Cycle & Carriage Bintang Berhad Annu a l Repo r t 20 19

www.cyclecarriage.com.my Cycle & Carriage Bintang Berhad (Registration No. 196701000428 (7378-D)) (Incorporated in Malaysia) Annual Report 2019 Alor Setar

Juru Bukit Tengah

Ipoh Georgetown Gopeng

Cheras

TREC Batu Caves

Mutiara Damansara

Petaling Jaya Johor Bahru

Glenmarie

Outlets Cycle & Carriage Bintang is one We are represented by 13 outlets of the leading Mercedes-Benz nationwide dealers in Malaysia.

3S – 9 outlets 2S – 2 outlets 1S – 2 outlets Contents

I Statutory Financial Statements I I Other Information I I Overview I 52. Directors’ Report 124. Five-Year Summary 2. Corporate Profile 3. Financial Highlights 56. Statement by Directors 125. Financial Charts 4. Corporate Information 56. Statutory Declaration 126. Group Properties 5. Corporate Structure 57. Independent Auditors’ Report 127. Shareholding Statistics 62. Consolidated Statement of 129. Financial Calendar Comprehensive Income I Performance I 6. Chairman’s Statement 63. Consolidated Statement of Financial Position 7. Management Discussion and Analysis 64. Consolidated Statement of Changes in Equity 65. Consolidated Statement of Cash I Governance I Flows 9. Board of Directors 66. Company Statement of 12. Key Management Comprehensive Income 13. Corporate Governance Overview 67. Company Statement of Financial Statement Position 23. Statement on Risk Management 68. Company Statement of Changes in and Internal Control Equity 26. Audit Committee Report 69. Company Statement of Cash Flows 28. Statement of Nominating Committee 70. Summary of Significant Accounting 30. Additional Compliance Information Policies 31. Statement of Directors’ 82. Notes to the Financial Statements Responsibility for Preparing the Financial Statements 32. Sustainability Statement 2 Cycle & Carriage Bintang Berhad Annual Report 2019

Corporate Profile

Cycle & Carriage Bintang Berhad (“CCB”) and its subsidiaries (“CCB Group”) is one of the leading authorised Mercedes-Benz dealers in Malaysia. With a network of 13 outlets across Peninsular Malaysia, it provides sales and after-sales services for Mercedes-Benz passenger cars and commercial vehicles as well as FUSO trucks.

The newly transformed Cycle & Carriage Mutiara Damansara and Alor Setar outlets are the first two in Malaysia which feature the newest global Mercedes-Benz brand presence. The outlets in Johor Bahru and Ipoh are next to feature this new transformation, which leverages on innovative technology and digitalisation with the aim of elevating the overall customer ownership journey.

In addition, CCB Group hosts state-of-the-art service centres complying with Daimler AG standards, with certified Centre of Competence Body & Paint facilities that provide the highest standards of after-sales facilities made available in Malaysia. Its Body & Paint facility in Batu Caves scored a perfect certification audit score of 100% for the second time in 2019 while its facilities in Johor Bahru and Bukit Tengah achieved scores of 98% and 96% respectively.

CCB continues to invest in its people, sites and systems and will continue to elevate the customer experience from a point of retail to a point of experience with the new Mercedes-Benz brand presence.

CCB is a public company listed on the Main Market of Bursa Malaysia, with a majority share held by Jardine Cycle & Carriage Limited (“JC&C”). JC&C is the investment holding company of the Jardine Matheson Group in Southeast Asia, which seeks to grow with Southeast Asia by investing in market leading businesses based on the themes of urbanisation and the emerging consumer class. The Group has a majority interest in Astra, a diversified group in Indonesia, significant interests in Vietnam through Truong Hai Auto Corporation, Refrigeration Electrical Engineering Corporation and Vinamilk, as well as Siam City Cement which operates in Thailand and South Asia. The other investments in JC&C’s portfolio are the Cycle & Carriage businesses in Singapore, Malaysia and Myanmar, and Tunas Ridean in Indonesia. These motor businesses are managed by Jardine International Motors. JC&C is a leading Singapore-listed company, 75%-owned by the Jardine Matheson Group. Together with its subsidiaries and associates, JC&C employs more than 250,000 people across Southeast Asia.

Cycle & Carriage. Exceptional Journeys. 3 Cycle & Carriage Bintang Berhad Annual Report 2019

Financial Highlights

• Vehicle unit sales 29% lower • Impairment loss recognised for Sungai Besi site • Disposal of investment in Mercedes-Benz Malaysia (“MBM”) completed • Recognition of final tranche of MBM dividend

Results Year ended 31 December Restated† Change 2019 2018 % RM’ mil RM’ mil Revenue 1,143.3 1,513.3 (24) Net (loss)/profit: (a) Mercedes-Benz operations (34.7) 9.1 nm (b) Other losses - impairment loss on right-of-use assets (27.0) – 100 (c) Dividend income 22.5 11.2 100 (39.2) 20.3 nm Net (loss)/profit attributable to shareholders (39.2) 20.3 nm

sen sen % (Loss)/Profit per share (39) 20 nm

As at As at 31.12.2019 31.12.2018 RM’ mil RM’ mil Restated % Shareholders’ funds 249.1 288.3 (14)

RM RM % Net asset per share 2.47 2.86 (14)

† The financial statements have been restated due to changes in accounting policies upon adoption of MFRS 16 Leases, as set out in Note 32 to the Statutory Financial Statements. nm – not meaningful 4 Cycle & Carriage Bintang Berhad Annual Report 2019

Corporate Information As at 24 April 2020

Board of Directors Chairman Chan Tze Choong Eric Tang Saw Hua (Alternate: Chan Kim Kooi) Deputy Chairman Rossana Annizah binti Ahmad Rashid Anthony Albert Collingridge (Alternate: Kent Teo)

Audit Committee Chairperson Tang Saw Hua Rossana Annizah binti Ahmad Rashid Anthony Albert Collingridge

Remuneration Committee Chairperson Chan Tze Choong Eric Anthony Albert Collingridge Tang Saw Hua

Nominating Committee Chairperson Anthony Albert Collingridge Chan Tze Choong Eric Tang Saw Hua

Secretaries Administration and Polling Agent Yeap Kok Leong Boardroom Share Registrars Sdn. Bhd. Lim Hooi Mooi 11th Floor, Menara Symphony No. 5, Jalan Prof. Khoo Kay Kim, Seksyen 13 Ong Wai Leng 46200 Petaling Jaya, Selangor Darul Ehsan Telephone : 03 7890 4700 Auditors Facsimile : 03 7890 4670 PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146) Chartered Accountants Registered Office Level 10, 1 Sentral, Jalan Rakyat Unit 30-01, Level 30, Tower A, Vertical Business Suite Kuala Lumpur Sentral Avenue 3, Bangsar South, No. 8, Jalan Kerinchi 50700 Kuala Lumpur 59200 Kuala Lumpur Telephone : 03 2783 9299 Facsimile : 03 2783 9222 Share Registrar Tricor Investor & Issuing House Services Sdn. Bhd. Unit 32-01, Level 32, Tower A, Vertical Business Suite Website Avenue 3, Bangsar South, No. 8, Jalan Kerinchi www.cyclecarriage.com.my 59200 Kuala Lumpur Telephone : 03 2783 9299 Facsimile : 03 2783 9222 Stock Exchange Listing Bursa Malaysia Securities Berhad (Main Market) Stock Code : 2925 Stock Name : CCB 5 Cycle & Carriage Bintang Berhad Annual Report 2019

Corporate Structure

Cycle & Carriage Bintang Berhad (Registration Number: 196701000428 (7378-D))

Retailing of motor vehicles, sale of spare parts and servicing of vehicles

Cycle & Carriage Bintang (Perak) Sdn Bhd (Registration Number: 194701000088 (1554-H))

100%

Retailing of motor vehicles, sale of spare parts and servicing of vehicles

Cycle & Carriage Bintang (Northern) Sdn Bhd Lowe Properties Sdn Bhd (Registration Number 198401001742 (114255-P)) (Registration Number: 199501006604 (335800-X))

100% 100%

Retailing of motor vehicles, sale of spare parts and Renting of premises servicing of vehicles

Cycle & Carriage (Malaysia) Sdn Berhad (Registration Number: 196601000506 (6979-T))

100%

Dormant

Selecsama Sdn Bhd (Registration Number: 200101029138 (564896-X))

100%

Dormant

Srisari Sdn Bhd (Registration Number: 198901013113 (190423-K))

100%

Dormant 6 Cycle & Carriage Bintang Berhad Annual ReportReport 20192019

Overview

The Group faced a challenging year in 2019 as competition intensified. This was compounded as a result of the softening demand in the premium luxury segment of the automotive industry, leading to significant reductions in unit sales and earnings.

Chairman’s Statement

Performance Sustainability

The Group’s revenue for the financial year ended 31 December This year, CCB is publishing its third Sustainability 2019 decreased by 24% to RM1,143.3 million. Statement. The Statement is in compliance with the Global Reporting Initiative Standards. The Group’s Mercedes-Benz operations faced intense competition during the year and recorded a net loss of Pursuant to Bursa Malaysia Securities Berhad’s Listing RM34.7 million, compared to a net profit of RM9.1 million Requirements, companies listed on the Main Market and/or ACE in the prior year. In 2018, the Group’s results benefited from Market are required to report on the company’s sustainability insurance compensation of RM9.8 million for damages performance annually by detailing the management of material suffered as a result of floods in Penang and higher sales due economic, environmental and social risks and opportunities. to the zero rate of GST from June to August 2018. Consideration of non-financial factors contribute to the long- In 2019, unit sales were 29% lower and margins were term viability of the business. As such, the Group strives to reduced, due to a shift in sales mix to lower-priced models balance commercial focus with sustainability factors. and weak consumer demand. However, the Group’s after- sales division continued to perform well, as it delivered It is committed to disclosing its performance applying increased throughput volumes. globally recognised standards in an open and transparent manner, and communicating its progress to stakeholders. Following the announcement on the 1 November 2019 surrounding the cancellation of construction on the Sungai The Group will continue to develop its approach to Besi site, a business review was conducted by the Company sustainability during 2020. and a valuation was performed by a registered valuer on that property. This resulted in the recognition of an impairment People loss of RM27.0 million. I would like to thank the management team and our staff for The Group has recognised the RM11.2 million final tranche their dedication and hard work during this difficult period. I of dividend from Mercedes-Benz Malaysia Sdn Bhd (“MBM”) also wish to thank our customers, shareholders and business and will cease to be entitled to further dividend income partners for their continued support. upon completion of the transaction. This final dividend will be utilised for working capital requirements. Prospects

Overall, the decline in 2019 sales volume and margin resulted Trading conditions are likely to remain challenging in the year in a net loss for the Group of RM39.2 million, after accounting ahead. The compounding effect of the current COVID-19 for dividend income of RM22.5 million from the Group’s situation, including effects related to the movement control order investment in MBM and the impairment loss of RM27.0 implemented by the Malaysian government, adds to an already million on the Sungai Besi site. subdued economic environment. It is expected to exacerbate existing softening demand and pressure on margins in the The Group’s net debt decreased from RM235.8 million at the automotive retailing segment of the premium luxury market. The end of 2018 to RM201.8 million at the end of 2019. Group remains committed to its business improvement strategy.

The Board has not declared a dividend for the financial year Chan Tze Choong Eric ended 31 December 2019 (2018: Nil). Chairman 7 Cycle & Carriage Bintang Berhad Annual Report 2019

Management Discussion and Analysis

Company profile

Cycle & Carriage Bintang Berhad (“CCB”) is principally • Following a business review carried out in the context involved in the retailing and after-sales servicing of of the current subdued economic outlook and weak Mercedes-Benz passenger cars and commercial vehicles as consumer sentiment in Malaysia, the Group decided well as FUSO trucks. It is one of the leading Mercedes-Benz not to proceed with the planned construction of a passenger car dealers in Malaysia with extensive network Sales, Service, Spare parts facility on its Sungai Besi coverage across Peninsular Malaysia. The Group’s flagship site. An independent valuation was conducted on this Body & Paint facility at Batu Caves outlet has been certified land, and as a result, an impairment loss of RM27.0 by Daimler AG as amongst the highest ranking Centres of million was recognised in financial year ended 2019. Competence for collision repairs globally. • On 30 November 2018, Daimler AG exercised its call option to buy CCB’s 49% interest in MBM. The Objectives and Strategy disposal was completed on 11 December 2019. The proceeds from the disposal of RM66.0 million The Group aims to become the preferred choice of partner to was utilised to repay existing bank borrowings of both customers and its Principal, Mercedes-Benz Malaysia the Group. The Group has also recognised the final Sdn Bhd (“MBM”). It intends to achieve this by focusing tranche of the dividend from MBM of RM11.2 million on delivering the brand promise of Exceptional Journeys and ceases to be entitled to further dividend income. through investment in its sites, systems and people. In alignment with the Principal’s network development and • On 27 February 2020, CCB entered into a conditional best customer experience objectives, these investments are sale and purchase agreement (“SPA”) with The aimed at enhancing the Group’s ability to capture growth Malayan Press (PG) Sdn Bhd to acquire three (3) and deliver long term sustainable results. pieces of freehold vacant land with an approximate area of 35,420.84 square feet in total (equivalent to 3,290.70 square metres) in Sungai Pinang, Penang for Highlights a total cash consideration of RM24.2 million. CCB is in the midst of obtaining the relevant approvals under • The Group celebrated its 120th anniversary during the SPA. the financial year 2019. As part of the celebration, a regional campaign was rolled out together with its fellow subsidiaries of Jardine Cycle & Carriage Ltd. 2019 Performance Eligible customers were awarded with free trips to Mongolia, Nepal and Korea. The Malaysian automotive market recorded a total industry volume (“TIV”) of 604,300 units in 2019 compared to 598,700 • The newly transformed Mutiara Damansara Autohaus units in 2018, a slight increase of 0.9%. The passenger was the first autohaus in Malaysia to launch the newest vehicle segment saw growth of 3.2%, accounting for Mercedes-Benz brand presence, in alignment with 550,200 units compared to 533,200 units in 2018, whilst Daimler AG’s MAR2020 corporate identity standards. the commercial vehicle segment suffered a drop of 17.4% Next outlets to feature this new transformation in 2020 in 2019, registering 54,100 units, compared to 65,500 are Johor Bahru and Ipoh, with the Alor Setar branch units in 2018. Despite a 23% decline in the Mercedes- already complete and operational since March 2020. Benz passenger vehicle volumes to 10,020 units in 2019, With these investments, the Group will be the first it continued to maintain the number one (1) position in the dealer to have four (4) of the most modern autohauses premium luxury segment. in the country. The Group’s revenue decreased by 24% to RM1.1 billion for • Subsequent to the success in achieving improved efficiency in its sales processes, the Group has completed the execution of its business improvement methodologies on the after-sales business. 8 Cycle & Carriage Bintang Berhad Annual Report 2019

Management Discussion and Analysis

(continued)

the year ended 31 December 2019, due to a lower number result of higher borrowings to finance higher working capital of vehicle units sold resultant from the aforementioned requirements and refurbishment of the four (4) outlets to decline in the premium luxury segment. A total of 3,400 be in line with Daimler AG’s global MAR2020 corporate Mercedes-Benz passenger cars and commercial vehicles identity transformation. were sold, a decrease of 29% over the previous year. Despite the challenging sales environment, the Group’s after-sales The Group recorded a loss after tax from its trading division continued to grow steadily with 84,000 vehicles operations of RM61.7 million, compared to a profit after serviced, representing a 5% increase in throughput from tax of RM9.1 million in the previous year. Loss after tax 2018. The after-sales division also grew in both revenue and attributable to shareholders was RM39.2 million, after profitability terms by 15% and 18%, respectively. accounting for dividend income received from MBM, compared to a profit after tax of RM20.4 million in the previous year. Key operational indicators

Financial Position and Liquidity 2019 2018 2017 Property, plant and equipment increased by RM23.5 Vehicles sold (units)* 3,400 4,800 4,400 million to RM122.6 million at the end of 2019, mainly due Throughput (units)** 84,000 80,000 72,000 to capitalised building costs related to the improvement of existing showrooms. Trade and other receivables Gross profit margin (%) 8.9% 9.7% 6.8% decreased by 25% to RM96.3 million, while inventories increased RM24.2 million to meet dealer stockholding No. of employees 819 847 794 requirements.

* rounded to nearest hundred The Group’s net borrowings decreased by RM34.0 million ** rounded to nearest thousand to RM201.8 million at the end of 2019, as proceeds received from disposal of investment in MBM were utilised to pare Nonetheless, gross profit dropped by 31% to RM101.6 down the Group’s borrowings. The Group’s gearing ratio million in 2019 with gross profit margins decreasing from was stable at 81% with the funding structure of the Group 9.7% to 8.9%. The lower gross profit margin was primarily being reviewed regularly to maintain an appropriate balance due to a change in sales mix in favour of lower-priced and between equity, short-term and long-term debt. lower-margin vehicles. Higher discounting was also present due to increased competitive intensity and weak consumer demand. Outlook

Sales model mix reflected a shift to lower-priced models Following an unprecedented outbreak of the COVID-19 with the C, E and GLC-Classes accounting for a larger pandemic, the Malaysian economy is expected to proportion of the sales volumes. During the year, the new contract in comparison to the GDP growth of 4.3% seen A-Class Sedan model and AMG line-up were introduced, in 2019. Original estimates by the Malaysian Automotive as well as new E-Class variant and plug-in hybrid S560e. Association projected TIV to grow marginally by 0.4% to 607,000 units in 2020. However, due to current economic Other operating income of RM12.4 million was 49% lower uncertainties resulted from the COVID-19 pandemic and than RM24.2 million in the previous year which included economic impact due to the movement control order a receipt of RM12.9 million insurance compensation for implemented by the Government, the projected TIV is likely damages suffered from a flood in Penang in 2017. Other to be revised downwards. Factors such as suspension in operating income comprised mainly of insurance agency vehicle production and sales during the movement control commissions, rental income and interest income. order period, reduction in consumer spending and high household debt levels are expected to impact the premium Selling, distribution and administrative costs decreased by luxury vehicle segment. 3% to RM139.3 million due to lower unit sales, partly offset by higher repair, maintenance and depreciation costs.

The Group recorded an operating loss of RM52.3 million, compared to an operating profit of RM27.2 million in the previous year.

Finance costs were 34% higher at RM16.8 million, as a 9 Cycle & Carriage Bintang Berhad Annual Report 2019

Board of Directors

Chan Tze Choong Eric Rossana Annizah Chairman binti Ahmad Rashid Non-Independent Non-Executive Director Deputy Chairman Chairperson of Remuneration Committee Non-Independent Non-Executive Director Member of Nominating Committee Member of Audit Committee Aged 50, Male, Singaporean Aged 54, Female, Malaysian

Mr Chan was appointed to the Board on 1 May 2019 as Ms Rossana was appointed to the Board on 19 April 2016 a Non-Independent Non-Executive Director. On the same as Non-Independent Non-Executive Director. On the same date, he was also appointed as Chairman of the Board, date, she was also appointed as the Deputy Chairman of Chairperson of the Remuneration Committee and a member the Board. of the Nominating Committee. She holds a Bachelor of Arts in Banking and Finance from He holds a Bachelor in Arts and Social Science (Economics Canberra College of Advance Education (now known as and Sociology) from the National University of Singapore, University of Canberra). She was a career professional having and has also completed the Executive Programme of the held several leadership positions in the telecommunications London Business School and IMD Business School of and banking sectors. She previously served in various Management. senior management roles with TIME dotCom Berhad, Maxis Berhad and RHB Bank Berhad, after beginning her career He joined Cycle & Carriage Industries in 1995 and served with Citibank Malaysia. as its Chief Operating Officer prior to being appointed as Managing Director, Cycle & Carriage Singapore. With over With a combined 30 over years of experience, she has broad 20 years of experience in the automotive industry, he was experience in business strategy, identifying sustainable appointed as Managing Director, Direct Motor Interests on monetisation models, understanding customers and 1 May 2019. He is responsible for overseeing the Group’s competition, as well as the need for reviewing monetisation motor operations in Singapore, Malaysia, Myanmar and models focusing in both revenue and cost managements. Indonesia (excluding those held by Astra). Currently, he continues to serve as the Managing Director of Cycle & She was recently appointed as the Chairman of Bank Carriage Singapore, a role that he held since 2012. Simpanan Nasional with effect from 1 February 2020. Apart from that, she also holds the position of Country Chairman Directorship in other public companies and listed issuers: of Jardine Matheson Group of Companies in Malaysia. • Nil. Further, she serves as member of the Investment Panel and Investment Panel Risk Committee of Malaysia’s Employee Provident Fund. She is also an Independent Non-Executive Director as well as the Audit Committee Chairman of IHH Healthcare Berhad. Besides, she also serves on the Board of IHH’s indirect subsidiaries, namely Acibadem Saglik Yatirimlari Holdings A.S., Acibadem Saglik Hizmetleri ve Ticaret A.S. and Parkway Trust Management Ltd. She is also a Board member of Celcom Axiata Berhad and edotco Group Sdn Bhd, both of which are subsidiaries of Axiata Group Berhad.

Directorship in other public companies and listed issuers: • Bank Simpanan Nasional • IHH Healthcare Berhad • Celcom Axiata Berhad 10 Cycle & Carriage Bintang Berhad Annual Report 2019

Board of Directors

(continued)

Tang Saw Hua Anthony Albert Collingridge Senior Independent Non-Executive Director Independent Non-Executive Director Chairperson of Audit Committee Chairperson of Nominating Committee Member of Remuneration Committee Member of Audit Committee Member of Nominating Committee Member of Remuneration Committee Aged 60, Female, Malaysian Aged 60, Male, British

Ms Tang was appointed to the Board on 17 February 2017 Mr Collingridge was appointed to the Board on 31 October as an Independent Non-Executive Director. On the same 2018 as an Independent Non-Executive Director. On the date, she was also appointed as a member of the Audit, same date, he was appointed as the Chairperson of the Remuneration and Nominating Committees. She was Nominating Committee as well as a member of Audit and redesignated as the Chairperson of the Audit Committee Remuneration Committees. on 21 April 2017 and as Senior Independent Non-Executive Director on 23 April 2018. Currently, he also serves as an Independent Non-Executive Director of Prudential Assurance Malaysia Berhad and holds She is a member of both the Malaysia Institute of Certified the position of Managing Director of Delta Gate Solutions Public Accountants and the Malaysian Institute of Sdn. Bhd. He is also a Board Member of the British Accountants. Malaysian Chamber of Commerce and a Member of the Asian Advisory Council for Nottingham University. Prior to this, she held the position of Group Chief Financial Officer of Destination Resorts and Hotels Sdn. Bhd., a wholly Prior to this, he served the United Kingdom Government owned subsidiary of Khazanah Nasional Berhad. Apart for almost 39 years from November 1978, holding various from that, she has also held several leadership positions positions in Department of Energy, Department of Trade in the automotive and oil and gas industries such as Head & Industry and Department of International Trade. His of Finance division in Edaran Otomobil Nasional Berhad, last position with the United Kingdom Government was General Manager of Finance division of Proton Edar Sdn. as Director of Trade and Investment at the British High Bhd., Group Financial Controller of the Oil and Gas division Commission in Kuala Lumpur. in UMW Holdings Bhd. and Senior General Manager of Integrated Petroleum Services Sdn. Bhd. Directorship in other public companies and listed issuers: • Prudential Assurance Malaysia Berhad Directorship in other public companies and listed issuers: • Nil. 11 Cycle & Carriage Bintang Berhad Annual Report 2019

Board of Directors

(continued)

Chan Kim Kooi Kent Teo Alternate Director to Chan Tze Choong Eric Alternate Director to Rossana Annizah binti Ahmad Rashid Non-Independent Non-Executive Director Non-Independent Non-Executive Director Aged 55, Male, Singaporean Aged 36, Male, Singaporean

Mr Chan was appointed to the Board of Directors of the Company on 1 July 2019 as an alternate director to Mr Chan Mr Kent Teo was appointed to the Board of Directors of Tze Choong Eric, the Chairman of the Board. the Company on 1 July 2019 as an alternate director to Ms Rossana Annizah binti Ahmad Rashid, the Deputy Chairman He is qualified as a Singapore Chartered Accountant and of the Board. Fellow Chartered Certified Accountant. He is the Chief Financial Officer of Jardine International Motors and Zung He holds a Bachelor of Commerce Finance and Accounting Fu Group. from University of Sydney, Australia and is a qualified member of CPA Australia since 2007. He joined Jardine Cycle & Carriage Limited (“JC&C”) in June 1997. His last held position in JC&C was as the Group With effect from 1 July 2019, he is the Finance Director, Treasurer. He was seconded to PT Astra International Tbk, Direct Motor Interests of Jardine Cycle & Carriage Limited, Indonesia (Astra) in 2007 as its Chief, Corporate Value overseeing its automotive portfolio in Southeast Asia. Prior Initiative and Special Projects. He then served as the Group to which, he was the Chief Financial Officer and a Director Treasurer of Astra and subsequently held the position of of PT Tunas Ridean Tbk (a leading automotive group listed Finance Director of PT Astra Sedaya Finance. on the Indonesian Stock Exchange) since July 2015.

Directorship in other public companies and listed issuers: He joined Jardine Cycle & Carriage Limited as a Corporate • Nil. Finance Manager in July 2013 supporting JC&C Group’s new businesses and investments in Southeast Asia. Prior to joining JC&C, he was an Associate Director in KPMG Singapore advising clients on M&A transactions across Asia.

Directorship in other public companies and listed issuers: • Nil.

None of the Directors (including Alternate Directors) has any family relationship with any Directors and/or major shareholders of the Company, conflict of interest with the Company, convictions for offences (other than traffic offences, if any) within the past 5 years, and public sanction or penalty by relevant regulatory bodies during the financial year ended 31 December 2019. 12 Cycle & Carriage Bintang Berhad Annual Report 2019

Key Management

Wilfrid Foo Tsu-Jin Thomas Tok Chek Kuan Chief Executive Officer General Manager, Head - Sales Aged 42, Male, Singaporean Aged 48, Male, Singaporean

Mr Wilfrid joined the Company as its Chief Executive Officer Mr Thomas joined the Company as its General Manager of on 17 May 2017. Sales division in January 2017.

He holds an Executive Masters of Business Administration He holds a Bachelor of Science from the University of from Rutgers State University of New Jersey and a Bachelor London. of Business degree from Monash University, Melbourne and has graduated from the Advanced Management Programme Prior to joining the Company, Mr Tok was with Jardine Cycle from INSEAD. & Carriage, Singapore since the year 2000 where he has held several appointments in sales management, sales support Prior to joining the Company, he was the business executive functions, leasing business and new car logistics operations officer at a multinational FMCG company and has spent for all franchises. approximately 9 years in that company where he held several senior roles locally, regionally and globally, in strategy, brand Throughout his career, he also spent a number of years with management, marketing, sales, food technology, account Zung Fu, China as its dealership General Manager. management and global change projects where he was based in Singapore, Switzerland, China and Malaysia. Directorship in other public companies and listed issuers: • Nil. Directorship in other public companies and listed issuers: • Nil. S V Balasubramanian General Manager, Head - After-sales Matthew Andre Daniel Aged 50, Male, Indian Chief Financial Officer Mr Balasubramanian joined the Company as its Senior Aged 36, Male, Australian Manager in the after-sales division and has been with the Group since June 2005. Mr Matthew joined the Company as its Chief Financial Officer on 1 February 2020. He holds a Bachelor in Technology (Automobile Engineering) degree from Madras Institute of Technology, Chennai and He is a chartered financial analyst since 2013 and he holds Master of Business Administration from Bharathidasan a Bachelor of Commerce as well as Bachelor of Engineering University, India. (Hons) from Monash University specialising in Finance and Electrical and Computer Systems Engineering respectively. Prior to joining the Company, Mr Bala developed his career with different automobile manufacturers like Toyota in India Prior to joining the Company, he was the Group Head of where he held various roles in the after-sales division. He Corporate Finance and Treasury (Contract) of Petronas also spent a number of years with Corcorde Motors in India Lubricants International based in Kuala Lumpur from April (a dealership chain for TATA Passenger vehicles). 2019 until October 2019. Directorship in other public companies and listed issuers: Before that, he developed his career within the past 10 • Nil. years with the Daimler group’s financial division. His last position with the Daimler’s group was Chief Financial Officer of Mercedes-Benz Services Malaysia Sdn Bhd from 2014 to early 2019. None of the Key Management personnel has any share in Directorship in other public companies and listed issuers: the Company or its subsidiaries, family relationship with • Nil. any Directors and/or major shareholders of the Company, conflict of interest with the Company, convictions for offences (other than traffic offences, if any) within the past 5 years, and been subject to public sanction or penalty by relevant regulatory bodies during the financial year ended 31 December 2019. 13 Cycle & Carriage Bintang Berhad Annual Report 2019

Corporate Governance Overview Statement

The Board of Directors (“Board”) continues to strongly (i) ensuring that the Group’s goals and objectives support the recommendations of the Malaysian Code on are clearly established and that a strategic plan Corporate Governance (“MCCG”) issued by the Securities which promotes sustainability is in place to Commission Malaysia in 2017, which sets out the broad achieve them; principles, intended outcomes, practices and guidance to cultivate a corporate culture anchored on accountability, (ii) establishing policies for strengthening the transparency and sustainability. performance of the Group including ensuring that Management is proactively seeking to build The Board remains committed to applying the principles the business; and practices under the MCCG to ensure that good corporate governance is practised and instilled throughout (iii) adopting performance measures to monitor Cycle & Carriage Bintang Berhad (“Company”) and its implementation and performance of the subsidiaries (collectively “Group”) to effectively discharge strategies, policies, plans and legal and fiduciary its responsibilities to ensure sustainable growth as well obligations that affect the business; as protect and enhance shareholders’ value. The Group’s corporate governance practices are periodically reviewed to (iv) overseeing the conduct of the Group’s business ensure its relevance and effectiveness. Where there might to evaluate whether the business is being be departures from the principles set out in the MCCG, properly managed; efforts will be made to review these practices with a view to compliance. (v) ensuring that the Group has an appropriate business risk management process, including This corporate governance overview statement sets out an adequate control environment which covers generally the Group’s compliance with the practices of the the internal control systems and management MCCG for the financial year ended 31 December 2019. This information systems; statement is prepared in compliance with the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities (vi) ensuring that an appropriate succession plan for Berhad (“Bursa”). For full details in relation to the compliance members of the Board and Senior Management and/or departure from each practice set out in the MCCG are in place; and during the financial year ended 31 December 2019, please refer to the Corporate Governance Report made available (vii) ensuring that there is in place an appropriate on www.cyclecarriage.com.my. investor relations and communications policy which encourages shareholders’ participation A. BOARD LEADERSHIP AND EFFECTIVENESS at general meetings and promotes effective communication and proactive engagements The Board of Directors with shareholders.

