ABOUT THIS REPORT THE COVER DESIGN OF OUR 2019 ANNUAL REPORT “Moving Forward, Progressing namely, Property, Construction, Together” has been an ongoing Financial Services, Industries and theme that resonates with OSK Hospitality, with an added touch of Group, encapsulating our journey carefully curated gold specks to signify as we strive and progress together as continuous growth and success. a Group towards our vision of being a long-term business builder and The illustration also seamlessly delivering value to our stakeholders. transitions into the cover design of OSK Group’s 2019 Sustainability This year, the cover design of our annual Report, showcasing alignment of our report features a seamless overview core values and culture. of our fve core business segments, Our Annual Report is an important http://www.oskgroup.com/ Reporting Standards and Companies communication tool with our stakeholders, corporate-announcements/ Act 2016 in Malaysia. in which we showcase our fnancial and non-fnancial performance during and via press releases issued to the Our non-fnancial statements are 2019 including our achievements media. aligned to the reporting requirements and challenges faced in an open and of the Malaysian Code on Corporate transparent manner. The Group also Our fnancial statements are Governance and Bursa Malaysia’s disseminates information regularly independently audited by BDO PLT Main Market Listing Requirements. In via the quarterly fnancial results and Malaysia and have been prepared this report, the Group also adopted announcements made on Bursa Malaysia in accordance with the requirements certain principles and concepts under Securities Berhad’s (“Bursa Malaysia”) of Malaysian Financial Reporting the International Integrated Reporting website, which are also accessible Standards, International Financial Framework. through our website: FEATURES IN THIS ANNUAL REPORT CORPORATE INFORMATION ONLINE REPORT This icon indicates where more details can be accessed elsewhere in our Annual Report or Kindly scan the above QR code for Sustainability Report 2019. a direct link to our Annual Report 2019 online or log on to: For more information on OSK Group, please visit our corporate website: http://www.oskgroup.com/ corporate-announcements/ http://www.oskgroup.com/ This icon indicates where more details can be accessed online. INSIDE THIS REPORT 145 Notes to the Financial Statements: Our Our 145 General Information and Leaders’ Sustainability Basis for Preparation of Message Journey Financial Statements 145 Segment Information 155 Capital Management 156 Financial Risk 2 Chairman’s Statement 78 Sustainability Statement 6 Group Managing Director’s Management Review 164 Notes to Statements of Financial Position 259 Notes to Statements of Proft or Loss 273 Dividends Our 274 Related Party Disclosures Our Commitment 283 Commitments Performance to Governance 284 Contingent Assets and Liabilities 285 Signifcant Events and 30 Five-Year Group Financial 92 Corporate Governance Material Subsequent Summary Overview Statement Events 34 Statement of Value Added and 103 Audit Committee Report 285 Material Litigations Distribution 108 Statement on Risk Management 285 Financial Reporting 35 Key Financial Dates and Internal Control Standards 36 Investor Relations 112 Enterprise Risk Management 37 Share Price and Volume Traded Framework 116 Additional Disclosures Our Additional Our Profle Financials Information 40 About Us 120 Statement of Responsibility 292 List of Group’s Top Ten Properties 42 Corporate Information by Directors 293 Statement of Directors’ Interests 48 Corporate Structure 121 Directors’ Report 295 Statement of Shareholdings 50 Directors’ Profle 129 Statement by Directors 298 Statement of Warrant Holdings 58 Key Senior Management’s 129 Statutory Declaration Profle 130 Independent Auditors’ Report 134 Statements of Financial Position 136 Statements of Proft or Loss 137 Statements of Comprehensive Income 138 Statements of Changes in Equity Our Activities 141 Statements of Cash Flows 68 2019 Diary 74 In the News Our 01 02 03 04 05 06 07 08 Leaders’ Message CHAIRMAN’S STATEMENT Despite the continued challenging business environment, the Company and its subsidiaries (“the Group”) generated a total revenue of RM1,207.5 million, proft before tax (“PBT”) of RM470.5 million, proft after tax (“PAT”) of RM418.7 million, and proft attributable to Owners of RM412.0 million. For a detailed discussion on the Company’s business and fnancial performance, please refer to the Group Managing Director’s Review on pages 6-27 in this annual report. DIVIDEND Upon deliberation on the Company’s performance in FY2019, the Board has recommended a total single-tier dividend of 5.0 sen per share for the fnancial year, comprising a single-tier