Post on 12-Nov-2021
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T7 Global berhad[RegistRation no. 200401023809 (662315-U)]
annual reporT
2020T7 Global berhadRegistRation no. 200401023809 (662315-U)
Making a difference
C-16-01, Level 16, KL Trillion Corporate Tower, Block C338, Jalan Tun Razak, 50400,Kuala Lumpur, Malaysia
Tel : +603 2785 7777Fax : +603 2785 7778Email : t7global@t7global.com.myWebsite : www.t7global.com.my
Who We Are, Vision, Mission & Philosophy .................. 001
Corporate Information ................. 002
Group Corporate Structure ......... 003
What We Do ............................... 004
Five Years Financial Calendar and Highlights ............................ 006
Chairman’s Statement ................ 007
Management Discussion and Analysis’ Statement .................... 009
Directors’ Profile ......................... 013
Key Senior Management Profile .................... 017
Sustainability Statement ............. 020
Audit and Risk Management Committee Report ...................... 026
Statement on Risk Management and Internal Control .................... 028
Corporate Governance Overview Statement .................... 032
Statement on Directors’ Responsibility for Preparing the Financial Statements .................. 046
Additional Compliance Information .................................. 047
Financial Statements ................... 052
Notice of Annual General Meeting .............. 176
Administrative Details for the Annual General Meeting ........ 184
Analysis of Shareholdings ........... 189
List of Properties ......................... 193
Form of Proxy
Table of ContentS
001
AR 2020
www.t7global.com.my
Who We Are
T7 Global Berhad (known as “T7 Global” or “The Group”) is a public listed company listed on the Main
Market of Bursa Malaysia Securities Berhad since 2005. The company has its roots in the oil and gas business
since 1990 and is well known as an integrated oil and gas solutions provider. The Group’s experience in complex
projects and innovative solutions proved to be invaluable in the increasingly challenging landscape.
With decades of industry experience, this allows the Group to expand its footprint into the international
markets and T7 Global has grown to become a trusted brand. The Group continues to expand business expertise
and diversity into different portfolio such as aerospace and construction through strategic acquisitions and
smart partnerships.
T7 Global focuses on making a difference in the industries we serve. As a leading solutions provider in Asia, we offer
support to industry and organisations around the world.
Mission &PhilosoPhy
To support the different industries we serve by
becoming the preferred integrated solutions
provider through continuous innovation,
smart partnerships and value creation.
Vision
To be a trusted partner which make a difference
on the global stage.
002
t7 GlobAl berhAd RegisTRaTion no. 200401023809 (662315-U)
CoRPoRaTeInformAtIon
COMPANY SECRETARIES
Chua Siew Chuan(MAICSA 0777689) (SSM PC NO. 201908002648)
Tan Loo Ee(MAICSA 7063694) (SSM PC NO. 201908002686)
REGISTERED OFFICE
Level 7, Menara Milenium Jalan Damanlela Pusat Bandar Damansara Damansara Heights 50490 Kuala Lumpur Wilayah Persekutuan, Malaysia
Tel : 03-2084 9000 Fax : 03-2094 9940
HEAD/MANAGEMENT OFFICE
C-16-01, Level 16, KL Trillion Corporate Tower, 338 Jalan Tun Razak 50400 Kuala Lumpur Wilayah Persekutuan, Malaysia
Tel : 03-2785 7777 Fax : 03-2785 7778
AUDITORS/REPORTING ACCOUNTANTS
Grant Thornton Malaysia PLT (Audit Firm No.: 201906003682 & AF: 0737)
Level 11, Sheraton Imperial Court Jalan Sultan Ismail 50250 Kuala Lumpur Wilayah Persekutuan, Malaysia
Tel : 03-2692 4022 Fax : 03-2732 1010
PRINCIPAL BANKERS
Malayan Banking BerhadNo. 2 Wisma Prima Peninsular Jalan Setiawangsa II Taman Setiawangsa 54200 Kuala Lumpur Wilayah Persekutuan, Malaysia
United Overseas Bank (Malaysia) BerhadLevel 7, Menara UOB Jalan Raja Laut, 50350 Kuala Lumpur Wilayah Persekutuan, Malaysia
CIMB Bank BerhadPetronas Twin Tower 405, Persiaran Petronas50088 Kuala LumpurWilayah Persekutuan, Malaysia
Al Rajhi Banking & Investment Corporation (Malaysia) BerhadGF, Mezzanine & Basement, East BlockWisma Golden Eagle Realty 142-C Jalan Ampang,50450 Kuala LumpurWilayah Persekutuan, Malaysia
REGISTRAR
Tricor Investor & Issuing House Services Sdn BhdUnit 32-01, Level 32, Tower A Vertical Business Suite, Avenue 3 Bangsar South, No. 8, Jalan Kerinchi 59200 Kuala Lumpur Wilayah Persekutuan, Malaysia
Tel : 03-2783 9299 Fax : 03-2783 9222 Email : is.enquiry@my.tricorglobal.com Website : www.tricorglobal.com
STOCK EXCHANGE LISTING
Main Market of Bursa Malaysia Securities Berhad
STOCK INFORMATION
Stock Name : T7GLOBAL Stock Code : 7228 Bloomberg Code : T7G MK
1. Datuk Seri Dr. Nik Norzrul Thani Bin Nik Hassan Thani
2. Tan Sri Datuk Seri Tan Kean Soon, J.P.
3. Tan Sam Eng
4. Tan Kay Vin
5. Admiral Tan Sri Dato’ Seri Panglima Ahmad Kamarulzaman Bin Hj Ahmad Badaruddin (R)
6. CP (R) Dato’ Sri Wan Ahmad Najmuddin Bin Mohd
7. Tan Sri Dato’ Sri Koh Kin Lip, J.P. (Appointed on 2 September 2020)
8. Mohd Noor Bin Setapa (Resigned on 30 June 2020)
BOARD OF DIRECTORS
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gRoUP CoRPoRaTe StruCture
UNIVERSAL GAS GENERATORS SDN BHD199601038686 (411039-P)
100%
T7 GENERATIONS SDN BHD201801036414 (1298444-A)
92.5%
T7 KILGOUR SDN BHD201701016010 (1230174-D)
60%
T7 WENMAX SDN BHD199901022900 (497800-T)
100%
TCM INNOVATIONS SDN BHD201801044312 (1306344-U)
100%
T7 VECTOR SDN BHD201901037487 (1346817-P)
100%
TANJUNG OFFSHORE SERVICES SDN BHD198301005074 (100697-T)
100%
T7 GASTEC SDN BHD199401023619 (309300-K)
100%
T7 CSI INTEGRATED SDN BHD200601032298 (752057-X)
100%
T7 SOLUTIONS SDN BHD200901006153 (849109-H)
100%
T7 MARINE SDN BHD200601032072 (751831-T)
100%
T7 KEMUNCAK SDN BHD201601031638 (1202579-U)
70%
T7 RESOURCES SDN BHD201301012317 (1042155-V)
100%
T7 SERVICES AUSTRALIA PTY LTD(621094086)
100%
T7 PROPERTY SDN BHD201601027073 (1198012-T)
100%
T7 AERO SDN BHD201601028474 (1199413-D)
100%
T7 SOLUTIONS SERVICES (Thailand) Co., Ltd.(0105551009806)
45%
T7 SUBSEA SDN BHD201801028378 (1290404-K)
55%
T7 CHINA CONSTRUCTION THIRDENGINEERING SDN BHD201801001827 (1263840-D)
51%
T7 SERVICES SDN BHD199101016724 (227036-V)
100%
T7 NEWENERGY SDN BHD199701006449 (421945-H)
100%
T7 INTELLIGENT RESOURCES SDN BHD (formerly known as Fircroft Tanjung Sdn Bhd)201401027200 (1103286-X)
100%
AGENSI PEKERJAAN T7 INTELLIGENT RESOURCES SDN BHD (formerly known as Agensi Pekerjaan T7 Fircroft Sdn Bhd)202001025154 (1381474-T)
100%
T7 SOLUTIONS SERVICES (S) PTE LTD(201012762N)
100%
004
t7 GlobAl berhAd RegisTRaTion no. 200401023809 (662315-U)
WhaT We do
T7 Global Berhad (“T7 Global”) is an investment holding company with its subsidiaries diversified into 3 sectors as follows:-
ENERGY• Engineering,Procurement,
Construction, Installation & Commissioning (EPCIC)
• Operation&Maintenance
• ProfessionalManpowerSupply
• Engineering&IntegratedSolutions
• SubseaServices
• WellsandDecommissioning
• SpecialPurposeMarket
AEROSPACE & DEFENCE• MetalSurfaceTreatment
■ Surface Treatment
■ Non-Destructive Testing (NDT)
■ Chemical Processing
■ Painting and Marking
■ Sub-Assembly
• MarineServices,NavalandSecurity Technology
CONSTRUCTION• EngineeringandConstruction
• InfrastructureConstruction
• IndustrialFacilityConstruction
ENERGYT7 Global’s Energy Division (“T7 Energy”) offers turnkey engineering, procurement, construction, installation and commissioning (EPCIC) solution, maintenance, construction and modification services (MCM), oil & gas well services, subsea services and engineered process equipment across the energy value chain.
T7 Energy has in-house capability to design and engineer solutions which are applicable to various industries.
Detailed description for Energy Segment:-
Engineering, Procurement, Construction, Installation and Commissioning (EPCIC)
T7 Energy provides turnkey EPCIC and project management solutions for complex greenfield and brownfield projects.
Notably, T7 Energy Specialises in EPCIC of Floating and Mobile Offshore Facility (MOPU and FPSO). This plug and play solution enable the commercial viability of hard to reach fields. T7 Energy has track record in developing and operating mobile asset of various functions such as early production system, production enhancement system via water injection and gas compression.
Operation and Maintenance
In brownfield segment, T7 Energy offers reliable asset management solutions to align with client’s operating philosophy. The objective is to help the client to achieve an optimal operating efficiency along with reduction in operating downtime and to maintain a safe environment.
Our main activities consist of maintenance, construction and modification (MCM), offshore splash zone maintenance, and brownfield commissioning.
T7 Energy recognises the need for brownfield rejuvenation as many offshore and onshore assets are maturing in the region. T7 Energy believes an integrated approach to facility maintenance is crucial to ensure good production uptime.
Professional Manpower Supply
T7 Intelligent Resources Sdn Bhd (formerly known as Fircroft Tanjung Sdn. Bhd.) provides a full suite of skilled recruitment and manpower services to a variety of industries, upstream and downstream oil & gas, ICT, renewable energy, rail and infrastructure.
Since inception we have specialised in providing technical resources to our customers for projects or campaigns. Additionally, we possess a strong track record in senior corporate hiring with a number of customers returning to use our services time and again.
In our business it’s the people that make the difference. Our focus is to identify, attract and onboard the very best people for our customers and to provide the highest level of service.
Engineering and Integrated Solutions
T7 Energy offers a wide range of specialist products solutions across the oil and gas, oleo-chemical, marine, petrochemical and general industries. Exclusive partnerships with reputable technology companies enable T7 Energy to leverage on the knowledge and expertise to provide high-value engineering integrated solutions to the customers: -
• On-Site Gas Generation Package (available on BOT and BOO basis)
• WaterInjectionModule (available on BOT and BOO basis)
• Automation,ICSS,SISandFGSSolution
• IntegratedMeteringSolution
• LifecyleServices
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WHAT WE DO
(CONT’D)
In addition, T7 Energy offers wide range of engineered products comprising:-
• GasProcessingTechnology
• Rotatingequipment(API compressors and pumps)
• FieldInstrument,Gauges,Valvesand Fittings
• FlowMeasurementEquipment
• PipingValves(SBB,DBBandDIB)and Subsea Valves
• MarineHoses,specialpipingandfitting (Inclusive of flexible composite pipe)
• ControlandAutomationEquipment
Subsea Services
Our subsea segment provides surface to sub surface underwater solutions that includes marine, diving and remotely operated vehicle (ROVs) with the range of services covering, inspection, maintenance and repair (IMR), installation and construction support, transportation and installation support and decommissioning support.
Wells and Decommissioning
T7 Energy has the right assets and expertise to execute integrated workover services for production enhancement and well abandonment. T7 Energy collaborates with well service companies to execute complex projects in a cost-effective manner, while ensuring the optimisation of well performance.
We offer an Integrated Decommissioning Solution across the decommissioning value chain from concept studies, engineering to project execution.
With two decades of industry experience, T7 Energy has the capability and resources to decommission offshore structures up to 10,000 MT and to execute simultaneous well intervention activities.
Special Purpose Market
As a growing company, it is vital for T7 Energy to constantly looking for new challenge and opportunity in energy businesses. We are actively seeking opportunities in renewable energy initiative and oil and gas exploration and production ventures.
AEROSPACE & DEFENCE
In line with the Malaysia Aerospace Industry Blueprint 2030, we have established T7 Kilgour Sdn Bhd, a joint venture between T7 Global Berhad and Kilgour Aerospace Group (Kilgour) to pursue high value manufacturing business in the aerospace industry. We aim to become the preferred treatment house in Asia region providing world class services to the aerospace industry and other related industries such as semiconductor and medical.
We offer a wide range of special processes to the aerospace, semiconductor and medical industries complying to the highest standards and quality-related approvals from prime customers, the processes include the following:-
• SurfaceTreatment
• ChemicalProcessing
• PaintingandPartMarking
• Non-DestructiveTesting(NDT)
T7 Aero and T7 Marine is an integrated engineering solutions provider primarily involved in the Defence Industry. It has strategic partnerships with OEMs to cater to the requirements of armed forces. The company offers a wide range of products and solutions such as armoured vehicles, air traffic control systems, electro optical equipment, combat management systems and other naval and security technologies.
CONSTRUCTION
T7 Global”s Construction Division (“T7 Construction”) offers various general construction and infrastructure works. We are also registered under category G7 with the Construction Industry Development Board (CIDB). The direction is to work on opportunities from government and commercial consumption projects without any limitation on size and value of contracts.
T7 Construction focuses on infrastructure and building works, which entail the following:-
• Design,constructionandcompletionof railway, water infrastructure, roads, bridges and other infrastructure construction;
• Constructionofhousingsuchas high-rise residential, landed residential, hostel and etc;
• Constructionspecialisebuildingssuch as high-rise buildings, hospital, multi-purpose complex, schools, institutions, university, colleges and etc.
006
t7 GlobAl berhAd RegisTRaTion no. 200401023809 (662315-U)
fiVe yeaRs finanCial CAlendAr And hIGhlIGhtS
Financial Year(s) ended 31 December2016
RM’0002017
RM’0002018
RM’0002019
RM’0002020
RM’000
Revenue 83,048 204,495 209,789 233,488 189,407
Net Profit before Tax 5,187 9,808 7,654 8,148 7,495
Net Profit after Tax 5,063 5,662 10,562 12,508 3,079
Pre-tax Margin (%) 6.2% 4.8% 3.6% 3.5% 3.9%
Net Profit Margin (%) 6.1% 2.8% 5.0% 5.4% 1.6%
Basic Earnings Per Share (Sen) 1.14 0.49 1.69 1.68 0.81
REVENUE
(RM’000)
NET PROFIT BEFORE TAX
(RM’000)
NET PROFIT AFTER TAX
(RM’000)
SHAREHOLDERS’ FUNDS
(RM’000)
2016 2016
2016 2016
2017 2017
2017 2017
2018 2018
2018 2018
2019 2019
2019 2019
2020 2020
2020 2020
189,407 7,495
3,079 173,874
233,488 8,148
12,508 199,767
209,789 7,654
10,562 158,609
204,495 9,808
5,662 151,842
83,048 5,187
5,063 130,726
007
AR 2020
www.t7global.com.my
ChaiRMan’s StAtement
Dear Valued Shareholders, On behalf of the Board of Directors, I present to you the Annual Report and Audited Financial Statements of T7 Global Berhad (“T7 Global” or “the Group”) for the financial year ended 31 December 2020 (“FYE 2020”). {
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t7 GlobAl berhAd RegisTRaTion no. 200401023809 (662315-U)
The Malaysian economy growth registered a negative growth of 5.6% in 2020, the restrictions on mobility, especially on inter-district and inter-state travel, weighed on economic activity during the year. Nevertheless, the continued improvement in external demand provided support to growth. Consequently, except for manufacturing, all economic sectors continued to record negative growth.
In the first half of 2020, responses to the Coronavirus disease (“COVID”)-19 pandemic led to steep declines in global petroleum demand and to volatile crude oil markets. The second half of the year was characterised by relatively stable prices as demand began to recover. As petroleum demand fell and crude oil inventories increased, crude oil futures traded at negative prices in April 2020, the first time the price for the oil futures contract fell to less than zero since trading began in 1983. However, demand began to return after April 2020 with crude oil prices stabilising, closing above USD$40 at the end of 2020 as markets responded to news of several COVID-19 vaccine rollouts and the limitation on oil production from OPEC and its partners.
The National energy company Petroliam Nasional Berhad (“Petronas”) announced that industry remains challenging due to the COVID-19 pandemic and prevailing uncertainties over OPEC+ production cuts in 2021. The effects of the pandemic are difficult to estimate, while their impact cannot be overstated as the industry continues to face the dual impact of demand destruction combined with an oil price rout due to the supply glut. Therefore, Petronas believes the industry is now contending with a Great Reset. This is an undeniable and unavoidable imperative, requiring immediate reforms along the whole value chain. Collectively, as an industry, we must step up from doing business as usual and compel innovation at all levels - implementing new ways of working with focused execution at pace.
Despite the above, we are proud that we have secured contract extensions from Petronas Carigali Sdn Bhd for the provision of splash zone structural repair and maintenance and mini-remotely operated vehicle (ROV) as well as the execution of the contract for the Bayan Mobile Offshore Product Unit project.
For the financial year 2020, we are pleased to have recorded a revenue of approximately RM189 million and a profit after tax of approximately RM3 million, supported by continuing progress on our oil and gas contracts and meeting targets for the Energy Division.
The Group has strong commitment to our businesses, improving our operating efficiencies across our portfolio, turning the Company around and delivering steady growth. We took appropriate and deliberate actions to drive performance. With a fair balance of strength and resilience, prudence and sound enterprise risk management, we continue to navigate our way through challenges and intensify progression of the Group’s various businesses. It is the staunch faith and commitment that keep T7 Global going and progressing to where it is today.
CORPORATE SOCIAL RESPONSIBILITY
T7 Global recognises that contributions made through our corporate social responsibility initiatives have significant impacts on the society. The Group strives to sustain a balanced approach in fulfilling our key objectives and expectations. For the year 2020, the Group committed noteworthy time and effort in corporate social responsibility programmes in order to offer meaningful contributions to the community around us.
As a responsible corporate citizen, we firmly believe in giving back to the society such as developing the local arts and culture scene, nurturing our next generation, and supporting local communities.
APPRECIATION
On behalf of the Board, I would like to extend my deepest appreciation to the Board of Directors, our management, staff, and business associates for their staunch faith and commitment that have kept T7 Global going and progressing to where it is today.
I would also like to express my appreciation to our valued shareholders for their unwavering support. Without a doubt, thank you to my Board members, for your constant support and utmost service to the Board throughout these challenging periods. We will continue to explore new opportunities and enhance our existing businesses to deliver greater shareholders’ value in the years ahead.
Yours sincerely,Datuk Seri Dr. Nik Norzrul Thani Bin Nik Hassan ThaniActing Executive Chairman
CHAIRMAN’S STATEMENT
(CONT’D)
009
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www.t7global.com.my
ECONOMIC REVIEW
The Malaysian economy growth registered a negative growth of 5.6% in 2020, the restrictions on mobility, especially on inter-district and inter-state travel, weighed on economic activity during the year. Nevertheless, the continued improvement in external demand provided support to growth. Consequently, except for manufacturing, all economic sectors continued to record negative growth.
Despite the above, Petroliam Nasional Berhad (“Petronas”) is expecting to spend between RM40 billion and RM45 billion in annual capital expenditure over the next 5 years, based on its projection of oil prices and outlook on the industry, with a planned 55% of the annual capex allocation on domestic investments, which should augur well for the domestic oil and gas industry.
FINANCIAL PERFORMANCE
The Group delivered a modest performance for the financial year ended (“FYE”) 31 December 2020. Revenue decreased by approximately 18.9% from RM233.5 million in FYE 2019 to RM189.4 million in FYE 2020, while profit after tax decreased by approximately 75% from RM12.5 million to RM3.0 million. The decrease was mainly due to the delay in project executions caused by the COVID-19 pandemic which had affected companies and individuals worldwide. Nonetheless, the Group had managed to remain profitable due to cost rationalisation exercises conducted during the year. The management is confident in delivering a better financial performance for the year 2021 due to its resilient orderbook.
The Group’s Engineered Packages Division, which consist of gas generation packages and offshore equipment packages, registered revenue of approximately RM8.9 million in FYE 2020 as compared to RM14.6 million in FYE 2019, representing an decrease of approximately 39%. On the other hand, the Group’s Products and Services Division, registered a decrease in revenue of approximately 16.1%, from RM172.3 million in FYE 2019 to RM144.6 million in FYE 2020.
For the FYE 2020, T7 Global reported a healthy balance sheet with total assets of approximately RM481.7 million, shareholders’ equity at approximately RM173.8 million and cash reserves of approximately RM62.5 million.
ManageMenT DisCUssion And AnAlYSIS’ StAtement
We shall remain resilient through these challenging times and keeping our minds focused on our objectives and the path to recovery.
To our valued shareholders,T7 Global is a Malaysia-based leading international integrated oil and gas solutions provider with strong and growing presence over Asia serving diverse range of customers that include multinational oil majors, national oil companies as well as multinational oil corporation throughout the world. Over the years, T7 Global has grown both organically and through strategic acquisitions, alliances with local and international renowned technology partners.
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t7 GlobAl berhAd RegisTRaTion no. 200401023809 (662315-U)
BUSINESS MILESTONES
Tanjung Offshore Services Sdn Bhd (“TOS”), a wholly-owned subsidiary of T7 Global, commenced business in the 1990 as an offshore oil and gas service provider, offering solutions for production facilities, offshore supply vessels and operation and maintenance services. With 30 years of experience, TOS has served a diverse range of customers, including national oil companies, multinational corporations and engineering procurement and constructions firms.
During the FYE 31 December 2020, TOS has announced several significant contracts awarded by:-
1) Repsol Oil & Gas Malaysia Limited, for the provision of maintenance, construction and modification services for PM3-CAA and PM-305.
2) Petronas Carigali Sdn Bhd, for the provision of leasing, operating and maintenance of mobile offshore production unit (MOPU) for Bayan Redevelopment Project Gas Phase 2.
3) Carigali Hess Operating Company Sdn Bhd, for the provision of onshore fabrication, offshore hook-up and commissioning for Infill Flowlines.
4) East Coast Economic Region Development Council, for the construction and completion of Endau-Mersing Fish Processing Park in Endau, Johor Darul Takzim.
T7 Intelligent Resources Sdn Bhd (formerly known as Fircroft Tanjung Sdn Bhd) (“T7IR”), a wholly-owned subsidiary of TOS, provides full suite of skilled manpower services to a variety of industries across all stages of a project, from construction and setup, to operations and maintenance.
T7 Gastec Sdn Bhd (“T7 Gastec”), a wholly-owned subsidiary of T7 Global, is principally involved in designing, manufacturing and marketing of industrial gas packages and plant for on-site production for various industries for nearly 20 years. T7 Gastec has operations in the Asia region and offers long term “build, operate and transfer” and “build, operate and own” contracts for both industrial and oil and gas industries. T7 Gastec also provides high valued engineering integrated solution for Automation, ICSS, SIS and FGS Solution, Integrated Metering Solution and Lifecyle Services.
T7 Wenmax Sdn Bhd (“T7 Wenmax”), a wholly-owned subsidiary of T7 Global, is principally engaged in the business of supplying industrial equipment, machineries, spare parts and lubricants oil. T7 Wenmax offers a wide range of specialist products solutions across the oil and gas, oleo-chemical, marine, petrochemical and general industries ie. Gas Processing Technology, Rotating equipment (API compressors and pumps), Field Instrument, Gauges, Valves and Fittings, Flow Measurement Equipment, Piping Valves (SBB, DBB & DIB) and Subsea Valves, Marine Hoses, special piping and fitting (Inclusive of flexible composite pipe), and Control and Automation Equipment.
T7 Marine Sdn Bhd (“T7 Marine”), a wholly-owned subsidiary of T7 Global is primarily involved in supporting the business localisation and providing marine and naval technology services.
T7 Subsea Sdn Bhd (“T7 Subsea”), a subsidiary of T7 Global is primarily involved in surface to sub surface underwater solutions that includes marine, diving and remotely operated vehicle (ROVs) with the range of services covering, inspection, maintenance and repair (IMR), installation and construction support, transportation and installation support and decommissioning support.
T7 Kilgour Sdn Bhd (“T7 Kilgour”) is a subsidiary of T7 Global, a joint strategic partnership between T7 Global and Kilgour Aerospace Group (UK). T7 Kilgour is a vertically integrated aerospace company with over 50 years of in-depth technical know-how from the global aerospace industry in manufacturing complex components and assemblies. The Group’s vision is to become a key player in the aerospace industry, combining both innovative technologies coupled with our extensive experience and knowledge in the oil and gas industry to continuously provide advanced, reliable, safe and efficient solutions to our clients.
T7 Kilgour provides a wide range of processes for both the export and domestic markets. T7 Kilgour will provide various metal treatment services to clients mainly for the aerospace industry. Nevertheless, the plant is also able to serve other industries such as oil and gas, automotive, biomedical and many more.
T7 Kemuncak Sdn Bhd (“T7 Kemuncak”), is a 70% owned subsidiary of T7 Global, is principally involved in infrastructure and construction projects in Malaysia.
MANAGEMENT DISCUSSION AND ANALYSIS’ STATEMENT
(CONT’D)
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ADAPTING TO NEW NORMS AND REMAIN AGILE DURING MARKET VOLATILITY
Over the last 5 years, the Board of Directors and management team have strategised the Group’s business plans to align the corporate structure and enhance the operation’s efficiency. We have taken initiatives to refine our internal operations to deliver long term and sustainable growth. In line with these initiatives we have our vision and business development to achieve our goals.
1. Cost Reduction Program
The Group has initiated a cost reduction exercise with the aim to transform the Group into a leaner organisation; we have strictly reviewed our employee panel and their remuneration package. We have also reviewed all operating, administrative and management activities and their related cost across the Group. This is to ensure that we are able to trim our operating costs. By implementing these strategies, we should be more competitive and be able to pass these benefits to our customers and ultimately improve earnings for the Group.
2. Risk Management Team
The Group has formed a risk management team comprising independent Directors and top management personnel. Proactively addressing the challenges and opportunities of our business will ensure that every aspect of our business and/or investment opportunities brought up by any stakeholders of the Group will be carefully assessed and assuring proper due diligences are carried out professionally.
The Group’s most immediate concern was the welfare of the employees affected by the restructuring exercise which we will handle with utmost good faith and professionally. Nevertheless, the objective of the restructuring exercise is to ensure that each division will be able to operate with better efficiency, effectiveness and be profitable.
Together with the ongoing initiatives and diversification of our business model, we are confident that this restructuring and cost reduction plan will elevate T7 Global to a more competitive position as well as creating a sustainable long-term growth and value to our shareholders.
RISK MANAGEMENT AND INTERNAL CONTROL
The overall risk management objective of T7 Global is to identify potential problems before they occur so that risk handling activities may be planned and invoked as needed across our business divisions. The Group seeks to minimise potential adverse effects on its financial performance through proper risk management planning. Risk management is carried out through regular risk review analysis, internal control systems and adherence to the Group’s risk management policies. The Board of Directors of T7 Global regularly reviews these risks and approves the appropriate control environment frameworks.
Dependence on skilled professionals/engineers is one of the key risk factors. As an oil and gas services group in providing maintenance services to customers in oil and gas, we require certified, skilled, and experienced technical professionals to execute the projects and contracts awarded to our Group.
Due to supply and demand conditions and competition among other companies, the number of personnel with the relevant qualifications and experience in the industry may be limited. Our cost of operations may be higher if we are required to compete for such skilled and experience technical professionals. Nonetheless, in line with our continuous requirements for skilled-based human resources, we also provide technical training as part of our other products and services segment.
Legal risk is the risk of financial loss or damage to the Group’s reputation arising from failure to comply with contractual terms or the Group’s interest is not properly protected. The Group’s Legal Department has assessed and identified the key terms and conditions of the existing major contracts for ongoing monitoring and management of the contracts by the respective business units.
The safety of people and assets is of utmost priority in the oil and gas industry and any adverse incident could result in significant financial loss and damage to the Group. T7 Global has established comprehensive safety policies and processes that clearly set out the safety measures which must be strictly adhered to by our employees and contractors. Periodic audits of our health and safety procedures and practices, drills, continuous health and safety meetings and reviews are conducted internally and externally.
We are mindful of risks that are inherent in the business environment. Hence, our focus is to mitigate these risk factors through best practices and good corporate governance.
MANAGEMENT DISCUSSION AND ANALYSIS’ STATEMENT
(CONT’D)
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DIVIDEND
During the FYE 2020, there were no dividend declared by the Company.
BUSINESS OUTLOOK AND PROSPECTS
While the outlook for the industry shows signs of recovery in 2021, the Group is constantly mindful of all events such as micro and macro-economic factors which may impact us in any way and we will continue to strive to secure valuable opportunities on win-win terms for both the Group and our clients through entering into long term and strong charter contracts with reputable and financially sound clients.
For T7 Global, the Energy Division will remain as the Group’s core business. The Group continues to bid for new contracts and will be looking for industry opportunities where we and our strategic alliances possess the relevant expertise and experience to venture into. We will concentrate on our existing technical expertise and core businesses to secure on more maintenance and management contracts.
As at 31 December 2020, T7 Global’s order book stood at approximately RM1.7 billion, which provides a visibility of 10 years to the Group. T7 Global will continuously tender for more projects, both locally and overseas. We are optimistic that we will be able to replenish our order book and maintain the Group’s growth momentum moving into 2021 and thereafter. Barring any unforeseen circumstances, the Group expects to grow its profitability for the forthcoming financial year 2021. The Group will focus on, amongst others, the completion of the mobile offshore production unit (MOPU) for Bayan Redevelopment Project Gas Phase 2, which is expected to be operational in the second half of FYE 2022.
We have commenced our niche aerospace business in 2020, providing surface metal treatment services to serve the local and regional markets. Although the industry was hit hard by the COVID-19 pandemic in FYE 2020, the management foresees recovery in 2021 and beyond due to vaccine rollout and the aerospace industry is expected to recover moving forward. In addition, the management is currently pursuing non-aerospace customers such as semiconductor and healthcare customers, which is expected to augur well for the Group.
Whilst aware of both challenges and opportunities going forward, we welcome 2021 with a clear business strategy, staying committed towards achieving our business objectives and delivering greater value to our shareholders. We continue to align our business strategies with our sustainability plans to continue to grow the business for the long term.
APPRECIATION
As we conclude the year 2020, I would like to convey my heartfelt appreciation, to the management team and to my fellow board members for your utmost dedication to the Group through these difficult times. I sincerely express appreciation to all our employees for the dedication and commitment to the Group, all of you have played a pivotal role in the Group’s continuous growth.
On behalf of the Board, I would also like to express our gratitude to our stakeholders, clients, partners and customers for your continuous support and loyalty to our group. To our shareholders who have supported us, they have further motivated us to strive for another year of positive performance to create sustainable and growing value for all our stakeholders.
Yours sincerely,Tan Sri Datuk Seri Tan Kean Soon, J.P.Deputy Executive Chairman
MANAGEMENT DISCUSSION AND ANALYSIS’ STATEMENT
(CONT’D)
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DiReCToRs’ ProfIle
Datuk Seri Dr. Nik Norzrul Thani Bin Nik Hassan Thani (“Datuk Seri Dr. Nik”) holds a Ph.D. in Law from the School of Oriental and African Studies, University of London and a Masters in Law degree from Queen Mary College, University of London. He read law at the University of Buckingham, United Kingdom. Datuk Seri Dr. Nik also holds a Post-Graduate Diploma in Syariah Law and Practice (with Distinction) from the International Islamic University of Malaysia. He is a Barrister of Lincoln’s Inn and an Advocate and Solicitor of the High Court of Malaya. He was called to the Bar of England and Wales in 1985 and to the Malaysian Bar in 1986. He was a Visiting Fulbright Scholar, Harvard Law School from 1996 to 1997, Chevening Visiting Fellow at the Oxford Centre of Islamic Studies, Oxford University and was formerly the Acting Dean/Deputy Dean of the Faculty of Laws, International Islamic University Malaysia. He is also a Fellow of the Financial Services Institute of Australasia (FINSIA) and a member of Chartered Institute of Marketing (United Kingdom) and has also been admitted as a Practising Member of the Chartered Institute of Islamic Finance Professionals (CIIF).
Datuk Seri Dr. Nik serves in the following prominent associations/bodies/corporations:
1. Chairman of the Capital Market Compensation Fund Corporation (a corporation set up by the Securities Commission of Malaysia)
2. Chairman of IIUM Holdings Sdn Bhd (a wholly owned subsidiary of International Islamic University Malaysia)
3. Chairman of Malaysia-Singapore Business Council (MSBC) (appointed by the Minister of International Trade & Industry)
4. Independent Non-Executive Director of Amanah Saham Nasional Berhad (ASNB)
5. Independent Non-Executive Director of Malaysian Rating Corporation Berhad
6. Independent Non-Executive Director of Cagamas Holdings Berhad
7. Independent Non-Executive Director of Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad
8. Council Member of National Unity Advisory Council (appointed by the Prime Minister of Malaysia)
Datuk Seri Dr. Nik is the Chairman and Senior Partner of Zaid Ibrahim & Co. (ZICO), the largest law firm in Malaysia and a member of ZICO Law, the premier ASEAN law network with offices in Bangkok, Brunei, Hanoi, Ho Chi Minh City, Vientiane, Melbourne, Phnom Penh, Singapore, Manila and Yangon as well as an associate office in Jakarta. Prior to joining ZICO, he was practising with the international law firm, Baker & McKenzie. He was previously working with an audit firm and a bank in Kuala Lumpur.
Datuk Seri Dr. Nik was appointed to the Board of T7 Global Berhad on 23 March 2015.
Datuk Seri Dr. Nik Norzrul Thani Bin Nik Hassan Thani
NATIONALITY Malaysian
AGE 61
GENDER Male
POSITION Acting Executive Chairman
Member of Share Issuance Scheme Committee
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Tan Sri Datuk Seri Tan Kean Soon, J.P.
NATIONALITY Malaysian
AGE 57
GENDER Male
POSITION Executive Deputy Chairman
Member of Share Issuance Scheme Committee
Tan Sam Eng
NATIONALITY Malaysian
AGE 69
GENDER Female
POSITION Independent Non-Executive Director
Chairperson of Audit and Risk Management Committee
Member of Remuneration Committee
Tan Sri Datuk Seri Tan Kean Soon, J.P. (“Tan Sri Tan”) has more than 30 years of experience in leading various oil and gas upstream and downstream companies with a track record of outstanding performance in this highly competitive industry. Tan Sri Tan is the Chairman and Chief Executive Officer of CP Energy & Services Sdn Bhd, a corporation founded by Tan Sri Tan in 1992. Under Tan Sri Tan’s helm, the company grows steadily and has rapidly expanded its presence in the ASEAN region.
Tan Sri Tan also serves in the following prominent associations/bodies/corporations:-
1. Life Honorary Advisor & Treasurer of Federation of Chinese Associations Malaysia (Huazong)
2. Advisor to the Minister of Human Resources
3. Member of National Council for Occupational Safety & Health (NCOSH) / Majlis Negara bagi Keselamatan dan Kesihatan Pekerjaan (MNKKP)
4. Director of Malaysia-China Business Council (MCBC)– Chairman of MCBC Sub-Committee on “Construction &
Development”
5. Member of Malaysia Singapore Business Council (MSBC)
6. Ordinary Life Member of Malaysia Crime Prevention Foundation (MCPF)
7. Member of The Malaysian Oil & Gas Services Council (MOGSC) and Malaysian Petroleum Club
Tan Sri Tan was appointed to the Board of Directors of T7 Global Berhad on 23 June 2014 and he is the father of Tan Kay Vin, an Executive Director of T7 Global Berhad.
Tan Sam Eng is a Chartered Accountant and a Chartered Secretary. She is a member of the Malaysian Institute of Accountants (MIA), a Fellow Member of the Association of Chartered Certified Accountants (ACCA), and also a Member of the Chartered Tax Institute of Malaysia (CTIM). She has more than 30 years of professional experience which involves in all aspects of financial practice such as auditing, taxation, corporate finance and advisory works. Her auditing experience covers practically the whole spectrum of Malaysian business environment including insurance, property development, engineering, communications, transportation, plantations, manufacturing and trading.
She was appointed to the Board of T7 Global Berhad on 23 March 2015.
DIRECTORS’ PROFILE
(CONT’D)
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Tan Kay Vin
NATIONALITY Malaysian
AGE 30
GENDER Male
POSITION Executive Director
Admiral Tan Sri Dato’ Seri Panglima Ahmad Kamarulzaman Bin Hj Ahmad Badaruddin (R)
NATIONALITY Malaysian
AGE 62
GENDER Male
POSITION Independent Non-Executive Director
Chairman of Nomination Committee
Member of Audit and Risk Management Committee
Tan Kay Vin (“Kay Vin”) is currently heading the Aerospace and Defence division and the corporate affairs department of T7 Global Berhad Group. He joined T7 Global Berhad in 2015 as Manager of Group Corporate Finance and subsequently heading the Corporate Finance Department in 2017.
Kay Vin holds a Bachelor of Commerce, majors in actuarial science and finance from University of New South Wales, Sydney. Prior joining T7 Global Berhad, Kay Vin has various working experiences with financial institutions and insurance companies including Maybank Investment Berhad and Malayan Banking Berhad, Mitsui Sumitomo Insurance Group and PricewaterhouseCoopers Malaysia.
He is currently a Director of Malaysian Aerospace Industry Association.
Kay Vin was appointed to the Board of Directors of T7 Global Berhad on 5 March 2018. He is the son of Tan Sri Datuk Seri Tan Kean Soon, J.P., the Executive Deputy Chairman and the major shareholder of T7 Global Berhad.
Admiral Tan Sri Dato’ Seri Panglima Ahmad Kamarulzaman Bin Hj Ahmad Badaruddin (R) is an alumini of the Harvard Business School having attended the Advanced Management Program (AMP) in Boston. He obtained his Master in Business Administration from the University of Strathclyde Business School, Scotland and Master of Arts in International Relations from the National University of Malaysia. He also completed the Executive Business Management Program at the Kenan-Flagler Business School, University of North Carolina. He is also a Distinguished Graduate in Political Warfare of the Fu Hshing Kang College, Republic of China as well as the US Naval War College, Newport, Rhode Island, United States of America. He has served the King and Country for 42 years and has held numerous positions in the Malaysian Armed Forces. He achieved the peak in his career when he assumed command of the Royal Malaysian Navy as Chief on 18 November 2015. He is also a Director of OCR Group Berhad, TRC Synergy Berhad and few other private companies.
He was appointed to the Board of Directors of T7 Global Berhad on 15 April 2019.
DIRECTORS’ PROFILE
(CONT’D)
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CP (R) Dato’ Sri Wan Ahmad Najmuddin Bin Mohd
NATIONALITY Malaysian
AGE 63
GENDER Male
POSITION Independent Non-Executive Director
Member of Audit and Risk Management Committee
Chairman of Remuneration Committee Member of Nomination Committee
Tan Sri Dato’ Sri Koh Kin Lip, J.P.
NATIONALITY Malaysian
AGE 72
GENDER Male
POSITION Independent Non-Executive Director
CP (R) Dato’ Sri Wan Ahmad Najmuddin Bin Mohd was the Aide-De-Camp to his Royal Highness Yang Di Pertuan Agong for the period from 18 December 2006 to 1 January 2009. He also acted as the Senior Assistant Commissioner Policy and Legislation at Bukit Aman Inspector-General of Police Secretariat Office from 2 January 2009 to 14 September 2009. On 15 September 2009, he became the Special Officer to Minister of Home Affairs. He then acted as the Secretary of Royal Malaysia Police, Bukit Aman from 20 May 2013 to 30 June 2013. He was the Deputy Director of the Crime Prevention and Community Safety Department at Bukit Aman from 2013 to 2015. On 1 December 2015, he was appointed as the Johor Chief of Police at IPK Johor. He retired from Royal Malaysia Police in March 2019 with last position held as Director of Criminal Investigation Department.
He is currently the Managing Partner at Messrs. Wan & Ting and serves as an Advocate and Solicitor of the High Court of Malaya. He has a Bachelor of Law LLB (Hons) from University Islam Antarabangsa and Master of Social Science (Police Studies) from Universiti Kebangsaan Malaysia.
He is also currently an Independent Non-Executive Director of Talent Corporation Malaysia Berhad.
He was appointed to the Board of Directors of T7 Global Berhad on 28 June 2019.
Tan Sri Dato’ Sri Koh Kin Lip, J.P. (“Tan Sri Richard Koh”) graduated from Plymouth Polytechnic (now known as Plymouth University), United Kingdom with a Higher National Diploma in Business Studies and a Council’s Diploma in Management Studies.
He began his career in Standard Chartered Bank, Sandakan in 1977 as a trainee assistant. In 1978, he joined his family business and was principally involved in administrative and financial matters. In 1985, he assumed the role as Chief Executive Officer of his family business. In 1987, he was pivotal and instrumental in the formation of Rickoh Holdings Sdn. Bhd., the flagship company of the family businesses. Rickoh Holdings Sdn Bhd and group of companies has since continued to grow via diversifying their business activities which comprise, among others, properties investments/ holdings, properties letting, property development, securities investments, oil palm plantations, sea and land transportation for crude palm oil and palm kernel, information technology, hotel business, car park operator, insurance agency, trading in golf equipment and accessories, river sand mining, bricks manufacturing, and quarry operations.
Tan Sri Richard Koh is a Non-Independent Non-Executive Director of NPC Resources Berhad. He is a Senior Independent Non-Executive Director of Cocoaland Holdings Berhad and IOI Properties Group Berhad.
He was appointed to the Board of Directors of T7 Global Berhad on 2 September 2020.
DIRECTORS’ PROFILE
(CONT’D)
Attendance record of Board of Directors’ MeetingsThe attendance records of the Board at the Board of Directors’ Meetings can be found in the Corporate Governance Overview Statement in this Annual Report.
Family relationship with any Director and/or major shareholder Save and except for the following, none of the Directors has any family relationship with any Director and/or major shareholder of the Company:
• TanKayVin is the sonof TanSriDatukSeri TanKeanSoon J.P., theExecutive Deputy Chairman and the major shareholder of T7 Global Berhad.
Conflict of interest None of the Directors has any conflict of interest with the Group.
Conviction of Offence None of the Directors has any conviction for offences within the past five (5) years, other than traffic offences, if any, nor any public sanction or penalty imposed by the relevant regulatory bodies during the financial year.
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Tan Kay Zhuin
POSITION Group Chief Operating Officer
NATIONALITY Malaysian
AGE 32
GENDER Male
Ong Fee Peng
POSITION Group Chief Financial Officer
NATIONALITY Malaysian
AGE 55
GENDER Male
Azman Yakim
POSITION Chief Executive Officer Tanjung Offshore Services Sdn Bhd (“Tanjung Offshore Services”)
NATIONALITY Malaysian
AGE 43
GENDER Male
Tan Kay Zhuin has been the Group Chief Operating Officer of T7 Global Berhad since 2018. He overlooks the Group’s operations and manages all 3 divisions. He first joined T7 Global’s subsidiary, Tanjung Offshore Services Sdn Bhd in 2016, heading the offshore construction and maintenance segment.
He started his career as a production engineer with KrisEnergy Limited in Singapore in 2014. He later joined Toyo Engineering Corporation in Japan as a petroleum engineer.
He holds a Bachelor’s degree in Petroleum Engineering (Hons) from University of New South Wales, Sydney.
He is the son of Tan Sri Datuk Sri Tan Kean Soon, J.P., the Executive Deputy Chairman and major shareholder of the company and brother of Tan Kay Vin, the Executive Director of the company.
Ong Fee Peng, an accountant by profession, was appointed as Group Chief Financial Officer of T7 Global Berhad in 2015. He is primarily responsible for the Group’s overall financial and accounting functions.
He is a registered Chartered Accountant with the Malaysian Institute of Accountant and has more than 26 years of working experiences across the full spectrum of the areas of Investment bank, accounting, audit, manufacturing, construction, stock broking, building management system and corporate finance.
Azman Yakim is the Chief Executive Officer of Tanjung Offshore Services and is currently leading the Group’s overall oil and gas business, servicing for all sectors in upstream, midstream and downstream.
Previously, he was the Senior Vice President, Oil & Gas Business for Siemens Malaysia and Global Corporate Account Manager for Siemens AG. He holds a Bachelor’s Degree in CAD/CAM Engineering from the University of Malaya and Masters Degree in Business Administration (MBA) minor in Finance from the University of Derby. He has 20 years of professional experience in the Energy, Oil & Gas and Utilities Sector, where he has worked with reputable names in the industry such as General Electric (GE), Dresser-Rand (D-R) and Emerson prior to working in Siemens AG.
Key senioR mAnAGement ProfIle
Please refer to the profile of Datuk Seri Dr. Nik Norzrul Thani Bin Nik Hassan Thani (Acting Executive Chairman), Tan Sri Datuk Seri Tan Kean Soon, J.P. (Executive Deputy Chairman) and Tan Kay Vin (Executive Director) for their profile on pages 13 to 15, respectively.
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KEY SENIOR MANAGEMENT PROFILE
(CONT’D)
Muhamad Azarudin Bin Abdullah
POSITION Director Tanjung Offshore Services
NATIONALITY Malaysian
AGE 41
GENDER Male
Noor Haniza Binti Zainuddin
POSITION Senior Manager, Group Quality, Health, Safety and Environment (“QHSE”)
NATIONALITY Malaysian
AGE 41
GENDER Female
Datuk Tan Kean Seng
POSITION Director T7 Gastec Sdn Bhd (“T7 Gastec”)
NATIONALITY Malaysian
AGE 50
GENDER Male
Michael Aziz Eu Peng Weng
POSITION Director T7 Wenmax Sdn Bhd (“T7 Wenmax”)
NATIONALITY Malaysian
AGE 48
GENDER Male
Muhamad Azarudin Bin Abdullah (“Azarudin”) is the Director of Tanjung Offshore Services and currently heads the Group’s oil and gas operations and maintenance segment. He was appointed as the Director of Tanjung Offshore Services on 25 April 2018.
He joined the Group in 2001 and has held several management roles across his 19 years with the Group.
He has more than 19 years of experience in the field of project co-ordination and management of projects relating to oil and gas industry. His experience includes inter-alia in operations and maintenance, gas compression package, power utilities, offshore supply vessel, field development, upstream drilling and process equipment facilities.
He holds a Diploma in Electrical Engineering from Universiti Teknologi Malayisa.
Noor Haniza Binti Zainuddin is currently the Senior Manager, Group QHSE. She joined Tanjung Offshore Services Sdn Bhd in 2007 as a Manager of QHSE and Licensing.
She has more than 15 years of experience in health, safety and environment and licensing. She is a registered member of Certified Environmental Professional in Scheduled Waste Management (CEPSWAM), QMS Lead Auditor and Safety & Health Officer. She is also a member of Board of Engineers Malaysia.
Datuk Tan Kean Seng is currently the Director of T7 Gastec. He joined T7 Global Berhad group in 2015, heading the products and engineering segment of the Energy Division.
He has more than 20 years of experience in operations, products and business development in the oil and gas industry. He holds a Bachelor of Science in Business Administration from Central Missouri State University, United States of America.
He is the brother of Tan Sri Datuk Seri Tan Kean Soon, J.P., the Executive Deputy Chairman and major shareholder of the Company.
Michael Aziz Eu Peng Weng is currently the Director of T7 Wenmax. He was appointed as the Director of T7 Wenmax in 2004.
He has more than 20 years of experience in project management, business development and products solutions in oil and gas industry. He holds a Cambridge GCE Advanced Level (A-Level) from Sunway College, Malaysia.
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Ku Thien Shung
POSITION General Manager T7 Gastec
NATIONALITY Malaysian
AGE 43
GENDER Male
Trevor Alan Peacock
POSITION General Manager T7 Kilgour Sdn Bhd (“T7 Kilgour”)
NATIONALITY British
AGE 57
GENDER Male
Syed Mohammad Mazhar Bin Syed Mohd Bakar
POSITION General Manager T7 Subsea Sdn Bhd (“T7 Subsea”)
NATIONALITY Malaysian
AGE 47
GENDER Male
Ku Thien Shung is currently the General Manager of T7 Gastec. He joined T7 Global Berhad Group in 2019, heading the operation and business of T7 Gastec.
He has more than 15 years of experience in project and management, project planning, engineering design and cost control in the oil and gas industry. He holds a Bachelor Degree (Hons) Electronic from Multimedia University, Malaysia.
Trevor Alan Peacock has been the General Manager of T7 Kilgour since he joined in January 2019. He oversees the overall operations of T7 Kilgour.
He has more than 30 years of experience in project management, design, engineering, production and supply-chain in the aerospace industry. He started his career with British Aerospace Military Aircraft Division (BAM) in 1980 to 2009 which he has held several management roles during his working tenure with BAM. Subsequently he joined BAE Systems Aero Structures Group, GKN Aerospace Group and Strata Manufacturing PJSC in Abu Dhabi and UMW Aerospace, Malaysia prior to T7 Kilgour Sdn Bhd.
He holds a Post Graduate Diploma in Management from University of Central Lancashire and Bachelor of Arts in Production Engineering from Open University Milton Keynes.
Syed Mohammad Mazhar Bin Syed Mohd Bakar is currently the General Manager of T7 Subsea since he joined in January 2019. He oversees the operations of T7 Subsea.
Prior joining T7 Subsea, he has more than 20 years of experience project management and business development in oil and gas and telecommunication industry within the South East Asian region. He has held several management roles in Malsat Sdn Bhd, TL Geohydrographics Sdn Bhd, Orogenic Geoexpro Sdn Bhd, O&G Geo Services Sdn Bhd and Geoterra Sdn Bhd.
He holds a Diploma in Geomatics/Land Surveying and Certificate in Geomatics/Land Surveying from Polytechnic Ungku Omar.
NOTES:Save as disclosed above, none of the members of the key senior management team has:
1. any directorship in public companies and listed issuers;
2. any family relationship with any directors and/or major shareholders of the Company;
3. any conflict of interest with the Company;
4. any conviction for offences (other than traffic offences) within the past five (5) years; and
5. any public sanction or penalty imposed by the relevant regulatory bodies during the financial year.
KEY SENIOR MANAGEMENT PROFILE
(CONT’D)
020
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sUsTainabiliTy StAtement
T7 Global Berhad’s (“T7 Global”) vision is to be a trusted partner that make a difference on the global stage. The Group recognises its corporate social responsibility to the society and the importance of sustainable growth. We are mindful of the need to develop our business in a sustainable and responsible manner which allows us to reach new level of recognition.
This sustainability statement (“the Statement”) aims to provide our stakeholders with a clear picture of major material sustainability matters and our management approaches. The Statement is made in accordance with Bursa Malaysia Securities Berhad’s Main Market Listing Requirements and Sustainability Reporting Guide and covers the period from 1 January 2020 to 31 December 2020 (“FY2020”).
SUSTAINABILITY GOVERNANCE
For best practices to sustainability governance, the Board of Directors (“the Board”) is accountable for sustainability strategy and has empowered senior management for sustainability performance management.
SUSTAINABILITY DEVELOPMENT PILLAR
ECONOMY
• BoardCharter;
• AuditandRiskManagementCommittee’sTermofReference;
• NominationCommittee’sTermofReference;
• RemunerationCommittee’sTermofReference;
• T7Global’sLimitsofAuthority
• CodeofConductandEthics;and
• ProcurementPolicyandProcedures.
ENVIRONMENT
• QualityHealthSafetyandEnvironmentalPoliciesandProcedures;
COMMUNITY
• CodeofConductandEthics;
• IndustrialRelatedPoliciesandProcedures;and
• QualityHealthSafetyandEnvironmentalPoliciesandProcedures.
WORKPLACE
• HumanResourcesPoliciesandProcedures;
• QualityHealthSafetyandEnvironmental(“QHSE”) Policies and Procedures;
• EmployeeHandbook;
• CodeofConductandEthics;
• WhistleblowingPolicyandProcedures;and
• Anti-BriberyandAnti-CorruptionPolicy
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SUSTAINABILITY STATEMENT
(CONT’D)
STAKEHOLDERS ENGAGEMENT
T7 Global has placed great importance to carry out activities with high ethical standards to promote responsible practices among its stakeholders i.e. employees, shareholders/investors, business partners, customers and suppliers in order to achieve a sustainable development in the market place.
The structured process in Bursa Malaysia Securities Berhad’s Sustainability Reporting Guide is applied to identify, prioritise and review material sustainability matters.
CUSTOMERS◆
Customer Assessment ◆
Site Visits and Meeting Engagement◆
Provision of High-Quality Products and Services
◆ Quality Control of Products
and Services◆
Long-Term Relationship Building
SHAREHOLDERS/INVESTORS
◆ Trust and Confidence Building
◆ Corporate Value Increase
◆ Transparency of Material information
◆ Various Communication Channels
BUSINESS PARTNERS
◆ Due Diligence Practice
◆ Meeting Engagement
◆ Site Visits
◆ Social Activities
SUPPLIERS◆
Reliable Assessment◆
Supplier Audit◆
Site Visits and Meeting Engagement◆
Evaluation of Products and Services
◆ Mutual Trust Establishment
EMPLOYEES◆
Multi-Channel Communication◆
Staff Activities◆
Networking Activities◆
Appropriate Reward System◆
Staff Training and Career Development
GOVERNMENT AND REGULATORS
◆ Audit and Inspections
◆ Performance Reports
◆ Meetings and Assessment
◆ On Government Initiatives
Step 3: Review
Sustainable matters are reviewed by the top management and approved by the Board of Directors.
Step 2: Prioritisation
Sustainable matters are prioritised through senior management meeting and put into the Executive Committee meeting agenda.
Step 1: Identification
Sustainable matters are identified by senior Management and reported to Executive Directors
CUSTOMERS◆
Customer Assessment ◆
Site Visits and Meeting Engagement◆
Provision of High-Quality Products and Services
◆ Quality Control of Products
and Services◆
Long-Term Relationship Building
SHAREHOLDERS/INVESTORS
◆ Trust and Confidence Building
◆ Corporate Value Increase
◆ Transparency of Material information
◆ Various Communication Channels
BUSINESS PARTNERS
◆ Due Diligence Practice
◆ Meeting Engagement
◆ Site Visits
◆ Social Activities
SUPPLIERS◆
Reliable Assessment◆
Supplier Audit◆
Site Visits and Meeting Engagement◆
Evaluation of Products and Services
◆ Mutual Trust Establishment
EMPLOYEES◆
Multi-Channel Communication◆
Staff Activities◆
Networking Activities◆
Appropriate Reward System◆
Staff Training and Career Development
GOVERNMENT AND REGULATORS
◆ Audit and Inspections
◆ Performance Reports
◆ Meetings and Assessment
◆ On Government Initiatives
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SUSTAINABILITY STATEMENT
(CONT’D)
ECONOMY ENVIRONMENT COMMUNITY WORKPLACE
ECONOMY
T7 Global has grown steadily since the financial year (“FY”) 2015. The Group’s revenue has increased from RM83 million in FY2016 to RM189 million in FY2020. Detailed information is disclosed in our Annual Report.
We believe that the stable economic performance is the foundation to business goal achievement and sustainability development. It also emphasises on T7 Global’s commitment in contributing back to the community. Our local supply chain and employment enable T7 Global to have a considerable impact to our stakeholders.
ENVIRONMENT
The oil and gas industry has a considerable impact on our environment. T7 Global supports the efforts of environmental protection. Energy usage, water consumption and treatment, greenhouse gas emissions have been placed importance in making business decisions and compiling the risk assessment. Opportunities and risks are assessed by the Audit and Risk Management Committee (“ARMC”) at the beginning of the projects. The ARMC scrutinise any possible risk which may be encountered by the Group, followed by risk control and mitigation strategies. T7 Global has established a series of QHSE policies and procedures including scheduled waste management. Policies and procedures are well compliant with regulatory and client requirements.
