[RegistRation no. 200401023809 (662315-U)]

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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 : [email protected] : 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

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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 : [email protected] 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


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


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

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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”). {

008


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)

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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.

{

010


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.


(CONT’D)

012


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


(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

014


Tan Sri Datuk Seri Tan Kean Soon, J.P.


AGE 57

GENDER Male

POSITION Executive Deputy Chairman

Member of Share Issuance Scheme Committee

Tan Sam Eng


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


AGE 30

GENDER Male

POSITION Executive Director

Admiral Tan Sri Dato’ Seri Panglima Ahmad Kamarulzaman Bin Hj Ahmad Badaruddin (R)


AGE 62

GENDER Male


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.


(CONT’D)

016


CP (R) Dato’ Sri Wan Ahmad Najmuddin Bin Mohd


AGE 63

GENDER Male


Member of Audit and Risk Management Committee

Chairman of Remuneration Committee Member of Nomination Committee

Tan Sri Dato’ Sri Koh Kin Lip, J.P.


AGE 72

GENDER Male


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.


(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


AGE 32

GENDER Male

Ong Fee Peng

POSITION Group Chief Financial Officer


AGE 55

GENDER Male

Azman Yakim

POSITION Chief Executive Officer Tanjung Offshore Services Sdn Bhd (“Tanjung Offshore Services”)


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.

018


KEY SENIOR MANAGEMENT PROFILE

(CONT’D)

Muhamad Azarudin Bin Abdullah

POSITION Director Tanjung Offshore Services


AGE 41

GENDER Male

Noor Haniza Binti Zainuddin

POSITION Senior Manager, Group Quality, Health, Safety and Environment (“QHSE”)


AGE 41

GENDER Female

Datuk Tan Kean Seng

POSITION Director T7 Gastec Sdn Bhd (“T7 Gastec”)


AGE 50

GENDER Male

Michael Aziz Eu Peng Weng

POSITION Director T7 Wenmax Sdn Bhd (“T7 Wenmax”)


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


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”)


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


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◆


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 ◆


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◆


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

022



(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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(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%

024


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


(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.


(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


AdvocateandSolicitorHighCourtofMalaya.RetiredfromRoyalMalaysiaPolice inMarch2019 asCommissionerof Policewith last position held asDirector ofCriminalInvestigationDepartment.

TanSriDato’SriKohKinLip,J.P.


More than30 yearsof property andoil palmplantationindustryexperience.

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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.


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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.


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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


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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.


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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


3 TanSamEng IndependentNon-ExecutiveDirector


SeminarPercukaianKebangsaan2020(LHDN)

4 Tan Kay Vin ExecutiveDirector CorporateLiabilityProvisiononcorruption–MACCAct2009

5 AdmiralTanSriDato’SeriPanglimaAhmadKamarulzamanBinHjAhmadBadaruddin(R)


StakeholderEngagement–“StakeholderPrimacy: IncreasedEmphasisonESG”

Digitalisation - “ReviewCompetitive Strategies using AI: ABoard’sPerspective”

6 CP(R)Dato’SriWanAhmadNajmuddinBinMohd



7 TanSriDato’SriKohKinLip,J.P.


Directors’ContinuingEducationProgramme2020:Module1:DigitallypoweredF&BplayerModule2:Geopoliticalrisklandscape


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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.


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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.


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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)


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


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Remuneration Committee (“RC”) (cont’d)

Group

Directors’Fees (RM)

Salaries (RM)

Allowance(RM)

Benefits-in-kind

(RM)

OthersEmoluments

(RM)Total(RM)


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)


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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.


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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.


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PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS (CONT’D)

RELATIONSHIP WITH SHAREHOLDERS (CONT’D)

AccesstoInformation

Inaddition,shareholdersandinvestorscanhaveachannelofcommunicationwiththeGroupCorporateFinancetodirectanyqueriesandprovidefeedbacktotheGroup.

Email:[email protected]

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.


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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


c) RecurrentRelatedPartyTransactionsofaRevenueorTradingNature(“RRPT”)(cont’d)






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)


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)


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)


CPEnergy(d)

3,376,528

aDDitionaL CoMPLianCe inFoRMation

(Cont’D)

049

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c) RecurrentRelatedPartyTransactionsofaRevenueorTradingNature(“RRPT”)(cont’d)






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)


CPEnergy(d)

21,108,581

T7KemuncakSdnBhd

CPEnergy Providing services (including butnotlimitedtooilandgas),sellingtoandpurchasingfromCPEnergyofindustrialequipment,machineries,spare parts and lubricants oil

TKS(a)

Tan Kay Vin(b)


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.


(Cont’D)

050


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.


(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.

054


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

(Cont’D)

055

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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

(Cont’D)

056


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.

