AR2020

2020 Annual Report
Corporate
Profile
Our Ahmad Zaki Resources Berhad (“AZRB”), headquartered in Kuala
Lumpur, is a leading Engineering & Construction group listed
Vision on the Main Market of Bursa Malaysia. The Group has grown
tremendously since its formation in 1982, into a trusted and
To Be A Trusted INDUSTRY LEADER reputable leader in the industry.
in Delivering COMMITMENT with
EXCELLENCE and VALUE In 2020, AZRB through its wholly-owned subsidiary Ahmad Zaki Sdn Bhd
(“AZSB”) was awarded the 5-Star SHASSIC Achievement Award by the
Construction Industry Development Board (“CIDB”) for Bukit Bintang City
Centre and Universiti Teknologi Petronas projects. AZRB won the 4-Star CIDB
Our Score Award, whilst AZSB won the same award with a 5-Star achievement
from CIDB in 2019. The same year, AZRB received the MSWG Merit Award
Mission for Most Improved Corporate Governance Disclosure, as well as the Best
Company for Investor Relations and Best Investor Relations Website under the
micro-cap category from Malaysian Investor Relations Association. In 2018,
• Smart partnership with AZRB won the Best Under Billion Awards for Best Sustainability Reporting
customers, employees and from Focus Malaysia. In 2017, the Group’s Engineering & Construction
stakeholders Division was named Builder of the Year at the 2017 Malaysian Construction
• Institutionalise the virtues of Industry Excellence Awards. It also scooped 2 additional awards of the
honesty and trust MCIEA, namely the Best Project Award and Green Construction Award for its
• Setting and maintaining high work on the Menara Kerja Raya, Kuala Lumpur. It was awarded the coveted
standards; striving for superior “Builder of the Year” three times (in 2000, 2006, and 2017), and a winner
performance in all undertakings of various construction project categories.
• Pro-active through continuous
research and development in Other notable projects completed by the E&C division include the Universiti
meeting challenges Teknologi Petronas, Mass Railway Transit, and IIUM Medical Centre in
Kuantan, Pahang. Current ongoing projects include the MRT Putrajaya Line
Viaduct Package V202 and East Klang Valley Expressway.
Apart from Engineering & Construction, AZRB Group is also involved in Oil &
Gas, Property, Concession and Plantation.
Table
of Contents
OVERVIEW PERFORMANCE DRIVEN
04 Corporate Information 56 Chairman’s Statement
05 Corporate Structure 61 Management Discussion and
Analysis
06 5-Year Financial Highlights
07 Calendar of Events
SUSTAINABILITY REPORT
10 Awards and Recognitions
72 Sustainability Statement
CORPORATE GOVERNANCE FINANCIAL STATEMENTS

14 Directors’ Profile
110 Financial Report
24 Profiles of Senior
Management ADDITIONAL INFORMATION
28 Statement on Risk 258 Directors’ Interests in Shares For more information, visit our website.
Management and Internal and Warrants
Control
260 Analysis of Shareholdings
34 Corporate Governance
Overview Statement 263 Analysis of Warrantholdings
46 Statement of Directors’ 265 List of Properties
Responsibilities in Preparing
the Financial Statements
267 Notice of 23rd Annual General
Meeting
www.azrb.com
47 Audit and Risk Committee • Form of Proxy
Report
51 Additional Compliance
Information
Ahmad Zaki Resources Berhad OVERVIEW CORPORATE PERFORMANCE
02 2020 Annual Report
GOVERNANCE DRIVEN
SUSTAINABILITY FINANCIAL ADDITIONAL Ahmad Zaki Resources Berhad
03
REPORT STATEMENTS INFORMATION 2020 Annual Report
OVERVIEW
Corporate Information
Corporate Structure
5-Year Financial Highlights
Calendar of Events
Awards and Recognitions
GOVERNANCE DRIVEN
Corporate Information
Board of Directors
1. Raja Tan Sri Dato’ Seri Aman bin Raja Haji Ahmad 6. Dato’ Haji Mustaffa bin Mohamad
Independent Non-Executive Chairman Executive Director (resigned on 16 October 2020)
2. Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda 7. Tan Sri Dato’ Lau Yin Pin @ Lau Yen Beng
Executive Vice Chairman Independent Non-Executive Director
3. Dato’ Sri Wan Zakariah bin Haji Wan Muda 8. Datuk (Prof.) A Rahman @ Omar bin Abdullah
Group Managing Director Independent Non-Executive Director
4. Dato’ W Zulkifli bin Haji W Muda 9. Dato’ Sr. Abdull Manaf bin Hj Hashim
Deputy Group Managing Director (1) Independent Non-Executive Director
5. Dato’ Roslan bin Tan Sri Jaffar 10. Datuk Wira Azhar bin Abdul Hamid
Deputy Group Managing Director (2) Independent Non-Executive Director
(appointed on 20 October 2020)
Audit and Risk Committee Registered Office • CIMB Bank Berhad

• Hong Leong Islamic Bank Berhad
1. Raja Tan Sri Dato’ Seri Aman Menara AZRB • Malayan Banking Berhad
bin Raja Haji Ahmad No. 71, Persiaran Gurney • UOB Bank Berhad
(Chairman) 54000 Kuala Lumpur
Tel : 03-2698 7171 Auditors
2. Tan Sri Dato’ Lau Yin Pin
Fax : 03-2694 8181
@ Lau Yen Beng Deloitte PLT
(Member)
Registrar Level 16, Menara LGB
3. Datuk (Prof.) A Rahman 1, Jalan Wan Kadir
Mega Corporate Services Sdn Bhd Taman Tun Dr Ismail
@ Omar bin Abdullah
Level 15-2, Bangunan Faber Imperial 60000 Kuala Lumpur
(Member)
Court
Jalan Sultan Ismail Stock Exchange
Company Secretaries 50250 Kuala Lumpur
1. Dato’ Haji Bahari bin Johari Tel : 03-2692 4271 Main Market of Bursa Malaysia
(LS 0008773/ Fax : 03-2732 5388 Securities Berhad
SSM PC No. 201908002206) Stock Name : AZRB
Principal Bankers Stock Code : 7078
2. Seuhailey binti Shamsudin
@ Azraain • AmBank (M) Berhad Website
(MAICSA 7046575/ • Alliance Bank Malaysia Berhad
SSM PC No. 202008001650) • Affin Bank Berhad www.azrb.com
• AmBank Islamic Berhad
3. Wong Maw Chuan • Bangkok Bank Berhad
(MIA 7413/ • Bank Kerjasama Rakyat Malaysia
SSM PC No. 202008003554) Berhad
• Bank Pembangunan Malaysia
Berhad
05
Corporate Structure
ENGINEERING AND CONSTRUCTION PROPERTY
1. AHMAD ZAKI SDN BHD 100% 1. AZ LAND & PROPERTIES SDN BHD 100%
2. PENINSULAR PRECAST SDN BHD 100% 2. PENISULAR PROKONSULT
100%
3. AZSB MACHINERIES SDN BHD 100% SDN BHD
4. TADOK GRANITE MANUFACTURING 3. RESIDENCE INN & MOTELS

100% 100%
SDN BHD SDN BHD
5. UNGGUL ENERGY & CONSTRUCTION 4. TREND VISTA DEVELOPMENT

100% 100%
SDN BHD SDN BHD
6. AZRB INTERNATIONAL VENTURES 5. TEMALA DEVELOPMENT SDN BHD 70%

100%
SDN BHD 6. KEMAMAN TECHNOLOGY &
60%
7. AHMAD ZAKI SAUDI ARABIA CO LTD 100% INDUSTRIAL PARK SDN BHD
8. FASATIMUR SDN BHD 50% 7. TB REALTY SDN BHD 53%
9. SALCON MMCB AZSB JV SDN BHD 30% 8. BETANAZ PROPERTIES SDN BHD 51%
9. PALMACORP SDN BHD 50%
OIL & GAS

CONCESSION
1. INTER-CENTURY SDN BHD 100%
2. MATRIX RESERVOIR SDN BHD 53% 1. EKVE SDN BHD 100%
3. TB SUPPLY BASE SDN BHD 53% 2. PENINSULAR MEDICAL SDN BHD 100%
4. ASTRAL FAR EAST SDN BHD 53% 3. SAMBUNGAN LEBUHRAYA TIMUR

60%
SDN BHD
5. TB TERMINALS SDN BHD 53%
INVESTMENT HOLDING
PLANTATION
1. AZRB CAPITAL SDN BHD 100%
1. PT ICHTIAR GUSTI PUDI 95%
2. BETANAZ MILLS SDN BHD 67%
3. PEAK CROPS SDN BHD 40%
GOVERNANCE DRIVEN
5-Year Financial Highlights
Group Five-Year Summary 2015 2016 2017 2018 2020

(Restated)
Revenue (RM‘000) 714,972 1,201,273 960,620 1,228,590 1,462,761
Profit/(Loss) before taxation (RM‘000) 32,082 50,462 61,916 24,817 (75,790)
Profit/(Loss) attributable to owners of the (RM‘000) 22,877 27,209 29,423 14,232 (98,321)
Company
Paid-up Capital (RM‘000) 120,885 120,885 197,478 197,536 197,536
Shareholders’ Funds (RM‘000) 338,785 364,916 445,698 461,481 355,098
Net tangible assets per share (sen) 69 64 75 69 51
REVENUE SHAREHOLDERS’
FUNDS
1,462.8 Mil
355.1 Mil
1,462,761
1,201,273
1,228,590
355,098
338,785
364,916
445,698
461,481
714,972
960,620
‘15 ‘16 ‘17 ‘18 ‘20 ‘15 ‘16 ‘17 ‘18 ‘20
PROFIT/(LOSS) NET TANGIBLE

BEFORE TAX ASSETS
PER SHARE
(75.8) Mil 51 Sen
32,082
50,462
61,916
24,817
(75,790)
51
69
64
75
69
‘15 ‘16 ‘17 ‘18 ‘20 ‘15 ‘16 ‘17 ‘18 ‘20
07
Calendar of Events
Sesi Pertemuan Bersama Majlis Berbuka Puasa AZRB 2019

Penduduk Di Hulu Langat
16 May 2019
(Pakej 1 & 2)
Dewan Perdana Felda, Kuala Lumpur
23 February 2019
Pejabat Tapak Utama EKVE,
Selangor
22nd Annual General Meeting Majlis Sambutan Aidilfitri AZRB Majlis Tahlil dan Doa Selamat
2019 AZRB 2019
21 June 2019
23 June 2019 18 July 2019
TPC Kuala Lumpur
Sime Darby Convention Centre, Menara AZRB, Kuala Lumpur
Kuala Lumpur
GOVERNANCE DRIVEN
Calendar of Events
Best Student Awards 2019 Investor Townhall

17 September 2019 23 September 2019
Menara AZRB, Kuala Lumpur Doubletree by Hilton Kuala Lumpur
Sumbangan Lembu untuk KSR White Water Rafting Piala Dato’ Sri Wan Zakariah
Program Qurban 2019 Futsal Tournament
5 & 13 October 2019
11 August 2019 24 November 2019
Slim River, Perak
Perumahan Awam Seri Perlis 2, KSL Sport Centre, Kuala Lumpur
Kuala Lumpur
09
Calendar of Events
Agile Corporate Governance In KSR Bowling Tournament AZRB JUMP

Industrial Revolution (IR) 4.0
2 February 2020 8 March 2020
3 December 2019
Ampang Superbowl, Berjaya Times Jumpstreet Asia, Petaling Jaya
Menara AZRB, Kuala Lumpur Square, Kuala Lumpur
Sumbangan CSR Serta Bertemu Wira-Wirawati Negara Sempena Musim COVID-19

29 March 2020
Hospital Ampang dan Klinik Kesihatan Ampang, Kuala Lumpur
GOVERNANCE DRIVEN
Awards And Recognitions
5-Star SHASSIC 5-Star SHASSIC Merit Award Best Company for IR Best IR Website
Achiever Award for Achiever Award for - Most Improved CG (micro-cap (micro-cap
BBCC project UTP project Disclosure 2018 company category) company category)
No. Name of Award Name of Awarding Body Year Recipient of the Award
1 5-Star SHASSIC Achiever Award for BBCC CIDB Malaysia 2020 Ahmad Zaki Sdn Bhd
project
2 5-Star SHASSIC Achiever Award for UTP CIDB Malaysia 2020 Ahmad Zaki Sdn Bhd
project
3 Best Company for IR (micro-cap company Malaysian Investor 2019 Ahmad Zaki Resources Berhad
category) Relations Association
(MIRA)
4 Best IR Website (micro-cap company Malaysian Investor 2019 Ahmad Zaki Resources Berhad
category) Relations Association
(MIRA)
5 Merit Award - Most Improved CG Minority Shareholders 2019 Ahmad Zaki Resources Berhad
Disclosure 2018 Watch Group (MSWG)
6 5-Star Award - SCORE Certificate of CIDB Malaysia & SME 2018 Ahmad Zaki Sdn Bhd
Achievement Corp Malaysia
7 4-Star Award - SCORE Certificate of CIDB Malaysia & SME 2018 Ahmad Zaki Resources Berhad
Achievement Corp Malaysia
8 GOLD Safety Award 2018 - East Klang Kementerian Kerja Raya 2018 EKVE Sdn Bhd
Valley Expressway 5.5 Million Man-Hours & Lembaga Lebuh Raya
Without Lost Time Injury (LTI)
11
Awards And Recognitions
No. Name of Award Name of Awarding Body Year Recipient of the Award
9 5-Star Award - Sistem Penilaian CIDB Malaysia 2018 EKVE Sdn Bhd
Keselamatan dan Kesihatan Dalam
Pembinaan (SHASSIC)
10 Best Under Billion Awards 2018 - Best Focus Malaysia 2018 Ahmad Zaki Resources Berhad
Sustainability Reporting (RM150 Million to
RM499 Million Market Cap Category)
11 The Malaysian Construction Industry CIDB Malaysia 2017 Ahmad Zaki Sdn Bhd
Excellence Awards 2017: Builder of the
Year Award
Excellence Awards 2017: Green
Construction Award
Excellence Awards 2017: The Best Project
Award (Building Project - Major Category)
14 Green Building Index Platinum Rating Green Building Index Sdn 2016 Ahmad Zaki Sdn Bhd
Certification: Main Contractor Bhd
15 PAM Award Commendation: Commercial Pertubuhan Arkitek 2015 Ahmad Zaki Sdn Bhd
High-Rise (for Menara Kerja Raya) Malaysia
16 PAM Award Gold: Commercial High-Rise Pertubuhan Arkitek 2013 Ahmad Zaki Sdn Bhd
Office for Menara AZRB Malaysia
17 The Malaysian Construction Industry CIDB Malaysia 2013 Ahmad Zaki Resources Berhad
Excellence Awards 2013: The Best
Project Award (Building Project – Medium
Category for Menara AZRB)
Excellence Awards 2011: Special Mention
Award (Environment) – Environmental
Best Practices Award
19 The Malaysian Construction Industry CIDB Malaysia 2011 Dato’ Sri Wan Zakariah bin
Excellence Awards 2011: CEO of The Year Haji Wan Muda / Ahmad Zaki
Resources Berhad
20 Bumiputera Entrepreneur Award Gagasan Badan Ekonomi 2010 Tan Sri Dato’ Sri Haji Wan Zaki
2010: Construction Cluster Award Melayu (GABEM) Haji Wan Muda/ Ahmad Zaki
(Infrastructure) Resources Berhad
Year Award
Year Award
GOVERNANCE DRIVEN
13
CORPORATE
GOVERNANCE
Directors’ Profile
Profiles of Senior Management
Statement on Risk Management and Internal Control
Corporate Governance Overview Statement
Statement of Directors’ Responsibilities in Preparing
the Financial Statements
Audit and Risk Committee Report
Additional Compliance Information
GOVERNANCE DRIVEN
RAJA TAN SRI DATO’ SERI AMAN

