ANNUAL REPORT 2017
REINVENT SPACES ENHANCE LIFE CONTENTS
Here at Mah Sing, we understand the importance of culture. We do not only build quality homes, we strive to build a holistic multi- generational community, be it at work or home.
As we move to the next chapter of our corporate growth, we want to do more. Now in everything Artist Impression of M Vertica, Cheras Bangsa Johor Festival at Meridin East, Johor we do, we want to first ‘enhance life‘. We care for the people, the environment and the world at large. OUR BUSINESS OUR STRATEGY & 4 Corporate Information ACHIEVEMENTS 22 Management Discussion and We want to set our own 5 Our Vision. Our Mission Analysis standards in the brick- 6 Corporate Profile 36 Review of Operations and-mortar ways of the 8 Corporate Milestones property industry. In 10 Reinventing Affordability OUR LEADERSHIP 2017, we introduced Arts 12 Corporate Structure 50 Profile of the Board of Directors & Lights to the public, an 13 Group 5-Year Financial Highlights 14 Awards and Recognition 60 Profile of the Senior Management exhibition that highlights Team one of our innovative 16 Snapshots In 2017 18 In The News initiatives that sets us OUR SOCIAL RESPONSIBILITY apart from the industry 64 Sustainability Report norm. 2018 promises to be a bigger year. Here’s to reinventing spaces and enhancing lives. Mah Sing and Kampung Chempaka volunteers Mah Sing Foundation contributes RM200k to cleaning up Sang Chan Wan’s house compound Daybreak Society M Aruna, Rawang
OUR CORPORATE FINANCIAL ADDITIONAL GOVERNANCE STATEMENTS INFORMATION 112 Corporate Governance 138 Directors’ Report 268 Properties Owned By The Group Overview Statement 145 Independent Auditors’ Report 273 Statistics of Shareholdings 128 Directors’ Responsibility Statement 149 Statements of Profit or Loss 276 Statistics of Warrant C Holdings in Respect of the Preparation 150 Statements of Profit or Loss and of the Annual Audited Financial Other Comprehensive Income NOTICES Statements 151 Statements of Financial Position 279 Notice of Twenty-Sixth Annual 129 Additional Compliance Information 153 Consolidated Statement of General Meeting 130 Statement on Risk Management and Changes in Equity 284 Notice of Dividend Entitlement Internal Control 155 Company Statement of Changes and Payment 133 Audit Committee Report in Equity 284 Statement Accompanying Notice of 157 Statements of Cash Flows Annual General Meeting 161 Notes to the Financial Statements 266 Statement by Directors Proxy Form 267 Declaration by the Officer Primarily Responsible for the Financial Management of the Company OUR BUSINESS
Crafting homes for over 24 years
TOTAL PROJECTS 47 Klang Valley 33
Iskandar Johor 7
Penang 6
Sabah 1 03
Our Business Mah Sing Group Berhad
M Vertica in Cheras and M Centura in Sentul which which Sentul Cheras and M Centura in in M Vertica strategy to focus on will spearhead the Group’s The RM500,000. below priced homes afordable be developed will land in Bukit Mertajam, Penang park which will adopt Mah industrial into M-Parc concept. award winning iParc Sing’s acquisitions land more eye on an Sing has Mah in 2018, particularly in Greater KL and will look to increase its Greater KL portfolio to 75% (currently within the next at 66%) of its total remaining GDV 2 years. Mah Sing has been crafting homes for Malaysians Mah Sing has been crafting homes for projects in for over 24 years and currently has 47 is one of property hotspots. The Group Malaysia’s residential, the few fully integrated developers with commercial and industrial portfolios. lands, 2 in 2017 saw Mah Sing acquire 3 new The and 1 in Bukit Mertajam, Penang. Klang Valley will be developed into two lands in Klang Valley 04
Annual Report 2017 Our Business Leong HoyKum Alternate DirectortoTan SriDato’ Sri JANE LEONGJHENG-YI Independent Non-Executive Director ABD MALIKBINARAHMAN Independent Non-Executive Director LOH KOK LEONG Independent Non-Executive Director BIN ABD. RANI(R) CAPTAIN IZAHAM Executive Director DATUK LEONGYUETMEI Executive Director DATO’ STEVEN NGPOHSENG Chief Executive Officer DATUK HOHONSANG Independent Non-Executive Director NORMA BINTIYAAKOB TAN SRIDATO’ SERISITI Group ChiefExecutive Group ManagingDirector/ LEONG HOY KUM TAN SRIDATO’ SRI Independent Non-Executive Director Chairman/ BIN MAT ZAIN(R) JEN. TAN SRIYAACOB BOARD OFDIRECTORS INFORMATION CORPORATE f t 57100 Kuala Lumpur No. 163,JalanSungaiBesi Wisma MahSing Penthouse Suite1 REGISTERED OFFICE f t 59200 Kuala Lumpur No. 8,Jalan Kerinchi Bangsar South Vertical BusinessSuite, Avenue 3 Unit 32-01,Level 32,Tower A (Company No. 11324-H) Services SdnBhd Tricor Investor&IssuingHouse REGISTRAR (MIA 16876) KUAN HUIFANG (MAICSA 7041240) YANG BAO LING SECRETARIES ABD MALIKBINARAHMAN CAPTAIN IZAHAMBINABD. RANI(R) TAN SRIDATO’ SERISITINORMA TAN SRIDATO’ SRI JEN. TAN SRIYAACOB REMUNERATION COMMITTEE ABD MALIKBINARAHMAN LOH KOK LEONG CAPTAIN IZAHAMBINABD. RANI(R) TAN SRIDATO’ SERISITINORMA JEN. TAN SRIYAACOB NOMINATION COMMITTEE LOH KOK LEONG CAPTAIN IZAHAMBINABD. RANI(R) TAN SRIDATO’ SERISITINORMA JEN. TAN SRIYAACOB ABD MALIKBINARAHMAN(Chairman) AUDIT COMMITTEE 603-9222 2833 603-9221 8888 603-2783 9222 603-2783 9299 BINTI YAAKOB LEONG HOY KUM BIN MAT ZAIN(R)(Chairman) BINTI YAAKOB BIN MAT ZAIN(R)(Chairman) BINTI YAAKOB BIN MAT ZAIN(R) PT BankPermata Tbk PT BankMultiartaSentosa PT BankHSBCIndonesia RHB IslamicBankBerhad RHB BankBerhad Public IslamicBankBerhad Public BankBerhad OCBC Bank(Malaysia)Berhad Maybank IslamicBerhad Malayan BankingBerhad HSBC BankMalaysiaBerhad HSBC AmanahMalaysiaBerhad CIMB IslamicBankBerhad CIMB BankBerhad Bank IslamMalaysiaBerhad Al-Rajhi Banking&Investment Alliance InvestmentBankBerhad Affin BankBerhad BANKERS f t 60000 Kuala Lumpur Taman Tun Dr. Ismail 1, JalanWan Kadir Level 16,MenaraLGB Chartered Accountants Deloitte PLT (AF0080) AUDITORS e [email protected] t INVESTOR RELATIONS www.mahsing.com.my WEBSITE Bursa MalaysiaPropertyIndex INDEX MAHSING (8583) STOCK SHORT NAME Securities Berhad Main Market ofBursaMalaysia STOCK EXCHANGE LISTING The BankofTokyo-Mitsubishi UFJ, Ltd Corporation (Malaysia)Berhad 603-7726 8986 603-7610 8888 603-9221 8888 05
Our Business Mah Sing Group Berhad CARING environment community and the for the people, CARING PROMISE QUALITY PROMISE QUALITY QUALITY Delivering our QUALITY right solutions MARKET TRENDS OUR MISSION TRENDS and providing the Anticipating future MARKET OUR VISION OUR Inventing future living that enhances quality of life Inventing future living learning professional EMPOWERING towards personal and Artist impression of Southville City, KL South with direct interchange KL South with Artist impression of Southville City, our people EMPOWERING growth through continuous 06
Annual Report 2017 Our Business PROFILE CORPORATE Artist impressionofMAruna,Rawang corporate governance, product design, concept, corporate governance, productdesign, concept, domestic andglobalawardsfor companyperformance, created iconicdevelopments that havewonover200 For more than two decades, Mah Singhascontinuously projects, SoHoandindustrialdevelopments. integrated developments,GradeAofficebuildings,retail diverse portfolioincludesmasterplannedtownships, A leading property developer in Malaysia, Mah Sing’s Penang, Johoraswell asSabah. (34 ongoing)inGreaterKuala Lumpur andKlangValley, The Groupcurrentlyhas47projects with residential, commercial and industrial developments. Mah SingisoneofMalaysia’s fullyintegrateddevelopers development in1994. of BursaMalaysiain1992andventuredintoproperty Mah SingGroupBerhadwaslistedontheMainBoard STAKEHOLDERS. TO ENSUREALLLIVEWELL;OURCUSTOMERS, OURPEOPLEAND OUR IN EVERYTHING THAT WEDO, WEWANT TO FIRST, ENHANCELIFE.WEWANT Mah Sing’s group-wide transformation. Spaces. EnhanceLife”, markingthenextphaseof unveiled itsnewcorporatelogoandtagline“Reinvent 2017 wasamomentousyearforMahSingastheGroup Excellence Award. Developer ofTheYear aswelltheSinChewBusiness my’s TheAll-Star Award asone oftheTop Ranked Excellence Award andhonouredwithTheStarproperty. Top 10PropertyDevelopersatTheEdge Property Awards. MahSingwas alsoranked asoneofthe Strategy (Silver)atthe HumanResources Excellence Workplace Wellbeing (Silver)andExcellence in CSR Excellence Awards, and took home the Excellence in ‘People’s ChoiceAward’ attheiPropertyDevelopment voted winnersof‘TheProgressiveDeveloperAward’ and innovation andquality. In2017alone, theGroupwas
07
Our Business Mah Sing Group Berhad PROFILE CORPORATE headquarters. Enhance Life” MS@Work, Mah Sing’s Mah Sing’s MS@Work, Mah Sing unveiled its Mah Sing unveiled its new corporate logo and new corporate logo tagline “Reinvent Spaces. tagline “Reinvent Sing’s new corporate logo at new corporate Sing’s Community Development. and Lionel Leong unveiled Mah and Lionel Leong Tan Sri Dato’ Sri Leong Hoy Kum Hoy Kum Sri Leong Sri Dato’ Tan Mah Sing Foundation unveiled its new logo, tagline and 3 key pillars; tagline and 3 key new logo, Education, Health & Wellbeing and Education, Health & Wellbeing November February March
POWER STATEMENT POWER Empowerment I strive to reach the highest level of competence and commitment to perform. Resourcefulness and collaborate across teams I think out-of-the-box to provide the best solutions. Ownership initiatives take I wholeheartedly complete my tasks, for the best to contribute ideas and drive innovation interest of the company. Well-being care of my personal health and I commit to take professional growth in an environment of mutual respect. I uphold honesty, ethics and professionalism in my ethics and I uphold honesty, deliverables and all my dealings. First Performance expectations. I am passionately driven to exceed Integrity
i E
P R
O W THE GROUP’S i THE GROUP’S The Group introduced the Employee Value Statement in 2016 as part Statement the Employee Value The Group introduced in values are instilled The iPOWER of its group wide transformation. values at they are encouraged to practice these every employee and values are: their daily lives. The iPOWER work as well as in 08
Annual Report 2017 Our Business MILESTONES CORPORATE industrial developments industrial developments Listed ontheKuala Lumpur Continued i-Parc series Stock Exchange (KLSE)2 with i-Parc 1,2and3in Board undertheindustrial Klang Valley. 1992 with MResidence inRawang. sector. development inKlangValley Continued township nd
was inUluYam in1994, Ventured intoproperty development withfour with GardenResidence, Expanded presence to Expanded presenceto (Mah Sing’s industrial projects. Firstproject Cyberjaya and Kinrara Cyberjaya andKinrara Southern KlangValley Birth ofi-Parc series Residence, Puchong. comprising single- storey linkhomes. integrated park). 1994 City@KL SouthinBangi. Launched Southville property sectoronKLSE2 Reclassified fromindustrialsectorto 2011 Expanded intoKota Kinabalu, Sabah withSuteraAvenue. in IskandarMalaysia. in Johor, anunheardconcept18yearsago of gatedandguardedlivingforlinkhomes Skudai, Johorandintroducedtheconcept development inSriPulaiPerdana in Launched maidentownship nd Board. 2009 2000 2012 09
Our Business Mah Sing Group Berhad CORPORATE MILESTONES Perdana Foundation logo. Mertajam, Penang. Unveiled new Mah Sing series with M Parc in Bukit series with M Parc Added to the Group’s i-Parc i-Parc Added to the Group’s The Group acquired Valley with affordably priced Valley corporate logo and Mah Sing in Klang Valley, Aman in Klang Valley, Continued expansion in Klang developments like M Vertica in M Vertica developments like 2017 land for its 1st township Cheras and M Centura in Sentul. first niche high-end The Group shifted its Damansara Legenda. project in Klang Valley, project in Klang Valley, Klang Valley. Launched Launched Klang Valley. high-end markets in the high-end markets spanning 1,313 acres. focus to medium-upper to 2016 township by acreage, Meridin township by acreage, The Group launched its largest East in Iskandar Malaysia Johor, East in Iskandar Malaysia Johor,
nd board to main board, Bursa Malaysia. Transferred from 2 Transferred Jalan Tun Razak. Razak. Jalan Tun launched Southbay. D’sara Sentral in Sungai Buloh. D’sara its foothold in Klang Valley with its foothold in Klang Valley properties with The Icon, developments such as Lakeville Lakeville developments such as Ventured into Penang and into Penang Ventured The Group further strengthened The Group further strengthened Residence in Jalan Kuching, and in Jalan Kuching, Residence Expanded into commercial 2004 2013 2007 10
Annual Report 2017 Our Business AFFORDABILITY REINVENTING Mall, MyTOWN ShoppingCentreandIKEACheras. amongst Cheras’ majorshoppingoutletsinSunwayVelocity the matureneighbourhoodofCheras.Itisalsosituated LRT interchangeandtheTaman Pertama MRT Station in distance topublictransportationslike theMaluriMRT/ ft (4bedroom).Itisstrategicallylocatedwithinwalking units withbuiltupof850sqft(3bedroom)and1,000sq This Transit AdjacentDevelopment(TAD) offersresidential RM2.2 billion EST. GDV: High-rise residential and2-storeyretailshops DEVELOPMENT TYPE: M VERTICA, CHERAS 11.25 acres SIZE: Ongoing STATUS: around 2.5-3.5km2.6-3.7km away. which aretheSentul,Kampung BatuandKentonmen LRT Station (3.5kmaway).Thereare also 3KTMstations the SentulTimurLRT Station (2.4kmaway) andtheSentul and MRT stations.Nearbypublictransformationinclude to thisdevelopmentwithdirectshuttlethenearestLRT from 646sqftto1,001sq ft.Convenientaccessibility iskey city. Itisaperfectmixofcomfortandluxurywithbuiltup well astheconvenienceofbeinginaprimelocation This freeholddevelopmentoffersthecomfortofahomeas RM1.3 billion EST. GDV: High-rise residential DEVELOPMENT TYPE: M CENTURA,SENTUL 4.7 acres SIZE: Ongoing STATUS: 11
Our Business Mah Sing Group Berhad STATUS: STATUS: Ongoing REINVENTING REINVENTING AFFORDABILITY SIZE: 1,313 acres MERIDIN EAST, JOHOR MERIDIN EAST, DEVELOPMENT TYPE: DEVELOPMENT High rise residential, hotels and retails shops EST. GDV: GDV: EST. RM5 billion This is Mah Sing’s largest township with 1,313 acres of land in largest township with 1,313 acres of This is Mah Sing’s Eastern Iskandar Malaysia. The development has direct access Gudang Highway, Senai- or links to major highways like Pasir Desaru Highway and JB East Coast Highway. The township Theand Dandelion The Greenway, The Eden, The features have successfully carried out Fern (2-storey link homes). We and a slip road Kong road works into widening Jalan Kong will also be Kong Kong into Jalan Senai-Desaru Highway from constructed. The project also recently held a groundbreaking the first educational institute ceremoney for SJK(C) Sim Mow Yu, of Meridin East. STATUS: STATUS: Ongoing SIZE: acres 2.02 M VISTA@SOUTHBAY, PENANG M VISTA@SOUTHBAY, DEVELOPMENT TYPE: DEVELOPMENT High-rise residential EST. GDV: GDV: EST. RM140 million M Vista is part of the 33-acre Southbay township in Penang M Vista is part of the 33-acre Southbay township in Penang island. The development consists of one 23-storey tower with a total of 237 residential units. It features a total of 5 ft 1,201sq to the studio unit 536sq ft ups from of built types located only 1km from unit with 3+1 bedroom. Strategically 1st bridge and second bridge, 9km to Penang’s Penang’s easily can residents Expressway, Eu Chong Lim Dr Tun near access to the mainland or Georgetown area. Families will find it convenient to have shopping malls, hotels, banks, 10km within located centres entertainment and schools 7km away. airport only with Penang 12
Annual Report 2017 Our Business STRUCTURE CORPORATE Active OperatingSubsidiaries 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% PROPERTY DEVELOPMENT 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Sdn Bhd 100% Mah SingPropertiesSdnBhd Loyal SierraDevelopmentSdnBhd Legend GrandDevelopmentSdnBhd Klassik Tropika DevelopmentSdnBhd Jastamax SdnBhd Icon CityDevelopmentSdnBhd Enrich PropertyDevelopmentSdnBhd Enchanting ViewDevelopmentSdnBhd Enchanting HeightsSdnBhd Elite Park DevelopmentSdn Bhd Dsara SentralSdnBhd Capitol Avenue Development SdnBhd 100% Nature Legend DevelopmentSdnBhd Myvilla DevelopmentSdnBhd Multi Synergy GroupSdnBhd Maxim HeightsSdnBhd Major Land Development SdnBhd Meridin EastSdnBhd Mediterranean ViewDevelopmentSdnBhd 78% Nova Legend DevelopmentSdn Bhd Nova CenturyDevelopmentSdnBhd Vienna HomeSdn Bhd Vienna ViewDevelopmentSdn Bhd Venice ViewDevelopmentSdnBhd Uptrend HousingDevelopment SdnBhd Tropika IstimewaDevelopment Sdn Bhd Supreme SpringsSdnBhd Star Residence SdnBhd Southville CitySdnBhd Semai MerantiSdnBhd Oasis GardenDevelopmentSdnBhd Mestika BistariSdnBhd Cordova Land SdnBhd Cosmowealth HousingDevelopment
65% 100% 100% 100% 100% 100% 100% PROPERTY MANAGEMENT 100% 100% PROPERTY INVESTMENT 100% PLASTICS DIVISION PROPERTY DIVISION
Vital Routes SdnBhd Quantum NobleDevelopmentSdnBhd Prima Peninsular DevelopmentSdnBhd MS IconPropertyServicesSdnBhd Mestika Kenangan SdnBhd Acacia SpringsManagementSdnBhd Liberty PropertyManagementSdnBhd Sendirian Berhad Mah SingPlasticsIndustries Marvellous Vantage SdnBhd
P.T. MahSingIndonesia
13
Our Business Mah Sing Group Berhad
@ 3,455,968 5% 9% 17’ 6.5 N/A 1.42 11.6 1.45
2017
12.50 12.54 43.6% 3,288,111 359,161 472,283 361,895 784,478 16’
2,915,791 7,140,187 3,455,968 4,647,609 3,135,622 15’ 6% 6.5 10% 1.36 10.6 1.43 0.02
2016
13.46 13.47 (in RM’000) 43.3% 2,288,833 14’ 360,312 482,939 361,357
2,957,617 6,220,155 3,288,111 3,836,127 1,005,650 1,955,249 EQUITY ATTRIBUTABLE TO TO EQUITY ATTRIBUTABLE 13’ ORDINARY EQUITY HOLDERS ORDINARY 6% 6.5 9.2 12% 1.30 1.45 0.04 2015 15.35 15.73 40.5% 384,634 503,693 386,677 3,108,506 6,615,678 3,135,622 3,684,095 1,500,255
# # # # # # # ^ 361,895 7% 6.5 8.6 17’ 16% 1.55 0.36
1.58 2014
17.60* 18.35* 43.9% 361,357 471,631 354,910 356,496 16’ 2,904,723 2,288,833 5,326,350 2,298,515 1,459,240
# # # # # # # ^ 386,677 15’ 6% 8.0 8.9 14% 1.38 0.16 1.53 2013
16.08* 17.16*
42.1% (in RM’000) 356,496 280,365 279,010 371,116 14’ 2,005,596 4,587,094 1,955,249 1,129,845 1,966,236
TO EQUITY HOLDERS TO 280,365
13’ NET PROFIT ATTRIBUTABLE NET PROFIT ATTRIBUTABLE 2,915,791
17’ 2,957,617
16’ 3,108,506 15’
(in RM’000) REVENUE 2,904,723
14’
2,005,596
13’ The comparative figures have been restated due to the effect of early adoption of MFRS 15 Revenue from Contracts with Customers in the financial year 2015. Revenue from the effect of early adoption of MFRS 15 The comparative figures have been restated due to Share price is after adjustment on the effect of Rights and Bonus Issue which completed during the financial year 2015. Share price is after adjustment on the effect of Rights and Bonus Issue which completed during the financial The dividend payout for 2017 is estimated based on number of shares as at 31 December 2017. number of shares as at 31 December The dividend payout for 2017 is estimated based on The comparative figures for basic and fully diluted earnings per share have been restated to reflect the adjustment arising from the Rights and Bonus Issue The comparative figures for basic and fully diluted completed during the financial year 2015. Net profit attributable to equity holders Net profit attributable Dividend payout ratio Net dividend per share (sen) (RM) Share price as at the financial year end Price earning ratio Revenue RM’000 Profit after tax assets Total Profit before tax Net assets per share (RM) Fully diluted earnings per share (sen) Basic earnings per share (sen) Net gearing ratio Equity attributable to ordinary equity holders Return on total assets on total Return Total borrowings Total equity Total on equity Return
^ * @ #
FINANCIAL HIGHLIGHTS FINANCIAL YEAR ENDED 31 DECEMBER FINANCIAL GROUP FIVE-YEAR FIVE-YEAR GROUP 14
Annual Report 2017 Our Business • 13 • • • • • • • • • • • • • • • - The MarketingEventsAwards - The EdgePropertyExcellence Awards - - The EdgeBillionRinggitClubAwards - - The BrandLaureate Award - The 7 - StarProperty.my Awards - - - Sin ChewBusinessExcellence Awards - Property InsightPrestigiousDeveloperAwards - Malaysia SocialMediaWeek Awards Malaysia BestEmployerBrandAwards - Sustainable DevelopmentGoalsAward Junior ChamberInternationalMalaysia(JCIM) - - iProperty DevelopmentExcellence Awards - - Human Resources Excellence Awards - Frost &SullivanMalaysiaExcellence Awards - BCI AsiaAwards - Developer th Best EventsforVenue Experience(Bronze) Top 10PropertyDevelopersAward Most ProfitableCompany(Silver) Highest ProfitGrowthCompany(Silver) Award Industry ChampionBrandICONLeadership Brand ofTheYear Best InvestorRelations Company of TheYear The All-Star Award Top Ranked Developers Top 5Companies CSR Excellence Award Property Excellence Award Top 10Developers Property Sector Social MediaExcellence Awards -Best Goal 11:SustainableCities&Communities Special ProgressiveDeveloperAwards People’s ChoiceAwards Excellence inCSRStrategy (Silver) Excellence inWorkplace Wellbeing (Silver) Year Best PropertyDevelopmentCompanyofthe Top 10Developers Industrial/Warehouse inMalaysia EuromoneyAnnualReal EstateSurveyforBest th AsianExcellence Awards CORPORATE AWARDS Group ChiefExecutive Group ManagingDirector/ Tan SriDato’ SriLeong HoyKum TAN SRILEONG’SLIFETIME RECOG AWARDS excellence andquality constant perseverancetowards of oursuccess,butalsoshow “ Our awardsarenotonlymarkers ” ACHIEVEMENT AWARDS 15
Our Business Mah Sing Group Berhad PROPERTY AWARDS Top Ranked Developers Ranked Top Award Choice & Voter’s Readers for (Excellence) The Neighbourhood Award Southville City (Honours) for M Home Award The Starter Centura (Honours) for Award The Borneo Star Sutera Avenue Best QLASSIC Achievement Awards for Achievement Awards Best QLASSIC Icon City for Achievement Awards 2 High QLASSIC Icon City for M City Best Facilities Development for The Loft Best High-Rise Development (Honours) for The Small is Big Award Cerrado@Southville City (Honours) for The Business Estate Award Pelepas Tanjung i-Parc, (Merit) for The Family-Friendly Award Meridin East (Merit) for The Award The Northern Star Loft (Merit) for The Best High Rise Residential The Meridin @Medini Development (Merit) The Best Waterfront for Meridin East Starproperty.my Awards Awards Starproperty.my - - Awards Starproperty.my - - - Construction Industry Development Board’s Development Board’s Construction Industry (CIBD) QLASSIC Day - - Developer Awards Property Insight Prestigious - - Awards StarProperty.my - - - - Jewels of Johor Awards Starproperty.my - - 2018 Corporate • Project • • • • •
Asia’s Best CEO (Investor Relations) Asia’s King of Property Asian Excellence Awards Awards Asian Excellence
th - Award of ICONS Leadership Brand ICON The BrandLaureate - • • 7
ACHIEVEMENT AWARDS ACHIEVEMENT
NITION AND TAN SRI LEONG’S LIFETIME LIFETIME LEONG’S SRI TAN 16
Annual Report 2017 Our Business MAY JAN SEP Penang. at TheLoft, Southbayin Topping upceremony Ampang. festival’ inMCity, Jalan Fire intheSky‘fitness Mah Sing’s inaugural 800 participantsjoined preview. up rateduringitsfirst recorded 95%take The projectsalso Sales GalleryinSentul. Opening ofMCentura SNAP OCT JUN FEB million viewsonline. with morethan3.7 video whichwentviral made intoaHariRaya Suites. Theeventwas of SavannaExecutive construction workers session with600 Celebrated bukapuasa Annual Dinner. logo duringGroup’s unveiled newcorporate Board ofDirectors Management and Mah Sing’Senior Persekutuan Programme. Jannati@Wilayah to supporttheBaiti Wilayah Persekutuan Badan AmalKasih Ibu donated RM1millionto Mah SingFoundation IN 17
Our Business Mah Sing Group Berhad The construction work of the covered walkway Sentral to from D’sara station Selamat MRT Kg was completed. The station is now only MRT 4 minutes away from the retail shops. Mah Sing Foundation Mah Sing Foundation donates plastic 1,000 chairs worth RM21,221.20 Fong 1. to SJK (C) Pay Mah Sing Foundation supported the an Society, DAYBREAK enterprise that empower persons with disabilities to become contributing member of the society. APR DEC AUG Opening of M Aruna M Aruna Sales Gallery. third is the Group’s township in Rawang. Unveiling of new corporate logo on the facade, MS@Work MS@Work HQ. Group’s now boasts plenty of facilities for its staffs such as gym, karaoke room, games area, nap room and more. Topping up ceremony Topping Residence, at Lakeville Jalan Kuching.
JUL NOV MAR
2017 SHOTS 18
Headline MediaTitle Date Frequency Readership Page No AdValue
Annual Report 2017 Our Business
Mah Sing Turned To Net Cash Level China Press 08 Mar 2017 Daily 1,076,000 F7 RM 2,919 AdValue Page No Readership Frequency Date MediaTitle Headline RM 7,176 29 300,000 Daily 20 Jan2017 Malay Mail One of a kind workout experience at M City
Language Circulation Section ArticleSize PR Value PR Value PR ArticleSize Section Circulation Language
Chinese 233,713 Business 148 cm² RM 8,758 RM 21,528 628 cm² Life 100,000 English AdValue Page No Readership Frequency Date MediaTitle Headline RM 5,006 B5 83,000 Daily 21 Sep 2017 21 Sep Pau Siang Nanyang Mah Sing won Euromoney's Best Developer award AdValue Page No Readership Frequency Date MediaTitle Headline PR Value PR ArticleSize Section Circulation Language RM 32,232 9 1,032,000 Daily 01 Mar 2017 01 Mar The Star Colourful celebration of a milestone RM 15,018 398 cm² National 27,667 Chinese IN THE PR Value PR ArticleSize Section Circulation Language AdValue Page No Readership Frequency Date MediaTitle Headline RM 96,695 638 cm² Metro 338,368 English RM 9,527 16 1,092,000 Daily 28 Aug2017 Sin Chew Daily Mah Sing Group won double silver award in THe Edge award ceremony MAH PR Value PR ArticleSize Section Circulation Language RM 28,581 171 cm² Nation 379,504 Chinese
19
Our Business Mah Sing Group Berhad
The Star Mah Sing to sell more affordable homes 6 May2017 8 26.1x13.4
China Press TheFern projectby Mahsing sold out after half launching 24 July 2017 9 13.4x14.2 13.4x14.2
: : : : :
: : : : : :
Media Title Headline Date Page Size Only Size Print
Media Title Headline Date Page Size
English 15,000 Home Business Home 159 cm² RM 7,656
Language Circulation Section ArticleSize PR Value
Berita Harian Lakeville Residence di TamanWahyu laris 5 August 2017 32 19.6x27.8,10.7x26.7
: : : : : Harian Metro TAMBAH BANK TANAH 29 July 2017 62 17.5x18.6 17.5x18.6
: : : : : :
Media Title Headline Date Page Size Only Size Print
Media Title Headline Date Page Size With near RM1b cash pile, Mah Sing eyes land bank expansion bank land eyes Sing Mah pile, cash RM1b near With Daily Financial Edge The 01 Mar 2017 Daily 50,000 1,7 RM 2,552
Headline MediaTitle Date Frequency Readership Page No Page AdValue
NEWS SING 20
Annual Report 2017 ACHIEVEMENTS OUR STRATEGY & Our Business Achieved >RM1,000,000 RM700,000 -RM1,000,000 RM500,000 -RM700,000 Our Strategy & Achievements Mah Sing Group Berhad Mah Sing aims to be the leader in affordable Mah Sing aims to be the leader in the concept housing in Malaysia and have redefined the Group launched its In 2017, of affordability. campaign which offers Affordability’ ‘Reinvent good product specifications in strategic locations at affordable prices near public transportation Our strategy in and LRT. infrastructure such as MRT projects such launching projects under RM500,000 in Sentul, M Vista in Cheras, M Centura as M Vertica and Meridin East in Johor have been very in Penang well received by the public. In 2018, Mah Sing will continue to focus in the of a number launching segment, housing affordable in Greater Klang Valley projects under RM500,000 and KL, Johor and Penang. 22 Annual Report 2017 Our Strategy & Achievements Analysis for2017. our ManagementDiscussionand We arepleasedtopresentyou Dear valuedshareholders, Klang Valley, Penang, JohorandSabah. and industrialpropertiesinKuala Lumpur and Mah Singcurrentlyhas47residential,commercial prime commercialprojectsinstrategiclocations. across thecountrybuildingqualityhomesand the nation.Today, wehavemorethan900staff of themostestablishedpropertydevelopersin development in 1994 and has since become one progressed fromaplastictradingfirmtoproperty Board of Bursa Malaysia in 1992. The Group has Mah SingGroupBerhadwaslistedontheMain OVERVIEW will beabletoaddvalueourMahSingbrand. believe thattheirvastexperienceandexpertise as Independent Non-Executive Director. We Rahman whohasjoinedourBoardofDirectors Norma BintiYaakob andEncikAbdMalikBinA would also like to welcome Tan Sri Dato’ Seri Siti title “Datuk”effective1stFebruary2018. We Panglima Mahkota Wilayah,whichcarriesthe who wasconferredtheDarjahKebesaran our Executive Director, DatukLeong Yuet Mei First andforemost,wewouldlike tocongratulate results, despitethechallengingmarket in2017. of life. We successfullydeliveredcommendable strive toinventfuturelivingthatenhancesquality accomplishments throughouttheyearaswe This annualreporthighlightsMahSing’s AND ANALYSIS MANAGEMENT DISCUSSION TARGET OF ACHIEVED OURSALES WE SUCCESSFULLY BILLION RM1.8 VALLEY TO IN KLANG LANDBANK TARGET TO INCREASE 75% 23 Our Strategy & Achievements Mah Sing Group Berhad AND ANALYSIS MANAGEMENT DISCUSSION MANAGEMENT Delivering our quality promise Delivering our quality community and environment Caring for the people, • • evolving the Mah Sing brand to – all with the intent of years many the in thrive to continue we that ensure to come. in our new tagline This evolution is encapsulated This is a promise Enhance Life. Spaces. – Reinvent our customers. A promise to to all that we make strive to deliver the best products, which continuously in the lives of the people a positive impact will make residing within, all at an affordable price. believe that this report will further enhance our We top developers as reputation as one of Malaysia’s recorded voted by the Malaysian public. The Group RM361.9 million, on the net profit of approximately RM2.9 billion. back of revenue of approximately pride in we take developer, driven As a market needs and tailoring our understanding market we introduced strategies to suit demand. In 2017, focuses which Campaign Affordability Reinvent the on providing affordable homes which comes with premium features and in strategic locations that are near to public transport infrastructure and at a price point that many can afford. Notable preview/launches Vertica in Cheras of these affordable homes include M and M Centura in Sentul (from (from RM450,800) projects that have Lumpur both Kuala RM328,000), island, On Penang received overwhelming response. the M Vista (from RM345,800) and phase 2 of Fern link also homes in Meridin East, Johor (from RM410,550) received strong take-up. The Group will continue to reinvent innovative layouts, providing quality and generous facilities with high security as well as central location surrounded In addition to that, the by amenities and convenience. Group will also continue to deliver easily accessible, well planned projects with good concepts in strategic locations. consecutive year, we have managed to consecutive year, th Empowering our people towards personal and professional growth through continuous learning trends and providing the Anticipating future market right solutions 2017 has been the year where we embarked on the 2017 has been the year where we embarked we whereby biggest rebranding initiative, company’s unveiled a new vision: Inventing Future Living That a set of new mission: Enhances Quality of Life, • • achieve annual property sales in the billion ringgit The Group recorded RM1.8 billion sales in 2017 range. and will continue to plan strategic launches of our demands. products that meet current market For the 8 24 Annual Report 2017 Our Strategy & Achievements AND ANALYSIS MANAGEMENT DISCUSSION FYE Financial Highlights Artist impressionofMVertica, Cheras Paid-up sharecapital Balance sheetitems Cash &bankbalances Total equity Borrowings No. ofprojects Basic earningspershare(sen) Net profit(RMmil) Return onequity Net assetpershare(RM) Net gearingratio(times) No. ofshares (unit’mil) Revenue (RM mil) Income statementitems RM mil 2,958 2,409 3,836 1,205 1,006 13.47 2016 0.02 924 1.36 10% 361 46 Net Cash RM mil 2,426 4,648 2,916 12.54 1,216 1,773 2017 1.42 362 784 9% 47 RM296.2 million. from approximately RM259.4 millionto performance. Revenue grew by 14.2% to contributepositively Group The plasticssegmentcontinued RM432.3 million. operating profitwasapproximately was approximately RM2.6 billionand revenue frompropertydevelopment For theyearended31December2017, the previousfinancialyear. an increaseinnetprofitcomparedto 31 December2017. Thisrepresented RM2.9 billionforthe year ended the backofrevenueapproximately approximately RM361.9millionon Mah Sing Group posted net profit of FINANCIAL RESULTS 25 Our Strategy & Achievements Mah Sing Group Berhad AND ANALYSIS MANAGEMENT DISCUSSION MANAGEMENT improving economic fundamentals of the Malaysian of the Malaysian economic fundamentals improving to positive government policies economy pursuant growth and stability. and measures to promote DIVIDEND to maintain our remarkable The Group continues to our loyal shareholders record of paying dividends to announce that the Board of and we are pleased a dividend of 6.5 sen per Directors have proposed of the financial year ended ordinary share in respect approval subject to shareholders’ 31 December 2017, in the upcoming Annual General Meeting. of dividend yield This translates into an attractive consecutive the 12th and marks 4.5% approximately the Group’s year of uninterrupted delivery on remains It policy. payout 40% dividend minimum commitment to ensure its shareholders the Group’s approach to continue to benefit from its disciplined sustainable long term growth. Artist impression of M Centura, Sentul SALES RM 1.8 billion NET PROFIT RM361.9 million REVENUE RM2.9 billion LOOKING BACK IN 2017 BACK LOOKING Supported by young demographics, growing Supported by young demographics, the mid population and low unemployment rates, demand and near term prospects for basic housing longer term are expected to be healthy whilst the in line with prospects are expected to be positive The Group currently has approximately 2,125 acres ofacres 2,125 approximately has currently Group The remaining gross developmentundeveloped land with unbilled sales of approximately and value (GDV) revenue can support the Group’s billion which RM27.6 and earnings growth for the next 8 years. As at 31 December 2017, the Group is in a net cash the Group 2017, As at 31 December financial management, position. With disciplined a and zero net gearing, the Grouphealthy balance sheet land banking acquisitions andwill continue to pursue to in the Klang Valley banks poised to increase land years andtwo next the in 66% the current from 75% with focus on affordableexplore on joint ventures the Klang Valley. housing projects within 26 Annual Report 2017 Our Strategy & Achievements IN 2017 PERFORMANCE 2017 RM NET PROFIT million 361.9 REVENUE RM billion 2.9 since 2010 billion ringgitrange consistency inthe Group’s sales maintaining the billion RM SALES OF ACHIEVED 1.8 2,125 LANDBANK REMAINING RM High CashPile BALANCE SHEET HEALTHY billion 1.2 acres 6.5 DIVIDEND PROPOSED per ordinaryshare sen 27 Our Strategy & Achievements Mah Sing Group Berhad 2018 INDICATORS (KPI) INDICATORS KEY PERFORMANCE KEY PERFORMANCE 500 1.8 TARGET 2.7 thousand billion target sales Continue developing homes below RM Min RM >RM million in 2017 MAH SING MAH SING FOUNDATION DONATED 2018 577 Plastics Indonesia WORKFORCE DATE TO 952 Property Division 413 Plastics Malaysia 22,500 TRAINING > hours for employees in 2017 % % Asset Turnover Ratio Asset Turnover on average for the past 5 years 5-years (above comparable peers’ average of 24%) STRONG GROWTH STRONG 47 EXEMPLARY EXEMPLARY DIVIDEND OF PAYOUT MINIMUM 40 Since 2006 representing a 4.5% attractive dividend yield in 2017 28 Annual Report 2017 Our Strategy & Achievements AND ANALYSIS MANAGEMENT DISCUSSION and facilitiesintotheprimelocation. The1-acre away. M Centura integrates modern luxury living, Batu andKentonmen approximately 3km 3 KTMstationswhicharethe Sentul,Kampung Sentul LRT Station is3.5kmaway. Therearealso Sentul TimurLRT Station is2.4kmaway andthe various publictransportinfrastructuresuchasthe Centura hasverygoodaccessibilityasitisnear just 5kmnorthoftheheartKuala Lumpur. M development pricedfromRM350,000 located M Centuraisa100%freeholdresidential Penang andFernin MeridinEast,Johor. Centura inSentul,MVertica inCheras,MVista many canactuallyafford.The4projectsareM with goodproductspecifications,atapricepoint it meanstobeaffordablebyprovidinghomes projects. Thecampaignaimstoreinventwhat campaign inOctoberwhichcovers4ofournew Next, we launched the ‘Reinvent Affordability’ and residents. development tobeeasilyaccessiblebyvisitors Kampung Selamat MRT station. This enables the and commercialcomponentswithdirectlinkto is atransitorienteddevelopmentwithresidential Sentral@Sungai Buloh inQ22017. D’sara Sentral The Group launched OLO Residence inD’sara of fiveyears. Kuala Lumpur, PutrajayaandLabuan inthespan housing unitsthroughoutWilayahPersekutuan government’s initiativetodevelop80,000 Seri Wahyu, under RUMAWIP, the Malaysian 2017 hasalsoseenthelaunchofResidensi homes tocaterthemarket’s demand.Hence, Government’s efforttoprovidemoreaffordable Enhance Life’, wecontinuetosupportthe In linewithourtaglineto‘Reinvent Spaces, Penang. Meridin BayvueinJohorBahruandMVista in Cheras,MCenturaSentul,CovilTower of of D’sara Sentral,FernofMeridinEast,MVertica include Residensi SeriWahyu, OLO Residence Projects launchedandpreviewedin2017 Projects Launched andPreviewed HIGHLIGHTS IN2017 only 7kmaway. centres locatedwithin10kmwith Penang airport malls, hotels,banks,schoolsand entertainment Families willfinditconvenient tohaveshopping access tothemainlandorGeorgetownarea. Lim ChongEuExpressway, residentscaneasily 9km toPenang’s 1stbridgeandnearTun Dr located only1kmfromPenang’s secondbridge, a totalof237residential units. Strategically M Vistaconsistsofone23-storeytowerwith system, tonameafew. electric carsandintegratedgarbagedisposal Vehicle (EV)chargingstationsforhybridand bar, childcare area, dualfloatinggym, Electric length swimmingpool,wadinglaundry of resortfacilitiesprovidedincludesanOlympic- Artist impressionofD’sara, Sentral 29 Our Strategy & Achievements Mah Sing Group Berhad AND ANALYSIS MANAGEMENT DISCUSSION MANAGEMENT Collaboration with EduCity Malaysia for the units start Rental per from RM850.00 student per month We are collaborating with EduCity Malaysia to EduCity Malaysia collaborating with are We Meridin@Medini our in accomodation student provide for the units Malaysia. Rental development in Iskandar and the per student per month start from RM850.00 2018 March from available be made will accommodation to this, we will still continue to sell onwards. In addition our Meridin Medini development. INITIATIVES MARKETING INNOVATIVE strengthen its branding with The Group also further both Targeting initiatives. marketing innovative various strategy millennials and baby boomers, our marketing events and innovative focuses on digital marketing are below and campaigns. In fact, 70% of our buyers includes the usage 40 years old. Our digital marketing of creation the and platforms media social various of online contests unique contents such as festive videos, brand awareness. and increase leads and more to garner year is our Arts One of our most successful events this interactive travelling first Malaysia’s and Lights exhibition, with creative pop-up art and technology experience rooms which installations, interactive props and colourful The weekend creates unique photography opportunities. garnered more than Jaya Petaling exhibition in Icon City, marketing long-term a is exhibition The visitors. 65,000 sales galleries initiative where it was featured in various across Malaysia. Artist impression of The Meridin@Medini, Johor Artist impression of The Meridin@Medini, Johor Over a weekend, we had simultaneous previews and we Over a weekend, namely unit selections for 3 projects across Malaysia, M Vista@Southbay M Centura in the Klang Valley, Island and Fern in Meridin East, Johor in Penang of up rate take an average recorded which all Bahru in Batu 2.5 Cheras also A of M Vertica 95%. Tower up rate of 85% over the 2-day recorded a strong take preview. weekend Fern in Meridin East is a freehold, 2-storey link homes Fern in Meridin East is a freehold, 2-storey ft starting with indicative built ups starting from 1,622sq East offers Meridin indicatively. from RM410,550 living with its 9-acre Mulberry its residents lakeside The masterplanned integrated development Lake. and a wide also features lush green environments living. selection of activities to encourage healthy M Vertica truly embodies the meaning of ‘Reinvent of ‘Reinvent the meaning truly embodies M Vertica as it is a serviced residence strategically Affordability” the city centre and from KLCC located only 4.5km The price of RM450,800. with an indicative starting efficient unit layout with development also features has from 850sq ft. M Vertica indicative built up facilities deck for a residential one of the largest total of 4.5 acres with a Lumpur development in Kuala 40 luxurious facilities under that houses more than one roof. 30 Annual Report 2017 Our Strategy & Achievements AND ANALYSIS MANAGEMENT DISCUSSION and revenuewereinUSdollar denomination. derived from our export, and the majority of sales Malaysia’s operationalsalesandrevenue In the Plastics division, 35% of our Plastics REVIEW OFOPERATIONS over tothenextyear. to continueourmomentumandperseverance 2017 hasbeenaneventfulyear. We arehoping property. not be in Malaysia to settle issues related to their making itconvenientforthebuyerwhomight procedures and contactwiththebuyers; thus buyers- intheconsultationandfacilitationof convenience for all buyers; especially overseas The servicesrenderedwouldbeusefuland discerning needsofourvaluedcustomers. M Concierge has been set up tomeet the service forallMahSing’s propertyowners. M Conciergewillbeaone-stopprofessional benefits. privileges andmanymoreexceptional lifestyle lifestyle experiencethatincludesmembers’ buyers byprovidingthemwithatotalpremier is ourwayofshowingappreciationtovalued like MPrivilegeandConcierge. MPrivilege its customersbyofferingvalue-addedservices Mah Sing continues its effort toearn the loyalty of CUSTOMER SERVICE Wellbeing andCommunityDevelopment. Foundation’s 3key pillars;Education,Health& used forcharitableinitiativesfocusedonthe and corporations.Thefundsraisedwillbe total of RM6.3 million from charitable donors of children.TheMahSingFoundationraiseda a lastingchangeandsustainabilityinthelives with parents,familiesandcommunitiestohave lives. TheFoundationaimstoworkclosely hope, creating lasting change in children’s introduce its new logoandvision; Reinventing 2017 alsosawtheMahSingFoundation MAH SINGFOUNDATION now ownahome. aim toprovidemoreaffordableproductssothateveryonecan Sing’s newdirectionofReinventing Space, EnhanceLifeaswe acquisitions willbedevelopedtotheadvocatesofMah 3 newlanddealsinSentul,CherasandPermatang. Thenew active inincreasingcurrentlandbankastheGroupacquired City’s Savanna Executive Suites. Mah Sing also were also for Lakeville Residence, TheLoft, D’sara SentralandSouthville saw the Group celebrate 4 successful topping up ceremonies It hasbeenaproductiveyearinthepropertydivision,as2017 20 projects billion RM18.4 GREATER KL retail, hotel,SOVO) (shops, offices, Commercial billion RM8.2 23 30 % % 6 projects billion RM6.2 JOHOR LOCATION MIX development value) development value) 10 OFFERINGS (remaining gross (remaining gross (remaining gross (remaining gross STRATEGIC PRODUCT % BROAD landed) (high-rise and Residential billion RM17.9 5 % 1 % 4 projects billion RM2.9 PENANG 66 Industrial billion RM1.5 65 % % 2 projects billion RM0.1 SABAH 31 Our Strategy & Achievements Mah Sing Group Berhad AND ANALYSIS MANAGEMENT DISCUSSION MANAGEMENT Artist impression of The Loft@Southbay, Penang Artist impression of The Loft@Southbay, This achievement personifies Mah Sing’s excellent safety excellent Sing’s Mah personifies achievement This record and effective site management as we places quality strong emphasis on ensuring safety and excellent operations. across all of its projects’ IN KLANG VALLEY GALLERIES 3 NEW SALES sales galleries of various saw the opening 2017 also successfully launched 3 within the Central region. We Cheras, M Centura in Sentul in sales galleries, M Vertica and M Aruna in Rawang. which in model turnover quick a practices Sing Mah we purchase the land and targets to obtain necessary licenses and construct the sales galleries within 9 months immediate demand. to cater to the market’s year rd TOPPING UP CEREMONIES & SAFE MAN- SAFE & CEREMONIES UP TOPPING HOURS are pleased to announce that Mah Sing We ceremonies 4 topping up carried out successfully Savanna Southville City’s in the year under review. Residence, Suites, Bangi, Lakeville Executive Penang The Loft, Southbay City’s Jalan Kuching, Sentral, Sungai Buloh. and D’sara Among the 4 projects, Savanna Executive Sentral D’sara and Residence Lakeville Suites, successfully recorded 6.3 million, 8.4 million and 4 million safe man-hours respectively. In enhancing lives further, we launched our In enhancing lives further, that Affordability’ campaign flagship ‘Reinventing affordable. aimed to redefine what it means to be in the industry, we launched our RM23 million in the industry, The campaign was designed Celebration Reward. chance to reward our customers as they stood the packages, of taking home luxury cars, furnishing cash back and subsidies. INNOVATIVE SALES STRATEGIES SALES INNOVATIVE wanted to focus on enhancing the lives of our We our 23 in celebrating customers. Hence, As a market driven developer, our objective is driven developer, As a market we went 2017, needs. In to cater to the rakyat’s by reinventing what it all out for our customers that key projects through means to affordable on strategic pricing points, not only emphasizes M Vertica Take connectivity. but also quality and price the affordable despite as an example, deck facilities largest the has the project point, Lumpur in Kuala for a residential development acres that houses more than with a total of 4.5 also We under one roof. 40 luxurious facilities the best continue to provide our buyers with on living conditions that place a strong emphasis the accessibility and connectivity thus enhancing is value of the project. Infrastructure development will always invest in an integral part of this plan. We enhance facilities, amenities and infrastructures to the lives of our customers. 32 Annual Report 2017 Our Strategy & Achievements AND ANALYSIS MANAGEMENT DISCUSSION Interchanges andnewaccessroad. Enhancing thelivesofourbuyerswithinfrastructureinvestment.Updateson CONNECTIVITY and Boulevardshops. and 236unitsofSavannaLifestyle with theupcomingcommercialhubs hub betweenKLIAandKuala Lumpur Southville City anupcoming tourism only 19kmbutcanalsohelptomake reduce thedistancetoKLCity 2018. Theinterchangewillnotonly 2018 andreadyforuseasof11April by MinisterofWorks on26March for theinterchangewasofficiated South Expressway. The softlaunch located atExit212AoftheNorth- the SouthvilleCityInterchange and KLCity, MahSing developed between SouthvilleCityinBangi In anefforttobridgethedistance SOUTHVILLE CITYInterchange Bayvue. Bahru EastCoasthighwaytoMeridin approximately 12kmfromtheJohor to approximately 11minutesand access willshortentraveltime The constructionofthisdirect East CoastHighway. the development to the Johor Bahru direct accessthatgoesinandoutof Perdana issettobenefitfroma integrated complexinSierra Meridin Bayvue, seafront mixed MERIDIN BAYVUE Accessroad end of2020. and scheduledforcompletionby Meridin EastcommencedinQ12018 Construction forconnectingroadin between 15minutesto45minutes. Tanjung Langsat andPasir Gudang and thesurroundingcommunityto Mah Sing’s MeridinEastTownship road it will shorten the travel of Highway inJohor. Withtheconnecting which formspartoftheSenaiDesaru Baru Toll ConnectingHighway, into theTanjung Langsat –Cahaya construction ofaconnectingroad The Groupannouncedthe MERIDIN EAST Interchange 33 Our Strategy & Achievements Mah Sing Group Berhad AND ANALYSIS MANAGEMENT DISCUSSION MANAGEMENT PROSPECT AND OUTLOOK PROSPECT DIVISION PLASTIC on 15th October Incorporated in Malaysia Plastics Industries Sdn. Bhd. Mah Sing 1979, subsidiary of Mah (MSPI) is a wholly-owned Plastics Division Malaysia Sing Group Berhad. measuring land leasehold of piece a purchased meter next to its current factory square 20,157 Klang for expansion purposes in 2016. in Port additional an building involves expansion The which is expected manufacturing plant by the completion and commencement date is sales end 2018 to cater for the encouraging as well growth of the local and export market to as to provide additional production capacity sustain long-term growth. Operating in both Malaysia and Indonesia, contribute to continues division plastics the positively to the revenue of the Group amounting plastics division The million in 2017. to RM296.2 of is expected to continue to sustain its growth operations in Malaysia and Indonesia. DIVISION PROPERTY over the Developments in the Malaysian market the in are we that shown have months 12 past burgeoning stages of demand for affordable is taking the Mah Sing Group housing and necessary steps to ensure the long-term sustainability of our business prospects. still will there that believes company The products, right the with demand decent be pricing and location. The Group have started developing accessible and well-planned residential products priced below RM500,000 in strategic locations since 2014 with our main We goal to enable everyone to own a home. our brand in positioning full force are going developer for affordable leading as Malaysia’s homes which still come with premium features. As with any business, the Group may face competition from its peers. With peers. its from competition face may Group the business, any with As a strong branding, strategically located land banks as well as an established measures to address the track record, the Group will continue to take intelligence studies to competition risk such as conducting market needs, monitoring and adjusting development products understand buyers’ strategies in response to changing economic conditions and and marketing demand. market In any financial year, some fluctuation of the Group’s revenue, profit and revenue, some fluctuation of the Group’s In any financial year, value operating cash flow may occur depending on the sales performance, All of the Group’s and construction progress of the projects undertaken. projects are at different stages of construction in order to allow the Group to have sustainability in terms of profit and cash flow. MANAGING ANTICIPATED OR KNOWN RISKS OR KNOWN ANTICIPATED MANAGING financial policy of maintaining The Group will continue to adhere to its prudent This will ensure it remains healthy net gearing ratio and ample liquidity. and investment opportunities as they flexible to respond to land acquisition joint acquisitions, land potential for out look to continue will Group The arise. area. The Lumpur greater Kuala ventures and investments, mainly in the growth opportunities without taking Group is focused on finding acceptable on too much risk. Artist impression of Southville City, KL South Artist impression of Southville City, 34 Annual Report 2017 Our Strategy & Achievements AND ANALYSIS MANAGEMENT DISCUSSION Aerial viewofupcomingMCentura,Sentul sheet. We haveaminimum RM1.8billionsales land acquisitions, armed with our healthy balance billion. We willalsocontinue tobeactiveinour to achieveoursalestargetof minimumRM1.8 approach in2018andphase outourlaunches in 2018.We willcontinuetoadoptstrategic Group is cautious but optimistic of the prospects As weenterintothenewfinancialyear, the 2018 TARGET term rentalincome. are buyingtoownorinvestforlong- continue tobestrongforpropertybuyerswho preservation inMalaysia.Long-term demandwill of themostpreferred asset classesforwealth the best hedges against inflation and is one range ofproperties.Propertyisstillone the middleincomegroupwithourdiversified supply shortageofaffordablehomescateringto Mah Singisalsoinagoodpositiontoaddressthe execution. driven propertyportfolioandtrackrecordof leveraging onitsstrongliquidityprofile, demand and iswellpositionedformarket recovery, long-term prospects of the property market The Group remains positive of the medium to population whoarelookingfortheirfirsthomes. homes forMalaysia’s youngdemographicandgrowing and centreforMahSingaswewillfocusondeveloping priced belowRM500,000. For2018,affordabilityisfront target thisyear, with74%oftargetedresidentialsales • Johor East homes inMeridin 2-storey link UPCOMING LAUNCHES • • • • • Greater KL M Aruna,Rawang Tower C&D, SouthvilleCity Cerrado Residential Suites Southville City Sensa Residence, M Centura,Sentul M Vertica, Cheras • • Penang M Parc, BukitMertajam Residence New towers of Ferringhi 35 Our Strategy & Achievements Mah Sing Group Berhad AND ANALYSIS MANAGEMENT DISCUSSION MANAGEMENT The property industry is currently undergoing consolidation The property industry is currently undergoing nevertheless, the Board is confident that with the Group’s strategically placed established strong brand name, developments and right product strategies, the Group will continue to move forward resiliently. to convey our sincere On behalf of the board, we would like appreciation to our shareholders, business associates, for your customers, the Government and local authorities will continue to continued support and belief in Mah Sing. We work towards building better lives together. WE ARE COMMITTED TOWARDS TOWARDS WE ARE COMMITTED SATISFACTION CUSTOMER TOTAL ADDED VALUE AND PROVIDE LIKE M PRIVILEGE AND SERVICES M CONCIERGE. We aim to provide our customers with prompt delivery We our uncompromising through services and flexible commitment towards total customer satisfaction. A one-stop centre was set up with centralised feedback more feedback customer’s to manage system the Understanding systematically. and efficiently we also provide value importance of customer care, M Privilege and M Concierge to added services like our loyal customers. We are also committed on the professional We It is important to development of our people. concentrate on strengthening our customer service, to improve our systems, processes and the level of professionalism of our front liners so as to keep customers, and other homebuyers our delighting reinforcing the Mah Sing Group brand. The Group is confident that with our planned launches The Group is confident that with our planned on last year’s for 2018, we will be able to improve to sustain performance and are in a good position will also continue to collaborate with our growth. We projects. strategic partners to add value to our ongoing the Group meticulously accessed Focusing on quality, stage its work processes from planning to completion company’s to ensure the end products fulfils the quality control. June 2018. Mah Sing will also be launching M-Parc, the Group’s the Group’s Mah Sing will also be launching M-Parc, in Penang Mertajam, in Bukit park industrial new Our planned new residential launches below launches below new residential Our planned in include M Centura in Sentul, M Vertica RM500,000 and Residence new Sensa Cheras, Southville City’s C and D in Greater Suites Tower Cerrado Residential in Johor Bahru 2-storey link homes KL, Meridin East’s 2 in Penang. Ferringhi Residence and new towers of launch in 2018 above Our only new residential which are 2-storey is M Aruna in Rawang RM500,000 priced from RM550,000. link homes indicatively have existing products below Besides that, we Cerrado which include Southville City’s RM500,000 Suites, Residensi A&B and Savanna Executive Tower Jalan Kuching, Residence, in Lakeville Seri Wahyu 2 and Meridin Rumah Selangorku in M Residence Bayvue in Johor. 36 Annual Report 2017 Our Strategy & Achievements OPERATIONS REVIEW OF THE PROJECTS. SYMBOLISES THESTRUCTURAL COMPLETION OF RESPECTIVE TOPPING UPCEREMONIESTHAT BULOH SUCCESSFULLY CARRYING OUTTHEIR KUCHING ANDD’SARA SENTRAL INSUNGAI IN PENANG,LAKEVILLERESIDENCEJALAN SUITES INKLSOUTH,SOUTHBAY’S THELOFT SOUTHVILLE CITY’SSAVANNA EXECUTIVE SING GROUPSAW 4 OFITS PROJECTS; IT HAS BEENAPRODUCTIVE YEARAS MAH D’sara SentralinSungaiBuloh. City’s SavannaExecutive Suitesand Residence inJalanKuching, Southville as welldeliverVPforLakeville Southville CityandMeridinBayvue its new infrastructural upgrades for its landbankingactivities,deliveron In 2018,MahSingislookingtoincrease weekend launch. recorded an 85% take up rate during a while MVertica inBatu2.5,Cheras take upratefromtheunitsopened, Batu Maung,Penang recorded a 95% 2 inPasir Gudang,JohorandMVistain Sentul, MeridinEast’s TheFernPhase campaign inQ42017. MCenturain part ofits‘Reinventing Affordability’ Mah Singalsolaunched4projectsas Southville City’s Avens Residence. Residence’s Retail Shopsaswell Tower 2andGourmetStreet, Lakeville Tower 3andSkyResidence, IconCity’s out Vacant Possession (VP)forMCity’s Group hasalsosuccessfullycarried Rawang. Intheyearunderreview, the in SentulandMArunaSalesGallery launch MVertica inCheras,MCentura 2017 alsosawtheGroupofficially INTRODUCTION Projects Total 47 1 6 7 33 Sabah Penang Klang Valley Iskandar Johor 37 Our Strategy & Achievements Mah Sing Group Berhad REVIEW OF OF REVIEW REVIEW OPERATIONS OPERATIONS DEVELOPMENT TYPE: DEVELOPMENT High-rise residential DEVELOPMENT TYPE: DEVELOPMENT 2-storeyHigh-rise residentialand retail shops STATUS: STATUS: Ongoing STATUS: STATUS: Ongoing This is a Transit Adjacent Development (TAD), strategically located Adjacent Development (TAD), This is a Transit 500 of Cheras. It sits approximately in the mature neighbourhood interchange from the Maluri MRT/LRT meters and is walking distance is a mixed M Vertica Station. MRT Pertama and 800m to the Taman ft up of 850sq ft (3-bedroom) and 1,000sq development with built component.(4-bedroom) for its residential residentialthe Vertica, M of homeowners of lives the enhance To views of the KL city. units are designed to have unobstructed totower every connects directly that bridge also a link is There also plans to developthe facilities deck for easy access. Mah Sing subject to M Vertica, a dedicated ramp from Jalan Cheras into approval from the local authorities. outlets i.e. major shopping Cheras’ is situated close to M Vertica Cheras, IKEA Shopping Centre, Mall, My TOWN Sunway Velocity In addition, the developmentAEON Maluri and Viva Home. Pantai Medical Center, allows residents to access Prince Court Malaysia, SMK Hospital Ampang, Hospital University Kebangsaan Kheung Chinese Naam Pudu, SK Convent Jalan Peel, Perempuan Club and more all within a Selangor Golf National School, Royal 5km radius. a home as well as theM Centura offers buyers the comforts of giving buyers the city, convenience of being in a prime location in the best of metro living and urban experiences. The development menu of modern and luxury conveniences comes with an exciting without the hefty pice tag. M Centura is a 100% freehold residential development with built ups starting from 646sq ft (2-bedroom) to ft (4-bedroom). 1,001sq M Centura has 1-acre of resort facilities, which include an Olympic- childcare area and length swimming pool, wading pool, laundry bar, highlightedthe of One buyers. the of convenience more for the features would be the dual floating gym, where residents get to enjoy the beautiful view of the facilities deck while exercising. directa with development this to key is accessibility Convenient stations. and MRT shuttle from M Centura to the nearest LRT Station Nearby public transportation include the Sentul Timur LRT (3.5km away). There are Station (2.4km away) and the Sentul LRT Batu and Batu also 3 KTM stations which are Sentul, Kampung 3km away. located approximately Kentonmen SIZE: 8.9 acres SIZE: 11.25 acres EST. GDV: GDV: EST. RM1.3 billion EST. GDV: GDV: EST. RM2.2 billion Sentul, Klang Valley Batu 2.5 Cheras, Klang Valley WON IN 2018 AWARDS Starter Starter Home Award StarProperty.my Awards Awards - StarProperty.my Location: Location: 38 Annual Report 2017 Our Strategy & Achievements OPERATIONS REVIEW OF Small isBIG Award forCerrado, Southville City andStarProperty.my Awards 2018- Location: Location: Neighbourhood Awards (Excellence) Neighbourhood Awards StarProperty.my Awards 2017- AWARDS WON KL South,Selangor Rawang, Selangor RM11.1 billion EST. GDV: RM520 million EST. GDV: 96.7 acres SIZE: 428 acres SIZE: project istargetedforapreviewbyQ22018. Its salesgallerywasofficiallylaunchedinNovember2017andthe Metrobus andSJBuses. buses throughout theKuala Lumpur-Rawang routesuch as RapidKL, Tanjung Malim.Theareaisalsoservedbyexistingpublictransportof station ofKTMKomuter’s Rawang-Seremban routeextendedtill approximately 20 minutes.Rawang is connected via the terminal has startedoperation.ThisshortenthetravellingtimetoKLby expressway, aswelltheextensionfromJalanTasik Puteri,which The townshipbenefitsfromtheaddedaccesstoLATAR park andahalfbasketball court. themed playground,relaxinghammocks,joggingtrack,kidsbicycle facilities offeredsuchasthe1-acrecentralparkwithatreehouse Outdoor livingisfurtherenhancedinMArunawiththerangeof and thebestlayouttopromoteenergysavingwithintownship. M Arunawillprovideagreensanctuarytoencouragesustainability The townshipwillbedevelopedbasedona‘SecretGarden’ concept. homes; AsterandBasil,whilePhase2consistsofAvery andCarissa. M Residence 2.Phase1comprisestwotypesoftwo-storeylinked This istheGroup’s thirdtownshipinRawang afterMResidence and Residential Suitesaresettobelaunchedin 2018. Cerrado’s Tower CandTower D, aswellSouthvilleCity’s Sensa Suites starteditsVPinMarch2018. Residence starteditsVPinlate2017while SavannaExecutive than 95%whileSavannaLifestyleShopsis90%taken up. Avens Shops. Thetake uprateforSavanna Executive Suitesismore ceremony ofSavannaExecutive SuitesandSavannaLifestyle In 2017, SouthvilleCitycelebratedthesuccessfultoppingup will nowbemere19kmdriveawayfromKuala Lumpur. highway scheduledtoopenforuseinmidApril,thedevelopment living. WithSouthvilleCity’s directinterchangefromtheNorth-South sustainable, conduciveandsafeenvironmentformulti-generation The mixed-use masterplannedcommunityaspirestocreatea Ongoing STATUS: Ongoing STATUS: Landed Residential &Retails Shops DEVELOPMENT TYPE: Residential, Retail Shops&more High riseResidential, Landed DEVELOPMENT TYPE: 39 Our Strategy & Achievements Mah Sing Group Berhad REVIEW OF REVIEW OPERATIONS DEVELOPMENT TYPE: DEVELOPMENT tower High-rise residential, SoVo and retail shops DEVELOPMENT TYPE: DEVELOPMENT retail shops High-rise residential and STATUS: STATUS: Ongoing STATUS: STATUS: Ongoing This transit-oriented development (TOD) has direct access to the This transit-oriented development (TOD) station under the Sungai Buloh-Kajang Selamat MRT Kampung Line 1. It houses an impressive podium deck of 52 facilities.MRT was launched in 2017. Residence, OLO The final tower, componentsresidential and commercial both has Sentral D’sara SB1 and OLO SA2, SA1, Tower, consisting of retail shops, SoVo which are nearing completion. Residence Sentral are targeted for tower in D’sara The retail shops and SoVo are targeted for VP in Q2 2018. and SA2 VP by Q1 2018, while SA1 Mah Sing has completed construction of the covered direct link station. It is expected to be Sentral to the MRT bridge from D’sara open for use by Q1 2018. was held & SA2 SA1 Tower tower, up of retail shops, SoVo Topping The project also celebrated 4 million safe man in November 2017. hours injury & received 4 star in safety and Health Assessment by CIDB. in Construction (SHASSIC) System Located strategically along Greater KL’s River of Life, Lakeville Lakeville of Life, River strategically along Greater KL’s Located the Sungai Buloh- living. It is also near to lakeside offers Residence 2, Sri Delima station. There will Line MRT Serdang-Putrajaya (SSP) service – that stops right in front of Lakeville also be a feeder bus station. users to the MRT transport MRT – to Residence B, E and F as well as the A, up ceremonies for Tower Topping is also Residence Lakeville held in July 2017. facilities podium were and Compliancetargeting to obtain its Certificate of Completion A and B. (CCC) in Q1 2018 for Towers E and F are nearing completion while Construction for Tower construction in December 2016, which started C and D, Tower 45% completion. 