Macpie Berhad 200501002315 (679361-D)
Macpie Berhad
Retail & Event Distribution Management Management Division Division
Welcome to the Macpie Berhad Group of Companies and Business Ecosystem.
We would like to sincerely thank our shareholders for all their support throughout the challenging year and congratulate everyone at Macpie for the achievements we have had over the course of the current year. We are very hopeful for the upcoming year; not because we assume it to be any easier (it certainly won’t) but because we are well anticipated and prepared for whatever lies ahead. Thank you for supporting us, your satisfaction has been and will always be our topmost priority. Moving forward together to build a stronger HFRV\VWHPLQVXVWDLQDEOHHHFWLYHDQG partnership oriented ways. CORE VALUES Prioritizing Clients We aim to build and keep a strong relationship with our clients. We are willing to face upcoming challenges and go above and beyond for our clients as their satisfaction is our main priority.
Stronger Together We can’t do much on our own but together we can accomplish great things with our clients, partners, communities, and investors supporting us to accomplish our challenges and goals.
Always Reinvent We think forward to the future and always try to keep up with the most current technologies, businesses, systems, and events. We will constantly be improving and striving to be the best in everything we do from our business to our relationships with partners, investors, and clients.
Passion & Determination We are passionate and determined to tackle the challenges and goals that we have set. Our passion drives our determination to see through HYHU\WKLQJDQGȴQLVKZKDWZHVWDUWHG CONTENTS
STRATEGIC CORPORATE REVIEW GOVERNANCE
&RPSDQ\3URȴOH 007 Board of Directors’ Messsage 004 Financial Highlights 012 2020 Board of 005 Corporate Information 'LUHFWRUVȇ3URȴOH 006 Corporate Structure 016 Management Discussion and Analysis 028 Corporate Governance Overview Statement 041 Statement on Risk Management and Internal Control 043 Audit & Risk Management Committee Report 046 Additional Compliance Information 047 Sustainability Statement FINANCIAL OTHERS STATEMENTS INFORMATION
053 Directors’ Report 115 List of Properties 057 Statement by Directors and 116 Analysis of Shareholdings Statutory Declaration 118 Analysis of Warrant Holdings 058 Independent Auditors’ 120 Notice of Report Annual General Meeting 061 Statements of 123 Statement Accompanying Financial Position Notice of Annual General Meeting 6WDWHPHQWVRI3URȴWRU/RVV Proxy Form and Other Comprehensive Income 064 Statements of Changes in Equity 065 Statements of Cash Flows 067 Notes to the Financial Statements STRATEGIC REVIEW
COMPANY PROFILE
Macpie Berhad formerly known as Sterling Progress Berhad changed its name on the 3rd of April 2019 WRUHȵHFWDFKDQJHLQWKHLUPDUNHWIRFXVDQGGLUHFWLRQ7KHFRPSDQ\KDVEHHQOLVWHGRQWKH$&(0DUNHW of Bursa Malaysia Securities Berhad since 2007. The Company has two independent core segments which are Retail & Distribution Management and Event Management. Subsidiaries of the Retail & Distribution Management segment consist of Macpie Distribution, Macpie Management, and PC3 Technology while the subsidiaries of the Event Management segment incorporate MacpiePro, Macpie Equipment, Macpie Ticketing, Level Up Plus, and Macpie Entertainment. Macpie Berhad has undergone a tremendous transformation through its Retail & Distribution Management subsidiary. Macpie Distribution Sdn Bhd was appointed as the new authorised distribution partner for Nokia’s smartphone brand in Malaysia. Macpie will be distributing Nokia smartphones and
002 MACPIE BERHAD 2020 ANNUAL REPORT STRATEGIC REVIEW
COMPANY PROFILE cont’d
feature phones all over Malaysia through its own distribution channels while also preparing to move towards the modern 5G technology era by incorporating partners. In addition to that, Macpie Berhad has been successful in integrating the ecosystem of the Event Management segment into the product portfolio. The Event Management segment is now supported by its subsidiaries MacpiePro, Macpie Equipment, Macpie Ticketing, Level Up Plus, and Macpie Entertainment. The ecosystem is a one-stop solution for business collaboration partners that looking for opportunities WRRUJDQLVHVKRZVRQRɞLQHDQGRQOLQHSODWIRUPVVWDJLQJ HTXLSPHQWSURYLGHUVWLFNHWLQJVROXWLRQV event management & construction, and online broadcast & artist management. ΖQOLQHZLWKWKHȊΖQVSLULQJ'LHUHQFHVȋWDJOLQH0DFSLH%HUKDGZLOOFRQWLQXRXVO\ORRNIRUQHZZD\VWR expand its strategic business ecosystem to provide budding SMEs with the best innovative management solutions and strive to be one of the leading companies in Malaysia.
MACPIE BERHAD 2020 ANNUAL REPORT 003 STRATEGIC REVIEW
FINANCIAL HIGHLIGHTS
AUDITED 2020 2019 2018 2017 2016
Number of Shares (‘000) 353,295 353,295 321,295 279,295 989,180 Revenue (RM’000) 64,934 85,599 50,174 100,826 189,459 *URVV3URȴW 50ȇ 3,812 11,676 6,020 657 2,245 *URVV3URȴW0DUJLQ /RVV 3URȴW%HIRUH7D[DWLRQ 50ȇ (9,353) (2,555) (8,905) (33,815) (35,266) /RVV 3URȴW$IWHU7D[DWLRQ 50ȇ (8,717) (3,565) (8,966) (33,916) (33,906) /RVV 3URȴW$IWHU7D[DWLRQ0DUJLQ Net (Loss)/Earning per Share (Sen)* (2.31) (0.85) (2.99) (3.80) (3.43) Current Ratio 2.30 2.69 3.78 4.98 2.48
* Based on weighted average of ordinary shares
Revenue (RM’000) *URVV3URȴW 50ȇ /RVV 3URȴW%HIRUH7D[ (RM’000)
2020 2019 2018 2017 2016 (2,555) (33,815) (35,266) 85,599 (8,905) (9,353) 64,934 3,812 50,174 2,245 657 100,826 189,459 11,676 6,020
2020 2019 2018 2017 2016 2020 2019 2018 2017 2016
/RVV 3URȴW$IWHU7D[ 1HW /RVV (DUQLQJ &XUUHQW5DWLR (RM’000) 3HU6KDUH 6HQ
2020 2019 2018 2017 2016 2020 2019 2018 2017 2016 (2.31) (2.99) (3.80) (3.43) (3,565) (33,916) (33,906) (0.85) (8,966) (8,717) 2.30 2.69 3.78 4.98 2.48
2020 2019 2018 2017 2016
004 MACPIE BERHAD 2020 ANNUAL REPORT STRATEGIC REVIEW
CORPORATE INFORMATION
%2$5'2)'Ζ5(&7256
NG CHEE HENG LIONEL VERNON YONG NGUON KEE Executive Director Non-Executive Independent Director
KOO KIEN KEAT CHONG CHING WAI Executive Director Non-Executive Independent Director (Appointed on 8 September 2020) WOON SING JIUNN ANDY LIEW HOCK SIM Non-Executive Independent Director Non-Executive Independent Director (Appointed on 27 October 2020)
0(0%(562)$8'Ζ7 CORPORATE OFFICE RISK MANAGEMENT COMMITTEE Unit 23-10, Q Sentral, Jalan Stesen ANDY LIEW HOCK SIM (Chairman) Sentral 2, KL Sentral Ʌ $SSRLQWHGRQ2FWREHU 50470, Kuala Lumpur LIONEL VERNON YONG NGUON KEE Tel : 03-2728 4452 Ʌ 5HGHVLJQDWHGRQ2FWREHU CHONG CHING WAI :(%6Ζ7( www.macpie.asia 0(0%(562)120Ζ1$7Ζ1*&200Ζ77(( LIONEL VERNON YONG NGUON KEE (Chairman) CHONG CHING WAI SOLICITORS DARRYL, EDWARD & CO. MESSRS. PETER LING & VAN GEYZEL 0(0%(562)5(081(5$7Ζ21&200Ζ77(( CHONG CHING WAI (Chairman) LIONEL VERNON YONG NGUON KEE AUDITORS GRANT THORNTON MALAYSIA PLT (AF0737) Chartered Accountants 0(0%(562)(626&200Ζ77(( Level 11, Sheraton Imperial Court KOO KIEN KEAT Jalan Sultan Ismail ANDY LIEW HOCK SIM 50250 Kuala Lumpur
COMPANY SECRETARIES STOCK EXCHANGE LISTING LEE PENG LOON (MACS 01258) ACE MARKET OF BURSA MALAYSIA P’NG CHIEW KEEM (MAICSA 7026443) SECURITIES BERHAD Stock Name : MACPIE Stock Code : 0140 35Ζ1&Ζ3$/%$1.(56 MALAYAN BANKING BERHAD SHARE REGISTRAR CIMB BANK BERHAD AMBANK GROUP BERHAD SHAREWORKS SDN BHD 2-1, Jalan Sri Hartamas 8 Sri Hartamas REGISTERED OFFICE 50480 Kuala Lumpur Tel : 03-6201 1120 51-21-A, Menara BHL Bank Fax : 03-6201 3121 Jalan Sultan Ahmad Shah, 10050 Penang Tel : 04-2108 833 Fax : 04-2108 831
MACPIE BERHAD 2020 ANNUAL REPORT 005 STRATEGIC REVIEW
CORPORATE STRUCTURE
006 MACPIE BERHAD 2020 ANNUAL REPORT STRATEGIC REVIEW
BOARD OF DIRECTORS’ MESSAGE
6HDQ1J&KHH+HQJ
Executive Director (Entrepreneur)
*HQGHU 0DOH $JH \HDUVROG 1DWLRQDOLW\ 0DOD\VLDQ
Dear investor and shareholders, Our main aim is 7KHUH DUH QR WZR ZD\V DERXW WKH VLJQLȴFDQW QHJDWLYH LPSDFW RI WKH COVID-19 pandemic. I do not have to explain the severity of the to continue to be pandemic and its implications on business operations all over the world. innovative and The more important discussion over here is the manner in which we are going to push ourselves back into a dominating position post-pandemic. show continuous Our main aim is to continue to be innovative and show continuous LPSURYHPHQWLQDOORXURSHUDWLRQV7KHUHFHQWLQȵX[RIFDSLWDOVKRZFDVHV improvement in all a great amount of focus on the future development for Macpie Berhad. I want to assure our clientele, partners, and other stakeholders that our operations we are consistently working towards creating Macpie one of the most dominant future player in whatever industry we choose to exploit.
I believe in the popular Japanese ‘Kaizen’ philosophy whose literal translation is continuous improvement. This philosophy states that no matter how a successful business currently is, it should always aim to innovate and improve to ensure its success in the future too. Hence, in adherence to WKLVSKLORVRSK\ΖKDYHSXWXSDJUHDWGHDORIHRUWWRLQWHJUDWHRXUIXWXUH standings in all of our current business decisions. The entirety of my operating actions initially assesses the future impact it is going to have. I believe that in this ever-changing and evolving business environment and technology, it is vital to plan for the future in order to become a market leader.
Our current course of direction is towards the right path as we at Macpie are developing and expanding our infrastructure and scope to meet the business needs of more clients. I truly believe that my outlined vision will help Macpie Berhad achieve its overall corporate objectives and become an LQȵXHQWLDOIXWXUHLQGXVWU\IRUFH
MACPIE BERHAD 2020 ANNUAL REPORT 007 CORPORATE GOVERNANCE
BOARDBOO OF DIRECTORS’ MMESSAGE cont’dcontnt
.RR.LHQ.HDW
Executive Director (Former National Badminton Player)
*HQGHU 0DOH $JH \HDUVROG 1DWLRQDOLW\ 0DOD\VLDQ
Dear investors and shareholders,
I have become a board member of Macpie Berhad at a time I have great when the entire business world is recovering from the COVID-19 pandemic. I believe that at times like this what any company FRQȴGHQFHLQ0DFSLH requires is inspiration and vision and I aspire to deliver on that.
because I believe I have spent a huge chunk of my life traveling all around the world playing badminton in various international tournaments. Over the that the Company is years, I have also gained some experience in event management services by visually analysing the tournaments I have been a part of. equipped with the I aim to inject my expertise and skills into helping Macpie Berhad necessary resources JDLQ PDUNHW GRPLQDQFH Ζ DP JUHDWO\ LPSUHVVHG E\ WKH HRUWV the board has taken over the current course of the year to and skills to achieve mitigate the negative implications of the COVID-19 pandemic. great success within Ζ KDYH JUHDW FRQȴGHQFH LQ 0DFSLH EHFDXVH Ζ EHOLHYH WKDW WKH &RPSDQ\ LV the coming years equipped with the necessary resources and skills to achieve great success within the coming years despite the current pandemic setback. despite the current pandemic setback
008 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE
BOARD OF DIRECTORS’ MESSAGE cont’d
/LRQHO9HUQRQ Independent Non-Executive Director (Chartered Accountant) *HQGHU 0DOH $JH \HDUVROG 1DWLRQDOLW\ 0DOD\VLDQ Dear investors and shareholders, 7KHSDVWȴQDQFLDO\HDUVWDUWHGZLWKDORWRISURPLVHZLWKSURMHFWVFRPLQJ Although times now in on board and concerts being planned for the coming year. Then, in early February, the COVID-19 global pandemic hit and threw everything for a loop. are challenging, the Concerts were being cancelled and all planning had to be reduced or even Company has taken stopped. Although times now are challenging, the Company has taken steps to reduce costs and maintain human capital in the face of shrinking revenues steps to reduce costs DQGUHGXFHGSURȴWDELOLW\ and maintain human +RZHYHU ZLWK WKH LQWHUQDWLRQDO GHYHORSPHQWV PDGH LQ ȴQGLQJ D YDFFLQH and the local measures which have been taken to control the spread of the capital virus, things are beginning to look up. Therefore, for the coming year, I urge all shareholders to stay the course as the Company will emerge from this worldwide crisis stronger. MACPIE BERHAD 2020 ANNUAL REPORT 009 CORPORATE GOVERNANCE BOARDBOO OF DIRECTORS’ MMESSAGE cont’dcontt $OH[&KRQJ &KLQJ:DL Independent Non-Executive Director (Lawyer) *HQGHU 0DOH $JH \HDUVROG 1DWLRQDOLW\ 0DOD\VLDQ Dear esteemed investors and shareholders, Even though the impact of the current pandemic is extremely negative, I think that it is crucial for all businesses in the modern age to be receptive We are constantly and anticipative of changing dynamics. To be honest, it is a matter of fact that there is very little that we can do to help the current COVID-19 situation, working towards however what we can do is plan our actions after the crisis is overcome. being more Because of the pandemic, most of the businesses in all the industries were forced to operate digitally. This has sparked a trend where businesses innovative and are switching the majority of their operations to online platforms and this is where an opportunity can be opened up for Macpie Berhad. Our newly growing our business focused retail management services such as supply chain management can be expected to have a higher demand now. Furthermore, the supply to help Macpie chain management services combined with the expected growth in event management division will surely have a positive impact on our operations. Berhad become more Our investors and shareholders should be positive because our workforce successful and upper hierarchy is highly receptive to the continuously changing customer needs and external changes. Our primary goal is to be as customer oriented as possible to generate more brand loyalty from our customers. Furthermore, I would also like to thank all our shareholders, employees and other stakeholders for supporting us and believing in us. We are constantly working towards being more innovative and growing our business to help Macpie Berhad become more successful. 