BIN RAJA HAJI AHMAD
PSM, SPMP, DPMP
Chairman
Independent Non-Executive Director
Age : 74
Gender : Male
Nationality : Malaysian
Raja Tan Sri Dato’ Seri Aman was appointed as the Raja Tan Sri Dato’ Seri Aman is Chairman of the
Chairman and Independent Non-Executive Director and Investment Panel of Lembaga Tabung Angkatan Tentera
member of Audit and Risk Committee on 26 February and Affin Hwang Asset Management Berhad and sits
2004. Subsequently, he assumed the Chairmanship of on the Board of Tomei Consolidated Berhad and Affin
the Audit and Risk Committee on 8 April 2004. He also Hwang Investment Bank Berhad.
sits on the Remuneration and Nomination Committees
as an ordinary member. During the financial period ended 30 June 2020, he
attended 10 out of 11 Board meetings held.
Raja Tan Sri Dato’ Seri Aman is a graduate of University
Malaya. He is a Fellow of the Institute of Chartered
Accountants in England and Wales and also a member
of Malaysian Institute of Accountants and Malaysian
Institute of Certified Public Accountants. He held
various positions in Maybank Group from 1974 to 1985
prior to joining Affin Bank Berhad (formerly known
as Perwira Habib Bank Malaysia Berhad) in 1985 as
Executive Director/CEO. He left Affin Bank Berhad in
1992 to join Perbadanan Usahawan Nasional Berhad as
Chief Executive Officer. He was re-appointed as Chief
Executive Officer of Affin Bank Berhad in 1995 and
retired in 2003.
15
TAN SRI DATO’ SRI HAJI WAN ZAKI

BIN HAJI WAN MUDA
PSM, SSAP, SIMP, DPMT, PPN, PJK
Executive Vice Chairman

Non-Independent Executive Director
Age : 71
Gender : Male
Tan Sri Dato’ Sri Haji Wan Zaki was appointed as the Tan Sri Dato’ Sri Haji Wan Zaki had served as the
Executive Vice Chairman of the Company on 24 March Chairman of Chuan Huat Resources Berhad from 2002
1999. Subsequently, he held the post of Executive until 2013. He sits on the board of directors of several
Chairman from 1 March 2000 and was redesignated as private limited companies and has no directorship in
Executive Vice Chairman of the Company on 26 February other public companies and listed issuers.
2004. He is presently the Chairman of the Remuneration
Committee. During the financial period ended 30 June 2020, he
Tan Sri Dato’ Sri Haji Wan Zaki is the founder of Ahmad
Zaki Sdn Bhd (“AZSB”). Prior to venturing into business,
he served in various positions in state-owned companies
in Pahang and Terengganu of which his last position was
the Managing Director of Pesama Timber Corporation
Sdn Bhd (“Pesama”), a Terengganu state-owned
company. He left Pesama in 1984 to focus on expanding
the engineering and construction business of AZSB.
GOVERNANCE DRIVEN
DATO’ SRI WAN ZAKARIAH

BIN HAJI WAN MUDA
SSAP, DSAP, DSSA
Group Managing Director

Age : 60
Gender : Male
Dato’ Sri Wan Zakariah joined the Board of the Company as Dato’ Sri Wan Zakariah also sits on the board of directors
an Executive Director on 24 March 1999 and subsequently of several private limited companies and has no
was appointed to the post of Group Managing Director directorship in other public companies and listed issuers.
on 1 January 2003. He is presently the Chairman of the
Employees’ Share Scheme Committee and a member of During the financial period ended 30 June 2020, he
the Remuneration Committee. attended 10 out of 11 Board meetings held.
Dato’ Sri Wan Zakariah obtained a Bachelor of Science

degree in Quantity Surveying from the Thames
Polytechnic, United Kingdom (now known as University of
Greenwich) in 1986. He started his career in the same year
as Quantity Surveyor with the construction subsidiary,
AZSB moving through various posts in the Company until
he was promoted to be the Managing Director of AZSB in
1996.
17
DATO’ W ZULKIFLI
BIN HAJI W MUDA
DSAP, DIMP
Deputy Group Managing Director (1)

Age : 58
Gender : Male
Dato’ W Zulkifli was appointed as a Non-Executive Dato’ W Zulkifli does not hold directorship in any other
Director on 2 January 1999. He was redesignated as an public companies and listed issuers but sits on the board
Executive Director with effect from 1 March 2003 and of directors of several private limited companies.
subsequently appointed as Deputy Group Managing
Director (1) with effect from 1 December 2017. He sits on During the financial period ended 30 June 2020, he
the Employees’ Share Scheme Committee as an ordinary attended 11 out of 11 Board meetings held.
member.
Dato’ W Zulkifli holds a Bachelor of Science (Civil

Engineering) degree, which he obtained in 1985 from the
University of Southern Illinois, United States of America.
He began his career with AZSB as a Project Engineer in
1985. He was promoted to the position of Project Manager
and later as the Executive Director (Operations) of AZSB
in 1996 and subsequently became the Managing Director
of AZSB effective from 7 February 2003.
GOVERNANCE DRIVEN
DATO’ ROSLAN
BIN TAN SRI JAFFAR
DIMP, AMP
Deputy Group Managing Director (2)

Age : 44
Gender : Male
Dato’ Roslan was appointed as an Executive Director of Currently, he sits on the Board of Governors of an
the Company on 8 January 2015 and subsequently as international school and the Board of Trustees of a Royal
Deputy Group Managing Director (2) with effect from 1 foundation.
December 2017. He sits on the Employees’ Share Scheme
Committee as an ordinary member. Dato’ Roslan does not hold directorship in any other
public companies and listed issuers but sits on the board
Dato’ Roslan holds a Bachelor in Mechanical Engineering of directors of several private limited companies.
degree from Imperial College London, United Kingdom
and is a Fellow of the Association of Chartered Certified During the financial period ended 30 June 2020, he
Accountants (“ACCA”), United Kingdom. attended 11 out of 11 Board meetings held.
Dato’ Roslan joined the Company in 2010 as Chief

Operating Officer and was appointed as an Executive
Director of AZSB in the same year. Prior to joining the
Company, he was with PricewaterhouseCoopers where
he worked in both the Assurance and Advisory divisions
in the Kuala Lumpur and Washington DC offices.
19
TAN SRI DATO’ LAU YIN PIN

@ LAU YEN BENG
PSM, DPMT, ASM, JP
Age : 71
Gender : Male
Tan Sri Dato’ Lau was appointed as an Independent Non- Tan Sri Dato’ Lau had served as a Non-Independent
Executive Director of the Company on 15 November 2010. Non-Executive Director and Chairman of the Board of
He was appointed as a member of the Audit and Risk Directors of Nanyang Press Holdings Berhad and Star
Committee and Nomination Committee on 1 March 2011 Publications (Malaysia) Berhad, and as an Independent
and 24 March 2016, respectively. Non-Executive Director of Media Chinese International
Limited, a company listed in Malaysia and Hong Kong. He
Tan Sri Dato’ Lau obtained his Diploma in Commerce with also served on the Board of Directors of Tenaga Nasional
distinction from Tunku Abdul Rahman College, Malaysia Berhad in various capacities, as Chairman of Audit
in 1974. He has been a member of the Malaysian Institute Committee, Member of Board Disciplinary Committee,
of Accountants since 1979. He was made a Fellow of Board Tender Committee and Board Member of several
the Association of Chartered Certified Accountants subsidiary companies.
(“ACCA”), United Kingdom in 1981 and became a graduate
member of the Institute of Chartered Secretaries and Tan Sri Dato’ Lau does not hold directorship in other
Administrators (“ICSA”), United Kingdom in 1987. He was public companies and listed issuers but sits on the board
formerly a Senator of Dewan Negara, appointed by Seri of directors of several private limited companies.
Paduka Baginda Yang diPertuan Agong, Malaysia.
During the financial period ended 30 June 2020, he
GOVERNANCE DRIVEN
DATUK (PROF.) A RAHMAN

@ OMAR BIN ABDULLAH
PJN, DPMT, JSM, SMT, AMN
Age : 75
Gender : Male
Datuk (Prof.) A Rahman was appointed as an Independent December 2006. Prior to CIDB, Datuk (Prof.) A Rahman
Non-Executive Director on 1 January 2003. He was started his career in the Public Works Department
redesignated and appointed as Chairman of the (“PWD”) where he served for 25 years. His last post in
Nomination Committee on 24 March 2016. He also sits PWD was the Deputy Director-General of PWD. In 1992, he
on the Audit and Risk Committee and Remuneration was accorded as an Honorary Professor by the University
Committee as an ordinary member. Teknologi Malaysia. Among other appointments, he is
the past President of the Royal Institution of Surveyors
Datuk (Prof.) A Rahman holds a Diploma in Quantity Malaysia, the past President of the Board of Quantity
Surveying from Thames Polytechnic, London, United Surveyors Malaysia and currently he is a Fellow of the
Kingdom, and an MSc in Construction Management Academy of Sciences Malaysia.
from the Herriot-Watt University, Scotland. He also
holds fellowships with The Royal Institute of Chartered Datuk (Prof.) A Rahman does not hold directorship in any
Surveyors (UK) and the Royal Institution of Surveyors other public companies and listed issuers but sits on the
Malaysia, as well as Professional Membership with The board of directors of several private limited companies.
Chartered Institute of Building of United Kingdom.
Datuk (Prof.) A Rahman was the founding Chief Executive attended 11 out of 11 Board meetings held.
Officer of the Construction Industry Development Board
(“CIDB”) Malaysia, a post which he held from 1995 to 2002,
after which he held the post of Chairman of CIDB until
21
DATO’ SR. ABDULL MANAF

BIN HJ HASHIM
DIMP, KMN, AMN
Age : 65
Gender : Male
Dato’ Sr. Abdull Manaf was appointed as an Independent He was the Deputy President of the Royal Institution of
Non-Executive Director of the Company on 1 July 2016. Surveyors Malaysia (“RISM”) for the session 2011/2012,
the President of RISM for the session 2012/2013 and has
He holds a Bachelor in Quantity Surveying from Universiti served as the President of the Board of Quantity Surveyors
Teknologi Malaysia. for 10 years since 2007 until 2017. Dato’ Sr. Abdull Manaf
has been re-appointed as a Director (Special Interest) of
Dato’ Sr. Abdull Manaf started his career as a Quantity Lembaga Lebuhraya Malaysia for another 2-year period
Surveyor in the Education Unit of the Quantity Surveying from 27 November 2018 to 26 November 2020.
Branch at Jabatan Kerja Raya (“JKR”) Headquarters
Malaysia and has served in JKR for 38 years, rising Dato’ Sr. Abdull Manaf does not hold directorship in any
through the ranks until his last post as the Deputy other public companies and listed issuers.
Director General of JKR, Malaysia.
GOVERNANCE DRIVEN
DATUK WIRA AZHAR

