1 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD VISION

• To be the leading bore piling and bridge specialist in the markets we serve.

MISSION

• Providing innovative solutions that leverage on our capabilities as the preferred bore piling and bridge specialist in Malaysia. • To deliver sustainable value that determines a better future for all.

OUR BUSINESS PHILOSOPHY & MODEL

• Quality Products • Excellent Service • Maximising Stakeholders Return • Social Responsibilities • Safety, Health & Environment • Efficiency Driven • Employees Welfare • Teamwork • Innovations CORPORATE PROFILE

Ikhmas Jaya Group Berhad (“IJGB” or the “Group”) was founded in 1992 by Dato’ Ang Cheng Siong (Group Managing Director), Dato’ Ir. Dr. Khoo Ping Sen (Executive Director), Siew Mun Lout (Executive Director) and Yap Yoon Fatt (Head of Plant Division). IJGB is principally involved in engineering and construction of piling and foundation, bridges and buildings. Since the Group’s establishment, IJGB has accumulated an extensive track record of completed projects for both the public and private sectors to a total contract value of approximately RM2.7 billion.

IJGB is highly recognised in the industry for its diverse expertise and experiences across multiple discipline of engineering and has been involved in a number of high-profile projects such as the award-winning Putra and Prai Bridges, Klang Valley Mass Rapid Transit-Kajang Line, Kelana Jaya Light Rail Transit Extension, Paradigm Mall and KL Eco City just to name a few. Armed with its own in-house design and engineering professionals, IJGB is a competitive and formidable participant in the marketplace as a total multi-skilled solutions provider with a competitive edge and versatility to secure projects.

TABLE OF CONTENTS

Vision & Mission 01 Corporate Profile 39 Audit and Risk Management 02 Corporate Milestones Committee Report 03 Corporate Information 43 Statement on Risk Management and 04 Corporate Structure Internal Control 05 Directors’ Profile 46 Directors’ Responsibility Statement 09 Key Management’s Profile 47 Financial Statements 10 Group 5-Year Financial Highlights 137 Additional Compliance Information 11 Management Discussion & Analysis 138 List of Properties 15 Sustainability Statement 141 Analysis of Shareholdings 21 Corporate Governance Overview Statement 02 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD c) b) a) b) a) b) a) c) b) a) d) c) b) a) 2016 2018 Letter ofaward from MRCB BuildersSdn.Bhd.for atotal contract value ofRM161.12 million. Manufacturing Facility”). (“New facility manufacturing system buildings prefabricated our expanded and Relocated Listed onthe MainMarket ofBursaMalaysia SecuritiesBerhad. and completion ofpilingandsubstructure work for 2blocksofbusiness tower Awarded a RM33.81 million contract from Symphony Crescent Sdn. Pits/Shaft usingcontiguous Bored PileMethod;and Bhd. for the construction Letter of Award from MMC Engineering Services Sdn. Bhd. for RM13.85 million for Jacking • OPUS,Kuala Lumpur Project completed for thefollowing foundation work: • Mayang MallinKuala Terengganu • Symphony Crescent • BukitBintangCityCentre Project completed for thefollowing foundation andbasementwork: Letter of award from Gallimont Development Sdn. Bhd. for a total contract value of of value contract total a for Bhd. RM173.50 millionfor theconstruction ofa49 storey blockofserviced Sdn. apartments. Development Gallimont from award of Letter million for sub-contract works for theconstruction ofabridge. RM65.30 of value contract total a for Bhd. Sdn. Kemas Kayangan from award of Letter for Star Effort Sdn.Bhd. Awarded a RM166.40 million contract to undertake the construction of a service apartment buildings andotherassociated works. Line 3 (LRT3) from Bandar Utama to Johan Setia Package GS01: guideway, stations,Transit park Rail Light and ride, of ancillary Completion and Construction the for 3) and 2 (Zone works piling boredsubcontract Letter of award from Mudajaya Corporation Berhad for a total contract value Ampang, Kuala Lumpur.of RM38.52 million to undertake of a 2 level parking area at Basement 1, Basement a 2 2level and partly level 1 and associated works with on Lot 155, building Jalan office storeybasement and 2 3 storey existingbungalow and of proposed construction works and completion Demolition of substructure Proposed works consist The the 1: for “Package million contractRM58.75 of value contract total a for Bhd. Sdn. VenturesPutrajaya from award of Letter kerja Berkaitan”. Kerja- serta Struktur-struktur dan Sala Choras/Sungai Sungai Menaiktaraf Aman: Darul Kedah Pendang, Tebatan Sungai “Rancangan Banjir project the undertake to million RM101.85 of valuecontract total a for Malaysia Saliran Dan Pengairan Jabatan / Sekitar Alam & Asli Sumber Kementerianfrom award of Letter Pinang TanjungDevelopment the Sdn.Bhd. Messrs for for Pinang works Pulau engineering (STP2), Development civil 2) associated (Phase other Pinang Tanjung Seri all proposed and grade at embankment Island, STP2 to for Pinang million RM78.00 of value contract total Tanjung a Seri Jalan linking sea crossingthe forBridge Marine executesubcontracttoworkscompletethe and Bhd. Sdn. (M) Prospek Kerjaya from award of Letter MILESTONES CORPORATE 2019 2015 2017 Fax : (03) 7880 8699 Tel :(03) 7880 9699 Selangor DarulEhsan 47301 Petaling Jaya, Jalan SS7/19 Kelana Jaya Block AKelana Centre Point No. 3, Unit 621,6thFloor, REGISTERED OFFICE SSM PCNo. 201908003178 (MAICSA 7019175) Chew MeiLing SSM PCNo. 201908003061 (MAICSA 7008306) Cynthia Gloria Louis COMPANY SECRETARIES Yong Kok Yee Leong Kah Mun Members Lim Kean Lam Chairman REMUNERATION COMMITTEE NOMINATION & Yong Kok Yee Lim Kean Lam Members Leong Kah Mun Chairman COMMITTEE AUDIT &RISKMANAGEMENT Executive Director Ang WeiZhen Executive Director Siew MunLout Executive Director Dato’ Ir.Dr.KhooPingSen Group ManagingDirector Dato’ AngChengSiong BOARD OFDIRECTORS Fax :(03) 7721 3399 Tel :(03) 7721 3388 Selangor DaruEhsan 47800 Petaling Jaya, 8, First Avenue BandarUtama Level 10, KPMGTower (LLP0010081-LCA &AF0758) KPMG PLT AUDITORS IKHMAS/5268 STOCK NAME/CODE Securities Berhad Main Market ofBursaMalaysia STOCK EXCHANGELISTING E-mail :[email protected] Web :www.ikhmasjaya.com Fax :(03) 7883 0720 Tel :(03) 7885 0626/0612 /0691 Selangor DarulEhsan 47301 Petaling Jaya, Pusat DaganganNZXAra Jaya, No. 35, 37 &39, JalanPJU 1A/41B HEAD OFFICE Independent Non-Executive Director Yong KokYee Independent Non-Executive Director Leong KahMun Independent Non-Executive Director Lim KeanLam INFORMATION CORPORATE (AMemberofOCBCGroup) • Pac Lease Berhad • MBSBBankBerhad • Malayan BankingBerhad • Bangkok BankBerhad • AmBank(M)Berhad PRINCIPAL BANKERS Fax :(03) 7890 4670 Tel :(03) 7890 4700 Selangor DarulEhsan Seksyen 13, 46200Petaling Jaya, No.5, JalanProf. KhooKay Kim, 11th Floor, Menara Symphony, Sdn Bhd(378993-D) Boardroom Share Registrars SHARE REGISTRAR 03 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 04 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD STRUCTURE CORPORATE Sdn. Bhd. Management Exofield Property 100% System Sdn.Bhd. MM2 Building 60% Sdn. Bhd. BE Specialist 60% Sdn. Bhd. Ikhmas Jaya 100% Sdn. Bhd. MM2 Builders 100% Sdn. Bhd. Ikhmas Equipment 100% Sdn. Bhd. IJ Geotechnic 100% (Appointed on5December2013) Group ManagingDirector Male •MalaysianAged65 DATO’ ANGCHENGSIONG osrcin, eeae treatment complexes. sports and projects sewerage supply water marine plants, dams, constructions, breakwater bridges, pipes, laying involving highways, works, projects of buildings, types various in involvement his via field construction the in expertise and experience extensive of years 30 than more accumulated has He Company Construction Berhad to manageIkhmasJaya. Hup Ho left he 1994, in Subsequently Jaya. Ikhmas up set he 1992, In TenderManager. a as Berhad) Company Construction (now Hup Ho as known Bhd. Hup Sdn. Ho Company joined Construction and Bhd. Sdn. Manong Syarikatleft he 1988, In 1985. Agentin Site was he Bhd., promoted Sdn. to Senior Supervisor in 1983 and tenure Manong his Syarikat During in Supervisor. Site a as 1981 in Bhd. Sdn. Manong Syarikat a joined as Bhd. Sdn. then SurveyorHe Quantity 1981. in left Son and & Chui Tuck Leow He began his career in 1980 with Pembinaan in 1992. of from the University Master of Hull, United Kingdom degree his (Finance) Administration Business obtained He Abdul subsequently 1980. Tunku in College) as University Rahman known Building (now Rahman in College Abdul Tunku Diploma from his Technology obtained He planning and business development ofourGroup. strategic management, the for overall responsible is Siong Dato’ Cheng Director, Ang Managing Group our As DATO’ IR.DR.KHOOPINGSEN (Appointed on5December2013) Executive Director Male •MalaysianAged68 works. foundation and piling bore in specialises also He buildings. industrial and buildings and structural of years areahigh-rise focuses bridges, which on design the 35 in is than expertise his more for industry construction the in involved been has He Engineers, Malaysia since 1983. He has been a member of the Director.Institution of Managing the as year in same Jaya the Ikhmas join to Manager General a as Ho Berhad Company left Construction he Hup 1997, In Division. Piling Bore and Department Design the of charge in was he where Manager, Project Senior as a Berhad) Company Ho Construction as Hup known (now Bhd. Construction Sdn. Hup Company Ho joined he 1990, In Director before he left the company in 1990. and Associate Senior Associate,Engineer, He was Wanpromoted to the positions of with Senior 1979 in Mohamed & Khoo Sdn. career Bhd. as an Engineer. his began He Civil Engineering majoringinstructures in1979. in degree Philosophy of Doctor his doctorate his degree at the same pursued university and obtained and Scholarship Graduate of University Monash the granted Bachelor from a Monash Honours University, Australia in with 1975. He with was degree Engineering graduated He business development. projects all undertaken by ourGroup andourGroup’s special the for for responsible is also He construction Group. our by out of carried projects method and design the supervising and managing for responsible is Sen Ping Khoo Dr. Ir. Dato’ DIRECTORS’ PROFILE 05 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 06 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD (Appointed on4July2014) Executive Director Male •MalaysianAged57 SIEW MUNLOUT osrcin, oe iig n basement and constructions. piling highways, bore bridge constructions, involving pipes, laying works, projects marine dams, breakwater of types including constructions and roadworkswas involved in numerous earthworks works, and bridge in experience construction of years 25 than more has He Ikhmas Jaya. of Director Executive to promoted was he 2002, in Subsequently 1998. Rekavistain of Manager General as promoted and 1997 in Manager Project Senior to promoted then was He year. same the in Manager Project JayaIkhmas tojoin as 1994 in beforeleft he Construction Engineer and Project Engineer of positions the to promoted subsequently Company Berhad) as a Site Construction Engineer. Hup He was Ho and as known (now Bhd. Sdn.Bhd. Manong Sdn. Company Construction Hup Ho joined Syarikat left he 1990, In Engineer.Site as 1987 in Bhd. Sdn. Manong Syarikat with career his began He 1987. in Wales,Australia South New of University the from Honours with Engineering Civil in He graduated with a Bachelor of Engineering by ourGroup. to-day operations of all projects undertaken Mr Siew Mun Lout is responsible for the day- PROFILE DIRECTORS’ (Appointed on4July2014) Executive Director Male •MalaysianAged35 ANG WEIZHEN forecasting. cost and control cost control, document projectcoordination, project management, was in involved He team management the Surveyor.of part Quantity Senior and in Manager Project Deputy as year same the Jaya Ikhmas joined subsequently and 2009 in Ltd He Pty Bucknall quantity.Levett Rider left of bill producing as well as controls document work, estimation cost out carrying for responsible primarily he was where Surveyor, Quantity Junior a as Levett Rider with LtdBucknall Pty in Perth, Australia career in 2008 his began He of Technology, Australia University in2008. Curtin the from Economics degree Science Applied and Management Construction in majoring of Bachelor for a responsible also with graduated He development. business is He operations. overall Group’s our within efficiency cost promote to and plans developing strategic implementing for responsible Wei is Ang Mr Zhen Director, Executive our As LEONG KAHMUN (Appointed on1June2020) Independent Non-ExecutiveDirector Male •MalaysianAged51 manufacturing, trading andquarrying. contractor, main development, property in businesses with Market, Main in companies listed public and private into in positions senior moved subsequently and assurance Mr Leong began his career in statutory audit Training Registered HRDF Provider. and space Talentof Workroom co-workinga Bhd, Sdn officer executive chief & is founder the also Leong Mr and governance, improvement. management performance risk auditing, corporate internal and turnaround restructuring, corporate corporate raising, Exchange, and fund Stock Malaysia Kong Bursa in Hong for boutique specializing advisories a IPO consultancy PLT, Advisory corporate NGAGE of Mr Leong is currently the managing partner and aHRDFCertified Trainer. the of Member Associate Institute of Internal Auditors an Malaysia (IIAM) also is He (MIA). Accountants of of Accountant Institute Chartered Malaysian a is Leong Mr and Nomination the of Remuneration Committee. Member a and Audit andRiskManagementCommittee the of Chairman the is Mun Kah Leong Mr YONG KOKYEE (Appointed on1June2020) Senior IndependentNon-ExecutiveDirector Male •MalaysianAged56 3 soe hg ed evc apartment and 500unitsoflandedstrata service title. end to high storey 36 the Company a led hotel,rated star 5 a completesuccessfully had and deficit million RM40 from around company the had turned and had He months. 6 within team new effective structure and leaner a create to managed organisation the 2018. in revamped had he leaving there, tenure his During before CEO its as Bhd Sdn Builders UM joined Yong Mr 2014, In to complete theproject. the works, supply of material and equipment required remaining with payment, the on outstanding suppliers renegotiated and contractors hospital client, had and beds and 120 project billion a revive RM2 successful at valued combined large GDV a to with medium projects successful few development a the of overseen completion has Yong Mr development companies. Engineer/Chief industry, Coordinator Project before joining several the property as company building Yong started his career with a construction in Mr management. project and construction experience working years 35 of total a has Yong Mr Nomination and Remuneration Committee. and RiskManagementCommittee and YongMr Kok Yee Auditthe of member a is DIRECTORS’ PROFILE 07 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 08 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD - None of the Directorsthe haveof convictedNone Convictionbeen Offencesfor- 3. 2. Conflict of Interest - None of the Director have any conflict of interest Shareholder -Save Major and/or Director with Relationship Family 1. Notes: if any. for offences within the past five (5) years, other than traffic offences, with theCompany. Company. family relationship with any Director and/or Major Shareholder of the any have Directors other the of of none Company, the son of Shareholder the Major a is and Director Managing who Group the Director Siong, Cheng Executive Ang Dato’ the Zhen, Wei Ang Mr for (Appointed on1June2020) Independent Non-ExecutiveDirector Male •MalaysianAged50 LIM KEANLAM usuc Aec b nmru lcl banks, local numerous by Agency Outsource into ventured also an agency business andwas appointed asBank Lim Mr field, Legal Besides and landmatters. corporate conveyancing, and matters litigation both involved works advisory The entrepreneur. byadvisor legal personal manythe be prominent Singapore. the professional in legal field and outshine has been appointed has and to Lim Mr years, China these During Kong, Hong clientele discerning including growing a to service legal professionalpersonalized reputationin Firms the build to ambition the with Lee & Lim K.L. namely In October 1996, Mr Lim founded his own legal firm in theHighCourt ofMalaya inMarch 1996. Mr Lim was admitted as an Advocate and Solicitor Management the Risk Committee. and of Audit the Chairman of member the a and is Committee Remuneration Lam and Nomination Kean Lim Mr PROFILE DIRECTORS’ - The details of the Directors’Directors’the 6. of shareholdingsTheShareholdingsdetails - Meetings Board 5. 4. o Goa Pae n eebr 08 o his for 2018 December in University contribution towards thesociety. Peace Nations Global United for by Award Excellence Golden Human a awarded also was Lim Mr the years. throughout society the towards and needy the towardscontribution his of recognitionAward in Malaysia CSR by awarded was He decade. two been helping the unfortunate group for has more Society than to Back Give motto his with Lim Mr current market the trend one-commerce based. on leverage mainly platform, business new situations. In the end of 2019, he founded another team to assist membersinemergency anddistress respond and system monitoring centre providinghours 24 security, and safety to related arena In 2014, Mr Lim further venture into other business for marketing bank products. and sale the on focusing mainly Annual Report. in the Company and its subsidiaries are disclosed on page 142 of this Annual this of 23 page on Report. out set are Company the of Directors the during financial year. bodies regulatory any by imposed penalty or sanction public any have Directors the of None - Penalty or Sanction Public Te ubr f or meig atne b the by attended meetings board of number The - - None of the Key Management have any conflict of conflict any have Management Key the of None - Interest of Conflict 2. Shareholder -Save for Mr Major and/or Director with Relationship Family 1. Notes: interest withtheCompany. the of Shareholder Major any Director and/orMajorShareholder oftheCompany. a and with relationship family any have Director Management Key the of Company,none Managing Group the Siong, Cheng Ang Dato’ of son the is who ExecutiveDirector the WeiZhen, Ang Executive Director Siew MunLout Group ManagingDirector Dato’ AngChengSiong For theirprofile, kindly refer to theDirectors’ Profile onpage6ofthe 2019 Annual Report. For theirprofile, kindly refer to theDirectors’ Profile onpage5ofthe 2019 Annual Report. and construction. holding, trading, manufacturing, property management, property investment and development, Melewar Industrial Group, Berjaya Land etc.) spanning across various industries – investment – industries various across spanning etc.) Land Berjaya Group, Industrial Melewar to revamp and restructure company’s work force to enhance its competitiveness and efficiency. Halim Mazmin etc.) and local public listed companies (such as Turiya, MK Land, Ho Wah Genting, He is equipped with an extensive knowledge and experience in people management skills and rvt lmtd opne (uh s hl Mlyi Taig KB ru, ca International, Acmar Group, KAB Trading, Malaysia Shell as (such companies limited private basement constructions. Australia, London andASEAN region. reporting, audit, tax planning and compliance,and corporateplanning tax reporting,audit, finance and corporate many affairs in including managing and handling the site workers involved in earthworks, bore piling and and piling bore earthworks, in involved workers site the handling and managing including Chief OperatingOfficer•MaleMalaysianAged54(Appointed on1June2020) CHOI AHLOY corporate exercises with involving issuance of equities in Malaysia, Hong Kong, China, Korea, China, Kong, Hong Malaysia, in equities of issuanceinvolving exercises corporatewith He has more than 25 years of related work experience with a managerial role in financial financial in role managerial a with experience work related of years 25 than more has He in the areas of site supervision of heavy construction equipment for bored piles and earthworks and piles bored for equipment constructionheavy of supervision site of areas the in manager, he is also responsible for Malaysia’s real estate, mutual funds, Private Equity, M&A and Currently, he is working as a local and off shore fund manager and M&A projects. As a fund fund a As projects. M&A and manager fund shore off and local a as working is Currently,he his current position in 2010. He has more than 25 years of experience in the construction field field construction the in experience of years 25 than more has He 2010. in position current his & Young andauditcareer withDeloitte Touche Tohmatsu. in 1982. In 1994, he joined Ikhmas Jaya as the Senior Operations Manager and werepromoted and to OperationsManager Senior the Jayaas Ikhmas joined he 1994, In 1982. in Jaya on 26 September 2017 as the Chief Financial Officer. He started his tax career with Ernst Ernst with career Officer. tax Financial his Chief started the He as 2017 September 26 Jayaon a multi-national pharmaceutical company. Mr Yap completed his Sijil Pelajaran Malaysia in 1981 and started his career as a Survey Assistant Survey a as career his started and 1981 in MalaysiaPelajaran Sijil Yaphis completedMr also a Chartered Accountant of the Malaysian Institute of Accountants (MIA). He joined Ikhmas University Kebangsaan Malaysia and had worked as a senior manager for more than 13 years in Chief Financial Officer • Male • Malaysian • Aged 51 • (Appointed on 27 September 2017) Tham FookSun r hi rdae wt Bceo o Sine Hn) aoig n eei & itc from Biotech & Genetic in Majoring (Hons) Science of Bachelor with graduated Choi Mr He is a Fellow Member of the Association of Chartered Certified Accountants (ACCA - UK) and Head ofPlantDivision•MaleMalaysianAged57 YAP YOONFATT KEY MANAGEMENT’S 4. if any, offences, traffic than Other - Offences for Conviction 3. bodies duringthe financial year. Management Key the of None have any public sanction of penalty imposed by - any regulatory Penalty or Sanction Public within thepast 5years. offencesconvicted for been has KeyManagement the of none Executive Director Ang WeiZhen Executive Director Dato’ Ir.Dr.KhooPingSen PROFILE 09 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 10 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 2015 2015 Net AssetsperShare(RM) Total Assets Group Earnings/(Loss)PerShare(Sen) Profit/(Loss) AfterTax Share Capital Profit/(Loss) BeforeTax Revenue RM’000 REVENUE

32,765 RM’000 PROFIT/(LOSS) BEFORETAX 268,656 FINANCIAL HIGHLIGHTS GROUP 5-YEAR 2016 2016

15,159 242,567 2017 2017

9,695 303,166 2018 2018

(36,226) 308,193 RM’000 130,000 365,854 268,656 2019 2019 24,303 32,765 2015 0.36 5.63 (155,468) 199,536 2015 2015 RM’000 130,000 242,567 448,411 10,251 15,159 2016 RM’000 TOTAL ASSETS 24,303 RM’000 PROFIT/(LOSS) AFTERTAX 365,854 0.37 2.17 2016 2016 RM’000 536,501 303,166 10,251 448,411 173,992 9,695 5,924 2017 0.39 1.32 2017 2017 Restated (32,607) (36,226) RM’000 5,924 536,501 473,646 308,193 182,542 (5.33) 2018 0.32 2018 2018

(32,607) 473,646 (159,546) (155,468) 330,894 RM’000 199,536 191,687 (27.97) 2019 2019 2019 0.05

(159,546) 330,894 strategies. business and directions its on proactiveactions taking are they as future the in management income its on improvementan be will there believesthat also Group the Besides, forward. going further book order their increase optimistic to is Group rate The flat. medium on infrastructurebuilding on and projectsbooks order Moving forward, the Group would like to focus their business strategies and goal in seeking more projects and mitigate itsfinancialrisks. proactive action in its cost optimisation plan to reduce overhead cost or expenses totake bridge the gaps and to to and monitor to effort their on keep will Group The projects. bridges and bore-pilinginfrastructure, its on focussing areas build and design in expertise their enhance also will Group The projects. bridges and bore-piling from aside projects infrastructure upcoming more with market the in competitiveness their on two years. The Group continues to fine-tune and strengthen their core business with continuous improvement At present, the Group’s order book of RM575.2 million will keep their business active in operation for the next resource strategies. human and goal Group’sbusiness the workforceon segmented based the implement to planned has Group highways,& railway,road transit& as the addition, waterresources, In ports. sewerage, and mitigation flood of the market share in the up and coming Government infrastructure stimulus programmes and projects such Today, the Group has realigned their business strategies to focus more on their improvement in participation Group suffered losses as the Group was Themainly focused on private(“FY2019”). projects 2019 rather than governmentof year projects. the in Group”) (“the Berhad Group Jaya Ikhmas for year challenging a was It OVERVIEW OFTHEGROUP’SBUSINESSANDOPERATIONS “ oig owr, h Gop ol lk t fcs hi business their focus to infrastructure projectsandbuildingonmediumrateflat. like would Group strategies and goal in seeking more projects and order books on the the forward, Moving MANAGEMENT DISCUSSION & ANALYSIS “ 11 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 12 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD YEAR ONFINANCIALREVIEW completed and are now pending for finalisation of account. Thus, the revenue and earnings contribution andearnings the revenue during thecurrent year hadbeenrelatively weaker Thus, incomparison. account. of finalisation for pending now are and completed Whilst for the existing major key projects; they are either progressing towards their completion Setia or are alreadyJohan to Utama Package GS09 Bandar (LRT3-GS09) havefrom yet to move3 Transit into their Rail acceleration phase in Light their progress of and construction. –Kedah Pendang Sungai in project mitigation flood as newsuch projectsall as million RM308 of 2018”) (“FY 2018 December 31 precedingyearended the GroupThegenerated recordedlowerfromthat 35% decreaseof revenuein a FY2019, for million RM199.5 of Revenue Loss Attributable to EquityHolder Loss After Tax Loss Before Tax Operating Loss Revenue & ANALYSIS MANAGEMENT DISCUSSION (159,546) (155,468) (143,256) (157,779) RM’000 FY2019 199,536 (32,607) (36,226) (23,837) RM’000 (28,961) FY2018 308,193 variance -35.3 >100 >100 >100 >100 % Gearing RM17.7 millionandnetcashgenerated from investing activitiesamountingto RM10.1 million. previousyear.in RM8.1 million of generatednegativetobalanceoperationsamountedfrom cash a from Net During the financial year, the Group’s cash and cash equivalents increased by RM20.8 million to RM12.7 million Liquidity andCapitalResources Group’s underperformance inFY2019. the charges for LAD, contract costs written off and impairment charges on contract assets had resulted in the comparedcontributionGroupas toearnings FY2019the in performanceto yearits a ago. Thiscoupled with As major projects are still in their initial take off phase, this had resulted in a temporary respite in revenue and 31 December 2019 ascompared to aloss before taxof RM36.2millionincurred inFY2018. financial the ended contractduring year on million lossbeforeRM52.2million toRM155.5 a assets,led of tax of charges impairment and RM49.1million of off written costscontract (“LAD”), Damages Ascertained and Liquidatedfor million RM17 Provisionalof FY2018.charge in million RM36.2 comparedto as 330% or million The Group’s loss before tax was recorded at RM155.5 million for FY2019, an increase of approximately RM119.3 Loss beforeTax housing shortagewillhelp theindustry to grow over the next five years. Country’s the Moreover,addressrenewableprojects. to of Government effortsvolume the the increase and Government’simprovebythe tosupportedinfrastructure tourism plan Country’s transportnetworkand the yearsfew next the in projects construction subsector the boost also will project 2020 Government’svision several mega projectsof reviews and would initiatedsee a cut in the atdevelopment has Government expenditure new in the 2019 budget 2019.The However,report). of BNM (Source: the quarter . -1.5% 4th at 2019 at of recoveredquarter 3rd market from construction1% the in Growth 4.7%). (2018: 2019 in -4.8% 4.3% to moderated is product domestic gross as economy the in changes anticipate to tends market Malaysian REVIEW OFOPERATINGENVIRONMENT No dividendswere paidby theCompany for FY2019. Dividends Net Increase/(Decrease)inCashandEquivalents Financing Activities Investing Activities Operating Activities Net cashfrom/(usedin) Gearing ratio Total equity Net debt Less: Cashandcashequivalents Lease liabilities Loans andborrowings MANAGEMENT DISCUSSION & ANALYSIS 0.74 (28,531) 20,428 RM’000 RM’000 FY2019 32,152 (15,161) 27,651 16,807 12,662 10,106 17,717 2019 0.30 (37,852) (53,018) RM’000 RM’000 175,552 52,878 FY2018 90,730 42,999 (8,122) 1,897 2018 - 13 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 14 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD & ANALYSIS MANAGEMENT DISCUSSION au ad rwh o te ru fr the for Group the benefits ofourshareholders. forThank you. growth and value anyshortcomings difficulties and generate to more conquer to explore harder strive to and years opportunities continue coming will we the ahead, In challenges. despite Group the for commitment and effort their in put to clock the around hard working are to employeesloyalwho our to appreciation our support and express also We Berhad. Group Jaya Ikhmas patience trust, inspiring their for bodies regulatory and government investors, shareholders, bankers, partners, business suppliers, clients, our to gratitude deepest my express to wish I conclusion, In ACKNOWLEDGEMENTS and in years to come. results growth lines bottom the the in expecting improvement 2019. is December Group 31 The at as million RM575.2 approximatelyat stood book order Its plans. the market with all these initiatives the and action overcome to slowdown optimistic in economic and is competitiveness in Group The works. works, bridges, roads and other infrastructure piling and substructure works, superstructure bore in expertise core its grow and focus to strategiesbusiness its contracts,newchange for bid continuously to capacity productive size its right risk, gearing financial its lower its liquidity, operational strengthen cost, increase and efficiency its competencies, strengthen will core Group the addition, In business accordingly. challenges various the challenging to address continue the will strive harder with its prudent Groupmethodology to of the environment, spite In many more have beenforced to close. and traveloutlets retailgas, agencies, and oil tourism, construction, real estate, Covid-19 automotive, especially the Malaysia, in industries the of most of implication outbreak. the This impact of Covid-19 has affected to due and slowdown weak of domestic competition,economic environment intense the of view in challenging very remain to year financial next the for outlook the expects Group The PROSPECT ANDOUTLOOK manage risks andcreate opportunitiesto achieve sustainable goals. the Thus, group growth.will identify and sustainabilitymitigate any materialof sustainability mattersimplementation with the successfulstakeholders promptlya in achieveorder to to order in vendors and investors customers, our including stakeholders, the with relationship good a build and initiate to continue will IJGB embrace thevalues ofgoodcorporate citizen whopractise transparency corporate governance. Malaysia Bursa the adhereSecurities Berhad (“Bursa Securities”) in its Market Listing Requirements (“Listing Requirement”)to but also to only not statement sustainability this of requirement the that believes IJGB policies, ideas, new strategies, coherentpositive returns on itsenvironment, economic and socialbenefits. its having by journey framework,work practises tohelp thatcan plans action mitigateand any negative sustainability toimpact Groupthe with their ensure always IJGB onits stakeholders of benefits the for continuing sustainable environment, employees economic andsocialgrowth. amongst IJGB’s ownership into of embedded culture currently and is statement goal mission This generations. future the of needs environment the economic compromising and without social ecological, its in stakeholders their to value term long a create to IJGB helps development and goal Sustainability’s environment. economic challenging today in buoyant remain Group”)to “the or Jayadevelopment(“IJGB” SustainabilitykeyIkhmas GroupforBerhad the becomes goal SUSTAINABILITY STATEMENT achieve asuccessfulimplementationof stakeholders, includingourcustomers, development Sustainability build agoodrelationshipwiththe investors andvendorsinorderto IJGB willcontinuetoinitiateand sustainability growth. SUSTAINABILITY ecological economic environment STATEMENT social 15 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 16 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 26 June2019 24 July 2019 26 June2019 20 May 2019 20 May 2019 18 May 2019 23 April2019 9 April2019 5 March 2019 13 Feb 2019 27 June2019 25 May 2019 21 May 2019 21 Feb 2019 Training Date STATEMENT SUSTAINABILITY Basic rigging & slinging Basic rigging&slinging Scaffold awareness Manual handling Scaffold awareness Hot works handtools andpower tools Hazard effect &managementprocess HSE Induction Environmental management Solid waste andpubliccleaningmanagement Oil &chemicalspillagecontainment Safety liftingawareness Man overboard rescue drill Fire &evacuation drill Safety/ EnvironmentalTraining the Department of Compliance Environment’s requirement. Environment’s ofCompliance Department the quality were during conducted project execution to ensure with water and vibration noise, quality, air as such monitoring few a environment, of terms In sites. project and at issue safety environmental health, about awareness raise to and personnel objective, HSE our to train conducted were training and activities achieving various Towards completion. project and safe Safety Health, with to duration the achieve project throughout plan compliance Environmental in executed is sure project make to responsible are site HSE of. project for care including representatives taken are partners issues our HSE ensure require to also subcontractors We elements activities. crucial our are all in (HSE) environment and safety Health, 2019 PROGRAMMES AND TRAINING HSE the followings are properly carriedout. The Group. ensure to actions taking and act to the responsible is Management for responsible governance principally sustainability the is driving (“Board”) for Directors of Board The SUSTAINABILITY GOVERNANCE • • • and opportunities. risks sustainability material of Management sustainability risksandopportunities; of identification Materialityassessmentand Stakeholders engagement; Lrt3GS09 Ampang Lot 155 Ampang Lot 155 Ampang Lot 155 Ampang Lot 155 Ampang Lot 155 Ampang Lot 155 Ampang Lot 155 Ampang Lot 155 Ampang Lot 155 Stp Bridge 2 Stp Bridge 2 Stp Bridge 2 Stp Bridge2 Project These HSEtrainings andprogrammes are focused inthefollowing key areas: • • • mrec peaens and response preparedness Emergency Consultation and communication structure andresponsibility OHSAS management programme control, risk and assessment risk Planning for hazard identification, • • • efrac measuring, monitoring andimprovement Performance Operational control and awareness competence Training, SUSTAINABILITY STATEMENT 17 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 18 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD suppliers’ profile, track records, delivery timeliness, pricing,market reputation andproduct quality. over the quality of the products by performing its stringent assessment in choosing its suppliers through the its long-term relationship with its suppliers on its positive productengagement. IJGB tois maintaining a pertaining stringent control matters in support enquiries and complaints. Besides, IJGB betteralso maintains a healthy supply chain tomanagement through building trained is team support customers Our handling customers. and marketing of in skills and knowledge their our improve provides to constantly programmes IJGB training different chain, for value staffs product our in are who customers our to value add further To of doingbore-piling, bridgesprojects andmore ofinfrastructure projects inthefuture. Group’s competitiveness by improving its operation and cost efficiency in areas focusing on its core business This is prominent especially in the era of fast-paced business environment that IJGB continues to enhance the model. profit sustainable for valuechain their arein who suppliers relationshipwith good a maintaining and satisfaction customers’ its value through sustainability business maintaining in action proactive takes IJGB report, corporate products, corporate information, activitiesandothers. annual like access to public for website Company’s through up-to-date and comprehensivehttps://www.ikhmasjaya.com. website, is corporate Information IJGBonline through position and performance financial Theseshareholders are actively attending Group’s GeneralAnnual well and Meeting Group’s the informedof Group. the positively to benefits contributeeconomic factorswho ultimate the viewsareshareholders IJGB the for benefits economic of terms Company andtheCountry.in contribution term long the for organisation build the to in them team cohesive engage a to employees their to satisfaction job and job opportunities of learning culture equal the ownership, cultivates actively also IJGB Besides, societies. the to opportunities employment equal IJGB is committed to positively contribute to the sustainable economic growth for the Country. IJGB provides Economic MATERIAL SUSTAINABILITYMATTERS STATEMENT SUSTAINABILITY their productsmeetcustomers’ satisfaction intermsofquality We willalwaysensurethat and environmentallysafe building materials. benefits are being taken care of with its aim of delivering sustainable of delivering aim its ofwith environmental performance. care taken being are benefits and Systems Management EnvironmentalPerformance. In future, the Group will continue to ensure the stakeholders’ on improve as well as issues protected, to continue comply being alwayswith is the environment the legal ensure requirementsto responsibility on our environmentalis it Overall, and Safety ManagementSystems 18001 (“OHSAS 18001”) andISO14001. 9001. ISO of audit 2017,in Besides, certificationa obtained has IJGB Occupational, for surveillance Health their passes who IJSB, and IJGB both in shown has this and Regulations the and with Laws Safety successfully Health, complying Environmental, are processes their sure make to hard works IJGB environment. the on their impact evaluates its towards processes regularly operation IJGB organisation, corporate responsible a As against Occupational, HealthandSafety risksat workplace. employees, the safeguard to customers, contractors, frameworks suppliers, and local communities policies and other Group’sstakeholders the into IJGB always ensure that all the safety measures and controls are embedded of productivity increase activities, workers andthusenhance theoverall programme business operations. through workers costs with reduce regulations, and engagement better premiums, compensation lawsworkers’ in costs especially with compliance their improve to accidentat workplace. programmesthese Besides, Companythe help also incident, fire zero of non-conformance case of zeroauthority instruction maintaining and by zero illnesses incident and or injuries workplace prevent to businesses their help programmes ISO and HSE both that views IJGB new employees to attend. the environment and induction training programme on ISO 9001 is given to to provided their areemployees as awareness programmes programmes trainingto train them on HSE how to protect These programmes. ISO and safety and health programmes Group’s (HSE) Environment and Safety Thus, Health, the through performance improve materials. and building monitor safe to continues environmentally IJGB and quality of terms in satisfaction customers’ meet products their that ensure always will IJGB not release any hazardous emissions to theenvironment. does process building Group’s the Generally, materials. environmentally building of friendly usage more and processes monitoring cost through through recycling efforts, reducing wastage, managing and handling waste IJGB plays their responsibility in maintaining the environmental sustainability ENVIRONMENT SUSTAINABILITY STATEMENT 19 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 20 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD visiting oldfolk homeand orphanagehome. by carrying out more CSR programmes and structured activities like community” the to back “contributing of spirit the inculcate to like will Company the come, to years in community.Thus, the to return to embrace its responsibility for its actions and to encourageThe Group a viewspositive Corporate Social Responsibility (“CSR”) is important can fillupthecritical roles inthefuture intimesofcrisis. which talent succession the developing and identifying in the business, in success included always has planning exercises as part of the Group’s activities planning for the continuing Group’s resource the environment, human competitive sustainable the of view In great way to highlightitscore values andcultures. a are benefits staff and eventsCompany’s that believes IJGB staff. enjoyed being benefits other and all benefits by tomedical addition in transportation, and accommodation home with staff outstation uniform, Company’s with staff provided also IJGB Besides, others. and Celebrations Year New luncheon, Raya Hari celebrations,Year New celebrations,Chinese day celebrations,Christmas birthdaylike events appreciation staff of lot a organised IJGB Company. the to the creates always IJGB working environment growth, which gives social its staff sustainable a strong of sense of support belonging In maintain acontinuing growth oftheCompany. to order in challenging and importance indeed is attitude right the with talent right the finding that views IJGB marketplace. today in capital and its management for human its in investingsustainable of competitivegrowth social advantage sustainable the supports IJGB Social STATEMENT SUSTAINABILITY rwh f h eooi, niomn and environment social benefits. economic, the of growth sustainable the towards positively contribute proactivetopractise,action valuetoadds and will IJGB growth, taketofocus and priority its placetocontinue business the of fundamental element the becomes sustainability As thereof to bridgethegaps. recommendations, actions plans and strategies practical provide to analysis, gap performing in by delayed risks others problems, and payment flows subcontractors cash related like all risks mitigate to exercise assessment our improve comprehensiveperformrisk will process,IJGB and strengthen corporate governance andriskmanagement further To COMMITMENT key common enjoyed by benefits all staff being I. PRINCIPLE A-BOARDLEADERSHIPANDEFFECTIVENESS The following paragraphs describe how the Group has applied the Principles and Best Practices of the Code. interest ofotherstakeholders. accountintothe corporate shareholders’value,taking termgood whilst governancerealiselong to help will transparency,standardsof observehigh tointegrity. effort accountabilityand its believes Groupin Thethat Code the of Practices Best and Principles key the all with comply toendeavour its continue will Group The • • • best provisions, statutory following practices andguidelines:- the upon premised is framework governance corporate Group’s The by theCompany Group”). anditssubsidiaries(“the a to committed is Company”) (“the Berhad Groupcorporate culture Jayathat is based on the principles Ikhmas and best practices of corporate of governance Board”) and is practised (“the Directors of Board The i. h. g. f. e. d. c. b. a. include:- others amongst responsibilities and Board’srolesGroup’sresources. The stewardshipthe and of plans The Board establishes the vision and strategic objectives of the Group, directing policies, strategic action retains fullresponsibility for thedirection andcontrol oftheCompany andtheGroup. decision. Minutes of the respective Meeting final will be and presentedconsideration Board’s to the the Board for for its Meetings information. CommitteesThe Boardthe of outcome will the Board Committee the theto respective report of Chairman The efficiency. operating and business enhance to order in formed are Committees Thesereference. its of terms to written have committees responsibilities All Committees. certain Board delegates Board the effectively, functions and duties its discharging In management oftheCompany andGroup. and direction the foroversight stewardship and as well overallgovernanceas the provides Board The Practice 1.1RolesandResponsibilitiesoftheBoard BOARD RESPONSIBILITIES Malaysian Code onCorporate Governance Code”). (“the Main Market Listing Requirements ofBursa Malaysia SecuritiesBerhad(“BMSB”); Companies Act, Act”); 2016 (“the achievement ofthesegoals. impact and the Group’s strategic direction, establishing goals for Management and monitoring the Be responsible for the overall corporate governance of control the internal Group,system and oftheGroup; and including information environmental management and the social of integrity the and adequacy the Reviewing Company; the for policy communication shareholder a of implementation and development the Overseeing Establishing asuccession plan; Identifying principalrisksandensuringimplementation ofaproper riskmanagementsystem; material plans, Overseeing andevaluating theconduct andperformance oftheCompany andGroup; restructuring expansion, business budgets, acquisitions anddisposalsissuance ofnew securities; annual approving and Reviewing reporting financial approvedstandards; policies accounting acceptable including regulations relevant the with conform and statedfairly and truthful areGroup the of accountsstatutory the that Ensuring Reviewing andapproving theoverall strategic plansanddirection oftheGroup; CORPORATE GOVERNANCE OVERVIEW STATEMENT 21 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 22 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD

I. PRINCIPLE A-BOARDLEADERSHIPANDEFFECTIVENESS(CONT’D)

• • • • • In performing their duties,theCompany Secretaries carryout,amongst others,thefollowing tasks:- and procedures Board compliance oftheapplicablerulesandregulationsthe are complied with. that ensuring for Board the to responsible are who Secretaries Company the of services and advice the to access direct has Board The meetings. Committee Board and Board removalBoard’sand the approval,toappointment are subject CompanySecretarieswhose The attend the of members Associate are Ling Mei Chew Malaysian Institute ofChartered Ms Secretaries &Administrators. and Louis Cynthia Ms Secretaries, Company The Practice 1.4CompanySecretary management on opinions proposals presented and by theGroup ManagingDirector of andManagement. assessment interests independent view, the broader safeguard a to provide views They shareholders. independent and unbiased provide Directors Independent The in theBoard Charter whichismadeavailable intheCompany’s website www.ikhmasjaya.com. The roles of the Independent Non-Executive Chairman and the Group Managing Director are mentioned and heads of each division in implementing and running of the Group’s day-to-day business operations. and decisions. The Group Managing Director is assisted by the Executive Directors, Senior Management Director is Managing responsible Group for the the whilst day-to-dayBoard running the of of the working business and and conduct implementation proper of the Board’s for policies responsible primarily is The roles of the Chairman of the Board and the Group Managing Director are segregated. The Chairman Practice 1.2RolesoftheChairman BOARD RESPONSIBILITIES(CONT’D) the expense oftheCompany. necessary,at if advice professional independent seek may Directors the duties, their of furtherance In views andadvice. any pertinent Regulatory changes. Directors have access to management and auditors for independent of the corporate announcements released to BMSB, any amendment to BMSB Listing Requirements and upon specific financial, request to enable on them to discharge reports their duties and and responsibilities. Directors are information notified with supplied operational,corporate, are regulatory, businessdevelopment mattersaudit byand members way boardof reports or Board the above, the from Apart by theBoard priorto decision-making. are pertinent issues and recommendations. The issues informationwould then be deliberated and discussed thoroughly and documents relevant circumstances. the The Senior Management with and/or other relevant together Board members agenda will provide distributed explanation an to all of Directors at meetings, least five business days Board in advance of board to meetings unless in unavoidable Prior Practice 1.5InformationandSupportforDirectors Practice 1.3SeparationofrolesChairmanandGroupManaging Director OVERVIEW STATEMENT CORPORATE GOVERNANCE Rendering advice andsupportto theBoard andManagement. Commission Malaysia; and Assisting the Board with the preparation of announcements for release to BMSB and the Securities Maintaining records for thepurposeofmeetingstatutory obligations; Facilitating andattending Board MeetingsandBoard Committee Meetings; Market andServices Act 2007; Statutory duties as required under the Act, Main Market Listing Requirements of BMSB and Capital I. PRINCIPLE A-BOARDLEADERSHIPANDEFFECTIVENESS(CONT’D)

Committees Meetingsare asfollows:- during the financial year ended 31 December 2019held andMeetings theDirectors’ details ofof theBoard attendance(6) ofsix were theThere Directors’ Requirements. and Listing the under prescribed that 31 December ended year 2019. In compliance financial with the Listing the Requirements, all the during Directors do Companynot hold directorships more the than of Directors as responsibilities and roles their Directors towards fulfilling the given by commitment time level of the with satisfied is Board The Meetings andTimeCommitment BOARD RESPONSIBILITIES(CONT’D) • • • • • The mainactivities carried outby theBoard inyear 2019 are setoutbelow:- The aboveexcludestheDirectorswhowereappointed subsequenttothefinancialyear. AGM NRC ARMC Total NumberofMeetings (Resigned on 4October 2019) Ms Tan Ming-Li (Resigned on 15May 2020) En DzulkifliDavid binAbdullah (Resigned on 5May 2020) Mr Yuen ChoongLai Mr AngWei Zhen Dato’ Ir. Dr. KhooPingSen Mr Siew MunLout Dato’ AngChengSiong (Resigned on5 May 2020) binSyed Awalluddin Dato’ Syed AriffFadzillah Directors collectively raised RM9.145 million. Reviewed and approved the Private Placement exercise which was carried out in two tranches and they have carriedouttheirdutiesinaccordance withtheirrespective terms ofreference. and individual directors, the ARMC, NRC and each member of the Board Committees to ensure that Reviewed the terms of office and the contribution, performance and the effectiveness of the Board Reviewed andvalidated theresults ofthe 2019 Board Effectiveness Evaluation; and Received updates onriskmanagementandinternal control; Reviewed andapproved theannualreport, quarterly results andfinancial statements; - - - Annual GeneralMeeting Nomination &RemunerationCommittee Audit &RiskManagementCommittee

Directors Board of CORPORATE GOVERNANCE 4/6 6/6 6/6 6/6 5/6 5/6 5/6 3/4 6 OVERVIEW STATEMENT ARMC 6/6 6/6 5/6 3/4 6 - - - - NRC 3/3 3/3 2/3 2/2 3 - - - - AGM 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1 23 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 24 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD II. I. PRINCIPLE A-BOARDLEADERSHIPANDEFFECTIVENESS(CONT’D) decision-making process whenapotential conflict ofinterest arises. It is a mandatory practice to have the Directors concerned to declare their interests and abstain from the guidance, unbiased,fullybalanced andindependentobjective views. Independent Non-Executive Directors, are actively involved in various Board Committees. They provide They,the judgment. particularly their exerciseof the with interferematerially could which relationship The Non-Executive Directors of the Company are independent of management and free from any business scope andscaleof the Group’s business operation. Independent Directors. However, the Board considers that its current size commensure comprise with Boardthe presentthe of half least at requires which Code the of 4.1Practice of requirement the of note directors or one-third of the Board (whichever is the two leasthigher) atrequires to which Requirements Listing be the of Paragraph15.02Independent with complied Directors.has Board The The Board took Directors andfour (4)Executive Directors. Non-Executive Independent (3) three comprising members (7) seven of consists currently Board The Board Composition Practice 4.1BoardCompositionandIndependence BOARD COMPOSITION com. and/or waste abuse. fraud, The corruption,Whistle Blowing wrongdoings, Policy misconduct, is available known and/orfor reference suspected anyat the about Company’sfear, website at www.ikhmasjaya. employeesBlowingforWhistlePolicy concerns,a placeraisetowithout genuine in has BoardThealso of Malaysia. The Code ofEthicsispublished intheCompany’s website at www.ikhmasjaya.com. The Directors observe the Company Directors’ Code of Ethics established by the Companies Commission Practice 3.2WhistleblowingPoliciesandProcedures Practice 3.1CodeofConductandEthics The Board Charter was last reviewed inApril2018. Board’s objectives andresponsibilities, andalltherelevant standards ofcorporate governance. The Board will review the Board Charter as and when necessary to ensure it remains consistent with the activities. The Board Charter canbefound ontheCompany’s website at www.ikhmasjaya.com. boardroom towards as duties as well stewardshipfiduciary Company the their discharging in and roles the regarding responsibilitiesBoard forthe Board of and Committees, requirementsthe Directorsof their out carrying in Management point and reference Directors for a guidance provides as Charter serves Board which The activities. Charter Board Board a adopted and established has Company The Practice 2.1BoardCharter BOARD RESPONSIBILITIES(CONT’D) OVERVIEW STATEMENT CORPORATE GOVERNANCE II. PRINCIPLE A-BOARDLEADERSHIPANDEFFECTIVENESS(CONT’D)

• • • • • • • Statement were asfollows:- CG this of date the until Statement CG preceding the since Board the of composition the to Changes Changes inBoardComposition BOARD COMPOSITION(CONT’D) the Seventh (7th)AGM to theBoard. at directors of re-election the recommended and Directors the of assessment an out carried NRC The (9) years asat thedate ofthisStatement. nine than moreserved Non-Executive has DirectorIndependent havewho any not does CompanyThe judgement ortheirabilitiesto actin thebest interest ofthe Company. the that believes tenureDirectorsand Independent of Boardthe on interferenot does objectivestheir with independent and contributions critical by and Company valuable the making toare losswho members a Board in of result exit may the service of terms of limitation the that mindful is Board The an independentdirector. directoras said the retainprocessvotingtotwo-tier a through sought approvalshareholders’be must eventthe In Boardthe continues to retain directorindependent the after twelfththe year,(12th) annual director,shareholders’independent approval.annual an retainedseek as be and justifyBoardmust the on the Board subject to his re-designation as a non-independent director. In the event such Director is to of nine (9) years. Upon completion of the nine (9) years, an independent director may continue to serve The Code recommends that the tenure of an Independent Director should not exceed a cumulative term Practices 4.2and4.3TenureofIndependentDirector materially of independence demonstrated by allIndependentDirectors. could that transactions and/or relationships level any the with satisfied TheBoardwastruly decisions. and judgements interfereindependent their with had Director Independent the of None the by completing independence their confirm to required are independence checklist. Directors the basis, annual an On directors existing and directors for based ontheguidelinessetoutinListing candidate Requirements. of independence the assess to set been have Criteria Annual AssessmentofIndependence Mr Yong Kok Yee, MrLeong Kah MunandMrLimKean Lamwere appointed on 1June2020. Dato’ AbdulManapBinAbd Wahab resigned on27 May 2020 Ms HonShilHongresigned on21May 2020 En DzulkifliDavid binAbdullah resigned on15May 2020 Dato’ Syed AriffFadzillah binSyed Awalluddin andMrYuen ChoongLairesigned on5May 2020 Dato’ AbdulManapBinAbd Wahab andMsHonShilHongwere appointed on9March 2020 Ms Tan Ming-Liresigned on4October 2019 CORPORATE GOVERNANCE OVERVIEW STATEMENT 25 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 26 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD II. PRINCIPLE A-BOARDLEADERSHIPANDEFFECTIVENESS(CONT’D) at theBoard level. Board appointees as it recognises that a diversified Board will provide effective and dynamic discussions of its Board members, the Board has always taken into account diversity as one of Although the Company the does not currently haveselection a written policy on diversity pertaining criteriato the selection of new of selection the considering when criteria candidates to theBoard. main the be will Company the and to knowledge relevant the expertise and individual the of of merits However, part exercise. the recruitment as and considered selection is its diversity boardroom that ensure to measures appropriate takes Board The cultural age, gender, to limited not background, but educational background, ethnicity, including professional experience, skillsandknowledge. forms, of number a in itself presents diversity that bydiscussionsmade Boardthe have consideredbeen fromview.of points all The Board acknowledges and an attribute of a well-functioning Board. Diverse views enhance Board The discussions Board and acknowledges ensure the that importance the of diversity as an essential virtue of good corporate governance Practices 4.4and4.5BoardDiversity BOARD COMPOSITION(CONT’D) OVERVIEW STATEMENT CORPORATE GOVERNANCE II. PRINCIPLE A-BOARDLEADERSHIPANDEFFECTIVENESS(CONT’D)

The experience matrix, ageandgenderdiversity oftheBoard duringthefinancial year are as follows:- Practices 4.4and4.5BoardDiversity(cont’d) BOARD COMPOSITION(CONT’D) The above excludes theDirectors whowere appointed subsequentto thefinancial year.

2020) (Resigned on 5May Awalluddin Fadzillah binSyed Dato’ Syed Ariff Directors Mr Siew MunLout Siong Dato’ AngCheng 2020) (Resigned on5May Mr Yuen ChoongLai Mr AngWei Zhen Ping Sen Dato’ Ir. Dr. Khoo October 2019) (Resigned on4 Ms Tan Ming-Li 2020) (Resigned on15May Abdullah En Dzulkifli David bin √ Consultancy

Industry /Backgroundexperience

√ Academic

√ Service Public √ √

√ Finance Corporate /Banking/ Finance / Accounting √ √ √

√ Management Chain Procurement/Supply √ √ √ Management Project √ √

CORPORATE GOVERNANCE √ Regulatory Legal/

OVERVIEW STATEMENT

√ √ Engineering Civil √

√ Management Construction √ √ √ √ √

√ √ Economics √ √ 35-40

Age composition

√ 50-55

√ 56-60 √

√ 70 – 61 √ √ 80 – 71 √

Gender

√ Male √ √ √ √ √ √ √ Female 27 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 28 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD II. PRINCIPLE A-BOARDLEADERSHIPANDEFFECTIVENESS(CONT’D) Terms ofReference was reviewed by inApril2018. The terms of reference of the NRC can be found on the Company’s website at www.ikhmasjaya.com. The Board’s the reviews also NRC succession planaswell asthetraining anddevelopment The needsoftheBoard. character. and expertise the professional with knowledge, individuals comprises skills, Board the requisite that ensuring in Board the assist to is NRC the of role The business the with line in packages, remunerationstrategy, responsibilities andexpertise, andlong-term the objectives oftheGroup. recommending and Management Senior and of performance and contributions individual directors. and Further, Committees the NRC Boardis to establish Board, a framework the on remuneration of of the effectivenessBoard members the assessing directorsand of proceduresselection implement forto Board the assistto is NRC the objectiveof The Practices 4.7&6.2 and decideontheappointmentofproposed candidate. its recommendation to the Board. Based on the recommendation of the NRC, makethe Board wouldwould evaluateNRC the candidate, proposed the of evaluation and assessment the of completion Upon commitment to attend to theduties/functions oftheBoard. wisdom, integrity, the candidate’s the Board, understanding of the business environment and the willingness assess to devote adequate time and also would NRC independence, ability to make independent The and analytical inquiries, ability to work as a team qualification. to support and resume, vitae candidate’s the curriculum of review a others, among include may process assessment/evaluation The proposed candidate. the evaluationon and assessment an conduct to responsible is NRC the proposal, the of receipt Upon party referrals. third or shareholders management, senior directors,existing by proposed be may candidate potential The NRC. the by identified Board the in competencygap the close toorder in Board the professionto retirement or other reasons or if there is a need to appoint additional directors with the required skill or The NRC is responsible to recommend candidates to the Board to fill vacancies arising from resignation, duties/functions ofthe oftheBoard. Board, understanding the to the attend to commitment to and time adequatedevote to willingness the add value and environment business would that expertise and qualification skill, the requiredof possession Board, the support to team a as work to ability inquiries, analytical make to ability candidate, the of independence wisdom, integrity,experience, the Requirements, Listing the and Act as director. Consideration would be taken on the need to meet the regulatory requirements such as the The Board does not set specific criteria for the assessment and selection of candidates for appointment Practice 4.6SourcingofDirectors BOARD COMPOSITION(CONT’D) OVERVIEW STATEMENT CORPORATE GOVERNANCE Nomination&RemunerationCommittee(NRC) II. PRINCIPLE A-BOARDLEADERSHIPANDEFFECTIVENESS(CONT’D) (v) (iv) (iii) (ii) (i) has duringthefinancial year andup to thedate ofthis CG Statement carriedout: responsibilitieseffectively,Toand duties dischargeits to able NRC Boardwouldbe the the ensurethat Annual AssessmentofExistingDirectors&BoardCommittees before NRC the by assessed be shall AGMrecommendation ismadeto theBoard andshareholders next for there-election. the at and re-election to subject are who Directors her or evaluation were reported to theBoard his for furtherconsideration andaction,ifrequired. and Group the the from recommendations and results The Group. and the with transaction Directorsignificant any involvementin Independent the between relationship the include Director Independent an of independence the assessing for criteria The reporting. financial and audits internal quality,effectivenessand externaland include criteria assessment the and ARMC the evaluationon an others, and decision making as among well as participation at include Board and Committee Meetings. criteria The NRC also undertook assessment the contribution Evaluation,and performance, calibre Board and personality, and Board Performancesmix and composition, Individual quality of For information by Non- Independent Assessment Executive of Directors Assessments”). (“the Assessment, Independence of Committee’s Assessments and Board Assessments and Peer and Board Directors Individual a of comprised evaluation Board The Practice 5.1EvaluationofBoard,BoardCommitteesandIndividualDirectors Ms Tan Ming-Li(Resigned on4October 2019) Dato’ AbdulManapBinAbdWahab (Appointedon9March2020andresigned27May2020) Ms HonShilHong(Appointedon9March2020andresigned21May2020) En DzulkifliDavid binAbdullah(Resignedon15May2020) Mr Yuen ChoongLai(Resignedon5May2020) Mr Leong Kah Mun(Appointedon1June2020) Mr Yong Kok Yee (Appointedon1June2020) Members Dato’ Syed AriffFadzillah binSyed Awalluddin (Resignedon5May2020) Mr LimKean Lam(Appointedon1June2020) Chairman Non-Executive Independent of exclusively (comprises NRC the Directors) in during the financial year under review changes and up to the date and of this CG Statement are as composition follows:- The Practices 4.7&6.2 BOARD COMPOSITION(CONT’D) office ofitsmembers for another and year which was dulyapproved by theBoard; the performance with of term the satisfied of extension the recommended had was and members its NRC and ARMC the of effectiveness The reporting. financial and audits internal and effectivenessquality,include assessmentcriteriaand the and evaluationARMC externalan the on a review and assessment onthecomposition anddiversity oftheBoard Committees; an assessment ontheindependence oftheIndependent Directors; a review ontheretirement ofDirectors by rotation eligible for re-election at the7thAGM; Directors; individual the by out carried self-assessment the includes which Directors, the of assessment an Nomination &RemunerationCommittee(NRC)(cont’d) CORPORATE GOVERNANCE OVERVIEW STATEMENT 29 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 30 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD II. PRINCIPLE A-BOARDLEADERSHIPANDEFFECTIVENESS(CONT’D)

(viii) (vii) (vi) has duringthefinancial year andup to thedate ofthis CG Report carriedout (cont’d): responsibilitieseffectively,Toand duties dischargeits to able NRC Boardwouldbe the the ensurethat Annual AssessmentofExistingDirectors&BoardCommittees(cont’d) BOARD COMPOSITION(CONT’D) a) a) forthcoming the AGM,at inaccordance withtheCompany’sre-election Constitution:- for themselves offer to eligible and retire will Directors following The AGM to beheldfollowing theirappointments. next the at re-election seek and retire shall year the during Board the to appointed are who Directors each Director shall retire from office at least once in every three years but shall be eligible for re-election. to one-third (1/3) shall retire from office and shall be eligible for re-election at each AGM. Consequently, nearestnumber the then (3), three of multiples or (3) three not is number their if or being time the for In accordance with the provisions of the Company’s Constitution, at least one-third (1/3) of the Directors Re-election ofDirectors election ofDirectors at theforthcoming AGM. re- the for Board the torecommendation NRC’s the for basis the form Assessments the of results The make aneffective contribution anddemonstrates astrong commitment to therole. Directorcommitteeoperatetotocontinuecontinueseach its effectivethat of and each Boardand the There were no major concerns arising from the results of the Assessments. The feedback confirmed that OVERVIEW STATEMENT CORPORATE GOVERNANCE Clause 119: Clause 97 : AGM. forthcoming the approvalat for shareholders the to tabled be to 2020 December 31 ending year a review and recommended to the Board the proposed payment of the Directors’ fees to for the tabled financial be to AGM next shareholders for approvalthe at theforthcoming AGM; and to up 2020 July 28 from period the for Directors Executive Non- to paid benefits and Directors’fees proposed the Board reviewthe recommendedtoa and Hong asIndependentNon-Executive Directors; Shil Hon Ms and Wahab Abd Bin Manap Abdul Dato’ of appointment the Directors of Board the on to writing recommended had requirements in requisite other confirmation and commitment and time declarationtheir others, the amongst obtaining upon and Company Non-Executive Independent the as of appointment Directors for Hong Shil Hon Ms and Wahab Abd Bin Manap Abdul Dato’ namely candidates, proposed the of suitability the on evaluation and assessment an Dato’ AngChengSiong Mr Yong Kok Yee Mr LimKean Lam Mr Leong Kah Mun

II. PRINCIPLE A-BOARDLEADERSHIPANDEFFECTIVENESS(CONT’D) The above excludes the Directors whowere appointed subsequentto the financial year. as follows: For the financial year under review, the training programmes and seminars attended by the Directors are to enhance theirprofessionalism andknowledge. attendtraining programmes toseminars and keep abreast developmentswith industrythe in wellas as ensures the fulfilment ofand suchDirectors training deemedthe appropriate. of The Boardneeds members aretraining also encouragedthe to time to time from assesses NRC The insight strategies. management gain to members Board its and developmentsregulatory latest advances,economy, technological for the of awareness maintain vital and is education continuous that acknowledges Board The to keep abreast withthelatest developments onlaws andregulations. are encouraged to attend relevant seminars and conferences to enhance their skills and knowledge and Directors2020. June 1 Non-Executiveon wereappointedIndependent Directors who appointednewly All the Directors of the Company have attended the Mandatory Accreditation Programme other than the Directors’ Training BOARD COMPOSITION(CONT’D) (Resigned on4October 2019) Ms Tan Ming-Li (Resigned on5May 2020) Mr Yuen ChoongLai (Resigned on 15May 2020) En DzulkifliDavid binAbdullah Mr AngWei Zhen Mr Siew MunLout Dato’ Ir. Dr. KhooPingSen Dato’ AngChengSiong (Resigned on 5May 2020) bin Syed Awalluddin Dato’ Syed AriffFadzillah Directors Defences: Section17A,MACC Act. • FIDEOpenEnrolment Programme -Raising Road to Business Excellence • Demystifying andDiversity Conundrum: The Consequences • MFRS17:Understanding itsImpactand Implementation ofSection17AtheMACC Act Implementation ofSection17AtheMACC Act Implementation ofSection17AtheMACC Act Implementation ofSection17AtheMACC Act Implementation ofSection17AtheMACC Act Anti-Corruption Commission Act 2009(“MACC Act”) Implementation ofSection17AtheMalaysian Commission Act 2009) Corruption (Malaysian Anti-Corruption • Preparation for Corporate Liabilityon • Corporate Governance andAnti-Corruption Next Performance Level • Business Transformation–Going To The Seminar/Forum/Conference/Training CORPORATE GOVERNANCE OVERVIEW STATEMENT 31 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 32 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD III. PRINCIPLE A-BOARDLEADERSHIPANDEFFECTIVENESS(CONT’D) The aboveexcludes theDirectorswhowere appointedsubsequent tothefinancialyear. N2 N1 Details ofDirectors’ remuneration for thefinancial year ended31December 2019 are setoutasbelow:- Practices 7.1and7.2DisclosureofRemunerationDirectorsandSeniorManagement Director isinvolved indecidinghisown remuneration. The fees for Directors are determined by the Board with the approval from Shareholders at the AGM. No experience andlevel ofresponsibilities undertaken by eachoftheNon-Executive Directors concerned. the Executive Directors. In the case of Non-Executive Directors, the level of remuneration shall termsreflect of reference the to assist the Board, amongst others, to recommend to the Boardits under the entrustedremuneration is NRC of TheGroup. the of business the manage requiredto quality the of Directors The NRC shall ensure that the levels of remuneration are competitive in the market to attract and retain for achieving theCompany’s business andcorporate goals. motivate the Directors of the highest quality and to recognise and reward the high performing Directors The objectives of the Company’s remuneration policy on Directors’ remuneration is to attract, retain and Practice 6.1RemunerationPolicyandProceduresforDirectorsandSeniorManagement REMUNERATION Total (Resigned on4October 2019) Ms Tan Ming-Li (Resigned on5May 2020) Mr Yuen ChoongLai (Resigned on15May 2020) En DzulkifliDavid binAbdullah (Resigned on5May 2020) binSyed Awalluddin Dato’ Syed AriffFadzillah Non-Executive Directors Mr LimTock King Mr ChongCheeKen subsidiaries Executive Directorsof Mr AngWei Zhen Mr Siew MunLout Dato’ Ir. Dr. KhooPingSen Dato’ AngChengSiong Executive Directors Group OVERVIEW STATEMENT CORPORATE GOVERNANCE Benefits-in-Kind comprisedmeetingallowance. Welfare contributionandEmployment InsuranceSchemecontribution. Other Emoluments comprised allowances, Employer’s Provident Fund contribution, Social Security 164,000 40,000 46,000 30,000 48,000 (RM) Fees ------Incentives 2,466,000 Bonuses, 480,000 540,000 240,000 Salaries, 720,000 243,000 243,000 (RM) - - - - Emoluments 333,288 64,080 30,458 65,986 25,920 59,258 87,586 Other (RM) N1 - - - - Benefits-in 54,000 16,000 16,000 13,000 kind 9,000 (RM) N2 ------3,017,288 605,986 307,080 268,920 270,458 807,586 539,258 64,000 62,000 39,000 53,000 Total (RM)

III. PRINCIPLE A-BOARDLEADERSHIPANDEFFECTIVENESS(CONT’D) (ii) (i) fees, benefitsandtheir respective re-election asDirectors. Directors’their to pertaining Resolutions AGMon 7th forthcoming the atvoting fromabstain shall and The Directors who are shareholders of the Company had abstained from voting at the previous 6th AGM to theCompany andtheGroup for thefinancial year ended31December 2019. Saved as disclosed above, there were no other remuneration paid for services rendered by any Director The aboveexcludestheDirectorswhowereappointedsubsequent tothefinancialyear. N2 N1 (cont’d):- below as out set are 2019 December 31 ended year financial the remunerationfor Directors’ of Details Practices 7.1and7.2DisclosureofRemunerationDirectorsandSeniorManagement(cont’d) REMUNERATION (CONT’D) (Resigned on 5May 2020) Mr Yuen ChoongLai (Resigned on 15May 2020) En DzulkifliDavid binAbdullah (Resigned on5 May 2020) binSyed Awalluddin Dato’ Syed AriffFadzillah Non-Executive Directors Mr AngWei Zhen Mr Siew MunLout Total (Resigned on 4October 2019) Ms Tan Ming-Li Dato’ Ir. Dr. KhooPingSen Dato’ AngChengSiong Executive Directors Company The Non-Executive Directors are notentitledto any otherbenefitsorincentive plan. Non-Executive Directors AGM. The fees willnotbepaiduntiltheapproval oftheshareholders intheforthcoming AGM. meeting allowance of up to RM85,000 for the period from the forthcoming 7th AGM up to the next and 2020 December 31 ending year financial the forRM210,000 to the up of FeesDirector for Proposed AGM forthcoming the at shareholders the of approval the seeking be will Company The Directors’ Fees/MeetingAllowance Benefits-in-Kind comprisedmeetingallowance. Welfare contributionandEmploymentInsuranceSchemecontribution. Other Emoluments comprised allowances, Employer’s Provident Fund contribution, Social Security 164,000 40,000 46,000 30,000 48,000 (RM) Fees - - - - Incentives Bonuses, 480,000 Salaries, 120,000 120,000 120,000 120,000 CORPORATE GOVERNANCE (RM) - - - - OVERVIEW STATEMENT Emoluments 60,444 14,993 14,993 15,229 15,229 Other (RM) N1 - - - - Benefits-in 54,000 16,000 16,000 13,000 kind 9,000 (RM) N2 - - - - 758,444 134,993 134,993 64,000 135,229 135,229 62,000 39,000 53,000 Total (RM) 33 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 34 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD III. PRINCIPLE A-BOARDLEADERSHIPANDEFFECTIVENESS(CONT’D) Members : Chairman: of thisCG Statement are asfollows:- The present composition and changes in the ARMC during the financial year under review and up to the date their rights are set out in the Terms of Reference contained on the corporateas well as ARMC websiteDirector.the Independent of responsibilitiesan and roleat is The ARMC www.ikhmasjaya.com.the of Chairman The being IndependentDirectors. fewer than three (3) members and that all members must be Non-Executive Directors no with comprise a ARMC the majority requires which of of Requirement them Listing the of requirements the fulfils also and Code the of recommendation Step-Up the on based Directors Independent exclusivelyof up made is ARMC The Practice 8.4(StepUp)IndependenceoftheAuditandRisk ManagementCommittee Practice 8.1AuditandRiskManagementCommitteeComposition andChairman PRINCIPLE B-EFFECTIVEAUDITANDRISKMANAGEMENT Details oftheactivitiescarried outby theARMCinFYE2019 are set outonpages39 to 42. The Terms ofReference oftheARMCwas last reviewed inApril2018. (iv) (iii) Practices 7.1and7.2DisclosureofRemunerationDirectorsandSeniorManagement(cont’d) REMUNERATION (CONT’D) OVERVIEW STATEMENT CORPORATE GOVERNANCE N2 N1 the financial year ended31December 2019, isas follows: - The aggregate remuneration of the Senior Management (excluding Group Executive Directors) for Senior Management benefits, retirement including and allowances hospitalisation andsurgical insurance andavariable performance-linked bonus. salary basic includes which account the into compensation taking fixed asstructured contract service his in reflected is package remuneration BoardBoardor Committee attendshe meetings for Company.the for The feesGroup Director’sManaging meeting any or fee Directors’above the to entitled not is Director Managing Group The Group ManagingDirector