DiReCtoRs’ RePoRt

(Cont’D)

057

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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)

058


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)

059

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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

060


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.

inDePenDent aUDitoRs’ RePoRt

(Cont’D)

062



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.


(Cont’D)

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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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064



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

066



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.

stateMents oF FinanCiaL Position

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stateMents oF PRoFit oR Loss aNd oTher CoMPreheNSIVe INCoMeFoR tHe FinanCiaL YeaR enDeD 31 DeCeMBeR 2020


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)

068



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


stateMents oF PRoFit oR Loss anD otHeR CoMPReHensiVe inCoMe

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sta

teM

en

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F C

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Reva

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Tran

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Total

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Shares

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RM

RM

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0,504

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91

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1,892

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16,71

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8,608

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Tran

sactions

with

own

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Owns

hares

acqu

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–(6

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––

––

(662

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–(6

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Issua

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res

34,22

8,425

–

––

––

–34

,228,4

25

–34

,228,4

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––

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Acqu

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–

––

––

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–1,

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3,514

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––

––

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(40)

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––

––

––

––

100,1

33

100,1

33

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swith

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,228,4

25

(662

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––

––

(2,46

3,793

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,102,3

41

(1,54

6,393

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,555,9

48

Profi

tforthe

finan

cialyea

r–

––

––

–7,

724,9

04

7,72

4,904

4,

782,9

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12,50

7,807

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preh

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elos

s

forth

efina

ncialye

ar–

––

–(9

03,16

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,032)

–(90

4,199

)(1

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(905

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Total

comp

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ncom

e

forth

efina

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ar–

––

–(9

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7,72

4,904

6,

820,7

05

4,78

1,665

11

,602,3

70

Balan

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31Dec

embe

r201

915

4,732

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(6,98

8,335

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,474,5

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6,966

(9

41)

(3,82

0,041

)17

9,815

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19,95

2,102

19

9,767

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070


Attr

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Equit

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RM

RM

RM

RM

RM

RM

RM

RM

RM

RM

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own

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Owns

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acqu

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–(2

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––

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–(2

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–(2

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13,01

8,594

–

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–13

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(19,7

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Totaltran

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,018,5

94

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–(4

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7,91

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212,0

49

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(829

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comp

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forth

efina

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212,0

49

(1,03

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98

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249,5

09

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31Dec

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016

7,751

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(9,69

9,396

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91

212,0

49

(621

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7)4,

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67

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55,62

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sta

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(Co

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071

AR2020

www.t7global.com.my

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188

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154

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218

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13,01

8,59

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13,01

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13,01

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10,30

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20

167

,751

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(9

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171

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072



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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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

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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


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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



(Cont’D)

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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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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.

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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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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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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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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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2.5.2 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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3.1.3 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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3.1.7 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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3.2 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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3.3 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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3.4 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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3.5 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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3.6 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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3.7 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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3.8 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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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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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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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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3.8.2 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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3.8.3OffsettingofFinancialInstruments

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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3.12 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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3.16 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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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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3.16.7 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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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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3.19 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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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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3.25 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.

108


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

109

AR2020

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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

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



(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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(Cont’D)

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

112



(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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(Cont’D)

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.

114



(Cont’D)

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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(Cont’D)

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.

116



(Cont’D)

8. SUBSIDIARIES(CONT’D)

Investmentinsubsidiaries (cont’d)

Investmentinsubsidiariesthatareimpaired

Investment insubsidiariesare impairedat reportingdatewhen thenetassetof thesubsidiary is lower thancostofinvestment.Thereconciliationoftheallowanceaccountisasfollows:-


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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(Cont’D)



DetailsoftheCompany’ssubsidiariesareasfollows(cont’d):-



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.

118



(Cont’D)



DetailsoftheCompany’ssubsidiariesareasfollows(cont’d):-



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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(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

120



(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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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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(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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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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(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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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 –

126



(Cont’D)


Amountduefrom/(to)subsidiaries


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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(Cont’D)

9. ASSOCIATE

Investment in associate

Group 2020 2019 RM RM Unquotedshares,atcost – 35,000Shareofattributablepostacquisitionlossesaftertax – 8,730

– 43,730Less:Accumulatedimpairmentlosses – (43,730)

– –

Investmentinassociatethatareimpaired

Investmentinassociateisimpairedatreportingdatewhenthenetassetoftheassociateislowerthancostofinvestment.Thereconciliationoftheallowanceaccountisasfollows:-


Broughtforward 43,730 43,730Investmentwrittenoffagainstimpairment (43,730) –

Carriedforward – 43,730

DetailsoftheGroup’sassociateareasfollows:-



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.