10 units of 3 and 4-storey are at approximately The project also 2017. shops has successfully carried out VP in Q1 celebrated of 8.4 million safe man hours. a RUMAWIP Seri Wahyu, of the development, Residensi Part was launched in Marchproject that features 660 residential units and is scheduled for It is still undergoing construction work 2017. completion by 2021. SIZE: 6.55 acres SIZE: 12.38 acres EST. GDV: GDV: EST. RM937 million EST. GDV: GDV: EST. RM1.5 billion Sungai Buloh, Klang Valley Jalan Kuching, Klang Valley Jalan Kuching, Location: Location: 40 Annual Report 2017 Our Strategy & Achievements OPERATIONS REVIEW OF Board’s (CIBD)QLASSICDay–Best Location: Location: 2 High QLASSIC Achievement Awards QLASSIC AchievementAwards High 2 Construction IndustryDevelopment Achievement Award and and Achievement Award AWARDS WON IN2017 Rawang, Selangor Petaling Jaya,Selangor RM948 million EST. GDV: RM3.2 billion EST. GDV: 20 acres SIZE: 226 acres SIZE: development iscurrentlyintheplanningstage. Tower 2hasobtainedCCCinFebruary2017. Phase2ofthe 1, SoVo towers,NeonFoodHub, 30JewelandVolt Tower while Phase 1ofIconCitywascompletedwithVPforResidence Tower Green BuildingIndex(GBI),MarkandLEED. development andiscertifiedwith3greenstandardswhicharethe Icon CityhadobtainedMSCCybercentrestatusforitsentire an elevatedrampfromtheFederalHighway. Federal Highway. Italsohasdirectaccessintothedevelopmentvia the intersectionofLebuhraya Damansara-Puchong(LDP)and Icon Cityisamixed integrated developmentstrategicallylocatedat Q1 2017. Phase 6b, whichfeaturesCanalLinkhomes,completeditsVPin Earlier phasesofMResidence weresuccessfully handedover. upcoming developments. link home) and M Galleria (2 and 3-storey shop offices) with more homes, Corus68(2-storeysemi-Dhomes),CanalLink(2½-storey development. Thedevelopmentcomprises2-storeysuperlink This isalow-densityandguardedmasterplannedcommunity Ongoing STATUS: Ongoing STATUS: MSC buildingandretailshops High-rise residential,SoVo tower, DEVELOPMENT TYPE: Landed residentialandretailshops DEVELOPMENT TYPE: 41 Our Strategy & Achievements Mah Sing Group Berhad REVIEW OF REVIEW OPERATIONS DEVELOPMENT TYPE: DEVELOPMENT Shopping Mall DEVELOPMENT TYPE: DEVELOPMENT retail shops residential and Landed STATUS: STATUS: Completed STATUS: STATUS: Ongoing This is a 4-storey shopping mall with an approximate built-up area built-up This is a 4-storey shopping mall with an approximate ft. The retail mall fronts the thoroughfare of Jalan of 295,000sq Damansara. Sungai Buloh, which links Shah Alam to Kota an occupancyhas Lifestyle Mall Avenue Star December 2017, at As DIY, Mr. as Giant Superstore, tenants such rate of 73% with key Brands Outlet and Next Food Court. The mall regularly organises festive events and promotions to further enhance its brand awareness. This is a guarded and gated masterplanned communityThis is a guarded comprises Alpine (2-storey linkdevelopment. The development link homes), Caspia (2-storey semi-Dhomes), Birch (2-storey (semi-D). Birch, Alpine and Dalea havelink homes) and Dalea the VP in 2016. Caspia has also startedsuccessfully completed 2017November and May in C2 and C1 Caspia of VP delivering Club House targeted for completion in Q2respectively with the 2018. project which consists of two Rumah Selangorku 2’s M Residence ft. Blockup of 850sq a built units with 488 total of blocks features a completed by August A is at 90% completion and is expected to be 2018. SIZE: 18 acres SIZE: 157 acres EST. GDV: GDV: EST. RM465 million EST. GDV: GDV: EST. RM639 million Sungai Buloh, Selangor Rawang, Selangor Rawang, Location: Location: 42 Annual Report 2017 Our Strategy & Achievements OPERATIONS REVIEW OF Property InsightPrestigious Developer Awards -BestFacilities Development Location: Location: AWARDS WON IN2017 Cyberjaya, Selangor Jalan Ampang,KlangValley RM1.8 billion EST. GDV: RM1.6 billion EST. GDV: 5 acres SIZE: 150 acres SIZE: started operationsinMarch2018. Q1 2017. The anchor tenant of the retail component, Village Grocer highlight ofMCity, whichisitshanginggardens,wascompletedin Tower 1,2,3aswellSkyResidence hascompletedVP. The mini theatre, climatecontrolledpoolandmore. features aSkyGym,indoorrockclimbingfacility, golfsimulator, luxurious facilitiesincludingstate-of-the-art4-tierAltitudeClubthat of Taman Tasik AmpangHilirandTitiwangsamountainrangewith designed to capture the iconic view of KLCC, the serene views gardens, thefirstofitskindinMalaysia.Thedevelopmentis This is a mixed development with multi-level thematichanging sold andGardenBoulevardShopsareopenforlease. completed andhandedoverin2015.Theresidentialunitsarefully Part of the GardenResidence development,GardenPlazawas cafes, restaurantsandmore. outlets offeringbridalservices,anIslamicinternationalschool, for lease. AsofJanuary2017theoccupancyrateisat80%,with The Promenade–alakefront facility at GardenResidence isready equipped withaprivateliftandrooftopJacuzzi. 7,796sq ft.Eachunitcomeswith9+1bedroomsand9bathrooms Aspen whichfeatures3½-storeybungalowwithbuilt-upof bungalows whichhassuccessfullydeliveredVP. Garden Residence compriseslinkhomes,semi-Dhomesand Completed STATUS: Completed STATUS: High-rise residentialandretailshops DEVELOPMENT TYPE: residential andretailshops Landed residential,high-rise DEVELOPMENT TYPE: 43 Our Strategy & Achievements Mah Sing Group Berhad REVIEW OF REVIEW OPERATIONS DEVELOPMENT TYPE: DEVELOPMENT High-rise residential, shop offices and retail shops DEVELOPMENT TYPE: DEVELOPMENT High-rise residential STATUS: STATUS: Completed STATUS: STATUS: Completed Kinrara Residence is located in the mature township pf Puchong, is located in the Kinrara Residence a popular Hitam Forest Reserve, Ayer adjacent to the 3,000-acre Preceding phases of the 126 spot for jungle walks and exercises. acres township was completed and handed over progressively since 2013. comprises 145 units of three-storey Ambrosia The final phase, and superior semi-detached homes was fully bungalows executive completed and handed over. This freehold service apartment drew its architectural inspirationThis freehold service In waterfront resort and coastal towns. from the Mediterranean unit. every unit as a corner Icon Residence, has been Iconic Series, 90% of the development One of Mah Sing’s from the handed over to the respective home owners up and taken total of 290 units launched. SIZE: 4.26 acres SIZE: 3 acres EST. GDV: GDV: EST. billion RM1.1 EST. GDV: GDV: EST. RM389 million Kinrara Residence Puchong, Selangor Kinrara Residence Mont Kiara, Klang Valley Location: Location: 44 Annual Report 2017 Our Strategy & Achievements OPERATIONS REVIEW OF (Merit) andStarproperty.my Awards Johor– Jewels of StarProperty.myFamily-Friendly– The Awards Award Starproperty.my – Johor of Awards Jewels Location: Location: The BestHighRiseResidential (Merit) The Best Waterfront Development(Merit) AWARDS WON IN2017 AWARDS WON IN2017 Iskandar Puteri, Iskandar Malaysia Iskandar Puteri, Malaysia Pasir Gudang,IskandarMalaysia RM1.5 billion EST. GDV: RM5 billion EST. GDV: 1,313 acres SIZE: 8.2 acres SIZE: April &August 2018 respectively. are 90% and 85% completed with a targeted completion date of The other2residentialcomponentsGreenwayandEden and TheFernPhase2. 2017 also saw Mah Sing launch its 2-storey linked homes; Dandelion Meridin East. has beenofficiallyannouncedasthefirsteducationalinstituteof Jalan Kong Kong. Inaddition,aChinese-mediumprimaryschool Kong, aswellsuccessfullycarryingoutroadworksintowidening connecting road from Senai-Desaru Highway into Jalan Kong In theyearunderreview, MahSingcommittedtobuildinga Highway. Pasir GudangHighway, Senai-DesaruHighwayandJBEastCoast development has direct access or links to major highways like with 1,313acresoflandinEasternIskandarMalaysia.The This isMahSing’s largestmasterplannedcommunitydevelopment make Meridin@Mediniitsofficialstudent accommodationprovider.. Mah SingalsoannounceditscollaborationwithEduCityMalaysia to components areontrackforVPbyQ12018. over inJune2017whiletheExecutive Suites,aswelltheretail Meridin Medini’s servicedresidencewassuccessfullyhanded Ramada Encore Meridin andwill carry out itssoftlaunch in Q2 2018. Group –tobranditshotelservicesuites,Ramada Meridinand embraces theworld’s largesthotelcompany–Wyndham Hotel Located nearLegoland MalaysiaandMediniBusinessDistrict,it This isMahSing’s firstintegrateddevelopmentinIskandarPuteri. Ongoing STATUS: Ongoing STATUS: retails shops retails shops High riseresidential,hotelsand DEVELOPMENT TYPE: Retails Shops High RiseResidential, Hotelsand DEVELOPMENT TYPE: 45 Our Strategy & Achievements Mah Sing Group Berhad REVIEW OF REVIEW OPERATIONS DEVELOPMENT TYPE: DEVELOPMENT and Retails High Rise Residential Shops DEVELOPMENT TYPE: DEVELOPMENT ShopsIndustrial Factories, 3-Storey and Industrial Lots STATUS: STATUS: Ongoing STATUS: STATUS: Completed Meridin Bayvue boasts excellent connectivity to various points connectivity to various Meridin Bayvue boasts excellent Highway from Pasir within the city as it is fronting the Coastal Gudang to Johor Bahru City Centre. serviced residences were successfully Caspian@Meridin Bayvue’s Covil@Meridin 2017 while its second phase handed over in August Bayvue has launched its first tower in Q3 2017. i-Parc@Tanjung Pelepas consists of detached factories, semi- consists of detached factories, Pelepas i-Parc@Tanjung shops and industrial lots. The projectdetached factories, 3-storey 4-in-1 centralised masterplan where factory, features an intelligent easily from one showroom and warehouse can all operate office, central location. located only 1km away from theThe development is strategically to Iskandar in close proximity It is also Pelepas. of Tanjung Port amenities such as upcoming hi-tech High-Speed Rail key Puteri’s to Singapore. Lumpur (HSR) that runs from Kuala of 3-storey shops wereThe first batch of 83 factories and 38 units factoriessuccessfully handed over in Q4 2016. The semi-detached and 3-storey shops were delivered in Q2 2017. SIZE: 10 acres SIZE: 210 acres EST. GDV: GDV: EST. RM695 million EST. GDV: GDV: EST. RM913 million Iskandar Malaysia, Johor WON IN 2017 AWARDS Industrial/Warehouse in Malaysia Industrial/Warehouse Award (Honours) and 13th Euromoney Award Iskandar Malaysia, Johor Location: Location: StarProperty.my Awards – The Business Estate Business The – Awards StarProperty.my Annual Real Estate Survey for Best Developer – Annual Real 46 Annual Report 2017 Our Strategy & Achievements OPERATIONS REVIEW OF Location: Location: Batu Ferringhi,Penang Batu Maung,Penang RM651 million EST. GDV: RM140 million EST. GDV: 2.02 acres SIZE: 9.95 acres SIZE: Penang airportonly7kmaway. banks, schoolsandentertainmentcentreslocatedwithin10kmwith Families willfinditconvenienttohaveshoppingmalls,hotels, residents can easily access to the mainland or Georgetown area. to Penang’s 1stbridgeandnearTun DrLimChongEuExpressway, Strategically locatedonly1kmfromPenang’s secondbridge, 9km unit tothe1,201sqftwith3+1bedroom. units. Itfeaturesatotalof5typesbuiltupsfrom536sqftstudio M Vistaconsistsofone23-storeytowerwithatotal237residential development willbelaunchedin2018. 1,208sq ftwaslaunchedin2016.Thenewertowersofthe of theprojectwhichwasTower B(478units)withbuiltupsfrom Ferringhi Residence 2 has a total of 3 towers. The first phase are lessthan10kmaway. Locations suchasTanjung Bungah,GurneyDriveandGeorgetown walk fromtheirhomestovisitthetouristsidewalksalongroad. It branchesoffJalanBatuFerringhiwhereresidentscancomfortably The developmentiseasilyaccessiblethroughJalanSungai 1. (Uplands). developments aswellTheInternationalSchoolofPenang international beachhotelsand5-starresortcondosasneighboring Ferringhi Residence 2 strategically situated amongthevicinityof Ongoing STATUS: Ongoing STATUS: High-rise Residential DEVELOPMENT TYPE: Resort Condominium DEVELOPMENT TYPE: 47 Our Strategy & Achievements Mah Sing Group Berhad REVIEW OF REVIEW OPERATIONS DEVELOPMENT TYPE: DEVELOPMENT High-rise residential, shop offices and retail shops DEVELOPMENT TYPE: DEVELOPMENT suites,High-rise residential, office shops shopping mall and retail STATUS: STATUS: Completed STATUS: STATUS: Ongoing This is an integrated development located just across SuteraThis is an integrated development located a new overhead pedestrian The construction of Harbour Resort. to Riverson will commence link bridge connecting Sutera Avenue work by the end of 1Q 2018. Its inherent features as an integrated development combined with its strategic location sees it as a viable location for night markets. hosted its very first ‘The Qube Sutera Avenue In December 2017, 30 stalls consisting food trucks, that featured over Night Market’ clothing stalls and arts & craft shops. and have been granted CCC. 1, 2 and 3 are completed Towers Commercial retail and offices in Blocks A and B are completed with CCC obtained. This development is located along the scenic Jalan Permatang located along the scenic Jalan Permatang This development is away from the Penang and is only 1km Lepas in Bayan Damar Laut second-link bridge. which houses 156 of the development includes The Loft Part this floor, each on units 3 only With blocks. tower 2 in suites luxury waterfront, of the Penang promises a panoramic view exclusivity successfully delivered all round. The Loft with breath-taking vistas VP in December 2017. SIZE: 4.26 acres SIZE: 33 acres EST. GDV: GDV: EST. RM502 million EST. GDV: GDV: EST. billion RM2.09 Kota Kinabalu, Sabah Kota Batu Maung, Penang for The for The Loft WON IN 2017 AWARDS WON IN 2018 AWARDS StarProperty.my Awards Awards – StarProperty.my StarProperty.my Awards Awards - StarProperty.my Prestigious AwardsDeveloper Prestigious – Best High-Rise Development Borneo Star Awards (Honours) Awards Borneo Star The Northern Star Award (Merit)Award Northern Star The for The Loft and Property Insight and Property Loft The for Location: Location: 48 Annual Report 2017 LEADERSHIP OUR Our Leadership training hours >22,500 invested inourpeople 49 Our Leadership Mah Sing Group Berhad Mah Sing started off in 1965 as a humble plastic way long a has come Group The company. trading since then and has grown to an established brand All this is made that is known to the public today. possible as the Group is spearheaded by a group of qualified and professional leaders. Combined with the hard work and dedication of its employees (also known as MSians), the brand has won over 200 domestic and international awards that recognises and quality products. its service excellence 50 Annual Report 2017 Our Leadership BOARD OFDIRECTORS PROFILE OFTHE Board Meeting • • • • financial year financial year convened duringthe Committee Meetings Meetings and4Audit Attended all4Board Audit Committee Member ofthe Committee Remuneration Chairman ofthe Committee the Nomination Chairman of 4/4 JEN. TAN SRIYAACOB 82 AGED BIN MAT ZAIN(R) Chairman/Independent Non-Executive Director Date ofAppointment:29June1994 MALE GENDER MALAYSIAN NATIONALITY Company. and/or majorshareholderofthe between himandanydirector There isno family relationship Kebangsaan Berhad. Berhad andSyarikat Permodalan Affin HwangInvestmentBank Company, heisthe Chairman of Apart fromhisdirectorshipinthe School. Programme at Harvard Business and theAdvanceManagement Studies intheUnitedKingdom Royal College of Defence United States ofAmerica,the Graduate SchoolinMonterey, Staff College, theNavalPost Army GeneralCommandand attended coursesattheAustralian Tentera Malaysia.Hehad in 1993asaPanglima Angkatan Tentera Malaysiabeforeretiring nearly 40yearsinAngkatan distinguished careerspanning Jen. Tan SriYaacob hada QUALIFICATION (S) ACADEMIC /PROFESSIONAL 51 Our Leadership Mah Sing Group Berhad PROFILE OF THE PROFILE BOARD OF DIRECTORS BOARD ACADEMIC / PROFESSIONAL / PROFESSIONAL ACADEMIC (S) QUALIFICATION Hoy Kum Sri Leong Dato’ Sri Tan manufacturingfounded the plastics Mah Singdivision in 1979 and listed Lumpur Kuala Group Berhad on the in 1992. He has Exchange Stock Committee ofbeen on the Central PlasticsMalaysian 900-member the Manufacturers Associations since 1986. He is also the Honorary Malaysian President of the Young Movement Association (YMM) since 1999 and of The Dramatic Malaysia since 1996. Art Society, Besides that, he is the Vice- Tennis President of the Table Association of Malaysia since 1999. ventured Sri Leong Sri Dato’ Tan into property development in 1994. His vast experience spanning 30 entrepreneurialhis as well as years spirit culminated in the Group expanding rapidly with projects in corridors,growth main Malaysia namely Greater KL (Klang Valley Penang Johor, Lumpur), and Kuala and Sabah. In recognition of his achievements, he was conferred the Darjah Paduka which Selangor (D.P.M.S.) Mahkota and thecarries the title of “Dato” awards by (J.P.) Jaksa Pengaman his Highness, Sultan of Selangor in Sri Tan 1996 and 2001 respectively. was conferred the Sri Leong Dato’ Sultan Ahmad Darjah Kebesaran Amat DiMulia Yang Shah Pahang Sri Sultan Pertama – Peringkat (S.S.A.P.) Ahmad Shah Pahang which carries the title “Dato Sri” on 77th birthday the Sultan Pahang’s on 3 November 2007 and the Setia Mahkota Darjah Panglima which carries the title “Tan (P.S.M.) Sri” in 2009. He also sits on the Board of Directors of various other private companies. He is the brother to Datuk Leong Director, Executive Mei and father to Alternate Yuet Jheng-Yi. Ms Jane Leong Director, NATIONALITY MALAYSIAN GENDER MALE Date of Appointment: 3 December 1991 Group Managing Director/Group Chief Executive Group Managing Director/Group Chief Executive LEONG HOY KUM LEONG HOY TAN SRI DATO’ SRI SRI DATO’ TAN AGED 60 4/4 Member of the Remuneration Committee all 4 Board Attended Meetings convened during the financial year • • Board Meeting 52 Annual Report 2017 Our Leadership BOARD OFDIRECTORS PROFILE OFTHE include: Seri SitiNorma’s otheraccolades home andabroad,Tan SriDato’ career ontheBench,bothat In additiontoherdistinguished until November2013. She servedintheDIFCCourts judge tojointheDIFCCourts. thereby becomingthefirstfemale Financial Centre(DIFC)Courts judges totheDubaiInternational Siti Normaasoneofsixpioneer Dubai appointedTan SriDato’ Seri In January, 2008,theRulerof retired inJanuary2007. Seri SitiNormasubsequently on 8 February 2005, Tan Sri Dato’ Sworn in as Chief Judge of Malaya a FederalCourtJudgein2001. as aCourtofAppealJudgeand in 1983.In1994shewasappointed elevated totheHighCourtBench and Legal Servicein1963andwas executive position in the Judicial first woman to be appointed to an Malaysia. Sherosetobecomethe Judicial andLegal Serviceof many firstsforwomeninthe over aperiodof43yearsmarked London. Hercareerachievements Honourable Society of Gray’s Inn, a Barrister-at-Law degree from the English Barin1962andsheholds Yaakob wasfirstcalledtothe Tan SriDato’ SeriSitiNormaBinti QUALIFICATION (S) PROFESSIONAL ACADEMIC / • • • Committee Remuneration Member ofthe Committee Nomination Member ofthe Audit Committee Member ofthe TAN SRIDATO’ SERI SITI NORMA BINTIYAAKOB 77 AGED Date ofAppointment:16April2018 Independent Non-Executive Director FEMALE GENDER MALAYSIAN NATIONALITY the Company. and anydirectorand/ormajorshareholder of There isnofamilyrelationshipbetween her (7) (6) (5) (4) (3) (2) (1) on thefollowingBoards: Tan SriDato’ SeriSitiNormahasalsoserved (4) (3) (2) (1) the Boardsoffollowingcompanies: Currently Tan SriDato’ SeriSitiNormasitson (10) (9) (8) (7) (6) (5) (4) (3) (2) (1) 31 March2017. as itsChairmanfrom1April2011until the MalaysiaCompetitionCommission 31 December2015;and Chairman from30April2009until the Financial Mediation Bureau as 2014; Trustee fromNovember2008untilJune Tun a SuffianFoundationIncorporatedas 18 December2017; from 12September2008until Tenaga NasionalBerhadasaDirector from 24March2008until2013; RAM Ratings (Lanka) Limited asChairman 15 November2007until7March2015; CIMB FoundationasChairmanfrom 2012; Director fromJuly2007toNovember KAF InvestmentBank Berhad asa 12 April2016. RAM SolutionsSdn.Bhd.asaDirectoron 1 March2015;and Bank NegaraMalaysiaasaDirectorsince since 21November2007; RAM Rating ServicesBerhadasChairman 7 November2007; RAM HoldingsBerhadasChairmansince 27 March2014. the MalaysiaInstituteofManagementon the confermentasEmeritusFellowby Malaya since2007;and appointed Pro-Chancellor, University Yang AmatTerpuji Award in2007; the DarjahSetiaPaduka Tuanku Jaafar Gray’s InnLondon on8March2007; her electionasanHonoraryBencherof Award in2005; the Panglima Mahkota Negara(PMN) Award in1987; the Dato’ SetiaNegeriSembilan(DSNS) 1978; the JohanSetiaMahkota (JSM)Award in Icon Leadership Award in2011; the BrandlaureateMostEminentBrand 1990; an EisenhowerExchange Fellowshipin Fellowship in1988; the Women DevelopmentInstitute 53 Our Leadership Mah Sing Group Berhad PROFILE OF THE PROFILE BOARD OF DIRECTORS BOARD ACADEMIC / PROFESSIONAL / PROFESSIONAL ACADEMIC (S) QUALIFICATION has moreDatuk Ho Hon Sang in thethan 30 years of experience industryproperty development fields whichas well as relevant consultancy, include engineering, road privatisation and general management. He holds a Bachelor of Engineering (Honours) degree from the University of Malaya and is a Member of the Institution of Engineers, Malaysia and the Board of Engineers of Malaysia. Datuk Ho began his professional career as an engineer involved with the development of the North He was also the South Expressway. Managing Director of the Property Sunwayof Division Development Berhad. Over the course of his career, propertyin involved was Ho Datuk development and property investment projects ranging from masterplanned townships and integrated developments with retail, commercial, educational, medical, hospitality and leisure components. Prior to joining Mah Sing Group Berhad, Datuk Ho served as the Officer of Sunsuria Chief Executive Berhad for 2 years. In recognition of his achievements, Datuk Ho Hon Sang was conferred the Darjah Kebesaran Wilayah (PMW)Mahkota Panglima which carries the title “Datuk” on 1 February 2017. relationshipThere is no family between him and any director and/or major shareholder of the Company. NATIONALITY MALAYSIAN Chief Executive Officer Chief Executive GENDER MALE 1 August 2016 Date of Appointment: 1 August AGED 57 DATUK HO HON SANG DATUK 4/4 Attended all 4 Board Attended Meetings convened during the financial year Board Meeting • 54 Annual Report 2017 Our Leadership BOARD OFDIRECTORS PROFILE OFTHE Board Meeting • year during thefinancial Meetings convened Attended all4Board 4/4 STEVEN NGPOHSENG 52 AGED Date ofAppointment:27June2005 MALE GENDER Executive Director DATO’ MALAYSIAN NATIONALITY Company. and/or majorshareholderof the between himandanydirector There isnofamilyrelationship Investment division. the GroupCorporateand Director oftheCompanyheading He iscurrentlytheExecutive 2013. Sultan Pahang’s 82nd birthday in carries thetitle“Dato” onthe Mahkota Pahang (DIMP)which – Peringkat Kedua DarjahIndera Mahkota Pahang Yang AmatMulia conferred theDarjahKebesaran Dato’ Steven NgPoh Sengwas In recognitionofhisachievements, prior tojoiningtheCompany. he leftasHeadofCorporateAffairs years of service inSP Setia Berhad, joining SPSetiaBerhad.After 8 Merchant Bankers Berhadbefore Manager inMalaysianInternational return toMalaysia,heservedasa in United Kingdom and upon his in aCharteredAccountancyfirm Institute of Accountants. He worked and Wales andtheMalaysian Chartered AccountantsinEngland member ofboththeInstitute University ofWales (UK).Heisa majoring inaccountingfromthe a BachelorofSciencedegree and financialinvestment.Heholds audit, accounts, corporate finance more than27years’ experience in Dato’ Steven Ng Poh Seng has QUALIFICATION (S) ACADEMIC /PROFESSIONAL 55 Our Leadership Mah Sing Group Berhad PROFILE OF THE PROFILE BOARD OF DIRECTORS BOARD ACADEMIC / PROFESSIONAL / PROFESSIONAL ACADEMIC (S) QUALIFICATION Mei has more Yuet Datuk Leong in the than 19 years of experience Leong Datuk property industry. Certified Diploma holds an ACCA Datuk and Finance. in Accounting was a member of the Leong Malaysian Institute of Management Institute (MIM) and the Research of Investment Analysts Malaysia (RIIAM). She was attached to RHB Securities Sdn Bhd as a Dealers Prior 1991. since Representative was with to that Datuk Leong KAF Discount Berhad as a Senior Accountant. In recognition of her Yuet Leong Datuk achievements, Mei was conferred the Darjah Mahkota Panglima Kebesaran the title which carries Wilayah, “Datuk” on 1 February 2018. elder the is Mei Yuet Leong Datuk sister to Group Managing Director/ Sri Tan Group Chief Executive, (a major Hoy Kum Sri Leong Dato’ shareholder of the Company) and aunt to Alternate Director, Jheng-Yi. Ms Jane Leong NATIONALITY MALAYSIAN Executive Director Executive DATUK DATUK GENDER FEMALE Date of Appointment: 17 November 1997 LEONG YUET MEI AGED 63 4/4 Attended all 4 Board Attended Meetings convened during the financial year Board Meeting • 56 Annual Report 2017 Our Leadership BOARD OFDIRECTORS PROFILE OFTHE Board Meeting • • • • financial year convened duringthe Committee Meetings Meetings and4Audit Attended all4Board Committee Remuneration Member ofthe Committee Nomination Member ofthe Audit Committee Member ofthe 4/4 56 AGED CAPTAIN IZAHAM BIN ABD. RANI (R) Date ofAppointment:16April2001 Independent Non-Executive Director MALE GENDER MALAYSIAN NATIONALITY Company. and/or majorshareholderofthe between himandanydirector There is nofamily relationship British Aerospace(BAESystems). Products andisasubsidiaryof Sdn BhdwhichdealsinDefence Sdn Bhd)and Epicentro Resources Oman, (MBPetroleum Services company from the Sultanate of a leadingmultinationalpetroleum Captain IzahamisalsoaDirectorin 2004. as theGeneralManageruntilend Port DicksonGolf&CountryClub in Pontian, Johorbeforeserving Manager attheKukup GolfResort was theBusinessDevelopment as inAustralia andSingapore. He conducted domesticallyaswell attended variouscareercourses early retirement in 1992. He nearly 14 years before his Malaysian ArmedForcesfor Captain Izahamservedinthe QUALIFICATION (S) ACADEMIC /PROFESSIONAL 57 Our Leadership Mah Sing Group Berhad PROFILE OF THE PROFILE BOARD OF DIRECTORS BOARD ACADEMIC / PROFESSIONAL / PROFESSIONAL ACADEMIC (S) QUALIFICATION is an accountant Leong Kok Mr Loh has been by profession and international attached to various in Malaysia accounting firms both as well as overseas for more than 20 years, out of which 3 years were dedicated as a partner of Deloitte Lumpur. Kuala Tohmatsu Touche He is currently a partner of a professional services firm, Russell is a He Company. & LC Bedford member of the Malaysian Institute of Accountants, the Malaysian Institute of Certified Public Accountants and the Chartered Institute of Malaysia. Tax relationship is no family There between him and any director and/or major shareholder of the Company. NATIONALITY MALAYSIAN MR GENDER MALE Independent Non-Executive Director Independent Non-Executive Date of Appointment: 23 September 2002 LOH KOK LEONG KOK LOH AGED 53 4/4 Member of the Audit Committee Audit Member of the Nomination Committee all 4 Board Attended Meetings and 4 Audit Committee Meetings convened during the financial year • • • Board Meeting 58 Annual Report 2017 Our Leadership BOARD OFDIRECTORS PROFILE OFTHE • • • Committee Remuneration Member ofthe Committee Nomination Member ofthe Audit Committee Chairman ofthe 69 AGED ENCIK ABDMALIK BIN ARAHMAN Date ofAppointment:16April2018 Independent Non-Executive Director MALE GENDER MALAYSIAN NATIONALITY Company. and/or majorshareholderof the between himandanydirector There is nofamily relationship several privatelimitedcompanies. Lee Swee KiatGroupBerhadand Berhad, CYL CorporationBerhad, Heavy IndustriesCorporation Management Berhad,Boustead Bank Berhad, Affin HwangAsset Berhad, Affin HwangInvestment Affin Bank Berhad, AffinHoldings Company, heisalsoadirectorof Apart fromhisdirectorshipinthe retirement in2003. Services Department before his General ManagerofCorporate Malaysia) in 1994 and was the Bhd (nowknownasWestports joined Kelang Multi Terminal Sdn Guinness Anchor Berhad. He later Bhd, FimaMetalBox Berhadand Sdn Bhd, Amway (Malaysia) Sdn Companies, Colgate Palmolive (M) known as KPMG), ESSO Group of with Peat Marwick Mitchell (now positions fromhisemployment held variousmanagement corporate services. He previously years of experience in finance and Encik AbdMalikhasmorethan40 (UK). Chartered ManagementInstitute Institute ofManagementand member of boththe Malaysian Financial Planner(USA). Heisa Public Accountants and a Certified the MalaysianInstituteofCertified Accountants (UK),amemberof Association of Chartered Certified Accountants (MIA), Fellow of the of theMalaysianInstitute a Chartered Accountant member Encik AbdMalikBinARahman is QUALIFICATION (S) ACADEMIC /PROFESSIONAL 59 Our Leadership Mah Sing Group Berhad PROFILE OF THE PROFILE BOARD OF DIRECTORS BOARD ACADEMIC / PROFESSIONAL / PROFESSIONAL ACADEMIC (S) QUALIFICATION holds Jheng-Yi Ms Jane Leong Commerce a Bachelor of from the (Accounting & Finance) and Melbourne of University Finance from in Applied Masters Further to Monash University. also took that, Ms Jane Leong up Interior Decoration & Design to better Melbourne, from CATC, understand the various disciplines development. property in involved She joined the Company in 2010 and is currently the Director for Operations. & Strategy Group Her experience includes planning and managerial roles in Business Development, Corporate & Investments, Human Resource charity arm, and the Company’s Mah Sing Foundation. is the Jheng-Yi Ms Jane Leong daughter to Group Managing Director / Group Chief Executive, Hoy Leong Sri Dato’ Sri Tan shareholder of the (a major Kum to niece the well as as Company) Datuk Leong Director, Executive Mei. Yuet NATIONALITY MALAYSIAN MS GENDER FEMALE Date of Appointment: 27 November 2015 Alternate Director to Tan Sri Dato’ Sri Leong Hoy Kum Hoy Kum Sri Leong Sri Dato’ Alternate Director to Tan AGED 32 JANE LEONG JHENG-YI JANE Other than traffic offences, no conviction for any offences within the the within offences any for conviction no offences, traffic than Other past 5 years and no public sanction or penalty imposed by the relevant regulatory bodies during the financial year. No conflict of interest between him/her and the Company. • Declaration by Board of Directors • 60 Annual Report 2017 Our Leadership Penang 8% management Workforce by Region in PropertyDivision More than952workforce Total employees MANAGEMENT TEAM PROFILE OFSENIOR • Female 41% Updated April2018 Johor Male 52% 16% Sabah 100% 75% 1% KL Female 48% Male 59% Malaysian • years. professional accountingfirmsforsix he wasattachedtooneofthebigsix Division. Priortojoining Mah Sing, sale requirementsoftheProperty the credit administration & post Mr. Loo isalsoresponsible for Berhad. Property DivisionofMahSingGroup of thedevelopmentprojects of the compliance andbankingrequirements responsible forthefinancialoperations, as anAccountantandiscurrently He joinedMahSinginJune1995 and management. and assessment,strategicplanning accounting, audit,riskmanagement years ofexperienceinfinanceand United Kingdomandhascloseto30 from theUniversityofSouthampton, degree inAccountingandEconomics Accountants (MICPA). Heholdsafirst Malaysia InstituteofCertifiedPublic Accountant andamemberofthe Mr. Loo Kean Leong isaCertifiedPublic FinancialGroup Officer Chief MR. LOO KEANLEONG 8 March2017 Appointed asGroupChiefFinancialOfficeron Male AGED 50 produces qualityproducts. ensure thattheCompanycontinuously implementation and quality control to formulation, manageprojectplanning, Officers inchargeofprojectstrategy He iscurrentlyoneoftheC-Suite companies. years with the property development with ConsultantArchitectfirmsand15 about 22yearsofwhich7are working inthearchitectureindustryfor Institute ofArchitects.Hehasbeen Malaysia andamemberofMalaysian registered withtheBoardofArchitects, in 1995.HeisaProfessionalArchitect Australia withaBachelorofArchitecture from theUniversityofAdelaide, South Mr. WilliamOwWui Lionggraduated Malaysian ProjectChief Officer MR. WILLIAMOW WUILIONG • 1 July2017 Appointed asChiefProjectOfficer, C-Suiteson Male AGED 47 61 Our Leadership Mah Sing Group Berhad 43 AGED PROFILE OF SENIOR PROFILE Male MANAGEMENT TEAM MANAGEMENT Appointed as Chief People Officer, C-Suites on Officer, Appointed as Chief People 1 December 2017 Mr. Chen Fong Tuan holds a Bachelor Chen Fong Tuan Mr. in Engineering (Hons), Electrical and Electronic from University of Sussex, UK Administrationand Masters in Business Australia. University, from Charles Sturt an engineer, as trained Although his passion in seeing people and organisation succeed led him to join the training and productivity team of F&N Coca Cola in 2004. Since then, he has planningorganisational involved in been and development through strategic people initiatives in multiple industries BritishMaybank, B. Braun, including Wyatt and Watson American Tobacco Malaysia. Chen joined Mah Sing in 2017 and Mr. OfficersC-Suite the one of currently is responsible to implement the Company’s as well as policies and programs People and objectives practices lead the People to provide an employee-oriented, high performance culture that emphasises productivity and empowerment, quality, ongoing development of a superior workforce. MR. CHEN FONG TUAN TUAN MR. CHEN FONG Officer Chief People • Malaysian 54 AGED Male Appointed as Senior Chief Operating Officer on 23 May 2016 Ir. Seth Lim Sow Wu is a Bachelor of Civil is a Bachelor of Seth Lim Sow Wu Ir. from the NationalEngineering graduate University of Singapore in 1988 and is a registered Professional Engineer with the Board of Engineers Malaysia and a Corporate Member of Institution of Engineers Malaysia. He has 30 years of experience in the design, construction, property development and fund management of real estate industry and infrastructure His extensive experience spans industry. across the globe in various markets besides Malaysia and Singapore. He joined Mah Sing in 2016 and is in charge of sales, development design and construction, contract administration, customer services, finance and accounts Northernthe of profitability overall and region. IR. SETH LIM SOW WU IR. SETH LIM SOW Senior Chief Officer Operating • Malaysian 45 AGED Male No family relationship with any director and/or major shareholder of the Company. No other directorship in public companies and listed issuers. No conflict of interest between him and the Company. no public sanction or penalty imposed by Other than traffic offences, no conviction for any offences within the past 5 years and the relevant regulatory bodies during the financial year. Declaration by Senior Management Team • • • • Appointed as Chief Operating Officer, C-Suites on Appointed as Chief Operating Officer, 1 March 2018 • He joined the Company in 2011 and has widely contributed to the business & Marketing the Sales through his forte, is currently one department. Mr Yeoh of the C-Suites Officers responsible for the sales planning and strategy as well as overseeing sales activities and performance business drive to achievements. Malaysian graduated from Chee Beng Yeoh Mr. University Sains Malaysia with a Master of Business Administration and Management. He has more than 22 years of experience in the property industry spearheading effective sales strategies. and marketing MR. YEOH CHEE BENG MR. YEOH CHEE Chief Officer Operating 062 Annual Report 2017 RESPONSIBILITY OUR SOCIAL Our Social Responsibility Mah SingFoundation societal andcommunityefforts for variouseducation,medical, >RM13 million Contributed Health and Wellbeing PILLARS Education Development Community 063 Our Social Responsibility Mah Sing Group Berhad Mah Sing Group’s annual sustainability statement sustainability annual Group’s Sing Mah operating performance. summarises the Group’s Financial and non-financial measures and sustainability performance against the Group’s strategy are included. Detailed information on the report this preparing when used criteria and scope is presented. 64 Annual Report 2017 Our Social Responsibility Community developmentand thebestcorporategovernancepractices arealsoveryimportanttotheGroup. Mah Singiscommittedtoproduct quality, customer satisfaction,apositiveworkcultureandthewell-being ofemployees. Our Priorities are usedefficiently. properties are future-proof and sustainable. Policies and guidelines are established to ensure energy, water and other resources to environmental,healthandsafetymanagement,whichincorporates auniversaldesignintodevelopments,ensuresthatour We upholdhighstandardsofcorporategovernanceandtransparencytoprotectshareholders’ interests.Aproactiveapproach future generations. business landscape, weactivelyembraceinnovation to securecommercialviabilitywithoutcompromisingtheenvironmentfor economic andsocialwell-beingofstakeholders executing developmentprojectsandmanagingoperations.Inarapidlychanging Our sustainabilitystrategyisalignedwithourcredo, ‘Reinvent Spaces.EnhanceLife’. We arealsocommitted toimprovingthe the peoplewithwhomweinteract. All ofouractionsaregovernedbydesiretodemonstratelastingrespectforenvironment,businessrelationships and MANAGING SUSTAINABILITY Bursa Malaysia’s SustainabilityReporting Framework Additional Guideline: Global Reporting Initiative(GRI)Standards Principal Guideline: References andGuidelines in thetext. divisions orsubsidiarieshavebeenhighlightedasindicated possible. However, initiativesand/ordatabyparticular divisions. Groupdataandinformationarepresentedwhenever This statement covers Mah Sing and its Property and Plastics Coverage Annually Reporting Cycle direct managerialcontrol. companies inwhichMahSingholdsamajoritystake orhas consolidated financialstatements.Subsidiariesrefertoall Mah SinganditssubsidiariesasincludedintheGroup’s Scope oftheStatement REPORT SUSTAINABILITY and operationsmanagementin linewithsocial,economicandenvironmental planning. Sustainability isacontinuousprocess throughouttheexecution ofprojectdevelopments,townshipplanning Email Fax Tel 57100 Kuala Lumpur No. 163,JalanSungaiBesi Wisma MahSing Investor Relations Feedback and MahSing. the most important aspects of sustainability for stakeholders groups anditsBoardofDirectors.Thisstudyhelpedidentify materiality studywithrepresentativesfromallstakeholder Mah Singengagedanexternalconsultanttoconductadetailed Materiality andRelevance ofInformationDisclosed : [email protected] : : 603-9222 1288 603-9221 8888 65 Our Social Responsibility Mah Sing Group Berhad REPORT SUSTAINABILITY SUSTAINABILITY Health and Wellbeing Community development housing Affordable Employee communication and development Learning Succession planning balance Work-life diversity Workplace health and safety Workplace Sustainable buildings Green townships (3Rs) Recycle Reuse, Reduce, Our Priorities • Education • • • • • • • • • • • • Identifying issues concerning stakeholders Determining the materiality of various sustainability issues Proposing necessary action plans to mitigate issues of concern areas of sustainability Formulating a strategy to improve key The Board, supported by the Sustainability Management Sustainability the by supported Board, The is accountable for all sustainability matters in Committee, Mah Sing. This committee comprises members of senior sustainability of implementation the oversee who management strategy and related matters. Committee reports to the The Sustainability Working and is responsible Committee Management Sustainability of sustainability for the overall implementation and execution matters such as: • • • • the with communicates Committee Working Sustainability The respective departments regularly to inculcate sustainability into Mah Sing. FUNCTIONS DEPARTMENTS/ Our Promise Reinventing hope and creating lasting change hope and creating lasting Reinventing lives. in people’s Driving growth for the Group by recruiting, Driving growth for the employees. developing and motivating Complying with all relevant legal requirements, assessing the environmental impacts of our operations, continuously seeking to reduce their impacts and improving our resource efficiency by reducing and waste. water energy, BOARD BOARD COMMITTEES BOARD MAH SING SUSTAINABILITY WORKING COMMITTEE WORKING SUSTAINABILITY FOUNDATION SUSTAINABILITY MANAGEMENT COMMITTEE MANAGEMENT SUSTAINABILITY Area Community, public and Community, the nation People Environment Mah Sing Sustainability Governance Structure The following governance structure has been introduced for the effective monitoring and execution of sustainability initiatives in been introduced for the effective monitoring and execution The following governance structure has the organisation. Sustainability Governance from all comprising representatives the purview of the Sustainability Committee, Sustainability management comes under continued commitment in the areas of environment, Hon Sang who oversees the Group’s business units. It is headed by Datuk Ho key sustainability management performance, updates the Board on the Group’s social and governance (ESG). The committee Statement to deliver We are guided by our Mission and planned follow-up measures. material issues identified by stakeholders create value for our stakeholders. sustainable growth in our business and Commitment to Key Issues to Key Commitment 66 Annual Report 2017 Our Social Responsibility variety ofenvironmental,socialandgovernanceissuesthatarematerial toMahSing. We connectwithstakeholders throughawiderangeofchannels.Areasengagementaresimilarlybroadandencompass • • Our definitionofstakeholders isbroad,encompassinganygroupsthatmay: concerns theyraise. and withourbusiness.Activeengagementstakeholders isessentialasweseektheirinputandopinions,addressany Dialogue isanessentialpartofunderstandinghowthecomplexforcesatworkinworldtodayinteractwithoneanother STAKEHOLDER ENGAGEMENT REPORT SUSTAINABILITY Environment Suppliers Government Communities Investors residents andtenants home buyersand Customers including Employees Stakeholders Be affectedbyouroperationsandactions. Directly impacttheGroupanditsbusinessoperationsand/or • • • • • • • • Compliance • • • • • • • • • Transparency • • • • • • • • • • • • • • • • Expectations &Interests Green presentandfuture Selection ofsuppliersandcontractors Sourcing ofmaterials Development opportunities Business relationships tenant/resident behaviour Stakeholder programmes to promote greener Permits andentitlements Infrastructure improvements Community involvement Local partnerships Job opportunities Design andquality Investor engagement ESG risksandopportunities Operational efficiency Sustainable financialreturns High-quality assets Customer experience Facilities management Workmanship anddesign Supply chainefficiencies Operational efficiency Product quality Security ofdevelopmentprojects Customer care&postdeliveryservice Workplace health&safety Workplace diversity Work-life balance Succession planning Learning &development Employee communication • • • • • • • • • • • • • • • • • • • • • • • Engagement Methods Reduce, Reuse, Recycle (3Rs) Green townships Sustainable buildings environmental, healthandsafety standards. and supplierswhoarecommitted toquality, Mah Singworkscloselywithitscontractors greener tenantsandresidents Stakeholder programmestoencourage Advocating bestpractices Affordable housing medical support,socialandsports causes: education,financialassistance, Community programmessupportingthese Annual andsustainabilityreports Media releasesandinterviews Quarterly financialresultsannouncement Annual GeneralMeetings(AGMs) Community &CSREvents M ConciergePropertySupportServices M PrivillegeLoyalty Programme Mah SingCareline Social media Satisfaction surveys Appreciation events Volunteer programmes Recreation clubactivities Employee EngagementSurvey(EES) management Regular engagementwithsenior 67 Our Social Responsibility Mah Sing Group Berhad REPORT SUSTAINABILITY SUSTAINABILITY NGOs Employees Media Customers Regulators & Regulators Certification Bodies Investors & Analysts Description Ethics & transparency; Board management & oversight; Risk management assessment; Economic & business performance; Sustainable procurement & supplier Supporting the industry & lobbying; Nation-building Green buildings; Water; Energy; materials; GHG emissions & climate change; Responsible reduction Waste & satisfaction Occupational safety & health; Diversity & inclusivity; Employee engagement Child & compulsory labour; Anti-discrimination; Employer/employee relations to local communities; Community engagement; Anti corruption; Anti-competition; Benefits Employee volunteerism Customer satisfaction; Customer privacy; Public safety; Quality Suppliers Community Contractors & Reflecting Mah Sing’s economic, environmental and social impacts, or economic, environmental and Mah Sing’s Reflecting in the report. decisions and merit inclusion Influencing stakeholders’ Material Issue Corporate Governance Economic Environmental Practices Social: Labour and Decent Work Social: Human Rights Social: Society Social: Product Responsibility Stakeholder Groups Contributing to the Materiality Study Groups Contributing to the Materiality Stakeholder Mah Sing commissioned an external consultant to conduct a comprehensive materiality study in the last quarter of 2017. This This last quarter of 2017. a comprehensive materiality study in the an external consultant to conduct Mah Sing commissioned party was chosen to An impartial external aspects of our sustainability programme. study aims to ascertain the most material sought feedback from representatives of all major anonymity of the respondents. We secure the objectivity of the study and groups. stakeholder MATERIALITY considered be reasonably may that those are topics Relevant report. to which on topics of range wide a with faced is Sing Mah important for: • • not all be reported. However, sufficiently important that they should at which sustainability topics become Materiality is the threshold of these areas. this report must reflect the relative priority equal importance and the emphasis within material topics are of 68 Annual Report 2017 Our Social Responsibility of thisassessmentarepresentedinthefollowingmaterialitymatrix. We alsoasked sevenmembersofourboarddirectorstocompletethesurvey. TheirviewsrepresentedMahSing.Theresults an averageratingfromalleightstakeholder groups. An averagescoreforallareaswascalculatedwithineachstakeholder grouptorectifythesampleimbalance, beforeobtaining Regulators &CertificationBodies. was notrepresentedequally. Customers were themostrepresentedgroupwithfewestresponsesbeingreceivedfrom important’ (5).Atotalof280responseswerereceived.naturalskew wasdiscoveredintheresultsaseachstakeholder group Stakeholders wereasked toratetheimportanceof29areassustainability, fromascaleof‘veryunimportant’(1)to REPORT SUSTAINABILITY Important to stakeholders Important Very Important Most Important Important Supporting theindustry& lobbying Employee volunteerism Career development Employee engagement& satisfaction Relevance toMahSing Sustainable procurement & supplierassessment Anti-competition Very Important Diversity &inclusivity Economic &business Nationbuilding performance compulsory labour Employer/employee Child & Anti-discrimination relations Risk management Community engagement GHG emissions& Occupational safety&health climate change Benefits tolocal Responsible materials communities Water Waste reduction Board management& satisfaction Green buildings Customer Customer privacy oversight Energy Anti-corruption Ethics &transparency Public safety Most Important Quality 69 Our Social Responsibility Mah Sing Group Berhad REPORT SUSTAINABILITY SUSTAINABILITY Funding initiatives in line with its objectives: education and health with a focus on children education and health Funding initiatives in line with its objectives: and the community and other local partners Forging sustainable partnerships with NGOs CSR projects Encouraging employee engagement in including water and energy efficiency Resource Green developments Innovation to ensure commercial viability from the design stage Considering risks of climate change right Our Stories a future that can only be realised in a better future, Mah Sing Foundation believes in investing potential. Objectives of to thrive and reach their full once every child is given an opportunity the Foundation include: • • • all of its projects and developments: Mah Sing is committed to the following in • • • • Mah Sing supported this River. the Kepong The River of Life initiative focuses on cleaning Cleaning, beautifying and perimeter. of the lake initiative by investing in the beautification Wahyu, Taman River has benefited the surrounding residential areas of developing the Kepong Kepong. significant contribution by offering their talent, expertise and a Employees can make equitable and fair labour Consistent, age or gender. regardless of ethnicity, experience, practices are adopted when hiring, developing and rewarding. design principles into its Mah Sing is familiar with the benefits of incorporating sustainable the planning and design developments. The Group works closely with its customers during phase to optimise the sustainable design elements of the development. employee to accept gifts, The Employee handbook explicitly states that it is unethical for any and potential business bribes, kickbacks or any other form of special favours from both current Employees should not accept gifts that are not generally offered to partners of the Company. other staff based on the position held hold in the Company. cater to the diverse the Group continues to strategically with other industry players, Together segments in the prime residential and commercial projects across Malaysia. buyers and market UN Sustainable Development Goals Mah Sing’s key efforts and programmes in relation to the key UNSDGs are highlighted below. key UNSDGs are highlighted and programmes in relation to the efforts key Mah Sing’s The United Nations has called on companies to advance sustainable development through the investments they make, the investments they make, sustainable development through the has called on companies to advance The United Nations to reduce their negative The UNSDGs encourage companies and the business practices they adopt. solutions they develop agenda. to the sustainable development the positive contribution they make impacts while improving OUR SUSTAINABILITY AGAINST THE UNITED NATION’S SUSTAINABLE DEVELOPMENT DEVELOPMENT SUSTAINABLE UNITED NATION’S THE AGAINST OUR SUSTAINABILITY (UNSDGS) GOALS 70 Annual Report 2017 Our Social Responsibility of allthosewhowillliveandspendtimeatourdevelopmentsforwork orpleasure. people’s use of the essentials that turn a location into a community. We are creating mixed communitiestoimprove the daily lives in well-managedcommunityplaces,notsuperficialdesigns.Placemakingonlyconcernsthebuiltenvironmentbutincludes communities make betterpublicspaces.We begancallingthismethod“placemaking”toemphasizeourbeliefthatcitiesthrive Mah Singtakes ownershipofitsdevelopments’ operationsandthecommunitiestheyserve. We developauniquemethodtohelp jobs andworld-classdevelopments.We strivetobeacatalystforregeneration,ignitingMalaysia’s growthanddevelopment. We design,develop, buildandmanageaportfolioofexciting properties,creatinghealthyplaces,thrivingcommunities,quality live andrelax. We create spaces that are home to vibrant, diverse and thriving mixed-use communities, places in which people love to work, Evolving foraBrighterFuture ECONOMIC REPORT SUSTAINABILITY Kinabalu inSabah Penang andKota Malaysia inJohor, Klang Valley, Iskandar Kuala Lumpur and the Greater hotspots nexus andproperty Malaysia’s economic projects throughout 47 residents. and future tenants, visitors of choicefor the property position as maintain our real estateand of MahSing’s and socialvalue environmental the economic, is toenhance Our objective range segment oftheresidentialsector. Mah Singwillalsocontinueto respondtothegrowingdemandforaffordableandmid- and thegovernment’s initiativestofacilitateeasyownership, especiallyforfirst-timebuyers. ownership will be spurred by strong demographics, improvement of transport infrastructure Housing demand will continue to be underpinned by the improving economy. House and financially, anddeliverasteadysustainableperformanceoverthelongterm. and stability. MahSingwillcontinuestrengtheningitsbusinessfundamentals,operationally and addressunforeseenmarket challenges,maintainingagoodbalancebetweengrowth A strong balance sheet and net cash position allow the Group to embrace opportunities Awards since2010andtheTop 30since2005. Mah Singhasranked amongtheTop 10inTheEdgeMalaysiaTop PropertyDevelopers’ across thecountryinmorethan20yearssinceitenteredfield. The Grouphasdevelopedaportfolioofprimeresidentialandcommercialdevelopments Mah Singhasevolvedfromaplasticstradingfirmin1965intoleadingpropertydeveloper. Mah Sing’s ContributionstotheNation’s Economy buildings Grade A developments commercial Mixed-use COMMERCIAL MAH SING’S PRESENCE STRONG buildings andcorporate offices in Kuala Lumpur Integrated en blocsalesof business parks Grade A A pioneerof 71 Our Social Responsibility Mah Sing Group Berhad 36% own their REPORT rakyat 14% SUSTAINABILITY SUSTAINABILITY SALES Properties Properties and below 36% Residential Residential 2016 ACTUAL 2016 ACTUAL priced RM500k priced RM500k Annual Report 2017 Our Social Responsibility REPORT SUSTAINABILITY Incorporating SustainabilityinOurProcurementDecisions Our SustainableSupply-chainCorePrinciples: sustainability, bothsuppliers’ andcontractors’ activities,andtheirdownstreamsupplychainwheneverappropriate. We practisefairandethicalrelationshipswithoursupplierscontractors.Theyarerequiredtoadherecoreprinciplesof Our CorePrinciplesofSustainableSupplyChain 2 4 3 1 applies environmental purchasing decisions and locallaws criteria whenmaking international Child labour Compliance compulsory Mah SingPlastics applicable Forced or Human labour rights with legal minimumemploymentage. employees shouldbebelowthe child labourinthesupplychain.No We refusetoaccepttheuseof notice. employment afterservingreasonable must befreetoleavetheir compulsory labour. Allemployees must notuseforced,bondedor Our suppliersandcontractors labour laws. environmental, healthandsafety and internationallawsincludingall must atleastcomplywithlocal may differ, suppliersandcontractors customs, traditionsandpractices We recognisethatalthoughlocal shareholders andcommunities. team members,clients,suppliers, dealing withsuppliersincluding Respect forhumanrightsin or utilisesupplierswho share oursustainability sustainable suppliers We partnerwith commitment 6 5 7 and reusable, materials purchases recyclable Environmental Equality and Mah SingPlastics Freedom of association from suppliers diversity impacts • • • • • the areasof: environmentally-friendly policiesin reduce theseimpactsandpromote impacts andrisks.We areworkingto to understandourenvironmental We continuetoestablishprocesses respected. freedom ofassociationshouldbe As farasrelevantlawsallow, training, promotionorretirement. in hiring,compensation,accessto contractors shouldnotdiscriminate to bepromoted.Suppliersand relations andweexpectdiversity discrimination ofanykindinworking We refusetoacceptunlawful environment. of harmfulemissionsintothe Controls tominimisetherelease noise andpollution Environmental impactssuchas Protecting biodiversity Improved resourceefficiency Waste anddisposal are recyclable, reusable, Our plastics’ packaging and shippingmaterials made from100%post- bio-degradable and consumer recycled materials. 73 Our Social Responsibility Mah Sing Group Berhad REPORT SUSTAINABILITY SUSTAINABILITY It helps locals keep It helps locals keep their jobs It is good for the environment Benefits of Buying Local back locally local economy It stimulates the Local businesses give Local of community It promotes a sense Mah Sing’s open relationship with suppliers ensures that anything can be discussed. We work with preferred suppliers who work with preferred suppliers who ensures that anything can be discussed. We relationship with suppliers open Mah Sing’s meets that meet our sustainability requirements. The extent to which a supplier can provide proven efforts and innovations innovation, continuity of supply and service is translated into a long-term relationship for added our requirements for quality, value for all parties. at all times. Suppliers and contractors Suppliers and contractors must comply with all relevant national laws and statutes (HSE) and environmental safety health, the improvement of continuous the to and committed be sustainable to required are aspects of their operations. dust and and the environment such as noise, Suppliers and contractors must also minimise the negative impact on society annoyance to the surrounding community. other pollution. Environmental provisions are included in our contracts to minimise illegal workers and dust pollution. However, Negative impact on society in the construction industry normally refers to noise must also never be employed. Our Relationship with Suppliers and Contractors Our Relationship We prefer local suppliers. Partnering with local businesses allows us to invest in the communities in which we operate while which we in communities the invest in to us allows businesses local with Partnering suppliers. local prefer We 90% of our suppliers and environmental impacts. More than transportation costs and their associated reducing shipping and contractors are locally-based. Local Benefits of Buying Buying local 74 Annual Report 2017 Our Social Responsibility REPORT SUSTAINABILITY Gifts andHospitality such inbusinessdealings. contractors, suppliers,agentsandbusinessassociates/partners. Thisistopreventanyconflictofinterestorappearance On 23 June 2016, Mah Sing has introduced its ‘No Gift Policy’ which prevents employees from receiving any form of gifts from work. Employees shouldimmediatelyinformtheirheadofdepartment ifoffersofgiftsaremadebyanindividualorteamathome accepted orthatthesemayinfluencedecisions. obligation beingplacedonanymemberofstafforsupplier. Staff mustnotindicatethat gifts,gratuitiesorhospitalitywillbe Maintaining workingrelationshipswithsuppliersisappropriate. However, thismustbedonewithoutsubtleandinappropriate Examples ofGifts,GratuitiesorHospitality During theprocurementprocess,itisinappropriatetoacceptgifts, gratuitiesorhospitalityofanyform. occasion presents Seasonal orspecial Money furnishings Appliances and Transportation Credits Edibles Dinners hotel expenses Vacation travelor Discounts Drinks Parties entertainment Any other 75 Our Social Responsibility Mah Sing Group Berhad REPORT SUSTAINABILITY SUSTAINABILITY Funding initiatives in line with its objectives (education and (education objectives its with line in initiatives Funding health with a focus on children and community) Forging sustainable partnerships with NGOs and other local partners engagement in CSR projects Driving employees’ Mah Sing Foundation Foundation Established in 2005, Mah Sing Social Corporate (MSF) is Mah Sing’s (CSR) platform. MSF actively Responsibility fundraising seeks to raise funds via annual causes activities and events to champion was in line with its guidelines. MSF Berhad established by Mah Sing Group those with the ultimate objective of helping living in poverty. Objectives of the Foundation include: • • • We do not make, and will not accept, facilitation payments or facilitation payments and will not accept, make, do not We for a business favour or advantage. kickbacks of any kind corruption or any other condone bribery, Mah Sing does not the company of access to competitive actions that may deprive pricing. WELLBEING, TOGETHER COMMUNITY CONTRIBUTING TO local communities by believe in improving the lives of We for better education, health and overall offering opportunities support underprivileged sections of society wellbeing. We building safe through donations and financial assistance, togetherness. neighbourhoods and sharing the joy of Investing in a better future, a future we can only achieve when achieve can only we future a a better future, in Investing every child is provided with the opportunity to thrive and fulfil their potential. BELIEF VISION Change in Children’s Hope and Creating Lasting Reinventing Lives We will not provide gifts or hospitality with the intention of will not provide gifts or hospitality We to act improperly or to influence anyone persuading anyone contributions No duties. her or his of performance the in in order to gain any or charitable donations will be made commercial advantage. Mah Sing’s anti-bribery and corruption practices apply to anti-bribery and corruption Mah Sing’s including directors, senior managers, individuals of all levels else anyone and contractors consultants, employees, the Group. providing services to Anti-Bribery and Corruption ETHICAL CONDUCT ETHICAL 76 Annual Report 2017 Our Social Responsibility REPORT SUSTAINABILITY Development Community Wellbeing Health and Education Pillar Trustee &Chairman Jen. Tan SriYaacob bin Norulzaman BinSyed Dato’ DrManjitSingh MSF BoardofTrustees Dato’ Indera Syed Kamarulzaman Sachdev (JP) Mat Zain(R) Trustee Trustee region. to helpcommunitiesinthe children. We havemadeefforts a conduciveenvironmentfor role increatingandsustaining and communitiesplayacrucial flourish isessential.Families environment forchildrento Providing asafeandenabling their potential. into globalcitizensandreach foundation forchildrentogrow and cleanwaterlayastrong Good health,nutritiousfood world. limitless opportunitiesinthe lifelong learningwillpresent children withknowledgeand every childandempowering that educationistherightof inception in2005.We believe education sincetheFoundation’s We havebeenfocusedin Rationale • • 86 employees and communityefforts Contributed morethan Health and wellbeing cover thefullcostofoperations. transported toschoolbythevillagers. Theincomegeneratedwill villages inMukimLanas, Sabah.Thirtychildrenwillbesafety implement acommunityempowerment projectthatwillhelpseven MSF alsocontributedRM110,000 toGoodShepardServices • • Perumahan Awam DewanBandarayaKuala Lumpur by: standards oflow-incomefamiliesinProjekPerumahan Rakyat and Jannati@Wilayah Persekutuan. Thisprogrammeimprovestheliving We donatedRM1milliontoBadanAmalKasih IbutosupportBaiti and thissmallgesturehelpedimprovetheirdailylives. a smallincome. The Rohingya communityhasbeenthrough somuch planted freshproducethatcanprovidefoodorbesoldtogenerate Collaborating withFreeTree Society, 50passionate employees We createdanurbangardeninakindergartenforRohingya refugees. newspaper’s educationalpull-outs. students in20nationalschoolsimprovetheirEnglishthroughtheStar Education programme. Thisprogrammehelps1,760 Year FourtoSix RM30,000 wasusedtofundTheStar’s ‘Step Up’ Newspaper-in- Fong 1inMelakaatacostofmorethanRM20,000. Anadditional We gave1,000 plasticchairstoSekolah JenisKebangsaan CinaPay financial assistanceto80students,49ofwhichhavespecialneeds. We alsocontributedRM96,000 toSJK(C)SamYoke toprovide with ours. educational journeysmoreeffectively. This goalisverymuchinline mentorship guidancesostudentscanequipthemselvesfortheir Selayang. We contributedRM99,000 tofundqualityeducationand organisation thataidsunder-servedchildrenwithlowincomesin In 2017, wepartneredwithYayasan GenerasiGemilang,anon-profit Significant Milestones Repaying housing loansforselectedfamilies. Providing theirhomeswithnecessarylivingessentials volunteeredforCSRactivitiesin2017 Mah SingFoundation RM13 million PILLARS Education forvariouseducation,medical,societal Development Community 77 Our Social Responsibility Mah Sing Group Berhad REPORT Completion 6 SUSTAINABILITY SUSTAINABILITY Mah Sing Plastics has been certified with the ISO 14001:2004 Environmental Management System since 2007. Operation 5 Construction 4 Procurement 3 Design 2 Feasibility Environmental Sustainability Incorporated in all Stages of a Project Environmental Sustainability Incorporated in all Stages 1 ENVIRONMENTAL are committed to minimising our environmental impact as a property developer We the environmental footprint of our buildings through Reducing and manager. value. innovation creates stakeholder Environmental sustainability is incorporated into our life-cycle management throughout all stages of a project. 