board of directors · 2018-11-27 · sdn bhd, central spectrum sdn bhd, cekal tulin development sdn...

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

le

ad

er

ShIp

47

Board of Directors

48

lao Chok keang Independent non-Executive Director

Tan sri Dato’ Hj. Abd karim bin shaikh MunisarIndependent non-Executive Director

Tan sri Dato’ sri Abi Musa Asa’ari bin Mohamed nor Independent non-Executive Director and Chairman

Jose Juan z. Jugo non-Independent Executive Director and Chief Executive Officer

bernard Vincent Olmedo Dynon-Independent non-Executive Director

Anna Maria Margarita bautista Dynon-Independent non-Executive Director

Tan sri Dato’ sri goh Ming Choon non-Independent non-Executive Director

BACK ROW (FROM LEFT OF PAGE)

FRONT ROW (FROM LEFT OF PAGE)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

le

ad

er

ShIp

49

Board of Directors’ Profile

Tan sri Dato’ sri Abi Musa Asa’ari bin Mohamed norIndependent non-Executive Director and Chairman

B O A R d m E E T i N g A T T E N d A N C E

8/8

Tan Sri Dato’ Sri Abi Musa Asa’ari Bin Mohamed Nor was appointed to the Board as an Independent Non-Executive Director on 1 April 2015 and was subsequently re-designated as the Chairman of the Company on 3 April 2015. He is the Chairman of the Remuneration Committee and serves as a member of the Audit and Risk Management Committee and the Nomination Committee. Tan Sri Dato’ Sri Abi Musa Asa’ari holds a Bachelor of Economics (Hons) from university of Malaya and D.D.A from university of Birmingham, united Kingdom. He obtained a Master in Business Administration from university of Birmingham, united Kingdom. He also holds an Honorary Doctorate in Economic Management from universiti Pendidikan Sultan Idris.

Tan Sri Dato’ Sri Abi Musa Asa’ari has served the Malaysian Government for 33 years in various departments including the Public Services

Department, the National Bureau of Investigation, National Institute of Public Administration and Petroleum Development unit (under the Prime Minister’s Department), the Ministry of Finance and the Ministry of Agriculture. He joined Lembaga Tabung Haji as Chairman in 2007, serving the organisation until 2013. He also had served as Chairman in the Board of Directors of university Pendidikan Sultan Idris.

Tan Sri Dato’ Sri Abi Musa Asa’ari currently is the Chairman of Pelikan International Corporation Berhad and a Director of Heitech Padu Bhd. listed on the Main Market of Bursa Malaysia. He is also the Chairman of the Graphene NanoChem PLC (united Kingdom) and Pelikan AG (Germany).

Tan Sri Dato’ Sri Abi Musa Asa’ari attended all eight (8) Board Meetings held during the financial year ended 30 June 2018.

N A T i O N A L i T Y

malaysian

g E N d E R

male

A g E

69

50

Jose Juan z. Jugonon-Independent Executive Director and Chief Executive Officer


7/8

Mr. Jose Juan Z. Jugo was appointed to the Board as Non-Independent Non-Executive Director on 20 January 2017 and subsequently was re-designated as Non-Independent Executive Director and Chief Executive Officer on 15 March 2017.

He finished his graduate studies in 1995 at the Escuela Superiór de Estudios de Márketing de Madrid in Spain with a Masters in Marketing and Commercial Management. From 1996 to 2000, he held management positions in San Miguel Corporation and Avon Cosmetics, Inc.

He was a Vice President in Ayala prior to joining MCT. There, he last held the position of Managing Director of Ayala Land Premier, the residential brand that addresses the luxury market in the Philippines.

He holds board positions in private Philippines-based corporations Ayala Hotels, Inc., BG West Properties, Inc., Aviana Development Corporation, Serendra, Inc., South Portal Properties, Inc., Verde Golf Corporation, OLC Development Corporation, and Amicassa Process Solutions, Inc.

He is currently serving as an Executive Director on the Board of the Group.

He attended seven (7) out of eight (8) Board Meetings held during the financial year ended 30 June 2018.

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


filipino

g E N d E R

male

A g E

46

Notes:

Save as disclosed above, none of the Directors have:• any family relationship with any Director and/or

major shareholder of the Company;• any conflict of interest with the Company;• have any conviction for offences within the past

five (5) years (other than traffic offences), if any; and

• any public sanction or penalty imposed by the relevant regulatory bodies during the financial year.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

le

ad

er

ShIp

51

Board of Directors’ Profile C O N T d .

Tan Sri Dato’ Sri Goh Ming Choon was appointed to the Board as Non-Independent Executive Deputy Chairman on 1 April 2015 and he was later re-designated as Non-Independent Non-Executive Director on 30 November 2016.

Tan Sri Dato’ Sri Goh holds a Diploma in Technology (Electronic Engineering) from Tunku Abdul Rahman College (now known as Tunku Abdul Rahman university College) conferred in 1990.

Tan Sri Dato’ Sri Goh has over 19 years of working experience in property development and construction, and has been involved in the civil construction business since 1997. He together with Dato’ Sri Tong Seech Wi and Dato’ Goh Meng Keong are the founders of Modular Construction Technology Sdn. Bhd., which commenced operations in 1999. He was also instrumental in the incorporation of MCT Consortium Sdn. Bhd. (now known as MCT Consortium Bhd.) in 2004 to restructure B&G Capital

Resources Berhad and Modular Construction Technology Sdn. Bhd. to focus on property development, investment and construction.

Tan Sri Dato’ Sri Goh is currently the Chairman and Executive Director of BGMC International Limited, a company listed in the main board of The Stock Exchange of Hong Kong Limited on 9 August 2017.

Tan Sri Dato’ Sri Goh is also currently the Chairman and Executive Director of Kingsley Edugroup Limited, a company listed in the GEM of The Stock Exchange of Hong Kong Limited on 16 May 2018.

Tan Sri Dato’ Sri Goh attended five (5) out of eight (8) Board Meetings held during the financial year ended 30 June 2018.



5/8


malaysian

g E N d E R

male

A g E

54

Tan sri Dato’ sri goh Ming Choonnon-Independent non-Executive Director

52

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

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

In 2015, he was inducted as a member of the Advisory Council of the National Advisory Group for the Police Transformation Development of

the Philippine National Police and in 2017, he was elected Vice Chairman of the Junior Golf Foundation of the Philippines.

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

He attended six (6) out of eight (8) Board Meetings held during the financial year ended 30 June 2018. He does not hold any other directorship in public companies and listed issuers in Malaysia.


6/8


filipino

g E N d E R

male

A g E

55

bernard Vincent Olmedo Dynon-Independent non-Executive Director

Notes:





MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

le

ad

er

ShIp

53

Anna Maria Margarita bautista Dy non-Independent non-Executive Director


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

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

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

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

She attended four (4) out of eight (8) Board Meetings held during the financial year ended 30 June 2018.

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


4/8


filipino

g E N d E R

female

A g E

49

54

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

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

In 1974, Tan Sri Dato’ Hj. Abd Karim was the Assistant Director at the Ministry of Finance, Malaysia. Between 1975-1980, he held different

positions in various districts in the state of Perak as Assistant District Officer, Kinta; Chairman of Kinta District Council; Assistant District Officer 1, Kampar; Chairman of Kampar/Gopeng Municipal Council and also Assistant State Secretary of Perak (uPEN).

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

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

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

He attended all eight (8) Board Meetings held during the financial year ended 30 June 2018.



8/8

Tan sri Dato’ Hj. Abd karim bin shaikh MunisarIndependent non-Executive Director


malaysian

g E N d E R

male

A g E

68

Notes:





MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

le

ad

er

ShIp

55

lao Chok keang Independent non-Executive Director


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

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

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

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

He attended all eight (8) Board Meetings held during the financial year ended 30 June 2018.



8/8


malaysian

g E N d E R

male

A g E

61

56

Ching Hong seng


malaysian

g E N d E R

male

A g E

45

Mr. Ching Hong Seng was appointed as Alternate Director to Tan Sri Dato’ Sri Goh Ming Choon on 13 August 2018.

He holds a Bachelor Degree in Accounting from university of Malaya and he is a member of the Malaysian Institute of Certified Public Accountants (MICPA) and Malaysian Institute of Accountants (MIA).

He started his accounting and auditing career in Messrs. Pricewaterhouse in 1998 before enhancing his career by joining a medium-sized audit firm in 2002 to lead the auditing and merger and acquisitions team.

He left the professional service industry and joined Kumpulan Hartanah Selangor Berhad as a Senior Manager, Finance in 2004 and went on to assume the position as General Manager, Finance until 2012. During his tenure, he also held several Director positions within the subsidiary companies which include SAP Holdings Berhad and Central Spectrum (M) Sdn Bhd. After that, he went into freelance consultancy services.

Currently, he holds the position as a Personal Finance Officer to a chairman of a listed company.



0/8 (Appointed on 13 August 2018)

Alternate Director to Tan Sri Dato’ Sri Goh Ming Choon

Notes:





LE

AD

ER

SHIP

57

mC

T B

ER

HA

d A

NN

UA

L R

Ep

OR

T 2

018

Key Senior Management and Management Team

58

LEFT PAGE (FROM LEFT OF PAGE)

Jose Juan z. Jugo non-Independent Executive Director and Chief Executive Officer

Maria Rochelle s. DiazChief Financial Officer and group Head, Corporate Resources

Peter Chia Peng Hai group Head, Construction Operations & Management

John Teoh wei Tung group Head, sales and Marketing

Yaw sheng FungDirector, Property Development

kogelevanan Thinakaramgeneral Manager, Property Development

kamal Effendy bin Abdul Rashid Associate Director, legal & Public Affairs

RIGHT PAGE (FROM LEFT OF PAGE)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

le

ad

er

ShIp

59

Key Senior Management Profile

Please refer to page 50 for Mr. Jose Juan Z. Jugo’s profile.


filipino


filipino

g E N d E R

male

g E N d E R

female

A g E

46

A g E

38

Jose Juan z. Jugonon-Independent Executive Director and Chief Executive Officer

Maria Rochelle s. DiazChief Financial Officer and group Head, Corporate Resources

Ms. Maria Rochelle S. Diaz has a Bachelor of Science in Accountancy from the De La Salle university Manila in 2000. She is a Certified Public Accountant and has eight years of public practice between 2001 and 2008 with PricewaterhouseCoopers Manila, specialising in consumer, industrial products and services, as well as oil & gas industries.

She joined Ayala in 2009, with her most recent post as Chief Financial Officer of the Strategic Landbank Management Group which is involved in Ayala’s major township developments and serves as the platform for growth for Ayala’s residential, leasing and development businesses. With eight years of solid experience in real estate she was appointed as Chief Financial Officer of MCT on 9 June 2017.

She is a Director of subsidiaries of MCT but does not hold any other directorship in public companies and listed issuers in Malaysia.

60

Mr. Peter Chia graduated from Monash university in 1984 with a Bachelor of Civil Engineering (Honours). He has over 32 years of

experience in the construction industry with hands-on experience in the development and construction of several green buildings, steel

structural work as well as exposure in the oil & gas sector.

Before joining MCT on 18 December 2017, his most recent position was CEO of PJD Construction Sdn. Bhd. Prior to that, he was with Putra Perdana Construction Sdn. Bhd. as Senior General Manager

and subsequently as Chief Operating Officer from 2008 to 2015. He has also accumulated 16 years of working experience in Sunway

Construction Group.



malaysian


malaysian

g E N d E R

male

g E N d E R

male

A g E

59

A g E

44

Peter Chia Peng Haigroup Head, Construction Operations & Management

John Teoh wei Tung group Head, sales & Marketing

Mr. John Teoh graduated with a Bachelor of Commerce in Marketing and Management in 1996 from Curtin university of Technology.

He has over 22 years of experience in the communications, creative and marketing industry in Malaysia, working with international

advertising agencies on many iconic local and international brands such as KFC, Maxis, Telekom Malaysia, u-Mobile, Visa and HSBC.

Prior to joining MCT on 1 August 2018, he served as Young & Rubicam Malaysia’s General Manager and Consultant. From 2011 to early

2017, he was the General Manager and Country Head of BBDO and Proximity Malaysia. He also spent 10 years with Euro RSCG as

Managing Partner and Business Development Director.


Notes:

Save as disclosed above, none of the Key Senior Management Team have:• any family relationship with any Director and/or




MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

le

ad

er

ShIp

61

Yaw sheng FungDirector, Property Development

N A T i O N A L i T Y Y

malaysian

g E N d E R

male

A g E

42

kogelevanan Thinakaramgeneral Manager, Property Development


malaysian

g E N d E R

male

A g E

41



malaysian

g E N d E R

male

A g E

49

Management Team

62


“ Human capital and talent management shall be the backbone of a stronger organisation as we are working hard towards even greater professionalisation, especially now that we are part of a much larger conglomerate. ”

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

SuST

ain

aB

iliT

y

63

64

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

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

SuST

ain

aB

iliT

y

65

Sustainability Statement

Embracing sustainable ecosystem ideas in our properties

to make our communities healthier, safer, greener and more liveable.

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

66

OuR CORE VAluEs Our core values are the standards and beliefs to which we adhere to. These are the principles that convey our attitude, unite our employees and shape our culture.

REpORTiNg CYCLEOur Sustainability Statement coincides with our financial year end. Following the change of our financial year end from 30 June to 31 December which shall be implemented after the close of FY 2018, our next sustainability report will cover a period of six months from 1 July 2018 to 31 December 2018. Thereafter, the financial year of MCT shall revert to twelve months ending 31 December, and the sustainability report for the subsequent year will have a cycle of one year.

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

REpORTiNg gUidELiNEThis is our Group’s first Sustainability Statement, which was prepared in accordance with the Bursa Malaysia Sustainability Reporting Guide.

SCOpE ANd BOUNdARYThis report covers all domestic operations of MCT, including the subsidiaries that our Company has direct control and holds a majority stake.

REpORTiNg pERiOdThis report enumerates our EES activities from 1 July 2017 to 30 June 2018. Historical information from previous years were included to contextualise the information and display actionable patterns.

POsITIVE InnOVATIVE PROACTIVE

AbOuT THIs REPORT This Sustainability Statement exemplifies our accountability, transparency and commitment to promote sustainability practices. In this statement, we report our EES initiatives and present our responses towards minimising the negative impacts caused by our business operations.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

SuST

ain

aB

iliT

y

67

susTAInAbIlITY gOVERnAnCE

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

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

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

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

Our Group’s internal control and risk management processes ensures that our shareholders’ investment and assets are safeguarded by implementing a robust and comprehensive framework. To ensure our framework’s adequacy, KPMG Management & Risk Consulting Sdn. Bhd., a third-party consulting firm, was appointed to evaluate and develop the system into a formalized Enterprise-wide Risk Management (“EWRM”) framework as well as assist our Group to formulate action plans for mitigating key business risks. EWRM updates are reported to the Board on a quarterly basis to have a collective assessment, top-down, bottom-up approach for risks. Internal control measures have been strengthened through a more comprehensive audit plan for FY 2018, covering various departments. Findings from the audit, if any, are followed through after a year to determine whether corrective action and improvements in internal control have been addressed.

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

In addition, to ensure good ethical practices and transparency as well as review and oversight of our bidding process, we have established the Tender Awards Committee (“TAC”) which is composed of the heads of various departments to perform checks and balances in terms of quality, supply specification, and pricing, among others, to ensure that the best options in procuring services and goods are to be tapped. These goods and services are converted into our developments which aim to be at the best value that we are offering to our buyers and locators. Please refer to our website for the copy of the COE and the Whistleblowing Policy.

Sustainability Statement C O N T d .

68

IDEnTIFICATIOn

sTAkEHOlDER InPuT

REVIEw & VAlIDATE

FInAlREVIEw

Created a comprehensive list and defined every positive and negative issue arising from the EES impacts

of our Group’s operations.

Our first stakeholder identification process enabled us to identify the areas of interests and the degrees of influence of the stakeholders in

our business.

We surveyed all stakeholder group representatives to consider their perspectives

by ranking the sustainability matters according to importance.

The result of the matrix was reviewed by Management and subsequently submitted to top

Management for validation and approval.

The approval from our top Management indicates a clear communication of the tone from

the Group’s leadership and will drive sustainability management throughout

our organisation, thereby ensuring an adequate response to material sustainability matters.

The final matrix was reviewed by the Board to confirm whether the result is in line

with our Group’s strategy.

Categorisedeach issue according to the EES

themes.

Prioritisedissues by selecting the most important

concerns.

Indicatedthe rankings and importance of each issue.

MATERIAlITY

In compliance with the Bursa Malaysia framework, we conducted our first materiality analysis which was based on the surveyed responses of our stakeholders, meetings with our management and mapping of our Group’s material issues. In our materiality assessment, we identified the EES issues that present risks or opportunities to the Group while addressing the most pressing issues that concern external stakeholders.

mATERiALiT Y ANALYSiS ANd pROCESSIn determining the Group’s material concerns, we piloted our first materiality workshop through the following process:

Identify Materiality Issues

Stakeholder Input

Draft Materiality Matrix

Review and Validate

Final Materiality Matrix

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

SuST

ain

aB

iliT

y

69


MATERIAlITY C O N T d .

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

MED

IUM

HIG

HLO

W

MEDIUM

X: Important to MCT

Y: Im

porta

nt to

Stak

ehol

ders

HIGH

1

2 34 5

67 89 1011 121314

15

16

1 Biodiversity

2 Traffic & Pedestrian Mobility

3 Water Consumption

4 Job Security

5 Energy Efficiency

6 Eco Friendly Materials

7 Storm Control

8 Waste Management

9 Work-life Balance

10 Employee Remuneration

11 Inclusive Development & Accessible Pricing

12 Legal Compliance & Transparency

13 Great Employment Opportunity

14 Health & Safety

15 People Development

16 Product Quality

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

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

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

70

sTAkEHOlDER EngAgEMEnT

We practise a year-round engagement with stakeholders and strive to offer timely responses that address and anticipate their concerns.

The table below shows the list of stakeholders with whom we engage and who we believe are impacted the most by our business activities. The table also catalogues their concerns and our responses to resolve such issues:

ouR stAKEholdERs concERns REsPonsE

Clients • Product quality • Quality of information

• Reaffirming our Quality Certification • Timely defect management • Contract vetted by lawyers • Customer engagement via open house and

one-on-one discussion, • Property owner and tenant meetings

Shareholders • Timely company update• Keep a good reputation

• Supplying comprehensive and timely information to shareholders and encouraging active participation during roadshows and shareholders’ meetings.

Government • Compliance with regulations • Observe and comply the application of operational policies and timely submission of reports and requirements

• Monitor our sites to avoid non-compliance issues.• I nvite regulators for meetings and site inspection

Contractor and Suppliers • Health and Safety • Prompt payment

• Conduct HSSE trainings and monitoring• Ensure that payments are made according to

terms in the contract

Community and Neighbours

• Safe environment • Trainings security site control and patrolling• Corporate social responsibility activities with

neighboring communities• Active participation in community associations

Employees • Engagement • Remuneration • Career advancement • Work-life balance

• Activities are geared towards employee engagement, general and departmental meetings, teambuilding activities and training.

• Performance review to determine career advancement, remuneration and training needs

• Cross-posting• Mapping of employees’ competencies, aptitude

with vacancies in jobs

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

SuST

ain

aB

iliT

y

71


suBjEct oBjEctivEs no. oF AttEndEEs

no. oF houRs / sEssion

Quality Conformance Awareness Training (QCAT)/Architectural work training

understand QLASSIC requirements and a proper work method as expected by our Group/client.

40 2 hrs per session/group(2 sessions)

Quality Management System ISO9001 Awareness Training to new joiners

understand the basic knowledge on ISO and the system established in our Group.

94 1 hr per session/group(7 sessions)

ISO9001:2015 Implementation Training

understand the new version of the ISO 9001:2015 migration in our Group

107 1 hr per session/group(9 sessions)

totAl 241 20

sOCIAl : ClIEnT

“ BUiLdiNg EXCELLENCE THROUgH qUALiT Y”

pROdUCT qUALiT Y Our commitment to quality is attested by our ISO 9001 certification and Quality Assessment System for Building Construction Works (“QLASSIC”).

ISO 9001 certified companies and sites of our Group are listed below: • MCT Berhad• Modular Construction Technology Sdn. Bhd.• Sky Park Properties Sdn. Bhd. • Lakefront Residence Sdn. Bhd. • Eco Green City Sdn. Bhd.

QLASSIC is a method for assessing and evaluating the quality of workmanship of building projects through a scoring system based on the Construction Industry Standard. QLASSIC, which was established by the Construction Industry Development Board enforces regulations to ensure quality and safe construction as well as implement the best practices in the construction industry.

Our completed project that has undergone official QLASSIC assessment is the Lakefront Villa project whereas our other projects are subject to internal assessment using the same scoring system as per the QLASSIC assessment.

Product Quality training: Maximising value for customers is paramount to us, which is why we are constantly striving to improve employee skills by facilitating training and other activities. Our development team exerts great effort to ensure that our properties are built with due technical diligence in accordance with not only QLASSIC and the ISO 9001 quality standards but also the required specifications.

72

CUSTOmER ENgAgEmENTPolicy: To offer our customers the best-value products with quality consumer experience

We give high regard to our customers in terms of product and service and we engage them by providing valuable, correct and updated information that is convenient to access by all sectors. We hold monthly trainings through the “Sales Ninja” series, and other retooling programs on legal compliance, loan servicing and customer service as part of the modules. We continuously sharpen the skills of our sales and marketing staff, so that they can provide our buyers and locators with top-notch experience.

sales information: Information regarding our developments and products can be easily accessed by all interested buyers through effective tools and people that support our marketing initiatives. We conduct open houses in our sales galleries, as well as roadshows in several strategic locations such as malls and transport hubs (i.e. airport) during regular days and even weekends, to further our reach at the convenience of customers through our trained and customer-oriented sales team. Our marketing tools include model units that showcase the actual unit and a digital interactive display platform on the site, in addition to our traditional printed materials, websites and social media pages, to suit customer experience and taste.

Moving-in information: Owning a property and moving into a new home marks a new stage in our buyers’ lives. For that reason, we try our best to ease the purchaser’s anxiety by guaranteeing that sufficient information is provided and that all questions are answered during the Handing Over of Vacant Possession (“HOVP”). A digital Owner’s Handbook containing property information and guidelines is also provided to all buyers.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

SuST

ain

aB

iliT

y

73


sOCIAl : ClIEnT C O N T d .

CUSTOmER ENgAgEmENT CONTd.

E- Portal: For the immediate response and convenience of home buyers, we have created the E-rectification process. Through this platform, property owners can log a report on the portal. updated reports are uploaded, and the rectification status is reflected on the portal so that owners can view the repair status.

satisfaction and Monitoring: Customer satisfaction metrics are essential for our Group as they aid in monitoring customer health, identifying weaknesses, correcting processes and improving customer experience. Knowing how our customers feel about our products, services and support team is critical in understanding and planning our growth as an organisation.

A Customer Satisfaction Survey (“CSS”) is conducted during the HOVP. For FY 2018, we conducted the CSS on Lakefront Villa. The result of this survey is shown below:

The surveyed categories comprised of product quality, design, infrastructure, landscaping, site cleanliness, after-sales services and efficiency of joint inspection.

24%

Satisfactory

49%

Good

9%

Fair

1%

Poor

August 2017 - June 2018

LFYL HOVP - Customer

Satisfaction on Product & Services

CUSTOmER pRivACY, LEgAL COmpLiANCE, TR ANSpARENCY ANd REpUTATiON We consider legal compliance and transparency as utmost priorities to protect our reputation. All of our contracts are vetted by our legal advisor. We comply with all of the regulations set by the local council and the Ministry of Housing and Local Government (KPKT). We abide by the Personal Data Protection Act and have implemented measures to safeguard our customers’ privacy.

17%

Excellent

74

sOCIAl : EMPlOYEEs

We consider our people to be our most valuable asset. Part of the responsibility of companies is to develop vibrant and motivated employees as they are the key to achieving growth in today’s fiercely competitive global marketplace. Developing our people not only entails their contribution to the organisation but also their personal and professional growth. We create programmes that support the advancement, health and safety and work-life balance of employees.

HEALTH ANd SAFET Y AT THE CONSTRUCTiON SiTEWe established a HSSE Committee that reviews our Group’s strategies and performance in terms of HSSE practices. The members of this committee include Management, contractors and employee representatives. We also implemented the Continuous Education Programme training for Health and Safety officers.

health and safety training For FY 2018, we conducted 124 hours of job-specific training for 475 construction workers as described below:

tRAininG dEscRiPtion no. oF PARticiPAnts no. oF houRs

Incident Reporting and Analysis Technique 1 32

OSHMP 2020 1 8

Working on Heights 106 32

Safe Working Procedures 142 20

Electrical Safety 35 16

Tools, Harness and Falsework Safety 74 20

Fire, Chemical and Biological Safety 42 12

Ergonomics and Occupational Safety 31 8

Manual handling and Hot work Permit 28 8

Safeway to use Gondola 20 8

totAl 475 164

In addition to formal and informal trainings, we facilitate weekly toolbox talks at the site which cover various HSSE topics and are attended by all construction site workers.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

SuST

ain

aB

iliT

y

75


townhall Meetings: Our townhall meetings are opportunities for our management and all employees to connect, collaborate and share company updates. There are three levels of townhall meetings: meetings of senior leadership with managers, meeting of senior leadership with all employees and meetings of managers with employees. The managers will then impart the information discussed during the top management townhall.

sOCIAl : EMPlOYEEs C O N T d .

EmpLOYEE ENgAgEmENT ANd WORK – LiFE BAL ANCE In FY 2018, we have boosted our employee engagement through running an organisational campaign that is supported by employee activities aimed to empower and to get our employees involved in sharing the vision of our Group. The activities that are part of this campaign involve a collaborative work environment which is consistent with our vision, mission and core values. Activities facilitate staff interaction, sustain employee morale, and also provide a direct communication channel between management and employees.