The Board has overall responsibility for the strategic Similarly to previous years, Jardine Cycle & Carriage direction of the Group while exercising oversight on Limited (“JC&C”) adopts an annual staff planning the management. The Board meets at least once process. In the context of the Group, the discussion quarterly to review corporate strategies, operations takes place at JC&C Group level, in consultation with and performance of business units within the Group. JC&C’s Regional Director – Human Resources. The All Board members bring their independent judgement Chief Executive Officer of the Company (“CEO”) and to bear on issues of strategy, performance, resources Regional Director – Human Resources will evaluate and standards of conduct. the bench-strength of core and/or mission-critical positions and identify and review the flight risk and Having regard to their fiduciary responsibilities and development opportunities of the Company’s key obligations, the Board will steer the direction and management personnel during the annual assessment supervise the management of the business and affairs process. Such staff planning process is done in of the Group including: tandem with the business strategy and imperatives over a mid-term period, with tactical plans reviewed annually for relevance. 14 Cycle & Carriage Bintang Berhad Annual Report 2019

Corporate Governance Overview Statement

(continued)

Board Committees of the Group are required to read, understand and comply with the aforesaid code of conducts, which The Board has established and delegated certain is communicated via the Company’s website and specific responsibilities to three (3) Board committees, workplace portal. Failure of which can result in serious namely the audit, remuneration and nominating consequences being taken against the individual committees. These Board Committees have the concerned. authority to deal with particular issues under its purview as specified in the Board Charter and will The Board Charter (which includes the Directors’ report to the Board with their recommendations, if any. Code of Best Practice), the JM CoC and DMI CoC Nonetheless, the ultimate responsibility for the final can be accessed on the Company’s website at decision on the recommendations still lies with the www.cyclecarriage.com.my. entire Board, who has fiduciary duties and is required to act in the best interest of the Company. Board Meetings

Board Charter and Code of Conduct During the financial year ended 31 December 2019, eight (8) Board Meetings were held, of which four (4) The Company has in place a Board Charter that sets were the quarterly Board Meetings and the other four out, among others, the responsibilities, authorities, (4) were Special Board Meetings. procedures, evaluations and structures of the Board and Board Committees, the relationships of the Board The four (4) Special Board Meetings were held with the Company’s Management and shareholders following the Company’s receipt of the offer letter as well as code of best practice for the Directors. from JC&C on 11 November 2019 requesting for the Company to undertake a selective capital reduction In addition, Jardine Matheson Holdings Limited and repayment exercise pursuant to Section 116 of (“Jardine Matheson”) has a code of conduct for its the Companies Act 2016 (“Proposed SCR”). These group of companies (“JM CoC”) and JC&C has a code Special Board Meetings were held for the Board to of conduct compliance principles for its direct motor deliberate on, amongst others, the appointment of interests business (“DMI CoC”) which establishes the advisors for the Proposed SCR, the composition of the standards and values which the Jardine Matheson and due diligence working group for the Proposed SCR, JC&C wish to uphold in operating all of its businesses the financial projections required by the independent to ensure compliance with local laws and regulations. adviser, Affin Hwang Investment Bank Berhad, for These code of conducts apply to the Group, by virtue it to evaluate the offer from JC&C, and for the non- of the Group being a part of JC&C’s direct motor interested directors to deliberate on the appointment interests business arm. The Group treats compliance of the independent adviser and whether to table the with the JM CoC and DMI CoC as essential and offer from JC&C to the disinterested shareholders for mandatory. All members of the Board and employees consideration.

15 Cycle & Carriage Bintang Berhad Annual Report 2019

Corporate Governance Overview Statement

(continued)

The record of attendance of the directors at Board Meetings held during the financial year ended 31 December 2019 is set out below:

Directors Designation No. of quarterly No. of Special Board Board Meetings Meetings attended/ attended/ No. of No. of Special Board quarterly Board Meetings held whilst Meetings held whilst in office in office Haslam Grey Preeston* Chairman and Non- 2/2 N/A Independent Non-Executive Director Chan Tze Choong Eric** Chairman and Non- 2/2 4/41 Independent Non-Executive Director Rossana Annizah binti Deputy Chairman and Non- 3/4 2/42 Ahmad Rashid Independent Non-Executive Director Tang Saw Hua Senior Independent Non- 4/4 4/4 Executive Director Anthony Albert Collingridge Independent Non-Executive 4/4 4/4 Director Chan Kim Kooi*** Alternate Director to Chan Tze 2/2 4/41 Choong Eric Teng Wei Ann Adrian^ Alternate Director to Rossana 1/1 N/A Annizah binti Ahmad Rashid Kent Teo# Alternate Director to Rossana 2/2 4/41 Annizah binti Ahmad Rashid

* Haslam Grey Preeston resigned as the Chairman and Non-Independent Non-Executive Director with effect from 30 April 2019. ** Chan Tze Choong Eric resigned as an alternate to Haslam Grey Preeston on 30 April 2019 and was appointed as the Chairman and Non-Independent Non-Executive Director with effect from 1 May 2019. *** Chan Kim Kooi was appointed as the Alternate Director to Chan Tze Choong Eric with effect from 1 July 2019. ^ Teng Wei Ann Adrian resigned as the Alternate Director to Rossana Annizah binti Ahmad Rashid with effect from 31 March 2019. # Kent Teo was appointed as the Alternate Director to Rossana Annizah binti Ahmad Rashid with effect from 1 July 2019. 1 As he is deemed interested in the Proposed SCR for the reasons set out in Section 10.1 of the circular to shareholders dated 14 January 2020, he had participated in the Special Board Meeting held on 10 December 2019 via conference call and subsequently excused himself from the said meeting when the non-interested directors deliberated on the appointment of an independent legal adviser to advise the non-interested Directors, Independent Adviser’s evaluation of the terms of the Proposed SCR and whether to table the offer from JC&C to the disinterested shareholders for consideration and approval. 2 As the Special Board Meetings held on 4 and 6 December 2019 were convened on short notice, she was unable to attend the aforesaid meetings due to conflict of schedule. Further, as she is deemed interested in the Proposed SCR for the reasons set out in Section 10.1 of the circular to shareholders dated 14 January 2020, she had participated in the Special Board Meeting held on 10 December 2019 via conference call and subsequently excused herself from the said meeting when the non-interested directors deliberated on the appointment of an independent legal adviser to advise the non-interested Directors, Independent Adviser’s evaluation of the terms of the Proposed SCR and whether to table the offer from JC&C to the disinterested shareholders for consideration and approval. 16 Cycle & Carriage Bintang Berhad Annual Report 2019

Corporate Governance Overview Statement

(continued)

Based on the above, it is noted that during the The composition of the Board is further balanced by financial year ended 31 December 2019, all members the presence of Independent Non-Executive Directors. of the Board (including the Alternate Directors) have Although all Directors have equal responsibility for complied with the 50% attendance requirement in the Group’s business directions and operations, the respect of Board Meetings specified in Paragraph Independent Non-Executive Directors played an 15.05(3)(c) of the MMLR. active role in ensuring that the strategies proposed by the Management are fully discussed and evaluated, Apart from the aforesaid four (4) quarterly Board having considered the long term interests of all Meetings and the four (4) special Board Meetings interested parties, including shareholders, employees, held during the year, the Board has also discussed, customers, suppliers and the community as a whole. deliberated and approved certain matters requiring its approval by way of written resolutions, where Practice 4.1 of the MCCG states that at least half of necessary. the Board should comprise Independent Directors. During the financial year ended 31 December 2019, Board Balance half of the Board (excluding Alternate Directors to the Chairman and Deputy Chairman) was made up As at 31 December 2019, the Board had four (4) of Independent Directors in accordance with the best members and two (2) alternate members, comprising practice advocated under Practice 4.1 of the MCCG. one (1) Senior Independent Non-Executive Director, The Board will continue to monitor and review the one (1) Independent Non-Executive Director, two Board size and composition as may be needed to (2) Non-Independent Non-Executive Directors strengthen the Board composition and the Company’s (“NINEDs”) and two (2) Alternate Directors to the standards of corporate governance. NINEDs. Together, the Directors bring a wide range of business and financial experiences relevant to Practice 4.2 of the MCCG states that the tenure of an the strategic direction and objectives of the Group. Independent Director should not exceed a cumulative A brief description of each Director’s background is term of nine (9) years. Upon completion of the nine presented in pages 9 to 11 of this Annual Report. (9) years, an Independent Director may continue to serve on the Board as an Independent Director The current composition of the Board comprising of subject to shareholders’ approval being obtained for two (2) female Directors, both of whom are Malaysians the retention. During 2019, there is no director on the and four (4) male Directors, all of whom are non- Board of the Company which has served a cumulative Malaysians, also reflects the gender and cultural term of exceeding nine (9) years. background diversity as recommended by the MCCG. The Board is committed to retain such diversity in the Access to Advice and Information event the Board increases in its size. The Management is duty bound to furnish the Board In compliance with the MCCG, the positions of with all material information for the Board to discharge Chairman and CEO of the Company are held by its responsibilities. In order for the Board to function different individuals. A clear division of responsibility effectively, matters for the Board’s consideration are between the Chairman and the CEO exists to promote presented to all the Directors with sufficient time to accountability as well as to ensure a balance of power enable the Directors to examine the issues and to and authority. Formal position descriptions for the obtain further explanation where necessary. Chairman and the CEO outlining their respective roles and responsibilities are set out in the Board Charter. The Management endeavours to comply with In the event that the Group does not have a CEO, Guidance 1.5 of the MCCG which stipulates that such other person appointed by the Board shall have Board papers should be circulated for the Board’s overall charge of the Group to the extent determined review at least five (5) business days prior to any by the Board. The division of responsibilities between scheduled Board meeting. The Board papers include, the Chairman and the CEO is reviewed annually by among others, the following: the Nominating Committee. 17 Cycle & Carriage Bintang Berhad Annual Report 2019

Corporate Governance Overview Statement

(continued)

• Minutes of previous Board Meeting (v) ensure proper upkeep of statutory registers and • Minutes of meetings of Committees of the Board records of the Company; and • Directors’ Written Resolutions • Monthly performance report of the Group (vi) assist the Chairman in the preparation for and • Operational matters conduct of meetings. • Financial matters • Funding requirements Appointments to the Board • Business strategy matters • Project papers The MCCG endorses, as good practice, a formal • Schedule of Board and Committee meetings procedure for appointments to the Board, with a Nominating Committee making recommendations There is a schedule of matters reserved specifically to the Board. The MCCG, however, states that this for the Board’s decision, including the approval of procedure may be performed by the Board as a whole, corporate plans and budgets, acquisition and disposal although, as a matter of best practice, it recommends of major assets, major investments, changes to the that this responsibility be delegated to a committee. Management and control structure of the Group and issues in respect of key policies, procedures and The Board has adopted the best practice and authority limits. the Nominating Committee is delegated with the responsibility to evaluate candidates and recommend The Board has also approved a procedure for new appointments to the Board. Directors, whether as a full Board or in their individual capacities, to take independent advice, where The Board takes note of Practice 4.5 of the MCCG necessary, at the Group’s expense in furtherance of pertaining to the need to establish a policy formalising their duties. the approach to boardroom diversity and to set targets and measures for the adoption of the said The Company has appointed three (3) qualified named recommendation. secretaries for the Company and its subsidiaries. All secretaries are members of Malaysian Institute of While the Board does not have an established policy Chartered Secretaries and Administrators (“MAICSA”) (or targets or measures), it gives consideration to each and they play a supportive role to the Board and candidate’s gender, ethnicity, age and nationality, in their committees by advising the Board on corporate addition to each candidate’s skills, experience and governance matters, ensuring adherence to the Board core competencies, as well as what each quality Charter, policies and procedures from time to time. brings to the Board in deciding Board membership. The Board is committed to diversity and has an equal All Directors have access to the advice and services opportunity policy where there are no barriers by of the Company Secretary including the following: reason of a candidate’s gender, ethnicity, age and nationality. As at 31 December 2019, the Board had (i) advise the Board and the Management on two (2) female Directors making 50% of the Board corporate governance issues; (excluding Alternate Directors to the Chairman and Deputy Chairman). (ii) ensure compliance of listing and related statutory obligations under Companies Act The Nominating Committee reviews each proposal for 2016 (“Act”), MMLR and Capital Market and the appointment of a new member to the Board. The Services Act 2007; candidate will be assessed for his or her suitability and potential contribution to the Board, taking into account (iii) ensure that Board procedures follow the the existing competencies, knowledge and experience applicable rules and regulations and that such of the other Board members. After considering factors procedures for the conduct of the affairs of the such as the candidate’s professional qualifications, Board are complied with; business experience and capabilities and cultural background, suitable candidates will be nominated (iv) attend the Board, Board Committee and general to the Board for approval. The Board is encouraged meetings, and ensure the proper recording of to utilise independent sources to identify suitable minutes of meetings; qualified candidates. For future appointments to the Board, the Group will consider sourcing suitable candidates from directors’ registry and professional associations, wherever applicable. 18 Cycle & Carriage Bintang Berhad Annual Report 2019

Corporate Governance Overview Statement

(continued)

A summary of the activities of the Nominating • Product Forum 2019 for Mercedes-Benz Committee in the discharge of its duties for the Passenger Car, Berlin, Germany financial year ended 31 December 2019 are set out • JIM - Creating the Future (Strategy Workshop 1 in the Statement of Nominating Committee in pages : Transformation plan and Operating Framework 28 and 29 of the Annual Report. development process) • JIM - Creating the Future (Strategy Workshop Policy on External Appointments 1 : Full organisation structures top to bottom) • Evobus Citaro Hybrid Training Demo/Inspection The Group recognises that its Directors may be held in Manheim, Germany invited to become Directors of other companies and • Board Leader Programme - Module 3 of the that exposure to other organisations can broaden the SMU-SID Executive Certificate in Directorship experience and knowledge of its Directors which will programme (Finance for Director) benefit the Group. Directors are therefore at liberty • Board Leader Programme - Module 1 of the to accept other board appointments so long as such SMU-SID Executive Certificate in Directorship appointments are not in conflict with the business of programme (The Role of Directors, Duties, the Group and do not adversely affect the Directors’ Responsibilities & Legal Obligations) performance as a member of the Board. • Board Leader Programme - Module 1 of the SMU-SID Executive Certificate in Directorship In addition, the Directors are required to disclose programme (Assessing Strategic Performance and update their directorships and shareholdings in The Board Level View) other companies as and when necessary. The Board • Director & Officers Insurance confirms that none of the Directors hold directorships • Malaysian Anti-Corruption Laws in more than five (5) listed issuers in Malaysia. • Raising Defence Section 17A Malaysian Anti- Currently, only two (2) of the Directors, namely Corruption Commission Act Rossana Annizah binti Ahmad Rashid and Anthony • IGNITE: Jardines Advanced Leadership Albert Collingridge, hold directorships in other public Programme 2019 with London Business School companies in Malaysia. for Transformation (Model 1 – Leadership in a VUCA World) Directors’ Training • Digital Native Agenda (DNA23) • Digital Innovation Conference by British As an integral part of the process of appointing new Malaysian Chamber of Commerce Directors, the Nominating Committee ensures that • ACI Breakfast Roundtable 2019 there is an orientation programme for new Board • Luncheon – Future Prospects for Trade & members to familiarise themselves with the Company’s Investment businesses, their roles and responsibilities. From time • Responsibilities of Directors and Senior to time, Directors also receive further training on Management developments which may have a bearing on their • EPF Investment Seminar duties and contribution to the Board, from professional • Audit Oversight Board Conversation with Audit bodies, regulatory institutions and corporations. Committees • EPF International Social Well-being Conference The Directors have in the financial year ended 31 2019 December 2019 attended various programmes • 2020 Post Budget Debate covering areas such as anti-corruption laws, • How Board can build reputation resilience leadership, financial reporting, economy, duties and • Evaluating Effective Internal Audit Function responsibilities of directors, strategic planning and • Risk Management in Information Technology digital innovation which included, among others, the • Mandatory Accreditation Programme Training following: The Board confirms that all Directors attended trainings during the financial year ended 31 December 2019. 19 Cycle & Carriage Bintang Berhad Annual Report 2019

Corporate Governance Overview Statement

(continued)

Re-election and Appointment of Directors Committee may draw on the expertise of consultants before making recommendations to the Board. The In accordance with the Company’s Constitution, all final decision on any remuneration package offered new Directors who are appointed by the Board are to the CEO and the fees payable to Non-Executive subject to re-election by shareholders at the Annual Directors is the responsibility of the entire Board. General Meeting (“AGM”) following their appointment. The Company’s Constitution also provides that at least Remuneration Committee one-third of the remaining Directors are subject to re- election by rotation at each AGM and all Directors are As at 31 December 2019, the members of the to offer themselves for re-election once every three Remuneration Committee are: (3) years. The Nominating Committee also makes • Chan Tze Choong Eric – Chairperson (Non- recommendations to the Board on the re-election of Independent Non-Executive Director) the Directors. • Anthony Albert Collingridge (Independent Non- Executive Director) In accordance with the Company’s Constitution, Tang • Tang Saw Hua (Senior Independent Non- Saw Hua retires by rotation pursuant to the Clause Executive Director) 98 of the Constitution of the Company and Chan Tze Choong Eric, who was appointed as a Director The Remuneration Committee met three (3) times during the financial year ended 31 December 2019, during the financial year ended 31 December 2019 and is required to retire at the forthcoming AGM pursuant details of attendance of members of the Remuneration to Clause 102 of the Constitution of the Company. Committee are as follows:

Chan Tze Choong Eric is eligible and has offered Directors No. of meetings himself for re-election at the forthcoming AGM. attended / No. of However, Tang Saw Hua has indicated that she meetings held during does not wish to seek re-election as a Director of the term as a member the Company. Hence, she shall hold office until the conclusion of the forthcoming AGM. The Nominating Chan Tze Choong Eric 2/2 Committee and the Board are in the midst of (Chairperson)* identifying a suitable candidate to be appointed as Anthony Albert 3/3 the new non-independent non-executive director to Collingridge replace Tang Saw Hua. Tang Saw Hua 3/3 B. REMUNERATION Haslam Grey Preeston** 1/1

The Company is guided by the practices and guidance * Chan Tze Choong Eric was appointed as the as recommended by the MCCG to determine the Chairman of the Board and Chairperson of remuneration for Directors. In the case of Non- Remuneration Committee on 1 May 2019. Executive Directors, the level of remuneration reflects ** Haslam Grey Preeston has resigned from the Board the level of responsibilities undertaken by such and Remuneration Committee on 30 April 2019. Directors. Remuneration packages of the Management are structured so as to link rewards to the achievement Remuneration Structure of corporate and individual performance. The remuneration structure of Directors and the Remuneration Procedure Management is as follows:

The Board agrees that a well-designed remuneration (i) Basic Salary policy is critical to attract, retain and motivate Directors and the Management. The Remuneration Committee The Remuneration Committee recommends recommends to the Board the framework of executive to the Board for approval the annual basic remuneration and its cost, including the remuneration salary of the CEO after having considered package for the CEO. The Remuneration Committee his performance. In the evaluation process, also recommends the framework of fees payable consideration is given to the salary scales for to Non-Executive Directors. The Remuneration similar jobs in the industry. 20 Cycle & Carriage Bintang Berhad Annual Report 2019

Corporate Governance Overview Statement

(continued)

(ii) Directors’ Fees Directors’ Remuneration

Directors’ fees are only payable to Non- Directors’ fees (excluding attendance fees) for the Executive Directors. The Remuneration Non-Executive Directors for the financial year ended Committee recommends the framework of 31 December 2019 is shown in the following table: Executive Directors’ fees to the Board. The fees structure is determined after a study Directors Directors’ fees of comparable organisations’ practices or RM’000 available professional studies/surveys as well as the level of responsibilities involved. Chan Tze Choong Eric* 54 Rossana Annizah binti Ahmad 56 Non-Executive Directors receive annual fixed Rashid^ fees based on the tenure of directorship and Tang Saw Hua 79 attendance fees based on attendances at Board and Board Committee meetings. The fees are Anthony Albert Collingridge 77 paid quarterly in arrears. Haslam Grey Preeston# 29 (iii) Bonus Scheme Total 295

The Group operates a bonus scheme for all * Director’s fees paid to Jardine Cycle & Carriage employees, including the CEO. The qualification Limited. Chan Tze Choong Eric was appointed and eligibility for the scheme is linked to the as Chairman of the Board, Chairperson of the performance of the Group’s business activities Remuneration Committee and member of the and an assessment of the employee’s individual Nominating Committee with effect from 1 May performance and contribution. The CEO’s 2019. bonus is dependent on the level of profit ^ Director’s fees paid to Jardine Matheson achieved for the Group’s business activities (Malaysia) Sdn. Bhd. against targets, together with an assessment # Director’s fees paid to Jardine Cycle & Carriage of his performance during the year. Bonus Limited. Haslam Grey Preeston resigned as payable to him is reviewed by the Remuneration Chairman of the Board, Chairperson of the Committee and approved by the Board. Remuneration Committee and member of the Nominating Committee on 30 April 2019. (iv) Benefits in Kind

Other customary benefits (such as car, driver, C. INTEGRITY IN CORPORATE REPORTING club membership, mobile phone allowances) AND MEANINGFUL RELATIONSHIP WITH are made available as appropriate. STAKEHOLDERS

(v) Employees Provident Fund The Board recognises the importance of maintaining an effective communication policy that enables both Contributions are made to the Employees the Board and the Management to communicate Provident Fund, the national mandatory defined effectively with investors, stakeholders and the general contribution plan. The rate of contribution is public. The Board acknowledges that transparent above the mandatory requirement in accordance and regular engagement and communication assist with the Group’s employment scheme and it investors, both existing and potential, in making applies to all executive employees. informed investment decisions while also assisting the Company to address stakeholders’ expectations. (vi) Service Contract

There is currently no service contract with any Director. 21 Cycle & Carriage Bintang Berhad Annual Report 2019

Corporate Governance Overview Statement

(continued)

Dialogue between the Company and Investors D. EFFECTIVE AUDIT AND RISK MANAGEMENT

The Company adheres strictly to the disclosure Audit Committee requirements under the MMLR. Financial results of the Group are announced quarterly to Bursa via There is no change in the composition of the Audit Bursa LINK after being approved by the Board. Committee during the year 2019. The members of the Material transactions and events which occurred are Audit Committee were: also announced through press releases and timely • Tang Saw Hua – Chairperson (Senior announcements made to Bursa. Independent Non-Executive Director) • Rossana Annizah binti Ahmad Rashid (Non- Investor information regarding the Company, the Independent Non-Executive Director) Annual Report, Board Charter, JM CoC and DMI CoC • Anthony Albert Collingridge (Independent Non- can be accessed on the Company’s website at www. Executive Director) cyclecarriage.com.my. The Management Discussion and Analysis contained within the Annual Report In line with Practice 8.1 of the MCCG, the chairperson provides an overview of the Group’s performance, of the Audit Committee is not the chairman of the operations and prospects as well as factors which impact the Group’s performance and shareholders’ Board and the Audit Committee comprises solely value. Non-Executive Directors. The Board takes note of the recommendation for all members of the Audit AGM Committee to be Independent Directors. As at 31 December 2019, the Board (excluding the alternate At each AGM, the Board presents to the shareholders directors) comprised of four (4) members, of which the performance of the business for the most two (2) were Independent Directors and both of them recently concluded financial year. To ensure that were members of the Audit Committee. its shareholders are able to make informed voting decisions at the AGM and to provide opportunity Apart from the requirement to consist solely of for shareholders to engage each Director, the Independent Directors, the composition of the Audit Company ensures that the Chairman, the Directors Committee also complied with all other requirements and Senior Management team attend the meeting set out in Paragraph 15.09 of Chapter 15 of the MMLR and are available to provide meaningful response to of Bursa. shareholders’ questions raised during the AGM. Four (4) Audit Committee meetings were held Items of special business included in the notice of during the financial year ended 31 December 2019 AGM will be accompanied by a full explanation of the and details of attendance of members of the Audit effects of a proposed resolution. Separate resolutions Committee are as follows: are proposed for separate issues at the meeting and the Chairman declares the number of proxy votes received both for and against each separate resolution Directors No. of meetings where appropriate. attended / No. of meetings held during Further, the Company endeavours to comply with the term as a member Practice 12.1 of the MCCG which recommends that Tang Saw Hua 4/4 notice of an AGM should be given to the shareholders (Chairperson) at least 28 days prior to the meeting. In 2019, the notice of the AGM and annual report were announced Rossana Annizah binti 3/4 and dispatched 29 days before the date of AGM. Ahmad Rashid Anthony Albert 4/4 Poll Voting Collingridge

In compliance with the requirement under the MMLR, A summary of the activities of the Audit Committee the Company implemented electronic poll voting system for all resolutions tabled at the AGM held during the year are set out in the Audit Committee during the financial year ended 31 December 2019 and Report in pages 26 and 27 of this Annual Report. appointed an independent scrutineer to validate the votes cast at the AGM. Voting results were provided to shareholders on the same day at the AGM and announced via Bursa LINK thereafter. 22 Cycle & Carriage Bintang Berhad Annual Report 2019

Corporate Governance Overview Statement

(continued)

Financial Reporting The Statement on Risk Management and Internal Control set out in pages 23 to 25 of this Annual In presenting the annual financial statements to Report provides an overview of the risk management shareholders and the announcements of quarterly strategies and state of internal controls adopted by financial results, the Board aims to present a balanced the Group. assessment of the Group’s financial position and prospects. Whistle-Blowing Policy

The Audit Committee assists the Board in overseeing The Group has in place a Whistle-Blowing Policy the financial statements to ensure that the financial designed to create a positive environment in which statements give a true and fair view in accordance employees can raise genuine concerns without fear with Malaysian Financial Reporting Standards, of recrimination and enable prompt corrective action International Financial Reporting Standards and the to be taken where appropriate. The Whistle-Blowing requirements of the Companies Act 2016. Policy can be accessed on the Company’s website at www.cyclecarriage.com.my. The Audit Committee reviews and deliberates on matters and issues pertaining to the annual financial Relationship with External Auditors statements prior to recommending the same for approval by the Board and issuance to shareholders. Key features underlying the relationship of the Audit Committee with External Auditors are included in the Risk Management and Internal Control Audit Committee’s terms of reference as detailed in the Board Charter which can be found on the Company’s The Board acknowledges its responsibility for the website at www.cyclecarriage.com.my. Group’s system of internal controls which covers financial controls, operational and compliance During the financial year ended 31 December 2019, controls as well as risk management. the Audit Committee invited the Company’s External Auditors to attend all Audit Committee meetings The Audit Committee reviews the overall scope of the to update the Audit Committee on the changes in Group’s internal audit and oversees the Company’s major accounting standards and its subsequent risk management. The Audit Committee meets with implementation, and to answer the concerns raised by the Group’s Internal Auditors to discuss the results the Audit Committee during their meetings. The Audit of their examinations and their evaluation of the Committee met with the External Auditors once during system of risk management and internal controls of the financial year ended 31 December 2019 without the Company and its subsidiaries. the presence of the Management.