Group Level Mr Tham Fook Sun Mr Yap Yoon Fatt Dato’ Abdul Manap Bin Abd Wahab Ms HonShilHong(Appointedon9March2020andResigned21May 2020) En DzulkifliDavid binAbdullah(Resignedon15May2020) Dato’ Syed AriffFadzillah binSyed Awalluddin (Resignedon5May2020) Mr LimKean Lam(Appointedon1June2020) Mr Yong Kok Yee (Appointedon1June2020) Mr Yuen ChoongLai(Resignedon5May2020) Mr Leong Kah Mun(Appointedon1June2020) Benefits-in-Kind comprised meetingallowance. Ms Tan Ming-Li(Resignedon4October2019) Security Welfare contribution andEmployment Insurance Schemecontribution. Social contribution, Fund Provident Employer’s allowances, comprised Emoluments Other (Appointed on 9 March 2020 and Resigned on 27 May 2020) 200,000 -250,000 150,000 -200,000 Salaries, Bonuses, Incentives (RM) Emoluments Other (RM) N1 - - Benefits-In- Kind (RM) N2 - - perspectives that strengthen thequalityofdeliberations. public service and management control backgrounds, all of whom are financially literate and provide diverse ofthe member Lai,a input on financial matters. The ARMC also Choong comprises members with accounting, finance, banking, corporate, Yuen Mr by led was knowledge provide necessaryfinancial to Malaysianthe Accountants satisfactoryhas Instituteof who (MIA) Committee the review, under year financial the For The ARMCpossesses therightmixofskillsto discharge itsdutieseffectively. Practice 8.5FinancialLiteracyoftheARMC AGM. Auditors and the Board had recommended their re-appointment for shareholders’ approval at The ARMC the and the Board are satisfiedforthcoming with the performance, competence and independence of the External Auditors’ the that compromise satisfied not does is KPMG and by year KPMG independence. the by during year services the non-audit those during of provided provision fees the non-audit the considered has Board The RM248,000 (FY2018: RM245,000). The non-statutory audit fees incurred for services rendered to the Group by KPMG for financial year 2019 was the financial year, theARMCmetExternal Auditors twice withoutthepresence oftheManagement. topursuant termsduties its reference.and of functions toits Theperiodically out meets carry ARMC During observe acooling-off periodofat least two (2)years before beingappointed. In the event a former audit partner is appointed as a member of the ARMC, the former key audit partner is to their annualauditplanpresented to theARMCduringfinancial year. withthe accordance assurance in relevant written professionalregulatory auditengagement and requirements.AuditorsExternal Thehave provided declarationin such the a of with the conduct ARMC the throughout independence provided their independence,confirming their supporting in Auditors, External The size andcompetency oftheauditteam, audit strategy, auditreporting andpartnerinvolvement. fees, audit independence, and objectivity auditors’external the others, among include assessment of areas externalauditor.the of The suitability the assessing in team Management the with closely works ARMC The The Board through the ARMC reviews and assess the independence of the External Auditors on a yearly basis. Independence ofAuditors independent for Auditors Internal and ARMC the to access discussion. direct have and necessary when meetings relevant the ARMC attend with auditors external The Malaysia. compliance in standardsapproved accounting the applicable and regulations ensuring and advice professional seeking in Auditors External the with relationshipsappropriate maintaining for arrangementtransparent and formal a established has Board The statements. financial the of users to that assurancereliability of giving Group’s and statements financial the of reliability the enhancing by shareholders the for role essential an fill Auditors External independent Company’s The Practices 8.2and8.3OversightAssessmentoftheSuitability andIndependenceofExternalAuditors PRINCIPLE B-EFFECTIVEAUDITANDRISKMANAGEMENT(CONT’D) CORPORATE GOVERNANCE OVERVIEW STATEMENT 35 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 36 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD and to prevent, minimiseanddetect fraud andother irregularities. GroupDirectorsThethe havereasonableof stepsassetssafeguardgeneral totaking responsibility forthe a financial statements comply withall relevant rulesand regulations. the ensure to and Group the and Company the to of kept position financial are the records of accuracy reasonable accounting the reflect proper that ensuring for responsible are and acknowledge Directors The Statement ofDirectors’Responsibilities External Auditors ontheCompany’s compliance withtheapplicable approved financial reporting standards. financial issues the statementssignificant on and regulatory updates. obtains ARMC assurance The the from discuss to Auditors External their reportthe to the with ARMC followingmeets completion of also their audit. ARMC The External the Auditors shareaddition, with the In ARMC any audit. of commencement to prior On a yearly basis, the ARMC meets with the External Auditors to go through the Audit Planning Memorandum accounting policies. accuracy, process the financial reporting and of application and use appropriatenessconsistency the and of announcements of the Group’s results to BMSB. The Board is assisted by the ARMC in overseeing the Group’s of the Group’s financial performance to its shareholders, primarily through the Annual Reports and quarterly The Board, through the ARMC, endeavours to provide and present a balanced view and meaningful assessment Financial reporting SHAREHOLDERS WITH RELATIONSHIP MEANINGFUL AND REPORTING CORPORATE IN INTEGRITY - C PRINCIPLE seek clarification. or highlight toDirectorsany wish the that issues references,therearepertinent useful if serveas especially and facilitate to meetings attend to invited is and deliberation ARMC of audit reports. The the minutes of the to ARMC meetings are accessthen tabled to unrestrictedthe Board for has information function IA The out intheARMCReport andtheStatement onRiskManagementandInternal Control ofthisAnnualReport. set are function audit internal the on Details ARMC. the to directly report auditors internal outsourced The inthe implemented processes Group.and governance control management, ofrisk effectiveness and adequacy,efficiency the on assessment and review continuous undertake to Board the by tasked is function IA The of theactivitiesandoperations oftheGroup. The Group has outsourced its internal audit (IA) function to a professional service firm which is independent Practices 10.1and10.2InternalAuditFunction Statement onRiskManagementandInternal Control assetoutonpages43to 45oftheAnnualReport. the on disclosed are Group the by faced risks principal the and management risk to approachGroup’s The assurance ofeffective andefficientoperations and compliance withinternal procedures andguidelines. The Board has an overall responsibility in maintaining a sound internal control system that provides reasonable Practices 9.1and9.2RiskManagementInternalControl Framework PRINCIPLE B-EFFECTIVEAUDITANDRISKMANAGEMENT(CONT’D) OVERVIEW STATEMENT CORPORATE GOVERNANCE appointment ofacorporate representative isanalternative measure adopted by theCompany. corporation,the a of case the in or meeting the of Chairman proxiesexistingor proxyauthorising The form in thefuture. same the implementing considermayBoard the and practicemarketfacilitateparticipationshareholdersto or inabsentia voting enable to justifiable remoteHowever,shareholders’participation. economically developmentthe and monitortechnologyCompany will of the not currently is it involved, cost the Considering bythe voted are put forth members present inpersonorby proxy at thesaidvenue ofthemeeting resolutions and venue specified a in convened currently are Meetings General Practice 12.3ElectronicVoting for approval. tabled resolution each to relatinghave may they issues any clarify and questions raise to shareholders the wouldGeneralNRC toattendallowthe and Meetings ARMC the of Directors,Chairman the the All including Practice 12.2DirectorstoattendGeneralMeetings understanding andevaluation oftheissues involved. full facilitateordertothe in days meeting before28 AGMleastthe of atNotice the out Companysends The Meetings are heldasandwhenrequired. GeneralExtraordinary resolutions. all on voteto and AGM the at Board the with communicate and meet to The Company’s AGM serves as a principal forum for dialogue with shareholders. Shareholders are encouraged Practice 12.1NoticeofAnnualGeneralMeeting The Group hasyet to adoptintegrated reporting. Practice 11.2IntegratedReporting (iv) (iii) (ii) (i) developments oftheCompany andtheinformation iscommunicated to themthrough thefollowing:- Boardthe committedis to thatensuring shareholders the stakeholdersother and are well informed major of stakeholders, other and shareholders to information of dissemination timely of importance the Recognising Practice 11.1CommunicationwithStakeholders Corporate DisclosuresPoliciesandProcedures SHAREHOLDERS (CONT’D) WITH RELATIONSHIP MEANINGFUL AND REPORTING CORPORATE IN INTEGRITY - C PRINCIPLE access for thelatest information ontheGroup. The website at www.ikhmasjaya.com which shareholders as well as members of the public are invited to better understanding oftheGroup’s operations a andexplanation to any concern highlighted; them and provide to order in community investment other or investors key Company’s the to Briefings Results; The various disclosures and announcements made to BMSB including the Quarterly Results and Annual The AnnualReport; CORPORATE GOVERNANCE OVERVIEW STATEMENT 37 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 38 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD This statement was presented andapproved at theBoard ofDirectors’ Meetingheldon26June2020. the recommendations supportingthePrinciplesexcept asotherwisestated. The Board is satisfied that the Company has complied with the Code during the financial year with regard to ikhmasjaya.com. read together be with the CG Reportto 2019 of the Companyis which is availableit in the Company’sand websiteRequirements at www.Listing the of 15.25 Paragraph with compliance in prepared is statement This STATEMENT ONCOMPLIANCEWITHBESTPRACTICESOFTHECODE was Scrutineer Independent and vote the to put were resolutions appointed to verify thevotes andtheresults all ofthevoting were Company, announced instantaneously at themeeting. the of AGM 6th the At Practice 12.3ElectronicVoting(cont’d) Corporate DisclosuresPoliciesandProcedures(cont’d) SHAREHOLDERS (CONT’D) WITH RELATIONSHIP MEANINGFUL AND REPORTING CORPORATE IN INTEGRITY - C PRINCIPLE OVERVIEW STATEMENT CORPORATE GOVERNANCE of attendance oftheCommittee Membersisasfollows:- record the and 2019 December 31 (“FYE”) ended year financial the during held meetings (6) Thereweresix (Resigned on4October2019) Members : Chairman: during thefinancial year under review andup to thedate ofthisARMC Report are as follows:- Committee”)(“ARMC”Committee Management “the Risk or and Audit the in changes and compositionThe COMPOSITION ANDMEETINGS Audit andRiskManagementCommittee for thefinancial year ended 31December 2019. the of report the present to pleased is (“Company”) Berhad Group Jaya Ikhmas of Directors of Board The at www.ikhmasjaya.com andwas reviewed in2018. The Terms of Reference of the ARMC found under the “Official Documents” section of the Company’s website Terms ofReference The aboveexcludestheDirectorswhowereappointed subsequent tothefinancial year. (Resigned on 5May 2020) Mr Yuen ChoongLai (Resigned on 5May 2020) Awalluddin Syedbin Fadzillah Syed Dato’Ariff (Resigned on15May 2020) En DzulkifliDavid binAbdullah (Resigned on4October 2019) Ms Tan Ming-Li (Appointed wef1June2020) Mr LimKean Lam(IndependentNon-Executive Director) (Appointed wef1June2020) Mr Yong Kok Yee (SeniorIndependentNon-Executive Director) (Appointed wef9March2020andResigned21May2020) Ms HonShilHong(IndependentNon-Executive Director) (Appointed wef9March2020andResigned27May2020) Dato’ AbdulManapBinAbdWahab (IndependentNon-Executive Director) (Resigned wef15May2020) En DzulkifliDavid binAbdullah(IndependentNon-Executive Director) (Resigned wef5May2020) Dato’ Syed AriffFadzillah binSyed Awalluddin (IndependentNon-Executive Director) Ms Tan Ming-Li(IndependentNon-Executive Director) (Appointed wef1June2020) Mr Leong Kah Mun(Independent Non-Executive Director) (Resigned wef5May2020) Mr Yuen ChoongLai(SeniorIndependent Non-Executive Director) AUDIT ANDRISKMANAGEMENT NumberofMeetings COMMITTEE REPORT Attended 6 6 5 3 Held 6 6 6 3 39 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 40 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 1. Composition COMPOSITION ANDMEETINGS(CONT’D) 2. 1. Meetings The Company Secretary shallbe theSecretary oftheARMC. Secretary an be shall who number, their amongstmembers present at themeetingto betheChairmanofmeeting. from Chairman a elect Independent shall Non-Executive Director. CommitteeIn the absence of the Chairman, the members shall elect the any one of the of members The Chairman 6. 5. 4. 3. 2. (d) (c) (b) (a) following requirements:- the fulfil who Company the of Directors the amongst from Committee Remuneration and Nomination The members of the Committee are to be appointed by the Board based on the recommendation of the Independent Directors. be mustpresent majority the members; (2) twoleast at be shall Meeting Committee a for quorum The shall decide. Chairman the as meetings additional such yearand a times (4) four least at meet Committeeshall The any of appointment person(s) intheCommittee. the revoke and/or rescind to fit deems it as discretion the have shall Board The member ceases to beaDirector. a annually.when However,terminatesCommitteeRemuneration appointment and the Nomination the reviewed be by shall members its of each and Committee the of performance and office of terms The non-compliance ofparagraph 1above,the theBoard must fillthe vacancyin withinthree (3)months. resulting member a be to ceases reason any for or dies resigns, Committee the of member a If No Alternate Director shallbeappointed asamemberoftheCommittee. the be two (2)years before beingappointed. would it ARMC, the of member a as compulsory appointed requirement that the former key being audit partner(s) to observe a cooling-off is period of at least partner audit former a event the In COMMITTEE REPORT AUDIT ANDRISKMANAGEMENT (ii) (i) as follows: Malaysia Bursa the of MarketMain ListingRequirementsSecurities”) (“Bursa Berhad (“ListingRequirements”)Securities requisite expertise the fulfil must Committee the of member one least at all membersoftheCommittee shouldbefinanciallyliterate; and Independent Directors;being them of majority a with Directors, Non-Executive be must Committee the of members all the Committee must comprise ofnofewer thanthree (3)members; (iii) and: experienceworking years’ (3) three least at have must he MIA, the of member a not is he if he must beamemberoftheMalaysian Institute ofAccountants (“MIA”); or fulfils suchother requirements asprescribed orapproved by BursaSecurities. (2) (1) First Schedule oftheAccountants Act 1967; or he must be a member of one of the associations of accountants specified in Part II of the Accountants Act 1967; or the of Schedule First the of I Part in specified examinations the passed have must he • • • • External Audit • • Financial ReportingReview had, indischarging itsfunctionsandduties,carriedout,amongothers,thefollowing activities:- During the financial year under review and up to the date of approval for issuance of this Report, the Committee Summary ofActivities 6. 5. 4. 3. Meetings (cont’d) COMPOSITION ANDMEETINGS(CONT’D) Reviewed theauditfees before recommending to theBoard for approval. they would want to bringto theattention oftheCommittee. that matters anywere there if and 2019 December 31 the FYE for audit by of course providedthe during assistanceManagement the on Auditors External the with discussed Management, and Directors Reviewed and discussed on the audit for FYE 31 December 2019. Also, without the presence of Executive for tabling for Board the to recommendation beforeshareholders’ approval PLT on theirre-appointment astheexternal auditors oftheCompany. KPMG Messrs of suitability the Assessed milestones, auditmateriality andauditfocus areas. and timetable methodology, audit scope, audit the others, among covering Plan Audit the Reviewed for consideration andapproval. Reviewed the unaudited quarterly reports and announcements and made recommendation to the Board Reviewed the Group’s audited financial statements and made recommendation to the Board for approval. of consist may or several documentsallinthelikedocument form signedby oneormore members. single a in contained be may resolution such Any constituted. and held effectivebe shall resolutiona Committeeof the forpurposes of passedall meeting convened, ata duly A resolution in writing signed or approved via letter, telex, email or facsimile by all Committee members of theCommittee at eachBoard Meeting,willreport asummaryofsignificantmatters and resolutions. In addition to the availability of detailed minutes of the Committee Meetings to the Board, the Chairman The Internal Auditors shallpresent anddiscuss theinternal auditreports andotherrelated matters. the without Auditors External the with presence oftheexecutive meet board membersand employees. should Committee the year, a twice least However, at raised. matters of resolutions and deliberations its in assist to invitation,Committee’s the at meetings The non-member Directors and employees of the Company and of the Group shall normally attend the appear before theCommittee whenrequired to doso. The External Auditors have the right to appear and be heard at any meeting of the Committee and shall AUDIT ANDRISKMANAGEMENT COMMITTEE REPORT 41 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 42 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD • Related PartyTransactions • • • Internal AuditandRiskManagement COMPOSITION ANDMEETINGS(CONT’D) was RM6,000. The fees incurred by the Group in relation to the outsourced internal audit function for FYE 31 December 2019 recommendations andManagement’s response andactions, were tabledto theCommittee for deliberation. The reports on audits undertaken on the business areas, together with the internal control assessment, findings, • • • • • • • • assess to and policies reviews Company’s the audit with internal compliance procedures for theBBCC Project Management;whichprincipallycovers: and follow-up control internal conducted the Auditors of effectiveness Internal and adequacy the the 2019, December 31 FYE In established Group’s the test to designed and approach based framework risk ofcontrols to ascertain that they were operating effectively. a using performed were audits The Plan Audit Internal the which was on presented to, andapproved based by theCommittee. assignments audit and reviews regular undertook Auditors Internal The and exercise dueprofessional care, andreports directly to theCommittee. Corporate Services Sdn. Bhd. The outsourcedRCA namely function, Internal audit internal Auditors the out act carry toprovider serviceindependently external an with appointed has Groupimpartiality, The proficiency INTERNAL AUDITFUNCTION • Others

Internal Auditor’s observations duringthecourse oftheiraudit. on Management Executiveand Directorsof presence the without Auditors Internal the with Discussed of Project ManagementofBukitBintangCityCentre (“BBCC Project”). Reviewed and deliberated on the outsourced internal auditors’ report conducted follow-up on the areas Reviewed, discussed andapproved theoutsourced internal auditors’ auditplanandfees for 2019. Health, Safety andEnvironment Non-Conformance Issues, Corrective Actions andPreventive Actions Subcontractors Progress ClaimsPayment Progress Claims Billing Project Progress Tracking Subcontractors Sourcing, Evaluation andAward Project Resources andSchedulePlanning Origination of Contracts –Tendering andContract Award Reviewed theStatement onRiskManagementandInternal Control for inclusionintheAnnualReport. Company andtheGroup. Reviewed therelated partytransactions andconflict ofinterest situation that may arise within the COMMITTEE REPORT AUDIT ANDRISKMANAGEMENT • • • • are risks principal of reporting and management the framework, structured andorganised ERM into thefollowing broad riskcategories to facilitate riskmitigation: the of implementation the With by thesystem ofinternal controls that isintegrated into theGroup’s operations and processes. The framework is applied to determine, evaluate and manage principal risks of the Group. This is complemented • • • • • • elements: The Group has put in place an Enterprise Risk Management (“ERM”) framework which comprises the following • • Audit andRisk ManagementCommittee (“ARMC”) to: In providing oversight of risk management framework and policies of the Group, the Board is assisted by the RISK MANAGEMENT provide only can systemsreasonable butnotabsolute assurance control against material misstatement orloss. that noted be should it Therefore, goals. achievingpolicies Group’s and the procedures to and adhering not of risks the eliminate, than rather manage, to designed is system the that recognisesBoard The matters.controlstrategy, compliance and regulatoryoperational,organisational, financial management, risk governance,coverscontrol its internal of of system review The adequacy. the and effectiveness and framework and environment control appropriate an of existence the includes which The Board affirms its overall responsibility over the Group’s system of risk management and internal controls, BOARD RESPONSIBILITIES company’s assets. to companies listed public Malaysian requires maintain a which sound system of risk management and Code”), internal control to safeguard shareholders’ (“the investment and 2017 Governance Corporate on Code Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and the Malaysian This Statement on Risk Management and Internal Control is made in accordance with the paragraph 15.26(b) of INTRODUCTION training anddevelopment programs where relevant. with supplemented are these and guidance for place in areProcedures Operating Standard activities. Competency, which are risks associated with knowledge and resources in operational management and by the Malaysian Accounting Standards Board inthepreparation offinancial statements; financial standards reporting the misstatements Grouptominimizeissued any adopts financial the and place in set are controls Internal reporting. processes and financial relatedto risks are which Financial, various the thein Group’s areas ofoperationsstandards soasto achieve operational of efficiency; and practices best adopt effectiveness to endeavours and Group The efficiency products. operationaland activities the affect that risks are which Operational, the to Board’sbrought attention; are these and business Group’s the impact may that developments any highlight and Strategic, which are risks that impact the business direction of the Group. Initiatives are taken to identify Regular review oftheeffectiveness ofthesystem ofinternal controls. and Regular review, tracking and reporting on keys risks identified and corresponding mitigation procedures; of risks; Creation of a culture of risk-awareness and risk ownership for more effective and efficient management and minimisetheprincipalriskswhichadversely affect theGroup’s business; mitigate to and assessment, management evaluation,Process identification, and control, monitoring of Provide guidingprinciplesandapproach towards riskmanagement; the of direction and role Group; mission, vision, the organisation the across disseminate and Communicate to controls internal and Ascertain thenature andextent ofprincipalrisksthat may management impacttheGroup’s strategic objectives. risk of system sound safeguard shareholders’ investments andtheGroup’s assets; a and maintains Management that Ensure STATEMENT ONRISKMANAGEMENT AND INTERNALCONTROL 43 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 44 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD • • • KEY ELEMENTSOFTHEGROUP’SRISKMANAGEMENTANDINTERNALCONTROLSYSTEMS accordingly. practices such revise appropriate where and practices, management risk existing the evaluate to continue manage and evaluatesignificantidentify, risks to forManagement thethe financialwith year undertogether working reviewwere who havemembers resignedARMC inprevious May The 2020. The current ARMC shall function audit internal outsourced The function. audit reports directly to theARMC. internal outsourced the from controls internal on the by performed reviews outsourced independent internal audit throughfunction. In this proceduresrespect, the and Board, and systemthrough the ARMC controlreceives policies and Group’s internal reviews the reports the of with compliance integrity its and adequacy the assesses ARMC The ARMC. the to system control internal the of integrity and adequacy the reviewing of responsibility the delegated has Board The of thebusinesses over thelongterm. sustainability ensure and valuestakeholder enhance goals, achieveits to order processin management risk The Board undertakes all to pursue the necessity for continuous to improvements in its internal availablecontrol system and made are and regulations and laws employees. current/applicable with compliance and relevance ensure to basis ongoing an on updated arepractices procedures and policies, principles, management Risk RISK MANAGEMENT(CONT’D) Procedure documents. strategicdirection of and the Group.mission The vision, management sets out the key organisation policies and the procedures across in the disseminates Standard Operatingand communicates Board The Information andCommunication address therisingexposure to potential adverse credit, liquidityandlegal risks. areasare improvements and identified are required measures mitigation enhance risk to order the in to and regular of provision year, the key in During deficiencies numerousmaking. decision and monitoring for the indicators, business facilitate key to and performance operational procedures and financial covering operating management, to standardinformation comprehensive place in has Group The Control Activities and approval proper including and relevant authority, documentation andauditabletrail ofaccountability. delegated sufficient provides which reporting hierarchical of of process a byreinforced levels is This limits. appropriateauthorisation and reporting, of lines in pursuit of the Group’s objectives. There is a defined organisation structureManagement withhas established structures, scopes reporting lines ofand appropriate authorities responsibility,and responsibilities, controls. internal of system sound a towardsachieving and operations the business Group’s forthe of environmentconduct proper and structure control adequate a maintaining towards committed is Board The Control Environment and InternalControl Statement onRiskManagement This statement ismadeinaccordance witharesolution oftheBoard dated 30June2020. risk Group’s the improve to required, management andinternal control where systems inmeeting theGroup’s strategic and, objectives. sustain to measures pertinent take to continue will and aspects. all material control internal in of system the in in operation, weaknesses acknowledged Management the are and Board 2019 the Nevertheless, year financial the for place in systems control internal and The Board has also received assurance from the Group Managing Director that the Group’s risk management Group’s financial statements. of the needs in disclosed are disclosure futurerequire would that uncertainties immediate or contingencies losses, Material the Group. the address to challenges, the of light in strengthening further be to with need realignedreview under systems control internal and management risk the that view the of is Board The CONCLUSION the Group. of environmentcontrol internal the strengthen to measures implement and reviewto continues Board The • KEY ELEMENTSOFTHEGROUP’SRISKMANAGEMENTANDINTERNALCONTROLSYSTEMS(CONT’D) findings ontheGroup’s internal controls weaknesses are reported to theARMC. reviewthe followup exceptand one out for carried audit internal no wasthere 2019, In function. audit outsourcedinternalthe by supported are and activities monitoringperformance.The operatingand results financial of evaluation and tracking facilitate to designed are procedures operating Group’s The Monitoring Activities Statement onRiskManagement and InternalControl 45 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 46 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD and theCompany to prevent anddetect fraud andotherirregularities. Group the of assets the safeguard to them to open reasonably are that steps such taking for responsibility them to ensure that the financial statements comply with the Companies Act 2016. The Directors have overall with reasonable accuracy at any time the financial position of the Group and the Company and which enable The Directors are responsible for ensuring that the Company keeps proper accounting records which disclose • • • • To ensure that financial statements are properly drawn up, the Directors have taken the following measures:- yearended31 financial forthe Group of the December 2019. flows cash and performance financial position, financial the of view fair and true a give statements financial these that and 2016; Act Companies the of provisions the Malaysia, in standards accountingapproved applicable the with accordance in up drawn are Company the and Group the of statements financial annual the that ensuring haveoverallforDirectors responsibilityThe the Group andtheCompany willcontinue inbusiness. departures prepared material the financial statements on the going concern basis, unless it is any inappropriate to presume that to subject followed, disclosed andexplained been inthefinancial statements; and have standards accounting applicable ensured made judgementsandestimates that are prudentandreasonable; adopted suitableaccounting policiesandapplyingthemconsistently; STATEMENT DIRECTORS’ RESPONSIBILITY FINANCIAL STATEMENTS 68 65 63 62 61 54 53 52 48 Notes to theFinancialStatements Statement ofCashFlows Statement ofChangesinEquity Income Statements ofProfit or Loss andOther Comprehensive Statement ofFinancialPosition Independent Auditors’ Report to theMembers Statutory Declaration Statement by Directors Directors’ Report for theyearended31December2019 47 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 48 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD Results and Malaysia regardedin byincorporated theDirectors astheCompany’s ultimateis holdingcompany,which duringthefinancial year.of Bhd., Sdn. Holdings Jaya Ikhmas of subsidiary a is Company The Ultimate holdingcompany The significant changeinthenature works. oftheseactivitiesduringthefinancial year. foundation and piling no activities, been has statements. There financial the to 6 Note in stated holding as are subsidiaries the of activities investmentprincipal in engaged principally is Company The Principal activities ofthe and Group the of statements financial audited Company for thefinancial year ended31December 2019. the and report their submit hereby Directors The Hon ShilHong(appointed on9March 2020 andresigned on21May 2020) Dato’ AbdulManapbinAbdWahab (appointed on9March 2020 andresigned on27 May 2020) Dzulkifli David binAbdullah(resigned on15May 2020) Yuen ChoongLai(resigned on5May 2020) Dato’ Syed AriffFadzillah binSyed Awalluddin (resigned on5May 2020) Tan Ming-Li(resigned on4October 2019) Yong Kok Yee (appointed on 1June2020) Lim Kean Lam(appointed on1June2020) Leong Kah Mun(appointed on1June2020) Ang Wei Zhen Siew MunLout Dato’ Ir. Dr. KhooPingSen Dato’ AngChengSiong Directors whoserved duringthefinancial year untilthedate ofthis report are: Directors oftheCompany for thefinancial year under review. No dividend was paid during the financial year and the Directors do not recommend any dividend to be paid Dividends except asdisclosedinthefinancial statements. review under year financial the during provisions and reserves from or to transfers material no wereThere Reserves andprovisions Non-controlling interests Owners ofCompany Loss for theyear attributable to: for theyearended31December2019 Directors’ report (159,546) (157,779) RM’000 (1,767) Group Company (161,836) (161,836) RM’000 - Company orany otherbodycorporate. the of debentures or in shares of acquisition the of means by benefits acquireto Company enabling the of Directors of object the had which year financial the of end the at and during arrangements no were There the Director hasasubstantial financialinterest. related a or Company the which in company a by member, with a or is Director the made which of firm contracta with or Director the a corporationwith of reason by corporations) related of or Company the of employee time a full of salary fixed the or statements financial the in shown as Directorsreceivableby and receive aggregate the in of included amount remuneration benefit anybenefit a than (other received due or Since the end of the previous financial year, no Director of the Company has received nor become entitled to Directors’ benefits to theextent that IkhmasJaya Group Berhadhasaninterest. Khoo Ping Sen are also deemed interested in the ordinary shares of the subsidiaries during the financial year Ir.Dr.Dato’ and Siong Cheng Ang Company,Dato’ the of shares ordinary the in interests their of virtue By Note: follows: themselves are notDirectors oftheCompany) as recorded intheRegister ofDirectors’ Shareholdings are as who Directors the of children or spouses the interests of the (including end year financial wereatDirectors The interests and deemed interests in the shares of the Company and of its related corporations of those who Directors’ interestsinshares Yap Yoon Fatt Pang KimLeen Lim Tock King Chong CheeKen office duringthefinancial yearuntilthe date ofthis report are: TheCompany’sDirectorsthe of (excluding subsidiaries DirectorsCompany)Directorsare in the also who of Directors oftheCompany(cont’d) (1) Dato’ AngChengSiong Deemed interestsintheCompany Dzulkifli David binAbdullah Yuen ChoongLai Dato’ AngChengSiong company,IkhmasJayaGroupBerhad Interests intheholding Dato’ Ir. Dr. KhooPingSen

the Companies Act 2016. Deemed interested by virtue of their interests in Ikhmas Jaya Holdings Sdn. Bhd. pursuant to Section 8 of (1) (1) for theyearended31December2019 325,000,000 325,000,000 233,800 48,000 163,000 1.1.2019 At Number ofordinaryshares Acquired Directors’ report - - - - - (42,700,000) (42,700,000) Disposal/ Transfer - - - 282,300,000 282,300,000 48,000 31.12.2019 163,000 233,800 At 49 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 50 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD their obligations asandwhen they fall due. opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to the meet in which, year financial the of end the after months twelve of likely period is the within enforceableor become enforceable,to become has Group the in company any of liability other or liability contingent No ii) i) At thedate ofthis report, there doesnotexist: iv) iii) ii) i) At thedate ofthisreport, theDirectors are notaware ofany circumstances: ii) i) Directors took out, the made were the Company of and reasonable Group steps to ascertain that: the of statements financial the Before Other statutoryinformation during thefinancial year. Company the of auditor Director,any or forofficer effectedinsurance or to given indemnity no wereThere Indemnity andinsurancecosts No options were granted to any person to take up unissued shares of the Company during the financial year. Options grantedoverunissuedshares issued duringthefinancial year. TherewereshareCompany up the debenturepaid of issuedno and capital the and in waschanges other no all in passu pari rank respects withtheexistingissued shares oftheCompany.shares ordinary new The capital. working of purpose the for RM9,145,000 of ordinaryRM0.215shareper respectively privatevia investors placementstoeligible totalconsiderationa for During the financial year, the Company issued 20,000,000 and 23,000,000 new ordinary shares at RM0.21 and Issue ofsharesanddebentures financial year other thanthosedisclosedinNote 24 to thefinancial statements. the of end the since arisen has that Company the of or Group the of respect in liability contingent any year andwhichsecures theliabilitiesofany otherperson,or financial the of end the since arisen has that Company the of or Group the of assets the on charge any the financial statements oftheGroup andofthe Company misleading. not otherwise dealt with in this report or the financial statements that would render any amount stated in the Group andoftheCompany misleadingorinappropriate, or of liabilities or assets of valuation of method existing the to adherencerender which arisen have which of theCompany misleading,or wouldthat render valuethe attributed tocurrent the financial statementsthe assets Groupin the of and in theGroup andintheCompany inadequate to any substantial extent, or that would render the amount written off for bad debts or the amount of the provision for doubtful debts down to anamountwhichthey mightbe expected soto realise. any current assets which were unlikely to be realised in the ordinary course of business have been written all known baddebtshave beenwritten offandadequate provision madefor doubtfuldebts,and for theyearended31December2019 Directors’ report Date: 30June2020 Kuala Lumpur, Director Dato’ Ir.Dr.KhooPingSen ………………………………………………………… Director Dato’ AngChengSiong ………………………………………………………… Signed onbehalfoftheBoard ofDirectors inaccordance witharesolution oftheDirectors: The auditors’ remuneration isdisclosedinNote 20to the financial statements. The auditors, KPMGPLT, have indicated theirwillingness to accept re-appointment. Auditors Subsequent events after thefinancial year endare disclosedin Note 29 to thefinancial statements. Subsequent events Significant events duringthefinancial yearend are disclosedinNote 28 tothefinancial statements. Significant events occurred intheinterval between theendofthat financial year andthedate ofthis report. eventor transaction item, such any has nor nature unusual and material a eventof or transaction item, any affected substantially haveby been 2019 December not 31 ended financial year the Companyfor the of and and contract assets as disclosed in Note 20 to the financial statements, the financial performance ofIn thethe Group opinion of the Directors, except for the contract costs written off, impairment losses on trade receivables Other statutoryinformation(CONT’D) for theyearended31December2019 Directors’ report 51 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 52 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD Date: 30June2020 Kuala Lumpur, Director Dato’ Ir.Dr.KhooPingSen ………………………………………………………… Director Dato’ AngChengSiong ………………………………………………………… Signed onbehalfoftheBoard ofDirectors inaccordance witharesolution oftheDirectors: the and for thefinancial year thenended. Standards Reporting Financial Groupthe of Companythe of and atas December 31 performancefinancial 2019their of and flows cash and International Standards, Reporting requirements of the Companies Act 2016 in Malaysia Financial so as to give a true and fair view of Malaysianthe financial position with In the opinion of the Directors, the financial statements set out on pages 61 to 136 are drawn up in accordance Section 251(2)oftheCompaniesAct2016 Statement byDirectorspursuantto Statement byDirectors Wilayah Persekutuan Commissioner for Oaths Before me: Dato’ AngChengSiong ………………………………………………………… Kuala LumpurintheFederal Territory on30June2020. at 550223-10-5309, NRIC: Siong, Cheng Ang Dato’abovenamed the by declared solemnly and Subscribed the declaration to betrue, andby virtueoftheStatutory Declarations Act, 1960. to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing Group Berhad, do solemnly Jayaand sincerely Ikhmas declare that of the financial statements management set out onfinancial pages 61the to 136 are,for responsible primarily Director the Siong, Cheng Ang Dato’ I, Section 251(1)(b)oftheCompaniesAct2016 Statutory declarationpursuantto Statutory declaration 53 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 54 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD i) whole, andinforming ouropinionthereon, andwe donotprovide aseparate opiniononthesematters. were addressed in mattersthe context year. These of our financial audit of the financial current statements of the Group the and of the Companyfor as a Company the of and Group the of statements financial the of Key audit matters are those matters that, in our professional judgement, were of most significance in our audit Key AuditMatters to continue asgoingconcerns. Ouropinionisnotmodifiedin respect ofthismatter. that material uncertainties exist that may cast significant doubt on the ability of the Group and the Company by RM21.6 million. These conditions, along with other matters as set forth in Note 1(b) and Note 29.4, indicate year financial date,Groupthat the of currentexceededof as the December liabilities and, 201931 ended the currentits assets for respectively million RM161.8 and million RM159.5 of taxation after loss net a incurred We draw attention to Note 1(b) of the financial statements, which indicates that the Group and the Company Material UncertaintyRelatedtoGoingConcern we have fulfilledourotherethical responsibilities inaccordance withthe By-Laws andtheIESBA Code. Accountants’for Board Standards Ethics International the and (“By-Laws”)Accountants of Institute Malaysian the of Practice) and Conduct the Ethics, with accordance in Company the of and Group the of independent are We Independence andOtherEthicalResponsibilities audit evidence we have obtainedissufficientandappropriate to provide abasis for ouropinion. Auditors’ the in described further auditors’our of section Statements Financial report.the of Audit the for Responsibilities We believe are that the standards those under responsibilities Our Auditing. on Standards International and Malaysia in auditing on standardsapproved with accordance in audit our conducted We Basis forOpinion Reporting Standards andtherequirements oftheCompanies Act 2016 inMalaysia. accordanceStandards,Financial InternationalReportingin Malaysian Financial ended with year then the for flows cash and performance financial their of and 2019, December 31 at as Company the of and Group the of position financial the of view fair and true a give statements financial accompanying the opinion, our In summary ofsignificantaccounting policies,assetoutonpages 61 to 136. a including statements, financial the to notes and ended, then year the for Company the of and Group the of flows cash of statements and equity in changes of statementscomprehensive income, profitother and of loss statements or the Company, and the of and Group the of 2019 December 31 at as position financial of statements the comprise which Berhad, Group Jaya Ikhmas of statements financial the Weauditedhave Opinion Report ontheAuditofFinancialStatements estimating thecosts to complete theprojects. Construction contract accounting is inherently complex and there are significant judgements involved in The keyauditmatter and otherreceivables andNote 16-Revenue. income-Revenue, 11-Trade other Note Revenue and 2(o)(i)-Significant policy: accounting Note to Refer Revenue andprofitrecognitioncontractaccounting TO THEMEMBEROFIKHMASJAYAGROUPBERHAD INDEPENDENT AUDITORS’REPORT (“IESBA Code”), and Code”), (“IESBA Accountants Professional for Ethics of Code By-Laws (on Professional (on By-Laws i) Key AuditMatters(cont’d)

