance, rather than to eliminate the risk of failure in achieving the Group’s corporate objectives in accordance with the Group’s strategy. It can only provide reasonable assurance but not absolute assurance against material financial misstatement, loss or fraud.

RISK MANAGEMENT GOVERNANCE

The Board regards risk management as an integral part of all business operations including strategic, commercial, operational and financial areas. Hence, the Board explicitly assumes the responsibility of identifying principal risks and ensures the implementation of a dynamic system to manage risk exposure within the acceptable level of tolerance. While an effective and sustainable internal control is a process crafted in managing the risks and their impact, it is also a notion recognised by the Board that it shall be a live system in the management of risk rather than the elimination of risk.

To fulfil its responsibility, the Board, as a whole or through delegation to the Risk Management Committee (RMC), reviews the adequacy and integrity of the Group’s risk management system which encapsulates the key processes of risk identification, assessment, mitigation, monitoring and reporting.

The Board has also received assurance from the then Group Managing Director (GMD), the Group Executive Director (GED) and the Group

Chief Financial Officer (GCFO) that the Group’s risk management and internal control system is operating adequately and effectively, in all material aspects.

The Board confirms that there is an ongoing and constant process of risk management and mitigation by the Group throughout the year in review and up to the date of approval of the Annual Report and Financial Statement. The Group includes material joint ventures and associated companies. The following Board Committees have been set up to promote transparency, governance and accountability:

Board Audit Committee

Board Tender Committee Board Nomination and Remuneration Committee

Board Risk Management Committee

Management

The Management, in evaluating and determining key strategic and operational decisions; provides consistent monitoring for risk management and internal control implementation across the Group. Furthermore, the Management also ensures that corporate level risks are being reviewed and actions are appropriately followed up by respective Divisions.

In monitoring, directing and providing on-going assessment to ensure that the Group’s businesses follow its business plans and established policies, the Management has set up the following committees:

Group Management Procurement

Committee

Group ExecutiveCommittee

Group Human Resources Committee




CORPORATEGOVERNANCE


72

RISK MANAGEMENT FRAMEWORK

The Board has established a risk management framework designed by the Company’s Directors and the Risk Management Committee comprises of the Management of the Company and the Group Contract Advisory and Risk Management Division; which mainly emphasises the parameters of identification, evaluation, monitoring and management of principal risks in line with the following objectives:

The Board has also adopted Committee of Sponsoring Organisations of the Treadway Commission’s (COSO) Enterprise Risk Management – Integrated Framework and Internal Control – Integrated Framework as supplementary guidelines of the risk management and internal control process which comprise of the following five fundamental components that includes:

Effectiveness and efficiency of business

operations

Reliability of financial reporting

Compliance with applicable laws and

regulations

ControlEnvironment

Risk Assessment & Evaluation

ControlActivities

System ofInternal Control

Information& Communication

Process• Accommodated the

Board with an assurance of the implementation of internal control system

• Presented comprehensive report on financial performance and key business indicators to the Board

• Practised a strong governance and reporting mechanism between the Internal Auditors and Board of Audit Committee

• Provided business owners with respective risk assessment outcome

• Adopted a Term of Reference at Board of Risk Management Committee for consistent supervision and reporting on risk management process

• Presented risk management update to the Board of Risk Management Committee

• Safeguarded all key risk index of the Company with action and mitigation plans with constant monitoring

• Established a risk management process and engagement on quarterly basis

• Updated the Risk Management Committee on the outcome of every risk assessment

• Formulated a Risk Management Framework as a guidance in identifying, assessing, managing and reporting of the risks

• Adopted a Code of Conduct in preserving internal control and governance

Statement on Risk Management and Internal Control (cont’d)

73


RISK MANAGEMENT PROCESS

The Group’s risk management process is a five-step process of risk engagement, risk assessment and risk treatment in the context of both external and internal environments. This process is applied throughout the Group, whereby risks are identified, assessed, mitigated, reviewed and communicated to the Board, Management and relevant stakeholders.

Additionally, the results of every risk management process functions as respective risk profiles for all divisions, departments and subsidiaries in the Group.

Risk ManagementProcess

IDENTIFYRISK

ASSESSRISK

PLAN RESPONSE STRATEGY

IMPLEMENTMITIGATIONSTRATEGY

MONITORPERFORMANCE

01

0203

04

05

Impact

Plan

Self-Assessment

Risk Owner

Risk Owner

Likelihood

Accept Share Mitigate Avoid




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RISK MONITORING AND RESULT FOR THE YEAR 2019

In the financial year ended 31 December 2019 (FY2019), the Group established a risk profile scoring and prioritisation matrix as a risk management tool in assessing severity and probability of a particular risk and thereafter the matrix was used to prioritise the probability of the risk occurrence against its magnitude of impact.

Magnitude of Severity

Identification for DBhd Group Risk

Prob

abili

ty o

f O

ccur

renc

e

Risk Prioritisation

Low SeverityHigh Probability

3 - 8

Low SeverityLow Probability

1 - 4 (L)

High SeverityHigh Probability

20 - 25

High SeverityLow Probability

9 - 16

4 Key Risk Indicators (KRI)

HC Duraclean Sdn. Bhd.

Metro Parking(M) Sdn. Bhd.

Damansara PMC Services Sdn. Bhd.

Damansara Realty Berhad

Source: The identification of KRIs as presented during Board Risk Management Committee (BRMC) of the Group

Figure 1: The Risk Prioritisation Matrix as presented to the BRMC No.1/2017 in February. (Source: Corporate Planning and Transformation Division (CPT), Feb 2017)

• Riskpriorityisgiventothosewithhighseverityandprobabilityscore.• Asat31December2019,atotalof4KeyRiskIndicators(KRIs)*wereidentified

with 7 Action Plans.

1 1 1 1

75


RISK REVIEW FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

Throughout FY2019, the Group via its Group Contract Advisory and Risk Management Division has conducted quarterly risk engagement sessions with all divisions. The monitoring reports were assessed and analysed for Management deliberation and subsequently presented at the Board of Risk Committee meeting, held once in the financial year of 2019.

The risk reports highlighted critical risks, supplemented with mitigation actions as well as expected progress timeline for the risk treatment to be monitored and completed. Upon identifying significant risks posed within the Group, the management of the risks for the FY2019 is outlined below:

INTERNAL AUDIT FUNCTION

The Group’s Internal Audit Department (IAD) reports directly to the Board Audit Committee. Its role is to provide the Board assurance regarding the adequacy and integrity of internal controls across the Group.

IAD reviews the internal control processes across all key activities within the Group’s businesses by adopting a risk-based internal audit approach and reports directly to the Audit Committee. Reports on internal audit findings together with recommendations for the Management’s action are presented to the Board of Audit Committee. The Board Audit Committee subsequently reported these findings and Management’s actions to the Board of Directors on a quarterly basis or as and when appropriate.

For each financial year, IAD prepares an annual Internal Audit Plan and presents it to the Board Audit Committee for their approval. The scope of work in the Internal Audit Plan encompasses review of financial and operational activities within the Group.

IAD has completed the planned audits for FY2019 and will closely monitor the implementation progress of its audit recommendations to ensure that all major risks and control concerns have been duly addressed by the Management. All internal audit reports together with the recommended action plans and their implementation status have been presented to the Management and Audit Committee.

01 02 03




CORPORATEGOVERNANCE

RISK ENVIRONMENTStiff and hard economy in 2019 has influenced difficulty in expanding business operations and segments of the Group.

-----------------------------------------

The Group has taken a contextual and conceptual approach in handling these impacts by introducing a risk management process.

RISK TREATMENTThe Board adopted a thorough risk management process by ensuring that risk assessment are constantly executed throughout the Group.

-----------------------------------------

The Board also monitored continuous risks assessment and relative risk mitigation plans in ensuring productivity and betterment to the Group.

RISK OPERATIONThe Group introduced systematic measure of risk management process conducted quarterly for all divisions and subsidiaries of the Group.

-----------------------------------------

The Group communicated and reported results and outcome of every risk management update to the Board for way forward and improvement plan.


76

STATE OF INTERNAL CONTROL DURING THE PERIOD UNDER REVIEW

The Board is satisfied with the adequacy, effectiveness and integrity of the systems of risk management and internal control and is committed to improve when necessary to further enhance the Group’s risk management and internal control system. The system is regularly reviewed by the Board Audit Committee and starting from 2019 onwards the Board Risk Committee will enhance the implementation and monitoring of risk management of the Group.

REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

As required by Paragraph 15.23 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the External Auditors have reviewed this Statement on Risk Management and Internal Control. Their limited assurance review was performed in accordance with Audit and Assurance Practice Guide (AAPG 3) issued by the Malaysian Institute of Accountants. AAPG 3 does not require External Auditors to form an opinion on the adequacy and effectiveness of the risk management and internal control systems of the Group.

This statement is made in accordance with the resolution of the Board of Directors dated 13 May 2020.


77

Statement on Directors’ Responsibility

Statement on Directors’ResponsibilityThe Directors consider that, in preparing the financial statements of the Company and of the Group for the financial year ended 31 December 2019, the Company and the Group have used appropriate accounting policies, consistently applied and supported by reasonable and prudent of judgements and estimates. The Directors also consider that all applicable approved accounting standards in Malaysia have been followed and confirm that the financial statement have been prepared as an ongoing process basis.

The Directors are responsible for ensuring that the Company and its subsidiaries keep accounting records which disclose with reasonable accuracy at any time the financial statements comply with the provisions of the Companies Act, 2016. The Directors are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

This Statement is made in accordance with the resolution of the Board of Directors dated 13 May 2020.


CORPORATEGOVERNANCE


78

Transacting Parties Relationship of Transacting Party

Nature of Transaction Aggregate Value of Transaction During the Financial Year 2019 (RM’000)

JCorp Group - DRP JCorp is a substantial shareholder of DBhd, by virtue of Section 7 of the Act

Sale of houses, shops, shop offices and other types of development on land registered in the name of JCorp Group for which DBhd has acquired from JCorp Group the rights to develop the said land. The entire proceeds of the sale accrue to DBhd Group

11,873

JCorp Group - MPM JCorp is a major shareholder of DBhd by virtue of Section 7 of the Act

Rental of spaces for parking operations to Metro Parking

3,022

KPJ Group - MPM KPJ is an associated of JCorp. JCorp is a substantial shareholder of DBhd by virtue of Section 7 of the Act

Rental of spaces for parking operations to Metro Parking

2,305

JCorp Group - TMR JCorp is a substantial shareholder of DBhd, by virtue of Section 7 of the Act

Facility management services for commercial buildings provided by TMR Urusharta

1,120

KPJ Group - HCD KPJ is an associated of JCorp. JCorp is a substantial shareholder of DBhd by virtue of Section 7 of the Act

Cleaning services offered by HC Duraclean and other related expenses (i.e. rental of cleaning equipment, sales of toiletries, rental of toilet equipment and others)

16,803

JCorp Group - HCD & TMR

JCorp is a substantial shareholder of DBhd, by virtue of Section 7 of the Act

Cleaning services offered by HC Duraclean and TMR Urusharta, other related expenses (i.e. rental of cleaning equipment, sales of toiletries, rental of toilet equipment, landscaping and other related activities)

1,208

Dato’ Daing A Malek Bin A Rahaman - DRJ

Dato’ Daing A Malek is a substantial shareholder of DBhd by virtue of Section 8 of the Act

Sale of houses, shops, shop offices and other types of development, acquisition or disposal of land or land-based property in the ordinary course of business of not more than 10% of any one of the percentage ratios in the Listing Requirements

4,444

Recurrent Related Party Transactions

79

Additional Compliance InformationAUDIT FEES

The fees paid/payable to the External Auditors, Messrs. Jamal, Amin & Partners ( JAP) in relation to the audit fees for the financial year ended 31 December 2019 are as follows:

Group (RM’000) Company (RM’000)

Audit fees 384 67

Total 384 67

MATERIAL CONTRACT

Except as otherwise disclosed in this report, there were no material contracts involving Directors and Substantial Shareholders entered by Damansara Realty Berhad for the FY2019.

RELATED PARTY TRANSACTIONS AND RECURRENT RELATED PARTY TRANSACTIONS (RPT AND RRPT)

All RPT including RRPT entered into by the Group were made in the ordinary course of business and on substantially the same terms as those prevailing at the time for comparable transactions with other persons or charged on the basis of equitable rates agreed between the parties. All RPT are reviewed by the Board Audit Committee and reported to the Board.

At the forthcoming AGM to be held on 26 August 2020, the Company intends to seek its shareholders’ approval to renew the existing mandate for recurrent related party transactions of a revenue or trading nature. The details of the shareholders’ mandate to be sought will be furnished in the Circular to Shareholders dated 11 June 2020 attached to this Annual Report.

Recurrent Related Party Transactions

Additional Compliance Information

CORPORATEGOVERNANCE

04 Directors’ Report 82

Statement by Directors 86

Statutory Declaration 86

Independent Auditors’ Report 87

Statement of Comprehensive Income 92

Statement of Financial Position 93

Statement of Changes in Equity 95

Statement of Cash Flows 98

Notes to the Financial Statements 100

FINANCIALSTATEMENTS

IMPROVING EFFICIENCIES, UPHOLDING INTEGRITYOur drive for high-performance is a cumulation of our WINNING mindset in all that we do. Our values-driven leadership continues to be the impetus for us to go beyond to meet the ever-evolving expectations of the industry and our stakeholders.


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Directors’ Report

The Directors are pleased to submit this report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2019.

Principal Activities

The principal activities of the Company are investment holding and project management.

The principal activities of the subsidiaries are described in Note 18 to the financial statements.

There has been no significant change in the nature of the principal activities during the financial year.

Results

Group Company

RM’000 RM’000

Profit for the year 22,794 1,538

Profit attributable to: Owners of the parent 23,078 1,538 Non-controlling interests (284) -

22,794 1,538

There was no material transfer to or from reserves or provisions during the financial year other than as disclosed in the financial statements.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature except as disclosed in the notes to the financial statements.

Reserves and Provision

There there was no material transfer or from reserves or provisions during the financial year except as disclosed in the financial statements.

Dividends

No dividends have been paid or declared since the end of the previous year. The directors do not recommend dividend to be paid in respect of the current financial year.

Bonus Issues of Warrants

The Warrants are listed on the Main Market of Bursa Malaysia Securities Berhad with effect from 8 November 2017. Each Warrant carried the right to subscribe for 1 bonus issue of warrants for 2 shares of RM0.58 each in the Company at any time from 4 October 2017 up to the expiry date on 4 December 2020, at an exercise price of RM0.58 for each new share. Any warrant not exercised by the expiry of the exercise period will lapse and cease to be valid for all purposes.

No warrants were issued and exercised during the financial year.

Share and Debentures

The Group and the Company did not issue any shares or debentures during the year.

Share Options

No option have been granted by the Company to any parties during the financial year to take up unissued shares of the Company.

No shares have been issued during the financial year by virtue of the excersice of any option to take up unissued shares of the Company. As of the end of the financial year, there were no unissued shares of the Company under options.

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Directors’ Report (cont’d)

Directors

The names of the directors of the Company in office since the date of the last report and at the date of this report are:

Dato’ Ahmad Zahri bin Jamil (Chairman)Dato’ Mohd Aisom bin OmarHaji Abdullah bin Md YusofShahrizam bin A ShukorVinie Chong Pui LingTs. Brian Iskandar bin Zulkarim (Resigned on 18 March 2020)Azhari bin Abdul Hamid (Ceased on 6 May 2020)

Directors’ Interest

According to the register of directors’ shareholding under section 59 of the Companies Act, 2016, the interests of directors in office at the end of the year in the ordinary shares of the Company and its related corporations during the financial year are as follows:

Number of ordinary shares

Name of director 01.01.2019 Acquired Sold 31.12.2019

Direct Interest in the Company:

Dato’ Ahmad Zahri bin Jamil 20,000 - - 20,000

None of the other directors in the office at the end of the financial year have interest in shares of the Company or its related corporations during the year.

Directors’ Remunerations

The details of the directors’ remuneration paid or payable to the directors of the Group and of the Company during the financial year are disclosed in Note 11 to the financial statements.

Indemnifying Directors, Officers or Auditors

The directors and officers of the Group and of the Company are covered by Directors and Officers liability insurance for any liability incurred in the discharge of their duties, provided that they have not acted fraudulently or dishonestly or derived any personal profit or advantage. The insurance is maintained on the group basis by the Company and the premium incurred during the financial year amounted to RM52,000.

No indemnities have been given or insurance premium paid for auditor of the Company.

Directors’ Benefits

During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

Since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.

Directors’ Report Statement by Directors Statutory DeclarationFINANCIAL STATEMENTS


84


Other Statutory Information Before the financial statements of the Group and of the Company were prepared, the directors took reasonable steps:

(a) to ascertain that proper action had been taken in relation to the writing-off of bad debts and the making of allowance for doubtful debts and satisfied themselves that there were no known bad debts and that adequate allowance had been made for impairment losses on receivables; and

(b) to ensure that any current assets which were unlikely to be realised at their book values in the ordinary course of business including the value

of current assets as shown in the accounting records of the Group and of the Company have been written down to an amount which the current assets might be expected so to realise.

As of the date of this report, the directors are not aware of any circumstances:

(a) that would require the writing-off of bad debts or the amount of the allowance for doubtful debts inadequate to any substantial extent in the financial statements of the Group and of the Company; or

(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or

(c) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company

misleading or inappropriate; or (d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements of the Group

and of the Company misleading.

As of the date of this report, there does not exist:

(a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or

(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.

No contingent or other liability has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet its obligations as and when they fall due.

In the opinion of the directors: (a) the results of the operations of the Group and of the Company during the year were not substantially affected by any item, transaction or event

of a material and unusual nature; and (b) except as disclosed in Note 37 to the financial statements, there has not arisen in the interval between the end of the financial year and the

date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.

Holding Company

The Company is a subsidiary of Seaview Holdings Sdn. Bhd., a company incorporated in Malaysia.

85


Auditors’ Remunerations

Total amounts paid to or receivable by the auditors as remunerations for their services as auditors are as follows:

Group Company

2019 2019 RM’000 RM’000

Statutory audit 384 67

Auditors The auditors, Messrs. Jamal, Amin & Partners, Chartered Accountants, have indicated their willingness to accept reappointment in accordance with Section 267(4) of the Companies Act, 2016. Signed on behalf of the Board of Directors in accordance with a resolution of the directors dated 13 May 2020.