010 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE BOARD OF DIRECTORS’ MESSAGE cont’d *LQD:RRQ 6LQJ-LXQQ Independent Non-Executive Director (Former TV News Presenter) *HQGHU )HPDOH $JH \HDUVROG 1DWLRQDOLW\ 0DOD\VLDQ Dear investors and shareholders, directors, that have I am grateful to be surrounded by a wonderful board of directors, that have a shared vision for relevance and growth in this ever-changing environment. a shared vision for I would also like to extend my gratitude to Mr. Sean Ng, Macpie Berhad’s Executive Director who did an excellent job and necessary measures in place relevance and growth to keep our business running without interruption. Under his great leadership, Macpie distribution was appointed as an authorised Nokia mobile distributor in this ever-changing in Malaysia this year. It was such a great achievement for Macpie Berhad. I believe with our robust infrastructure and agile working capabilities, we environment are devoting all our resources to help our clients and partners navigate the current circumstances. :HDUHFRQȴGHQWWKDWZHZLOOPDNHDSRVLWLYHFRQWULEXWLRQLQWKLVFULVLVDQG will continue to be the strong partner you can rely on. MACPIE BERHAD 2020 ANNUAL REPORT 011 CORPORATE GOVERNANCE 202020202 BOARD OF DIDIRECTORS’I PROFILE 6HDQ1J&KHH+HQJ6 (40, Male) Malaysian Executive Director (Entrepreneur) Mr. Sean Ng Chee Heng, is an Executive Director of Macpie Berhad. He was appointed to the Board on the 22nd of February 2018. 0U 1J LV WKH JURXS IRXQGHU DQG FKLHI H[HFXWLYH RɝFHU RI 6(* &DSLWDO ΖQWHOOLJHQFH 6GQ %KG Ȋ6(*ȋ DQ investment company focused on the digital mobile technology industry. As a major investor and shareholder in a few telecommunication and mobile technology companies which deals with digital rewards platforms, retail management, consumer application, supply chain management, logistics, and etc, SEG plays a vital role in helping WKHVHFRPSDQLHVH[SDQGDQGFUHDWHLWVRZQȊ%OXH2FHDQȋPDUNHWXQGHU 6(*ȇV EOXHSULQW IRU YDOXH FUHDWLRQ LQ companies they get involved in. With more than 18 years of experience in the mobile technology business industry, and a graduate from Honolulu University with a Master of Business Administration, Mr. Ng has profound knowledge and keen insight of the industry with an extensive network of business partners and industry players. In 2012, he developed a renowned Malaysian smart device brand together with his other co-founders and it quickly gained prominence, market VKDUHDQGȴUPIRRWLQJLQWKH$6($1UHJLRQΖQMXVWWZR\HDUVWKHEUDQGH[SDQGHGWRΖQGRQHVLDDQGZDVPDNLQJ headway in other ASEAN markets. He believes in taking a hands-on approach to leading business and marketing strategies, branding management, logistics, multi-national supply chain management, operation strategies, and big-data business analysis. .RR.LHQ.HDW(35, Male) Malaysian Executive Director (Former National Badminton Player) Mr. Koo Kien Keat is a newly appointed Executive Director of Macpie Berhad. He was assigned to the board on the 8th of September 2020. Mr. Koo Kien Keat has been one of the most popular Malaysian international badminton players. He was born in Ipoh, Perak and studied at the St. Michael’s Institute and later on continued at the Bukit Jalil Sports School. He had a very successful playing career; he became world number 1 in Men’s Doubles in 2007, then went on to become the youngest pair to win Asian Games Gold Medal. In addition to that, he has also won 5 Gold Medals in Commonwealth Games which is the most Gold Medal wins in the history of Malaysia. Moreover, he also took part in the 2012 London Olympics where he achieved 4th position in the Men’s doubles. Over the years he has taken part in various international tournaments all over the world and after retirement he was appointed as the High-Performance Director of Badminton Asia where he is currently IXOȴOOLQJKLVUROH He started his investing and shareholding career at Komarkcorp Berhad, whom he has been associated with since 11th August 2020. Mr. Koo Kien Keat believes in innovation and is bound to help Macpie attract more partnerships and diversify their clientele. 012 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE 2020 BOARD OF DIRECTORS’ PROFILE cont’d $QG\/LHZ+RFN6LP(40, Male) Malaysian Independent Non-Executive Director (Chartered Accountant) $QG\LVD&KDUWHUHG$FFRXQWDQWZLWK0DOD\VLDQΖQVWLWXWHRI$FFRXQWDQWV 0Ζ$ DQGPHPEHURI&HUWLȴHG3UDFWLVLQJ $FFRXQWDQW &3$ $XVWUDOLD+HKDVRYHUȴIWHHQ \HDUVRIH[SHULHQFHZLWKPDMRUDXGLWȴUPVLQDXGLWWD[DWLRQ and accountancy that gained from both Malaysia and oversea. He was involved in numerous successful initial SXEOLFRHULQJ Ζ32 LQ0DOD\VLD6LQJDSRUH*HUPDQ\DQG+RQJ.RQJWKURXJKRXWKLVFDUHHU $QG\VWDUWHGKLVFDUHHUZLWKDORFDODXGLWȴUPLQ0DOD\VLD+HWKHQMRLQHG.30*.XDOD/XPSXUDIWHUREWDLQHGKLV SURIHVVLRQDOTXDOLȴFDWLRQVLH0Ζ$DQG&3$$XVWUDOLDLQΖQ.30*.XDOD/XPSXUKHVWDUWHGWRLQYROYHLQWKH DXGLWRIPXOWLQDWLRQDOFRUSRUDWLRQ 01& DQGSXEOLFOLVWHGFRPSDQ\ 3/& +HDOVRLQYROYHGLQWKHΖ32RIDȴQDQFLDO services company in the Main Market of Kuala Lumpur Stock Exchange (KLSE). In 2008, he ventured to China and since then, spent eight (8) years in China. From 2008 to 2012, he worked in KPMG Beijing and actively involved in audit and IPO. In 2012, he joined a China-based manufacturing company in the FDSDFLW\RI&KLHI)LQDQFLDO2ɝFHU &)2 DQGOLVWHGWKHFRPSDQ\LQ)UDQNIXUW6WRFN([FKDQJHLQSULRUWRKLV return to Malaysia in 2016. Upon his return to Malaysia, he joined Baker Tilly Malaysia and led a team of forty (40) which specialise in IPO and actively involved in various corporate exercises, e.g. business restructuring, merger and acquisition (M&A), UHYHUVHWDNHRYHU 572 WUDQVIHUOLVWLQJȴQDQFLDOGXHGLOLJHQFHUHJXODULVDWLRQSODQIRU31FRPSDQ\IXQGUDLVLQJ and etc. In 2019, he started his own public practice and assumed the role of Managing Partner. At present, he also sits on the board of directors of XOX Berhad and Perak Corporation Berhad. MACPIE BERHAD 2020 ANNUAL REPORT 013 CORPORATE GOVERNANCE 202020202 BOARD OF DIDIRECTORS’I PROFILE cont’dcontt /LRQHO9HUQRQ Mr. Lionel Vernon Yong Nguon Kee, is an Independent Non-Executive Director of Macpie Berhad. He was appointed to the Board on the 21st of March 2017. Mr. Lionel Yong CIA, CA (M), FCCA, CMIIA is an internal audit practitioner with more than 20 years experience LQDFFRXQWLQJȴQDQFHDQGLQWHUQDODXGLW+HLVDFHUWLȴHGLQWHUQDO DXGLWRU 86$ D FKDUWHUHG DFFRXQWDQW (Malaysia), a member of the Malaysian Institute of Accountants and a Fellow Member of the Chartered $VVRFLDWLRQRI&HUWLȴHG$FFRXQWDQWV 8. +LVVSHFLDOWLHVLQFOXGHWKHSURYLVLRQRILQGHSHQGHQWDQGREMHFWLYH assessments of systems of internal control as implemented by the management to evaluate and improve WKHHHFWLYHQHVVRIULVNPDQDJHPHQWFRQWURODQGJRYHUQDQFH+H LV DOVR IDPLOLDU ZLWK WKH UHTXLUHPHQWV RI carrying out investigations into corporate fraud activities and with the requirements of the governance and audit of Information Technology systems based on the COBIT Framework. He has carried out risk assessment exercises for numerous companies, was been involved in the system development life cycle process in the implementation of several IT applications during his career, and led investigations into a number of corporate fraud activities. He is currently the Director of Corporate Governance, Risk Management and Internal Audit with OAC Consulting Sdn Bhd. $OH[&KRQJ&KLQJ:DL(40, Male) Malaysian Independent Non-Executive Director (Lawyer) Mr. Alex Chong Ching Wai, is an Independent Non-Executive Director of Macpie Berhad. He was appointed to the Board on the 22nd of February 2018. Mr. Chong acquired his Bachelor of Jurisprudence from University of Malaya in 2003 and obtained the &HUWLȴFDWHRI/HJDO3UDFWLFHIURP/HPEDJD.HOD\DNDQ3URIHVLRQ8QGDQJ8QGDQJ0DOD\VLDLQ+HZDVWKHQ called to the Bar in 2006. In 2007, Mr. Chong joined YC Pang, Chong & Gordon as a Legal Assistant and was appointed as a Partner of the ȴUPLQWKHIROORZLQJ\HDU'XULQJKLVWHQXUHDVDSUDFWLWLRQHUKLVPDLQUROHZDVWRDGYLVHYDULRXVFRPSDQLHVRQ their corporate and commercial transactions as well as property related legal issues based on his experience. 2WKHUWKDQWKDWKLVȴUPLVDSSRLQWHGDVWKHIXOOSDQHOVROLFLWRUVWRVHYHUDOPDMRUEDQNVLQ0DOD\VLD 014 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE 2020 BOARD OF DIRECTORS’ PROFILE cont’d *LQD:RRQ6LQJ-LXQQ(38, Female) Malaysian Independent Non-Executive Director (Former TV News Presenter) Ms. Gina Woon has more than 12 years of experience in the broadcast and media industry. She was appointed to the board on the 30th of January 2019. She graduated from Tuanku Abdul Rahman University College with an Advanced Diploma in Mass Communication (Media Studies). After that, she got her start as a broadcast journalist with RTM, covering news ranging from crime to natural disasters, politics, and economic issues. She then joined TV3 and worked as an Assistant Producer cum News Presenter on Buletin Utama. During her time ZLWKWKHWHOHYLVLRQFKDQQHOVKHKDGDPDVVHGDZHDOWKRIH[SHULHQFHIURPLQWHUYLHZLQJKLJKSURȴOHFHOHEULWLHV politicians, international artists, and successful entrepreneurs. She interviewed personalities such as Ricardo Guadalupe, CEO of Hublot, Lang Lang, a famous Chinese pianist and Franz Linder, CEO of Mido. She was also tasked with carrying out live reporting in front of millions of audiences. )URPXQWLOVKHZDVWKHΖPDJHDQG%UDQGLQJ&RQVXOWDQWIRU0HGLD3ULPDQHZVDQGFXUUHQWDDLUV6KH ZDVWKHȴUVWIHPDOHSUHVHQWHUZKRZRQ5HDGHUȇV'LJHVW0DOD\VLDȇV0RVW7UXVWHG793UHVHQWHUWZLFHLQDQG 2017. She was also appointed as Chief Editor for the Malaysia Book of Records 2018. Note: None of the Directors have any family relationship with any directors and/or substantial shareholders of Macpie %HUKDG QRU DQ\ FRQȵLFW RI LQWHUHVW LQ DQ\ EXVLQHVV DUUDQJHPHQW LQYROYLQJ WKH FRPSDQ\ 2WKHU WKDQ WUDɝF RHQFHVWKH\KDYHKDGQRFRQYLFWLRQVIRUDQ\FULPLQDORHQFHVZLWKLQWKHSDVW\HDUVQHLWKHUQRUDQ\SXEOLF VDQFWLRQRUSHQDOW\LPSRVHGE\WKHUHOHYDQWUHJXODWRU\ERGLHVGXULQJWKHȴQDQFLDO\HDU MACPIE BERHAD 2020 ANNUAL REPORT 015 CORPORATE GOVERNANCE MANAGEMENTMAA DISCUSSIONDII AND ANALYSIS YEARY IN REVIEW 2019 proved to be a great year for Macpie Berhad. Its leading subsidiary; MacpiePro was a huge success and was also responsible for organizing a range of successful concerts in Malaysia. Some of the most notable concerts among them were: z WESTLIFE THE TWENTY TOUR 2019 ‘LIVE’ IN KUALA LUMPUR During the previous year, a total of 7 events were held by MacpiePro gathering over 46,000 fans in attendance. Moreover, in 2020 a couple of events, Westlife The Twenty Tour 2019 ‘LIVE’ In Kuala Lumpur and 2019 CHA EUN- WOO 1st Fan Meeting Tour [JUST ONE 10 MINUTE] In KUALA LUMPUR were held by MacpiePro accumulating around 15,900 attendees. The group strongly believes that in 2020 the formation of the two new independent core segments ZKLFKDUH5HWDLO 'LVWULEXWLRQ0DQDJHPHQWDQG(YHQW0DQDJHPHQWZLOOKHOSLPSURYHWKHȴQDQFLDOSHUIRUPDQFH and quality of the services provided by the company. %\WKHQHZQRUPWKHEXVLQHVVHFRV\VWHPQHHGVWRDGMXVWLWVHOINHHSLQJWKHVLJQLȴFDQWLPSDFWRIWKH&29Ζ' pandemic in mind to maintain organizational sustainability. Furthermore, the supply chain management also needs to be a key point in 2020; we strongly believe that the ICT market is expanding in Malaysia. Hence, we aim to VXEVHTXHQWO\VWULYHWRZDUGVEHFRPLQJDQLQȵXHQWLDOPDUNHWSOD\HULQYDULRXVLQGXVWULHVVXEVHTXHQWO\KHOSLQJXV achieve our overall business objectives. 016 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE MANAGEMENT DISCUSSION AND ANALYSIS cont’d 5(7$Ζ/ 'Ζ675Ζ%87Ζ210$1$*(0(17 Macpie Berhad is an investment and ICT holding company with three subsidiaries under the Retail & Distribution Management division, which are Macpie Distribution, Macpie Management, and PC3 Technology. 7KH WKUHH VXEVLGLDULHV DUH DOO H[SHUWV LQ WKHLU RZQ ȴHOGV ZLWK 0DFSLH 'LVWULEXWLRQ SURYLGLQJ WHOHFRPPXQLFDWLRQV DQGΖ&7SURGXFWVXSSOLHV0DFSLH0DQDJHPHQWRHULQJWKHULJKWUHWDLOVSDFHVWRJURZFOLHQWȇVEXVLQHVVHVDQG3& 7HFKQRORJ\DVVLVWLQJLQSURYLGLQJȴQDQFLDOVROXWLRQVWR60(ȇV To put it in a nutshell, this combined expertise will help SME’s grow their brand through innovative and thoroughly analysed business tactics and strategies. d h B P n C d 3 S T e n c n o F i io i h t t n n u a u b F n o i in c b r a i l i t n a o s y r i l c l g t i S p a D o y p s l l i & u S u S S u t y D i l d t p o p c n p n e p s i u o u d B r S p t o c h r SMEs a P d M Hassle-Free Retailer e Retail Plac d M h a Fa nt B c cil e p ities gem n i Mana d e t S Managemen MACPIE BERHAD 2020 ANNUAL REPORT 017 CORPORATE GOVERNANCE MANAGEMENTMAA DIDISCUSSIONI AND ANALYSIS cont’dcontt 0$&3Ζ('Ζ675Ζ%87Ζ216'1%+'0 0DFSLH 'LVWULEXWLRQ IRUPHUO\ NQRZQ DV 3'$ ([SHUW 0RELOLW\ LGHQWLȴHV DQG LQWURGXFHV WKH WUHQGLHVW DQG PRVW innovative ICT brands and telecommunication products into the market to match the needs of all generations. We play a key role in supplying and distributing the best and highest-end products to ICT sales channels nationwide. We have been appointed as the new authorised distribution partner for Nokia all over Malaysia. We will be distributing Nokia smartphones and feature phones in Malaysia through our own distribution channels while also preparing to move towards the modern 5G technology era by incorporating partners. The opportunity to bring such a revered technology brand back into Malaysia was too irresistible to pass upon. We have a range of strategies to propel up the Nokia brand name to give competition to its competitors. The Nokia smartphones have the latest Android OS which will be used to market them to the general public. As a result of the integration of the latest Android OS into smartphones, the overall quality and value proposition of Nokia VPDUWSKRQHVKDVJURZQVLJQLȴFDQWO\ERWKLQWHUPVRIVRIWZDUHTXDOLW\DQGVHFXULW\7KLVZLOOEHDVWURQJDWWUDFWLRQ for both the new and existing users of the brand. In fact, the brand is looking to generate strong brand loyalty from a segment of Malaysian consumers. We are very much looking forward to serving these customers and others by making Nokia’s range of new smartphones easily available via our channel partners. By making its devices accessible to consumers from all walks of life, we aim to aid the overall business growth of the Nokia brand. NokiaNo 2.4 Nokia C2 & 5.3 had launched in July hadhad launched in 2020. OctoberOcto 2020. 