We will be running and strengthening our organisational climate change campaign in the coming months, and we are positively anticipating more activities in the next financial year that will further strengthen employee solidarity and improve company culture.

sport Activities: Our two main activities designed to combat stress and maintain fitness are company sponsored twice weekly badminton games and free gym membership.

Performance Review: Our performance reviews are conducted periodically. A formal annual review is conducted with the set metrics, and informal reviews are facilitated between the direct supervisor and subordinates as often as needed through efficient and effective means. This review examines both areas of positive performance and areas that require improvement as well as determines the educational support necessary for employee development. This is our way of communicating with employees as regards to their goals and expectations and the strategies that would foster the growth of the employee and MCT. A formal rewards and remuneration system based on performance metrics was implemented for FY 2018.

76

Employee Gatherings: Our Annual Dinner which was held at Le Meridian Putrajaya was attended by 398 employees with lucky draw value of RM43,069.00.

Empowering Employees: Continuous employee career development is a win-win programme for both our Group and employees. We believe that enriching and equipping our people with knowledge is essential in fulfilling our long-term goals and aspirations for stable and sustainable growth.

The table below lists the trainings conducted in FY 2018:

toPics oBjEctivE/dEscRiPtion no. oF PARticiPAnts

no. oF houRs

Team Manager Sales Training

update sales team on legal compliance, loan servicing, upgrade selling and telephone skills and motivation.

40 15

Architecture and Mechanics

Design & Development, Landscaping, Green Building 38 556

Building Management Strata Management, Operation & Maintenance Shopping Mall Management, Legal problems in Tenancy

14 184

Accounting MFRS 15 Revenue 9 136

Technical, Electrical and Construction Support

Power Distribution, Gas Fitting, Concrete Mix Design 10 128

Human Resources Times pay Workshop, Whistleblowers Act and Employees Rights

9 72

Procurement Best Practices in Procurement Management 1 16

totAl 121 1,107

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

SuST

ain

aB

iliT

y

77


494285

779

613

482total

370

289

243

193

Executives

ManagementAge group

gender balance

male

female

90

41-50

142

20-30

197

31-40

53

51 & above

Age Range

employees 482

Managers

2016

2017

2018

board

total

total

2016

2016

2017

2017

2018

2018

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

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

sOCIAl : EMPlOYEEs C O N T d .

2016

2017

2018

7

8

6

345

108

254

54

229

1

1

1

232

52

192

34

158

50

142

78

COmpENSATiON ANd BENEFiTSThe first step in creating a productive and driven team of employees is to motivate them well. For this reason, we have exerted great efforts to protect staff welfare and offer the best possible workforce incentives, rewards or perks that will boost employee morale and spirit.

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

malay

indian

chinese

others

331 262 236

59

3933

368

292

194

21

20

19

2016

2016

2017

2017

2018

2018

new hires

total employees

workforce Composition workforce Diversity

779

319

613

129

482

178

TOTAL: 779

TOTAL: 613

TOTAL: 482

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

SuST

ain

aB

iliT

y

79


sOCIAl : COMMunITY

SUSTAiNABLE URBANiSATiON A strong relationship with the community and the regulatory authorities is critical in all of our projects. We are not merely delivering projects but creating sustainable communities that will support our customers for decades.

Brownfield to Greenfield The tin mining industry, which was once a major contributor to the Malaysian economy, has left numerous abandoned mine-scarred lands in Malaysia that are unsuitable for agricultural use. Moreover, the mining lakes scattered along Peninsular Malaysia pose tremendous health and safety risks.

Cybersouth which is our first township in Dengkil is located at a previously abandoned opencast tin-mining lake that has now been reclaimed and transformed into a residential, retail and commercial neighbourhood boasting of a beautifully landscaped lake surrounded by recreational areas. The landscaping around the lake is adorned with a variety of flowers, shrubs and trees – a harmonious collection of lush greenery that inspires joggers to go for another mile.

In line with our mission, we not only construct buildings but also preserve and enhance the overall environment of our projects to enrich the community.

inclusive development and Accessible Pricing Aligned with the Malaysian government policy to provide low-cost housing, we have built strategically located, quality, well-designed and affordable housing supported by infrastructure, facilities and amenities.

PROjECT NAME PR1MA HOMES

LOCATION LAKEFRONT @ CYBERJAYA

LAUNCH YEAR 201 7

TARGET COMPLETION 2020

UNITS LAUNCHED 1,932

SOLD 96.3% AS AT 30 JUNE 2018

BUILT UP 850 Sq. FT.

LAYOUT 3 BEDROOMS + 2 BATHROOMS

PRICE RM280,000.00 –

RM285,000.00 / UNIT

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

80

OUR COmmUNiT Y CARE pROgR AmmES investing in EducationThe first Chinese school in Cyberjaya was completed and began holding classes in March 2018. When the school’s relocation to Cyberjaya was finally approved, the school board met with MCT and we donated six acres of land within the development area for the location of the school.

SJK (C) union was established in 1952 to accommodate the growing population of ulu Sepetang, Taiping. However, due to the drastic drop in the population in this area, the school needed to be relocated to a more urbanised location where an unprecedented population growth is evident.

Committed to our mission of creating liveable and prosperous communities, we will continue to place emphasis in educational facilities and incorporate them into future township planning to provide holistic living experiences to our residents.

Bringing joy to orphans In collaboration with Kidzania Go, we invited the orphans of Joy To The World Community Services to visit the Cybersouth gallery. The children experienced performing real-life jobs in a simulated, role-playing environment.

The occasion featured four work and play activities: Volvo Truck Driving Centre, McDonalds Fitness Centre, Courtroom and TV Studio. We also donated RM10,000 to the home.

Breaking fast with Rumah Amal limpahan Kasih In conjunction with Hari Raya and the true spirit of Ramadan, we hosted a charity event for children from Rumah Amal Limpahan Kasih to break fast together with our Management team. We gifted new Hari Raya clothes to the children as well as groceries with RM1,000 cash donation. There were also karaoke and games to entertain the children after a sumptuous feast.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

SuST

ain

aB

iliT

y

81


EnVIROnMEnT Our vision is to attain equitable growth for our stakeholders and thereby create long-term value for everyone. Consistent with our objective, we regularly evaluate our Group’s environmental measures and performance during monthly HSSE committee meetings. The following are our main activities, which are targeted towards maintaining a high level of corporate awareness that promotes environmental sustainability:

tRAininG toPic dEscRiPtion FREQuEncY AttEndEEs

Toolbox meeting Environmental reminder Once a week All construction workers

Induction Environmental induction for all new construction workers

First day of work All new workers

Our vision is to attain equitable growth for our stakeholders and thereby create long-term value for everyone.

gREEN BUiLdiNg The Green Building Index is Malaysia’s industry recognised green rating tool for buildings to promote sustainability in the built environment and raise awareness among developers. We have obtained Green Building Index Certification on Design Assessment for two of our projects, namely, Skypark @ One City and The Place @ Cyberjaya.

ENviRONmENTAL TR AiNiNg ANd mONiTORiNg To inculcate environmental awareness, we include environmental education discussions during induction activities and weekly toolbox meetings. To guarantee that environmental rules and regulations are observed, the site supervisor conducts regular inspections. Any employee caught contravening environmental practices will be issued a non-compliance form, and subsequent offenses will result in penalties.

82

Materials used for FY 2018 (Ton):

MAtERiAls WEiGht (ton)

Sand 97,028

Aggregate 42,192

Steel Bars 4,037

Bulk Cement 26,053

Ordinary Portland Cement 15,752

Elimination: To eliminate the wastes associated with formworks and scaffoldings, durable modular metal form systems are demounted and reused in other projects. Scaffolding are inspected for health and safety issues, repaired and reused in future projects.

WASTE mANAgEmENT

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

segregation of domestic sewerage from construction wastewater and surface runoff

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

Protect drainage systems and discharge points to avoid blockage.

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

mATERiAL mANAgEmENT

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

Minimisation: At our construction sites, we use prefabricated beams and walls, pre-sized steel and timber products. We also purchase materials in bulk, which minimises packaging. Our property management division works closely with property owners in enacting recycling programs.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

SuST

ain

aB

iliT

y

83


EnVIROnMEnT C O N T d . WASTE mANAgEmENT CONTd.

buIlTPROPERTIEs

Installed with water harvesting technology

Traps rainwater

For landscape

For toilet

COnsTRuCTIOn sITE

+

–

use alternative water sources to reduce the dependence on

clean water.

Storm water

Sedimentation tanks

Storm water

Groundwater

Storm water

Pond water

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

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

General Waste Generated:

Scheduled Waste Generated:

YEAR PRoPERtY MAnAGEMEnt (ton) constRuction sitEs (ton)

FY 2016 4,079 311.3

FY 2017 3,983 1,378

FY 2018 3,594 1,650.5

YEAR constRuction sitEs (ton)

FY 2016 500

FY 2017 1,500

FY 2018 2,000

84

ENERgY mANAgEmENT Energy is crucial in property development and management. Despite the increase in the number of buildings in operation and construction, we have succeeded in minimising energy use by engaging in various efforts, such as activating the building automation system and fine-tuning the chiller operations. Furthermore, we also devised the following guidelines:

Planning before construction: Proper and meticulous planning is imperative in all of our operations. By planning at the pre-construction stage, we can create an energy profile to identify the activities that consume energy and therefore predict the necessary allocation. A system that uses the least energy-intensive methods and materials of construction is developed to maximise energy efficiency.

Regulating heating networks and air conditioning systems: Heating and ventilation systems consume a substantial amount of energy. To regulate a building’s heating and AC systems, water and power circulations are adjusted to function according to a scrupulous plan. This ensures that sustainable temperatures are maintained whilst saving energy.

In our property management division, despite additional buildings in operation, electricity consumption was achieved as shown below.

Electricity Consumption In One City:

YEAR BuildinGs in oPERAtion

BuildinG loAd

(KWh)

AiRcond loAd

(KWh)

totAl (KWh)

consuMPtion % coMPAREd to

PREvious YEAR

2016 Sky Park The Place

14,592,177 5,888,402 20,480,579 100%

2017 Sky Park The PlaceThe Square: (SOHO/SOFO)

11,869,966 7,206,618 19,076,584 93%

2018 Sky Park The PlaceThe Square: SOHO/ SOFO & Retail Podium

12,689,486 8,284,233 20,973,719 102%

ENviRONmENTAL COmpLiANCEDuring FY 2018, we did not receive any environment-related non-compliance report from the local or national government. We pledge to continue finding schemes for conserving resources to protect and serve not only our community of clienteles but the communities that we co-exist with as well.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

SuST

ain

aB

iliT

y

85

86

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

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Co

rp

or

aT

e G

ov

er

na

nC

e

87

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

This statement sets out the extent of compliance applied to achieve the Intended Outcomes by the Company with the principles and recommendations of the new Malaysian Code on Corporate Governance issued by the Securities Commission Malaysia which has come into force on 26 April 2017 (“MCCG 2017”) and paragraph 15.25(1) of the Main Market Listing Requirements (“Main LR”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) for the financial year ended 30 June 2018 (“FY 2018”).

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

PRInCIPlE A: board leadership And Effectiveness i . BOARd RESpONSiBiLiTiESThe Board is responsible for the governance of the Group as well as the conduct of the Group’s overall strategic direction. It has established clear functions reserved for the Board and those delegated to Management. These functions have been clearly described and understood by both parties to ensure accountability. 1.1 Clear Functions reserved for Board and Delegation to Management The role of the Chairman and the Chief Executive Officer (“CEO”) are divided and separated

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

This formal structure of delegation is further cascaded by the CEO to the Management who

is responsible and accountable for the day-to-day management of financial and operational matters of the Group in accordance with the strategic direction approved by the Board.

1.2 Clear roles and responsibilities The roles and responsibilities of the Board are clearly described in the Board Charter. As the Board

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

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

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

88

1.3 Separation of Position of the Chairman and Executive Director cum CEO The roles of the Chairman and CEO are undertaken by separate persons. The Chairman is an

Independent Non-Executive Director.

1.4 Company Secretaries The Directors have full and unrestricted access to the advice and dedicated support services of

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

1.5 Supply of information The agenda and board papers are circulated to all Directors in advance to ensure that the

Directors are given sufficient time to request additional information or seek clarification, where necessary. Matters that require Directors’ approval, a clear and detail information will be given to the Board, in a timely basis, to enable them to discharge their duties.

The Directors have direct access to Senior Management to seek further information, explanations and updates on any aspect of the Group’s operations and businesses as well as the advice and services of the Company Secretaries. In addition, the Directors may also seek independent professional advice, at the Company’s expense, if required.

1.6 Time Commitment The Board meets at least four (4) times a year with additional meetings to be convened when necessary. During FY 2018, the Board had held eight (8) meetings and details of the attendance of the Directors at the Board meetings are as follows:

Note: (1) Resigned as Non-Independent Executive Director on 28 February 2018. (2) Resigned as Non-Independent Non-Executive Director on 28 February 2018. (3) Appointed as Alternate Director to Tan Sri Dato’ Sri Goh Ming Choon on 13 August 2018.

nAME oF diREctoR dEsiGnAtion AttEndAncE

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

Chairman, Independent Non-Executive Director

8/8

Jose Juan Z. Jugo Non-Independent Executive Director and Chief Executive Officer

7/8

Dato’ Sri Tong Seech Wi (1) Non-Independent Executive Director 4/7

Tan Sri Dato’ Sri Goh Ming Choon Non-Independent Non-Executive Director 5/8

Tan Sri Dato’ Hj. Abd Karim Bin Shaikh Munisar

Independent Non-Executive Director 8/8

Datuk Lim Kok Boon (2) Non-Independent Non-Executive Director 7/7

Bernard Vincent Olmedo Dy Non-Independent Non-Executive Director 6/8

Anna Maria Margarita Bautista Dy Non-Independent Non-Executive Director 4/8

Lao Chok Keang Independent Non-Executive Director 8/8

Ching Hong Seng (3) Alternate Director to Tan Sri Dato’ Sri Goh Ming Choon

0/0

i . BOARd RESpONSiBiLiTiES CONTd.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Co

rp

or

aT

e G

ov

er

na

nC

e

89

1.7 Directors’ Training One (1) Director being appointed subsequent to FY 2018 has attended and successfully completed

the Mandatory Accreditation Programme (“MAP”) as required by Bursa Malaysia. The Directors are also encouraged to attend courses and seminars that are relevant to the Group’s operations and businesses conducted by professionals.

Every Director of the Company undergoes continuous training as an ongoing process to equip himself/herself to effectively discharge his/her duties as a Director of the Company. For that purpose, he/she ensures that he/she attends such training programmes to continually develop and update himself/herself from time to time. The Company also provides induction programme for new members of the Board, to ensure that they have a comprehensive understanding of the operations of the Group and the Company.

All the Directors have attended at least one (1) training session on the topics related to Companies Act, 2016, MCCG 2017, Risk Management and Internal Control and other trainings on various topics that were relevant in keeping abreast with the general economic, industry and technical development.

In addition, the External Auditors and Company Secretaries have briefed the Board on the relevant updates on statutory and regulatory requirements from time to time during the Board meetings.

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

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

1.9 Code of Ethics & Whistleblowing Policy The Group is committed to upholding good corporate governance practices; thus, every Director

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

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

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

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

PRInCIPlE A: board leadership And Effectiveness C O N T d . i . BOARd RESpONSiBiLiTiES CONTd.

Corporate Governance Overview Statement C O N T d .

90

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

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

i i . BOARd COmpOSiTiON 1.1 Board Composition The Board currently consists of eight (8) members, comprising of three (3) Independent Non-

Executive Directors , three (3) Non-Independent Non-Executive Directors, one (1) Executive Director and one (1) Alternate Director. Hence, the composition of the Board fulfils the requirement that one-third (1/3) of the number of the Directors on the Board be independent. The Board’s composition is in line with Paragraph 15.02(1) of the Main LR, which stipulates that at least two (2) Directors or one-third (1/3) of the Board, whichever is higher, must be independent. In the event of any vacancy in the Board resulting in non-compliance with Paragraph 15.02(1) of the Main LR, the Company must fill the vacancy within three months.

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

1.2 Tenure of Independent Directors The purpose of appointing Independent Directors is to ensure that the Board includes Directors

who can effectively exercise their independent and objective judgement during the Board’s deliberations, particularly during decision-making of the Board and the Committees.

i . BOARd RESpONSiBiLiTiES CONTd.

1.9 Code of Ethics & Whistleblowing Policy (CONTD.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Co

rp

or

aT

e G

ov

er

na

nC

e

91

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

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

1.3 Annual Assessment of Independence The Board has set out policies and procedures to ensure the effectiveness of the Independent

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

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

1.4 Board Committees The Board has established and assigned specific responsibilities to three (3) Board Committees

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

The Board Committees are: • Audit and Risk Management Committee (“ARMC”); • Remuneration Committee (“RC”); and • NC.

The minutes of Board Committee meetings and circular resolutions passed are presented to the Board for information. The Chairman of the relevant Board Committees will also report to the Board the key issues deliberated by the Board Committees at their respective meetings.

1.4.1 Audit and Risk Management Committee The ARMC is responsible to assist the Board in discharging its duties and responsibilities

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

PRInCIPlE A: board leadership And Effectiveness C O N T d . i i . BOARd COmpOSiTiON CONTd.

1.2 Tenure of Independent Directors (CONTD.)


92

nAME dEsiGnAtion AttEndAncE


Chairman, Independent Non-Executive Director

1/1


Member, Independent Non-Executive Director and Chairman

1/1

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

1/1

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

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

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

(a) The duties and responsibilities of the NC are as follows:

i. identifying and recommending new nominees to the Board as well as committees of the Board of MCT and its subsidiaries;

ii. reviewing on an annual basis the required mix of skills and experience and other qualities including core competencies which Non-Executive Directors should bring to the Board and to assess the effectiveness of the Board as a whole, the Committees of the Board, and the contribution of each individual Director. In the event of Independent Director(s) who are retained beyond nine (9) years, the NC should conduct an assessment of the Independent Director(s) and recommend to the Board whether the Director should remain as independent or be re-designated;

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

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

(b) Board Diversity

i. Gender Diversity The Board acknowledges the need to enhance board gender diversity. Currently,

there is one (1) female Director on the Board, namely Ms. Anna Maria Margarita Bautista Dy.

i i . BOARd COmpOSiTiON CONTd.

1.4 Board Committees (CONTD.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Co

rp

or

aT

e G

ov

er

na

nC

e

93

ii. Ethnicity Diversity At present, the Board comprises two (2) Malay Directors, three (3) Chinese

Directors and three (3) Philippine Directors.

iii. Age Diversity The general age profile of the Directors is between forties to sixties years of age.

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

(c) Appointment to the Board The NC is responsible for identifying and recommending new nominees to the Board

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

(d) Board Effectiveness Assessment During FY 2018, the NC met once (1) and carried out the following activities, and reported to the Board the outcome of:

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

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

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

iv reviewed and recommended the re-appointment/re-election of Directors retiring pursuant to the Articles 81 and 88 of the Company’s Constitution, whom were re-appointed and/or re-elected by the shareholders at the Eighth Annual General Meeting (“AGM”) held on 28 November 2017.



1.4.2 Nomination Committee (CONTD.)

(b) Board Diversity (CONTD.)


94

i i . BOARd COmpOSiTiON CONTd.



(d) Board Effectiveness Assessment (CONTD.)

The NC had assessed and recommended the appointments of Ms. Maria Rochelle S. Diaz and Dato’ Lim Kay Keng as Directors of the subsidiary companies of MCT vide passing a circular resolution on 28 February 2018, in place of Dato’ Sri Tong Seech Wi, who had resigned as Director of MCT and group of subsidiary companies on 28 February 2018.

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

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

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

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

iv. reviewed and recommended the re-election of Directors retiring pursuant to the Article 81 of the Company’s Constitution for the Shareholders’ approval at the forthcoming Ninth AGM.

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

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

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

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

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

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Co

rp

or

aT

e G

ov

er

na

nC

e

95

i i i . REmUNER ATiON 1.1 Directors’ Remuneration In compliance with the Main LR and MCCG 2017 practice, the details of the remuneration of the

Directors for FY 2018 are as follows:


(e) Re-election of Directors Pursuant to Article 81 of the Company’s Constitution, at least one third (1/3) of the

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

i. Mr. Bernard Vincent Olmedo Dy; and ii. Ms. Anna Maria Margarita Bautista Dy.

1.4.3 Remuneration Committee The RC was established by the Board to review matters on Directors’ remuneration

and make relevant recommendation to the Board. The Board recognises that levels of remuneration must be sufficient to attract, retain and motivate the Directors with the quality required to manage the business of the Group and to align the interest of the Directors with those of the shareholders. The TOR for the RC is available on the Company’s website at www.mct.com.my.

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



Chairman, Independent Non-Executive Director and Chairman

1/1


Member, Independent Non-Executive Director

1/1

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

1/1




96

diREctoRs’ FEEs(RM)

sAlARiEs/ AlloWAncEs

(RM)

BonusEs(RM)

BEnEFits- in-Kind

(RM)

othER EMoluMEnts

(RM)

totAl(RM)


106,000.00 8,000.00 - - - 114,000.00

Jose Juan Z. Jugo

- 666,693.31 310,000.00 27,874.26 - 1,004,567.57

Tan Sri Dato’ Sri Goh Ming Choon

50,000.00 5,000.00 - - - 55,000.00


76,000.00 8,000.00 - 12,635.16 - 96,635.16

Bernard Vincent Olmedo Dy

66,000.00 6,000.00 - - - 72,000.00

Anna Maria Margarita Bautista Dy

58,000.00 4,000.00 - - - 62,000.00

Lao Chok Keang 62,000.00 8,000.00 - - - 70,000.00

Dato’ Sri Tong Seech Wi (1)

198,091.00 20,216.04 12,440.00 230,747.04

Datuk Lim Kok Boon (2)

33,287.67 7,000.00 - 22,263.00 62,550.67

Ching Hong Seng (3) - - - - - -

Note: (1) Resigned as Non-Independent Executive Director on 28 February 2018.(2) Resigned as Non-Independent Non-Executive Director on 28 February 2018.(3) Appointed as Alternate Director to Tan Sri Dato’ Sri Goh Ming Choon on 13 August 2018.

PRInCIPlE A: board leadership And Effectiveness C O N T d . i i i . REmUNER ATiON CONTd.

1.1 Directors’ Remuneration (CONTD.)

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

The Board will ensure that the remuneration of the Key Senior Management commensurate with their duties and responsibilities, the performance of the Group and without excessive remuneration payouts. The aggregate remuneration paid to the 5 Key Senior Management was RM2,878,239.57 which comprises their annual salary, allowances, bonus and benefits-in-kind.

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

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Co

rp

or

aT

e G

ov

er

na

nC

e

97


PRInCIPlE b: Effective Audit And Risk Management i . AUdiT ANd RiSK mANAgEmENT COmmiT TEEThe composition and details of activities carried out by the ARMC during FY 2018 are set out in the ARMC Report of this Annual Report.

1.1 Compliance with Applicable Financial Reporting Standards The Board, which is assisted by the ARMC, aims to present a balanced and understandable

assessment of the Group’s position and prospects through the annual financial statements and quarterly announcements of results to Bursa Malaysia. The composition of the ARMC, including its roles and responsibilities, are set out in the TOR of the ARMC which is available on the Company’s website.

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

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

1.2 Assessment of Suitability and Independence of External Auditors The ARMC had reviewed the suitability and independence of the external auditors on annual

basis and is satisfied with their performance, competency and independence and has recommended to the Board their re-appointment for the financial year ending 31 December 2018. The ARMC met with the external auditors three (3) times during FY 2018 to discuss their audit plan, professional service planning memorandum, audit findings and the Group’s financial statements. In addition to that, the external auditors had a private session with the ARMC without the presence of the Executive Directors or Senior Management.

1.3 Related Party Transactions (“RPT”) The Board approved the revised policies and procedures on RPT of the Company and through its ARMC,

to review all related party transactions and conflicts of interest situations, if any, on a quarterly basis.

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

i i . RiSK mANAgEmENT ANd iNTERNAL CONTROL FR AmEWORK

1.1 Sound risk management framework In recognising the importance of risk management and internal controls, the Board outsourced

its Risk Management function to an independent consulting firm, KPMG Management & Risk Consulting Sdn. Bhd., following the termination of risk management consulting services provided by Axcelasia Columbus Sdn. Bhd.

The role of the external Risk Management is to enhance the Enterprise Risk Management Framework of the Group to facilitate systematic application of risk management practices and reporting on risk management results effectively. The Board approved the revised Enterprise Risk Management Program to identify, evaluate, control, monitor and report the principal business risks on an ongoing basis which was assessed, reviewed and recommended by the ARMC.

98

PRInCIPlE b: Effective Audit And Risk Management C O N T d .

i i . RiSK mANAgEmENT ANd iNTERNAL CONTROL FR AmEWORK CONTd.

1.1 Sound risk management framework (CONTD.)

Full details of the system are set out in the Statement on Risk Management and Internal Control in this annual report.

1.2 Internal Audit Function The Group’s Internal Audit Department continues to undertake regular and systematic reviews

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

PRInCIPlE C: Integrity In Corporate Reporting And Meaningful Relationship with stakeholders 1.1 Corporate Disclosure Policy and Procedure The Company values the importance of dissemination of relevant and material information on

the development of the Group to its shareholders and stakeholders in a timely and equitable manner. The Company’s corporate website at www.mct.com.my serves as one (1) of the most convenient ways for the shareholders and members of the public to gain access to corporate information, announcements, quarterly results, annual reports, media releases, etc. There is also a section focusing on Corporate Governance that comprised the Company’s Board Charter, Code of Ethics, Whistleblowing Policy, TOR for ARMC, NC and RC.

1.2 Encourage Shareholders Participation at General Meetings The AGM is the principal forum for dialogue and interaction with all shareholders, who are given

the opportunity to enquire and seek clarification on the operations and financial performance of the Group.

