GENTIN G BERHAD 196801000315 (7916-A) ANNUAL REPORT 2020 ANNUAL GENTING BERHAD 196801000315 (7916-A) 24th Floor, Wisma Genting Jalan Sultan Ismail 50250 Kuala Lumpur, Malaysia T : +603 2178 2288 / 2333 2288 F : +603 2161 5304 ANNUAL REPORT 2020 www.genting.com GENTING BERHAD 196801000315 (7916-A) Genting, the Genting logo and all Genting elements and related indicia TM & © 2021; Universal Studios, Universal Studios Singapore and all Universal elements and related indicia TM & © 2021; Premium Outlets, Johor Premium Outlets, Genting Highlands Premium Outlets and all Premium Outlet elements indicia ®; Yield Booster TM. All rights reserved. about GENTING BERHAD OUR VISION We are a leading multinational corporation committed to enhancing shareholder value and maintaining long-term sustainable growth in our core businesses. OUR MISSION We will: • Be responsive to the changing demands of our customers and excel in providing quality products and services. • Be committed to innovation and the adoption of new technology to achieve competitive advantage. • Pursue personnel policies which recognise and reward performance and contributions of employees and provide proper training, development and opportunities for career development. • Generate a fair return to shareholders. • Be a responsible corporate citizen, committed to enhancing corporate governance and transparency, including undertaking social responsibility for the enhancement of the standard of living of the country. OUR CORE VALUES • HARD WORK • HONESTY • HARMONY • LOYALTY • COMPASSION CORPORATE PROFILE Genting Berhad is principally an investment holding and management company. While the Company was incorporated in 1968 and listed in 1971, the Genting Group was founded in 1965 when its Founder, the late Tan Sri Lim Goh Tong started the journey to realise his vision of building a mountaintop resort in Malaysia. Today, the Genting Group comprises Genting Berhad and its listed companies; Genting Malaysia Berhad (“Genting Malaysia”), Genting Plantations Berhad (“Genting Plantations”) and Genting Singapore Limited (“Genting Singapore”), as well as its principal unlisted subsidiaries Genting Energy Limited (“Genting Energy”) and Resorts World Las Vegas LLC (“Resorts World Las Vegas”). Led by Tan Sri Lim Kok Thay, the Group is involved in leisure and hospitality, oil palm plantations, power generation, oil and gas, property development, life sciences and biotechnology activities, with operations spanning across the globe, including in Malaysia (the Group’s country of origin), Singapore, Indonesia, India, China, the United States of America, the Bahamas, the United Kingdom and Egypt. In the core leisure and hospitality business, the Genting Group and its brand affiliates, market and offer a suite of products under a number of premier brands including Genting, Resorts World, Genting Grand, Genting Club, Crockfords, Maxims, Crystal Cruises, Dream Cruises and Star Cruises. The Genting Group also have tie ups with established names such as Universal Studios, Premium Outlets, Zouk, Hard Rock Hotel, Hilton and other renowned international brand partners. CONTENTS FINANCIAL STATEMENTS: 2 Chairman’s Statement / 87 Income Statements Penyata Pengerusi / 主席文告 88 Statements of Comprehensive Income 16 Board of Directors 89 Statements of Financial Position 18 Directors’ Profile 90 Statements of Changes in Equity 26 Principal Executive Officers’ Profile 93 Statements of Cash Flows 27 Management & Corporate Information 96 Notes to the Financial Statements 28 Group Corporate Structure 200 Independent Auditors’ Report 29 Corporate Diary 207 Statement on Directors’ Responsibility 30 Financial Highlights 207 Statutory Declaration 31 Five-Year Summary 208 List of Properties Held 32 Management’s Discussion and Analysis of Business Operations and 213 Analysis of Shareholdings Financial Performance 216 Requirements of Nevada Gaming Regulations 37 2020 Highlights on Genting Berhad and its Shareholders 57 Awards and Accolades 217 Notice of Annual General Meeting 59 Sustainability Statement 221 Statement Accompanying Notice of Annual General Meeting 61 Corporate Governance Overview Statement Form of Proxy 73 Audit Committee Report Group Offices 76 Statement on Risk Management Genting Premier Brands and Internal Control 79 Directors’ Report 86 Statement by Directors 2 CHAIRMAN’S STATEMENT Dear Shareholders, On behalf of the Board of Directors (“Board”), I would like to present the Annual Report and Audited Financial Statements of Genting Berhad (“Company”) and its group of companies (“Group”) for the financial year ended 31 December 2020. 