78 Annual Report 2017 Our Social Responsibility REPORT SUSTAINABILITY to operatemoreefficientlyandcost-effectively. system. Properties and business processes are designed to minimise our environmentalimpacts. Our buildings allow customers The propertyandrealestateindustryaffectstheenvironmentcancontributetoamoresustainableglobaldistribution SUSTAINABLE BY DESIGN OF MAHSING. TERM SUSTAINABILITY EFFICIENCY ANDLONG- THE OPERATIONAL CONTRIBUTES TO ENERGY ANDWATER RESOURCES SUCHAS ENVIRONMENTAL EFFICIENT USEOF OPERATIONS. THE TO BUSINESS IMPACTS ISINTEGRAL ENVIRONMENTAL MONITORING through thesupplychain environmental stewardship Leverage onour scaletodrive energy-efficient projects Invest inrenewableenergyand Establish goalsandobjectives play theirpartinconserving Engaging stakeholders to Identify opportunitiesfor portfolio inresponseto managing ourproperty climate changerisks consumption while Reduce resource managing waste the environment Commitment and transparentmanner by disclosingourcarbonfootprintinatimely Share successesandareasforimprovement Work toreducewaterusage Focus onresilientdesign Eco-efficiency targetsthrough usage, wastegenerationand Environmental Management Assessment (EIA)andother Legal complianceincluding tracking energyandwater Environmental Impact System (EMS)atour carbon emissions green SOPs Action Plan buildings 79 Our Social Responsibility Mah Sing Group Berhad REPORT SUSTAINABILITY SUSTAINABILITY SOCIAL quality of life health and comfort Enhance occupant Improve the overall Minimise the strain on local utility infrastructure Improve indoor air quality 3 4 Monitor environmental indicators CONSTRUCTION Give preference to contractors Give preference to contractors with quality and environmental certifications and procure more sustainable materials PROCUREMENT resources Enhance and protect Reduce waste streams Reduce ENVIRONMENTAL biodiversity and ecosystems Improve air and water quality Conserve and restore natural 2 5 Embed environmental targets, Embed environmental rating targets meet green building and adopt Building Information Modelling (BIM) if possible DESIGN Evaluate green features and track sustainable performance OPERATIONS performance ECONOMIC Reduce operating costs Reduce Optimise life-cycle economic 1 Improve occupant productivity 6 Enhance asset value and profits Conduct environmental impact Conduct environmental assessments, set targets and identify opportunities for innovation FEASIBILITY Carry out feasibility studies POST-DEVELOPMENT How Our Green Developments Create Sustainable Impact Increasing the efficiency that buildings and their sites use energy, water and materials and their sites use energy, Increasing the efficiency that buildings the entire lifecycle of a building. on human health and the environment for the impact Reducing Sustainability is integrated across our operations and supply chain. When developing new properties, we ensure that new properties, When developing and supply chain. our operations is integrated across Sustainability customers and exemplify functional and visually appealing to our and methods produce buildings that are construction materials behaviour in materials or promoting sustainable Whether using locally-sourced construction sustainability. our commitment to our contractor and supplier across the entire organisation and through drives best practices in sustainability our offices, Mah Sing networks. • community and land-use planning issues.Green building concepts extend beyond the walls of buildings to include site planning, • Green development is the practice of: The growth and development of our communities have a large impact on the natural environment. The manufacture, design, have a large impact on the natural environment. The manufacture, The growth and development of our communities resources. natural consume many of the world’s in which we live and work construction and operation of the buildings GREEN DEVELOPMENT 80 Annual Report 2017 Our Social Responsibility REPORT SUSTAINABILITY emissions. link theentirecommunityremovingneedtodrive, whichalsoreducescarbon 30-acre urbanpark.Pedestrian footpathsandbicycletrackshavebeenbuilt to will bedeveloped.EcofeaturesincludeaRiversideWalk, naturetrailanda Landscaping features and facilities such as a river board walk and jungle trek remaining isleftinitsnaturalgreenstatetomaintainthetownship’s greenconcept. At Southville City, onlyhalf of the 428 acresof land has been developed;the reduce heat.Lower VOC productsensureahealthierlifestyleforthepeople. consumption. Water featuresandgardenfacilitieshelppromotediversity high-efficiency fittings,rainwaterharvestingandtreatmenttoreducewater air-conditioning inathermally-comfortableenvironment.We haveinstalled Lakeville Residence featuresanenergy-efficientdesignthatcanminimise • • • • The designincorporateseco-friendlyfeaturessuchas: Design, USA; GreenBuildingIndex,Malaysia;andMarkofSingapore. certified bythreegreencertificationbodies: LeadershipinEnergyandEnvironment Icon Cityisagreensustainabledevelopment that isoneofthe first inMalaysiatobe The useoflowVOC paintsto maintainindoorairquality A roofgardentoreducetheurbanheatislandeffect A waterefficientrainwaterharvestingsystemanddroughttolerantplants An energy-efficientliftandair-conditioningsystem to agreenintegrateddevelopment Featuring IconCity:Transformation fromanindustrialsite Featuring SouthvilleCity@KLSouth Featuring Lakeville Residence, Taman Wahyu 81 Our Social Responsibility Mah Sing Group Berhad REPORT SUSTAINABILITY SUSTAINABILITY Gold Provisional Certificate Provisional Certificate Gold Provisional Certificate Gold Plus Provisional Certificate Certificate Certificate Provisional Certificate Provisional Certificate Provisional Certificate Gold Provisional Certificate Provisional Certificate Gold Provisional Certificate Certified Award Level Award Green Mark GBI Green Mark Green Mark GBI GBI Green Mark GBI Green Mark GBI Green Mark GBI LEED LEED Tool Tower 5 Tower Phase 1 Tower 1 Icon Tower Residenz We encourage employees to carpool or utilise available public transport when travelling to and from work. encourage employees to carpool or utilise available public transport We carbon emissions also help to minimise the Communicating through teleconferencing and video conferencing produced by transportation. How Can Employees Make a Difference? How Can Employees Make Raise the environmental awareness of individual employees the Raise Promote their participation in environmental preservation activities Southbay Plaza Feringghi 2C Feringghi 2B Lakeville Icon Residence Mont Kiara Icon Residence M-City Icon City Petaling Jaya Icon City Petaling Project Green Efforts We are implementing strategies to reduce Green House Gasses (GHG) emissions across our business operations. These initiatives are implementing strategies to reduce Green House Gasses We office energy consumption to emissions from commuting to work. Our sustainability target all aspects of the business from the the course of their daily work. in sustainable practices through programmes aim to engage employees OFFICE SUSTAINABILITY PROGRAMMES OFFICE SUSTAINABILITY Mah Sing Plastics uses 100%-recyclable plastic materials Mah Sing Plastics uses 100%-recyclable GREEN MATERIALS We deliver a wide range of environmental awareness activities for all our employees in order to: deliver a wide range of environmental awareness activities for all We • • Adopting a different theme each awareness within the Group. Green Campaign was introduced to raise environment Mah Sing’s invited to develop green habits. employees are year, Our Green Certifications Achievements to Date Certifications Achievements Our Green 82 Annual Report 2017 Our Social Responsibility • • • • • • A rangeoffunactivitieswasheldduringtheGreenWeek from24to29July2017including: Breakdown ofRecyclables Collectedin2017(kg) REPORT SUSTAINABILITY Hiking atGunung Irau,CameronHighlands Organic farming sharinganddemo Go Vegetarian Movie @lunch Fruits distribution the OzoneLayer 2017 Dress foraCauseinwhichemployeesdressedyellowor orange insupportoftheInternational DayforthePreservationof donated tocharity. regularly. Theproceedsare from theofficepremises (CRC) tocollectrecyclables Community Recycle Charity Mah Singworkswiththe Campaign Developed bytheGreen Examples ofGreenHabits 761.20 Boxes 637.80 Plastic 50.60 Glass 17.40 Aluminium items forlunch Reducing the use ofplastic takeaways Increasing use reduce paper consumption softcopies to of electronic Collected in2017 Breakdown of Recyclables (kg) Green Habits by theGreen Examples of Developed Campaign Switching off lights 20.90 Metal 356.30 Others 87.50 Used Linen Going digitalfor 3,391.10 Paper meetings double-sided Practising printing 83 Our Social Responsibility Mah Sing Group Berhad REPORT 31,006,901 2017 SUSTAINABILITY SUSTAINABILITY 31,11,915 2016 27,840,450 2015 Indicators Measured Company owned vehicles Electricity Air travel Electricity Consumption (kWh) Carbon Emissions change risks by Mah Sing is committed to mitigating climate carbon emissions reducing its energy consumption and other energy efficiency is from its business operations. Improving way of reducing these the most significant and cost-effective emissions. Our emissions accounting is based on the internationally Business recognised GHG Protocol established by the World World and (WBCSD) Development Sustainable for Council based Institute (WRI). Emissions accounting is Research on the GHG Protocol classification of direct and indirect emissions. Installing Variable Speed Drive (VSD) pumps in the cooling tower Tool Direct GHG emissions Indirect GHG emissions Other indirect GHG emissions 2 Replacing Replacing aluminium cooling tower blades with fibre alternatives 1 Scope Scope 1 Scope 2 Scope 3 Mah Sing Plastics engages third-party firms to monitor various health and environmental aspects including noise levels, safety, wastewater generation, chemical exposure and health risk arising from using hazardous chemicals. We are committed to reducing our emissions wherever possible We the risks of water pollution, floodingand work tirelessly to keep Minimisinglevel. acceptable an at quality land on impact the and component ofthe emission of gases and particulates is also a key our environmental strategy. Environmental monitoring helps us to verify the impact of Environmental monitoring helps us to operations effectively our activities. It enables us to manage Sing Plastics’ Mah impact. negative minimise their and is certified with the Environmental Management System and supports internationally-recognised ISO 14001 standard continuous improvement in our environmental performance. Environmental Monitoring Meanwhile, Mah Sing Plastics is working with a consultant under the Malaysia Green Technology Corporation’s Energy Audit Energy Audit Corporation’s Technology a consultant under the Malaysia Green Mah Sing Plastics is working with Meanwhile, a three-year energy audit programme in a minimum of RM500,000 Sing Plastics is committed to investing Conditional Grant. Mah systems and processes, and partnership was established to review Corporation. This Green Technology with the Malaysian projects already being made with two been has progress Significant technologies. efficient energy future recommend implemented: Managing energy consumption and implementing energy conservation measures allows us to deliver the greatest benefit allows us to deliver the greatest energy conservation measures and implementing energy consumption Managing and capital conservation measures energy implementing and identifying to committed are We investors. and tenants our to other stakeholders is communicated to all employees and Management Policy The Energy energy use. improvements to reduce components, packaging, practices when procuring raw materials, The management adopts energy-efficient within the value chain. operations. and reduce the impact from improvements equipment to help deliver energy-efficient chemicals, plants and Energy Management 84 Annual Report 2017 Our Social Responsibility from theconsumptionofpurchasedelectricity;andotherGHGemissions. We haveadoptedthisstandardforourreporting. further categorisesthesedirectandindirectemissionsintothreebroadscopes:GHGemissions; that areaconsequenceofbusinessactivitiesbutoccuratsourcesownedorcontrolledbyanotherentity. TheGHGProtocol Direct GHGemissionsareproducedfromsourcesthatownedorcontrolledbyMahSing.Indirect REPORT SUSTAINABILITY Protocol havebeenusedtocalculate theCO Online toolsderivedfromthe WRI GreenhouseGas Indonesia hasbeenusedinthese calculations. the Property&InvestmentHoldingDivisionandPlastics for businessandeconomyclassflights.Airtravel distance travelled.Separatecalculationswereperformed point includingthenumberofemployeesonboardand Air travelGHGemissionswerecalculatedpointto Scope 3 Corporation forthePeninsular Grid in2017. factor producedbytheMalaysianGreenTechnology due toa6.34%downwardrevisionoftheemission electricity consumptiondecreasingby6.66%. Thiswas electricity decreasedslightlyby0.34% despite calculated fromMahSing’s electricitybills.CO Indirect emissionsresultfromelectricity. Energyhasbeen Scope 2 Inventories. by theIPCCGuidelinesforNationalGreenhouseGas fuel werederivedfromtheemissionfactorpublished and diesel.CO Separate calculationswereperformedforbothpetrol calculate GHGemissionsfromcompany-ownedvehicles. All fuelpurchasesaremonitoredandrecordedto Scope 1 In 2017, MahSing’s CO Corporation forthePeninsular Grid. factor publishedbytheMalaysianGreenTechnology from theuseofelectricitywerederivedusingemission from airtravel. 2 emissionsfromtheconsumptionof 2 resultingfrompurchased 2 2 emissions emissions emissions CO CO CO2e Emissions (MT) CO2e Emissions (MT) CO 22,000 20,000 24,000 18,000 2 2 2 Emissions(MT)fromCompany-OwnedVehicles byFuelType emissions(MT)fromAirTravel Emissions(MT)FromPurchasedElectricity CO2e Emissions (MT) 600 500 200 400 300 700 100 100 150 50 0 0 449 20,630 2015 2015 587 Petrol 403 23,055 2016 2016 2017 122 503 Diesel 373 21,519 2017 2017 516 85 Our Social Responsibility Mah Sing Group Berhad REPORT SUSTAINABILITY SUSTAINABILITY 2017 15,600 1,300 16,500 136 27,200 1,200 480 35 Chemical waste 2016 13,580 3,000 9,200 30 23,600 - 560 91 and debris General waste 2015 5,660 1,600 2,400 6,000 25,600 - 379 35 Steel scrap Steel Unit kg l l l l kg kg kg Hard-core and concrete waste excavations Earth and other debris resulting from Waste Type Waste Contaminated gloves/rags Contaminated saw dust emulsion coolant Waste paint Waste lubricant oil Waste hydraulic oil Waste Contaminated containers/spraycans Light bulbs Waste Disposal by Mah Sing Plastics Malaysia Waste At Mah Sing Plastics, liquid waste such as waste oil used by machines and equipment is collected by a licensed scheduled waste waste such as waste oil used by machines and equipment is collected by a licensed Mah Sing Plastics, liquid At disposal company and is disposed of according to government regulations. All contractors are expected to establish waste management and recycling targets to minimise construction waste and debris and recycling targets to minimise construction to establish waste management All contractors are expected as much as possible. reuse and recycle are encouraged to salvage, projects. Contractors of our during the construction ahold must contractor waste The authorities. relevant the with registered is who contractor waste a select must contractor Each rs are of relevant categories of waste in accordance to municipal regulations. Contracto valid license for the collection and disposal from report that lists the weight of materials generated, disposed of in landfill or diverted required to submit a waste management of all contractors to maintain a clean and safe environment.disposal through recycling. It is the responsibility Waste Management Waste Mah Sing’s Waste Management Plan contains administrative and procedural requirements for construction waste management and procedural requirements for Management Plan contains administrative Waste Mah Sing’s and recycling activities. All recycling containers must be clearly labelled. All recycling containers Types of Construction Waste Generated of Construction Waste Types 86 Annual Report 2017 Our Social Responsibility landscaping alongtheedgeof thelake forjogging.A bicycletrackandviewingdeckarealsobeingconstructed. residential areas of Taman Wahyu, Kepong. Beautifying the edge of the lake for recreational purposes involved adding more Mah Singsupportedthisinitiative byinvestinginthebeautificationoflake perimeter, whichhas benefitedthesurrounding Class IIItoIIb, whichmakes itsuitableforrecreational use. works. ThisinitiativefocusesoncleaningtheKepong River. Water qualityisexpectedtoimprovesignificantlyfrom thecurrent The Government’s RiverofLifeprojectaimstoincreasetheliveabilityindexcitythroughmaster planningandbeautification to climatechange. Biodiversity iscentraltosustainabledevelopment.Itcriticalforcreatinglivelihoodsandhelpingcommuniti es adapt Biodiversity Conservation system. wastewater discharged into the watercourse or sewerage extremely important.Contractorsarerequiredtomonitorthe consumption andqualityofwaterleavingourprojectsitesis Mah Sing’s portfolio. The effective management of both the improves the efficiency, resilience and long-term value of A strategicapproachtowatermanagementandquality Water Management all fuel-burningequipmentisservicedandmaintainedregularlyto preventexcessive darksmoke emissions. Dark smoke couldresultfrommalfunctioning equipment. Theprojectmanagershoulddedicateamemberofstafftoensurethat environmental pollutioncontrolregulations. housekeeping andcarpentryworks.We requestthatourcontractorsmonitorandtestambientdustinaccordancewithlocal Ambient dustisgeneratedduringvariousphasesofconstructionsuchasdemolition,hacking,excavation, vehicular movement, Mah Singimplementseffectivepollutionpreventionmeasuresbycontrolling pollutionfromconstructionactivities. Minimising Pollution REPORT SUSTAINABILITY land areaisadesignatedgreen on thesitetopreserveexisting plants andconserveresources Approximately 13%of thetotal Transplanting existingtrees area residential lakeside recreational A naturallake preserved for LED streetlightingplanned activities Water Consumption(m 2015 75,563 3 shades pedestrians andcyclists ) Rainwater harvestingplanned More roadsidelandscaping for semi-detachedand 2016 87,202 detached homes 2017 85,027 87 Our Social Responsibility Mah Sing Group Berhad REPORT SUSTAINABILITY SUSTAINABILITY Do not use forced, prison, indentured, bonded or involuntary labour freedom of Respect association and the rights and employers of workers to bargain collectively COMMUNITY HEALTH AND SAFETY COMMUNITY HEALTH USE WATER AIR QUALITY LABOUR RIGHTS AND WORKFORCE WORKFORCE AND LABOUR RIGHTS WELFARE SECURITY POTENTIAL IMPACT ON THE LIVELIHOODS IMPACT POTENTIAL COMMUNITIES OF LOCAL Forbid the use of child labour Prohibit physical abuse and harassment of associates as well as threats of either Provide associates with a safe and healthy workplace Prohibit discrimination in our hiring and employment practices OF PROJECTS HUMAN RIGHTS HUMAN RIGHTS IN THE PLANNING CONSIDERATIONS CONSIDERATIONS The Malaysian Employment Act 1955 which prohibits exploitative labour practices labour Act 1955 which prohibits exploitative The Malaysian Employment of children under the age of 16; andAct 1966 which prohibits the employment (Employment) Persons The Children and Young labour. preventing child, forced or compulsory Other international agreements Mah Sing Plastics’ operations in Indonesia adhere to the Indonesian Labour Law (Undang Undang Nomor 13 Tahun 2003). Under 2003). Under 13 Tahun (Undang Undang Nomor Law operations in Indonesia adhere to the Indonesian Labour Mah Sing Plastics’ regardless of whether the employee concerned this legislation, it is mandatory for all employers to pay severance compensation severance and paid depends on the nature, resigns voluntarily or is terminated, retrenched or retired. The level of compensation period of employment. Mah Sing’s Stand on Human Rights on Human Stand Mah Sing’s Considering the human rights of all stakeholders helps us manage activities that could potentially affect the rights of nearby Considering the human rights of all stakeholders such as supply chain personnel, who are stakeholders, Our commitment extends to other communities and our workforce. expected to follow our high standards. • • of Projects Human Rights Considerations in the Planning Group operations are structured by: Group operations are • ENSURING EVERY PERSON’S BASIC RIGHTS BASIC PERSON’S EVERY ENSURING are expected to follow. Conduct, which all suppliers and contractors human rights are covered in our Code of Issues pertaining to to freedom of rights of Mah Sing or its subsidiaries. Employees’ to report violations in the operations Employees are required respected. association are also 88 Annual Report 2017 Our Social Responsibility A numberofstandardshavebeen adoptedtoensureallemployeesare accordedtherespectanddignitythattheydeserve. We demand the highest ethical standards from ourselves and others. Business must be conducted honestly and ethically. history. We arepleasedtoreportthattherehasbeennorecordofviolationsagainstpeople’s rightsatanytime during theCompany’s REPORT SUSTAINABILITY • • • • • • • • • SHE proceduresarepractisedandtheteamworkstirelessly tomaintain asafeandhealthy operatingenvironment Employees arefreetoassociatewithtradeunionsandbargaincollectively inaccordancewithlocallaws position, statusorunionmembership Employees arefreefromallformsofharassmentandunlawfuldiscrimination irrespectiveofrace, religion, gender, verbal abuseorotherformsofintimidationarestrictlyprohibited Workers mustbetreatedhumanelyatalltimes.Sexualharassment,punishment,slavery, mentalorphysicalcoercion, All employeesmustbeatleast18yearsofage Workers mayfreelyleaveemploymentonceareasonablenotice period hasbeenserved Work isperformedvoluntarily Forced, bondedorinvoluntaryprisonlabourisprohibited Unlawful employmentisneitherengagedinnorcondoned Child labourandunder-ageworkers areforbidden Freedom ofassociationandcollectivebargaining Safety, HealthandEnvironment (SHE) Right tofreelychooseemployment Non-discrimination Humane treatment 89 Our Social Responsibility Mah Sing Group Berhad REPORT SUSTAINABILITY SUSTAINABILITY R O Ownership I wholeheartedly complete my to contribute initiative tasks, take ideas and drive innovation for the best interest of the company. Resourcefulness and I Think out-of-the-box collaborate across teams to provide the best solutions E P Empowerment I strive to reach the highest level of competence and commitment to perform Performance First Performance I am passionately driven to exceed expectations. i I commit to take care of my of care take I commit to professional and health personal growth in an environment of mutual respect. Well-being Well-being Integrity and ethics honesty, I uphold professionalism in my deliverables and all my dealings. W in all they do. Integrity is the foundation breathe with absolute INTEGRITY in all they do. are expected to live and All stakeholders and ” with our new Vision “POWER Statement Value place on us. Aligning our Employee of trust that our customers ; as is now known as I-POWER Statement our business. Our Employee Value Mission is pivotal to the sustainability of we also place integrity first. Enhance Life”, Spaces. we “Reinvent Recruitment and selection are conducted in a manner that is fair, objective, consistent, equitable, non-discriminatory and legally non-discriminatory and consistent, equitable, objective, that is fair, and selection are conducted in a manner Recruitment necessary knowledge and skills to conduct recruitment and All employees involved in recruitment possess the defensible. selection activities effectively. Mah Sing is committed to fair hiring. Decisions are based on merit and guided by respect, integrity, diversity, accountability and accountability diversity, integrity, respect, by guided and merit on based are Decisions hiring. fair to committed is Sing Mah other ethical values. Fair Hiring The Group introduced its i-POWER statement to empower staff to achieve personal and professional growth. The new employee personal and professional growth. statement to empower staff to achieve its i-POWER The Group introduced values. Company’s the uphold and employees train to programme learning continuous Group’s the of part forms statement value OUR PEOPLE, OUR CULTURE, OUR WORKPLACE OUR OUR CULTURE, OUR PEOPLE, environment an with employees our provide to strive We success. our to instrumental is workforce diverse and talented a Attracting and effective and rewards success innovation and creativity, and intellectual challenges, encourages that presents professional teamwork. 90 Annual Report 2017 Our Social Responsibility medical examinationsarealso offeredtoallpermanentemployees. Mah SingPlasticsprovidesatransportation serviceforproductionoperators.Eachworker isentitled toonemealpershift.Annual less than12monthsareeligible foraproportionatebonusbasedonthe durationofservice. All confirmedemployeesareeligibleforbonuses,provided theyarestillinserviceonthepaymentdate. Employeesservingfor • • Bonuses, paidatthediscretionofmanagement,arebased on: Total employeecompensationincludesseveralsustainableemploymentcomponentsandisabletobuild astrongfinancialfuture. pay, comprehensive benefits andaprofessionalworkingenvironmentthatbothfostersinnovationrewardsperformance. Group employeesenjoybenefitsasstipulatedundertheEmploymentAct1955.MahSingiscommittedtoprovidingcompetitive Competitive Benefits REPORT SUSTAINABILITY Medical Leave Summary ofOurBenefits Employee’s performanceandcontributiontotheCompany’s success Mah Sing’s profitabilityandfinancialcapability performance system. Mah Sing’s market-aligned performancerewardsmatrixensuresthatitsaredeeplyrootedin Dental benefit Health screening children andspouse Outpatient medicaltreatmentforstaff, Group personalaccidentinsurance insurance Group hospitalisationandsurgical Paternity Maternity Study/examination Compassionate Hospitalisation Sick Annual Non-monetary Other Benefits tive discussion Open workspaceconcepttoallowproduc- Colourful andrenovatedworkspaces A minigolfareaforaquickputt A pooltabletorelaxandunwind A nappingroomfortiredstaff work A lactationroomfornursingmothersat karaoke An audio-videoentertainmentroomwith State-of-the-art gymnasium and marketing staff Sales/pool/overriding incentiveforsales Long serviceawardrecognition Staff propertypurchasediscount Attendance allowance lines/phone allowance Company mobilephone/registered Petrol fleetcard 91 Our Social Responsibility Mah Sing Group Berhad REPORT SUSTAINABILITY SUSTAINABILITY Review Committees Review Acceleration Pool (Talent) Acceleration Pool Development Pool (Mass) Development Pool Group Managing Director Selected Senior Management Team Individuals that will be discussed include deputy general managers & above • • Priority for Discussion for Priority Council Department Group Talent Group Talent Talent Council Talent Review Committees Review Acceleration Pool (Talent) Acceleration Pool Development Pool (Mass) Development Pool Respective HODs Respective Line Manager Respective Management Team Talent Individuals that will be discussed include senior managers & below • • • Priority for Discussion for Priority Encourage an effective flow of information Encourage an effective and objectives across all levels of the workforce Align business goals Management Development Skills training programmes focus on enhancing leaders’ managerial and people skills such as coaching Management Development Skills training programmes focus on enhancing leaders’ to cater programmes training Skills Development Executive the Primarily, leadership. situational and resolution conflict results, for technical skills and work performance such as sales induction training, time management, communication improving employees’ and presentation skills. Mah Sing’s Management Associate Programme (MAP) develops and moulds high calibre young talents to lead and drive the Management Associate Programme (MAP) Mah Sing’s career 18-month an experiencing by potential full their reach candidates helps programme The mission. and vision organisation’s crafting experience. The Mah Sing Academy provides all employees with an opportunity to develop their skills and gain knowledge through various The Mah Sing Academy provides all employees with an opportunity to develop learning and development opportunities provided throughout the year. The Talent Council was also launched to create a platform for talent discussion and succession planning. Talent Council is chaired discussion and succession planning. Talent Council was also launched to create a platform for talent The Talent is highest level to ensure an effective succession plan. The discussion flow framework by the Group Managing Director at the summarised in the diagram below. Employee training is an essential part of any successful business. Training improves employee satisfaction, performance and retention.and performance satisfaction, employee improves Training business. successful any of part essential an is training Employee competitiveness. In a broader well encourages them to reach their full potential, which improves Mah Sing’s our employees Training rapidly developing economy. them find their place in Malaysia’s context, the skills employees acquire help Talent Management, Training and Development Management, Training Talent A feedback box is placed in pantries in various levels of the Mah Sing headquarters. It encourages employees to contribute their is placed in pantries in various levels of the Mah Sing headquarters. A feedback box votes are across different departments of Mah Sing. Ideas with the highest number of Business Process Improvement (BPI) ideas projects. fitted into the BPI roadmap as future improvement Mah Sing Our Voice was launched in 2017 to gather employee sentiments on the ground. This employee engagement survey was launched in 2017 to gather employee sentiments Mah Sing Our Voice hearts commitment to an organisation. It is also the extent to which Mah Sing “wins the is the state of emotional and intellectual rate is 97.8%. Our participation of its people. and minds” We use MComm to communicate with our employees. This online channel broadcasts information to all employees within the information to all employees our employees. This online channel broadcasts use MComm to communicate with We strategic messages, information. Information is in the form of the dissemination of internal company which centres on company, process. the transformation issue to drive acceptance of change within targeting a subject or • related to any aspectsand prompt response to problems or concerns provides employees with a fair review Our open-door policy and whistleblowing. such as harassment, grievance handling All employment issues can be discussed of their employment. Mah Sing actively engages with employees through various channels. Regular communication sessions are held by senior held by sessions are communication Regular various channels. through with employees engages actively Mah Sing management to: • Employee Engagement Employee 92 Annual Report 2017 Our Social Responsibility are consideredwhendeciding thebonusquantum. outcomes. Employees’ performance, relative experience, responsibilities, market movements as well as the Group’s profitability We haveadoptedapayfor performance philosophy with incrementsandbonusesbeingawardedbasedonannualreview competency requirements,developmentplansandthedelivery of resultswithMahSing’s objectives. Performance management isconcernedwithestablishingaclearvisionofachievementgoals.Italignsemployees’ skills, Performance Measurement REPORT SUSTAINABILITY Conversation programmes part invarioustraining employees 1,082 In 2017 Learning andDevelopmentProgrammesDeliveredbyMahSingin2017 Learning andDevelopmentProgrammesDeliveredbyMahSingPlastics in 2017 Orientation NEO -New InsideOut Employee Management Performance Branding Personal Career System Management Presentation Performance Acceleration Acceleration Power up Time ISO Integration took Building Sales Foundation & Foundation & Great Image Intermediate Champions MS Excel - Branding: Personal Personal of received anaverage Each employee in 2017 of training Employment Act 18 hours Branding: Social Branding: Social Champions Intelligence MS Excel - Advanced Coaching For Sales Personal Personal Industry 4.0 MS PowerPoint - Foundation& PowerPoint - Intermediate Advanced MS training arealsooffered. covering effective communication and soft skills to assumealeadershiprole. Training modules programme to groom individuals who aspire duties. We alsodevelopedaleadershiptraining and functionalcompetenciestoperformtheir equip employeeswiththenecessarytechnical We delivertechnicalandfunctionaltrainingto Negotiation a domesticinquiry. briefing ontheprocessofconducting training, SalesNegotiationanda Employment Act,Industry4.0 training, ISOintegration performance managementsystem improve individualabilitiessuchas programmes aredesignedto through on-the-joblearning.Various personal growth of its employees motivation andencouragethe Mah SingPlasticsstrivestoimprove Sales Domestic Inquiry Conducting a Briefing on 93 Our Social Responsibility Mah Sing Group Berhad REPORT SUSTAINABILITY SUSTAINABILITY Reviews are fair. Reviews performance is reflected The overall departmental in the team performance. An Individual Development Plan (IDP) form is form (IDP) Plan Development Individual An appraisal produced at the end of the performance the future development The IDP contains cycle. the helps This information employee. of an needs and training future map Team Development People development programmes. departmental a introduced Sing Mah 2017, In to ensure: calibration and moderation exercise • • is performed at the company- The same exercise of reflection accurate and true a provide to level wide departmental and team performance. the company, are reviews regular and performance robust More scheduled for 2018. All line leaders are being trained to hold on-demand career conversations with their deliver a goal-setting workshop to We will also staff. achieve set appropriate KPIs and help all employees’ them. Employees and their line managers jointly review their performance and discuss achievements and gaps CEO AND THE REVIEW BY GROUP MD CEO and Group MD review the company-wide performance DISCUSSION WITH LINE MANAGER SUBMISSION TO THE PEOPLE DEVELOPMENT TEAM THE PEOPLE DEVELOPMENT SUBMISSION TO are submitted to the People appraisal results Performance future development for the design of Development Team programmes Employees sit a self- assessment based on the KPI set OF HEAD REVIEW BY DEPARTMENT Head of department reviews performance assessment results to ensure a robust and fair process is applied within the department SELF-ASSESSMENT Our performance management cycle begins with KPI setting during the beginning of each year. These KPIs are closely tracked These KPIs are closely tracked with KPI setting during the beginning of each year. Our performance management cycle begins ensure employee to of every direction. It is the responsibility our business with are aligned that they to ensure and monitored KPI set. that they are performing according to the Our appraisal system is operational throughout the year. A high-level quarterly review is conducted with all confirmed employees is conducted with all confirmed employees A high-level quarterly review is operational throughout the year. Our appraisal system potential job performance and development Employees’ review their performance at least semi-annually. being encouraged to are systematically evaluated. We have also benchmarked our benefits with Willis Towers Watson industry standards to keep ourselves abreast with the latest keep ourselves standards to Watson industry Towers our benefits with Willis have also benchmarked We and voluntary turnover rates of our remuneration package also benchmarks the competitiveness salary trends. Our participation against industry peers. Our performance management system, Valuing Performance (VP), has been established to set goals while evaluating job job evaluating while goals set to established been has (VP), Performance Valuing system, management performance Our regular performance platform allows all employees to receive competencies. This engagement performance and behavioural development reviews from their line managers. feedback and career 94 Annual Report 2017 Our Social Responsibility the currentworkplaceintoamorevibrantenvironmentknown as MS@Work. these talentstothrive. Renovation worksareongoing atourheadquarters,WismaMahSing.Thenewmakeover will transform We haveayounganddiverseworkforceunderstandtheimportanceofcreatingfuncollaborativeenvironment for MS@Work badminton, footballandZumbadancingpromotework-life balancetoemployees. a healthierlifestyle. Weekly activitiesareconductedintheheadquarters andbranchesacrossMalaysia.Activitiesincludingyoga, The MahSingSportsClubisaplatformforimprovingteamspiritandencouraginggroupdynamicsthroughwork-life balanceand Work-life Balance of thegrievancetakingplace. Themanagementshouldrespondwithinfiveworking days. hearing andresolvingthosecomplaints.Wherepossible, thecomplaintshould bepresentedinwritingwithinthreeworkingdays Grievances areemployees’ complaintsrelatingtotheirtermsofemployment;agrievanceprocedureisformalprocessfor Grievance Handling engagement trends.Thefirstsurvey, whichwasconductedin2017, achieveda97.8% responserate. employee behaviouroutcomes.ThesurveyresultshelpidentifygapsintheCompany’s engagementmodelanddrivefuture with assuredanonymity built intothesystem,thissurvey measures MahSing’s engagementlevelbasedonthreeidentifiable Since theinceptionofOurVoice, our EmployeeSatisfactionSurvey, weplantoconductthissurveyeachyear. Designedin-house, employees areakey successfactorandourlargestmosttreasuredcapital. Employee satisfactionandengagementarecrucialtoMahSing’s long-termsuccess.Highperforming,diverseandpassionate Happy Employees,Workplace REPORT SUSTAINABILITY working forMahSing? Will employeesreport the goodaspectsof SPEAK Will employeesremain in MahSing? STICK out fortheCompany? Will employeesgoall SEEK 95 Our Social Responsibility Mah Sing Group Berhad REPORT 30-39 37% 30 and below 33% SUSTAINABILITY SUSTAINABILITY Relaxation corner Relaxation Colourful pantries Plastics Indonesia 577 Workforce Workforce Age Group Breakdown by Breakdown Collaborative and pool table breakout areas breakout Games area with darts 9% 21% 40-49 Plastics 50 and above Malaysia Division Male 52% 413 Power nap room Power Fun meeting rooms Gender Workforce Workforce Breakdown by Breakdown Holding Division 952 Property & Investment working mothers Lactation room for Lactation Open space concept 48% Property & Investment Holding Division Total Number of Employees Total Features of MS@Work Design Philosophy Design Features of MS@Work Female All people should be treated equally and we do not tolerate discrimination. Our policy is to practise equal opportunities and we do not tolerate discrimination. Our policy is to practise equal opportunities All people should be treated equally and We do not discriminate on the grounds of and advancement for those qualified. foster diversity in employment, development orientation, ethnicity or other relevant national origin, sexual affiliation, disability, religion, political opinion, union age, gender, characteristics in our hiring or employment. Diversity and Equal Opportunities The design philosophy features various modern layouts that appeal to millennials. The new office layout will encourage a more modern layouts that appeal to millennials. The new office layout will encourage The design philosophy features various environment. innovative mindset and conducive work 96 Annual Report 2017 Our Social Responsibility must haveagood performancerecord. Retired employees maybereemployediftheypossessskillsthatareunavailable inthecurrentworkforce. However, theemployee warning letters,willnotbeconsidered forreemployment. Obviously, aformeremployeewhowasterminated due tomisconduct,leaveofabsencewithoutapproval,orwas issuedwith • • A formeremployeemaybereemployedif: Reemployment or compellingreason.However, suchrequestsaregrantedatthesolediscretionofCompany. ranges fromonetosixmonthsdependingontheirgrade. Employeesmayseektowaivetheirresignationnoticeforanauthentic An employee or Mah Sing may serve the other party notice to terminate the contract of service at any time. The notice period Notice Period forOperationalChange REPORT SUSTAINABILITY 32% Female 25% Chinese 13% Others His orherworkhistoryandreasonsforresignationweresatisfactory andacceptable. He orsheisqualifiedforthejobvacancyand Total GroupIncluding PlasticsDivision Breakdown by Breakdown by Workforce Workforce Ethnicity Gender 29% Bumiputera 30% Plastic Division) (Indonesia Non-Malaysian 4% Indian 68% Male 9% >50 21% 41-50 22% Staff Contract Breakdown by Breakdown by Employment Age Group Workforce Workforce Category 78% Permanent Staff 33% <30 37% 30-40 97 Our Social Responsibility Mah Sing Group Berhad REPORT SUSTAINABILITY SUSTAINABILITY Mah Sing Safety, Health and Environmental Policy Health and Mah Sing Safety, Strive towards ZERO life loss at all workplaces. Strive Health and Environmental System. Continual improvement in Safety, MAH SING GROUP BERHAD, PROPERTIES DIVISION (MGSBPD) recognises the importance of PROPERTIES MAH SING GROUP BERHAD, Health and Environment at the workplace. Safety, for all employees, its work environment MSGBPD is committed to providing a safe and healthy contractor and the public at large. every effort to ensure that to make its comtractors are required All management staffs, employees and Occupational Safety and under Malaysian MSGBPD meets all legislative requirements as stipulated Orders and other Codes of Practices. Health Act 1994, Regulations, MSGBPD will: so far as is practicable, archieving the objective, Towards • • drive the good teamwork, to MSGBPD encourages all parties to have the right attitude together with organisation towards becoming the best and safetest place to work. SAFELY” WORK “THINK SAFETY, WORK SAFELY WORK SAFETY, THINK Mah Sing is striving towards ZERO life loss at all workplaces as far as is practicable. The Group encourages all parties to adopt Mah Sing is striving towards ZERO life loss at all workplaces as far as is practicable. work. best and safest place to the right attitude in driving the organisation towards becoming the Management staff, employees and contractors work together to ensure that all legislative requirements stipulated under Management staff, Environmental Quality Act 1974, Regulation, Malaysian Occupational Safety and Health Act 1994, Factory & Machinery Act 1967, Orders and other codes of practices are met. We are acutely aware of the importance of safety, health and the environment in the workplace. Our commitment to providing a Our commitment to providing and the environment in the workplace. health of safety, are acutely aware of the importance We and members of the public. contractor environment extends to all employees, safe and healthy work Safe Workplace 98 Annual Report 2017 Our Social Responsibility REPORT SUSTAINABILITY • • • • • • • HEALTH GOALS: OUR SAFETY AND • • • • • HEALTH GOALS: OUR SAFETY AND inspection Plant &machinery management walk-about Safety andhealth staff andcontractors Safety trainingforsite Department audit bytheSafety Quarterly sitesafety least onceayear Fire drillandtrainingat Committee meeting Monthly Safety Weekly toolbox talk programmes improvement inOSH Drive continuous management responsibility forOSH individual ownershipand Promote acultureof legal requirements Meet andexceed OSH Management System Provide arobustOSH zero harm injury ratestoachieve Reduce occupational Safety Practices Safety andHealthTopics OutlinedintheMonthlyReport • • • • • held forallstaffandcontractors Site safetyawarenesstrainingis are conductedforallsites Site safetyinspectionsandaudits Monthly sitereportsarereviewed work onsite and SanitationPlanbeforestarting Safety, HealthandEnvironmental, Contractors mustsubmitbotha safety standardssetbyMahSing Contractors mustadheretovarious Complaints PROPERTY DIVISION meetings held during the month Safety campaigns & Promotions, awards, alerts Audits • • • • • • • plastics: controllingthefirerisk Safe useandstorageofcellular height safety, slipsandtrips, and workingat rates ofinjurytoworkers: machine safety thatcontributetothehighest Addressing threemainareasof Emergency spillageactionplan Fire hazardandfirefightingtraining Safe ridingawareness Waste oildisposaltraining training hazard andextinguisherusage Various activitiesincludingfire PLASTIC DIVISION the following Activities for month Incidents 99 Our Social Responsibility Mah Sing Group Berhad REPORT SUSTAINABILITY SUSTAINABILITY Lifting Demolition in Working compressed air Full Body Harness High-Visibility Clothing High-Visibility Steel-Toe Boots Steel-Toe Excavation Blasting High voltage electrical work Goggles Fall Arrestors Gloves Hard Hats Confined space entry Working at height Working Hot work Use appropriate equipment Protective Equipment (PPE) Apply correct Personal Be a competent and qualified operator Close supervision and control system for authorisation Obtain Permit-to-Work CHECKLIST FOR PERFORMING HIGH RISK TASKS CHECKLIST • • • • • A safe work instruction has been established for all high-risk activities based on risk assessment results and both statutory for all high-risk activities based on risk assessment results and both statutory A safe work instruction has been established and contractual requirements. PPE Requirements Examples of High-risk Tasks Identified due to Our Nature of Works Nature of due to Our Identified of High-risk Tasks Examples 100 Annual Report 2017 Our Social Responsibility • • • • immediately intheeventof: the Company’s safetyprogress.However, ameetingiscalled Ordinarily, thecommitteemeets atleastquarterlytoreview • • • • • Roles andresponsibilitiesofcommitteemembersinclude: the clientonthiscommittee. Members consistofourcontractorswhileMahSingrepresents A SafetyandHealthCommitteeisinplaceateachproject. Mah SingSafety, HealthandEnvironmentCommittee REPORT SUSTAINABILITY Any othersituationthatcallsforimmediateattention. A dangerousoccurrence, or A near-missaccident, injury toanyperson, An accidentwhichresultsinlossoflifeorseriousbodily training programmes Planning, developingandorganisingsafetyhealth conformance attheprojectsite Participating inworkplaceinspectionstoidentifyanynon- place ofwork or anyunsafeunhealthyconditionspracticesatthe accidents, dangerousoccurrences,occupationaldiseases Reviewing and analysing the trends of accidents, near-miss and healthprogramme Reviewing andmonitoringtheeffectivenessofsafety management system,proceduresandinstructions Assisting inthedevelopmentofsafetyandhealth Project sitesauditedfortheirsafetyin2017 Savanna Phase1 Residence D’sara Savanna Phase2 The Loft, Penang Medini PlotA17 Meridin@ 74.9 beingachieved. project siteswereconductedin2017withanaveragescoreof conform tooursafetystandards.Ten safetyauditsatdifferent We alsoperformsafetyauditsoncontractorstoensurethey conducted for our contractors in 2017 at various project sites. Eight safetyinductionandrefreshertrainingsessionswere • • • a projectRiskRegister that: Prior towork,theheadofsafetyandhealthmustalsoestablish before workcommences. Identification, RiskAssessmentandControl(HIRARC) Project contractors’ safety officers must also perform a Hazard that hasbeensignedbytheHSEofficerandprojectmanager. contractor mustsubmitamonthlysafetyandhealthreport risk controlforworkactivitiesduringeachproject.Each Contractors arerequiredtoperformriskassessmentsand Safe Workplace Working Hand-in-HandwithOurContractorstoMaintaina requirements Is submittedtotheclientinaccordancewithcontractual the ProjectDirector Is reviewedbytheConstructionManagerandapproved to minimiseforeseenrisks States allpotentialhazardsandproposescontrolmeasures Lakeville Residence Medini PlotA18 Sutera Avenue, Kota Kinabalu Meridin@ Phase 1 Lakeville Residence Sierra Perdana BayVue@ Phase 2 101 Our Social Responsibility Mah Sing Group Berhad REPORT 2017 0 0 0 0 0 0 0 2017 5 3 5,180 16 SUSTAINABILITY SUSTAINABILITY 2016 0 0 0 0 0 0 0 2016 4 2 5,285 10 2015 0 0 0 0 0 0 0 2015 8 4 5,993 19 Indicator Total recordable injury frequency rate (No. of cases) rate (No. recordable injury frequency Total Absenteeism rate (headcount) Absenteeism rate (days) of cases) Injury frequency (No. Time Lost of cases) involving staff (No. Fatal accident rate Occupational disease rate day rate Lost of cases) recordable injury frequency rate (No. Total Absenteeism rate (%) Absenteeism rate (days) of cases) (No. Time Injury frequency Lost Indicator A third-party firm is engaged to conduct chemical exposure monitoring and chemical health risk assessment studies. This ensures A third-party firm is engaged to conduct chemical exposure monitoring and chemical in the manufacturing workplace are below permissible health that chemical exposure levels and the potential risk to workers’ Malaysia. limits set by the Department of Occupational Safety and Health (DOSH) Mah Sing Plastics pledges to continuously improve its safety, health and environmental performance as well as preventing health and environmental improve its safety, Mah Sing Plastics pledges to continuously operations. pollution, occupational injury and ill health throughout its business Mah Sing Plastics Safety, Health and Environmental Approaches Health Mah Sing Plastics Safety, Plastics Indonesia tenants, contractors, Our employees, and supply chain play. understand the huge role that the end-users of our properties We health and safety. actively involved in promoting suppliers and the wider community are Our Safety Performance Our Safety Holding Division Property and Investment 102 Annual Report 2017 Our Social Responsibility REPORT SUSTAINABILITY We recognisethatourdesignactivitieshavebothdirectandindirect impactsontheenvironmentandsocietyasawhole. ensures thattheseissuesareeconomicallyviable. value ofourfuturedevelopmentsbyaddressingsustainabilityissuesfromtheearliestdesignandspecificationstages.MahSing Good managementofenvironmentalandsocialimpactsareconsideredcentraltoourlong-termbusiness.We canincreasethe revitalisation whileconservingnaturalresources. along withmoreconventionalfinancialobjectives. We surpasstheminimumlegalrequirementsandendeavourtoachieveurban Responsible planning is key tothesuccessof our projects and involves recognising environmental andsocial considerations RESPONSIBLE PLANNING–BUILDINGRESPONSIBLY Project sitesauditedfortheirsafetyin2017 Mah Singpractisesresponsiblepropertydevelopment fromthepropertyplanning,design Higher propertyvalues investment strategies Improve customerretention from responsible and satisfaction and developmentstagesthroughouttheproject’s lifecycle. Mah Sing’s Responsible Use naturalresourcesas efficiently aspossible Development Goals Respect andengagewith Reduce ourcarbon communities footprint 103 Our Social Responsibility Mah Sing Group Berhad REPORT Continual Control of SUSTAINABILITY SUSTAINABILITY improvement non-conformance Change Control of management QMS documents Risk Knowledge management management review records Archiving Management services through our uncompromising commitment to total customer satisfaction. services through our uncompromising To provide our customers with excellent quality products, prompt delivery and flexible provide our customers with excellent To audit Quality internal Corrective action Our Approaches to Delivering the Highest Quality Always Our Approaches to Delivering the Highest PT Mah Sing Indonesia is also accredited with ISO/TS 16949:2009 Quality Management Systems – particular requirements for – particular 16949:2009 Quality Management Systems PT Mah Sing Indonesia is also accredited with ISO/TS part organisations. the application of ISO 9001:2008 for automotive production and relevant service As a market-driven developer, we endeavour to accommodate the needs and demands of our end-users. These factors have to accommodate the needs and demands of our end-users. These factors we endeavour developer, As a market-driven trust and confidence in our brand. gained buyers’ Mah Sing’s Quality Goal Quality Mah Sing’s Mah Sing has been consistently ranked among the Top 10 in the Top Property Developers Awards since 2010. From a plastic since 2010. Property Developers Awards 10 in the Top among the Top consistently ranked Mah Sing has been of one of the most reputable property developers in Malaysia with a varied portfolio trading firm in 1965, the Group has become residential and commercial developments. Mah Sing Properties Sdn Bhd has been certified with ISO 9001:2008 since 3 March 2011 for the provision of property development since 3 March 2011 for the provision Sdn Bhd has been certified with ISO 9001:2008 Mah Sing Properties to ISO upgraded were these standards properties. Recently, and institutional industrial commercial, residential, for services 9001:2015. Mah Sing designs and develops quality properties that surpass customers’ expectations while fulfilling statutory and regulatory expectations while fulfilling statutory customers’ develops quality properties that surpass Mah Sing designs and to achieve organisational Management System the continuous improvement of our Quality are also committed to requirements. We excellence. Quality Management 104 Annual Report 2017 Our Social Responsibility The Life-cycleofOurDevelopment REPORT SUSTAINABILITY Credit Admin Sales &Marketing Pre-development Development Business Indicator • • • The FinanceandCreditAdminDepartment: • • • • • The SalesandMarketing Department: The ContractDepartmenthiresasuitablecontractorfortheproject. • • • • • • Once landhasbeensecured,theProjectPlanningDepartment: Director maypurchasethelandorenterintoajoint-venturewith landowner. or provideotherinformationtodeterminetheviabilityoflandand market needs.TheManaging by meetinglandownersdirectlyorthroughtheirintermediates.HODs maywriteafeasibilitystudy The GroupManagingDirectorandHeadofDepartment(HOD)acquire suitabledevelopmentland purchasers Ensures thatallreceivablesarecollectedbeforehandingover the vacantpossessiontothe ensure timelyprogressbillingsandcollections Liaises withtheProjectImplementationDepartmenttocertify the architectand/orconsultant to Is responsiblefortheadministrationanddocumentationinrelation topurchasers’ loans Agreements Conducts salesandcommunicateswiththepurchaserstosignSalePurchase Organises marketing materialsandsaleslaunchesaccordingtoplanned marketing budget Advertising andSalesPermit withtheGovernmentLiaison Prepares thematerialsandrelevantdocumentsforapplication ofaDeveloperLicenseand Conducts aproductstudyfortheproposeddevelopmentanddevisesappropriatepricing Project PlanningDepartmentatthePre-Developmentstage Provides recommendationsonpurchasers’ needsandexpectations,designconcepttothe the consultant. Ensures theprojectdesignmeetsrequirementsandprepares thetenderdocumentationwith Prepares theprojectprogrammeandPQP(PreDevelopment)during planning Prepares aproductdesignbriefforeachdevelopmentwithinput fromthefeasibilitystudies plan Department ensuresthattherelevantauthorityandlandapprovals areobtainedforthelayout Devises aMasterLayout PlanaccordingtothedevelopmentbriefandGovernmentLiaison Appoints thetown-plannerandrelevantconsultants Writes adevelopmentbriefwithhelpfromtheMarketing andContractDepartment 105 Our Social Responsibility Mah Sing Group Berhad REPORT SUSTAINABILITY SUSTAINABILITY relevant departments and personnel for their action. relevant departments and personnel The QA/ISO Department prepares Quality Management System Department prepares Quality Management System The QA/ISO documents with support from other departments. Upon approval from documents with support from other the Group Managing Director/CEO, these documents are forwarded to these documents are the Group Managing Director/CEO, Have submitted the application and obtained the necessary approval for handover. the necessary approval Have submitted the application and obtained and Customer Service Departments. Notified the Credit Admin, Sales and Marketing Hands over the vacant possession of the properties to the purchasers. during the liability period. Monitors and rectifies the defect complaints by the purchasers Adherence to the construction drawings and specifications Adherence to the construction Quality Plan Project in the required quality standards as defined Compliance with the project programme Accordance with the The Project Implementation Department ensure that the Safety Officer and consultants: ensure that the Safety Officer The Project Implementation Department • • are settled and notifies all outstanding payments The Credit Admin Department ensures that the Customer Care/Customer Service Department, which: • • areas to the respective The Project Implementation Department also hands over the public Department apply local authorities. The Projects Department and Finance & Credit Control for both strata and individual titles for the purchasers. Upon being awarded the contract, the Project Implementation Department prepares the Department the contract, the Project Implementation Upon being awarded meetings are held Regular the contractor on the site possession date. site for hand over to inspects the Department to monitor progress. The Project Planning during construction ensure: works periodically to • • • The Contract Department checks the at the site. Documents are controlled and monitored claim. Any variation of work is identified and evaluated by the Project progress contractor’s Department and Contract Department. inspect the work site office representatives Upon completion of construction works, possession. is obtained prior to vacant according to the nature of the project. Approval Post-Development Indicator Project Implementation 106 Annual Report 2017 Our Social Responsibility products, services,timelinessandcustomerservicequality. customer satisfactionsurveystogarnerfeedbackonour customer serviceandexperience. We alsoconduct system iscontinuouslyenhancedtoimprovethequalityof customers’ feedbackmoreefficientlyandsystematically. The established withacentralisedfeedbacksystemtomanage Mah SingCareline-Aone-stopcontactcentrehasbeen services. feedback forcontinuousimprovementinourproductsand from handingoverVacant Possession tomanagingcustomer and memorablecustomer experience atallpointsofcontact As amarket-driven developer, wecontinuetoprovideapleasant Customer Focus arises aftertheirpurchase. provided withareadycontactpointforanyclarificationthat maintenance andotherpost-deliveryservices.Purchasersare sale, leasing,interiordesign,renovation,relocation,home M Conciergeofferspropertysupportservicessuchassub- selected projects. Repeat BuyerPurchaseandBuyer-Get-Buyerincentivesforthe than 37,000 members. M Privilege members are also offered as offersfromparticipatinglifestylemerchants.Itnowhasmore invitations to property launches, events and promotions as well and M Concierge. M Privilege members are given priority offering customersvalue-addedservicessuchasMPrivilege Mah Singcontinuesitseffortstoearncustomerloyaltyby Customer Loyalty REPORT SUSTAINABILITY Consideration forOurFuturePurchases (Tower 2) Icon City 82 Residence 2 (Birch) 73 M Residence 2 (Alpine) 84 M (Tower 3) M City 91 2017 arepresentedinthegraphsbelow. The resultsofourcustomersatisfactionsurveyconductedin action andimprovement. responses aresubmittedtoheadsofdepartmentforfurther as thedesign,carpark,maintenanceandsecurity. Allsurvey so theycancommentonmattersunrelatedtodefectssuch We alsoprovideownerswithaPurchaserFeedbackForm • • forms throughouttheirengagementwithus: Owners arerequiredtocompletetwosatisfactionsurvey improvement. track our service levels. Feedback is collated for continual Customer satisfactionsurveysarealsobeingconductedto delight ourcustomerintermsofqualityandservice. customers’ expectations.We strivetohandoverunitsthat to totalcustomersatisfaction,MahSingfocusesonexceeding In linewithourservicevalueofuncompromisingcommitment Ensuring Satisfaction Handover AndDefectsRectification) Service Experience(Purchase, Payment, Key Collection, 33 rectification work. our products and services for defect inspection and The second,aftertenmonthsofthefirstVP, evaluates the initialpurchaseuntilkey collection; customers’ satisfactionofourproductsandservicesfrom The first, during the Vacant Possession (VP) period, gauges Excellent (Tower 2) 47 Icon City 19 1 0 Good 1 Residence 2 32 (Birch) 45 M 22 Average 0 Residence 2 21 (Alpine) 49 M Below Average 27 3 48 38 (Tower 3) M City 13 1 Poor 1 107 Our Social Responsibility Mah Sing Group Berhad 1 0 12 0 0 48 Poor Poor 2 4 39 REPORT 21 M City M City M City Below Average (Tower 3) (Tower 3) (Tower 3) (Tower 35 60 8 0 SUSTAINABILITY SUSTAINABILITY 38 0 9 43 28 Below Average Below Average M M M 11 49 27 (Alpine) (Alpine) (Alpine) 21 Average Residence 2 Residence Residence 2 Residence Residence 2 Residence 21 20 0 4 57 Average Average 16 21 59 M M M 62 2 35 (Birch) (Birch) (Birch) Good 20 Residence 2 Residence 2 Residence 2 Residence 2 Good Good 1 4 4 2 19 2 14 53 32 Icon City Icon City Icon City (Tower 2) (Tower (Tower 2) (Tower (Tower 2) (Tower 47 Excellent Excellent Excellent 24 63 37 Punctuality of Staff Playground/ Common Facilities (Green/landscapes, Roads/Pathways, Open Spaces, Guard House/Entrance Access and Security) Room/Customer Area During Key Collection (Comfort, Cleanliness Collection (Comfort, Key Area During Room/Customer and Amenities) 2 5 0 8 5 Poor Poor 1 18 22 23 M City M City M City 41 35 (Tower 3) (Tower (Tower 3) (Tower (Tower 3) (Tower 77 27 37 2 0 3 10 18 40 M M M 51 Below Average Below Average Below Average 55 18 (Alpine) (Alpine) (Alpine) 35 27 Residence 2 Residence Residence 2 Residence Residence 2 Residence 39 2 0 2 0 5 Average Average Average 3 26 63 M M M 54 42 (Birch) (Birch) (Birch) 28 17 4 55 Residence 2 Residence Residence 2 Residence Residence 2 Residence 1 0 Good Good Good 3 2 0 8 4 5 32 20 36 Icon City Icon City Icon City (Tower 2) (Tower (Tower 2) (Tower (Tower 2) (Tower 46 46 Excellent Excellent Excellent 58 11 28 Customer Service (Product Knowledge, Appearance and Etiquette) Appearance (Product Knowledge, Customer Service Timeliness Our Product (Value for Money, Workmanship, Quality of Finishes, Workmanship, for Money, Our Product (Value Quality of Fixtures/Fittings and Design) 108 Annual Report 2017 Our Social Responsibility Benefits ofCONQUAS consist ofstructuralworks,architecturalworksandmechanical engineeringworks. changes andqualitydemandsfromamoresophisticatedpopulation.ThethreemaincomponentsoftheCONQUAS assessment system forthequalityofbuildingprojects.Periodically, CONQUAS hasbeenfine-tunedto keep abreastwithtechnological The ConstructionQualityAssessmentSystem (CONQUAS) wasintroduced inSingapore1989. Itservesasastandardassessment requirements, allowingMahSingtosettargetsforthedesiredstandard andqualityofitsdevelopments. Assessment System (“CONQUAS”). ContractorsofCONQUAS-assessed projectsarerequiredtocomplywithCONQUAS Many ofourdevelopmentsareassessedbytheBuildingandConstructionAuthority ofSingapore’s ConstructionQuality future marketability andimprovecustomerconfidence. Currently, qualityworkmanship isveryimportantintheconstructionandpropertyindustry. High-qualitybuildingprojectsensure Our QualityWorkmanship Department ofBukitAmanandKuala Lumpur Police Contingent. have beenimprovedbyparticipatinginmonthlygroupdiscussionsorganisedtheCrimePreventionandCommunitySafety Group Securityhasalsobeenworkingcloselywiththepoliceforcethisyeartocombatcrime. Safetyawarenessandknowledge of zerocrimedemonstratestheeffectivenessourprocessimprovements insecurityanditsvaluetoourcustomers. Security policiesandauditsarealsostreamlinedacrossallthreeregionsnationwide:Central,NorthernSouthern.Therecord auxiliary policeprovidebettersurveillanceandpatrolserviceswithin ourcoveragearea. Group Securityhasbeenworkingdiligentlytoimprovethelevelofsecurityservicesatallprojectsites.Ourteamand Safety ofOurDevelopments REPORT SUSTAINABILITY organisations thatconsistently deliver projects witha high CONQUAS score Gives acompetitiveedgeto 2 performed in2017atour Allows theinternational projects nationwide. workmanship quality assessments were CONQUAS benchmarking of A totalof 89 1 A goodCONQUAS score trackrecord improves MahSing’s imageand ensures future marketability 3 109 Our Social Responsibility Mah Sing Group Berhad REPORT well-being Health and SUSTAINABILITY SUSTAINABILITY Pollution control Pollution Average score Average 74.51 65.78 79.25 38.11 Waste Waste Air quality management Water scarcity Water Transportation Number of Projects Assessed by CONQUAS in 2017 Assessed by CONQUAS Number of Projects 66 9 11 3 events Demand for clean energy Extreme weather Area Klang Valley Johor Penang Sabah Challenges Increasingly Faced by Mah Sing Challenges Increasingly Faced by Mah We have started placing more emphasis on quantifying the economic, social and environmental benefits that result from our have started placing more emphasis on quantifying the We examine In addition to considering the design features of our developments, we also sustainability investments and initiatives. continue will We developments. our of stakeholders all and employees our of well-being the with along engagement community complex affect our business and work diligently to ensure our resilience in the face of to monitor global risks and trends that may and interrelated challenges. Moving Forward Our integrated approach to sustainability means that we think broadly about our business and global impacts. Mah Sing’s our business and global impacts. Mah Sing’s Our integrated approach to sustainability means that we think broadly about our efforts and results. exemplifies comprehensive environmental, social and governance (ESG) programme CONQUAS Assessments in 2017 CONQUAS 110 Annual Report 2017 GOVERNANCE OUR CORPORATE Our Corporate Governance Diversity (years old) Age Group OUR PEOPLE Chinese 40-49 21% 46% 50 &above 10% PROPERTY PROPERTY DIVISION DIVISION Malay 48% 33% <30 Indian 4% Others 1% 30-39 36% 111 Our Corporate Governance Mah Sing Group Berhad Good corporate governance has become a fundamental part of our corporate culture and The Board strives Group. of the business practices to ensure the continued strong performance of our businesses and maintain investor confidence. long-term growth of our business The sustainable, value is reflected by performance and stakeholders’ the over record track and performance Group our years. 112 Annual Report 2017 Our Corporate Governance • • • • • • • • • • recognitions: - As testimonyoftheGroup’s commitmenttogoodcorporategovernance, theGroupisproudtohavereceivedfollowing THE GROUP’SACHIEVEMENTS record overtheyears. business performance and stakeholders’ value is reflected by our Group performance and track of ourbusinessesandmaintaininvestorconfidence. Thesustainable, long-termgrowthofour business practicesoftheGroup. TheBoardstrivestoensurethecontinuedstrongperformance Good corporategovernance has becomeafundamentalpartofourcorporate culture and culture andtransparencywithintheCompanyitssubsidiaries( “Company”) remainedcommittedinpromotinggreaterinternalisationofcorporategovernance The BoardofDirectors(“Board”)andManagementMahSingGroupBerhad“MahSing”or OVERVIEW STATEMENT CORPORATE GOVERNANCE The EdgePropertyExcellence Awards 2017–Top 10PropertyDevelopersAwards StarProperty.my Awards 2017–TheAll-Star Award Top Ranked DevelopersoftheYear Sin ChewBusinessExcellence Awards 2017–PropertyExcellence Award Property InsightPrestigiousDeveloperAwards 2017–Top 10Developers Malaysia BestEmployerBrandAwards 2017 iProperty DevelopmentAwards 2017–SpecialProgressiveDeveloperAwards Frost &SullivanMalaysiaExcellence Awards 2017–BestPropertyDevelopmentCompanyoftheYear BCI AsiaAwards 2017–Top 10Developers The 7 13 th EuromoneyAnnualReal EstateSurveyfor BestDeveloper–Industrial/Warehouse inMalaysia2017 th AsianExcellence Awards –BestInvestorRelations Company “Group”). 