Dato’ Ahmad Zahri bin Jamil Haji Abdullah bin Md Yusof

Kuala Lumpur13 May 2020

Directors’ Report Statement by Directors Statutory DeclarationFINANCIAL STATEMENTS


86

We, Dato’ Ahmad Zahri bin Jamil and Haji Abdullah bin Md Yusof, being two of the directors of Damansara Realty Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 92 to 162 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2019 and of their financial performance and cash flows for the year then ended. Signed on behalf of the Board in accordance with a resolution of the directors dated 13 May 2020.

Dato’ Ahmad Zahri bin Jamil Haji Abdullah bin Md Yusof Kuala Lumpur

I, Zain Azrai bin Zainuddin, being the officer primarily responsible for the financial management of Damansara Realty Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 92 to 162 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by theabovenamed, Zain Azrai bin Zainuddinat Kuala Lumpur in the Federal Territoryon 13 May 2020. Zain Azrai bin Zainuddin (MIA: 15691) Before me,

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

Statutory DeclarationPursuant to Section 251 (1) of the Companies Act, 2016

87

Independent Auditors’ Reportto the Members of Damansara Realty Berhad

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Damansara Realty Berhad, which comprise the statements of financial position as at 31 December 2019 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 92 to 162.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 December 2019, and of their financial performance and their cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia.

Basis for Opinion

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

Independence and Other Ethical Responsibilities

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Statement by Directors

Statutory Declaration Independent Auditors’ Report

FINANCIAL STATEMENTS


88

Independent Auditors’ Reportto the Members of Damansara Realty Berhad (cont’d)

Key Audit Matters How our Audit Addressed the KAM

1. Revenue Recognition (Note 4 to the financial statements)

The Group has four major operating segments which comprise of the following:

(i) Holding Company; (ii) Integrated Facility Management (IFM); (iii) Property and Land Development (PLD); and (iv) Project Management Consultancy (PMC).

The core principle of MFRS 15 is whereby an entity recognises revenue to depict the transfer of promised good or services to customers in an amount that reflects the consideration to which entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with that core principle by applying the following steps:-

(i) Identify the contract(s) with a customer; (ii) Identify the performance obligations in the contract; (iii) Determine the transaction price; (iv) Allocate the transaction price to the performance obligations

in the contract; and (v) Recognise revenue when (or as) the entity satisfies a

performance obligation.

Our audit procedures included, among others:

• ReviewedthemethodandbasisusedbytheGrouptorecogniserevenue.

• Evaluatedtheapplicationofmethodsandreasonablenessofthebasis used by management to recognise the revenue;

• Performed test on the completeness of the data used bymanagement; and

• Assessed the reasonableness of the percentage of completionfor the work performed by agreeing to supporting documents i.e, sales and purchase agreements, agreements and progress reports with acknowledgement of acceptance by the customers et cetera.

2. Valuation of Assets

a. Trade and other receivables (Note 23 to the financial statements)

The Group’s exposure to credit risk arises principally from its receivables from customers.

The MFRS 9 financial instrument Financial Instruments became effective on 1 January 2018 for the Group. MFRS 9 requires the Group to change accounting policies to account for financial instruments. New judgments have been applied to classify financial assets and to measure impairment loss using the expected credit loss model. The adoption of MFRS 9 and recoverability of trade receivables is a key audit matter as the recoverability and the level of impairment loss of trade receivables involved the Group’s judgement based upon the debtors’ credit risk evaluation, historical payment trends, subsequent to year end collections. These factors could have a material impact on the level of impairment loss determined by the Group.


• Wetestedtheaccuracyoftradereceivablesageing;

• We assessed the recoverability of receivables by checking pastpayment trend and assessing the receipts during the year and subsequent to year end collections. We also considered receivables where there is evidence that the credit quality of the debtor is considered a risk;

• Weevaluatedthereasonablenessofkeyjudgmentsandestimatesaccording to MFRS 9, including selection and application of methods, assumptions and data in making the estimates; and

• Weassessedthecompleteness,accuracyandappropriatenessofdisclosures in the financial statements as required by MFRS 9.

89

Key Audit Matters (cont’d)

Key Audit Matters How our Audit Addressed the KAM

2. Valuation of Assets (cont’d)

b. Net realisable value of completed property units (Note 16 to the financial statements)

As at 31 December 2019, the carrying amount of the completed property units of the Group, which are stated at the lower of cost and net realisable value, amounted to RM88 million and represented 21% of the Group’s total current assets. Management applies significant judgement in determining the net realisable value of the completed property units based on recent sales transactions of similar properties or comparable properties in similar or nearby locations net of estimated cost necessary to complete the sale.


• Assessed the development progress of the project by reviewingproject schedules;

• We testedmanagement’s assessment of net realisable value bycomparing it to recent transacted prices of similar or comparable completed property units and taking into consideration the estimated selling costs and current market sentiments; and

• Wealsophysicallysightedtotheindividualsignificantcompletedproperty units, focusing on long-aged property units, to ascertain if any writedown was warranted due to physical obsolescence and deterioration of the units.

3. Right of Use (Note 15 to the financial statements)

Right of use asset is defined as an asset that represent a lessee’s right to use an underlying asset for the lease term.

Underlying asset is an asset that is the subject of a lease, for which the right to use that asset has been provided by a lessor to a lessee.

Lease is contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration.

The Group has substantial number of leases which falls under the governing standard of MFRS 16 which has come into effect from 1 January 2019.

The new MFRS 16 introduces a single accounting model and requires a lessee to recognise assets and liabilities for the rights and obligations arising from all leases and hence eliminates the distinction between finance leases and operating leases.

The new standard supersedes the previous governing standard (MFRS 117 Leases) where under the old standard, lessees and lessors are required to classify their leases as either finance leases or operating leases and account for those two types of leases differently. MFRS 117 requires a lessee to recognise assets and liabilities arising from finance leases but not from operating leases.

The measurement of right to use the assets and lease liabilities requires the application of significant judgement and increased complexity which includes the identification and recognition of off balance sheet items into on balance sheet items.


• Obtainedandverifiedleasinglistingsreceivedfrommanagementsof the Group to leases contracts;

• Evaluated the application of the method used by the Group’smanagements and the reasonableness of the basis used by managements to compute right of use, lease liabilities, amortisation expenses and interest expenses;

• ReassesstheGroup’sleasesassessmentsbyreperformanceofthelease assessments in accordance to MFRS 16; and

• Reviewcomponentsauditors’workingsontheleasingassessments.


Independent Auditors’ Report

Statements of Comprehensive Income

Statements of Financial Position



90

Information Other Than the Financial Statements and Auditors’ Report Thereon

The directors of the Company are responsible for the other information. The other information comprises the Director’s Report but does not include the financial statements of the Company and our auditors’ report thereon.

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

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

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

Responsibilities of the Directors for the Financial Statements

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

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

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

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

• Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriateinthecircumstances,but not for the purpose of expressing an opinion on the effectiveness of the Group’s and of the Company’s internal control.

• Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelateddisclosuresmadebythedirectors.

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


91

Auditors’ Responsibilities for the Audit of the Financial Statements (cont’d)

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

• Evaluatetheoverallpresentation,structureandcontentofthefinancialstatementsoftheGroupandoftheCompany,includingthedisclosures,and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficientappropriateauditevidence regarding thefinancial informationof theentitiesorbusinessactivitieswithin theGroup toexpress an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible fo our audit opinion.

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

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

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

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 2016 in Malaysia, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the accounts and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 18 to the financial statements, being accounts that have been included in the consolidated accounts.

(c) We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

(d) Our audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment required to be made under Section 266(3) of the Act.

Other Matters

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

Jamal, Amin & Partners Ahmad Hilmy bin JohariAF: 1067 No. 2977/03/22( J)Chartered Accountants Chartered Accountants

Kuala Lumpur, Malaysia13 May 2020







92

Statements of Comprehensive IncomeFor the Financial Year Ended 31 December 2019

Group Company Note 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Revenue 4 293,459 304,125 10,339 13,288 Cost of sales (223,872) (222,668) - -

Gross profit 69,587 81,457 10,339 13,288 Other items of income: Interest income 5 394 290 13 26 Dividend income from subsidiaries 6 - - - 680 Other income 7 10,208 7,951 7,711 20,262 Other items of expense: Depreciation (3,015) (2,164) (571) (115) Finance costs 8 (2,683) (1,252) (122) (55) Employee benefits expense 9 (33,222) (33,753) (11,240) (10,426) Other expenses (27,177) (26,413) (4,528) (5,848) Share of profit of associate company 11,500 - - -

Profit before tax 10 25,592 26,116 1,602 17,812 Income tax expense 12 (2,798) (6,575) (64) (133)

Profit for the year 22,794 19,541 1,538 17,679

Other comprehensive income/(loss), net of tax Foreign currency translation differences for foreign operations 2,233 (41) - -

Total comprehensive income for the year 25,027 19,500 1,538 17,679

Profit attributable to: Owners of the parent 23,078 19,120 1,538 17,679 Non-controlling interests (284) 421 - -

22,794 19,541 1,538 17,679

Total comprehensive profit attributable to: Owners of the parent 25,311 19,079 1,538 17,679 Non-controlling interests (284) 421 - -

25,027 19,500 1,538 17,679

Group

2019 2018

Basic profit per share attributable to owners of the parent (sen per share) For the year (Note 13) 7.25 6.01

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

93

Statements of Financial PositionAs at 31 December 2019

Group Company Note 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

Assets Non-current assetsProperty, plant and equipment 14 19,934 22,717 401 472 Rights-of-use assets 15 82,507 - 1,680 - Inventories 16 62,446 60,755 - - Investment properties 17 70,462 89,141 1,419 1,455 Investment in subsidiaries 18 - - 29,336 27,116 Investment in associates 19 11,500 - - - Deferred tax assets 20 594 3,324 - - Other investments 21 217 51 217 51 Goodwill on consolidation 22 888 888 - -

248,548 176,876 33,053 29,094

Current assets Inventories 16 26,446 23,096 - - Trade and other receivables 23 105,147 105,162 88,230 90,811 Other current assets 24 12,612 707 290 148 Cash and cash equivalents 25 30,714 27,120 3,022 222 174,919 156,085 91,542 91,181 Total assets 423,467 332,961 124,595 120,275







94

Statements of Financial PositionAs at 31 December 2019 (cont’d)

Group Company Note 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Equity and liabilities

Current liabilities Loans and borrowings 26 7,937 9,555 2,036 3,198 Lease liabilities 30,456 - 827 - Trade and other payables 27 127,974 139,473 52,792 50,559

166,367 149,028 55,655 53,757

Net current assets 8,552 7,057 35,887 37,424

Non-current liabilities Loans and borrowings 26 5,626 7,364 22 42 Lease liabilities 56,489 - 903 - Deferred tax liabilities 20 1,635 1,740 65 64

63,750 9,104 990 106

Total liabilities 230,117 158,132 56,645 53,863

Net assets 193,350 174,829 67,950 66,412

Equity attributable to owners of the parent Share capital 28 159,341 159,341 159,341 159,341 Merger deficit 28 (18,568) (18,568) - - Retained earnings 10,880 (10,370) (91,391) (92,929)Exchange reserve 28 (4,117) (1,884) - - Revaluation reserve 28 41,603 41,603 - - Capital reserve 28 (156) 56 - -

188,983 170,178 67,950 66,412 Non-controlling interests 4,367 4,651 - -

Total equity 193,350 174,829 67,950 66,412

Total equity and liabilities 423,467 332,961 124,595 120,275


95

Statement of Changes in Equity - GroupFor the Financial Year Ended 31 December 2019

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Statement of Changes in Equity

Statement of Cash Flows



96

Statement of Changes in Equity - GroupFor the Financial Year Ended 31 December 2019 (cont’d)

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97

Statement of Changes in Equity -CompanyFor the Financial Year Ended 31 December 2019

Non-distributable

Share capital

RM’000

Redeemable Convertible

Notes (“RCN”) RM’000

Accumulated losses

RM’000

Equity Total

RM’000

2019

At 1 January 2019 159,341 - (92,929) 66,412

Total comprehensive income - - 1,538 1,538

At 31 December 2019 159,341 - (91,391) 67,950

2018

At 1 January 2018 155,341 316 (110,608) 45,049

Conversion of RCN 4,000 (316) - 3,684

Total comprehensive income - - 17,679 17,679

At 31 December 2018 159,341 - (92,929) 66,412




Notes to the Financial Statements



98

Statement of Cash FlowsFor the Year Ended 31 December 2019

Group Company Note 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Cash flow from operating activities

Profit before tax 25,592 26,116 1,602 17,812

Adjustments for: Interest income (338) (290) (13) (26) Interest expense 2,683 1,252 122 55 Reversal of impairment of other receivables (27) (13) (1,190) (891) Depreciation of property, plant and equipment 6,816 5,559 72 79 Depreciation of investment properties 36 36 36 36 Impairment loss on property, plant and equipment - 266 - - Gain on disposal of property, plant and equipment - (98) - - Gain on disposal of subsidiaries - (1,944) - (9,322)

Operating profit/(loss) before working capital changes 34,762 30,884 629 7,743 Changes in working capital:- Decrease property development cost - 98 - - (Increase)/Decrease in inventories (216) (4,523) - - (Increase)/Decrease in trade and other receivables (10,734) (14,089) (2,113) 1,670 Increase/(Decrease) trade and other payables (12,124) 8,649 1,267 (1,453) Increase amount due from subsidiary companies - - (60) (13,312) Increase amount due to subsidiary companies - - 3,102 3,801

Cash generated from/(used in) operations 11,688 21,019 2,825 (1,551)

Taxes paid (3,109) (2,055) - - Taxes refunded 1,297 66 - - Interest paid (930) (1,252) (37) (55) Interest received 338 290 13 26

Net cash generated from/(used in) operating activities 9,284 18,068 2,801 (1,580)


99

Statement of Cash FlowsFor the Year Ended 31 December 2019 (cont’d)


Cash flow from investing activities Purchase of property, plant and equipment (959) (4,358) (1) (27) Net cash outflows from disposal of subsidiaries - (2,822) - - Proceed from disposal of property, plant and equipment - 100 - - Net cash (used in)/generated from investing activities (959) (7,080) (1) (27)

Cash flow from financing activities Proceeds from issuance of RCN - 5,000 - 5,000 Payment for redemption RCN - (4,025) - (4,025) Drawdown of loan - 212 - 59 Drawdown of lease - 785 - - Repayment of loan (3,139) (2,889) - - Repayment of lease (1,820) (3,621) - -

Net cash (used in)/generated from financing activities (4,959) (4,538) - 1,034

Net increase/(decrease) of cash and cash equivalents 3,366 6,450 2,800 (573)

Cash and cash equivalents at beginning of year 21,733 15,283 222 795

Cash and cash equivalents at end of year 25 25,099 21,733 3,022 222







100

Notes to the Financial StatementsFor the Financial Year Ended 31 December 2019

1. Corporate Information

Damansara Realty Berhad (“the Company”), a public limited liability company incorporated and domiciled in Malaysia is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office and principal place of business is located at Lot 10.3, Level 10, Wisma Chase Perdana, Off Jalan Semantan, Damansara Heights, 50490, Kuala Lumpur.

The consolidated financial statements of the Company as at and for the financial year ended 31 December 2019 comprise the Company and

its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”) and the Group’s interests in associates and joint venture. The finanacial statements of the Company as at and for the financial year ended 31 December 2019 also include joint operations.

The principal activities of the Company are investment holding and project management. The principal activities of the subsidiaries are

described in Note 18. There has been no significant changes in the nature of the principal activities during the financial year. These financial statements were authorised for issue by the Board on 13 May 2020.

2. Summary of Significant Accounting Policies

2.1 Basis of Preparation The financial statements have been prepared in accordance with the Malaysian Financial Reporting Standards (“MFRSs”), International

Financial Reporting Standards (“IFRS”) and the requirements of the Companies Act, 2016 in Malaysia. The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.

The financial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearest thousand (RM’000) except when otherwise indicated.

2.2 Statement of Compliance Application of New MFRSs, IC Interpretations and Amendments to MFRSs During the financial year, the Group and the Company have applied the following new MFRSs, IC Interpretations and amendments to

MFRSs issued by the Malaysian Accounting Standard Board (“MASB”) which are effective from the beginning of the current financial year:-

MFRS 16, Leases Amendments to MFRS 9 – Prepayment features with negative compensation

Amendments to MFRS 119 – Plan amendment, curtailment or settlement Amendments to MFRS 128 – Long-term interests in associates and joint ventures Amendments to MFRSs classified as “Annual Improvements to MFRS Standards 2015 - 2017 Cycle:

(i) Amendments to MFRS 3, Business combinations and MFRS 11, Joint arrangements – Previously held interest in a joint operation(ii) Amendments to MFRS 112, Income taxes – Income tax consequences of payments on financial instruments classified as equity(iii) Amendments to MFRS 123, Borrowing costs – Borrowing costs eligible for capitalisation

IC Interpretation 23, Uncertainty over income tax treatments

101

Notes to the Financial StatementsFor the Financial Year Ended 31 December 2019 (cont’d)

2. Summary of Significant Accounting Policies (cont’d)

2.2 Statement of Compliance (cont’d) Application of New MFRSs, IC Interpretations and Amendments to MFRSs (cont’d)

(a) MFRS 16, Leases MFRS 16 will supersede the existing MFRS 117 Leases, IC Interpretation 4 Determining whether an arrangement contains a lease, IC

Interpretation 115 Operating leases – Incentives and IC Interpretation 127 Evaluating the substance of transactions involving the legal form of a lease and its sets out the principles for the recognition, measurement, presentation and disclosures of leases.

Under the existing MFRS 117, lessees and lessors are required to classify their leases as either finance leases or operating leases and account for those two types of leases differently. It requires a lessee to recognise assets and liabilities arising from finance leases but not from operating leases.

The new MFRS 16 introduces a single accounting model and requires a lessee to recognise assets and liabilities for the rights

and obligations arising from all leases and hence eliminates the distinction between finance leases and operating leases. As a consequence, a lessee recognises right-of-use assets and lease liabilities arising from operating leases. The right-of-use asset is depreciated in accordance with the principle in MFRS 116 Property, plant and equipment and these liability is accreted over time with interest expense recognised in the profit or loss.