• • • • The key judgementsover theexpected recovery ofcosts for acontract arisefrom thefollowing: judgement in the assessment of contract variations which would impact the forecast profits on contracts.As the status of contracts are updated on a regular basis, the Directors are required to exercise significant have amaterial impactonthefinancial statements, whetherthrough error ormanagement bias. collectively or individually either can contracts for outcome potential The claims. and variations from costsarising of recovery the expected over key judgements involves contracts on recognition profit The period. current the in and date to recognised loss or profit of amount the variancein material a in result could contracts on profit estimated the in error An contracts. on costsforecast the of estimates preparing in involved judgement the of because matter audit key a is contracts on recognition Profit recognition. revenueof timing the and obligation performance each to pricetransaction of allocation the assess to customers performed by the Group and the Company and requires us to exercise significant judgement incurred. It requires involvement of our more senior personnel to assess the evaluation of contracts with while the contract costs related to satisfied performance obligations are recognised as cost ofRevenue sales from when fixed price construction contracts is recognised over time based on cost incurred method The keyauditmatter(cont’d) Revenue andprofitrecognitioncontractaccounting(cont’d) • • • • this area, ourauditprocedures included,amongothers: In testing.contract complexitydetailed accountingestimatesforof the or sizeaccordingerror their to Wevarietyquantitativea of used qualitative and factors materialcontractstoof select risk higher with How thematterwasaddressedinouraudit material adjustments to margin, whichcanbeeitherpositive ornegative. in result can progress,contracts as estimates,related the and judgements, the in changes addition, In The potential contract outcome can cover a wide range of scenarios, which can be individually material. contract withintheforecast timelines. Completeness and accuracy of forecast costs to complete the contract and the ability to deliver the Liquidated andascertained damages;and liable; is customer the which for costs additional other or delays for customer the against made Claims Variations to thecontract requested by thecustomer; Inspect the selected contracts and challenge the management’s estimates on both current and futurecurrent financialperformance. both on estimates management’s the challenge and contracts selected the Inspect profit margin, related receivables andpayables. revenue,contract of recognition the overcontrols key of implementation and design the Assess the impact/adjustments quantified by themanagement,ifany. reviewappropriatenessand for 15 MFRS of application the on assessment Reviewmanagement’s business understanding andindustry practice. our 15, MFRS of requirements on based policies accounting the of appropriateness the Evaluate TO THEMEMBEROFIKHMASJAYAGROUPBERHAD INDEPENDENT AUDITORS’REPORT 55 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 56 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD i) Key AuditMatters(cont’d) ii) • How thematterwasaddressedinouraudit(cont’d) Revenue andprofitrecognitioncontractaccounting(cont’d) • • • • • audit matter dueto thesignificantjudgementsand thelevel ofuncertainty involved. the valuation of the allowance for impairment of trade receivablesand and contractassets contractassets is thereforeincluding receivables, a trade key Group’s the of collectability The Group. the of assets of credit impaired trade receivables and contract assets respectively, they accounted for 31% of the total TheRM82,263,000GroupRM18,889,000has tradeand of receivables days90 morethan due and past The keyauditmatter other receivables, Note 10-Contract assets andNote 23.4-Financialinstruments-Credit risk. Refer to the Note 2(k)(i)-Significant accounting policy: Impairment of financial assets, Note 11-Trade and Valuation oftradereceivablesandcontractassets TO THEMEMBEROFIKHMASJAYAGROUPBERHAD INDEPENDENT AUDITORS’REPORT iii. ii. i. the following procedures: Review management’s key judgements inherent in the budgeted costs of the projects and carry out Assess thecompleteness, accuracy andrelevance ofdisclosures required by MFRS15. to profit recognition andthe key risks relating to theseamounts. Consider the adequacy of the Group’s disclosures in respect of the judgements taken with respect foreseeable losses to ascertain that these are appropriately assessed and accounted for adequately. Review management’s assessment on the exposure to liquidated and ascertained damages and/or projects. the budgeted costs to determine whether there are any costs overrun for on-going and completed Reviewcostsincurredcompareappropriatenessagainstactual costsbudgeted and the the the of relevant accounting and policies accounting the Group’s with standards. in line are inthe statements recognised financial and payables receivables related the and profit revenue, the whether Assess end judgements. yearsupport toorder in period reporting the of end the to subsequent performance Inspect contract works; and of delivery late for damages ascertained and liquidated exposureto any is there if ascertain and timelines budgeted the within contracts the deliver to ability management’s the Assess and contract costs viainspectionofcorrespondence withcustomers andsub-contractors; Test the existence and valuation of claims and variation orders both within the contract revenue ii) Key AuditMatters(cont’d) iii) • • • • • • • Our auditprocedures included, amongothers: How thematterwasaddressedinouraudit Valuation oftradereceivablesandcontractassets(cont’d) • • matters because: We identified the valuation of investments in subsidiaries and amount due from subsidiaries as key audit the amountduefrom subsidiariesmay beindoubt. the that risk Company’s the investments increased therefore in subsidiaries might exceed has their recoverableThis 2019. amounts December and the collectability of 31 at and recorded 2019 as fund shareholder’s 31 December in deficit ended a in year loss significant a reported entities group the of One impairment ofRM59,798,000. RM98,500,000.of Thefrom Companydue totalling amount subsidiaries has RM101,818,000, also of net As at 31 December 2019, the Company had investments in subsidiaries of RM98,650,000, net of impairment The keyauditmatter Note 11-Trade andotherreceivables. Refer to Note 2(a)(i)-Significant accounting policy: Subsidiaries, Note 6-Investments in subsidiaries and Valuation ofinvestmentsinsubsidiariesandamountduefromsubsidiaries-Companylevel ses h cmltns, cuay n rlvne f icoue rqie b MR 7, Instruments: Disclosures. MFRS by required disclosures of relevance and accuracy completeness, the Assess assess therecoverability ofsuchbalances. and projects the of status overdue,the revieware that retentions For contracts. original the and Test the retention balances by corroborating the retention sum amount to customer correspondence Ascertain theaccuracy ofreceivables ageing. Assess theadequacy ofECLprovided by management. Assess theappropriateness andtest mathematical accuracy ofmodelsapplied. including made, estimates selection andapplication ofthemethods,assumptions anddata inmakingtheestimates. and judgements key management’s of reasonableness the Evaluate requirements ofMFRS9, FinancialInstruments. the accordancewith in management developedby models (“ECL”)Loss Credit ReviewExpected by the managementinderivingtherecoverable amount. they required us to exercise judgement in evaluating the appropriateness of the assumptions used of theirsignificance to total assets inthe Company’s financial statements; and TO THEMEMBEROFIKHMASJAYAGROUPBERHAD INDEPENDENT AUDITORS’REPORT Financial 57 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 58 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD iii) Key AuditMatters(cont’d) whether dueto fraud orerror. preparation of financial statements of the Group and of the Company that are freeDirectorsareresponsible internalalso controlforsuch Directorsthe as necessarydetermineis fromthe to enable material misstatement, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.Standards, Reporting Financial TheMalaysian accordance with in view fair and true a give that Company the of and Group the of statements financial preparationof the for responsible are Company the of DirectorsThe Responsibilities oftheDirectorsforFinancialStatements on Standards International and Malaysia in auditing Auditing. on standards approved with accordance in actions appropriatetake and Company the of Directors the to matter the communicate torequired are we therein, When weread theremainingthe annualreport, partsof ifweconclude that therea material is misstatement nothing to report inthisregard. have we work Wefact.have that report required toare we the information, other this misstatementof material a is on there that based If, misstated. materially be wereport,concludeauditors’ this of date to the to prior weobtained that information other the on performed appears otherwise or audit, the in obtained knowledge our or Company the of and Group the of statements financial the with inconsistentmaterially is information other the whether consider so, doing in and, above identified information other the read to is connectionIn financial the of audit our with statements Group the of the of and Company, our responsibility and we donotandwillexpress any form ofassurance conclusion thereon. Our opinion on the financial statements of the Group and of the Company does not cover the other information report, which are expectedannual to bemadeavailablethe to usafter that date. of parts remaining the and report, auditors’ this of date the to prior obtained we which does not include the financial statements of the Group and of the Company and our auditors’ report thereon, but Control Internal and Management Risk on Statement and Report Directors’ the in included information The Directors of the Company are responsible for the other information. The other information comprises the Information OtherthantheFinancialStatementsandAuditors’ ReportThereon • • • • Our auditprocedures included, amongothers: How thematterwasaddressedinouraudit Valuation ofinvestmentsinsubsidiariesandamountduefromsubsidiaries-Companylevel(cont’d) TO THEMEMBEROFIKHMASJAYAGROUPBERHAD INDEPENDENT AUDITORS’REPORT of assets and MFRS7, FinancialInstruments:Disclosures. Assess the completeness, accuracy and relevance of disclosures required by MFRS 136, Impairment Assess theadequacy ofimpairmentlosses madeby management. the investments insubsidiariesandamountduefrom subsidiaries. Assess the basis and assumptions used by the management in deriving the recoverable amounts of amount duefrom subsidiaries. and subsidiaries in investments in impairment of indicators on assessment management’s Check We also: on Auditing, we exercise professional judgementandmaintainprofessional scepticism throughout theaudit. As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards statements. financial could these of they basis aggregate, the on the taken users in of decisions or economic the influence individually to expected if, be reasonably material considered are and error or fraud from arise can and Malaysia Internationalin Standards on Auditing will alwaysauditing detect a materialon misstatement when it standardsexists. approved Misstatements with accordance in conducted audit an that guarantee a not is but assurance, of level high a is assurance Reasonable opinion. our includes that report auditors’ an error,fraudor to due misstatement,materialfromissuefreeareto whether whole and a Companyas the of Group and the statements of financial objectivesreasonableassurancethe areOur obtain to whether about Auditors’ ResponsibilitiesfortheAuditofFinancialStatements realisticalternative butto doso. no have or operations, cease to or Company the or Group the the liquidate unless to intendaccounting either of Directors basis concern going the using areresponsible and as concerndisclosing, concern,going going to therelated Directors a matters as applicable, continue to the Company, Company the of of and and Group the of ability Group the assessing the for of statements financial the preparing In Responsibilities oftheDirectorsforFinancialStatements (cont’d) • • • • • • solely responsible for ourauditopinion. Weremainaudit. group the of performance and supervision direction, the forWe responsibleare business activities within the Group to express an opinion on the financial statements of the Group. or entities the of information financial the regarding evidence audit appropriate sufficient Obtain fair presentation. achievesthat manner a in events and transactions underlying the representCompany the of and Company,the of and Groupfinancial statements the the disclosures, of whether the and including Group the of statements financial the of content and structureoverall presentation, the Evaluate a goingconcern. However, future events or conditions may cause the Group or the report. Companyauditors’ our to of ceasedate tothe tocontinue up as obtained evidence audit the on based areopinion. conclusions Our our modify to statements inadequate, are financial disclosures such the if or,Company in the of disclosures and relatedGroup the the of to report auditors’ our in required attention are we draw exists, to uncertainty material a that conclude we If concern. to going Company a the of as or continue Group the of ability the on doubt significant cast may that conditions or and, based on the audit evidence obtained, whether a material uncertainty exists related to eventsaccounting of basis concern going the of use Director’s the of appropriateness the on Conclude estimates andrelated disclosures madeby theDirectors. accounting of reasonableness the and used policies accounting of appropriateness the Evaluate effectiveness ofinternal control oftheGroup andoftheCompany. that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the Obtain an understanding of internal control relevant to the audit in order to design audit procedures omissions, misrepresentations, intentional ortheoverride forgery, ofinternal control. collusion, involve may fraud as error, from resulting one for abasis than higher is fraud from to resulting provide misstatement material a appropriate detecting not and of risk sufficient The opinion. is our for that evidence audit obtain and risks, those to responsiveprocedures audit perform and error,design or fraud to due Company,whether the of Identify and assess the risks of material misstatement of the financial statements of the Group and TO THEMEMBEROFIKHMASJAYAGROUPBERHAD INDEPENDENT AUDITORS’REPORT 59 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 60 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD Date: 30June2020 Petaling Jaya, Selangor Chartered Accountants (LLP0010081-LCA &AF0758) KPMG PLT person for thecontent ofthisreport. of the Companies266 Act 2016 in Malaysia and forSection no other purpose. We do with not assume responsibilityaccordance to any other in body, a Company,as the of members the to solely made is report This Other Matter would reasonably beexpected to outweigh thepublicinterest benefitsofsuch communication. so doing of consequencesadverse the because reportauditors’ our communicatedin be not should matter most extremelyin when, rarematteror the disclosureabout precludescircumstances,public wea determinethat of were that matters those are therefore the key determineaudit matters. We describe these wematters in our auditors’ report Directors,unless law or regulation the significance in the audit with of the financial statements of communicated the Group and of the Company matters for the current year and the From may that matters other and relationships all them reasonably bethoughtto bearonourindependence, andwhere applicable, related with safeguards. communicate to and independence, regarding requirements ethical relevant with complied have we that statement a with Directors the provide also We our audit. and significant audit findings, including any significant deficiencies in internal control that weidentify during Wecommunicate Directorswith regarding, matters,other among audit scopethe planned of the timing and Auditors’ ResponsibilitiesfortheAuditofFinancialStatements (cont’d) TO THEMEMBEROFIKHMASJAYAGROUPBERHAD INDEPENDENT AUDITORS’REPORT Chartered Accountant Approval Number:03350/01/2022 J Chan KahMun The notes onpages68to 136 are anintegral partofthesefinancial statements. Total equityandliabilities Total liabilities Total currentliabilities Total non-currentliabilities Liabilities Total equity Equity Total assets Total currentassets Total non-currentassets Assets Current taxliabilities Lease liabilities Loans andborrowings Contract liabilities Trade andotherpayables Deferred taxliabilities Lease liabilities Loans andborrowings Non-controlling interest theCompany Equity attributable to owners of Reserve Share capital Assets classified asheld for sale Cash andcashequivalents Current taxassets Trade andotherreceivables Contract assets Inventories Deferred taxassets Contract assets Other investments Investments insubsidiaries Investment properties Right-of-use assets Property, plantandequipment Statement offinancialposition Note 10 10 10 14 14 15 13 13 12 11 4 9 6 8 8 5 3 7 Group (156,032) 303,243 (8,004) 30,205 191,687 6,469 260,147 26,686 223,107 286,400 22,351 27,651 330,894 330,894 RM’000 10,585 2,644 16,938 66,129 264,765 28,531 8,427 160,818 1,947 35,655 67,900 4,618 16,843 254 8,380 2,357 11,916 as at31December2019 2019 4

- - (6,237) 473,646 93,200 473,646 Restated 175,552 298,094 181,789 182,542 68,074 336,271 22,656 (753) 28,735 RM’000 137,375 270,105 185,159 336,271 173,559 27,989 37,852 119,702 2,493 4,292 12,721 5,333 14,959 1,913 226 866 - 2018 -

- - - Company (161,083) 45,502 30,604 46,445 46,445 10,599 191,687 RM’000 45,502 43,548 30,604 15,841 15,841 1,935 793 5,242 150 943 2019 12 7

------203,560 203,560 104,285 7,729 Restated 104,285 182,542 20,265 20,265 98,650 RM’000 183,295 183,295 94,816 1,280 6,968 625 3,258 99,275 10,039 460 753 2018

------61 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 62 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD The notes onpages68to 136 are anintegral partofthesefinancial statements. share(sen) Basic lossperordinary expensefortheyear Loss andtotalcomprehensive Non-controlling interest Owner ofCompany expenseattributableto: Loss andtotalcomprehensive expensefortheyear Loss andtotalcomprehensive Income tax Loss beforetax Finance costs Finance income Results fromoperatingactivities Other operating expenses contract assets financialinstruments and Net loss onimpairmentof Administrative expenses Other income Gross (loss)/profit Cost ofsales Revenue for theyearended31December2019 other comprehensiveincome Statement ofprofitorlossand Note 20 19 16 18 21 17 Group (264,668) (159,546) (159,546) (155,468) 199,536 (157,779) (143,256) (13,485) (65,132) (12,525) (64,482) (27.97) (13,128) RM’000 12,368 (1,767) (4,078) 916 2019 (303,501) (32,607) (36,226) (23,837) (10,428) (28,961) (32,607) (5.33) 308,193 (3,646) (13,512) (15,126) RM’000 4,692 (5,123) 2,148 1,123 3,619 2018 Company (99,850) (161,836) (161,836) (161,836) (161,836) (7,523) (161,521) (2,411) (59,798) RM’000 439 99 7,962 (450) 135 2019 - - (14,623) (1,413) RM’000 15,087 123 (1,147) (1,147) 464 (1,075) (1,147) (826) (491) 242 2018 (72) - - - Attributable to owners of the Company Non-distributable Retained earnings/ Non Share Merger Equity (Accumulated controlling Total Statement ofchangesinequity capital deficit reserve losses) Total interest equity Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 At 1 January 2018 173,992 (68,500) - 96,708 202,200 (2,591) 199,609 Contributions by and distributions to owners of the Company - Shares issued during the financial

year 8,550 - - - 8,550 - 8,550 for theyearended31December2019 Total transactions with owners of the Company 8,550 - - - 8,550 - 8,550 Loss and total comprehensive expense for the year - - - (28,961) (28,961) (3,646) (32,607) At 31 December 2018 182,542 (68,500) - 67,747 181,789 (6,237) 175,552 Contributions by and distributions to owners of the Company Waiver of debts - - 2,500 - 2,500 - 2,500 Shares issued during the financial year 9,145 - - - 9,145 - 9,145 Total transactions with owners of the Company 9,145 - 2,500 - 11,645 - 11,645 Loss and total comprehensive expense for the year - - - (157,779) (157,779) (1,767) (159,546) At 31 December 2019 191,687 (68,500) 2,500 (90,032) 35,655 (8,004) 27,651 Note 13.1 Note 13.2 Note 13.3

The notes on pages 68 to 136 are an integral part of these financial statements. 63 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 64 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD The notes onpages68to 136 are anintegral partofthesefinancial statements. At 31December2019 Loss andtotal comprehensive expense for theyear Total transactionswithownersoftheCompany Shares issued duringthefinancial year ownersoftheCompany Contributions byanddistributionsto At 31December2018 Loss andtotal comprehensive expense for theyear Total transactionswithownersoftheCompany Shares issued duringthefinancial year ownersoftheCompany Contributions byanddistributionsto At 1January2018 Company for theyearended31December2019 Statement ofchangesinequity 182,542 8,550 173,992 Note 13.1 191,687 RM’000 8,550 9,145 9,145 capital Share - - Non-distributable (Accumulated (161,836) earnings/ Retained (161,083) (1,147) RM’000 1,900 losses) 753 - - - - (161,836) 30,604 RM’000 8,550 183,295 175,892 8,550 (1,147) 9,145 9,145 equity Total activities Net cashfrom/(usedin)operating Impairment losses on: off Property, plantandequipmentwritten Loss ondisposalofotherinvestment properties ondisposalofinvestmentGain Loss ondisposalofright-of-use assets equipment ondisposalofproperty,Gain plantand Depreciation ofinvestment properties Depreciation ofright-of-useassets equipment Depreciation ofproperty, plantand Adjustments for: Loss before tax Cash flowsfromoperatingactivities Interest paid Tax refund Tax paid operations Cash generatedfrom/(usedin) Contract liabilities Contract assets Trade andotherpayables Trade andotherreceivables Inventories changesinworkingcapital Operating (loss)/profitbefore Finance costs Finance income Write down ofinventories Inventories written off Contract costs written off Bad debtswritten off Deposits written off - otherreceivables - trade receivables - investment properties - property, plantandequipment - investment inasubsidiary - amountduefrom asubsidiary - amountduefrom arelated company - contract assets Statement ofcashflows for theyearended31December2019 Note 18 17 4 3 5 3 Group (8,309) (53,641) (2,344) 24,383 (10,440) (155,468) (6,262) 1,648 70,538 RM’000 49,149 2,590 69,188 1,212 (916) (170) 291 13,128 62 6,526 8,593 9,724 (5) 17,717 5,229 782 2,722 7,392 236 2019 ------(10,654) (16,576) 39,442 50,505 (6,984) Restated (36,226) (533) 42,999 8,868 21,077 RM’000 (1,416) 43,115 (1,123) 3 15,905 13,512 400 1,060 450 (990) 14,959 745 11 621 2018 37 113 50 248 ------Company (10,032) (8,530) (3,223) (10,029) (161,836) 59,798 RM’000 (694) (135) (450) 98,500 450 453 1,855 2019 560 ------(14,080) (2,917) (8,928) Restated (7,924) (826) (140) RM’000 (491) (1,075) (242) (524) 10,039 491 2018 11 ------65 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 66 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD Statement ofcashflowsfortheyearended31December2019(cont’d) Total cashoutflows forleases Payment of leaseliabilities activities Included innetcashfrom financing liabilities Interest paidinrelation to lease assets Payment relating to leasesoflow-value leases Payment relating to short-term activities Included innetcashfromoperating Cash outflowsforleasesasalessee 31December Cash andcashequivalentsat 1January Cash andcashequivalentsat cashequivalents Net increase/(decrease)incashand Cash flowsfromfinancingactivities Cash flowsfrominvestingactivities activities Net cash(usedin)/fromfinancing Interest paid deposits Decrease/(Increase) inpledgedfixed Repayment ofleaseliabilities Proceeds from issuance ofshares borrowings Repayment ofloansandother andtrust receipts Repayment ofbankers’ acceptances Net cashfrominvestingactivities Interest received properties Proceeds from disposalofinvestment useassets Proceeds from disposalofright-of- plantandequipment Proceeds from disposalofproperty, investment Proceeds from disposalofother equipment Acquisition ofproperty, plantand for theyearended31December2019 Statement ofcashflows Note (ii) (ii) 20 20 (i) 18 Group (35,260) (4,433) (14,850) (10,359) (22,598) (3,526) RM’000 12,662 (15,161) 9,145 3,785 10,106 (108) 14,850 16,953 8,862 916 1,617 3,736 1,540 2019 489 160 74 (15,049) (35,260) (6,528) (13,036) (53,018) Restated (18,253) (27,138) (8,702) (8,122) RM’000 2,007 8,550 (1,233) 1,123 1,897 2018 ------Company (6,939) RM’000 16,845 7,700 6,951 9,145 135 12 2019 135 ------(6,939) Restated (6,610) (329) RM’000 8,550 8,357 (193) 242 242 2018 ------

(ii) (i) Statement ofcashflowsfortheyearended31December2019(cont’d) The notes onpages68to 136are anintegral partofthese financial statements of financialpositionamounts: flows following cash the statementsstatementsof comprise the in equivalentsincluded cash and Cash Cash andcashequivalents amount remains payable to the vendor at the end of the reporting period is RM nil (2018: RM1,232,000). (2018: RM12,256,000), of which RM nil (2018: RM9,791,000) were acquired by During means the of year,finance leases.the GroupThe acquired property, plant and equipment with an aggregate cost of RM108,000 Acquisition ofproperty,plantandequipment Bank overdrafts Cash andbankbalances Less: Pledgeddeposits Fixed deposits with licensed banks for theyearended31December2019 Note 14 12 12 Group Statement ofcashflows (22,598) (23,138) 27,991 (27,991) RM’000 540 2019 - (35,260) (36,853) 36,853 (36,259) RM’000 999 2018 - Company RM’000 12 2019 - 12 - - - (6,939) (6,968) 7,700 (7,700) RM’000 29 2018 - 67 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 68 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 1. These financial statements were authorised for issue by theBoard ofDirectors on30June2020. a company incorporated inMalaysia. The immediate and ultimate holding company during the financial year was Ikhmas Jaya Holdings Sdn. Bhd., The works. foundation and piling activities, holding investmentprincipal activitiesofthesubsidiariesare asstated inNote 6to thefinancial statements. in engaged principally is Company The to as“Group entities”). 2019 comprise the Company and its December subsidiaries 31 (together ended referred year financial to the as for the and “Group” at and as individually Company referred the of statements financial consolidated The of place principal the of addresses The business andregistered Berhad. office ofthe Company are as follows: Securities Malaysia Bursa of Market Main the on listed is Malaysiacompany,and in liability limiteddomiciled incorporatedpublic and a is Berhad JayaGroup lkhmas Selangor, Malaysia 47301 Petaling Jaya Ara Jaya, PJU 1A Pusat DaganganNZX Jalan PJU 1A/41B No. 35, 37 &39 Principal placeofbusiness (a) Basis ofpreparation

financial statements Notes tothe • • • January 2020 MFRSs, interpretationsandamendmentseffectiveforannualperiodsbeginningonorafter1 by theGroup andtheCompany: adopted been havenot but (“MASB”) BoardAccountingMalaysianStandards the by issued been havethat MFRSs the of amendments accountingstandards,interpretationsfollowingareand The and therequirements oftheCompanies Act 2016 inMalaysia. Standards Reporting Financial International (“MFRSs”), Standards Reporting Financial Malaysian The financial statements of the Group and of the Company have been prepared in accordance with Statement ofcompliance • June 2020 MFRSs, interpretationsandamendmentseffective forannualperiodsbeginningonorafter1 • beginning onorafter1January 2023;MASBhasyettoannouncethechange of date) 1 January2021(IASBhas deferredtheeffectivedateofIFRS17toannual reportingperiods MFRSs, interpretationsand amendmentseffectiveforannualperiodsbeginning onorafter Reform and Measurement and Amendments to MFRS 9, Policies, ChangesinAccountingEstimatesandErrors –Definition ofMaterial 101, MFRS to Amendments Amendments to MFRS 3,BusinessCombinations–Definitionofa Amendments to MFRS 16,Leases–Covid-19-RelatedRentConcessions MFRS 17, InsuranceContracts , Financial Instruments: Disclosures –Interest Rate Benchmark Rate –Interest Disclosures Instruments: Financial 7, MFRS Financial Instruments, Presentation of Financial Statements and Statements Financial of Presentation Selangor, Malaysia 47301 Petaling Jaya No. 3,JalanSS17/9, Kelana Jaya Kelana Centre Point Unit 621,6thFloor, Block A Registered office MFRS 139 , Financial Instruments: Recognition , Accounting 108, MFRS 1. (a) Basis ofpreparation(cont’d)