The Group’s internal audit function is performed by The Audit Committee recommended the re- Jardine Matheson Group Audit and Risk Management appointment of Messrs PricewaterhouseCoopers (“GARM”) which is an independent function within the PLT (“PwC”) as external auditors for the financial Jardine Matheson to assess the adequacy of internal year ending 31 December 2020 after evaluating their controls and to monitor if established controls are performance as an external audit firm, suitability, operating effectively. Functionally, GARM reports independence and objectivity, audit scope and periodically to the Audit Committee on the general audit fees. After due deliberation, the Board at control environment of the Group and GARM has its meeting held on 26 February 2020 approved unrestricted access to the Audit Committee. the recommendation by the Audit Committee for the shareholders’ approval to be sought at the GARM’s scope of work includes the issuance of audit forthcoming AGM on the re-appointment of PwC as reports, implementation status reports, reporting on external auditors of the Company for the financial issue that generally have an effect on the Group’s year ending 31 December 2020 and to authorise the control environment, and perform audit reviews on Directors to fix the external auditors’ remuneration. corporate and business operations focusing on key risk areas identified during the planning process. 23 Cycle & Carriage Bintang Berhad Annual Report 2019

Statement on Risk Management and Internal Control

Introduction The Management is required to comprehensively identify and assess significant risks covering likelihood of occurrence, The preparation of this statement is in compliance with magnitude and speed of impact. The Management is Paragraph 15.26(b) of the Main Market Listing Requirements also required to identify and evaluate the adequacy and (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa”) implementation of mechanisms to manage, mitigate, which requires the Board of Directors (“Board”) of public avoid or eliminate these risks. The process encompasses listed companies to include in its Annual Report a “statement assessments and evaluations at business unit process level about the state of internal control of the listed issuer as a before being examined from a Group perspective. Reports group”. are updated on a bi-annual basis and submitted to Jardine Cycle & Carriage Limited. Additional to this process, Jardine The Board is committed to maintaining sound internal control Matheson Group Audit and Risk Management (“GARM”) in the Group and is pleased to present the Statement on act as internal auditors, updating the Audit Committee on Risk Management and Internal Control for the financial the Group’s internal audit activities by tabling the Internal year ended 31 December 2019 as guided by the Statement Audit Report to the Audit Committee on a quarterly basis. on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers and taking into consideration the Once a year, a written report is presented to the Audit recommendations underlying Principle B of the Malaysian Committee on significant risks, measures taken by the Code on Corporate Governance. Management to address them and the residual risk exposure impacting the Group. The Board then reviews and discusses Responsibility with Management at Board Meetings the summary of risk tolerance and additional internal controls to be implemented, The Board recognises the importance of sound internal if any. control and risk management practices, leading to effective corporate governance. In this aspect, the Board affirms The following are considered major residual risk exposures its overall responsibility for the Group’s system of internal for the Group: control and risk management, and for reviewing the adequacy and effectiveness of the internal control and risk 1. Dependence on single dealership and related risks management systems. It should, however, be noted that such systems of internal control and risk management are The Group has been appointed by Mercedes-Benz only designed to manage, as opposed to eliminate, the risk Malaysia (“Principal”), as a dealer of Mercedes-Benz of failure to achieve business objectives. Accordingly, such passenger and commercial vehicles. The Group’s systems can only provide reasonable rather than absolute current business model is entirely based on this assurance against material losses, misstatements or other single brand. Whilst the Group endeavours to achieve significantly adverse consequences.. targets and continuously takes efforts to improve infrastructure and business performance, changes Risk Management Framework in the Principal’s strategies and decisions may be outside of management control. This could lead to The Group has in place a formal risk management process termination of relationship between the Group and the to identify, evaluate and manage significant risks impacting Principal which may have a catastrophic effect on the the Group. The process is supported by policies as well as Group’s business, financial condition, prospects and detailed procedures, methodologies, evaluation criteria and operational result. documentation requirements with the aim of ensuring clarity and consistency of application across the Group. These In addition, the Group is exposed to risks arising from procedures and methodologies are regularly reviewed to the Principal’s product and supply chain. Whilst the include new elements that aim at enhancing the reporting Group mitigates this by having adequate inventory process in order to improve comprehensiveness, and add levels and regular discussions with the Principal, greater value to the Audit Committee in line with current unforeseen disruptions to the production facilities or best practices. products of the Principal may arise that can impact the Group’s operations and financial performance. 24 Cycle & Carriage Bintang Berhad Annual Report 2019

Statement on Risk Management and Internal Control

(continued)

Technological disruptions currently taking place 5. Financial risk globally may evolve and threaten the dealership business model going forward. Whilst the Group The Group’s activities expose it to a variety of financial endeavours to monitor trends, initiate and implement risks, including the effects of changes in equity improvements incorporating digitalisation strategies, markets and interest rates. It manages its exposure technological disruptions can be unpredictable in to financial risks by using a variety of techniques and nature. This may lead to changes in the dealership instruments guided by strict policies that prohibit model or the distribution model of the Principal, speculative transactions. The Group regularly monitors impacting on the Group’s financial performance, its liquidity and cash position to ensure its financial assets and operations. obligations are met when due. Notwithstanding the above risk management policies, any unanticipated 2. Challenge to return to profitability financial market fluctuations may have an impact on the Group’s earnings. Trading conditions are expected to remain challenging with margin pressure in the automotive retailing 6. Natural disasters and/or pandemics segment of the premium luxury market. This may affect the Group’s profitability. While the Group Natural disasters and/or outbreak of pandemics remains committed to its business improvement may directly impact the Group’s physical assets and strategy, the impact will largely be achieved in medium facilities as well as impact on the Group’s operations to long-term. and earnings. Whilst the risk cannot be entirely eliminated, the Group has appropriate mitigating 3. Competition, economic cycle and government measures such as insurance, disaster recovery regulations and business continuity plans as part of its risk management system. The Group faces intense competition within the automotive industry. If the Group is unable to Internal Control System compete successfully against existing competitors or new entrants, its business, financial condition The embedded internal control system is designed to and results of operations will be adversely affected. facilitate achievement of the Group’s business objectives. If the vehicles the Group retails are less competitive It comprises the following: in the market in terms of design, technology and/or price, or there is an intensification in competition, the • Organisation structure with well-defined lines of Group’s market share may also be diluted. This may responsibility and delegated authority lead to price reductions, increased marketing efforts and the Group failing to meet its Target Agreements The organisation structure includes defined lines with the Principal. The Group may also be impacted of responsibility and delegation of authority to the by changes in government regulations, particularly Committees of the Board, the Chief Executive Officer relating to the National Automotive Policy. Any of these (“CEO’) and operating units through defined terms of events may have an adverse effect on the Group’s references, position descriptions and authorisation business, financial condition, prospects and results levels for all aspects of the business as set out in the of operations. Board Charter and Limits of Authority. Besides the predominantly non-executive standing committees 4. Cyber security such as Audit, Nominating and Remuneration Committees, the Board is supported operationally Cyber security is a growing concern worldwide. by Senior Management which consists of the Targeted cyber-attacks may directly impact the organisational leadership team, including the CEO Group’s facilities and operations or those of its and Chief Financial Officer (“CFO”). The Senior suppliers and customers, leading to an adverse Management convenes regularly to discuss its impact on the Group’s earnings and reputation. While strategic business agenda and channels appropriate the Group invests to enhance its cyber securities inputs to the Board for its oversight of the Group’s measures, such risk cannot be entirely eliminated. operations and maintenance of effective control. 25 Cycle & Carriage Bintang Berhad Annual Report 2019

Statement on Risk Management and Internal Control

(continued)

• Independence of the Audit Committee Monitoring and Review

The Audit Committee comprises non-executive The effectiveness of the Group’s systems of internal control members of the Board, with the majority being and risk management are monitored through periodical Independent Directors. The Audit Committee has full review of business processes, internal controls and business and unrestricted access to any information pertaining risk profile of operating units. The results of the review are to the Group and has direct communication channels examined by a team within the organisation, with significant with External Auditors and GARM. The primary areas of concern being reported to the Audit Committee. The objectives of the Audit Committee are to assist the Management continuously looks to strengthen and refine its Board in monitoring the Group’s management of its systems of internal control, where necessary. business and financial risks, whilst determining the appropriate internal control to manage these risks. The Management’s proposals on the Group’s strategic plans are tabled to the Board for approval. Updates are provided • Comprehensive budgeting and monitoring from time to time. processes Independent appraisals by GARM also ensure compliance Detailed and comprehensive budgets for both with policies, procedures, standards and legislation, giving business and support units are prepared on an annual reasonable assurance on the effectiveness of the Group’s basis for approval by the Board, indicating the future systems of internal control and risk management. business direction under a two-year operating plan. Actual performance is monitored against the budget No significant matter of serious concern was reported during on a monthly basis and appropriate explanations on the financial year ended 31 December 2019. significant variances are documented. Forecasts are periodically revised to reflect significant changes in the Review of this Statement business environment. Management reports outlining the performance of the business and support units As required by Paragraph 15.23 of the MMLR, the External against the budget, forecast, prior year results and Auditors have reviewed this Statement on Risk Management key business indicators are tabled and deliberated and Internal Control. Their limited assurance review was at Senior Management and Board Meetings for performed in accordance with Audit and Assurance Practice monitoring of performance. Guide (“AAPG”) 3 issued by the Malaysian Institute of Accountants. AAPG 3 does not require the External Auditors • Performance Measurement to form an opinion on the adequacy and effectiveness of the risk management and internal control systems of the Group. The Group has adopted a performance appraisal for the CEO. The Remuneration Committee and the Conclusion Board assess the CEO’s performance on an annual basis. The Board has delegated authority to the For the financial year under review and up to the date of CEO to review and assess the performance of the issuance of the Financial Statements, the Board has received Management. Senior Management also conducts assurance from the CEO and CFO that the Group’s systems performance appraisals for the staff on an annual of internal control and risk management are operating basis. adequately and effectively in all material aspects. No material losses, contingencies or uncertainties have arisen from any inadequacy or failure of the Group’s systems of internal control and risk management that require separate disclosure in the Group’s Annual Report. 26 Cycle & Carriage Bintang Berhad Annual Report 2019

Audit Committee Report

The Audit Committee was established by the Board in 1977. To ensure that the financial statements of the Group complied with the requirements of the Companies Act 2016 As at 31 December 2019, the members of the Committee and the applicable financial reporting standards, the Audit were: Committee invited the External Auditors to attend all Audit • Tang Saw Hua - Chairperson (Senior Independent Committee meetings to update the Audit Committee on Non-Executive Director) the changes in accounting standards and its subsequent • Rossana Annizah binti Ahmad Rashid (Non- implementation, and to answer the concerns raised by the Independent Non-Executive Director) Audit Committee during their meetings. • Anthony Albert Collingridge (Independent Non- Executive Director) The Audit Committee discussed with the External Auditors the audit plan which stated the nature and scope of audit In compliance with Paragraph 15.09(1)(b) of the Main Market and the results of examination arising from the external audit. Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa”), the members of the Audit Committee In addition, the Audit Committee reviewed the quarterly consist solely of Non-Executive Directors, the majority of financial results announcements to Bursa, the financial whom are independent. statements of the Company, and the consolidated financial statements of the Group as well as the statutory auditors’ The Audit Committee held four (4) meetings during the report thereon. During the Audit Committee meetings, the financial year ended 31 December 2019 and details of the Audit Committee and Senior Management deliberated on attendance of members of the Audit Committee are as significant matters including financial reporting issues and follows: significant judgement made by the Management. The Audit Committee recommended to the Board, subject to the Name of Committee Members No. of meetings shareholders’ approval, the selection of the Company’s and attended/ No. of its subsidiaries’ statutory auditors. meetings held during the term as The Audit Committee had on its meeting held on 26 a member February 2020 assessed the suitability and independence of External Auditors by obtaining affirmation from the Tang Saw Hua (Chairperson) 4/4 External Auditors that it maintained its independence in Rossana Annizah binti Ahmad 3/4 accordance with its internal requirements and with the Rashid provision of By-Laws on Professional Ethics, Conduct and Anthony Albert Collingridge 4/4 Practice of the Malaysian Institute of Accountants. The Audit Committee recommended the re-appointment of Members of Senior Management were invited to attend PricewaterhouseCoopers PLT (“PwC”) as External Auditors meetings of the Audit Committee to appropriately brief and for the financial year ending 31 December 2020 after furnish members of the Audit Committee with the relevant considering their performance. information and clarification to relevant items on the agenda. The Group’s Internal and External Auditors attended all the It is noted that the audit engagement partner would be meetings held during the financial year. The Audit Committee required to rotate every seven (7) years as per PwC’s internal had also met with the External Auditors once during the policy, which was in accordance with the By-Laws (on financial year without presence of the Management. Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants. The current audit engagement During the financial year ended 31 December 2019, the Audit partner has held the position for two (2) years, and will be Committee carried out its duties as set out in its terms of rotated in the financial year ending 31 December 2024. reference. In particular, the functions of the Audit Committee were to review accounting policies, statutory financial In performing its functions, the Audit Committee also statements and related party transactions of the Company reviewed the overall scope of the Group’s internal audit. and its subsidiaries, establish effective risk management and It met with Jardine Matheson Group Audit and Risk internal control framework within the Group and ascertain Management (“GARM”) who acts as Internal Auditors to that the financial statements of the Group are consistent discuss the results of their examinations and their evaluation with operational information on behalf of the Board. The of the internal control system of the Company and its full term of reference for the Audit Committee, as contained subsidiaries. in the Board Charter, is available online in the Corporate Governance section at www.cyclecarriage.com.my. 27 Cycle & Carriage Bintang Berhad Annual Report 2019

Audit Committee Report

(continued)

In its endeavours to fulfill its responsibilities, the Audit During the financial year, the Management worked closely Committee focused its attention on key aspects of business with the GARM in identifying risk areas, implementing control operations that have significant impact on profitability. measures and monitoring controls. Taking into consideration Other main issues discussed by the Audit Committee were the issues highlighted to the Audit Committee during the as follows: financial year ended 31 December 2019, GARM had found that the overall control environment of the Group to be • Review of the Group’s risk management reports; generally effective. • The new financial reporting standards issued by the Malaysian Accounting Standards Board, International GARM updated the Audit Committee on the internal audit Financial Reporting Standards and their applicability plan of the Group on a quarterly basis to ensure that the to the consolidated financial statements for the Audit Committee was kept abreast of the internal control financial year ended 31 December 2019; environment of the Group. • The disclosure requirements of the MMLR; and • Key audit matters, in relation to inventory write-down The total costs incurred for the internal audit function of and impairment of leasehold land classified as right- the Group for the financial year ended 31 December 2019 of-use assets, addressed in the auditors’ report for was RM309,000. the financial year ended 31 December 2019. Statement on Share Issuance Scheme by Audit Internal Audit Function Committee

The Group uses the services of GARM to fulfil its internal No Share Issuance Scheme was implemented during the audit requirements. GARM is headed by Ms Linda Chan, financial year ended 31 December 2019 and the Company a member of the Institute of Chartered Accountants in does not have any subsisting Share Issuance Scheme as England & Wales and has over 30 years of experience in risk at the date of this report. management and internal audit. It has adequate resources and appropriate standing to undertake their activities Annual Performance Assessment independently and objectively to provide reasonable assurance to the Audit Committee regarding the adequacy The Board has conducted an annual review of the term and effectiveness of the Group’s internal control systems, of office and an annual assessment of the composition, and assist the Board in monitoring and managing risks and performance and effectiveness of the Audit Committee internal controls. based on the recommendation of the Nominating Committee as required by the MMLR and as recommended under GARM reviews internal controls in all key activities of Principle B of the Malaysian Code on Corporate Governance. the Group and recommend improvement in controls and procedures. GARM is independent of the activities they audit The Nominating Committee and the Board are satisfied and perform their audit with impartiality and due professional with the independence in decision making by the Audit care. Findings are reported regularly to the Audit Committee Committee members and that the Audit Committee on quarterly basis. and its members have effectively discharged its duties in accordance with its term of reference. The Board is The Audit Committee approves the internal audit plan of also satisfied that the Committee has provided valuable GARM each year. The scope of the internal audit covers recommendations to assist the Board in making informed the audits of significant units and operations, including decision leading to effective and efficient Board Meetings. subsidiaries. In addition, GARM also audits the various The Board was well informed on the Audit Committee’s computer application systems and network of the Group. deliberations on a timely basis where the Report by the Audit The internal audit work is carried out according to the Committee’s Chairperson is a standing agenda item in the standards set by professional bodies, primarily the Institute scheduled meetings of the Board. of Internal Auditors for the Professional Practice of Internal Auditing. 28 Cycle & Carriage Bintang Berhad Annual Report 2019

Statement of Nominating Committee

The Nominating Committee has been established by the Members of the Senior Management attended these Board of Directors (“Board”) and is made up exclusively meetings upon invitation by the Committee Chairperson. of Non-Executive Directors with a majority of them being Independent Directors. The Nominating Committee is governed by its own terms of reference which is contained under the Board Charter As at 31 December 2019, the members of the Committee and is accessible on the Group’s official website atwww. are: cyclecarriage.com.my. • Anthony Albert Collingridge – Chairperson (Independent Non-Executive Director) The Role of the Nominating Committee • Chan Tze Choong Eric (Non-Independent Non- Executive Director) Each year, the Nominating Committee assesses the • Tang Saw Hua (Senior Independent Non-Executive effectiveness of the Board and Board Committees, Director) contributions and performance of each individual Director, as well as the Chief Executive Officer (“CEO”), and the Currently, none of the Independent Directors have served independence of the Independent Directors. It also ensures on the Board for more than nine (9) years. an appropriate framework and plan for Board and the Management’s succession for the Group. The Committee meets at least once a year. Additional meetings are scheduled when considered necessary by The Nominating Committee conducts an annual review the Nominating Committee or Committee Chairperson . The and recommends to the Board the structure, size, balance Nominating Committee may establish any procedures from and composition of the Board and Board Committees. This time to time to govern its meetings, keeping of minutes and requires a review of the required mix of skills and experience, its administration. including core competencies, which Non-Executive Directors should bring to the Board and other qualities for Its secretary is appointed by the Committee from time the Board to function effectively and efficiently. to time. Its meeting agenda are the responsibility of the Committee Chairperson with input from its members. The Nominating Committee is also responsible for identifying The Chairperson may also request the Management to and recommending suitable candidates to the Board for participate in this process. The agenda for each meeting approval and for appointments to the Board of the Company including supporting information is circulated at least five and its subsidiaries, as well as Board Committees of the (5) business days before each meeting to the Nominating Company, either to fill vacancies or as additions to meet Committee members and all those who are required to the changing needs of the Group. attend the meeting. The Committee considers calibre, background, skills and The Nominating Committee had met twice during the experience, and core competencies of the candidate when financial year ended 31 December 2019 and details of making a recommendation to the Board. Appointment of attendance of members of the Nominating Committee are any new member to the Board is a formal and transparent as follows: process by which a candidate could be identified via a recommendation by a Board member or Management, Name of Committee No. of meetings or sourced through the Jardine Matheson Group’s Members attended/ No. of extensive network of contacts. The Board may also rely meetings held during the on other independent sources to identify suitable qualified term as a member candidates. Anthony Albert 2/2 In accordance with the Company’s Constitution, all new Collingridge (Chairperson) Directors who are appointed by the Board are subject to Chan Tze Choong Eric* 1/1 re-election by shareholders at the Annual General Meeting Tang Saw Hua 2/2 (“AGM”) following their appointment. The Company’s Constitution also provides that at least one-third of the Haslam Grey Preeston** 1/1 remaining Directors be subject to re-election by rotation at each AGM and all Directors are to offer themselves for * Chan Tze Choong Eric was appointed as member of the re-election once every three (3) years. The Nominating Nominating Committee on 1 May 2019. Committee also makes recommendations to the Board on ** Haslam Grey Preeston retired as member of the the re-election of the Directors. Nominating Committee on 30 April 2019. 29 Cycle & Carriage Bintang Berhad Annual Report 2019

Statement of Nominating Committee

(continued)

Thereafter, the Board carries out its own assessment Board Effectiveness Assessment based on the recommendations made by the Nominating Committee and determines the appointments to be made. The Nominating Committee conducted an annual assessment The Company Secretary ensures that all appointments are of the Board’s effectiveness, as a whole and the contribution properly made and that legal and regulatory obligations of each Director, in respect of the financial year ended 31 are met. December 2019 using a set of customised self-assessment questionnaires completed by the Directors. The Board takes note of Practice 4.4 of Malaysian Code on Corporate Governance and is committed to ensure that The criteria for Board Committees and Board assessment the appointment of the Board and Senior Management are cover areas such as purpose, composition and process, based on objective criteria, merit and with due regard for contributions in topics like strategic perspective, governance, diversity in skills, experience, age, cultural background and integrity, commitment and ethics, judgement and decision gender. The Board is committed to diversity and has an equal making, teamwork and communication. These relate opportunity policy where there are no barriers by reason of directly to areas in which a Director would be expected to an individual’s gender, ethnicity, age and nationality. contribute and are designed to encourage the Director to be more effective. Apart from the above, the Nominating Committee also carries out the following annual evaluation: The results of the self-assessment by Directors and the (a) the independence of each Independent Director; Board’s effectiveness as a whole were compiled by the (b) each Director’s performance and ability to contribute Company Secretary and tabled to the Nominating Committee to the effectiveness of the Board; and thereafter to the Board for review and notation. (c) the effectiveness of the Committees of the Board; and (d) the effectiveness of the Board as a whole. The Nominating Committee and the Board were satisfied with the results of the annual assessment and are of the Other duties of the Nominating Committee include the view that the current size and composition of the Board following: is appropriate and well-balanced with the right mix of • Making recommendations to the Board on the re- skills, comprising individuals of high calibre, credibility and appointment and re-election of Directors who are having the necessary skills and qualifications, to enable the subject to retirement at the forthcoming AGM; Board and Board Committees to discharge their duties and • Evaluating and recommending the appointment of responsibilities effectively. senior executive positions, including the CEO, their duties and the continuation of their service; and • Recommending to the Board appropriate training and education programmes including orientating new Directors in respect to the business, structure and management of the Group as well as the expectations of the Board with regards to their contribution to the Board and Group. 30 Cycle & Carriage Bintang Berhad Annual Report 2019

Additional Compliance Information

In compliance with the Main Market Listing Requirements Material Contracts (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa”), the following information is provided: There were no material contracts entered into by the Company and its subsidiaries involving interests of Directors Utilisation of Proceeds and major shareholders which are either still subsisting at the end of the financial year ended 31 December 2019 or, In respect of the proceeds received from the disposal of the if not then subsisting, entered into since the end of the investment in Mercedes-Benz Malaysia Sdn Bhd of RM66.0 previous financial year. million, the Group has utilised whole of the proceeds for repayment of bank borrowings as at the date of this report. Recurrent Related Party Transactions

Audit and Non-Audit Fees The Company had at the Annual General Meeting (“AGM”) held on 23 April 2019 obtained a shareholders’ mandate The amount of audit fees and non-audit fees paid and for the Company and/or the Group to enter into recurrent payable to PricewaterhouseCoopers PLT (“PwC” or transactions of revenue or trading nature (“RRPTs”), which “External Auditors”) and firms affiliated to the External are necessary for its day-to-day operations and are in the Auditors’ firm by the Company and the Group for the ordinary course of business, with related parties. The said financial year ended 31 December 2019 are as follows: general mandate has been in effect from 23 April 2019 until the conclusion of the forthcoming AGM of the Company. Group Company (RM’000) (RM’000) Details of the RRPTs entered into during the financial year ended 31 December 2019 pursuant to the said mandate Audit Fees paid/payable to: are disclosed in Note 28 to the financial statements, of PwC 349 260 which none of the aggregate value of the said transactions Non-Audit Fees conducted pursuant to the shareholders’ mandate sought - PwC 24 24 previously exceeded the applicable prescribed threshold - Pricewaterhouse Coopers under Paragraph 10.09(2)(e) of the MMLR during the financial Taxation Services Sdn. Bhd. 81 56 year. - Pricewaterhouse Coopers Risk Services Sdn. Bhd. 15 15 Employee Share Scheme

Total 469 355 The Company did not establish any employee share scheme and does not have any subsisting employee share scheme during the financial year ended 31 December 2019. 31 Cycle & Carriage Bintang Berhad Annual Report 2019

Statement of Directors’ Responsibility for Preparing the Financial Statements

The Directors are required by the Companies Act 2016 In preparing the financial statements, the Directors have: (“Act”) to prepare financial statements for each financial year • adopted suitable accounting policies and applied them which have been prepared in accordance with Malaysian consistently; Financial Reporting Standards, International Financial Reporting Standards, the requirements of the Act and • made judgements and estimates that are reasonable the Main Market Listing Requirements of Bursa Malaysia and prudent; and Securities Berhad. • prepared the financial statements on a going concern basis as the Directors have a reasonable expectation, The Directors are responsible to ensure that the financial having made enquiries, that the Group and the statements give a true and fair view of the state of affairs of Company have adequate resources to continue the Group and of the Company at the end of the financial operations for the foreseeable future. year, and of the results and cash flows of the Group and of the Company for the financial year. The Directors acknowledge the responsibility for ensuring that the Company keeps accounting records which disclose with reasonable accuracy the financial position of the Group and of the Company and which enable them to ensure that the financial statements comply with the Act.

The Directors have overall responsibilities for taking such steps as are reasonably open to them to safeguard the assets of the Group, to prevent and detect fraud and other irregularities. 32 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

ABOUT THIS STATEMENT [102-1]

It is a privilege to be able to present Cycle & Carriage Bintang Berhad’s group of companies (“CCB” or “Group”) Sustainability Statement for the third consecutive year. This statement follows the progress of our second sustainability statement for the financial year 2018. This report presents information related to sustainability with regards to the economic, environmental and social aspects of the Group’s business operations.

Our Group continuously strives to identify new initiatives to improve our performance by embedding sustainability throughout our value-chain. We are committed towards engagement with stakeholders to better understand and meet their expectations. We aim to address issues that have been raised and hope that our stakeholders will continue to place their confidence in us.

SCOPE AND BOUNDARIES [102-3, 102-4, 102-6, 102-50, 102-52]

The statement covers the activities carried out by our Group during the financial period from 1 January to 31 December 2019. This statement discloses the sustainability performance of the operating entities within our Group, namely:

1. Cycle & Carriage Bintang Berhad 2. Cycle & Carriage Bintang (Northern) Sdn. Bhd. 3. Cycle & Carriage Bintang (Perak) Sdn. Bhd.

REPORTING FRAMEWORK [102-54]

In this statement, we have aligned with the Global Reporting Initiative (“GRI”) Standards and the Bursa Malaysia Sustainability Reporting Guide (2nd Edition, 2018) which reflect our commitment to disclose our performance in a comparable and meaningful manner. To improve our sustainability reporting this year, we have added the relevant GRI indicator numbers specified in parenthesis next to the corresponding material matters.

FEEDBACK [102-53]

This report is available in our Annual Report in PDF format and can be downloaded from our website at www.cyclecarriage.com.my. We encourage our readers to share their opinions and concerns on our Group’s sustainability achievements and programmes by directing their comments and suggestions to corporate.affairs@ cyclecarriage.com.my. 33 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

OUR APPROACH TO SUSTAINABILITY

COMMITMENT TO THE UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS

The United Nations has announced its Agenda 2030 along with the 17 sustainable development goals (“SDG”). The latter aimed at addressing challenges faced globally through economic prosperity, environmental protection, social harmony and peace.

No ZERO Good health QUALITY Gender CLEAN WATER 1 POVERTY 2 HUNGER 3 and well-being 4 EDUCATION 5 Equality 6 AND SANITATION

Affordable and decent work and INdustry, innovation reduced sustainable cities Responsible 7 clean energy 8 economic growth 9 and infrastructure 10 inequalities 11 and communities 12 consumption and production

Climate Life LIFE Peace, Justice Partnerships 13 action 14 Below Water 15 on Land 16 and strong 17 for the goals Institutions

In progressing towards our goal in embedding sustainability in our operations, we have adopted three (3) of the UN SDGs as we feel these are the areas in which our Group is best able to contribute. We support the goals through socio-economic No enhancementZERO of our societyGood health (SDG 8),QUALITY ensuring sustainableGender consumptionCLEAN WATER and efficient use of natural resources (SDG 12) POVERTY HUNGER and well-being EDUCATION Equality AND SANITATION 1 and2 promoting a transparent3 and 4accountable governance5 while6 providing equality for all (SDG 16).

SDG Objective Our Efforts

Affordable and decent work and INdustry, Promotinginnovation sustainablereduced sustainable cities • ResponsibleNew employee hire rate of 15% 7 clean energy 8 economic growth 9 and infrastructure 10 inequalities 11 and communities 12 consumption No ZERO Good health QUALITY Gender CLEAN WATER economic growth, a safe and • and Localproduction employment of 98% 1 POVERTY 2 HUNGER 3 and well-being 4 EDUCATION 5 Equality 6 AND SANITATION No ZERO Good health QUALITY Genderproductive CLEANwork WATER environment • An average of 19.6 training hours per employee 1 POVERTY 2 HUNGER 3 and well-being 4 EDUCATION 5 Equality 6 AND SANITATION and decent work for all • Achieved zero occupational fatalities this year

Climate Life LIFE Peace, Justice Partnerships 13 action 14 Below Water 15 on Land 16 and strong 17 for the goals • Track and monitor resource consumption and Affordable and decent work and INdustry, innovation reduced sustainable cities Responsible Institutions 7 clean energy 8 economic growth 9 and infrastructure 10 inequalities 11 and communities 12 consumption Ensure sustainable waste generation Affordable and decent work and INdustry, innovation andreduced production sustainable cities Responsible 7 clean energy 8 economic growth 9 and infrastructure 10 inequalities 11 and communitiesconsumption12 consumption and efficient • Ensure all waste is disposed of properly use of naturaland production resources • Engage with recycling contractor for recyclable waste

Climate Life LIFE Peace, Justice Partnerships 13 action 14 Below Water 15 on Land 16 and strong 17 for the goals • Estimated 48.5 hours spent on anti-corruption Climate InstitutionsLife LIFE Peace, Justice PartnershipsEnsuring transparent and 13 action 14 Below Water 15 on Land 16 and strong 17 for the goals training Institutions accountable governance • Established Whistle-Blowing Policy and other practices and providing anti-corruption measures equality and justice for all • Thorough measures against data fraud and theft

34 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

SUSTAINABILITY GOVERNANCE [102-18]

To embed sustainability into our business operations, a sound governance structure is integral to the management of our sustainability approach. We have established a 3-tiered sustainability governance structure that guides and ensures sustainable practices are integrated into our business operations.

The governance structure comprises members of the Board of Directors (“Board”) who leads the sustainability agenda of the Group. The Board is ultimately responsible for endorsing and committing to proposed sustainability initiatives and progress within the organisation. The Board is supported by the Sustainability Steering Committee (“SSC”) comprising the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), which in turn is supported by the Sustainability Working Committee. BOARD OF DIRECTORS

SUSTAINABILITY CEO CFO STEERING COMMITTEE

SUSTAINABILITY WORKING COMMITTEE

SALES AND AFTER- HUMAN CORPORATE REAL ESTATE FINANCE, INFORMATION MARKETING SALES RESOURCES & NETWORK DEVELOPMENT LEGAL TECHNOLOGY

Roles & Responsibilities

Board of Directors

• Endorse the Company’s sustainability strategy and commitment • Issue final approval of the sustainability report and its contents

Sustainability Steering Committee (SSC)

• Oversee the progress of the sustainability initiatives and projects

Sustainability Working Committee (SWC)

• Undertake sustainability initiatives aligned with the company’s strategies for sustainability • Record and manage data for economic, environmental and social sustainability parameters 35 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

STAKEHOLDER ENGAGEMENT [102-40, 102-42, 102-43, 102-44]

An integral part of ensuring the sustainability of the Group is the building of strong relationships with our stakeholders. We maintain constant engagement with our stakeholders through a variety of methods with the aim of creating meaningful dialogue to address their concerns and other areas of interest which will in turn enhance our performance.

Stakeholder Group Areas of Interest Form of Engagement Frequency Employees & Union • Remuneration and • Performance reviews/ Annually benefits appraisals • Development • Training Programmes Ongoing Opportunities • Work-life balance • Employee Engagement Ongoing • Workplace health Programmes and safety Business Partners & • Operational • Reviews, Audit, As and when required Principal Performance Trainings, Conferences Investors & Shareholders • Company strategies • Corporate Ongoing Announcements • Financial • Annual General Meeting Annually Performance • Corporate • Quarterly Results Quarterly Governance • Meeting with analysts As and when required Customers • Quality of Service • Customer Feedback As and when required surveys • Overall customer • Call Centres Ongoing service satisfaction • Customer Events Ongoing Suppliers • Fair procurement • Tendering process As and when required practices • Supplier evaluation Prior to engagement/ during tender process • Performance reviews Ongoing process that varies – monthly, quarterly, annually Communities • Social contributions • Community engagement Ongoing • Responsible programmes consumption • Waste management Regulatory Authorities • Regulatory • Reports As and when required compliance • Audits As and when required • Consultations As and when required • Workshops As and when required Industry Association • Information sharing • Engagement meetings As and when required 36 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

MATERIAL SUSTAINABILITY MATTERS [102-47]

A materiality assessment is needed to identify which economic, environmental, and social (“EES”) risks and opportunities are most important to both our business operations and our stakeholders. The assessment helps prioritise the wide-ranging sustainability matters of the organisation and refines the focus to those matters that are most relevant. Using three (3) key steps, the assessment generates a matrix that gives a better visualisation of our most critical issues. In 2019, we held a workshop to conduct a re-assessment of our sustainability material matters to see if our priorities have changed from our last assessment in 2017.