ISO 9001:2015 ISO 14001:2015 ISO 45001:2018
T7 Global Berhad √ T7 Global Berhad √ T7 Global Berhad √
Tanjung Offshore Services Sdn Bhd √ Tanjung Offshore Services Sdn Bhd √ Tanjung Offshore Services Sdn Bhd √
T7 Gastec Sdn Bhd √ T7 Gastec Sdn Bhd √ T7 Gastec Sdn Bhd √
T7 Wenmax Sdn Bhd √
T7 Kemuncak Sdn Bhd √
T7 Kilgour Sdn Bhd’s aerospace facility has been accredited by Nadcap a global cooperative accreditation program for aerospace engineering, defense and related industries and also AS9100D which is a widely adopted and standardised quality management system for the aerospace industry by Automotive Engineers and the European Association of Aerospace Industries.
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SUSTAINABILITY STATEMENT
(CONT’D)
WORKPLACE
1.1 OUR PEOPLE
Human capital is the biggest asset for T7 Global. The Group devotes itself to provide a safe and healthy workplace, as well as ethical company culture to all employees. It is believed that an efficient teamwork building and a great platform provided for employees’ career development can ensure the Group’s sustainable and effective talent pool. All of T7 Global’s employees are encouraged for career training and personal development. T7 Global supports the development of local workforce, with approximately 95% of our people are locally hired. Our employees consist of 56% permanent staff and 44% contract staff. Contract staff is recruited on project basis and as when it is required.
1.2 EMPLOYEE DIVERSITY
T7 Global is aware of the contribution of women towards considerate economic value for the company. We are committed to make gender balance a reality. Both men and women have equal access to T7 Global’s recruitment, promotion and staff training. One out of seven directors is female within T7 Global’s Board. We also promote more talented women to management and leadership positions in our operations. Approximately 20% of total employees are in management level and 19% of our management team are female.
ISO 14001:2015
SOFT SKILL TRAINING 472 HOURS
TECHNICAL TRAINING 784 HOURS
MANAGEMENT BY AGE (%)
31 - 50 years old
58%
< 31 years old
6%
> 51 years old
36%
EMPLOYEE BY GENDER (%) MANAGEMENT BY GENDER (%)
Female
37%
Male
63%
Female
19%
Male
81%
Permanent
56%
Contract
44%
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CORPORATE SOCIAL RESPONSIBILITY (CSR) / COMMUNITY
T7 Global is a big family and we care for all our ‘family’ members. We have comprehensive employee benefits as detailed in the Employee Handbook. Our employee benefits including:
• Comprehensiveinsurancepolicy• Comprehensivemedicalcoverageandbenefits• Employeewelfaresforthebirthofemployee’schildren,funeralandothers
SUSTAINABILITY STATEMENT
(CONT’D)
May 2020 – T7 Global Berhad donated 8,000 pieces of medical masks to Royal Malaysian Customs Department, witnessed by Minister of Finance, YM Tengku Dato’ Sri Zafrul Abdul Aziz.
March 2020 – T7 Global Berhad worked together with Malaysia Airlines to bring home 150 stranded Malaysians in Cambodia since the first announcement of Movement Restriction Order (MCO).
May 2020 – T7 Global Berhad contributed 10,000 pieces of medical masks and 1 set of NucTech Fever Block Screening System to Ministry of Home Affairs, received by Minister of Home Affairs, YB Dato’ Sri Hamzah Zainudin.
May 2020 – T7 Global Berhad donated 10,000 pieces of medical masks and 1 set of NucTech Fever Block Screening System to frontliners during pandemic of Covid-19 via Ministry of Defence, witnessed by Minister of Defence - YB Dato’ Sri Ismail Sabri bin Yaakob, Chief of Army - Jeneral Tan Sri Affendi Bin Buang and Secretary General - YBhg. Dato’ Sri Muez bin Abd Aziz.
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QHSE POLICIES AND PROCEDURES
QHSE Department has established extensive QHSE policies and procedures to ensure a healthy and safe environment for our stakeholders. QHSE policies and procedures have outlined the roles and responsibilities of the relevant departments and integrated QHSE concepts into our business strategies.
QHSE department oversees every project and departmental activities to comply with QHSE policies and procedures. All business units of T7 Global are required to ensure safety to people, none damage to asset and compliance. T7 Global’s senior management has delegated each of the Head of Departments to monitor the implementation of QHSE policies and procedures. Reports will be submitted regularly followed by the reporting procedures that have been set up in QHSE Manual.
100% of project-based employees are required to attend the respective safety and health training annually based on the contract requirements. T7 Global ensures outfield employees to attend relevant competency courses such as Permit To Work (PTW), Confined Space and Basic Offshore Safety Induction and Emergency Training (BOSIET), Scaffolding, Working at Height, Rigging & Slinging and Respirator Fit Test (RFT). Medical insurance is renewed for all project-based employees with a range of 6 months to 2 years.
SUSTAINABILITY STATEMENT
(CONT’D)
May 2020 – T7 Global Berhad lends a helping hand to frontliners by donating 10,000 pieces of medical masks and 1 set of NucTech Fever Block Screening System to Ministry of Health in, witnessed by Minister of Health, YB Dato’ Sri Dr. Adham Baba and Deputy Minister of Health, YB Dato’ Dr. Haji Noor Azmi Ghazali.
May 2020 – T7 Global Berhad donated 10,000 pieces of medical masks in to Ministry of Transport for distribution to frontliners, witnessed by Minister of Transport, YB Datuk Seri Ir. Dr. Wee Ka Siong.
January 2021 – T7 Global Berhad donated 15,000 pieces of masks to flood victims in Terengganu under foundation Yayasan Tuanku Nur Zahirah.
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The primary objectives of the Audit Committee and Risk Management Committee (“ARMC”) are as follows:
• AssisttheBoardindischargingitsstatutorydutiesandresponsibilitiesrelatingtointernalcontrols,accountingandreportingpractices,complianceandriskmanagementofholdingcompanyandeachofitssubsidiaries.
• MonitorcompliancewithintheGrouppoliciestoensuretheobjectivityandeffectivenessoftheGroup’sinternalcontrolmeasures.
• ServeasthefocalpointforcommunicationbetweenExternalAuditors,InternalAuditorsandmanagementtomakecertaintheintegrityofthemanagementandadequacyofdisclosuretoshareholders.
• Serveasanindependentpartywhenreviewingfinancialinformationpresentedbythemanagementbeforedistributiontoshareholdersandgeneralpublic.
• ServeasthefocalpointforcommunicationbetweenExecutiveDirectorand/orGroupChiefFinancialOfficeronwhethertheCompany’s riskmanagementand internalcontrolsystemareoperatingadequatelyandeffectively, inallmaterialaspects,basedontheriskmanagementandinternalcontrolsystemoftheCompany.
COMPOSITION OF THE ARMC
ThemembersoftheARMCconsistofIndependentNon-ExecutiveDirectors(“INEDs”) and their respective meeting attendance recordsduringthefinancialyearended31December2020areasfollows:-
Name Designation/Directorate Meetings Attended
TanSamEng ChairpersonINED
4/4
CP(R)Dato’SriWanNajmuddinBinMohd MemberINED
4/4
AdmiralTanSriDato’SeriPanglimaAhmadKamarulzamanBinHjAhmadBadaruddin(R)(Appointedon17August2020)
MemberINED
2/2
ThecompositionoftheARMCisincompliancewithParagraphs15.09and15.10oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“Bursa Malaysia Securities”) (“Listing Requirements”)andPractice8.1oftheMalaysianCodeonCorporateGovernancewherebyallthree(3)ARMCmembersareIndependentNon-ExecutiveDirectors.NoneoftheIndependentDirectorsarealternatedirectors.
Ms.TanSamEng,theChairpersonoftheARMC,isamemberoftheMalaysianInstituteofAccountants(MIA),aFellowMemberoftheAssociationofCharteredCertifiedAccountants(ACCA),andalsoaMemberoftheCharteredTaxInstituteofMalaysia(CTIM).Inthisrespect,theCompanycomplieswithParagraph15.09(1)(c)oftheListingRequirements.
TheARMC’sTermsofReferenceareclearlydefinedbytheBoardtoitsmembers,andacopyofitisaccessibleontheCompany’swebsite at www.t7global.com.my.
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SUMMARY OF WORKS DURING THE FINANCIAL YEAR
Duringthefinancialyearended31December2020,thesummaryofworksundertakenbytheARMCwasasfollows:-
• ReviewedtheGroup’scompliancewiththeListingRequirementsandtheapplicableapprovedaccountingstandardsissuedbyMalaysianAccountingStandardsBoard(“MASB”).
• ReviewedthequarterlyunauditedfinancialstatementsanditsexplanatorynotesthereonandthereafterrecommendedthesametotheBoardofDirectorsforapproval.
• ReviewedtheARMCReportandStatementonRiskManagementandInternalControlpriortotheirinclusionintheGroup’sAnnualReport.
• ReviewedthelistofrelatedpartytransactionsthatmayarisewithintheGroupincludinganytransaction,procedureorcourseofconductthatraisesthequestionsofmanagement’sintegrity.
• Reviewedandapprovedtheannualauditplanontheinternalaudit,includingthescopeofworkforthefinancialyear.• ReviewedtheannualreportandtheauditedfinancialstatementsoftheGrouppriortosubmissiontotheBoardofDirectors
fortheirconsiderationandapproval.ThereviewwastoensurethattheauditedfinancialstatementsweredrawnupinaccordancewiththeCompaniesAct2016andtheapplicableapprovedaccountingstandardsissuedbytheMASB.
• Reviewedtheexternalauditors’scopeofworkandtheirauditplan.• Reviewedwiththeexternalauditorstheresultsoftheiraudit,theauditreportandinternalcontrolandrecommendations
inrespectofimprovementsininternalcontrolproceduresnotedinthecourseoftheiraudit.• MetwiththeExternalAuditorswithoutthepresenceoftheManagementandExecutiveDirectors.• ReviewedanddiscussthekeyrisksoftheGroupandtoevaluatethemitigationmeasures.
INTERNAL AUDIT FUNCTION
TheGrouphasengagedan internalauditprofessionalfirm, i.e.OACConsultingSdn.Bhd.duringtheyear toperformtheinternalaudit functionof theGroup.The internalauditfirmreportsdirectly totheARMCandadministratively totheGroupChiefFinancialOfficer.TheworksoftheinternalauditfirmareguidedbytheCodeofConductthatprovidesitsindependenceinevaluatingandreportingonadequacy,integrityandeffectivenessoftheoverall internalcontrolsystem,riskmanagementandcorporategovernanceintheGroupusingasystematicanddisciplinedapproach.Thesummaryofworksofinternalauditincludesthefollowing:-
• ReviewtheexistenceofprocessestomonitortheeffectivenessandefficiencyofoperationsandtheachievementoftheobjectivesofT7Global;
• Reviewtheefficiencyandeffectivenessoftheinternalcontrolsystemforsafeguardingofassetsandprovidingconsistentandaccuratefinancialandoperationaldata;
• Promoteriskawarenessandthevalueandnatureofaneffectiveinternalcontrolsystem;• ReviewcompliancewithT7Global’spolicies,procedures,andregulations;andifsuchpolicies,proceduresandregulations
areinadequate,theoutsourcedinternalauditorswillmakethenecessaryrecommendationstoensureproperpoliciesareinplace;
• AssistManagementinaccomplishingitsobjectivesbyadoptingasystematicanddisciplinedauditapproachtoevaluatingandimprovingthegovernanceprocesswithinT7Global’soperations;
• Challengeandprovidealternativestoacceptedpractices;and• Addvalueandimproveoperationalactivities.• Reviewedgapanalysisondevelopingananti-briberyandcorruptionframework.
Otherinitiativesundertakenbytheinternalauditprofessionalfirminthefinancialyearended31December2020includethereviewofriskmanagementpoliciesinkeysubsidiariesandoperationalreviewofprojectmanagementwithintheGroup.Thecorresponding reports of the audit reviews performed were presented to the ARMC and forwarded to the Management for attentionandcorrectiveactions.TheManagementisresponsibleforensuringthattherecommendedcorrectiveactionsaretakenwithintherequiredtimeframe.ThecostincurredinrelationtotheinternalauditfunctionduringtheyearwasRM25,000/-.
Duringtheyear,variousManagementandreportingmeetingswereheldtoensurethattheinternalauditpoliciesareimplementedandcommunicatedeffectivelythroughoutalldivisionswithintheGroup.
ThisARMCReportismadeinaccordancewitharesolutionpassedbytheDirectorsattheBoardofDirectors’Meetingheldon8April2021.
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INTRODUCTION
TheBoardofDirectors(“the Board”)ispleasedtopresentitsStatementonRiskManagementandInternalControlforthefinancialyearended31December2020(“Statement”).ThisStatementispreparedpursuanttoParagraph15.26(b)oftheBursaMalaysiaSecuritiesBerhad(“Bursa Malaysia Securities”)’sMainMarketListingRequirements(“Listing Requirements”).
TheBoardisalsoguidedbythelatest“StatementonRiskManagementandInternalControl-GuidelinesforDirectorsofListedIssuers”issuedbytheTaskForceonInternalControlwiththesupportandendorsementoftheBursaMalaysiaSecuritiesandPrincipleBoftheMalaysianCodeonCorporateGovernance(“the Code”)-RiskManagementandInternalControlFramework.
TheBoardhasestablishedanongoingprocessforidentifying,evaluatingandmanagingthesignificantrisksfacedbytheGroupand this process includes enhancing the risk management and internal control system from time to time in response to the changestothebusinessenvironmentorregulatoryguidelines.
TheBoardensuresthatthesystemmanagestheGroup’skeyareasofriskwithinanacceptableriskprofiletoincreasethelikelihood that theGroup’spoliciesandbusinessobjectiveswillbeachieved.TheBoardcontinually reviews thesystemtoensure that the risk management and internal control system provides a reasonable but not absolute assurance against material misstatementofmanagementandfinancialinformationandrecordsoragainstfinanciallossesorfraud.
BOARD RESPONSIBILITIES
TheBoardisresponsiblefortheGroup’sinternalcontrolandriskmanagementsystemtosafeguardshareholders’investmentandtheGroup’sassetsaswellasreviewingtheadequacyandeffectivenessofthesaidsystem.
TheBoardisoftheviewthattheriskmanagementandinternalcontrolsysteminplacefortheyearunderreviewanduptothedateofissuanceofthefinancialstatementsisadequateandeffectivetosafeguardtheinterestsofshareholders,customers,employeesandtheGroup’sassets.
Inviewofthelimitationsinherentinanysystemofriskmanagementandinternalcontrol,thesesystemsaredesignedtomanage,ratherthaneliminate,theriskoffailuretoachievetheGroup’sbusinessandcorporateobjectives.Thesesystemscanthereforeonlyprovidereasonable,butnotabsoluteassurance,againstmaterialmisstatementorloss.
RISK MANAGEMENT GOVERNANCE
RiskmanagementisregardedbytheBoardtobeanintegralpartofthebusinessoperations.TheBoardmaintainsanon-goingcommitmenttoenhancetheGroup’scontrolenvironmentandprocesses.ThekeyrisksrelatingtotheGroup’soperationsandstrategicandbusinessplansareaddressedatManagement’smeetings.SignificantrisksidentifiedbytheManagementaretobebroughttotheattentionoftheBoardattheirscheduledmeetings.
Theabovementionedpractices/initiativesputinplacebytheBoardserveastheon-goingpracticeusedtoidentify,evaluateandmanagesignificantrisksduringthefinancialyearunderreview.InviewoftherecentweaknessesontheGroup’scorporategovernanceandinternalcontrolsystemsthathavecometotheBoard’sattention,theBoardisintheprocessofaddressingtheseweaknessesnotedsoastoimprovetheeffectivenessandefficiencyoftheriskmanagementfunctionandtheinternalcontrolsystemsoftheGroup.
TheGroupRiskManagementFrameworkwhichsetsoutthefundamentalprinciplesonriskgovernanceistodrivethedevelopmentofriskmanagementpracticesandtoolswhichenabletheidentification,measurementandcontinuousmonitoringofallapplicablerisksoftheGroupincludingtheidentificationofemergingrisks.
TheBoardestablishedagovernancestructurethat isdesignedtogoverntheGroup’sbusinessactivitiestobe:consistentwiththeGroup’soverallbusinessobjectivesandriskappetiteconductedwithinclearlydefinedlinesofresponsibility,authoritylimits,andaccountabilityalignedtoriskmanagementandcontrolresponsibilitiessubjectedtoadequateriskmanagementandinternalcontrols.
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SYSTEM OF INTERNAL CONTROL AND COMPLIANCE PROCESS
TheGroupmaintainsasystemofinternalcontrolthatservestosafeguarditsassets,identifyandmanagerisk,ensurecompliancewithstatutoryandregulatoryrequirements,andtoensureoperationalresultsarecloselymonitoredandsubstantialvariancesarepromptlyexplained.
WhilsttheBoardmaintainscontrolanddirectionoverappropriatestrategic,financial,organisationalandcomplianceissues,ithasdelegatedthe implementationof thesystemof internalcontrols to theexecutivemanagement, ledbytheExecutiveDirectors(“EDs”).TheEDs,whoareempoweredtomanagethebusinessoftheGroup,hasprimaryoperationalresponsibilityforthesystemofinternalcontrols.
TheManagementof theGroup identifieskeycompliance riskareasasguidedby theGroupComplianceFrameworkandconductsongoingcompliancechecks.ReportsonthecompliancestatusoftheentitiesaresubmittedtotheGroup’sAuditandRisk Management Committee (“ARMC”)forreview.TheGroupComplianceFrameworkisestablishedtooutlinethegovernancestructureoncomplianceriskmanagementfunctionsandcontrolresponsibilities.
TheARMCoftheGroupreviewsinternalcontrolissuesidentifiedbytherespectiveinternalauditors,theexternalauditorsandmanagement,andevaluatetheadequacyandeffectivenessoftheirriskmanagementandinternalcontrolsystems.Theyalsoreviewtheinternalauditfunctionswithparticularemphasisonthescopeandfrequencyofauditsandtheadequacyofresources.
TheGroup’sriskappetitesetsoutthelevelofrisktoleranceandlimitstogovern,manageandcontroltheGroup’srisk-takingactivities.Thestrategicobjectives,businessplans,desiredriskprofileandcapitalplansarerequiredtobealignedwiththeriskappetite.
TheBoardconvenesmeetingsonquarterlybasisinordertomaintainfullandeffectivesupervision.TheExecutiveDirectors,beingtheprincipalchannelofcommunicationbetweentheBoardandtheManagement,willleadthepresentationofBoardpapersandprovidecomprehensiveexplanationonkey issues. InarrivingatanydecisionsbasedonrecommendationsbyManagementandtheARMC,athoroughdeliberationanddiscussionbytheBoardisaprerequisite.
TheBoardrecognisedallriskscanbecontrolledoreliminatedbyaneffectivesystemoninternalcontrol.KeyfeaturesoftheGroup’sinternalcontrolsinclude:-
• AnorganisationalstructurewithclearlydefinedlinesofresponsibilityandrelevantauthorityhasbeensetupfortheGroup.• TheGroup’sManagementwiththeassistanceofacentralisedhumanresourcefunctionsetsthepoliciesforrecruitment,
trainingandappraisaloftheemployeeswithintheGroup.• Policiesandprocedureswhichsetsoutthecompliancestandardsfordailyoperationsfortherespectivebusinessunits
oftheGroup.• TheManagementmeetsmonthlytoreviewtheoperationalandfinancialperformanceofthebusinessesintheGroupand
itssubsidiaries,andtodiscusskeybusiness,operationalandmanagementissues.• TheBoardofDirectorsreceivesandreviewsquarterlyperformancereportsontheGroupanditssubsidiariesfromthe
Management,anddiscussonsignificantbusinessandriskissues.
CODE OF ETHICS AND CONDUCT
CodeofEthicsandConductisrepresentedtotheBoard,theManagementteamandallemployeesasareferenceofconduct.ThepolicyofT7GlobalBerhadcomplieswithallgovernmentallaws,rules,andregulationsapplicabletoitsbusinesses.CodeofEthicsisappliedwhenitisstricterthanthelocallawandregulations.Codeofconductsincludesthefollowingfourmainsections:
• ConflictsofInterestPolicy
ItisT7GlobalBerhad’spolicythatallDirectors,ManagementandemployeesareexpectedtoavoidconflictbetweenpersonalinterestsandtheinterestsoftheGroup.Ifconflictexists,interestsoftheGroupareprioritytopersonalinterests.
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CODE OF ETHICS AND CONDUCT (CONT’D)
• AssetPolicy
AllDirectors,ManagementandemployeesareexpectedtoprotecttheassetsoftheGroup,anduseallassetsefficientlyinthebestinterestsoftheGroup.
• DirectorshipsPolicy
TheGrouprestrictstheholdingofdirectorshipsinnon-affiliated,profitorganisationsbyofficersandemployeesandtoprohibittheacceptancebyanyofficeroremployeeofsuchdirectorshipsthatwouldinvolveaconflictofinterestwith,orinterferewith,thedischargeoftheofficer’soremployee’sdutiestothecorporation.
• Whistle-BlowingPolicyandProceduresandOpen-DoorCommunication
TheGrouphasawhistle-blowingpolicyandproceduretoprovideopportunityforallstakeholdersincludingemployees,shareholdersandotherstoraisetheirconcernsofanymalpracticewithintheGroup.Theobjectiveofthepolicyandprocedureistoprovideandfacilitateamechanismforwhistle-blowertoreportconcernaboutanysuspectedand/orknownmisconduct,wrongdoings,corruption,fraud,wasteand/oranyabuseofpower.
Thiswillenableeachcase/issuecanbeinvestigatedandforappropriateactiontobetakentoensurethatthematterisresolvedeffectivelyandwithintheGroupwhereverpossible.
Ifanemployeenoticesanymisconduct,wrongdoings,corruption,fraud,wasteand/oranyabuseofpower,heorsheshouldreporttoimmediatesupervisor.Eachsupervisorisexpectedtobemadeavailableforitssubordinatesforthispurposeandanyrelevantinvestigationshouldbeconductedbythesupervisor.Iftheemployeeisdissatisfiedwiththerevieworinvestigationfromthesupervisor,furtherreviewbytheExecutiveDeputyChairmanandtheActingExecutiveChairmanareencouraged.Investigationteamwillbesetuptoinvestigatetheissueandtakeactions.Reviewsshouldcontributetothelevelofmanagementappropriatetoresolvetheissue.Iftheissuecannotberesolved,thewhistle-blowerscanescalatethereporttotheARMCChairperson.TheARMCwilldeliberatethematterreportedanddecideontheappropriateaction.
• Anti-BriberyandAnti-CorruptionPolicyandProcedures
InadditiontotheexistingCodeofEthicsandConductforDirectorsandWhistleblowingPolicyandProcedures,aswellasfinancialandnon-financialcontrolsimplemented,suchassegregationofincompatiblefunctions,multiplesignatoriesfortransactions,andactionstobetakenduringsituationsofconflictsofinterest,theGrouphasadoptedanAnti-BriberyandAnti-CorruptionPolicyinlinewiththeenforcementofthenewprovision,Section17AoftheMalaysianAnti-CorruptionCommissionAct2009(Amendment2018)todealwithimpropersolicitation,briberyandothercorruptactivitiesandissuesthatmayariseinthecourseofbusinessinordertopreventactsofbriberyandcorruption.
TheGroupwillperformacontinuousreviewofitsanti-briberyandanti-corruptionmanagementsystemstoassessthecomprehensivenessofitssystems,policiesandprocedureswithaviewtowardsenhancingthemandtoaddressanyshortcomings,soastoprovideassurancetotheGroupthatitssystems,policiesandproceduresare‘reasonableandproportionate’tothenatureandsizeoftheGroupandthattheymeettherequirementsoftheGuidelinesonAdequateProcedures.
InadherencetothisPolicy,theGrouphasadoptedazero-toleranceapproachtoallformsofcorruptionandbribery.TheGroupiscommittedtoconductitsbusinesswiththehighestlevelofintegrityandethicsandtocomplywithapplicablelaws,rulesandregulationsonanti-briberyandanti-corruption.
TheGrouppracticesanopen-doorpolicyandencouragesemployeestosharetheirconcernsandsuggestionsusingthereportingchannelsstatedintheWhistleblowingPolicyandProcedures.
TheCodeofEthicsandConduct,Whistle-BlowingPolicyandProceduresandAnti-BriberyandAnti-CorruptionPolicyandProceduresoftheCompanyareavailableforreferenceontheGroup’swebsiteatwww.t7global.com.my.
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REVIEW OF STATEMENT BY THE ExTERNAL AUDITORS
PursuanttoParagraph15.23oftheBursaMalaysiaSecurities’sListingRequirements,theExternalAuditorshaveconductedalimitedassuranceengagementonthisStatementforinclusionintheAnnualReportforthefinancialyearended31December2020.Theirassuranceengagementwasperformedpursuant to thescopesetout inAuditandAssurancePracticeGuide(“AAPG”)3:GuidanceforAuditorsonEngagementstoReportontheStatementonRiskManagementinaccordancewithISAE3000(Revised2015)andInternalControlissuedbyMalaysianInstituteofAccountants.
Basedontheirproceduresperformed,theExternalAuditorshavereportedtotheBoardthatnothinghascometotheirattentionthatcausesthemtobelievethatthisStatementisnotprepared,inallmaterialrespect,inaccordancewithdisclosurerequiredbyparagraphs41and42oftheStatementonRiskManagementandInternalControl:GuidanceforDirectorsofListedIssuersassetout,noritisfactuallyinaccurate.AAPG3doesnotrequiretheExternalAuditorstoconsiderwhetherthisStatementcoversallrisksandcontrols,ortoformanopinionontheadequacyandeffectivenessoftheGroup’sriskandcontrolsystem.
CONCLUSION
Forthefinancialyearunderreview,therewerenosignificantinternalcontroldeficienciesormaterialweaknessresultinginmateriallossesorcontingenciesrequiringdisclosureintheAnnualReport.TheBoardisoftheviewthattheexistingGroup’ssystemofriskmanagementandinternalcontrolisadequatetosafeguardshareholders’investmentandtheGroup’sassets.However,theBoardrecognisesthefactthattheGroup’ssystemofriskmanagementandinternalcontrolpracticesmustcontinuouslyevolvetomeetthechangingandchallengingbusinessenvironment.ThereforetheBoardiscommittedtocontinuouslystrengthentheGroup’ssystemofinternalcontrolandriskmanagementframework.
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TheBoardofDirectors(“Board”)ofT7GlobalBerhad(“T7Global”) recognises and is committed in upholding a high benchmark ofcorporategovernanceandensuringcontrols, systemsandprocessesarewell sustained for theGroup.TheBoardwillcontinuouslyevaluatethestatusoftheGroup’scorporategovernancepracticesandprocedureswithaviewtoadoptandimplementthepracticesoftheMalaysianCodeonCorporateGovernance(“MCCG”) wherever applicable in the best interests ofthestakeholdersoftheGroup.
TheBoardispleasedtopresentthefollowingCorporateGovernanceOverviewStatement(“CG Statement”) that describes theextentofhowtheGrouphasappliedandcompliedthethree(3)principleswhicharesetoutintheMCCGthroughoutthefinancialyearunderreview:-
(a) PrincipleA:Boardleadershipandeffectiveness;(b) PrincipleB:Effectiveauditandriskmanagement;and(c) PrincipleC:Integrityincorporatereportingandmeaningfulrelationshipwithstakeholders.
ThisCGStatementshouldalsobereadtogetherwiththeCorporateGovernanceReportoftheCompanywhichisavailableontheCompany’scorporatewebsiteatwww.t7global.com.my.
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS
BoardComposition
AsatthedateofnoticeofSeventeenthAnnualGeneralMeeting(“AGM”),T7Globalhasseven(7)Directors–theActingExecutiveChairman,theExecutiveDeputyChairman,theExecutiveDirectorandfour(4)IndependentNon-ExecutiveDirectors.TheBoardcompositionisincompliancewithParagraph15.02oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“Bursa Malaysia Securities”) (“Listing Requirements”)whichstatesthatatleasttwo(2)Directorsorone-third(1/3)oftheBoard,whicheverishigher,areIndependentDirectorsandRecommendation3.5ofMCCGtohavemajorityofIndependentDirectorswheretheChairmanoftheBoardisnotanIndependentDirector.
AlltheDirectorsactinthebestinterestoftheGroupandbelievethatthecurrentBoardcompositionfairlyreflectstheinterestsofitsshareholderstoprovideeffectiveleadership,strategicdirectionandnecessarygovernancetotheGroup.TheseDirectorscollectivelyhaveskillsandexperiencesfromdifferentfieldofbusiness,intermsofcommercial,financial,technical,corporateandlegalfortheeffectivemanagementoftheGroup’sbusinesses.TheDirectors’profilesaresetoutintheDirectors’ProfilesectionofthisAnnualReport.
TheGrouphasalsoformalisedasetofethicalstandardsthroughacodeofconduct,whichissubjecttoperiodicalreview,toensureDirectorspracticeethical,business-likeandlawfulconduct,includingproperuseofauthorityandappropriatedecorumwhenactingastheBoard.
TheBoardconductedassessmentsontheindependenceoftheIndependentDirectorsandissatisfiedthattheIndependentDirectorshavemetthe independencecriteriastated intheListingRequirements.Thereare four (4)outofseven(7)BoardmembersareIndependentDirectors.
AllBoardmembersfulfiltherequirementstoserveasDirectorsinnomorethanfive(5)publiclistedcompaniestoensuresufficienttimehasbeendevotedtocarryouttheirresponsibilities.
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PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)
BoardComposition(cont’d)
NoneoftheIndependentDirectorshasservedtheGroupexceedingacumulativetermofnine(9)years.Atpresent,theGroupdoesnothaveaformalpolicytolimitthetenureofindependentdirectortonine(9)years.However,theBoardismindfuloftherecommendationintheMCCGtoensureeffectivenessofIndependentDirectors.
TheBoardcomprisesBoardmemberswithdifferentgender,background,skillsetsandexperiencesinvariousindustries,whichenableT7Globaltomakeadifference.AbriefsummaryofthekeyskillsandexperienceheldbyeachDirectorisasfollows:
Name Title KeySkillsandExperience
DatukSeriDr.NikNorzulThaniBinNikHassanThani
ActingExecutiveChairman Legal, strategy, advisory and consulting, internationalaffairs,safetyandriskmanagement.
TanSriDatukSeriTanKeanSoon,J.P.
ExecutiveDeputyChairman More than30 yearsof oil andgas industry experience,leading various projects within upstream and downstream sector.
TanSamEng IndependentNon-ExecutiveDirector
Morethan30yearsofauditing,taxation,corporatefinanceandadvisoryexperiences.
Tan Kay Vin ExecutiveDirector Banking industry, corporate finance, aerospacemetalsurfacetreatment.
AdmiralTanSriDato’SeriPanglimaAhmadKamarulzamanBinHjAhmadBadaruddin(R)
IndependentNon-ExecutiveDirector
ServedtheRoyalMalaysianNavyandMalaysianArmedForces formore than 40 years. 16th Chief of RoyalMalaysianNavy.
CP(R)Dato’SriWanAhmadNajmuddinBinMohd
IndependentNon-ExecutiveDirector
AdvocateandSolicitorHighCourtofMalaya.RetiredfromRoyalMalaysiaPolice inMarch2019 asCommissionerof Policewith last position held asDirector ofCriminalInvestigationDepartment.
TanSriDato’SriKohKinLip,J.P.
IndependentNon-ExecutiveDirector
More than30 yearsof property andoil palmplantationindustryexperience.
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PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)
RolesandResponsibilitiesoftheBoard
TheBoardofT7Globalmeetsatleastfivetimesayear.Circularresolutionswillbepassedforresolvingadditionalmatters.
TheChairmanensuressmoothandeffectivefunctioningwithintheBoard.TheExecutiveDirectorsareresponsibleforoverseeingtheday-to-dayoperationsandaffairsoftheGroup.TheNon-ExecutiveDirectors,bothindependentandnon-independent,areresponsibleinprovidinginsights,unbiasedandindependentviews,adviceandjudgementtowardstheBoardandbringimpartialitytoBoarddeliberationsanddecisionmaking.TheNon-ExecutiveDirectorsplayavitalcheckandbalancerolebychallengingandscrutinisingtheManagement’sproposalsandmakerecommendationsinanobjectivemannertothedecision-makingprocessattheBoardlevel.
TheBoardisfullyawareofitsresponsibilitiesandhasadoptedkeyrolesinstrategisingthedirectionoftheGroupandhasassumedthefollowingdutiesindemonstratingthefollowingfiduciaryandleadershiproles:-
• Overseeingandmonitoringtheconductofbusiness,financialperformanceandanymajorcapital-intensiveinvestmentsoftheGroup;
• ReviewingandimplementingappropriatebudgetsandstrategicbusinessplansoftheGroup,monitoringcompliancewithapplicablefinancialreportingstandardsandintegrityandadequacyofallfinancialinformationdisclosure;
• Identifyingprincipalrisksandensuringtheimplementationofappropriateinternalcontrolsandmitigationmeasurestoeffectivelymonitorandmanagerisks;
• ReviewingtheadequacyandintegrityoftheinternalcontrolandmanagementinformationsystemsoftheGroup;• DevelopingacorporatecodeofconductwithintheGrouptoaddressanyconflictsofinterestrelatingtothestakeholders
oftheGroup,andestablishingandoverseeingthedevelopmentandimplementationofthecorporatecommunicationpolicieswithshareholders,stakeholdersandthepublic.
FunctionsoftheBoardandDelegationtoManagement
During2020,therewerefour(4)IndependentDirectorstoprovidevaluableopiniononT7Global’smatterssuchasstrategy,performance and key performance indicators ofmanagement team, resourcemanagement, riskmanagement, code ofconductsandethicsandothermatters.Day-to-dayoperationandmanagementaredelegatedbyActingExecutiveChairmanandExecutiveDeputyChairman.
TheBoardregularlycontrolsandreviewsitsdelegationandauthorityleveltoActingExecutiveChairmanandExecutiveDeputyChairman.Inordertopreventanyabuseofauthority,strictprocedureofauthorityanddifferentlevelsofindependencereviewarefollowed.Proceduresofauthorityareclearlysetupandalloperationdecisionsaremadeafterreview.
BoardLeadershipandResponsibilityinDischargingFiduciaryandLeadershipFunctions TheBoardistheultimateauthorityofT7Global,whichisresponsibleforauthorisingandreviewingalllong-termandshort-termbusinessandstrategicplansunlessthematterrequiresshareholders’approval.Specificgoalssetupwithkeyperformanceindicatorsformanagementtoimplementthoseplans.AlongwithIndependentDirector’sextensiveexperiencesandexpertiseinvariousfieldsofbusinessandindustries,themanagementstrivestoachievegoalssoastoprotectminorityshareholder’srights.ManagementreviewsallmattersreservedtothecommitteescomprisedsolelyofIndependentDirectors,andtheBoard.
CoRPoRate goVeRnanCe oVeRVieW stateMent
(Cont’D)
035
AR2020
www.t7global.com.my
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)
QualifiedandCompetentCompanySecretaries
TheBoardissupportedbyexperiencedandcompetentCompanySecretariesindischargingitsdutiesandresponsibilities.TheBoard receives regular advices, updates andnotifications from theCompanySecretaries to ensure compliancewithapplicablelaws,regulationsandcorporategovernancematters.TheCompanySecretariesattendandensurethatallBoardandBoardCommitteemeetingsareproperlyconvenedandalldeliberationsanddecisionsareproperlyminutedandkept.TheyarealsoresponsibleinensuringthatBoard’spoliciesandproceduresarefollowed,andtheapplicablestatutoryandregulatoryrequirementsareobserved.
ReviewofBoardCharter
ReviewofBoardCharterisconductedasperrequestinordertoensuretheBoardremainsconsistentwiththeBoard’sobjectivesandresponsibilitiesandanynewregulationsthatmayhaveanimpactonthedischargeoftheBoard’sresponsibilities,moreimportant,aligningwithT7Global’sbusinessstrategy.
TheBoardhadon29June2020reviewedandapprovedtherevisedBoardCharteroftheCompany.
TherevisedBoardCharteroftheCompanyisavailableforreferenceontheCompany’swebsiteatwww.t7global.com.my.
CodeofEthicsandConduct
TheCompanyestablishedappropriatestandardsofbusinessconductandethicalbehaviourtogoverntheexerciseofthedutiesandresponsibilitiesasDirectorsoftheCompanyinordertoupholdgoodcorporateintegrity.
TheCodeofEthicsandConductsetsoutthegeneralprinciplesandstandardsofbusinessconductandethicalbehaviourfortheDirectorsandemployeesoftheGroupintheperformanceandexerciseoftheirresponsibilitiesorwhenrepresentingtheGroupandincludestheexpectationofprofessionalismandtrustworthinessfromtheDirectorsandemployeesoftheGroup.
TheBoardhadon29June2020reviewedandapprovedtherevisedcodeofethicsandconductoftheCompany.
Anti-BriberyandAnti-CorruptionPolicy
TheBoardhasapprovedtheAnti-BriberyandAnti-CorruptionPolicyandProcedures,whichsetsouttheGroup’soverallpositionto prevent bribery and corruption practices in relation to its business activities in all forms and matters that might confront the Groupinitsday-todayoperations.
CORPORATE DISCLOSURE POLICY AND PROCEDURES
TheBoardhas,basedontherecommendationoftheMCCG,adoptedaCorporateDisclosurePolicyandProcedurestoensureaccurate,clear,timelyandcompletedisclosureofmaterialinformationnecessaryforinformedinvestingandtakereasonablestepstoensurethatallwhoinvestintheGroup’ssecuritiesenjoyequalaccesstosuchinformationtoavoidanindividualorselectivedisclosure.Thesaidpolicywillbereviewedandimprovedfromtimetotime.
Thesaidpolicyapplies toallDirectors,Management,officersandemployeesof theGroup.Thepolicyshallbeassessed,reviewedandupdatedannuallybythecorporatefinancedepartment,inaccordancewiththeneedsofT7GlobalandasandwhenthereareregulationchangesthatmayhaveanimpactontheBoardindischargingtheirresponsibilities.Anychangeand/orupdatestothepolicyshallberecommendedtotheBoardforapproval.
TheCorporateDisclosurePolicyandProceduresoftheCompanyisavailableforreferenceontheCompany’swebsiteatwww.t7global.com.my.
CoRPoRate goVeRnanCe oVeRVieW stateMent
(Cont’D)
036
T7 Global berhad RegistRation no. 200401023809 (662315-U)
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)
SUPPLY OF INFORMATION
TheBoardrecognisesthatthedecision-makingprocessishighlydependentonthequalityofinformationfurnished.Assuch,theBoardmembershavefullandunrestrictedaccesstoallinformationconcerningtheGroup’saffairs.PriortotheBoardandBoardCommitteemeetings,alltheBoardandBoardcommitteemembersareprovidedwiththeagendaandBoardpaperscontaininginformationrelevanttothebusinessofthemeetingtoenablethemtoobtainfurtherexplanations,wherenecessary,inordertobeproperlybriefedbeforethemeeting.Themeetingpapersincludinginformationonmajorfinancial,operationalandcorporatemattersoftheGroup.TheBoardmembersalsohaveaccesstotheadviceandservicesoftheCompanySecretaries,SeniorManagementandindependentprofessionaladvisersincludingtheexternalauditors.
Alongwithgoodgovernance practicesandinordertoenhancetransparencyandaccountability,theBoardhasestablishedandputinplacethefollowingpoliciesandprocedureswhicharemadeavailableatthecorporatewebsiteoftheGroup.Theseincludethefollowing:-
• CodeofEthicsandConduct• Shareholders’RightrelatingtoGeneralMeeting• WhistleblowingPolicyandProcedures• Anti-BriberyandAnti-CorruptionPolicy
Board Diversity
TheBoardrecognisesthatBoarddiversityisanessentialelementcontributingtothesustainabledevelopmentoftheGroupanditdoesnotdiscriminateonthebasisofethnicity,age,gender,nationality,politicalaffiliation,religiousaffiliation,maritalstatus,educationbackgroundorphysicalability.Thereisnospecifictargetinthecompositionintermsofgender,ageorethnicofitsBoardmembersormembersofSeniorManagement.
TheGroupvalueswoman’scontributiontotheeconomyandpromotestalentedwomentoManagementandleadershippositionsinoperations.Todate,thereisafemaleDirectorwithintheBoard,namelyMs.TanSamEngwhowasappointedtotheBoardsince23March2015.
TheNominationCommittee (“NC”)shalloversee theprocedures inaddition to theBoard recruitment,Boardperformanceevaluationandsuccessionplanningprocesses.WeshallalwaysaimtoprovideasuitableworkingenvironmentthatisfreefromharassmentanddiscriminationinordertoattractandretainwomenparticipationintheBoard,andalsotohavediversityinethnicityandageonboardaswellasworkforce.
AsatthedateofthisAnnualReport,thediversityintherace/ethnicityoftheexistingDirectorsisasfollows:-
Race/Ethnicity Gender
Malay Chinese Indian Total Male Female Total
NumberofDirectors 4 3 0 7 6 1 7 TheexistingDirectors’agedistributionfallingwithintherespectiveagegroupisasfollows:
AgeGroup(Years) <51 51-60 >61 Total
NumberofDirectors 1 2 4 7
CoRPoRate goVeRnanCe oVeRVieW stateMent
(Cont’D)
037
AR2020
www.t7global.com.my
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)
SUPPLY OF INFORMATION (CONT’D)
WorkforceDiversity
TheGroupiscommittedtoadiverseandinclusiveculturewhichisessentialtotheGroup’sfuturegrowth.TheGroup’sgenderandrace/ethnicitydiversityaremadeupofthefollowing:-
Race/Ethnicity
Malay Chinese Indian Other
70% 21% 4% 5%
TheGroup’sworkforcediversityintermsofageismadeupofthefollowing:-
AgeGroup(Years)
21-30 31-40 41-50 Above50
32% 49% 15% 4%
Board Meetings
TheattendancerecordofindividualDirectorsattheBoardmeetingsforthefinancialyearended31December2020isdetailedbelow:-
Name Attendance
DatukSeriDr.NikNorzulThaniBinNikHassanThani 5/5
TanSriDatukSeriTanKeanSoon,J.P. 5/5
TanSamEng 5/5
Tan Kay Vin 5/5
AdmiralTanSriDato’SeriPanglimaAhmadKamarulzamanBinHjAhmadBadaruddin(R) 5/5
CP(R)Dato’SriWanAhmadNajmuddinBinMohd 5/5
TanSriDato’SriKohKinLip,J.P.(Appointedon2September2020) 2/2
TheBoardissatisfiedwiththelevelofcommitmentgivenbytheDirectorstowardsfulfillingtheirrolesandresponsibilitiesasDirectors.This,amongstothers,isevidencedbytheattendancerecordoftheDirectorsatBoardmeetings.
Theminimum50%attendancerequirementattheBoardmeetingsasstipulatedintheListingRequirementshasbeencompliedwith.
CoRPoRate goVeRnanCe oVeRVieW stateMent
(Cont’D)
038
T7 Global berhad RegistRation no. 200401023809 (662315-U)
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)
DIRECTOR’S TRAINING
AllDirectorsoftheGrouphavecompletedtheMandatoryAccreditationProgramme(“MAP”)byBursaMalaysiaSecurities.TheGroupdoesnothaveaformaltrainingprogramfornewDirectorbuttheyreceivebriefingsandupdatesontheGroup’sbusinesses,operations,riskmanagement,internalcontrol,financeandrelevantlegislation,rulesandregulations.ThebriefingsandupdatesaimatcommunicationtothenewlyappointedDirectors,theGroup’svisionandmission,itsphilosophyandnatureofthebusiness,currentissueswithintheGroup,thecorporatestrategyandtheexpectationoftheGroupconcerninginputoftheDirector.
TheDirectorsareencouragedtoattendvariousexternalandinternalprofessionalcourses,briefings,andseminarsrelevanttotheGrouptokeepthemselvesabreastwithlatestdevelopmentintheindustry,regulatoryupdatesorchangesandtoenhancetheirskillsandknowledge.
TheBoardacknowledgesthattheDirectorsthroughvariedexperiencesandqualificationsprovidedthedesiredcontributionandsupporttothefunctionsoftheBoard.Directors’trainingisanon-goingprocessasDirectorsrecognisetheneedtocontinuallydevelopandrefreshtheirknowledgeandskills,andtoupdatethemselvesonmarketdevelopment.
AlltheDirectorsareencouragedtoattendcontinuouseducationprogrammesandseminarstokeepabreastofrelevantchangesinlawsandregulationsandthedevelopmentintheindustry.
Additionally,theDirectorsarealsoupdatedonacontinuingbasisonnewand/orrevisedrequirementstotheListingRequirementsasandwhenthesamewereadvisedbytheBursaMalaysiaSecurities.TheDirectorswillcontinuetoundergootherrelevanttrainingprogrammes,conferencesandseminarsthatmayfurtherenhancetheirskillsandknowledge.TheindividualDirectorsaretoevaluateanddeterminerelevantprogrammes,seminars,briefingsordialoguesavailablethatwouldbestenablethemtoenhancetheirknowledgeandcontributionstowardstheGroup.
Duringthefinancialyearunderreview,thetrainingrecordsoftheindividualDirectorsareasfollows:-
No. Name Title Courses
1 DatukSeriDr.NikNorzulThaniBinNikHassanThani
ActingExecutiveChairman
CorporateLiabilityProvisiononcorruption–MACCAct2009
IslamicFinanceforBoardofDirectorProgramme
2 TanSriDatukSeriTanKeanSoon,J.P.
ExecutiveDeputyChairman
CorporateLiabilityProvisiononcorruption–MACCAct2009
3 TanSamEng IndependentNon-ExecutiveDirector
CorporateLiabilityProvisiononcorruption–MACCAct2009
SeminarPercukaianKebangsaan2020(LHDN)
4 Tan Kay Vin ExecutiveDirector CorporateLiabilityProvisiononcorruption–MACCAct2009
5 AdmiralTanSriDato’SeriPanglimaAhmadKamarulzamanBinHjAhmadBadaruddin(R)
IndependentNon-ExecutiveDirector
StakeholderEngagement–“StakeholderPrimacy: IncreasedEmphasisonESG”
Digitalisation - “ReviewCompetitive Strategies using AI: ABoard’sPerspective”
6 CP(R)Dato’SriWanAhmadNajmuddinBinMohd
IndependentNon-ExecutiveDirector
CorporateLiabilityProvisiononcorruption–MACCAct2009
7 TanSriDato’SriKohKinLip,J.P.
IndependentNon-ExecutiveDirector
Directors’ContinuingEducationProgramme2020:Module1:DigitallypoweredF&BplayerModule2:Geopoliticalrisklandscape
CoRPoRate goVeRnanCe oVeRVieW stateMent
(Cont’D)
039
AR2020
www.t7global.com.my
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)
BOARD COMMITTEE
TheBoardhasestablisheddifferentBoardcommitteestoassisttheBoardindischargingitsduties.Thesecommitteesareasfollows:-
Audit and Risk Management Committee
ThecompositionoftheAuditandRiskManagementCommittee,itsfunctionandasummaryofitsactivitiesaresetoutintheAuditandRiskManagementCommitteeReportofthisAnnualReport.
Nomination Committee
TheBoardrecognisestheimportanceinhavingaBoardwithappropriatemixofskills,competenciesandexpertise,aswellasthefundamentaltohowpoliciesandstrategiesareshapedandcontributetothequalityofdecisionmaking.
Therefore,theformalproceduresfortermofreferenceweresetupbyNCasfollows:-
• Nomination,selection,electionandsuccessionpoliciesformembersoftheBoardandBoardCommitteeshavebeensetupaligningwithT7Global’soverallcorporatestrategy
• Directorappointmentcriteriaevaluation• ExtensiveassessmentisconductedfornewDirectorcandidates,whichincludesreferencecheck,skillssetandinterviews• ReviewannuallytheoverallcompositionoftheBoardintermsofsizeandskills,balancebetweenExecutiveDirectors
andNon-ExecutiveDirectors,independenceandmixofothercorecompetenciesrequiredfortheGroup• AssessannuallytheeffectivenessoftheBoardandseveralkeypersonnelintheManagementasawhole• OverseeingBoardinductionandtrainingprogrammes
TheNCmeetsatleastonceineachfinancialyearandadditionalmeetingsmaybearrangedatanytimewhennecessary.
TheNCheldmeetingsforthereviewofnewnominee(s)proposedtobeappointedtotheBoard,asExecutiveDirector(s)andasIndependentDirector(s)oftheGroupduringthefinancialyearthenendedandalsoreviewedtheexistingDirectorsretiringbyrotationpursuanttoClause123oftheCompany’sConstitutionandthosewhoareeligibleforre-electionattheforthcomingAGM.
ThecompositionoftheBoardhasbeenreviewedbytheNCandtheNCisoftheviewthatthecurrentBoardcompositionisappropriateandeffective,takingintoaccountthenatureandscopeoftheGroup’soperations.TheBoardissatisfiedthatthecurrentBoardcompositionfairlyreflectstheinterestsoftheminorityshareholdersintheGroupandprovidestheappropriatebalanceandsizetogoverntheGroupeffectively.TheBoardcomprisespersonswhoasagroupprovidetherelevantcorecompetenciesandmixofskills intheareasofoilandgas,financial, legalandbusinesstomeettheGroup’srequirements.TheDirectors’objectivejudgementoncorporateaffairsandcollectiveexperienceandknowledgeareinvaluabletotheGroup.
ThecompositionoftheNCoftheCompanyandthedetailsofattendanceofmeetingsduringthefinancialyearunderreviewareasfollows:-
Name Designation/Directorate Attendance
AdmiralTanSriDato’SeriPanglimaAhmadKamarulzamanBinHjAhmadBadaruddin(R)
ChairmanIndependentNon-ExecutiveDirector
1/1
CP(R)Dato’SriWanAhmadNajmuddinBinMohd MemberIndependentNon-ExecutiveDirector
1/1
* During the financial year ended 31 December 2020, there was one (1) NC Meeting held on 28 February 2020. All the existing NC members were appointed as NC members on 28 June 2019.
CoRPoRate goVeRnanCe oVeRVieW stateMent
(Cont’D)
040
T7 Global berhad RegistRation no. 200401023809 (662315-U)
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)
BOARD COMMITTEE (CONT’D)
Nomination Committee (cont’d)
ThesummaryofactivitiescarriedoutbytheNCduringthefinancialyearareasfollows:
• ReviewedandassessedthesuitabilityofcandidateforappointmentasDirector;• ReviewedthecurrentcompositionoftheBoard,mixofskills,experience,genderdiversityandotherqualitiesoftheBoard;• ReviewedtheassessmentoftheeffectivenessoftheBoardasawhole,theBoardCommittees,thecontributionand
performanceofeachindividualDirectorsandthetermofofficeandeffectivenessoftheAuditandRiskManagementCommitteeasawhole;
• ReviewedandrecommendedtotheBoardonthere-electionofDirectorsretiringattheAGM;• ReviewedthemeetingsattendanceoftheBoardandmembersoftheBoardCommitteesandthesufficiencyoftime
commitmentoftheDirectorsindischargingtheirrolesandresponsibilitiesintheCompany;• ReviewedthetrainingprogrammesattendedbytheBoardandthetrainingneedsoftheDirectorsforthefinancialyear
ending31December2020.• ReviewedthelengthofserviceofeachIndependentNon-ExecutiveDirectorpursuanttoPractice4.2oftheCodeand
toassesstheindependenceoftheIndependentNon-ExecutiveDirectors.
ThetermsofreferenceoftheNCisavailableforreferenceontheCompany’swebsiteatwww.t7global.com.my.
Remuneration Committee (“RC”)
TheBoardhasestablishedaremunerationpolicyandproceduretofacilitatetheRCtoreview,considerandrecommendtotheBoardthelevelsandelementsofremunerationofDirectorswithexecutivefunctionsandtheSeniorManagement.TheBoardasawhole recommends toshareholders theallowancesof theNon-ExecutiveDirectorsand theExecutiveDirectorsafterconsideringtherecommendationoftheRC.
TheRCmeetsatleastonceayearineachfinancialyearandadditionalmeetingsmaybecalledanytimewhennecessary.
ThecompositionoftheRCoftheCompanyandthedetailsofattendanceofmeetingsduringthefinancialyearunderreviewareasfollows:-
Name Designation/Directorate Attendance
CP(R)Dato’SriWanAhmadNajmuddinBinMohd ChairmanIndependentNon-ExecutiveDirector
1/1
TanSamEng MemberIndependentNon-ExecutiveDirector
1/1
TheremunerationpackagesoftheExecutiveDirectorsareapprovedbytheBoard.TheDirectors’remunerationschemeisstructuredtoattract,retainandmotivatetheminordertoachievesustainablegrowthandbusinesssuccess.
TheBoardreviewstheremunerationoftheExecutiveDirectorsannuallysubjecttotheirrespectiveservicecontractswherebytherespectiveEDsarenotallowedtoinvolveinthediscussionorcontributetoanydecisionmakingontheirownremunerationpackage.
CoRPoRate goVeRnanCe oVeRVieW stateMent
(Cont’D)
041
AR2020
www.t7global.com.my
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)
BOARD COMMITTEE (CONT’D)
Remuneration Committee (“RC”) (cont’d) TheBoardbelievesthatappropriateandcompetitiveremunerationisimportanttoattract,retainandmotivateDirectorsofthenecessarycalibre,expertiseandexperiencetoleadtheGroup.Inlinewiththisphilosophy,remunerationfortheExecutiveDirectorsisalignedtoindividualandcorporateperformance.ForNon-ExecutiveDirectors,thefeesaresetbasedontheresponsibilitiesshoulderedbytherespectiveDirectors.IndividualDirectorsdonotparticipateindeterminingtheirownremunerationpackage.
TheRCrecommendspolicyforassessingcompensationpackageforExecutiveDirectors.ItalsoreviewsandrecommendstotheBoardforapprovals,theremunerationpackagesandotheremploymentconditionsfortheExecutiveDirectors.
TheremunerationofExecutiveDirectorsismadeupofbasicsalaries,monetaryincentivesandfringebenefits;andislinkedtotheachievementofcorporateperformancetargets.SalariesforExecutiveDirectorsconsistofbothfixed(i.e.basesalary)andvariable(performance-basedincentive)remunerationcomponents.TheremunerationlevelsofExecutiveDirectorsarestructuredtoenabletheCompanytoattractandretainthemostqualifiedExecutiveDirectors.TheCompanymayprovidecompetitivebenefitstoExecutiveDirectors,suchasafullyexpensedcarorcashalternativeinlieuofcar,companydriver,fuelexpenses,privatemedicalinsuranceandlifeinsurance.Allowancesrelatingtobusinessexpenses(i.e.entertainmentandtravel)incurredarereimbursedsuchthatnoadditionalcompensationisgiventotheExecutiveDirectors.
TheremunerationofNon-ExecutiveDirectorsismadeupofDirectors’fees,meetingallowancesandotherbenefits.ThelevelofremunerationforNon-ExecutiveDirectorsshallreflecttheexperienceandlevelofresponsibilitiesundertakenbytheNon-ExecutiveDirectorconcerned.TheremunerationofaNon-ExecutiveDirectorsshallandisnotbasedoncommission,percentageofprofits,orturnover.Non-ExecutiveDirectorsarenotentitledtoreceiveperformance-basedbonusesnorparticipateinshort-termand/orlong-termincentiveplans.TheremunerationofNon-ExecutiveDirectorsisreviewedbytheRCandtheBoardannually.
