Post on 13-Jan-2022
GUH Holdings BerhadAnnual Report 2019 1
GUH Holdings BerhadAnnual Report 20192
FOR ITS SHAREHOLDERS• Practisegoodcorporategovernancetoenhancetransparency• Identifycorrectventuresandbusinessdevelopmenttomaximizeshareholders’value• Providegooddividendpayment
FOR ITS EMPLOYEES• Provideaconduciveworkingenvironment• Providepropertraining,developmentandopportunitiesforcareeradvancement• Recognizeandrewardexcellentemployees
FOR ITS SUPPLIERS/VENDORS• Impartialityintheapprovalofsuppliers/vendors• Effectivecommunicationtofacilitatesuppliers’/vendors’timelinessandquality
FOR ITS CUSTOMERS• Respondefficientlytothechangingdemandsofthecustomers• Improveproductqualityandtechnicalinnovationtofulfillcustomers’needsandsatisfactionin
themarketplace
FOR ITS COMMUNITY• Integrateenvironmentalprotectionintoourbusinessandtominimizeenvironmentalimpact• Upholditscorporateresponsibilitiesforthebenefitsofthecommunity
VISION
MISSION
Tobeaprofitableandwell-establishedconglomeratethatmaximizestheinterestforits
andtoachievesustainabilitythroughoutthesupplychain
SHAREHOLDERS EMPLOYEES CUSTOMERS COMMUNITYSUPPLIERS/VENDORS
GUH Holdings BerhadAnnual Report 2019 1
2 CorporateProfile
3 CorporateInformation
4 ProfileofDirectors
10 ProfileofManagementTeam
12 ExecutiveChairman’sStatement
14 Management’sDiscussionandAnalysis
23 CorporateStructure
24 FinancialHighlights
26 SustainabilityStatement
34 CorporateGovernanceOverviewStatement
45 AdditionalDisclosure
46 StatementonRiskManagementand InternalControl
49 AuditCommitteeReport
53 FinancialStatements
122 AnalysisofShareholdings
125 ListofProperties
126 NoticeofAnnualGeneralMeeting
131 StatementAccompanyingNoticeof AnnualGeneralMeeting
• ProxyForm
CONTENTS
GUH Holdings BerhadAnnual Report 20192
CORPORATE PROFILE
GUHHoldingsBerhadisaMalaysian-basedcorporation
withkeybusinessesin
electronic,propertydevelopmentandutilities
Asaproudandhome-growncompany
withdiversifiedportfolio,
GUHiscommittedtobuilding
asustainablefutureandbringingpositivebenefits
toallitsstakeholders
www.guh.com.my
CORPORATE
GUH Holdings BerhadAnnual Report 2019 3
CORPORATEINFORMATION
TanSriDato’SeriH’ngBokSanExecutive Chairman
DatukSeriKennethH’ngBakTeeChief Executive Officer/Group Managing Director
Dato’HarryH’ngBakSeahNon-Executive Director
DatinJessicaH’ngHsiehLingNon-Executive Director
Mr.ChewHockLinIndependent Non-Executive Director
Dato’IsmailBinHamzahIndependent Non-Executive Director
Dato’LaiChangHunIndependent Non-Executive Director
En.WIsmailBinWNikIndependent Non-Executive Director
Dato’Dr.GanKongMengIndependent Non-Executive Director
Board of Directors
Company Secretaries
DatukSeriKennethH’ngBakTee(LS0008988)(SSMPCNo.:201908001173)KeeGimTee(MAICSA7014866)(SSMPCNo.:201908002255)
Share Registrar
MegaCorporateServicesSdn.Bhd.(198901010682(187984-H))Level15-2BangunanFaberImperialCourtJalanSultanIsmail50250KualaLumpurTel: 03-26924271Fax: 03-27325388Website: www.megacorp.com.my
Registered Office
PartofPlot1240&1241BayanLepasFreeIndustrialZonePhase3,BayanLepas,11900PenangTel: 04-6166333Fax: 04-6166366Website: www.guh.com.my
Independent Auditors
CroweMalaysiaPLT(201906000005(LLP0018817-LCA)&AF1018)CharteredAccountantsLevel6,WismaPenangGarden42JalanSultanAhmadShah10050PenangTel: 04-2277061Fax: 04-2278011Website: www.crowe.my
Principal Bankers
UnitedOverseasBank(Malaysia)BhdCIMBBankBerhadMalayanBankingBerhadPublicBankBerhad
Stock Exchange Listing
ListedontheMainMarketofBursaMalaysiaSecuritiesBerhadunderIndustrialProductsSector
StockCode:3247StockName:GUH
GUH Holdings BerhadAnnual Report 2019 3
GUH Holdings BerhadAnnual Report 20194
PROFILEOFDIRECTORS
TanSriDato’SeriH’ngBokSanisthefounderofGUHCircuitIndustry(PG)Sdn.Bhd.,theExecutiveChairmanofGUH
HoldingsBerhad(“GUH”)GroupandasubstantialshareholderofGUH.HewasappointedtotheBoardofGUHon6
January1994.TanSriDato’SeriH’ngalsositsontheBoardofSarawakCableBerhad,apubliclistedcompany.He
holdsdirectorshipsinseveralotherprivatelimitedcompanies.
Anexperiencedandwell-knownentrepreneurwhocompletedhighschoolexaminationintheearlyyearswithaCertificate
inBusinessAdministrationandAccountingobtainedinSingapore,TanSriDato’SeriH’ngbeganhiscareerinvarious
fieldsfrommarketingmanagement,businessadministrationtothesettingupofbusinessesandmanufacturing.Tan
SriDato’SeriH’ngfoundedLeaderCableIndustryBerhadbackin1976andimplementedarestructuringandmerger
exercisebetweenLeaderCableIndustryBerhadandUniversalCable(M)BerhadandestablishedLeaderUniversal
HoldingsBerhadastheholdingcompany,whichwasformerlylistedonBursaMalaysiaSecuritiesBerhad.Throughout
hiscareer,TanSriDato’SeriH’nghasbeenverymuchinvolvedinthebusinessentrepreneurshipandhehasgained
extensiveoperationalexperienceinthemanufacturingaswellasthecorporaterestructuringandmergerexerciseand
manyotherfieldsandindustrysectors.Hehasaccumulatedin-depthknowledgeandrecognitionovertheyears.
TanSriDato’SeriH’ng’sdaughter,DatinJessicaH’ngHsiehLingandhistwobrothers,Dato’HarryH’ngBakSeahand
DatukSeriKennethH’ngBakTeearealsotheDirectorsofGUH.TanSriDato’SeriH’ngisdeemedtohaveaninterest
pertainingtotheproposedrenewalofshareholders’mandateforrecurrentrelatedpartytransactionsofarevenueor
tradingnaturewhichwillbetabledattheforthcoming56thAnnualGeneralMeeting.Heisalsodeemedtobeinterested
incertainrecurrentrelatedpartytransactionsortradingnaturewhicharenecessaryfortheday-to-dayoperationsofthe
Companyanditssubsidiariesasdisclosedonpage115oftheAnnualReport.
Saveasaforesaiddisclosed,therearenootherbusinessarrangementswiththeCompanyinwhichhehaspersonal
interests.
TanSriDato’SeriH’ngattendedallofthe4Boardmeetingswhichwereheldinthefinancialyearended31December
2019.
Tan Sri Dato’ Seri H’ng Bok San, JP
PSM, DPPN, DGPN, DSPN, PKT, PJK
ExecutiveChairman
80yearsold,Malaysian
GUH Holdings BerhadAnnual Report 2019 5
PROFILEOFDIRECTORS
Datuk Seri Kenneth H’ng Bak Tee
DGSM, DPNS, DSPN, PKT, PJM
ChiefExecutiveOfficer/GroupManagingDirector
60yearsold,Malaysian
DatukSeriKennethH’ngBakTeehasbeenappointedtotheBoardastheChiefExecutiveOfficer/GroupManaging
DirectorofGUHsince1September2004.HealsoservesastheDirectorofallsubsidiariesoftheGroupandseveral
otherprivatelimitedcompanies.HeisaBoardmemberofStraitsInternationalEducationGroupSdn.Bhd.
HestartedhiscareerwithInternationalBusinessMachines(IBM)inKualaLumpurandIBMinAsiaSouthPacificArea
(ASPA)HQinHongKong.HewasalsowithLeaderUniversalHoldingsBerhad(“Leader”)for16years.
DatukSeriKennethgraduatedwithaBachelorofMathematics(DoubleHonours)inComputersScienceandCombinatoric
&OptimizationandalsoholdsaMasterofAppliedScience(ManagementScience)inUniversityofWaterloo,Canada.
HeiscurrentlyaFellowMemberoftheInstituteofApprovedCompanySecretaries,anAffiliateMemberoftheMalaysian
InstituteofCharteredSecretariesandAdministratorsandaMemberoftheRegisteredFinancialPlanner.
DatukSeriKennethisthebrotheroftheGroup’sExecutiveChairman,TanSriDato’SeriH’ngBokSanandtheNon-
ExecutiveDirector,Dato’HarryH’ngBakSeah.Hisniece,DatinJessicaH’ngHsiehLingisalsoaNon-ExecutiveDirector
ofGUH.DatukSeriKennethisdeemedtohaveaninterestpertainingtotheproposedrenewalofshareholders’mandate
forrecurrentrelatedpartytransactionsofarevenueortradingnaturewhichwillbetabledattheforthcoming56thAnnual
GeneralMeeting.Heisalsodeemedtobeinterestedincertainrecurrentrelatedpartytransactionsortradingnature
whicharenecessaryfortheday-to-dayoperationsoftheCompanyanditssubsidiariesasdisclosedonpage115ofthe
AnnualReport.
Saveasaforesaiddisclosed,therearenootherbusinessarrangementswiththeCompanyinwhichhehaspersonal
interests.
DatukSeriKennethattendedallofthe4Boardmeetingswhichwereheldinthefinancialyearended31December
2019.
GUH Holdings BerhadAnnual Report 20196
PROFILEOFDIRECTORS
DatinJessicaH’ngHsiehLingwasappointedtotheBoardasaNon-ExecutiveDirectoron20February2001.SheisamemberoftheRiskManagement&SustainabilityCommitteeandtheRemunerationCommitteeappointedbytheBoard.Sheholdsdirectorshipsinseveralotherprivatelimitedcompanies.
DatinJessicagraduatedfromSouthernIllinoisUniversityatCarbondale,USAwithaBachelorofScienceDegree,majoringinAccountingandshealsoobtainedaMasterofScienceDegree,majoringinTaxationfromDrexelUniversity,Philadelphia,USA.Uponcompletinghertertiaryeducation,DatinJessicastartedhercareerbyholdingvariousmajorkeypositionsinmultinationalcompaniesandgainedextensiveknowledgeandexperienceincorporatefinanceandbusinessmanagementpriortojoiningLeaderUniversalHoldingsBerhad.
DatinJessicaisthedaughteroftheGroup’sExecutiveChairman,TanSriDato’SeriH’ngBokSan.Bothheruncles,Dato’HarryistheNon-ExecutiveDirectorandDatukSeriKennethistheChiefExecutiveOfficer/GroupManagingDirectorofGUH.DatinJessicaisdeemedtohaveaninterestpertainingtotheproposedrenewalofshareholders’mandateforrecurrentrelatedpartytransactionsofarevenueortradingnaturewhichwillbetabledattheforthcoming56thAnnualGeneralMeeting.Sheisalsodeemedtobeinterestedincertainrecurrentrelatedpartytransactionsortradingnaturewhicharenecessaryfortheday-to-dayoperationsoftheCompanyanditssubsidiariesasdisclosedonpage115oftheAnnualReport.
Saveasaforesaiddisclosed,therearenootherbusinessarrangementswiththeCompanyinwhichshehaspersonalinterests.
DatinJessicaattendedallofthe4Boardmeetingswhichwereheldinthefinancialyearended31December2019.
Datin Jessica H’ng Hsieh LingNon-ExecutiveDirector54yearsold,Malaysian
Dato’ Harry H’ng Bak SeahDSPN, PJK
Non-ExecutiveDirector70yearsold,Malaysian
Dato’HarryH’ngBakSeahwasappointedtotheBoardasaNon-ExecutiveDirectorofGUHon13January1994.Healsoholdsdirectorshipsinseveralotherlocalandoverseasprivatelimitedcompanies.
Uponcompletinghishighschooleducation,hebeganhiscareerintheoperationsandmanufacturingofpewterandmagnetwire.Subsequently,heventuredintothetelecommunicationsandpowercablebusiness.HehasheldvariouspositionsfromtheGroupManagingDirectorofLeaderUniversalHoldingsBerhadsince1993untiltheappointmentastheExecutiveViceChairmanfrom1997to2005.Throughouthiscareer,Dato’Harrygainedextensiveexperiencewhichenhancedhisknowledgeinthemanufacturingoperationsanddiversifiedbusinessenvironmentovertheyears.
Dato’HarryisthebrotheroftheGroup’sExecutiveChairman,TanSriDato’SeriH’ngBokSanandtheChiefExecutiveOfficer/GroupManagingDirector,DatukSeriKennethH’ngBakTee.Hisniece,DatinJessicaH’ngHsiehLingisalsoaNon-ExecutiveDirectorofGUH.Dato’Harry isdeemedtohaveaninterestpertainingtotheproposedrenewalofshareholders’mandateforrecurrentrelatedpartytransactionsofarevenueortradingnaturewhichwillbetabledattheforthcoming56thAnnualGeneralMeeting.Heisalsodeemedtobeinterestedincertainrecurrentrelatedpartytransactionsortradingnaturewhicharenecessaryfortheday-to-dayoperationsoftheCompanyanditssubsidiariesasdisclosedonpage115oftheAnnualReport.
Saveasaforesaiddisclosed,therearenootherbusinessarrangementswiththeCompanyinwhichhehaspersonalinterests.
Dato’Harryattendedallofthe4Boardmeetingswhichwereheldinthefinancialyearended31December2019.
GUH Holdings BerhadAnnual Report 2019 7
PROFILEOFDIRECTORS
Dato’IsmailBinHamzahwasappointedtotheBoardasanIndependentNon-ExecutiveDirectoron19December2001.HeservesasChairmanoftheNominationCommitteeandtheRemunerationCommitteeoftheBoard.HeisalsoamemberoftheAuditCommitteeandtheRiskManagement&SustainabilityCommittee.Dato’IsmailsitsontheBoardsofafewpubliclistedcompanies,namelySCCHoldingsBerhad,JKGLandBerhadandJasaKitaBerhad.ApartfromservingasaDirectorofpubliclistedcompanies,Dato’IsmailalsoservesasaDirectorofseveralotherprivatelimitedcompanies.
Dato’IsmailgraduatedfromtheUniversityofMalayain1970withaBachelorofEconomics(Hons)inAnalyticalEconomics.Uponcompletinghistertiaryeducation,hestartedhiscareerbyholdingmanykeypositionsinthegovernmentalagenciesandorganizations.Hegainedextensiveknowledgeandexperiencefromeconomicstofinanceacquired,throughouthiscareerandtenureofserviceinthegovernmentalauthoritiesformorethan30years.SittingontheBoardofafewpubliclistedcompanies,Dato’IsmailisveryexperiencedandcapabletoprovideindependentandobjectivejudgmenttotheBoardandheisabletoattendalltheBoardmeetingswithsufficienttimedevotedtoreadingandformulatingsolutionstoissuespresentedattheBoardmeeting.
Saveasaforesaiddisclosed,Dato’IsmaildoesnothaveanyfamilyrelationshipwithandisnotrelatedwithanyDirectorand/ormajorshareholderofGUHnorhasanypersonalinterestinanybusinessarrangementinvolvingtheCompany.
Dato’Ismailattendedallofthe4Boardmeetingswhichwereheldinthefinancialyearended31December2019.
Mr. Chew Hock LinIndependentNon-ExecutiveDirector76yearsold,Malaysian
Mr.ChewHockLinwasappointedtotheBoardasanIndependentNon-ExecutiveDirectorofGUHon20February2001.HeservesasChairmanofAuditCommitteeandtheRiskManagement&SustainabilityCommittee.HeisalsoamemberoftheNominationCommitteeandtheRemunerationCommitteeoftheBoard.HehasbeenappointedastheSeniorIndependentDirectorofGUHtowhomallconcernsmaybeconveyed.Mr.ChewalsositsontheBoardofMasterPackGroupBerhad,apubliclistedcompany.
Mr.ChewgraduatedwithaBachelorofCommerceDegreefromtheUniversityofWesternAustralia.HeisamemberoftheMalaysianInstituteofCertifiedPublicAccountantsandamemberoftheMalaysianInstituteofAccountants.HeisalsoaFellowofCharteredTaxInstituteofMalaysia.Mr.Chewisaformerpartnerofaninternationalauditfirm.Hehasmorethan40yearsofworkingexperienceinvariousareascoveringauditing,accounting,financeandtax.Hegainedextensiveexperienceandknowledgeduringhis tenureasapartnerand longyearsofservice in theaccountancyprofession.BasedonhisexperiencesittingontheBoardofafewpubliclistedcompanies,Mr.ChewisabletoplayhisroleinformulatingandreviewingtheCompany’sstrategiesandtostrikeabalanceandmaketheBoardmoreeffectiveandbeaccountabletoshareholders.
Saveasaforesaiddisclosed,Mr.ChewdoesnothaveanyfamilyrelationshipwithandisnotrelatedwithanyDirectorand/ormajorshareholderofGUHnorhasanypersonalinterestinanybusinessarrangementinvolvingtheCompany.
Mr.Chewattendedallofthe4Boardmeetingswhichwereheldinthefinancialyearended31December2019.
Dato’ Ismail Bin HamzahAMN, KMN, DIMP
IndependentNon-ExecutiveDirector73yearsold,Malaysian
GUH Holdings BerhadAnnual Report 20198
PROFILEOFDIRECTORS
En. W Ismail Bin W Nik
IndependentNon-ExecutiveDirector
73yearsold,Malaysian
En.WIsmailBinWNikhasbeenappointedtotheBoardsince26January1994.En.WIsmailisalsoadirectorof
severalotherprivatelimitedcompanies.
En.WIsmailgraduatedfromtheUniversityofMalayain1971withaBachelorofEconomicsDegree.Healsocompleted
theexaminationsoftheInstituteofCharteredSecretariesandAdministrators,UnitedKingdomin1970andtheSecurities
InstituteofAustraliain1972.Throughouthiscareerwhichis involvedinvariousindustries,hehasgainedextensive
knowledgeanddiversifiedbusinessexperience includingcommercialbanking, investment,propertydevelopment,
manufacturingandtrading.HepreviouslyservedasaDirectorinafewpubliclistedcompaniesandheisknowledgeable,
competentandabletogive independent judgment totheBoardandtofacilitateamorefair,balancedandeffective
governanceoftheBoardandtheCompany.
Saveasaforesaiddisclosed,En.WIsmaildoesnothaveanyfamilyrelationshipwithandisnotrelatedwithanyDirector
and/ormajorshareholderofGUHnorhasanypersonalinterestinanybusinessarrangementinvolvingtheCompany.
En.WIsmailattendedallofthe4Boardmeetingswhichwereheldinthefinancialyearended31December2019.
Dato’ Lai Chang Hun
DSPN, DJN, PKT
IndependentNon-ExecutiveDirector
82yearsold,Malaysian
Dato’LaiChangHunhasbeenappointedtotheBoardsince13January1994.Dato’LaiisamemberoftheNomination
CommitteeappointedbytheBoard.Healsoholdsdirectorshipsofseveralotherprivatelimitedcompanies.
Dato’LaiwastheChairmanofPenangElectricalMerchantAssociationandheispresentlyholdingthepositionasone
oftheTrusteesintheAssociation.HeispresentlyaDirectorofHanChiangHighSchoolandUniversity/Collegeandalso
holdingthepositionasaDirectorinanumberofsocialsocieties.Dato’Laicompletedhishighschooleducationand
obtainedadiplomaintheelectricalandelectronicintheearlyyear.Hestartedhiscareerintheelectricalengineering
business.Over theyears,hehasgainedextensiveknowledgeandbusinessexperience in themanufacturingand
marketingofelectronicsandelectricalproductsandappliances.Apartfromthat,hehadbeenservingontheBoardof
otherpubliclistedcompanyandisknowledgeable,competentandabletogiveobjectivejudgmenttotheBoardandto
facilitateamorefair,balancedandeffectivegovernanceoftheBoardandtheCompany.
Saveasaforesaiddisclosed,Dato’LaidoesnothaveanyfamilyrelationshipwithandisnotrelatedwithanyDirectorand/
ormajorshareholderofGUHnorhasanypersonalinterestinanybusinessarrangementinvolvingtheCompany.
Dato’Laiattendedallofthe4Boardmeetingswhichwereheldinthefinancialyearended31December2019.
GUH Holdings BerhadAnnual Report 2019 9
PROFILEOFDIRECTORS
Dato’ Dr. Gan Kong Meng
DSDK, PSPP, SDK, DJN, BCN, SMP, AMK, KMN, PPA, PhD
IndependentNon-ExecutiveDirector
65yearsold,Malaysian
Dato’Dr.GanKongMengwasappointedasanIndependentNon-ExecutiveDirectoron1June2015.Heisamember
oftheAuditCommitteeappointedbytheBoard.HewaspreviouslytheSeniorVicePresidentforcorporateintegrity/
surveillance&securityandChairmanforcreditreviewandriskassessment/investorrelationsofaprivatelimitedcompany
until15March2020.Keyresponsibilitiesincludeimplementinginternalcontrols,workingwithrelevantauthoritiesand
adopting importantrulessuchasthoserelatingtobusinessrelationsandthoserelatingtothepreventionofmoney
launderingandterroristfinancing.
Dato’Dr.GangraduatedfromtheUniversityScienceMalaysiawithaBachelorofScienceDegreeinPhysics&Mathematics,
aMasterofSocialScienceDegreeinAnthropology/SociologyandhealsoobtainedaPhDinDrugResearch.
Dato’Dr.GanservedintheRoyalMalaysiaPoliceformorethan30overyearsbeforeretiringinearlyJanuary2015.
HewastheOCPDofGeorgetown,Penang,OCCIofKualaLumpurCityandhealsoheldvariouspositionsinspecial
branch,managementaswellaspublicorder.Dato’Dr.Gan’svastexperiencewillbenefittheGroupinreinforcingthe
securityandriskmanagementissues.
Saveasaforesaiddisclosed,Dato’Dr.GandoesnothaveanyfamilyrelationshipwithandisnotrelatedwithanyDirector
and/ormajorshareholderofGUHnorhasanypersonalinterestinanybusinessarrangementinvolvingtheCompany.
Dato’Dr.Ganattended3outofthe4Boardmeetingswhichwereheldinthefinancialyearended31December2019.
NoneoftheDirectorsofGUHhavecommittedanyoffenceswithinthepast5yearsotherthantrafficoffencesnorbeen
imposedwithpublicsanctionorpenaltybytherelevantbodiesduringthefinancialyear.
GUH Holdings BerhadAnnual Report 201910
MR. LEWIS H’NG CHUN LIChief Operating Officer – Corporate OfficeAged 32, Malaysian
Qualifications:• BachelorDegreeinEconomics,MonashUniversity,Australia
Working experiences:• Gainedextensiveknowledgeandexperience inbusinessmanagement fromCitigroupandKiyamasGroupofCompanies
• 2yearsworkingexperienceasDeputyGeneralManagerinGUHCircuitIndustry(Suzhou)Co.Ltd.• PersonalAssistanttoCEO/GroupManagingDirectorofGUHHoldingsBerhad• GeneralManagerofCorporateDivisionofGUHHoldingsBerhad• ChiefOperatingOfficerofCorporateDivisionofGUHHoldingsBerhad
Appointment to the current position:• 1October2017
Mr.LewisH’ngChunLiisthesonofDatukSeriKennethH’ngBakTee,CEO/GroupManagingDirector.HeisalsothenephewofTanSriDato’SeriH’ngBokSanandDato’HarryH’ngBakSeahandthecousinofDatinJessicaH’ngHsiehLing.
Mr.LewisH’ngsitsontheboardofmajorityofsubsidiariesofGUH.Heisdeemedtohaveaninterestpertainingtotheproposedrenewalofshareholders’mandateforrecurrentrelatedpartytransactionsofarevenueortradingnaturewhichwillbetabledattheforthcoming56thAnnualGeneralMeeting.
MS. YEOH SAW GAIKGeneral Manager – Corporate OfficeAged 50, Malaysian
Qualifications:• BachelorDegreeinAccounting,UniversityofMalaya• CharteredAccountantwithTheMalaysianInstituteofCertifiedPublicAccountants• MemberofMalaysianInstituteofAccountants
Working experiences:• More than22yearsofexperience in the fieldofaccounting, costing, taxation, finance,auditingand riskmanagement
• BeganhercareerwithArthurAndersen&Co
Appointment to the current position:• 1October2017
DR. BRIAN KOK SIEW FOONGGeneral Manager – Electronic Division Aged 63, Malaysian
Qualifications:• DiplomainElectronicsEngineering,ICSSchools,UK• MasterinBusinessAdministration• DoctorateofPhilosophyinBusinessAdministration,BulacanStateUniversityofPhilippines• MemberofTheInstitutionofEngineeringandTechnologyUK(MIET)
Working experiences:• TestEquipmentEngineerwithSanyoElectric• SeniorDesignEngineer/R&DProjectManagerwithGrundigR&D• ProductionManagerwithAsianDriveshaft• ApplicationEngineering&CommercialManagerwithGKNDriveline• PersonalAssistanttoGroupExecutiveDirectorwithGUHElectricalAppliancesSdn.Bhd.• PersonalAssistanttoGeneralManagerwithGUHCircuitIndustry(PG)Sdn.Bhd.• GeneralManagerofGUHCircuitIndustry(PG)Sdn.Bhd.
Appointment to the current position:• 8January2014
PROFILEOFMANAGEMENTTEAM
GUH Holdings BerhadAnnual Report 2019 11
Additional notes on the above Management Team
Saveasaforesaiddisclosed,noneoftheManagementTeamhas:
1. Directorshipinpubliccompaniesandlistedissuers;2. Familyrelationshipwithanydirectoror/andmajorshareholderoftheCompany;3. ConflictofinterestswiththeCompany;and4. Committedanyoffenceswithinthepast5yearsotherthantrafficoffencesnorbeenimposedwithpublicsanction
orpenaltybytherelevantregulatorybodiesduringthefinancialyear.
MR. LIM CHIN WANGSenior General Manager – Utilities DivisionAged 41, Malaysian
Qualifications:• BachelorDegreeinChemicalEngineering,UniversityofTechnologyMalaysia• RegisteredEngineerofBoardofEngineerMalaysia
Working experiences:• Morethan18yearsofexperienceinplanningandimplementationoflargescalewaterandwastewaterprojects,havingworkedinamongothers,Biwater,HyfluxandMMC
• Identificationandacquisitionofwaterandwastewatertreatmentplants
Appointment to the current position:• 1January2018
MR. SUNNY LIM HIONG CHAIDeputy General Manager – Properties DivisionAged 58, Malaysian
Qualifications:• BachelorofEngineering(Civil),UniversityofTasmania,Australia
Working experiences:• Morethan32yearsofexperienceandknowledgeinthebuildingconstructionandpropertydevelopmentindustry
Appointment to the current position:• 1January2018
MR. LEOW CHEE JIANDeputy General Manager – Properties DivisionAged 54, Malaysian
Qualifications:• CertificateinArchitecture• DiplomainCivilandStructureEngineering
Working experiences:• Morethan30yearsofexperienceinconstructionandpropertydevelopmentinclusiveofdesign,planning,implementation,marketingandsaleadministration
Appointment to the current position:• 1January2018
PROFILEOFMANAGEMENTTEAM
GUH Holdings BerhadAnnual Report 201912 GUH Holdings BerhadAnnual Report 201912
EXECUTIVECHAIRMAN’SSTATEMENT
OnbehalftheBoardofDirectorsofGUHHoldingsBerhad(“GUH”or“theCompany”),IampleasedtopresenttheAnnual
ReportandAuditedFinancialStatementsoftheCompanyandtheGroupforthefinancialyearended31December
2019.
Performance Overview
Forfinancialyearended31December2019,therevenue
for GUH Group was RM336.0 million, RM13.1 million
lowerthantherevenueforyear2018ofRM349.1million.
Nevertheless,theGrouprecordedaprofitbeforetaxof
RM7.1million,RM6.3millionhigherthantheprofitbefore
taxofRM0.8millionfortheprecedingyear.Theincrease
inprofitbeforetaxmainlyattributabletothehigherprofit
before tax of RM13.3 million recorded by Electronic
Division foryear2019comparedto theprecedingyear
mainly boosted by improved contribution from GUH
Circuit Industry (PG)Sdn.Bhd.butpartlyoffsetby the
shortfallfromGUHCircuitIndustry(Suzhou)Co.,Ltd.and
GUHInternational(HK)PrivateLimitedrespectively.
Significant Event
Furthertotheincorporationofanewsubsidiarycompany
inYancheng,ProvinceofJiangsu,People’sRepublicof
China, known asGUHElectronic (Yancheng) Co. Ltd.
(“GUHYancheng”)whichwaspartoftheGroup’sbusiness
plantofurtherexpanditsinvestmentinthemanufacturing
andsaleofprintedcircuitboards,theBoardofDirectors
(“the Board”), after due consideration announced that
theGroup did not pursuewith the investment inGUH
YanchengandhadstruckoffthecompanyinMarch2020.
ThedecisiontoaborttheinvestmentinGUHYancheng
wasmadefollowingabusinessreviewamidstthecurrent
subduedeconomicoutlook,uncertainmarketconditions
and recent changes in the business environment in
China.
Thedecisionwillnothaveanydirectimpactonanyofits
operationsandneitheranymaterialeffectonthegearing,
earningper shareandnetassetsof theGroup for the
financialyearending31December2020.
Sustainability of Business
TheBoardofGUHacknowledgesthatmaintainingagood
businessisnotonlyaboutachievingthedesiredfinancial
bottom line but also being ethical and sustainable.
Therefore, GUH Group will continue to embrace
sustainability in carrying out its business conduct and
operationswithparticularemphasisonsafeguardingthe
environmentandcontributingtosociety.
More information on GUH’s initiatives is disclosed in
the Sustainability Statement of the Company’sAnnual
Report2019.
Corporate Governance
In line with the Main Market Listing Requirements of
Bursa Malaysia Securities Berhad and the Malaysian
Code on Corporate Governance, the Board firmly
believes that good governance enables the Group to
holdthetrustofitsstakeholders.TheBoardistherefore
alwaysmindfulof itsdutiesandwillcontinue touphold
andfosterastrongcultureoncorporategovernanceas
theBoardbelievesthatistheplatformtosafeguardthe
bestinterestoftheCompanyanditsshareholderswhile
ensuringthattheinterestsofotherstakeholdersarenot
compromised.
More information in relation to corporate governance
can be found in the Corporate Governance Overview
StatementoftheCompany’sAnnualReport2019.
GUH Holdings BerhadAnnual Report 2019 13GUH Holdings BerhadAnnual Report 2019 13
EXECUTIVECHAIRMAN’SSTATEMENT
Dividend
The Company has consistently paid dividends while
allocating funds for business growth and investment.
The Board had resolved to declare a distribution of
1 treasury share for every 80 existing ordinary shares
held(sharedividend) to itsshareholderswitha totalof
3,427,207treasurysharesbeingdistributedandcredited
into the Depositors’ SecuritiesAccounts to all entitled
shareholderson16January2019.
Related Party Transactions
The related party transactions of the Group are
disclosed in Note 32 of the Notes to the Financial
Statementswhichalsosetouttherecurrentrelatedparty
transactions conducted during the year in accordance
with the mandate obtained from the shareholders at
GUH’sAnnualGeneralMeetingheldon23May2019.
Exceptasaforesaiddisclosed,thereisnoothermaterial
contractinvolvingtheinterestoftheDirectorsandmajor
shareholdersduringtheyear.
Outlook and Prospects
Businesses globally are facing the world’s largest
economiccrisis inhistoryasmost industriesarebeing
shattered following the outbreak of COVID-19 which
has been declared and characterized by the World
HealthOrganisation(WHO)asapandemic.This isnot
justapublichealthcrisis, it isacrisisthateverysector
andeach individualmustbe involved toovercome this
troubledtimes.
ThisisfurtheraggravatedbytheMalaysianGovernment’s
implementationoftheMovementControlOrder(“MCO”)
effective 18 March 2020 with further extension until 9
June2020throughoutMalaysiaasapreventivemeasure
towards the COVID-19 pandemic. At the time of this
reporting, MCO applies to closure of all government
andprivatepremisesexceptthoseinvolvedinessential
serviceswithgradualeasingforotherbusinesses.
Despite the continuous volatile challenges and
uncertainties in market condition forecast for the year
2020,GUHGroupwillstrivethroughtheadversesituation
byadoptingacautiousapproach.TheElectronicDivision
anticipatesastabledemandforprintedcircuitboardsin
thenearfuturewhereasthePropertiesDivisionforesees
soft property market conditions and weak consumer
sentimenttocontinueinyear2020.TheUtilitiesDivision
expects market environment to remain tough in year
2020amidststiffcompetitiononopenmarkettendering.
Overall, the Group foresees a challenging operating
environmentintheyearahead.
Appreciation
TheBoard and I would like to take this opportunity to
express our sincere thanks and appreciation to the
Management and staff for their continuous valuable
contribution,loyaltyanddedicationtotheGroup.Wealso
wishtorecordourheartfeltgratitudetoourshareholders,
customers, partners, bankers, business associates
and all the respected government authorities for their
invaluablesupportandassistance,continuoustrustand
understandingduringtheyear.
Tan Sri Dato’ Seri H’ng Bok San, JPPSM, DPPN, DGPN, DSPN, PKT, PJK
ExecutiveChairman
GUH Holdings BerhadAnnual Report 201914 GUH Holdings BerhadAnnual Report 201914
MANAGEMENT’SDISCUSSIONANDANALYSIS
Forthefinancialyearended31December2019,GUHGrouprecordedalowerrevenueofRM336.0millioncompared
toRM349.1millionforyear2018.
ThedecreaseinrevenuewasmainlyduetothedropfromUtilitiesDivisiontoRM16.4millionor4.9%ofGrouprevenue
(year2018:RM29.0millionor8.3%)inlinewithslowerconstructionprogressforwaterprojects.
PropertiesDivisiongeneratedalowerrevenueofRM21.9millionor6.5%ofGrouprevenue(year2018:RM26.7million
or7.6%)intandemwiththedropinsaleofresidentialpropertyunits.
Inaddition, theElectricalandPlantationDivisionsrevenuehaddroppedslightly toRM5.5millionandRM0.8million
or 1.6% or 0.3% of Group revenue respectively (year 2018: RM7.6 million and RM1.3 million or 2.2% and 0.4%
respectively).
Onapositivenote,ElectronicDivisionimproveditscontributiontoRM289.6millionor86.2%ofGrouprevenue(year
2018:RM284.0millionor81.4%)whilst InvestmentDivisionachievedahigherrevenueofRM1.8millionor0.5%of
Grouprevenue(year2018:RM0.5millionor0.1%).
Waterandwastewatertreatment
Unallocatednon-operatingsegmentsCultivationofoilpalm
SaleofelectricalappliancesManufactureofprintedcircuitboards
Propertydevelopment
GUH GROUP REVENUE BY SEGMENT
2018
81.4%
0.1%
0.5%8.3%
0.4%
2.2% 7.6%
2019
4.9%0.3%
1.6% 6.5%
86.2%
GUH Holdings BerhadAnnual Report 2019 15GUH Holdings BerhadAnnual Report 2019 15
MANAGEMENT’SDISCUSSIONANDANALYSIS
Despitethechallengingmarketconditions,GUHGroupmanagedtoregisterahigherprofitbeforetaxofRM7.1million
foryear2019comparedtoprofitbeforetaxofRM0.8millionforyear2018.The increase inprofitbeforetaxmainly
attributabletothehigherprofitbeforetaxofRM13.3millionrecordedbytheElectronicDivisionforyear2019compared
toprofitbeforetaxofRM8.4millionforyear2018mainlyboostedbyimprovedperformancefromMalaysianoperation
onhigherrevenue,favourablesalesmixandforeignexchange.
UtilitiesDivisionrecordedaprofitbeforetaxofRM0.3millionforyear2019incontrasttoalossbeforetaxofRM2.2
millionforyear2018mainlyduetoreversalofliquidatedascertaineddamagesonwaterprojects,higherinterestincome
andloweradministrativeexpenses.
PropertiesDivisiongeneratedaprofitbeforetaxofRM1.9millionforyear2019incontrasttoalossbeforetaxofRM0.4
millionforyear2018mainlyduetohighersaleofcommercialpropertyunits,liquidatedascertaineddamagesclaimfrom
contractorandlowerfinancecosts.
PlantationDivisionincurredalossbeforetaxofRM1.1millionforyear2019incontrasttoaprofitbeforetaxofRM0.2
million foryear2018mainlydue to loweroutputof fresh fruitbunchesandCPOprices,higher rentalexpenseand
unfavourablefairvaluechangesinbiologicalassets.ElectricalDivision’slossbeforetaxofRM0.1millionforyear2019
wasincontrasttoaprofitbeforetaxofRM0.1millionforyear2018mainlyduetounfavourablesalesmix.
Theshareofassociates’losshadincreasedtoRM1.4millionforyear2019comparedtoRM0.1millionforyear2018
mainlydue tohigher financecosts,administrativeand taxexpenses. Inaddition, InvestmentDivisionhadwidened
the loss before tax toRM5.8million for year 2019 compared toRM5.2million for year 2018mainly due to higher
administrativeexpenses.
Waterandwastewatertreatment
Unallocatednon-operatingsegmentsCultivationofoilpalm
SaleofelectricalappliancesManufactureofprintedcircuitboards
Propertydevelopment
GUH GROUP PROFIT/(LOSS) BEFORE TAX BY SEGMENT
20182019
SegmentsSegments
(RM’000)
(RM’000)
15,000
10,000
-10,000
-5,000
5,000
0
8,370
(449)
76 214
(2,157)
(5,257)
15,000
10,000
-10,000
-5,000
5,000
0
13,349
1,859283
(129)(1,075)
(7,191)
GUH Holdings BerhadAnnual Report 201916 GUH Holdings BerhadAnnual Report 201916
MANAGEMENT’SDISCUSSIONANDANALYSIS
ELECTRONIC DIVISIONManufacturing of Printed Circuit Boards (PCBs)
GUH Circuit Industry (PG) Sdn. Bhd. (GUH PG)
Thebeginningof2010sawthePCBindustryinMalaysiadecliningasmostaudioequipmentmakersshiftedouttoChinatorideonthelowcostbandwagon.TheMalaysianPCB industry at that time was a sunset industry duetomanufacturing of low technology single-sided PCBswith itsprimitiveprocessesofprintingandetchingandredundant capacity due to the proliferation of manyTaiwan small timers. While other PCB companiesclosed or shifted base, the visionary leaders of GUHPG took a bold decision to transform GUH PG andsubsequentlynurtured it into itscurrentpositionas thePCBmanufacturerwiththeBest-In-ClasstechnologyofCCD guided photo-imaging technology,HighPrecisionDrilling Machines, Precision Polish and Etching andAutomated Inner Layer Stacking and Press Machinescapableof8-layerPCBs.
Financial Indicators
GUH PG’s revenue growth through the years iscommendable with year 2019 revenue recorded atRM194 million in comparison to year 2013 of RM82millionwhichwasa2foldincrease.Thesturdyclimbinrevenue is driven by the strategies of quality productsand purposeful niche market selections of high endaudio,communicationandofficeequipment,pianoandmusic instruments, automotive, air conditioners andhome appliances.Again, the revenue of year 2019 incomparisonofyear2018roseby13.5%resultinginyear2019profitbeforetaxofRM13.5millioncomparedtotheRM3.8millionofyear2018.
Operational Indicators and Significant Performance Changes
With the right leadership, altruistic and devotedmanagement efforts, coupled with investments in newmachines and technology, putting in place the rightpeople, people training and customer peace of mindresulted insustainable revenueandprofitabilitygrowthwhichgrewsturdilythroughtheyearsandthusitspositiveresultsareverymuchdiscerniblebyyear2019.
Asrecordedinyear2019,thesalesinm2of4-layerPCBincreased 15 fold, the sales of 6-layer PCB increased10 fold, and the sales of double-sided PCB increased4 fold comparatively to the performance of year 2013.Comparing product sales of year 2019 against 2018,therewasanincreaseofdouble-sidedPCBsalesof13%and multi-layer PCBs sales of 40%. GUH PG startedthesalesofprecision6-layerPCBsdirectlytoJapanforsomenichemarketmusical instruments albeit in smallquantities but did garner a prestige that very muchimproved its image.Also,noteworthy is that in the fouryears of 2015 to 2018,GUHPGwon seven customerawardsandalsotheSignatureBrandAwardbytheBrandLaureateBestBrands.
Notable Capital Expenditure
The renewal of GUH PG’s business capability andsustainability would not be complete without a look atthe Capital Expenditure and Investments through theyearsfrom2010to2019.GUHPGstrategicinvestmentswas based on a focused objective of renewing itsmanufacturing capabilities with the aim of being anexemplarymanufacturer of precision double-sided andmulti-layerPCBsinMalaysia.
Thus, in the years 2010 to 2011, two older factorybuildingsweredemolishedtomakewayforthePTHPCBCenterofExcellencebuilding.Fromyear2012to2015a strategic purchase and commissioning of machineswere done which included 10K cleanrooms, Auto DryFilm Laminators, CCD Guided Imaging Machines,PalladiumBasedPTHMachines,Best inClassPlatingMachinesandJapanStandardDeveloping,EtchingandStrippingLines.QualityControltookonAutomaticOpticalInspection Machines in process and Automatic VisualInspectionMachinesatOutgoingQualityInspection.
Fromyear2016to2018,acompleterevampwasdoneat the“SatelliteBuilding”annexwhencetheolddoublestorey factory was completely stripped down internallyandonthefirstflooracompleterebuiltwasdonetohousethe Inner Layer Clean Room complete with Auto DryFilm Laminator, CCD-LED ImagingMachines, VacuumChamber Etching Line,Auto Thickness CompensatingPre-TreatmentMachine,andAutomaticOpticalInspectionMachines. On the ground floor a State of the ArtAutomaticInnerLayerHotandColdPressSystemandaRailedAutomaticStacking,Recovery,PolishingSystemwasinvestedin.TwoROWaterFiltrationSystemswereadded to ensure that class of input quality benchmarkrequiredattheautomotivePCBstandard.
In year 2019, a substantial investment was done toacquiretwentysixPrecisionRouterMachinestoensurereadinessforthe0603componenttrendoftheelectronicsworld.
An investment of RM101million was made from year2010 to2019 togetGUHPG ready for thenewworldorder.
Operational Activities
Despite being a local owned PCB Plant, GUH PGsteadfastly embraces the Japanese ManufacturingSystemofOperationalManagementlargelyinfluencedbyitscustomerswhoare98%Japaneseownedcompanies
GUH Holdings BerhadAnnual Report 2019 17GUH Holdings BerhadAnnual Report 2019 17
MANAGEMENT’SDISCUSSIONANDANALYSIS
and its Japanese Consultants. The backbone of theforward planning is the “Hoshin Kanri” methodology,and thuspenscustomers’ expectationsanddevelopedkey performance indicators as weekly, monthly andannual measurements to drive improvement and tocommunicate, educate, review and reward its staffbased on the Continuous Improvement MethodologyandPerformanceMeasurementsbasedonthePlan,Do,CheckandActCycle.WiththeaboveKPIsasdrivers,itdevelopedtechnicalcapabilitiesthatincludefineline/finepitch,denseBGAarrays,multipledesign-in impedancecontrol, plugholedesigns,masking freeviaholewallstechniques and gold plating evenness capable ofmeetingprecisioncommunicationequipmentstandards.GUHPG’smain strategy is to remain relevant and ascustomers’firstchoiceandhenceitsmissionisvestedinsteadfastdedicationtolong-termsustainabilityandtop-drivencommitmenttowardscustomers’needs.
In year 2019, GUH PG added 6-layer PCBs to itsproduction line up, thus it now has single-sided,double-sided, 4-layer and 6-layer multi-layers. GUHPG is certified to theAutomotive QMSCertification ofIATF16949andisarecognizedknowledgecontributortothePCBIPCDesignersCounciloftheSouthEastAsiaChapter.Currently, itsProductDevelopmentEngineersareworkingonthecertifyingofthe8-layerPCBswitharenownedJapanesecompany.