The process involved in the materiality assessment conducted to prioritise our matters for FY2019 is presented below:

MATERIALITY ASSESSMENT

STEP 1: IDENTIFY STEP 3: VERIFY Identification of material Validation on material sustainability matters relevant sustainability matters by to business operations and sustainability committee stakeholders STEP 2: PRIORITISE Ranking of material sustainability matters according to its importance to business operations and stakeholders 37 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

Strong Corporate Governance Compliance with Laws & Regulations Preventing Data Fraud and Theft Economic Performance Transparency and Anti- Corruption Measures Providing a Managing Hazardous Healthy and Safe Workplace Engaging Materials Communities Managing Waste Employee Development and Managing Energy Diversity Managing Water Importance to stakeholders

Significance to business

Material Matters

Governance Economic Environment Social

• Strong Corporate Governance • Economic Performance • Managing Energy • Providing a Healthy and Safe • Compliance with Laws and • Managing Water Workplace Regulations • Managing Waste • Employee Development and Diversity • Transparency and Anti- • Managing Hazardous • Preventing Data Fraud and Theft Corruption Measures Materials • Engaging Communities

Based on the materiality assessment conducted in 2019, we have identified 12 sustainability material matters as generated in the matrix above that demonstrates the priorities of our material issues. Material matters that are of high priority are located towards the top most right corner as they are highly significant to both our stakeholders and our business operations. 38 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

MAPPING OUR SUSTAINABILITY MATTERS

To illustrate the relevance of our 12 material sustainability matters, we have summarised below the relevance of the material matters to stakeholders, the corresponding GRI indicators and the interlinkages in terms of our contribution towards the achievement of UN SDGs. No ZERO Good health QUALITY Gender CLEAN WATER 1 POVERTY 2 HUNGER 3 and well-being 4 EDUCATION 5 Equality 6 AND SANITATION

Material Sustainability Relevant Stakeholders Corresponding GRI Indicators SDG Affordable and decentNo work and INdustry,ZERO innovation Goodreduced health sustainableQUALITY cities ResponsibleGender CLEAN WATER 7 clean energy 81 economicPOVERTY growth 92 andHUNGER infrastructure 103 andinequalities well-being 114 andEDUCATION communities 125 consumptionEquality 6 AND SANITATION Matters and production Governance

Climate AffordableLife and decentLIFE work and INdustry,Peace, Justice innovation Partnershipsreduced sustainable cities Responsible Strong corporate • Employee and Union 102: General Disclosure13 action 147 cleanBelow energy Water 158 economicon Land growth 169 and infrastructure strong 1017 forinequalities the goals 11 and communities 12 consumption Institutions and production

governance • Business Partners & Principal 103: Management ApproachNo ZERO No Good healthZERO QUALITY Good health Gender QUALITY CLEAN WATERGender CLEAN WATER 1 POVERTY 2 HUNGER1 POVERTY 3 and well-being2 HUNGER 4 EDUCATION3 and well-being5 Equality4 EDUCATION6 AND SANITATION5 Equality 6 AND SANITATION • Investors & Shareholders Climate Life LIFE Peace, Justice Partnerships 13 action 14 Below Water 15 on Land 16 and strong 17 for the goals Institutions

Affordable and decentNo work Affordableand andINdustry,ZERO innovationdecent work andGoodreduced healthINdustry, innovationsustainableQUALITY citiesreduced ResponsibleGender sustainable citiesCLEAN WATERResponsible Compliance with laws • Regulatory Authorities 307: Environmental Compliance7 clean energy 81 economicPOVERTY7 growthclean energy92 andHUNGER infrastructure8 economic 10growth3 andinequalities well-being9 and infrastructure114 andEDUCATION communities10 inequalities125 consumptionEquality11 and communities6 AND SANITATION12 consumption and production and production and regulations

Climate AffordableLife andClimate decentLIFE work andLife INdustry,Peace, Justice innovationLIFE Partnershipsreduced Peace, Justice sustainable citiesPartnerships Responsible Transparency and • Employee and Union 205: Anti-Corruption 13 action 147 cleanBelow13 energy Wateraction 158 economicon Land14 growthBelow Water169 and infrastructure strong15 on Land 1017 forinequalities the16 goalsand strong11 and communities17 for the goals12 consumption Institutions Institutions and production anti-corruption • Business Partners & Principal • Investors & Shareholders Climate Life LIFE Peace, Justice Partnerships • Suppliers 13 action No 14 Below WaterZERO 15 on Land Good health16 and strongQUALITY 17 for the goalsGender CLEAN WATER 1 POVERTY 2 HUNGER 3 and well-beingInstitutions4 EDUCATION 5 Equality 6 AND SANITATION Economic

Economic • Business Partners & Principal 103: Management Approach Affordable and decent work and INdustry, innovation reduced sustainable cities Responsible 7 clean energy 8 economic growth 9 and infrastructure 10 inequalities 11 and communities 12 consumption Performance • Investors & Shareholders 201: Economic Performance and production No ZERO Good health QUALITY Gender CLEAN WATER • Customers 1 POVERTY 2 HUNGER 3 and well-being 4 EDUCATION 5 Equality 6 AND SANITATION

Climate Life LIFE Peace, Justice Partnerships 13 action 14 Below Water 15 on Land 16 and strong 17 for the goals Environment Institutions

No ZERO Good health QUALITY Gender CLEAN WATER 1 POVERTYAffordable and 2 HUNGERdecent work and 3 andINdustry, well-being innovation 4 EDUCATIONreduced 5 Equalitysustainable cities 6 ANDResponsible SANITATION Managing energy • Regulatory Authorities 103:7 clean energy Management8 economic growth 9 andApproach infrastructure 10 inequalities 11 and communities 12 consumption and production 302: Energy

AffordableNo and decentZERO work and INdustry,Good health innovation QUALITYreduced sustainableGender cities ResponsibleCLEAN WATER 71 cleanPOVERTYClimate energy 82 economicHUNGERLife growth 93 andLIFE infrastructure well-being 104 EDUCATIONPeace,inequalities Justice 115 andEqualityPartnerships communities 126 consumptionAND SANITATION Managing water • Regulatory Authorities 303:13 action Water14 Belowand Water Effluents15 on Land 16 and strong 17 for the goals and production Institutions

No ZERO Good health QUALITY Gender CLEAN WATER 1 POVERTYAffordable and 2 HUNGERdecent work and 3 andINdustry, well-being innovation 4 EDUCATIONreduced 5 Equalitysustainable cities 6 ANDResponsible SANITATION Managing waste • Regulatory Authorities 103:7 cleanClimate energy Management8 economicLife growth 9 andApproachLIFE infrastructure 10 Peace,inequalities Justice 11 andPartnerships communities 12 consumption 13 action 14 Below Water 15 on Land 16 and strong 17 for the goals and production • Communities 306: Effluents and Waste Institutions

Affordable and decent work and INdustry, innovation reduced sustainable cities Responsible Managing hazardous • Regulatory Authorities 306:7 cleanClimate energy Effluents8 economicLife growth and9 andLIFE infrastructureWaste 10 Peace,inequalities Justice 11 andPartnerships communities 12 consumption 13 action 14 Below Water 15 on Land 16 and strong 17 for the goals and production Institutions materials No ZERO Good health QUALITY Gender CLEAN WATER 1 POVERTY 2 HUNGER 3 and well-being 4 EDUCATION 5 Equality 6 AND SANITATION

Climate Life LIFE Peace, Justice Partnerships Social13 action 14 Below Water 15 on Land 16 and strong 17 for the goals Institutions

AffordableNo and decentZERO work and INdustry,Good health innovation QUALITYreduced sustainableGender cities ResponsibleCLEAN WATER Providing a healthy • Employee and Union 403: Occupational Health and 71 cleanPOVERTY energy 82 economicHUNGER growth 93 and infrastructure well-being 104 EDUCATIONinequalities 115 andEquality communities 126 consumptionAND SANITATION and production and safe workplace Safety

AffordableClimate and decentLife work and INdustry,LIFE innovation Peace,reduced Justice sustainablePartnerships cities Responsible Employee • Employee & Union 202: Market Presence 137 cleanaction energy 148 economicBelow Water growth 159 andon Landinfrastructure 1016 andinequalities strong 1117 andfor communities the goals 12 consumption Institutions and production

Development and 401: Employment No ZERO No Good healthZERO QUALITY Good health Gender QUALITY CLEAN WATERGender CLEAN WATER 1 POVERTY 2 HUNGER1 POVERTY 3 and well-being2 HUNGER 4 EDUCATION3 and well-being5 Equality4 EDUCATION6 AND SANITATION5 Equality 6 AND SANITATION Diversity 404: Training and Education Climate Life LIFE Peace, Justice Partnerships 405: Diversity and Equal Opportunity13 action 14 Below Water 15 on Land 16 and strong 17 for the goals Institutions

Affordable and decentNo work Affordableand andINdustry,ZERO innovationdecent work andGoodreduced healthINdustry, innovationsustainableQUALITY citiesreduced ResponsibleGender sustainable citiesCLEAN WATERResponsible Preventing data fraud • Employee & Union 418: Customer Privacy7 clean energy 81 economicPOVERTY7 growthclean energy92 andHUNGER infrastructure8 economic 10growth3 andinequalities well-being9 and infrastructure114 andEDUCATION communities10 inequalities125 consumptionEquality11 and communities6 AND SANITATION12 consumption and production and production and theft • Customers

Climate AffordableLife andClimate decentLIFE work andLife INdustry,Peace, Justice innovationLIFE Partnershipsreduced Peace, Justice sustainable citiesPartnerships Responsible • Communities 413: Local Communities13 action 147 cleanBelow13 energy Wateraction 158 economicon Land14 growthBelow Water169 and infrastructure strong15 on Land 1017 forinequalities the16 goalsand strong11 and communities17 for the goals12 consumption Engaging Institutions Institutions and production communities

Climate Life LIFE Peace, Justice Partnerships 13 action 14 Below Water 15 on Land 16 and strong 17 for the goals Institutions 39 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

OUR ORGANISATION

STRONG CORPORATE GOVERNANCE [102-19]

Sustainable businesses are those with a strong governance structure to ensure transparency and accountability throughout their operations. Good corporate governance is vital as it provides a foundation for the instilling of ethical behaviour within the Group’s workforce. In addition to safeguarding the Group’s reputation, strong corporate governance boosts stakeholders’ confidence and trust in us, thus driving sustainable growth.

Our current Board Charter outlines the structure, responsibilities, authorities, procedures, and evaluations of the Board and Board Committees as well as the relationship between the Board, the Management team and shareholders. Our board charter and corporate governance report for financial year 2019 are available online on our website at www.cyclecarriage.com.my.

Our Group adheres to the Malaysian Code on Corporate Governance issued by the Securities Commission Malaysia and all relevant laws, rules and regulations on this aspect. Details of our corporate governance are set out in our Corporate Governance Overview Statement in pages 13 to 22 as well as Corporate Governance Report for 2019, a copy of which is available on our website.

COMPLIANCE WITH LAWS & REGULATIONS [307-1]

In line with strong accountability, our Group maintain strict compliance with relevant laws and regulations pertaining to our business. Compliance demonstrates our reputable business practices thereby increasing stakeholder confidence in the Cycle & Carriage brand. Furthermore, failure to comply results in unwanted penalties and reprimands which will impact the Group’s financials and diminish brand reputation. Adherence to prevailing laws and regulations provides our employees a safe workplace besides helping in mitigating our environmental footprint and in turn, advance our business performance through efficient processes.

Key laws and regulations that our Group comply with include:

Law or Regulation Description Main Market Listing Requirements Requirements applicable to all companies listed on the Main Market of Bursa Malaysia Securities Berhad Malaysian Code on Corporate Guidelines issued by the Securities Council setting out best practices Governance to enhance accountability, transparency, and sustainability within an organisation Companies Act 2016 Regulates registration, administration and dissolutions of companies and corporations and to provide for related matters Personal Data Protection Act 2010 Regulates the processing of personal data in regards to commercial transactions Environmental Quality Act 1974 and Regulates the prevention, abatement, control of pollution and Environment Quality (Scheduled enhancement of the environment Wastes) Regulations 2005 Occupational Safety and Health Act Sets out provisions for securing the safety, health and welfare of persons 1994 at work and for protecting others against risks to safety or health in connection with the activities of persons at work 40 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

We conduct audits to maintain compliancy with the outcome reviewed by CCB’s Audit Committee. Instances of non- compliance with applicable laws and/or regulations recorded are escalated to the Board for deliberation and decision.

There were two (2) cases of non-compliance recorded for 2019 at our Batu Caves branch. A nominal fine of RM3,000 was imposed by the Department of Environment on CCB in the 4th quarter of 2019 for both the non-compliances. This was due to a minor error in the labelling of waste and delay in updates for Scheduled Waste inventory. Following this incident, CCB has sought the consultation from existing scheduled waste vendor for professional advice on rectification and to provide briefing to the relevant team on the correct practice to avoid recurrence. In addition to this, CCB Group has established a process to conduct internal inspection without prior notice to their branches from time to time to avoid non-compliance in the future.

TRANSPARENCY AND ANTI-CORRUPTION [102-17, 205-2]

The Group believes that a transparent and corruption free operation are key contributory factors that would enhance and strengthen customers’ trust in CCB and boosts shareholders’ value in the long-term.

The Group adopts two (2) Codes of Conduct, namely, the Jardine Matheson Group Code of Conduct (“JM CoC”) and the Jardine Cycle & Carriage Direct Motor Interests Code of Conduct Compliance Principles (“DMI CoC”). The JM CoC and the DMI CoC outline the nature of acts of misconduct and the corresponding disciplinary action. Other topics addressed in these code of conduct policies include: o Illicit Payments o Gifts, Favours and Entertainment o Conflicts of Interest o Share Dealing o Information Security

The Human Resource department conducts training on the JM CoC for all employees with a refresher course conducted biennially. All new employee hires and employees who are promoted from bargainable to non-bargainable role, collectively, 108 employees, received training on anti-corruption policy and and have completed the Code of Conduct online course assigned to them as a part of the JM CoC training. An estimated 48.5 hours were spent on anti-corruption training in 2019. We also conduct refresher courses for existing non-bargainable employees biennially. All 238 existing non-bargainable employees who were due to undergo the JM CoC refresher training in 2019 have completed the same before 31 December 2019.

Further, on a quarterly basis, the Group’s Finance department will report to Jardine Cycle & Carriage Limited (“JC&C”) on matters of serious concern involving the Group and the management will also update the Board on litigation involving the Group. New joiners are briefed during onboarding and through the internal communication platform through the Group’s Policy on Reporting Matters of Serious Concern, as well as through the internal communication platform. This allows employees a medium to report reasonable suspicions of malpractice to their Head of Division or liaise with the Group Counsel & Corporate Affairs of JC&C. The Group has in place a Whistle-Blowing Policy designed to create a positive environment in which employees can raise genuine concerns and enable prompt corrective action.

The Group takes a strict and tough stance against corruption, employing stringent measures with suitable consequences to send home the point that it will not tolerate any form of malpractice or misconduct. 41 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

PREVENTING DATA FRAUD AND THEFT [418-1]

Information technology (“IT”) is becoming an increasingly important part of the Group’s business strategy as we engage with our customers through the website, emails and potentially, through mobile applications in the future. The use of IT could potentially allow unauthorised access to customers’ and our Group’s data and information. While it is important to use IT in business, it exposes our Group to risks associated with data fraud and theft.

Our Group undertakes review of our data protection measures from time to time to ensure that such measures are adequate and compliant with the applicable laws and regulations. Current prevention measures that CCB has implemented to keep abreast of data fraud and theft include mandatory change of every employees’ computer and email password every 90 days, email security protection for all devices used by its employees, creating cybersecurity awareness and sharing IT updates within the organisation through our Workplace by Facebook and restricting access to data stored on OneDrive and SharePoint applications through authorised access.

During the financial year 2019, there were no incidents involving breach of customer privacy or data theft.

ECONOMIC PERFORMANCE [201-1]

The Group believes that success of a business is dependent primarily on the customers’ confidence and trust in the business as well as financial performance of the Group to ensure optimal returns.

The Group’s budget and investment plans are regularly reviewed to ensure that they are sensible and sustainable taking into consideration prevailing and projected profitability, market sentiments, industry performance, future capital requirements and capital efficiency, as well as other capital expenditure and investments. These contributing factors help to formulate the Company’s current and future investments plans and budgets to ensure a sustainable growth.

Factors such as subdued economy, rising costs of living in Malaysia coupled with strict lending guidelines imposed by financial institutions pose challenges which would influence the demand for cars and as such, it is pertinent that our Group formulates business plans, budgets and investment plans according to consumer sentiments and market conditions to remain resilient.

Being one of the leading dealers of Mercedes-Benz in Peninsular Malaysia with 13 outlets across the nation, we remain deeply committed to delivering exceptional journeys for our customers and employees in Malaysia. Our Group’s commitment is evident through our investment in the network upgrades and to operate the dealerships to the required standards. In Q3 of 2019, we launched our newly transformed Cycle & Carriage Mutiara Damansara outlet, which elevates the premium automotive lifestyle experience with its modern luxury architecture. We were the first dealer to launch this new MAR 2020 retail concept of Mercedes-Benz autohaus in Malaysia, which combines architectural aspects with new processes, digital media and new retail format.

Further, in response to growing demand for body and paint services, our Group seeks to expand our body and paint facilities. For further details on our economic performance, please refer to pages 6 to 8 of this Annual Report. 42 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

OUR ENVIRONMENT

MANAGING ENERGY [302-1, 302-3]

As the world becomes more aware of the detrimental effects of climate change, companies must strive to contribute to mitigating efforts. We believe that the management of energy consumption is crucial and improving efficiency is key to preventing energy wastage. The Group has a better understanding of the benefits of efficient energy management including the improvement of business budgeting and planning through good record-keeping on energy use besides efforts to reduce such costs. We provide a conducive work environment to boost employee morale and find more opportunities for innovation on energy saving methods. The sum of this is the inculcation of a culture of forward thinking that promotes the success of our business.

In managing energy consumption, we try to identify areas in which energy can be used more efficiently as in requiring scheduled preventive maintenance of energy-intensive equipment. We also upgrade equipment to be more effective with consequent reduction in intense use of energy. The installation of LED lights and energy efficient air-conditioning systems is done for all new projects and renovations along with using other energy-efficient equipment such as refrigerators and chillers for our offices.

Corporate Real Estate department (“CRE”) works closely with other departments and branches to create awareness of energy-saving initiatives and ensure overall energy conservation. We ensure monthly monitoring of energy consumption and costs on a site by site basis to enable a more comprehensive analysis of consumption. This also allows us to materialise our efforts and demonstrate their effectiveness and contribution to performance enhancement.

1,845,137 ELECTRICITY CONSUMPTION (kWh)

1,115,676

544,890 590,711 416,729 503,577 323,800 205,196 240,354 212,352 59,063 159,608 79,264

kWh

ELECTRICITY INTENSITY (kWh/m2) 258.3 243.8 187.5 169.4 125.3 117.0 105.8 123.1 71.9 43.0 38.3 45.2 11.2

PJ Ipoh Juru TREC Cheras Gopeng Glenmarie Alor Setar Batu Caves Johor Bahru Georgetown Bukit Tengah

Mutiara Damansara Energy Consumption Breakdown

FY2018 FY2019

Electricity Consumption 22,600,690,200 kJ* 22,666,885,200 kJ

Fuel Consumption from non-renewable sources: Diesel 3,505 L 3,301 L

Note:

* The increase in consumption of electricity during financial year ended 31 December 2018 was contributed by the addition of a new facility in Gopeng in December 2017, a body and paint facility in Glenmarie in April 2018 and a service facility in Kota Damansara in September 2018. 43 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

MANAGING WATER [303-5]

Water is a scarce resource that requires careful management to prevent wastage. For this reporting period, the Group has implemented several initiatives to reduce water usage.

This includes new restroom fixtures that use less water at our project sites. We have also implemented the use of rainwater harvesting system at our Cheras branch, so that we able to use rainwater and reduce the use of municipal water.

We continuously communicate awareness of the need to practice efficient water consumption at all CCB locations through our internal social media platform to encourage employees to be mindful of water consumption. We make it a point to record and monitor water usage and the attendant cost just as with energy to be mindful of practices that impact the environment.

TOTAL WATER CONSUMPTION (m3)

FY2018 89,091

FY2019** 96,606

Water Consumption Breakdown (in m3)

FY2018 FY2019**

From Municipality 87,858* 94,966^

From Rainwater 1,233* 1,640^

Note: * The water consumption utilised by the body and paint facility in Glenmarie and the service facility in Kota Damansara were included from April 2018 and September 2018 respectively. ^ The increased in water consumption in 2019 was contributed by the increase in after-sales throughput in 2019. ** Water consumption for FY2019 includes estimates for TREC and Georgetown due to unavailability of actual water consumption data

MANAGING WASTE & HAZARDOUS MATERIALS [306-2]

The proper management of waste is crucial towards protecting the health of the community. CCB has implemented a systematic form of waste disposal to prevent accidents that may lead to ill health and other danger. We integrate health and safety and environmental considerations into our business processes and corporate strategy. By doing so, we have encouraged innovative ways of improving our methods through greater efficiency.

Our waste management approach includes storage of waste in a secured facility for collection according to schedule. Collection is done within 3 months to avoid decay that can be hazardous to health. The Department of Environment (“DOE”) is notified of all waste collected through the Electronic Scheduled Waste Information System (eSWIS) portal. In our efforts to minimise our environmental footprint, we have engaged a recycling contractor to collect recyclable wastes. This includes for example used oil, oil filters, empty oil drums and used oil rags.

All hazardous materials are disposed through methods approved and managed by the DOE as well as the Ministry of Energy, Science, Technology, Environment, and Climate Change (“MESTECC”). We engaged licenced contractors to handle and transport hazardous materials to the contractor’s premises to ensure that these hazardous materials are handled in the proper and safe manner. Our waste water and residue are filtered through a DOE approved oil trap where the end waste is delivered to Kualiti Alam facility for treatment of scheduled waste. 44 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

Waste Generation at CCB

Major Waste Types FY2018 FY2019

Used Engine Oil (L) 192,400 205,970

Used Battery (Kg) 50,912 25,879

Scrap Metal (Kg) 22,513 11,849

General Waste (Kg) 1,482 1,512

OUR WORKFORCE

EMPLOYEE DEVELOPMENT AND DIVERSITY [401-1, 401-2, 401-3, 404-1, 404-3, 405-1]

Employee Distribution

Our Group believes our employees are the most important resource for creating value for the business. By bolstering the strengths of individuals, we strive to enhance our organisational capabilities and build a strong foundation that is highly competitive.

The Group adheres to relevant acts and regulations regarding employees’ welfare such as the Employment Act 1955, Employees’ Social Security Act 1969, Employees’ Provident Fund Act 1991 and the Insurance System Act 2017 to ensure its employees’ welfare are taken care of, safe and treated fairly.

The Group strives to create new value by bringing together a wide range of people with diverse values and varied experiences with encouragement towards mutually support and the creation of a competitive environment. In 2019, the Group has 819 employees nationwide as shown below. Permanent staff make up 99.1% of our total workforce.

Employee Category Local vs. Foreign 3% 2% 6%

98%

Function Employees Local 91% Middle Management Foreign Senior Management

Age Gender Ethnicity 1% 22% 29% 18% 39% 71% 40%

Malay 39% 20 – 30 years Men 41% Chinese 31 – 45 years Women Indian 46 – 60 years Others 45 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

Employee Welfare

As the drivers of any organisation, employees are an essential determinant of the Company’s success. This is why we are committed towards ensuring the well-being of our employees with, among others, fair remuneration packages and skill development to retain our talent pool and ensure a healthy work-life balance.

Some of these include medical benefits such as outpatient and inpatient care, Group personal accident insurance and yearly medical check-ups. We also provide EPF employer contribution to employees above the statutory requirement of 12% set out by the government.

As our employees are our most valuable assets, the Group undertakes measures such as employee engagement surveys to gauge feedback to better improve our approach in managing our talents. As and when there are significant updates relating to the Group, townhall meetings are conducted to provide an open forum for the discussion of business and other matters with Senior Management to address concerns of our employees.

To further foster the bond among employees within the Group and to instil teamwork, the Group held an intercountry sports event to provide opportunity for its employee to mingle with their counterparts from Cycle & Carriage Singapore, Cycle & Carriage Myanmar and Tunas Ridean Tbk. In addition, the Group also hosted an annual dinner for its employees to promote stronger relationships within the Group.

Our concern for our employees extends to their families as we also provide employees’ children with cash awards ranging from RM500 to RM3,000 for their excellent academic results as a reward for their achievement.

Parental leave

The Group believes in supporting working parents caring for families by ensuring equal employment opportunities through job security. Both men and women are entitled to parental leave. All employees are eligible for parental leave with women allowed up to 60 days of maternity leave while men are entitled to four (4) consecutive days of paternity leave. This incentive is beneficial especially for younger members of the workforce with growing families.

Parental Leave Men Women TOTAL Parental leave taken in 2019 12 10 24* Return after parental leave in 2019 12 10 24* Parental leave taken in 2018 21 9 30 Return after parental leave in 2018 21 9 30 Still employed after return from parental leave in 2018 19 6 25 Return rate after parental leave in 2019 100% 100% 100% Retention rate after parental leave in 2018 90.5% 66.7% 83.3%

* All employees who return after parental leave during the year 2019 were still with the Group as at 31 December 2019. 46 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

Employee Training

Operational excellence is the key driver in the development of expertise. With this as a guiding principle, the Group has introduced a framework for performance enhancement that fosters the development of higher-level abilities. At the same time, we are creating opportunities and promoting employee retention in an environment in which they can demonstrate their capabilities.

Training in 2019 Average Hours Percentage Average Hours Percentage of Training Employees of Training Employees FY2019 Trained FY2018 Trained FY2019 FY2018 Men 22.4 65.7% 21.1 78.3% Women 12.9 52.1% 11.6 56.9% Function Employees 20.0 60.7% 18.7 73.6% Middle Management 19.1 74.0% 9.9 46.7% Senior Management 9.0 50.0% 18.4 60.7% Per employee 19.6 18.2 Total Training Hours 16,072 15,200

Employee Performance and Development Reviews

Performance and Development Reviews Total Reviews Review Rate Total Reviews Review Rate FY2019 FY2019 FY2018 FY2018 Men 567 97.6% 519 89.5% Women 234 98.3% 226 88.6% Senior Management Employees 23 88.5% 23 82.1% Middle Management Employees 50 100.0% 42 93.3% Function Employees 728 98.0% 680 89.2% Overall (all employees) 801 97.8% 745 89.2%

Employee hires and turnover

The Group recognises the importance of maintaining a skilled workforce and retaining its talent pool while acquiring suitable new staff. CCB is constantly promoting a work environment where employees are encouraged to speak up and share their views on all matters affecting employee welfare and engagement, productivity as well as operational and process improvements.

Employees who have been with the Group for ten (10) years or more are acknowledged and appreciated through our special appreciation programme as they have been a loyal member of our workforce. Employee new hire and turnover rates indicate the management of our employees as we strive to retain top talents within the company.

We have maintained similar numbers for employee turnover compared to 2018 and we will strive to decrease turnover rate to ensure retention of our workforce. We experienced a lower new hire rate over this reporting period at 15% compared to last year’s hire rate of 23%. The majority of our new hires are below 30 years of age which allows us to familiarise younger talent with career development opportunities at the organisation. 47 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

NEW EMPLOYEE HIRES BY NEW EMPLOYEE HIRES BY GENDER AGE

31% 33%

69% 67%

■ Men ■ Women ■ < 30 years ■ 30 – 50 years

EMPLOYEE TURNOVER BY EMPLOYEE TURNOVER BY GENDER AGE 11%

66% 33% 56%

34%

■ Men ■ Women ■ < 30 years ■ 30 – 50 years ■ > 50 years

FY2018 FY2019

New Employee Hire Rate 23% 15%

Employee Turnover Rate 17% 17.6%

PROVIDING A HEALTHY AND SAFE WORKPLACE [403-5, 403-9]

The Group places great importance on health and safety to ensure the well-being of our employees and customers and the continuity of our business operations. We give top priority to worker safety by promoting various health and safety practices at the workplace. Fire drills, fire marshall training and safety awareness briefings are given to all staff including newcomers during onboarding session.

To further enhance health and safety practices, we are in the midst of establishing our very own Occupational Health and Safety committee which will assess health and safety at the workplace, discuss mitigation plans for safe working conditions, besides conducting awareness and training programs for workers.

The Group is in compliance with, among others, the relevant laws and regulations on health and safety such as Occupational Safety & Health Act 1994, Factories and Machinery Act 1967 and the Fire Services Act. Adherence to these laws ensures employees are protected and are well aware of risks and hazards in our operations.

For this reporting period, we have recorded three (3) major workplace injuries. The Group has discussed mitigatory plans to prevent a recurrence of such incidents through the adequate preventive measures. 48 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

Health & Safety Figures 2019# Men Women Total Total 2019 2018 Fatalities 0 0 0 0 Fatality Rate – – 0 0 Major Injuries 3 0 3 3 Major Injury Rate* – – 1.8 1.7 Lost Days 158 0 158 142.5 Lost Day Rate – – 101 81 Absentee days 2,595.5 905.5 3,501 4,313 Absentee days rate – – 2,041 2,446 Occupational Disease 0 0 0 0 Occupational Disease Rate – – 0 0

* Rates are calculated based on per million working hours adopted from the International Labour Organisation. Figures are based on number of permanent employees working 8-hours day. # Incidents are recorded via an Accident Report Form for work place accidents which is submitted to Human Resources Department.

Health Safety Definitions Major Injuries Injuries that require beyond first aid treatment Minor Injuries Injuries that can be treated with first aid Lost Days Scheduled work days that could not be counted as work day because of workers being unable to perform their usual work due to an occupational accident or disease Absentee Days Lost days and absence leave excluding permitted leave absence such as parental leave, compassionate leave and study leave

OUR COMMUNITY

ENGAGING COMMUNITIES [413-1]

An important aspect of sustainable business involves going beyond the boundaries of our Group’s operations to engage with local communities through contributions and other non-financial support. The Group seeks to make a positive social difference by providing financial support and participating in funding projects.

The Group has donated 45 units of used computer equipment comprising desktops, computer processing units and monitors valued at approximately RM69,000 for the benefit of Computer Maintenance programme students at Monfort Boys Town.

CCB also offered study grant to selected students from households whose annual income does not exceed RM36,000 and who are interested in or are pursuing an automotive programme/course. Under the study grant programme, eligible students will receive study grant up to Ringgit Malaysia Five Thousand (RM5,000) per year for up to three (3) years of studies. Apart from the financial subsidy, eligible students under this programme will be given internship opportunity with our Group during semester breaks and employment opportunity with our Group upon completion of studies.

