MAH SING GROUP BERHAD Registration No.: 199101019838 (230149-P) No.: Registration CENTRAL REGION (HQ) +603 9221 6888 / 1-300-80-6888 NORTHERN REGION +604 6288 188 • PENANG SOUTHERN REGION +607 3554 888 • JOHOR EAST MALAYSIA +6088 278 688 • SABAH www.mahsing.com.my INTEGRATED ANNUAL REPORT 2020 REPORT ANNUAL INTEGRATED INSIDE THIS REPORT COVER RATIONALE OUR BUSINESS 02 06 07 08 10 11 About This Corporate Our Vision. Corporate Corporate Corporate Report Information Our Mission Milestones Profile Structure OUR INTEGRATED REPORTING JOURNEY 24 25 27 30 32 33 Our Approach Our External Our Business Property Building Homes, Plastics to Value Environment Strengths Value Chain Creating Values, Manufacturing Creation Empowering Value Chain Households OUR SUSTAINABILITY OUR CORPORATE STATEMENT GOVERNANCE 81 88 92 112 130 131 Profile Of The Profile Of Our Sustainability Corporate Directors’ Responsibility Additional Board Of Directors Senior Statement Governance Statement in Respect Compliance Management Overview Statement of the Preparation of Information Team the Annual Audited Financial Statements 154 156 160 163 263 264 Statements of Statements of Statements of Notes to the Statement by Declaration by the Financial Position Changes in Cash Flows Financial Directors Officer Primarily Equity Statements Responsible for the Financial Management of the Company The year 2020 saw the world impacted by the COVID-19 pandemic, The above business strategies and developments are anchored by as almost all businesses worldwide were disrupted by lockdowns, a driving passion and commitment to sustainability; an increased industry shutdowns, restricted movement orders and other focus on environmental, social and governance performance as developments amidst a new normal scenario. well as the importance of improving non-financial performance in tandem with revenues and profits. However, drawing from its inherent business strengths and diversified business structure, Mah Sing has risen to the occasion This year’s integrated annual report cover features a grid pattern to reflect resilience and strong fundamentals as well as continued showcasing Mah Sing’s business innovation strategies in exploring progress and growth. new business opportunities and enhancing our existing projects. The grid also highlights the diversity of our business output which Through innovation, proactive market-oriented strategies and by now includes glove manufacturing, as Mah Sing continues to deliver remaining adaptive to market forces, Mah Sing has grown from sustainable value creation. strength to strength to now stand on the verge of greater growth. 12 13 15 17 18 20 Group Five- Statement of Value Investor Awards and Snapshots in Mah Sing in The Year Financial Added Distribution & Relations Recognition 2020 News Highlights Simplified Financial Statement OUR STRATEGY & OUR ACHIEVEMENTS LEADERSHIP 34 38 42 46 68 80 Risks and Strategic Priorities Value Creation Management Key Board Mitigation and Future Model Discussion Developments Composition Strategies Orientation And Analysis FINANCIAL STATEMENTS 132 135 141 147 152 153 Statement on Risk Audit Committee Directors’ Report Independent Statements of Statements of Management Report Auditors’ Report Profit or Loss Other and Internal Control Comprehensive Income ADDITIONAL INFORMATION NOTICES 265 270 273 278 278 279 Properties Owned Statistics of Notice of Twenty- Notice of Dividend Statement Administrative By The Group Shareholdings Ninth Annual Entitlement Accompanying Guide for the General Meeting and Payment Notice of Annual Twenty-Ninth General Annual General Meeting Meeting Proxy Form 02 MAH SING GROUP BERHAD ABOUT THIS REPORT INTRODUCTION CONTENT DESCRIPTION ICON Mah Sing Group Berhad (“Mah Sing” or “the Group”) has ELEMENT for financial year ended 31 December 2020, adopted the internationally recognised best practice, integrated reporting External The various trends and developments (“<IR>”) framework. The decision to adopt <IR> is in line with the Environment arising from the macro-operating Group’s aspirations to provide more strategic reporting, beyond environment and how these may impact financial performance. the availability of capitals, internal business processes and value creation The objective of embarking on <IR> is to showcase the Group’s capabilities. value creation capabilities over the short, medium and long-term perspectives, as well as the resilience and future readiness of the Business Outlines how Mah Sing’s inherent Group in facing an increasingly dynamic and challenging macro- Strengths competencies, capabilities and operating environment. competitive advantages support the business model and the dynamic, In realising the aforementioned, Mah Sing has aligned its adoption interconnected