113 Our Corporate Governance Mah Sing Group Berhad Board Oversight, Engagement, Delegate and Authority, Accountability Management Engagement, and Reporting, Accountability OVERVIEW STATEMENT OVERVIEW CORPORATE GOVERNANCE CORPORATE TEAM SENIOR FUNCTIONS MANAGEMENT DEPARTMENTS/ COMMITTEE REMUNERATION PLASTICS) COMMITTEE NOMINATION BOARD OF BOARD DIRECTORS (CORPORATE, PROPERTY, PROPERTY, (CORPORATE, STAKEHOLDERS CHIEF EXECUTIVE OFFICER RISK MANAGEMENT TEAMS RISK MANAGEMENT AUDIT COMMITTEE GROUP MANAGING DIRECTOR/GROUP CHIEF EXECUTIVE DIRECTOR/GROUP GROUP MANAGING MAH SING COMMITTEE FOUNDATION MANAGEMENT SUSTAINABILITY SUSTAINABILITY SUSTAINABILITY SUSTAINABILITY WORKING COMMITTEE WORKING INDEPENDENT ASSURANCE Internal Auditors External Auditors The governance framework of the Group is illustrated below. The framework demonstrates how the Company manages the how the Company manages The framework demonstrates of the Group is illustrated below. The governance framework facilitates the roles and explains how the organisational structure to achieve its objectives. It also businesses of the Group Group Managing Director/ the Board, the Board Committees, the with two-way interactions between functions at each level, the the same time, and operational level. At down to the Management Officer, and the Chief Executive Group Chief Executive evaluation and decision. flow back upwards to the Board for further of plans, reporting and accountability will actions, execution GOVERNANCE FRAMEWORK GOVERNANCE 114 Annual Report 2017 Our Corporate Governance OVERVIEW STATEMENT CORPORATE GOVERNANCE current corporategovernance information. is updatedperiodicallytoensure thatitreflectstheGroup’s Corporate GovernanceOverview Statement. Thewebsite Terms ofReference ofBoardCommitteesmentionedinthis Our websitecontainscopies oftheBoardCharterand Corporate GovernanceReport. appropriate totheGroupassetoutinthisstatementand intended outcomeswhicharefoundtobesuitableand have, inall materialrespects,beenappliedtoachievetheir The BoardbelievesthatthepracticessetoutinCode the challengingbusinessenvironment. governance, as well asthechangingneedsofGroupin to reflect changes in the law and developments in corporate practices arereviewedregularlyandrevisedasappropriate The applicationofcorporategovernanceprinciplesand as anannouncementonthewebsiteofBursaSecurities. www.mahsing.com.my under the Governance section as well Report isaccessibleontheCompany’s websiteat Corporate GovernanceReport. TheCorporate Governance explanation foranysuchdeparture(s),aredisclosedinthe governance practiceassetoutintheCode, including The detailsoftheextentCompanyapplieseachcorporate (c) (b) (a) and industrypractices: consideration of the Group’s structure, business environment during thefinancialyearended31December2017, having applied the3principleswhicharesetoutinCode This overviewstatementreportsonhowtheGrouphas principles andpracticesundertheCode. of theCode. WheretheCompany’s practicesdifferfromthe future prioritieswithreferencestotheprinciplesandpractices corporate governancepractices,itskey focusareasand some insights into the Board’s view of the Company’s This CorporateGovernanceOverviewStatement provides Act 2016. Securities Berhad(“BursaSecurities” ) andtheCompanies Requirements (“ListingRequirements”) ofBursaMalaysia while ensuringcompliancewiththeMainMarket Listing in implementingthecorporategovernancepractices, Corporate Governance released in April 2017 (“Code”) The BoardhasbeenguidedbytheMalaysianCodeon relationship withstakeholders. Integrity incorporatereportingandmeaningful Effective auditandriskmanagement; Board leadershipandeffectiveness; (c) (b) (a) The Boardassumesthefollowingdutiesandresponsibilities: information systemareadequateandeffective. and ensuringthesystemofinternalcontrolsmanagement Management, implementing investor relations programmes businesses, riskmanagement,successionplanningofSenior strategic plansanddirections,overseeingtheconductof The Board is primarily responsible for the Group’s overall sustainable valuetoitsstakeholders. achieve the Group’s strategic objectives and the delivery of long-term success,workingwiththeSeniorManagementto performance underitscollectiveresponsibilityfortheGroup The BoardoverseestheGroup’s businessesandits Roles andResponsibilities ofDirectors PRINCIPLE A:BOARD LEADERSHIPANDEFFECTIVENESS pages 130to131ofthisAnnualReport. framework andinternalcontrolsystemisincludedon A statementfeaturingtheGroup’s riskmanagement and potentialreturnstothestakeholders. to achieveanappropriatebalancebetweenrisksincurred of appropriate internal controls and mitigation measures Identifying principalrisksandensuringtheimplementation employees onacceptableandunacceptablebehaviours. A CodeofConductandEthicsprovidesguidanceto ensure itisbeingproperlymanaged. Overseeing theconductofGroup’s businessto well asmaintainingaharmoniousenvironment. safeguarding thewelfareofpeopleandcommunityas a satisfactory balance between bottom-line growth, strategic planalsopromotessustainabilityinachieving that isinalignmentwithMahSing’s visionand mission.The Senior Management to continue to drive business growth corporate strategyanddirections,havingworked with The BoarddischargesitsroleinleadingtheGroup’s implementation oftheGroup’s strategicplans. Objectively reviewing,approvingandmonitoringthe 115 Our Corporate Governance Mah Sing Group Berhad OVERVIEW STATEMENT OVERVIEW CORPORATE GOVERNANCE CORPORATE Meeting papers are distributed to the members of Board to the members are distributed Meeting papers sufficient notice before meetings to Committees with to opportunity the and have peruse the members to enable and obtain further explanation seek additional information on personnel Management Senior from clarification or deliberated. All deliberations and the matters to be the Board Committees were recorded recommendations of thereat and the contents were as minutes of the proceedings of the meetings subsequent at the confirmed subsequently During Board meetings, the Chairman Board Committees. would update the Board on key of the Board Committees and recommendations which require discussions, highlights from the Board. further deliberation, direction or decision invited to brief and Senior Management personnel were of the Group to the provide an insight into the operations Committee members. Audit Committee Audit of the Audit The composition and summary of activities Committee Audit the in separately out set are Committee in this Annual Report. contained Report Nomination Committee the following The Nomination Committee currently comprises Directors, members, who are all Independent Non-Executive including the Chairman. Bin Mat Zain (R) Sri Yaacob Jen. Tan Director) (Chairman, Independent Non-Executive Yaakob Seri Siti Norma Binti Sri Dato’ Tan Director) Non-Executive Independent (Member, (Appointed on 16 April 2018) (R) Captain Izaham Bin Abd. Rani Director) Non-Executive Independent (Member, Leong Kok Mr Loh Director) Non-Executive Independent (Member, Encik Abd Malik Bin A Rahman Director) Non-Executive Independent (Member, (Appointed on 16 April 2018) The Nomination Committee met 2 times during the financial year with full attendance. Reviewing the adequacy and effectiveness of the and effectiveness the adequacy Reviewing systems and internal control management information systems. serves as a function which Internal Audit The Group’s sufficient assurance of regular review means of obtaining effectiveness of the internal control of the adequacy and of is described in the Statement systems of the Group Annual Report. 135 of this on page Function Audit Internal orderly succession of senior Ensuring there is by candidates of sufficient caliber. management positions the Nomination The Board delegates its authority to Committee to review Committee and Remuneration for the succession plans and remuneration packages Directors. policies appropriate are there ensures also Board The performance and appointments training, continuous for monitoring of management positions. of implementation and development the Overseeing communications an appropriate investor relations and at participation policy which encourages shareholders’ communication general meetings, promotes effective and other and proactive engagements with shareholders stakeholders. The Audit Committee and Nomination Committee The Audit Directors, while comprise all Independent Non-Executive of Committees comprise a majority the Remuneration Directors. Independent Non-Executive The terms of reference of the Board Committees are available online at www.mahsing.com.my. The Board is assisted by 3 Board Committees, namely Audit namely Audit The Board is assisted by 3 Board Committees, Committee and Remuneration Nomination Committee, in discharging of its oversight function. These Committee, Committees play a significant part in reviewing matters terms of reference and facilitating within each Committee’s discharge of its duties and responsibilities. the Board’s Each of these Committees have specific terms of reference, scope and specific authorities to review matters and report to the Board with their recommendations. The ultimate responsibility for the final decision on all matters, however, rests with the entire Board. (d) (e) (f) Board Committees 116 Annual Report 2017 Our Corporate Governance OVERVIEW STATEMENT CORPORATE GOVERNANCE (a) Committee concluded,amongothers,thefollowings: From the above evaluation andassessment,theNomination (c) (b) (a) followings: The BoardandCommitteesevaluationcomprisedthe Code havealsobeenboughtupfordiscussionandnotation. Directors. TheissuesarisingfromCompaniesAct2016andthe skills, diversity, trainingrequirementsanddevelopmentofthe also reviewedtheBoardandCommitteescomposition, Directors oftheCompany. TheNominationCommitteehas Requirements andtheirtenureofserviceasIndependent based onspecificcriteriaofindependenceaspertheListing assessment onthe independence ofthe Independent Directors Board CommitteesandindividualDirectors,conductedan and evaluatedtheperformanceeffectivenessofBoard, During thefinancialyear, theNominationCommitteehasassessed Charter. responsibilities werewelldefined andsetoutintheBoard for theGroup’s currentbusiness profile. Their respective knowledge ontheBoardaswellCommittees adequate innumberandthereisarightmixofskills the BoardandCommittees’ compositionswere best interestoftheCompany. the abilitytoexercise independentjudgementandact inthe any businessorotherrelationshipswhichcouldinterferewith making process,independentofmanagementandfreefrom effective checksandbalancesontheBoard’s decision Group’s businessoperationsandactivities,abilitytoensure Requirements, requiredmixed ofskills,knowledgethe including criteria of independence as per the Listing Directors hasbeenconductedbasedonspecificcriteria, annual reviewontheindependenceofallIndependent programs inareaswhichtheDirectorcouldimproveon. assessment ofindependence, traininganddevelopment duties, knowledge, expertise, integrity, timecommitment, criteria includingcontributiontointeractions,roleand Committee memberhasbeenconductedbasedonspecific annual assessmentoncontributionofindividualDirectorand Board governance. succession planning, size of non-executive participation and responsibilities of the Board and Board Committees, qualities of the Directors and Board Committees, principle and structure, therequiredmixofskills,experienceandother specific criteria,coveringareassuchasBoardcomposition Committees asawholehasbeenconductedbasedon annual assessmentoneffectivenessoftheBoardand with fullattendance. The Remuneration Committeemet onceduringthefinancialyear (Appointed on16April2018) (Member, IndependentNon-Executive Director) Encik AbdMalikBinARahman (Member, IndependentNon-Executive Director) Captain IzahamBinAbd.Rani (R) (Appointed on16April2018) (Member, IndependentNon-Executive Director) Tan SriDato’ SeriSitiNormaBinti Yaakob (Member, GroupManagingDirector/ChiefExecutive) Tan SriDato’ SriLeong HoyKum (Chairman, IndependentNon-Executive Director) Jen. Tan SriYaacob BinMatZain(R) including theChairman. members, withmajorityIndependentNon-Executive Directors, The Remuneration Committeecurrentlycomprises thefollowing Remuneration Committee proposed BoardcandidatesaresetoutintheCharter. The nomination,assessmentandevaluationprocessesonthe recommendations oftheNominationCommittee. The Boardmembersunanimouslyconcurredwiththeabove the BoardmeetingforBoard’s consideration andapproval. The NominationCommittee’s recommendationsweretabledat (c) (b) Group’s conductofbusiness. independent judgementandcontributeobjectivelytothe Directors cancontinuetoprovidecheckandbalance, bring Group’s businessoperationsandactivities,theIndependent Independent Director. With their in-depth knowledge of the not bemeasuredsoleybythetenureofserviceasan her caliber, experience and personal qualities, and should responsibilities effectively is very muchafunction of his/ to remainindependentincarryingouthis/herrolesand independence. TheabilityofanIndependentDirector as wellmeetingallothercriteriasetforevaluationof of independenceassetoutintheListingRequirements that eachofthemcontinuedtofulfillthedefinitionandcriteria that wereessentialindicatorsoftheirindependence, and Company continued todemonstrate conduct andbehavior all the3IndependentNon-Executive Directorsofthe review. participation anddialogueduringthecurrentyearunder his/her commitmenttotheCompanyintermsoftime, on theBoardandCommittee(s)haddemonstrated each Directorhastherequisitecompetence, calibertoserve 117 Our Corporate Governance Mah Sing Group Berhad 60 42 24 683 Total 4,338 2,372 21,433 28,952 RM’000 - - - (2) 23 35 35 35 128 RM’000 in-kind Benefits- OVERVIEW STATEMENT OVERVIEW - - - (1) 54 CORPORATE GOVERNANCE CORPORATE 461 250 2,294 3,059 RM’000 Statutory Statutory Contribution - - - 803 208 2,150 13,500 16,661 RM’000 Bonuses affairs and goals of the Group, and is in line with the individual is in line with the individual and goals of the Group, affairs and contributions, that reflect their respective performance, of the goals, and which are commitment and achievement corporate in tandem with the Company’s competitive and are strategy. objectives, culture and benefits for Non-Executive fees and In the case of Directors’ remuneration of level the recommended Board the Directors, extent of and experience the performance, that reflects Director, by each Non-Executive undertaken responsibilities of the shareholders at the Annual subject to the approval the Where applicable, the Company. General Meeting of consideration any relevant information into Board also takes consultants fees provided by independent on Directors’ Committee is or from survey data. The Remuneration key for recommendations providing for responsible also executives. in the decisions Individual Directors do not participate regarding their individual remuneration. which are annual fees The Company pays its Directors’ approved annually by the shareholders. - - - 386 5,616 1,692 1,284 8,978 Salaries RM’000 - - - - 60 42 24 126 Fees RM’000 Executive Directors: Executive Hoy Kum Sri Leong Sri Dato’ Tan Directors Dato’ Steven Ng Poh Seng Ng Poh Steven Dato’ Datuk Ho Hon Sang Datuk Leong Yuet Mei Yuet Datuk Leong Non-Executive Directors: Non-Executive Zain (R) Bin Mat Sri Yaacob Jen. Tan Captain Izaham Bin Abd Rani (R) Captain Izaham Bin Abd Rani Mr Loh Kok Leong Kok Mr Loh Total In determining the remuneration packages of Executive Executive of packages remuneration the determining In the considered has Committee Remuneration the Directors, benefits which commensurate with the compensation and well as and performance, responsibilities level of the Directors’ performance relative the Group’s as taking into consideration Survey data on the remuneration practices to the industry. into consideration in of comparable companies are taken determining the remuneration package. from the The Board agreed with the recommendations Committee that the remuneration paid to Remuneration Directors for the financial year has been the Executive other comparable public listed against benchmarked which are commensurate companies within the same industry, knowledge, working experience, with their expertise, the to relation in participation of level and responsibilities The objectives of the Remuneration Committee in determining Remuneration The objectives of the of the compensation packages the levels and components Directors that attract and retain dedicated are to motivate, Group. to the success of the are deemed as the key The Level and Make-up of Remuneration Make-up and The Level The Group The details of the aggregate remuneration of the Directors of the Company, comprising remuneration received and/or receivable comprising of the Directors of the Company, The details of the aggregate remuneration 31 December 2017 are categorised as follows:- the financial year ended from the Company and its subsidiaries during Disclosure on Remuneration of Directors Disclosure on Remuneration 118 Annual Report 2017 Our Corporate Governance (2) (1) Notes: OVERVIEW STATEMENT CORPORATE GOVERNANCE remuneration paidasitislinked totheGroup’s performance. such disclosurestillallowsstakeholders afairviewofthe with theirperformance. TheCompany believesthat total employeesremuneration oftheGroup, commensurating Management wasRM4,834,165, representing4.2% ofthe The aggregateremunerationpaidtothe5key Senior activities. knowledge, expertise andexperienceintheGroup’s business resource environmentforpersonnelwiththerequisite personnel, havingconsideredthehighlycompetitivehuman disclose onnamedbasisthe5key SeniorManagement The Companybelievesitmaynotbeinitsbestinterestto industry. benchmarked againstothercompaniesoperatinginsimilar performance, theoverallperformanceofCompanyand has beenconsistentlyappliedandisbasedonindividual employee oftheCompany. Thebasisofdetermination are determinedinasimilarmannerasothermanagement combination ofanannualsalary, bonusandbenefits-in-kind The remuneration of the5key SeniorManagementis executive talents. sufficient to ensure that the Group is able to attract and retain whether theremunerationpackagesarecompetitiveand expertise andcontributionstotheGroup’s performanceand consideration includedtheirindividualresponsibilities,skills, Senior Managementpersonnel,factorsthatweretaken into In determining the remuneration packages of the Group’s key Personnel Disclosure onRemuneration ofKey 5SeniorManagement The Company Total Mr Loh Kok Leong Captain IzahamBinAbdRani (R) Jen. Tan SriYaacob BinMatZain(R) Non-Executive Directors: Directors Datuk Leong Yuet Mei Executive Directors: Benefits-in-kind comprisedprovisionofcompanymotorvehicle, petrolallowance, insuranceandphonebill Statutory contributionscomprised EPFandSOCSO RM’000 Fees 126 24 42 60 - RM’000 Salaries 386 386 - - - of sustainabilitystrategyandrelated matters. of theseniormanagement,in overseeing theimplementation Sustainability ManagementCommittee, comprisingmembers matters intheorganization.TheBoardissupportedby Ultimately, theBoardisaccountableforsustainability (b) SustainabilityManagementCommittee to theGroup. internal controls,regulatoryandstatutorymatterspertaining and strategies,operational,environmental,riskmanagement, performance oftheGroup, sales,marketing development meetings withtheoperatingheadstodeliberateon The SeniorManagementTeam holdsregularmanagement human resources,compliance, creditcontrolandlegalissues. financials, riskmanagement,internalcontrols,sustainability, relating tooperational,salesandmarketing strategies, and the implementation of the Board’s decisions and policies and functions of the Board, oversees the running of the Group other key executives, assumingsomeoftheresponsibilities Directors, ChiefExecutive Officer, ChiefFinancialOfficer and Managing Director/GroupChiefExecutive, Executive The SeniorManagementTeam comprisestheGroup (a) SeniorManagementTeam and aresetuptoassisttheBoardinrunningofGroup. teams whose functions as well as authority are clearly defined The Boardhasalsoestablishedthefollowingmanagement Management Teams Bonuses RM’000 208 208 - - - Contribution Statutory RM’000 54 54 (1) - - - Benefits- in-kind RM’000 35 35 (2) - - - RM’000 Total 809 683 24 42 60 119 Our Corporate Governance Mah Sing Group Berhad OVERVIEW STATEMENT OVERVIEW CORPORATE GOVERNANCE CORPORATE The positions of Chairman and the Group Managing Director/ the Group Managing of Chairman and The positions At are held by different Directors. Group Chief Executive is an Independent Bin Mat Zain (R) Sri Yaacob present, Jen. Tan Hoy Leong Sri Sri Dato’ and Tan Chairman Non-Executive Chief Executive. is the Group Managing Director/Group Kum in the best interest of Mah The Chairman acts independently and effectiveness Board ensuring for responsible is and Sing whereas the Group Managing Director/ standard of conduct the oversee Directors and Executive Chief Executive Group of implementation businesses, Group’s the of management running of the businesses. Board policies and day-to-day Managing Director/ The roles of the Chairman and the Group are described in detail in the Board Group Chief Executive website which is made available on the Company’s Charter, at www.mahsing.com.my. Directors Supply of Information and Support for with sufficient notice Board papers are distributed to Directors peruse to Directors the enable to meetings Board before information, and and have the opportunity to seek additional on the matters to obtain further explanation and clarification be deliberated. Group within the all information to have access Directors The and Secretaries Company Management, Senior the from of the Group and may seek independent other employees consultants where advice from external professional in the furtherance of their duties and they may necessary, and independent to make as cost, so Group’s the so at do any investigation informed decisions. The Directors may direct to fulfill their responsibilities and may retain, at the Company’s or other any external legal where appropriate, expense, services that is considered necessary in carrying out their duties as Directors. the Senior Management personnel, Whenever necessary, meetings the attend to invited are advisers or auditors external within matters on to report Committees Board Board and of knowledge and provide clarity on the agenda their expertise, being discussed including details on recommendations make to Directors the to enable Directors, assist the to independent and informed decisions. identifying issues concerning stakeholders, stakeholders, identifying issues concerning of the issues, determining the materiality action plans to mitigate issues of proposing necessary concern, and to bring improvement in the key formulating strategies areas. In order to ensure continual effective supervision and accountability of the Board and management, there is a clear distinction and division of responsibilities between and the Group Chairman the Independent Non-Executive which is regularly Managing Director/Group Chief Executive, reviewed to meet changing circumstances. Separation in the Roles of Chairman and Chief Executive of Chairman and Chief Executive Separation in the Roles For further details, please refer to the Statement on Risk For further details, please refer to the Statement Management and Internal Control contained in this Annual Report. The Enterprise Risk Management reviews are performed are reviews Management Risk Enterprise The assess and manage the risks faced by the annually to identify, areas risk major address to out carried are reviews The Group. from the perspectives of environmental, of concern, if any, operational controls, regulatory and legal, governance and suppliers and financial, customers, products and services, human capital. The Risk Management Team comprises management staff management comprises Team Management Risk The and Plastics Divisions which are Property from the Corporate, monitoring assigned with the responsibility of continuously and managing the risks of the Group. (c) Risk Management Team For further details, please refer to the Sustainability Statement Statement Sustainability the to refer please details, further For contained in this Annual Report. • • • Committee communicates with The Sustainability Working via emails, meetings the respective departments periodically sustainability across and discussion sessions to incorporate the organization. • The Sustainability Working Committee reports to the to reports Committee Working Sustainability The Committee and is responsible Sustainability Management of sustainability and execution for the overall implementation matters, such as: 120 Annual Report 2017 Our Corporate Governance OVERVIEW STATEMENT CORPORATE GOVERNANCE preparation forandconductofmeetings. The CompanySecretariesalsoassisttheChairmanin statutory registerattheregisteredofficeofCompany. proceedings and resolutions passed aremaintained in the convened, andthataccurateproperrecordsofthe Board Committeesandgeneralmeetingsareproperly The CompanySecretariesattendandensurethatallBoard, relevant legislation. requirements suchasthelistingrules,codes,guidelinesand related statutoryobligations,aswellupdatesonregulatory Company Secretaries,particularlyrelatingtoproceduraland All Directorshaveaccesstotheadviceandservicesof Bursa Securities. immediately ofallcorporateannouncementsreleasedto financial results or corporate proposals. They are also notified securities of theCompany prior totheannouncementof Directors are notified of the restriction in dealing with the require theBoard’s attention,directionordecision. recommendations oftheBoardCommitteeswhichmay would informtheDirectorsofanysalientmattersnotedor At Boardmeetings,theChairmanofCommittees meeting. each Directorpriortoconfirmationoftheminutesinnext minuted. MinutesofeachBoardmeetingarecirculatedto of themeetingsandresolutionsreachedhavebeenduly applicable, approvaloftheBoardisobtained.Proceedings changes intherequirementsofregulatorybodies,andwhere acquisition anddisposalofassetsincludinginvestments of projects,divisionalperformance, businessoutlook,major financial andcorporateissues,activitiesperformance Directors arebriefedon,amongstothers,majoroperational, During Boardmeetings,theIndependentNon-Executive and statutorymatterspertainingtotheGroup. environmental, riskmanagement,internalcontrols,regulatory sales, marketing developmentandstrategies,operational, heads todeliberateontheperformanceofGroupincluding Officer hold regular management meetings with operating The Executive Directors together with the Chief Financial resolutions atthegeneralmeeting. connected tothemsimilarlyabstainfromvotingonthe proposal, andwillfurtherundertake toensurethatpersons in MahSingontheresolutionspertainingtocorporate shall abstainfromvotinginrespectoftheirshareholdings by shareholdersatthegeneralmeeting,interestedDirectors In theeventacorporate proposal is requiredtobeapproved which theyhaveamaterialpersonalinterest. the BoardincludingCommitteesonproposalof interest and shall abstain from deliberation and decision of as practicable after they become aware of the conflict of concerned willmake adeclarationatthemeetingorassoon In theeventofpotentialconflictinterest,Director • • • • • • • conflict ofinterest: Directors shouldobservethefollowinginmanagingpotential quarterly basistoupdatetheirdisclosureofinterest. The BoardwillbenotifiedbytheCompanySecretariesona Managing ConflictofInterest corporate governance. additional adviceonissuespertainingtocomplianceand consultant oncorporatesecretarialmattersandtoprovide The Companyalsoengagestheservicesofexternal of theCompaniesAct2016. are qualifiedtoactascompanysecretary under Section235 The CompanySecretarieshavetherequisitecredentialsand potential conflictofinterest Avoid any activities or transactions which may give rise to a Directorhasdirectorindirectinterest Refrain fromdeliberationandvotingonthe proposalwhere related partytransactions Comply withrelevantstatutoryrequirementsinrelationto Company Making full disclosure in relation to contracts with the Observe dutyondisclosuretotheCompanySecretaries Avoid makingsecretprofits Avoid improperuseofinformation 121 Our Corporate Governance Mah Sing Group Berhad AGM, AGM, th OVERVIEW STATEMENT OVERVIEW CORPORATE GOVERNANCE CORPORATE AGM in order to facilitate the practices of the Code. facilitate the practices of the Code. in order to AGM th AGM. AGM. th Jen. Tan Sri Yaacob, Captain Izaham and Mr Loh have Loh Mr and Izaham Captain Yaacob, Sri Tan Jen. that they have no disagreements with respectively confirmed to their retirement relating are no matters the Board and there to be brought to the attention of / resignation that needs to The Board would like the Company. the shareholders of to Jen. Tan express its sincere appreciation and gratitude invaluable for their Izaham and Mr Loh Captain Sri Yaacob, during their tenure to the Company efforts and contributions Directors. of office as Independent Non-Executive intention of retirement/resignation Following the expressed Directors which takes as Independent Non-Executive of the 26 effect immediately after the conclusion Jen. Tan Sri Yaacob Bin Mat Zain (R) and Mr Loh Kok Leong Leong Kok (R) and Mr Loh Bin Mat Zain Sri Yaacob Jen. Tan Independent as down step to intention their expressed have of of the Company at the conclusion Directors Non-Executive the 26 the composition of the Board members will comprise 6 the composition of the Board members Non-Executive Independent are 2 which of Directors, Directors, the Chairman) and 4 Executive (including Directors the In such instance, with 1 Alternate Director to the Group. requirement of 30% Company would satisfy the minimum women directors on Board under the Code. Board Balance and Independence constitutes The Board believes that its present composition which current business profile, an optimal size for the Group’s on its future is appropriate for leading the Group effectively Board consists of business growth. The composition of the qualified individuals with a broad base of industry knowledge, experience and technical skills necessary in the management and direction of the Group. of each Director is A brief description of the background and Profile in this Annual Report presented in the Directors’ website at www.mahsing.com.my. the Company’s With its diversity of qualifications and skills, and the governance has Board the Committees, Board and Board the of structure been able to provide clear and effective collective leadership to the Group and has delivered informed and independent strategy and performance to ensure judgment to the Group’s that the highest standards of conduct and integrity are always undertakings. at the core of the Group’s Hence, they shall remain in office until the conclusion of the of conclusion the until office in remain shall they Hence, 26 AGM. AGM in order to facilitate AGM th th Independent Non-Executive Director Captain Izaham Bin Director Independent Non-Executive (R), who is due for retirement by rotation pursuant Abd. Rani has Articles of Association, to Article 102 of the Company’s indicated to the Company that he will not be seeking re- election at the forthcoming 26 The Board comprises 9 members, of which 5 are Independent The Board comprises 9 members, of which Directors (including the Chairman) and 4 Non-Executive Directors, with 1 Alternate Director to the Group Executive The Chairman is Managing Director/Group Chief Executive. This Director. also the Senior Independent Non-Executive in the functioning of provides an effective check and balance Requirements, Listing the with compliance in is and Board the which requires a minimum of 2 Directors or one-third of the to be independent directors. Board, whichever is higher, Board Composition The details of the Board Charter are available for reference The details of the Board Charter are available under website at www.mahsing.com.my in the Company’s Governance section. The Board reviews the Board Charter as and when necessary The Board reviews the Board Charter as the Group and the to ensure consistency with the needs of of the Board’s new regulations which impacted the discharge relevance for good responsibilities. This is to ensure its Group. corporate governance practices within the The Board Charter also acts as a source of reference and also acts as a source of reference and The Board Charter insights to Board primary induction literature in providing members and Senior Management. The Board Charter sets out the composition, roles and sets out the composition, roles and The Board Charter an provides It Board. the of processes and responsibilities Board leads by strategic guidance overview of how the of management. It also sets out and effective oversight by the Board to various Board the delegation of authority act in members would the Board Committees to ensure their performing in stakeholders all of interest best the of the Group. responsibilities on behalf Board Charter the practices of the Code. Therefore, he will be retiring from he will be Therefore, the practices of the Code. office at the conclusion of the 26 122 Annual Report 2017 Our Corporate Governance shareholders atthe25 of the Company, has been re-elected to the Board by the rotation pursuant toArticle 102 of the Articles of Association Director, MrLoh Kok Leong whowasdueforretirementby During thefinancialyear, our IndependentNon-Executive accordance withtheCompany’s ArticlesofAssociation. to retirementbyrotationatleastonceinevery3years The IndependentNon-Executive Directorsarealso subject Company beyond9years. (R) andMrLoh Kok Leong, allofwhomhave servedforthe Sri Yaacob BinMatZain(R),CaptainIzahamAbd. Rani the IndependentNon-Executive Directors,namelyJen.Tan approval fromshareholdersontheretentionofofficeall 15 June2017. OVERVIEW STATEMENT CORPORATE GOVERNANCE During our25 shareholders’ approval. who hasatenureofservicebeyond9yearstoseekannual the Codeonretentionofofficeanindependentdirector However, theBoardacknowledgesrecommendationsof of theGroup’s businessoperationsandactivities. qualifications, experience, personalqualitiesandknowledge responsibilities effectivelyshouldbebasedonhis/hercalibre, Non-Executive Directortocarryouthis/herrolesand believes thatthesuitabilityandabilityofanIndependent Directors oftheCompanytoremainonBoard.TheBoard Currently thereisnofixed termlimitforIndependent improvements incorporategovernancepractices. concerns abouttheGroupandexchange viewsonpotential Executive Directorswiththeopportunitytoopenlyshare personnel. ThesesessionsprovideIndependentNon- and InternalAuditors withoutthepresenceofmanagement Independent Non-Executive Directors,ExternalAuditors Company hasheldatleast2privatesessionsbetween During thefinancialyearended31December2017, the independence assetoutintheListingRequirements. Non-Executive Directorsmustalsofulfilthecriteriafor to actinthebestinterestofCompany. TheIndependent with theexercise oftheirindependentjudgementorability from anybusinessorotherrelationshipswhichcouldinterfere in theday-to-daymanagementofGroup. Theyarefree None oftheIndependentNon-Executive Directorsparticipate such astheemployees,customersandbusinessassociates. not onlyoftheshareholders,butalsootherstakeholders examined, aftertaken intoaccountofthelongterminterest, by theexecutive managementwerefullydiscussedand their independentjudgementwhereallissuesproposed All theIndependentNon-Executive Directorshaveexercised th AGM heldon15June2017, wehaveobtained th AGM oftheCompany heldon to re-electionbyshareholders. remain inofficeformorethan 3yearswithoutbeingsubject re-election attheAnnualGeneral Meeting.NoDirectorshall office atleastonceinevery3yearsbutshallbeeligiblefor every yearprovidedalwaysthatallDirectorsshallretirefrom at leastone-thirdof the Directors shall retire from office In accordancewiththeCompany’s ArticlesofAssociation, Board Charter. the proposedcandidatesfordirectorsaresetoutin The nomination, assessment and evaluation processes on recommending theirappointmenttotheBoardforapproval. and otherrelevantqualitiesofthecandidates,before professionalism, integrity, competencies, timecommitment of skills,diversity, knowledge, expertiseandexperience, candidates, takingintoaccounttheBoard’s requiredmix The NominationCommittee has assessed the suitability of Executive DirectorstotheBoardon16April2018. Malik Bin A Rahman were appointed as Independent Non- Tan Sri Dato’ Seri Siti Norma Binti Yaakob and Encik Abd consultants intheidentificationofpotentialBoardcandidates. Nomination Committeemayconsidertheuseofexternal on criteriawhichtheydevelop, maintainandreview. The recommendations forappointmentstotheBoard,based The NominationCommitteemakes independent Appointments andre-electionofdirectorstotheboard Committee. Board CharterandTerms ofReference of theNomination processes andprocedureshavebeenprovidedforinthe by theNominationCommitteeandBoard.Therelevant of directorsweredulyreviewedandconfirmedforsuitability criteria forindependence of aDirector, andspecifictenures not morethan9yearsshouldalsoformpartoftheassessment As recommendedbytheCode, thetenureofdirectorship transactions whereconflictofinterestmayexist. is abletoadvisetheBoardonmattersrelatingexisting the exercise ofhis/herindependenceandjudgement, business orotherrelationshipwhichcouldinterferewith Director isindependent of managementandfreefromany and NominationCommitteearesatisfiedthattheindividual criteria defined under the Listing Requirements. The Board on theindependenceofIndependentDirectorsasper The NominationCommitteehasconducteditsannualreview 123 Our Corporate Governance Mah Sing Group Berhad ------1/1 1/1 1/1 Committee Remuneration Remuneration ------2/2 2/2 2/2 OVERVIEW STATEMENT OVERVIEW Committee Nomination CORPORATE GOVERNANCE CORPORATE ------4/4 4/4 4/4 Audit Audit Committee - - 4/4 4/4 4/4 4/4 4/4 4/4 4/4 Board AGM of the Company on 28 June 2018 and have offered June 2018 and have the Company on 28 of AGM th (Appointed on 16 April 2018) AGM: th (Appointed on 16 April 2018) Tan Sri Dato’ Sri Leong Hoy Kum; Hoy Kum; Sri Leong Dato’ Sri Tan and Seri Siti Norma Binti Yaakob; Dato’ Sri Tan A Rahman. Encik Abd Malik Bin Datuk Ho Hon Sang Seng Ng Poh Steven Dato’ Mei Yuet Datuk Leong Directors: Independent Non-Executive Zain (R) Bin Mat Sri Yaacob Jen. Tan Seri Siti Norma Binti Yaakob Sri Dato’ Tan Executive Directors: Executive Hoy Kum Sri Leong Sri Dato’ Tan Name of Directors Captain Izaham Bin Abd Rani (R) Captain Izaham Bin Abd Rani Leong Kok Mr Loh Encik Abd Malik Bin A Rahman themselves for re-election at the 26 themselves for re-election The following Directors are up for retirement at the forthcoming 26 at the forthcoming are up for retirement Directors The following The Directors allocate sufficient time to discharge their responsibilities effectively and attend Board and Board Committee discharge their responsibilities effectively and attend Board and Board Committee The Directors allocate sufficient time to attendance full by is affirmed commitment Directors’ The purview. their under matters the on deliberation sufficient with meetings year ended 31 December 2017 as tabulated below: held during the financial at all meetings Board and Board Committee Board meetings are held at quarterly intervals with additional meetings convened for particular matters as necessary depending with additional meetings convened for particular matters as necessary depending Board meetings are held at quarterly intervals on business requirement. Meetings and Time Commitment The Board currently has 2 female Directors who serve to bring value to the Board discussions from different perspectives and from different perspectives discussions Board value to the bring to who serve Directors female has 2 Board currently The at deputy general manager level and above in our Management. have 59% male and 41% female employees approaches. We In relation to boardroom diversity, the Board believes in providing equal opportunity to candidates who have an effective blend of Board believes in providing equal opportunity to candidates who the In relation to boardroom diversity, se in areas identified by the Board, should remain a priority so as not to compromi competencies, skills, experience and knowledge acknowledges the recommendations of the Code on gender diversity of 30% the Board However, age and ethnicity. on gender, women representation on Board and Management. The Board recognises the challenges in achieving the right balance of diversity on the Board. This will be done over time, taking achieving the right balance of diversity on the Board. This will be done over time, The Board recognises the challenges in members and the Board of the present and experience knowledge valuable the the Board, of size account the present into time. evolving challenges to the Company over Board Diversity (i) (ii) (iii) Seri Sri Dato’ Tan Kum, Hoy Sri Leong Sri Dato’ and with Tan of the Nomination Committee, The Board, on the recommendation the re-election of the abovementioned abstaining, had endorsed Malik Bin A Rahman and Encik Abd Siti Norma Binti Yaakob Directors. All Directors have complied with the minimum 50% requirements on attendance at Board meetings held during the financial year All Directors have complied with the minimum 50% requirements on attendance as stipulated in the Listing Requirements. 124 Annual Report 2017 Our Corporate Governance OVERVIEW STATEMENT CORPORATE GOVERNANCE • • These trainingsattendedbyDirectors include: duties asDirectorsandmembersoftheBoardCommittees. respective Director’s owntrainingneedsincarryingouttheir matters organizedbyexternalprofessionals,accordingto seminars, briefings and/or conferences on various subject Directors hadattendedtrainingprogrammes,workshops, During thefinancialyearended31December2017, all to dischargetheirresponsibilitiesanddutiesmoreeffectively. Directors toequipthemselveswiththerelevantknowledge specific trends.Suchupdatesandtrainingsshallenable Requirements, the Code as well as business and industry key developmentsintheCompaniesAct2016,Listing updated fromtimetoonrelevantlawsandregulations, professional bodiesrequiredtraininghours.TheDirectorsare training anddevelopmentneedsortheDirectors’ own annual performanceassessmentfindingsontheDirectors’ recommendation of the Nomination Committee based on its All Directorshadattendedrelevanttrainings,eitherby Securities fordirectorsofpubliclistedcompanies. the MandatoryAccreditationProgramprescribedbyBursa and managementstrategies.AllDirectorshavecompleted risks inourcorebusiness,latestregulatoryrequirements insight intothestateofeconomy, changingcommercial training anddevelopmentisvitalfortheBoardtogain knowledge tomeetthechallengesofBoard.Continuous continually developandrefreshtheirnecessaryskills development isanimportantandongoingprocessto The BoardacknowledgesthattheDirectors’ trainingand Training andDevelopmentofDirectors Directors”. subsequent subsection of “Training and Development of all Directorsduringthefinancialyeararedisclosedin of the Board. Details of the training programs attended by necessary skillsandknowledgetomeetthechallenges training programs to continually develop and refresh their All Directorsalsoallocatedtimetoattendrelevantexternal the ListingRequirements. directorships inpubliclistedcompaniesaccordancewith circumstances, theDirectorsmustnotholdmorethan5 time expectedtospendonthenewappointment.Inany accepting anynewdirectorshipsandtoindicatethe The DirectorsarerequiredtonotifytheChairmanbefore Towards RiskBased Approach AMLATFPUAA 2001:RiskChallenges& Vulnerabilities Amidst GeopoliticalShifts Affin HwangCapitalConferenceSeries2017: Opportunities provision ofthese servicesdidnotcompromise theexternal year ended31December2017 andconcludedthatthe services providedbytheexternal auditorsduringthefinancial The Audit Committeehasalsoconsidered the non-audit audit andthepreparation contentsoftheirauditreport. queries orconcernsrelatingto theconductofstatutory the Companyandareavailabletorespondshareholders’ external auditorsattendedallAnnualGeneralMeetingsof Executive Directors and management staff. In addition, the auditors at least 2 times a year without the presence of the statements. TheAudit Committeealsomeetsupwithexternal of theauditprocess,findingsandGroup’s financial Committee toreviewauditplan,thescopeandadequacy The externalauditorsattendedallmeetingsofAudit ensuring compliancewithaccountingstandards. external auditorsinseekingprofessionaladvicetowards The Groupmaintains a transparent relationship with the Relationship withExternalAuditors anditsIndependence PRINCIPLE B:EFFECTIVEAUDIT ANDRISKMANAGEMENT • • • • • • • • • • • • • • • • • • • • 2018 BudgetSeminar Transfer PricingConference2017 Cybersecurity RiskImplications The ImplicationofMFRS9OnBusinessStrategy & Development Goals The role of the private sector in achieving the Sustainable SDG BusinessSummit2017-asaforceforgood. Implementing ComplianceattheWorkplace Personal DataProtectionAct2010/Standards 2015 and National Tax Conference2017 National GST Conference 2017 NCCIM EconomicForum2017 MFRS Conference2017-TheFutureofFinancialReporting MFRS 9:Status Update Market Outlook:Mid-yearReview International InvestmentFundForum2017 Fraud RiskManagementWorkshop Companies Act2016:PracticalInsights&theChallenges Duties andResponsibilities ofDirectors&Overviewthe Capital Market Conference2017 Innovation MindsetwithEffectiveGovernance CG BreakfastSerieswithDirectors:Integratingan Compliance Conference2017 Board Companies Act2016-Key ChangesandImplicationto Compliance withSustainability Board Excellence: HowtoEngageandenthuseBeyond Interest EntitiesandScheduleFunds Audit OversightBoard ConversationwithAuditors ofPublic 125 Our Corporate Governance Mah Sing Group Berhad OVERVIEW STATEMENT OVERVIEW CORPORATE GOVERNANCE CORPORATE Code of Conduct and Ethics Code of Conduct a ensure help and efficiency, and productivity promote To environment, work productive and cooperative safe, pleasant, Employee in included is that Conduct of Code a has Group the accessible on the intranet of the Group. Handbook and freely guiding and expectations the sets out Conduct Code of The workplace behavior to help enforce principles for appropriate management policies. the Code of Conduct and was The Board has reviewed of Conduct and Ethics to promote renamed as Code upholding in commitment Company’s the exemplify and and ethical the highest standards of business conduct the of preservation the to fundamental are that behaviours subsidiaries. its and Company the of success and reputation to all Directors, The Code of Conduct and Ethics is applicable Management and employees of the Group. Ethics have beenThe principles of the Code of Conduct and employees of theguiding the Directors, Management and reasonable judgement when conducting the Group to exercise business. It also serves as a set of guiding principles for Group’s and responsibilities. all employees in carrying out their duties Place Whistleblowing at Work of lawful andThe Company acknowledges the importance require its employeesethical behaviours in all its activities and laws, regulations andto act in accordance with all applicable personaland business of standards high observe to and policies ethics in the conduct of their duties and responsibilities. The Company has a policy which serves as an internal disclosing channel in relation to whistleblowing at work place which enable employees to raise genuine concerns, disclose alleged, suspected or known improper conduct at the workplace without fear of retribution or detrimental action. Employees also have free access to the Independent Directors and may raise concerns of non-compliance to them Employees may also Department. or through the People report observed non-compliance of conduct to the Chairman Committee. of Audit The Statement on Risk Management and Internal Control is Control Internal and Management Risk on Statement The set out on pages 130 to 132 of this Annual Report. The Directors’ Statement on the Group’s Risk Management Risk Management on the Group’s Statement The Directors’ and Internal Control, which has been reviewed by the external auditors, provides an overview of the risk management and state of internal controls within the Group. Risk Management and Internal Control The Board agrees with the recommendation of the Audit of the Audit The Board agrees with the recommendation on the Committee on the suitability and independence to the shareholder external auditors and thereby recommends on for approval at the forthcoming annual general meeting the financial for the re-appointment of Messrs Deloitte PLT year ending 31 December 2018. The external auditors, since their appointment, have complied The external auditors, since their appointment, of Accountants with the requirements of Malaysian Institute assigned to the in relation to rotation of their audit partners Group every 5 years. The external auditors have con¬firmed with written assurance The external auditors have con¬firmed with any identified Committee that they have not to the Audit with the and are in compliance breach of independence in the by-laws (on independent requirements set out for Professional Professional Ethics, Conduct and Practice) Accountants of Malaysian Institute of Accountants. The Audit Committee and the Board place great emphasis Committee and The Audit independence of the external auditors on the suitability and and transparent to the stakeholders. in providing relevant considered the the Board, having year, During the financial satisfied was Committee, the Audit recommendations by has met the Messrs Deloitte PLT that the external auditors, and independence criteria on assessment of the suitability of audit review of the external auditors including quality its resources expertise, procedures, adequacy of audit firm’s the audit plan, and to carry out the audit work according to independence of the external auditors. auditors’ independence and objectivity. Details of the audit Details of and objectivity. independence auditors’ for auditors external the to paid/payable fees non-audit and the financial year are outlined in the services rendered during Information included in this Annual Additional Compliance Report. 126 Annual Report 2017 Our Corporate Governance OVERVIEW STATEMENT CORPORATE GOVERNANCE organised by local and foreign brokerages. The Company is and overseas investor conferences and non-deal roadshows States. TheManagementalsoparticipatedinseveral local Singapore, Hong Kong, Japan,Thailand,EuropeandUnited members oftheinvestmentcommunityfromacrossMalaysia, During the financial year, the Company met more than 160 the investorrelationsprogramme. in engaging our stakeholders through their participation in Executive and/orExecutive Directorsalsotakes anactiverole which includestheGroupManagingDirector/GroupChief conferences withthemedia.TheGroup’s topmanagement deal investmentroadshows,one-on-onemeetingsandpress briefing sessions andsitevisits as wellparticipation in non- major developments.Theformsofengagementsinclude to conveytheGroup’s strategies,performance, productsand analysts, fundmanagers,shareholders,financiersandmedia active investorrelationsprogramme, engageswithresearch Communications andInvestorRelations departments andits In thisrespect,theGroup, throughitsStrategic relating totheGroup. accountability inthedisclosureofpertinentinformation to ensuringthehigheststandardsoftransparencyand to potentialinvestorsandthepublic.Itisfullycommitted and clearcommunicationtoitsshareholdersaswell The Boardrecognisesandvaluestheimportanceofeffective Communications withShareholdersandInvestors Annual Report. The Annual Audited Financial Statements contained in this Responsibility Statement In Respect Of The Preparation Of preparing thefinancialstatementsissetoutinDirectors’ A statementbyDirectorsoftheirresponsibilitiesin financial reporting. financial reportingprocesses,accuracyandqualityofits assisted by the Audit Committee in overseeing the Group’s of theGroup’s financialpositionandprospects.TheBoardis steps toensureabalancedandunderstandableassessment results to shareholders, the Board has taken reasonable quarterly announcements ofunaudited consolidated financial In presentingtheannualauditedfinancialstatementsand Compliance withApplicableFinancialReporting Standards AND MEANINGFULRELATIONSHIP WITHSTAKEHOLDERS PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING Requirements). minimum noticeperiodof21days asprescribedintheListing 47 daysbeforethedateofAGM (whichisbeyond the circular to shareholders were sent to the shareholders The noticeoflastAGM togetherwithannualreport and strategy, performanceandmajordevelopments. the BoardandSeniorManagementonGroup’s business shareholders with an opportunity to seek clarification from dialogue andinteractionswithshareholdersasitprovides The Company’s generalmeetingistheprincipalforumfor Conduct ofGeneralMeetings 603-9222 1288,Email:[email protected]. dedicated investorrelationsteamatTel: 603-92218888,Fax: also forwardtheirqueriestotheCompanybycontactingits Shareholders, investorsandmembersofthepublicmay national newspaper. summary of interim results is also published in at least one via theCompany’s websiteatwww.mahsing.com.my. The website atwww.bursamalaysia.com andotherinformation are abletoaccesssuchannouncementsonBursaSecurities’ basis. Shareholders, investors and members of the public on theperformanceandprospectsofGrouparegular shareholders andthegeneralpublictoreceiveinformation and updatesonotherdevelopmentsareimportanttoenable The Boardbelievesthattimelyreleaseoffinancialinformation relevant transactionsundertaken bytheGroup. Report andotherannouncementstoBursa Securitieson interim andfullyearfinancialresultsannouncements,Annual Group includemakingtimelyandinformativedisclosuresin Other effective channels of communication employed by the Iskandar JohornamelyTheMeridin@Medini. Star Avenue MallinSungaiBuloh,aswelldevelopments Icon CityinPetaling Jaya,GardenResidence inCyberjaya, D’sara SentralinSungaiBuloh,Lakeville Residence in Kepong, Investors visited M Vertica in Cheras, M Centura in Sentul, projects foranalystsandfundmanagersduringtheyear. The Companyalsofacilitatednearly20visitstotheGroup’s analysts. quarterly analysts’ pack,briefings andregularmeetingswith updated viavariousplatformssuchasdisseminationof covered by15researchhouseswhereanalystsareactively 127 Our Corporate Governance Mah Sing Group Berhad OVERVIEW STATEMENT OVERVIEW CORPORATE GOVERNANCE CORPORATE The general meetings have been and will be conducted in and will be conducted meetings have been The general since 1995 location same the at city centre Lumpur Kuala by public transport. The venue is within where it is accessible station. (LRT) Transit the Light Rail walking distance from unable to attend may appoint their Shareholders who are to vote on their behalf at the general respective proxies and feedback their in write to them encourage We meetings. our office. inquiries anytime to can also access other stakeholders Shareholders and products and background, Group’s information on the website at through the Company’s financial performance www.mahsing.com.my. Focus Area and Future Priorities Key in of diversity importance the Board recognises The has escalated its deliberations and decision-making and a variety of skills, efforts to establish a diverse Board with The and gender. cultural background age, experience, a corporate culture Board remained committed to develop The in the Group. that embraces all aspects of diversity leadership of the stewardship of the Company under the made objectively existing Board ensures that decisions are taking into account diverse in the best interest of the Group, perspectives and insights. the Board has As part of the Board succession planning, Directors appointed 2 new Independent Non-Executive Encik and Norma Binti Yaakob Seri Siti Dato’ Sri Tan namely, 2018. The on 16 April to the Board Bin A Rahman Abd Malik A Annual Report. profile of each Director is set out in this for year 2018 will be to review and focus of the Board key of the consider the appointment of Independent Director(s) Company. Moving forward, the Company will continue working towards promoting greater standards of corporate governance. risk Committee oversees the Company’s the Audit Currently, The systems. control internal and framework management roles and responsibilities in risk management are set out in of Reference. Terms Committee’s the Audit and team Management Risk a has currently Company The will consider the necessity to consider a separate Risk Management Committee with dedicated functions on Risk Management in the future. After each general meeting, press conferences were After management personnel conducted and attended by key to provide the members of the media with opportunities to Disclosures made receive information relating to the Group. to shareholders, investors and media are handled within the prescribed disclosure requirements under the Listing Guide and guided by Corporate Disclosure Requirements issued by Bursa Securities. All resolutions at the last AGM were voted by way of poll at poll of way by voted were AGM last the at resolutions All which an independent scrutineer was appointed to validate the votes cast at the last AGM. All Board members (including all members of the Board All Board members (including all members Senior Management, Committees), Chief Financial Officer, advisers attended the external auditors and the Company’s to shareholders’ and provide meaningful response last AGM queries during the meeting. The shareholders present at the general meetings were The shareholders present at the general to participate in the given sufficient time and opportunity proposed the to regard with sessions answers and questions financial performance and operations resolutions, the Group’s in general and other concerns on the Group. The Board would present the macro outlook, financial The Board would present the macro strategies of the Group highlights, business overview and key are being or proposals for which the approval of shareholders The the last AGM. sought at each general meeting including shareholders to gain corporate presentations would enable financial performance insights on the business activities, enabling them to thereby, and strategic plans of the Group, the last AGM, At form an informed view on the Company. the Company’s the Company Secretary also presented Minority Shareholder responses to the issues raised by the Group. Watchdog The additional time given to shareholders allows them to given to shareholders allows them to The additional time and participate to attend arrangements necessary the make or proxies representatives, corporate through or person in to shareholders the enables it importantly, More attorneys. in an informed decision make and consider the resolutions rights at the general meeting. their voting exercising The notice, with explanatory notes regarding the effect of of effect the regarding notes explanatory with notice, The in respect of special businesses, the resolution proposed report and circular to shareholders were together with annual website. Company’s made available on the 128 Annual Report 2017 Our Corporate Governance assets oftheGroupandCompanytopreventdetectfraud andotherirregularities. The Directors are also responsible for taking such steps to preserve the interest of the stakeholders and to safeguard the of theGroup. have been maintained by the Group in a manner that enables them to sufficiently explain the transactions and financial position to providethemwithreasonablegroundsbelievethattheGroup’s accountingrecords,aswellotherrelevant In undertakingtheresponsibilityplaceduponthembylaw, theDirectorshaverelieduponGroup’s systemofinternalcontrol accounting recordstobeauditedconvenientlyandproperly. them tosufficientlyexplainthetransactionsandfinancialpositionofGroupCompanyaswellenable such The Directors are responsible for ensuring the Company keeps such accounting and other records in a manner that enables • • • The Directorshavetaken thefollowingmeasuresinpreparingfinancialstatements: the GroupandofCompanyasat31December2017. accounting and otherrecords of theGroupand Company soastoprovideatrueandfairviewofthefinancialposition The Directorsareresponsibleforensuringthatthefinancialstatementspreparedwithreasonableaccuracyfrom shareholders oftheCompanyatAnnualGeneralMeeting. in MalaysiaandtheMainMarket ListingRequirements ofBursaMalaysiaSecuritiesBerhad,andtolaythesebeforethe Reporting Standards issuedbytheInternationalAccountingStandards Board,therequirementsofCompaniesAct2016 with MalaysianFinancialReporting Standards issuedbytheMalaysianAccountingStandards Board,InternationalFinancial The BoardisresponsibleforensuringthefinancialstatementsofGroupandCompanyaredrawnupinaccordance STATEMENTS OF THEANNUAL AUDITED FINANCIAL IN RESPECTOFTHEPREPARATION DIRECTORS’ RESPONSIBILITYSTATEMENT prepared thefinancialstatementsonaon-goingconcernbasis. made prudentandreasonablejudgementsestimates; consistently adoptedtheappropriateandrelevantaccountingpolicies; 129 Our Corporate Governance Mah Sing Group Berhad 5 45 RM’000 The Company 54 570 RM’000 The Group Audit fees Audit Type of fees Type Non-audit fees During the financial year ended 31 December 2017, the amount of audit and non-audit fees paid/payable by the Group and the fees paid/payable by the Group and the the amount of audit and non-audit year ended 31 December 2017, During the financial and its subsidiaries are as follows: Company auditors for services rendered to the Company to the external COMPLIANCE INFORMATION COMPLIANCE FEES PAID/PAYABLE AND NON-AUDIT AUDIT ADDITIONAL There were no proceeds raised from corporate proposals during the financial year. There were no proceeds raised from corporate proposals during the UTILISATION OF PROCEEDS RAISED FROM CORPORATE PROPOSALS OF PROCEEDS RAISED FROM CORPORATE UTILISATION The aggregate value of transactions conducted pursuant to the Shareholders’ Mandate during the financial year ended 31 pursuant to the Shareholders’ The aggregate value of transactions conducted of the financial statements. December 2017 is disclosed in Note 48 At the Annual General Meeting of the Company held on 15 June 2017, the Company obtained shareholders’ mandate for shareholders’ the Company obtained of the Company held on 15 June 2017, the Annual General Meeting At which is Mandate”) party transactions of revenue or trading nature (“Shareholders’ the Group to enter into recurrent related Mandate shall expire at the conclusion of the forthcoming Annual The Shareholders’ necessary for its day-to-day operations. said Annual General Meeting. by the shareholders at the General Meeting and is subject to renewal Recurrent Related Party Transactions Party Related Recurrent There were no material contracts (not being contracts entered into in the ordinary course of business) entered into by the into in the ordinary course entered no material contracts (not being contracts There were interests which were still subsisting as at the end and major shareholders’ Directors’ Company and/or its subsidiaries involving the end of the previous financial year. were entered into since of the financial year under review or which Material Contracts Involving Directors’ and Major Shareholders’ Interests and Major Shareholders’ Material Contracts Involving Directors’ The provision of non-audit services by the external auditors to the Group is both cost effective and efficient due to their the external auditors to the Group is both cost effective and efficient due to The provision of non-audit services by It and objectivity. and did not compromise their independence of the Group, knowledge and understanding of the operations their knowledge of the Group means it is neither efficient nor cost policy to use the auditors in cases where is also the Group’s effective to employ another firm of accountants. 