ABOUT US - M K LAND Holdings Berhad · 2018-11-05 · ABOUT US M K Land Holdings Berhad, made its debut on the Main Board of the Kuala Lumpur Stock Exchange (KLSE), now known as Bursa

ABOUT USM K Land Holdings Berhad, made its debut on the Main Board of the KualaLumpur Stock Exchange (KLSE), now known as Bursa Malaysia on 27 August1999 as a result of a reverse takeover of a Second Board manufacturingcompany.

M K Land Holdings Berhad has a diversified portfolio of projects, which includeresidential and commercial development, hotels and resorts, a water theme park, aneducation arm and property investment.

The main property development projects are Damansara Perdana and DamansaraDamai in Petaling Jaya and Meru Perdana in Ipoh.

M K Land Holdings Berhad has been firmly entrenched as one of the key players inthe property development industry under the helm and leadership of its ExecutiveChairman, Puan Hjh Felina Binti Tan Sri Datuk (Dr) Hj Mustapha Kamal.

pg.40Corporate GovernanceOverview Statement

pg.51Audit and Risk ManagementCommittee Report

Cover Rationale:

The theme of the cover design-Focusing On Core Values-refers to M K Land Holdings Berhad's enhanced emphasis onits core values. It is a testament to the importance of thecompany's corporate values in guiding its robust and continuedgrowth.

On the cover, the headline appears within a circle that featuresM K Land Holdings Berhad's striking corporate colour. Thisvisually conveys how the company is concentrating its focus onits corporate values. In the background, there are numerousrings to symbolise the diversity of the company's developmentsas well as the vast scope of its resources.

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CONTENTS

02 I I Executive Chairman Welcome Note04 I I Corporate Information05 I I 5-Year Financial Highlights05 I I Corporate Structure06 I I Profile of The Board Of Directors11 I I Group Chief Executive Officer12 I I Management Team16 I I Event Highlights 201822 I I Management Discussion and Analysis36 I I Sustainability Statement40 I I Corporate Governance Overview Statement51 I I Audit and Risk Management Committee Report54 I I Statement on Risk Management and Internal Control57 I I Financial Statements134 I I List of Material Properties140 I I Notice of Annual General Meeting145 I I Analysis of Shareholdings

Form of Proxy

pg.2Executive ChairmanWelcome Note

pg.16Event Highlights

pg.22Management Discussionand Analysis

Notice of 39th

Annual General Meeting

Date : 6 December 2018 (Thursday)Time : 10.00 amVenue : Sime Darby Convention Centre, 1A, Jalan Bukit Kiara 1, Bukit Kiara, 60000 Kuala Lumpur

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EXECUTIVE CHAIRMANWELCOME NOTE

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M K LAND HOLDINGS BERHAD Annual Report 2018

In the name of Allah, the mostcompassionate and mostmerciful. All praises are for the almighty, the cherisher andsustainer. Salutations be uponthe last messenger, ProphetMuhammad, peace be upon him,his family and his companions.

“

“


Salam Sejahtera,

Dear Esteemed Shareholders,

Alhamdulillah with the grace and blessings of Allah S.W.T., on behalf of the Board of Directors, it gives me great pleasure topresent to you the Annual Report of M K Land for the financial year ended 30th June 2018.

First and foremost, I am thankful and grateful to Allah for His permission to allow me to continue to lead the company in themost demanding and challenging property environment. The year 2018 continued to be challenging for the property industryin Malaysia, mainly as a result of a generally uncertain economic conditions. Although we are seeing improvement in oil prices,the world economy continues to be uncertain and is aggravated further by the trade wars. Prices in general have not changedmuch even after the abolition of the Goods and Services Tax (GST) and transition to the Sales Service Tax (SST) which willtake sometime to stabilise. These factors combined with the cautions stance by banks on financing, pushed customers to bemore selective especially in the high-end property market. However, affordable landed properties with good amenities andinfrastructure continue to see strong demand.

Within this environment, M K Land will continue in our commitment to keep improving, growing, enhancing our fundamentalsand continuing with wealth creation for our shareholders in the long run. While we continue to build on the company’s intangiblevalue through a high level of corporate governance and continuous development of our people, sustainable development willbe a crucial component of the company’s culture and we are committed to integrate the sustainable development in everythingwe do on all fronts.

Human capital is key to our success. Focusing on employee development is imperative to enable the team to better respondto market demands and needs and to allow the team to be able to carry out their tasks effectively and productively. Clear linesof authority and accountability, promoting a sense of belonging and teamwork are some of the core values expected as westrive to achieve our shared goals and objectives. This will ensure continuous improvement and continue strengthening of ourcompany and to deliver quality products and services on time and at reasonable cost.

As a group, we will continue to review our business model and build our fundamentals to be able to better serve the organisation,community, and the nation as a whole, and, with the ongoing and upcoming projects, we are confident to achieve the set target.Lastly, I would like to express my deepest thanks and gratitude to the Government and regulators as well as our customersand business partners for their continued support which have been crucial to our ongoing journey, and to our shareholderswhose trust allow us to continue to improve our performance.

To my fellow M K Land’s Board Members, I would like to express my heartfelt appreciation for your commitment, continuoussupport and guidance, and, finally, to the management and staff, I really appreciate your loyalty, dedication, commitment andhard work that enable us to enjoy all our success to date.

‘TOGETHER WE MAKE IT HAPPEN’

Thank you.

HJH FELINA BINTI TAN SRI DATUK (DR) HJ MUSTAPHA KAMALEXECUTIVE CHAIRMAN

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Executive Chairman Welcome Note


CORPORATE INFORMATION

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BOARD OF DIRECTORS

PN HJH FELINA BINTI TAN SRI DATUK (DR)HJ MUSTAPHA KAMALExecutive Chairman

MR LAU SHU CHUANExecutive Director

PN HJH JULIANA HEATHER BINTI ISMAILSenior Independent Non-Executive Director

MS ANITA CHEW CHENG IMIndependent Non-Executive Director

YBHG DATO’ TAN CHOON HWA @ESTHER TAN CHOON HWAIndependent Non-Executive Director (appointed w.e.f 26 September 2017)

AUDIT AND RISK MANAGEMENT COMMITTEE

MS ANITA CHEW CHENG IM(Chairman)

YBHG DATO’ TAN CHOON HWA @ESTHER TAN CHOON HWA(Member)

PN HJH JULIANA HEATHER BINTI ISMAIL(Member)

SECRETARIES

PN ALIZA BINTI AHMAD TERMIZI (LS 0009656)MR YEAP KOK LEONG (MAICSA 0862549)

REGISTERED OFFICE

No. 19, Jalan PJU 8/5H, Perdana Business Centre,Bandar Damansara Perdana, 47820 Petaling Jaya,Selangor Darul Ehsan.Tel : 03 - 7726 8866Fax : 03 - 7727 9007


SHARE REGISTRARS

TRICOR INVESTOR & ISSUING HOUSE SERVICES SDN BHD (11324-H)

Unit 32-01, Level 32, Tower A,Vertical Business Suite,Avenue 3, Bangsar South,No.8, Jalan Kerinchi,59200 Kuala Lumpur.Tel : 03 - 2783 9299Fax : 03 - 2783 9222Email : [email protected]

AUDITORS

BDO MALAYSIAChartered Accountants

PRINCIPAL BANKERS

AMBANK BERHAD CIMB BANK BERHADPUBLIC BANK BERHADMBSB BANK BERHAD

LISTING

BURSA MALAYSIA SECURITIES BERHADMAIN MARKET


1.7.2013 1.7.2014 1.7.2015 1.7.2016 1.7.2017 to to to to toRM'000 30.6.2014 30.6.2015 30.6.2016 30.6.2017 30.6.2018

Revenue 488,747 488,316 295,063 192,360 181,878Profit before tax 71,448 73,029 32,164 38,037 44,053Profit after tax 65,698 53,963 16,328 18,133 24,499Total assets 1,980,913 1,933,957 1,794,279 1,648,977 1,563,984Net assets 1,146,757 1,164,582 1,156,818 1,174,951 1,199,450Shareholders' fund 1,146,757 1,164,582 1,156,818 1,174,951 1,199,450Total number of shares ('000) 1,204,590 1,204,590 1,204,590 1,204,590 1,204,590Basic Earnings per share (sen) 5.5 4.5 1.4 1.5 2.0Net assets per share (RM) 0.95 0.97 0.96 0.98 1.00

5-YEARFINANCIAL HIGHLIGHTS

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CORPORATESTRUCTURE

100% Subsidiaries

01 I I BML MANAGEMENT SDN. BHD.02 I I BUKIT MERAH RESORT SDN. BHD.03 I I CENTRALPOLITAN DEVELOPMENT SDN. BHD.04 I I DOMINANT STAR SDN. BHD.05 I I DUTA REALITI SDN. BHD.06 I I GOLDEN PRECINCT SDN. BHD.07 I I M K LAND RESOURCES SDN. BHD.08 I I M K LAND VENTURES SDN. BHD.09 I I M.K. DEVELOPMENT SDN. BHD.10 I I MEDAN PRESTASI SDN. BHD.11 I I MELUR UNGGUL SDN. BHD.12 I I MK TRAINING & CONSULTANCY SDN. BHD.13 I I PARAMODEN SDN. BHD.14 I I PARAMOUNT INNOVATION SDN. BHD.15 I I PLATO CONSTRUCTION SDN. BHD.16 I I PROFIL ETIKA (M) SDN. BHD.17 I I PROMINENT VALLEY BERHAD18 I I PUJAAN PASIFIK SDN. BHD.19 I I RITMA MANTAP SDN. BHD.20 I I SAUJANA TRIANGLE SDN. BHD21 I I SEGI OBJEKTIF (M) SDN. BHD.22 I I SUMBANGAN BERKAT SDN. BHD.23 I I TEMA TELADAN SDN. BHD.24 I I VAST OPTION SDN. BHD.25 I I VIBRANT LEISURE SDN. BHD.26 I I ZAMAN TELADAN SDN. BHD.

Subsidiary

01 I I NALURI MAJUJAYA SDN. BHD.


PROFILE OF THE BOARD OF DIRECTORS

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Malaysian

Female

Executive Chairman

47 years old

PN HJH FELINA BINTITAN SRI DATUK (DR)

HJ MUSTAPHA KAMAL

Pn Hjh Felina binti Tan Sri Datuk (Dr) Hj Mustapha Kamal is the ExecutiveChairman of M K Land Holdings Berhad since 29 August 2017.

Pn Hjh Felina holds a Bachelor of Business Degree. She also sits on theBoards of several private limited companies within the EMKAY Group ofcompanies, some of which are also involved in property development.However, these companies are not in direct competition with the business ofthe Company.

Pn Hjh Felina does not hold any directorship in other public companies andlisted issuers.

Pn Hjh Felina is the daughter of YBhg Tan Sri Datuk (Dr) Hj Mustapha KamalBin Hj Abu Bakar, a substantial shareholder of M K Land.

She has not been convicted of any offence within the past five years and hasno public sanction or penalty imposed by the relevant regulatory bodies duringthe financial year ended 30 June 2018.



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Board of Directors Profile

Malaysian

Male

Executive Director

58 years old

MR LAU SHU CHUAN

Mr Lau Shu Chuan, was appointed to the Board of M K Land HoldingsBerhad on 1 February 2017 as Executive Director.

Mr Lau is a member of the Malaysian Institute of Accountants (MIA) and theMalaysian Institute of Certified Public Accountants (MICPA).

Prior to joining M K Land in year 2000, Mr Lau had worked with two of the BigFour accounting firms and a local public group of companies. He has beeninvolved in the areas of finance, audit, corporate consultancy, re-structuringand recovery services. Mr Lau has also been exposed to the financial,construction, property development and manufacturing industries.

Mr Lau was M K Land’s Chief Operating Officer before assuming the post ofGroup Chief Executive Officer from 1 June 2011 to 31 January 2017.

Mr Lau does not hold any directorship in other public companies and listedissuers.

He does not have any family relationship with any of the Directors and/or majorshareholders of the Company, any conflict of interest with the Company norany interest in the securities of the Company and/or its subsidiaries.

He has not been convicted of any offence within the past five years and hasno public sanction or penalty imposed by the relevant regulatory bodies duringthe financial year ended 30 June 2018.



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Malaysian

Female

Senior Independent Non-Executive Director

Chairman of Nomination CommitteeChairman of Remuneration Committee

Audit & Risk Management Committee member

60 years old

PN HJH JULIANAHEATHER BINTI ISMAIL

Pn Hjh Juliana Heather binti Ismail was appointed to the Board of M KLand Holdings Berhad on 21 December 2009 as Independent Non-Executive Director. She was re-designated as Senior Independent Non-Executive Director on 13 December 2017.

Pn Hjh Juliana started her career as a Human Resource Generalist in 1984with Shah Alam Properties Sdn Bhd, formerly a subsidiary of KumpulanPerangsang Selangor Berhad.

She was assigned to the Holding Company, Kumpulan Darul Ehsan Berhadin year 2000 and served with the Company as the Assistant General Manager,Group Human Resource, until March 2014. She was appointed as a panelmember of the Industrial Court, representing employers, by the Minister ofHuman Resources Malaysia, on 1 January 2007.

Pn Hjh Juliana does not hold any directorship in other public companies andlisted issuers.

Pn Hjh Juliana does not have any family relationship with any Director and/ormajor shareholder of the Company, nor any conflict of interest with theCompany.



Malaysian

Female

Independent Non-Executive DirectorChairman of Audit &

Risk Management CommitteeNomination Committee member

Remuneration Committee member

51 years old

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Ms Anita Chew Cheng Im was appointed to the Board of M K LandHoldings Berhad on 19 February 2009 as Independent Non-ExecutiveDirector.

Ms Anita graduated from Monash University, Australia with a Bachelor ofEconomics degree, majoring in Accounting.

She started her career at KPMG, Melbourne in 1989. In 1992, she joined thecorporate finance department of Bumiputra Merchant Bankers Berhad andsubsequently worked at Alliance Investment Bank Berhad and HwangDBSInvestment Bank Berhad. She was involved in most related areas of corporatefinance during her 15 years tenure at the various investment banks, havingadvised clients on IPO, fund raising and corporate restructuring exercises.Her last position held at HwangDBS Investment Bank Berhad was Senior VicePresident, Equity Capital Market.

Ms Anita also sits on the Boards of Notion Vtec Berhad, Yi-Lai Berhad andK-One Technology Berhad.

Ms Anita does not have any family relationship with any Director and/or majorshareholder of the Company, nor any conflict of interest with the Company.


MS ANITA CHEW CHENG IM


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Malaysian

Female

Independent Non-Executive DirectorAudit & Risk Management

Committee memberNomination Committee member

Remuneration Committee member

68 years old

YBHG DATO’ TAN CHOON HWA @ ESTHER

TAN CHOON HWA


Dato’ Tan Choon Hwa @ Esther Tan Choon Hwa wasappointed to the Board of M K Land Holdings Berhad on 26September 2017 as Independent Non-Executive Director.

Dato’ Esther Tan is a Fellow Member of the Institute of CharteredAccountants in England and Wales (FCA), a Member of theMalaysian Institute of Accountants (CA) and a Fellow Memberof the Chartered Tax Institute of Malaysia.

Dato’ Esther Tan began her career as an auditor with GrantThornton in UK and later with Kingston Smith in UK beforecoming back to Malaysia.

In 1984, she started her practice which eventually merged to bewhat is known as GEP Associates. The Firm is a member firmof an International Organisation called AGN International withits headquarters in the United Kingdom, boasting of 465 officesworldwide. In 2008 and 2009, Dato’ Esther Tan became its firstlady Chairperson who led the international organisation and istoday still an active Board member of the Asia Pacific region.

She is an auditor of various companies with activities rangingfrom manufacturing, associations, retailing, construction,developers, trusts, and multinationals etc; and is well exposedto the requirements of regulatory bodies, as well as Public ListedCompanies compliance matters. She has conducted severaldue diligence and fund raising exercises as ReportingAccountant for clients. She was previously the auditor of severalPublic Listed Companies.

In 2006, Dato’ Esther Tan received the award from the NationalAssociation of Women Entrepreneur Malaysia (NAWEM) as“The Woman Entrepreneur of the Year” under the Financesection. She was conferred the Darjah Indera Mahkota Pahang(D.I.M.P.) on 11 March 2016 which carries the title of Dato’ byKebawah Duli Yang Maha Mulia Sultan of Pahang.

She is also a Tax Director of GEP Tax Services Sdn. Bhd. andwas previously a Finance Director of a manufacturing companybefore setting up the practice. Currently, she also manages theAGN Asia Pacific region as one of the four Directors.

Dato’ Esther Tan also sits on the Board of Poh Kong HoldingsBerhad and is the Chairperson of the Audit Committee and amember of the Risk Management Committee of the Company.

Dato’ Esther Tan does not have any family relationship with anyDirector and/or major shareholder of the Company, nor anyconflict of interest with the Company.

She has not been convicted of any offence within the past fiveyears and has no public sanction or penalty imposed by therelevant regulatory bodies during the financial year ended 30June 2018.


Malaysian

Male

58 years old

GROUP CHIEF EXECUTIVE OFFICER

MR K. MOHANACHANDRAN A/L K.R. KUNJAN

Mr K. Mohanachandran a/l K.R. Kunjan, was appointed as Group Chief Executive Officer of M K LandHoldings Berhad on 1 February 2017.

Mr Mohan graduated from Universiti Malaya, Kuala Lumpur with a Honours Degree in Civil Engineering.

He started his career in a soil investigation contracting company in 1983 before joining a building and civil workscontractor working on the Royal Malaysian Air Force, Subang Base Project as well as the Penang Bridge Project.Subsequently he started work with a reputable housing development company in Taiping, Perak in 1986 andhas been involved in the property development industry ever since.

Mr K. Mohanachandran a/l K.R. Kunjan does not hold any directorship in other public companies and listedissuers.

He does not have any family relationship with any of the Directors and/or major shareholders of the Company,any conflict of interests with the Company nor any interest in the securities of the Company and/or itssubsidiaries.

He has not been convicted for any offence within the past 5 years and has no public sanction or penalty imposedby the relevant regulatory bodies during the financial year ended 30 June 2018.

Key Management

The Key Management are Executive Chairman (“EC”), Executive Director (“ED”) and the Group Chief ExecutiveOfficer. The profiles of the EC and ED are outlined in the Board of Directors Profile on page 6 to 7.

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12


MANAGEMENT TEAM


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Management Team

Sitting:

MR K. MOHANACHANDRAN A/L K.R. KUNJANGroup Chief Executive Officer

Back, from left ro right:

1. TN HJ KAMARULZAMAN BIN ABU BAKARGroup Senior General Manager (Northern Projects)

2. MR CHARLES DUNCANSenior General Manager (Damansara Perdana)

3. PN NORIDA BINTI ABU KASSIMSenior General Manager (Ipoh Projects)

4. TN HJ ZULKIPLI BIN SIDINGroup Senior General Manager (Taman Bunga Raya, Langkawi and Cyberjaya)

5. MR CHIN KOK SIONGFinancial Controller

6. PN ELYA WIRDATI BINTI MD NASIRActing Head, Leisure & Education

7. PN ALIZA BINTI AHMAD TERMIZICompany Secretary

8. TN HJ ZULKIFLI BIN MOHD ISAHead of Shared Services

9. EN MUSTAFA KAMAL BIN HAWARISenior General Manager (Damansar Damai)

10. TN HJ AZHAR BIN OTHMANHead of Group Strategic Planning, Business Development and Corporate Services




CARING FOROUR CUSTOMERS

Our customers are vital for the survival and success of our company. We are determined to anticipate and exceed their expectations at all times in order to ensure our continued progress.

AND THE COMMUNITY




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EVENT HIGHLIGHTS2018

M K LANDFAMILY DAY

Executive Chairman, Puan Hjh Felina Binti TanSri Datuk (Dr) Haji Mustapha Kamal officiatedHari Keluarga M K Land at Stadium UniversitiMalaya, Kuala Lumpur.

25 FEBRUARY 2018

CHINESE NEW YEAR CELEBRATION

Financial Controller, Mr Chin Kok Siong, and Senior GeneralManager, Encik Mustafa Kamal Hawari attended the ChineseNew Year Celebration at site project of ResidensiSuasana@Damai.

27 JANUARY 2018

CONTRIBUTION TO PUSAT PEMULIHAN DALAM KOMUNITI(PDK) BRIDGED 2, IPOH

Executive Chairman of M K Land HoldingsBerhad, Puan Hjh Felina Binti Tan Sri DatukDr Hj Mustapha Kamal with members of theKelab Sukan dan Kebajikan (KSK) M K Land committee, visited and presentedequipment donation to the Pusat PemulihanDalam Komuniti (PDK) Bridged 2, Ipoh. Alsoin attendance Panglima 2 Bridged, Brig JenDatuk Mohd Nizam Bin Haji Jaafar.

16 OCTOBER 2017


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3 MARCH 2018

DAMANSARA PERDANA STREET FESTIVAL

Damansara Perdana Street Festival was heldthe first Saturday of every month forDamansara Perdana residents. Visitorsentertained by buskers and a foodtruck andcarboot sales were on location.

10 APRIL 2018

MoU SIGNING CEREMONY BETWEEN ECOPARKBUKIT MERAH LAKETOWN RESORT ANDPERHILITAN

Ecopark Bukit Merah Laketown Resort (BMLR) andPERHILITAN signed a MoU with the purpose toencourage partnership in providing a place for wildlife andtraining for staff in interaction with wildlife. BMLR wasrepresented by Mr Chin Kok Siong and PERHILITAN wasrepresented by Datuk Abdul Kadir Bin Abu Hashim, KetuaPengarah PERHILITAN.

25 MAY 2018

BREAK FAST EVENT WITH ORPHANS OF RUMAHAMAL CAHAYA KASIH BESTARI, SUBANG BESTARI

M K Land via Kelab Sukan dan Kebajikan organisedBreak Fast event with orphans of Rumah Amal CahayaKasih Bestari, Subang Bestari. The ceremony was held atRafflesia Sales Gallery, Damansara Perdana andattended by Senior Management, staff and 40 childrenfrom the welfare home.

Event Highlights 2018


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26 JUNE 2018

M K LAND HOLDINGS BERHADAIDILFITRI OPEN HOUSE EVENT

Executive Chairman of M K Land Holdings Berhad, Puan Hjh Felina BintiTan Sri Datuk (Dr) Haji Mustapha Kamal attended the M K Land Aidilfitri openhouse event at Damansara Perdana. The event was also attended by Boardof Directors, senior management, staff and stakeholders.

2 JULY 2018

AZALEA HOME KEY HANDOVERCEREMONY AND AIDILFTRI OPEN HOUSE

Executive Chairman of M K LandHoldings Berhad, Puan Hajah Felina BintiTan Sri Datuk (Dr) Haji Mustapha Kamalattended the Azalea home key (93 units)handover ceremony and Aidilftri OpenHouse at Meru Perdana, Ipoh, Perak.Also present was Group Chief ExecutiveOfficer, Mr K. Mohanachandran.

1 JUNE 2018

PROPERTY INSIGHT PRESTIGIOUSDEVELOPER AWARDS 2018

M K Land won two awards during Property InsightPrestigious Developer Awards 2018 which are BestLifestyle Oriented Development and Best BeachResort Destination.



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8 JULY 2018 21-22 JULY 2018

MAJLIS JALINAN SYAWAL KASIH MAJLISAGAMA ISLAM DAN ADAT ISTIADATMELAYU PERLIS (MAIPs) MENYANTUNIANAK YATIM NEGERI PERLIS TAHUN 2018

Raja Muda Perlis, Tuanku Syed Faizuddin PutraJamalullail and Raja Puan Muda Perlis, TuankuHajah Lailatul Shahreen Akashah Khalilattended the Majlis Jalinan Syawal Kasih MajlisAgama Islam Dan Adat Istiadat Melayu Perlis(Maips) Menyantuni Anak Yatim Negeri PerlisTahun 2018 at Ombak Villa Langkawi. Also inattendance Chief Executive Officer of MAIPs,Mohd Nazim Mohd Noor dan ExecutiveChairman of M K Land Holdings Berhad, PuanHjh Felina Binti Tan Sri Mustapha Kamal. Totalof 171 orphans from seven welfare homes inPerlis participated in the event this year.

14-16 AUGUST 2018

OCCUPATIONAL, SAFETY AND HEALTH WEEK AT LAKE VIEWCOLLEGE, BUKIT MERAH

Occupational, Safety and Health week 2018 (OSH WEEK) organisedby Lake View College, Bukit Merah was attended by practitioners andschool students.

The event was officiated by Pengarah Jabatan Kesihatan Pekerjaan(JKKP) Perak, Ir Haji Mohd Hatta Bin Zakaria. Also in attendance wasChief Executive Officer of M K Land, Mr K. Mohanachandran.


UPSR INTENSIVE BOOT CAMPS AT BUKIT MERAH LAKETOWNRESORT, BAGAN SERAI, PERAK

A Corporate Social Responsibility programme by M K Land where fewvolunteers from M K Land joined the UPSR Intensive Boot Camp held atBukit Merah Laketown Resort. 112 students from Sekolah KebangsaanAlor Pongsu and Sekolah Kebangsaan Kampung Selamat participated.


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MoU SIGNING CEREMONY BETWEENMENTERI BESAR INCORPORATED (MB INC) AND M K LAND HOLDINGSBERHAD

Menteri Besar Perak, YAB Tuan AhmadFaizal Bin Dato’ Azumu and ExecutiveChairman M K Land Holdings Berhad, PuanHjh Felina Binti Tan Sri Datuk (Dr) HajiMustapha Kamal witnessed the MoUsigning between MB Inc and M K Land todevelop affordable homes at Simpang PulaiPerak. The event took place at RafflesiaSales Gallery, Damansara Perdana.

15 AUGUST 2018

18 AUGUST 2018

GROUND BREAKING CEREMONYOF RUMAH SELANGORKU ATTAMAN BUNGA RAYA, BUKITBERUNTUNG

MERDEKA DAY CELEBRATION WITH PDK LANGKAWI

Menteri Besar Selangor, YAB TuanAmiruddin Shari and ExecutiveChairman of M K Land HoldingsBerhad, Puan Hjh Felina Binti Tan SriDatuk (Dr) Haji Mustapha Kamalofficiated the ground breaking forRumah Selangorku at Taman BungaRaya, Bukit Beruntung, Selangor.

Executive Chairman of M K Land Holdings Berhad, Puan Hjh Felina Binti Tan SriDatuk (Dr) Haji Mustapha Kamal The Executive Chairman welcomed challengedchildren of Pusat Pemulihan Dalam Komuniti (PDK) Langkawi and celebrated HariMerdeka at Ombak Villa, Langkawi.

22 AUGUST 2018


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26 AUGUST 2018

FIRE RELIEF CONTRIBUTION TOMADRASAH IDRISIAH,KUALA KANGSAR

M K Land Holdings Berhad, through Kelab Sukan dan Kebajikan (KSK)delivering donations to Madrasah Idrisah which was almost destroyed by fire.Attended by President KSK, Encik Shahrul Hamkha Bin Abdul Hamid.

29 SEPTEMBER 2018

DAMANSARA PERDANA MID AUTUMN TANGLUNGFESTIVAL

Damansara Perdana Mid Autumn Tanglung Festival washeld at Rafflesia Sales Gallery on 29 September 2018.Public that joined the event were guided to Rafflesia newshow units in an evening of amazing discoveries.

19 SEPTEMBER 2018

STORM RELIEF CONTRIBUTION TO OMBAK VILLA STAFF, LANGKAWI

M K Land Holdings Berhad, through Kelab Sukan danKebajikan (KSK) delivering donations to Ombak Villa staff,victims of storm. Donations provided in the form of homefurnishings delivered by the President of the KSK, EncikShahrul Hamkha Bin Abdul Hamid.


OVERVIEW OF GROUP’S BUSINESS

The financial year 2018(“FY2018”) was challenging asthe property market remained

soft, coupled with otherfactors, including, stringent

bank lending policies,continued rise in the cost of

living, softer labour market andaffordability issues. Such

circumstances have called formost developers, including M K Land Holdings Berhad

(“M K Land”), to be cautious inlaunching new projects or

products in the market in thisperiod. Taking into

consideration the unfavourablemarket trend, M K Land has

taken a stand to defer some ofour launches and focus on

locations where we areconfident that the take up ratewill be encouraging as well as

in offering affordable homes inthe near term.

Property development remains the mainstay of the Group andcontributed RM157 million, representing 86% of the totalrevenue for the Group. Majority of the revenue contribution forFY2018 comes from the sales and construction progress ofproperties sold from our on-going projects and completedproperties in Damansara Perdana and Damansara Damai in theCentral region, followed by Meru Perdana and Klebang Putra inthe Northern region.

During the year under review, we completed 282 units of houses witha Gross Development Value (“GDV”) of RM90.5 million in ourNorthern projects, namely Meru Perdana and Klebang Putra.

We have deferred launches in the Central region, particularly inDamansara Perdana and Damansara Damai, where we continue tofocus on clearing the current inventory to further improve ourcashflow position. We plan to launch the new phase of our Rafflesiaproduct, 24 units of three storey semi-detached houses inDamansara Perdana and 260 units of condominium in Tower C ofResidensi Suasana@ Damai in Damansara Damai, with total GDVof RM67 million and RM159 million, respectively.

The affordable and mid- level priced products remain the favourablecategory in the property segment at this particular period. Given therise in the cost of living and soft labour market, we have experiencedencouraging response for our mid-market residential products in theNorthern region, namely, Meru Perdana and Klebang Putra in Ipoh,Perak. Subsequently, we launched new phases in both projects, atotal of 200 units of double storey houses in July 2017 and May 2018,respectively, with built-up area from 1,497 square feet to 1,842square feet, and priced from RM298,567.

The Group is currently focused on launching the subsequent phasesin Damansara Perdana, and, Meru Perdana and Klebang Putra inIpoh in FY2019 as well as two launches for the affordable homesproject in Taman Bunga Raya, Bukit Beruntung, Selangor.

During the year under review, the tourism and leisure industry sawa decrease in tourist arrivals by 2.5% to 21.5 million in the first 10months of 2017, in comparison to 22.1 million in the same period in2016. Our leisure segment saw a modest increase in averageoccupancy by 0.3% to 39.3% in FY2018 despite the downtrend ofthe tourism industry.

MANAGEMENT DISCUSSIONAND ANALYSIS

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23


MR K. MOHANACHANDRANA/L K.R. KUNJAN

Group Chief Executive Officer

Management Discussion and Analysis


Although the leisure and education segments contribute only about 14% to the Group’s overallrevenue, we will continue to focus in ensuring the activities carried out in these segments are wellorganised and publicised as they create visibility and presence for M K Land in the market.

REVIEW OF GROUP’S OPERATIONS

M K Land has been listed in Bursa Malaysia since 1999 and is involved in the property development,leisure and education businesses.