Anticipated Risks
At the time of reporting, the COVID-19 pandemoniumacross the world has turnedmost industries, factoriesandsupplychainsintodisarray.GUHPGwithoutdoubtis affected in some ways due to the major Chinesebasedrawmaterialsupplychain,andmajorcustomers’headquartersbasedinJapan.GUHPGhastakenpropermeasurestoensureuninterruptedsupplyfromthemainsourcesandalsofromalternatesourcesofmaterial.Onthehomefront,allemployeesundergobodytemperaturechecks and all other healthministry advices and strictquarantine instructions on any risks.On a silver liningthereisaninfluxofnewsmallquantityhighpricedRFQsduetothesituationinChina.
Other than COVID-19, the existing conflict that hasaffected almost everyone is the US, China trade war.Undoubtedlyingeneralithasstifledgrowthontheworldperspective and Malaysia would not be spared evenif somewere to argue the spill over of industry goodsdemandtoMalaysia.WiththeexistingpandemicissueitisknownthattheUS,Chinatradewarisfarfrombeingsettled.IthasbeenmorethantwoyearssincetheUnitedStatesfirstlaunchedinvestigationsintoChina’stradeandintellectualpropertyandsincethen,fourdifferentroundsofUStariffshavebeenslappedonChinesegoods.
Notably,ifthefifthroundoftariffsisapplied,virtuallyalloftheUS$550billionimportsfromChinaintotheUSwillbesubjectedtoanaveragetaxofabout25%attheUSborder.Inretaliation,ChinamaybesettoimposeitsowntariffsonmorethanUS$185billionworthofUSgoods.As the tradeconflict rageson,battlescarsallover the
worldarebecomingincreasinglyapparent,compoundedbyabackdropofglobalgeopoliticaluncertainty.Globaltrade growth has slumped into contractionary territory,recordingtheslowestgrowthsincetheGlobalFinancialCrisis. Likewise, global industrial production hassoftened,andpolicymakersandmarketparticipantsarebecoming increasinglywary about the prospects of animpendingglobalrecessiondrivenbythetradewarandfurtheraggravatedbytheCOVID-19disaster.
Nevertheless,thebackdropofthisglobalgloomhassomebrightoutlookandsomenegativeimpacttoMalaysiaandGUHPG.
1. The global sentiment has a sweeping effect onweaker countries thus effecting the Malaysiancurrencywhichhasaveryslimchanceof recoveryin the near future. Coupled with the weakening oilpriceand theweakenedRMB,MYR in themediumterm issupposed tobe lethargic. Inshort term, theweakenedMYRgivesanartificialboosttoitspricesquotedinUSDfortheexportdomain.
2. Thespilloverandtheseekingofsafehavensandnon-quotacountrieshasbeenescalatingduetothetradewar but unfortunately forMalaysia it ranks the lastasacountryofchoiceasanalternativesitetoChinadue to its labour conditions, long and complicatedbusinessapprovalsandunfavourablepoliticalscene.Malaysiahasestablishedanewcommittee to fast-trackapprovalsforforeigninvestmentandassembleda“tradewar task force”butas typical investorsstillseethesamecounterhoppingproceduresinactualpractice. In short, investors seeking an alternativesiteoverChinawouldpreferothercountriesVietnamorThailandratherthanMalaysia.
Going Forward
Nevertheless, among the external gloom, GUH PGhasinfactimprovedbyleapsandboundscomparedtoyesteryearofahandfuloflocalcustomers.ItnowgarnersacustomerbaseofmostlyJapaneseresidentcompaniesinMalaysiaandsubstantialexportstoThailand,Indonesia,Vietnam and indirect exports to several ECCountries.In year 2019, GUH PG’s double-sided PCB productioncapacity reached50,000m2 permonth from its humblebeginning of 9,000 m2 meter square a month of year2008. Itsmulti-layer PCB production capacity reached15,000m2amonthfrom200m2amonth.Concurrently,it achieved benchmarked Best-in-Class capabilities ofMicro-BGAs, Multiple Impedance Control, Fine-LinePatternDesignsandHoleSizesof200microns.
BeforetheCOVID-19pandemicstruck,GUHPG’splansweretoraiseitsPTHproductioncapacityto60,000m2permonthby the year 2020and targetinganaveragemonthlysalesofPTHPCBsatanaverageof58,000m2permonth.Theproductionincreaseisexpectedtoreachutilisationsaturationpointofits5.56acresoflandinyear2020. If this capacity is utilisedwith a good businessfocusandbywooingatleast60%ofexports,GUHPG’sbusinessandprofitabilityshallbesustainableforseveral
GUH Holdings BerhadAnnual Report 201918 GUH Holdings BerhadAnnual Report 201918
MANAGEMENT’SDISCUSSIONANDANALYSIS
years. This can be achieved should the COVID-19contagioniscontrolledorcontainedgloballyinthenearfuture.
GUH Circuit Industry (Suzhou) Co. Ltd. (GUH SZ)
Financial Indicators
Fortheyear2019,GUHSZpostedarevenueofRM98.71million,13.51%attritionfromRM114.13millionachievedinyear2018;andrecordedaprofitbeforetaxofRM2.81million in year2019ascompared toRM7.33million inyear 2018. The lower revenue wasmainly due to thedropinsalesofPCBby15.88%from773,338m2inyear2018to650,562m2inyear2019.GUHSZencountereddownturn trend in sales mainly attributed by thecustomer’snewmodelswhichwerenolongerallocatedtoGUHSZduetocompany’srelocationmatter.Despitehavinglowerrevenue,GUHSZsustainedprofitablelevelbeyond itsmanufacturing operation excellence, qualityproductsandreputablemarketimage.
Market Positioning
GUHSZ ispositionedasoneof the top5single-sidedPCB manufacturer in the eastern regional market ofChina.Inaddition,GUHSZhasareputationasthe“One-StopSolution”suppliertoitscustomerswiththevariousproduction of single-sided, double-sided, MLB as wellasLEDbacklightandlightingPCBs.Whilemaintainingcurrentproducts,GUHSZismovingtowardsnichemarketapplicationsuchastuner,powersupplyandmotorPCBs.ThesewillenableGUHSZtofurthersustaincompetitiveadvantagesinChinamarket.
GUHSZisgladtohavecustomersfromthelistofFortuneGlobal500whichplaysanimportantroleinmaintainingitssustainabilityinChinamarket.However,therelocationmatterhadleditsmajorcustomerstodistributemostoftheirorderstoothersuppliers.Inyear2020,GUHSZwillcontinuetodevelopnewpotentialcustomersandrebuildthe existing customers confidence with the stability indelivery,bestqualityproductsandcustomerservices.
Future Industry Trends
China’sPCBmarketmaintainsasteadygrowthdespitethetradewarbetweenUSandChina.Withthedevelopmentof5Gandartificialintelligenceera,themarketforsmarthome, smart hardware, smart security and automotiveelectronicsishuge.Smartsecurityisexpectedtocreatea RMB100 billion market by year 2020 as worldwideconsumers are expected to spendmore than USD9.7billion on smart home surveillance cameras by 2023.Thelargermarketisincreasingintheautomotivesectorin thefuture.AccordingtoPrismark, themarketsizeoftheAutomotive PCB production was USD7.6 billion in2018and isexpected to reachUSD10.1billion inyear2023, representing a compound growth rate of 6%.Consumer electronics PCBs worth USD24.1 billion inyear2018andisexpectedtoreachUSD28billioninyear2022,with a compoundgrowth rate of 4.2%.GUHSZwilldevelopnewpotentialbusinessinautomotivemarket
suchasheadlightandinteriorlightingLEDPCBandnewemergingsmarthomeappliancesmarketinChina.
The Way Forward
With the trade war between US and China, some ofGUHSZcompetitorsinChinahavestartedtoshifttheirmanufacturingoperationstooverseascountriessuchasThailandandVietnam.ThemanagementforeseethisasanopportunityforGUHSZtoexploretheexportmarketandfill in thegap in localmarketdemand.GUHSZ isalways ready to take up the opportunity with forwardpreparationsandimplementingstrategiestocaterfortheforeseenthreatsinthemarketenvironment.
Moving forward, GUH SZ is undertaking variousactionplans,which includecost reductionstrategies inmanufacturingoperations,suppliermanagement,logisticandstringentbudgetarycontroltoremaincompetitiveinthe market. GUH SZ will move towards niche marketapplication and continue to focus on diverse range ofproductsincludingautomotiveandhomeapplianceswhilemaintaining the existing products. This new businessexpansion will generate additional sales revenue withbetter profit margin while maximizing the utilization ofproductioncapacity.
Lastly,GUHSZwill continue to improve the quality ofitsproductsandcustomerservicestoensureitprovidesmaximum satisfaction to its valuable customers inmaintainingalong-termrelationship.
The Impact on the Outbreak of COVID-19
While the COVID-19 pandemic continues to causemassive disruption to the global economy, GUH SZperceives the beginning of recovery in China.Most ofthemanufacturing companies arenot only rampingupproduction in the country but some are even planningtoexpandcapacityoverthecomingmonths.Withmostwestern nations in lockdown situation, China-basedplants might be the only viable suppliers to globaleconomy.Taking amore detailed outlook at economicprospects forChina,GUHSZbelievesandanticipatesthatChina isstillwellpositionedtobeoneof themaindriversoftheglobaleconomyinyear2020.TheCOVID-19outbreak isexpected tohaveslight impactonGUHSZ’s performance for the coming reporting periodswithChinashowingsignsofeconomic recoveryas thedomesticcoronaviruscontagionisundercontrol.
GUH Holdings BerhadAnnual Report 2019 19GUH Holdings BerhadAnnual Report 2019 19
MANAGEMENT’SDISCUSSIONANDANALYSIS
PROPERTIES DIVISIONProperty Development
GUH Properties Sdn. Bhd. (GUH Properties)GUH Land Sdn. Bhd. (GUH Land)GUH Development Sdn. Bhd. (GUH Development)GUH Realty Sdn. Bhd. (GUH Realty)Milan Diamond Sdn. Bhd. (Milan Diamond)
Compared to the year 2018, the top line of GUHPropertiesfell18%toRM21.9millionduetouncertaintyandweakmarketsentimentintheMalaysianrealestatemarket.Despitethefact,thenetprofitbeforetaxofGUHPropertieshas improvedbyRM2.6million,an increaseof 196% from the year 2018. The improvement canbe explained by the numerous efforts taken by GUHProperties to curb costs. Operating expenses havedecreased by 11%,while other income such as rentalincome has increased by a remarkable 57% due tohigherdemandforcommercialactivitiesintheareaGUHPropertiesdevelops.
GUHProperties has consistently strived to sustain themarket share by identifying and supplying the currentmarket demand and enhancing its products despitechallengingmarketaheadpartlyduetoadversemarketsentiment affected by various factors such as weakcurrency, lack of demand in property due to supply-demandimbalance,andhencethesoftpropertymarkettrend.GUHPropertieshasincreasedtheadvertisementefforts as well as giving out attractive promotions toattract sales andmanage the propertymarket slowingdownpressure.
GUH Properties has embarked on high-end landedguardedresidentialdevelopmentsituatedonhighground
and commercial development, which is strategicallylocated right beside Labu/Seremban highway. Thesaid development, which is augmented by impressivelandscape, is situated strategically where shoppingmalls, medical centres, commercial hubs, and sportscentresarewithinashortdistance.
GUH Development has embarked on commercialdevelopment consist of drive-thru restaurants andretails shops in thecentreof the townshipatSimpangAmpat,Penangofwhichwillbesurroundedbyintegratedinfrastructures, public transport systems, residentialhousing,andcommercial hub.ApartnershipwithQSRStoresSdnBhdhasbeensignedtodevelopthefirstKFCdrive-thrurestaurantinthevicinitywhichwillfurtherboostcommercialdevelopmentvalueof thewhole integratedtownship.Launchesoftheretailshopsarescheduledinthenearfuture.
GUH Realty signed a joint venture with CentralisedDormitory Sdn Bhd to build a workers’ dormitory inapproximately7.5acresoflandatSungaiBakap,Penang,outofthe17acreslandbank.CentralisedDormitorySdnBhd has vast experience inmanaging dormitories andgreatconnectionwithpotentialclients.Layoutapprovalhas been obtained from the relevant Authority. Theprojectistargetedtobecompletedinstagesfrommiddle
GUH Holdings BerhadAnnual Report 201920 GUH Holdings BerhadAnnual Report 201920
MANAGEMENT’SDISCUSSIONANDANALYSIS
toendofyear2022andcanhouseapproximately6,000foreignworkersfornearbyindustrialparks,namelyBatuKawanIndustrialPark,PenangScienceParkandBukitMinyakIndustrialPark.
Besides, Milan Diamond, a wholly-owned subsidiaryof GUH Asset Holdings Sdn Bhd, has completed theconstruction of international school buildings which islocatedatTamanSari,Rawang.ThelandandbuildingsareleasedtoStraitInternationalEducationGroup(SIEG)onalongtermlease.
Owingtothecurrentchallengingeconomicenvironmentand rising living cost, greater efforts will be requiredto boost sales. During the year, the Government hadimplemented various policies to address housingaffordabilityissuesandtoencouragethepropertymarketandincreasedpropertysalessuchasHomeOwnershipCampaign 2019 (“HOC”), offer stampduty exemptionson the Instrument of Transfer and Instrument of LoanAgreement to encourage greater homeownership andimprove sales. With the impact from the COVID-19pandemic in early 2020 amplifying existing issues inthehousingmarketintheformofreduceddemandandincreaseinloandefaults,localowner-occupiermarketsinestablishedandwell-connectedsuburbanareassuchasSimpangAmpatandSerembanareexpectedtoremainstable. There may also be some interest from foreignbuyerswhohaveexperiencedabiggerimpactfromthepandemic in theirowncountrywhowillopt to invest inMalaysia that have better-managed healthcare and toseizetheopportunityoftheweakerRinggitandforeseethe appreciation of property value once the economyrecovers. Bank Negara Malaysia’s moratorium on thepaymentof interestandprincipal forcredit facilitieswilltemporarilyrelievesomepressure,preventingimmediatefalloutinthepropertymarket.PropertyDivisionwillneedtoadoptfurthercautiousmarketingstrategiestosustainstablesalesandwithstand thecompetitionof the local
property market. Events, electronic forms of publicityandpropertytypessuitedtoconsumerslifestylewillbeorchestratedandorganisedtocapturemarketattentionand awareness towards the division and its products.Withthesecontinuousefforts,webelievethePropertiesDivisionwillachievethebusinessobjectivesfortheyearahead.
Moving forward, with consideration on the impact ofthe outbreak of COVID-19 and consumers temporarilymoving away from buying luxury and big-ticket itemsduring this tough times, the Properties Division willconcentrateonresidentialpropertieswhileplanning forfuture launches of integrated commercial project withretailoutlets, recreation,and leisure facilities, foodandbeverage outlets, shops and offices as its strategiclocationisanadvantageandwillspurgreaterdemand.
With the introduction of the above diverse range ofproperty development, different market needs anddemands will be captured. The Property Division hasstrategised itspositiontodiversify itssourceof incomeandprofitfromadiverserangeofpropertydevelopmentproducts.
ThePropertyDivisionwill continue toscout for land tofurther increase its land bank and to cater for futuregrowth.
GUH Holdings BerhadAnnual Report 2019 21GUH Holdings BerhadAnnual Report 2019 21
MANAGEMENT’SDISCUSSIONANDANALYSIS
UTILITIES DIVISIONWater & Wastewater Solutions
Teknoserv Engineering Sdn. Bhd. (Teknoserv)
Thecompany’srevenuedroppedfromRM29.0millioninyear2018toRM19.2millioninyear2019.However,thecompanyrecordedaturnaroundfromLossBeforeTaxofRM2.1million toProfitBeforeTaxofRM0.39million inyear2019.Thisismainlyduetorecognitionofprofitfromtheongoingprojects.
In year 2019, Teknoserv made its foray into roadconstructionindustrybysecuringaRM31.0millionnewvillage road construction project in Mukah, Sarawakvia strategic partnership with local experienced roadbuilder.Withthisbreakthrough,thecompanyanticipatesto secure road projects in future which will contributepositivelytothecompany.
Asat31December2019,Teknoservhassevenongoingprojects which consist of two water treatment plantprojects, four sewerage related projects and one roadproject. The company order book stands at RM171millionwithunbilledbalanceofRM70million.
With the global outbreak of COVID-19 andMovementControl Order (MCO) implemented by the Malaysiangovernmentatthetimeofreporting,Teknoservforeseesslowprogressandcollection fromtheongoingprojectsin the coming months. It is also anticipated that theconstruction industry will remain sluggish in the nearfuture.
In its effort to cushion the impact caused by thispandemic, Teknoserv will actively participate forwater andwastewater jobs available in themarket viacompetitive tender inorder tocontinueremainrelevantintheindustry.Furthermore,thecompanyisalsoactivelyexploringotherinfrastructureandutilityprojectssuchasroad,bridgeandsolarpowerplantaspartofefforts toexpanditsportfoliointheconstructionindustry.
Whilekeepingbusyontheexecutionofexistingprojectsand outstanding order book, Teknoserv is striving tofurtherexpanditsportfolioparticularly inEastMalaysiaandSEAcountries.Thedivisionisalsoactivelyexploringand anticipating to make its foray into growing SEAcountriesviaBuild,Operate,Transfer(BOT)investmentin the countries’ water and wastewater projects. If theinvestment materialized, it is anticipated to generaterecurrentandstableincometothegroupinnearfuture.
PLANTATION DIVISIONCultivation of Oil Palm
GUH Plantations Sdn. Bhd. (GUH Plantations)
GUH Plantations commits to achieve its target incompleting 2 rounds of harvesting each month andensuringallFreshFruitsBunchesharvestedaresenttotheoilmillwithin 24hours. It is also the commitmentof the division to ensure the quality of the fresh fruitsbunches are good in order to obtain the highest OilExtractionRateofferedbyOilMill.
AsthesellingpriceisdeterminedbyMalaysianPalmOilBoard,thedivisionwillenjoymaximumsellingpriceifitmaintainsmaximumOilExtractionRate.
Anotherfactorwhichcouldaffectitsrevenueisyield.Yield
decreased by 17.3%, comparing to 2018 (2042.75mtversus 2468.89mt), yield per acre per year is 6.84mt.TheyieldisslightlyhigherthanaverageyieldinKedahwhichis6.54mtperacreperyear.
Plantationyieldisdirectlyinfluencedbyweatherandtheoverallrainfallwhichmightaffecttheyield.
Yieldinyear2020isexpectedtobegood.CrudePalmOilpriceclosedatahighofRM3,052.00permtbyendof2019butthepriceisnotsustainableduetoplungeinoilprices.
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MANAGEMENT’SDISCUSSIONANDANALYSIS
ELECTRICAL DIVISIONTrading of Electrical goods and construction materials
GUH Electrical (BW) Sdn. Bhd. (GUH BW)
GUHBWisprincipallyengagedinthetradingofelectricalgoods and buildingmaterials such as switches, wires,roofandfloortiles,paintsandsanitarywarecateringtotheconstructionindustry.
Duringtheyear,thecompanywentthroughachallengingperiodduetoweakmarketsentimentsespeciallyfortheconstructionindustry,therevenuedecreasedfromRM7.6millioninyear2018toRM5.5millioninyear2019.Thedecreasewasmainlyduetolowerrevenuefromelectricalproductsandthephasingoffofbuildingmaterialproductsfrom the company’s revenue stream. However, during
theyear thecompanyhad tried toexpand its rangeofproducts under the house-brand “LEB” to maximizemargin,inadditiontothecurrentproductrangeoffittings,ballasts, industrial fan,LED tube lights,flexiblecables,etc.TheLEBbrandhasexpandedtoincludeLEDfloodlights,LEDbulbs,VDEcables,etc.
Overall 2019 has been a very challenging year forGUHBWwithunpredictablemarketsoutlook.GUHBWforesees that the market will continue to be uncertaintherefore it is relooking on its operations to focus onothercorebusinesswithintheGroup.
FINANCIAL POSITION OF GUH GROUP
Asat31December2019,GUHGroup’stotalassetswereRM667.2million,adropof3.3%fromRM689.7millionatendofthepreviousfinancialyear.GUHGroup’stotalreceivablesdecreasedby12.1%toRM62.6millionasat31December2019fromRM71.2millionatendofthepreviousfinancialyearinlinewithlowerrevenue.GUHGroup’scashandcashequivalentsstoodatRM102.4millionasat31December2019comparedtoRM106.5millionatendofthepreviousfinancialyear.GUHGrouphadusedinternallyandexternallygeneratedfundstofinancepropertydevelopmentprojects,workingcapitalandpurchaseofmachines.
GUHGroup’stotalliabilitiesdecreasedby12.9%toRM160.2millionasat31December2019fromRM184.0millionatendofthepreviousfinancialyear.GUHGroup’stotalpayablesdroppedtoRM77.4millionasat31December2019fromRM89.5millionatendofthepreviousfinancialyearmainlyduetothedecreaseinpurchaseofrawmaterials.Inaddition,GUHGroup’sloansandborrowingsdecreasedtoRM59.3millionasat31December2019fromRM66.8millionatendofthepreviousfinancialyearandconsequently,GUHGroup’sgearingratiodecreasedto11.9%asat31December2019comparedto13.2%atendofthepreviousfinancialyear.
Despitetheslightimprovementinnetassets,GUHGroupregisteredalowernetassetpershareattributabletoownersoftheCompanyofRM1.83asat31December2019comparedtoRM1.84atendofthepreviousfinancialyearmainlyduetodistributionof3,427,000treasurysharesassharedividendsduringyear2019.
Goingforward,GUHGroupcautionsthattheeffectofCOVID-19willremainuncertain.WhilethedisruptionofbusinessactivitiesresultingfromtheglobalsupplyanddemandshocksaswellasMovementControlOrderisexpectedtohaveanegativeimpactonGUHGroup’sperformance,theGroupisunabletoquantifythemagnitudeanddurationofsuchimpactatthisjunctureastheoutbreakcontinuestoprogressandtheconditionsareunpredictable.Nevertheless,GUHGroupwillcontinuetocloselymonitorthedevelopmentofCOVID-19pandemicandemploystrategiesthatenhancereturnsandcostefficienciestoweathertheinevitableslowdownoftheeconomy.
GUH Holdings BerhadAnnual Report 2019 23GUH Holdings BerhadAnnual Report 2019 23
CORPORATESTRUCTURE
CambodiaUtilitiesPte.Ltd.
GUHCapitalSdn.Bhd.(201501038602(1163923-H))StraitsInternationalEducationGroupSdn.Bhd.(201001032155(916080-M))
GUHInternational(HK)PrivateLimited(1545766)
100% GUHElectronicHoldingsSdn.Bhd.(198701007148(165866-A))100% GUHCircuitIndustry(PG)Sdn.Bhd.(199201000239(231743-T))
100% GUHCircuitIndustry(Suzhou)Co.,Ltd.
100% GrandUnited(BVI)Co.,Ltd.
100% GrandCircuitIndustry(Philippines)Inc.
GUHPropertiesSdn.Bhd.(197801007022(44057-D))
GUHPlantationsSdn.Bhd.(198101010261(76386-W))
GUHLandSdn.Bhd.(201401015894(1091980-T))GUHDevelopmentSdn.Bhd.(198901011135(188437-M))
GUHRealtySdn.Bhd.(197901004288(48565-M))
JeladanSdn.Bhd.(199001003699(195266-U))
GUHAssetHoldingsSdn.Bhd.(199001000030(191588-V))GUHElectrical(BW)Sdn.Bhd.(196901000747(9143-K))
GUHElectrical(KL)Sdn.Bhd.(198201005072(84822-P))
GUHConstructionSdn.Bhd.(198301008270(103524-K))
MalaysianMechanicalEngineeringIndustriesSdn.Bhd.(197901001434(45674-U))
TecnovacMarketingSdn.Bhd.(199501004396(333591-H))
MilanDiamondSdn.Bhd.(201401022658(1098744-D))
GUH HOLDINGS BERHAD(196101000062(4104-W))
ElectronicDivision Properties&PlantationDivision UtilitiesDivision
TeknoservEngineeringSdn.Bhd.(199501008150(337348-H))
GUHWaterPte.Ltd.(1624030)
GUHUtilitiesHoldingsSdn.Bhd.(201101016995(945131-T))(FormerlyknownasGUHWaterHoldingsSdn.Bhd.)
GUH Holdings BerhadAnnual Report 201924 GUH Holdings BerhadAnnual Report 201924
FINANCIALHIGHLIGHTS
REVENUE (RM’000)
YEAR
360,000
340,000
320,000
300,000
280,000
260,000
240,0002019
284,664
314,841
352,868 349,124
335,990
2015 2016 2017 2018
PROFIT/ (LOSS) BEFORE TAX (RM’000)
YEAR2019
19,000
14,000
9,000
4,000
(1,000)
18,674
(59)
23,216
797
24,000
7,096
2015 2016 2017 2018
PROFIT/ (LOSS) FOR THE FINANCIAL YEAR ATTRIBUTABLE TO OWNERS OF THE COMPANY (RM’000)
YEAR2019
22,000
17,000
12,000
7,000
2,000
(8,000)
(3,000)
9,931
18,878
(7,327)
(2,681)
5,018
2015 2016 2017 2018
TOTAL ASSETS (RM’000)
YEAR2019
800,000
600,000
400,000
200,000
0
614,439663,456 677,345 689,705
667,159
2015 2016 2017 2018
YEAR2019
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (RM’000)
550,000
500,000
517,940524,795
512,420505,714 506,975
450,0002015 2016 2017 2018
EBITDA (RM’000)
YEAR2019
60,000
40,000
20,000
0
32,882
37,379
14,569
19,465
2015 2016 2017 2018
26,695
GUH Holdings BerhadAnnual Report 2019 25GUH Holdings BerhadAnnual Report 2019 25
FINANCIALHIGHLIGHTS
^ Adjustedretrospectivelytoreflectthechangesinthenumberofsharesasaresultofthedistributionof1treasuryshareforevery80existingordinarysharesinissueinJanuary2019.
RETURN ON TOTAL EQUITY (%)
4.00
2.80
1.60
(0.80)
0.40
(2.00)
YEAR2019
1.92
0.99
3.60
(1.43)
(0.53)
2015 2016 2017 2018
BASIC EARNINGS/ (LOSS) PER SHARE (SEN)
YEAR
3.76
1.81
6.88
(2.67)
(0.97)^
8.00
4.00
0.00
(4.00) 20192015 2016 2017 2018
NET ASSETS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY (RM)
YEAR2019
2.50
2.00
1.00
0.50
1.50
0.00
1.96 1.991.87 1.84 1.83
2015 2016 2017 2018
GROSS DIVIDEND PER SHARE (SEN)
YEAR2019
6.00
4.00
2.00
0.00
5.00
3.50
0.00 0.00 0.00
2015 2016 2017 2018
LOANS AND BORROWINGS (RM’000)
YEAR2019
80,000
60,000
40,000
20,000
00
16,278
45,241
66,817
60,337
2015 2016 2017 2018
GEARING RATIO (%)
YEAR2019
0
15.00
10.00
5.00
0.00
3.10
8.83
13.21
11.90
2015 2016 2017 2018
GUH Holdings BerhadAnnual Report 201926 GUH Holdings BerhadAnnual Report 201926
SUSTAINABILITYSTATEMENT
RecognizingthattheCompanyanditsbusinesscannotsustainitselfinthesocietyandenvironmentinwhichitoperates,theBoardofDirectors(“theBoard”)ofGUHHoldingsBerhad(“GUH”orthe“Company”)continuesitseffortinembracingtheenvironmental, socialandgovernancecriteria in itsbusinessoperationsanddevelopments.While theBoard isprimarilyresponsiblefortheGroup’ssustainabilitypracticesandperformance,itisassistedbytheRiskManagement&SustainabilityCommitteewhichinturn,supportedbytheExecutiveDirectorsandallotherSeniorManagement inmanagingsustainability-relatedmatters.
TheRiskManagement&SustainabilityCommitteehasbeensetup toassist theBoardon identification,evaluationandmanagementofthesignificantrisksassociatedtocurrentbusiness,anynewinvestmentsand/ordivestmentsandcontrolresponsibilitieswithappropriateactionplansandensurestheimplementationofappropriatesystemstomanagetheoverallriskexposureoftheGroup.
TheRiskManagement&SustainabilityCommitteeconsistsofthreemembers,allofwhomareNon-ExecutiveDirectors,withamajorityofthembeingIndependentDirectors.Meetingshallbeheldatleastonceayearandmayberequestedasandwhennecessary.
ThemembersoftheRiskManagement&SustainabilityCommitteeplayaleadingroleinsustainabilitymanagementwithin theCompanyand itsGroup.Agoodmixof coordinatingexecutivesandBoard level representatives canbea forcefuldrive togenuineengagementonsustainability issuesamongstsenior leadersof thebusinessaswellasmobilisingthesupportoftheworkforce.
TheRiskManagement&SustainabilityCommitteeisaccountableforthesustainabilitystrategyandperformanceoftheGroup’sbusiness.
DutiesoftheRiskManagement&SustainabilityCommitteeincludeamongothers,thefollowing:
• TooverseetheriskmanagementactivitiesoftheGroupandapproveappropriateriskmanagementproceduresandmeasurementmethodologiesacrosstheorganization;
• ToreviewreportsonoperationalrisksfromalldivisionsoftheGroup;
• Toassesstherisksinnewinvestmentand/ordivestment;
• Toreviewtheeffectivenessofoverallriskmanagementatthedivisionallevel;
• ToreviewandmakerecommendationstotheBoardinrelationtoriskmanagement;
• TomonitortheriskmanagementexposureoftheGroup;
• Torecommendoradviseonsignificantproposedchangestoriskmanagementpoliciesandstrategies;
• Toreviewtogetherwithothercommittees,themanagement,Groupinternalauditandexternalauditors,anysignificantrisksandexposurethatexistandassessthestepsthatmanagementhastakentominimizesuchrisktotheGroup;
• ToassesswhethertheGroup’sriskmanagementandsustainabilitypoliciesarecommunicatedeffectivelytoensuretheyareembeddedaspartoftheGroup’scorporateculture;
• ToaligntheGroup’ssustainabilitystrategywith itscooperatestrategyandvaluestoensurefocusedandeffectiveeffort;
• TooverseemanagementofmaterialsustainabilityissuesthatmayimpactonthesustainabilityorreputationoftheGroup;
• Tomonitor and report to the Board on theGroup’s progress on its sustainability commitments in the context ofeconomic,environmentalandsocial(“EES”);
• ToreviewtheGroup’sannualSustainabilityStatementforsubmissiontotheBoardforapproval.
GUH Holdings BerhadAnnual Report 2019 27GUH Holdings BerhadAnnual Report 2019 27
SUSTAINABILITYSTATEMENT
Risk Management
RiskmanagementisfirmlyembeddedintheGroup’smanagementsystemandtheBoardbelievesthatriskmanagementis critical in the Group’s sustainability. The Board has, through its Risk Management & Sustainability Committee,establishedasoundriskmanagementandcontrolframeworkthatwasimplementedthroughouttheGroup.TheriskmanagementprocessassiststheGrouptoachieveitsperformanceandprofitabilitytargetsbyprovidingriskinformationtoenablebetterdecisionmaking.TheBoardhastheultimateresponsibilitiesformanagingrisksandinternalcontrolsassociatedwiththeoperationsofeachdivisionintheGroup.
Governance
TheBoardisthehighestgoverningbodyofGUHandisresponsiblefordeterminingstrategicdirectionoftheGroup.TheBoardofDirectorsappointedarewithdiversifiedskillsandprofessionalismfromdifferentareastothetypeofbusinesstheGroupisinvolvedin.Currently,theBoardconsistsofninemembers,comprisingtheExecutiveChairman,theCEO/GroupManagingDirector,twoNon-ExecutiveDirectorsandfiveIndependentNon-ExecutiveDirectors.
TheBoardhastakenstepstointegratesustainabilityissuesaspartofitsstrategicformulation.TheBoardsupportedbyCEO/GroupMD,COOandGeneralManagers,enablestheBoardtoassessandensurethesustainabilitygovernanceisstructuredandfunctioningthroughthevariouslevelsofmanagement.
Sustainability
The Board considers sustainable business utmost important due to the rapid changes of external environment,customers, regulators and investor requirements. By understanding long-term trends, theGroup can respond andrealisenewopportunities.TheCompanyanditsGroupwillconsistentlyundertaketomanagefuturecustomerneeds,respondtoregulatorsfasterthancompetitors,buildingreputationsandmotivatingemployeesofwhichplaysabigpartincreatingacompellingbusinesscase.
GUH’s effort inmanaging sustainability in business by steering its companies and divisions and having taken intoaccountsocial,economicandenvironmentalimpact.Thesustainabilityinitiativesareshownasfollows:
(a) marketplace(b) workplace(c) environment(d) community
SustainabilityDimension
SustainabilityStrategy
SustainabilityInitiativesSustainabilityMeasures(ExampleofPerformance
Indicators)Benefits
Marketplace
HighStandardofSuppliers
• Encourageandinfluencesupplierstoactinasustainablemanneracrossvaluechain
• Responsibleandsustainablesourcing
• Supplychainmonitoring
• Numberofsupplieraudits
• Percentageofsuppliersmeetingenvironmentalcriteria
• Adoptsustainabilitypracticestodifferentiatefromcompetitors
• Newbusinessopportunitiesformore“green”products
• Increaseincustomerloyaltyandtrusts
• Complywithregulations
Goodcustomerrelationshipmanagement
• Encourageandinfluencecustomerstoactonasustainablemanneracrossvaluechain
• Offermoresustainableproductsandservicestocustomers
• Customersatisfactionresults
• Reductioninnumberofcustomercomplaints
• Brandmanagement
GUH Holdings BerhadAnnual Report 201928 GUH Holdings BerhadAnnual Report 201928
SUSTAINABILITYSTATEMENT
SustainabilityDimension
SustainabilityStrategy
SustainabilityInitiativesSustainabilityMeasures(ExampleofPerformance
Indicators)Benefits
Corporategovernance
• Nocorruption• Ethicalmarketing• Fair-trade• Complywithgovernmentrulesandregulations
• Avoidfacilitationpayments
• Numberoffines/penaltiesfromauthorities
• Litigationrisks• Boardindependence
• Improveaccesstocapitalwherefinancialinstitutionsandinvestorsarelookingintofinancingmoreenvironmentallyandsociallyacceptableprojectsandbusinesses
Economicproductivity
• Efficientpricingandincentives
• Productionefficiency
• Budgetvsactualexpenses
• Efficientpricing• Efficientprioritizationofproductionschedule
Workplace
Safety,securityandhealth
• Minimizehealthandsafetyrisksandpromotephysicalfitness
• Numberofworkplaceinjuries/illness
• Humanexposuretoharmfulpollutions
• Safetypracticesandtargets
• Increaseemployeeengagement
• Attractandretainemployees
• Fostergreaterproductivity
Operationalefficiency
• Maximizeefficiencyinproductionofgoodsandservices
• Efficientoperationsandassetmanagementmaximizedcostefficiency
• QualityKPIs• Rejectrates• Assetusage
Standardsinrecruitmentanddevelopment
• Maintainhighstandardsofrecruitmentanddevelopment
• Talentattraction,retentionanddevelopment
• Equalopportunityemployment
• Averagetraininghoursperemployee
• Percentageoffemalesinseniormanagement
Retentionofemployees
• Goodhealthandsafety
• Performancebase• Goodworkingconditions
• Losttimeinjuries• Employeecompensation• Benefits• Employeeturnover• NumberofdismissalduetoviolationtoCompanypolicies
Environment
Pollutionreduction
• Reduceair,noiseandwaterpollutions
• Efficientwastemanagement
• Environmentalmanagementpolicy
• Managementofusedoil,leaksandwastewater
Resourceconservation
• Reduceandefficientusageofscarceresources,e.g.electricity,waterandrawmaterials
• Totalenergyconsumption
• Totalwaterconsumption• Rawmaterialconsumption
• Wasterecycled
GUH Holdings BerhadAnnual Report 2019 29GUH Holdings BerhadAnnual Report 2019 29
SUSTAINABILITYSTATEMENT
SustainabilityDimension
SustainabilityStrategy SustainabilityInitiatives
SustainabilityMeasures(ExampleofPerformance
Indicators)Benefits
Going“Green”
• 3R’s(Reduce,Reuse&Recycle)
• Preventwasteratherthantotreatorcleanupwasteafteritiscreated
• 3R’sprogramme• Recyclingpractices
• Maybeeligiblefortaxdeductions,taxexemptionsandothertaxbenefits,dependingonthequalificationcriteria
• Increasecostsavings
Energyandefficiency
• Properwastedisposal• Operationaleco-efficiency
• Minimizeenergycosts
• Totaldischargedwaterrecycled
• Totalenergysavingsmachinery/equipmentusage
Climatestability
• Reduceglobalwarmingemissions
• Mitigateclimatechangeimpact
• Emissionofglobalpollutants
• Sustainablepalmoil
Community
Communitycohesion
• Donationofmoneyandtime
• Totalcommunityinvestment(RM)
• Numberofcommunityinitiatives
• Numberofhoursspentoncommunityinitiatives • Improve
communityunderstandingofGUH
Socialintegrity
• Supporteducation
Economicdevelopment
• Enhanceemploymentandbusinessactivities
• Accesstoemploymentopportunities
Culturalheritagepreservation
• Respectandprotectculturalheritage
• Supportculturalactivities
• Organiseculturalactivities
• Responsivetotraditionalcommunities
Insummary,thesustainabilitymanagementoftheGrouphasbeendriventocontinuefocusingontheareasacrossthefoursectionsnamelythemarketplace,theworkplace,theenvironmentandthecommunity.
Care for the Marketplace
talentandtakeinterestinthecontinuedlivelihoodofitsemployees.
GUH Group implements and upholds high standarddealing with the suppliers and vendors. This is in linewiththemanagement’sphilosophytoreflect its internalvaluesandtheexpectationsofshareholders,customers,authorities and the community.GUHbelieves that it ismore productive and effective if business relationshipsarebuiltontrust,mutualrespectandcommonethics.Thequalificationsandcredentialsarecarefullyvettedbeforebeing admitted into the list of qualified suppliers andvendors. Aspart of theGroup’s contributions towardsthelocalbusinesscommunity,suppliesandservicesarefirst sourced locally including high technology supplieslikedelicatechemicalcompoundswhereavailable.
GUH Circuit Industry (PG) Sdn. Bhd. (“GUH PG”),the Penang sited manufacturing plant of GUH GroupmanufacturesandsellshighendprecisionPrintedCircuitBoards (PCBs) to renownedelectronicsmanufacturersin thedomainofautomotive infotainment systems,air-conditioners,electronicpianos,musicalinstrumentsandhigh end audio/ receivers. The factory’smainmarketsareMalaysia,Thailand,Indonesia,Japan,VietnamandEurope.GUHPGplacesthehiringofhumanresourcesfor management and engineering talent from localuniversities, colleges and vocational institutes as itspriority.Asaresponsiblelocalcompanyitaspirestodomore than its responsibilitiesandcommitmentofbeingaqualityPCBsmanufacturer. Thus, to reciprocate thesupportofthelocalfraternity,GUHendeavourstoimprovethe knowledge of the community, nurture engineering
GUH Holdings BerhadAnnual Report 201930 GUH Holdings BerhadAnnual Report 201930
SUSTAINABILITYSTATEMENT
Thecontributionstowardsthelocalsupplyfraternityalsoincludecascadingdownknowledgeandtechnologythathavebeengatheredthroughouttheyearstodevelopmajorlocalsuppliersinallthedivisions.Supportandtechnologytransfer to local tieronesuppliersandvendors includeplantandprojectaudits,trainingontheimportantcriteriaofbeingpartof thechainof the IATF16949, reviewingtheir process controls, quality monitoring, analyticaltechniques,storageandhandlingprocesses.Suppliers’keypersonneltrainingprogrammesareinplacefortheElectronicDivision,wherenewlyrecruitedengineersarestationedandtrainedinthefactoryforaperiodof timeto ensure the link of supplies quality, process controlandkeymonitorsarealignedbetweenthedivisionandimportant local suppliers. The suppliers’ and vendors’performance such as compliance with specification,commercial competitiveness, timely deliveries andafter sales are carefully and periodically reviewed bythe respective divisions to ensure compliancewith theGroup’srequirementsandpolicies.
In technologycontribution to the localcommunityGUHdevelopsproductsandservices,offeringadvancedesignknowledgeandgoodvalueinpricing,qualitysafetyandenvironmenttoensurefuturesustainmentofthebusinessandtheindustrialzonewhereitoperatesin.Substantialinvestments in its PCBs manufacturing plant wasmadefrom2008to2019 inmachinery, technologyandautomationandthiscontributedsignificantlytotechnicaladvancementandcapabilitiesofthelocalmanufacturingfraternity.Asseenintheactions,oneofthecommitmentstowards society is to contribute as much as possibletowards buildingPenang as amarket place renownedfortalentandsuperiortechnologyproducts.
TheGroup’smanufacturingplantinChina,GUHCircuitIndustry(SZ)Co.,Ltd.(“GUHSZ”),isalsocommittedtoupholding theGUHcorporatemissionofbenefiting the
communityitoperates.Withover20years’experienceinthedynamicelectronicsindustry,GUHSZisreputedtobeoneofthetrustedPCBmanufacturersinthemarketwith the stability of management and operation. GUHSZ is fullyutilizing itsexistingandnewly-addedassetsto continue functioning profitability. GUH SZ aims forlong-termprofitabilitybyadoptingandimplementingthevisionarystrategy, fullyutilizing theavailable resourcesand the enormous support received from the seniorManagement team. Besides, GUH SZ is focusing onniche products, such as medical, home appliances,electroniccomponents,officeequipmentandautomotiverelatedproductswhicharecompetitiveinthemarketandbyprovidinga“One-StopSolution”businesstocustomerswith various types of PCBs. The development andapplication of 5G communication, electronic vehicles,intelligentequipment,roboticproductsandsoforthhasbecomemoreandmoreextensivewhichmayleadtotheexpandingdemandofPCBsandGUHSZisexpectedtoinvolveandgainsomemarketshare.
BothmanufacturingcompaniespledgeitsfullcommitmenttothefourimportantbusinesssustainabilityprinciplesofCustomerSatisfaction,BestProductQuality,SustainableSupplyandManufacturingandResponsibleProcurementwiththefundamentalcommitmentthatconductbusinessthrough the embrace of ensuring the environment isprotected and not harmed, that business is conductedwithoutbreachofrulesandlawsandthatthesafetyandwellbeingofthepeopleissafeguarded.
OtherDivisionsthoughsmallerinoperations,theprincipleofhiringisofthesamepracticei.e.fromlocalcommunityto support domestic workforce so that not dependentontheforeignworkers.GUHbelievessustainablelocalworkforce can bring positive contribution in humanresourcemanagementandlowerunemploymentrateinthecountry.
Care for the Workplace
Enshrined as its second mission of the Companyis “maximizing the interest for its employees”. GUHacknowledges that without the full commitment of itsemployees, it is not possible to advance further in themodernworld.GUHunderstandsthatpeoplearesocialbeingsandgoodhumanrelationshipsmatterstobringoutthebestresultsinperformances.FullheartedsupportbyManagementandits leadersisvitaldriverofemployeeengagementandwithtrainingsformanagerstoenhancetheirabilities.GUHinsistsmanagersprovidethesupportneeded to do one’s job right the first time and foremployeestotakeprideinhavingajobwelldoneasanencouragementtogotheextramile.GUHendeavourstobuildacaringworkplaceenvironmentofunderstanding,
empathy, community, teamworkandsupport tonurturepositiverelationshipsandinreturntonurtureaninternalentrepreneur and innovative spirit. In order to achievethis, GUH endeavours to provide conducive workingenvironment,provide training,developmentandcareeradvancement opportunities and to reward excellentemployees. Annual motivational programmes arestructuredintothethreedomainsof:
i. Socialandteambuildingevents,ii. Training,developmentandcareeradvancement,iii. Improvementstotheworkplacewiththeobjectiveof
creatingaconduciveenvironment.