ThedetailsoftheremunerationofDirectorsduringthefinancialyearended31December2020areasfollows:-
Company
Directors’Fees (RM)
Salaries (RM)
Allowance(RM)
Benefits-in-kind
(RM)
OthersEmoluments
(RM)Total(RM)
IndependentNon-ExecutiveDirector
TanSE 59,250 – – – – 59,250
TSK 56,000 – – – – 56,000
DSW 59,250 – – – – 59,250
TSR 17,875 – – – – 17,875
*MN 15,000 – – – – 15,000
Subtotal 207,375 – – – – 207,375
Executive Director
DSNik 150,000 – – – – 150,000
TSTan – – – – – –
Tan KV – – – – – –
Subtotal – – – – – –
Total 357,375 – – – – 357,375
CoRPoRate goVeRnanCe oVeRVieW stateMent
(Cont’D)
042
T7 Global berhad RegistRation no. 200401023809 (662315-U)
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)
BOARD COMMITTEE (CONT’D)
Remuneration Committee (“RC”) (cont’d)
Group
Directors’Fees (RM)
Salaries (RM)
Allowance(RM)
Benefits-in-kind
(RM)
OthersEmoluments
(RM)Total(RM)
IndependentNon-ExecutiveDirector
TanSE 59,250 – – – – 59,250
TSK 56,000 – – – – 56,000
DSW 59,250 – – – – 59,250
TSR 17,875 – – – – 17,875
*MN 15,000 – – – – 15,000
Subtotal 207,375 – – – – 207,375
Executive Director
DSNik 267,500 – – – – 267,500
TSTan – 902,500 – – 267,900 1,170,400
Tan KV – 434,000 117,000 – 126,120 677,120
Subtotal 267,500 1,336,500 117,000 – 394,020 2,115,020
Total 474,875 1,336,500 117,000 – 394,020 2,322,395
Notes:
TanSE - TanSamEngTSK - AdmiralTanSriDato’SeriPanglimaAhmadKamarulzamanBinHjAhmadBadaruddin(R)DSW - CP(R)Dato’SriWanAhmadNajmuddinBinMohdDSNik - DatukSeriDr.NikNorzrulThaniBinNikHassanThaniTSTan - TanSriDatukSeriTanKeanSoon,J.P.TanKV - TanKayVinTSR - TanSriDato’SriKohKinLip,J.P.(Appointedon2September2020)*MN - MohdNoorBinSetapa(Resignedon30June2020)
CoRPoRate goVeRnanCe oVeRVieW stateMent
(Cont’D)
043
AR2020
www.t7global.com.my
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)
BOARD COMMITTEE (CONT’D)
Share Issuance Scheme Committee (“SISC”)
TheSISCshallbevestedwithsuchpowersanddutiesasareconferreduponitbytheBoardincludingthefollowingpowers:-
• ToadministertheShareIssuanceScheme(“SIS”)andtograntshareoptionsinaccordancetotheBy-Laws;• TorecommendtotheBoardtoestablish,amend,andrevokeBy-Laws,rulesandregulationstofacilitatetheimplementation
oftheSIS;• ToconstructandinterprettheprovisionshereofinthebestinterestoftheGroup;and• Generally,toexercisesuchpowersandperformsuchactsasaredeemednecessaryorexpedienttopromotethebest
interestoftheGroup.
TheSISCmembersareasfollows:-
Name Designation
DatukSeriDr.NikNorzrulThaniBinNikHassanThani MemberActingExecutiveChairman
TanSriDatukSeriTanKeanSoon,J.P. MemberExecutiveDeputyChairman
PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT
Audit and Risk Management Committee
TheAuditandRiskManagementCommitteeassiststheBoardinreviewingandscrutinisingtheinformationintermsoftheappropriateness,accuracyandcompletenessofdisclosureandinensuringthattheGroup’sfinancialstatementscomplywithapplicablefinancialreportingstandards.TheAuditandRiskManagementCommitteereviewsandmonitorstheaccuracyandintegrityoftheGroup’squarterlyandannualfinancialstatementsandsubmitsthesestatementstotheBoardforapprovalandreleasewithinthestipulatedtimeframe.
AssessmentofExternalAuditors
In linewithPractice8.3oftheMCCG,theAuditandRiskManagementCommitteehasassessedthesuitability,objectivityandindependenceoftheExternalAuditors.TheassessmentisconductedonyearlybasisbytheAuditandRiskManagementCommittee,usingtheprescribedExternalAuditors’EvaluationForm,withemphasisofevaluationbasedonthecompetence,adequacyofexperienceandresources,qualityoftheauditperformances,independenceandobjectivityoftheExternalAuditors,reasonablenessofauditfeesandcomparisonofauditandnon-auditfees.
TheCompany’sExternalAuditorsareinvitedtoattendtheAuditandRiskManagementCommitteemeetingswhendeemednecessary.TheExternalAuditorsaretomeetwiththeARMCwithoutthepresenceoftheManagementwheneverdeemednecessary.
CoRPoRate goVeRnanCe oVeRVieW stateMent
(Cont’D)
044
T7 Global berhad RegistRation no. 200401023809 (662315-U)
PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT (CONT’D)
AssessmentofExternalAuditors(cont’d)
TheAuditandRiskManagementCommittee,aspartofitsreview,hasobtainedassurancefromtheExternalAuditorsconfirmingthattheyhaveinplacepoliciesonrotationforpartnersofanauditengagementtoensureobjectivity,independenceandintegrityof the audit and declared their independence throughout the conduct of the audit engagement in accordance with the terms ofallrelevantprofessionalandregulatoryrequirements.
Annually,theAuditandRiskManagementCommitteealsoreviewstheappointment,performanceandremunerationoftheExternalAuditorsincludingauditandnon-auditservices,toensurethattheindependenceandobjectivityoftheExternalAuditorsarenotcompromised,beforerecommendingthemtotheshareholdersforre-appointmentintheAGM.
TheAuditandRiskManagementCommitteewassatisfiedwiththeperformance,suitabilityandindependenceoftheExternalAuditorsoftheCompanybasedonthequalityofservicesandsufficiencyofresourcestheyprovidedtotheGroup,intermsofthefirmandtheprofessionalemployeesassignedtotheaudit.
RiskManagementandInternalControlFramework
TheBoardacknowledgesthatriskmanagementisanintegralpartofgoodmanagementpractices.Riskisinherentinallbusinessactivities.ItisnottheGroup’sobjectivetoeliminaterisktotally,buttoreview,prioritiseandmanagerisksinvolvedinalltheGroup’sactivitiesandtobalancebetweenthecostofmanagingandtreatingrisks,andtheanticipatedbenefitsthatwillbederived.
The risk management and internal control functions were assumed and overseen by the Audit and Risk Management Committee oftheCompany.TheManagementisresponsibleforimplementingBoardapprovedpoliciesandproceduresonriskmanagementbyidentifyingandevaluatingrisks,andmonitoringtherisksvis-a-visachievementofbusinessobjectiveswithintheriskappetiteparameters.
TheBoardhasestablishedaninternalauditfunctionwhichiscurrentlyoutsourcedtoaprofessionalfirm.Functionally,theInternalAuditors report to the Audit and Risk Management Committee directly and they are responsible for conducting reviews and appraisalsoftheeffectivenessofthegovernance,internalcontrolsandprocesseswithintheGroup.
FurtherdetailsoftheGroup’sstateofriskmanagementandinternalcontrolsystemsarereportedintheStatementonRiskManagementandInternalControlsetoutinthisAnnualReport.
PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS
RELATIONSHIP WITH SHAREHOLDERS
T7Globalvalueseveryshareholder.TheBoardacknowledges it isaneed toestablishhighquality,ongoingdialogueandcommunicationwithshareholdersandmaintaintrust.Therefore,theshareholdercommunicationpolicywascreatedtoserveasaguideandmanagementofshareholder’srequirements.
Informationisdisseminatedthroughthefollowingchannels:-
• AnnualReport;• Circulars/Statementtoshareholders;• VariousdisclosuresandannouncementtoBursaMalaysiaSecurities;and• Company’swebsiteatwww.t7global.com.my.
CoRPoRate goVeRnanCe oVeRVieW stateMent
(Cont’D)
045
AR2020
www.t7global.com.my
PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS (CONT’D)
RELATIONSHIP WITH SHAREHOLDERS (CONT’D)
AccesstoInformation
Inaddition,shareholdersandinvestorscanhaveachannelofcommunicationwiththeGroupCorporateFinancetodirectanyqueriesandprovidefeedbacktotheGroup.
Email:t7@t7global.com.my
Thestakeholdersmayobtainup-to-dateinformationaboutT7GlobalBerhadbyassessingthewebsite,http://www.t7global.com.myor by accessingBursaMalaysiaSecurities’website http://www.bursamalaysia.com. Information requiredby theshareholderssuchasfinancialresults,boardcharter,codeofethicsandconduct,andsooncanbefoundfromthecorporate’swebsite.Theshareholdersareinformedoftheirrightstodemandforpollpriortothecommencementofeachgeneralmeeting.
ConductofGeneralMeetings
Themain forumofdialoguewithshareholdersof theCompany is theCompany’sAGM.TheAGMrepresents theprimaryplatformforinteractionsbetweenshareholders,DirectorsandSeniorManagementoftheCompany.TheCompanyprovidesinformationintheNoticeofAGM,whicharesenttoshareholdersatleast28dayspriortotheAGM,onthedetailsofgeneralmeeting,resolutionstobetabledforapprovalandshareholders’entitlementtoattendgeneralmeeting,andtheirrighttoappointproxy(ies)toencourageshareholders’participationatgeneralmeeting.
AllDirectors,SeniorManagementandtheExternalAuditorswillattendthegeneralmeetings.Duringthegeneralmeetings,shareholderswhoattendthegeneralmeetingsareencouragedandgivensufficientopportunityaswellastimebytheBoardtoraisequestionspertainingtotheAnnualReport,resolutionsbeingproposedandthebusinessoftheCompanyortheGroupingeneralpriortoseekingapprovalfrommembersandproxiesontheresolutions.AllDirectorsandthechairofeveryBoardCommittees,aswell asSeniorManagement,whereappropriate,willprovide feedbacks,answersandclarifications to thequestionsraisedfromtheshareholdersduringthegeneralmeetings.
InlinewithParagraph8.29AoftheListingRequirementsontherequirementforpollvotingforanyresolutionsetoutinthenoticeofgeneralmeetings,attheSixteenthAGMheldlastyear,pollvotingwasusedtofacilitatethevotingprocessforresolutionstabled.Anindependentscrutineerwasalsoappointedtoscrutinisethepollingprocess.
CoRPoRate goVeRnanCe oVeRVieW stateMent
(Cont’D)
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T7 Global berhad RegistRation no. 200401023809 (662315-U)
stateMent on dIreCTorS’ reSPoNSIbIlITYFoR PRePaRing tHe FinanCiaL stateMents
TheDirectorsareresponsibleforensuringthattheannualfinancialstatementsoftheGroupandoftheCompanyaredrawnupinaccordancewiththeapplicableapprovedMalaysianFinancialReportingStandards(MFRSs),InternationalFinancialReportingStandards(IFRSs)andtheprovisionsoftheCompaniesAct2016andtheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad.TheannualfinancialstatementsarepreparedwithreasonableaccuracyfromtheaccountingrecordsoftheGroupandCompanysoastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat31December2020,andtheirfinancialperformanceandcashflowsforthefinancialyearended.
Inthepreparationoftheannualfinancialstatements,theDirectorshavealso:-
• Adoptedtheappropriateandrelevantaccountingpoliciesandappliedthemconsistently;• Madejudgmentsandestimatesthatarereasonableandprudent;and• AssessedtheGroup’sandtheCompany’sabilitytocontinueasgoingconcern,andconfirmedthattheannualfinancial
statementsarepreparedusingthegoingconcernbasisofaccounting.
TheDirectorsarealsoresponsiblefor:-
• Ensuring that theGroupand theCompanykeepproperaccountingandother records toenable theexplanationoftransactionsandpreparationoffinancialstatements;and
• TakingthenecessarystepstoensureappropriatesystemsandinternalcontrolsareinplacetosafeguardtheassetsoftheGroupandoftheCompany,aswellastopreventanddetectfraudandanyotherirregularities.
TheDirectorsconfirmedthattheyhavecompliedwiththeaboverequirementsfortheannualauditedfinancialstatementsforthefinancialyearended31December2020.
ThisstatementonDirectors’responsibilityforpreparingthefinancialstatementsismadeinaccordancewitharesolutionpassedbytheDirectorsattheBoardofDirectors’Meetingheldon8April2021.
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aDDitionaL CoMPLianCe INForMaTIoN
a) AuditandNon-AuditServices
Forthefinancialyearended31December2020,GrantThorntonMalaysiaPLT,theexternalauditorshasrenderedcertainauditandnon-auditservicestotheCompanyandtheGroup,abreakdownofwhichislistedasbelowforinformation:-
Company(RM)
Group(RM)
Audit services rendered
Statutoryauditinrespectofthefinancialyearended31December2020 43,000 287,700
Non-auditservicesrendered
ReviewoftheStatementonRiskManagementandInternalControl forAnnualReport2020 10,000 10,000
Others 5,660 51,265
Total 58,660 348,965
b) MaterialContracts
TherewasnomaterialcontractenteredintobytheGroupinvolvingtheinterestsoftheDirectors,ChiefExecutivewhoisnotaDirectorormajorshareholders,eitherstillsubsistingattheendofthefinancialyearended31December2020or,ifnotthensubsisting,enteredintosincetheendofthepreviousfinancialyear.
c) RecurrentRelatedPartyTransactionsofaRevenueorTradingNature(“RRPT”)
TheinformationonRRPTforthefinancialyearunderreviewareasfollows:-
Transacting CompanywithinT7GlobalGroup
TransactingParty NatureofTransaction
InterestedRelatedParties
Aggregate ValueoftheTransactionsconductedpursuant
to the shareholdermandate during
theFY2020(RM)
TanjungOffshoreServicesSdnBhd(“TOS”)
MarineEnergy
Purchasing products and servicesfromMarineEnergyforvalves,pumpsandprocesssystems.TOStoprovideintegratedservicestoMarineEnergyforprojectmanagement,procurement,maintenance and commissioningworks
DSW(e)
MarineEnergy(f)
33,120
CrystalZVS
Rentingofofficespaceof5,274squarefeetatLotsC-L16-01,02,03and3A,KLTrillion,No.338,JalanTunRazak,50400KualaLumpurfromCrystalZVSforaperiodof3yearswithrentalpayable on a monthly basis
TKS(a)
Tan Kay Vin(b)
CrystalZVS(h)
531,612
048
T7 Global berhad RegistRation no. 200401023809 (662315-U)
c) RecurrentRelatedPartyTransactionsofaRevenueorTradingNature(“RRPT”)(cont’d)
Transacting CompanywithinT7GlobalGroup
TransactingParty NatureofTransaction
InterestedRelatedParties
Aggregate ValueoftheTransactionsconductedpursuant
to the shareholdermandate during
theFY2020(RM)
TanjungOffshoreServicesSdnBhd(“TOS”)(cont’d)
BlueOcean Rentingofofficespaceof6,567squarefeetatLotsC-L16-05,06,07and08atKLTrillion,No.338,JalanTunRazak50400KualaLumpurandfromBlueOceanforaperiodof3yearswithrentalpayableon a monthly basis
TKS(a)
PuanSriShirleyLawSiongHiong(c)
Tan Kay Zhuin(g)
BlueOcean(i)
661,958
CPEnergy PurchasingfromCPEnergyofindustrialequipment,machineries,sparepartsandlubricantsoilandrentingofoffice
TKS(a)
Tan Kay Vin(b)
PuanSriShirleyLawSiongHiong(c)
CPEnergy(d)
3,310,272
T7GastecSdnBhd
MarineEnergy
SellingtoandpurchasingproductsandservicesfromMarineEnergyforvalves,pumpsandprocesssystems.T7Gtoprovideengineeredproducts,procurementservices,designandfabricationworks for processing packagestoMarineEnergy.
DSW(e)
MarineEnergy(f)
1,924,175
CPEnergy SellingtoCPEnergyofindustrialequipment,machineries,sparepartsandlubricantsoil.T7Gtoprovideengineeredproducts,designandfabricationworks for processingpackagestoCPEnergy.
TKS(a)
Tan Kay Vin(b)
PuanSriShirleyLawSiongHiong(c)
CPEnergy(d)
199,500
T7WenmaxSdnBhd
MarineEnergy
SellingtoandpurchasingproductsandservicesfromMarineEnergyforvalves,pumpsandprocesssystems.T7Wtosellproductsandservicesforprocessingpackages,CPCpump,hosesandprocessingpackagestoMarineEnergy.
DSW(e)
MarineEnergy(f)
937,332
CPEnergy SellingtoandpurchasingfromCPEnergyofindustrialequipment,machineries,sparepartsandlubricants oil
TKS(a)
Tan Kay Vin(b)
PuanSriShirleyLawSiongHiong(c)
CPEnergy(d)
3,376,528
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c) RecurrentRelatedPartyTransactionsofaRevenueorTradingNature(“RRPT”)(cont’d)
Transacting CompanywithinT7GlobalGroup
TransactingParty NatureofTransaction
InterestedRelatedParties
Aggregate ValueoftheTransactionsconductedpursuant
to the shareholdermandate during
theFY2020(RM)
T7MarineSdnBhd
MarineEnergy
SellingtoandpurchasingproductsandservicesfromMarineEnergyforvalves,pumpsandprocesssystems.T7Mtoprovidemarineservices related work to MarineEnergyie.installation,commissioningand maintenance of parts andequipmentforMarineEnergy.
DSW(e)
MarineEnergy(f)23,270
T7ServicesSdnBhd
MarineEnergy
SellingtoandpurchasingproductsandservicesfromMarineEnergyforvalves,pumpsandprocesssystems.T7Stoprovideprojectmanagement,procurementandengineeringworktoMarineEnergy.
DSW(e)
MarineEnergy(f)NIL
CPEnergy SellingtoandpurchasingfromCPEnergyofindustrialequipment,machineries,sparepartsandlubricantsoil.T7Stoprovideprojectmanagement,procurementandengineeringworktoCPEnergy.
TKS(a)
Tan Kay Vin(b)
PuanSriShirleyLawSiongHiong(c)
CPEnergy(d)
21,108,581
T7KemuncakSdnBhd
CPEnergy Providing services (including butnotlimitedtooilandgas),sellingtoandpurchasingfromCPEnergyofindustrialequipment,machineries,spare parts and lubricants oil
TKS(a)
Tan Kay Vin(b)
PuanSriShirleyLawSiongHiong(c)
CPEnergy(d)
NIL
Natureofrelationship
(a) TanSriDatukSeriTanKeanSoon,J.P.(“TKS”),aDirectorandMajorShareholderofT7,isadirectorandshareholderofCPEnergy&ServicesSdnBhd(“CP Energy”)andCrystalZVSHoldingsSdnBhd(“Crystal ZVS”).
(b) TanKayVin,asonofTKS,isaDirectorofT7aswellasadirectorandshareholderofCPEnergyandCrystalZVS.(c) PuanSriShirleyLawSiongHiong,thespouseofTKS,isadirectorandshareholderofCPEnergyandBlueOcean
LegacySdnBhd(“Blue Ocean”).(d) CPEnergy,acompanyconnectedtoTKSbyvirtueofhim,hisspouseandTanKayVin’sinterestsinCPEnergy,
pursuanttoSection8oftheAct.(e) CP(R)Dato’SriWanAhmadNajmuddinBinMohd(“DSW”),aDirectorofT7, isadirectorandshareholderof
MarineEnergySdnBhd(“Marine Energy”).(f) MarineEnergy,acompanyconnectedtoDSWbyvirtueofhisinterestinMarineEnergy,pursuanttoSection8of
theAct.(g) TanKayZhuin,asonofTKS,isadirectorandshareholderofBlueOcean.(h) CrystalZVS,acompanyconnectedtoTKSbyvirtueofhisandTanKayVin’sinterestinCrystalZVS,pursuantto
Section8oftheAct.(i) BlueOcean,acompanyconnectedtoTKSbyvirtueofhisspouseandTanKayZhuin’sinterestinBlueOcean,
pursuanttoSection8oftheAct.
aDDitionaL CoMPLianCe inFoRMation
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T7 Global berhad RegistRation no. 200401023809 (662315-U)
d) Utilisationofproceedsraisedfromcorporateproposals
TheCompanyhadonthefollowingdatesannouncedprivateplacementstotalling132,275,800newordinaryshares(“Placement Shares”) (“Private Placement”) and the listing of and quotation for the said ordinary shares were approved byBursaMalaysiaSecuritiesBerhad:-
DateofAnnouncement
No.ofPlacement
Shares
Issue Pricepershare
(RM)
Gross ProceedsRaised
(RM)Shareholders’
approval
5March2020 30,275,800 0.43 13,018,594 GeneralMandateobtained at
AnnualGeneralMeetingon26June2019
13January2021 102,000,000 0.365 37,230,000 SpecialMandateobtained at
ExtraordinaryGeneralMeetingon17
November2020
The details of the status of utilisation of proceeds raised as at the latest practicable date were as follows:
PrivatePlacementof30,275,800ordinaryshares
ProposedUtilisation
Actual Utilisation
Balancetobe
utilised
Intended Timeframe
forUtilisation
Workingcapitalforprojects: RM’000 RM’000 RM’000
The provision of CPC pump part toSabahShellBerhadand/orSarawakShellPetroleumCompany. 3,237 – 3,237
Within12months
The provision of integrated well servicesforwellintervention,workoverandabandonment for Vestigo PetroleumSdnBhd. 3,238 3,238 –
Within12months
Theprovisionofthird-partymanpowerservicesforMDCOil&Gas(SK320)Ltd,an entity of Mudabala Petroleuminrelationtoitstechnical,health,safety,securityandenvironment(HSSE)andproductionoperations. 3,237 1,197 2,040
Within12months
Theprovisionofthird-partymanpowerservicesforMDCOil&Gas(SK320)Ltd,an entity of Mudabala Petroleuminrelationtothedrillingandexplorationoperations.
3,237 1,839 1,398Within12
months
ExpensesfortheProposedPrivatePlacement 70 70 –
Uponcompletion
Total 13,019 6,344 6,675
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d) Utilisationofproceedsraisedfromcorporateproposals(cont’d)
PrivatePlacementof102,000,000ordinaryshares
ProposedUtilisation
Actual Utilisation
Balancetobe
utilised
Intended Timeframe
forUtilisation
RM’000 RM’000 RM’000
PartiallyfinancetheconstructionanddevelopmentcostsofaMobileOffshoreProduction Unit 22,197 1,156 21,041
Within12months
WorkingcapitalexpensesforthecontractawardedbyCarigaliHessOperatingCompanySdnBhddated31March2020 9,308 177 9,131
Within12months
WorkingcapitalexpensesforthecontractawardedbyPTSResourcesSdnBhddated14May2020 5,585 100 5,485
Within12months
EstimatedexpensesinrelationtotheProposed Private Placement 140 140 –
Total 37,230 1,573 35,657
e) Employees’ShareOptionScheme(“ESOS”)Options
AttheExtraordinaryGeneralMeetingheldon22December2016,theCompany’sshareholdersapprovedtheestablishmentofESOSoptionsfortheeligibleDirectorsandemployeesoftheGroup.TheESOSshallbeinforceforaperiodoften(10)yearscommencingfrom28March2017andwillexpireon27March2027.
Duringthefinancialyearended31December2020,noneoftheESOSoptionswasgrantedtotheeligibleDirectorsandemployeesoftheGroup.
aDDitionaL CoMPLianCe inFoRMation
(Cont’D)
Directors’Report........................053
StatementbyDirectors...............059
StatutoryDeclaration..................059
IndependentAuditors’Report.....060
Statementsof FinancialPosition........................065
StatementofProfitor LossandOtherComprehensiveIncome.......................................067
Statementsof ChangesEquity..........................069
StatementsofCashFlows..........072
Notestothe FinancialStatements..................076
FinanCiaL STaTeMeNT CoNTeNTS
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DiReCtoRs’ rePorT
TheDirectorshavepleasureinsubmittingtheirreporttogetherwiththeauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended31December2020.
PRINCIPAL ACTIVITIES
TheCompanyisprincipallyengagedininvestmentholding.TheprincipalactivitiesofitssubsidiariesaredescribedinNote8tothefinancialstatements.
TherehavebeennosignificantchangesinthenatureoftheseactivitiesoftheCompanyanditssubsidiariesduringthefinancialyear.
FINANCIAL RESULTS
Group Company RM RM
Profit/(Loss)aftertaxforthefinancialyear 3,079,298 (56,477,961)
Attributableto:-OwnersoftheCompany 7,913,878 (56,477,961)Non-controllinginterests (4,834,580) –
3,079,298 (56,477,961)
RESERVES AND PROVISIONS
Therewerenomaterialtransferstoorfromreservesorprovisionsduringthefinancialyear.
DIVIDENDS
Therewerenodividendsproposed,declaredorpaidbytheCompanysincetheendofthepreviousfinancialyear.
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T7 Global berhad RegistRation no. 200401023809 (662315-U)
DIRECTORS
ThenameoftheDirectorsoftheCompanyinofficeduringthefinancialyearandduringtheperiodcommencingfromtheendofthefinancialyeartothedateofthisreportare:-
DatukSeriDr.NikNorzrulThaniBinNikHassanThani*TanSriDatukSeriTanKeanSoon,J.P.*Tan Kay Vin*TanSamEngAdmiralTanSriDato’SeriPanglimaAhmadKamarulzamanBinHjAhmadBadaruddin(R)CP(R)Dato’SriWanAhmadNajmuddinBinMohdTanSriDato’SriKohKinLip,J.P.(IndependentNon-ExecutiveDirector)(Appointedon2September2020)MohdNoorBinSetapa(IndependentNon-ExecutiveDirector)(Resignedon30June2020)
* Directors of the Company and certain of its subsidiaries.
InaccordancewithClause123oftheCompany’sConstitution,Mr.TanKayVinandMs.TanSamEngwillretirefromtheBoardbyrotationattheforthcomingAnnualGeneralMeetingand,beingeligible,offerthemselvesforre-election.
InaccordancewithClause106oftheCompany’sConstitution,TanSriDato’SriKohKinLip,J.P.willretirefromtheBoardbyrotationattheforthcomingAnnualGeneralMeetingand,beingeligible,offerhimselfforre-election.
TheDirectorsofthesubsidiariessincethebeginningofthefinancialyeartothedateofthisreport,notincludingthoseDirectorslistedaboveare:-
Ariyathach VangsiriphajaraDato’YongChongLongJulaluckThapanathamchaiLawSiongHiongMichaelAzizEuPengWengMohdAkramBinCheHamatMuhamadAzarudinBinAbdullahNoorHanizaBintiZainuddinOngFeePengPaulaJoseKilgourRaymond KilgourSeeChan@ChanSengFweeSimWaiHanTanGuoFuTanKayShenTan Kay ZhuinTanKeanSengZhang ZhongQingRimayanaBintiIbrahim(Appointedon24February2021)NabilahBintiAli(Appointedon11June2020andResignedon24February2021)MuhamadYaniBinMdHalim(Resignedon10June2020)GlennPhillipTriggs(Resignedon31January2021)JohnathanJamesJohnson(Resignedon31January2021)
DiReCtoRs’ RePoRt
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DIRECTORS’ INTERESTS IN SHARES
AccordingtotheRegisterofDirectors’ShareholdingsrequiredtobekeptunderSection59oftheCompaniesAct2016inMalaysia, the interestsanddeemed interests in theordinarysharesof theCompanyand its relatedcorporationsof thosewhowereDirectorsasatyearend(includingtheinterestsofthespousesorchildrenoftheDirectorswhothemselvesarenotDirectorsoftheCompany)areasfollows:-
Numberofordinaryshares At 1.1.2020/ Dateof At appointment Bought Sold 31.12.2020
InterestsintheCompanyDirect interestsDatukSeriDr.NikNorzrulThani BinNikHassanThani 1,000,000 – – 1,000,000TanSriDatukSeriTanKeanSoon,J.P. 47,297,250 26,000,000 – 73,297,250TanKayVin 9,861,500 3,908,800 – 13,770,300AdmiralTanSriDato’SeriPanglima Ahmad Kamarulzaman BinHjAhmadBadaruddin(R) 1,155,500 150,000 – 1,305,500CP(R)Dato’SriWanAhmadNajmuddin BinMohd 2,772,000 – – 2,772,000TanSriDato’SriKohKinLip,J.P. 17,244,524 – – 17,244,524
Deemed interestsDatukSeriDr.NikNorzrulThani BinNikHassanThani* 21,002,800 767,800 – 21,770,600TanSriDatukSeriTanKeanSoon,J.P.# 20,919,000 37,439,100 – 58,358,100
* Deemed interest by virtue of his shareholdings in Abyssina Resources (M) Sdn. Bhd. pursuant to Section 8 of the Companies Act 2016.
# Deemed interest by virtue of shares held by his spouse and children pursuant to Section 59(11)(c) of the Companies Act 2016.
ByvirtueofthedirectandindirectinterestofTanSriDatukSeriTanKeanSoon,J.P.intheCompany,healsodeemedtohaveinterestinsharesofallthesubsidiariestotheextentthattheCompanyhasaninterestunderSection8oftheCompaniesAct2016.
Exceptasdisclosed,noneoftheotherDirectors inofficeattheendofthefinancialyearheldany interest insharesoftheCompanyoritsanyrelatedcorporationsduringthefinancialyear.
DiReCtoRs’ RePoRt
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T7 Global berhad RegistRation no. 200401023809 (662315-U)
DIRECTORS’ REMUNERATION AND BENEFITS
Duringthefinancialyear,thefeesandotherbenefitsreceivedandreceivablesbytheDirectorsoftheCompanyanditssubsidiariesareasfollows:-
Incurred Incurred bythe bythe Company Subsidiaries Total RM RM RM
Salariesandotheremoluments – 1,584,460 1,584,460Definedcontributionplans – 235,032 235,032Directors’fees 357,375 551,500 908,875
357,375 2,370,992 2,728,367
Duringandattheendofthefinancialyear,noarrangementssubsistedtowhichtheCompanyisaparty,withtheobjectorobjectsofenablingDirectorsoftheCompanytoacquirebenefitsbymeansoftheacquisitionofsharesin,ordebenturesof,theCompanyoranyotherbodycorporate.
ISSUE OF SHARES AND DEBENTURES
Duringthefinancialyear,theCompanyissued30,275,800newordinarysharesviaaprivateplacementatanissuepriceofRM0.43perordinarysharesforatotalcashconsiderationofRM13,018,594forworkingcapitalpurposeson6March2020.
ThenewordinarysharesissuedduringthefinancialyearrankparipassuinallrespectswiththeexistingordinarysharesoftheCompany.
Therewerenoissuanceofdebenturesduringthefinancialyear.
TREASURY SHARES
Duringthefinancialyearended31December2020,theCompanyrepurchased8,528,400ofitsissuedsharesfromtheopenmarketfortotalconsiderationofRM2,711,061.TheaveragepricepaidforthesharesrepurchasedwasapproximatelyRM0.30pershareandwasfinancedbyinternallygeneratedfunds.ThesharesrepurchasedarebeingheldastreasurysharesandtreatedinaccordancewiththerequirementsofSection127(6)oftheCompaniesAct2016.
Asat31December2020,theCompanyheld17,348,800treasurysharesoutofthetotal531,854,856issuedordinaryshares.FurtherrelevantdetailsaredisclosedinNote18tothefinancialstatements.
EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”)
AtanExtraordinaryGeneralMeetingheldon22December2016,theCompany’sshareholdersapprovedtheestablishmentofESOSfortheeligibleDirectorsandemployeesoftheGroup.TheESOSshallbeinforceforaperiodoften(10)yearscommencingfrom28March2017andwillexpireon27March2027.
ThesalientfeaturesoftheESOSaredisclosedinNote33tothefinancialstatements.
However,theESOShasnotbeengrantedsince22December2016.
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INDEMNITY AND INSURANCE FOR DIRECTORS AND OFFICERS
TheCompanymaintainsDirectors’andOfficers’liabilitiesinsuranceforthepurposeofSection289oftheCompaniesAct2016,throughoutthefinancialyearwhichprovidesappropriateinsurancecoveragefortheDirectorsandOfficersoftheCompanyanditssubsidiaries.TheamountofinsurancepremiumpaidduringthefinancialyearamountedtoRM39,230.
OTHER STATUTORY INFORMATION
BeforethefinancialstatementsoftheGroupandoftheCompanyweremadeout,theDirectorstookreasonablesteps:-
(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtfuldebts,andsatisfiedthemselvesthatallknownbaddebtshadbeenwrittenoffandthatadequateprovisionhadbeenmadefordoubtfuldebts;and
(b) to ensure that any current assets which were unlikely to be realised in the ordinary course of business including their valuesasshownintheaccountingrecordsoftheGroupandoftheCompanyhavebeenwrittendowntoanamountwhichtheymightbeexpectedsotorealise.
Atthedateofthisreport,theDirectorsarenotawareofanycircumstances:-
(a) whichwouldrendertheamountswrittenoffforbaddebtsortheamountoftheprovisionfordoubtfuldebtsinthefinancialstatementsoftheGroupandoftheCompanyinadequatetoanysubstantialextent;or
(b) whichwouldrenderthevaluesattributedtocurrentassetsinthefinancialstatementsoftheGroupandoftheCompanymisleading;or
(c) whichhavearisenwhichwouldrenderadherencetotheexistingmethodofvaluationofassetsorliabilitiesoftheGroupandoftheCompanymisleadingorinappropriate;or
(d) nototherwisedealtwithinthisreportorthefinancialstatementswhichwouldrenderanyamountstatedinthefinancialstatementsmisleading.
Atthedateofthisreport,theredoesnotexist:-
(a) anychargeonassetsoftheGrouporoftheCompanywhichhasarisensincetheendofthefinancialyearwhichsecurestheliabilityofanyotherperson;or
(b) anycontingentliabilityoftheGrouporoftheCompanywhichhasarisensincetheendofthefinancialyear.
IntheopinionoftheDirectors:-
(a) no contingent liability or other liability has become enforceable or is likely to become enforceable within the period of twelvemonthsaftertheendofthefinancialyearwhichwillormaysubstantiallyaffecttheabilityoftheGroupandoftheCompanytomeettheirobligationsasandwhentheyfalldue;
(b) theresultsofoperationsoftheGroupandoftheCompanyduringthefinancialyearwerenotsubstantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnature;and
(c) therehasnotarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportanyitem,transactionoreventofamaterialandunusualnaturelikelytoaffectsubstantiallytheresultsoftheoperationsoftheGroupandoftheCompanyforthecurrentfinancialyearinwhichthisreportismade.
DiReCtoRs’ RePoRt
(Cont’D)
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T7 Global berhad RegistRation no. 200401023809 (662315-U)
SIGNIFICANT EVENTS DURING AND AFTER THE REPORTING PERIOD
ThesignificanteventsduringandafterthereportingperiodaredisclosedinNote39tothefinancialstatements.
AUDITORS
TheAuditors’remunerationoftheGroupandoftheCompanyaredisclosedinNote28tothefinancialstatements.
TherewasnoindemnitygiventoorinsuranceeffectedfortheAuditorsoftheCompany.
TheAuditors,GrantThorntonMalaysiaPLT,haveexpressedtheirwillingnesstocontinueinoffice.
SignedonbehalfoftheDirectorsinaccordancewitharesolutionoftheBoardofDirectors.
)TANSRIDATUKSERITANKEANSOON,J.P. ) ) ) ) ) DIRECTORS ) )
)DATUK SERI DR. NIK NORZRUL THANI )BIN NIK HASSAN THANI )
KualaLumpur8April2021
DiReCtoRs’ RePoRt
(Cont’D)
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stateMent BY dIreCTorS
IntheopinionoftheDirectors,thefinancialstatementssetoutonpages65to175aredrawnupinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysiasoastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat31December2020andoftheirfinancialperformanceandcashflowsforthefinancialyearthenended.
SignedonbehalfoftheDirectorsinaccordancewitharesolutionoftheBoardofDirectors.
TANSRIDATUKSERITANKEANSOON,J.P. DATUKSERIDR.NIKNORZRUL THANI BIN NIK HASSAN THANI
KualaLumpur8April2021
statUtoRY deClaraTIoN
I,OngFeePeng,beingtheOfficerprimarilyresponsibleforthefinancialmanagementofT7GlobalBerhad,dosolemnlyandsincerelydeclarethattothebestofmyknowledgeandbelief,thefinancialstatementssetoutonpages65to175arecorrectandImakethissolemndeclarationconscientiouslybelievingthesametobetrueandbyvirtueoftheStatutoryDeclarationsAct1960.
Subscribedandsolemnlydeclaredby )theabovenamedatKualaLumpurin )theFederalTerritorythisdayof )8April2021 ) ONG FEE PENG (MIANO.:25668)
Beforeme:
CommissionerforOaths
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T7 Global berhad RegistRation no. 200401023809 (662315-U)
inDePenDent aUdITorS’ rePorTto tHe MeMBeRs oF t7 gLoBaL BeRHaD
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
OpiNiON
WehaveauditedthefinancialstatementsofT7GlobalBerhad,whichcomprisethestatementsoffinancialpositionasat31December2020oftheGroupandoftheCompany,andthestatementsofprofitorlossandothercomprehensiveincome,statementsofchangesinequityandstatementsofcashflowsoftheGroupandoftheCompanyforthefinancialyearthenended,andnotestothefinancialstatements,includingasummaryofsignificantaccountingpolicies,assetoutonpages65to175.
Inouropinion,theaccompanyingfinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat31December2020,andoftheirfinancialperformanceandcashflowsforthefinancialyearthenendedinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.
Basis fOr OpiNiON
WeconductedourauditinaccordancewithapprovedstandardsonauditinginMalaysiaandInternationalStandardsonAuditing.OurresponsibilitiesunderthosestandardsarefurtherdescribedintheAuditors’ResponsibilitiesfortheAuditoftheFinancialStatementssectionofourreport.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.
iNdepeNdeNce aNd Other ethical respONsiBilities
WeareindependentoftheGroupandoftheCompanyinaccordancewiththeBy-Laws(onProfessionalEthics,ConductandPractice)oftheMalaysianInstituteofAccountants(“By-Laws”)andtheInternationalEthicsStandardsBoardforAccountants’InternationalCodeofEthicsforProfessionalAccountants(includingInternationalIndependenceStandards)(“IESBACode”),andwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththeBy-LawsandtheIESBACode.
Key audit Matters
Keyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsignificanceinourauditofthefinancialstatementsoftheGroupandoftheCompanyforthecurrentfinancialyear.ThesematterswereaddressedinthecontextofourauditofthefinancialstatementsoftheGroupandoftheCompanyasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.
impairment losses on trade receivables
The Risk
RefertoNote15tothefinancialstatements.WefocusedonthisareabecauseoftheGrouphassignificanttradereceivablesasat31December2020andthis issubjecttocreditriskexposure.Thekeyassociateriskwastherecoverabilityofbilledtrade receivables as management judgement is required in determining the completeness of the impairment losses on trade receivablesandassessingtheiradequacythroughconsideringtheexpectedrecoverability.
OurResponse
Wehavereviewedtheageingoftradereceivablesincomparisontopreviousyears,testingtheintegrityofageingbycalculatingtheduedateforasampleofinvoicesandreviewingthelevelofbaddebtswrittenoffinthecurrentyearagainsttheprioryears.Wealsoassessedthereasonablenessofassumptionsandjudgementsmadebythemanagementregardingtheexpectedcreditlossesratesthroughexaminationofsubsequentcollections,billingsandtestedtheoperatingeffectivenessoftherelevantcontrolproceduresthatmanagementhasinplace.
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REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONT’D)
Key audit Matters (cONt’d)
inventories - Valuation Net The risk
RefertoNote14tothefinancialstatements.TheGroupholdsasignificantamountofinventorieswhicharesubjecttoariskthattheinventoriesbecomeslow-movingorobsolete,suchthattheycouldnotbesoldoronlybesoldforsellingpricesthatarelessthanthecarryingvalue.Thereisinherentsubjectivityandestimationrequiredindeterminingtheaccuracyofinventoryobsolescence provision and in making an assessment of its adequacy due to risks such as inventories prices not valid and inventoriesnotstatedatthelowerofcostandnetrealisablevalue.
Ourresponse
Forinventories,wetestedthemethodologyforcalculatingtheprovisions,challengedtheappropriatenessandconsistencyofjudgementsandassumptions,andconsideredthenatureandsuitabilityofhistoricdatausedinestimatingtheprovisions.Indoingso,weobtainedunderstandingontheageingprofileofinventories,theprocessforidentifyingspecificprobleminventoriesandhistoriclossrates.
revenue recognition
The Risk
RefertoNote25tothefinancialstatements.Therearesignificantaccountingjudgementsinvolvedincludingdeterminingthestageofcompletion,thetimingofrevenuerecognitionandthecalculationunderthepercentageofcompletionmethodmadebymanagementinapplyingtheGroup’srevenuerecognitionpolicytolongtermcontractenteredintobytheGroup.Thenatureofthesejudgementsmayresultinthembeingsusceptibletomanagementoverride.
Contractrevenueshouldincludetheamountagreedintheinitialcontract,plusrevenuefromalternationsintheoriginalcontractwork,plusclaimsandincentivepaymentsthatareexpectedtobecollectedandthatcanbemeasuredreliably.
OurResponse
Weperformedarangeofauditprocedureswhichincludeobtainingasampleofcontractsorletterofawards,reviewingforchangeordersorvariationorders,reviewingestimatedprofitandcoststocompleteandenquiringofkeypersonnelregardingadjustmentsforjobcostingandpotentialcontractlosses.Wealsoperformedtestingproceduresoverroutinesalestransactions.
recognition of deferred tax assets
The Risk
RefertoNote13tothefinancialstatements.TheGrouphasrecogniseddeferredtaxassetsforunutilisedbusinesslossesandunabsorbedcapitalallowances.
Recognitionofdeferredtaxassetsrequiressignificantmanagementjudgementsandestimatesaboutthefutureresultsandthekeyassumptionsappliedtoprofitforecastandprojectionsindeterminingwhetherthedefertaxassetscanbeutilised.Thesekeyassumptionsincludeforecastgrowthinfuturerevenueandoperatingprofitmarginsandgrowthrates.
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T7 Global berhad RegistRation no. 200401023809 (662315-U)
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONT’D)
Key audit Matters (cONt’d)
recognition of deferred tax assets (cont’d)
OurResponse
Wehaveevaluatedwhetheritisprobablethatthefuturetaxableprofitswillbeavailablebycomparingtaxableprofitprojectionsagainstrecentperformance,aswellasassessedandchallengedtheassumptionsusedinprojectingrevenuesandoperatingprofitmargin,withourownexpectationsofthoseassumptionsderivedfromourknowledgeoftheGroupandourunderstandingobtainedduringouraudit.
Whilstrecognisingthatestimatingprojectionisinherentlyjudgemental,weassessedthattheassumptionsandmethodologiesusedbythemanagementwerewithinanacceptablerangeofreasonableestimates.
impairment assessment on the carrying amounts of investment in subsidiaries
The Risk
Refer toNote8 to the financial statements. There are significant judgements andestimatesabout future results andkeyassumptionsappliedtocashflowprojectionsofasubsidiary indeterminingtherecoverableamounts. Inthis instance,therecoverableamount isbasedonvalue-in-use.Thesekeyassumptions includedifferentbudgetedoperatingprofitmargins,growthrate,terminalvaluesaswellasdetermininganappropriatepre-taxdiscountrate.
OurResponses
Wehaveassessedandchallengedthekeyassumptionsusedinforecastingrevenues,operatingprofitsmarginandgrowthrates.Wehaveassessedappropriatenessofpre-taxdiscountratesusedbymanagementbycomparingtothemarketdata,weighted average cost of capital of the subsidiary and relevant risk factors and performed sensitivity analysis of our own to stresstestthekeyassumptionsusedintheforecast.
iNfOrMatiON Other thaN the fiNaNcial stateMeNts aNd auditOrs’ repOrt thereON
TheDirectorsof theCompanyare responsible for theother information.Theother informationcomprises the informationincludedintheannualreport,butdoesnotincludethefinancialstatementsoftheGroupandoftheCompanyandourauditors’reportthereon.
OuropiniononthefinancialstatementsoftheGroupandoftheCompanydoesnotcovertheotherinformationandwedonotexpressanyformofassuranceconclusionthereon.
InconnectionwithourauditofthefinancialstatementsoftheGroupandoftheCompany,ourresponsibilityistoreadtheotherinformationand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwiththefinancialstatementsoftheGroupandoftheCompanyorourknowledgeobtainedintheauditorotherwiseappearstobemateriallymisstated.
If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementofthisotherinformation,wearerequiredtoreportthatfact.Asatthedateofourreport,exceptfortheDirectors’Report,theremainingotherinformationhasnotbeenmadeavailabletousforourreadingandaccordinglyweareunabletoreportinthisregard.
However,ifafterreadingtheotherinformationwhenavailableandweconcludethereisamaterialmisstatementtherein,wewillcommunicatesametotheDirectorsoftheCompany.
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REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONT’D)
respONsiBilities Of the directOrs fOr the fiNaNcial stateMeNts
TheDirectorsoftheCompanyareresponsibleforthepreparationoffinancialstatementsoftheGroupandoftheCompanythatgiveatrueandfairviewinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.TheDirectorsarealsoresponsibleforsuchinternalcontrolastheDirectorsdetermineisnecessarytoenablethepreparationoffinancialstatementsoftheGroupandoftheCompanythatarefreefrommaterialmisstatement,whetherduetofraudorerror.
InpreparingthefinancialstatementsoftheGroupandoftheCompany,theDirectorsareresponsibleforassessingtheGroup’sandtheCompany’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlesstheDirectorseitherintendtoliquidatetheGrouportheCompanyortoceaseoperations,orhavenorealisticalternativebuttodoso.
auditOr’s respONsiBilities fOr the audit Of the fiNaNcial stateMeNts
OurobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsoftheGroupandoftheCompanyasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditors’reportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithapprovedstandardsonAuditinginMalaysiaandInternationalStandardsonAuditingwillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.
AspartofanauditinaccordancewithapprovedstandardsonauditinginMalaysiaandInternationalStandardsonAuditing,weexerciseprofessionaljudgementandmaintainprofessionalscepticismthroughouttheaudit.Wealso:
- IdentifyandassesstherisksofmaterialmisstatementofthefinancialstatementsoftheGroupandoftheCompany,whetherduetofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.
- Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheGroup’sandoftheCompany’sinternalcontrol.
- EvaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelateddisclosuresmadebytheDirectors.
- ConcludeontheappropriatenessoftheDirectors’useofthegoingconcernbasisofaccountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheGroup’sortheCompany’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,wearerequiredtodrawattentioninourauditors’reporttotherelateddisclosuresinthefinancialstatementsoftheGroupandoftheCompanyor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditors’report.However,futureeventsorconditionsmaycausetheGrouportheCompanytoceasetocontinueasagoingconcern.
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T7 Global berhad RegistRation no. 200401023809 (662315-U)
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONT’D)
auditOr’s respONsiBilities fOr the audit Of the fiNaNcial stateMeNts (cONt’d)
AspartofanauditinaccordancewithapprovedstandardsonauditinginMalaysiaandInternationalStandardsonAuditing,weexerciseprofessionaljudgementandmaintainprofessionalscepticismthroughouttheaudit.Wealso(cont’d):
- Evaluatetheoverallpresentation,structureandcontentofthefinancialstatementsoftheGroupandoftheCompany,includingthedisclosures,andwhetherthefinancialstatementsoftheGroupandoftheCompanyrepresenttheunderlyingtransactionsandeventsinamannerthatachievesfairpresentation.
- ObtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithintheGroupinordertoexpressanopiniononthefinancialstatementsoftheGroup.Weareresponsibleforthedirection,supervisionandperformanceofthegroupaudit.Weremainsolelyresponsibleforourauditopinion.
WecommunicatedwiththeDirectorsregarding,amongothermatters,theplannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifiedduringouraudit.
WealsoprovidedtheDirectorswithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,actionstakentoeliminatethreatsorsafeguardsapplied.
FromthematterscommunicatedwiththeDirectors,wedeterminedthosemattersthatwereofmostsignificantintheauditofthefinancialstatementsoftheGroupandoftheCompanyforthecurrentfinancialyearandarethereforethekeyauditmatters.Wedescribedthesemattersinourauditors’reportunlesslaworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.
repOrt ON Other legal aNd regulatOry requireMeNts
InaccordancewiththerequirementsoftheCompaniesAct2016inMalaysia,wereportthatthesubsidiariesofwhichwehavenotactedasauditors,aredisclosedinNote8tothefinancialstatements.
Other Matters
ThisreportismadesolelytothemembersoftheCompany,asabody,inaccordancewithSection266oftheCompaniesAct2016inMalaysiaandfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport.
GRANT THORNTON MALAYSIA PLT FOO LEE MENG (201906003682&LLP0022494-LCA) (NO:03069/07/2021(J)) CHARTEREDACCOUNTANTS(AF0737) CHARTEREDACCOUNTANT KualaLumpur 8April2021
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stateMents oF FINaNCIal PoSITIoNas at 31 DeCeMBeR 2020
Group Company Note 2020 2019 2020 2019 RM RM RM RM
ASSETSNon-currentassetsProperty,plantandequipment 4 240,637,372 53,980,984 – –Right-of-useassets 5 23,131,773 8,924,054 – –Investmentproperties 6 4,200,773 1,300,000 – –Intangibleassets 7 2 1,863,413 – –Investmentinsubsidiaries 8 – – 145,840,952 141,190,949Investmentinassociate 9 – – – –Otherinvestments 10 2,031,923 8,657,868 984,278 5,346,530Otherreceivable 11 1,368,800 – – –Amountduefromsubsidiaries 8 – – 11,584,766 9,765,424Cashandbankbalances, depositsandplacements 12 3,500,000 – – –Deferredtaxassets 13 16,222,000 16,832,000 – –
Totalnon-currentassets 291,092,643 91,558,319 158,409,996 156,302,903
Current assetsInventories 14 37,157,479 44,134,858 – –Tradereceivables 15 65,022,091 96,375,640 – –Otherreceivables 11 22,762,178 5,221,492 750,000 –Contractassets 16 1,558,206 2,142,075 – –Amountduefromsubsidiaries 8 – – 10,219,273 61,799,603Taxrecoverable 1,637,219 325,202 161,121 60,768Cashandbankbalances, depositsandplacements 12 62,551,160 43,292,121 2,753,331 2,680,928
Total current assets 190,688,333 191,491,388 13,883,725 64,541,299
TOTAL ASSETS 481,780,976 283,049,707 172,293,721 220,844,202
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T7 Global berhad RegistRation no. 200401023809 (662315-U)
Group Company Note 2020 2019 2020 2019 RM RM RM RM
EQUITY AND LIABILITIESEquityattributabletoowners oftheCompanySharecapital 17 167,751,521 154,732,927 167,751,521 154,732,927Treasuryshares 18 (9,699,396) (6,988,335) (9,699,396) (6,988,335)Reserves 19 15,355,136 35,890,585 57,047,983 57,047,983Retainedearnings/ (Accumulatedlosses) 4,048,367 (3,820,041) (43,228,566) 13,249,395
177,455,628 179,815,136 171,871,542 218,041,970Non-controllinginterests (3,581,348) 19,952,102 – –
Total equity 173,874,280 199,767,238 171,871,542 218,041,970
LIABILITIESNon-currentliabilitiesLeaseliabilities 20 4,185,415 1,596,259 – –Borrowings 21 124,678,316 15,960,612 – –Governmentgrants 22 4,378,965 4,378,965 – –Otherpayables 23 16,057,003 – – –Deferredtaxliabilities 13 873,637 626,438 – –
Totalnon-currentliabilities 150,173,336 22,562,274 – – CurrentliabilitiesTradepayables 24 31,384,632 23,161,079 – –Otherpayables 23 26,464,493 10,827,817 377,512 415,752Contractliabilities 16 5,854,971 183,639 – –Amountduetosubsidiaries 8 – – 44,667 2,386,480Leaseliabilities 20 1,839,685 906,130 – –Borrowings 21 91,082,052 23,724,938 – –Governmentgrants 22 486,552 486,552 – –Taxpayable 620,975 1,430,040 – –
Totalcurrentliabilities 157,733,360 60,720,195 422,179 2,802,232
TOTAL LIABILITIES 307,906,696 83,282,469 422,179 2,802,232
TOTAL EQUITY AND LIABILITIES 481,780,976 283,049,707 172,293,721 220,844,202
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
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stateMents oF PRoFit oR Loss aNd oTher CoMPreheNSIVe INCoMeFoR tHe FinanCiaL YeaR enDeD 31 DeCeMBeR 2020
Group Company Note 2020 2019 2020 2019 RM RM RM RM
Revenue 25 189,407,058 233,488,015 1,263,706 2,467,458
Costofsales (148,001,105) (191,250,300) – –
Grossprofit 41,405,953 42,237,715 1,263,706 2,467,458
Otherincome 4,949,936 3,617,362 3,299,961 4,939,457
Operatingexpenses (39,146,640) (36,666,745) (63,623,768) (8,622,491)
Netgain/(loss)onimpairment offinancialassets 2,468,563 (105,580) 2,264,793 (698,430)
Operatingprofit/(loss) 9,677,812 9,082,752 (56,795,308) (1,914,006)
Financeincomes 26 1,174,056 1,103,237 485,426 91,633
Financecosts 27 (3,356,316) (2,037,825) – –
Profit/(Loss)beforetax 28 7,495,552 8,148,164 (56,309,882) (1,822,373)
Tax(expense)/income 29 (4,416,254) 4,359,643 (168,079) 98,446
Profit/(Loss)forthefinancialyear 3,079,298 12,507,807 (56,477,961) (1,723,927)
Othercomprehensive,netoftaxitems that will not be reclassified subsequently to profit or lossNetchangesinfairvalueofequity investments designated at fair value through other comprehensiveincome (1,038,343) (1,313,423) – –Revaluationreserve 212,049 – – –Taxeffectonitemsthatwillnotbe reclassifiedtoprofitorloss – 410,256 – –
items that are or may be reclassified subsequently to profit or lossExchangedifferencesontranslating offoreignoperations (3,495) (2,270) – –
Othercomprehensivelossforthe financialyear,netoftax (829,789) (905,437) – –
Totalcomprehensiveincome/(loss) forthefinancialyear 2,249,509 11,602,370 (56,477,961) (1,723,927)
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Group Company Note 2020 2019 2020 2019 RM RM RM RM
Profit/(Loss)forthefinancialyear attributable to: OwnersoftheCompany 7,913,878 7,724,904 (56,477,961) (1,723,927)Non-controllinginterests (4,834,580) 4,782,903 – –
3,079,298 12,507,807 (56,477,961) (1,723,927)
Totalcomprehensiveincome/(loss) attributable to:OwnersoftheCompany 7,085,298 6,820,705 (56,477,961) (1,723,927)Non-controllinginterests (4,835,789) 4,781,665 – –
2,249,509 11,602,370 (56,477,961) (1,723,927)
Earningspershareattributable toownersoftheCompany:-
Earningspershare-Basic(sen) 31 0.81 1.68
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
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sta
teM
en
ts o
F C
ha
NG
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R t
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Attr
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1Ja
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0,504
,502
(6,32
6,044
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,474,5
60
–1,
320,1
33
91
(9,08
1,152
)14
1,892
,090
16,71
6,830
15
8,608
,920
Tran
sactions
with
own
ers:-
Owns
hares
acqu
ired
–(6
62,29
1)–
––
––
(662
,291)
–(6
62,29
1)
Issua
nceo
fsha
res
34,22
8,425
–
––
––
–34
,228,4
25
–34
,228,4
25
Divid
endpa
id(Note3
0)–
––
––
–(2
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(2,46
3,793
)(2
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(5,40
3,793
)
Acqu
isitio
nofs
ubsid
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–
––
––
––
–1,
293,5
14
1,29
3,514
Acqu
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––
––
––
––
(40)
(40)
Deco
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––
––
––
––
100,1
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100,1
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Totaltran
saction
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,228,4
25
(662
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––
––
(2,46
3,793
)31
,102,3
41
(1,54
6,393
)29
,555,9
48
Profi
tforthe
finan
cialyea
r–
––
––
–7,
724,9
04
7,72
4,904
4,
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03
12,50
7,807
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preh
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s
forth
efina
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ar–
––
–(9
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7)(1
,032)
–(90
4,199
)(1
,238)
(905
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Total
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ncom
e
forth
efina
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ar–
––
–(9
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7,72
4,904
6,
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05
4,78
1,665
11
,602,3
70
Balan
ceat
31Dec
embe
r201
915
4,732
,927
(6,98
8,335
)35
,474,5
60
–41
6,966
(9
41)
(3,82
0,041
)17
9,815
,136
19,95
2,102
19
9,767
,238
070
T7 Global berhad RegistRation no. 200401023809 (662315-U)
Attr
ibutab
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Com
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RM
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Tran
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own
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Owns
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–(2
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––
––
–(2
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–(2
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61)
Issua
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13,01
8,594
–
––
––
–13
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–13
,018,5
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––
––
––
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1,29
9,266
1,
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––
(19,7
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––
(21,2
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(19,7
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9,996
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Totaltran
saction
swith
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rs13
,018,5
94
(2,71
1,061
)(1
9,706
,869)
––
–(4
5,470
)(9
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06)
(18,6
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1)(2
8,142
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Profi
tforthe
finan
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r–
––
––
–7,
913,8
78
7,91
3,878
(4
,834,5
80)
3,07
9,298
Othe
rcom
preh
ensiv
elos
s
forth
efina
ncialye
ar–
––
212,0
49
(1,03
8,343
)(2
,286)
–(8
28,58
0)(1
,209)
(829
,789)
Total
comp
rehen
sive i
ncom
e
forth
efina
ncialye
ar–
––
212,0
49
(1,03
8,343
)(2
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7,91
3,878
7,
085,2
98
(4,83
5,789
)2,
249,5
09
Balan
ceat
31Dec
embe
r202
016
7,751
,521
(9,69
9,396
)15
,767,6
91
212,0
49
(621
,377)
(3,22
7)4,
048,3
67
177,4
55,62
8(3
,581,3
48)
173,8
74,28
0
sta
teM
en
ts o
F C
Ha
ng
es
in e
QU
itY
(Co
nt’
D)
071
AR2020
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sta
teM
en
ts o
F C
Ha
ng
es
in e
QU
itY
(Co
nt’
D)
Attributab
letoO
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rsoftheCompan
y
Non-Distributab
le
Distributab
le
Sha
re
Trea
sury
Cap
ital
FairValue
Retaine
d
Total
Compan
yCap
ital
Sha
res
Res
erve
Res
erve
Earning
sEquity
R
M
RM
R
M
RM
R
M
RM
Balan
ceat1
Jan
uary201
9120
,504
,502
(6
,326
,044
)57,02
6,99
3
20,99
0
17,43
7,11
5
188
,663
,556
Tran
sactions
withowne
rs:-
Ownsh
aresacq
uired
–(6
62,291
)–
––
(662
,291
)
Issu
ance
ofs
hares
34,22
8,42
5
––
––
34,22
8,42
5
Dividen
dpa
id(N
ote30
)–
–
––
(2,463
,793
)(2
,463
,793
)
To
taltrans
actio
nsw
ithowne
rs
34,22
8,42
5
(662
,291
)–
–(2
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)31,10
2,34
1
To
talcom
preh
ensivelo
ssfo
rthefinan
cialyea
r–
––
–(1
,723
,927
)(1
,723
,927
)
Balan
ceat3
1Dec
embe
r20
19
154
,732
,927
(6
,988
,335
)57,02
6,99
3
20,99
0
13,24
9,39
5
218
,041
,970
Tran
sactions
withowne
rs:-
Ownsh
aresacq
uired
–(2
,711
,061
)–
––
(2,711
,061
)
Issu
ance
ofs
hares
13,01
8,59
4
––
––
13,01
8,59
4
To
taltrans
actio
nsw
ithowne
rs
13,01
8,59
4
(2,711
,061
)–
––
10,30
7,53
3
To
talcom
preh
ensivelo
ssfo
rthefinan
cialyea
r–
––
–(5
6,47
7,96
1)
(56,47
7,96
1)
Balan
ceat3
1Dec
embe
r20
20
167
,751
,521
(9
,699
,396
)57,02
6,99
3
20,99
0
(43,22
8,56
6)
171
,871
,542
Theac
compa
nyingno
tesform
anintegralparto
fthe
fina
ncialstatemen
ts.