0$&3Ζ(0$1$*(0(176'1%+' Macpie Management formerly known as ICT Utopia has provided strategic locations for SMEs to grow their businesses since 2010. We have been recognized as the longest-serving ICT retailer in Malaysia. Furthermore, we have also proven our value by being contracted by notable shopping centres to manage their retail properties related to ICT. 3&7(&+12/2*<6'1%+' 3&7HFKQRORJ\LVDOLFHQVHGȴQDQFLDOVHUYLFHVFRPSDQ\ZKLFKGHVLJQVDQGLPSOHPHQWVRSWLPDOȴQDQFLDOVROXWLRQVRQV to help small start-ups and entrepreneurs who have good business plans. We have been successful in helpingping numerous SMEs grow their brand in the ICT industry. 018 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE MANAGEMENT DISCUSSION AND ANALYSIS cont’d EVENT MANAGEMENT Specialist in music concerts, events, ticketing systems, staging & equipment setups, event management, and FRQVWUXFWLRQIRUHYHQWV :HSULGHRXUVHOYHVRQGHOLYHULQJȴUVWFODVVVHUYLFHVWRDOORIRXUFOLHQWV:HWDNHDIUHVKDQG HHFWLYHDSSURDFKWRPDQDJHHYHQWVDQGVHUYLFHVDQGSURYLGHFXVWRPHURULHQWHGVHUYLFHV:LWKRXUFOLHQWVȇYLVLRQDW WKHIRUHIURQWZHZLOOEHZRUNLQJHɝFLHQWO\WRHQVXUHZHDFKLHYHWKHKLJKHVWSRVVLEOHVWDQGDUGV 0$&3Ζ((17(57$Ζ10(176'1%+' Macpie always tends to be anticipative of the constantly changing global dynamics. Subsequently, Macpie Entertainment is planning to provide an online broadcasting service known as MacpieTV in 2021. In addition to that, it will also provide artist management services based in Kuala Lumpur. MacpieTV is bound to be an exciting new medium to watch free live streams and other exclusive LIVE performances of local artists. As digital technology continues to evolve today, MacpieTV aims to expand its digital platform for various audiences. MacpieTV, brought to you by Macpie Entertainment will present 1-hour live virtual shows on MacpieTVȇV RɝFLDO YouTube channel for all of its 12 seasons in the near future. The purpose of the live-streaming will be to support WKHHQWHUWDLQPHQWLQGXVWU\DQG60(VZKRDUHGLUHFWO\DHFWHGE\&29Ζ' LQ0DOD\VLDΖWZLOOKHOSWKHPUHPDLQ ȴQDQFLDOO\VWDEOHZKLOHDOVRNHHSLQJWKHJHQHUDO79DXGLHQFHHQWHUWDLQHGDQGVDIHDWKRPHGXULQJWKHSDQGHPLF 0$&3Ζ(3526'1%+' MacpiePro has seen the potential demand for concerts and entertainment events in Malaysia. In recent years, artistsstsst are touring more frequently while sponsors are looking to make more connections with millennials and Genn ZZ.. MacpiePro believes that this is the best time for the company to focus and invest in the music and entertainmentmentm industry. In 2019, 7 events have been held by MacpiePro with over 46,000 fans in attendance. Moreover, in 20200200 a couple of events, Westlife The Twenty Tour 2019 ‘LIVE’ In Kuala Lumpur and 2019 CHA EUN-WOO 1st Fan Meetingeetinge Tour [JUST ONE 10 MINUTE] In KUALA LUMPUR were held by MacpiePro accumulating around 15,900 attendees.deees. MACPIE BERHAD 2020 ANNUAL REPORT 019 CORPORATE GOVERNANCE MANAGEMENTMAA DIDISCUSSIONI AND ANALYSIS cont’dcontt OurO success is driven by a need to focus on the business model of establishing a complete vertically integrated business ecosystem. With so many new talented artists worldwide, fans of all ages are compelled to attend various music events and MacpiePro aims to bring the two together by providing various services and solutions. By prioritizing our fans, we are now focusing on reinventing the fan experience along every part of their journey. From purchasing tickets to providing high-quality equipment for the venues, Macpie aims to provide relevant services and solutions in all aspects. 020 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE MANAGEMENT DISCUSSION AND ANALYSIS cont’d Currently, we are partnering with more than 50 brands to create more value and provide our fans with a much better experience. With our platforms boasting millions of users, we will continue to work alongside advertisers to create natural and immersive brand activations within our business ecosystem. We are working towards being able to conduct more world-class concerts after the current COVID-19 crisis is overcome to meet our fans’ expectations who love music. CRAZY 20 On the 30th of November 2018, MacpiePro organized a press conference to announce their biggest event named ‘Crazy 20’. It is MacpiePro’s ambitious plan to organize 20 concerts in 2019 catering the fans with the experience of enjoying CPOP, KPOP, and MPOP. MacpiePro also aims to support artists from all over the world during the course of ‘Crazy 20’. 7KHȴUVWFRQFHUWWRNLFNVWDUWWKH&UD]\SODQZDVWKH%/$&.3Ζ1. :25/'7285ZLWK.Ζ$>Ζ1<285$5($@ KUALA LUMPUR concert held on the 23rd and 24th of February 2019 at Stadium Malawati, Shah Alam. This is also WKHȴUVW.323FRQFHUWLQ0DOD\VLDZKLFKUDQIRUFRQVHFXWLYHGD\VVHHLQJDQRYHUZKHOPLQJUHVSRQVHIURPIDQV After the BLACKPINK concert, the Crazy 20 plan was continued by the Mandarin Pop Concert 2019 event held at the Arena of Stars on the 20th of April 2019. Talented artists such as Bii, Jeno Liu Li Lang, Victor Wong, Roger Yang Pei An, and FS (Fuying and Sam) were among the performers. In June of 2019, two Powerful K-pop concerts were held back to back at The Stadium Malawati, Shah Alam. This was followed by the 2019 MONSTA X WORLD TOUR ‘WE ARE HERE’ IN KUALA LUMPUR concert on the 22nd of June 2019 and the 2019 GFRIEND ASIA TOUR [GO GO GFRIEND!] in KUALA LUMPUR concert on the 29th of June which were both a tremendous delight to K-pop fans in Malaysia. MacpiePro is also proud to have been the concert organizer for the world-famous Irish ER\EDQG:HVWOLIHΖWZDVWKHLUȴUVWWRXULQ0DOD\VLDDIWHUDZKRSSLQJ\HDUV DQGWKHFRQFHUWWRXUZDVJLYHQWKHȴWWLQJQDPHRI:HVWOLIH7KH7ZHQW\7RXU 2019 ‘LIVE’ In Kuala Lumpur. The concert was successfully held on the 8th and 9th of August at Stadium Malawati, Shah Alam. It was a fantastic two-day show which was sold out within 36-hours and once again was a tremendous achievement for MacpiePro’s venture in the music industry.MacpiePro also started to venture into the fan meet in 2019. On the 27th of October 2019, MacpiePro organized the ‘2019 CHA EUN-WOO 1st Fan Meeting Tour [JUST ONE 10 MINUTE] In KUALA LUMPUR’ event at Dewan Wawasan, Menara PGRM. The event received incredible support from fans. MACPIE BERHAD 2020 ANNUAL REPORT 021 CORPORATE GOVERNANCE MANAGEMENTMAA DIDISCUSSIONI AND ANALYSIS cont’dcontt 0$&3Ζ((48Ζ30(176'1%+'0 Macpie Equipment started out in January of 2019 with the intention of providing professional high-quality equipment to MacpiePro whenever concerts and events needed to be organized. Macpie Equipment has started to provide their equipment for rental as a service to various other companies and event organizers in 2019. Macpie Berhad IRUHVHHVWKHSRWHQWLDORIWKLVEXVLQHVVWRWXUQRYHUDKHDOWK\SURȴWDVZHOODVWRVDYHWKHFRVWIRULQKRXVHHYHQWV DQGFRQFHUWV7KXV0DFSLH%HUKDGZLOOPDNHVLJQLȴFDQWLQYHVWPHQWVLQWKLVȴHOGWRPDNHVXUHZHDUHDUPHGZLWK DGHTXDWHVWDUHVRXUFHVDQGRZQWKHȴQHVWHTXLSPHQWWRDFFRPPRGDWHDVKRZRIDQ\VL]HLQWKHQHDUIXWXUH Among the equipment that is made available for rental are sound systems, truss solutions, lighting systems, staging solutions, and LED systems. /(9(/833/866'1%+' Level Up Plus Sdn Bhd has provided premier set and staging equipment to entertainers across the globe since 2017. We specialize in concerts, touring, television, festivals, special events, award shows, sports entertainment and SURGXFWLRQVHUYLFHV2XUSURGXFWLVDYDLODEOHSUDFWLFDOO\DQ\ZKHUH ZKHWKHULWȇVDGUXPULVHUIRUDRQHRHYHQWD custom set with LED stage decks for a television show, a stage lift for an artist reveal or a turntable for a special event product display; we are there to satisfy all your needs. 022 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE MANAGEMENT DISCUSSION AND ANALYSIS cont’d 0$&3Ζ(7Ζ&.(7Ζ1*6'1%+' Macpie Ticketing is a company established by Macpie Berhad with the purpose of strengthening the company’s ecosystem for concert and event organization. Macpie Ticketing is a one-stop solution ticketing company that delivers ticket management systems and infrastructure to organizers and end-users including MacpiePro and others. Macpie 7LFNHWLQJȇVVHUYLFHVLQFOXGHRQOLQHWLFNHWLQJV\VWHPVZKLFKFDQDFFRPPRGDWHDZLGHUDQJHRIFXVWRPHUVRɞLQHVDOHV counters, optional payment gateways, custom ticket choices, entry scanning facilities, report analysis, and dispatch services. In 2019, Macpie Ticketing has successfully handled several ticketing systems including those for the ‘2019 CHA EUN- WOO 1st Fan Meeting Tour [JUST ONE 10 MINUTE] in KUALA LUMPUR’, an event organized by MacpiePro, as well as the ‘Luo Ta You Live in Malaysia’ and ‘Bobby Chen Concert Live in KL’ events by SoulNines Production. These are just the tip of the iceberg as there are many more coming soon. We will continue to invest in this ticketing platform DQGGHYHORSLQQRYDWLYHSURGXFWVWRJHQHUDWHIDQWUDɝFWRLQFUHDVHUHYHQXHWLFNHWVDOHVDQGFRQWLQXHWRJURZWKH company. 6<67(0&$3$%Ζ/Ζ7< 6(&85Ζ7< To ensure the system is user-friendly we have enhanced the user experience by making it user-friendly for mobile, tablet and PC access. Users are hence given a better experience of the system and also providing hassle-free ticket customization needs. In addition to that, our system can be utilized for e-ticket or even physical ticketing services and cater to the needs of all partners. Moreover, our fully encrypted and secure cloud base server infrastructure will ensure the user’s transactions, bookings and personal information is well protected. MACPIE BERHAD 2020 ANNUAL REPORT 023 CORPORATE GOVERNANCE MANAGEMENTMAA DIDISCUSSIONI AND ANALYSIS cont’dcontt High Availability Live Reporting & Integration With System Infrastructure Analysis Third Party Systems Marketing Consultations Various Form Mobile Application White Label Of Tickets Customer Care Solutions Organizer End-User Privacy Data QR Code - Tickets Encrypted Various Payment Flexible Courier Services Customer Care Methods Seat Selection 024 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE MANAGEMENT DISCUSSION AND ANALYSIS cont’d RISK MANAGEMENT PARTNERSHIP (RMP) The Risk Management Partnership (RMP) program is a new business module we are introducing which provides the PRVWFRVWHHFWLYHVROXWLRQVWRVXSSRUWORFDORUJDQL]HUV503RHUVDQDOOLQRQHSDFNDJHIRUHTXLSPHQWZKHUH the entirety of the needs for concerts and events are provided exclusively to our partners whilst also boasting a remarkably low production cost. We believe the RMP program will encourage organizers to conduct more events and concerts in Malaysia. With this, we hope to increase the tourism industry of our country. Level Up Plus, Macpie Ticketing, and Macpie Equipment will work together as a team to enable the Risk Management Partnership business module to be successful. Mission Vision 7R RHU PRUH RSSRUWXQLWLHV WR WKH HQWLUH 7R FRQWLQXH WR VWULYH KDUGHU WR GLVSHQVH HHFWLYH entertainment industry to allow the organization of production costs for organizers to run more events various events at minimum production costs. and concerts in Malaysia without any constraints. MACPIE BERHAD 2020 ANNUAL REPORT 025 CORPORATE GOVERNANCE MANAGEMENTMAA DIDISCUSSIONI AND ANALYSIS cont’dcontt ANALYSISA OF FINANCIAL RESULTS 7KH*URXSKDVUHFRUGHGDUHYHQXHRI50 PLOOLRQIRUWKHȴQDQFLDO\HDUHQGHG-XQH Ȇ)<(ȋ DV FRPSDUHGWR50PLOOLRQLQȴQDQFLDO\HDUHQGHG-XQH Ȋ)<( ȋ UHFRUGLQJDGHFUHDVHRI50 PLOOLRQ 7KH GHFUHDVH LQ UHYHQXH ZDV PDLQO\ DHFWHG E\ WKH &RYLG SDQGHPLF ZKLFK KDV UHVXOWHG VLJQLȴFDQWGHFOLQHLQWKHSHUIRUPDQFHRIWKHEXVLQHVVPDLQO\IURPHYHQWDQGOHDVLQJVHJPHQWVDQGSDUWLDOO\ZDV due to the cessation of the hydraulic segment which was disposed on FYE 2019. 7KH*URXSKDVUHFRUGHGLQFUHDVHGLQ/$7E\DSSUR[LPDWHO\50PLOOLRQRUWRDSSUR[LPDWHO\50 million for the FYE 2020 mainly due to impairment losses of RM6.08 million, contributed mainly from the event segment (approximately RM4.60 million) arising from the postponement of some events which were scheduled to be held. RESULTS OF OPERATIONS Revenues were generated through the respective segments as follows: 2020 2019 Revenue Revenue Event 13,303 16,674 ICT 43,747 49,635 Hydraulic - 4,545 Leasing & Finance Solution 7,846 14,176 Others 38 569 The ICT segment remains our largest contributor of revenue representing RM43.75 million, translating to a GHFUHDVHRI50 PLOOLRQ FRPSDUHGWRWKH*URXSȇVUHYHQXHIRUWKLVVHJPHQWLQ)<( 7KLVVHJPHQW is mainly driven by the mobile devices distribution and services rendered as telecommunication operators’ value adding partner. Ζ&7 VHJPHQWUHFRUGHGD 3URȴW$IWHU 7D[ Ȇ3$7ȋ RI 50 PLOOLRQ 3$7RI 50 7KH LPSURYHPHQWRI FXUUHQWȴQDQFLDO\HDUZDVPDLQO\DWWULEXWHGWRWKHFRQWLQXLW\RIWKHFRVWHHFWLYHQHVVPHDVXUHWDNHQWRZDUGVHQG RISUHYLRXVȴQDQFLDO\HDURQFHUWDLQEXVLQHVVRSHUDWLRQVLQUHGXFLQJWKHDGPLQLVWUDWLYHDQGRSHUDWLQJH[SHQVHV for FYE 2020. The Event segment is the second largest contributor of revenue representing RM13.30 million. This segment’s revenue is mainly derived from concerts, entertainment events in Malaysia and equipment for rental as a service go various other companies and event organizers. This segment recorded a LAT of RM7.87 million (2019: PAT 0.32 million). $66(76$1'/Ζ$%Ζ/Ζ7Ζ(6 The Group’s total assets have slightly decreased from RM64.41 million in FYE 2019 to RM51.15 million in FYE 2020. The decrease mainly due to drop in cash and cash equivalents which had been utilised to support business RSHUDWLRQRIERWKΖ&7VHJPHQWDQGHYHQWVHJPHQW7KLVUHGXFWLRQLVDOVRSDUWLDOO\RVHWZLWKWKHUHFRJQLWLRQRI right-of-use assets in accordance with the adoption of new accounting standard of MFRS 16, leases. The Group’s total liabilities has decreased from RM15.36 million in FYE 2019 to RM11.15 million in FYE 2020. This was mainly due to decrease of contract liabilities attributed from event segment. 