GUH Holdings BerhadAnnual Report 2019 31GUH Holdings BerhadAnnual Report 2019 31
SUSTAINABILITYSTATEMENT
i. Social and Team Building Events:
In order to get its people to embrace the vision andmission, theGrouporganisessocialand teambuildingevents to “soft sell” the spirit of belonging.TheGrouporganised indoor and outdoor activities such asbowling, yoga classes, futsal, badminton, fun ride andteam building to reinforce team spirit in the company.Promoting teamwork and adding festive cheers in theoffice,seasonalfestivelunchgatheringsarealsobeingorganized. TheManagement, Executive andTechnicalTeam look forward to theNewYeargatheringwith theCEO/Group Managing Director as a highlight of thesocialevents.
ii. Training, Development and Career Advancement:
GUH Group aims to recruit people from diversebackgrounds as well as to build a gender balancedorganization in the quest of equal opportunities. TheGroup isconstantlyon the lookout forpotentialpeopletobepromoted internallyandwithasystematic reviewprocedure that recognises people performances andrewards accordingly. Nevertheless, GUH regardstraining as a priority of growth and knowledge driverto the Group and its continuous training programmesapply to forall itsemployeeswithin theGroup.ProperandplannedscheduledtrainingsarecarriedoutacrossbothManagementandOperationalleveltokeepupwiththe latest technologyandmanagementadvancements.Trainingprogrammesarestructuredsuchthatitincludestechnical as well as leadership development aspectsfromtheGAPanalysisandtailoredwiththeconceptofnurturingtalentforthecompany’ssustainability.
TrainingprogrammesresultsofGUHPG:
External Training (inclusive of in-house training conducted by External Trainers):
Training participants covered the scope of Managers,Executives, Engineers, Supervisors, Technicians andSupportStaff.Actual traininghoursrecordedwas2888hours against theTrainingNeedsAnalysis (TNA) planof3000hourswithaneffectiveattendanceachievementof 96.2%. The training sessions conducted coveredManagement Excellence Practice, Leadership Skills,EfficientEnergyManagement,PlantSafetyImperatives,Environment Protection Imperatives, Purchasing andSupplierManagementTowardsWin-Win,ManufacturingBest Practices, Poka-Yokes, Total ProductiveMaintenance(TPM)MeasurementandCalibration,IATFinternalAuditorsTraining,ProactiveQualityImprovementandTotalQualityManagement.
Internal Training (conducted by Engineers and Managers):
Trainingparticipantscoveredthefactory’soperationsandproductionemployees.Theactualtraininghoursrecordedwas 5520 hours against the Training Needs Analysis(TNA)planof5800hourswithaneffectiveattendanceachievement of 95.2%. The training sessions coveredPCB Process Knowledge, Understanding StandardOperationProcedures,HowtoReadWeight,Pressure,Length,LightSpectrum,Temperature,Humidity,ControlPlansandCriticalParameters,AndonsandPoka-yokes,SimpleCalculations,QualityImperatives,DisciplineandHealth.
Training Conducted by Consultant from Japan:
TrainingparticipantscoveredallEngineersandTechnicalemployees.Theactualtraininghoursrecordedwas2000hours against theTrainingNeedsAnalysis (TNA) planof 2000 hours with an effective attendance recordedas 100%. The training covered critical PCB ProcessAreas,CorrectHandlingMethods,DustControl,ProcessParametersControl andAnalysisMethodology, FailureMode and Effect Analysis, Material Characteristics,Chemical Characteristics, Electro-Plating Inter-
GUH Holdings BerhadAnnual Report 201932 GUH Holdings BerhadAnnual Report 201932
SUSTAINABILITYSTATEMENT
by the newly upgraded waste water systems beforebeing discharged. The reports from external certifiedbodymonitoringthedischargesshowedgoodandstableperformance in2019.Bothof theplants’performanceson environment management is reviewed daily bytop management and also ensures a professionalenvironment management team is in place to ensurestrict compliance to the environment regulations.Allemployees in themanufacturing plant are educated toparticipate in the environment monitoring process byreporting any unusual sight to their superior.GUHPGis certified to ISO14001 since year 2004 which is theplatformforenvironmentalprotection,managementandreview.
GUHSZwasgrantedwiththeCertificateforEnvironmentManagement System (ISO14001:2004) on 18 March2019 by Certification and Accreditation Administrativeas ithas inplaceasoundenvironmentalmanagementsystem.Thedivisionwasfurtherawardedwithpollutantsdischarge permit on 20November 2019 issuedby theEnvironmentalProtectionBureauofSuzhouNewDistrictandmonitoredbyMinistryofEnvironmentalProtection,China.GUHSZwillcontinuouslyprovidetheappropriatetrainingandinformationtoitsemployeestoaidthemincomplying with the various legal requirements. Otherthan in-house training provided, the employees are
Care for the Environment
Correlations, Quality Control, Ishikawa Methodology,PrecisionandDensePCBRequirementsandMulti-LayerPCBDesignTrends.
iii. Conducive Working Environment:
TheGroupunderstandsthatitsemployeesspendmostoftheirtimeatworkandhencecreatesafeelingofhomeforthemisimportantforbusinesssustainabilitywhichisinlinewiththetopdrivenphilosophythat“EmployeesAretheBestAssets”.Effortstowardscreatingthisambienceincludeasubsidizedcanteenandacomfortablepantryin the office equipped with essential facilities. Otheramenities include air-conditioned prayer rooms forMuslims,propernursingroom,restareawithcoffeeandcanneddrinksvendingmachineswithsubsidizedprices,contractwith a bank to place anATM in the premisesandashelteredandsecuredmotorcycleparkingbay.Asapriorityproject in2020,GUHwill furtherupgrade thecanteentoarestaurantclassenvironment.Chinaplantemployees enjoy fully subsidized canteen, free mealsandlodgingsincompanyhostels.EveryeffortisplacedbyGUHSZinschedulingproductionruntimetoensureworkers can return home for long holidays during theChineseNewYearseason.TheGroup iscommitted tobuilding an environment of happiness, understanding
and a community feeling that supports and nurturespositiverelationships.
Genderequalityintheworkplaceisoftenpracticedandthere is no racial bias in employment or recruitmentwithin the group. All Divisions have fair and equaltreatmentpoliciesfortheemployeesirrespectiveofraceand gender. Opportunity is given to all employees astrainingprogrammesareprovidedforthemtolearnanddevelopnewandvaluableskills.AllDivisionsprovidefair,inclusiveandsafeworkplacetosupport theemployeesfor theenhancementofworkingperformance.Besides,exceptionalrewardsincludingcompetitivesalary,careeradvancementandcontinuous learningaregiven to theentireworkforceoftheGroup.
In order to have a proper system and task orientedapproachtoenergyefficiency,afulltimeEnergyManagercertified by Suruhanjaya Tenaga to implement energysavingprojectsaspartofitseffortsandresponsibilityinreducing carbon footprint is recruited in the ElectronicDivision of Penang. Noteworthy projects recordedinclude formal training operation employees to detectairleaksandreduceaircompressorruntimereduction,redesign constant runningmachines to detect work inprogressandprogrammesrun-stopsystems,modifyinganalogcontrolledaircompressorstoinvertertechnology,control office air conditioners to a comfortable 24oClevel,commissioningthenewERPsystemforaccurateschedulingandproductionefficiencytoeliminatewasteand idle time. GUH PG reported significant electricityand water usage savings against its output in metersquares.
BothGUHPG andGUHSZ are certified to the latestenvironmental management system and all airdischarges are cleansed with gas scrubbers equippedwithwatersprayscontainingneutralizerchemicalsbeforedischarging. The air scrubbers are in turn monitoredby an external certified body.Air scrubbers performedwell in accordance to the CleanAir Regulations 1978with recorded results thatarebetter than thespecifiedpassingstandard.Waterdischargeswhicharecleansed
GUH Holdings BerhadAnnual Report 2019 33
Care for the Community
GUHbelievesthatcaringforthecommunityisaprinciplethateveryresponsibleorganisationshouldhaveandthatcontinualeducationofitspeopleinallaspectsisstillthebestwaytospreadthecultureofcaring.GUHupholdsthecommitment thateverystaff ithirescontributesnotonlysustenancetotheirimmediatefamilybutalsocarrieshometherightcultureofdiligenceanddeterminationtosucceedandthatthisgoodmindsetisbeingproliferatedintosociety.TheGroup’strainingprogrammesistailoredon technical and knowledge aspect as well as themotivationaspect.GUHGroupproudlyacclaims in theloyaltyindexthatmanyofitsstaffhasbeenworkingwiththeGroupformorethan20yearsandthusisevidentialtotheprinciplethat“PeoplearetheBestAssets”.GUH
Grouptakesprideonbeingabletoidentify,train,motivateand create leaders from the high performance groupand also able to motivate and transform people fromlackadaisical tobeingexcellentperformers.TheGroupmaintainsanexemplarytrackrecordofpayingincentivesand bonus based on company, team and individualperformances. GUH continues to hire fresh graduatesaspart of its commitment towards society and to trainand grow local talent.The Group practices a properperformancereviewsystemforitsstaffinordertorewardpeoplewhohavecontributed tocompanyperformanceandforwardbusinesssustainability.
GUH is committed to continue its contributions andsponsorships towards community through financialassistance to various organizations, schools, NGOs,religious organizations, dialysis centers, associationsand individuals invariousstatesofMalaysia.GUHwillunceasingly do its part to contribute to society as itbelievesgivingbackisamongstthemostimportantandvaluableactanorganizationcando.
SUSTAINABILITYSTATEMENT
activelyattendingthetrainingprogrammesorganizedbytheEnvironmentalProtectionBureauonaregularbasis.
Beyondthat,themanagementteamofGUHSZhasputineffort to reduce theusageofelectricityandwater inorder tominimize the release ofwaste carbon dioxideinto theairandsafeguard thenatural resourcesof theearth. Various action plans are being implemented tofurther control the usage of utilities such as shuttingdownunnecessarymachinesduringoff-peakproduction,controltheusageofair-conditionerduringthespringandautumnseasonandwaterconsumptionondailybasis.All water valves, piping and relevant water equipmentarecheckedonaweeklybasistoensuregoodrunningconditionandnoleakageoccurs.
Occupational health and safety is another priorityaspect of the Group. Both manufacturing plants havemandatory Personal Protective Equipment regulationsandcompulsorytrainingofusagetoprotecttheworkers.TheassuranceofpeopleadheringtothePPEandSafetyRulesisdrivenbyinternalroadshows,trainingandstrictdisciplinarymeasurestaken.GUHPGhasapermanentERTTeamconsistingofvolunteersfromeachandeverydepartment who undergo training and retraining byBomba and Penyelamat department periodically. The
ElectronicDivisionofPenangstagesplantwideinternalevacuation and fire drill twice a year togetherwith thesame government body. The other divisions, namelyProperties and Plantations are provided and equippedwith safety tools and equipment. Apart from the 3Rpracticeof reduce, reuseand recycle, openburning isprohibitedintheGroupandallDivisionscomplystrictlywith this policy. On 11 February 2020, GUH SZ wasgranted with “Work Safety Standardization” certificateissued by the StateAdministration of Work Safety asthe division passed the health and safety examinationfromtherelevantauthorities.Thisdivisionwillcontinueto enhance the health and safety in the workplace inorder to safeguard thewelfare of its stakeholders andimplementing further preventive measures which arebeyondtherequirementsstatedbylaw.
TheGroupstrivestoachievezerorateoflost-worktimeinjuries and has established “zero serious accident”targetforthefinancialyearunderreview.TheGroupispleasedtorecordzerofatalityandzeroseriousaccidentsfrom its business operations as well as Zero burningpolicy being practiced at project site and at plantationfarming in order to achieve zero emissions.Corporatepoliciesarereviewedandchangedifrequiredtobenefittheenvironment.
GUH Holdings BerhadAnnual Report 201934
CORPORATEGOVERNANCEOVERVIEWSTATEMENT
TheBoardofDirectors (“theBoard”)ofGUHHoldingsBerhad (“GUH”or “theCompany”) iscommitted toembraceandpursueastrategyofbestpracticeofcorporategovernance inorder toexcelandcreatesharedvalue forall itsstakeholders. The Board firmly believes that excellence in corporate governance remains the commitment of theCompanyanditssubsidiaries(“Group”).ItisimportantfortheGrouptostrictlycomplyandadheretogoodcorporategovernancesuchasintegrity,transparency;accountabilityandresponsiblebusinessconduct,asthebasisofhowtodobusinesssoastobuildasustainablefuturethatbringinpositivebenefitsforvaluecreation.
The Board is pleased to present this Corporate GovernanceOverview Statement for the financial year ended 31December2019thatsummarizedtheoverviewapplicationandcorporategovernancepracticeswithreferencetothethree(3)principlesassetoutintheMalaysianCodeonCorporateGovernance(MCCG)underthestewardshipoftheBoard:
(1)PrincipleA:BoardLeadershipandEffectiveness;(2)PrincipleB:EffectiveAuditandRiskManagement;(3)PrincipleC:IntegrityinCorporateReportingandMeaningfulRelationshipwithStakeholders. TheCorporateGovernanceOverviewStatementshouldberead in tandemwith theotherStatements in theAnnualReport2019,i.e.theSustainabilityStatement,StatementonRiskManagementandInternalControlandAuditCommitteeReport.ItisalsoaugmentedwithaCorporateGovernanceReportoftheCompanywhichispublishedontheCompany’swebsiteatwww.guh.com.my;basedonaprescribed formatasspecified inParagraph15.25(2)of theMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(ListingRequirements)soastoprovidedetailedinformationontheapplicationoftheGroup’scorporategovernancepracticeswithregardtoMCCG.
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS
BOARD’S ROLES AND RESPONSIBILITIES
TheCompanyisheadedbyaBoard,whichassumesresponsibility for theCompany’s leadershipandiscollectivelyresponsibleformeetingtheobjectivesandgoalsoftheCompanyandtheGroup.TheBoardconsistsofnine(9)membersofwhomaretheExecutiveChairman,theChiefExecutiveOfficer/GroupManagingDirector(“CEO/GroupMD”),two(2)Non-ExecutiveDirectorsandfive(5)IndependentNon-ExecutiveDirectors.
TheBoardensuresthatalltheDirectorsareawareoftheirrolesandresponsibilitiesasoutlinedbytheBoardCharterwhichalsoservesasasourceofreferencetoallstakeholders.
TheBoardCharterformsanintegralpartoftheDirectorsdutiesandresponsibilitiesandalsoservesasasourceofreferencefortheBoardmemberstoactonbehalfoftheCompanytoensurethattheDirectorsconductinthemannerthattheprinciplesandpracticesofgoodcorporategovernanceareapplied.
TheBoardCharterisreviewedannuallywithitslatestupdatebeingmadeinNovember2019.
ThedetailsoftheBoardCharterareavailableforreferenceatwww.guh.com.my.
BoardCharterclearlydefinestheresponsibilitiesanddutiesoftheBoard.
TheBoard not only sets the strategic direction but also oversees the business conduct to ensure theGroup is incompliancewithrulesandregulations,lawsandrequirementsandupholdingofethicalvalues.
OverviewoftheRolesontheBoardisasfollows:
Role Key ResponsibilitiesExecutive ChairmanTanSriDato’SeriH’ngBokSan
TheExecutiveChairmanoftheBoardistoprovideleadershipsothattheBoardcanperformitsresponsibilitiesefficientlyandtopresideovermeetingsofDirectorsandensuretheBoardacceptsfullshareofresponsibilitiesofgovernance.
CEO/Group MDDatukSeriKennethH’ngBakTee
The CEO/Group MD assumes overall responsibilities for the execution ofthe Group’s strategies in line with the Board’s direction, oversees day to dayoperations of the Group and drives the Group’s businesses and performancetowardsachievingthevisionandgoalssetbytheBoard.
GUH Holdings BerhadAnnual Report 2019 35
CORPORATEGOVERNANCEOVERVIEWSTATEMENT
Senior Independent Non-Executive DirectorMr.ChewHockLin
TheSenior IndependentNon-ExecutiveDirector acts as a point of contact forshareholdersandotherstakeholderstowhomqueriesorconcernsrelatingtotheGroupmaybeconveyed,healsoactsasasoundingBoardfortheChairmanandanintermediaryforotherDirectorswhennecessary.
Non-Executive Directors Non-ExecutiveDirectors(bothIndependentandNon-Independent)neitherinvolveindaytodayoperationsnorparticipatedirectlyinthebusinessdealings.Instead,theymonitorandsuperviseManagement’sconductinrunningthebusinesswhilebringing theirexternalperspectiveandwisdomtobearon thedecisionmakingprocess.
AllDirectorsshouldobjectivelydischargetheirdutiesandresponsibilitiesatalltimestoupholdthebestinterestoftheCompany.EveryDirectorismindfulofitsownresponsibilityasaDirectorandoftheconduct,businessactivitiesanddevelopmentoftheCompany.Indischargingitsresponsibilities,theBoardisalwaysmindfultoactingoodfaithandtransparentandexercisetheirbasicdutiesofgoodmanagementtoensuretheGroupiscommittedtoacultureofhighcorporatecomplianceandhighethicalbehavior.Asthehigheststandardofintegrityisexpectedfromallofitsemployees,includingtheManagementuptotheBoardlevel,theGrouptakesaseriousviewonanymisconductbyitsemployees,ManagementandDirectors,inparticularwithrespecttotheirobligationstotheGroup’sinterests.IncontinuepursuingexcellenceincorporategovernancewithintheGroup,theCompanyhasinternaldocumentssuchasCodeofEthicsandCodeofConducttobemadeavailableandhavebeenpublishedontheCompany’swebsiteatwww.guh.com.my.ThecodeservesasadocumentationwhichismeanttobeareferencepointfortheDirectors,ManagementandemployeesoftheGrouptoenhancethestandardofcorporategovernanceandindividualbehaviorindoingbusinessinamannerthatisefficient,ethicalandfair.
TheBoard iscognizantof the importanceofwhistleblowingsystem.Therefore,whistleblowingchannelshavebeenestablishedtohelpstakeholdersraiseconcerns,withoutfearofretaliation,onanywrongdoingthattheymayobserveintheCompany.TheWhistleblowingPolicyandProceduresoftheCompanyhavebeensetupandshallbeapplicabletoallemployeesofGUH,whichincludeitslocalandoverseaswholly-ownedsubsidiariesandsub-subsidiaries.TheBoardfirmlyacknowledgesthatawhistleblowingsystemmaystrengthenandsupportgoodmanagementandinthemeantimedemonstratesaccountability,providesgoodriskmanagementaswellassoundcorporategovernancepractices.
TheBoardcomprisesamajorityof IndependentDirectors.Though theChairman isnotaNon-ExecutiveDirector, itisof theBoard’sopinion that theExecutiveChairman is thesingle largest shareholderand there is theadvantageofshareholder leadershipandanaturalalignmentof interest. Inaddition, theExecutiveChairman is the founderoftheGroupwithextensiveknowledgeandexperienceandhe iscompetent to lead theGroup towardsachieving thehighestlevelofinteresttotheCompanyandallitsstakeholders.Inrespectofpotentialconflictsofinterest,theBoardiscomfortablethatthereisnoundueriskinvolvedasallrelatedpartytransactionsaredisclosedandstrictlydealtwithinaccordancewiththeListingRequirements.TheBoardisalwaysmindfulofthepotentialconflictofinterestthatmayariseineachtransaction,inwhichcase,interestedDirectorsareabstainedfromdecisionmaking.
TheBoard is responsible for thecorporategovernancepracticesgoverns theaffairsof theGrouponbehalf of theshareholdersandretainsfullandeffectivecontrolovertheGroup.
Inexecutionofitsdutiesandresponsibilities,theBoardisassistedbyvariousCommittees.Four(4)BoardCommitteeshavebeenestablishedtoassisttheBoardinthedischargeofitsstatutoryandfiduciaryresponsibilities.EachCommitteehasitsownfunctionsandtermsofreferencewhichhavebeenclearlydefinedbytheBoard.ThetermsofreferenceofalltheBoardCommitteesarereviewedandupdatedregularlytoensurethelatestrequirementsoftheMCCGandListingRequirementsareincorporated.EachCommitteereportsitsrecommendationsanddecisionstotheBoardforapproval.
OverviewoftheroleofeachCommitteeisasfollows:
Board Committee RoleAudit Committee OverseestheCompany’sfinancialreportingprocessandpracticeandreviewsthe
resultsofinternalandexternalauditactivitiesandtoensurecompliancewithallapplicableaccountingstandardsandanyotherrelevantregulatoryauthorities.
Refer Audit Committee Report on pages 49 to 52 for more details on key activities.
GUH Holdings BerhadAnnual Report 201936
Risk Management & Sustainability Committee
Identifies, evaluates and manages the significant risks associated to currentbusiness,anynewinvestmentand/ordivestmentandcontrolresponsibilitieswithappropriateactionplanandensurestheimplementationofappropriatesystemstomanagetheoverallriskexposureoftheGroup.
Fromtheperspectiveofsustainability,identifyandmanagenon-financialissues,greaterattentionwillbegiventohowbusinessesimpacttheeconomy,environmentandsocialrisksandopportunitiesalongsidefinancialimplication.
Refer Statement on Risk Management and Internal Control on pages 46 to 48 for more details.
Nomination Committee Reviews annually the required mix of skills, experience and other qualitiesincludingcorecompetenciesofindividualDirector,evaluatestheassessmentofeffectivenessoftheBoardasawhole,andalsoallotherCommitteesappointedbytheBoard.
Remuneration Committee ReviewsremunerationofExecutiveDirectors.
TheCompanyhastwo(2)suitablyqualifiedCompanySecretariestodischargetheirdutiesandresponsibilitiesandassisttheBoardindrawingupandcirculatingtheagendaandnoticeofmeetingstogetherwiththesupportingdocumentationtotheCommitteemembers.TheCompanySecretaryshallalsoberesponsibletorecord,maintainandcirculatetheminutesofthemeetingsoftheBoardCommitteestoallothermembersoftheBoard.TheCompanySecretarieshadandwillcontinuetoconstantlykeepthemselvesabreastonmattersconcerningcompanylaw,thecapitalmarket,corporategovernanceandotherrelevantmatters;andwithchangesintheregulatoryenvironmentthroughcontinuoustrainingandindustryupdates.
ThereisacleardivisionofresponsibilitiesbetweentheExecutiveChairmanandtheCEO/GroupMD.ThedistinctionofthetwopositionsintheCompanypromotesaccountabilityandfacilitatesdivisionofresponsibilitiessothatManagementdecisionsaremadeinordertoensureindependence.ThedivisionofresponsibilitiesissetoutintheCompany’sBoardCharter.
TanSriDato’SeriH’ngBokSan,theExecutiveChairmanisprimarilyresponsibleforrunningtheBoardandensuresthattheBoardacceptsfullshareofresponsibilitiesofgovernance.Heisalsoresponsiblefortheintegrityandeffectivenessof the relationshipbetween the Independentand theNon-IndependentDirectors.BoardCharterclearlydefines theresponsibilitiesoftheExecutiveChairman.
Duringthefinancialyearended2019,TanSriDato’SeriH’ngBokSanhad:
• Provided leadership to the Boardwithout limiting the principle of collective responsibility formaking the Board’sdecision;
• ChairedandledalltheBoardmeetingsandencouragedactiveparticipationinthediscussions;• ReviewedtheminutesoftheBoardmeetings.
DatukSeriKennethH’ngBakTee,theCEO/GroupMDisresponsibleforthedaytodayoperationsoftheGroup.Inaddition,hisresponsibilitiesincludeamongothers,reporting,clarifyingandcommunicatingmattersrelatingtothedailyoperationstotheBoardandtoensurethebusiness;policiesandstrategiesformulatedbytheBoardareimplementedeffectivelywith theassistance from theManagement team.BoardCharterclearlydefines the responsibilitiesof theCEO/GroupMD.
Thepresenceof IndependentDirectorswhich comprisemajority of theBoardmembers is sufficient to provide thenecessarychecksandbalancesonthedecisionmakingprocessoftheBoard.TheydonotparticipateinthedaytodaymanagementoftheGroupanddonotengageinanybusinessdealingsorotherrelationshipwithintheGroup.TheypossessintegrityandextensiveexperiencetoprovideindependentandunbiasedviewsatBoard’sdeliberationsandfair judgment tosafeguardthe interestof theCompany,shareholdersandthestakeholders.TheBoardhasspecificfunctionsreservedfortheBoardandthosedelegatedtotheManagementoftheCompanytoensureaccountabilityisenhanced.
ThecompositionandsizeoftheBoardisreviewedfromtimetotimeandassessedannuallytoensureitsappropriatenessandeffectiveness.ThoughtheBoardbelievesthattenureshouldnotformpartoftheindependenceassessmentcriteria,theBoardpracticesandundertakesannualassessmentof its IndependentDirectorsbasedon theexperienceandpersonalqualitiesmoreparticularlyintegrityandobjectivityofeachindividualDirectortoensurethecurrentIndependentDirectorsareabletoexerciseindependentjudgmentsandactinthebestinterestoftheCompany.
CORPORATEGOVERNANCEOVERVIEWSTATEMENT
GUH Holdings BerhadAnnual Report 2019 37
InappreciatingthespiritofMCCGinordertoembraceandsupportastrongcorporategovernanceculturethroughouttheCompany,theBoardwillcontinuetoprovidejustificationandseekannualshareholders’approvalthroughatwo-tiervotingprocessforalltheIndependentDirectorswhohavecontinuedtoretainasIndependentDirectorsformorethantwelve(12)years.
NotwithstandingthelongtenureoftheIndependentDirectors,theBoardbelievesthatthelongtenuremaynoterodetheBoard’sobjectivesincealltheIndependentDirectorsareabletoexpresstheirviewsandquestiontheBoard’sdecision,debateconstructively,challengerigorouslyanddecidedispassionately.
Currently,theBoarddoesnothaveanyformalizedBoardDiversityPolicyorGenderDiversityPolicyintheselectionofnewBoardcandidates.Nevertheless, theBoard isawarethatwomen’sparticipation indecisionmakingpositionsshouldnot be focusedonBoardpositionsalone, but alsobebroadened to includewomen inSeniorManagementas the same benefits apply. Equal opportunity is given and does not practice discrimination of any form, whetherbasedonage,gender,raceandreligionthroughouttheGroup.TheBoardbelievesthatdiversity,whenextendedtoSeniorManagement,willalsoserveasatalentpipelineforBoardcandidacy.Therefore,womenrepresentationontheBoardandSeniorManagementwillbetakenintoconsiderationwhenvacanciesarise.TheBoardhasagoodmixofcommercial,technicalandgovernmentalexperiencerelevanttotheoperationsoftheGroup.Theseinclude,interalia,entrepreneurship, economics, finance, taxmanagement, accountancy,marketing, public administration and humanresourcemanagement.TheBoardwillevaluateandmatchthecriteriaofthepotentialcandidateaswellasconsideringtheBoardroomdiversityforanynewproposedappointmentofDirectorsoftheCompanyinthefuture.
Duringthefinancialyearended2019,theBoardhadconvenedatotaloffour(4)BoardmeetingsforthepurposeofdeliberatingontheCompany’squarterlyfinancialresultsanddiscussingotherstrategicandpertinentmatters.RelevantSeniorManagementwereinvitedtoattendtheBoardmeetingstoprovidetheBoardwiththeirviewsandclarificationsonissuesraisedontheoperationsandperformanceoftheGroupandotherstrategicissuesthatmayaffectitsbusiness.
MinutesofeachBoardmeetingarecirculatedtoeachDirectorpriortoconfirmationoftheminutesbytheExecutiveChairmaninthenextBoardmeeting.MinutesandresolutionspassedateachmeetingarekeptinthestatutoryregisterattheregisteredofficeoftheCompany.Thedailyoperationalmattersthatrequire immediateBoarddecisionwillbesoughtviaDirectors’circularresolutions,supportedbyfulldetailedinformation.TheBoardnormallyratifiesthecircularresolutionsatthesubsequentBoardmeeting.
AllDirectorsof theCompanyhave full access to informationconcerning theCompanyand theGroup.Prior to theBoardandBoardCommitteemeetings,aformalagendaasapprovedbyrespectiveChairmanof theBoardandtheCommittees togetherwith thepapers containing relevant information to theBoard/Committeesaredelivered to themembersfortheDirectorstobepreparedanddealwith ifanymatterarisingfromsuchmeetingsandtoenabletheBoardandtheBoardCommitteestomakedecisions.Theynormallyreceivetheinformationandmeetingpapersoneweekbeforethescheduledmeetings.TheDirectorswouldalsoseektheadviceandservicesoftheSeniorManagementorengageotherexternalconsultants/independentprofessionalsinthedischargeoftheirdutiesandtoclearanydoubtorconcern,ifdeemednecessary.
TheBoardhadcarriedoutthefollowingactivities:
• ReviewedtheCompany’sperformancein2019andthebusinessoutlookfor2020;• SupervisedandassessedManagement’sperformance;• Receivedreportsonanyrelatedpartytransaction(s)anddeclarationofinterestbyDirectors;• ApprovedtheDirectors’ReportandAuditedFinancialStatementforthefinancialyearended31December2018;• ApprovedAnnualReport2018;• ApprovedtheStatementinrelationtoProposedRenewalofShareBuyBack;• ApprovedthedraftCirculartoShareholdersinrelationtoProposedRenewalofRecurrentRelatedPartyTransactionsofrevenueortradingnature;
• Reviewedandapprovedquarterlyresultsfor2019andannouncements;• ReviewedthequarterlyreportsfromtheCEO/GroupMDontheprogressofallbusinessdivisionsandanysignificantchangeinthebusinessandtheexternalenvironment,whichaffectedtheoperations;
• Approvedtheannualbudgetandcapitalexpenditurebudget;• ReviewedtheCompany’sstrategiesandplans;• Proposedthere-appointmentofGroup’sExternalAuditorsandensuredthattheExternalAuditorsmeetthecriteriaprovidedbytheListingRequirements;
• ApprovedthereportsoftheAuditCommittee,NominationCommittee,RemunerationCommitteeandRiskManagement&SustainabilityCommittee;
• ReviewedtheriskmanagementframeworkofGUH;• ReviewedthesuccessionplanningfortheGroup’scontinuityinleadershipforallkeypositions;and• NotedtheupdatesandanyamendmentsmadetotheListingRequirements,lawsandregulations.
CORPORATEGOVERNANCEOVERVIEWSTATEMENT
GUH Holdings BerhadAnnual Report 201938
TheattendancerecordofeachmemberoftheBoardduringthefinancialyearended2019issetoutbelow:Board of Directors Feb May Aug Nov TotalTanSriDato’SeriH’ngBokSanExecutiveChairman • • • • 4/4
DatukSeriKennethH’ngBakTeeCEO/GroupManagingDirector • • • • 4/4
Dato’HarryH’ngBakSeahNon-ExecutiveDirector • • • • 4/4
DatinJessicaH’ngHsiehLingNon-ExecutiveDirector • • • • 4/4
Mr.ChewHockLinSeniorIndependentNon-ExecutiveDirector • • • • 4/4
Dato’IsmailBinHamzahIndependentNon-ExecutiveDirector • • • • 4/4
Dato’LaiChangHunIndependentNon-ExecutiveDirector • • • • 4/4
En.WIsmailBinWNikIndependentNon-ExecutiveDirector • • • • 4/4
Dato’Dr.GanKongMengIndependentNon-ExecutiveDirector • • x • 3/4
InorderfortheGrouptoremaincompetitive,theBoardensuresthatalltheDirectorscontinuouslyenhancetheirskillsandknowledgetokeepabreastwiththedevelopmentofnewregulationsandcompliance.TheCompanySecretaryalsoreceivesregularupdatesontrainingprogrammesfromvariousorganizations.ThesearecirculatedtotheDirectorsfortheirconsiderationtoattend.DirectorswillbeinformedandupdatedonkeycorporategovernancedevelopmentsandsalientchangestotheListingRequirements,lawsandregulations.TheExternalAuditorsalsobrieftheAuditCommitteeonanychangestotheMalaysianFinancialReportingStandardsthataffecttheGroup’sfinancialstatements.
ThesummaryofcoursesandtrainingattendedbyrespectiveDirectorsoftheCompanyduringthefinancialyearended31December2019aresetoutasfollows:Tan Sri Dato’ Seri H’ng Bok San • AllowedfinancialassistanceandbenefitstoDirectorsandraisingthestandardsonDisclosure• CorporateLiabilityUpdatesDatuk Seri Kenneth H’ng Bak Tee• FinancialPlanningasEffectiveMarketingTools• MyMoney&Me(FinancialLiteracyWorkshop)• CorporateRescue:CorporateVoluntaryArrangements&JudicialManagement• CompaniesAct2016• PreparingforCorporateLiabilityinMalaysiaandhowethicsmakesbusinesssustainable• CorporateLiabilityUpdatesDato’ Harry H’ng Bak Seah• AllowedfinancialassistanceandbenefitstoDirectorsandraisingthestandardsonDisclosure• CorporateLiabilityUpdatesDatin Jessica H’ng Hsieh Ling• AllowedfinancialassistanceandbenefitstoDirectorsandraisingthestandardsonDisclosure• CorporateLiabilityUpdatesMr. Chew Hock Lin • FreshPerspectives:EngineeringthefutureoftheMalaysianBond&Sukukmarket• PreparationforCorporateLiabilityonCorruptionunderMACCActSection17A• CorporateLiabilityUpdatesDato’ Ismail Bin Hamzah• PowerofDirectors• CorporateLiabilityUpdatesDato’ Lai Chang Hun • AllowedfinancialassistanceandbenefitstoDirectorsandraisingthestandardsonDisclosure• CorporateLiabilityUpdatesEn. W Ismail Bin W Nik• CorporateLiabilityProvisionundertheMACCAct:MitigatinganewriskforyourCompany• CorporateLiabilityUpdatesDato’ Dr. Gan Kong Meng• AdaptiveLeadership• TheRoleofAuditCommitteeinensuringorganizationalintegrity,riskandgovernance• CorporateLiabilityProvision–MalaysianAnti-CorruptionCommissionAmendment• NavigatingCorporateLiability• CorporateLiabilityUpdates
CORPORATEGOVERNANCEOVERVIEWSTATEMENT
GUH Holdings BerhadAnnual Report 2019 39
NOMINATION COMMITTEE
AsrecommendedbyMCCG,theNominationCommitteeofGUHcurrentlyconsistsexclusivelyofIndependentNon-ExecutiveDirectors,withtheresponsibilitiesofassessingthebalancecompositionoftheBoardmembers,nominateanyproposedBoardmember(s)bylookingintohisskillsandexpertiseforthecontributiontotheCompany.
ThepresentmembersoftheCommitteeare:
Dato’IsmailBinHamzah–Chairman Independent Non-Executive DirectorMr.ChewHockLin–Member Independent Non-Executive DirectorDato’LaiChangHun–Member Independent Non-Executive Director
PursuanttoMCCG,theChairoftheNominationCommitteeshouldbetheseniorindependentdirectoridentifiedbytheBoard.TheBoardisoftheviewthatDato’IsmailBinHamzahhasconsiderableexperienceviahiskeypositionheldinhisprofessioninthepastandhehasbeenholdingthepositionofdirectorinmanyotherpubliclistedcompaniesandheisthereforeconsideredseniorandcompetenttobetheChairmanoftheNominationCommitteeoftheCompany.
The Board has stipulated theTerms of Reference for theNominationCommittee and the details are available forreferenceatwww.guh.com.my.
Summary of activities undertaken by the Nomination Committee
ThesummaryofactivitiesundertakenbytheNominationCommitteeduringthefinancialyearended31December2019includedthefollowing:
• ReviewedandconfirmedtheminutesoftheNominationCommitteemeetingheld;• AssessedtheeffectivenessoftheBoardasawhole;• ReviewedtheeffectivenessoftheBoardCommittees;• ReviewedthecontributionandperformanceofindividualDirector;• ReviewedthelevelofindependenceoftheIndependentDirectorsandassessedtheirabilitytobringindependentandobjectivejudgmenttoBoard’sdeliberation;
• RecommendedontheretentionofIndependentDirectorswhohaveservedtheCompanyformorethannineyears,andrecommendedthetwo-tiervotingprocessfortheIndependentDirectorswhohaveservedformorethantwelveyears;
• Recommendedonthere-electionoftheDirectorspursuanttotheConstitutionoftheCompany;and• ReviewedandrecommendedtheTermsofReferenceoftheNominationCommitteetotheBoardforapproval.
Evaluation for Board, Board Committees and individual Director
The Nomination Committee conducted annual assessment of the performance of the Board as a whole, BoardCommitteesandindividualDirectorsbasedontheDirectorspeerevaluationapproach.Thecriteriausedinevaluatingtheperformanceofindividual,includingtheircontributiontointeraction,integrity,competencyandtimecommitmentofthemembersoftheBoardaswellastheBoardCommitteesindischargingtheirduties,areinasetofquestionnaires.
Forthefinancialyearended31December2019,theNominationCommitteecarriedoutapeerevaluation,thenameoftheDirectorcompletingthequestionnaireshasbeenleftanonymousasitisbelievedthattheanonymitywouldachieveanhonestgeneralconsensus.Basedon theassessmentconducted, theBoardand theNominationCommitteearesatisfiedwiththecurrentsize,compositionaswellasthemixofqualifications,skillsandexpertiseamongtheBoardandtheBoardCommitteemembers.Fromtheresultsoftheevaluation,includingthemixofskillsandexperiencepossessedbytheDirectors,nonewmemberhasbeenproposedandtheBoardwillrecommendthere-electionandre-appointmentoftheexistingDirectorsattheforthcomingAnnualGeneralMeeting.
CORPORATEGOVERNANCEOVERVIEWSTATEMENT
GUH Holdings BerhadAnnual Report 201940
Process of nomination and election/re-election
Theprocess for thenominationandelection/re-electionof theNon-ExecutiveDirector (both IndependentandNon-Independent)isasfollows:
CompanySecretarygivesNominationCommitteeacopyofthemembershiplist,descriptionofdutiesand
responsibilitiesetc.
NominationCommitteerecommendstothe
Boardforappointment/re-appointment
CompanySecretarycompilesalltheevaluation
formswhichareleftanonymousandsubmittotheNominationCommittee(Each individual Director
will abstain from evaluating his/her own performance)
NominationCommitteeevaluatesandmatchesthecriteriaofeachnominee(ifany)/
existingmembersandwillconsiderdiversity,includinggender,where
applicable
NominationCommitteereviewsandoverseestheconductofannualassessmentsand
evaluation
NominationCommittee
determinestherequiredskillsand
quality
Re-election of Directors
TheConstitutionoftheCompanyprovidesthatanelectionofDirectorsshalltakeplaceeachyear.AllDirectorsshallretirefromofficeonceatleastineachthreeyears.AretiringDirectorshallbeeligibleforre-election.
UpontherecommendationoftheNominationCommitteeandtheBoard,noelectionofnewDirectorhasbeenproposed.TheDirectorswhoshallretireonceatleastineachthreeyearsandarestandingforre-electionandre-appointmentattheforthcomingAnnualGeneralMeetingoftheCompanytobeheldin2020areasstatedintheNoticeofAnnualGeneralMeeting.
Annual Assessment of Independence
ThepolicyonthetenureofIndependentDirectorisnineyearsunlessre-designatedasNon-IndependentDirector.TheretentionofIndependentDirectorwhoservesmorethannineyearsshallbeconfirmedannuallybytheshareholdersandthoseservedmorethantwelveyearsshallbeapprovedbytheshareholdersannuallyattheAnnualGeneralMeetingviaatwo-tiervotingprocess.
Basedontheassessmentcarriedoutduringthefinancialyearended31December2019andupontherecommendationoftheNominationCommittee,theBoardissatisfiedwiththelevelofindependencedemonstratedbyalltheIndependentDirectorsandtheirabilitytoactinthebestinterestoftheCompany.TheBoardattherecommendationoftheNominationCommitteeresolvedthatalltheIndependentDirectorswhohaveservedforacumulativetermofmorethantwelveyearsshallbesubjecttoshareholders’approvalattheforthcomingAnnualGeneralMeetingtobeheldin2020throughatwo-tiervotingprocess.
Attendance of Nomination Committee
TheattendancerecordofeachmemberoftheNominationCommitteeduringthefinancialyearended2019issetoutbelow:
Nomination Committee Nov TotalDato’IsmailBinHamzah,Chairman • 1/1Mr.ChewHockLin,Member • 1/1Dato’LaiChangHun,Member • 1/1
CORPORATEGOVERNANCEOVERVIEWSTATEMENT
GUH Holdings BerhadAnnual Report 2019 41
REMUNERATION
TheRemunerationCommitteeofGUHcurrentlycomprisesthefollowingDirectors,allofwhomareNon-Executive,withthemajorityofIndependent.
Dato’IsmailBinHamzah–Chairman Independent Non-Executive DirectorMr.ChewHockLin–Member Independent Non-Executive DirectorDatinJessicaH’ngHsiehLing–Member Non-Independent Non-Executive Director
TheBoardhasinplacePoliciesandProcedurestodeterminetheRemunerationofDirectorsandSeniorManagement.TheobjectiveoftheCompany’spolicyonDirectors’remunerationistoattractandretainDirectorsofthecaliberneededtodirecttheGroupsuccessfully.
TheRemunerationCommitteeconvenesmeetingatleastonceayearandmayberequestedasandwhennecessary.TheRemunerationCommittee is responsible forensuring that the compensationandotherbenefitswill encourageExecutiveDirectorstoact inwaysthatenhancetheCompany’s long-termprofitabilityandvalue.TheRemunerationCommitteeandtheBoardaremindfulthattheremunerationfortheExecutiveDirectorsshouldbeattractiveandfairlycompensatedtomaintainhighquality individuals in theBoardtoruntheGroupsuccessfully.Noneof theExecutiveDirectorsparticipatesinanywayindeterminingtheirindividualremuneration.InreviewingtheremunerationpackageoftheExecutiveDirectors,theCommitteeshallnormallyconsiderthelevelofresponsibilitiesofitsDirectors,andisguidedby the framework thatcovers the termsandconditions for theExecutiveDirectorsand theManagement team.Theremunerationpackagecontainsbothfixedandperformance-linkedelementsandtheirremunerationsarebenchmarkedagainsttheremunerationofothercompanieswithinthesameindustry.TheExecutiveDirectorsarepaidfixedsalaries,allowances,bonusesandotherbenefitsinaccordancewiththetermsandconditionsasagreedupon.Thetermsandconditionsarenormallyreviewedannuallytoensuretheperformanceandcontributionsarejustified.
Duringthefinancialyearended31December2019,theRemunerationCommitteehadtwomeetingstodiscussandrecommendtotheBoardforapprovaltheremunerationpackageoftheExecutiveDirectors.ThedeterminationoftheremunerationoftheNon-ExecutiveDirectorsisamatteroftheBoardasawhole.PaymentofDirectors’feesisoneofthesalientelements.TheDirector’sfeeisproposedatRM66,000perDirectorandtheshareholdersapprovalhadbeensoughtatthelastAnnualGeneralMeetingheldinyear2019.Duringtheyear,theRemunerationCommitteealsorecommendedtheDirectors’feefortheperiodfromyear2020tothenextAnnualGeneralMeetinginyear2021,subjecttotheshareholders’approvalattheforthcomingAnnualGeneralMeeting.TheCompanyreimbursesexpensesincurredbytheDirectorsforattendingtheBoardandCommitteemeetings.Allmeetingminutes,includingmeetingpapersthathadbeendeliberatedbytheRemunerationCommitteearereportedtotheBoardbytheChairmanoftheRemunerationCommitteefortheBoard’sconsiderationandapproval.
TheattendancerecordofeachmemberoftheRemunerationCommitteeduringthefinancialyearended2019issetoutbelow:
Remuneration Committee Feb Nov TotalDato’IsmailBinHamzah,Chairman • • 2/2Mr.ChewHockLin,Member • • 2/2DatinJessicaH’ngHsiehLing,Member • • 2/2
ThebreakdownoftheremunerationofeachindividualDirectorforthefinancialyearended2019fortheGroup/Companylevelisasfollows:
Name of Director Directors’ feesRM
Salaries & EPF
RMBonus
RM
Meeting allowance
RM
Ex-gratia benefits
receivablesRM
Benefits-in-kind
RMExecutive DirectorsTanSriDato’SeriH’ngBokSan 73,000 966,000 448,000 - 479,000 28,000DatukSeriKennethH’ngBakTee 97,000 1,912,000 939,000 - 1,075,000 15,500Total 170,000 2,878,000 1,387,000 - 1,554,000 43,500
CORPORATEGOVERNANCEOVERVIEWSTATEMENT
GUH Holdings BerhadAnnual Report 201942
Name of Director Directors’ feesRM
Salaries & EPF
RMBonus
RM
Meeting allowance
RM
Ex-gratia benefits
receivablesRM
Benefits-in-kind
RMNon-Executive DirectorsDato’HarryH’ngBakSeah 66,000 - - 4,000 - -DatinJessicaH’ngHsiehLing 66,000 - - 6,000 - -Mr.ChewHockLin 66,000 - - 9,000 - -Dato’IsmailBinHamzah 66,000 - - 9,000 - -Dato’LaiChangHun 66,000 - - 4,500 - -En.WIsmailBinWNik 66,000 - - 4,000 - -Dato’Dr.GanKongMeng 66,000 - - 5,000 - -Total 462,000 - - 41,500 - -
TheBoardhasoptednottodiscloseonanamedbasisfortheSeniorManagement’sdetailedremunerationandtheremunerationinthebandsofRM50,000aftertakingintoconsiderationthesensitivity,security,issueofstaffmoraleandalsotheconfidentialitypurposes.
PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT
AUDIT COMMITTEE
TheAuditCommitteecomprisessolelyIndependentNon-ExecutiveDirectorsandischairedbyMr.ChewHockLin,amemberoftheMalaysianInstituteofCertifiedPublicAccountants(MICPA)andtheMalaysianInstituteofAccountants(MIA)who isalso theSenior IndependentNon-ExecutiveDirectorwhile theChairmanof theBoard isTanSriDato’SeriH’ngBokSan.ThisistoensurethattheobjectivityoftheBoard’sreviewoftheAuditCommittee’sfindingsandrecommendationsisnotimpaired.
TheAuditCommitteehaspoliciesandproceduresinplacetoassessthesuitability,objectivityandindependenceoftheExternalAuditors.TheAuditCommitteehasundertakenanassessmenttoassessthesuitabilityandindependenceofExternalAuditorsduringthefinancialyear.Thecriteriafortheassessmentincludeamongothers,qualityofservices,sufficiencyofresources,communication,independenceandinteraction.Inaddition,theExternalAuditorshavegivenassurancetotheAuditCommitteeconfirmingtheirindependenceandtheAuditCommitteeissatisfiedwiththeresultoftheassessmentandhenceforthrecommendedtotheBoardforthere-appointmentofMessrs.CroweMalaysiaPLTforshareholdersapprovalattheforthcoming56thAnnualGeneralMeeting.
TheAuditCommitteewillalsoensurethatauditpartnerwillrotateeveryfive(5)yearsaftertheclosureofstatutoryauditandnoneoftheformerkeyauditpartnerswillbeappointedtheAuditCommitteememberinordertoupholdtheutmostindependence.
TheBoardensuredthatallmembersoftheAuditCommitteearefinanciallyliterateandhavesufficientunderstandingoftheGroup’sbusinessandmattersunderthepurviewoftheAuditCommitteeincludingthefinancialreportingprocess.TheAuditCommitteehasreviewedandprovidedadviceonthefinancialstatementswhichprovideatrueandfairviewoftheCompany’sfinancialpositionandperformance.
RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK
TheBoard,throughitsRiskManagement&SustainabilityCommitteemonitorsrisksandinternalcontroloftheGroup.TheRiskManagement&SustainabilityCommitteecomprisesthree(3)members,allofwhomareNon-ExecutivewithamajorityofIndependentDirectors.
The Board acknowledges the responsibilities for maintaining a sound system of internal control to safeguard theshareholders’ investment and the Group’s assets. The internal control system is designed to provide reasonableassuranceagainstmaterialmisstatementandlosses.TheBoardreviewedtheeffectivenessofthesystemofinternalcontrolsthroughtheAuditCommitteewhichhadsupervisedtheworkoftheInternalAuditFunctionoftheGroupandthecommentsmadebytheCompany’sExternalAuditors.
TheStatementonRiskManagementandInternalControlwhichprovidesanoverviewoftheriskmanagementframeworkandthestateofinternalcontrolwithintheGroupisdisclosedonpages46to48.
TheGroup’sinternalauditfunctionisperformedin-housebytheGroupInternalAuditdepartmentwhichisindependentfromtheoperationsandactivitiesoftheGroupinordertomaintainimpartiality.InternalAuditDepartmentreportsdirectlytotheAuditCommittee.Theinternalauditsinvolvethereviewofoperationalcontrols,adequacyofriskmanagement,managementefficiency,andcompliancewiththeGrouppolicies,procedures,lawsandregulations,amongothers.Inaddition,areassuchasefficientuseofresources,safeguardingassets,responsetoassertionsoffraudandreliabilityandintegrityoffinancialinformationarealsoaudited.
CORPORATEGOVERNANCEOVERVIEWSTATEMENT
GUH Holdings BerhadAnnual Report 2019 43
Thus,theInternalAudithasaddedvaluebyimprovingtheGroup’soperationsthroughprovisionofconsultingservicesandindependentandobjectiveevaluationofthecontrolprocessesintheGroup.
DetailsoftheGroup’sInternalAuditFunctionandresponsibilitiesaresetoutinthestatementofInternalAuditFunctionoftheAuditCommitteeReportonpages49to52.
C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS
COMMUNICATION WITH STAKEHOLDERS
TheCompanyvaluesdialogueswithshareholdersandinvestors.InordertoensurethatshareholdersandinvestorsarewellinformedoftheGroup’sbusinessoperations,financialperformanceandcorporatedevelopmentsareaccurateandfactual, timelyandinformative, informationisdisseminatedviatheCompany’sannualreports,circulars,variousannouncementsandpressreleasesmadefromtimetotime.
TheshareholdersandinvestorsarealsoencouragedtovisittheGroup’swebsiteatwww.guh.com.myforinformationandmay also raise any queries through thewebsite. Theymay also obtain theGroup’s latest information via thewebsite ofBursaMalaysiaSecuritiesBerhadatwww.bursamalaysia.com.As the company is not categorized as a“LargeCompany”andhence,hasnotadoptedintegratedreportingbasedonagloballyrecognizedframework.
TheCompany’sAnnualGeneralMeetingnormallyscheduledinMayeachyear,istheprimaryplatformforcommunicationswiththeshareholders.TheCompanyacknowledgestheimportanceofstrengtheningcorporategovernancepracticesbyproposingresolutionstobevotedbypoll.Pollingprocesseswillbeexplainedduringthegeneralmeetingandpollresultsareverifiedbyappointedscrutinizers.TheshareholdersareatlibertytoraisequestionswhiletheDirectorswillprovideanswersandclarificationsduringtheCompany’sAnnualGeneralMeeting.NoticeofAnnualGeneralMeetingandrelatedcircularandstatementtoshareholdersarenormallysentoutatleast21daysbeforethemeetinginordertofacilitatefullunderstandingoftheissuesinvolved.SpecialbusinessitemsassetoutintheNoticeofAnnualGeneralMeetingalsogivefullexplanationontheeffectoftheproposedresolutionarisingfromsuchitems.TheoutcomeoftheAnnualGeneralMeetingisannouncedtoBursaMalaysiaSecuritiesBerhadonthesamemeetingday.
TheManagementoftheCompanyalsohasconferencesandmeetingswiththeresearchanalystsandfundmanagerstoprovideupdatesonthelatestdevelopmentswithintheGroupandtogivethebestinformationpossiblesothattheycanaccuratelyapplyittoevaluatetheCompany.TheBoard isawareof theneed toestablishadisclosurepolicy thatwillprovideconstructivecommunication to theshareholdersandinvestorsatapromptlymannerinorderforthesestakeholderstobeabletomakeinformedinvestmentdecisions.TheBoardapprovedandreleasedthequarterlyfinancialresults(includingfullyearresults)forthefinancialyearended31December2019onthefollowingdates:2019 Quarterly Results Date of Release Listing Requirements Deadline1stQuarter 23May2019 31May20192ndQuarter 19August2019 30August20193rdQuarter 27November2019 29November20194thQuarter 25February2020 28February2020
STATEMENT OF DIRECTORS’ RESPONSIBILITIES TheBoard indischarging itsfiduciaryduties isaccountabletoshareholders inensuringtheannualauditedfinancialstatementsarepreparedandpresentedinclearandmeaningfulassessmentoftheGroup’sfinancialperformanceandprospect.TheBoardisrequiredunderParagraph15.26(a)oftheListingRequirementstomakeastatementexplainingitsresponsibilityforpreparingtheannualauditedfinancialstatements.
InpreparingtheGroup’sconsolidatedannualauditedfinancialstatementsforthefinancialyearended31December2019,theDirectorshaveprovidedassurancethatthefinancialstatementsaredrawnupinaccordancewiththeapplicableapprovedaccountingstandardsinMalaysiaandtheCompaniesAct2016togiveatrueandfairviewofthestateofaffairsoftheCompanyandtheGroupinatransparentmanner.TheStatementbyDirectorspursuanttoSection251(2)oftheCompaniesAct2016issetoutinthesectiontitled“StatementbyDirectorsoftheDirectors’Report”enclosedwiththeGroup’sconsolidatedannualauditedfinancialstatementsforthefinancialyearended31December2019.TheDirectors’ReportfortheauditedfinancialstatementsoftheCompanyandtheGrouparesetoutonpages54to57ofthisAnnualReport2019.
CORPORATEGOVERNANCEOVERVIEWSTATEMENT
GUH Holdings BerhadAnnual Report 201944
TheBoardhastakenthefollowingmeasuresinordertoensurethefinancialstatementsareproperlydrawnup:
• Adoptionofappropriate,adequateandapplicableaccountingstandardsandpoliciesandappliedthemconsistently;• Applicableapprovedaccountingstandardshavebeenfollowed;• Judgementsandestimatesaremadeonareasonableandprudentbasis;and• DueinquiryintothestateofaffairsoftheCompany,therearenomaterialmattersthatmayaffecttheabilityoftheCompanytocontinueinbusinessonagoingconcernbasis.
COMPLIANCE INFORMATION AS AT 31 DECEMBER 2019
Audit and Non-Audit Fees
Ingeneral,theCompanyengagestheExternalAuditorsforauditpurposesonly.Nevertheless,asandwhennecessary,theGroupalsoengagestheExternalAuditorsfortheirnon-auditexpertisetocarryoutnon-auditservicesandactivities.
Forthefinancialyearended31December2019,theamountofauditandnon-auditfeespaidorpayablebytheCompanyandtheGrouptotheExternalAuditorsandtheiraffiliatedcompaniesareasfollows:
CompanyRM
GroupRM
Auditfees 50,000 183,500Non-auditfees 7,900 68,858
Related Party Transactions
TheGrouphasaninternalcomplianceframeworkinconnectionwithrelatedpartytransactions,toensureitmeetstheobligationsundertheListingRequirements.TheBoard,throughitsAuditCommittee,reviewsallrelatedpartytransactions involved. Any Director who has an interest in the related party transaction(s) must abstain fromdeliberationsandvotingontherelevantresolution,inrespectofsuchtransaction(s)attheBoardmeetingandanygeneralmeetingconvenedtoconsiderthematter.
Thereareproceduresestablishedby theCompany toensure that all relatedparty transactionsareundertakenonanarm’slengthbasisandonnormalcommercialterms,consistentwiththecompany’susualbusinesspracticesandpolicies,whicharegenerallynotmorefavorablethanthosegenerallyavailabletothepublicandarenotdetrimentaltotheminorityshareholders.
Significant related party transactions of theGroup for the financial year are disclosed in Note 32 to the FinancialStatementsandtheAdditionalDisclosureonpage45.Forallother transactionswithanyrelatedpartieswhichdonot fallwithin theambitof theabovedisclosure,willbesubjecttootherapplicableprovisionsoftheListingRequirementsand/oranyotherapplicablelaw.
Material Contract Involving Directors’ and Major Shareholders’ Interests
The Company and/or its subsidiaries have not entered into any material contract involving Directors’ and MajorShareholders’ interestsduring thefinancialyearended31December2019except for thoseexplained in theabovementioned.
Additional Information
Saveasaforesaiddisclosed,noneofthefollowingtransactionshavebeenenteredbytheCompanyduringthefinancialyearended31December2019:
• IssuanceofanyOptions,warrantsorconvertiblesecurities;• SponsorshipofanyAmericanDepositoryReceiptorGlobalDepositoryReceiptprogrammes;• Sanctionsand/orpenaltiesimposedontheCompanyanditssubsidiaries,DirectorsorManagementbytherelevantregulatorybodies;and
• ProfitguaranteegivenbytheCompany.
Asthereisno‘onesizefitsall’approachtocorporategovernancewhilemaintainingthebestapproachtoadoptingtheprinciples,theBoardwilluseitsbestendeavourstomaintainingthecomplianceoftherelevantprinciplesassetoutinMCCGandtopromotehighstandardsofcorporategovernance.InlinewiththelatitudeaccordedintheapplicationmechanismofMCCG,theCompanyhasprovidedexplanationsforthedeparturesfromthesaidpractices.FurtherdetailsontheapplicationofeachindividualPracticeofMCCGareavailableintheCorporateGovernanceReport2019.
CORPORATEGOVERNANCEOVERVIEWSTATEMENT
GUH Holdings BerhadAnnual Report 2019 45
ADDITIONALDISCLOSURE
RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
(Disclosed in accordance with Paragraph 3.1.5 of Practice Note 12 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)
Atthelast55thAnnualGeneralMeetingheldon23May2019,theCompanyhasobtaineditsshareholders’renewalmandatetoallowtheCompanyanditssubsidiariestoenterintorecurrentrelatedpartytransactionsofarevenueortradingnatureasdisclosedintheCirculartoShareholdersdated24April2019.
Detailsoftherecurrentrelatedpartytransactionstransactedduringthefinancialyearended31December2019pursuanttoshareholders’renewalmandatearedisclosedasfollows:
Transacting Party of the Group Transacting Party Nature of Relationship Nature of
Transactions
Actual Value Transacted from
23 May 2019 to31 December 2019
GUHCircuitIndustry(PG)Sdn.Bhd.
(Recipient & Provider)
KiyamasChemicalSdn.Bhd.[“KCSB”]
(Provider & Recipient)
LizhengHoldingsSdn.Bhd.(“Lizheng”)hasadirectshareholdingofapproximately28.3%in*KiyamasHoldingsSdn.
Bhd.
GanChernNeehasadirectshareholdingofapproximately8.3%in
Kiyamas
H’ngChunLiisaDirectorofLizheng,Kiyamasand
KCSB
Transactionsofraw
materials,goodsandservices
RM8,499,017.38(ApprovedLimit:
RM13,000,000.00)
GUHCircuitIndustry(PG)Sdn.Bhd.(Recipient)
KyoshaPrecisionEngineeringSdn.Bhd.[“Kyosha’]
(Provider)
H’ngChunLiisaDirectorofKyosha
Provisionofprecision
engineeringandfabricationofparts
RM1,265,295.06(ApprovedLimit:RM1,500,000.00)
Notes:
* KiyamasHoldingsSdn.Bhd.(“Kiyamas”)istheHoldingCompanyofKiyamasChemicalSdn.Bhd.
(1)DatukSeriKennethH’ngBakTee,theCEO/GroupMDoftheGroup,isalsoadirectorandshareholderofLizhengHoldingsSdn.Bhd.andthefatherofH’ngChunLi.
(2)Dato’HarryH’ngBakSeah,theNon-ExecutiveDirectorandashareholderofGUH,isthespouseofGanChernNee.
(3)TanSriDato’SeriH’ngBokSan,theExecutiveChairmanandthemajorshareholderofGUH,isthebrotherofDato’HarryH’ngBakSeahandDatukSeriKennethH’ngBakTee.
(4)DatinJessicaH’ngHsiehLing,theNon-ExecutiveDirectorandthemajorshareholderofGUH,isthedaughterofTanSriDato’SeriH’ngBokSanandthenieceofDato’HarryH’ngBakSeahandDatukSeriKennethH’ngBakTee.
GUH Holdings BerhadAnnual Report 201946
STATEMENTONRISKMANAGEMENTANDINTERNALCONTROL
Introduction
TheBoard iscommittedtouphold throughout theGroupasoundsystemofriskmanagement, internalcontrolsandgoodcorporategovernancepracticesassetoutintheStatementonRiskManagementandInternalControl,preparedincompliancewithParagraph15.26(b)oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad,theMalaysianCodeonCorporateGovernance2017andguidedbytheStatementonRiskManagementandInternalControl:GuidelinesforDirectorsofListedIssuers.
Board’s Responsibility
InaccordancewithPrincipleB(II)oftheMalaysianCodeofCorporateGovernance,theBoardisresponsiblefortheGroup’s riskmanagement and internal control systemwhich includes the establishment of appropriate policies oninternalcontrolandensurethesystemsarefunctioningeffectivelyandmanagerisksthat formpartof thecorporateculture.
TheAuditCommitteeandRiskManagement&SustainabilityCommitteeassisttheBoardtoreviewtheadequacyandeffectivenessoftheGroup’sriskmanagementandinternalcontrolsystemandtoensurethatmeasuresarecarriedoutbyManagementtoobtainthelevelofassurancerequiredbytheBoard.
The riskmanagement and internal control system is designed tomanage any inadequacies that are identified, tominimiseoreliminatetheriskoffailuretoachievetheGroup’sbusinessandcorporateobjectives.Accordingly,suchsystemscanonlyprovideareasonablebutnotabsoluteassuranceagainstmaterialmisstatement,lossorfraud.
Risk Management and Internal Control
InaccordancewithPractice9.1of theMalaysianCodeonCorporateGovernance, theBoardhas, through itsRiskManagement & Sustainability Committee, established a sound risk management and control framework that wasimplementedthroughouttheGroup.
TheGrouphasanin-housestructuredriskmanagementframeworkforanongoingprocessinidentifying,evaluating,monitoringandreportingthesignificantrisksfacedbytheGrouptoensureitssystemofinternalcontroliscarriedoutefficientlyexceptforassociates.Suchprocessisregularlyreviewedandexaminedasandwhentherearesignificantnewissueswhichrequirechangestobemadetothecurrentsystemandpolicies.
The Risk Management & Sustainability Committee comprises one (1) Non-Independent and two (2) IndependentDirectorsofwhomareallNon-ExecutiveandsupportedbySeniorManagementfromtheGroup’sbusinessdivisions,meetingsareconvenedforthepurposeofidentifying,evaluatingandmanagingthesignificantrisks.
Risksrecords,whichidentifykeyrisks,potentialfinancialimpact,thelikelihoodofthoserisksoccurring,aswellasthecontrolstrategiestomanagethoserisksassociatedwiththeGroup’sactivitiesarepresentedtotheRiskManagement&SustainabilityCommitteeforreview.TheRiskManagement&SustainabilityCommitteereviewsanddeliberatestheperformanceofthebusinessdivisionsoftheGroupandreportstotheBoard.ThisriskmanagementprocesswillhelpGUHtoachieveitsperformanceandprofitabilitytargetsbyprovidingriskinformationtoenablebetterdecision-making.TheBoardwillhaveultimateresponsibilityformanagingrisksandinternalcontrolsassociatedwiththeoperationsofeachDivision.
TheBoardiscommittedtoarticulate,implementandreviewtheGroup’sinternalcontrolsystem.Theinternalcontrolsystem isdesigned to facilitateachievementof theGroup’sbusinessobjectivesandassist theBoard tomaintainapropercontrolenvironment.Internalcontrolsalsopromoteefficiency,reduceriskofassetloss,andhelptoensurethereliabilityoffinancialstatementswhichareincompliancewithlawsandregulations.
Review of Risk Management and Internal Control System
ReviewingtheeffectivenessofriskmanagementandinternalcontrolthroughongoingassessmentsisanessentialpartoftheBoard’sresponsibilities.
GUH Holdings BerhadAnnual Report 2019 47
STATEMENTONRISKMANAGEMENTANDINTERNALCONTROL
TheGrouphasanongoingprocessof identifying,evaluatingandmanaging thesignificant risks inorder toachieveits objectives.On a quarterly basis, the Board receivesmanagement reports fromSeniorManagement in respectofbusinessrisksthathaveimpactedorthelikelihoodtoimpacttheGroupanditsachievementof itsobjectivesandstrategies and actions taken in response to the risks reported. TheRiskManagement & Sustainability Committeeconveneswiththedivisionalmanagersonceayearforanannualassessmentofanysignificantaspectsofrisksandinternalcontrolmatters.
TheBoardreviewstheriskmanagementandinternalcontrolsystemtoidentify,evaluateandmanagethesignificantrisks facedby theGroup in itsachievementofobjectivesandstrategize thenecessaryactions tobecarriedout toremedyanysignificantweaknessesidentifiedfromthereview.
TheGrouphasanin-houseInternalAuditFunction,whichisindependentoftheactivitiesoroperationsofthesubsidiaries,departments,andsections itaudits. Itsprincipalresponsibility is toundertakeregularandsystematicreviewsof theriskmanagementandsystemofinternalcontrolinordertoprovidereasonableassurancethatsuchsystemoperatessatisfactorilyandeffectivelyandreportdirectlytotheAuditCommittee.
TheInternalAuditFunctionadoptsarisk-basedapproachinpreparationofitsyearlyinternalauditplanandstrategywhichisreviewedandapprovedbytheAuditCommittee.
InternalAuditreviewsontheadequacyandeffectivenessoftheriskmanagement,internalcontrolsystemandreportsitsfindingsonmajorweaknessesandriskcontrolprocedures,makesrecommendationsforimprovementsandperformsfollowupauditstoassessthestatusofimplementationthereofbyManagement.
InternalAuditalsoinvestigatescomplaintsofmisuseandabuseoftheGroup’ssystemsandprocesses,mismanagementoftheGroup’sassetsandotherinstancesoffraudandmalpractice,ifany.
A whistleblowing policy has been established to provide appropriate channels that facilitate whistleblowing in atransparentandconfidentialmannerforstakeholderstoraiseconcerns,withoutfearofretaliationonanywrongdoingthattheymayobservewithintheGroup.
Key Features of Risk Management and Internal Control Processes
TheGroup’skeyfeaturesonRiskManagementandInternalControlaresummarisedasfollows:-
1. Cleardefinitionofthetermsofreference,functions,authoritiesandresponsibilitiesofthevariousCommitteesoftheBoard.
2. Well definedorganisational structurewithclear linesofaccountabilityand responsibility toenable theGroup’svision,mission,strategiesandoperationalobjectivestobeachieved.
3. DocumentedinternalpoliciesandproceduresaresetoutintheGroupPoliciestogovernthefinancialandoperationalfunctions;whicharesubjecttoregularreviewandimprovement.
4. Whereappropriate,certainsubsidiarieshaveISO9001:2015,ISO14001:2015andIATF16949:2016accreditationsfortheiroperationalprocesses.
5. Cleardefinitionsofauthorisationproceduresanddelegatedauthoritylevelsforalloperationaltransactions.
6. ReviewofallmajorproposalsforinvestmentanddivestmentbytheRiskManagement&SustainabilityCommitteebeforebeingdeliberatedandapprovedbytheBoard.
7. TheCEO/GroupManagingDirectorholdsweeklyandmonthlymanagementmeetingswiththeDivisionalheads.Atthesemeetings,allkeyperformanceindicesarediscussedandmonitored,includingdiscussionsofsignificantissues.Accordingly,theBoardisupdatedbytheCEO/GroupManagingDirectorandisabletoassesssignificantoperationalandfinancialrisksofthebusinessunitsconcerned.
GUH Holdings BerhadAnnual Report 201948
STATEMENTONRISKMANAGEMENTANDINTERNALCONTROL
8. PerformanceReports, benchmarkedagainst budgetsandobjectivesareprovided to theBoardat eachBoardmeeting.
9. DetailedbudgetingprocesswherecompaniesundertheGroupprepareannualbudgets,whichareapprovedatcompanylevelandreviewedbytheCEO/GroupManagingDirector.
10. Progressreports,financialsummaryandcurrentissueswhichmaysignificantlyaffectthecompany’sbusinessforalldivisionsarediscussedateachBoardmeeting.
11. TheRiskManagementframeworkoftheGroupisinplacetoassistintheriskmanagementprocessoftheGroup.
12. TheGroup’sInternalAuditFunctionperformregularreviews,monitorcompliancewithpoliciesandproceduresandrecommendactionplanstoimproveonareaswherecontroldeficienciesareidentifiedduringfieldaudits.Thus,providinganindependentassuranceontheadequacyandeffectivenessoftheGroup’ssystemofinternalcontrol.
13. TheAuditCommittee,onbehalfoftheBoard,reviewsreportfromtheGroupInternalAuditorsandExternalAuditorsandreportsitsconclusiontotheBoard.
TheassociateshavenotbeendealtwithaspartoftheGroupforthepurposeofthisStatement.
Conclusion
Forthefinancialyearunderreviewanduptothedateofissuanceofthisstatement,theBoardispleasedtostatethattheGroup’ssystemofriskmanagementandinternalcontrolisadequateandeffectivetosafeguardtheshareholders’investment,theinterestsofcustomers,regulatorsandemployees,aswellastheGroup’sassets.Therehavebeennomateriallosses,contingenciesoruncertaintiesarisingfromthereviews.
AsrecommendedbytheStatementonRiskManagementandInternalControl–GuidelinesforDirectorsofListedIssuers,theBoardhasreceivedassurancefromtheCEO/GroupManagingDirector,COO,GeneralManagerofCorporateOfficeandalltheDivisionalheadsthattheGroup’sriskmanagementandinternalcontrolsystemisoperatingadequatelyandeffectivelyinallmaterialaspects,duringthefinancialyearunderreviewanduptothedateofthisStatement.
TheGroupwillcontinuetomonitorallmajorrisksaffectingtheGroupandwilltakethenecessarymeasurestomitigatethemandenhancetheadequacyandeffectivenessoftheriskmanagementandinternalcontrolsystemoftheGroup.
TheExternalAuditorshavereviewedthisStatementonRiskManagementandInternalControlasrequiredbyParagraph15.23oftheBursaMalaysiaSecuritiesBerhadMainMarketListingRequirements.Basedontheirreview,nothinghascometotheirattentionthatcausesthemtobelievethatthisStatementonRiskManagementandInternalControlsetoutaboveisnotprepared,inallmaterialrespects,inaccordancewiththedisclosuresrequiredbyparagraphs41and42oftheStatementonRiskManagementandInternalControl:GuidelinesforDirectorsofListedissuersandPractices9.1and9.2oftheMalaysianCodeonCorporateGovernance2017tobesetout,norisfactuallyinaccurate.
GUH Holdings BerhadAnnual Report 2019 49
AUDITCOMMITTEEREPORT
TheAuditCommitteeofGUHHoldingsBerhad(“GUH”or“theCompany”)hasbeenestablishedtoassisttheBoardofDirectors (‘theBoard”) in fulfilling itsstatutoryandfiduciary responsibilitiesby reviewing theCompanyandall itssubsidiaries (‘theGroup”) business processes andmonitoringmanagement of financial risk process alongwith itsaccountingandfinancialreportingpracticesandensuringtheGroup’ssystemofinternalcontrolismaintained.TheAuditCommitteecarriedoutitsdutiesandfunctionstoensuretheintegrityoffinancialreportingandthatthefinancialstatementsoftheCompanygiveatrueandfairviewofthefinancialpositionandresults,incompliancewithallapplicablelegalandregulatoryfinancialreportingrequirements,accountingstandardsandtheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“ListingRequirements’)andtoact independentlytoensuretheinterestofshareholdersisproperlyprotected.TheAuditCommittee isof theviewthatnomaterialmisstatementsor loses,contingenciesoruncertaintieshavearisen,basedontheirreviewsmadeanddiscussionsheld.
MEMBERS
ThepresentmembersoftheAuditCommitteeare:
Mr. Chew Hock Lin,Chairman IndependentNon-ExecutiveDirector
Dato’ Ismail Bin Hamzah, Member IndependentNon-ExecutiveDirector
Dato’ Dr. Gan Kong Meng, Member IndependentNon-ExecutiveDirectorOBJECTIVES
The primary objective of the Audit Committee is to assist the Board in the effective discharge of its fiduciaryresponsibilities:
• Toreviewtheresultsofinternalandexternalauditactivitiestoensuretheauditfindingsarebroughtuptothehighestlevelforconsideration;
• TocomplywithalltheapplicableaccountingstandardsandrequireddisclosurepoliciesoftheListingRequirements;
• Toensurethecomplianceandconsistencyofthecorporategovernanceframeworkassetoutbytherelevantregulatoryauthorities.
COMPOSITION OF AUDIT COMMITTEE
The Audit Committee comprises three (3) members, all of whom are Independent Non-Executive Directors. TheChairmanof theAuditCommittee,Mr.ChewHockLinwho isalso theSenior IndependentNon-ExecutiveDirectorof theCompany isamemberof theMalaysian InstituteofCertifiedPublicAccountants (MICPA)and theMalaysianInstituteofAccountants(MIA).TheAuditCommitteeoftheCompanymeetstherequirementsofParagraph15.09(1)(c)oftheListingRequirementswhichstipulatesthatatleastone(1)memberoftheAuditCommitteemustbeaqualifiedaccountant.TheothermembersoftheAuditCommitteeareDato’IsmailBinHamzahandDato’Dr.GanKongMeng.AllmembersoftheAuditCommitteearefinanciallyliterateandequippedwiththerequiredbusinessskillsindischargingtheirdutiesasAuditCommitteemembers.TheAuditCommittee’sfinancialliteracyandunderstandingofthefinancialreportingprocesshavecontributedtotheAuditCommittee’sdiscussionsinthepreparationoffinancialstatementsoftheCompany.NoalternatedirectorshallbeappointedasamemberoftheAuditCommittee.NominationCommitteecarriedouttheevaluationandassessmenttoreviewtheperformanceoftheAuditCommitteeannually.Duringtheassessment,theNominationCommitteeevaluatedtheperformanceandeffectivenessoftheAuditCommitteebasedonafewareas,thequalityofjudgmentandthecommitment/timeattendatthemeetingaswellasthetimedevotedoutsidethemeetingbytheAuditCommitteemembers.TheBoardissatisfiedthattheAuditCommitteeand itsmembershaveefficientlydischarged itsduties inaccordancewith the termsof referenceaswellashavingappropriatelevelofknowledgeandexperiencetocontributetotheeffectivefunctioningoftheAuditCommittee.TheBoardisoftheviewthattheAuditCommitteehasprovidedrecommendationstoassisttheBoardinmakinginformeddecisionsintheBoardmeetings.
TheBoardisalwaysmindfulthataneffectiveAuditCommitteecanbringtransparency,focusandindependentjudgmentneededtooverseethefinancialreportingprocess.Theappropriatelevelofknowledge,skills,experienceandcommitmentofitsmembersiscriticaltotheAuditCommittee’sabilitytodischargeitsresponsibilitieseffectivelyandstrengthenthequalityofAuditCommitteedeliberations.
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AUDITCOMMITTEEREPORT
THE PROCESS OF THE AUDIT COMMITTEE
TheChairman of theAudit Committee is responsible for ensuring theAudit Committeemeetings of theCompanyrunefficiently.He isalso responsible for theManagement, thedevelopmentandeffectiveperformanceof theAuditCommittee;planningandorganizingalloftheactivitiesoftheAuditCommittee.
TheAuditCommitteewillmeetasfrequentlyastheChairmanshalldecideinordertodischargeitsdutiesbutnolessthanfour(4)timesayear.Aquorumconsistsoftwo(2)memberspresentandamajorityofwhommustbeIndependentDirectorshavealwaysbeenmetforthemeetingsoftheAuditCommittee.
During the financial year, theAuditCommitteemet onaquarterly basis to carry out their dutieswhich include thediscussionofproposeddisclosures in thequarterlyannouncementandmatters fallingwithin theAuditCommittee’stermsofreferenceandrecommendedtotheBoardforpublicrelease.AuditCommitteealsometandheldameetingtodiscusstheannualreportbeforerecommendationtotheBoardforcirculatingtoBursaMalaysiaSecuritiesBerhadandalltheshareholders.TheCEO/GroupMD,theSeniorManagementandtheInternalAuditorhaveattendedthemeetings.UponinvitationbytheAuditCommittee,representativesoftheExternalAuditorshaveattendedtwo(2)meetingsheldinFebruaryandNovember2019.TheExternalAuditorsmay requesta specialmeeting if theyconsideranddeemnecessary.Wherecircumstancesarise,theAuditCommitteemembersshallmeetwiththeExternalAuditorswithoutanyManagementand/orexecutiveofficeroftheGroupbeingpresent.
TheCompanySecretaryshallbethesecretaryoftheAuditCommitteeorinherabsence,anotherpersonauthorizedbytheChairmanoftheAuditCommittee.Thesecretaryshallberesponsiblefordrawingupandcirculatingtheagendaandnoticeofmeetings togetherwith thesupportingexplanatorydocumentation toeachAuditCommitteememberspriortomeeting.Thesecretaryshallalsoberesponsibletorecord,maintainandcirculatetheminutesofeachmeetingtoallmembersandtheBoard,andtheChairmanoftheAuditCommitteeshallreportonkeyissuesdiscussedateachmeetingtotheBoard.
During thefinancialyear,five (5)meetingswereheldanddetailsof theAuditCommitteemembers’attendancearetabledbelow:
Audit Committee Feb Mar May Aug Nov TotalMr.ChewHockLin,Chairman • • • • • 5/5Dato’IsmailBinHamzah,Member • • • • • 5/5Dato’Dr.GanKongMeng,Member • • • x • 4/5
SUMMARY OF WORK DURING THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
1. Financial Reporting
• Reviewedtheunauditedquarterlyfinancialresultsandyear-endfinancialstatementsoftheCompanyandtheGroupwhichincludediscussionamongothers,anychangeofimplementationofmajoraccountingpolicies;thegoingconcernsassumptionandsignificantmatters;
• ReviewedtheGroup’squarterlyandyear-endfinancialstatementsandensuredthatallareincompliancewiththe Listing Requirements, Malaysian Accounting Standards Board and other relevant legal and regulatoryrequirements;
• Reviewed the unaudited financial results announcements before recommending the same to the Board forapproval;
• ReviewedthesignificantmattershighlightedbytheAuditorsinthefinancialstatementsandsignificantjudgmentsmadebyManagement.
2. External Audit
• ReviewedandapprovedtheExternalAuditorsauditplanandscopeofworkfortheyearandtheevaluationofthesystemofinternalcontrolfortablingtotheBoard;
• ReviewedthefindingsoftheExternalAuditorsreports,particularlytheissuesraisedinthemanagementletterandensuredwhereappropriate,thatthenecessarycorrectiveactionshadbeentakenbytheManagement;
• DeliberatedandreportedtheresultsoftheannualaudittotheBoard;
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AUDITCOMMITTEEREPORT
• MetanddiscussedwiththeExternalAuditorsifanyimportantandmajorissueneedtobehighlightedwithoutthepresenceofManagementoftheCompany.DuringtheprivatesessionheldwiththeExternalAuditors,theyconfirmedthattherewasnomajorconcerntobehighlightedandtheyhadbeenreceivingfullco-operationfromtheManagementandthestaffoftheGroupwhencarryingouttheirauditwork;
• Reviewedandapprovedtheprovisionofnon-auditservicescarriedoutbytheExternalAuditors.Theamountofexternalauditfeesandnon-auditfeesincurredforthefinancialyearended31December2019areasfollows:
2019 Fees incurred Company GroupAudit services 50,000 183,500Non-Audit services 7,900 68,858
• Carried out the assessment of the objectivity, independence, performance and the quality of service of theExternalAuditorstoensuretheyarecompetentandindependentthroughouttheconductoftheauditengagementwithintheGroupandtoensuretheExternalAuditorsmetthecriteriaprovidedbytheListingRequirements;
Inconsideringtheirsuitabilityandindependence,theAuditCommitteeassessedtheadequacyoftheirexperienceandresources,theirauditengagements,theexperienceoftheirengagementpartnersandalsothesupervisorystaffassignedtotheGroup.
ThecurrentExternalAuditorsoftheCompanyisMessrs.CroweMalaysiaPLT.TheMIAregulatedthatmandatoryrotationofthekeyauditpartnerfortheauditoflistedcompaniesafteraperiodofnotmorethanfive(5)years.TheAuditCommitteeensuresthatauditpartnerwillrotateeveryfive(5)yearsaftertheclosureofstatutoryaudit.
Following the review by the Audit Committee on the External Auditors’ effectiveness and independence,recommendationwasmadetotheBoardbytheAuditCommitteetore-appointtheExternalAuditors.Accordingly,theBoardapprovedthere-appointmentofMessrs.CroweMalaysiaPLTastheExternalAuditorsoftheCompanyandproposedtheirauditfees.Aresolutionforthere-appointmentwillbetabledfortheshareholders’approvalattheforthcomingAnnualGeneralMeeting.
3. Internal Audit
• Reviewedandapprovedtheannualrisk-basedinternalauditplans,monitoredtheeffectivenessofitsworkandtabledtotheBoard;
• Reviewedtheinternalauditreports,processesandresultsofinternalaudittoensureappropriateactionsweretakenontherecommendationsoftheInternalAuditfunctionandtabledtotheBoard;
• Assessed the performance of the Group’s InternalAudit function and advised whether the appointment ofadditionalinternalauditstaffisnecessary;
• Monitoredandassessedtheroleandeffectivenessof theInternalAudit function in theoverallcontextof theCompany’sriskmanagementsystem;
• Deliberatedtheresultsofad-hocinvestigationsandreportsperformedbytheInternalAuditfunctionandtabledtotheBoard.
4. Risk Management
• ReviewedtheRiskManagement&SustainabilityCommittee’sreportsandriskrecordsfromallbusinessdivisionsoftheGroupandreportedtotheBoard;
• Assessedtheadequacyandeffectivenessoftheriskmanagementframework,internalcontrolsystemsandtheappropriatenessofManagement’sresponsestokeyriskareasandhighlightedtotheBoard;
• ReviewedandrecommendedtotheBoardthedisclosureincludedintheAnnualReportwithregardstotheriskmanagementandinternalcontrolsystem.
5. Related Party Transactions
• ReviewedtheproceduresandprocessesestablishedbytheCompanywithregardstorelatedpartytransactions/
GUH Holdings BerhadAnnual Report 201952
recurrentrelatedpartytransactionsandtoensurethatanyrelatedprojectsareappropriatelyidentifiedandthattherelatedpartytransactionsaredeclared,approvedandreportedappropriatelyonaquarterlybasis;
• ReviewedtherelatedpartytransactionsthatwerearisingwithintheGrouptoensurethatthetransactionsarefair,reasonableandnotdetrimentaltotheminorityshareholders;
• ReviewedtheCirculartoShareholdersinrelationtotheproposedrenewalofshareholders’mandateforexistingrecurrentrelatedpartytransactionsofarevenueortradingnatureandrecommendedtotheBoardforapproval;
• ReviewedsubmissionofdisclosuresonthechangesinshareholdingsheldbyDirectors,anyconflictofinterestsituationthatmayarisewithintheCompanyortheGrouponaquarterlybasis;
• ReviewedanyothertransactionsthatdonotfallwithinthedefinitionofarelatedpartytransactionasstatedinChapter10oftheListingRequirementsbutinvolveacertainlevelofconflictofinterestduetothecloseproximityofthetransactingpartiessothattosafeguardthebestinterestoftheCompany.
6. Annual Reporting
• ReviewedtheconsolidatedauditedfinancialstatementsoftheCompanyandtheGroupandconfirmedwiththeManagementandtheExternalAuditorsthatthestatementshavebeenpreparedincompliancewithapplicableFinancialReportingStandardsandrecommendedtotheBoardforapproval;
• Reviewed the Audit Committee Report, reports on related party transactions and recurrent related partytransactions,CorporateGovernanceOverviewStatement,StatementonRiskManagementandInternalControl,Sustainability Statement, record on Share Buy-Back and any other statements of the Annual Report andrecommendedtotheBoardforapproval.
INTERNAL AUDIT FUNCTION
TheGrouphasanin-houseInternalAuditDepartmentthatisindependentoftheactivitiesandoperationsitaudits.TheheadofInternalAuditreportsdirectlytotheAuditCommitteewhoreviewsandapprovestheInternalAuditDepartment’sannualrisk-basedauditplan.
TheInternalAuditDepartmentisconsideredanintegralpartoftheassuranceframeworkanditsprimarymissionistoprovideassuranceontheadequacyandeffectivenessoftherisk,controlandgovernanceoftheGroup.
Duringtheyear,variousinternalauditassignmentshavebeenundertakencoveringvariousareas,departmentsandsubsidiarieswithintheGroup.
InternalauditreportsincorporatingauditrecommendationsandManagementresponseswerepresentedtotheAuditCommitteefordeliberationsandforwardedtoManagementtocarryoutnecessarypreventiveandcorrectiveactions.
SUMMARY OF ACTIVITIES UNDERTAKEN BY THE INTERNAL AUDIT DEPARTMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
• Preparedannualrisk-basedauditplanforAuditCommittee’sdeliberations;• Performedriskassessmenttoevaluateriskwithintheorganisationforauditplanningpurposes;• Implemented theannualauditplan,performedfinancial,operationalandcomplianceauditsonvariousareasandcompaniesintheGrouptoascertaintheadequacyandintegrityoftheirsystemofinternalcontrols;
• ReviewedquarterlyrelatedpartytransactionstoassesscompliancewithListingRequirements;• Carriedoutad-hocappraisalsandreviewsasrequestedbytheAuditCommitteeorManagement;• PerformedfollowupreviewstoensurethatagreedManagementactionshavebeeneffectivelyimplemented;• Providedconsultingservices,i.e.provideadviceandassistancetoManagementandstaffonprocedures,systems,internalcontrolmattersetc.throughouttheyeartoassistManagementinmeetingitsobjectives.
ThetotalcostsincurredbytheInternalAuditFunctionoftheGroupforyear2019isRM204,995(2018:RM180,540).
AUDITCOMMITTEEREPORT
GUH Holdings BerhadAnnual Report 2019 53
54 Directors’Report
58 StatementbyDirectors
58 StatutoryDeclaration
59 IndependentAuditors’Report
63 ConsolidatedStatementofFinancialPosition
64 ConsolidatedStatementofProfitorLoss
65 ConsolidatedStatementofComprehensiveIncome
66 ConsolidatedStatementofChangesinEquity
67 ConsolidatedStatementofCashFlows
69 StatementofFinancialPosition
70 StatementofProfitorLoss
71 StatementofComprehensiveIncome
72 StatementofChangesinEquity
73 StatementofCashFlows
74 NotestotheFinancialStatements
StatementsFinancial
GUH Holdings BerhadAnnual Report 201954
DIRECTORS’REPORT
ThedirectorsherebysubmittheirreportandtheauditedfinancialstatementsoftheGroupandtheCompanyforthefinancialyearended31December2019.Allvaluesshowninthisreportareroundedtothenearestthousand(“RM’000”)unlessotherwiseindicated.
Principal activities
The principal activities of theCompany are those of investment holding and provision ofmanagement services toitssubsidiaries.Theprincipalactivitiesandotherdetailsof thesubsidiariesaredisclosed inNote7 to thefinancialstatements.
ResultsGroup Company
RM’000 RM’000
Profit/(Loss)forthefinancialyearattributableto:--OwnersoftheCompany 5,018 3,626-Non-controllinginterests (8) 0
5,010 3,626
Dividends
During thefinancialyear, theCompanydistributed3,427,000 treasurysharesassharedividendson thebasisof1treasuryshareforevery80existingordinarysharesinissue.
Nocashdividendswererecommended,declaredorpaidbytheCompanysincetheendofthepreviousfinancialyear.
Reserves and provisions
Allmaterial transferstoorfromreservesorprovisionsduringthefinancialyearhavebeendisclosedinthefinancialstatements.
Issue of shares or debentures
TheCompanydidnotissueanysharesordebenturesduringthefinancialyear.
Share options
TheCompanydidnotgrantanyshareoptionsduringthefinancialyear.
Bad and doubtful debts
Beforethefinancialstatementswereprepared,thedirectorstookreasonablestepstoascertainthatactionhadbeentakeninrelationtothewritingoffofbaddebtsandthemakingofprovisionfordoubtfuldebts,andsatisfiedthemselvesthatallknownbaddebtshadbeenwrittenoffandthatadequateprovisionhadbeenmadefordoubtfuldebts.
Atthedateofthisreport,thedirectorsarenotawareofanycircumstanceswhichwouldrendertheamountwrittenoffforbaddebtsortheamountoftheprovisionfordoubtfuldebtsinadequatetoanysubstantialextent.