(b) • • • • • • • • January 2022 MFRSs, interpretations and amendments effective for annualperiodsbeginning on orafter 1 Statement ofcompliance(cont’d) • date yettobeconfirmed MFRSs, interpretationsandamendmentseffectiveforannualperiodsbeginningonoraftera • • standards, accounting abovementioned • the apply to plan Company the interpretations andamendments,where applicable: and Group The Note 2andontheassumption that theGroup andtheCompany are goingconcerns. The financial statements have been prepared on the historical cost basis other than as disclosed in Basis ofmeasurement the Group andtheCompany. to have any material financial impacts to the current period and prior period financial statements of The initial application of the accounting standards, interpretations or amendments are not expected Company. for annual periods beginning on or after 1 January 2021 as it is not applicable to the Group and the 17,MFRS apply to plan not do Company the and Group The Contracts-Cost ofFulfillingaContract Amendments to MFRS 137, Amendments to MFRS116,Property,PlantandEquipment–ProceedsbeforeIntendedUse Amendments to MFRS3,BusinessCombinations–ReferencetotheConceptualFramework 2020) 141, MFRS to Amendments to MFRSStandards2018–2020) Amendments to Illustrative Examples accompanying MFRS 16, 2018 –2020) 9, MFRS to Amendments (Annual ImprovementstoMFRSStandards2018–2020) 1, MFRS to Amendments as CurrentorNon-current 101, MFRS to Amendments Amendments to MFRS 10, MFRS to Amendments Associate orJointVenture its and Investor an between Assets of Contribution or Sale – Ventures Joint and Associates for annualperiods beginningonorafter 1January2022. from the annual period beginning on 1 January 2022 for those amendments that are effective annual periodsbeginningonorafter 1June2020; and for effective is that amendment the for 2021 January 1 on beginning period annual the from for annualperiods beginningonorafter 1January2020; from the annual period beginning on 1 January 2020 for those amendments that are effective Financial Instruments (Annual Improvements to MFRS Standards MFRS to Improvements (Annual Instruments Financial is-ie dpin f aasa Fnnil eotn Standards Reporting Financial Malaysian of Adoption First-time Provisions, Contingent Liabilities and Contingent Assets – Onerous Consolidated Financial Statements and Statements Financial Consolidated Presentation of Financial Statements – Classification of Liabilities of Classification – Statements Financial of Presentation giutr (nul mrvmns o FS tnad 21 – 2018 Standards MFRS to Improvements (Annual Agriculture financial statements that is effective is that Contracts Insurance Notes tothe Leases (Annual Improvements Investments in Investments 128, MFRS 69 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 70 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 1. (c) (b) Basis ofpreparation(cont’d) financial statements Notes tothe functional currency. All financial information is presented in RM and has been rounded tothe rounded been has and RM in nearest thousand,unlessis otherwisestated. the Company’s is presented which information financial (“RM”), All currency. Malaysia functional in Ringgit presented are statements financial These Functional andpresentationcurrency and additionalamountsofliabilitiesthat may benecessary. adjustments may require relatingto recoverabilitythe the Company classificationand of recorded asset and amounts classification the to and Group the of business. statements of course financial normal Accordingly, the the in liabilities their discharge and assets their realise to unable be successful, not are mayCompany initiatives are the and Group the forthcoming, not creditorsare funding and bankers of support that and the statements that event financial the In basis. the concern accordingly, going a successfully, on prepared implemented be will initiatives raising fund- aforesaid the that believe Directors the statements, financial these of approvaldate the At convertible securitiesto improve itsfinancialpositionandcashflows. and sharesordinarynew of issuanceinclude,would others, amongst initiativesfund-raisingwhich other finalising processof the in also is Group the placement,private aforesaid the to addition In proposed private placement issubjectto theapproval from relevant authoritiesandshareholders. which somecashproceeds received by theCompany inJune2020 (see Note 29.5 for details), the proposed private placement the and subscription for agreements identified have been been havesigned investors with these the investorsAlthough in announced. and proposed was million RM13 approximatelyof cash raise to seeking Company the of capital paid-up existing the of 39.46% to up of placementprivate a 2020, June 25 On initiatives.fund-raising proposed the of viability the In considering the appropriateness of the going concern assumption, the Directors have considered to meetitsobligations asandwhenthey fall due. Groupthe toenable creditorsbankersfromas and operationsits continuingwellsupport so as as ordertogeneratein inflows, positiveflows new cash attaining cash projects securing and its from shareholders’ and relevant authorities approvals, obtaining the disposal of upon identified assetsCompany within the Group the by undertaken implementation be will successful that initiatives the fund-raising proposed on the of dependent highly is preparation of basis concern going The their meet to Company the and obligations asandwhentheyGroup fall dueandto continue asgoing concerns. the of ability the on uncertainty material a indicate is conditions there These that million. RM21.6 by assets current its exceeded Group the of liabilities RM161.8 and million RM159.5 of taxation million respectively afterfor the financial year ended 31 December loss 2019 and, as of that date, the current net a incurred Company the and Group The Note 2andontheassumption that theGroup andtheCompany are goingconcerns. The financial statements have been prepared on the historical cost basis other than as disclosed in Basis ofmeasurement(cont’d) 1. (d) Basis ofpreparation(cont’d) • • • in thefinancial recognised the amounts on inapplying effect judgements statements otherthanthosedisclosedinthefollowing notes: significant andcritical have that uncertainty of policies estimation accounting areas significant no are There affected. estimates are recognised in the period in which the estimates are revised and in any future periods areassumptionsreviewed Estimatesunderlying and Revisions basis. toaccountingongoing an on these estimates. and the reported policies amounts of accountingassets, liabilities, incomeof and expenses.application Actual resultsthe may differaffect from that assumptions and estimates to judgements, make management requires MFRSs with conformity in statements financial the of preparation The Use ofestimatesandjudgements the reporting period. of end the at as estimates forwardlooking as well as conditions marketexperience,existing past Group’s the on based model, impairment the to these inputs the making selecting in and judgement assumptions uses Group The rates. loss expected and default of risk about assumptions the on based receivablesaretrade and assetscontract allowancesfor loss The and tradereceivables assets contract for allowances (“ECL”) loss credit expected of Measurement - 11 and 10 Note and involves significantjudgementsandassumptions. recoverable The an 6. sell to cost Note less value fair is on based weredetermined in subsidiaries investmentsin of thereamounts disclosed are when amounts subsidiaries carrying The in impairment. investments of of indication impairment the assesses Company The Note 6-Investmentsinsubsidiaries term, security, value oreconomic environment oftherespective leases. rates before using significant judgement to determine the adjustments required to borrowing reflect the available closest the determine first entities Group leases. respective the of rate The Group also applied judgement and assumptions in determining the incremental borrowing lease term. the determine them help totaken, not extendis to option an if asset the change toincurred be will that cost any and practice past their including circumstances and facts all consider entities Group options. extensionexerciseto the certain reasonably is it whether judgement significant byapplying commencement provideat lease to assesses leases Group new The flexibility. in operational options extension include to seeks period. Group contract only the the of applicable, options end Where the before extension years 2 contain of period accommodations a to up staffs’ Group the and by exercisable offices site of leases Some Note 4-Extensionoptionsandincrementalborrowingrateinrelationtoleases financial statements Notes tothe 71 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 72 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 1. 2. (d) Basis ofpreparation(cont’d) (a) statements. The impactsarisingfrom thechangesare disclosedinNote 30. financial previous in applied those to compared as entities Group the by into entered contracts lease 16, MFRS of adoption the from Arising financial statements andhave beenapplied consistently by Group entities,unless otherwise stated. The accounting policies set out below have been applied consistently to the periods presented in these Significant accountingpolicies financial statements Notes tothe • Use ofestimatesandjudgements(cont’d) (ii) (i) Basis ofconsolidation external economic factors. In making the judgement, the Group and the Company evaluate based on past experience and costs, and the variable considerations: Liquidated and Ascertained Damages (“LAD”) charges. performanceof extentobligations,the coststhe of incurred, estimatedthe total revenue and progress the towards determining satisfaction complete in required is judgement Significant the estimated total costs for theconstruction contract. measuredbydatetoreferencetoworkcostsperformedis incurred for actual method the to their construction contract activities in the profit or loss by using the input method. The input from arising customers revenuewith contractsrecogniseCompanyfrom the and Group The Note 16-Revenuefromcontractswithcustomers date, whichisthedate onwhichcontrol istransferred to theGroup. acquisition the from method acquisition the using for accountedare combinations Business Business combinations sale or for held as classified is investment distribution. The cost of investments the includestransaction costs. unless losses, impairment any less cost at position financial of statement Company’s the in measured are subsidiaries in Investments of theinvestee that significantlyaffect theinvestee’s return. despite not having the majority of voting rights, it has such the current when ability to direct only the activities control assessingrights are substantive. The Group also considers when it has de facto power over considered an investee when, are rights voting Potential entity. the its from returns variableinvolvement toability the affecthas returns and those entity the with tothrough power its over rights, has or exposed, is it when entity an controls Group The that control commences untilthedate that control ceases. statements of subsidiaries are included in the consolidated financial statements from the date Subsidiaries are entities, including structured entities, controlled by the Company. The financial Subsidiaries there are changes to the accounting policies applied to applied policies accounting the to changes arethere Leases, 2. (a) Significant accountingpolicies(cont’d) (ii) Basis ofconsolidation(cont’d) (v) (iv) (iii) • • • • For new acquisitions, theGroup measures thecost ofgoodwillat theacquisition date as: Business combinations(cont’d) joint operation. transactions, and liabilities assets, the of investors,other the relationtothe in with incurredjointly or held sharethose shareof its including its of each for account Company the and Group The arrangement. an to relating liabilities the for obligations and has assets the Company to the rights or Group the when operation” “joint as classified is arrangement joint A significantly that affect thearrangements’ returns. activities the about decisions for consent unanimous requiring contractsby established control, joint has Group the which of arrangements are arrangements Joint Joint arrangements as afinancialasset dependingonthelevel ofinfluence retained. Subsequently,controllost.dateaccountedthat is equity accountedinvestee an is as forit or Group the If loss. or profit retains in any interest recognised in the former subsidiary, is control then such interest of is measured at fair loss value at the the on arising deficit or surplus Any position. financial of statement consolidated the from subsidiary former the to related equity of components other liabilities the and and interests non-controlling assets anysubsidiary, former the the derecognises of Group the subsidiary, a of control of loss the Upon Loss ofcontrol and any consideration received orpaid,isadjusted to oragainst Group reserves. holders. Any difference between the Group’s share of net assets before and after the change, non-controllinginterestits Groupand transactionsbetweenthe equity control as of loss a in The Group accounts for allchangesinitsownership interest inasubsidiarythat donotresult Acquisitions ofnon-controllinginterests the Group incursinconnection withabusiness combination are expensed asincurred. Transaction costs, other than those associated with the issue of debt or equity securities, that acquiree’s the identifiable netassets at theacquisition date. of share proportionate the at or value fair at either acquiree non-controlling the the in interests measures it whether elects Group the combination, business each For loss. or profit in immediatelyrecognised is gain purchase bargain a negative,excess is the When liabilities assumed. and acquired assets identifiable the value)(generallyfairof recognisedamount net the equity existing interest intheacquiree;the less of value fair the stages, in achieved is combination business the if the recognised amountofany non-controlling interests intheacquiree; plus the fair value oftheconsideration transferred; plus financial statements Notes tothe 73 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 74 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 2. (a) Significant accountingpolicies(cont’d) (b) financial statements Notes tothe (viii) (vii) (vi) Basis ofconsolidation(cont’d) which are recognised inothercomprehensive income. hedge, flow cash a as designated instrument financial a or comprehensiveincome other through differences for arising except on the retranslation loss, of equity instruments or where theyprofit are measured in at fair valuerecognised are retranslation on arising differences currency Foreign to thefunctionalcurrency at theexchange rate at thedate that thefair value was determined. end of the reporting period, except for those that are measured at fair value which are retranslated the retranslatedat not are currenciesforeign in denominated liabilities and assets Non-monetary are retranslated to thefunctionalcurrency at theexchange rate at that date. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period the of currencies functional Group entitiesat exchange respective rates at thedates ofthetransactions. the to translated are currencies foreign in Transactions Foreign currencytransactions Foreign currency intra-group transactions, are eliminated inpreparing theconsolidated financial statements. Intra-grouptransactions,anybalancesunrealisedand expensesand incomefrom and arising Transactions eliminatedonconsolidation acquired entitiesare addedto thesamecomponents withinGroup equity. the of differences).equity against debit of componentsof other Thecase reserve the suitable anyin adjusted (or reserve merger to taken are acquired shares the of value nominal the and acquisition of cost the betweendifferences The restatement. without amounts carrying and assets The parties applied. is acquiredliabilities are consolidatedrecognised their the statements same respectivefinancial at in accounting value the book by combination, the controlled after are and before entities both combining the where restructuring a During Restructuring amongcommonshareholders deficit balance. a have to interests non-controlling the causes so doing if evennon- interests the controlling to allocated are subsidiary a in interests non-controlling the to applicable Losses for theyear between non-controlling interests andowners oftheCompany. comprehensive income as an allocation of the profit or loss and other comprehensive income the results of the Group is presented in the consolidated statement of profit or loss and other separately from equity attributable to the owners of the Company. Non-controlling interests in consolidated statement of financial position and statement of changes in equity within equity, Company,the the in presentedareof holders equity the to indirectly or directly attributable Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not Non-controlling interests 2. (c) Significant accountingpolicies(cont’d) (ii) (i) Financial instruments (b) (a) on thefirst day ofthefirst reportingperiod following thechangeofbusiness model. model for managing financial assets in which case all affected financial assets are reclassified subsequent to their initial recognition unless the Groupreclassified or the Company changes its business not are and recognition initial on determined are assets financial of Categories Financial assets Financial instrumentcategoriesandsubsequentmeasurement applicable to thenature ofthehost contract. derivativerecognisedembedded separately,is an accordanceaccountedpolicy in foris with event the in contract, host The loss. or profit throughvalue fair at measured not is contract not closely related to the economic characteristics and risks of the host contract and the host host the where derivative is if, the only separately if, and accounted contractfor and asset, financial a not host contractis the from separately recognised is derivative embedded An at thetransaction price. or to its acquisition measured initially is component financing significant a receivablewithout attributable trade A issuance. are directly that costs transaction loss, or profit through measured initially is liability financial a at fair item minus, an or for plus not at value fair value or component) financing significant without receivable trade a is it (unless asset financial A the instrument. contractualprovisionsthe of to party a becomesCompany the or Group the when, only and A financial asset or a financial liability is recognised in the statement of financial position when, Recognition andinitialmeasurement so eliminates or the significantly reduces an meets accounting mismatch otherwise that would otherwise that arise. asset requirements financial to a be designatemeasured irrevocablyat or amortised may Group cost Company the as recognition, the at initial fair On value instrument). through hedging profit effective thatis orderivative and loss for a designated ifa doing (except assets financial derivative includes This loss. or profit through value fair at measured are cost amortised at measured not assets financial All Fair valuethroughprofitorloss interest rate isappliedto theamortised cost. amount except for credit impaired financial assets (see Note 2(k)(i))carrying where the effectivegross the to rate interest effective applying by recognised is income Interest is on derecognition loss or recognised inprofit orloss. gain Any loss. or profit in recognised losses are impairment and and gains exchange foreign income, Interest losses. impairment by reduced is aremeasured at costamortised effectivethe using interest Themethod. costamortised assets financial these recognition, initial to Subsequent loss. or profit throughvalue fair are assets designatedTheoutstanding. as financial not interest amount principal the on terms give rise on specified contractual dates to its cash flows and thatflows are solely cash payments ofcontractual principal and collect to assets hold to is objective whose Amortised cost category comprises financial assets that are held within a business model Amortised cost financial statements Notes tothe 75 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 76 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 2. (c) Significant accountingpolicies(cont’d) financial statements Notes tothe (ii) Financial instruments(cont’d) (iii) (iv) (b) Financial assets(cont’d) Financial instrumentcategoriesandsubsequentmeasurement(cont’d) • • are they Subsequently, value. fair at measured measured at higherof: initially are issued guarantees Financial when dueinaccordance withtheoriginalormodified terms ofadebt instrument. make payment debtor to fails specified a because incurs it loss a for holder reimbursethe to A financial guarantee contract is a contract that requires the issuer to make specified payments Financial guaranteecontracts gains orlosses on derecognition are alsorecognised inprofit orloss. Any loss. or profit in recognisedare losses and exchangeforeigngains and Interestexpense measured at amortisedcost usingtheeffective interest method. categorised through loss as fair subsequently profit not value or are liabilities financial Other Amortised cost The categories offinancialliabilities at initial recognition are as follows: Financial liabilities to impairmentassessment (see Note 2(k)(i)). subject loss are or profit through value fair at measured assets, except those financial for All new asset obtained less any new liabilityassumed) isrecognised inprofit orloss. any (including consideration received of sum the and asset financial the of amount carrying transferred to are another asset party.financial the On of derecognition ownership of of a rewardsfinancial and asset, therisks differencethe betweenof the all substantially or retained flows cash asset financial fromthe expire the not or are is transferred,asset the or control of to rights contractual the when only and when, derecognised is it of part or asset financial A Derecognition Liabilities arisingfrom financialguarantees are presented together withotherprovisions. t hi fi vle Nt an o lse, nldn ay neet r iied noe are income, dividend or interest recognised inprofit orloss. any including losses, or gains Net value. fair their at Financial assets categorised as fair value through profit or loss are subsequently measured Fair valuethroughprofitorloss(cont’d) eonsd n codne o h picpe o MR 1, eeu fo Cnrcs with Customers. Contracts from Revenue 15, MFRS of principles the to accordance in recognised the amount initially recognised less, when appropriate, the cumulative amount of income the amountofloss allowance; and 2. (c) Significant accountingpolicies(cont’d) (d) (iv) Financial instruments(cont’d) (iii) (ii) (i) Property, plantandequipment including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. liability transferredfinancial or the extinguished the consideration and party paid, another to value.derecognitionOn liability,financial a of difference the between of amount carrying the aresubstantially liability modified of the flows modified isdifferent, on terms new based recognisedcase,a liability which atfinancial in fair cash the and modified are terms its derecognisedwhen also is liability financial A expires. or cancelled discharged, is contract the in A financial liability or a part of it is derecognised when, and only when, the obligation specified Derecognition (cont’d) remainder ofthat asset, then that component isdepreciated separately. the fromdifferent is that life useful a has component a if and assessed, are assets individual Depreciation is based on the cost of an asset less its residual value. Significant components of Depreciation loss asincurred. costs of the day-to-day servicing of property, plant and equipment are recognised in profit or reliably. The carrying amount of the replaced component is derecognised to profit or measured loss. be can The cost Company, its the and or Group the to flow will component the within in the carrying amount of the item if it is probable that the future economic benefits embodied The cost of replacing a component of an item of property, plant and equipment is recognised Subsequent costs expenses” operating “other and income” “other respectively and inprofit orloss. within plant property, net of recognised amount is carrying and the equipment with disposal from proceeds the by comparing determined is equipment and property,plant of item an of disposal on loss or gain The equipment. and plant property, of components) different useful (major itemshave separate as for andequipment accounted are plant they lives, of property, an item of parts significant When as partofthat equipment. Purchased software that is integral to the functionality of the related equipment is capitalised labour. arelocated.directcostmaterialsThecost self-constructedand the of of includes also assets use, and the costs of dismantling and removing the items and restoring the site on which they any other costs directly attributable to bringing the asset to working condition for its and assetintended the of acquisition the to attributable directlyare expenditures that includes Cost and any accumulated impairmentlosses. Items of property, plant and equipment are measured at cost less any accumulated depreciation Recognition andmeasurement financial statements Notes tothe 77 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 78 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 2. (d) Significant accountingpolicies(cont’d) (e) financial statements Notes tothe (iii) Property, plantandequipment(cont’d)

(i) Current financialyear not related has and Leases 117, 2018 MFRS under for reportedinterpretations. previously presented as presented, information is it comparative i.e. – the restated Accordingly,been 2019). January 1 (i.e. expedients, with effect of initially applying this standard recognised at the date of initial application practical retrospective with modified approach the using Leases 16, MFRS applied has GroupThe Leases

• • The estimated usefullives for thecurrent andcomparative periodsare asfollows: construction are notdepreciated untiltheassets are ready for theirintended use. end of the lease term. Freehold land is not depreciated. Property,the plant and byequipment under ownership obtain will Group the that certain reasonably is it unless lives useful their and term lease the of shorter the overdepreciated are assets Leased use. for available are lives of each component of an item of property, plant and equipment from the date that they useful estimated the over basis straight-line a on loss or profit in recognised is Depreciation Depreciation (cont’d) • • period, andadjusted asappropriate. Depreciation methods, useful lives and residual values are reviewed at the end of the reporting • • • conveys therightto control theuseofanidentifiedasset, theGroup assesses an whether: of use the control to right a conveysidentified contract asset the for a if period of lease time a in contains,exchange for or consideration. is, contract ToA assess whether a contract Definition ofalease the leaseand non-leasecomponents asasingle leasecomponent. accountforinstead will and componentsseparate tonon-lease not elected has it lessee, a is the on basis of their relativecomponent stand-alone prices. However,non-lease and for leases lease of properties in which the each Group to contract the in consideration the allocates Group the component, lease a contains that contract a of reassessment on or inception At Motor vehicles Buildings Furniture, fittingsandequipment Machinery andequipment of the asset if either the customer has the right to operate the asset; or the customerdesigned the the asset or in a asset; way the that operatepredetermines to how right and forthe what has purpose customerit will the be used. either if asset the of predetermined,assetis the used purpose is customerthe toright the has direct use the what purpose the asset is used. In rare cases where the decision about how and for what for and how relevantchanging right tomost are that this rights decision-making the has has it customer when The asset. the of use the direct to right the has customer the of theasset throughout theperiodofuse;and from use benefits economic the of all substantially obtain to right the customerhas the asset isnotidentified; of a physically distinct asset. If the supplier has a substantive substitution right, then the capacity the of representall substantiallyor physicallydistinct implicitly, be should and or explicitly specified be may this – asset identified an of use involvescontractthe the 5-10 years 5-8 years 50 years 10 years 2. (e) Significant accountingpolicies(cont’d) (ii) Current financialyear(cont’d) Leases (cont’d) (a) Recognition andinitialmeasurement (b) • • • • • Lease payments included in the measurement of the lease liability comprise the following: rate asthediscount rate. entities’ Group respective the incremental borrowing determined, rate. readily Generally, be the cannot Group rateentities use that their incremental if or,borrowing lease the in implicit rateinterest the using discounted date, commencement the at paid not are that payments lease the of value present the at measured initially is liability lease The on whichitislocated, less any leaseincentives received. dismantle andremove theunderlyingasset orto restore theunderlyingasset orthesite to costs the of estimate before an and or incurred costs at direct initial made any plus paymentsdate, commencement lease any initial for adjusted the liability comprises lease which the cost, of amount at measured initially is asset right-of-use The date. The Group recognises a right-of-use asset and a lease liability at the lease commencement As alessee to allocate theconsideration inthecontract based onthestand-alone sellingprices. If an arrangement contains lease and non-lease components, the Group applies MFRS 15 the of ownership to operating lease. incidental rewards an is it then not, if and lease; finance a is lease the then case, risks the is this If asset. underlying the of lease all the whether substantially of assessment transfers overall an makes Group the lease, each classify To finance leaseoran operating lease. When the Group acts as a lessor, it determines at lease inception whether each lease is a As alessor a straight-line basisover the leaseterm. The Group recognises the lease payments associated with these leases as low-valueassets. an expenseof leases on and less or months 12 of term lease a have that leases term The Group has elected not to recognise right-of-use assets and lease liabilities for short- profit orloss intheperiodwhichperformance oruseoccurs. of the underlying asset from the lease liability. Instead, these payments are recognised in The Group excludes variable leasepayments that linked to future performance orusage to terminate early. penalties for early termination of a lease unless the Group is reasonably certain not exercise; and to certainreasonably is Group the that option purchaseexercise a the under price amounts expected to bepayable underaresidual value guarantee; any incentives the index orrate asat thecommencement date; less variable lease payments that depend on an index or a fixedrate, payments initially measured using in-substance receivable; including payments, fixed financial statements Notes tothe 79 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 80 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 2. (e) Significant accountingpolicies(cont’d)

financial statements Notes tothe (ii) Current financialyear(cont’d) Leases (cont’d) (iii) (i) As alessee Previous financialyear (b) Recognition andinitialmeasurement(cont’d) (b) (a) Subsequent measurement in accordance withtheaccounting policy applicableto that asset. accountedwasforasset recognition, the initial to Subsequent payments. lease minimum the asset was measured at an amount equal to the lower leased of its fair value and the present value the of recognition, initial Upon leases. finance as classified were ownership of rewards and risks the all substantially assumed Company the or Group the which of terms in Leases Finance lease asset. If a head lease is a short-term lease to which the Group applies the exemption the applies Groupdescribed above, thenitclassifies thesubleaseasanoperatingthe lease. which to lease short-term a is lease head a If asset. to the right-of-use asset arising from the head lease, not with reference to the underlying reference with sublease a of classification lease separately.the assessessublease It the When the Group is an intermediate lessor, it accounts for its interests in the head lease and As alessor(cont’d) straight-line basisover the leaseterm aspartof“revenue”. a on income as leases operating receivedunder payments lease recognises Group The As alessor the amount oftheright-of-useasset hasbeenreduced to zero. to made is adjustment carrying the if loss or profit recorded correspondingin is or asset, right-of-use the of amount a carrying remeasured, is liability lease the When a exercise will it purchase, whether extension ortermination option. of assessment its changes Group the if or guarantee, value a change in the Group’s estimate of the amount expected to be payable under a residual is there if or payments, fixedin-substance lease revision of a is thererate, indexif or an remeasuredis futurepaymentsin in fromlease change therechange arising a when a is It method. interesteffective the using cost amortised at measured is liability lease The certain remeasurements oftheleaseliability. for any,adjusted if and losses, impairment byreduced periodically is asset right-of-use determined on the same basis as those of property, plant and equipment. In are assetsaddition, right-of-use the of lives useful estimated The term. lease the of end the or asset right-of-use the of life useful the of end the of earlier the to date commencement the from method straight-line the using depreciated subsequently is asset right-of-use The As alessee 2. (e) Significant accountingpolicies(cont’d) (g) (f) (ii) (i) As alessee(cont’d) Previous financialyear(cont’d) Leases (cont’d) estimated costs ofcompletion and theestimated costs necessary to make thesale. the less business, of course ordinary the in price selling net estimated the is value realisable Net operating capacity.normal on based overheads production of share appropriate an includes cost goods, bringing them to their existing location and condition. in In the incurred case costsof work-in-progressother and and finished costsconversion or productioninventories, the acquiring in incurred The cost of inventories is calculated using the weighted average method, and includes expenditure Inventories are measured at thelower ofcost andnetrealisable value. Inventories property, plantandequipment. purposes. to administrativesimilarly for for accounted are or cost at servicesmeasured subsequently or and initially goods properties Investment of supply of or course production ordinary the the in in sale use for business, not but both, for or appreciation capital for or income rental earn to interest leasehold a under held or owned are which properties are propertiesInvestment Investment propertiescarriedatcost Investment properties Leasehold land which in substance was an operating lease was classified as prepaid lease prepaid as payments. classified was lease operating an was substance in which land Leasehold charged to profit orloss inthe reporting periodinwhichthey were incurred. an integral part of the total lease expense, over the term of the lease. Contingent rentals were straight-line basis over a the term of on the lease. Lease incentives loss received or were profit recognised in profitin or loss as recognised were leases operating under made Payments the cost model. using measured and property investment as classified was both, for or appreciation capital for or incomerental earn to held was which lease,operating an under interestPropertyheld operating lease, the leased assets were not recognised on the statement of financial position. ownershipof were operating and, as classified leases except property interestfor under held Leases, where the Group or the Company did not assume substantially all the risks and rewards Operating lease plantand asproperty, is classified equipment. lease finance a was substance in which land Leasehold was confirmed. the minimum lease payments over the remaining term of the lease when the lease adjustment liability.the of remainingpaymentswerebalance lease Contingentaccounted by revisingfor each period during the lease term so as to produce a constant periodic rate of interest on the allocated to liability. outstandingwas finance expense Thethe of reduction the and expense finance the between apportioned were leases finance under made payments lease Minimum Finance lease(cont’d) financial statements Notes tothe 81 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 82 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 2. (i) (h) Significant accountingpolicies(cont’d) (k) (j) financial statements Notes tothe (ii) (i) Contract cost is due) from thecustomers. transfer goods or services to a customer for which consideration has been received (or the amount contractA statedis liability costat representsand Groupthe Companyof obligationthe the or to is consideration to in accordance to MFRS9, FinancialInstruments (see Note 2(k)(i)). right Company’s the or Group’s the conditional on something other than when the passage of time. recognisedA contract asset is subject is to impairment asset contract A Contract asset/Contractliability (i) Impairment cash and cash flows, cash of of equivalents are management presented statement netofbankoverdrafts andpledgeddeposits. the the of in purpose Company the the For and commitments. Group term short the their by used are and less, or months three of maturities original with value fair in changes of risk insignificant investmentshavean liquid which highly and banks with deposits and balances hand, on cash of consistequivalents cash and Cash Cash andcashequivalents had there beennoimpairment loss recognised previously. recognised been havewould that amount exceedthe not does costcontract the of amount existslonger improved,has or reversedlossis impairment the extenttothe carrying the that expected revenue less expected cost that will be incurred. Where the impairment condition no loss is recognised in profit or loss when the carrying amount of the contract cost exceeds the revenuerelates.impairment of patternasset An the consistentthe recognition with which to These contract costs are initially measured at cost and amortised on a systematic basis that is is expected to berecovered. the GroupCompany,the or of resourcessatisfyingperformancein used be will future the obligationsin it and enhances or generates cost the when asset an as contract anticipated an Companycontractrecognisesrelatecontracttothe a cost that a or Groupdirectlyor toThe Cost tofulfilacontract the Group ortheCompany when expects to recover contracts thesecosts. obtaining of costs incremental recognises Company the or Group The Incremental costofobtainingacontract an amountequal to lifetime expected credit loss. creditloss. Loss allowances for trade receivables contractand assets are always measured at not lifetimeincreased significantly since initial recognition, which are to measured at 12-month expected equal amount has creditrisk which for securities debt an other balanceand reportingbank date,the and cash at allowances loss measure expectedcredit loss,except Companyarethat securities determinedtofordebt have low creditat risk the and Group The probability-weighted estimate ofcredit losses. a are losses credit Expected receivables. lease and assets contract income, comprehensive other through value fair at measured investments debt cost, amortised at measured assets The Group and the Company recognise loss allowances for expected credit losses on financial Financial assets 2. (k) Significant accountingpolicies(cont’d) (ii) (i) Impairment (cont’d) cash inflows ofotherassets orcash-generating units. of assets that generates cash inflows from continuing use that are largely independent of the group smallest the into together grouped are assets testing, impairment of purpose the For estimated. exists,indicationasset’s anysuch the If recoverable then impairment. of indication is amount any is there whether determine to period reporting each of end the reviewedat are assets) The carrying amounts of other assets (except for inventories, contract assets and deferred tax Other assets comply withtheGroup’s ortheCompany’s procedures for recovering theamountsdue. enforcement order subject to in be are that written assets to off activities still could financial write-off. the However, to subject amounts the repay flows to cash generatesufficient could that income of sources or haveassets not does debtor the that determines Company the or the to full) or extent partially that (either there is off no realistic written prospect is of recovery. asset financial This a is generally of the case amount when the carrying Group gross The havea that events more or detrimental impactontheestimated future cashflows one ofthefinancial asset have occurred. when impaired is credit asset financial A credit-impaired. arecomprehensive income other through value fair at securities debt and cost amortised at carried assets financial whether assess Company the and Group the date,reporting each At in othercomprehensive income. other through value fair at measured investmentscomprehensive income is recognised debt in profit or loss of and the allowance respect account is recognised in loss impairment An account. profit or loss and the carrying amount of the asset is reduced through the use of an allowance An impairment loss in respect of financial assets measured at amortised cost is recognised in provision matrix withreference to historical credit loss experience. The Group and the Company estimate the expected credit losses on trade receivables using a the and Group the which Company are exposed over to credit risk. period contractual maximum the is losses estimating credit when consideredexpected period maximum The date. reporting the after months 12 the within possible are eventsthat default from result that losses expectedcredit of portion the are losses expectedcredit 12-month while asset, the possible of expectedlifeevents overdefaultthe all from result that losses credit expected the are losses credit expected Lifetime looking information, where available. forward-including and assessment credit informed experienceand Group’shistorical the on quantitativecostboth effort.Thisqualitativeincludes or and analysis,informationand based Company the consider and reasonable and Groupsupportable information that is the relevant and loss, available without creditundue expected estimating when and recognition initial When determining whether the credit risk of a financial asset has increased significantly since Financial assets(cont’d) financial statements Notes tothe 83 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 84 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 2. (k) Significant accountingpolicies(cont’d) (l) (m) financial statements Notes tothe (ii) Impairment (cont’d) (ii) (i) subsequently. Instruments classified as equity are measured at cost on initial recognition and are not remeasured Equity instruments (i) Employee benefits in whichthereversals are recognised. year financial the in loss or profit tocredited are losses impairment Reversalsrecognised.of been had loss impairment no if amortisation, or depreciation of net determined, been have extentexceedthe not asset’sdoes the amount that carrying would that amount carrying the recoverablethe determine amount sinceto the last used impairment loss estimateswas recognised. the An impairment in loss is change reversed only a to been has there if reversed is reporting each of end the at period for any indications assessed that the loss has decreased or no longer exists. are An impairment loss periods prior in recognised losses Impairment cash-generating unit(or agroup ofcash-generating units) onapro rata basis. cash-generating units are allocated to reduce the carrying amounts of the other assets in the Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash- related its or asset an of amount carrying generating unitexceeds itsestimated recoverable the amount. if recognised is loss impairment An generating unit. cash- or asset the to specific risks the and money of value time the of assessments market flows are discounted present pre-tax their discount a to using value rate that currentreflects cash future estimated the use, in value assessing In disposal. of costs less value fair its and use in value its greaterof the is unit cash-generating or asset an recoverableTheof amount Other assets(cont’d) Ordinary shares are classified asequity. Ordinary shares deduction from equity. Costsdirectly attributableto issueinstrumentsthe of areclassified equity as recognised a as Issue expenses estimated reliably. topay obligation be can legalobligation or constructive the employeeand the byprovided service past present of result a as has a amount this the Group if plans bonus cash profit-sharing short-term or under paid be to expected amount the for recognised is liability A service isprovided. leaveleavesick and areareundiscounted measuredand an relatedexpensed basis on the as annual paid bonuses, annual salaries, of respect in obligations benefit employeeShort-term Short-term employeebenefits 2. (m) Significant accountingpolicies(cont’d) (o) (n) (ii) Employee benefits(cont’d) (i) Revenue andotherincome cost. money and the risks specific to the liability. of value The unwinding of time the discount is the recognised as finance of assessments market current reflects that rate pre-tax a at flows cash future expected the discounting by determined areProvisions obligation. the settle to required be will benefits economic of outflow an that probable is reliably,it estimated and be can that obligation A provision is recognised if, as a result of a past event, the Group has a present legal or constructive Provisions (iv) (iii) (ii) extent that acashrefund orareduction infuture repayments the isavailable. to asset inthe an as recognised are loss contributions Prepaid or relate. they profit which to to year financial charged are funds pension statutory to contributions Group’s The State plans (c) (b) (a) of thefollowing overtime criteria ismet: The Group or the Company transfers control of a good or service at a point in time unless one the customer obtainscontrol oftheasset. it as) (or as)(or when transferredwhen is revenuecustomer.asset to serviceAn recognisesor product overcontrola transfers Company the or Group The parties. third of behalf on collected amounts excludingcustomer, a to a customer services or goods with transferring afor contract exchange in in specified consideration the on based measured is Revenue Revenue right to receive payment isestablished. Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s Dividend income Interest income is recognised as it accrues using the effective interest method in profit or loss. Interest income over theterm ofthelease. Rental income from investment property is recognised in profit or loss on a straight-line basis Rental income completed to date. use and the Group or the Company has an enforceable right to payment for performance Group’sthe Company’sthe or alternativecreate an performancenot with assetdoes an the that asset an enhances or creates customer controls astheasset iscreated performance orenhanced; or Company’s the or Group’s the or theCompany performs; the customer simultaneously receives and consumes the benefits provided as the Group financial statements Notes tothe 85 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 86 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 2. (r) (q) (p) Significant accountingpolicies(cont’d) financial statements Notes tothe opn b te egtd vrg nme o odnr sae ottnig uig h period, the during outstanding shares adjusted for own shares held. ordinary of number average weighted the by Company the of shareholders ordinary to attributable loss or profit the dividing by calculated is EPS Basic The Group presents basicearningspershare data for itsordinary shares (“EPS”). Earnings perordinaryshare the related taxbenefitwillbe realised. at the end of each reporting period and are reduced to the extent that it is no longer probable that available against which the temporary difference can be utilised. Deferred tax assets are reviewed A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be and liabilities onanetbasisortheirtaxassets andliabilitieswillberealised simultaneously.assets tax current settle to intend they but entities, tax different on or entity,taxable same the on authority tax same the by leviedtaxes income torelate they and assets, and liabilities tax current offset to enforceableright legally a is there if offset are liabilities and assets tax Deferred enacted orsubstantively enacted by theendofreporting period. been have that laws the on reverse,theybased when differencestemporary the to applied be to are expected that rates tax the at measured is tax Deferred loss. or profit taxable nor accounting neither affects that and combination business a not is that transaction a in liabilities or assets of tax Deferredbases. recognisednot is tax fortemporary their differences fromarising recognition initial the and position financial of statement the in liabilities and assets of amounts carrying the Deferred tax is recognised using the liability method, providing for temporary differences between any and period, reporting the of end adjustment to taxpayable the inrespect ofprevious financial years. by enacted substantively or enacted rates tax using year,the for loss or income taxable the on receivable or payable tax expected the is tax Current directly inequityorothercomprehensive income. items recognised or combination business a relates to it that loss exceptextent the or profit to in Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised Income tax their pending borrowings specific expenditure of onqualifyingassets isdeducted from theborrowing costs eligible for investment capitalisation. temporary the on earned income Investment the qualifyingasset for itsintended useorsaleare interrupted orcompleted. preparetonecessary activities the all of substantially when ceases Capitalisation or suspended progress.is borrowingcosts in are sale or use intended its for asset the prepare to necessary are that activities and incurred borrowingbeing incurred,arecosts being is asset expenditurethe for when commences asset qualifying a of cost the of part as costs borrowing of capitalisation The their for ready intended useorsale, are capitalisedaspartofthecost ofthoseassets.get to time of period substantial a take necessarily that assets are which assets, qualifying of production or construction acquisition, the to attributable directly costs Borrowing a qualifyingasset are recognised inprofit orloss usingtheeffective interest method. Borrowingcosts that are directlynot attributable to acquisition,the construction productionor of Borrowing cost 2. (u) (t) (s) Significant accountingpolicies(cont’d) curne f n o mr ftr eet, r as dslsd s otnet iblte uls the unless liabilities contingent as probability ofoutflow ofeconomic benefits is remote. disclosed also are events, future more or one of occurrence non- or occurrence the by confirmed be only will existence whose obligations, Possible remote. is benefits economic of outflow of probabilityliability, contingentthe unlessa as disclosed is and or theamount be required, will cannot benefits be estimated economic reliably, of the obligation outflow is not an recognised in that the statements probable of financial position not is it Where Contingent liabilities which discrete financialinformation is available. for and performance, its assess to and segment the to allocated makebe resourcesto Director,toabout decisions Managing Group the is case this in which maker, decision operating chief the by reviewedregularly are results segment Operating components. other Group’s the of any with may earn revenues and incur expenses, including revenues and expenses that relate to transactions An operating segment is a component of the Group that engages in business activities from which it Operating segments or changeincircumstances that causedthetransfers. The Group recognises transfers between levels of the fair value hierarchy as of the date of the event Level 3: Level 2: Level 1: inputs usedinthevaluation technique asfollows: the on hierarchyvaluefairbased a levelsdifferentintoin categorised is valueFairpossible. as far liability,a or assetfair valuean the of observablemeasuring Group uses marketWhen the as data to it selling by or use best another market participantthat would usetheasset initshighest andbest use. and highest its in asset the using by benefits economic generate to For non-financial asset, the fair value measurement takes into account a market participant’s ability the in either place takes liability the transfer or principal market orintheabsence ofaprincipalmarket, inthemost advantageous market. asset the sell to transaction the that assumes in measurement Theliability date. measurement a the transferat participants to market between transactionpaid orderly an or asset is an transactions,sell to received lease be and would that payment price share-based the foras exceptdetermined liability, a or asset an of value Fair Fair valuemeasurements unobservable inputsfor theasset orliability. or liability, eitherdirectly orindirectly. inputs other than quoted prices included within Level 1 that are observable for the asset the Group canaccess at themeasurement date.that liabilities or assets identical for markets active in (unadjusted) prices quoted financial statements Notes tothe 87 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 88 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD

3. Property, plant and equipment

Furniture, financial statements Notes tothe Machinery fittings Assets Freehold Motor and and under land Buildings vehicles equipment equipment construction Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Cost At 1 January 2018 8,736 3,158 10,372 165,280 4,582 3 192,131 Additions - - 721 11,371 164 - 12,256 Disposals - - (478) (1,601) - - (2,079) Written off - - - - - (3) (3) Reclassification - 600 - (600) - - - Transfer to investment properties (Note 5) (620) (463) - - - - (1,083) At 31 December 2018, as previously reported 8,116 3,295 10,615 174,450 4,746 - 201,222 Adjustment on initial application of MFRS 16 - - (2,532) (71,423) - - (73,955) At 1 January 2019, as restated 8,116 3,295 8,083 103,027 4,746 - 127,267 Additions - - - 107 1 - 108 Disposals (3,412) - (2,853) (16,011) (487) - (22,763) Transfer to asset held for sale (2,544) (2,680) - - - - (5,224) At 31 December 2019 2,160 615 5,230 87,123 4,260 - 99,388 3. Property, plant and equipment (cont’d)

Furniture, Machinery fittings Assets Freehold Motor and and under land Buildings vehicles equipment equipment construction Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Depreciation and impairment loss At 1 January 2018 - 712 7,200 82,115 2,965 - 92,992 Depreciation for the year - 57 800 14,666 382 - 15,905 Impairment loss - - - 400 - - 400 Disposals - - (330) (732) - - (1,062) Reclassification - 93 - (93) - - - Transfer to investment properties (Note 5) - (213) - - - - (213) At 31 December 2018, as previously reported Accumulated depreciation - 649 7,670 95,956 3,347 - 107,622 Accumulated impairment loss - - - 400 - - 400 - 649 7,670 96,356 3,347 - 108,022 Adjustment on initial application of

MFRS 16 - - (714) (18,701) - - (19,415) financial statements At 1 January 2019, as restated Accumulated depreciation - 649 6,956 77,255 3,347 - 88,207 Accumulated impairment loss - - - 400 - - 400 - 649 6,956 77,655 3,347 - 88,607 Depreciation for the year - 65 353 4,436 375 - 5,229 Impairment loss - - - 291 - - 291 Notes tothe Disposals - - (2,390) (8,221) (460) - (11,071) Transfer to assets held for sale - (606) - - - - (606) At 31 December 2019 Accumulated depreciation - 108 4,919 73,470 3,262 - 81,759 Accumulated impairment loss - - - 691 - - 691 - 108 4,919 74,161 3,262 - 82,450 Carrying amounts At 1 January 2018 8,736 2,446 3,172 83,165 1,617 3 99,139 At 31 December 2018 8,116 2,646 2,945 78,094 1,399 - 93,200 At 31 December 2019 2,160 507 311 12,962 998 - 16,938 89 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 90 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 3. 3.6 3.5 3.4 3.3 3.2 3.1 Property, plantandequipment(cont’d) financial statements Notes tothe The following are recognised inprofit orloss: guarantees inlinewiththeshortterm nature oftheleases. value residual include not do leases These leasing. not when use own for be will equipment and plant The arrangement. lease the on guarantee financial a require not does generally Group The lease to customers uponrequest. and short-termare leases The parties. thirdto equipment and plant its of some leases GroupThe Plant andequipmentsubjecttooperatinglease has beencompleted asat thedate ofthisreport. enabled the Group to raise working capital while continue to use the its officeoffice buildings and leased the buildings back for 5.5 years. This sale and leaseback transaction buildings. The transaction amountof carrying with a buildings RM4,618,000(2018: wasnil) RM office transferred to assets forheld Groupthe because sale toplans sell 2019, 31 December ended year financial the During Transfer toassetsheldforsale reporting periodisRM2,174,000 (2018: RMnil). the of end the at disposals the receivablefrom remains amount The creditors. its with off contra of RM22,132,000 of which RM3,785,000 was received in cash and RM16,173,000 (2018: RM nil) was considerationa for property,equipment certain and year,of plant the disposed Group During the Disposals because itwas leasedto athird party. RM870,000investmenttransferredpropertywastoof amount carrying a with building a 2018, In Transfer toinvestmentproperty as securityfor thebankfacilities granted to theGroup (see Note 14). pledged arerespectively RM2,646,000) RM507,000 RM2,160,000RM8,116,000and and of (2018: At 31 December 2019, freehold land and buildings of the Group with an aggregate carrying amount Security cessation ofbusiness operations ofMM2BuildingSystem Sdn.Bhd.. planned the following equipment and machinery to respect with RM400,000) (2018: RM291,000 During the financial year ended 31 December 2019, the Group has recognised an impairment loss of Impairment loss Lease income Group RM’000 2019 3,718 RM’000 2018 1,015

4. 4.1 the assets, Directors right-of-use madesignificantassumptions on extension optionsandincremental the borrowing rate. assessing In 2019. January 1 at as assets right-of-use to reclassified been have liabilities lease finance under equipment and Plant date. that after lease the renew to option an TheGroup siteleases offices accommodations and staff between run that one year eight to with years, * Derecognition oftheright-of-useassets during2019 asaresult ofdisposal. Right-ofuse assets At 31December 2019 Derecognition* Depreciation Additions At 1January2019 Group M75100 f hc R37600 a rcie i cs ad h rmiig aac of balance remaining the of and consideration cash a in for received assets RM13,795,000 (2018: RM was nil) was contra offwithitscreditors. right-of-use RM3,736,000 certain which of of disposed RM17,531,000 Group the year, the During Disposals Buildings (348) RM’000 644 546 446 financial statements - (756) (286) RM’000 vehicle 776 1,818 Motor Notes tothe - equipment Machinery (19,497) (7,959) 25,266 52,722 RM’000 and - (20,253) (8,593) RM’000 54,986 26,686 546 Total 91 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 92 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 5. 5.3 Disposals 5.2 Other 5.1 Additions Investment properties At 31December 2019 At 31December January2019 2018/1 At 1January2018 Carrying amounts Accumulated impairmentloss Accumulated depreciation At 31December 2019 Disposal Impairment loss Depreciation for theyear At 31December January2019 2018/1 Other (Note 3) Transfer from property, plantandequipment Depreciation for theyear At 1January2018 Accumulated depreciation At 31December 2019 Disposal Additions At 31December January2019 2018/1 Other (Note 3) Transfer from property, plantandequipment At 1January2018 At cost Group Additions financial statements Notes tothe f hc R16700 a rcie i cs ad h rmiig aac ws ota f wt its with off contra was balance remaining creditors ofRM1,583,000 (2018: RMnil). the and cash in received was RM1,617,000 which of During the year, the Group disposed of an investment property for a consideration of RM3,200,000 Purchase Agreementand entered withtheGroup datedSale 29January2015 inrelation to theinvestment property.the terminated had customer,contract a of subsidiary vendor,a the 2018, In to theGroup. haveapartments servicedissuedfouryet be the tostrata for the 2019,Decembertitles At 31 11.2). Theseinvestment propertiesbycontract representmade a kind customerin settlement (seeNote Note 5.4 5.3 5.2 5.2 5.1 (780) (228) (1,084) (14) 3,890 8,445 542 248 236 95 9,792 3,795 12,096 buildings 1,083 12,638 213 Freehold 1,762 land and 11,554 1,212 RM’000 1,212 550 - construction 625 625 625 625 793 793 Buildings 168 RM’000 under ------(1,084) RM’000 10,585 4,420 8,445 (780) 4,515 1,212 12,721 1,083 168 13,263 236 12,347 (14) 542 213 (228) Total 248 1,762 1,212 95 550

5. secure bankingfacilities granted to theGroup (see Note 14). to charged are RM12,096,000) RM9,792,000(2018: to amounting Group the of propertiesInvestment Security of other relevant characteristics. values transacted recent of in location, size and shape of land, age and condition of the building, tenure, analysis title restrictions, if any and critical entails method comparable properties in the neighbourhood and comparison making adjustment for differences such as market differences The method. comparison market the using Directors the byestimated is investmentproperties the of value fair The Valuation processappliedbytheCompanyforLevel 3fair value 5.4 Impairmentloss Investment properties(cont’d) The following are recognised inprofit orloss in respect ofinvestment properties: At 31December Additions At 1January Cost Company The operating leasepayments to bereceived are asfollows: -non-income generating investment properties Direct operating expenses: Rental income Group Fair value ofinvestment properties iscategorised asfollows: Fair valueinformation Total undiscounted leasepayments Less thanoneyear Group Freehold landandbuildings Level 3 Group approach. marketthe estimated using disposal valuefaircost lessof on based nil) RM RM1,212,000(2018: of loss impairment an recognised has Group the 2019, December 31 ended year financial the During financial statements Notes tothe Buildingsunder construction RM’000 RM’000 RM’000 RM’000 793 9,856 625 168 (241) 2019 2019 2019 2019 318 9 9 RM’000 RM’000 RM’000 RM’000 625 16,428 625 (248) 2018 2018 2018 2018 388 10 10 - 93 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 94 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 6. 5.

