OSK HOLDINGS BERHAD 199001015406 (207075-U) MOVING FORWARD, ANNUAL REPORT 2020 PROGRESSING TOGETHER. ABOUT THIS REPORT Our Annual Report is an important communication tool that will be of material interest to our stakeholders, in which we showcase our financial and non-financial performance during the financial year 2020 (“FY2020”), including our achievements and challenges faced in an open and transparent manner. The report is prepared to facilitate our stakeholders in making an informed evaluation of OSK Holdings Berhad’s (“the Company” or “OSK”) and its subsidiaries’ (“OSK Group” or “the Group”) ability to create value in the short, medium and long-term. In producing this report, effort is made to MOVING ensure that all information published in this report is accurate at the time of printing, and have material bearing on the Group’s value creation. Our FORWARD, Annual Report is supplemented by supporting documents including non- financial disclosures published as part of our annual results announcement to PROGRESSING Bursa Malaysia. These documents are also accessible through our website. TOGETHER http://www.oskgroup.com/corporate-announcements/ Scope and Boundary This Annual Report shares material information related to the Group’s OSK Group, as a conglomerate with an business model, operating environment, material risks and opportunities, illustrious business track record spanning stakeholders’ interests, performance, prospects and governance from more than five decades, takes pride in 1 January 2020 until 31 December 2020, unless otherwise stated. All realising our vision to be a long-term financial statements have been made in accordance with the requirements business builder that delivers strong and of the Companies Act 2016 (“CA 2016”), Malaysian Financial Reporting sustainable value to all our stakeholders. Standards (“MFRSs”), and the International Financial Reporting Standards As one of the leading property developers (“IFRSs”). The content of this Annual Report excludes business and corporate in Malaysia, we are renowned for activities conducted outside Malaysia (unless otherwise stated), as well as delivering innovative design and quality activities undertaken by the Group’s joint venture and collaborative partners, products that promote communal living at occupants, tenants, sites, as well as third party vendors and suppliers that its best. We continue to chart new frontiers are beyond the direct and immediate control of OSK. by taking on new launches locally and abroad with developments that are not Reporting Framework only market-driven, but also built with value In preparing this report, we are guided by statutory and compliance and sustainability in mind to create lasting requirements as stated in the Main Market Listing Requirements (“MMLR”) legacies for current and future generations. of Bursa Malaysia Securities Berhad (“Bursa Malaysia”), the CA 2016, and the Malaysian Code on Corporate Governance (“MCCG”), as well Our financial services, manufacturing and hospitality businesses continue to deliver as principles and concepts under the International Integrated Reporting excellence, while capturing new markets Framework (“<IR>”). and opportunities. At OSK, we believe in Moving Forward and Progressing Together to achieve shared successes and building the common good, as we grow with our stakeholders. A view showing our iconic Melbourne Square (“MSQ”) integrated mixed- development project set against the breathtaking Melbourne skyline in Australia. Our Audience Our Annual Report and supporting publications are prepared CROSS REFERENCES for the benefit of information of all our stakeholders, This icon indicates where more including our Shareholders, business partners, associates information can be found in our and the investment community at large. It also shares relevant Annual Report or Sustainability information about the Group to our customers, employees, Report 2020. regulators and the general public, who have an interest in how we generate value for them and the community. This icon indicates where more information can be found online. Forward-looking Statements This report contains forward-looking statements on the Group and its business divisions’ future performance and prospects. CORPORATE We wish to state that these statements do not constitute financial WEBSITE or investment advice, in any form or manner. While such statements reflect our judgements, opinions and expectations during the preparation of this report, we wish to highlight that multiple factors including emerging risks, uncertainties and For more information on OSK Group, disruptions may potentially influence the intended outcome please visit our corporate website: and differ materially from our expectations. These may