Current assets
Beforethefinancialstatementswereprepared,thedirectorstookreasonablestepstoensurethatanycurrentassetswhichwereunlikelytoberealisedintheordinarycourseofbusinessincludingthevalueofcurrentassetsasshownin theaccounting recordshavebeenwrittendown toanamountwhich thecurrentassetsmightbeexpectedso torealise.
Atthedateofthisreport,thedirectorsarenotawareofanycircumstanceswhichwouldrenderthevaluesattributedtocurrentassetsinthefinancialstatementsmisleading.
GUH Holdings BerhadAnnual Report 2019 55
DIRECTORS’REPORT
Valuation methods
At thedateof this report, thedirectorsarenotawareofanycircumstanceswhichhavearisenwhichwould renderadherence to the existingmethods of valuation of assets or liabilities of theGroup or theCompanymisleading orinappropriate.
Contingent and other liabilities
Atthedateofthisreport,theredoesnotexist:-
(i) anychargeontheassetsoftheGrouportheCompanywhichhasarisensincetheendofthefinancialyearwhichsecurestheliabilitiesofanyotherperson;or
(ii) anycontingentliabilitywhichhasarisensincetheendofthefinancialyear.
Nocontingentorotherliabilityhasbecomeenforceable,orislikelytobecomeenforceable,withintheperiodoftwelvemonthsaftertheendofthefinancialyearwhich,intheopinionofthedirectors,willormayaffecttheabilityoftheGrouportheCompanytomeettheirobligationswhentheyfalldue.
Change of circumstances
Atthedateofthisreport,thedirectorsarenotawareofanycircumstancesnototherwisedealtwithinthisreportorthefinancialstatementswhichwouldrenderanyamountstatedinthefinancialstatementsmisleading.
Items of an unusual nature
TheresultsoftheoperationsoftheGroupandtheCompanyduringthefinancialyearwerenot,intheopinionofthedirectors,substantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnature.
Therehasnotarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportanyitem,transactionoreventofamaterialandunusualnaturelikely,intheopinionofthedirectors,toaffectsubstantiallytheresultsoftheoperationsoftheGrouportheCompanyforthefinancialyearinwhichthisreportismade.
Directors
Thedirectorsinofficesincethebeginningofthefinancialyearare:-
DirectorsoftheCompany
TanSriDato’SeriH’ngBokSan,JP,PSM,DPPN,DGPN,DSPN,PKT,PJKDatukSeriKennethH’ngBakTee,DGSM,DPNS,DSPN,PKT,PJMDato’HarryH’ngBakSeah,DSPN,PJKDatinJessicaH’ngHsiehLingChewHockLinDato’IsmailBinHamzah,AMN,KMN,DIMPDato’LaiChangHun,DSPN,DJN,PKTWIsmailBinWNikDato’Dr.GanKongMeng,DSDK,PSPP,SDK,DJN,BCN,SMP,AMK,KMN,PPA,PhD
Directorsofsubsidiaries(otherthandirectorsoftheCompany)
H’ngChunLiKokSiewFoongYewKimChongYamChongSong
GUH Holdings BerhadAnnual Report 201956
Directors’ interests
Accordingtotheregisterofdirectors’shareholdings,theinterestsinsharesintheCompanyofthedirectorsinofficeattheendofthefinancialyearareasfollows:-
NumberofordinarysharesShare
Nameofdirector At1.1.2019 dividends (Sold) At31.12.2019
TanSriDato’SeriH’ngBokSan-Indirect(a) 32,034,938 400,437 0 32,435,375-Indirect(b) 17,406,080 217,575 (71,800) 17,551,855
DatukSeriKennethH’ngBakTee-Indirect(b) 1,387,308 17,341 0 1,404,649
Dato’HarryH’ngBakSeah-Direct 2,664,405 33,305 0 2,697,710
DatinJessicaH’ngHsiehLing-Direct 3,554,040 44,425 0 3,598,465-Indirect(c) 32,034,938 400,437 0 32,435,375
Dato’LaiChangHun-Direct 2,847,449 35,593 0 2,883,042-Indirect(b) 117,037 1,462 0 118,499-Indirect(c) 3,602,918 45,036 0 3,647,954
WIsmailBinWNik-Direct 2,359,156 29,489 0 2,388,645
(a) Deemed interest by virtue of shares held by company controlled by family members(b) Deemed interest by virtue of shares held by family members (who are not directors of the Company)(c) Deemed interest by virtue of shares held by company in which the director has interest
Directors’ benefits
Sincetheendofthepreviousfinancialyear,nodirectorhasreceivedorbecomeentitledtoreceiveanybenefit(otherthanthedirectors’remunerationasdisclosedinNote28tothefinancialstatements)byreasonofacontractmadebytheCompanyorarelatedcorporationwiththedirectororwithafirmofwhichthedirectorisamember,orwithacompanyinwhichthedirectorhasasubstantialfinancialinterestexceptforanybenefitswhichmaybedeemedtohavearisenbyvirtueofcertainrelatedpartytransactionsasdisclosedinNote32tothefinancialstatements.
Neitherduringnorattheendofthefinancialyear,wastheCompanyapartytoanyarrangementwhoseobjectistoenablethedirectorstoacquirebenefitsbymeansoftheacquisitionofsharesin,ordebenturesof,theCompanyoranyotherbodycorporate.
Indemnity and insurance for directors and officers
Therewasno indemnitygiventoanydirectororofficerof theGroupor theCompanyduringthefinancialyear.TheGroupmaintains a liability insurance for certain directors and officers and the insurance costs incurred during thefinancialyearamountedtoRM9,000.
DIRECTORS’REPORT
GUH Holdings BerhadAnnual Report 2019 57
Auditors
Theauditors,CroweMalaysiaPLT,haveexpressedtheirwillingnesstocontinueinoffice.Theauditors’remunerationisdisclosedinNote27tothefinancialstatements.Therewasnoindemnitygiventoorliabilityinsuranceeffectedfortheauditorsduringthefinancialyear.
Signed in accordance with a resolution of the directors dated 13 May 2020
Tan Sri Dato’ Seri H’ng Bok San, JPPSM, DPPN, DGPN, DSPN, PKT, PJK
Datuk Seri Kenneth H’ng Bak TeeDGSM, DPNS, DSPN, PKT, PJM
DIRECTORS’REPORT
GUH Holdings BerhadAnnual Report 201958
In theopinionof thedirectors, thefinancialstatementssetoutonpages63 to121givea trueand fairviewof thefinancialpositionoftheGroupandtheCompanyasat31December2019andoftheirfinancialperformanceandcashflows for the financial year then ended in accordancewithMalaysian Financial Reporting Standards, InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.
Signed in accordance with a resolution of the directors dated 13 May 2020
Tan Sri Dato’ Seri H’ng Bok San, JPPSM, DPPN, DGPN, DSPN, PKT, PJK
Datuk Seri Kenneth H’ng Bak TeeDGSM, DPNS, DSPN, PKT, PJM
STATUTORYDECLARATION
I,YeohSawGaik(MIAmembershipno.:13104),beingtheofficerprimarilyresponsibleforthefinancialmanagementofGUHHoldingsBerhad,dosolemnlyandsincerelydeclarethatthefinancialstatementssetoutonpages63to121are,tothebestofmyknowledgeandbelief,correctandImakethissolemndeclarationconscientiouslybelievingthedeclarationtobetrue,andbyvirtueoftheStatutoryDeclarationsAct1960.
SubscribedandsolemnlydeclaredbytheabovenamedYeohSawGaikatGeorgeTownintheStateofPenangonthis13May2020
Yeoh Saw Gaik
BeforemeShaminiA/PMShanmugamNo.P157CommissionerforOaths
STATEMENTBYDIRECTORS
GUH Holdings BerhadAnnual Report 2019 59
Report on the audit of the financial statements
Opinion
We have audited the financial statements of GUH Holdings Berhad, which comprise the statements of financialpositionasat31December2019oftheGroupandtheCompany,andthestatementsofprofitorloss,statementsofcomprehensiveincome,statementsofchangesinequityandstatementsofcashflowsoftheGroupandtheCompanyforthefinancialyearthenended,andnotestothefinancialstatements,includingasummaryofsignificantaccountingpolicies,assetoutonpages63to121.
Inouropinion,theaccompanyingfinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheGroupandtheCompanyasat31December2019,andoftheirfinancialperformanceandcashflowsforthefinancialyearthenendedinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.
Basis for opinion
WeconductedourauditinaccordancewithapprovedstandardsonauditinginMalaysiaandInternationalStandardsonAuditing.OurresponsibilitiesunderthosestandardsarefurtherdescribedintheAuditors’ responsibilities for the audit of the financial statementssectionofourreport.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.
Independence and other ethical responsibilities
WeareindependentoftheGroupandtheCompanyinaccordancewiththeBy-Laws (on Professional Ethics, Conduct and Practice)oftheMalaysianInstituteofAccountants(“By-Laws”)andtheInternationalEthicsStandardsBoardforAccountants’Code of Ethics for Professional Accountants (“IESBACode”), and we have fulfilled our other ethicalresponsibilitiesinaccordancewiththeBy-LawsandtheIESBACode.
Key audit matters
Keyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsignificanceinourauditofthefinancialstatementsoftheGroupandtheCompanyofthecurrentperiod.ThesematterswereaddressedinthecontextofourauditofthefinancialstatementsoftheGroupandtheCompanyasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.
Key audit matter How our audit addressed the key audit matter
Valuationofinventories(RefertoNotes3and10tothefinancialstatements)
TheGroupcarriessignificantinventories.Theassessmentof inventorywrite-downsdue toexcessquantities,obsolescenceanddeclinein net realisable value below cost involvesjudgements and estimation uncertainty informingexpectationsabout futuresalesanddemands.
Ourauditproceduresincluded,amongothers:-• Obtaininganunderstandingof:-• theGroup’sinventorymanagementprocess;• how theGroup identifies and assesses inventorywrite-downs;and
• how the Group makes the accounting estimates for inventorywrite-downs.
• Reviewing the ageing analysis of inventories and testing thereliabilitythereof.
• Examiningtheperpetualrecordsfor inventorymovementsandtoidentifyslowmovingageditems.
• Makinginquiriesofmanagementregardingtheactionplanstoclearslowmovingagedandobsoleteinventories.
• Reviewingthenetrealisablevalueofmajorinventories.• Evaluatingthereasonablenessandadequacyoftheallowanceforinventoriesrecognisedforidentifiedexposures.
INDEPENDENTAUDITORS’REPORTTOTHEMEMBERSOFGUH HOLDINGS BERHAD
196101000062(4104-W)(IncorporatedinMalaysia)
GUH Holdings BerhadAnnual Report 201960
INDEPENDENTAUDITORS’REPORTTOTHEMEMBERSOFGUH HOLDINGS BERHAD196101000062(4104-W)(IncorporatedinMalaysia)
Key audit matter How our audit addressed the key audit matter
Impairmentof receivables (Refer toNotes3and11tothefinancialstatements)
TheGroupcarriessignificantreceivablesandissubject tomajorcredit riskexposure.TheGrouprecogniseslossallowanceforexpectedcredit losses on receivables based on anassessmentofcredit risk.Suchassessmentinvolves judgements and estimationuncertainty in analysing information aboutpastevents,currentconditionsandforecastsoffutureeconomicconditions.
Ourauditproceduresincluded,amongothers:-• Obtaininganunderstandingof:-• theGroup’scontroloverthereceivablecollectionprocess;• how the Group identifies and assesses the impairment ofreceivables;and
• howtheGroupmakestheaccountingestimatesforimpairment.• Reviewingtheageinganalysisandpastduestatusofreceivablesandtestingthereliabilitythereof.
• Reviewing thesubsequentcashcollections formajor receivablesandoverdueamounts.
• Making inquiries of management regarding the action plans torecoveroverdueamounts.
• Comparingandchallengingmanagement’sviewontherecoverabilityofoverdueamountstohistoricalpatternsofcollections.
• Reviewing the computation of historical observed default ratesandadjustmentforforward-lookingestimatesusedtodeveloptheprovisionmatrix.
• Evaluatingthereasonablenessandadequacyoftheresultinglossallowancerecognised.
Wehavedeterminedthat therearenokeyauditmatterstocommunicate inourreport inrespectof theauditof thefinancialstatementsoftheCompany.
Information other than the financial statements and auditors’ report thereon
ThedirectorsoftheCompanyareresponsiblefortheotherinformation.Theotherinformationcomprisestheinformationincludedintheannualreport,butdoesnot includethefinancialstatementsoftheGroupandtheCompanyandourauditors’reportthereon.
OuropiniononthefinancialstatementsoftheGroupandtheCompanydoesnotcovertheotherinformationandwedonotexpressanyformofassuranceconclusionthereon.
InconnectionwithourauditofthefinancialstatementsoftheGroupandtheCompany,ourresponsibilityistoreadtheotherinformationand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwiththefinancialstatementsoftheGroupandtheCompanyorourknowledgeobtainedintheaudit,orotherwiseappearstobemateriallymisstated.
If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementofthisotherinformation,wearerequiredtoreportthatfact.Wehavenothingtoreportinthisregard.
Responsibilities of the directors for the financial statements
ThedirectorsoftheCompanyareresponsibleforthepreparationoffinancialstatementsoftheGroupandtheCompanythat give a true and fair view in accordancewithMalaysian Financial Reporting Standards, International FinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.ThedirectorsarealsoresponsibleforsuchinternalcontrolasthedirectorsdetermineisnecessarytoenablethepreparationoffinancialstatementsoftheGroupandtheCompanythatarefreefrommaterialmisstatement,whetherduetofraudorerror.
InpreparingthefinancialstatementsoftheGroupandtheCompany,thedirectorsareresponsibleforassessingtheGroup’sandtheCompany’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlessthedirectorseitherintendtoliquidatetheGrouportheCompanyortoceaseoperations,orhavenorealisticalternativebuttodoso.
GUH Holdings BerhadAnnual Report 2019 61
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 theCompanyasawholeare free frommaterialmisstatement,whetherdue to fraudorerror,and to issueanauditors’reportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithapprovedstandardsonauditinginMalaysiaandInternationalStandardsonAuditingwillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.
Aspartofanaudit inaccordancewithapprovedstandardsonauditing inMalaysiaand InternationalStandardsonAuditing,weexerciseprofessionaljudgementandmaintainprofessionalscepticismthroughouttheaudit.Wealso:-
• IdentifyandassesstherisksofmaterialmisstatementofthefinancialstatementsoftheGroupandtheCompany,whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that issufficientandappropriate toprovideabasis forouropinion.The riskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.
• Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheGroup’sandtheCompany’sinternalcontrol.
• Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelateddisclosuresmadebythedirectors.
• Concludeontheappropriatenessofthedirectors’useofthegoingconcernbasisofaccountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheGroup’sortheCompany’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,wearerequiredtodrawattentioninourauditors’reporttotherelateddisclosuresinthefinancialstatementsoftheGroupandtheCompanyor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditors’report.However,futureeventsorconditionsmaycausetheGrouportheCompanytoceasetocontinueasagoingconcern.
• Evaluatetheoverallpresentation,structureandcontentofthefinancialstatementsoftheGroupandtheCompany,includingthedisclosures,andwhetherthefinancialstatementsoftheGroupandtheCompanyrepresenttheunderlyingtransactionsandeventsinamannerthatachievesfairpresentation.
• ObtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithintheGrouptoexpressanopiniononthefinancialstatementsoftheGroup.Weareresponsibleforthedirection,supervisionandperformanceofthegroupaudit.Weremainsolelyresponsibleforourauditopinion.
Wecommunicatewith thedirectorsregarding,amongothermatters, theplannedscopeandtimingof theauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.
Wealsoprovide thedirectorswithastatement thatwehavecompliedwith relevantethical requirements regardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.
Fromthematterscommunicatedwiththedirectors,wedeterminethosemattersthatwereofmostsignificanceintheauditofthefinancialstatementsoftheGroupandtheCompanyofthecurrentperiodandarethereforethekeyauditmatters.Wedescribethesemattersinourauditors’reportunlesslaworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.
INDEPENDENTAUDITORS’REPORTTOTHEMEMBERSOFGUH HOLDINGS BERHAD
196101000062(4104-W)(IncorporatedinMalaysia)
GUH Holdings BerhadAnnual Report 201962
Report on other legal and regulatory requirements
InaccordancewiththerequirementsoftheCompaniesAct2016inMalaysia,wereportthatthesubsidiariesofwhichwehavenotactedasauditorsaredisclosedinNote7tothefinancialstatements.
Other matters
ThisreportismadesolelytothemembersoftheCompany,asabody,inaccordancewithSection266oftheCompaniesAct2016inMalaysiaandfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport.
Crowe Malaysia PLT 201906000005(LLP0018817-LCA)&AF1018CharteredAccountants
Eddy Chan Wai Hun02182/10/2021JCharteredAccountant
Date:13May2020
Penang
INDEPENDENTAUDITORS’REPORTTOTHEMEMBERSOFGUH HOLDINGS BERHAD196101000062(4104-W)(IncorporatedinMalaysia)
GUH Holdings BerhadAnnual Report 2019 63
CONSOLIDATEDSTATEMENTOFFINANCIALPOSITIONASAT31DECEMBER2019
Theannexednotesformanintegralpartofthesefinancialstatements.
2019 2018Note RM’000 RM’000
Non-current assetsProperty,plantandequipment 4 117,515 152,326Investmentproperties 5 37,886 36,091Right-of-useassets 6 27,407 0Investmentsinassociates 8 15,963 17,463Otherinvestments 9 1 1Inventories 10 169,678 167,332Prepayments 750 0Deferredtaxassets 12 802 1,069
370,002 374,282
Current assetsInventories 10 120,525 124,246Biologicalassets 13 118 346Contractcosts 14 116 60Contractassets 15 7,920 8,130Receivables 11 62,593 71,228Prepayments 3,041 2,188Currenttaxassets 478 2,711Cashandcashequivalents 16 102,366 106,514
297,157 315,423
Current liabilitiesContractliabilities 15 2,393 8,353Payables 17 77,352 89,527Loansandborrowings 18 23,772 22,508Leaseliabilities 19 505 0Derivatives 20 0 37Provisionforonerouscontract 21 0 144Currenttaxliabilities 1,687 1,943
105,709 122,512Net current assets 191,448 192,911
Non-current liabilitiesLoansandborrowings 18 35,562 44,309Leaseliabilities 19 498 0Retirementbenefits 22 6,544 4,705Deferredtaxliabilities 12 11,882 12,468
54,486 61,482
Net assets 506,964 505,711
EquitySharecapital 23 277,992 277,992Treasuryshares 23 (148) (4,546)Reserves 229,131 232,268EquityattributabletoownersoftheCompany 506,975 505,714Non-controllinginterests 24 (11) (3)Total equity 506,964 505,711
GUH Holdings BerhadAnnual Report 201964
Theannexednotesformanintegralpartofthesefinancialstatements.
CONSOLIDATEDSTATEMENTOFPROFITORLOSSFORTHEFINANCIALYEARENDED31DECEMBER2019
2019 2018Note RM’000 RM’000
Revenue 25 335,990 349,124
Costofrevenue (300,914) (321,252)
Grossprofit 35,076 27,872
Impairmentgains/(losses)onfinancialassets 26 7 (76)
Interestincome 2,249 2,393
Otherincome 2,094 1,558
Administrativeexpenses (20,069) (19,898)
Distributionexpenses (5,869) (6,000)
Financecosts (3,305) (3,098)
Otherexpenses (1,663) (1,903)
Shareofassociates’loss (1,424) (51)
Profitbeforetax 27 7,096 797
Taxexpense 29 (2,086) (3,483)
Profit/(Loss)forthefinancialyear 5,010 (2,686)
Profit/(Loss)forthefinancialyearattributableto:--OwnersoftheCompany 5,018 (2,681)-Non-controllinginterests 24 (8) (5)
5,010 (2,686)
Earnings/(Loss)pershare:- 30-Basic(sen) 1.81 (0.97)-Diluted(sen) 1.81 (0.97)
GUH Holdings BerhadAnnual Report 2019 65
CONSOLIDATEDSTATEMENTOFCOMPREHENSIVEINCOMEFORTHEFINANCIALYEARENDED31DECEMBER2019
Theannexednotesformanintegralpartofthesefinancialstatements.
2019 2018RM’000 RM’000
Profit/(Loss)forthefinancialyear 5,010 (2,686)
Othercomprehensiveincome:-
Item that will not be reclassified to profit or loss:--Remeasurementofdefinedbenefitliability (285) 0Item that may be reclassified subsequently to profit or loss:--Currencytranslationdifferencesforforeignoperations (3,472) (4,025)
Totalothercomprehensiveincomeforthefinancialyear (3,757) (4,025)
Comprehensiveincomeforthefinancialyear 1,253 (6,711)
Comprehensiveincomeforthefinancialyearattributableto:--OwnersoftheCompany 1,261 (6,706)-Non-controllinginterests (8) (5)
1,253 (6,711)
GUH Holdings BerhadAnnual Report 201966
Theannexednotesformanintegralpartofthesefinancialstatements.
Non-distributable
Distributable
Equity
Currency
attributable
Non-
Share
Treasury
Capital
translation
Retained
toownersof
controlling
Total
capital
shares
reserve*
reserve
profits
theCom
pany
interests
equity
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
At1January2018
277,992
(4,546)
12,807
37,937
188,230
512,420
2512,422
Currencytranslationdifferencesforforeignoperations
(representingothercom
prehensiveincomeforthe
financialyear)
00
0(4,025)
0(4,025)
0(4,025)
Lossforthefinancialyear
00
00
(2,681)
(2,681)
(5)
(2,686)
Com
prehensiveincomeforthefinancialyear
00
0(4,025)
(2,681)
(6,706)
(5)
(6,711)
Transfertocapitalreserve
00
930
0(930)
00
0
At31Decem
ber2018
277,992
(4,546)
13,737
33,912
184,619
505,714
(3)
505,711
Rem
easurementofdefinedbenefitliability
00
00
(285)
(285)
0(285)
Currencytranslationdifferencesforforeignoperations
00
0(3,472)
0(3,472)
0(3,472)
Totalothercom
prehensiveincomeforthefinancialyear
00
0(3,472)
(285)
(3,757)
0(3,757)
Profit/(Loss)forthefinancialyear
00
00
5,018
5,018
(8)
5,010
Com
prehensiveincomeforthefinancialyear
00
0(3,472)
4,733
1,261
(8)
1,253
Distributionoftreasurysharesassharedividends
(representingtotaltransactionswithowners)
04,398
00
(4,398)
00
0
Transfertocapitalreserve
00
254
0(254)
00
0
At31Decem
ber2019
277,992
(148)
13,991
30,440
184,700
506,975
(11)
506,964
* Th
is re
pres
ents
the
cum
ulat
ive
amou
nt tr
ansf
erre
d fro
m th
e re
tain
ed p
rofit
s of
a s
ubsi
diar
y un
der t
he s
tatu
tory
requ
irem
ents
of t
he P
eopl
e’s
Rep
ublic
of C
hina
.
CONSOLIDAT
EDSTATE
MENTOFCHANGESIN
EQUITY
FORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 67
Theannexednotesformanintegralpartofthesefinancialstatements.
CONSOLIDATEDSTATEMENTOFCASHFLOWSFORTHEFINANCIALYEARENDED31DECEMBER2019
2019 2018Note RM’000 RM’000
Cash flows from operating activitiesProfitbeforetax 7,096 797Adjustmentsfor:-Depreciation 16,294 15,570Fairvaluechangesinbiologicalassets 228 51Fairvaluelossesonfinancialinstruments 5 286Gainondisposalofproperty,plantandequipment (21) (24)Impairment(gains)/lossesonfinancialassets (7) 76Interestexpense 3,305 3,098Interestincome (2,249) (2,393)Inventorieswrittendown 565 273Property,plantandequipmentwrittenoff 34 9Provisionforretirementbenefits 1,554 542Reversalofinventorieswrittendown (448) (309)Shareofassociates’loss 1,424 51Unrealisedlossonforeignexchange 192 304Operatingprofitbeforeworkingcapitalchanges 27,972 18,331Changesin:-Inventories 971 2,169Contractcosts (56) (60)Contractassets 210 4,290Receivables 8,217 9,242Prepayments (1,603) (505)Contractliabilities (5,960) 4,982Payables (11,976) (6,067)Derivatives (37) 0Provisionforonerouscontract (144) (860)Cashgeneratedfromoperations 17,594 31,522Taxpaid (3,303) (6,402)Taxrefunded 2,926 39Netcashfromoperatingactivities 17,217 25,159
Cash flows from investing activitiesAcquisitionofproperty,plantandequipment (12,271) (13,181)Acquisitionofright-of-useassets 31 (41) 0Additionsofinvestmentproperties (292) (19,927)Costofinvestmentpropertiesrefunded 1,955 0Interestreceived 2,249 2,393Proceedsfromdisposalofotherinvestments 0 407Proceedsfromdisposalofproperty,plantandequipment 87 69Netcashusedininvestingactivities (8,313) (30,239)
GUH Holdings BerhadAnnual Report 201968
2019 2018Note RM’000 RM’000
Cash flows from financing activitiesChangesintermdepositspledgedassecurity 3,177 (713)Decreaseinshort-termloansandborrowings(net) 31 (1,635) (4,832)Drawdownoftermloans 31 6,214 36,874Interestpaid (3,271) (3,242)Paymentofleaseliabilities 31 (468) 0Repaymentofhirepurchaseobligations 31 0 (253)Repaymentoftermloans 31 (12,160) (9,671)Netcash(usedin)/fromfinancingactivities (8,143) 18,163
Currencytranslationdifferences (2,397) (2,941)
Net(decrease)/increaseincashandcashequivalents (1,636) 10,142
Cashandcashequivalentsbroughtforward 102,930 92,788
Cashandcashequivalentscarriedforward 16 101,294 102,930
CONSOLIDATEDSTATEMENTOFCASHFLOWSFORTHEFINANCIALYEARENDED31DECEMBER2019(cont’d)
Theannexednotesformanintegralpartofthesefinancialstatements.
GUH Holdings BerhadAnnual Report 2019 69
STATEMENTOFFINANCIALPOSITIONASAT31DECEMBER2019
Theannexednotesformanintegralpartofthesefinancialstatements.
2019 2018Note RM’000 RM’000
Non-current assetsProperty,plantandequipment 4 153 713Investmentproperties 5 23,125 23,125Right-of-useassets 6 500 0Investmentsinsubsidiaries 7 213,415 212,836Investmentinassociate 8 3,023 3,023Otherinvestments 9 1 1Receivables 11 197,521 195,883
437,738 435,581
Current assetsReceivables 11 8,317 3,155Prepayments 37 5Currenttaxassets 1 1Cashandcashequivalents 16 3,516 5,399
11,871 8,560
Current liabilitiesPayables 17 22,126 21,915Loansandborrowings 18 0 116Leaseliabilities 19 124 0
22,250 22,031Net current liabilities (10,379) (13,471)
Non-current liabilitiesLoansandborrowings 18 0 204Leaseliabilities 19 273 0Retirementliabilities 22 6,544 4,705Deferredtaxliabilities 12 1,099 1,099
7,916 6,008
Net assets 419,443 416,102
EquitySharecapital 23 277,992 277,992Treasuryshares 23 (148) (4,546)Retainedprofits 141,599 142,656Total equity 419,443 416,102
GUH Holdings BerhadAnnual Report 201970
Theannexednotesformanintegralpartofthesefinancialstatements.
STATEMENTOFPROFITORLOSSFORTHEFINANCIALYEARENDED31DECEMBER2019
2019 2018Note RM’000 RM’000
Revenue 25 18,528 18,722
Costofservicesrendered (8,437) (6,791)
Grossprofit 10,091 11,931
Interestincome 88 245
Otherincome 714 7,372
Administrativeexpenses (2,327) (2,102)
Impairmentlossesonfinancialassets 26 (4,216) (4,803)
Financecosts (20) (19)
Otherexpenses (704) (1,093)
Profitbeforetax 27 3,626 11,531
Taxexpense 29 0 (549)
Profitforthefinancialyear 3,626 10,982
GUH Holdings BerhadAnnual Report 2019 71
Theannexednotesformanintegralpartofthesefinancialstatements.
STATEMENTOFCOMPREHENSIVEINCOMEFORTHEFINANCIALYEARENDED31DECEMBER2019
2019 2018RM’000 RM’000
Profitforthefinancialyear 3,626 10,982
Othercomprehensiveincome:-
Item that will not be reclassified to profit or loss:--Remeasurementofdefinedbenefitliability (285) 0
Othercomprehensiveincomeforthefinancialyear (285) 0
Comprehensiveincomeforthefinancialyear 3,341 10,982
GUH Holdings BerhadAnnual Report 201972
Theannexednotesformanintegralpartofthesefinancialstatements.
STATEMENTOFCHANGESINEQUITYFORTHEFINANCIALYEARENDED31DECEMBER2019
Share Treasury Retained Totalcapital shares profits equityRM’000 RM’000 RM’000 RM’000
At1January2018 277,992 (4,546) 131,674 405,120
Profit(representingcomprehensiveincome)forthefinancialyear 0 0 10,982 10,982
At31December2018 277,992 (4,546) 142,656 416,102
Remeasurementofdefinedbenefitliability(representingothercomprehensiveincomeforthefinancialyear) 0 0 (285) (285)Profitforthefinancialyear 0 0 3,626 3,626Comprehensiveincomeforthefinancialyear 0 0 3,341 3,341
Distributionoftreasurysharesassharedividends(representingtotaltransactionswithowners) 0 4,398 (4,398) 0
At31December2019 277,992 (148) 141,599 419,443
GUH Holdings BerhadAnnual Report 2019 73
Theannexednotesformanintegralpartofthesefinancialstatements.
STATEMENTOFCASHFLOWSFORTHEFINANCIALYEARENDED31DECEMBER2019
2019 2018Note RM’000 RM’000
Cash flows from operating activitiesProfitbeforetax 3,626 11,531Adjustmentsfor:-Depreciation 333 353Dividendincome (12,400) (13,468)Fairvaluelossesonfinancialinstruments 0 233Gainondisposalofproperty,plantandequipment (60) 0Impairmentlossesonfinancialassets 4,216 4,803Interestexpense 20 19Interestincome (88) (245)Property,plantandequipmentwrittenoff 1 0Provisionforretirementbenefits 1,554 542Reversalofimpairmentlossoninvestmentsinsubsidiaries (579) (7,368)Unrealised(gain)/lossonforeignexchange (75) 154Operatinglossbeforeworkingcapitalchanges (3,452) (3,446)Changesin:-Receivables (3,088) (3,582)Prepayments (32) 2Payables 286 (13,003)Netcashusedinoperatingactivities (6,286) (20,029)
Cash flows from investing activitiesAcquisitionofproperty,plantandequipment (21) (8)Acquisitionofright-of-useassets 31 (26) 0Dividendsreceived 4,472 13,468Interestreceived 88 245Proceedsfromdisposalofotherinvestments 0 407Proceedsfromdisposalofproperty,plantandequipment 60 0Netcashfrominvestingactivities 4,573 14,112
Cash flows from financing activitiesInterestpaid (20) (19)Paymentofleaseliabilities 31 (150) 0Repaymentofhirepurchaseobligations 31 0 (148)Netcashusedinfinancingactivities (170) (167)
Netdecreaseincashandcashequivalents (1,883) (6,084)
Cashandcashequivalentsbroughtforward 5,399 11,483
Cashandcashequivalentscarriedforward 16 3,516 5,399
GUH Holdings BerhadAnnual Report 201974
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
1. General information
TheCompanyisapubliccompanylimitedbyshares,incorporatedanddomiciledinMalaysiaandlistedontheMainMarketofBursaMalaysiaSecuritiesBerhad.
TheprincipalactivitiesoftheCompanyarethoseofinvestmentholdingandprovisionofmanagementservicestoitssubsidiaries.TheprincipalactivitiesofthesubsidiariesaredisclosedinNote7.
Theregisteredofficeandprincipalplaceofbusinessof theCompanyare locatedatPartofPlot1240&1241,BayanLepasFreeIndustrialZone,Phase3,BayanLepas,11900Penang,Malaysia.
Theconsolidatedfinancialstatementssetoutonpages63to68togetherwiththenotestheretocovertheCompanyanditssubsidiaries(“Group”)andtheGroup’s interests inassociates.Theseparatefinancialstatementsof theCompanysetoutonpages69to73togetherwiththenotestheretocovertheCompanysolely.
ThepresentationcurrencyofthefinancialstatementsisRinggitMalaysia(“RM”)andallvaluesareroundedtothenearestthousand(“RM’000”)unlessotherwiseindicated.
Thefinancialstatementswereauthorisedforissueinaccordancewitharesolutionofthedirectorsdated13May2020.
2. Significant accounting policies
2.1 Basis of preparation of financial statements
ThefinancialstatementsoftheGroupandtheCompanyarepreparedunderthehistoricalcostconvention,modifiedtoincludeotherbasesofmeasurementasdisclosedinothersectionsofthesignificantaccountingpolicies,andinaccordancewithMalaysianFinancialReportingStandards(“MFRSs”),InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.
ThefollowingMFRSsbecameeffectiveforthefinancialyearunderreview:-
MFRS
Effectiveforannualperiodsbeginningonor
after
MFRS16Leases 1January2019ICInterpretation23Uncertainty over Income Tax Treatments 1January2019AmendmentstoMFRS9Prepayment Features with Negative Compensation 1January2019AmendmentstoMFRS119Plan Amendment, Curtailment or Settlement 1January2019AmendmentstoMFRS128Long-term Interests in Associates and Joint Ventures 1January2019AnnualImprovementstoMFRSStandards2015-2017Cycle 1January2019TheinitialapplicationoftheaboveMFRSsdidnothaveanysignificantimpactsonthefinancialstatementsexceptasdisclosedinNote2.2.
TheGroupandtheCompanyhavenotappliedthefollowingMFRSswhichhavebeenissuedasattheendofthereportingperiodbutarenotyeteffective:-
MFRS(issuedasattheendofthereportingperiod)
Effectiveforannualperiodsbeginningonor
after
MFRS17Insurance Contracts 1January2021AmendmentstoMFRS3Definition of a Business 1January2020AmendmentstoMFRS9,MFRS139andMFRS7Interest Rate Benchmark Reform 1January2020AmendmentstoMFRS10andMFRS128Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Deferred
AmendmentstoMFRS101andMFRS108Definition of Material 1January2020AmendmentstoReferencestotheConceptualFrameworkinMFRSStandards 1January2020ManagementforeseesthattheinitialapplicationoftheaboveMFRSswillnothaveanysignificantimpactsonthefinancialstatements.
GUH Holdings BerhadAnnual Report 2019 75
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
2. Significant accounting policies (cont’d)
2.2 Changes in accounting policies
TheinitialapplicationofMFRS16Leases,whichreplacesMFRS117Leasesandotherrelatedinterpretations,has resulted in certain changes in accounting policies for lessees.MFRS 16 eliminates the distinctionbetweenfinanceandoperatingleasesforlesseesandintroducesasinglelesseeaccountingmodelwhichrequiresa lesseetorecogniseassetsand liabilities forall leaseswithcertainrecognitionexemptions.Alessee is required to recognisea right-of-useasset (representing its right to use theunderlying leasedasset)andaleaseliability(representingitsobligationtomakeleasepayments).
TheGroupand theCompanyhaveelected toapply thenewrequirementsofMFRS16 from1January2019withthefollowingcumulativeeffectsofinitialapplicationrecognisedatthatdatewithoutrestatingthecomparativeinformation:-
Note
Broughtforwardfrom
precedingyear
RM’000
EffectofadoptingMFRS16RM’000
AdjustedRM’000
Consolidated statement of financial position as at 1 January 2019 (extract)
Property,plantandequipment (i) 152,326 (28,467) 123,859
Right-of-useassets (i)(ii) 0 28,756 28,756
Loansandborrowings (i) 66,817 (601) 66,216
Leaseliabilities (i)(ii) 0 890 890
Totalequity 505,711 0 505,711
Statement of financial positionas at 1 January 2019 (extract)
Property,plantandequipment (i) 713 (411) 302
Right-of-useassets (i) 0 411 411
Loansandborrowings (i) 320 (320) 0
Leaseliabilities (i) 0 320 320
Totalequity 416,102 0 416,102
(i) ForleasesthatwerepreviouslyclassifiedasfinanceleasesinaccordancewithMFRS117,thecarryingamountsoftheright-of-useassetsandleaseliabilitiesat1January2019werethosebroughtforwardfrom31December2018measuredapplyingMFRS117.Theunderlyingassetsand liabilitieswerereclassifiedfromproperty,plantandequipmentandloansandborrowingsrespectively,andwouldbeaccountedforinaccordancewithMFRS16from1January2019.
(ii) For leases thatwere previously classified as operating leases in accordancewithMFRS117, theGrouprecognisedandmeasuredtheright-of-useassetsandleaseliabilitiesat1January2019atthepresentvalueof the remaining leasepayments,discountedusingaweightedaverage incrementalborrowingrateof5.00%perannum.Asapracticalexpedient,theGrouphaselectednottoapplythetransitionrequirementstoleasesforwhichtheleasetermwouldendwithin12monthsof1January2019.
GUH Holdings BerhadAnnual Report 201976
2. Significant accounting policies (cont’d)
2.3 Business combinations
Abusinesscombinationisatransactionorothereventinwhichanacquirerobtainscontrolofoneormorebusinesses.
Business combinations are accounted for using the acquisitionmethod.Under the acquisitionmethod,theconsiderationtransferred,theidentifiableassetsacquiredandtheliabilitiesassumedaremeasuredattheiracquisition-datefairvalues.Thecomponentsofnon-controllingintereststhatarepresentownershipinterestsaremeasuredatthepresentownershipinstruments’proportionateshareintherecognisedamountsof the identifiable net assets acquired.All other components of non-controlling interests aremeasuredat their acquisition-date fair values. In a business combination achieved in stages, the previously heldequity interest in theacquiree is remeasuredat itsacquisition-date fair valueandany resultinggainorlossisrecognisedinprofitorloss.Allacquisition-relatedcosts,otherthanthecoststoissuedebtorequitysecurities,arerecognisedinprofitorlossasincurred.
Goodwillattheacquisitiondateismeasuredastheexcessof(a)over(b)below:-
(a) theaggregateof:-(i) theacquisition-datefairvalueoftheconsiderationtransferred;(ii) theamountofanynon-controllinginterests;and(iii) inabusinesscombinationachieved instages, theacquisition-date fairvalueof thepreviously
heldequityinterestintheacquiree.
(b) the net of the acquisition-date fair values of the identifiable assets acquired and the liabilitiesassumed.
Goodwillisrecognisedasanassetattheaforementionedamountlessaccumulatedimpairmentlosses,ifany.TheimpairmentpolicyisdisclosedinNote2.10.Whentheabove(b)exceeds(a),theexcessrepresentsabargainpurchasegainand,afterreassessment,isrecognisedinprofitorloss.
2.4 Basis of consolidation
Asubsidiary isanentity that iscontrolledbyanotherentity.An investorcontrolsan investeewhen it isexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeinvesteeandhastheabilitytoaffectthosereturnsthroughitspowerovertheinvestee.
The consolidated financial statements incorporate the financial statements of the Company and itssubsidiariesmadeup to the endof the reporting period using the acquisitionmethod, except forGUHDevelopment Sdn. Bhd., the acquisition of which did not constitute a business combination and wasaccountedforasanassetacquisition.Asubsidiaryisconsolidatedfromtheacquisitiondate,beingthedateonwhichcontrolisobtained,andcontinuestobeconsolidateduntilthedatewhencontrolislost.Intragroupbalances,transactions,incomeandexpensesareeliminatedinfullonconsolidation.Totalcomprehensiveincomeisattributedtotheownersoftheparentandtothenon-controllinginterestsevenifthisresultsinthenon-controlling interestshavingadeficitbalance.Allchanges intheparent’sownership interest inasubsidiarythatdonotresultinalossofcontrolareaccountedforasequitytransactions.
Upon lossof controlofasubsidiary, theassets (includinganygoodwill) and liabilitiesof,andanynon-controlling interests in thesubsidiaryarederecognised.Allamountsrecognised inothercomprehensiveincomeinrelationtothesubsidiaryareaccountedforonthesamebasisaswouldberequirediftherelatedassetsorliabilitieshadbeendirectlydisposedof.Anyconsiderationreceivedandanyinvestmentretainedintheformersubsidiaryarerecognisedattheirfairvalues.Theresultingdifferenceisthenrecognisedasagainorlossinprofitorloss.
2.5 Property, plant and equipment
Property,plantandequipmentarestatedatcostlessaccumulateddepreciationandaccumulatedimpairmentlosses,ifany.TheimpairmentpolicyisdisclosedinNote2.10.
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 77
2. Significant accounting policies (cont’d)
2.5 Property, plant and equipment (cont’d)
Freehold land and capitalwork-in-progress are not depreciated. Leasehold landwas depreciated on astraight-linebasisovertheleasetermsof48to60years.Bearerplants,whichrepresentthecapitalisedcostsonnewplantingandreplantingofoilpalm,aredepreciatedonastraight-linebasisovertheestimatedusefullifeoftheoilpalmof20years.Otherproperty,plantandequipmentaredepreciatedonastraight-linebasisovertheestimatedusefullivesoftheassetsusingthefollowingannualrates:-
Buildings 2-5%Plantandmachinery 10-20%Furniture,fittingsandofficeequipment 5-50%Motorvehicles 20-25%
Theresidualvalue,usefullifeanddepreciationmethodofanassetarereviewedatleastattheendofeachreportingperiodandanychangesinexpectationsfrompreviousestimatesareaccountedforprospectivelyaschangesinaccountingestimates.
2.6 Investment properties
Investmentpropertyispropertyheld(bytheownerorthelesseeasaright-of-useasset)toearnrentalsorforcapitalappreciationorboth.Investmentpropertyisstatedatcost lessaccumulateddepreciationandaccumulatedimpairmentlosses,ifany.TheimpairmentpolicyisdisclosedinNote2.10.
Freehold land isnotdepreciated.Buildingsaredepreciatedonastraight-linebasisover theirestimatedusefullivesof33to50years.
2.7 Leases
Aleaseisacontract,orpartofacontract,thatconveystherighttouseanassetforaperiodoftimeinexchangeforconsideration.
Lessor accounting
WhentheGrouportheCompanyactsasalessor,itclassifieseachleaseaseitheranoperatingleaseorafinancelease.Afinanceleasetransferssubstantiallyalltherisksandrewardsincidentaltoownershipofanunderlyingassettothelessee,whereasanoperatingleasedoesnot.
Leasepaymentsfromoperatingleasesarerecognisedasincomeonastraight-linebasisovertheleaseterm.TheGroupandtheCompanyhavenotenteredintoanyfinancelease.
Lessee accounting
Initialrecognitionandmeasurement
WhentheGrouportheCompanyactsasalessee,itrecognisesaright-of-useasset(representingitsrighttousetheunderlyingleasedasset)andaleaseliability(representingitsobligationtomakeleasepayments)at the commencement date.TheGroup and theCompany have elected not to apply such recognitionprinciple to short-term leases (whichhavea lease termof 12monthsor less) and leasesof low-valueassets.Theleasepaymentsassociatedwiththoseleasesarerecognisedasanexpenseonastraight-linebasisovertheleaseterm.
Aright-of-useassetisinitiallyrecognisedatcost,whichcomprisestheinitialamountofleaseliability,anyleasepaymentsmadeatorbeforethecommencementdate(lessanyleaseincentives),anyinitialdirectcostsandanyestimateddismantling,removingandrestoringcosts.
Aleaseliabilityisinitiallyrecognisedatthepresentvalueoftheunpaidleasepayments,discountedusingtheinterestrateimplicitintheleaseor,ifthatratecannotbereadilydetermined,thelessee’sincrementalborrowingrate.Theunpaidleasepaymentsincludedinthemeasurementofleaseliabilitycomprisefixedpayments (less any lease incentives), variable lease payments linked to an index or a rate, expectedamounts payable under residual valueguarantees, the exercise price of a purchaseoption reasonablycertaintobeexercisedandthepenaltiesofaterminationoptionreasonablycertaintobeexercised.
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2. Significant accounting policies (cont’d)
2.7 Leases (cont’d)
Lessee accounting (cont’d)
Subsequentmeasurement
A right-of-useasset is subsequentlymeasuredat cost lessaccumulateddepreciationandaccumulatedimpairmentlosses,ifany,andadjustedforanyremeasurementofleaseliability.TheimpairmentpolicyisdisclosedinNote2.10.