* Disposedofsubsequent to endofreporting period(see Note 29.1). Investments insubsidiaries uncertainties involved currently inestimating theirfair values. are end year at Company the of under construction and the fair values of the said properties are and unable to be determined in view of the Group the of apartments serviced Two) (2018: Two Buildings underconstruction Investment properties(cont’d) Details ofthesubsidiariesare asfollows: Less: allowance for impairmentlosses Unquoted shares, at cost Company Sdn.Bhd. Exofield Property Management BE Specialist Sdn.Bhd. MM2BuildersSdn.Bhd. anditssubsidiary: MM2 BuildingSystem Sdn.Bhd. Rekavista (Sarawak) Sdn.Bhd. subsidiary: * Rekavista Sdn.Bhd.andits IkhmasEquipmentSdn.Bhd. IJGeotechnic Sdn.Bhd. subsidiaries: Ikhmas Jaya Sdn.Bhd.andits Name ofentity financial statements Notes tothe incorporation Country of Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Property Management construction General civilandbuilding Dormant during theyear. The entityceased operation prefabricated buildingsystem. Manufacturing of Dormant Dormant and equipment Rental ofplant, machinery Dormant works buildings, andothercivil construction ofbridgesand Piling andfoundation works, Principal activities (98,760) RM’000 98,910 2019 150 2019 ownership Effective 100 100 100 100 100 100 interest 60 60 60 % 98,650 RM’000 (260) 98,910 2018 2018 100 100 100 100 100 100 60 60 60 % 6. 6.1 (2018: RMnil)was madeandrecognised in“other operating expenses”. Based on the impairment assessment performed by the Company, an impairment loss of RM98,500,000 adjusted financialpositionofthesaidsubsidiary. the using the using derived subsidiary is subsidiary recoverableThethe method. of disposal amount the of costs less value fair in investment the of amount recoverable the determines management The and there was adeficitinequity attributable to owners ofthe company. exceededsubsidiary assetscurrent the its of liabilities currentdate, the that of as and, 2019 December 31 ended year financial the for taxation after loss net significant incurred subsidiary Thesubsidiary. a in investment an to respect with impairment of indication an noted management year,the the During The market factors. and entities management reviewsthe andidentifiesbalances respective that are but to beimpaired ona continuous basis. of include, position factors financial These and investments. activities the the to, of limited recoverability not the affect that factors of basis the on non-recoverability of investments in subsidiaries. The level of allowance is evaluated by the management end and impairment losses will be recognised at a level considered adequate to provide for the potential TheCompanyreviewed has financial valueinvestmentseach year- atcarrying of subsidiaries the the in Impairment oninvestmentinasubsidiary Investments insubsidiaries(cont’d) The Group’s subsidiariesthat have material non-controlling interests (“NCI”)are asfollows: Non-controlling interestsinsubsidiaries Current assets Non-current assets As at31December intra-groupelimination Summarised financialinformationbefore Non-current liabilities Revenue Year ended31December Net assets/(liabilities) Current liabilities Profit/(Loss) attributable to NCI Carrying amountofNCI interest NCI percentage ofownership interest andvoting 2019 income/(expense) Profit/(Loss) for the year/total comprehensive Carrying amount ofNCI NCI percentage of ownership interest and voting interest 2018 Cash flows usedinfinancing activities Cash flows usedininvesting activities Cash flows from/(used in)operating activities Profit/(Loss) attributable to NCI Net increase/(decrease) incashandequivalents financial statements BE Specialist Sdn. Bhd. (4,464) 7,459 RM’000 4,632 (107) (530) 366 889 146 (16) Notes tothe 527 40% 40% 212 249 89 211 64 MM2 Building System Sdn. Bhd. andits subsidiary (20,537) (34,337) (4,783) (14) RM’000 13,751 (14) (1,913) (3,895) (6,301) 49 (8,215) 40% 40% - - - - (8,004) RM’000 (1,767) (3,646) (6,237) Total 95 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 96 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD

6. 7. valuefair through profit orloss for a atconsideration ofRM160,000. carried was which memberships club in investment its of disposed Group year,the the During 6.1 Investments insubsidiaries(cont’d) Other investments - Clubmemberships - Quoted investments heldfor trading Fair value through profit orloss: Group financial statements Notes tothe The Group’s subsidiaries that have material non-controlling interests (“NCI”) are as follows (cont’d): Non-controlling interestsinsubsidiaries(cont’d) Net decrease incashand equivalents Cash flows from financingactivities Cash flows usedininvesting activities Cash flows from/(used in)operating activities Profit/(Loss) for the year/total comprehensive income/(expense) Revenue Year ended31December Net assets/(liabilities) Current liabilities Current assets Non-current assets As at31December elimination Summarised financialinformationbeforeintra-group 2018 BE Specialist Sdn. Bhd. RM’000 RM’000 (3,321) 2,597 (727) 9,431 2019 (26) 482 885 622 219 161 4 4 - MM2 Building System Sdn. Bhd. andits subsidiary RM’000 RM’000 (33,861) (15,754) (9,737) 17,632 2018 1,717 226 222 475 (11) (11) 4 - -

8. Movement intemporarydifferencesduringthefinancialyear Deferred taxassets have notbeenrecognised inrespect ofthefollowing items (stated at gross): Unrecognised deferredtaxassets therefrom. future taxable profit will be available against which the Group and the Company can utilise the benefits probablethat not is it because items these respectof recognisedhavein been assets Deferred not tax for available are losses tax unutilised utilisation the in the 2018, next Act seven Finance years, the for of which, provisionany the excess with at accordance the In end of the seventh year, will be disregarded. Deferred taxassets andliabilitiesare attributable to thefollowing: Recognised deferredtaxassetsandliabilities Deferred taxassetsandliabilities Net taxliabilities Set offoftax Tax assets/(liabilities) Other items Tax loss carry-forwards Provisions Other items Other deductibletemporary differences Tax loss carry-forwards Property, plantandequipment Tax losses carry-forwards Provisions Unabsorbed capitalallowances Property, plantandequipment Group Provisions Group Assets RM’000 RM’000 1.1.2018 (9,902) (8,210) 2019 1,517 175 At ------Group - RM’000 (3,262) Recognised RM’000 172,430 2,603 2,493 2,977 5,755 99,666 2018 63,170 (Note 19) 9,539 175 2019 in profit RM’000 financial statements or loss - 55 2,603 5,370 1,460 1,307 Liabilities RM’000 (6,469) (6,469) (6,469) - 2019 31.12.2018 RM’000 34,208 RM’000 27,495 (2,840) (8,595) - - - - 6,713 2018 2,603 2,977 Notes tothe RM’000 175 At (8,595) (8,595) (5,333) - - 3,262 Company 2018 Recognised - - - RM’000 (Note 19) Net in profit RM’000 2,556 2,556 RM’000 2019 (2,603) (3,629) (2,977) (6,469) (6,469) (6,469) or loss (175) 2,126 2019 ------31.12.2019 RM’000 RM’000 RM’000 (2,840) (2,840) (6,469) (6,469) (8,595) 2,603 2,977 2018 2018 407 407 175 At ------97 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 98 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD

9. 10. Significant changes to contract assets/(liabilities) balances duringtheperiodare as follows: for customer a from received consideration advance construction contract, ofwhichrevenue the isrecognised overtime duringtheconstruction ofaproject. to relate primarily liabilities contract The on completed work for consideration to rights Group’s construction contracts butnotyet billedat thereporting date. the to relate primarily assets contract The Inventories Contract assets/(liabilities) -Changeinvariable consideration previous periodarisingfrom: Decrease inrevenue recognised in receivables dueto changeintimeframe periodnottransferred to trade Contract assets at thebeginningof changeintimeframe periodnotrecognised asrevenue dueto Contract liabilitiesat thebeginningat the Contract liabilities periodrecognised asrevenue Contract liabilitiesat thebeginningof Contract assets Non-current Contract assets Current Write-down to netrealisable value Inventories written off Inventories recognised ascost ofsales Recognised inprofit orloss: Finished goods Construction materials onsite Group financial statements Notes tothe Group Group 67,900 (15,020) RM’000 RM’000 (22,351) 11,916 2,608 29,751 12,351 2019 2019 Restated Restated 28,735 RM’000 RM’000 (14,959) 119,702 (1,841) 86,717 6,532 2,351 2018 2018 Company Company (10,599) RM’000 RM’000 RM’000 10,000 1,935 782 179 254 2019 2019 2019 254 - 39 - - - - Restated Restated (10,039) RM’000 RM’000 RM’000 866 782 1,034 1,280 745 37 2018 2018 2018 84 - - - - - 11. 11.1 11.4 11.3 11.2 Trade andotherreceivables Prepayments Deposits Other receivables Amount duefrom subsidiaries holdingcompany Amount duefrom ultimate Non-trade Advances to suppliers companies Amount duefrom related withcustomers Trade receivables from contracts Trade Current in-progress. Retention sumsare unsecured, interest free andexpected to becollected asfollows: Included in trade receivables at 31 December 2019 are retention sums related to construction work- interest free andrepayable ondemand. unsecured, are companiesrelated company, and holding subsidiaries ultimate from due Amounts (2018: RM12,836,000 to amounting receivables RM11,160,000) are assigned to thebankfor factoring facilities (see Note 14). Group the of receivables trade in Included they are free via from encumbrances. settled be will sum outstanding when Grouptransferred the be to will the settlement forearmarked units These apartments. serviced which of customer a from due RM53,059,000) (2018: RM46,942,000 of amount an is 2019 December 31 at Group the of receivables trade in Included (2018: RM10,480,000). overdueRM7,571,000amounts aretotallingyear one receivablewithin retentionsums in Included More than4years 3 -4years 2 -3years 1 -2years Within 1year 11.1, 11.2, Note 11.4 11.4 11.4 11.3 Group Group RM’000 RM’000 4,968 152,292 160,818 64,351 44,370 1,116 12,027 869 8,526 2019 2019 1,573 financial statements 7,151 803 - - - - 173,559 40,252 RM’000 RM’000 63,109 2,650 162,278 19,198 3,121 1,314 5,977 1,340 11,281 2018 2018 459 79 Notes tothe - - - Company Company 43,548 42,670 42,020 RM’000 RM’000 832 878 15 7 11 2019 2019 - 832 617 - - - - - 93,433 RM’000 RM’000 94,816 94,154 614 662 78 22 2018 2018 7 ------99 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 100 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 13. 12. 13.1 Capital andreserves amountingto Company asdisclosedinNote 14. the Company the to and of Group the to pledged granted and facilities credit and are guarantee bank for respectively security RM7,700,000) as institutions Group financial (2018: of the nil RM and banks RM36,853,000) (2018: licensed RM27,991,000 with placed deposits fixed The 13.3 13.2 Cash andcashequivalents Fixed depositsplaced withlicensed banks Cash andbankbalances financial statements Notes tothe Share capital Ordinary shares The equityreserve represents waiver ofdebtsby ultimate holdingcompany (see Note 28.2). Equity reserve December 2015. 31 ended year financial the in Bhd. Sdn. Jaya Ikhmas of acquisition the during acquired shares of The merger deficit comprises the difference between the cost of acquisition and the nominal value Merger deficit are entitledto onevote pershare at meetingsoftheCompany. The holders of ordinary shares are entitled to receive dividends as declared from time to time, and issued rank paripassu inallrespects withtheexisting shares oftheCompany. sharesordinarynew The capital. working of RM9,145,000purpose considerationtotalof the fora RM0.21 and RM0.215 per ordinary share respectively via private placements to eligible investors for During the financial year, the Company issued 20,000,000 and 23,000,000 new ordinary shares at At 31December At 1January Ordinary share Issued andfully paidup: Issued during thefinancial year Group 588,350 of shares 43,000 545,350 Number RM’000 28,531 540 27,991 ’000 2019 2019 Group andCompany 182,542 191,687 RM’000 RM’000 Amount 37,852 9,145 36,853 999 2019 2018 Company 530,350 545,350 of shares 15,000 Number RM’000 ’000 2019 2018 12 12 - 173,992 182,542 RM’000 RM’000 Amount 8,550 7,700 7,729 29 2018 2018

14. 14.1 Note3.2), (see land by freehold secured deposits placed withlicensed banks(see Note 12)andassignment oftrade receivables are (see Note 11.3). facilities finance trade and factoring overdrafts, Bank The term loansare secured over theGroup’s landandbuildings(see Note 3.2andNote 5). Security to RM802,000 hasbeenwithdrawn subsequentto theendofreporting period. During the year, there are additional covenants imposed by a bank and the overdraft facility amounting Termination ofbankoverdraftfacility Loans andborrowings Secured term loans Secured factoring facility Finance leaseliabilities trust receipts Secured bankers’ acceptances/ Secured bankoverdrafts Current Secured term loans Finance leaseliabilities Non-current Finance leaseliabilitiesare payable asfollows: Finance leaseliabilities Between oneandfive years Group Less thanoneyear Note 14.1 14.1 Group RM’000 3,340 1,849 23,138 30,205 1,947 1,947 1,878 32,152 2019 financial statements - - payments minimum 36,259 22,656 RM’000 90,730 RM’000 68,074 12,208 13,526 33,455 Future 17,139 14,962 18,493 5,517 327 5,754 lease 2018 2018 Notes tothe Company RM’000 RM’000 Interest (2,790) (1,436) (1,354) 2018 2019 ------payments minimum value of RM’000 RM’000 6,968 6,968 Present 30,665 13,526 6,968 17,139 lease 2018 2018 ------101 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 102 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 15. 14. Trade andotherpayables 15.3 15.2 15.1 14.2 Loans andborrowings(cont’d) Accruals Other payables Amount dueto directors Non-trade Accruals Trade payables Amount dueto asubsidiary Trade Current financial statements Notes tothe odn cmay mutn t R1,0,0 (08 R1,8,0) Te mut u t the to due amount The RM13,187,000). (2018: ultimate holdingcompany isunsecured, interest free and repayable ondemand. RM12,301,000 to amounting ultimate company the to due holding amount an is 2019 December 31 at Group the of payables other in Included to RM21,405,000 (2018: RM15,177,000). Included in trade payables of the Group at 31 December 2019 are retention sums payable amounting on repayable and free interest unsecured, are directorsdemand. and subsidiary a to due amounts The Reconciliation ofmovementliabilitiestocashflowsarisingfromfinancingactivities liabilities Finance lease other borrowings Term loansand trust receipts acceptances and Bankers’ 2018 Lease liabilities otherborrowings Term loansand trust receipts acceptances and Bankers’ 2019 Group At 1 January RM’000 12,208 54,471 11,598 30,665 33,910 27,257 29,851 91,018 Note 15.3 15.2 15.1 15.1 Adjustment application of MFRS16 (Note 30) on initial RM’000 Group 446 446 6,078 24,262 RM’000 14,553 147,347 30,867 223,107 ------171,609 171,609 51,498 1 January 2019 Adjusted RM’000 12,208 54,917 11,598 33,910 27,257 29,851 91,018 - 31,111 Restated 36,946 Net changes 185,159 49,632 135,527 RM’000 4,673 33,383 98,581 11,576 cash flows (29,642) (4,433) financing (10,359) 2018 (46,338) (14,850) (15,049) RM’000 (13,036) (18,253) from - Company Acquisition RM’000 3,003 5,242 2,239 2,239 1,019 1,984 RM’000 2019 of new lease 9,791 9,791 546 546 ------December Restated RM’000 RM’000 1,849 7,165 30,665 2,089 1,813 3,258 16,807 12,208 54,471 1,169 791 25,821 276 11,598 At 31 378 2018 - - 16. 16.1

16.2 Revenue - At apointoftime - Overtime Timing andrecognition Total revenue - Rental income - Equipmenthiringincome Other revenue - Salesofgoodsandservices - Construction contracts customers Revenue fromcontractswith The following information reflects thetypicaltransactions oftheGroup: Nature ofgoodsandservices The above revenue doesnotincludevariable consideration. contracts that have a duration ofmore thanoneyear. providing only information for disclosure is The period. the reporting of end the of as unsatisfied) partially unsatisfied (or are that showsrevenueobligations performancefollowingtable fromThe Transaction priceallocatedtotheremainingperformance obligations Construction contracts Group and services Sales ofgoods contracts Construction services goods or Nature of premises. customers at their and accepted by the services are delivered when thegoodsand Revenue isrecognised incurred method. over timeusingthecost Revenue isrecognised recognised revenue or methodusedto Timing ofrecognition Note 16.3 Group 199,536 date. from invoice of 60days Credit period architects. certified by milestones, agreed Based on terms payment Significant 284,968 RM'000 195,500 195,500 195,500 195,500 RM’000 2020 4,036 2019 3,718 financial statements 318 - - 306,790 305,407 305,407 308,193 RM'000 265,264 306,790 RM’000 1,383 Not applicable. delay. experienced when the projects will beimposed Damages (“LAD”) Ascertained Liquidated and in considerations Variable element 1,403 1,015 2021 388 1,383 2018 Notes tothe Company RM'000 RM’000 7,962 7,962 7,962 7,962 7,962 24,973 2022 2019 Not applicable. customer. given to the 2 years is period of Defect liability Warranty - - - - - RM'000 575,205 RM’000 15,087 15,087 15,087 15,087 15,087 Total 2018 - - - - - 103 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 104 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 16. 16.2 Revenue (cont’d) 16.3

financial statements Notes tothe • • The Group appliesthefollowing practical expedients: Transaction priceallocatedtotheremainingperformanceobligations(cont’d) 2) 1) During theyear underreview, significantassumptions are madeinthe following projects: to theprojects. is subject to negotiation between the relevant parties base on the facts and circumstances specific sum eventualsettlement the and judgemental highly is LAD of estimation The (“LAD”). Damages significant made Directors the contracts, assumptions construction and for judgement on recognised the revenuevariable considerations the pertaining deriving to Liquidated In and Ascertained Significant assumptionsonvariableconsiderations claimed. circumstances in respective project and the eventual settlement may be different from the amount The variable considerations recorded for the above projects are highly dependent on the facts and a customer andwhenthecustomer pays for that goodorservice isoneyear orless. financing component when the period between the transfer of a promised good or service to exemption not to adjust the promised amount of consideration for the effects of a significant have that obligations performance original expected remaining durations ofoneyear orless. on information of disclosure on exemption h csoe a te ul Lmu Hg Cut n 1 a 22. Se oe 4l fr more for 24(l) Note (See 2020. May 21 information). on Court High Lumpur Kuala the at customer the against suit a filed had and sum LAD entire the disputed has LAD.Management as payment The customer has on 13 May 2020 claimed and deducted RM13,800,000 from certified interim Completion issued by thecustomer, theproject hasbeencompleted on13May 2020. Practical of Certificate the on Based work. of omission on negotiation pending 2017 August An project. the of in 2017. completionSeptember suspended 30 tobeen grantedwas up has project time extensionThe of the until imposed be will day per RM30,000 of LAD which, 2017,failing July 19 by project the deliver and complete to IJSB requirescontract The 2015. November 17 on RM152,000,000 at valued contract construction a awarded been has IJSB Project B on most likely settlementamount. based LAD accrued and conditions the assessed has management 2019, December 31 at As proceedings. (SeeNote 24(i) for more information). LAD legal the for for solicitor a Claims appointing of of midst the in Statement is Group The and RM18,340,319. to amounting Summon of Writ received Group the 2020, May 20 On Certificate ofPractical Completion for theproject was issued on28June2019. until the completion of the project. An extension of time was granted up to 29 June 2018. The imposed be will day per RM50,000 of LAD which, failing 2018, June 1 by project the deliver contract contractThe construction2015. Decemberrequires completeto and RM166,400,00018 valuedIJSB at on a awarded been has entity, group a (“IJSB”), Bhd. Sdn. Jaya Ikhmas Project A 19. 18. 17. Recognised inprofitorloss Income tax Finance costs Finance income -others -overdue interest to suppliers -secured factoring facility Total income taxexpense/(credit) receipts -unsecured bankers’ acceptances/trust - Under/(Over) provision inprior years -secured bankoverdrafts differences - Origination andreversal oftemporary Deferred taxexpense - Underprovision in prioryears -secured term loans - Current year Current taxexpense -leaseliabilities are notat fair value through profit orloss: Interest expense offinancialliabilitiesthat -others -interest received from licensed banks method-at amortisedcost calculated usingtheeffective interest Interest income onfinancialassets Group Group Group RM’000 RM’000 RM’000 2,706 13,128 3,629 6,896 4,078 2,394 356 1,235 449 916 93 282 680 916 1,540 441 583 2019 2019 2019 financial statements - (5,370) 2,783 RM’000 RM’000 RM’000 2,055 (3,619) (155) (5,215) 892 2,185 4,201 1,516 408 364 13,512 231 1,123 1,751 2018 2018 2018 783 968 Notes tothe Company Company Company RM’000 RM’000 RM’000 450 450 135 135 2019 2019 2019 ------RM’000 RM’000 RM’000 242 242 491 491 2018 2018 2018 72 72 72 ------105 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 106 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 20. 19. Loss fortheyear Income tax(cont’d) -Otherreceivables -Contract assets -Trade receivables company -Amountduefrom arelated -Amountduefrom asubsidiary Impairment losses on: assets Depreciation ofright-of-use andequipment Depreciation ofproperty, plant properties Depreciation ofinvestment Deposits (recovered)/written off Contract costs written off Bad debts(recovered)/written off Material (income)/expenses Under provision inprioryears -Non-auditfees recognised Effect ofdeferred taxassets not -Statutory auditfees Auditors’ remuneration aftercharging: Loss fortheyearisarrivedat Loss before tax Reconciliation oftaxexpense/(credit) Non-deductible expenses rate of24% (2018: 24%) Income taxcalculated usingMalaysian tax financial statements Notes tothe

Note 4 3 5 Group Group (155,468) (37,312) 5,730 RM’000 RM’000 2,590 4,078 49,149 69,188 1,591 236 8,593 2,487 5,229 9,724 248 33,173 220 2019 2019 (101) (32) - - (36,226) (8,694) (3,619) (4,247) RM’000 RM’000 3,554 12,504 39,442 450 15,905 50 893 245 1,060 113 621 628 213 2018 2018 248 - - Company Company (38,841) (161,836) 38,325 RM’000 RM’000 59,798 516 2019 2019 40 184 ------(1,075) RM’000 RM’000 (258) 78 180 171 171 35 2018 2018 72 72 72 ------20. Loss fortheyear(cont’d) Lease income leases Expenses relating to short-term low-value assets Expenses relating to leasesof Rental expenses onpremises leases Expenses/(income) arisingfrom ontrade receivables Reversal ofimpairmentlosses -Otherinvestments -Right-of-useassets -Investment properties (Gain)/Loss ondisposalof: -Property, plantandequipment Write down ofinventories Realised gain onforeign exchange -Wages, salariesandothers Provident Fund -Contributions to Employees’ key managementpersonnel): Personnel expenses (including written off Property, plantandequipment Inventories written off -Investment inasubsidiary -Property, plantandequipment -Investment properties Impairment losses on(continued): (cont’d) Material (income)/expenses Note 9 9 3 Group (2,344) (10,440) RM’000 10,916 (4,036) 1,212 291 2,722 2019 1,194 - 759 financial statements 782 118 62 - - - - - (3,636) RM’000 1,094 (990) 400 10,619 (1,403) (3) 65 745 37 2018 3 Notes tothe ------Company RM’000 98,500 701 2019 58 ------RM’000 58 729 2018 ------107 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 108 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 21. 22. h cluain f ai erig pr riay hr a 3 Dcme 21 ws ae o te loss the on based calculated asfollows: was 2019 December 31 outstanding, shares at ordinary of averageweightednumber a share and shareholders ordinary to ordinaryattributable per earnings basic of calculation The Earnings perordinaryshare period, five (2018: three) major customers with respective revenue equals or more than 10%ofthe than or more equals Group’s total revenue andcontributed, inaggregate, 69% (2018: 58%)to revenue theGroup’swith total respective revenue. customers major three) (2018: five period, reporting the of end the at As construction. building and civil is Group the of segment significant The Major customers quantitative the thresholds met for reportingsegments these segments in of 2019 None and equipment. 2018. and All machinery the Group’splant, of operations rental are and systemcarried out in Malaysia. reportable prefabricatedbuilding of only sales and manufacturing the comprise segments non-reportable Other is segment. which construction, building and civil in involved predominantly is Group The Segment reporting with potential dilutive effects asat 31December 2019 (2018: None). instruments other or shares no has Group the as presented not is share ordinary per earnings Diluted Basic loss perordinary share Weighted average numberofordinary shares at 31December Loss attributable to ordinary shareholders Group financial statements Notes tothe (157,779) 564,087 RM’000 (27.97) ’000 2019 2019 2019 sen (28,961) 543,295 RM’000 (5.33) ’000 2018 2018 2018 sen 23. 23.1 Financial instruments (b) (a) The tablebelow provides ananalysis offinancialinstruments categorised as follows: Categories offinancialinstruments Trade andother payables Loans andborrowings Financial liabilities Cash andcashequivalents Trade andotherreceivables Financial assets Company 2018, restated Trade andotherpayables Financial liabilities Cash andcashequivalents Trade andotherreceivables Financial assets Company 2019 Trade andotherpayables Loans andborrowings Financial liabilities Cash andcashequivalents Trade andotherreceivables Other investments Financial assets 2018, restated Trade andotherpayables Loans andborrowings Financial liabilities Cash andcashequivalents Trade andotherreceivables Other investments Financial assets Group 2019 Amortised cost (“AC”) - Mandatorily required by MFRS9 Fair value through profit orloss (“FVTPL”) Note 14 14 14 15 15 15 15 12 12 12 12 7 7 financial statements (255,259) (275,889) (90,730) (185,159) (223,107) 210,297 43,560 Carrying 37,852 (10,226) RM’000 94,794 102,523 159,702 (6,968) (5,242) amount (32,152) 7,729 43,548 172,219 28,531 188,237 (3,258) 226 4 12 Notes tothe (255,259) (275,889) (90,730) (185,159) (223,107) 43,560 210,071 RM’000 94,794 102,523 (10,226) 159,702 (6,968) (3,258) (5,242) (32,152) 37,852 7,729 43,548 172,219 188,233 28,531 12 AC - - 226 RM’000 FVTPL 226 4 4 ------109 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 110 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 23. 23.3 23.4 23.2 Financial instruments(cont’d) financial statements Notes tothe • • • The Group hasexposure to thefollowing risksfrom itsuseof financialinstruments: Financial riskmanagement eevbe ad otat ses r rpeetd y h cryn aons n h saeet of statement the in amounts carrying financial position. the by represented trade are from arising assets risk contract credit to and exposure receivables maximum the period, reporting the of end the at As Exposure tocreditrisk,qualityandcollateral There are nosignificantchangesas compared to previous year. to enforcement activities. subject be still could off written are that assets contract and receivables write-off. trade Nevertheless, the to subject amounts the repay to flows cash sufficient generate could that income of sources or assets have not does debtor the that determines Company the or Group the when off (either partially or full) when there is no realistic prospect of recovery.written are Thisassets is contractgenerally the case and receivablestrade impaired credit of amounts carrying gross The and contract assets are credit impaired. receivablestrade the of any whether assessesCompany the or Groupdate, reportingthe At each certain a over credit amount. requiring customers on performed are evaluations credit Normally, basis. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing Risk managementobjectives,policiesandprocessesformanagingtherisk Trade receivablesandcontractassets as changes significant no arecompared to priorperiods. There subsidiaries. to advances and customers from receivables its from principally arises risk credit to exposureCompany’s The customers. from receivables its instrument toafinancial or counterparty a customer if failscontractualtoits meet Theobligations. Group’s exposure tofrom creditprincipally arises risk loss financial a of risk the is risk Credit Credit risk Net gainsandlossesarisingfromfinancialinstruments Financial liabilitiesat amortisedcost Financial assets at amortisedcost Net (losses)/gainson: Market risk Liquidity risk Credit risk Group (22,853) (11,588) (11,265) RM’000 2019 (22,488) (13,509) (8,979) RM’000 2018 Company (59,663) (60,113) RM’000 (450) 2019 RM’000 (491) (249) 242 2018 23. 23.4 Financial instruments(cont’d)

b) a) debt recovery process isasfollows: recovertoactions) overdueGroup’s legal long Theto balances. limited not but (including actions In managing credit risk of trade receivables, the Group manages its debtors and takes appropriate Recognition andmeasurementofimpairmentlosses Trade receivablesandcontractassets(cont’d) Credit risk(cont’d) risk nature. trade for ECLs havesimilar toexpected are they and as together grouped are risk which assetscontract receivables and credit to exposure the about information provides table following The on based individually progress claimssubmitted. project each of assets contract of recoverability the assessed Group The information andpast trend ofpayments. financial their on based individually customerscertain of loss of risk the assessed also Group The over theexpected lives ofthereceivables. conditions economic of viewGroup’s the (c) and conditions current (b) collected, been has data also Group The years. two past considers differences the between over (a) economic conditions experience during the period over loss which the historical credit actual on based are rates Loss receivable a of probability historical loss experiences. the on the for adjusted based and due past days method 90 to rate’delinquency of stages successive ‘rollthrough progressing a using calculated are rates Loss after due past are which contractual credit term invoices for more than90days willbeconsidered process, ascredit impaired. recovery debt the with Consistent segments. all for The Group uses an allowance matrix to measure expected credit losses (“ECLs”) of trade receivables legal proceeding against thecustomer. If there is any indication that the past due debts are uncollectible, the Group will commence a a initiate to teams; and start will Group the term, credit structured contractual debt recovery process after which is monitored by due the project management and finance past days 90 Above financial statements Notes tothe 111 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 112 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 23. 23.4 Financial instruments(cont’d) financial statements Notes tothe Recognition andmeasurementofimpairmentlosses(cont’d) Trade receivablesandcontractassets(cont’d) Credit risk(cont’d) Contract assets 1 –30days past due Current (notpast due) 2018 Company Contract assets Trade receivables Trade receivables 1 –30days past due Individually impaired More than90days past due Credit impaired 61 –90days past due 31 –60days past due Current (notpast due) 2018 Group Contract assets Trade receivables More than90days past due Credit impaired Current (notpast due) 2019 Company Contract assets Trade receivables Individually impaired More than90days past due Credit impaired 61 –90days past due 31 –60days past due 1 –30days past due Current (notpast due) 2019 Group Gross carryingamount 85,303 2,699 878 150,064 164 128,055 111,000 1,052 1,935 2,813 2,813 2,761 114 178,271 343,030 343,030 RM’000 328,335 328,335 225,932 164,497 132,032 221,770 178,533 19,996 97,102 1,280 1,942 1,942 1,520 1,284 1,685 1,193 662 422 (70,248) (25,979) (3,040) (724) (92,111) (96,227) (96,227) RM’000 (16,255) (14,164) (244) (17,315) (17,315) (1,060) (2,010) (1,076) (53) (1,141) (284) (739) (55) (93) (25) ECL ------Net balance 808 2,699 2,706 878 82,263 18,889 79,816 1,935 2,813 2,813 152,292 127,331 111 RM’000 130,956 163,437 232,108 232,108 224,791 162,278 325,715 325,715 221,031 82,938 114 17,986 1,280 1,942 1,942 1,520 1,401 1,168 1,191 662 422 23.