At the same time, our Group will continue to actively seek opportunities to give back to the community in which we operate in recognition of the vital importance of an inclusive and harmonious society. We recognise our duties as a responsible corporate citizen and aim to create long-term positive impact on those around us. 49 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

GRI STANDARDS CONTENT INDEX

GRI Indicator Disclosures Page Reference Organisational Profile 102-1 Name of the Organisation 2 102-2 Activities, brands, products, and services 7 - 8 102-3 Location of headquarters 2 102-4 Location of operations 2 102-5 Ownership and legal form 2 102-6 Markets served 2 102-7 Scale of organization 7 - 8, 44 102-8 Information on employees and other workers 7 - 8, 44 Strategy 102-14 Statement from senior decision-maker 6 Governance 102-18 Governance structure 34 102-19 Delegating authority 34 102-20 Executive-level responsibility for economic, environmental, and 34 social topics 102-32 Highest governance body’s role in sustainability reporting 34 Stakeholder Engagement 102-40 List of stakeholder groups 35 102-43 Approach to stakeholder engagement 35 102-44 Key topics and concerns raised 35 Reporting Practice 102-45 Entities included in the consolidated financial statements 52 - 82 102-46 Defining report content and topic boundaries 32 102-47 List of material topics 37, 38 102-48 Restatements of information – 102-49 Changes in reporting – 102-50 Reporting period 32 102-51 Date of most recent report Annual Report 2018 102-52 Reporting cycle 32 102-53 Contact point for questions regarding the report 32 102-54 Claims of reporting in accordance with the GRI Standards 32 102-55 GRI content index 49 - 51 102-56 External assurance – 50 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

Topic: Strong Corporate Governance 103-1 Explanation of the material topic and its boundary 39 103-2 The management approach and its components 39 103-3 Evaluation of the management approach 39 102-16 Values, principles, standards and norms of behaviour 39 Topic: Compliance with Laws and Regulations 103-1 Explanation of the material topic and its boundary 39 103-2 The management approach and its components 39 - 40 103-3 Evaluation of the management approach 39 - 40 307-1 Non-compliance with environmental laws and regulations 40 Topic: Transparency and Anti-Corruption Measures 103-1 Explanation of the material topic and its boundary 40 103-2 The management approach and its components 40 103-3 Evaluation of the management approach 40 102-17 Mechanisms for advice and concerns about ethics 40 205-2 Communication and training about anti-corruption policies and 40 procedures Topic: Economic Performance 103-1 Explanation of the material topic and its boundary 41 103-2 The management approach and its components 41 103-3 Evaluation of the management approach 41 201-1 Direct economic value generated and distributed 41 Topic: Managing Energy 103-1 Explanation of the material topic and its boundary 42 103-2 The management approach and its components 42 103-3 Evaluation of the management approach 42 302-1 Energy Consumption within the organisation 42 302-3 Energy Intensity 42 Topic: Managing Water 103-1 Explanation of the material topic and its boundary 43 103-2 The management approach and its components 43 103-3 Evaluation of the management approach 43 303-5 Water consumption 43 Topic: Managing Waste & Hazardous Materials 103-1 Explanation of the material topic and its boundary 43 103-2 The management approach and its components 43 - 44 103-3 Evaluation of the management approach 43 - 44 306-2 Waste by type and disposal method 43 - 44 306-4 Transport of hazardous waste 43 51 Cycle & Carriage Bintang Berhad Annual Report 2019

Sustainability Statement

(continued)

Topic: Providing a Healthy and Safe Workplace 103-1 Explanation of the material topic and its boundary 47 103-2 The management approach and its components 47 103-3 Evaluation of the management approach 47 403-5 Worker training on occupational health and safety 47 403-9 Work-related injuries 48 Topic: Employee Development & Diversity 103-1 Explanation of the material topic and its boundary 44 103-2 The management approach and its components 44 - 46 103-3 Evaluation of the management approach 44 - 46 401-1 New employee hire and employee turnover 46 - 47 401-2 Benefits provided to full-time employees 45 401-3 Parental leave 45 404-1 Average hours of training per year per employee 46 404-3 Percentage of employees receiving regular performance and career 46 development reviews 405-1 Diversity of governance bodies and employees 44 Topic: Preventing Data Fraud and Theft 103-1 Explanation of the material topic and its boundary 41 103-2 The management approach and its components 41 103-3 Evaluation of the management approach 41 418-1 Substantiated complaints concerning breaches of customer privacy 41 and losses of customer data Topic: Engaging Communities 103-1 Explanation of the material topic and its boundary 48 103-2 The management approach and its components 48 103-3 Evaluation of the management approach 48 413-1 Operations with local community engagement, impact assessments 48 and development programs 52 Cycle & Carriage Bintang Berhad Annual Report 2019

Directors’ Report

The Directors of Cycle & Carriage Bintang Berhad present their report to the members together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2019.

PRINCIPAL ACTIVITIES

The principal activities of the Company consist of the retailing of motor vehicles, sale of spare parts and servicing of vehicles, whilst the principal activities of the subsidiaries are as stated in Note 27 to the financial statements.

Following the exercise of the call option by Daimler AG (“DAG”) on 30 November 2018 and the subsequent completion of the share sale agreement with DAG on 11 December 2019, the Company ceased to be entitled to further dividend income from Mercedes-Benz Malaysia Sdn Bhd, as disclosed in Note 13 to the financial statements.

FINANCIAL RESULTS

Group Company RM’000 RM’000

Loss before tax from continuing operations (69,036) (65,739) Income tax credit 7,376 6,859

Net loss from continuing operations (61,660) (58,880) Net profit from discontinued operation 22,457 22,457

Net loss for the financial year (39,203) (36,423)

DIVIDEND

No dividend has been paid or declared by the Company since 31 December 2018. The Directors do not recommend any dividend for the financial year ended 31 December 2019.

RESERVES AND PROVISIONS

Material transfers to or from reserves and provisions during the financial year are shown in the financial statements.

DIRECTORS

The Directors in office during the financial year and during the period from the end of the financial year to the date of the report are:

Chan Tze Choong Eric (resigned on 30 April 2019 as Alternate Director to Haslam Grey Preeston and appointed as Director on 1 May 2019) Rossana Annizah binti Ahmad Rashid Tang Saw Hua Anthony Albert Collingridge Kent Teo (appointed on 1 July 2019 as Alternate Director to Rossana Annizah binti Ahmad Rashid) Chan Kim Kooi (appointed on 1 July 2019 as Alternate Director to Chan Tze Choong Eric) Teng Wei Ann Adrian (resigned on 31 March 2019) Haslam Grey Preeston (resigned on 30 April 2019) 53 Cycle & Carriage Bintang Berhad Annual Report 2019

Directors’ Report

(continued)

DIRECTORS’ BENEFITS

During and at the end of the financial year, no arrangements subsisted to which the Company is a party being arrangements, with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than those disclosed in Note 5 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest other than share options.

DIRECTORS’ INTERESTS IN SHARES

According to the register of Directors’ shareholdings, particulars of interests of Directors who held office at the end of the financial year in the ordinary shares and options over ordinary shares in the Company and its related corporations are as follows:

Number of ordinary shares At At 1.1.2019 Acquired Sold 31.12.2019

Shares in Jardine Cycle & Carriage Limited (“JCCL”) held by: Chan Tze Choong Eric 11,166 0 0 11,166

Number of ordinary shares At date At appointment Acquired Sold 31.12.2019

Shares in Jardine Matheson Holdings Limited held by: Kent Teo 0 3,333 (3,333) 0

Options over ordinary shares of US$0.25 each At date At appointment Granted Exercised 31.12.2019

Options in Jardine Matheson Holdings Limited held by: Kent Teo 10,000 0 (3,333) 6,667

None of the other Directors who held office at the end of the financial year held any interest in shares or options in the Company or its related corporations during the financial year.

INDEMNITY AND INSURANCE COSTS

During the financial year, the Group maintained Directors’ and Officers’ Liability Insurance Policy to provide appropriate insurance cover for Directors and Officers of the Group subject to the terms of the policy. The insurance premium paid during the financial year amounted to RM37,811. 54 Cycle & Carriage Bintang Berhad Annual Report 2019

Directors’ Report

(continued)

DIRECTORS’ REMUNERATION

Details of Directors’ remuneration are set out in Note 5 to the financial statements.

OTHER STATUTORY INFORMATION

Before the financial statements of the Group and of the Company were prepared, the Directors took reasonable steps:

(a) to ascertain that proper action had been taken in relation to the writing-off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written-off and that adequate provision had been made for doubtful debts; and

(b) to ensure that any current assets, which were unlikely to be realised in the ordinary course of business including the values of current assets as shown in the accounting records of the Group and of the Company had been written- down to an amount which the current assets might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:

(a) which would render the amounts written-off for bad debts or the amount of the provision for doubtful debts 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 which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

At the date of this report:

(a) there are no charges on the assets of the Group or of the Company which have arisen since the end of the financial year which secures the liabilities of any other person; and

(b) there are no contingent liabilities in the Group and in the Company which have arisen since the end of the financial year.

No contingent or other liability of any company in the Group 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 Company and its subsidiaries to meet their obligations when they fall due.

At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the respective financial statements misleading.

In the opinion of the Directors,

(a) the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature, except for the recognition of an impairment loss of RM27.0 million on right-of-use assets and an additional dividend of RM11.2 million declared from the equity investment as disclosed in Notes 15 and 13 to the financial statements respectively.

(b) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made, except as disclosed in Note 33 to the financial statements. 55 Cycle & Carriage Bintang Berhad Annual Report 2019

Directors’ Report

(continued)

LIST OF DIRECTORS OF SUBSIDIARIES

The list of Directors of the subsidiaries during the financial year and during the period from the end of the financial year to the date of the report are:

Wilfrid Foo Tsu-Jin Tan Tee Yong Matthew Andre Daniel (appointed on 1 February 2020) Wan Qian-Wen (resigned on 31 January 2020)

ULTIMATE HOLDING COMPANY

The Directors regard Jardine Matheson Holdings Limited, a company incorporated in Bermuda, as the Company’s ultimate holding company.

SUBSIDIARIES

Details of subsidiaries are set out in Note 27 to the financial statements.

AUDITORS’ REMUNERATION

Details of auditors’ remuneration are set out in Note 6 to the financial statements.

AUDITORS

The auditors, PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146), have expressed their willingness to accept re-appointment as auditors.

Signed on behalf of the Board of Directors in accordance with their resolution dated 27 February 2020.

CHAN TZE CHOONG ERIC TANG SAW HUA DIRECTOR DIRECTOR 56 Cycle & Carriage Bintang Berhad Annual Report 2019

Statement by Directors Pursuant to Section 251(2) of the Companies Act 2016

We, Chan Tze Choong Eric and Tang Saw Hua, two of the Directors of Cycle & Carriage Bintang Berhad, state that, in the opinion of the Directors, the financial statements set out on pages 62 to 123 are drawn up so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2019 and of the financial performance of the Group and of the Company for the financial year ended on that date in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

Signed on behalf of the Board of Directors in accordance with their resolution dated 27 February 2020.

CHAN TZE CHOONG ERIC TANG SAW HUA DIRECTOR DIRECTOR

Statutory Declaration Pursuant to Section 251(1) of the Companies Act 2016

I, Matthew Andre Daniel, the officer primarily responsible for the financial management of Cycle & Carriage Bintang Berhad, do solemnly and sincerely declare that, the financial statements set out on pages 62 to 123 are, in my opinion, 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.

MATTHEW ANDRE DANIEL

Subscribed and solemnly declared by the abovenamed Matthew Andre Daniel.

At: Kuala Lumpur

On: 27 February 2020

Before me:

KAPT (B) JASNI BIN YUSOFF No. W465

COMMISSIONER FOR OATH 57 Cycle & Carriage Bintang Berhad Annual Report 2019

Independent Auditors’ Report To the members of Cycle & Carriage Bintang Berhad (Incorporated in Malaysia) (Registration No. 196701000428 (7378-D))

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Our opinion

In our opinion, the financial statements of Cycle & Carriage Bintang Berhad (“the Company”) and its subsidiaries (“the Group”) give a true and fair view of the financial position of the Group and of the Company as at 31 December 2019, and of their financial performance and their cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

What we have audited

We have audited the financial statements of the Group and of the Company, which comprise the statements of financial position of the Group and of the Company as at 31 December 2019, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 62 to 123.

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.

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.

Our audit approach

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements of the Group and the Company. In particular, we considered where the Directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statements as a whole, taking into account the structure of the Group and of the Company, the accounting processes and controls, and the industry in which the Group and the Company operate.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current financial 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. 58 Cycle & Carriage Bintang Berhad Annual Report 2019

Independent Auditors’ Report To the members of Cycle & Carriage Bintang Berhad (Incorporated in Malaysia) (Registration No. 196701000428 (7378-D))

(continued)

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)

Key audit matters (continued)

Key audit matters How our audit addressed the key audit matters Inventory write-down

The carrying values of the motor vehicle inventories We discussed with management on the basis applied by of the Group and of the Company as at 31 December management to write-down certain models of motor vehicle 2019 amounted to RM326.1 million and RM245.2 million inventory balance to their net realisable values as at the respectively. reporting date.

During the financial year, the Group and the Company have For new motor vehicles, management has considered the written-down a net amount of inventories of RM8.7 million prevailing market conditions and expected promotional and RM6.6 million respectively. costs to be incurred in relation to the new cars to be sold in the following calendar year in determining the net realisable We focused on the amount of write-down of inventories values. We selected a number of new motor vehicle models recognised as an expense in the current financial year that were written-down to their net realisable values, as it involves significant management judgement where and test checked against the transacted prices after the management has considered the timing of the launch of reporting date, where available, or the estimated discounts new models, the general economic condition of the country expected to be given on these models based on certain and the change in consumer’s demand in determining the factors determined by management. write-down amount. For used motor vehicles, management had determined the The determination of the estimated net realisable value of net realisable values based on information gathered from the motor vehicles inventory balance is also subject to high third party e-commerce websites that sell used cars and estimation uncertainty. made adjustments, where necessary, depending on the number of cars held and prevailing market condition. We Refer to Note H in the summary of significant accounting assessed the reasonableness of the net realisable values policies and Notes 3(a), 6(a) and 16 to the financial of certain models of the inventory balance by test checking statements. the net realisable values of these used cars to the prices of similar car models published on the third party e-commerce websites. We also selected a number of used motor vehicle models that were written-down to their net realisable values, and test checked against the transacted prices after the reporting date, where available, or estimated discounts expected to be given to the customers based on certain factors determined by management.

Based on the above procedures performed, we noted no material exceptions. 59 Cycle & Carriage Bintang Berhad Annual Report 2019

Independent Auditors’ Report To the members of Cycle & Carriage Bintang Berhad (Incorporated in Malaysia) (Registration No. 196701000428 (7378-D))

(continued)

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)

Key audit matters (continued)

Key audit matters How our audit addressed the key audit matters Impairment of leasehold land classified as right-of-use assets

The carrying amount of the leasehold land of the Group We reviewed the minutes of the meetings of the Board of and of the Company as at 31 December 2019, which Directors of the Company to ascertain the changes in their was recorded within the right-of-use assets amounted to plan for the use of the Sungai Besi site. RM42.1 million and RM44.0 million respectively. We obtained the valuation report that was relied upon During the financial year, the Group and the Company by management in determining the carrying amount of recorded an impairment loss of RM27.0 million as a result the Sungai Besi site. We evaluated the competencies, of the shortfall arising from the lower recoverable amount capabilities and objectivity of the external valuer. of the Sungai Besi site (classified as right-of-use asset) as compared to the carrying amount as at 31 December 2019. We discussed with the external valuer to gain an understanding on the basis of the valuation and the We focused on the impairment loss of RM27.0 million adjustments applied to arrive at the adjusted comparison arising from the Sungai Besi site as management has land value. We also evaluated the key assumptions applied relied on an external valuer to derive the market value and methods used by the external valuer in deriving the of the Sungai Besi site. The determination of the market valuation for the Sungai Besi site. value of the Sungai Besi site, which forms the basis of management’s impairment, is subject to significant We checked the accuracy of the input data provided by estimates and assumptions made by the external valuer. management to the external valuer with respect to the Sungai Besi site. Refer to Note F in the summary of significant accounting policies and Notes 3(d), 6(a) and 15 to the financial Based on the above procedures performed, we noted no statements. material exceptions.

Information other than the financial statements and auditors’ report thereon

The Directors of the Company are responsible for the other information. The other information comprises the Directors’ Report, Management Discussion and Analysis, Corporate Governance Overview Statement, Statement of Risk Management and Internal Control, and other sections of the 2019 Annual Report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express any form of assurance conclusion thereon.

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 of the Group and of the Company 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. 60 Cycle & Carriage Bintang Berhad Annual Report 2019

Independent Auditors’ Report To the members of Cycle & Carriage Bintang Berhad (Incorporated in Malaysia) (Registration No. 196701000428 (7378-D))

(continued)

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)

Responsibilities of the Directors for the financial statements

The Directors of the Company are responsible for the preparation of the financial statements of the Group and of the Company that 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 of the Group and of the Company 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 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.

Auditors’ 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 and International Standards on Auditing 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 judgement and maintain professional scepticism throughout the audit. We also:

(a) 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.

(b) 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.

(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.

(d) Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern.

(e) Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation. 61 Cycle & Carriage Bintang Berhad Annual Report 2019

Independent Auditors’ Report To the members of Cycle & Carriage Bintang Berhad (Incorporated in Malaysia) (Registration No. 196701000428 (7378-D))

(continued)

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)

Auditors’ responsibilities for the audit of the financial statements (continued)

(f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial statements of the Group and of the Company for the current financial year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

OTHER MATTERS

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

PRICEWATERHOUSECOOPERS PLT HEW CHOOI YOKE LLP0014401-LCA & AF 1146 03203/07/2021 J Chartered Accountants Chartered Accountant

Kuala Lumpur 27 February 2020 62 Cycle & Carriage Bintang Berhad Annual Report 2019

Consolidated Statement of Comprehensive Income For the Financial Year ended 31 December 2019

Note 2019 2018 RM’000 RM’000 Restated

CONTINUING OPERATIONS

REVENUE 4 1,143,315 1,513,296

Cost of sales (1,041,723) (1,366,846)

Gross profit 101,592 146,450

Other operating income - interest income 587 841 - others 11,861 23,360 Other losses - impairment loss on right-of-use assets (27,026) 0 Selling and distribution costs (102,504) (107,392) Administrative expenses (36,769) (36,053)

OPERATING (LOSS)/PROFIT (52,259) 27,206

FINANCE COST 6 (16,777) (12,561)

(LOSS)/PROFIT BEFORE TAX 6 (69,036) 14,645

INCOME TAX CREDIT/(EXPENSE) 7 7,376 (5,521)

NET (LOSS)/PROFIT FROM CONTINUING OPERATIONS (61,660) 9,124

NET PROFIT FROM DISCONTINUED OPERATION 13 22,457 11,229

NET (LOSS)/PROFIT AND TOTALCOMPREHENSIVE (LOSS)/ INCOME FOR THE FINANCIAL YEAR (39,203) 20,353

NET (LOSS)/PROFIT AND TOTAL COMPREHENSIVE (LOSS)/INCOME ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY (39,203) 20,353

Attributable to: OWNERS OF THE PARENT (39,203) 20,353

sen sen Basic (loss)/earnings per share attributable to shareholders of the Company 9 (38.91) 20.20 63 Cycle & Carriage Bintang Berhad Annual Report 2019

Consolidated Statement of Financial Position As at 31 December 2019

Note 31.12.2019 31.12.2018 1.1.2018 RM’000 RM’000 RM’000 Restated Restated

NON-CURRENT ASSETS Intangible assets 10 9,842 9,842 9,842 Property, plant and equipment 11 122,627 99,124 87,546 Equity investment - available-for-sale 13 0 0 66,003 Deferred tax assets 14 22,094 15,058 16,004 Right-of-use assets 15 94,671 122,637 127,598

249,234 246,661 306,993

CURRENT ASSETS Inventories 16 360,095 335,910 302,802 Trade and other receivables 17 96,300 128,794 93,622 Tax recoverable 3,194 6,560 9,775 Cash and cash equivalents 18 38,125 47,712 32,648

497,714 518,976 438,847 Asset held for sale 13 0 66,003 0

497,714 584,979 438,847

TOTAL ASSETS 746,948 831,640 745,840

NON-CURRENT LIABILITIES Borrowings 19 62,203 62,095 61,960 Lease liabilities 23 56,376 55,679 58,286

118,579 117,774 120,246

CURRENT LIABILITIES Provisions for liabilities and charges 20 1,980 1,817 2,541 Current tax liabilities 27 32 28 Trade payables and other liabilities 21 177,030 174,314 140,067 Contract liabilities 22 19,491 25,277 26,103 Borrowings 19 177,746 221,464 187,000 Lease liabilities 23 3,012 2,676 1,922

379,286 425,580 357,661

TOTAL LIABILITIES 497,865 543,354 477,907

NET ASSETS 249,083 288,286 267,933

EQUITY CAPITAL AND RESERVES ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY Share capital 25 124,602 124,602 124,602 Retained profits 124,481 163,684 143,331

TOTAL EQUITY 249,083 288,286 267,933 64 Cycle & Carriage Bintang Berhad Annual Report 2019

Consolidated Statement of Changes in Equity For the Financial Year ended 31 December 2019

Attributable to shareholders of the Company Issued and fully paid ordinary shares Number Retained Note of shares Amount profits Total ’000 RM’000 RM’000 RM’000

At 1 January 2019, as previously reported 100,745 124,602 168,705 293,307

Effects of adoption of MFRS 16 32 0 0 (5,021) (5,021)

At 1 January 2019, as restated 100,745 124,602 163,684 288,286

Net loss and total comprehensive loss for the financial year 0 0 (39,203) (39,203)

At 31 December 2019 100,745 124,602 124,481 249,083

At 1 January 2018, as previously reported 100,745 124,602 146,386 270,988

Effects of adoption of MFRS 16 32 0 0 (3,055) (3,055)

At 1 January 2018, as restated 100,745 124,602 143,331 267,933

Net profit and total comprehensive income for the financial year 0 0 20,353 20,353

At 31 December 2018 100,745 124,602 163,684 288,286 65 Cycle & Carriage Bintang Berhad Annual Report 2019

Consolidated Statement of Cash Flows For the Financial Year ended 31 December 2019

Note 2019 2018 RM’000 RM’000 Restated

OPERATING ACTIVITIES

Net cash flow from operations 26 8,178 4,456

Interest paid (16,505) (12,298) Interest received 587 841 Claims provision utilised 20 0 (270) Income tax refund/(paid) 3,701 (1,356)

(12,217) (13,083)

Net cash flow used in operating activities (4,039) (8,627)

INVESTING ACTIVITIES

Proceeds from disposal of plant and equipment 73 6 Purchase of property, plant and equipment 11 (35,892) (19,774) Purchase of right-of-use assets (1,256) 0 Proceeds from disposal of equity investment 13 66,003 0 Dividend received from an equity investment 13 11,229 11,229

Net cash flow from/(used in) investing activities 40,157 (8,539)

FINANCING ACTIVITIES

Drawdown of bankers’ acceptance 886,800 912,900 Repayment of bankers’ acceptance (859,500) (959,200) Drawdown of revolving hire-purchase floorplan 0 53,586 Repayment of revolving hire-purchase floorplan (53,586) 0 Drawdown of finance lease liabilities 52,344 70,358 Repayment of finance lease liabilities (69,776) (43,273) Principal elements of lease payments (1,987) (2,141)

Net cash flow (used in)/from financing activities (45,705) 32,230

NET CHANGE IN CASH AND CASH EQUIVALENTS DURING THE FINANCIAL YEAR (9,587) 15,064

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 18 47,712 32,648

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 18 38,125 47,712 66 Cycle & Carriage Bintang Berhad Annual Report 2019

Company Statement of Comprehensive Income For the Financial Year ended 31 December 2019

Note 2019 2018 RM’000 RM’000 Restated

CONTINUING OPERATIONS

REVENUE 4 868,416 1,117,958

Cost of sales (792,183) (1,011,692)

Gross profit 76,233 106,266

Other operating income - interest income 2,346 2,525 - others 10,830 9,871 Other losses - impairment loss on right-of-use assets (27,026) 0 Selling and distribution costs (77,269) (78,007) Administrative expenses (34,715) (34,065)

OPERATING (LOSS)/PROFIT (49,601) 6,590

FINANCE COST 6 (16,138) (12,135)

LOSS BEFORE TAX 6 (65,739) (5,545)

INCOME TAX CREDIT/(EXPENSE) 7 6,859 (730)

NET LOSS FROM CONTINUING OPERATIONS (58,880) (6,275)

NET PROFIT FROM DISCONTINUED OPERATION 13 22,457 11,229

NET (LOSS)/PROFIT AND TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE FINANCIAL YEAR (36,423) 4,954 67 Cycle & Carriage Bintang Berhad Annual Report 2019

Company Statement of Financial Position As at 31 December 2019

Note 31.12.2019 31.12.2018 1.1.2018 RM’000 RM’000 RM’000 Restated Restated

NON-CURRENT ASSETS Property, plant and equipment 11 113,436 90,120 78,779 Investments in subsidiaries 12 & 27 47,704 47,704 47,704 Equity investment - available-for-sale 13 0 0 66,003 Deferred tax assets 14 19,096 13,145 11,000 Right-of-use assets 15 90,574 120,484 123,535

270,810 271,453 327,021

CURRENT ASSETS Inventories 16 272,742 249,415 227,320 Trade and other receivables 17 132,176 155,869 145,042 Tax recoverable 903 4,328 6,566 Cash and cash equivalents 18 28,876 38,976 26,792

434,697 448,588 405,720 Asset held for sale 13 0 66,003 0

434,697 514,591 405,720

TOTAL ASSETS 705,507 786,044 732,741

NON-CURRENT LIABILITIES Borrowings (unsecured) 19 62,203 62,095 61,960 Lease liabilities 23 50,889 52,117 52,568

113,092 114,212 114,528

CURRENT LIABILITIES Provisions for liabilities and charges 20 1,845 1,689 2,402 Trade payables and other liabilities 21 140,492 147,416 118,195 Contract liabilities 22 16,140 21,747 21,319 Amounts due to subsidiaries 24 26,137 26,144 26,152 Borrowings (unsecured) 19 175,267 206,109 187,000 Lease liabilities 23 1,951 1,721 1,093

361,832 404,826 356,161

TOTAL LIABILITIES 474,924 519,038 470,689

NET ASSETS 230,583 267,006 262,052

EQUITY CAPITAL AND RESERVES ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY Share capital 25 124,602 124,602 124,602 Retained profits 105,981 142,404 137,450

TOTAL EQUITY 230,583 267,006 262,052 68 Cycle & Carriage Bintang Berhad Annual Report 2019

Company Statement of Changes in Equity For the Financial Year ended 31 December 2019

Attributable to shareholders of the Company Issued and fully paid ordinary shares Number Retained Note of shares Amount profits Total ’000 RM’000 RM’000 RM’000

At 1 January 2019, as previously reported 100,745 124,602 147,273 271,875

Effects of adoption of MFRS 16 32 0 0 (4,869) (4,869)

At 1 January 2019, as restated 100,745 124,602 142,404 267,006

Net loss and total comprehensive loss for the financial year 0 0 (36,423) (36,423)

At 31 December 2019 100,745 124,602 105,981 230,583

At 1 January 2018, as previously reported 100,745 124,602 140,418 265,020

Effects of adoption of MFRS 16 32 0 0 (2,968) (2,968)

At 1 January 2018, as restated 100,745 124,602 137,450 262,052

Net profit and total comprehensive income for the financial year 0 0 4,954 4,954

At 31 December 2018 100,745 124,602 142,404 267,006 69 Cycle & Carriage Bintang Berhad Annual Report 2019

Company Statement of Cash Flows For the Financial Year ended 31 December 2019

Note 2019 2018 RM’000 RM’000 Restated

OPERATING ACTIVITIES

Net cash flow (used in)/from operations 26 (11,325) 11,174

Interest paid (15,854) (11,903) Interest received 2,346 2,525 Claims provision utilised 20 0 (270) Income tax refund/(paid) 4,333 (637)

(9,175) (10,285)

Net cash flow (used in)/from operating activities (20,500) 889

INVESTING ACTIVITIES

Proceeds from disposal of plant and equipment 2 1 Purchase of property, plant and equipment 11 (34,113) (18,226) Purchase of right of use assets (1,256) 0 Proceeds from disposal of equity investment 13 66,003 0 Dividend received from an equity investment 13 11,229 11,229 Repayment of loan from a subsidiary 450 480

Net cash flow from/(used in) investing activities 42,315 (6,516)

FINANCING ACTIVITIES

Drawdown of bankers’ acceptance 886,800 912,900 Repayment of bankers’ acceptance (859,500) (959,200) Drawdown of revolving hire-purchase floorplan 0 47,436 Repayment of revolving hire-purchase floorplan (47,436) 0 Drawdown of finance lease liabilities 37,554 51,247 Repayment of finance lease liabilities (48,266) (33,339) Principal of lease payments (1,067) (1,233)

Net cash flow (used in)/from financing activities (31,915) 17,811

NET CHANGE IN CASH AND CASH EQUIVALENTS DURING THE FINANCIAL YEAR (10,100) 12,184

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 38,976 26,792

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 18 28,876 38,976 70 Cycle & Carriage Bintang Berhad Annual Report 2019

Summary of Significant Accounting Policies For the Financial Year ended 31 December 2019

Unless otherwise stated, the following accounting policies have been applied consistently in dealing with items that are considered material in relation to the financial statements. These policies have been consistently applied to all the financial years presented, unless otherwise stated.

A BASIS OF PREPARATION

The financial statements of the Group and the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below.

The preparation of financial statements in conformity with MFRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. It also requires Directors to exercise their judgement in the process of applying the Group and the Company’s accounting policies. Although these estimates and judgement are based on the Directors’ best knowledge of current events and actions, actual results could differ from these estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3 to the financial statements.

(i) Standards, amendments to published standards and interpretations to existing standards that are applicable and effective to the Group and the Company

The new accounting standards, amendments to published standards and interpretations to existing standards that are effective for the Group’s and the Company’s financial year beginning on or after 1 January 2019 are as follows:

• Amendments to MFRS 9 Financial Instruments – Prepayment Features with Negative Compensation • Annual Improvements to MFRSs 2015 – 2017 Cycle • Amendments to MFRS 128 Investments in Associates and Joint Ventures – Long-term Interests in Associate and Joint Ventures • MFRS 16 Leases • IC Interpretation 23 – Uncertainty over Income Tax Treatments

The Group and the Company have adopted MFRS 16 for the first time in the 2019 financial statements, which resulted in changes in the accounting policies. Changes to the accounting policies on adoption of MFRS 16 have been applied using the full retrospective basis, and accordingly, the comparative financial statements have been restated.

Under the full retrospective method, the 2018 comparative information have been restated to reflect the new requirements of MFRS 16 where the Group and the Company is a lessee. The effects of the change in accounting policy were adjusted against retained profits as at 1 January 2018 and were reflected in the Group’s and the Company’s financial statements.

The detailed impact of the changes in adopting MFRS 16 are set out in Note 32 to the financial statements.

Other than that, the adoption of the other amendments and interpretations listed above did not have any impact on the current period or any prior period and is not likely to affect future periods. 71 Cycle & Carriage Bintang Berhad Annual Report 2019

Summary of Significant Accounting Policies For the Financial Year ended 31 December 2019

(continued)

A BASIS OF PREPARATION (CONTINUED)

(ii) Standards early adopted by the Group and the Company

There were no standards early adopted by the Group and the Company.