130 Annual Report 2017 Our Corporate Governance Group. Group. risk managementframeworkandinternalcontrolsystemsofthe adequately andeffectively, inallmaterialaspects,basedonthe framework andinternalcontrolsystemsareoperating for thefinancialmanagementthatGroup’s riskmanagement Financial OfficerandExecutive Directorsprimarilyresponsible Group ManagingDirector/ChiefExecutive, GroupChief The Boardhasreceivedreasonableassurancefromthe operations. business (“MAPs”) inordertopromoteabalanceofriskandreturndaily monitoring oftheimplementationManagementActionPlans the Group’s risk profiles, the related business processes and the The management isexpectedto ensure the continual reviewof processes aregenerallyinplaceandadequateforitspurpose. state thatthesystemsofinternalcontrol and riskmanagement framework and internal control systems, we are pleased to Based on the following descriptions ofthe risk management absolute assuranceagainstmaterialmisstatementorloss. objectives and therefore can provide only reasonable and not rather than eliminate the risk of failure to achieve business It shouldbenotedthatsuchsystemsaredesignedtomanage by ongoingriskmanagementprocess. internal controlsystemsthroughregularreviews,accompanied Board ensurestheadequacy, effectivenessandintegrityofthe safeguard shareholders’ investmentandtheGroup’s assets.The systems ofinternalcontrolandriskmanagementinorderto The BoardaffirmsitsoverallresponsibilityfortheGroup’s THE BOARD’S RESPONSIBILITY Governance (“MCCG”)2017. for DirectorsofListedIssuersandPractice9.1 forPrincipleBoftheMalaysianCodeonCorporate Malaysia SecuritiesBerhad,theStatement onRiskManagementandInternalControl:Guidelines is madeinaccordancewithParagraph 15.26(b)oftheMainMarket ListingRequirements ofBursa risk managementframeworkanditsstateofinternalcontrolisoutlinedasfollows.TheStatement The Board’s Statement onRiskManagementandInternalControl(“Statement”) featuringtheGroup’s sound riskmanagementframeworkandsystemsofinternalcontrolthroughoutitsgroupcompanies. The BoardofDirectors(“”)MahSingGroupBerhadiscommittedtonurtureandmaintaina AND INTERNALCONTROL STATEMENT ONRISKMANAGEMENT • • • • • The key aspectsoftheERMFramework(Figure1)are:- achievement oftheGroup’s businessobjectives. monitoring andmanagingthesignificantrisksaffecting Framework for the on-going process of identifying, evaluating, The Board confirms that the Group hasin place an ERM ENTERPRISE RISKMANAGEMENT (“ERM”) processes areeffective; the meansforassuringAudit Committeethat theERM supporting detailsfortheERM AssessmentReport andas Residual Risk ProfilesandRiskRegisters, servingasthe the MAPstobeimplementedaresummarizedinKey reviews togetherwiththecontrolsformanagingthemand The key risksidentifiedduringtheERMassessment overall riskratingandprofilearedetermined; processes areidentifiedbaseduponriskevaluationwhere Key riskmanagementstrategiesorMAPstokey business previously establishedriskmatrixtable; division’s levelofrisktolerancedefinedearlierandthe magnitude of their impacts are determined based on Likelihood ofoccurrencethoseriskfactorsand services, suppliersandhumancapital; operational controls, financial,customers,products& of environmental,regulatory&legal,governance major riskareasofconcern,ifanyfromtheperspectives The ERMassessmentreviewsarecarriedouttoaddress identify, assessandmanage therisksfacedbyGroup. ERM assessmentreviewsareperformedannuallyto monitoring andmanagementoftherisksGroup; are charged with the responsibilities of continuous staff fromtheCorporate, PropertyandPlastics Divisions The RiskManagement Teams comprisingmanagement 131 Our Corporate Governance Mah Sing Group Berhad ERM PROCESSES AND INTERNAL CONTROL CONTROL AND INTERNAL Determine overall risk rating & profile Determine risk & impact likelihood Risk Evaluation • Risk Assessment • Group Internal Audit STATEMENT ON RISK MANAGEMENT ON RISK STATEMENT DIVISION Audit Committee Audit Board of Directors ERM STRUCTURE Identify risk areas of concern Decision on control procedures/MAPs Risk Management Teams Risk Identification • Risk Treatment • Corporate – Property – Plastics Define division’s level of Define division’s risk tolerance & establish risk matrix table On-going monitoring of risk/control and MAPs implementation status Risk Defined • Risk Review • ERM compliance reviews are carried out on a continuous basis to ensure the controls/ key risk management strategies risk management key ensure the controls/ basis to carried out on a continuous reviews are ERM compliance including the Documented ERM Compliance Review All are recorded in the functioning effectively. for managing risks are of MAPs; implementation status from Group ERM Compliance Review and Documented receiving the ERM Assessment Report Committee upon The Audit of internal control before onward systems the Group’s and monitor the effectiveness of shall review Internal Auditors of any salient Committee would inform the Directors, the Audit for endorsement. The Chairman of submission to the Board and notice or direction; and which require the Board’s Committee Audit matters noted by the risks, are used as that are identified to address key the internal control procedures Framework, i.e. The results of the ERM internal audit plans. risk-based one of the basis to develop ERM Framework • • • 132 Annual Report 2017 Our Corporate Governance • • • • • • • • • The key elementsoftheGroup’s internalcontrolsystemsare:- INTERNAL CONTROL AND INTERNALCONTROL STATEMENT ONRISKMANAGEMENT The Group’s PropertyDivisionhasbeenaccordedISO performance evaluations; emphasized through continuous training andregular The professionalism and competencyof staff are being the Group’s riskcontrolprocesses; and relevant staff in assessing the adequacy and integrity of An on-goingtrainingandeducationalprogramforDirectors management andcorporateissues; the Group’s financial performance, businessdevelopments, meets onaregularbasiswithalldivisionalheadstoreview basis. TheGroupManagingDirector/ChiefExecutive necessary andreportedtoseniormanagementonaregular management andactionistaken, where performance. Key variancesarefollowedupbythe variances againstbudgetandplanareinplacetomonitor Effective reportingsystemswhichhighlightsignificant annual basis; business unitstopreparebudgetandplanonan Detailed budgetingprocessisestablishedrequiringall centralised attheheadoffice; treasury, secretarial,corporate andlegalmattersare resources, finance, tax,managementinformationsystem, Key functionssuchasbusinessdevelopment, human Group InternalAudit totheAudit Committee; such policiesandproceduresarereportedthereonby operational deficiencies.Instancesofnon-compliancewith and inplacetoreflectchangingrisksorresolve Standard operating policies and procedures are updated auditable trailofaccountability; has beenestablishedwhichprovidesadocumentedand delegation ofauthority. Aprocessofhierarchicalreporting Operational structurewithdefinedlinesofresponsibilityand Handbook whichdefinestheconductofworkrequired; are communicatedtoemployeesthroughEmployee Group Vision,Mission, Corporate Culture, Code of Conduct • • • Control hadbeenreviewedbytheExternalAuditors. The yearlyStatement ofRiskManagementandInternal review andapprovalbytheAudit Committee. basis, GroupInternalAudit submitsreportsandplansfor effective toaddresstherisksidentified.Onaquarterly assurance thatthesystemsofinternalcontrolare controls to provide the Audit Committee with sufficient Group InternalAudit independentlyreviewstheinternal and strengthen andimprovedeliveryprocessesquality; System (“CONQUAS”) standardswereadoptedtofurther (“QLASSIC”) andConstructionQualityAssessment as theQualityAssessmentSystem inConstruction Where relevant,externalcertification/standardssuch conform totherequirementsofISO9001:2008; in theyear2000andthereafter has beenupgradedto Division receivedtheaccreditationforISO9001:2000 the relevantcertificationbodies.TheGroup’s Plastics Quality Assurance Department as well as by auditors of audits areconductedinternallybyISOfunctionofthe of therequirementscertification,scheduled improving thestrengthofitsinternalcontrols.Aspart demonstrating theGroup’s questinconsistently 9001:2015 Quality Management System accreditation, 133 Our Corporate Governance Mah Sing Group Berhad TERMS OF REFERENCE TERMS OF REFERENCE MEETINGS AND MINUTES fiduciary its discharge effectively to Board the assisting In timely & corporate governance, responsibilities for and development of sound accurate financial reporting meetings which shall Committee internal controls, Audit by attended be will year a times 4 than less not held be from management representatives Director, an Executive external The team and the Group Internal Auditors. Audit all at participate to invited also are auditors Committee meetings. engage on Committee would The Chairman of the Audit such as the a continuous basis with senior management the and Executive Group Chief Managing Director/ Group informed of matters Directors in order to be kept Executive of other Directors and Attendance affecting the Group. meeting Committee employees at any particular Audit Committee. will be at the invitation of the Audit the majority of A quorum shall consist of 2 members and Directors. the members present must be Independent of the secretary The Company Secretary shall be the in conjunction Committee and shall be responsible, Audit agenda and with the Chairman, for drawing up the documentation circulating it, supported by explanatory meeting. Committee members prior to each to the Audit for keeping The secretary shall also be responsible and Committee the minutes of meetings of the Audit Committee members and circulating them to the Audit The Chairman of the members of the Board. to the other at issues discussed key report shall Committee Audit each meeting to the Board. Committee is authorised by the Board to The Audit investigate any activity within its terms of reference and shall have unrestricted access to both internal and external auditors and to all employees of the Group. Committee is also authorised by the Board to The Audit professional independent other or legal external obtain advice as necessary. Committee is also authorised to convene The Audit meetings with external auditors and internal auditors at least 2 times a year without the presence of separately, employees other and Board the of members Executive the in order to have unfettered access to information that it may require. 2. AUTHORITY * * 4/4 4/4 4/4 Attendance Attendance at Meetings (Independent Non-Executive Director) (Independent Non-Executive at least once every 3 years to determine (“Board”) at least once every 3 years to determine (Independent Non-Executive Director) (Independent Non-Executive ENCIK ABD MALIK BIN A RAHMAN Director) (Independent Non-Executive (Appointed on 16 April 2018) JEN. TAN SRI YAACOB BIN MAT ZAIN (R) BIN MAT SRI YAACOB JEN. TAN Chairman SERI SITI NORMA BINTI YAAKOB SRI DATO’ TAN Director) (Independent Non-Executive (Appointed on 16 April 2018) Director) (Independent Non-Executive Name of Members LOH KOK LEONG KOK LOH CAPTAIN IZAHAM BIN ABD. RANI (R) IZAHAM BIN ABD. CAPTAIN The Audit Committee comprises 3 members, all of whom are Committee comprises The Audit Committee Directors. 1 of the Audit Independent Non-Executive partner of was previously a Leong Kok members, Mr Loh period and had served a cooling-off Tohmatsu Deloitte Touche onboard to the appointed being before years 2 than more He is also a member of the Malaysian23 September 2002. of and the Malaysian Institute (“MIA”) Institute of Accountants . (“MICPA”) Certificate Public Accountants Committee Audit The term of office and performance of the by the Board of and each of its members shall be reviewed Directors whether the Audit Committee and its members have carried Committee and its members whether the Audit terms of reference. out their duties in accordance with their professional Committee members had attended All Audit briefings and/or training programs, workshops, seminars, year during financial subject matters of various conferences duties their out carry to order 2017 in December 31 ended Further knowledge. with a wide range of necessary skill and and Development of Directors” details in the “Training Statement. section of the Corporate Governance Overview Committee convened the Audit financial year, During the the members as 4 meetings which were attended by tabulated below: The Group internal auditors and external auditors attended all the meetings. Committee held 2 informal discussion the Audit In 2017, sessions with both internal and external auditors without and the Board members of Executive of the presence the other employees. REPORT 1. COMPOSITION AUDIT COMMITTEE COMMITTEE AUDIT 134 Annual Report 2017 Our Corporate Governance DUTIES REPORT AUDIT COMMITTEE • • • Oversee allmattersrelatingtointernalaudit internal controlsystemsinmitigatingsignificantrisks. in relation to the adequacy and integrity of the Group’s To review the reports of respective Risk Management Teams Review ofsystemsinternalcontrolandrisk management • • • • • • • Oversee allmattersrelatingtoexternalaudit The dutiesoftheAudit Committee shallbe:- audit; to ensureco-ordinationofexternal audit withinternal to reviewandapprovetheinternalauditplan; work; and thatithasthenecessaryauthoritytocarryoutits competency andresourcesoftheinternalauditfunction to review the adequacy of thescope, functions, the Grouptoexternalauditors. review thelevelofassistancegivenbyemployees and anyquestionsofresignationdismissal; consider anyletterofresignationexternalauditors external auditors; annual basisasperourpoliciesandproceduresonthe and reviewtheperformanceofexternalauditorsin of allrelevantprofessionalandregulatoryrequirements Group and the Company in accordance with the terms in respect of theprovision of non-audit services to the assess thesuitability, independence ofexternalauditors assigned, size&complexityofcompanybeingaudited; number & experience of supervisory & professional staff firm andpersonassigned),firm’s auditengagements, commensurate withtheirexperience&resources(both audit fees as recommended by the management; to auditors aswelltheappropriatenessoftheir consider the nomination & appointment of external management’s response; systems ofinternalcontrol,theirmanagementletterand review withexternalauditors,theirevaluationofthe wish todiscuss; interim and final audits andany matter the auditors may discuss problemsandreservationsarisingfromthe involved; ordination ofauditswheremorethanoneauditfirmis nature andscopeoftheaudit,auditplanensureco- discuss withexternalauditorswherenecessary, the • • • Additional dutiesandresponsibilities • • • • • particularly on: of theGroupbeforesubmissiontoBoard,focusing To reviewthequarterlyandyear-endfinancialstatements Review offinancialstatements • • • • Committee andtheBoardfromtimetotime. assignments asmaybedefinedjointlybytheAudit to carryoutsuchotherresponsibilities,functionsor promptly reportsuchmattertoBursaSecurities;and LR ofBursaSecurities,theAudit Committeemust resolved resultinginabreachoftheMainMarket reported byittotheBoardhasnotbeensatisfactorily where theAudit Committeeisoftheviewthatamatter Report; transactions annuallytoshareholdersviatheAnnual ensure thattheDirectorstoreportrelatedparty of managementintegrity. They arealsorequiredto procedure orcourseofconductthatraisesquestions Group ortheCompanyincludinganytransaction, conflict ofinterestsituationthatmayarisewithinthe to consideranyrelatedpartytransactionsand legal requirements. Securities Berhad(“BursaSecurities”) andother Requirements compliance withtheMainMarket Listing standards andregulatoryrequirements; compliance withtheapplicableapprovedaccounting going concernassumption; audit; significant auditissuesandadjustmentsarisingfrom any changesinaccountingpoliciesandpractices; for resigning. member anopportunitytosubmithis/herreasons audit staffmembersandprovideresigning to keep itselfinformed of resignationsinternal staff membersoftheinternalauditfunction;and to approveanyappointmentorterminationofsenior staff oftheinternalauditfunction; to reviewanyassessmentoftheperformance internal auditfunction; actions aretaken ontherecommendationsof management’s responseandensurethatappropriate to considermajorfindingsofinternalauditreviews, (“Main Market LR”) ofBursaMalaysia 135 Our Corporate Governance Mah Sing Group Berhad REPORT AUDIT COMMITTEE AUDIT which reports directly to the Audit which reports directly to the Audit (“IAD”) (“IIAM”), Certified Practising Accountant , Malaysian Institute of Accountants (“CPA”) STATEMENT ON INTERNAL AUDIT FUNCTION INTERNAL AUDIT ON STATEMENT FUNCTION INTERNAL AUDIT an integral function is considered (“IA”) The Internal Audit IA Group. the within framework assurance the of part role in that it assists in the function plays an intermediary which is delegated by function discharge of the oversight of means a as serves It Committee. Audit the to Board the of regular reviews and/ or obtaining sufficient assurance and effectiveness of the risk, appraisals of the adequacy framework of the Group. control and governance Audit Internal by its guided is IA function Group’s The by the Group Internal Audit Charter and is undertaken Department Committee. Adrian, who is a IAD is headed by Mr Ng Hong Wai, Internal Audit of the Institute of member professional Malaysia Australia Accountancy. of Bachelor with graduated and (“MIA”) team of qualified IAD is currently made up of 7 in-house professional. relationship and IA personnel do not have any business or had previously not related to people across the Group, Group before. served as management role capacity to the by prepared are and approach objective IA’s The International adopting the Institute of Internal Auditors’ (”IPPF”) and the Framework Practices Professional Committee of Sponsoring Organisations of the Treadway ) Internal Control – Integrated Commission (“COSO” Framework. regular and independent, The Group IAD undertakes systematic reviews of the systems of internal control so as to provide reasonable assurance that such systems The continue to operate satisfactorily and effectively. annual internal audit plans which are designed to cover development projects and entities across all levels of operations within the Group are approved by the The Group IAD adopts a risk-based Committee. Audit approach in planning the audit assignments taking into consideration of industry specific requirements. 4. reviewed the extent of the Group’s compliance with of the Group’s reviewed the extent out under the Malaysian Code on the provisions set for the purpose of preparing the Corporate Governance the and Overview Statement Corporate Governance Control on Risk Management and Internal Statement LR of Bursa Securities; pursuant to the Main Market reports on the reviewed the Risk Management Teams’ and integrity risk profile of the Group and the adequacy risks; of internal control systems to manage these plan and to reviewed with external auditors the audit companies various the of audits of co-ordination ensure auditors; within the Group with different external findings reviewed with external auditors any significant in relation to audits; for approval considered and recommended to the Board of the audit fees payable to external auditors; internal audit reviewed the internal audit plan and internal of findings major the considered and reports response; audit reviews and management’s function, Audit reviewed and discussed with the Internal resources and scope of work; its authority, the by into entered transactions party related reviewed shareholders’ Group and the draft proposal to seek of the Main 10.09 mandate pursuant to Paragraph to authorise the Group LR of Bursa Securities Market a of transactions party related into recurrent enter to revenue or trading nature; reviewed quarterly financial results and year end financial statements of the Group before recommending them to the Board for their approval for announcement to Bursa Securities; and had 2 discussion sessions with the Group Internal together with external auditors without the Auditors of the Board and members presence of the Executive other employees. SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE COMMITTEE AUDIT OF THE OF ACTIVITIES SUMMARY YEAR FOR THE FINANCIAL carried out Committee the Audit year, During the financial in the terms of reference and discussed its duties as set out the following issues:- • • • • • • • • • • 3. 136 Annual Report 2017 Our Corporate Governance • 2 • • • • REPORT AUDIT COMMITTEE • conducted theauditswhichcoveredfollowings: During thefinancialyear, GroupIADhadreviewedand • • • • Group’s operationsandinformationsystemsasfollows:- of principalriskexposureswereconductedinrelationtothe the institutedcontrolsandevaluationofacceptablelevels Various independentauditreviewsontheappropriatenessof FINANCIAL YEAR SUMMARY OF INTERNAL AUDIT ACTIVITIES FOR THE • • • • Bhd Project review of DSara Sentral under Dsara Sentral Sdn Process Audit onVariation Order(VO) Bhd Development Sdn Bhd and MajorLand Development Sdn Projects reviewofMResidence 2underElitePark Meridin BayvueinJohor Projects reviewofTheMeridin@Medini,MeridinEast, (1 Projects reviewofSouthvilleunderCitySdnBhd and contracts. compliance withpolicies,procedures,laws®ulations safeguarding ofassets;and effectiveness andefficiencyofoperations; reliability offinancialandoperationalinformation; Guidelines forDirectorsofListedIssuers. the Statement onRiskManagementandInternalControl: pursuant totheMainMarket LRofBursaSecuritiesand the Statement onRiskManagementandInternalControl Overview Statement, the Audit Committee Report and for thepurposeofpreparingCorporateGovernance out undertheMalaysianCodeonCorporateGovernance the extentofGroup’s compliancewiththeprovisionsset The GroupIADalsoassiststheAudit Committeeinreviewing said framework. focusing primarilyontheadequacyandeffectivenessof operation oftheEnterpriseRiskManagementFramework The GroupIADperformsindependentevaluationofthe Leasing Department–Star Avenue LifestyleMall Property ManagementDepartment Development SdnBhd Project review of Sutera Avenue under Capitol Avenue Development Vienna ViewDevelopmentSdnBhdandUptrendHousing Projects reviewofFerringhiResidence 2andTheLoft under st nd inFebruary2017and2 FollowUpauditreviewofDSaraSentral nd inNovember2017) pages 130to132ofthisAnnualReport. the Statement onRiskManagementandInternalControl Further details of theactivitiesGroupIADaresetoutin was RM575,000 (2016:RM545,000). the totalcostsincurredinmanagingGroupIADfor2017 All theinternalauditactivitieswereperformedin-houseand duly acteduponbymanagement. reports toensurerecommendationsfromtheare The Audit Committee then deliberates on the internal audit actions arebeingimplementedaccordingly. up auditreviewswereconductedtoensurethatcorrective in strengtheningtheinternalcontrolenvironment.Follow- in theinternalcontrolsystemsandmanagementisproactive during thecurrentfinancialyearasaresultofweaknesses to themanagement.Therewerenomateriallossesincurred with therecommendedcorrectiveactionswerehighlighted At theconclusionofvariousaudits,weaknessestogether • • Committee and/ormanagement. Other adhocreviewsupontherequestsbyAudit Party Transactions Revenue or trading nature relatingto Recurrent Related FINANCIAL STATEMENTS 138 Directors’ Report 145 Independent Auditors’ Report 149 Statements of Profit or Loss 150 Statements of Profit or Loss and Other Comprehensive Income 151 Statements of Financial Position 153 Consolidated Statement of Changes in Equity 155 Company Statement of Changes in Equity 157 Statements of Cash Flows 161 Notes to the Financial Statements 266 Statement by Directors 267 Declaration by the Officer Primarily Responsible for the Financial Management of the Company 138 Annual Report 2017 Financial Statements The resultsoftheGroupandCompanyforfinancialyear areasfollows: RESULTS by theholdingcompanyineachsubsidiariesisasdisclosedNote 18tothefinancialstatements. the Group. Theinformationonthename, placeofincorporation,principalactivitiesandpercentageissuedsharecapitalheld The principalactivities of theCompany are investment holding and provision of managementservices to subsidiarycompanies in PRINCIPAL ACTIVITIES financial yearended31December2017. The DirectorsarepleasedtosubmittheirreportandtheauditedfinancialstatementsofGroupCompanyfor DIRECTORS’ REPORT REPORT DIRECTORS’ financial statements. There werenomaterialtransfers toorfromreservesprovisionsduringthefinancial year otherthanthosedisclosedinthe RESERVES ANDPROVISIONS financial yearending31December2018. dividend, when approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings during the Meeting of theCompanyandhas not beenincludedasaliability in thefinancialstatementsfor thecurrentfinancialyear. Such year. TheproposedfirstandfinaldividendissubjecttotheapprovalofshareholdersatforthcomingAnnual General The Directorshaveproposedafirstandfinalsingle-tierdividend of6.5senperordinaryshareinrespectthecurrentfinancial General Meeting. RM157,152,420 inrespectofthefinancialyearended31 December 2016asapprovedbytheshareholdersatlastAnnual On 14September2017,theCompanypaidafirstandfinalsingle-tierdividendof6.5senperordinaryshareamounted to DIVIDENDS affected byanyitem,transactionoreventofamaterialandunusual nature. In theopinionofDirectors,resultsGroupandCompanyduringfinancialyearhavenotbeensubstantial ly Profit fortheyearattributableto: Non-controlling interests Equity holdersoftheCompany The Group 361,895 359,161 RM’000 (2,734) The Company 260,818 260,818 RM’000 - Financial Statements DIRECTORS’ REPORT (CONTINUED) ISSUE OF SHARES AND DEBENTURES During the financial year, the Company issued 16,611,346 new ordinary shares at an exercise price of RM1.44 per ordinary share pursuant to the exercise of Warrant B 2013/2018. The new ordinary shares issued rank pari passu with the then existing ordinary shares of the Company. The Company did not issue any debentures during the financial year. WARRANT B 2013/2018 Warrant B 2013/2018 is constituted by a Deed Poll dated 18 February 2013 (“Deed Poll”). The salient features of Warrant B 2013/2018 are as follows: (a) The issue date of Warrant B 2013/2018 is 19 March 2013 and the expiry date is 16 March 2018. Any Warrant B 2013/2018 not exercised at the expiry date will lapse and cease to be valid for any purpose; (b) Each Warrant B 2013/2018 entitles the registered holder to subscribe for one (1) new ordinary share in the Company at an exercise price of RM1.98 (adjusted to RM1.44) per ordinary share; 139 (c) The exercise price and the number of Warrant B 2013/2018 are subject to adjustments in the event of alteration to the share capital of the Company in accordance with the provisions of the Deed Poll; (d) The holders of Warrant B 2013/2018 are not entitled to participate in any distribution and/or offer of further securities in the Company (except for the issue of new Warrant B 2013/2018 pursuant to adjustment as mentioned in item (c) above), until and unless such holders exercise the rights under the Warrant B 2013/2018 to subscribe for new ordinary shares; and (e) The new ordinary shares allotted as a result of the exercise of the Warrant B 2013/2018 shall upon issuance and allotment, rank pari passu in all respects with the then existing ordinary shares of the Company, save and except that such new ordinary shares shall not be entitled to any dividends, rights, allotments and/or other distributions for which the entitlement date is prior to the date of allotment of the new ordinary shares. During the financial year ended 31 December 2015, the exercise price and the number of Warrant B 2013/2018 were adjusted in accordance with the provisions of the Deed Poll (as mentioned in item (c) above) as a result of the Rights and Bonus Issues. The exercise price was adjusted from RM1.98 to RM1.44. The movements in the Company’s Warrant B 2013/2018 are as follows: Number of Warrant B 2013/2018 At 1.1.2017 186,190,166 Mah Sing Group Berhad Exercised (16,611,346) At 31.12.2017 169,578,820 140 Annual Report 2017 Financial Statements (b) (a) Before thefinancialstatementsofGroupandCompany weremadeout,theDirectors tookreasonablesteps: OTHER STATUTORY INFORMATION at theendoffinancialyearwas166,134,389. There werenoWarrant C2015/2020exercised during thecurrentfinancialyear. Thetotalnumberof Warrant C2015/2020as price wasadjustedfromRM2.63toRM2.10. in accordancewiththeprovisionsofDeedPoll (asmentionedinitem(c)above)asaresultoftheBonusIssue. Theexercise During thefinancialyearended31December 2015,theexercise priceandthenumberof Warrant C2015/2020 wereadjusted (e) (d) (c) (b) (a) The salientfeaturesoftheWarrant C2015/2020areasfollows: Warrant C2015/2020isconstitutedbyaDeedPoll dated15January2015(“DeedPoll”). WARRANT C2015/2020 (CONTINUED) DIRECTORS’ REPORT had beenmadefordoubtfuldebts;and doubtful debtsandhadsatisfiedthemselvesthatallknown baddebtshadbeenwrittenoffandthatadequateallowance to ascertainthatproperactionhadbeentaken inrelationtothewritingoffofbaddebtsandmakingallowancefor date ispriortotheofallotmentnewordinaryshares. ordinary sharesshallnotbeentitledtoanydividends,rights,allotmentsand/orotherdistributionsforwhichtheentitlement rank paripassuinallrespectswiththethenexistingordinarysharesofCompany, saveandexcept thatsuchnew The newordinarysharesallottedasaresultoftheexercise oftheWarrant C2015/2020shalluponissuanceandallotment, until andunlesssuchholdersexercise therightsunderWarrant C2015/2020tosubscribefornewordinaryshares;and the Company(except fortheissueofnewWarrant C2015/2020 pursuanttoadjustmentasmentionedinitem(c)above), The holdersofWarrant C2015/2020arenotentitledtoparticipateinanydistributionand/orofferoffurthersecurities share capitaloftheCompanyinaccordancewithprovisions theDeedPoll; The exercise priceandthenumberofWarrant C 2015/2020 aresubjecttoadjustmentsintheeventofalteration an exercise priceofRM2.63(adjustedtoRM2.10)perordinaryshare; Each Warrant C2015/2020entitlestheregisteredholdertosubscribeforone(1)newordinaryshareinCompanyat 2015/2020 notexercised attheexpirydatewilllapseandceasetobevalidforanypurpose; The issuedateofWarrant C2015/2020is23February2015andtheexpirydate212020.AnyWarrant C been writtendowntotheirestimatedrealisablevalues. to ensurethatanycurrentassetswhichwereunlikely torealisetheirbookvaluesintheordinarycourseofbusinesshad Financial Statements DIRECTORS’ REPORT (CONTINUED) OTHER STATUTORY INFORMATION (continued) At the date of this report, the Directors are not aware of any circumstances: (a) which would render the amount written off as bad debts or the amount of allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or (b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or (c) which have arisen and render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; or (d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading. At the date of this report, there does not exist: (a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year and secures the liability of any other person; or 141 (b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year. No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due. In the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of operations of the Group and of the Company for the financial year in which this report is made. DIRECTORS The Directors of the Company in office during the financial year and during the period from the end of the financial year to the date of this report are: Jen. Tan Sri Yaacob Bin Mat Zain (R) Tan Sri Dato’ Sri Leong Hoy Kum Datuk Ho Hon Sang Dato’ Ng Poh Seng Datuk Leong Yuet Mei Captain Izaham Bin Abd. Rani (R) Loh Kok Leong Jane Leong Jheng-Yi (Alternate Director to Tan Sri Dato’ Sri Leong Hoy Kum) Mah Sing Group Berhad The name of directors of subsidiaries are set out in the respective subsidiary’s statutory accounts and the said information is deemed incorporated herein by such reference and made a part hereof. 142 Annual Report 2017 Financial Statements (a) as follows: interests oftheDirectorswhoheldofficeatendfinancialyearinordinarysharesandwarrantsCompanyare According totheRegister ofDirectors’ Shareholdingskept bytheCompanyunderSection59ofCompaniesAct,2016 DIRECTORS’ INTERESTS (CONTINUED) DIRECTORS’ REPORT (b) Tan SriDato’ SriLeong HoyKum**** Jen. Tan SriYaacob BinMatZain(R)** Indirect interest Jane Leong Jheng-Yi* Direct interest Tan SriDato’ SriLeong HoyKum*** Jen. Tan SriYaacob BinMatZain(R)** Indirect interest Jane Leong Jheng-Yi* Dato’ NgPoh Seng Tan SriDato’ SriLeong HoyKum Direct interest Datuk Leong Yuet Mei** Datuk Leong Yuet Mei** Shares intheCompany Warrants intheCompany 841,858,085 51,193,304 10,319,007 2,129,873 1.1.2017 1.1.2017 708,900 265,250 41,058 65,902 51,564 8,323 As at As at Number ofWarrant B2013/2018 Number ofordinaryshares Acquired Acquired 284,055 41,058 51,564 ------ (325,113) (41,058) Exercised Disposed/ (51,564) (2,129,873) Disposed ------¹# ²# 840,012,267 31.12.2017 10,319,007 31.12.2017 50,868,191 2,170,931 708,900 316,814 65,902 8,323 As at As at - - Financial Statements DIRECTORS’ REPORT (CONTINUED) DIRECTORS’ INTERESTS (continued) (b) Warrants in the Company (continued) As at Disposed/ As at 1.1.2017 Acquired Exercised 31.12.2017 Direct interest Tan Sri Dato’ Sri Leong Hoy Kum 714,392 - - 714,392 Dato’ Ng Poh Seng 166,997 - - 166,997 Jane Leong Jheng-Yi* 147,452 - - 147,452 Indirect interest Jen. Tan Sri Yaacob Bin Mat Zain (R)** 4,561 - - 4,561 Tan Sri Dato’ Sri Leong Hoy Kum**** 59,292,074 - (147,452) ³# 59,144,622 Datuk Leong Yuet Mei** 128,414 - - 128,414 * Alternate Director to Tan Sri Dato’ Sri Leong Hoy Kum and also the daughter of Tan Sri Dato’ Sri Leong Hoy Kum. ** Deemed interest by virtue of the shareholdings or warrant holdings of family member(s). 143 *** Deemed interest by virtue of shareholdings of Mayang Teratai Sdn Bhd, Mayang Teratai Limited and his family members. **** Deemed interest by virtue of warrant holdings of Mayang Teratai Sdn Bhd and his family members. ¹# The 2,129,873 ordinary shares which are held by his daughter, Jane Leong Jheng-Yi (“Jane Leong”) is excluded from the disclosure by Tan Sri Dato’ Sri Leong Hoy Kum pursuant to Section 59(11)(c) of the Companies Act 2016 as Jane Leong is an alternate director to Tan Sri Dato’ Sri Leong Hoy Kum. ²# The 325,113 Warrant B comprises exercise of 284,055 Warrant B and 41,058 Warrant B into ordinary shares by his spouse and his daughter, Jane Leong, respectively. The 41,058 Warrant B which are held by his daughter is excluded from the disclosure by Tan Sri Dato’ Sri Leong Hoy Kum pursuant to Section 59(11)(c) of the Companies Act 2016 as Jane Leong is an alternate director to Tan Sri Dato’ Sri Leong Hoy Kum. ³# The 147,452 Warrant C which are held by his daughter, Jane Leong is excluded from the disclosure by Tan Sri Dato’ Sri Leong Hoy Kum pursuant to Section 59(11)(c) of the Companies Act 2016 as Jane Leong is an alternate director to Tan Sri Dato’ Sri Leong Hoy Kum. By virtue of Tan Sri Dato’ Sri Leong Hoy Kum’s interest in the shares of the Company, he is deemed pursuant to Section 8(4) of the Companies Act 2016 to have interests in the shares of the subsidiaries of the Company to the extent the Company’s interest in the respective subsidiaries as disclosed in Note 18 to the financial statements. Other than as disclosed above, none of the other Directors in office as at the end of the financial year held any interest in the shares and warrants of the Company and its related corporations during the financial year. Mah Sing Group Berhad 144 Annual Report 2017 Financial Statements 28 February2018 Kuala Lumpur Managing Director TAN SRIDATO’ SRI LEONGHOY KUM Chairman JEN. TAN SRIYAACOB BINMAT ZAIN(R) Signed onbehalfoftheBoardinaccordancewitharesolution ofthe BoardofDirectors, Note 7tothefinancialstatements. The amount receivables as remuneration of the auditors for the financial year ended 31 December 2017 is as disclosed in AUDITORS’ REMUNERATION The auditors,DeloittePLT, haveindicatedtheirwillingnesstoacceptre-appointment. AUDITORS throughout theyear, whichprovidesappropriateinsurancecoverfortheDirectorsandOfficersofCompany. The Companymaintainsdirectors’ andofficers’ liabilityinsuranceforpurposesofSection289theCompaniesAct,2016, INDEMNITY ANDINSURANCEFORDIRECTORS ANDOFFICERS or anyotherbodycorporate. whose objectwastoenabletheDirectorsacquirebenefitsthroughacquisitionofsharesin,ordebenturesof, theCompany Neither duringnorattheendoffinancialyearwasCompanyoranyitsrelatedcorporationsapartytoarrangement disclosed inNote48(a)tothefinancialstatements. companies withtheDirectors or thecompaniesinwhichDirectorsaredeemedtohavesubstantialfinancialinterestsas have arisenbyvirtueofthosetransactionsenteredintointheordinarycoursebusinessCompanyanditssubsidiary or withacompanyinwhichtheDirectorhassubstantialfinancialinterestexcept forthosebenefitswhichmaybe deemed to of acontractmadebytheCompanyorrelatedcorporation with theDirectororafirmofwhichismember benefit (otherthanthefees,otheremolumentsandbenefits-in-kindasdisclosedinNote48tofinancialstatements)byreason Since theendofpreviousfinancialyear, noneoftheDirector oftheCompanyhasreceivedorbecomeentitledtoreceiveany DIRECTORS’ BENEFITS (CONTINUED) DIRECTORS’ REPORT Financial Statements INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF MAH SING GROUP BERHAD (INCORPORATED IN MALAYSIA) Report on the Audit of the Financial Statements Opinion We have audited the financial statements ofMAH SING GROUP BERHAD, which comprise the statements of financial position of the Group and of the Company as at 31 December 2017, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and notes to the financial statements, including a summary of significant accounting policies as set out on pages 149 to 265. In our opinion, the accompanying financial statements of the Group and of the Company give a true and fair view of the financial position of the Group and of the Company as at 31 December 2017, and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia. Basis for Opinion We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 145 Independence and Other Ethical Responsibilities We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the Group and of the Company for the current year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matter How the scope of our audit responded to the key audit matter Property development revenue is recognised over the period Our audit procedures included, among others: of the contract by reference to the progress towards complete satisfaction of the performance obligation. • Reviewed the terms and conditions of the major sales transactions to determine that revenue recognised conforms The progress towards complete satisfaction of the performance with the Group policies and the requirements of MFRS 15 obligation is measured based on the Group’s efforts or inputs Revenue from Contracts with Customers. to the satisfaction of the performance obligation (e.g. by reference to the property development costs incurred to date Mah Sing Group Berhad as a percentage of the estimated total costs of development of the contract). In making the estimate, management relies on opinion/service of experts, past experience and the continuous monitoring mechanism. 146 Annual Report 2017 Financial Statements and “Propertydevelopmentactivities” inNote20. Refer to“key sourcesofestimationuncertainty”inNote4(b)(i) matter audit Key (CONTINUED) (INCORPORATED INMALAYSIA) TO THEMEMBERSOFMAHSINGGROUPBERHAD INDEPENDENT AUDITORS’ REPORT express anyformofassurance conclusionthereon. Our opiniononthefinancial statements oftheGroupandCompanydoesnotcover theotherinformationandwedonot expected tobemadeavailable tousafterthatdate. Thereon Overview Statement, Audit CommitteeReport, Statistics ofShareholdingsandStatistics ofWarrant CHoldings,whichare Report Discussion andAnalysis,ProfileoftheBoardDirectors, ProfileoftheSeniorManagement Team,CorporateGovernance Auditors’ and our auditor’s reportthereon,whichweobtainedpriortothedateofthisauditor’s report,andCorporateInformation,Management Statements included intheannualreportofGroupbutdoesnotinclude thefinancialstatementsofGroupandCompany Financial the The DirectorsoftheCompanyareresponsibleforother information.Theotherinformationcomprisesthe than Other Information communicated inourauditors’ report. We havedeterminedthattherearenokey auditmattersinthe auditoftheseparatefinancialstatementsCompanytobe • • • • matter audit key the to responded audit • our of scope the How • with therequirementsofMFRS123 incurred onpropertydevelopmentprojectsinaccordance Reviewed theaccountingtreatmentfor borrowingcosts are recordedinthecorrectaccountingperiod. between theGroupandpropertypurchasersthatthey Reviewed saleandpurchaseagreements enteredinto accounting period. its appropriatenessandthattheyarerecordedinthecorrect Reviewed actualdevelopmentcostsincurred todetermine development projects. Reviewed themanagement-preparedbudgets forproperty • • • over timeifoneofthefollowingcriteriahasbeenmet: determine thatpropertydevelopmentrevenueisrecognised Reviewed property developmentrevenue recognition to projects. Performed sitevisittoassessthestatusofdevelopment date. enforceable righttopaymentforperformancecompleted an alternative use totheGroupandhas an The Group’s performancedoesnotcreateanassetwith the assetiscreatedorenhanced; example, workinprogress)thatthecustomercontrolsas The Group’s performance creates or enhances an asset (for benefits providedbytheGroup’s performance; The customersimultaneouslyreceivesandconsumesthe Borrowing Costs Borrowing . Financial Statements INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF MAH SING GROUP BERHAD (INCORPORATED IN MALAYSIA) (CONTINUED) In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. When we read the Corporate Information, Management Discussion and Analysis, Profile of the Board of Directors, Profile of the Senior Management Team, Corporate Governance Overview Statement, Audit Committee Report, Statistics of Shareholdings and Statistics of Warrant C Holdings, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and request management to correct the other information accordingly. Responsibilities of the Directors for the Financial Statements The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using 147 the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Company’s internal control. Mah Sing Group Berhad • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Directors. 148 Annual Report 2017 Financial Statements 28 February2018 Chartered Accountant Partner –02846/01/2020J TEO SWEECHUA Chartered Accountants(AF0080) DELOITTE PLT (LLP0010145-LCA) 2016 inMalaysiaandfornootherpurpose. We donotassumeresponsibilitytoanyother personforthecontentofthisreport. This reportismadesolelytothemembersofCompany, asabody, inaccordancewithSection266ofthe CompaniesAct, Other Matter not actedasauditors,aredisclosedinNote18tothefinancialstatements. In accordancewiththerequirementsofCompaniesAct,2016inMalaysia,wereportthatsubsidiarieswhich we have Report onOtherLegal andRegulatory Requirements of doingsowouldreasonablybeexpectedtooutweighthepublicinterest benefitsofsuchcommunication. rare circumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequences these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely financial statementsoftheGroupandCompanyforcurrentyeararetherefore key auditmatters. We describe From thematterscommunicated with Directors, we determine those mattersthatwereof most significancein theaudit ofthe and whereapplicable, relatedsafeguards. and tocommunicatewiththemallrelationshipsothermattersthatmayreasonablybethoughtbearonourindependence, We alsoprovideDirectorswithastatementthatwehavecompliedrelevantethicalrequirementsregardingindependence, findings, includinganysignificantdeficienciesininternalcontrol that weidentifyduringouraudit. We communicatewithDirectorsregarding,amongothermatters,theplannedscopeandtimingofauditsignificant • • • (CONTINUED) (INCORPORATED INMALAYSIA) TO THEMEMBERSOFMAHSINGGROUPBERHAD INDEPENDENT AUDITORS’ REPORT opinion. responsible forthedirection,supervisionandperformanceofgroupaudit.We remainsolelyresponsibleforouraudit the GroupandCompanytoexpressanopiniononfinancialstatementsofCompany. We are Obtain sufficientappropriateauditevidenceregardingthefinancialinformationofentitiesorbusinessactivities within transactions andeventsinamannerthatachievesfairpresentation. including thedisclosures,andwhetherfinancialstatementsofGroupCompanyrepresentunderlying Evaluate theoverallpresentation,structureandcontentoffinancialstatementsGroupCompany, Company toceasecontinueasagoingconcern. evidence obtaineduptothedateofourauditors’ report.However, futureeventsorconditionsmaycausetheGroup and oftheCompanyor, ifsuchdisclosuresareinadequate, tomodifyouropinion.Ourconclusionsarebasedontheaudit we arerequiredtodrawattentioninourauditors’ reporttotherelateddisclosuresinfinancialstatementsofGroup on theGroup’s ortheCompany’s abilitytocontinueasagoingconcern.Ifweconcludethatmaterialuncertaintyexists, evidence obtained,whetheramaterialuncertainty exists relatedtoeventsorconditionsthatmaycastsignificantdoubt Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit Financial Statements STATEMENTS OF PROFIT OR LOSS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 The Group The Company 2017 2016 2017 2016 Note RM’000 RM’000 RM’000 RM’000 Revenue 5 2,915,791 2,957,617 288,505 514,250 Cost of sales 6 (2,154,100) (2,212,152) - - Gross profit 761,691 745,465 288,505 514,250 Other income 23,117 31,301 5,295 1,033 Selling and marketing expenses (116,676) (121,475) - - Administrative and other expenses (191,587) (177,350) (11,987) (84,453) Results from operating activities 476,545 477,941 281,813 430,830 Finance income 9 12,872 10,980 - - Finance costs 10 (17,134) (5,982) (3,607) (15,658) Net finance income/(costs) (4,262) 4,998 (3,607) (15,658) 149 Profit before tax 7 472,283 482,939 278,206 415,172 Income tax expense 11 (113,122) (122,627) (17,388) (11,693) Profit for the year 359,161 360,312 260,818 403,479 Attributable to: Equity holders of the Company 361,895 361,357 260,818 403,479 Non-controlling interests (2,734) (1,045) - - 359,161 360,312 260,818 403,479 Earnings per ordinary share (sen): - Basic 12(a) 12.54 13.47 - Diluted 12(b) 12.50 13.46 Dividend per ordinary share (proposed) - sen 13 6.5 6.5 6.5 6.5 Mah Sing Group Berhad The accompanying Notes form an integral part of the Financial Statements. 150 Annual Report 2017 Financial Statements The accompanying Notesformanintegralpart oftheFinancialStatements. Attributable to: Total comprehensiveincomefortheyear Other comprehensive(loss)/incomefortheyear to subsequently Remeasurements gainondefinedbenefit obligations reclassified be not will that Item to subsequently Foreign currencytranslationdifferencesonforeign reclassified be may that Item OTHER COMPREHENSIVEINCOME STATEMENTS OFPROFITORLOSS AND FOR THEFINANCIALYEARENDED31DECEMBER2017 Other comprehensive(loss)/income Profit fortheyear profit or loss: or profit loss: or profit Non-controlling interests Equity holdersoftheCompany operations 356,640 360,195 356,640 359,161 RM’000 (3,555) (2,521) (2,568) 2017 The Group 47 362,061 362,518 362,061 360,312 RM’000 1,749 1,749 2016 (457) - 260,818 260,818 260,818 260,818 RM’000 The Company 2017 - - - - 403,479 403,479 403,479 403,479 RM’000 2016 - - - - Financial Statements STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2017 The Group The Company 2017 2016 2017 2016 Note RM’000 RM’000 RM’000 RM’000 ASSETS Non-Current Assets Property, plant and equipment 14 155,872 137,619 239 338 Prepaid lease payments 15 5,583 6,841 - - Investment properties 16 195,880 199,816 - - Land held for property development 20(a) 1,482,198 1,111,766 - - Intangible assets 17 5,776 5,795 - - Investment in subsidiary companies 18 - - 196,819 199,338 Investment in associated company 19 - - - - Trade and other receivables 22 31,957 - - - Deferred tax assets 33 142,967 118,045 - - Total Non-Current Assets 2,020,233 1,579,882 197,058 199,676 151 Current Assets Property development costs 20(b) 2,139,524 2,294,868 - - Inventories 21 628,981 359,989 - - Trade and other receivables 22 1,121,662 1,039,732 2,886,007 2,454,125 Current tax assets 13,546 21,915 - - Deposits, cash, bank balances and investment in short-term funds 23 1,216,241 923,769 545,791 292,584 Total Current Assets 5,119,954 4,640,273 3,431,798 2,746,709 TOTAL ASSETS 7,140,187 6,220,155 3,628,856 2,946,385 Mah Sing Group Berhad 152 Annual Report 2017 Financial Statements (CONTINUED) AS AT 31DECEMBER2017 STATEMENTS OFFINANCIALPOSITION Share capital Capital andReserves EQUITY ANDLIABILITIES Long-term anddeferredpayables Term loans Redeemable convertiblesecuredbonds Non-Current Liabilities Total Equity Non-controlling interests Perpetual Securities Perpetual Sukuk Equity attributabletoequityholdersofthe Retained earnings Reserves Short-term borrowings Term loans Trade andotherpayables Current Liabilities Total Non-CurrentLiabilities Deferred taxliabilities Bank overdrafts Current taxliabilities The accompanying Notesformanintegralpart oftheFinancialStatements. TOTAL EQUITYANDLIABILITIES Total Liabilities Total CurrentLiabilities Company Note 24 31 30 29 28 27 26 25 35 30 34 33 36 1,773,291 4,647,609 3,455,968 1,615,768 1,524,257 7,140,187 2,492,578 1,705,402 638,036 645,212 540,000 787,176 113,417 RM’000 75,615 66,909 28,874 73,525 37,749 6,429 1,105 2017 The Group - 1,204,711 3,836,127 3,288,111 1,470,100 1,311,706 6,220,155 2,384,028 1,496,366 613,300 859,085 540,000 887,662 126,951 RM’000 12,357 15,404 16,220 42,305 8,016 2016 - - - 1,773,291 3,541,075 2,355,863 3,628,856 522,073 645,212 540,000 RM’000 60,499 83,612 87,781 87,707 4,095 The Company 2017 74 74 ------1,204,711 2,827,383 2,287,383 2,946,385 605,159 477,513 540,000 116,103 119,002 118,902 RM’000 2,799 2016 100 100 ------Financial Statements CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 - 639 Total 1,329 equity (2,521) 23,920 RM’000 (36,620) (22,486) 356,640 645,212 359,161 (157,152) 3,836,127 4,647,609 ------639 (821) Non- 8,016 6,429 1,329 (3,555) (2,734) RM’000 interests controlling ------Sukuk RM’000 540,000 540,000 Perpetual ------RM’000 645,212 645,212 Perpetual Securities - - - - of the equity (1,700) 23,920 holders RM’000 (36,620) (22,486) 360,195 361,895 (157,152) Company 3,288,111 3,455,968 to ordinary Attributable - - - - - 31 153 reserve RM’000 (36,620) (22,486) 361,926 361,895 Retained earnings (157,152) Distributable 1,470,100 1,615,768 ------8,141 6,410 (1,731) (1,731) RM’000 reserve Exchange fluctuation ------(3,844) 64,343 60,499 Warrant reserve RM’000 ------Non-distributable reserves Share RM’000 540,816 premium (540,816) ------Share capital 27,764 RM’000 540,816 1,204,711 1,773,291 13 39 40 Note Mah Sing Group Berhad to warrants exercised of transaction costs) SecuritiesPerpetual regime for the year the year Sukuk Perpetual Dividend paid At 1 January 2017 At arising from “no-par-value” Transfer Profit/(Loss) for the year Profit/(Loss) Other comprehensive income/(loss) comprehensive income/(loss) for Total Issuance of ordinary shares pursuant Securities (netIssuance of Perpetual Distribution paid to holders of Distribution paid to holders of Acquisition of subsidiary companies Disposal of subsidiary company 31 December 2017 At 154 Annual Report 2017 Financial Statements (CONTINUED) FOR THEFINANCIALYEARENDED31DECEMBER2017 CHANGES INEQUITY CONSOLIDATED STATEMENT OF Distributable Non-distributable reserves reserve Attributable Equity to ordinary component equity Exchange of holders Non- Share Share Warrant fluctuation convertible Retained of the Perpetual controlling Total capital premium reserve reserve bonds earnings Company Sukuk interests equity Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 At 1 January 2016 1,204,709 540,810 64,344 6,980 16,603 1,302,176 3,135,622 540,000 8,473 3,684,095 Profit/(Loss) for the year - - - - - 361,357 361,357 - (1,045) 360,312 Other comprehensive income for the year - - - 1,161 - - 1,161 - 588 1,749 Total comprehensive income/(loss) for the year - - - 1,161 - 361,357 362,518 - (457) 362,061 Dividend paid 13 - - - - - (156,612) (156,612) - - (156,612) Issuance of ordinary shares pursuant to warrants exercised 2 6 (1) - - - 7 - - 7 Distribution paid to holders of Perpetual Sukuk - - - - - (36,821) (36,821) - - (36,821) Repurchase of redeemable convertible secured bonds - - - - (16,603) - (16,603) - - (16,603) At 31 December 2016 1,204,711 540,816 64,343 8,141 - 1,470,100 3,288,111 540,000 8,016 3,836,127 The accompanying Notes form an integral part of the Financial Statements. Financial Statements COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 - - Total equity 23,920 RM’000 (36,620) (22,486) 260,818 260,818 645,212 (157,152) 2,827,383 3,541,075 ------RM’000 645,212 645,212 Perpetual Perpetual Securities ------Sukuk RM’000 540,000 540,000 Perpetual Perpetual - - - of the equity holders 23,920 RM’000 (36,620) (22,486) 260,818 260,818 (157,152) Company Attributable 2,287,383 2,355,863 to ordinary - - - - 155 RM’000 reserve (36,620) (22,486) earnings Retained 477,513 260,818 260,818 522,073 (157,152) Distributable ------(3,844) 64,343 60,499 Warrant RM’000 reserve ------Share RM’000 540,816 premium (540,816) Non-distributable reserves ------Share capital 27,764 RM’000 540,816 1,204,711 1,773,291 13 Note Mah Sing Group Berhad “no-par-value” regime “no-par-value” for the year for the year pursuant to warrants exercised Securities (net of transaction costs) Perpetual Sukuk Perpetual Perpetual Securities Perpetual At 1 January 2017 At Transfer arising from Transfer Profit for the year Other comprehensive income Total comprehensive income Total Dividend paid Issuance of ordinary shares Issuance of Perpetual Issuance of Perpetual Distribution paid to holders of Distribution paid to holders of At 31 December 2017 At 156 Annual Report 2017 Financial Statements (CONTINUED) FOR THEFINANCIALYEARENDED31DECEMBER2017 CHANGES INEQUITY COMPANY STATEMENT OF Distributable Non-distributable reserves reserve Attributable Equity to ordinary component equity of holders Share Share Warrant convertible Retained of the Perpetual Total capital premium reserve bonds earnings Company Sukuk equity Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 At 1 January 2016 1,204,709 540,810 64,344 16,603 267,467 2,093,933 540,000 2,633,933 Profit for the year - - - - 403,479 403,479 - 403,479 Other comprehensive income for the year ------Total comprehensive income for the year - - - - 403,479 403,479 - 403,479 Dividend paid 13 - - - - (156,612) (156,612) - (156,612) Issuance of ordinary shares pursuant to warrants exercised 2 6 (1) - - 7 - 7 Distribution paid to holders of Perpetual Sukuk - - - - (36,821) (36,821) - (36,821) Repurchase of redeemable convertible secured bonds - - - (16,603) - (16,603) - (16,603) At 31 December 2016 1,204,711 540,816 64,343 - 477,513 2,287,383 540,000 2,827,383 The accompanying Notes form an integral part of the Financial Statements. Financial Statements STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 The Group The Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Operating activities Profit before tax 472,283 482,939 278,206 415,172 Adjustments for: Allowance for doubtful debts: - trade and other receivables 99 - - - - subsidiary companies - - 7,053 45,487 Amortisation of prepaid lease payments 602 590 - - Bad debts written off - 15 - - Deposit for land acquisition written off - 2,129 - - Depreciation of property, plant and equipment 19,896 17,376 120 130 Dividend income from subsidiary companies - - (152,850) (398,900) Finance costs 63,736 71,500 3,607 15,658 (Gain)/Loss on disposal of property, plant and 157 equipment (277) (465) - 9 Gain on disposal of a subsidiary company (7,940) - (4,925) - Gain on changes in fair value of investment properties - (5,000) - - Impairment of intangible assets 19 390 - - Impairment of investment in subsidiary companies - - 2,887 8,200 Impairment of inventories 1,511 - - - Interest income (34,371) (28,070) (135,655) (115,350) Land held for property development written off 467 - - - Loss on repurchase of redeemable convertible secured bonds - 27,141 - 27,141 Other deposit written off 11 187 - - Property development costs written off 321 - - - Property, plant and equipment written off 2,621 11 - 3 Provision for operating lease commitments 1,399 1,173 - - Provision for post-employment benefits 1,438 1,236 - - Reversal of allowance for doubtful debts: - trade and other receivables (364) (7,554) - - - subsidiary companies - - (1,790) - Reversal of write down of inventories - (685) - - Mah Sing Group Berhad Reversal of impairment of inventories (38) - - - 158 Annual Report 2017 Financial Statements (CONTINUED) FOR THEFINANCIALYEARENDED31DECEMBER2017 STATEMENTS OFCASH FLOWS Net cashoutflow onacquisitionofsubsidiary Proceeds fromdisposalofasubsidiary company Proceeds fromdisposalofproperty, plantand Payments foracquisitionofproperty, plantand Net advancestosubsidiarycompanies Dividends receivedfromsubsidiarycompanies Acquisition ofland Additions tolandheldforpropertydevelopment Investing activities Net cashgeneratedfromoperatingactivities Income taxrefunded Income taxpaid Interest paid Interest received Cash generatedfromoperations Total changesinworkingcapital Change inprogressbillings Change inpayables Change inaccruedbillings Change inreceivables Change ininventories Change inpropertydevelopmentcosts Changes inworkingcapital Operating cashflowsbeforechangesinworking Write downofinventories Unrealised loss/(gain)onforeignexchange Adjustments for:(continued) companies (Note 39) (Note 40) equipment equipment capital (114,691) (110,638) (149,111) (139,465) 365,833 508,245 521,572 133,673 (61,458) (43,965) (41,624) (13,327) (37,643) (11,301) (46,513) RM’000 14,065 34,258 87,922 6,472 2017 886 103 The Group 56 - - (119,837) (139,317) 453,363 622,024 561,146 (34,929) (77,130) (56,417) (33,629) RM’000 23,978 60,904 56,504 30,251 60,878 26,786 (1,991) 2016 487 287 224 - - - - - (469,614) 152,850 112,561 107,269 110,616 114,246 (16,118) RM’000 21,499 (3,630) (3,347) 6,557 The Company 2017 (21) (89) ------(540,059) 398,900 (12,304) (10,776) RM’000 90,458 85,884 88,334 99,110 17,090 (2,450) 2016 (212) ------Financial Statements STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 (CONTINUED) The Group The Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Investing activities (continued) Subscription of shares in subsidiary company - - (2,000) - Net cash used in investing activities (323,394) (154,279) (312,228) (141,159) Financing activities Dividends paid (157,152) (156,612) (157,152) (156,612) Distribution paid to holders of Perpetual Sukuk (36,620) (36,821) (36,620) (36,821) Distribution paid to holders of Perpetual Securities (22,486) - (22,486) - Net proceed from issuance of Perpetual Securities 645,212 - 645,212 - Repayment to non-controlling interests of subsidiary companies (3,111) - - - Advances from non-controlling interests of a former subsidiary company 21,600 - - - 159 Placement of deposits pledged with licensed bank as collateral (175) (363) - - Withdrawal of deposits in Debt Service Reserve Accounts - 61,996 - 61,996 Placement of deposits in Trustees’ Reimbursement Account (30) - (30) - Placement of deposits with licensed bank for Escrow Accounts (30,159) (26,255) (21,271) - Proceeds from issuance of ordinary shares pursuant to warrants exercised 23,920 7 23,920 7 Proceeds from short-term borrowings 39,152 10,621 - - Proceeds from term loans 199,584 368,550 - - Repayment of finance lease and hire purchase liabilities (2,346) (2,341) - - Repayment of short-term borrowings (25,182) (5,835) - - Repayment of term loans (433,684) (574,231) - (3,133) Repurchase of redeemable convertible secured bonds - (337,100) - (337,100) Net cash generated from/(used in) financing activities 218,523 (698,384) 431,573 (471,663) Mah Sing Group Berhad 160 Annual Report 2017 Financial Statements (CONTINUED) FOR THEFINANCIALYEARENDED31DECEMBER2017 STATEMENTS OFCASH FLOWS Note: Cash andcashequivalentsatendofthe Cash andcashequivalentsatbeginningof Currency translationdifferences Net increase/(decrease)incashand Additions ofproperty, plantandequipment (Note14) The accompanyingNotesform anintegralpartoftheFinancialStatements. Total cashpurchaseduringthefinancialyear Unpaid balancesincludedundertradeand Cash paidinrespectofprioryearacquisition Deposit paidincurrentyear Deposit paidinprioryear Hire purchasefinancing financial year the financialyear cash equivalents other receivables During thefinancialyear, theGroupandCompanyacquiredproperty, plantandequipment bythefollowingmeans: Note 37 1,141,769 880,766 260,962 RM’000 RM’000 40,340 43,965 11,743 (8,697) (6,140) (1,366) 8,085 2017 2017 The Group The Group 41 1,280,020 (399,300) 880,766 RM’000 RM’000 37,955 34,929 (2,586) 2016 2016 (440) 46 - - - 524,460 292,554 231,906 RM’000 RM’000 The Company The Company 2017 2017 21 21 ------(522,364) 292,554 814,918 RM’000 RM’000 2016 2016 ------Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 1. GENERAL INFORMATION The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad. The principal activities of the Company are investment holding and provision of management services to subsidiary companies in the Group. The information on the name, place of incorporation, principal activities and percentage of issued share capital held by the holding company in each subsidiaries is as disclosed in Note 18. There have been no significant changes in the nature of the activities of the Group and of the Company during the financial year. The registered office and principal place of business of the Company is located at Penthouse Suite 1, Wisma Mah Sing, 163, Jalan Sungai Besi, 57100 Kuala Lumpur. The financial statements of the Group and of the Company have been approved by the Board of Directors and were authorised for issuance on 28 February 2018. 2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia. 161 The financial statements are presented in Ringgit Malaysia (“RM”) which represents the functional currency of the Company and all financial information presented in RM are rounded to the nearest thousand (“RM’000”), unless otherwise stated. In the current financial year, the Group and the Company have adopted all the new and revised MFRSs and amendments to MFRSs issued by the Malaysian Accounting Standards Board (“MASB”) that are effective for annual periods beginning on or after 1 January 2017. Amendments to: MFRS 107 Disclosure Initiative MFRS 112 Recognition of Deferred Tax Assets for Unrealised Losses Annual Improvements to MFRSs 2014-2016 Cycle Adoption of new and amended Malaysian Financial Reporting Standards The adoption of these amendments to MFRSs did not result in significant changes in the accounting policies of the Group and of the Company and has no significant effect on the financial performance or position of the Group and of the Company except as disclosed below: Amendments to MFRS 107 Disclosure Initiative The Group have applied these amendments for the first time in the current year. The amendments require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both cash and non-cash changes. Mah Sing Group Berhad A reconciliation between the opening and closing balances of these items is provided in Note 30 (d). Consistent with the transition provisions of the amendments, the Group have not disclosed comparative information for the prior period. Apart from the additional disclosure in Note 30 (d), the application of these amendments has had no impact on the Group’s and the Company’s financial statements. 162 Annual Report 2017 Financial Statements 2. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS Amendments to: MFRS 17 MFRS 16 4 3 2 1 Annual ImprovementstoMFRSs2015-2017Cycle Annual ImprovementstoMFRSs2014-2016Cycle MFRS 9 the GroupandCompanyareaslistedbelow: Issues CommitteeInterpretations(“ICInterpretations”) whichwereinissuebutnotyeteffectiveandearlyadoptedby At thedateofauthorisationforissuethesefinancialstatements,newandrevisedMFRSs,amendmentstoMFRSs Standards, AmendmentsandICInterpretationsinIssueButNotYet Effective BASIS OFPREPARATION OFTHE FINANCIALSTATEMENTS (continued) through othercomprehensiveincome’ (FVTOCI) measurementcategoryforcertainsimpledebtinstruments. financial assetsand(b)limitedamendmentstotheclassification andmeasurementrequirementsbyintroducinga‘fairvalue accounting. Another revised version of MFRS 9 was issued in July 2014 mainly to include (a) impairment requirements for of financial liabilities and for derecognition, andin November 2013 to include the new requirementsfor generalhedge MFRS 9wassubsequentlyamendedinOctober2010to include requirementsfortheclassificationandmeasurement MFRS 9issuedinNovember2009introducednewrequirements fortheclassificationandmeasurementoffinancialassets. MFRS 9FinancialInstruments and theCompanyinperiodofinitialapplication,except asdisclosedbelow: MFRSs, amendmentstoMFRSandICInterpretationswillhavenomaterialimpactonthefinancialstatementsofGroup the annualfinancialstatementsofGroupandCompanywhentheybecomeeffectivethatadoptionthese The DirectorsanticipatethattheabovementionedMFRSs,amendmentstoMFRSandICInterpretationswillbeadopted in IC Interpretation23 IC Interpretation22 MFRS 140 MFRS 128 MFRS 10and128 MFRS 9 MFRS 4 MFRS 2 Effective datedeferredtoabedeterminedandannounced,withearlierapplicationstillpermitted. Effective forannualperiodsbeginningonorafter1January2021,withearlierapplicationpermitted. Effective forannualperiodsbeginningonorafter1January2019,withearlierapplicationpermitted. Effective forannualperiodsbeginningonorafter1January2018,withearlierapplicationpermitted. Insurance Contracts Leases Financial Instruments(IFRS9issuedbyIASB inJuly2014) Uncertainty overIncomeTax Treatments Foreign CurrencyTransactions andAdvanceConsiderations Transfers ofInvestmentProperty Long-term InterestsinAssociatesandJointVentures Sale orContributionofAssetsbetweenanInvestoranditsAssociate orJointVenture Prepayment FeatureswithNegativeCompensation Applying MFRS9FinancialInstrumentswith4InsuranceContracts Classification andMeasurementofShare-based Payment Transactions 2 3 2 1 1 2 2 2 1 1 1 1 4 Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (continued) MFRS 9 Financial Instruments (continued) Key requirements of MFRS 9: • all recognised financial assets that are within the scope of MFRS 139Financial Instruments: Recognition and Measurement are required to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost at the end of subsequent accounting periods. All other debt investments and equity investments are measured at fair values at the end of subsequent accounting periods. In addition, under MFRS 9, entities may make an irrevocable election to present subsequent changes in the fair value of equity instruments (that is not held for trading) in other comprehensive income, with only dividend income generally recognised in profit or loss. • with regard to the measurement of financial liabilities designated as at fair value through profit or loss, MFRS 9 requires that the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability, is presented in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or loss. Previously, under MFRS 139, the entire amount of the change in the fair value of the financial liability designated 163 as at fair value through profit or loss was presented in profit or loss. • in relation to the impairment of financial assets, MFRS 9 requires an expected credit loss model, as opposed to an incurred credit loss model under MFRS 139. The expected credit loss model requires an entity to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. In other words, it is no longer necessary for a credit event to have occurred before credit losses are recognised. • the new general hedge accounting requirements retain the three types of hedge accounting mechanisms currently available in MFRS 139. Under MFRS 9, greater flexibility has been introduced to the types of transactions eligible for hedge accounting, specifically broadening the types of instruments that qualify for hedging instruments and the types of risk components of non-financial items that are eligible for hedge accounting. In addition, the effectiveness test has been overhauled and replaced with the principle of an ‘economic relationship’. Retrospective assessment of hedge effectiveness is also no longer required. Enhanced disclosure requirements about an entity’s risk management activities have also been introduced. Based on an analysis of the Group’s financial assets and financial liabilities as at 31 December 2017 on the basis of the facts and circumstances that exist at that date, the Directors of the Company have assessed the impact of MFRS 9 to the financial statements of the Group and of the Company as follows: (a) Classification and measurement Investment in short-term funds classified as at fair value through profit or loss as disclosed in Note 44. These are held within a business model whose objective is held to collect or held to collect and sell that satisfy the solely payments Mah Sing Group Berhad of principal and interest test. Accordingly, these financial assets will be measured at fair value through profit or loss upon the application of MFRS 9; All other financial assets and financial liabilities will continue to be measured on the same basis as is currently adopted under MFRS 139. 164 Annual Report 2017 Financial Statements 3. 2. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS given inexchange forassets. as explainedinthesignificant accountingpolicies.Historicalcostisgenerallybasedonthe fairvalueoftheconsideration for certainnon-currentassets and financialinstrumentsthataremeasuredatfairvalues theendofeachreportingperiod The financialstatementsoftheGroupandCompany have beenpreparedunderthehistoricalcostconventionexcept Basis ofAccounting SIGNIFICANT ACCOUNTING POLICIES made intheGroup’s andtheCompany’s financialstatements. The DirectorsanticipatethattheapplicationofMFRS16have nomaterialimpactontheamountsreportedanddisclosures and continuestorequirealessorclassifyleaseeitheras anoperating leaseorafinance lease. In contrasttolesseeaccounting,MFRS16substantiallycarriesforwardthelessoraccountingrequirementsin117, will bepresentedasfinancingandoperatingcashflowsrespectively. cash flows;whereasunderMFRS16model,theleasepaymentswillbesplitintoaprincipalandaninterestportionwhich classification of cash flows will also be affected as operating lease payments under MFRS 117 are presented as operating is adjustedforinterestandleasepayments,aswelltheimpactofmodifications,amongstothers.Furthermore, the initially measured at the present value of the lease payments that are not paid at that date. Subsequently, the lease liability accumulated depreciation and impairmentlosses,adjustedfor any remeasurementoftheleaseliability. Theleaseliabilityis The right-of-useassetisinitiallymeasuredatcostandsubsequently(subjecttocertainexceptions) less for short-termleasesandoflowvalueassets. by amodelwhereright-of-use asset and acorresponding liability have toberecognisedforallleasesbylessees except Distinctions ofoperatingleases(offbalancesheet)andfinanceleaseareremovedforlesseeaccounting,isreplaced MFRS 16distinguishesleasesandservicecontractsonthebasisofwhetheranidentifiedassetiscontrolledbyacustomer. interpretations whenitbecomeseffective. (b) Impairment MFRS 9FinancialInstruments(continued) BASIS OFPREPARATION OFTHE FINANCIALSTATEMENTS (continued) both lessors and lessees. MFRS 16 will supersede the current lease guidance including MFRS 117 MFRS 16introducesacomprehensivemodelfortheidentificationofleasearrangementsandaccountingtreatments for MFRS 16Leases different fromthelossallowanceundercurrentbasisofimpairment. the Companyexpectthatbasedoncreditprofileofreceivables,lossallowancewillnotbesignificantly record lifetimeexpectedlossesonallreceivables.Uponapplicationofthecreditlossmodel,Groupand either ona12-monthorlifetimebasis.TheGroupandtheCompanyexpecttoapplysimplifiedapproach MFRS 9 requires the Group and the Company to record expected creditlosseson all of tradeand other receivables Leases and the related Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 3. SIGNIFICANT ACCOUNTING POLICIES (continued) Basis of Accounting (continued) Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of MFRS 2 Share-based Payment, leasing transactions that are within the scope of MFRS 117 Leases, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in MFRS 102 Inventories or value in use in MFRS 136 Impairment of Assets. In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; • Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or 165 liability, either directly or indirectly; and • Level 3 inputs are unobservable inputs for the asset or liability. Economic Entities in The Group (a) Subsidiary companies and basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Company and its subsidiary companies. Control is achieved when the Company: • has power over the investee; • is exposed, or has rights, to variable returns from its involvement with the investee; and • has the ability to use its power to affect its returns. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power, including: Mah Sing Group Berhad • the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders; 166 Annual Report 2017 Financial Statements 3. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (a) Economic EntitiesinTheGroup(continued) SIGNIFICANT ACCOUNTING POLICIES(continued) investment inanassociateor joint venture. • • • Subsidiary companiesandbasisofconsolidation(continued) 139 date whencontrolislostregarded asthefairvalueoninitialrecognitionforsubsequent accountingunderMFRS by applicableMFRSFramework). Thefairvalueofanyinvestmentretainedintheformer subsidiary companyatthe subsidiary company(i.e. reclassifiedtoprofitorlosstransferredanothercategory ofequityasspecified/permitted subsidiary companyareaccountedforasiftheGrouphaddirectly disposedoftherelevantassetsorliabilities any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to the and (ii)thepreviouscarryingamountofassets(including goodwill),andliabilitiesofthesubsidiarycompany between (i)theaggregateoffairvalueconsideration receivedandthefairvalueofanyretainedinterest When theGrouplosescontrolofasubsidiarycompany, againorlossisrecognisedand iscalculatedasthedifference recognised directlyinequityandattributedtoownersofthe Company. amount bywhichthenon-controllinginterestsareadjusted atthefairvalueofconsiderationpaidorreceivedis are adjusted to reflect the changes in their relative interests in the subsidiarycompanies. Anydifference between the accounted forasequitytransactions.Thecarryingamounts of theGroup’s interestsandthenon-controlling Changes intheGroup’s ownershipinterestsinsubsidiarycompaniesthatdonotresulttheGrouplosingcontrolare members oftheGroupareeliminatedinfullonconsolidation. All intra-groupassetsandliabilities,equity, incomeandexpensescashflowsrelatingtotransactionsbetween policies intolinewiththoseadoptedbyothermembersoftheGroup. Where necessary, adjustments aremadetothefinancialstatementsofsubsidiarycompaniesbringtheiraccounting balance. the Companyandtonon-controllinginterestsevenifthisresultsinhavingadeficit to thenon-controllinginterests.Total comprehensiveincomeofsubsidiarycompaniesisattributedtotheowners Profit orlossandeachcomponentofothercomprehensiveincomeareattributedtotheownersCompany the subsidiarycompany. comprehensive incomefromthedateCompanygainscontroluntilwhenceasesto subsidiary companyacquiredordisposedofduringtheyearareincludedinstatementprofitlossandother and ceaseswhentheCompanylosescontrolofsubsidiarycompany. Specifically, incomeandexpensesofa Consolidation ofasubsidiarycompanybeginswhentheCompanyobtainscontrolover Financial Instruments: Recognition and Measurement and Recognition Instruments: Financial shareholders’ meetings. to directtherelevantactivitiesattimethatdecisionsneedbemade, including votingpatternsatprevious any additionalfactsandcircumstancesthatindicatetheCompanyhas,ordoesnothave, thecurrentability rights arisingfromothercontractualarrangements;and potential votingrightsheldbytheCompany, othervoteholdersorparties; or, whenapplicable, thecostoninitial recognition ofan Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 3. SIGNIFICANT ACCOUNTING POLICIES (continued) Economic Entities in The Group (continued) (a) Subsidiary companies and basis of consolidation (continued) In the Company’s separate financial statements, investments in subsidiary companies are stated at cost less accumulated impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss. (b) Business combinations Acquisitions of subsidiary companies and businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition- related costs are recognised in profit or loss as incurred. At acquisition date, the identifiable assets acquired and liabilities assumed are recognised at their fair value, except that: 167 • deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with MFRS 112 Income Taxes and MFRS 119 Employee Benefits respectively; • liabilities or equity instruments related to the share-based payment arrangements of the acquiree or share- based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with MFRS 2 Share-based Payment at the acquisition date; and • assets (or disposal groups) that are classified as held for sale in accordance with MFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard. Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss at the acquisition date. Where the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition date fair value. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. Mah Sing Group Berhad 168 Annual Report 2017 Financial Statements 3. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (c) (b) Economic EntitiesinTheGroup(continued) SIGNIFICANT ACCOUNTING POLICIES(continued) as heldforsale, inwhichcaseitisaccountedforaccordancewithMFRS5 statements usingtheequitymethodofaccounting,except whentheinvestment,oraportionthereof, isclassified The resultsandassetsliabilitiesofassociatedcompanies areincorporatedintheseconsolidatedfinancial those policies. to participateinthefinancialandoperatingpolicydecisionsofinvesteebutisnotcontrolorjointover An associatedcompanyisanentityoverwhichtheGrouphassignificantinfluence. Significantinfluenceisthepower Associated companies affected theamountsrecognisedatthatdate. information obtainedaboutfactsandcircumstancesthatexistedasoftheacquisitiondatethat,ifknown,wouldhave amounts areadjustedduringthemeasurementperiod,oradditionalassetsliabilitiesrecognised,toreflectnew occurs, theGroupreportsprovisionalamountsforitemsofwhichaccountingisincomplete. Thoseprovisional If theinitialaccountingforabusinesscombinationisincompletebyendofreportingperiodinwhich interest weredisposedof. in othercomprehensiveincomearereclassifiedtoprofitorloss,wheresuchtreatmentwouldbeappropriateifthat Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised remeasured tofairvalueattheacquisitiondateandresultinggainorloss,ifany, isrecognisedinprofitorloss. Where abusinesscombinationisachievedinstages,theGroup’s previouslyheldinterestsintheacquiredentityare in profitorloss. Contingent Liabilities and Contingent Assets Contingent and Liabilities Contingent Discontinued Operations Discontinued reassessment, is recognisedimmediatelyinprofit orlossintheperiod inwhich theinvestmentisacquired. of theGroup’s shareofthe net fairvalueoftheidentifiableassetsandliabilitiesover costoftheinvestment,after the investeeisrecognisedas goodwill, whichisincludedwithinthecarryingamountof investment.Anyexcess of thecostinvestment over theGroup’s shareofthenetfairvalueidentifiable assetsandliabilitiesof investee becomesanassociated company. Onacquisition oftheinvestmentinanassociatedcompany, anyexcess An investmentinanassociated companyisaccountedforusingtheequitymethodfrom thedateonwhich legal orconstructiveobligationsmadepaymentsonbehalf oftheassociated company. recognising itsshareoffurtherlosses.Additionallossesarerecognised onlytotheextentthatGrouphasincurred that, insubstance, formpartoftheGroup’s netinvestment in theassociatedcompany),Group discontinues associated companyexceeds theGroup’s interestinthatassociatedcompany(whichincludesanylong-terminterests profit orlossandothercomprehensive incomeoftheassociatedcompany. WhentheGroup’s shareoflossesan the consolidatedstatementoffinancialpositionatcostand adjusted thereaftertorecognisetheGroup’s shareofthe dates in accordance with MFRS 139 within equity. Contingentconsiderationthatisclassifiedasanassetorliabilityremeasuredatsubsequentreporting classified asequityisnotremeasuredatsubsequentreportingdatesanditssettlementaccountedfor period adjustmentsdependsonhowthecontingentconsiderationisclassified.Contingentthat The subsequentaccountingforchangesinthefairvaluecontingentconsiderationthatdonotqualifyasmeasurement Business combinations(continued) . Undertheequitymethod,aninvestmentinassociatedcompany isinitiallyrecognisedin Financial Instruments: Recognition and Measurement and Recognition Instruments: Financial , asappropriate, withthecorrespondinggainorlossbeingrecognised Non-current Assets Held for Sale and and Sale for Held Assets Non-current or MFRS 137 Provisions , Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 3. SIGNIFICANT ACCOUNTING POLICIES (continued) Economic Entities in The Group (continued) (c) Associated companies (continued) The requirements of MFRS 139 Financial Instruments: Recognition and Measurement are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group’s investment in an associated company. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with MFRS 136 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with MFRS 136 Impairment of Assets to the extent that the recoverable amount of the investment subsequently increases. The Group discontinues the use of the equity method from the date when investment ceases to be an associated company, or when the investment is classified as held for sale. When the Group retains an interest in the former associated company and the retained interest is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as its fair value on initial recognition in accordance with MFRS 139 Financial Instruments: Recognition and Measurement. The difference between the carrying amount of the associated company at the date the equity method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the associated company is included in the determination of the gain 169 or loss on disposal of the associated company. In addition, the Group accounts for all amounts previously recognised in other comprehensive income in relation to that associated company or joint venture on the same basis as would be required if that associated company had directly disposed of the related assets and liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income by that associated company would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when the equity method is discontinued. When the Group reduces its ownership interest in an associated company but the Group continues to use the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities. When a group entity transacts with an associated company of the Group, profits or losses resulting from the transactions with the associated company are recognised in the Group’s consolidated financial statements only to the extent of the Group’s interest in the associated company that are not related to the Group. Foreign Currencies (a) Functional and presentation currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entities operate (the “functional currency”). The financial statements are presented in Ringgit Malaysia, which is the Company’s functional currency and the presentation currency of the financial statements. Mah Sing Group Berhad 170 Annual Report 2017 Financial Statements 3. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS resolved. revenue recognisedwillnotoccurwhentheuncertainty associated withthevariableconsiderationissubsequently The revenueisrecognisedtotheextentthatithighlyprobable thatasignificantreversalintheamountofcumulative the goodsorservicespromisedincontract. the amount of consideration is allocated to eachperformance obligation basedontherelativestand-alonesellingpricesof expected value or the most likely outcome. If the contract with customer contains more than one performance obligation, penalties orothersimilaritems,theGroupestimatesamount ofconsiderationtowhichitwillbeentitledbasedonthe or goodsandservicestaxes. Iftheamountofconsideration varies duetodiscounts,rebates, refunds,credits,incentives, the promisedgoodsorservicestocustomers,excluding amountscollectedonbehalfofthirdpartiessuchassalestaxes Revenue ismeasuredattheamountofconsiderationtowhichGroupexpectsbeentitledinexchange fortransferring and impliedintheGroup’s customarybusinesspractices. are substantiallythesameandthathavepatternoftransfer)tocustomerisexplicitlystatedincontra ct A performanceobligationisapromisetotransferdistinctgoodsorservice(orseriesofservicesthat of thegoodsorservicesunderlyingparticularperformanceobligation istransferredtothecustomer. Revenue isrecognisedwhenorasaperformance obligationinthecontractwithcustomerissatisfied,i.e. whenthe“control” Revenue Recognition (c) (b) Foreign Currencies(continued) SIGNIFICANT ACCOUNTING POLICIES(continued) loss onsale. of orsold,exchange differencesthatwererecordedinequityarerecognisedprofitorlossaspartofthegain recognised inothercomprehensiveincomeandaccumulatedequity. Whenaforeignoperationispartiallydisposed On consolidation,exchange differencesarisingfromthetranslationofnetinvestmentinforeignoperationsare equity. for thefinancialyear. Exchange differences arisingfromthetranslationarerecognised as aseparatecomponentof at thereportingdateandresultsofforeignsubsidiarycompaniesaretranslatedaveragerateexchange Assets andliabilitiesofforeignsubsidiarycompaniesaretranslatedtoRinggitMalaysiaatratesexchange ruling Group companies are recognisedinprofitorloss. from thetranslationatyear-endexchange ratesofmonetaryassetsandliabilitiesdenominatedinforeigncurrencies dates ofthetransactions.Foreignexchange gainsandlossesresultingfromthesettlementofsuchtransactions Foreign currencytransactionsaretranslatedintothefunctionalusingexchange ratesprevailingat the Transactions andbalances Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 3. SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue Recognition (continued) The control of the promised goods or services may be transferred over time or at a point in time. The control over the goods or services is transferred over time and revenue is recognised over time if: • the customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs; • the Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or • the Group’s performance does not create an asset with an alternative use and the Group has an enforceable right to payment for performance completed to date. Revenue for performance obligation that is not satisfied over time is recognised at the point in time at which the customer obtains control of the promised goods or services. The Group recognises revenue from property development over time if it creates an asset with no alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. Revenue is recognised over 171 the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. The progress towards complete satisfaction of the performance obligation is measured based on the Group’s efforts or inputs to the satisfaction of the performance obligation (e.g. by reference to the property development costs incurred to date as a percentage of the estimated total costs of development of the contract). Revenue from sales of completed properties is recognised upon delivery of properties where the control of the properties has been passed to the buyers. Revenue from sales of goods is recognised upon delivery of goods where the control of the goods has been passed to the customers, or performance of services, net of sales and goods and service taxes and discounts. Other revenue earned by the Group are recognised on the following bases: Dividend income - when the right to receive payment is established Interest income - recognised on a time proportion basis that reflects the effective yield on asset Rental income - accrued on a time basis, by reference to the agreements entered into Employee Benefits (a) Short-term employee benefits Wages, salaries, bonuses and social security contributions are recognised as an expense in the financial year in which Mah Sing Group Berhad the associated services are rendered by employees of the Group and of the Company. Short-term accumulating compensated absences for paid annual leave when services are rendered by employees that increase their entitlement to future compensated absences are recognised based on the experience that absences will occur. 172 Annual Report 2017 Financial Statements 3. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS All otherborrowing costsarerecognisedasfinance costsinprofitorloss inthefinancialyearwhich theyareincurred. investment ofthatborrowing. made specificallyforthepurpose ofobtainingaqualifyingassetandlessanyinvestment incomeonthetemporary The amountofborrowingcosts eligibleforcapitalisationisdeterminedbasedonactual interest incurredonborrowings the costofthoseassets,until such timeastheassetsaresubstantially readyfortheirintendeduseorsale. that necessarilytake asubstantialperiodoftimetogetthemreadyfortheirintendeduseorsale, arecapitalisedaspartof Borrowing costsdirectlyattributabletotheacquisition,construction orproductionofqualifyingassets,whichareassets Borrowing Costs (c) (b) Employee Benefits(continued) SIGNIFICANT ACCOUNTING POLICIES(continued) the plan’s obligationtopaytherelatedemployeebenefitsdirectly. benefit obligationsandonlycanbereturnedtotheGroup if theremainingassetsoffundaresufficienttomeet by thefair value ofplan assets. Planassets resulting from thiscalculation aretobeusedonlysettletheemployee obligations adjustedforunrecognisedactuarialgainsandlosses andunrecognisedpastservicecost,reduced The amountrecognisedattheendofreportingperiod representsthepresentvalueofdefinedbenefit • remeasurement. • • as follows: rate atthebeginningofperiodtonetdefinedbenefitliabilityorasset.Definedcostsarecategorised recognised inprofitorlosstheperiodofaplanamendment.Netinterestiscalculatedbyapplyingdiscount income is reflected immediately in retained earnings and will not be classified to profit or loss. Past service cost is comprehensive incomeintheperiodwhichtheyoccur. Remeasurement recognisedinothercomprehensive interest), isreflectedimmediatelyinthestatementoffinancialpositionwithachargeorcreditrecognisedother and losses,the effect ofthechanges totheassetceiling (ifapplicable) andthereturnonplanassets(excluding valuations beingcarriedoutattheendofeachannualreportingperiod.Remeasurement, comprisingactuarialgains benefit plans,thecostofprovidingbenefitsisdeterminedusingprojectedunitcreditmethod,withactuarial have earned in return for their service in the current and prior years is estimated. For defined benefit retirement valuation in accordance with the labour law requirements in that country where the amountofbenefitsthatemployees employees. Theforeignsubsidiarycompany’s obligationsunderRBSaredeterminedbasedonexternalactuarial A foreignsubsidiarycompanyoperatesanunfundeddefined Retirement BenefitScheme(“RBS”)foritseligible Defined benefitplan contributions toEPFareincludedinsalariesandwages. employees’ salaries.The Group’s andtheCompany’s contributionstoEPFaredisclosedseparately. The employees’ (“EPF”), astatutorydefinedcontributionplanforalltheireligibleemployeesbasedoncertainprescribedratesofthe The GroupandtheCompanyarerequiredbylawtomake monthlycontributionstotheEmployeesProvidentFund Defined contributionplan net interestexpenseorincome;and service cost(includingcurrentandpastcost); Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 3. SIGNIFICANT ACCOUNTING POLICIES (continued) Income Tax Income tax expense comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the financial year and is measured using the tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred tax is accounted for using the liability method in respect of temporary differences arising from differences between the carrying amounts of assets and liabilities in the financial statements and their corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognised for all taxable temporary differences, and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that sufficient future taxable profit will be available against which the deferred tax assets can be utilised. The carrying amount of deferred tax assets is reviewed at the end of the reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. Deferred tax is measured at tax rates that are expected to apply in the period when the asset is realised or the liability settled, based on tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred 173 tax is recognised in profit or loss, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity. For the purposes of measuring deferred tax liabilities and deferred tax assets for investment properties that are measured using the fair value model, the carrying amounts of such properties are presumed to be recovered entirely through sale, unless the presumption is rebutted. The presumption is rebutted when the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same tax authority and the Company intends to settle its current assets and liabilities on a net basis. Unutilised reinvestment allowance, being tax incentive that is not a tax base of an asset, is recognised as a deferred tax asset to the extent that it is probable that the sufficient future taxable profits will be available against which the unutilised tax incentive can be utilised. Financial Instruments (a) Initial recognition and measurement Financial instruments are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instruments. Mah Sing Group Berhad Financial assets and financial liabilities are initially measured at fair value. Transactions costs that are directly attributable to the acquisition or issue of the financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs that are directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. 174 Annual Report 2017 Financial Statements 3. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (b) Financial Instruments(continued) SIGNIFICANT ACCOUNTING POLICIES(continued) (i) Equity instruments (ii) (i) potentially favourable, oranequityinstrumentofanotherenterprise. enterprise, acontractualrighttoexchange financialinstrumentswithanotherenterpriseunderconditionsthatare A financialassetisanythatcash,acontractualrighttoreceivecashoranotherfrom recognition. The classificationdependsonthenatureandpurposeoffinancialassetsisdeterminedattimeinitial or loss” (FVTPL),“held-to-maturity” investments,“available-for-sale” financialassetsand“loansreceivables”. Financial assetsareclassifiedintothefollowingspecifiedcategories:financialat“fairvaluethroughprofit Financial assets Financial instrumentcategoriesandsubsequentmeasurement Loans and receivables and Loans Classification as debt or equity equity or debt as Classification FVTPL at assets Financial substance ofthecontractualarrangement. Debt and equity instruments are classified aseitherfinancial liabilities or asequityin accordance with the those financialassetsclassifiedasFVTPL. Income from financial assets is recognised on an effective interest methodfor debtinstruments other than (where appropriate)ashorterperiod,tothenetcarryingamount oninitial recognition. rate, transaction costs andotherpremiums or discounts)through the expectedlifeoffinancial asset,or cash receipts(includingallfeesandpointspaidorreceived thatformanintegralpartoftheeffectiveinterest interest incomeovertherelevantperiod.Theeffective rateisthethatdiscountsestimatedfuture The effectiveinterestmethodisaofcalculatingtheamortisedcostfinancialassetandallocating interest wouldbeimmaterial. recognised byapplyingtheeffectiveinterestrate, except forshort-termreceivableswhentherecognitionof measured atamortisedcostusingtheeffectiveinterestmethod,lessanyimpairment.Interestincomeis quoted inanactivemarket (including fixed depositswithfinancialinstitutions). Loansandreceivablesare Loans andreceivablesarenon-derivativefinancialassetswithfixed ordeterminable paymentsthatarenot recognised inprofitorloss. as atFVTPL.FinancialassetsFVTPLarestatedfairvaluewithanygainsorlossesarisingonremeasurement Financial assetsareclassifiedasatFVTPLwhenthefinancialeitherheldfortradingoritisdesignated Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 3. SIGNIFICANT ACCOUNTING POLICIES (continued) Financial Instruments (continued) (b) Financial instrument categories and subsequent measurement (continued) Equity instruments (continued) (ii) Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group and the Company are recognised at the proceeds received, net of direct issue costs. Financial liabilities A financial liability is any liability with contractual obligation to deliver cash or another financial asset to another enterprise, or to exchange financial instruments with another enterprise under conditions that are potentially unfavourable. Financial liabilities are classified as either financial liabilities “at FVTPL” or “other financial liabilities”. The Group’s and the Company’s significant financial liabilities include trade and other payables, terms loans, long-term and deferred payables, short-term borrowings and bank overdrafts which are initially measured at fair 175 value and subsequently measured at amortised cost. (i) Financial liabilities at FVTPL Financial liabilities are classified as at FVTPL when financial liabilities are either held for trading or it is designated as at FVTPL. Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. (ii) Other financial liabilities Other financial liabilities are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period. (c) Derecognition A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. On derecognition of a financial asset, the difference between the carrying amount and Mah Sing Group Berhad the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity, is recognised in profit or loss. 176 Annual Report 2017 Financial Statements 3. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (e) (d) (c) Financial Instruments(continued) SIGNIFICANT ACCOUNTING POLICIES(continued) • • • Objective evidenceofimpairmentcouldinclude: the initialrecognitionoffinancialasset,estimatedfuturecash flowsoftheinvestmenthavebeenaffected. considered to be impaired when there is objective evidence that, as a result of one or more events that occurredafter Financial assets, are assessed for indicators of impairment at theend of eachreportingperiod.Financialassetsare Impairment offinancialassets months. remaining maturityoftheinstrumentismorethan12monthsanditnotexpectedtoberealisedorsettledwithin recognised asafinancialliability. Aderivativeispresentedasanon-currentassetorliabilityifthe A derivativewithapositivefairvalueisrecognisedasfinancialasset;negative hedging instrumentduringthecurrentfinancialyear. of therecognitioninprofitorlossdependsonnaturehedgerelationship. Noderivativewasdesignatedas loss immediatelyunlessthederivativeisdesignatedandeffectiveasahedginginstrument,inwhicheventtiming remeasured to their fair value at theendofeach reporting period. Theresultinggainorlossis recognised inprofitor Derivatives areinitiallyrecognisedatfairvaluethedatederivativecontractisenteredintoandsubsequently Derivative financialinstruments non-cash assetstransferredorliabilitiesassumed,isrecognisedin profitorloss. amount ofthefinancialliabilityextinguishedortransferredtoanotherpartyandconsiderationpaid,includingany discharged orcancelledexpires. On derecognition of afinancialliability, thedifferencebetweencarrying A financialliabilityorapartofitisderecognisedwhen,andonlytheobligationspecifiedincontract Derecognition (continued) asset’s original effectiveinterestrate. between theasset’s carryingamountandthepresentvalueofestimated futurecashflows,discountedatthefinancial In respectofreceivablescarried atamortisedcost,theamountofimpairmentlossrecognised isthedifference as wellobservablechangesinnationalorlocaleconomic conditions thatcorrelatewith defaultonreceivables. collecting payments,anincreaseinthenumberofdelayed payments intheportfoliopastaveragecreditperiod, basis. Objectiveevidenceofimpairmentforaportfolioreceivables couldincludetheGroup’s pastexperienceof Receivables assessednottobeimpairedindividuallyare, inaddition,assessedforimpairmentonacollective it becomingprobablethattheborrowerwillenterbankruptcy orfinancialreorganisation. default ordelinquencyininterestprincipalpayments; significant financialdifficultyoftheissuerorcounterparty; or Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 3. SIGNIFICANT ACCOUNTING POLICIES (continued) Financial Instruments (continued) (e) Impairment of financial assets (continued) The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are recognised in profit or loss as bad debts recovered. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. Property, Plant and Equipment (a) Recognition and measurement Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. 177 The costs of property, plant and equipment comprise their purchase costs and any expenditure that is directly attributable to the acquisition of the assets. (b) Subsequent costs Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred. Surpluses arising from revaluation are credited to the revaluation reserve. Any deficit arising from revaluation is charged against the revaluation reserve to the extent of a previous surplus held in the revaluation reserve for the same asset. In all other cases, a decrease in carrying amount is charged to profit or loss. Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are recognised in profit or loss. On disposal of revalued assets, amounts in revaluation reserve relating to those assets are transferred to retained earnings. Mah Sing Group Berhad 178 Annual Report 2017 Financial Statements 3. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (c) Property, PlantandEquipment(continued) SIGNIFICANT ACCOUNTING POLICIES(continued) (c) (b) (a) ownership tothelessee. Allotherleasesareclassifiedasoperatingleases. Leases areclassifiedasfinanceleaseswheneverthetermsofleasetransfersubstantiallyallrisksandrewards Leases Furniture, fittings,officeandITrelatedequipment Motor vehicles Plant, machineryandfactoryequipment Renovations Buildings Long termleaseholdland concerned. Theprincipalannualratesareasfollows: to their estimated residual values on a straight line basis over the expected usefuleconomic lives of the assets Depreciation ofproperty, plantandequipmentiscalculatedsoastowriteoffthecostsorvaluationsofassets Depreciation andimpairment ownership are classified asfinanceleases. Leases ofproperty, plantand equipmentwheretheGroupassumessubstantiallyall thebenefitsandrisksof Finance leases–theGroupas lessee period. classified asoperatingleases. Payments madeunderoperatingleasesarechargedto profitorlossoverthelease Leases ofassetswhereasignificant portionoftherisksandrewardsownershipareretainedbylessor Operating leases–theGroupaslessee asset andrecognisedonastraight-linebasisoverthelease term. Initial directcostsinnegotiatingandarranginganoperating leaseareaddedtothecarryingamountofleased Rental incomefromoperatingleasesisrecognisedonastraight-linebasisoverthetermof relevant lease. Operating leases–theGroupaslessor A writedownismadeifthecarryingamountexceeds therecoverableamount. indications exist,ananalysisisperformedtoassesswhetherthecarryingamountofassetfullyrecoverable. At theendofeachreportingperiod,Groupassesseswhetherthere isanyindicationofimpairment.Ifsuch differ frompreviousestimates,thechangeswillbeaccountedfor asachangeinanaccountingestimate. The residualvalueandtheusefullifeofanassetarereviewedatendeachreportingperiodand,ifexpectations time withexpectedyearsrangingfrom2to10years. Certain mouldsofaforeignsubsidiarycompanyforspecificprojectsaredepreciatedovertherespectiveprojectlife 8% –33.33% 12.5% –20% 6.25% –25% 3.33% –10% 2% –10% 78 years Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 3. SIGNIFICANT ACCOUNTING POLICIES (continued) Leases (continued) (c) Finance leases – the Group as lessee (continued) Property, plant and equipment under finance leases are capitalised and the capital element of the lease commitments is reflected as lease payables. The capital element of the lease installments is applied to reduce the outstanding obligations whereas the interest element is charged against profit or loss so as to give a constant periodic rate of charge on the remaining balance outstanding at the end of each reporting period. Property, plant and equipment acquired under finance lease are capitalised and depreciated over the same useful economic lives as similar equivalent owned property, plant and equipment. (d) Prepaid lease payments Leasehold land that has an indefinite economic life and title that is not expected to be passed to the Group by the end of the lease period is classified as operating lease. The upfront payments for right to use the leasehold land over a predetermined period are accounted for as prepaid lease payments and are stated at cost less accumulated amortisation. 179 Leasehold land recognised as prepaid lease payments are amortised in equal instalments over the respective lease periods. Investment Properties Investment properties are properties which are owned or held to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. A property under an operating lease is classified and accounted for as an investment property on a property-by-property basis when the Group holds it to earn rentals or for capital appreciation or both. Investment properties are measured initially at cost and subsequently at fair value with any change therein recognised in profit or loss for the period in which they arise. Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in profit or loss in the year of retirement or disposal. Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner occupied, the deemed cost for subsequent accounting is the fair value at the date of change in use. Mah Sing Group Berhad 180 Annual Report 2017 Financial Statements 3. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS cycle. activities have commenced andwherethedevelopment activitiescanbe completed withintheGroup’s normaloperating Land heldfor property development is transferred to propertydevelopmentcosts(under currentassets)whendevelopment applicable variablesellingexpenses. Net realisablevalue is theestimated selling priceintheordinarycourseofbusiness,less thecostsofcompletionand commissions, conversionfeesandotherrelevantlevies. Costs associatedwiththeacquisitionoflandinclude purchase priceoftheland,professionalfees,stampduties, current assetandisstatedatthelowerofcostnetrealisable value. development activitiesarenotexpectedtobecompletedwithin thenormaloperatingcycle. Suchlandisclassifiedasnon- other thanearthwork,infrastructureworkandprofessional fees incurredtoputthelandreadyfordevelopmentorwhere Land held for property development consists of land on which no significant development work has been undertaken Land Held forPropertyDevelopment (b) (a) Intangible Assets SIGNIFICANT ACCOUNTING POLICIES(continued) loss ongoodwillisnotreversedinasubsequentperiod. to the other assets of the CGU pro-rata on the basis of the carrying amount of each assets in the CGU. Impairment The totalimpairmentlossisallocatedfirsttoreducethecarryingamountofgoodwillCGUandthen goodwill relatingtotheentitysold. less coststosellanditsvalueinuse. Gainsandlossesonthedisposal ofanentityincludethecarryingamount goodwill, exceeds the recoverable amount of the CGU. The recoverable amount is the higher of the CGU’s fair value synergies. AnimpairmentlossisrecognisedinprofitorwhenthecarryingamountofCGU, includingthe Goodwill acquiredisallocatedtothecash-generatingunits(“CGU”) expectedtobenefitfromtheacquisition immediately inprofitorloss. contingent liabilities acquired, the difference is recognised as negative goodwill. Negative goodwill is recognised Where theconsiderationislowerthanGroup’s shareofnetfairvaluetheidentifiableassets,liabilitiesand or morefrequentlyifeventschangesincircumstancesindicatethat thecarryingvaluemaybeimpaired. less any accumulated impairment losses.Goodwill is notamortisedbutinstead,itreviewedforimpairmentannually assets, liabilitiesandcontingentacquiredasatthedateofacquisition.Goodwillisinitiallymeasuredcost Goodwill isidentifiedasanyexcess oftheconsiderationpaidoverGroup’s shareoffairvaluetheidentifiable Goodwill onconsolidation immediately toitsrecoverableamount. Where an indication of impairment exists, the carrying amount of theintangibleassetsare assessed and writtendown future economicbenefitsareuncertain. on astraightlinebasisoverperiodof10yearsandtheywillbewrittenoffwhen,intheopinionDirectors, All costsincurredintheacquisitionoflicenseforassemblycertainplasticproductsarecapitalisedandamortised License fee Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 3. SIGNIFICANT ACCOUNTING POLICIES (continued) Property Development Costs Property development costs are determined based on a specific identification basis. Property development costs comprising costs of land, direct materials, direct labour, other direct costs, attributable overheads and payments to subcontractors that meet the definition of inventories are recognised as an asset and are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and applicable variable selling expenses. The asset is subsequently recognised as an expense in profit or loss when or as the control of the asset is transferred to the customer over time or at a point in time. Incremental costs of obtaining a contract with a customer are recognised as assets if the entity expects to recover those costs. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognised as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained. Where revenue recognised in profit or loss exceeds billings to purchasers, the balance is shown as accrued billings under trade and other receivables (within current assets). Where billings to purchasers exceed revenue recognised in profit or loss, the balance is shown as progress billings under trade and other payables (within current liabilities). 181 Inventories (a) Unsold completed properties The cost of unsold properties is stated at the lower of cost and net realisable value. Cost includes the relevant cost of land and development expenditure. (b) Inventories of raw materials, work-in-progress and finished goods Inventories of raw materials, work-in-progress and finished goods relating to the manufacturing activities of the Group are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method. The cost of raw materials comprises the original purchase price plus cost incurred in bringing the inventories to their present location and condition. The costs of finished goods and work-in-progress comprise raw materials, direct labour, other direct costs and an appropriate proportion of production overheads. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and applicable variable selling expenses. Impairment of Non-Financial Assets Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the asset or cash-generating unit (“CGU”) exceeds its recoverable amount. The recoverable amount is the higher of an Mah Sing Group Berhad asset’s or CGU’s fair value less costs to sell and value in use. For the purpose of assessing impairment, the Group estimates the recoverable amount of the CGU to which the assets belongs. Non-financial assets other than goodwill that suffer an impairment are reviewed for possible reversal of the impairment at the end of each reporting period. 182 Annual Report 2017 Financial Statements 3. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS also arisesinthe extremelyrarecasewherethere isaliabilitythatcannotberecognised becauseitcannotbe measured reliably. recognised because itisnotprobablethatanoutflow ofresourceswillberequired tosettletheobligation.A contingentliability non-occurrence ofoneormore uncertainfutureeventsbeyondthecontrolofGroupor apresentobligationthatisnot liability isapossibleobligation thatarisesfrompasteventswhoseexistencewillbeconfirmed bytheoccurrenceor The Group doesnot recognise a contingentliabilitybut discloses its existencein the financial statements. A contingent Contingent Liabilitiesand Assets expenditure expectedtoberequiredsettletheobligation. best estimate. Where theeffectoftimevaluemoneyismaterial,amountaprovisionpresent estimate oftheamountcanbemade. Provisionsarereviewedateachreportingdateandadjustedtoreflectthecurrent probable thatanoutflowofresourcesembodyingeconomic benefitswillberequiredtosettletheobligation,andareliable Provisions arerecognisedwhentheGrouphasapresentlegal orconstructiveobligationasaresultofpasteventanditis Provisions unfavourable totheGroup. DistributiononPerpetual Sukukisrecognisedinequitytheperiodwhichthey arepaid. to anotherpersonorentityexchange financial assetsorliabilitieswithanotherpersonentitythatarepotentially Perpetual Sukukisclassifiedasequitywhentherenocontractualobligationtodelivercashorotherfinancialassets Perpetual Sukuk unfavourable totheGroup. DistributiononPerpetual Securitiesisrecognisedinequitytheperiodwhichtheyarepaid. to anotherpersonorentityexchange financialassetsorliabilitieswithanotherpersonentitythatarepotentially Perpetual Securities is classified asequity when thereis nocontractual obligation todelivercashorotherfinancialassets Perpetual Securities transaction costs.Dividendsonordinarysharesarerecognisedinequity intheperiodwhichtheyaredeclared. Ordinary sharesareequityinstrumentsandrecordedattheproceedsreceived,netofdirectlyattributableincremental Share Capital are readilyconvertibletocashwithinsignificantriskofchangesin value. equivalents areshort-term,highlyliquidinvestmentswithmaturitiesofthreemonthsorlessfromthedateacquisitionand The GroupandtheCompanyadoptindirectmethodinpreparationofstatementscashflows.Cash Cash andEquivalents reversal istreatedasarevaluationincrease. A reversalisrecognisedinprofitorloss,unlessitreversesanimpairmentlossonrevaluedassets,whichcase, the that wouldhavebeendetermined,netofdepreciationoramortisation,ifnoimpairmentlosshadrecognised. An impairment loss is only reversed to the extent that the asset’s carrying amount does not exceed the carrying amount revaluation surplus.Impairmentlossesongoodwillarenotreversed. The impairmentlossischargedtoprofitorunlessitreversesapreviousrevaluationinwhichcasethe Impairment ofNon-FinancialAssets(continued) SIGNIFICANT ACCOUNTING POLICIES(continued) Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 3. SIGNIFICANT ACCOUNTING POLICIES (continued) Contingent Liabilities and Contingent Assets (continued) A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but discloses its existence where inflows of economic benefits are probable, but not virtually certain. Segment Reporting An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenue and expenses that are related to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. 4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (a) Critical judgements in applying the Group’s accounting policies The management is of the opinion that there are no instances of application of critical judgements in applying the 183 Group’s accounting policies which are expected to have a significant effect on the amounts recognised in the financial statements. (b) Key sources of estimation uncertainty Management believes that there are no key assumptions made concerning the future, and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year other than as disclosed below: (i) Property development revenue Revenue is recognised over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. The progress towards complete satisfaction of the performance obligation is measured based on the Group’s efforts or inputs to the satisfaction of the performance obligation (e.g. by reference to the property development costs incurred to date as a percentage of the estimated total costs of development of the contract). In making the estimate, management relies on opinion/service of experts, past experience and a continuous monitoring mechanism. (ii) Deferred tax assets Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which all deductible Mah Sing Group Berhad temporary differences, unused tax losses and unused tax credits can be utilised. Management judgement is required in determining the amount of deferred tax assets that can be recognised, based on the assessment of the probability of the future taxable profits. The carrying amount of deferred tax assets is disclosed in Note 33. 184 Annual Report 2017 Financial Statements 4. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS 5. REVENUE Others Rental income Interest incomefrom: Sales ofcompletedproperties Property developmentrevenue Dividend incomefromsubsidiarycompanies Sales ofgoods Sales ofland (b) CRITICAL ACCOUNTING JUDGEMENTS ANDKEYSOURCESOFESTIMATION UNCERTAINTY (continued) - - - investment inshort-termfunds bank deposits advances tosubsidiarycompanies (iii) Key sourcesofestimationuncertainty(continued) Valuation of investment properties properties investment of Valuation The carryingamountofinvestmentpropertiesisdisclosedinNote16. determining thefairvalueofGroup’s investmentproperties. The managementbelievesthatthechosenvaluationtechniquesandassumptionsusedareappropriatein until eitherthefairvaluebecomesreliablydeterminableorwhenconstructioniscompleted,whicheverearlier. their fairvaluesarenotreliablydeterminable. Investmentpropertiesunderconstructionaremeasuredatcost tenure, location,developmentconceptandsize, except forinvestmentpropertiesunderconstructioninwhich transactions and asking prices of similar properties of nearby location and where necessary, adjusting for The Groupdeterminesthefairvalueofitsinvestmentpropertiesbyreferencetosellingpricesrecent 2,915,791 2,390,524 110,437 337,266 RM’000 16,854 50,886 2,600 2,579 4,645 2017 TheGroup - - 2,957,617 2,539,828 313,023 RM’000 11,046 84,230 2,726 6,044 2016 720 - - - 288,505 114,156 152,850 RM’000 16,854 4,645 TheCompany 2017 ------514,250 398,900 RM’000 98,260 11,046 6,044 2016 ------Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 6. COST OF SALES The Group 2017 2016 RM’000 RM’000 Property development costs 1,752,199 1,877,694 Cost of completed properties sold 82,140 59,800 Cost of land sold 23,408 - Cost of goods sold 286,103 270,229 Maintenance fees 7,583 3,660 Others 2,667 769 2,154,100 2,212,152 Included in cost of goods sold are the followings: Raw materials used 229,238 218,049 Changes in inventories of work-in-progress and finished goods 1,384 (2,068) 230,622 215,981 185 Mah Sing Group Berhad 186 Annual Report 2017 Financial Statements 7. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS Other depositwrittenoff Loss onrepurchaseofredeemable Lease rentalexpense Foreign exchange loss: Fair valueadjustmentoninvestmentin Land heldforpropertydevelopment Impairment ofinvestmentinsubsidiary Impairment ofinventories Impairment ofintangibleassets Deposit forlandacquisitionwrittenoff Bad debtswrittenoff financial year Others: Amortisation ofprepaidleasepayments Allowance fordoubtfuldebts: Profit beforetaxisarrivedatafter financial year Statutory: Auditors’ remuneration: PROFIT BEFORETAX convertible securedbonds - realised short-term funds - unrealised written off companies - - - - charging: - - under/(over) provisioninprior current financialyear subsidiary companies trade andotherreceivables under/(over) provisioninprior current financialyear 20(a) Note 17 15 22 RM’000 1,511 2017 288 467 800 651 602 570 TheGroup 11 19 29 99 1 8 ------RM’000 27,141 2,129 2016 187 109 390 590 541 (13) 11 80 15 29 (6) ------RM’000 2,887 7,053 TheCompany 2017 45 5 ------RM’000 27,141 45,487 8,200 2016 109 45 5 ------Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 7. PROFIT BEFORE TAX (continued) The Group The Company 2017 2016 2017 2016 Note RM’000 RM’000 RM’000 RM’000 Profit before tax is arrived at after charging (continued): Loss of redemption of investment in short-term funds 176 - 176 - Property development costs written off 20(b) 321 - - - Property, plant and equipment: - depreciation 14 19,896 17,376 120 130 - loss on disposal - 9 - 9 - written off 14 2,621 11 - 3 Provision for operating lease commitments 1,399 1,173 - - Rental of premises 4,069 4,694 - - Waiver on late payment charges 157 1,681 - - 187 Write down of inventories 103 224 - - And crediting: Foreign exchange gain: - realised 35 603 - - - unrealised 595 2,071 - - Fair value adjustment on investment in short-term funds 24 - 24 - Forfeiture income 2,968 4,661 - - Gain on disposal of a subsidiary company 7,940 - 4,925 - Gain on changes in fair value of investment properties 16 - 5,000 - - Gain on disposal of property, plant and equipment 277 474 - - Gain on redemption of investment in short-term funds - 577 - 577 Lease rental income* 1,404 1,119 - - Reversal of allowance for doubtful debts: - trade and other receivables 364 7,554 - - Mah Sing Group Berhad - subsidiary companies - - 1,790 - Reversal of write down of inventories - 685 - - Reversal of impairment of inventories 38 - - - * Excluding those classified as revenue in Note 5. 188 Annual Report 2017 Financial Statements 9. 8. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS FINANCE INCOME Included instaffcostsaredirectors’ remunerationoftheGroupandCompanyasfurtherdisclosedinNote48. Other staffrelatedexpenses Provision forpost-employmentbenefits Short-term accumulatingcompensated Employees ProvidentFundandsocialsecurity Wages, salariesandbonus Amortised costadjustments: Interest incomefrom: STAFF COSTS (Note 32) - - absences: costs - - - - - overprovision inpriorfinancialyear current financialyear hire purchase trade andotherreceivables trade andotherpayables project accounts bank deposits 156,512 133,364 RM’000 15,242 (1,053) 6,304 1,438 1,217 2017 TheGroup 146,464 125,774 RM’000 14,317 5,074 1,236 1,059 2016 (996) RM’000 RM’000 12,872 1,746 1,548 9,396 3,363 TheCompany 2017 2017 159 TheGroup (15) 28 26 50 63 - - RM’000 RM’000 10,980 1,580 1,438 1,249 6,153 3,543 2016 2016 126 (12) 13 15 35 - - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 10. FINANCE COSTS The Group The Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Interest expense on: - advances from subsidiary companies - - 3,518 10,981 - bank overdrafts 70 37 - - - finance lease and hire purchase 367 510 - - - others 1,290 839 89 107 - redeemable convertible secured bonds (Note 29) - 4,466 - 4,466 - term loans 40,405 54,994 - 104 Amortised cost adjustments: - trade and other receivables 2,043 1,649 - - - trade and other payables 8,952 - - - 53,127 62,495 3,607 15,658 189 Less: Interest expense capitalised in land held for property development (Note 20(a)) (17,909) (38,189) - - Less: Interest expense capitalised in property development costs (Note 20(b)) (18,084) (18,324) - - 17,134 5,982 3,607 15,658 Included in the cost of sales is interest expense in property development costs recognised in profit or loss amounting to RM46,602,537 (2016: RM65,517,664). Mah Sing Group Berhad 190 Annual Report 2017 Financial Statements 11. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS Income taxexpense assessable profitfortheyear. Income taxiscalculatedattheMalaysianstatutoryraterangingfrom20%to24%(2016:24%)ofestimated Deferred tax(Note33): Estimated incometaxpayable: INCOME TAX EXPENSE (Under)/Overprovision inpriorfinancialyears Current financialyear (Over)/Underprovision inpriorfinancialyears Current financialyear 113,122 138,820 139,944 (25,698) (21,446) RM’000 (4,252) (1,124) 2017 TheGroup 122,627 137,642 143,735 (15,015) (18,652) RM’000 (6,093) 3,637 2016 RM’000 17,388 17,414 16,758 The Company 2017 656 (26) (26) - RM’000 11,693 12,113 12,303 2016 (420) (420) (190) - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 11. INCOME TAX EXPENSE (continued) A reconciliation of income tax expense applicable to profit before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows: The Group The Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Profit before tax 472,283 482,939 278,206 415,172 Tax at statutory tax rate of 24% 113,348 115,905 66,769 99,641 Tax effects of: Income exempted from tax (20,468) (19,259) (40,812) (98,635) Non-taxable income (3,995) - (1,182) - Expenses not deductible for tax purposes 12,445 22,153 2,814 18,373 Effect of Real Property Gains Tax - (950) - - Effect of changes in tax rate (6,129) - - - 191 Perpetual Sukuk distribution (8,735) (7,496) (8,735) (7,496) Perpetual Securities distribution (2,122) - (2,122) - Utilisation of deferred tax assets not previously recognised (4,180) (1,802) - - Deferred tax assets not recognised 39,598 18,030 - - Reinvestment allowance utilised (1,264) (1,498) - - (Over)/Underprovision of estimated tax payable in prior financial years (1,124) (6,093) 656 (190) (Under)/Overprovision of deferred tax in prior financial years (4,252) 3,637 - - Income tax expense 113,122 122,627 17,388 11,693 Mah Sing Group Berhad 192 Annual Report 2017 Financial Statements 12. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (b) Diluted (a) Basic EARNINGS PERORDINARY SHARE would havebeenissuedatfairvalue. exercise oftheremainingwarrantsandconversionbonds,adjustedfornumbersuchordinarysharesthat holders oftheCompanyforfinancialyearbyweightedaveragenumberordinarysharesassumingfull The dilutedearningspersharehasbeencalculatedbydividingtheGroup’s netprofitattributabletoordinaryequity Net profitattributabletoordinaryequityholdersoftheCompany(RM’000) Basic earningsperordinaryshare(sen) Weighted averagenumberofordinarysharesinissue(Unit’000) Distribution paidtoholdersofPerpetual Securities(RM’000) Profit attributabletoequityholdersoftheCompany(RM’000) Distribution paidtoholdersofPerpetual Sukuk(RM’000) Net profitattributabletoordinaryequityholdersoftheCompany(RM’000) * Diluted earningsperordinaryshare(sen) Adjusted weightedaveragenumberofordinaryshares(Unit’000) Weighted averagenumberofordinarysharesdeemedissuedatno Weighted averagenumberofordinarysharesinissue(Unit’000) to ordinaryequityholdersoftheCompanydividedbyweighted averagenumberofordinarysharesinissue. The basicearningsperordinaryshareforthefinancialyearhasbeencalculatedbasedonnetprofitattributable - consideration (Unit’000) - Warrant B2013/2018 Warrant C2015/2020* accordingly isexcluded fromthedilutedearningspershare computationabove. The effectsofpotentialordinarysharesarisingfromtheexercise of Warrant C2015/2020isanti-dilutiveand 2,413,637 2,422,550 2,413,637 302,789 361,895 302,789 (22,486) (36,620) 12.54 12.50 8,913 2017 2017 TheGroup TheGroup - 2,409,419 2,411,760 2,409,419 324,536 361,357 324,536 (36,821) 13.47 13.46 2,341 2016 2016 - - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 13. DIVIDEND PAID/PROPOSED The Group and The Company 2017 2016 RM’000 RM’000 Recognised during the financial year: Dividends on ordinary shares - First and final single-tier dividend of 6.5 sen per ordinary share, paid on 14 September 2017 157,152 - - First and final single-tier dividend of 6.5 sen per ordinary share, paid on 15 September 2016 - 156,612 157,152 156,612 The Directors have proposed a first and final single-tier dividend of 6.5 sen per ordinary share in respect of the current financial year. The proposed first and final dividend is subject to the approval of the shareholders at the forthcoming Annual General Meeting of the Company and has not been included as a liability in the financial statements for the current financial year. Such dividend, when approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings during the financial year ending 31 December 2018. 193 Mah Sing Group Berhad 194 Annual Report 2017 Financial Statements FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS 14. PROPERTY, PLANT AND EQUIPMENT Furniture, Plant, fittings, Long term machinery office and leasehold and factory Motor IT related land Buildings Renovations equipment vehicles equipment Total The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Cost At 1 January 2016 - 50,345 11,827 183,596 16,266 22,627 284,661 Currency translation differences - 1,497 - 4,842 109 150 6,598 Additions 19,607 2,563 648 12,330 1,235 1,572 37,955 Transferred from property development costs (Note 20(b)) - 5,657 - - - - 5,657 Disposals - - - (5,640) (1,789) (192) (7,621) Write offs - - - (7) - (136) (143) At 31 December 2016/1 January 2017 19,607 60,062 12,475 195,121 15,821 24,021 327,107 Currency translation differences - (2,381) - (7,786) (174) (241) (10,582) Additions 1,257 949 10,731 18,168 1,804 7,431 40,340 Arising from acquisition of subsidiary companies - - 18 - - 40 58 Transferred from investment properties (Note 16) - 3,936 - - - - 3,936 Disposals - - (41) (945) (3,396) (719) (5,101) Write offs - - (7,402) (499) - (1,766) (9,667) Disposal of a subsidiary company - - - - - (21) (21) At 31 December 2017 20,864 62,566 15,781 204,059 14,055 28,745 346,070 Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 (5) 11 41 (132) Total 4,720 (7,599) (4,492) (7,046) (7,654) 17,376 19,896 RM’000 175,082 137,619 190,157 189,447 155,872 - 7 (5) 135 (170) (130) (233) (220) 2,285 7,306 2,452 (1,616) fittings, 14,595 17,100 16,715 11,645 RM’000 Furniture, IT related office and equipment - - - - - 107 (170) 2,111 3,805 Motor 3,817 1,788 (1,789) (3,396) 11,587 10,238 12,016 RM’000 vehicles - - (2) 41 (843) (449) Plant, 3,733 9,896 (5,640) (6,022) 70,048 74,667 11,633 RM’000 117,045 129,351 125,032 machinery equipment and factory ------4 (20) 195 5,091 1,112 6,272 2,821 6,203 1,615 (4,981) 12,960 RM’000 Renovations ------745 1,972 1,925 (1,242) 26,764 30,581 30,164 29,481 32,402 RM’000 Buildings ------483 483 land 19,607 20,381 RM’000 leasehold Long term Long Mah Sing Group Berhad 1 January 2017/31 December 2017 PROPERTY, PLANT AND EQUIPMENT ( continued ) PROPERTY, The Group Arising from acquisition of subsidiary companies Accumulated depreciation 1 January 2016 At Disposals Currency translation differences Write offs Write Charge for the financial year (Note 7) Disposal of a subsidiary company Disposals At 31 December 2017 At Write offs Write Accumulated impairment loss 1 January 2016/31 December 2016/ At At 31 December 2016/1 January 2017 At Net book values 31 December 2016 At Currency translation differences At 31 December 2017 At Charge for the financial year (Note 7) 14. 196 Annual Report 2017 Financial Statements 14. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS At 31December 2017 At 31December 2016 Net bookvalues At 31December2017 Charge forthefinancialyear Currency translationdifferences At 31December2016/1January2017 Charge forthefinancialyear Currency translationdifferences At 1January2016 Accumulated depreciation At 31December2017 Transferred frominvestmentproperties(Note16) Additions Currency translationdifferences At 31December2016/1January2017 Transferred frompropertydevelopmentcosts(Note20(b)) Additions Currency translationdifferences At 1January2016 Cost The Group Analysis ofbuildings PROPERTY, PLANTANDEQUIPMENT(continued) Leasehold RM’000 12,197 24,066 23,784 36,263 38,574 14,790 21,392 34,898 (1,242) (2,381) 1,524 1,647 2,179 1,497 745 70 - - Freehold RM’000 20,205 26,303 21,488 15,791 15,447 6,098 5,697 3,936 5,372 5,657 325 401 879 384 - - - - RM’000 32,402 30,164 29,481 62,566 60,062 30,581 26,764 50,345 (1,242) (2,381) 1,925 3,936 1,972 5,657 2,563 1,497 Total 949 745 Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 14. PROPERTY, PLANT AND EQUIPMENT (continued) Furniture Office and fittings equipment Total The Company RM’000 RM’000 RM’000 Cost At 1 January 2016 103 1,443 1,546 Disposals - (50) (50) Write off - (6) (6) At 31 December 2016/1 January 2017 103 1,387 1,490 Additions - 21 21 At 31 December 2017 103 1,408 1,511 Accumulated depreciation At 1 January 2016 55 1,011 1,066 Charge for the financial year 10 120 130 Disposals - (41) (41) 197 Write off - (3) (3) At 31 December 2016/1 January 2017 65 1,087 1,152 Charge for the financial year 8 112 120 At 31 December 2017 73 1,199 1,272 Net book values At 31 December 2016 38 300 338 At 31 December 2017 30 209 239 Mah Sing Group Berhad 198 Annual Report 2017 Financial Statements 14. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS Plant, machineryandfactoryequipment Long termleaseholdland Leasehold buildings Freehold buildings Net bookvalues Plant, machineryandfactoryequipment Motor vehicles Net bookvalues respectively areasfollows: institutions as security for termloans,short-term borrowings andbankoverdraftsasdisclosedinNotes30,3536, At theendofreportingperiod,netbookvaluesproperty, plantandequipmentoftheGroup pledgedtofinancial Assets withrestrictedtitle PROPERTY, PLANTANDEQUIPMENT(continued) lease andhirepurchasearrangementsareasfollows: At theendofreportingperiod,netbookvaluesproperty, plantandequipmentoftheGroupheldunderfinance Assets heldunderfinanceleaseandhirepurchasearrangements RM’000 RM’000 35,314 20,382 11,504 3,428 6,969 4,354 2,615 2017 2017 TheGroup The Group - RM’000 RM’000 37,398 19,607 2016 8,658 5,579 3,554 7,794 5,269 2,525 2016 Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 15. PREPAID LEASE PAYMENTS The Group 2017 2016 RM’000 RM’000 Leasehold land Cost At 1 January 16,059 15,242 Currency translation differences (1,301) 817 At 31 December 14,758 16,059 Accumulated amortisation At 1 January 9,218 8,242 Amortisation for the financial year (Note 7) 602 590 Currency translation differences (645) 386 At 31 December 9,175 9,218 199 Net book values At 31 December 5,583 6,841 The unexpired portions of the leasehold land as at 31 December 2017 are within the range of 1.25 to 20 years (2016: 3 to 21 years). Certain parcels of leasehold land of the Group with a carrying value of RM5,418,545 (2016: RM1,248,346) are pledged to financial institutions as security for term loans, short-term borrowings and bank overdrafts as disclosed in Notes 30, 35 and 36, respectively. Mah Sing Group Berhad 200 Annual Report 2017 Financial Statements 16. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS Direct operatingexpenses Rental income At cost: At fairvalue: At 31December Transferred toproperty, plantandequipment(Note14) Gain onchangesinfairvalue(Note7) At 1January INVESTMENT PROPERTIES Perpetual Securities ProgrammeasdisclosedinNote28. Investment propertiesoftheGroupamountingtoRM192,566,090 (2016:RMNil)arepledgedassecuritypursuanttothe Included intheaboveare: periods are1to3years(2016:years). period of1to3years(2016:years).Subsequentrenewalsarenegotiatedwiththelesseeandaveragerenewal Leasehold commercialpropertiesareleasedtothirdparties.Eachoftheleasecontainsaninitialnon-cancellable Investment propertiesunderconstruction Leasehold commercialproperties Freehold commercialproperties 153,313 150,000 195,880 199,816 195,880 RM’000 RM’000 RM’000 42,567 (7,583) (3,936) 2,579 3,313 2017 2017 2017 The Group The Group The Group - 157,249 150,000 199,816 194,816 199,816 RM’000 RM’000 RM’000 42,567 (3,660) 2,726 7,249 5,000 2016 2016 2016 - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 16. INVESTMENT PROPERTIES (continued) Investment properties of the Group are measured at fair value except for investment properties under construction which are measured at cost until either the fair value becomes reliably determinable or when construction is completed, whichever is earlier. Fair value information The table below analyses fair value measurement of investment properties which are categorised into Levels 1 to 3 as disclosed in Note 3. Level 1 Level 2 Level 3 Total RM’000 RM’000 RM’000 RM’000 At 31 December 2016 - 7,249 150,000 157,249 At 31 December 2017 - 3,313 150,000 153,313 The fair value of the Group’s freehold commercial properties was determined in reference to the selling price of recent transactions of similar properties of nearby location. The fair values of freehold commercial properties fall under Level 2 of the fair value hierarchy. 