HSSEB AR19 Part 1.Pdf
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201501003232 (1128564-U) MALAYSIA’S ENGINEERING DNA Creating A Future of Infinite Possibilities ANNUAL REPORT 2019 WHAT’S ABOUT US 01 OUR COMMITMENT TO GOOD GOVERNANCE 05 1 Core Services 46 Corporate Governance Overview Statement 1 HEB at a Glance 58 Audit and Risk Management Committee Report 2 Mission Statement 61 Statement on Risk Management and Internal Control 3 About HEB 64 Additional Compliance Information 4 Our Story 7 Corporate Information 8 Corporate Structure FINANCIAL STATEMENTS 06 67 Directors’ Report 71 Statements of Financial Position OUR PERFORMANCE 02 73 Statements of Profit or Loss and Other Comprehensive 9 Financial Highlights Income 10 Chairman’s Statement 74 Statements of Changes in Equity 13 Management Discussion & Analysis 76 Statements of Cash Flows 78 Notes to the Financial Statements 142 Statement by Directors LEADERSHIP 03 142 Statutory Declaration 24 Board of Directors’ Profile 143 Independent Auditors’ Report 29 Senior Managements’ Profile SHAREHOLDERS’ INFORMATION 07 OUR COMMITMENT TO BUSINESS SUSTAINABILITY 04 148 Analysis of Securities 35 Sustainability Statement 154 GRI Content Index 156 Notice of Fifth Annual General Meeting Proxy Form Scan here to download our reports and other www.hssgroup.com.my documents. HSS ENGINEERS BERHAD About Us ANNUAL REPORT 2019 Core Services DELIVERING VALUE FOR our communities, clients and shareholders Engineering Design Building Information and Construction Modeling (“BIM”) Supervision Services Services Project Management Environmental Services Services heb at a glance TOTAL REVENUE order book 2019 2019 RM148.5 RM581.5 million million 2018 2018 RM189.7 RM546.1 million million 1 HSS ENGINEERS BERHAD About Us ANNUAL REPORT 2019 Mission Statement To maintain our position as Malaysia’s Leading Engineering Consultant providing world class expertise through 01 Sustainable Solutions 02 Innovative Technology Revolutionary Skills 03 And Services Ampang Line Extension Project - Pusat Bandar Puchong LRT station 2 HSS ENGINEERS BERHAD About Us ANNUAL REPORT 2019 About HEB HSS ENGINEERS BERHAD (HEB OR THE COMPANY) IS AN INVESTMENT HOLDING COMPANY WHICH WAS INCORPORATED ON 23 JANUARY 2015 UNDER THE COMPANIES ACT, 1965 AS A PRIVATE LIMITED COMPANY UNDER THE NAME OF HSS ENGINEERS SDN. BHD. BEFORE IT WAS CONVERTED INTO A PUBLIC LIMITED COMPANY. THE COMPANY ASSUMED ITS PRESENT NAME ON 31 MARCH 2015. HEB, through its subsidiaries (HEB Group or the Group) and associates, is principally involved in the provision of engineering and project management services including engineering design, construction supervision, project management, environmental services and building information modeling services. The Group has a total workforce of more than 1,000 staff, of which, more than half are engineers of various disciplines. With a combined experience of more than 80 years, the Group possesses longstanding experience in a wide array of sectors including urban infrastructure, transportation planning, roads and highways, railways and metro systems, water resources and supply, waste management, building and structures and power generation. As one of the leading and by far the largest listed engineering consultancy group in Malaysia, the Group is/has been involved in many notable large-scale projects including Iskandar Bus Rapid Transit, Northern Corridor Economic Region, MRT 1 & 2, Maju Expressway 2, West Coast Expressway, SUKE Expressway, Pahang - Selangor Raw Water Transfer, Development of Sungai Selangor Phase 1, 2 and 3, Sarawak Water Grid Study, Layang 2 and East Coast Rail Link. The Group now operates from 4 main offices, based in Kuala Lumpur (2 offices) and Penang in Malaysia as well as Chennai in India. 3 HSS ENGINEERS BERHAD About Us ANNUAL REPORT 2019 OUR STORY Co-Founder & Executive Vice Chairman TAN SRI IR. Kuna Sittampalam Industry experts only foresee improvement in DEAR ESTEEMED global economic activity in the second half of 2020, with a return to normalcy in 2021. The infrastructure space in the construction While the full impact of the pandemic has yet to be industry saw signs of recovery in the second half discerned, industry experts only foresee improvement in of 2019 following several announcements by the global economic activity in the second half of 2020, and Government to reinstate mega projects on an return to normalcy in 2021. optimized scale. On top of this, the Government also announced new projects deemed important Despite the restrictive conditions posed on various to the nation to be implemented to spur economic industries, we at HEB Group have not rested on our growth. laurels and worked hard to position ourselves favourably to catch the eventual economic climate improvement. However, the beginning of the year 2020 was mired in uncertainty as the spread of COVID-19 around the It is my privilege therefore to present you with the Annual world led to a near-complete standstill in economic Report of HEB Group for the year ended 31 December 2019 activity worldwide. (FY2019). 