(iii) Standards and amendments to published standards that are applicable to the Group and the Company but not yet effective

Effective on or after 1 January 2020:

• The Conceptual Framework for Financial Reporting (Revised 2018) • Amendments to MFRS 101 and MFRS 108 - Definition of Material • Amendments to MFRS 3 - Definition of A Business • Amendments to MFRS 9 and MFRS 7 - Interest Rate Benchmark Reform

Effective date: Deferred

• Amendments to MFRS 10 and MFRS 128 - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The adoption of the above new standards and amendments to published standards when they become effective are not expected to have any material impact on the Group’s and the Company’s financial statements.

B CONSOLIDATION

The consolidated financial statements include the financial statements of the Company and its subsidiaries on the basis set out below.

A subsidiary is an entity over which the Group has control. The Group controls an entity when the Group is exposed to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interest issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.

Acquisition-related costs are expensed as incurred.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with MFRS 9 in profit or loss. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

All intercompany transactions, balances and unrealised surpluses and deficits on transactions between group companies have been eliminated. Where necessary, accounting policies for subsidiaries have been changed to ensure consistency with the policies adopted by the Group. 72 Cycle & Carriage Bintang Berhad Annual Report 2019

Summary of Significant Accounting Policies For the Financial Year ended 31 December 2019

(continued)

C INVESTMENTS IN SUBSIDIARIES

In the Company’s separate financial statements, investments in subsidiaries are carried at cost less accumulated impairment losses, where applicable. On the disposal of investment in subsidiaries, the difference between disposal proceeds and the carrying amounts of the investments are recognised in the profit or loss.

D PROPERTY, PLANT AND EQUIPMENT

Freehold land is stated at cost less impairment losses, where applicable. Freehold buildings, the building component of owner-occupied leasehold properties and all other property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, where applicable. The cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to location and condition necessary for it to be capable of operating in the manner intended by management. Cost also includes borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset (refer to accounting policy K on borrowing 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 Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is de-recognised. All other repairs and maintenance are recognised as expenses in the profit or loss during the financial period in which they are incurred.

Freehold land is not depreciated as it has an infinite life. Buildings are depreciated using the straight-line method over their estimated useful economic lives or the estimated remaining period of the lease, whichever is shorter.

All other property, plant and equipment are depreciated on the straight-line basis to write-off the cost of each asset to their residual values over their estimated useful lives at the following annual rates:

1 Buildings 3 /3% - 14% Plant and machinery 14% - 33% Motor vehicles, equipment and fixtures 10% - 33%

Depreciation on assets under construction commences when the assets are ready for their intended use.

The residual value, useful lives and depreciation method of property, plant and equipment are reviewed at the end of each reporting period and adjusted, if appropriate.

At the end of the reporting period, the Group and the Company assess whether there is any indication of impairment. If such indications exist, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable. A write-down is made if the carrying amount exceeds the recoverable amount. See accounting policy F on impairment of non-financial assets.

On disposal of property, plant and equipment, the difference between the net disposal proceeds and the carrying amount is included in the profit or loss. 73 Cycle & Carriage Bintang Berhad Annual Report 2019

Summary of Significant Accounting Policies For the Financial Year ended 31 December 2019

(continued)

E INTANGIBLE ASSETS

(i) Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary at the acquisition date. If the cost of acquisition is less than the fair value of the net assets acquired, the difference is recognised directly in the profit or loss. Goodwill on acquisition of subsidiary is tested annually for impairment or whenever events or changes in circumstances indicate that the carrying value may not be recoverable and are carried at cost less accumulated impairment losses.

Goodwill is allocated to cash-generating units or groups of cash-generating units for the purpose of impairment testing.

(ii) Dealership rights

Dealership rights, which are rights under dealership agreement, are separately identified intangible assets acquired as part of a business combination. This dealership agreement is expected to continue for an indefinite period and, where these agreements do not have indefinite terms, it is believed that renewal of these agreements can be obtained without costs, taking into account the historical renewal and the relationship between the dealer and contracting parties. Dealership rights are not amortised, but tested annually for impairment and carried at cost less accumulated impairment losses, where applicable.

F IMPAIRMENT OF NON-FINANCIAL ASSETS

The Group and the Company assess at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Group and the Company make an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s fair value less cost to sell and its value-in-use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units (“CGU”)).

Impairment losses are recognised in the profit or loss except for assets that are previously revalued where the revaluation was taken to other comprehensive income. Impairment losses would be allocated first to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets of the CGU on a pro rata basis, based on the carrying value of each asset in the CGU. In this case, the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in the profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment loss on goodwill is not reversed in a subsequent period. 74 Cycle & Carriage Bintang Berhad Annual Report 2019

Summary of Significant Accounting Policies For the Financial Year ended 31 December 2019

(continued)

G FINANCIAL ASSETS

(i) Classification

The Group and the Company classify the financial assets in the following measurement categories:

• those to be measured subsequently as fair value (either through other comprehensive income (“OCI”) or through profit or loss); and • those to be measured at amortised cost.

(ii) Recognition and de-recognition

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group and the Company commit to purchase or sell the asset. Financial assets are de-recognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group and the Company have transferred substantially all the risks and rewards of ownership.

(iii) Measurement

At initial recognition, the Group and the Company measure a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (“FVTPL”), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in the profit or loss.

Equity instruments

The Group and the Company subsequently measure the equity investment at fair value. Where the Group’s and the Company’s management has elected to present fair value gains and losses on equity investment in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the de- recognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income when the Group’s and the Company’s right to receive payments is established.

(iv) Subsequent measurement – Impairment

The Group and the Company assess on a forward looking basis the expected credit loss associated with its debts instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the Group and the Company apply the simplified approach permitted by MFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables. For other receivables and amounts due from subsidiaries, the Group and the Company apply the general 3-stage approach and measure the expected credit losses through loss allowance at an amount equal to 12 month ECL if the credit risk of a financial instrument or a group of financial instruments has not increased significantly since its initial recognition.

H INVENTORIES

Inventories are stated at the lower of cost and net realisable value. Cost is generally determined using the specific identification method except for spare parts, where cost is determined on the weighted average method. 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. 75 Cycle & Carriage Bintang Berhad Annual Report 2019

Summary of Significant Accounting Policies For the Financial Year ended 31 December 2019

(continued)

I CASH AND CASH EQUIVALENTS

Cash and cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value.

For the purposes of the statement of cash flows, cash and cash equivalents comprise cash in hand, deposits held at call with banks and bank overdrafts. In the statement of financial position, bank overdrafts are shown within borrowings in current liabilities, where applicable.

J FINANCIAL LIABILITIES

Financial liabilities are classified according to the substance of the contractual arrangement entered into and definitions of a financial liability.

Financial liabilities, within the scope of MFRS 9, are recognised in the statement of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument.

The Group’s and the Company’s financial liabilities include trade payables, other liabilities, lease liabilities and borrowings.

Trade payables and other liabilities are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method.

For other financial liabilities, gains and losses are recognised in the profit or loss when the liabilities are de-recognised, or through the amortisation process.

A financial liability is de-recognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de-recognition of the original liability, and the difference in the respective carrying amounts is recognised in the profit or loss.

K BORROWINGS AND BORROWINGS COSTS

(i) Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between initial recognised amount and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

Borrowings are classified as current liabilities unless the Group or the Company has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period. 76 Cycle & Carriage Bintang Berhad Annual Report 2019

Summary of Significant Accounting Policies For the Financial Year ended 31 December 2019

(continued)

K BORROWINGS AND BORROWINGS COSTS (CONTINUED)

(ii) Borrowing costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

L PROVISIONS

Provisions for service and warranty and claims are recognised when the Group and the Company have a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessment of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.

M SHARE CAPITAL

(i) Classification

Ordinary shares are classified as equity.

(ii) Dividends

Interim dividends are accounted for in shareholders’ equity as an appropriation of retained profits in the period in which they are declared whilst final dividend is accounted for when approved by shareholders at the Annual General Meeting.

N REVENUE/OTHER INCOME RECOGNITION

(i) Revenue from contracts with customers is recognised by reference to each distinct performance obligation in the contracts. Revenue from contracts with customers is measured at its transaction price, being the amount of consideration which the Group and the Company expect to be entitled in exchange for transferring promised goods or services to a customer, net of goods and service tax, returns, rebates and discounts. Transaction price is allocated to each performance obligation on the basis of the relative standalone selling prices of each distinct good or services promised in the contract. Depending on the substance of the contract, revenue is recognised when the performance obligation is satisfied, which may be at a point in time or over time.

(a) Sale of vehicles and spare parts

Revenue from the sale of goods is recognised when the Group and the Company sell the vehicle to the customers and control of the vehicle and spare parts has transferred, being when the vehicle and spare parts are delivered to the customer.

The retail of spare parts normally occurs during the performance of after-sale services, see Note N (i)(b) below. 77 Cycle & Carriage Bintang Berhad Annual Report 2019

Summary of Significant Accounting Policies For the Financial Year ended 31 December 2019

(continued)

N REVENUE/OTHER INCOME RECOGNITION (CONTINUED)

(i) Revenue from contracts with customers is recognised by reference to each distinct performance obligation in the contracts. Revenue from contracts with customers is measured at its transaction price, being the amount of consideration which the Group and the Company expect to be entitled in exchange for transferring promised goods or services to a customer, net of goods and service tax, returns, rebates and discounts. Transaction price is allocated to each performance obligation on the basis of the relative standalone selling prices of each distinct good or services promised in the contract. Depending on the substance of the contract, revenue is recognised when the performance obligation is satisfied, which may be at a point in time or over time. (continued)

(a) Sale of vehicles and spare parts (continued)

Consistent with market practice, the Group collects deposit from customers for sale of vehicle. A contract liability is recognised for the customer deposits as the Group has an obligation to transfer the vehicle to the customer in respect of the deposits received. Customer deposits would be recognised as revenue upon sale of vehicle to the customer.

No element of financing is deemed present as the credit vehicle sales are made with a credit term of 30 to 60 days, which is consistent with market practice.

A receivable is recognised when the vehicle is delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before payment is due.

(b) Performance of after-sales services

Revenue from rendering of services is recognised when services are rendered. The Group and the Company provide after-sale services or routine vehicle maintenance services and revenue from after-sale services is recognised over the period of performance of services to customers.

The sale of vehicle to customer may be bundled together with free services or service credits. The free services and service credit are separate performance obligations and the transaction price is allocated to the service obligations based on its relative stand-alone selling prices. The free services and service credits are deferred and recorded as contract liabilities. Free services are recognised as revenue over the period when the free services are performed while service credits are recognised as revenue as and when the credits are redeemed by the customers within the redemption period.

No element of financing is deemed present as the credit after-sales services are made with a credit term of 30 to 60 days, which is consistent with market practice.

Where consideration is collected from customers in advance of after-sales services being performed, a contract liability is recognised. The contract liability would be recognised as revenue when the services are rendered.

(ii) Other income is recognised on the following basis:

(a) Interest income is recognised on the accruals basis on a time-proportion basis unless collection is in doubt. (b) Dividend income is recognised when the right to receive payment is established. (c) Insurance agency commission is recognised on the effective commencement or renewal dates of the related vehicle insurance policies. 78 Cycle & Carriage Bintang Berhad Annual Report 2019

Summary of Significant Accounting Policies For the Financial Year ended 31 December 2019

(continued)

O EMPLOYEE BENEFITS

(i) Short-term employee benefits

Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by employees of the Group and the Company.

(ii) Defined contribution plan

The Group’s and the Company’s contributions to the Employees’ Provident Fund, a defined contribution plan regulated and managed by the Government, are charged to the profit or loss in the period to which they relate. Once the contributions have been paid, the Group and the Company have no further financial obligations.

P LEASES

Accounting by lessee

From 1 January 2019, leases are recognised as right-of-use (‘ROU’) asset and a corresponding liability at the date on which the leased asset is available for use by the Group and the Company.

Contracts may contain both lease and non-lease components. The Group and the Company allocate the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of properties for which the Group and the Company are lessee, it has elected the practical expedient provided in MFRS 16 not to separate lease and non-lease components. Both components are accounted for as a single lease component and payments for both components are included in the measurement of lease liability.

(i) Lease term

In determining the lease term, the Group and the Company consider all facts and circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not to be terminated).

The Group and the Company reassess the lease term upon the occurrence of a significant event or change in circumstances that is within the control of the Group and the Company and affects whether the Group and the Company are reasonably certain to exercise an option not previously included in the determination of lease term, or not to exercise an option previously included in the determination of lease term. A revision in lease term results in remeasurement of the lease liabilities.

(ii) ROU assets

ROU assets are initially measured at cost comprising the following:

• The amount of the initial measurement of lease liability; • Any lease payments made at or before the commencement date less any lease incentive received; • Any initial direct costs; and • Decommissioning or restoration costs.

ROU assets that are not investment properties are subsequently measured at cost, less accumulated depreciation and impairment loss (if any). The ROU assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If the Group and the Company are reasonably certain to exercise a purchase option, the ROU asset is depreciated over the underlying asset’s useful life. In addition, the ROU assets are adjusted for certain remeasurement of the lease liabilities. 79 Cycle & Carriage Bintang Berhad Annual Report 2019

Summary of Significant Accounting Policies For the Financial Year ended 31 December 2019

(continued)

P LEASES (CONTINUED)

Accounting by lessee (continued)

(ii) ROU assets (continued)

Leasehold land which represents payments to third parties to acquire interests in property is now presented under ROU assets. Leasehold land is amortised over the useful life of the lease, which includes the renewal period if the lease is likely to be renewed by the Group and the Company without significant cost. Leasehold land is amortised in equal instalment over the periods of the respective leases which range from 45 to 91 years.

(iii) Lease liabilities

Lease liabilities are initially measured at the present value of the lease payments that are not paid at that date. The lease payments include the following:

• Fixed payments (including in-substance fixed payments), less any lease incentive receivable; • Variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the commencement date; • Amounts expected to be payable by the Group and the Company under residual value guarantees; • The exercise price of a purchase and extension options if the Group and the Company is reasonably certain to exercise that option; and • Payments of penalties for terminating the lease, if the lease term reflects the Group and the Company exercising that option.

Lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group and the Company, the lessee’s incremental borrowing is used. This is the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the ROU in a similar economic environment with similar term, security and conditions.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Variable lease payments that depend on sales are recognised in profit or loss in the period in which the condition that triggers those payments occurs.

The Group and the Company present the lease liabilities as a separate line item in the statement of financial position. Interest expense on the lease liability is presented within the finance cost in the statement of comprehensive income.

Lease liabilities are classified as non-current liabilities unless payments are within 12 months from the reporting date.

(iv) Reassessment of lease liabilities

The Group and the Company are also exposed to potential future increases in variable lease payments that depend on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is remeasured and adjusted against the ROU assets. 80 Cycle & Carriage Bintang Berhad Annual Report 2019

Summary of Significant Accounting Policies For the Financial Year ended 31 December 2019

(continued)

P LEASES (CONTINUED)

Accounting by lessee (continued)

(v) Short-term leases and leases of low value assets

Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipments. Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straight-line basis as an expense in the profit or loss.

Q INCOME TAX

Income tax expense comprises current and deferred tax. Income tax expense is recognised in the profit or loss, except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.

Current income tax is provided based on the tax payable on the taxable profit for the financial year, using income tax rate enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial years.

Deferred tax is recognised in full, using the liability method, on temporary differences arising between the amounts attributed to assets and liabilities for income tax purposes and their carrying amounts in the financial statements. The principal temporary differences arise from depreciation on property, plant and equipment, impairment of assets and unutilised tax losses carried forward; and in relation to acquisitions, on the difference between the fair values of the net assets acquired and their tax bases. Deferred tax is measured at the tax rates that are expected to apply to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets are recognised for temporary differences which will result in deductible amounts in future periods, carry-forward of unused tax losses and tax credits but only to the extent that it is probable that future taxable profits will be available against which these temporary differences, losses or tax credits can be utilised.

R FOREIGN CURRENCIES

(i) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements are presented in Ringgit Malaysia, which is the Group’s functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the dates of the transactions. Foreign currency monetary assets and liabilities have been converted into Ringgit Malaysia at the rates of exchange ruling at the end of reporting date. Exchange differences arising from the settlement of foreign currency transactions and from the translation of foreign currency monetary assets and liabilities are recognised in the profit or loss. 81 Cycle & Carriage Bintang Berhad Annual Report 2019

Summary of Significant Accounting Policies For the Financial Year ended 31 December 2019

(continued)

S SEGMENT REPORTING

Operating segments are reported in the manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chief Executive Officer, who is primarily responsible for the Group’s and the Company’s strategic decisions.

T NON-CURRENT ASSETS HELD FOR SALE

Non-current assets are classified as assets held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and investment property that are carried at fair value and contractual rights under insurance contracts, which are specifically exempt from this requirement.

An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset is recognised at the date of derecognition.

Non-current assets are not depreciated or amortised while they are classified as held for sale. Non-current assets classified as held for sale are presented separately from the other assets in the statement of financial position.

U CONTINGENT ASSETS AND LIABILITIES

The Group and the Company do not recognise contingent assets and liabilities other than those arising from business combinations, but discloses its existence in the financial statements. A contingent liability is a possible obligation 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 and the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the extremely rare case where there is a liability that cannot be recognised because it cannot be measured reliably. However, contingent liabilities do not include financial guarantee contracts. 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 and the Company. The Group and the Company do not recognise contingent assets but discloses its existence where inflows of economic benefits are probable, but not virtually certain.

82 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

1 GENERAL INFORMATION

Cycle & Carriage Bintang Berhad (“the Company”) is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad.

The immediate and ultimate holding companies of the Company are Jardine Cycle & Carriage Limited, a company incorporated in Singapore and Jardine Matheson Holdings Limited, a company incorporated in Bermuda respectively.

The principal activities of the Company consist of the retailing of motor vehicles, sale of spare parts and servicing of vehicles, whilst the principal activities of the subsidiaries are as stated in Note 27 to the financial statements.

Following the exercise of the call option by Daimler AG (“DAG”) on 30 November 2018 and the subsequent completion of the share sale agreement with DAG on 11 December 2019, the Company ceased to be entitled to further dividend income from Mercedes-Benz Malaysia Sdn Bhd, as disclosed in Note 13 to the financial statements.

The address of the registered office of the Company is as follows:

Unit 30-01, Level 30, Tower A Vertical Business Suite Avenue 3, Bangsar South No. 8, Jalan Kerinchi 59200 Kuala Lumpur

The address of the principal place of business of the Company is as follows:

Lot 19, Jalan 51A/219 46100 Petaling Jaya Selangor Darul Ehsan

2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s and the Company’s activities expose it to a variety of financial risks, including market risk (interest rate risk and foreign currency exchange risk), credit risk and liquidity risk. The Group’s overall financial risk management objective is to ensure that the Group creates value for its shareholders. Financial risk management is carried out through risk reviews, internal control systems and adherence to Group financial risk management policies. The Board regularly reviews these risks and approves the treasury policies, which covers the management of these risks.

(a) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of the Group’s and the Company’s financial instruments will fluctuate due to changes in market rates. As the Group and the Company have no significant long-term interest bearing financial assets, the Group’s and the Company’s income and operating cash flows are substantially independent of changes in market interest rates. The Group’s and the Company’s interest bearing financial assets are mainly short-term in nature and have been placed mostly in overnight placements. The Group’s and the Company’s borrowings are issued at variable rates and fixed rates at inception and hence expose the Group and the Company to interest rate changes. 83 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(a) Interest rate risk (continued)

The following table sets out the carrying amounts of the Group’s and the Company’s financial instruments that are exposed to interest rate risk:

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

Fixed rate Amounts due from subsidiaries 0 0 54,183 53,687 Bankers acceptance (unsecured) (168,000) (140,700) (168,000) (140,700) Finance lease liabilities (secured) (9,746) (27,178) (7,267) (17,973) Revolving hire-purchase floorplan 0 (53,586) 0 (47,436) Lease liabilities (59,388) (58,355) (52,840) (53,838)

Floating rate Deposits with licensed banks 20,347 36,048 20,347 36,048 Term loans (unsecured) (62,203) (62,095) (62,203) (62,095)

Net exposure (278,990) (305,866) (215,780) (232,307)

As interest rate risk arising from the Group’s and the Company’s operations is not material, sensitivity analysis is hence not presented.

(b) Foreign currency exchange risk

The Group and the Company are exposed to foreign currency exchange risk when entering into transactions that are not denominated in their functional currency. The Group manages its exposure to foreign currency exchange risk through the use of foreign currency forward contracts. There is no open foreign currency forward contract as at financial year end.

The Group’s and the Company’s principal total foreign currency exposure mainly relates to Singapore Dollar (“SGD”) as at the reporting date.

The Group’s and the Company’s exposure to foreign currencies at the reporting date is as follows:

Group and Company 2019 2018 RM’000 RM’000

Trade and other payables denominated in: - SGD 542 333

As foreign currency risk arising from the Group’s and the Company’s operations is not material, sensitivity analysis is hence not presented. 84 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(c) Credit risk

The Group’s and the Company’s credit risk are primarily attributable to deposits with banks, credit exposures to customers and unsecured loans and advances to its wholly-owned subsidiaries. The Group and the Company have credit policies in place and the exposures to these credit risks are monitored on an ongoing basis. The Group and the Company have no significant concentrations of credit risk.

The Group’s and the Company’s trade and other receivables and amounts due from subsidiaries are subject to the expected credit loss (“ECL”) model which incorporates forward looking information. ECL represents a probability-weighted estimate of the difference between present value of cash flows according to contract and present value of cash flows the Group and the Company expect to receive, over the remaining life of the financial instrument.

The Group’s and the Company’s trade receivables are subject to the ECL model and the Group and the Company apply a simplified approach to measure ECL which uses a lifetime ECL for all trade receivables. Note 17 to the financial statements sets out the measurement details of ECL.

The Group and the Company apply the general 3-stage approach for impairment of the other receivables, deposits and amounts due from subsidiaries. At each reporting date, the Group and the Company measure ECL through loss allowance at an amount equal to 12-month ECL if credit risk on a financial instrument or a group of financial instruments has not increased significantly since initial recognition. For all other financial instruments, a loss allowance at an amount equal to lifetime ECL is required.

Cash and cash equivalents are also subject to the impairment requirements of MFRS 9, however the identified impairment loss is expected to be immaterial.

The measurement of ECL reflects: • unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes; • time value of money; and • reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

Significant increase in credit risk

The Group and the Company consider the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk, the Group and the Company compare the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportable forward-looking information.

The following indicators are incorporated: • internal credit rating; • actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the debtor’s ability to meet its obligations; and • significant changes in the expected performance and behaviour of the debtor.

Macroeconomic information (such as market interest rates or growth rates) is incorporated as part of the internal rating model.

A significant increase in credit risk is presumed if a debtor is more than 30 days past due in making contractual payment. 85 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(c) Credit risk (continued)

Definition of default and credit-impaired financial assets

The Group and the Company define a financial instrument as default, which is fully aligned with the definition of credit-impaired, when the counterparty fails to make contractual payment within 90 days of when they fall due and the debtor indicates significant financial difficulty such as it becomes probable that the debtor will enter bankruptcy or other financial reorganisation or the debtor is insolvent. Trade and other receivables that are credit-impaired are assessed on an individual basis.

Write-off

(a) Trade receivables

Trade receivables are written-off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group and the Company. Impairment losses on trade receivables are presented as net impairment losses within selling and distribution expenses in the statement of comprehensive income. Subsequent recoveries of amounts previously written-off are credited against the same line.

(b) Other receivables, deposits and amounts due from subsidiaries

The Group and the Company write-off financial assets, in whole or in part, when they have exhausted all practical recovery efforts and have concluded that there is no reasonable expectation of recovery. The assessment of no reasonable expectation of recovery is based on unavailability of debtor’s sources of income or assets to generate sufficient future cash flows to repay the amount. The Group and the Company may write-off financial assets that are still subject to enforcement activity. These are presented as net impairment losses within administrative expenses in the statement of comprehensive income. Subsequent recoveries of amounts previously written-off are credited against the same line item.

The Group’s and the Company’s bank balances and short-term deposits are placed with creditworthy local licensed banks. The credit risks arising thereof are minimised in view of the financial strength of the banks.

The Group and the Company have policies in place to ensure that sales on credit without collateral are made principally to corporate companies with appropriate credit worthiness and where necessary are partially backed by bank guarantees. Sales to other customers are made in cash or by major credit cards.

The Company provides unsecured loans and advances to its wholly owned subsidiaries and monitors the results of the subsidiaries regularly.

The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position after deducting any impairment as set out in Notes 17 and 18 to the financial statements. 86 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(d) Liquidity risk

The Group and the Company adopt prudent liquidity risk management by maintaining sufficient cash and an adequate amount of available committed credit facilities.

The table below analyses the Group’s and the Company’s non-derivative financial liabilities into relevant maturity groupings based on remaining periods at the reporting date to the maturity dates. The amounts disclosed in the table are contractual undiscounted cash flows:

On Between Between Between demand/Less 3 to 6 6 months 1 year Beyond than 3 months months to 1 year to 5 years 5 years Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 31 December 2019:

Group Trade payables and other liabilities 158,568 17,223 1,239 0 0 177,030 Borrowings - principal 168,000 8,807 939 62,203 0 239,949 - interest 1,189 902 1,137 3,942 0 7,170 Lease liabilities - principal 775 759 1,478 8,953 47,423 59,388 - interest 871 860 1,690 12,259 24,012 39,692

329,403 28,551 6,483 87,357 71,435 523,229

Company Trade payables and other liabilities 123,537 15,797 1,158 0 0 140,492 Amount due to subsidiaries 26,137 0 0 0 0 26,137 Borrowings - principal 168,000 6,432 835 62,203 0 237,470 - interest 1,189 891 1,136 3,942 0 7,158 Lease liabilities - principal 501 490 960 7,131 43,758 52,840 - interest 789 782 1,543 11,404 22,716 37,234

320,153 24,392 5,632 84,680 66,474 501,331

87 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(d) Liquidity risk (continued)

The table below analyses the Group’s and the Company’s non-derivative financial liabilities into relevant maturity groupings based on remaining periods at the reporting date to the maturity dates. The amounts disclosed in the table are contractual undiscounted cash flows: (continued)

On Between Between Between demand/Less 3 to 6 6 months 1 year Beyond than 3 months months to 1 year to 5 years 5 years Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 31 December 2018:

Group Trade payables and other liabilities 160,870 11,380 2,084 0 0 174,334 Borrowings - principal 211,113 10,351 0 62,095 0 283,559 - interest 1,043 740 1,474 8,510 0 11,767 Lease liabilities - principal 652 661 1,363 9,304 46,375 58,355 - interest 862 852 1,677 12,123 25,531 41,045

374,540 23,984 6,598 92,032 71,906 569,060

Company Trade payables and other liabilities 136,008 10,805 603 0 0 147,416 Amount due to subsidiaries 26,144 0 0 0 0 26,144 Borrowings - principal 196,109 10,000 0 62,095 0 268,204 - interest 957 737 1,474 8,510 0 11,678 Lease liabilities - principal 417 423 881 7,054 45,063 53,838 - interest 803 797 1,575 11,684 25,185 40,044

360,438 22,762 4,533 89,343 70,248 547,324

(e) Capital management

The Group’s and the Company’s objectives when managing capital are to safeguard the Group’s and the Company’s ability to continue as a going concern while seeking to maximise benefits to shareholders and other stakeholders. Capital as defined by management is equity as shown in the statement of financial position plus net debt. 88 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

(e) Capital management (continued)

The Group and the Company actively and regularly review and manage the capital structure to ensure optimal capital structure and shareholder returns, taking into consideration the future capital requirements of the Group and the Company and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditure and projected strategic investment opportunities. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. There has been no change in the Group’s and the Company’s approach to capital management during the financial year. The Group and the Company are not subjected to any externally imposed capital requirements.

The Group monitors capital on the basis of the Group’s consolidated gearing ratio and consolidated interest cover. The gearing ratio is calculated as net debt divided by total equity. Net debt is calculated as total borrowings less bank balances and other liquid funds. Interest cover is calculated as underlying business performance divided by net financing charges. The ratios are monitored by corporate management.

The gearing ratios as at the reporting date were as follows:

2019 2018

Gearing ratio 0.8 0.8 Interest cover (times) nm* 3.1

*nm – not meaningful

(f) Fair value of financial instruments

Fair value recognised in the statement of financial position is measured using the following fair value hierarchy:

• Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities • Level 2 - Inputs other than quoted price included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) • Level 3 - Inputs for the asset or liability that are not based on observable market data (that is, observable inputs)

The fair value of unquoted investment, which is classified as equity investment measured at fair value through other comprehensive income, (2018: available-for-sale) is measured based on the present value of future expected cash flows. The inputs used are categorised as Level 3, taking into consideration the terms of the shares and the call and put option which is exercisable anytime giving 12 months’ notice at the initial cost of investment.

(g) Price risk

The Group and the Company are not exposed to significant equity securities price risk in respect of unquoted investments held by the Group and the Company in Mercedes-Benz Malaysia Sdn. Bhd. (“MBM”) which has been classified in the statement of financial position as fair value through other comprehensive income (2018: available-for-sale) as set out in Note 13. 89 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENT

Estimates and judgements used in preparing the financial statements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant effect on the carrying amounts of assets and liabilities are discussed below:

(a) Write-down of inventories

The Group and the Company review the inventories periodically and write-down the inventories based on an assessment of their net realisable values. Inventories are written-down when events or changes in circumstances such as the timing of the launch of new models, the general economic conditions of the country and the change in consumer’s demand indicate that the carrying amounts exceed the net realisable values. The identification of the write-down requires the use of estimates. Changes in the estimates would result in a revision to the valuation of the inventories.

For new motor vehicles, the net realisable value is determined based on prevailing market conditions and expected promotional costs to be incurred on these vehicles which will be sold in the following calendar year.

For used motor vehicles, the net realisable value is based information gathered from third party e-commerce websites that sell used cars and made adjustments, where necessary, depending on the number of cars held and prevailing market conditions.

Refer to Note 16 to the financial statements for further details.

(b) Deferred tax assets

Recognition of the deferred tax assets, which principally relate to tax losses and provisions, depend on the management’s expectation of future taxable profits that will be available against which these tax benefits can be utilised. The outcome of their actual utilisation may be different.

(c) Impairment of intangible assets

Goodwill and dealership rights (which have an indefinite useful life) are tested for impairment annually. This requires an estimation of value-in-use of cash generating units to which goodwill and dealership rights are allocated.

When value-in-use calculation is undertaken, management is required to estimate the expected future cash flows from the asset or cash generating unit and choose a suitable discount rate in order to calculate the present value of the cash flows. Further details of the carrying value, the key assumptions applied in the impairment assessment of goodwill and dealership rights and sensitivity analysis to changes in the assumptions are given in Note 10 to the financial statements.

(d) Impairment of non-financial assets

Non-current assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset exceeds its recoverable amount. During the financial year, management undertook an impairment assessment and recorded an impairment loss of RM27,026,000 as a result of the shortfall arising from the lower recoverable amount of the Sungai Besi site (classified as a ROU asset) as compared to the carrying amount as at 31 December 2019.