PROPERTY DEVELOPMENT SEGMENT

In view of the weak market environment in FY2018, attributed by various factors, such as, lendingconstraint for homebuyers, increase in cost of living and uncertainty in job security, have led to morecautious consumer spending, we have been cautious in new launches. This measure is employedso as not to further add to the oversupply in the market and focus on our current inventory.

However, the demand for affordable homes will continue to increase, given the current economicsentiment as well as the support from the State Governments to encourage property players toalleviate the housing problem of the people. This is also in line with the Group’s objective to focusin providing quality affordable homes within well-planned living environments.

During the year under review, the main focus has been the monetisation of inventory in ourcompleted projects. Capitalising on the current strong demand in our Ipoh projects, we launchedthree products, namely, Cattleya 1 in Meru Perdana 2, Emerald 3 and 5 in Klebang Putra, totalling200 units with GDV of RM71 million. The response since launch in May 2018 has been encouraging.

In FY2018, we achieved sales of RM117 million despite the challenging market conditions whichprevailed throughout the year. Overall, our effort has been to sell our completed products and paceout new launches over the coming years.

In our efforts to clear the inventory as well as to promote our latest property and leisure products,we held our inaugural Property Showcase at The Curve, Mutiara Damansara, Selangor in January2018 and the response has been very rewarding.

Presently, the Group’s remaining landbank stands at about 4,800 acres with a potential GDV ofRM16 billion.

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ON-GOING PROJECTS - CENTRAL REGION

For the year under review, our main on-going projects have been in Damansara Perdana and Damansara Damai in the Centralregion and Klebang Putra and Meru Perdana in the Northern region.

Damansara Perdana

Armanee Terrace Condominium (Blk B) Rafflesia - Parcel Metropolitan SquareProject Name (“ATC”) B1 (Commercial - Blk D)

Launched GDV RM584.7 mil RM133.3 mil RM172.4 milSales up to FY2018 RM518.5 mil RM 68.6 mil RM134.4 mil



Located in the Golden Triangle of Petaling Jaya (“PJ”), Damansara Perdana (“DP”) has convenientaccess to all areas within the Klang Valley and beyond, via the Lebuhraya Damansara Puchong(“LDP”), Penchala Link and the New Klang Valley Expressway (“NKVE”). It is also accessible to theMRT Line 1 via the station in Mutiara Damansara, which is about 1km away and served by feederbuses. DP is set to be the preferred location for residences and businesses in the North PJ area.In addition to that, it is also close to renowned shopping and entertainment centres such as TheCurve, IKEA, Ikano, 1 Utama, Starling and Tropicana City Mall as well as hotels, several colleges,schools (international, private and national) and many more amenities and facilities.

DP is our first mixed high-end property development with a GDV to date close to RM3.6 billion.

Our main focus in FY2019 will be to clear the remaining completed units of ATC, Rafflesia and MSQoffices while preparing for the launch of our Rafflesia B2 parcel of semi-detached houses. In thefirst quarter of FY2019, we received good response for both ATC and Rafflesia although theseproducts are priced between RM1.0 million and RM4.0 million. We have also received enquiries forour MSQ Office with the recent completion of our two types of show units.

Our immediate plan for the remaining undeveloped landbank of about 196 acres in DP is to reviewand revitalise the current overall masterplan to optimise and improve the product offerings in DP.


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Damansara Damai

On-going Project

Project Name Suasana @Damai (Tower A & B)

Launched GDV RM248.6 milSales up to FY2018 RM161.5 mil

Damansara Damai (“DD”) is amongst our first developments in the Klang Valley and this 400-acredevelopment was to support the Selangor State Government’s plans to reduce the squatter issuein the State to zero by 2005. Today, DD is a popular choice for affordable living as the township issupported by four green parks, modern infrastructure, good road connectivity and many facilitiesand amenities. It is located within the vicinity of several malls such as 1Utama, The Curve andIkano. Also situated nearby are hospitals and several government and private schools. In additionto that, DD is easily accessible via the main highways, namely the NKVE, LDP, Lebuhraya Duta -Ulu Kelang (DUKE), Jalan Kepong - Sungai Buloh and Jalan Lingkaran Tengah 2 (MRR2). Thistownship is also accessible by multiple public transport options such as buses, taxis as well as theMRT.

In view of the growing population in DD, reaching close to 100,000, Majlis Bandaraya Petaling Jaya(“MBPJ”) has taken efforts to further improve the road infrastructure with the recent construction ofa new road of approximately 1km which will serve as an alternative egress to the NKVE Sg Bulohtoll and is expected to be completed by end 2018.

To promote a harmonious and healthy lifestyle within the DD township, we are working closely withMBPJ and the existing community to take care of the cleanliness of the area and maintenance ofall facilities and amenities.


Residensi SuasanaFacade


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Residensi Suasana @ Damai, centrally located in DD, was launched in July 2016 to overwhelming response. It commands aGDV of approximately RM408 million, from 780 units in three towers. Tower A has now reached 53% completion and isscheduled to be completed by September 2019. We offer three types of units, spaciously designed with built-up area rangingfrom 1,015 to 1,451 square feet, affordably priced from RM450,300. During the year under review, two towers, namely TowerA and B, have been launched with take up rate of 88% and 46%, respectively. In April 2018, we commenced construction ofTower B which is scheduled to be completed by May 2020. Construction for both towers is progressing as scheduled.

This state-of-the-art-living space sits on 5.56-acres of land, offering residents good lifestyle facilities and amenities. On top ofthat, residents will also enjoy the greenery and serenity of the four existing urban parks within DD, totalling 43 acres of forestwhich can be utilised for recreational activities such as jogging, picnics, trekking, herbal farming and many more.

Taman Bunga Raya

Taman Bunga Raya (“TBR”), located in Bukit Beruntung,Selangor, spans approximately 518 acres and is one of ourfirst affordable housing projects where we have deliveredmore than 11,000 affordable houses, ranging from low tomedium cost units. It is approximately a 40-minute drivefrom Jalan Duta Interchange and Damansara Interchangevia the PLUS Highway and NKVE.

In view of the increasing demand for affordable homes, ourupcoming project in TBR will be the Rumah SelangorKuhouses on 91.3 acres comprising 1,385 units of double-storey terrace houses with a GDV of approximately RM333million. On 18 August 2018, the ground breaking ceremonyfor Rumah SelangorKu project was officiated by theSelangor Menteri Besar, YAB Tuan Amirudin Shari and thesales launch is targeted for January 2019.


Ground breaking ceremony at Taman Bunga Raya

Interior design ofSuasana @ Damai


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ON-GOING PROJECTS - NORTHERN REGION

Meru Perdana

Project Name Azalea

Total GDV RM43.8 milSales up to FY2018 RM29.1 mil

Meru Perdana is a township development that sits on two parcels of land totalling 190 acres, located opposite each other, along the main Jelapang - Chemor road and referred to as MeruPerdana 1 and 2, with an estimated GDV of RM542 million, out of which RM425 million has beenlaunched.

Meru Perdana is situated near Government offices such as Kementerian Dalam Negeri (KDN),BOMBA, Pejabat Akauntan Negara and SPRM and is about 2km away from the Movie AnimationPark Studio (“MAPS”).

Most of the previous product launches have been fully sold and completed. Our latest launch inFY18, comprise 63 units of Cattleya terrace houses with estimated GDV of RM26.3 million.


MeruPerdana


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Klebang Putra

Project Jade Ruby Emerald 2 Emerald 3 Emerald 4

Launched GDV RM7.9 mil RM38.3 mil RM8.2 mil RM10.8 mil RM23.4 milSales up to FY2018 RM7.4 mil RM36.1 mil RM7.9 mil RM 8.9 mil RM20.2 mil

Located in a matured area with affordable houses, Klebang Putra sits on a 240-acre land in Ipoh,Perak, with an estimated GDV of RM453 million, out of which RM322 million has been launched.It offers low density terrace houses with clubhouse facilities, such as swimming pool, multipurposehall, café and meeting room. It is a short drive away from the many commercial and recreationalamenities in Ipoh area.

Similar to Meru Perdana, most of the previous product launches have been fully sold. Our latestlaunch in FY2018 comprise 103 units of terrace houses with an estimated GDV of RM34 million.


KlebangPutra

We are working with the relevant authorities and surrounding landowners to complete the connecting road between KlebangPutra and Meru Perdana. This will reduce the travelling time between the two developments and hasten the growth of theentire Meru area.

Bukit Merah Laketown and Bandar Technopolis Perdana

While we focus on the development of our on-going projects, we are re-evaluating our undeveloped landbank, particularly inBukit Merah Laketown (“BMLT”) and Bandar Technopolis Perdana (“BTP”) to optimise the potential of both projects.

We have engaged master planners and architects to propose new components for both the landbanks to help revitalise the1,650-acre BMLT and the 2,900-acre BTP.


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Ombak Villa

Ombak Villa sits on a 10-acre site located at Padang Matsirat,Langkawi, with emphasis on a perfect blend of traditionalancient Kedah Malay architecture and contemporary interiordesign. It offers 76 units of Ombak Suite, two units of theextravagant Seroja Honeymoon Suite and the luxurious three-bedroom Villa Seri Kasturi.

LEISURE SEGMENT

The Group has two distinctive tourist attractions in Kedah andPerak - the Ombak Villa Langkawi and Bukit Merah LaketownResort - that cater to international tourists and the domesticmarket.

Overall, our leisure segment saw a slight decline of 1.9% inrevenue from RM24 million in FY2017 to RM23 million inFY2018.

Ombak Villa remains as the main revenue driver in the leisuresegment in FY2018 which contributed RM13 million in revenuerepresenting 57% of the overall revenue of the Group’s leisuresegment. The leisure segment continues to experience highoccupancy in FY2018. Being awarded the Best Beach ResortDestination in the Prestigious Developer Awards 2018 byProperty Insight, allows us to reposition Ombak Villa as a five-star hotel.

We will continue to focus our marketing efforts targetting theoverseas leisure markets, especially the Middle East, China,India and ASEAN as well as reaching out to Europe,Australasia, Japan, Korea and US markets.

Further south in Perak, Bukit Merah Laketown Resort whichincludes the water theme park, contributed about RM8 million,representing 35% of the overall revenue in the Group leisuresegment. Revenue has increased by 9% from FY2017 wherea total of 406,545 visitors were recorded in FY2018.


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Bukit Merah Laketown Resort

Surrounded by lush greenery and fronting a 7,000-acre freshwater lake, the resortis only a three-hour drive from Kuala Lumpur and is easily reached just off the BukitMerah toll exit along the North-South Expressway. Being one of the premier eco-tourism destinations in the Northern region, the resort offers a wide variety ofattractions including the exciting waterpark and the educational eco-park where youcan experience nature by interacting with friendly animals and recreational activitiesfor teambuilding, fun and leisure.

Bukit Merah Laketown Resort (“BMLR”) offers a variety of accommodation, all inone location, from standard hotel rooms to the luxurious 'kampung' chalets by thelake. The more adventurous can try out a camping holiday at the lakeside campingground.

Apart from regular meetings and teambuilding activities in BMLR, a few majorevents took place during the year under review, among others, the InternationalVarsity Boat Race and the International Dragon Boat Race, which were held inOctober 2017 and April 2018, respectively.

EDUCATION SEGMENT

The education segment strives to serve the community within the region as its maincatchment while complementing the leisure and property businesses in Bukit MerahLaketown. To date, Lake View College (“LVC”) has produced 1,400 Diploma nursinggraduates.

Two additional programmes, namely, Diploma in Tourism Management and Diplomain Business Management, were introduced to the existing list of five programmes.

In FY2018, we introduced several new short courses under Human ResourcesDevelopment Fund (HRDF) to improve the revenue in our education segment.

Employability upon graduation is one of the major concerns of graduates andparents. In this regard, we are cross-linking the curriculum content to suit industryrequirements as well as arranging the relevant internship programmes to enhancethe employability of the graduates.

Kuala Melaka Inn

Kuala Melaka Inn offers space, comfortand value-for-money accommodation forour guests. This 69-room hotel is ideallylocated with convenient access to manyother major tourist attractions, such asCenang Beach, Padang Beras Terbakarand Atma Alam Batik Art Village. Itsspacious accommodation is perfect forboth leisure and business at anaffordable price and is one of thefavourite stays especially forbackpackers and budget travellers.



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FINANCIAL PERFORMANCE REVIEW

2014 2015 2016 2017 2018Financial year ended 30 June RM’000 RM’000 RM’000 RM’000 RM’000

Key Items of Financial Performance Revenue 488,747 488,316 295,063 192,360 181,878Profit before tax 71,448 73,029 32,164 38,037 44,053Profit after tax 65,698 53,963 16,328 18,133 24,499

Key Items of Financial Position Total assets 1,980,913 1,933,957 1,794,279 1,648,977 1,563,984Total borrowings 93,067 76,543 44,382 54,856 62,555Total equity 1,146,757 1,164,582 1,156,818 1,174,951 1,199,450Total number of shares (‘000) 1,204,590 1,204,590 1,204,590 1,204,590 1,204,590

Key Financial Indicators Basic earnings per share (Sen) 5.5 4.5 1.4 1.5 2.0Net assets per share (RM) 0.95 0.97 0.96 0.98 1.00Gearing ratio (%) 8.1 6.6 3.8 4.7 5.2

Despite the challenging business environment in FY2018, Profit After Tax (“PAT”) improved although there was a 5% decreasein revenue. The Group posted a pre-tax profit of RM44 million, a 16% increase from RM38 million recorded in FY2017 mainlydue to a one-off gain of RM67 million from the sale of nine parcels of land in Perak by a subsidiary. The Group’s PAT for FY2018stood at RM24.5 million, a 35% increase from RM18 million in the previous year.

Our balance sheet remains healthy with the Group’s total cash and bank balances standing at RM59 million. Although this isa decrease of 22% compared to RM76 million in FY2017, it is mainly due to the increase in cash used to partly finance theconstruction of on-going projects. Our gearing ratio as at FY2018 remains low at 5.2%.

Given our financial position, we will be able to fund our planned development activities in the coming year.

PROSPECTS AND STRATEGIES

In view of the current challenging market and uncertain economic conditions, and in line with our commitment to improve, growand enhance our fundamentals while continuing wealth creation for shareholders in the long run, we have revisited our five-year Strategic Business Plan.

While we remain cautious in our business activities, we are committed and determined to be more innovative in addressingthe following key areas:-

• Continuous Launching of New Projects;• Review of Strategic Landbank Masterplans; • Stabilising Financial Position;• Branding Enhancement; and• Enhance Human Capital Development



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PROPERTY DEVELOPMENT

As we enter into the new financial year, the Group is cautiously optimistic of the prospects in FY2019. Apart from our continuouseffort to focus on the sale of the completed units to strengthen our cash flow position, we will selectively launch products in theCentral and Northern regions, mainly, Damansara Perdana and Meru Perdana.

Hence, our upcoming strategies moving into FY2019 can be broadly classified into three focus areas, namely, masterplanrevision, launching of affordable homes and developing a customer centric culture whilst continuing to improve our operationalefficiency.

M K Land plans to launch five residential products within the Central and Northern regions, comprising Phase B2 of Rafflesiain DP, Rumah SelangorKu in TBR and Emerald 6 in Klebang Putra in Ipoh. The launching of the said products is expected tocommence in first quarter of 2019.

We are committed to providing affordable homes within Klang Valley and Perak and in ensuring the homes built are of qualityand value for money. In view of this, we have expanded our presence, especially in Perak, with the Memorandum ofUnderstanding (“MoU”) inked with Menteri Besar Incorporated (Perak) on 15 August 2018.

The MoU is for a mixed development consisting of affordable housing and commercial units which is targeted for launch inFY2019. Through this collaboration, we will position ourselves as one of the best property developers in providing qualityaffordable homes.

LEISURE

International tourist arrivals to Malaysia in 2017 decreased by 3.0% year-on-year to 25.9 million, short of the 31 million targetset for the year.

Going forward, the Tourism Integrated Promotional Plan 2018-2020 has been formulated to tackle existing challenges and toimprove Malaysia’s tourism performance. The plan highlights six strategies which includes optimising the use of technology,leveraging on upcoming major events, synergising with the development of mega projects, enhancing initiatives made underthe NKEA, maximising integrated marketing campaigns and promotion of Malaysia as a filming destination

Langkawi

In view of the above, the business for our leisure in Langkawi can potentially grow from both the leisure and meeting, incentives,conferences and exhibition (“MICE”) markets with majority contribution from the leisure segment.

The leisure market is strongly supported via online travel agents, travel agent wholesalers and travel agent retailers whilst theMICE market comes primarily from corporate companies and international events.

The top three markets supporting us are mainly from the Middle East, China and Malaysia which altogether represents 73.9%from the total room night production for FY2018.

Other markets which have shown positive growth are Singapore and South Asia. Our plans moving forward are to ensureparticipation in Tourism Malaysia’s (TM) and Langkawi Development Authority’s (LADA) pavilion in selected international tradeshows i.e. Arabian Travel Market (ATM), Pacific Asia Travel Association (PATA) Travel Mart and International Tourism Bourse(ITB) Asia and other organised events based on TM’s and LADA’s Calendar of Events.

The most significant event will be the upcoming Langkawi International Maritime & Aerospace (LIMA) Exhibition in March 2019where our Ombak Villa resort has always been selected to be one of the official hotels for the event.

Our goal for Ombak Villa is to achieve a 5-Star Rating from the Ministry of Tourism, Arts and Culture (MOTAC) in the near termto help make the property more competitive amongst the other 5 star resorts in Langkawi.



Bukit Merah Laketown Resort

While we continue to cater to the domestic market, we foresee potential revenue growth from theoverseas market through Tourism Perak sales missions to Thailand and Indonesia to promote Perakas a premier tourism destination in Malaysia. Soon, there will be a direct flight between Bangkokand Ipoh, which will potentially increase tourist arrivals.

Events in BMLR that will excite visitors are the International Varsity Boat Race and InternationalTriathlon taking place in October 2018.

The new waterpark attractions which will be launched in December 2018 will feature new wateractivities, namely, Mini Tornado, four lane Racer slide and New Waterplay System to replace theold Perak Mining Pool for kids.

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EDUCATION

Education services is very reliant on product lifecycle for increasing revenue. Moving forward, the College intends to providefurther educational pathways through collaborative efforts with renowned higher learning institutions.

The college motto “Your Career Starts With Us” helps focus our efforts towards increasing the employability of our graduatesby providing them industry specific knowledge and skills.

FORWARD LOOKING STATEMENT

The main focus for FY2019 will be working on the revitalisation of the masterplans to optimise the value of the landbanks. Weremain focused in striving to achieve the objectives and goals of our revised 5-year Strategic Business Plan.

Moving ahead, we are also on the lookout for new landbank in Perak, Melaka and neighbouring states to provide moreaffordable homes to society.

Our focus is to further strengthen our position in the property market by making every effort to improve the current systemsand processes as well adding value to our on-going and future projects. We will continue to enhance our human capital anddevelop a customer centric culture in order to elevate the brand to the next level.


SUSTAINABILITY STATEMENT

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Sustainability Statement

The Board recognises its accountability for the integration of sustainability into its culture, anddelivering to these expectations is a key focus of the Company through every facet of itsoperations.

This is amplified in the Company’s adoption of sustainable business practices in the economic,environment and social spheres.

A balance is managed by the Company to protect the interests of stakeholders, including,investors, customers, employees, suppliers and local communities, by creating a positiveimpact wherever and whenever possible.

Economic

In ensuring continuity, the Company favours and savours long-term relationship throughoutthe value chain of suppliers, as it delivers known quality, acceptable costing, and, quickresponse time.

To bolster the business and the skill sets of Malaysian entrepreneurs, the Company utilisesthe services of Malaysian contractors and subcontractors in its development of residential,commercial and hospitality properties.

Wherever the projects are located, efforts are maximised to procure the services of vicinity-centricsubcontractors and suppliers to enable them opportunities to grow and provide jobs.

In vacation destinations where the Company’s hospitality properties are located, employment ofthe local community has given rise to economic benefits filtering down to thousands of people.

Guests to these hospitality properties have also supplemented the income of the localcommunity through purchase of fruit originating from local orchards and handicraft producedby local artisan cottage industry.

The Company makes it a practice to make available funds for activities carried out by the localcommunity, in the form of donations in cash and in kind, all of which translates into communityinvestment.

Details on the Company’s community activities can be found in the Event Highlights 2018section.

Water theme park at Bukit Merah Resort as one of touristattractions at Bukit Merah. Graffiti painting as one of the new attractions at

Bukit Merah


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Sustainability Statement

Environmental

All consumption of energy is closely monitored, and, one of the most productive results is the usage of LED lights and otherenergy-saving lights at all of the Company’s premises, including within the hospitality properties.

In the building and the refurbishment of the hospitality properties, where possible, only eco-friendly material is used, such aswood with origins from sustainable forests.

To keep pollution at the barest minimum, the boats at Bukit Merah lake run on petrol 4 stroke engines instead of diesel, and,the internal transport vehicles are run on electricity.

Social

Employees are the Company’s greatest assets and happiness atwork leads to increased productivity.

To drive rest and relaxation, Company-funded Social and SportsClubs are encouraged to run periodic activities of various natureto draw and sustain the interest of employees and their families.

Employees are also inculcated with the responsibility to assist withactivities within the local community.

Cultural festivities are celebrated on a company-wide scale to buildtogetherness and encourage better understanding of each other’scommunity.

The employee social club also engages and promotes employeebonding through events such as birthday celebrations.

To keep pollution at the barest minimum, the boats at BukitMerah Lake use petrol instead of diesel.

Kampung Air at Bukit Merah Resortgive a nature ambiance to the touristwhen they stay at Kampung Air.

M K Land staff at extracurricular activities at FamilyDay on January 2018



• Corporate Governance Overview Statement

• Audit and Risk Management Committee Report

• Statement on Risk Management and Internal Control


This Statement by the Board of M K Land Holdings Berhad (“M K Land” or “the Company”) provides shareholders and investorswith an overview of M K Land’s application of the three key Principles of good corporate governance as set out by the MalaysianCode on Corporate Governance 2017 (“MCCG” or “the Code”). M K Land’s application of each Practice under the threePrinciples during the financial year ended 30 June 2018 (“FYE2018”) is disclosed in the M K Land Corporate GovernanceReport (“Corporate Governance Report”) for FYE2018. The Corporate Governance Report is available on M K Land’s corporatewebsite at www.mkland.com.my

This Statement is to be read together with the Corporate Governance Report.

The Board of Directors (“the Board”) of M K Land is fully committed in adhering to the principles of the MCCG. The Boardconstantly strives to ensure that good corporate practices are carried out throughout the Company and its subsidiaries (“Group”)as fundamental to fulfilling its responsibilities, which include protecting and enhancing shareholder value as well as the financialperformance of the Company.

M K Land takes a proactive approach in observing high standards of corporate conduct with good corporate governance policiesand practices in ensuring the sustainability of the organisation and safeguarding the interests of the shareholders andmaximising long-term stakeholder value.

The Board oversees the overall strategic and operational business performance. The Audit and Risk Management Committee(“ARMC”) was established to assist the Board in discharging its functions in relation to internal controls, risk management,compliance with applicable laws and regulations, as well as reviewing internal policies and procedures. Together, they areentrusted to further fortify the levels of accountability and integrity in M K Land Group.

The Board considers that the Group has complied substantially with the principles and guidance as stipulated in the MCCGthroughout the FYE2018. The Board will endeavour to improve and enhance the corporate governance practices from time to time.

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS

I. Board Responsibilities

Board Charter

The Board is guided by a Board Charter, which among others sets out the roles and responsibilities of the Board, thedivision of authority and responsibilities of the Board and Management, terms of reference (“TOR”) and composition ofBoard Committees, and other administrative policies and procedures in relation to the operation of the Board as a whole.

The Board Charter has been reviewed on 8 October 2018 to ensure it remains consistent with the Board’s objective andresponsibilities, and all the relevant standards of corporate governance under the MCCG.

The Board Charter can be found from the Company’s website at www.mkland.com.my.

Roles and Responsibilities

The Board is primarily responsible for the Group’s overall strategic plans for business performance, overseeing the properconduct of business, succession planning of key management, risk management, shareholders’ communication, internalcontrol, management information systems and statutory matters; whilst Management is accountable for the execution ofthe expressed policies and attainment of the Group’s corporate objectives. The demarcation complements and reinforcesthe supervisory role of the Board. Nevertheless, the Board is always guided by the Board Charter which outlines the dutiesand responsibilities and matters reserved for the Board in discharging its duties. The Board Charter also acts as a sourceof reference and primary induction literature in providing insights to Board members and senior management.

The roles of the Executive Chairman (“Chairman”), Executive Director (“ED”) and the Group Chief Executive Officer(“GCEO”) are clearly defined, with each carrying out his duties and responsibilities within the Company. The Chairmanheads the Board and is responsible for ensuring the effectiveness of the Board. The ED oversees corporate matters andrisk management of the Group. The GCEO has overall management and executive responsibilities for the day-to-daybusiness operations and the implementation of the Board’s decisions.

The details of the roles and responsibilities of the Chairman, ED and GCEO are clearly stated in the Board Charter of theCompany.

CORPORATE GOVERNANCE OVERVIEW STATEMENT

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The Board has established policies determining which issues are delegated to the Board Committees or Management,subject to variation from time to time as determined by the Board.

Overseeing the Conduct of Businesses of the M K Land Holdings Berhad Group

The Board has delegated the Group’s executive responsibilities for day-to-day business operations to the GCEO and theBoard reviews the business performance of the Group quarterly. Management personnel are delegated with specific rolesand functions as assigned by the GCEO. Plans and operating procedures are in place for each function to ensure continuityand smooth business operations of M K Land Group. Performance of the Group in each business unit is reviewed andvariance analysis is conducted each month by the GCEO and reported at the quarterly Board Meetings. Managementprepares the budget annually and also draw up business plans for the next financial year. The budget and business plansfor the next financial year had been tabled to the Board for deliberation and approval in June & July 2018.

Board Committees

To assist the Board in the discharge of its duties effectively, the Board has delegated certain functions to the followingBoard Committees as follows:

(a) ARMC;(b) Nominating Committee (“NC”); and(c) Remuneration Committee (“RC”).

Each committee operates within clearly defined TOR and the details of which could be found in the Company’s website.The Board noted the decisions, recommendations and issues deliberated by the Board Committees through the minutesof these Board Committees. The composition and key functions of the Board Committees are summarised as follows:

(a) ARMC

The ARMC, comprising wholly Independent Non-Executive Directors (“INED”), is responsible to assist in providingoversight on the Group’s financial reporting, disclosure, regulatory compliance, risk management and monitoring ofinternal control processes within the Group. The ARMC reviews the quarterly results, unaudited and audited financialstatement, internal and external audit reports, related party transaction as well as risk management.

(b) NC

The NC consists exclusively of INED. The key functions of the NC include nomination of new Directors, annual reviewon the required mix of skills, experience and other requisite qualities of Directors as well as the annual assessmentof the effectiveness of the Board and Board Committees as a whole, and the contribution of each individual Directoras well as identify candidates to fill Board vacancies, and nominating them for approval by the Board.

(c) RC

The RC, which comprises entirely INED, is primarily responsible for recommending to the Board the remunerationof Chairman, ED and GCEO in all forms, drawing external advice, if necessary.

Support Services

The Board is supported by the Company Secretaries, who are qualified under the Companies Act 2016. The CompanySecretaries play an important role in facilitating the overall compliance with the Companies Act 2016, Main Market ListingRequirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) (“MMLR”) and other relevant laws and regulations.The Company Secretaries also assist the Board and Board Committees to function effectively and in accordance withtheir TOR and best practices in ensuring adherence to the existing Board policies and procedures. The roles andresponsibilities of the Company Secretaries have been formalised in the Board Charter which provides reference forCompany Secretaries in the discharge of their roles and responsibilities.

The Company Secretaries have also been continuously attending the necessary training programmes, conferences,seminars and/or forums so as to keep themselves abreast with the current regulatory changes in laws and regulatoryrequirements that are relevant to their profession and enabling them to provide the necessary advisory role to the Board.

The Board also have access to the advice of both External and Internal Auditors of the Company and any otherindependent professional advisers, at the Company’s expense.

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Corporate Governance Overview Statement


The Board via NC, reviews the Directors who are subject to re-election or re-appointment at the AGM by giving due regardto his/her performance and the ability to continue to contribute to the Board in terms of knowledge, skills and experiencerequired, and submit its recommendation to the shareholders for their approval.

Re-election and Re-appointment of Directors

In compliance with the Constitution, one-third (1/3) of the Directors, who have been the longest in office since their lastelection shall retire by rotation at each Annual General Meeting (“AGM”) and that a Director who is appointed during theyear shall be retired at the next following AGM. The constitution further provides that at least one-third of the Directors forthe time being or the number nearest to one-third shall retire from the office.

Independent Directors

The INED are independent of management and are free from any business or other relationship with the Company whichcould interfere with the exercise of their independent judgment. These will ensure unbiased and independent view in thedecision-making process.

To reinforce independence, the INED do not receive any performance based remuneration from the Company.

For FYE2018, the NC had reviewed and assessed the performance and independence of all the INED, including Ms AnitaChew Cheng Im (“Ms Anita Chew”), who has served the Board for a cumulative term of more than nine years, based onthe criteria as set out in Paragraph 1.01 of the MMLR. The Board had considered and was satisfied with the assessmentscarried out by the NC.

The Board shall seek shareholders’ approval to enable Ms Anita Chew to continue to serve as Independent Directors atthe 39th Annual General Meeting (“AGM”) based on the justifications as set out below:

(a) She has fulfilled the criteria under the definition of Independent Director as stated in the MMLR and will thus be ableto function as a check and balance, and bring an element of objectivity to the Board.

(b) She has vast experience in corporate finance which will enhance the Board’s diverse set of experience, expertiseand independent judgement.

(c) She has been with the Company for a cumulative term of more than nine years and has good knowledge of theCompany’s business operations and the property development market.

(d) She has devoted sufficient time and attention to her professional obligations for informed and balanced decision making.

(e) She has exercised due care during her tenure as an INED of the Company and carried out her professional dutiesin the best interest of the Company and shareholders.

Board Meetings

In order to discharge their responsibilities effectively, the Board meet regularly on a quarterly basis. Additional or SpecialBoard Meetings may be convened as and when necessary to consider and deliberate on any urgent proposals or mattersunder their purview and which requires the Board’s expeditious review or consideration. Such meetings will enable theBoard members to effectively assess the viability of the business and corporate proposals and the principal risks that mayhave significant impact on the Group’s business or on its financial position and the mitigating factors. All Board approvalssought are supported with all the relevant information and explanations required for an informed decision to be made.

Prior to the Board Meeting, the Directors will be provided with the relevant agenda and Board papers at least five businessdays’ notice to enable them to have an overview of matters to be discussed or reviewed at the meetings and to seekfurther clarifications, if any. The Board papers provide, among others the minutes of preceding meetings of the Board andBoard Committees, summary of dealings in shares by the directors or affected persons and directors’ circular resolutions,reports on the Group’s financial statements, operations, any relevant corporate developments and proposals.