128



(Cont’D)

10. OTHERINVESTMENTS


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


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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(Cont’D)

11. OTHER RECEIVABLES (CONT’D) Includedinotherreceivablesisasfollow:-


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:-


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

130



(Cont’D)

11. OTHER RECEIVABLES (CONT’D)

11.1 Thecarryingamountofnon-currentofnon-tradereceivableisasfollows:-


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:-


Lossonnon-trade receivable carried at amortisedcost/Carried forward 267,711 – – –

12. CASHANDBANKBALANCES,DEPOSITSANDPLACEMENTS


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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(Cont’D)

12. CASHANDBANKBALANCES,DEPOSITSANDPLACEMENTS(CONT’D)


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

132


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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(Cont’D)

13. DEFERREDTAXASSETS/(LIABILITIES)(CONT’D)

(b) Deferredtaxassetshavenotbeenrecognisedinrespectoftheseitemsasitisnotprobablethatfuturetaxableprofitswillbeavailableagainstwhichthesubsidiariescanutilisethebenefitstherefrom.


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:-


YA2025 11,688,908 11,748,908YA2026 5,599,281 5,599,281YA2027 11,403,694 –

28,691,883 17,348,189

14. INVENTORIES


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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(Cont’D)

15. TRADE RECEIVABLES


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:-


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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(Cont’D)

16. CONTRACTASSETS/(LIABILITIES)


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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(Cont’D)

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


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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(Cont’D)

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.

138



(Cont’D)

21. BORROWINGS


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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(Cont’D)

22. GOVERNMENT GRANTS


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


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

140



(Cont’D)

23. OTHERPAYABLES(CONT’D)

Includedinotherpayablesareasfollow:-


Amountduetonon-controllinginterest 35,653,003 –Amountduetoacompanyconnectedtonon-controllinginterest 241,768 99,090

Theamountduetonon-controllinginterestandacompanyconnectedtonon-controllinginterestarenon-traderelated,unsecured,bearnointerestandrepayableincashondemand.

23.1 Thecarryingamountofnon-currentofnon-tradepayableisasfollows:-


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:-


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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(Cont’D)

24. TRADEPAYABLES


Tradepayables 30,629,269 21,095,658Retentionsumoncontract 755,363 2,065,421

31,384,632 23,161,079

ThenormaltradecredittermsgrantedtotheGrouprangefrom30to90days(2019:30to90days).

Includedintradepayablesisasfollows:-


Amountduetonon-controllinginterest 34,226 58,172AmountduefromcompaniesinwhichcertainDirectorshaveinterest 1,096,222 –

25. REVENUE

25.1 DisaggregatedRevenueInformation


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

142



(Cont’D)

25. REVENUE (CONT’D)

25.2 GeographicalMarket

TheGroup’sandtheCompany’srevenueinformationbasedongeographicallocationareasfollows:-


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


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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(Cont’D)

27. FINANCE COSTS


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:-


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 – –

144



(Cont’D)

28. PROFIT/(LOSS)BEFORETAX(CONT’D)

Profit/(Loss)beforetaxhasbeendeterminedaftercharging/(crediting),amongstother,thefollowingitems(cont’d):-


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)


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:-


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)

146



(Cont’D)

29. TAX(INCOME)/EXPENSE(CONT’D)

Taxrecognisedinothercomprehensiveincome


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


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


Weightedaveragenumberofordinarysharesafterdeducting treasurysharesusedforthecomputationofbasic 971,880,903 460,822,976

Basicearningsperordinaryshares 0.81 1.68

(b) Diluted

TherearenodilutedearningspersharebecausetheCompanydoesnothaveanyconvertiblefinancialinstrumentsasattheendoftheyear.

32. EMPLOYEEBENEFITSEXPENSES


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

148



(Cont’D)

32. EMPLOYEEBENEFITSEXPENSES(CONT’D)

IncludedintheemployeebenefitexpensesistheDirectors’remunerationasbelow:-


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.

150



(Cont’D)

34. RELATEDPARTYDISCLOSURES

TheGroupandtheCompanyhasrelatedpartyrelationshipwithitssignificantinvestors,subsidiaries,Directorsandkeymanagementpersonnel.

34.1 TransactionswithRelatedParties:-


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):-


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.


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

152



(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


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

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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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(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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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:-


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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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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(Cont’D)


36.2 Netgainsandlossesarisingfromfinancialinstruments


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:-


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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36.3 Financialriskmanagement(cont’d)

36.3.1 Creditrisk(cont’d)

Exposuretocreditrisk (cont’d)

MaximumexposureoftheGroupandoftheCompanytocreditriskisrepresentedbythecarryingamountoffinancialassetsrecognisedatreportingdateassummarisedbelow(cont’d):-


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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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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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:-


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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(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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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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(Cont’D)



36.3.2 Liquidityrisk(cont’d)

Analysisoffinancialinstrumentsbyremainingcontractualmaturities (cont’d)

ThefollowingfinancialliabilitiesoftheGroupandtheCompanyaresubjectedtoliquidityrisk(cont’d):-


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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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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(Cont’D)







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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36.3.3 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.