include http://www.oskgroup.com/ causes or events that could adversely affect our business and financial performance. ONLINE REPORT SUSTAINABILITY DRIVERS The following icons indicate our key sustainability drivers. Kindly scan the QR Code Progressing Together to view our Annual Report 2020 online or log on to: https://www.oskgroup.com/wp-content/ Responsible Marketplace uploads/2021/03/OSKH-AR-2020.pdf Our Biggest Asset Highest Ethical Standards Minimising Impacts st 31Annual General Meeting To be held fully virtual Date : Wednesday, OUR LEADERS’ 21 April 2021 MESSAGE Time : 10:00 a.m. Broadcast : Boardroom Venue 22nd Floor, Plaza OSK 2 Executive Chairman’s Jalan Ampang Statement 50450 Kuala Lumpur Wilayah Persekutuan Meeting : Securities Services e-Portal Platform https://sshsb.net.my REPORT OUR COMMITMENT TO GOOD CORPORATE GOVERNANCE 114 Corporate Governance Overview Statement 128 Audit Committee Report 132 Statement on Risk Management & Internal Control 135 Enterprise Risk Management Framework 137 Additional Disclosures An evening view of MSQ in Melbourne, Australia. INSIDE THIS * Artist’s impression OUR OUR OUR STORY PERFORMANCE LEADERSHIP TEAM 6 2020 At A Glance 24 Group Managing Director’s 99 Directors’ Profile 8 Who We Are Management Discussion & Analysis 107 Key Senior 10 Vision, Mission and Strategic Review Management’s Values 24 Economic Review 2020 Profile 11 What We Do 26 Stakeholder-focused Material Issues 12 Our Key Strengths and Our Response 14 Value Creation Performance Review Engine 30 Financial Highlights 16 Corporate 33 Five-year Financial Summary Information 34 Statement of Value-Added & Distribution 35 22 Corporate Structure Investors’ Information Business Review 38 Property Development 46 Property Investment 52 Financing Services 56 Contruction 60 Industries – Cables Division 64 Industries – Industrialised Building System (“IBS”) Division 68 Hospitality – Hotels and Resorts Division 72 Hospitality – Vacation Club Division 76 Sustainability Statement 97 In the News OUR ADDITIONAL FINANCIALS INFORMATION 324 List of Group’s Top 10 Properties 325 Statement of Directors’ Interests 139 Statement of 166 Notes to the Financial Statements: 326 Statement of Responsibility by 166 General Information and Basis for Preparation Shareholdings Directors of Financial Statements 140 Directors’ Report 167 Segment Information 147 Statement by Directors 178 Capital Management 147 Statutory Declaration 179 Financial Risk Management ANNUAL 148 Independent Auditors’ 191 Notes to Statements of Financial Position GENERAL Report 291 Notes to Statements of Profit or Loss MEETING 153 Statements of Financial 306 Dividends Position 307 Related Party Disclosures 155 Statements of Profit or 316 Commitments Loss 317 Contingent Assets and Liabilities 156 Statements of 318 Significant Events and Material Subsequent Comprehensive Income Events 157 Statements of Changes in 318 Material Litigations Equity 318 Financial Reporting Standards 329 Notice of Annual 162 Statements of Cash Flows General Meeting • Form of Proxy 2 Annual Report 2020 EXECUTIVE CHAIRMAN’S STATEMENT Dear Valued Shareholders, Tan Sri Ong Leong Huat @ Wong Joo Hwa On behalf of the Board of Directors, it is my Executive Chairman pleasure to present to you OSK Holdings Berhad’s Annual Report for the financial year ended 31 December 2020. Resilience in the Face of a Crisis In FY2020, the world was confronted with the COVID-19 pandemic, which concurrently caused a health crisis and an economic fallout. The pandemic resulted in restricted movements which led to a sharp decline in business activity. Across OSK Group’s business, the impact of the pandemic was most acutely felt in the hospitality business. The decline in tourist arrivals to Malaysia, coupled with restrictions on domestic movement arising from the Movement Control Order (“MCO”) forced us to close our doors for several months. Even after the MCO was lifted, the decline in the hospitality business was still severe. During the MCO, our property and industries business segments also were unable to operate, resulting in our inability to generate revenues during that period. As the MCO was gradually eased, and businesses were allowed to operate, we were able to partially recover during the course of the second half of FY2020. In the face of this unprecedented challenge, I am pleased to share with all our valued shareholders that the Group, through effective implementation of its business continuity plan, was able to remain financially healthy and operationally strong. OSK Holdings Berhad 199001015406 (207075-U) 3 1 2 3 4 5 6 7 8 EXECUTIVE CHAIRMAN’S STATEMENT The Group’s shareholders’ funds grew from Meaningful Growth Despite Disruptions RM5.0 billion at the start of 2020, to end the year at RM5.3 billion. In