026 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE MANAGEMENT DISCUSSION AND ANALYSIS cont’d CASH FLOW )RUWKH)<(WKH*URXSQHWFDVKȵRZVWDWXVUHFRUGHGDQHWFDVKRXWȵRZRI50 PLOOLRQDVFRPSDUHGWR DQHWFDVKLQȵRZRI50 PLOOLRQIRUWKH)<( 7KHGHȴFLWRIFDVKȵRZPDLQO\DWWULEXWHGWRWKHDGGLWLRQDO business investment in the subsidiaries and partially attributed to the acquisition of property, plant and equipment. PROSPECTS AND FUTURE OUTLOOK The Covid-19 pandemic has adversely impacted the overall economy in Malaysia and the Group is not spared from the negative effects of the pandemic. The closure of arts, entertainment and recreation premises, prohibitions of large-scale events and gathering, closing of country borders and implementation of domestic and international travel restrictions have caused many entertainment events and activities to be cancelled or postponed, making the entertainment industry one of the hardest hit industries during the Covid-19 pandemic. The availability and accessibility of entertainment content and information on the internet fuels desires for live experience of their preferred entertainment, thus contributing to the demand for entertainment events and subsequently driving the growth of the entertainment industry in Malaysia. The Group’s ICT segment continue to be the preferred choice of major telecommunication operators to manage WKHLUSURFXUHPHQWRIPRELOHGHYLFHVDQGIXOȴOOPHQWRIGLVWULEXWLRQVHUYLFHVWRWKHLUHQGXVHUV7RUHPDLQDJLOH the segment will continue to embrace digitization solution to improve on productively and continue provide greater service to the customer. )LQDQFLDO VROXWLRQ VHJPHQW LV HVVHQWLDO LQ VXSSRUWLQJ WR SURYLGH ȴQDQFLQJ WR 60(V EXVLQHVVHV %H\RQG WKH SDQGHPLF PLFURȴQDQFLQJ ZLOO DOVR KHOS EXVLQHVV WR VXVWDLQ GXULQJ EXVLQHVV F\FOLFDOLW\ DQG VHDVRQDOLW\ $V VXFK WKH*URXSZLOOFRQWLQXLW\WRJURZDQGH[SHQGLQJLWVEXVLQHVVLQȴQDQFLDOVROXWLRQVHJPHQW ANTICIPATED OR KNOWN RISKS The Group’s businesses are generally exposed to credit risk and competition risk. &UHGLW5LVN The uncertain global and modest domestic economics potentially post a challenge on the Group’s credit risk in relation to longer collections period and potentially lead to loss arising from unrecoverable trade receivables. The group will regularly review and evaluation of the credit status of trade receivables and working closely with the Group’s partners. &RPSHWLWLRQ5LVN ICT industry is highly competitive. The Group is competing with others well established market players for more business and market share. The Group believes that its ability to compete depends upon many factor within and outside it’s control, including SURGXFWVDQGVHUYLFHGLHUHQWLDWLRQSURGXFWGLVWULEXWLRQFKDQQHOVFXVWRPHUVHUYLFHVDOHVSULFLQJDQGPDUNHWLQJ HRUWV However, there can be no assurance by adopting the above measures; the Group will be able to response too changing market conditions or to maintain its competitiveness against current and future competitions. 'LYLGHQG 1RGLYLGHQGVKDYHEHHQSDLGE\WKH&RPSDQ\IRUWKHFXUUHQWȴQDQFLDO\HDU3D\PHQWRIDQ\IXWXUHGLYLGHQGVHQGVH is subject to the Company’s level of cash, indebtedness, retained earnings, capital expenditure and such othero matter, as the Board may deem relevant from time to time. MACPIE BERHAD 2020 ANNUAL REPORT 027 CORPORATE GOVERNANCE CORPORATE GOVERNANCE OVERVIEW STATEMENT This Corporate Governance Overview Statement provides the shareholders and other stakeholders an overview RIWKHFRUSRUDWHJRYHUQDQFHSUDFWLFHVRI0$&3Ζ(%HUKDG Ȋ0$&3Ζ(ȋRUȊWKH&RPSDQ\ȋ GXULQJWKHȴQDQFLDO\HDU HQGHG-XQH Ȋ)<ȋ 7KLV6WDWHPHQW LV SUHSDUHG LQ DFFRUGDQFHZLWK WKH$&( 0DUNHW /LVWLQJ 5HTXLUHPHQWV Ȋ/LVWLQJ5HTXLUHPHQWVȋ RI %XUVD0DOD\VLD6HFXULWLHV%HUKDG Ȋ%XUVD6HFXULWLHVȋ DQGWKH0DOD\VLDQ&RGHRI&RUSRUDWH*RYHUQDQFH Ȋ0&&*ȋ issued by the Securities Commission Malaysia. The Company had adopted 28 out of the total 32 recommended practices in the MCCG. The following are the recommended practices not adopted by the Company: 1. Practice 4.5 - The board discloses in its annual report the company’s policies on gender diversity, its targets DQG PHDVXUHV WR PHHW WKRVH WDUJHWV )RU /DUJH &RPSDQLHV WKH ERDUG PXVW KDYH DW OHDVW ZRPHQ directors. 3UDFWLFH 7KH ERDUG GLVFORVHV RQ D QDPHG EDVLV WKH WRS ȴYH VHQLRU PDQDJHPHQWȇV UHPXQHUDWLRQ FRPSRQHQWLQFOXGLQJVDODU\ERQXVEHQHȴWVLQNLQGDQGRWKHUHPROXPHQWV 3. Practice 11.2 - Large companies are encouraged to adopt integrated reporting based on a globally recognised framework. 4. Practice 12.3 - Listed companies with a large number of shareholders or which have meetings in remote locations should leverage technology to facilitate. 35Ζ1&Ζ3/($ %2$5'/($'(56+Ζ3$1'())(&7Ζ9(1(66 %RDUGV/HDGHUVKLS 7KH *URXS LV OHG E\ DQ H[SHULHQFH DQG HHFWLYH %RDUG $OO %RDUG PHPEHUV FDUU\ DQ LQGHSHQGHQW judgement to bear on issues of strategy, performance, resources and standards of conduct. 7KH%RDUGLVUHVSRQVLEOHIRUWKHVWHZDUGVKLSRIWKHEXVLQHVVDQGDDLUVRIWKH*URXSDQGFROOHFWLYHO\ UHVSRQVLEOH IRU GHOLYHU\ RI VXVWDLQDEOH YDOXH WR LWV VKDUHKROGHUV ΖQ GLVFKDUJLQJ LWV ȴGXFLDU\ GXWLHV and leadership functions, the Board has governed and set the strategic direction of the Group while exercising oversight on management. The Board ensured that it had set the appropriate tone at the top, providing thought leadership and championing good governance and ethical practices throughout the Group. 7KH %RDUG KDV GHOHJDWHG VSHFLȴF UHVSRQVLELOLWLHV WR WKH IROORZLQJ %RDUG &RPPLWWHHV DQG DGRSWHG 7HUPVRI5HIHUHQFHV Ȋ725Vȋ VHWWLQJRXWWKHPDWWHUVUHOHYDQWWRWKHFRPSRVLWLRQUHVSRQVLELOLWLHVDQG administration of these Committees: (a) Audit & Risk Management Committee (b) Nominating Committee (c) Remuneration Committee The Board receives reports of the proceedings and deliberations of the Board Committees where the Chairman of the Board Committees report to the Board on the key issues deliberated and the outcome of the Board Committee meetings. Minutes of the Board Committees meetings are presented to the Board for natation and endorsement. The TORs of the Board Committees are reviews as and when the need arises. The TORs are published on the Company’s website https://macpie.asia/. 6XVWDLQDELOLW\ The Board regularly reviews the strategic direction of the Group and the progress of the Group’s operations, taking into changes in the business and political environment and risk factors such as level of competition. 7KH JURXS KDV H[SDQGHG DQG GLYHUVLȴHG LWV EXVLQHVV DFWLYLWLHV WR WKH PXVLF DQG HQWHUWDLQPHQW industries. 028 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE CORPORATE GOVERNANCE OVERVIEW STATEMENT cont’d 35Ζ1&Ζ3/($ %2$5'/($'(56+Ζ3$1'())(&7Ζ9(1(66 cont’d %RDUGV/HDGHUVKLS cont’d 1.1 'LUHFWRUVȇ7LPH&RPPLWPHQW The Directors observe the recommendation of the MCCG that they are required to notify the Chairman before accepting any new directorship and to indicate the time expected to be spent on the new appointment. 7RHQVXUHWKDWWKH'LUHFWRUVKDYHWKHWLPHWRIRFXVDQGIXOȴOOWKHLUUROHVDQGUHVSRQVLELOLWLHVHHFWLYHO\ WKH\PXVWQRWKROGGLUHFWRUVKLSVDWPRUHWKDQȴYHSXEOLFOLVWHGFRPSDQLHVDQGPXVWEHDEOHWRFRPPLW VXɝFLHQWWLPHWRWKH&RPSDQ\ 7KH%RDUGLVVDWLVȴHGZLWKWKHOHYHORIWLPHFRPPLWPHQWJLYHQE\WKH'LUHFWRUVWRZDUGVIXOȴOOLQJWKHLU roles and responsibilities as Directors of the Company. This is evidenced by the attendance record of the Directors at Board meetings. %RDUG0HHWLQJV The Board met Six (6) times during the FY 2020. The attendance of the Board members at the meetings are as follows:- 1XPEHURI PHHWLQJV 'LUHFWRUV DWWHQGHG Lionel Vernon Yong Nguon Kee 6/6 Chong Ching Wai 6/6 Ng Chee Heng 6/6 Woon Sing Jiunn 5/6 Kenny Khow Chuan Wah (Resigned on 30.09.2020) 6/6 Lim Peng Tong (Resigned on 30.09.2020) 6/6 Leong Seng Wui (Resigned on 25.10.2019) 2/2 'LUHFWRUVȇ7UDLQLQJ In addition to the mandatory programmes as required by the Bursa Securities for newly appointed Director and in line with the constant changes in rules and regulations, information technology and business environment, all Directors are encouraged to attend continuous training conducted by highly competent professionals and which are relevant to the Group’s operations and business. MACPIE BERHAD 2020 ANNUAL REPORT 029 CORPORATE GOVERNANCE CORPORATE GOVERNANCE OVERVIEW STATEMENT cont’d 35Ζ1&Ζ3/($ %2$5'/($'(56+Ζ3$1'())(&7Ζ9(1(66 cont’d %RDUGV/HDGHUVKLS cont’d 1.1 'LUHFWRUVȇ7UDLQLQJ cont’d During FY2020, the trainings attended by the Directors were as follows: 1DPH 'HVFULSWLRQRI7UDLQLQJ 'DWH Lim Peng Tong z Demystifying the Diversity Conundrum: z 15 September 2019 (Resigned on The Road to Business Excellence by Bursa 30.09.2020) Malaysia z (YDOXDWLQJ(HFWLYHΖQWHUQDO$XGLW)XQFWLRQV z 17 October 2019 z SC AOB Conversation with Audit Committee z 8 November 2019 by SC z Introduction to Corporate Directorship by z 14 – 15 November 2019 ICDM z Seminar on Recent MFRS Development – z 10 December 2019 Practical Application Issues MFRS 15 and MFRS 16 z Training on Anti Bribery and Corruption z 25 May 2020 MACC Act S17A Ng Chee Heng z COVID-19: Recovery and Resilience – z 12 May 2020 Rethinking Workforce Strategy by PwC Malaysia Kenny Khow Chuan z COVID-19: Recovery and Resilience – z 12 May 2020 Wah (Resigned on Rethinking Workforce Strategy by PwC 30.09.2020) Malaysia Lionel Vernon Yong z 2019 IIA Malaysia Conference z 7 – 8 October 2019 Nguon Kee z IIA Corporate Liability, Adequate Procedures z 20 February 2020 and ISO 37001 Anti Bribery Management Systems z MIA Big Data Analytics and Business z 25 June 2020 Intelligence for Accountants and Finance Professionals Chong Ching Wai z COVID-19: Recovery and Resilience – z 12 May 2020 Rethinking Workforce Strategy by PwC Malaysia Woon Sing Jiunn z COVID-19: Recovery and Resilience – z 12 May 2020 Rethinking Workforce Strategy by PwC Malaysia Tang Boon Koon z SST & Financial Management z 5 – 6 September 2019 (Resigned on z Digital Marketing – Let the World Know Your z 26 – 27 September 2019 26.10.2020) Business z Seminar on recent MFRS Development – z 10 December 2019 MFRS 15 & 16 All the Directors have attended the Mandatory Accreditation Programme (MAP) prescribed by Bursa Securities. 030 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE CORPORATE GOVERNANCE OVERVIEW STATEMENT cont’d 35Ζ1&Ζ3/($ %2$5'/($'(56+Ζ3$1'())(&7Ζ9(1(66 cont’d %RDUGV/HDGHUVKLS cont’d 1.1 'LUHFWRUVȇ7UDLQLQJ cont’d To enable the Board to discharge the responsibilities in meeting the goals and objective of the Company, the Board has, among others, (a) reviewed, challenged and decided on management’s proposal for the Group and monitor its implementation by key senior management; (b) monitored and regular reviewed the strategic direction of the Group and the progress of the Group’s operations, taking into changes in the business and to determine the business being properly managed and supports long term value creation; (c) ensured there is a sound framework for internal controls and risk management; (d) ensured that key senior management has the necessary skills and experience and measures in place to ensure orderly succession planning within the Group. H HQVXUHGWKHLQWHJULW\RIWKHȴQDQFLDODQGQRQȴQDQFLDOUHSRUWLQJRIWKH*URXS I HQVXUHGWKDWWKH&RPSDQ\ȇVȴQDQFLDOVWDWHPHQWVDUHWUXHDQGIDLUDQGFRQIRUPWRWKHUHOHYDQW standards, rules and regulations. b 1.2 Chairman of the Board The Independent Non-Executive Chairman responsibilities include: b (a) provided overall leadership to the Board, without limiting the principle of collective responsibility for Board decisions; (b) chaired meetings of the Board in such a manner that will stimulate debate on the issues before WKH%RDUGDQGHQFRXUDJHWKHPRVWHHFWLYHFRQWULEXWLRQIURPHDFK'LUHFWRU7KHΖQGHSHQGHQW Non-Executive Chairman should ensure that the agenda and all necessary background paper are JLYHQWR'LUHFWRUVLQVXɝFLHQWWLPHWRDEOHWKHSDSHUVWREHDGHTXDWHO\ FRQVLGHUHG EHIRUH WKH PHHWLQJ b F UHYLHZHGWKHPLQXWHVRIPHHWLQJVRIWKH%RDUGEHIRUHPHHWLQJWRHQVXUHWKH\DFFXUDWHO\UHȵHFW the Board’s deliberations, and matters arising from the minutes and on which further action is required have been addressed; (d) monitored Board performance as a whole; (e) ensured membership of the Board is appropriately skilled to meet the needs of the Company; (f) assisted in Board discussions to address the key issues facing the Company; (g) initiated the establishment of Board Committees and ensuring that they achieve their objectives; K JXLGHG DQG SURPRWHG WKH RQJRLQJ HɝFDF\ DQG GHYHORSPHQW RI WKH %RDUG DQG LWV LQGLYLGXDO Directors; (i) fastened high corporate governance. MACPIE BERHAD 2020 ANNUAL REPORT 031 CORPORATE GOVERNANCE CORPORATE GOVERNANCE OVERVIEW STATEMENT cont’d 35Ζ1&Ζ3/($ %2$5'/($'(56+Ζ3$1'())(&7Ζ9(1(66 cont’d %RDUGV/HDGHUVKLS cont’d 7KH SRVLWLRQV RI WKH &KDLUPDQ DQG ([HFXWLYH 'LUHFWRU DUH KHOG E\ WZR GLHUHQFH LQGLYLGXDOV 7KH Chairman is responsible for the achievement of the Group’s strategic vision and also for leading the Board in its collective oversight of management while the Executive Director focuses on the business and day-to-day management of the Group and the implementation of the Board’s decisions. The distinct and separate roles of the Chairman and Executive Director; with a clear division of responsibilities, ensure a balance of power and authority, such that no one individual has unfettered SRZHUVRIGHFLVLRQPDNLQJDQGDUHFOHDUO\GHȴQHGLQWKH%RDUG&KDUWHU 1.4 Company Secretary 7KH%RDUGLVVXSSRUWHGE\TXDOLȴHG&RPSDQ\6HFUHWDULHV%RWK&RPSDQ\ 6HFUHWDULHVKDYHWHUWLDU\ HGXFDWLRQDQGDUHTXDOLȴHGWRDFWDV&RPSDQ\6HFUHWDULHVXQGHU6HFWLRQ RIWKH&RPSDQLHV$FW 2016. The Company Secretaries provide guidance to the Board on matters relating to the company law, rules and regulations of the regulatory authorities as well as best practices on governance. The Board has unrestricted access to the advice and services of the Company Secretaries. The Company Secretaries record, prepare and circulate the minutes of meetings of the Board and %RDUG&RPPLWWHHVDQGHQVXUHVXFKPLQXWHVDUHSURSHUO\NHSWDWWKHUHJLVWHUHGRɝFHRIWKH&RPSDQ\ and produced for inspection, if required. They are also responsible for the proper maintenance of secretarial records, preparation of resolutions and other secretarial functions of the Company. During the FY2020, the Company Secretaries had attended various seminars and conferences to keep themselves abreast with the regulatory changes and other areas namely sustainability, governance, ȴQDQFHWD[DQGQHZDFFRXQWLQJVWDQGDUGV 1.5 The Board meeting materials are circulated to Directors at least 7 days prior to each Board meeting to enable Board members to facilitate informed and timely decision making. All Board members UHYLHZHGDQGFRQȴUPHGWKHPLQXWHVRIWKHPHHWLQJVWRHQVXUHWKH\DFFXUDWHO\UHȵHFWWKHGHOLEHUDWLRQV and decisions of the Board, including whether any Director abstained from voting or deliberate on a particular matter. Board members have complete and unhindered access to the Management and Company Secretary at all times. Management personnel are invited to attend Board meetings and the Board may consult with other employees of the Group and seek additional information, where necessary. Likewise, the Directors also have access to independent professional advice whenever such services are needed to assist them in carrying out their duties at the Company’s expense. 