Refer to Note 15 to the financial statements for further details. 90 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENT (CONTINUED)

(e) Leases

Liabilities and the corresponding ROU assets arising from leases are initially measured at the present value of the lease payments at the commencement date, discounted using the interest rates implicit in the leases, or if that rate cannot be readily determinable, the Group and the Company may use the incremental borrowing rate. In this instance, the Group and the Company have determined the incremental borrowing rate as the discount rate with reference to the rate of interest that the Group and the Company would have to pay to borrow, over similar terms as that of the lease, the funds necessary to obtain an asset of a similar value to the ROU assets.

Lease payments to be made during the lease term will be included in the measurement of a lease liability. The Group and the Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any period covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

The Group and the Company have the option, under some of the leases to lease the assets for additional terms. The Group and the Company applies judgement in evaluating whether it is reasonably certain to exercise the option to renew. In this regard, the Group and the Company considers all relevant factors that create an economic incentive for it to exercise the renewal. After the commencement date, the Group and the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew. The assessment of whether the Group and the Company is reasonably certain to exercise the options impacts the lease terms, which significantly affects the amount of lease liabilities and ROU assets recognised.

4 REVENUE

Revenue of the Group and of the Company comprise sale of motor vehicles, spare parts and servicing of motor vehicles, excluding goods and services taxes, excise duties and net of discounts.

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

Sale of motor vehicles and spare parts - point in time 1,072,684 1,452,377 815,973 1,072,100 Servicing of motor vehicles – over time 70,631 60,919 52,443 45,858

1,143,315 1,513,296 868,416 1,117,958

5 DIRECTORS’ REMUNERATION

The emoluments received by Directors of the Company during the financial year are as follows:

Group and Company 2019 2018 RM’000 RM’000

Non-Executive Directors (Note 6): - Fees 295 314 91 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

6 (LOSS)/PROFIT BEFORE TAX

(a) (Loss)/profit before tax is arrived at after charging:

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Restated Restated

Defined contribution pension plan 9,431 10,395 7,674 8,241 Salaries, bonuses and other employee benefits costs 69,733 80,733 57,257 65,050 Write-down of inventories, net (Notes 16 & 26) 8,670 0 6,556 2,522 Costs of inventories/materials/ consumables 975,136 1,330,179 742,462 980,969 Depreciation of property, plant and equipment (Notes 11 & 26) 9,506 8,168 7,971 6,861 Amortisation of ROU assets (Notes 15 & 26) 5,216 5,406 4,209 4,461 Leasing of equipment 2,168 2,083 1,512 1,471 Directors’ remuneration (Note 5) 295 314 295 314 Auditors’ remuneration @ 373 373 284 284 Rent for land and buildings 716 430 473 69 Write-offs of plant and equipment (Notes 11 & 26) 2,883 24 2,826 24 Impairment loss on ROU assets (Notes 15 & 26) 27,026 0 27,026 0 Finance cost on borrowings: - interest expenses (Note 26) 12,280 8,954 12,015 8,792 - amortisation of transaction cost (Note 26) 108 135 108 135 - accretion of lease liabilities (Note 23 & 26) 4,389 3,472 4,015 3,208

16,777 12,561 16,138 12,135 Group service fees (Note 28) 425 1,811 425 1,811 Group internal audit fees (Note 28) 309 324 309 324 Demonstration car expenses 27,415 20,936 20,221 15,535 Foreign exchange loss – net 0 5 0 0 Provision for liabilities and charges (Notes 20 & 26) 163 106 156 98 92 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

6 (LOSS)/PROFIT BEFORE TAX (CONTINUED)

(a) (Loss)/profit before tax is arrived at after charging (continued):

@ The analysis of remuneration paid or payable to PricewaterhouseCoopers PLT and its member firms are:

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

PricewaterhouseCoopers PLT

Statutory audit 349 349 260 260 Fees for other services: - non-statutory audit related services 24 24 24 24

373 373 284 284 Member firms of PricewaterhouseCoopers PLT

- tax compliance and other advisory services 96 187 71 82

Total remuneration 469 560 355 366

(b) And crediting:

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

Gain on disposal of plant and equipment (Note 26) 73 2 2 1 Interest income from (Note 26): - subsidiaries 0 0 1,759 1,684 - deposits with licensed banks 587 841 587 841 Insurance agency commissions 4,675 4,565 4,419 4,301 Hire-purchase commissions 2,289 3,074 1,746 2,270 Management fee income from subsidiaries (Note 28) 0 0 7 7 Rental income from: - subsidiaries (Note 28) 0 0 566 566 - external parties 8 184 8 184 Reversal of: - write-down of inventories, net (Notes 16 & 26) 0 76 0 0 - provisions for liabilities and charges (Notes 20 & 26) 0 560 0 541 - impairment on trade receivables, net (Notes 17 & 26) 1,441 627 1,141 574 Foreign exchange gain – net 0 0 0 7 Modifications of lease term 0 157 0 0 Compensation on insurance claim 0 12,910 0 0 93 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

7 INCOME TAX CREDIT/(EXPENSE)

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Restated Restated

Current tax 340 (4,575) 908 (2,875) Deferred tax (Note 14) 7,036 (946) 5,951 2,145

7,376 (5,521) 6,859 (730)

Current tax: - tax expense for the financial year (536) (5,161) (41) (3,070) - over accrual in prior financial years (net) 876 586 949 195

340 (4,575) 908 (2,875) Deferred tax: - origination and reversal of temporary differences (Note 14) 7,036 (946) 5,951 2,145

Income tax credit/(expense) 7,376 (5,521) 6,859 (730)

The effective income tax rates of the Group and of the Company differ from the prevailing statutory income tax rate of 24% (2018: 24%) due to the following:

Group Company 2019 2018 2019 2018 % % % % Restated Restated

Statutory Malaysian income tax rate (24) 24 (24) 24 Tax effects of: - expenses not deductible for income tax purposes 14 18 15 41 - over accrual in prior financial years (1) (4) (1) (4)

Average effective income tax rate (11) 38 (10) 13

8 DIVIDENDS

The Directors do not recommend payment of any dividend for the financial year ended 31 December 2019. 94 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

9 (LOSS)/EARNINGS PER SHARE

Basic (loss)/earnings per share is calculated by dividing the Group’s (loss)/profit attributable to shareholders of the Company for the financial year by the weighted average number of ordinary shares in issue during the financial year.

Group 2019 2018 Restated

Net (loss)/profit for the financial year attributable to shareholders of the Company (RM’000) (39,203) 20,353 Weighted average number of ordinary shares in issue (’000) 100,745 100,745

Basic (loss)/earnings per share (sen) (38.91) 20.20

No diluted EPS is computed for the Group as there are no dilutive potential ordinary shares in issue.

10 INTANGIBLE ASSETS

Group Goodwill on Dealership acquisition rights Total RM’000 RM’000 RM’000

At 1 January/31 December 2019 4,501 5,341 9,842

At 1 January/31 December 2018 4,501 5,341 9,842

The goodwill of RM4,501,000 represents the expected synergies and economies of scales from combining operations of Cycle & Carriage Bintang (Northern) Sdn. Bhd. (“CCBN”) with the Group. The dealership rights also relates to the CCBN’s operations.

Impairment test on intangible assets

Intangible assets relating to CCBN have been allocated to the cash generating unit (“CGU”) of CCBN. Management has performed an impairment review of the carrying amount of the intangible assets at 31 December 2019 and concluded that the recoverable amount of the CCBN CGU exceeds the carrying value by RM1.2 million. Accordingly, no impairment has been recognised for the current financial year.

The impairment review of intangible assets was made by comparing the carrying value of the CGU of CCBN, including intangible assets, with the recoverable amount of the CGU based on the value-in-use calculation. This calculation uses cash flow projections based on financial budget approved by the Board of Directors covering a five-year period. Cash flows beyond the 5-year budget (2018: 5-year budget) period are extrapolated using the following assumptions:

- Gross margin of 10% (2018: 9%) based on business plan; - Long-term growth rate of 2% (2018: 3%) which takes into consideration the long-term growth rates of the automotive industry; - Pre-tax discount rate of 8% (2018: 9%) which reflects business specific risks relating to the relevant industries; and - The Group will continue to have the right to distribute Mercedes-Benz motor vehicles for the duration of the cash flow projection period. 95 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

10 INTANGIBLE ASSETS (CONTINUED)

Sensitivity to changes in assumptions

The calculation of value-in-use for the CGU based on the discounted cash flow projections is sensitive to the assumptions set out above. If the gross margin is reduced by 0.3%, long-term growth rate is reduced by 1% and the discount rate is increased to 9%, the recoverable amount will decrease by RM19.6 million, RM5.9 million and RM6.8 million respectively.

11 PROPERTY, PLANT AND EQUIPMENT

Motor Plant vehicles, Construction Freehold Leasehold and equipment work-in- land land Buildings machinery and fixtures progress Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group

2019

Net book value at 1 January - as previously reported 23,846 69,437 46,454 6,360 11,772 10,692 168,561 Effects of adoption of MFRS 16 (Note 32) 0 (69,437) 0 0 0 0 (69,437)

Net book value at 1 January, as restated 23,846 0 46,454 6,360 11,772 10,692 99,124 Additions 0 0 7,374 1,843 6,850 19,825 35,892 Reclassification 0 0 2,130 847 258 (3,235) 0 Write-offs 0 0 (40) (6) (34) (2,803) (2,883) Depreciation charge (Notes 6 & 26) 0 0 (3,154) (2,130) (4,222) 0 (9,506)

Net book value at 31 December 23,846 0 52,764 6,914 14,624 24,479 122,627

At cost 23,846 0 91,485 19,696 48,906 24,479 208,412 Accumulated depreciation 0 0 (35,929) (12,782) (34,282) 0 (82,993) Accumulated impairment losses 0 0 (2,792) 0 0 0 (2,792)

Net book value at 31 December 23,846 0 52,764 6,914 14,624 24,479 122,627 96 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

11 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Motor Plant vehicles, Construction Freehold Leasehold and equipment work-in- land land Buildings machinery and fixtures progress Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group

2018

Net book value at 1 January - as previously reported 23,846 71,038 45,746 4,720 9,999 3,235 158,584 Effects of adoption of MFRS 16 (Note 32) 0 (71,038) 0 0 0 0 (71,038)

Net book value at 1 January, as restated 23,846 0 45,746 4,720 9,999 3,235 87,546 Additions 0 0 3,378 3,318 4,923 8,155 19,774 Reclassification 0 0 403 46 249 (698) 0 Disposals 0 0 0 (4) 0 0 (4) Write-offs 0 0 0 (5) (19) 0 (24) Depreciation charge (Notes 6 & 26) 0 0 (3,073) (1,715) (3,380) 0 (8,168)

Net book value at 31 December 23,846 0 46,454 6,360 11,772 10,692 99,124

At cost 23,846 0 82,021 17,012 41,833 10,692 175,404 Accumulated depreciation 0 0 (32,775) (10,652) (30,061) 0 (73,488) Accumulated impairment losses 0 0 (2,792) 0 0 0 (2,792)

Net book value at 31 December 23,846 0 46,454 6,360 11,772 10,692 99,124 97 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

11 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Motor Plant vehicles, Construction Freehold Leasehold and equipment work-in- land land Buildings machinery and fixtures progress Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Company

2019

Net book value at 1 January - as previously reported 23,559 71,292 41,755 4,472 9,951 10,383 161,412 Effects of adoption of MFRS 16 (Note 32) 0 (71,292) 0 0 0 0 (71,292)

Net book value at 1 January, as restated 23,559 0 41,755 4,472 9,951 10,383 90,120 Additions 0 0 7,374 1,445 6,308 18,986 34,113 Reclassification 0 0 2,130 0 0 (2,130) 0 Write-offs 0 0 (36) (5) (29) (2,756) (2,826) Depreciation charge (Notes 6 & 26) 0 0 (2,883) (1,463) (3,625) 0 (7,971)

Net book value at 31 December 23,559 0 48,340 4,449 12,605 24,483 113,436

At cost 23,929 0 83,664 14,282 37,965 24,483 184,323 Accumulated depreciation 0 0 (31,987) (9,833) (25,360) 0 (67,180) Accumulated impairment losses (370) 0 (3,337) 0 0 0 (3,707)

Net book value at 31 December 23,559 0 48,340 4,449 12,605 24,483 113,436 98 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

11 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Motor Plant vehicles, Construction Freehold Leasehold and equipment work-in- land land Buildings machinery and fixtures progress Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Company

2018

Net book value at 1 January - as previously reported 23,559 72,893 41,177 3,024 8,482 2,537 151,672 Effects of adoption of MFRS 16 (Note 32) 0 (72,893) 0 0 0 0 (72,893)

Net book value at 1 January, as restated 23,559 0 41,177 3,024 8,482 2,537 78,779 Additions 0 0 3,378 2,636 4,366 7,846 18,226 Write-offs 0 0 0 (6) (18) 0 (24) Depreciation charge (Notes 6 & 26) 0 0 (2,800) (1,182) (2,879) 0 (6,861)

Net book value at 31 December 23,559 0 41,755 4,472 9,951 10,383 90,120

At cost 23,929 0 74,196 12,923 35,773 10,383 157,204 Accumulated depreciation 0 0 (29,104) (8,451) (25,822) 0 (63,377) Accumulated impairment losses (370) 0 (3,337) 0 0 0 (3,707)

Net book value at 31 December 23,559 0 41,755 4,472 9,951 10,383 90,120

12 INVESTMENTS IN SUBSIDIARIES

Company 2019 2018 RM’000 RM’000

Unquoted investments, at cost 66,185 66,185 Less: Impairment losses (18,481) (18,481)

47,704 47,704

A list of subsidiaries is set out in Note 27. 99 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

13 DISCONTINUED OPERATION - EQUITY INVESTMENT MEASURED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

The Company had a 49% interest (Class B shares) in Mercedes-Benz Malaysia Sdn Bhd (“MBM”) while Daimler AG (“DAG”) had a 51% interest (Class A shares), prior to the derecognition of the investment on 11 December 2019. MBM is not considered an associate of the Group and of the Company as the Group’s and the Company’s interest in the Class B shares do not carry any voting rights nor any right to share in the equity interest. The Class B shares were classified as equity investment measured at fair value through other comprehensive income as at 1 January 2018, upon adoption of MFRS 9 “Financial Instruments”.

On 30 November 2018, the Company received a letter from DAG exercising their call option, requiring the Company to sell its Class B shares for a consideration of RM66,003,000 (“Disposal”), which is the cost of investment. Accordingly, this investment was classified as asset held for sale as at 31 December 2018. The Company has also classified the investment in MBM as a discontinued operation as the Company will cease to be entitled to further dividend income from MBM, upon the completion of the Disposal.

On 25 November 2019, the Company entered into a share sale agreement with DAG in relation to the Disposal, which was completed on 11 December 2019. Subsequently, the Company has de-recognised the equity investment on that date. There is no gain or loss arising from the Disposal.

The effects of the discontinued operation to the Statements of Comprehensive Income and Statements of Cash Flows of the Group and of the Company are as follows:

Statements of Comprehensive Income

During the financial year, the Group and the Company recognised dividend income of RM22.4 million (2018: RM11.2 million) from the MBM investment.

Statements of Cash Flows

- The dividend received during the financial year amounting to RM11.2 million (2018: RM11.2 million) has been included in the investing activities in the Statements of Cash Flows of the Group and of the Company. - The remaining dividend receivable of RM11.2 million (2018: nil) has been included in the operating activities of the Statements of Cash Flows of the Group and of the Company. Refer to Note 17 to the financial statements for further details. - The proceed of the sale of the MBM investment of RM66,003,000 (2018: nil) has been included in the investing activities in the Statements of Cash Flows of the Group and of the Company. 100 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

14 DEFERRED TAXATION

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 the deferred taxes relate to the same tax authority. The following amounts, determined after appropriate offsetting, are shown in the statements of financial position:

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

At 1 January, as previously reported 13,394 14,727 11,634 9,903 Effects of adoption of MFRS 16 (Note 32) 1,664 1,277 1,511 1,097

At 1 January, as restated 15,058 16,004 13,145 11,000

Credited/(charged) to the profit or loss (Note 7): - property, plant and equipment 1,339 (146) 1,236 (63) - provisions and payables 2,853 1,270 1,871 2,208 - unutilised tax losses and capital allowances 2,844 (2,070) 2,844 0

7,036 (946) 5,951 2,145

At 31 December 22,094 15,058 19,096 13,145

Subject to income tax:

2019 2018 RM’000 RM’000

Group

Deferred tax assets (before offsetting) Provisions and payables 20,391 17,538 Unutilised tax losses 2,844 0 Property, plant and equipment 303 0

23,538 17,538 Offsetting (1,444) (2,480)

Deferred tax assets (after offsetting) 22,094 15,058

Company

Deferred tax assets (before offsetting) Provisions and payables 16,003 14,132 Unutilised tax losses 2,844 0 Property, plant and equipment 249 0

19,096 14,132 Offsetting 0 (987)

Deferred tax assets (after offsetting) 19,096 13,145 101 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

14 DEFERRED TAXATION (CONTINUED)

2019 2018 RM’000 RM’000

Group

Deferred tax liabilities (before offsetting) Intangible assets 1,335 1,335 Property, plant and equipment 109 1,145

1,444 2,480 Offsetting (1,444) (2,480)

Deferred tax liabilities (after offsetting) 0 0

Company

Deferred tax liabilities (before offsetting) Property, plant and equipment 0 987

0 987 Offsetting 0 (987)

Deferred tax liabilities (after offsetting) 0 0

Subject to agreement with the Inland Revenue Board, the amount of deductible temporary differences and unutilised tax losses for which no deferred tax assets have been recognised in the statements of financial position are as follows:

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

Deductible temporary differences 1,011 1,011 0 0 Unutilised tax losses 6,260 6,260 0 0

7,271 7,271 0 0

Pursuant to the Budget 2019 announcement by the Malaysian Government, with effect from Year of Assessment (“YA”) 2019, the unutilised tax losses brought forward from YA2018 shall be allowed to be utilised for another seven consecutive YAs, up to YA2025. Any amount which remains unutilised by YA2025 shall be disregarded from YA2026 onwards. The deductible temporary differences are not affected by the change in the tax regulations and have no expiry date. 102 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

15 RIGHT-OF-USE ASSETS

Leasehold land Properties Total RM’000 RM’000 RM’000

Group

2019

At 1 January, upon the adoption of MFRS 16 (Note 32) 69,437 53,200 122,637 Additions 1,256 3,020 4,276 Amortisation charge (Note 6) (1,551) (3,665) (5,216) Impairment loss (Note 6) (27,026) 0 (27,026)

Net book value at 31 December 42,116 52,555 94,671

2018

At 1 January, upon the adoption of MFRS 16 (Note 32) 71,038 56,560 127,598 Additions 0 1,410 1,410 Modification of lease terms 0 (965) (965) Amortisation charge (Note 6) (1,601) (3,805) (5,406)

Net book value at 31 December 69,437 53,200 122,637

Company

2019

At 1 January, upon the adoption of MFRS 16 (Note 32) 71,292 49,192 120,484 Additions 1,256 69 1,325 Amortisation charge (Note 6) (1,551) (2,658) (4,209) Impairment loss (Note 6) (27,026) 0 (27,026)

Net book value at 31 December 43,971 46,603 90,574

2018

At 1 January, upon the adoption of MFRS 16 (Note 32) 72,893 50,642 123,535 Additions 0 1,410 1,410 Amortisation charge (Note 6) (1,601) (2,860) (4,461)

Net book value at 31 December 71,292 49,192 120,484 103 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

15 RIGHT-OF-USE ASSETS (CONTINUED)

The statements of comprehensive income of the Group and of the Company include the following amounts relating to leases:

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

Interest expense (included in finance cost) 4,389 3,472 4,015 3,208 Expenses relating to short-term leases (included in cost of goods sold and selling and distribution expenses) 2,575 2,217 1,740 1,306 Expenses relating to low-value assets that are not shown above as short-term leases (included in selling and distribution expenses) 309 296 245 234

The total cash outflows for leases during the financial year 9,260 8,126 7,067 5,981

Impairment of leasehold land classified as right-of-use asset

Following a business review carried out by the Group during the financial year, the Group will not proceed with the planned construction of a Sales, Service, Spare parts facility (“3-S Centre”) on the Sungai Besi site (classified as leasehold land), and will continue to hold the property for future utilisation given the current soft property market. The decision was reached having considered the softening demand in the premium luxury segment of the market, broader economic outlook and new decisions and delays relating to the integrated transit-oriented Bandar Malaysia development project.

An independent valuation was conducted by a registered valuer, resulting in an impairment loss of RM27.0 million recognised during the financial year, based on an “as-is” market value of the Sungai Besi site of RM33.0 million. The market value was derived using the comparison method whereby the external valuer made adjustments to the comparable transactions, taking into consideration certain factors such as the size and location of the site. The market value of the Sungai Besi site is categorised within Level 3 of the fair value hierarchy. 104 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

16 INVENTORIES

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

At cost Motor vehicles 203 49,064 99 37,238 Spare parts 4,664 30,026 3,898 24,084

4,867 79,090 3,997 61,322

At net realisable value Motor vehicles 325,919 255,296 245,111 186,925 Spare parts 29,309 1,524 23,634 1,168

355,228 256,820 268,745 188,093

360,095 335,910 272,742 249,415

Inventories where the realisable values are expected to be below the carrying amounts are written-down. During the financial year, the Group has written-down a net amount of inventories of RM8,670,000 (2018: write-back of RM76,000) while the Company has written-down a net amount of inventories of RM6,556,000 (2018: RM2,522,000).

105 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

17 TRADE AND OTHER RECEIVABLES

Group Company 2019 2018 1.1.2018 2019 2018 1.1.2018 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Trade receivables Trade receivables - third parties 62,785 97,786 72,857 49,327 73,699 57,821 Less: Accumulated impairment (1,867) (2,549) (4,188) (237) (683) (2,002)

60,918 95,237 68,669 49,090 73,016 55,819 Warranty claims receivables 17,153 25,168 18,991 13,172 21,762 14,717 Less: Accumulated impairment (1,794) (2,553) (1,547) (1,235) (1,930) (1,185)

15,359 22,615 17,444 11,937 19,832 13,532

76,277 117,852 86,113 61,027 92,848 69,351 Deposits 2,762 2,516 2,203 2,220 2,062 1,784 Others 17,261 8,426 5,306 14,746 7,272 6,200 Amounts due from subsidiaries 0 0 0 56,257 55,761 69,781 Less: Accumulated impairment 0 0 0 (2,074) (2,074) (2,074)

0 0 0 54,183 53,687 67,707

96,300 128,794 93,622 132,176 155,869 145,042

Credit terms of trade receivables range from 30 to 90 days (2018: 30 to 90 days).

Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial re-organisation and default or delinquency in payment are considered indicators that the debtor is impaired and an allowance for impairment is made based on the estimated irrecoverable amount determined by reference to past default experience.

The Group applies the simplified approach to measure expected credit loss that is a lifetime expected loss allowance for trade receivables. To measure the expected credit loss, trade receivables have been grouped based on shared credit risk characteristics and the days past due. As for warranty claims receivables, the expected credit loss is measured based on specific rates applied to unapproved warranty claims and unaudited claims as at the reporting date.

Concentrations of credit risk with respect to trade receivables are limited as the more significant debts are partially backed up by bank guarantees and payment track records of the customers. The Group’s and the Company’s impairment loss is based on the individual customer basis, based on estimated irrecoverable amount. Management believes that no additional credit risk beyond amounts impaired for collection losses is inherent in the Group’s and the Company’s trade receivables. Other than the amounts which have been impaired, the remaining balance of the Group’s and the Company’s trade receivables (including warranty claims receivable) arise from financiers in respect of finance provided to end customers, sales to reputable public listed companies and government or semi government institutions and the principal, and therefore the likelihood of default by these customers is minimised. 106 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

17 TRADE AND OTHER RECEIVABLES (CONTINUED)

The expected loss rates are based on the historical payment profiles of sales and the corresponding historical credit losses. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors and industry trends affecting the ability of the customers to settle the receivables.

The gross carrying amounts of trade receivables of the Group and of the Company as at the reporting date amounted to RM79,938,000 and RM62,499,000 (2018: RM122,954,000 and RM95,461,000) respectively and represent the Group’s and the Company’s maximum exposure to credit risk. The expected credit loss of the Group and of the Company as at the reporting date amounted to RM3,661,000 and RM1,472,000 (2018: RM5,102,000 and RM2,613,000) respectively and represents the Group’s and Company’s lifetime expected loss allowance for trade receivables and individual assessment for credit-impaired debtors. The net trade receivables balance is deemed to be performing.

Included in the other receivables balance is an amount receivable from the immediate holding company of nil (2018: RM18,000) for the transactions as disclosed in Note 28 to the financial statements and dividend receivable from MBM investment of RM11,228,000 (2018: nil), of which further details are disclosed in Note 13 to the financial statements.

The amounts due from subsidiaries are unsecured, bear interest at 3.8% (2018: 3.8%) per annum and are repayable upon demand except for interest-free portion amounting to RM1,944,000 (2018: RM1,448,000). Amounts due from subsidiaries are assessed on an individual basis for ECL measurement, as the credit risk information can be obtained and is monitored based on each individual balance. The amounts due from subsidiaries are deemed to be performing as these subsidiaries are able to settle the balances with their liquid assets.

Movements in the impairment of trade receivables:

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

At 1 January 5,102 5,735 2,613 3,187 Impairment (Note 6) 1,816 3,369 1,463 3,091 Reversal of impairment (Note 6) (3,257) (3,996) (2,604) (3,665) Written-off 0 (6) 0 0

At 31 December 3,661 5,102 1,472 2,613

The other classes within trade and other receivables do not contain impaired assets.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. Where necessary, the Group and the Company would request for bank guarantees as collaterals. 107 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

18 CASH AND CASH EQUIVALENTS

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

Deposits with licensed banks 20,347 36,048 20,347 36,048 Cash and bank balances 17,778 11,664 8,529 2,928

38,125 47,712 28,876 38,976

Cash and cash equivalents are denominated in Ringgit Malaysia.

The weighted average annual interest rate that was effective as at the reporting date is as follows:

Group and Company 2019 2018 % % per annum per annum

Deposits with licensed banks 2.85 3.00

Deposits with licensed banks of the Group and of the Company have an average maturity period of 1 day (2018: 1 day). Bank balances are deposits held at call with banks and earn no interest.

19 BORROWINGS

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

Non-current

Term loans (unsecured) 62,203 62,095 62,203 62,095

Current

Bankers acceptance (unsecured) 168,000 140,700 168,000 140,700 Finance lease liabilities (secured) 9,746 27,178 7,267 17,973 Revolving hire-purchase floorplan (secured) 0 53,586 0 47,436

177,746 221,464 175,267 206,109

239,949 283,559 237,470 268,204

The above borrowings are denominated in Ringgit Malaysia and carry an effective interest rate of 4.3% (2018: 3.7%) per annum.

The term loans have a maturity period of three (2018: four) years. 108 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

19 BORROWINGS (CONTINUED)

Finance lease liabilities

Present Future value of minimum minimum lease lease payments Interest payments RM’000 RM’000 RM’000

At 31.12.2019

Group Less than one year 9,812 (66) 9,746

Company Less than one year 7,321 (54) 7,267

At 31.12.2018

Group Less than one year 27,424 (246) 27,178

Company Less than one year 18,133 (160) 17,973

Included in the Group’s and the Company’s finance lease liabilities are inventories (i.e motor vehicles) purchased under finance leases with a tenure of 4 months from the date of purchase during the financial year. The title of the inventories remains with the Group and the Company during the lease period. 109 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

19 BORROWINGS (CONTINUED)

Finance Revolving Bankers’ lease hire-purchase Term loans acceptance liabilities floorplan Total RM’000 RM’000 RM’000 RM’000 RM’000

Group 2019 As at 1 January 2019 62,095 140,700 27,178 53,586 283,559 Drawdown during the financial year 0 886,800 52,344 0 939,144 Repayment during the financial year 0 (859,500) (69,776) (53,586) (982,862) Finance cost (Note 6) 3,588 7,942 858 0 12,388 Finance cost paid (3,425) (7,773) (897) (21) (12,116) Others (55) (169) 39 21 (164)

As at 31 December 2019 62,203 168,000 9,746 0 239,949

2018 As at 1 January 2018 61,960 187,000 0 0 248,960 Drawdown during the financial year 0 912,900 70,358 53,586 1,036,844 Repayment during the financial year 0 (959,200) (43,273) 0 (1,002,473) Finance cost (Note 6) 3,151 5,285 629 24 9,089 Finance cost paid (2,977) (5,314) (535) 0 (8,826) Others (39) 29 (1) (24) (35)

As at 31 December 2018 62,095 140,700 27,178 53,586 283,559

Company 2019 As at 1 January 2019 62,095 140,700 17,973 47,436 268,204 Drawdown during the financial year 0 886,800 37,554 0 924,354 Repayment during the financial year 0 (859,500) (48,266) (47,436) (955,202) Finance cost 3,588 7,942 593 0 12,123 Finance cost paid (3,425) (7,773) (620) (21) (11,839) Others (55) (169) 33 21 (170)

As at 31 December 2019 62,203 168,000 7,267 0 237,470

2018 As at 1 January 2018 61,960 187,000 0 0 248,960 Drawdown during the financial year 0 912,900 51,247 47,436 1,011,583 Repayment during the financial year 0 (959,200) (33,339) 0 (992,539) Finance cost 3,151 5,285 468 23 8,927 Finance cost paid (2,977) (5,314) (404) 0 (8,695) Others (39) 29 1 (23) (32)

As at 31 December 2018 62,095 140,700 17,973 47,436 268,204 110 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

20 PROVISIONS FOR LIABILITIES AND CHARGES

Provision for Service reinstatement and cost warranty Claims Total RM’000 RM’000 RM’000 RM’000

Group

At 1 January 2019, as previously reported 0 0 39 39 Effects of adoption of MFRS 16 (Note 32) 1,778 0 0 1,778

At 1 January 2019, as restated 1,778 0 39 1,817 Accretion of provision during the financial year 112 0 0 112 Additional provision during the financial year 0 0 51 51

At 31 December 2019 1,890 0 90 1,980

At 1 January 2018, as previously reported 0 19 850 869 Effects of adoption of MFRS 16 (Note 32) 1,672 0 0 1,672

At 1 January 2018, as restated 1,672 19 850 2,541 Accretion of provision during the financialyear 106 0 0 106 Unused amounts reversed (Note 6) 0 (19) (541) (560) Utilised 0 0 (270) (270)

At 31 December 2018 1,778 0 39 1,817

Company

At 1 January 2019, as previously Reported 0 0 39 39 Effects of adoption of MFRS 16 (Note 32) 1,650 0 0 1,650

At 1 January 2019, as restated 1,650 0 39 1,689 Accretion of provision during the financial year 105 0 0 105 Additional provision during the financial year 0 0 51 51

At 31 December 2019 1,755 0 90 1,845 111 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

20 PROVISIONS FOR LIABILITIES AND CHARGES (CONTINUED)

Provision for Service reinstatement and cost warranty Claims Total RM’000 RM’000 RM’000 RM’000

Company (continued)

At 1 January 2018, as previously reported 0 0 850 850 Effects of adoption of MFRS 16 (Note 32) 1,552 0 0 1,552

At 1 January 2018, as restated 1,552 0 850 2,402 Accretion of provision during the financialyear 98 0 0 98 Unused amount reversed 0 0 (541) (541) Utilised 0 0 (270) (270)

At 31 December 2018 1,650 0 39 1,689

Provision for reinstatement cost

The amount is recognised due to the Group’s and the Company’s present obligations to reinstate the lease properties to their initial conditions upon termination of the lease agreements.