(b) Amendments to MFRS 9 – Prepayment Features with Negative Compensation

The amendments allow entities to measure prepayable financial assets with negative compensation at amortised cost or at fair value through other comprehensive income if certain conditions are met.

(c) Amendments to MFRSs Classified as “Annual Improvements to MFRS Standards 2015 - 2017 Cycle”

The Annual Improvements to MFRS Standards 2015 – 2017 Cycle include amendments to the following MFRSs:-

(i) The amendments to MFRS 3 Business combinations clarify that when an entity obtains control of a business that is a joint operation, it remeasures previously held interests in that business. The amendments to MFRS 11 Joint arrangements clarify that when an entity obtains joint control of a business that is a joint operation, the entity does not remeasure previously held interests in that business.

(ii) The amendments to MFRS 112 Income taxes clarify that an entity recognises the income tax consequences of dividends are

linked more directly to past transactions than to distributions to owners, except if the tax arises from a transaction which is a business combination or is recognised in other comprehensive income or directly in equity.

(iii) The amendments to MFRS 123 Borrowing costs clarify that when a qualifying asset is ready for its intended use or sale, an entity treats any outstanding borrowing made specifically to obtain that qualifying asset as part of general borrowings.

(d) IC Interpretation 23, Uncertainty Over Income Tax Treatments MFRS 112 Income taxes, includes requirements on recognition and measurement of tax assets and tax liabilities, but does not

specify how to reflect uncertainty. As a result, entities apply diverse reporting method when the application of tax law is uncertain.




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2.2 Statement of Compliance (cont’d) Application of New MFRSs, IC Interpretations and Amendments to MFRSs (cont’d)

(d) IC Interpretation 23, Uncertainty Over Income Tax Treatments (cont’d)

When there is uncertainty over income tax treatments, the Interpretation addresses:-

(i) whether an entity considers uncertain tax treatment separately;(ii) the assumptions an entity makes about the examination of tax treatments by taxation authority;(iii) how an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates; and (iv) how an entity considers changes in facts and circumstances.

The initial application of the new MFRSs, IC Interpretations and amendments to MFRSs is not expected to have any significant impact on the Group’s and the Company’s financial statements.

New MFRSs, IC Interpretations and Amendments to MFRSs that are in Issue but not yet Effective

The Company have not early adopted the following new MFRSs, IC Interpretations and amendments to MFRSs that have been issued by the MASB but are not yet affective:-

The following are accounting standards, interpretations and amendments of the MFRSs that have been issued by the Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and the Company;

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2020

• AmendmentstoMFRS3,BusinessCombinations-DefinitionofaBusiness• AmendmentstoMFRS101,Presentation of Financial Statements and MFRS 108, Accounting Policies, Changes in Accounting Estimates

and Errors - Definition of Material

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2021

• MFRS17,Insurance Contracts

MFRSs, Interpretations and amendments effective for annual periods beginning on or after a date yet to be confirmed

• AmendmentstoMFRS10,ConsolidatedFinancialStatementsandMFRS128,InvestmentsinAssociatesandJointVentures-Saleor Contribution of Assets between an Investor and its Associate or Joint Venture

The Group and the Company plan to apply the abovementioned accounting standards, interpretations and amendments from the annual period beginning on 1 January 2020 for those accounting standards, interpretations and amendments, that are effective for annual periods beginning on or after 1 January 2020.

The Group and the Company do not plan to apply MFRS 17, Insurance Contracts that is effective for annual periods beginning on or after

1 January 2021 as it is not applicable to the Group and the Company.

The initial application of the accounting standards, interpretations or amendments are not expected to have any material financial impacts to the current period and prior period financial statements of the Group and the Company.

103


2. Summary of Significant Accounting policies (cont’d)

2.3 Basis of Consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

The Group controls an investee if and only if the Group has all the following:

(i) Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee); (ii) Exposure, or rights, to variable returns from its investment with the investee; and(iii) The ability to use its power over the investee to affect its returns.

When the Company has less than a majority of the voting rights of an investee, the Company considers the following in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power over the investee:

(i) The size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;(ii) Potential voting rights held by the Company, other vote holders or other parties;(iii) Rights arising from other contractual arrangements; and (iv) Any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the

relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses within a subsidiary are attributed to the non-controlling interests even if that results in a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets and liabilities of the subsidiary and any non-controlling interest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has been recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss or where applicable, transferred directly to retained earnings. The fair value of any investment retained in the former subsidiary at the date control is lost is regarded as the cost on initial recognition of the investment.

2.4 Business Combinations

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.




104



2.4 Business Combinations (cont’d)

Business combinations involving entities under common control are accounted for by applying the merger accounting method. The assets and liabilities of the combining entities are reflected at their carrying amounts reported in the consolidated financial statements of the controlling holding company. Any differences between the consideration paid and the share capital of the acquired entity is reflected within the equity merger (deficit)/reserve. The statement of comprehensive income reflects the results of the combining entities for the full year, irrespective of when the combination takes place. Comparative are presented as if the entities had always been combined since the date the entities had come under common control.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

2.5 Foreign Currency

(a) Functional and Presentation Currency

The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the Company’s functional currency.

(b) Foreign Currency Transactions Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are

recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical costs are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit and loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

(c) Foreign Operations

The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the reporting date and income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in the profit and loss.

105



2.6 Property, Plant and Equipment

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, plant and equipment and furniture and fixtures are measured at cost less accumulated depreciation and accumulated impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:

Buildings 10 to 50 years Plant and machinery 5 to 10 years Site infrastructure and renovations 10 to 14 years Office equipment, furniture and fittings 4 to 20 years Motor vehicles 5 years

Medical equipment 10 years Renovation 5 to 10 years

Plant and parking equipment 5 to 7 years Machinery and tools 5 to 10 years

Capital work in progress included in plant and equipment are not depreciated as these assets are not yet available for use.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each financial year end, and adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.

2.7 Investment Properties

Investment properties are initially recorded at cost, including transaction costs. Subsequent to recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment losses.

Depreciation is computed on a straight-line basis over the estimated useful lives of the investment properties at 50 years. The carrying values of investment properties are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each financial year end, and adjusted prospectively, if appropriate.




106



2.7 Investment Properties (cont’d)

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in profit or loss in the year of retirement or disposal.

Transfers are made to or from investment property only when there is a change in use. For a transfer from owner-occupied property to investment property, the property is accounted for in accordance with the accounting policy for property, plant and equipment set out in Note 2.6 up to the date of change in use.

2.8 Goodwill

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group’s cash-generating units that are expected to benefit from the synergies of the combination.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained. Goodwill and fair value adjustments arose on acquisitions of foreign operation before 1 January 2006 are deemed to be assets and liabilities of the company and are recorded in RM at the rates prevailing at the date of acquisition.

2.9 Impairment of Non-Financial Assets

The carrying amounts of non-financial assets (other than inventories, contract assets, lease receivables, deferred tax assets, assets arising from employee benefits, investment property that is measured at fair value and non-current assets or disposal groups held for sale) are reviewed for impairment at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine the amount of impairment loss. For goodwill recognised in a business combination and that has an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated annually or more frequently when indicators of impairment are identified.

An impairment loss is recognised if the carrying amount of an asset or a cash generating unit (“CGU”) exceeds its recoverable amount. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. Impairment losses recognised in respect of CGUs (or groups of CGUs) are allocated first to reduce the carrying amount of any goodwill arising from a business combination allocated to the units (or groups of units) and then to reduce the carrying amount of the other assets in the units (or groups of units) on a pro rata basis.

The recoverable amount of an asset or CGU is the higher of its fair value less costs of disposal and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

107



2.9 Impairment of Non-Financial Assets (cont’d)

An impairment loss is recognised in profit or loss in the period in which it arises, unless the asset is carried at a revalued amount in which case the impairment loss is recognised in other comprehensive income to the extent that the impairment loss does not exceed the amount in the revaluation reserve for that same asset.

Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss.

2.10 Subsidiaries A subsidiary is an entity over which the Group has all the following:

(i) Power over the investee (i.e existing rights that give it the current ability to direct the relevant activities of the investee);(ii) Exposure, or rights, to variable returns from its investment with the investee; and(iii) The ability to use its power over the investee to affect its returns.

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

2.11 Investments in Associates and Joint Ventures

An associate is an entity in which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

On acquisition of an investment in associate or joint venture, any excess of the cost of investment over the Group’s share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill and included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities of the investee over the cost of investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate’s or joint venture’s profit or loss for the period in which the investment is acquired.

An associate or a joint venture is equity accounted for from the date on which the investee becomes an associate or a joint venture.

Under the equity method, on initial recognition the investment in an associate or a joint venture is recognised at cost, and the carrying amount is increased or decreased to recognise the Group’s share of the profit or loss and other comprehensive income of the associate or joint venture after the date of acquisition. When the Group’s share of losses in an associate or a joint venture equal or exceeds its interest in the associate or joint venture, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.




108



2.11 Investments in Associates and Joint Ventures (cont’d)

Profits and losses resulting from upstream and downstream transactions between the Group and its associate or joint venture are recognised in the Group’s financial statements only to the extent of unrelated investors’ interests in the associate or joint venture. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.

The financial statements of the associates and joint ventures are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

2.12 Financial Assets The Group recognises all financial assets in its statement of financial position when, and only when, the Group becomes a party to the

contractual provisions of the instruments.

All regular way purchases or sales of financial assets are recognised and derecognised using trade date accounting. A regular way purchase or sale is a purchase or sale of a financial asset that requires delivery of asset within the time frame established generally by regulation or convention in the marketplace concerned. Trade date accounting refers to:-

(i) the recognition of an asset to be received and the liability to pay for it on the trade date i.e. the date the Group commits itself to purchase or sell an asset; and

(ii) derecognition of an asset that is sold, the recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment in the trade date.

Classsification From 1 January 2018, the Group classifies its financial assets into the following measurement categories depending on the business

models used for managing the financial assets and the contractual cash flow characteristics of the financial assets:

(i) at amortised cost; (ii) fair value through other comprehensive income; and(iii) fair value through profit or loss.

Financial assets are reclassified when and only when the Group and the Company changes its business model for managing the financial assets and the reclassification of all affected financial assets is applied prospectively from the reclassification date i.e. on the first day of the first reporting period following the change in business model.

Measurement

At initial recognition, trade receivables without a significant financing component are measured at their transaction price when they are originated.

Other financial assets are initially measured at fair value plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. Transaction costs of financial assets at fair value through profit or loss are expensed to profit or loss when incurred.

109



2.12 Financial Assets (cont’d)

Measurement (cont’d)

(a) Debt Instruments Subsequent measurement of debt instruments depends on the Group’s business models for managing the financial assets and

the contractual cash flows characteristics of the financial assets. The Group’s debt instruments are categorised into the following measurement categories:

(i) Amortised Cost

A financial asset is measured at amortised cost if both of the following conditions are met and it is not designated as at fair value through profit or loss at initial recognition:

• thefinancialasset isheldwithinabusinessmodelwhoseobjective is to holdfinancialassets inorder tocollectcontractual cash flows; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments ofprincipal and interest (“SPPI”) on the principal amount outstanding.

These financial assets are measured at amortised cost using the effective interest method less any impairment losses. Interest income, gains or losses on derecognition, foreign exchange gains or losses and impairment are recognised in profit or loss. Impairment losses are presented as a separate line item in the statement of profit or loss and other comprehensive income.

(ii) Fair Value Through Other Comprehensive Income (“FVOCI”)

A financial asset is measured at FVOCI if both of the following conditions are met and it is not designated as FVTPL at initial recognition:

• thefinancialassetisheldwithinabusinessmodelwhoseobjectiveisachievedbybothcollectingcontractualcashflowsand selling financial assets; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments ofprincipal and interest (“SPPI”) on the principal amount outstanding.

Changes in fair value of these financial assets are recognised in other comprehensive income. When the financial asset is derecognised, the cumulative gains or losses previously recognised in other comprehensive income is reclassified from equity to profit or loss. Interest income calculated using the effective interest method, foreign exchange gains or losses and impairment are recognised in profit or loss. Impairment losses are presented as a separate line item in the statement of profit or loss and other comprehensive income.

(iii) Fair Value Through Profit or Loss (“FVTPL”)

A financial asset is measured at FVTPL if it does not meet the criteria for amortised cost or FVOCI. This includes all derivative financial assets.

At initial recognition, irrevocably designate a financial asset as measured at FVTPL that otherwise meets the criteria for amortised cost or FVOCI if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Changes in fair value of financial assets at FVTPL and interest or dividend income are recognised in profit or loss.




110



2.12 Financial Assets (cont’d)

Measurement (cont’d)

(b) Equity Instruments

The Group and the Company subsequently measures all equity investments at fair value.

For equity investments at FVTPL, changes in fair value are recognised in profit or loss. Where the Group has elected to present the changes in fair value in other comprehensive income, the amounts presented are not subsequently transferred to profit or loss when the equity investments are derecognised. The cumulative gains or losses is transferred to retained profits instead. The election is made on an instrument-by-instrument basis and it is irrevocable. The amount presented in other comprehensive income includes the related foreign exchange gains or losses.

Dividend income from equity investments at FVTPL and FVOCI is recognised in profit or loss as other income when the Group’s right to receive payment has been established.

Changes in the fair value of equity investments at FVTPL are recognised in other income or expenses, as applicable, in the profit or loss. Impairment losses or reversal of impairment losses on equity instruments measured at FVOCI are recognised in other comprehensive income and are not reported separately from other changes in fair value.

Derecognition of Financial Assets

The Group and the Company derecognises a financial asset when, and only when, the contractual rights to the cash flows from the financial asset expires or it transfers the financial asset without retaining control or transfers substantially all the risks and rewards of ownership of the financial asset to another party.

On derecognition of a financial asset in its entirety, the difference between the carrying amount measured at the date of derecognition and the sum of the consideration received (including any new asset obtained less any new liability assumed) is recognised in profit or loss.

2.13 Impairment of Financial Assets

From 1 January 2018, upon the adoption of MFRS 9, the Group and the Company recognises loss allowance for expected credit losses (“ECLs”) on:

(i) financial assets measured at amortised cost; (ii) debt instruments measured at fair value through other comprehensive income (“FVOCI”);(iii) contract assets; (iv) lease receivables; and (v) financial guarantee contracts.

ECLs are based on the difference between the contractual cash flows due in accordance with the contract and the cash flows that the Group and the Company expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

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

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2.13 Impairment of Financial Assets (cont’d)

For trade receivables and contract assets, the Group and the Company applies a simplified approach in calculating ECLs. Therefore, the Group and the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group and the Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

For debt instruments at FVOCI, the Group and the Company applies the low credit risk simplification. At every reporting date, the Group and the Company evaluates whether the debt instrument is considered to have low credit risk using all reasonable and supportable information that is available without undue cost or effort. In making that evaluation, the Group and the Company reassesses the internal credit rating of the debt instrument. In addition, the Group considers that there has been a significant increase in credit risk when contractual payments are more than 30 days past due. When there has been a significant increase in credit risk since origination, the allowance will be based on the lifetime ECL.

The Group and the Company considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group and the Company may also consider a financial asset to be in default when internal or external information indicates that the Group and the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group and the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flow in its entirety or a portion thereof.

An impairment loss in respect of financial assets measured at amortised cost is recognised in profit or loss and the carrying amount of the asset is reduced through the use of an allowance account.

An impairment loss in respect of debt instruments measured at FVOCI is recognised in profit or loss and the allowance account is recognised in other comprehensive income.

2.14 Cash and Cash Equivalents

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

2.15 Contract Assets and Contract Liabilities Contract asset is the right to consideration for goods or services transferred to the customers. In the case of property development and

construction contracts, contract asset is the excess of cumulative revenue earned over the billings to-date. Contract assets are reviewed for impairment in accordance with the Group’s accounting policy on impairment as disclosed in Note 2.13.

Contract liability is the obligation to transfer goods or services to customers for which the Group has received the consideration or has billed the customer. In the case of construction contracts, contract liability is the excess of the billings to-date over the cumulative revenue earned. Contract liabilities include downpayments received from customers and other deferred income where the Group has billed or has collected the payment before the goods are delivered or services are provided to the customers.




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2.16 Inventories

(a) Land Held for Property Development

Land held for property development consists of land where no active development activity has been carried out or where development activity is not expected to be completed within the normal operating cycle. Such land is classified within non-current asset and is stated at cost less any accumulated impairment losses.

Land held for property development is reclassified to property development costs at the point when development activity has commenced and where it can be demonstrated that the development activity will be completed within the normal operating cycle.

Property development costs comprise all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities.

When the financial outcome of a development activity can be reliably estimated, property development revenue and expenses are recognised in profit or loss by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bears to the estimated total property development costs.

Where the financial outcome of a development activity cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable will be recoverable, and property development costs on properties sold are recognised as an expense in the period in which they are incurred.

Any expected loss on a development project, including costs to be incurred over the defects liability period, is recognised as an expense immediately.

(b) Property Development Costs

Property development costs not recognised as an expense are recognised as an asset, which is measured at the lower of cost and net realisable value.

The excess of revenue recognised in the profit or loss over billings to purchasers is classified as accrued billings within trade receivables and the excess of billings to purchasers over revenue recognised in profit or loss is classified as progress billings within trade payables.

(c) Finished Goods, Raw Materials and Consumable Stores Inventories are stated at the lower of cost and net realisable value. The cost of raw materials comprises costs of purchase. The

cost of unsold completed inventory properties comprises cost associated with the acquisition of land, direct costs and appropriate proportions of common costs.

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

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2.17 Contract Costs

Contract costs are recognised as an asset when the following criteria are met: (a) In relation to incremental costs of obtaining a contract, the Group recognises the costs as an asset if the Group expects to recover

those costs. (b) In relation to costs to fulfil a contract, the Group recognises the contract costs as an asset if:

(i) they relate directly to a contract or to an anticipated contract that the Group can specifically identify; (ii) when the costs generate or enhance resources of the Group that will be used in satisfying performance obligations in the

future; and (iii) the costs are expected to be recovered.

These assets are initially measured at cost and are subsequently amortised on a systematic basis that is consistent with the transfer

to the customers of the goods or services to which the assets relate. An impairment loss is recognised in profit or loss to the extent that the carrying amount of the asset exceeds the remaining amount of consideration expected to be received less the remaining costs expected to be incurred. A reversal of impairment loss is recognised in profit or loss when the impairment conditions no longer exist or have improved. The increased carrying amount does not exceed the amount that would have been determined (net of amortisation) if no impairment loss had been recognised previously.