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

1.3 Poll voting In line with the recent amendments to the Main LR, the Company will implement poll voting for

all the resolutions set out in the Notice of AGM. An Independent Scrutineer will be appointed to validate the votes cast at the AGM.

This Statement is made in accordance with the resolution of the Board passed on 15 October 2018.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Co

rp

or

aT

e G

ov

er

na

nC

e

99

Additional Compliance InformationEMPlOYEEs’ sHARE OPTIOn sCHEME (“EsOs”)The effective date of implementation of the Company’s ESOS was 3 May 2016 (“Implementation Date”) and shall in force for five (5) years from the Implementation Date.

No options or shares were granted between the Implementation Date and 30 June 2018.

AuDIT AnD nOn-AuDIT FEEsThe details of the fees paid or payable for audit and non-audit services rendered by the External Auditors during FY 2018 are as follows:

FEEs PAid/PAYABlE GRouP (RM) coMPAnY (RM)

Audit 336,500 50,000

Non-Audit 39,125 5,000

MATERIAl COnTRACTsThere were no material contracts (not being contracts entered into in the ordinary course of business) entered into by the Company and the Group, which involve the interest of Directors and major shareholders of the Company during FY 2018.

RECuRREnT RElATED PARTY TRAnsACTIOns (“RRPT”) OF REVEnuE OR TRADIng nATuRE:The Company did not enter into any RRPT which requires the shareholders’ mandate during FY 2018.

uTIlIsATIOn OF PROCEEDsThe proceeds raised from the disposal of OCP and Ecity were fully utilised for working capital requirements of the Group.

100

The Directors have the responsibility to prepare financial statements for the financial year which have been made out in accordance with applicable approved accounting standards and the requirements of the Companies Act, 2016 (“Act”) and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad which provide a true and fair view of the state of affairs of the Group and the Company as at the end of 30 June 2018, and of the financial results and cash flows of the Group and the Company for that year then ended.

In preparing the statutory financial statements for the financial year ended 30 June 2018, the Directors have:(a) adopted appropriate accounting policies and applied them consistently;(b) made judgements and estimates that are reasonable and prudent; and(c) prepared the financial statements on a going concern basis.

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

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

The statutory financial statements of the Company and the Group for the financial year ended 30 June 2018 are set out in this annual report.

This statement is made in accordance with a resolution passed on 15 October 2018.

Statement Of Directors’ Responsibilities In Respect Of The Statutory Financial Statements

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Co

rp

or

aT

e G

ov

er

na

nC

e

101

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

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

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

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

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

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

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

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

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

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

102

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

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

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

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

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

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

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

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

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

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

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

RIsk MAnAgEMEnT C O N T d .

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Co

rp

or

aT

e G

ov

er

na

nC

e

103

Statement on Risk Management and Internal Control C O N T d .

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

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

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

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

REVIEw OF THE sTATEMEnT bY EXTERnAl AuDITORs As required by Paragraph 15.23 of the Main LR of Bursa Malaysia, the external auditors, Deloitte PLT have reviewed the Statement for inclusion in the annual report of the Company for the financial year ended 30 June 2018. Their limited assurance review was performed in accordance with International Standard on Assurance Engagements 3000 (Revised), Assurance Engagements other than Audits or Reviews of Historical Financial Information, and Recommended Practice Guide (“RPG”) 5 (Revised) issued by the Malaysian Institute of Accountants. RPG5 (Revised) does not require the external auditors to form an opinion on the adequacy and effectiveness of the risk management process and internal control systems of the Group.

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

THE bOARD’s COnClusIOn AnD AssuRAnCE PROVIDED bY THE MAnAgEMEnT The Board has reviewed the risk management process and internal control systems and believes that the risk management process and internal control systems of the Group are in place for the year under review. The Board also believes that up to the date of issuance of the financial statements, they are effective and adequate to safeguard the shareholders’ investment as well as the interests of regulators and employees.

The Board has also received reasonable assurance from Jose Juan Z. Jugo, the Chief Executive Officer, and Maria Rochelle S. Diaz, the Chief Financial Officer, that the Group’s risk management process and internal control systems are operating adequately and effectively, in all material aspects, based on the risk management process and internal control systems of the Group.

Moving forward, the Group will continue to improve and enhance the existing risk management process and internal control systems, taking into consideration the changing business environment.The Statement was approved by the Board on 15 October 2018.

InTERnAl COnTROl C O N T d .

104

Audit and Risk Management Committee ReportThe Board of Directors (“Board”) of MCT Berhad is pleased to present the report of the Audit and Risk Management Committee (“ARMC”) and its activities for the financial year ended 30 June 2018 (“FY 2018”).

COMPOsITIOn

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

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

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


Lao Chok Keang Chairman, Independent Non-Executive Director 5/5


Member, Independent Non-Executive Director and Chairman

5/5


Member, Independent Non-Executive Director 5/5

Anna Maria Margarita Bautista Dy Member, Non-Independent Non-Executive Director 3/5

MEETIngs The ARMC convened a total of five (5) meetings during FY 2018. The meetings were held on 25 August 2017, 2 October 2017, 28 November 2017, 28 February 2018 and 7 May 2018.

The Chief Financial Officer and Head of Internal Audit were invited to attend all the ARMC meetings. Other persons were invited to attend the ARMC meeting, upon invitation, as and when necessary.

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

The ARMC undertook an annual assessment of the External Auditors and is satisfied with their independence and effectiveness in providing their services to the Company and its group of companies (“Group”). As such, the ARMC has recommended and the Board has agreed to seek shareholders’ approval at the forthcoming Ninth Annual General Meeting to re-appoint Messrs. Deloitte PLT as the External Auditors of the Company.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Co

rp

or

aT

e G

ov

er

na

nC

e

105

TERMs OF REFEREnCE

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

suMMARY OF ACTIVITIEs DuRIng THE FInAnCIAl YEAR

During FY 2018, the ARMC carried out the following activities:

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

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

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

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

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

(f) Met with the external auditors without the presence of the Executive Directors and Senior Management.

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

(h) Reviewed and approved the Internal Audit Planning Memorandum for the Group for FY 2018 and coverage of the Group’s activities based on identified and assessed key risk areas.

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

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

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

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

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

Audit and Risk Management Committee Report C O N T d .

106

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

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

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

InTERnAl AuDIT FunCTIOn

The Company has an in-house Internal Audit Department (“IAD”) led by a qualified and experienced Senior Manager with three (3) assistants to carry out its appraisal function independently from the Management, with the Head of Internal Audit who directly reports to the ARMC. The function of the IAD is to assist the ARMC, Board and Management in discharging their governance responsibilities, to provide the assurance on the adequacy and effectiveness of the internal control systems, risks management and recommending improvements to add value to the Group’s operational efficiency.

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

During the financial year, the Company has terminated the services of Axcelasia Columbus Sdn Bhd, and engaged with a new independent consulting firm, KPMG Management & Risk Consulting Sdn Bhd (“KPMG”). The role of the External Risk Management is to enhance the Enterprise Risk Management Framework of the Group to facilitate systematic application of risk management practices and reporting on risk management results effectively. KPMG has reviewed the existing Enterprise Risk Management Framework and Policy adopted by the Group and proposed a revised Enterprise Risk Management Program, which was reviewed by the ARMC and has been approved by the Board.

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

(a) assisted the Management in outsourcing the risk management function and whistleblowing function;

(b) assisted the ARMC in reviewing the fairness of related party transactions; (c) prepared a risk-based annual internal audit plan for the review and approval of the ARMC; (d) reviewed the implementation status of agreed action plans, management of cash receipts and

procurement activities, foreign purchases made for the projects and operations of Lakefront batching plant, employees’ expenses claims as well as the housing development accounts and the construction subscontracts. Reported findings from the reviews to the Management and the ARMC for the formulation and implementation of effective action plans; and

(e) reviewed the implementation status of agreed action plans mentioned in previous reports.

The total cost incurred for the internal audit function of the Group for the financial year under review was approximately RM435,379.00.

This ARMC Report is made in accordance with the resolution of the Board passed on 15 October 2018.

suMMARY OF ACTIVITIEs DuRIng THE FInAnCIAl YEAR C O N T d .

mC

T B

ER

HA

d A

NN

UA

L R

Ep

OR

T 2

018

107

FiN

AN

CiA

L ST

AT

Em

EN

TS

108

109 Directors’ Report

113 Independent Auditors’ Report to the Members of MCT Berhad

117 Statements of Profit or Loss and Other Comprehensive Income

118 Statements of Financial Position

120 Statements of Changes in Equity

122 Statements of Cash Flows

125 Notes to the Financial Statements

190 Statement by Directors

191 Declaration by the Officer Primarily Responsible for the Financial Management of the Company

Financial Statements

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

109

Directors’ Report

The Directors of MCT BERHAD have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 30 June 2018.

pRiNCipAL ACTiviTiES

The principal activity of the Company is investment holding.

The information on the name, place of incorporation, principal activities, and percentage of issued share capital held by the Company in each subsidiaries are as disclosed in Note 18 to the Financial Statements.

RESULTS OF OpER ATiONS

The results of operations of the Group and of the Company for the financial year are as follows:

thE GRouPRM

thE coMPAnYRM

Profit/(Loss) for the year from continuing operations 86,191,545 (1,738,190)

Loss for the year from discontinued operations (7,401,747) -

Profit/(Loss) for the year, net of tax 78,789,798 (1,738,190)

Profit/(Loss) attributable to:

Equity holders of the Company 78,810,410 (1,738,190)

Non-controlling interests (20,612) -

78,789,798 (1,738,190)

In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature.

dividENdS

No dividend has been paid or declared by the Company since the end of the previous financial year. The Directors also do not recommend any dividend payment in respect of the current financial year.

RESERvES ANd pROviSiONS

There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.

iSSUE OF SHARES ANd dEBENTURES

During the financial year, 122,218,357 new ordinary shares were issued upon conversion of RM122,218,357 nominal value of 36-month zero coupon irredeemable convertible unsecured loan stock (“ICuLS”). The new ordinary shares rank pari passu with the then existing ordinary shares of the Company.

The Company did not issue any debentures during the financial year.

110

SHARE Op TiONS

No options 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 exercise of any option to take up unissued shares of the Company. As at the end of the financial year, there were no unissued shares of the Company under options.

OTHER STATUTORY iNFORmATiON

Before financial statements of the Group and of the Company were made out, the Directors took reasonable steps:

(a) to ascertain that proper action had been taken in relation to the writing off for bad debts and the making of allowance for doubtful debts, and had satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and

(b) to ensure that any current assets which were unlikely to be realised 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 had been written down to an amount which the current assets might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:

(a) which would render the amount written off as bad debts or the amount of allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; 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.

At 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 liability of any other person; and

(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 their obligations when they fall due.

In the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of operations of the Group and of the Company in the financial year in which this report is made.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

111

diRECTORS

The Directors of the Company in office during the financial year and during the period from the end of the financial year to the date of this report are:

Tan Sri Dato’ Sri Abi Musa Asa’ari Bin Mohamed Nor Tan Sri Dato’ Sri Goh Ming Choon Tan Sri Dato’ Hj. Abd Karim Bin Shaikh Munisar Bernard Vincent Olmedo Dy Anna Maria Margarita Bautista DyLao Chok Keang Jose Juan Z. Jugo Ching Hong Seng (alternate to Tan Sri Dato’ Sri Goh Ming Choon) (appointed on 13.8.2018)Dato’ Sri Tong Seech Wi (resigned on 28.2.2018)Datuk Lim Kok Boon (resigned on 28.2.2018)

The Directors who held office in the subsidiaries of the Company during the financial year and during the period from the end of the financial year to the date of this report are:

Maria Rochelle S. Diaz (appointed on 28.2.2018)Heng Aik ChauTuan Haji Ahmad Khalif Bin Mustapha KamalYen Mun Kyn (appointed on 5.9.2017 and resigned on 1.7.2018)Pang Yang Chin (appointed on 5.9.2017)Jose Juan Z. JugoDato’ Hj. Ramle Bin Nayan (resigned on 6.12.2017)Dato’ Lim Kay Keng (appointed on 28.2.2018 and resigned on 30.9.2018)Dato’ Sri Tong Seech Wi (resigned on 28.2.2018)Khairul Anuar Bin Othman (appointed on 1.7.2018)

diRECTORS’ iNTERESTS

The interests in shares in the Company at the end of the financial year according to the Register of Directors’ Shareholdings kept by the Company under Section 59 of the Companies Act, 2016 are as follows:

nuMBER oF oRdinARY shAREs

As At 1.7.2017 Additions convERsion oF iculs sold As At 30.6.2018

shares in the company

Registered in the name of the director

Tan Sri Dato’ Sri Goh Ming Choon 363,636,554 4,000 79,441,932 (290,742,696) 152,339,790

Other than as disclosed above, none of the other Directors in office at the end of the financial year held shares or had beneficial interest in the shares of the Company or its related corporation during or at the beginning and end of the financial year.

Directors’ Report C O N T d .

112

diRECTORS’ BENEFiTS

Since the end of the previous financial year, none of the Directors of the Company has received or become entitled to receive a benefit (other than a benefit included in the aggregate of remuneration received or due and receivable by Directors as disclosed in the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest except for any benefit which may be deemed to have arisen by virtue of the transactions between the Company and its related companies and certain companies in which certain Directors of the Company and/or its subsidiaries or persons connected with such Directors have interests as disclosed in Note 38 to the Financial Statements.

During and at the end of the financial year, no arrangement subsisted to which the Company was a party whereby Directors of the Company might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

iNdEmNiT Y ANd iNSUR ANCE FOR diRECTORS, OFFiCERS ANd AUdiTORS

The Company maintains Directors’ liability insurance for purpose of Section 289 of the Companies Act, 2016, throughout the year, which provide appropriate insurance cover for the Directors of the Company. The amount of insurance premium paid during the year amounted to RM58,310.

There was no indemnity given to or insurance effected for any officers and auditors of the Company in accordance with section 289 of the Companies Act, 2016.

AUdiTORS’ REmUNER ATiON

The amount paid as remuneration of the auditors for the financial year ended 30 June 2018 is as disclosed in Note 9 to the Financial Statements.

AUdiTORS

The auditors, Deloitte PLT, have indicated their willingness to continue in office.

Signed on behalf of the Board, as approved by the Boardin accordance with a resolution of the Directors,

___________________________________ ___________________________________L AO CHOK KEANg JOSE JUAN z. JUgO

Subang Jaya,15 October 2018

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

113

REpORT ON THE AUdiT OF THE FiNANCiAL STATEmENTS

OpiNiON

We have audited the financial statements of MCT BERHAD, which comprise the statements of financial position of the Group and of the Company as at 30 June 2018, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and notes to financial statements, including a summary of significant accounting policies, as set out on pages 117 to 189.

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 30 June 2018 and of their financial performance and their cash flows for the year then ended in accordance with 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 IESBA Code.

KEY AUdiT mAT TERS

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.

Independent Auditors’ Report To The Members Of MCT Berhad(Incorporated in Malaysia)

114

We have determined that there are no key audit matters in the audit of the separate financial statements of the Company to communicate in our auditors’ report.

Revenue and cost from property development and construction contracts

The Group recognises contract revenue and cost in profit or loss by using the stage of completion method which is determined by using the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs.

Significant judgement is required in estimating the stage of completion and assessing the estimated costs to completion, as well as the recoverability of the contracts.

In estimating the total costs to completion, the Group considers the completeness and accuracy of its costs estimation, including its obligations to contract variations, claims and cost contingencies. The total cost to completion including sub-contractor costs, can vary with market conditions and may also be differently forecasted due to unforeseen events during construction.

The key sources of estimation of revenue and cost from property development and construction contracts are as disclosed in Note 4 to the Financial Statements.

We have performed the following:

• Evaluated management’s judgement and estimation relating to revenue recognition including the determination of the percentage of completion and timing of revenue recognition;

• Assessed the competency of the personnel in relation to approvals over budgets setting and authorising and recording of costs;

• Tested invoices and goods received notes throughout the financial year to ascertain the actual cost incurred;

• Assessed management’s estimate on budgeted costs to be incurred, including review of actual costs incurred against budgeted costs;

• Recomputed stage of completion determined by management for revenue recognition based on actual costs incurred to-date against budgeted costs; and

• Assessed estimated total costs to completion through enquiries with operational and financial personnel of the Group and tested a sample of supporting documents.

KEY Audit MAttER hoW thE MAttER WAs AddREssEd in thE Audit

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

115

iNFORmATiON OTHER THAN THE FiNANCiAL STATEmENTS ANd AUdiTORS’ REpORT THEREON

The Directors of the Company are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the Group and 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 this other information, we are required to report that fact. We have nothing to report in this regard.

RESpONSiBiLiTiES OF 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 Financial Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.

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

AUdiTORS’ RESpONSiBiLiTiES FOR THE AUdiT OF THE FiNANCiAL STATEmENTS

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

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

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

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

Independent Auditors’ Report To The Members Of MCT Berhad C O N T d .

(Incorporated in Malaysia)

116

AUdiTORS’ RESpONSiBiLiTiES FOR THE AUdiT OF THE FiNANCiAL STATEmENTS (CONTd.)

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

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

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

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

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

We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, 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 circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

OTHER mAT TERS

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 contents of this report.

dELOiT TE pLT (LLp0010145 -LCA) HUANg KHEAN YEONg CHARTEREd ACCOUNTANTS (AF 0080) pARTNER - 02993/05/2020 J CHARTEREd ACCOUNTANT

15 October 2018

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

117

Statements Of Profit Or Loss And Other Comprehensive IncomeFor The Year Ended 30 June 2018

thE GRouP thE coMPAnY

notE 2018RM

2017RM

2018RM

2017RM

continuing operations

Revenue 5 436,425,748 589,707,668 - -

Cost of sales 6 (242,979,660) (388,238,129) - -

Gross profit 193,446,088 201,469,539 - -

Other income 44,736,276 18,736,698 749,606 2,555

Selling and marketing expenses (35,399,625) (19,494,089) - -

Direct operating and general administrative expenses 7 (84,006,125) (87,683,826) (2,078,231) (655,376)

Finance costs 8 (2,543,126) (2,765,625) (409,565) -

Profit/(loss) before tax 9 116,233,488 110,262,697 (1,738,190) (652,821)

Income tax expense 11 (30,041,943) (30,019,092) - -

Profit/(loss) for the year from continuing operations 86,191,545 80,243,605 (1,738,190) (652,821)

discontinued operations loss for the year from discontinuing operations 12 (7,401,747) (16,585,857) - -

Profit/(loss) for the year 78,789,798 63,657,748 (1,738,190) (652,821)

other comprehensive income - - - -

total comprehensive income/(loss) for the year 78,789,798 63,657,748 (1,738,190) (652,821)

Attributable to:

Equity holders of the Company 78,810,410 63,659,928 (1,738,190) (652,821)

Non-controlling interests (20,612) (2,180) - -

78,789,798 63,657,748 (1,738,190) (652,821)

Earnings per ordinary share attributable to owners of the company (sen)

Basic earnings per share 13a

Continuing operations 6.30 6.01

Discontinued operations (0.54) (1.24)

Total basic earnings per share 5.76 4.77

Diluted earnings per share 13b



Total diluted earnings per share 5.76 4.75

The accompanying Notes form an integral part of the Financial Statements.

118

Statements Of Financial Position

As At 30 June 2018


notE 2018RM

2017RM

2018RM

2017RM

ASSETSnon-current Assets

Property, plant and equipment 15 128,044,376 280,048,791 - -

Investment properties 16 388,589,297 333,102,073 - -

Deferred tax assets 34 7,952,031 - - -

Land held for property development 17 50,674,157 52,529,675 - -

Investment in subsidiaries 18 - - 1,154,639,226 1,154,639,226

Available-for-sale investments 19 - 250,896 - -

Goodwill on consolidation 20 - - - -

total non-current Assets 575,259,861 665,931,435 1,154,639,226 1,154,639,226

current Assets

Inventories – at cost 21 4,671,474 2,718,032 - -

Property development costs 22 226,991,294 194,209,885 - -

Accrued billings 362,095,467 262,000,226 - -

Amount due from contract customers 23 - - - -

Trade receivables 24 58,333,465 40,817,863 - -

Other receivables and prepaid expenses 25 109,387,691 53,481,084 5,094 59,148

Amount owing by subsidiaries 26 - - 422,122,314 388,296,514

Tax recoverable 19,622,943 33,234,663 - -

Deposits with licensed banks 27 44,635,599 45,672,259 40,220 38,802

Cash and bank balances 27 142,060,814 42,534,045 341,447 67,739

total current Assets 967,798,747 674,668,057 422,509,075 388,462,203

Non current assets held for sale 14 11,931,911 - - -

total Assets 1,554,990,519 1,340,599,492 1,577,148,301 1,543,101,429

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

119

For The Year Ended 30 June 2018


notE 2018RM

2017RM

2018RM

2017RM

EqUiT Y ANd LiABiLiTiEScapital and Reserves

Share capital 28 1,541,092,425 1,418,874,068 1,541,092,425 1,418,874,068

ICuLS 29 - 122,218,357 - 122,218,357

Reserves 30 (1,062,626,723) (1,062,626,723) - -

Retained earnings 31 383,364,359 304,553,949 (157,713) 1,580,477

861,830,061 783,019,651 1,540,934,712 1,542,672,902

Non-controlling interests 1,471,653 1,492,265 - -

total Equity 863,301,714 784,511,916 1,540,934,712 1,542,672,902

non-current liabilities

Borrowings 32 167,508,168 174,874,334 - -

Hire-purchase payables 33 1,246,759 3,625,611 - -

Deferred tax liabilities 34 - 3,573,759 - -

total non-current liabilities 168,754,927 182,073,704 - -

current liabilities

Amount due to contract customers 23 - - - -

Trade payables 35 116,641,535 137,196,255 - -

Other payables and accrued expenses 36 340,333,348 166,265,241 1,213,589 428,527

Borrowings 32 63,774,388 62,743,919 35,000,000 -

Hire-purchase payables 33 2,161,789 2,616,843 - -

Tax liabilities 22,818 5,191,614 - -

total current liabilities 522,933,878 374,013,872 36,213,589 428,527

total liabilities 691,688,805 556,087,576 36,213,589 428,527

total Equity and liabilities 1,554,990,519 1,340,599,492 1,577,148,301 1,543,101,429

Statements Of Financial Position C O N T d .


120

For T

he Y

ear E

nded

30

June

20

18

no

n-d

ist

RiB

utA

BlE

REs

ERv

Esd

istR

iBu

tAB

lE

REs

ERv

E

th

E G

Ro

uP

no

tE

shA

RE

cA

Pit

Al

RM

icu

ls RM

shA

RE

PR

EMiu

MR

M

REv

ERsE

A

cQ

uis

itio

n

REs

ERv

E R

M

REt

Ain

Ed

EAR

nin

Gs

RM

Att

RiB

utA

BlE

to

oW

nER

s o

F t

hE

co

MPA

nY

RM

no

n-

co

nt

Ro

llin

G

int

EREs

ts

RM

totA

lEQ

uit

YR

M

As

at

1 ju

ly 2

016

1,33

4,77

7,11

412

2,21

8,35

784

,096

,954

(1,0

62,6

26,7

23)

240,

894,

021

719,

359,

723

1,494

,445

720,

854,

168

Tran

sfer

ari

sing

from

“no

-par

-val

ue” r

egim

e84

,096

,954

-(8

4,0

96,9

54)

--

--

-

Tota

l com

preh

ensi

ve

inco

me/

(loss

) for

the

yea

r-

--

-63

,659

,928

63,6

59,9

28(2

,180

)63

,657

,748

As

at

30 ju

ne

2017

1,418

,874

,068

122,

218,

357

-(1

,062

,626

,723

)30

4,55

3,94

978

3,0

19,6

511,4

92,2

6578

4,51

1,91

6

As

at

1 ju

ly 2

017

1,418

,874

,068

122,

218,

357

-(1

,062

,626

,723

)30

4,55

3,94

978

3,0

19,6

511,4

92,2

6578

4,51

1,91

6

Con

vers

ion

of IC

uLS

2912

2,21

8,35

7(1

22,2

18,3

57)

--

--

--

Tota

l com

preh

ensi

ve

in

com

e fo

r the

yea

r-

--

-78

,810

,410

78,8

10,4

10(2

0,61

2)78

,789

,798

As

at

30 ju

ne

2018

1,54

1,0

92,4

25-

-(1

,062

,626

,723

)38

3,36

4,35

986

1,18

3,0

611,

471,

653

863,

301,

714

Statements Of Changes In Equity

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

121

Statements Of Changes In Equity C O N T d .

For T

he Y

ear E

nded

30

June

20

18

th

E c

oM

PAn

Yn

ot

Esh

AR

Ec

AP

itA

lR

Mic

uls RM

no

n-

dis

tRiB

utA

BlE

REs

ERv

Essh

AR

E P

REM

iuM

RM

dis

tR

iBu

tAB

lE

REs

ERv

E -

REt

Ain

Ed

EAR

nin

Gs

RM

totA

lEQ

uit

YR

M

As

at

1 ju

ly 2

016

1,33

4,77

7,11

412

2,21

8,35

784

,096

,954

2,23

3,29

81,

543,

325,

723

Tran

sfer

ari

sing

from

“no

-par

-val

ue” r

egim

e84

,096

,954

-(8

4,0

96,9

54)

--

Tota

l com

preh

ensi

ve lo

ss fo

r the

yea

r-

--

(652

,821

)(6

52,8

21)

As

at

30 ju

ne

2017

1,418

,874

,068

122,

218,

357

-1,

580,

477

1,54

2,67

2,90

2

As

at

1 ju

ly 2

017

1,418

,874

,068

122,

218,

357

-1,

580,

477

1,54

2,67

2,90

2

Con

vers

ion

of IC

uLS

2912

2,21

8,35

7(1

22,2

18,3

57)

--

-

Tota

l com

preh

ensi

ve lo

ss fo

r the

yea

r-

--

(1,7

38,19

0)

(1,7

38,19

0)

As

at

30 ju

ne

2018

1,54

1,0

92,4

25-

-(1

57,7

13)

1,54

0,9

34,7

12

The

acco

mpa

nyin

g N

otes

form

an

inte

gral

par

t of

the

Fin

anci

al S

tate

men

ts.