072
T7 Global berhad RegistRation no. 200401023809 (662315-U)
Group Company Note 2020 2019 2020 2019 RM RM RM RM
OPERATING ACTIVITIESProfit/(Loss)beforetax 7,495,552 8,148,164 (56,309,882) (1,822,373)
Adjustmentsfor:Amortisationofintangibleassets 273,396 273,396 – –Amortisationofgovernmentgrant – (1,351,540) – –Baddebtswrittenoff 21,449 484,853 – 121,041Depreciationofproperty,plant andequipment 3,685,582 1,955,108 – –Depreciationofright-of-useassets 1,287,016 1,145,948 – –Dividendincome (63,706) (67,409) (63,706) (67,409)Fairvaluegainoninvestmentproperties – (50,000) – –Goodwillwrittenoff – 163,616 – –Gainondeconsolidationofsubsidiaries 8 – (111,612) – –Gainondisposalofassetsheld-for-sale – (563,539) – –Gainondisposalofotherinvestments – (575,778) – –Gainondisposalofproperty,plant andequipment (111,649) – – –Impairmentlosson:-Investmentinsubsidiaries – – 61,599,997 805,280-Intangibleassets 1,590,015 – – –ImpairmentlossonECLs:-Tradereceivables 1,895,390 169,031 – –-Otherreceivables – 401,320 – 151,320-Amountduefromsubsidiaries – – 10,784 547,110Inventorieswrittendown – 9,549 – –Inventorieswrittenback (9,549) – – –Interestexpenses 3,356,316 2,037,825 – –Interestincomes (1,174,056) (1,103,237) (485,426) (91,633)Netfairvaluegainonotherinvestment (1,982,898) (299,376) (3,208,248) (276,626)Netunrealisedlossonforeignexchange 47,596 103,443 – 41,989ReversalofECLs:-Tradereceivables (4,363,953) (400,573) – –-Otherreceivables – (64,198) – –-Amountduefromsubsidiaries – – (2,275,577) –Property,plantandequipmentwrittenoff – 885 – –Reversal of impairment loss ofinvestmentinsubsidiaries – – – (5,437,702)Waiverofdebts (147,352) (96,069) – (337)
Operatingprofit/(loss)beforechanges inworkingcapital 11,799,149 10,209,807 (732,058) (6,029,340)
Changesinworkingcapital:-Inventories 6,986,928 25,731,162 – –Receivables 14,478,576 (27,209,329) (750,000) 429,999Payables 40,066,652 (22,270,413) (38,240) (319,676)Contractassets 583,869 (1,751,526) – –Contractliabilities 5,671,332 (4,659,851) – –
Cashgeneratedfrom/(usedin)operations 79,586,506 (19,950,150) (1,520,298) (5,919,017)
Interestreceived 359,222 247,869 – –Taxpaid (5,898,579) (5,757,790) (268,432) (60,768)Taxrefunded 218,442 824,161 – 281,531
Netcashfrom/(usedin)operatingactivities 74,265,591 (24,635,910) (1,788,730) (5,698,254)
stateMents oF CaSh FloWSFoR tHe FinanCiaL YeaR enDeD 31 DeCeMBeR 2020
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Group Company Note 2020 2019 2020 2019 RM RM RM RM
INVESTING ACTIVITIESAdditionofproperty,plantand equipmentandright-of-useassets A (98,314,326) (11,572,295) – –Acquisitionofinvestmentinsubsidiaries – – (2,230,305) –Acquisitionofinterestofnon-controlling interests (39,725,000) – – –Acquisitionofotherinvestment – (4,257,100) – (4,257,100)Acquisitionofsubsidiaries 8 – 926,327 – –Dividendreceived 63,706 67,409 63,706 67,409Interestreceived 533,837 855,368 338,488 91,633Proceedfromdisposalofotherinvestment 7,570,500 2,421,667 7,570,500 –Proceed from acquisition of equity interests in a subsidiary bynon-controllinginterests 1,275,000 – – –Proceedfromgovernmentgrant – 6,217,057 – –Proceed from disposal of assets-held-forsales – 1,848,206 – –Proceedfromdisposalofproperty, plantandequipment 111,651 – – –Repaymenttosubsidiaries – – (11,846,976) (18,955,096)Reversalofright-of-useassets – 126,660 – –
Netcashusedininvestingactivities (128,484,632) (3,366,701) (6,104,587) (23,053,154)
FINANCING ACTIVITIESAdvancefromajointventure – 13,180,198 – –Dividendpaid – (5,403,793) – (2,463,793)Drawdownofbankers’acceptance 65,681,513 17,672,765 – –Drawdownoffixedloan 4,748,985 – – –Drawdownofinvoicefinancing 49,558,114 10,235,808 – –Drawdownofletterofcredit 5,529,456 8,928,328 – –Drawdownofonshoreforeign currencyloan 19,778,745 7,304,775 – –Drawdownofrevolvingcredit 26,987,600 24,550,000 – –Drawdownoftermloans 1,560,000 627,264 – –Drawdownoftrustreceipt 32,258,593 13,929,382 – –Fixeddepositspledgedassecurity (11,759,609) (231,563) – –Issuanceofsharespursuantto privateplacement 13,018,594 34,228,425 13,018,594 34,228,425Interestpaid (2,776,454) (1,992,932) – –Repurchaseoftreasuryshare (2,711,061) (662,291) (2,711,061) (662,291)Repaymentfromsubsidiaries – – (2,341,813) (1,954,814)Repaymentofleaseliabilities (1,058,789) (1,287,581) – –Repaymentofbankers’acceptance (49,060,499) (19,977,769) – –Repaymentoffixedloan (119,563) – – –Repaymentofinvoicefinancing (28,186,491) (10,782,484) – –Repaymentofletterofcredit (5,529,456) (8,928,328) – –Repayment of onshore foreign currencyloan (15,008,940) (3,544,759) – –Repaymentofrevolvingcredit (30,375,000) (21,800,000) – –Repaymentoftrustreceipt (6,681,168) (20,244,882) – –Repaymentoftermloans (615,450) (1,084,814) – –
Netcashfromfinancingactivities 65,239,120 34,715,749 7,965,720 29,147,527
stateMents oF CasH FLoWs
(Cont’D)
074
T7 Global berhad RegistRation no. 200401023809 (662315-U)
Group Company Note 2020 2019 2020 2019 RM RM RM RM
CASH AND CASH EQUIVALENTSNetincrease 11,020,079 6,713,138 72,403 396,119Broughtforward 41,196,803 34,485,368 2,680,928 2,284,809Effectsonexchangeratechanges oncashandcashequivalents (20,649) (1,703) – –
Carriedforward 12 52,196,233 41,196,803 2,753,331 2,680,928
NOTE TO THE STATEMENTS OF CASH FLOWS
A. PURCHASEOFPROPERTY,PLANTANDEQUIPMENTANDRIGHT-OF-USEASSETS
Group Company 2020 2019 2020 2019 RM RM RM RM
Totalpurchaseofproperty,plant andequipment 203,754,973 10,760,768 – –Totalpurchaseofright-of-useassets 4,689,232 2,207,327 – –Less:Financedbytermloans (105,548,379) – – –Less:Financedbyleaseliabilities (4,581,500) (1,395,800) – –
98,314,326 11,572,295 – –
RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
1January 31DecemberGroup 2020 Drawdrown Repayment Others 2020 RM RM RM RM RM
Leaseliabilities 2,502,389 – (1,058,789) 4,581,500 6,025,100Bankers’acceptance 4,071,996 65,681,513 (49,060,499) – 20,693,010Fixedloan – 4,748,985 (119,563) – 4,629,422Invoicefinancing 4,844,566 49,558,114 (28,186,491) – 26,216,189Letterofcredit – 5,529,456 (5,529,456) – –Onshoreforeigncurrencyloan 7,304,775 19,778,745 (15,008,940) – 12,074,580Revolvingcredit 6,350,000 26,987,600 (30,375,000) – 2,962,600Termloans 17,114,213 1,560,000 (615,450) 105,548,379 123,607,142Trustreceipt – 32,258,593 (6,681,168) – 25,577,425
Total liabilities from financingactivities 42,187,939 206,103,006 (136,635,356) 110,129,879 221,785,468
stateMents oF CasH FLoWs
(Cont’D)
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RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES (CONT’D)
1January 31DecemberGroup 2019 Drawdrown Repayment Others 2019 RM RM RM RM RM
Leaseliabilities 2,394,170 – (1,287,581) 1,395,800 2,502,389Bankers’acceptance 6,377,000 17,672,765 (19,977,769) – 4,071,996Invoicefinancing 5,391,242 10,235,808 (10,782,484) – 4,844,566Letterofcredit – 8,928,328 (8,928,328) – –Onshoreforeigncurrencyloan 3,544,759 7,304,775 (3,544,759) – 7,304,775Revolvingcredit – 24,550,000 (21,800,000) 3,600,000 6,350,000Termloans 17,571,763 627,264 (1,084,814) – 17,114,213Trustreceipt 6,315,500 13,929,382 (20,244,882) – –
Total liabilities from financingactivities 41,594,434 83,248,322 (87,650,617) 4,995,800 42,187,939
1January 31DecemberCompany 2020 Drawdrown Repayment Others 2020 RM RM RM RM RM
Amountduetosubsidiaries 2,386,480 – (2,341,813) – 44,667
Total liabilities from financingactivities 2,386,480 – (2,341,813) – 44,667
1January 31DecemberCompany 2019 Drawdrown Repayment Others 2019 RM RM RM RM RM
Amountduetosubsidiaries 4,341,294 – (1,954,814) – 2,386,480
Total liabilities from financingactivities 4,341,294 – (1,954,814) – 2,386,480
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
stateMents oF CasH FLoWs
(Cont’D)
076
T7 Global berhad RegistRation no. 200401023809 (662315-U)
1. GENERAL INFORMATION
TheCompanyisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysiaandislistedontheMainMarketoftheBursaMalaysiaSecuritiesBerhad.
TheregisteredofficeislocatedatLevel7,MenaraMilenium,JalanDamanlela,PusatBandarDamansara,DamansaraHeights,50490KualaLumpur.
TheprincipalplaceofbusinessislocatedatC-16-01,Level16,KLTrillionCorporateTower,BlockC,338JalanTunRazak,50400KualaLumpur.
TheCompanyisprincipallyengagedininvestmentholding.TheprincipalactivitiesofitssubsidiariesaredescribedinNote8tothefinancialstatements.
TherehavebeennosignificantchangesinthenatureoftheseactivitiesoftheCompanyanditssubsidiariesduringthefinancialyear.
Thefinancialstatementswereauthorised for issueby theBoardofDirectors inaccordancewitha resolutionof theDirectorson8April2021.
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
2.1 StatementofCompliance
ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedinaccordancewithMalaysianFinancialReportingStandards(“MFRSs”),InternationalFinancialReportingStandards(“IFRSs”)andtheCompaniesAct2016inMalaysia.
2.2 BasisofMeasurement
ThefinancialstatementsoftheGroupandoftheCompanyarepreparedunderhistoricalcostconvention,exceptforinvestmentpropertiesandequityfinancialassetsthathavebeenmeasuredatfairvalue.
Historicalcostisgenerallybasedonthefairvalueoftheconsiderationgiveninexchangeforgoodsandservices.
Fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetween market participants at the measurement date and its measurement assumes that the transaction to sell the assetortransfertheliabilitytakesplaceeitherintheprincipalmarketfortheassetorliability,orintheabsenceofaprincipalmarket,inthemostadvantageousmarketfortheassetorliability.TheprincipalorthemostadvantageousmarketmustbeaccessibletotheGroupandtotheCompany.
The fair value of an asset or a liability is measured on the assumptions that market participants would act in their economicbestinterestwhenpricingtheassetorliability.Afairvaluemeasurementofanon-financialassettakesintoaccountamarketparticipant’sabilitytogenerateeconomicbenefitsbyusingtheassetinitshighestandbestuseorbysellingittoanothermarketparticipantthatwouldusetheassetinitshighestandbestuse.
TheGroupandtheCompanyusevaluationtechniquesthatareappropriateinthecircumstancesandforwhichsufficientdataareavailabletomeasurefairvalue,maximisingtheuseofrelevantobservableinputsandminimisingtheuseofunobservableinputs.
notes to tHe FINaNCIal STaTeMeNTS- 31 DeCeMBeR 2020
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notes to tHe FinanCiaL stateMents
(Cont’D)
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONT’D)
2.2 BasisofMeasurement(cont’d)
Allassetsandliabilitiesforwhichfairvalueismeasuredordisclosedinthefinancialstatementsarecategorisedwithinthefairvaluehierarchy,describedasfollows,basedonthelowestlevelinputthatissignificanttotheirfairvaluemeasurementasawhole:-
Level1- Quoted(unadjusted)marketpricesinactivemarketsforidenticalassetsorliabilities.Level2- Valuationtechniquesforwhichthelowestlevelinputthatissignificanttotheirfairvaluemeasurement
isdirectlyorindirectlyobservable.Level3- Valuationtechniquesforwhichthelowestlevelinputthatissignificanttotheirfairvaluemeasurement
isunobservable.
Forassetsandliabilitiesthatarerecognisedinthefinancialstatementsonarecurringbasis,theGroupandtheCompanydeterminewhethertransfershaveoccurredbetweenlevelsinthehierarchybyre-assessingcategorisation(basedonthelowestlevelinputthatissignificanttotheirfairvaluemeasurementasawhole)attheendofeachreportingperiod.
TheGroupandtheCompanyhaveestablishedcontrolframeworkinrespectofmeasurementoffairvaluesoffinancialinstruments.TheBoardofDirectorshasoverallresponsibilityforoverseeingallsignificantfairvaluemeasurements.TheBoardofDirectorsregularlyreviewssignificantunobservableinputsandvaluationadjustments.
Forthepurposeoffairvaluedisclosures,theGroupandtheCompanyhavedeterminedclassesofassetsandliabilitiesonthebasisofthenature,characteristicsandrisksoftheassetorliabilityandtheleveloffairvaluehierarchyasexplainedabove.
2.3 FunctionalandPresentationCurrency
ThefinancialstatementsarepresentedinRinggitMalaysia(“RM”)whichistheCompany’sfunctionalcurrencyandallvaluesareroundedtothenearestRMexceptwhenotherwisestated.
2.4 MFRSs
2.4.1 AdoptionofNewStandards/Amendments/ImprovementstoMFRSs
TheGroupandtheCompanyhaveconsistentlyappliedtheaccountingpoliciessetout inNote3tothefinancialstatementstoallperiodspresentedinthesefinancialstatements.
At the beginning of the current financial year, theGroup and theCompany adopted new standards/amendments/improvementstoMFRSswhicharemandatoryforthefinancialperiodsbeginningonorafter1January2020.
Initialapplicationofthenewstandards/amendments/improvementstoMFRSsdidnothavematerialfinancialimpacttothefinancialstatements.
078
T7 Global berhad RegistRation no. 200401023809 (662315-U)
notes to tHe FinanCiaL stateMents
(Cont’D)
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONT’D)
2.4 MFRSs(cont’d)
2.4.2 StandardsIssuedButNotYetEffective
Thenewandamendedstandardsandinterpretationsthatareissued,butnotyeteffective,uptothedateofissuanceoftheGroup’sandtheCompany’sfinancialstatementsaredisclosedbelow.TheGroupandtheCompanyintendtoadoptthesenewandamendedstandardsandinterpretations,ifapplicable,whentheybecomeeffectiveintherespectivefinancialperiod.
amendments to Mfrss effective 1 June 2020:-AmendmentstoMFRS16 Lease-COVID-19RelatedRentConcessions
amendments to Mfrss effective 1 January 2021:-AmendmentstoMFRS9,MFRS139, InterestRateBenchmarkReform-Phase2 MFRS7,MFRS4*andMFRS16
amendments to Mfrss effective 1 January 2022:-AmendmentstoMFRS3 BusinessCombinations-ReferencetotheConceptual FrameworkAmendmentstoMFRS116 Property,PlantandEquipment-ProceedsbeforeIntendedUseAmendmentstoMFRS137 Provisions,ContingentLiabilitiesandContingentAssets- OnerousContracts-CostofFulfillingaContractAnnualimprovementstoMFRSstandards2018-2020(MFRS1,MFRS9andMFRS141*)
Mfrss, amendments to Mfrss effective 1 January 2023:-MFRS17* InsuranceContractsAmendmentstoMFRS4* InsuranceContracts-ExtensionofTemporaryExemptionfrom ApplyingMFRS9AmendmentstoMFRS17* InsuranceContractsAmendmentstoMFRS101 PresentationofFinancialStatements-ClassificationofLiabilities asCurrentorNon-currentAmendmentstoMFRS101 PresentationofFinancialStatements-DisclosureofAccounting PoliciesAmendmentstoMFRS108 AccountingPolicies,ChangesinAccountingEstimatesand Errors-DefinitionofAccountingEstimates
amendments to Mfrss - effective date deferred indefinitelyAmendmentstoMFRS10and ConsolidatedFinancialStatementsandInvestmentsinAssociate MFRS128* andJointVentures-SaleorContributionofAssetsbetween aninvestoranditsAssociateorJointVenture
* NotapplicabletotheGroupandtheCompany.
Theinitialapplicationoftheabovestandards,amendmentsandinterpretationsarenotexpectedtohavematerialfinancialimpacttothefinancialstatements.
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notes to tHe FinanCiaL stateMents
(Cont’D)
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONT’D)
2.5 SignificantAccountingEstimatesandJudgements
Estimates, assumptions concerning the future and judgements aremade in the preparation of the financialstatements.TheyaffecttheapplicationoftheGroup’sandoftheCompany’saccountingpoliciesandreportedamountsofassets,liabilities,incomeandexpenses,anddisclosuresmade.Estimatesandunderlyingassumptionsareassessedonanon-goingbasisandarebasedonexperienceandrelevantfactors,includingexpectationsoffutureeventsthatarebelievedtobereasonableunderthecircumstances.Theactualresultsmaydifferfromthejudgements,estimatesandassumptionsmadebymanagementandwillseldomequaltheestimatedresults.
2.5.1 KeySourcesofEstimationUncertainty
Informationaboutsignificantjudgements,estimatesandassumptionsthathavethemostsignificanteffectonrecognitionandmeasurementofassets,liabilities,incomeandexpensesarediscussedbelow.
2.5.1.1 UsefulLivesofDepreciableAssets
ThemanagementassessthattheusefullivesrepresenttheexpectedutilityoftheassetstotheGroup.Themanagementestimatestheusefullivesoftheproperty,plantandequipmentandright-of-useassetstobewithin3to99yearsandreviewstheusefullivesofthedepreciableassetsattheendofeachreportingyear.Actualresults,however,mayvaryduetochangeintheexpectedlevelofusageandtechnologicaldevelopmentswhichresultingtheadjustmenttotheGroup’sassets.
Thecarryingamountof theGroup’sproperty, plant andequipment and right-of-useassets aredisclosedinNotes4and5tothefinancialstatements.
2.5.1.2 AmortisationofIntangibleAssets
Thedevelopmentcostsofgasgeneratorsareamortisedonastraight-linebasisovertheirusefullivesof15years.TheGroupassessesannuallytheusefullivesoftheintangibleassetsandiftheexpectationdiffersfromtheoriginalestimate,suchdifferencewillimpacttheamortisationexpensesintheperiodinwhichsuchestimatehadbeencharged.
2.5.1.3 ImpairmentofNon-financialAssets
An impairment loss is recognised for theamountbywhich theassetsorcash-generatingunit’scarryingamountexceedsitsrecoverableamount.Todeterminetherecoverableamount,managementestimatesexpectedfuturecashflowsfromeachcash-generatingunitanddeterminesasuitableinterestrateinordertocalculatethepresentvalueofthosecashflows.Intheprocessofmeasuringexpectedfuturecashflows,managementmakeassumptionsaboutfutureoperatingresults.Theactualresultsmayvary,andmaycausesignificantadjustmentstotheGroup’sandtheCompany’sassetswithinthenextfinancialyear.
Inmostcases,determiningtheapplicablediscountrateinvolvesestimatingtheappropriateadjustmenttomarketriskandtheappropriateadjustmenttoasset-specificriskfactors.
Furtherdetailsofthecarryingvalues,keyassumptionsappliedintheimpairmentassessmentofnon-financialassetsaredisclosedinNote7tofinancialstatements.
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T7 Global berhad RegistRation no. 200401023809 (662315-U)
notes to tHe FinanCiaL stateMents
(Cont’D)
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONT’D)
2.5 SignificantAccountingEstimatesandJudgements(cont’d)
2.5.1 KeySourcesofEstimationUncertainty(cont’d)
2.5.1.4 ProvisionforExpectedCreditLosses(“ECLs”)ofTradeReceivablesandContractAssets
TheGroupusesaprovisionmatrixtocalculateECLsfortradereceivablesandcontractassets.Theprovision rates are based on days past due for groupings of various customer segments that have similarlosspatterns(i.e.,bygeography,producttype,customertypeandrating,andcoveragebylettersofcreditandotherformsofcreditinsurance).
TheprovisionmatrixisinitiallybasedontheGroup’shistoricalobserveddefaultrates.TheGroupwillcalibratethematrixtoadjustthehistoricalcreditlossexperiencewithforward-lookinginformation.Forinstance,ifforecasteconomicconditions(i.e.,grossdomesticproduct)areexpectedtodeteriorateover thenextyearwhichcan leadtoan increasednumberofdefaults in theenergysector, thehistoricaldefaultratesareadjusted.Ateveryreportingdate,thehistoricalobserveddefaultratesareupdatedandchangesintheforward-lookingestimatesareanalysed.
Theassessmentof thecorrelationbetweenhistoricalobserveddefault rates, forecasteconomicconditions andECLs is a significant estimate. The amount of ECLs is sensitive to changes incircumstancesandofforecasteconomicconditions.TheGroup’shistoricalcreditlossexperienceandforecastofeconomicconditionsmayalsonotberepresentativeofcustomer’sactualdefaultinthefuture.
2.5.1.5 Inventories
Inventoriesaremeasuredatthelowerofcostandnetrealisablevalue.Inestimatingnetrealisablevalues,managementtakesintoaccountthemostreliableevidenceavailableatthetimetheestimatesaremade.Therealisationoftheseinventoriesmaybeaffectedbymarket-drivenchangesthatmayoccurinthefuture.
2.5.1.6 IncomeTaxes
Significantjudgementisrequiredindeterminingthecapitalallowancesanddeductibilityofcertainexpensesduring theestimationof theprovision for income taxes.Therearemany transactionsandcalculationsforwhichtheultimatetaxdetermination isuncertainduringtheordinarycourseofbusiness.Wherethefinaltaxoutcomeofthesemattersresultisdifferentfromtheamountsthatwereinitiallyrecorded,suchdifferenceswillimpacttheincometaxanddeferredtaxprovisionsintheperiodinwhichsuchdeterminationismade.
2.5.1.7 DeferredTaxAssets
Deferredtaxassetsarerecognisedforalldeductibletemporarydifferences,unutilisedtaxlosses,unabsorbedcapitalallowancesandunusedtaxcreditstotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichallthedeductibletemporarydifferences,unutilisedtaxlossesandunabsorbedcapitalallowancescanbeutilised.Significantmanagementjudgementisrequiredtodeterminetheamountofdeferredtaxassetsthatcanberecognised,baseduponthelikelytimingandleveloffuturetaxableprofitstogetherwithfuturetaxplanningstrategies.
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notes to tHe FinanCiaL stateMents
(Cont’D)
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONT’D)
2.5 SignificantAccountingEstimatesandJudgements(cont’d)
2.5.1 KeySourcesofEstimationUncertainty(cont’d)
2.5.1.7 DeferredTaxAssets(cont’d)
Assumptions about generationof future taxable profits dependonmanagement’s estimates offuturecashflows.Thesedependonestimatesoffutureproductionandsalesvolume,operatingcosts,capitalexpenditure,dividendsandothercapitalmanagement transactions.Judgement isalsorequiredaboutapplicationofincometaxlegislation.Thesejudgementsandassumptionsaresubjecttorisksanduncertainty,hencethereisapossibilitythatchangesincircumstanceswillalterexpectations,whichmayimpacttheamountofdeferredtaxassetsrecognisedinthestatementsoffinancialpositionandtheamountofunrecognisedtaxlossesandunrecognisedtemporarydifferences.
2.5.1.8 FairValueValuationofInvestmentProperties
TheGroupmeasures its investmentproperties at fair valuewith anychange in fair valuebeingrecognisedinprofitorloss.Significantjudgementisrequiredinthedeterminationoffairvaluewhichmaybederivedbasedondifferentvaluationmethods.Inmakingthejudgement,theGroupevaluatesbasedonpastexperienceandrelianceontheworkofspecialists.TheGroupengagesindependentvaluationspecialiststodeterminethefairvalues.
2.5.2 SignificantManagementJudgements
ThefollowingaresignificantmanagementjudgementsmadeinapplyingtheaccountingpoliciesoftheGroupandoftheCompanythathavethemostsignificanteffectonthefinancialstatements.
2.5.2.1 RevenuefromContractswithCustomers
Revenue isrecognisedwhenorasthecontroloftheasset istransferredtoourcustomersand,dependingonthetermsofthecontractandtheapplicable lawsgoverningthecontract,controloftheassetmaytransferovertimeoratapointintime.Ifcontroloftheassettransfersovertime,revenueisrecognisedovertheperiodofthecontractbyreferencetotheprogress,basedonthephysicalproportionofcontractwork-to-datecertifiedbytheGroupandthecustomers.
Significant judgment isrequired indeterminingtheprogressbasedonthecertifiedwork-to-datecorroborated by the level of completion of the construction and installation based on actual costs incurredto-dateovertheestimatedtotalconstructionandinstallationcosts.Thetotalestimatedcostsarebasedonapprovedbudgets,whichrequireassessmentsandjudgmentstobemadeonchangesin,forexample,workscope,changesincostsandcoststocompletion.Inmakingthesejudgments,managementreliesonpastexperienceandtheworkofspecialists.Achange intheestimateswilldirectlyaffecttherevenuetoberecognised.
2.5.2.2 DeferredTaxAssets
TheassessmentoftheprobabilityoffuturetaxableincomeinwhichdeferredtaxassetscanbeutilisedisbasedontheGroup’sandtheCompany’slatestapprovedbudgetforecast,whichisadjustedforsignificantnon-taxableincomeandexpensesandspecificlimitstotheuseofanyunusedtaxlossorcredit.Ifapositiveforecastoftaxableincomeindicatestheprobableuseofadeferredtaxasset,especiallywhenitcanbeutilisedwithoutatimelimit,thatdeferredtaxassetisusuallyrecognisedinfull.Therecognitionofdeferredtaxassetsthataresubjecttocertainlegaloreconomiclimitsoruncertaintiesisassessedindividuallybymanagementbasedonthespecificfactsandcircumstances.
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2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONT’D)
2.5 SignificantAccountingEstimatesandJudgements(cont’d)
2.5.2 SignificantManagementJudgements(cont’d)
2.5.2.3 SignificantControlOveraSubsidiary
ControlexistswhentheCompanyisexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeentityandhastheabilitytoaffectthosereturnsthroughitspowerovertheentity.
InterestinT7SolutionServices(Thailand)Co.,Ltd.(“T7SST”)
AlthoughT7GastecSdn.Bhd.(“T7Gastec”)awholly-ownedsubsidiaryoftheCompanyownlessthanhalfoftheownershipinterestandlessthanhalfofthevotingpowerinT7SST,theDirectorshavedeterminedthattheT7GasteccontrolsoverT7SST.T7GasteccontrolsT7SSTbyvirtueofanagreementwithotherinvestorsandhavingmajorityboardrepresentationinT7SST.Consequently,theGroupconsolidatesitsinvestmentintheentity.
3. SIGNIFICANTACCOUNTINGPOLICIES
TheGroupandtheCompanyapplythesignificantaccountingpolicies,assummarisedbelow,consistentlythroughoutallperiodspresentedinthefinancialstatements,unlessotherwisestated.
3.1 Consolidation
3.1.1 Subsidiaries
Subsidiariesareentities,includingstructuredentities,controlledbytheGrouportheCompany.ControlexistswhentheGrouportheCompanyisexposed,orhasrights,tovariablereturnsfromits involvementwiththeentityandhastheabilitytoaffectthosereturnsthroughitspowerovertheentity.Potentialvotingrightsareconsideredwhenassessingcontrolonlywhensuchrightsaresubstantive.Besides,theGrouportheCompanyconsidersithasdefactopoweroveraninvesteewhen,despitenothavingthemajorityofvotingrights,ithasthecurrentabilitytodirecttheactivitiesoftheinvesteethatsignificantlyaffecttheinvestee’sreturn.
InvestmentinsubsidiariesisstatedatcostlessanyimpairmentlossesintheCompany’sfinancialposition,unlesstheinvestmentisheldforsaleordistribution.Thecostofinvestmentsincludestransactioncosts.Whereanindicationofimpairmentexist,thecarryingamountofthesubsidiariesisassessedandwrittendownimmediatelytotheirrecoverableamount.
Uponthedisposalofinvestmentinasubsidiary,thedifferencebetweenthenetdisposalproceedsanditscarryingamountisincludedinprofitorloss.
3.1.2 BasisofConsolidation TheGroup’sfinancialstatementsconsolidatetheauditedfinancialstatementsoftheCompanyandallof
itssubsidiaries,whichhavebeenpreparedinaccordancewiththeGroup’saccountingpolicies.AmountsreportedinthefinancialstatementsofsubsidiarycompanieshavebeenadjustedwherenecessarytoensureconsistencywiththeaccountingpoliciesadoptedbytheGroup.ThefinancialstatementsoftheCompanyanditssubsidiariesarealldrawnuptothesamereportingperiod.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.1 Consolidation(cont’d)
3.1.2 BasisofConsolidation(cont’d)
Allintragroupassetsandliabilities,equity,income,expensesandcashflowsrelatingtotransactionsbetweenentitiesoftheGroup(profitsorlossesresultingfromintragrouptransactionsthatarerecognisedinasset,suchasinventoryandproperty,plantandequipment)areeliminatedinfullinpreparingtheconsolidatedfinancialstatements. Intragroup lossesmay indicate an impairment that requires recognition in the consolidatedfinancialstatements.TemporarydifferencesarisingfromtheeliminationofprofitsandlossesresultingfromintragrouptransactionswillbetreatedinaccordancetoNote3.26ofthefinancialstatements.
SubsidiariesareconsolidatedfromthedateonwhichcontrolistransferredtotheGroupandarenolongerconsolidatedfromthedatethatcontrolceases.
ChangesintheCompanyowners’ownershipinterestinasubsidiarythatdonotresultinalossofcontrolareaccountedforasequitytransactions.Insuchcircumstances,thecarryingamountsofthecontrollingandnon-controllinginterestsareadjustedtoreflectthechangesintheirrelativeinterestsinthesubsidiarycompany.Anydifferencebetweentheamountbywhichthenon-controllinginterestisadjustedandthefairvalue of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.
3.1.3 BusinessCombinations
Businesscombinationsareaccountedforusingtheacquisitionmethod.Thecostofanacquisitionismeasuredastheaggregateoftheconsiderationtransferred,measuredatacquisitiondatefairvalueandtheamountofanynon-controllinginterestintheacquiree.Foreachbusinesscombination,theGroupelectswhetheritmeasuresthenon-controllinginterestintheacquireeeitheratfairvalueorattheproportionateshareoftheacquiree’s identifiablenetassets.Acquisitioncosts incurredareexpensedandincludedinadministrativeexpenses.
WhentheGroupacquiresabusiness,itassessesthefinancialassetsandliabilitiesassumedforappropriateclassification anddesignation in accordancewith the contractual terms, economic circumstances andpertinentconditionsasattheacquisitiondate.Thisincludestheseparationofembeddedderivativesinhostcontractsbytheacquiree.
Ifbusinesscombinationsachievedinstages,previouslyheldequityinterestsintheacquireearere-measuredtofairvalueattheacquisitiondateandanycorrespondinggainorlossisrecognisedinprofitorloss.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date.Subsequentchangesinthefairvalueofthecontingentconsiderationwhichisdeemedtobeanassetor liabilitywillberecognised inaccordancewithMFRS9either inprofitor lossorasachangetoothercomprehensive income. If thecontingentconsideration isclassifiedasequity, itwillnotbe remeasured.Subsequentsettlementisaccountedforwithinequity.IninstanceswherethecontingentconsiderationdoesnotfallwithinthescopeofMFRS9,itismeasuredinaccordancewiththeappropriateMFRSs.
Goodwill ininitiallymeasuredatcost,beingtheexcessoftheaggregateoftheconsiderationtransferredandtheamountrecognisedfornon-controllinginterestoverthenetidentifiableassetsacquiredandliabilitiesassumed.Ifthisconsiderationislowerthanthefairvalueofthenetassetsofthesubsidiaryacquired,thedifferenceisrecognisedinprofitorloss.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.1 Consolidation(cont’d)
3.1.3 BusinessCombinations(cont’d)
Afterinitialrecognition,goodwillismeasuredatcostlessanyaccumulatedimpairmentlosses.Forthepurposeofimpairmenttesting,goodwillacquiredinabusinesscombinationis,fromtheacquisitiondate,allocatedtoeachoftheGroup’scash-generatingunitsthatareexpectedtobenefitfromthecombination,irrespectiveofwhetherotherassetsorliabilitiesoftheacquireeareassignedtothoseunits.
Wheregoodwillformspartofacash-generatingunitandpartoftheoperationwithinthatunitisdisposedof,the goodwill associated with the operation disposed of is included in the carrying amount of the operation whendeterminingthegainorlossondisposaloftheoperation.Goodwilldisposedofinthiscircumstanceismeasuredbasedontherelativevaluesoftheoperationdisposedofandtheportionofthecash-generatingunitretained.
3.1.4 LossofControl
Uponthelossofcontrolofasubsidiary,theGroupderecognisestheassetsandliabilitiesofthesubsidiary,anynon-controllinginterestsandtheothercomponentsoftheequityrelatedtothesubsidiarycompany.Anysurplusordeficitarisingonthelossofcontrolisrecognisedinprofitorloss.
IftheGroupretainsanyinterestintheprevioussubsidiary,thensuchinterestismeasuredatfairvalueatthedatethatcontrolislost.Subsequentlyitisaccountedforasequityaccountedinvesteeorasanavailable-for-salefinancialassetdependingonthelevelofinfluenceretained.
3.1.5Non-controllingInterests
Non-controllinginterestsattheendofthereportingperiod,beingtheequityinasubsidiarynotattributabledirectlyorindirectlytotheequityholdersoftheCompany,arepresentedintheconsolidatedstatementoffinancialpositionandstatementofchangesinequitywithinequity,separatelyfromequityattributabletotheownersoftheCompany.Non-controllinginterestsintheresultsoftheGroupispresentedintheconsolidatedstatementofprofitorlossandothercomprehensiveincomeasanallocationoftheprofitorlossandthecomprehensiveincomeforthefinancialyearbetweennon-controllinginterestsandtheownersoftheCompany.
Lossesapplicabletothenon-controllinginterestsinasubsidiaryareallocatedtothenon-controllinginterestsevenifthatresultsinadeficitbalance.
3.1.6EliminationsonConsolidation
Allintra-groupbalances,incomeandexpensesandunrealisedgainsandlossesresultingfromintra-grouptransactionsareeliminatedonconsolidation.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.1 Consolidation(cont’d)
3.1.7 Associates
AssociatesareentitiesinwhichtheGrouphassignificantinfluence,butnocontrol,overtheirfinancialandoperatingpolicies.
TheGroup’sinvestmentsinassociatesareaccountedforusingtheequitymethod.Undertheequitymethod,investment inanassociate iscarried in thestatementsoffinancialpositionatcostpluspostacquisitionchangesintheGroup’sshareofnetassetsoftheassociatesincetheacquisitiondate.Goodwillrelatingtothe associate is included in the carrying amount of the investment and is neither amortised nor individually testedforimpairment.
Theshareoftheresultofanassociateisreflectedinprofitorloss.Thisistheprofitattributabletoequityholdersoftheassociateandthereforeistheprofitaftertaxandnon-controllinginterestsinthesubsidiariesoftheassociate.WhentheGroup’sshareoflossesexceedsitsinterestinanassociate,thecarryingamountofthatinterestincludinganylong-terminvestmentisreducedtozero,andtherecognitionoffurtherlossesisdiscontinuedexcepttotheextentthattheGrouphasanobligationorhasmadepaymentsonbehalfoftheassociate.
Wheretherehasbeenachangerecogniseddirectlyintheequityofanassociate,theGrouprecognisesitsshareofanychangesanddisclosesthis,whenapplicable,inthestatementofchangesinequity.UnrealisedgainsandlossesresultingfromtransactionsbetweentheGroupandtheassociateareeliminatedtotheextentoftheinterestintheassociate.
ThefinancialstatementsoftheassociatesarepreparedasofthesamereportingperiodastheGroup.Wherenecessary,adjustmentsaremadetobringtheaccountingpoliciesoftheassociatesinlinewiththoseoftheGroup.
After application of the equitymethod, theGroupdetermineswhether it is necessary to recognise anadditionalimpairmentlossontheGroup’sinvestmentsinitsassociates.TheGroupdeterminesateachendof the reporting period whether there is any objective evidence that the investments in the associates are impaired.Ifthisisthecase,theGroupcalculatestheamountofimpairmentasthedifferencebetweentherecoverableamountoftheassociatesandtheircarryingvalue,thenrecognisestheamountinthe“shareofprofitofinvestmentsaccountedforusingtheequitymethod”inprofitorloss.
Upon loss of significant influenceover an associate, theGroupmeasures and recognises any retainedinvestmentatitsfairvalue.Anydifferencebetweenthecarryingamountoftheassociateuponlossofsignificantinfluenceandthefairvalueoftheretainedinvestmentandproceedsfromdisposalisrecognisedinprofitorloss.
IntheCompany’sseparatefinancialstatements,investmentsinassociatesarestatedatcostlessimpairmentlosses.Ondisposalofsuchinvestments,thedifferencebetweennetdisposalproceedsandtheircarryingamountsisincludedinprofitorloss.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.2 ForeignCurrencyTranslation
TheGroup’sconsolidatedfinancialstatementsarepresentedinRM,whichisalsotheCompany’sfunctionalcurrency.
3.2.1 ForeignCurrencyTransactionsandBalances
Transactions in foreign currencies are initially recorded at the functional currency rates prevailing at the date ofthetransaction.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spotrateofexchangerulingatthereportingdate.
Alldifferencesaretakentotheprofitorlosswiththeexceptionofallmonetaryitemsthatformspartofanetinvestmentinaforeignoperation.Thesearerecognisedinothercomprehensiveincomeuntilthedisposalofthenetinvestment,atwhichtimetheyarereclassifiedtoprofitorloss.Taxchargesandcreditsattributabletoexchangedifferencesonthosemonetaryitemsarealsorecordedinothercomprehensiveincome.
Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyaretranslatedusingtheexchangeratesasatthedatesoftheinitialtransactions.Non-monetaryitemsmeasuredatfairvalueinaforeigncurrencyaretranslatedusingtheexchangeratesatthedatewhenthefairvalueisdetermined.Thegainorlossarisingintranslationofnon-monetaryitemsisrecognisedinlinewiththegainorlossoftheitemthat gave rise to the translation difference (translation differences on items whose gain or loss is recognised inothercomprehensiveincomeorprofitorlossisalsorecognisedinothercomprehensiveincomeorprofitorlossrespectively).
3.2.2 ForeignOperations
TheassetsandliabilitiesofoperationsdenominatedinfunctionalcurrenciesotherthanRM,includinggoodwillandfairvalueadjustmentsarisingonacquisition,aretranslatedtoRMatexchangeratesattheendofthereportingperiod,exceptforgoodwillandfairvalueadjustmentsarisingfrombusinesscombinationbefore1February2011(thedatewhentheGroupandtheCompanyfirstadoptedMFRSs)whicharetreatedasassetsandliabilitiesoftheCompany.TheincomeandexpensesofforeignoperationsaretranslatedtoRMatexchangeratesatthedateofthetransactions.
Foreigncurrencydifferencesarerecognisedinothercomprehensiveincomeandaccumulatedintheforeigncurrencytranslationreserveinequity.However,iftheoperationisanon-wholly-ownedsubsidiary,thentherelevantproportionateshareofthetranslationdifferenceisallocatedtothenon-controllinginterests.Whenaforeignoperationisdisposedofsuchthatcontrol,significantinfluenceorjointcontrolislost,thecumulativeamountintheforeigncurrencytranslationreserverelatedtothatforeignoperationisreclassifiedtoprofitorlossaspartoftheprofitorlossondisposal.
WhentheGroupdisposesofonlypartofitsinterestinasubsidiarythatincludesaforeignoperation,therelevantproportionofthecumulativeamountisreattributedtonon-controllinginterests.WhentheGroupdisposes of only part of its investment in an associate or joint venture that include a foreign operation while retainingsignificantinfluenceorjointcontrol,therelevantproportionofthecumulativeamountisreclassifiedtoprofitorloss.
Intheconsolidatedfinancialstatements,whensettlementofamonetaryitemreceivablefromorpayabletoaforeignoperationisneitherplannednorlikelyintheforeseeablefuture,foreignexchangegainsandlossesarising from such a monetary item are considered to form part of a net investment in a foreign operation and arerecognisedinothercomprehensiveincome,andarepresentedinforeigncurrencytranslationreserveinequity.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.3 Property,PlantandEquipment
Property,plantandequipmentareinitiallystatedatcost.Thecostofanitemofproperty,plantandequipmentisrecognisedasanassetif,andonlyif,itisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.
Allproperty,plantandequipmentaresubsequentlystatedatcost lessaccumulateddepreciationandlessanyimpairmentlosses.Costincludesexpendituresthataredirectlyattributabletotheacquisitionoftheassetsandanyothercostsdirectlyattributabletobringtheassettoworkingconditionforitsintendeduse,costofreplacingcomponentpartsoftheassets,andthepresentvalueoftheexpectedcostforthedecommissioningoftheassetsaftertheiruse.Thecostofself-constructedassetsalsoincludesthecostofmaterialsanddirectlabour.Forqualifyingassets,borrowingcostsarecapitalisedinaccordancewiththeaccountingpolicyonborrowingcosts.Allotherrepairandmaintenancecostsarerecognisedinprofitorlossasincurred.
Depreciationisrecognisedonthestraight-linemethodinordertowriteoffthecostofeachassetoveritsestimatedusefullife.Allproperty,plantandequipmentaredepreciatedbasedontheestimatedusefullivesoftheassetsasfollows:-
Motorvehicles 20%Furnitureandfittings 10%-20%Renovation 10%Workshoptools 20%Officeequipment 10%-331/3%Equipment 10%-20%Plantandmachinery 10%-331/3%
Freeholdlandisnotdepreciatedbutissubjecttoimpairmenttestifthereisindicationofimpairment.
Assetsunderconstructionconsistsofproperty,plantandequipmentunderconstruction/installationforintendeduse.Theamountisstatedatthecost.Assetsunderconstructionisnotdepreciateduntiltheassetsarereadyfortheirintendeduse.
Theresidualvalues,useful lifeanddepreciationmethodarereviewedfor impairmentwheneventsorchangesincircumstancesindicatethatthecarryingamountmaynotberecoverable,orat leastannuallytoensurethattheamount,methodandperiodofdepreciationareconsistentwithpreviousestimatesandexpectedpatternofconsumptionoffutureeconomicbenefitsembodiedintheitemsofproperty,plantandequipment.
Property,plantandequipmentarederecognisedupondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuseordisposal.Gainorlossarisingonthedisposalofproperty,plantandequipmentaredeterminedasthedifferencebetweenthedisposalproceedsandthecarryingamountoftheassetsandarerecognisedinprofitorlossinthefinancialyearinwhichtheassetisderecognised.
3.4 InvestmentProperties
Investmentpropertiesarepropertieswhichareownedorright-of-useassetheldunderaleasecontracttoearnrentalincomeorforcapitalappreciationorforboth,butnotforsaleintheordinarycourseofbusiness,useintheproductionorsupplyofgoodsorservicesorforadministrativepurposes.
Investmentpropertieswhichareownedaremeasuredinitiallyatcost.Costincludesexpendituresthataredirectlyattributabletotheacquisitionoftheinvestmentproperty.Thecostofself-constructedinvestmentpropertyincludesthecostofmaterialsanddirectlabour,anyothercostsdirectlyattributabletobringingtheinvestmentpropertytoaworkingconditionfortheirintendeduseandcapitalisedborrowingcosts.Right-of-useassetheldunderaleasecontractthatmeetsthedefinitionofinvestmentpropertyisinitiallymeasuredsimilarlyasotherright-of-useassets.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.4 InvestmentProperties(cont’d)
Subsequently,investmentpropertiesaremeasuredatfairvaluewithanychangesthereinrecognisedinprofitorlossfortheperiodinwhichtheyarise.Wherethefairvalueoftheinvestmentpropertyunderconstructionisnotreliablydeterminable,theinvestmentpropertyunderconstructionismeasuredatcostuntilitsfairvaluebecomesreliablydeterminableorconstructioniscomplete,whicheverisearlier.
ThefairvalueofinvestmentpropertiesheldbytheGroupasaright-of-useassetreflectstheexpectedcashflows.Accordingly,wherevaluationobtainedforapropertyisnetofallpaymentsexpectedtobemade.TheGroupaddedback any recognised lease liability to arrive at the carrying amount of the investment property using the fair value model.
Aninvestmentpropertyisderecognisedonitsdisposal,orwhenit ispermanentlywithdrawnfromuseandnofutureeconomicbenefitsareexpectedfromthedisposal.Thedifferencebetweenthenetdisposalproceedsandthecarryingamountisrecognisedinprofitorlossintheperiodinwhichtheitemisderecognised.
3.5 Leases
TheGroupassessesatcontractinceptionwhetheracontractis,orcontains,alease.Thatis,ifthecontractconveystherighttocontroltheuseofanidentifiedassetforaperiodoftimeinexchangeforconsideration.
3.5.1 AsaLessee
TheGroupappliesasinglerecognitionandmeasurementapproach forall leases,except forshort-termleasesandleasesoflow-valueassets.TheGrouprecognisesleaseliabilitiestomakeleasepaymentsandright-of-useassetsrepresentingtherighttousetheunderlyingassets.
3.5.1.1 Right-of-useAssets
TheGrouprecognisesright-of-useassetsatthecommencementdateofthelease(i.e.,thedatetheunderlyingassetisavailableforuse).Right-of-useassetsaremeasuredatcost,lessanyaccumulateddepreciationandimpairmentlosses,andadjustedforanyremeasurementofleaseliabilities.Thecostofright-of-useassetsincludestheamountofleaseliabilitiesrecognised,initialdirectcostsincurred,andleasepaymentsmadeatorbeforethecommencementdatelessanyleaseincentivesreceived.Right-of-useassetsaredepreciatedonastraight-linebasisovertheshorteroftheleasetermandtheestimatedusefullivesoftheassets,asfollows:-
Leaseholdlandandbuilding OverremainingleasetermPlant,machineryandequipment 14%Motorvehicles 20%
Ifownershipofthe leasedassettransferstotheGroupattheendofthe leasetermorthecostreflectstheexerciseofapurchaseoption,depreciationiscalculatedusingtheestimatedusefullifeoftheasset.
Theright-of-useassetsarealsosubjecttoimpairment.Theaccountingpoliciesforimpairmentofnon-financialassetsissetoutinNote3.11tothefinancialstatements.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.5 Leases(cont’d)
3.5.1 AsaLessee(cont’d)
3.5.1.2 LeaseLiabilities
At thecommencementdateof the lease, theGrouprecognises lease liabilitiesmeasuredat thepresentvalueofleasepaymentstobemadeovertheleaseterm.Theleasepaymentsincludefixedpayments(includingin-substancefixedpayments)lessanyleaseincentivesreceivable,variableleasepaymentsthatdependonanindexorarate,andamountsexpectedtobepaidunderresidualvalueguarantees.TheleasepaymentsalsoincludetheexercisepriceofapurchaseoptionreasonablycertaintobeexercisedbytheGroupandpaymentsofpenaltiesforterminatingthe lease, if theleasetermreflectstheGroupexercisingtheoptiontoterminate.Variableleasepaymentsthatdonotdependonanindexoraratearerecognisedasexpenses(unlesstheyareincurredtoproduceinventories)intheperiodinwhichtheeventorconditionthattriggersthepaymentoccurs.
In calculating the present value of lease payments, theGroup uses its incremental borrowingrate at the lease commencement date because the interest rate implicit in the lease is not readily determinable.Afterthecommencementdate,theamountofleaseliabilitiesisincreasedtoreflecttheaccretionofinterestandreducedfortheleasepaymentsmade.Inaddition,thecarryingamountofleaseliabilitiesisremeasuredifthereisamodification,achangeintheleaseterm,achangeintheleasepayments(e.g.,changestofuturepaymentsresultingfromachangeinanindexorrateused to determine such lease payments) or a change in the assessment of an option to purchase theunderlyingasset.
3.5.1.3 Short-termLeasesandLeasesofLow-valueAssets
TheGroupapplies theshort-term lease recognitionexemption to itsshort-term leasesofplant,machinery,equipmentandpremises(i.e.,thoseleasesthathavealeasetermof12monthsorlessfromthecommencementdateanddonotcontainapurchaseoption).Italsoappliestheleaseoflow-valueassets recognitionexemption to leasesofofficeequipment thatareconsidered tobelowvalue.Leasepaymentsonshort-termleasesandleasesoflow-valueassetsarerecognisedasexpenseonastraight-linebasisovertheleaseterm.
3.5.2 AsaLessor
LeasesinwhichtheGroupdoesnottransfersubstantiallyalltherisksandrewardsincidentaltoownershipofanassetareclassifiedasoperatingleases.Rentalincomearisingisaccountedforonastraight-linebasisovertheleasetermsandisincludedinrevenueinthestatementofprofitorlossduetoitsoperatingnature.Initialdirectcostsincurredinnegotiatingandarranginganoperatingleaseareaddedtothecarryingamountoftheleasedassetandrecognisedovertheleasetermonthesamebasisasrentalincome.Contingentrentsarerecognisedasrevenueintheperiodinwhichtheyareearned.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.6 Goodwill
Goodwillarisingontheacquisitionofasubsidiaryoraproportionatelyconsolidatedjointly-controlledentity,beingtheexcessoftheaggregateoftheconsiderationtransferred,theamountofanynon-controllinginterestintheacquiree,andtheacquirer’spreviouslyheldequityinterestintheacquireeoverthenetoftheacquisition-dateamountsoftheidentifiableassetsacquiredandtheliabilitiesassumed.Afterinitialrecognition,goodwillismeasuredatcostlessanyaccumulatedimpairmentlosses.
Goodwillisnotamortisedbutisreviewedforimpairmentatleastannually.Forthepurposeofimpairmenttesting,goodwillisallocatedattheacquisitiondatetoeachoftheGroup’scash-generatingunitsthatareexpectedtobenefitfromthesynergiesofthecombination.Acash-generatingunittowhichgoodwillhasbeenallocatedistestedforimpairmentannually,andwheneverthereisanindicationthattheunitmaybeimpaired,bycomparingthecarryingamountoftheunit,includingthegoodwill,withtherecoverableamountoftheunit.Animpairmentlossisrecognisedforacash-generatingunitwhentherecoverableamountoftheunitislessthanthecarryingamountoftheunit.Anyimpairmentlossrecognisedisfirstallocatedtoreducethecarryingamountofanygoodwillallocatedtotheunitandthen,totheotherassetsoftheunitwithinthescopeofMFRS136ImpairmentofAssetsprorataonthebasisofthecarryingamountofeachapplicableassetintheunit.Anyimpairmentlossrecognisedforgoodwillisnotreversed.
Goodwill arisingon theacquisitionof investments inassociates is includedwithin thecarryingamountof theinvestmentsandisassessedforimpairmentaspartoftheinvestment.
If,afterreassessment,theGroup’sinterestinthenetfairvalueoftheidentifiableassets,liabilitiesandcontingentliabilitiesrecognisedexceedsthecostofthebusinesscombination,theexcessisrecognisedimmediatelyinprofitorloss.
Ondisposalofasubsidiaryoraproportionatelyconsolidatedjointly-controlledentity,theattributableamountofgoodwillisincludedinthedeterminationofthegainorlossondisposal.
3.7 IntangibleAssets
Intangible assets acquired separately aremeasuredon initial recognition at cost. Following initial recognition,intangible assets are carried at cost less accumulatedamortisation andany accumulated impairment losses.Internallygeneratedintangibleassets,excludingcapitaliseddevelopmentcosts,arenotcapitalisedandexpenditureisreflectedintheprofitorlossintheperiodinwhichitincurred.
Theusefullifeofintangibleassetsisassessedtobeeitherfiniteorindefinite.Intangibleassetswithfinitelifeareamortisedonstraight-linebasisovertheestimatedeconomicusefullifeandassessedforimpairmentwheneverthere isan indicationthat the intangibleassetmaybe impaired.Theamortisationperiodandtheamortisationmethodforanintangibleassetwithafiniteusefullifearereviewedatleastateachfinancialyearend.Changesintheexpectedusefullifeortheexpectedpatternofconsumptionoffutureeconomicbenefitsembodiedintheassetisaccountedforbychargingtheamortisationperiodormethod,asappropriate,andaretreatedaschangesinaccountingestimates.Theamortisationexpenseonintangibleassetswithfiniteusefullifeisrecognisedintheprofitorlossintheexpensecategoryconsistentwiththefunctionoftheintangibleasset.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.7 IntangibleAssets(cont’d)
Intangibleassetswithindefiniteusefullifearetestedforimpairmentannuallyormorefrequentlyiftheeventsorchangesincircumstancesindicatethatthecarryingvaluemaybeimpairedeitherindividuallyoratcash-generatingunitlevel.Suchintangiblesarenotamortised.
Theuseful lifeofanintangibleassetwithanindefinitelife isreviewedannuallytodeterminewhethertheusefullifeassessmentcontinuestobesupportable.Ifnot,thechangeinusefullifefromindefinitetofiniteismadeonaprospectivebasis.
Gainorlossesarisingfromderecognitionofanintangibleassetismeasuredasthedifferencebetweenthenetdisposalproceedsandthecarryingamountoftheassetandarerecognisedintheprofitorlosswhentheassetisderecognised.