2.18 Non-Current Assets Held for Sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary.

On initial classification as held for sale, non-current assets (other than investment properties, deferred tax assets, employee benefits assets, financial assets and inventories) are measured at the lower of carrying amount and fair value less costs to sell. Any differences are included in the profit or loss.

2.19 Provisions

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

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

2.20 Financial Liabilities

The Group recognises all financial liabilities in its statement of financial position when, and only when, the Group becomes a party to the contractual provisions of the instruments.

Financial liabilities are initially measured at fair value minus, in the case of financial liabilities not at fair value through profit or loss, directly attributable transaction costs. Transaction costs of financial assets at fair value through profit or loss are expensed to profit or loss when incurred.




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2.20 Financial Liabilities (cont’d)

Financial liabilities are classified as either financial liabilities at fair value through profit or loss or financial liabilities measured at amortised cost.

(a) Fair Value Through Profit or Loss (“FVTPL”)

Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL upon initial recognition or derivatives that are liabilities.

A financial liability is classified as held for trading if:-(i) it has been incurred principally for the purpose of repurchasing it in the near term; or(ii) on initial recognition, it is part of a portfolio of identified financial instruments that the Group manages together and has a

recent actual pattern of short-term profit-taking; or (iii) it is a derivative that is not designated and effective as a hedging instrument.

After initial recognition, financial liabilities at FVTPL are measured at fair value with any gains or losses arising from changes in fair value recognised in profit or loss. If a financial liability is designated as at FVTPL, the change in fair value that is attributable to changes in the credit risk of that liability is presented in other comprehensive income and the remaining change in fair value of the liability is presented in profit or loss. The net gains or losses recognised in profit or loss do not include any exchange differences or interest paid on the financial liability. Exchange differences and interest expense on financial liabilities at FVTPL are recognised separately in profit or loss as part of other income or other expenses.

(b) Amortised Cost

All financial liabilities, other than those categorised as FVTPL are subsequently measured at amortised cost using the effective interest method.

A gain or loss on financial liabilities at amortised cost is recognised in profit or loss when the liabilities are derecognised and through the amortisation process.

2.21 Financial Guarantee Contracts

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

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are measured at the higher of (i) the amount determined in accordance with the expected credit loss model; and (ii) the amount initially recognised less, where appropriate, the cumulative amount of income recognised in accordance with the principles of MFRS 15 Revenue from Contracts with Customers.

2.22 Borrowing Costs Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction

or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs consist of interest and other

costs that the Group and the Company incurred in connection with the borrowing of funds.

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2.23 Employee Benefits (a) Short Term Benefits

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

(b) Defined Contribution Plans

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

Such contributions are recognised as an expense in the profit or loss as incurred. As required by law, companies in Malaysia make

such contributions to the Employees Provident Fund (“EPF”).

Some of the Group’s foreign subsidiaries also make contributions to their respective countries’ statutory pension schemes.

2.24 Leases The Group has applied MFRS 16 using the modified retrospective approach, under which the cumulative effect of initial application is

recognised as an adjustment to retained earnings at 1 January 2019. Accordingly, the comparative information presented for 2018 has not been restated - i.e. it is presented as previously reported under MFRS 117, Leases and related interpretations.

Current Financial Year (i) Definition of a Lease

A contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset - this may be specified explicitly or implicitly.

• thecontractinvolvestheuseofanidentifiedasset-thismaybespecifiedexplicityorimplicity,andshouldbephysicallydistinct or represent substantially all of the capacity of a phusically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified;

• thecustomerhastherighttoobtainsubstantiallyalloftheeconomicbenefitsfromtheuseoftheassetthroughouttheperiodof use; and

• thecustomerhastherighttodirecttheuseoftheasset.Thecustomerhashisrightwhenithasthedecision-makingrightsthat are most relevant to changing how and for what purpose the asset is used. In rare cases where the decision about how and for what pupose the asset is used. In rare cases where the decision about how and for what purposes the asset is used is predetermined, the customer has the right to direct the use of the asset if either the customer has the right to operate the asset; or the customer designed the asset in a way that predetermines how and for what purpose it will be used;




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2.24 Leases (cont’d)

Current Financial Year (cont’d)

(i) Definition of a Lease (cont’d)

At the inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease and non-lease component on the basis of their relative stand-alone prices. However, for leases of properties in which the Group is a lessee, it has elected not to separate non-lease components and will instead account for the lease and non-lease components as a single lease component.

(ii) Recognition and Initial Measurement

(a) As a Lessee

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct cost incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying assets or the site on which it is located, less any lease incentives received.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the respective Group entities’ incremental borrowing rate. Generally, the Group entities use their incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following :

• fixedpayments,includingin-substancefixedpaymentslessanyincentivesreceivable;• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the

commencement date;• amountsexpectedtobepayableunderaresidualvalueguarantee;• theexercisepriceunderapurchaseoptionthattheGroupisreasonablycertaintoexercise;and• penaltiesforearlyterminationofaleaseunlesstheGroupisreasonablycertainnottoterminateearly.

The Group excludes variable lease payments that are linked to future performance or usage of the underlying asset from the lease liability. Instead, these payments are recognised in profit or loss in the period in which the performance or use occurs.

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(b) As a Lessor

When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.

To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying assets. If this is the case, then the lease is a finance lease; if not, then it is an operating lease.

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Current Financial Year (cont’d)

(ii) Recognition and Initial Measurement (cont’d)

(b) As a Lessor

If an arrangement contains lease and non-lease components, the Group applies MFRS 15 to allocate the consideration in the contract based on the stand-alone selling prices.

The Group recognises assets held under a finance lease in its statement of financial position and presents them as a receivable at an amount equal to the net investment in the lease. The Group uses the interest rate implicit in the lease to measure the net investment in the lease.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. It assesses the lease classification of a sublease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sublease as an operating lease.

(iii) Subsequence Measurement (a) As a Lessee

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use assets or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use assets is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a revision of in-substance fixed lease payments, or if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option.

When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

(b) As a Lessor The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term

as part of “revenue”. The Group recognises finance income over the lease term, based on a pattern reflecting a constant periodic rate of return on the

Group’s net investment in the lease. The Group aims to allocate finance income over the lease term on a systematic and rational basis. The Group applies the lease payments relating to the period against the gross investment in the lease to reduce both the principal and the unearned finance income. The net investment in the lease is subject to impairment requirements in MFRS 9, Financial Instruments.




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Previous Financial Year

As a Lessee

(i) Finance Lease

Leases in terms of which the Group or the Company assumed substantially all the risks and rewards of ownership were classified as finance leases. Upon initial recognition, the leased asset was measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequence to initial recognition, the asset was accounted for in accordance with the accounting policy applicable to that asset.

Minimum lease payments made under finance leases were appointed between the finance expense and the reduction of the outstanding liability. The finance expense was allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments were accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment was confirmed.

Leasehold land which in substance was a finance lease was classified as property, plant and equipment, or as investment property if held to earn rental income or for capital appreciation or for both.

(ii) Operating Lease

Leases, where the Group or the Company did not assume substantially all the risks and rewards of ownership were classified as operating lease and, expect for property interest held under operating lease, the leased assets were not recognised on the statement of financial position. Property interest held under an operating lease, which was held to earn rental income or for capital appreciation or both, was classified as investment property and measure using fair value model.

Payments made under operating leases were recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received were recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals were charged to profit or loss in the reporting period in which they were incurred.

Leasehold land which in substance was an operating lease was classified as prepaid lease payments.

2.25 Revenue and Other Income

The Group recognises revenue from a contract with customer when it satisfies a performance obligation by transferring control of a promised good or service to the customer. Performance obligations may be satisfied over time or at a point in time. Revenue is measured based on the consideration specified in the contract which the Group expects to be entitled in exchange for transferring the good or service, excluding the amounts collected on behalf of third parties.

(a) Revenue

(i) Property Development

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

The revenue from property development is measured at the fixed transaction price agreed under the sales and purchase agreement.

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2.25 Revenue and Other Income (cont’d)

(a) Revenue (cont’d)

(i) Property Development (cont’d)

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

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

The Group recognises revenue over time using the output method, which is based on the level of completion of the physical proportion of contract work to date, certified by professional consultants.

The promised properties are specifically identified by its plot, lot and parcel number and its attributes (such as its size and location) as in the attached layout plan in the sale and purchase agreements. The purchasers could enforce its rights to the promised properties if the Group seeks to sell the unit to another purchaser. The contractual restriction on the Group’s ability to direct the promised property for another use is substantive and the promised properties sold to the purchasers do not have an alternative use to the Group. The Group has the right to payment for performance completed to date, is entitled to continue to transfer to the customer the development units promised, and has the rights to complete the construction of the properties and enforce its rights to full payment.

The Group recognises sales at a point in time for the sale of completed properties, when the control of the properties has been transferred to the purchasers, being when the properties have been completed and delivered to the customers and it is probable that the Group will collect the consideration to which it will be entitled to in exchange for the assets sold.

(ii) Construction Contracts The Group constructs residential properties under long-term contracts with customers who are property developers. The

constructions are on the land owned by the customers. Revenue from construction of residential properties is recognised over time on a cost–to–cost method, i.e. based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs. The directors consider that this input method is an appropriate measure of the progress towards complete satisfaction of these performance obligations under MFRS 15.

The Group becomes entitled to invoice customers for construction of residential properties based on achieving a series of performance-related milestones. When a particular milestone is reached the customer is sent a relevant statement of work signed by a third party assessor and an invoice for the related milestone payment. The Group will previously have recognised a contract asset for any work performed. Any amount previously recognised as a contract asset is reclassified to trade receivables at the point at which it is invoiced to the customer. If the milestone payment exceeds the revenue recognised to date under the cost–to–cost method then the Group recognises a contract liability for the difference. There is not considered to be a significant financing component in construction contracts with customers as the period between the recognition of revenue under the cost–to–cost method and the milestone payment is always less than one year.




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2.25 Revenue and Other Income (cont’d)

(a) Revenue (cont’d)

(iii) Project Management Services Project management services are recognised for services rendered based on the stage of completion during pre and post

contract for each project.

(iv) Parking Services Rendered Revenue from parking services are upon the delivery of the service to the customers.

(v) Cleaning Services Services are recognised upon completion of monthly services based on price stated in the predetermined agreement between

company and the customer. (vi) Provision of Site and Facilities Management

Income from services are recognised based on services rendered during the financial year.

(b) Other Income

(i) Rental Income

Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis.

(ii) Interest Income

Interest income is recognised using the effective interest method.

(iii) Dividend Income

Dividend income is recognised when the Group’s right to receive payment is established.

2.26 Income Taxes

(a) Current Tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity.

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2.26 Income Taxes (cont’d)

(b) Deferred Tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

(i) where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

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

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

(i) where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

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

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

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

2.27 Segment Reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 35, including the factors used to identify the reportable segments and the measurement basis of segment information.




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2.28 Share Capital and Share Issuance Expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

2.29 Contingencies A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only

by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group.

Contingent liabilities and assets are not recognised in the statements of financial position of the Group.

2.30 Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

(i) In the principal market for the asset or liability, or(ii) In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimising the use of unobservable inputs.

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

(i) Level 1 – Quoted (unadjusted) market prices in active markets for identical assets of liabilities.

(ii) Level 2 – Valuation techniques for the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

(iii) Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the assets or liabilities and the level of the fair value hierarchy as explained above.

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3. Significant Accounting Judgements and Estimates

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

3.1 Judgements Made in Applying Accounting Policies

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

3.2 Key Sources of Estimation Uncertainty

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

(a) Impairment of receivables

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s and Company’s receivables at the reporting date is disclosed in Note 23.

(b) Impairment of goodwill Goodwill is tested for impairment annually and at other times when such indicators exist. This requires an estimation of the value

in use of the cash-generating units to which goodwill is allocated.

When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. Further details of the carrying value, the key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are given in Note 22.

(c) Deferred Tax Assets

Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing and level of future taxable profits together with future tax planning strategies.

Assumptions about generation of future taxable profits depend on management’s estimates of future cash flows. These depends on estimates of future production and sales volume, operating costs, capital expenditure, dividends and other capital management transactions. Judgement is also required about application of income tax legislation. These judgements and assumptions are subject to risks and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets recognised in the statements of financial position and the amount of unrecognised tax losses and unrecognised temporary differences.




124


4. Revenue Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

Provision of site and facilities management 172,607 246,413 - -Project management services 81,990 46,468 - -Sale of properties 31,257 11,192 - -Management fees receivable from subsidiaries - - 10,339 13,288Others 7,605 52 - -

293,459 304,125 10,339 13,288 5. Interest Income

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

Interest income on: - late payment 81 214 - 1

- deposits with licensed banks 313 76 13 25

394 290 13 26 6. Dividend Income from Subsidiaries

Company 2019 2018 RM’000 RM’000

Dividend income from subsidiaries - 680

125


7. Other Income Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

Net gain on sales of subsidiaries 6,911 1,944 - 9,322 Rental income from investment properties 228 248 228 228 Discount received - 22 - 22 Interest on late payment 342 24 - - Tender documents 110 11 - - Reversal of impairment of other receivables (Note 23 (b)) 27 13 1,190 891 Interest receivable from subsidiaries - - 2,968 2,966 Others 2,590 5,689 3,325 6,833

10,208 7,951 7,711 20,262 8. Finance Costs


Interest expense on:- Term loans 133 142 - - - Finance leases 114 498 2 3 - Overdrafts 486 560 - - - Advance from holding company 34 52 34 52 - Lease liabilities 1,916 - 86 -

Total finance costs 2,683 1,252 122 55

9. Employee Benefits Expense


Wages, salaries and bonus 77,794 80,448 9,425 8,972 Social security contributions 146 147 54 53 Contributions to defined contribution plan 3,577 2,837 1,170 935 Training 478 659 31 61 Other benefits 1,192 1,447 560 405

Employee benefits expense (Note 10) 83,187 85,538 11,240 10,426

Less: Employees’ benefits expenses included in cost of sales (49,965) (51,785) - -

33,222 33,753 11,240 10,426

Included in employee benefits expense of the Group and the Company are executive director’s remuneration amounting to RM4,807,000

(2018: RM2,452,000) and RM2,198,000 (2018: RM2,050,000) respectively.




126


10. Profit Before Tax The following items have been included in arriving at profit before tax:


Auditors’ remuneration: - Statutory audit fees 384 433 67 65 Employee benefits expense (Note 9) 83,187 85,538 11,240 10,426 Directors’ remuneration: - Executive director (Note 11) 4,807 2,452 2,198 2,050 - Non-executive directors’ remuneration (Note 11) 471 584 471 584 Depreciation of property, plant and equipment (Note 14) 6,816 5,559 72 79 Rental expense:

- office, warehouse and house rental 881 1,585 - 627 - computer and equipment 508 339 - 133 Depreciation of investment properties (Note 17) 36 36 36 36 Impairment loss on financial assets:

- trade receivables (Note 23(a)) 1,152 - - - - other receivables (Note 23(b)) 398 - 371 - Unrealised foreign exchange loss/(income) 2 (3) - - Realised foreign exchange loss 2 41 - - Unrealised foreign exchange (gain)/loss (2,234) 1 - -

11. Directors’ Remunerations

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


Executive: Salaries, bonus and other emoluments 4,114 1,914 1,797 1,535

Fees 132 343 132 343 Defined contribution plan 561 195 269 172 Total executive directors’ remuneration (excluding

benefits-in-kind) (Note 10) 4,807 2,452 2,198 2,050

Non-Executive: Fees 411 524 411 524

Other emoluments 60 60 60 60

Total non-executive directors’ remuneration (including benefits-in-kind) (Note 10) 471 584 471 584

Total directors’ remuneration 5,278 3,036 2,669 2,634

127


11. Directors’ Remunerations (cont’d)

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

Number of directors 2019 2018 Executive director:

Below RM500,000 - 2 RM500,001 - RM1,000,000 1 - RM1,000,001 - RM1,500,000 1 - RM1,500,001 - RM2,000,000 - 1 Non-Executive directors:

Below RM50,000 - 2 RM50,001 - RM100,000 4 5 RM100,001 - RM200,000 1 1

12. Income Tax Expense Major Components of Income Tax Expense

The major components of income tax expense for the years ended 31 December 2019 and 2018 are:


Statement of comprehensive income: Current income tax:

- Malaysian income tax 3,797 6,735 74 133 - Foreign income tax 969 714 - - - Over provision in respect of previous years (1,953) (874) (10) - - Deferred tax (15) - - -

Income tax expense recognised in profit or loss 2,798 6,575 64 133




128


12. Income Tax Expense (cont’d)

Reconciliation Between Tax Expense and Accounting Profit

A reconciliation of income tax expense applicable to profit before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Company is as follows:


Profit before tax 25,592 26,116 1,602 17,812 Tax at Malaysian statutory tax rate of 24% (2018: 24%) 6,142 6,268 384 4,275 Adjustments:

Non-deductible expenses 4,392 8,714 866 1,016 Income not subject to taxation (1,430) (3,803) (1,040) (3,731) Utilisation of business loss (877) (3,730) (94) (1,427) Utilisation of previously unrecognised tax losses, capital allowances and

other temporary differences (3,476) - (42) - Over provision of income tax in respect of previous years (1,953) (874) (10) -

Income tax expense recognised in profit or loss 2,798 6,575 64 133

13. Earnings Per Share Basic earnings per share amounts are calculated by dividing profit for the year, net of tax, attributable to owners of the parent by the weighted

average number of ordinary shares outstanding during the financial year.

The Company does not have dilutive potential ordinary shares for years ended 31 December 2019 and 2018. The following reflects the profit and share data used in the computation of basic earnings per share for the years ended 31 December:

Group 2019 2018 RM’000 RM’000

Profit net of tax attributable to owners of the parent used in the computation of basic earnings per share 23,078 19,120

No. of shares No. of shares ’000 ’000

Weighted average number of ordinary shares for basic earnings per share computation 318,371 318,371 Basic profit per share attributable to owners of the parent (sen per share) 7.25 6.01

129


14.