In addition, there is a schedule of matters reserved for Board’s deliberations and decision, including among others, toreview, evaluate, adopt and approve the policies and strategic plans for the Company and the Group. The Board willensure that the strategic plans of the Company and the Group supports long term value creation, including strategies oneconomic, environmental and social considerations underpinning sustainability as well as to review, evaluate and approveany material acquisitions and disposals of undertakings and assets in the Group and any new major ventures.

During the FYE2018, a total of six Board Meetings and 13 Board Committees’ Meetings were held and the attendance isdisclosed in Practice 5.1 of the CG Report.

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Attendance in meeting

BODM ARMC NC RC

Hjh Felina Binti Tan Sri Datuk (Dr) Hj Mustapha Kamal (Resigned as RC member on 27/02/2018) 5/6 - - -

Lau Shu Chuan 6/6 - - -

Hjh Juliana Heather Binti Ismail (Appointed as ARMC member on 27/02/2018 and as NC Chairman and RC Chairman on 13/12/2017) 6/6 2/2 4/4 3/3

Anita Chew Cheng Im (Appointed as ARMC Chairman on 13/12/2017 and as RC member on 27/02/2018) 6/6 6/6 4/4 1/1

Dato’ Tan Choon Hwa @ Esther Tan Choon Hwa (Appointed as Director and ARMC member on 26/09/2017; and as NC and RC member on 27/02/2018) 4/5 4/4 1/1 1/1

Management personnel were invited to attend Board meetings to furnish additional details or clarification on matters tabledfor the Board’s consideration.

Directors’ Training

Directors’ Training is important to enable the Directors to equip themselves with the knowledge to discharge their dutiesmore effectively.

The Directors shall attend relevant training programmes conducted by external experts and in addition to this, internalmanagement shall, from time to time, provide updates regarding any latest amendments pertaining to the MMLR andstatutory provisions or new regulations and accounting standards imposed by the relevant authorities.

Annually, an In-house Directors’ Training is organised after the training needs of the Directors is reviewed by the Boardwhere the Board would consider whether the training should cover topic on regulatory updates, finance, accounting,taxation, risk management or corporate governance.

The In-house trainings attended by the Directors during the financial year under review is disclosed in Practice 5.1 of the MCCG.

Director Course

Hjh Felina Binti Tan Sri Datuk (Dr) • Companies Act 2016Hj Mustapha Kamal • The new Corporate Governance Report

Lau Shu Chuan • Companies Act 2016 • The new Corporate Governance Report • Embedding Risk in Daily Operations

Hjh Juliana Heather Binti Ismail • Companies Act 2016 • The new Corporate Governance Report • Embedding Risk in Daily Operations

Anita Chew Cheng Im • Companies Act 2016 • The new Corporate Governance Report • Embedding Risk in Daily Operations

Dato’ Tan Choon Hwa @ • Companies Act 2016Esther Tan Choon Hwa • The new Corporate Governance Report • Embedding Risk in Daily Operations

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Sustainability

In the course of pursuing the vision and mission of the Group, the Board acknowledges that practices which supportcorporate responsibility are keys to the sustainability of the Group. The Board believes no company can prevail bymaximising the shareholder’s value alone, and the needs and interests of other stakeholders must be taken intoconsideration.

More information is provided in the Sustainability Statement on pages 36 to 37 of this Annual Report.

Code of Conduct

The Company had on 8 October 2018 adopted a Code of Conduct for Directors and Senior Management relating to ethicalpractices. This is to ensure that all employees and Directors maintain and enforce the highest standards of ethics andprofessional conduct in the performance of their duties and responsibilities throughout the organisation.

The Board will periodically review the Code of Conduct. The Code of Conduct is available on the Company’s website atwww.mkland.com.my.

Whistle-blowing policy

The Group acknowledges the importance of lawful and ethical behaviours in all its business activities and is committed toadhere to the values of transparency, integrity, impartiality and accountability in the conduct of its business and affairs inits workplace.

The Group has in place a Whistleblowing Policy which serves as an internal disclosing channel in relation to whistleblowingat work place to enable employees to raise genuine concerns, disclose alleged, suspected or actual wrongdoings or knownimproper conduct at the workplace on a confidential basis without fear of any form of victimization, harassment, retributionor retaliation.

Employees have free access to the Senior Independent Director and/or the Head of Human Resources of the Companyand may raise concerns of non-compliance to them.

The Whistleblowing Policy, underlining its protection and reporting channels, is available on the Company’s website atwww.mkland.com.my.

II. BOARD COMPOSITION

Composition of the Board of Directors

The Board’s composition is well balanced with one Chairman, one ED and three INED. The Company is led and controlledby an experienced Board made up of professionals and entrepreneurs who have a diverse range of business, financialand technical skills and experience. The profiles of the Directors are set out in pages 6 to 10 of this Annual Report.

The present composition of the Board is in compliance with Paragraph 15.02 of the MMLR which requires at least one-third of its members to be Independent Directors.

The Board noted that Practices 4.1 and 4.2 of the MCCG has recommended for at least half of the Board members to beindependent directors and the tenure of an independent director does not exceed a cumulative term limit of nine years.Based on the review of the Board’s composition and assessment of individual Directors, the Board is satisfied that thecurrent INED are able to exercise independent and objective judgement and act in the best interests of the Companyeven though one of them has served the Board for more than nine years.

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Activities of the NC

The NC reviews annually, the effectiveness of the Board and Board Committees as well as the performance of individualDirectors. The evaluation involves individual Directors and Committee members completing separate evaluationquestionnaires regarding the processes of the Board and its Committees, their effectiveness and where improvementscould be considered. The criteria for the evaluation are guided by the Corporate Governance Guide - 3rd Edition issuedby Bursa Securities. The evaluation process also involved a peer and self-review assessment, where Directors will assesstheir own performance and that of their fellow Directors. These assessments and comments by all Directors weresummarised and discussed at the NC meeting which were then reported to the Board at the Board Meeting held thereafter.All assessments and evaluations carried out by the NC in the discharge of its duties are properly documented.

Pursuant to Paragraphs 15.08A and 15.20 of MMLR, the activities of the NC in respect of the FYE2018 are summarisedbelow:

• review of the appointment of new Directors; • reviewed and assessed the mix of skills, independence, expertise, composition, size, diversity and experience to

meet the needs of the Board;• reviewed and assessed the performance of each individual Director; the independence of the Independent Directors;

the effectiveness of the Board and the Board Committees;• recommending Directors who are retiring and being eligible for re-election;• reviewed the performance of the ARMC and its members; • reviewed the revised TOR, Board Diversity Policy, Directors Independence Policy; and• recommended to the Board, the changes in the Board Committees.

Boardroom Diversity

The Board supports gender diversity as part of the agenda in achieving boardroom diversity as the Board acknowledgesand embraces that a wide range of perspectives is critical to effective corporate governance and strategic decision makingin the fast changing business environment. The Company does not practise any gender biasness. Any new appointmentto the Board shall always be based on merits, capability, experience, skill-sets and integrity.

III. REMUNERATION

The Company aims to set remuneration levels which are sufficient to attract and retain the Directors and SeniorManagement needed to run the Company successfully, taking into consideration the function, workload and responsibilities.

The Board was assisted by the RC to review and recommend the remuneration of Chairman, ED and GCEO pursuant tothe contract of service. The remuneration of Chairman, ED and GCEO comprises basic salary and other customarybenefits. The Board approved the remuneration of Chairman, ED and GCEO after taking into account the market rates,responsibilities and the performances of the Chairman, ED and GCEO and the Group.

The Non-Executive Directors’ remuneration comprises fees and meeting allowances that are linked to their expected rolesand level of responsibilities. The Directors’ annual fees, which are determined by the Board as a whole, are approved byshareholders of the Company at each AGM. The meeting allowances and benefits of the Non-Executive Directors arealso approved by the shareholders of the Company at the relevant AGM.

As for the other Senior Management personnel, at the stage of recruitment, the salaries and benefits were agreed uponbefore engagements were formalised. The salaries and benefits take into consideration the complexities of the work,qualification and experience and also other factors. As these senior management personnel work closely with the GroupCEO, their salaries and bonuses were reviewed and decided by the Group CEO after the annual performance appraisalexercise of the Group.

The RC had three meetings during the financial year under review. All members of the RC attended the said meetings.

At the coming 39th AGM, the Board shall seek shareholders’ approval for Directors’ fees, meeting allowances and benefitsfor the financial year ended 30 June 2019.

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Pursuant to Paragraph 9.25 and Paragraph 11 of Appendix 9C of the MMLR, the details of the Directors’ remuneration ofthe Company and the Group on the named basis for the FYE2018 are tabulated as follows:

Company Subsidiaries Group

Name of Directors Salaries & Fee Benefit- Others Total Fee Others Total Total EPF in-kind

RM RM RM RM RM RM RM RM RM

Hjh Felina Binti 1,639,800 - 120,000 303,000 2,062,800 - - - 2,062,800Tan Sri Datuk (Dr) Hj

Mustapha Kamal

Lau Shu Chuan 818,400 - 50,000 134,000 1,002,400 - - - 1,002,400

Hjh Juliana Heather - 97,000 - 32,000 129,000 - - - 129,000Binti Ismail

Anita Chew Cheng Im - 93,750 - 38,000 131,750 - - - 131,750

Dato’ Tan Choon Hwa @ - 63,000 - 22,000 85,000 - - - 85,000Esther Tan Choon Hwa

YBhg Datuk Kasi A/L - 38,500 - 16,000 54,500 - - - 54,500K L Palaniappan(Ceased to be Director on 13.12.2017)

Hong Hee Leong - 57,750 - 26,000 83,750 - - - 83,750(Ceased to be Director on 13.12.2017)

Senior Management are those primarily responsible for managing the business operations and corporate divisions of theGroup. The Board decided not to disclose on a named basis the top five Senior Management’s remuneration in bands ofRM50,000 in order to allay valid concerns of intrusion on staff confidentiality as well as maintaining the Company’s abilityto retain talented senior management in view of the competitive employment environment, in particular for the Group’sproperty business.

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT

ARMC

The ARMC of the Company comprises three members, all of whom are INED. The members are as follows:

Anita Chew Cheng Im Chairman, INED

Hjh Juliana Heather Binti Ismail Member, INED

Dato’ Tan Choon Hwa @ Esther Tan Choon Hwa Member, INED

The Chairman of the ARMC is appointed by the Board and is not the Chairman of the Board. The composition, authority aswell as the duties and responsibilities of the ARMC are set out in its TOR and a copy is available on the Company’s website atwww.mkland.com.my.

The members of the ARMC possess a mix of skill, knowledge and appropriate level of expertise and experience to enablethem to discharge their duties and responsibilities pursuant to the TOR of the ARMC. In addition, the ARMC members areliterate in financials and are able to understand, analyse and challenge matters under purview of the ARMC including thefinancial reporting process.

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The Board is assisted by the ARMC to among others, oversee the Group’s and Company’s financial reporting process and thequality of financial reporting and ensuring that the financial statements comply with the provisions of the Companies Act 2016and the applicable Malaysian Financial Reporting Standards and International Financial Reporting Standards in Malaysia.

In presenting the annual audited consolidated financial statements to the shareholders, the Board takes responsibility to presenta balanced and meaningful assessment of the Group’s financial performance and prospects and ensure that the financialstatements reviewed and recommended by the ARMC for Board’s approval are prepared in accordance with the provisions ofthe Companies Act 2016, the applicable Malaysian Financial Reporting Standards and International Financial ReportingStandards so as to present a true and fair view of the financial position, financial performance and cash flows of the Group andCompany. In addition, the ARMC reviews the annual financial statements and quarterly financial results before they aresubmitted to the Board for approval.

Besides overseeing the Group’s accounting and financial reporting process, ARMC is also responsible to assist the Board toreview the nature, scope and results of the external audit, its cost effectiveness and the independence and objectivity of theexternal auditors, to oversee and monitor the Group internal audit functions, reviews any related party transactions, riskmanagement activities and other activities such as governance matters. A full ARMC Report detailing its composition and asummary of activities during the financial year is set out in pages 51 to 53 of this Annual Report.

The performance of the ARMC is reviewed annually by the NC. The evaluation covered aspects such as the members’ financialliteracy levels, its quality and composition, skills and competencies and the conduct and administration of the ARMC meetings.

Based on the evaluation, the NC concluded that the ARMC has been effective in its performance and has carried out its dutiesin accordance with its TOR during FYE2018.

Assessment of External Auditors

The Board maintains a transparent and professional relationship with the External Auditors through the ARMC. Under theexisting practice, the ARMC invites External Auditors to attend its meetings at least twice a year or when deemed necessaryto discuss their audit plan and their audit findings on the Company’s yearly financial statements. In addition, the ARMC willalso have private meetings with the External Auditors without the presence of the Management to enable exchange of viewson issues requiring attention.

The ARMC has on 8 October 2018 adopted an External Auditors Policy (“EA Policy”) which outlines the policies and proceduresfor the ARMC to govern the assessment and to monitor the External Auditors. The EA Policy covers, among others, theappointment of External Auditors, assessment of External Auditors, independence of External Auditors, non-audit servicesincluding the need to obtain approvals from the ED or ARMC for non-audit work up to a certain threshold and the annualreporting and rotation of the External Audit Engagement Partner. In addition, the EA policy also included a requirement for aformer audit partner to observe a cooling-off period for at least two years before they can be considered for appointment as amember of the ARMC.

The Board has delegated to the ARMC to perform an annual assessment on the quality of the audit which encompassed theperformance and calibre of the External Auditors and their independence, objectivity and professionalism. The assessmentprocess involves identifying the areas of assessment, setting the minimum standards and devising tools to obtain the relevantdata. The areas of assessment include among others, the External Auditors’ calibre, quality processes, audit team, audit scope,audit communication, audit governance and independence as well as the audit fees. Assessment questionnaires were usedas a tool to obtain input from the Company’s personnel who had constant contact with the external audit team throughout the year.

To support the ARMC’s assessment of their independence, the External Auditors will provide the ARMC with a written assuranceconfirming their independence throughout the conduct of the audit engagement in accordance with the relevant professionaland regulatory requirements. The External Auditors are required to declare their independence annually to the Audit and RiskManagement Committee as specified in the By-Laws issued by the Malaysian Institute of Accountants. The External Auditorshave provided the declaration in their annual audit plan presented to the ARMC of the Company.

The ARMC also ensures that the External Auditors are independent of the activities they audit and will review the contracts forprovision of non-audit services by the External Auditors. The recurring non-audit services were in respect of tax compliance,the annual review of the Statement on Risk Management and Internal Control.

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During the financial year, the amount of statutory audit and non-audit fees paid/payable to the External Auditors by the Companyand the Group respectively for FYE2018 were as follows:

Company Group FYE2018 FYE2017 FYE2018 FYE2017 RM'000 RM'000 RM'000 RM'000

Statutory audit fees paid/payable to:• BDO Malaysia 90 90 380 340• Affiliation of BDO Malaysia - - - -

Non-audit fee paid/payable to:• BDO Malaysia 10 10 15 10• Affiliation of BDO Malaysia - - - -

Total 100 100 395 350

In considering the nature and scope of non-audit fees, the ARMC was satisfied that they were not likely to create any conflictor impair the independence and objectivity of the External Auditors.

Upon completion of the assessment, the ARMC will make recommendation for the re-appointment of the External Auditors tothe Board. The Board upon acceptance of the recommendation, will then seek approval from the shareholders on the re-appointment of the External Auditors at the AGM.

Internal Controls and Risk Management

The Board acknowledges their responsibility to maintain a sound system of internal controls covering not only financial controlsbut also operational and compliance as well as risk management. This system is designed to manage, rather than eliminate,the risk of failure to achieve the Group’s corporate objectives, as well as to safeguard shareholders’ investments and theGroup’s assets. The Board seeks regular assurance on the continuity and effectiveness of the internal control system throughindependent review by the internal and external auditors.

During FYE2018, the Directors continued to review the effectiveness of our system of controls, risk management and high-level internal control processes. These reviews included an assessment of internal controls and, in particular, financial,operational and compliance controls, and risk management and their effectiveness, supported by management assurance ofthe maintenance of controls reports from the Internal Audit Department and outsourced Internal Auditors, as well as the externalauditor on matters identified in the course of its statutory audit work.

The details of the Enterprise Risk Management (“ERM”) framework are disclosed in the Statement on Risk Management andInternal Control in the following section of this Annual Report.

PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

Communication with Stakeholders

The Company strives to maintain an open transparent channel of communication with its shareholders, institutional investors,analysts and the public at large with the objective of providing as clear and complete picture of the Group’s performance andfinancial position as possible. The provision of timely information is important to the shareholders and investors for informeddecision making. However, whilst the Company endeavours to provide as much information as possible to its shareholders, itis mindful of the legal and regulatory framework governing the release of material and price-sensitive information.

Currently, the Company’s various channels of communications are through the quarterly announcements on financial resultsto Bursa Securities, relevant announcements and circulars, general meetings of shareholders and through the Company’swebsite at www.mkland.com.my where shareholders can have easy access to the Company’s corporate information such asthe Board Charter, Terms of Reference of the Board Committees, Company Policies, press releases, financial information,Company announcements and others.

The above channels of communication will help to enhance stakeholders’ understanding of the business and operations of theGroup and to make informed investment decisions.

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Conduct of General Meetings

The Company’s AGM remains the principal forum for dialogue with private and institutional shareholders and aims to ensurethat the AGM provides an important opportunity for effective communication with and constructive feedback from theshareholders. At each AGM, the Board presents the progress and performance of the Company’s businesses and shareholdersare encouraged to participate in the proceedings and question and answer session and thereafter to vote on all resolutions.The External Auditors are also present to provide professional and independent clarification on issues and concerns raised bythe shareholders in connection with the Audited Financial Statements.

The Chairman, Chairman of ARMC, Chairman of NC and RC, ED as well as the GCEO will respond to shareholders’ questionsat the AGM. Other Directors present will also respond when required. The Notice and agenda of AGM together with Form ofProxy are given to shareholders at least 28 days before the AGM, which gives sufficient time to prepare themselves to attendthe AGM personally or to appoint a proxy to attend and vote on their behalf. Each item of the special business included in theNotice of AGM is accompanied by an explanatory statement on the proposed resolution to facilitate the full understanding andevaluation of issues involved.

Poll Voting

All the resolutions passed by the shareholders at the previous 38th AGM held on 13 December 2017 were voted by way of apoll in accordance with the Paragraph 8.29A(1) of the MMLR. The shareholders were briefed on the voting procedures by theShare Registrar namely, Tricor Investor & Issuing House Services Sdn Bhd while the results of the poll were verified andannounced by the independent scrutineer, Asia Securities Sdn Bhd.

The Chairman will announce the poll results of the forthcoming 39th AGM with details on the number of votes cast for andagainst for each resolution and the respective percentage on the same day to Bursa Securities. The presentation at the AGMwill also be made available on the Company’s website.

Corporate Disclosure Policy

To ensure timely and high quality disclosure, Company Disclosure Policy and Procedures are in place where policies, authoritychart, procedures and processes are clearly defined.

The Board recognises the importance of timely dissemination of information to shareholders and investors to ensure that theyare well informed of all major developments of the Company and the Group. Such information is communicated to shareholdersand investors through various disclosures and announcements to the Bursa Securities, including the quarterly financial results,annual reports and where appropriate, circulars and press releases.

In compliance with the MMLR, all announcements made by the Company to Bursa Securities such as the Group’s quarterlyfinancial results, annual reports and other mandatory announcements are made available at the Company’s website:www.mkland.com.my.

This Corporate Governance Overview Statement is made in accordance with a resolution of the Board of Directors dated 22 October 2018.

ADDITIONAL COMPLIANCE INFORMATION

1. Compliance with the Code

The Board considers that the Group has complied substantially with the principles and recommendations as stipulated inthe MCCG 2017 throughout the financial year 2018. The Board will endeavour to improve and enhance the proceduresfrom time to time.

2. Corporate Social Responsibility

The Group innovates the design environments that are better adopted to people’s needs and allow communities to thrive.The Group plays an ongoing role with communities to ensure that they continue to evolve and prosper.

During the financial year, the Group together with Malaysian Armed Force helped to refurbish a “Madrasah” which caughtfire in Kuala Kangsar Perak and provide them with basic necessities. The Group also helped five (5) of its employeeswhose homes were destroyed by the hurricane in Langkawi, Kedah.

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Passionate for gifted children, the Chairman has led the company to organize a dinner with a gifted children’s centre,Rumah Amal Cahaya Kasih Bistari and extended donations to Pertubuhan Pemulihan Dalam Kominiti (PPDK) II, IpohPerak. The Group also organized breaking of fast with neighborhood orphanages. The Group has also initiated “KembaliKe Sekolah” programme in December 2017, donating school supplies to the needy children to prepare them for the 2018school term.

In maintaining transparency and accountability, the Group provides timely information to the marketplace through regularannouncements, press releases, meetings and briefing to the various stakeholders. Shareholders and invited guests,such as the Minority Shareholders Watchdog Group (“MSWG”), are briefed on the Group’s performance and activities atAnnual General Meetings.

3. Workplace Diversity

The Board and Management are committed to embracing diversity at the workplace and providing equal employmentopportunities to all employees, regardless of their age, gender and ethnicity.

The workplace diversity as at 30 June 2018 is summarized as follows:

Race/ethnic Malay Chinese Indian Others

Male 462 14 35 7Female 269 14 12 1

Total 731 28 47 8

Age Group No. of employee

Below 30 years old 239 Between 31 to 50 years old 409 Above 50 years old 166 Total 814

4. Utilisation of Proceeds Raised from Corporate Proposal

There was no corporate proposal to raise funds during the FYE2018.

5. Material Contracts

There were no material contracts entered into by the Group and its subsidiaries involving the Directors’ and majorshareholders’ interests, either subsisting at the end of the FYE2018 or entered into from the end of the previous financial year.

6. Recurrent Related Party Transaction (“RRPT”)

There was no RRPT entered into by the Group during the FYE2018.

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AUDIT AND RISK MANAGEMENTCOMMITTEE REPORT

MEMBERSHIP

The members of Audit & Risk Management Committee (“ARMC”) are Non-Executive Directors, with the majority of them beingIndependent Directors, namely:

MS ANITA CHEW CHENG IM (“MS ANITA CHEW”) (Chairman, Independent Non-Executive Director)

YBHG DATO' TAN CHOON HWA @ ESTHER TAN CHOON HWA(Member, Independent Non-Executive Director)

PN HJH JULIANA HEATHER BINTI ISMAIL(Member, Senior Independent Non-Executive Director)

YBHG DATUK KASI A/L K L PALANIAPPAN(Non-Independent Non-Executive Director)(Ceased to be Director on 13 December 2017)

HONG HEE LEONG(Independent Non-Executive Director)(Ceased to be Director on 13 December 2017)

MEETINGS OF THE AUDIT & RISK MANAGEMENT COMMITTEE

During the financial year 30 June 2018, six ARMC meetings were held and the details of the attendance of each member ofthe Committee are tabulated below:

No. of Meetings Attendance

Ms Anita Chew Cheng Im (Chairman) 6/6

YBhg Dato’ Tan Choon Hwa @ Esther Tan Choon Hwa(Appointed on 26 September 2017) 4/4

Pn Hjh Juliana Heather Binti Ismail(Appointed as ARMC member on 27 February 2018) 2/2

YBhg Datuk Kasi a/l K L Palaniappan(Ceased to be Director on 13 December 2017) 3/3

Mr Hong Hee Leong(Ceased to be Director on 13 December 2017) 3/3

The Terms of Reference of the ARMC is made available on the corporate website at www.mkland.com.my.

SUMMARY OF WORK OF THE AUDIT & RISK MANAGEMENT COMMITTEE

(1) Financial Reporting

In complying with Bursa Securities’ requirements on financial reporting, the ARMC reviewed the audited financialstatements for the financial year ended 30 June 2018 at the ARMC Meeting held on 22 October 2018 and reviewed thequarterly reports for the financial year under review at its meetings held on 27 November 2017, 26 February 2018, 15May 2018 and 28 August 2018.

The annual audited financial statements for financial year ended (“FYE”) 30 June 2018 had been reviewed and discussed


52

with the External Auditors on 22 October 2018 and was put forward to the Board of Directors for approval on even date.The audited financial statements are in compliance with its accounting policies, the accounting standards and ListingRequirements.

The Committee also emphasises the Group’s compliance with the relevant provisions set out under the Malaysian Codeon Corporate Governance 2017 for the purpose of preparing the Statement on Risk Management and Internal Controlpursuant to the Listing Requirements of Bursa Malaysia.

(2) External Auditors

The ARMC, satisfied with Messrs BDO Malaysia (“BDO”) performance, competency and audit independence, hasrecommended to the Board the re-appointment of BDO as external auditors for the financial year ending 30 June 2019.The Audit Team is being headed by Mr Law Kian Huat.

For the financial year under review, BDO confirmed that they are not aware of any relationships or matter that, in theirprofessional judgement, might reasonably be thought to bear on their independence. In respect of the audit of the financialstatements of M K Land Group for the financial year ended 30 June 2018, BDO has declared their independence inaccordance with the By-laws (on Professional Ethics, Conducts and Practice) of the MIA.

On 15 May 2018, the ARMC reviewed the audit planning 2018 and recommended to the Board for approval. The auditplan places emphasis among others on material contingent liabilities and litigations, revenue recognition, assets valuationand accounting estimates. The ARMC is satisfied that there are no related party or conflict of interest transactions orprocesses during the year.

The ARMC had two private meetings with BDO without the presence of the management on 20 October 2017 and 15 May 2018. The Chairman of the ARMC then conveyed to the management, the issues raised by BDO towardscontinuous improvements in finance function, tax planning and mitigation strategies, human resource requirement in thefinance department and financial reporting developments. The management has given their assurance that the matterswill be addressed and adhered to.

(3) Internal Auditors

The Group has an Internal Audit Department, complemented by an independent external firm of professional InternalAuditors, NGL Tricor Governance Sdn Bhd - which is headed by its Director, Mr Chang Ming Chew, who is a CertifiedInternal Auditor; and a Professional Member of the Institute of Internal Auditors Malaysia. Both the Internal AuditDepartment and the external independent internal auditors (“the Internal Auditors”) audit each business sectors, identifyingand evaluating the risk factors on continuous basis and report directly to the ARMC. The approved annual Internal AuditPlan is designed to cover entities across all level of operations within the Group.

The principle role of the Internal Auditors is to provide the ARMC with reports on the state of internal controls and the risksassociated with the operating entities within the Group and the extent of compliance of such entities within the Group’sestablished policies and procedures.

During the financial year under review, the Internal Auditors conducted a series of audit assignments. The Internal Auditassignments are designed to review and assess the procedures, systems and controls on whether they are adequateand effective to meet the requirements of:

a) Compliance with applicable laws and regulations, policies and procedures;b) Reliability and integrity of information; c) Safeguarding of assets; andd) Operational effectiveness.

Amongst the audit assignments carried out during the financial year under review were:-


Audit and Risk Management Committee Report


53


Audit and Risk Management Committee Report

i. Review of Internal control of purchasing and payable cycle, credit control function of the leisure division;ii. Review of adequacy of Standard Operating Procedures and effectiveness of sales and marketing function of the

leisure division;iii. Review of the defects management - QA/QC and Efficiency of after sales management of Zaman Teladan Sdn Bhd;iv. Review of Inventory Management of Langkawi Resorts;v. Review of effectiveness of sales and marketing of completed unsold properties of Saujana Triangle Sdn Bhd; andvi. Review on the project management of Residensi Suasana @ Damai project.

The cost incurred for the internal audit function of the Group for the financial year ended 30 June 2018 was approximatelyRM295,054.

(4) Risk Management

The Risk Management Working Committee, facilitates discussions on risk awareness with the management teams. Themanagement of the respective business segments, together with the Head of Departments, identified and updated therisk in their respective functions.

During the financial year under review, the business risk profile reports for the following entity were evaluated by the RiskManagement Department and presented to the ARMC:

i. Bukit Merah Laketown Resort Sdn Bhd;ii. Pujaan Pasifik Sdn Bhd;iii. Vast Option Sdn Bhd;iv. Medan Prestasi Sdn Bhd; andv. Zaman Teladan Sdn Bhd.

A training session facilitated by an external enterprise risk management practitioner was held with the ARMC and seniormanagement team in May 2018 to update on the development or changes in the risk management function.

(5) Related Party Transactions

The ARMC has reviewed and noted that there were no related party transactions or any conflict of interest situation thatmay arise within the Group including any transaction, procedure or course that raises questions of management integrityto the Board.

STATEMENT OF RISK MANAGEMENT & INTERNAL CONTROL

The ARMC reviewed the Statement of Risk Management and Internal Controls and made recommendations to the Boardfor inclusion to the 2018 Annual Report.

In addition, the Chairman and members of ARMC have also engaged continuously with the other Board members, andthe management of the Group in order to be kept informed of the operations.

This statement is made in accordance with the resolution of the Board of Directors dated 22 October 2018.


54


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

INTRODUCTION

The Board of Directors (“Board”) of M K Land Holdings Berhad is committed to maintain a sound, effective and comprehensiverisk management framework and effective internal control systems throughout the Group in ensuring shareholders’ investmentand the Group’s assets are adequately safeguarded.

This Statement on Risk Management and Internal Control (“Statement”) is prepared in accordance with Paragraph 15.26 (b)of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Statement on Risk Management and InternalControl : Guidelines for Directors of Listed Issuers and Practice 9.1 for Principle B of the Malaysian Code on CorporateGovernance (“MCCG”) 2017.

RESPONSIBILITY OF THE BOARD

The Board acknowledges its responsibility to establish an acceptable risk management framework, assessment of Group’srisk profiles and sound internal control for the Group. This responsibility is being further enhanced by continuous efforts inestablishing an appropriate control environment and framework which is being systematically reviewed with regards to itsadequacy, integrity and improvement. Nonetheless, systems and internal control measures are designed to manage insteadof eliminating the risks of failure to achieve business objectives. Thus, such risk management and systems of internal controlcan only provide reasonable and not absolute assurance against any material loss or failure.

The Board maintains responsibility over risk and control issues. However, the Management has been empowered to ensureproper management of business risks which include the identification, evaluation and periodical review of Group’s risks profiles.The Management also being entrusted to ensure a sound internal control system is being adhered to at all levels of thecompanies in the Group.

To provide the required assurance towards ensuring risks are within acceptable Group’s risk appetite, the Management withthe assistance of the Risk Management Department shall conduct periodical review on all business risks, profile all the identifiedrisks and provide mitigation measures so as to manage the identified risks and where possible, to mitigate the impact of thoserisks to the Group.