'HPDUFDWLRQRI5HVSRQVLELOLWLHVRIWKH%RDUG%RDUG&RPPLWWHHVDQG0DQDJHPHQW 2.1 The Board is guided by the Board Charter, which set out amongst the responsibilities, authorities, procedures, evaluation and structures of the Board and Board Committees as well as the relationship between the Board with its management and shareholders. The Board Charter was last reviewed on 22 October 2020 and updated on the Company’s website at https://macpie.asia/ Notwithstanding that the Board Charter is subject to periodic review to ensure their relevance and compliance. 032 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE CORPORATE GOVERNANCE OVERVIEW STATEMENT cont’d 35Ζ1&Ζ3/($ %2$5'/($'(56+Ζ3$1'())(&7Ζ9(1(66 cont’d *RRG%XVLQHVV&RQGXFWDQG+HDOWK\&RUSRUDWH&XOWXUH 3.1 The Directors are expected to conduct themselves with the highest ethical standards by setting the appropriate tone at the top, providing thought leadership and championing good governance and ethical practices throughout the Group. All Directors and employees are expected to behave ethically and professionally at all times and thereby protect and promote the reputation and performance of the Group. The Company has adopted a Code of Conduct and Ethics, which can be viewed on the Company’s website https://macpie.asia/ . 3.2 The Company’s Whistleblowing Policy encourages its employee to raise genuine concerns about positive improprieties in matters of compliance, suspected violations of the Code of Conduct and Ethics and to disclose any improper conduct or other malpractices within MACPIE Group. The Policy is to provide communication channels for employee of the Group and agents, suppliers, consumers and related third party to raise concerns about the improper conduct within the Group DQGWRRHUSURWHFWLRQIRUVXFKSHUVRQV LQFOXGLQJWKHHPSOR\HHVRIWKH*URXS ZKRFDQUHSRUWVXFK allegations in person to its Executive Director or in writing to the Independent Non-Executive Chairman. The Whistleblowing Policy is published on the Company’s website https://macpie.asia/. The Board Charter, Code of Conduct and Ethics and Whistleblowing Policy were reviewed on 22 October 2020. %RDUGȇV2EMHFWLYLW\ 4.1 For FY2020, the Board comprised two (2) Executive Directors and four (4) Independent Non-Executive Directors (including the Non-Executive Chairman). More than half of the Board of Directors are Independent Directors. %\KDYLQJPRUHWKDQKDOIRI%RDUGFRPSULVHGRIΖQGHSHQGHQW'LUHFWRUVLWSURYLGHVDQHHFWLYHFKHFN and balance in the functioning of the Board. In the event of any vacancy in the Board resulting in non-compliance with Rule 15.02(1) of Listing 5HTXLUHPHQWVWKHFRPSDQ\PXVWȴOOWKHYDFDQF\ZLWKLQPRQWKV 4.2 As at 30 June 2020, none of the Independent Directors of the Company served more than nine (9) years. However, if the Board intends to retain an Independent Director beyond nine (9) years, the Board will justify and seek annual shareholders’ approval appropriately. 4.3 The Board has not adopted a policy which limits the tenure of its Independent Directors to nine (9) years. 7KH 1RPLQDWLQJ &RPPLWWHH Ȋ1&ȋ LV UHVSRQVLEOH IRU HQVXULQJ WKDW WKH %RDUG KDV WKH DSSURSULDWH balance composition and size, the required skills mix, experience, and other core competencies; and is also responsible for considering and recommending the appointment of new Directors to the Board. 7KHȴQDOGHFLVLRQRQWKHDSSRLQWPHQWRIDFDQGLGDWHUHFRPPHQGHGE\1&UHVWVZLWKWKHZKROH%RDUG As at 30 June 2020, the NC comprised three (3) members, all of them are Independent Non-Executive Directors:- Chairman: Lionel Vernon Yong Nguon Kee (Independent Non-Executive Director) Members: Lim Peng Tong (Independent Non-Executive Director) Chong Ching Wai (Independent Non-Executive Director) The NC assess the shortlisted candidate for his/her suitability before formally considering and recommending them to the Board and where applicable. MACPIE BERHAD 2020 ANNUAL REPORT 033 CORPORATE GOVERNANCE CORPORATE GOVERNANCE OVERVIEW STATEMENT cont’d 35Ζ1&Ζ3/($ %2$5'/($'(56+Ζ3$1'())(&7Ζ9(1(66 cont’d %RDUGȇV2EMHFWLYLW\ cont’d 4.4 In reviewing and recommending to the Board any new Director for appointment, the NC considers the followings: (i) Candidate independence for Independent Non- Executive Director. (ii) Candidate’s age, gender, education, knowledge and skills, experiences, integrity, professionalism and other relevant factors as may be determined by the NC which would contribute to the Board’s collective skills. LLL $ELOLW\WRIXOȴOWLPHFRPPLWPHQWLQSDUWLFXODUIRUΖQGHSHQGHQW1RQ([HFXWLYH'LUHFWRU (iv) The composition requirements for the Board and Board Committees. The NC will annually review its required mix of skills and experience and other qualities, including core competencies which the Director should bring to the Board. The NC ensures that all appointments of new Directors to the Board are proper and in compliance with the rules of the relevant authorities. Any appointment of additional Director will be made as and when it is deemed necessary by the existing Board with due consideration given to the mix skills, expertise DQGH[SHULHQFHLQWKHUHVSHFWLYHLQGXVWU\UHTXLUHGUHJDUGOHVVRIJHQGHUGLYHUVLW\IRUDQHHFWLYH%RDUG Pursuant to the Company’s Constitution, one third (1/3) of the Directors including the Executive 'LUHFWRUVKDOOUHWLUHIURPRɝFHSURYLGHGWKDWDOO'LUHFWRUVVKDOOUHWLUHDWOHDVWRQFHHYHU\WKUHH \HDUV EXW VKDOO EH HOLJLEOH IRU UHHOHFWLRQ 'LUHFWRUV ZKR ZHUH DSSRLQWHG GXULQJ WKH ȴQDQFLDO \HDU are subject to re-election by shareholders at the next Annual General Meeting held following their appointment. During the FY2020, the NC had assessed and recommended the re-election of Mr. Ng Chee Heng as an Executive Director and Mr. Chong Ching Wai as an Independent Non-Executive Director. 4.5 The Board is judicious of the gender diversity recommendation by MCCG in order to bring a variety of diverse opinions, prospective, skills, experiences, backgrounds and orientations to its discussions and its decision making processes and constructive debates at key senior management level. The Group is an equal opportunity employer thus any appointment to the Board or any employments are based on objective criteria, merit, experience and creditability on continuing basis and, may not be limited to gender, age, ethnicity and cultural background. The Board views that the workplace and Boardroom diversity is important to facilitate the decision PDNLQJSURFHVVE\KDUQHVVLQJGLHUHQWLQVLJKWVDQGSHUVSHFWLYHV 4.6 Whenever there may be vacancy on the Board, be it for replacement or new addition, the NC will source it through their peers, networking and also get the recommendation from the management. 4.7 As at 30 June 2020, the NC was chaired by Mr. Lionel Vernon Yong Nguon Kee, an Independent Non- ([HFXWLYH 'LUHFWRU 7KH SURȴOH RI 0U /LRQHO 9HUQRQ 034 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE CORPORATE GOVERNANCE OVERVIEW STATEMENT cont’d 35Ζ1&Ζ3/($ %2$5'/($'(56+Ζ3$1'())(&7Ζ9(1(66 cont’d 2YHUDOO(HFWLYHQHVVRIWKH%RDUGDQGΖQGLYLGXDO'LUHFWRU The Board through the NC to perform a formal and objective annual assessment to determine the HHFWLYHQHVVRIWKH%RDUGDVDZKROHWKH%RDUG&RPPLWWHHVDQGWKHFRQWULEXWLRQRILQGLYLGXDOGLUHFWRUE\ way of questionnaires. The results of the annual assessment are compiled by the Secretary, and presented to the NC for evaluation, and subsequently tabled to the Board for deliberation. 'XULQJWKH)<WKH1&KDGDVVHVVHGWKHHHFWLYHQHVVRIWKH%RDUGDVDZKROHDQGLWV&RPPLWWHHV7KH NC, after considered among others the following factors had recommended the composition of the Board and Board Committees to remain unchanged: z Mix of skills and knowledge; z Diversity; z Capabilities and objectivities; z Activities in the boardroom activities; and z Performance of the Board Committees. The NC also assessed the directors based on the self-assessments questionnaires completed by the LQGLYLGXDOGLUHFWRUVDQGZDVVDWLVȴHGWKHUHZLWKΖQWKHLUDVVHVVPHQWVWKH1&WRRNLQWRFRQVLGHUDWLRQDPRQJ others but not limited to the character, integrity, personality, independence and contribution of the each director. /HYHODQG&RPSRVLWLRQRI5HPXQHUDWLRQ 7KH 5HPXQHUDWLRQ &RPPLWWHH Ȋ5&ȋ KDV EHHQ HQWUXVWHG E\ WKH %RDUG WR GHWHUPLQH WKDW WKH OHYHO RI UHPXQHUDWLRQLVVXɝFLHQWWRDWWUDFWDQGUHWDLQ'LUHFWRUVRITXDOLW\UHTXLUHGWRPDQDJHWKHEXVLQHVV of the Group. The RC is entrusted under its terms of reference to assist the Board, amongst others, to recommend to the Board the remuneration of Executive Directors. In the case of Non-Executive 'LUHFWRUVWKHOHYHORIUHPXQHUDWLRQVKDOOUHȵHFWWKHH[SHULHQFHDQGOHYHORIUHVSRQVLELOLWLHVXQGHUWDNHQ by the Non-Executive Directors concerned. In all instances, the deliberations are conducted, with the Directors concerned abstaining from discussions on their individual remuneration. 6.2 The RC carried out an annual review of the Directors’ remunerations packages with regards to each Director’s role, responsibilities, and expertise, taking into consideration of the Company’s business performance of the Group whereupon recommendations are submitted to the Board for approval. 6XFKDQQXDOUHYLHZVVKDOOHQVXUHWKDWWKHUHPXQHUDWLRQSDFNDJHRIWKH'LUHFWRUVUHPDLQVVXɝFLHQWO\ attractive to attract and retain Directors of such caliber to provide the necessary skills and experience to drive the Group’s long term objectives. MACPIE BERHAD 2020 ANNUAL REPORT 035 CORPORATE GOVERNANCE CORPORATE GOVERNANCE OVERVIEW STATEMENT cont’d 35Ζ1&Ζ3/($ %2$5'/($'(56+Ζ3$1'())(&7Ζ9(1(66 cont’d 5HPXQHUDWLRQRI'LUHFWRUVDQG.H\6HQLRU0DQDJHPHQW 7.1 The Directors’ remuneration for FY 2020 is as follows:- Group 6DODU\ ERQXVDQG EHQHȴWLQ 'LUHFWRUVȇ NLQG IHHV $OORZDQFH 7RWDO &DWHJRU\ (RM) (RM) (RM) (RM) ([HFXWLYH'LUHFWRUV Kenny Khow Chuan Wah (Resigned on 30.09.2020) 124,058 34,500 - 158,558 Ng Chee Heng 262,805 34,500 4,500 301,805 1RQ([HFXWLYH'LUHFWRUV Lim Peng Tong (Resigned on 30.09.2020) - 34,500 - - Lionel Vernon Yong Nguon Kee - 34,500 - - Chong Ching Wai - 34,500 - - Woon Sing Jiunn - 34,500 - - 7.2 Remuneration to Key Senior Management 5DQJHRI5HPXQHUDWLRQ 50 1XPEHURI.H\6HQLRU0DQDJHPHQW 0-100,000 101,000-200,000 201,000-300,000 1 301,000-400,000 401,000-500,000 501,000-600,000 601,000-700,000 The Board is of the opinion that it would not be in the best interest of the Group to disclose the level of remuneration paid to senior management on a named basis given the competitive human resource environment for personnel with requisite knowledge and experience in the industry. 35Ζ1&Ζ3/(% ())(&7Ζ9($8'Ζ7$1'5Ζ6.0$1$*(0(17 (HFWLYHDQGΖQGHSHQGHQW$XGLW&RPPLWWHH 7KH $XGLW 5LVN 0DQDJHPHQW &RPPLWWHH Ȋ$&ȋ ZDV HVWDEOLVKHG WR IXOILOO WKH SULQFLSOHV RI accountability, integrity and good corporate governance in assisting the Board independently in GLVFKDUJLQJLWVUHVSRQVLELOLWLHVRIUHYLHZLQJDQGPRQLWRULQJWKH*URXSȇVȴQDQFLDOSURFHVVDXGLWSURFHVV statutory and regulatory compliance, code of business conduct, and other matters that the Board or the relevant authorities may specially delegate to the AC. As at 30 June 2020, the AC was chaired by Mr. Lionel Vernon Yong Nguon Kee an Independent Non- Executive Director and he is not the Chairman of the Board. The Chairman of the Board was Mr Lim Peng Tong, an Independent Non-Executive Director. 036 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE CORPORATE GOVERNANCE OVERVIEW STATEMENT cont’d 35Ζ1&Ζ3/(% ())(&7Ζ9($8'Ζ7$1'5Ζ6.0$1$*(0(17 cont’d (HFWLYHDQGΖQGHSHQGHQW$XGLW&RPPLWWHH cont’d 8.2 In line with Practice 8.2, the Board had amended the Terms of Reference of the AC that requires a IRUPHUNH\DXGLWSDUWQHUWRREVHUYHDFRROLQJRSHULRGRIDWOHDVW\HDUVEHIRUHEHLQJDSSRLQWHGDVD member of the AC. In FY2020, none of the members of the Board was a former key audit partner of the Group. 8.3 The AC conducts an annual assessment to consider the suitability, objectivity, and independence of the DXGLWȴUPEDVHGRQWKHIROORZLQJV (i) Independence, objectivity and professional skepticism. (ii) Communication and interaction. LLL 4XDOLW\RIVNLOOVFDSDELOLWLHVRIDXGLWWHDPDQGVXɝFLHQF\RIUHVRXUFHV %DVHG RQ WKH UHVXOWV RI WKH HYDOXDWLRQ WKH $& ZDV VDWLVȴHG ZLWK WKH SHUIRUPDQFH RI WKH H[WHUQDO auditors and thus, recommended to the Board their re-appointment as the external auditors of the Company at the forthcoming AGM in 27 November 2020. Grant Thornton Malaysia PLT has in their report on audit planning memorandum provide written assurance that they are independent throughout the conduct the audit engagement in accordance with the relevant professional and regulatory requirements. 8.4 As at 30 June 2020, the AC comprised all Independent Directors and this is in compliance with the Listing Requirements. 7KHPHPEHUVRIWKH$&FROOHFWLYHO\DUHȴQDQFLDOO\OLWHUDWHDQGKDYHWKHQHFHVVDU\VLONVDQGH[SHULHQFH and able to understand Company’s business and matter under the purview of the AC including the financial reporting process. They have continuously applied a critical and probing view on the &RPSDQ\ȇV ȴQDQFLDO UHSRUWLQJ SURFHVV WUDQVDFWLRQV DQG RWKHU ȴQDQFLDO LQIRUPDWLRQ DQG HHFWLYHO\ FKDOOHQJHGPDQDJHPHQWȇVDVVHUWLRQVRQWKH&RPSDQ\ȇVȴQDQFLDOVWRHQVXUHWKH4XDUWHUO\5HSRUWDQG WKH$QQXDO$XGLWHG)LQDQFLDO6WDWHPHQWVJLYHDWUXHDQGIDLUYLHZRIWKH&RPSDQ\ȇVȴQDQFLDOSRVLWLRQ As stated in the Directors’ training of Boards Leadership on Objectives and Goals of the Company, all the AC members have undertaken continuous professional development to keep themselves abreast with the latest development and changes to the regulatory requirements and practices to discharge WKHLUGXWLHVHHFWLYHO\ 7KH$&KDYLQJEHWWHUXQGHUVWDQGLQJRIWKHȴQDQFLDOUHJXODWLRQVDQGUHTXLUHPHQWVLVHPSRZHUHGE\ WKH%RDUGWRUHYLHZWKH*URXSȇVȴQDQFLDOVWDWHPHQWVWRHQVXUHFRQIRUPDQFHZLWK0DOD\VLDQ)LQDQFLDO Reporting Standards, International Financial Reporting Standards and the requirements of Companies Act, 2016 in Malaysia. 