Prop

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, Pla

nt a

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quip

men

t

Si

te

Fr

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ld

infr

astr

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re

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RM

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RM

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RM

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20

19

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At 1

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ary

2019

1,

837

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1,38

8

2,5

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11,

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4

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1

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185

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-

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-

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At

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9 1

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4,82

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A

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At 1

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A

ccum

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235

4

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5

4,65

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1,7

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8,7

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130


14.

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men

t (c

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Si

te

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At

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6

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4

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17

131


14. Property, Plant and Equipment (cont’d)

Office equipment

and computers

RM’000

Furniture and

fittings RM’000

Renovations RM’000

Motor vehicles RM’000

Total RM’000

2019

Company

Cost

At 1 January 2019 202 389 1,309 144 2,044

Additions - 1 - - 1

At 31 December 2019 202 390 1,309 144 2,045

Accumulated depreciation

At 1 January 2019 65 81 1,309 117 1,572

Depreciation charge for the year 23 22 - 27 72

At 31 December 2019 88 103 1,309 144 1,644

Net carrying amount 114 287 - - 401

2018

Company

Cost

At 1 January 2018 186 384 1,309 144 2,023

Additions 16 5 - - 21

At 31 December 2018 202 389 1,309 144 2,044

Accumulated depreciation

At 1 January 2018 44 61 1,301 87 1,493

Depreciation charge for the year 21 20 8 30 79

At 31 December 2018 65 81 1,309 117 1,572

Net carrying amount 137 308 - 27 472




132


15. Right-of-use Assets

Plant and

Building Equipment Total RM’000 RM’000 RM’000 Group

At 1 January 2019 110,253 790 111,043 Addition 19,984 586 20,570 Depeciation (48,674) (432) (49,106)

At 31 December 2019 81,563 944 82,507

Company

At 1 January 2019 29 212 241 Addition 1,788 113 1,901 Depeciation (362) (100) (462)

At 31 December 2019 1,455 225 1,680

The Group assesses at lease commencement by applying significant judgement whether it is reasonably certain to exercise the extention options. Group entities consider all facts and circumstances including their past practice and any cost that will be incurred to charge the assetif an option to extend is not taken, to help then determine the lease term.

The Group also applied judgement and assumptions in determining the incremental borrowing rate of the respective leases. Group entities first determine the closest available borrowing rate before using significant judgement to determine the adjustments required to reflect the term, security, value or economic environment of the respective leases.

16. Inventories

Group 2019 2018 RM’000 RM’000

Non-current Land held for property development (Note (a)) 62,446 60,755

Current Property development costs (Note (b)) 17,534 15,378

Finished goods, raw materials and consumable stores (Note (c)) 8,912 7,718 26,446 23,096

Total inventories 88,892 83,851

133


16. Inventories (cont’d)

(a) Land Held for Property Development

Freehold Development Development land rights costs Total RM’000 RM’000 RM’000 RM’000

Group

At 1 January 2019 37,386 - 23,369 60,755 Additions - - 1,691 1,691

At 31 December 2019 37,386 - 25,060 62,446

At 1 January 2018 37,386 - 22,323 59,709 Additions - - 1,046 1,046

At 31 December 2018 37,386 - 23,369 60,755

(b) Property development costs

Group

At 31 December 2019 Cumulative property development costs At 1 January 2019 2,104 1,712 51,906 55,722

Costs incurred during the year - - 4,312 4,312

At 31 December 2019 2,104 1,712 56,218 60,034

Cumulative costs recognised in profit or loss At 1 January 2019 (1,226) (1,712) (37,406) (40,344)

Recognised during the year (2,156) (2,156)

At 31 December 2019 (1,226) (1,712) (39,562) (42,500)

Property development costs at 31 December 2019 878 - 16,656 17,534




134


16. Inventories (cont’d)

(b) Property Development Costs (cont’d)

Freehold Development Development land rights costs Total RM’000 RM’000 RM’000 RM’000

Group (cont’d)

At 31 December 2018 Cumulative property development costs At 1 January 2018 2,104 1,712 46,668 50,484

Costs incurred during the year - - 6,129 6,129 Reversal from completed projects - - (891) (891)

At 31 December 2018 2,104 1,712 51,906 55,722

Cumulative costs recognised in profit or loss At 1 January 2018 (603) (1,528) (31,831) (33,962)

Recognised during the year (375) - (4,573) (4,948) Reclassification of development cost - - 3,000 3,000 Transfer to inventory (248) (184) (4,002) (4,434)

At 31 December 2018 (1,226) (1,712) (37,406) (40,344)

Property development costs at 31 December 2018 878 - 14,500 15,378

(c) Finished Goods, Raw Materials and Consumable Stores

Group 2019 2018 RM’000 RM’000

Cost Cleaning machinery and equipment 52 60

Chemicals 75 82 Developed properties held for sale 6,463 5,906 Uniforms 46 58 Materials and consumables 1,791 1,001 Parking materials 485 611

8,912 7,718

During the year, the amount of inventories recognised as an expense in cost of sales of the Group was RM40,593,305 (2018: RM50,279,082).

135


17. Investment Properties

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Cost

At 1 January 89,478 89,478 1,792 1,792 Transfer to inventories (18,643) - - - At 31 December 70,835 89,478 1,792 1,792 Accumulated depreciation

At 1 January 337 301 337 301 Depreciation charge for the year (Note 10) 36 36 36 36

At 31 December 373 337 373 337 Net carrying amount 70,462 89,141 1,419 1,455 Fair value 89,686 90,186 2,000 2,500

Fair value of investment properties has been determined based on valuations performed by accredited independent valuers. The valuation is based on the comparison method of valuation.

Title to investment properties of the Company is presently registered in the name of the developer.

Fair value hierarchy disclosure for investment properties have been provided in Note 32(c).

18. Investment in Subsidiaries

Company 2019 2018 RM’000 RM’000

Unquoted shares, at cost In Malaysia 65,779 69,396 Disposal - (3,617)

65,779 65,779 Impairment losses (36,443) (38,663)

29,336 27,116




136


18. Investment in Subsidiaries (cont’d)

Proportion (%) of ownership interest Name Principal activities 2019 2018

i) Held by the Company and Incorporated in Malaysia:

Damansara Realty Management services to its holding 100 100 Management Services and related companies and general Sdn. Bhd. insurance business Damansara Realty (Pahang) Property holding and development 80 80 Sdn. Bhd. Metro Parking (M) Sdn. Bhd. Parking Operator and consultancy services 100 100 Kesang Properties Sdn. Bhd. Development of building projects for own 100 100 operation, ie for renting of space in these buildings Tebing Aur Sdn. Bhd. Construction and project management 100 100 HC Duraclean Sdn. Bhd. Franchising of professional care and cleaning 85 75 product and all other business related wholesale and retail of professional care and cleaning product and machinery to purchase in bulk, sell and deal in any kind of professional care and cleaning products

TMR Urusharta (M) Sdn. Bhd. Business of real estate services, general services, 100 95 facility management, project consultant and project management Damansara Galaxy Sdn. Bhd. Management services (inactive) 100 100 Damansara Prospects Sdn. Bhd. Leasing, hire purchase and loan financing (inactive) 100 100

Damansara Technology Sdn. Bhd. Business and technology solution provider 100 100 JOLS Construction Sdn. Bhd. Construction, refurbishment, inspection and 100 100 sanitisation service (inactive)

Damansara Realty Management Timber operations and its related activities (inactive) 100 100 (Timber Operations) Sdn. Bhd.

Damansara Realty Properties Sdn. Bhd. Property development and construction works - 100 (under liquidation) Kesang Kastory Enterprise Sdn. Bhd. Importation and distribution of food stuffs (inactive) 95 95

137




i) Held by the Company and Incorporated in Malaysia (cont’d):

Kesang Trading Sdn. Bhd. Property development and trading of office 100 100 equipment (inactive) Damansara Realty Constructions Manufacturing, wholeselling and trading of - 100 Sdn. Bhd. pharmaceutical products (under liquidation) Damansara Realty Land Sdn. Bhd. Sand extraction and trading (under liquidation) - 100

DHealthcare Centre Sdn. Bhd. Healthcare service provider (inactive) 51 51

Damansara Pulse Sdn. Bhd. To carry on the business of general merchants, 100 100 (formerly known as traders, suppliers, factors, brokers, commission Damansara Urban Sdn. Bhd.) and general agents etc (general traders) (inactive)

Damansara Realty Negeri Sembilan General contracting (inactive) 100 100 Sdn. Bhd. (formerly known as Kesang Construction & Engineering Sdn. Bhd.)

ii) Held through subsidiaries and incorporated in Malaysia:

Damansara Realty ( Johor) Sdn. Bhd. Property development 100 100 Damansara Realty (Terengganu) Sdn. Bhd. Property development 100 100

Kesang Equipment Hire Sdn. Bhd. Buying, selling and renting of machinery - 100 (under liquidation)

Kesang Quarry Sdn. Bhd. Quarrying operation (inactive) 70 70 Pedas Quarry Sdn. Bhd. Quarrying operation (inactive) 55 55

TMR LC Services Sdn. Bhd. Building management, maintanance services 70 70 and hospitality maintanance services and hospitality

Metro Parking (Sabah) Sdn. Bhd. Operation of parking facilities for motor 100 100 vehicles (parking lots)

Smart Parking Management Trading of parking and car park equipment 100 100 Systems Sdn. Bhd.




138




ii) Held through subsidiaries and incorporated in Malaysia (cont’d):

M.N. Koll (M) Sdn. Bhd. Building management and maintenance services 100 100

TMR ACMV Services Sdn. Bhd. Trading and servicing of air conditioning services 100 100

TMR Koll Sdn. Bhd. To provide engineering consultancy services 100 100

Harta Facilities Management Providing facilities management and 100 100 Sdn. Bhd. consultancy services

Damansara PMC Services Sdn. Bhd. Consultation, property development and investment 100 100

DAC Properties Sdn. Bhd. Development of building projects for own operation 30 30

DAC Land Sdn. Bhd. Investment properties and property development 100 100

Proportion (%) of ownership interest Country of Name incorporation Principal activities 2019 2018

iii) Held through subsidiaries and incorporated in overseas:

Metro Parking (S) Pte. Ltd. Singapore Transport related services, car park 70 70 management and operation services

Metro Parking (B) Sdn. Bhd. Brunei Managing car park facilities in Brunei 100 100

Metro Parking Management Philippines Parking operator and other related 100 100 (Philippines) Inc. parking services

Metro Parking Hong Kong Parking operator, consultancy services and - 55 (HK) Limited transport related services (strike-off)

Metro Parking Services (India) India Parking operator, consultancy services and - 100 Private Limited transport related services (strike-off)

Audited by a firm other than Jamal, Amin & Partners

**

**

**

**

**

**

**

139


19. Investment in Associate

Group 2019 2018 RM’000 RM’000

Investment in shares 166 166 Share of post-acquisition reserves 11,500 - Less: Impairment loss (166) (166)

11,500 -

Details of the Associate are as Follows:

Effective ownership interest Name Principal activities 2019 2018

DAC Properties Sdn. Bhd. Those relating to property development 30% 30% and property investment.

Group Summarised Financial Information

2019 2018 RM’000 RM’000 As at 31 December Non-current assets 128,596 125,495 Current assets 189,143 157,092 Non-current liabilities (80,000) - Current liabilities (117,474) (152,454)

Net assets 120,265 130,133 Year ended 31 December

Total comprehensive income 39,573 9,731

Included in the total comprehensive income is revenue amounting RM264,702,910 (2018: RM101,802,567).




140


20. Deferred Tax

Deferred tax as at 31 December relates to the following:

As at 1 Recognised As at 31 Recognised As at 31 January in profit December in profit December 2018 or loss 2018 or loss 2019 RM’000 RM’000 RM’000 RM’000 RM’000

Group

Deferred tax liabilities: Property, plant and equipment 533 1,207 1,740 (105) 1,635

Deferred tax assets: Others (530) (2,794) (3,324) 2,730 (594)

3 (1,587) (1,584) 2,625 1,041

Group 2019 2018 RM’000 RM’000

Presented after appropriate offsetting as follows: Deferred tax liabilities 1,635 1,740 Deferred tax assets (594) (3,324)

1,041 (1,584) Deferred tax assets have not been recognised in respect of the following items:

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Unused tax losses 91,225 89,688 6,258 7,991 Unabsorbed capital allowances 685 217 - -

91,910 89,905 6,258 7,991

141


20. Deferred Tax (cont’d)

Unrecognised tax losses At the reporting date, the Group has unused tax losses and unabsorbed capital allowances that are available for offset against future taxable

profits of the companies in which the losses arose, for which no deferred tax asset is recognised due to uncertainty of recoverability. The availability of unused tax losses and unabsorbed capital allowances for offsetting against future taxable profits of the respective subsidiaries are subject to no substantial changes in shareholdings of those subsidiaries under the Income Tax Act, 1967 and guidelines issued by the tax authority.

21. Other Investments

Group/Company 2019 2018 RM’000 RM’000

Non-current Available-for-sale financial assets: - equity instruments (quoted in Malaysia) 217 51

Market value of quoted investments

280 377 22. Goodwill on Consolidation

2019 2018 RM’000 RM’000

Group Cost

At 1 January and 31 December 1,430 3,050 Disposal - (1,620)

At 31 December 1,430 1,430

Accumulated impairment At 1 January and 31 December 542 1,640

Disposal - (1,098)

At 31 December 542 542

Net carrying amount 888 888

Impairment testing of goodwill

Goodwill arising from business combinations has been allocated to property services segment for impairment testing.




142


22. Goodwill on Consolidation (cont’d)

The carrying amounts of goodwill allocated to each CGU are as follows:

2019 2018 RM’000 RM’000

Goodwill Property services segment 888 888

The recoverable amounts of the CGUs have been determined based on value in use calculations using cash flow projections from financial

budgets approved by management covering a five-year period. The pre-tax discount rate applied to the cash flow projections and the forecasted growth rates used to extrapolate cash flows beyond the five-year period are as follows:

Growth rates Pre-tax discount rates 2019 2018 2019 2018

Property services segment 11.0% 11.0% 9.0% 9.0% 23. Trade and Other Receivables


Current Trade receivables Third parties 48,478 44,569 - -

Less: Impairment (2,252) (1,449) - - Trade receivables, net 46,226 43,120 - - Other receivables

Income tax recoverable - 2,352 - - Amounts due from subsidiaries - - 186,338 189,451 Deposits 15,064 7,456 188 187 Others 44,940 52,946 12,561 12,849

60,004 62,754 199,087 202,487

Less: Allowance for impairment - Amounts due from subsidiaries - - (110,486) (111,676) - Others (1,083) (712) (371) -

(1,083) (712) (110,857) (111,676)

Other receivables, net 58,921 62,042 88,230 90,811

Total trade and other receivables 105,147 105,162 88,230 90,811

143


23. Trade and Other Receivables (cont’d)

(a) Trade Receivables

Trade receivables are non-interest bearing and generally ranges from 14 to 90 days (2018: 14 to 90 days) terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

Ageing analysis of trade receivables

The ageing analysis of the Group’s trade receivables are as follows:

Group 2019 2018 RM’000 RM’000

Neither past due nor impaired 15,713 13,813 1 to 30 days past due not impaired 10,532 10,343

31 to 60 days past due not impaired 8,899 10,532 61 to 90 days past due not impaired 5,201 1,988 91 to 120 days past due not impaired 2,880 5,308 More than 121 days past due not impaired 3,001 1,136

30,513 29,307 Impaired 2,252 1,449

48,478 44,569

Receivables that are neither past due nor impaired

32% (2018: 31%) of trade receivables of the Group or RM15,713,000 (2018: RM13,813,000) that is neither past due nor impaired.

None of the Group’s and Company’s trade receivables that are neither past due nor impaired has been renegotiated during the financial year.

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM30,513,000 (2018: RM29,307,000) respectively that are past due at the reporting date but not impaired.

Although these receivables have exceeded the credit terms granted to them, the directors are reasonably confident that all debts can be recovered within the next 12 months.




144


23. Trade and Other Receivables (cont’d)

(a) Trade Receivables (cont’d)

Receivables that are Impaired

The Group’s and Company’s trade receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:


Individually impaired Trade receivables - nominal amounts 2,252 1,449 - -

Allowance for impairment (2,252) (1,449) - -

- - - -

Movement in allowance accounts: At 1 January 1,449 1,555 - - Current year allowances (Note 10) 1,152 - - - Written-off allowances (349) (106) - -

At 31 December 2,252 1,449 - -

Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

(b) Other Receivables

Amounts due from subsidiaries are unsecured, bears interest of 4% per annum and is repayable on demand.

Other receivables that are impaired

At the reporting date, debts due from subsidiaries that are in net liabilities position amounted to RM180,551,000 (2018: RM189,451,000) of which provision for impairment of RM104,891,000 (2018: RM111,676,000) had been made.

Movement in allowance accounts:


At 1 January 712 1,811 111,676 112,567 Charge for the year (Note 10) 398 - 371 - Reversal of impairment (Note 7) (27) (13) (1,190) (891) Written off of allowance - (1,086) - -

At 31 December 1,083 712 110,857 111,676

145


24. Other Current Assets


Prepayments 14,240 2,335 290 148 Amount due from customers for contract 10,985 10,985 10,248 10,248

25,225 13,320 10,538 10,396

Less: Impairment - Prepayments (1,928) (1,928) - - - Amounts due from customers on contract (10,685) (10,685) (10,248) (10,248)

(12,613) (12,613) (10,248) (10,248)

Total other current assets 12,612 707 290 148

Gross amount due from customers for contract Construction contract costs incurred to date 36,272 36,272 21,329 21,329

Attributable profits 7,710 7,710 6,640 6,640

43,982 43,982 27,969 27,969 Less: Progress billings (44,787) (44,787) (27,969) (27,969)

(805) (805) - -

Presented as: Gross amount due from customers for contract work (805) (805) - -

25. Cash and Cash Equivalents


Cash at banks and on hand 23,770 23,152 17 222 Short term deposits with licensed banks 6,944 3,968 3,005 -

Total cash and bank balances 30,714 27,120 3,022 222 Less: Bank overdrafts (Note 26) (2,753) (2,525) - -

Less: Deposits pledged with banks (2,862) (2,862) - -

Cash and cash equivalents 25,099 21,733 3,022 222

Included in deposits with licensed banks of the Group are deposits amounting to RM2,862,000 (2018: RM2,862,000) which are pledged as security for bank facilities and bank guarantees.