201 The fair value of the Group’s leasehold investment properties as at 31 December 2017 has been arrived based on the report and valuation dated 13 January 2017 prepared by an independent valuer. The fair value of these assets are within Level 3 of the fair value hierarchy using significant unobservable inputs. The directors are of the opinion that the said valuation remains to be appropriate for the current financial year as the Group revalues its investment properties whenever fair value of the said assets is expected to differ substantially from the carrying amounts. Mah Sing Group Berhad 202 Annual Report 2017 Financial Statements 16. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS to differsubstantiallyfromthecarryingamounts. the currentfinancialyearasGrouprevaluesitsinvestment propertieswheneverfairvalueofthesaidassetsisexpected category ofpropertiesbeingvalued.Thedirectorsarethe opinionthatthesaidvaluationremainstobeappropriatefor valuers notrelatedtotheGroup, havingappropriateprofessionalqualificationsandrecentexperienceinthelocation In thepreviousfinancialyear, thefairvalueofinvestmentpropertieswasdeterminedbyexternal,independentproperty Valuation processesappliedbytheGroup this valuationapproachispricepersquarefeetand car park ofcomparableproperties. generally includedinLevel 3fair valuehierarchyduetotheadjustmentsmentionedabove. Themost significantinputinto development conceptandsize. Fairvalueofinvestmentpropertiesderived usingdirectcomparisonmethodhavebeen active market forsimilarpropertiesinthesamelocationandcondition andwherenecessary, adjustingfortenure, location, Under thedirectcomparisonmethod,aproperty’s fairvalueisestimatedbasedoncomparisonofcurrentpricesinan Direct Comparisonmethod Commercial properties properties Investment At 31December2017 Gain onchangesinfairvaluerecognisedprofitorloss At 31December2016/1January2017 Gain onchangesinfairvaluerecognisedprofitorloss At 1January2016 The Group Fair valuereconciliationofinvestmentpropertiesmeasuredatLevel 3isasfollow: Fair valueinformation(continued) INVESTMENT PROPERTIES (continued) Property category follows: Description ofvaluationtechniqueusedandkey inputstovaluation oninvestmentpropertiesmeasuredatLevel 3areas Comparison method Valuation technique Market valuepercarpark Market valuepersquarefeet Key inputs commercial RM28,000 properties Leasehold 150,000 150,000 145,000 RM’000 RM567 Range 5,000 - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 16. INVESTMENT PROPERTIES (continued) Policy on transfer between levels The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer. Transfer between Level 1 and 2 fair values There was no transfer between Level 1 and 2 fair values during the financial year. 17. INTANGIBLE ASSETS License fees Goodwill Total The Group RM’000 RM’000 RM’000 At 31 December 2016 Cost 82 12,968 13,050 Accumulated amortisation (82) - (82) Accumulated impairment 203 - At 1 January 2016 - (6,783) (6,783) - Charge for the financial year (Note 7) - (390) (390) - At 31 December 2016 - (7,173) (7,173) Carrying amounts - 5,795 5,795 At 31 December 2017 Cost 82 12,968 13,050 Accumulated amortisation (82) - (82) Accumulated impairment - At 1 January 2017 - (7,173) (7,173) - Charge for the financial year (Note 7) - (19) (19) - At 31 December 2017 - (7,192) (7,192) Carrying amounts - 5,776 5,776 Goodwill arose in the previous financial year relates to a premium paid over the fair value of identifiable net assets, at the acquisition date, of a subsidiary company due to the expected high revenue and profitability growth following development of the freehold land owned by the subsidiary company into a planned mix development township. The impairment is provided using the value in use calculation by estimating the future cash flows reflected by the remaining proportion of the gross development value of unrecognised revenue from the related property development project from Mah Sing Group Berhad which the goodwill arises. 204 Annual Report 2017 Financial Statements 18. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS Capitol Avenue DevelopmentSdn.Bhd. Subsidiary companiesofMahSingGroupBerhad Less: Accumulatedimpairmentlosses Unquoted shares,atcost Dsara SentralSdn.Bhd. Convention CityDevelopmentSdn.Bhd. Name ofcompany INVESTMENT INSUBSIDIARY COMPANIES Details ofthesubsidiarycompaniesareasfollows: Elite Park DevelopmentSdn.Bhd. Enchanting HeightsSdn.Bhd. Enchanting ViewDevelopmentSdn.Bhd. Enrich PropertyDevelopmentSdn.Bhd. Fusion HeightsDevelopmentSdn.Bhd. Garden VistaDevelopmentSdn.Bhd. Gentali MotorCorpn.Sdn.Bhd. Golden Venice Development(MM2H) Grand PrestigeDevelopmentSdn.Bhd. Icon CityDevelopmentSdn.Bhd. Jastamax Sdn.Bhd. Klassik Tropika DevelopmentSdn.Bhd. Legend GrandDevelopmentSdn.Bhd. Konsortium Lingkaran Lembah KintaSdn.Bhd. (Note 40) Sdn. Bhd. incorporation Country of Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia interest andvotingpower Proportion ofownership 2017 60.5 100 100 100 100 100 100 100 100 100 100 100 100 100 100 held bytheGroup 51 % - 2016 60.5 100 100 100 100 100 100 100 100 100 100 100 100 100 100 51 51 % 196,819 221,126 (24,307) RM’000 Property development Property development Principal activities Property development Property development Property development Property development Property development Dormant Dormant Inactive Promote andmarket Property development Property developmentand Property development Property development Dormant Property development 2017 The Company provide relatedservice Home Programmeand Malaysia Mysecond property investment 199,338 220,758 (21,420) RM’000 2016 Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 18. INVESTMENT IN SUBSIDIARY COMPANIES (continued) Proportion of ownership Country of interest and voting power Name of company incorporation held by the Group Principal activities 2017 2016 % % Subsidiary companies of Mah Sing Group Berhad Liberty Property Management Sdn. Bhd. Malaysia 100 100 Property management Loyal Sierra Development Sdn. Bhd. Malaysia 100 100 Property development Mah Sing Development Sdn. Bhd. Malaysia 100 100 Property development Mah Sing Enterprise Sdn. Bhd. Malaysia 100 100 Inactive Mah Sing International (HK) Limited* Hong Kong 100 100 Investment holding Mah Sing International Ltd.^ British Virgin 100 100 Investment holding Islands Mah Sing Investment Singapore Pte Ltd.* Singapore 100 100 Inactive Mah Sing Plastics Industries Sendirian Berhad Malaysia 100 100 Manufacture of plastic and trading other related 205 products Mah Sing Properties Sdn. Bhd. Malaysia 100 100 Property development and investment holding Mah Sing Trading Sdn. Bhd. Malaysia 100 100 Trading of building materials Mah Sing Utilities Sdn. Bhd. Malaysia 100 100 Provision of utilities and management services Major Land Development Sdn. Bhd. Malaysia 100 100 Property development Marvellous Vantage Sdn. Bhd. Malaysia 100 100 Property investment Maxim Heights Sdn. Bhd. Malaysia 100 100 Property development Mediterranean View Development Sdn. Bhd. Malaysia 100 100 Property development Meridin Hospitality Sdn. Bhd. Malaysia 100 100 Provision of hospitality management services Mont Meridian Development Sdn. Bhd. Malaysia 100 100 Dormant Multi Synergy Group Sdn. Bhd. Malaysia 100 100 Property development Myvilla Development Sdn. Bhd. Malaysia 100 100 Property development MS Lakecity Sdn. Bhd. Malaysia 100 100 Property development MSGB (Australia) Sdn. Bhd. Malaysia 100 100 Investment holding Nature Legend Development Sdn. Bhd. Malaysia 100 100 Property development and Mah Sing Group Berhad investment holding Nova Century Development Sdn. Bhd. Malaysia 100 100 Property development 206 Annual Report 2017 Financial Statements 18. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS Nova IndahDevelopmentSdn.Bhd. Subsidiary companiesofMahSingGroupBerhad Nova Legend DevelopmentSdn.Bhd. Name ofcompany INVESTMENT INSUBSIDIARY COMPANIES (continued) Oasis GardenDevelopmentSdn.Bhd. Peninsular ConnectionSdn.Bhd. Pleasant NetworkSdn.Bhd. Meridin EastSdn.Bhd. Semai MerantiSdn.Bhd. Star Residence Sdn.Bhd. Southville CitySdn.Bhd. Supreme SpringsSdn.Bhd. Superior FocusSdn.Bhd. Suria Lagenda Development Sdn.Bhd. Tanda KlasikDevelopmentSdn.Bhd. Tropika IstimewaDevelopmentSdn.Bhd. Uptrend HousingDevelopmentSdn.Bhd. Venice ViewDevelopmentSdn.Bhd. Vienna HomeSdn.Bhd. Vienna ViewDevelopmentSdn.Bhd. Vital Routes Sdn.Bhd. Vital Roles Sdn.Bhd. Mah SingInternationalLimited@(Note41.1) Acacia SpringsManagementSdn.Bhd. Subsidiary companiesofMahSingPropertiesSdnBhd Mestika BistariSdn.Bhd. Mestika Kenangan Sdn.Bhd. MS IconPropertyServicesSdn. Bhd. Prima Peninsular DevelopmentSdn.Bhd. Quantum Noble DevelopmentSdn.Bhd. incorporation Country of Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Cayman Islands interest andvotingpower Proportion ofownership 2017 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 held bytheGroup 100 100 100 80 90 % 2016 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 80 90 % - Project management Principal activities Property developmentand Property development Inactive Inactive Property development Property development Property development Property development Inactive Property development Dormant Dormant Property development Property development Property development Property development Property development Inactive Investment holding Investment holding Property management Property developmentand Property management Property management Property management Property management services investment holding property investment Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 18. INVESTMENT IN SUBSIDIARY COMPANIES (continued) Proportion of ownership Country of interest and voting power Name of company incorporation held by the Group Principal activities 2017 2016 % % Subsidiary company of Pleasant Network Sdn. Bhd. Vican Technology Sdn. Bhd.** Malaysia 68 68 Inactive Subsidiary company of Vican Technology Sdn. Bhd. Vican Electronics Sdn. Bhd.# Malaysia 68 68 Inactive Subsidiary company of Vital Routes Sdn. Bhd. P.T. Mah Sing Indonesia* Indonesia 65 65 Manufacture of plastic moulded products 207 Subsidiary companies of Mah Sing International Ltd Mah Sing Vietnam Ltd. (Note 38) British Virgin - 100 Dormant Islands Mah Sing Vina Ltd. (Note 38) British Virgin - 100 Dormant Islands Subsidiary company of Mah Sing Plastics Industries Sendirian Berhad Kenwira Sdn. Bhd. Malaysia 100 100 Inactive Subsidiary company of MSGB (Australia) Sdn. Bhd. MSGB Australia Pty Ltd.* Australia 100 100 Dormant Subsidiary company of Nova Legend Development Sdn. Bhd. Cosmowealth Housing Development Malaysia 78 - Property development Sdn. Bhd. (Note 39.1) Subsidiary company of Nature Legend Development Sdn. Bhd. Cordova Land Sdn. Bhd. (Note 39.2) Malaysia 100 - Property development Mah Sing Group Berhad 208 Annual Report 2017 Financial Statements 18. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS Mah SingHoldingsLimited^(Note41.2) Subsidiary companyofMahSingInternationalLimited ^ @ # ** * Name ofcompany INVESTMENT INSUBSIDIARY COMPANIES (continued) Group. This subsidiarycompanyhasnotbeenconsolidatedasitsimmediateholdingwasdeconsolidatedfromthe audit isrequiredunderBVI BusinessCompaniesAct2014. The companyisnotauditedbyDeloittePLT. AsthecompanyisincorporatedinBritishVirginIslands,nostatutory required underCompaniesLaw of CaymanIslands. The companyisnotauditedbyDeloittePLT. AsthecompanyisincorporatedinCaymanIslands,nostatutoryaudit financial year2000.Thecostofinvestmentinthissubsidiarycompany hadbeenfullyimpaired. This subsidiarycompanyisunderacourtwinding-uporderandwasdeconsolidatedfromtheGroupresultssince Audited byotherfirmsofauditors. incorporation British Virgin Country of Islands interest andvotingpower Proportion ofownership 2017 100 held bytheGroup % 2016 % - Dormant Principal activities Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 18. INVESTMENT IN SUBSIDIARY COMPANIES (continued) Composition of the Group Information about the composition of the Group at the end of the reporting period is as follows: Number of wholly-owned Principal activities Country of incorporation subsidiary companies 2017 2016 Dormant Australia 1 1 Dormant British Virgin Islands 1 2 Dormant Malaysia 5 5 Investment holding Cayman Islands 1 - Investment holding British Virgin Islands 1 1 Investment holding Hong Kong 1 1 Investment holding Malaysia 2 2 Inactive Malaysia 4 4 Inactive Singapore 1 1 209 Manufacture of plastic and trading other related products Malaysia 1 1 Promote and market Malaysia Mysecond Home Programme Malaysia 1 1 and provide related services Property development Malaysia 32 33 Property development and investment holding Malaysia 3 1 Property development and property investment Malaysia 2 2 Property investment Malaysia 1 1 Property management Malaysia 6 6 Provision of hospitality management services Malaysia 1 1 Provision of utilities and management services Malaysia 1 1 Trading of building materials Malaysia 1 1 66 65 Mah Sing Group Berhad 210 Annual Report 2017 Financial Statements 18. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS Total comprehensiveincome/(loss)forthefinancial year Carrying amountsofNCI(RM’000) NCI percentageofownershipinterestandvoting At 31December2016 The Group’s subsidiarycompaniesthathavematerialnon-controllinginterests(“NCI”)areasfollows: Non-controlling interestsinsubsidiarycompanies ^ Property development Manufacture ofplasticmouldedproducts Inactive ^ Dormant NCI percentageofownershipinterestandvoting At 31December2017 Total comprehensivelossforthefinancialyear attributableto Carrying amountsofNCI(RM’000) Principal activities Composition oftheGroup(continued) INVESTMENT INSUBSIDIARY COMPANIES (continued) attributable toNCI(RM’000) NCI (RM’000) Vican ElectronicsSdnBhdwhichweredeconsolidatedfromtheGroup sincefinancialyear2000. Included intheinactivenonwholly-ownedsubsidiarycompaniesareinvestmentsVicanTechnology SdnBhdand P.T. MahSing incorporation Country of Indonesia Indonesia Malaysia Malaysia Malaysia (2,315) 6,587 8,902 35% 35% 210 individually companies 10% -49% immaterial 10% -49% subsidiary (1,240) Number ofnonwholly- Other (158) (667) (886) 2017 owned subsidiary 8 1 1 5 1 companies 2016 (3,555) 6,429 8,016 8 1 1 5 1 Total (457) Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 18. INVESTMENT IN SUBSIDIARY COMPANIES (continued) Non-controlling interests in subsidiary companies (continued) Summarised financial information of the Group’s subsidiary company that has material non-controlling interests is set out below. The summarised financial information below represents amounts before intra-group eliminations. P.T. Mah Sing Indonesia 2017 2016 RM’000 RM’000 Non-current assets 30,016 34,973 Current assets 35,836 30,438 Non-current liabilities (13,505) (11,370) Current liabilities (33,527) (28,604) Net assets 18,820 25,437 Revenue 85,845 90,474 Loss for the financial year (4,272) (670) 211 Total comprehensive loss for the financial year (4,225) (670) Cash flows (used in)/generated from operating activities (4,896) 5,105 Cash flows used in investing activities (1,279) (254) Cash flows generated from/(used in) financing activities 6,034 (4,693) Net (decrease)/increase in cash and cash equivalents (141) 158 Dividends paid to NCI - - Mah Sing Group Berhad 212 Annual Report 2017 Financial Statements 19. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS 20. Less: Prestige GreenerySdnBhd* follows: company exceeded thecarryingamountofitsinvestmentinassociatedcompany. Detailsofassociatedcompanyareas The Group’s shareintheaccumulatedlossesofassociatedcompanyceasedwhenGroup’s shareoflossesassociated Unquoted shares,atcost * Name ofcompany INVESTMENT INASSOCIATED COMPANY (a) PROPERTY DEVELOPMENT ACTIVITIES Group’s shareofpostacquisition Accumulated impairment accumulated losses At 31December Additions At 1January Disposal ofasubsidiarycompany(Note40) Transferred from/(to)propertydevelopmentcosts(Note20(b)) Write off Audited byotherfirmofauditors. Land heldforpropertydevelopment incorporation Country of Malaysia RM’000 2017 (73) (26) The Group 99 - interest andvotingpower Proportion ofownership 2017 39.5 held bytheGroup % RM’000 2016 (73) (26) 99 - 2016 39.5 % 1,482,198 1,111,766 128,545 284,081 (41,727) RM’000 RM’000 Dormant Principal activities 2017 2017 The Company (467) (99) The Group 99 - - 1,111,766 1,026,414 119,837 (34,485) RM’000 RM’000 2016 2016 (99) 99 - - - - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 20. PROPERTY DEVELOPMENT ACTIVITIES (continued) (a) Land held for property development (continued) Included in land held for property development are interests on borrowings capitalised during the financial year amounting to RM17,908,528 (2016: RM38,189,650) as disclosed in Note 10. Included in land held for property development are freehold land of RM835,267,474 and leasehold land of RM26,558,156 pledged to financial institutions as security pursuant to the Perpetual Securities Programme and term loan facilities as disclosed in Notes 28 and 30, respectively. In the previous financial year, the freehold land of RM603,859,522 and leasehold land of RM17,520,000 were pledged to financial institutions as security for the term loan facilities as disclosed in Note 30. (b) Property development costs The Group 2017 2016 RM’000 RM’000 At 1 January Land costs 760,379 922,150 213 Development costs 1,534,489 1,612,714 2,294,868 2,534,864 Costs incurred during the financial year Land costs 135,153 2,696 Development costs 1,789,758 1,831,313 1,924,911 1,834,009 Costs written off during the financial year Land costs (118) - Development costs (203) - (321) - Transferred (to)/from land held for property development (Note 20(a)) Land costs (159,987) 22,934 Development costs (124,094) 11,551 (284,081) 34,485 Mah Sing Group Berhad 214 Annual Report 2017 Financial Statements 20. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (b) PROPERTY DEVELOPMENT ACTIVITIES (continued) Land costs At 31December Development costs (2016: RM65,345,120). RM56,696,726). Total coststoobtaincontract recognisedascostofsalesinprofitorlossamountingtoRM77,185,097 Included inpropertydevelopmentcostsaretoobtain contract capitalisedamountingtoRM26,315,596(2016: to RM18,083,548(2016:RM18,323,530)asdisclosedinNote 10. Included inpropertydevelopmentcostsareinterestsonborrowings capitalisedduringthefinancialyearamounting Development costs Land costs Additions arisingfromacquisitionofsubsidiarycompanies(Note39) Property, plantandequipment (Note14) Inventories Reclassified/Transferred to Development costs Land costs Costs recognisedasexpenseinprofitorlossduringthefinancial year Property developmentcosts(continued) - Developmentcosts - Land costs - Developmentcosts - Land costs (1,773,763) (1,608,895) 2,139,524 1,263,567 (359,311) (327,488) (164,868) 337,221 875,957 337,221 (31,823) RM’000 2017 The Group - - - - (1,877,694) (1,719,497) 2,294,868 1,534,489 (225,139) (196,264) (158,197) 760,379 (28,875) RM’000 (5,657) (5,328) 2016 (329) - - - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 20. PROPERTY DEVELOPMENT ACTIVITIES (continued) (b) Property development costs (continued) Freehold and leasehold land of RM264,836,785 and RM200,862,844 respectively are pledged to financial institutions as security pursuant to the Perpetual Securities Programme and term loan facilities of the Group as disclosed in Notes 28 and 30, respectively. In the previous financial year, the freehold and leasehold land of RM233,362,113 and RM302,700,275 respectively were pledged to financial institutions as security for term loan facilities of the Group as disclosed in Note 30. 21. INVENTORIES The Group 2017 2016 RM’000 RM’000 Completed properties 598,240 324,407 Raw materials 15,734 18,960 Work-in-progress 553 1,297 Finished goods 14,454 15,325 215 628,981 359,989 The cost of inventories recognised as an expense of the Group includes RM1,614,020 (2016: RM223,961) in respect of impairment of inventories and write down of inventories to net realisable value, and has been reduced by RM38,433 (2016: RM684,821) in respect of the reversal of such impairment and write down. Inventories of a subsidiary company amounting to RMNil (2016: RM2,497,500) are pledged to financial institutions as security for term loans, short-term borrowings and bank overdrafts as disclosed in Notes 30, 35 and 36, respectively. Completed properties of subsidiary companies amounting to RM126,946,971 are pledged to financial institutions as security pursuant to the Perpetual Securities Programme, term loans and short-term borrowings as disclosed in Notes 28, 30 and 35, respectively. In the previous financial year, completed properties of a subsidiary company amounting to RM66,640,734 were pledged to financial institutions as security for term loan facilities of the Group as disclosed in Note 30. Mah Sing Group Berhad 216 Annual Report 2017 Financial Statements 22. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS Prepayments Less: Allowancefordoubtfuldebts Other deposits Deposits forpurchaseofproperty, Less: Allowancefordoubtfuldebts Deposits forlandacquisitions/joint Less: Allowancefordoubtfuldebts Amounts duefromsubsidiary Accrued billingsforproperty Less: Allowancefordoubtfuldebts Other receivables Less: Allowancefordoubtfuldebts Trade receivables TRADE ANDOTHER RECEIVABLES plant andequipment development companies development - - - - Others Sales ofgoods Retention sums Property developmentprojects Note (d) (b) (a) (c) 1,153,619 420,503 635,012 639,889 144,995 432,992 (11,568) RM’000 23,760 35,378 11,574 27,392 35,380 38,960 60,117 (4,877) 1,785 2017 (800) 800 The Group (2) - - - - 1,039,732 409,202 521,286 526,854 158,540 298,208 (11,493) RM’000 37,008 32,492 32,494 37,808 24,248 35,741 67,997 (5,568) 9,356 6,140 2,109 2016 (800) (2) - - - 2,886,007 2,885,676 2,940,130 (54,454) (10,262) RM’000 10,568 2017 The Company 306 20 (2) 5 7 ------2,454,125 2,453,704 2,502,895 (49,191) (10,262) RM’000 10,641 2016 379 18 24 26 (2) ------Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 22. TRADE AND OTHER RECEIVABLES (continued) The Group The Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Non-current 31,957 - - - Current 1,121,662 1,039,732 2,886,007 2,454,125 1,153,619 1,039,732 2,886,007 2,454,125 (a) Trade receivables The credit term of trade receivables of the Group range from 7 to 120 days (2016: 7 to 120 days) from date of invoice and progress billing. Retention sums receivable are trade receivables retained by stakeholders that are due upon expiry of retention periods ranging from 8 to 24 months (2016: 8 to 24 months) as stipulated in the sale and purchase agreements. Trade receivables of the Group amounting to RMNil (2016: RM4,329,000) are pledged to financial institutions as security for term loans, short-term borrowings and bank overdrafts as disclosed in Notes 30, 35 and 36, respectively. 217 On 27 December 2017, certain subsidiary companies of the Group entered into Sale and Purchase Agreements for the sale of 3 parcels of freehold land to third parties. The terms of settlement of the purchase consideration of the Sale and Purchase Agreements shall be as per the relevant settlement agreements which are based upon construction works to be performed and completed over a period of 3 years by nominee of the third parties. Accordingly, the non- current portion of the receivables amounting to RM31,956,536 has been recorded as non-current at fair value on initial recognition and subsequently measured at amortised cost at an effective interest rate of 5.90%. The currency profile of trade receivables is as follows: The Group 2017 2016 RM’000 RM’000 Ringgit Malaysia 611,557 494,310 Indonesian Rupiah 11,651 12,827 United States Dollar 14,583 17,793 Singapore Dollar 1,181 1,233 Australian Dollar 874 626 Thai Baht 43 65 639,889 526,854 Mah Sing Group Berhad 218 Annual Report 2017 Financial Statements 22. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (a) TRADE ANDOTHER RECEIVABLES (continued) Trade receivablesnotpastdue Retention sums Past due<2months Movement ofallowancefordoubtfuldebts-tradereceivables Retention sums Past due>4months Past due2-4months Past due2-4months Past due>4months Past due<2months Impaired tradereceivables no additionalcreditriskbeyond amountsprovidedfordoubtfuldebts fortheGroup’s tradereceivables. of accountsreceivablefallswithin therecordedallowances.Duetothesefactors,management believesthereis which arewidelydistributedandcoversabroadrangeofend markets. TheGroup’s historicalexperienceincollection Concentration ofcreditriskwithrespecttotradereceivables islimitedduetotheGroup’s largenumberofcustomers, At 31December Write offduringthefinancialyear Reversal ofallowanceduringthefinancialyear Allowance duringthefinancialyear At 1January Ageing analysisoftradereceivables Trade receivables(continued) 283,799 144,918 117,755 639,889 635,012 RM’000 RM’000 25,377 63,163 4,801 4,877 4,877 5,568 2017 2017 (350) (364) The Group The Group 76 23 - - 186,174 158,464 124,257 526,854 521,286 RM’000 RM’000 22,624 29,767 13,728 (7,554) 5,493 5,568 5,568 2016 2016 (606) 75 - - - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 22. TRADE AND OTHER RECEIVABLES (continued) (b) Other receivables Included in other receivables of the Company is an amount of RM7,976,917 (2016: RM7,976,917) owing by indirect subsidiary companies, Vican Technology Sdn Bhd and Vican Electronics Sdn Bhd, which were excluded from consolidation as disclosed in Note 18. Amounts owing by these subsidiary companies have been fully provided for. The currency profile of other receivables is as follows: The Group The Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Ringgit Malaysia 38,775 35,659 10,568 10,639 Indonesian Rupiah 185 80 - - Others - 2 - 2 38,960 35,741 10,568 10,641 Movement of allowance for doubtful debts - other receivables 219 The Group The Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 At 1 January 11,493 11,493 10,262 10,262 Allowance during the financial year 76 - - - Write off (1) - - - At 31 December 11,568 11,493 10,262 10,262 Mah Sing Group Berhad 220 Annual Report 2017 Financial Statements 22. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (d) (c) TRADE ANDOTHER RECEIVABLES (continued) There isnomovementofallowancefordoubtfuldebts-other deposits Other deposits At 31December Reversal duringthefinancialyear Allowance duringthefinancialyear At 1January Interest at6.80% Interest at3.25% Interest at6.90% Interest free Interest at8.85% At 1January/31 December interest rates: are unsecuredandrepayableondemand.Amountsduefromsubsidiarycompaniessubjecttothefollowing Amounts duefromsubsidiarycompaniesarosemainlyinter-companyadvancesandpaymentsonbehalfwhich Amounts duefromsubsidiarycompanies Movement ofallowancefordoubtfuldebts-amountsduefromsubsidiarycompanies RM’000 2017 The Group 2 RM’000 2016 2 1,740,880 2,940,130 576,133 557,243 RM’000 RM’000 RM’000 54,454 49,191 65,874 (1,790) 7,053 2017 2017 2017 The Company The Company The Company 2 - 1,850,128 2,502,895 537,245 RM’000 RM’000 RM’000 45,487 49,191 17,690 97,832 3,704 2016 2016 2016 2 - - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 23. DEPOSITS, CASH, BANK BALANCES AND INVESTMENT IN SHORT-TERM FUNDS The Group The Company 2017 2016 2017 2016 Note RM’000 RM’000 RM’000 RM’000 Cash and bank balances 171,100 110,471 8,935 117 Project accounts (a) 444,890 452,808 - - Deposits with licensed banks (b) 123,505 227,451 60,110 159,428 Investment in short-term funds (c) 476,746 133,039 476,746 133,039 1,216,241 923,769 545,791 292,584 (a) Project accounts Project accounts are bank accounts maintained in accordance with Section 7A of the Housing Development (Control and Licensing) Act, 1966. These accounts, which consist of monies received from purchasers, are for the payment of property development expenditure incurred. The surplus monies, if any, will be released to the respective subsidiary companies upon the completion of the property development projects. (b) Deposits with licensed banks 221 Deposits with licensed banks of the Group and of the Company have an average maturity of 87 days (2016: 74 days) and 7 days (2016: 17 days) respectively. Deposits with licensed banks of the Group amounting to RM6,022,254 (2016: RM5,846,809) have been pledged as collateral for the term loans as disclosed in Notes 30. Deposits with licensed banks of the Group amounting to RM46,014,251 (2016: RM37,126,196 ) have been deposited in Escrow Accounts for banking facilities of subsidiary companies. Deposits with licensed banks of the Group and of the Company amounting to RM60,000 (2016: RM30,000) have been deposited in Trustees’ Reimbursement Account in accordance with the terms of the Perpetual Sukuk and Perpetual Securities. Mah Sing Group Berhad 222 Annual Report 2017 Financial Statements 23. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (c) DEPOSITS, CASH, BANKBALANCESANDINVESTMENT INSHORT-TERM FUNDS(continued) The currencyprofileofdeposits,cash,bankbalancesandinvestment inshort-termfundsisasfollows: Investment inshort-termfunds Deposits withlicensedbanks Project accounts Others Australian Dollar Singapore Dollar Ringgit Malaysia Indonesian Rupiah United States Dollar The interestratesperannumduringthefinancialyearareasfollows: deposited inEscrowAccountpursuanttothePerpetual SecuritiesProgramme. Investment inshort-termfundsoftheGroupandCompanyamountingtoRM21,271,222(2016:RMNil)havebeen the IslamicFinancialServicesAct2013whichallowredemptionwith noticeof1businessday. money market instrumentsofferedbybanksorfinancialinstitutionslicensedunderFinancialServicesAct2013 Investment inshort-termfundsareplacementsmademanagedthatinvestfixed depositsandshort-term Investment inshort-termfunds 3.28 -3.96 2.95 -3.65 1.65 -2.00 1,216,241 1,209,684 RM’000 5,513 2017 2017 291 546 180 The Group The Group 27 % 2.89 -4.38 2.05 -4.50 1.44 -2.29 923,769 921,740 RM’000 2016 2016 312 599 319 762 37 % 3.28 -3.96 2.95 -3.55 545,791 545,791 RM’000 2017 2017 The Company The Company % ------2.89 -4.38 3.00 -3.90 292,584 292,572 RM’000 2016 2016 12 % - - - - - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 24. SHARE CAPITAL The Group and the Company Number of Par shares value Unit’000 RM RM’000 Ordinary shares Authorised: At 1 January 2016/31 December 2016/1 January 2017 5,000,000 0.50 2,500,000 At 31 December 2017 - - Issued and paid up: At 1 January 2016 2,409,419 0.50 1,204,709 Exercise of warrants 5 0.50 2 At 31 December 2016/1 January 2017 2,409,424 0.50 1,204,711 Exercise of warrants 16,611 1.44 23,920 Transfer arising from “no par value” regime^ - - 540,816 223 Transfer from warrant reserve - - 3,844 At 31 December 2017 2,426,035 1,773,291 During the financial year, the Company issued 16,611,346 new ordinary shares at an exercise price of RM1.44 per ordinary share pursuant to the exercise of Warrant B 2013/2018. The new ordinary shares issued rank pari passu with the then existing ordinary shares of the Company. ^ The Company’s authorised, issued and fully paid-up share capital comprises ordinary shares with a par value of RM0.50 each. The new Companies Act 2016 (Act), which came into operation on 31 January 2017, introduces the “no par value” regime. Accordingly, the concepts of “authorised share capital” and “par value” have been abolished. In accordance with the transitional provisions of the Act, the amount standing to the credit of the Company’s share premium account of RM540,816,312 was transferred to Company’s share capital account. This change does not have an impact on the number of shares in issue or the relative entitlement of any of the shareholders. The Company has a period of 24 months from the effective date of the Act to use the existing balance credited in the share premium account in a manner as specified by the Act. Mah Sing Group Berhad 224 Annual Report 2017 Financial Statements 24. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS At 31December2017 Exercised At 31December 2016/1January2017 Exercised At 1January2016 (e) (d) (c) (b) (a) The salientfeaturesofWarrant B2013/2018areasfollows: Warrant B2013/2018isconstitutedbyaDeedPoll dated18February2013(“DeedPoll”). WARRANT B2013/2018 SHARE CAPITAL (continued) The movementsintheCompany’s Warrant B2013/2018areasfollows: Bonus Issues.Theexercise pricewasadjustedfromRM1.98toRM1.44. adjusted inaccordancewiththeprovisionsofDeedPoll (asmentionedinitem(c)above)asaresultoftheRightsand During thefinancialyearended 31December2015,theexercise priceandthenumberof Warrant B2013/2018were the entitlementdateispriortoofallotmentnewordinary shares. such newordinarysharesshallnotbeentitledtoanydividends,rights,allotmentsand/orotherdistributionsforwhich allotment, rank pari passu in all respects with the then existing ordinary shares of the Company, save and except that The newordinary shares allotted asaresult of theexercise of the Warrant B2013/2018shalluponissuanceand ordinary shares;and (c) above),untilandunlesssuchholdersexercise therightsunderWarrant B2013/2018tosubscribefornew in theCompany(except fortheissueofnewWarrant B 2013/2018pursuanttoadjustmentasmentionedinitem The holdersofWarrant B2013/2018arenotentitledtoparticipateinanydistributionand/orofferoffurthersecurities the sharecapitalofCompanyinaccordancewithprovisions oftheDeedPoll; The exercise priceandthenumberofWarrant B2013/2018aresubjecttoadjustmentsintheeventofalteration at anexercise priceofRM1.98(adjustedtoRM1.44)perordinaryshare; Each Warrant B2013/2018entitlestheregisteredholdertosubscribeforone(1)newordinaryshareinCompany 2013/2018 notexercised attheexpirydatewilllapseandceasetobevalidforanypurpose; The issuedateofWarrant B2013/2018is19March2013andtheexpirydate162018.AnyWarrant B 2013/2018 Number of Warrant B (Unit’000) 169,579 186,190 186,195 (16,611) (5) Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 24. SHARE CAPITAL (continued) WARRANT C 2015/2020 Warrant C 2015/2020 is constituted by a Deed Poll dated 15 January 2015 (“Deed Poll”). The salient features of the Warrant C 2015/2020 are as follows: (a) The issue date of Warrant C 2015/2020 is 23 February 2015 and the expiry date is 21 February 2020. Any Warrant C 2015/2020 not exercised at the expiry date will lapse and cease to be valid for any purpose; (b) Each Warrant C 2015/2020 entitles the registered holder to subscribe for one (1) new ordinary share in the Company at an exercise price of RM2.63 (adjusted to RM2.10) per ordinary share; (c) The exercise price and the number of Warrant C 2015/2020 are subject to adjustments in the event of alteration to the share capital of the Company in accordance with the provisions of the Deed Poll; (d) The holders of Warrant C 2015/2020 are not entitled to participate in any distribution and/or offer of further securities in the Company (except for the issue of new Warrant C 2015/2020 pursuant to adjustment as mentioned in item (c) above), until and unless such holders exercise the rights under the Warrant C 2015/2020 to subscribe for new ordinary shares; and 225 (e) The new ordinary shares allotted as a result of the exercise of the Warrant C 2015/2020 shall upon issuance and allotment, rank pari passu in all respects with the then existing ordinary shares of the Company, save and except that such new ordinary shares shall not be entitled to any dividends, rights, allotments and/or other distributions for which the entitlement date is prior to the date of allotment of the new ordinary shares. During the financial year ended 31 December 2015, the exercise price and the number of Warrant C 2015/2020 were adjusted in accordance with the provisions of the Deed Poll (as mentioned in item (c) above) as a result of the Bonus Issue. The exercise price was adjusted from RM2.63 to RM2.10. The movements in the Company’s Warrant C 2015/2020 are as follows: Number of Warrant C 2015/2020 (Unit’000) At 1 January 2016/31 December 2016 166,134 At 1 January 2017/31 December 2017 166,134 Mah Sing Group Berhad 226 Annual Report 2017 Financial Statements 25. RESERVES FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS 27. 26. (c) (b) (a) Exchange fluctuationreserve Warrant reserve Share premium (c) (b) (a) The salientfeaturesofthePerpetual Sukukareasfollows: requirements oftheGroupandrefinancingGroup’s existingborrowings. arising fromthePerpetual SukukwillbeutilisedforShariah-compliantpurposeswhichincludeinvestments,workingcapital of Musharakah (“Perpetual Sukuk”) by way of private placement which was completed on 31 March 2015. The proceeds The Company issued a total of RM540,000,000 nominal value of unrated Perpetual Sukuk under the Shariah principle PERPETUAL SUKUK as dividendsunderthesingle-tierincometaxsystem. At theendofreportingperiod,entirebalanceretainedearnings oftheCompanyisavailablefordistribution RETAINED EARNINGS exchange fluctuationreserveaccountasdisclosedintheaccounting policies. Exchange differencesarisingfromtranslationofthefinancialstatementsforeignoperationsaretaken tothe Exchange fluctuationreserve retained earnings. and the warrant reserve in relation to unexercised warrants at the expiry of the warrant periods will be transferred to on thedateofissuance. Warrants reserveistransferredtothesharecapitalaccountuponexercise ofwarrants Warrant reservearosefromtherightsissuestogetherwithfreedetachablewarrants,whichismeasuredatfairvalue Warrant reserve year asdisclosedinNote24. prior financialyears.Theentireamountofsharepremiumhavebeenreclassifiedtocapitalduringthe Share premiumarosefromtheexercise ofwarrantsandESOS,rightissues,privateplacementotherissuancesin Sharepremium year 5; The Perpetual Sukukcarriesaperiodic distributionrateof6.8% perannumpayablesemi-annually fromyear1to accounting standardsresulting inthePerpetual Sukuknolongerbeing classifiedasequity; The Companyalsohastheoption toredeemthePerpetual Sukukifthereisanychangeoramendment tothe Sukuk attheendoffifthyear andthereafteroneachsubsequent periodicdistributiondate(i.e. semi-annually); The Perpetual Sukukhasnofixed maturity dateandtheCompanyhasanoptiontoredeemallorpart ofthe Perpetual Note (b) (a) (c) RM’000 66,909 60,499 6,410 2017 The Group - 613,300 540,816 RM’000 64,343 8,141 2016 RM’000 60,499 60,499 2017 The Company - - 605,159 540,816 RM’000 64,343 2016 - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 27. PERPETUAL SUKUK (continued) (d) Deferred periodic distribution, if any, will be cumulative but will not earn additional profits (i.e. there will be no compounding); (e) Payment to the holders of Perpetual Sukuk will rank: (i) ahead of any class of the Company’s share capital, including, without limitation, any preference shares and ordinary shares in the capital of the Company; (ii) junior and subordinated to all present and future creditors (whether secured or unsecured); and (iii) pari passu with any instruments or security issued or guaranteed by the Company that ranks or is expressed to rank, whether by its terms or by operation or law, pari passu with the Perpetual Sukuk; (f) The Perpetual Sukuk is unrated and is unsecured. 28. PERPETUAL SECURITIES On 3 April 2017, the Company has completed the first issuance of the Perpetual Securities Programme (“Perpetual Securities”), amounting to RM650 million in nominal value. Proceeds totalling RM645,212,270, net of discounts and transaction cost has been received pursuant to the said issuance. The proceeds arising from the Perpetual Securities will be utilised for investments, capital expenditure, working capital requirements of the Group and the refinancing of the 227 Group’s existing borrowings. The salient features of the Perpetual Securities are as follows: (a) The Perpetual Securities Programme of up to RM1.0 billion in nominal value has no fixed maturity date and the Company has an option to redeem all or part of the Perpetual Securities at the end of the fifth year and thereafter on each subsequent periodic distribution date (i.e. semi-annually); (b) The Company also has the option to redeem the Perpetual Securities if there is any change or amendment to the accounting standards resulting in the Perpetual Securities no longer being classified as equity; (c) The Perpetual Securities carries a periodic distribution rate of 6.9% per annum payable semi-annually from year 1 to year 5; (d) Deferred periodic distribution, if any, will be cumulative but will not earn additional profits (i.e. there will be no compounding); (e) Payment to the holders of Perpetual Securities will rank: (i) pari passu without discrimination, preference or priority among the issuance of the Secured Perpetual Securities but each issuance will be secured by different security and shall rank at least pari passu with all other present and future unsecured, unconditional and unsubordinated obligations of the Company and with any Parity Obligations; (ii) pari passu without discrimination, preference or priority among the issuance of the Unsecured Perpetual Securities and shall rank at least pari passu with all other present and future unsecured, unconditional and unsubordinated obligations of the Company and with any Parity Obligations; and Mah Sing Group Berhad (iii) ahead of any class of the Company’s share capital (including, without limitation, any preference shares and ordinary shares in the capital of the Company other than any instrument or security ranking in priority in payment) and any other instruments or securities issued, entered into or guaranteed by the Company, whether by its terms or by operation of law, ranks in right of payment behind the claims of unsecured or unsubordinated obligations of the Company which include Perpetual Sukuk upon dissolution; 228 Annual Report 2017 Financial Statements 28. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS 29. (e) (d) (c) (b) (a) At 31December Repurchase of bonds Interest expense(Note10) At 1January The liabilitycomponentoftheBondsisrecognisedinstatements offinancialpositionasfollows: of theBondshasbeencancelledaccordingly. the Bondson1April2016.Followingcompletionofsecondtrancherepurchase, theRM315.0millionnominalvalue Bonds. Subsequently, the Company had completed the second tranche repurchase of RM215.0 million nominal value of The Companyhad on 7March2016 completed thefirst trancherepurchaseofRM100.0millionnominalvaluethe (f) PERPETUAL SECURITIES(continued) liability component oftheBonds. by applyingtheinterestrateof 6.5%perannumforanequivalentnon-convertiblebondof comparablecreditstatustothe During thepreviousfinancial year, interestexpenseontheBondswascalculatedbased ontheeffectiveinterestmethod The salientfeaturesoftheBondsare bonds (“theBonds”). On 10June2011,theCompanyissueda7-yearRM325millionnominalvalueof3.25%redeemableconvertiblesecured REDEEMABLE CONVERTIBLE SECUREDBONDS bank asdisclosedinNotes20and23,respectively. The Bondsaresecuredbyinter-alia,legalchargesoverdevelopmentlandoftheGroupanddepositswithlicensed in arrears;and Coupon isat3.25%perannumbasedonthenominalvalueofBondsoutstandingandpayablesemi-annually on 8June2018bycashandinonelumpsumatpar; Unless previouslyredeemed,converted,purchasedandcancelled,theBondswillberedeemedonmaturitydate at anytimebetweenissuancedateuptothematuritydate; RM1.43 andRM1.14pursuanttotheRightsBonusIssuesrespectively, intofullypaidnewsharesoftheCompany All oranypartoftheBondsareconvertible at aconversionpriceofRM1.57whichwassubsequentlyadjustedto in onelumpsumatpar; The Bondsmayberedeemedonthe5 23 respectively. properties anddeposits,cash,bankbalancesinvestmentinshort-termfundsasdisclosedNote16,20,21 The Perpetual Securitiesisunratedandsecuredovertheinvestmentproperties, developmentland,completed inter-alia th anniversaryoftheissuedate(10June2016)inwholeorpartbycashand asfollows: The GroupandtheCompany RM’000 2017 - - - - (296,474) 292,008 RM’000 4,466 2016 - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 30. TERM LOANS The Group The Company 2017 2016 2017 2016 Note RM’000 RM’000 RM’000 RM’000 Secured Term loans (a) 717,664 885,831 - - Bridging loans (b) 27,108 100,093 - - Foreign term loans (c) 6,681 112 - - 751,453 986,036 - - The terms loans are repayable as follows: The Group The Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Current: Repayable not later than 1 year 113,417 126,951 - - 229 Non-current: Repayable later than 1 year and not later than 2 years 246,926 228,142 - - Repayable later than 2 years and not later than 5 years 371,258 578,740 - - Repayable more than 5 years 19,852 52,203 - - 638,036 859,085 - - 751,453 986,036 - - Mah Sing Group Berhad 230 Annual Report 2017 Financial Statements 30. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (c) (b) (a) TERM LOANS (continued) plant andequipment,leaseholdland,inventoriesassignment overtrade receivablesof thesubsidiarycompany. In thepreviousfinancialyear, theforeigntermloanfacilitiesaresecuredbywayoflegalchargesovercertainproperty, company. The foreigntermloanfacilitiesaresecuredbywayoflegalcharges overleaseholdlandandbuildingsofthesubsidiary of RM9,238,000(2016:RM3,330,000). As at31December2017,aforeignsubsidiarycompanyhas foreigntermloanfacilitiesfromalicensedbank Foreign Term Loans companies, andguaranteesissuedbytheCompany. The bridgingloanfacilitiesaresecuredbywayoflegalchargesoverthedevelopmentlandsubsidiary (2016: RM134,000,000). As at31December2017,theGrouphasbridgingloanfacilitiesfromlocallicensedbanksofRM27,107,604 Bridging Loans loans aresecuredbywayoflegalchargesoverEscrowAccounts. The CompanyhastermloanfacilityofRM20,000,000(2016:RM20,000,000)fromlocallicensedbanks. The Company Company. banks andEscrowAccount,legalassignmentovertherespectivestakeholders sumandguaranteesissuedbythe debenture asinterimsecurityoverthedevelopmentland,inventories,legalchargesdepositswithlicensed In thepreviousfinancialyear, thetermloanfacilitiesaresecuredbywayoflegalcharges,specificandgeneral guarantees issuedbytheCompany. and EscrowAccount,specificdebentureasinterimsecurityoverthedevelopmentland,completedproperties The termloanfacilitiesaresecuredbywayoflegalchargesoverthedevelopmentland,depositswithlicensedbanks (2016: RM1,535,451,700). As at31December2017,theGrouphastermloanfacilitiesfromlocallicensedbanksofRM852,003,646 The Group Term Loans Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 30. TERM LOANS (continued) The currency profile of the term loans is as follows: The Group The Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Ringgit Malaysia 744,772 985,924 - - Indonesian Rupiah 6,681 112 - - 751,453 986,036 - - During the financial year, the interest rates of the term loans are as follows: The Group The Company 2017 2016 2017 2016 % % % % Local currency 4.43 - 5.20 4.45 - 5.87 4.50 - 4.95 4.88 - 5.11 Foreign currency: 231 Indonesian Rupiah 11.50 12.00 - - (d) Reconciliation of liabilities arising from financing activities The table below details the changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group’s financial statements of cash flows as cash flows from financing activities. Long term Short-term and deferred Term loans borrowings payables (Note 30) (Note 35) (Note 31) The Group RM’000 RM’000 RM’000 At beginning of year 986,036 15,404 12,357 Proceeds 199,584 39,152 - Repayments (433,684) (25,182) (2,346) Non-cash changes - fair value adjustments - - 6,393 Arising from the acquisition of subsidiary companies - - 43,062 Arising from the acquisition of property, plant and equipment - - 1,366 Currency translation differences (483) (500) (1,213) Change in payables - - 14,558 Mah Sing Group Berhad Others - - 1,438 At end of year 751,453 28,874 75,615 232 Annual Report 2017 Financial Statements 31. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (a) Finance leaseandhirepurchaseliabilities Retirement benefitobligations Deferred payables LONG-TERM ANDDEFERREDPAYABLES Finance leaseandhirepurchaseliabilities Principal offinanceleaseandhirepurchaseliabilities: Principal offinanceleaseandhirepurchaseliabilities Future financechargesonleaseandhirepurchaseliabilities: Minimum financeleaseandhirepurchasepayments: ------later than1yearandnot5years not laterthan1year(Note34) later than1yearandnot5years not laterthan1year later than1yearandnot5years not laterthan1year Note 32 (b) (a) RM’000 RM’000 75,615 65,148 9,051 1,416 3,046 1,416 1,630 3,046 3,274 1,527 1,747 2017 2017 (228) (111) (117) The Group The Group RM’000 RM’000 12,357 8,699 1,775 1,883 4,210 1,775 2,435 4,210 4,562 1,860 2,702 2016 2016 (352) (267) (85) Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 31. LONG-TERM AND DEFERRED PAYABLES (continued) (a) Finance lease and hire purchase liabilities (continued) The average term for finance lease and hire purchase is 5 years (2016: 5 years). At the end of the reporting period, the average effective borrowing rate was 5.60% (2016: 4.53%) per annum. Interest rates are fixed at the inception of the hire purchase arrangements. The finance lease and hire purchase liabilities are secured by assets acquired under finance lease and hire purchase arrangements as disclosed in Note 14. On 20 June 2014, a foreign subsidiary company entered into a Finance Lease Agreement (“Finance Lease”) to dispose 6 units of factory equipment (“the Assets”) to PT. Mitsubishi UFJ Lease & Finance Indonesia (“PT. Mitsubishi”) for a cash consideration of IDR18,851,215,406 (equivalent to RM5,316,043). Simultaneously, the foreign subsidiary company leased back the Assets from PT. Mitsubishi for a period of 4 years (“the lease period”) with total financing value of IDR13,195,850,784 (equivalent to RM3,721,230) at fixed interest rate of 12.75% per annum. Under the terms of the Finance Lease, the foreign subsidiary company was granted the option to buy back the Assets at the end of the lease period at IDR5,655,364,622 (equivalent to RM1,594,813). The liability arising from the above sale and leaseback transaction amounting to RM704,787 (2016: RM2,009,240), 233 was recognised as finance lease in the statement of financial position as a result of the sale and lease back by virtue of the above arrangements. (b) Deferred payables The Group 2017 2016 RM’000 RM’000 Deferred payables at amortised cost: - not later than 1 year (Note 34) 178,996 5,085 - later than 1 year and not later than 5 years 65,148 1,883 244,144 6,968 Included in the deferred payables shown above are payables in relation to acquisition of subsidiary companies and development land of RM128,581,586 (2016: RMNil) and RM78,842,262 (2016: RM5,084,451), respectively and development charges of RM36,720,433 (2016: RMNil) made under deferred payment terms. These deferred payables are measured at amortised costs at an effective interest rate of 5.9% (2016: 4.5%) per annum. Mah Sing Group Berhad 234 Annual Report 2017 Financial Statements 32. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS Benefit paid Net actuarialgain Principal actuarialassumptionsused: At 31December Currency translationdifferences Expected rateofsalaryincrease Discount rate Amounts recognisedinprofitorloss(Note8): At 1January Movements inthenetliabilitycurrentfinancialyearareasfollows: Present valueofretirementbenefitobligations(Note31) The amountsrecognisedinthestatementsoffinancialpositionaredeterminedasfollows: employees. A foreignsubsidiarycompanyoperatesanunfundeddefinedretirementbenefitscheme(“theScheme”) foritseligible RETIREMENT BENEFITOBLIGATIONS the aboveprincipalactuarialassumptions attheendofreporting period. on theGroup’s profitorloss andothercomprehensiveincomearisingfromtheeffect ofreasonablypossiblechangesto No sensitivityanalysisontheprincipalactuarialassumptions ispreparedastheGroupdoesnotexpectanymaterialeffect Accelerate recognitionofpastservicecost Interest onobligation Current servicecost RM’000 RM’000 (1,005) 1,438 9,051 8,699 9,051 2017 2017 2017 683 757 (34) (47) 8.5 7.1 The Group The Group The Group (2) % RM’000 RM’000 1,236 8,699 1,617 5,874 8,699 2016 2016 2016 10.0 534 698 (28) 8.2 % 4 - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 33. DEFERRED TAX LIABILITIES/(ASSETS) The Group The Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 At 1 January (101,825) (89,928) 100 (2,598) Recognised in profit or loss (Note 11) (25,698) (15,015) (26) (420) Repurchase/Conversion of bonds - 3,118 - 3,118 Additions arising from acquisition of subsidiary companies (Note 39) 58,081 - - - At 31 December (69,442) (101,825) 74 100 Deferred tax assets and liabilities are offset when there is legally enforceable rights to set-off current tax assets and current tax liabilities and when the deferred taxes relate to the same tax authority. The following amounts, presented after appropriate offsetting, are shown in the statements of financial position: The Group The Company 2017 2016 2017 2016 235 RM’000 RM’000 RM’000 RM’000 Deferred tax assets (142,967) (118,045) - - Deferred tax liabilities 73,525 16,220 74 100 (69,442) (101,825) 74 100 The components and movements of deferred tax liabilities during the financial year are as follows: Deferred tax liabilities Property Property, plant Investment development and equipment properties costs Offsetting Total The Group RM’000 RM’000 RM’000 RM’000 RM’000 At 1 January 2016 9,885 1,572 11,266 (5,930) 16,793 Recognised in profit or loss 2,649 250 (4,285) 813 (573) At 31 December 2016/ 1 January 2017 12,534 1,822 6,981 (5,117) 16,220 Recognised in profit or loss (1,357) - (654) 1,235 (776) Additions arising from acquisition of subsidiary Mah Sing Group Berhad companies (Note 39) - - 58,081 - 58,081 At 31 December 2017 11,177 1,822 64,408 (3,882) 73,525 236 Annual Report 2017 Financial Statements 33. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS Deferred taxliabilities/(assets) At 31December2017 Recognised inprofitor At 31December2016/ Repurchase ofbonds Recognised inprofitor At 31December2017 Recognised inprofitorloss At 31December 2016/1January2017 At 1January2016 Repurchase ofbonds Recognised inprofitorloss At 1January2016 The Company The Group Deferred taxassets DEFERRED TAX LIABILITIES/(ASSETS) (continued) loss 1 January2017 loss development (123,780) (109,811) Property (13,969) RM’000 (17,516) (92,295) costs - RM’000 Unused (9,860) (5,135) (4,725) (2,766) (1,959) losses tax - Unabsorbed reinvestment allowances allowances RM’000 (1,557) capital (1,546) 1,234 (323) and (11) - Redeemable convertible RM’000 secured equipment (2,728) bonds 3,118 plant and Property, (390) RM’000 - - - 100 130 (26) (30) 74 differences deductible - temporary (12,886) RM’000 (15,658) (5,817) (7,069) 8,589 Other Redeemable convertible - RM’000 secured (2,728) bonds 3,118 (390) Offsetting RM’000 - - - (1,235) 3,882 5,117 5,930 (813) - (142,967) (118,045) (106,721) RM’000 (24,922) RM’000 (14,442) (2,598) 3,118 3,118 Total (420) Total 100 (26) 74 Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 33. DEFERRED TAX LIABILITIES/(ASSETS) (continued) Deferred tax liabilities/(assets) (continued) Details of deductible temporary differences, unused tax losses and unabsorbed capital allowances pertaining to certain subsidiary companies which have not been recognised in the financial statements due to uncertainty of realisation are as follows: The Group 2017 2016 RM’000 RM’000 Deductible temporary differences 233,723 105,713 Unused tax losses 81,925 64,682 Unabsorbed capital allowances 10,304 7,983 325,952 178,378 34. TRADE AND OTHER PAYABLES The Group The Company 237 2017 2016 2017 2016 Note RM’000 RM’000 RM’000 RM’000 Trade payables (a) 698,647 608,591 - - Retention sum 282,450 289,684 - - Payable for acquisition of development land 31(b) 78,843 5,085 - - Payable for acquisition of subsidiary companies 31(b) 80,910 - - - Payable for development charges 31(b) 19,243 - - - Other payables 84,850 74,138 7 176 Finance lease and hire purchase liabilities 31(a) 1,630 2,435 - - Amounts due to subsidiary companies (b) - - 82,727 115,106 Amounts due to non-controlling shareholders of subsidiary companies (c) 1,902 3,615 - - Payable for acquisition of property, plant and equipment 8,697 8,085 - - Deposits received from customers 28,044 56,061 - - 1,285,216 1,047,694 82,734 115,282 Progress billings for property development 110,120 147,763 - - Mah Sing Group Berhad Provision for affordable housing obligations (d) 65,853 46,362 - - Provision for operating lease commitments (e) 3,360 10,478 - - Accrued operating expenses 59,708 59,409 878 821 1,524,257 1,311,706 83,612 116,103 238 Annual Report 2017 Financial Statements 34. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (d) (c) (b) (a) TRADE ANDOTHER PAYABLES (continued) development ofpremiumhousingasincludedinNote20(b) onProperty DevelopmentCosts. of suchprovisionwouldresultintherecognitionacorresponding assetintheformofcommoncosts estimated amountofshortfallrelatingtoaffordablehousing obligationberecognisedasaprovision.Therecognition (“FRSIC”) Consensus17onDevelopmentofAffordable Housingon24November2011.Itrecommendsthatthe The MalaysianInstituteofAccountants(MIA)issuedFinancial Reporting Standards ImplementationCommittee Provision foraffordablehousingobligations Group. interest expenseamountingtoRM506,911(2016:RM186,023)hasbeenrecognisedintheprofitorlossof to 8.85%(2016:0.45%8.85%)perannumareunsecuredandrepayableondemand.Duringthefinancialyear, Amounts duetonon-controllingshareholdersofsubsidiarycompaniesbearinterestatratesrangingfrom0.98% Amounts duetonon-controllingshareholdersofsubsidiarycompanies in theprofitorlossofCompany. During the financial year, interest expense amounting to RM3,518,425 (2016: RM10,980,677) has been recognised Interest free Interest at3.25% rates: are unsecuredandrepayableondemand.Amountsduetosubsidiarycompaniessubjectthefollowinginterest Amounts duetosubsidiarycompaniesarosemainlyfrominter-companyadvancesandpaymentsonbehalfwhich Amounts duetosubsidiarycompanies The credittermsfortradepayablesoftheGrouprangefromcashbasisto90days(2016:days). Trade payables RM’000 82,727 76,823 5,904 2017 The Company 115,106 109,668 RM’000 5,438 2016 Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 34. TRADE AND OTHER PAYABLES (continued) (d) Provision for affordable housing obligations (continued) The movements of the provision for affordable housing obligations are as follows: The Group 2017 2016 RM’000 RM’000 At 1 January 46,362 42,224 Provision made during the financial year 28,586 5,136 Utilisation of provision during the financial year (9,095) (998) At 31 December 65,853 46,362 (e) Provision for operating lease commitments The Group leased back commercial and residential buildings sold by entering into Leaseback and Guarantee Rental Return Agreements with the property purchasers. Estimated lease commitments are based on the terms of the leaseback agreements. The remaining lease commitments not provided for are expected to be off-set with rental 239 income from the sub-lease of properties, and are disclosed in Note 46. The movement on the provision for operating lease commitments is as follows: The Group 2017 2016 RM’000 RM’000 At 1 January 10,478 17,514 Provision made during the financial year 1,399 1,173 Utilisation of provision during the financial year (8,517) (8,209) At 31 December 3,360 10,478 Mah Sing Group Berhad 240 Annual Report 2017 Financial Statements 35. 34. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS Foreign revolvingcredits (a) Local revolvingcredits SHORT-TERM BORROWINGS Indonesian Rupiah United States Dollar Others Ringgit Malaysia The currencyprofileoftradeandotherpayablesisasfollows: TRADE ANDOTHER PAYABLES (continued) revolving creditsisasfollows: and equipment,inventoriestradereceivablesofthesaidsubsidiarycompany. Thecurrencyprofileofforeign the foreignrevolvingcreditfacilitiesaresecuredbylegalchargesoverleaseholdlandandbuildings,plant,machinery subsidiary companyaresecuredbylegalchargesoverleaseholdlandandbuildings.Inthepreviousfinancialyear, The foreignrevolvingcreditfacilitiesfromalicensedbanktotallingRM7,152,000(2016:RM7,150,000)by Foreign revolvingcredits Indonesian Rupiah United States Dollar 1,285,216 1,256,312 RM’000 19,404 9,490 2017 The Group 10 1,047,694 1,017,407 RM’000 14,488 15,733 Note 2016 (b) (a) 66 RM’000 RM’000 RM’000 82,734 28,874 25,000 82,734 3,874 3,874 3,874 2017 2017 2017 The Company The Group The Group - - - - 115,282 115,282 RM’000 RM’000 RM’000 15,404 10,000 5,404 5,404 1,998 3,406 2016 2016 2016 - - - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 35. SHORT-TERM BORROWINGS (continued) (b) Local revolving credits As at 31 December 2017, the Group has secured local revolving credit facilities from licensed banks of RM110,000,000 (2016: RM96,500,000). The local revolving credit facilities are secured by specific debentures as interim security over completed properties and guarantees issued by the Company. In the previous financial year, the local revolving credit facilities are secured by a lien holder’s caveat over 3 commercial land, a charge in-escrow over the 3 commercial land, negative pledges over present and future assets, a deed of assignment over building and guarantees issued by the Company. (c) Local bankers acceptances As at 31 December 2017, the Group has secured local bankers acceptances facilities from licensed banks of RM9,000,000 (2016: RM15,000,000). The local bankers acceptances are secured against guarantees issued by the Company. In the previous financial year, the local bankers acceptances are secured against negative pledges over the present and future assets of a subsidiary company and guarantee issued by the Company. The fair value of the short-term borrowings approximate their carrying values at the end of the reporting period. During the financial year, the floating interest rates for the short-term borrowings are as follows: 241 The Group 2017 2016 % % Foreign revolving credits: - United States Dollar 6.50 6.50 - Indonesian Rupiah 11.00 - 11.50 11.50 Local revolving credits 3.90 - 5.30 4.60 36. BANK OVERDRAFTS The Group 2017 2016 RM’000 RM’000 Secured: Foreign - Indonesian Rupiah 1,105 - Mah Sing Group Berhad 242 Annual Report 2017 Financial Statements 37. 36. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS 38. Less: Bank overdrafts Investment inshort-termfunds Deposits withlicensedbanks Project accounts Cash andbankbalances CASH ANDCASH EQUIVALENTS Bank overdraftsbearinterestat11%(2016:7.65%to11.5%)perannum. companies andguaranteeissuedbytheCompany. The localbankoverdraftsfacilitiesaresecuredagainstnegativepledgesoverthepresentandfutureassetsofsubsidiary inventories andassignmentovertradereceivablesofaforeignsubsidiary company. the foreign bank overdrafts are secured against legal charges over certain property, plant and equipment, leasehold land, The foreignbankoverdraftsaresecuredbylegalchargesoverleaseholdlandandbuildings.Inthepreviousfinancialyear, (2016: RM6,500,000)andRM1,192,000RM666,000)respectively. As at31December2017,theGrouphassecuredoverdraftfacilitiesfromlocalandforeignlicensedbanksofRM6,500,000 BANK OVERDRAFTS (continued) and MSVinahavenointentiontocarryonbusinessoroperations inthefuture. with theBVI Government Register, inaccordancewiththeprovisionsofBVI Business CompaniesAct,2004.MSVietnam wholly-owned subsidiarycompaniesoftheCompanywhich havebeendormantformanyyears,arenolongerregistered With effectfrom1May2017,MahSingVietnam Ltd. (“MSVietnam”) andMahSingVina Ltd. (“MSVina”), bothindirect DEREGISTRATION OFSUBSIDIARY COMPANIES Deposits inTrustees’ Deposits inEscrowAccount Deposits pledgedascollateral Reimbursement Account 1,141,769 1,215,136 476,746 123,505 444,890 171,100 (67,285) RM’000 (6,022) (1,105) 2017 (60) The Group 880,766 923,769 133,039 227,451 452,808 110,471 (37,126) RM’000 (5,847) 2016 (30) - 524,460 545,791 476,746 (21,271) RM’000 60,110 8,935 2017 The Company (60) - - - 292,554 292,584 159,428 133,039 RM’000 2016 117 (30) - - - - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 39. ACQUISITION OF SUBSIDIARY COMPANIES 39.1 Acquisition of subsidiary company – Cosmowealth Housing Development Sdn. Bhd. On 26 May 2017, the Company’s wholly-owned subsidiary company, Nova Legend Development Sdn. Bhd. (“NLDSB”) entered into a Share Sale Agreement with LTS Properties (M) Sdn. Bhd., T.S. Law Corporation Sdn. Bhd. and Law Wai Cheong for the acquisition of 1,560,000 ordinary shares in Cosmowealth Housing Development Sdn. Bhd. (“CHDSB”) representing 78% equity interest in CHDSB for a total purchase consideration of RM54,960,000. Following the acquisition, CHDSB became a 78% owned subsidiary company of NLDSB. 39.2 Acquisition of subsidiary company – Cordova Land Sdn. Bhd. On 3 July 2017, the Company’s wholly-owned subsidiary company, Nature Legend Development Sdn. Bhd. (“NLSB”) entered into a Share Sale Agreement with Hazreeq Putra Bin Hasman and Maslinda Binti Othman for the acquisition of 500,000 ordinary shares in Cordova Land Sdn. Bhd. (“CLSB”) (“Sale Shares”) representing 100% equity interest in CLSB for a total purchase consideration of RM156,349,900. Subsequent to the execution of the Sales and Purchase Agreement between CLSB and Datuk Bandar Kuala Lumpur on 30 August 2017 and pursuant to the adjustment clauses of the Sale Shares, the Purchase Consideration has been adjusted to RM143,599,628. Following the acquisition, CLSB became a wholly-owned subsidiary company of NLSB. The details of the acquisition of the subsidiary companies are as follows: 243 The Group 2017 Note RM’000 Property, plant and equipment 14 47 Property development costs 20(b) 337,221 Cash and bank balances 2 Other receivables 111 Other payables and accruals (93,228) Deferred tax liabilities 33 (58,081) Net assets acquired 186,072 Non-controlling interest (639) Fair value of consideration transferred 185,433 Add: Fair value adjustment on deferred consideration 13,127 Total purchase consideration 198,560 Less: Balance purchase consideration (137,100) Less: Cash and cash equivalents (2) Net cash outflow on acquisition of subsidiary companies 61,458 Mah Sing Group Berhad The financial results of CHDSB and CLSB since the beginning of the financial year are not material to the Group. 244 Annual Report 2017 Financial Statements 41. 40. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS Net cashinflowfromdisposalofsubsidiarycompany Less: Cashandcashequivalents Total proceedfromdisposal Add: Gainondisposal Fair valueofconsiderationtransferred Non-controlling interest Net assetsdisposed Other payablesandaccruals Trade andotherreceivables Current taxassets Cash andbankbalances Land heldforproperty development 41.1 NEW INCORPORATION OFSUBSIDIARY COMPANIES Property, plantandequipment The detailofthedisposalsubsidiaryareasfollows: CCDSB ceasedtobeasubsidiarycompanyoftheCompany. CCDSB foratotalcashconsiderationofRM6,557,000.Thetransactioncompletedonthesamedateandaccordingly 1,632,000 ordinarysharesinConventionCityDevelopmentSdn.Bhd.(“CCDSB”), representing51%equityinterestin On 3 July 2017, the Company entered into a Share Sale Agreement withDiverse Capital Sdn. Bhd. for the disposal of Disposal ofsubsidiarycompany–ConventionCityDevelopmentSdn.Bhd. DISPOSAL OFSUBSIDIARY COMPANY 11 December2017. HKD0.01 each,ofwhich100ordinaryshareseach havebeenissuedandfullypaid-upbytheCompanyon Mah SingInternational’s authorisedsharecapitalconsistsofHKD380,000dividedinto38,000,000ordinaryshares of Islands undertheCompaniesLaw ofCaymanIslandsasanexempted companylimitedbyshares. During the financial year, Mah SingInternational Limited(“MahSingInternational”)was incorporatedinCayman New incorporationofsubsidiarycompany–MahSingInternational Limited 20(a) Note 14 The Group (48,890) RM’000 41,727 (1,383) (2,712) 6,472 6,557 7,940 1,329 4,345 2017 (85) 85 16 5 Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 41. NEW INCORPORATION OF SUBSIDIARY COMPANIES (continued) 41.2 New incorporation of subsidiary company – Mah Sing Holdings Limited During the financial year, Mah Sing Holdings Limited (“Mah Sing Holdings”) was incorporated in the Territory of the British Virgin Islands under BVI Business Companies Act 2004 as a private company limited by shares. Mah Sing Holdings’ authorised share capital consists of USD50,000 divided into 50,000 ordinary shares of USD1.00 each, of which 10 ordinary shares of USD1.00 each have been issued and fully paid-up by the Company’s wholly- owned subsidiary company, Mah Sing International on 12 December 2017. The incorporation of the abovementioned subsidiary companies do not have any material effect on the earnings or net tangible assets of the Group and of the Company for the financial year ended 31 December 2017. 42. CONTINGENT LIABILITIES The Group The Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 245 Corporate guarantees issued to financial institutions for credit facilities granted to subsidiary companies - - 2,299,283 2,610,041 Corporate guarantees issued to third parties for supply of goods - - 453 1,123 Bank guarantees issued to third parties 91,840 77,952 - - Claims arising from contract with third parties (Note 43) 3,811 - - - 95,651 77,952 2,299,736 2,611,164 43. MATERIAL LITIGATION In the ordinary course of business, certain companies within the Group are defendants in various legal actions which have no material impact. In the opinion of the Directors, after taking appropriate legal advice, the outcomes of such actions are remote and therefore, no provisions have been made in the financial statements. Mah Sing Group Berhad 246 Annual Report 2017 Financial Statements 44. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (b) (a) CAPITAL RISKMANAGEMENT, FINANCIALINSTRUMENTS ANDFINANCIALRISKS Net debt-to-equityratio Total equity (Net cash)/Netdebt Less: Total borrowings The netgearingratioattherespectivereportingdatesareasfollows: Net GearingRatio year ended31December2017. new borrowingsorreduceborrowings.Nochangesweremadeintheobjectives,policiesprocessesduring dividend paymenttoshareholders,returncapitalissuenewshares,buybackissuedobtain the riskcharacteristicofunderlyingassets.To maintainoradjustthecapitalstructure, theGroupmayadjust The Groupmanagesitscapitalstructureandmakes adjustments toitinlightofchangeseconomicconditionsand reserves, Perpetual Sukuk,Perpetual Securitiesandnon-controllinginterestsasdetailedinNotes24to28). investment inshort-termfundsasdetailedNotes23,30,31(a),35and36)equity(comprisingissuedcapital, structure oftheGroupandCompanycomprisesnetdebt(borrowingsoffsetbydeposit,cash,bankbalances business so that it can continue to maximise returns for shareholders and benefits for other stakeholders. The capital base inordertomaintaininvestors,creditorsandmarket confidenceandtosustainfuturedevelopmentofthe The primaryobjectiveoftheGroup’s capitalmanagementistoensurethatitmaintainsahealthyandoptimal Capital Management Deposit, cash,bankbalancesand investment inshort-termfunds (1,216,241) 4,647,609 (431,763) 784,478 RM’000 2017 N/A The Group 3,836,127 1,005,650 (923,769) RM’000 81,881 2016 0.02 3,541,075 (545,791) (545,791) RM’000 2017 The Company N/A - 2,827,383 (292,584) (292,584) RM’000 2016 N/A - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 44. CAPITAL RISK MANAGEMENT, FINANCIAL INSTRUMENTS AND FINANCIAL RISKS (continued) (c) Categories of Financial Instruments The Group The Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Financial assets At FVTPL: Investment in short-term funds 476,746 133,039 476,746 133,039 Loans and receivables: Trade and other receivables 697,782 576,492 2,885,987 2,454,107 Deposits, cash and bank balances 739,495 790,730 69,045 159,545 1,914,023 1,500,261 3,431,778 2,746,691 Financial liabilities Other financial liabilities: 247 Trade and other payables 1,305,594 1,066,275 83,612 116,103 Loans and borrowings 784,478 1,005,650 - - Deferred payables 65,148 1,883 - - 2,155,220 2,073,808 83,612 116,103 Mah Sing Group Berhad 248 Annual Report 2017 Financial Statements 44. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (d) CAPITAL RISKMANAGEMENT, FINANCIALINSTRUMENTS ANDFINANCIALRISKS(continued) (i) cover themanagementoftheserisks. risk the financial riskmanagementpolicies.TheBoardregularlyreviewstheserisksandapprovesthetreasurypolicies,which managing Financial riskmanagementiscarriedoutthroughreviews,internalcontrolsystemsandadherencetoGroup for procedures and Group’s exposuretorisksand/orcostsassociated with thefinancing,investingandoperatingactivitiesofGroup. policies The Grouphasformulatedafinancialriskmanagementframeworkwhoseprincipalobjectiveistominimisethe objectives, management Risk • • • • The Grouphasexposuretothefollowingrisksfromitsuseoffinancial instruments: Financial RiskManagementObjectivesandPolicies Cash flowrisk Liquidity risk Credit risk - - Market risk currencies otherthanitsfunctionalcurrency. The Groupisexposedtoforeigncurrencyriskoncertaintransactionsenteredintobysubsidiarycompaniesin to changesinforeignexchange rates. Foreign currencyriskisthethatfairvalueorfuturecashflowsofafinancialinstrumentwillfluctuatedue risk currency Foreign Market risk Interest raterisk Foreign currencyrisk Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 44. CAPITAL RISK MANAGEMENT, FINANCIAL INSTRUMENTS AND FINANCIAL RISKS (continued) (d) Financial Risk Management Objectives and Policies (continued) (i) Market risk (continued) Foreign currency risk (continued) Exposure to foreign currency risk The Group’s exposures to foreign currency risk (a currency which is other than the functional currency of the subsidiary companies) arising from foreign balances as at the end of the reporting period is represented by the following carrying amounts: RM/AUD RM/SGD RM/USD RM/THB RP/USD RP/THB Total The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 2017 Trade and other receivables 874 1,181 14,583 43 - - 16,681 Trade and other 249 payables - - (6,476) - (3,014) (10) (9,500) Net exposure 874 1,181 8,107 43 (3,014) (10) 7,181 2016 Trade and other receivables 626 1,233 17,793 64 - - 19,716 Loans and borrowings - - - - (3,406) - (3,406) Trade and other payables - - (9,703) - (4,786) (66) (14,555) Net exposure 626 1,233 8,090 64 (8,192) (66) 1,755 Mah Sing Group Berhad 250 Annual Report 2017 Financial Statements 44. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (d) CAPITAL RISKMANAGEMENT, FINANCIALINSTRUMENTS ANDFINANCIALRISKS(continued) (i) Financial RiskManagementObjectivesandPolicies (continued) RP/THB RP/USD RM/THB RM/USD RM/SGD RM/AUD The Group period, therewouldbeacomparableoppositeeffectontheGroup’s profitaftertax. For a5%(2016:6%)weakening ofRMandRPagainsttheaboverelevant currenciesattheendofreporting Foreign currency risk (continued) risk currency Foreign respectively. borrowings. Thecarryingamountsoftheseloansandborrowings aredisclosedinNotes30,35and36, risk The Group is exposed to interest rate risk through the impact of rate changes on interest bearingloansand rate interest to Exposure management policyisaimedatoptimisingnetinterestcost and reducing volatility. The Group’s exposure to interest rate risk arises primarily from the loans and borrowings. The interest rate risk rate Interest other variablesheldconstant. of thefollowingfunctionalcurrencyGroupentitiesagainstrespectiveforeigncurrencies,withall The following table demonstrates the sensitivity of the Group’s profit aftertaxfora 5%(2016: 6%)strengthening Sensitivity analysis for foreign currency risk currency foreign for analysis Sensitivity Market risk(continued) Group profitaftertax RM’000 2017 (308) 115 (45) (33) (2) - RM’000 2016 (369) 374 (56) (29) (3) 3 Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 44. CAPITAL RISK MANAGEMENT, FINANCIAL INSTRUMENTS AND FINANCIAL RISKS (continued) (d) Financial Risk Management Objectives and Policies (continued) (i) Market risk (continued) Interest rate risk (continued) Cash flow sensitivity analysis for variable rate instruments The following table demonstrates the sensitivity to a reasonably possible change in interest rates with all other variables held constant, of the Group’s profit after tax through the impact on interest expense on floating rate loans and borrowings. Change in Profit after tax interest rate 2017 2016 basis points RM’000 RM’000 The Group Cost of fund - 25 1,485 1,903 251 Cost of fund + 25 (1,485) (1,903) (ii) Credit risk Credit risk refers to the risk that counterparty will default on its contractual obligation resulting in financial loss to the Group. The Group’s exposure to credit risk arises principally from trade and other receivables and financial guarantees given to third parties for supply of goods. Loans and receivables Risk management objectives, policies and processes for managing the risk The Group extends credit to its customers based upon careful evaluation of the customer’s financial condition and credit history. Trade receivables are monitored on an ongoing basis by the Group’s credit control department. Mah Sing Group Berhad 252 Annual Report 2017 Financial Statements 44. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (d) CAPITAL RISKMANAGEMENT, FINANCIALINSTRUMENTS ANDFINANCIALRISKS(continued) (iii) (ii) Financial RiskManagementObjectivesandPolicies (continued) Financial guarantee Financial (continued) receivables and Loans capital. assets and liabilities and to maintain sufficient credit facilities for contingent funding requirement of working The GroupandtheCompanypractiseprudentliquidityrisk management tominimisethemismatchoffinancial of funds. Liquidity risk is theriskthatanentitywillencounterdifficultyinmeetingitsfinancialobligationsduetoashortage Liquidity risk bank guaranteesissuedtothirdpartiesandfinancialinstitutions as attheendofreportingperiod. RM2,299,736,270 (2016: RM77,951,949andRM2,611,164,144) respectively, representing thecorporateand The Group’s andtheCompany’s maximumexposuretocreditriskamountRM91,839,848and risk credit to Exposure of thesubsidiarycompaniesregularlyandrepaymentsmadeby subsidiarycompanies. facilities andsupplyofgoodsrespectivelygrantedtosubsidiarycompanies.TheCompanymonitorstheresults The Group and the Company provide financial guarantee to financial institutions and third parties for credit from tradeandotherreceivablesisrepresentedbythecarryingamountsinstatementsoffinancialposition. At theendofreportingperiod,Group’s andtheCompany’s maximumexposuretocreditriskarising Risk management objectives, policies and processes for managing the risk the managing for processes and policies objectives, management Risk risk credit to Exposure Credit risk(continued) Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 44. CAPITAL RISK MANAGEMENT, FINANCIAL INSTRUMENTS AND FINANCIAL RISKS (continued) (d) Financial Risk Management Objectives and Policies (continued) (iii) Liquidity risk (continued) Analysis of financial instruments by remaining contractual maturities The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities at the end of the reporting period based on contractual undiscounted repayment obligations: Within One to Over one year five years five years Total RM’000 RM’000 RM’000 RM’000 2017 The Group Non-interest bearing Trade and other payables 997,287 180,226 - 1,177,513 Long-term and deferred payables 180,560 73,133 - 253,693 253 Financial guarantee* (Note 42) - - - - Interest bearing Trade and other payables 1,902 - - 1,902 Loans and borrowings 179,353 666,907 20,144 866,404 Total undiscounted financial liabilities 1,359,102 920,266 20,144 2,299,512 The Company Non-interest bearing Trade and other payables 6,789 - - 6,789 Financial guarantee* (Note 42) - - - - Interest bearing Trade and other payables 76,823 - - 76,823 Total undiscounted financial liabilities 83,612 - - 83,612 Mah Sing Group Berhad 254 Annual Report 2017 Financial Statements 44. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (d) CAPITAL RISKMANAGEMENT, FINANCIALINSTRUMENTS ANDFINANCIALRISKS(continued) (iii) Financial RiskManagementObjectivesandPolicies (continued) The Group 2016 * Total undiscountedfinancialliabilities Trade andotherpayables bearing Interest Financial guarantee* (Note42) Trade andotherpayables bearing Non-interest The Company Total undiscountedfinancialliabilities Loans andborrowings Trade andotherpayables bearing Interest Financial guarantee* (Note42) Long-term anddeferredpayables Trade andotherpayables bearing Non-interest Analysis of financial instruments by remaining contractual maturities (continued) maturities contractual remaining by instruments financial of Analysis Liquidity risk(continued) RMNil. to therelevantcontractsenteredbyGrouporCompany. Consequently, theamountincludedis provided bytheGroupandCompanytobecalledupon orclaimedbyanycounterpartypursuant At theendof reportingperiod,noeventshavearisenwhichmaycausetheFinancialGuarantees 1,004,269 one year 116,103 109,668 189,286 806,284 RM’000 Within 6,435 3,615 5,084 - - 1,189,246 five years 880,138 309,108 RM’000 One to ------five years RM’000 52,800 52,800 Over ------2,246,315 1,122,224 1,115,392 116,103 109,668 RM’000 6,435 3,615 5,084 Total - - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 44. CAPITAL RISK MANAGEMENT, FINANCIAL INSTRUMENTS AND FINANCIAL RISKS (continued) (d) Financial Risk Management Objectives and Policies (continued) (iv) Cash flow risk The Group and the Company review their cash flow position regularly to manage the exposure to fluctuations in future cash flows associated with their monetary financial instruments. (v) Fair value The carrying amounts of current financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date. The fair value of long-term financial assets and liabilities are determined by the present value of future cash flow estimated and discounted using the current interest rates for similar instruments at the end of the reporting period. There is no material difference between the fair values and carrying values of these assets and liabilities at the end of the reporting period. The Group’s long-term loans bear interest at floating rate and hence their carrying amounts approximates fair 255 values. The table below analyses fair value measurement of financial instruments which are categorised into Levels 1 to 3 as disclosed in Note 3. Fair value of financial instruments that are measured at fair value in the statements of financial position at the end of the reporting period Level 1 Level 2 Level 3 Total RM’000 RM’000 RM’000 RM’000 2017 The Group and the Company Financial assets Investment in short-term funds 476,746 - - 476,746 2016 The Group and the Company Financial assets Investment in short-term funds 133,039 - - 133,039 Mah Sing Group Berhad 256 Annual Report 2017 Financial Statements 44. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS 45. (d) CAPITAL RISKMANAGEMENT, FINANCIALINSTRUMENTS ANDFINANCIALRISKS(continued) (iii) (ii) (i) For managementpurposes,theGroupisorganisedinto followingoperatingdivisions: resources tothesegmentandassessingitsperformance. reporting structurethatareregularlyreviewedbytheGroup’s chiefoperatingdecisionmaker forthepurposesofallocating Segment information is presented in respect of theGroup’s businesssegments, which reflects the Group’s internal SEGMENT REPORTING Investment holdingandothers Plastics Properties (v) Financial RiskManagementObjectivesandPolicies (continued) 31 December2016. There isnotransferbetweenLevel 1and2fairvaluesduringthefinancialyearsended31December2017 Long-term deferredpayables Financial liabilities The Group 2016 Long-term deferredpayables Financial liabilities Trade andotherreceivables Financial assets The Group 2017 at the end of the reporting period (but fair value disclosures are required) are disclosures value fair (but period reporting the of end the at Fair value of financial instruments that are not measured at fair value in the statements of financial position position financial of statements the in value fair at measured not are that instruments financial of value Fair Fairvalue(continued) - - - services andtradingofbuilding materials investment holdingoperations, provisionofmanagementandpropertysupport manufacture, assembly andtradingofarangeplasticmouldedproducts properties investment anddevelopmentofresidential,commercial andindustrial RM’000 Level 1 - - - RM’000 66,564 31,957 Level 2 3,658 RM’000 Level 3 - - - RM’000 66,564 31,957 3,658 Total Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 45. SEGMENT REPORTING (continued) Inter-segment revenue comprises dividend income, interest charges and trading of plastic moulded products. Information regarding the Group’s reportable segments is presented below: (a) Business Segments Investment Holding and Properties Plastics Others Elimination Group 2017 RM’000 RM’000 RM’000 RM’000 RM’000 Revenue External revenue 2,554,426 296,205 65,160 - 2,915,791 Inter-segment revenue - - 266,862 (266,862) - 2,554,426 296,205 332,022 (266,862) 2,915,791 Results Operating profit 432,290 15,343 28,912 - 476,545 Interest income 12,613 187 72 - 12,872 257 Finance costs (15,439) (1,596) (99) - (17,134) Profit before tax 429,464 13,934 28,885 - 472,283 Income tax expense (113,122) Profit for the year 359,161 Other Information Additions to non-current assets 148,330 20,372 183 - 168,885 Depreciation and amortisation 5,134 15,096 268 - 20,498 Assets and Liabilities Segment assets 6,173,496 242,053 568,125 - 6,983,674 Current and deferred tax assets 156,513 Total assets 7,140,187 Segment liabilities 2,284,925 87,187 9,192 - 2,381,304 Current and deferred tax liabilities 111,274 Total liabilities 2,492,578 Mah Sing Group Berhad 258 Annual Report 2017 Financial Statements 45. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (a) SEGMENT REPORTING (continued) Total liabilities Current anddeferredtaxliabilities Segment liabilities Total assets Current anddeferredtaxassets Segment assets Assets andLiabilities Depreciation andamortisation Additions tonon-currentassets Other Information Profit fortheyear Income taxexpense Profit/(Loss) beforetax Finance costs Interest income Operating profit/(loss) Results Inter-segment revenue External revenue Revenue 2016 Business Segments(continued) Properties 2,226,255 5,531,494 2,626,784 2,626,784 122,682 476,803 470,305 RM’000 10,772 (4,274) 4,672 - 232,472 259,401 259,397 RM’000 Plastics 86,251 13,075 34,032 14,674 15,916 (1,450) 208 4 Holding and Investment 316,229 564,146 492,710 RM’000 12,997 71,436 Others (8,538) (8,280) 1,078 (258) 219 - Elimination (492,714) (492,714) RM’000 ------6,080,195 2,384,028 2,325,503 6,220,155 2,957,617 2,957,617 (122,627) 139,960 157,792 482,939 360,312 477,941 RM’000 58,525 17,966 10,980 (5,982) Group - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 45. SEGMENT REPORTING (continued) (a) Business Segments (continued) Segment assets Segment assets consist of property, plant and equipment, prepaid lease payments, investment properties, land held for property development, intangible assets, property development costs, inventories and other current assets that are used in the operating activities of the segment and exclude current and deferred tax assets. Segment liabilities Segment liabilities include loans and borrowings, trade payables and other payables, long-term and deferred payables and redeemable convertible secured bonds and exclude current and deferred tax liabilities. Additions to non-current assets Additions to non-current assets comprise additions to property, plant and equipment, prepaid lease payments, investment properties and land held for property development. (b) Geographical information 259 With the exception of a manufacturing set up for plastics moulded products in Indonesia, the entire Group’s active business operations are located in Malaysia. Revenue by geographical market The following is an analysis of the Group’s external sales by location of customers, irrespective of the origin of the goods/services: The Group 2017 2016 RM’000 RM’000 Malaysia 2,495,129 2,489,401 Indonesia 111,886 123,241 Singapore 86,870 103,527 China 63,379 86,093 Taiwan 64,863 65,586 Other countries 93,664 89,769 2,915,791 2,957,617 Mah Sing Group Berhad 260 Annual Report 2017 Financial Statements 45. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (b) SEGMENT REPORTING (continued) (c) geographical areasinwhichtheassetsarelocated: The followingareanalysisofthecarryingamountsegmentassetsandadditionstonon-currentby Segment assetsandadditionstonon-currentbygeographicalmarket Geographical information(continued) There isnosinglecustomerthatcontributed10%ormoretotheGroup’s revenuefor2017and2016. Major customer China Indonesia Malaysia Singapore 6,983,674 6,918,296 RM’000 64,828 of segmentassets Carrying amount 2017 546 4 6,080,195 6,015,675 RM’000 63,910 2016 598 12 168,885 167,607 RM’000 non-current assets 1,278 2017 Additions to - - 157,792 157,743 RM’000 2016 49 - - Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 46. OPERATING LEASE COMMITMENTS As Lessee – for the lease of commercial and residential buildings The operating lease commitments for rental of commercial and residential buildings (net of lease rental receivables from sublease) contracted for as at reporting date are as follows: Lease rental payables Lease rental receivables Net 2017 2016 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Commercial properties: Less than one year 3,677 7,164 (487) (1,002) 3,190 6,162 One to two years 595 3,135 (428) (1,313) 167 1,822 4,272 10,299 (915) (2,315) 3,357 7,984 Residential properties: Less than one year 3 2,801 - (310) 3 2,491 One to two years - 3 - - - 3 3 2,804 - (310) 3 2,494 261 4,275 13,103 (915) (2,625) 3,360 10,478 Provision for future operating lease (Note 34) (3,360) (10,478) - - During the financial year, the Group has recognised in profit or loss leaseback rental and provision for operating lease commitments amounting to a total of RM1,686,812 (2016: RM1,173,011) and rental income from sublease amounting to RM204,471 (2016: RM159,400). Mah Sing Group Berhad 262 Annual Report 2017 Financial Statements 46. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS 47. - - - Approved andcontractedfor: One tothreeyears Less thanoneyear The Group One tothreeyears Less thanoneyear The Group as atreportingdatearefollows: The futureminimumleasecommitmentforrentalofpremisesandmotorvehiclesundernon-cancellableoperatingleases As Lessee –fortheleaseofpremisesandmotorvehicles OPERATING LEASE COMMITMENTS (continued) under non-cancellableoperatingleasesareasfollows: The Groupleasesoutitsinvestmentpropertiesandcommercialproperties.futureminimumleaserentalreceivables As Lessor –fortheleaseofinvestmentpropertiesandcommercial CAPITAL COMMITMENTS Development Agreementforproposeddevelopmentlandin Kota Kinabalu Proposed acquisitionofdevelopmentland Acquisition ofproperty, plantandequipment Lease rentalreceivables Lease rentalpayables RM’000 RM’000 RM’000 36,642 36,642 3,564 1,087 2,477 6,372 1,887 4,485 2017 2017 2017 The Group - - 463,766 158,740 294,729 RM’000 RM’000 RM’000 10,297 4,999 1,981 3,018 6,729 2,861 3,868 2016 2016 2016 Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 48. RELATED PARTY DISCLOSURES (a) Significant related party disclosures during the financial year are as follows: The Group 2017 2016 RM’000 RM’000 Transactions with Directors of the Company and/or companies in which they have interests (i) Rental expenses paid/payable to Principal View Sdn Bhd 1,538 1,538 (ii) Maintenance charges paid/payable to Harian Madu Sdn Bhd 178 175 (iii) Sales of plastic products to Mah Sing Foundation 24 20 (iv) Sale of a completed property to a family member of a Director of the Company 3,977 - Transactions with Directors of the subsidiary companies and/or companies in which they have interests 263 (i) Professional fees paid/payable to MPS Services (Pte) Ltd 3 3 (ii) Consultancy fees paid/payable to M. Kiandee Architect 638 1,565 Transactions with non-controlling interests (i) Interests paid/payable to: - PT Kingsanindo Perkasa Indah 14 7 - Diverse Capital Sdn Bhd 450 179 - T.S. Law Corporation Sdn Bhd 43 - The Company 2017 2016 RM’000 RM’000 Transactions with subsidiary companies (i) Finance costs on amount owing to subsidiary companies 3,518 10,981 (ii) Interest income on amount owing by subsidiary companies 114,156 98,260 Mah Sing Group Berhad 264 Annual Report 2017 Financial Statements 48. FOR THEFINANCIALYEARENDED 31 DECEMBER 2017 NOTES TO THEFINANCIALSTATEMENTS (i) Name ofrelatedparty Related partyandrelationship RELATED PARTY DISCLOSURES (continued) (ii) (iii) (iv) (v) (vii) (vi) (b) (viii) Directors’ fees Post employmentbenefits -EPF Total short-termemploymentbenefits Benefits-in-kind Other emoluments Directors oftheCompany Principal ViewSdnBhd Harian MaduSdnBhd Mah SingFoundation MPS Services(Pte)Ltd M. KiandeeArchitect Diverse CapitalSdnBhd PT KingsanindoPerkasa Indah Key managementpersonnelcompensation T.S. Law CorporationSdnBhd - Relationship ------Company inwhichTan SriDato’ SriLeong HoyKum hassubstantial Company inwhichthedirectorsandshareholdersarebrothers-in-law to A companylimitedbyguaranteeinwhichJen.Tan SriYaacob Bin A firminwhichAlisonSee Lay Eng, directorofasubsidiarycompany, A firminwhichMelvinyeoKiandee, directorofaformersubsidiarycompany, Non-controlling interestofaformersubsidiarycompany, ConventionCity Non-controlling interestofP.T. MahSingIndonesia Non-controlling interestofCosmowealthHousingDevelopmentSdn Bhd financial interest Tan SriDato’ SriLeong HoyKum Mat Zain(R)isatrustee is adirectorofthefirm is adirectorofthefirm Development SdnBhd RM’000 25,893 25,639 28,952 3,059 2017 128 126 The Group RM’000 24,423 24,173 27,290 2,867 2016 124 126 RM’000 2017 The Company 126 755 594 809 35 54 RM’000 2016 126 734 573 769 35 35 Financial Statements NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 48. RELATED PARTY DISCLOSURES (continued) (b) Key management personnel compensation (continued) Other key management personnel (including Directors of the subsidiary companies) The Group The Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 Remuneration 9,130 9,294 - - Benefits-in-kind 246 267 - - Total short-term employment benefits 9,376 9,561 - - Post employment benefits - EPF 1,036 1,062 - - 10,412 10,623 - - Total compensation 39,364 37,913 809 769 49. RECLASSIFICATION 265 The following amounts previously reported in the 2016 financial statements have been reclassified to conform to the 2017 financial statement presentation. Such reclassification has no effect on net assets. As reported Reclassification As reclassified The Group RM’000 RM’000 RM’000 Statement of profit and loss Administrative and other expenses (177,715) 365 (177,350) Finance income 9,696 1,284 10,980 Finance costs (4,333) (1,649) (5,982) Cash flows from operating activities Adjustments for: Amortised cost adjustments 365 (365) - Finance costs 69,851 1,649 71,500 Interest income (26,786) (1,284) (28,070) Mah Sing Group Berhad 266 Annual Report 2017 Financial Statements Kuala Lumpur Director DATUK HOHONSANG Director JEN. TAN SRIYAACOB BINMAT ZAIN (R) in accordancewitharesolutionoftheBoardDirectorsdated28 February2018. Signed onbehalfoftheBoard Act, 2016inMalaysia. Malaysian FinancialReporting Standards, InternationalFinancialReporting Standards andtherequirementsofCompanies performance andcashflowsoftheGroupCompanyforfinancialyearendedonthatdateinaccordancewith to giveatrueandfairviewofthefinancialpositionGroupCompanyasat31December2017financial state that,intheopinionofDirectors,accompanying financial statementssetoutonpages149to265aredrawnupsoas We, Jen.Tan SriYaacob BinMatZain(R)andDatukHoHonSang,beingtwoof theDirectorsofMAH SING GROUP , BERHAD STATEMENT BY DIRECTORS Financial Statements DECLARATION BY THE OFFICER PRIMARILY RESPONSIBLE FOR THE FINANCIAL MANAGEMENT OF THE COMPANY I, Loo Kean Leong, being the Officer primarily responsible for the financial management MAHof SING GROUP BERHAD, do solemnly and sincerely declare that to the best of my knowledge and belief, the accompanying financial statements set out on pages 149 to 265 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960. LOO KEAN LEONG Subscribed and solemnly declared at Kuala Lumpur this 28 February 2018. Before me, OOI AH BAH 267 No. W152 COMMISSIONER FOR OATHS Mah Sing Group Berhad 268 Annual Report 2017 Additional Information Selangor DarulEhsan 42000 Port Klang Bandar SultanSuleiman Kawasan Perindustrian Lot 9,LingkaranSultanMohamed1 Location AS AT 31DECEMBER2017 PROPERTIES OWNED BY THEGROUP 57100 Kuala Lumpur 163 JalanSungaiBesi Wisma MahSing Bekasi, Indonesia Cikarang IndustrialEstate J1 JababekaXIIB,BlokW17-20 Kawasan IndustriJababeka Negeri Selangor Daerah Petaling Mukim SungaiBuloh Mah SingIntegratedIndustrialPark Selangor DarulEhsan Daerah HuluLangat Mukim Cheras Lot 3442,Lot 670&Lot 671 Bayu Sekamat,Cheras Hijauan Residence & Johor DarulTakzim Daerah JohorBahru Mukim Tebrau Austin Perdana Johor DarulTakzim Daerah JohorBahru Mukim Plentong Sierra Perdana Selangor DarulEhsan Daerah Klang Mukim Kapar Aman Perdana 44 units office lots 44 unitsofficelots (Age: 21years) (Age: 26years) (Age: 20years) and 82 units of and 82unitsof Development Development Development Development Development Description parking lots Residential Residential Industrial Industrial Industrial Industrial Building Building Mixed Mixed Mixed Date ofValuation 2013 and2017 21-Dec-2005 29-Sep-2008 25-Jun-1997 30-Jun-2003 18-Oct-1999 30-Oct-2006 30-Oct-2006 1995, 2012, 1995, 2012, Acquisition/ 8-Aug-1992 2-Apr-2004 Date of Date of 11-Dec-2096) 29-Jun-2022) 1-Mar-2019) (expiring on (expiring on (expiring on Leasehold Leasehold Leasehold Freehold Freehold Freehold Freehold Freehold Tenure Land Area (Acre) 54.04 36.83 36.83 27.48 7.00 7.00 5.16 3.18 - - 138,607,578 28,790,870 28,790,870 52,932,334 52,932,334 27,735,252 4,652,009 4,652,009 Value (RM) 9,158,062 3,646,752 Net Book 856,947 856,947 Additional Information PROPERTIES OWNED BY THE GROUP AS AT 31 DECEMBER 2017 (CONTINUED) Date of Acquisition/ Land Area Net Book Location Description Date of Valuation Tenure (Acre) Value (RM) Icon Residence, Mont’ Kiara Residential 28-Feb-2007 Freehold - 51,510,800 Lot 55331, Mukim Batu Development Daerah Kuala Lumpur Wilayah Persekutuan Southbay Penang Mixed Development 13-Jun-2007 Freehold 21.18 260,439,104 Mukim 12, Daerah Barat Daya Negeri Pulau Pinang Southgate Commercial Centre Commercial 27-Jul-2007 Freehold - 1,662,327 Seksyen 92 Development Bandar Kuala Lumpur Sri Pulai Perdana 2 (SPP2) Mixed 13-Jun-2008 Freehold - 987,511 Mukim Kulai, Tempat Kangkar Pulai Development Daerah Kulaijaya Johor Darul Takzim StarParc Point Commercial 10-Nov-2008 Freehold (JV) - 6,242,039 269 GM 2018, Lot 21717, Mukim Setapak Development (JV date) Tempat Kampong Pasir Werdieburn Jalan Genting Klang, Daerah KL State of Wilayah Persekutuan KL Garden Residence, Cyberjaya Residential 12-Aug-2009 Freehold 12.82 79,228,302 Mukim Dengkil Development Daerah Sepang Selangor Darul Ehsan Perdana Residence 2, Selayang Residential 28-Oct-2009 Freehold 3.73 4,556,709 Mukim Batu, Bandar Selayang Development Daerah Gombak Selangor Darul Ehsan Petaling Jaya Commercial Hub Residential 28-Oct-2009 Leasehold 10.27 211,537,161 Lot No. P.T. 245 & Mixed (expiring on Mukim Damansara Development 29-Sep-2111) Daerah Petaling Selangor Darul Ehsan Mah Sing Group Berhad 270 Annual Report 2017 Additional Information Negeri WilayahPersekutuan Daerah Kuala Lumpur GRN 71445Lot 293,Seksyen89 M-Suites Selangor DarulEhsan Daerah Sepang Mukim Dengkil Garden Plaza,Cyberjaya Pulau Pinang Daerah TimurLaut Bandar Georgetown Lot No. 951,Seksyen13 Icon Residence, Georgetown,Penang Location (CONTINUED) AS AT 31DECEMBER2017 PROPERTIES OWNED BY THEGROUP Johor DarulTa’zim Daerah JohorBahru Mukim Tanjung Kupang Mah Singi-Parc Selangor DarulEhsan Daerah Sepang Mukim Dengkil Clover, Cyberjaya Selangor DarulEhsan Daerah Petaling Mukim ofPetaling Kinrara Residence Pulau Pinang Batu Ferringhi Daerah TimurLaut Mukim 17 Ferringhi Residence, Penang Negeri WilayahPersekutuan Daerah Kuala Lumpur Mukim Ampang M-City Selangor DarulEhsan Daerah Petaling Pekan BaruSubang Star Avenue @D’sara Development Development Development Development Development Development Development Development Development Commercial Commercial Commercial Commercial Commercial Description Residential Residential Residential Residential Industrial Industrial Mixed Date ofValuation 23-Nov-2010 22-Feb-2010 22-Apr-2010 12-Apr-2011 Acquisition/ 3-Nov-2010 2-Dec-2009 3-Oct-2010 9-Jul-2010 9-Jul-2010 Date of Date of 31-Aug-2108 & 26-June-2111) 6-May-2111 & 12-Apr-2111) (expiring on (expiring on (expiring on (expiring on Leasehold Leasehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Tenure Land Area (Acre) 20.79 20.79 30.29 3.38 3.38 ------222,175,380 222,175,380 224,717,881 150,000,000 150,000,000 36,799,704 36,799,704 71,651,544 71,651,544 71,703,523 71,703,523 3,016,741 3,016,741 4,754,186 4,754,186 2,030,190 2,030,190 Value (RM) Net Book Additional Information PROPERTIES OWNED BY THE GROUP AS AT 31 DECEMBER 2017 (CONTINUED) Date of Acquisition/ Land Area Net Book Location Description Date of Valuation Tenure (Acre) Value (RM) Marvellous Vantage Commercial 15-Apr-2011 Freehold - 7,210,640 5 units at Southgate Commercial Centre (5 units) Seksyen 92 (Age: 7 years) Bandar Kuala Lumpur M Residence @ Rawang Mixed 5-Oct-2011 Freehold 133.57 115,993,682 Lot 1950, 1316, 1952 & 1266 Development Mukim Rawang Daerah Gombak Negeri Selangor Kawasan Industrik Mitrakarawang Industrial 1-Nov-2011 Leasehold 6.00 11,154,843 Jalan Mitra Timur II Building (expiring on Plot D-18-20 & 37-39 (Age: 6 years) 12-Dec-2037) Karawang 41361 Indonesia M Residence 2 @ Rawang Residential 29-Feb-2012 Leasehold 5.11 94,374,632 Bandar Kundang Development (expiring on Daerah Gombak 15-Feb-2104) 271 Negeri Selangor Sutera Avenue Mixed 26-Mar-2012 Leasehold 0.64 124,016,404 Lot 37, Harbour City Development (expiring on Kota Kinabalu 31-Dec-2096) Negeri Sabah Southville City Mixed 21-May-2012 Freehold 384.03 598,009,731 Mukim Dengkil Development Daerah Sepang Negeri Selangor The Meridin @ Medini Iconic 18-Oct-2012 Leasehold - 355,188,916 Medini, Iskandar Malaysia Integrated (expiring on Mukim Pulai, Daerah Johor Bahru Development 14-Apr-2142 & Negeri Johor 25-June-2142) D’sara Sentral Mixed 3-Apr-2013 Leasehold - 167,315,378 H.S.(D) 291822, No. PT 4629 Development (expiring on Pekan Baru Sungai Buloh 14-Aug-2112) Daerah Petaling Negeri Selangor Mah Sing Group Berhad 272 Annual Report 2017 Additional Information Selangor DarulEhsan 42000 Port Klang Bandar SultanSuleiman Kawasan Perindustrian Lot 4,LingkaranSultanMohamed1 Seberang Perai Tengah, PulauPinang Lot 13254,Mukim14 M Parc Johor DarulTakzim Daerah JohorBahru Mukim Tebrau Austin Perdana Johor District ofJohorBahru Mukim ofPlentong Bandar MeridinEast Wilayah Persekutuan Kuala Lumpur Mukim Kuala Lumpur PN 52949,Lot 481319 M Vertica Daerah Kuala Lumpur Tempat SungaiUntut,MukimSetapak Geran Mukim557,Lot 774 Geran Mukim561,Lot 773& Geran Mukim336,Lot 772 M Centura Negeri Selangor Mukim Rawang, DaerahGombak HSD 35626,PT23373 M Residence 3@Rawang Kuala Lumpur Negeri WilayahPersekutuan Daerah Kuala Lumpur Mukim Batu H.S.D 119736,No. PT26755 Lakeville Residence Location (CONTINUED) AS AT 31DECEMBER2017 PROPERTIES OWNED BY THEGROUP Mixed Development 3 blocksof5Storey Corporate Office Corporate Office (Age: 2years) (Age: 2years) Development Development Development Development Development Description warehouse warehouse Residential Office and Office and Industrial Industrial buildings Mixed Mixed Mixed Date ofValuation 25-May-2017 28-May-2013 30-Aug-2017 27-Aug-2013 24-Feb-2016 Acquisition/ 1-Apr-2016 1-Oct-2013 3-Jul-2017 Date of Date of 14-Aug-2116) 25-Nov-2113) 21-Sep-2093) 7-May-2099) (expiring on (expiring on (expiring on (expiring on (expiring on Leasehold Leasehold Leasehold Leasehold Freehold Freehold Freehold Freehold Tenure Land Area 1,246.01 1,246.01 11.23 11.23 17.30 17.30 (Acre) 96.71 96.71 6.63 4.98 4.98 - - 549,096,423 549,096,423 273,276,342 273,276,342 109,775,162 109,775,162 204,198,300 117,525,031 117,525,031 22,502,633 22,502,633 45,244,472 45,244,472 6,008,351 6,008,351 Value (RM) Net Book Additional Information STATISTICS OF SHAREHOLDINGS AS AT 2 APRIL 2018 Class of Shares : Ordinary shares Voting Rights : One vote per ordinary share ANALYSIS OF SHAREHOLDINGS Size of Holdings No. of Holders No. of Shares % 1 - 99 673 25,920 0.001 100 - 1,000 1,009 606,933 0.025 1,001 - 10,000 6,363 31,950,382 1.316 10,001 - 100,000 3,301 95,001,887 3.913 100,001 - 121,384,352* 450 1,362,814,217 56.137 121,384,353 and above** 5 937,287,729 38.608 Total 11,801 2,427,687,068 100.000 Remark: * Less than 5% of issued shares 273 ** 5% and above of issued shares SUBSTANTIAL SHAREHOLDERS No. of Ordinary Shares Held Name Direct % Indirect % Mayang Teratai Sdn Bhd 653,038,200 26.900 - - Mayang Teratai Limited 180,000,000 7.414 - - Employees Provident Fund Board 226,075,269 9.312 - - Tan Sri Dato’ Sri Leong Hoy Kum 10,319,007 0.425 a833,038,200 34.314 Lembaga Tabung Haji 141,143,900 5.814 - - Notes: a Deemed interested by virtue of shareholdings of Mayang Teratai Sdn Bhd and Mayang Teratai Limited Mah Sing Group Berhad 274 Annual Report 2017 Additional Information 12 11 10 9 8 7 6 5 4 3 2 1 LIST OFTOP THIRTY HOLDERSAS AT 2APRIL2018 # DIRECTORS’ SHAREHOLDINGS AS AT 2APRIL2018 STATISTICS OFSHAREHOLDINGS Tan SriDato’ SriLeong HoyKum Jen. Tan SriYaacob BinMatZain(R) Name * Notes: Jane Leong Jheng-Yi Datuk Leong Yuet Mei Dato’ NgPoh Seng Amanah SahamMalaysia AmanahRaya Trustees Berhad Amanah SahamWawasan 2020 AmanahRaya Trustees Berhad Exempt ANforCreditSuisse(SGBR-TST-Asing) HSBC Nominees(Asing)SdnBhd Pledged SecuritiesAccountforMayangTeratai SdnBhd(49643JPLE) CIMB GroupNominees(Tempatan) SdnBhd Kumpulan Wang Persaraan (Diperbadankan) Amanah SahamBumiputera AmanahRaya Trustees Berhad Pledged SecuritiesAccountforMayangTeratai SdnBhd ABB Nominee(Tempatan) SdnBhd Lembaga Tabung Haji Pledged SecuritiesAccountforMayangTeratai SdnBhd(414365800389) Maybank Nominees(Tempatan) SdnBhd Exempt ANforBankofSingaporeLimited DB (Malaysia)Nominee(Asing)SdnBhd Employees ProvidentFundBoard Citigroup Nominees(Tempatan) SdnBhd Mayang Teratai SdnBhd Name Deemed interestedbyvirtueofshareholdingsMayangTeratai SdnBhd,MayangTeratai Limitedandhisfamilymember(s) Deemed interestedbyvirtueofshareholdingsfamilymember(s) 10,319,007 2,170,931 708,900 Direct - - No. of OrdinarySharesHeld 0.425 0.089 0.029 % - - # 840,012,267 No. ofShares 110,913,677 119,173,000 120,470,840 139,994,900 159,000,000 180,388,000 224,994,569 232,910,260 * 59,206,800 59,425,978 91,172,031 96,000,000 * 316,814 Indirect 65,902 - - 34.601 0.003 0.013 2.439 2.448 3.756 3.954 4.569 4.909 4.962 5.767 6.549 7.430 9.268 9.594 % % - - Additional Information STATISTICS OF SHAREHOLDINGS AS AT 2 APRIL 2018 LIST OF TOP THIRTY HOLDERS AS AT 2 APRIL 2018 (continued) Name No. of Shares % 13 AmanahRaya Trustees Berhad 52,841,125 2.177 AS 1Malaysia 14 HSBC Nominees (Asing) Sdn Bhd 51,457,471 2.120 HSBC-FS for Value Partners High - Dividend Stocks Fund 15 AmanahRaya Trustees Berhad 33,000,000 1.359 Amanah Saham Bumiputera 2 16 Malaysia Nominees (Tempatan) Sendirian Berhad 33,000,000 1.359 Pledged Securities Account for Mayang Teratai Sdn Bhd (00-33029-017) 17 Cartaban Nominees (Tempatan) Sdn Bhd 28,681,645 1.181 PAMB for Prulink Equity Fund 18 HSBC Nominees (Asing) Sdn Bhd 28,320,800 1.167 HSBC-FS for Lynas Asia Fund 19 HSBC Nominees (Asing) Sdn Bhd 25,851,100 1.065 JPMCB NA for Bureau of Labor Funds-Labor Pension Fund 20 AmanahRaya Trustees Berhad 25,640,762 1.056 275 Amanah Saham Didik 21 Valuecap Sdn Bhd 25,509,800 1.051 22 AmanahRaya Trustees Berhad 16,321,565 0.672 Public Islamic Select Treasures Fund 23 Cartaban Nominees (Asing) Sdn Bhd 15,156,910 0.624 Exempt AN for State Street Bank & Trust Company (West CLT OD67) 24 Citigroup Nominees (Asing) Sdn Bhd 14,223,000 0.586 Macquarie Bank Limited (London Branch) 25 Citigroup Nominees (Asing) Sdn Bhd 13,987,062 0.576 CBNY for Dimensional Emerging Markets Value Fund 26 HLB Nominees (Tempatan) Sdn Bhd 11,657,100 0.480 Pledged Securities Account for Mayang Teratai Sdn Bhd (PJCAC) 27 Citigroup Nominees (Asing) Sdn Bhd 11,437,751 0.471 CBNY for Emerging Market Core Equity Portfolio DFA Investment Dimensions Group Inc 28 Tan Sri Dato’ Sri Leong Hoy Kum 10,319,007 0.425 29 Citigroup Nominees (Asing) Sdn Bhd 9,866,186 0.406 CBNY for DFA Emerging Markets Small Cap Series 30 AmanahRaya Trustees Berhad 9,855,525 0.406 Amanah Saham Nasional Total 2,010,776,864 82.826 Mah Sing Group Berhad 276 Annual Report 2017 Additional Information Tan SriDato’ SriLeong HoyKum Jen. Tan SriYaacob BinMatZain(R) Name # Size ofHoldings ANALYSIS OFWARRANT HOLDINGS Voting RightsatMeetingofWarrant Holders Exercise Rights Exercise Period ofWarrants Exercise PriceofWarrants No. ofOutstandingWarrants AS AT 2APRIL2018 WARRANT CHOLDINGS STATISTICS OF * Notes: Jane Leong Jheng-Yi Datuk Leong Yuet Mei Dato’ NgPoh Seng 1 -99 100 -1,000 1,001 -10,000 10,001 -100,000 100,001 -8,306,718* 8,306,719 andabove** Total DIRECTORS’ WARRANT CHOLDINGS ** * Remark: Deemed interestedbyvirtueofwarrantholdingsMayang Teratai SdnBhdandhisfamilymember(s) Deemed interestedbyvirtueofwarrantholdingsfamilymember(s) 5% andaboveofissuedwarrants Less than5%ofissuedwarrants : : : : : One voteperwarrant Each warrantentitlestheholdertosubscribeforonenewordinaryshare 23 February2015to212020 RM2.10 166,134,389 No. of Holders 714,392 166,997 147,452 Direct 4,841 2,313 1,320 - - 582 468 156 2 No. ofWarrants Held 0.430 0.089 0.101 No. of Warrants 166,134,389 % 17,296,433 76,030,279 68,256,935 - - 3,544,124 980,736 25,882 # 59,144,622 * 128,414 Indirect * 4,561 - - 100.000 35.600 10.411 45.764 41.085 0.003 0.077 0.017 0.590 2.133 % % - - Additional Information STATISTICS OF WARRANT C HOLDINGS AS AT 2 APRIL 2018 LIST OF TOP THIRTY HOLDERS AS AT 2 APRIL 2018 No. Name No. of Warrants % 1 Mayang Teratai Sdn Bhd 58,681,469 35.322 2 HSBC Nominees (Asing) Sdn Bhd 9,575,466 5.764 Exempt AN for Credit Suisse (SG BR-TST-Asing) 3 HSBC Nominees (Asing) Sdn Bhd 6,697,828 4.032 HSBC-FS for Value Partners High - Dividend Stocks Fund 4 M & A Nominee (Tempatan) Sdn Bhd 4,357,000 2.623 Pledged Securities Account for Foo Ee Wyn (M&A) 5 Tung Chow Thye 3,700,250 2.227 6 HSBC Nominees (Asing) Sdn Bhd 2,910,000 1.752 HSBC-FS for Lynas Asia Fund 7 Dai Shek Hung 2,766,000 1.665 8 Mak Ngia Ngia @ Mak Yoke Lum 2,592,300 1.560 9 CIMSEC Nominees (Tempatan) Sdn Bhd 2,176,500 1.310 277 CIMB Bank for Mak Ngia Ngia @ Mak Yoke Lum (MM0749) 10 Keah Say Wan 2,070,000 1.246 11 Chong Cheng Sing 2,001,600 1.205 12 Lim Woi Chun 1,800,000 1.083 13 TA Nominees (Tempatan) Sdn Bhd 1,620,000 0.975 Pledged Securities Account for Mak Ngia Ngia @ Mak Yoke Lum 14 Yeoh Siew Leng 1,366,000 0.822 15 AmanahRaya Trustees Berhad 1,069,953 0.644 Public Islamic Select Treasures Fund 16 Woon Wee Pok 1,055,825 0.636 17 Wong Wai Lee 1,000,000 0.602 18 Lee Lai Tee 900,000 0.542 19 HSBC Nominees (Asing) Sdn Bhd 895,021 0.539 JPMCB NA for Vanguard Total International Stock Index Fund Mah Sing Group Berhad 278 Annual Report 2017 Additional Information No. LIST OFTOP THIRTY HOLDERSAS AT 2APRIL2018(continued) AS AT 2APRIL2018 WARRANT CHOLDINGS STATISTICS OF 20 21 22 23 24 25 26 27 28 29 30 Name Pledged SecuritiesAccountforKek LianLye Maybank Nominees(Tempatan) SdnBhd Keah HooiChin Exempt ANforCLSA Limited(Cust-NonRes) Citigroup Nominees(Asing)SdnBhd Wong Kwong Thim Tung Tuck Ming Pledged SecuritiesAccountforKek LianKiat Maybank Nominees(Tempatan) SdnBhd Tan SriDato’ SriLeong HoyKum Mansor BinTopil Mohamad Pledged SecuritiesAccountforKeah SayWan AMSEC Nominees(Tempatan) SdnBhd Mary Foo Total Pledged SecuritiesAccountforIskandarBinMohdZaffa(MARGIN) Maybank SecuritiesNominees(Tempatan) SdnBhd No. of Warrants 115,010,344 851,000 843,200 837,990 770,000 766,750 725,000 714,392 617,800 558,000 550,000 541,000 69.227 0.512 0.507 0.504 0.463 0.461 0.436 0.430 0.372 0.336 0.331 0.326 % Notices NOTICE OF TWENTY-SIXTH ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN THAT the Twenty-Sixth Annual General Meeting of Mah Sing Group Berhad (“Mah Sing” or “Company”) will be held at Penthouse Suite 1, Wisma Mah Sing, No. 163, Jalan Sungai Besi, 57100 Kuala Lumpur on Thursday, 28 June 2018 at 2.30 p.m., for the following purposes: AGENDA As Ordinary Businesses: 1. To receive the Audited Financial Statements for the financial year ended 31 December 2017 together with the Directors’ and Auditors’ Reports thereon. (Please refer to Note A) 2. To approve the declaration of a first and final single-tier dividend of 6.5 sen per ordinary share in respect of the financial year ended 31 December 2017. (Resolution 1) 3. To approve the Directors’ fees of RM126,000 for the financial year ended 31 December 2017. (Resolution 2) 4. To re-elect Tan Sri Dato’ Sri Leong Hoy Kum, the Director retiring pursuant to Article 102 of the Company’s Articles of Association. (Resolution 3) 5. To re-elect the following Directors who retire pursuant to Article 109 of the Company’s Articles of Association: 279 (i) Tan Sri Dato’ Seri Siti Norma Binti Yaakob; and (Resolution 4) (ii) Encik Abd Malik Bin A Rahman (Resolution 5) 6. To re-appoint Messrs Deloitte PLT as Auditors of the Company for the financial year ending 31 December 2018 and to authorise the Directors to fix their remuneration. (Resolution 6) As Special Businesses: To consider and if thought fit, to pass the following ordinary resolutions: 7. AUTHORITY TO ALLOT SHARES “THAT subject always to the Companies Act, 2016, and the approval of the regulatory authorities, the Directors be and are hereby empowered, pursuant to Sections 75 and 76 of the Companies Act, 2016, to allot shares in the Company from time to time at such price, upon such terms and conditions, for such purposes and to such person or persons whomsoever as the Directors may deem fit provided that the aggregate number of shares to be issued during the preceding 12 months pursuant to this resolution does not exceed 10% of the total number of issued shares (excluding treasury shares) of the Company for the time being AND THAT the Directors be and are also empowered to obtain the approval from Bursa Malaysia Securities Berhad for listing of and quotation for the additional shares so allotted AND FURTHER THAT such authority shall continue to be in force until the conclusion of Mah Sing Group Berhad the next Annual General Meeting (“AGM”) of the Company after the approval was given, or at the expiry of the period within which the next AGM is required to be held after the approval was given, whichever is earlier.” (Resolution 7) 280 Annual Report 2017 Notices 8. ANNUAL GENERALMEETING NOTICE OFTWENTY-SIXTH 9. (c) (b) (a) shall continuetobeinforceuntil: public aswellarenotdetrimentaltotheminorityshareholdersofCompanyandsuchapproval, terms and on terms not more favourable to the Related Parties than those generally available to the are intheordinarycourseofbusinessandcarriedoutatarms’ lengthbasisonnormalcommercial which arenecessaryfortheday-to-dayoperationsofMahSingGroupprovidedthattransactions Requirements ofBursaMalaysiaSecuritiesBerhad)asspecifiedinSection2.3.1theCircular, of Mah Sing Group with specified classes of Related Parties (as defined in the Main Market Listing into andgiveeffecttospecifiedrecurrentrelatedpartytransactionsofarevenueortradingnature approval beandisherebygiventotheCompanyand/oritssubsidiaries(“MahSingGroup”)enter “THAT subjectalwaystotheMainMarket ListingRequirements ofBursaMalaysiaSecuritiesBerhad, THE CIRCULARTO SHAREHOLDERSOFTHECOMPANY DATED 30APRIL2018(“CIRCULAR”) TRANSACTIONS OFAREVENUEORTRADINGNATURE AS SPECIFIEDINSECTION2.3.1OF PROPOSED RENEWAL OFSHAREHOLDERS’MANDATE FORRECURRENTRELATED PARTY (b) (a) Buy-Back”) providedthat: absolute discretiondeemfitandexpedientinthebestinterest oftheCompany(“ProposedShare the market of BursaSecurities at anytimeupon such termsandconditionsastheDirectorsin their the Companybeandisherebyauthorisedtopurchaseand/or holdsuchnumberofissuedshareson regulatory authorities,andtheapprovalsofallrelevantgovernmental and/orregulatoryauthorities, Berhad (“BursaSecurities”)andanyapplicablelaws,regulationsguidelinesissued byother Articles ofAssociationandtheMainMarket ListingRequirements ofBursaMalaysiaSecurities “THAT subject to the Companies Act, 2016, provisions of the Company’s Memorandumand PROPOSED RENEWAL OFSHAREBUY-BACK AUTHORITY transactions contemplatedand/orauthorisedbythisOrdinaryResolution.” of theCompany(includingexecuting allsuchdocumentsasmayberequired)togiveeffectthe all suchacts,deedsandthingsastheymayconsiderexpedientornecessaryinthebestinterest AND THAT authoritybeandisherebygiventotheDirectorsofCompanycompletedo whichever isearlier. mandate willlapse, unlessthemandateisrenewedbyaresolutionpassedat thatmeeting;or meeting; revoked or varied by a resolutionpassed by the shareholders of the Companyinageneral not extendtosuchextensionasmaybeallowedpursuantSection 340(4)oftheAct);or required tobeheldpursuantSection340(2)oftheCompaniesAct,2016(“Act”)(butmust the expirationofperiodwithinwhichnextAGM oftheCompanyafterthatdateis the conclusionofnextAnnualGeneralMeeting(“AGM the transaction dateoftheProposedShareBuy-Back; financial statements and/orthelatestmanagement accounts(whereapplicable) availableupto its sharesshallnotexceed theretainedprofitsofCompanybasedonlatest audited the maximum amount of funds to be allocated by the Company for the purpose of purchasing not exceed 10%ofthe total numberofissuedsharestheCompany attimeofpurchase(s); the aggregatenumberofshares whichmaybepurchasedand/orheldbytheCompany shall ”) oftheCompany, at which timethe (Resolution 8) Notices NOTICE OF TWENTY-SIXTH ANNUAL GENERAL MEETING (c) upon completion of the purchase(s) of the shares by the Company, the shares shall be dealt with in the following manner: (i) to cancel the shares so purchased; or (ii) to retain the shares so purchased as treasury shares which may be distributed as share dividends to the shareholders of the Company and/or to be resold on the market of Bursa Securities; or (iii) to retain part of the shares so purchased as treasury shares and cancel the remainder; or (iv) any combination of the three above or to deal with the treasury shares in the manner allowed by the Companies Act 2016. AND THAT the authority conferred by this resolution will be effective upon the passing of this resolution and will continue to be in force until:- (a) the conclusion of the next Annual General Meeting (“AGM”) of the Company at which time it will lapse, unless the authority is renewed by a resolution passed at a general meeting, either unconditionally or subject to conditions; or 281 (b) the expiration of the period within which the next AGM after that date is required by law to be held; or (c) revoked or varied by ordinary resolution passed by the shareholders of the Company in a general meeting; whichever occurs first, but not as to prejudice the completion of purchase(s) by the Company before the aforesaid expiry date, and in any event, in accordance with the provisions of the guidelines issued by Bursa Securities or any other relevant authorities, relevant requirements and guidelines. AND FURTHER THAT authority be and is hereby given to the Directors of the Company to do all such acts, deeds and things as they may consider expedient or necessary in the best interest of the Company (including executing all such documents as may be required) to give full effect to the Proposed Share Buy-Back with full power to assent to any condition, variation, modification and/ or amendment as may be required by any relevant authorities and to deal with all matters relating thereto and take all steps and do all acts and things in any manner as they may deem necessary in connection with the Proposed Share Buy-Back in the best interest of the Company.” (Resolution 9) 10. To transact any other business of which due notice shall have been given. BY ORDER OF THE BOARD Mah Sing Group Berhad YANG BAO LING (MAICSA 7041240) KUAN HUI FANG (MIA 16876) Company Secretaries Kuala Lumpur 30 April 2018 282 Annual Report 2017 Notices (ix) (viii) (vii) (vi) (v) (iv) (iii) (ii) (i) NOTES: ANNUAL GENERALMEETING NOTICE OFTWENTY-SIXTH office asIndependentNon-Executive Directors. Yaacob, CaptainIzahamandMrLoh fortheirinvaluableeffortsand contributionstotheCompanyduringtheirtenureof shareholders oftheCompany. TheBoardwouldlike to expressitssincereappreciationandgratitudeJen. Tan Sri Board andthereisnomatterrelatingtohisretirement/stepping downthatneedstobebroughttheattentionof Jen. Tan SriYaacob, CaptainIzahamandMrLoh haverespectivelyconfirmedthathehasnodisagreementwiththe the MCCG2017.Hence, theyshallremaininofficeuntiltheconclusionof Twenty-Sixth AGM. Non-Executive DirectorsoftheCompanyatconclusion oftheTwenty-Sixth AGM inordertofacilitatethepracticesof Jen. Tan SriYaacob Bin Mat Zain (R) and Mr Loh Kok Leong have expressed their intentionto step down as Independent retiring fromofficeattheconclusionof Twenty-Sixth AGM. to facilitatethepracticesofMalaysianCodeonCorporate Governance2017(“MCCG”).Therefore, hewillbe of Association,hasindicatedtotheCompanythathewill not beseekingre-electionattheTwenty-Sixth AGM inorder Captain IzahamBinAbd.Rani (R),whoisdueforretirementbyrotationpursuanttoArticle 102oftheCompany’s Articles Retirement andsteppingdownofIndependentNon-Executive DirectorsattheconclusionofTwenty-Sixth AGM of theshareholders.Hence, thisagendaitemwillnotbeputforwardforvoting. 2016, theauditedfinancialstatementsand Reports ofDirectorsand Auditors thereondonotrequireaformalapproval This agendaitemmeant for discussion only as under the provision of Sections248(2)and340(1)(a) the CompaniesAct, and Auditors Note A-Audited Financial Statements fortheFinancialYear Ended31December2017 and theReports ofDirectors on his/herbehalf. Company entitledtoattend,speakandvoteatthisTwenty-Sixth AnnualGeneralMeeting(“AGM Depositors whosenameappearintheRecord ofDepositorsasat21June2018shallberegardedmembersthe the exempt authorisednomineemayappointinrespectofeachomnibusaccountitholds. multiple beneficialownersinonesecuritiesaccount(“omnibus”),thereisnolimittothenumberofproxies which Where amemberoftheCompanyisanexempt authorisednomineewhichholdsordinarysharesintheCompanyfor account. respect ofeachsecurities account itholdswithordinarysharesoftheCompanystandingtocreditsaidsecurities Act 1991,itmayappointmorethanone(1)proxy (subjectalwaystoamaximumoftwo(2)proxies ateachmeeting) in Where amemberoftheCompanyisanauthorisednomineeasdefinedunderSecuritiesIndustry(CentralDepositories) adjournment thereof. Sungai Besi, 57100 Kuala Lumpur not less than forty-eight (48) hours before the time for holding this meeting or any thereof mustbedepositedattheregisteredofficeofCompany PenthouseSuite1,WismaMahSing, No. 163,Jalan The FormofProxy togetherwiththepowerofattorney(ifany)underwhichitissignedoradulynotariallycertifiedcopy be invalidunlesshe/shespecifiestheproportionsofhis/herholdings toberepresentedbyeachproxy. proxies ofeachmeeting),orwhereanexempt authorisednomineeappointstwo(2)ormoreproxies, theappointmentshall Where amemberortheauthorisednomineeappointsmorethanone(1)proxy (subjectalwaystoamaximum of two(2) seal orunderthehandofitsofficerattorneydulyauthorisedon itsbehalf. appointor or of his/her attorney duly authorised in writing. If the appointor is a corporation, it must be executed under its The powerofattorneyoranotariallycertifiedcopythereoftheFormProxy shallbeinwritingunderthehand ofthe the Company. Thereshallbenorestrictionastothequalificationofproxy. to appointadulyauthorisedrepresentativeattendandvoteinhis/herplace. Aproxy maybutneednotbeamemberof A memberentitledtoattendandvoteatthismeetingisappointaproxy orattorneyinthecaseofacorporation, ”), orappointaproxy(ies) Notices NOTICE OF TWENTY-SIXTH ANNUAL GENERAL MEETING EXPLANATORY NOTES ON SPECIAL BUSINESSES 1. Resolution 7 – Authority To Allot Shares The proposed ordinary resolution will give powers to the Directors to issue up to a maximum of 10% of the total number of issued shares (excluding treasury shares) of the Company for the time being for such purposes as the Directors would consider in the best interest of the Company. This authority, unless revoked or varied by the Company at a general meeting, will expire at the conclusion of the next AGM of the Company. The general mandate sought for issuance of securities is a renewal of the mandate for allotment of shares pursuant to Sections 75 and 76 of the Companies Act, 2016 that was approved by the shareholders at the Twenty-Fifth AGM held on 15 June 2017 and will lapse at the conclusion of this Twenty-Sixth AGM to be held on 28 June 2018. As at the date of this notice, no new shares were issued pursuant to the general mandate which was approved by the shareholders at the Twenty-Fifth AGM. The purpose of the renewed mandate will enable the Directors to take swift action in case of a need for fund raising exercises or in the event business opportunities arise which include but not limited to the issuance/placement of shares for purpose of funding current and/or future investment projects, acquisitions and/or for issuance of shares as settlement of purchase consideration or such other application as the Directors may deem fit in the best interest of the Company as well as to avoid delay and cost in convening general meetings to approve such issue of shares. 2. Resolution 8 – Recurrent Related Party Transactions of a Revenue or Trading Nature The proposed ordinary resolution, if passed, will renew the mandate to enable the Company and/or its subsidiaries to enter into recurrent related party transactions of a revenue or trading nature with related parties which are necessary for the 283 Group’s day-to-day operations and are in the ordinary course of business which carried out on an arm’s length basis based on normal commercial terms and on terms not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders of the Company. The details of the proposal are set out in the Circular to Shareholders dated 30 April 2018, accompanying the Company’s Annual Report for the financial year ended 31 December 2017. 3. Resolution 9 – Share Buy-Back Authority The proposed ordinary resolution, if passed, will renew the mandate to empower the Directors of the Company to exercise the power of the Company to purchase such number of ordinary shares in the Company up to 10% of the total number of issued shares of the Company by utilising an aggregate amount of the funds not exceeding the retained profits of the Company as at the transaction date of the Proposed Share Buy-Back. This authority will, unless revoked or varied at a general meeting, expire at the conclusion of the next AGM of the Company. The details of the proposal are set out in the Share Buy-Back Statement dated 30 April 2018, accompanying the Company’s Annual Report for the financial year ended 31 December 2017. Mah Sing Group Berhad 284 Annual Report 2017 Notices seeking electionasDirectoroftheCompanyatthisTwenty-Sixth AnnualGeneralMeeting. Pursuant toparagraph8.27(2)oftheMainMarket ListingRequirements ofBursaMalaysiaSecuritiesBerhad,thereisnoindividual ANNUAL GENERALMEETING STATEMENT ACCOMPANYING NOTICE OF entitlement. the newMahSingSharesarisingfromsuchexercise tobeallottedtherespectiveholdersinorderqualifyfordividend subscription ofnewordinarysharesintheCompany(“MahSingShares”)by5.00p.m. on4September2018.Thisistoenable Avenue 3,BangsarSouth,No. 8,JalanKerinchi, 59200Kuala Lumpur, theirsubscriptionformsandmoniesfor Jalan Kerinchi, 59200Kuala Lumpur oralternatively, theCustomerServiceCentreatUnitG-3,GroundFloor, Vertical Podium, & IssuingHouseServicesSdnBhdofUnit32-01,Level 32,Tower A,Vertical BusinessSuite, Avenue 3,BangsarSouth,No. 8, General Meeting,holdersofWarrant C2015/2020areadvisedtolodgewiththeCompany’s Share Registrar, Tricor Investor Subject to the approval on Resolution 1 beingobtained from theshareholdersofCompany at theTwenty-Sixth Annual Remarks: 30 April2018 Kuala Lumpur Company Secretaries KUAN HUIFANG (MIA16876) YANG BAO LING(MAICSA 7041240) BY ORDEROFTHEBOARD (b) (a) A Depositorshallqualifyforentitlementtothedividendonlyinrespect of: 14 September2018. or “Company”),willbepaidon27September2018toDepositorsofordinarysharesregisteredintheRecord ofDepositorson year ended31December2017,ifapprovedattheTwenty-Sixth AnnualGeneralMeetingofMahSingGroupBerhad(“” NOTICE ISHEREBY GIVENTHAT thefirstandfinalsingle-tierdividendof6.5senperordinaryshareinrespectfinancial ENTITLEMENT ANDPAYMENT NOTICE OFDIVIDEND Malaysia SecuritiesBerhad. Shares boughtontheBursaMalaysiaSecuritiesBerhadacumentitlementbasisaccordingtoRulesof Shares transferredintotheDepositor’s SecuritiesAccountbefore4.00p.m. on14September2018inrespect oftransfers;and FORM OF PROXY (Before completing the form please refer to notes below) NO. OF ORDINARY SHARES HELD I/We Telephone No.: (FULL NAME IN CAPITAL LETTERS) I.C./Passport/Company No. CDS Account No.: of (FULL ADDRESS) being a member/members of MAH SING GROUP BERHAD hereby appoint (FULL NAME IN CAPITAL LETTERS) I.C./Passport/Company No. of (FULL ADDRESS) or failing him, I.C./Passport/Company No.: (FULL NAME IN CAPITAL LETTERS) of (FULL ADDRESS) or failing him/her, the Chairman of the Meeting as my/our proxy, to attend and to vote for me/us on my/our behalf, at the Twenty-Sixth Annual General Meeting of the Company (“AGM”), to be held at Penthouse Suite 1, Wisma Mah Sing, No. 163, Jalan Sungai Besi, 57100 Kuala Lumpur on Thursday, 28 June 2018 at 2.30 p.m. on the following resolutions referred to in the notice of the AGM: My/our proxy is to vote as indicated below: No. Resolutions For Against 1. Declaration of first and final single-tier dividend 2. Payment of Directors’ fees 3. Re-election of Tan Sri Dato’ Sri Leong Hoy Kum as Director 4. Re-election of Tan Sri Dato’ Seri Siti Norma Binti Yaakob as Director 5. Re-election of Abd Malik Bin A Rahman as Director 6. Re-appointment of Deloitte PLT as Auditors 7. Authority to allot shares pursuant to Sections 75 and 76 of the Companies Act, 2016 8. Proposed renewal of Shareholders’ Mandate as specified in Section 2.3.1 of the Circular to Shareholders dated 30 April 2018 9. Proposed renewal of share buy-back authority (Please indicate with an “X” in the space provided whether you wish your votes to be cast for or against the resolutions. In the absence of specific direction, your proxy will vote or abstain as he/she thinks fit). Date this day of 2018 Signature: Shareholder or Common Seal of Appointor Notes: i. A member entitled to attend and vote at this meeting is entitled to appoint a proxy or attorney or in the case of a corporation, to appoint a duly authorised representative to attend and vote in his/her place. A proxy may but need not be a member of the Company. There shall be no restriction as to the qualification of the proxy. ii. The power of attorney or a notarially certified copy thereof or the Form of Proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorised in writing. If the appointor is a corporation, it must be executed under its seal or under the hand of its officer or its attorney duly authorised on its behalf. iii. Where a member or the authorised nominee appoints more than one (1) proxy (subject always to a maximum of two (2) proxies of each meeting), or where an exempt authorised nominee appoints two (2) or more proxies, the appointment shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy. iv. The Form of Proxy together with the power of attorney (if any) under which it is signed or a duly notarially certified copy thereof must be deposited at the registered office of the Company at Penthouse Suite 1, Wisma Mah Sing, No. 163, Jalan Sungai Besi, 57100 Kuala Lumpur not less than forty-eight (48) hours before the time for holding this meeting or any adjournment thereof. v. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint more than one (1) proxy (subject always to a maximum of two (2) proxies at each meeting) in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. vi. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. vii. Depositors whose name appear in the Record of Depositors as at 21 June 2018 shall be regarded as members of the Company entitled to attend, speak and vote at this Twenty-Sixth AGM or appoint a proxy(ies) on his/her behalf. Folding line STAMP THE COMPANY SECRETARY MAH SING GROUP BERHAD Penthouse Suite 1 Wisma Mah Sing No. 163, Jalan Sungai Besi 57100 Kuala Lumpur Folding line www.mahsing.com.my CENTRAL REGION (HQ) NORTHERN REGION SOUTHERN REGION EAST MALAYSIA +603 9221 6888 / 1-300-80-6888 +604 6288 188 • PENANG +607 3554 888 • JOHOR +6088 262 608 • SABAH