BIN ABDUL HAMID
Age : 59
Gender : Male
Datuk Wira Azhar bin Abdul Hamid was appointed as an Subsequently, in 2003, he returned to Sime Darby Group
Independent Non-Executive Director of the Company on and held various key positions including as Managing
20 October 2020. Director of Tractors Malaysia Holdings Berhad, Sime
Darby Group’s Divisional Director for Heavy Equipment
He is a Fellow of the Association of Chartered Certified Division (Asia Pacific), Managing Director of Sime
Accountants (“ACCA”), United Kingdom and a member of Plantations Sdn Bhd and Sime Darby Group’s Divisional
the Malaysian Institute of Accountants. Director for Plantations & Food Division.
He began his career as an Internal Audit Manager at Datuk Wira Azhar was appointed as Chief Executive
British Telecom Plc, United Kingdom from 1989 to 1991. Officer of Mass Rapid Transit Corporation Sdn Bhd in
He then joined Malaysian Cooperative Insurance Society 2011 and held the position until 2014. He had served
Ltd as Head of Internal Audit prior to joining Sime Darby as President/Group Managing Director of Tradewinds
Group in 1994 where he held several roles as Financial Corporation Berhad in 2015 and subsequently appointed
Controller in Sime Tyres International Sdn Bhd, Business as its Chairman in 2016.
Development Director in Sime Conoco Sdn Bhd and Group
General Manager of Sime Darby Group’s Engineering, Oil He was previously the Group Managing Director of
& Gas Division. Malakoff Corporation Berhad, Chairman of Malaysian
Palm Oil Association and MSM Malaysia Holdings Berhad
In 2001, Datuk Wira Azhar was appointed as Group Chief and currently, the Chairman of FGV Holdings Berhad, a
Executive of Pernas International Holdings Berhad (now position he held since 2017.
known as Tradewinds Corporation Berhad), a post he
held until 2002. Since he was appointed as a Director subsequent to the
financial period ended 30 June 2020, he did not attend
any Board meeting held during the said financial period.
23
NOTES:
Family Relationship
Except for Tan Sri Dato’ Sri Haji Wan Zaki Bin Haji Wan
Muda, Dato’ Sri Wan Zakariah Bin Haji Wan Muda and
Dato’ W Zulkifli Bin Haji W Muda who are siblings, and
Dato’ Roslan Bin Tan Sri Jaffar who is the son-in-law
of Tan Sri Dato’ Sri Haji Wan Zaki, none of the other
Directors are related to one another, nor with any major
shareholder.
Conflict of Interest
Save as disclosed in the related party transactions on

Note No. 44 in the Financial Statements of this Annual
Report, none of the other Directors have any conflict of
interest with the Company during the financial period
ended 30 June 2020.
Convictions of Offences
None of the Directors have been convicted of any offences

within the past 5 years and no public sanction or penalty
imposed by the relevant regulatory bodies during the
financial period ended 30 June 2020.
GOVERNANCE DRIVEN
MOHAMMAD FAUZI BIN HAJI AHMAD

Director, Concession Age : 54 Nationality : Malaysian Gender : Male
Date Joined Working Experience(s)

3 October 2011 Reliance Engineering, USA (2005 to 2011)
Radicare (M) Sdn Bhd (2001 to 2005)
Date of Appointment to Current Position Abrar-Manfield Consortium (1996 to 2001)
6 November 2017 Kuala Lumpur City Centre (KLCC) (1993 to 1996)
Academic/Professional Qualification(s) Projek Penyelenggaraan Lebuhraya (PROPEL) (1990
Bachelor of Science in Civil Engineering, University to 1993)
of Pittsburgh, USA Pengurusan Lebuhraya Berhad (PLB) (1989 to 1990)
WAN SHARIMAN WAN MOHAMED

Director, Corporate Services Age : 53 Nationality : Malaysian Gender : Male

17 October 2016 Idealcap Holdings Sdn Bhd (2013 to 2016)
Maju Holdings Group (2010 to 2012)
Date of Appointment to Current Position Malaysian Resources Corporation Berhad (2003 to
1 August 2018 2010)
Academic/Professional Qualification(s) APL-NOL Malaysia (1995 to 2003)
Member of Malaysian Institute of Accountants (MIA) Amanah Capital Berhad (1995)
Fellow of Chartered Institute of Management Oriental Bank Berhad (1992 to 1994)
Accountants (CIMA), UK
Master in Business Administration (with Distinction),
Nottingham Trent University, UK
HAYATI TAMZIR
Executive Director – Contracts & Commercial, AZSB Age : 54 Nationality : Malaysian Gender : Female

2 January 2018 UEM Builders Sdn Bhd, posted in India (2010 to 2017)
Pembinaan Bintang Baru Sdn Bhd (2010)
Date of Appointment to Current Position Syarikat Siah Brothers Trading Sdn Bhd (1990 to
1 June 2019
2010)
Academic/Professional Qualification(s)
Bachelor of Building, New South Wales University,
Sydney, Australia
25
ISKANDAR SHAM BIN ABD RASAP

Chief Financial Officer Age : 50 Nationality : Malaysian Gender : Male
Date Joined Master of Science in Professional Accountancy

3 February 2020 (Merit), University of London, UK
Bachelor of Science (Honours) Accounting &
Date of Appointment to Current Position Financial Analysis, University of Warwick, UK
28 February 2020 Diploma in Managing Terminal Operations, DP World
Academic/Professional Qualification(s) Institute Dubai
Member of Malaysian Institute of Accountants (MIA) Working Experience(s)
Member of Malaysian Institute of Certified Public Unitar Capital Sdn Bhd (2016 to 2019)
Accountants (MICPA) Pelabuhan Tanjung Pelepas Sdn Bhd (2008 to 2016)
Fellow of Association of Chartered Certified Media Prima Berhad (2006 to 2008)
Accountants (ACCA), UK PricewaterhouseCoopers (2002 to 2006)
Member of Chartered Institute of Management Arthur Andersen & Co (1995 to 2002)
Accountants (CIMA), UK
DATO’ KHAIRUL YUSNI MD YUSOF

Director, Business Development Age : 63 Nationality : Malaysian Gender : Male

1 October 2019 Melewar Integrated Engineering Sdn Bhd (2018 to
2019)
Date of Appointment to Current Position Encorp Berhad (2011 to 2017)
1 October 2019 Tradewinds Corporation Berhad (2010 to 2011)
Academic/Professional Qualification(s) MMC Berhad (2009 to 2010)
Graduated from Armed Forces Staff College, Kuala Enfiniti Productions Sdn Bhd (2009)
Lumpur Economic Planning Unit, Prime Minister Department
Graduated from the Royal Navy International (2006 to 2008)
Communication Specialisation, HMS Mercury, Ministry of Higher Education (2004)
Portsmouth, UK Ministry of Agriculture Malaysia (2001 to 2003)
Higher school education at Royal Military College Vantage View Sdn Bhd (1998 to 2000)
Bukit Cahaya Country Resort (1998)
Royal Malaysian Navy (1977 to 1996)
GOVERNANCE DRIVEN
KHAIRUDIN BIN HAJI MOHD ALI

Chief Compliance Officer Age : 45 Nationality : Malaysian Gender : Male
Date Joined BA (Hons) Accounting and Finance, De Montfort

13 November 2013 University, Leicester, UK
Date of Appointment to Current Position Working Experience(s)

6 November 2017 Prokhas Sdn Bhd (2009 to 2013)
CIMB Investment Bank Berhad (2006 to 2009)
Academic/Professional Qualification(s) KPMG Singapore (2005 to 2006)
Member of Malaysian Institute of Accountants (MIA) KPMG Kuala Lumpur (2004 to 2005)
Member of Malaysian Institute of Certified Public Jamal, Amin and Partners (2002 to 2004)
Accountants (MICPA) PricewaterhouseCoopers (1997 to 2002)
Associate Member of Institute of Internal Auditors
Malaysia (IIA Malaysia)
IR. AUBREY MICHAEL SHEPHERDSON

Head, Property Age : 59 Nationality : Malaysian Gender : Male

12 December 2018 Malaysian Resources Corporation Berhad (2014 to
2018)
Date of Appointment to Current Position KLCC Projeks Sdn Bhd (2009 to 2014)
12 December 2018 Putrajaya Holdings Sdn Bhd (1998 to 2009)
Academic/Professional Qualification(s) Pengurusan Lebuhraya Berhad (1991 to 1997)
Master of Business Administration, University of HSSI Sdn Bhd (1990 to 1991)
Strathclyde, Scotland, UK Minconsult Sdn Bhd (1987 to 1989)
Bachelor of Science in Civil Engineering, University
of Toledo, Ohio, USA
MD SUHAIMI BIN HUSAIN

Chief Operating Officer, TB Supply Base Sdn Bhd Age : 59 Nationality : Malaysian Gender : Male

1 May 2017 Atlas Merger Sdn Bhd (2006 to 2017)
Eastern Pacific Industrial Corporation Berhad (EPIC)
Date of Appointment to Current Position (1998 to 2006)
1 May 2017 Pangkalan Bekalan Kemaman Sdn Bhd (Kemaman
Academic/Professional Qualification(s) Supply Base) (1989 to 1998)
B.Sc. Maritime/Nautical Studies from Liverpool John Perwaja Terengganu Sdn Bhd (1985 to 1989)
Moores University, UK
27
BHASKARAN SUBRAMANIAM
President Director, PT Ichtiar Gusti Pudi Age : 52 Nationality : Malaysian Gender : Male

15 August 2020 Advisory Role in Rubber Plantation in Malaysia (2018
to 2020)
Date of Appointment to Current Position Barito Plantation Indonesia (2014 to 2018)
15 August 2020 Genting Plantation Indonesia (2011 to 2014)
Academic/Professional Qualification(s) Cargill Group Plantation Indonesia (2008 to 2011)
Executive Master in Plantation & Estate PPB Oil Palms - Malaysia and Indonesia (1994 to
Management, Asia e University 2008)
Diploma from The Incorporated Society of Planters
(ISP)
MOHD HARON BIN MOHD IDRIS

Director, Security Age : 54 Nationality : Malaysian Gender : Male
Date Joined Security Advisor – MIM Protection Sdn Bhd (2016 to

2 July 2007 2020)
DISD Coordinator Foreign Affair (2006 to 2007)
Date of Appointment to Current Position Staff Assistant to Defence Advisor Malaysian High
1 May 2020 Commission in Islamabad, Pakistan (2002 to 2006)
Academic/Professional Qualification(s) Counter Intelligence Instructor – PULARIS (2000 to
Executive Diploma in Management, Universiti 2002)
Teknologi Malaysia DISD Surveillance & Interrogation Coordinator (1998
Diploma in Hotel & Management, National to 2000)
Restaurant Association, USA Chief of Security Detachment Ipoh, Perak (1995 to
1998)
Working Experience(s) Chief of Security Detachment Butterworth, Penang
Corporate Advisor – MIM Waste Services Sdn Bhd (1993 to 1995)
(2017 to 2020) DISD Counter Intelligence Group (1987 to 1993)
SEUHAILEY BINTI SHAMSUDIN

Company Secretary Age : 43 Nationality : Malaysian Gender : Female
Date Joined Academic/Professional Qualification(s)

15 June 2005 Associate of The Malaysian Institute of Charted
Secretaries and Administrators (ICSA)
Date of Appointment to Current Position
1 August 2006 Working Experience(s)
Ranhill Berhad (2003 to 2005)
Mekar Korperat Sdn Bhd (2000 to 2003)
GOVERNANCE DRIVEN
1. INTRODUCTION
Pursuant to the Main Market Listing Requirements (“Listing Requirements”) of the Bursa Malaysia Securities
Berhad (“Bursa Malaysia”) and the requirements of the Malaysian Code on Corporate Governance, the Board of
Directors (“the Board”) is committed in maintaining a sound system of risk management and internal control
in Ahmad Zaki Resources Berhad (“AZRB”) and its subsidiaries (“the Group”) to manage risk and to report on
internal controls and regulatory compliance so as to safeguard shareholders’ investment and the Group’s assets.
Set out below is the Board’s Statement on Risk Management and Internal Control (“Statement” or “SORMIC”)
for the financial period ended 30 June 2020 which was prepared in accordance with the Guidelines for Directors
of Listed Issuers (“Guidelines”) issued by Bursa Malaysia and pursuant to Paragraph 15.26(b) of the Listing
Requirements. This Statement outlines the nature and scope of risk management and internal control and covers
all of the Group’s operations except for associate companies and smaller investments.
2. RESPONSIBILITY
The Board recognises the importance of maintaining a sound system of risk management and internal control
in the Group and as such has reaffirmed its commitment and responsibility for the Group’s risk management
and internal control systems covering not only financial controls but also operational, project management,
organisational and compliance controls, and for reviewing the adequacy of integrity in these systems.
Whilst the Board is ultimately responsible for these systems, it has delegated the implementation of these control
systems to the Management who regularly report on risks identified and action or steps taken to mitigate and/or
to minimise the risks. The oversight of this critical area is carried out by the Audit and Risk Committee (“ARC”)
comprising the independent Board members.
The system of risk management and internal control is designed to identify and manage the Group’s risk within
the acceptable risk tolerance, rather than to eliminate the risk of failure in achieving the Group’s business
objective in accordance with the Group’s strategy. Accordingly, it can only provide reasonable assurance but not
absolute assurance against material misstatement, financial loss or fraud. The Group’s concept of reasonable
assurance also recognises that the cost of control procedures should not exceed the expected benefits.
3. RISK MANAGEMENT FRAMEWORK
The Group has in place a Risk Management Framework to proactively identify, evaluate, assess and manage key
risks to an optimal level. In line with the Group’s commitment to deliver sustainable value, this framework aims at
providing risk management on an integrated basis and is organised entity-wide. It outlines the risk management
methodology which is in line with the Principles and Guidelines of MS ISO 31000:2010 Risk Management –
Principle and Guidelines, mainly promoting the risk ownership and continuous monitoring of key risks identified.
29
PRINCIPLES FRAMEWORK PROCESS