146


25. Cash and Cash Equivalents (cont’d)

Short-term deposits are made for varying periods of between one day and one year depending on the immediate cash requirements of the Group and the Company, and earn interests at the respective short-term deposit fixed rates. The weighted average effective interest rates at the reporting date for the Group and the Company are as below:

Group Company 2019 2018 2019 2018 % % % %

Licensed banks 2.51 2.59 2.89 2.92

26. Loans and Borrowings


Current Secured:

Term loan at BLR+2.0% p.a. 370 178 - - Obligations under finance leases (Note 31(b)) 987 1,862 14 13 Bank overdrafts (Note 25) 2,753 2,525 - - 4,110 4,565 14 13

Unsecured: Advances from a non-controlling shareholder of a subsidiary 1,805 1,805 - -

Advance from ultimate holding company 2,022 3,185 2,022 3,185

3,827 4,990 2,022 3,185

7,937 9,555 2,036 3,198

Non-current Secured:

Term loan at BLR+2.0% p.a. (Note 32(a)) 3,800 4,854 - - Obligations under finance leases (Note 31(b)) 1,826 2,510 22 42

5,626 7,364 22 42

Total loans and borrowings (Note 34) 13,563 16,919 2,058 3,240

147


26. Loans and Borrowings (cont’d)

The remaining maturities of the loans and borrowings are as follows:


On demand or within one year 7,937 9,555 2,036 3,198 More than 1 year and less than 2 years 3,526 4,940 22 21 More than 2 years and less than 5 years 1,176 1,248 - 21 5 years or more 924 1,176 - -

13,563 16,919 2,058 3,240

Advances from a non-controlling shareholder of a subsidiary

The advances from a non-controlling shareholder of a subsidiary, Uniphoenix Corporation Bhd. (in liquidation) are unsecured, non-interest bearing and are repayable on demand.

Advance from holding company

The advance from the holding company is unsecured, bears interest of 2.5% per annum and is repayable on demand.

Obligations under finance leases

These obligations are secured by a charge over the leased assets (Note 14). The weighted average discount rate implicit in the lease is 5.5% (2018: 5.5%) per annum.

27. Trade and Other Payables


Current Trade payables

Third parties 32,750 26,091 114 97 Other payables

Amounts due to subsidiaries - - 46,121 39,696 Other payables 19,680 35,166 3,178 4,732 Accruals 14,428 15,547 385 308 Others 61,116 62,669 2,994 5,726

95,224 113,382 52,678 50,462

Total trade and other payables (Note 34) 127,974 139,473 52,792 50,559 Add: Loans and borrowings (Note 26) 13,563 16,919 2,058 3,240

Total financial liabilities carried at amortised cost 141,537 156,392 54,850 53,799




148


27. Trade and Other Payables (cont’d)

(a) Trade Payables

These amounts are non-interest bearing. Trade payables are normally settled on 30 to 90 days (2018: 30 to 90 days) terms. Non-current trade payables are repayable after 12 months on installment basis.

(b) Amounts Due to Subsidiaries

These amounts are unsecured, repayable on demand and non-interest bearing except for an amount of RM3,495,000 (2018: RM3,495,000) which bears interest at the effective average rate of 4.0% (2018: 4.0%) per annum.

28. Share Capital, Revaluation Reserve, Capital Reserve, Merger Deficit and Exchange Reserve

Number of l------------------------------------------- Amount --------------------------------------------l ordinary shares

Share capital Share capital Revaluation Capital Merger Exchange (Issued and (Issued and reserve reserve deficit reserve fully paid) fully paid) ‘000 RM’000 RM’000 RM’000 RM’000 RM’000

Group

Issued and fully paid 2019 At beginning 318,371 159,341 41,603 56 (18,568) (1,884)

Disposal of subsidiaries - - - (212) - - Total comprehensive loss - - - - - (2,233)

At end of 2019 318,371 159,341 41,603 (156) (18,568) (4,117)

2018 At beginning 310,371 155,341 41,603 85 (18,568) (1,925) Conversion of redeemable convertible notes (“RCN”) 8,000 4,000 - (29) - - Total comprehensive profit - - - - - 41

At end of 2018 318,371 159,341 41,603 56 (18,568) (1,884)

149


28. Share Capital, Revaluation Reserve, Capital Reserve, Merger Deficit and Exchange Reserve (cont’d)

Number of ordinary shares l---------------Amount---------------l 2019 2018 2019 2018 ’000 ’000 RM’000 RM’000

Company Issued and fully paid-up At 1 January

Ordinary shares 318,371 310,371 159,341 155,341

Ordinary shares 318,371 310,371 159,341 155,341 Issuance of new shares under - conversion of redeemable notes - 8,000 - 4,000

At 31 December 318,371 318,371 159,341 159,341

The Companies Act, 2016 (2016 Act) which came into effect from 31 January 2017 has repealed the Companies Act, 1965. The 2016 Act has abolished the concept of par or nominal value of shares and hence, the share premium, capital redemption reserve and authorised capital will be abolished. In accordance with Section 618 (2) of the 2016 Act, the amount standing to the credit of the share premium account has become part of the Company’s share capital. There is no impact on the number of ordinary shares in issue of 309,371,000 or the entitlement of the holders of the Company’s ordinary shares.

(a) Merger Deficit

This represents the difference between the consideration paid and the share capital of the acquired companies.

(b) Capital Reserve

This represents reserve arising from bonus issue by a subsidiary.

29. Redeemable Convertible Notes (“RCN”)

On 8 November 2017, the shareholders of the Company at the Extraordinary General Meeting approved the issuance of RCN with an aggregate principal amount of up to RM150 million under a Redeemable Convertible Notes programme convertible into a maximum of 300 million ordinary shares of minimum conversion price at RM0.50 each in the Company, representing approximately 39.26% of the enlarge issued share capital. The RCN has a tenure of 3 years up to December 2020 (“Maturity Date”).

The proceeds from the issuance are utilised for financing of property development activities and working capital requirements as follows:

Proposed Utilised in Utilised in utilisation 2017 2018 Balance Purpose RM’000 RM’000 RM’000 RM’000

Financing of property development activities 77,000 - - 77,000 Working capital requirements 61,000 (2,161) (4,635) 54,204 Estimated expenses in relation to the Proposed Notes Issued 12,000 (839) (365) 10,796

150,000 (3,000) (5,000) 142,000




150


29. Redeemable Convertible Notes (“RCN”) (cont’d)

The salient terms of the RCN are as follows:-

(a) The RCN bear interest from the respective dates on which they are issued and registered at the rate of 0.1% per annum, payable semi-annually in arrears on 30 June and 31 December in each year with the last payment of interest being made on the Maturity Date;

(b) The price at which each Conversion Share shall be issued upon conversion of the Notes be:

(i) In respect of Tranche 1 Notes, 80% of the average closing price per Share on any three (3) consecutive business days as selected by the Noteholder(s) during the forty-five (45) business days immediately preceding the relevant conversion date on which shares were traded on the Main Market of Bursa Securities;

(ii) In respect of Tranche 2 Notes, 82% of the average closing price per Share on any three (3) consecutive business days as selected by the Noteholder(s) during the forty-five (45) business days immediately preceding the relevant conversion date on which Shares were traded on the Main Market of Bursa Securities;

(iii) In respect of Tranche 3 Notes, 85% of the average closing price per Share on any three (3) consecutive business days as selected by the Noteholder(s) during the forty-five (45) business days immediately preceding the relevant conversion date on which Shares were traded on the Main Market of Bursa Securities;

(iv) In respect of Tranche 4 Notes, 90% of the average closing price per Share on any three (3) consecutive business days as selected by the Noteholder(s) during the forty-five (45) business days immediately preceding the relevant conversion date on which Shares were traded on the Main Market of Bursa Securities.

(c) All RCN are convertible at the option of the Company (except Tranche 1), subject to the terms of the Redemption Option at any time after the issue date of the Notes and up to the day falling seven (7) days prior to the Maturity Date;

(d) If the Conversion Price (as elected by the Noteholder(s)) is less than or equal to 65% of the average of the daily traded volume weighted average price (VWAP) of the Company for the 45 market days prior to the relevant closing date in respect of each first sub-tranche of the respective tranches of the Notes. The redemption option offers the Company a contractual right to seek redemption (as opposed to acceding to the Subscriber’s right to convert of the Notes) in the event the market price is below a certain threshold as agreed between the parties;

(e) The Subscriber no longer has a right of conversion and is only paid a redemption amount with a 8% per annum interest for the Notes in the event the Company decides to redeem the Notes. The 65% threshold and 8% per annum interest are figures negotiated and accepted by the Company and Subscriber from a commercial perspective in such an eventuality after the parties taking into consideration the Subscriber’s cost of funding and expected yields;

(f) Any RCN not converted at maturity date may be redeemed by the Company at 100% of their principal amount.

151


29. Redeemable Convertible Notes (“RCN”) (cont’d)

The liability component and equity component of the RCN are allocated at initial recognition as follows:-

Group/Company 2019 2018 RM’000 RM’000

At 1 January - 2,184 Issue during the financial year – liability component - 5,000 Conversion to ordinary shares during the financial year - (4,000) Equity component on borrowing - (127) Reversal of equity component on borrowing - 443 Repayment - (3,500)

At 31 December - -

On 7 November 2018, RCN was mutually terminated and RM3.5 million RCN was redeemed.

30. Related Party Transactions

(a) Sale and Purchase of Goods and Services

In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place at terms agreed between the parties during the financial year:

Related Companies within Seaview Holdings Sdn. Bhd.:


Interest on advances 34 52 34 52

Related companies within Damansara Realty Berhad:

Management fees payable to holding company - - 10,339 13,288 Interest income from subsidiary companies - - 2,968 2,966 Dividend income from subsidiary companies - - - 680 Intercompany sales 6,257 3,785 - -




152


30. Related Party Transactions (cont’d)

(b) Compensation of Key Management Personnel


Salaries and other emoluments 2,927 4,080 1,928 2,878 Defined contribution plan 410 537 292 384

3,337 4,617 2,220 3,262

31. Commitments

(a) Operating Lease Commitments – As Lessee

The Group has entered into commercial leases on office buildings. These leases have an average tenure of three years with no renewal option or contingent rent provision included in the contract. There are no restrictions placed upon the Group by entering into these leases.

Future minimum rentals payable under non-cancellable operating leases at the reporting date are as follows:

Group 2019 2018 RM’000 RM’000

Not later than 1 year 64,903 64,903 Later than 1 year but not later than 5 years 67,481 67,481 Later than 5 years - -

132,384 132,384

(b) Finance Lease Commitments

The Group has finance leases for certain motor vehicles and plant and machinery (Note 14). These leases do not have terms of renewal, but have purchase options at nominal values at the end of the lease term.

153


31. Commitments (cont’d)

(b) Finance Lease Commitments (cont’d)

Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:

Group 2019 2018 RM’000 RM’000

Minimum lease payments:

Not later than 1 year 1,046 1,862 Later than 1 year but not later than 2 years 1,006 1,928 Later than 2 years but not later than 5 years 534 881 Later than 5 years 336 -

Total minimum lease payments 2,922 4,671 Less: Amounts representing finance charges (109) (299)

Present value of minimum lease payments 2,813 4,372

Present value of payments:

Not later than 1 year 989 1,862 Later than 1 year but not later than 2 years 983 2,196 Later than 2 years but not later than 5 years 514 314 Later than 5 years 327 -

Present value of minimum lease payments 2,813 4,372 Less: Amount due within 12 months (Note 26) (987) (1,862)

Amount due after 12 months (Note 26) 1,826 2,510




154


32. Fair Value of Financial Instruments

(a) Fair Value of Financial Instruments by Classes That are not Carried at Fair Value and Whose Carrying Amounts are not Reasonable Approximation of Fair Value

Group Carrying Amount Fair value RM’000 RM’000

At 31 December 2019 Financial liabilities: Non-current Loans and borrowings (non-current) (Note 26) - Term loan 3,800 -

At 31 December 2018

Financial liabilities: Non-current Loans and borrowings (non-current) (Note 26) - Term loan 4,854 -

(b) Determination of Fair Value

Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value:

Note Trade and other receivables (current) 23 Loans and borrowings (current) 26 Trade and other payables (current) 27 The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values due to their short-term

nature.

The carrying amounts of the current portion of loans and borrowings are reasonable approximations of fair values due to the insignificant impact of discounting.

The fair values of non-current loans and borrowings are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

155


32. Fair Value of Financial Instruments (cont’d)

(c) Fair Value Measurement

The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities.

Quantitative Disclosures Fair Value Measurement Hierarchy for Asset as at 31 December 2019 Carrying amount Fair value Fair value disclosures Date of valuation RM’000 RM’000

Investment properties (Note 17) 31 December 2016 70,462 82,515

Fair value disclosure of investment properties are categorised in Level 2 within the fair value hierarchy where the valuation involved significant directly or indirectly observable inputs.

33. Financial Risk Management Objectives and Policies

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk and interest rate risk.

The Board of Directors reviews and agrees policies and procedures for the management of these risks. The audit committee provides independent oversight to the effectiveness of the risk management process.

It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall be undertaken.

The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.

(a) Credit Risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including cash and bank balances), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

Exposure to credit risk

At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position.

Information regarding credit enhancements for trade and other receivables is disclosed in Note 23.




156


33. Financial Risk Management Objectives and Policies (cont’d)

(a) Credit Risk (cont’d)

Credit Risk Concentration Profile

The Group determines concentrations of credit risk by monitoring the business segment of its trade receivables on an ongoing basis. The credit risk concentration profile of the Group’s trade receivables at the reporting date are as follows:

Group

2019 2018 RM’000 % in total RM’000 % in total

By business segments:

Property development 18,940 41 5,975 14 Integrated facility management 25,985 56 36,398 84 Project management consultancy 1,301 3 747 2

46,226 100 43,120 100

Financial Assets that are Neither Past Due nor Impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 23. Deposits with banks and other financial institutions that are neither past due nor impaired are placed with or entered into with reputable financial institutions.

Financial Assets that are Either Past Due or Impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 23.

(b) Liquidity Risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.

157



(b) Liquidity risk (cont’d)

Analysis of Financial Instruments by Remaining Contractual Maturities

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

On demand or within One to Over five one year five years years Total RM’000 RM’000 RM’000 RM’000

Group

At 31 December 2019 Financial liabilities: Trade and other payables 127,974 - - 127,974 Loans and borrowings 7,937 4,702 924 13,563

Total undiscounted financial liabilities 135,911 4,702 924 141,537

At 31 December 2018 Financial liabilities: Trade and other payables 139,473 - - 139,473 Loans and borrowings 9,555 6,188 1,176 16,919

Total undiscounted financial liabilities 149,028 6,188 1,176 156,392

Company

At 31 December 2019 Financial liabilities: Trade and other payables 52,792 - - 52,792 Loans and borrowings 2,036 22 - 2,058

Total undiscounted financial liabilities 54,828 22 - 54,850

At 31 December 2018 Financial liabilities: Trade and other payables 50,559 - - 50,559 Loans and borrowings 3,198 42 - 3,240

Total undiscounted financial liabilities 53,757 42 - 53,799




158



(c) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s and the Company’s exposure to interest rate risk arises primarily from their loans and borrowings. At the reporting date, the Group and Company do not have floating rate borrowings.

(d) Foreign Currency Risk

Foreign currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the respective functional currencies of the Group entities, primarily RM, Singapore Dollar and Philippines Peso. The management believes that the foreign exchange risk is minimal.

It is not the Group’s policy to hedge its transactional foreign currency risk exposure.

34. Capital Management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. No changes were made in the objectives, policies or processes during the years ended 31 December 2019 and 31 December 2018.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group’s policy is to keep the gearing ratio below 70%. The Group includes within net debt, loans and borrowings, trade and other payables, less cash and bank balances. Capital includes equity attributable to the owners of the parent.


Loans and borrowings 26 13,563 16,919 2,058 3,240 Trade and other payables 27 127,974 139,473 52,792 50,559 Cash and cash equivalents 25 (30,714) (27,120) (3,022) (222)

Net debt 110,823 129,272 51,828 53,577 Equity attributable to the owners of the parent, representing total capital 188,983 170,178 67,950 66,412

Capital and net debt 299,806 299,450 119,778 119,989

Gearing ratio 37% 43% 43% 45%

159


35. Segment Information

For management purposes, the Group is organised into business units based on their products and services, and has four reportable operating segments as follows:

(i) Property and Land Development (“PLD”) - the development of residential and commercial properties.(ii) Integrated Facility Management (“IFM”) - provision of property services comprising of general services, parking operation, trading of

parking equipments and the provision of related consultancy services. (iii) Project Management Consultancy (“PMC”) - facility management, project management and consultant, construction management,

energy management services, hospital planning, maintenance services and manpower services.

Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.

(a) Inter-segment revenues are eliminated on consolidation.

(b) Additions to non-current assets consist of:

2019 2018 Note RM’000 RM’000

Property, plant and equipment 14 4,611 4,358

4,611 4,358




160


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161


36. Material Litigations

(a) Om Cahaya Mineral Asia Berhad (“OmC” or the “Plaintiff”) v Damansara Realty (Pahang) Sdn. Bhd. (“DRP” or the “Defendant”)

On Appeal against KLHC’s Trial Decision (“Appeal 1”) - Liability Appeal

Following the KLHC Trial Decision on 19 Oct 2018, DRP had filed an appeal in the Court of Appeal (“COA”) on 5 November 2018. The parties had also updated the COA on the status of Record of Appeal during the case management on 10 December 2018.

However, during numerous case managements held between 10 December 2018 to 20 November 2019, the parties had updated the COA on status of the Grounds of Judgment (“GOJ”) that is still pending in the KLHC. DRP had also written to the KLHC several reminder on their request of the GOJ sent on 13 November 2018, 22 November 2018, 11 January 2019, 30 January 2019, 21 February 2019, 12 March 2019, 9 April 2019, 7 May 2019, 8 July 2019, 9 July 2019 and 28 August 2019.

During the case management on 20 November 2019, the COA in noting the same had fixed a case management on 30 January 2020 for the parties to update the COA on the status of the GOJ.