In addition, in order to ensure sound internal control is implemented at all companies in the Group, the Management with theassistance of the Internal Audit Department shall conduct periodical review, report any weaknesses identified and providerecommendations as to avoid recurrence of the shortcomings. Proper and timely follow-up shall also be carried out in ensuringrequired corrective actions have been taken to resolve all issues previously highlighted during the audit review.

The Board has received assurance from the Group Chief Executive Officer and Financial Controller that the Group’s riskmanagement and internal control system are operating adequately and effectively.

PLANNING, MONITORING AND REPORTING

All business segments on annual basis are required to prepare their business plans and budgets. These documents, particularlythe respective budgets shall be thoroughly discussed with the Senior Management team and subsequently presented anddeliberated to the Board prior to obtaining Board’s approval.

Once approved, the annual budget shall be implemented accordingly towards achieving the Group’s targets.

Group’s performance shall be systematically reviewed at each quarter of the financial year. To ensure proper review, the Boardshall be provided with sufficient information pertaining to the actual performance of each company against the approved budget.

In addition, the Risk Management Report and the Internal Audit Reports are also provided to the Board for deliberation onquarterly basis.


55


Statement on Risk Management And Internal Control

POLICIES

The Group’s internal policies are properly documented in ensuring compliance with the internal control, prevailing laws, rulesand regulations.

In ensuring the relevancy of the policies, such policies shall be consistently reviewed annually.

INTERNAL AUDIT FUNCTION

The internal control aspect of the Group is being continuously monitored by the Internal Audit Department and NGL TricorGovernance Sdn. Bhd. - an independent external firm. Both internal audit entities are led by a Chartered / Professional Memberof The Institute of Internal Auditors Malaysia (“IIAM”). Internal auditors from both entities shall conduct periodic audits withemphasis on risk-based areas aimed at ensuring weaknesses highlighted are rectified. Both entities report direct to the Auditand Risk Management Committee (“ARMC”) on quarterly basis.

The internal auditors shall prepare an Annual Internal Audit Plan (“Audit Plan”) which consists of areas to be audited throughouteach financial year. The Audit Plan shall be deliberated and approved by the ARMC.

Once approved, audit reviews shall be carried out by the internal auditors of both entities. From each audit review, the internalauditors highlighted the main findings with significant impact towards effectiveness and efficiency of each company audited.

Findings from audit review shall be discussed with the key personnel of the respective companies under review. Their responsesand all audit recommendations shall be incorporated in the Internal Audit Reports and submitted to the ARMC at each quarteror as and when required. The audits performed by the internal auditors during the financial year under review are listed underthe Audit and Risk Management Committee Report.

All planned audits as per the Audit Plan have been conducted by the internal auditors of both entities. Apart from preparing therespective audit reports for each audit review, all recommendations and improvement actions to be taken by each companyshall be closely monitored and reported to the ARMC accordingly.

RISK MANAGEMENT

The Board supports the guidelines as spelt out in the Statement on Risk Management and Internal Control: Guidelines forDirectors of Listed Issuers and confirms that there is an ongoing process of identifying, evaluating and managing all significantrisks faced by the Group.

The Board regards risk management as an integral part of the Group’s business and operation and has oversight over thecritical areas through the ARMC. The ARMC is supported by the Risk Management Working Committee (“RMWC”) which wasset up to coordinate the implementation of an enterprise-wide risk management program within the Group.

The RMWC also works closely with the Group’s operational managers to continuously evaluate, review and monitor the risksthrough a formalized risk management strategies, policies and procedures.

The Board believes that the function of sound system of internal control and risk management policies is built on a clearunderstanding and appreciation of the Group’s risk management framework with the following key elements:

• Effective and efficient risk management activities contribute to good corporate governance and are integral to theachievement of business objectives;

• Risk management should be embedded into the day-to-day management processes and is extensively applied in decisionmaking and strategic planning;

• Risk management processes applied should aim to take advantage of opportunities, manage uncertainties and minimisethreats; and

• Regular reporting and monitoring activities which emphasise on the accountability and responsibility aspects inmanaging risk.


KEY RISK MANAGEMENT AND INTERNAL CONTROL PROCESSES

The Board has implemented an organisational structure, which defines the lines of authority, accountability and responsibility.

The Group’s risk management and internal control system are further enhanced by the following:

• Clearly defined objectives and terms of reference of the various Committees established by the Board;

• Internal control procedures as set out in M K Land Holdings Berhad’s Standard Operating Procedures (“SOP”) for keyoperating units have been adopted by the Group. The Board has a set of defined corporate values, which emphasiseteam work and ethical behavior that have been communicated to all staff within the Group;

• A budgetary control system is in place where annual budgets are prepared by the respective operating units that areapproved by the Board. Reviews of actual performance against budgets are regularly carried out, and the reviewencompasses both financial and non-financial key performance indicators;

• Regular financial and management information showing actual results against budgets are provided to the Board onquarterly basis; and

• The Group on an ongoing basis, compiles, reviews and updates the SOP, which involves key processes relating to itsoperations.

EMPLOYEES’ COMPETENCY

Specific training and development programmes are conducted to ensure that employees are equipped with the necessaryknowledge, skills and competency required for them to perform effectively.

REVIEW BY EXTERNAL AUDITORS

The External Auditors have reviewed this Statement on Risk Management and Internal Control as required by paragraph 15.23of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. Their review was performed in accordance withAudit and Assurance Practice Guide 3: Guidance for Auditors on Engagements to Report on the Statement on Risk Managementand Internal Control included in the Annual Report, issued by the Malaysian Institute of Accountants.

Based on their procedures performed, the External Auditors have reported to the Board that nothing has come to their attentionwhich has caused them to believe that this Statement is not prepared, in all material respects, in accordance with the disclosuresrequired by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors ofListed Issuers, nor is factually inaccurate.

STATE OF INTERNAL CONTROL DURING THE PERIOD UNDER REVIEW

The Board is satisfied with the adequacy, effectiveness and integrity of the system of risk management and internal control forthe financial year. The Board continues to take pertinent measures where required, to enhance the Group’s system of riskmanagement and internal control. The system of risk management and internal control of the Group is regularly reviewed bythe ARMC.

This statement is made in accordance with the resolution of the Board of Directors dated 22 October 2018.

56

Statement on Risk Management And Internal Control



FINANCIALSTATEMENTS58 Directors’ Report62 Statement by Directors62 Statutory Declaration63 Independent Auditors’ Report67 Consolidated Statement of Profit or Loss

and Other Comprehensive Income68 Consolidated Statement of Financial Position69 Consolidated Statement of Changes In Equity70 Consolidated Statement of Cash Flows71 Statement of Profit or Loss and

Other Comprehensive Income72 Statement of Financial Position73 Statement of Changes In Equity74 Statement of Cash Flows75 Notes to the Financial Statements


The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Companyfor the financial year ended 30 June 2018.

PRINCIPAL ACTIVITIES

The principal activities of the Company are those of investment holding and the provision of management services. The principalactivities of the subsidiaries are disclosed in Note 16 to the financial statements. There has been no significant change in thenature of these principal activities during the financial year.

RESULTS

Group Company RM'000 RM'000

Profit for the financial year 24,499 17,886

DIVIDEND

No dividend has been paid, declared or proposed by the Company since the end of the previous financial year. The Directorsdo not recommend any payment of final dividend in respect of the financial year ended 30 June 2018.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year.

ISSUE OF SHARES AND DEBENTURES

The Company did not issue any new shares or debentures during the financial year.

TREASURY SHARES

As at 30 June 2018, the Company held as treasury shares a total of 2,672,000 of its 1,207,262,000 issued ordinary shares.Such treasury shares, in accordance with the Companies Act 2016, are held at a carrying amount of RM1,904,000 and furtherrelevant details are disclosed in Note 23(b) to the financial statements.

EMPLOYEE SHARE OPTION SCHEME

The Company’s Employee Share Option Scheme (“ESOS”) is governed by the by-laws approved by the shareholders at anExtraordinary General Meeting held on 29 November 2002. As at the end of the reporting period and at the date of this report,the ESOS has yet to be implemented. Accordingly, no options have been granted at the end of the reporting period.

The salient features of the ESOS are disclosed in Note 23(a) to the financial statements.

58


DIRECTORS’ REPORT


DIRECTORS

The Directors who have held for office since the date of last report are:

M K Land Holdings Berhad

Hjh Felina binti Tan Sri Datuk (Dr) Hj Mustapha Kamal Lau Shu ChuanAnita Chew Cheng ImHjh Juliana Heather binti IsmailYBhg Dato’ Tan Choon Hwa @ Esther Tan Choon Hwa (Appointed on 26 September 2017) YBhg Datuk Kasi a/l K. L. Palaniappan (Ceased to be Director on 13 December 2017)Hong Hee Leong (Ceased to be Director on 13 December 2017)

Certain subsidiaries of M K Land Holdings Berhad

Hjh Felina binti Tan Sri Datuk (Dr) Hj Mustapha Kamal YBhg Datuk Kasi a/l K. L. PalaniappanK. Mohanachandran a/l K.R. Kunjan Chin Kok SiongKamarulzaman bin Abu Bakar (Appointed on 13 August 2018)Zulkipli bin Sidin (Appointed on 13 August 2018)YBhg Dato’ Tan Choon Hwa @ Esther Tan Choon Hwa (Appointed on 28 September 2018) Mustafa Kamal bin Hawari (Appointed on 8 October 2018)Hong Hee Leong (Resigned on 1 November 2017)Anita Chew Cheng Im (Resigned on 1 November 2017)Hjh Juliana Heather binti Ismail (Resigned on 2 November 2017)Lau Shu Chuan (Resigned on 2 November 2017)

DIRECTORS’ INTERESTS

None of the Directors holding office at the end of the financial year held any beneficial interest in the ordinary shares andoptions over ordinary shares of the Company and of its related corporations during the financial year ended 30 June 2018 asrecorded in the Register of Directors’ Shareholdings kept by the Company under Section 59 of the Companies Act 2016 in Malaysia.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, none of the Directors have received or become entitled to receive any benefit(other than benefits included in the aggregate amount of remuneration received or due and receivable by the Directors asshown in the financial statements) by reason of a contract made by the Company or a related corporation with the Director orwith a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest otherthan the transactions entered into in the ordinary course of business with companies in which the Directors of the Companyhave substantial financial interests as disclosed in Note 31 to the financial statements.

There were no arrangements during and at the end of the financial year, to which the Company is a party, which had the objectof enabling the Directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or anyother body corporate.

DIRECTORS’ REMUNERATION

The details of Directors’ remuneration are disclosed in Note 10 to the financial statements.

Directors’ Report

59



INDEMNITY AND INSURANCE FOR OFFICERS AND AUDITORS

The Group and the Company maintain Directors’ and Officers’ liability insurance for the purpose of Section 289 of theCompanies Act 2016, which provides appropriate insurance cover for their Officers throughout the financial year.

The insurance premium paid by the Group during the financial year amounted to RM43,558 (2017: RM41,515).

There were no indemnity given to or insurance effected for the auditors of the Group and of the Company during the financial year.

OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY

(I) AS AT THE END OF THE FINANCIAL YEAR

(a) Before the financial statements of the Group and of the Company were prepared, the Directors took reasonablesteps:

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

(ii) to ensure that any current assets other than debts, which were unlikely to realise their book values in the ordinarycourse of business had been written down to their estimated realisable values.

(b) In the opinion of the Directors, the results of the operations of the Group and of the Company during the financialyear have not been substantially affected by any item, transaction or event of a material and unusual nature.

(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT

(c) The Directors are not aware of any circumstances:

(i) which would render the amounts written off for bad debts or the amount of the provision for doubtful debts inthe financial statements of the Group and of the Company inadequate to any material extent;

(ii) which would render the values attributed to current assets in the financial statements of the Group and of theCompany misleading; and

(iii) which have arisen which would render adherence to the existing method of valuation of assets or liabilities ofthe Group and of the Company misleading or inappropriate.

(d) In the opinion of the Directors:

(i) there has not arisen any item, transaction or event of a material and unusual nature likely to affect substantiallythe results of the operations of the Group and of the Company for the financial year in which this report is made;and

(ii) no contingent or other liability has become enforceable, or is likely to become enforceable, within the period oftwelve (12) months after the end of the financial year which would or may affect the abilities of the Group andof the Company to meet their obligations as and when they fall due.

Directors’ Report

60



(III) AS AT THE DATE OF THIS REPORT

(e) There are no charges on the assets of the Group and of the Company which have arisen since the end of the financialyear to secure the liabilities of any other person.

(f) There are no contingent liabilities of the Group and of the Company which have arisen since the end of the financialyear.

(g) The Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statementswhich would render any amount stated in the financial statements of the Group and of the Company misleading.

SUBSIDIARIES

Details of subsidiaries are set out in Note 16 to the financial statements.

SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD

Significant events subsequent to the end of the reporting period are disclosed in Note 37 to the financial statements.

AUDITORS

The auditors, BDO, have expressed their willingness to continue in office.

Auditors’ remuneration of the Company and its subsidiaries for the financial year ended 30 June 2018 are disclosed in Note 8to the financial statements.

Signed on behalf of the Board in accordance with a resolution of the Directors.

Hjh Felina binti Tan Sri Datuk Lau Shu Chuan (Dr) Hj Mustapha Kamal

Director Director

Petaling Jaya22 October 2018

Directors’ Report

61



In the opinion of the Directors, the financial statements set out on pages 67 to 133 have been drawn up in accordance withFinancial Reporting Standards and the provisions of the Companies Act 2016 in Malaysia so as to give a true and fair view ofthe financial position of the Group and of the Company as at 30 June 2018 and of the financial performance and cash flows ofthe Group and of the Company for the financial year then ended.

On behalf of the Board,

Hjh Felina binti Tan Sri Datuk Lau Shu Chuan (Dr) Hj Mustapha Kamal

Director Director


62


STATEMENT BY DIRECTORS

I, Chin Kok Siong (CA 8796), being the Officer primarily responsible for the financial management of M K Land Holdings Berhad,do solemnly and sincerely declare that the financial statements set out on pages 67 to 133 are, to the best of my knowledgeand belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of theprovisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed atPetaling Jaya, Selangor Darul Ehsanon 22 October 2018 Chin Kok Siong

Before me,

STATUTORY DECLARATION


Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of M K Land Holdings Berhad, which comprise the statements of financial positionas at 30 June 2018 of the Group and of the Company, and the statements of profit or loss and other comprehensive income,statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year thenended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 67to 133.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of theCompany as at 30 June 2018, and of their financial performance and their cash flows for the financial year then ended inaccordance with Financial Reporting Standards (“FRSs”) and the requirements of the Companies Act 2016 in Malaysia.

Basis for Opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing(“ISAs”). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of theFinancial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriateto 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 andPractice) 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 inaccordance with the By-Laws and the IESBA Code.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financialstatements of the Group and of the Company for the current year. These matters were addressed in the context of our audit ofthe financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do notprovide a separate opinion on these matters.

Key Audit Matters for the Group

1. Property development revenue recognition and cost to complete

Revenue from property development during the financial year is disclosed in Note 4 to the financial statements, while theprovision for cost to complete as at 30 June 2018 is disclosed in Note 27 to the financial statements.

The recognition of property development revenue and profit recognition are based on stage of completion method. Thedetermination of stage of completion requires management to exercise significant judgement in estimating the total costto complete.

In estimating the total cost to complete, the Group considers the completeness and accuracy of its costs estimation,including its obligations to contract variations, claims and cost contingencies. The total cost to complete including the costincurred from each contractor, may vary with market conditions and may also be differently forecasted due to unforeseenevents during construction.

63


INDEPENDENT AUDITORS’ REPORTTo the members of M K Land Holdings Berhad (Incorporated in Malaysia)


Key Audit Matters for the Group (cont’d.)

1. Property development revenue recognition and cost to complete (cont’d.)

Audit procedures:

Our audit procedures performed included the following:

a. Assessed estimated total costs to complete through enquiries with operational and financial personnel of the Groupand verified documentation to support the cost estimates;

b. Verified development costs incurred during the financial year to supporting evidence such as contractors’ progressclaims and suppliers’ invoices; and

c. Recomputed percentage of completion determined by management for revenue recognition based on verified actualcosts incurred to date and budgeted costs to complete.

2. Contingent liabilities and legal proceedings

As disclosed in Note 30 to the financial statements, Saujana Triangle Sdn. Bhd. (“STSB”), a subsidiary of the Company,was served by Inland Revenue Board (“IRB”) with Notices of Assessment for the years of assessments of 2009 to 2011and 2013 for additional income taxes of RM55.7 million and tax penalties of RM25.1 million. During the financial year,STSB was served with Writ of Summon and Statement of Claim for the years of assessment of 2009 to 2011 and 2013respectively for an additional tax penalty of RM12.3 million after utilisation of tax credit of RM1.4 million. Based on thelegal opinions obtained from appointed solicitors, the Directors are of the view that there are grounds to disagree with theNotices of Assessment raised including the imposition of penalties. On 19 September 2018, the Shah Alam High Courthad granted an order for a stay to STSB and had scheduled a case management to be held on 19 November 2018.

In a separate case, IRB had ordered Medan Prestasi Sdn. Bhd.(“MPSB”), a subsidiary of the Company to pay anoutstanding tax liability and additional penalties, which amounted to RM8.7 million and RM3.9 million respectively inrelation to the disposal of certain investment properties between financial years 2002 and 2004. The Directors disagreedwith the IRB’s position and has appealed against the assessment. The case was heard before the Special Commissionerof Income Tax (“SCIT”) on 20 October 2014, 21 October 2014 and 12 January 2015. However, there was a coram failureas the SCIT who heard the case are no longer in service. The case was fixed for hearing before the SCIT on 23 April2018. After the hearing, the SCIT then required a witness to be called by MPSB on the next hearing date to explain on thesubdivision of the properties in dispute. The next hearing date has been fixed on 22 February 2019 for the calling of theMPSB’s witness and oral submissions.

Significant management judgement is required as the amounts involved are material and the determination of the amounts,if any, to be provided for such disputed liabilities are subjective.

Audit procedures:

Our audit procedures performed included the following:

a. Discussed with management and read the legal opinions obtained from the appointed solicitors on the notices ofassessment issued by the IRB;

b. Inquiry of the tax specialist in assessing the appropriateness of the tax position as stated in the legal opinions; and

c. Obtained confirmation of the status of the legal cases from the appointed solicitors.

Independent Auditors’ Report

64


To the members of M K Land Holdings Berhad (Incorporated in Malaysia)


Key Audit Matters for the Company

We have determined that there are no key audit matters to communicate in our report in respect of the audit of the financialstatements of the Company.

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 informationincluded in the 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 notexpress any form of assurance or conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with the financial statements ofthe 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 the Directors’ Report, we arerequired to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements of the Group and of the Companythat give a true and fair view in accordance with FRSs and the requirements of the Companies Act 2016 in Malaysia. TheDirectors are also responsible for such internal control as the Directors determine is necessary to enable the preparation offinancial 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 abilityof the Group and of the Company to continue as a going concern, disclosing, as applicable, matters related to going concernand using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company orto 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 Companyas a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes ouropinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance withapproved standards on auditing in Malaysia and ISAs will always detect a material misstatement when it exists. Misstatementscan 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 ISAs, we exercise professionaljudgement 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 evidencethat is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatementresulting 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 appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control of the Groupand of the Company.

Independent Auditors’ Report

65


To the members of M K Land Holdings Berhad (Incorporated in Malaysia)


Auditors’ Responsibilities for the Audit of the Financial Statements (cont’d.)

As part of an audit in accordance with approved standards on auditing in Malaysia and ISAs, we exercise professionaljudgement and maintain professional scepticism throughout the audit. We also: (cont’d.)

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

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

(f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities withinthe Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervisionand 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 significantaudit 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 regardingindependence, and to communicate with them all relationships and other matters that may reasonably be thought to bear onour 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 ofthe financial statements of the Group and of the Company for the current year and are therefore the key audit matters. Wedescribe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, inextremely rare circumstances, we determine that a matter should not be communicated in our report because the adverseconsequences 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 Act2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

BDO Law Kian HuatAF : 0206 02855/06/2020 JChartered Accountants Chartered Accountant

Kuala Lumpur 22 October 2018

66


Independent Auditors’ Report To the members of M K Land Holdings Berhad (Incorporated in Malaysia)


67


Note 2018 2017 RM'000 RM'000

Revenue 4 181,878 192,360Cost of sales 5 (88,302) (78,665)

Gross profit 93,576 113,695Other income 6 76,138 31,676Administrative expenses (52,324) (54,851)Selling and marketing expenses (10,448) (11,293)Other expenses (57,244) (34,707)

Operating profit 49,698 44,520Finance costs 7 (5,645) (6,483)

Profit before tax 8 44,053 38,037Tax expense 11 (19,554) (19,904)

Profit for the financial year, attributable to owners of the Company 24,499 18,133Other comprehensive income, net of tax - -

Total comprehensive income, attributable to owners of the Company 24,499 18,133

Earnings per share attributable to owners of the Company- Basic (sen) 12 2.0 1.5

- Diluted (sen) 12 2.0 1.5

CONSOLIDATED STATEMENT OF PROFIT OR LOSSAND OTHER COMPREHENSIVE INCOME

For the financial year ended 30 June 2018

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.


Note 2018 2017 RM'000 RM'000

Assets Non-current assetsProperty, plant and equipment 13 177,560 188,298Land held for property development 14(a) 757,595 721,244Investment properties 15 149,460 149,020Other investments 17 - -Deferred tax assets 18 2,011 4,830

1,086,626 1,063,392

Current assetsProperty development costs 14(b) 69,875 182,995Inventories 19 190,731 118,326Trade and other receivables 20 113,342 186,116Tax recoverable 6,566 11,116Other financial assets 21 37,474 10,683Cash and bank balances 22 59,370 76,349

477,358 585,585

Total assets 1,563,984 1,648,977

Equity and liabilities Equity attributable to owners of the parentShare capital 23 1,216,296 1,216,296Treasury shares 23(b) (1,904) (1,904)Merger deficit 23(c) (39,441) (57,574)Retained profits 24 24,499 18,133

Total equity 1,199,450 1,174,951

Non-current liabilitiesDeferred tax liabilities 18 15,391 15,459Borrowings 25 18,386 27,606Long term payable 28 71,826 69,617

105,603 112,682

Current liabilitiesProvision for liabilities 27 42,518 146,716Current tax liabilities 5,461 8,579Borrowings 25 44,169 27,250Trade and other payables 29 166,783 178,799

258,931 361,344

Total liabilities 364,534 474,026

Total equity and liabilities 1,563,984 1,648,977

68


CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2018



69


Reserves Non-distributable Distributable

Share Treasury Share Merger Retained Total Total capital shares premium deficit profits reserves equity RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 (Note 23) (Note 23(b)) (Note 23(c)) (Note 24)

At 1 July 2017 1,216,296 (1,904) - (57,574) 18,133 (41,345) 1,174,951Profit for the financial year - - - - 24,499 24,499 24,499

Other comprehensiveincome, net of tax - - - - - - -

Total comprehensive income - - - - 24,499 24,499 24,499

Transfer to merger deficit account - - - 18,133 (18,133) - -

At 30 June 2018 1,216,296 (1,904) - (39,441) 24,499 (16,846) 1,199,450

At 1 July 2016 1,207,262 (1,904) 9,034 (69,620) 12,046 (50,444) 1,156,818Profit for the financial year - - - - 18,133 18,133 18,133

Other comprehensiveincome, net of tax - - - - - - -

Total comprehensive income - - - - 18,133 18,133 18,133

Effects of the new Companies Act 2016 9,034 - (9,034) - - (9,034) -

Transfer to merger deficit account - - - 12,046 (12,046) - -

At 30 June 2017 1,216,296 (1,904) - (57,574) 18,133 (41,345) 1,174,951

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY




Note 2018 2017 RM'000 RM'000

Cash flows from operating activitiesProfit before tax 44,053 38,037Adjustments for: Depreciation of property, plant and equipment 13 6,689 8,568Gain on disposal of property, plant and equipment 6 (57,635) (8)Reversal of impairment losses on trade receivables 20(a) (1,198) (2,083)Reversal of impairment losses on other receivables 20(c) - (1,431)Impairment losses on trade receivables 20(a) 25,942 1,371Impairment losses on other receivables 20(c) 803 1,117Fair value gain on investment properties 15 (440) (434)Write-down of inventories 8 611 4,928Write off of property, plant and equipment 13 44 -Interest expense 7 5,645 6,483Interest income 6 (1,376) (2,184)

Operating profit before working capital changes 23,138 54,364Changes in working capital: Property development costs and land held for property development (13,750) 38,695

Inventories 17,503 11,164Receivables 47,227 53,065Payables (114,992) (179,354)

Cash used in operations (40,874) (22,066)Interest paid (4,658) (4,060)Interest received 1,376 2,184Taxes paid (15,371) (12,184)

Net cash used in operating activities (59,527) (36,126)

Cash flows from investing activities Proceeds from disposal of property, plant and equipment 65,996 8Purchase of property, plant and equipment 13 (4,291) (1,247)(Increase)/Decrease in placement of fixed deposits (2,244) 3,306(Investment in)/Withdrawal of money market funds (26,791) 19,471

Net cash from investing activities 32,670 21,538

Cash flows from financing activitiesDrawdowns of borrowings 21,474 33,960Repayments of borrowings (14,556) (32,594)

Net cash from financing activities 6,918 1,366

Net decrease in cash and cash equivalents (19,939) (13,222)Cash and cash equivalents at beginning of financial year 64,719 77,941 Cash and cash equivalents at end of financial year 22 44,780 64,719

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CONSOLIDATED STATEMENT OF CASH FLOWSFor the financial year ended 30 June 2018



71


Note 2018 2017 RM'000 RM'000

Revenue 4 19,078 18,502Other income 6 16,032 177Administrative expenses (15,326) (12,580)Other expenses (1,598) (4,565)

Operating profit 18,186 1,534Finance costs 7 - (1)

Profit before tax 8 18,186 1,533Tax expense 11 (300) (210)

Profit for the financial year 17,886 1,323Other comprehensive income, net of tax - -

Total comprehensive income 17,886 1,323

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME




Note 2018 2017 RM'000 RM'000

Assets Non-current assetsProperty, plant and equipment 13 175 147Investments in subsidiaries 16 1,923,305 1,923,305Other investments 17 - -Deferred tax assets 18 1,743 2,139

1,925,223 1,925,591

Current assetsOther receivables 20 7,926 352,770Tax recoverable 1,668 1,158Other financial assets 21 37,439 10,648Cash and bank balances 22 363 461

47,396 365,037

Total assets 1,972,619 2,290,628

Equity and liabilities Equity attributable to owners of the CompanyShare capital 23 1,216,296 1,216,296Treasury share 23(b) (1,904) (1,904)Merger reserve 23(c) 636,856 636,856Retained profits 24 111,872 93,986

Total equity 1,963,120 1,945,234

Current liabilitiesOther payables 29 9,499 345,394

Total liabilities 9,499 345,394

Total equity and liabilities 1,972,619 2,290,628

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STATEMENT OF FINANCIAL POSITION As at 30 June 2018



73


STATEMENT OF CHANGES IN EQUITYFor the financial year ended 30 June 2018

Reserves Non-distributable Distributable

Share Treasury Share Merger Retained Total Total capital shares premium reserve profits reserves equity RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 (Note 23) (Note 23(b)) (Note 23(c)) (Note 24)

At 1 July 2017 1,216,296 (1,904) - 636,856 93,986 728,938 1,945,234Profit for the financial year - - - - 17,886 17,886 17,886

Other comprehensive income, net of tax - - - - - - -

Total comprehensiveincome - - - - 17,886 17,886 17,886

At 30 June 2018 1,216,296 (1,904) - 636,856 111,872 746,824 1,963,120

At 1 July 2016 1,207,262 (1,904) 9,034 636,856 92,663 736,649 1,943,911Profit for thefinancial year - - - - 1,323 1,323 1,323

Other comprehensive income, net of tax - - - - - - -

Total comprehensiveincome - - - - 1,323 1,323 1,323

Effects of the new Companies Act 2016 9,034 - (9,034) - - (9,034) -

At 30 June 2017 1,216,296 (1,904) - 636,856 93,986 728,938 1,945,234



Note 2018 2017 RM'000 RM'000

Cash flows from operating activitiesProfit before tax 18,186 1,533Adjustments for:Depreciation of property, plant and equipment 13 151 158Impairment losses on amounts due from subsidiaries 20(b) - 833Interest expense 7 - 1Interest income 6 (262) (172)Reversal of impairment losses on amounts due from subsidiaries 20(b) (15,766) -

Operating profit before working capital changes 2,309 2,353Changes in working capital:Other receivables 100 (163)Subsidiaries 7,809 (41)Other payables (1,995) 689

Cash generated from operations 8,223 2,838Interest received 262 172Interest paid - (1)Tax paid (414) (625)

Net cash from operating activities 8,071 2,384

Cash flows from investing activitiesPurchase of property, plant and equipment 13 (179) (94)(Investment)/Withdrawal of money market funds (26,791) 5,066Repayment from/(Advances to) subsidiaries 18,801 (4,675)

Net cash (used in)/from investing activities (8,169) 297

Cash flows from financing activityRepayment of borrowings - (2,452)

Net cash used in financing activity - (2,452)

Net (decrease)/increase in cash and cash equivalents (98) 229Cash and cash equivalents at beginning of financial year 461 232

Cash and cash equivalents at end of financial year 22 363 461

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STATEMENT OF CASH FLOWSFor the financial year ended 30 June 2018



75


NOTES TO THE FINANCIAL STATEMENTS 30 June 2018

1. Corporate information

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Marketof Bursa Malaysia Securities Berhad. The registered office and the principal place of business of the Company are locatedat No. 19, Jalan PJU 8/5H, Perdana Business Centre, Bandar Damansara Perdana, 47820 Petaling Jaya, Selangor Darul Ehsan.

The principal activities of the Company are those of investment holding and the provision of management services. Theprincipal activities of the subsidiaries are disclosed in Note 16 to the financial statements. There has been no significantchange in the nature of these activities during the financial year.

The consolidated financial statements for the financial year ended 30 June 2018 comprise the Company and itssubsidiaries. These financial statements are presented in Ringgit Malaysia (“RM”), which is also the functional currencyof the Company. All financial information presented in RM has been rounded to the nearest thousand (“RM'000”), unlessotherwise stated.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directorsdated 22 October 2018.

2. Summary of significant accounting policies

2.1 Basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with FinancialReporting Standards (“FRSs”) and the provisions of the Companies Act 2016 in Malaysia. The financial statementsof the Group and of the Company have been prepared under the historical cost convention except as otherwisestated in the financial statements.

The Group and the Company have also adopted the amendments to FRSs issued by the Malaysian AccountingStandards Board (“MASB”), as set out in Note 2.2 to the financial statements, which are effective from the beginningof the current financial year.

On 19 November 2011, the MASB issued a new approved accounting framework, the Malaysian Financial ReportingStandards (“MFRS Framework”).