(Clause 3) (Clause 4) (Clause 5)
a) Creates value
Mandate and
b) Integral part of organisational Establishing the context
commitment
processes
Communication and consultation

c) Part of decision making Risk
d) Explicitly addresses uncertainly Assessment
Monitoring and review

e) Systematic, structured and timely Design of Risk identification
f) Based on the best available framework for
information managing risk
g) Tailored Risk analysis
h) Takes human and cultural factors into Continual Implementing
account improvement of risk Risk evaluation
i) Transparent and inclusive the framework management
j) Dynamic, interactive and responsive to
change Monitoring and Risk treatment
k) Facilitates continual improvement and review of the
enhancement of the organisation framework
Sources: MS ISO 31000:2010
Risk management awareness and training are continually conducted to all employees as part of the Group’s
initiatives to instil a proactive risk management culture and implement proper risk management framework in
the Group.
The Board recognises that risk is an essential part of the Group’s business, presenting both threats and
opportunities. In order to achieve the Group’s business objectives and meet shareholders’ expectations, the
Board and Management would have to make decision which will involve some degree of risk. The following
risk management policy provides guidance as to the management of risks and its application across AZRB and
business divisions:
Integrate risk management into AZRB culture, business activities and business decision making processes;
Inculcate risk management in every business process at every level;
Anticipate and respond to the changing operational, economic, social, environmental and regulatory
requirements proactively;
Manage risks pragmatically, to an acceptable level given specific circumstances of each situation;
Ensure all approvals to strategy, key projects, major assets, significant initiatives or investment should
include a detailed risk assessment report as and when required; and
Implement a robust and sustainable risk management framework that is aligned with AZRB vision, mission
and in accordance to best practices.
GOVERNANCE DRIVEN
4. SIGNIFICANT RISK
As depicted in the Group’s risk management procedure, risks are broadly categorised into strategic, operational,
financial, compliance and hazard risk. The identified individual risk events under the broad risk categories have
undergone comprehensive reviews in line with the Group’s risk management methodology.
During the period under review, the significant risks across divisions were presented and deliberated in the
meetings of Risk Management Committee (“RMC”) – Subsidiary, Board of Directors of subsidiaries and ARC.
The RMC – Subsidiary is assisted by the Risk Management Department (“RMD”) in discharging risk management
responsibilities. RMD facilitates the risk assessment process on risk identification and risk rating determination
by the respective process owners (head of department). RMD also provides guidance and support in the
development of risk action plan and monitors the risk action effectiveness and status. The Head of Business
Divisions are responsible for identifying, analysing and evaluating risks, as well as developing, implementing and
monitoring risk actions plans and reporting all risks to the RMC – Subsidiary, Board of Directors of subsidiaries
and ARC.
The RMC – Subsidiary, Board of Directors of subsidiaries and ARC have noted the key risks, the potential impact
and likelihood of risks occurring, the effectiveness of existing controls and the risk action plans being taken to
manage the risks to the desired levels.
5. INTERNAL AUDIT
The Internal Audit Department (“IAD”) reports directly to the ARC. Through internal audit reviews, IAD’s principal
roles are to evaluate and improve the effectiveness of internal control within the Group.
Regular reviews by IAD are carried out based on the annual audit plan which encompasses the management of
risk and governance, and the effectiveness and adequacy of the internal control procedures across the various
business divisions within the Group. The corrective actions taken by Management on audit recommendations are
reported on a regular basis to the ARC for their update, consideration and approval.
Further information on the activities of IAD can be found in the ARC Report.
31
6. KEY INTERNAL CONTROL FEATURES
The Group has a structure which outlines accountability, authority and responsibility to the Board, its committees
and Management. Key processes have been established in reviewing the adequacy and effectiveness of the risk
management and internal control that include the following:
a. Board of Directors
The Board is the pillar of the Group’s risk management and internal control practices. The Board is committed
to maintaining a sound system of internal control and the overall responsibility for risk oversight, mirroring
its overall responsibility for strategy.
The Board meetings are held on a quarterly basis during the period to review and evaluate the Group’s
operations and performance and to address key issues. However, additional meetings may be convened as
Special Board Meetings when required.
b. Audit and Risk Committee
The ARC is responsible in ensuring effectiveness of integrated risk management function within the
organisation, reviews the internal audit plan and result of internal audit activity as well as ensuring
appropriate action is taken on the recommendation of the internal audit function.
The ARC composition comprises 3 Independent Non-Executive Directors. The ARC has full access to both
Internal Auditors and External Auditors and has the right to convene meeting with auditors without the
presence of Executive Directors and Senior Management.
c. Business Plan and Budget
For the current period’s Business Plan and Budget, the Group has prepared an annual business plan and
budget for all Business Divisions and subsidiaries. The annual business plan and budget were deliberated
and approved by their respective Boards. The performance of each business division and subsidiary is
assessed against budget by the Chief Financial Officer, with explanation on significant variances presented
to the Board on a quarterly basis.
d. Documented Policies and Procedures
Clearly documented policies and procedures of business processes have been set out in a series of Standard
Operating Procedures (“SOP”) or Integrated Management System (“IMS”) and implemented throughout
the Group. These policies and procedures are periodically reviewed and updated to reflect the changes in
business structure, processes as well as changes in external environment.
GOVERNANCE DRIVEN
6. KEY INTERNAL CONTROL FEATURES (CONT’D)
e. Code of Conduct
The Group has in place, a Code of Conduct which sets the tone of compliance with the Group’s rules and
regulations and employee conduct as set out in the Employee Handbook.
f. Performance Management
Performance appraisals are carried out annually in a Performance Management System (“PMS”) that aims
to develop individual employees with the required commitment, skills and competencies for working towards
shared meaningful objectives within the organisational framework.
In order to nurture talent, training and development plans for employees are established.
g. Business Ethics
The Code of Business Ethics (“the Code”) is established and communicated to all employees. The Code
provides guidance and serves as the main source of reference to assist employees to live up to ethical
business standards and explains how business and duties should be conducted. Compliance to the Code is
mandatory to all employees.
h. Building a Resilient Group
The Coronavirus disease (“COVID-19”) pandemic has impacted the global economy. Domestically, the
Government has announced various economic stimulus packages to help cushion the resulting adverse
impact of the pandemic and to reinvigorate economic growth.
The Board has formulated appropriate strategic plans to address the impact of COVID-19 to the Group. In
building a resilient Group, the Senior Management has formed a Special Task Force (“STF”) to focus on
3 main areas, i.e. Protect Business Continuity, Build and Secure Liquidity and Engage Stakeholders. The
frequency of the STF meeting is adjusted depending on the severity of the pandemic in the country and the
effectiveness of the execution of the 3 focus areas.
33
7. ASSURANCE TO THE BOARD
The monitoring, review and reporting arrangements in place is to provide reasonable assurance that the internal
control system is appropriate to the Group’s operations and that risks are at an acceptable level throughout the
Group’s businesses. Such arrangements, however, do not eliminate the possibility of human error, deliberate
circumvention of control procedures by employees and others, or occurrence of unforeseeable circumstances.
In line with the Guidelines, the Board has received assurance from the Group Managing Director and the Chief
Financial Officer that the risk management and internal control systems of the Group are operating adequately
and effectively. The Board is of the view that the risk management and internal control systems in place during
the period under review are sound and sufficient to safeguard shareholders’ investment, stakeholders’ interest
and the Group’s assets.
8. REVIEW OF STATEMENT BY EXTERNAL AUDITORS
As required by Paragraph 15.23 of Bursa Malaysia’s Listing Requirements, this Statement has been reviewed by
the external auditors, Deloitte PLT, for inclusion in the Annual Report for financial period ended 30 June 2020 and
reported to the Board that nothing has come to their attention that causes them to believe that the Statement
intended to be included in the Annual Report is not prepared, in all material respects, in accordance with the
disclosures required to be set out by paragraphs 41 and 42 of the Statement on Risk Management and Internal
Control: Guidelines for Directors of Listed Issuers to be set out, nor the SORMIC factually inaccurate.
9. CONCLUSION
For the financial period under review and up to the date of issuance of the Statement, the Board is pleased to state
that the Group’s risk management and internal control were rated overall satisfactory, adequate and effective for
the Group’s purpose and safeguard the shareholders’ investment and the interest of customers, employees and
other stakeholders. There have been no material breaches, contingencies or uncertainties identified from the
reviews.
This Statement was approved by the Board on 30 September 2020.

GOVERNANCE DRIVEN
The Board of Directors (“Board”) of Ahmad Zaki Resources (“AZRB” or “Company”) is pleased
to present this Corporate Governance Overview Statement (“Statement”) to provide investors
with an overview of the extent of compliance on the application of principles as set out in
the Malaysian Code of Corporate Governance 2017 (“Code”) by AZRB and its subsidiaries
(collectively referred as the “Group”) throughout the financial period from 1 January 2019
until 30 June 2020.
The Board of Directors remains committed to ensuring that good corporate governance principles continue to be
developed and implemented throughout the Group with the ultimate objective of enhancing shareholders’ value, whilst
taking into account the interests of other stakeholders as well as to generate long-term sustainability and growth.
Principle A Principle B Principle C
Board Leadership and Effective Audit and Risk Integrity in Corporate Reporting and
Effectiveness Management Meaningful Relationship with Stakeholders
• Board Responsibilities • Audit Committee • Communication with Stakeholders
• Board Composition • Risk Management and Internal • Conduct of General Meetings
Control Framework
• Remuneration
This Statement is also prepared in accordance with the Listing Requirements of Bursa Malaysia and should be read
together with the Corporate Governance Report of the Company (“CG Report”) which is available on the website of
Bursa Malaysia and the Company’s website at www.azrb.com.
35
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS
BOARD
Responsible for providing stewardship and oversight of the Group’s business affairs
Audit and Risk Nomination Remuneration Employees’ Share

Committee Committee Committee Scheme Committee
Review of financial Review candidates for Review and oversee Formulate, implement
reporting, internal Board appointment the establishment and and administer of
controls, related party and re-appointment administration of the Employees’ Share
transactions and and conduct annual remuneration policies Scheme in
conflicts of interest, assessment of the and procedures for accordance with the
internal audit as well Board, Board Directors and Senior By-Laws
as external audit Committees and Management
processes Directors
GROUP MANAGING DIRECTOR

Responsible for day-to-day running of business operations and implementation of
the Board’s policies and decisions
DEPUTY GROUP MANAGING DIRECTOR (1) DEPUTY GROUP MANAGING DIRECTOR (2)
GROUP EXECUTIVE COMMITTEES