7KH%RDUGLVFROOHFWLYHO\UHVSRQVLEOHWRHQVXUHWKDWWKHȴQDQFLDOVWDWHPHQWVWKHUHVXOWVDQGFDVKȵRZV ZLOO JLYH D FRPSUHKHQVLYH DQG IDLU YLHZ RI WKH *URXSȇV ȴQDQFLDO SRVLWLRQ DW WKH HQG RI WKH UHOHYDQW ȴQDQFLDO\HDU The Directors are responsible for ensuring that proper accounting records are kept with reasonable DFFXUDF\WKHGLVFORVXUHRIȴQDQFLDOSRVLWLRQRIWKH*URXSDQGWKHȴQDQFLDOVWDWHPHQWVDUHSUHSDUHGLQ accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of Companies Act, 2016 in Malaysia. The Directors also have the overall responsibilities for taking such reasonable steps to safeguard the assets of the Group and to take measures to prevent and detect frauds and other irregularities. The Board believes they have applied all appropriate accounting policies on a consistent and prudent EDVLV DQG PDGH UHDVRQDEOH DQG QHFHVVDU\ MXGJPHQWV DQG HVWLPDWHV WR HQVXUH WKDW WKH ȴQDQFLDO VWDWHPHQWVIRU WKHȴQDQFLDO \HDU HQGHG -XQH SURYLGH D WUXH DQG IDLU YLHZ RI WKH &RPSDQ\ȇV ȴQDQFLDOSRVLWLRQDQGDDLUV MACPIE BERHAD 2020 ANNUAL REPORT 037 CORPORATE GOVERNANCE CORPORATE GOVERNANCE OVERVIEW STATEMENT cont’d 35Ζ1&Ζ3/(% ())(&7Ζ9($8'Ζ7$1'5Ζ6.0$1$*(0(17 cont’d 5LVN0DQDJHPHQWDQGΖQWHUQDO&RQWURO 9.1 The Board through the AC reviews the adequacy of the Group’s risk management framework to ensure risk management and internal controls are in place. The Group had adopted a risk management framework to enhance its risk management capabilities. Key risks, control measures and management actions are continually identified, reviewed and monitored as part of the risk management framework. 7KH$&UHSRUWVWRWKH%RDUGSHULRGLFDOO\RQWKH*URXSȇVULVNSURȴOHLQFOXGLQJDFWLRQVXQGHUWDNHQE\WKH PDQDJHPHQWWRPDQDJHRUPLWLJDWHWKHULVNVLGHQWLȴHG 9.2 Risk management is regarded as an important aspect of the Group’s operation. The Group has an on- going process for identifying, evaluating and managing principal risks. ΖQ)<WKHWRSSULQFLSDOULVNVLGHQWLȴHGZHUHDVIROORZV 1) Environmental and Business Continuity Risk 2) Loss of Good Reputation Risk 3) Financial Risk 4) New Product/Service Risk Further details on the features of the risk management and internal control framework are disclosed in the Statement of Risk Management and Internal Control of the Annual Report 2020. 9.3 The Board was of the view that it is not necessary to have a separate Risk Management Committee as the current role of the AC also assumes the responsibilities in risk management and internal control of the Group. The Audit Committee of the Company is now known as Audit & Risk Management Committee. As at 30 June 2020, the members of the AC comprised all Independent Directors. (HFWLYH*RYHUQDQFH5LVN0DQDJHPHQWDQGΖQWHUQDO&RQWURO)UDPHZRUN 10.1 The establishment of the Internal Audit Function provides the Directors and the AC with an LQGHSHQGHQW DVVHVVPHQW DQG DSSUDLVDOUHYLHZ RI WKH HHFWLYHQHVV DQG UHOLDELOLW\ RI WKH *URXSȇV internal controls and information system. The internal audit function includes the review, assessment and provision of reasonable assurance that the Group’s internal controls are functioning as planned and able to highlight all material deviation or ȴQGLQJVWRWKH$&LPPHGLDWHO\7RPDLQWDLQLPSDUWLDOLW\DQGLQGHSHQGHQFHWKHLQWHUQDODXGLWRUVUHSRUW directly to the AC on the overall assessment of the Group’s internal control mechanism. Internal Audit reports were issued to the AC to be tabled at the AC meetings. The reports are also issued to the respective operations management, incorporating audit recommendations and 0DQDJHPHQW UHVSRQVH ZLWK UHJDUGV WR DQ\ DXGLW ȴQGLQJV RQ WKH ZHDNQHVVHV LQ WKH V\VWHPV DQG controls of the operations. The internal auditors will also follow up with Management on the implementation of the agreed audit recommendations. In FY 2020, the Group outsourced its internal audit function to an independent professional internal audit service provider. The role of the internal audit function, which reports directly to the AC, is to support the AC in discharging its responsibilities by providing independent and objective reports on WKH DGHTXDF\ DQG HHFWLYHQHVV RI WKH V\VWHP RI WKH LQWHUQDO FRQWURO DQG WKH H[WHQW RI FRPSOLDQFH with the procedures and by recommending ways to rectify shortfall and improve the existing control HQYLURQPHQW LQ UHODWLRQ WR WKH *URXSȇV RSHUDWLRQV 7KH ΖQWHUQDO $XGLWRUV VXEPLW WKHLU ȴQGLQJV DQG recommendations to the AC and key senior management of the Group. 038 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE CORPORATE GOVERNANCE OVERVIEW STATEMENT cont’d 35Ζ1&Ζ3/(% ())(&7Ζ9($8'Ζ7$1'5Ζ6.0$1$*(0(17 cont’d (HFWLYH*RYHUQDQFH5LVN0DQDJHPHQWDQGΖQWHUQDO&RQWURO)UDPHZRUNcont’d 'XULQJ)<WKH$&KDGUHYLHZHGDQGDVVHVVHGΖ$(VVHQWLDO6GQ%KGDQGZDVVDWLVȴHGWKHUHZLWK The AC had recommended to the Board, the re-appointment of IA Essential Sdn Bhd for another term. 7KHΖQWHUQDO$XGLWRUVDGRSWD&262)UDPHZRUNDQGULVNEDVHGDSSURDFKZLWKIRFXVRQHHFWLYHULVN management practices and is guided under the International Professional Practice Framework. During FY 2020, IA Essential Sdn Bhd had assigned 3 internal auditors to undertake the internal audit of the Group. Mr. Chong Kian Soon is the Executive Director-in-charge of the internal audit of the *URXS+HLVDPHPEHURIWKH0DOD\VLDQΖQVWLWXWHRI$FFRXQWDQWV0DOD\VLDQΖQVWLWXWHRI&HUWLȴHG3XEOLF Accountants and Institute of Internal Auditors Malaysia. None of the persons involved in the internal audit functions have any family relationship with the 'LUHFWRUVRU&RPSDQ\ZKLFKFRXOGUHVXOWLQWKHFRQȵLFWRILQWHUHVWDQGRULPSDLUPHQWRIWKHREMHFWLYLW\ and independence during the internal audit review. PRINCIPLE C : INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS (HFWLYH&RPPXQLFDWLRQZLWK6WDNHKROGHUV 7KH%RDUGUHFRJQL]HVWKHLPSRUWDQWRIHHFWLYHFRPPXQLFDWLRQZLWKLWVLQYHVWRUVDQGVKDUHKROGHUVDV a key component to uphold the principles and best practices of corporate governance for the Group. As such, the need to establish corporate disclosure policies and procedures between the Company and the regulators, shareholders and stakeholders is important to build the trust and understanding between the Company and the stakeholders. On this basis, the Board exercises close monitoring of all price sensitive information potentially required to be released to Bursa Securities and makes material announcements to Bursa Securities in a timely manner as requested. In line with best practices, the Board strives to disclose price sensitive information to the public as soon as practicable through Bursa, the media and the Company’s website. The Board has authorized the Executive Director to co-ordinate with the Company Secretary to verify and approve all announcements before releasing to the public. The following communication channels are mainly used by the Company to disseminate information on a timely basis to the shareholders and the investing public: (a) Group’s corporate proposals, quarterly and annual financial results and other required announcements are available on website at https://macpie.asia/ and www.bursamalaysia.com; (b) Press release provides up-to-date information on the Group’s key corporate initiatives and investments if any; F $QQXDO *HQHUDO 0HHWLQJ Ȋ$*0ȋ SURYLGHV D IRUXP WR HQJDJH ZLWK 'LUHFWRUV DQG NH\ VHQLRU management to share viewpoints and acquire information on issues relevant to the Group. 11.2 The Company is not categorized as large company under the MCCG and has not adopted the integrated reporting based on a globally recognized framework. MACPIE BERHAD 2020 ANNUAL REPORT 039 CORPORATE GOVERNANCE CORPORATE GOVERNANCE OVERVIEW STATEMENT cont’d PRINCIPLE C : INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS cont’d &RQGXFWRI*HQHUDO0HHWLQJV 12.1 The Board had adopted Practice 12.1 to issue the notice of AGM to shareholders at least 28 days prior to the meeting. The additional time given will allow shareholders to make necessary arrangements to attend and participate in person or through proxies or corporate representatives and also to consider the proposed resolutions before exercising their voting rights at the meeting. 12.2 The Board had adopted Practice 12.2 that all its members including key senior management to attend the general meeting of the Company and to respond to shareholders’ enquiries, if any. At the last AGM of the Company held on 29 November 2019, all the Directors and Senior Management were present at the said meeting. 12.3 The Board is of the view that the existing procedures or practice of the Company had provided VKDUHKROGHUV ZLWK VXɝFLHQW LQIRUPDWLRQ WR PDNH DQ LQIRUPHG GHFLVLRQ DQG WKH VXɝFLHQW WLPH WR deposit the proxy form for poll voting or to participate in person at general meetings. $OWHUQDWHSUDFWLFHVDUHDVIROORZV a) The notice of AGM and proxy form are despatched to shareholders not less than 28 days before the date appointed for holding the AGM. For general meetings other than the AGM, the Company despatches the notice of meeting at least 21 days for special resolution and 14 days for ordinary resolution. b) The explanatory notes to the notice of AGM and/or the contents of circular to shareholders provide detailed explanation of the proposed resolutions to enable shareholders to make informed decisions in exercising their voting rights. c) Shareholders are allowed to appoint any person as proxies to attend and vote at the general PHHWLQJ7KHFRPSOHWHGSUR[\IRUPLVWREHGHSRVLWHGDWWKHUHJLVWHUHGRɝFHRIWKH&RPSDQ\ not less than 48 hours before the time for holding the meeting or adjournment thereof and in the case of a poll, at least 24 hours before the time for the taking of the poll at the general meeting. d) All the resolutions put to the general meeting are voted upon by poll and the poll counting SURFHVVDQGYHULȴFDWLRQVDUHFRQGXFWHGE\LQGHSHQGHQWVFUXWLQHHUV e) The Company held its general meetings at the time and venue which were convenient and easily accessible to all shareholders. General meetings of the Company remain important avenues for the Board and Management to have better engagement with the shareholders present. This Statement is made in accordance with the resolution of the Board dated 22 October 2020. 040 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL 67$7(0(17$%2877+(67$7(2)5Ζ6.0$1$*(0(17$1'Ζ17(51$/&21752/ The Malaysian Code on Corporate Governance stipulates that the Board of Directors of listed companies should maintain a sound system of internal control to safeguard shareholders’ investment and the Group’s assets. The Board of Directors of Macpie Berhad is pleased to provide the following statement on the state of risk management and internal control of the Group, which has been prepared with reference to the Statement on Risk 0DQDJHPHQWDQGΖQWHUQDO&RQWURO *XLGHOLQHVIRU'LUHFWRUVRI/LVWHGΖVVXHUV Ȋ7KH*XLGHOLQHVȋ 5(63216Ζ%Ζ/Ζ7<)255Ζ6.0$1$*(0(17$1'Ζ17(51$/&21752/ The Board recognises the importance of good risk management practices and sound internal control as a platform to good corporate governance. The Board acknowledges its overall responsibility for maintaining a good sound system of risk management and internal control, and for reviewing its adequacy and integrity of such system. In addition, the Board has also received assurance from the Finance Director that the Group’s risk PDQDJHPHQWDQGLQWHUQDOFRQWUROV\VWHPLVRSHUDWLQJDGHTXDWHO\DQGHHFWLYHO\LQDOOPDWHULDODVSHFWV 'XH WR LQKHUHQW OLPLWDWLRQV LQ DQ\ ULVN PDQDJHPHQW DQG LQWHUQDO FRQWURO V\VWHP VXFK V\VWHP SXW LQWR HHFW by Management is designed to manage rather than eliminate the risk that may impede the achievement of the Group’s business objectives. Therefore, the risk management and internal control system can only provide reasonable and not absolute assurance against material misstatement or loss. RISK MANAGEMENT 7KH*URXSȇV ULVNDVVHVVPHQW SURFHVV ZDV GHYHORSHGZLWKWKH DVVLVWDQFHRI DSURIHVVLRQDOVHUYLFHVȴUP'XULQJ WKH ȴQDQFLDO \HDU 6HQLRU 0DQDJHPHQW UHYLHZV WKH H[LVWHQFH RI QHZ ULVNV DQG DVVHVVHV WKH UHOHYDQFH RI WKH *URXSȇVH[LVWLQJULVNSURȴOH6LJQLȴFDQWULVNVWKDWPD\DHFWWKH*URXSȇVEXVLQHVVREMHFWLYHVKDYHEHHQFRQWLQXDOO\ monitored. Whilst the Board maintains ultimate control over risk and control issues, the management of risks in WKH GDLO\ EXVLQHVV RSHUDWLRQV LV GHOHJDWHG WRPDQDJHPHQW WHDP DQG VLJQLȴFDQW ULVNV DUH LGHQWLȴHG DQG UHODWHG mitigating responses as well as the corresponding internal controls are discussed twice a year at the Audit Committee meetings. 