The MFRS Framework is to be applied by all Entities Other Than Private Entities for annual periods beginning on orafter 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture (MFRS 141)and IC Interpretation 15 Agreements for Construction of Real Estate (IC 15), including its parent, significant investorand venturer (herein called “Transitioning Entities”).

Transitioning Entities are allowed to defer adoption of the new MFRS Framework. Consequently, adoption of the MFRSFramework by Transitioning Entities would be mandatory for annual periods beginning on or after 1 January 2018.

The Group and the Company fall within the scope definition of Transitioning Entities and accordingly, would berequired to prepare financial statements using the MFRS Framework in its first MFRS financial statements for theyear ending 30 June 2019. In presenting its first MFRS financial statements, the Group and the Company would berequired to adjust the comparative financial statements prepared under the FRS to amounts reflecting the applicationof MFRS Framework. The majority of the adjustments required on transition would be made, retrospectively, againstopening retained profits. The Group and the Company would adopt the MFRS Framework in the financial yearbeginning on 1 July 2018.


2. Summary of significant accounting policies (cont’d.)

2.2 New FRSs adopted during the current financial year

The Group and the Company adopted the following Amendments of the FRS Framework that were issued by theMalaysian Accounting Standards Board (“MASB”) during the financial year.

TitleAmendments to FRS 12 Annual Improvements to FRS Standards 2014 - 2016 CycleAmendments to FRS 107 Disclosure InitiativeAmendments to FRS 112 Recognition of Deferred Tax Assets for Unrealised Losses

There is no material impact upon the adoption of these Amendments during the financial year except for the adoptionof the Amendments to FRS 107 requires entity to provide disclosures that enable users of the financial statementsto evaluate changes in liabilities arising from financing activities, including both arising from cash flows and non-cashchanges. On initial application of these Amendments, entities are not required to provide comparative informationfor preceding periods.

2.3 New MFRSs that have been issued, but only effective for annual periods beginning on or after 1 January 2018

The Group and the Company are Transitioning Entities (“TE”) as defined by MASB and will apply the followingStandards and Amendments of the Malaysian Financial Reporting Standards (“MFRS”) Framework from 1 July 2018.

TitleAmendments to MFRS 1 Annual Improvements to MFRS Standards 2014 - 2016 CycleMFRS 15 Revenue from Contracts with CustomersMFRS 15 Clarifications to MFRS 15MFRS 9 Financial Instruments (IFRS as issued by IASB in July 2014)Amendments to MFRS 2 Classification and Measurement of Share-based Payment TransactionsAmendments to MFRS 128 Annual Improvements to FRS Standards 2014 - 2016 CycleIC Interpretations 22 Foreign Currency Transactions and Advance ConsiderationAmendments to MFRS 140 Transfers of Investment Property

The Group and the Company are in the process of assessing the impact of implementing these Standards since theeffects would only be observable for future financial years.

2.4 New MFRSs that have been issued, but only effective for annual periods beginning on or after 1 January 2019

The following are Standards and Amendments of the MFRS Framework that have been issued by the MASB buthave not been early adopted by the Group and by the Company.

Title Effective date

MFRS 16 Leases 1 January 2019Amendments to MFRS 128 Long-term Interests in Associates and Joint Ventures 1 January 2019Amendments to MFRS 3 Annual Improvements to MFRS Standards 2015 - 2017 Cycle 1 January 2019Amendments to MFRS 11 Annual Improvements to MFRS Standards 2015 - 2017 Cycle 1 January 2019Amendments to MFRS 112 Annual Improvements to MFRS Standards 2015 - 2017 Cycle 1 January 2019Amendments to MFRS 123 Annual Improvements to MFRS Standards 2015 - 2017 Cycle 1 January 2019IC Interpretations 23 Uncertainty over Income Tax Treatments 1 January 2019Amendments to MFRS 10 and MFRS 128 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Deferred

The Group and the Company are in the process of assessing the impact of implementing these Standards since theeffects would only be observable for future financial years.

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Notes to the Financial Statements 30 June 2018




2.5 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as atthe end of the reporting period. The financial statements of the subsidiaries used in the preparation of the consolidatedfinancial statements are prepared for the same reporting period as the Company. Consistent accounting policies areapplied to transactions and events in similar circumstances.

The Company controls an investee if and only if the Company has all the following:

(i) power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of theinvestee);

(ii) exposure, or rights, to variable returns from its investment with the investee; and

(iii) the ability to use its power over the investee to affect its returns.

When the Company has less than a majority of the voting rights of an investee, the Company considers the followingin assessing whether or not the Company’s voting rights in an investee are sufficient to give it power over the investee:

(i) the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of other voteholders;

(ii) potential voting rights held by the Company, other vote holders or other parties;

(iii) rights arising from other contractual arrangements; and

(iv) any additional facts and circumstances that indicate that the Company has, or does not have, the current abilityto direct the relevant activities at the time that decisions need to be made, including voting patterns at previousshareholders’ meetings.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases when the Companyloses control of the subsidiary. All intra-group balances, income and expenses and unrealised gains and lossesresulting from intra-group transactions are eliminated in full.

The financial statements of the subsidiaries are prepared for the same reporting period as that of the Company, usingconsistent accounting policies. Where necessary, accounting policies of subsidiaries are changed to ensureconsistency with the policies adopted by the Group.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control overthe subsidiaries are accounted for as equity transactions. The carrying amounts of the Company’s interests and thenon-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. The resultingdifference is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) the aggregateof the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carryingamount of the assets and liabilities of the subsidiary and any non-controlling interest, is recognised in profit or loss.The subsidiary’s cumulative gain or loss which has been recognised in other comprehensive income (“OCI”) andaccumulated in equity are reclassified to profit or loss or where applicable, transferred directly to retained earnings.The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as thecost on initial recognition of an investment.

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2.5 Basis of consolidation (cont’d.)

Business combinations

(a) Acquisitions of subsidiaries are accounted for using the acquisition method. The cost of an acquisition ismeasured as the aggregate of the consideration transferred, measured at their fair value at the acquisition dateand the amount of any non-controlling interests in the acquiree. The Group elects on a transaction-by-transactionbasis whether to measure the non-controlling interests in the acquiree either at fair value or at the proportionateshare of the acquiree’s identifiable net assets. Transaction costs incurred are expensed and included inadministrative expenses.

Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measuredat their fair value at the acquisition date, except that:

(i) Deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements arerecognised and measured in accordance with FRS 112 Income Taxes and FRS 119 Employee Benefitsrespectively;

(ii) Liabilities or equity instruments related to share-based payment transactions of the acquiree or thereplacement by the Group of an acquiree’s share-based payment transactions are measured in accordancewith FRS 2 Share-based Payment at the acquisition date; and

(iii) Assets (or disposal groups) that are classified as held for sale in accordance with FRS 5 Non-currentAssets Held for Sale and Discontinued Operations are measured in accordance with that Standard.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisitiondate. Subsequent changes in the fair value of the contingent consideration which is deemed to be an asset orliability, will be recognised in accordance with FRS 139 either in profit or loss or as a change to OCI. If thecontingent consideration is classified as equity, it will not be remeasured. Subsequent settlement is accountedfor within equity.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriateclassification and designation in accordance with the contractual terms, economic circumstances and pertinentconditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts bythe acquiree.

If the business combination is achieved in stages, the acquirer’s previously held equity interest in the acquireeis remeasured to fair value at the acquisition date through profit or loss.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred andthe amount recognised for non-controlling interests over the net identifiable assets acquired and liabilitiesassumed. If this consideration is lower than fair value of the net assets of the subsidiary acquired, the differenceis recognised in profit or loss as a gain on bargain purchase.

(b) Business combinations involving entities under common control are accounted for by applying the pooling ofinterest method. The assets and liabilities of the combining entities are reflected at their carrying amountsreported in the consolidated financial statements of the controlling holding company. Any difference betweenthe consideration paid and the share capital of the “acquired” entity is reflected within equity as mergerreserve/deficit. The profit or loss reflect the results of the combining entities for the full year, irrespective of whenthe combination takes place. Comparatives are presented as if the entities had always been combined sincethe date the entities had come under common control.

At the end of the reporting period, the Group’s retained profits for the current financial year after adjusting forproposed/declared dividend as at that date will be transferred to merger deficit.

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2.6 Subsidiaries

A subsidiary is an entity over which the Group and the Company have all the following:

- Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);- Exposure, or rights, to variable returns from its investment with the investee; and- The ability to use its power over the investee to affect its returns.

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost lessimpairment. Investments accounted for at cost shall be accounted for in accordance with FRS 5 Non-current AssetsHeld for Sale and Discontinued Operations when they are classified as held for sale (or included in a disposal groupthat is classified as held for sale) in accordance with FRS 5. On disposal of such investments, the difference betweennet disposal proceeds and their carrying amounts is included in the profit or loss.

2.7 Property, plant and equipment

All items of property, plant and equipment are initially measured at cost. The cost of an item of property, plant andequipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with theitem will flow to the Group and the Company and the cost of the item can be measured reliably. Cost also comprisesthe initial estimate of dismantling and removing the asset and restoring the site on which it is located for which theGroup is obligated to incur when the asset is acquired, if applicable.

Subsequent to initial recognition, property, plant and equipment are measured at cost less accumulated depreciationand accumulated impairment. When significant parts of property, plant and equipment are required to be replaced inintervals, the Group recognises such parts as individual assets with specific useful lives and depreciates it over its usefullife. Likewise, when a major replacement occurs, its cost is recognised in the carrying amount as a replacement if therecognition criteria are satisfied. All other repair and maintenance costs are recognised in the profit or loss as incurred.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of theasset and which has different useful life, is depreciated separately.

Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:

Leasehold land 1%Buildings and resort properties 2% - 33%Plant and machinery 10% - 25%Motor vehicles 20% - 25%Renovation 10% - 20%Furniture, fittings and equipment 10% - 40%

Assets under construction included in property, plant and equipment are not depreciated as these assets are not yetavailable for use. The carrying amounts of property, plant and equipment are reviewed for impairment when eventsor changes in circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjustedprospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits areexpected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in theyear the asset is derecognised.

When an indication of impairment exists, the carrying amount of the asset is written down immediately to itsrecoverable value. The policy for the recognition and measurement of impairment losses is in accordance with Note2.9 to the financial statements.

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2.8 Investment properties

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition,investment properties are measured at fair value which reflects market conditions as at the end of the reportingperiod. Fair value is arrived at by reference to market evidence of transaction prices for similar properties and isperformed by registered independent valuers having an appropriate recognised professional qualification and recentexperience in the location and category of the properties being valued. Gains or losses arising from changes in thefair values of investment properties are included in the profit or loss in the year in which they arise.

Investment properties are derecognised when either they have been disposed of or when the investment property ispermanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss onthe retirement or disposal of an investment property is recognised in the profit or loss in the year of retirement ordisposal.

Transfers are made to or from investment property only when there is a change in use. For a transfer from investmentproperty to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date ofchange in use. For a transfer from owner-occupied property to investment property, the property is accounted for inaccordance with the accounting policy for property, plant and equipment set out in Note 2.7 to the financial statementsup to the date of change in use.

2.9 Impairment of non-financial assets

The carrying amount of assets, except for financial assets (excluding investments in subsidiaries), inventories,deferred tax assets and investment properties measured at fair value, are reviewed at the end of each reportingperiod to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverableamount is estimated.

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

In assessing the value-in-use, the estimated future cash flows expected to be generated by the asset are discountedto their present values using a pre-tax discount rate that reflects current market assessments of the time value ofmoney and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount,the asset is written down to its recoverable amount. Impairment recognised in respect of a CGU or groups of CGUsis allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then,to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

An assessment is made at the end of the reporting period as to whether there is any indication that previouslyrecognised impairment may no longer exists or may have decreased. A previously recognised impairment is reversedonly if there has been a change in the estimates used to determine the asset’s recoverable amount since the lastimpairment was recognised. If that is the case, the carrying amount of the asset is increased to its recoverableamount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation,had no impairment been recognised previously. Such reversal is recognised in the profit or loss unless the asset ismeasured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment on goodwillis not reversed in a subsequent period.

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2.10 Financial assets

A financial asset is any asset that is cash, an equity instrument of another enterprise, a contractual right to receivecash or another financial asset from another enterprise, or a contractual right to exchange financial assets or financialliabilities with another enterprise under conditions that are potentially favourable to the Group and to the Company.

Financial assets are recognised in the statements of financial position when, and only when, the Group and theCompany become a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assetsnot at fair value through profit or loss, directly attributable transaction costs.

The Group and the Company determine the classification of their financial assets at initial recognition, and thecategories include financial assets at fair value through profit or loss, loans and receivables, held-to-maturityinvestments and available-for-sale financial assets.

(a) Financial assets at fair value through profit or loss

Financial assets are classified as financial assets at fair value through profit or loss if they are held for tradingor are designated as such upon initial recognition. Financial assets held for trading are derivatives (includingseparated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value.Any gain or loss arising from changes in fair value is recognised in the profit or loss. Net gain or net loss onfinancial assets at fair value through profit or loss does not include exchange differences, interest and dividendincome. Exchange differences, interest and dividend income on financial assets at fair value through profit orloss are recognised separately in profit or loss as part of other losses or other income.

Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assetsthat are held primarily for trading purposes are presented as current whereas financial assets that are not heldprimarily for trading purposes are presented as current or non-current based on the settlement date.

(b) Loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified asloans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effectiveinterest method. Gains and losses are recognised in profit or loss when the loans and receivables arederecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the end of the reporting period which are classified as non- current.

Loans and receivables of the Group and of the Company comprise of trade and other receivables (other thanaccrued billings and prepayments), amounts due from related companies and cash and bank balances.

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2.10 Financial assets (cont’d.)

(c) Held-to-maturity investments

Financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity whenthe Group has the positive intention and ability to hold the investment to maturity.

Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effectiveinterest method. Gains and losses are recognised in profit or loss when the held-to-maturity investments arederecognised or impaired, and through the amortisation process.

Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12months after the end of the reporting period which are classified as current.

(d) Available-for-sale financial assets

Available-for-sale financial assets are financial assets that are designated as available for sale or are notclassified in any of the three preceding categories.

Subsequent to initial recognition, available-for-sale financial assets are measured at fair value. Any gain or lossfrom changes in fair value of the financial asset is recognised in other comprehensive income, except forimpairment, foreign exchange gains and losses on monetary instruments and interest calculated using theeffective interest method are recognised in profit or loss as part of other losses or other income.

The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity tothe profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest incomecalculated using the effective interest method is recognised in the profit or loss. Dividends on an available-for-sale equity instrument are recognised in the profit or loss when the Group’s and the Company’s rights to receivepayment are established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost lessimpairment.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realisedwithin 12 months after the end of the reporting period.

Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly liquidinvestments that are readily convertible to known amount of cash and which are subject to an insignificant risk ofchanges in value with a maturity of three months or less. For the purpose of the statements of cash flows, cash andcash equivalents are presented net of bank overdrafts and pledged deposits.

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. Onderecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of theconsideration received and any cumulative gain or loss that had been recognised in other comprehensive income isrecognised in profit or loss.

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within theperiod generally established by regulation or convention in the marketplace concerned. All regular way purchasesand sales of financial assets are recognised or derecognised on the trade date i.e., the date that the Group and theCompany commit to purchase or sell the asset.

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2.11 Impairment of financial assets

The Group and the Company assess at the end of each reporting period whether there is any objective evidencethat a financial asset is impaired.

(a) Trade and other receivables and other financial assets carried at amortised cost

To determine whether there is objective evidence that an impairment on financial assets has been incurred, theGroup and the Company consider factors such as the probability of insolvency or significant financial difficultiesof the debtor and default or significant delay in payments. For certain categories of financial assets, such astrade receivables, assets that are assessed not to be impaired individually are subsequently assessed forimpairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for aportfolio of receivables could include the Group’s and the Company's past experience of collecting payments,an increase in the number of delayed payments in the portfolio past the average credit period and observablechanges in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment is measured as the difference between the asset’scarrying amount and the present value of estimated future cash flows discounted at the financial asset’s originaleffective interest rate. The impairment is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment directly for all financial assets with theexception of trade receivables, where the carrying amount is reduced through the use of an allowance account.When a trade receivable becomes uncollectible, it is written off against the allowance account.

If in a subsequent period, the amount of the impairment decreases and the decrease can be related objectivelyto an event occurring after the impairment was recognised, the previously recognised impairment is reversedto the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. Theamount of reversal is recognised in profit or loss.

(b) Unquoted equity securities carried at cost

If there is objective evidence (such as significant adverse changes in the business environment where the issueroperates, probability of insolvency or significant financial difficulties of the issuer) that an impairment on financialassets carried at cost has been incurred, the amount of the loss is measured as the difference between theasset’s carrying amount and the present value of estimated future cash flows discounted at the current marketrate of return for a similar financial asset.

2.12 Land held for property development and property development costs

(a) Land held for property development

Land held for property development consists of land where no development activities have been carried out orwhere development activities are not expected to be completed within the normal operating cycle. Such land isclassified within non-current assets and is stated at cost less any accumulated impairment.

Cost associated with the acquisition of land includes the purchase price of the land, professional fees, stampduties, commissions, conversion fees and other relevant levies.

Land held for property development is reclassified as property development costs at the point when developmentactivities have commenced and where it can be demonstrated that the development activities can be completedwithin the normal operating cycle.

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2.12 Land held for property development and property development costs (cont’d.)

(b) Property development costs

Property development costs comprise all costs that are directly attributable to development activities or that canbe allocated on a reasonable basis to such activities. They comprise the cost of land under development,construction costs and other related development costs common to the whole project including professionalfees, stamp duties, commissions, conversion fees and other relevant levies as well as borrowing costs.

When the financial outcome of a development activity can be reliably estimated, property development revenueand expenses are recognised in the profit or loss by using the stage of completion method. The stage ofcompletion is determined by the proportion that property development costs incurred for work performed to dateto the estimated total property development costs.

Where the financial outcome of a development activity cannot be reliably estimated, property developmentrevenue is recognised only to the extent of property development costs incurred that is probable will berecoverable, and property development costs on properties sold are recognised as an expense in the period inwhich they are incurred.

Any expected loss on a development project, including costs to be incurred over the defects liability period, isrecognised as an expense immediately.

Property development costs not recognised as an expense are recognised as an asset, which is measured atthe lower of cost and net realisable value.

The excess of revenue recognised in the profit or loss over billings to purchasers is classified as accrued billingswithin trade receivables and the excess of billings to purchasers over revenue recognised in the profit or loss isclassified as progress billings within trade payables.

2.13 Inventories

Inventories represent completed properties and consumables, which are stated at the lower of cost and netrealisable value.

The cost of unsold completed properties comprises cost associated with the acquisition of land, direct costsand appropriate proportions of common costs.

Cost of consumables is determined using either the specific identification or weighted average method, whereapplicable. The cost comprises all costs of purchase, cost of conversion plus other costs incurred in bringingthe inventories to their present location and condition.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs ofcompletion and the estimated costs necessary to make the sale.

2.14 Provisions

Provisions are recognised when the Group and the Company have a present obligation (legal or constructive)as a result of a past event, it is probable that an outflow of economic resources will be required to settle theobligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at the end of the reporting period and adjusted to reflect the current best estimate. If itis no longer probable that an outflow of economic resources will be required to settle the obligation, the provisionis reversed. If the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, where appropriate, the risks specific to the liability.

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2.15 Financial liabilities

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

(a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financialliabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities held for trading include derivatives entered into by the Group and the Company that do notmeet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and subsequentlystated at fair value, with any resultant gain or loss recognised in the profit or loss. Net gain or loss on derivativesincludes exchange differences.

The Group and the Company do not have any financial liability at fair value through profit or loss.

(b) Other financial liabilities

The Group’s and the Company’s other financial liabilities include trade payables, other payables and loans andborrowings.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs andsubsequently measured at amortised cost using the effective interest method.

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequentlymeasured at amortised cost using the effective interest method. Borrowings are classified as current liabilitiesunless the Group and the Company have an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

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

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

Any difference between the carrying amount of a financial liability extinguished or transferred to another party andthe consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse theholder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the originalor modified terms of a debt instrument.

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2.15 Financial liabilities (cont’d.)

The Group and the Company designate corporate guarantees given to banks for credit facilities granted tosubsidiaries as insurance contracts as defined in FRS 4 Insurance Contracts. The Group and the Company recognisethese insurance contracts as recognised insurance liabilities when there is a present obligation, legal or constructive,as a result of a past event, when it is probable that an outflow of resources embodying economic benefits would berequired to settle the obligation and a reliable estimate can be made of the amount of the obligation.

At the end of each reporting period, the Group and the Company assess whether its recognised insurance liabilitiesare adequate, using current estimates of future cash flows under its insurance contracts. If this assessment showsthat the carrying amount of the insurance liabilities is inadequate, the entire deficiency shall be recognised in profitor loss.

Recognised insurance liabilities are only removed from the statements of financial position when, and only when, it is extinguished via a discharge, cancellation or expiration.

2.16 Borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition,construction or production of that asset. Capitalisation of borrowing costs commences when the activities to preparethe asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred.Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale, after whichsuch expense is charged to profit or loss. Capitalisation of borrowing cost is suspended during extended periods inwhich active development is interrupted.

All other borrowing costs are recognised in profit or loss as part of other losses or other income in the period theyare incurred. Borrowing costs consist of interest and other costs that the Group and the Company incurred inconnection with the borrowing of funds.

2.17 Employee benefits

(a) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in whichthe associated services are rendered by employees. Short term accumulating compensated absences such aspaid annual leave are recognised when services are rendered by employees that increase their entitlement tofuture compensated absences. Short term non-accumulating compensated absences such as sick leave arerecognised when the absences occur.

Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make suchpayments, as a result of past events and when a reliable estimate can be made of the amount of the obligation.

(b) Defined contribution plans

Contributions to defined contribution pension schemes are recognised as an expense in the period in which therelated service is performed.

The Group and the Company participate in the national pension schemes as defined by the laws. The Groupand the Company make contributions to the Employee Provident Fund in Malaysia, a defined contributionpension scheme.

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2.17 Employee benefits (cont’d.)

(c) Employee share option scheme

Employees of the Group and the Company receive remuneration in the form of share options as considerationfor services rendered. The cost of these equity-settled transactions with employees is measured by referenceto the fair value of the options at the date on which the options are granted. This cost is recognised in profit orloss, with a corresponding increase in the employee share option reserve over the vesting period. The cumulativeexpense recognised at the end of the reporting period until the vesting date reflects the extent to which thevesting period has expired and the Group’s and the Company’s best estimate of the number of options that willultimately vest. The charge or credit to profit or loss for a period represents the movement in cumulative expenserecognised at the beginning and end of that period.

No expense is recognised for options that do not ultimately vest, except for options where vesting is conditionalupon a market or non-vesting condition, which are treated as vested irrespective of whether or not the marketor non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.The employee share option reserve is transferred to retained earnings upon expiry of the share options. Whenthe options are exercised, the employee share option reserve is transferred to share capital if new shares areissued, or to treasury shares if the options are satisfied by the reissuance of treasury shares.

When employees provide services in advance of the grant date, the grant date fair value is estimated for thepurposes of recognising the expense during the period between service commencement period and grant date.

2.18 Leases

(a) Finance leases and hire purchase

Finance leases, which transfer to the Group and the Company substantially all the risks and rewards incidentalto ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased assetor, if lower, at the present value of the minimum lease payments. The discount rate used in calculating thepresent value of the minimum lease payments is the interest rate implicit in the leases, if this is practicable todetermine; if not, the incremental borrowing rate of the Group is used. Any initial direct costs are also added tothe amount capitalised. Lease payments are apportioned between the finance charges and reduction of thelease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance chargesare recognised in the profit or loss. Contingent rents, if any, are charged as expenses in the periods in whichthey are incurred.

(b) Operating leases

Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonablecertainty that the Group and the Company will obtain ownership by the end of the lease term, the asset isdepreciated over the shorter of the estimated useful life and the lease term.

Operating lease payments are recognised as an expense in the profit or loss on a straight-line basis over thelease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rentalexpense over the lease term on a straight-line basis.

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2.18 Leases (cont’d.)

(c) Leases of land and buildings

For leases of land and buildings, the land and buildings elements are considered separately for the purpose oflease classification and these leases are classified as operating or finance leases in the same way as leases ofother assets.

The minimum lease payments including any lump-sum upfront payments made to acquire the interest in theland and buildings are allocated between the land and the buildings elements in proportion to the relative fairvalues of the leasehold interests in the land element and the buildings element of the lease at the inception ofthe lease.

2.19 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and theCompany and the revenue can be reliably measured. Revenue is measured at the fair value of consideration receivedor receivable.

(a) Revenue from property development activities

Revenue from sale of development properties is accounted for by using the stage of completion method asdescribed in Note 2.12(b).

(b) Sale of completed properties

Revenue relating to sale of completed properties is recognised, net of discounts, upon the transfer of significantrisks and rewards of ownership to the buyer.

(c) Revenue from resort operations

Room rental revenue is recognised on a daily basis on customer-occupied rooms. Revenue from the sales offood and beverage is recognised when the customer receives and consumes, and the Group has a presentrights to payment for the food and beverage product. Hotel revenue is recorded based on the published rates,net of discounts.

(d) Sale of goods

Revenue is recognised net of discounts and upon transfer of significant risks and rewards of ownership to thebuyer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery ofthe consideration due, associated costs or the possible return of goods.

Revenue relating to sale of land is recognised upon the transfer of significant risks and rewards of ownershipto the buyer.

(e) Revenue from services

Revenue from services rendered is recognised, net of taxes and discounts, when the services are performed.

(f) Rental income

Rental income arising from operating leases on investment properties is accounted for on a straight-line basisover the lease terms and is included in revenue in the profit or loss due to its operating nature.

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2.19 Revenue recognition (cont’d.)

(g) Management fees

Management fees are recognised when services are rendered.

(h) Dividend income

Dividend income is recognised when the shareholders’ right to receive payment is established.

(i) Education fees

Tuition fees are recognised when services are rendered.

(j) Interest income

Interest income is recognised as it accrues, using the effective interest method.

2.20 Income taxes

Income taxes include all domestic taxes on taxable profits. Income taxes also include real property gains taxespayable on the disposal of properties.

(a) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxauthority. The tax rates and tax laws used to compute the amount are those that are enacted or substantivelyenacted at the end of the reporting period.

Current taxes are recognised in the profit or loss except to the extent that the tax relates to items recognisedeither in other comprehensive income or directly in equity.

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the end of the reporting periodbetween the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

- where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in atransaction that is not a business combination and, at the time of the transaction, affects neither theaccounting nor the taxable profit; and

- in respect of taxable temporary differences associated with investments in subsidiaries, associates andinterests in joint ventures, where the timing of the reversal of the temporary differences can be controlledand it is probable that the temporary differences will not reverse in the foreseeable future.

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2.20 Income taxes (cont’d.)

(b) Deferred tax (cont’d.)

Deferred tax assets are recognised for all deductible temporary differences, unused tax credits and unused taxlosses, to the extent that it is probable that taxable profit will be available against which the deductible temporarydifferences, and the unused tax credits and unused tax losses can be utilised except:

- where the deferred tax asset relating to the deductible temporary difference arises from the initialrecognition of an asset or liability in a transaction that is not a business combination and, at the time of thetransaction, affects neither the accounting nor the taxable profit; and

- in respect of deductible temporary differences associated with investments in subsidiaries, associates andinterests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that thetemporary differences will reverse in the foreseeable future and taxable profit will be available againstwhich the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of the reporting period and reduced to theextent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferredtax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of the reporting period andare recognised to the extent that it has become probable that future taxable profits will allow the deferred taxassets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when theasset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantivelyenacted at the end of the reporting period.

Deferred tax would be recognised as income or expense and included in the profit or loss for the period unlessthe tax relates to items that are credited or charged, in the same or a different period, directly to equity, in whichcase the deferred tax would be charged or credited directly to equity.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off currenttax assets against current tax liabilities and the deferred taxes relate to the same taxable entity or differenttaxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise theassets and settle the liabilities simultaneously, in each future period in which significant amounts of deferredtax liabilities or assets are expected to be settled or recovered.

2.21 Operating segments

Operating segments are defined as components of the Group that:

(a) Engages in business activities from which it could earn revenues and incur expenses (including revenues andexpenses relating to transactions with other components of the Group);

(b) Whose operating results are regularly reviewed by the chief operating decision maker of the Group in makingdecisions about resources to be allocated to the segment and assessing its performance; and

(c) For which discrete financial information is available.

An operating segment may engage in business activities for which it has yet to earn revenues.

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2.21 Operating segments (cont’d.)

The Group reports separately information about each operating segment that meets any of the following quantitativethresholds:

(a) Its reported revenue, including both sales to external customers and inter-segment sales or transfers, is tenpercent (10%) or more of the combined revenue, internal and external, of all operating segments.

(b) The absolute amount of its reported profit or loss is ten percent (10%) or more of the greater, in absolute amount of:

(i) The combined reported profit of all operating segments that did not report a loss; and

(ii) The combined reported loss of all operating segments that reported a loss.

(c) Its assets are ten percent (10%) or more of the combined assets of all operating segments.

Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and separatelydisclosed, if the management believes that information about the segment would be useful to users of the financialstatements.

Total external revenue reported by operating segments shall constitute at least seventy-five percent (75%) of therevenue of the Group. Operating segments identified as reportable segments in the current financial year inaccordance with the quantitative thresholds would result in a restatement of prior period segment data for comparativepurposes.

2.22 Earnings per share

(a) Basic

Basic earnings per ordinary share for the financial year is calculated by dividing the profit for the financial yearattributable to owners of the parent by the weighted average number of ordinary shares outstanding during thefinancial year.

(b) Diluted

Diluted earnings per ordinary share for the financial year is calculated by dividing the profit for the financial yearattributable to owners of the parent by the weighted average number of ordinary shares outstanding during thefinancial year adjusted for the effects of dilutive potential ordinary shares.

2.23 Share capital and share issuance expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Companyafter deducting all of its liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs.Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in whichthey are declared.

2.24 Treasury shares

When shares of the Company, that have not been cancelled, recognised as equity are reacquired, the amount ofconsideration paid is recognised directly in equity. Reacquired shares are classified as treasury shares and presentedas a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue orcancellation of treasury shares. When treasury shares are reissued by resale, the difference between the salesconsideration and the carrying amount is recognised in equity.

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2.25 Contingent liabilities and contingent assets

A contingent liability is a possible obligation that arises from past events whose existence would be confirmed by theoccurrence or non-occurrence of one or more uncertain future events beyond the control of the Group and of theCompany or a present obligation that is not recognised because it is not probable that an outflow of resources wouldbe required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liabilitythat cannot be recognised because it cannot be measured reliably. The Group and the Company do not recognise acontingent liability but discloses its existence in the financial statements.

A contingent asset is a possible asset that arises from past events whose existence would be confirmed by theoccurrence or non-occurrence of one or more uncertain future events beyond the control of the Group and of theCompany. The Group and the Company do not recognise a contingent asset but discloses its existence where theinflows of economic benefits are probable, but not virtually certain.