3.7.1 Patents
Patentswereacquiredinbusinesscombinationsandareamortisedonastraight-linebasisovertheusefullivesof10years.
3.7.2 ResearchandDevelopmentCosts
Researchcostsareexpensedasincurred.
DeferreddevelopmentcostsarisingfromdevelopmentexpendituresonanindividualprojectarerecognisedwhentheGroupcandemonstratethetechnicalfeasibilityofcompletingtheintangibleassetsothatitwillbeavailableforuseorsale,itsintentiontocompleteanditsabilitytouseorselltheasset,howtheassetwillgeneratefutureeconomicbenefits,theavailabilityofresourcestocompleteandtheabilitytomeasurereliablytheexpendituresduringdevelopment.Deferreddevelopmentcostshaveafiniteusefullifeandareamortisedovertheperiodof15yearsonastraight-linebasis.
3.8 FinancialInstruments
Afinancialinstrumentisanycontractthatgivesrisetoafinancialassetofoneentityandafinancialliabilityorequityinstrumentofanotherentity.
3.8.1 FinancialAssets
Initial Recognition and Measurement
Financialassetsareclassified,atinitialrecognition,assubsequentlymeasuredatamortisedcost,fairvaluethroughothercomprehensiveincome(“OCI”),andfairvaluethroughprofitorloss.
Theclassificationoffinancialassetsatinitialrecognitiondependsonthefinancialasset’scontractualcashflowcharacteristicsandtheGroup’sandtheCompany’sbusinessmodelformanagingthem.WiththeexceptionoftradereceivablesthatdonotcontainasignificantfinancingcomponentorforwhichtheGroupandtheCompanyhaveappliedthepracticalexpedient,theGroupandtheCompanyinitiallymeasuresafinancialassetatitsfairvalueplus,inthecaseofafinancialassetnotatfairvaluethroughprofitorloss,transactioncosts.TradereceivablesthatdonotcontainasignificantfinancingcomponentorforwhichtheGroupandtheCompanyhaveappliedthepracticalexpedientaremeasuredatthetransactionprice.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.8 FinancialInstruments(cont’d)
3.8.1 FinancialAssets(cont’d)
Initial Recognition and Measurement (cont’d)
InorderforafinancialassettobeclassifiedandmeasuredatamortisedcostorfairvaluethroughOCI,itneedstogiverisetocashflowsthatare‘solelypaymentsofprincipalandinterest(“SPPI”)’ontheprincipalamountoutstanding.ThisassessmentisreferredtoastheSPPItestandisperformedataninstrumentlevel.FinancialassetswithcashflowsthatarenotSPPIareclassifiedandmeasuredatfairvaluethroughprofitorloss,irrespectiveofthebusinessmodel.
TheGroup’sandtheCompany’sbusinessmodelformanagingfinancialassetsreferstohowitmanagesitsfinancialassetsinordertogeneratecashflows.Thebusinessmodeldetermineswhethercashflowswillresultfromcollectingcontractualcashflows,sellingthefinancialassets,orboth.
Financial assets classified andmeasured at amortised cost are heldwithin a businessmodelwith theobjectivetoholdfinancialassetsinordertocollectcontractualcashflowswhilefinancialassetsclassifiedandmeasuredatfairvaluethroughOCIareheldwithinabusinessmodelwiththeobjectiveofbothholdingtocollectcontractualcashflowsandselling.
Purchasesorsalesof financialassets that requiredeliveryofassetswithina time frameestablishedbyregulationorconventioninthemarketplace(regularwaytrades)arerecognisedonthetradedate,i.e.,thedatethattheGroupandtheCompanycommittopurchaseorselltheasset.
SubsequentMeasurement
Forpurposesofsubsequentmeasurement,financialassetsareclassifiedinfourcategories:
• Financialassetsatamortisedcost(debtinstruments);• FinancialassetsatfairvaluethroughOCIwithrecyclingofcumulativegainsandlosses(debtinstruments);• FinancialassetsdesignatedatfairvaluethroughOCIwithnorecyclingofcumulativegainsandlosses
uponderecognition(equityinstruments);or• Financialassetsatfairvaluethroughprofitorloss.
Atthereportingdate,theGroupandtheCompanydonothavefinancialassetsatfairvaluethroughOCIwithrecyclingofcumulativegainsandlosses.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.8 FinancialInstruments(cont’d)
3.8.1 FinancialAssets(cont’d)
SubsequentMeasurement (cont’d)
financial assets at amortised cost
Financial assets at amortised cost are subsequentlymeasured using the effective interest rate (“EIR”)methodandaresubjecttoimpairment.Gainsandlossesarerecognisedinprofitorlosswhentheassetisderecognised,modifiedorimpaired.TheGroup’sandtheCompany’sfinancialassetsatamortisedcostincludetradereceivables,mostofotherreceivables,amountduefromsubsidiaries,cashandbankbalances,depositandplacements.
financial assets designated at fair Value through Oci (equity instruments)
Uponinitialrecognition,theGroupandtheCompanycanelecttoclassifyirrevocablyitsequityinvestmentsasequityinstrumentsdesignatedatfairvaluethroughOCIwhentheymeetthedefinitionofequityunderMFRS9FinancialInstruments.Theclassificationisdeterminedonaninstrument-by-instrumentbasis.
Gainsandlossesonthesefinancialassetsareneverrecycledtoprofitorloss.Dividendsarerecognisedasotherincomeinthestatementofprofitorlosswhentherightofpaymenthasbeenestablished,exceptwhentheGroupandtheCompanybenefitsfromsuchproceedsasarecoveryofpartofthecostofthefinancialasset,inwhichcase,suchgainsarerecordedinOCI.EquityinstrumentsdesignatedatfairvaluethroughOCIarenotsubjecttoimpairmentassessment.
TheGroup and theCompany elected to classify irrevocably its overseas equity investments under thiscategory.
financial assets at fair Value through profit or loss (“fVtpl”)
Financialassetsatfairvaluethroughprofitorlossarecarriedinthestatementsoffinancialpositionatfairvaluewithnetchangesinfairvaluerecognisedinthestatementsofprofitorloss.
Thiscategoryincludesnon-listedequityinvestmentswhichtheGroupandtheCompanyhadnotirrevocablyelectedtoclassifyatfairvaluethroughOCI.Dividendsonnon-listedequityinvestmentsarerecognisedasotherincomeinthestatementsofprofitorlosswhentherightofpaymenthasbeenestablished.TheGroup’sandtheCompany’sdebtinstrumentsatFVTPLincludesinvestmentsinquotedshares.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.8 FinancialInstruments(cont’d)
3.8.1 FinancialAssets(cont’d)
Derecognition
Afinancialasset(or,whereapplicable,apartofafinancialassetorpartofagroupofsimilarfinancialassets)isprimarilyderecognisedwhen:-
• Therightstoreceivecashflowsfromtheassethaveexpired;or• TheGroupandtheCompanyhavetransferredtheirrightstoreceivecashflowsfromtheassetorhas
assumedanobligationtopaythereceivedcashflowsinfullwithoutmaterialdelaytoathirdpartyundera‘pass-through’arrangement;andeither(a)theGroupandtheCompanyhastransferredsubstantiallyalltherisksandrewardsoftheasset,or(b)theGroupandtheCompanyhaveneithertransferrednorretainedsubstantiallyalltherisksandrewardsoftheasset,buthastransferredcontroloftheasset.
When theGroupand theCompanyhave transferred their rights to receivecashflows fromanassetorhaveenteredintoapass-througharrangement,itevaluatesif,andtowhatextent,ithasretainedtherisksandrewardsofownership.Whentheyhaveneithertransferrednorretainedsubstantiallyalloftherisksandrewardsoftheasset,nortransferredcontroloftheasset,theGroupandtheCompanycontinuetorecognisethetransferredassettotheextentofitscontinuinginvolvement.Inthatcase,theGroupandtheCompanyalsorecogniseanassociatedliability.ThetransferredassetandtheassociatedliabilityaremeasuredonabasisthatreflectstherightsandobligationsthattheGroupandtheCompanyhaveretained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the loweroftheoriginalcarryingamountoftheassetandthemaximumamountofconsiderationthattheGroupandtheCompanycouldberequiredtorepay.
Impairment
TheGroupandtheCompanyrecogniseanallowanceforexpectedcreditlosses(“ECLs”)onfinancialassetsmeasuredatamortisedcost,contractassets,andleasereceivables.Expectedcreditlossesareaprobability-weightedestimateofcreditlosses.
TheGroupandtheCompanymeasurelossallowancesatanamountequaltolifetimeexpectedcreditloss,exceptfordebtsecuritiesthataredeterminedtohavelowcreditriskatthereportingdate,caskandbankbalanceandotherdebtsecuritiesforwhichcreditriskhasnotincreasedsignificantlysinceinitialrecognition,whicharemeasuredat12-monthexpectedcreditloss.Lossallowancesfortradereceivables,contractassetsandleasereceivablesarealwaysmeasuredatanamountequaltolifetimeexpectedcreditloss.
Whendeterminingwhetherthecreditriskofafinancialassethasincreasedsignificantlysinceinitialrecognitionandwhenestimatingexpectedcreditloss,theGroupandtheCompanyconsiderreasonableandsupportableinformationthatisrelevantandavailablewithoutunduecostoreffort.Thisincludesbothquantitativeandqualitative informationandanalysis,basedontheGroup’sandtheCompany’shistoricalexperienceandinformedcreditassessmentandincludingforward-lookinginformation,whereavailable.
Lifetimeexpectedcredit lossesaretheexpectedcredit lossesthatresultfromallpossibledefaulteventsovertheexpectedlifeoftheasset,while12-monthexpectedcreditlossesaretheportionofexpectedcreditlossesthatresultfromdefaulteventsthatarepossiblewithinthe12monthsafterthereportingdate.Themaximumperiodconsideredwhenestimatingexpectedcredit lossesisthemaximumcontractualperiodoverwhichtheGroupandtheCompanyareexposedtocreditrisk.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.8 FinancialInstruments(cont’d)
3.8.1 FinancialAssets(cont’d)
Impairment (cont’d)
impairment for trade receivables and contract assets
For trade receivablesandcontractassets, theGroupand theCompanyapplyasimplifiedapproach incalculatingECLs.Therefore,theGroupandtheCompanydonottrackchangesincreditrisk,butinsteadrecognisesalossallowancebasedonlifetimeECLsateachreportingdate.TheGroupandtheCompanyhaveestablishedaprovisionmatrixthatisbasedonitshistoricalcreditlossexperience,adjustedforforward-lookingfactorsspecifictothedebtorsandtheeconomicenvironment.
Tomeasure ECLs, trade receivables and contract assets are grouped into categories. The categoriesaredifferentiatedbythedifferentbusinessrisksandaresubjecttodifferentcreditassessments.Contractassets relate to unbilled work in progress and have substantially the same risk characteristics as the trade receivablesforthesametypesofcontracts.TheGroupandtheCompanyconsidertheexpectedcreditlossratesfortradereceivablesasareasonableapproximationofthelossratesforcontractassetswithsimilarriskcharacteristics.
impairment for financial assets other than trade receivables and contract assets
TheGroupandtheCompanyconsidertheprobabilityofdefaultuponinitialrecognitionoftheassetandwhethertherehasbeenasignificantincreaseincreditriskonanongoingbasisthroughouteachreportingperiod.Toassesswhetherthereisasignificantincreaseincreditrisk,theGroupandtheCompanycomparethe risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition.Theassessmentconsidersavailable,reasonableandsupportableforward-lookinginformation.
credit impaired
Animpairmentlossinrespectoffinancialassetsmeasuredatamortisedcostisrecognisedinprofitorlossandthecarryingamountoftheassetisreducedthroughtheuseofanallowanceaccount.
An impairment loss in respect of debt investments measured at fair value through other comprehensive income isrecognisedinprofitorlossandtheallowanceaccountisrecognisedinothercomprehensiveincome.
Ateachreportingdate,theGroupandtheCompanyassesswhetherthefinancialassetscarriedatamortisedcostanddebtsecuritiesatfairvaluethroughothercomprehensiveincomearecredit-impaired.
Afinancialassetiswrittenoffwhenthereisnoreasonableexpectationofrecoveringthecontractualcashflows.TheGroupandtheCompanyconsiderareceivableascreditimpairedwhenoneormoreeventsthathaveadetrimental impactontheestimatedcashflowshaveoccurred.Theseinstancesincludeadversechangesinthefinancialcapabilityofthedebtoranddefaultorsignificantdelayinpayments.However,incertaincases,theGroupandtheCompanymayalsoconsiderafinancialassettobeindefaultwheninternalorexternalinformationindicatesthattheGroupandtheCompanyareunlikelytoreceivetheoutstandingcontractualamountsinfullbeforetakingintoaccountanycreditenhancementsheldbytheGroupandtheCompany.However,financialassetsthatarewrittenoffcouldstillbesubjecttoenforcementactivitiesinordertocomplywiththeGroup’sandtheCompany’sproceduresforrecoveryamountsdue.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.8 FinancialInstruments(cont’d)
3.8.2 FinancialLiabilities
Initial Recognition and Measurement
Financialliabilitiesareclassified,atinitialrecognition,asfinancialliabilitiesatfairvaluethroughprofitorloss,loansandborrowings,payables,orasderivativesdesignatedashedginginstrumentsinaneffectivehedge,asappropriate.
Allfinancialliabilitiesarerecognisedinitiallyatfairvalueand,inthecaseofloansandborrowingsandpayables,netofdirectlyattributabletransactioncosts.
TheGroup’sandtheCompany’sfinancialliabilitiesincludedtradepayables,mostofotherpayables,amountduetosubsidiariesandborrowings.
SubsequentMeasurement
Forpurposesofsubsequentmeasurement,financialliabilitiesareclassifiedintwocategories:
• Financialliabilitiesatfairvaluethroughprofitorloss;or• Financialliabilitiesatamortisedcost.
TheGroupandtheCompanyhavenotdesignatedanyfinancialliabilitiesasatfairvaluethroughprofitorloss.
financial liabilities at amortised cost
Tradepayables,mostofotherpayables,amountduetosubsidiariesandborrowingsarerecognisedinitiallyat fairvalueplustransactioncostsandthereafter,atamortisedcostusingtheeffective interestmethod.GainsandlossesarerecognisedinprofitorlosswhentheliabilitiesarederecognisedaswellasthroughtheEIRamortisationprocess.AmortisedcostiscalculatedbytakingintoaccountanydiscountorpremiumonacquisitionandfeesorcoststhatareanintegralpartoftheEIR.TheEIRamortisationisincludedasfinancecostsintheprofitorloss.
Financial liabilitiesareclassifiedascurrent liabilities for thosehavingmaturitydatesofnotmorethan12monthsafterthereportingdate,andthebalanceisclassifiedasnon-current.
Derecognition
Afinancialliabilityisderecognisedwhentheobligationundertheliabilityisdischargedorcancelledorexpires.Whenanexistingfinancialliabilityisreplacedbyanotherfromthesamelenderonsubstantiallydifferentterms,orthetermsofanexistingliabilityaresubstantiallymodified,suchanexchangeormodificationistreatedasthederecognitionoftheoriginalliabilityandtherecognitionofanewliability.Thedifferenceintherespectivecarryingamountsisrecognisedintheprofitorloss.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.8 FinancialInstruments(cont’d)
3.8.3OffsettingofFinancialInstruments
Financialassetsandfinancialliabilitiesareoffsetandthenetamountreportedinthestatementsoffinancialpositionif,andonlyif,thereisacurrentlyenforceablelegalrighttooffsettherecognisedamountsandthereisanintentiontosettleonanetbasis,ortorealisetheassetsandsettletheliabilitiessimultaneously.
3.8.4 FinancialGuaranteeContracts
Financialguaranteecontracts issuedbytheGroupandtheCompanyarethosecontractsthatrequireapaymenttobemadetoreimbursetheholderforalossitincursbecausethespecificdebtorfailstomakeapaymentwhendueinaccordancewiththetermsofadebtinstrument.Financialguaranteecontractsarerecognisedinitiallyasaliabilityatfairvalue,adjustedfortransactioncoststhataredirectlyattributabletotheissuanceoftheguarantee.Subsequently,theliabilityismeasuredatthehigherofthebestestimateoftheexpenditurerequiredtosettlethepresentobligationatthereportingdateandtheamountrecognisedlesscumulativeamortisation.
3.9 Inventories
Inventoriesarestatedatthelowerofcostandnetrealisablevalue.Thecostofinventoriesisbasedonweightedaveragebasisandincludesinvoicesofgoodspurchasedandexpenditureincurredinacquiringtheinventoriesandbringingthemtotheirexistinglocationandcondition.
Thecostofwork-in-progresscomprisesthecostofrawmaterials,directlabourandaproportionofproductionoverheads.
Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostsofcompletionandtheestimatedcostsnecessarytomakethesale.
Write-downtonetrealisablevalueandinventorylossesarerecognisedasareexpensewhenitoccurredandanyreversalisrecognisedintheprofitorlossintheperiodinwhichitoccurs.
3.10 CashandCashEquivalents
Cashandcashequivalents instatementsofcashflowscomprisecash inhand,bankbalances,depositswithlicensed banks and highly liquid investments that are readily convertible to a known amount of cash and which are subjecttoaninsignificantriskofchangesinvalue.
Forthepurposeofthestatementsofcashflows,cashandcashequivalentsarepresentednetofpledgeddeposits.
Forthepurposeofthestatementsoffinancialposition,cashandcashequivalentsrestrictedtobeusedtosettlealiabilityof12monthsormoreafterthereportingdateareclassifiedasnon-currentassets.
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3.11 ImpairmentofNon-financialAssets
Furtherdisclosuresrelatingtoimpairmentofnon-financialassetsarealsoprovidedinthefollowingnotestothefinancialstatements:-
Note2.5 -SignificantaccountingestimatesandjudgementsNote3.3 -Property,plantandequipmentNote3.5.1.1 -Right-of-useassetsNote3.7 -Intangibleassets
TheGroupandtheCompanyassessateachreportingdatewhetherthereisanindicationthatanassetmaybeimpaired.Ifanyindicationexists,orwhenannualimpairmenttestingforanassetisrequired,theGroupandtheCompanyestimatetheasset’srecoverableamount.Anasset’srecoverableamountisthehigherofanasset’sorcash-generatingunit’s(“CGU”)fairvaluelesscoststosellanditsvalueinuseandisdeterminedforanindividualasset,unlesstheassetdoesnotgeneratecashinflowsthatarelargelyindependentofthosefromotherassetsorgroupsofassets.WherethecarryingamountofanassetorCGUexceedsitsrecoverableamount,theassetisconsideredimpairedandiswrittendowntoitsrecoverableamount.
Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.Indeterminingfairvaluelesscoststosell,recentmarkettransactionsaretakenintoaccount,ifavailable.Ifnosuchtransactionscanbeidentified,anappropriatevaluationmodelisused.Thesecalculationsarecorroboratedbyvaluationmultiples,quotedsharepricesforpubliclytradedsubsidiariesorotheravailablefairvalueindicators.
TheGroupandtheCompanybasetheir impairmentcalculationondetailedbudgetsand forecastcalculationswhicharepreparedseparatelyforeachoftheGroup’sandoftheCompany’scash-generatingunitstowhichtheindividualassetsareallocated.Thesebudgetsandforecastcalculationsaregenerallycoveringaperiodoffiveyears.Forlongerperiods,along-termgrowthrateiscalculatedandappliedtoprojectfuturecashflowsafterthefifthyear.
Impairment losses including impairment on inventories, are recognised in theprofit or loss in those expensecategoriesconsistentwiththefunctionoftheimpairedasset.
Forassetsexcludinggoodwill,anassessmentismadeateachreportingdateastowhetherthereisanyindicationthatpreviouslyrecognisedimpairmentlossesmaynolongerexistormayhavedecreased.Ifsuchindicationexists,theGroupand theCompanyestimate theasset’sorcash-generatingunit’s recoverableamount.Apreviouslyrecognised impairment loss is reversed only if there has been a change in the assumptions used to determine theasset’srecoverableamountsincethelastimpairmentlosswasrecognised.Thereversalislimitedsothatthecarryingamountoftheassetdoesnotexceeditsrecoverableamount,norexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciation,hadnoimpairmentlossbeenrecognisedforassetinprioryears.Suchreversalisrecognisedintheprofitorloss.
Intangibleassetswithindefiniteusefullivesaretestedforimpairmentannuallyasattheendofeachreportingperiod,eitherindividuallyoratthecash-generatingunitlevel,asappropriateandwhencircumstancesindicatethatthecarryingvaluemaybeimpaired.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.12 Equity,ReservesandDistributionstoOwners
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting allofitsliabilities.Ordinarysharesareequityinstruments.
Retainedearnings/accumulatedlossesincludeallcurrentandpriorperiods’accumulatedprofits/losses.
Therevaluationreservewithinequitycomprisesgainsorlossesduetotherevaluationofproperties.ForeigncurrencytranslationdifferencesarisingonthetranslationoftheGroup’sforeignentitiesareincludedintheexchangetranslationreserve.GainsandlossesoncertainfinancialinstrumentsareincludedinreservesforFVOCIfinancialassets.
Interimdividendsaresimultaneouslyproposedanddeclared,becausethearticlesofassociationoftheCompanygrantstheDirectorstheauthority todeclare interimdividends.Consequently, interimdividendsarerecogniseddirectlyasaliabilitywhentheyareproposedanddeclared.
FinaldividendsproposedbytheDirectorsarenotaccountedforinshareholders’equityasanappropriationofretainedearnings,untiltheyhavebeenapprovedbytheshareholdersinageneralmeeting.Whenthesedividendshavebeenapprovedbytheshareholdersanddeclared,theyarerecognisedasaliability.
Thedistributionofnon-cashassetstoownersisrecognisedasdividendpayablewhenthedividendwasapprovedbyshareholders.Thedividendpayableismeasuredatthefairvalueofthesharestobedistributed.Attheendofthefinancialyearandonthesettlementdate,theCompanyreviewsthecarryingamountofthedividendpayable,withanychangesinthefairvalueofthedividendpayablerecognisedinequity.WhentheCompanysettlesthedividendpayable,thedifferencebetweenthecarryingamountofthedividenddistributedandthecarryingamountofthedividendpayableisrecognisedasaseparatelineiteminprofitorloss.
AlltransactionswithownersoftheCompanyarerecordedseparatelywithinequity.
3.13 TreasuryShares
Whensharecapitalrecognisedasequityisrepurchased,theamountoftheconsiderationpaid,includingdirectlyattributablecosts,netofanytaxeffects,isrecognisedasadeductionfromequity.Repurchasedsharesthatarenotsubsequentlycancelledareclassifiedastreasurysharesinthestatementsofchangesinequity.
Whentreasurysharesaresoldorreissuedsubsequently,thedifferencebetweenthesalesconsiderationnetofdirectlyattributablecostsandthecarryingamountofthetreasurysharesisrecognisedinequity.
3.14 Share-basedPayments
TheGroupoperatesanequity-settledshare-basedpaymentsschemetoallowtheemployeesoftheGrouptoacquireordinarysharesoftheCompany.ThegrantbytheCompanyofoptionsoveritsequityinstrumentstotheemployeesofsubsidiaryundertakingsintheGroupistreatedasacapitalcontributioninthesubsidiaries’financialstatements.Thefairvalueofemployeeservicesreceived,measuredbyreferencetothegrantdatefairvalue,isrecognisedoverthevestingperiodasanincreasetoinvestmentinsubsidiaryundertakings,withacorrespondingcredittoequity-settledemployeebenefitsreserveintheCompany’sfinancialstatements.
ThefairvaluedeterminedatthegrantdateisrecognisedasexpenseinprofitorlossinaccordancewithMFRS2Share-basedPaymentover theperiodsduringwhich theemployeesbecomeunconditionallyentitled to theoptions,basedontheGroup’sestimateoftheordinarysharesthatwilleventuallyvest,andadjustedfortheeffectofnon-market-basedvestingconditions.Attheendofeachreportingperiod,theGrouprevisestheestimatesofthenumberofoptionsthatareexpectedtobecomeexercisable,andrecognisestheimpactoftherevisionoftheoriginalestimates.
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3.15 GovernmentGrants
GovernmentgrantsarerecognisedatfairvaluewhenthereisreasonableassurancethattheGroupwillcomplywiththeconditionsattachingtothemandthegrantswillbereceived.
Governmentgrantarecarriesinthestatementsoffinancialpositionandallocatedtoprofitorlossovertheexpectedusefullivesof10yearsoftherelatedplantandmachineryorovertheperiodoftheoperatingexpendituretowhichthegrantsareintendedtocompensate.
3.16 Revenue
Revenue from contracts with customers is recognised when or as a performance obligation in the contract with customerissatisfied, i.e.whenthe“control”oftheservicesunderlyingtheparticularperformanceobligationistransferredtothecustomer.
Aperformanceobligationisapromiseinacontractwithacustomertotransfertothecustomereither:-
(a) goodorservice(orabundleofgoodsorservices)thatisdistinct;or(b) a series of distinct goods or services that are substantially the same and that have the same pattern of
transfertothecustomer.
RevenuefromcontractswithcustomersismeasuredattheamountofconsiderationtowhichtheGroupandtheCompanyexpecttobeentitledinexchangefortransferringthepromisedservicestothecustomers,excludingamountscollectedonbehalfofthirdpartiessuchassalestaxesorservicestaxes.Iftheamountofconsiderationvariesduetodiscounts,rebates,refunds,credits,incentives,penaltiesorothersimilaritems,theGroupandtheCompanyestimatetheamountofconsiderationtowhichitwillbeentitledbasedontheexpectedvalueorthemostlikelyoutcome.
If thecontractwithcustomercontainsmore thanoneperformanceobligation, theamountofconsideration isallocated to each performance obligation based on the relative standalone selling prices of the goods or services promisedinthecontract.
Theamountofvariableconsiderationisrecognisedtotheextentthatitishighlyprobablethatasignificantreversal
in the amount of cumulative revenue recognised will not occur when the uncertainly associated with the variable considerationissubsequentlyresolved.
Thecontrolofthepromisedgoodsorservicesmaybetransferredovertimeoratapointintime.Thecontroloverthegoodsorservicesistransferredovertimeandrevenueisrecognisedovertimeif:-
(a) thecustomersimultaneouslyreceivesandconsumesthebenefitsprovidedbytheCompany’sperformanceastheCompanyperforms;
(b) theCompany’sperformancecreatesorenhancesanassetthatthecustomercontrolsastheassetiscreatedorenhanced;or
(c) theCompany’sperformancedoesnotcreateanassetwithanalternativeuseandtheCompanyhasanenforceablerighttopaymentforperformancecompletedtodate.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.16 Revenue(cont’d)
Revenueforperformanceobligationthatisnotsatisfiedovertimeisrecognisedatthepointintimeatwhichthecustomerobtainscontrolofthepromisedgoodsorservices.
Forperformanceobligationswhereanyoneoftheaboveconditionsnotmet,revenueisrecognisedatapointintimeatwhichtheperformanceobligationissatisfied.
WhentheGroupandtheCompanysatisfyaperformanceobligationbydeliveringthepromisedgoodsorservice,itcreatesacontractbasedonassetontheamountofconsiderationearnedbytheperformance.Wheretheamountofconsiderationreceivedfromacustomerexceedstheamountofrevenuerecognised,thisgivesrisetoacontractliability.
3.16.1 SalesofGoods
Revenue relating to sales of goods is recognised net of sales returns and discount upon the transfer of controlofthegoodstothecustomers.Revenueisnotrecognisedtoextentweretherearesignificantuncertaintiesregardingrecoveryoftheconsiderationdue,associatedcostsorthepossiblereturnofgoods.
3.16.2 SaleofEquipment
Revenue from sale of equipment is recognised at the point in time when control of the asset is transferred tothecustomer,generallyondeliveryoftheequipment.Thenormalcredittermis30to90daysupondelivery.
3.16.3 InstallationServices
TheGroupprovidesinstallationservicesthatisbundledtogetherwiththesaleofequipmenttocustomers.
TheGrouprecognisesrevenuefrominstallationservicesovertime,usingrevenuemethodtomeasureprogresstowardscompletesatisfactionoftheservice,becausethecustomersimultaneouslyreceivesandconsumesthebenefitsprovidedbytheGroup.Revenuefromthesaleofthemachinery,equipmentandgeneratorsarerecognisedatapointintime,generallyupondeliveryoftheequipment.
3.16.4 ConstructionContract
Revenuefromaconstructioncontractcanbeestimatedreliably,contractrevenueandcontractcostsassociatedwith the construction contract are recognised as revenue and expenses respectively byreferencetothestageofcompletionofthecontractactivityatthereportingdate.Thestageofcompletionismeasuredusingtheoutputmethod,whichisbasedonthelevelofcompletionofthedevelopmentphaseoftheprojectascertifiedbyprofessionalengineersorconsultants.
Wheretheoutcomeofacontractcannotbereasonablyestimated,revenueisrecognisedtotheextentofconstructioncontractcostsincurredthatisprobablewillberecoverable,andthecontractcostsshallberecognisedasanexpenseintheyearinwhichtheyareincurred.
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(Cont’D)
3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.16 Revenue(cont’d)
3.16.4 ConstructionContract(cont’d)
Whenitisprobablethattotalcostswillexceedtotalrevenue,theforeseeablelossisimmediatelyrecognisedintheprofitor lossirrespectiveofwhetherconstructionworkhascommencedornot,orofthestageofcompletionofdevelopmentactivity,oroftheamountsofprofitsexpectedtoariseonotherunrelatedconstructioncontracts.
Theexcessof revenue recognised in theprofit or lossover thebillings to customersof contracts isrecognisedascontractasset.
Theexcessofbillingstocustomersofcontractsoverrevenuerecognisedintheprofitorlossisrecognisedascontractliability.
3.16.5 ContractBalances
Contract Assets
Acontractassetistherighttoconsiderationinexchangeforgoodsorservicestransferredtothecustomer.IftheGroupperformbytransferringgoodsorservicestoacustomerbeforethecustomerpaysconsiderationorbeforepaymentisdue,acontractassetisrecognisedfortheearnedconsiderationthatisconditional.
TradeReceivables
AreceivablerepresentstheGroup’srighttoanamountofconsiderationthatisunconditional(i.e.,onlythepassageoftimeisrequiredbeforepaymentoftheconsiderationisdue).
ContractLiabilities
AcontractliabilityistheobligationtotransfergoodsorservicestoacustomerforwhichtheGrouphasreceivedconsideration (oranamountofconsideration isdue) fromthecustomer. IfacustomerpaysconsiderationbeforetheGrouptransfergoodsorservicestothecustomer,acontractliabilityisrecognisedwhenthepaymentismadeorthepaymentisdue(whicheverisearlier).ContractliabilitiesarerecognisedasrevenuewhentheGroupperformunderthecontract.
3.16.6 RenderingofServices
Revenuefromrenderingofservicesisrecognisedupontheservicescompleted.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.16 Revenue(cont’d)
3.16.7 RevenuefromOtherSources
Rental Income
Rental income isaccounted foronastraight-linebasisover the leaseterms.Theaggregatecostsofincentives provided to lessees are recognised as a reduction of rental income over the lease team on a straight-linebasis.
Interest Income
Interest income iscalculatedbyapplying theeffective interest rate to thegrosscarryingamountofafinancialassetexceptforfinancialassetsthatsubsequentlybecomecredit-impaired.Forcreditimpairedfinancialassets,theeffectiveinterestrateisappliedtothenetcarryingamountofthefinancialasset.
Dividend Income
DividendincomeisrecognisedinprofitorlossonthedatethattheGroup’sortheCompany’srighttoreceivepaymentisestablished,whichisinthecaseofquotedsecuritiesistheex-dividenddate.
Management Fee Income
Managementfeesarerecognisedwhenservicesarerendered.
3.17 EmployeeBenefits
3.17.1 Short-termEmploymentBenefits
Short-term employment benefits, such aswages, salaries, bonuses, allowances and social securitycontributions,arerecognisedasexpensewhentheemployeeshaverenderedservicestotheGroupandtheCompany.
TheexpectedcostofbonuspaymentsisrecognisedwhentheGroupandtheCompanyhaveapresentlegal or constructive obligation to make such payments as a result of past events and a reliable estimate oftheobligationcanbemade.ApresentobligationexistswhentheGroupandtheCompanyhavenorealisticalternativebuttomakethepayments.
3.17.2 DefinedContributionPlans
Definedcontributionplansarepost-employmentbenefitplansunderwhichtheGroupandtheCompanypayfixedcontributionsintoindependententitiesoffundsandwillhavenolegalorconstructiveobligationtopayfurthercontributionifanyofthefundsdonotholdsufficientassetstopayallemployeebenefitsrelatingtoemployeeservicesinthecurrentandprecedingfinancialyears.
Suchcontributionsare recognisedasexpenses inprofitor lossas incurred.As requiredby law, thecompaniesinMalaysiamakesuchcontributionstotheEmployeesProvidentFund(“EPF”).SomeoftheGroup’sforeignsubsidiariesalsomakecontributionstotherespectivecountry’sstatutorypensionschemes.
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(Cont’D)
3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.18 BorrowingCosts
Borrowingcoststhatarenotdirectlyattributabletotheacquisition,constructionorproductionofaqualifyingassetarerecognisedinprofitorlossusingtheeffectiveinterestmethod.
Borrowingcostsdirectlyattributabletotheacquisition,constructionorproductionofqualifyingassets,whichareassetsthatnecessarilytakeasubstantialperiodoftimetogetreadyfortheirintendeduseorsale,arecapitalisedaspartofthecostofthoseassets.
Thecapitalisationofborrowingcostsaspartofthecostofaqualifyingassetcommenceswhenexpenditurefortheassetisbeingincurred,borrowingcostsarebeingincurredandactivitiesthatarenecessarytopreparetheassetforitsintendeduseorsaleareinprogress.Capitalisationofborrowingcostsissuspendedorceaseswhensubstantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted orcompleted.
Allotherborrowingcostsareexpensedintheperiodinwhichtheyareincurred.BorrowingcostsconsistofinterestandothercoststhattheGroupincurredinconnectionwiththeborrowingoffunds.
Investment incomeearnedon the temporary investment of specificborrowingspending their expenditure onqualifyingassetsisdeductedfromtheborrowingcostseligibleforcapitalisation.
3.19 TaxExpenses
Taxexpensescompriseofcurrenttaxanddeferredtax.Currenttaxanddeferredtaxarerecognisedinprofitorlossexcepttotheextentthatitrelatestoabusinesscombinationoritemsrecogniseddirectlyinequityorothercomprehensiveincome.
3.19.1 CurrentTax
Currenttaxistheexpectedtaxpayableorreceivableonthetaxableincomeorlossforthefinancialyear,usingtaxratesenactedorsubstantivelyenactedbytheendofthereportingperiod,andanyadjustmenttotaxpayableinrespectofpreviousfinancialyears.
Currenttaxisrecognisedinthestatementsoffinancialpositionasaliability(oranasset)totheextentthatitisunpaid(orrefundable).
3.19.2 DeferredTax
Deferredtax isrecognisedusingthe liabilitymethod,providingfor temporarydifferencesbetweenthecarryingamountsofassetsandliabilitiesinthestatementsoffinancialpositionandtheirtaxbases.Deferredtaxisnotrecognisedforthetemporarydifferencesarisingfromtheinitialrecognitionofgoodwill,theinitialrecognition of assets and liabilities in a transaction that is not a business combination and that affects neitheraccountingnortaxableprofitnorloss.Deferredtaxismeasuredatthetaxratesthatareexpectedtobeappliedtothetemporarydifferenceswhentheyreverse,basedonthelawsthathavebeenenactedorsubstantivelyenactedbytheendofthereportingperiod.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.19 TaxExpenses(cont’d)
3.19.2 DeferredTax(cont’d)
Deferredtaxassetsandliabilitiesareoffsetifthereisalegallyenforceablerighttooffsetcurrenttaxliabilitiesandassets,andtheyrelatetoincometaxesleviedbythesametaxauthorityonthesametaxableentity,orondifferenttaxentities,buttheyintendtosettlecurrenttaxliabilitiesandassetsonanetbasisortheirtaxassetsandliabilitieswillberealisedsimultaneously.
Adeferredtaxassetisrecognisedtotheextentthatitisprobablethatfuturetaxableprofitswillbeavailableagainstwhichthetemporarydifferencecanbeutilised.Deferredtaxassetsarereviewedattheendofeachreportingperiodandarereducedtotheextentthatitisnolongerprobablethattherelatedtaxbenefitwillberealised.
3.20 GoodsandServicesTax(“GST”)
GST is aconsumption taxbasedon value-addedconcept.GST is imposedongoodsandservicesat everyproductionanddistributionstageinthesupplychainincludingimportationofgoodsandservices,attheapplicabletaxrateof6%.InputGSTthattheGrouppaidonpurchasesofbusinessinputscanbedeductedfromoutputGST.
Revenues,expenses,assetsandliabilitiesarerecognisednetoftheamountofGSTexcept:
- WheretheGSTincurredinapurchaseofassetsorservicesisnotrecoverablefromtheauthority,inwhichcasetheGSTisrecognisedaspartofthecostofacquisitionoftheassetsoraspartoftheexpenseitemasapplicable;and
- ReceivablesandpayablesthatarestatedwiththeamountofGSTincluded.
ThenetamountofGSTrecoverablefrom,orpayableto,thecustomsisincludedaspartofreceivablesorpayablesinthestatementsoffinancialposition.
TheMalaysianGovernmenthaszeroratedtheGSTeffectivefrom1June2018.ThismeantheGSTrateonthesuppliesofgoodsorservicesorontheimportationofgoodshasbeenrevisedfrom6%to0%.
3.21 SalesandServiceTax(“SST”)
ExpensesandassetsarerecognisednetoftheamountofSST,except:
- WhentheSSTincurredonapurchaseofassetsorservicesisnotrecoverablefromthetaxationauthority,inwhichcase,theSSTisrecognisedaspartofthecostofacquisitionoftheassetoraspartoftheexpenseitem,asapplicable;and
- WhenreceivablesandpayablesarestatedwiththeamountofSSTincluded.
TheamountofSSTpayabletotaxationauthorityisincludedaspartofpayablesinthestatementsoffinancialposition.
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notes to tHe FinanCiaL stateMents
(Cont’D)
3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.22 Contingencies
3.22.1 ContingentLiabilities
Whereitisnotprobablethatanoutflowofeconomicbenefitswillberequired,ortheamountcannotbeestimatedreliably,theobligationisnotrecognisedinthestatementsoffinancialpositionandisdisclosedasacontingentliability,unlesstheprobabilityofoutflowofeconomicbenefitsisremote.
Possibleobligations,whoseexistencewillonlybeconfirmedbytheoccurrenceornon-occurrenceofoneormorefutureevents,arealsodisclosedascontingentliabilitiesunlesstheprobabilityofoutflowofeconomicbenefitsisremote.
3.22.2 ContingentAssets
Whenaninflowofeconomicbenefitofanassetisprobablewhereitarisesfrompasteventsandwhereexistencewillbeconfirmedonlybytheoccurrenceornon-occurrenceofoneormoreuncertainfutureeventsnotwhollywithinthecontroloftheentity,theassetisnotrecognisedinthestatementsoffinancialpositionbut isbeingdisclosedasacontingentasset.Whenthe inflowofeconomicbenefit isvirtuallycertain,thentherelatedassetisrecognised.
3.23 Provisions
ProvisionsarerecognisedwhentheGroupandtheCompanyhaveapresentobligation(legalorconstructive)asaresultofapastevent,itisprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligationandareliableestimatecanbemadeoftheamountoftheobligation.WhentheGroupandtheCompanyexpectsomeorallofaprovisiontobereimbursed,forexample,underaninsurancecontract,thereimbursementisrecognisedasaseparateasset,butonlywhenthereimbursementisvirtuallycertain.Theexpenserelatingtoaprovisionispresentedintheprofitorlossnetofanyreimbursement.
Iftheeffectofthetimeofmoneyismaterial,provisionsarediscountedusingacurrentpretaxratethatreflects,whereappropriate,therisksspecifictotheliability.Whendiscountingisused,theincreaseintheprovisionduetothepassageoftimeisrecognisedasafinancecost.
3.24 OperatingSegments
Operatingsegmentsarereportedinamannerconsistentwiththeinternalreportingprovidedtothechiefoperatingdecisionmaker.Thechiefoperatingdecisionmaker,whoisresponsibleforallocatingresourcesandassessingperformanceoftheoperatingsegment,hasbeenidentifiedastheboardofdirectorsthatmakesstrategicdecisions.
SegmentreportingispresentedforenhancedassessmentoftheGroup’srisksandreturns.Businesssegmentsprovide products or services that are subject to risks and returns that are different from those of other business segments.Geographicalsegmentsprovideproductsorserviceswithinaparticulareconomicenvironmentthatissubjecttorisksandreturnsthataredifferentfromthosecomponentsoperatinginothereconomicenvironments.
Segmentrevenue,results,assetsandliabilitiesarethoseamountsresultingfromtheoperatingactivitiesofasegmentthat are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to thesegment.Segmentrevenue,results,assetsandliabilitiesaredeterminedaftereliminationofintragroupbalancesandintragrouptransactionsaspartoftheconsolidationprocess.
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3. SIGNIFICANTACCOUNTINGPOLICIES(CONT’D)
3.25 EarningsperOrdinaryShare
TheGrouppresentsbasicanddilutedearningspershare(“EPS”)dataforitsordinaryshares.
BasicEPSiscalculatedbydividingtheprofitorlossattributabletoordinaryshareholdersoftheCompanybasedontheweightedaveragenumberofordinarysharesinissueduringtheperiod.
DilutedEPSiscalculatedbydividingtheprofitorlossattributabletoordinaryshareholdersoftheGroupbasedontheweightedaveragenumberofsharesinissue,fortheeffectsofalldilutivepotentialordinarysharesduringtheperiod.
3.26 RelatedParties
ArelatedpartyisapersonorentitythatisrelatedtotheGroupandtheCompany.Arelatedpartytransactionisatransferofresources,servicesorobligationsbetweentheGroupandtheCompanyanditsrelatedparty,regardlessofwhetherapriceischarged.
(a) Apersonoraclosememberofthatperson’sfamilyisrelatedtotheGroupandtheCompanyifthatperson:-
(i) HascontrolorjointcontrolovertheGroupandtheCompany;(ii) HassignificantinfluenceovertheGroupandtheCompany;or(iii) IsamemberofthekeymanagementpersonnelofthecorporateshareholdersoftheGrouporthe
Company.
(b) AnentityisrelatedtotheGroupandtheCompanyifanyofthefollowingconditionsapplies:-
(i) TheentityandtheGrouportheCompanyaremembersofthesamegroup;(ii) Theentityisanassociateorjointventureoftheotherentity;(iii) BoththeGrouportheCompanyandtheentitiesarejointventuresofthesamethirdparty;(iv) TheGrouportheCompanyisajointventureofathirdentityandtheotherentityisanassociateof
thesamethirdentity;(v) Theentityisapost-employmentbenefitplanforthebenefitsofemployeesofeithertheGrouporthe
CompanyforanentityrelatedtotheGrouportheCompany;(vi) Theentityiscontrolledorjointly-controlledbyapersonidentifiedin(a)above;(vii) Apersonidentifiedin(a)(i)abovehassignificantinfluenceovertheentityorisamemberofthekey
managementpersonnelofthecorporateshareholdersoftheGrouportheentity;and(viii) Theentity,oranymemberofagroupofwhichitisapart,provideskeymanagementpersonnelservices
tothecorporateshareholdersoftheGrouportotheGroup.
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no
tes
to t
He
Fin
an
Cia
L st
ate
Me
nts
(Co
nt’
D)
4.
PROPERTY,PLA
NTANDEQUIPMENT(C
ONT’D
)
Grou
p
Free
holdla
nd
Furn
iture
Wor
ksho
pOf
fice
Motor
Plan
tand
As
setsund
er
andbu
ilding
san
dfittin
gs
Reno
vatio
ntools
equip
men
tve
hicles
Eq
uipmen
tmac
hinery
cons
truction
Total
RM
RM
RM
RM
RM
RM
RM
RM
RM
RM
Cost
At1.
1.201
914
,154,3
65
1,201
,638
3,33
9,622
2,3
00
8,04
5,176
1,
246,5
80
10,69
3,031
38
,927,0
68
26,03
7,695
10
3,647
,475
Addit
ions
–17
5,522
82
2,607
20
8,196
38
7,625
–
196,7
61
456,8
90
8,513
,167
10,76
0,768
Acqu
isitio
nofs
ubsid
iaries
–
134,4
54
99,52
4–
82,35
1–
––
–31
6,329
Disp
osal
––
––
––
(2,17
3,669
)–
–(2,
173,6
69)
At31
.12.20
19
14,15
4,365
1,5
11,61
44,2
61,75
321
0,496
8,5
15,15
21,2
46,58
08,7
16,12
339
,383,9
58
34,55
0,862
11
2,550
,903
Recla
ssific
ation
–
––
–(21
,259)
–21
,259
3,805
,764
(3,80
5,764
)–
Addit
ions
9,008
,123
18,62
716
0,760
23
,281
1,819
,586
7,878
51
,259
2,204
,944
190,4
60,51
520
3,754
,973
Borro
wing
costs
capit
alise
d
atrat
eof4
.01%per
annu
m–
––
––
––
–81
,231
81,23
1Disp
osal
––
––
–(70
9,452
)–
––
(709,4
52)
Trans
ferfro
m/(to
)
right-
of-us
eassets
–
––
––
–5,2
11,18
0–
(14,04
1,358
)(8,
830,1
78)
Trans
ferto
investm
entp
rope
rties
(1,21
9,163
)–
––
––
––
–(1,
219,1
63)
Forei
gnex
chan
gediffe
rence
–
––
–(5)
–
––
–(5)
At31
.12.20
20
21,94
3,325
1,5
30,24
14,4
22,51
323
3,777
10
,313,4
74
545,0
06
13,99
9,821
45
,394,6
66
207,2
45,48
630
5,628
,309
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He
Fin
an
Cia
L st
ate
Me
nts
(Co
nt’
D)
4.
PROPERTY,PLA
NTANDEQUIPMENT(C
ONT’D
)
Grou
p
Free
holdla
nd
Furn
iture
Wor
ksho
pOf
fice
Motor
Plan
tand
As
setsund
er
andbu
ilding
san
dfittin
gs
Reno
vatio
ntools
equip
men
tve
hicles
Eq
uipmen
tmac
hinery
cons
truction
Total
RM
RM
RM
RM
RM
RM
RM
RM
RM
RM
Accu
mula
tedde
prec
iation
At1.
1.201
91,
370,4
41
824,2
80
1,34
2,448
–
7,31
1,145
1,
090,0
92
8,74
2,312
37
,885,1
25
–58
,565,8
43Ac
quisitio
nofs
ubsid
iaries
–
110,4
01
68,90
0–
42,45
1–
––
–22
1,752
Charg
eforth
efina
ncialye
ar14
5,316
16
5,348
45
1,334
–
292,6
10
46,53
149
5,496
35
8,473
–
1,955
,108
Writt
enof
f–
––
––
–(2,
172,7
84)
––
(2,17
2,784
)
At31
.12.20
19
1,51
5,757
1,
100,0
29
1,86
2,682
–
7,64
6,206
1,
136,6
23
7,06
5,024
38
,243,5
98
–58
,569,9
19
Charg
eforth
efina
ncialye
ar31
9,386
15
9,682
50
8,684
46
,755
442,9
35
44,83
198
0,253
1,1
83,05
6–
3,685
,582
Disp
osal
––
––
–(70
9,450
)–
––
(709,4
50)
Trans
ferfro
mrig
ht-of-
usea
ssets
–
––
––
–3,7
76,09
8–
–3,7
76,09
8Tra
nsfer
toin
vestm
entp
rope
rties
(331,2
12)
––
––
––
––
(331,2
12)
At31
.12.20
20
1,503
,931
1,259
,711
2,371
,366
46,75
58,0
89,14
147
2,004
11
,821,3
75
39,42
6,654
–
64,99
0,937
Net c
arry
ing am
ount
At31
.12.20
20
20,43
9,394
27
0,530
2,0
51,14
718
7,022
2,2
24,33
373
,002
2,178
,446
5,968
,012
207,2
45,48
624
0,637
,372
At31
.12.20
19
12,63
8,608
41
1,585
2,
399,0
71
210,4
96
868,9
46
109,9
57
1,65
1,099
1,
140,3
60
34,55
0,862
53
,980,9
84
110
T7 Global berhad RegistRation no. 200401023809 (662315-U)
notes to tHe FinanCiaL stateMents
(Cont’D)
4. PROPERTY,PLANTANDEQUIPMENT(CONT’D)
TheGroup’scostandcarryingamountsofthefreeholdlandisnotsegregatedfromthebuildingsasrequireddetailsarenotavailableandunreasonableexpenseswouldbeincurred.
4.1 Equipmentsubjecttooperatinglease
TheGroupleasesomeofitsgasgeneratorstothirdparties.Alltheleasesarecancellablewithin3to6monthspriorwrittennoticeorpaymentof3to6monthsfeeinlieuofnotice.
4.2 Assetschargedtosecurebankingfacilities
Thenetcarryingamountofproperty,plantandequipmentoftheGroupthathavebeenchargedtosecurebankingfacilitiesgrantedtoasubsidiaryasfollow:-
Group 2020 2019 RM RM Freeholdlandandbuilding 18,683,005 9,919,533Assetsunderconstruction – 14,041,358 18,683,005 23,960,891
IncludedintheabovefreeholdlandandbuildingwithnetcarryingamountofRM488,107(2019:RM504,110),thetransferofregisternameoftitledeedisstillinprogress.
ThestratatitlesoffreeholdbuildingswithcarryingamountofRM8,827,961(2019:RMNil)areyettobeissuedbyrelevantauthorities.
5. RIGHT-OF-USEASSETS
TheGrouphasleasesforleaseholdlandandbuilding,plant,machinery,equipmentandmotorvehiclesthatrunbetween5to99years(2019:5to99years).
TheGroupalsohaveleasesofpremises,machineryandequipmentwithleasetermsof12monthsorless.TheGroupapplythe‘short-termlease’recognitionexemptionfortheseleases.
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5. RIGHT-OF-USEASSETS(CONT’D)
Setoutarethecarryingamountsofright-of-useassetsrecognisedandthemovementsduringthefinancialyear:-
Group Leasehold land and Leasehold Plant and Motor building building Equipment machinery vehicles Total RM RM RM RM RM RMCost At1January2019 4,516,836 – 5,211,180 381,200 1,295,501 11,404,717Additions 627,264 – – – 1,580,063 2,207,327Transfertoproperty, plantandequipment – – – – (126,660) (126,660) At31December2019 5,144,100 – 5,211,180 381,200 2,748,904 13,485,384Additions – – – 3,310,000 1,379,232 4,689,232Transferfrom/(to)property, plantandequipment – 14,041,358 (5,211,180) – – 8,830,178Transfer to investment properties (1,967,622) – – – – (1,967,622) At31December2020 3,176,478 14,041,358 – 3,691,200 4,128,136 25,037,172
Accumulateddepreciation At1January2019 133,979 – 3,106,089 88,947 86,367 3,415,382Chargeforthefinancialyear 87,534 – 558,341 76,240 423,833 1,145,948 At31December2019 221,513 – 3,664,430 165,187 510,200 4,561,330Chargeforthefinancialyear 44,656 280,827 111,668 224,907 624,958 1,287,016Transfertoproperty, plantandequipment – – (3,776,098) – – (3,776,098)Transfer to investment properties (166,849) – – – – (166,849) At31December2020 99,320 280,827 – 390,094 1,135,158 1,905,399
Net carrying amount At31December2020 3,077,158 13,760,531 – 3,301,106 2,992,978 23,131,773
At31December2019 4,922,587 – 1,546,750 216,013 2,238,704 8,924,054
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notes to tHe FinanCiaL stateMents
(Cont’D)
5. RIGHT-OF-USEASSETS(CONT’D)
As a lessee
(a) Theaboveplant,machinery,equipmentandmotorvehiclesareunderfinanceleasearrangement.
(b) TheGroup’scostandcarryingamountsoftheleaseholdlandisnotsegregatedfromthebuildingsasrequireddetailsarenotavailableandunreasonableexpenseswouldbeincurred.
(c) The net carrying amount of leasehold land and building of theGroup amounting toRM16,837,689 (2019:RM3,110,265)havebeenchargedtosecurebankingfacilitiesgrantedtoasubsidiary.
As a lessor
TheGrouphasenteredintooperatingleaseontheequipment.Theleaseiscancellablewith3monthspriorwrittennoticeorpaymentof3to6monthsfeeinlieuofnotice.
6. INVESTMENTPROPERTIES
Group Leasehold Freehold Leasehold land and land and building building building Total RM RM RM RM Fair value At1.1.2019 1,250,000 – – 1,250,000Fairvalueadjustment 50,000 – – 50,000 At31.12.2019 1,300,000 – – 1,300,000Transferfromproperty, plantandequipment – – 1,100,000 1,100,000Transferfromright-of-useassets – 1,800,773 – 1,800,773 At31.12.2020 1,300,000 1,800,773 1,100,000 4,200,773
TheGroup’sfairvalueamountsofthefreeholdlandandleaseholdlandisnotsegregatedfromthebuildingsasrequireddetailsarenotavailableandunreasonableexpenseswouldbeincurred.
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6. INVESTMENTPROPERTIES(CONT’D)
Incomeandexpensesrecognisedinprofitorloss
Group 2020 2019 RM RM Rentalincomefrominvestmentproperties 102,800 60,000Directoperatingexpensesforinvestmentproperties 6,438 –
Fairvaluebasicofinvestmentproperties
Investmentpropertiesarestatedatfairvalue,whichhasbeendeterminedbasedonvaluationsattheendofreportingdate.Asat31December2020and31December2019,thefairvalueofinvestmentpropertieswereprovidedbyNgShinLin,aregisteredvaluerofSolidRealEstateConsultantsSdn.Bhd..TheDirectorsareoftheopinionthattheprevailingmarketconditionatthereportingdatedidnotsignificantlychangefromthedateonwhichtheindependentvaluationwascarriedout.
Level 2 Fair Value
Fairvaluemeasurementoftheinvestmentpropertieswerecategorisedasfollows:-
Group 2020 2019 Level 2 Level 2 RM RM Recurringfairvaluemeasurement:- Leaseholdbuilding 1,300,000 1,300,000Leaseholdlandandbuilding 1,800,773 –Freeholdlandandbuilding 1,100,000 –
Level2fairvaluesoflandandbuildingshavebeengenerallyderivedusingthesalescomparisonapproach.Salespriceofcomparablepropertiesincloseproximityareadjustedfordifferencesinkeyattributessuchaspropertysize.Themostsignificantinputintothisvaluationapproachispricepersquarefootofcomparableproperties.
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7. INTANGIBLE ASSETS
Group Development Goodwillon costs Patent consolidation Total RM RM RM RM
Cost At1.1.2019 4,099,075 15,055 339,253 4,453,383Acquisitionofasubsidiary – – 163,616 163,616Writtenoff – – (163,616) (163,616)
At31.12.2019/ At31.12.2020 4,099,075 15,055 339,253 4,453,383
Accumulated amortisationAt1.1.2019 2,302,588 13,986 – 2,316,574Chargeforthefinancialyear 273,272 124 – 273,396
At31.12.2019 2,575,860 14,110 – 2,589,970Chargeforthefinancialyear 273,272 124 – 273,396
At31.12.2020 2,849,132 14,234 – 2,863,366
AccumulatedimpairmentAdditionduringthefinancial year/At31.12.2020 1,249,942 820 339,253 1,590,015
Net carrying amountAt31.12.2020 1 1 – 2
At31.12.2019 1,523,215 945 339,253 1,863,413
Thedevelopmentcostsincurredindevelopinggasgeneratorisamortisedonastraight-linebasisovertheirusefullivesof15years.
Thepatentisamortisedonstraight-linebasisovertheirusefullifefor10years. Impairmentlossreviewofdevelopmentcosts,patentandgoodwillonconsolidation
Duringthefinancialyear,impairmentlossonintangibleassetsoftheGrouphadbeenrecognisedduetorecoverableamountsofintangibleassetswaslowerthanthecarryingamount.
Goodwillacquiredinabusinesscombinationisallocated,atacquisitiondate,tothecash-generatingunit(“CGU”)thatisexpectedtobenefitfromthebusinesscombination.
TheGrouptestsgoodwillannuallyforimpairmentormorefrequentlyifthereareindicationsthatgoodwillmightbeimpaired.