122

Statements Of Cash Flows



2018RM

2017RM

2018RM

2017RM

CASH FLOWS FROm/(USEd iN) OpER ATiNg ACTiviTiESProfit/(Loss) before tax

Continuing operations 116,233,488 110,262,697 (1,738,190) (652,821)

Discontinued operations (7,401,747) (16,530,560) - -

108,831,741 93,732,137 (1,738,190) (652,821)

Adjustments for:

Depreciation of:

Property, plant and equipment 11,157,499 17,018,367 - -

Investment properties 645,977 645,977 - -

Provision for liquidated ascertained damages 24,044,940 - - -

Provision for rebates 7,904,118 13,745,927 - -

Impairment loss of property, plant and equipment - 13,615,506 - -

Gain on disposal of subsidiaries (39,443,346) - - -

Land held for property development written off 257,445 - - -

Finance costs 3,834,631 4,262,307 409,565 -

(Allowance no longer required)/Allowance for doubtful debts:

Trade receivables (3,163,777) 1,641,638 - -

Other receivables 325,047 90,109 - -

Property, plant and equipment written off - 1,391,841 - -

Bad debts written off:

Trade receivables 241,847 571,615 - -

Other receivables - 20,410 - -

(Gain)/Loss on disposal of property, plant and equipment (112,865) 36,867 - -

Inventories written off 8,231 322 - -

Grant income received from Government of Malaysia - (14,906,257) - -

Interest income (1,993,031) (2,338,746) (26,390) (2,555)

unrealised loss/(gain) on foreign exchange 124,547 (186,010) - -

Operating Profit/(Loss) Before Working Capital Changes 112,663,004 129,342,010 (1,355,015) (655,376)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

123

Statements Of Cash Flows C O N T d .



2018RM

2017RM

2018RM

2017RM

(Increase)/Decrease in:

Inventories (4,659,834) (2,410,983) - -

Property development costs (20,330,880) 45,835,062 - -

Accrued billings (99,652,981) (112,426,510) - -

Trade receivables (16,636,824) 330,270,843 - -

Other receivables and prepaid expenses (59,869,822) (2,442,408) 54,054 392

(Decrease)/Increase in:

Progress billings - (104,130,835) - -

Trade payables (20,548,124) (183,908,282) - -

Other payables and accrued expenses 334,193,576 (3,106,254) 553,769 174,964

Cash Generated From/(used In) Operations 225,158,115 97,022,643 (747,192) (480,020)

Tax paid (38,092,806) (57,902,298) - -

Net Cash From/(used In) Operating Activities 187,065,309 39,120,345 (747,192) (480,020)

CASH FLOWS FROm/(USEd iN) iNvESTiNg ACTiviTiESProceeds from disposal of property, plant and equipment 1,423,746 3,801,595 - -

Net cash inflow from disposal of subsidiaries 4,666,366 - - -

Interest received 1,993,031 2,338,746 26,390 2,555

Additions to:

Investment properties (56,133,200) (58,684,687) - -

Property, plant and equipment (10,366,827) (33,342,408) - -

Land held for property development (1,153,782) (253,718) - -

Decrease/(Increase) In :

Fixed deposits pledged with licensed banks 1,104,755 (27,854,215) - -

Fixed deposits with maturity period more than 90 days (12,777) (389,144) - -

Available-for-sale investments - (6,783) - -

Amount owing by subsidiaries - - (33,825,800) 155,213

Net Cash (used In)/From Investing Activities (58,478,688) (114,390,614) (33,799,410) 157,768

124



notE 2018RM

2017RM

2018RM

2017RM

CASH FLOWS FROm/(USEd iN) F iNANCiNg ACTiviTiESDrawdown of term loans 21,679,885 369,261,480 - -

Proceed from bank borrowings 63,361,099 4,059,556 50,000,000 -

Repayment of:

Term loans (37,423,312) (314,669,313) - -

Bank borrowings (52,798,802) - (15,000,000) -

Hire-purchase payables (2,685,531) (3,085,895) - -

Finance costs paid (21,137,872) (28,530,492) (178,272) -

Proceed from grant income received from Government of Malaysia - 14,906,257 - -

Net Cash (used In)/From Financing Activities (29,004,533) 41,941,593 34,821,728 -

NET iNCREASE/(dECREASE) iN CASH ANd CASH EqUivALENTS 99,582,088 (33,328,676) 275,126 (322,252)

CASH ANd CASH EqUivALENTS AT BEgiNNiNg OF YEAR 42,573,920 75,902,596 106,541 428,793

CASH ANd CASH EqUivALENTS AT ENd OF YEAR 27 142,156,008 42,573,920 381,667 106,541


MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

125

1 . gENER AL iNFORmATiON

The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad.

The principal activity of the Company is investment holding.

The information on the name, place of incorporation, principal activities, and percentage of issued share capital held by the Company in each subsidiaries are as disclosed in Note 18 to the Financial Statements.

The registered office of the Company is located at Level 8, Symphony House, Pusat Dagangan Dana 1, Jalan

PJu 1A/46, 47301, Petaling Jaya, Selangor Darul Ehsan, Malaysia.

The principal place of business of the Company is located at Ground Floor, MCT Tower, One City, Jalan uSJ 25/1, 47650 Subang Jaya, Selangor Darul Ehsan, Malaysia.

The financial statements of the Group and of the Company were authorised by the Board of Directors for issuance in accordance with a resolution of the Directors on 15 October 2018.

2. BASiS OF pREpAR ATiON OF THE FiNANCiAL STATEmENTS

The financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards (“FRSs”) and the requirements of the Companies Act, 2016 in Malaysia.

Adoption of New and Revised Financial Reporting Standards In the current financial year, the Group and the Company have adopted all the FRS and amendments to

FRSs issued by the MASB effective for annual periods beginning on or after 1 January 2017 as follows:

Amendments to FRS 107 Disclosure Initiative Amendments to FRS 112 Recognition of Deferred Tax Assets for unrealised Losses Annual Improvements to FRSs 2014 - 2016 cycle

The adoption of these revised Standards and Amendments has not affected the amounts reported on the financial statements of the Group and of the Company in the current and previous financial year.

Malaysian Financial Reporting Standards (“MFRS Framework”) On 19 November 2011, the Malaysian Accounting Standards Board (“MASB”) issued a new MASB approved

accounting framework, the Malaysian Financial Reporting Standards Framework (“MFRS Framework”), a fully-IFRS compliant framework. Entities other than private entities shall apply the MFRS Framework for annual periods beginning on or after 1 January 2012, with the exception of Transitioning Entities.

Transitioning Entities, being entities within the scope of MFRS 141 Agriculture and/or IC Interpretation 15: Agreements for the Construction of Real Estate, including its parents, significant investors and venturers were given a transitional period of two years, which allowed these entities an option to continue with the FRS Framework. Following an announcement by the MASB on 7 August 2013, the transitional period for Transitioning Entities had been extended for an additional year.

On 8 September 2015, the MASB confirmed that the effective date of MFRS 15 will be deferred to annual periods beginning on or after 1 January 2018. However, early application of MFRS 15 is still permitted.

Notes To The Financial Statements

126

The Group falls within the scope definition of Transitioning Entities and has availed itself of this transitional arrangement and will continue to apply FRSs in the preparation of its financial statements. Accordingly, the Group will be required to apply MFRS 1 First-time adoption of Malaysian Financial Reporting Standards in its financial statements for the financial year ending 31 December 2018, being the first set of financial statements prepared in accordance with the new MFRS Framework.

The Group is currently assessing the impact of adoption of MFRS 1, including identification of the differences in existing accounting policies as compared to the new MFRSs and the use of optional exemptions as provided for in MFRS 1. At the date of authorisation for issue of these financial statements, accounting policy decisions or elections have not been finalised. Thus, the impact of adopting the new MFRS Framework on the Group’s first set of financial statements prepared in accordance with the MFRS Framework cannot be determined and estimated reliably until the process is complete.

Standards and Amendments in Issue but Not Yet Effective At the date of authorisation for issue of these financial statements, the new and revised Standards

and Amendments which were in issue but not yet effective and not early adopted by the Group and the Company are as listed below.

MFRS 9 Financial Instruments (1)

MFRS 15 Revenue from Contracts with Customers (1)

MFRS 16 Leases (2)

MFRS 17 Insurance Contracts (4)

Amendments to: MFRS 2 Classification and Measurement of Share-based Payment Transactions (1)

MFRS 4 Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts (1)

MFRS 9 Prepayment Features with Negative Compensation (2)

MFRS 10 and MFRS 128 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (4)

MFRS 119 Plan Amendment, Curtailment or Settlement (2)

MFRS 128 Long-term Interests in Associates and Joint Ventures (2)

MFRS 140 Transfers of Investment Property (1)

Clarifications to MFRS 15 Revenue from Contracts with Customers (1)

IC Interpretation 22 Foreign Currency Transactions and Advance Considerations (1)

IC Interpretation 23 uncertainty over Income Tax Treatments (2)

Amendments to MFRSs Annual Improvements to MFRSs 2014-2016 Cycle (1)

Amendments to MFRSs Annual Improvements to MFRSs 2015-2017 Cycle (2)

Amendments to References on the Conceptual Framework in MFRS Standards (3)

(1) Effective for annual period beginning on or after 1 January 2018, with earlier application permitted. (2) Effective for annual period beginning on or after 1 January 2019, with earlier application permitted. (3) Effective for annual period beginning on or after 1 January 2020, with earlier application permitted. (4) Effective for annual period beginning on or after 1 January 2021, with earlier application permitted. (5) Effective date deferred to a date to be determined and announced, with earlier application permitted.

The Group and the Company are in the midst of completing its assessment of the financial impact on the newly effective standards which will be adopted pursuant to its adoption of MFRS Framework, namely MFRS 15, Revenue from Contracts with Customers and MFRS 9, Financial Instruments. The Group and the Company would be in a position to fully comply with the requirements of MFRS Framework for the financial year ending 31 December 2018.

2. BASiS OF pREpAR ATiON OF THE FiNANCiAL STATEmENTS (CONTd.)

Malaysian Financial Reporting Standards (“MFRS Framework”) (CONTD.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

127

MFRS 9 Financial Instruments MFRS 9 issued in November 2009 introduced new requirements for the classification and measurement

of financial assets. MFRS 9 was subsequently amended in October 2010 to include requirements for the classification and measurement of financial liabilities and for derecognition, and in November 2013 to include the new requirements for general hedge accounting. Another revised version of MFRS 9 was issued in July 2014 mainly to include a) impairment requirements for financial assets and b) limited amendments to the classification and measurement requirements by introducing a ‘fair value through other comprehensive income’ (FVTOCI) measurement category for certain simple debt instruments.

Key requirements of MFRS 9:

• all recognised financial assets that are within the scope of MFRS 139 Financial Instruments: Recognition and Measurement are required to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost at the end of subsequent accounting periods. All other debt investments and equity investments are measured at fair values at the end of subsequent accounting periods. In addition, under MFRS 9, entities may make an irrevocable election to present subsequent changes in the fair value of equity instruments (that is not held for trading) in other comprehensive income, with only dividend income generally recognised in profit or loss.

• with regard to the measurement of financial liabilities designated as at fair value through profit or loss, MFRS 9 requires that the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability, is presented in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or loss. Previously, under MFRS 139, the entire amount of the change in the fair value of the financial liability designated as at fair value through profit or loss was presented in profit or loss.

• in relation to the impairment of financial assets, MFRS 9 requires an expected credit loss model, as opposed to an incurred credit loss model under MFRS 139. The expected credit loss model requires an entity to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. In other words, it is no longer necessary for a credit event to have occurred before credit losses are recognised.

• the new general hedge accounting requirements retain the three types of hedge accounting mechanisms currently available in MFRS 139. under MFRS 9, greater flexibility has been introduced to the types of transactions eligible for hedge accounting, specifically broadening the types of instruments that qualify for hedging instruments and the types of risk components of non-financial items that are eligible for hedge accounting. In addition, the effectiveness test has been overhauled and replaced with the principle of an ‘economic relationship’. Retrospective assessment of hedge effectiveness is also no longer required. Enhanced disclosure requirements about an entity’s risk management activities have also been introduced.


Notes To The Financial Statements C O N T d .

128

MFRS 15 Revenue from Contracts with Customers MFRS 15 establishes a single comprehensive model for entities to use in accounting for revenue arising from

contracts with customers. MFRS 15 will supersede the current revenue recognition guidance including MFRS 118 Revenue, MFRS 111 Construction Contracts and the related interpretation when it becomes effective.

The core principle of MFRS 15 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue recognition:

• Step 1 : Identify the contract(s) with a customer

• Step 2 : Identify the performance obligations in the contract

• Step 3 : Determine the transaction price

• Step 4 : Allocate the transaction price to the performance obligations in the contract

• Step 5 : Recognise revenue when (or as) the entity satisfies a performance obligation

under MFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the goods or services underlying the particular performance obligation is transferred to the customer. Far more prescriptive guidance has been added in MFRS 15 to deal with specific scenarios. Furthermore, extensive disclosures are required by MFRS 15.

MFRS 16 Leases MFRS 16 introduces a comprehensive model for the identification of lease arrangements and accounting

treatments for both lessors and lessees. MFRS 16 will supersede the current lease guidance including MFRS 117 Leases and the related interpretations when it becomes effective.

MFRS 16 distinguishes leases and service contracts on the basis of whether an identified asset is controlled by a customer. Distinctions of operating leases (off balance sheet) and finance lease are removed for lessee accounting, and is replaced by a model where a right-of-use asset and a corresponding liability have to be recognised for all leases by lessees except for short-term leases and leases of low value assets.

The right-of-use asset is initially measured at cost and subsequently measured at cost (subject to certain exceptions) less accumulated depreciation and impairment losses, adjusted for any remeasurement of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at that date. Subsequently, the lease liability is adjusted for interest and lease payments, as well as the impact of lease modifications, amongst others. Furthermore, the classification of cash flows will also be affected as operating lease payments under MFRS 117 are presented as operating cash flows; whereas under MFRS 16 model, the lease payments will be split into a principal and an interest portion which will be presented as financing and operating cash flows respectively.

In contrast to lessee accounting, MFRS 16 substantially carries forward the lessor accounting requirements in MFRS 117, and continues to require a lessor to classify a lease either as an operating lease or a finance lease.


MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

129

3. S igNiFiCANT ACCOUNTiNg pOLiCiES

Basis of Accounting The financial statements of the Group and of the Company have been prepared under the historical cost

convention. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of FRS 2, leasing transactions that are within the scope of FRS 117, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in FRS 102 Inventories or value in use in FRS 136 Impairment of Assets.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

The principal accounting policies adopted are set out below.

Basis of Consolidation The consolidated financial statements incorporate the financial statements of the Company and entities

(including special purpose entities) controlled by the Company (its subsidiaries). Control is achieved where the Company:

• has power over the investee; • is exposed, or has rights, to variable returns from its involvement with the investee; and • has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over the

investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power, including:

• the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

• potential voting rights held by the Company, other vote holders or other parties;


130

• rights arising from other contractual arrangements; and • 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.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the statements of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies.

All intra-group assets and liabilities, equity, income and expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing the control 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. Any difference between the amount by which the non-controlling interests are adjusted at the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

Where the Group loses control of a subsidiary, a gain or loss is recognised and is 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 (including goodwill), and liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for as if the Group had directly disposed of the relevant assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable FRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under FRS 139 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or joint venture.

Business Combinations Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The

consideration transferred in a business combination is measured at fair value which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.

3. S igNiFiCANT ACCOUNTiNg pOLiCiES (CONTd.)

Basis of Consolidation (CONTD.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

131

At acquisition date, the identifiable assets acquired and liabilities assumed are recognised at their fair value, except that:

• deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with FRS 112 Income Taxes and FRS 119 Employee Benefits respectively;

• liabilities or equity instruments related to the share-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with FRS 2 Share-based Payment at the acquisition date; and

• assets (or disposal groups) that are classified as held for sale in accordance with FRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-

controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in another FRSs.

Where the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.

The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or liability is remeasured at subsequent reporting dates in accordance with FRS 139 Financial Instruments: Recognition and Measurement or FRS 137 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognised in profit or loss.

Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are remeasured to fair value at the acquisition date and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.


Business Combinations (CONTD.)


132

If the initial accounting for a business combination is incomplete by end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items of which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised at that date.

Investment in Subsidiaries In the Company’s separate financial statements, investment in subsidiaries are stated at cost less any

accumulated impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

Non-current assets held for sale Non-current assets and disposal groups are classified as held for sale if their carrying amount will be

recovered principally through a sale transaction greater than true continuing use. This condition is regarded as met only when the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such asset and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-controlling interest in its former subsidiary after the sale.

When the Group is committed to a sale plan involving disposal of an investment, or a portion of an investment, in an associate or joint venture, the investment or the portion of the investment that will be disposed of is classified as held for sale when the criteria described above are met, and the Group discontinues the use of the equity method in relation to the portion that is classified as a held for sale. Any retained portion of an investment in an associate or a joint venture that has not been classified as held for sale continues to be accounted for using the equity method. The Group discontinues the use of the equity method at the time of disposal when the disposal results in the Group losing significant influence over the associate or joint venture.

After the disposal takes place, the Group accounts for any retained interest in the associate or joint venture in accordance with FRS 139 unless the retained interest continues to be an associate or a joint venture, in which case the Group uses the equity (see the accounting policy regarding investments in associates or joint ventures above).

Non-current assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.

Revenue Recognition Revenue comprises the fair value of the consideration received or receivable for the sales of goods or

services in the ordinary course of business. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:


Business Combinations (CONTD.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

133

(i) Property development revenue Revenue from property development projects is accounted for using the percentage of completion

method where the outcome of the development can be reliably estimated and is in respect of sales where agreements have been finalised by the end of the reporting period. The percentage of completion is measured by reference to the costs incurred to date compared to the estimated total costs of the development.

(ii) Sale of completed properties Revenue from sale of completed properties is recognised upon the finalisation of sale and purchase

agreements by the end of the reporting period and when the risks and rewards of ownership have passed to the customers.

(iii) Revenue from construction contracts Revenue is recognised based on the stage of completion of individual projects. The stage of

completion is determined by the proportion of contract costs incurred to date against the total estimated costs on project where the outcome of the project can be reliably estimated. All anticipated losses on contract projects are fully provided for.

(iv) Other revenueothER REvEnuE EARnEd BY thE GRouP ARE REcoGnisEd on thE FolloWinG BAsis:

Leasing income Leasing income is recognised on a straight line basis over the terms of the relevant lease agreements.

Car park income Car park income is recognised as and when the services are performed.

utility services income utility services income is recognised upon rendering of services.

Revenue from sale of cinema tickets Revenue from sale of cinema tickets is recognised upon delivery of services.

Revenue from hotel operations Revenue from hotel operations is recognised upon delivery of services.

Revenue from fitness centre Revenue represents income earned from the sale of fitness club memberships and associated joining fees. All income is recognised on an accrual basis over the membership period apart from income relating to joining fees which is recognised immediately.

(v) Interest income Interest income is recognised by calculating the amortised cost of a financial asset and of allocating

interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

(vi) Dividend income Dividend income is recognised when the shareholder’s right to receive payment is established.

Leasing Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks

and rewards of the ownership to the lessee. All other leases are classified as operating leases. (i) The Group as lessor Amounts due from lessees under finance leases are recognised as receivables at the amount of the Group’s

net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases.


Revenue Recognition (CONTD.)


134

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

(ii) The Group as lessee Assets held under finance leases are initially recognised as assets of the Group at their fair value

at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the consolidated statement of the financial position as a finance lease obligation.

Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are captalised in accordance with the Group’s general policy on borrowing costs. Contingent rentals are recognised as expenses in the periods in which they are incurred.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Foreign Currencies The individual financial statements of each group entity are presented in the currency of the primary

economic environment in which the entity operates (its functional currency). The financial statements of each group entity are presented in Ringgit Malaysia, the currency of the primary economic environment in which the Company and each group entity operate (their functional currency).

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the end of the reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss for the year. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the year except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in other comprehensive income. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in other comprehensive income.


Leasing (CONTD.)

(i) The Group as lessor (CONTD.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

135

Employee Benefits (i) Short-term benefits Wages, salaries, bonuses and social security contributions are recognised as an expense in the period

in which the associated services are rendered by employees of the Group and of the Company. Short-term accumulating compensated absences for paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short-term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(ii) Defined contribution plan The Group is required by law to make monthly contributions to the Employees Provident Fund (“EPF”),

a statutory defined contribution plan, for all its eligible employees based on certain prescribed rates of the employees’ salaries. The Group’s contributions to EPF are disclosed separately. The employees’ contributions to EPF are included in staff costs.

Taxation Income tax expense for the year comprises current tax and deferred tax.

(i) Current tax Current tax is the expected amount of income taxes payable in respect of the taxable profits for the

year and is measured using the tax rates that have been enacted or substantively enacted by the end of the reporting period. Current tax for current and prior years is recognised as a liability (or asset) to the extent that it is unpaid (or recoverable).

(ii) Deferred tax Deferred tax is recognised on temporary differences between the tax bases of assets and liabilities and

their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that sufficient future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither the accounting profit nor taxable profit.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax is charged or credited to the statements of profit or loss and other comprehensive income.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set-off current tax assets against current tax liabilities and when they relate to income taxes levied by the same tax authority and the Group intends to settle its current tax assets and liabilities on a net basis.



136

Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses.

Gain or loss arising from the disposal of an asset is determined as the difference between the net disposal proceeds and the carrying amount of the asset, and is recognised in profit or loss.

Property, plant and equipment under construction are not depreciated.

Leasehold land is amortised over the lease period.

Depreciation of other property, plant and equipment is computed on the straight-line method to write off the cost of the various property, plant and equipment over their estimated useful lives at the following annual rates:

Office equipment 12.5% Furniture and fittings 10.0 - 12.5% Computer equipment 20.0 - 33.3% Plant and machinery 3.3 - 10.0% Construction equipment 12.5 - 20.0% Tools and equipment 12.5% Motor vehicles 20.0% Renovation 10.0% Buildings 2.0%

The residual values, estimated useful lives and depreciation method of the property, plant and equipment are reviewed at the end of each reporting period and, if expectations differ from previous estimates, the changes will be accounted for prospectively as a change in accounting estimate.

Assets Acquired Under Hire-Purchase Arrangements Assets acquired under hire-purchase arrangements are capitalised in the financial statements and the

corresponding obligations treated as liabilities. Finance charges are allocated to profit or loss to give a constant periodic rate of interest on the remaining hire-purchase liabilities.

Assets held under hire-purchase arrangement are depreciated over their expected useful lives on the same basis as owned assets.

Investment Properties Investment properties, comprising certain freehold land and buildings, are held for long-term rental yields

or for capital appreciation or both, and are not occupied by the Group.

Investment properties under construction are not depreciated. Investment properties are stated at cost less accumulated depreciation and any impairment losses. Investment properties are depreciated on the straight-line method at an annual rate of 2%.

On disposal of an investment property, or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal, it shall be derecognised (eliminated from the statements of financial position). The difference between the net disposal proceeds and the carrying amount is recognised in profit or loss.

Transfers are made to/from investment properties only when there is a change in its intended use. For a transfer to/from investment properties, the deemed cost is the cost at the date of the change in the intended use.


MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

137

Property Development Activities

(i) Land held for property development Land held for property development consists of land on which no significant development work

has been undertaken or where development activities are not expected to be completed within the normal operating cycle. Such land is classified as non-current asset and is stated at cost less any impairment losses.

Costs associated with the acquisition of land include the purchase price of the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies. Where an indication of impairment exists, the carrying amount of the asset is assessed and written down immediately to its recoverable amount.

Land held for property development is transferred to property development costs (under current assets) when development activities have commenced and where the development activities can be completed within the Group’s normal operating cycle.

(ii) Property development costs Property development costs comprise costs associated with the acquisition of land and all costs

directly attributable to development activities or that can be allocated on a reasonable basis to these activities.

When the outcome of the development activity can be estimated reliably, property development revenue and expenses are recognised by using the stage of completion method. The stage of completion is measured by reference to the proportion that property development costs incurred bear to the estimated total costs for the property development.

When the outcome of a development activity cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that are probable of recovery.

Irrespective of whether the outcome of a property development activity can be estimated reliably, when it is probable that total property development costs (including expected defect liability expenditure) will exceed total property development revenue, the expected loss is recognised as an expense immediately.

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

Where revenue recognised in profit or loss exceeds billings to purchasers, the balance is shown as accrued billings within current assets. Where billings to purchasers exceed revenue recognised in profit or loss, the balance is shown as progress billings within current liabilities.

Construction Contracts When the outcome of a construction contract can be estimated reliably, revenue and costs are recognised

by reference to the stage of completion of the contract activity at the end of the reporting period, as measured by the proportion that contract costs incurred for work performed todate bear to the estimated total contract costs. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customers.



138

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that are probable of recovery. Contract costs are recognised as expenses in the period in which they are incurred.

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

Amount due from contract customers represents the excess of cost incurred to-date and portion of profit or loss attributable to work performed to-date over progress billings while amount due to contract customers represents the excess of progress billings over cost incurred to-date and portion of profit or loss attributable to work performed to-date.

Goodwill on Consolidation Goodwill is identified as any excess of the consideration paid over Group’s share of fair value of the

identifiable assets, liabilities and contingent liabilities acquired as at the date of acquisition. Goodwill is initially measured at cost less any accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

Where the consideration is lower than the Group’s share of net fair value of the identifiable assets, liabilities and contingent liabilities acquired, the difference is recognised as negative goodwill. Negative goodwill is recognised immediately in profit or loss.