relationship between with the recommended principles based <IR> framework of the the external operating environment, business strengths, business strategies International Integrated Reporting Council (“IIRC”). and the business model. MATERIALITY APPROACH TO REPORT CONTENT Industry Provides information on how Mah Sing’s In selecting relevant content for the FY2020 report, Mah Sing Value business divisions consume resources has adopted the following materiality criteria for its inaugural Chains and produce outputs. This includes integrated annual report (“IAR”). disclosures on key business processes and how external and internal factors may influence business processes. • Information that is pertinent to the Group’s resources (capitals) • Information that is pertinent to the business operations (which includes the respective value chains of the Property and Risks and The interaction between the external Plastics Divisions) Mitigation and internal environment and ensuing • Information that is pertinent to outputs and outcomes created Strategies impacts on the organisation enables (financial and non-financial values) the identification of risk factors and opportunities. Further, beyond mitigation measures, risks are also The aforementioned criteria have been applied to Mah Sing’s considered in terms of implications on business operations, activities, processes and employees, which business strategies going forward. includes the Group’s applicable subsidiaries. Unless otherwise indicated, the content for this report reflects data and activities of the Group from 1 January to 31 December 2020 (“FY2020”). Value The provision of the value creation Creation model provides a visual diagram of how Model resources are consumed to drive value <IR> CONTENT ELEMENTS creation. Mah Sing FY2020 IAR incorporates the following content elements: Strategic Beyond providing the overall operating Priorities landscape for FY2021, this section also CONTENT and Future outlines what are the key strategic DESCRIPTION ICON ELEMENT Orientation priorities for Mah Sing going forward and how the Group intends to realise its future business plans. Approach A macro view of Mah Sing’s value to Value creation approach, its facilitating factors, Creation business operations and values created Performance Further information is provided on which are aligned to the United Nations the Group’s financial values within the Sustainable Development Goals (“UN Management Discussion and Analysis SDGs”). section of this annual report. INTEGRATED ANNUAL REPORT 2020 03 ABOUT THIS REPORT (CONT’D) APPLIED FRAMEWORKS CONTENT DESCRIPTION ICON ELEMENT Mah Sing FY2020 IAR has been developed in accordance with the following reporting frameworks: Sustainability A comprehensive account of the Performance Group’s environmental, social and • Main Market Listing Requirements of Bursa Securities Malaysia governance performance is provided Berhad in the standalone Sustainability Report • Integrated Reporting Principles Based Framework of the as well as the condensed Sustainability International Integrated Reporting Council Statement within the IAR 2020. • Global Reporting Initiative 2020 • Bursa Malaysia Sustainability Reporting Guide, 2nd Edition 2018 LIMITATIONS • FTSE4Good Index Disclosures (FTSE Russell’s ESG Data Model) • Malaysian Code on Corporate Governance The FY2020 report scope and boundary is also bound by existing • Companies Act 2016 data collection systems to collate reliable, meaningful and accurate • Malaysia Financial Reporting Standards information. Going forward, Mah Sing will endeavour to strengthen its data collection capabilities to enhance reporting disclosure and enrich FORWARD LOOKING STATEMENTS the quality of information provided. This report contains information on Mah Sing’s strategic priorities, RESOURCES OR CAPITALS CONSUMED anticipated risks and opportunities, industry outlook and the Group’s prospects. All information herewith was collated based on reasonable Mah Sing's FY2020 IAR provides comprehensive disclosure on the assumptions using existing forecast models and present market following capitals: conditions, which may change due to a wide range of factors that are beyond the Group’s control. Financial Capital As such, all forward looking statements are not conclusive. Actual Financial Capital comprises all financial assets such as cash, equity, plans and results may differ from those expressed in this report. assets, and operating revenue generated and deployed in our value Forward looking statements do not serve as guarantees of future creation activities. operational or financial results or any other kind of outcome. Such have not been reviewed or audited by an external auditor. Manufactured Capital Manufactured Capital comprises tangible