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7. INTANGIBLE ASSETS (CONT’D)
Impairmentlossreviewofdevelopmentcosts,patentandgoodwillonconsolidation(cont’d)
Keyassumptionsmadeindeterminingthevalue-in-useareasfollows:
- Cashflowswereprojectedbasedonactualoperatingresultsandthefiveyearsbusinessplan;- Thediscountrateappliedtothecashflowsprojectionsarederivedfromtheweightedaveragecostofcapitalof
theGroupplusareasonableriskpremium;- Thesizeofoperationwillremainatleastornotlowerthanthecurrentresults.
Thekeyassumptionsusedfordeterminingthevalueinuse,whicharedeterminedbasedonmanagement’spastexperienceandexpectationofthefuturedevelopment,areasfollows:-
Group 2020 2019 % % Projectedgrowthrate 5 5Discountrate 1.65 1.65
Theprojectedcashflowsfromusearederivedfromthemostrecentfinancialbudgetsapprovedbymanagement.
Withregardstotheassessments,managementbelievesthatnoreasonablypossiblechangesinanyofthekeyassumptionswouldcausethecarryingvaluesoftheseunitstodiffermateriallyfromtheirrecoverableamountsexceptforthechangesinprevailingoperatingenvironmentwhichisnotascertainable.
8. SUBSIDIARIES
Investmentinsubsidiaries
Company 2020 2019 RM RM
Unquotedshares,atcost 206,994,452 140,744,452Redeemableconvertiblepreferenceshares 2,500,000 2,500,000SISgrantedtoemployeesofthesubsidiaries 1,175,158 1,175,158Less:Accumulatedimpairmentlosses (64,828,658) (3,228,661)
145,840,952 141,190,949
Redeemableconvertiblepreferenceshares(“RCPS”)
On23February2018,anamountofRM2,500,000duefromasubsidiarywerecapitalisedbywayofinvestmentinRCPSupontheallotmentof2,500,000unitsofRCPSbyasubsidiarytotheCompanyatanissuepriceofRM1.00each.
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8. SUBSIDIARIES(CONT’D)
Investmentinsubsidiaries (cont’d)
Investmentinsubsidiariesthatareimpaired
Investment insubsidiariesare impairedat reportingdatewhen thenetassetof thesubsidiary is lower thancostofinvestment.Thereconciliationoftheallowanceaccountisasfollows:-
Company 2020 2019 RM RM
Broughtforward 3,228,661 7,861,083Chargeforthefinancialyear 61,599,997 805,280Reversal – (5,437,702)
Carriedforward 64,828,658 3,228,661
DetailsoftheCompany’ssubsidiariesareasfollows:-
GroupEffectiveInterest
PrincipalPlaceofBusiness PrincipalActivities
2020%
2019%
held by the company:TanjungOffshore ServicesSdn.Bhd.
100 100 Malaysia Integratedserviceprovidertotheoilandgasandrelatedindustries.
T7GastecSdn.Bhd. 100 100 Malaysia Manufacturing and trading of all types of machinery, equipment andgeneratorsusedforwelding,cutting,cookingandothercommercialapplications.
T7MarineSdn.Bhd. 100 100 Malaysia Owning and leasing offshore vessels tolocalandinternationaloilindustry.
T7SolutionsSdn.Bhd. 100 100 Malaysia Dormant.
T7ResourcesSdn.Bhd. 100 100 Malaysia Mineraltrading.
T7KemuncakSdn.Bhd. 70 100 Malaysia Property, construction and investmentholding.
T7PropertySdn.Bhd. 100 100 Malaysia Developmentofbuildingprojectsforownoperation,forrentingofspaceinthesebuildingsandconstruction.
T7AeroSdn.Bhd. 100 100 Malaysia Precisionengineering,manufacturingandtrading of products, equipment andmachines of all kinds relating to aircraft aerospaceandinvestmentholding.
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8. SUBSIDIARIES(CONT’D)
Investmentinsubsidiaries (cont’d)
DetailsoftheCompany’ssubsidiariesareasfollows(cont’d):-
GroupEffectiveInterest
PrincipalPlaceofBusiness PrincipalActivities
2020%
2019%
held by the company (cont’d):T7CSIIntegratedSdn.Bhd.
100 100 Malaysia Supply, design, configure, intergrate,
test,installandcommissiondistributedcontrol systems, programmable logiccontrollers,supervisorycontrolanddataacquisitions,safetyshutdownsystems,fire gas systems, fire addressablesystems, l iquid and gas analysersystems,controlvalves,instrumentationand electrical heat tracing systems and to train and supply manpower for after salesservices.
T7ServicesAustralia Pty.Ltd.^
100 100 Australia Dormant.
held by tanjung Offshore services sdn. Bhd.:T7ServicesSdn.Bhd. 100 100 Malaysia Provision for engineering and professional
manpower services to the oil and gas andrelatedindustries.
T7NewenergySdn.Bhd. 100 100 Malaysia Project management services to the engineeringandenergyindustries.
T7Intelligent ResourcesSdn.Bhd. (formerly known as Fircroft Tanjung Sdn. Bhd.)
51 51 Malaysia Supplyingmanpower for theoilandgasindustryandpetrochemicalsindustry.
T7SolutionsServices(S) Pte.Ltd.^
100 100 Singapore Wholesale of general hardware andwholesaletrade.
held by t7 gastec sdn. Bhd.:UniversalGasGenerators (M)Sdn.Bhd.
100 100 Malaysia Sellingandlettingofgasgenerators.
T7WenmaxSdn.Bhd.# 100 51 Malaysia Supplierofindustrialequipment,machineries,spareparts,lubricantsoilandalsointhebusinessofrentalofmotorvehicle.
T7SolutionsServices (Thailand)Co.,Ltd.*
45 45 Thailand Manufacture and to market of waste heat recoveryunit.
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8. SUBSIDIARIES(CONT’D)
Investmentinsubsidiaries (cont’d)
DetailsoftheCompany’ssubsidiariesareasfollows(cont’d):-
GroupEffectiveInterest
PrincipalPlaceofBusiness PrincipalActivities
2020%
2019%
held by t7 Marine sdn. Bhd.:T7SubseaSdn.Bhd. 55 55 Malaysia Underwater services involving remote
operatedvehicleanddivingservices.held by t7 aero sdn. Bhd.:T7KilgourSdn.Bhd. 60 60 Malaysia
Manufacturing aerospace components and assemblies.
T7VectorSdn.Bhd. 100 100 Malaysia Dormant.
held by t7 solutions sdn. Bhd.:T7GenerationsSdn.Bhd. 92.5 92.5 Malaysia Dormant.
TCMInnovationsSdn.Bhd. 100 100 Malaysia Dormant.
held by t7 Kemuncak sdn. Bhd.:T7ChinaConstruction ThirdEngineering Sdn.Bhd.
51 51 Malaysia Dormant.
held by t7 intelligent resources sdn. Bhd. (formerly known as fircroft tanjung sdn. Bhd.): AgensiPekerjaanT7 IntelligentResources Sdn.Bhd.(formerly known as Agensi Pekerjaan T7 Fircroft Sdn. Bhd.)
100 – Malaysia Dormant.
* ThefinancialstatementsofthesecompaniesarenotauditedbyGrantThorntonMalaysiaPLT.^ Thesecompaniesarenotrequiredbytheirlocallawstoappointstatutoryauditors.# Inpriorfinancialyear,thefinancialstatementsofthesecompanieswerenotauditedbyGrantThorntonMalaysia
PLT.
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8. SUBSIDIARIES(CONT’D)
2020
Acquisitionofsubsidiaries
(a) On12March2020,awholly-ownedsubsidiaryoftheTanjungOffshoreServicesSdn.Bhd.,T7NewenergySdn.Bhd.issue2,000,000newordinaryshareswhichwasacquiredbyTanjungOffshoreServicesSdn.Bhd.foracashconsiderationofRM2,000,000.
(b) On7July2020,awholly-ownedsubsidiaryoftheCompany,T7PropertySdn.Bhd.issue2,000,000newordinaryshareswhichwasacquiredbytheCompanyforacashconsiderationofRM2,000,000.
(c) On26August2020,asubsidiaryoftheCompany,T7IntelligentResourcesSdn.Bhd.(formerlyknownasFircroftTanjungSdn.Bhd.),incorporateda100%ownedsubsidiary,AgensiPekerjaanT7IntelligentResourcesSdn.Bhd.(formerlyknownasAgensiPekerjaanT7FircroftSdn.Bhd.),withcashsubscriptionofRM100.
(d) On6November2020,awholly-ownedsubsidiaryoftheCompany,TanjungOffshoreServicesSdn.Bhd.issue65,000,000newordinaryshareswhichwasacquiredbytheCompanybywayofcapitalisationofRM64,769,695amountduefromasubsidiaryandacashconsiderationofRM230,305.
Acquisition/Disposalofnon-controllinginterest
(a) On7February2020,theCompanydisposed1,275,000ordinarysharesrepresenting51%equityinterestinT7KemuncakSdn.Bhd.forasalesconsiderationofRM1,275,000.Subsequentlyon27October2020,theCompanyacquired525,000ordinarysharesrepresenting21%equityinterestinT7KemuncakSdn.Bhd.foratotalcashconsiderationofRM525,000.
(b) On 18November 2020, awholly-owned subsidiary of theCompany, T7Gastec Sdn. Bhd., had acquired490,000ordinarysharesrepresenting49%equityinterestinT7WenmaxSdn.Bhd.foratotalcashconsiderationRM39,200,000.Afteracquisition,T7WenmaxSdn.Bhd.becomeawholly-ownedsubsidiaryofT7GastecSdn.Bhd..
ThefollowingsummarisestheeffectofchangesintheequityinT7KemuncakSdn.Bhd.andT7WenmaxSdn.Bhd.thatareattributabletoownersoftheCompany.
T7 Kemuncak T7 Wenmax Sdn. Bhd. Sdn. Bhd. Total RM RM RM Equityinterestat1January2020 2,651,565 19,395,893 22,047,458EffectofincreaseinCompany’sownershipinterest 503,796 19,493,131 19,996,927EffectofdecreaseinCompany’sownershipinterest (1,299,266) – (1,299,266)Shareofcomprehensiveincome 37,911 7,228,735 7,266,646
Equityinterestat31December2020 1,894,006 46,117,759 48,011,765
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8. SUBSIDIARIES(CONT’D)
2019
Acquisitionofsubsidiaries
(a) On1January2019,TanjungOffshoreServicesSdn.Bhd.controlledonT7IntelligentResourcesSdn.Bhd.(“T7IR”)(formerlyknownasFircroftTanjungSdn.Bhd.)byvirtueofanagreementwithotherinvestors.Consequently,T7IRbecomesubsidiaryoftheCompany.
(b) On18June2019,awholly-ownedsubsidiaryoftheCompany,T7SolutionsSdn.Bhd.,hadacquired40ordinarysharesrepresenting20%equityinterestinT7GenerationsSdn.Bhd.,foratotalcashconsiderationofRM40.
(c) On16August2019,awholly-ownedsubsidiaryof theCompany,T7GastecSdn.Bhd.,hadacquired22,500ordinarysharesrepresenting45%equityinterestinT7SolutionsServices(Thailand)Co.Ltd.(“T7SST”),foratotalcashconsiderationofRM292,500.
(d) On16October2019,awholly-ownedsubsidiaryoftheCompany,T7AeroSdn.Bhd.,incorporateda100%ownedsubsidiary,T7VectorSdn.Bhd.,withcashsubscriptionofRM100.
(e) On15November2019,T7VectorSdn.Bhd.issue2,400newordinaryshareswhichwasacquiredbyT7AeroSdn.Bhd.foracashconsiderationofRM2,400.
Thefairvalueoftheidentifiableassetsandliabilitiesofthesubsidiariesasatdateofacquisitionwereasfollows:-
T7SST T7IR Total RM RM RM Property,plantandequipment 227 94,350 94,577Deferredtaxassets – 4,000 4,000Inventories 243,017 – 243,017Tradereceivables 65,278 12,100,353 12,165,631Otherreceivables 60,180 681,315 741,495Contractassets – 390,549 390,549Taxrecoverable – 178,289 178,289Cashandcashequivalents 732,479 486,348 1,218,827
Totalassets 1,101,181 13,935,204 15,036,385
Tradepayables (813,571) (441,630) (1,255,201)Otherpayables (1,202) (7,518,608) (7,519,810)Borrowings – (3,600,000) (3,600,000)
Totalliabilities (814,773) (11,560,238) (12,375,011)
Netassetsassumesacquired 286,408 2,374,966 2,661,374Less:Non-controllinginterests (157,524) (1,135,990) (1,293,514)Less:Investmentinajointventure – (1,238,976) (1,238,976)Goodwillonacquisition 163,616 – 163,616
Cashconsideration 292,500 – 292,500Less:Cashandcashequivalents (732,479) (486,348) (1,218,827)
Netcashinflowarisingfromacquisitionofsubsidiaries (439,979) (486,348) (926,327)
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8. SUBSIDIARIES(CONT’D)
2019(cont’d)
Acquisitionofsubsidiaries (cont’d)
Impactoftheacquisitionontheconsolidatedstatementsofprofitorlossandothercomprehensiveincome
Fromthedateofacquisition,T7SSThascontributedRM1,107,031andRM122,209totheGroup’srevenueandlossaftertaxrespectively.Ifthecontributionhadtakenplaceatthebeginningofthefinancialperiod,theGroup’srevenueandtheprofitaftertaxcontributedbyT7SSTwouldhavebeensameamountofcontributionforrevenueandprofitaftertaxwilldecreasedbyRM133,491.
Strike-offofsubsidiaries
(a) On1January2019,theGrouphadstrike-offofits51%equityinterestinT7D’MegaSdn.Bhd.(“T7DM”).Thesubsidiarywaspreviouslyreportedaspartoftheproductandservicessegment.
(b) On21October2019,theGrouphadstrike-offof its100%equity interest inGasGeneratorsInternationalLtd.(“GGI”)pursuanttoSection151(4)oftheLabuanCompaniesAct1990.Thesubsidiarywaspreviouslyreportedaspartoftheproductandservicessegment.
T7DM GGI Total RM RM RM
Current assetOtherreceivables 600 107,732 108,332 CurrentliabilityOtherpayables (204,955) (115,122) (320,077)
Netliabilities (204,355) (7,390) (211,745)Non-controllinginterest 100,133 – 100,133
Gainondeconsolidationofsubsidiaries (104,222) (7,390) (111,612)
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8. SUBSIDIARIES(CONT’D)
Non-controllinginterestinsubsidiaries
2020
TheGroup’ssubsidiariesthathavematerialnon-controllinginterestsareasfollows:-
T7 Other Intelligent individually T7 Kilgour Resources immaterial Sdn.Bhd. Sdn.Bhd. subsidiaries Total
Percentage of ownership interestandvotinginterest(%) 40 49 7.5-55
Carryingamountofnon- controllinginterest(RM) (4,711,209) 1,520,781 (390,920) (3,581,348)
Lossallocatedto non-controllinginterest(RM) (3,171,764) (59,865) (1,602,951) (4,834,580)
Total comprehensive loss allocated to non-controllinginterest(RM) (3,171,764) (59,865) (1,604,160) (4,835,789)
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8. SUBSIDIARIES(CONT’D)
Non-controllinginterestinsubsidiaries (cont’d)
2020(cont’d)
Thesummaryoffinancialinformationbeforeintra-groupeliminationfortheGroup’ssubsidiariesthathavematerialnon-controllinginterestsisasbelow:-
T7 Intelligent T7 Kilgour Resources Sdn. Bhd. Sdn. Bhd. RM RM Non-currentassets 18,425,736 125,587Currentassets 4,769,091 10,190,709
Total assets 23,194,827 10,316,296
Non-currentliabilities 4,378,965 –Currentliabilities 30,593,884 7,212,661
Totalliabilities 34,972,849 7,212,661
EquityattributabletoownersoftheCompany (11,778,022) 3,103,635
Non-controllinginterest (4,711,209) 1,520,781
Revenue 2,997,897 35,909,585Expenses (10,927,306) (36,031,758)
Lossforthefinancialyear (7,929,409) (122,173)
Lossandothercomprehensiveloss attributabletoownersofthecompany (4,757,645) (62,308)Lossandothercomprehensiveloss attributabletothenon-controllinginterest (3,171,764) (59,865)
Lossandothercomprehensivelossforthefinancialyear (7,929,409) (122,173)
Netcashinflow(usedin)/fromoperatingactivities (7,926,742) 2,327,175Netcashoutflowusedininvestingactivities (1,044,091) (119,525)Netcashoutflowfrom/(usedin)financingactivities 8,719,541 (2,746,195)
Netcashinflow (251,292) (538,545)
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8. SUBSIDIARIES(CONT’D)
Non-controllinginterestinsubsidiaries (cont’d)
2019
TheGroup’ssubsidiariesthathavematerialnon-controllinginterestsareasfollows:-
T7 Other T7 Intelligent individually Wenmax Resources immaterial Sdn.Bhd. Sdn.Bhd. subsidiaries Total Percentage of ownership interestandvotinginterest(%) 49 49 7.5-55
Carryingamountofnon- controllinginterest(RM) 18,635,270 1,580,646 (263,814) 19,952,102
Profit/(Loss)allocatedto non-controllinginterest(RM) 5,077,135 444,656 (738,888) 4,782,903
Total comprehensive income/(loss)allocatedto non-controllinginterest(RM) 5,077,135 444,656 (740,126) 4,781,665
Dividendpaidtonon-controlling interest(RM) 2,940,000 – – 2,940,000
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8. SUBSIDIARIES(CONT’D)
Non-controllinginterestinsubsidiaries (cont’d)
2019
Thesummaryoffinancialinformationbeforeintra-groupeliminationfortheGroup’ssubsidiariesthathavematerialnon-controllinginterestsisasbelow:-
T7 Intelligent T7 Wenmax Resources Sdn. Bhd. Sdn. Bhd. RM RM
Non-currentassets 2,079,188 90,727Currentassets 47,016,724 14,204,188
Total assets 49,095,912 14,294,915
Non-currentliabilities 85,107 –Currentliabilities 10,979,642 11,069,107
Totalliabilities 11,064,749 11,069,107
EquityattributabletoownersoftheCompany 38,031,163 3,225,808
Non-controllinginterest 18,635,270 1,580,646
Revenue 63,012,337 47,719,789Expenses (52,650,837) (46,812,328)
Profitforthefinancialyear 10,361,500 907,461
Profitandothercomprehensiveincome attributabletoownersofthecompany 5,284,365 462,805Profitandothercomprehensiveincome attributabletothenon-controllinginterest 5,077,135 444,656
Profitandothercomprehensiveincomeforthefinancialyear 10,361,500 907,461
Netcashinflowfromoperatingactivities 4,929,929 4,062,898Netcashoutflowusedininvestingactivities (56,683) (55,853)Netcashoutflowusedinfinancingactivities (2,132,640) (1,751,094)
Netcashinflow 2,740,606 2,255,951
Otherinformation
Dividendspaidtonon-controllinginterest 2,940,000 –
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8. SUBSIDIARIES(CONT’D)
Amountduefrom/(to)subsidiaries
Company 2020 2019 RM RM
Amount due from subsidiariesNon-current 11,584,766 10,637,428Less:AllowanceforECLs – (872,004)
11,584,766 9,765,424
Current 30,048,955 83,022,074Less:AllowanceforECLs (19,829,682) (21,222,471)
10,219,273 61,799,603
21,804,039 71,565,027
Amountduetosubsidiaries (44,667) (2,386,480)
Theamountdue from/(to)subsidiariesarenon-trade related,unsecured,bearno interestand repayable incashondemand,exceptforRM11,584,766(2019:RM9,765,424)amountduefromsubsidiariessubjecttointerestrateat4.80%(2019:4.80%)perannum.
ThemovementsintheallowanceforECLsinrespectofamountduefromsubsidiariesduringthefinancialyearwereasfollows:-
Company 2020 2019 RM RM Broughtforward 22,094,475 21,547,365Chargeforthefinancialyear 10,784 547,110Reversal (2,275,577) –
Carriedforward 19,829,682 22,094,475
The impairment loss was recognised to adjust the carrying amount of amount due from subsidiaries due to recoverable amountislowerthanthecarryingamount.
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9. ASSOCIATE
Investment in associate
Group 2020 2019 RM RM Unquotedshares,atcost – 35,000Shareofattributablepostacquisitionlossesaftertax – 8,730
– 43,730Less:Accumulatedimpairmentlosses – (43,730)
– –
Investmentinassociatethatareimpaired
Investmentinassociateisimpairedatreportingdatewhenthenetassetoftheassociateislowerthancostofinvestment.Thereconciliationoftheallowanceaccountisasfollows:-
Company 2020 2019 RM RM
Broughtforward 43,730 43,730Investmentwrittenoffagainstimpairment (43,730) –
Carriedforward – 43,730
DetailsoftheGroup’sassociateareasfollows:-
GroupEffectiveInterest
PrincipalPlaceofBusiness PrincipalActivities
2020%
2019%
held by t7 gastec sdn. Bhd.:PT.GasGenerators Indonesia*
– 35 Indonesia Commission agent for the fabrication and supplyofindustrialequipment.
* ThefinancialstatementsofthisCompanyisnotauditedbyGrantThorntonMalaysiaPLT.
TheassociateisnotmaterialtotheGroup.Therefore,thesummarisedfinancialinformationisnotpresented.
Impairmentlosswasrecognisedfortheinvestmentinassociateduetoirrecoverablecostofinvestment.
Contingentliabilityandcapitalcommitment
TheassociatehasnosignificantcontingentliabilityandcapitalcommitmenttowhichtheGroupisexposed,northeGrouphasanysignificantcontingentliabilityandcapitalcommitmentinrelationtoitsinterestintheassociatecompany.
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10. OTHERINVESTMENTS
Group Company 2020 2019 2020 2019 RM RM RM RM
Non-currentQuoted shares in MalaysiaAtfairvalue:- FinancialassetsatFVTPL 1,451,078 7,038,680 984,278 5,346,530
Quoted shares in overseasAtfairvalue:-FinancialassetsatFVOCI 580,845 1,619,188 – –
2,031,923 8,657,868 984,278 5,346,530
11. OTHER RECEIVABLES
Group Company 2020 2019 2020 2019 RM RM RM RM
Non-currentNon-tradereceivables(Note11.1) 1,368,800 – – –
Current Non-tradereceivables 2,049,916 1,983,869 901,270 151,270Deposits 2,203,716 2,661,417 – –Depositsforpurchaseinventories 19,176,570 – – –Prepayments 370,645 412,109 – –Proceedsfromdisposalofasubsidiary 3,227,050 3,227,050 3,227,050 3,227,050GSTrecoverable – 1,202,766 – –
27,027,897 9,487,211 4,128,320 3,378,320Less:AllowanceforECLs (4,265,719) (4,265,719) (3,378,320) (3,378,320)
22,762,178 5,221,492 750,000 –
24,130,978 5,221,492 750,000 –
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11. OTHER RECEIVABLES (CONT’D) Includedinotherreceivablesisasfollow:-
Group Company 2020 2019 2020 2019 RM RM RM RM
Amount due from companies in which certainDirectorshave interest 261,862 261,862 – –Amountduefromnon- controllinginterests 925,366 354,166 750,000 –
TheamountduefromcompaniesinwhichcertainDirectorshaveinterestandnon-controllinginterestsarenon-traderelated,unsecured,bearnointerestandrepayableincashondemand.
Proceedsfromdisposalofasubsidiaryinthepreviousyears
On29August2014,theCompanyenteredintoanagreementforthedisposalofitsentireequityinterestinBumiWangsaTMSSdn.Bhd. (formerlyknownasTanjungMaintenanceServicesSdn.Bhd.)viaamanagementbuy-outforatotalconsiderationofRM9,000,000.AdepositofRM900,000hasbeenpaidbythepurchasersuponsigningtheagreementandtheremainingconsiderationofRM8,100,000willbepaidviafiveequalyearlyinstallmentsofRM1,620,000untilfullsettlement.However,theremainingamounthasfullyimpaired.
Otherreceivablesthatareimpaired
Allimpairedotherreceivablesareindividuallydetermined.ThereconciliationoftheallowanceforECLisasfollows:-
Group Company 2020 2019 2020 2019 RM RM RM RM
Broughtforward 4,265,719 4,178,597 3,378,320 3,227,000Chargeforthefinancialyear – 401,320 – 151,320ReversalofECLs – (64,198) – –Baddebtswrittenoffagainstimpairment – (250,000) – –
Carriedforward 4,265,719 4,265,719 3,378,320 3,378,320
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(Cont’D)
11. OTHER RECEIVABLES (CONT’D)
11.1 Thecarryingamountofnon-currentofnon-tradereceivableisasfollows:-
Group Company 2020 2019 2020 2019 RM RM RM RM
Non-currentGrossnon-tradereceivable-laterthan1yearbutnot laterthan5years 1,636,511 – – –Less:Lossonnon-trade receivable carried at amortisedcost (267,711) – – –
Presentvalueofnon-trade receivable 1,368,800 – – –
Thereconciliationofmovementsinlossonnon-tradereceivablecarriedatamortisedcostisasfollows:-
Group Company 2020 2019 2020 2019 RM RM RM RM
Lossonnon-trade receivable carried at amortisedcost/Carried forward 267,711 – – –
12. CASHANDBANKBALANCES,DEPOSITSANDPLACEMENTS
Group Company 2020 2019 2020 2019 RM RM RM RM
Non-currentDepositswithlicensedbanks 3,500,000 – – –
CurrentCashandbankbalances 48,396,078 28,472,483 2,753,331 2,680,928Depositswithlicensedbanks 14,155,082 14,819,638 – –
62,551,160 43,292,121 2,753,331 2,680,928
66,051,160 43,292,121 2,753,331 2,680,928
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12. CASHANDBANKBALANCES,DEPOSITSANDPLACEMENTS(CONT’D)
Group Company 2020 2019 2020 2019 RM RM RM RM
Presented in statements of financialposition 66,051,160 43,292,121 2,753,331 2,680,928Less:Depositswithlicensedbanks (12,242,773) (1,891,034) – –Less:Sinkingfund (1,612,154) (204,284) – –
Presentedinstatementsofcashflows 52,196,233 41,196,803 2,753,331 2,680,928
IncludedindepositswithlicensedbanksoftheGroupwithcarryingamountofRM12,242,773(2019:RM1,891,034)havebeenpledgedtobanksforbankingfacilitiesgrantedtoasubsidiary.
IncludedindepositswithlicensedbanksoftheGroupamountingtoRM1,612,154(2019:RM204,284)isheldassinkingfundtoobtainbankingfacilitiesandhence,arenotavailableforgeneraluse.
TheinterestratesofthedepositswithlicensedbanksoftheGrouprangedfrom1.65%to5.00%(2019:2.70%to3.65%)perannumandmaturedwithinayear.
13. DEFERREDTAXASSETS/(LIABILITIES)
Group 2020 2019 RM RM
Broughtforward 16,205,562 6,195,705Acquisitionofasubsidiary – 4,000Recognisedinprofitorloss(Note29) (857,199) 9,595,601Recognisedinothercomprehensiveincome(Note29) – 410,256
Carriedforward 15,348,363 16,205,562
Presentedasfollows:-Deferredtaxassets 16,222,000 16,832,000Deferredtaxliabilities (873,637) (626,438)
15,348,363 16,205,562
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13.
DEFE
RREDTAXASSETS/(LIABILITIES)(CONT’D
)
(a)
Theco
mpo
nentsan
dmov
emen
tofd
eferredtaxassetsand
liab
ilitiesareasfo
llows:-
Deferredtax
ass
ets
Group
Prope
rty,
Una
bsor
bed
Unu
tilised
Allo
wan
ce
plan
tand
Right-o
f-us
eInve
stmen
tca
pital
busine
ss
for
equipm
ent
asse
ts
prop
ertie
sallowan
ces
loss
es
impa
irmen
tOthers
Total
RM
R
M
RM
R
M
RM
R
M
RM
R
M
At1Jan
uary201
9(70,00
0)
––
–7,12
6,14
3–
–7,05
6,14
3Rec
ognise
dinprofitorlos
s1,74
7,00
0(6,000
)–
7,40
8,00
055
3,85
773
,000
–
9,77
5,85
7
At31Dec
embe
r201
91,67
7,00
0(6,000
)–
7,40
8,00
07,68
0,00
073
,000
–
16,832
,000
Rec
ognise
dinprofitorlos
s(494
,000
)16
,000
–
(732
,000
)(412
,000
)1,01
2,00
0–
(610
,000
)
At31Dec
embe
r202
01,18
3,00
010
,000
–
6,67
6,00
07,26
8,00
01,08
5,00
0–
16,222
,000
Deferredtaxlia
bilities
Group
Prope
rty,
Una
bsor
bed
Unu
tilised
Allo
wan
ce
plan
tand
Right-o
f-us
eInve
stmen
tca
pital
busine
ss
for
equipm
ent
asse
ts
prop
ertie
sallowan
ces
loss
es
impa
irmen
tOthers
Total
RM
R
M
RM
R
M
RM
R
M
RM
R
M
At1Jan
uary201
9(686
,860
)–
(231
,000
)27
,422
–
–30
,000
(860
,438
)Rec
ognise
dinprofitorlos
s96
,184
(9,383
)12
2,00
047
,199
–
–(22,00
0)
234,00
0
At31Dec
embe
r201
9(590
,676
)(9,383
)(109
,000
)74
,621
–
–8,00
0(626
,438
)Rec
ognise
dinprofitorlos
s(291
,607
)(36,92
3)
49,000
32
,331
14
,218
–
(14,21
8)
(247
,199
)
At31Dec
embe
r202
0(882
,283
)(46,30
6)
(60,00
0)
106,95
214
,218
–
(6,218
)(873
,637
)
no
tes
to t
He
Fin
an
Cia
L st
ate
Me
nts
(Co
nt’
D)
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13. DEFERREDTAXASSETS/(LIABILITIES)(CONT’D)
(b) Deferredtaxassetshavenotbeenrecognisedinrespectoftheseitemsasitisnotprobablethatfuturetaxableprofitswillbeavailableagainstwhichthesubsidiariescanutilisethebenefitstherefrom.
Group 2020 2019 RM RM
Unabsorbedcapitalallowances 916,013 272,584Unutilisedbusinesslosses 28,691,883 18,639,654Unutilisedindustrialbuildingallowances 968,703 494,406Allowanceforimpairment 1,128,610 1,031,000
31,705,209 20,437,644
TheGroup’sunabsorbedcapitalallowances,unutilisedbusiness lossesandunutilised industrialbuildingallowancesamountingtoRM29,178,313,RM59,034,458andRM968,703(2019:RM31,450,171,RM50,639,654andRM494,406)respectivelycanbecarriedforwardtooffsetagainstfuturetaxableprofits.
EffectiveYearofAssessment(“YA”)2019asannouncedintheAnnualBudget2019,theunutilisedbusinesslossesoftheGroupasof31December2020andthereafterwillonlybeavailableforcarryforwardforaperiodof7consecutiveyears,theunutilisedbusinesslosseswillbedisregarded.
Businesslossesforwhichnodeferredtaxassetwasrecognisedexpireasfollows:-
Group 2020 2019 RM RM
YA2025 11,688,908 11,748,908YA2026 5,599,281 5,599,281YA2027 11,403,694 –
28,691,883 17,348,189
14. INVENTORIES
Group 2020 2019 RM RM
Tradinggoods 9,996,116 20,831,952Work-in-progress 27,161,363 23,302,906
37,157,479 44,134,858
Recognisedinprofitorloss:-Inventoriesrecognisedascostofsales 141,144,152 143,733,911Inventorieswrittendown – 9,549Inventorieswrittenback (9,549) –
Inventorieswrittenbackwasmadeduringthefinanclalyearwhentherelatedinventoriesweresoldabovetheircarryingamount.
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notes to tHe FinanCiaL stateMents
(Cont’D)
15. TRADE RECEIVABLES
Group 2020 2019 RM RM
Tradereceivables 68,464,098 102,338,599Retentionsumofconstructioncontract 3,646,834 3,594,445
72,110,932 105,933,044Less:AllowanceforECLs (7,088,841) (9,557,404)
65,022,091 96,375,640
Tradereceivablesarenon-interestbearingandarerecognisedattheiroriginalinvoiceamountswhichrepresenttheirfairvaluesoninitialrecognition.Interestischargedonoverdueaccountsat1.5%(2019:1.5%)permonth.
ThecredittermgrantedbytheGrouptotradereceivablesrangefrom30to90days(2019:30to90days).Othercredittermsareassessedandapprovedonacase-by-casebasis.
Includedinthetradereceivablesareasfollows:-
Group 2020 2019 RM RM
Amountduefromcompaniesconnectedtonon-controllinginterest 559,611 507,101Amountduefromnon-controllinginterest – 225,704AmountduefromcompaniesinwhichcertainDirectorshaveinterest 3,392,704 –
ThemovementsintheallowanceforECLsinrespectoftradereceivablesduringthefinancialyearwereasfollows:-
Group Individual Collective impairments impairments Total RM RM RM
At1January2019 9,403,524 385,422 9,788,946Chargeforthefinancialyear 111,526 57,505 169,031ReversalofECLs (273,514) (127,059) (400,573)
At31December2019 9,241,536 315,868 9,557,404Chargeforthefinancialyear 1,041,368 854,022 1,895,390ReversalofECLs (4,215,609) (148,344) (4,363,953)
At31December2020 6,067,295 1,021,546 7,088,841
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16. CONTRACTASSETS/(LIABILITIES)
Group 2020 2019 RM RM
Contractassets 1,558,206 2,142,075
ContractliabilitiesDeferredincome (186,162) (31,458)Depositsreceived (5,668,809) (152,181)
(5,854,971) (183,639)
Contract assets
ThecontractassetsprimarilyrelatetotheGroup’srightstoconsiderationforworkcompletedonsupplyonmanpowerservicesbutnotyetbilledatthereportingdate.Typically,theamountwillbebilledwithin30(2019:30)daysandpaymentisexpectedwithin60(2019:60)days.
Deferredincome
Deferredincomerepresentstheadvancebillingissuedtocustomerforrentalofequipment.
Depositsreceived
DepositsreceivedrelatetodepositsmadebycustomersfortheconstructionprojectswhichispartiallyperformedorhaveyettoperformbytheGroupasatthereportingdate.TheGroupappliesthepracticalexpedientinMFRS15onnotdisclosingtheaggregateamountoftherevenueexpectedtoberecognisedinthefutureastheperformanceobligationispartofacontractthathasanoriginalexpecteddurationoflessthanoneyear.
17. SHARE CAPITAL
GroupandCompany GroupandCompany Numberofordinaryshares Amounts
2020 2019 2020 2019 Unit Unit RM RM
Issuedandfullypaidwith noparvalue:-At1January 501,579,056 419,452,614 154,732,927 120,504,502Issuedduringthefinancialyear -Privateplacement 30,275,800 82,126,442 13,018,594 34,228,425
At31December 531,854,856 501,579,056 167,751,521 154,732,927
Attheendofthereportingdate,17,348,800(2019:8,820,400)ordinarysharesareheldbytheCompanyastreasuryshares(Note18tothefinancialstatements),andnumberofoutstandingordinarysharesissuedandfullypaid(excludingtreasuryshares)is514,506,056(2019:492,758,656)units.
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notes to tHe FinanCiaL stateMents
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17. SHARE CAPITAL (CONT’D)
TheholdersofordinarysharesareentitledtoreceivedividendsasandwhendeclaredbytheCompany.AllordinarysharescarryonevotepersharewithoutrestrictionsandrankequallywithregardtotheCompany’sresidualassets.InrespectoftheCompany’streasurysharesthatareheldbytheCompany,allrightsaresuspendeduntilthosesharesarereissued.
18. TREASURYSHARES
Duringthefinancialyear,theCompanypurchased8,528,400(2019:1,364,900)ofitsissuedsharecapitalfromtheopenmarketattheaveragepricepaidofRM0.30(2019:RM0.49)pershare.Thepurchasetransactionswerefinancedbyinternallygeneratedfunds.
Thesharespurchasedwereretainedastreasuryshares.TheCompanyhastherighttore-issuethesesharesatalaterdate.Astreasuryshares,therightsattachedastovoting,dividendsandparticipationinotherdistributionaresuspended.
Attheendofthereportingdate,theGroupheld531,854,856(2019:501,579,056)oftheCompany’ssharesandnumberofordinarysharesaftersettingoffagainsttreasurysharesis514,506,056(2019:492,758,656).
19. RESERVES
Group Company 2020 2019 2020 2019 RM RM RM RM
Non-distributable:-Fairvaluereserve (621,377) 416,966 20,990 20,990Revaluationreserve 212,049 – – –Capitalreserves 15,767,691 35,474,560 57,026,993 57,026,993Foreigncurrencytranslationreserve (3,227) (941) – –
15,355,136 35,890,585 57,047,983 57,047,983
Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value of equity designated at fair value through othercomprehensiveincomeuntiltheassetsarederecognisedorimpaired.
Revaluation reserve
Revaluationreservearisingfromrevaluationofpropertiesarenotavailablefordistributionasdividends.
Capitalreserves
ThecapitalreservesincludeallthechangesintheGroup’sownershipinterestinasubsidiarythatdonotresultinalossofcontrolandcapitalreduction.
Foreign currency translation reserve
Theforeigncurrencytranslationreservearosefromtheexchangedifferencesonthetranslationofforeignoperations.
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20. LEASELIABILITIES
Setoutbelowarethecarryingamountsofleaseliabilitiesandthemovementsduringthefinancialyear:-
Group Plantand Motor Equipment machinery vehicles Total RM RM RM RM
20201January2020 364,405 168,413 1,969,571 2,502,389Additions – 3,313,500 1,268,000 4,581,500Accretionofinterest 5,074 34,884 73,515 113,473Payments (369,479) (275,369) (527,414) (1,172,262)
At31December2020 – 3,241,428 2,783,672 6,025,100
Representedby:-Non-current – 2,137,833 2,047,582 4,185,415Current – 1,103,595 736,090 1,839,685
– 3,241,428 2,783,672 6,025,100
20191January2019 1,204,517 226,452 963,201 2,394,170Additions – – 1,395,800 1,395,800Accretionofinterest 46,676 10,157 73,168 130,001Payments (886,788) (68,196) (462,598) (1,417,582)
At31December2019 364,405 168,413 1,969,571 2,502,389
Representedby:-Non-current – 110,040 1,486,219 1,596,259Current 364,405 58,373 483,352 906,130
364,405 168,413 1,969,571 2,502,389
ThematurityanalysisofleaseliabilitiesisdisclosedinNote36tothefinancialstatements.
TheGroup’stotalcashoutflowforleasesamountingtoRM1,172,262(2019:RM1,417,582).
Theeffectiveinterestrateoftheleaseliabilitiesarerangingfrom4.07%to11.97%(2019:3.50%to4.85%)perannum.
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21. BORROWINGS
Group 2020 2019 RM RM
Non-currentSecured:-Termloans 20,625,960 15,960,612
Unsecured:-Fixedloan 3,139,610 –Termloans 100,912,746 –
124,678,316 15,960,612
CurrentSecured:-Termloans 1,779,053 1,153,601 Unsecured:-Bankers’acceptance 20,693,010 4,071,996Fixedloan 1,489,812 –Invoicefinancing 26,216,189 4,844,566Onshoreforeigncurrencyloan 12,074,580 7,304,775Revolvingcredit 2,962,600 6,350,000Termloans 289,383 –Trustreceipt 25,577,425 –
91,082,052 23,724,938
215,760,368 39,685,550
Theaboveborrowingsaresecuredbymeansofthefollowings:-
i) AlegalchargeovertheGroup’scertainfreeholdlandandbuildings;ii) AlegalchargeovertheGroup’sleaseholdlandandbuildings(2019:certainleaseholdlandandbuildings);iii) Againstassignmentofinsurancepolicyofasubsidiary;iv) Againstassignmentofcontractpayment/proceedsofsubsidiaries;v) Againstfutureincomeofasubsidiary;vi) Againstletterofundertakingofholdingcompany;vii) Certaindepositswithlicensedbanksofsubsidiaries;viii) Sinkingfundofasubsidiary;ix) Corporateguaranteebyasubsidiary;andx) CorporateguaranteebytheCompany.
Thetermloansarerepayableby180equalmonthlyinstallmentscommencingafterthefullreleaseoftheloan.
Theborrowingsbearinterestratesrangingfrom1.70%to6.57%(2019:1.83%to6.35%)perannum.
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22. GOVERNMENT GRANTS
Group 2020 2019 RM RM
At1January 4,865,517 –Additions – 6,217,057Amortisedduringthefinancialyear – (1,351,540)
At31December 4,865,517 4,865,517
Non-current-amortisedafter1year 4,378,965 4,378,965 Current-amortisedwithin1year 486,552 486,552
4,865,517 4,865,517
ThegovernmentgrantreceivedisinrespectofthepurchaseofanassetandtrainingexpensesincurredundertheschemeofMalaysiaInvestmentDevelopmentAuthority(“MIDA”)bythegovernmentprincipalagencyforpromotionoftheMetalSurfaceTreatmentforAerospaceinMalaysia.
23. OTHERPAYABLES
Group Company 2020 2019 2020 2019 RM RM RM RM
Non-currentNon-tradepayable (Note23.1) 16,057,003 – – –
CurrentNon-tradepayables 21,014,532 1,878,169 194,831 211,106Accrualsofexpenses 4,049,362 7,663,924 182,681 204,646Depositsreceived 89,100 441,000 – –SSTpayable 1,311,499 844,724 – –
26,464,493 10,827,817 377,512 415,752
42,521,496 10,827,817 377,512 415,752
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23. OTHERPAYABLES(CONT’D)
Includedinotherpayablesareasfollow:-
Group 2020 2019 RM RM
Amountduetonon-controllinginterest 35,653,003 –Amountduetoacompanyconnectedtonon-controllinginterest 241,768 99,090
Theamountduetonon-controllinginterestandacompanyconnectedtonon-controllinginterestarenon-traderelated,unsecured,bearnointerestandrepayableincashondemand.
23.1 Thecarryingamountofnon-currentofnon-tradepayableisasfollows:-
Group Company 2020 2019 2020 2019 RM RM RM RM
Non-currentGrossnon-tradepayable-laterthan1yearbutnot laterthan5years 16,338,000 – – –Less:Gainonnon-trade payable carried at amortisedcost (280,997) – – –
Presentvalueofnon-trade payable 16,057,003 – – –
Thereconciliationofmovementsingainonnon-tradepayablecarriedatamortisedcostisasfollows:-
Group Company 2020 2019 2020 2019 RM RM RM RM
Gainonnon-tradepayable carried at amortised cost/Carriedforward 280,997 – – –
Thewholly-ownedsubsidiary,T7GastecSdn.Bhd.entered intoanagreement for theacquisitionof itsentireequityinterestinT7WenmxSdn.Bhd.viaamanagementbuy-outforatotalconsiderationofRM39,200,000.TheoutstandingamountingtoRM35,653,003(2019:Nil)willberepaymentbyinstallmentswithin2years.
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24. TRADEPAYABLES
Group 2020 2019 RM RM
Tradepayables 30,629,269 21,095,658Retentionsumoncontract 755,363 2,065,421
31,384,632 23,161,079
ThenormaltradecredittermsgrantedtotheGrouprangefrom30to90days(2019:30to90days).
Includedintradepayablesisasfollows:-
Group 2020 2019 RM RM
Amountduetonon-controllinginterest 34,226 58,172AmountduefromcompaniesinwhichcertainDirectorshaveinterest 1,096,222 –
25. REVENUE
25.1 DisaggregatedRevenueInformation
Group Company 2020 2019 2020 2019 RM RM RM RM
Revenuefromcontract withcustomers:-Renderingofservices 72,234,552 118,102,905 – –Supplyofmanpower 35,909,585 46,523,664 – –Repairandmaintenance 2,255,518 10,599,003 – –Installationservices 6,968,315 3,548,855 – –Salesofgoods 69,423,437 51,248,120 – –
Otherrevenue:-Dividendincome 63,706 67,409 63,706 67,409Rentalincome 2,551,945 ,398,010 – –Managementfee – – 1,200,000 2,400,000Sundryincome – 49 – 49
189,407,058 233,488,015 1,263,706 2,467,458
Timingofrevenuerecognition:-Atapointintime 115,112,452 65,312,591 1,263,706 2,467,458-Overtime 74,294,606 168,175,424 – –
189,407,058 233,488,015 1,263,706 2,467,458
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25. REVENUE (CONT’D)
25.2 GeographicalMarket
TheGroup’sandtheCompany’srevenueinformationbasedongeographicallocationareasfollows:-
Group Company 2020 2019 2020 2019 RM RM RM RM
Malaysia 181,680,794 217,539,308 1,263,706 2,467,458SoutheastAsiaotherthanMalaysia 7,726,264 15,948,707 – –
189,407,058 233,488,015 1,263,706 2,467,458
25.3 Performanceobligations
InformationabouttheGroup’sperformanceobligationsaresummarisedbelow:-
Renderingofservices,supplyofmanpowerandinstallationservices
Theperformanceobligationissatisfiedover-timeandpaymentisgenerallydueuponcompletionofinstallationandacceptanceofthecustomer.Insomecontracts,short-termadvancesarerequiredbeforetheinstallationserviceisprovided.
Repairandmaintenanceandsalesofgoods
Theperformanceobligationissatisfiedatapointintimeandpaymentisgenerallydueuponcompletionofservicesperformed.
26. FINANCEINCOMES
Group Company 2020 2019 2020 2019 RM RM RM RM
Interestincomes:-Cashatbank 220,368 239,084 32,708 13,296-Fixeddeposit 313,469 616,284 – 78,337-Subsidiaries – – 452,718 –-Overdueinterest 359,222 247,869 – –-Gainonnon-tradepayablecarried atamortisedcost 280,997 – – –
1,174,056 1,103,237 485,426 91,633
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27. FINANCE COSTS
Group 2020 2019 RM RM
Interestexpenses:-Bankers’acceptance 509,409 232,149-Bankguarantee 48,326 127,646-Fixedloan 25,413 –-Invoicefinancing 561,984 69,655-Letterofcredit 14,352 24,249-Leaseliabilities 113,473 130,001-Onshoreforeigncurrencyloan 507,257 84,567-Revolvingcredit 214,927 281,607-Trustreceipt 94,839 85,130-Termloans 998,303 1,002,821-Lossonnon-tradereceivablecarriedatamortisedcost 267,711 –-Others 322 –
3,356,316 2,037,825
28. PROFIT/(LOSS)BEFORETAX
Profit/(Loss)beforetaxhasbeendeterminedaftercharging/(crediting),amongstother,thefollowingitems:-
Group Company 2020 2019 2020 2019 RM RM RM RM
Auditors’remuneration:-GrantThorntonMalaysiaPLT:-Statutoryaudit 287,700 227,800 43,000 40,000-Otherservices 61,265 38,000 15,660 10,000Otherexternalauditors 1,340 36,839 – –Amortisationofintangibleassets 273,296 273,396 – –Amortisationofgovernmentgrant – (1,351,540) – –Baddebtswrittenoff 21,449 484,853 – 121,041Depreciationofproperty,plantandequipment 3,685,582 1,955,108 – –Depreciationofright-of-useassets 1,287,016 1,145,948 – –Dividendincome (63,706) (67,409) (63,706) (67,409)Expensesarisingfromleases:-Expensesrelatingtoshort-termlease 205,980 996,559 – –-Expensesrelatingtolow-valueassets 17,420 13,110 – –
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28. PROFIT/(LOSS)BEFORETAX(CONT’D)
Profit/(Loss)beforetaxhasbeendeterminedaftercharging/(crediting),amongstother,thefollowingitems(cont’d):-
Group Company 2020 2019 2020 2019 RM RM RM RM
Fairvaluegainoninvestmentproperties – (50,000) – –Goodwillwrittenoff – 163,616 – –Gainondisposalofproperty,plant andequipment (111,649) – – –Gainondisposalofassetsheld-for-sale – (563,539) – –Gainondisposalofotherinvestments – (575,778) – –Gainondeconsolidationofsubsidiaries – (111,612) – –ImpairmentlossofECLs:-Tradereceivables 1,895,390 169,031 – –-Otherreceivables – 401,320 – 151,320-Amountduefromsubsidiaries – – 10,784 547,110Impairmentlosson:-Investmentinsubsidiaries – – 61,599,997 805,280-Intangibleassets 1,590,015 – – –Inventorieswrittendown – 9,549 – –Inventorieswrittenback (9,549) – – –Netfairvaluegainonotherinvestments (1,982,898) (299,376) (3,208,248) (276,626)Netrealised(gain)/lossonforeignexchange (471,182) 576,016 (75,999) (30,072)Netunrealisedlossonforeignexchange 47,596 103,443 – 41,989Property,plantandequipmentwrittenoff – 885 – –ReversalofECLs:-Tradereceivables (4,363,953) (400,573) – –-Otherreceivables – (64,198) – –-Amountduefromsubsidiaries – – (2,275,577) –Reversal of impairment loss of investmentinsubsidiaries – – – (5,437,702)Waiverofdebts (147,352) (96,069) – (337)
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(Cont’D)
29. TAXEXPENSE/(INCOME)
Group Company 2020 2019 2020 2019 RM RM RM RM
Current tax-Currentfinancialyear 4,064,991 4,927,327 168,079 –-(Over)/Underprovisioninpriorfinancialyear (505,936) 308,631 – (98,446)
3,559,055 5,235,958 168,079 (98,446)
Deferredtax-Currentfinancialyear 2,385,081 1,167,013 – –-Overrecognisedinpriorfinancialyear (1,527,882) (10,762,614) – –
857,199 (9,595,601) – –
4,416,254 (4,359,643) 168,079 (98,446)
Malaysianincometaxiscalculatedatthestatutorytaxrate24%(2019:24%)oftheestimatedtaxableprofitforthefinancialyear.
ThenumericalreconciliationbetweentheeffectivetaxrateandthestatutorytaxrateoftheGroupandoftheCompanyareasfollows:-
Group Company 2020 2019 2020 2019 RM RM RM RM
Profit/(Loss)beforetax 7,495,552 8,148,164 (56,309,882) (1,822,373)
Taxatstatutorytaxrateof24%(2019:24%) 1,798,933 1,955,560 (13,514,372) (437,370)
Taxeffectinrespectof:-
Expensesnotdeductiblefortaxpurposes 2,991,568 2,164,768 15,011,270 685,259Incomenotsubjecttotax (1,044,645) (898,558) (1,328,819) (1,397,483)Movementofdeferredtaxassets notrecognised 2,704,215 2,872,570 – 1,149,594Overrecognisedofdeferredtax inpriorfinancialyear (1,527,882) (10,762,614) – –(Over)/Underprovisionoftaxexpense inpriorfinancialyear (505,936) 308,631 – (98,446)
4,416,254 (4,359,643) 168,079 (98,446)
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notes to tHe FinanCiaL stateMents
(Cont’D)
29. TAX(INCOME)/EXPENSE(CONT’D)
Taxrecognisedinothercomprehensiveincome
Group Company 2020 2019 2020 2019 RM RM RM RM
Taxeffectonfairvaluesurplus forfinancialassetsatFVOCI – (410,256) – –
30. DIVIDENDS
GroupandCompany 2020 2019 RM RM
Inrespectofthefinancialyearended31December2019:-Firstinterimsingletierdividendof0.5centperordinaryshare, paidon6August2019 – 2,463,793
TheDirectorsdonotrecommendanyfinaldividendpaymentforthecurrentfinancialyear.
31. EARNINGSPERSHARE
(a) Basicearningsperordinaryshares
BasicearningspersharearecalculatedbydividingprofitforthefinancialyearattributabletoordinaryequityholdersoftheCompanybytheweightedaveragenumberofordinarysharesinissueduringthefinancialyear,excludingtreasurysharesandincludingmandatorilyconvertibleinstrumentsheldbytheCompany.
profits attributable to ordinary shares
Group 2020 2019 RM RM
Profitusedforthecomputationofbasic/diluted-ProfitattributabletoequityholdersoftheCompany 7,913,878 7,724,904
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(Cont’D)
31. EARNINGSPERSHARE(CONT’D)
(a) Basicearningsperordinaryshares(cont’d)
Weighted average number of ordinary shares in issue
Group 2020 2019 RM RM
Weightedaveragenumberofordinarysharesafterdeducting treasurysharesusedforthecomputationofbasic 971,880,903 460,822,976
Basicearningsperordinaryshares 0.81 1.68
(b) Diluted
TherearenodilutedearningspersharebecausetheCompanydoesnothaveanyconvertiblefinancialinstrumentsasattheendoftheyear.
32. EMPLOYEEBENEFITSEXPENSES
Group Company 2020 2019 2020 2019 RM RM RM RM
Salaries,wagesandotheremoluments 14,379,070 17,766,681 201,032 4,823,078Definedcontributionplans 1,886,854 1,808,229 – 568,440Directors’fees 357,375 531,125 357,375 531,125
16,623,299 20,106,035 558,407 5,922,643
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notes to tHe FinanCiaL stateMents
(Cont’D)
32. EMPLOYEEBENEFITSEXPENSES(CONT’D)
IncludedintheemployeebenefitexpensesistheDirectors’remunerationasbelow:-
Group Company 2020 2019 2020 2019 RM RM RM RM
Executive Directors:ExistingDirectorsoftheCompanySalariesandotheremoluments – 1,839,000 – 1,839,000Definedcontributionplans – 220,680 – 220,680Directors’fees 150,000 – 150,000 –
150,000 2,059,680 150,000 2,059,680
ExistingDirectorsofthesubsidiariesSalariesandotheremoluments 1,584,460 635,500 – –Definedcontributionsplans 235,032 76,260 – –Directors’fees 551,500 – – –
2,370,992 711,760 – –
TotalExecutiveDirectors’remuneration 2,520,992 2,771,440 150,000 2,059,680
Non-ExecutiveDirectors:ExistingDirectorsoftheCompanyDirectors’fees 192,375 466,875 192,375 466,875
PastDirectorsoftheCompanyDirectors’fees 15,000 64,250 15,000 64,250
207,375 531,125 207,375 531,125
2,728,367 3,302,565 357,375 2,590,805
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(Cont’D)
33. EMPLOYEE’SHAREOPTIONSCHEME(“ESOS”)
AtanExtraordinaryGeneralMeetingheldon22December2016,theCompany’sshareholdersapprovedtheestablishmentofESOSfortheeligibleDirectorsandemployeesoftheGroup.TheESOSshallbeinforceforaperiodoften(10)yearscommencingfrom28March2017andwillexpireon27March2027.
ThesalientfeaturesoftheESOSareasfollows:-
(a) themaximumnumberofnewsharesoftheCompanywhichmaybeissuedandallottedpursuanttotheexerciseoftheshareoptionsshallnotinaggregateexceedtenpercent(10%)oftheissuedandpaid-upsharecapitaloftheCompanyatanypointoftimeduringthedurationoftheESOS.
(b) anyemployee(includingExecutiveDirectors)shallbeeligibletoparticipateintheESOSif,asatthedateofoffer,thatpersonisatleasteighteen(18)yearsofageoraboveandisemployedfulltime.
(c) notmorethantenpercentum(10%)(orsuchpercentageasallowablebytherelevantauthorities)ofthesharesavailableundertheESOSshouldbeallocatedtoanyindividualdirectororemployeewho,eithersinglyorcollectivelythroughhis/herassociates,holdstwentypercentum(20%)ormoreintheissuedandpaid-upsharecapitaloftheCompany.
(d) theoptionpriceshallbethehigherofeitherthe5-dayweightedaveragemarketpriceoftheCompany’ssharesatthedateofoffer,withadiscountofnotmorethan10%asmaybepermittedbyrelevantauthoritiesfromtimetotimeduringthedurationoftheESOSortheparvalueoftheCompany’sshare.
(e) optionsareexercisable,inwholeorinpart(providedthatanOptionisexercisedinpartinrespectof100sharesoranymultiplethereof)asfollows:-
MaximumPercentageofOptionsExercisablefromAcceptanceDate
Year 1 Year 2 Year3 Year4 Year 5
20% 40% 60% 80% 100%
Year6 Year 7 Year8 Year9 Year10
100% 100% 100% 100% 100%
(f) the options shall not carry any voting rights at any general meeting of the Company and shall not be entitled to any dividends,rightsand/orotherdistributions.
(g) thenewsharestobeallottedandissueduponexerciseofanyoptionshalluponallotmentrankparipassuinallrespectswiththeexistingsharesoftheCompany.
TheESOShasnotbeengrantedasatsince22December2016.
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notes to tHe FinanCiaL stateMents
(Cont’D)
34. RELATEDPARTYDISCLOSURES
TheGroupandtheCompanyhasrelatedpartyrelationshipwithitssignificantinvestors,subsidiaries,Directorsandkeymanagementpersonnel.