In the acquisition of subsidiaries by the Group and the Company under business combinations, contingent liabilitiesassumed are measured initially at their fair value at the acquisition date.

2.26 Fair value measurements

Fair value, (except for share-based payment and lease transactions) is the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liabilitytakes place either:

(i) In the principal market for the asset or liability, or

(ii) In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to by the Group and the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use whenpricing the asset or liability, assuming that market participants act in their economic best interest.

The Group and the Company measure the fair value of an asset or a liability by taking into account the characteristicsof the asset or liability if market participants would take these characteristics into account when pricing the asset orliability. The Group and the Company have considered the following characteristics when determining fair value:

(a) The condition and location of the asset; and

(b) Restrictions, if any, on the sale or use of the asset.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generateeconomic benefits by using the asset in its highest and best use or by selling it to another market participant thatwould use the asset in its highest and best use.

The Group and the Company use valuation techniques that appropriate in circumstances and for which sufficientdata are available to measure fair value, maximising the use of relevant observable inputs and minimising the useof unobservable inputs.

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2.26 Fair value measurements (cont’d.)

The fair value of a financial or non-financial liability or an entity’s own equity instrument assumes that:

(a) A liability would remain outstanding and the market participant transferee would be required to fulfil the obligation.The liability would not be settled with the counterparty or otherwise extinguished on the measurement date; and

(b) An entity’s own equity instrument would remain outstanding and the market participant transferee would takeon the rights and responsibilities associated with the instrument. The instrument would not be cancelled orotherwise extinguished on the measurement date.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorisedwithin the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair valuemeasurement as a whole:

(i) Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

(ii) Level 2 - Valuation techniques for the lowest level input that is significant to the fair value measurement is directlyor indirectly observable

(iii) Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurementis unobservable

For the purposes of fair value disclosures, the Group and the Company have determined classes of assets andliabilities on the basis of the nature, characteristics and risks of the assets or liabilities and the level of the fair valuehierarchy as explained above.

3. Significant accounting judgements and estimates

The preparation of the Group’s and the Company’s financial statements requires management to make judgements,estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and thedisclosure of contingent liabilities at the end of the reporting period. However, uncertainty about these assumptions andestimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liabilityaffected in the future.

3.1 Critical judgements made in applying accounting policies

In the process of applying the Group’s and the Company’s accounting policies, management has made the followingjudgements, apart from those involving estimations, which have the most significant effect on the amounts recognisedin the financial statements:

(a) Contingent liabilities

The Group determines whether an obligation in relation to a contingent liability exists at the end of the reportingperiod by taking into account all available evidence, including the opinion of experts. The evidence consideredincludes any additional evidence provided by events after the end of the reporting period. On the basis of suchevidence, the Group evaluates if the obligation needs to be recognised in the financial statements. Details ofthe contingent liabilities involving the Group are disclosed in Note 30 to the financial statements.

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3. Significant accounting judgements and estimates (cont’d.)

3.2 Key sources of estimation and uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reportingperiod that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilitieswithin the next financial year are discussed below:

(a) Property development

The Group recognises property development revenue and costs in the profit or loss by using the stage ofcompletion method. The stage of completion is measured by the proportion of property development costsincurred for work performed to date to the estimated total property development costs.

Significant judgement is required in determining the stage of completion, the estimated total propertydevelopment revenue and costs, as well as the recoverability of the development projects. In making thejudgement, the Group evaluates based on past experience and by relying on the work of specialists.

(b) Income tax

Significant estimation is involved in determining the provision for income taxes. There are certain transactionsand computations for which the ultimate tax determination is uncertain during the ordinary course of business.The Group and the Company recognises liabilities for expected tax issues based on estimates of whetheradditional taxes will be due. Where the final tax outcome of these matters is different from the amounts thatwere initially recognised, such differences will impact the income tax and deferred tax provisions in the periodin which such determination is made.

4. Revenue

Group Company 2018 2017 2018 2017 RM'000 RM'000 RM'000 RM'000

Revenue from property development and related activities 152,261 156,850 - - Sale of completed properties 4,821 9,727 - - Revenue from resort operations 23,393 23,858 - - Educational services 1,393 1,915 - - Rental income 10 10 - - Management fees from subsidiaries - - 19,078 18,502 181,878 192,360 19,078 18,502

5. Cost of sales

Group 2018 2017 RM'000 RM'000

Property development and related activities 69,036 57,895 Completed properties 4,347 6,784 Resort operations 13,750 12,834 Educational services 1,169 1,152

88,302 78,665

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6. Other income


Administrative fees received from sub-sales 169 334 - -Fair value gain on investment properties (Note 15) 440 434 - -Forfeiture income 324 813 - -Gain on disposal of property, plant and equipment 57,635 8 - -Interest income from deposits in licensed banks 1,376 2,184 262 172Miscellaneous income 294 776 4 5Rental income 2,990 3,085 - -Reversal of impairment losseson trade receivables (Note 20(a)) 1,198 2,083 - -

Reversal of impairment losses on amounts due from subsidiaries (Note 20(b)) - - 15,766 -

Reversal of impairment losses on other receivables (Note 20(c)) - 1,431 - -

Net reversal of accrued liquidated ascertained damages 4,172 20,084 - -

Reduction of payables 7,540 444 - -

Total 76,138 31,676 16,032 177

7. Finance costs


Interest expense on:- Borrowings 4,658 4,060 - 1- Unwinding of interest 2,209 2,567 - -Less: Amount capitalised in property development costs (Note 14) (1,222) (144) - -

5,645 6,483 - 1

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8. Profit before tax

Profit before tax is arrived at after charging:


Auditors’ remuneration- statutory audit - current 380 340 90 90- under provision in prior year 25 106 25 159

- non-statutory audit - current 15 10 10 10- under provision in prior year 5 - - -

Depreciation of property, plant and equipment (Note 13) 6,689 8,568 151 158

Employee benefits expense (Note 9) 37,066 34,863 12,417 13,483Impairment losses on trade receivables(Note 20(a)) 25,942 1,371 - -

Impairment losses on other receivables (Note 20(c)) 803 1,117 - -

Impairment losses on amountsdue from subsidiaries (Note 20(b)) - - - 833

Provision for tax penalty (Note 30(b)) - 4,535 - -Rental expense:- subsidiaries - - 542 542- others 542 1,020 157 76Written off of property, plant and equipment (Note 13) 44 - - -

Write-down of inventories 611 4,928 - -

9. Employee benefits expense


Salaries, wages, bonuses and allowances 29,794 24,585 10,079 11,536Contribution to defined contribution plans 4,200 3,067 1,632 1,362Social security costs 417 290 75 61Other staff benefits 2,655 6,921 631 524

37,066 34,863 12,417 13,483

Included in employee benefits expense of the Group and of the Company is the Directors’ remuneration amounting toRM3,549,000 (2017: RM3,643,000) as further disclosed in Note 10 to the financial statements.

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10. Directors’ remuneration

Group/Company 2018 2017 RM'000 RM'000

Executive: Salaries 2,028 1,730 Contribution to defined contribution plans 430 379 Allowances 437 367 Benefits-in-kind 170 141

3,065 2,617

Non-Executive: Fees 350 858 Allowances 134 168 484 1,026

Total 3,549 3,643

The number of Directors of the Company whose total remuneration during the financial year fell within the following bandsis analysed below:

Number of Directors 2018 2017

Executive Directors: RM1 - RM500,000 - 1 RM500,001 - RM1,000,000 - - RM1,000,001 - RM1,500,000 1 - RM1,500,001 - RM2,000,000 - - RM2,000,001 - RM2,500,000 1 1

Non-Executive Directors: < RM50,000 - 1 RM50,001 - RM100,000 3 - RM100,001 - RM150,000 2 3 RM150,001 - RM200,000 - 1 RM200,001 - RM250,000 - - RM250,001 - RM300,000 - - RM300,001 - RM350,000 - - RM350,001 - RM400,000 - - RM400,001 - RM450,000 - - RM450,001 - RM500,000 - 1 > RM500,000 - -

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11. Tax expense

The major components of tax expense for the year ended 30 June 2018 and 30 June 2017 are:


Current tax expense based on profitfor the financial year:

Current tax 9,814 18,215 552 880Under/(Over) - provision in prior years 6,989 4,419 (648) (436)

16,803 22,634 (96) 444

Deferred tax (Note 18): Relating to (reversal)/increase of temporary differences (2,781) 4,823 399 (230)

Under/(Over) - provision in prior years 5,532 (7,553) (3) (4)

2,751 (2,730) 396 (234)

19,554 19,904 300 210

The Malaysian income tax is calculated at the statutory tax rate of 24% (2017: 24%) of the estimated taxable profits forthe fiscal year.

Reconciliation between tax expense and accounting profit

A reconciliation of tax expense applicable to profit before tax at the statutory income tax rate to income tax expense at theeffective income tax rate of the Group and of the Company are as follows:

2018 2017 RM'000 RM'000

Group

Profit before tax 44,053 38,037

Tax at Malaysian statutory tax rate of 24% (2017: 24%) 10,573 9,129 Income not subject to tax (12,119) (43) Expenses not deductible for tax purposes 5,548 9,335 Deferred tax assets not recognised 3,292 4,804 Utilisation of previously unrecognised deferred tax assets (261) (187) Under - provision of income tax expense in prior years 6,989 4,419 Under/(Over) - provision of deferred tax in prior years 5,532 (7,553)

Tax expense for the year 19,554 19,904

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11. Tax expense (cont’d.)

Reconciliation between tax expense and accounting profit (cont’d.)

A reconciliation of tax expense applicable to profit before tax at the statutory income tax rate to income tax expense at theeffective income tax rate of the Group and of the Company are as follows (cont’d.):

2018 2017 RM'000 RM'000

Company

Profit before tax 18,186 1,533

Tax at Malaysian statutory tax rate of 24% (2017: 24%) 4,365 368 Income not subject to tax (3,847) (41) Expenses not deductible for tax purposes 433 323 Over - provision of income tax expense in prior years (648) (436) Over - provision of deferred tax in prior years (3) (4)

Tax expense for the year 300 210

Tax savings of the Group is as follows:

Group 2018 2017 RM'000 RM'000

Arising from utilisation of previously unrecognised tax losses 261 187

12. Earnings per share

(a) Basic

Basic earnings per ordinary share are calculated by dividing the profit for the year attributable to owners of theCompany by the weighted average number of ordinary shares in issue during the financial year, excluding treasuryshares held by the Company.

Group 2018 2017

Profit attributable to ordinary owners of the Company (RM'000) 24,499 18,133 Weighted average number of ordinary shares in issue ('000) 1,204,590 1,204,590 Basic earnings per share (sen) 2.0 1.5

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12. Earnings per share (cont’d.)

(b) Diluted

There is no dilutive effect on earnings per share as the Group does not have any potential dilutive ordinary sharesas at the end of the reporting period.

Diluted earnings per ordinary share equals basic earnings per ordinary share as the Company has no dilutive potentialordinary share in issue as at the end of the reporting period.

13. Property, plant and equipment

Furniture, Buildings fittings Freehold Leasehold and resort Plant and Motor and land land properties machinery vehicles equipment Renovation Total Group RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 30 June 2018

Cost

At 1 July 2017 5,229 38,402 202,781 21,053 4,967 40,202 9,578 322,212 Additions - 110 215 41 92 3,251 647 4,356 Disposals - (6,041) (3,068) - - (323) (456) (9,888) Write off - - - (53) (129) (4,237) (310) (4,729)

At 30 June 2018 5,229 32,471 199,928 21,041 4,930 38,893 9,459 311,951

Accumulated depreciation andimpairment loss

At 1 July 2017 - 3,407 60,614 19,989 4,882 37,573 7,449 133,914 Depreciation charge for the year - 607 3,496 554 54 1,440 538 6,689 Disposals - (1,089) (115) - - (323) - (1,527) Write off - - - (48) (129) (4,197) (311) (4,685)

At 30 June 2018 - 2,925 63,995 20,495 4,807 34,493 7,676 134,391

Net carrying amount 5,229 29,546 135,933 546 123 4,400 1,783 177,560

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13. Property, plant and equipment (cont’d.)

Furniture, Buildings fittings Freehold Leasehold and resort Plant and Motor and land land properties machinery vehicles equipment Renovation Total Group RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 30 June 2017

Cost

At 1 July 2016 5,229 38,402 201,938 21,036 5,005 39,893 9,562 321,065 Additions - - 843 17 11 309 67 1,247 Disposals - - - - (49) - (51) (100)

At 30 June 2017 5,229 38,402 202,781 21,053 4,967 40,202 9,578 322,212

Accumulated depreciation and impairment loss At 1 July 2016 - 2,976 54,600 19,441 4,877 36,311 7,241 125,446 Depreciation charge for the year - 431 6,014 548 54 1,262 259 8,568 Disposals - - - - (49) - (51) (100)

At 30 June 2017 - 3,407 60,614 19,989 4,882 37,573 7,449 133,914

Net carrying amount 5,229 34,995 142,167 1,064 85 2,629 2,129 188,298

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Furniture and Motor Company Renovation fittings Equipment vehicles Total RM'000 RM'000 RM'000 RM'000 RM'000

At 30 June 2018

Cost At 1 July 2017 707 1,656 1,252 563 4,178 Additions - 21 158 - 179

At 30 June 2018 707 1,677 1,410 563 4,357

Accumulated depreciation At 1 July 2017 706 1,602 1,162 561 4,031 Depreciation charge for the year 1 21 127 2 151

At 30 June 2018 707 1,623 1,289 563 4,182

Net carrying amount At 30 June 2018 - 54 121 - 175

At 30 June 2017 Cost At 1 July 2016 707 1,650 1,164 563 4,084 Additions - 6 88 - 94

At 30 June 2017 707 1,656 1,252 563 4,178

Accumulated depreciation At 1 July 2016 706 1,583 1,023 561 3,873 Depreciation charge for the year - 19 139 - 158

At 30 June 2017 706 1,602 1,162 561 4,031

Net carrying amount At 30 June 2017 1 54 90 2 147

(a) During the financial year, the Group and the Company made the following cash payments to purchase property, plantand equipment:


Purchase of property, plant and equipment 4,356 1,247 179 94 Financed by hire purchase (65) - - -

Cash payments on purchase of property, plant and equipment 4,291 1,247 179 94

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(b) Carrying amount of the Group’s property, plant and equipment held under hire purchase are as follows:

Group 2018 2017 RM'000 RM'000

Motor vehicles 121 71

(c) Carrying amount of the Group’s property, plant and equipment pledged for borrowings as referred to in Note 25 tothe financial statements are as follows:

Group 2018 2017 RM'000 RM'000

Leasehold land and buildings 8,827 9,067

14. Land held for property development and property development costs

(a) Land held for property development

Group 2018 2017 RM'000 RM'000

At beginning of the year: Freehold land 1,399 4,118 Leasehold land 226,641 227,228 Development costs 493,204 471,128 721,244 702,474

Cost incurred/(reversed) during the year: Development costs 27,966 930 Reversal of cost to complete - (5,160) 27,966 (4,230)

Transfers from: Property development cost (Note 14(b)) 10,448 40,309

10,448 40,309

Disposals (2,063) (17,309)

At end of the year: Freehold land 1,399 1,399 Leasehold land 226,499 226,641 Development costs 529,697 493,204

757,595 721,244

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14. Land held for property development and property development costs (cont’d.)

(b) Property development costs

Group 2018 2017 RM'000 RM'000

At beginning of the year: Freehold land 4,394 5,635 Leasehold land 102,251 106,820 Development costs 1,971,907 1,926,276 2,078,552 2,038,731

Costs incurred during the year: Development costs 96,118 80,130

Costs recognised in profit or loss: At beginning of the year (1,895,557) (1,798,271) Recognised during the year (108,271) (97,286) At end of the year (2,003,828) (1,895,557)

Transfer: To inventories (90,519) - To land held for property development (Note 14(a)) (10,448) (40,309) (100,967) (40,309)

At end of the year 69,875 182,995

The following properties and their related development expenditure are pledged as security for borrowings grantedto the Group as disclosed in Note 25 to the financial statements:

Group 2018 2017 RM'000 RM'000

Land held for property development: Leasehold land 33,882 30,221 Property development costs: Leasehold land 29,227 80,738 63,109 110,959

Included in the Group’s development expenditure is the following cost incurred during the financial year:

Group 2018 2017 RM'000 RM'000

Interest expense capitalised (Note 7) 1,222 144

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15. Investment properties

Group 2018 2017 RM'000 RM'000

At fair value At beginning of the year 149,020 145,090 Transferred from inventories - 3,496 Fair value gain recognised in profit or loss (Note 6) 440 434

At end of the year 149,460 149,020

The following investment properties are held under lease terms:

Leasehold land and buildings 149,460 149,020

(a) The amounts of direct expenses recognised in profit or loss during the financial year are as follows:

Group 2018 2017 RM'000 RM'000

Generating rental income 24 25 Non-generating rental income 939 971

(b) The fair value of investment properties of the Group are categorised as follows:

Level 1 Level 2 Level 3 Total RM'000 RM'000 RM'000 RM'000

2018

Leasehold land and buildings - - 149,460 149,460

2017

Leasehold land and buildings - - 149,020 149,020

(i) The fair values of the investment properties of the Group, which comprise land, office buildings and shoplotshave been arrived at on the basis of valuation carried out by independent firms of professional valuers. Theindependent professional valuers have adopted the comparison method, making reference to relevantcomparable transactions in the market as well as the present worth of the improvement and land values. Inarriving at the valuation, the independent professional valuers have made adjustments for factors, which wouldaffect the market value of the investment properties including but not limited to views, size, floor levels and timefactors.

(ii) The fair value measurements for the investment properties are based on the highest and best use which doesnot differ from their actual use.

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16. Investments in subsidiaries

Company 2018 2017 RM'000 RM'000

Unquoted shares, at cost 1,924,055 1,924,055 Less: Impairment losses (750) (750)

1,923,305 1,923,305

Details of the subsidiaries, all of which are incorporated in Malaysia, are as follows:

Effective interest in Name of company equity (%) Principal activities 2018 2017

BML Management Sdn. Bhd. 100 100 Dormant

Bukit Merah Resort Sdn. Bhd. 100 100 Operator of resort and theme park

Centralpolitan Development Sdn. Bhd. 100 100 Property development

Dominant Star Sdn. Bhd. 100 100 Property development, owner of hotel and golf course and investment holding

Golden Precinct Sdn. Bhd. 100 100 Dormant

Medan Prestasi Sdn. Bhd. 100 100 Property development, property investment and investment holding

Melur Unggul Sdn. Bhd. 100 100 Dormant

M.K. Development Sdn. Bhd. 100 100 Property development and property investment

M K Land Resources Sdn. Bhd. 100 100 Investment and property holding

M K Land Ventures Sdn. Bhd. 100 100 Investment and property holding

Paramoden Sdn. Bhd. 100 100 Property development

Plato Construction Sdn. Bhd. 100 100 Dormant

Profil Etika (M) Sdn. Bhd. 100 100 Dormant

Prominent Valley Berhad 100 100 Operator of golf club

Pujaan Pasifik Sdn. Bhd. 100 100 Operator of hotel

106




16. Investments in subsidiaries (cont’d.)

Details of the subsidiaries, all of which are incorporated in Malaysia, are as follows: (cont’d.)

Effective interest in Name of company equity (%) Principal activities 2018 2017

Saujana Triangle Sdn. Bhd. 100 100 Property development, property investment and investment holding

Segi Objektif (M) Sdn. Bhd. 100 100 Property development, owner of resort and theme park and investment holding

Sumbangan Berkat Sdn. Bhd. 100 100 Operator of hotel

Tema Teladan Sdn. Bhd. 100 100 Property development, owner of hotel and investment holding

Vast Option Sdn. Bhd. 100 100 Provision of educational services

Vibrant Leisure Sdn. Bhd. 100 100 Property development

Zaman Teladan Sdn. Bhd. 100 100 Property development

Paramount Innovation Sdn. Bhd. 100 100 Dormant

MK Training & Consultancy Sdn. Bhd. 100 100 Dormant

Ritma Mantap Sdn. Bhd. 100 100 Dormant

Duta Realiti Sdn. Bhd. 100 100 Dormant

The above subsidiaries are audited by BDO, Malaysia.

17. Other investments


Investment in bonds, held-to-maturity At beginning of the year 4,000 4,000 Less: Impairment losses (4,000) (4,000)

At end of the year - -

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18. Deferred tax

(a) The deferred tax assets and liabilities are made up of the following:


At beginning of the year 10,629 13,359 (2,139) (1,905) Recognised in profit or loss (Note 11) 2,751 (2,730) 396 (234)

At end of the year 13,380 10,629 (1,743) (2,139)

Presented after appropriate offsetting as follows: Deferred tax assets, net (2,011) (4,830) (1,743) (2,139)

Deferred tax liabilities, net 15,391 15,459 - -

13,380 10,629 (1,743) (2,139)

(b) The components and movements of deferred tax liabilities and assets during the financial year are as follows:

Deferred tax liabilities of the Group:

Excess of capital allowances over book Investment depreciation properties Others Total RM'000 RM'000 RM'000 RM'000

At 1 July 2017 3,138 8,993 3,328 15,459 Recognised in profit or loss 881 (728) (221) (68)

At 30 June 2018 4,019 8,265 3,107 15,391

At 1 July 2016 2,427 1,999 13,723 18,149

Recognised in profit or loss 711 6,994 (10,395) (2,690)

At 30 June 2017 3,138 8,993 3,328 15,459

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18. Deferred tax (cont’d.)

(b) The components and movements of deferred tax liabilities and assets during the financial year are as follows: (cont’d.)

Deferred tax assets of the Group:

Tax losses and unabsorbed capital allowances Provisions Total RM'000 RM'000 RM'000

At 1 July 2017 (1,123) (3,707) (4,830) Recognised in profit or loss 1,123 1,696 2,819

At 30 June 2018 - (2,011) (2,011)

At 1 July 2016 (1,080) (3,710) (4,790)

Recognised in profit or loss (43) 3 (40)

At 30 June 2017 (1,123) (3,707) (4,830)

Deferred tax liabilities of the Company:

Excess of capital allowances over book depreciation RM'000

At 1 July 2016 9 Recognised in profit or loss (9)

At 30 June 2017 -

Deferred tax assets of the Company:

Provisions RM'000

At 1 July 2017 (2,139) Recognised in profit or loss 396

At 30 June 2018 (1,743)

At 1 July 2016 (1,914) Recognised in profit or loss (225)

At 30 June 2017 (2,139)

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18. Deferred tax (cont’d.)

(c) The amount of temporary differences for which no deferred tax assets have been recognised in the statements offinancial position are as follows:

Group 2018 2017 RM'000 RM'000

Unutilised tax losses 64,756 54,958 Unabsorbed capital allowances 11,495 9,056 Other temporary differences 15,702 15,308 91,953 79,322

The availability of the unutilised tax losses, unabsorbed capital allowances and other temporary differences foroffsetting against future taxable profits of the respective subsidiaries are subject to no substantial changes inshareholdings under the Income Tax Act, 1967 and guidelines issued by the tax authority. Deferred tax assets werenot recognised in respect of the above as certain subsidiaries do not foresee sufficient future taxable profits beingavailable for offsetting against these items.

The deductible temporary differences do not expire under the current tax legislation.

19. Inventories

Group 2018 2017 RM'000 RM'000

At cost: Completed properties 126,558 53,987 Food, beverage, supplies and merchandise 383 418 126,941 54,405

At net realisable value: Completed properties 63,790 63,921 190,731 118,326

During the financial year, the amount of inventories recognised as an expense in cost of sales of the Group wasRM4,347,000 (2017: RM6,784,000).

Included in the inventories is an amount of RM47,425,000 (2017: RM Nil) pledged as security for borrowings granted tothe Group as disclosed in Note 25 to the financial statements.

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20. Trade and other receivables

Group Company 2018 2017 2018 2017 Note RM'000 RM'000 RM'000 RM'000

Trade receivablesThird parties (a) 56,699 100,892 - -Stakeholders’ sum 36,865 51,328 - -Accrued billings in respect of

property development costs 33,560 37,799 - -

127,124 190,019 - -Less: Impairment losses (41,012) (16,572) - -

Trade receivables, net 86,112 173,447 - -

Other receivablesAdvances to contractors 13,503 13,556 - -Deposits and prepayments 5,818 6,381 207 355Due from subsidiaries (b) - - 7,649 368,159Sundry receivables 28,054 12,619 70 22

47,375 32,556 7,926 368,536Less: Impairment losses (20,145) (19,887) - (15,766)

Other receivables, net (c) 27,230 12,669 7,926 352,770

Total trade and other receivables 113,342 186,116 7,926 352,770

Total trade and other receivables 113,342 186,116 7,926 352,770

Less: Prepayments (893) (197) (76) (224)Less: Accrued billings in respect of

property development costs (33,560) (37,799) - -

Total loans and receivables 78,889 148,120 7,850 352,546

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20. Trade and other receivables (cont’d.)

(a) Trade receivables

The Group’s normal trade credit terms range from 14 to 90 days (2017: 14 to 90 days). Other credit terms areassessed and approved on a case-by-case basis. The Group has no significant concentration of credit risk that mayarise from exposures to a single debtor or a group of debtors.

Ageing analysis of trade receivables

The ageing of trade receivables (third parties) as at the reporting date is as follows:

Group 2018 2017 RM'000 RM'000

Neither past due nor impaired 5,765 64,866

1 to 30 days past due not impaired 5,729 8,172 31 to 60 days past due not impaired 1,383 2,404 Above 60 days past due not impaired 2,810 8,878 9,922 19,454 Impaired 41,012 16,572

56,699 100,892

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records withthe Group. None of the Group’s trade receivables that are neither past due nor impaired have been renegotiatedduring the financial year.

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM9,922,000 (2017: RM19,454,000) that are past due at the reportingdate but not impaired.

Receivables that are impaired

The Group’s trade receivables that are impaired at the reporting date and the movement of the allowance accountsused to record the impairment are as follows:

Group 2018 2017 RM'000 RM'000

Trade receivables (third parties) 56,699 100,892 Less: Impairment losses (41,012) (16,572) 15,687 84,320

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(a) Trade receivables (cont’d.)

The movement in allowance account for trade receivables are as follows:

Group 2018 2017 RM'000 RM'000

At 1 July 16,572 17,284 Charge for the year (Note 8) 25,942 1,371 Reversal of impairment losses (Note 6) (1,198) (2,083) Written off (304) -

At 30 June 41,012 16,572

Trade receivables that are individually determined to be impaired at the end of each reporting period relate to thosedebtors that exhibit significant financial difficulties and have defaulted on payments. These receivables are notsecured by any collateral or credit enhancements.

(b) Due from subsidiaries

Company 2018 2017 RM'000 RM'000

The amounts due from subsidiaries are classified as follows:

Management fees receivable - 7,809 Non-trade 7,649 360,350

7,649 368,159 Less: Impairment losses - (15,766)

7,649 352,393

The movement in allowance account for amounts due from subsidiaries are as follows:

At 1 July 15,766 14,933 Charge for the year (Note 8) - 833 Reversal of impairment losses (Note 6) (15,766) -

At 30 June - 15,766

The other amounts due from subsidiaries are unsecured, interest free and receivable upon demand in cash and cash equivalent.

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(c) Other receivables


Other receivables 47,375 32,556 277 377 Less: Impairment losses (20,145) (19,887) - -

27,230 12,669 277 377

The movement in allowance account for other receivables are as follows:

At 1 July 19,887 26,457 - - Charge for the year (Note 8) 803 1,117 - - Written off (545) (6,256) - -

Reversal of impairment losses (Note 6) - (1,431) - -

At 30 June 20,145 19,887 - -

Information on financial risks of trade and other receivables is disclosed in Note 32(a) to the financial statements.

21. Other financial assets


Fair value through profit or loss financial assets

Money market funds and trust funds 37,474 10,683 37,439 10,648

The carrying amounts of the money market funds and trust funds approximate fair value.

22. Cash and bank balances


Cash on hand and at banks 54,604 70,043 363 461 Deposits with licensed banks 4,766 6,306 - -

Cash and bank balances 59,370 76,349 363 461Less: Deposits with licensed

banks for more than 3 months (3,970) (1,774) - - Deposits with licensed banks pledged for bank guarantee facilities (796) (748) - - Bank overdrafts (Note 25) (9,824) (9,108) - -

Cash and cash equivalents 44,780 64,719 363 461

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22. Cash and bank balances (cont’d.)

(a) Included in cash and bank balances of the Group are:

Group 2018 2017 RM'000 RM'000

Amounts maintained pursuant to:

Section 7A of the Housing Development (Control and Licensing) Act, 1966 (“HDA”) (As amended by the Housing Development (Control and Licensing) (Amendment) Act, 2015) 44,112 43,262

Deposits with licensed banks pledged for bank guarantee facilities 796 748

(b) The weighted average effective interest rates of deposits as at reporting date were as follows:

Group 2018 2017 % %

Licensed banks 3.2 3.0

(c) The weighted average effective maturity of deposits as at reporting date were as follows:

Group 2018 2017 RM'000 RM'000

Licensed banks 62 160

23. Share capital

Group/Company Number of ordinary shares Amount

2018 2017 2018 2017 '000 '000 RM'000 RM'000

Ordinary shares:

At beginning of the year 1,207,262 1,207,262 1,216,296 1,207,262Transfer from share premium account pursuant to the new Companies Act 2016 - - - 9,034

At end of the year 1,207,262 1,207,262 1,216,296 1,216,296

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23. Share capital (cont’d.)

The owners of the ordinary shares are entitled to receive dividend as declared from time to time and are entitled to onevote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.

In previous financial year, share premium balances have been transferred to share capital pursuant to the transitionalprovisions in Section 618(2) of the Companies Act 2016.

(a) Employee Share Option Scheme (“ESOS”)

The Company’s ESOS is governed by the by-laws approved by the shareholders at an Extraordinary General Meetingheld on 29 November 2002. As at the reporting date and at the date of this report, the ESOS has yet to beimplemented. Accordingly, no options have been granted at the reporting date.

The salient features of the ESOS are as follows:

(i) The ESOS shall be in force for a period of five years from the date of offer which is yet to be determined.

(ii) Eligible persons are full time employees of the Group and of the Company (including executive Directors subjectto the approval by the Company in a general meeting) and must have attained the age of eighteen years beforethe date of the offer. The eligibility for participation in the ESOS shall be at the discretion of the Option Committeeappointed by the Board of Directors.

(iii) Total number of shares to be offered shall not at the time of offering the options exceed 10% of the total issuedand paid-up capital of the Company at any point in time or such maximum percentages as may be permitted bythe relevant authorities from time to time during the tenure of the ESOS.

(iv) The option price for each share shall be the average of the mean market price of the shares as shown in thedaily official list issued by Bursa Malaysia Securities Berhad for the five trading days preceding the date of offer,or the par value of the shares of the Company of RM1.00, whichever is the higher.