23.4 Financial instruments(cont’d) of RM2,590,000 (2018: RM450,000). losses impairment allowancerecognisedfor has Group the period, reporting the of end the at As carrying amountsinthestatement offinancialposition. As at the endofthereporting period, themaximumexposure to credit riskisrepresented by their to advances The project. each of completion suppliers are unsecured, interest free andwillbe offsetagainst future upon purchases. received be will deposits These to paid creditors. advances and deposits project from arising mainly are receivables other on risks Credit Other receivables material andhence, itisnotprovided for. the Group. Consequently, the Group and the Company are of the to grantedview facilities that credit the the loss forcollateralallowance as is used not are and agencies governmentby insured are These banks and financial institutions have low credit risks. In addition, some of the bank balances the statement offinancialposition. reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the of end the at As institutions. financial and banks with held areequivalents cash and cash The Cash andcashequivalents losses. As at the end of the reporting period, the Company did not recognise any allowance for impairment Company during theyear are shown below. The movements in the allowance for impairment in respect of trade receivables and contract assets Recognition andmeasurementofimpairmentlosses(cont’d) Trade receivablesandcontractassets(cont’d) Credit risk(cont’d) Balance at31December2019 Net remeasurement ofECL Balance at1January2018 Group 1January2019 Balance at31December2018/ Reclassification to credit impaired Net remeasurement ofECL Tradereceivables Lifetime RM’000 4,116 965 (3,172) 3,151 6,323 financial statements ECL - impaired RM’000 13,104 21,863 8,759 Credit 8,868 1,064 3,172 Notes tothe Contract RM’000 70,248 69,188 1,060 assets 1,060 - - RM’000 96,227 17,315 78,912 9,928 Total 7,387 - 113 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 114 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 23. 23.4 Financial instruments(cont’d)

financial statements Notes tothe • • • subsidiary’s orultimate holdingcompany’s advance to becredit impaired when: a consider Company the and Group The demanded. when pay to able not are company holding ultimate or subsidiaries the when default in advancesbe tothe Companyconsider the and Group position financial timingof the company’s todetermine holding able are payments ultimate of the subsidiaries’ and theultimate Company holding or company’s and advances when they subsidiary’s are Group payable, the the a As significantly. deteriorates when significant risk a is credit there that in assume Company increase the and Group The risk. credit low holding have ultimate company and subsidiaries to advances consider Company the and Group the Generally, credit other any Recognition andmeasurementofimpairmentlosses by supported nor collateral any by secured enhancements. not are provided Advances carrying amountsinthestatement offinancialposition. As at theendofreporting period,themaximumexposure to credit riskisrepresented by their Exposure tocreditrisk,qualityandcollateral company regularly. holding ultimate company. and The Group and subsidiaries the Company monitor to the results advancesof the subsidiaries unsecuredand ultimate provideholding Company the and Group The Risk managementobjectives,policiesandprocessesformanagingtherisk Inter-company advances Credit risk(cont’d) and ultimate holdingcompany’s advances. The following table provides information about the exposure to credit risk and ECLs for subsidiaries’ using internal information available. advancesindividually these for default of probability the determineCompany the and Group The Credit impaired Low credit risk Company 2019 shareholders’ fund. The subsidiary or ultimate holding company is continuously loss making and is having a deficit The subsidiary’s or ultimate holding company’s advance is overdue for more than 365 days; or in full; Company the advancetorepay its tounlikely is company holding ultimate or subsidiary The carrying RM’000 amount 102,435 98,556 Gross 3,879 Impairment allowance (59,798) (59,798) RM’000 loss - RM’000 balance 42,637 38,758 3,879 Net 23. 23.5 23.4 Financial instruments(cont’d) initiatives. those of implementation successful the on dependent highly is obligations its meet to Group the fall due. The Group has embarked on fund raising initiatives as disclosed in Note 1(b). The ability of This may cast significant doubt on the ability of the Group to meet its obligations as and when they As of 31 December 2019, the Group’s current liabilities exceeded its current assets by RM21,635,000. borrowings. and loans payables, various its from principally arises risk liquidity to exposureGroup’s The due. they as obligations financial fall its tomeet able be Groupnot the will that risk the is risk Liquidity Liquidity risk associated loss allowances, ifany, were notmaterial. The financial guarantees have not (2018: been recognised since the RM51,507,000 fair value on initial recognition and the to amounts outstanding and Company creditors the subsidiaries’ banking facilities ofthesubsidiariesasat theendofreporting period. to of given risk guarantees the credit representing RM85,967,000) to exposure maximum The Exposure tocreditrisk,qualityandcollateral and repayments madeby thesubsidiary. subsidiary the of results the basis ongoing an facilities on monitorssubsidiary. Company Thea ofbanking togranted inrespect to banks guarantees financial unsecured provides Company The Risk managementobjectives,policiesandprocessesformanagingtherisk Financial guarantees inter- company advances.of respect in recognised impairment for allowance no was there 2018, December 31 at As subsidiary whichiscontinuously loss makingandishaving adeficitinshareholder’s fund. The significant increase in net measurement of loss allowance of the Company is primarily due to a h mvmn i te loac fr maret n epc o sbiire’ n utmt holding ultimate company’s advances and duringtheyear isasfollows: subsidiaries’ of respect in impairment for allowance the in movement The Recognition andmeasurementofimpairmentlosses(cont’d) Inter-company advances(cont’d) Credit risk(cont’d) Balance at 31December 2019 Net remeasurement ofloss allowance Balance at 1January2019 Company financial statements Notes tothe impaired (59,798) (59,798) RM’000 Credit - 115 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 116 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD

23. Financial instruments (cont’d)

23.5 Liquidity risk (cont’d) financial statements Notes tothe

Maturity analysis

The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the reporting period based on undiscounted contractual payments:

Carrying Contractual Contractual Under 1 1 - 2 2 - 5 More than amount interest rate cash flows year years years 5 years Group RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000 2019 Non-derivative financial liabilities Secured term loans 3,825 3.47 - 7.57 4,581 2,049 195 585 1,752 Secured bank overdrafts 23,138 3.50 - 7.40 23,138 23,138 - - - Secured bankers’ acceptances/ trust receipts 1,849 8.20 - 8.45 2,007 2,007 - - - Lease liabilities 16,807 2.37 - 5.00 17,950 9,072 7,993 885 - Secured factoring facility 3,340 8.20 3,612 3,612 - - - Trade and other payables 223,107 - 223,107 223,107 - - - 272,066 274,395 262,985 8,188 1,470 1,752 2018, restated Non-derivative financial liabilities Secured term loans 5,844 4.62 - 8.82 8,227 707 707 2,120 4,693 Secured bank overdrafts 36,259 7.04 - 8.65 36,259 36,259 - - - Secured bankers’ acceptances/ trust receipts 12,208 4.12 - 8.45 13,240 13,240 - - - Finance lease liabilities 30,665 2.37 - 4.55 33,455 14,962 13,662 4,831 - Secured factoring facility 5,754 8.45 6,240 6,240 - - - Trade and other payables 185,159 - 185,159 185,159 - - - 275,889 282,580 256,567 14,369 6,951 4,693 23. 23.6 23.5 Financial instruments(cont’d) 23.6.1 the in amounts carrying the by statement offinancialposition. The investments represented are unsecured. is risk price to exposure maximum The securities. As at the end of the reporting period, the Group and the Company have only invested in domestic Exposure tocreditrisk,qualityandcollateral that have counterparties arating equalto orbetter thantheGroup. with securities liquid and membership club in only allowed are Investments Risk managementobjectives,policiesandprocessesformanagingtherisk Investments and otherprices that willaffect theGroup’s financialpositionorcashflows. foreignexchangeas market such prices,in rates,changes that interestrisk the ratesis Marketrisk Market risk Maturity analysis(cont’d) Liquidity risk(cont’d) Financial guarantees Trade andotherpayables Non-derivative financialliabilities 2019 Company Financial guarantees Trade andotherpayables Secured bankoverdrafts Non-derivative financialliabilities 2018, restated

rate borrowings. floating and fixed of mix a maintaining by exposurerate interest its manages Group The Risk managementobjectives,policiesandprocesses formanaging therisk short term receivables andpayables are notsignificantly exposed to interest rate risk. interest in changes flows and rates. Investmentsto cash securities due in equity change in of risk a Group’sinterestratetoexposedborrowingsrates.variable Theare in changes to due value fair their in change of risk a to exposed are borrowings rate fixed Group’s The Interest raterisk Carrying RM’000 5,242 amount 5,242 10,226 6,968 3,258 - - financial statements interest rate Contractual 8.65 % - - - - Notes tothe Contractual cash flows 56,749 51,507 RM’000 5,242 85,967 96,193 6,968 3,258 56,749 RM’000 51,507 Under 1 5,242 85,967 96,193 6,968 3,258 year 117 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 118 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 23. 23.7 23.6 Financial instruments(cont’d) financial statements Notes tothe these financialinstruments. term borrowings reasonably approximate their fair values due to the relatively short term nature of The carrying amounts of cash and cash equivalents, short term receivables and payables and short Fair valueinformation 23.6.1 Market risk(cont’d) This analysis assumes that allothervariables remained constant.shown below. the amounts by loss period or reporting profit the post-tax of increased/(decreased) haveend would the at rates interest in (“bp”) points basis 100 of change A Cash flowsensitivityanalysisforvariablerateinstruments would notaffect profit or loss. through profit or loss. Therefore, a value change in fair interest at liabilities rate and at the assets end of financial the rate fixed reporting period any for account not does Group The Fair valuesensitivityanalysisforfixedrateinstruments Interest raterisksensitivityanalysis financial instruments, based on carrying amounts as at the end of the reportingperiod ofthe end the were:at as interest-bearing amounts oncarrying significant the Company’s based and instruments, financial Group’s the of profile rate interest The Exposure tointerestraterisk Interest raterisk(cont’d) Floating rate instruments Company Financial liabilities Floating rateinstruments Floating rate instruments Group Financial liabilities Financial assets Fixed rateinstruments Group (26,963) increase RM’000 RM’000 (21,996) 100 bp (205) 27,991 2019 2019 - decrease (48,627) RM’000 RM’000 (42,103) Profitor(loss) 100 bp 36,853 2019 2018 205 - Company increase RM’000 RM’000 100 bp (320) 2019 2018 (53) - - - decrease RM’000 RM’000 (6,968) 100 bp 7,700 2018 2018 320 53 - 23. Financial instruments (cont’d)

23.7 Fair value information (cont’d)

The table below analyses financial instruments carried at fair value and those not carried at fair value for which fair value is disclosed, together with their fair values and carrying amounts shown in the statement of financial position.

Fair value of financial instruments Fair value of financial instruments not Total fair Carrying carried at fair value carried at fair value value amount Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 2019 Financial assets Quoted shares 4 - - 4 - - - - 4 4 Financial liabilities Secured term loans ------(3,814) (3,814) (3,814) (3,825) 2018 Financial assets Quoted shares 4 - - 4 - - - - 4 4 Club memberships - 222 - 222 - - - - 222 222 4 222 - 226 - - - - 226 226

Financial liabilities financial statements Secured term loans ------(5,829) (5,829) (5,829) (5,844) Finance lease liabilities ------(30,660) (30,660) (30,660) (30,665) ------(36,489) (36,489) (36,489) (36,509) Notes tothe 119 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 120 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 23.

23.7 Financial instruments(cont’d) financial statements Notes tothe instruments. The management has overall responsibility for overseeing all significant fair value fair significant measurements, includingLevel 3fair values. all overseeing for responsibility overall has management The financial of instruments. values fair of measurement the of respect in flows cash discounted uses Group The Valuation processesappliedbytheGroupforLevel3fairvalue Financial instrumentsnotcarriedatfairvalue Level 3,aswell asthekey unobservable inputsusedinthevaluation models. fairvaluesdeterminationwithin Thefollowingof showsthe valuationtable in the techniquesused Level 3fair value isestimated usingunobservable inputsfor thefinancialassets andliabilities. Level 3fairvalue no transfer ineitherdirections). (2018: year financial the during values fair 2 and 1 Level between transfer no been has There Transfers betweenLevel1and2fairvalues reporting period. futureinterestand principal flows,cash discounted market the at rate interest of the of end the at Fair value, which is determined for disclosure purposes, is calculated based on the present value of Non-derivative financialliabilities observable for thefinancialassets orfinancialliabilities,eitherdirectly orindirectly. Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are Level 2fairvalue assets orliabilitiesthat theentitycanaccess at themeasurement date. Levelfair1 value derivedis from quoted price (unadjusted) activein markets for financial identical Level 1fairvalue Fair valueinformation(cont’d) andsecured term loans Finance leaseliabilities Type ofborrowings oftherespective Group entitiesat thereporting date. Discounted cashflows usinga rate basedonthecurrent market rate Description ofvaluationtechniqueandinputsused 24.

Contingencies (b) (a) Litigation -Banks for facilities granted to subsidiaries -Subsidiaries’ creditors Guarantees given to: Guarantees Company contract due to allegeddelay incompleting theProject. 11 March 2018, the 1st Defendant called upon the bond based on purported termination of the main was issued by United Overseas Bank (M) Bhd. (“2nd Defendant”) for an amount of RM1,428,740. On IJSB provided a performance bond to the 1st Defendant on behalf of the Plaintiff wherein the bond Menyiapkan Kuala Membina, Project to IkhmasJaya Sdn.Bhd. (“IJSB”)asthesub-contractor. Redang, Pulau “Merekabentuk, di the awarded turn as Milik in has Plaintiff Mampu the RM27.975and known at million Pangsa valued Project”) Terengganu” (“the Rumah project Tingkat) (5 Sdn. a Unit Jitu 160 for Tunjang Menyelenggara dan to contract awarded a has (“Plaintiff”) Defendant”) (“1st Bhd. Terengganu Kuala Negeri Kerajaan The Tunjang JituSdn.Bhd.vs Kerajaan NegeriKuala Terengganu &United Overseas Bank(M)Bhd. is notapartyto theagreement. is a nominated Plaintiff the coordinatorworks.a IJSB as the as for acts IJSB sub-contractorand Defendant1st byappointedthe results financial Group’s the impact not does case litigation The Sum ofRM1,425,215.51isstill owing to thePlaintiffby the1st Defendant. the 1st Defendant that onlytheremaining balanceof theJudgement out of RM158,405.34 amount At the date of these financial statements, IJSB was made to understand by the Plaintiff’s lawyer and 4) RM308,405.17 -onorbefore 15.9.2017. 3) RM308,405.17 -onorbefore 15.8.2017; and 2) RM308,405.17 -onorbefore 15.7.2017; 1) RM500,000.00 -onorbefore 27.6.2017; 1st Defendant isto pay thePlaintiffanamounttotalling RM1,425,215.51by instalments asfollows:- On 31 May 2017, all parties under the Court action had recorded a Consent Judgement wherein the on 29June2016. parties same the between held discussion a following sum outstanding the of payment direct for A collateral agreement dated 29 June 2016 was signed between the Plaintiff and the 1st Defendant the owner oftheProject. Damai off Jalan Ampang, Kuala Lumpur, Wilayah Persekutuan Project”). (“the The 1st Defendant is Jalan 88 Seksyen 83, Lot at works”) (“the apartments service of units 150 for cabinets kitchen of has installation contractor, IJSB and supply,delivery main the for Sub-Contractor the Nominated the as as Plaintiff IJSB the appointed by issued 2014 December 8 dated Award of Letter a By (“the RM1,261,303.14 the of payment as outstanding sum”). outstanding Bhd. for Defendant Sdn. 2nd Suppliers the as & IJSB Design by and D.J. initiated Defendant 1st against was Claim Plaintiff”) of (“the Statement Bhd. and Writ Sdn. of Cabinet way Signature by action Court a 2016, December 1 On Signature Cabinet Sdn. Bhd. vs D.J. Design & Suppliers Sdn. Bhd. & Ikhmas Jaya Sdn. Bhd. (“IJSB”) financial statements Notes tothe RM’000 51,507 32,170 19,337 2019 RM’000 85,967 34,678 51,289 2018 121 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 122 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 24. (b) Litigation (cont’d) Contingencies (CONT’D) (c) financial statements Notes tothe • • • • Following theaforesaid, theCourt ofAppealhadinstructed thepartiesto filethe following: claim. Hearingfor the amendedapplication hadbeenfixed on28January2019. Plaintiff had filedanapplication withsupportingaffidavit The toamendthewritofsummonsand statement of 2018. December 10 on fixed been had Appeal Injunction the for management Case in theCourt ofAppeal. Defendant is restricted in its 1st claim Order.on The the performanceInjunction Erinfordbond secured for by application IJSB until Plaintiff’s the case the is allowedheard had Appeal of Court The inter-parte of hearing. way by disposal pending 2018 September 12 on Order Injunction Erinford interim atthe Order Injunction an Erinford ofobtaining Court purpose of Appeal in lieu of the dismissal the by the learned Kuala Terengganu for High filed Court judge to grant was Motion of Notice A the 2nd Defendant from releasing the Performance Bond to the 1st Defendant is no longer in place. High Court (“the Court”) decided in favour of the 1st Defendant. Hence, the court injunction to stop on 21 March 2018 and the inter-parte hearing was held on 31 July 2018 where the Kuala Terengganu the 1st Defendant until the disposal of the above action. An ex-parte injunction had been obtained injunction to prohibit the 1st Defendant from calling and 2nd Defendant from releasing the bond to wherein the former is claiming for among others, outstanding sum Defendantfor 1st works the performedagainst and action also legal an a initiate to solicitors appointed had IJSB and Plaintiff The Bhd. (M) (cont’d) Bank Overseas United Terengganu & Kuala Negeri Kerajaan vs Bhd. Sdn. Jitu Tunjang owed by IJSB,oncondition that itdoes notexceed RM5millionandissubject to annualrenewal. IJSB, by payable monies all pay to liable including is interest and and costs Plaintiff incurred by the the Plaintiff to in guaranteeacquiring judgment for a the providedremaining monies has IJGB RM3,180,452.78. is sum principal outstanding The 2018. April 6 on paid RM500,000 from apart sum principal the deliveredand sold concretehad readyfailedtomix settle ThePlaintiff had IJSB materialstoIJSB. “The Defendants”). Sdn. Bhd. (“The 1st Defendant”) and Ikhmas Jaya Group Berhad (“TheJaya Ikhmas 2nd Plaintiff”), (“The Defendant”) Bhd. Sdn. (CollectivelyConcrete(M) Cemix betweenWrit Court High Alam Shah (“IJGB”) Berhad GroupJaya Ikhmas and (“IJSB”) Bhd. Sdn. Jaya Ikhmas vs Bhd. Sdn. (M) ConcreteCemix place until14July2020. in still is Erinford 2020. Injunction The July 14 fixed on has Appeal of Court2020.The June 30 on WrittenSubmission to reply and 2020 June 15 on Bundle CoreCommon and ExecutiveSummary Authorities, of Bundle Submission, Written file to parties the instructed had Appeal of Court The from 26May 2019 to 29May 2019. Hearingofthecasewas thenadjournedto 15July 2019. fixedbeen trial Marchhad for 2019.The28 case took place on management case Thesubsequent Common Core Bundle. Executive Summary;and Bundle ofAuthorities; Written Submissions; 24. (e) (d) (c) Litigation (cont’d) Contingencies (CONT’D) Purchase Orders, Delivery Orders, Tax2018, InvoiceFebruary andSalesInvoices.1 dated Arrangement of Statement the in contained conditions and terms the subject to and days 120 of term credit maximum a on or days 60 a on time to time from materials deliveragreedand varioustohad tosupply IJSB, construction Plaintiff At the request IJSB, the of Defendant”) 2nd (“The Berhad Group Jaya Ikhmas (Collectively and “The Defendants”). Defendant”) 1st (“The Bhd. Sdn. Jaya Ikhmas Plaintiff”), (“The Bhd. Sdn. Unitrade LogamSyarikat between Writ Court High Alam Shah Group Jaya Ikhmas and (“IJSB”) Berhad (“IJGB”) Bhd. Sdn. Jaya Ikhmas vs Bhd. Sdn. Unitrade Logam Syarikat The casehasbeen fixed for CaseManagementon8July2020. foran the Defendant against suit legal additional claimofRM2,942,704 inaseparatea caseasinstructed fresh by theCourt. filed had solicitors IJSB’s 2020, February 18 On their filing of midst in RM13,325,867 of sum defense. the for IJSB against works of completion in and delay works defect for claim counter of suit fresh filed had Defendant the 2019, November 14 On the sumofRM11,641,061 onthe samedate. on20 casemanagement for Defendant for the against Judgement fixed recordedConsent had Court beenHigh the and had November2019 outstanding It the done. being work Bhd. contractual certified Sdn. the of (KL) balance Development ASM from RM14,583,765 (“the claiming Bhd. is IJSB Sdn. (KL) Development ASM against (“SoC”) Claim Defendant”). of Statement and (“Writ”)Summons of Writ the of copy sealed a served 2018 August 15 on had solicitors its through IJSB Ikhmas Jaya Sdn.Bhd.(“IJSB”)vs ASM Development (KL)Sdn.Bhd. The liabilityhasbeenaccrued for inthefinancial statements. RM1,066,694 to besettledinduecourse. RM3,266,694 and out of this sum, RM2,200,000 had been paid thus leaving a remaining for balance concluded of been had settlement court of out the statements, financial these of date the at As to of Discontinuance a Notice Court High the to filed withdraw theWrit andSoCserved 2018 ontheDefendants. June 4 on had Plaintiff the which, following and arrangement settlement amicable an reached had Plaintiff the and Defendants The of RM3,180,452.78, interest, costs andotherreliefs. (“SoC”) dated 4 May 2018 by the solicitors of the Plaintiff. The Plaintiff is claiming the principal sum On 18 May 2018, IJSB and IJGB had been served a Writ of Summons (“Writ”) and Statement of Claim up to thedate offullsettlement. 2018 May 1 from accrue to continue interestwill this RM96,233.16and to amounted 2018 April 30 of interestaccruedTheas settlement. full of date the to up termcredit expiry of of date the from Pursuant to a Credit Application dated 21 June 2012, IJSB is liable to pay interest at 1.5% per month (“IJGB”) (cont’d) Berhad GroupJaya Ikhmas and (“IJSB”) Bhd. Sdn. Jaya Ikhmas vs Bhd. Sdn. (M) ConcreteCemix financial statements Notes tothe 123 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 124 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 24. (f) (e) Litigation (cont’d) Contingencies (CONT’D) financial statements Notes tothe The liabilityhasbeenaccrued for in thefinancial statements. cost of RM4,000 on13January2020. with IJSBwillpropose for asettlementarrangement.recorded been has and Order and Judgment Summary for application an filed has Plaintiff the principalsumandRM130,919 beinginterest) calculated asat 5September 2019. RM2,172,376of (RM2,041,457being sum the for Defendants the from payment seeking is Plaintiff The Plaintiff. the by incurred losses and interest including goods the of purchase the for IJSB by owing amount the all guarantee to 2016 May 17 dated Guarantee of Letter a executed had IJGB the Agreement. deliveredrequesthad agreedin the and IJSB attotoout termssell of pursuant set to IJSB goods By an application to open a trading account dated 25 August 2014 (“the Agreement”), the Plaintiff the Plaintiff. of Claim (“SoC”) dated 24 September 2019 and 25 September 2019 respectively by the solicitors of On 27 September 2019, IJSB and IJGB had been served a Writ of Summons (“Writ”) and Statement (Collectively “The Defendants”). Ikhmas Jaya Sdn. Plaintiff”), Bhd. (“The(“The 1st Bhd. Defendant”) and Sdn. Ikhmas (Malaysia) JayaConcrete LafargeGroup betweenBerhad Writ(“The 2nd Court Defendant”) High Lumpur Kuala Berhad (“IJGB”) GroupJaya Ikhmas and (“IJSB”) Bhd. Sdn. Jaya Ikhmas vs Bhd. Sdn. Concrete(Malaysia)Lafarge The liabilityhasbeenaccrued for inthefinancial statements. 2020 andadjourned thecaseto 2July2020 to record Consent Judgment. Both parties have agreed to record Consent Judgment. The Court has vacated the date of 24 June The Court hasfixed thedate for Hearingofapplication for SummaryJudgmenton 24 June2020. owing by IJSBto thePlaintiffin aggregate limitupto RM10million. IJGB had provided a Corporate Guarantee dated 1 January 2019 to guarantee the amount due and manner asstated intheSettlementAgreement B. B”) Agreementlatethe Octoberamountedpaymentin 2019to31 RM10,939,431 chargessettled at be as shall and (“Settlement 2019 November 22 dated entered into between the AgreementPlaintiff and IJSB, IJSB agreed that Settlement the total outstanding sum inclusive of a to Pursuant the in settled be shall RM24,027,392 and manner asstated intheSettlementAgreement to A. amounted 2018 August 31 at as charges payment late of inclusive sum outstanding total the that agreed IJSB IJSB, and Plaintiff the between into AgreementA”)(“Settlement 2018 OctoberAgreement 15 entereddatedSettlement a to Pursuant of Claim(“SoC”)dated 3September 2019 by thesolicitors ofthePlaintiff. On 5 September 2019, IJSB and IJGB had been served a Writ of Summons (“Writ”) and Statement Group Jaya Ikhmas and (“IJSB”) Berhad (“IJGB”)(cont’d) Bhd. Sdn. Jaya Ikhmas vs Bhd. Sdn. Unitrade Logam Syarikat 24. (g) Litigation (cont’d) Contingencies (CONT’D) (h) • charges asdetailedbelow: and May 2019 to 2019 July March 2019 to amounting 2019 to January RM2,082,298 from together period with the the fordividend contributionsand lateunpaid paymentthe pay to failed had IJSB that fact the to due was IJSB against SoC and Writ the of filing the to circumstancesleading The 1991 andisresponsible for makingmonthlycontribution ofitsemployees to thePlaintiff. EmployeesAct Provident Fund the of 2 Section under registereddefined employerthe as is IJSB Claim of Statement and (“Writ”) Summons of Writ a (“SoC”) dated 17March 2020 by thesolicitors ofthePlaintiff. served been had IJSB 2020, April 13 On (“The Pekerja Defendants”). Zhen (“the Simpanan Wang Kumpulan WeiAng and Siong Lembaga Cheng Ang Lout, Mun Siew Sen, Ping Khoo Bhd., JayaSdn. betweenIkhmas Plaintiff”), Writ Court High Lumpur Kuala Siew MunLout, AngChengSiongandWei Zhen Sen, Ping Khoo (“IJSB”), Bhd. Sdn. Jaya Ikhmas vs Pekerja Simpanan WangKumpulan Lembaga • • Ping Sen(“4th Defendant”). Plaintiff”), (“the Bhd. Sdn. Construction Metro Ikhmas Jaya Sdn. Bhd., Ikhmas Jaya Group Berhad, Ang Cheng Siong (“3rd Ilham Defendant”) and Khoo between Suit Civil Court High Alam Shah (“IJGB”), AngChengSiong andKhooPingSen MetroIlham Construction vsBhd. Sdn. JayaIkhmas JayaIkhmas (“IJSB”), Bhd. Sdn. Group Berhad The liabilityhasbeen accrued for inthefinancial statements. The casehasbeen fixed for casemanagementon18 August 2020. instalments. As at the date of these financial statements, IJSB is negotiating with the Plaintiff for settlement via (ii) (i) 2019 andMay 2019 to July2019 together withthefollowing: - March to 2019 January from period the for contributions unpaid for RM2,082,298 of sum A Other relief theCourt deemsfitsandproper. The cost ofthisaction;and

d. the next late payment charge to be declared by the Plaintiff for each subsequent year c. 6.00% perannumcalculated from 22February 2020 onwards; and b. 6.90%per annumcalculated from 16February 2019 until21February 2020; a. 7.40% perannumcalculated from 16January2019 until15February 2019; to 2019 January period March 2019 andMay 2019 to the July2019 at thefollowing rates: - for arrears in contribution monthly EPF of payment Late the until year subsequent each for Plaintiff the by declared be to dividend next the b. a. 5.00% perannumcalculated from 01 February 2019 until31December 2019; and the period January 2019 to March 2019 and May 2019 to July 2019 at the following rates: - for arrears in contribution monthly (“EPF”) Fund ProvidentEmployees the on Dividends until thedate offullsettlement. date offullsettlement; financial statements Notes tothe 125 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 126 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 24. (i) (h) Litigation (cont’d) Contingencies (CONT’D) financial statements Notes tothe n 0 a 22, JB a be sre a rt f umn (Wi” ad ttmn o Claim of Statement and (“Writ”) Summons of Writ (“SoC”) bothdated 13May 2020 by a thesolicitors of thePlaintiff. served been had IJGB 2020, May 20 On Defendant”). Berhad (“the JayaIkhmas and Group Plaintiff”) (“the WritBhd. Court Sdn. High betweenEffortStar Alam Shah Star Effort Sdn.Bhd. vs IkhmasJaya Group Berhad(“IJGB”) The liabilityhasbeen accrued for inthefinancial statements. The casehasbeen fixed for casemanagementon16July2020. per annumonRM1,125,000 beingtheamount onthefirst, second, third, fourth andfifthcheques. 5% of rate the at indorsers as Defendant, 4th and Defendant 3rd the against drawerand against as IJSB, 1949 Act Exchange of Bills the of 57(a) Section to pursuant interest claims Plaintiff The the toPlaintiff. owing and due sums all pay to refused and/or neglected failed, has However,IJGB Sum. The Plaintiff had further through its solicitor issued a letter of demand to IJGB for the Balance Loan 4th and countermanded allthecheques. Defendant 3rd the by signed are by cheques drawn said Defendant. However, the cheques into the and post-datedfirst, second, entered Plaintiff third, fourth six and the fifth cheques and were deposited of dishonoured favour as IJGB had had settlement in IJSB IJGB out-of-court end, amicable this To an Agreement. reached Settlement a IJSB and IJGB Plaintiff, The for therecovery oftheBalance Loan Sumtogether withcost andinterest onthejudgementsum. Sum”). The Plaintiff commenced an action against IJGB vide Civil Suit No. BA22NCvC-431-10/2019 of Loan totalling RM1,350,000 remains outstanding and payable to the Plaintiff (“the Balance Loan IJGB had made part payment totalling RM150,000 towards the repayment of the Loan. The balance Loan”). its submitting and preparing tender of for the Project, purposes the Plaintiff the had agreed For to Project. grant a the friendly loan of of RM1,500,000 completion to IJGB and (“the execution the The Plaintiff and IJSB had formed an unincorporated joint venture for the sole purpose of undertaking 2018 awarded theProject to IJGBasthemaincontractor. TenderAcceptanceApril of of 9 Letter dated the via had MalaysiaSaliran dan Pengairan Jabatan to carryouttheworks undertheProject intheevent that IJGBisawarded theProject. venturejoint a forming subcontractorby a as Project”), (“the Kerja-kerjaBerkaitan Serta struktur Tebatan Rancangan Struktur- dan Choras/SungaiSala as Sungai Menaiktaraf Aman: knownDarul Kedah Pendang, Sungai project Banjir proposed a in participate to invited been have IJSB and The Plaintiff, IJGB and IJSB had entered into a Memorandum of Understanding wherein the Plaintiff both dated 8May 2020 by thesolicitors ofthePlaintiff. On 14 May 2020, IJGB had been served a Writ of Summons (“Writ”) and Statement of Claim (“SoC”) (“IJGB”), AngChengSiongandKhooPingSen(cont’d) MetroIlham Construction vsBhd. Sdn. JayaIkhmas JayaIkhmas (“IJSB”), Bhd. Sdn. Group Berhad 24. (i) Litigation (cont’d) Contingencies (CONT’D)