170



(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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(Cont’D)



36.3.4 Interestraterisk

InterestrateriskiscausedbychangesinmarketinterestrateresultinginfluctuationinfairvalueorfuturecashflowoffinancialinstrumentsoftheGroupandoftheCompany.TheGroup’sandtheCompany’sinterestratemanagementobjectiveistomanageinterestexpensesconsistentwithmaintaininganacceptablelevelofexposuretointerestratefluctuation.

TheGroup’sborrowingisatfixedinterestrates.TheexposuretointerestratesfortheGroup’sshort-termplacementisconsideredimmaterial.

ThecarryingamountoftheGroup’sandtheCompany’sfinancialinstrumentsthatareexposedtointerestrateriskareasfollows:-


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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(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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(Cont’D)

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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(Cont’D)

38. CAPITALMANAGEMENT

TheprimaryobjectiveofthemanagementoftheGroup’sandoftheCompany’scapitalstructureistooptimisethebalancebetweendebtsandequitytoachievealowcostofcapitalandmaximisethereturntostakeholders.

ThecapitalstructureoftheGroupandoftheCompanyconsistsofdebts(comprisingleaseliabilities)andequity(comprisingissuedordinaryshares,accumulatedlossesandotherreserves).TheGroupandtheCompanymonitortheircapitalusingagearingratio,basedontotalborrowingsdividedbytotalcapital.TheDirectorsreviewthecapitalstructureonaquarterlybasis,andconsiderthecostofcapitalandtherisksassociatedwitheachclassofcapital.Duringthecurrentfinancialyear,nosignificantchangesweremadeintheobjectives,policiesorprocessesformanagingcapital.

Thegearingratioattheendofthereportingperiodwasasfollows:-


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.


4. Tore-electthefollowingDirectorswhoareretiringinaccordancewithClause123oftheCompany’sConstitutionandbeingeligible,haveofferedthemselvesforre-election:-

(i) Mr.TanKayVin;and

(ii) Ms.TanSamEng.



5. Tore-electTanSriDato’SriKohKinLip,J.P.,aDirectorwhoisretiringinaccordancewithClause106oftheCompany’sConstitutionandbeingeligible,hasofferedhimselfforre-election.


6. Tore-appointGrantThorntonMalaysiaPLTasAuditorsoftheCompanyuntiltheconclusionofthenextAnnualGeneralMeetingandtoauthorisetheDirectorstofixtheirremuneration.


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


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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.”


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”).


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178


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.”



(Cont’D)

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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


(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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180


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.



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182


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.


7. Item11oftheAgenda-ProposedRenewalofShareBuy-BackAuthority

TheproposedOrdinaryResolution11,ifpassed,willempowertheDirectorsoftheCompanytopurchasetheCompany’sordinarysharesofuptotenpercentum(10%)ofthetotalnumberofissuedsharesoftheCompanybyutilisingthefundsallocatedwhichshallnotexceedtheCompany’sretainedprofitsbasedonthelatestauditedfinancialstatementsand/orthelatestmanagementaccountsoftheCompany(whereapplicable)availableatthetimeofthepurchase(s).


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.

aDMinistRatiVe DetaiLs FoR tHe annUaL geneRaL Meeting

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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 [email protected] 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 : [email protected]

Contact persons : No. Name Contact No./Email

1. Mr.MohdKamalBinMohdDin

DID:+60327839237Email:[email protected]

2. Ms.EstherLoo DID:+60327839293Email:[email protected]

3. Mr.MuhammadAshraffBinMohdKhaizan

DID:+60327839276Email:[email protected]


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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


1,760/(4,634)

488,106.75



11April,2007/

31December,2020


1,760/(4,634)

1,100,000.00



24May,2007


1,760/(4,634)

867,994.10

Lot5205-A,KawasanPerindustrianBalakongJaya2,43300Balakong,SelangorDarulEhsan,Malaysia

Oneunitofsinglestorey detachedfactoryannexedwith3-storeyoffice/showroomownedbyT7PropertySdnBhd(“T7P”)

8October,2016


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


87,120 3,077,158.00

Lot29138(Plot8),Seksyen20,48200BandarSerendah,DaerahHuluSelangor,Selangor

Singlestoreyfactoryand double storeyofficeownedbyT7P

1January,2019


25,833 13,760,531.00

194


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


1,184 1,802,065.00



21February,2020


1,120 1,724,967.00



21February,2020


1,120 1,724,967.00



21February,2020


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


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

1st Fold Here

2nd Fold Here

T7 Glo

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T 2020

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 : [email protected] : www.t7global.com.my

[RegistRation no. 200401023809 (662315-U)]

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Transcript of [RegistRation no. 200401023809 (662315-U)]