Claims

The amounts represent a provision for certain legal claims brought against the Group and the Company arising from the ordinary course of business. The Directors are of the view that the outcome of these legal claims will not give rise to any significant loss beyond the amounts already provided as at 31 December 2019.

21 TRADE PAYABLES AND OTHER LIABILITIES

2019 2018 RM’000 RM’000

Group

Trade payables 80,289 69,485 Other liabilities and accruals 96,741 104,829

177,030 174,314

Company

Trade payables 63,363 55,123 Other liabilities and accruals 77,129 92,293

140,492 147,416 112 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

21 TRADE PAYABLES AND OTHER LIABILITIES (CONTINUED)

Trade payables and other liabilities are denominated in the following currencies:

2019 2018 RM’000 RM’000

Group Currency RM 176,488 173,981 SGD 542 333

177,030 174,314

Company Currency RM 139,950 147,083 SGD 542 333

140,492 147,416

Credit terms of trade payables granted to the Group and the Company vary from 30 to 90 days.

Included in other liabilities above are the following:

(i) interest-free amounts payable to Mercedes-Benz Services Malaysia Sdn. Bhd. (“MBSM”) of RM54,602,000 (2018: RM67,558,000) and RM48,423,000 (2018: RM62,084,000) for the Group and the Company respectively pertaining to a revolving hire-purchase floorplan facility. A pre-determined interest-free period has been granted by MBSM. The unpaid amount beyond the interest-free period has been classified as borrowings in Note 19 to the financial statements.

(ii) amount payable to the immediate holding company of RM542,000 (2018: RM259,000) for transactions as disclosed in Note 28 to the financial statements.

22 CONTRACT LIABILITIES

The amounts represent monies collected from customers for performance obligations which have yet to be fulfilled by the Group and the Company.

Customer deposits relate to purchases of vehicles which have yet to be delivered by the Group and the Company at the reporting date. The Group and the Company apply the practical expedient in MFRS 15 of not disclosing the aggregrate amount of the revenue expected to be recognised in the future as the performance obligation is part of a contract that have an original expected duration of less than one year.

The contract liabilities at the beginning of the financial year have been recognised as revenue during the financial year. 113 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

23 LEASE LIABILITIES

2019 2018 RM’000 RM’000 Restated

Group At 1 January, upon adoption of MFRS 16 (Note 32) 58,355 60,208 Additions 3,020 1,410 Modification to lease terms 0 (1,122) Lease payments (6,376) (5,613) Interest expense (Note 6) 4,389 3,472

Balance at 31 December 59,388 58,355

Non-current 56,376 55,679 Current 3,012 2,676

59,388 58,355

Company At 1 January, upon adoption of MFRS 16 (Note 32) 53,838 53,661 Additions 69 1,410 Lease payments (5,082) (4,441) Interest expense (Note 6) 4,015 3,208

Balance at 31 December 52,840 53,838

Non-current 50,889 52,117 Current 1,951 1,721

52,840 53,838

24 AMOUNTS DUE TO SUBSIDIARIES

The amounts due to subsidiaries are denominated in Ringgit Malaysia, unsecured, interest free and repayable upon demand.

25 SHARE CAPITAL

Group and Company 31.12.2019 31.12.2018 Number Number of shares Amount of shares Amount ’000 RM’000 ’000 RM’000

Issued and fully paid-up ordinary shares:

At 1 January/31 December 100,745 124,602 100,745 124,602 114 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

26 NET CASH FLOW FROM/(USED IN) OPERATIONS

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Restated Restated

(Loss)/profit before tax (46,579) 25,874 (43,282) 5,684 Adjustments for: Property, plant and equipment: - depreciation (Notes 6 & 11) 9,506 8,168 7,971 6,861 - gain on disposal (Note 6) (73) (2) (2) (1) - write-offs (Note 6) 2,883 24 2,826 24 Impairment of ROU assets 27,026 0 27,026 0 Amortisation of ROU assets 5,216 5,406 4,209 4,461 Modifications of lease term 0 (157) 0 0 Interest income (Note 6) (587) (841) (2,346) (2,525) Finance cost (Note 6): - interest expense on borrowings 12,280 8,954 12,015 8,792 - amortisation of transaction cost on borrowings 108 135 108 135 - accretion of lease liabilities 4,389 3,472 4,015 3,208 Write-down/(write-back) of inventories, net (Note 6) 8,670 (76) 6,556 2,522 Reversal of impairment loss on trade receivables, net (Notes 6 & 26) (1,441) (627) (1,141) (574) Additional/(reversal of) provisions for liabilities and charges (Notes 6 & 20) 163 (454) 156 (443) Dividend income from an equity investment (22,457) (11,229) (22,457) (11,229)

45,683 12,773 38,936 11,231

(896) 38,647 (4,346) 16,915

Changes in working capital:

Inventories (32,855) (33,032) (29,883) (24,616) Receivables 45,163 (34,545) 36,558 (24,273) Payables 2,552 34,212 (7,094) 29,189 Contract liabilities (5,786) (826) (5,607) 428 Amounts due from/(to) subsidiaries 0 0 (953) 13,531

9,074 (34,191) (6,979) (5,741)

Net cash flow from/(used in) operations 8,178 4,456 (11,325) 11,174 115 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

27 SUBSIDIARIES

The subsidiaries, which are all incorporated in Malaysia and directly owned by the Company, are detailed below:

Issued Group’s share capital 2019 2018 Principal activities RM’000 % %

Cycle & Carriage Bintang 1,710 100 100 Retailing of motor vehicles, (Perak) Sdn. Bhd. sale of spare parts and servicing of vehicles.

Srisari Sdn. Bhd. 0* 100 100 Dormant.

Selecsama Sdn. Bhd. 5,000 100 100 Dormant.

Cycle & Carriage (Malaysia) 31,000 100 100 Dormant. Sdn. Berhad

Cycle & Carriage Bintang 4,898 100 100 Retailing of motor vehicles, (Northern) Sdn. Bhd. sale of spare parts and servicing of vehicles.

Lowe Properties Sdn. Bhd. 200 100 100 Renting of premises.

* Issued share capital of RM2

All subsidiary companies are audited by PricewaterhouseCoopers PLT.

28 RELATED PARTY DISCLOSURES

In addition to related party disclosures disclosed elsewhere in the financial statements, set out below are other significant related party transactions and balances.

The significant related party transactions described below were carried out on terms and conditions agreed by the related parties.

Company 2019 2018 RM’000 RM’000

(a) With subsidiaries:

Income: (i) Transfer of motor vehicles and parts to subsidiaries 126,142 193,366

(ii) Receipt of rental (Note 6) 566 566

(iii) Receipt of management fees (Note 6) 7 7

(iv) Receipt of interest income, net (Note 6) 1,759 1,684

(v) Repayment of loan from a subsidiary 450 480 116 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

28 RELATED PARTY DISCLOSURES (CONTINUED)

Company 2019 2018 RM’000 RM’000

(a) With subsidiaries: (continued)

Expense: (i) Transfer of motor vehicles and parts from subsidiaries (131,286) (176,048)

(ii) Share of insurance contributions and overhead expenses to subsidiaries (858) (640)

Group and Company 2019 2018 RM’000 RM’000

(b) With the immediate holding company:

Provision of management services (Note 6) (425) (975) Receipt of insurance premium support 645 554

(c) With a subsidiary of the immediate holding company:

Provision of management service (Note 6) 0 (836)

(d) With subsidiaries of the ultimate holding company:

Jardine Matheson & Co., Ltd: - provision of internal audit services (Note 6) (309) (324) - provision of executive development program and certificates 0 (92) Purchase of computer software, peripherals and copier charges from JOS Malaysia Sdn. Bhd. (2,180) (939)

(e) With an associate of the ultimate holding company:

Purchase of insurance from Jardine Lloyd Thompson Sdn. Bhd. (1,361) (3,122)

(f) With a Director of the immediate holding company

Sale and servicing of vehicle 234 371

(g) With a Director of the Company

Sale and servicing of vehicle 0 264 117 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

28 RELATED PARTY DISCLOSURES (CONTINUED)

Group and Company 2019 2018 RM’000 RM’000

(h) With a principal officer of the Group and the Company

Sale and servicing of vehicle 0 340

(i) Remuneration of key management personnel of the Group:

Short-term employee benefits 5,824 4,781 Other long-term benefits 340 321

6,164 5,102

Significant related party balances related to the above transactions are disclosed in Notes 17, 21 and 24 to the financial statements.

Relationships with the above related parties are as follows:

Related party Relationship

Jardine Cycle & Carriage Limited The immediate holding company of the Company.

Cycle & Carriage Industries Pte Limited Subsidiary of Jardine Cycle & Carriage Limited, the immediate holding company of the Company.

Jardine Matheson & Co., Ltd Subsidiaries of Jardine Matheson Holdings Limited, the ultimate JOS Malaysia Sdn. Bhd. holding company of the Company.

Jardine Lloyd Thompson Sdn. Bhd. Associate of Jardine Matheson Holdings Limited, the ultimate holding company of the Company.

Outstanding balances with the above related parties arose from trade and non-trade transactions during the financial year.

29 FINANCIAL INSTRUMENTS

The carrying amounts of the financial assets and liabilities of the Group and of the Company at the reporting date approximated their fair values. 118 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

30 SEGMENT REPORTING

The activities of the Group are conducted within Malaysia as shown in the following business segments:

• Automotive industry - retailing of motor vehicles, sale of spare parts and servicing of vehicles. • Investment - investment in MBM. Refer to Note 13 for further details.

Continuing Discontinued operations operation Automotive industry Investment Total RM’000 RM’000 RM’000

2019

Revenue 1,143,315 0 1,143,315 Results: Segment results (52,846) 22,457 (30,389) Interest income 587 0 587 Finance cost (16,777) 0 (16,777)

(69,036) 22,457 (46,579) Income tax credit 7,376

Net loss (39,203)

Net assets: Segment assets 721,660 0 721,660 Unallocated assets 25,288

746,948

Segment liabilities 497,838 0 497,838 Unallocated liabilities 27

497,865

Other information: Capital expenditure 35,892 0 35,892 Depreciation 9,506 0 9,506 Write-down of inventories, net 8,670 0 8,670 Reversal of impairment loss on receivables (net) (1,441) 0 (1,441)

As at 31 December 2019, the unallocated assets comprise deferred tax assets and tax recoverable while unallocated liabilities comprise current tax liabilities. 119 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

30 SEGMENT REPORTING (CONTINUED)

Continuing Discontinued operations operation Automotive industry Investment Total RM’000 RM’000 RM’000 (Restated) (Restated)

2018

Revenue 1,513,296 0 1,513,296 Results: Segment results 26,365 11,229 37,594 Interest income 841 0 841 Finance cost (12,561) 0 (12,561)

14,645 11,229 25,874 Income tax expense (5,521)

Net profit 20,353

Net assets: Segment assets 744,019 66,003 810,022 Unallocated assets 21,618

831,640

Segment liabilities 543,322 0 543,322 Unallocated liabilities 32

543,354

Other information: Capital expenditure 19,774 0 19,774 Depreciation 8,168 0 8,168 Write-back of inventories, net (76) 0 (76) Reversal of impairment loss on receivables (net) (627) 0 (627) Compensation on insurance claim (12,910) 0 (12,910)

As at 31 December 2018, the unallocated assets comprise deferred tax assets and tax recoverable while unallocated liabilities comprise current tax liabilities. 120 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

31 COMMITMENTS

(a) Capital commitments

Capital expenditure not provided for in the financial statements is as follows:

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

Property, plant and equipment - Approved and contracted 51,243 53,205 41,589 49,011 - Approved but not contracted 3,215 9,741 1,353 8,303

54,458 62,946 42,942 57,314

(b) Operating lease commitments

The Group and the Company lease various properties under non-cancellable operating lease agreements. The leases have varying terms and renewal rights.

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Restated Restated

Within one year 335 417 266 346 Between one and five years 477 675 369 543

812 1,092 635 889

32 EFFECTS OF THE ADOPTION OF MFRS 16 “LEASES”

Under MFRS 16, a lease is a contract (or part of a contract) that conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

MFRS 16 eliminates the classification of leases by the lessee as either finance leases (on balance sheet) or operating leases (off balance sheet). MFRS 16 requires a lessee to recognise a “right-of-use” of the underlying asset and a lease liability reflecting future lease payments for most leases.

The right-of-use asset is depreciated in accordance with the principle in MFRS 116 ‘Property, Plant and Equipment’ and the lease liability is accreted over time with interest expense recognised in profit or loss.

For lessors, MFRS 16 retains most of the requirements in MFRS 117. Lessors continue to classify all leases as either operating leases or finance leases and account for them differently.

MFRS 16 came into effect for the financial year on 1 January 2019. The Group and the Company adopted the full retrospective approach and accordingly, the comparative information have been restated for the years prior to first adoption.

121 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

32 EFFECTS OF THE ADOPTION OF MFRS 16 “LEASES” (CONTINUED)

The financial effects arising from the adoption of MFRS 16 are as follows:

As previously As reported Adjustments restated RM’000 RM’000 RM’000

Statements of comprehensive income

Financial year ended 31 December 2018

Group Administrative expenses (37,172) 1,119 (36,053) Finance cost (9,089) (3,472) (12,561) Income tax expenses (5,908) 387 (5,521) Net profit from continuing operations 11,090 (1,966) 9,124 Net profit/total comprehensive income 22,319 (1,966) 20,353

Company Administrative expenses (34,958) 893 (34,065) Finance cost (8,927) (3,208) (12,135) Income tax expenses (1,144) 414 (730) Net loss from continuing operations (4,374) (1,901) (6,275) Net profit/total comprehensive income 6,855 (1,901) 4,954

Statements of financial position

As at 31.12.2018

Group Property, plant and equipment 168,561 (69,437) 99,124 Right-of-use assets 0 122,637 122,637 Trade and other receivables 128,546 248 128,794 Lease liabilities – non-current 0 55,679 55,679 Lease liabilities – current 0 2,676 2,676 Provision for liabilities and charges 39 1,778 1,817 Deferred tax assets 13,394 1,664 15,058 Retained profits 168,705 (5,021) 163,684

Company Property, plant and equipment 161,412 (71,292) 90,120 Right-of-use assets 0 120,484 120,484 Trade and other receivables 155,954 (85) 155,869 Lease liabilities – non-current 0 52,117 52,117 Lease liabilities – current 0 1,721 1,721 Provision for liabilities and charges 39 1,650 1,689 Deferred tax assets 11,634 1,511 13,145 Retained profits 147,273 (4,869) 142,404 122 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

32 EFFECTS OF THE ADOPTION OF MFRS 16 “LEASES” (CONTINUED)

The financial effects arising from the adoption of MFRS 16 are as follows: (continued)

As previously As reported Adjustments restated RM’000 RM’000 RM’000

Statements of financial position (continued)

As at 1.1.2018

Group Property, plant and equipment 158,584 (71,038) 87,546 Right-of-use assets 0 127,598 127,598 Trade and other receivables 92,634 988 93,622 Lease liabilities – non-current 0 58,286 58,286 Lease liabilities – current 0 1,922 1,922 Provision for liabilities and charges 869 1,672 2,541 Deferred tax assets 14,727 1,277 16,004 Retained profits 146,386 (3,055) 143,331

Company Property, plant and equipment 151,672 (72,893) 78,779 Right-of-use assets 0 123,535 123,535 Trade and other receivables 144,537 505 145,042 Lease liabilities – non-current 0 52,568 52,568 Lease liabilities – current 0 1,093 1,093 Provision for liabilities and charges 850 1,552 2,402 Deferred tax assets 9,903 1,097 11,000 Retained profits 140,418 (2,968) 137,450

Statements of cash flows

Financial year ended 31 December 2018

Group

Operating activities Net cash flow (used in)/from operations (1,157) 5,613 4,456 Net cash flow used in operating activities (10,768) 2,141 (8,627)

Financing activities Principal elements of lease payments 0 (2,141) (2,141) Net cash flow from financing activities 34,371 (2,141) 32,230 123 Cycle & Carriage Bintang Berhad Annual Report 2019

Notes to the Financial Statements For the Financial Year ended 31 December 2019

(continued)

32 EFFECTS OF THE ADOPTION OF MFRS 16 “LEASES” (CONTINUED)

The financial effects arising from the adoption of MFRS 16 are as follows: (continued)

As previously As reported Adjustments restated RM’000 RM’000 RM’000

Statements of cash flows(continued)

Company

Operating activities Net cash flow from operations 6,733 4,441 11,174 Net cash flow (used in)/from operating activities (344) 1,233 889

Financing activities Principal elements of lease payments 0 (1,233) (1,233) Net cash flow from financing activities 19,044 (1,233) 17,811

33 SUBSEQUENT EVENTS

Selective capital reduction and repayment exercise

The Company had on 11 November 2019 received an offer letter from its major shareholder, Jardine Cycle & Carriage Limited (“JCCL”), requesting for the Company to undertake a selective capital reduction (“SCR”) and repayment exercise pursuant to Section 116 of the Companies Act 2016 (“Proposed SCR”). The Proposed SCR entailed a capital reduction and repayment of proposed cash amount of RM2.20 per ordinary share in the Company held by all the shareholders of the Company (other than JCCL), whose names appeared in the Record of Depositors of the Company on 4 February 2020. At the extraordinary general meeting of the Company held on 11 February 2020, the resolution in respect of the Proposed SCR was not approved.

Acquisition of land

On 27 February 2020, the Company had entered into a conditional sale and purchase agreement (“SPA”) with The Malayan Press (PG) Sdn Bhd to acquire 3 pieces of freehold vacant lands held under Geran 10567 Lot 253 Seksyen 9W, Geran 10568 Lot 254 Seksyen 9W and Geran 10569 Lot 255 Seksyen 9W, all in Bandar George Town, Daerah Timor Laut, Negeri Pulau Pinang with an approximate area of 35,420.84 square feet (equivalent to 3,290.70 square metres) in total, for a total cash consideration of RM24.2 million subject to the terms and conditions stipulated in the SPA. The salient terms and conditions of the SPA is announced in the Company’s announcement on the proposed acquisition dated 27 February 2020.

34 APPROVAL OF FINANCIAL STATEMENTS

The financial statements have been approved for issue in accordance with a resolution of the Board of Directors on 27 February 2020. 124 Cycle & Carriage Bintang Berhad Annual Report 2019

Five-Year Summary

2015 2016 2017 2018 2019 RM’000 RM’000 RM’000 RM’000 RM’000 Restated Restated Restated Restated

Consolidated Statements of Comprehensive Income Revenue 1,580,024 1,486,345 1,420,119 1,513,296 1,143,315

Profit/(Loss) before tax 66,218 47,189 (17,627) 25,874 (46,579) Income tax (expense)/credit (15,846) (10,020) 4,727 (5,521) 7,376 Net profit/(loss) and total comprehensive income/(loss) attributable to shareholders 50,372 37,169 (12,900) 20,353 (39,203)

Earnings/(Loss) per share (sen) 50.0 36.9 (12.8) 20.2 (38.9) Gross dividend per share (sen) 5.0 5.0 – – –

Consolidated Statements of Financial Position Intangible assets 9,842 9,842 9,842 9,842 9,842 Property, plant and equipment 71,375 85,109 87,546 99,124 122,627 Equity investment - available-for-sale 66,003 66,003 66,003 – – Other net non-current assets 18,902 18,743 85,316 82,016 60,389 Net current assets, other than net cash/(borrowings) 76,879 206,601 235,538 333,151 258,049 Net cash/(borrowings) 10,737 (100,427) (216,312) (235,847) (201,824) Net assets 253,738 285,871 267,933 288,286 249,083

Share capital 100,745 100,745 124,602 124,602 124,602 Reserves 152,993 185,126 143,331 163,684 124,481 Shareholders’ funds and capital employed 253,738 285,871 267,933 288,286 249,083

Net assets value per share (RM) 2.5 2.8 2.7 2.9 2.5

Consolidated Statements of Cash Flows Net cash flow used in operating activities (28,985) (96,864) (49,302) (8,627) (4,039) Net cash flow from/(used in) investing activities 4,065 (8,204) (59,677) (8,539) 40,157 Net cash flow used in financing activities 24,406 116,904 94,054 32,230 (45,705)

Net cash flow per share used in operating activities (RM) (0.3) (1.0) (0.5) (0.1) –

Key Ratios Gearing – 35% 81% 82% 81% Interest cover (times) 33 8 nm 3 nm Dividend cover (times) 10.0 7.4 – – – Dividend payout 10% 14% – – – Return/(Loss) on shareholders’ funds 22.0% 13.8% (4.7%) 7.3% (14.6%)

Notes 1. The financial statements for year 2015 to 2018 have been restated due to changes in accounting policies upon adoption of MFRS 16 Leases , in addition to restatement due to excess sales support payments for year 2015 and 2016. 2. Earnings/(Loss) per share is computed based on the net profit attributable to shareholders divided by the weighted average number of shares in issue. 3. Gross dividend per share represents the dividend declared and dividend proposed per share for the financial year. 4. Net assets value per share is computed based on shareholders’ funds divided by the number of shares in issue at the end of the financial year. 5. Net cash flow per share from/(used in) operating activities is computed based on the net cash flow from operating activities divided by the weighted average number of shares in issue. 6. Gearing is computed based on net borrowings divided by shareholders’ funds. 7. Interest cover is computed based on profit before interest expense and tax expense divided by interest expense. 8. Dividend cover is based on the net profit attributable to shareholders divided by net dividend declared and dividend proposed for the financial year. 9. Dividend payout is based on net dividend declared and dividend proposed for the financial year divided by net profit attributable to shareholders. 10. Return/(loss) on shareholders’ funds is computed based on net profit attributable to shareholders divided by average shareholders’ funds. nm- not meaningful 125 Cycle & Carriage Bintang Berhad Annual Report 2019

Financial Charts

RM’ RM’ million million 1,600_ 75_ 1,400_ 60_ 1,200_ 45_ 1,000_ 30_ 800_ 15_ 600_ 0_ 17 19 year 400_ -15_ 15 16 18 200_ -30_ 0_ -45_

15 16 17 18 19 year NET PROFIT/(LOSS) AND TOTAL COMPREHENSIVE INCOME/(LOSS) REVENUE ATTRIBUTABLE TO SHAREHOLDERS

RM’ Sen million 60_ 320_ 280_ 45_ 240_ 30_ 200_ 15_ 160_ 17 19 120_ 0_ year 80_ -20_ 15 16 18 40_ -40_ 0_

EARNINGS/(LOSS) PER SHARE 15 16 17 18 19 year SHAREHOLDERS’ FUNDS AND % CAPITAL EMPLOYED 25_

20_

15_

10_

5_ 17 19 0_ year -10_ 15 16 18

-20_ RETURN/(LOSS) ON SHAREHOLDERS’ FUNDS 126 Cycle & Carriage Bintang Berhad Annual Report 2019

Group Properties As at 31 December 2019

Approximate Land Tenure Net Book Age of Building Land Area (expiry of Value Acquisition Location of Property Description (Years) (sq. ft.) lease) RM’000 Date

1 Lot 5, MB Autohaus - 23 178,118 Leasehold 7,140 14.12.1982 Jalan Perusahaan Satu, service centre, parts Kawasan Perindustrian retail and office. (05.09.2074) PKNS, 68100 Batu Caves, Selangor.

2 No.102, Jalan Skudai, MB Autohaus - 28 223,799 Freehold 8,687 30.01.1991 81200 Johor Bahru, vehicle showroom, Johor. service centre, parts retail and office.

3 No.75, Jalan Tunku MB Autohaus - 16 100,155 Freehold 3,867 24.12.1983 Abdul Rahman, vehicle showroom, 30010 Ipoh, Perak. service centre, parts retail and office.

4 No. 37A, Lot 82, Holiday bungalow. 43 50,569 Leasehold 21 23.11.1977 Jalan Kamunting, Tanah Rata, (30.08.2037) 39007 Cameron Highlands, Pahang.

5 No. 16, Jalan PJU 7/5, MB Autohaus - 14 63,217 Freehold 26,764 07.04.2005 Mutiara Damansara, vehicle showroom, 47800 Petaling Jaya, service centre, parts Selangor. retail and office.

6 Lot 19, Jalan 51A/219, MB Autohaus - 14 102,997 Leasehold 19,424 21.04.2004 46100 Petaling Jaya, vehicle showroom, Selangor. service centre, parts (07.01.2067) retail and office.

7 No.1619, MB Autohaus - 23 90,018 Freehold 3,967 13.05.2011 Jalan Pengkalan, Service centre, parts Bukit Tengah, retail and office. 14000 Bukit Mertajam, Penang.

8 Lot 338, Vacant land for N/A 45,639 Leasehold 33,000 03.11.2017 Jalan Sungai Besi, future use 57100 Kuala Lumpur, (17.09.2062) Wilayah Persekutuan Kuala Lumpur. 127 Cycle & Carriage Bintang Berhad Annual Report 2019

Shareholding Statistics

ANALYSIS OF SHAREHOLDINGS BY RANGE GROUPS as at 24 April 2020

No. of % Over Total No. of % Over Total Size of Shareholdings Shares Shares Holders Shareholders

1 – 99 3,515 0.00 289 7.22 100 - 1,000 915,893 0.91 1,201 30.03 1,001 - 10,000 8,075,346 8.02 2,026 50.65 10,001 - 100,000 11,790,396 11.70 433 10.83 100,001 - 5,037,224 20,416,350 20.27 50 1.25 5,037,225 and above 59,543,000 59.10 1 0.02

100,744,500 100.00 4,000 100.00

THIRTY LARGEST SHAREHOLDERS as at 24 April 2020

No. Investor Name/Beneficiary Name No. of Shares %

1. Affin Hwang Nominees (Asing) Sdn. Bhd. 59,543,000 59.10 DBS Vickers Secs (S) Pte Ltd for Jardine Cycle & Carriage Limited 2. CIMSEC Nominees (Tempatan) Sdn Bhd 3,207,400 3.18 Exempt AN for CIMB Trustee Berhad (CO1046) 3. Chinchoo Investment Sdn. Berhad 1,909,000 1.90 4. Lim Khuan Eng 1,407,200 1.40 5. Key Development Sdn. Berhad 1,183,000 1.17 6. UOB Kay Hian Nominees (Asing) Sdn Bhd 1,093,900 1.09 Exempt AN for UOB Kay Hian Pte Ltd (A/c Clients) 7. Wong Yu @ Wong Wing Yu 1,051,300 1.04 8. Gan Teng Siew Realty Sdn. Berhad 1,049,900 1.04 9. Mikdavid Sdn Bhd 864,900 0.86 10. Tan Kim Kee @ Tan Kee 822,700 0.82 11. Chai Koon Khow 633,300 0.63 12. Goh Siew Cheng 540,000 0.54 13. CGS-CIMB Nominees (Tempatan) Sdn Bhd 400,000 0.40 Pledged Securities Account For Tan Kian Chuan (MY2204) 14. Amsec Nominees (Asing) Sdn Bhd 375,000 0.37 KGI Securities (Singapore) Pte. Ltd. For Ramesh S/O Pritamdas Chandiramani (16090) 15. Chong Kok Fah 366,400 0.36 16. Gemas Bahru Estates Sdn. Bhd. 334,600 0.33 17. Lim Gaik Bway @ Lim Chiew Ah 323,500 0.32 18. Maybank Securities Nominees (Tempatan) Sdn Bhd 289,600 0.29 Pledged Securities Account For Tan Ching Ching 128 Cycle & Carriage Bintang Berhad Annual Report 2019

Shareholding Statistics

(continued)

THIRTY LARGEST SHAREHOLDERS (CONTINUED) as at 24 April 2020

No. Investor Name/Beneficiary Name No. of Shares %

19. Maybank Securities Nominees (Tempatan) Sdn Bhd 275,000 0.27 Pledged Securities Account For Chan Sow Keng (Margin) 20. Sinjin Pertama Holdings Sdn. Bhd. 200,000 0.20 21. Yeo Khee Huat 200,000 0.20 22. Yu Kuan Chon 187,600 0.19 23. Tan Phan Shei 184,600 0.18 24. Sin Ee Nam 182,300 0.18 25. Segamat Holdings Sdn Bhd 181,900 0.18 26. Maybank Nominees (Tempatan) Sdn Bhd 151,900 0.15 Pledged Securities Account for Liau Thai Min 27. Ng Poh Cheng 142,700 0.14 28. Lee Chee Mei 140,000 0.14 29. Ng Choon Sing 133,500 0.13 30. Tan Geek Joo 131,100 0.13

77,505,300 76.93

SUBSTANTIAL SHAREHOLDERS as at 24 April 2020

Direct Indirect No. Name No. of Shares % No. of Shares %

1. Jardine Cycle & Carriage Limited 59,543,000 59.10 – – 2. Jardine Strategic Singapore Pte Ltd – – 59,543,000* 59.10 3. JSH Asian Holdings Limited – – 59,543,000* 59.10 4. Jardine Strategic Holdings Limited – – 59,543,000* 59.10 5. JMH Investments Limited – – 59,543,000* 59.10 6. Jardine Matheson Holdings Limited – – 59,543,000* 59.10

* Deemed interest by virtue of Section 8(4)(c) of the Companies Act 2016

DIRECTORS’ SHAREHOLDING as at 24 April 2020

None of the Directors hold shares in the Company. 129 Cycle & Carriage Bintang Berhad Annual Report 2019

Financial Calendar

Financial Year Ended 31 December 2019 Announcement of results:

First Quarter 23 April 2019

Second Quarter 30 July 2019

Third Quarter 1 November 2019

Fourth Quarter 27 February 2020

Issuance of 2019 Annual Report 30 April 2020

Financial Year Ending 31 December 2020 Proposed dates for announcement of results:

First Quarter 24 April 2020

Second Quarter 28 July 2020

Third Quarter 2 November 2020

Fourth Quarter 25 February 2021 Cycle & Carriage Bintang Berhad Annu a l Repo r t 2019

www.cyclecarriage.com.my Cycle & Carriage Bintang Berhad (Registration No. 196701000428 (7378-D)) (Incorporated in Malaysia) Annual Report 2019