(ix) (viii) (vii) (vi) (v) (iv) (iii) (ii) (i) In thesaidWrit andSoC,thePlaintiffisclaimingfor:- obligation underthecontract. anytheir observing and of performing in reason Contractor the by of part Plaintiff the on breach the or default by omission, act, incurred or suffered expenses and costs damages, losses, all the against demand on full guaranteedin Plaintiff the indemnify toagreed further contract.Defendant Thethe of and Plaintiff the of favour performancepunctual Advanceand guaranteedIJSB’sthe due wellrepaymentas Payments of as in guarantees corporate executed Defendant The practicalcompletion untildate ofsettlement. of Lending date the Base from calculated Maybank is which of debts outstanding rate this on the payable is at 1% plus interest Rate and RM18,340,319 is payable LAD total the and (“LAD”) Damages Ascertained and Liquidatedpaythereforeto is obliged IJSB byIJSB. 2) (Phase works of parts remaining the and 1) (Phase works of section the of completion the in delaywere accordingly,Worksdateand completionContactcomplete tothe failedthe within had IJSB there certified from deductions by effected payments dueto IJSB. was interests and Payments Advance the of repayment repayHowever,toAdvance annum. the per rateinterestPayments8.5% the with of at partial only agreed IJSB (“AdvancedPayments”). RM9,832,398.84 of sum total a advanced had and directly IJSB’snominatedsub-contractorsub-contractorspaid their Plaintiff or the IJSB, requestAtof the Kuala Lumpur(“Contract Works”)”. Tanahsebahagian dan Talalla,361Kerajaan,360, Jalan 358, LotBandar Seksyen69,atas di Servis Pangsapuri unit) (357Tingkat 9-15 building Blok 2 the Kediaman Pembangunan for “Cadangan as works known project and services owned the wholly complete a and construct (“IJSB”), perform, to Bhd. IJGB Sdn. of Jaya subsidiary Ikhmas appointed Plaintiff the 2016, August 4 dated quantities) PAM(with and Contract2006 2015Award December of Letter18 dated a to Pursuant Star Effort Sdn.Bhd.vs IkhmasJaya Group Berhad(“IJGB”)(cont’d) been fixed for casemanagementon 6July2020. As at the date of these financial statements, the Group has appointed solicitors and the matter has Any othersuchrelief andotherrelief astheHonourable Court deemsfitand proper. Costs; and February 2020 untildate ofsettlement; Interest on RM1,668,612 at the rate of Maybank Base Lending Rate plus 1% calculated from 20 RM1,668,612 beingthecosts ofremedial works asat 20February 2020; date ofpractical completion (3July2019) untildate ofsettlement; Interest on RM14,415,791 at the rate of Maybank Base Lending Rate plus 1% calculated from the of RM14,415,791 beingthebalance LADfor thedelay payments/release inthecompletion oftheContract Works; early the for certified sums; charges interest/administrative the being RM279,491 from 1February 2020 untildate offullpayment; RM8,705,656 on annum per 8.5% of rate a January at thereafter continuing 31 and RM966,769 is at 2020 as which Payments Advance outstanding the on feeInterest/administrative RM8,705,656 beingthebalance outstanding Advance Payments; financial statements Notes tothe 127 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 128 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 24. (j) Litigation (cont’d) Contingencies (CONT’D) (k)

financial statements Notes tothe (v) (iv) (iii) (ii) (i) the following: of Claim (“SoC”) dated 30 November 2018 by the solicitors of the Plaintiff. The Plaintiff is claiming Statement(“Writ”)and WritSummons served a of been had IJGB and IJSB 2018,December 4 On owed by IJSB,oncondition that itdoesnotexceed RM5millionandissubjectto annualrenewal. IJSB, by payable monies all pay to liable including is interest and and costs incurred Plaintiff by the the Plaintiff to in acquiring guarantee judgment for a the providedremaining monies has IJGB RM2,346,942 andagreed interest ofRM627,153of sum totalling RM2,974,095.principal the settle to failed had IJSB IJSB. to goods delivered and sold had Plaintiff The Defendants”).“The (Collectively Defendant”) 2nd (“The Berhad Group Jaya lkhmas and Defendant”) 1st (“The Bhd. Sdn. Jaya lkhmas Plaintiff”), (“The Berhad lpmuda between Suit Civil Court High Alam Shah Ipmuda Berhadvs Ikhmas Jaya Sdn.Bhd.(“IJSB”)andIkhmasJaya Group Berhad(“IJGB”) (iv) (iii) (ii) (i) Originating the of copy sealed The Plaintiffisclaimingthefollowing: Plaintiff”). (“the a served been Bhd. Sdn. had (M) Sunway Geotechnics of solicitors the by Court) High Defendant”) Alam Shah in (filed Summons (“the IJSB 2019, March 1 On Sunway Geotechnics (M)Sdn.Bhd. vs IkhmasJaya Sdn.Bhd.(“IJSB”) The liabilityhasbeen accrued for inthefinancial statements. appropriate which failing service,action willbetaken for thewindingupofDefendants. of date the from days 21 within 2019 July 19 dated Judgment Court High the to pursuant Plaintiff the to due RM2,982,095 of cost and sum judgment the from The Notice requires the Defendants to pay the balance owing judgment sum and cost of RM2,582,095 (a) and/or (b) oftheCompanies Act, 2016 served by thesolicitors ofthePlaintiff. On 3 June 2020, the Defendants received a Statutory Notice of Demand pursuant to Section 466(1) to fileafresh on 24 October 2019. the liberty Plaintiff.withdrawnwith Defendantsagainsthas Petition WindingPlaintiff up Thus,the the to RM2,982,095 of sum settlement the for arrangement made have Defendants the 2019, In for anoutofcourt settlement withtheDeedofSettlement to befinalisedsoon. for the case management to be deferred to 7 May 2019 as both parties are in the midst of working The matter is fixed for case management on 26 March 2019. Both Plaintiff and Defendant requested All orders asmay bedetermined by theCourt. Legal costs ofRM150,000 orothercourt costs; and Interest rate of 5% per annum from the Judgment date and the The principalsumofRM2,346,942andagreed interestCourt ofRM627,153;Order until full settlement; alternative forms; orderAn Defendantspayimmediatethe tothat Plaintiff amounting RM2,974,095the cash or administrative cost taxed at RM61,289. Centre’sArbitrationInternational Asian as well as expense and feeAdjudicator’s of cost Full Party andpartycosts ofthisclaimRM45,000; and Pre-decision interest ofRM104,494; tax underthesubcontract; forbalanceRM492,132workPaymentsum forRM8,202,206and principal done of forservice 24. (l) IkhmasJaya Sdn.Bhd.(“IJSB”)vs MRCBBuilders Sdn.Bhd.(“MRCB”)andAmbank(M)Berhad (k) Litigation (cont’d) Contingencies (CONT’D) The Court fixed thehearingdate for theinter-parte injunctionapplication on 21 August 2020. final the until Award of Letter the to disposal oftheSuit. pursuant IJSB by made was which 2018 August 13 dated GuaranteeBank No.the Defendant,T01718IBG1037911from1stDefendant releasing tothe 2nd the for injunctions to restrain the 1st Defendant from receiving from the 2nd Defendant and to restrain sought also IJSB Suit, the In IJSB. by done works construction for payment of balance the being RM40,474,608of sum the Defendant 1st the against claiming was IJSB Court”). (“the Court High IJSB through its solicitors has on 21 May 2020 filed a suit against the Defendants at the Kuala Lumpur dated 17November 2015 for theProject. AwardLetterof MBSB/IJSB/86/1.2/444No.Refthe vide under obligations its of breach in is IJSB RM7,600,000that of claiming amount an for MRCB receivedfrom demand written a to pursuant GuaranteeBank the for Defendant 2nd fromthe Claim received2020,Mayof IJSB Notice 19 a On its breached had IJSB that alleging them to Guarantee Bank obligations under theLetter ofAward. IJSBstrictly deniestheallegation ofthe1st Defendant. the of release the demanding Defendant”) 2nd (“the Berhad (M) Ambank to letter a wrote Defendant 1st the 2020, May 14 On as LADimposedonIJSB.IJSBdidnotagree and objected to theLAD. certified the under interim made payment claims No.the that 35 IJSB amounted informed to had DefendantRM8,752,678 1st the as 2020, the May 1st 13 On Defendant had deducted RM13,800,000 haddeducted Defendant the 1st as not agree andobjected to theLAD. to RM3,295,344 RM28,530,000 34 amounted being the Liquidated and Ascertained Damages (“LAD”) imposed on IJSB. IJSB did No. Certificate Interim the Payment vide certified Claims the that IJSB informed had Defendant 1st the 2019, May 23 On Project”)”. IJSBprovided performance bondto the1st Defendant inthe form ofBankGuarantee. Petaling (“the Bhd. Bandar Sdn. Development 52, PJSentral Messrs Section for Ehsan Barat, Darul PersiaranSelangor District, 12, Petaling Jaya, Lot on (CUB) building utility central and car park basement of storey 4 level, service storey 1 (Tower 1), tower office block 1 (Tower2), tower storey office 25 office tower tower (Toweroffice block 1 block (Towerblock 1 1 (Tower , 6), , 5) 3) storeytoweroffice 27 block 1 of consisting 1F Phase & 1C Phase 1A, Phase Developmentof Mixed “Proposed as knowncontract a Plaintiff”) (“the IJSB awardedto has Defendant”) 1st (“the MRCB The liabilityhasbeenaccrued for inthefinancial statements. up ofIJSB. from the date of receipt of the Notice, failing which appropriate action will be taken for the winding Agreement dated 17 July 2019 and cost for repair Settlement of the RM237,221to pursuant RM4,620,785 of due amount tobalance the the pay Plaintiff to within IJSB requiressix Notice months The (e) andSection466(1)(a)oftheCompanies Act, 2016 served by thesolicitors ofthePlaintiff. 465(1) Section to pursuant Notice”) (“the Demand of Noticereceived 2020a June 5 on had IJSB by thePlaintiff. On 19 August 2019, both parties entered into a Deed of Settlement and the legal suit was withdrawn Sunway Geotechnics (M)Sdn.Bhd.vs IkhmasJaya Sdn.Bhd.(“IJSB”)(cont’d) financial statements Notes tothe 129 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 130 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 24. 25. (l) Litigation (cont’d) Contingencies (CONT’D)

of seniormanagementthe Group. members certain Group,and the Directorsof the indirectly. all include or personnel keyThemanagement directly either Group the of authority activities the having controlling and persons directing planning, those for responsibility as and defined personnel management key include also parties Related parties may beindividualsorotherentities. control.Relatedcommon to subject are party the and Company the or Group the where or versa,vice the partyorexercise significantinfluence over thepartyinmakingfinancialandoperating decisions,or ability,Companythe the has Groupor Company the if indirectly,directlyor tocontrolcontrol jointly or For the purposes of these financial statements, parties are considered to be related to the Group or the Identity ofrelatedparties Related parties financial statements Notes tothe (viii) (vii) (vi) (v) (iv) (iii) (ii) (i) In theSuit,IJSBwas claimingfor:- RM40,474,608 for theworks carriedoutby IJSB. of amount outstanding the demanding Defendant 1st the to letter a wrote IJSB 2020,May 20 On Project to bepaidby the1st Defendant amounted to RM40,474,608. the under IJSB by done worksfor payment of balance2020.The May 13 on issuedwas works the for Completion Practical of Certificate the and Project the under works the performed had IJSB Berhad (cont’d)(M) Ambank and (“MRCB”) Bhd. Sdn. Builders MRCB vs (“IJSB”) Bhd. Sdn. Jaya Ikhmas results for thefinancial year ending 31 December 2019. The Claim is not anticipated to have any significant financial and operational impact on the Group’s Any otherreliefs that thisHonourable Court deem fitandproper to grant. Costs shallbeborneby the1st Defendant inallcircumstances; and to orothers an return suchpayment to the 2ndDefendant within7days from agents thedate ofthisorder; Defendant, assists, 1st officers, directors, the and/or Defendant to 1st Defendant the against 2nd injunction the by made been has payment if Alternatively, RM7,600,000 untilthefinaldisposalofSuit; with or under the Bank Guarantee No: T01718IBG1037911 dated 13 August 2018 for the sum of to restrain them from paying to the 1st Defendant any money or sum of money in accordance others or agents assists, officers, and/ordirectors, Defendant 2nd the against injunction An by the2ndDefendant Bank infavour of the1st Defendant untilthefinal disposaloftheSuit; the under or with accordance in Defendant Guarantee No: 2nd T01718IBG1037911 dated 13 the August 2018 for the from sum of RM7,600,000.00 money issued of sum or money any procure to attempt or receive to attempt or procuring receiving, from them restrain to againstinjunction An 1stthe Defendant and/or directors,its officers, assists, others or agents was illegalandmaliciouslymadeand/or unjust and/or unreasonable; 2018 August 3 dated 01718IBG1037911 No. Guarantee Bank the of release the for 2020 May 14 dated letter a vide Defendant 2nd the to demand Defendant’s 1st the that declaration A of RM40,474,608 from thedate ofjudgementuntilfinalsettlement; The 1st Defendant shall pay IJSB interest at the rate of 5 per centum per annum over the sum The 1st Defendant shallpay IJSBthesumofRM40,474,608; 26. 25. There was nochangeintheGroup’s approach to capitalmanagement duringthefinancial year. The debt-to-equity ratios at 31December 2019 and31December 2018 were asfollows: optimal debt-to-equity ratio that complies with debtcovenants andregulatory requirement. to sustain future development of the business. The Directors monitor and are determined to maintain an Group’sthe ability to safeguardcontinue as a going concern,and so as to base maintain investors capital and creditorsstrong confidence and a maintain to is capital managing when objective Group’s The Capital management balances related to thebelow transactions are shown inNotes 11and15. below. shown are Company The the and Group the of transactions party related significant The terms. negotiated under business of course normal the in into entered been havetransactions party Related Significant relatedpartytransactions related subsidiaries, company, holding ultimate its with relationship companies andkey managementpersonnel. party related has Group The Identity ofrelatedparties(cont’d) Related parties(cont’d) Net debt-to-equity ratio Total equity Net debt Less: Cashandcashequivalents Lease liabilities Loans andborrowings D. C. B. A. - Remuneration - Othershort-term employee benefits - Fees Directors Key managementpersonnel Sales ofgoods Related companies Contract cost Subsidiary Advances received Ultimate holdingcompany Group (3,361) RM’000 3,017 2,412 441 164 2019 financial statements - - RM’000 (11,638) 2,984 2,412 708 Note 398 174 2018 14 12 Notes tothe - Company Group 0.74 (28,531) 20,428 RM’000 RM’000 32,152 480 27,651 16,807 285 164 2019 2019 114 758 - - 0.30 (37,852) RM’000 RM’000 175,552 52,878 90,730 480 12,116 786 132 174 2018 2018 - - - 131 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 132 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 28. 27. 29. 28.2 28.1 Significant events On 10October 2019, thejointoperation hasbeenmutuallyterminated by bothparties. is inMalaysia. Sdn. Bhd. (“IMC”) for the purpose of undertaking a new project. IJSB-IMC JV’s principal place of business The Group has a 50% ownership interest in a joint operation, IJSB-IMC JV with Ilham Metro Construction Interest inajointoperation 29.2 29.1 Subsequent events financial statements Notes tothe iii. ii. i. owned wholly subsidiary oftheCompany.a IJHSBhasagreed to: (“IJSB”), Bhd. Sdn. Jaya Ikhmas and (“IJHSB”) Bhd. company,Sdn. holding Holdings ultimate Jaya the Ikhmas between executed was waiver of deed a 2019, December 31 On Waiver ofdebtsbyultimateholdingcompany the Group hasfullyutilisedthe amountraised. the and private placementsMalaysia had raised Bursa RM9,145,000 forof working capital Marketpurposes. As at 31 Main December 2019, on respectively share per were RM0.215 and Placements RM0.21 ofat Private shares ordinary tranche new 23,000,000 second and 20,000,000 for and quotation and first of listing the the following 2019, completed August 1 and 2019 July 18 On the of shares issued of number total the Company andthisproposal of was approved by BursaMalaysia 10.0% on14May 2019. to up representing Company, the in shares ordinarynew 54,535,000 to up of placementprivate a undertake to proposedCompany the that On 30 April 2019, the Company announced to Bursa Malaysia Securities Berhad (“Bursa Malaysia”) Private placement transaction enabledtheGroup to access more capitalwhilecontinuing to use theoffice buildings. to amounting aconsideration the office buildings for a full period of 4 years after the rental-free period. This sale and lease back for buildings office period of 18 months which take effect upon completion of disposal and the Group shall lease its back sold Group the RM4,700,000 and leased the office buildings back for 5.5 years. 2020,The Group is granted a free rental January 6 On Sale andleasebackofofficebuildings each for aconsideration ofRM20,000. the disposal of its investment in Rekavista Sdn. Bhd., comprising 2,000,000 ordinary shares of RM1 On 16 January 2020, Ikhmas Jaya Sdn. Bhd., a wholly-owned subsidiary of the Company, completed Disposal ofasubsidiary from allclaimsanddemands whatsoever underorarisingfrom thesaidamount. and to pursuant undertakings and obligations liabilities, all from IJSB release and discharge undertake notto claimfrom IJSBfor thesaidamount;and waive RM2,500,000 outoftotal amountowing by IJSBto IJHSBofRM14,515,000; 29. 29.4 29.3 Subsequent events(cont’d)

c) b) a) Market Main the Listing Requirementsof (“SuspendedCriteria”) from 17April2020 to 30June2021 (“Relief Period”): PN17 under criteria following the of any to availabletriggers be that Issuer will Listed Measures Affected Relief PN17 that announced has Malaysia Bursa 2020, April 16 On Securities Malaysia Bursa of Requirements Listing Market Berhad (“BursaMalaysia”)andPN17ReliefMeasures Main the under (“PN17”) 17 Note Triggering criteria as an Affected Listed Issuer pursuant to Paragraph 2.1 (a) and (e) of Practice may arisefrom Covid-19. monitoring and managing the Group’s and the Company’s operations to minimise any impacts that to Company are activelyCompany the Covid-19 juncture. of Group and effect this The financial at estimatethe the and Group the for practicable not is it result, a As unpredictable. and evolving datefinancial the atstatementsthe As of are issuance, authorised for the Covid-19 is situation still carrying amountsreported for thefinancial reporting year ended31December 2019. the of end the 2019, December 31 at period. Accordingly, as existed the current that conditions arising from condition this outbreak do a not have not an impact on wasthe it as event The Group and the Company consider that the effects related to this outbreak to be a non-adjusting pandemic hasresulted indisruptionsto businesses andvarious macro-economic impacts. 2020 given the outbreak of the virus in countries across the world including Malaysia. The Covid-19 March in Organisation WorldHealth the by announcedcoronavirus (Covid-19)wasThe pandemic ImplicationofCovid-19totheGroup’sandCompany’sbusiness b) a) Under thePN17Relief Measures: (ii) (i) Relief period.The PN17criteria was triggered asaresult of: the during Criteria Suspended the triggered had it that announced Group the 2020, June 30 On and thelisted issuer isunableto provide asolvency declaration to theExchange. the case may be, as announced pursuant to paragraph 9.19A of the Main Listing Requirements company,associated major or as subsidiary issuer,listedmajor the byits payment in default share capital(excluding treasury shares); and its of less or 50% is basis consolidated a on equity shareholders’ its and statements financial audited latest its in a concern going expressed a as continue to or ability issuer’s listed concern the on qualification going to related uncertainty material a highlighted have auditors treasury shares) andsuchshareholders’ equityisless thanRM40million; (excludingcapital share its of less or 25% is basis consolidated a on equity shareholders’ its Market Listing Requirements (“said Announcement”); and condition and announce whether it continues to trigger any of the criteria in PN17 of the Main Groupre-assessAnnouncement,fromReliefthe will months the 12 its expirythe the of Upon for aperiodof12monthsfrom thedate oftriggeringthe criteria; the obligations pursuant to paragraph 8.04 and PN17 of the Main Market Listing Requirements The Group will not be classified as a PN17 listed issuer and will not be required to comply with 50% orless oftheissued andpaid-upcapital(excluding treasury shares). a Group is consolidated on the basis of shareholders’ equity the statementsfinancial and the in concern going as continue to ability Company’s the and Group’s the on concern going to the auditors have on its report dated 30 June 2020 highlighted a material uncertainty related and paid-upcapital(excluding treasury shares) andwas less thanRM40,000,000; and Groupshareholders’consolidatedthe the a of on equity issued wasits basis of 25% lessthan financial statements Notes tothe 133 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 134 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 29. 30. 29.4 Subsequent events(cont’d) 29.5

2019. a lease under MFRS 16 has been applied only to contracts entered into or changed on or after 1 January Determining whether an Arrangement contains a Lease were not reassessed. Therefore, the the definition of grandfather to expedient identified practical as leases. Contracts that were not identified as leases under MFRS 117 the and IC Interpretation 4, apply to elected werecontractspreviouslythatto only 16 MFRS applied GroupIt leases. aretransactions which of assessment the 16, MFRS to transition On Definition ofalease During theyear, theGroup and theCompany adopted MFRS16,Leases. Significant changesinaccountingpolicies financial statements Notes tothe c) Under thePN17Relief Measures (cont’d): Securities Malaysia Bursa of Requirements Listing Market Berhad (“BursaMalaysia”)andPN17ReliefMeasures(cont’d) Main the under (“PN17”) 17 Note Triggering criteria as an Affected Listed Issuer pursuant to Paragraph 2.1 (a) and (e) of Practice c) b) a) ofthesubscription date the from months (6) six agreements orsuchextended periodasthepartiesmay mutuallyagree inwriting: within fulfilled or satisfied being conditions subscription shares and the subscribers to subscribe for the same is conditional upon the following the Companyissueto the of obligationsThe cash. in million RM13 be sharesshall subscription the the of date subscription agreements.the The to aggregate prior issue priceCompany payable the by of the subscribers shares to ordinarythe Company the for of price average weighted volume at the issue price of RM0.056 for each subscription share to be issued, derived based on the 5-day On 25 June 2020, subscription agreements were signed between the Company and its subscribers Subscription agreement placed intheescrow account pursuantto the subscriptionagreements. As at date of the financial statements are authorised for issuance, RM 6.8 million was received and the saidAnnouncement. the obligation to submit a regularisation Listingplan to the relevant Market authorities within 12 months Main from the the all with of obligationscomply under must PN17 paragraph and 8.04 issuer listed and in PN17 PN17 of a criteria the Main as Marketclassified the Listing be Requirements, then of including will it any Requirement, trigger to continues Group the If havingagreements beenobtained. subscription the of terms the to pursuant shares subscription the of issue and authorities and/or any other third parties necessary or appropriate to carry out the allotment relevantother any of waivers or permits authorisations, approvals,consents, the required, If subscription shares ontheMainMarket ofBursaSecurities;and Bursa Malaysia Securities Berhad having granted approval for the listing and quotation of the manner the in contemplated underthesubscriptionagreements;only price issue an at subscriber the to shares subscription the of issue and The Company obtaining the approval of its shareholders at a general meeting for the allotment 30.

• • • • as operating leaseunderMFRS117: The Group used the following practical expedients when applying MFRS 16 to leases previously classified accrued leasepayments. assets are measured at anamountequalto theleaseliability, adjusted by theamountofany prepaid or incremental borrowing rate as at 1 January 2019. The weighted-average rate applied is 5%. Right-of-use lease liabilities 117, MFRS under lease operating weremeasured atpresent the value remainingthe of payments,lease as discounted atGroup the entities’ classified were that leases for 2019, January 1 At January 2019. Accordingly, thecomparative information presented for 2018 hasnotbeenrestated. 1 at recognised application initial of effect the with retrospective approach modified using 16 MFRS of Where the Group and the Company are a lessee, the Group and the Company applied the requirements As alessee Significant changesinaccountingpolicies(cont’d) 30.1 the leasedasset and leaseliabilityunderMFRS117immediately before that date. of amount carrying the as same are2019the determined toJanuary be 1 at liability lease the and asset For leases that were classified as finance lease under MFRS 117, the carrying amounts of the right-of-use sd idih we dtriig h lae em f h cnrc cnan otos o xed or extend to options contains contract terminate the thelease. if term lease the determining when hindsight used and excluded initial direct costs from measuring the right-of-use asset at the date of initial application; 12 monthsofleaseterm asat 1January2019; than less with leases for liabilities and assets recogniseright-of-use toexemption not the applied applied asinglediscount rate to aportfolio ofleaseswithsimilarcharacteristics; h floig al epan te ifrne ewe oeaig es cmimns disclosed position at 1January2019. commitments lease operating between differenceapplying MFRS 117 at 31 the December 2018, and explainslease liabilities recognised in the table statement of financial following The the priorperiodpresented. 2019,approachJanuary applicationat1 effectthereinitial the of with are adjustmentstono made Since the Group and the Company applied the requirements of MFRS 16 using modified retrospective Impacts onfinancialstatements Lease liabilitiesrecognised at 1January2019 31December 2018 Lease liabilitiespreviously classified ascancellable operating lease at Extension andtermination optionsreasonably certain to beexercised Recognition exemption for leasesoflow-value assets Recognition exemption for short-term leases Finance leaseliabilities recognised at 31December 2018 Discounted usingtheincremental borrowing rate at 1January2019 disclosedintheGroup’s consolidated financial statements Operating leasecommitments at 31December 2018 as financial statements Notes tothe RM’000 30,665 31,111 323 123 - - - - 135 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 136 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 31.

Statement offinancialposition reclassifications donothave any impactontheearningsofGroup andthe Company. comparativeCertain figures have current presentation. the been restatedThese year’s with conform to Comparative figures Statement ofcashflows Changes intrade andotherpayables Company Changes incontract liabilities Changes incontract liabilities Changes intrade andotherpayables Changes incontract assets Group 31 December2018 For theyearended Trade andotherpayables Company Contract liabilities Contract assets Group As at31December2018 Contract liabilities Trade andotherpayables financial statements Notes tothe As previously As previously (25,654) RM’000 RM’000 (215,118) (13,297) (4,041) 43,735 stated stated 13,383 - - - - reclassification reclassification Effect of Effect of (29,959) (15,000) (10,039) (10,039) RM’000 RM’000 (14,959) 29,959 15,000 10,039 10,039 14,959 As restated As restated (185,159) (14,080) (10,039) (10,654) RM’000 RM’000 (14,959) (16,576) (3,258) 28,735 10,039 14,959 to theCompany anditssubsidiariesfor thefinancial year ended31December 2019 are as follows:- The fee payables to the External Auditors, KPMG PLT in relation to the audit and non-audit services rendered Audit andNon-AuditFees As at 31December 2019, theproceeds from theabove private placements hadbeenfullyutilised. (ii) (i) During thefinancial year under review, the Company completed 2tranches ofprivate placement as follows:- Utilization ofProceedsfromPrivatePlacement Mandate duringthefinancial year. There were no recurrent related party transactions of a revenue or trading nature, which requires Shareholders’ Recurrent RelatedPartyTransactions or 2019 December 31 entered into since theendofprevious ended financial year. year financial the of end the at subsisting either interest shareholders’ major and directors’involving subsidiaries its and Company the by intoentered contracts material no wereThere Material Contracts * Audit fees Non-audit fees 30000 riay hrs t n su pie f M.10 e sae n Ags 21, raising 2019, August 2 on share per RM0.2150 of price raising issue RM4,945,000.00 for working capital. an 2019, at July shares 19 ordinary on 23,000,000 share per RM0.2100 of price issue an RM4,200,000.00 for working capital. at shares ordinary 20,000,000 of theStatement onRiskManagementandInternal Control. framework16 reviewMFRS Group,the wellof the as assessmentimplementationas fromof impact the Mainly consist of fees for the limited review for four quarterly reports and engagement in relation to the ADDITIONAL COMPLIANCE INFORMATION The Company RM’000 184 40 The Group RM’000 248* 220 137 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 138 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD

Land Date of

Approximate Area/ NBV as at acquisition (if PROPERTIES LIST OF Age of Built-up 31.12.2019 no revaluation is No. Location Description/ Existing Use Building Tenure Area (sqf) (RM) done)

1 No. 35, Jalan PJU 1A/41B, Pusat Dagangan NZX, Two (2) intermediate and 11 years Freehold 2,439/ 975,000 11 Oct 2009 Ara Jaya, PJU 1A, 47301 Petaling Jaya, Selangor one (1) corner adjoining 8,475 Darul Ehsan/ HSD 233616, Lot No. PT 33386, units of 3-storey terrace Mukim Damansara, District of Petaling and shop/ office with State of Selangor Darul Ehsan basement car park/Our Group’s head office

2 No. 37, Jalan PJU 1A/41B, Pusat Dagangan NZX, Two (2) intermediate and 11 years Freehold 1,800/ 784,400 11 July 2007 Ara Jaya, PJU 1A, 47301 Petaling Jaya, Selangor one (1) corner adjoining 5,938 Darul Ehsan/ HSD 233615, Lot No. PT 33385, units of 3-storey terrace Mukim Damansara, District of Petaling and shop/ office with State of Selangor Darul Ehsan basement car park/Our Group’s head office

3 No. 39, Jalan PJU 1A/41B, Pusat Dagangan NZX, Two (2) intermediate and 11 years Freehold 1,800/ 784,400 11 July 2007 Ara Jaya, PJU 1A, 47301 Petaling Jaya, Selangor one (1) corner adjoining 5,938 Darul Ehsan/ HSD 233614, Lot No. PT 33384, units of 3-storey terrace Mukim Damansara, District of Petaling and shop/ office with State of Selangor Darul Ehsan basement car park/Our Group’s head office

4* Lot 4907, Jalan Segenting, Batu 11, Kuala A parcel of industrial Not Freehold 275,340/ 2,159,873 27 Jan 2004 Langat, 42500 Teluk Panglima Garang, land/ Storage and applicable Not Selangor Darul Ehsan/ Geran Mukim 1622, maintenance area for applicable Lot 4907, Locality of Jalan Tanjong Duabelas, construction materials Mukim of Teluk Panglima Garang, District of and equipment Kuala Langat and State of Selangor Darul Ehsan Land Date of Approximate Area/ NBV as at acquisition (if Age of Built-up 31.12.2019 no revaluation is No. Location Description/ Existing Use Building Tenure Area (sqf) (RM) done)

5 No. 2, Jalan Kerayong 5, Taman Sri Kerayong, A corner single-storey 17 years Leasehold 3,025/ 14,934 31 July 1996 Off Jalan Kapar, 42200 Kapar, Selangor Darul terrace house/ Vacant 99 years 1,053 Ehsan/ PM 3742, Lot No. 31071, Seksyen 1, (expiring Locality of Kapar, Pekan Kapar, (formerly on known as HS(M) 16307, Lot No. PT 20591, 17.01.2094) Mukim of Kapar), District of Klang and State of Selangor Darul Ehsan

6 Unit No. 8-1, Type D2, Under GRN 12914, Lot Service apartment 4 years Freehold 1,215 1,454,871 28 May 2012 83, Seksyen 0088, Bandar and District of Kuala Lumpur, State of Wilayah Persekutuan.

7 Unit No. 9-1, Type D, Under GRN 12914, Lot 83, Service apartment 3 years Freehold 1,040 1,300,000 23 July 2013 Seksyen 0088, Bandar and District of Kuala Lumpur, State of Wilayah Persekutuan.

8 Unit No. 11-2, Under GRN 12914, Lot 83, Seksyen Service apartment 2 years Freehold 1,408 1,518,750 1 January 2018 0088, Bandar and District of Kuala Lumpur, State of Wilayah Persekutuan. PROPERTIES

9 Unit No. 13-9, Under GRN 12914, Lot 83, Service apartment 2 years Freehold 1,408 2,643,750 1 January 2018

Seksyen 0088, Bandar and District of Kuala LIST OF Lumpur, State of Wilayah Persekutuan. 139 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 140 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD

Land Date of

Approximate Area/ NBV as at acquisition (if PROPERTIES LIST OF Age of Built-up 31.12.2019 no revaluation is No. Location Description/ Existing Use Building Tenure Area (sqf) (RM) done)

10 Unit No. 13A-8, Under GRN 12914, Lot 83, Service apartment 2 years Freehold 1,408 1,437,500 1 January 2018 Seksyen 0088, Bandar and District of Kuala Lumpur, State of Wilayah Persekutuan.

11 Unit No. 15-8, Under GRN 12914, Lot 83, Service apartment 2 years Freehold 1,408 1,437,500 1 January 2018 Seksyen 0088, Bandar and District of Kuala Lumpur, State of Wilayah Persekutuan.

NOTE: * Our Planning Consultant, Jururancang Nazreeomar has on 30 March 2017 applied for an extension of the Development Order (“DO”) dated 16 March 2016 and the Majlis Daerah Kuala Langat (M DKL) has approved the extension of the DO until 6 June 2018 vide MDKL’s letter dated 7 June 2017. Our appointed Licensed Land Surveyor, has completed the survey and we are currently doing the necessary surrender of part of the land to Pejabat Tanah & Daerah Kuala Langat which is a condition imposed by MDKL when approving our DO. Upon completion of the surrender, we shall proceed with the application for Certificate of Completion and Compliance (“CCC”). A new planning consultant “Mesra Consult” has been appointed to apply for the extension of the DO which expired on 6 June 2018 for another 1 year in order to complete the application for CCC. The DO had been resubmitted by “Mesra Consult” and pending approval. (According to theRegister ofSubstantial Shareholders asat 2June 2020) SUBSTANTIAL SHAREHOLDERS’SHAREHOLDINGS Remark: * Issued share capital Voting Rights Class ofshares Total 29,417,500 andAbove (**) 100,001 to 29,417,499 (*) 10,001 –100,000 1,001 –10,000 100 –1,000 1 -99 Category 2. 1. 5. 4. 3. No. Dato AngChengSiong Ikhmas Jaya HoldingsSdnBhd Dato’ Ir. Dr. KhooPingSen Aura Perdana (Malaysia) SdnBhd Datin Kun Haw Choy Name ofSubstantialShareholder ** 5% andAbove ofIssued Holdings Less than5%ofIssued Holdings : : : ANALYSIS OFSHAREHOLDINGS 588,350,000 ordinary shares One vote pershare Ordinary shares 174,500,000 Holders 163,000 No. of Shares 1,927 No. of 4,137 1,331 307 567 4 Direct 1 - - - share capital % ofissued as at2June2020 100.00 46.58 29.66 32.17 0.02 0.03 13.71 7.42 0.10 % - - - 174,500,000 174,500,000 174,500,000 174,500,000 326,994,000 588,350,000 174,500,000 77,911,300 8,781,000 Holdings 163,578 No. of Shares No. of Indirect 122 (b) (a) (c) (c) - share capital % ofissued 100.00 29.66 29.66 29.66 29.66 29.66 55.58 13.24 0.00 0.03 1.49 % - 141 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD 142 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD (According to theRegister ofDirectors’ Shareholdings asat 2June2020) DIRECTORS’ SHAREHOLDINGS LIST OF30LARGESTSHAREHOLDERSASAT2JUNE2020 an interest. has Company the extent the to subsidiaries the of shares the interestedin deemed also are Sen Ping Khoo substantialintereststheir of Byvirtue sharesCompany,the the in of Dato’and Ir.Siong Dato’ Cheng Ang Dr. In thesubsidiaries (c) (b) (a) 1. 7. 6. 5. 4. 3. 2. No. No. 4 6 8 3 5 2 7 1 emd neetd y ite f t/i saeodns n kms aa odns d Bd usat to pursuant Bhd Sdn Holdings Jaya Section 8oftheAct. Ikhmas in shareholdings its/his of virtue by interested Deemed 8 oftheAct. Deemed interested by virtue of her shareholding in Aura Perdana (Malaysia) Sdn Bhd pursuant (Malaysia) SdnBhdpursuanttoto Section8oftheCompanies Act, 2016 (theAct). Section PerdanaAura and Bhd Sdn Holdings Jaya Ikhmas in shareholdings his of virtue interestedby Deemed Dato’ AngChengSiong Lim Kean Lam Leong Kah Mun Yong Kok Yee Siew MunLout Ang Wei Zhen Dato’ Ir. Dr. KhooPingSen Name ofDirectors as at2June2020 ANALYSIS OFSHAREHOLDINGS LEE CHOONHOOI Name ofShareholders IKHMAS JAYA FOR HOLDINGSSDNBHD(SMART) BERHAD (M) AMBANK - ACCOUNT SECURITIES PLEDGED AMSEC NOMINEES(TEMPATAN) SDNBHD WONG KOK LEONG DATIN SRIWONG PUIYOONG ONG TAO CHIEN DATO’ SRINGTECKLONG KHOO YOK KEE PLEDGED SECURITIESACCOUNT FOR CHOIAHLOY KENANGA NOMINEES(TEMPATAN) SDNBHD Direct 163,000 Shares No. of ------share capital % ofissued 0.03 ------174,500,000 174,500,000 Indirect 174,500,000 25,000,000 10,000,000 18,000,000 19,500,000 15,796,300 7,386,200 Holdings 7,187,100 Shares No. of (a) (c) - - - - - share capital 3.31 % ofissued 29.66 29.66 29.66 3.06 1.26 2.68 4.25 1.22 1.70 % - - - - - LIST OF30LARGESTSHAREHOLDERSASAT2JUNE2020(CONT’D) No. 30 20 29 26 24 28 25 23 22 27 10 14 19 16 18 13 15 12 21 17 11 9 PLEDGED SECURITIESACCOUNT FOR CHOIAHLOY RHB CAPITAL NOMINEES(TEMPATAN) SDNBHD Name ofShareholders LDE SCRTE ACUT O DNRT GOP SDN BHD GROUP DINERSTY FOR ACCOUNT SECURITIES PLEDGED MAYBANK NOMINEES(TEMPATAN) SDNBHD SEAH CHINLENG DINERSTY GROUPSDNBHD PLEDGED SECURITIESACCOUNT FOR TEEKIMHEW PUBLIC NOMINEES(TEMPATAN) SDNBHD ACCOUNT FOR ENGCHEWONG PUBLIC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES AFFIN HWANG INVESTMENT BANK BERHAD LEE ENGKEONG H’NG SWEE LENG NG CHEEHAO KHOO PINGKAW TONG THIANTIONG KANG TEEYONG @KANG KOK TEE PINTARAS BINASDNBHD KHAW TOAY HEE@KHOSHEUE CHAN POHCHENG NG CHOONKIAT CIMB BANKFOR SAM MUNLOONG CIMSEC NOMINEES(TEMPATAN) SDNBHD TAN SWEE HUANG FOO TIANLEE ACCOUNT FOR ABU SAHID BINMOHAMED SECURITIES PLEDGED BHD (TEMPATAN) SDN NOMINEES HLIB PLEDGED SECURITIESACCOUNT FOR FOO TIANGHOW AMSEC NOMINEES(TEMPATAN) SDNBHD ANALYSIS OFSHAREHOLDINGS as at2June2020 4,000,000 2,000,000 2,000,000 6,500,000 3,500.000 7,000,000 2,045,000 4,894,500 3,665,000 1,600.000 1,900,000 1,800,000 1,500,000 1,450,000 2,810,000 1,390,500 1,363,000 1,794,500 1,907,300 2,153,400 2,128,600 6,867,100 Holdings 0.37 0.48 0.34 0.34 0.83 0.36 0.59 0.24 0.35 0.23 0.32 0.32 0.25 0.25 0.68 0.27 0.62 0.31 0.31 1.10 1.19 1.17 % 143 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD This page has been intentionally left blank 145 ANNUAL REPORT 2019 | IKHMAS JAYA GROUP BERHAD