interim dividend of 2.0 sen per share paid on 3 October 2019; and a proposed single-tier fnal dividend of 3.0 sen per share. The proposed dividend is Tan Sri Ong Leong Huat subject to Shareholders’ approval at the @ Wong Joo Hwa upcoming Annual General Meeting. Executive Chairman For further information on the Group’s dividend track record, please refer to PERFORMANCE HIGHLIGHT page 31 in this Annual Report. Dear Valued The year 2019 was a challenging CORPORATE DEVELOPMENTS Shareholders, one as our core property markets in Malaysia and Australia continued to For the year under review, the remain lacklustre. Group’s core property development On behalf of the business performed well in spite of Board of Directors, it Fortunately, the Malaysian Government the challenging environment mainly is my great pleasure introduced several supportive measures, due to the successful marketing efforts and honour to present such as the Home Ownership Campaign by the team, and an effective cost to you OSK Holdings 2019, to help support the market. rationalisation approach taken by Berhad’s (“OSK” the property-construction partnership, or “the Company”) In Australia, a defnitive outcome from which we term internally as the Annual Report for the the general elections in 2019 coupled “Prop-Con” model. fnancial year ended with an accommodative monetary 31 December 2019 policy by the Reserve Bank of Australia (“FY2019”). helped the market to turn around after two very challenging years for the property market. OSK HOLDINGS BERHAD 199001015406 (207075-U) 2 ANNUAL REPORT 2019 Our 01 02 03 04 05 06 07 08 Leaders’ Message CHAIRMAN’S STATEMENT Revenue Proft Before Tax Proft Attributable to Owners RM1,207.5 million RM470.5 million RM412.0 million During the year, we have focused a In Malaysia, our newest development In our hospitality segment, we signed a lot of time and resources on clearing project, You City III, located in Cheras Branding and Management Agreement unsold properties. As a result of a series 9th mile, started construction in June with Hilton Worldwide on 26 June of successful marketing campaigns, 2019. The fnal phase of the You 2019 to operate and manage our we continue to retain only a minimal City development is a transit-oriented Swiss-Garden Beach Resort Damai Laut amount of unsold inventory, enabling us development with a direct link-bridge under the DoubleTree by Hilton brand. to sustain our strong balance sheet and to the Taman Suntex MRT Station to stay agile as new opportunities arise. offer residents good connectivity and Upon in the completion in 3rd quarter convenience. To add to the holistic living of 2020, the 295-room resort will be Over in Australia, the frst phase of proposition, the freehold development known as DoubleTree by Hilton Damai our Melbourne Square development also includes the Atria-managed You Laut Resort – the frst internationally in Southbank, Melbourne, is 77% City Retail, which provides one-stop branded resort managed by Hilton in complete, with progressive handover of convenience for residents and the public. Damai Laut, Perak. I am confdent that completed units expected to commence this partnership will continue to enhance by early 2020. The retail podium is also Construction progress of both our “Ryan the value of our asset, while setting new reaching completion, while works for & Miho” development project in Petaling benchmarks of service excellence with the 3,700 square meter urban park has Jaya, Selangor, and “Iringan Bayu” the iconic Hilton brand. been completed. township project in Seremban, Negeri Sembilan, went smoothly and are During the year, we have also commenced currently at various stages of completion. expansion of capacity at Olympic Cable Company’s Melaka factory. We expect I am proud that we delivered on the new capacity to come on stream by our promise of quality products the 3rd quarter of 2020. and services to our customers with three of our projects being awarded Our investment in RHB Bank continues commendable Quality Assessment to deliver value to our shareholders as System in Construction (“QLASSIC”) the investment generated dividends scores in 2019. In addition to both the of RM107.1 million to OSK Group “Luminari” project in Butterworth and the (including capital distribution from “Windmill Upon Hills” project in Genting liquidation of RHB Capital Berhad) . The Permai achieving a QLASSIC score of capital fnancing business in OSK Group 80%, “Luminari” was also handed over has also grown signifcantly, with our ahead of schedule by 10 months, while portfolio growing to RM777.2 million. “Windmill Upon Hills” was completed 3.5 months ahead of schedule. Our In all that we do, we remain cognisant “TimurBay” project in Kuantan also of our vision to be a business builder