34.1 TransactionswithRelatedParties:-
Group Company 2020 2019 2020 2019 RM RM RM RM
Rentalexpensespaidto companies in which certain Directorshaveinterest 1,207,570 974,278 – –
Management fee charged tosubsidiaries – – 1,200,000 2,400,000
Interestincomecharged tosubsidiaries – – 452,718 –
Management fee charged by a company connected tonon-controllinginterest 63,600 63,600 – –
Salestonon-controllinginterest – 983,984 – –
Salestocompaniesinwhich certainDirectorshaveinterest 29,941,748 15,688,360 – –
Purchase from companies in whichcertainDirectors haveinterest 8,903,048 1,159,064 – –
Salestocompaniesconnected tonon-controllinginterest 559,610 1,135,888 – –
Purchasefromnon-controlling interest – 168,704 – –
Purchase from a company connectedtonon-controlling interest 34,226 – – –
Purchaseofproperty,plant and equipment from a company in which certain Directorshaveinterest 486,329 – – –
Acquisition of a subsidiary fromaDirectorofasubsidiary – 39,000 – –
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(Cont’D)
34. RELATEDPARTYDISCLOSURES(CONT’D)
34.1 TransactionswithRelatedParties(cont’d):-
Group Company 2020 2019 2020 2019 RM RM RM RM
Acquisitionofsubsidiaries’shares fromnon-controllinginterest 39,725,000 – 525,000 –
Acquisition of a subsidiary from a person connected to the DirectorsoftheCompany – 253,500 – –
Disposalofasubsidiary’sshares tonon-controllinginterest 1,275,000 – 1,275,000 –
TheoutstandingbalancesarisingfromrelatedpartytransactionsasatthereportingdatearedisclosedinNotes8,9,11,15,23and24tothefinancialstatements.
TheDirectorsareof theopinion thatall the transactionsabovehavebeenentered into thenormalcourseofbusiness and have been established on terms and conditions that are not materially different from that obtainable intransactionswithunrelatedparties.
34.2 CompensationofKeyManagementPersonnel
Keymanagementpersonnelaredefinedasthosepersonshavingauthorityandresponsibilityforplanning,directingandcontrollingtheactivitiesoftheGroupandtheCompanyeitherdirectlyorindirectlyandentitythatprovideskeymanagementpersonnelservicestotheGroupandtotheCompany.
KeymanagementincludesalltheDirectorsoftheCompany’sanditssubsidiariesandretrainmembersofseniormanagementoftheGroupandoftheCompany.
Group Company 2020 2019 2020 2019 RM RM RM RM
Directors’remuneration 2,728,367 3,302,565 357,375 2,590,805
KeymanagementpersonnelSalaries,wagesand otheremoluments – 585,000 – 585,000Definedcontributionplans – 70,200 – 70,200
– 655,200 – 655,200
2,728,367 3,957,765 357,375 3,246,005
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(Cont’D)
35. OPERATINGSEGMENTS
general information
TheinformationreportedtotheGroup’schiefoperatingdecisionmakertomakedecisionsaboutresourcestobeallocatedandforassessingtheirperformanceisbasedonthenatureoftheactivitiesoftheGroup.TheGroup’soperatingsegmentsareasfollows:-
Products and services segment : Renderingofservices,repair,maintenanceandinstallation,salesofproductsandservices.
Engineeredpackagessegment : Rendering of services, repair,maintenance and installation services ofengineeredpackages.
Manpower supply segment : Supplyofmanpower.
Measurement of reportable segments
Segmentinformationispreparedinconformitywiththeaccountingpoliciesadoptedforpreparingandpresentingtheconsolidatedfinancialstatements.Transactionsbetweenreportablesegmentsaremeasuredonthebasisthatissimilartothoseexternalcustomers.Segmentresultsareprofitearnedorlossincurredbyeachsegmentwithoutallocationoffinancecostsandincometaxexpense.Therearenosignificantchangesfrompriorfinancialyearinthemeasurementmethodsusedtodeterminereportedsegmentresults.
AlltheGroup’sassetsareallocatedtoreportablesegmentsotherthanassetsusedcentrallyfortheGroup,associatecompanies, jointventuresandcurrentanddeferredtaxassets.Jointlyusedassetsareallocatedonthebasisoftherevenuesearnedbyindividualsegments.
AlltheGroup’sliabilitiesareallocatedtoreportablesegmentsotherthanliabilitiesincurredcentrallyfortheGroup,currentanddeferredtaxliabilities.Jointlyincurredliabilitiesareallocatedinproportiontothesegmentassets.
Transferpricesbetweenoperatingsegmentsareonanarm’slengthbasisinamannersimilartotransactionswiththirdparties.
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35.
OPERATIN
GSEGMENTS(C
ONT’D
)
Ana
lysisofth
eGroup
’sre
venu
e,re
sults,a
ssets,liab
ilitiesan
dothe
rinform
ationby
ope
ratin
gsegm
enta
resho
wnbe
low:-
Produ
ctand
En
gine
ered
Man
power
Group
se
rvices
pa
ckag
es
supp
ly
Total
Elim
inations
Note
Con
solid
ated
2020
RM
RM
RM
RM
RM
RM
Rev
enue
Externalre
venu
e14
4,59
4,29
58,90
3,17
835
,909
,585
18
9,40
7,05
8–
18
9,40
7,05
8Interseg
men
treven
ue
30,515
,596
1,46
0,65
5–
31,976
,251
(31,97
6,25
1)
A–
Totalreven
ue
175,10
9,89
110
,363
,833
35
,909
,585
22
1,38
3,30
9(31,97
6,25
1)
18
9,40
7,05
8
Res
ults
Segm
ent(loss)/p
rofit
(55,29
8,84
2)
(3,638
,116
)27
2,00
8(58,66
4,95
0)
63,926
,508
B
5,26
1,55
8Fina
nceinco
mes
4,64
0,50
488
6–
4,64
1,39
0(3,467
,334
)
1,17
4,05
6Fina
nceco
sts
(7,416
,172
)(406
,148
)(438
,227
)(8,260
,547
)4,90
4,23
1
(3,356
,316
)Dep
reciationan
dam
ortisation
(1,827
,170
)(2,827
,159
)(33,08
0)
(4,687
,409
)(558
,585
)
(5,245
,994
)Tax(exp
enses)/in
come
(4,690
,405
)(383
,884
)43
,736
(5,030
,553
)61
4,29
9
(4,416
,254
)Othernon
-cas
hinco
me/(exp
ense
)5,82
1,97
1(2,263
,436
)51
,124
3,60
9,65
9(535
,422
)C
3,07
4,23
7
Ass
ets
Segm
enta
ssets
827,99
5,21
496
,478
,926
10
,241
,822
93
4,71
5,96
2(470
,794
,207
)D
463,92
1,75
5Ad
ditio
nsto
non
-current
as
sets
oth
er th
anfinan
cialinstrumen
ts
111,12
1,58
948
,396
11
3,99
211
1,28
3,97
797
,160
,228
E
208,44
4,20
5
Liab
ilitie
sSe
gmen
tliabilities
(326
,028
,130
)(44,95
9,49
9)
(4,369
,998
)(375
,357
,627
)29
5,59
6,52
8F
(79,76
1,09
9)
no
tes
to t
He
Fin
an
Cia
L st
ate
Me
nts
(Co
nt’
D)
154
T7 Global berhad RegistRation no. 200401023809 (662315-U)
35.
OPERATIN
GSEGMENTS(C
ONT’D
)
Ana
lysisofth
eGroup
’sre
venu
e,re
sults,a
ssets,liab
ilitiesan
dothe
rinform
ationby
ope
ratin
gsegm
enta
resho
wnbe
low(c
ont’d
):-
Produ
ctand
En
gine
ered
Man
power
Group
(con
t’d)
services
pa
ckag
es
supp
ly
Total
Elim
inations
Note
Con
solid
ated
2019
RM
RM
RM
RM
RM
RM
Rev
enue
Externalre
venu
e17
2,32
9,82
014
,634
,531
46
,523
,664
23
3,48
8,01
5–
23
3,48
8,01
5Interseg
men
treven
ue
21,850
,704
1,13
9,99
01,19
6,12
524
,186
,819
(24,18
6,81
9)
A–
Totalreven
ue
194,18
0,52
415
,774
,521
47
,719
,789
25
7,67
4,83
4(24,18
6,81
9)
23
3,48
8,01
5
Res
ults
Segm
entp
rofit
19,095
,391
1,67
2,39
51,56
5,58
322
,333
,369
(8,890
,974
)B
13,442
,395
Fina
nceinco
mes
1,64
8,77
716
3–
1,64
8,94
0(545
,703
)
1,10
3,23
7Fina
nceco
sts
(1,863
,533
)(449
,819
)(714
,741
)(3,028
,093
)99
0,26
8
(2,037
,825
)Dep
reciationan
dam
ortisation
(1,041
,961
)(2,138
,313
)(63,47
6)
(3,243
,750
)(130
,702
)
(3,374
,452
)Taxinco
me/(exp
ense
s)
5,04
7,19
0(318
,135
)(369
,412
)4,35
9,64
3–
4,35
9,64
3Othernon
-cas
hinco
me/(exp
ense
)2,39
1,29
668
,970
(19,15
4)
2,44
1,11
2
(372
,736
)C
2,06
8,37
6
Ass
ets
Segm
enta
ssets
528,73
4,69
262
,475
,696
14
,290
,915
60
5,50
1,30
3(341
,472
,211
)D
264,02
9,09
2Ad
ditio
nsto
non
-current
as
sets
oth
er th
anfinan
cialinstrumen
ts
9,59
6,74
84,28
4,05
555
,853
13
,936
,656
(968
,561
)E
12,968
,095
Liab
ilitie
sSe
gmen
tliabilities
(226
,328
,315
)(12,20
6,36
4)
(4,545
,647
)(243
,080
,326
)20
8,90
7,79
1F
(34,17
2,53
5)
no
tes
to t
He
Fin
an
Cia
L st
ate
Me
nts
(Co
nt’
D)
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notes to tHe FinanCiaL stateMents
(Cont’D)
35. OPERATINGSEGMENTS(CONT’D)
Notestothenatureofadjustmentsandeliminationstoarriveatamountsreportedintheconsolidatedfinancialstatements.
A. Intersegmentrevenuesareeliminatedonconsolidation.
B. Thefollowingitemsareaddedto/(deductedfrom)segmentprofittoarriveat“profitaftertax”presentedintheprofitorloss:-
2020 2019 RM RM
Segmentprofit 5,261,558 13,442,395Interestincome 1,174,056 1,103,237Financecosts (3,356,316) (2,037,825)
Profitaftertax 3,079,298 12,507,807
C. Othermajornon-cashincome/(expenses)consistofthefollowingitemsaspresentedintherespectivenotestothefinancialstatements:-
2020 2019 RM RM
Amortisationofgovernmentgrant – 1,351,540Baddebtswrittenoff (21,449) (484,853)Fairvaluegainoninvestmentproperties – 50,000Gainondisposalofotherinvestment – 575,778Gainondisposalofassetsheld-for-sale – 563,539Gainondisposalofproperty,plantandequipment 111,649 –Gainonnon-tradepayablecarriedatamortisedcostmovement 280,997 –Goodwillwrittenoff – (163,616)ImpairmentlossonECLs:-Tradereceivables (1,895,390) (169,031)-Otherreceivables – (401,320)Impairmentlossonintangibleassets (1,590,015) –Inventorieswrittendown – (9,549)Inventorieswrittenback 9,549 –Lossonnon-tradereceivablecarriedatamortisedcostmovement (267,711) –Netfairvaluegainonotherinvestment 1,982,898 299,376Property,plantandequipmentwrittenoff – (885)ReversalofECLs:-Tradereceivables 4,363,953 400,573-Otherreceivables – 64,198Unrealisedlossonforeignexchange (47,596) (103,443)Waiverofdebts 147,352 96,069
3,074,237 2,068,376
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35. OPERATINGSEGMENTS(CONT’D)
Notestothenatureofadjustmentsandeliminationstoarriveatamountsreportedintheconsolidatedfinancialstatements(cont’d).
D. Thefollowingitemsareaddedtosegmentassetstoarriveattotalassetsreportedinthestatementsoffinancialposition:-
2020 2019 RM RM
Segmentassets 463,921,755 264,029,092Intangibleassets 2 1,863,413Deferredtaxassets 16,222,000 16,832,000Taxrecoverable 1,637,219 325,202
Totalassets 481,780,976 283,049,707
E. Additionstonon-currentassetsotherthanfinancialinstrumentsanddeferredtaxassetsconsistof:-
2020 2019 RM RM
Property,plantandequipment 203,754,973 10,760,768Right-of-useassets 4,689,232 2,207,327
208,444,205 12,968,095
F. Thefollowingitemsareaddedtosegmentliabilitiestoarriveattotalliabilitiesreportedinthestatementsoffinancialposition:-
2020 2019 RM RM
Segmentliabilities (79,761,099) (34,172,535)Leaseliabilities (6,025,100) (2,502,389)Borrowings (215,760,368) (39,685,550)Governmentgrant (4,865,517) (4,865,517)Taxpayable (620,975) (1,430,040)Deferredtaxliabilities (873,637) (626,438)
Totalliabilities (307,906,696) (83,282,469)
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notes to tHe FinanCiaL stateMents
(Cont’D)
35. OPERATINGSEGMENTS(CONT’D)
Geographicalinformation
TheGroup’srevenueandnon-currentassetsinformationbasedongeographicallocationareasfollows:-
Revenue Non-currentassets 2020 2019 2020 2019 RM RM RM RM
Malaysia* 181,680,794 217,539,308 291,092,421 91,558,092SoutheastAsiaotherthanMalaysia 7,726,264 15,948,707 222 227
189,407,058 233,488,015 291,092,643 91,558,319
*Company’shomecountry
Non-currentassetsinformationpresentedaboveconsistofthefollowingitemsaspresentedinthestatementsoffinancialposition:-
Group 2020 2019 RM RM
Property,plantandequipment 240,637,372 53,980,984Right-of-useassets 23,231,773 8,924,054Investmentproperties 4,200,773 1,300,000Intangibleassets 2 1,863,413Otherinvestments 2,031,923 8,657,868Otherreceivable 1,368,800 –Cashandbankbalances,depositsandplacements 3,500,000 –Deferredtaxassets 16,222,000 16,832,000
291,092,643 91,558,319
Majorcustomers
Thefollowingaremajorcustomerswithrevenueequalormorethan10percentoftheGroup’srevenue:-
RM % OperatingSegment
Group
2020CustomerA 43,776,673 23 Productandservices.CustomerB 23,184,339 12 Productandservices.CustomerC 21,669,704 11 Productandservices.
2019CustomerA 41,093,987 18 Productandservices.
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notes to tHe FinanCiaL stateMents
(Cont’D)
36. FINANCIALINSTRUMENTS
36.1 Categoryoffinancialinstruments
Thetablebelowprovidesananalysisoffinancialinstrumentscategorisedasfollows:-
(i) Fairvaluethroughothercomprehensiveincome(“FVOCI”);(ii) Fairvaluethroughprofitorlossdesignateduponinitialrecognition(“FVTPL”);and(iii) Amortised cost (“AC”)
Group Carrying amount FVOCI FVTPL AC RM RM RM RM
2020Financial assetsTradereceivables 65,022,091 – – 65,022,091Otherreceivables 23,760,333 – – 23,760,333Cashandbankbalances, depositsandplacements 66,051,160 – – 66,051,160Otherinvestments 2,031,923 580,845 1,451,078 –
156,865,507 580,845 1,451,078 154,833,584
FinancialliabilitiesTradepayables 31,384,632 – – 31,384,632Otherpayables 41,209,997 – – 41,209,997Borrowings 215,760,368 – – 215,760,368
288,354,997 – – 288,354,997
2019Financial assetsTradereceivables 96,375,640 – – 96,375,640Otherreceivables 3,606,617 – – 3,606,617Cashandbankbalances, depositsandplacements 43,292,121 – – 43,292,121Otherinvestments 8,657,868 1,619,188 7,038,680 –
151,932,246 1,619,188 7,038,680 143,274,378
FinancialliabilitiesTradepayables 23,161,079 – – 23,161,079Otherpayables 9,983,093 – – 9,983,093Borrowings 39,685,550 – – 39,685,550
72,829,722 – – 72,829,722
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36. FINANCIALINSTRUMENTS(CONT’D)
36.1 Categoryoffinancialinstruments(cont’d)
Thetablebelowprovidesananalysisoffinancialinstrumentscategorisedasfollows(cont’d):-
(i) Fairvaluethroughothercomprehensiveincome(“FVOCI”);(ii) Fairvaluethroughprofitorlossdesignateduponinitialrecognition(“FVTPL”);and(iii) Amortised cost (“AC”)
Company Carrying amount FVOCI FVTPL AC RM RM RM RM
2020Financial assetsOtherreceivable 750,000 – – 750,000Amountduefromsubsidiaries 21,804,039 – – 21,804,039Cashandbankbalances, depositsandplacements 2,753,331 – – 2,753,331Otherinvestments 984,278 – 984,278 –
26,291,648 – 984,278 25,307,370
FinancialliabilitiesOtherpayables 377,512 – – 377,512Amountduetosubsidiaries 44,667 – – 44,667
422,179 – – 422,179
2019Financial assetsAmountduefromsubsidiaries 71,565,027 – – 71,565,027Cashandbankbalances, depositsandplacements 2,680,928 – – 2,680,928Otherinvestments 5,346,530 – 5,346,530 –
79,592,485 – 5,346,530 74,245,955
FinancialliabilitiesOtherpayables 415,752 – – 415,752Amountduetosubsidiaries 2,386,480 – – 2,386,480
2,802,232 – – 2,802,232
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36. FINANCIALINSTRUMENTS(CONT’D)
36.2 Netgainsandlossesarisingfromfinancialinstruments
Group Company 2020 2019 2020 2019 RM RM RM RM
Net(losses)/gainson:-FinancialassetsatFVOCI-recognisedinother comprehensiveincome (1,038,343) (1,313,423) – –
FinancialassetsatFVTPL-recognisedinprofitorloss 1,982,898 299,376 3,208,248 276,626
FinancialassetsatAC-recognisedinprofitorloss 2,468,563 (105,580) 2,264,793 (698,430)
36.3 Financialriskmanagement
TheGroupandtheCompanyaremainlyexposedtocreditrisk,liquidityrisk,foreigncurrencyrisk,interestrateriskandequitypricerisk.TheGroupandtheCompanyhaveformalriskmanagementpoliciesandguidelines,asapprovedbytheBoardofDirectors,whichsetoutitsoverallbusinessstrategies, itstoleranceforrisksanditsgeneralriskmanagementphilosophy.Suchpoliciesaremonitoredandundertakenbythemanagement.
ThefollowingsectionsexplainkeyrisksfacedbytheGroupandtheCompanyanditsmanagement.FinancialassetsandliabilitiesoftheGroupandoftheCompanyaresummarisedinNotes3.8.1and3.8.2tothefinancialstatements.
36.3.1 Creditrisk
CreditriskreferstotheriskthatacounterpartywilldefaultinitscontractualobligationsresultinginfinanciallosstotheGroupandtheCompany.Forotherfinancialassets,theCompanyadoptsthepolicyofdealingwithreputableinstitutions.
FollowingaretheareaswheretheGroupandtheCompanyareexposedtocreditrisk.
Exposuretocreditrisk
MaximumexposureoftheGroupandoftheCompanytocreditriskisrepresentedbythecarryingamountoffinancialassetsrecognisedatreportingdateassummarisedbelow:-
Group 2020 2019 RM RM
Classesoffinancialassets:-Tradereceivables 65,022,091 96,375,640Otherreceivables 23,760,333 3,606,617Contractassets 1,558,206 2,142,075Cashandbankbalances,depositsandplacements 66,051,160 43,292,121
156,391,790 145,416,453
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36. FINANCIALINSTRUMENTS(CONT’D)
36.3 Financialriskmanagement(cont’d)
36.3.1 Creditrisk(cont’d)
Exposuretocreditrisk (cont’d)
MaximumexposureoftheGroupandoftheCompanytocreditriskisrepresentedbythecarryingamountoffinancialassetsrecognisedatreportingdateassummarisedbelow(cont’d):-
Company 2020 2019 RM RM
Classesoffinancialassets:-Otherreceivable 750,000 –Amountduefromsubsidiaries 21,804,039 71,565,027Cashandbankbalances,depositsandplacements 2,753,331 2,680,928
25,307,370 74,245,955
Receivablesandcontractassets
Recognitionandmeasurementofimpairmentloss
Inmanagingcreditriskoftradereceivables,theGroupmanagetheirdebtorsandtakesappropriateactions(includingbutnotlimitedtolegalactions)torecoverlongoverduebalances.TheGroup’sdebtrecoveryareasfollows:-
(a) Above30dayspastdueaftercreditterm,theGroupwillstarttoinitiatetogetherwithtreasuryteamastructureddebtrecoveryprocesswhichismonitoredbythesalesmanagementteam;and
(b) TheGroupwillcommencealegalproceedingagainstthecustomerswhodoesnotadheretotherestructureoftherepaymentscheme.
TheGroupusesprovisionmatrixtomeasureECLsforallthepastduedebts.Credittermwhicharepastduemorethan365dayswillbeconsideredascreditimpaired.
TheGroupassessedtheriskorlossbasedonthefollowingfactors:-
(i) Overallpasttrendpaymentsofcustomers;(ii) Financialperformancesofeachindividualcustomers;and(iii) Costofborrowingsandinterestincomerate.
None of theGroup’s and theCompany’s financial assets are secured by collateral or other creditenhancements.
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36. FINANCIALINSTRUMENTS(CONT’D)
36.3 Financialriskmanagement(cont’d)
36.3.1 Creditrisk(cont’d)
Exposuretocreditrisk (cont’d)
SetoutbelowistheinformationaboutthecreditriskexposureandECLsontheGroup’stradereceivablesandcontractassets.
Group Gross carrying Loss Net amount allowances balances RM RM RM
2020Current(Notpastdue) 34,447,750 (85,987) 34,361,7631-30dayspastdue 1,333,147 (11,488) 1,321,65931-60dayspastdue 3,722,839 (60,965) 3,661,87461-90dayspastdue 698,379 (5,760) 692,619Morethan90dayspastdue 27,328,912 (786,530) 26,542,382
Creditimpaired 67,531,027 (950,730) 65,580,297IndividuallyimpairedMorethan90dayspastdue 6,138,111 (6,138,111) –
73,669,138 (7,088,841) 65,580,297
Tradereceivables 72,110,932 (7,088,841) 65,022,091Contractassets 1,558,206 – 1,558,206
73,669,138 (7,088,841) 65,580,297
2019Current(Notpastdue) 40,799,735 – 40,799,7351-30dayspastdue 6,886,594 (330) 6,886,26431-60dayspastdue 1,919,940 (4,705) 1,915,23561-90dayspastdue 3,006,431 (812) 3,005,619Morethan90dayspastdue 46,207,893 (297,031) 45,910,862
Creditimpaired 98,820,593 (302,878) 98,517,715IndividuallyimpairedMorethan90dayspastdue 9,254,526 (9,254,526) –
108,075,119 (9,557,404) 98,517,715
Tradereceivables 105,933,044 (9,557,404) 96,375,640Contractassets 2,142,075 – 2,142,075
108,075,119 (9,557,404) 98,517,715
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36. FINANCIALINSTRUMENTS(CONT’D)
36.3 Financialriskmanagement(cont’d)
36.3.1 Creditrisk(cont’d)
Exposuretocreditrisk (cont’d)
TheGroupandtheCompanyusethreecategoriestoreflectitscreditriskandhowthelossallowanceisdeterminedforeachofthosecategoriesforfinancialassetsotherthantradereceivables.AsummaryoftheassumptionsunderpinningtheGroup’sandtheCompany’sexpectedcreditlossmodelisasfollows:-
Category DefinitionofcategoriesBasisofrecognisingexpectedcreditloss
Performing Receivables have a low risk of default and a strong capacity to meet contractual cash flows.
12monthsexpectedcreditloss
Underperforming Receivablesforwhichthereisasignificantincrease in credit risk due to actual or expected significant adverse changes inbusiness,financialoreconomicconditionsthat are expected to cause a significantchange to the debtor’s ability tomeet itsobligations.
Lifetimeexpectedcreditloss
Non-performing Receivableswhicharecredit-impairedwhenone or more events that have a detrimental impactontheestimatedfuturecashflowshaveoccurred.
Lifetimeexpectedcreditloss
Basedontheabove,lossallowanceisderivedasfollows:-
(i) thelikelihoodthatthedebtorwouldnotbeabletorepayduringthecontractualperiod;(ii) thepercentageofcontractualcashflowsthatwillnotbecollectedifdefaulthappens;and(iii) theoutstandingamountthatisexposedtodefaultrisk.
Credit risk concentration
ThecreditriskconcentrationprofilebygeographicalontradereceivablesoftheGroupasatthereportingdateisasfollows:-
Group 2020 2019 RM RM
Bycountry:-Malaysia 60,397,184 76,244,190UnitedArabEmirates 3,058,103 4,802,796SoutheastAsiaotherthanMalaysia 1,566,804 15,328,654
65,022,091 96,375,640
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36. FINANCIALINSTRUMENTS(CONT’D)
36.3 Financialriskmanagement(cont’d)
36.3.1 Creditrisk(cont’d)
Credit risk concentration (cont’d)
TheGroupdeterminesconcentrationofcredit riskbycomparingtheamountduefromeach individualcustomeragainst the total trade receivables.Thecredit riskconcentrationprofileof theGroup’s tradereceivableatthereportingdateisasfollows:-
Group 2020 2020 2019 2019 RM % RM %
CustomerA 17,696,906 27 – –
Intercompanybalances
TheGroupandtheCompanyprovideadvancestosubsidiariesandmonitorstheabilityofthesubsidiariestorepaytheadvancesonanindividualbasis.
Loans and advances provided are not secured by any collateral or supported by any other creditenhancements.
Generally,theGroupandtheCompanyconsiderloansandadvancestosubsidiariestohavelowcreditrisk.TheGroupandtheCompanyassumethatthereisasignificantincreaseincreditriskwhenthesubsidiaries’financialpositiondeterioratessignificantly.AstheGroupandtheCompanyareabletodeterminethetimingofpaymentsoftheloansandadvanceswhentheyarepayable,theGroupandtheCompanyconsiderthe loans and advances to be in default when the subsidiaries and joint venture are not able to pay when demanded.TheGroupandtheCompanyconsidertheloanoradvancestobecreditimpairedwhenthesubsidiariesareunlikelytorepaytheirloanoradvancetotheGrouportheCompanyinfull,theloanoradvanceisoverdueformorethanayear,orthesubsidiariesarecontinuouslylossmakingandhavingdeficitinshareholders’funds.
TheGroupandtheCompanydeterminetheprobabilityofdefaultfortheseloansandadvancesindividuallyusinginternalinformationavailable.
Cashandbankbalances,depositsandplacements
Thecreditriskforcashandbankbalances,depositsandplacementsareconsiderednegligible,sincethecounterpartiesarereputablefinancialinstitutionswithhighqualityexternalcreditratingsandhavenohistoryofdefault.Consequently,theGroupandtheCompanyareoftheviewthattheallowanceisnotmaterialandhence,itisnotprovidedfor.
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36. FINANCIALINSTRUMENTS(CONT’D)
36.3 Financialriskmanagement(cont’d)
36.3.1 Creditrisk(cont’d)
Corporateguarantee/Financialguarantee
ThemaximumexposuretocreditriskoftheGroupandtheCompanyareamountedtoRM21,466,754andRM132,503,993(2019:RM11,964,247andRM51,649,797)respectively,representedbytheoutstandingbanking facilities of subsidiaries and performance guarantee extended to third parties in respect ofsubcontractors’performanceasattheendofthereportingperiod.
TheGroupandtheCompanyprovideunsecuredfinancialguarantees/unsecuredperformanceguaranteeto banks in respect of banking facilities granted to certain subsidiaries and third parties in respect of subcontractors’performance.TheGroupandtheCompanymonitoronanon-goingbasistheresultsofthesubsidiariesandthirdpartiesandrepaymentsmadebythesubsidiariesandthirdparties’performance.Asattheendofthereportingperiod,therewasnoindicationthatanysubsidiariesandthirdpartieswoulddefaultonrepaymentandunderperform.
36.3.2 Liquidityrisk
Liquidity risk refers to the risk that theGroupand theCompanywillencounterdifficulty inmeeting itsobligationsasandwhentheyfalldue.TheGroup’sandtheCompany’sexposuretoliquidityriskarisesparticularlyfrompayables, loansandborrowingsanditmaintainsa levelofcashandcashequivalentsdeemedadequatebymanagementtoensureithassufficientliquiditytomeetsitsobligationsasandwhentheyfalldue.
Analysisoffinancialinstrumentsbyremainingcontractualmaturities
ThefollowingfinancialliabilitiesoftheGroupandtheCompanyaresubjectedtoliquidityrisk:-
Contractualcashflows Current Non-current
On demand/ Carrying Within 2 to 5 More than Group amount Total oneyear years 5years RM RM RM RM RM
2020Non-derivative financialliabilities Secured Borrowings 22,405,013 34,966,936 2,610,399 10,284,453 22,072,084 Unsecured Tradepayables 31,384,632 31,384,632 31,384,632 – –Otherpayables 41,209,997 41,209,997 25,152,994 16,057,003 –Leaseliabilities 6,025,100 6,533,170 2,103,880 4,429,290 –Borrowings 193,355,355 207,775,597 93,601,392 114,174,205 – 294,380,097 321,870,332 154,853,297 144,944,951 22,072,084
Performanceguarantee* 21,466,754 21,466,754 21,466,754 – –
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36. FINANCIALINSTRUMENTS(CONT’D)
36.3 Financialriskmanagement(cont’d)
36.3.2 Liquidityrisk(cont’d)
Analysisoffinancialinstrumentsbyremainingcontractualmaturities (cont’d)
ThefollowingfinancialliabilitiesoftheGroupandtheCompanyaresubjectedtoliquidityrisk(cont’d):-
Contractualcashflows Current Non-current
On demand/ Carrying Within 2 to 5 More than Group(cont’d) amount Total oneyear years 5years RM RM RM RM RM
2019Non-derivative financialliabilitiesSecured Borrowings 17,114,213 22,845,395 2,118,276 8,174,999 12,552,120 Unsecured Tradepayables 23,161,079 23,161,079 23,161,079 – –Otherpayables 9,983,093 9,983,093 9,983,093 – –Leaseliabilities 2,502,389 2,708,456 995,195 1,713,261 –Borrowings 22,571,337 22,571,337 22,571,337 – – 75,332,111 81,269,360 58,828,980 9,888,260 12,552,120
Performanceguarantee* 11,964,247 11,964,247 11,964,247 – –
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36. FINANCIALINSTRUMENTS(CONT’D)
36.3 Financialriskmanagement(cont’d)
36.3.2 Liquidityrisk(cont’d)
Analysisoffinancialinstrumentsbyremainingcontractualmaturities (cont’d)
ThefollowingfinancialliabilitiesoftheGroupandtheCompanyaresubjectedtoliquidityrisk(cont’d):-
Contractualcashflows Current Non-current
On demand/ Carrying Within 2 to 5 More than Company amount Total oneyear years 5years RM RM RM RM RM
2020Non-derivative financialliabilities Unsecured Otherpayables 377,512 377,512 377,512 – –Amount due to subsidiaries 44,667 44,667 44,667 – – 422,179 422,179 422,179 – –
Corporateguarantee* 116,118,239 116,118,239 116,118,239 – –Performanceguarantee* 16,385,754 16,385,754 16,385,754 – – 132,503,993 132,503,993 132,503,993 – –
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36. FINANCIALINSTRUMENTS(CONT’D)
36.3 Financialriskmanagement(cont’d)
36.3.2 Liquidityrisk(cont’d)
Analysisoffinancialinstrumentsbyremainingcontractualmaturities (cont’d)
ThefollowingfinancialliabilitiesoftheGroupandtheCompanyaresubjectedtoliquidityrisk(cont’d):-
Contractualcashflows Current Non-current
On demand/ Carrying Within 2 to 5 More than Company(cont’d) amount Total oneyear years 5years RM RM RM RM RM
2019Non-derivative financialliabilitiesUnsecuredOtherpayables 415,752 415,752 415,752 – –Amount due to subsidiaries 2,386,480 2,386,480 2,386,480 – – 2,802,232 2,802,232 2,802,232 – –
Corporateguarantee* 39,685,550 39,685,550 39,685,550 – –Performanceguarantee* 11,964,247 11,964,247 11,964,247 – –
51,649,797 51,649,797 51,649,797 – –
* Thisexposureisincludedinliquidityriskforillustrationonly.Nofinancialguaranteewascalleduponbytheholdersasattheendofthereportingperiod.
Theaboveamountsreflectthecontractualundiscountedcashflows,whichmaydifferfromthecarryingvaluesofthefinancialliabilitiesatthereportingdate.
36.3.3 Foreigncurrencyrisk
Foreigncurrencyriskistheriskthatthefairvalueorfuturecashflowsofafinancialinstrumentwillfluctuatebecauseofchangesinforeignexchangerates.
TomitigatetheGroup’sandtheCompany’sexposuretoforeigncurrencyrisk,theGroupandtheCompanyareexposed to foreigncurrency riskonsales,purchasesand investments that aredenominated inacurrencyotherthanthefunctionalcurrenciesofCompany.ThecurrencygivingrisetothisriskisprimarilyAustralianDollar(“AUD”),Euro(“EURO”),GreatBritainPound(“GBP”),JapaneseYen(“JPY”),SingaporeDollar(“SGD”)andUnitedStatesDollar(“USD”).
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36. FINANCIALINSTRUMENTS(CONT’D)
36.3 Financialriskmanagement(cont’d)
36.3.3 Foreigncurrencyrisk(cont’d)
ThecarryingamountoftheGroup’sandtheCompany’sforeigncurrencydenominatedfinancialassetsandfinancialliabilitiesattheendofthereportingperiodareasfollows:-
Group AUD EURO GBP JPY SGD USD Total RM RM RM RM RM RM RM 2020 Tradereceivables – 146,566 348,713 – 149,832 30,898,544 31,543,655Cash and bank balances,deposits andplacements 49,013 1,364,494 656,013 340,796 1,894,679 4,142,760 8,447,755Tradepayables – (17,491) (474,657) – (11,269) (20,029,014) (20,532,431)Otherpayables – – – – – (85,480) (85,480)Borrowings – (501,915) (2,844,636) (2,401,904) (1,387,344) (34,064,290) (41,200,089)
Netexposure 49,013 991,654 (2,314,567) (2,061,108) 645,898 (19,137,480) (21,826,590)
2019 Tradereceivables – 1,067,130 1,848,775 – 1,316,648 20,348,033 24,580,586Cash and bank balances,deposits andplacements 1,470,711 1,491,915 1,955,658 41,533 694,017 6,249,195 11,903,029Tradepayables – – – – (501,716) (7,671,379) (8,173,095)Borrowings – (408,476) (2,384,169) – – (4,512,129) (7,304,774)
Netexposure 1,470,711 2,150,569 1,420,264 41,533 1,508,949 14,413,720 21,005,746
Company 2020 Cash and bank balances,deposits andplacements 45,891 – 126,890 – 64,020 188,897 425,698Otherpayables – – – – – (85,480) (85,480) Netexposure 45,891 – 126,890 – 64,020 103,417 340,218
2019 Cash and bank balances,deposits andplacements 1,462,391 – 124,703 – 65,101 110,983 1,763,178
Certainoftheotherforeigncurrenciesarenotpresentedastheamountsarenotmaterial.
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36. FINANCIALINSTRUMENTS(CONT’D)
36.3 Financialriskmanagement(cont’d)
36.3.3 Foreigncurrencyrisk(cont’d)
Foreign currency risk sensitivity analysis
ThefollowingtableillustratesthesensitivityofprofitorlosswithregardstotheGroup’sandtheCompany’sfinancialassetsandfinancialliabilitiesandtheRM/AUDexchangerate,RM/EUROexchangerate,RM/GBPexchangerate,RM/JPYexchangerate,RM/SGDexchangerateandRM/USDexchangerateassumingallotherthingsbeingequal.
A+/-1%to+/-3%(2019:+/-1%to+/-2%)changeintheRM/AUD,RM/EURO,RM/GBP,RM/JPY,RM/SGDandRM/USDexchangeratesatthereportingperiodisdeemedpossible.Bothofthesepercentageshavebeendeterminedbasedonaveragemarketvolatilityinexchangeratesintheprevious12months.ThesensitivityanalysisisbasedontheGroup’sandtheCompany’sforeigncurrencyfinancialinstrumentsheldateachreportingdateandalsotakesintoaccountforwardexchangecontractsthatoffseteffectsfromchangesincurrencyexchangerates.
IftheRMhadstrengthened/weakenedagainsttheAUD,EURO,GBP,JPY,SGDandUSDby1%to3%(2019:1%to2%),thentheimpactwouldbeasfollows:-
Effectonequity/profitfortheyears/equity Group Company
2020 2019 2020 2019 RM RM RM RM
RM/AUD-Strengthened3%(2019:1%) 1,470 14,707 1,377 14,624-Weakened3%(2019:1%) (1,470) (14,707) (1,377) (14,624)
RM/EURO-Strengthened2%(2019:1%) 19,833 21,506 – –-Weakened2%(2019:1%) (19,833) (21,506) – –
RM/GBP-Strengthened2%(2019:2%) (46,291) 28,405 2,538 2,494-Weakened2%(2019:2%) 46,291 (28,405) (2,538) (2,494)
RM/JPY-Strengthened2%(2019:1%) (41,222) 415 – –-Weakened2%(2019:1%) 41,222 (415) – –
RM/SGD-Strengthened1%(2019:1%) 6,459 15,089 640 651-Weakened1%(2019:1%) (6,459) (15,089) (640) (651)
RM/USD-Strengthened1%(2019:1%) (191,375) 144,137 1,034 1,110-Weakened1%(2019:1%) 191,375 (144,137) (1,034) (1,110)
Exposurestoforeignexchangeratesvaryduringthefinancialyeardependingonthevolumeofoverseastransactions.Nonetheless,theanalysisaboveisconsideredtoberepresentativeoftheGroup’sandtheCompany’sexposuretocurrencyrisk.
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36. FINANCIALINSTRUMENTS(CONT’D)
36.3 Financialriskmanagement(cont’d)
36.3.4 Interestraterisk
InterestrateriskiscausedbychangesinmarketinterestrateresultinginfluctuationinfairvalueorfuturecashflowoffinancialinstrumentsoftheGroupandoftheCompany.TheGroup’sandtheCompany’sinterestratemanagementobjectiveistomanageinterestexpensesconsistentwithmaintaininganacceptablelevelofexposuretointerestratefluctuation.
TheGroup’sborrowingisatfixedinterestrates.TheexposuretointerestratesfortheGroup’sshort-termplacementisconsideredimmaterial.
ThecarryingamountoftheGroup’sandtheCompany’sfinancialinstrumentsthatareexposedtointerestrateriskareasfollows:-
Group Company 2020 2019 2020 2019 RM RM RM RM
Fixed rate instruments Financial assetsAmount due from subsidiaries – – 11,584,766 9,765,424Otherreceivable 1,368,800 – – –Depositswith licensedbanks 17,655,082 14,819,638 – –
FinancialliabilitiesOtherpayable (16,057,003) – – –Leaseliabilities (6,025,100) (2,502,389) – –Borrowings (92,153,226) (22,571,337) – – (95,211,447) (10,254,088) 11,584,766 9,765,424
Floating rate instrument FinancialliabilitiesBorrowings (123,607,142) (17,114,213) – –
Fairvaluesensitivityanalysisforfixedrateinstruments
TheGroupandtheCompanydonotaccountforanyfixedratefinancialassetsandliabilitiesatfairvaluethroughprofitorlossanddoesnotdesignatederivativesashedginginstrumentsunderafairvaluehedgeaccountingmodel.Therefore,achangeininterestratesattheendofthereportingperiodwouldnotaffectprofitorloss.
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36. FINANCIALINSTRUMENTS(CONT’D)
36.3 Financialriskmanagement(cont’d)
36.3.4 Interestraterisk(cont’d)
Fairvaluesensitivityanalysisforfloatingrateinstruments
Thefollowingtableillustratesthesensitivityofprofittoareasonablypossiblechangeininterestratesof+/-25(2019:+/-25)basispoints(“bp”).Thesechangesareconsideredtobereasonablypossiblebasedonobservationofcurrentmarketconditions.Thecalculationsarebasedonachangeintheaveragemarketinterestrateforeachyear,andthefinancialinstrumentsheldateachreportingdatethataresensitivetochangesininterestrates.Allothervariablesareheldconstant.
Effectonprofitforthe years/equity Group RM RM
2020(+/-25bp) (309,018) 309,018
2019(+/-25bp) (42,785) 42,785
fair value measurement
ThecarryingamountsoffinancialassetsandliabilitiesoftheGroupandoftheCompanyatthereportingdateapproximatetheirfairvaluesduetotheirshort-termnatureortheyarefloatingrateinstrumentsre-pricedtomarketinterestratesonornearthereportingdate.
36.3.5 Equitypricerisk
Equitypriceriskistheriskthatthevalueofanequityinstrumentwillfluctuateasaresultofchangesinmarketprices.TheGroupandtheCompanyareexposedtoequitypriceriskmainlythroughtheGroup’sandtheCompany’sinvestmentinquotedshares.
Iftheunitpricesforquoted‘fairvaluethroughothercomprehensiveincome’financialassetsincreasedby10%(2019:10%),withallothervariablesbeingheldconstant,theGroup’sprofitforthefinancialyearandequityfinancialassetsreservesattheendofthereportingperiodwouldincreaseapproximatelybyRM58,085(2019:RM161,918)respectively.
Iftheunitpricesquoted‘fairvaluethroughprofitorloss’financialassetsincreasedby10%(2019:10%),withallothervariablesheldconstant,theGroup’sandtheCompany’sprofitforthefinancialyearandequityfinancialassetsreservesattheendofthereportingperiodwouldincreaseapproximatelybyRM145,108andRM98,428(2019:RM703,868andRM534,653)respectively.
Iftheunitpricesforquoted‘fairvaluethroughothercomprehensiveincomeandfairvaluethroughprofitorloss’financialassetsdecreasedby10%,withallothervariablesbeingheldconstant,itwouldhavetheequalbutoppositeeffectontheamountsshownabove.
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37. FAIRVALUEOFFINANCIALINSTRUMENTS
ThecarryingamountsoffinancialassetsandliabilitiesoftheGroupandoftheCompanyatthereportingdateapproximatelytheirfairvaluesduetotheirshort-termnature,insignificantimpactofdiscountingorthattheyarefloatingrateinstrumentsthatarere-pricedtomarketinterestratesonornearthereportingdate.
ItwasnotpracticabletoestimatethefairvalueoftheGroup’sandoftheCompany’sinvestmentinunquotedsharesduetothelackofcomparablequotedpricesinactivemarket.Inaddition,itisimpracticabletousevaluationtechniquetoestimatethefairvaluereliablyasaresultofsignificantvariabilityintheinputsofthevaluationtechnique.TheGroupandtheCompanydonotintendtodisposeoftheseinvestmentsinthenearfuture.
Thefairvalue iscalculatedbasedonthepresentvalueof futureprincipaland interestcashflows,discountedatthemarketrateofinterestattheendofthereportingperiod.Forfinanceleasesthatmarketrateoninterestisdeterminedbyreferencetosimilarleaseagreements.Theinterestratesusedtodiscountestimatedcashflows,whenapplicableareasfollows:-
Group 2020 2019 % % Otherreceivable 3.70 -Otherpayable 1.75 -Leaseliabilities 4.07-11.97 3.50-4.85Borrowings 1.70-6.57 1.83-6.35
37.1 Fairvaluehierarchy
ThecarryingamountsoffinancialassetsandliabilitiesoftheGroupandoftheCompanyatthereportingdateapproximatelytheirfairvaluesbecausetheyarefloatingrateinstrumentswhicharere-pricedtomarketratesonornearreportingdateortheyhaveashortmaturityperiod.
Fairvaluemeasurementoffinancialinstruments
Thefollowingtablesummarisesthemethodusedindeterminingthefairvalueoffinancialassetsonarecurringbasisasat31December2020and31December2019:-
Financial assets
Group
Fair value as at
2020RM
2019RM
Fair valuehierarchy
Valuation techniques andkeyinputs
Quotedinvestment-FVOCI 580,845 1,619,188 Level1 Quotedbidpricesinanactivemarket.
Quotedinvestment-FVTPL 1,451,078 7,038,680 Level1 Quotedbidpricesinanactivemarket.
Financial assets
Company
Fair value as at
2020RM
2019RM
Fair valuehierarchy
Valuation techniques andkeyinputs
Quotedinvestment-FVTPL 984,278 5,346,530 Level1 Quotedbidpricesinanactivemarket.
TherewerenotransfersbetweenLevelin2020and2019.
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38. CAPITALMANAGEMENT
TheprimaryobjectiveofthemanagementoftheGroup’sandoftheCompany’scapitalstructureistooptimisethebalancebetweendebtsandequitytoachievealowcostofcapitalandmaximisethereturntostakeholders.
ThecapitalstructureoftheGroupandoftheCompanyconsistsofdebts(comprisingleaseliabilities)andequity(comprisingissuedordinaryshares,accumulatedlossesandotherreserves).TheGroupandtheCompanymonitortheircapitalusingagearingratio,basedontotalborrowingsdividedbytotalcapital.TheDirectorsreviewthecapitalstructureonaquarterlybasis,andconsiderthecostofcapitalandtherisksassociatedwitheachclassofcapital.Duringthecurrentfinancialyear,nosignificantchangesweremadeintheobjectives,policiesorprocessesformanagingcapital.
Thegearingratioattheendofthereportingperiodwasasfollows:-
Group Company 2020 2019 2020 2019 RM RM RM RM
Leaseliabilities(Note20) 6,025,100 2,502,389 – –Borrowings(Note21) 215,760,368 39,685,550 – – 221,785,468 42,187,939 – –
Equityattributabletoowners oftheCompany 177,455,628 179,815,136 171,871,542 218,041,970
Debt-to-equityratio 1.25 0.23 – –
UndertherequirementofBursaMalaysiaPracticeNoteNo.17/2005,theCompanyisrequiredtomaintainaconsolidatedshareholders’equityequaltoornotlessthanthe25%oftheissuedandpaid-upcapital(excludingtreasuryshares)andsuchshareholders’equityisnotlessthanRM40,000,000.TheCompanyhascompliedwiththisrequirement.
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(Cont’D)
39. SIGNIFICANTEVENTSDURINGANDAFTERTHEREPORTINGPERIOD
(a) On11March2020,theWorldHealthOrganisationdeclaredtheCoronavirus(“COVID-19”)outbreakasapandemicinrecognitionofitsrapidspreadacrosstheglobe.On16March2020,theMalaysianGovernmenthasimposedtheMovementControlOrder(“MCO”)startingfrom18March2020tocurbthespreadoftheCOVID-19outbreakinMalaysia.TheCOVID-19outbreakalsoresultedintravelrestriction,lockdownandotherprecautionarymeasuresimposedinvariouscountries.TheemergenceoftheCOVID-19outbreaksinceearly2020hasbroughtsignificanteconomicuncertaintiesinMalaysiaandmarketsinwhichtheGroupandtheCompanyoperate.
TheGroupandtheCompanyaresignificantlyimpactedbytheCOVID-19.Assuch,theGroupandtheCompanyhaveimplementedseveralmeasurestoweatherthroughthiscurrentchallengingtime.Thefollowingmeasureshadbeentaken,withfurtheradditionaleffortstobetaken:
Operations
TheGroupandtheCompanyhavetemporaryshutdownitspremisesfrom18March2020inalignmentwiththeMCOPolicy.TheGroup’sandtheCompany’soperationsresumedgradually fromearlyApril2020withproperStandardOperatingProceduresputinplaceandachievedfulloperationinearlyMay2020.ThedisruptionofitsoperationsduringthefinancialyearduetoMCOandtherelevantfinancialimpacthasbeentakenintoaccountinthefinancialresultsoftheCompany.
TheGovernmentofMalaysiahasagainimposedtheMCOandConditionalMovementControlOrder(“CMCO”)forselectedstateswhichareseverelyaffectedbytheCOVID-19on11January2021.Besides,theKingdeclaredstateofemergencyforthecountryuntil1August2021tocurbthespreadofCOVID-19on12January2021.
The restrictions imposed have not, however, negatively impacted theGroup’s and theCompany’s financialperformanceastheGroupandtheCompanywereallowedtooperatethroughouttheMCO/CMCO,underguidelinessetbytheNationalSecurityCouncil,MinistryofHealthandMinistryofInternationalTradeandIndustryrespectively.
Asatthedateofauthorisationofthefinancialstatements,theCOVID-19pandemicsituationisstillevolvinganduncertain.TheGroupandtheCompanywillcontinuetoactivelymonitorandmanageitsfundsandoperationstominimiseanyimpactarisingfromtheCOVID-19pandemic.
(b) On21September2020,awholly-ownedsubsidiaryof theCompany,T7PropertySdn.Bhd.entered intoanagreementfortheacquisitionofallthesharesinRuzdaEngineering&ServicesSdn.Bhd.viaatotalconsiderationofRM2,500,000.AdepositofRM250,000hasbeenpaidtotheownersuponsigningtheagreementandtheremainingconsiderationofRM2,250,000willbepaidwithin90daysoftheagreementbecomingunconditional.Asatthedateofauthorisedfinancialstatements,theacquisitionisnotcompleted.
(c) On14January2021, theCompany issued102,000,000newordinarysharesviaaprivateplacementatanissuepriceofRM0.3650perordinarysharesforatotalcashconsiderationofRM37,230,000forworkingcapitalpurposes.
(d) On29January2021,awholly-ownedsubsidiaryoftheCompany,TanjungOffshoreServicesSdn.Bhd.hadenteredintoShareSaleAgreementwithFircroftEngineeringServicesLimitedfortheproposedacquisitionof49%equityinterestinT7IntelligentResourcesSdn.Bhd.(“T7IR”)(formerlyknownasFircroftTanjungSdn.Bhd.)foracashpurchaseconsiderationof49%ofT7IR’snetassetsasat31January2021.Theacquisitionwascompletedon8March2021.
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notiCe oF aNNUal GeNeral MeeTING
NOTICE IS HEREBY GIVENthattheSeventeenthAnnualGeneralMeetingoftheCompanywillbeconductedfullyvirtualattheBroadcastVenueatLevel16,KLTrillionCorporateTower,BlockC,338JalanTunRazak,50400KualaLumpur,WilayahPersekutuanviaremoteparticipationandvotingfacilitiesonMonday,28June2021at10:00a.m.forthefollowingpurposes:-
AGENDA
Ordinary Business
1. ToreceivetheAuditedFinancialStatementsforthefinancialyearended31December2020togetherwiththeReportsoftheDirectorsandtheAuditorsthereon.
(please refer toexplanatory Note 1)
2. ToapprovethepaymentofDirectors’feesofRM225,000/-fortheperiodfrom29June2021totheEighteenthAnnualGeneralMeetingoftheCompanyinyear2022.
(Ordinary resolution 1)
3. ToapprovethepaymentofbenefitspayabletotheNon-ExecutiveDirectorsuptoanamountofRM178,000/-fortheperiodfrom29June2021totheEighteenthAnnualGeneralMeetingoftheCompanyinyear2022pursuanttoSection230(1)(b)oftheCompaniesAct2016.
(Ordinary resolution 2)
4. Tore-electthefollowingDirectorswhoareretiringinaccordancewithClause123oftheCompany’sConstitutionandbeingeligible,haveofferedthemselvesforre-election:-
(i) Mr.TanKayVin;and
(ii) Ms.TanSamEng.
(Ordinary resolution 3)
(Ordinary resolution 4)
5. Tore-electTanSriDato’SriKohKinLip,J.P.,aDirectorwhoisretiringinaccordancewithClause106oftheCompany’sConstitutionandbeingeligible,hasofferedhimselfforre-election.
(Ordinary resolution 5)
6. Tore-appointGrantThorntonMalaysiaPLTasAuditorsoftheCompanyuntiltheconclusionofthenextAnnualGeneralMeetingandtoauthorisetheDirectorstofixtheirremuneration.
(Ordinary resolution 6)
SpecialBusiness Toconsiderandifthoughtfit,withorwithoutanymodification,topassthefollowingasOrdinaryResolutions:-
7. ORDINARY RESOLUTION NO. 1- AUTHORITYTO ISSUESHARESPURSUANTTOTHECOMPANIESACT
2016
“THATsubjectalwaystotheCompaniesAct2016,theConstitutionoftheCompanyandtheapprovals fromBursaMalaysiaSecuritiesBerhad(“Bursa Malaysia Securities”) andanyotherrelevantgovernmentaland/orregulatoryauthorities,theDirectorsoftheCompany be and are hereby authorised and empowered pursuant to the Companies Act2016,toissueandallotsharesintheCompanyfromtimetotimeatsuchpriceanduponsuch termsandconditions, forsuchpurposesand tosuchpersonorpersonswhomsoevertheDirectorsmayintheirabsolutediscretion,deemfit,providedthattheaggregatenumberofsharesissuedpursuanttothisResolutiondoesnotexceedtwentypercent(20%)ofthetotalnumberofissuedsharesoftheCompany(excludingtreasuryshares)forthetimebeingtobeutiliseduntil31December2021asempoweredbyBursaMalaysiaSecuritiespursuanttoBursaMalaysiaBerhad’sletterdated16April2020togrant additional temporary relief measures to listed issuers and thereafter ten percent
(Ordinary resolution 7)
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(10%)ofthetotalnumberofissuedsharesoftheCompany(excludingtreasuryshares)forthetimebeingasstipulatedunderParagraph6.03(1)oftheBursaMalaysiaSecurities’MainMarketListingRequirements;
AND THATtheDirectorsoftheCompany,whethersolelyorjointly,beandareherebyempowered to obtain the approval for the listing of and quotation for the additional shares soissuedontheMainMarketofBursaMalaysiaSecurities;AND be hereby authorised todoall suchactsand things includingexecutingall relevantdocumentsashe/theymayconsiderexpedientornecessarytocompleteandgivefulleffecttotheabovesaidmandate;
AND FURTHER THAT such authority shall commence immediately upon the passing of thisResolutionandcontinuetobeinforceuntiltheconclusionofthenextAnnualGeneralMeetingoftheCompany.”
8. ORDINARY RESOLUTION NO. 2- PROPOSEDSHAREHOLDERS’RATIFICATIONFORRECURRENTRELATED
PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
“THAT,subjectalwaystotheCompaniesAct2016(“the Act”),theConstitutionoftheCompanyandtheBursaMalaysiaSecuritiesBerhad’sMainMarketListingRequirements,alltherecurrentrelatedpartytransactionsofarevenueortradingnature,enteredortobeenteredintobytheCompany’ssubsidiary,T7KilgourSdn.Bhd.(“T7 Kilgour”),from1September2020,untilthedateoftheCompany’sSeventeenthAnnualGeneralMeeting,withtherelatedpartiesassetoutintheCircular/StatementtoShareholdersdated30April2021inrelationtoProposedShareholders’RatificationforRecurrentRelatedPartyTransactionsofaRevenueorTradingNaturewhichweretransactionscarriedoutinthenormalcourseofbusinessbasedonnormalcommercialtermsconsistentwithT7Kilgour’susualbusinesspracticesandpolicies,beandareherebyapprovedandratified.
AND THATallactionstakenandtheexecutionofallnecessarydocumentsbytheDirectorsoftheCompanyastheyhadconsideredexpedientordeemedfitinthebestinterestsoftheCompanyinconnectionwithsuchtransactions,beandareherebyapprovedandratified.”
(Ordinary resolution 8)
9. ORDINARYRESOLUTIONNO.3- PROPOSEDRENEWALOFEXISTINGSHAREHOLDERS’MANDATEFOR
RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
“THAT,subjectalwaystotheCompaniesAct2016(“the Act”),theConstitutionoftheCompanyandtheBursaMalaysiaSecuritiesBerhad’sMainMarketListingRequirements,approval be and is hereby given to the Company and its subsidiaries to enter into all transactionsinvolvingtheinterestsofDirectors,majorshareholdersorpersonsconnectedwithDirectorsand/ormajorshareholdersoftheGroup(“Related Parties”) as described in theCircular/StatementtoShareholdersdated30April2021(“Recurrent RPTs”) provided thatsuchtransactionsare:-
(i) recurrenttransactionsofarevenueortradingnature;(ii) necessaryfortheday-to-dayoperations;(iii) carried out in the ordinary course of business and on normal commercial terms
which are not more favourable to the Related Parties than those generally available tothepublic;and
(iv) arenottothedetrimentoftheminorityshareholders,
(“RRPT Mandate”).