Goodwill acquired is allocated to the cash-generating units (“CGu”) expected to benefit from the acquisition synergies. An impairment loss is recognised in profit or loss when the carrying amount of the CGu, including the goodwill, exceeds the recoverable amount of the CGu. The recoverable amount is the higher of the CGu’s fair value less costs to sell and its value in use. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

The total impairment loss is allocated first to reduce the carrying amount of goodwill allocated to the CGu and then to the other assets of the CGu pro-rata on the basis of the carrying amount of each assets in the CGu. Impairment loss on goodwill is not reversed in a subsequent period.

Impairment of Non-Financial Assets Excluding Goodwill At the end of each reporting period, the Group reviews the carrying amounts of its non-financial assets to

determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and 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.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.


Construction Contracts (CONTD.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

139

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying

assets, which are assets that necessarily take a substantial period of time to get them ready for their intended use or sale, are capitalised as part of the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

The amount of borrowing costs eligible for capitalisation is determined based on actual interest incurred on borrowings made specifically for the purpose of obtaining a qualifying asset and less any investment income on the temporary investment of that borrowing.

All other borrowing costs are recognised as finance costs in profit or loss in the period in which they are incurred.

Government Grants Government grants are not recognised until there is reasonable assurance that the Group will comply

with the conditions attaching to them and that the grants will be received.

Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the

purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable.

Inventories Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on

a first-in-first-out basis. For completed unsold units, cost is determined on specific identification method. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

Provisions Provisions are recognised when the Group and the Company have a present legal or constructive

obligation as a result of past events, when it is probable that an outflow of resources will be required to settle the obligations, and when a reliable estimate of the amount can be made. Provisions are measured at the Directors’ best estimate of the amount required to settle the obligation at the end of the reporting period, and are discounted to present value where the effect is material.


Impairment of Non-Financial Assets Excluding Goodwill (CONTD.)


140

At the end of each reporting period, the provisions are reviewed by the Directors and adjusted to reflect the current best estimate. The provisions are reversed if it is no longer probable that the Group and the Company will be required to settle the obligations.

Segment Reporting For management purposes, the Group is organised into operating segments that engages in business

activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. The operating segment’s operating results are reviewed regularly by the chief operating decision maker, which is the Chief Executive Officer of the Group, to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Financial Instruments Financial instruments are recognised in the statements of financial position when, and only when, the

Group and the Company become a party to the contractual provisions of the financial instruments. Financial assets and financial liabilities are initially measured at fair value. Transactions costs that are

directly attributable to the acquisition or issue of the financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs that are directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

(i) Financial Assets Financial assets are classified into the following specified categories: financial assets ‘at fair value

through profit or loss’ (“FVTPL”), ‘held-to-maturity’ investments, ‘available-for-sale’ (“AFS”) financial assets and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Effective interest method The effective interest method is a method of calculating the amortised cost of a financial asset and of

allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL.

(a) Financial assets at FVTPL Financial assets are classified as at FVTPL when the financial asset is either held for trading or

it is designated as at FVTPL.


Provisions (CONTD.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

141

A financial asset is classified as held for trading if:

• it has been acquired principally for the purpose of selling it in the near term; or • 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 • it is a derivative that is not designated and effective as a hedging instrument.

A financial asset other than a financial asset held for trading may be designated as at FVTPL

upon initial recognition if:

• such designation eliminates or significantly reduces measurement or recognition inconsistency that would otherwise arise; or

• the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and FRS 139 Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the ‘other gains and losses’ line item in profit or loss.

(b) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable

payments and fixed maturity dates that the Group has the positive intent and ability to hold to maturity. Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method less any impairment, with revenue recognised on an effective yield basis.

(c) AFS financial assets AFS financial assets are non-derivatives that are either designated as available-for-sale or

are not classified as loans and receivables, held-to-maturity investment or financial assets at FVTPL. All AFS assets are measured at fair value at the end of the reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the investments revaluation reserve, with the exception of impairment losses, interest calculated using the effective interest method, and foreign exchange gains and losses on monetary assets, which are recognised in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the investment revaluation reserve is reclassified to profit or loss.



Financial Instruments (CONTD.)

(i) Financial Assets (CONTD.)

(a) Financial assets at FVTPL (CONTD.)

142

AFS equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity investments are measured at cost less any identified impairment losses at the end of the reporting period.

Dividends on AFS equity instruments are recognised in profit or loss when the Group’s right to receive the dividends is established.

The fair value of AFS monetary assets denominated in foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. The foreign exchange gains and losses that are recognised in profit or loss are determined based on the amortised cost of the monetary asset. Other foreign exchange gains and losses are recognised in other comprehensive income.

(d) Loans and receivables Loans and receivables are non-derivative financial assets that have fixed or determinable

payments that are not quoted in an active market. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

(e) Impairment of financial assets Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end

of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For equity investments classified as AFS, a significant or prolonged decline in the fair value of the

security below its cost is considered to be objective evidence of impairment.

For all other financial assets, objective evidence of impairment could include:

• significantfinancialdifficultyoftheissuerorcounterparty;or • defaultordelinquencyinterestorprincipalpayments;or • itbecomingprobablethattheborrowerwillenterbankruptcyorfinancialre-organisation.

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.




(c) AFS financial assets (CONTD.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

143

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss in the period.

With the exception of AFS equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

In respect of AFS equity securities, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income.

(f) Derecognition of financial assets The Group derecognises a financial asset only when the contractual rights to the cash flows

from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

(ii) Financial Liabilities and Equity Instruments Debt and equity instruments are classified as either financial liabilities or as equity in accordance with

the substance of the contractual arrangement.

(a) Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of

an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.

Irredeemable Convertible unsecured Loan Stocks (“ICuLS”) which were issued after the effective date of FRS 132: Financial Instruments: Disclosure and Presentation, are regarded as compound instruments, consisting of an equity component and a liability component.





(e) Impairment of financial assets (CONTD.)

144

ICuLS which have a zero coupon rate are considered to have only the equity component, as there is no obligation for payment of interest, principal or for re-purchase.

(b) Financial guarantee contract liabilities Financial guarantee contract liabilities are initially measured at their fair values and, if not

designated as at FVTPL, are subsequently measured at the higher of:

• the amount of the obligation under the contract, as determined in accordance with FRS 137 Provisions, Contingent Liabilities and Contingent Assets; or

• the amount initially recognised less, where appropriate, cumulative amortisation recognised

in accordance with the revenue recognition policies set out above.

(c) Financial liabilities at FVTPL Financial liabilities are classified as at FVTPL when the financial liability is either held for trading

or it is designated as at FVTPL. A financial liability is classified as held for trading if:

• it has been acquired principally for the purpose of repurchasing it in the near term; or • 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 • it is a derivative that is not designated and effective as a hedging instrument.

A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:

• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

• the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and FRS 139 Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the ‘other gains and losses’ line item in profit or loss.

(d) Other financial liabilities Other financial liabilities, including borrowings, are initially measured at fair value, net of

transaction costs.



(ii) Financial Liabilities and Equity Instruments (CONTD.)

(a) Equity instruments (CONTD.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

145


Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or a shorter period, to the net carrying amount on initial recognition.

(e) Derecognition of financial liabilities The Group derecognises financial liabilities when, and only when, Group’s obligations are

discharged, cancelled or they expire.

The difference between the carrying amount of the financial liabilities derecognised and the consideration paid or payable is recognised in profit or loss.

Cash and Cash Equivalents The Group and the Company adopt the indirect method in the preparation of the statements of cash flows.

Cash equivalents are short term, highly liquid investments with maturities of three months or less from the date of acquisition and are readily convertible to cash with insignificant risk of changes in value, against which bank overdrafts, if any are deducted.

4. CRiTiCAL ACCOUNTiNg JUdgEmENTS ANd KEY SOURCES OF ESTimATiON UNCERTAiNT Y

(i) Critical judgements in applying the Group’s and the Company’s accounting policies In the process of applying the Group’s and the Company’s accounting policies, which are described in

Note 3 above, management is of the opinion that there are no instances of application of judgement which are expected to have a significant effect on the amounts recognised in the financial statements.

(ii) Key sources of estimation uncertainty Management believes that there are no key assumptions made concerning the future, and other

key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing material adjustments to the carrying amounts of assets and liabilities within the next financial year, except for the following:

(a) Property development revenue The Group recognised property development revenue based on the percentage of completion

method. The percentage of completion is measured by reference to the property development costs incurred to date to the estimated total costs for the property development. The percentage of completion method requires the Group to make reasonably dependable estimates of progress towards completion of property development projects and costs in determining the percentage of completion, and the recoverability of development projects. In making the estimate, management relied on opinion/service of experts, past experience and a continuous monitoring mechanism.



(ii) Financial Liabilities and Equity Instruments (CONTD.)

(d) Other financial liabilities (CONTD.)

146

(b) Revenue from construction contracts The Group recognises revenue and costs in the profit or loss using the stage of completion

method. The stage of completion is determined by the proportion of contract costs incurred to date against the total estimated costs on project where the outcome of the project can be reliably estimated. Judgements are required in determining the stage of completion, the estimated total contract revenue and costs, as well as the recoverability of the contracts.

(c) Depreciation of property, plant and equipment and investment properties Except for property, plant and equipment and investment properties under construction,

the costs of property, plant and equipment and investment properties are depreciated on a straight-line basis over the assets’ useful lives.

The Group reviews the remaining useful lives of property, plant and equipment and investment properties at the end of each reporting period and ensures consistency with previous estimates and patterns of consumptions of the economic benefits that embodies the items in these assets. Changes in useful lives of property, plant and equipment and investment properties may result in revision of future depreciation charges.

(d) Impairment of property, plant and equipment Determining whether property, plant and equipment are impaired requires an estimation of

the recoverable amount of the property, plant and equipment. In 2017, the Group recognised an impairment loss of RM13.6 million for chiller plants based on a valuation report performed by a third party independent valuer.

Information about the valuation techniques and inputs used to determine the recoverable amount of the property, plant and equipment are disclosed in Note 15.

(e) Provision for liquidated ascertained damages Provision for liquidated ascertained damages is recognised for the expected liquidated

ascertained damages based on the terms of the applicable sale and purchase agreements and is provided up to the actual or estimated completion date of development projects.

4. CRiTiCAL ACCOUNTiNg JUdgEmENTS ANd KEY SOURCES OF ESTimATiON UNCERTAiNT Y (CONTd.)

(ii) Key sources of estimation uncertainty (CONTD.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

147


5. REvENUE

6. COST OF SALES

7. diRECT OpER ATiNg ANd gENER AL AdmiNiSTR ATivE EXpENSES

8. F iNANCE COSTS

thE GRouP

2018RM

2017RM


Property development revenue 421,752,153 577,557,438

Leasing, car park, utility services and fitness centre 14,609,107 11,534,793

Contract revenue 64,488 615,437

436,425,748 589,707,668

thE GRouP

2018RM

2017RM


Property development costs 230,141,632 377,004,289

Leasing, car park, utility services and fitness centre 13,415,191 10,073,331

Contract costs (577,163) 1,160,509

242,979,660 388,238,129


2018RM

2017RM

2018RM

2017RM


Direct operating expenses 31,002,091 22,681,696 - -

General administrative expenses 53,004,034 65,002,130 2,078,231 655,376

84,006,125 87,683,826 2,078,231 655,376


2018RM

2017RM

2018RM

2017RM


Interest expense on:

Term loans 1,253,701 1,479,686 - -

Revolving credit 409,565 - 409,565 -

Bank guarantees 489,852 829,477 - -

Hire-purchases 348,532 450,332 - -

Bank overdrafts 41,476 6,130 - -

2,543,126 2,765,625 409,565 -

148

9. pROFiT/(LOSS) BEFORE TA X

Profit/(Loss) before tax for continuing operations is arrived at after the following charges/(credits):


2018RM

2017RM

2018RM

2017RM

Staff costs 47,418,335 51,694,367 - -

Depreciation of:

Property, plant and equipment 8,016,142 11,998,597 - -

Investment properties 645,977 645,977 - -



Impairment loss on property, plant and equipment (Note 15(c)) - 13,615,506 - -

Land held for property development written off 257,445 - - -

Developer interest bearing scheme 8,693,106 11,391,746 - -

Directors’ remunerations (Note 10) 2,550,033 3,502,953 526,329 453,419

Rental of:

Premises 2,315,709 2,321,997 - -

Equipment 22,702 333,226 - -

Allowance for doubtful debts:

Trade receivables - 3,042,052 - -

Other receivables 325,047 37,372 - -

Property, plant and equipment written off - 4,724 - -

Bad debts written off 30,767 25,554 - -

Auditors’ remunerations:

Statutory audit 355,495 331,600 50,000 50,000

Others 35,368 25,100 12,780 5,000

Realised (gain)/loss on foreign exchange (169,286) 233,902 - -

(Gain)/Loss on disposal of property, plant and equipment (196,362) 25,961 - -

Grant income received from Government of Malaysia - (14,906,257) - -

Gain on disposal of subsidiaries (39,443,346) - - -

Allowance for doubtful debt no longer required (3,163,777) - - -

Interest income (1,967,280) (2,210,681) (26,390) (2,555)

Rental income (141,336) (160,468) - -

unrealised loss/(gain) on foreign exchange 121,482 (186,010) - -

Staff costs include salaries, contributions to defined contribution plans and all other staff related expenses. Contributions to approved provident funds by the Group during the year amounted to RM4,676,073 (2017: RM5,268,054).

The grant income received from Government of Malaysia in 2017 pertains to infrastructure work done for a public road adjacent to one of the Group’s project sites under the Prime Minister’s Department unit Kerjasama Awam Swasta (“uKAS”) program.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

149


10. diRECTORS’ REmUNER ATiONS

Directors’ remunerations charged to profit or loss for the financial year are as follows:


2018RM

2017RM

2018RM

2017RM

Fees:

Non-executive Directors 480,329 425,419 480,329 425,419

salaries and other emoluments:

Executive Directors 2,023,704 3,049,534 - -

Non-executive Directors 46,000 28,000 46,000 28,000

2,550,033 3,502,953 526,329 453,419

The estimated monetary value of benefits-in-kind received by the Directors of the Group are RM86,110 (2017: RM81,377) and of the Company are RM34,898 (2017: RM70,277).

The number of Directors of the Company whose total remuneration during the financial year fell within the following bands is analysed below:

thE coMPAnY

2018RM

2017RM

Executive directors

RM50,000 and below - -

RM50,001 - RM100,000 - -

RM100,001 - RM150,000 - -

RM150,001 - RM500,000 1 2

RM500,001 - RM1,000,000 1 1

RM1,000,001 and above - 1

2 4

non-Executive directors

RM50,000 and below 2 4

RM50,001 - RM100,000 4 4

RM100,001 - RM150,000 1 1

7 9

9 13

150

11 . iNCOmE TA X EXpENSE


2018RM

2017RM

2018RM

2017RM


Estimated tax payable:

Current year 40,889,435 27,505,498 - -

underprovision in prior years 678,298 2,303,928 - -

41,567,733 29,809,426 - -

Deferred tax (Note 34):

Current year (11,411,024) 213,479 - -

underprovision in prior years (114,766) (3,813) - -

(11,525,790) 209,666 - -

30,041,943 30,019,092 - -

A numerical reconciliation of income tax expense applicable to profit/(loss) before tax at the applicable statutory income tax rate to income tax expense at the effective income tax rate is as follows:


2018RM

2017RM

2018RM

2017RM

Profit/(Loss) before tax 116,233,488 110,262,697 (1,738,190) (652,821)

Tax at applicable statutory tax rate of 24% 27,896,037 26,463,047 (417,166) (156,677)

Tax effects of:

Non-deductible expenses 9,574,989 6,926,818 417,166 156,677

Non-taxable income (7,992,615) (4,900,725) - -

Differential in tax rate applied - (2,104,963) - -

Deferred tax assets not recognised - 1,127,871 - -

Realisation of deferred tax assets previously not recognised - 206,929 - -

under/(Over)provision in prior years:

Current tax 678,298 2,303,928 - -

Deferred tax (114,766) (3,813) - -

30,041,943 30,019,092 - -

On 10 April 2017, the Income Tax (Exemption) (No. 2) Order 2018 (“the Order”) gazetted enacts the reduction of corporate income tax rate on the incremental chargeable income. The Order is applicable for years of assessment 2017 and 2018. Accordingly, for certain subsidiaries, the income tax statutory tax rate of 20% applies to the chargeable income.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

151


12. diSCONTiNUEd OpER ATiONS

The combined results of the discontinued operations included in the profit/(loss) for the year are set out below. The comparative profit/(loss) and cash flows from discontinued operations have been re-presented to include those operations classified as discontinued in current year.

(a) Statement of comprehensive income of the discontinued operations are as follows:

thE GRouP

2018RM

2017RM

Revenue 22,607,396 33,260,847

Cost of sales (10,376,454) (20,502,482)

Gross profit 12,230,942 12,758,365

Other income 1,753,264 449,592

Selling and marketing expenses (368,934) (925,339)

Direct operating and general administrative expenses (19,610,994) (27,316,496)

Finance costs (1,406,025) (1,496,682)

loss before tax (7,401,747) (16,530,560)

Income tax expense - (55,297)

loss for the year (7,401,747) (16,585,857)

As mentioned in Note 3, the tax effects of deductible temporary differences, unused tax losses and unused tax credits which would give rise to deferred tax assets are recognised to the extent that it is probable that sufficient future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. As at 30 June 2018, the estimated amount of deductible temporary differences, unused tax losses and unused tax credits, for which the deferred tax assets have not recognised in the financial statements due to uncertainty of their realisation, are as follows:


2018RM

2017RM

2018RM

2017RM

temporary differences arising from:

unabsorbed capital allowances - 22,474,000 - -

unused tax losses - 43,853,000 - -

- 66,327,000 - -

The availability of unused tax losses and unabsorbed capital allowances for offsetting future taxable profits is subject to the agreement with the tax authorities.

11 . iNCOmE TA X EXpENSE (CONTd.)

152

(b) Statement of cash flows of the discontinued operations are as follows:

thE GRouP

2018RM

2017RM

Net cash outflows from operating activities (504,907) (15,589,780)

Net cash inflows from investing activities 126,251 1,689,280

Net cash inflows from financing activities 4,205,468 14,592,597

Net cash inflows / (outflows) 3,826,812 (692,097)

(c) Included in profit / (loss) before tax are the following charges / (credits):

thE GRouP

2018RM

2017RM

Staff costs 3,816,461 7,453,981

Depreciation of property, plant and equipment 3,141,357 5,019,770

Developer interest bearing scheme - 2,211

Rental of equipment 17,920 45,161

Allowance for doubtful debts:

Trade receivables - (1,400,414)

Other receivables - 52,737

Property, plant and equipment written off - 1,387,117

Bad debts written off:

Trade receivables 211,080 546,061

Other receivables - 20,410

Auditors’ remunerations:

Statutory audit 43,752 43,000

Others 1,083 4,900

Loss on disposal of property, plant and equipment 83,497 10,906

Inventories written off 8,231 322

unrealised loss on foreign exchange 3,065 -

Realised gain on foreign exchange (2,390) (20)

Interest income (25,751) (128,065)

Rental income (99,419) (169,893)

12. diSCONTiNUEd OpER ATiONS (CONTd.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

153


thE GRouP

2018RM

2017RM

Profit attributable to owners of the Company 78,810,410 63,659,928

Earnings used in the calculation of basic earnings per share 78,810,410 63,659,928

Loss for the year from discontinued operations used in the calculation of basic earnings per share from discontinued operationsns (7,401,747) (16,585,857)

Earnings used in the calculation of basic earnings per share from continuing operations 86,212,157 80,245,785

Number of ordinary shares in issue 1,456,995,471 1,334,777,114

Weighted average number of ordinary shares 1,366,613,741 1,334,777,114

Basic earnings/(loss) per ordinary share (sen)



13. EARNiNgS pER ORdiNARY SHARE

(a) Basic earnings per share

The basic earnings per ordinary share of the Group has been calculated by dividing profit for the year attributable to owners of the Company by the number of ordinary shares in issue.

154

thE GRouP

2018RM

2017RM

Profit attributable to owners of the Company 78,810,410 63,659,928

Number of shares used in the calculation of basic earnings per share 1,366,613,741 1,334,777,114

Loss for the year from discontinued operations used in the calculation of basic earnings per share from discontinued operations (7,401,747) (16,585,857)

Earnings used in the calculation of basic earnings per share from continuing operations 86,212,157 80,245,785

Number of shares used in the calculation of basic earnings per share 1,366,613,741 1,334,777,114

Shares deemed to be issued for consideration of RM1.00 each per share in respect of ICuLS - 4,451,584

Weighted average number of ordinary shares used in the calculation of diluted earnings per share 1,366,613,741 1,339,228,698

Diluted earnings/(loss) per ordinary share (sen)



(b) Diluted earnings per share

The diluted earnings per share of the Group has been calculated by dividing the Group’s profit for the year attributable to owners of the Company by the weighted average number of ordinary shares that would have been issued upon full exercise of the ICuLS (Note 29), adjusted by the number of such shares that would have been issued at fair value as follows:

14. ASSETS HELd FOR SALE

thE GRouP

2018RM

2017RM

Leasehold land reclassified from property, plant and equipment (Note 15) 5,481,911 -

Freehold land reclassified from land held for property development (Note 17) 6,450,000 -

11,931,911 -

The Group entered into a Sales and Purchase Agreement on 26 June 2018 to dispose one parcel of freehold land and two parcels of leasehold land. On 31 July 2018, the Group has completed its disposal of one parcel of freehold land and the disposal of the remaining parcels are yet to be completed as at the report date.

13. EARNiNgS pER ORdiNARY SHARE (CONTd.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

155


th

E G

Ro

uP

oFF

icE

EQu

iPM

Ent

RM

FuR

nit

uR

E A

nd

Fi

ttin

Gs

RM

co

MP

ut

EREQ

uiP

MEn

tR

M

PlA

nt

An

d

MA

ch

inER

YR

M

co

nst

Ru

cti

on

EQu

iPM

Ent

RM

too

lsA

nd

EQu

iPM

Ent

RM

Mo

toR

v

Ehic

lEs

RM

REn

ov

At

ion

RM

Bu

ild

inG

sR

M

lEA

sEh

old

lAn

dR

M

cA

Pit

Al

Wo

RK

-in

-P

Ro

GR

Ess

RM

totA

lR

M

co

st

As

at 1

July

20

161,4

34,4

9211

,366

,173

6,76

2,88

411

2,0

47,0

8817

,842

,376

4,75

1,57

010

,358

,748

3,86

1,31

014

7,49

8,82

35,

971,

741

3,43

0,36

232

5,32

5,56

7

Add

itio

ns70

,991

782,

683

507,

978

2,31

9,0

1170

0,10

42,

105,

162

15,0

336,

281,1

85-

-20

,560

,261

33,3

42,4

08

Dis

posa

ls-

(2,3

54,0

12)

(63,

090

)(1

,212

,896

)(2

4,73

2)-

(70

3,27

2)-

--

-(4

,358

,00

2)

Wri

te o

ffs

(26,

682)

(550

,40

0)

(20

6,47

3)-

-(5

7,22

0)

-(1

,074

,60

8)-

--

(1,9

15,3

83)

Rec

lass

ifica

tion

s15

,154

(318

,151)

1,57

63,

730,

243

(1,7

28,4

51)

529

-4,

466

(1,7

05,

366)

--

-

As

at 3

0 Ju

ne

2

017

/ 1 Ju

ly 2

017

1,493

,955

8,92

6,29

37,

00

2,87

511

6,88

3,44

616

,789

,297

6,80

0,0

419,

670,

509

9,0

72,3

5314

5,79

3,45

75,

971,

741

23,9

90,6

2335

2,39

4,59

0

Add

itio

ns14

2,63

620

1,83

910

2,16

93,

141,

997

53,0

9242

1,31

61,

727

385,

391

1,72

5,36

5-

4,19

1,29

510

,366

,827

Dis

posa

ls(1

56,6

38)

(665

,487

)(4

89,0

93)

(1,8

00,

226)

-

(1,2

00

)(1

,90

0,61

0)

(13,

562)

--

-(5

,026

,816

)

Dis

posa

l of

s

ubsi

diar

ies

(N

ote

39)

(156

,30

8)(7

,60

2,75

0)

(1,2

53,7

27)

(13,

966,

701)

-(3

,839

,866

)(5

03,

974)

(6,6

35,4

25)

(124

,985

,058

)-

-(1

58,9

43,8

09)

Rec

lass

ified

as

non

cur

rent

ass

ets

held

for s

ale

(Not

e 14

)-

--

--

--

--

(5,9

71,7

41)

-(5

,971

,741

)

As

at

30 ju

ne

20

181,

323,

645

859,

895

5,36

2,22

410

4,25

8,51

616

,842

,389

3,38

0,2

917,

267,

652

2,80

8,75

722

,533

,764

-

28,1

81,9

1819

2,81

9,0

51

15. p

ROpE

RTY,

pLA

NT

AN

d E

qU

ipm

ENT

156

th

E G

Ro

uP

oFF

icE

EQu

iPM

Ent

RM

FuR

nit

uR

E A

nd

Fi

ttin

Gs

RM

co

MP

ut

EREQ

uiP

MEn

tR

M

PlA

nt

An

d

MA

ch

inER

YR

M

co

nst

Ru

cti

on

EQu

iPM

Ent

RM

too

lsA

nd

EQu

iPM

Ent

RM

Mo

toR

v

Ehic

lEs

RM

REn

ov

At

ion

RM

Bu

ild

inG

sR

M

lEA

sEh

old

lAn

dR

M

cA

Pit

Al

Wo

RK

-in

-P

Ro

GR

Ess

RM

totA

lR

M

Ac

cu

Mu

lAt

Ed

d

EPR

EciA

tio

n

As

at 1

July

20

1663

0,91

21,

538,

956

3,47

5,54

921

,160

,517

4,91

5,16

41,1

91,2

954,

946,

503

202,

722

4,69

3,39

0-

-42

,755

,00

8

Cha

rge

for t

he

y

ear

144,

712

941,

377

1,464

,337

7,0

33,5

732,

112,

569

703,

993

1,66

3,45

857

1,54

11,

973,

497

409,

310

-17

,018

,367

Dis

posa

ls-

(5,0

12)

(12,

202)

(14,

840

)(3

,950

)-

(483

,536

)-

--

-(5

19,5

40)

Wri

te o

ffs

(6,5

21)

(145

,569

)(1

09,

942)

--

(17,

808)

-(2

43,7

02)

--

-(5

23,5

42)

Rec

lass

ifica

tion

s10

,294

(14,

618)

(7,5

18)

1,0

31,0

98(9

90,6

88)

--

-(2

8,56

8)-

--

As

at 3

0 Ju

ne

2

017

/ 1 Ju

ly 2

017

779,

397

2,31

5,13

44,

810,

224

29,2

10,3

486,

033

,095

1,87

7,48

06,

126,

425

530,

561

6,63

8,31

940

9,31

0-

58,7

30,2

93

Cha

rge

for

t

he y

ear

127,

162

801,

049

1,0

11,6

523,

311,

972

2,38

8,62

168

1,90

81,

247,

267

645,

589

861,

760

80,5

20-

11,15

7,49

9

Dis

posa

ls(6

5,50

7)(1

71,3

33)

(420

,182)

(1,3

62,6

93)

-(2

88)

(1,6

92,4

53)

(3,4

79)

--

-(3

,715

,935

)

Dis

posa

l of

s

ubsi

diar

ies

(N

ote

39)

(79,

720

)(2

,695

,395

)(9

64,6

07)

(6,8

11,16

7)-

(966

,280

)(3

36,12

3)(6

17,6

40)

(2,0

51,9

27)

--

(14,

522,

859)

Rec

lass

ified

as

non

cur

rent

ass

ets

held

for s

ale

(Not

e 14

)-

--

--

--

--

(489

,830

)-

(489

,830

)

As

at

30 ju

ne

20

1876

1,33

224

9,45

54,

437,

087

24,3

48,4

608,

421,

716

1,59

2,82

05,

345,

116

555,

031

5,44

8,15

2-

-51

,159

,16

9

15. p

ROpE

RTY,

pLA

NT

AN

d E

qU

ipm

ENT

(C

ON

Td

.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

157


th

E G

Ro

uP

oFF

icE

EQu

iPM

Ent

RM

FuR

nit

uR

E A

nd

Fi

ttin

Gs

RM

co

MP

ut

EREQ

uiP

MEn

tR

M

PlA

nt

An

d

MA

ch

inER

YR

M

co

nst

Ru

cti

on

EQu

iPM

Ent

RM

too

lsA

nd

EQu

iPM

Ent

RM

Mo

toR

v

Ehic

lEs

RM

REn

ov

At

ion

RM

Bu

ild

inG

sR

M

lEA

sEh

old

lAn

dR

M

cA

Pit

Al

Wo

RK

-in

-P

Ro

GR

Ess

RM

totA

lR

M

Ac

cu

Mu

lAt

Ed

iM

PAiR

MEn

t

As

at

1 ju

ly 2

016

an

d 3

0 ju

ne

20

17/

1 ju

ly

2

017

an

d

3

0 ju

ne

2018

--

-13

,615

,50

6-

--

--

--

13,6

15,5

06

nEt

Bo

oK

vA

luE

As

at 3

0 ju

ne

20

1856

2,31

361

0,4

4092

5,13

766

,294

,550

8,42

0,6

731,

787,

471

1,92

2,53

62,

253,

726

17,0

85,6

12-

28,1

81,9

1812

8,0

44,3

76

As

at 3

0 Ju

ne 2

017

714,

558

6,61

1,159

2,19

2,65

187

,673

,098

10,7

56,2

02

4,92

2,56

13,

544,

084

8,54

1,79

213

9,15

5,13

85,

562,

431

23,9

90,6

2328

0,0

48,7

91

15. p

ROpE

RTY,

pLA

NT

AN

d E

qU

ipm

ENT

(C

ON

Td

.)