Iftheleasetransfersownershipoftheunderlyingassettothelesseebytheendoftheleasetermorifthecostof the right-of-useasset reflects thatapurchaseoptionwill beexercised, the right-of-useasset isdepreciatedonastraight-linebasisfromthecommencementdatetotheendofitsusefullife.Otherwise,theright-of-useassetisdepreciatedfromthecommencementdatetotheearlieroftheendofitsusefullifeortheendoftheleaseterm.
Aleaseliabilityissubsequentlymeasuredatamortisedcost,andremeasuredtoreflectanyreassessment(arisingfromchangestotheleasepayments)orleasemodifications.
Previousfinancialyears
Priorto1January2019,theGroupandtheCompanyclassifiedeachleaseaseitheranoperatingleaseorafinancelease.
Afinancelease,includinghirepurchase,wasinitiallyrecognisedasanassetandliabilityatthefairvalueof the leasedassetor, if lower, thepresentvalueof theminimum leasepayments.Theminimum leasepaymentsweresubsequentlyapportionedbetweenthefinancechargeandthereductionoftheoutstandingliabilitysoastoproduceaconstantperiodicrateofinterestontheremainingbalanceoftheliability.Thedepreciationpolicyfordepreciableleasedassetswasconsistentwiththatforequivalentownedassets.
Leasepaymentsunderanoperatingleasewererecognisedasanexpenseonastraight-linebasisovertheleaseterm.
2.8 Investments in subsidiaries
AsrequiredbytheCompaniesAct2016,theCompanypreparesseparatefinancialstatementsinadditiontotheconsolidatedfinancialstatements.IntheseparatefinancialstatementsoftheCompany,investmentsinsubsidiariesarestatedatcostlessimpairmentlosses,ifany.TheimpairmentpolicyisdisclosedinNote2.10.
2.9 Investments in associates
Anassociateisanentityoverwhichaninvestorhassignificantinfluence.Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsoftheinvesteebutisnotcontrolorjointcontrolofthosepolicies.
In the consolidated financial statements, investments in associates are accounted for using the equitymethod.Undertheequitymethod,theinvestmentisinitiallyrecognisedatcostandadjustedthereafterforthepost-acquisitionchanges in the investor’sshareof the investee’snetassets.Afterapplicationof theequitymethod,theinvestmentisassessedforanyobjectiveevidenceofimpairment.Ifanysuchevidenceexists,thecarryingamountoftheinvestmentistestedforimpairmentinaccordancewithNote2.10.
In theseparatefinancial statementsof theCompany, investments inassociatesarestatedat cost lessimpairmentlosses,ifany.TheimpairmentpolicyisdisclosedinNote2.10.
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2. Significant accounting policies (cont’d)
2.10 Impairment of non-financial assets
Attheendofeachreportingperiod,theGroupandtheCompanyassesswhetherthereisanyindicationthatanon-financialasset,otherthandeferredtaxassets,biologicalassetsstatedatfairvaluelesscostsofdisposal,inventories,contractcostsandcontractassets,maybeimpaired.Ifanysuchindicationexists,therecoverableamountoftheasset,beingthehigherofitsfairvaluelesscostsofdisposalanditsvalueinuse, isestimated. Irrespectiveofwhether there isany indicationof impairment,goodwill is tested forimpairmentannually.Anyexcessofthecarryingamountoftheassetoveritsrecoverableamountrepresentsanimpairmentlossandisrecognisedinprofitorloss.
Animpairmentlossonanasset,otherthangoodwill,isreversediftherehasbeenachangeintheestimatesusedtodeterminetherecoverableamountanditisreversedonlytotheextentthattheincreasedcarryingamountdoesnotexceed thecarryingamount thatwouldhavebeendetermined,netofdepreciationoramortisation, hadno impairment loss been recognised.The reversal is recognised in profit or loss.Animpairmentlossongoodwillisnotreversed.
2.11 Biological assets
Biological assets (excluding bearer plants but including the produce growing thereon) and agriculturalproduceharvestedtherefromaremeasuredatfairvaluelesscostsofdisposal.Anygainorlossarisingfrominitialrecognitionatorachangeinthefairvaluelesscostsofdisposalisrecognisedinprofitorloss.
2.12 Inventories
Property development
Inventoriesarevaluedatthelowerofcost(determinedprincipallyonthespecificidentificationbasis)andnetrealisablevalue.Costconsistsofcostsassociatedwiththeacquisitionofland,coststhatrelatedirectlyto a specific development project and other costs attributable to development activities in general andcanbeallocatedtotheproject.Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostsofcompletionandcostsnecessarytomakethesale.
Land held for property development is classified as non-current assets. It is transferred to propertydevelopmentcostsundercurrentassetswhendevelopmentactivitieshavecommencedandareexpectedtobecompletedwithinthenormaloperatingcycle.PropertydevelopmentcostsattributabletodevelopmentunitssoldarerecognisedinprofitorlossonasystematicbasisthatisconsistentwiththerecognitionofrelatedrevenueasdisclosedinNote2.21.Uponcompletionofdevelopmentproject,costsattributabletounsoldunitsaretransferredtocompleteddevelopmentunits.
Materials and goods
Inventoriesarevaluedatthelowerofcost(determinedprincipallyontheweightedaveragebasis)andnetrealisablevalue.Costconsistsofallcostsofpurchase,costsofconversionandothercosts incurred inbringingtheinventoriestotheirpresentlocationandcondition.Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostsofcompletionandcostsnecessarytomakethesale.
2.13 Contract costs
The incremental costs of obtaining a contract and costs incurred in fulfilling the contract (other thaninventories)arerecognisedasanassetifthosecostsareexpectedtoberecovered.TheassetisamortisedonasystematicbasisthatisconsistentwiththerecognitionofrelatedrevenueasdisclosedinNote2.21.When thecarryingamountof theassetexceeds theremainingamountofconsiderationexpected tobereceivedinexchangeforthegoodsorserviceslesstherelatedcoststhathavenotbeenrecognisedasexpenses, theexcess represents an impairment lossand is recognised in profit or loss.Asa practicalexpedient,theincrementalcostsofobtainingashort-termcontractofwhichtheamortisationperiodisoneyearorlessarerecognisedasanexpensewhenincurred.
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2. Significant accounting policies (cont’d)
2.14 Contract assets and contract liabilities
A contract is presented in the statement of financial position as a contract asset or a contract liability,dependingontherelationshipbetweentheentity’sperformanceandthecustomer’spayment.Acontractassetisanentity’srighttoconsiderationinexchangeforgoodsorservicestransferredtoacustomerwhenthatrightisconditionedonsomethingotherthanthepassageoftime.Theassetissubjecttoimpairmentassessmenton thesamebasisas trade receivablesasdisclosed inNote2.15.Acontract liability isanentity’sobligationtotransfergoodsorservicestoacustomerforwhichtheentityhasreceivedconsideration(ortheamountisdue)fromthecustomer.
2.15 Financial assets
FinancialassetsoftheGroupandtheCompanyconsistofinvestmentsinequityinstruments,receivables,derivativesandcashandcashequivalents.
Initial recognition and measurement
Afinancialasset isrecognisedinthestatementoffinancialpositionwhen,andonlywhen,theGrouportheCompany becomes a party to the contractual provisions of the financial instrument.A regularwaypurchaseorsaleoffinancialassetsisrecognisedorderecognisedusingsettlementdateaccounting.Tradereceivablesthatdonotcontainasignificantfinancingcomponentareinitiallyrecognisedattheirtransactionprice(asdefinedinNote2.21).Otherfinancialassetsareinitiallyrecognisedatfairvalueplus,inthecaseofafinancialassetnotatfairvaluethroughprofitorloss,transactioncosts.
Subsequent measurement
Financialassetsaresubsequentlymeasuredatamortisedcost, fairvalue throughothercomprehensiveincomeorfairvaluethroughprofitorlossinaccordancewiththeirclassificationonthebasisofboththebusinessmodelwithinwhichtheyareheldandtheircontractualcashflowcharacteristics.
(i) Amortised cost
Afinancialassetismeasuredatamortisedcostifitisheldwithinabusinessmodelwhoseobjectiveis to hold financial assets to collect contractual cash flowsand the contractual termsgive rise onspecifieddatestocashflowsthataresolelypaymentsofprincipalandinterestontheprincipalamountoutstanding.Allreceivablesandcashandcashequivalentsareclassifiedunderthiscategory.Anygainorlossisrecognisedinprofitorlosswhenthefinancialassetisderecognised,reclassified,throughtheamortisationprocessorinordertorecogniseimpairmentgainsorlosses.
(ii) Fair value through other comprehensive income
Afinancialassetismeasuredatfairvaluethroughothercomprehensiveincomeifitisheldwithinabusinessmodelwhoseobjectiveistobothcollectcontractualcashflowsandsellfinancialassetsandthecontractualtermsgiveriseonspecifieddatestocashflowsthataresolelypaymentsofprincipalandinterestontheprincipalamountoutstanding.TheGroupandtheCompanydonothaveanyfinancialassetsclassifiedunderthiscategory.
(iii) Fair value through profit or loss
Afinancialassetismeasuredatfairvaluethroughprofitorlossifitdoesnotmeetthecriteriatobemeasuredat amortised cost or fair value throughother comprehensive income.All investments inequityinstrumentsandderivativesareclassifiedunderthiscategory.Anygainorlossisrecognisedinprofitorloss.
Impairment
Ateachreportingdate,theGroupandtheCompanyrecognisealossallowanceforexpectedcreditlossesonafinancialassetmeasuredatamortisedcost.Thelossallowanceismeasuredatanamountequaltothelifetimeexpectedcreditlossesifthecreditriskonthefinancialassethasincreasedsignificantlysinceinitialrecognition.Ifthecreditriskhasnotincreasedsignificantlysinceinitialrecognition,thelossallowanceismeasuredatanamountequalto12-monthexpectedcreditlosses.Anyadjustmenttothelossallowanceisrecognisedinprofitorlossasanimpairmentgainorloss.
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2. Significant accounting policies (cont’d)
2.15 Financial assets (cont’d)
Impairment (cont’d)
Irrespective of whether there is any significant increase in credit risk since initial recognition, the lossallowancefortradereceivablesisalwaysmeasuredatanamountequaltolifetimeexpectedcreditlossesusingthesimplifiedapproachinaccordancewithMFRS9Financial Instruments.Suchlifetimeexpectedcreditlossesarecalculatedusingaprovisionmatrixbasedonhistoricalcreditlossexperienceandadjustedforreasonableandsupportableforward-lookinginformationthatisavailablewithoutunduecostoreffort.
Theexpectedcreditlossesforacredit-impairedfinancialassetaremeasuredasthedifferencebetweentheasset’sgrosscarryingamountandthepresentvalueofestimatedfuturecashflowsdiscountedattheasset’s original effective interest rate.Thegross carryingamount of a credit-impaired financial asset isdirectlywrittenoffwhenthereisnoreasonableexpectationofrecovery.
Derecognition
Afinancialassetisderecognisedwhen,andonlywhen,thecontractualrightstothecashflowsfromthefinancialassetexpireoralltherisksandrewardsofownershiparesubstantiallytransferred.Adirectwrite-offofgrosscarryingamountwhenthereisnoreasonableexpectationofrecoveringafinancialassetconstitutesaderecognitionevent.
2.16 Financial liabilities
FinancialliabilitiesoftheGroupandtheCompanyconsistofpayables,loansandborrowings,contingentconsideration,derivativesandfinancialguaranteecontracts.
Initial recognition and measurement
Afinancialliabilityisrecognisedinthestatementoffinancialpositionwhen,andonlywhen,theGrouportheCompanybecomesapartytothecontractualprovisionsofthefinancialinstrument.Afinancialliabilityisinitiallyrecognisedatfairvalueminus,inthecaseofafinancialliabilitynotatfairvaluethroughprofitorloss,transactioncosts.
Subsequent measurement
Allpayablesand loansandborrowingsaresubsequentlymeasuredatamortisedcost.Anygainor lossis recognised in profit or losswhen the financial liability is derecognised and through the amortisationprocess.
Contingentconsiderationandderivativesaresubsequentlymeasuredatfairvaluethroughprofitor loss.Anygainorlossisrecognisedinprofitorloss.
Financialguaranteecontractsaresubsequentlymeasuredatthehigheroftheamountoflossallowanceandtheamountinitiallyrecognisedlessanycumulativeincomerecognised.
Derecognition
Afinancialliabilityisderecognisedwhen,andonlywhen,theobligationspecifiedinthecontractisdischargedorcancelledorexpires.
2.17 Provision for onerous contract
Anonerous contract is a contract inwhich the unavoidable costs ofmeeting the obligations under thecontractexceedtheeconomicbenefitsexpectedtobereceivedunderit.Theunavoidablecostsunderacontractreflecttheleastnetcostofexitingfromthecontract,whichisthelowerofthecostoffulfillingitandanycompensationorpenaltiesarisingfromfailuretofulfilit.Whenacontractisonerous,thepresentobligationunderthecontractisrecognisedandmeasuredasaprovision.
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2. Significant accounting policies (cont’d)
2.18 Foreign currency transactions and translation
Theconsolidatedfinancialstatementsandseparatefinancialstatementsof theCompanyarepresentedinRinggitMalaysia,which isalso theCompany’s functionalcurrency,being thecurrencyof theprimaryeconomic environment inwhich the entity operates. Items included in the financial statements of eachindividualentitywithintheGrouparemeasuredusingtheindividualentity’sownfunctionalcurrency.
Aforeigncurrencytransactionisrecordedinthefunctionalcurrencyusingtheexchangerateattransactiondate.Attheendofthereportingperiod,foreigncurrencymonetaryitemsaretranslatedintothefunctionalcurrency using the closing rate. Foreign currency non-monetary itemsmeasuredat cost are translatedusingtheexchangerateat transactiondate,whereasthosemeasuredat fairvaluearetranslatedusingtheexchange rateat valuationdate.Exchangedifferencesarising from the settlement or translationofmonetary itemsarerecognised inprofitor loss.Anyexchangecomponentof thegainor lossonanon-monetaryitemisrecognisedonthesamebasisasthatofthegainorloss,i.e.inprofitorlossorinothercomprehensiveincome.
In translating the financial position and results of a foreign operationwhose functional currency is notthepresentationcurrency,i.e.RinggitMalaysia,assetsandliabilitiesaretranslatedintothepresentationcurrencyusingtheclosingrate,whereasincomeandexpensesaretranslatedusingtheexchangeratesat transaction dates.All resulting exchangedifferencesare recognised in other comprehensive incomeandaccumulated inequityas currency translation reserveuntil the foreignoperation isdisposedof, atwhichtimethecumulativeexchangedifferencespreviouslyrecognisedinothercomprehensiveincomearereclassifiedfromequitytoprofitorlossasareclassificationadjustment.
Anygoodwillandfairvalueadjustmentsarisingfromtheacquisitionofaforeignoperationaretreatedasassetsandliabilitiesoftheforeignoperationtobeexpressedinitsfunctionalcurrencyandtranslatedintothepresentationcurrencyusingtheclosingrate.
2.19 Share capital
Ordinary shares are classified as equity. Transaction costs that relate to the issue of new shares areaccountedforasadeductionfromequity.
OwnsharespurchasedareheldastreasurysharesinaccordancewiththerequirementsofSection127of theCompaniesAct2016.Thetotalamountofconsiderationpaid, includingdirectlyattributablecosts,isrecogniseddirectlyinequity.Whentreasurysharesaredistributedassharedividends,thecostofthesharesdistributedisappliedinthereductionofdistributablereserves.Whentreasurysharesareresoldintheopenmarket,thedifferencebetweenthesaleconsiderationandthecostofthesharesresoldisadjustedtosharecapital.Whentreasurysharesarecancelled, thecostof thesharescancelled isapplied in thereductionofdistributablereservesandtheissuedsharecapitalisdiminishedbythesharessocancelled.
Dividendsonsharesdeclaredandunpaidattheendofthereportingperiodarerecognisedasaliability,whereasdividendsproposedordeclaredafterthereportingperiodaredisclosedinthenotestothefinancialstatements.
2.20 Fair value measurement
Fairvalue is theprice thatwouldbereceived tosellanassetorpaid to transfera liability inanorderlytransactionbetweenmarketparticipantsatthemeasurementdate.
TheGroupandtheCompanyusevaluationtechniquesthatareappropriateinthecircumstancesandforwhichsufficientdataareavailabletomeasurefairvalue,maximisingtheuseofrelevantobservableinputsandminimisingtheuseofunobservableinputs.Thevaluationtechniquesusedincludethefollowingoracombinationthereof:-
(i) Marketapproach-whichusespricesandotherrelevantinformationgeneratedbymarkettransactionsinvolvingidenticalorcomparable(i.e.similar)assets,liabilitiesoragroupofassetsandliabilities.
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2. Significant accounting policies (cont’d)
2.20 Fair value measurement (cont’d)
(ii) Costapproach -which reflects theamount thatwouldbe requiredcurrently to replace theservicecapacityofanasset.
(iii) Incomeapproach -whichconverts futureamounts (e.g. cashflowsor incomeandexpenses) toasinglecurrent(i.e.discounted)amount.
Theinputstovaluationtechniquesusedtomeasurefairvaluearecategorisedintothefollowinglevelsoffairvaluehierarchy:-
(i) Level1-quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilitiesthattheentitycanaccessatthemeasurementdate.
(ii) Level2-inputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,eitherdirectlyorindirectly.
(iii) Level3-unobservableinputsfortheassetorliability.
Anytransfersbetweenthe levelsof fairvaluehierarchyaredeemedtohaveoccurredat theendof thereportingperiod.
Non-financial assets
The fairvaluesof landandbuildingsaremeasuredusing themarketcomparisonapproach.Under thisapproach, the fair values are derived from observablemarket data such as prices per square foot forcomparablepropertiesinsimilarlocations(i.e.Level2).
Thefairvaluesoffreshfruitbunches(“FFBs”)growingonoilpalmtreesaremeasuredbymultiplyingtheestimatedquantitiesofFFBsofdifferentageattributesbytheobservablecurrentmarketpricesofharvestedFFBsproratedusingalinearinterpolation(i.e.Level2).
Financial assets and financial liabilities
Thecarryingamountsofreceivables,cashandcashequivalents,payablesandloansandborrowingswhichareshort-terminnatureorrepayableondemandarereasonableapproximationsof fairvalues.Thefairvaluesoflong-termloansandborrowingsaremeasuredusingpresentvaluetechniquebydiscountingtheexpectedfuturecashflowsusingobservablecurrentmarket interestratesforsimilar liabilities(i.e.Level2).
Thefairvaluesofquotedinvestmentsaredirectlymeasuredusingtheirunadjustedclosingpricesinactivemarkets(i.e.Level1).
Thefairvaluesofforwardexchangecontractsaremeasuredusingpresentvaluetechniquebydiscountingthedifferencesbetweencontractual forwardpricesandobservablecurrentmarket forwardpricesusingrisk-freeinterestrate(i.e.Level2).
Thefairvalueofcontingentconsiderationismeasuredusingprobability-weightedpresentvaluetechniquebydiscounting theexpected future cashflowsusing theGroup’sobservable costof capital dictatedbyexternalmarket(i.e.Level2).
2.21 Revenue from contracts with customersTheGroupandtheCompanyrecogniserevenue(byapplyingthefollowingsteps)todepictthetransferofpromisedgoodsorservicestocustomersatthetransactionprice.
(i) Step 1: Identify contract -A contract is an agreement between two or more parties that createsenforceablerightsandobligations.
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2. Significant accounting policies (cont’d)
2.21 Revenue from contracts with customers (cont’d)
(ii) Step 2: Identify performance obligations - Each promise to transfer distinct goods or services isidentifiedasaperformanceobligationandaccountedforseparately.
(iii) Step3:Determinetransactionprice-Thetransactionpriceistheamountofconsiderationtowhichanentityexpectstobeentitledinexchangefortransferringpromisedgoodsorservicestoacustomer.Itisadjustedfortheeffectsofvariableconsideration(e.g.discounts,rebates,incentivesorpenalties),significantfinancingcomponent,non-cashconsiderationandconsiderationpayabletocustomer.
(iv) Step4:Allocate transactionprice toperformanceobligations-The transactionprice isallocated toeachperformanceobligationonthebasisoftherelative(estimated)stand-alonesellingpricesofeachdistinctgoodorservicepromisedinthecontract.
(v) Step5:Recogniserevenue-Revenueisrecognisedwhen(oras)theentitysatisfiesaperformanceobligation by transferring a promised good or service to a customer (which iswhen the customerobtainscontrolofthatgoodorservice).Revenueisrecognisedeitherovertimeoratapointintimedependingonthetimingoftransferofcontrol.
Sale of goods
TheGroupdeterminesthatthetransferofcontrolofpromisedgoodsgenerallycoincideswiththetransferofrisksandrewardsofownership.Accordingly,revenuefromthesaleofgoodsisrecognisedatapointintimewhenthesignificantrisksandrewardsofownershiphavebeentransferredtothecustomerupondelivery.
Sale of agricultural produce
TheGroupdeterminesthatthetransferofcontrolofpromisedagriculturalproducegenerallycoincideswiththetransferofrisksandrewardsofownership.Accordingly,revenuefromthesaleofagriculturalproduceisrecognisedatapointintimewhenthesignificantrisksandrewardsofownershiphavebeentransferredtothecustomerupondelivery.
Rendering of services
TheCompanydetermines that the transferof controlofpromisedservicesgenerally coincideswith theCompany’s performance as the customer simultaneously receives and consumes the benefits of theperformanceastheCompanyperforms.Accordingly,revenuefromtherenderingofservicesisrecognisedover time when the services are performed. The Company measures the progress towards completesatisfactionoftheperformanceobligationusinganoutputmethod,i.e.timeelapsed.
Property development
For sale of properties under development, theGroup determines that the transfer of control generallycoincideswiththeGroup’sperformanceastheperformancedoesnotcreateanassetwithanalternativeusetotheGroupandtheGrouphasanenforceablerighttopaymentforperformancecompletedtodate.Accordingly, revenue is recognisedover timeduring thedevelopmentperiod.TheGroupmeasures theprogress towards complete satisfactionof theperformanceobligationusingan inputmethod, i.e. costsincurredrelativetothetotalexpectedcosts.TheeffectsofanycostsincurredthatdonotdepicttheGroup’sperformanceareexcludedfromthecalculation.
Sale of completed development units
For sale of completed development units, the Group determines that the transfer of control generallycoincideswiththedeliveryofvacantpossession.Accordingly,revenueisrecognisedatapointintimewhenthevacantpossessionhasbeendeliveredtothecustomer.
Construction contracts
TheGroupdeterminesthatthetransferofcontrolofpromisedservicesgenerallycoincideswiththeGroup’sperformanceastheperformancecreatesorenhancesanassetthatthecustomercontrolsastheassetiscreatedorenhanced.Accordingly,revenuefromconstructioncontractsisrecognisedovertimeduringtheconstructionperiod.TheGroupmeasurestheprogresstowardscompletesatisfactionoftheperformanceobligationusinganinputmethod,i.e.costsincurredrelativetothetotalexpectedcosts.TheeffectsofanycostsincurredthatdonotdepicttheGroup’sperformanceareexcludedfromthecalculation.
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2. Significant accounting policies (cont’d)
2.22 Other income
Dividendincomeisrecognisedinprofitorlossonlywhentheentity’srighttoreceivepaymentofthedividendisestablished,itisprobablethattheeconomicbenefitsassociatedwiththedividendwillflowtotheentityandtheamountofthedividendcanbemeasuredreliably.
Interestincomeisrecognisedinprofitorlossusingtheeffectiveinterestmethod.
Operatingleaseincomeisrecognisedinprofitorlossonastraight-linebasisovertheleaseterm.
2.23 Employee benefits
Short-term employee benefits
Short-term employee benefits such as wages, salaries, bonuses and social security contributions arerecognisedinprofitorlossorincludedinthecostofanasset,whereappropriate,intheperiodinwhichtheassociatedservicesarerenderedbytheemployee.
Defined contribution plans
Asrequiredbylaw,employersinMalaysiamakecontributionstothestatutorypensionscheme,EmployeesProvidentFund(“EPF”).TheGroup’sforeignsubsidiariesmakecontributionstotheirrespectivecountries’statutory pension schemes. Contributions to defined contribution plans are recognised in profit or lossorincludedinthecostofanasset,whereappropriate,intheperiodinwhichtheassociatedservicesarerenderedbytheemployee.
Defined benefit plans
The Group and the Company operate an unfunded final salary defined benefit plan for certain keymanagementpersonnel.Theliabilityinrespectofthedefinedbenefitplanisthepresentvalueofthefuturebenefitsthatkeymanagementpersonnelhaveearnedinreturnfortheirservicesrenderedinthecurrentandpriorperiods.Thecalculationisperformedusingtheprojectedunitcreditmethod,withactuarialvaluationsbeingcarriedoutwithsufficientregularityatanintervalofnotmorethanthreeyearssuchthattheamountsrecognisedinthefinancialstatementsdonotdiffermateriallyfromtheamountsthatwouldbedeterminedattheendofthereportingperiod.Allcomponentsofdefinedbenefitcostsarerecognisedinprofitorlossintheperiodinwhichtheyareincurred,exceptforremeasurementofthedefinedbenefitliabilitywhichisrecognisedinothercomprehensiveincome.
2.24 Borrowing costs
Borrowingcoststhataredirectlyattributabletotheacquisition,constructionorproductionofaqualifyingasset,whichisanassetthatnecessarilytakesasubstantialperiodoftimetogetreadyforitsintendeduseorsale,arecapitalisedaspartofthecostoftheasset,untilsuchtimeastheassetissubstantiallyreadyforitsintendeduseorsale.Allotherborrowingcostsarerecognisedinprofitorlossintheperiodinwhichtheyareincurred.
2.25 Income taxes
Incometaxesfortheyearcomprisecurrenttaxanddeferredtax.
Currenttaxrepresentstheexpectedamountofincometaxespayableinrespectofthetaxableprofitfortheyearandismeasuredusingthetaxratesthathavebeenenactedorsubstantivelyenactedbytheendofthereportingperiod.
Deferredtaxisprovidedforundertheliabilitymethodinrespectofalltemporarydifferencesbetweenthecarryingamountofanassetorliabilityanditstaxbaseexceptforthosetemporarydifferencesassociatedwithgoodwillortheinitialrecognitionofanassetorliabilityinatransactionwhichisnotabusinesscombinationandaffectsneitheraccountingnortaxableresultsatthetimeofthetransaction.
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2. Significant accounting policies (cont’d)
2.25 Income taxes (cont’d)
Adeferred tax liability is recognised forall taxable temporarydifferences,whereasadeferred taxassetis recognised foralldeductible temporarydifferences,unused tax lossesandunused taxcredits to theextentthatitisprobablethatfuturetaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditscanbeutilised.Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheperiodwhentheassetisrealisedortheliabilityissettled,basedonthetaxratesthathavebeenenactedorsubstantivelyenactedbytheendofthereportingperiod.
2.26 Cash and cash equivalents
Cashandcashequivalentscomprisecashonhand,demanddeposits,termdepositsthatarewithdrawableondemandandshort-term,highlyliquidinvestmentsthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.Forthepurposeofstatementofcashflows,cashandcashequivalentsarepresentednetofbankoverdraftsandpledgeddeposits,ifany.
3. Judgements and estimation uncertaintyJudgements made in applying accounting policies
IntheprocessofapplyingtheaccountingpoliciesoftheGroupandtheCompany,managementisnotawareofanyjudgements,apartfromthoseinvolvingestimations,thatcansignificantlyaffecttheamountsrecognisedinthefinancialstatements.
Sources of estimation uncertainty
Thekeyassumptionsaboutthefuture,andothermajorsourcesofestimationuncertaintyattheendofthereportingperiod, thathaveasignificant riskof resulting inamaterialadjustment to thecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow:-
Impairmentofinvestmentsinassociates
When there isobjectiveevidence thatan investment inassociate is impaired, theGroupperforms impairmenttestbycomparingtherecoverableamountoftheinvestment(higheroffairvaluelesscostsofdisposalandvalueinuse)withitscarryingamount.Indeterminingthevalueinuseoftheinvestment,theGroupestimatesitsshareofthepresentvalueoftheestimatedfuturecashflowsexpectedtobegeneratedbytheassociate,includingthecashflowsfromitsoperationsandtheproceedsfromtheultimatedisposaloftheinvestment.Suchdeterminationofthevalueinuseinvolvessignificantjudgementsandestimationuncertaintyinmakingkeyassumptionsaboutfuturemarketandeconomicconditions,growthrates,profitmargins,discountrate,etc.ThecarryingamountsofinvestmentsinassociatesaredisclosedinNote8.
Valuationofinventories
Reviewsaremadeperiodicallybymanagementoninventoriesforexcessinventories,obsolescenceanddeclinein net realisable value below cost. These reviews involve judgements and estimation uncertainty in formingexpectationsaboutfuturesalesanddemands.Anychangesintheseaccountingestimateswillresultinrevisionstothevaluationofinventories(Note10).
Propertydevelopment
TheGroup recognisespropertydevelopment revenueover timebymeasuring theprogress towardscompletesatisfactionof theperformanceobligation.Property development costsand incremental costsof obtaining thecontractarealsorecognisedinprofitorlossonasystematicbasisthatisconsistentwiththerecognitionofrelatedrevenue. These procedures involve judgements and estimation uncertainty in predicting the outcome of theperformanceobligationbasedonpastexperience,workofexpertsandcontinuousmonitoringmechanism.Anychanges in theseaccountingestimateswillaffect thecarryingamountsof inventories(Note10),contractcosts(Note14),contractassetsandcontractliabilities(Note15).
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3. Judgements and estimation uncertainty (cont’d)
Sources of estimation uncertainty (cont’d)
Impairmentofcontractassetsandreceivables
TheGroupandtheCompanyrecogniselossallowanceforexpectedcreditlossesoncontractassetsandreceivablesbased on an assessment of credit risk. Such assessment involves judgements and estimation uncertainty inanalysing information about past events, current conditions and forecasts of future economic conditions.Anychangesintheseaccountingestimateswillaffectthecarryingamountsofcontractassets(Note15)andreceivables(Note11).
Constructioncontracts
TheGroupconsiderstheeffectsofvariableconsiderationindeterminingthetransactionpriceofaperformanceobligationsatisfiedovertime,andrecognisesrevenueaccordinglybymeasuringtheprogresstowardscompletesatisfactionof theperformanceobligation.Theseprocedures involve judgementsandestimationuncertainty inpredictingtheoutcomeoftheperformanceobligationbasedonpastexperience,workofexpertsandcontinuousmonitoringmechanism.Anychanges in theseaccountingestimateswillaffect thecarryingamountsofcontractassetsandcontractliabilities(Note15).
4. Property, plant and equipment
Group
Furniture,fittings Capital
Landand Plantand andoffice Motor Bearer work-in-buildings machinery equipment vehicles plants progress TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
CostAt1January2018 120,809 205,499 8,694 6,558 792 226 342,578Additions 807 5,619 342 68 0 6,345 13,181Disposals/Write-offs 0 (7,334) (63) (321) 0 0 (7,718)Reclassifications 0 6,058 0 0 0 (6,058) 0Currencytranslationdifferences (1,839) (2,971) (114) (23) 0 0 (4,947)At31December2018 119,777 206,871 8,859 6,282 792 513 343,094
At1January2019-Broughtforwardfromprecedingyear 119,777 206,871 8,859 6,282 792 513 343,094-EffectofadoptingMFRS16 (33,029) 0 0 (1,247) 0 0 (34,276)-Adjusted 86,748 206,871 8,859 5,035 792 513 308,818Additions 897 5,445 187 252 0 5,490 12,271Disposals/Write-offs (45) (3,218) (55) (271) 0 0 (3,589)Transfertoinvestmentproperties (3,979) 0 0 0 0 0 (3,979)Reclassifications 0 5,468 0 0 0 (5,468) 0Currencytranslationdifferences (769) (1,996) (76) (16) 0 0 (2,857)At31December2019 82,852 212,570 8,915 5,000 792 535 310,664
Depreciation and impairment lossesAt1January2018Accumulateddepreciation 22,107 153,743 5,841 3,978 440 0 186,109Accumulatedimpairmentlosses 379 7 26 0 0 0 412
22,486 153,750 5,867 3,978 440 0 186,521Depreciation 5,546 7,919 780 832 35 0 15,112Disposals/Write-offs 0 (7,283) (60) (321) 0 0 (7,664)Currencytranslationdifferences (534) (2,550) (96) (21) 0 0 (3,201)At31December2018Accumulateddepreciation 27,119 151,829 6,465 4,468 475 0 190,356Accumulatedimpairmentlosses 379 7 26 0 0 0 412
27,498 151,836 6,491 4,468 475 0 190,768
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 201988
4. Property, plant and equipment (cont’d)
Group
Furniture,fittings Capital
Landand Plantand andoffice Motor Bearer work-in-buildings machinery equipment vehicles plants progress TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Depreciation and impairment losses (cont'd)At1January2019-Accumulateddepreciation-Broughtforwardfrompreceding
year 27,119 151,829 6,465 4,468 475 0 190,356-EffectofadoptingMFRS16 (5,307) 0 0 (502) 0 0 (5,809)-Adjusted 21,812 151,829 6,465 3,966 475 0 184,547-Accumulatedimpairmentlosses 379 7 26 0 0 0 412
22,191 151,836 6,491 3,966 475 0 184,959Depreciation 4,265 8,574 526 488 34 0 13,887Disposals/Write-offs (12) (3,161) (53) (263) 0 0 (3,489)Currencytranslationdifferences (394) (1,733) (68) (13) 0 0 (2,208)At31December2019-Accumulateddepreciation 25,671 155,509 6,870 4,178 509 0 192,737-Accumulatedimpairmentlosses 379 7 26 0 0 0 412
26,050 155,516 6,896 4,178 509 0 193,149
Carrying amountAt1January2018 98,323 51,749 2,827 2,580 352 226 156,057
At31December2018 92,279 55,035 2,368 1,814 317 513 152,326
At31December2019 56,802 57,054 2,019 822 283 535 117,515
Thedetailsoflandandbuildingsareasfollows:-
Group
Freehold Leasehold
land land Buildings Total
RM’000 RM’000 RM’000 RM’000
CostAt1January2018 24,650 33,712 62,447 120,809
Additions 0 0 807 807
Currencytranslationdifferences 0 (683) (1,156) (1,839)
At31December2018 24,650 33,029 62,098 119,777
At1January2019
-Broughtforwardfromprecedingyear 24,650 33,029 62,098 119,777
-EffectofadoptingMFRS16 0 (33,029) 0 (33,029)
-Adjusted 24,650 0 62,098 86,748
Additions 522 0 375 897
Disposals/Write-offs 0 0 (45) (45)
Transfertoinvestmentproperties (3,979) 0 0 (3,979)
Currencytranslationdifferences 0 0 (769) (769)
At31December2019 21,193 0 61,659 82,852
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 89
4. Property, plant and equipment (cont’d)
Group
Freehold Leaseholdland land Buildings Total
RM’000 RM’000 RM’000 RM’000
Depreciation and impairment lossesAt1January2018Accumulateddepreciation 0 4,331 17,776 22,107Accumulatedimpairmentlosses 0 0 379 379
0 4,331 18,155 22,486Depreciation 0 1,069 4,477 5,546Currencytranslationdifferences 0 (93) (441) (534)At31December2018Accumulateddepreciation 0 5,307 21,812 27,119Accumulatedimpairmentlosses 0 0 379 379
0 5,307 22,191 27,498
At1January2019-Accumulateddepreciation-Broughtforwardfromprecedingyear 0 5,307 21,812 27,119-EffectofadoptingMFRS16 0 (5,307) 0 (5,307)-Adjusted 0 0 21,812 21,812-Accumulatedimpairmentlosses 0 0 379 379
0 0 22,191 22,191Depreciation 0 0 4,265 4,265Disposals/Write-offs 0 0 (12) (12)Currencytranslationdifferences 0 0 (394) (394)At31December2019-Accumulateddepreciation 0 0 25,671 25,671-Accumulatedimpairmentlosses 0 0 379 379
0 0 26,050 26,050
Carrying amountAt1January2018 24,650 29,381 44,292 98,323
At31December2018 24,650 27,722 39,907 92,279
At31December2019 21,193 0 35,609 56,802
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 201990
4. Property, plant and equipment (cont’d)
Company
Furniture,fittingsand
office Motorequipment vehicles Total
RM’000 RM’000 RM’000
CostAt1January2018 223 1,615 1,838Additions 8 0 8At31December2018 231 1,615 1,846
At1January2019-Broughtforwardfromprecedingyear 231 1,615 1,846-EffectofadoptingMFRS16 0 (601) (601)-Adjusted 231 1,014 1,245Additions 21 0 21Disposals/Write-offs (14) (111) (125)At31December2019 238 903 1,141
Accumulated depreciationAt1January2018 141 639 780Depreciation 30 323 353At31December2018 171 962 1,133
At1January2019-Broughtforwardfromprecedingyear 171 962 1,133-EffectofadoptingMFRS16 0 (190) (190)-Adjusted 171 772 943Depreciation 28 141 169Disposals/Write-offs (13) (111) (124)At31December2019 186 802 988
Carrying amountAt1January2018 82 976 1,058
At31December2018 60 653 713
At31December2019 52 101 153
Thecarryingamountsofproperty,plantandequipmentunderhirepurchasefinancingareasfollows:-
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Motorvehicles 0 745 0 411
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 91
5. Investment properties
Group
Freehold Buildingunderland Buildings construction Total
RM’000 RM’000 RM’000 RM’000
CostAt1January2018 7,285 912 8,294 16,491Additions 0 0 19,927 19,927Borrowingcostscapitalised 0 0 163 163Reclassifications 0 28,384 (28,384) 0At31December2018 7,285 29,296 0 36,581Additions 0 292 0 292Costrefunded 0 (1,955) 0 (1,955)Transferfrominventories 287 0 0 287Transferfromproperty,plantandequipment 3,979 0 0 3,979At31December2019 11,551 27,633 0 39,184
Accumulated depreciationAt1January2018 0 32 0 32Depreciation 0 458 0 458At31December2018 0 490 0 490Depreciation 0 808 0 808At31December2019 0 1,298 0 1,298
Carrying amountAt1January2018 7,285 880 8,294 16,459
At31December2018 7,285 28,806 0 36,091
At31December2019 11,551 26,335 0 37,886
Fair valueEstimatedfairvalueat31December2018 9,500 29,440 0 38,940
Estimatedfairvalueat31December2019 15,597 29,440 0 45,037
Company
Freeholdland
RM’000
CostAt1January2018/31December2018/31December2019 23,125
Fair valueEstimatedfairvalueat31December2018/31December2019 25,310
Thefairvaluesofinvestmentpropertiesweremeasuredbasedonappraisalsperformedbyindependentprofessionalvaluersusingthemarketcomparisonapproach.Theappraisedvalueswerederivedfromobservablepricespersquarefootforcomparablepropertiesinsimilarlocations(i.e.Level2).
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 201992
5. Investment properties (cont’d)
ThecarryingamountsofinvestmentpropertiespledgedassecurityforcreditfacilitiesgrantedtotheGroupareasfollows:-
2019 2018RM’000 RM’000
Freeholdland 6,749 6,749Buildings 25,519 27,958
32,268 34,707
TheGroupandtheCompanyleasesomeofitsfreeholdlandandbuildingstoanassociateandotherrelatedpartyfor20to23years.Theundiscountedleasepaymentstobereceivedareasfollows:-
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Within1year 1,759 n/a 172 n/a1to2years 1,821 n/a 172 n/a2to3years 2,515 n/a 181 n/a3to4years 2,585 n/a 181 n/a4to5years 2,585 n/a 181 n/aAfter5years 36,318 n/a 3,630 n/a
47,583 n/a 4,517 n/a
6. Right-of-use assets
Group
Leasehold Motorland Buildings vehicles Total
RM’000 RM’000 RM’000 RM’000
CostAt1January2019-Broughtforwardfromprecedingyear 0 0 0 0-EffectofadoptingMFRS16 33,029 289 1,247 34,565-Adjusted 33,029 289 1,247 34,565Additions 0 295 327 622Currencytranslationdifferences (455) 0 0 (455)At31December2019 32,574 584 1,574 34,732
Accumulated depreciationAt1January2019-Broughtforwardfromprecedingyear 0 0 0 0-EffectofadoptingMFRS16 5,307 0 502 5,809-Adjusted 5,307 0 502 5,809Depreciation 1,061 231 307 1,599Currencytranslationdifferences (83) 0 0 (83)At31December2019 6,285 231 809 7,325
Carrying amountAt1January2019-Adjusted 27,722 289 745 28,756
At31December2019 26,289 353 765 27,407
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 93
6. Right-of-use assets (cont’d)
Company
MotorvehiclesRM’000
CostAt1January2019-Broughtforwardfromprecedingyear 0-EffectofadoptingMFRS16 601-Adjusted 601Additions 253At31December2019 854
Accumulated depreciationAt1January2019-Broughtforwardfromprecedingyear 0-EffectofadoptingMFRS16 190-Adjusted 190Depreciation 164At31December2019 354
Carrying amountAt1January2019-Adjusted 411
At31December2019 500
TheGroupacquiredtherightstousetheleaseholdlandasitsprincipalplacesofbusinessfor48to60years.Italsoleasessomebranchofficesandstaffhostelsfor2to5years.Therightstousethemotorvehicleswereacquiredunderhirepurchasefinancingwherebyownershipwillbetransferredbytheendoftheleasetermof5years.
7. Investments in subsidiaries
Company
2019 2018RM’000 RM’000
Unquotedshares-atcost 217,476 217,476Impairmentlosses (4,061) (4,640)
213,415 212,836
Thedetailsofthesubsidiariesareasfollows:-
Nameofsubsidiary
Principalplaceof
business/Countryof
incorporation
Effectiveownershipinterest
Principalactivity2019 2018
GUHElectronicHoldingsSdn.Bhd. Malaysia 100.00% 100.00% Investmentholding
GUHAssetHoldingsSdn.Bhd. Malaysia 100.00% 100.00% Investmentholding
GUHPropertiesSdn.Bhd. Malaysia 100.00% 100.00% Propertydevelopment
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 201994
7. Investments in subsidiaries (cont’d)
Nameofsubsidiary
Principalplaceof
business/Countryof
incorporation
Effectiveownershipinterest
Principalactivity2019 2018
GUHPlantationsSdn.Bhd. Malaysia 100.00% 100.00% Cultivationofoilpalm
GUHUtilitiesHoldingsSdn.Bhd.(formerlyknownasGUHWaterHoldingsSdn.Bhd.)
Malaysia 100.00% 100.00% Investmentholding
GUHLandSdn.Bhd. Malaysia 100.00% 100.00% Investmentholding
GUHCapitalSdn.Bhd. Malaysia 100.00% 100.00% Investmentholding
GUHInternational(HK)PrivateLimited(a)(b) HongKong 100.00% 100.00% Investmentholding
SubsidiariesofGUHElectronicHoldingsSdn.Bhd.
GUHCircuitIndustry(PG)Sdn.Bhd. Malaysia 100.00% 100.00% Manufactureandsaleofhybridprintedcircuitboards
GUHCircuitIndustry(Suzhou)Co.,Ltd. People’sRepublicof
China
100.00% 100.00% Manufactureandsaleofhybridprintedcircuitboards
GrandUnited(BVI)Co.,Ltd.(a)(b) BritishVirginIslands
100.00% 100.00% Dormant
GrandCircuitIndustry(Philippines)Inc.(a) Philippines 100.00% 100.00% Dormant
SubsidiariesofGUHAssetHoldingsSdn.Bhd.
GUHConstructionSdn.Bhd. Malaysia 100.00% 100.00% Dormant
GUHElectrical(BW)Sdn.Bhd. Malaysia 100.00% 100.00% Tradinginelectricalgoodsandappliances
GUHRealtySdn.Bhd. Malaysia 100.00% 100.00% Investmentinrealestateandpropertydevelopment
GUHElectrical(KL)Sdn.Bhd. Malaysia 100.00% 100.00% Dormant
MalaysianMechanicalEngineeringIndustriesSdn.Bhd.
Malaysia 100.00% 100.00% Dormant
TecnovacMarketingSdn.Bhd. Malaysia 100.00% 100.00% Dormant
MilanDiamondSdn.Bhd. Malaysia 100.00% 100.00% Propertyletting
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 95
7. Investments in subsidiaries (cont’d)
Nameofsubsidiary
Principalplaceof
business/Countryof
incorporation
Effectiveownershipinterest
Principalactivity2019 2018
SubsidiariesofGUHUtilitiesHoldingsSdn.Bhd.(formerlyknownasGUHWaterHoldingsSdn.Bhd.)