(Ordinary resolution 9)
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AND THATsuchapprovalshallcontinuetobeinforceuntil:-
(a) theconclusionofthenextAnnualGeneralMeetingoftheCompany,atwhichtimeitwilllapse,unlessbyaresolutionpassedatthatmeeting,theauthorityisrenewed;or
(b) theexpirationoftheperiodwithinwhichthenextAnnualGeneralMeetingoftheCompanyisrequiredtobeheldpursuanttoSection340oftheAct(butshallnotextendtosuchextensionasmaybeallowedpursuanttoSection340(4)oftheAct);or
(c) revokedorvariedbyaresolutionpassedbyshareholdersinageneralmeeting;or
whicheverisearlier;andtheaggregatevalueoftheRecurrentRPTsbedisclosedintheannualreportoftheCompany.
AND THATtheDirectorsoftheCompanybeandareherebyauthorisedtocompleteanddoallsuchactsandthingsastheymayconsiderexpedientornecessarytogivefulleffecttotheRRPTMandate.”
10. ORDINARYRESOLUTIONNO.4- PROPOSEDNEWSHAREHOLDERS’MANDATEFORNEWRECURRENT
RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
“THAT,subjectalwaystotheCompaniesAct2016(“the Act”),theConstitutionoftheCompanyandtheBursaMalaysiaSecuritiesBerhad’sMainMarketListingRequirements,approval be and is hereby given to the Company and its subsidiaries to enter into all transactionsinvolvingtheinterestsofDirectors,majorshareholdersorpersonsconnectedwithDirectorsand/ormajorshareholdersoftheGroup(“Related Parties”) as described in theCircular/StatementtoShareholdersdated30April2021(“Recurrent RPTs”) provided thatsuchtransactionsare:-
(i) recurrenttransactionsofarevenueortradingnature;(ii) necessaryfortheday-to-dayoperations;(iii) carried out in the ordinary course of business and on normal commercial terms
which are not more favourable to the Related Parties than those generally available tothepublic;and
(iv) arenottothedetrimentoftheminorityshareholders,
(“RRPT Mandate”).
AND THATsuchapprovalshallcontinuetobeinforceuntil:-
(a) theconclusionofthenextAnnualGeneralMeetingoftheCompany,atwhichtimeitwilllapse,unlessbyaresolutionpassedatthatmeeting,theauthorityisrenewed;or
(b) theexpirationoftheperiodwithinwhichthenextAnnualGeneralMeetingoftheCompanyisrequiredtobeheldpursuanttoSection340oftheAct(butshallnotextendtosuchextensionasmaybeallowedpursuanttoSection340(4)oftheAct);or
(c) revokedorvariedbyaresolutionpassedbyshareholdersinageneralmeeting;or
whicheverisearlier;andtheaggregatevalueoftheRecurrentRPTsbedisclosedintheannualreportoftheCompany.
AND THATtheDirectorsoftheCompanybeandareherebyauthorisedtocompleteanddoallsuchactsandthingsastheymayconsiderexpedientornecessarytogivefulleffecttotheRRPTMandate.”
(Ordinary resolution 10)
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11. ORDINARY RESOLUTION NO. 5- PROPOSEDRENEWALOFAUTHORITYFORTHECOMPANYTOPURCHASE
ITS OWN SHARES (“PROPOSED RENEWALOF SHARE BUY-BACKAUTHORITY)
“THAT,subjectalwaystotheCompaniesAct2016(“the Act”), theprovisionsof theCompany’sConstitution, theMainMarket ListingRequirements of BursaMalaysiaSecuritiesBerhad(“Bursa Malaysia Securities”)andallotherapplicablelaws,guidelines,rules and regulations, theCompanybe and is hereby authorised to purchase suchnumberofordinarysharesintheCompanyasmaybedeterminedbytheDirectorsoftheCompanyfromtimetotimethroughBursaMalaysiaSecurities,uponsuchtermsandconditionsastheDirectorsintheirdiscretiondeemfitandexpedientinthebestinterestoftheCompany,providedthat:-
(i) the aggregate number of ordinary shares tobepurchasedand/or heldby theCompanyshallnotexceedtenpercent(10%)ofthetotalnumberofissuedsharesoftheCompanyasatthepointofpurchase(s);and
(Ordinary resolution 11)
(ii) themaximumfundstobeallocatedbytheCompanyforthepurposeofpurchasingitsownsharesshallnotexceedtheaggregateoftheretainedprofitsoftheCompanybasedonthe latestauditedfinancialstatementsand/orthe latestmanagementaccountsoftheCompany(whereapplicable)availableatthetimeofthepurchase(s);and
ThatuponcompletionofthepurchasebytheCompanyofitsownshares,theDirectorsof the Company be authorised to deal with the shares so purchased in their absolute discretioninthefollowingmanner:-
(i) cancelallthesharessopurchased;and/or(ii) retain the shares so purchased in treasury for distribution as dividend to the
shareholdersand/orresellonthemarketofBursaMalaysiaSecurities;and/or(iii) retainpartthereofastreasurysharesandcanceltheremainder;and/or
inanyothermannerasprescribedbytheAct,rules,regulationsandordersmadepursuantto theActand the requirementsofBursaMalaysiaSecuritiesandanyother relevantauthorityforthetimebeinginforce.
THAT such authority conferred by this Resolution shall commence immediately upon the passingofthisResolutionandshallcontinuetobeinforceuntil:-
(a) the conclusion of the next AnnualGeneralMeeting (“AGM”) of the Company followingthisAGMatwhichsuchresolutionwaspassed,atwhichtimetheauthoritywilllapse,unlessbyanordinaryresolutionpassedatthatmeeting,theauthorityisrenewed,eitherunconditionallyorsubjecttoconditions;or
(b) theexpirationoftheperiodwithinwhichthenextAGMoftheCompanyafterthatdateisrequiredbylawtobeheld;or
(c) revoked or varied by an ordinary resolution passed by the shareholders of the Companyinageneralmeeting,
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whicheveroccursfirst.
AND FURTHER THATtheDirectorsoftheCompanybeauthorisedtodoallacts,deedsandthingsandtotakeallsuchstepsastheymaydeemfit,appropriate,expedientornecessary in the best interest of the Company to give full effect to the Proposed Renewal ofShareBuy-BackAuthoritywithfullpowerstoassenttoanycondition,modification,variationand/oramendmentasmayberequiredorimposedbytherelevantauthoritiesandtotakeallsuchsteps,anddoallsuchactsandthingsastheymaydeemfitandexpedientintheinterestoftheCompany.”
12. Totransactanyotherordinarybusinessofwhichduenoticeshallhavebeengiven.
ByOrderoftheBoard
CHUASIEWCHUAN(SSMPCNO.201908002648)(MAICSA0777689)TANLOOEE(SSMPCNO.201908002686)(MAICSA7063694)
CompanySecretaries
KualaLumpurDated:30April2021
ExplanatoryNotes:-
1. Item1oftheAgenda-AuditedFinancialStatementsforthefinancialyearended31December2020
ThisAgendaitemismeantfordiscussiononly,astheprovisionofSection340(1)(a)oftheCompaniesAct2016doesnotrequireaformalapprovaloftheshareholdersfortheAuditedFinancialStatements.Hence,thisAgendaitemisnotputforwardforvoting.
2. Items2and3oftheAgenda-Directors’FeesandBenefits
Section230(1)oftheCompaniesAct2016providesamongstothers,thatthefeesoftheDirectors,andanybenefitspayabletotheDirectorsofalistedcompanyanditssubsidiariesshallbeapprovedatthegeneralmeeting.
TheproposedOrdinaryResolution1, ifapproved,willauthorisethepaymentofDirectors’feestotheNon-ExecutiveDirectors(“NEDs”)oftheCompanyfortheperiodfrom29June2021totheEighteenthAnnualGeneralMeeting(“AGM”) oftheCompanyinyear2022andtobepayableonamonthlybasisinarrearsaftereachmonthofcompletedserviceoftheDirectors.ThisResolutionistofacilitatepaymentofDirectors’feesoncurrentfinancialyearbasis.
TheproposedOrdinaryResolution2,ifapproved,willauthorisethepaymentofDirectors’benefitstotheNEDsbytheCompany.ThebenefitspayabletotheNEDfortheperiodfrom29June2021totheEighteenthAGMoftheCompanyinyear2022arederivedfromtheestimatedmeetingallowancebasedonthenumberofscheduledmeetingsandunscheduledmeetings(whennecessary)fortheBoardandBoardCommittees,andnumberofNEDsinvolvedinthemeetings.
IntheeventthattheDirectors’feesandbenefitspayableproposedareinsufficientduetoenlargedBoardsize,approvalwillbesoughtatthenextAGMforadditionalDirectors’feesandbenefitstomeettheshortfall.
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ExplanatoryNotes(cont’d):-
3. Item7oftheAgenda-AuthoritytoIssueSharesPursuanttotheCompaniesAct2016
TheproposedOrdinaryResolution7isintendedtorenewtheauthoritygrantedtotheDirectorsoftheCompanyattheSixteenthAnnualGeneralMeetingoftheCompanyheldon26August2020(“Previous Mandate”) to issue and allot shares at any time to such persons in their absolute discretion without convening a general meeting provided that the aggregatenumberofthesharesissueddoesnotexceed20%ofthetotalnumberofissuedsharesoftheCompanyforthe time being (hereinafter referred to as the “20%GeneralMandate”).
Aspart of the initiative fromBursaMalaysiaSecuritiesBerhad (“Bursa Malaysia Securities”) to aid and facilitate listed issuers insustaining theirbusinessoreasing theircompliancewithBursaMalaysiaSecurities’ rules,amid theunprecedenteduncertaintysurroundingtherecoveryoftheCOVID-19outbreakandMovementControlOrderimposedbytheGovernment,BursaMalaysiaSecuritieshadvideBursaMalaysiaBerhad’sletterdated16April2020allowalistedissuertoseekahighergeneralmandateunderParagraph6.03oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesofnotmorethan20%ofthetotalnumberofissuedshares(excludingtreasuryshares)forthegeneralissueofnewsecurities.
The20%GeneralMandatewillprovideflexibilitytotheCompanytoraiseadditionalfundsexpeditiouslyandefficientlyduringthischallengingtime,tomeetitsfundingrequirementsincludingbutnotlimitedtoworkingcapital,operationalexpenditures,investmentproject(s),and/oracquisition(s).
TheBoard,havingconsideredthecurrentandprospectivefinancialposition,needsandcapacityoftheGroup,isoftheopinionthatthe20%GeneralMandateisinthebestinterestsoftheCompanyanditsshareholders.
ThePreviousMandategrantedbytheshareholdersattheSixteenthAnnualGeneralMeetingoftheCompanyhadnotbeenutilisedandhencenoproceedwasraisedtherefrom.
4. Item8oftheAgenda–ProposedShareholders’RatificationforRecurrentRelatedPartyTransactionsofaRevenue or Trading Nature
TheproposedOrdinaryResolution8,ifpassed,willratifyallrecurrentrelatedpartytransactionsofarevenueortradingnatureenteredintoortobeenteredintobyT7KilgourSdn.Bhd.(“T7 Kilgour”)withtherelatedpartiesfrom1September2020until thedateof theCompany’sSeventeenthAnnualGeneralMeetingas setout in theCircular/Statement toShareholdersdated30April2021.
PleaserefertotheCircular/StatementtoShareholdersdated30April2021forfurtherinformation.
5. Item9oftheAgenda–ProposedRenewalofExistingShareholders’MandateforRecurrentRelatedPartyTransactionsofaRevenueorTradingNature
TheproposedOrdinaryResolution9,ifpassed,willprovidearenewedmandatefortheCompanyand/oritssubsidiariestoenterintotherecurrentrelatedpartytransactionsofarevenueortradingnaturewhicharenecessaryfortheGroup’sday-to-dayoperations,subjecttothetransactionsbeingintheordinarycourseofbusinessandonnormalcommercialterms which are not more favourable to the related parties than those generally available to the public and are not to thedetrimentoftheminorityshareholdersoftheCompany.ThismandateshalllapseattheconclusionofthenextAGMunlessauthorityfortherenewalisobtainedfromtheshareholdersoftheCompanyatageneralmeeting.
PleaserefertotheCircular/StatementtoShareholdersdated30April2021forfurtherinformation.
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ExplanatoryNotes(cont’d):-
6. Item10oftheAgenda–ProposedNewShareholders’MandateforNewRecurrentRelatedPartyTransactionsofaRevenueorTradingNature
TheproposedOrdinaryResolution10,ifpassed,willprovideanewshareholders’mandatefornewrecurrentrelatedpartytransactions.Thenewshareholders’mandatewillenabletheGrouptoenterintotherecurrentrelatedpartytransactionsofarevenueortradingnaturewhicharenecessaryfortheGroup’sday-to-dayoperations,subjecttothetransactionsbeingin the ordinary course of business and on normal commercial terms which are not more favourable to the related parties thanthosegenerallyavailabletothepublicandarenottothedetrimentoftheminorityshareholdersoftheCompany.ThismandateshalllapseattheconclusionofthenextAGMunlessauthorityfortherenewalisobtainedfromtheshareholdersoftheCompanyatageneralmeeting.
PleaserefertotheCircular/StatementtoShareholdersdated30April2021forfurtherinformation.
7. Item11oftheAgenda-ProposedRenewalofShareBuy-BackAuthority
TheproposedOrdinaryResolution11,ifpassed,willempowertheDirectorsoftheCompanytopurchasetheCompany’sordinarysharesofuptotenpercentum(10%)ofthetotalnumberofissuedsharesoftheCompanybyutilisingthefundsallocatedwhichshallnotexceedtheCompany’sretainedprofitsbasedonthelatestauditedfinancialstatementsand/orthelatestmanagementaccountsoftheCompany(whereapplicable)availableatthetimeofthepurchase(s).
PleaserefertotheCircular/StatementtoShareholdersdated30April2021forfurtherinformation.
Notes:-
1. TheBroadcastVenueisstrictlyforthepurposeofcomplyingwithSection327(2)oftheCompaniesAct2016whichrequiretheChairpersonofthemeetingtobepresentatthemainvenueofthemeeting.
2. Members/proxiesWILL NOT BE ALLOWEDtoattendtheSeventeenthAGMinpersonattheBroadcastVenueonthedayofthemeeting.
3. Membersaretoattend,speak(includingposingquestionstotheBoardviarealtimesubmissionoftypedtexts)andvote(collectively,“participate”)remotelyattheSeventeenthAGMviatheRemoteParticipationandVotingfacilities(“RPV”) providedbyTricorInvestor&IssuingHouseServicesSdn.Bhd.(“Tricor”)viaitsTIIHOnlinewebsiteathttps://tiih.online.PleasefollowtheProceduresforRPVprovidedintheAdministrativeDetailsfortheSeventeenthAGMandreadthenotesbelowinordertoparticipateremotelyviaRPV.
4. Inrespectofdepositedsecurities,onlymemberswhosenamesappearintheRecordofDepositorson21June2021(GeneralMeetingRecordofDepositors)shallbeeligibletoattendtheMeeting.
5. AmemberwhoisentitledtoparticipateandvoteattheMeetingviaRPVisentitledtoappointmorethanone(1)proxytoparticipateandvoteinhisstead.Whereamemberappointsmorethanone(1)proxy,theappointmentsshallbeinvalidunlesshespecifiestheproportionsofhisshareholdingstoberepresentedbyeachproxy.
6. AproxymaybutdoesnotneedtobeamemberoftheCompany.Notwithstandingthis,amemberentitledtoparticipateandvoteattheMeetingisentitledtoappointanypersonashisproxytoparticipateandvoteinsteadofthememberattheMeeting.Thereshallbenorestrictionastothequalificationoftheproxy.AproxyappointedtoparticipateandvoteattheMeetingshallhavethesamerightsasthemembertospeakattheMeeting.
7. Inthecaseofacorporatemember,theinstrumentappointingaproxymustbeeitherunderitscommonsealorunderthehandofanofficerorattorneydulyauthorised.
8. MembersmaysubmitquestionstotheBoardpriortotheSeventeenthAGMviaTricor’sTIIHOnlinewebsiteathttps://tiih.onlinebyselecting“e-Services”tologin,posequestionsandsubmitelectronicallynolaterthanSaturday,26June2021at10.00a.m.ortousethequeryboxtotransmitquestionstotheChairman/BoardviaRPVduringlivestreaming.
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Notes(cont’d):-
9. WhereamemberoftheCompanyisanexemptauthorisednomineewhichholdsordinarysharesintheCompanyformultiplebeneficialownersinonesecuritiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxieswhichtheexemptauthorisednomineemayappointinrespectofeachomnibusaccountitholds.
10. AmemberwhohasappointedaproxyorattorneyorauthorisedrepresentativetoparticipateandvoteattheSeventeenthAGMviaRPVmustrequesthis/herproxyorattorneyorauthorisedrepresentativetoregisterhimself/herselfforRPVatTIIHOnlinewebsiteathttps://tiih.online.PleasefollowtheProceduresforRPVintheAdministrativeDetailsfortheSeventeenthAGM.
11. TheappointmentofaproxymaybemadebyelectronicmeansorinahardcopyforminthefollowingmannerandmustbereceivedbytheCompanynotlessthanforty-eight(48)hoursbeforethetimeappointedforholdingtheSeventeenthAGMoradjournedgeneralmeetingatwhichthepersonnamedintheappointmentproposestovote:
(i) Byelectronicform
TheformofproxycanbeelectronicallylodgedwiththeShareRegistraroftheCompanyviaTIIHOnlinewebsiteathttps://tiih.online(applicabletoindividualmembersonly).KindlyrefertotheAdministrativeDetailsontheproceduresforelectroniclodgementofformofproxyviaTIIHOnline.
(ii) Inhardcopyform
Inthecaseofanappointmentmadeinhardcopyform,theformofproxymustbedepositedwiththeShareRegistraroftheCompanyatTricorInvestor&IssuingHouseServicesSdn.Bhd.,Unit32-01,Level32,TowerA,VerticalBusinessSuite,Avenue3,BangsarSouth,No.8,JalanKerinchi,59200KualaLumpur,WilayahPersekutuanoralternatively,theCustomerServicesCentreatUnitG-3,GroundFloor,VerticalPodium,Avenue3,BangsarSouth,No.8,JalanKerinchi,59200KualaLumpur,WilayahPersekutuan.
12. PleaseensureALLtheparticularsasrequiredintheformofproxyarecompleted,signedanddatedaccordingly.
13. LastdateandtimeforlodgingtheformofproxyisSaturday,26June2021at10:00a.m.
14. Anyauthoritypursuant towhichsuchanappointment ismadebyapowerofattorneymustbedepositedwith theShareRegistraroftheCompanyatTricorInvestor&IssuingHouseServicesSdn.Bhd.,Unit32-01,Level32,TowerA,VerticalBusinessSuite,Avenue3,BangsarSouth,No.8,JalanKerinchi,59200KualaLumpur,WilayahPersekutuanoralternatively,theCustomerServiceCentreatUnitG-3,GroundFloor,VerticalPodium,Avenue3,BangsarSouth,No.8,JalanKerinchi,59200KualaLumpur,WilayahPersekutuannotlessthanforty-eight(48)hoursbeforethetimeappointedforholdingtheSeventeenthAGMoradjournedgeneralmeetingatwhichthepersonnamedintheappointmentproposestovote.Acopyofthepowerofattorneymaybeacceptedprovidedthatitiscertifiednotariallyand/orinaccordancewiththeapplicablelegalrequirementsintherelevantjurisdictioninwhichitisexecuted.
15. Acorporatememberwhohasappointedarepresentative,pleasedeposittheORIGINALcertificateofappointmentwiththeShareRegistraroftheCompanyatTricorInvestor&IssuingHouseServicesSdn.Bhd.,Unit32-01,Level32,TowerA,VerticalBusinessSuite,Avenue3,BangsarSouth,No.8,JalanKerinchi,59200KualaLumpur,WilayahPersekutuanoralternatively,theCustomerServiceCentreatUnitG-3,GroundFloor,VerticalPodium,Avenue3,BangsarSouth,No.8,JalanKerinchi,59200KualaLumpur,WilayahPersekutuan.Thecertificateofappointmentshouldbeexecutedinthefollowing manner:
(i) If thecorporatememberhasacommonseal,thecertificateofappointmentshouldbeexecutedunderseal inaccordancewiththeconstitutionofthecorporatemember.
(ii) Ifthecorporatememberdoesnothaveacommonseal,thecertificateofappointmentshouldbeaffixedwiththerubberstampofthecorporatemember(ifany)andexecutedby:(a) atleasttwo(2)authorisedofficers,ofwhomoneshallbeadirector;or(b) anydirectorand/orauthorisedofficersinaccordancewiththelawsofthecountryunderwhichthecorporate
memberisincorporated.
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aDMinistRatiVe DetaiLs For The aNNUal GeNeral MeeTING
InviewoftheCOVID-19pandemicandaspartofthesafetymeasures,theBoardofDirectorsofT7GlobalBerhad(“T7Global” or the “Company”) (“Board”) has decided that the annual general meeting of the Company (“AGM” or “Meeting”) shall be conducted fully virtual and entirely via remote participation and voting using the Remote Participation and Voting (“RPV”) Facilitiesassetoutbelow:-
Date Time Broadcast Venue
Monday,28June2021 10:00a.m. Level16,KLTrillionCorporateTower,BlockC,338JalanTunRazak,50400KualaLumpur,WilayahPersekutuan
TheBroadcastVenueisstrictlyforthepurposeofcompliancewithSection327(2)oftheCompaniesAct2016wherebytheChairmanwillbepresentatthemainvenueoftheAGMandinaccordancewithClause70oftheCompany’sConstitution.Members/Proxiesfromthepublicwillnotbeallowedtoattend,presentnoradmittedattheBroadcastVenueonthedayoftheAGM,i.e.Monday,28June2021.
REMOTE PARTICIPATION AND VOTING FACILITIES
Membersare toattend,speak (includingposingquestions to theBoardvia real timesubmissionof typed texts)andvote(collectively,“participate”)remotelyattheAGMusingRPVprovidedbyTricorInvestor&IssuingHouseServicesSdn.Bhd.(“Tricor”)viaitsTIIHOnlinewebsiteathttps://tiih.online.
MemberswhoappointproxiestoparticipateviaRPVintheAGMmustensurethatthedulyexecutedformsofproxyaredepositedinahardcopyformorbyelectronicmeanstoTricornolaterthanSaturday,26June2021at10:00a.m.
Amemberwhohasappointedaproxyorrepresentativetoattend,participate,speakandvoteatthisAGMviaRPVmustrequesthis/herproxytoregisterhimself/herselfforRPVatTIIHOnlinewebsiteathttps://tiih.online.
AstheAGMisafullyvirtualAGM,memberswhoareunabletoparticipateinthisAGMmayappointtheChairmanoftheMeetingashis/herproxyandindicatethevotinginstructionsintheformofproxy.
PROCEDURES FOR RPV
Procedures Action
BeforetheAGM
1. Registerasparticipant inT7VirtualAGM
• Usingyourcomputer,accesstowebsiteathttps://tiih.online.Registerasauserunder the“e-Services”select“CreateAccountby IndividualHolder”.Refertothetutorialguidepostedonthehomepageforassistance.
• Registrationasauserwillbeapprovedwithinoneworkingdayandyouwillbenotifiedviaemail.
• IfyouarealreadyauserwithTIIHOnline,youarenotrequiredtoregisteragain.Youwillreceiveane-mailtonotifyyouthattheremoteparticipationisavailableforregistrationatTIIHOnline.
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REMOTE PARTICIPATION AND VOTING FACILITIES (CONT’D)
PROCEDURES FOR RPV (CONT’D)
Procedures Action
BeforetheAGM(cont’d)
2. Submityourrequest • RegistrationfortheAGMisopenfromFriday,30April2021untilthedayoftheAGMonMonday,28June2021.Shareholder(s)orproxy(ies)orcorporaterepresentative(s)orattorney(s)arerequiredtopre-registertheirattendancefortheAGMtoascertaintheireligibilitytoparticipatetheAGMusingtheRPV.
• Loginwith your user ID and password and select the corporate event:“(REGISTRATION)T7GLOBALBERHAD17THAGM”.
• ReadandagreetotheTerms&ConditionsandconfirmtheDeclaration.• Select“RegisterforRemoteParticipationandVoting”.• Reviewyourregistrationandproceedtoregister.• Systemwill send an e-mail to notify that your registration for remote
participationisreceivedandwillbeverified.• AfterverificationofyourregistrationagainsttheRecordofDepositorsasat21
June2021,thesystemwillsendyouane-mailafter26June2021toapproveorrejectyourregistrationforremoteparticipation.
(Note:PleaseensuretoallowsufficienttimerequiredfortheapprovalasanewuserofTIIHOnlineaswellastheregistrationforRPVinorderthatyoucanlogintoTIIHOnlineandparticipatetheAGMremotely).
3. LogintoTIIHOnline LoginwithyouruserIDandpasswordforremoteparticipationattheAGMatanytime from9:30a.m. i.e.30minutesbefore thecommencementof theAGMonMonday,28June2021at10:00a.m.
4. Participatethrough LiveStreaming
• Selectthecorporateevent:“(LIVESTREAMMEETING)T7GLOBALBERHAD17THAGM”toengageintheproceedingsoftheAGMremotely.
• IfyouhaveanyquestionfortheChairman/Board,youmayusethequeryboxtotransmityourquestion.TheChairman/BoardwillendeavortorespondtoquestionssubmittedbyremoteparticipantsduringtheAGM.Ifthereistimeconstraint,theresponseswillbee-mailedtoyouattheearliestpossible,afterthemeeting.
5. OnlineRemoteVoting • Votingsessioncommencesfrom10:00a.m.on28June2021untilatimewhen the Chairman announces the completion of the voting session of the AGM.
• Selectthecorporateevent:“(REMOTEVOTING)T7GLOBAL17THAGM”orifyouareonthelivestreammeetingpage,youcanselect“GO TO REMOTE VOTING PAGE”buttonbelowtheQueryBox.
• ReadandagreetotheTerms&ConditionsandconfirmtheDeclaration.• SelecttheCDSaccountthatrepresentsyourshareholdings.• Indicateyourvotesfortheresolutionsthataretabledforvoting.• Confirmandsubmityourvotes.
6. Endofremoteparticipation • UpontheannouncementbytheChairmanontheclosureoftheAGM,thelivesessionwillend.
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REMOTE PARTICIPATION AND VOTING FACILITIES (CONT’D)
PROCEDURES FOR RPV (CONT’D) Note to users of the rpV:
1. Should your application to join the AGM be approved, we will make available to you the rights to join the live streamed Meeting and to vote remotely. Your login to TIIH Online on the day of Meeting will indicate your presence at the virtual Meeting.
2. The quality of your connection to the live broadcast is dependent on the bandwidth and stability of the internet at your location and the device you use.
3. In the event you encounter any issues with logging-in, connection to the live streamed Meeting or online voting, kindly call Tricor Help Line at 011-4080 5616 / 011-4080 3168 / 011-4080 3169 / 011-4080 3170 for assistance or e-mail to tiih.online@my.tricorglobal.com for assistance.
NO DOOR GIFT/FOOD VOUCHER
TherewillbenodistributionofdoorgiftsorfoodvouchersfortheAGMsincethemeetingisbeingconductedonafullyvirtualbasis.
Wewouldliketothankourmembersforyourkindco-operationandunderstandinginthesechallengingtimes.
RECORD OF DEPOSITORS
ThedateofRecordofDepositorsfortheAGMis21June2021.Assuch,onlymemberswhosenameappearsintheRecordofDepositorsofT7asat21June2021shallbeentitledtoattendtheAGMandtoparticipate,speakandvotethereat.
PROxY
• TheAGMwillbeconductedviavirtualmeeting,ifyouareunabletoattendthemeetingviaRPVonMonday,28June2021,youmayappointtheChairmanofthemeetingasproxyandindicatethevotinginstructionsintheFormofProxy.
• YoumayalsosubmittheFormofProxyelectronicallyviaTIIHOnlinewebsiteathttps://tiih.onlinenolaterthanSaturday,26June2021at10:00a.m.PleasedoreadandfollowtheprocedurestosubmitFormofProxyelectronicallybelow.
• YoumaysubmityourFormofProxytotheShareRegistrar,TricorInvestor&IssuingHouseServicesSdn.Bhd.(“Tricor”)byfaxat03-27839222ore-mailtois.enquiry@my.tricorglobal.com.However,pleaseensurethattheOriginalFormofProxyisdepositedatTricor’sofficeatUnit32-01,Level32,TowerA,VerticalBusinessSuite,Avenue3,BangsarSouth,No.8,JalanKerinchi,59200KualaLumpur,WilayahPersekutuanoralternatively,theCustomerServiceCentreatUnitG-3,GroundFloor,VerticalPodium,Avenue3,BangsarSouth,No.8,JalanKerinchi,59200KualaLumpur,WilayahPersekutuannot lessthanforty-eight (48)hoursbeforethetimeappointedforholdingtheAGMoranyadjournmentthereof,otherwisetheFormofProxyshallnotbetreatedasvalid.
POLL VOTING
• TheVotingat theAGMwillbeconductedbypoll inaccordancewithParagraph8.29AofBursaMalaysiaSecuritiesBerhad’sMainMarketListingRequirements.TheCompanyhasappointedTricorasPollAdministratortoconductthepollbywayofelectronicvotingandScrutineerSolutionsSdnBhdasScrutineerstoverifythepollresults.
• ShareholderscanproceedtovoteontheresolutionsatanytimefromthecommencementoftheAGMat10:00a.m.butbeforetheendofthevotingsessionwhichwillbeannouncedbytheChairmanoftheMeeting.Kindlyrefertoitem(s)oftheaboveproceduresforRPVforguidanceonhowtovoteremotelyfromTIIHOnlinewebsiteathttps://tiih.online.
• UponcompletionofthevotingsessionfortheAGM,theScrutineerswillverifyandannouncethepollresultsfollowedbytheChairman’sdeclarationwhethertheresolutionsaredulypassed.
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ELECTRONIC LODGEMENT OF PROxY FORM
TheprocedurestolodgeyourproxyformelectronicallyviaTricor’sTIIHOnlinewebsitearesummarisedbelow:
Procedure Action
i. StepsforIndividualShareholders
Register as a UserwithTIIHOnline
• Usingyourcomputer,pleaseaccessthewebsiteathttps://tiih.online.Registerasauserunderthe“e-Services”.Pleaserefertothetutorialguidepostedonthehomepageforassistance.
• IfyouarealreadyauserwithTIIHOnline,youarenotrequiredtoregisteragain.
Proceed with submissionofformofproxy
• AfterthereleaseoftheNoticeofMeetingbytheCompany,loginwithyourusername(i.e.emailaddress)andpassword.
• Selectthecorporateevent:T7 GLOBAL BERHAD 17THAGM- “SubmissionofProxyForm”.• ReadandagreetotheTermsandConditionsandconfirmtheDeclaration.• InsertyourCDSaccountnumberandindicatethenumberofsharesforyour
proxy(s)tovoteonyourbehalf.• Indicateyourvotinginstructions–FORorAGAINST,otherwiseyourproxy
willdecideonyourvotes.• Reviewandconfirmyourproxy(s)appointment.• Printtheformofproxyforyourrecord.
ii. Stepsforcorporationorinstitutionalshareholders
Register as a UserwithTIIHOnline
• AccessTIIHOnlineathttps://tiih.online • Under e-Services, the authorised or nominated representative of the
corporation or institutional shareholder selects “Create Account byRepresentativeofCorporateHolder”.
• Completetheregistrationformanduploadtherequireddocuments.• Registrationwillbeverified,andyouwillbenotifiedbyemailwithinone(1)to
two(2)workingdays.• Proceedtoactivateyouraccountwiththetemporarypasswordgiveninthe
emailandre-setyourownpassword.
Note:Therepresentativeofacorporationorinstitutionalshareholdermustregisterasauserfirst inaccordancewiththeabovestepsbeforehe/shecansubscribetothiscorporateholderelectronicproxysubmission.PleasecontactourShareRegistrarifyouneedclarificationsontheuserregistration.
Proceed with submissionofformofproxy
• LogintoTIIHOnlineathttps://tiih.online• Select thecorporate exercisename: “T7GLOBALBERHAD17THAGM:
SubmissionofProxyForm”• AgreetotheTerms&ConditionsandDeclaration.• Proceed to download the file format for “Submission of Proxy Form” in
accordancewiththeGuidanceNotesettherein.• Preparethefilefortheappointmentofproxiesbyinsertingtherequireddata.• Submittheproxyappointmentfile.• LogintoTIIHOnline,selectcorporateexercisename:“T7GLOBALBERHAD
17THAGM:SubmissionofProxyForm”.• Proceedtouploadthedulycompletedproxyappointmentfile.• Select“Submit”tocompleteyoursubmission.• Printtheconfirmationreportofyoursubmissionforyourrecord.
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RECORDING OR PHOTOGRAPHY
StrictlyNOunauthorisedrecordingorphotographyoftheproceedingsoftheAGMisallowed.
ENQUIRY
Ifyouhaveanyenquiriesontheabove,pleasecontactthefollowingpersonsduringofficehoursonMondaystoFridaysfrom9.00a.m.to5.30p.m.(exceptonpublicholidays):
TricorInvestor&IssuingHouseServicesSdn.Bhd.
GeneralLine : +603-27839299
FaxNumber : +603-27839222
Email : is.enquiry@my.tricorglobal.com
Contact persons : No. Name Contact No./Email
1. Mr.MohdKamalBinMohdDin
DID:+60327839237Email:kamal.mohd@my.tricorglobal.com
2. Ms.EstherLoo DID:+60327839293Email:Esther.Loo@my.tricorglobal.com
3. Mr.MuhammadAshraffBinMohdKhaizan
DID:+60327839276Email:Muhammad.Ashraff@my.tricorglobal.com
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anaLYsis oF ShareholdINGSas at 2 aPRiL 2021
SHARE CAPITAL
Totalnumberofissuesshares(inclusiveoftreasuryshares) :633,854,856ClassofShares :OrdinaryShareVotingrights :OnevoteperordinaryshareTreasurySharesheldasat2April2021 :17,348,800
DISTRIBUTION OF SHAREHOLDINGS
No.of %of No.of %ofSizeofShareholdings Shareholders Shareholders Shares Shareholdings
1to99 154 2.823 4,017 0.000100to1,000 635 11.640 366,104 0.0591,001to10,000 2,573 47.167 15,048,410 2.44010,001to100,000 1,749 32.062 60,003,367 9.732100,001to30,825,301(*) 343 6.287 467,786,908 75.87730,825,302andabove(**) 1 0.018 73,297,250 11.889
Total 5,455 100.000 616,506,056 100.000
Remark: *-Lessthan5%ofissuedshares **-5%andaboveofissuedshares
Totalissuedsharesasat2April2021 :633,854,856Treasurysharesasat2April2021 :17,348,800‘Adjusted’capitalafternettingtreasurysharesasat2April2021 :616,506,056
THIRTY LARGEST SHAREHOLDERS
No. Name No.ofShares%ofIssued
ShareCapital
1 MAYBANKNOMINEES(TEMPATAN)SDNBHDPLEDGEDSECURITIESACCOUNTFORTANSRIDATUKSERITANKEANSOON,J.P.
73,297,250 11.889
2 MAYBANKNOMINEES(TEMPATAN)SDNBHDPLEDGEDSECURITIESACCOUNTFORPUANSRISHIRLEYLAWSIONGHIONG
30,063,400 4.876
3 NUSANUSANTARASDNBHD 28,903,000 4.688
4 ZVSRESOURCESSDNBHD 25,208,300 4.088
5 ANUGERAHBAKTISDNBHD 24,321,200 3.945
6 ABYSSINARESOURCES(M)SDNBHD 21,770,600 3.531
7 RHBNOMINEES(TEMPATAN)SDNBHDPLEDGEDSECURITIESACCOUNTFORYEEWEIMENG
17,750,000 2.879
8 MEGAXUSRESOURCESSDNBHD 16,525,011 2.680
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THIRTY LARGEST SHAREHOLDERS (CONT’D)
No. Name No.ofShares%ofIssued
ShareCapital
9 RHBNOMINEES(TEMPATAN)SDNBHDPLEDGEDSECURITIESACCOUNTFORTANSRIDATO’SRIKOHKINLIP,J.P.
15,244,524 2.472
10 MAYBANKSECURITIESNOMINEES(TEMPATAN)SDNBHDPLEDGEDSECURITIESACCOUNTFORTANKAYZHUIN
13,508,000 2.191
11 MAYBANKSECURITIESNOMINEES(TEMPATAN)SDNBHDPLEDGEDSECURITIESACCOUNTFORTANKAYSHEN
11,952,700 1.938
12 MAYBANKSECURITIESNOMINEES(TEMPATAN)SDNBHDPLEDGEDSECURITIESACCOUNTFORTANKAYVIN
11,471,300 1.860
13 ONEIFCRESIDENCESDNBHD 11,100,000 1.800
14 CGS-CIMBNOMINEES(TEMPATAN)SDNBHDPLEDGEDSECURITIESACCOUNTFORTANKIMHEUNG(MY1989)
10,000,000 1.622
15 CIMSECNOMINEES(TEMPATAN)SDNBHDCIMBFORKOONPOHTAT(PB)
10,000,000 1.622
16 LIMSOONGUAN 8,900,000 1.443
17 YEEWEIMENG 7,750,000 1.257
18 MAYBANKNOMINEES(TEMPATAN)SDNBHDPLEDGEDSECURITIESACCOUNTFORLAWLEEHONG
7,604,100 1.233
19 KVCVALVE(M)SDNBHD 5,545,000 0.899
20 AEASYINTELLIGENCE(M)SDNBHD 5,000,000 0.811
21 KONGTIAMMING 5,000,000 0.811
22 PTSOFFSHORE&MARINESDNBHD 5,000,000 0.811
23 MAYBANKNOMINEES(TEMPATAN)SDNBHDPLEDGEDSECURITIESACCOUNTFORMARINEENERGYSDNBHD
4,862,900 0.788
24 SOHSWEESEE 4,730,000 0.767
25 ALLIANCEGROUPNOMINEES(TEMPATAN)SDNBHDPLEDGEDSECURITIESACCOUNTFORLAICHENGKUAN(8058893)
4,250,000 0.689
26 CIMSECNOMINEES(TEMPATAN)SDNBHDCIMBFORLAIMINGCHUN@LAIPOHLIN(PB)
4,000,000 0.648
27 TANOMINEES(TEMPATAN)SDNBHDPLEDGEDSECURITIESACCOUNTLIMHAUYANG
3,534,659 0.573
28 TANOMINEES(TEMPATAN)SDNBHDPLEDGEDSECURITIESACCOUNTFORYEEWEIMENG
3,498,700 0.567
29 FTGRESOURCESSDNBHD 3,298,700 0.535
30 NGBOOKEAN@NGBEHKIAN 3,283,900 0.532
anaLYsis oF sHaReHoLDings
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SUMMARY
TOTALNO.OFHOLDERS : 30
TOTALHOLDINGS : 397,373,244
TOTALPERCENTAGE(%) : 64.455
TOTALISSUEDSHARESASAT2APRIL2021 : 633,854,856
TREASURYSHARESASAT2APRIL2021 : 17,348,800
‘ADJUSTED’CAPITALAFTERNETTINGTREASURYSHARESASAT2APRIL2021 616,506,056
remark:-
The analysis of shareholdings is based on the total number of issued shares of the Company as at 2 April 2021 after deducting 17,348,800 ordinary shares bought back by the Company and held as Treasury Shares at 2 April 2021.
SUBSTANTIALSHAREHOLDERSASAT2APRIL2021(asperRegisterofSubstantialShareholders)
ThelistofsubstantialshareholdersofT7GlobalBerhadanditsshareholdingsbasedontheRegisterofSubstantialShareholdersoftheCompanyareasfollows:-
No.ofOrdinarySharesheldNo. Name Direct % Indirect %
1. TanSriDatukSeriTanKeanSoon,J.P. 73,297,250 11.89 *58,358,100 9.472. PuanSriShirleyLawSiongHiong 32,363,400 5.25 – –3. YeeWeiMeng 31,998,700 5.19 – –
remark:-
* Deemed interested by virtue of his spouse and sons’ shareholdings in the Company pursuant to Section 59(11)(c) of the Companies Act 2016.
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DIRECTORS’SHAREHOLDINGSASAT2APRIL2021(asperRegisterofDirectors’Shareholdings)
TherespectiveshareholdingsoftheDirectorsofT7GlobalBerhadbasedontheRegisterofDirectors’Shareholdingsareasfollows:-
No.ofOrdinarySharesheldNo. Name Direct % Indirect %
1. TanSriDatukSeriTanKeanSoon,J.P. 73,297,250 11.89 58,358,100 (a) 9.472. TanKayVin 13,770,300 2.23 – –3. DatukSeriDr.NikNorzrulThani BinNikHassanThani 1,000,000 0.16 21,770,600(b) 3.534. TanSamEng – – – –5. TanSriDato’SriKohKinLip,J.P. 17,244,524 2.80 – –6. AdmiralTanSriDato’SeriPanglima AhmadKamazulzamanBin HjAhmadBadaruddin(R) 1,305,500 0.21 – –7. CP(R)Dato’SriWanAhmad NajmuddinBinMohd 2,772,000 0.45 – –
remarks:-
(a) Deemed interest by virtue of his spouse and sons’ shareholdings in the Company pursuant to Section 59(11)(c) of the Companies Act 2016.
(b) Deemed interest by virtue of his interest in Abyssina Resources (M) Sdn. Bhd. pursuant to Section 8 of the Companies Act 2016.
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List oF ProPerTIeS
Title Identification/Postal Address
DescriptionandExisting Use/Ownersip
DateofAcquisition/
DateofRevaluation
ApproximateAgeofBuilding/Tenure/
DateofExpireofLease
Land Area/(Built-UpArea)
sq.ft.
Net Book Valueas at
31stDecember2020(RM)
GRN38601LotNo.25929MukimofSetapak,DistrictandStateofWilayahPersekutuan/No.8-3,JalanPuncakSetiawangsa4,54200KualaLumpur
3-storeyshopofficesowned by TanjungOffshoreServicesSdnBhd(“TOS”)
20June,2012/
31December,2020
AgeofBuilding:16yearsTenure:Freehold
1,760/(4,634)
400,288.21
GRN38600LotNo.25930MukimofSetapak,DistrictandStateofWilayahPersekutuan/No.10,JalanPuncakSetiawangsa4,54200KualaLumpur
3-storeyshopofficesownedbyTOS
26June,2002
AgeofBuilding:16yearsTenure:Freehold
1,760/(4,634)
488,106.75
GRN38599LotNo.25931MukimofSetapak,DistrictandStateofWilayahPersekutuan/No.12,JalanPuncakSetiawangsa4,54200KualaLumpur
3-storeyshopofficesownedbyTOS
11April,2007/
31December,2020
AgeofBuilding:16yearsTenure:Freehold
1,760/(4,634)
1,100,000.00
GRN38598LotNo.25932MukimofSetapak,DistrictandStateofWilayahPersekutuan/No.14,JalanPuncakSetiawangsa4,54200KualaLumpur
3-storeyshopofficesownedbyTOS
24May,2007
AgeofBuilding:16yearsTenure:Freehold
1,760/(4,634)
867,994.10
Lot5205-A,KawasanPerindustrianBalakongJaya2,43300Balakong,SelangorDarulEhsan,Malaysia
Oneunitofsinglestorey detachedfactoryannexedwith3-storeyoffice/showroomownedbyT7PropertySdnBhd(“T7P”)
8October,2016
AgeofBuilding:3yearsTenure:Freehold
45,940/(32,857)
9,855,044.00
H.S.(D)97483,PT29669,MukimSungaiBuloh,DaerahPetaling,SelangorDarulEhsan
Doublestoreyterrace house atTropicanaGolf&Country ResortownedbyT7P
1June,2018/
31December,2020
Tenure:99yearsLeaseholdExpiring:25/10/2090
1,765/(2,752)
1,300,000.00
Lot29138(Plot8),Seksyen20,48200BandarSerendah,DaerahHuluSelangor,Selangor
LandLotownedbyT7P
3November,2017
Tenure:99yearsLeaseholdExpiring:05/06/2094
87,120 3,077,158.00
Lot29138(Plot8),Seksyen20,48200BandarSerendah,DaerahHuluSelangor,Selangor
Singlestoreyfactoryand double storeyofficeownedbyT7P
1January,2019
Tenure:99yearsLeaseholdExpiring:05/06/2094
25,833 13,760,531.00
194
T7 Global berhad RegistRation no. 200401023809 (662315-U)
Title Identification/Postal Address
DescriptionandExisting Use/Ownersip
DateofAcquisition/
DateofRevaluation
ApproximateAgeofBuilding/Tenure/
DateofExpireofLease
Land Area/(Built-UpArea)
sq.ft.
Net Book Valueas at
31stDecember2020(RM)
C-L7-5,7thFloor,GRN75607,Lot919,Seksyen88A(formerlyknownasH.S.(D)116558,P.T.No.246Seksyen88A),BandarKualaLumpur,DistrictofKualaLumpur,WilayahPersekutuan
AnofficeunitownedbyT7P
21February,2020
AgeofBuilding:9yearsTenure:Freehold
1,184 1,802,065.00
C-L7-6,7thFloor,GRN75607,Lot919,Seksyen88A(formerlyknownasH.S.(D)116558,P.T.No.246Seksyen88A),BandarKualaLumpur,DistrictofKualaLumpur,WilayahPersekutuan
AnofficeunitownedbyT7P
21February,2020
AgeofBuilding:9yearsTenure:Freehold
1,120 1,724,967.00
C-L7-7,7thFloor,GRN75607,Lot919,Seksyen88A(formerlyknownasH.S.(D)116558,P.T.No.246Seksyen88A),BandarKualaLumpur,DistrictofKualaLumpur,WilayahPersekutuan
AnofficeunitownedbyT7P
21February,2020
AgeofBuilding:9yearsTenure:Freehold
1,120 1,724,967.00
C-L7-8,7thFloor,GRN75607,Lot919,Seksyen88A(formerlyknownasH.S.(D)116558,P.T.No.246Seksyen88A),BandarKualaLumpur,DistrictofKualaLumpur,WilayahPersekutuan
AnofficeunitownedbyT7P
21February,2020
AgeofBuilding:9yearsTenure:Freehold
2,583 3,575,962.00
No.H.S.(D)108189,P.T.No.8896(A-15)BandarAmpang,UluLangat,Selangor
3-storeyshopofficeownedbyT7WenmaxSdnBhd
1December,2012/
31December,2020
Tenure:99yearsLeaseholdExpiring:27/06/2104
1,540 1,800,772.18
List oF PRoPeRties
(Cont’D)
✄
*I/We(fullname),
bearing*NRICNo./PassportNo./CompanyNo.
of (full address)
beinga*member/membersofT7GlobalBerhad(“theCompany”) hereby appoint
NRIC/PassportNo. (FULLNAMEINBLOCKCAPITALS)
of (full address)
and, NRIC/PassportNo. (FULLNAMEINBLOCKCAPITALS)
of (full address)
orfailing*him/her,the*ChairmanoftheMeetingas*my/ourproxytovotefor*me/usandon*my/ourbehalfattheSeventeenthAnnualGeneralMeeting(“AGM”)oftheCompanywhichwillbeconductedfullyvirtualattheBroadcastVenueatLevel16,KLTrillionCorporateTower,BlockC,338JalanTunRazak,50400KualaLumpur,WilayahPersekutuanviaremoteparticipationandvotingfacilitiesonMonday,28June2021at10:00a.m.andatanyadjournmentthereof.
Pleaseindicatewithan“X”inthespacesprovidedbelowastohowyouwishyourvotestobecasted.Ifnospecificdirectionastovotingisgiven,theproxywillvoteorabstainfromvotingat*his/herdiscretion.
Ordinary Business For Against
Ordinary Resolution 1 PaymentofDirectors’fees
Ordinary Resolution 2 PaymentofbenefitspayabletotheNon-ExecutiveDirectors
OrdinaryResolution3 Re-electionofMr.TanKayVinasDirector
OrdinaryResolution4 Re-electionofMs.TanSamEngasDirector
Ordinary Resolution 5 Re-electionofTanSriDato’SriKohKinLip,J.P.asDirector
OrdinaryResolution6 Re-appointmentofGrantThorntonMalaysiaPLTasAuditors
SpecialBusiness
Ordinary Resolution 7 Authority to issue shares
OrdinaryResolution8 Proposedshareholders’ratificationforrecurrentrelatedpartytransactionsof a revenue or trading nature
OrdinaryResolution9 Proposedrenewalofexistingshareholders’mandateforrecurrentrelatedparty transactions of a revenue or trading nature
OrdinaryResolution10 Proposed new shareholders’mandate for new recurrent related partytransactions of a revenue or trading nature
Ordinary Resolution 11 Proposed renewal of authority for the Company to purchase its own shares
Signedthis day of ,2021
*Signature(s)/CommonSealofMember(s)
* Strike out whichever not applicable
T7 GLOBAL BERHAD[RegistrationNo.200401023809(662315-U)](IncorporatedinMalaysia)
FoRM oF ProXY
CDS Account No.
Numberofordinarysharesheld
Forappointmentoftwo(2)proxies,percentageofshareholdingstoberepresentedbytheproxies
No.ofshares Percentage
Proxy1
Proxy2
Total 100%
Notes:-1. TheBroadcastVenueisstrictlyforthepurposeofcomplyingwithSection327(2)oftheCompaniesAct2016
whichrequiretheChairpersonofthemeetingtobepresentatthemainvenueofthemeeting.2. Members/proxiesWILL NOT BE ALLOWEDtoattendtheSeventeenthAGMinpersonattheBroadcastVenue
onthedayofthemeeting.3. Membersaretoattend,speak(includingposingquestionstotheBoardviarealtimesubmissionoftypedtexts)
andvote(collectively,“participate”)remotelyattheSeventeenthAGMviatheRemoteParticipationandVotingfacilities (“RPV”)providedbyTricor Investor& IssuingHouseServicesSdn.Bhd. (“Tricor”)via itsTIIHOnlinewebsite at https://tiih.online.PleasefollowtheProceduresforRPVprovidedintheAdministrativeDetailsfortheSeventeenthAGMandreadthenotesbelowinordertoparticipateremotelyviaRPV.
4. Inrespectofdepositedsecurities,onlymemberswhosenamesappearintheRecordofDepositorson21June2021(GeneralMeetingRecordofDepositors)shallbeeligibletoattendtheMeeting.
5. AmemberwhoisentitledtoparticipateandvoteattheMeetingviaRPVisentitledtoappointmorethanone(1)proxytoattendandvoteinhisstead.Whereamemberappointsmorethanone(1)proxy,theappointmentshallbeinvalidunlesshespecifiestheproportionsofhisshareholdingstoberepresentedbyeachproxy.
6. AproxymaybutdoesnotneedtobeamemberoftheCompany.Notwithstandingthis,amemberentitledtoparticipateandvoteattheMeetingisentitledtoappointanypersonashisproxytoparticipateandvoteinsteadofthememberattheMeeting.Thereshallbenorestrictionastothequalificationoftheproxy.AproxyappointedtoparticipateandvoteattheMeetingshallhavethesamerightsasthemembertospeakattheMeeting.
7. Inthecaseofacorporatemember,theinstrumentappointingaproxymustbeeitherunderitscommonsealorunderthehandofanofficerorattorneydulyauthorised.
8. Membersmaysubmitquestions to theBoardprior to theSeventeenthAGMviaTricor’sTIIHOnlinewebsiteat https://tiih.onlinebyselecting“e-Services” to login,posequestionsandsubmitelectronicallyno later thanSaturday,26June2021at10.00a.m.ortousethequeryboxtotransmitquestionstotheChairman/BoardviaRPVduringlivestreaming.
9. WhereamemberoftheCompanyisanexemptauthorisednomineewhichholdsordinarysharesintheCompanyformultiplebeneficialownersinonesecuritiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxieswhichtheexemptauthorisednomineemayappointinrespectofeachomnibusaccountitholds.
10. AmemberwhohasappointedaproxyorattorneyorauthorisedrepresentativetoparticipateandvoteattheSeventeenthAGMviaRPVmustrequesthis/herproxyorattorneyorauthorisedrepresentativetoregisterhimself/herselfforRPVatTIIHOnlinewebsiteathttps://tiih.online.PleasefollowtheProceduresforRPVintheAdministrativeDetailsfortheSeventeenthAGM.
11. TheappointmentofaproxymaybemadebyelectronicmeansorinahardcopyforminthefollowingmannerandmustbereceivedbytheCompanynotlessthanforty-eight(48)hoursbeforethetimeappointedforholdingtheSeventeenthAGMoradjournedgeneralmeetingatwhichthepersonnamedintheappointmentproposestovote:(i) Byelectronicform TheformofproxycanbeelectronicallylodgedwiththeShareRegistraroftheCompanyviaTIIHOnline
website at https://tiih.online(applicabletoindividualmembersonly).KindlyrefertotheAdministrativeDetailsontheproceduresforelectroniclodgementofformofproxyviaTIIHOnline.
(ii) Inhardcopyform Inthecaseofanappointmentmadeinhardcopyform,theformofproxymustbedepositedwiththeShare
RegistraroftheCompanyatTricorInvestor&IssuingHouseServicesSdn.Bhd.,Unit32-01,Level32,TowerA,VerticalBusinessSuite,Avenue3,BangsarSouth,No.8,JalanKerinchi,59200KualaLumpur,WilayahPersekutuanoralternatively, theCustomerServicesCentreatUnitG-3,GroundFloor,VerticalPodium,Avenue3,BangsarSouth,No.8,JalanKerinchi,59200KualaLumpur,WilayahPersekutuan.
12. PleaseensureALLtheparticularsasrequiredintheformofproxyarecompleted,signedanddatedaccordingly.13. LastdateandtimeforlodgingtheformofproxyisSaturday,26June2021at10:00a.m.14. Anyauthoritypursuanttowhichsuchanappointmentismadebyapowerofattorneymustbedepositedwith
theShareRegistraroftheCompanyatTricorInvestor&IssuingHouseServicesSdn.Bhd.,Unit32-01,Level32,TowerA,VerticalBusinessSuite,Avenue3,BangsarSouth,No.8,JalanKerinchi,59200KualaLumpur,WilayahPersekutuanoralternatively,theCustomerServiceCentreatUnitG-3,GroundFloor,VerticalPodium,Avenue3,BangsarSouth,No.8,JalanKerinchi,59200KualaLumpur,WilayahPersekutuannotlessthanforty-eight(48)hoursbeforethetimeappointedforholdingtheSeventeenthAGMoradjournedgeneralmeetingatwhichthepersonnamedintheappointmentproposestovote.Acopyofthepowerofattorneymaybeacceptedprovidedthatitiscertifiednotariallyand/orinaccordancewiththeapplicablelegalrequirementsintherelevantjurisdictioninwhichitisexecuted.
15. Acorporatememberwhohasappointedarepresentative,pleasedeposittheORIGINALcertificateofappointmentwiththeShareRegistraroftheCompanyatTricorInvestor&IssuingHouseServicesSdn.Bhd.,Unit32-01,Level32,TowerA,VerticalBusinessSuite,Avenue3,BangsarSouth,No.8,JalanKerinchi,59200KualaLumpur,WilayahPersekutuanoralternatively,theCustomerServiceCentreatUnitG-3,GroundFloor,VerticalPodium,Avenue3,BangsarSouth,No.8,JalanKerinchi,59200KualaLumpur,WilayahPersekutuan.Thecertificateofappointmentshouldbeexecutedinthefollowingmanner:(i) Ifthecorporatememberhasacommonseal,thecertificateofappointmentshouldbeexecutedunderseal
inaccordancewiththeconstitutionofthecorporatemember.(ii) Ifthecorporatememberdoesnothaveacommonseal,thecertificateofappointmentshouldbeaffixed
withtherubberstampofthecorporatemember(ifany)andexecutedby:(a) atleasttwo(2)authorisedofficers,ofwhomoneshallbeadirector;or(b) anydirectorand/orauthorisedofficersinaccordancewiththelawsofthecountryunderwhichthe
corporatememberisincorporated.
The RegistrarT7 GLOBAL BERHAD[RegistrationNo.200401023809(662315-U)]
Unit32-01,Level32TowerA,VerticalBusinessSuiteAvenue3,BangsarSouthNo.8,JalanKerinchi59200KualaLumpur
AFFIXSTAMP
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2nd Fold Here
T7 Glo
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T7 Global berhad[RegistRation no. 200401023809 (662315-U)]
annual reporT
2020T7 Global berhadRegistRation no. 200401023809 (662315-U)
Making a difference
C-16-01, Level 16, KL Trillion Corporate Tower, Block C338, Jalan Tun Razak, 50400,Kuala Lumpur, Malaysia
Tel : +603 2785 7777Fax : +603 2785 7780Email : t7@t7global.com.myWebsite : www.t7global.com.my