2020 was an extremely challenging year as the world confronted an unprecedented health crisis. The Coronavirus Disease 2019 (“COVID-19”) was declared a global pandemic by World Health Organisation in March 2020. Various movement controls, travel bans and temporary business closures were enforced by many countries worldwide to curb the spread of this deadly virus, causing major disruptions to local and global economies. The economy in Malaysia contracted by 5.6% in 2020 compared to a positive growth of 4.3% in 2019, as Malaysia, like many other countries, grappled with the consequences of the COVID-19 related control measures implemented. The global tourism, leisure & hospitality and gaming industries were among the sectors hardest hit by this pandemic in 2020. For the first time in our history, we had to temporarily close all our resort operations worldwide at intermittent periods, in compliance with respective government directives. The ‘new normal’ of coexisting with the pandemic also meant that our global operations had to reopen on a staggered basis with strict operating protocols in place to protect our customers and employees. In such challenging times, we have remained steadfast, focused and resilient to weather through the adversity. Adapting to this new reality required some very difficult decisions to be made that involved recalibrating operational structures and rightsizing the workforce to ensure the long-term sustainability of our leisure-based business. Our diversified business strategy and cost rationalisation exercises helped to mitigate the adverse impact to the Group’s overall financial performance in 2020. Our oil palm and energy based businesses which are producers of essential products were allowed to operate during the movement control periods. GENTING BERHAD | ANNUAL REPORT 2020 CHAIRMAN’S STATEMENT 3 FINANCIAL OVERVIEW KEY BUSINESS OPERATIONS The Group recorded total revenue of RM11.6 billion in 2020, Genting Singapore a decrease of 47% year-on-year while adjusted earnings before interest, tax, depreciation and amortisation Resorts World Sentosa in Singapore experienced a (“adjusted EBITDA” or “earnings”) was RM2.9 billion in very significant dip in international and regional visitor 2020, a decline of 63% year-on-year. The Group posted a arrivals in 2020. All guest offerings at Resorts World net loss of RM2.1 billion in 2020, compared to a net profit Sentosa were temporarily suspended from 6 April of RM3.7 billion in 2019. 2020 to 30 June 2020, in line with the implementation of circuit breaker measures by the government of The lower financial performance was mainly due to the Singapore to contain the local transmission of COVID-19. Group’s leisure and hospitality division which was adversely As Singapore progressively reopened in the third quarter affected by the temporary closures of their leisure of 2020, Resorts World Sentosa welcomed guests back properties worldwide due to movement control measures to its key attractions with significantly reduced capacity, that were implemented by respective governments placing the focus on health, safety and well-being across to curb the COVID-19 pandemic and the subsequent the resort. resumption of business with reduced capacity. As a result, Genting Malaysia and Genting Singapore both reported Resorts World Sentosa had re-imagined and innovated its lower revenue and earnings in 2020. The reduction in resort offerings during these difficult times to create fun revenue and earnings was partially mitigated by lower and exciting activities to boost local visitorship. Specially operating expenses arising from cost optimisation curated staycation packages were launched alongside measures undertaken. unique dining experiences such as Aqua Gastronomy, the first and only underwater dining experience in Genting Plantations recorded higher revenue and earnings Singapore featuring 100% sustainably sourced seafood. mainly due to stronger palm products prices which Resorts World Sentosa also rolled out a series of exciting outweighed the lower output of fresh fruit bunches. The events such as Halloween fun at Universal Studios downstream manufacturing business recorded lower Singapore, Deep Boo Sea at S.E.A. Aquarium and its sales volume and earnings as the biodiesel and refinery signature Christmas spectacle, A Universal Christmas. operations registered lower capacity utilisation. The These initiatives have attracted more local visitors to property business posted lower revenue and earnings Resorts World Sentosa. mainly due to lower sales of properties in 2020. Despite the challenging year, Resorts World Sentosa Genting Energy recorded lower revenue and earnings continued to win numerous awards of excellence including being named the inaugural winner of Best Integrated from the power business in 2020, mainly due to lower net Resort (International) at the 13th Annual Travel Trade generation and lower coal prices. Revenue