GUHWaterPte.Ltd.(a)(b) HongKong 100.00% 100.00% Dormant
TeknoservEngineeringSdn.Bhd. Malaysia 100.00% 100.00% Projectmanagersandcontractorsforinstallationofwaterandwastewatertreatmentplantandconstructionofroad
SubsidiaryofGUHLandSdn.Bhd.
GUHDevelopmentSdn.Bhd. Malaysia 99.46% 99.46% Propertydevelopment
SubsidiaryofGUHInternational(HK)PrivateLimited
GUHElectronic(Yancheng)Co.,Ltd.(a)(b)(c) People’sRepublicof
China
100.00% 100.00% Dormant
SubsidiaryofGUHRealtySdn.Bhd.
JeladanSdn.Bhd. Malaysia 100.00% 100.00% Dormant
(a) Not audited by Crowe Malaysia PLT(b) Not required to be audited, and consolidated using unaudited financial statements(c) Struck off in March 2020
8. Investments in associates
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Unquotedshares-atcost 13,360 13,360 3,023 3,023Shareofpost-acquisitionchangesinnetassets 2,603 4,103 0 0
15,963 17,463 3,023 3,023
Attributableto:-CambodiaUtilitiesPte.Ltd. 7,248 7,323 3,023 3,023StraitsInternationalEducationGroupSdn.Bhd. 8,715 10,140 0 0
15,963 17,463 3,023 3,023
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 201996
8. Investments in associates (cont’d)
Thedetailsoftheassociatesareasfollows:-
Nameofassociate
Principalplaceof
business/Countryof
incorporation
Effectiveownershipinterest
Principalactivity2019 2018
CambodiaUtilitiesPte.Ltd.(“CUPL”) Cambodia 20.00% 20.00% Dormant
StraitsInternationalEducationGroupSdn.Bhd.(“SIEG”)
Malaysia 25.00% 25.00% Investmentholding
SubsidiariesofSIEG
KIMStraitsInternationalEducationSdn.Bhd. Malaysia 25.00% 25.00% Dormant
KKStraitsInternationalEducationSdn.Bhd. Malaysia 25.00% 25.00% Provisionofeducationservices
SGStraitsInternationalEducationSdn.Bhd. Malaysia 25.00% 25.00% Provisionofeducationservices
On21March2016,theGroup,throughGUHCapitalSdn.Bhd.,enteredintoasubscriptionagreementtosubscribefor1,166,667newordinarysharesinSIEG,representing25%oftheenlargedsharecapitalofSIEG,foratotalsubscriptionconsiderationofRM11,000,000payableasfollows:-
(i) MinimumconsiderationofRM5,000,000payableuponexecutionofshareholders’agreement.
(ii) ContingentconsiderationofRM6,000,000payablewhen,andonlywhen,thespecifiedfutureeventsoccur.
Thesummarisedfinancialinformationoftheassociatesisasfollows:-
CUPL SIEGanditssubsidiaries2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Non-currentassets 0 0 57,136 13,434Currentassets 36,585 36,965 7,418 5,675Currentliabilities (345) (350) (15,674) (13,363)Non-currentliabilities 0 0 (48,904) (71)Netassets/(liabilities) 36,240 36,615 (24) 5,675Revenue 0 0 17,017 12,887Profit/(Loss)(representingcomprehensiveincome)forthefinancialyear 5 (1) (5,699) (203)
Thereconciliationof theabovesummarisedfinancial informationtothecarryingamountsof the investments inassociatesisasfollows:-
CUPL SIEG2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Netassets/(liabilities) 36,240 36,615 (24) 5,675Contingentconsideration 0 0 3,000 3,000
36,240 36,615 2,976 8,675Effectiveownershipinterest 20% 20% 25% 25%Shareofnetassets 7,248 7,323 744 2,169Goodwill 0 0 7,971 7,971Carryingamount 7,248 7,323 8,715 10,140
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 97
9. Other investments
GroupandCompany
2019 2018
RM’000 RM’000
Quotedshares-atfairvalue 1 1
The fair values of quoted investments were directlymeasured using their unadjusted closing prices in activemarkets(i.e.Level1).
10. Inventories
Group
2019 2018
RM’000 RM’000
Non-current assets
Landheldforpropertydevelopment 169,678 167,332
Current assets
Propertydevelopmentcosts 8,118 42,467
Completeddevelopmentunits 76,690 38,751
Rawmaterials 14,300 22,069
Work-in-progress 7,887 7,759
Finishedgoods 9,027 6,796
Consumables 3,185 3,721
Goods-in-transit 1,318 2,683
120,525 124,246
Totalinventories 290,203 291,578
ThecarryingamountsofinventoriespledgedassecurityforcreditfacilitiesgrantedtotheGroupareasfollows:-
2019 2018
RM’000 RM’000
Landheldforpropertydevelopment 24,460 24,460
Propertydevelopmentcosts 0 1,012
24,460 25,472
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 201998
11. Receivables
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Non-current assetsAmountsduefromsubsidiaries 0 0 218,489 212,542Lossallowance 0 0 (20,968) (16,659)
0 0 197,521 195,883
Current assetsTradereceivables:--Relatedparty(a) 55 121 0 0-Unrelatedparties 61,493 69,214 0 0
61,548 69,335 0 0-Lossallowance (2,456) (2,597) 0 0
59,092 66,738 0 0Otherreceivables 3,501 4,490 5 12Dividendreceivable 0 0 7,928 0Amountsduefromsubsidiaries 0 0 397 3,249Lossallowance 0 0 (13) (106)
0 0 384 3,14362,593 71,228 8,317 3,155
Totalreceivables 62,593 71,228 205,838 199,038
(a) Being a company in which a director has substantial financial interest
Trade receivables
TheGroup determines credit risk concentrations in terms of counterparties and geographical areas.As at 31December2019,therewas1(2018:2)majorgroupofcustomersthataccountedfor10%ormoreoftheGroup’stradereceivablesandthetotaloutstandingbalancesduefromthismajorgroupamountedtoRM9,357,000(2018:RM19,514,000).Thecreditriskconcentrationprofilebygeographicalareasoftradereceivablesisasfollows:-
Group2019 2018
RM’000 RM’000
Malaysia 23,843 27,739China 18,371 24,112Indonesia 10,223 12,315Others 9,111 5,169
61,548 69,335
Thecredittermsoftradereceivablesrangefrom15to135days.TheGroupusespastdueinformationtoassessthecreditriskoftradereceivables.Theanalysisbypastduestatusisasfollows:-
Group2019 2018
RM’000 RM’000
Notpastdue 58,130 57,9111to30dayspastdue 508 6,70231to90dayspastdue 283 2,209Morethan90dayspastdue 2,627 2,513
61,548 69,335
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 99
11. Receivables (cont’d)
Trade receivables (cont’d)
TheGroupdetermines thata trade receivable iscredit-impairedwhen thecustomer isexperiencingsignificantfinancialdifficultyandhasdefaultedinpayments.Unlessotherwisedemonstrated,theGroupgenerallyconsidersadefaulttohaveoccurredwhenthetradereceivableismorethan90dayspastdue.Thegrosscarryingamountofacredit-impairedtradereceivableisdirectlywrittenoffwhenthereisnoreasonableexpectationofrecovery.Thisnormallyoccurswhenthereisreasonableproofofcustomerinsolvency.
TheGroupmeasuresthelossallowancefortradereceivablesatanamountequaltolifetimeexpectedcreditlossesusingthesimplifiedapproachinaccordancewithMFRS9.Thechangesinthelossallowanceareasfollows:-
Group2019 2018
RM’000 RM’000
At1January 2,597 2,980Impairment(gains)/losses (7) 76Write-offs (81) (380)Currencytranslationdifferences (53) (79)At31December 2,456 2,597
Theabovelossallowanceisinrespectofindividuallyassessedcredit-impairedtradereceivables.Basedonthelowhistoricalobserveddefaultrates(adjustedforforward-lookingestimates),theexpectedcreditlossesontradereceivablesthatarenotcredit-impairedarenotconsideredtobematerialandhence,havenotbeenrecognised.
Amounts due from subsidiaries
Theamountsduefromsubsidiariesareunsecured,interestfreeandrepayableondemand.
TheCompanymeasures the lossallowanceat anamountequal to lifetimeexpectedcredit losses.Thegrosscarryingamountsandtherelatedlossallowancechangesareasfollows:-
Company
Notcredit- Credit-impaired impaired TotalRM’000 RM’000 RM’000
2019Grosscarryingamount 107,487 111,399 218,886Lossallowance:--At1January 106 16,659 16,765-Impairmentlosses 1 4,215 4,216-At31December 107 20,874 20,981
107,380 90,525 197,905
Disclosedas:--Non-currentassets 106,997 90,525 197,522-Currentassets 383 0 383
107,380 90,525 197,905
2018Grosscarryingamount 105,274 110,517 215,791Lossallowance:--At1January 111 11,851 11,962-Impairment(gains)/losses (5) 4,808 4,803-At31December 106 16,659 16,765
105,168 93,858 199,026
Disclosedas:--Non-currentassets 102,515 93,368 195,883-Currentassets 2,653 490 3,143
105,168 93,858 199,026
TheCompanydeterminesthatanamountduefromsubsidiaryiscredit-impairedwhenthesubsidiaryisinnegativeequityposition.
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019100
12. Deferred tax assets and deferred tax liabilities
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
At1January (11,399) (12,094) (1,099) (550)Deferredtax(expense)/incomerelatingtooriginationandreversaloftemporarydifferences (171) 1,308 0 0Deferredtaxexpenserelatingtochangeintaxrate 0 (549) 0 (549)Deferredtaxliabilitiesover/(under)providedinprioryear 400 (201) 0 0Currencytranslationdifferences 90 137 0 0At31December (11,080) (11,399) (1,099) (1,099)
Disclosedas:--Deferredtaxassets 802 1,069 0 0-Deferredtaxliabilities (11,882) (12,468) (1,099) (1,099)
(11,080) (11,399) (1,099) (1,099)
Inrespectof(taxable)/deductibletemporarydifferencesof:--Property,plantandequipment (10,394) (12,610) 0 0-Investmentproperties (293) (126) (1,099) (1,099)-Right-of-useassets (1,738) 0 0 0-Investmentsinassociates (607) (613) 0 0-Biologicalassets 0 (83) 0 0-Inventories 398 276 0 0-Financialinstruments 1,480 1,757 0 0-Leaseliabilities 74 0 0 0
(11,080) (11,399) (1,099) (1,099)
Saveasdisclosedabove,asat 31December2019,deferred tax liabilitiesanddeferred taxassetshavealsoeffectively been recognised and offset against each other by the Group and the Company to the extent ofRM212,000andRM45,000(2018:RM71,000andRM17,000)respectively.Nofurtherdeferredtaxassetshavebeenrecognisedforthefollowingexcessofdeductibletemporarydifferences,unusedcapitalallowancesandtaxlossesovertaxabletemporarydifferences:-
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Deductibletemporarydifferencesof:--Property,plantandequipment 9 0 9 0-Inventories 1,733 1,772 0 0-Contractassetsandcontractliabilities 0 2,129 0 0-Leaseliabilities 253 0 140 0-Provisionforonerouscontract 0 144 0 0-Retirementbenefits 6,544 4,705 6,544 4,705Unusedcapitalallowances 2,556 2,397 1,070 1,060Unusedtaxlosses:--Expiringinyearofassessment2025 41,128 41,732 19,069 19,069-Expiringinyearofassessment2026 5,030 0 2,575 0Taxabletemporarydifferencesof:--Property,plantandequipment (470) (294) 0 (69)-Right-of-useassets (294) 0 (189) 0-Biologicalassets (118) 0 0 0
56,371 52,585 29,218 24,765
Thedeductibletemporarydifferencesandunusedcapitalallowanceshavenoexpirydate.
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 101
13. Biological assets
Group
2019 2018RM’000 RM’000
At1January 346 397Fairvaluegains 590 1,202Harvestandsales (818) (1,253)At31December 118 346
Estimatedquantities:--Harvestedduringtheyear(metrictonnes) 2,043 2,739-Unharvestedat31December(metrictonnes) 360 1,050
Biologicalassetsrepresentfreshfruitbunches(“FFBs”)growingonoilpalmtreesandaremeasuredatfairvaluelesscostsofdisposal.ThefairvaluesweremeasuredbymultiplyingtheestimatedquantitiesofFFBsofdifferentageattributesbytheobservablecurrentmarketpricesofharvestedFFBsproratedusingalinearinterpolation(i.e.Level2).
14. Contract costs
Group
2019 2018RM’000 RM’000
Costsofobtainingcontracts 116 60
15. Contract assets and contract liabilities
Group
Contract assets
2019 2018RM’000 RM’000
Saleofgoods(Note(i)) 4,007 4,106Propertydevelopment(Note(ii)) 2,074 4,024Constructioncontracts(Note(iii)) 1,839 0
7,920 8,130
Contract liabilities
2019 2018RM’000 RM’000
Constructioncontracts(Note(iii)) 2,393 8,353
(i) Contractassetsfromsaleofgoods
2019 2018RM’000 RM’000
At1January 4,106 4,423Reclassificationtoreceivables (4,106) (4,423)Excessofrevenuerecognisedoverreceivables 4,007 4,106At31December 4,007 4,106
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019102
15. Contract assets and contract liabilities (cont’d)
(i) Contractassetsfromsaleofgoods(cont’d)
As disclosed inNote 2.21, theGroup generally satisfies its performance obligations at a point in timeupondeliveryofgoods.Anyconditionalrighttoconsiderationafteraperformanceobligationissatisfiedispresentedascontractasset.
TheGroupmeasuresthelossallowanceforcontractassetsatanamountequaltolifetimeexpectedcreditlossesusing thesimplifiedapproach inaccordancewithMFRS9.Basedonthe lowhistoricalobserveddefaultrates(adjustedforforward-lookingestimates),theexpectedcreditlossesoncontractassetsarenotconsideredtobematerialandhence,havenotbeenrecognised.
(ii) Contractassetsfrompropertydevelopment
2019 2018RM’000 RM’000
At1January 4,024 7,761Revenuerecognisedduringtheyear 9,985 16,879Progressbillingsduringtheyear (11,935) (20,616)At31December 2,074 4,024
AsdisclosedinNote2.21,theGroupgenerallysatisfiesitsperformanceobligationsovertimeduringthedevelopmentperiod.Anyexcessof revenue recognisedoverprogressbillings ispresentedas contractasset.
TheGroupmeasuresthelossallowanceforcontractassetsatanamountequaltolifetimeexpectedcreditlossesusing thesimplifiedapproach inaccordancewithMFRS9.Basedonthe lowhistoricalobserveddefaultrates(adjustedforforward-lookingestimates),theexpectedcreditlossesoncontractassetsarenotconsideredtobematerialandhence,havenotbeenrecognised.
Remainingperformanceobligations
Asat31December2019,theaggregatetransactionpriceallocatedtotheremainingperformanceobligationsamountedtoRM4,300,000(2018:RM2,900,000)andtheGroupexpectstorecognisethisrevenuewhentheprojectsarecompletedoverthenext1to2(2018:1to2)years.
(iii) Contractassetsandcontractliabilitiesfromconstructioncontracts
2019 2018RM’000 RM’000
At1January (8,353) (3,135)Revenuerecognisedduringtheyear 16,430 29,041Progressbillingsduringtheyear (6,979) (34,259)Considerationreceivedinadvance (1,652) 0At31December (554) (8,353)
Disclosedas:--Contractassets 1,839 0-Contractliabilities (2,393) (8,353)
(554) (8,353)
AsdisclosedinNote2.21,theGroupgenerallysatisfiesitsperformanceobligationsovertimeduringtheconstruction period.Any excess of revenue recognised over progress billings is presented as contractasset,whereasanydeficitispresentedascontractliability.
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 103
15. Contract assets and contract liabilities (cont’d)
(iii) Contractassetsandcontractliabilitiesfromconstructioncontracts(cont’d)
TheGroupmeasuresthelossallowanceforcontractassetsatanamountequaltolifetimeexpectedcreditlossesusing thesimplifiedapproach inaccordancewithMFRS9.Basedonthe lowhistoricalobserveddefaultrates(adjustedforforward-lookingestimates),theexpectedcreditlossesoncontractassetsarenotconsideredtobematerialandhence,havenotbeenrecognised.
Remainingperformanceobligations
Asat31December2019,theaggregatetransactionpriceallocatedtotheremainingperformanceobligationsamountedtoRM62,945,000(2018:RM44,216,000)andtheGroupexpectstorecognisethisrevenuewhentheprojectsarecompletedoverthenext1to2(2018:1to2)years.
16. Cash and cash equivalents
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Highlyliquidinvestmentsinmoneymarketfunds 858 1,827 858 1,827Termdeposits 78,613 71,604 2,263 3,324Cashandbankbalances 22,895 33,083 395 248
102,366 106,514 3,516 5,399
Cashandcashequivalentsareplacedwithreputablefinancial institutionswithlowcreditrisk.Accordingly,theirexpectedcreditlossesarenotconsideredtobematerialandhence,havenotbeenrecognised.
CertaintermdepositsoftheGrouptotallingRM407,000(2018:RM3,584,000)havebeenpledgedassecurityforbankingfacilitiesgrantedtotheGroup.Accordingly,thesetermdepositsarenotfreelyavailableforuse.
Theeffectiveinterestratesoftermdepositsasat31December2019rangedfrom1.00%to3.80%(2018:0.05%to4.85%)perannum.
Forthepurposeofstatementofcashflows,cashandcashequivalentsarepresentednetofbankoverdraftandpledgeddepositsasfollows:-
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Cashandcashequivalents 102,366 106,514 3,516 5,399Bankoverdraft (665) 0 0 0Termdepositspledgedassecurity (407) (3,584) 0 0
101,294 102,930 3,516 5,399
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019104
17. Payables
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Tradepayables:--Relatedparty(a) 1,660 1,595 0 0-Relatedparty(b) 636 636 0 0-Unrelatedparties 45,127 56,372 0 0
47,423 58,603 0 0Otherpayables:--Relatedparty(b) 600 241 0 0-Unrelatedparties 19,201 20,485 1,932 1,634
19,801 20,726 1,932 1,634Amountsduetosubsidiaries 0 0 13,028 13,040Amountduetoassociate 7,166 7,241 7,166 7,241
74,390 86,570 22,126 21,915Contingentconsideration-atfairvalue 2,962 2,957 0 0
77,352 89,527 22,126 21,915
(a) Being a company in which a director has substantial financial interest(b) Being companies in which close family members of certain directors have substantial financial interests
Payablesaregenerallyshort-terminnatureorrepayableondemandandtheircarryingamountswillapproximatetotheremainingcontractualundiscountedcashflows.
Trade and other payables
Thecredittermsoftradeandotherpayablesrangefrom30to120days.
Amounts due to subsidiaries and associate
Theamountsduetosubsidiariesandassociateareunsecured,interestfreeandrepayableondemand.
Contingent considerationThisrepresentsthebalancecontingentconsiderationpayabletoSIEGpursuanttothesubscriptionagreementasdisclosedinNote8.
18. Loans and borrowings
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
SecuredHirepurchasepayables 0 601 0 320Bankoverdraft 665 0 0 0Termloans 37,201 40,522 0 0UnsecuredBankeracceptances 1,365 0 0 0Revolvingcredit 7,000 10,000 0 0Termloans 13,103 15,694 0 0
59,334 66,817 0 320
Disclosedas:--Currentliabilities 23,772 22,508 0 116-Non-currentliabilities 35,562 44,309 0 204
59,334 66,817 0 320
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 105
18. Loans and borrowings (cont’d)
Hirepurchasepayablesweresecuredagainsttheassetsacquiredthereunder(Note4).Othersecuredloansandborrowingsaresecuredagainstcertaininvestmentproperties(Note5)andinventories(Note10).
Theeffectiveinterestratesofloansandborrowingsasat31December2019rangedfrom4.32%to5.82%(2018:4.61%to6.16%)perannum.
Except forhirepurchasepayablesand term loans, loansandborrowingsaregenerallyshort-term innatureorrepayableondemandandtheircarryingamountswillapproximatetotheremainingcontractualundiscountedcashflows.
Hire purchase payables
Hirepurchasepayableswererepayableover5years.Therepaymentanalysisisasfollows:-
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Minimumhirepurchasepayments:--Within1year 0 241 0 128-1to5years 0 403 0 217Totalcontractualundiscountedcashflows 0 644 0 345Futurefinancecharges 0 (43) 0 (25)Presentvalueofhirepurchasepayables:--Within1year 0 217 0 116-1to5years 0 384 0 204
0 601 0 320
The fair values of hire purchase payables weremeasured using present value technique by discounting theexpectedfuturecashflowsusingobservablecurrenttmarketinterestratesforsimilarliabilities(i.e.Level2).Thefairvaluesmeasuredwereconsideredtobereasonablyclosetothecarryingamountsreportedastheobservablecurrentmarketinterestratesalsoapproximatedtotheeffectiveinterestratesofhirepurchasepayables.
Term loans
Termloansarerepayableover1to15years.Therepaymentanalysisisasfollows:-
Group2019 2018
RM’000 RM’000
Grossloaninstalments:--Within1year 16,931 14,436-1to5years 22,189 30,171-After5years 22,222 24,762Totalcontractualundiscountedcashflows 61,342 69,369Futurefinancecharges (11,038) (13,153)Presentvalueoftermloans 50,304 56,216
Thefairvaluesoftermloansweremeasuredusingpresentvaluetechniquebydiscountingtheexpectedfuturecashflowsusingobservablecurrentmarketinterestratesforsimilarliabilities(i.e.Level2).Thefairvaluesmeasuredwereconsideredtobereasonablyclosetothecarryingamountsreportedastheobservablecurrentmarketinterestratesalsoapproximatedtotheeffectiveinterestratesoftermloans.
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019106
19. Lease liabilities
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Grossleaseliabilities:--Within1year 532 0 140 0-1to5years 533 0 288 0Totalcontractualundiscountedcashflows 1,065 0 428 0Futurefinancecharges (62) 0 (31) 0Presentvalueofleaseliabilities 1,003 0 397 0
Disclosedas:--Currentliabilities 505 0 124 0-Non-currentliabilities 498 0 273 0
1,003 0 397 0
Theincrementalborrowingratesappliedtoleaseliabilitiesasat31December2019rangedfrom4.39%to5.00%perannum.
20. Derivatives
Group
2019 2018RM’000 RM’000
Forwardexchangecontracts-atfairvalue 0 37
Forwardexchangecontractsareusedtohedgetheexposuretocurrencyrisk.TheGroupdoesnotapplyhedgeaccounting.Asat31December2018,theGrouphadcontractswithafinancialinstitutionduewithin1yeartobuyUSD600,000andsellRM2,521,000atcontractualforwardrates.
Thefairvaluesofforwardexchangecontractswerequotedbythefinancialinstitution,whichnormallymeasuredthefairvaluesusingpresentvaluetechniquebydiscountingthedifferencesbetweencontractualforwardpricesandobservablecurrentmarketforwardpricesusingrisk-freeinterestrate(i.e.Level2).
21. Provision for onerous contract
Group
2019 2018RM’000 RM’000
At1January 144 1,004Provisionreversedduringtheyear (144) (860)At31December 0 144
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 107
22. Retirement benefits
GroupandCompany
2019 2018RM’000 RM’000
At1January 4,705 4,163Definedbenefitcosts 1,839 542At31December 6,544 4,705
Beingpresentvalueofdefinedbenefitobligationsdisclosedas:--Currentliabilities 0 0-Non-currentliabilities 6,544 4,705
6,544 4,705
Thecomponentsofdefinedbenefitcostsareasfollows:-
2019 2018RM’000 RM’000
Currentservicecost 29 542Interestexpense 228 0Pastservicecost 1,297 0Remeasurementofdefinedbenefitliability:--Actuariallossesarisingfromchangesinfinancialassumptions 285 0
1,839 542
Theprincipalactuarialassumptionsusedtodeterminethepresentvalueofthedefinedbenefitobligationsareasfollows:-
2019 2018% %
Discountrate 4.10 4.94Futuresalarygrowth 4.00 4.00
The following tabledemonstrates thesensitivityof thedefinedbenefitobligations tochanges ineachprincipalactuarialassumptionthatwerereasonablypossibleattheendofthereportingperiod,withallothervariablesheldconstant:-
Increase/(Decrease)indefinedbenefitobligations
2019 2018RM’000 RM’000
Increaseindiscountrateby1% (419) n/aDecreaseindiscountrateby1% 461 n/aIncreaseinfuturesalarygrowthby1% 457 n/aDecreaseinfuturesalarygrowthby1% (423) n/a
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019108
23. Share capital
2019 2018RM’000 RM’000
Issued and fully paid277,905,000ordinaryshareswithnoparvalue 277,992 277,992
Treasury shares
TheshareholdersoftheCompany,byaresolutionpassedattheannualgeneralmeetingheldon19May2010,approved theCompany’splan topurchase itsownshares.Thedetailsof thesharespurchased fromtheopenmarketusinginternallygeneratedfundsandheldastreasurysharesduringthefinancialyearareasfollows:-
2019 2018No.ofordinary
shares’000
CostRM’000
No.ofordinaryshares’000
CostRM’000
At1January 3,543 4,546 3,543 4,546Sharesdistributedassharedividends (3,427) (4,398) 0 0At31December 116 148 3,543 4,546
Duringthefinancialyear,theCompanydistributed3,427,000treasurysharesassharedividendsonthebasisof1treasuryshareforevery80existingordinarysharesinissue.
Thenumberofoutstandingsharesinissueafterexcludingthetreasurysharesisasfollows:-
2019 2018No.ofordinary
shares’000
No.ofordinaryshares’000
At1January 274,362 274,362Sharesdistributedassharedividends 3,427 0At31December 277,789 274,362
24. Non-controlling interests (“NCI”)
Group
AccumulatedNCI LossallocatedtoNCI2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
GUHDevelopmentSdn.Bhd. (11) (3) (8) (5)
ThedetailsofthesubsidiarythathasNCIareasfollows:-
Nameofsubsidiary
Principalplaceof
business/Countryof
incorporation
EffectiveownershipinterestheldbyNCI
Principalactivity2019 2018
GUHDevelopmentSdn.Bhd. Malaysia 0.54% 0.54% Propertydevelopment
ThesummarisedfinancialinformationoftheabovesubsidiaryhasnotbeendisclosedasitsNCIarenotmaterialtotheGroup.
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 109
25. Revenue
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Revenuefromcontractswithcustomers:--Saleofgoods 295,114 291,649 0 0-Saleofagriculturalproduce 818 1,253 0 0-Renderingofservices 0 0 5,210 5,210-Propertydevelopment 9,985 16,879 0 0-Saleofcompleteddevelopmentunits 11,884 9,768 0 0-Constructioncontracts 16,430 29,041 0 0
334,231 348,590 5,210 5,210Othersourcesofrevenue:--Dividendincome 0 0 12,400 13,468-Operatingleaseincome 1,759 534 918 44
1,759 534 13,318 13,512335,990 349,124 18,528 18,722
Disaggregation of revenue from contracts with customers
Group
Operatingsegments(Note33)Manufacture
ofprinted Property Saleof Waterandcircuit develop- electrical Cultivation wastewaterboards ment appliances ofoilpalm treatment TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2019
Majorproducts/services:--Printedcircuitboards 289,637 0 0 0 0 289,637-Propertiesunderdevelopment 0 9,985 0 0 0 9,985-Completeddevelopmentunits 0 11,884 0 0 0 11,884-Electricalappliances 0 0 5,477 0 0 5,477-Freshfruitbunches 0 0 0 818 0 818-Managementandconstructionofwaterandwastewatertreatmentplant 0 0 0 0 16,430 16,430
289,637 21,869 5,477 818 16,430 334,231
Geographicalareas:--Malaysia 92,057 21,869 5,477 818 16,430 136,651-China 92,103 0 0 0 0 92,103-Indonesia 41,909 0 0 0 0 41,909-Singapore 42,020 0 0 0 0 42,020-Others 21,548 0 0 0 0 21,548
289,637 21,869 5,477 818 16,430 334,231
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019110
25. Revenue (cont’d)
Disaggregation of revenue from contracts with customers (cont’d)
Group
Operatingsegments(Note33)Manufacture
ofprinted Property Saleof Waterandcircuit develop- electrical Cultivation wastewaterboards ment appliances ofoilpalm treatment TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2019
Timingofrevenuerecognition:--Overtime 0 9,985 0 0 16,430 26,415-Atapointintime 289,637 11,884 5,477 818 0 307,816
289,637 21,869 5,477 818 16,430 334,231
2018
Majorproducts/services:--Printedcircuitboards 284,030 0 0 0 0 284,030-Propertiesunderdevelopment 0 16,879 0 0 0 16,879-Completeddevelopmentunits 0 9,768 0 0 0 9,768-Electricalappliances 0 0 7,619 0 0 7,619-Freshfruitbunches 0 0 0 1,253 0 1,253-Managementandconstructionofwaterandwastewatertreatmentplant 0 0 0 0 29,041 29,041
284,030 26,647 7,619 1,253 29,041 348,590
Geographicalareas:--Malaysia 98,871 26,647 7,619 1,253 29,041 163,431-China 111,117 0 0 0 0 111,117-Indonesia 39,086 0 0 0 0 39,086-Singapore 25,861 0 0 0 0 25,861-Others 9,095 0 0 0 0 9,095
284,030 26,647 7,619 1,253 29,041 348,590
Timingofrevenuerecognition:--Overtime 0 16,879 0 0 29,041 45,920-Atapointintime 284,030 9,768 7,619 1,253 0 302,670
284,030 26,647 7,619 1,253 29,041 348,590
Company
InformationaboutdisaggregationofrevenuehasnotbeendisclosedastheCompanyderivesrevenuemainlyfromrenderingmanagementservicestosubsidiaries.
26. Impairment gains/(losses) on financial assets
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Tradereceivablesfromcontractswithcustomers 7 (76) 0 0Amountsduefromsubsidiaries 0 0 (4,216) (4,803)
7 (76) (4,216) (4,803)
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 111
27. Profit before tax
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Profitbeforetaxisarrivedataftercharging:-
Amortisationofcontractcosts 382 703 0 0Auditors’remuneration:--Currentyear 254 245 53 50-Prioryear 23 0 0 0Depreciationofinvestmentproperties 808 458 0 0Depreciationofproperty,plantandequipment 13,887 15,112 169 353Depreciationofright-of-useassets 1,599 0 164 0Directoperatingexpenditureforinvestmentpropertiesgeneratingrentalincome 43 41 28 28Employeebenefitsexpense(Note28) 74,552 72,381 9,073 7,425Fairvaluechangesinbiologicalassets(net) 228 51 0 0Fairvaluelossesonfinancialinstrumentsmandatorilymeasuredatfairvaluethroughprofitorloss 41 259 0 233Feeexpenseforfinancialinstrumentsnotmeasuredatfairvaluethroughprofitorloss 387 325 1 2Interestexpenseforfinancialliabilitiesnotmeasuredatfairvaluethroughprofitorloss 3,252 3,098 0 19Interestexpenseforleaseliabilities 53 0 20 0Inventorieswrittendown 565 273 0 0Leaseexpenserelatingto:--Short-termleases 323 0 108 0-Leasesoflow-valueassets(otherthanshort-termleases) 6 0 0 0-Others 0 417 0 108Property,plantandequipmentwrittenoff 34 9 1 0Unrealisedlossonforeignexchange 192 304 0 154
andcrediting:-
Gainondisposalofproperty,plantandequipment 21 24 60 0
Gainonforeignexchange:--Realised 534 804 0 0-Unrealised 0 0 75 0Interestincomeforfinancialassetsmeasuredatamortisedcost 2,249 2,393 88 245Operatingleaseincomefrom:--Investmentproperties 1,759 529 918 44-Others 0 5 0 0Reversalofimpairmentlossoninvestmentsinsubsidiaries(a) 0 0 579 7,368Reversalofinventorieswrittendown 448 309 0 0
(a) Included in other income
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019112
28. Employee benefits expense (including directors’ remuneration)
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
DirectorsoftheCompany:--Fees 632 627 594 594-Othershort-termemployeebenefits 3,655 3,359 3,655 3,359-Definedcontributionplans 652 613 652 613-Definedbenefitplans 1,554 542 1,554 542
6,493 5,141 6,455 5,108Directorsofsubsidiaries:--Fees 49 42 0 0-Othershort-termemployeebenefits 1,141 885 399 262-Definedcontributionplans 99 75 46 31
1,289 1,002 445 293Otheremployees:--Short-termemployeebenefits 61,598 60,970 1,950 1,813-Definedcontributionplans 5,172 5,268 223 211
66,770 66,238 2,173 2,02474,552 72,381 9,073 7,425
Theestimatedmoneyvalueofbenefitsreceivedorreceivablebycertaindirectorsotherwisethanincashisasfollows:-
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
DirectorsoftheCompany 44 56 44 56Directorsofsubsidiaries 22 22 17 17
66 78 61 73
Thedirectors’remunerationrepresentstheentirekeymanagementpersonnelcompensationoftheGroupandtheCompanyastherewerenootherkeymanagementpersonnelapartfromallthedirectorswhohavetheauthorityandresponsibility,directlyorindirectly,forplanning,directingandcontrollingtheactivitiesoftheGroupandtheCompany.
29. Tax expense
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Taxbasedonresultsfortheyear:--Currenttax 2,517 4,173 0 0-Deferredtax 171 (759) 0 549
2,688 3,414 0 549Tax(over)/underprovidedinprioryear:--Currenttax (202) (132) 0 0-Deferredtax (400) 201 0 0
2,086 3,483 0 549
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 113
29. Tax expense (cont’d)
Thenumericalreconciliationbetweentheproductofprofitbeforetaxmultipliedbytheapplicabletaxrate,whichisthestatutoryincometaxrate,andthetaxexpenseisasfollows:-
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Profitbeforetax 7,096 797 3,626 11,531
Taxatapplicabletaxrateof24% 1,703 191 870 2,767Non-deductibleexpenses 2,232 1,464 1,203 1,440Non-taxableincome (79) (56) (3,142) (5,017)Reinvestmentallowancesclaimed (2,122) (432) 0 0Effectofdifferentialtaxrates 45 640 0 549Increaseinunrecogniseddeferredtaxassets 909 1,607 1,069 810Tax(over)/underprovidedinprioryear (602) 69 0 0Taxexpense 2,086 3,483 0 549
30. Earnings/(Loss) per share
Group
Thebasicearnings/(loss)pershareiscalculatedbydividingtheGroup’sprofit/(loss)forthefinancialyearattributabletoownersoftheCompanybytheweightedaveragenumberofordinarysharesinissueduringthefinancialyearasfollows:-
2019 2018(Restated)
Profit/(Loss)forthefinancialyearattributabletoownersoftheCompany(RM’000) 5,018 (2,681)
Numberofsharesinissueat1January(’000) 274,362 274,362Effectofsharedividends(a)(’000) 3,427 3,427Weightedaveragenumberofsharesinissue(’000) 277,789 277,789
Basicearnings/(loss)pershare(sen) 1.81 (0.97)
(a) The calculation of basic loss per share for the previous financial year has been adjusted retrospectively to reflect the changes in the number of shares as a result of the share dividends.
Thedilutedearnings/(loss)pershareequalsthebasicearnings/(loss)pershareastheCompanydidnothaveanydilutivepotentialordinarysharesduringthefinancialyear.
31. Notes to statements of cash flows
Acquisition of right-of-use assets
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Costofright-of-useassetsacquired 622 0 253 0Acquisitionbymeansofleases (581) 0 (227) 0Netcashdisbursed 41 0 26 0
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019114
31. Notes to statements of cash flows (cont’d)
Short-term loans and borrowings
Group2019 2018
RM’000 RM’000
At1January 10,000 14,832Netcashflowchanges (1,635) (4,832)At31December 8,365 10,000
Representedby:--Bankeracceptances(Note18) 1,365 0-Revolvingcredit(Note18) 7,000 10,000
8,365 10,000
Term loans
Group2019 2018
RM’000 RM’000
At1January 56,216 28,994Drawdowns 6,214 36,874Repayments (12,160) (9,671)Otherchanges 34 19At31December(Note18) 50,304 56,216
Lease liabilities
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
At1January-Broughtforwardfromprecedingyear 0 0 0 0-EffectofadoptingMFRS16 890 0 320 0-Adjusted 890 0 320 0Additions 581 0 227 0Payments (468) 0 (150) 0At31December(Note19) 1,003 0 397 0
Thetotalcashoutflowforleasesisasfollows:-
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Operating activitiesLeaseexpenserecognisedinprofitorloss(Note27) 329 n/a 108 n/a
Investing activitiesAcquisitionofright-of-useassets 41 n/a 26 n/aFinancing activitiesInterestportionofleaseliabilities(Note27) 53 n/a 20 n/aPrincipalportionofleaseliabilities 468 n/a 150 n/a
891 n/a 304 n/a
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 115
31. Notes to statements of cash flows (cont’d)
Hire purchase payables
Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
At1January
-Broughtforwardfromprecedingyear 601 854 320 468
-EffectofadoptingMFRS16 (601) 0 (320) 0
-Adjusted 0 854 0 468
Repayments 0 (253) 0 (148)
At31December(Note18) 0 601 0 320
32. Related party disclosures
Otherthanthedirectors’remunerationasdisclosedinNote28,transactionswithrelatedpartiesduringthefinancialyearareasfollows:-
Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Dividendsdeclaredfromsubsidiaries 0 0 12,400 13,468
Renderingofmanagementservicestosubsidiaries 0 0 5,210 5,210
Rentalchargedbysubsidiary 0 0 108 108
Rentalchargedtosubsidiary 0 0 746 39
Purchaseofgoodsfromotherrelatedparty(a) 11,328 9,873 0 0
Purchaseofgoodsfromotherrelatedparty(b) 0 18 0 0
Acquisitionofproperty,plantandequipmentfromotherrelatedparty(a) 12 40 0 0
Acquisitionofproperty,plantandequipmentfromotherrelatedparty(b) 186 30 0 0
Receivingofservicesfromotherrelatedparty(b) 1,570 976 0 0
Rentalchargedbyotherrelatedparty(a) 114 126 0 0
Rentalchargedtootherrelatedparty(a) 172 5 172 5
Rentalchargedtoassociate 1,587 529 0 0
Saleofgoodstootherrelatedparty(a) 2,435 1,858 0 0
(a) Being companies in which certain directors have substantial financial interests(b) Being companies in which close family members of certain directors have substantial financial interests
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019116
33. Segment reporting
Group
Operating segments
Formanagementpurposes,theGroupisorganisedintobusinessunitsbasedontheirproductsandservicesandhasthefollowingreportableoperatingsegments:-
(i) Manufactureofprintedcircuitboards(ii) Propertydevelopment(iii) Saleofelectricalappliances(iv) Cultivationofoilpalm(v) Waterandwastewatertreatment
Nooperatingsegmentshavebeenaggregatedtoformtheabovereportablesegments.
TheaccountingpoliciesandmeasurementbasesofthesegmentitemsreportedarethesameasthosedisclosedinNote2.Transferpricesbetweenoperatingsegmentsareonanarm’slengthbasisinamannersimilartotransactionswithexternalparties.
Manufacture Unallocatedofprinted Property Saleof Waterand non-
circuit develop- electrical Cultivation wastewater operatingboards ment appliances ofoilpalm treatment segments TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2019
Segmentassets 301,780 266,338 3,855 18,241 16,139 43,563 649,916Investmentsinassociates 0 0 0 0 0 15,963 15,963Incometaxassets 0 1,199 3 60 18 0 1,280Totalassets 301,780 267,537 3,858 18,301 16,157 59,526 667,159
Additionstonon-currentassets(net) 11,710 27 522 0 7 (1,617) 10,649
Segmentliabilities 40,408 15,970 618 40 9,514 19,739 86,289Loansandborrowings 20,103 12,745 0 0 1,365 25,121 59,334Leaseliabilities 148 458 0 0 0 397 1,003Incometaxliabilities 11,828 114 7 0 0 1,620 13,569Totalliabilities 72,487 29,287 625 40 10,879 46,877 160,195
Externalrevenue 289,637 21,869 5,477 818 16,430 1,759 335,990Intersegmentrevenue 0 103 20 0 2,864 18,356 21,343Totalrevenue 289,637 21,972 5,497 818 19,294 20,115 357,333
Segmentprofit/(loss) 12,745 2,445 (141) (1,075) 124 (4,522) 9,576Interestincome 1,784 152 12 0 213 88 2,249Interestexpense (1,180) (738) 0 0 (54) (1,333) (3,305)Shareofassociates’loss 0 0 0 0 0 (1,424) (1,424)Profit/(Loss)beforetax 13,349 1,859 (129) (1,075) 283 (7,191) 7,096Tax(expense)/income (1,512) (755) (3) 168 (14) 30 (2,086)Profit/(Loss)forthefinancialyear 11,837 1,104 (132) (907) 269 (7,161) 5,010
Non-cashincome 436 0 12 0 0 0 448Depreciation 14,296 477 35 66 311 1,109 16,294Othernon-cashexpenses 863 0 0 228 2 1,485 2,578
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 117
33. Segment reporting (cont’d)
Operating segments (cont’d)
Manufacture Unallocatedofprinted Property Saleof Waterand non-
circuit develop- electrical Cultivation wastewater operatingboards ment appliances ofoilpalm treatment segments TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2018
Segmentassets 312,600 266,539 3,942 23,138 18,783 43,460 668,462Investmentsinassociates 0 0 0 0 0 17,463 17,463Incometaxassets 414 2,871 15 54 426 0 3,780Totalassets 313,014 269,410 3,957 23,192 19,209 60,923 689,705
Additionstonon-currentassets 13,099 68 0 0 6 19,935 33,108
Segmentliabilities 49,097 19,208 1,157 85 14,677 18,542 102,766Loansandborrowings 25,694 16,173 0 0 0 24,950 66,817Incometaxliabilities 12,459 116 8 168 0 1,660 14,411Totalliabilities 87,250 35,497 1,165 253 14,677 45,152 183,994
Externalrevenue 284,030 26,647 7,619 1,253 29,041 534 349,124Intersegmentrevenue 0 110 8 0 181 18,717 19,016Totalrevenue 284,030 26,757 7,627 1,253 29,222 19,251 368,140
Segmentprofit/(loss) 7,621 594 70 214 (2,215) (4,731) 1,553Interestincome 1,917 134 6 0 58 278 2,393Interestexpense (1,168) (1,177) 0 0 0 (753) (3,098)Shareofassociates'loss 0 0 0 0 0 (51) (51)Profit/(Loss)beforetax 8,370 (449) 76 214 (2,157) (5,257) 797Taxexpense (2,249) (529) (1) (36) 0 (668) (3,483)Profit/(Loss)forthefinancialyear 6,121 (978) 75 178 (2,157) (5,925) (2,686)
Non-cashincome 280 0 29 0 0 0 309Depreciation 13,977 335 36 68 375 779 15,570Othernon-cashexpenses 569 0 0 51 (51) 945 1,514
Geographical information
Inpresenting informationaboutgeographicalareas,segmentrevenueisbasedonthegeographical locationofcustomerswhereassegmentassetsarebasedonthegeographicallocationofassets.
Externalrevenue Non-currentassets2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Malaysia 138,410 163,965 309,035 307,040China 92,103 111,117 44,201 48,709Indonesia 41,909 39,086 0 0Singapore 42,020 25,861 0 0Othercountries 21,548 9,095 0 0
335,990 349,124 353,236 355,749
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019118
33. Segment reporting (cont’d)
Major customers
For the financial year ended 31December 2019, therewere 2 (2018 : nil)major groups of customers of themanufactureofprintedcircuitboardssegmentthatcontributed10%ormoreoftheGroup’stotalrevenueandthetotalrevenuegeneratedfromthesemajorgroupsamountedtoRM74,316,000(2018:nil).
34. Contractual commitments
Group
2019 2018RM’000 RM’000
Acquisitionofproperty,plantandequipment 3,422 1,747
35. Guarantee contracts
Company
Financial guarantee contracts
TheCompanyhasenteredintofinancialguaranteecontractstoprovidefinancialguaranteestofinancialinstitutionsandtradesuppliersforcreditfacilitiesgrantedtocertainsubsidiariesuptoatotallimitofRM149,748,000(2018:RM162,148,000).Thetotalutilisationofthesecreditfacilitiesasat31December2019amountedtoRM89,607,000(2018:RM92,341,000).Nomaturityanalysisispresentedforthefinancialguaranteecontractsastheentireamountcouldbecalledatanytimeintheeventofdefaultbythesubsidiaries.