7KH%RDUGDQGPDQDJHPHQWSUDFWLFH SURDFWLYH VLJQLȴFDQWULVNVLGHQWLȴFDWLRQRQD TXDUWHUO\EDVLVRU HDUOLHU DV appropriate, particularly on major proposed transactions, changes in nature of activities and/or operating HQYLURQPHQWRUQHZEXVLQHVVYHQWXUHVZKLFKPD\HQWDLOGLHUHQWULVNVDQGUHTXLUHULVNUHVSRQVHVWUDWHJLHVDQG controls to manage those risks to a level acceptable to the Board. The abovementioned practices serve as the on-going process adopted by the Board and management to identify, HYDOXDWHDQGPDQDJHVLJQLȴFDQWULVNVIDFHGE\WKH*URXSLQDFKLHYLQJWKHEXVLQHVVREMHFWLYHVDQGVWUDWHJLHV INTERNAL CONTROL MECHANISM The internal audit adopts a risk-based approach in developing its audit plan which addresses the core auditable DUHDV RI WKH *URXS EDVHG RQ WKHLU ULVN SURȴOH 7KH LQWHUQDO DXGLW IXQFWLRQ LV RXWVRXUFHG WR DQ LQGHSHQGHQW SURIHVVLRQDO VHUYLFHV ȴUP WKDW VSHFLDOL]HV LQ WKH SURYLVLRQ RI LQWHUQDO DXGLW VHUYLFHV 7KH FRVW LQFXUUHG LQ RXWVRXUFLQJWKHLQWHUQDODXGLWIXQFWLRQIRUWKHȴQDQFLDO\HDUHQGHG-XQHLVDW50 Scheduled internal audits are carried out by the outsourced internal audit function based on the audit plan approved by the Audit Committee. The audit focuses on areas with high risk to ensure that adequate controls are in place to manage the risk of businesses. The outsourced internal audit function meets and reports to the Audit Committee once a year on areas for improvement and subsequently performs follow up reviews to determine the extent of their recommendations that have been implemented. MACPIE BERHAD 2020 ANNUAL REPORT 041 CORPORATE GOVERNANCE STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL cont’d INTERNAL CONTROL MECHANISM cont’d Apart from risk management and internal audit, the Group also has put in place the following key elements of internal control: z $Q RUJDQL]DWLRQ VWUXFWXUH ZLWK ZHOOGHȴQHG VFRSHV RI UHVSRQVLELOLW\ FOHDU OLQHV RI DFFRXQWDELOLW\ DQG appropriate levels of delegated authority. The Executive Director or Finance Director lead all board papers presentation with the assistance of the respective Heads of Divisions and reports to all the Board on all SHUWLQHQWLVVXHVWKDWPD\DHFWWKH*URXSȇVEXVLQHVVHVDQGRSHUDWLRQV z A process of hierarchical reporting which provides for a documented and auditable trail of accountability; z $ VHW RI GRFXPHQWHG LQWHUQDO SROLFLHV DQG SURFHGXUHV IRU RSHUDWLRQDO ȴQDQFLDO DQG KXPDQ UHVRXUFH management, which is subject to a yearly review and improvement; z 4XDUWHUO\ DQG FRPSUHKHQVLYH LQIRUPDWLRQ SURYLGHG WR PDQDJHPHQW FRYHULQJ ȴQDQFLDO SHUIRUPDQFH IRU HHFWLYHPRQLWRULQJDQGGHFLVLRQPDNLQJ DQG z Regular visits to operating units by members of the Board and senior management. $ QXPEHU RI PLQRU LQWHUQDO FRQWURO ZHDNQHVVHV ZHUH LGHQWLȴHG GXULQJ WKH ȴQDQFLDO \HDU DOO RI ZKLFK KDYH been, or are being, addressed. None of the weaknesses have resulted in any material losses, contingencies or uncertainties that would require a separate disclosure in the Group’s Annual Report. The Board continues to review and implement measures to strengthen the internal control environment of the Group. REVIEW OF THIS STATEMENT The Board is of the view that the Group’s system of internal control is adequate to safeguard shareholders’ investment and the Group’s assets. However, the Board is also cognizant of the fact that the Group’s system of internal control and risk management practices must continuously evolve to meet the changing and challenging business environment. Therefore, the Board will, when necessary, put in place appropriate action plans to further enhance the system of internal control and risk management framework. The External Auditors have reviewed the Statement on Risk Management and Internal Control and reported to the Board that nothing has come to their attention that cause them to believe that the Statement on Risk Management and Internal Control is not prepared, in all material aspects, in accordance with the disclosure required by the Guidelines for Directors of listed issuers on the Statement on Risk Management and Internal Control. This statement is issued in accordance with a resolution of the Board of Directors dated 22 October 2020. 042 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE AUDIT & RISK MANAGEMENT COMMITTEE REPORT 7KH$XGLW 5LVN0DQDJHPHQW&RPPLWWHH Ȋ$&ȋ ZDVHVWDEOLVKHGWRIXOȴOWKHSULQFLSOHVRIDFFRXQWDELOLW\LQWHJULW\ and good corporate governance in assisting the Board independently in discharging its responsibilities of UHYLHZLQJDQGPRQLWRULQJWKH*URXSȇVȴQDQFLDOSURFHVVDXGLWSURFHVVVWDWXWRU\DQGUHJXODWRU\FRPSOLDQFHFRGH of business conduct, and other matters that the Board or the relevant authorities may specially delegate to the AC. The AC Report spells out the AC composition, terms of reference, summary of activities and/or any material ȴQGLQJVWKDWPD\KDYHDHFWHGWKH*URXSȇSHUIRUPDQFHFRQWUROVDQGRSHUDWLRQVGXULQJWKH\HDULQUHYLHZ 0(0%(56+Ζ3 &20326Ζ7Ζ21 The AC members are appointed by the Board amongst the Board members. The Chairman of the AC shall be elected among its members who shall be an Independent Director. Alternate Directors shall not be members of the AC. In accordance with Rule 15.09 of the ACE Market Listing Requirement, the AC shall consist of a minimum of three (3) members, all of whom must be Non-Executive Directors. With majority of them being Independent Directors DQGDWOHDVWRQH PHPEHURIWKH&RPPLWWHHKDVWRIXOȴOWKHIROORZLQJFRQGLWLRQV (a) Must be a member of the Malaysia Institute of Accountants; or (b) If he is not a member of the Malaysian Institute of Accountant , he must have at least three (3) years working H[SHULHQFHLQWKHDFFRXQWLQJȴHOGDQG L 0XVWKDYHSDVVHGWKHH[DPLQDWLRQVSHFLȴHGLQ3DUWRIWKHVW6FKHGXOHRIWKH$FFRXQWDQWV$FW or LL +HPXVWEHDPHPEHURIRQHRIWKHDVVRFLDWLRQVRIDFFRXQWDQWVVSHFLȴHGLQ3DUWΖΖRIWKHVW6FKHGXOH of the Accountant Act 1976; or F )XOȴOVVXFKRWKHUUHTXLUHPHQWVDVSUHVFULEHGE\%XUVD0DOD\VLD6HFXULWLHV%HUKDG The current composition of AC is as follows:- Chairman : Andy Liew Hock Sim (Independent Non-Executive Director) Members : Lionel Vernon Yong Nguon Kee (Independent Non-Executive Director) Chong Ching Wai (Independent Non-Executive Director) MEETINGS AND ATTENDANCES 7KH$&KDVVFKHGXOHGWRPHHWDWOHDVWIRXU WLPHVLQHDFKȴQDQFLDO\HDUZLWKDWOHDVWWZR PHPEHUVSUHVHQW and the Company Secretary as the secretary of the AC. The AC may invite designated Directors, key senior management and the auditors (internal and external) to be present at their meetings. The minutes of each AC meeting will be circulated to all AC members as well as all Board members. 'XULQJ WKH )< WKHUH ZHUH ȴYH $& PHHWLQJV KHOG DQG ZHUH GXO\ DWWHQGHG E\ WKH PHPEHUV DV VKRZQ below: 1RRI0HHWLQJV 1DPHRI$&0HPEHUV $WWHQGHG Lionel Vernon Yong Nguon Kee 5/5 Lim Peng Tong (Resigned on 30.09.2020) 5/5 Chong Ching Wai 5/5 MACPIE BERHAD 2020 ANNUAL REPORT 043 CORPORATE GOVERNANCE AUDIT & RISK MANAGEMENT COMMITTEE REPORT cont’d SUMMARY OF WORK The works carried out by the AC during FY 2020 include the followings:- (i) Financial Reporting z 5HYLHZHGWKHTXDUWHUO\UHSRUWVDQGȴQDQFLDO\HDUHQGXQDXGLWHGȴQDQFLDOUHVXOWVRIWKH*URXSEHIRUH tabling to the Board for approval. z 5HYLHZWKHDXGLWHGȴQDQFLDOVWDWHPHQWRIWKH&RPSDQ\DQGWKH*URXSWRJHWKHUZLWKH[WHUQDODXGLWRUV prior tabling to the Board for approval. The review was inter alia, to ensure compliance with: - Compliance with existing and new accounting standards, policies and practices. - Compliance with Listing Requirements of Bursa Malaysia Securities Berhad, the requirements of the Companies Act 2016 in Malaysia and other regulatory requirements. z ΖQWKHUHYLHZRIWKHȴQDQFLDO\HDUHQGDXGLWHGȴQDQFLDOVWDWHPHQWVWKH$&GLVFXVVHGZLWKPDQDJHPHQW and the external auditors the accounting principles applied and their judgement of the items that may DHFWWKHȴQDQFLDOVWDWHPHQWVDVZHOODVLVVXHVDQGUHVHUYDWLRQDULVLQJIURPWKHVWDWXWRU\DXGLWV (ii) Internal Audit z Reviewed and approved internal audit report which highlighted the audit issues and the management’s response and remedies actions to be taken by the management to rectify and improve the system of internal control. z Monitor the implementation programme proposed by the Internal Auditors arising from the audit in RUGHUWRREWDLQDVVXUDQFHWKDWDOONH\ULVNVDQGFRQWUROVEHHQIXOȴOV (iii) External Audit z Reviewed the External Auditors’ scope of work and audit plan for the year. z Discussed and deliberated on the External auditors’ report and recommendations regarding RSSRUWXQLWLHVIRULPSURYHPHQWWRWKHVLJQLȴFDQWULVNDUHDVLQWHUQDOFRQWURODQGȴQDQFLDOPDWWHUVEDVHG RQWKHREVHUYDWLRQPDGHLQWKHFRXUVHRILQWHULPDQGȴQDODXGLW z Reviewed the Audit Planning Memorandum presented by the external auditors. z 'LVFXVVHG RQ WKH VLJQLȴFDQW DFFRXQWLQJ DQG DXGLWLQJ LVVXHV LPSDFW RI QHZ RU SURSRVHG FKDQJHV LQ accounting standards and regulatory requirements. z The AC met with the external auditors twice during FY 2020 without the presence of the Executive Directors and Management. z 5HYLHZHG WKH HYDOXDWLRQ RQ WKH SHUIRUPDQFH DQG HHFWLYHQHVV RI WKH H[WHUQDO DXGLWRUV ZKLFK ZDV coordinated by the Company Secretary. The annual assessment was conducted with feedback obtained from the AC. The areas under the assessment were:- - Independence, objectivity and professional scepticism; - Communication and interaction; and 4XDOLW\RIVNLOOVFDSDELOLWLHVRIDXGLWWHDPDQGVXɝFLHQF\RIUHVRXUFHV %DVHG RQ WKH UHVXOWV RI WKH HYDOXDWLRQ WKH $& ZDV VDWLVȴHG ZLWK WKH SHUIRUPDQFH RI WKH H[WHUQDO auditors and thus, recommended to the Board the re-appointment of the external auditors at the forthcoming AGM of the Company. z 5HYLHZHGWKHZULWWHQFRQȴUPDWLRQRILQGHSHQGHQWIURPWKHH[WHUQDODXGLWRUVLQDFFRUGDQFHZLWKWKH applicable Malaysian regulatory and professional requirements. In respect of FY 2020, Grant Thornton 0DOD\VLD3/7KDVUHDɝUPHGWKHLULQGHSHQGHQFHWRDFWDV&RPSDQ\ȇVH[WHUQDODXGLWRUVLQDFFRUGDQFH with the relevant professional and regulatory requirements. 044 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE AUDIT & RISK MANAGEMENT COMMITTEE REPORT cont’d SUMMARY OF WORK cont’d (iv) Annual Report Reviewed the AC Report and Statement of Risk Management and Internal Control to ensure adherence to OHJDODQGUHJXODWRU\UHSRUWLQJUHTXLUHPHQWDQGDFFRXQWLQJPDWWHUVUHTXLULQJVLJQLȴFDQWMXGJHPHQW Y 5HFXUUHQW5HODWHG3DUW\7UDQVDFWLRQV Ȋ5537ȋ z Reviewed the RRPT review procedures and processes to monitor, trace & identify the RRPT in timely & orderly manner. z Reviewed the RRPT of a revenue or trading nature to ensure such transactions were carried out on arm’s length basis and not detriment to the minority interest of the Company. INTERNAL AUDIT FUNCTION The establishment of the Internal Audit Function provides the Directors and the AC with an independent assessment and appraisal/review of the effectiveness and reliability of the Group’s internal controls and information system. The internal audit function includes the review, assessment and provision of reasonable assurance that the *URXSȇVLQWHUQDOFRQWUROVDUHIXQFWLRQLQJDVSODQQHGDQGDEOHWRKLJKOLJKWDOOPDWHULDOGHYLDWLRQRUȴQGLQJVWRWKH AC immediately. To maintain impartiality and independence, the internal auditors report directly to the AC on the overall assessment of the Group’s internal control mechanism. 7RIXUWKHUGLVFKDUJHLWVGXWLHVDQGUHVSRQVLELOLWLHVHHFWLYHO\WKHLQWHUQDODXGLWRUVFDQREWDLQWKHDVVLVWDQFHRI WKHJURXSȇVNH\VHQLRUPDQDJHPHQWDQGVWDLQSURYLGLQJDOOWKHQHFHVVDU\LQIRUPDWLRQDVDQGZKHQUHTXLUHG During the FY 2020, the areas audited were covering areas in the full function and also the Enterprise Risk Management within the Group. Internal Audit reports were issued to the AC at least one (1) within a year to be tabled at the AC meetings. The reports are also issued to the respective operations management, incorporating audit recommendations and 0DQDJHPHQWUHVSRQVHZLWKUHJDUGVWRDQ\DXGLWȴQGLQJVRQWKHZHDNQHVVHVLQWKHV\VWHPVDQGFRQWUROVRIWKH operations. The internal auditors will also follow up with Management on the implementation of the agreed audit recommendations. The Group’s internal audit was carried out by an independent professional internal audit service provider appointed by the Board with the recommendation of the AC. The cost incurred for the internal DXGLWIXQFWLRQIRUWKHȴQDQFLDO\HDUHQGHG-XQHZDV50 STATEMENT ON EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”) 7KHDOORFDWLRQRI(626VKDOOEHYHULȴHGE\WKH$&IRUHDFKȴQDQFLDO\HDUWRHQVXUHFRPSOLDQFHZLWKWKHDOORFDWLRQ criteria determined by the ESOS Committee and in accordance with the By-Laws of ESOS. As at 30 June 2020, the Company did not grant any ESOS. MACPIE BERHAD 2020 ANNUAL REPORT 045 CORPORATE GOVERNANCE ADDITIONAL COMPLIANCE INFORMATION $8'Ζ7$1'121$8'Ζ7)((6 7KHDPRXQWRIDXGLWDQGQRQDXGLWIHHVSDLGDQGSD\DEOHWRWKHH[WHUQDODXGLWRUVE\WKH*URXSIRUWKHȴQDQFLDO year ended 30 June 2020 are as follows:- b Group &RPSDQ\ b RM’000 RM’000 Fees paid/payable to the external auditors - Audit Fees 128 40 - Non Audit Fees 45 9 173 49 RECURRENT RELATED PARTY TRANSACTIONS OF REVENUE OF TRADING NATURE $OOFXUUHQWUHODWHGSDUW\WUDQVDFWLRQVHQWHUHGLQWRE\WKH*URXSGXULQJWKHȴQDQFLDO\HDUDUHGLVFORVHGLQȴQDQFLDO year ended 30 June 2020 of this Annual Report. MATERIAL CONTRACTS There were no material contracts which had been entered into by the Group involving the interest of the Directors and major shareholders, either still subsisting at the end of the FY 2020. 046 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE SUSTAINABILITY STATEMENT EXECUTIVE DIRECTOR’S STATEMENT Dear valued stakeholders, 2QEHKDOIRIWKH%RDUGRI'LUHFWRUV Ȇ%RDUGȇ DQGPDQDJHPHQWRI0DFSLH%HUKDG Ȋ0$&3Ζ(ȋRUȊWKH&RPSDQ\ȋ Ζ SUHVHQWRXU6XVWDLQDELOLW\6WDWHPHQW ȆVWDWHPHQWȋ ZKLFKVXPPDULHVDQGKLJKOLJKWVRXUVXVWDLQDELOLW\SHUIRUPDQFH and approach towards bringing a positive change within MACPIE and the wider community. The Board continues to oversee MACPIE’s sustainability performance in compliance with the guidelines on VXVWDLQDELOLW\UHSRUWLQJLVVXHGE\%XUVD0DOD\VLD6HFXULWLHV%HUKDG Ȋ%XUVD6HFXULWLHVȋ 2XU)LYHNH\PDWWHUVRI Economic Performance, Health, Safety & environment, our People, Learning & Development and Corporate Social Responsibility remain the top material priorities on our sustainability agenda. The Group’s resilience in the face of the challenges brought on by the COVID-19 pandemic is a product of our long-standing commitment to manage MACPIE’s business in a sustainable, responsible and holistic manner, SDUWLFXODUO\LQWKHVHȴYHDUHDV2XUSULPDU\FRQFHUQUHYROYHVDURXQGWKHLUKHDOWKVDIHW\DQGMRESURWHFWLRQ The Board believes that sustainability business practices are fundamental to our growth and this is the right direction of how we think forward and how we care and applied this practices to all levels of our business operations. The adoption, implementation and development of sustainable development is a journey thus, we continue to address challenges as we progress towards achieving a sustainable direction and future. :HKRSHWKLVVWDWHPHQWZLOOSURYLGHYDOXDEOHLQVLJKWVWRRXUVWDNHKROGHUVRQ0$&3Ζ(ȇVVXVWDLQDELOLW\HRUWDQGZH appreciate your interest and welcome your feedback on this statement. REPORTING SCOPE AND METHODOLOGY This Report has been prepared in accordance with the ACE Market Listing Requirements of Bursa Securities – Guidance Note 11 and the Sustainability Reporting Guide issued by Bursa Securities. This Report, which is produced annually, covers the reporting period from 01 July 2019 to 30 June 2020 (FY2020). This Report provides the key aspects of MACPIE and its subsidiaries’ approach, initiatives and activities towards sustainability. SCOPE OF REPORT 01 July 2019 to 30 June 2020 REPORTING CYCLE Annual PRINCIPLE GUIDELINES Bursa Malaysia’s Sustainability Guide COVERAGE Macpie and its subsidiaries This Report can be downloaded at our corporate website at www.macpie.asia. As we look forward for improvements in our sustainability practices, we welcome feedback and suggestion. If you have any