4 HSS ENGINEERS BERHAD About Us ANNUAL REPORT 2019 OUR STORY INCREASED CORPORATE The establishment of the Green Taskforce 227,800 tonnes of annual carbon dioxide GOVERNANCE within the Group a couple of years ago emissions, thus making this mass public As part of our commitment towards continues to play a pivotal role, as it transport project one of the largest green good corporate governance and highlights sustainability matters, with infrastructure in the country. ensuring compliance with applicable focus on greenhouse gas emissions, anti-corruption laws, we have embarked energy consumption, water consumption Aside from this, we are also looking on a journey to attain ISO 37001:2016 and waste management. The taskforce keenly into entering the Renewable Anti-Bribery Management System also provides suggestions on internal Energy space, and are exploring certification. policies for consideration, one of which opportunities to take up equity positions was successfully implemented in 2019, in long-term operations and maintenance The Group has held several talks the installation of energy-efficient projects. This will be in line with the including a group-level Integrity Day devices throughout our workspace, Government initiative to generate 20% and Anti- Bribery Campaign on 8 which instigated initial savings up to of the country’s power requirements October 2019, by both the Malaysian 15% to 20% in energy costs per month. from clean energy sources by 2025. Anti-Corruption Commission (MACC) and SIRIM QAS International Sdn. Additionally, we also capitalize on our Besides the environmental aspect, Bhd. (SIRIM) for the employees and advisory roles to clients by proposing another key sustainability agenda is management. innovative sustainable design solutions implementing effective risk management, for various projects. This highlights our which is critical for us to achieve our We are confident that demonstrating commitment to the national agenda business objectives and minimize conformity to an internationally-accepted of reducing 45% of carbon emission potential risk exposure. anti-bribery standard reinforces our firm intensity by 2030 as part of the 2015 stance of greater financial transparency Paris Agreement. In 2019, we incorporated the audit and disclosure of activities to current and findings from KPMG’s assessment potential business partners, investors, Our involvement as the Independent of the risk factors across all business and other stakeholders. Consultant Engineers for the KVMRT operations within the organization, Lines 1 and 2 underscores our pledge. whereby the heads of business units are SUSTAINABILITY AND RISK According to a United Nations study, held accountable and responsible for MANAGEMENT INITIATIVES the KVMRT Lines 1 and 2 will remove reporting the identification, evaluation, We at HEB are championing the 5.6 million km travelled on Kuala monitoring and implementation of the sustainability agenda as one of our Lumpur city roads by private vehicles. appropriate mitigation measures. We guiding ethos and social responsibility. This is equivalent to the elimination of will continue to carry out regular audits to ensure compliance with the internal control and governance processes. Sungai Buloh MRT Station - MRT Line 1 5 HSS ENGINEERS BERHAD About Us ANNUAL REPORT 2019 OUR STORY Alternative Water Supply to KLIA - Sungai Labu Off River Storage The areas on risk management and Aside from this, I am also honoured sustainability will be explained in detail that HEB Group was nominated in nine in the Statement on Risk Management categories for the 9th Malaysia Investor Our team involved in the Ampang Light and Internal Control and Sustainability Relations Awards. We are glad that Statement respectively in this Annual our efforts in engaging the investment Rapid Transit Extension Project has Report. community were appreciated. won the best “International Aside from this, our subsidiary SMHB APPRECIATION Projects Award” Engineering Sdn Bhd launched the While the external environment in 2020 at the Chartered Institution of Highways implementation of ISO 14001:2015 will remain challenging, we endeavor to and Transportation Awards Dinner. Environmental Management System and stay on course not only by enhancing ISO 45001:2018 Occupational Health our expertise, but also capitalizing on and Safety Management System in 2019, our strengths for upcoming projects and look to obtain the certifications from when conditions stabilize. SIRIM in the near future. I would like to extend my sincerest