During the case management on 30 January 2020, which was heard together with the case management for appeal against KLHC’s Trial Decision (“Appeal 2 / Assessment Appeal”) as stated below, the COA noted on the receipt of the GOJ from the KLHC and the fact that the appeal herein (“Liability Appeal”) and the Assessment Appeal are related and to be heard together. As such, the COA directed the parties to file their Common Core Bundle, chronology of facts, written submission, and executive summary by 16 June 2020, and further fixed the Hearing for both appeals on 30 June 2020.

On Appeal against KLHC’s Trial Decision (“Appeal 2”) - Assessment Appeal

During the case management on 4 December 2019, DRP informed the COA that the KLHC has released their GOJ, as notified on 3 December 2019. During the case management on 9 January 2020, the Appellant had also updated the COA on the filing of Supplementary Record of Appeal as directed by the COA.

Further, during the case managements on 9 January 2020, 14 January 2020, 28 January 2020, and 30 January 2020, the Appellant had requested for the appeal herein (“Assessment Appeal”) and the Liability Appeal (as stated above) to be heard on the same date as both appeals came from the decisions out of the same case in KLHC, which have the same facts, parties, solicitors, GOJ and documents as provided in the Record of Appeal. The COA, in noting the same, directed the parties to file their Common Core Bundle, chronology of facts, written submission, and executive summary by 16 June 2020, and further fixed the Hearing for both appeals on 30 June 2020.

(b) Express Rail Link Sdn Bhd (“ERL” or the “Plaintiff”) v Semasa Parking Sdn Bhd (“SPSB” or the “Defendant”) & Metro Parking (M) Sdn Bhd (“MPM” or the “Third Party”)

During the case management on 30 December 2019, the Third Party has informed the Court of MPM’s application for leave to amend MPM’s Statement of Defence (“Amendment Application”) and the status of its service to all parties. The Court then gave the filing directives of Affidavits in Reply and Written Submission to all parties and fixed the Hearing date of the Amendment Application on 24 February 2020.

The Case Management which is fixed on 21 February 2020 and the Full Trial dates which are fixed 22 April 2020 to 24 April 2020 are maintained.

(c) Southern Flame Sdn Bhd (“SF/Plaintiff”) v Metro Parking (M) Sdn Bhd (“MPM/Defendant”)

On 8 March 2017, SF had initiated legal suit against MPM at the Kuala Lumpur High Court for the taking of MPM’s accounts on the monthly car park collection at the South Wing, Johor Bahru Sentral, Johor Bahru from May 2011 onwards and thereafter for the payment sum allegedly due and payable of taking such accounts.

On 14 March 2019, the High Court had entered judgment in favour of SF for taking of all accounts for the period commencing from 1 May 2011 until 31 May 2012 and thereafter the payment by MPM to SF of the sums found due and payable on the taking of such accounts. The High Court also orders for the sums payable to be assessed by the Court, which Hearing of the same is fixed on 31 March 2020 (“Assessment of Damages”), and costs of RM30,000 to be paid by MPM to SF after the Hearing of the Assessment of Damages (“the High Court’s Decision”).




162


36. Material Litigations (cont’d)

(c) Southern Flame Sdn Bhd (“SF/Plaintiff”) v Metro Parking (M) Sdn Bhd (“MPM/Defendant”) (cont’d)

On 18 March 2019, MPM appealed against the High Court’s Decision at the Court of Appeal (“COA”). On 18 February 2020 and upon hearing the appeal by MPM, the COA had allowed MPM’s appeal in part as follows: -

(i) MPM to account for the sums payable from 1 May 2011 to 31 November 2011; (ii) payment to be accounted from 1 December 2011 to 31 May 2012 is set aside; and (iii) costs of RM10,000 to be paid by SF to MPM.

Following from the COA’s Decision above, the High Court maintains the Hearing of Assessment of Damages on 31 March 2020. While preparing for the Hearing, the parties are in the midst of negotiating for an amicable settlement which is expected to be concluded prior to the said Hearing.

37. Subsequent Event

The world is encountering a pandemic of COVID-19 globally since the beginning of Year 2020. With the spread of the virus into all of Malaysian States and Federal Territories, the Malaysian government announced on 16 March 2020 to implement a “Movement Control Order (“MCO”) to curb the rising cases in the country.

Based on preliminary assessment, the potential financial effects from COVID-19 pandemic to the Group’s and the Company’s financial performance for the next financial period 2020 is not significant. The Group and Company will continue to monitor the situation, reassess the financial position, take appropriate and timely actions to minimise the impact.

163

List of Properties Held by the GroupAs at 31 December 2019

Title / Particulars of Location Tenure Area DescriptionAge of

Building

Net Book Value RM’000

Date of Valuation

Lot Nos. 17423, 17424, 17427, 17431, 17434, 17439 Mukim Sungai Karang Kuantan, Pahang

Lot Nos. 5995, 5997 & 5998 Mukim Beserah Kuantan, Pahang

Freehold 504.29 Acres

9 parcels of agricultural land with development potential

N/A 37,38631 December 2019

Lot Nos. 2389 to 2402 Mukim of Beserah Kuantan Pahang

Freehold 0.56 Acres

14 parcels of vacant subdivided commercial terraced shop/office plot

Lot Nos. 4139 to 4160 and 4162 to 4188 Mukim of BeserahKuantan, Pahang

Freehold 2.63 Acres

49 parcels of subdivided residential terrace/ semi-detached plot

Lot Nos. 2189 and 2190 Mukim of BeserahKuantan, Pahang

Freehold 0.27 Acres

2 parcels of vacant subdivided residential semi-detached plot

Lot No. 2388Mukim of BeserahKuantan, Pahang

Freehold 1.013 Acres

A parcel of commercial land designated for petrol station use

Levels 14, Menara Safuan No. 80, Jalan Ampang Kuala Lumpur

Freehold 5,122 sq. ft.

Office building 28 years 1,419 5 December 2019

No. 7, Jalan Hujung Permatang Satu 26/25A, Section 26 40000 Shah AlamSelangor


Double storey shophouse N/A 147 7 December 2019

No. 47, Blok J, Jalan Aliff 4 Taman Damansara Aliff 81200 Johor Bahru, Johor


Shop office N/A 1,639 2 December 2019

No. 33, Blok H, Jalan Aliff 4 Taman Damansara Aliff 81200 Johor Bahru, Johor


Shop office N/A 1558 2 December 2019

List of Properties Held by the Group

Shareholdings Statistics

Shareholdings Statistics-Warrant

OTHER INFORMATION


164

List of Properties Held by the GroupAs at 31 December 2019 (cont’d)

Title / Particulars of Location Tenure Area DescriptionAge of

Building

Net Book Value RM’000

Date of Valuation

PTD 170455 - PTD 170522 Mukim Tebrau, Johor Bahru, Johor

Freehold 128,508 68 parcels of vacant subdivided commercial terraced shop/office plot

N/A 69,0433 November 2016

PTD 170326 - PTD 170373Mukim Tebrau, Johor BahruJohor

Freehold 87,819 48 parcels of vacant subdivided commercial terraced shop/office plot

PTD 153151Mukim Tebrau, Johor BahruJohor

Freehold 67,213 A parcel of commercial land

PTD 162934,Mukim Tebrau, Johor BahruJohor

Freehold 23,180 A parcel of commercial land


Freehold 8,078 A parcel of “Building” land designated for kindergarden use


Freehold 10,692 A parcel of “Building” land designated for kindergarden use


Freehold 43,560 A parcel of commercial land designated for petrol station use

The above properties are valued at cost. These properties will be revalued at recoverable amount if there is any significant impairment.

165

Shareholdings StatisticsAs at 14 May 2020

TOTAL NUMBER OF ISSUED SHARES OF THE COMPANY 318,371,260 ordinary shares, with voting right of one vote per ordinary share

ANALYSIS BY SIZE OF HOLDINGS

Size of Holdings No. of Holders % No. of Shares %

1 - 99 1,401 4.276 52,818 0.016

100 – 1,000 20,565 62.768 11,472,840 3.603

1,001 – 10,000 9,585 29.255 27,665,030 8.689

10,001 – 100,000 1,083 3.305 32,395,271 10.175

100,001 – 15,918,562 (*) 127 0.387 58,884,389 18.495

15,918,563 and above (**) 2 0.006 187,900,912 59.019

TOTAL 32,763 100.000 318,371,260 100.00

Remark : * - Less than 5% of issued shares ** - 5% and above of issued shares

LIST OF TOP 30 HOLDERS

(Without aggregating securities from different securities accounts belonging to the same registered holder)

No Name Holdings %

1. Seaview Holdings Sdn. Bhd. 157,816,580 49.569

2. Sindora Berhad 30,084,332 9.449

3. Kulim (Malaysia) Berhad 13,879,926 4.359

4. UOB Kay Hian Nominees (Asing) Sdn. Bhd.Exempt an for UOB Kay Hian Pte Ltd (A/C Clients)

4,799,800 1.507

5. Datuk Tay Hock Tiam 3,410,000 1.071

6. Datin Leung Kit Man 1,509,068 0.473

7. Kenanga Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Khaled bin Mohamad Aroff

1,050,000 0.329

8. Harun bin Kassim 1,000,000 0.314

9. Kenanga Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Muhamad Hapiz bin Othman

949,200 0.298

10. Wong Ten Yong 919,900 0.288

11. Tan Beng Nee 914,000 0.287

12. Kenanga Nominees (Asing) Sdn. Bhd.Exempt an for Phillip Securities Pte Ltd (Client Account)

908,100 0.285

13. Esther Chong Wen Yi 900,000 0.282

14. Kek Hing Kok 820,000 0.257

15. Inter-Pacific Equity Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account for Soh Jin Gee

770,000 0.241




OTHER INFORMATION


166

Shareholdings StatisticsAs at 14 May 2020 (cont’d)

No Name Holdings %

16. Affin Hwang Investment Bank BerhadIVT (SKM)

680,000 0.213

17. M&A Nominee (Tempatan) Sdn. Bhd.Pledged Securities Account for Derrick Wee Hoe Eng ( JB)

638,900 0.200

18. Public Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Tan Tian Sang @ Tan Tian Song (E-PPG)

600,100 0.188

19. Ng Say Piyu 510,000 0.160

20. Rashid bin Sihes 505,800 0.158

21. Public Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Tam Seng @ Tam Seng Sen (E-PTS)

500,000 0.157

22. Datuk Tay Hock Tiam 498,025 0.156

23. Ong Seng Chye 490,500 0.154

24. PMB Investment Berhad 450,000 0.141

25. Selina Ng Li Yin 416,000 0.130

26. Ah Hen Hing 383,100 0.120

27. Yep Meng Fei 377,300 0.118

28. Public Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Chew Thian Hock (E-JPR)

374,300 0.117

29. Soon Ah Seng 372,800 0.117

30. Ho Jia Luen 370,000 0.116

Total no. of holders : 30Total holdings : 226,897,731Total percentage (%) : 71.268

167

Shareholdings StatisticsAs at 14 May 2020 (cont’d)

SUBSTANTIAL SHAREHOLDERS

Name Direct Indirect

No. ofshares held

%held

No. ofshares held

%Held

Seaview Holdings Sdn. Bhd. 157,816,580 49.57 - -

Dato’ Daing A Malek bin Daing A Rahaman - - 157,816,580# 49.57

Sindora Berhad 30,084,332 9.45 - -

Kulim (Malaysia) Berhad 13,879,926 4.36 30,084,3321 9.45

Johor Corporation - - 43,964,2582 13.81

Notes:-

1 Deemed interested by virtue of its shareholdings in Sindora Berhad pursuant to Section 7 of the Act.2 Deemed interested by virtue of its shareholdings in Kulim (Malaysia) Berhad pursuant to Section 7 of the Act.# Dato’ Daing A Malek bin Daing A Rahaman deemed interested by virtue of his shareholdings in Seaview Holdings Sdn. Bhd. pursuant to Section 8 of

the Act.

ANALYSIS OF SHAREHOLDERS

Size of Holdings No. of Holders % No. of Shares %

Malaysian - Bumiputra 16,703 50.981 235,267,296 73.893

- Others 15,767 48.124 73,168,344 22.980

Foreigner 293 0.894 9,935,620 3.119

TOTAL 32,763 100.00 318,371,260 100.00

DIRECTORS’ SHAREHOLDINGS

No Name Holdings %

1. YB Dato’ Ahmad Zahri bin Jamil 20,000 0.006

2. Haji Abdullah bin Md Yusof - -

3. YBhg Dato’ Mohd Aisom bin Omar - -

4. Shahrizam bin A Shukor - -

5. Vinie Chong Pui Ling - -

Summary

Total no. of holder : 1Total holdings : 20,000Total percentage (%) : 0.006




OTHER INFORMATION


168

Shareholdings Statistics-WarrantAs at 14 May 2020

ANALYSIS BY SIZE OF HOLDINGS-WARRANT

Size of Holdings No. of Holders % No. of Warrants %

1 - 99 1,524 4.726 42,303 0.027

100 – 1,000 26,021 80.705 9,809,864 6.341

1,001 – 10,000 4,250 13.181 11,175,586 7.224

10,001 – 100,000 389 1.206 11,436,650 7.393

100,001 – 7,734,276 (*) 56 0.173 28,270,697 18.276

7,734,277 and above (**) 2 0.006 93,950,456 60.736

TOTAL 32,242 100.000 154,685,556 100.00

Remark : * - less than 5% of issued warrants ** - 5% and above of issued warrants

LIST OF TOP 30 HOLDERS-WARRANT

(Without aggregating securities from different securities accounts belonging to the same registered holder)

No Name Holdings %

1. Seaview Holdings Sdn. Bhd. 78,908,290 51.012

2. Sindora Berhad 15,042,166 9.724

3. Kulim (Malaysia) Berhad 6,939,963 4.486

4. Maybank Securities Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Looi Lee Yee (Margin)

2,890,000 1.868

5. Datuk Tay Hock Tiam 1,600,000 1.034

6. UOB Kay Hian Nominees (Asing) Sdn. Bhd.Exempt an for UOB Kay Hian Pte Ltd (A/C Clients)

1,533,060 0.991

7. Eng Zer Jun 1,024,600 0.662

8. Datin Leung Kit Man 739,534 0.478

9. Tiew Soon Kuan 700,000 0.452

10. Kenanga Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Tan Seng Yong

650,000 0.420

11. Meor Yaccob bin Hassan 650,000 0.420

12. Asmizan bin Huzaini 642,300 0.415

13. Sam Fong @ Chan Sam Fong 600,000 0.387

14. Kenanga Nominees (Tempatan) Sdn. Bhd.Rakuten Trade Sdn Bhd for Muhammad Ali bin Yahya

500,000 0.323

15. Maybank Nominees (Tempatan) Sdn. Bhd.Mohamad Alfalah bin Zakaria

500,000 0.323

169

Shareholdings Statistics-WarrantAs at 14 May 2020 (cont’d)

No Name Holdings %

16. Kenanga Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Muhamad Hapiz bin Othman

474,600 0.306

17. Mohd Radzi bin Hanafi 456,700 0.295

18. Wong Jia Yin 427,000 0.276

19. Tan Seng Yong 402,000 0.259

20. Tan Beng Nee 387,500 0.250

21. Puteh Hanis binti Adlan 356,300 0.230

22. Kenanga Nominees (Tempatan) Sdn. Bhd.Rakuten Trade Sdn Bhd for Hong Boon Chong

305,100 0.197

23. Inter-Pacific Equity Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Soh Jin Gee

292,000 0.188

24. Ng Kang Kun 291,200 0.188

25. Rashid bin Sihes 283,900 0.183

26. Ng Say Piyu 255,000 0.164

27. Datuk Tay Hock Tiam 249,012 0.160

28. Ong Seng Chye 245,250 0.158

29. Selina Ng Li Yin 208,000 0.134

30. Pun Kwee Hiong 200,000 0.129

Total no. of holders : 30Total holdings : 117,753,475Total percentage (%) : 76.124

SUBSTANTIAL SHAREHOLDERS-WARRANT

Name Direct Indirect

No. ofwarrants held

%held

No. ofwarrants held

%Held

Seaview Holdings Sdn. Bhd. 78,908,290 51.01 - -

Dato’ Daing A Malek bin Daing A Rahaman - - 78,908,290# 51.01

Sindora Berhad 15,042,166 9.72 - -

Kulim (Malaysia) Berhad 6,939,963 4.49 15,042,1661 9.72

Johor Corporation - - 21,982,1292 14.21

Notes:-

1 Deemed interested by virtue of its shareholdings in Sindora Berhad pursuant to Section 7 of the Act.2 Deemed interested by virtue of its shareholdings in Kulim (Malaysia) Berhad pursuant to Section 7 of the Act.# Dato’ Daing A Malek bin Daing A Rahaman deemed interested by virtue of his shareholdings in Seaview Holdings Sdn. Bhd. pursuant to Section 8 of

the Act.



Notice of 58th AnnualGeneral Meeting

OTHER INFORMATION


170

Shareholdings Statistics-WarrantAs at 14 May 2020 (cont’d)

ANALYSIS OF SHAREHOLDERS-WARRANT

Size of Holdings No. of Holders % No. of Warrants %

Malaysian - Bumiputra 16,630 51.579 121,202,723 78.352

- Others 15,332 47.553 30,094,575 19.453

Foreigner 280 0.868 3,388,258 2.189

TOTAL 32,242 100.00 154,685,556 100.00

DIRECTORS’ SHAREHOLDINGS-WARRANT

No Name Holdings %

1. YB Dato’ Ahmad Zahri bin Jamil 10,000 0.006

2. Haji Abdullah bin Md Yusof - -

3. YBhg Dato’ Mohd Aisom bin Omar - -

4. Shahrizam bin A Shukor - -

5. Vinie Chong Pui Ling - -

Summary

Total no. of holders : 1Total holdings : 10,000Total percentage (%) : 0.006

171

Notice of 58th AnnualGeneral MeetingNOTICE IS HEREBY GIVEN THAT the 58th Annual General Meeting (AGM) of Damansara Realty Berhad [196001000367(4030-D)] (DBhd or the Company) will be held at Grand Ballroom, Level 1, Forest City Phoenix International Golf Hotel, Jalan Persiaran 5, Forest City Golf Resort, 81550 Gelang Patah, Johor, Malaysia on Wednesday, 26 August 2020 at 11.30 a.m. to transact the following business:

AGENDA

1. To receive the Audited Financial Statements for the financial year ended 31 December 2019 together with the Directors and Auditors Report thereon.