(v) There will be an equitable allocation to the various grades of eligible employees, such that not more than 50%of the shares available under the scheme should be allocated, in aggregate, to the senior management. Inaddition, not more than 10% of the shares available under the scheme should be allocated to any eligibleemployee who, either singly or collectively through his or her associates, holds 20% or more in the issued andpaid up capital of the Company.

(vi) An option granted under the ESOS shall be capable of being exercised by the grantee by notice in writing to theCompany before the expiry of five years from the date of the offer or such shorter period as may be specifiedin such offer.

(vii) The number of shares under option or the option price or both so far as the options remain unexercised may beadjusted following any variation in the issued share capital of the Company by way of capitalisation or rightsissue or a reduction, subdivision or consolidation of the Company’s shares made by the Company.

(viii) The shares under option shall remain unissued until the option is exercised and shall on allotment rank paripassu in all respects with the existing shares of the Company at the time of allotment save that they will notentitle the holders thereof to receive any rights and bonus issues announced or to any dividend or otherdistribution declared to the shareholders of the Company as at a date which precedes the date of the exerciseof the option.

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23. Share capital (cont’d.)

(b) Treasury shares

Group/ Company RM'000

At 30 June 2018/30 June 2017 (1,904)

This amount relates to the acquisition cost of treasury shares net of the proceeds received on their subsequent saleor issuance. As at 30 June 2018, the Company held as treasury shares a total of 2,672,000 of its 1,207,262,000issued ordinary shares at carrying amount of RM1,904,000.

(c) Merger (deficit)/reserve

(i) Merger deficit

Group 2018 2017 RM'000 RM'000

At 1 July (57,574) (69,620) Transfer from retained earnings 18,133 12,046

At 30 June (39,441) (57,574)

On 26 June 2002, the Company completed the acquisition of certain subsidiaries. The acquisition was satisfiedby way of cash payment of RM131,980,000 and the issuance of 819,186,207 new ordinary shares of RM1.00each in the Company’s shares at an issue price of RM1.45 per share.

The difference between the fair value of the shares in the Company issued as consideration and the nominalvalue of the shares acquired has been classified as merger deficit. The merger deficit was subsequently partiallyset off against retained earnings.

At each reporting date, the merger deficit will be reduced by transferring the Group’s retained profits for thecurrent financial year after adjusting for proposed/declared dividend as at that date, in accordance with theGroup’s accounting policy disclosed in Note 2.5(b) to the financial statements.

(ii) Merger reserve

Company RM'000

At 30 June 2018/30 June 2017 636,856

In prior years, the premiums on the shares issued by the Company as consideration for the acquisitions ofcertain subsidiary companies were recorded as merger reserve.

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24. Retained profits

The Company may distribute dividends out of its entire retained profits as at 30 June 2018 under the single tier system.

25. Borrowings

Group 2018 2017 RM'000 RM'000

Short term borrowings Secured: Term and bridging loans 34,315 18,126 Hire purchase payables (Note 26) 30 16

Bank overdraft (Note 22) 9,824 9,108

44,169 27,250

Long term borrowings Secured: Term and bridging loans 18,247 27,518

Hire purchase payables (Note 26) 139 88

18,386 27,606

Total borrowings Term and bridging loans 52,562 45,644 Hire purchase payables (Note 26) 169 104

Bank overdraft 9,824 9,108

62,555 54,856

(a) The weighted average interest rates during the financial year for borrowings are as follows:

Group 2018 2017 % %

Bank overdraft 7.7 7.7 Term and bridging loans 7.8 7.9

(b) The secured borrowings of the Group are secured by certain assets of the Group as disclosed in Notes 13, 14 and19 to the financial statements.

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25. Borrowings (cont’d.)

(c) Reconciliation of liabilities arising from financing activities:

Group 2018 RM'000

At beginning of the year 45,748

Cash flows 6,918

Non cash changes: Additions to property, plant and equipment which was financed by hire purchase 65

At end of the year 52,731

For reconciliation of liabilities arising from financing activities purpose, the bank overdrafts have been excluded fromthe borrowings. This is because of the cash and cash equivalents had already included bank overdrafts.

(d) Information on financial risks of borrowings is disclosed in Note 32(b) to the financial statements.

26. Hire purchase payables

Group 2018 2017 RM'000 RM'000

Minimum lease payments:

Not later than 1 year 34 21 Later than 1 year but not later than 2 years 35 21 Later than 2 years but not later than 5 years 122 61

Later than 5 years - 14

191 117Less: Future finance charges (22) (13)

Present value of finance lease liabilities 169 104

Repayable as follows: Current liabilities: - not later than one (1) year 30 16

Non-current liabilities: - later than one (1) year and not later than five (5) years 139 74 - later than five (5) years - 14 169 104

The effective interest rate of the hire purchase during the year was 4.84% (2017: 4.85%) per annum.

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27. Provision for liabilities

Liquidated Guaranteed Marketing ascertained Cost to Group rental returns incentives damages complete Total RM'000 RM'000 RM'000 RM'000 RM'000

At 30 June 2018 At beginning of the year 25 1,253 40,919 104,519 146,716 Reversal during the year, net of addition - - (4,172) (30,295) (34,467) Utilisation during the year (25) (23) (33,408) (36,275) (69,731)

At end of the year - 1,230 3,339 37,949 42,518

At 30 June 2017 At beginning of the year 1,004 1,835 125,311 174,341 302,491 Reversal during the year, net of addition (718) (582) (20,084) (10,370) (31,754) Utilisation during the year (261) - (64,308) (59,452) (124,021)

At end of the year 25 1,253 40,919 104,519 146,716

(a) Guaranteed rental returns and marketing incentives

Provisions for guaranteed rental returns and marketing incentives are in respect of the sale of development propertiesof the Group. The provisions are recognised for the expected guaranteed rental returns and marketing incentivesgranted to the purchasers based on agreements which outline the terms of the applicable guaranteed rental returnsand marketing incentives.

(b) Liquidated ascertained damages

Provision for liquidated and ascertained damages is in respect of projects undertaken by the Group. The provisionis recognised for the expected liquidated ascertained damages claims based on the terms of the applicable sale andpurchase agreements.

(c) Cost to complete

Provision for cost to complete represents the present obligation for property development, infrastructure and landcost relating to properties sold.

120




28. Long term payable

Long term payable relates to amount payable to the State Government of Perak is unsecured, non-interest bearing andpayable according to the progress of development undertaken by the Group.

The repayment schedule for land cost payable is as follows:

Under One to five Over five Total one year years yearsGroup RM'000 RM'000 RM'000 RM'000

Unsecured 2018Land cost payable 71,826 - - 71,826

2017Land cost payable 69,617 - - 69,617

The long term payable is discounted at the rate of 7% (2017: 7%).

29. Trade and other payables

Group Company 2018 2017 2018 2017 Note RM'000 RM'000 RM'000 RM'000

CurrentTrade payables (a)Third parties 53,548 40,338 - -Retention sums 43,061 57,043 - -

96,609 97,381 - -

Other payablesDue to Directors (b) 779 1,349 779 1,349Sundry payables 17,200 12,531 130 211Other accruals (c) 29,659 32,787 8,590 9,934Deposits and amount refundable to purchasers 1,273 13,533 - -

Due to subsidiaries - - - 333,900Amount due to a company in

which Directors have interests 45 - - -Amount due to a State Government 21,218 21,218 - -

70,174 81,418 9,499 345,394

166,783 178,799 9,499 345,394

121




29. Trade and other payables (cont’d.)


Non-currentLong term payable (Note 28) 71,826 69,617 - -

71,826 69,617 - -

Total trade and other payables 238,609 248,416 9,499 345,394Add: Borrowings (Note 25) 62,555 54,856 - -

Total financial liabilities carried at amortised costs 301,164 303,272 9,499 345,394

(a) Trade payables

Trade payables are non-interest bearing and the normal trade credit terms granted to the Group range from 30 to 90days (2017: 30 to 90 days).

(b) Due to Directors

The amounts due to Directors are in respect of Directors’ remuneration.

The amounts due to Directors and companies in which Directors have interests are unsecured, interest free andpayable upon demand in cash and cash equivalents.

Further details on related party transactions are disclosed in Note 31 to the financial statements.

(c) Other accruals

Included in other accruals are gratuities provided for former executive Directors amounted to RM5,464,800 (2017:RM5,464,800).

Information on financial risks of trade and other payables is disclosed in Note 32(b) to the financial statements.

30. Contingent liabilities - unsecured

(a) Medan Prestasi Sdn. Bhd. (“MPSB”) vs. Inland Revenue Board (“IRB”)

Between financial years 2002 and 2004, MPSB disposed of certain investment properties and filed the necessaryforms as required by the Real Property Gains Tax (“RPGT”) Act, 1976. The IRB contended that the gain from thesale should be subject to income tax instead of the RPGT and had ordered MPSB, a subsidiary of the Company, topay the outstanding tax liability and additional penalties amounted RM8.7 million and RM3.9 million respectively. TheDirectors disagreed with the IRB’s position and are currently appealing against the assessment.

Subsequently, IRB rejected MPSB’s appeal and demanded MPSB to pay the outstanding tax and additional penaltiesamounting to RM12.6 million. MPSB then appealed to the Special Commissioner of Income Tax (“SCIT”) andsubsequently to the High Court. The High Court, on 14 September 2012, ordered for a hearing to be fixed anddetermined before a new panel of SCIT.

On 14 September 2012, the Kuala Lumpur High Court held that there was a valid appeal and directed for the matterto be remitted to the SCIT to be heard.

122




30. Contingent liabilities - unsecured (cont’d.)

(a) Medan Prestasi Sdn. Bhd. (“MPSB”) vs. Inland Revenue Board (“IRB”) (cont’d.)

On 20 and 21 October 2014, the witnesses gave their evidences in respect of the appeal. The SCIT then fix for thecontinuance of the hearing on the 12 January 2015.

On 12 January 2015, the hearing continued with the witness from IRB giving her evidence in respect of the appeal.On 16 February 2015, MPSB has filed a written submission with the SCIT and subsequently filed a submission inreply to IRB’s written submission on 6 July 2015.

There was a coram failure as the SCIT who heard the case are no longer in service. Hence, a new SCIT panel wasconstituted and the case was heard on 24 November 2017. The case hearing was further adjourned to 23 April 2018.

After the hearing on 23 April 2018, the SCIT then required a witness to be called by MPSB on a next hearing date toexplain on the sub-division of the properties in dispute. The case was fixed for case management on 28 August 2018for the Court to fix a next hearing date.

On 28 August 2018, the next hearing date has been fixed on 22 February 2019 for the calling of the MPSB’s witnessand oral submissions.

The Group has not made any provision in the financial statements for this amount as MPSB is disputing the basis of theassessment and is of the view that the disposal of these investment properties should be subject to RPGT Act, 1976.

(b) Saujana Triangle Sdn. Bhd. (“STSB”) vs. Inland Revenue Board (“IRB”)

On 4 May 2017, STSB was served with Notices of Assessment for the years of assessment of 2009 to 2011 and2013 respectively for an additional income tax of RM55,702,000 and 45% penalty of RM25,066,000 totallingRM80,768,000.

The above mentioned income tax and penalty imposed by the IRB are in relation to:

(i) IRB has taken the view that the gains from the disposal of land held under investment properties in the year ofassessment 2009 are to be treated as revenue in nature, instead of capital in nature;

(ii) IRB has disregarded the 5 years’ time barred period to raise the assessments in respect of the land disposal;and

(iii) IRB has disallowed certain development costs on the basis that these are only provisions and the amounts haveyet to be paid. Thus, IRB does not treat them to be incurred for the purpose Section 33 (1) of the Income TaxAct, 1967.

Based on advice from both its tax consultants and solicitors, STSB is of the view that:

(i) The land sales of the investment properties are capital transaction which are liable to RPGT in the year ofassessment 2009 (which was a RPGT exempt year);

(ii) The Notices of Assessment raised by the IRB are statute barred and erroneous in Law; and

(iii) The accrual of development costs have been allowed according to accounting standards and IRB’s public rulingon property development.

STSB disagreed with the assessment raised by the IRB and has on 1 June 2017 filed a Notice of Appeal to the SpecialCommissioners of Income Tax (“SCIT”) pursuant to Section 99(1) of the Income Tax Act, 1967 (Form Q) with the DirectorGeneral of Inland Revenue to appeal against the Notices of Assessment. SCIT has yet to fix a hearing date.

123




30. Contingent liabilities - unsecured (cont’d.)

(b) Saujana Triangle Sdn. Bhd. (“STSB”) vs. Inland Revenue Board (“IRB”) (cont’d.)

Meanwhile, STSB has also made an Application to the High Court of Kuala Lumpur for a Judicial Review and Staywhich was dismissed on 9 August 2017. On the advice of its solicitors, STSB has on 10 August 2017 filed an appealto the Court of Appeal against the High Court's decision and filed a Notice of Motion to Stay on the effect andenforcement of the said Notices of Assessment pending the appeal before the Court of Appeal.

On 29 August 2017, the Court of Appeal has granted an interim stay on the IRB’s Notices of Assessment where acase management is scheduled on 14 September 2017 and a hearing may be fixed.

On 6 September 2017, the IRB has filed a Notice of Motion for Leave to Appeal to the Federal Court against theCourt of Appeal’s decision to grant the interim relief. The Federal Court has directed STSB to file its written submissionon 20 November 2017 and to attend a hearing on 4 December 2017.

On 16 October 2017, the Court of Appeal has scheduled a case management to be held on 15 November 2017 forSTSB to file its notes of proceeding of the appeal which Notice of Motion to stay remains at this juncture.

On 10 April 2018 and 11 April 2018, STSB was served with Writ of Summon and Statement of Claim for the years ofassessment of 2009 to 2011 and 2013 respectively for an additional tax penalty of RM12,296,000 after utilisation oftax credit of RM1,442,000.

On 19 September 2018, STSB and IRB have entered into a consent judgment that STSB will be granted a stay ofthe civil recovery proceedings at Shah Alam High Court until the full and final determination of its appeal at the SCIT.STSB and IRB are to attend the case management on 19 November 2018 to update the High Court on the status ofthe matter at the SCIT and the next hearing will be on 21 November 2019 and 22 November 2019.

Upon consulting its solicitors, the Board is of the view that there are grounds to disagree with the Notices ofAssessment raised including the imposition of penalties as explained above.

On a prudent and without prejudice basis, a provision of tax liability and penalty amounting RM4,580,000 andRM4,535,000 respectively have been made by the Directors in the financial statements of the previous financial year.STSB is of the view that the basis of the assessment that the gain on disposal of this investment properties shouldbe subject to RPGT and the development costs accrued being allowed according to financial reporting standardsand IRB’s public ruling on property development.

31. Significant related party transactions

(a) In addition to related party disclosures mentioned elsewhere in the financial statements, the Company had thefollowing transactions with related parties during the financial year:

Company 2018 2017 RM'000 RM'000

(Income)/Expense: Rental of premises payable to subsidiaries 542 542 Management fees from subsidiaries (19,078) (18,502)

The Directors are of the opinion that all the transactions above have been entered into in the normal course of thebusiness and have been established on mutually agreed terms and conditions.

124




31. Significant related party transactions (cont’d.)

(b) Compensation of key management personnel

The remuneration of Directors, key management personnel and senior management during the year are as follows:


Salaries and other emoluments 7,297 4,734 Defined contribution plans 952 563

Included in the total key management personnel compensation are:


Directors’ remuneration - executive 3,065 2,617 - non-executive 484 1,026 3,549 3,643

32. Financial risk management objectives and policies

The financial risk management objective of the Group and of the Company is to optimise value creation for shareholderswhilst minimising the potential adverse impact arising from fluctuations in interest rates and the unpredictability of thefinancial markets.

The Group and the Company operate within an established risk management framework and clearly defined guidelinesthat are regularly reviewed by the Board of Directors and do not trade in derivative financial instruments. Financial riskmanagement is carried out through risk review programmes, internal control systems, insurance programmes andadherence to the Group’s and the Company’s financial risk management policies. The Group and the Company areexposed mainly to credit risk, liquidity risk and interest rate risk. Information on the management of the related exposuresis detailed below.

(a) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparts default on itsobligation. The Group’s and the Company’s exposure to credit risk arises primarily from trade receivables.

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. At thereporting date there were no significant concentrations of credit risk other than amounts owing by subsidiaries thatmay arise from exposures to a single debtor or to groups of debtors. The maximum exposure to credit risk for theGroup and the Company is represented by the carrying amount of each financial assets.

125




32. Financial risk management objectives and policies (cont’d.)

(a) Credit risk (cont’d.)

The maximum exposure to credit risk without taking into consideration any collateral held or other credit enhancementis represented by the carrying amount of financial assets in the financial statements, net of impairment losses andgranting of corporate guarantees to subsidiaries as follows:

Company 2018 2017 RM'000 RM'000

Unsecured corporate guarantees given to licensed banks for facilities granted to: - subsidiaries - limit of guarantee 154,600 154,600 Amount utilised 62,385 54,751

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 20 to thefinancial statements. Deposits with banks and other financial institutions that are neither past due nor impaired are placedwith or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 20 to the financial statements.

(b) Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations dueto shortage of funds. The exposure to liquidity risk arises primarily from mismatches of the maturities of financialassets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of fundingand flexibility through the use of stand-by credit facilities.

The Group and the Company actively manage their debt maturity profile, operating cash flows and availability offunding so as to ensure that all operating, investing and financing needs are met. In executing their liquidity riskmanagement strategy, the Group and the Company measure and forecast their cash commitments and maintains alevel of cash and cash equivalents deemed adequate to finance the activities of the Group and the Company.

Maturity analysis

The table below summarises the maturity profile of the Group’s and Company’s financial liabilities at the reportingdate based on undiscounted contractual payment obligations:

On demand or within One to five Over five one year years years Total RM'000 RM'000 RM'000 RM'000

Group

2018 Financial liabilities:

Trade and other payables 166,783 - - 166,783 Borrowings 47,575 16,172 5,147 68,894

Long term payables - - 76,940 76,940

Total undiscounted financial liabilities 214,358 16,172 82,087 312,617

126




32. Financial risk management objectives and policies (cont’d.)

(b) Liquidity risk (cont’d.)

On demand or within One to five Over five one year years years Total RM'000 RM'000 RM'000 RM'000

2017 Financial liabilities: Trade and other payables 178,799 - - 178,799 Borrowings 27,250 25,178 6,159 58,587

Long term payables - - 76,940 76,940

Total undiscounted financial liabilities 206,049 25,178 83,099 314,326

Company


Other payables/Total undiscounted financial liabilities 9,499 - - 9,499


Other payables/Total undiscounted financial liabilities 345,394 - - 345,394

(c) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments would fluctuatebecause of changes in market interest rates.

The Group’s interest rate risk arises primarily from interest-bearing borrowings.

Sensitivity analysis for interest rate risk

The following table demonstrates the sensitivity analysis of the Group if interest rates at the end of each reportingperiod changed by twenty-five (25) basis points with all other variables held constant:

Group 2018 2017 Profit after tax RM'000 RM'000

- Increase by 0.25% (2017: 0.25%) (118) (104) - Decrease by 0.25% (2017: 0.25%) 118 104

The sensitivity is higher in 2018 than in 2017 because of an increase in outstanding borrowings during the financial

year. The assumed movement in basis points for interest rate sensitivity analysis is based on current observablemarket environment.

127




33. Fair values of financial instruments

Determination of fair value

Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value.

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts arereasonable approximation of fair value:

Note Trade and other receivables 20 Cash and bank balances 22 Borrowings 25 Trade and other payables 29

The carrying amounts of these financial assets and liabilities are reasonably approximation of fair values, either due totheir short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near thereporting date.

The Company provides guarantees to lenders for financing facilities extended to certain subsidiaries which are disclosedin Note 32(a) to the financial statements. The fair value of such financial guarantees is neglible as the probability of thesubsidiaries defaulting repayment and the licensed banks calling upon the financial guarantee are remote.

The carrying amounts of the current portion of loans and borrowings are reasonable approximation of fair values due tothe insignificant impact of discounting.

The fair values estimates of the following classes of financial instruments were determined by application of the methodsand assumptions described below:

(a) Borrowings

The fair values of these financial instruments are estimated by discounting expected future cash flows at marketincremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

(b) Long term payable

Fair value of long term payable is based on discounting expected future cash flows at market incremental lendingrate for the payable.

Fair value hierarchy

The following provides the fair value measurement hierarchy of the Group’s assets and liabilities. The different levels havebeen defined as follows:

Level 1 - the fair value is measured using quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - the fair value is measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - the fair value is measured using inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Non-financial instruments

The fair value of the investment properties as at 30 June 2018 and 30 June 2017 were determined based on valuationsperformed by independent professionally qualified valuers, on a direct comparison method. The fair value of the investmentproperties is categorised as Level 3 under the fair value hierarchy.

128




34. Operating lease commitments

(a) The Group as lessor

The Group has entered into non-cancellable lease agreements for its properties, resulting in future rental receivableswhich can, subject to certain terms in the agreements, be revised accordingly or upon its maturity based on prevailingmarket rates.

The Group has aggregate future minimum lease receivables as at the end of the reporting period as follows:

Group 2018 2017 RM'000 RM'000

Not later than one (1) year 2,839 1,458 Later than one (1) year and not later than five (5) years 7,343 3,122 Later than five (5) years 13,688 2,986 23,870 7,566

(b) The Group and the Company as lessee

The Group and the Company have entered into non-cancellable lease arrangements on their properties for termsranging from one (1) to three (3) years.

The Group and the Company have aggregate future minimum lease commitments as at the end of the reportingperiod as follows:


Not later than one (1) year 94 37 578 542 Later than one (1) year and not

later than five (5) years 49 4 566 -

143 41 1,144 542

35. Capital management

The primary objective of the capital management of the Group and of the Company is to ensure that they maintain a goodcredit rating and capital ratios in order to support its business, maximise shareholders' values, maintaining financialflexibility for its business requirement and investing for future growth. The Group and the Company manage its capitalstructure in accordance to the changes in economic conditions, its business plans and future commitments. No changeswere made in the objectives, policies or processes during the financial years ended 30 June 2018 and 2017.

129




35. Capital management (cont’d.)

The Group monitors capital using a gearing ratio, which is total borrowings divided by total equity. The gearing ratios asat 30 June 2018 and 2017 were as follows:

Group 2018 2017 RM'000 RM'000

Total borrowings (Note 25) 62,555 54,856 Total equity 1,199,450 1,174,951

Gearing ratio 5% 5%

The Group and the Company are not subject to any other externally imposed capital requirements.

36. Segment information

For management purposes, the Group is organised into business units based on their products and services, and hasfour reportable operating segments as follows:

(i) Property development - the development of mixed properties and its related activities;

(ii) Leisure - operation of resorts/hotels, golf course and theme parks;

(iii) Investment holding - investment in subsidiaries and property investment; and

(iv) Education - provision of educational services.

There are no other operating segments which have been aggregated to form the above four reportable operating segments.

The Group evaluates performance on the basis of profit or loss from operations before tax not including non-recurringlosses.

No segmental information is provided on a geographical basis as the Group’s activities are carried out predominantly in Malaysia.

The Directors are of the opinion that all inter-segment transactions have been entered into in the normal course of businessand have been established under terms that are no less favourable than those arranged with independent parties.

130




131



36.

Seg

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atio

n (

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132



36.

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36. Segment information (cont’d.)

Additions to non-current assets consist of the following:

Group 2018 2017 RM'000 RM'000

Property, plant and equipment 4,356 1,247

37. Significant events subsequent to the end of the reporting period

(a) Memorandum of Understanding (“MOU”) with Menteri Besar Incorporated (Perak) (“MB Inc”)

On 15 August 2018, Ritma Mantap Sdn. Bhd. (“RMSB”), a wholly-owned subsidiary of M K Land Holdings Berhad(“M K Land”) had entered into a MOU with MB Inc to participate in a joint venture to develop the Project Land (asdefined below) identified by The State Government of Perak Darul Ridzuan (“State Government of Perak”) andgranted to MB Inc for a mixed development consisting of housing and commercial units (“Proposed Development”).(The Company and MB Inc are collectively referred to as “Parties” and individually referred to as “Party”).

The MOU expresses the intentions of the Parties to collaborate together to develop a mixed development overapproximately 226 acres of land located in the Mukim of Teja and Mukim of Sungai Raya in the District of Kamparand the District of Kinta respectively, both in the State of Perak Darul Ridzuan as detailed below:

(i) Plot 1 and Plot 2 in the Mukim of Teja, District of Kampar, State of Perak, measuring in area approximately62.73 hectares (155 acres) (“Teja Land”); and

(ii) Plot 3 in the Mukim of Sungai Raya, District of Kinta, State of Perak, measuring approximately 28.732 hectares(71 acres) (“Sg Raya Land”).

(Teja Land and Sg Raya Land are collectively referred to as “Project Land”)

The Proposed Development shall be a mixed development that include affordable housing with amenities and basicinfrastructure serving the Proposed Development.

(b) Acquisition of a subsidiary

On 20 September 2018, RMSB had acquired one ordinary share representing 100% equity interest in Naluri MajujayaSdn. Bhd. (“NMSB”) for a cash consideration of RM1.00. Arising from the acquisition, NMSB became an indirectwholly-owned subsidiary of the Company.

On 27 September 2018, issued and paid up ordinary share capital of NMSB has been increased to RM300,000 byfurther allotment of 254,999 ordinary shares to RMSB for a cash consideration of RM254,999 and 45,000 ordinaryshares to MB Inc for a cash consideration of RM45,000. Arising from this allotment, NMSB became a 85% ownedindirect subsidiary of the Company.

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Net Carrying Amount @ Land / Age of Date of 30 June Description / Built-Up Building Acquisition, 2018Location Existing Use Area Tenure (Year) Valuation* (RM'000)

PT 44011, H.S.(D) 222395 (part), Land for 168.36 Leasehold 7/10/96, 253,786PT 46696, H.S.(D) 234003, proposed mixed acres expiring on 30/6/97* &PT 48041, H.S.(D) 267031, development. 18/8/2102, 23/6/03PT 47959 - 48023, H.S.(D) 8/6/2104,267033 - 267097, PT 48032, 13/9/2105 &H.S.(D) 267103, PT 48033, 21/12/2109H.S.(D) 267104 (part), PT 48035, H.S.(D) 267105 (part) & PT 48531, H.S.(D) 280464, Mukim of Sg. Buloh, District of Petaling, State of Selangor Darul Ehsan. PT 47373, H.S.(D) 256297, Land for 12.99 Leasehold 30/6/18* 90,560Mukim of Sg. Buloh, proposed mixed acres expiring onDistrict of Petaling, development. 13/5/2108State of Selangor Darul Ehsan.

Unit No. LA1, Ground Floor, A retail lot 1,485.33 Leasehold 30/6/18* 3,500Tropics Shopping Centre, sq. metres expiring onJln. PJU 8/1, Bdr. Damansara 8/6/2104Perdana, 47820 Petaling Jaya,Selangor Darul Ehsan.

PT 46227 - 46676, H.S.(D) Land for 22.65 Leasehold 31/8/00* 11,231233287 - 233985, Mukim of proposed mixed acres expiring onSg. Buloh, District of development. 12/9/2105Petaling Jaya, State of Selangor Darul Ehsan.

Parcels A - G, PT 47372, Land for 23.04 Leasehold 31/8/00* 19,891H.S.(D) 256296, PT 48035, proposed mixed acres expiring onH.S.(D) 267105 (part) & PT development. 16/10/209448033, H.S.(D) 267104 (part),Mukim of Sg. Buloh, District of Petaling, State of Selangor Darul Ehsan.

PT 12203, H.S.(D) 7821, Land for 3.60 Freehold 31/8/00* 2,898Mukim of Dengkil, District of proposed mixed acresSepang, State of Selangor development.Darul Ehsan.

LOT 70290 (PT 45196), Petrol Kiosk 0.50 Leasehold 30/6/18* 5,880PN 22356 (Formerly H.S.(D) Station acres expiring on198534), Mukim of Sungai Buloh, 5/3/2103District of Petaling, State of Selangor Darul Ehsan.

134


LIST OF MATERIAL PROPERTIES



PT 45157, H.S.(D) 198495, Land for 6.56 Leasehold 8/7/99 29,227Mukim of Sungai Buloh, proposed mixed acres expiring onDistrict of Petaling, State of development. 5/3/2103Selangor Darul Ehsan.

Lot 70324, PN 112377, Land for 11.76 Leasehold 8/7/99 83,921Mukim of Sungai Buloh, proposed mixed acres expiring onDistrict of Petaling, State of development. 7/2/2111Selangor Darul Ehsan.

Lot 28268, No. Hakmilik 42440 Land for 55.49 Leasehold 31/1/05 51,255Mukim Setapak, District of proposed mixed acres expiring onKuala Lumpur, State of development. 9/11/2083Wilayah Persekutuan & Lot 5113, No. Hakmilik 49024 Mukim Ulu Kelang, District of Kuala Lumpur, State of Wilayah Persekutuan.

PT 12035 - PT 12040, H.S.(D) Land for 95.42 Leasehold 8/7/99 53,97811244 - 11249, Mukim of proposed mixed acres expiring onSerendah, District of development. 12/6/2096Ulu Selangor, State of Selangor Darul Ehsan.

PT 12039 (part), H.S.(D) 11248, Land for 5.51 Leasehold 30/6/18* 3,000Mukim of Serendah, District of proposed mixed acres expiring onUlu Selangor, State of development. 12/6/2096Selangor Darul Ehsan.

PT 13777, H.S.(D) 14820, Land for 64.93 Leasehold 5/9/98 19,878Mukim Serendah, District of proposed mixed acres expiring onUlu Selangor, State of development. 4/9/2097Selangor Darul Ehsan.

PT 203089, H.S.(D) 136260, Land for 21.70 Freehold 1/12/04 5,857Mukim of Hulu Kinta, District of proposed mixed acresKinta, State of Perak development.Darul Ridzuan.

Parcel D5, held under PT 203091, Land for 41.82 Freehold 27/2/06 18,384H.S.(D) 136262, Mukim of proposed mixed acresHulu Kinta, District of Kinta, development.State of Perak Darul Ridzuan.

PT 181650, PT 80580 & PT 80581, Land for 22.33 Freehold 8/3/02 12,660Mukim of Hulu Kinta, District of proposed mixed acresKinta, State of Perak Darul Ridzuan. development.

135

List of Material Properties



136




PT 49262, PT 49263 & PT 57408 Land for 21.75 Leasehold 22/5/06 3,747Mukim of Hulu Kinta, District of proposed mixed acresKinta, State of Perak development.Darul Ridzuan.