158

15. pROpERT Y, pL ANT ANd EqUipmENT (CONTd.)

16. iNvESTmENT pROpERTiES

(a) At the end of the reporting period, the carrying amount of property, plant and equipment of the Group acquired under hire-purchase is RM1,921,041 (2017: RM3,300,599).

(b) At the end of the reporting period, the net book value of property, plant and equipment totaling to RM72,931,008 (2017: RM77,217,431) are pledged to financial institutions as security for term loan facilities granted to the Group as disclosed in Note 32.

(c) In 2017, an evaluation of the market values have been assessed to determine the recoverable amounts of the Group’s property, plant and equipment under utilities provider segment. The recoverable amount is determined based on a valuation report performed by PA International Property Consultants (KL) Sdn. Bhd., an independent valuer using “Depreciation Replacement Cost Method”, determined by no more than the cost of the modern logical replacement less physical deterioration and obsolescence at the condition of inspection and market condition.

The fair value hierarchy of the said recoverable amount is at Level 3. The significant inputs include the estimated cost of the modern logical replacement of approximately RM44 million and a depreciation factor applied to the estimated cost of 16% on first year and 7% in subsequent years. A 1% increase/decrease in the depreciation factor while holding all other variables constant would be decrease/increase in the recoverable amount by RM2.1 million.

This review led to the recognition of an impairment loss of RM13,615,506 (Note 9) and has been recognised in profit or loss of the Group in 2017. There has been no impairment loss or reversal of impairment recognised in 2018.

thE GRouP

2018RM

2017RM

cost

At beginning of year 334,394,027 275,709,340

Additions 56,133,200 58,684,687

At end of year 390,527,227 334,394,027

Accumulated depreciation

At beginning of year 1,291,953 645,977

Charge for the year 645,977 645,977

At end of year 1,937,930 1,291,954

net book value 388,589,297 333,102,073

Represented by

Freehold land and buildings 29,802,159 30,448,136

Freehold land and buildings under construction 358,787,138 302,653,937

388,589,297 333,102,073

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

159


16. iNvESTmENT pROpERTiES (CONTd.)

Rental income generated from the rental of investment properties of the Group during the financial year amounted to RM48,000 (2017: RM109,175).

Direct operating expenses from investment properties which generated rental income to the Group during the financial year amounted to RM64,194 (2017: RM298,412).

The investment properties with carrying amount of RM358,787,138 (2017: RM333,102,073) have been pledged to financial institution as security for term loan facilities granted to the Group as disclosed in Note 32.

The fair value of investment properties (except those under construction) with carrying amount of RM29,802,159 (2017: RM30,448,136) amounted to RM33,615,000 (2017: RM33,615,000). The fair value is determined at Level 3 fair value hierarchy based on a valuation report performed by Knight Frank Malaysia Sdn. Bhd., an independent valuer, using “Comparison Approach” which was determined by previous sales of similar properties in the vicinity on a price per square feet basis. In estimating the fair value of the properties, the highest and best use of the properties is their current use.

17. L ANd HELd FOR pROpERT Y dEvELOpmENT

thE GRouP

2018RM

2017RM

cost


Additions 4,851,927 4,754,002

Reclassification from property development costs (Note 22) - 5,413,119

Written off (257,445) -

Reclassified to non-current assets held for sale (Note 14) (6,450,000) -

At end of year 50,674,157 52,529,675

Represented by:

Land cost 31,371,912 38,079,357

Development costs 19,302,245 14,450,318

50,674,157 52,529,675

During the financial year, interest expense capitalised in land held for property development of the Group amounted to RM3,698,145 (2017: RM4,500,284).

The land held for property development with carrying amount of RM31,371,912 (2017: RM31,371,912) have been pledged to financial institution as security for term loan facilities granted to the Group as disclosed in Note 32.

160

thE coMPAnY

2018RM

2017RM

unquoted shares, at cost 1,154,639,226 1,154,639,226

18. iNvESTmENT iN SUBSidiARiES

The details of the subsidiaries, all incorporated in Malaysia, are as follows:

nAME oF coMPAniEs

PRoPoRtion oF oWnERshiP And votinG PoWER hEld BY

thE GRouP PRinciPAl ActivitiEs

2018%

2017%

direct subsidiary

MCT Consortium Bhd. 100 100 Investment holding.

indirect subsidiaries

subsidiaries of Mct consortium Bhd.

Modular Construction Technology Sdn. Bhd. 100 100 Construction, providing civil engineering and electrical works, trading of construction materials and rental of plant and machinery.

MCT Homes Sdn. Bhd. 100 100 Provision of management services.

MCT Construction Materials Sdn. Bhd. 100 100 Trading of construction materials.

The Place Properties Sdn. Bhd. 100 100 Property development and management.

uSJ One Avenue Sdn. Bhd. 100 100 Previously involved in property development and investment in property and management services and currently dormant.

Subang Residency Sdn. Bhd. 100 100 Dormant.

Ecity Hotel Sdn. Bhd. (Note 39) - 100 Operating in hoteling, fitness centre and cinema cum seminar facility.

undersea City Sdn. Bhd. 100 100 Property development.

Solid Benefit Sdn. Bhd. 100 100 Property investment and property development.

Eco Green City Sdn. Bhd. 100 100 Property development and construction.

MCT Green Technology Sdn. Bhd. 100 100 utilities services provider.

Sky Park Properties Sdn. Bhd. 100 100 Property development.

Lakefront Residence Sdn. Bhd. 100 100 Property development and construction.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

161


18. iNvESTmENT iN SUBSidiARiES (CONTd.)

The details of the subsidiaries, all incorporated in Malaysia, are as follows: (CONTD.)

nAME oF coMPAniEs

PRoPoRtion oF oWnERshiP And votinG PoWER hEld BY

thE GRouP PRinciPAl ActivitiEs

2018%

2017%

One City Development Sdn. Bhd. 100 100 Property development and investment.

Cherish Properties Sdn. Bhd. 100 100 Investment holding.

Ecolake Residence Sdn. Bhd. 100 100 Dormant.

Leisure Event Sdn. Bhd. 100 100 Property investment.

MCT Property Management Sdn. Bhd. 100 100 Property management.

MCT Properties Sdn. Bhd. 100 100 Sales and marketing services for property development.

Premium Cinema Sdn. Bhd. 100 100 Dormant.

Roaring Gain Sdn. Bhd. 100 100 Property investment.

Skypark Fitness Sdn. Bhd. 100 100 Dormant.

Solid Interest Sdn. Bhd. 100 100 Property investment and property development.

Solid Recommendation Sdn. Bhd. 100 100 Property investment and property development.

MCT Store Sdn. Bhd. 100 100 Dormant.

Timeless Hectares Sdn. Bhd. 100 100 Property investment and property development.

One Residence Sdn. Bhd. 100 100 Dormant.

Next Delta Sdn. Bhd. 100 100 Dormant.

SPCJ Green Tech Sdn. Bhd. 100 100 Dormant.

Nexus Advertising Sdn. Bhd. 100 100 Property investment.

subsidiary of one city development sdn. Bhd.

One City Properties Sdn. Bhd. (Note 39) - 100 Property development, investment and management.

subsidiary of cherish Properties sdn. Bhd.

Vista Global Development Sdn. Bhd. 70 70 Property development and investment.

162

19. AvAiL ABLE-FOR-SALE- iNvESTmENTS

20. gOOdWiLL ON CONSOLidATiON

21. iNvENTORiES

thE GRouP

2018RM

2017RM

Quoted investments at fair value - 250,896

thE GRouP

2018RM

2017RM

Goodwill on consolidation 3,272,290 3,272,290

Less: Accumulated impairment losses (3,272,290) (3,272,290)

Net - -

thE GRouP

2018RM

2017RM

Raw materials 366,806 879,183

Finished goods 2,761,592 1,838,849

unsold completed units 1,543,076 -

Net 4,671,474 2,718,032

The cost of inventories recognised as an expense during the year was RM18,871,166 (2017: RM41,251,252).

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

163


22. pROpERT Y dEvELOpmENT COSTS

thE GRouP

2018RM

2017RM

At beginning of year:

Land costs 220,772,416 215,585,369

Development costs 1,388,488,296 1,048,236,479

1,609,260,712 1,263,821,848

Cost incurred during the year:

Land costs - 5,187,047


262,923,023 350,851,965

Costs recognised as expense in profit or loss during the year:

Previous years 1,415,050,809 1,038,009,954

Current year 230,141,632 377,040,855

(1,645,192,441) (1,415,050,809)

Disposal of subsidiaries

Land costs (28,820,351) -

Development costs (290,512,384) -

Cost recognised as expense in profit or loss 319,332,735 -

- -

Reclassification to land held for redevelopment (Note 17) - (5,413,119)

226,991,294 194,209,885

At end of year:

Land costs 44,301,665 95,402,078


226,991,294 194,209,885

During the financial year, interest expense capitalised in property development costs of the Group amounted to RM12,450,529 (2017: RM19,646,172).

164

22. pROpERT Y dEvELOpmENT COSTS (CONTD.)

Certain property development costs amounting to RM141,200,154 (2017: RM179,469,084) have been pledged to financial institution as security for term loan facilities granted to the Group as disclosed in Note 32.

(i) On 23 February 2011, Sky Park Properties Sdn. Bhd. (“SPP”), an indirect subsidiary, entered into a Joint Venture Agreement (“JVA”) with Solid Recommendation Sdn. Bhd. (“SOR”), then a related party, for the development of a parcel of freehold land (“SPP Development”). The salient features of the JVA are as follows:

(a) SOR is entitled to a sum of RM42,694,926 or 10% of the development profit of the SPP Development, whichever is higher. Gross development profit refers to the profit before tax earned by SPP in relation to the SPP Development; and

(b) SPP would be entitled to all remaining profits after tax of the SPP Development, after

deduction of the landowner’s entitlement.

On 30 August 2013, SPP entered into a Supplementary Joint Venture Agreement with SOR to revise the term (i) (a) above to SOR is entitled to a sum of RM42,694,926 plus 10% of the development profit of the SPP Development, whichever is higher. Gross development profit refers to the profit before tax earned by SPP in relation to the SPP Development.

On 15 August 2016, SPP entered into another Supplementary Agreement with SOR to further revise the said term to SOR is entitled to a sum of RM43,160,000.

(ii) On 25 March 2011, Lakefront Residence Sdn. Bhd. (“LFR”), an indirect subsidiary, entered into a Joint Venture Agreement (“JVA”) with Timeless Hectares Sdn Bhd (“TH”), then a related party, for the development of two parcels of freehold land (“LFR Development”). The salient features of the JVA are as follows:

(a) TH is entitled to a sum of RM78,208,437; and

(b) LFR would be entitled to all remaining profits after tax of the LFR Development, after deduction of the landowner’s entitlement.

SOR and TH became wholly-owned indirect subsidiaries in 2015.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

165


23. AmOUNT dUE FROm/TO CONTR ACT CUSTOmERS

24. TR AdE RECEivABLES

thE GRouP

2018RM

2017RM

Contract costs incurred to date 277,530,231 252,252,115

Add: Attributable profit 49,950,088 43,023,850

327,480,319 295,275,965

Progress billings (327,480,319) (295,275,965)

Net - -

Retention sum on contracts, included in trade payables (Note 35) 37,130,341 32,497,561

thE GRouP

2018RM

2017RM

Trade receivables 45,653,664 38,561,562

Retention sum 13,695,423 7,996,255

59,349,087 46,557,817

Less: Allowance for doubtful debts (1,015,622) (5,739,954)

58,333,465 40,817,863

Trade receivables are classified as loans and receivables and are therefore measured at amortised cost.

The credit period granted for the progress billings ranged from 14 to 45 days (2017: 14 to 45 days). Interest is charged on past due billings at interest rate of 8% per annum for commercial properties and 10% per annum for residential properties. Impairment losses are recognised against trade receivables based on estimated irrecoverable amounts determined by reference to past default experience of the counterparty and an analysis of the counterparty’s current financial position.

The credit period granted by the Group for retention sum is 24 months (2017: 24 months).

The Group has trade receivables totalling RM40,037,642 (2017: RM22,421,936) that are past due at the end of the reporting period but against which the Group has not recognised allowance for doubtful debts as the amounts are still considered recoverable. The Group does not hold any collateral over these balances.

Concentration of credit risk with respect to trade receivables in current year is limited due to the Group’s large number of customers, which are widely distributed and covers a broad range of end markets.

166

24. TR AdE RECEivABLES (CONTD.)

25. OTHER RECEivABLES ANd pREpAid EXpENSES

The table below is an analysis of trade receivables at the end of the reporting period:

thE GRouP

2018RM

2017RM

Neither past due nor impaired 4,600,400 10,399,672

Past due but not impaired 40,037,642 22,421,936

Past due and impaired 1,015,622 5,739,954

45,653,664 38,561,562

Aging of past due but not impaired

Past due 1 to 30 days 12,337,386 3,255,496

Past due 31 to 60 days 14,508,538 1,455,702

Past due 61 to 90 days 9,960,281 2,512,682

Past due more than 90 days 3,231,437 15,198,056

40,037,642 22,421,936

Aging of past due and impaired

Past due more than 90 days 1,015,622 5,739,954

Movement in the allowance for doubtful debts


Allowance for doubtful debt no longer required (3,163,777) -

Allowance for the year - 1,641,638

Disposal of subsidiaries (1,560,555) -

At end of year 1,015,622 5,739,954


2018RM

2017RM

2018RM

2017RM

Other receivables 74,198,866 39,238,783 - -

Less: Allowance for doubtful debts (325,047) (90,109) - -

73,873,819 39,148,674 - -

Refundable deposits 15,030,503 9,755,222 - -

Deposit for purchase of land 14,300,000 - - -

Prepaid expenses 6,183,369 4,577,188 5,094 59,148

109,387,691 53,481,084 5,094 59,148

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

167


25. OTHER RECEivABLES ANd pREpAid EXpENSES (CONTD.)


2018RM

2017RM

2018RM

2017RM

Movement in the allowance for doubtful debts

At beginning of year 90,109 - - -

Allowance for the year 325,047 90,109 - -

Disposal of subsidiaries (90,109) - - -

At end of year 325,047 90,109 - -

Included in other receivables of the Group in 2018 is an amount of RM37,470,092 receivable pursuant to the share sale agreement on the disposal of Ecity Hotel Sdn. Bhd.


2018RM

2017RM

2018RM

2017RM

Fixed deposits with licensed banks 44,595,379 45,633,457 - -

Investments in short-term funds 40,220 38,802 40,220 38,802

Deposits with licensed banks 44,635,599 45,672,259 40,220 38,802

Deposits under Housing Development Accounts 130,879,285 16,502,473 - -

Cash on hand and in bank 11,181,529 26,031,572 341,447 67,739

Cash and bank balances 142,060,814 42,534,045 341,447 67,739

Total 186,696,413 88,206,304 381,667 106,541

Less: Fixed deposits pledged with licensed banks (Note 32) (44,138,484) (45,243,240) - -

Fixed deposits with maturity period more than 90 days (401,921) (389,144) - -

Cash and cash equivalents 142,156,008 42,573,920 381,667 106,541

Fixed deposits with licensed banks earn interest at rates ranging from 2.55% to 3.60% (2017: 2.55% to 4.30%) per annum and have maturity periods ranging from 30 to 365 days (2017: 30 to 365 days).

26. AmOUNT OWiNg BY SUBSidiARiES

Amount owing by subsidiaries, which arose mainly from expenses paid on behalf and advances, are unsecured, interest-free and repayable on demand.

27. CASH ANd CASH EqUivALENTS

Cash and cash equivalents included in the statements of cash flows comprise the following:

168

27. CASH ANd CASH EqUivALENTS (CONTD.)

28. SHARE CApiTAL

29. iRREdEEmABLE CONvERTiBLE UNSECUREd LOAN STOCKS (“iCULS”)

thE GRouP And thE coMPAnY

notE

2018 2017

nuMBER oF shAREs RM

nuMBER oF shAREs RM

OF SHARES

issued and fully paid:

At beginning of year 1,334,777,114 1,418,874,068 1,334,777,114 1,334,777,114

Transfer from share premium - - - 84,096,954

Conversion of ICuLS 29 122,218,357 122,218,357 - -

At end of year 1,456,995,471 1,541,092,425 1,334,777,114 1,418,874,068

In accordance with the transitional provisions of the Act, the amount standing to the credit of the Company’s share premium account becomes part of the Company’s share capital in prior year. This change does not have an impact on the number of shares in issue or the relative entitlement of any of the shareholders.

However, the Company has a period of 24 months from the effective date of the Act to use the existing balance credited in the share premium account in a manner as specified by the Act.

The investments in short-term funds are placements made in management funds that invest in fixed deposits and short-term money market instruments offered by banks or financial institutions which allow redemption with notice of one business day.

Deposits held under Housing Development Accounts are maintained in designated Housing Development Accounts pursuant to the Housing Developers (Control and Licensing) Act, 1966 and Housing Development (Housing Development Account) Regulations, 1991 in connection with the Group’s property development projects. The utilisation of these balances are restricted, before completion of the housing development and fulfilling all relevant obligations to the purchasers, the cash could only be withdrawn from such accounts for the purpose of completing the particular projects concerned.

Included in deposits under the Housing Development Accounts is an amount of RM28,210,445 (2017:RM1,207,329) in which the amount is held under a jointly managed account pursuant to the agreement entered into with PR1MA Corporation Malaysia.

thE GRouP

2018RM

2017RM


Conversion of ICuLS (122,218,357) -

At end of year - 122,218,357

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

169


29. iRREdEEmABLE CONvERTiBLE UNSECUREd LOAN STOCKS (“iCULS”) (CONTD.)

In 2015, the Company completed the acquisition of the entire equity interest in MCT Consortium Bhd. via the issuance of 1,032,420,869 New Shares at an issue price of RM1.00 each per share and RM122,218,357 nominal value of 36 months zero coupon ICuLS.

Salient terms of ICuLS are as follows: (i) Conversion rights and rate The ICuLS are convertible into New Shares during the conversion period at a conversion price of RM1.00

for each new ordinary share.

(ii) Conversion period The ICuLS are convertible at any time during the period of 36 months from the date of issue of the ICuLS.

(iii) Coupon rate The ICuLS has a zero coupon rate.

(iv) Redeemability unless the ICuLS are required by law to be redeemed, the ICuLS shall not be redeemable at any time

during their tenure.

(v) Ranking The New Shares issued upon conversion of the ICuLS shall rank pari passu in all respects with the then

existing shares of the Company, save and except that such New Shares shall not be entitled to any rights, dividends, benefits entitlements, allotments and/or any other distributions declared, made or paid to shareholders of the Company, the entitlement date of which is prior to the date of allotment of the New Shares to be issued upon the conversion of the ICuLS.

During the financial year, the ICuLS are converted into new ordinary shares in the Company.

30. RESERvES

Reserves represent the reverse acquisition reserve which arose from the reverse acquisition of the Company by MCT Consortium Bhd. in prior years.

31. RETAiNEd EARNiNgS

At the end of the reporting period, the entire balance of the retained earnings of the Company is available for distribution as dividends under the single-tier income tax system.

170

32. BORROWiNgS


2018RM

2017RM

2018RM

2017RM

current

Secured:

Bank overdraft - 4,059,556 - -

Term loans 28,774,388 33,684,363 - -

Revolving credit 35,000,000 25,000,000 35,000,000 -

63,774,388 62,743,919 35,000,000 -

non-current

Secured:

Term loans 167,508,168 174,874,334 - -

total borrowings

Bank overdraft - 4,059,556 - -

Term loans 196,282,556 208,558,697 - -

Revolving credit 35,000,000 25,000,000 35,000,000 -

231,282,556 237,618,253 35,000,000 -

Borrowings are repayable as follows:


2018RM

2017RM

2018RM

2017RM

Current 63,774,388 62,743,919 35,000,000 -

Non-current:

More than a year and less than 5 years 146,161,577 119,350,952 - -

More than 5 years 21,346,591 55,523,382 - -

231,282,556 237,618,253 35,000,000 -

The borrowings are secured by the following:

• Property, plant and equipment, investment properties, land held for property development and property development costs as disclosed in Notes 15, 16, 17 and 22, respectively;

• A third party memorandum of deposit of fixed deposits belonging to the Group as disclosed in Note 27; and

• A joint and several guarantee by certain Directors of the Company.

The borrowings bear interest at rates ranging from 4.27% to 7.65% (2017: 4.65% to 8.35%) per annum.

Following the non-compliance of certain loan covenant by a subsidiary in 2017, the non-current portion of the term loan of the said subsidiary amounted to RM25 million had been reclassified as current portion as the said subsidiary does not have an unconditional right to defer settlement of the term loan for at least twelve months after the reporting period. The said loan were fully repaid during the current financial year.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

171


33. HiRE-pURCHASE pAYABLES

thE GRouP

2018RM

2017RM

Total outstanding 3,577,209 6,712,996

Less: Interest-in-suspense (168,661) (470,542)

Principal portion 3,408,548 6,242,454

Payable as follows:

Within the next 12 months (shown under current liabilities) 2,161,789 2,616,843

Later than 1 year but not later than 2 years 1,122,727 2,246,532

Later than 2 years and not later than 5 years 124,032 1,379,079

3,408,548 6,242,454

The interest rates implicit in these hire-purchase obligations range from 2.30% to 3.91% (2017: 2.30% to 3.91%) per annum.

The hire-purchase payables are secured by the property, plant and equipment as disclosed in Note 15.

32. BORROWiNgS (CONTD.)

Reconciliation of liabilities arising from financing activities. The table below details changes in the Group’s and the Company’s liabilities arising from financing activities. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the statements of cash flows as cash flows from financing activities.

RM

the Group

At beginning of year 237,618,253

Finance cost 19,983,305

Proceeds 85,040,984

Finance cost paid (21,137,872)

Repayments (90,222,114)

At end of year 231,282,556

the company

At beginning of year -

Proceeds 50,000,000



172

34. dEFERREd TA X (ASSETS)/LiABiLiTiES

Reconciliation of liabilities arising from financing activities. The table below details changes in the Group’s liabilities arising from financing activities. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the statements of cash flows as cash flows from financing activities.