(Explanatory Note 1)

2. To consider and if thought fit, to pass the following Ordinary Resolutions in accordance with the Company’s Constitution:

(a) “THAT YB Dato’ Ahmad Zahri bin Jamil, the Director retiring by rotation in accordance with the Article 68.3 of the Company’s Constitution, be and is hereby re-elected as a Director of the Company”.

Resolution 1

(b) “THAT YBhg. Dato’ Mohd Aisom bin Omar, the Director retiring by rotation in accordance with the Article 68.3 of the Company’s Constitution, be and is hereby re-elected as a Director of the Company”.

Resolution 2

3. To approve the payment of Directors’ Fees to Non-Executive Directors (NEDs) amounting to RM480,000 for the period from 27 August 2020 until the next AGM of the Company in 2021.

Resolution 3

4. To approve the payment of Directors’ Remunerations (excluding Directors’ Fees) to the Non-Executive Directors up to an amount of RM150,000.00 with effect from 27 August 2020 until the next AGM of the Company in 2021.

Resolution 4(Explanatory Note 2)

5. To re-appoint Messrs. Jamal, Amin & Partners as the Company’s Auditors for the financial year ending 31 December 2020 until the conclusion of the next AGM and to authorise the Directors to determine their remuneration.

Resolution 5

AS SPECIAL BUSINESS

To consider and, if thought fit, pass the following resolutions:

6. ORDINARY RESOLUTION

AUTHORITY TO ALLOT SHARES IN GENERAL PURSUANT TO SECTIONS 75 AND 76 OF THE COMPANIES ACT, 2016 (the Act)

“THAT pursuant to Sections 75 and 76 of the Companies Act, 2016 and subject to the approvals of the relevant governmental/regulatory authorities, the Directors be and are hereby empowered to issue shares in the capital of the Company from time to time and upon such terms and conditions and for such proposes as the Directors, may at their absolute discretion deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 20% of the issued share capital of the Company for the time being, and that the Directors be and are hereby also empowered to obtain the approval from the Bursa Malaysia Securities Berhad for the listing and quotation of the additional shares so issued and that such authority shall continue to be in force until the conclusion of the next AGM of the Company.”

Resolution 6 (Explanatory Note 3)




OTHER INFORMATION


172

Notice of 58th Annual General Meeting (cont’d)

7. ORDINARY RESOLUTION

PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR THE EXISTING RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE (Proposed Shareholders’ Mandate)

THAT, subject always to the Act and Main Market Listing Requirements, of Bursa Malaysia Securities Berhad, approval be and is hereby given to the Company and/or its subsidiary companies to renew the mandate for the existing Recurrent Related Party Transactions of a Revenue or Trading Nature from the shareholders of the Company for the Company and/or its subsidiary companies to enter into all arrangements and/or transactions involving the interest of Directors, substantial shareholders or persons connected with Directors and/or substantial shareholders of the Company and/or its subsidiary companies (Related Parties) as outlined in the Section 2.2 of the Circular to Shareholders dated 11 June 2020 (Circular to Shareholders), which are necessary for the day-to-day operations of the Company and/or its subsidiary companies, and are within the ordinary course of business of the Company and/or its subsidiary companies (Proposed Shareholders’ Mandate), subject further to the following:

i) the transactions are in the ordinary course of business for the day-to-day operations and normal commercial terms which are not more favorable to the related parties than those generally available to the public and not to the detriment of the minority shareholders; and

ii) disclosure will be made in the Annual Report of the aggregate value of transactions conducted pursuant to the Proposed Shareholders’ Mandate during the financial year including amongst others, the following information: -

a) the type of the Recurrent Related Party Transactions made: and b) the names of the related parties involved in each type of the Recurrent Related Party Transaction

entered into and their relationship with the Company;

AND THAT such approval shall continue to be in force until:-

i) the conclusion of the next AGM of the Company following the General Meeting at which the Proposed Shareholders’ Mandate was passed, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed;

ii) the expiration of the period within which the next AGM after this date is required to be held pursuant to Section 340 (2) of the Companies Act, 2016 (the Act) (but shall not extend to such extensions as may be allowed pursuant to Section 340 (4) of the Act); or

iii) revoked or varied by ordinary resolution passed by the shareholders of the Company in a general meeting; whichever is earlier.

AND FURTHER THAT the Directors of the Company be authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary or give effect to the Proposed Shareholders’ Mandate


173


8. SPECIAL RESOLUTION 1

PROPOSED CHANGE OF THE COMPANY’S NAME FROM “DAMANSARA REALTY BERHAD” TO “DAMANSARA HOLDINGS BERHAD” (PROPOSED CHANGE OF THE COMPANY’S NAME)

“THAT, the name of the Company be hereby changed from “Damansara Realty Berhad” to “Damansara Holdings Berhad” with effect from the date of the Notice of Registration of New Name issued by the Companies Commission of Malaysia to the Company.

AND THAT the Constitution of the Company be hereby amended to substitute all references in the Constitution to “Damansara Realty Berhad”, wherever the same may appear, with “Damansara Holdings Berhad”, subject to and upon issuance of the Notice of Registration of New Name by the Companies Commission of Malaysia to the Company.

AND THAT the Directors and/or the Secretary of the Company be and are hereby authorised to take all such necessary steps and do all acts and things to give effect to the Proposed Change of the Company’s Name with full power to assent to any conditions, modifications, variations and/or amendments as may be required by the relevant authorities.”


9. To transact any other business of the Company of which due notice shall have been given in accordance with the Companies Act, 2016

By Order of the Board DAMANSARA REALTY BERHAD

WAN RAZMAH BINTI WAN ABD RAHMAN(MAICSA 7021383)(SSM Practising Certificate No. 202008002111)Secretary

Venue : Kuala LumpurDated : 11 June 2020




OTHER INFORMATION


174


EXPLANATORY NOTES

1. AUDITED FINANCIAL STATEMENTS FOR FINANCIAL YEAR

The Audited Financial Statements laid at this meeting pursuant to Section 340(1)(a) of the Companies Act, 2016 are meant for discussion only. It does not require shareholders’ approval, and therefore, will not be put for voting.

2. ORDINARY RESOLUTION 4 – TO APPROVE THE REMUNERATION FOR NON-EXECUTIVE DIRECTORS

Directors’ Remuneration (excluding Directors’ Fees) comprises the allowance and other emoluments payable to the Chairman and other Non-Executive Directors is as set out below:

Items Chairman NEDs

Monthly Fixed Allowance RM5,000 -

Other Benefits Travelling and other claimable benefits

Travelling and other claimable benefits

Meeting Allowance (per meeting):

• BoardMeeting RM1,000 RM1,000

• BoardAuditCommitteeMeeting - RM1,000

• BoardNominationandRemunerationCommitteeMeeting - RM1,000

• BoardRiskManagementCommitteeMeeting - RM1,000

• TenderBoardCommitteeMeeting - RM1,000

• AnnualGeneralMeeting RM1,000 RM1,000

• ExtraordinaryGeneralMeeting RM1,000 RM1,000

3. ORDINARY RESOLUTION 6 – AUTHORITY TO ALLOT SHARES PURSUANT TO SECTIONS 75 AND 76 OF THE COMPANIES ACT, 2016

The proposed Ordinary Resolution 6 is the renewal of the mandate obtained from the members at the last AGM (the previous mandate). The proposed Ordinary Resolution 6, if passed, would provide flexibility to the Directors to undertake fund raising activities, including but not limited to further private placement of shares for the purpose of funding the Company’s future investment project(s), working capital and/or acquisition(s), by the issuance of shares in the Company to such persons/corporations at any time as the Directors may deem fit provided that the aggregate number of shares issued pursuant to the mandate does not exceed 20% of the total number of issued shares of the Company for the time being, without having to convene a general meeting. This authority, unless revoked or varied by the Company in a general meeting, will expire at the conclusion of the next AGM of the Company or at the expiry of the period within which the next AGM is required to be held after the approval was given, whichever is earlier.

4. ORDINARY RESOLUTION 7 – PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR THE EXISTING RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE (Proposed Shareholders’ Mandate)

The Ordinary Resolution 7 proposed, if passed, is to authorise the Company and/or its subsidiary companies to enter into any recurrent transactions of a revenue or trading nature with Related Parties which are necessary for the day-to-day operations of the Group, subject to the transaction being in the ordinary course of business, on arms’ length basis and are based on normal commercial terms that are not more favorable to the related parties than those generally made available to the public.

Please refer to the Part A of Circular to Shareholders dated 11 June 2020 for further information

175

5. SPECIAL RESOLUTION 1 - PROPOSED CHANGE OF THE COMPANY’S NAME FROM “DAMANSARA REALTY BERHAD” TO “DAMANSARA HOLDINGS BERHAD” (PROPOSED CHANGE OF THE COMPANY’S NAME)

The Proposed Change of the Company’s Name, if passed, shall reflect the Group’s core businesses in view that the Group has diversified its principle activities to include the Property and Land Development, Integrated Facilities Management and Project and Medical Consultancy.

Please refer to the Part B of Circular to Shareholders dated 11 June 2020 for further information.

NOTES:

1. In respect of deposited securities, only members whose names appear on the Record of Depositors on 19 August 2020 (General Meeting Record of Depositors) shall be eligible to attend the meeting or appoint proxy(ies) to attend and/or vote on his/her behalf.

2. A member entitled to attend and vote at this meeting is entitled to appoint a proxy/(proxies or attorney) or authorised representative to attend and vote in its stead.

3. A proxy may but need not be a member of the Company and need not be an advocate, an approved company auditor or a person approved by the Registrar of Companies.

4. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy but not more than two (2) proxies in respect of each securities account it holds which is credited with ordinary shares of the Company. The appointment of two (2) proxies in respect of any particular securities account shall be invalid unless the authorised nominee specifies the proportion of its shareholding to be represented by each proxy.

5. Where a member of the Company is an Exempt Authorised Nominee (“EAN”) as defined under the Secruties Industry (Central Depositories) Act 1991 which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which EAN may appoint in respect of each omnibus account it holds.

6. Where a member or the authorised nominee appoints two (2) proxies, or where an exempt authorised nominee appoints two (2) or more proxies, the proportion of shareholdings to be represented by each proxy must be specified in the instrument appointing the proxies.

7. The appointment of a proxy may be made in hard copy form or by electronic form. In the case of an appointment made in hard copy form, the instrument appointing a proxy and the Power of Attorney or other authority (if any) under which it is signed, shall be deposited at the Share Registrar of Damansara Realty Berhad, Tricor Investor & Issuing House Services Sdn Bhd, Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur or alternatively, the Customer Service Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur. In the case of electronic appointment, the proxy form must be deposited via TIIH Online at https://tiih.online. All proxy form submitted must be received by the Company not less than 48 hours before the time for holding the Meeting or adjourned Meeting at which the person or persons named in such instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid. The Annual Report and Proxy Form are available for access and download at the Company’s website at www.dbhd.com.my.

8. In the case of the corporate member, the instrument appointing a proxy shall be (a) under its Common Seal or (b) under the hand of a duly authorised its officer or attorney and in the case of (b) be supported by a certified true copy of the Power of Attorney.

9. If this Proxy Form is signed under the hands of an officer duly authorised, it should be accompanied by a statement reading “signed as authorised officer under Authorisation Document which is still in force, no notice of revocation having been received”. If this Proxy Form is signed under the attorney duly appointed under a power of attorney, it should be accompanied by a statement reading “signed under Power of Attorney which is still in force, no notice of revocation having been received”. A copy of the Authorisation Document or the Power of Attorney, which should be valid in accordance with the laws of the jurisdiction in which it was created and is exercised, should be enclosed in the Proxy Form.





OTHER INFORMATION


176

Resolution pursuant to Directors who are retiring in accordance with the Company’s Constitution:

(i) YB. Dato’ Ahmad Zahri bin Jamil (Article 68.3) Resolution 1

(ii) YBhg. Dato’ Mohd Aisom bin Omar (Article 68.3) Resolution 2

The details of the Directors standing for re-election are on pages 20 and 23.

The Annual Report and Proxy Form are available online for download at www.dbhd.com.my and the Notification to Shareholders who have maintained their e-mail addresses in the Record of Depositors with Bursa Malaysia Depository Sdn. Bhd. will be sent via electronic mail by the Share Registrar of DBhd, Tricor Investor & Issuing House Sdn. Bhd.

For Shareholders who have yet to provide their email addresses, following the Malaysian Government’s announcement on 16 March 2020 with regards to the implementation of the Movement Control Order, there may be a delay in the delivery of the Notification to Shareholders.

Statement Accompanying The Notice of Annual General Meeting

CDS Account No. of Authorised Nominee

I/We (Full Name as per NRIC /Passport No./Certificate of Incorporation in block letters)

NRIC No. (new) /Company No. NRIC No. (old)

of(Full Address)

being a member(s) of DAMANSARA REALTY BERHAD [196001000367(4030-D)] (the Company) hereby appoint

(Full Name as per NRIC /Passport No.)

With NRIC No. (new)/Passport No. NRIC No. (old)

of(Full Address)

of failing him/her (Full Name as per NRIC /Passport No. in block letters)

With NRIC No. (new)/Passport No. NRIC No. (old)

of(Full Address)

or failing him/her the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the 58th Annual General Meeting of the Company to be held at Grand Ballroom, Level 1, Forest City Phoenix International Golf Hotel, Jalan Persiaran 5, Forest City Golf Resort, 81550 Gelang Patah, Johor, Malaysia on Wednesday, 26 August 2020 at 11.30 a.m. or at any adjournment thereof.

With reference to the agenda set forth in the Notice of Meeting, please indicate with an “X” in the space provided below how you wish your votes to be cast on the ordinary resolution specified. If no specific direction as to the voting is given, the Proxy will vote or abstain at his/her discretion.

NO RESOLUTIONS FOR AGAINST

ORDINARY RESOLUTIONS

1. To re-elect of Dato’ Ahmad Zahri bin Jamil

2. To re-elect of Dato’ Mohd Aisom bin Omar

3. To approve the payment of Directors’ Fees to Non-Executive Directors amounting to RM480,000 for the period from 27 August 2020 until the next AGM of the Company in 2021

4. To approve the payment of Directors’ Remuneration (excluding Directors’ fees) to the Non-Executive Directors up to an amount of RM150,000 for the period from 27 August 2020 until the next AGM of the Company in 2021

5. To re-appoint Messrs. Jamal, Amin & Partners as the Company’s Auditors

6. Authority to Allot Shares Pursuant to Sections 75 and 76 of the Companies Act, 2016

7. Renewal of Shareholders’ Mandate for the Recurrent Related Party Transactions of Revenue or Trading Nature

SPECIAL RESOLUTION

1. To approve the Proposed Change of the Company’s Name from “Damansara Realty Berhad” to “Damansara Holdings Berhad”

Signature of Shareholder(s) or Common Seal

Date:

NOTES:1. In respect of deposited securities, only members whose names appear on the Record of Depositors on 19 August 2020 (General Meeting Record of Depositors) shall be eligible to attend the

meeting or appoint proxy(ies) to attend and/or vote on his/her behalf.2. A member entitled to attend and vote at this meeting is entitled to appoint a proxy/(proxies or attorney) or authorised representative to attend and vote in its stead. 3. A proxy may but need not be a member of the Company and need not be an advocate, an approved company auditor or a person approved by the Registrar of Companies.4. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy but not more than two (2) proxies in

respect of each securities account it holds which is credited with ordinary shares of the Company. The appointment of two (2) proxies in respect of any particulars securities account shall be invalid unless the authorised nominee specifies the proportion of its shareholding to be represented by each proxy.

5. Where a member of the Company is an Exempt Authorised Nominee (EAN) as defined under the Secruties Industry (Central Depositories) Act 1991 which holds ordinary shares in the Company for multiple beneficial owners in one securities account (omnibus account), there is no limit to the number of proxies which EAN may appoint in respect of each omnibus account it holds.

6. Where a member or the authorised nominee appoints two (2) proxies, or where an exempt authorised nominee appoints two (2) or more proxies, the proportion of shareholdings to be represented by each proxy must be specified in the instrument appointing the proxies.

7. The appointment of a proxy may be made in hard copy form or by electronic form. In the case of an appointment made in hard copy form, the instrument appointing a proxy and the Power of Attorney or other authority (if any) under which it is signed, shall be deposited at the Share Registrar of Damansara Realty Berhad, Tricor Investor & Issuing House Services Sdn Bhd, Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur or alternatively, the Customer Service Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur. In the case of electronic appointment, the proxy form must be deposited via TIIH Online at https://tiih.online . Please refer to the Annexure to the Form of Proxy for further information on electronic submission. All proxy form submitted must be received by the Company not less than 48 hours before the time for holding the Meeting or adjourned Meeting at which the person or persons named in such instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid. The Annual Report and Proxy Form are available for access and download at the Company’s website at www.dbhd.com.my.

8. In the case of the corporate member, the instrument appointing a proxy shall be (a) under its Common Seal or (b) under the hand of a duly authorised its officer or attorney and in the case of (b) be supported by a certified true copy of the Power of Attorney.

9. If this Proxy Form is signed under the hands of an officer duly authorised, it should be accompanied by a statement reading “signed as authorised officer under Authorisation Document which is still in force, no notice of revocation having been received”. If this Proxy Form is signed under the attorney duly appointed under a power of attorney, it should be accompanied by a statement reading “signed under Power of Attorney which is still in force, no notice of revocation having been received”. A copy of the Authorisation Document or the Power of Attorney, which should be valid in accordance with the laws of the jurisdiction in which it was created and is exercised, should be enclosed in the Proxy Form.

Proxy Form

For appointment of two (2) proxies, percentage of shareholdings to be represented by the respective proxies must be indicated below.

NO OF SHARES PERCENTAGE

Proxy 1 %

Proxy 2 %

100%

Fold here

Fold this flap to seal

THE SHARE REGISTRAR OF DAMANSARA REALTY BERHAD

c/o Tricor Investor & Issuing House Services Sdn. Bhd. [197101000970 (11324-H)]

Unit 32-01, Level 32, Tower AVertical Business Suite

Avenue 3, Bangsar SouthNo. 8 Jalan Kerinchi

59200 Kuala LumpurMalaysia

STAMP

contact

Lot 10.3, Level 10Wisma Chase PerdanaO� Jalan SemantanDamansara Heights50490 Kuala Lumpur

Phone:+603 2081 2688

Fax:+603 2081 2690

Email:[email protected]

www.dbhd.com.my

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