GOVERNANCE DRIVEN
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)
BOARD RESPONSIBILITIES
The principal responsibilities of the Board shall include but not limited to the following:
Reviewing and adopting a strategic plan for the Company and for the Group;
Together with Senior Management, promote good corporate governance culture within the Company which
reinforces ethical, prudent and professional behaviour;
Overseeing the conduct of the Company and the Group’s businesses and to evaluate whether the businesses are
being properly managed;
Identifying principal risks affecting the Company and the Group and ensuring the implementation of appropriate
internal controls and mitigation measures;
To approve succession planning, including appointing, training, fixing the compensation of and where appropriate,
replacing senior management;
Overseeing the development and implementation of a shareholder and stakeholder communications policy for
the Company and the Group; and
Reviewing the adequacy and the integrity of the management information and internal control systems of the
Company including systems for compliance with applicable laws, regulations, rules, directives and guidelines.
The Board recognises its roles and responsibilities in discharging its fiduciary duties and leadership functions. The
Board is ultimately responsible in determining the direction of the Group including setting the strategic direction,
establishing short, medium and long-term business goals and monitoring the achievement of these goals for the
Group. The roles and responsibilities of the Board are clearly defined in the Board Charter which is available on the
website of the Company. The latest Board Charter was reviewed and approved by the Board on 30 September 2020.
The Board delegates the authority to implement the Group’s strategies and managing the operations of the Group
to the Executive Vice Chairman, Group Managing Director, Deputy Group Managing Directors and the Executive
Director who are supported by a capable Management team. The Board has oversight on matters delegated to the
Management whereby updates are reported at least on a quarterly basis or as and when required. Non-executive
Directors play key supporting roles, contributing knowledge and experience towards the formulation of policies and
in the decision-making process. They could provide the relevant checks and balances, focusing on shareholders’ and
other stakeholders’ interests and ensuring that high standards of corporate governance are applied.
Board Committees
In order to assist in the oversight function with respect to specific responsibility areas, the Board has established
4 Board Committees, namely, Audit and Risk Committee, Nomination Committee, Remuneration Committee and
Employees’ Share Scheme Committee. Details of the Terms of Reference of each Board Committees are also
stipulated in the Board Charter. The Board is regularly updated on the proceedings and deliberations of the Board
Committees and recommendations will be highlighted and reported to the Board. Professional advisers and members
of the Senior Management team will attend the committees meetings as and when required.
The Board and its Committees meet regularly to deliberate on matters under their purview. During the financial
period, the Board has deliberated on business strategies and critical issues concerning the Group, including business
plan, annual budget, investment proposals, financial results as well as key performance indicators.
37
BOARD COMPOSITION
During the financial period under review, the Board has 9 members comprising 5 Executive Directors and 4
Independent Non-Executive Directors. The profiles of the Directors are presented on pages 14 to 22 of this Annual
Report. The Board endeavours to ensure that it has the appropriate mix of skills, experience, and diversity to reflect
the Group’s nature of business. The Board also, from time to time, undertakes a review of its composition to determine
areas of strengths and improvement opportunities.
At present, the Board consists of all male Directors. However, there are 5 female Directors in the subsidiaries of AZRB.
The Board will continue to source for qualified female candidates without compromising on the business imperative.
The Board takes cognisance that the Code recommends that at least half of the board is independent directors. With
the current Board composition of having more than 1/3 independent directors, the Board is satisfied that the current
number of independent directors is sufficient to ensure balance of power and authority on the Board.
Separation of Positions of Chairman and Managing Director
There is a clear division of responsibilities between the Chairman and the Group Managing Director to ensure that
there is a balance of power and authority. The Non-Executive Chairman is responsible for looking after the best interest
of all shareholders by instilling good corporate governance practices, leadership and effectiveness of the Board,
whilst the Group Managing Director, with the assistance of the Deputy Group Managing Directors, has the overall
responsibility for the execution of the Group’s strategies in line with the Board’s direction, oversees the business
operations and drives the Group’s businesses and performance towards achieving the Group’s vision and goals.
Nomination Committee (“NC”)
The members of the NC and their respective attendance during the financial period ended 30 June 2020 are as follows:
Name Attendance
Datuk (Prof.) A Rahman @ Omar bin Abdullah (Chairman) 1/1
Raja Tan Sri Dato’ Seri Aman bin Raja Haji Ahmad 1/1
Tan Sri Dato’ Lau Yin Pin @ Lau Yen Beng 1/1
The NC shall meet at least once a year or at any other time deemed necessary by the Chairman. The quorum for a
meeting of the NC is 2 members.
GOVERNANCE DRIVEN
Nomination Committee (“NC”) (Cont’d)
Key matters were discussed by NC, among others:
Assessing and recommending to the Board, the continuation of service of the Directors who are seeking re-
election at the Annual General Meeting (“AGM”);
Assessing and recommending to the Board on the appointment of chairman of subsidiaries of AZRB;
To consider and recommend Independent Non-Executive Directors who have served for a cumulative term of
more than 9 years to continue in office as Independent Non-Executive Director;
To assess the effectiveness of the Board and Board Committees as a whole and the contribution of each individual
Director according to the assessment process;
To review annually the required mix of skills and experience and other qualities, including core competencies,
which Non-Executive Directors should bring to the Board;
Reviewing and assessing the annual performance and effectiveness of the Board and the Committees; and
To review the term of office and performance of the ARC and each of its members annually to determine whether
the ARC and members have carried out their duties in accordance with their terms of reference.
The Board noted the recommendation by the Code on the tenure of an independent director should not exceed a
cumulative of 9 years. Nonetheless, at the moment, the Board has not adopted any policy which limits the tenure of
Independent Directors up to certain number of years. The Board is of the view that there is no requirement to fix a
maximum tenure limit for independent director as there are significant advantages and benefits to be gained from
a long servicing director who is familiar with the Company’s affairs and businesses. The ability of a director to serve
effectively as an independent director is very much dependent on his skills, knowledge, expertise and experience,
professionalism, integrity and the ability to discharge his duties and responsibilities. The length of his service does
not in any way diminish his exercise of independent judgement.
Whilst Raja Tan Sri Dato’ Seri Aman bin Raja Haji Ahmad, Tan Sri Dato’ Lau Yin Pin @ Lau Yen Beng and Datuk (Prof.)
A Rahman @ Omar bin Abdullah, who have served as Independent Non-Executive Directors of the Company for a
cumulative term of more than 9 years each, the NC has carried out the annual assessment and recommended to the
Board for them to continue to act as Independent Non-Executive Directors of the Company, subject to shareholders’
approval at the forthcoming AGM of the Company. The annual assessment was based on the following criteria:
He fulfils the criteria under definition of Independent Non-Executive Director as stated in the Listing Requirements
and therefore, is able to bring independent and objective judgement to the Board;
His experience in industries relevant to the Group’s businesses enables him to provide the Board and the Audit
and Risk Committee, as the case may be, with pertinent expertise, skills and competence to enable the Board to
discharge its responsibilities;
His commitment to the Company in terms of time spent on the Group, as evidenced by his meeting attendance;
He was assessed to be “independent in mind” with the will and ability to stand for an objective point of view; and
He has been with the Company for an optimal period of time to understand the Company’s business operations
and has accumulated tacit knowledge which in turn enables him to contribute actively during deliberations or
discussions at the Board and Audit and Risk Committee Meetings, as the case may be.
39
Board Meetings
During the financial period ended 30 June 2020, the Board met for a total of 11 times and their respective attendances
are as follows:
Name Attendance
Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda 10/11
Dato’ Sri Wan Zakariah bin Haji Wan Muda 10/11
Dato’ W Zulkifli bin Haji W Muda 11/11
Dato’ Roslan bin Tan Sri Jaffar 11/11
Dato’ Haji Mustaffa bin Mohamad (resigned on 16 October 2020) 11/11
Datuk (Prof.) A Rahman @ Omar bin Abdullah 11/11
Dato’ Sr. Abdull Manaf bin Hj Hashim 10/11
Datuk Wira Azhar bin Abdul Hamid (appointed as Director subsequent to the financial
Not Applicable
period ended 30 June 2020)
All the Directors have complied with the minimum requirement of at least 50% on attendance of Board meetings
during the financial period as stipulated in the Listing Requirements.
Directors are provided with complete, adequate and timely information prior to meetings and on an ongoing basis
to enable them to make informed decisions on pertinent matters. The circulation of meeting materials to Board
members is carried out using a secured technological platform which facilitates seamless information flow and
allows for timely enhancements to be made to the materials, if necessary.
Directors’ Training
The Board emphasises the importance of continuing education and training for its Directors to broaden their
knowledge and keep abreast with recent developments of the business environment, relevant changes in laws and
regulations and also in the areas related to their duties. During the financial period, all Directors have attended
various conferences, seminars and training programme as follows:
Business Transformation: Drive Impactful Performance Results

AMLA Program 2019
Directors’ Training – Corporate Liability Provision (Section 17A of Malaysian Anti-Corruption Commission Act,
2009)
Cyber Security Awareness Programme
Group-Wide Training Programme
Cybersecurity & Work-From-Home Security Challenges Amidst Coronavirus disease (“COVID-19”) Pandemic
Adequate Procedure & the Implementation of MS ISO 37001 Anti-Bribery Management System (ABMS)
Agile Corporate Governance In Industrial Revolution (IR) 4.0
GOVERNANCE DRIVEN
Code of Business Ethics
The Group has established a Code of Business Ethics for Directors and employees which lays out the ethical, business
and lawful conduct of the Company, including managing conflicts of interest, preventing the abuse of power, corruption,
insider trading and money laundering and encapsulated in the Group’s Human Resource policies. All Directors and
employees are expected to behave ethically and professionally at all times and thereby protect and promote the
reputation and performance of the Group. The Group communicates its Code of Business Ethics to all Directors and
employees upon their appointment/employment and is deemed to be part of the Terms and Conditions of Service. The
Code of Business Ethics can be found on the Company’s website and is subject to regular review and updates.
Anti-Bribery and Corruption Policy
In line with the implementation of new corporate liability provision under Section 17A of the Malaysian Anti-
Corruption Commission Act 2009 (Amendment 2018) effective 1 June 2020, the Board had on 30 September 2020
reviewed, approved and adopted the Anti-Bribery and Corruption Policy (“ABC Policy”). The ABC Policy serves to
provide guidance on how to prevent, detect and respond to bribery and corruption that may arise in the course of
business. The ABC Policy is applicable to all Directors, employees and any person who performs services for and on
behalf of the Group, which includes contractors, subcontractors, consultants, suppliers, agents, intermediaries and
representatives of the Group. The ABC Policy is available on the Company’s website.
Whistleblowing Policy
The Company adopted the Whistleblowing Policy (“the Policy”) as a tool to manage non-compliance to the Group’s Code
of Business Ethics and its future improvement which provides an avenue and mechanism for any individual to report
concerns they may have on any suspected and/or known improper conducts, wrongdoings, corruption, fraud and/
or abuse in accordance with the procedures as provided under the Policy. The Policy can be found on the Company’s
website for reference and to ease of access for reporting by Directors, employees and associates of the Group.
Company Secretaries
In discharging its responsibilities, the Board is supported by suitably qualified and competent Company Secretaries
who are experienced, competent, and knowledgeable on laws and regulations issued by the relevant authorities.
The Company Secretary is present for all Board and Board Committee meetings and act as counsel on corporate
governance matters to the Board whilst also co-coordinating information flow as well as meeting proceedings.
41
REMUNERATION
The Board believes that the level of remuneration offered by the Company is sufficient to attract and retain Senior
Management, Executive and Non-Executive Directors needed to run the Company and to maximise shareholders’
value. The component parts of remuneration packages have been structured to link rewards to corporate and individual
performance for Senior Management and Executive Directors, whilst Non-Executive Directors’ remuneration reflects
their experience and level of responsibilities. In addition, all Senior Management and Directors are indemnified under
a Directors’ and Officers’ Liability Insurance against any liability incurred by them in discharging their duties.
Remuneration Committee (“RC”)
The members of the RC and their respective attendance during the financial period ended 30 June 2020 are as follows:
Name Attendance
Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda (Chairman) 1/1
Dato’ Sri Wan Zakariah bin Haji Wan Muda 1/1
The RC shall meet at least once a year or at any other time deemed necessary by the Chairman. The quorum for
a meeting of the RC is 2 members. The RC reviewed the remuneration of the executive board members before
recommending the same for the Board’s approval. The Directors concerned abstained from deliberating and voting
on their own remuneration.
The RC is responsible for recommending the remuneration packages of the Directors for consideration and approval
by the Board. The Directors play no part in deciding their own remuneration. The Company reimburses reasonable
expenses incurred by these Directors in the course of their duties as Directors. The directors’ fees and benefits
payable to the Directors are recommended by the Board and approved by the shareholders at the AGM.
The Company has policy to determine the remuneration of Senior Management which shall commensurate with their
experience, skills and education as well as benchmarking against industry standards. The top 5 Senior Management
of the Company comprises the 5 Executive Directors including the Executive Vice Chairman, and details of their
respective remuneration are disclosed below.
GOVERNANCE DRIVEN
Remuneration Committee (“RC”) (Cont’d)
Details of the remuneration for individual Directors of the Company are outlined below:
Received from the Company Received from the Group

(RM’000) (RM’000)
Fees and Salary1 Fees and Salary1
Meeting and other Benefits- Meeting and other Benefits-
Name of Director Allowance emoluments in-kind Allowance emoluments in-kind
Executive Directors
Tan Sri Dato’ Sri Haji Wan Zaki
8 2,283 52 72 214 49
bin Haji Wan Muda
Dato’ Sri Wan Zakariah
8 1,826 64 92 16 52
bin Haji Wan Muda
Dato’ W Zulkifli
9 0 0 70 1,685 109
bin Haji W Muda
Dato’ Roslan bin Tan Sri Jaffar 9 1,279 58 97 17 26
Dato’ Haji Mustaffa
bin Mohamad (resigned on 9 0 11 125 1,443 79
16 October 2020)
Non-Executive Directors
Raja Tan Sri Dato’ Seri Aman
361 0 57 4 0 0
bin Raja Haji Ahmad
Tan Sri Dato’ Lau Yin Pin
187 0 0 96 0 10
@ Lau Yen Beng
Datuk (Prof.) A Rahman
276 0 38 7 0 0
@ Omar bin Abdullah
Dato’ Sr. Abdull Manaf
179 0 11 3 0 26
bin Haji Hashim
Datuk Wira Azhar bin
Abdul Hamid (appointed on _ _ _ _ _ _
20 October 2020)
Notes:
[1]
Excludes Employees Provident Fund (“EPF”) and other statutory contributions.
43
PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT
AUDIT AND RISK COMMITTEE (“ARC”)
The Board has established an ARC to provide robust oversight on financial reporting, external and internal audit
processes, related party transactions and conflict of interest situations as well as risk management matters of the
Group. The ARC members possess the requisite financial literacy and business knowledge that support the sound
understanding of matters under their purview. Whilst a stand-alone Risk Management Committee is not established,
the ARC strives to ensure that deliberations on risk management matters are not placed on the periphery. Adequate
attention is accorded for risk management matters including discussion on nuanced risks such as reputational, key
performance indicator and cyber risks.
The ARC assists the Board in overseeing the financial reporting of the Group by reviewing the quarterly financial
results and annual audited financial statements to ensure that they are drawn up in accordance with the applicable
financial reporting standards and the requirements of the Companies Act, 2016 prior to recommending them for
approval by the Board and subsequent issuance to the shareholders.
The details of meeting attendance of the ARC members are outlined below:
Members Attendance
Raja Tan Sri Dato’ Seri Aman bin Raja Haji Ahmad (Chairman) 9/11
The ARC has unrestricted access to both the internal and external auditors, who report functionally and directly to the
ARC. The ARC has established transparent arrangements to maintain an appropriate relationship with the Company’s
external auditors. During the financial period under review, the external auditors has provided assurance that their
personnel are and have been independent throughout the conduct of the audit in accordance to the terms of relevant
professional and regulatory requirements.
The NC assessed the performance of the ARC and its members through an annual evaluation. Based on the outcome
of the evaluation for the financial period under review, both the NC and the Board were satisfied with the ARC’s
performance. The information on the composition, attendance record and summary of activities of the ARC is
presented in the Audit Committee Report of this Annual Report.
GOVERNANCE DRIVEN
PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT (CONT’D)
RISK MANAGEMENT AND INTERNAL AUDIT
The Board acknowledges its overall responsibilities for the Group’s system of risk management and internal control,
which includes the establishment of an appropriate control environment and framework, reviewing the integrity,
effectiveness and adequacy of these systems to ensure that the Group‘s assets and the shareholders’ interests are
safeguarded.
The Company has in place an ongoing process for identifying, evaluating and managing significant risks that may
affect the achievement of the business objectives of the Group. This function is embedded and carried out as part
of the Group’s operating and business management processes. The Group has also continued to implement its
Risk Management procedures in areas of Enterprise Risk Management and Project Risk Management in its major
subsidiaries. The ARC is delegated with the oversight responsibility of risk management. The Board, through its ARC,
reviews the key risks identified to ensure proper management and mitigation of risks within its control.
The Group has an in-house Internal Audit Department (“IAD”) which is independent of the activities or operations
of the other operating units in the Group. The IAD adopts a risk-based audit approach when executing each audit
assignment which is carried out in accordance with the annual audit plan. The annual audit plan covers the major
active subsidiaries of the Group. The IAD reports directly to the ARC and provides the Board with reasonable assurance
regarding the adequacy and integrity of the systems of risk, governance and internal controls.
The Group’s risk management and internal control framework is made available on the Statement on Risk Management
and Internal Control of this Annual Report.
PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH

STAKEHOLDERS
COMMUNICATION WITH STAKEHOLDERS
The Board acknowledges the importance of timely and equal dissemination of all material business, corporate and
financial developments affecting the Group to shareholders and other stakeholders. Whilst the Group endeavours
to provide as much information as possible to its stakeholders, it is mindful of the legal and regulatory framework
governing the release of material and price-sensitive information.
The Board ensures that continuous disclosures made are effective and transparent whilst regular communication
with its stakeholders are connected through a variety of communication channels such as annual report, circular
to shareholders, press releases, announcements including quarterly and annual financial results, which provide
shareholders with an overview of the Group’s business and financial performances.
The Company maintains a corporate website at www.azrb.com which provides corporate and financial information
of the Group. Shareholders and the public can also direct their queries through the email contact provided in the
corporate website.
45
CONDUCT OF GENERAL MEETINGS
The Board recognises the AGM as a main platform for shareholders to engage with the Board and Senior Management
in a productive dialogue and to raise their concerns about the Group. All Directors of the Company were present at
the 22nd AGM held on 21 June 2019 to provide clear and meaningful response to shareholders’ questions. The Senior
Management, external auditors and adviser were also present to respond to any queries by the shareholders.
Shareholders have been provided with at least 21 days’ advance notice for the upcoming AGM to accord them with
adequate time to prepare and ultimately make informed decisions during the AGM. The notice of AGM outlines
the resolutions to be tabled during the said meeting and is accompanied with explanatory notes and background
information, where applicable.
All the resolutions set out in the notice of AGM shall be voted by poll. An independent scrutineer shall be appointed to
verify the results of the poll. The proceedings at the AGM were recorded in the minutes of meeting which a summary
of the minutes is made available on the Company’s website.
This Corporate Governance Overview Statement was approved by the Board of Directors of the Company on
30 September 2020.
GOVERNANCE DRIVEN
Statement of Directors’ Responsibilities

in Preparing the Financial Statements
The Directors acknowledge their responsibilities to prepare the financial statements so as to give a true and fair
view of the financial position of the Group and the Company as at 30 June 2020, and financial performance of the
Group and the Company for the financial period then ended in accordance with the Malaysian Financial Reporting
Standards, International Financial Reporting Standards, the Companies Act, 2016 (“Act”) and the Main Market Listing
Requirements of Bursa Malaysia Securities Berhad.
In the preparation of the financial statements, the Directors have:
ensured that applicable approved accounting standards have been complied with;
adopted suitable accounting policies and applied them consistently;
made judgments and estimates that are reasonable and prudent where needed;
prepared the financial statements on the going concern basis and disclose, as applicable, matters related to
going concern and using the going concern basis of accounting unless either intends to liquidate or to cease
operations, or have no realistic alternative but to do so; and
ensured that necessary internal controls are in place to enable the preparation of financial statements free from
material misstatement, whether due to fraud and/or error.
The Directors are responsible for ensuring that the accounting and other records have been properly kept in accordance
with the provision of the Act.
The Directors have overall responsibilities for taking such steps that are reasonably available to them to safeguard the
assets of the Group, and to prevent and detect fraud and other irregularities.
This Statement of Directors’ Responsibilities is made in accordance with a resolution of the Board of Directors dated
30 September 2020.
47
MEMBERS OF THE AUDIT AND RISK COMMITTEE
Chairman
Raja Tan Sri Dato’ Seri Aman bin Raja Haji Ahmad
Members
Tan Sri Dato’ Lau Yin Pin @ Lau Yen Beng

Datuk (Prof.) A Rahman @ Omar bin Abdullah

MEETINGS AND ATTENDANCE
During the financial period ended 30 June 2020, a total of 11 meetings were held and the details of attendance of the
members are as follows:-
Date of Meeting
2019 2020
30 28 28 29 29 29 30 29 22 27 29 Total
Members attendance
Jan Feb Mar Apr May Aug Oct Nov Jan Feb June
Raja Tan Sri Dato’ Seri √ √ √ √ √ √ √ x x √ √ 9/11
Aman bin Raja Haji Ahmad (79%)
Tan Sri Dato’ Lau Yin Pin √ √ √ √ √ √ x √ √ √ √ 10/11
@ Lau Yen Beng (89%)
Datuk (Prof.) A Rahman √ √ √ √ √ √ √ √ √ √ √ 11/11
@ Omar bin Abdullah (100%)
The Group Managing Director was invited to attend all the Audit and Risk Committee (“ARC”) meetings to facilitate
direct communications as well as to provide clarification on audit issues and the Group’s operations, if any. The
relevant person-in-charge of the respective division/project was also invited to brief the ARC on specific issues arising
from the audit reports or any matters of interest, if required. The Head of Internal Audit attended the ARC meetings by
invitation to present the internal audit findings report and also presented the internal audit plan and activities.
The external auditors were also invited to attend the ARC meetings to present their reports on the audited financial
statements. A separate meeting between the ARC and the external auditors without the presence of the Executive
Directors and Senior Management was held during the financial period to discuss on audit feedback.
GOVERNANCE DRIVEN
TERMS OF REFERENCE
The terms of reference establishes the membership, quorum, powers, authority, duties and responsibilities of the
ARC and is incorporated in the Board Charter which is accessible on the Company’s website at www.azrb.com.
The Nomination Committee ensures that the terms of office and performance of the ARC and each of its members are
being evaluated annually to determine whether the ARC and its members have carried out their duties in accordance
with their terms of reference.
SUMMARY OF ACTIVITIES
The duty and responsibilities of the ARC are in line with its terms of reference. During the financial period, the ARC
had timely reviewed and deliberated the following matters and reported the same to the Board for approval:
1. Financial Reporting
• Quarterly financial results and annual financial statements of the Company and the Group for the financial
period ended 30 June 2020
2. External Audit
• Re-appointment of external auditors and audit fees
• Scope of works and audit planning memorandum of the external auditors including audit strategy, audit
focus, evaluation of internal controls system and resources for the financial period ended 30 June 2020
• Final audit report together with the external auditors
• Met the external auditors without the presence of Executive Directors and Senior Management and discussed
matters arising from the audit process
3. Internal Audit
• Internal audit plan of the Company and its subsidiaries for year 2020
• Major findings of internal audit reports, recommendations in relation to weaknesses in the internal control
and corrective actions to be taken by Management
4. Recurrent Related Party Transactions (“RRPT”) of a Revenue and Trading Nature

• RRPT entered into by the Company and its subsidiaries with related parties and ensure disclosure
requirements of the Main Market Listing Requirements are adhered to.
• Reviewed the circular to shareholders in relation to the proposed renewal of existing shareholders’ mandate
for RRPT of a revenue or trading nature
49
5. Risk Management
• Risk Management Plan of the Company and its subsidiaries for the financial period ended 30 June 2020
• Quarterly Risk Management reports
6. Sustainability
• Sustainability Plan of the Company and its subsidiaries for the financial period ended 30 June 2020
7. Integrity
• Establishment of Anti-Bribery Management Systems for the Company and its subsidiaries
8. Annual Report
• Corporate Statements such as Corporate Governance Overview Statement, Statement on Risk Management
and Internal Control, Directors’ Responsibility Statement for the financial period ended 30 June 2020, Audit
and Risk Committee Report and Sustainability Statement
9. Corporate Governance
• Corporate Governance Report for the financial period ended 30 June 2020
INTERNAL AUDIT FUNCTION
The Group’s Internal Audit function is performed in-house by the Internal Audit Department (‘’IAD”) and is independent
from the main activities and operations of AZRB Group’s operating units. The IAD reports directly to the ARC and its
primary function is to assist in discharging the ARC’s duties and responsibilities. The main role of the internal audit
function is to undertake regular reviews of the Group’s systems of controls, procedures and operations so as to
provide independent and objective assurance to the ARC regarding the adequacy and effectiveness of governance, risk
management and internal control systems.
The Internal Audit activities carried out during the financial period are summarised below:
Prepared the annual audit plan for deliberation and approval by the ARC;
Performed 30 audit reviews on business divisions and projects to ascertain the adequacy and compliance of their
system of governance, risk management and internal control; and
Conducted 6 follow-up audits to determine the adequacy, effectiveness and timeliness of action taken by
Management on audit recommendations and provided updates on their status to the ARC.
GOVERNANCE DRIVEN
The results of the audit reviews were discussed with Management and subsequently, the audit findings including the
recommendations for improvement were presented to the ARC at scheduled meetings. In addition, the Internal Audit
function carried out follow-up reviews to ensure that corrective actions have been implemented in a timely manner
by Management and the results of such reviews are also periodically reported to the ARC. Although a number of
internal control weaknesses were identified, none of the weaknesses have resulted in any material breaches that
would require separate disclosure in this Annual Report.
The Head of IAD is Khairudin bin Haji Mohd Ali who has diverse professional experience in internal audit, risk
management and corporate governance fields. He is an associate member of the Institute of Internal Auditors
Malaysia, a member of the Malaysian Institute of Accountants and a member of the Malaysian Institute of Certified
Public Accountants. There are 8 internal auditors in the Group. The Internal Audit personnel on the engagement are
free from any relationships or conflict of interest, which could impair their objectivity and independence, and the
internal audit reviews were conducted using a risk based approach and were guided by the International Professional
Practice Framework. The total cost incurred for the Internal Audit function for the financial period ended 30 June 2020
was RM886,995.
51
UTILISATION OF PROCEEDS RAISED FROM CORPORATE PROPOSAL
There are no corporate proposals which have been announced by the Company but not completed as at the date of
this report.
AUDIT FEES*
A breakdown of fees for audit and non-audit services incurred by the Company and on group basis for the financial
period from 1 January 2019 to 30 June 2020 is set out under Note 8 of the Financial Statements of this Annual Report.
MATERIAL CONTRACTS OR LOANS WITH RELATED PARTIES
Save as those disclosed in the following recurrent related parties transaction of a revenue in nature, there were
no material contracts or loans entered into by the Company and its subsidiaries involving directors’ and major
shareholders’ interest either subsisting at the end of financial period from 1 January 2019 to 30 June 2020 or entered
into since the end of the previous financial year.
EMPLOYEES’ SHARE SCHEME (“ESS”)
The ESS was approved by the Company’s shareholders at the Extraordinary General Meeting held on 17 March 2014
and implemented on 18 August 2014 for a period of 5 years which expired on 17 August 2019. The ESS has been
extended for a further period of 5 years expiring on 17 August 2024. The ESS comprises ESS Options and ESS Share
Award.
(a) ESS Options and ESS Share Award granted up to the end of the financial period:
ESS Options ESS Share Award

Total Directors Total Directors
Granted - - - -
Forfeited 485,285 205,000 4,494,918 2,122,500
Exercised - - - -
Outstanding as at 30 June 2020 3,185,475 2,323,334 - -
Vested during the financial period 3,642,733 2,570,000 - -
Notes:
* The following particulars in relation to the audit and non-audit services rendered to the listed issuer or its subsidiaries for the financial
period:
(a) amount of audit paid or payable to the listed issuer’s auditors, stating the amount incurred by the listed issuer and the amount
incurred on a group basis respectively;
(b) amount of non-audit fees paid or payable to the listed issuer’s auditors, or a firm or corporation affiliated to the auditors’ firm,
stating the amount incurred by the listed issuer and the amount incurred on a group basis respectively. If the non-audit fees
incurred were significant, details on the nature of the services rendered. If no non-audit fees were incurred, a statement to that
effect.
GOVERNANCE DRIVEN
EMPLOYEES’ SHARE SCHEME (“ESS”) (CONT’D)
(b) ESS Options and ESS Share Award granted to Directors and Senior Management during the financial period and
since commencement of ESS:
During the financial period Since commencement of ESS

ESS ESS ESS ESS
Options Share Award Options Share Award
Maximum allocation (%) - - 74.17 -
Actual allocation (%) - - 74.17 -
(c) Non-Executive Directors granted with ESS Options during the financial period:
Amount of ESS Amount of ESS

Name of Director Options granted Options exercised
Raja Tan Sri Dato’ Seri Aman bin Raja Haji Ahmad - -
Tan Sri Lau Yin Pin @ Lau Yen Beng - -
Datuk (Prof.) A Rahman @ Omar bin Abdullah - -
Dato’ Sr. Abdull Manaf bin Hj Hashim - -
RECURRENT RELATED PARTY TRANSACTIONS
The value of recurrent related party transactions entered into by the Company and its subsidiaries during the financial
period which have obtained shareholder’s mandate in the previous AGM are qualified as follows:
Entered Period covered from Period covered from

by AZRB 1 January 2019 1 July 2019
Nature of the transactions and its to 30 June 2019 to 30 June 2020
with related party subsidiaries (RM’000) (RM’000)
(a) Purchase from subsidiaries of Chuan Huat
Resources Berhad:
(i) Chuan Huat Industrial Marketing Sdn Bhd AZSB 24,225 15,396
(ii) Chuan Huat Hardware Sdn Bhd AZSB 701 829
(b) Purchase from subsidiary of ZHSB:
(i) QMC Sdn Bhd AZSB 84 5
(c) Sales to the following companies which certain
directors have substantial financial interests
and are also directors:
(i) Kemaman Quarry Sdn Bhd ICSB (24) -
(ii) MIM Waste Services Sdn Bhd AZSB (125) (505)
53
Entered Period covered from Period covered from

by AZRB 1 January 2019 1 July 2019
Nature of the transactions and its to 30 June 2019 to 30 June 2020
with related party subsidiaries (RM’000) (RM’000)
(d) Insurance premium charged by ZHSB AZRB 31 50
AZSB 368 521
ICSB 19 39
AMSB - 28
PPSB 1 1
(e) Administrative services charged by ZHSB AZSB 62 121
ICSB 1 3
KTIP 1 3
(f) Rental of land charged by Tan Sri Dato’ Sri Haji AZSB 18 36
Wan Zaki bin Haji Wan Muda PPSB 222 303
(g) Transactions with MIM Protection Sdn Bhd:
(i) Security services costs AZSB 3,043 7,159
PPSB 6 -
Relationship of the related parties:
(i) Chuan Huat Resources Berhad - A company in which Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan
Muda had substantial equity interest.
(ii) Zaki Holdings (M) Sdn Bhd (“ZHSB”) - The holding company of Ahmad Zaki Resources Berhad (“AZRB”).
(iii) Kemaman Quarry Sdn Bhd - A subsidiary of ZHSB.
(iv) MIM Waste Services Sdn Bhd - A company in which Dato’ Sri Wan Zakariah bin Haji Wan Muda and
Dato’ W Zulkifli bin Haji W Muda have substantial equity interests
and are also Directors.
(v) MIM Protection Sdn Bhd - A company in which Dato’ Sri Wan Zakariah bin Haji Wan Muda and
Dato’ W Zulkifli bin Haji W Muda have substantial equity interests
and are also Directors.
(vi) Ahmad Zaki Sdn Bhd - AZSB
(vii) Inter-Century Sdn Bhd - ICSB
(viii) AZSB Machineries Sdn Bhd - AMSB
(ix) Peninsular Precast Sdn Bhd - PPSB
(x) Kemaman Technology & Industrial - KTIP
Park Sdn Bhd
GOVERNANCE DRIVEN
55
PERFORMANCE
DRIVEN
Chairman’s Statement
Management Discussion and
Analysis
GOVERNANCE DRIVEN
Chairman’s
Statement
Dear Valued
Shareholders,
On behalf of the Board of Directors (“the
Board”), it is my pleasure and privilege to
present the Annual Report and Financial
Statements of Ahmad Zaki Resources Berhad
(“AZRB” or “the Group”) for the 18-month
period ended 30 June 2020.
Raja Tan Sri Dato’ Seri Aman