feedback or suggestion, please email to [email protected]. $%28786 0$&3Ζ(LVDSXEOLFFRPSDQ\OLVWHGRQWKHRɝFLDOOLVWRIWKH$&(0DUNHWRI%XUVD6HFXULWLHVVLQFH0$&3Ζ(KDV undergone a tremendous transformation and has set its sights on becoming an innovative management solutions company. In 2018, MACPIE acquired Macpie Pro Sdn Bhd as a new venture into the event management industry. In 2019 the group has established Level Up Plus Sdn Bhd, Macpie Ticketing Sdn Bhd and Macpie Equipment Sdn Bhd as SDUWRIWKHVWUDWHJLFSODQWRUXQHYHQWVPRUHHHFWLYHO\ZKLFKFXUUHQWO\H[WHQGVWKHFRPSDQ\ȇVVWUDWHJLFEXVLQHVV HFRV\VWHPLQWRIRXUFRUHVHJPHQWV QDPHO\HYHQWPDQDJHPHQWUHWDLOVSDFHPDQDJHPHQWȴQDQFLDOVROXWLRQVDQG ICT products supply & distribution. Ever thinking forward, MACPIE continuously looking for new ways to diversify and expand its strategic business ecosystem to provide budding SMEs with the best innovative management solutions. MACPIE BERHAD 2020 ANNUAL REPORT 047 CORPORATE GOVERNANCE SUSTAINABILITY STATEMENT cont’d GOVERNANCE STRUCTURE Sustainable management is one of the Company’s fundamental values as they form the basis of our action and guide us towards achieving the corporate objectives and the long-term growth of the Group. The Board did not establish a separate Sustainability Committee but has established a clear sustainability governance model to ensure compliance and responsibilities are discharged orderly as follows: %2$5'2)'Ζ5(&7256 Ζ1'(3(1'(17121(;(&87Ζ9(&+$Ζ50$1 %2$5'&200Ζ77((6 EXECUTIVE DIRECTORS - Audit & Risk Management Committee &KLHI([HFXWLYH2ɝFHU - Nominating Committee - Executive Management - Remuneration Committee - ESOS Committee STAKEHOLDER ENGAGEMENT MACPIE believe that continue engagement with our stakeholders is crucial in making our sustainability focus NQRZQ0$&3Ζ(LGHQWLȴHVLWVVWDNHKROGHUVDVJURXSVRISHRSOHDQGRUJDQLVDWLRQVZKRPWKH&RPSDQ\FRQVLGHUHG DVPRVWVLJQLȴFDQWWRWKH*URXSȇVNH\EXVLQHVVRSHUDWLRQVDQGVWUDWHJLHV7KHQHHGVDQGH[SHFWDWLRQVRIRXU stakeholders can be met through open two-way communication, which subsequently enhances trust from our stakeholders and promotes Group’s accountability. The table below summarizes our approach to stakeholders’ engagement: .H\ 0HWKRGVRI )UHTXHQF\RI 6WDNHKROGHUV .H\7RSLFVDQG&RQFHUQV (QJDJHPHQW (QJDJHPHQW Suppliers 1) Product quality z Supplier registration z Regular 2) Pricing z Supplier assessment conducted 3) Supplier relationship annually 4) Creditability Customers 1) Reliable service z Customer Feedback and surveys z Regular 2) Competitive pricing z Market research 2SHUDWLRQDOHɝFLHQF\ z Sales and customer visits Employees 5HPXQHUDWLRQV EHQHȴWV z %ULHȴQJV GLVFXVVLRQV z Regular 2) Health & Safety z Performance Appraisal z On-going 3) Career development & z Social & wellness activities opportunities z Email, internal memo & WhatsApp communications Government 1) Compliance with relevant z Compliance with mandatory z On-going & regulatory rules and regulations requirements authorities z Formal meetings z Ad-hoc z Performance reports z On-going z Communication and collaboration z Ad hoc 048 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE SUSTAINABILITY STATEMENT cont’d STAKEHOLDER ENGAGEMENT cont’d .H\ 0HWKRGVRI )UHTXHQF\RI 6WDNHKROGHUV .H\7RSLFVDQG&RQFHUQV (QJDJHPHQW (QJDJHPHQW Shareholders 1) Transparent reporting with z MACPIE website z Regular & investors credible data z Media release z Regular 2) Regulatory compliance z Announcements vide Bursa Link z Ad hoc z Annual Report z Annual z Annual general meeting z Annual Communities 1) Impact of operations on z Charity contributions z Regular & Public surrounding environment z Community Engagement 2) Economic opportunities Programmes Business 1) Financial Stability z Written communication z Regular Partners 2) Service Coverage and z Business exchange capability z Meeting visits 3) Reputation MATERIALITY ASSESSMENT A materiality assessment is conducted by the Company to identify and priorities the material EES factors. Upon WKH LGHQWLȴFDWLRQ RI WKH ((6 IDFWRUV WKDW DUH VLJQLȴFDQW WR WKH EXVLQHVV DQG VWDNHKROGHUV WKH &RPSDQ\ WKHQ review the exposures and extent of the impact of the material EES factors. 'XULQJ WKH )< YDULRXV LQLWLDWLYHV DQG HRUWV ZHUH LPSOHPHQWHG LQ DGGUHVVLQJ DQG PDQDJLQJ HDFK RI WKH material factors concurrently. MATERIALITY MATRIX 6XVWDLQDELOLW\3ULRULWLHVIRU)< High B A E DC Medium F G 6LJQLȴFDQFHWR6WDNHKROGHUV Low Low Medium High 6LJQLȴFDQFHWR0$&3Ζ( MACPIE BERHAD 2020 ANNUAL REPORT 049 CORPORATE GOVERNANCE SUSTAINABILITY STATEMENT cont’d MATERIALITY ASSESSMENT cont’d In FY 2020, our Group’s focus areas are summarized as follows: ((67RSLF )RFXV$UHDV $FWLYLWLHV A Economic Supply Chain We have been focusing in ethical procurement Management practices by adopting standard procedures in SURFXUHPHQWDQGYHQGRUVȇTXDOLȴFDWLRQV We work closely with a handful of reliable and trusted suppliers and/or contractors which are necessary to ensure quality and control are in place and in accordance with our Group’s procurement requirements. We engaged more than 50 collaborative partners from local communities for the supply of ICT products, equipment, venue, securities, food & beverages, ticketing systems and services. We also ensure that our supply chain partners has good sustainability practices which could provide greater driving force towards achieving our sustainability goals. B Environment Safety & Health The Covid-19 pandemic that the world is facing now is unprecedented and its impact on the economy is severe. Domestic and global growth is projected to be negative for year 2020 due to various containment measure implemented by many major economic to limit the spread of the virus. MACPIE ensure that risks to health and safety from work activities are properly FRQWUROOHGDQGWKHHRUWVWRGRWKHVDPHDUHEH\RQG regulatory compliance. MACPIE has taken a proactive approach to ensure the following:- - Employees’ risk of exposure to COVID-19 is minimized - Business or daily operations of the Group can VWLOOFRQWLQXHE\LPSOHPHQWLQJVWULFWDQGHHFWLYH 6WDQGDUG2SHUDWLQJ3URFHGXUHV Ȋ623ȋ DQGEHVW practice as recommended by the Ministry of Health and the World Health Organisation; and - Developing SOP and/ or alternative business arrangement with customers, contractors and suppliers to ensure smooth continuity of the business and operation. C Environment Energy Consumption Other focus area was on energy savings in which power saving features or sleep mode were enabled on computers, photocopiers and other equipment, which helped to reduce power consumption when these items are not in use. 050 MACPIE BERHAD 2020 ANNUAL REPORT CORPORATE GOVERNANCE SUSTAINABILITY STATEMENT cont’d MATERIALITY ASSESSMENT cont’d ((67RSLF )RFXV$UHDV $FWLYLWLHV D Environmental Waste Management We also focused on optimizing recycling and encourages our employees to think before printing and in this respect to reduce paper usage as well as practicing the good culture of recycling waste materials. In these aspects, the employees were encouraged to use recycled paper for internal notes and printing whenever possible. Waste papers, newspapers, cardboards, boxes and other recyclable materials were then packed separately in the waste bin for collection and further processing by the waste management company. E Social Equal Employment 7KH%RDUGGRHVQRWKDYHDȴ[HG SROLF\LQZRUNSODFH Opportunities diversity but is committed to ensure fairness in careers’ opportunities and treat all employees equally regardless of their religions, ethnicity, genders, age and nationalities towards harmonious working environment, at the same time creating a healthy lifestyle and working cultures. Our current workforce comprising more males than females due to the nature of work but there is a diverse skills, experiences, cultures as well as age demographics aspects. F Social Community We have a preference in the recruitment of local WDOHQWV ZKHUHYHU SRVVLEOH WKXV EHQHȴWLQJ WKH ORFDO community and reducing our employees turnover. Our Human Resource Department has been actively engages and promote employees bonding through events and activities such as birthday celebrations, privileges such as preferred rates and discounts for concerts organised by the Group, and other similar activities. G Social Community We have been giving our support to various non- SURȴWDEOH RUJDQL]DWLRQV DQG H[WHQGHG RXU FDUH DQG concern to the under-privileged groups. MACPIE BERHAD 2020 ANNUAL REPORT 051 FINANCIAL STATEMENTS 053 Directors’ Report 057 Statement by Directors and Statutory Declaration 058 Independent Auditors’ Report 061 Statements of Financial Position 6WDWHPHQWVRI3URȴWRU/RVV and Other Comprehensive Income 064 Statements of Changes in Equity 065 Statements of Cash Flows 067 Notes to the Financial Statements FINANCIAL STATEMENTS 'Ζ5(&7256ȇ REPORT 7KH'LUHFWRUVKHUHE\VXEPLWWKHLUUHSRUWWRJHWKHUZLWKWKHDXGLWHGȴQDQFLDOVWDWHPHQWVRIWKH*URXSDQGRIWKH &RPSDQ\IRUWKHȴQDQFLDO\HDUHQGHG-XQH PRINCIPAL ACTIVITIES 7KHSULQFLSDODFWLYLW\RIWKH&RPSDQ\LVLQYHVWPHQWKROGLQJ7KHSULQFLSDODFWLYLWLHVRILWVVXEVLGLDULHVDUHGLVFORVHG LQ1RWHWRWKH)LQDQFLDO6WDWHPHQWV FINANCIAL RESULTS Group Company RM’000 RM’000 1HWORVVIRUWKHȴQDQFLDO\HDU /RVVDIWHUWD[ $WWULEXWDEOHWR 2ZQHUVRIWKH&RPSDQ\ 1RQFRQWUROOLQJLQWHUHVWV RESERVES AND PROVISIONS 7KHUHZHUHQRPDWHULDOWUDQVIHUVWRRUIURPUHVHUYHVRUSURYLVLRQVGXULQJWKHȴQDQFLDO\HDURWKHUWKDQWKRVH GLVFORVHGLQWKHȴQDQFLDOVWDWHPHQWV DIVIDENDS 7KHUHZHUHQRGLYLGHQGVSURSRVHGGHFODUHGRUSDLGE\WKH&RPSDQ\VLQFHWKHHQGRIWKHSUHYLRXVȴQDQFLDO\HDU ISSUE OF SHARES AND DEBENTURES 7KHUHZHUHQRLVVXDQFHRIVKDUHVRUGHEHQWXUHVGXULQJWKHȴQDQFLDO\HDU WARRANTS 7KHZDUUDQWZHUHFRQVWLWXWHGXQGHUWKH'HHG3ROOGDWHG-DQXDU\DVGLVFORVHGLQ1RWHWRWKH )LQDQFLDO6WDWHPHQWV $VDW-XQHWKHWRWDOQXPEHUVRIZDUUDQWVWKDWUHPDLQXQH[HUFLVHGZHUH OPTIONS GRANTED OVER UNISSUED SHARES 1RRSWLRQVZHUHJUDQWHGWRDQ\SHUVRQWRWDNHXSXQLVVXHGVKDUHVRIWKH&RPSDQ\GXULQJWKHȴQDQFLDO\HDU $W DQ H[WUDRUGLQDU\ JHQHUDO PHHWLQJ KHOG RQ 1RYHPEHU WKH &RPSDQ\ȇV VKDUHKROGHUV DSSURYHG WKH HVWDEOLVKPHQWRIDQ(626RIQRWPRUHWKDQRIWKHLVVXHGVKDUHFDSLWDORIWKH&RPSDQ\DWWKHSRLQWRIWLPH WKURXJKRXWWKHGXUDWLRQRIWKHVFKHPHWRHOLJLEOHHPSOR\HHRIWKH*URXS MACPIE BERHAD 2020 ANNUAL REPORT 053 FINANCIAL STATEMENTS 'Ζ5(&7256ȇ REPORT FRQWȇG OPTIONS GRANTED OVER UNISSUED SHARES cont’d 7KH(626ZDVWHUPLQDWHGRQ 1RYHPEHUZLWKWKHDSSURYDOREWDLQHGIURPWKH&RPSDQ\ȇVVKDUHKROGHUV 2QWKHVDPHGDWHWKH&RPSDQ\ȇVVKDUHKROGHUVDSSURYHGWKHHVWDEOLVKPHQWRID1HZ(PSOR\HH6KDUH2SWLRQ 6FKHPH Ȋ1HZ(626ȋ RIQRWPRUHWKDQRIWKHHQODUJHGQXPEHURILVVXHGVKDUHFDSLWDORIWKH&RPSDQ\DW DQ\RQHWLPHRYHUWKHGXUDWLRQRIWKHVFKHPHWRHOLJLEOH'LUHFWRUVDQGHPSOR\HHRIWKH*URXS 7KHVDOLHQWIHDWXUHVDQGRWKHUWHUPVRIWKH(626DUHGLVFORVHGLQWKH1RWHWRWKH)LQDQFLDO6WDWHPHQWV $VDW-XQHWKHUHZDVQRRSWLRQRHUHGWRWDNHXSXQLVVXHGRUGLQDU\VKDUHVRIWKH&RPSDQ\ DIRECTORS 7KH'LUHFWRUVZKRKHOGRɝFHGXULQJWKHȴQDQFLDO\HDUDQGXSWRWKHGDWHRIWKLVUHSRUWDUH /LRQHO9HUQRQ 7KH'LUHFWRUVRIVXEVLGLDULHVZKRKHOGRɝFHGXULQJWKHȴQDQFLDO\HDUDQGXSWRWKHGDWHRIWKLVUHSRUWDUHDV IROORZV .HQQ\.KRZ&KXDQ:DK 1J&KHH+HQJ /HRQJ6HQJ:XL DIRECTORS’ INTERESTS $FFRUGLQJWRWKH5HJLVWHURI'LUHFWRUVȇ6KDUHKROGLQJVUHTXLUHGWREHNHSWXQGHU6HFWLRQ RIWKH&RPSDQLHV$FW WKHLQWHUHVWVDQGGHHPHGLQWHUHVWVLQWKHRUGLQDU\VKDUHVRIWKH&RPSDQ\DQGLWVUHODWHGFRUSRUDWLRQVRI WKRVHZKRZHUH'LUHFWRUVDVDW\HDUHQGDUHDVIROORZV Number of ordinary shares At At 1.7.2019 Bought Sold 30.6.2020 The Company ΖQGLUHFWLQWHUHVW 1J&KHH+HQJ * deemed interests by virtue of his shares in SEG Capital Intelligence Sdn. 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DEFERRED TAX ASSETS/LIABILITIES Group 2020 2019 RM’000 RM’000 Deferred tax assets $WEHJLQQLQJRIWKHȴQDQFLDO\HDU 7UDQVIHUUHG WR IURPSURȴWRUORVV 1RWH $WHQGRIWKHȴQDQFLDO\HDU Deferred tax liabilities $WEHJLQQLQJRIWKHȴQDQFLDO\HDU 7UDQVIHUUHG IURP WRSURȴWRUORVV 1RWH $WHQGRIWKHȴQDQFLDO\HDU 092 MACPIE BERHAD 2020 ANNUAL REPORT FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 cont’d 9. DEFERRED TAX ASSETS/LIABILITIES cont’d 7KHGHIHUUHGWD[DVVHWV OLDELOLWLHV DWWKHHQGRIWKHUHSRUWLQJGDWHDUHPDGHXSRIWHPSRUDU\GLHUHQFHV DULVLQJIURP 2020 2019 Group RM’000 RM’000 3URSHUW\SODQWDQGHTXLSPHQW 8QXWLOLVHGFDSLWDODOORZDQFHV &RQWUDFWDVVHWV &RQWUDFWOLDELOLWLHV 10. 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AMOUNT DUE FROM/TO SUBSIDIARIES Company 2020 2019 RM’000 RM’000 $PRXQWGXHIURPVXEVLGLDULHV /HVV $FFXPXODWHGLPSDLUPHQWORVVHV $WEHJLQQLQJRIWKHȴQDQFLDO\HDU 5HFRJQLVHGGXULQJȴQDQFLDO\HDU 5HFRYHUHG $WHQGRIȴQDQFLDO\HDU 5HSUHVHQWHGE\ 1RQFXUUHQW &XUUHQW $PRXQWVGXHIURPWRVXEVLGLDULHVDUHQRQWUDGHUHODWHGQRQLQWHUHVWEHDULQJDQGXQVHFXUHG 12. INVENTORIES Group 2020 2019 RM’000 RM’000 7UDGLQJJRRGV *RRGVLQWUDQVLW 5HFRJQLVHGLQSURȴWRUORVV ΖQYHQWRULHVUHFRJQLVHGDVFRVWRIVDOHV ΖQYHQWRULHVZULWWHQR 13. CONTRACT ASSETS AND CONTRACT LIABILITIES Group 2020 2019 RM’000 RM’000 &RQWUDFWDVVHWV &RQWUDFWOLDELOLWLHV 094 MACPIE BERHAD 2020 ANNUAL REPORT FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 cont’d 13. 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SHARE CAPITAL Number of ordinary shares Amount 2020 2019 2020 2019 Unit’000 Unit’000 RM’000 RM’000 Group and Company ΖVVXHGDQGIXOO\SDLGZLWKQRSDUYDOXH $WEHJLQQLQJRIWKHȴQDQFLDO\HDU ΖVVXDQFHRIQHZRUGLQDU\VKDUHV $WHQGRIWKHȴQDQFLDO\HDU 17. 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LEASE LIABILITIES 2020 RM’000 Group &XUUHQWOLDELOLW\ ZLWKLQ\HDU 1RQFXUUHQWOLDELOLWLHV PRUHWKDQ\HDUEXWOHVVWKDQ\HDUV PRUHWKDQ\HDUVEXWOHVVWKDQ\HDUV 7KHOHDVHOLDELOLWLHVEHDULQWHUHVWDW 1LO SHUDQQXP 6HWRXWEHORZLVWKHPRYHPHQWRIOHDVHOLDELOLWLHVGXULQJWKHȴQDQFLDO\HDU 2020 RM’000 $W-XO\ $GGLWLRQV /HDVHSD\PHQWFDVKRXWȵRZIURPȴQDQFLQJDFWLYLWLHV /HDVHLQWHUHVW 3D\PHQWIRUOHDVHLQWHUHVWLQȴQDQFLQJDFWLYLWLHV $W-XQH 19. TRADE PAYABLES 7KHQRUPDOWUDGHFUHGLWWHUPVJUDQWHGE\WKHWUDGHSD\DEOHVRIWKH*URXSUDQJHIURPWR WR GD\V ΖQFOXGHGLQWUDGHSD\DEOHVRIWKH*URXSLVDQDPRXQWRI50 50 GXHWRFRPSDQLHVLQ ZKLFK'LUHFWRUVKDYHLQWHUHVW 20. OTHER PAYABLES Group Company 2020 2019 2020 2019 RM’000 RM’000 RM’000 RM’000 1RQWUDGHSD\DEOHV $FFUXDOV 'HSRVLWVUHFHLYHG ΖQFOXGHG LQ QRQWUDGH SD\DEOHV RI WKH *URXS LV DQ DPRXQW RI 50 50 GXH IURP FRPSDQLHVLQZKLFK'LUHFWRUVKDYHLQWHUHVW MACPIE BERHAD 2020 ANNUAL REPORT 097 FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 cont’d 21. 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