The aforementioned financial guarantee contracts should have been recognised in the statement of financialpositioninaccordancewiththerecognitionandmeasurementpoliciesasstatedinNote2.16.Afterconsideringthattheprobabilityofthesubsidiariesdefaultingonthecreditlinesisremote,thefinancialguaranteecontractshavenotbeenrecognisedasthefairvaluesoninitialrecognitionarenotexpectedtobematerial.
Performance guarantee contract
TheCompanyhasalsoentered intoaperformanceguaranteecontractup toa limitofRM35,736,000 (2018 :RM35,736,000)toguaranteethedueperformanceofallthecontractworksbyasubsidiaryinawatertreatmentproject.
36. Financial risk management
TheactivitiesoftheGroupexposeittocertainfinancialrisks,includingcreditrisk,liquidityrisk,currencyriskandinterestraterisk.TheoverallfinancialriskmanagementobjectiveoftheGroupistoensurethatadequatefinancialresourcesareavailableforbusinessdevelopmentwhilstminimisingthepotentialadverseimpactsoffinancialrisksonitsfinancialposition,performanceandcashflows.
Theaforementionedfinancialriskmanagementobjectiveanditsrelatedpoliciesandprocessesexplainedbelowhaveremainedunchangedfromthepreviousfinancialyear.
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 119
36. Financial risk management (cont’d)
Credit risk
TheGroup’sexposuretocreditriskarisesmainlyfromreceivables,derivativecontractsanddepositsplacedwithfinancial institutions.Themaximum credit risk exposure of these financial assets is best represented by theirrespectivecarryingamountsinthestatementoffinancialposition.TheCompanyisalsoexposedtocreditriskinrespectofitsfinancialguaranteesprovidedforcreditfacilitiesgrantedtocertainsubsidiaries.ThemaximumcreditriskexposureofthesefinancialguaranteesisthetotalutilisationofthecreditfacilitiesgrantedasdisclosedinNote35.
TheGroupmanagesitscreditriskexposureofreceivablesbyassessingcounterparties’financialstandingsonanongoingbasis,settingandmonitoringcounterparties’ limitsandcreditterms.ThequantitativeinformationaboutsuchcreditriskexposureisdisclosedinNote11.AstheGrouponlydealswithreputablefinancialinstitutions,thecreditriskassociatedwithderivativecontractsanddepositsplacedwiththemislow.
Liquidity risk
TheGroup’sexposuretoliquidityriskrelatestoitsabilitytomeetobligationsassociatedwithfinancialliabilitiesasandwhentheyfalldue.Theremainingcontractualmaturitiesoffinancialliabilitiesaredisclosedintheirrespectivenotes.
TheGrouppractisesprudentliquidityriskmanagementtominimisethemismatchoffinancialassetsandliabilitieswhilstmaintainingsufficientcashandtheavailabilityoffundingthroughstandbycreditfacilities.
Currency risk
TheGroup’sexposuretocurrencyriskarisesmainly fromtransactionsentered intoby individualentitieswithintheGroupincurrenciesotherthantheirfunctionalcurrencies.ThemajorfunctionalcurrencieswithintheGroupareRinggitMalaysia(“RM”)andRenminbi(“RMB”),whereasthemajorforeigncurrencytransactedisUSDollar(“USD”).Thegrosscarryingamountsofforeigncurrencydenominatedmonetaryitemsattheendofthereportingperiodareasfollows:-
Group CompanyDenominatedinUSD DenominatedinUSD
2019 2018 2019 2018RM’000 RM’000 RM’000 RM’000
Receivables 33,521 31,787 0 0Cashandcashequivalents 36,039 15,849 4 4Payables (23,509) (29,691) (7,166) (7,241)
46,051 17,945 (7,162) (7,237)
TheGroupobservesthemovementsinexchangeratesandactsaccordinglytominimiseitsexposuretocurrencyrisk.Wherenecessary,theGroupentersintoderivativecontractstohedgetheexposure.Suchexposureisalsopartlymitigatedinthefollowingways:-
(i) TheGroup’sforeigncurrencysalesandpurchasesprovideanaturalhedgeagainstfluctuationsinforeigncurrencies.
(ii) TheGroupmaintainspartof itscashandcashequivalents in foreigncurrencyaccounts tomeet futureobligationsinforeigncurrencies.
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019120
36. Financial risk management (cont’d)
Currency risk (cont’d)
Based on a symmetric basis which uses the foreign currency as a stable denominator, the following tabledemonstrates the sensitivity of profit or loss (and equity) to changes in exchange rates thatwere reasonablypossibleattheendofthereportingperiod,withallothervariablesheldconstant:-
Group CompanyIncrease/ (Increase)/ Increase/ (Increase)/
(Decrease) Decrease (Decrease) Decreaseinprofit inloss inprofit inprofit
2019 2018 2019 2018RM’000 RM’000 RM’000 RM’000
AppreciationofUSDagainstRMby10%(2018:10%) 900 452 (716) (724)DepreciationofUSDagainstRMby10%(2018:10%) (900) (452) 716 724AppreciationofUSDagainstRMBby10%(2018:10%) 2,445 778 0 0DepreciationofUSDagainstRMBby10%(2018:10%) (2,445) (778) 0 0
Interest rate risk
TheGroup’sexposuretointerestrateriskarisesmainlyfrominterest-bearingfinancialinstruments,namelytermdeposits,loansandborrowingsandleaseliabilities.
TheGroup observes themovements in interest rates and always strives to obtain themost favourable ratesavailablefornewfinancingorduringrepricing.ItisalsotheGroup’spolicytomaintainamixoffixedandfloatingratefinancialinstrumentsasfollows:-
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Fixed rate instrumentsFinancialassets 78,613 71,604 2,263 3,324Financialliabilities (9,368) (10,601) (397) (320)Floating rate instrumentsFinancialliabilities (50,969) (56,216) 0 0
AstheGroupdoesnotaccountforitsfixedratefinancialinstrumentsatfairvaluethroughprofitorloss,anychangeininterestratesattheendofthereportingperiodwouldnotaffectitsprofitorloss(andequity).Forfloatingratefinancialinstrumentsmeasuredatamortisedcost,thefollowingtabledemonstratesthesensitivityofprofitorloss(andequity)tochangesininterestratesthatwerereasonablypossibleattheendofthereportingperiod,withallothervariablesheldconstant:-
GroupIncrease/ (Increase)/
(Decrease) Decreaseinprofit inloss
2019 2018RM’000 RM’000
Increaseininterestratesby50basispoints (194) (214)Decreaseininterestratesby50basispoints 194 214
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019 121
37. Capital management
TheoverallcapitalmanagementobjectiveoftheGroupistosafeguarditsabilitytocontinueasagoingconcernsoas toprovide fair returns toownersandbenefits tootherstakeholders. Inorder tomeet thisobjective, theGroupalwaysstrivestomaintainanoptimalcapitalstructuretoreducethecostofcapitalandsustainitsbusinessdevelopment.
TheGroupconsidersitstotalequityandtotalinterest-bearingdebtstobethekeycomponentsofitscapitalstructureandmay,fromtimetotime,adjustthedividendpayouts,purchaseownshares,issuenewshares,sellassets,raiseorredeemdebts,wherenecessary,tomaintainanoptimalcapitalstructure.TheGroupmonitorscapitalusingadebt-to-equityratio,whichiscalculatedastotalinterest-bearingdebtsdividedbytotalequityasfollows:-
Group Company2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Loansandborrowings 59,334 66,817 0 320Leaseliabilities 1,003 0 397 0Totalinterest-bearingdebts 60,337 66,817 397 320Totalequity 506,964 505,711 419,443 416,102Totalcapital 567,301 572,528 419,840 416,422
Debt-to-equityratio 11.90% 13.21% 0.09% 0.08%
Theaforementionedcapitalmanagementobjective,policiesandprocesseshaveremainedunchangedfromthepreviousfinancialyear.
38. Comparative figures
Thefollowingcomparativefigureshavebeenreclassifiedtoconformwiththecurrentyear’spresentation:-
Aspreviouslyreported
Reclassifica-tions Asrestated
RM’000 RM’000 RM’000
Consolidated statement of financial position as at 31 December 2018 (extract)Payables 94,232 (4,705) 89,527Retirementbenefits 0 4,705 4,705
Statement of financial position as at 31 December 2018 (extract)Payables 26,620 (4,705) 21,915Retirementbenefits 0 4,705 4,705
Thereclassificationsofcomparativefiguresdidnothaveanysignificantimpactsonthereportedtotalcomprehensiveincomeandcashflows.
39. Significant events after the reporting period
The impact of theCOVID-19outbreakonpublic life and the industry inMalaysia and thebroader regionhassignificantlydisrupted theGroup’sbusinessactivities.While this isexpected tohaveanegative impacton theGroup’sperformanceforthecomingreportingperiods,theGroupisunabletoquantifythemagnitudeanddurationofsuchimpactatthisjunctureastheoutbreakcontinuestoprogressandtheconditionsareunpredictable.
NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019
GUH Holdings BerhadAnnual Report 2019122
ANALYSISOFSHAREHOLDINGS
Totalnumberofissuedshares : 277,904,539ordinaryshares
ClassofShares : OrdinaryShares
VotingRights : Onevoteperordinaryshare
Distribution Schedule of Shares
Asat30April2020
Holdings No. of Holders Total Holdings %
Lessthan100 1,081 57,138 0.02
100-1,000 2,392 1,030,271 0.37
1,001–10,000 6,697 23,211,191 8.36
10,001–100,000 1,662 42,108,527 15.16
100,001–lessthan5%ofissuedshares 174 131,206,701 47.23
5%andaboveofissuedshares 2 80,175,447 28.86
Total 12,008 277,789,275 100.00
Note:Excluding115,264treasuryshares
GUH Holdings BerhadAnnual Report 2019 123
ANALYSISOFSHAREHOLDINGS
Substantial Shareholders
Asat30April2020
Direct Interest Deemed InterestNo. of No. of
No. Name of Substantial Shareholders Shares % Shares %
1 HSBCNominees(Asing)SdnBhdHBAP For Gold Connection Assets Limited
47,740,072 17.19 - -
2 ZunHoldingsSdnBhd 32,435,375 11.68 - -3 PuanSriDatinSeriAngGaikNga 12,103,708 4.36 32,435,375a 11.684 DatinJessicaH’ngHsiehLing 3,598,465 1.30 32,435,375a 11.685 Dato’H’ngChunHsiang 2,438,748 0.88 32,435,375a 11.686 H’ngChunChing 2,115,200 0.76 32,435,375a 11.687 H’ngHsiehFern 894,199 0.32 32,435,375a 11.688 TanSriDato’SeriH’ngBokSan - - 53,585,695b 19.29
Directors’ Shareholding
Asat30April2020
Direct Interest Deemed InterestNo. of No. of
No. Name of Directors Shares % Shares %
1. TanSriDato’SeriH’ngBokSan - - 53,585,695b 19.292. DatukSeriKennethH’ngBakTee - - 1,404,649c 0.513. Dato’HarryH’ngBakSeah 2,697,710 0.97 - -4. DatinJessicaH’ngHsiehLing 3,598,465 1.30 32,435,375a 11.685. Dato’LaiChangHun 2,883,042 1.04 3,766,453d 1.366. WIsmailBinWNik 2,418,645e 0.87 - -7. ChewHockLin - - - -8. Dato’IsmailBinHamzah - - - -9. Dato’Dr.GanKongMeng - - - -
Notes:
a Deemed interestedbyvirtueofshareholdingsheld throughZunHoldingsSdn.Bhd.pursuant toSection8of the
CompaniesAct2016b Deemedinterestedbyvirtueofhisspouse’sandchildren’sshareholdingsintheCompany,aswellashisshareholdings
heldthroughZunHoldingsSdn.Bhd.,pursuanttoSections8and59(11)(c)oftheCompaniesAct2016c Deemed interestedby virtueof his spouse’s shareholdings in theCompanypursuant toSection59(11)(c) of the
CompaniesAct2016d Deemedinterestedbyvirtueofhischildren’sshareholdings,aswellashisshareholdingsheldthroughLaicoJaya
Sdn.Bhd.,pursuanttoSections8and59(11)(c)oftheCompaniesAct2016e 2,388,645sharesareheldviaHLBNominees(Tempatan)Sdn.Bhd.
GUH Holdings BerhadAnnual Report 2019124
Thirty (30) Largest ShareholdersAsat30April2020
No. Name of Securities Account Holders No. of Shares %
1 HSBCNominees(Asing)SdnBhdHBAP for Gold Connection Assets Limited (PB-SGDIV501999)
47,740,072 17.19
2 ZunHoldingsSdnBhd 32,435,375 11.68
3 PuanSriDatinSeriAngGaikNga 12,103,708 4.36
4 SongSiewGnoh 10,162,258 3.66
5 DB(Malaysia)Nominee(Asing)SdnBhdDeutsche Bank AG Singapore for YEOMAN 3-Rights Value Asia Fund (PTSL)
9,250,487 3.33
6 CIMBGroupNominees(Asing)SdnBhdExempt An for DBS Bank Ltd (SFS)
7,653,656 2.76
7 TeoKweeHock 5,447,707 1.96
8 TayTeckHo 4,800,000 1.73
9 KanYuOiLing 4,507,445 1.62
10 SiawPoonKeong 4,193,678 1.51
11 LaicoJayaSdnBhd 3,647,954 1.31
12 DatinJessicaH’ngHsiehLing 3,598,465 1.30
13 CGS-CIMBNominees(Asing)SdnBhdExempt An for CGS-CIMB Securities (Singapore) Pte Ltd (Retail Clients)
3,383,675 1.22
14 Dato’LaiChangHun 2,883,042 1.04
15 ShoptraJaya(M)SdnBhd 2,622,128 0.94
16 Dato’H’ngChunHsiang 2,438,748 0.88
17 HLBNominees(Tempatan)SdnBhdPledged Securities Account for W Ismail Bin W Nik
2,388,645 0.86
18 Dato’HarryH’ngBakSeah 2,360,329 0.85
19 H’ngChunChing 2,115,200 0.76
20 KenangaNominees(Asing)SdnBhdExempt An for Phillip Securities Pte Ltd (Client Account)
2,054,741 0.74
21 AffinHwangNominees(Asing)SdnBhdDBS Vickers Secs (S) Pte Ltd for Lim Mee Hwa
1,894,996 0.68
22 HLBNominees(Tempatan)SdnBhdPledged Securities Account for Chee Sai Mun
1,765,750 0.64
23 Inter-PacificEquityNominees(Tempatan)SdnBhdDatin Seri Tham Hooi Loon (0151)
1,404,649 0.51
24 UOBKayHianNominees(Tempatan)SdnBhdExempt An for UOB Kay Hian Pte Ltd (A/C Clients)
1,356,348 0.49
25 YeoKheeHuat 933,484 0.34
26 OngWanChin 915,000 0.33
27 H’ngHsiehFern 894,199 0.32
28 LeeSaiKim 861,520 0.31
29 TanPakNang 821,340 0.30
30 NyiewTengSia@YangTingChern 810,834 0.29
ANALYSISOFSHAREHOLDINGS
GUH Holdings BerhadAnnual Report 2019 125
LISTOFPROPERTIESAsat31December2019
No. Address/ Location Tenure Description Area Approximate Age Net Book Value Date of (square of properties/ (RM’000) Acquisition/metre) buildings Re-Valuation
1 Plot1240&1241, Leasehold Office/ 16,339 33years 20,585 31/12/2013BayanLepasFreeIndustrialZone, 60years FactorybuildingPhase3,BayanLepas Expiringon11900Penang 27/8/2041
2 Plot208ABayanLepasFree Leasehold Office/ 6,167 33years 7,296 31/12/2013IndustrialZone,Phase3, 60years FactorybuildingBayanLepas,11900Penang Expiringon
20/10/2049
3 160-4-3AnsonRoad, Freehold Apartment 153 38years 565 31/12/201610400Penang
4 588ChangjiangRoad, Leasehold Office/ 53,325 22years 31,061 31/12/2013NewDistrictSuzhou, 50years FactorybuildingJiangsu,China Expiringon
17/8/2047
5 Unit16,RoseGarden Leasehold Bungalow 232 21years 1,092 31/12/2013XiangXieMountainVillaResort 70yearsNo.289JinSanRoad,MuduTown, ExpiringonWuzhongDistrict,215101Suzhou 17/5/2068JiangsuProvince,China
6 AlongKualaLumpur/Seremban Freehold Ongoingmixed 430,122 - 22,925 30/09/2004Highway,PekanBukitKepayang, developmentschemeDistrictofSeremban knownasTamanNegeriSembilan BukitKepayang
7 AlongoffJalanSimpangAmpat Freehold Ongoingmixed 186,246 - 59,324 27/03/2014Mukim14&15DistrictofSeberang developmentschemePeraiTengah,PulauPinang knownasSimpang
Ampat
8 LotNo.1377Mukim12,Province Freehold IndustrialLand 26,100 - 13,008 09/09/2015WellesleySouth,Penang
9 LotNo.1690,Mukim12,Province Freehold IndustrialLand 22,720 - 10,373 09/09/2015WellesleySouth,Penang
10 LotNo.1692,Mukim12 Freehold Industrialland 21,250 - 8,000 31/12/2016ProvinceWellesleySouth,Penang
11 LotNo.1693,Mukim12 Freehold Industrialland 1,998 - 520 31/12/2016ProvinceWellesleySouth,Penang
12 27JalanSerendah26/40 Freehold 3-StoreySemi-D 819 6years 4,519 27/12/2013KawasanPerindustrianHicom factorySeksyen26,40400ShahAlamSelangor
13 LotNo.5MukimTeluiKiri, Freehold Agriculturalland 1,551,773 - 21,200 31/12/2013DaerahKualaMuda,Kedah
14 PTNo.47843MukimofRawang Freehold Commericalland 13,901 - 32,284 04/06/2015DistrictofGombakSelangorDarulEhsan
15 4935JalanSiram, Freehold 3-storeyterrace 511 28years 746 31/12/201312100Butterworth,Penang shophouse
16 FlatNo.27-C,Unit75,3rdFloor, Freehold 3rdfloorofa 86 32years 48 31/12/2013JalanTembikai,TamanMutiara, 3-storeyshophouse14000BukitMertajam,Penang
17 1-1-05No.1, Freehold Shoplot 86 25years 251 31/12/2016PersiaranBukitJambul1,ComplexRelau,11900Penang
18 UnitNo.24,25,27,91,100,101 Freehold 7unitsofdouble 1,169 21years - 31/12/2009&103LembahBeringin, storeyterracehousesSector26-2,Selangor
19 PT666,PekanBukitSelambau, Freehold IndustrialLand 3,971 - 522 12/09/2019DaerahKualaMuda,NegeriKedah
20 PartofLot6485,Mukim14 Freehold Commercialland 2,787 - 287 27/03/2014DistrictofSeberangPeraiSelatanPulauPinang
Revaluation Policy ThelandandbuildingsoftheGroupwererevaluedbyfirmsofindependentprofessionalvaluersusingopenmarketvaluebasis.
GUH Holdings BerhadAnnual Report 2019126
NOTICEOFANNUALGENERALMEETING
NOTICE IS HEREBY GIVEN THAT the 56th Annual General Meeting (“AGM”) of GUH Holdings Berhad (“theCompany”)willbeheldattheAuditoriumoftheCompanyat2ndFloor,Plot1240&1241,BayanLepasFreeIndustrialZone,Phase3,BayanLepas,11900PenangviaremoteparticipationandelectronicvotingfacilitiesonTuesday,30June2020at10:30a.m.totransactthefollowingbusinesses:
AGENDA
As Ordinary Business
1. TolaybeforethemeetingtheAuditedFinancialStatementsforthefinancialyearended31December2019togetherwiththeReportsoftheDirectorsandtheAuditorsthereon.
2. ToapprovethepaymentofDirectors’feesandbenefitsofuptoanamountofRM1,100,000witheffectfrom1January2020untilthenextAGMoftheCompanytobeheldin2021.
Resolution 1
3. To re-elect the following Directors who retire pursuant to Article 95 of the Company’sConstitutionandbeingeligible,offerthemselvesforre-election:
(i) TanSriDato’SeriH’ngBokSan(ii) DatukSeriKennethH’ngBakTee(iii) Dato’HarryH’ngBakSeah(iv) Mr.ChewHockLin(v) Dato’IsmailBinHamzah(vi) Dato’LaiChangHun
Resolution 2Resolution 3Resolution 4Resolution 5Resolution 6Resolution 7
4. Tore-appointMessrs.CroweMalaysiaPLTasAuditorsoftheCompanyforthefinancialyearending31December2020andtoauthorizetheDirectorstofixtheirremuneration.
Resolution 8
As Special Business
Toconsiderandifthoughtfit,topasswithorwithoutanymodifications,thefollowingresolutions:
5. ORDINARY RESOLUTION –CONTINUE IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTORS
(i) “THATapprovalbeandisherebygiventoEn.WIsmailBinWNikwhohasservedasIndependentNon-ExecutiveDirectorforacumulativetermofmorethantwelveyears,tocontinuetoserveasanIndependentNon-ExecutiveDirectoroftheCompany.”
Resolution 9
(ii) SubjecttotheapprovalofResolution5above,“THATapprovalbeandisherebygiventoMr.ChewHockLinwhohasservedas IndependentNon-ExecutiveDirector foracumulative termofmore than twelveyears, tocontinue toserveasan IndependentNon-ExecutiveDirectoroftheCompany.”
Resolution 10
(iii) SubjecttotheapprovalofResolution6above,“THATapprovalbeandisherebygiventoDato’IsmailBinHamzahwhohasservedasIndependentNon-ExecutiveDirectorforacumulativetermofmorethantwelveyears,tocontinuetoserveasanIndependentNon-ExecutiveDirectoroftheCompany.”
Resolution 11
(iv) SubjecttotheapprovalofResolution7above,“THATapprovalbeandisherebygiventoDato’LaiChangHunwhohasservedas IndependentNon-ExecutiveDirector foracumulativetermofmorethantwelveyears,tocontinuetoserveasanIndependentNon-ExecutiveDirectoroftheCompany.”
Resolution 12
GUH Holdings BerhadAnnual Report 2019 127
NOTICEOFANNUALGENERALMEETING
6. ORDINARY RESOLUTION –AUTHORITY TO ISSUE SHARES PURSUANT TO SECTIONS 75 AND 76 OF THE COMPANIES ACT 2016
Resolution 13
“THATpursuant toSections75and76of theCompaniesAct2016, theDirectorsbeandareherebyauthorizedtoissuesharesintheCompanyatanytimeuntil theconclusionofthenextAGManduponsuchtermsandconditionsandforsuchpurposesastheDirectorsmayintheirabsolutediscretiondeemfit,providedthattheaggregatenumberofsharestobeissued,pursuanttothisresolutiondoesnotexceed20%ofthetotalnumberof issuedsharesoftheCompany(excludingtreasuryshares),uponandsubjecttothemandategivenby Bursa Malaysia Securities Berhad under paragraph 6.03 of the Main Market ListingRequirements,definedinthedirective/clarificationdated16April2020andthattheDirectorsbeandarealsoempoweredtoobtaintheapprovalfromBursaMalaysiaSecuritiesBerhadforthelistingandquotationoftheadditionalsharessoissued,subjectalwaystotheapprovalofallrelevantregulatorybodiesbeingobtainedforsuchissues.”
7. ORDINARY RESOLUTION –PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY
Resolution 14
“THAT subject to the Company’s compliance with all applicable rules, regulations andordersmadepursuanttotheCompaniesAct2016(“Act”),theprovisionsoftheCompany’sConstitutionandtheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“ListingRequirements”) and the approval of all other relevant authorities, theCompanybeand isherebyauthorized toutilizeanamountnotexceeding the total retainedprofitsoftheCompanytopurchasesuchamountofordinarysharesintheCompanyasmaybedeterminedbytheDirectorsoftheCompanyfromtimetotimeuponsuchtermsandconditionsastheDirectorsmaydeemfitandexpedientintheinterestoftheCompanyprovidedthattheaggregatenumberofsharestobepurchasedpursuanttothisresolutiondoesnotexceed10%of the totalnumberof issuedsharesof theCompanyasquotedonBursaMalaysiaSecuritiesBerhadatanygivenpointintime(“ProposedShareBuy-Back”).
ANDTHAT theDirectorsof theCompanybeandareherebyauthorized todealwith theshares sopurchasedby theCompanypursuant to theProposedShareBuy-Back in thefollowingmanner:
(i) toretainthesharesastreasuryshares;and/or(ii) tocanceltheshares;and/or(iii) toreselltheshares;and/or(iv) todistributeassharedividends;and/or(v) totransferthesharesforthepurposesofanemployees’sharesscheme;and/or(vi) totransferthesharesaspurchaseconsideration;and/or(vii) anycombinationoftheabove;and/or
inanyothermannerasprescribedbytheAct,ListingRequirementsand/oranyotherrelevantauthorityforthetimebeinginforce;
ANDTHATsuchauthority for theProposedShareBuy-Backconferredby this resolutionshallcommenceuponthepassingofthisresolutionandshallcontinuetobeinforceuntil:
(a) theconclusionofthenextAGMoftheCompanyfollowingthisAGM,atwhichtimethesaidauthorityshalllapse,unlessbyanordinaryresolutionpassedatthatmeeting,theauthorityisrenewed,eitherunconditionallyorsubjecttoconditions;or
(b) theexpirationoftheperiodwithinwhichthenextAGMoftheCompanyisrequiredbylawtobeheld;or
GUH Holdings BerhadAnnual Report 2019128
(c) revokedorvariedbyresolutionpassedbytheshareholdersoftheCompanyinageneralmeeting,
whicheveroccursfirst;
ANDTHAT,theDirectorsoftheCompanyoranyofthembeandareherebyauthorizedtotakeallsuchstepsasarenecessaryorexpedienttoimplement,finalizeandtogivefulleffecttotheProposedShareBuy-Backwithfullpowerstoassenttoanyconditions,modifications,variations,and/oramendmentsasmayberequiredorimposedbytherelevantauthoritiesandtodoallsuchactsandthings(includingexecutingalldocuments)astheDirectorsmaydeemfitandexpedientinthebestinterestoftheCompany.”
8. ORDINARY RESOLUTION –PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
Resolution 15
“THATsubjectalwaystotheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhadandallotherapplicablelaws,approvalbeandisherebygiventotheCompanyand/oritssubsidiariestoenterintotherecurrentrelatedpartytransactionsofarevenueortradingnaturewiththerelatedparties,whicharenecessaryfortheday-to-dayoperations, intheordinarycourseofbusiness,madeatarm’slengthbasisandonnormalcommercialtermswhicharenotmore favourable to therelatedparties than thosenormallyavailable to thepublicandarenottothedetrimentoftheminorityshareholders,detailsaresetoutinPartBoftheCirculartoShareholdersdated29May2020;ANDTHATtheauthorityconferredbythismandateshallcommenceimmediatelyuponthepassingofthisresolutionandissubjecttoannualrenewal.Inthisrespecttheauthorityshallonlycontinuetobeinforceuntil:
(i) theconclusionofthenextAGMoftheCompanyatwhichtimetheauthoritywilllapse,unlesstheauthorityisrenewedbyaresolutionpassedatthatAGM;
(ii) theexpirationoftheperiodwithinwhichthenextAGMisrequiredtobeheldpursuanttoSection340(2)oftheCompaniesAct2016(butnotextendingtosuchextensionsasmaybeallowedpursuanttoSection340(4)oftheCompaniesAct2016);or
(iii) revokedorvariedbyresolutionpassedbytheshareholdersoftheCompanyinageneralmeeting,
whicheverisearlier.
ANDTHATauthoritybeandisherebygiventotheDirectorsoftheCompanytocompleteanddoallsuchactsandthings(includingexecutingsuchdocumentsasmayberequired)astheymayconsiderexpedientornecessarytogiveeffecttothetransactioncontemplatedand/orauthorizedbythisOrdinaryResolution.”
9. TotransactanyotherbusinessoftheCompanyforwhichduenoticeshallhavebeengiven.
ByOrderoftheBoard,
Datuk Seri Kenneth H’ng Bak Tee(LS0008988)(SSMPCNo.:201908001173)Kee Gim Tee(MAICSA7014866)(SSMPCNo.:201908002255)
CompanySecretariesPenangDatedthis29May2020
NOTICEOFANNUALGENERALMEETING
GUH Holdings BerhadAnnual Report 2019 129
Notes:
1. InlightoftheCOVID-19pandemicandinconsiderationoftheshareholders’healthandsafety,themeetingwillbeconductedfullyvirtuallyandbroadcastedfromtheregisteredofficeoftheCompany.
2. AmemberoftheCompanyentitledtoattendandvoteatthismeeting,shallbeentitledtoappointanypersonashisproxy.Aproxyneednotalsobeamember.Amemberwhoappointsmorethan1proxymustspecifytheproportionofhisholdingstoberepresentedbyeachproxy.
3. Amembershallnotbeentitledtoappointmorethan2proxiestoattendandvoteatthismeeting.WhereamemberisanExemptAuthorizedNomineewhichholdsordinaryshares intheCompanyformultiplebeneficialowners inonesecuritiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxieswhichtheExemptAuthorisedNomineemayappointinrespectofeachomnibusaccountitholds.
4. Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointororhisattorneydulyauthorizedinwritingor, if theappointor isacorporation,eitherundersealorunder thehandofanofficerorattorneydulyauthorized.
5. Theinstrumentappointingaproxyandthepowerofattorneyorotherauthority,ifany,underwhichitissignedoranotariallycertifiedcopyofthatpowerorauthorityshallbedepositedattheRegisteredOfficeatPartofPlot1240&1241,BayanLepasFreeIndustrialZone,Phase3,BayanLepas,11900Penangnotlessthan48hoursbeforethetimeappointedforholdingthemeeting.Forshareholders’onlineregistrations,kindlyrefertotheannexureoftheAdministrativeNotespublishedontheCompany’swebsiteandannouncement.
6. PursuanttoParagraph8.29(1)oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad,allresolutionswillbeputtovotebywayofpoll.OnlyaDepositorwhosenameisregisteredintheRecordofDepositorsasat22June2020shallberegardedasmembertoattend,speakandvoteatthismeeting.
7. Toattendandvoteonanyoralloftheresolutionsatthismeeting,youmayparticipateviaremoteparticipationandelectronicvotingfacilitiesinaccordancewiththeproceduresassetoutintheAdministrativeNotes,whichismadeavailable at theCompany’swebsite at http://www.guh.com.my, or send in your votes in advance by appointingtheChairmanoftheMeetingasyourproxy.IfyouhaveanyquestionsinrelationtoanyitemoftheAgendaoftheMeeting,youmaysendtheminviarealtimesubmissionoftypedtextsduringtheMeetinginaccordancewiththeproceduresassetoutintheAdministrativeNotes.
Explanatory Notes:
Audited Financial Statements for the financial year ended 31 December 2019
ThisAudited Financial Statements are laid in accordance with Section 340(1)(a) of the CompaniesAct 2016 fordiscussiononlyunderAgenda1.Shareholders’approvalisnotrequired.Hence,thisAgendaitemwillnotbeputforwardforvoting.
Resolution 1 - Payment of Directors’ fees and benefits in respect of the current year 2020 until the next AGM
PursuanttoSection230(1)oftheCompaniesAct,2016,feesandbenefitspayabletotheDirectorsofalistedcompanyanditssubsidiariesshallbeapprovedbytheshareholdersatageneralmeeting.Inthisrespect,theBoardagreedwiththerecommendationfromtheRemunerationCommitteethatshareholders’approvalshallbesoughtattheCompany’s56thAGMforthepaymentofDirectors’feesandbenefitsinrespectofthecurrentyear2020uptillthenextAGMoftheCompanytobeheldin2021.
ThepaymentoffixedfeestotheDirectorsistocommensurateandcompensatethemfortheirtimeandeffortonanon-goingbasisfortheirservicetotheCompany.
ThefulldetailsoftheDirectors’feesandotherbenefitspaidduringthefinancialyearended31December2019aredisclosedinNote28tothefinancialstatementsonpage112oftheCompany’sAnnualReport2019.
Resolution 2, 3, 4, 5, 6 & 7 – Re-election of retiring Directors
Article95oftheCompany’sConstitution–AnelectionofDirectorsshalltakeplaceeachyear.AllDirectorsshallretirefromofficeonceatleastineachthree(3)years.AretiringDirectorshallbeeligibleforre-election.TheretiringDirectors,TanSriDato’SeriH’ngBokSan,DatukSeriKennethH’ngBakTee,Dato’HarryH’ngBakSeah,Mr.ChewHockLin,Dato’IsmailBinHamzahandDato’LaiChangHunbeingeligible,haveofferedthemselvesforre-election.
Resolution 8 – Re-appointment of Auditors
Pursuant toSection 273(b) of theCompaniesAct 2016, the termof office of the presentAuditors,Messrs.CroweMalaysiaPLT,shalllapseattheconclusionofthisAGMunlesstheyarere-appointedbytheshareholderstocontinue
NOTICEOFANNUALGENERALMEETING
GUH Holdings BerhadAnnual Report 2019130
inoffice. CroweMalaysiaPLThave indicated theirwillingness tobere-appointedasAuditors for thefinancialyearending31December2020.TheProposedResolution8,ifpassed,willalsogivetheDirectors,authoritytodeterminetheremunerationoftheAuditors.
Resolution 9, 10, 11 & 12 – Continuing in office as Independent Non-Executive Directors
TheproposedResolution9,10,11and12aretoenableEn.WIsmailBinWNik,Mr.ChewHockLin,Dato’IsmailBinHamzahandDato’LaiChangHun,tocontinueservingasIndependentDirectorsoftheCompany.
TheBoardofDirectorshadviatheNominationCommitteeconductedtheannualperformanceevaluationandassessmentof independenceof theDirectors.The justificationsof theBoardofDirectors for recommendingandsupporting theresolutionsfortheircontinuinginofficeasIndependentDirectorsaresetoutbelow:
Justifications:
(a)FulfilsthecriteriaofanIndependentDirectorpursuanttotheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad;
(b)ProvidetheBoardwithdiversesetofexperience,skillsandexpertiseintherelevantfield/businessindustry;
(c)Sufficienttimeandattentiontotheirprofessionalobligationsforinformedandbalanceddecisionmaking;and
(d)AbletobringindependentandobjectivejudgmenttotheBoarddeliberationsandtheirpositionintheBoardhasnotbeencompromisedbytheirfamiliarityandlongrelationshipwithotherBoardmembers.
The Board will seek shareholders’ approval through a two-tier voting process in line with recommendation of theMalaysianCodeonCorporateGovernance.
Resolution 13 – Authority to issue shares pursuant to Sections 75 and 76 of the Companies Act 2016
TheproposedResolution13isarenewalofthegeneralauthoritygiventotheDirectorsoftheCompanytoallotandissuesharesasapprovedbytheshareholdersatthe55thAGMheldon23May2019.AsatthedateofthisNotice,theCompanyhasnotissuedanynewsharesandtheauthoritywilllapseattheconclusionofthe56thAGMtobeheldon30June2020.
TheproposedResolution13,ifpassed,willgiveauthoritytotheDirectorsoftheCompanytoissueandallotsharesuptoandnotexceeding20%ofthetotalnumberofissuedsharesoftheCompany(excludingtreasuryshares)whichisdefinedunderthegeneralmandatelimitgivenbyBursaMalaysiaSecuritiesBerhadinthedirective/clarificationdated16April2020aspartofthereliefmeasurestoaidandfacilitatelistedissuersinsustainingtheirbusinessoreasingtheircompliancewiththerules,amidtheunprecedenteduncertaintysurroundingtherecoveryoftheCOVID-19outbreakandimplementationofMovementControlOrder.Inthemeantime,theCompanywillbeabletoraisefundbyhavinggeneralmandatefromtheshareholderstoauthorizetheDirectorstoissueandallotshareswithoutconveningageneralmeetinginthenearfuturewhichwillbebothtimeandcostconsuming,ifneedsarise.
TheBoardofDirectorsof theCompany isof theview that the increased ingeneralmandate limit fornew issueofsecuritiesupto20%isinthebestinterestoftheCompanyanditsshareholdersduetotheimpactoftheCOVID-19outbreakhassignificantlydisruptedtheGroup’sbusinessactivitiesanditisexpectedtohaveanegativeimpactontheGroup’sperformanceforthenearfutureastheoutbreakcontinuestoprogressandtheconditionsareunpredictable.Therefore,thisauthoritywillhelpandeasetheCompanywithadditionalfundraisingflexibilitytomeetthefundraisingactivities,includingbutnotlimitedtofurtherplacingupshares,forpurposeoffundingfutureinvestments,acquisition,workingcapitalandoperationalexpenditure,expeditiouslyandefficiently.
Resolution 14 – Proposed renewal of Share Buy-Back authority
TheproposedResolution14, if passed,wouldempower theDirectorsof theCompany topurchase itsownsharesthroughBursaMalaysiaSecuritiesBerhadupto10%ofthetotalnumberof issuedsharesoftheCompany.FurtherinformationissetoutinPartAoftheShareBuy-BackStatementdated29May2020.
Resolution 15 – Proposed renewal of shareholders’ mandate for recurrent related party transactions of a revenue or trading nature
TheproposedResolution15, ifpassed,wouldallow theCompanyand/or itssubsidiariesandrelatedcompanies toenterintotherecurrentrelatedpartytransactionsofarevenueortradingnaturewhicharenecessaryfortheday-to-dayoperationswiththerelatedparties.
Thisauthority,unlessrevokedorvariedbytheCompanyingeneralmeeting,willexpireattheconclusionofthenextAGM,ortheexpirationoftheperiodwithinwhichthenextAGMisrequiredbylawtobeheld,orrevokedorvariedbyanordinaryresolutionpassedbytheshareholdersoftheCompanyingeneralmeeting,whichever isearlier.FurtherinformationissetoutinPartBoftheCirculartoShareholdersdated29May2020.
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GUH Holdings BerhadAnnual Report 2019 131
STATEMENTACCOMPANYINGNOTICEOFANNUALGENERALMEETING(PursuanttoParagraph8.27(2)oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad)
1. DetailsofindividualswhoarestandingforelectionasDirectors(excludingDirectorsstandingforre-election)
No individual is seeking election as Director at the forthcoming 56th Annual General Meeting (AGM) of theCompany.
2. GeneralmandateforissueofsecuritiesinaccordancewithParagraph6.03(3)oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad.
ThedetailsoftheproposedauthorityforDirectorstoissuesharesintheCompanypursuanttoSections75and76oftheCompaniesAct2016aresetoutintheExplanatoryNoteofResolution13oftheNoticeofAGM.
GUH Holdings BerhadAnnual Report 2019132
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GUH Holdings BerhadAnnual Report 2019 133
PROXY FORMGUH HOLDINGS BERHAD
Please indicate with an “X” as to how you wish to cast your vote. If no instruction as to voting is given, the proxy will vote or abstain from voting at his discretion.
Ordinary Business For Against
ToapprovethepaymentofDirectors’ feesandbenefitsup toRM1,100,000witheffectfrom1January2020untilthenextAGMoftheCompany Resolution1
Tore-electTanSriDato’SeriH’ngBokSanwhoisretiringpursuanttoArticle95oftheCompany’sConstitution Resolution2
Tore-electDatukSeriKennethH’ngBakTeewhoisretiringpursuanttoArticle95oftheCompany’sConstitution Resolution3
Tore-electDato’HarryH’ngBakSeahwhoisretiringpursuanttoArticle95oftheCompany’sConstitution Resolution4
Tore-electMr.ChewHockLinwhoisretiringpursuanttoArticle95oftheCompany’sConstitution Resolution5
Tore-electDato’IsmailBinHamzahwhoisretiringpursuanttoArticle95oftheCompany’sConstitution Resolution6
Tore-electDato’LaiChangHunwhoisretiringpursuanttoArticle95oftheCompany’sConstitution Resolution7
Tore-appointMessrs.CroweMalaysiaPLTasAuditorsoftheCompanyandtoauthorizetheDirectorstofixtheirremuneration Resolution8
Special Business For Against
ToapproveEn.W IsmailBinWNik tocontinue inofficeasIndependentNon-ExecutiveDirector Resolution9
ToapproveMr.ChewHockLintocontinueinofficeasIndependentNon-ExecutiveDirector Resolution10
ToapproveDato’ IsmailBinHamzah tocontinue inofficeasIndependentNon-ExecutiveDirector Resolution11
ToapproveDato’LaiChangHuntocontinueinofficeasIndependentNon-ExecutiveDirector Resolution12
AuthoritytoissuesharespursuanttoSections75and76oftheCompaniesAct2016 Resolution13
ProposedrenewalofShareBuy-BackAuthority Resolution14
Proposedrenewalofshareholders’mandateforrecurrentrelatedpartytransactionsofarevenueortradingnature Resolution15
.........................................................SignatureofMember/CommonSeal
Datedthis.................... dayof..............................,20............
No.ofSharesHeldCDSAccountNo.
orfailinghim,theChairmanoftheMeetingasmy/ourproxy(ies)tovoteforme/usandonmy/ourbehalfatthe56thAnnualGeneralMeeting(“AGM”)oftheCompanytobeheldattheAuditoriumoftheCompanyat2ndFloor,Plot1240&1241BayanLepasFreeIndustrialZone,Phase3,BayanLepas,11900PenangviaremoteparticipationandelectronicvotingfacilitiesonTuesday,30June2020at10:30a.m.andatanyadjournmentthereof.
Shareholder Proxy1 Proxy2NameNRICNo.PhoneNo.EmailAddress
%
GUH Holdings BerhadAnnual Report 2019134
Affixstamphere
TheCompanySecretary
GUH HOLDINGS BERHADPartofPlot1240&1241,
BayanLepasFreeIndustrialZone,Phase3,BayanLepas,
11900Penang,Malaysia
1stfoldhere
2ndfoldhere
Foldthisflagsealing
Notes:
1. InlightoftheCOVID-19pandemicandinconsiderationoftheshareholders’healthandsafety,themeetingwillbeconductedfullyvirtuallyandbroadcastedfromtheregisteredofficeoftheCompany.
2. AmemberoftheCompanyentitledtoattendandvoteatthismeeting,shallbeentitledtoappointanypersonashisproxy.Aproxyneednotalsobeamember.Amemberwhoappointsmorethan1proxymustspecifytheproportionofhisholdingstoberepresentedbyeachproxy.
3. Amembershallnotbeentitledtoappointmorethan2proxiestoattendandvoteatthismeeting.WhereamemberisanExemptAuthorizedNomineewhichholdsordinarysharesintheCompanyformultiplebeneficialownersinonesecuritiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxieswhichtheExemptAuthorisedNomineemayappointinrespectofeachomnibusaccountitholds.
4. Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointororhisattorneydulyauthorizedinwritingor,iftheappointorisacorporation,eitherundersealorunderthehandofanofficerorattorneydulyauthorized.
5. The instrument appointing a proxy and the power of attorney or other authority, if any, underwhich it is signed or a notariallycertifiedcopyofthatpowerorauthorityshallbedepositedattheRegisteredOfficeatPartofPlot1240&1241,BayanLepasFreeIndustrialZone,Phase3,BayanLepas,11900Penangnotlessthan48hoursbeforethetimeappointedforholdingthemeeting.Forshareholders’onlineregistrations,kindlyrefertotheannexureoftheAdministrativeNotespublishedontheCompany’swebsiteandannouncement.
6. PursuanttoParagraph8.29(1)oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad,allresolutionswillbeputtovotebywayofpoll.OnlyaDepositorwhosenameisregisteredintheRecordofDepositorsasat22June2020shallberegardedasmembertoattend,speakandvoteatthismeeting.
7. Toattendandvoteonanyoralloftheresolutionsatthismeeting,youmayparticipateviaremoteparticipationandelectronicvotingfacilitiesinaccordancewiththeproceduresassetoutintheAdministrativeNotes,whichismadeavailableattheCompany’swebsiteathttp://www.guh.com.my,orsendinyourvotesinadvancebyappointingtheChairmanoftheMeetingasyourproxy.IfyouhaveanyquestionsinrelationtoanyitemoftheAgendaoftheMeeting,youmaysendtheminviarealtimesubmissionoftypedtextsduringtheMeetinginaccordancewiththeproceduresassetoutintheAdministrativeNotes.
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GUH Holdings BerhadAnnual Report 2019136
website: www.guh.com.my