Bin Raja Haji Ahmad
Chairman
57
OVERVIEW Malaysia was not spared from its effects. On 18 March

2020, the Government implemented the Movement
The last 18 months since the Group’s last Annual Report, Control Order (“MCO”) which stretched until 9 June 2020.
that for the year ended 31 December 2018 has been During this period, the whole country was effectively
a period of extreme contrasts. We entered the period under strict lockdown with no one, other than those on
by celebrating a contract win from Petroliam Nasional the frontline or providing essential services, allowed
Berhad (“Petronas”) for the refurbishment and upgrading to leave their place of residence to work or engage in
works at their office complex (“POC Project”) in Kerteh, recreational activities. The Group was not spared, with
Terengganu, worth RM150.5 million. However, the all activities, excepting that involving health and safety,
ongoing global trade disputes and a marked slowdown in at all its construction and property development sites
global economic growth put paid to any hopeful thoughts suspended. In terms of other Group activities, only our
of economic boom. Instead, 2019 saw the continued Concession Division, with its leasing and maintenance of
decline in the Malaysian stock market index which started IIUM Medical Centre in Kuantan, and Oil and Gas (“O&G”)
in 2018 following the shock May 2018 General Elections. Division, with its activities at Tok Bali Supply Base as
In particular, the construction industry in Malaysia saw well as its bunkering activities at Kemaman Supply Base,
very little activity in terms of roll out of new public sector operated at this critical moment, with both divisions
projects during this period as the Government of Malaysia being deemed essential services to the country.
(“Government”) grappled with the growing economic
issues affecting the country. As such, the POC Project Unlike in many other sectors, the nature of our activities
was our sole major contract win for the entire 18-month does not lend itself to allowing the Group to mobilise our
period ended 30 June 2020. In turn, our unbilled order staff to work from home as a substitute. As a result, for
book has dwindled down to RM1.6 billion as at 30 June the entire MCO period, the Group was only able to realise
2020 (2018: RM2.9 billion). minimal construction revenue and this had a profound
effect on the Group’s cash flow not only during the MCO
period but subsequent periods to that. Although the
Government identified the construction sector as one of
the first sectors to be allowed to return to work effective
from 4 May 2020, in actual fact, the Group only saw its sites
return back to full swing in June 2020. This was due to
various factors, including procedures required in getting
Government clearance to commence work as stipulated
in the Standard Operating Procedures (“SOP”) issued by
the Government, clearance from clients to recommence
work as well as the backlog of COVID-19 testing which
was also a compulsory requirement stipulated in the
Artist impression of POC Project in Kerteh, Terengganu SOPs.
In other sectors, the low crude palm oil (“CPO”) prices The MCO had a significant impact on the Group’s finances.
that prevailed for much of 2019 had a profound effect It is estimated that the MCO lockdown resulted in close
on the palm oil plantation sector, and unfortunately the to RM130.0 million in lost revenue across the Group.
Group also suffered from its effects. Finally, to compound Equally damaging is the loss of momentum at each of
matters for the economy, the onset of the COVID-19 our work sites of which its financial impact is not directly
pandemic which set in with devastating impact not only quantifiable. Based on all these factors, the Group posted
on the health of people but also the economies of every a net loss of RM111.2 million for the whole 18-month
single country in the world. period ended 30 June 2020.
GOVERNANCE DRIVEN
MITIGATING ACTIONS The current COVID-19 pandemic poses medium term

challenges for the national economy as many sectors
During this great period of uncertainty, the Board of the economy remains affected, thereby dampening
noted the Management’s efforts in addressing the key consumer spending. In terms of the Government, quite
issues impacting the Group. Immediately after the MCO a significant amount has been spent and will continue
was announced, the Management quickly formed a to be spent combating the pandemic and thus will face a
Special Task Force (“STF”) made up by all the division challenge in allocating spending for public infrastructure.
heads and members of the Senior Management as
well as representatives from the Board of Directors.
The STF met regularly online to discuss matters of
importance including safeguarding operations, cash flow
management and stakeholder engagement. Individually,
each division of the Group formed its own crisis teams
to act on their operational needs and issues and in turn,
reported back to the STF.
Resulting from these frequent consultations, the Group

was able to manage its affairs, in particular, managing its
cash flow requirements by successfully negotiating with
the majority of its lenders and creditors for a moratorium
or rescheduling of payments where available. I am Installing rebar base slab VC sectior at PNB118 Tunnels Project
pleased to report that all of our lenders were both helpful
and accommodative in ensuring the Group remains a That being said, the Group has started noticing a
going concern during this difficult period. This was made pick-up in construction tenders being called by the
possible by the sheer hard work of our Finance Division current administration. We are also encouraged by the
and the good relationship we have with all of our lenders. Government’s announcements of the need to roll out large
scale projects as a means to stimulate the economy. The
Group stands ready to take part and compete in the new
LOOKING FORWARD tenders being rolled out and is confident of our technical
and competitive abilities to land a few tenders, which will
The period from 1 January 2019 until now has been some help to keep us busy for the few years ahead.
of the most challenging periods the Group’s Construction
Division has ever been through. The Group is fortunate that
it entered this period with a healthy balance order book
that helped sustain the Group’s operations throughout
this period. Apart from the POC Project mentioned above
and the PNB118 Tunnels Project disclosed in our 2018
Annual Report, the landscape in terms of construction
projects has been the driest it has ever been since the
Global Financial Crisis of 2007-2008.
Tok Bali Supply Base

59
In terms of our O&G Division, whilst we have seen

encouraging growth in the activities at our Tok Bali
Supply Base, the COVID-19 impact on global oil prices
has resulted in the oil majors operating off the shores
of Peninsular Malaysia to pause and take stock of their
position momentarily. As a result, the major activities
that we expected to take place this year has been put
on hold for the time being. Nevertheless, we continue to
position our Tok Bali Supply Base as the base of choice to
serve the North Malay Basin and Malaysia-Thailand Joint
Development Area (“MTJDA”) in particular in this time of
dampened global oil prices.
East Klang Valley Expressway
In terms of our Plantation Division, we are encouraged
by the recovery of CPO prices from the lows of 2018 and
2019. This bodes well for our Plantation Division, which Finally in terms of our Concession Division, we look
admittedly has gone through a very rough patch due to forward to see the completion of our East Klang Valley
a combination of factors. We have recently restructured Expressway in mid-2021. As of the date of this report, we
the Division to address some of the weaknesses at the have finally regained the momentum of construction at
Division and are looking forward to better yields and the site. We are now working on the next phase for this
performance in the years to come. expressway with plans in place and submitted to take the
highway beyond its current terminus at Ukay Perdana
Our Property Division was significantly affected by the and therefore complete the Kuala Lumpur Outer Ring
pandemic and MCO. At Laman Temala (formerly Puncak Road system.
Temala), we are rushing the completion of our maiden
residential phase with handover to buyers targeted in
November/December 2020. Our maiden phase of 102 ACKNOWLEDGEMENT
houses has seen a very encouraging sales percentage
of 95% with a number of units currently in the process I would like to welcome on board, YBhg. Datuk Wira
of finalising sale. The pandemic has also affected our Azhar bin Abdul Hamid, who joined the Board of Directors
launching plans for new phases, both at Tiara Paka and of AZRB on 20 October 2020 as an Independent Non-
Laman Temala, which has been delayed to 2021. In the Executive Director. Datuk Wira Azhar is a Fellow of the
meantime, the current glut in high-rise residential units Association of Chartered Certified Accountants (“ACCA”),
in the Klang Valley has caused us to further delay our United Kingdom and a member of the Malaysian Institute
planned development at Kwasa Damansara. Whilst we of Accountants. He has held leadership roles in many
still firmly hold to the belief that Kwasa Damansara will be illustrious companies, this includes the role of Group
the next property development hot spot, the combination Chief Executive of Tradewinds Corporation Berhad,
of the COVID-19 pandemic and oversupply in the current Managing Director of Sime Plantations Sdn Bhd, Acting
market makes our current position the prudent position President and Group Chief Executive of Sime Darby
to be in. We continue to observe the market closely so as Berhad, Chief Executive Officer of Mass Rapid Transit
to spot the best window of opportunity for our proposed Corporation Sdn Bhd and Group Managing Director of
launch. Malakoff Corporation Berhad.
GOVERNANCE DRIVEN
Currently, Datuk Wira Azhar is the Chairman of FGV I would also like to register my deepest gratitude to all
Holdings Berhad as well as being a Director of Icon the people at AZRB and its Group of Companies for their
Offshore Berhad and Hume Industries Berhad, all dedication and commitment to the Group’s cause. I would
companies listed on the Main Market of Bursa Malaysia also like to take this opportunity to thank both YBhg. Datuk
Securities Berhad. (Prof.) A Rahman @ Omar Bin Abdullah and YBhg. Dato’
Sr. Abdull Manaf Bin Hj Hashim, who have both given their
Datuk Wira Azhar carries with him a vast wealth of notices to retire and not seek re-election as Directors of
knowledge and experience through his many leadership AZRB Group. Datuk (Prof.) A Rahman retires after nearly
roles in the past, and the Group looks forward to his 18 years being with the Group as an Independent Non-
counsel, advice and sharing for many years to come. Executive Director. In that time, he has been a steady
guiding hand in his role as the Non-Executive Chairman
of Ahmad Zaki Sdn Bhd, the Group’s main construction
APPRECIATION subsidiary, which had seen the Group undertake a myriad
of landmark projects like the Putrajaya Mosque, Menara
On behalf of the Board, I wish to express my sincerest Kerja Raya 2, IIUM Medical Centre in Kuantan as well as
gratitude and appreciation to the shareholders, various the Klang Valley Mass Rapid Transit projects. Dato’ Sr.
government agencies, clients, consultants, suppliers Abdull Manaf retires nearly four and a half years after
and business partners who have contributed significantly joining the Board. During his time on the Board, he has
to our success and for the continuous support and helped to provide valuable insight and advice, particularly
confidence in the AZRB Group. on contractual matters. Similarly, I would like to express
the Board’s deepest gratitude to YBhg. Dato’ Haji Mustaffa
Bin Mohamad, who had resigned as an Executive Director
of AZRB on 16 October 2020. Dato’ Mustaffa has been
the Group’s stalwart at its O&G Division, having almost
single-handedly brought about the success that is the
O&G Division today. He retires after 21 and a half years
of being on the Board. The Board wishes these three
doyens of their fields the very best of luck in their future
endeavours and the greatest appreciation for their
immense contribution for all their years of service to the
Group.
Mixed Development at Kampung Baru for UDA Legasi Sdn Bhd Lastly, I wish to place on record my deepest appreciation
to my fellow members of the Board, both at Group level
as well as the various subsidiaries for their wise counsel,
guidance and invaluable contributions.
Thank you.
RAJA TAN SRI DATO’ SERI AMAN BIN RAJA HAJI AHMAD
CHAIRMAN
MRT Line 2 Package S206 – UPM Station in progress
61
Management
Discussion
and Analysis
Dear Valued
Shareholders,
On behalf of the Senior Management of
Ahmad Zaki Resources Berhad (“AZRB”
or “the Group”), I am pleased to present
our report card for the 18-month
financial period ended 30 June 2020
(“2020”). 2020 has proven to be our most
challenging period for the Group and
indeed the world as a whole.
Dato’ Sri Wan Zakariah