RM

the Group

At beginning of year 6,242,454


Disposal of subsidiaries (148,375)


thE GRouP

2018RM

2017RM


Charged to profit or loss (Note 11) (11,525,790) 209,666

Property, plant and equipment 70,209 209,666

Provisions (5,440,308) -

Property development profits (6,155,691) -

At end of year (7,952,031) 3,573,759

Deferred tax (assets)/liabilities provided in the financial statements are in respect of the tax effects of temporary differences arising from property, plant and equipment, provisions and property development profits is recognised for tax and accounting purposes.

32. BORROWiNgS (CONTD.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

173


35. TR AdE pAYABLES

thE GRouP

2018RM

2017RM

Trade payables 79,511,194 104,698,694

Retention sum (Note 23) 37,130,341 32,497,561

116,641,535 137,196,255

Trade payables comprise amounts outstanding for trade purchases and ongoing costs. The average credit period granted to the Group for trade purchase ranges from 30 to 90 days (2017: 30 to 90 days).

34. dEFERREd TA X (ASSETS)/LiABiLiTiES (CONTD.)

The deferred tax in the financial statements are in respect of the tax effects on the following:

thE GRouP

2018RM

2017RM

deferred tax assets (before offsetting):

Temporary differences arising from:

Property development profits (6,155,691) -

Provisions (5,440,308) -

(11,595,999) -

Offsetting 3,643,968 -

deferred tax assets (after offsetting) (7,952,031) -

deferred tax liabilities (before offsetting):

Temporary differences arising from:

Property, plant and equipment 3,643,968 3,573,759

3,643,968 3,573,759

Offsetting (3,643,968) -

deferred tax liabilities (after offsetting) - 3,573,759

174

36. OTHER pAYABLES ANd ACCRUEd EXpENSES


2018RM

2017RM

2018RM

2017RM

Other payables 151,520,660 37,170,461 177,914 6,042

Accrued expenses 84,503,316 41,102,220 1,035,675 422,485



Deposits received 49,867,468 56,099,878 - -

340,333,348 166,265,241 1,213,589 428,527


2018RM

2017RM

2018RM

2017RM

Movement in provision for rebates

At beginning of year 31,892,682 18,146,755 - -

Addition 7,904,117 13,745,927 - -

Disposal of subsidiaries (8,022,847) - - -

31,773,952 31,892,682 - -


2018RM

2017RM

2018RM

2017RM

Movement in provision for liquidated ascertained damages

At beginning of year - - - -

Addition 22,667,952 - - -

At end of year 22,667,952 - - -

Included in other payables of the Group in 2018 is an amount totaling to RM124,496,789 payable to PR1MA Corporation Malaysia pursuant to the agreement entered.

Included in accrued expenses of the Group in 2018 is an amount of RM57,617,232 relating to accrued construction cost.

Provision for rebates represent rebates granted to the purchasers of the property development of the Group.

Provision for liquidated ascertained damages represent liquidated ascertained damages granted to the purchasers of the property development of the Group in accordance with sales and purchase agreement.

Deposits received represent deposits received from the purchasers of the property development of the Group.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

175


37. F iNANCiAL iNSTRUmENTS

Capital Risk ManagementThe objective of the Group’s capital management is to safeguard the Group’s ability to continue as a going concern while maximising the return to shareholders through the optimisation of debt and equity balance. The Group’s overall strategy remains unchanged since previous financial years.

The capital structure of the Group consists of debts and equity of the Group.

The Group reviews the capital structure on a regular basis. As part of this review, the Group considers the cost of capital and the risks associated with each class of capital.

Gearing Ratio

The gearing ratio at end of the reporting period was as follows:

thE GRouP

2018RM

2017RM

Total debts 234,691,104 243,860,707

Less: Deposits with licensed banks and cash and bank balances (Note 27) (186,696,413) (88,206,304)

Net debts 47,994,691 155,654,403

Equity 863,301,714 784,511,916

Net debt to equity ratio 6% 20%

Debts are defined as borrowings and hire-purchase payables as disclosed in Notes 32 and 33, respectively.

Equity includes share capital, ICuLS, reserves, retained earnings and non-controlling interests.

Significant accounting policiesDetails of the significant accounting policies and methods adopted (including the criteria for recognition, the bases of measurement, and the bases for recognition of income and expenses), for each class of financial assets, financial liabilities and equity instruments are disclosed in Note 3.

176

37. F iNANCiAL iNSTRUmENTS (CONTD.)

Categories of financial instruments


2018RM

2017RM

2018RM

2017RM

Financial assets

Available-for-sale investments - 250,896 - -

Loans and receivables:

Trade receivables 58,333,465 40,817,863 - -

Other receivables and deposits (Note 25) 103,204,322 48,903,896 - -

Amount owing by subsidiaries - - 422,122,314 388,296,514

Deposits with licensed banks 44,635,599 45,672,259 40,220 38,802

Cash and bank balances 142,060,814 42,534,045 341,447 67,739

Financial liabilities

Other financial liabilities:

Borrowings (Note 32) 231,282,556 237,618,253 35,000,000 -

Hire-purchase payables (Note 33) 3,408,548 6,242,454 - -

Trade payables 116,641,535 137,196,255 - -

Other payables and accrued expenses (Note 36) 285,891,444 134,372,559 1,213,589 428,527

Financial Risk Management Objectives and PoliciesThe operations of the Group are subject to a variety of financial risks, including interest rate risk, credit risk and liquidity risk. The Group’s financial risk management principal objective is to minimise the Group’s exposure to risks and/or costs associated with the financing, investing and operating activities.

Interest Rate Risk ManagementThe Group is exposed to interest rate risk through the impact of rate changes on interest bearing borrowings. The interest rates for borrowings of the Group are disclosed in Note 32. Interest rate for hire-purchase payables, which is disclosed in Note 33, is fixed at the inception of the financing arrangement.

The Group’s exposures to interest rates on financial liabilities are detailed below. The sensitivity analysis below have been determined based on the exposure to interest rates for financial liabilities at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liabilities at the end of the reporting period will remain unchanged for the whole year. A 50 basis point increase or decrease in the interest rate is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

177



Interest Rate Risk Management (CONTD.)

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the financial impact of the Group for the year ended 30 June 2018 would be decrease/increase as follows:

thE GRouP

2018RM

2017RM

Interest expense recognised in profit or loss 247,710 236,420

Interest expense capitalised in property development costs 908,703 931,373

Credit Risk ManagementCredit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s exposure to credit risk in relation to its trade and other receivables and intercompany balances, should all its customers fail to perform their obligations as at 30 June 2018, is the carrying amount of these receivables as disclosed in statements of financial position.

The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics, other than as disclosed in Note 24. The Group defines counterparties having similar characteristics if they are related entities.

Liquidity Risk Managementultimate responsibility for liquidity risk management rests with management of the Group, which has established an appropriate liquidity risk management framework for the management of the Group’s short-term, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following tables detail the liquidity analysis for its financial liabilities based on the contractual maturity of these financial instruments. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest contractual date on which the Group can be required to pay.

178


Liquidity Risk Management (CONTD.)

lEss thAn 1 YEAR

RM

1 to 5 YEARs

RM

MoRE thAn 5 YEARs

RMtotAl

RM

the Group30 june 2018Financial liabilities

Non-interest bearing:

Trade payables 116,641,535 - - 116,641,535

Other payables and accrued expenses 285,891,444 - - 285,891,444

402,532,979 - - 402,532,979

Interest bearing:

Borrowings 73,468,056 138,269,264 85,692,733 297,430,053

Hire-purchase payables 2,245,370 1,331,839 - 3,577,209

75,713,426 139,601,103 85,692,733 301,007,262

478,246,405 139,601,103 85,692,733 703,540,241

the company30 june 2018Financial liabilities



the Group30 june 2017Financial liabilities


Trade payables 137,196,255 - - 137,196,255


271,568,814 - - 271,568,814

Interest bearing:

Borrowings 56,258,986 166,996,100 81,487,521 304,742,607

Hire-purchase payables 2,814,037 3,898,959 - 6,712,996

59,073,023 170,895,059 81,487,521 311,455,603

330,641,837 170,895,059 81,487,521 583,024,417

the company30 june 2017Financial liabilities


Other payables and accrued expenses 428,527 - - 428,527

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

179



Cash Flow Risk ManagementThe Group reviews its cash flow position regularly to manage its exposure to fluctuations in future cash flows associated with its monetary financial instruments.

Fair ValuesThe carrying amounts of the financial instruments approximate their fair values as these financial assets and financial liabilities have short-term maturity or are repayable on demand except for the following: The fair value of long-term financial liabilities are determined by the present value of future cash flow estimated and discounted using the market incremental lending rate for similar instruments at the end of the reporting period. There is no material difference between the fair values and carrying values of these liabilities as at the end of the reporting period.

Fair Value Hierarchy The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

thE GRouP

lEvEl 1RM

lEvEl 2RM

lEvEl 3RM

totAl RM

30 june 2017Financial Assets

Available-for-sale investments 250,896 - - 250,896

180

38. S igNiFiCANT REL ATEd pART Y TR ANSACTiONS

During the financial year, the significant related party transactions entered by the Group, which were determined based on negotiations agreed between the parties, are as follows:

thE GRouP

2018RM

2017RM

Rental of premises paid/payable to related parties 2,082,328 2,110,872

utilities fees received / receivable from related parties 1,349,441 -

Rental of premises received/receivable from related parties 778,172 959,651

Property management fees received / receivable from related parties 257,500 -

Renovation works received/receivable from related parties 6,798 406,987

Sales of motor vehicle to persons related to related parties 53,462 148,000

Provision of training services paid/payable to a related party - 5,000

Related parties refer to companies in which certain Directors of the Company have interests.

Compensation of key management personnelKey management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group and of the Company either directly or indirectly. The key management personnel include Directors of the Company, and certain members of senior management of the Group.

The remuneration of key management personnel during the financial year are as follows:


2018RM

2017RM

2018RM

2017RM

Salaries and other remunerations 8,695,765 11,427,462 526,329 422,378

Defined contribution plans 825,197 1,246,446 - -

Benefit-in-kind 121,664 408,108 34,898 12,854

9,642,626 13,082,016 561,227 435,232

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

181


39. diSpOSAL OF SUBSidiARiES i) On 31 January 2018, a wholly-owned subsidiary of the Company, One City Development Sdn. Bhd.

(“OCD”) completed its disposal of its 100% equity interest in One City Properties Sdn. Bhd. (“OCP”) comprising 3.5 million ordinary shares in OCP for cash consideration for RM7.5 million. The said disposal gave rise to a net gain RM17.8 million which was recognised in the profit or loss in the Group.

The fair values of identifiable assets and liabilities disposed for OCP at the date of disposal are as follows:

RM

Property, plant and equipment (Note 15) 115,374,387

Available-for-sale-investments 254,203

Inventories 2,614,283

Trade receivables 1,150,258

Other receivables and prepaid expenses 1,826,288

Tax recoverable 11,208,333

Cash and bank balances 110,882

Deposits with licensed banks 2,680,374

Hire-purchase payables (99,648)

Progress billings (442,260)

Trade payables (144,947,684)

Other payables and accrued expenses (113,995)

Net liabilities disposed (10,385,079)

Cash consideration received on disposal of subsidiary 7,500,000

Gain on disposal (17,885,579)

Net cash inflow from disposal:

Total cash consideration 7,500,000

Cash and cash equivalents of subsidiary disposed (2,790,256)

Cash inflow on disposal, net of cash disposed 4,709,744

182

39. diSpOSAL OF SUBSidiARiES (CONTD.)

ii) On 15 June 2018, a wholly-owned subsidiary of the Company, MCT Constortium Bhd. (“MCTCB”)

completed its disposal of its 100% equity interest in Ecity Hotel Sdn. Bhd. (“ECH”) comprising 6.0 million ordinary shares in ECH for cash consideration for RM1.The said disposal gave rise to a net gain RM21.6 million which was recognised in the profit or loss in the Group.

The fair values of identifiable assets and liabilities disposed for ECH at the date of disposal are as follows:

40. COmmiTmENTS At the end of the reporting period, the Group has the following commitments:

(a) Commitment under a Joint Development Agreement

RM

Property, plant and equipment (Note 15) 29,046,563

Inventories 83,878

Trade receivables 892,894

Other receivables and prepaid expenses 1,808,573

Tax recoverable 40,664

Cash and bank balances 43,379

Hire-purchase payables (48,727)

Trade payables (17,148)

Other payables and accrued expenses (53,407,844)

Net liabilities disposed (21,557,768)

Cash consideration received on disposal of subsidiary 1

Gain on disposal (21,557,767)

Net cash inflow from disposal

Total cash consideration 1

Cash and cash equivalents of subsidiary disposed (43,379)

Cash outflow on disposal, net of cash disposed (43,378)

thE GRouP

2018RM

2017RM

Commitment under a Joint Development Agreement 65,000,000 65,000,000

On 16 January 2015, Premium Cinema Sdn. Bhd. (“PCSB”), a wholly-owned subsidiary of the Company, entered into a Joint Development Agreement (“JDA”) with My Success Property Sdn. Bhd. (“Landowner”), for the development of a parcel of leasehold land (“Development”). The salient features of the JDA are as follows:

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

183


(c) Purchase of land and property, plant and equipment

thE GRouP

2018RM

2017RM

Approved and contracted for:

Purchase of land for development 128,700,000 -

Purchase of property, plant and equipment - 526,842

FutuRE MiniMuM lEAsE PAYMEnts

thE GRouP

2018RM

2017RM

Rental commitments from leaseback arrangement:

Less than 1 year 4,861,644 5,028,621

More than 1 year and less than 2 years 4,861,644 6,495,145

More than 2 years and less than 5 years 5,169,144 7,272,818

14,892,432 18,796,584

Operating lease commitments:

Less than 1 year 1,964,367 3,421,446

More than 1 year and less than 2 years - 2,623,505

1,964,367 6,044,951

16,856,799 24,841,535

40. COmmiTmENTS (CONTD.)

(a) Commitment under a Joint Development Agreement (CONTD.)

(a) The Landowner is entitled to a cash consideration of RM25 million;

(b) PCSB is aware that the Landowner has taken a facility of RM40 million (“MBSB Facility”) from Malaysia Building Society Berhad (“MBSB”) part finance the purchase of the land. As part of the Landowner’s entitlement under the JDA, the Company shall be liable to repay the MBSB Facility (including the Murabahah Profit) to MBSB in accordance with the terms and conditions as contained in the Security Documents signed between the Landowner and MBSB in respect of the MBSB facility; and

(c) PCSB would be entitled to all remaining profit after tax of the Development, after deduction of the Landowner’s entitlement above.

For the purpose of giving effect to this JDA, PCSB with the Landowner’s assistance must obtain all the requisite approvals for the Development. As at 30 June 2018,the requisite approvals have not been obtained.

(b) Rental and Operating Commitment

184

41. CONTiNgENT LiABiLiTiES (a) Performance bond

(b) Goods and Services Tax (“GST”)

In 2017, Lakefront Residence Sdn. Bhd. (“LRSB”), a wholly-owned subsidiary of the Company, received a notification from Royal Malaysia Customs Department (“RMCD”) that the relief supply certificate pursuant to the construction service provided by LRSB to PR1MA Corporation Malaysia (“PR1MA”) has been revoked. LRSB is required to charge RM21 million Goods and Services Output Tax to PR1MA and subsequently remit the said amount to RMCD.

Subsequent to the end of the financial period, on 31 July 2018, RMCD via its letter, notified that pursuant to the construction service provided by LRSB to PR1MA is in relation to exempt supply goods, superseding its notification in 2017 and therefore, LRSB is not required to charge any Goods and Services Output Tax. Accordingly, this matter has concluded and LRSB is currently in the process of obtaining refund from RMCD for payments made.

42. mATERiAL LiTigATiONS

There was a suit filed on 4 December 1996 by Chellappa A/L Kalimuthu (suing as a public officer of Sri Maha Mariamman Temple, Hicom, Shah Alam, Selangor pursuant to Section 9(c) of the Society Act 1996) on behalf of a society (“Society”) (“Plaintiff”). The suit is relating to a claim against three parties, namely Sime uEP Properties Bhd, Pengarah Perancang Bandar dan Desa Negeri Selangor Darul Ehsan, and Kerajaan Negeri Selangor Darul Ehsan in relation to the portion of the land owned by One City Development Sdn. Bhd. (“OCD”), an indirect wholly-owned subsidiary of the Company and held under Geran 284076, Lot 81278 Mukim Damansara, Daerah Petaling, Negeri Selangor (“Master Title”) on which an Indian Temple, Kuil Sri Maha Mariamman (“Existing Temple”) was erected (“Land Portion”). The Plaintiff, had then on 19 February 2010, filed an application to add OCD, as the fourth defendant, being the registered proprietor of the Master Title and such application was allowed on 29 March 2010.

There is also a court case involving the Plaintiff and one other group which is led by Nagaraju A/L Merganathan and some of its committee members in Suit No. 22 - 491-2001 in the High Court in Shah Alam claiming for the control and management of the Society and the Existing Temple.

The Plaintiff is claiming, among other reliefs, an order that the Land Portion (measuring approximately one acre), be alienated to the Plaintiff.

On 11 March 2014, the parties have recorded a consent judgment in relation to the matter (“Consent Judgment”) and the sealed Consent Judgment has been extracted from the High Court. Accordingly, the matter has been amicably settled subsequent to the completion of the fulfillment of the terms stated in the Consent Judgment by the parties involved, which include, inter-alia, the following:

(a) OCD has completed the construction of the new temple and OCD has deposited a sum of RM1.5 million with OCD’s solicitors as stakeholders; and

thE GRouP

2018RM

2017RM

Performance bond provided in favour of third parties pursuant to the construction and/or development projects of the Group 53,062,572 49,609,322

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

185


42. mATERiAL LiTigATiONS (CONTD.)

(b) The parties occupying the Existing Temple have not delivered the vacant possession of the Land Portion to OCD. OCD has instructed its solicitors to commence legal proceedings to recover the possession of the site occupied by the Existing Temple.

A writ of possession (“Writ”) vide “Permohonan Perlaksanaan No. 37WP-44-12/2016” was issued by the High Court on 22 December 2015 and subsequently served by the Court Bailiff to the Existing Temple on 30 May 2016. On 10 June 2016, OCD’s solicitors applied to court to extend the Writ. The Court has granted its Order on 22 December 2016. The Writ and the Order for extension of time has been served by the Court Bailiff to the Existing Temple on 18 May 2017.

The parties occupying the Existing Temple have failed to deliver the vacant possession of the Land to OCD. The Writ expired on 21 June 2017. OCD’s solicitors had applied for a fresh Writ on 12 October 2017 and judgement was obtained on 14 November 2017. The validity of the Writ is one year from 5 December 2017 until 4 December 2018. OCD is in the process of executing the Writ.

The Directors are of the opinion that in any event, the claim to the Land Portion will not unduly affect the ongoing construction development on the said land as the Existing Temple is not sited on the relevant part of the land which has been approved for development.

43. SEgmENTAL REpORTiNg

Segment information is presented in respect of the Group’s business segments, which reflect the Group’s internal reporting structure that are regularly reviewed by the Group’s chief operating decision maker for the purposes of allocating resources to the segment and assessing its performance. For management purposes, the Group is organised into the following operating divisions:

(i) Property development - Property development of residential and commercial properties. (ii) Construction activities - Construction, providing civil and mechanical engineering services. (iii) Investment Holding - Investment holding. (iv) Complimentary Business - Operating in hoteling, fitness centre and cinema cum seminar facility,

and leasing of properties. (v) Others - Property management and utility services provider. No information on geographical areas is presented as the Group operates mainly in Malaysia.

186

30 ju

nE

2018

PR

oP

ERt

Y

dEv

Elo

PM

Ent

RM

co

nst

Ru

ct

ion

A

ct

ivit

iEs

RM

inv

Est

MEn

t

ho

ldin

GR

M

co

MPl

iMEn

tAR

Y

Bu

sin

Ess

RM

ot

hER

sR

Mto

tAl

RM

EliM

inA

tio

nR

M

th

E G

Ro

uP

R

M

REv

Enu

E

Exte

rnal

reve

nue

422,

038

,775

417,

528

-15

4,78

013

,814

,665

436,

425,

748

-43

6,42

5,74

8

Inte

r-se

gmen

t re

venu

e-

279,

328,

369

-55

,196

,660

4,17

5,0

6533

8,70

0,0

94(3

38,7

00,

094

) -

Tota

l rev

enue

422,

038

,775

279,

745,

897

-55

,351

,440

17,9

89,7

3077

5,12

5,84

2(3

38,7

00,

094

) 43

6,42

5,74

8

REs

ult

s

Ope

rati

ng (l

oss)

/pro

fit(1

,352

,880

)26

,908

,984

(8,10

2,58

7)2,

029

,064

757,

487

20,2

40,0

6853

,80

0,27

074

,040

,338

Inte

rest

inco

me

1,33

4,0

8269

,436

26,3

4225

6,22

228

1,198

1,96

7,28

0-

1,96

7,28

0

Oth

er in

com

e54

,668

,179

565,

462

54

900,

00

83,

302,

844

59,4

36,5

47(1

6,66

7,55

1)42

,768

,996

Fina

nce

cost

s(3

43,9

38)

(348

,532

)(4

09,

565)

(3

66,2

89)

(1,0

74,8

02)

(2

,543

,126)

-(2

,543

,126)

PR

oFi

t/(l

oss

) B

EFo

RE

tAx

54,3

05,

443

27,1

95,3

50(8

,485

,756

)2,

819,

00

53,

266,

727

79,10

0,76

937

,132

,719

116,

233,

488

Inco

me

tax

expe

nse

(25,

436,

703)

(6,9

91,3

10)

-(6

82,2

56)

(122

,122)

(33,

232,

391)

3,19

0,44

8(3

0,04

1,943

)

(lo

ss)/

PR

oFi

t F

Ro

M

d

isc

on

tin

uEd

oP

ERA

tio

ns

(10,

869,

829)

--

3,4

68,0

82-

(7,4

01,

747)

-(7

,40

1,74

7)

PR

oFi

t/(l

oss

) AFt

ER t

Ax

17,9

98,9

1120

,20

4,0

40(8

,485

,756

)5,

604,

831

3,14

4,60

538

,466

,631

40,3

23,16

778

,789

,798

30 ju

nE

2018

PR

oP

ERt

Y

dEv

Elo

PM

Ent

RM

co

nst

Ru

ct

ion

A

ct

ivit

iEs

RM

inv

Est

MEn

t

ho

ldin

GR

M

co

MPl

iMEn

tAR

Y

Bu

sin

Ess

RM

ot

hER

sR

Mto

tAl

RM

Ass

Ets

An

d l

iAB

ilit

iEs

Segm

ent

asse

ts1,

836,

949,

323

629,

538,

424

1,71

0,64

9,98

820

0,57

0,82

399

,182

,831

4,47

6,89

1,38

9

Less

: Elim

inat

ion

(581

,825

,615

)(5

95,0

03,7

93)

(1,6

68,7

46,6

68)

(94,

004,

893)

(9,8

94,8

75)

(2,9

49,4

75,8

44)

1,25

5,12

3,70

834

,534

,631

41,9

03,

320

106,

565,

930

89,2

87,9

561,

527,

415,

545

Tax

reco

vera

ble

and

d

efer

red

tax

asse

ts12

,883

,20

715

,653

,021

1,32

822

0,19

811

9,0

6328

,876

,817

Less

: Elim

inat

ion

(3,2

36,0

80)

(4,3

46,7

63)

6,28

1,0

00

--

(1,3

01,

843)

9,64

7,12

711

,30

6,25

86,

282,

328

220,

198

119,

063

27,5

74,9

74

Tota

l Ass

ets

1,26

4,77

0,83

546

,200

,889

48,18

5,64

810

6,78

6,12

889

,40

7,0

191,

554,

990,

519

43. S

Egm

ENTA

L R

EpO

RTiN

g (

CO

NT

d.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

187

30 ju

nE

2018

PR

oP

ERt

Y

dEv

Elo

PM

Ent

RM

co

nst

Ru

ct

ion

A

ct

ivit

iEs

RM

inv

Est

MEn

t

ho

ldin

GR

M

co

MPl

iMEn

tAR

Y

Bu

sin

Ess

RM

ot

hER

sR

Mto

tAl

RM

Segm

ent

liabi

litie

s1,

543,

241,

771

556,

917,

030

140,

259,

529

117,

662,

553

113,

949,

838

2,47

2,0

30,7

21

Less

: Elim

inat

ion

(1,2

84,2

25,8

38)

(253

,430

,937

)(5

3,97

4,29

5)(9

4,36

1,96

2)(9

4,37

1,70

2)(1

,780

,364

,734

)

259,

015

,933

303,

486,

093

86,2

85,2

3423

,30

0,59

119

,578

,136

691,

665,

987

Tax

and

defe

rred

tax

liab

iliti

es15

,417

--

7,40

1-

22,8

18

Add

: Elim

inat

ion

--

--

--

15,4

17-

-7,

401

-22

,818

Tota

l Lia

bilit

ies

259,

031

,350

303,

486,

093

86,2

85,2

3423

,30

7,99

219

,578

,136

691,

688,

805

Oth

er s

egm

ent i

nfor

mat

ion

Cap

ital

exp

endi

ture

:

In

vest

men

t pr

oper

ties

56,13

3,20

0-

--

-56

,133,

200

P

rope

rty,

pla

nt a

nd e

quip

men

t5,

093,

206

726,

346

-85

9,94

03,

687,

335

10,3

66,8

27

L

and

held

for p

rope

rty

deve

lopm

ent

1,58

3,17

2-

--

-1,

583,

172

62,8

09,

578

726,

346

-85

9,94

03,

687,

335

68,0

83,19

9

Dep

reci

atio

n of

:

P

rope

rty,

pla

nt a

nd e

quip

men

t1,

620,

107

5,69

6,14

7-

3,49

8,93

734

2,30

811

,157

,499

In

vest

men

t pr

oper

ties

645,

977

--

--

645,

977

2,26

6,0

845,

696,

147

-3,

498,

937

342,

308

11,8

03,

476

Gai

n on

dis

posa

l of i

nves

tmen

t in

sub

sidi

arie

s(3

9,44

3,34

6)-

--

-(3

9,44

3,34

6)

Prov

isio

n fo

r reb

ates

7,90

4,11

8-

--

-7,

904,

118

Prov

isio

n fo

r liq

uida

ted

and

asce

rtai

ned

dam

ages

24,0

44,9

40-

--

-24

,044

,940


43. S

Egm

ENTA

L R

EpO

RTiN

g (

CO

NT

d.)