PT 600 - 602 (part), PT 604, Land for 1,315.85 Leasehold 23/6/03* 120,315PT 605, PT 632, PT 633, proposed mixed acres land expiring PT 635, PT 638, PT 639, development on 15/8/2093, PT 640 (part), PT 641, PT 642, and resort. 17/10/2093, PT 3813 - 4264, PT 749 - 1131 16/6/2094 and & PT 1748 - 1825, Mukim of 28/4/2096 Gunung Semanggol, District of respectively.Kerian, State of Perak Darul Ridzuan.

PT 600 (part), PT 602 (part), Land for 102.97 Leasehold land 30/6/18* 37,570PT 603 (part), PT 636 (part) & proposed acres expiring onPT 640 (part), H.S.(D) KN 1175, commercial 15/8/2093 andH.S.(D) KN 1177 & H.S.(D) development. 29/6/2096KN 1183 respectively, Mukim of respectively.Gunung Semanggol, District of Kerian, State of Perak Darul Ridzuan.

Lot 9450 (part), formerly known Ecopark 3.50 Leasehold 19 30/6/18* 2,268as PT 602 Mukim of Gunung acres expiring onSemanggol, District of Kerian, 15/8/2093State of Perak Darul Ridzuan.

Lot 10089 & Lot 9450 (part) Water 14.14 Leasehold 21 30/6/18* 51,543PT 1887 (part), PT 602 (part) & Themepark, acres expiring onPT 603 (part), Mukim of Gunung Nursing College 15/8/2093Semanggol, District of Kerian, & Club HouseState of Perak Darul Ridzuan.

Lot 10090, PT1808, Mukim of Hotel 3.68 Leasehold 21 30/6/18* 21,692Gunung Semanggol, District of acres expiring on Kerian, State of Perak 15/8/2093Darul Ridzuan.

Lot 10089 & Lot 9450 (part), Marina Village 10.35 Leasehold 19 30/6/18* 24,707PT 1887 (part), Mukim of Gunung acres expiring on Semanggol, District of Kerian, 15/8/2093State of Perak Darul Ridzuan.

PT 1511 - PT 1520, H.S.(D) Land for 2,086.92 Leasehold 30/6/03* 98,997KN 1741 - 1750, Mukim of proposed mixed acres expiring onBeriah, District of Kerian, development. 8/1/2096State of Perak Darul Ridzuan.



PT 4067 - PT 4068, Mukim of Land for 748.30 Leasehold 27/6/97 21,605Beriah, District of Kerian, proposed mixed acres expiring onState of Perak Darul Ridzuan. development. 8/1/2096

PN 220222 & PN 220228 Land for 41.13 Leasehold 30/6/18* 6,550[PT 1516 & PT 1517 (Lot 7951 & proposed mixed acres expiring on 7952) (part)], PN 363402 [PT 1520 development. 8/1/2096(Lot 7955), (part)] & PT 4067 (part) andMukim of Beriah, District of Kerian, 17/07/2106State of Perak Darul Ridzuan. respectively

Lot PT 379 (part), H.S.(M) 46, Land for 50.77 Leasehold 31/10/00* 19,525Mukim of Padang Mat Sirat, proposed mixed acres expiring on District of Langkawi, State of development. 27/6/2098.Kedah Darul Aman. Geran Mukim of 1232, Lot 1922 Kuala Melaka 2,129 Freehold 9 2/12/02 14,841Mukim of Padang Mat Sirat, Inn, Hotel, sq. metresDistrict of Langkawi, State of Langkawi.Kedah Darul Aman.

Master Title Geran Mukim of Sub basement 1,678 Freehold 16 11/9/021231, Lot 1919 Mukim of area comprising sq. metresPadang Mat Sirat, District of of ballrooms, Langkawi, State of Kedah meeting rooms, Darul Aman. kitchen and other facilities within a block of service apartment.

Master Title Geran Mukim of Sub basement 2,893 Freehold 16 11/9/021231, Lot 1919 Mukim of area comprising sq. metresPadang Mat Sirat, District of of car park Langkawi, State of facilities within Kedah Darul Aman. a block of service apartment.

Master Title H.S.(M) 9 - 93, Sub basement 2,938 Freehold 16 11/9/02PT 249 Mukim of Padang area comprising sq. metresMat Sirat, District of Langkawi, of car park State of Kedah Darul Aman. facilities within a block of service apartment.

PT 449, H.S.(D) 264, Mukim of Ombak Villa, 40,800 Leasehold 5 11/9/02 38,441Padang Mat Sirat, District of Langkawi. sq. metres expiring onLangkawi, State of Kedah 28/4/2099Darul Aman.

137



7,251



Developer's Lot No.2, Block A, A renovated 1,948 Leasehold 18 30/6/18* 3,700Type A3, Phase 1A, Perdana five-storey sq. ft. expiring on Business Centre, Bandar intermediate 8/6/2104Damansara Perdana held shop-office with under Title H.S.(D) 222361, an attic floor PT 43977, Mukim of Sg. Buloh, equiped with a District of Petaling, State of passenger lift.Selangor Darul Ehsan (No. 17, Block A, Jln PJU 8/5H, PerdanaBusiness Centre, Bandar Damansara Perdana, 47820 Petaling Jaya, SDE.)

Developer's Lot No.1, Block A, A renovated 2,519 Leasehold 18 30/6/18* 4,850Type A1, Phase 1A, Perdana five-storey sq. ft. expiring on Business Centre, Bandar corner 8/6/2104Damansara Perdana held shop-office under Title H.S.(D) 222360, equiped with a PT 43976, Mukim of Sg. Buloh, passenger lift.District of Petaling, State of Selangor Darul Ehsan (No. 19, Block A, Jln PJU 8/5H, Perdana Business Centre, Bandar Damansara Perdana, 47820 Petaling Jaya, SDE.)

"Pejabat" land held under A parcel of 54,181 Leasehold 30/6/18* 1,350Master Title H.S.(D) 2052, commercial sq. ft. expiring onLot P.T. No. 1393, Mukim of land identified 31/5/2088Serendah, District of as "pejabat".Hulu Selangor, State of Selangor Darul Ehsan (38th km post along the Rawang/Tanjung Malim trunk road within the Serendah Golf Links Resort, Serendah, SDE.) Developer's Lot No.3, Block A, A renovated 1,948 Leasehold 18 30/6/18* 3,700Type A4, Phase 1A, Perdana five-storey sq. ft. expiring onBusiness Centre, Bandar intermediate 8/6/2104Damansara Perdana held under shop-office with Title H.S.(D) 222362, PT 43978, an attic floor Mukim of Sg. Buloh, District of equipped with a Petaling, State of Selangor passenger lift.Darul Ehsan (No. 15, Block A, Jln PJU 8/5H, Perdana Business Centre, Bandar Damansara Perdana, 47820 Petaling Jaya, SDE.)

138





Developer's Lot No.3A, A renovated 1,948 Leasehold 18 30/6/18* 3,650Block A, Type A3, Phase 1A, five-storey sq. ft. expiring onPerdana Business Centre, intermediate 8/6/2104Bandar Damansara Perdana shop-office held under Title H.S.(D) 222363, equipped with PT 43979, Mukim of Sg. Buloh, a passenger lift.District of Petaling, State of Selangor Darul Ehsan (No. 11A,Block A, Jln PJU 8/5H, PerdanaBusiness Centre, Bandar Damansara Perdana, 47820 Petaling Jaya, SDE.)

Developer's Lot No.5, Block A, A five-storey 1,948 Leasehold 18 30/6/18* 3,650Type A4, Phase 1A, intermediate sq. ft. expiring onPerdana Business Centre, shop-office 8/6/2104Bandar Damansara Perdana equipped with held under Title H.S.(D) 222364, a passenger lift.PT 43980, Mukim of Sg. Buloh, District of Petaling, State of Selangor Darul Ehsan (No. 11, Block A, Jln PJU 8/5H, Perdana Business Centre, Bandar Damansara Perdana, 47820 Petaling Jaya, SDE.)

139




NOTICE IS HEREBY GIVEN that the 39th Annual General Meeting of the Company will be held at Sime Darby ConventionCentre of 1A, Jalan Bukit Kiara 1, Bukit Kiara, 60000 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur on Thursday, 6 December 2018 at 10.00 a.m. for the following purposes:

AGENDA

Ordinary Business

1. To receive the Audited Financial Statements for the financial year ended 30 June 2018 togetherwith the Reports of the Directors and Auditors thereon.

2. To re-elect the following Directors who are retiring pursuant to Article 77 of the Constitution of theCompany and being eligible, have offered themselves for re-election:

(a) Pn Hjh Juliana Heather Binti Ismail (“Pn Hjh Juliana“)

(b) Ms Anita Chew Cheng Im (“Ms Anita Chew”)

3. To approve the payment of Directors’ fees of RM350,000 in respect of the financial year ended 30 June 2018.

4. To approve the payment of Directors’ remuneration (other than Directors’ fees) of up to RM250,000for the period from 6 December 2018 to until the conclusion of the next AGM of the Company.

5. To re-appoint Messrs BDO, the retiring auditors for the financial year ending 30 June 2019 and toauthorise the Board of Directors to fix their remuneration.

Special Business

To consider and if thought fit, with or without any modification(s), to pass the following ordinaryresolutions:

6. PROPOSED CONTINUATION IN OFFICE AS AN INDEPENDENT NON-EXECUTIVE DIRECTOR

“THAT Ms Anita Chew Cheng Im has served as Independent Non-Executive Director of theCompany for a cumulative term of more than nine (9) years, be continued to act as an IndependentNon-Executive Director of the Company.”

7. AUTHORITY TO ISSUE SHARES PURSUANT TO SECTIONS 75 AND 76 OF THE COMPANIESACT 2016

“THAT subject to Sections 75 and 76 of the Companies Act 2016 and approvals of the relevantgovernmental/regulatory authorities, the Directors be and are hereby empowered to issue and allotshares in the Company, at any time to such persons and upon such terms and conditions and forsuch purposes as the Directors may, in their absolute discretion, deem fit, provided that theaggregate number of shares to be issued does not exceed ten per centum (10%) of the total numberof the issued share (excluding treasury shares) of the Company for the time being AND THAT theDirectors be and are also empowered to obtain the approval for the listing of and quotation for theadditional shares so issued on Bursa Malaysia Securities Berhad (“Bursa Securities”).

Please refer toExplanatory

Note 1

Resolution 1 (Please refer to

Explanatory Note 2)


Explanatory Note 2)


Explanatory Note 3)


Explanatory Note 3)

Resolution 5

Resolution 6(Please refer to

Explanatory Note 4)

Resolution 7(Please refer to

Explanatory Note 5)

140


NOTICE OF ANNUAL GENERAL MEETING


141

Notice of Annual General Meeting

AND THAT such authority shall commence immediately upon the passing of this Resolution andcontinue to be in force until the conclusion of the next AGM of the Company, or at the expiry ofthe period within which the next AGM is required to be held after the approval was given, whicheveris earlier, unless revoked or varied by an ordinary resolution of the Company at a general meeting.”

8. To transact any other ordinary business of which due notice shall have been given.

By order of the Board

ALIZA BINTI AHMAD TERMIZI (LS 0009656)YEAP KOK LEONG (MAICSA 0862549)Secretaries


NOTES:

1. For the purpose of determining a member who shall be entitled to attend and vote at the 39th AGM, the Company shall berequesting the Record of Depositors as at 28 November 2018. Only a depositor whose name appears on the Record ofDepositors as at 28 November 2018 shall be entitled to attend and vote at the said meeting as well as for appointment ofproxy(ies) to attend and vote on his/her stead.

2. A member entitled to attend and vote at this meeting is entitled to appoint a proxy/(proxies or attorney) or authorisedrepresentative to attend and vote in its stead. A proxy may but need not be a member of the Company and a proxyappointed to attend, speak and vote at a meeting of a Company shall have the same rights as the member to speak atthe meeting.

3. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, itmay appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standingto the credit of the said securities account.

4. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for themultiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies whichthe exempt authorised nominee may appoint in respect of each omnibus account it holds.

5. Where a member or the authorised nominee or an exempt authorised nominee appoints two (2) or more proxies, theproportion of the shareholdings to be represented by each proxy must be specified in the instrument appointing the proxies.

6. The instrument appointing a proxy or the power of attorney or other authority, if any, under which it is signed or a notariallycertified copy of that power or authority shall be deposited at the registered office of the Company at 19, Jalan PJU 8/5H,Perdana Business Centre, Bandar Damansara Perdana, 47820 Petaling Jaya, Selangor Darul Ehsan, not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting at which the person named inthe instrument proposed to vote and in default the instrument of proxy shall not be treated as valid.

7. If the appointer is a corporation, this form shall be executed under its common seal or under the hand of its officer orattorney duly authorised.



8. If this Proxy Form is signed under the hands of an officer duly authorised, it should be accompanied by a statementreading “signed as authorised officer under Authorisation Document which is still in force, no notice of revocation havingbeen received”. If this Proxy Form is signed under the attorney duly appointed under a power of attorney, it should beaccompanied by a statement reading “signed under Power of Attorney which is still in force, no notice of revocation havingbeen received”. A copy of the Authorisation Document or the Power of Attorney, which should be valid in accordance withthe laws of the jurisdiction in which it was created and is exercised, should be enclosed in the Proxy Form.

EXPLANATORY NOTES

1. Explanatory Note 1

To receive the Audited Financial Statements for the financial year ended 30 June 2018

This agenda item is meant for discussion only as under the provision of Section 340(1)(a) of the Companies Act 2016(“the Act”), the audited financial statements do not require a formal approval of the shareholders. Hence, this resolutionwill not be put forward for voting.


To re-elect Pn Hjh Juliana and Ms Anita Chew who are retiring pursuant to Article 77 of the Constitution of the Companyand being eligible, have offered themselves for re-election.

Article 77 of the Constitution of the Company provides that one-third of the directors of the Company for the time beingshall retire by rotation at an AGM of the Company. The Directors who are subject to retirement by rotation in accordancewith Article 77 of the Constitution are Pn Hjh Juliana (Senior INED) and Ms Anita Chew [Independent Non-ExecutiveDirector (“INED”)].

For the purpose of determining the eligibility of the Directors to stand for re-election at the 39th AGM, the NominationCommittee (“NC”) has considered the following:

(a) The performance and contribution of each of the Directors based on their assessment results of the BoardEffectiveness Evaluation 2017/2018;

(b) The assessment of the individual Director’s level of contribution to the Board through each of their skills, experienceand strength in qualities; and

(c) In respect of INED, the level of independence demonstrated by each of the INEDs, and their ability to act in the bestinterests of the Company in decision-making, to ensure that they are independent of management and free from anybusiness or other relationship which could materially interfere with the exercise of their independent judgment or theability to act in the best interests of the Company.

In line with Practice 5.1 of the Malaysian Code on Corporate Governance (“MCCG”), the Board has conducted anassessment of independence of the non-executive directors, and also other criteria i.e. character, integrity, competence,experience and time commitment in effectively discharging their respective roles as Directors of the Company. Theindividual Directors were assessed based on performance criteria set in the areas of Board dynamics and participation,competency and capability, independence and objectivity, probity and personal integrity, contribution and performancetogether with their ability to make analytical inquiries and offer advice and guidance.

The Board agreed with NC’s recommendation that the Directors who retire in accordance with Article 77 of the Constitutionare eligible to stand for re-election. The retiring Directors had abstained from deliberations and decisions on their owneligibility to stand for re-election at the Board meeting.

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Directors’ Fees and Remuneration

Section 230(1) of the Act provides amongst others, that “the fees” of the directors and “any benefits” payable to the directorsof a listed company and its subsidiaries shall be approved at a general meeting. In this respect, the Board agreed that theshareholders’ approval shall be sought at the 39th AGM on the following:

• Resolution 4 To approve the payment of Directors’ fees of RM350,000 in respect of the financial year ended 30 June 2018 (“FYE 2018”).

• Resolution 5 To approve the payment of Directors’ remuneration (other than Directors’ fees) of up to RM250,000 for the period from 6 December 2018 until the conclusion of the next AGM of the Company (“the Relevant Period”).

Directors’ fees

The Remuneration Committee (“RC”) had reviewed the Directors’ fees and recommended to the Board the Directors’ feesfor the FYE2018. The Board agreed with RC’s recommendation that the Director’s fees provided in the table below arestill competitive and at par with prevalent market rate:-

Senior Independent Non-Executive Director RM108,000 per annum

Independent Non-Executive Director RM84,000 per annum

Directors’ remuneration (other than Directors’ fees)

The Directors’ remuneration (other than Directors’ fees) comprises allowances and other emoluments payable to the INEDof the Board and Board Committees. The current remuneration is as set out below:

Description INED

Other Benefits Medical & insurance coverage

Meeting Allowance for Board and Board Committees RM2,000(per meeting) for each INED

In determining the estimated total amount of remuneration (other than Directors’ fees) for the INED, the Board consideredvarious factors including the number of scheduled meetings for the Board and Board Committees as well as the numberof INED involved in these meetings. The estimated amount of RM250,000 for the Relevant Period is derived from estimatedattendance for about 10 Board Meetings held during the Relevant Period.

Payment of the INED remuneration (other than Directors’ fees) will be made by the Company as and when incurred if theproposed Resolution 4 has been passed at the 39th AGM.

The Board is of the view that it is just and equitable to pay the Directors’ remuneration (other than Directors’ fees) as andwhen incurred, particularly after INED have discharged their duties, responsibilities and rendered their services to theCompany throughout the Relevant Period.

143





Proposed continuation in office as an INED

The NC has assessed the independence of Ms Anita Chew, who served as an INED of the Company for a cumulativeterm of more than nine years and recommended her to continue to act as an INED of the Company as she has shownthat:

(a) she has fulfilled the criteria under the definition of Independent Director as stated in the MMLR and will thus be ableto function as a check and balance, and bring an element of objectivity to the Board;

(b) her vast experience in corporate finance has enhanced the Board’s diverse set of experience, expertise andindependent judgement;

(c) she has been with the Company for a cumulative term of nine years and has good knowledge of the Company’sbusiness operations and the property development market;

(d) she has devoted sufficient time and attention to her professional obligations for informed and balanced decisionmaking; and

(e) she has exercised due care during her tenure as an INED of the Company and carried out her professional duties inthe best interest of the Company and shareholders.


Authority to issue Shares pursuant to Sections 75 and 76 of the Companies Act 2016

The Ordinary Resolution 7 is proposed to seek a renewal of general authority pursuant to Sections 75 and 76 of the Act.If passed, it will give the Directors of the Company from the date of the above meeting, authority to issue and allot sharesfor such purposes as the Directors consider would be in the interest of the Company. The authority will continue to be inforce until the conclusion of the next AGM of the Company, or at the expiry of the period within which the next AGM isrequired to be held after the approval was given, whichever is earlier, unless revoked or varied by the Company in generalmeeting, at a general meeting.

As at the date of this notice, no new shares in the Company were issued pursuant to the general authority to the Directorsfor issuance of shares pursuant to the Act, obtained at the 38th AGM held on 13 December 2017 and which will lapse atthe conclusion of the 39th AGM.

The general mandate sought will enable the Directors of the Company to issue and allot shares, including but not limitedfor further placing of shares for purpose of funding investment(s), working capital and/or acquisitions, at any time to suchpersons in their absolute discretion without convening a general meeting as it would be both costs and time-consumingto organise a general meeting.

144





ANALYSIS OF SHAREHOLDINGS

ANALYSIS BY SIZE OF HOLDINGS AS AT 28/09/2018

NO. OF NO. OF SIZE OF HOLDINGS HOLDERS % SHARES %

1 - 99 325 3.041 5,443 0.000100 - 1,000 1,489 13.936 1,122,451 0.0931,001 - 10,000 4,542 42.512 27,057,726 2.24610,001 - 100,000 3,680 34.444 133,435,008 11.077100,001 - 60,229,498 (*) 645 6.037 281,466,625 23.36660,229,499 AND ABOVE (**) 3 0.028 761,502,731 63.216

TOTAL : 10,684 100.000 1,204,589,984 100.000

REMARK : * - LESS THAN 5% OF ISSUED SHARES ** - 5% AND ABOVE OF ISSUED SHARES

LIST OF TOP 30 HOLDERS AS AT 28/09/2018(WITHOUT AGGREGATING SECURITIES FROM DIFFERENT SECURITIES ACCOUNTS BELONGING TO THE SAMEREGISTERED HOLDER)

No. Name

1 MKN HOLDINGS SDN BHD

2 KASI A/L K L PALANIAPPAN

3 PB TRUSTEE SERVICES BERHAD EMKAY TRUST

4 LEMBAGA TABUNG HAJI

5 UNG YOKE HONG

6 GOH CHOON KIM

7 PUBLIC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR TUNG AH KIONG (E-KLG)

8 CIMSEC NOMINEES (TEMPATAN) SDN BHD CIMB BANK FOR OOI PENG CUAN (PBCL-0G0102)

9 CHANG KENG ONN

10 KHO POH SING

11 CHAN HAI MING

12 HLB NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR KASI A/L K L PALANIAPPAN

13 CITIGROUP NOMINEES (ASING) SDN BHD JP MORGAN SEC LLC FOR THIRD AVENUE REAL ESTATE OPPORTUNITIES FUND LP

Holdings %

479,096,585 39.772 190,844,815 15.843 91,561,331 7.601 31,526,500 2.617 7,333,900 0.608 6,593,100 0.547 6,547,400 0.543

4,000,000 0.332

3,100,000 0.257 2,700,000 0.224 2,365,800 0.196 2,320,000 0.192

2,231,400 0.185

145


Analysis of Shareholdings

No. Name

14 MAYBANK NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR TEH HOCK CHAI

15 RHB NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR SOON TUAN SIN

16 FEDERLITE HOLDINGS SDN BHD

17 YEO EN SENG

18 MAYBANK NOMINEES (TEMPATAN) SDN BHD CHEE HIAN BOON @ CHEE AH DECK

19 DB (MALAYSIA) NOMINEE (ASING) SDN BHD THE BANK OF NEW YORK MELLON FOR ACADIAN EMERGING MARKETS SMALL CAP EQUITY FUND, LLC

20 CITIGROUP NOMINEES (ASING) SDN BHD CBNY FOR EMERGING MARKET CORE EQUITY PORTFOLIO DFA INVESTMENT DIMENSIONS GROUP INC

21 CITIGROUP NOMINEES (ASING) SDN BHD CBNY FOR DFA EMERGING MARKETS SMALL CAP SERIES

22 UOB KAY HIAN NOMINEES (TEMPATAN) SDN BHD EXEMPT AN FOR UOB KAY HIAN PTE LTD ( A/C CLIENTS )

23 CITIGROUP NOMINEES (ASING) SDN BHD CBNY FOR DIMENSIONAL EMERGING MARKETS VALUE FUND

24 SHAMEER SDN BHD

25 HLB NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR MAH SIEW SEONG

26 MAH SIEW SEONG 27 CIMB GROUP NOMINEES (ASING) SDN. BHD. EXEMPT AN FOR DBS BANK LTD (SFS)

28 CHENG CHIN HENG 29 LIM SENG CHEE 30 TEOH KIM HOOI

Holdings %

2,198,000 0.182

2,191,000 0.181

2,061,600 0.171

2,010,000 0.166

1,975,200 0.163

1,947,500 0.161

1,879,200 0.156

1,877,400 0.155

1,835,000 0.152

1,830,500 0.151

1,710,000 0.141

1,700,000 0.141

1,680,000 0.139 1,600,000 0.132

1,589,900 0.131 1,486,000 0.123 1,230,000 0.102

146



Analysis of Shareholdings

147


INFORMATION ON DIRECTORS HOLDINGS AS AT 28/09/2018

Direct no. Direct no. of Shares held of Shares heldNo. Name Holdings % Holdings %

1 HJH FELINA BINTI TAN SRI DATUK (DR) - - - - HJ MUSTAPHA KAMAL

2 LAU SHU CHUAN - - - -

3 HJH JULIANA HEATHER BINTI ISMAIL - - - -

4 ANITA CHEW CHENG IM - - - -

5 DATO’ TAN CHOON HWA @ - - - - ESTHER TAN CHOON HWA

- - - -

INFORMATION ON CHIEF EXECUTIVE WHO IS NOT A DIRECTOR


1. K. MOHANACHANDRAN A/L K.R. KUNJAN - - - -

INFORMATION ON SUBSTANTIAL HOLDERS' HOLDINGS AS AT 28/09/2018


1 MKN HOLDINGS SDN BHD 479,096,585 39.77 - -

2 DATUK KASI A/L K L PALANIAPPAN 193,844,815 16.04 - -

3 TAN SRI DATUK (DR) HJ MUSTAPHA KAMAL 82,405,198 6.84 479,096,585* 39.77 BIN HJ ABU BAKAR

4. PN SRI DATIN HJH WAN NONG BINTI 9,156,133 0.76 479,096,585* 39.77 HJ WAN IBRAHIM

* By virtue of his/her interest in MKN Holdings Sdn Bhd pursuant to Section 8 of the Companies Act 2016.


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I/We (name of shareholder as per NRIC, capital letters) ________________________________________________________

NRIC No. (new) /ID No./Company No ____________________________ NRIC No. (old) ______________________________

of (full address) ________________________________________________________________________________________

being a member(s) of abovenamed Company, hereby appoint ___________________________________________________

(name of proxy as per NRIC, in capital letters) NRIC No. (new) __________________________________________________

NRIC No. (old) ________________________________ or failing him/her __________________________________________

(name of proxy as per NRIC, capital letters) NRIC No. (new) ____________________________________________________

NRIC No. (old) ________________________________________________________________________________________

or failing him/her the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the 39th Annual GeneralMeeting of the Company to be held at Sime Darby Convention Centre of 1A, Jalan Bukit Kiara 1, Bukit Kiara, 60000 Kuala Lumpur,Wilayah Persekutuan Kuala Lumpur on Thursday, 6 December 2018 at 10.00 a.m. and at any adjournment of such meeting.

With reference to the agenda set forth in the Notice of Meeting, please indicate with an “X” in the space provided below howyou wish your votes to be cast on the ordinary resolution specified. If no specific direction as to the voting is given, the Proxywill vote or abstain at his/her discretion.

RESOLUTIONS FOR AGAINST

1. RESOLUTION 1

2. RESOLUTION 2

3. RESOLUTION 3

4. RESOLUTION 4

5. RESOLUTION 5

6. RESOLUTION 6

7. RESOLUTION 7

NOTES:1. For the purpose of determining a member who shall be entitled to attend and vote at the 39th AGM, the Company shall be requesting the Record of Depositors

as at 28 November 2018. Only a depositor whose name appears on the Record of Depositors as at 28 November 2018 shall be entitled to attend and vote atthe said meeting as well as for appointment of proxy(ies) to attend and vote on his/her stead.

2. A member entitled to attend and vote at this meeting is entitled to appoint a proxy/(proxies or attorney) or authorised representative to attend and vote in itsstead. A proxy may but need not be a member of the Company and a proxy appointed to attend, speak and vote at a meeting of a Company shall have thesame rights as the member to speak at the meeting.

3. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one proxy inrespect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

4. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for the multiple beneficial owners in onesecurities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibusaccount it holds.

5. Where a member or the authorised nominee or an exempt authorised nominee appoints two (2) or more proxies, the proportion of the shareholdings to berepresented by each proxy must be specified in the instrument appointing the proxies.

6. The instrument appointing a proxy or the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power orauthority shall be deposited at the registered office of the Company at 19, Jalan PJU 8/5H, Perdana Business Centre, Bandar Damansara Perdana, 47820Petaling Jaya, Selangor Darul Ehsan, not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting at which theperson named in the instrument proposed to vote and in default the instrument of proxy shall not be treated as valid.

7. If the appointer is a corporation, this form shall be executed under its common seal or under the hand of its officer or attorney duly authorised. 8. If this Proxy Form is signed under the hands of an officer duly authorised, it should be accompanied by a statement reading “signed as authorised officer under

Authorisation Document which is still in force, no notice of revocation having been received”. If this Proxy Form is signed under the attorney duly appointedunder a power of attorney, it should be accompanied by a statement reading “signed under Power of Attorney which is still in force, no notice of revocationhaving been received”. A copy of the Authorisation Document or the Power of Attorney, which should be valid in accordance with the laws of the jurisdiction inwhich it was created and is exercised, should be enclosed in the Proxy Form.

FORM OFPROXY

CDS account no. of authorised nominee

Signature of shareholder(s)/Common Seal

Date:

For appointment of two proxies, percentage ofshareholdings to be represented by the proxies:NO OF SHARES PERCENTAGE

Proxy 1 ___________ %

Proxy 2 ___________ % 100%


The Company SecretaryM K LAND HOLDINGS BERHAD (40970 H)

No. 19 Jalan PJU 8/5HPerdana Business CentreBandar Damansara Perdana47820 Petaling JayaSelangor Darul Ehsan

Stamp


PROPERTY SALES OFFFICE`

DAMANSARA PERDANA SALES OFFICE

Damansara Perdana Sales Gallery,No. 1, JalanPJU 8/12,Bandar Damansara Perdana,47820 Petaling Jaya,Selangor Darul Ehsan.t : +603 7733 0303f : +603 7732 6021

RESIDENSI SUASANA @ DAMAISALES GALLERY

Jalan PJU 10/2B,Damansara Damai,47830 Petaling Jaya,Selangor Darul Ehsan.t: +603 6157 1900f: +603 6157 1360

MERU PERDANA SALES OFFICE

No. 39 & 41, Laluan Meru Perdana II,Taman Meru Perdana 2,Jalan Jelapang- chemor,31200 Chemor,Perak Darul Ridzuan.t: +605 525 3077f: +605 525 3307

TAMAN BUNGA RAYA

No. 1 Persiaran Bunga Raya,Taman Bunga Raya,Bukit Beruntung,48300 Rawang Selangor.t: +603 6028 1878f: +603 6028 1857

SEGI OBJEKTIF

Bukit Merah Laketown,Jalan Bukit Merah,34400 Semanggol,Perak Darul Ridzuan.t: +605 890 8080f: +605 890 8083

RESORT SALES OFFICE

MK HOTELS & RESORTS SALESOFFICE

No. 15-1, Jalan PJU 8/5H,Perdana Damansara Business Centre,Bandar Damansara Perdana, 47820Petaling Jaya,Selangor Darul Ehsan.T: +603 7724 1282/ 7724 1317

BUKIT MERAH LAKETOWNRESORT

Jalan Bukit Merah,34400 Semanggol,Perak Darul Ridzuan.t: +605 890 8888f: +605 890 8000

OMBAK VILLA LANGKAWIKUALA MELAKA INN

Lot 78 Jalan Kuala Muda,Padang Matsirat, 07100 Langkawi,Kedah Darul Aman.t: +604 955 8181f: +604 955 8881

EDUCATION

LAKE VIEW COLLEGE

Jalan Bukit Merah,34400 Semanggol,Perak Darul Ridzuan.t: +605 890 8084


Documents

ABOUT US - M K LAND Holdings Berhad · 2018-11-05 · ABOUT US M K Land Holdings Berhad, made its debut on the Main Board of the Kuala Lumpur Stock Exchange (KLSE), now known as Bursa