188

30 ju

nE

2017

PR

oP

ERt

Y

dEv

Elo

PM

Ent

RM

co

nst

Ru

ct

ion

A

ct

ivit

iEs

RM

inv

Est

MEn

t

ho

ldin

GR

M

co

MPl

iMEn

tAR

Y

Bu

sin

Ess

RM

ot

hER

sR

Mto

tAl

RM

EliM

inA

tio

nR

M

th

E G

Ro

uP

R

M

REv

Enu

E

Exte

rnal

reve

nue

57

7,55

7,43

861

5,43

7-

250,

930

11,2

83,8

6358

9,70

7,66

8-

589,

707,

668

Inte

r-se

gmen

t re

venu

e-

221,

966,

826

-74

,757

,269

5,80

4,88

930

2,52

8,98

4(3

02,

528,

984)

-

Tota

l rev

enue

577,

557,

438

222,

582,

263

-75

,00

8,19

917

,088

,752

892,

236,

652

(30

2,52

8,98

4)58

9,70

7,66

8

REs

ult

s

Ope

rati

ng p

rofit

/(lo

ss)

58,2

66,3

09

30,7

69,6

21(5

,80

5,11

8)(9

58,2

38)

(15,

702,

260

)66

,570

,314

27,7

21,3

09

94,2

91,6

23

Inte

rest

inco

me

1,71

0,38

070

,834

8820

2,86

726

9,71

22,

253,

881

-2,

253,

881

Oth

er in

com

e15

,977

,213

20,7

212,

467

1,21

0,3

4914

0,58

217

,351

,332

(868

,514

)16

,482

,818

Fina

nce

cost

s(8

29,5

00

)(4

50,3

09)

-(3

02,

323)

(1,18

3,49

3)(2

,765

,625

)-

(2,7

65,6

25)

PR

oFi

t/(l

oss

) B

EFo

RE

tAx

75,12

4,40

230

,410

,867

(5,8

02,

563)

152,

655

(16,

475,

459)

83,4

09,

902

26,8

52,7

9511

0,2

62,6

97

Inco

me

tax

(exp

ense

)/cr

edit

(26,

961,5

80)

1,96

3,62

6-

(430

,70

4)(9

8,14

4)(2

5,52

6,80

2)(4

,492

,290

)(3

0,0

19,0

92)

PR

oFi

t/(l

oss

) AFt

ER t

Ax

48,16

2,82

232

,374

,793

(5,8

02,

563)

(278

,049

)(1

6,57

3,60

3)57

,883

,100

22,3

60,5

05

80,2

43,6

05

30 ju

nE

2017

PR

oP

ERt

Y

dEv

Elo

PM

Ent

RM

co

nst

Ru

ct

ion

A

ct

ivit

iEs

RM

inv

Est

MEn

t

ho

ldin

GR

M

co

MPl

iMEn

tAR

Y

Bu

sin

Ess

RM

ot

hER

sR

Mto

tAl

RM

Ass

Ets

An

d l

iAB

ilit

iEs

Segm

ent

asse

ts1,

530,

177,

679

516,

685,

293

1,6

41,2

02,

244

252,

417,

475

87,

678,

812

4,0

28,16

1,50

3

Less

: Elim

inat

ion

(430

,20

4,79

3)(4

73,9

81,0

83)

(1,6

40,9

57,4

75)

(170

,334

,126)

(5,3

19,19

7)(2

,720

,796

,674

)

1,0

99,9

72,8

8642

,70

4,21

024

4,76

982

,083

,349

82,3

59,6

151,

307,

364,

829

Tax

reco

vera

ble

and

d

efer

red

tax

asse

ts21

,678

,063

11

,697

,227

9,87

3 55

1,58

621

6,44

534

,153,

194

Less

: Elim

inat

ion

-(9

18,5

31)

--

-(9

18,5

31)

21,6

78,0

6310

,778

,696

9,87

3 55

1,58

621

6,44

533

,234

,663

Tota

l Ass

ets

1,121

,650

,949

53,4

82,9

06

254,

642

82,6

34,9

3582

,576

,060

1,34

0,59

9,49

2

43. S

Egm

ENTA

L R

EpO

RTiN

g (

CO

NT

d.)

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

189

30 ju

nE

2017

PR

oP

ERt

Y

dEv

Elo

PM

Ent

RM

co

nst

Ru

ct

ion

A

ct

ivit

iEs

RM

inv

Est

MEn

t

ho

ldin

GR

M

co

MPl

iMEn

tAR

Y

Bu

sin

Ess

RM

ot

hER

sR

Mto

tAl

RM

Segm

ent

liabi

litie

s1,

062

,040

,847

46

0,31

2,14

7 62

,324

,695

246,

108,

239

105,

471,

360

1,

936,

257,

288

Less

: Elim

inat

ion

(967

,971

,843

)(2

17,8

22,7

47)

(61,

858,

490

)(5

7,43

3,20

9)(8

3,84

8,79

6)(1

,388

,935

,085

)

94,0

69,0

04

242,

489,

400

466,

205

188,

675,

030

21,6

22,5

6454

7,32

2,20

3

Tax

and

defe

rred

tax

liab

iliti

es5,

191,

614

--

--

5,19

1,61

4

Add

: Elim

inat

ion

-3,

573,

759

--

-3,

573,

759

5,19

1,61

43,

573,

759

--

-8,

765,

373

Tota

l Lia

bilit

ies

99,2

60,6

1824

6,0

63,15

946

6,20

518

8,67

5,0

3021

,622

,564

556,

087

,576

Oth

er s

egm

ent i

nfor

mat

ion

Cap

ital

exp

endi

ture

:

In

vest

men

t pr

oper

ties

58,6

84,6

87-

--

-58

,684

,687

P

rope

rty,

pla

nt a

nd e

quip

men

t1,

522,

307

1,75

5,14

5-

9,30

9,66

620

,755

,290

33,3

42,4

08

L

and

held

for p

rope

rty

deve

lopm

ent

253,

718

--

--

253,

718

60,4

60,7

121,

755,

145

-9,

309,

666

20,7

55,2

9092

,280

,813

Dep

reci

atio

n of

:

P

rope

rty,

pla

nt a

nd e

quip

men

t50

4,42

36,

433,

795

-2,

772,

991

2,28

7,38

811

,998

,597

In

vest

men

t pr

oper

ties

645,

977

--

--

645,

977

1,150

,40

06,

433,

795

-2,

772,

991

2,28

7,38

812

,644

,574

Prov

isio

n fo

r reb

ates

13,7

45,9

27-

--

-13

,745

,927

Impa

irm

ent

loss

of p

rope

rty,

pla

nt a

nd e

quip

men

t-

--

-13

,615

,50

613

,615

,50

6

Gra

nt in

com

e re

ceiv

ed fr

om G

over

nmen

t of

Mal

aysi

a14

,90

6,25

7-

--

-14

,906

,257


43. S

Egm

ENTA

L R

EpO

RTiN

g (

CO

NT

d.)

190

Statement By Directors The Directors of MCT BERHAD state that, in their opinion, the accompanying financial statements are drawn up in accordance with 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 30 June 2018 and of the financial performance and the cash flows of the Group and of the Company for the year ended on that date.

Signed in accordance witha resolution of the Directors,

___________________________________ ___________________________________L AO CHOK KEANg JOSE JUAN z. JUgO

Subang Jaya,15 October 2018

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

Fin

an

Cia

l ST

aT

eM

en

TS

191

Declaration By The OfficerPrimarily Responsible For The Financial Management Of The Company

I, MARIA ROCHELLE S. DIAZ, the officer primarily responsible for the financial management of MCT BERHAD, do solemnly and sincerely declare that the accompanying financial statements 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.

Signed in accordance witha resolution of the Directors,

___________________________________mARiA ROCHELLE S. diAz

Subscribed and solemnly declared by the abovenamed MARIA ROCHELLE S. DIAZ at SUBANG jAYA in the state of SELANGOR on this 15th day of October, 2018.

Before me,

___________________________________COmmiSSiONER FOR OATHS

192

lIsT OF PROPERTIEs HElD

coMPAnY / AddREss

lAnd AREA

(AcREs) ExistinG usE tEnuRE

APPRoxiMAtE AGE oF thE

BuildinG

REMAininG usEFul liFE

oF BuildinG

nEt BooK vAluE As At

30.06.2018

YEAR oF AcQuisition/

YEAR oF coMPlEtion*

tiMElEss hEctAREs sdn. Bhd.

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

23.10 Lakefront (Land under

Development)

Freehold NA NA 34,506,960 25.03.2011



Development)

Freehold NA NA 25.03.2011



Development)

Freehold NA NA 24,845,000 25.03.2011



Development)

Freehold NA NA 25.03.2011

solid REcoMMEndAtion sdn. Bhd.

Lot 47336 Mukim Dengkil, Daerah Sepang, Selangor Darul Ehsan

11.13 Skypark @ Cyberjaya

(Land under development)

Freehold NA NA 43,160,000 22.09.2010

solid BEnEFit sdn. Bhd.


73.83 Cybersouth (Land held for development)

Leasehold expiring

01.02.2104

NA 86 5,259,154 2008



Leasehold expiring

01.02.2104

NA 86 8,866,407 2008



Leasehold expiring

01.02.2104

NA 86 3,882,214 2008



Leasehold expiring

01.02.2104

NA 86 3,465,500 2008



Leasehold expiring

20.07.2104

NA 86 8,226,733 2009

onE citY dEvEloPMEnt sdn. Bhd.

Lot 81278 Mukim Damansara, Daerah Petaling, Selangor Darul Ehsan

14.35 One City Phase 3

(Land held for development)

Freehold NA NA 10,907,612 1998

Lot 91374 Mukim Damansara, Daerah Petaling, Selangor Darul Ehsan

2.90 One City Phase 3

(Land held for development)

Freehold NA NA 2,592,388 2012

vistA GloBAl dEvEloPMEnt sdn. Bhd.

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

7.20 Cyber ONE (Land held for

investment)

Freehold NA NA 31,371,912 20.09.2013

List of Properties

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

oT

he

r I

nFo

rM

aT

Ion

193

coMPAnY / AddREss

lAndAREA

(AcREs) ExistinG usE tEnuRE

APPRoxiMAtE AGE oF thE

BuildinG

REMAininG usEFul liFE

oF BuildinG

nEt BooK vAluE As At

30.06.2018

YEAR oF AcQuisition/

YEAR oF coMPlEtion*

nExus AdvERtisinG sdn. Bhd.

Lot PT9303, Mukim Damansara, Daerah Petaling, Selangor Darul Ehsan

2.91 Land held for investment

Leasehold expiring

21.04.2086

NA NA 5,481,911 11.06.2012

Lot 3675, Mukim Damansara, Daerah Petaling, Selangor Darul Ehsan


Leasehold 10.08.2086

NA NA 11.06.2012

undERsEA citY sdn. Bhd.

Lot 589, GM202, Mukim Damansara, Kg Bukit Lanchong, 47650 Daerah Petaling


Freehold NA NA 6,450,000 15.12.2015

thE PlAcE PRoPERtiEs sdn. Bhd.

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

458,454 Basement carpark and

retail lots

Freehold 3 years NA 30,054,232 31.03.2015*

Sky Park @ One City, Jalan uSJ 25/1, 47650 Subang Jaya, Selangor

96,810 Retail lots Freehold 5 years NA 48,149,334 16.12.2013*

List of Properties C O N T d .

lIsT OF PROPERTIEs HElD C O N T d .

194

SHARE CApiTAL

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

diSTRiBUTiON OF SHAREHOLdiNgS

sizE oF shAREholdinG no. oF holdERs % oF holdERs no. oF holdinGs % oF issuEd shARE cAPitAl

Less than 100 62 6.38 1,607 0.00

100 to 1,000 421 43.31 112,987 0.01

1,001 to 10,000 313 32.20 1,893,059 0.13

10,001 to 100,000 138 14.20 3,928,391 0.27

100,001 to less than 5% of issued shares 33 3.40 266,737,222 18.30

5% and above of issued shares 5 0.51 1,184,322,205 81.29

Total 972 100.00 1,456,995,471 100.00

LiST OF THiRT Y (30) L ARgEST SECURiTiES ACCOUNT HOLdERS AS pER THE RECORd OF dEpOSiTORS

no. nAME oF shAREholdER no. oF shAREs hEld % oF issuEd shARE cAPitAl

1 Regent Wise Investments Limited 439,809,059 30.19

2 Regent Wise Investments Limited 295,277,782 20.27

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

230,115,574 15.79

4 Lembaga Tabung Haji 133,480,000 9.16

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

85,639,790 5.88

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

66,700,000 4.58

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

48,536,800 3.33

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

42,776,425 2.94

9 Kumpulan Wang Persaraan (Diperbadankan) 36,934,700 2.53

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

24,949,000 1.71

11 Dato’ Goh Meng Keong 19,204,422 1.32

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

7,125,000 0.49

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

7,125,000 0.49

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

3,701,000 0.25

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

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

1,214,700 0.08

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

1,208,900 0.08

Analysis of ShareholdingsAs at 28 September 2018

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

oT

he

r I

nFo

rM

aT

Ion

195

no. nAME oF shAREholdER no. oF shAREs hEld % oF issuEd shARE cAPitAl

18 Tan Pei Geok 1,000,000 0.07

19 Toh Chee Ming 390,000 0.03

20 Datuk Lim Kok Boon 372,625 0.03

21 Yeoh Soo Ann 349,550 0.02

22 Wang Hayley 310,000 0.02

23 Lim Chong Hoe 300,000 0.02

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

25 Khong & Jaafar (Corporate Services) Sdn Bhd 250,000 0.02

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

250,000 0.02

27 Dato’ Jessie Yow Yoon Khoon 243,000 0.02

28 Beh Eng Par 232,000 0.02

29 Maybank Securities Nominees (Tempatan) Sdn Bhd – Pledged securities account for Wan Rozita Binti Wan Harun (Margin)

213,800 0.01

30 DB (Malaysia) Nominee (Tempatan) Sendirian Berhad - Deutsche Trustees Malaysia Berhad for AIA PAM – Islamic Moderate Fund

200,000 0.01

1,449,721,127 99.50

SUBSTANTiAL SHAREHOLdERS AS pER THE REgiSTER OF SUBSTANTiAL SHAREHOLdERS

no. nAME oF suBstAntiAl shAREholdERs no. oF shAREs hEld

diREct intEREst % indiREct intEREst %

1 Regent Wise Investments Limited 965,202,415 66.25 - -

2 Ayala Land, Inc. (1) - - 965,202,415 66.25

3 Tan Sri Dato’ Sri Goh Ming Choon 152,339,790 10.46 - -

4 Lembaga Tabung Haji 133,480,000 9.16 - -

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

diRECTORS’ SHAREHOLdiNgS AS pER THE REgiSTER OF diRECTORS’ SHAREHOLdiNgS

no. nAME oF diREctoRsdiREct intEREst indiREct intEREst

no. oF shAREs % oF shAREs no. oF shAREs % oF shAREs

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

- - - -

2 Tan Sri Dato’ Sri Goh Ming Choon (1) 152,339,790 10.46 - -

3 Tan Sri Dato’ Hj. Abd Karim Bin Shaikh Munisar

- - - -

4 Anna Maria Margarita Bautista Dy - - - -

5 Bernard Vincent Olmedo Dy - - - -

6 Jose Juan Z. Jugo - - - -

7 Lao Chok Keang - - - -

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

- - - -

Note: (1) 66,700,000 shares held through CIMSEC Nominees (Tempatan) Sdn Bhd - CIMB Bank (PBCL – 0G0264) and 85,639,790 shares held through CIMSEC

Nominees (Tempatan) Sdn Bhd – CIMB (PB) for Tan Sri Dato’ Sri Goh Ming Choon.

LiST OF THiRT Y (30) L ARgEST SECURiTiES ACCOUNT HOLdERS AS pER THE RECORd OF dEpOSiTORS (CONTd.)

Analysis of Shareholdings

As at 28 September 2018

196

AgEnDA AS ORdiNARY BUSiNESS1. To receive the Statutory Financial Statements for the financial year ended 30 June

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

2. To approve the payment of Directors’ fees of RM451,287.67 to the Non-Executive Directors for the financial year ended 30 June 2018.

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

3.1 Bernard Vincent Olmedo Dy; and 3.2 Anna Maria Margarita Bautista Dy.

4. To re-appoint Messrs. Deloitte PLT as Auditors of the Company for the financial year ending 31 December 2018 and to authorise the Directors to determine their remuneration.

AS SpECiAL BUSiNESSTo consider and, if thought fit, to pass the following resolutions with or without modifications: 5. Ordinary Resolution 1 — Payment of Benefits Payable (excluding Directors’ fees) to the Directors pursuant

Section 230 of the Companies Act, 2016 “THAT the benefits (excluding Directors’ fees) up to an amount of RM200,000.00

payable to the Directors pursuant to Section 230 of the Companies Act, 2016 for the period from 29 November 2018 until the next Annual General Meeting of the Company to be held in 2019 be and is hereby approved for payment.”

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

“THAT subject always to the Companies Act, 2016 (“the Act”), the Main Market

Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Malaysia”), the Company’s Constitution and the approval of the relevant government/regulatory authorities, the Directors be and are hereby authorised and empowered pursuant to Sections 75 and 76 of the Act to issue and allot new shares in the Company at any time at such price, upon such terms and conditions, for such purposes and to such person(s) whomsoever as the Directors may in their absolute discretion, deem fit and expedient in the interest of the Company, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the total number of issued shares of the Company for the time being.

(Please refer to explanatory Note 1)

(Resolution 1)

(Resolution 2)(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)

NOTICE IS HEREBY GIVEN THAT the Ninth (“9th”) Annual General Meeting (“AGM”) of the Company will be held at Sheraton 3-5, Level 3C, Sheraton Petaling Jaya Hotel, Jalan Utara C, 46200 Petaling Jaya, Selangor Darul Ehsan on Wednesday, 28 November 2018 at 10.30am for the following purposes:

Notice ofAnnual General Meeting

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

oT

he

r I

nFo

rM

aT

Ion

197

THAT the Directors be and are also empowered to obtain the approval from Bursa Malaysia for the listing of and quotation for the additional shares so issued AND THAT such authority shall commence immediately upon the passing of this Resolution and continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

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

BY ORDER OF THE BOARD

CHAN SAu LENG (MAICSA 7012211)RuZETI EMAR BINTI MOHD ROSLI (LS 0009965)Joint Secretaries

Selangor Darul Ehsan30 October 2018

6. Ordinary Resolution 2 — Authority to allot shares pursuant to Sections 75 and 76 of the Companies Act, 2016 (CONTD.)

Notes:

1. For the purpose of determining a member who shall be entitled to attend, speak and vote at this 9th AGM, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd. in accordance with Article 58(b) of the Company’s Constitution and Section 34(1) of the Securities Industry (Central Depositories) Act 1991, to issue a General Meeting Record of Depositors as at 19 November 2018. Only a depositor whose name appears on the Record of Depositors as at 19 November 2018 shall be eligible to attend, speak and vote at the Meeting or appoint proxies to attend, speak and vote on his/her behalf.

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

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

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

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

6. The instrument appointing a proxy must be deposited at the Company’s Registered Office at Level 8, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than twenty-four (24) hours before the time set for holding the meeting or any adjournment thereof as Paragraph 8.29(A) of the Main Market Listing Requirements of Bursa Malaysia requires all resolutions set out in the Notice of General Meeting to be put to vote by poll.

7. PERSONAL DATA PRIvACy: By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the AGM and/or any adjournment thereof, a member

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

Notice of Annual General Meeting C O N T d .

198

EXpLANATORY NOTE 1This agenda item is meant for discussion only as the provision of Section 340(1)(a) of the Companies Act, 2016 requires the Statutory Financial Statements to be laid at the AGM. As such, this agenda item does not require members’ approval and hence, is not put forward for voting. EXpLANATORY NOTES ON SpECiAL BUSiNESS:

Ordinary Resolution 1 — Payment of Benefits Payable (excluding Directors’ fees) to the Directors pursuant to Section 230 of the Companies Act, 2016

Resolution 5 relates to the Directors’ benefits (excluding Directors’ fees) up to an amount of RM200,000.00 comprising meeting allowances based on the number of scheduled and unscheduled Board and Board Committee Meetings as and when incurred during the financial year including benefits-in-kind and other claimable benefits assuming that all Non-Executive Directors will hold office until the conclusion of the next AGM.

Ordinary Resolution 2 — Authority to allot shares pursuant to Sections 75 and 76 of the Companies Act, 2016 The Resolution 6, if approved, will empower the Directors of the Company, from the date of the 9th AGM, authority to issue and allot shares in the Company up to an aggregate amount not exceeding ten per cent (10%) of the total number of issued shares of the Company for such purposes as the Directors consider would be in the interest of the Company. This authority unless revoked or varied at a general meeting will expire at the next AGM of the Company.

This Mandate is as renewal of the Mandate granted by the members at the last AGM held on 28 November 2017. The Mandate granted at the last AGM was not utilised by the Company and thus, no proceeds were raised.

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

MC

T B

er

ha

d a

nn

ua

l r

ep

or

T 2

018

oT

he

r I

nFo

rM

aT

Ion

199

STATEmENT ACCOmpANYiNg NOTiCE OF 9TH Agm NAMES OF DIRECTORS STANDING FOR RE-ELECTION1. Resolutions 2 and 3- Re-election of Directors The Directors who are retiring pursuant to Article 81 of the Constitution of the Company and seeking for

re-election at the forthcoming 9th AGM are as follows: (a) Bernard Vincent Olmedo Dy; and (b) Anna Maria Margarita Bautista Dy.

Details of the above Directors are set out in the Board of Directors’ Profile section and their shareholdings in the Company, where applicable, are set out in the Analysis of Shareholdings section appearing on pages 49 to 56 and 194 to 195 of the Company’s Annual Report respectively.

Notice of Annual General Meeting C O N T d .

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

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

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

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

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

or failing whom ( FULL NAME IN CAPITAL LETTERS ), ........................................................................................................................................................................

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

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

or failing whom THE CHAIRMAN OF THE MEETING as my/our proxy to vote for me/us on my/our behalf at the Ninth (9th) Annual General Meeting of

the Company (“AGM”) to be held at Sheraton 3-5, Level 3C, Sheraton Petaling Jaya Hotel, Jalan utara C, 46200 Petaling Jaya, Selangor Darul Ehsan on

Wednesday, 28 November 2018 at 10.30am and, at any adjournment thereof for/against *the resolution(s) to be proposed thereat.

REsolutions FoR AGAinst

ORdiNARY BUSiNESSResolution 1 To approve the payment of Directors’ fees of RM451,287.67 to the Non-Executive Directors for the

financial year ended 30 June 2018.

Resolution 2 To re-elect Mr. Bernard Vincent Olmedo Dy as a Director of the Company.

Resolution 3 To re-elect Ms. Anna Maria Margarita Bautista Dy as a Director of the Company.

Resolution 4 To re-appoint Messrs. Deloitte PLT as Auditors of the Company for the financial year ending 31 December 2018 and to authorise the Directors to determine their remuneration.

SpECiAL BUSiNESSResolution 5 Ordinary Resolution 1:

To approve the payment of Benefits Payable (excluding Directors’ fees) to the Directors up to an amount of RM200,000.00 pursuant to Section 230 of the Companies Act, 2016 for the period from 29 November 2018 until the next Annual General Meeting of the Company to be held in 2019.

Resolution 6 Ordinary Resolution 2:To authorise the Directors to issue shares pursuant to Sections 75 and 76 of the Companies Act, 2016.

(Please indicate with an “X” in the space provided above on how you wish your vote to be cast. If you do not do so, the proxy will vote or abstain from voting at this discretion.)

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

no. oF shAREs PERcEntAGE

1st Proxy %

2nd Proxy %

Total: 100%

As witness my/our hand(s) this.................................... day of ..................................... 2018.

MCT BERHAD (881786-X)

(Incorporated in Malaysia)

FORM OF PROXY no. of ordinary shares held

CDs Account no.

Notes:

1. For the purpose of determining a member who shall be entitled to attend, speak and vote at this 9th AGM, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd. in accordance with Article 58(b) of the Company’s Constitution and Section 34(1) of the Securities Industry (Central Depositories) Act 1991, to issue a General Meeting Record of Depositors as at 19 November 2018. Only a depositor whose name appears on the Record of Depositors as at 19 November 2018 shall be eligible to attend, speak and vote at the Meeting or appoint proxies to attend, speak and vote on his/her behalf.

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

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

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

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

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

6. The instrument appointing a proxy must be deposited at the Company’s Registered Office at Level 8, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than twenty-four (24) hours before the time set for holding the meeting or any adjournment thereof as Paragraph 8.29(A) of the Main Market Listing Requirements of Bursa Malaysia requires all resolutions set out in the Notice of General Meeting to be put to vote by poll.

7. PERSONAL DATA PRIvACy: By submitting an instrument appointing a proxy(ies) and/or representative(s), the members accept and agree to the Personal Data Privacy terms set out in the Notice of AGM dated 30 October 2018.

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

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

The Company Secretaries MCT bERHAD (881786-X) Level 8, Symphony House, Pusat Dagangan Dana 1, Jalan PJu 1A/46, 47301 Petaling Jaya,Selangor Darul Ehsan

1st Fold here

Then fold here

Fold this flap for sealing

AFFIXSTAMP

MCT BerhadGround Floor, MCT Tower, One City, Jalan uSJ 25/1

47650 Subang Jaya, Selangor, Malaysia.Tel: +603-5115 9988 Fax: +603-5115 9995