Bin Haji Wan Muda
Group Managing Director
GOVERNANCE DRIVEN
Management Discussion and Analysis
Change Of Year End For the 18-month period ended 30 June 2020, the Group
recorded revenue of RM1.46 billion compared to RM1.23
Since I last reported to you in our 2018 Annual Report, billion for the 12-month year ended 31 December 2018
the Group had made the decision to change its year end previously. In gross terms, this represented an increase of
from 31 December to 30 June and thus resulting in this 18.7% but in pro-rated terms, it was a decrease of 20.9%
Annual Report for the 18-month period ended 30 June compared to 2018. Of the RM1.46 billion revenue recorded,
2020. Our decision to change our financial year end was the Engineering and Construction (“E&C”) Division led the
driven by wanting to extract the best value in our financial way with RM1.23 billion (2018: RM1.03 billion) followed by
reporting through accommodating our external auditors the Oil and Gas (“O&G”) Division with RM86.2 million (2018:
better. The traditional financial year end of 31 December RM46.6 million). The Concession Division contributed
as favoured by the vast majority of companies resulted in RM76.0 million in 2020 (2018: RM36.0 million), whilst the
external audit firms being supremely stretched in their Plantation Division and Property Division came in at RM46.8
commitments and we noted that we were not getting million (2018: RM106.5 million) and RM20.5 million (2018:
the best value for the amount of fees we were paying. By RM9.9 million), respectively. The Group’s profitability for
having a 30 June year end, we will be giving our auditors 2020 was severely impacted by the Government’s decision
more time and allow them to allocate more resources for to impose the Movement Control Order (“MCO”) from 18
their work on our Financial Statements. It is our aim that March 2020 in response to the COVID-19 pandemic that
with this change in year end, the quality of our financial swept into Malaysia starting in February. During the MCO
reporting will improve for the better over time. period until 29 April 2020, effectively no work was able to
be undertaken by the E&C and Property Divisions, which
severely affected the Group’s profitability and results. As
FINANCIAL REVIEW a whole, the Group made a total loss for the period of
RM111.2 million compared to a recorded profit in 2018 of
2020 has proven to be our most challenging period indeed. RM8.6 million.
We, as with the whole country, had entered the new
period with quiet optimism following the historic 2018 Engineering and Construction Division
general election results. However, our optimism slowly
dampened as the bearish sentiment both in the general The E&C Division remains the Group’s primary contributor
stock market and in particular, the construction industry, with recorded revenue of RM1.23 billion (2018: RM1.03
cast a gloomy cloud not just for AZRB but all our peers billion). Whilst it was pleasing to see the E&C Division
in the engineering and construction sector. With little to surpass the billion ringgit mark in consecutive financial
zero new public sector tenders and construction awards, periods, for 2020, it was a case of what could have been,
the Group has had to work through its existing balance if not for the effects of the COVID-19 pandemic. The
order book, the bulk of which had been accumulated prior imposition of the MCO to combat the growing pandemic
to 2018. To compound matters, the onset of the COVID-19 in March 2020 resulted in an estimated loss of revenue
pandemic in 2020 deeply affected the performance of not of about RM125.0 million up to 30 June 2020. This in
just AZRB but the whole Malaysian economy. turn, had a profound effect to the Division’s profitability
as cost continued to be incurred despite the absence of
work and revenue. All told, the Division recorded a loss
before tax of RM8.4 million for 2020 (2018: profit before
tax of RM54.2 million). Included in the current year loss
are adjustments for additional subcontractor claims
and potential liquidated ascertained damages as well
as potential non-recoverable loss and expense claims
for various completed projects totalling RM63.7 million.
63
Despite adjusting for the potential non-recoverability of Despite the financial impact, we are very grateful for the
claims, the Division is continuing to make best effort in prudent approach taken by the Government in combating
recovering what is contractually our right to payments. the pandemic. The strict SOPs have enabled our sites
to work purposefully and safely and we continue to take
As mentioned above, the pandemic had a profound effect heed of the Government’s advice in always adhering to
on the Division’s results. Even though the construction the established SOPs to ensure the pandemic remains
industry was one of the very first non-essential services under control.
industries allowed to return to work during the MCO
following Government announcement on 10 April 2020, Oil and Gas Division
the restrictions imposed initially plus the need to register
with the Government for clearance to commence work The O&G Division showed good growth in terms of
meant that much of April 2020 was lost to complying revenue with 2020 revenue at RM86.2 million (2018:
to procedural matters instead of actual work progress. RM46.6 million), with the increase mainly contributed by
As a further complication, strict Standard Operating our operations at Tok Bali Supply Base (“TBSB”). In terms
Procedures (“SOP”) being rolled out by the Government of Revenue, TBSB operations contributed about 45%
meant the Division had to tread carefully when opening (2018: 24%) of total division revenue. For this financial
its sites for work. On 28 April 2020, the Government lifted period ended 30 June 2020, we have seen TBSB continue
the restriction on half capacity work subject to adherence its growth trajectory. For 2020, TBSB recorded a total of
with SOP. Unfortunately, due to the large number of 951 vessel calls as compared to 235 vessel calls for the
requests by companies to start work, there continued 12-month financial year ended 31 December 2018. Of the
to be procedures in obtaining clearance to work from 951 vessel calls, 520 (2018: 141) were Offshore Supply
the Government or from clients. This, coupled with the Vessels with the remainder mainly comprised of fast
large backlog in mandatory COVID-19 testing for all crew boats. This demonstrates the growing confidence of
site workers, meant that even by end of May 2020, the the oil companies in using TBSB as the base of choice.
Division’s construction sites were still not at full capacity.
Further delays in the supply chain getting back to its feet

meant that the Division saw its construction sites only get
into full swing by end June and it was only in August 2020
where the Division regained the full pre-MCO momentum.
Tok Bali Supply Base
Swab test carried out at MSO Hulu Langat (KLORR Project)

GOVERNANCE DRIVEN
Despite the large increase in revenue, the Division only Plantation Division
showed a marginal narrowing of loss before tax to RM5.8
million (2018: RM5.8 million), approximating that of the The 18-month period ended 30 June 2020 was a period
previous financial year. A significant impact to the results where the Division found itself in a perfect storm that
was a RM7.8 million in adjustments primarily due to reflected itself in the Division’s financial performance.
depreciation amounts relating to prior years that were The recorded revenue of RM46.8 million for 2020 was in
previously not taken up, being fully accounted for in the contrast to the RM106.5 million recorded for 2018. The
current year. Without these adjustments, the Division low CPO prices from much of 2018, deteriorated further
would have been above breakeven level for 2020. for much of 2019 and caused a severe strain on the
Division to keep up with its obligations. In light of the low
As encouraging as the growth in TBSB has been, the CPO prices, the Division undertook a major reform and
operations at TBSB has yet to reach breakeven or restructuring of the organisation. Unfortunately, some
profitable levels. The Division had expected to see of this was met with resistance by the local workers
TBSB receive a boost in its operations through drilling and in the time taken to iron things out, the Division’s
campaigns around the North Malay Basin that had been productivity was severely hampered. Much of the issues
scheduled to take place in 2020. However, due to the shock were ironed out with the Division emerging leaner but
impact of the COVID-19 pandemic, which resulted in the due to other contributing issues, production throughout
severe drop in oil and gas prices, these campaigns have the period remained affected.
since been postponed to 2021/2022. TBSB is now working
hard discussing and negotiating with the oil companies The severe haze of mid-2019 also caused further
to prepare for the forthcoming drilling campaign in 2021. disruptions to harvesting activities compounded by
irresponsible open burning activities by the local
Concession Division populace on their local farmland, but which was within
our concession zone. Although the land subjected to
The Concession Division continued to be the Group’s burning was still land ‘owned’ by the local residents and
main shining star with revenue contribution of RM76.0 yet to be ‘released’ to our Division, the fact that this land
million in 2020 (2018: RM36.0 million) and profit before was still within our ‘concession’ area, caused the local
tax contribution of RM80.9 million (2018: RM43.8 million). authorities to order a suspension of work on our estate
Much of the additional contribution came about from whilst they conducted an investigation. Additionally, the
the revenue recognition for the supply of new medical fire also spread into parts of our estate which further
equipment to the Division’s main concession asset, IIUM complicated matters. Whilst the fire as a whole was
Medical Centre in Kuantan (“IIUM Medical Centre”). As in relatively quickly tackled, the subsequent events proved
previous years, the Division’s profitability continues to be disruptive particularly so as it occurred during the period
boosted through the recognition of accretion income of of peak crop with regards to our estate.
its long-term receivables.
Finally, the COVID-19 pandemic also had an effect on
the Division due to restrictions in bringing in trained
IIUM Medical Centre, Kuantan harvesters from other regions into our estate. Also, the
market reaction to the COVID-19 pandemic in Indonesia
caused wild fluctuations to the foreign exchange rate
of the Indonesian Rupiah, particularly against the US
Dollar. This in itself resulted in a net unrealised foreign
exchange loss of RM8.8 million, being recognised in the
Division’s loss before tax. As a whole, the loss before tax
in the Division in 2020 was RM59.4 million (2018: RM29.6
million).
65
Property Division For the 18-month period ended 30 June 2020, the
Division recognised a loss before tax of RM2.9 million
In terms of revenue, the Property Division showed good (2018: RM1.8 million).
growth with recorded revenue of RM20.5 million (2018:
RM9.9 million). This was mainly on the back of completion
of our Phase 1 residential development at Tiara Paka, in
Paka, Terengganu. Comprising of a total of 83 residential
units, the Division recorded a healthy sales take up rate
of 94%. The bulk of the sales here comprised of houses
sold under the Projek Perumahan Penjawat Awam
Malaysia (“PPAM”) or Government Officers Housing
Project scheme, which by legal form, is on the build and
sell model. As a result, the bulk of the revenue and profits
could only be recognised upon vacant possession and
thus were only recorded in the current financial period.
Residence Inn Cherating
SEGMENT REVIEW AND PROSPECTS
Engineering and Construction Division
In working through our balance order book, the Division

had in 2020, delivered a project that has since taken
its place as one of the most iconic landmarks in Kuala
Lumpur. Dubbed the Saloma Link or Pintasan Saloma,
Aerial view of Tiara Paka
it is a pedestrian walkway linking the Kampung Baru
area to the Kuala Lumpur City Centre area. Spanning 69
metres over the Klang River and Ampang-Kuala Lumpur
Notwithstanding the successful delivery of the first Elevated Highway (“AKLEH”), the bridge’s showpiece is
phase of residential development at Tiara Paka, the its architecture inspired by the traditional sirih junjung
Group’s profitability was affected by a number of factors. or betel nut leaf arrangement. The entire structure is
Firstly, the Division took the decision to write down the beautifully lit by LED lights capable of displaying multiple
carrying value for some of its older unsold stock of colours and images, and has proven to be a major crowd
industrial properties. This is in line with the extremely attraction, especially at night. The total project was
bearish property market, particularly for certain type of valued at close to RM31.0 million, and whilst it has not
industrial developments. The other major factor affecting been one of our largest projects, it certainly has been one
the Division was due to the performance of the Division’s of our most iconic projects and we are proud to have been
hotel business, which was severely affected by the associated with the project.
COVID-19 pandemic. As a result of the pandemic and the
Government’s MCO measures, the Division’s hotel was
unable to cater to any guest from the outset of the MCO
on 18 March 2020 right until the financial period end.
GOVERNANCE DRIVEN
Aside from the POC Project, the Division was kept busy
churning through its sizeable balance order book, the
bulk of which consisted of projects obtained prior to
2018. For the whole 18-month period ended 30 June
2020, there were very few public works tenders being put
out to the market. Due to the bearish property market,
private commercial tenders were also in limited supply.
The rapid onset of the COVID-19 pandemic saw planned
tenders for new construction works being further pushed
back as the Government acted to limit the spread of
the pandemic and keep the nation safe. I am pleased
to note that the Government has been successful in
combating the COVID-19 pandemic, and that the Division
has now started to see a good volume of public works
tenders being rolled out. The Division has been actively
Pintasan Saloma participating in these tenders and is confident in our
ability to obtain a few over the next few months. We are
greatly encouraged by the current Government’s position
The 18-month period ended 30 June 2020 was not a
in prioritising the construction industry as a means to
great period for the Division in terms of new project
drive economic growth following the sharp slowdown due
awards. The only project the Division managed to obtain
to the pandemic in mid-2020. We are therefore bullish
was for the “Proposed Refurbishment and Upgrading
about our prospects in adding to our balance order book
Works to the Existing Petronas Office Complex (Block A)
going forward.
and Petronas Operations (Block C), Infrastructure and
Landscaping Works on part of Lot 52271 and 52272 in
Oil and Gas Division
Kerteh, District of Kemaman in Terengganu Darul Iman
(“the POC Project”). The POC Project was awarded by
The O&G Division continued its growth trajectory as our
Rantau Properties Sdn Bhd, a wholly owned subsidiary of
TBSB further established its value proposition as the
Petroliam Nasional Berhad (“Petronas”) and was valued
supply base of choice for the North Malay Basin fields.
at RM150.5 million.
Of particular note was a special contract undertaken
in September 2019, where an oil company decided to
perform a shutdown maintenance program from the
base. The program was budgeted to take 14 days to
perform but due to the logistical superiority of TBSB, the
program was completed in a record 9 days thereby saving
the oil company millions of ringgit in costs.
Railing work for roof beam area at POC Project

67
The Group has continued to invest in the base in its bid to The Division’s other main asset is still under construction,
attract more volume and customers to the base. In 2020, which is the East Klang Valley Expressway (“EKVE”). Its
TBSB signed an agreement with another Production completion is highly anticipated as many look to EKVE
Sharing Contract (“PSC”) operator for their use of TBSB as a means to relieve the growing traffic congestion
to support their operations in the Malaysia-Thailand Joint on the eastern corridor of Greater Kuala Lumpur. Its
Development Area (“MTJDA”). With this agreement, the construction is progressing well, although a few technical
new PSC operator is both able to use TBSB officially and and land dispute issues have resulted in the construction
will be looking to conduct more operations out of TBSB in of EKVE to be pushed back a bit. Additionally, the lost
order to leverage on our competitive advantages and thus time due to the COVID-19 pandemic and resultant MCO
realise cost savings. We are pleased to inform that TBSB would mean EKVE being open to public use in mid-2021.
continues to engage with existing and potential main PSC
operators with the aim of negotiating long-term basing
commitments with these main PSC operators.
The COVID-19 pandemic caused a short-term panic in the

global oil prices and as a result of the continuing economic
uncertainty due to COVID-19, the main oil companies
have postponed their planned drilling campaigns to
2021 at the earliest. Nevertheless, the Division remains
optimistic of its future chances securing the right to host
the drilling campaign operations for these PSC operators
as well as to attract more volume to utilise the base.
Concession Division
The Concession Division continues to be a shining light

in terms of financial contribution. Its primary concession
asset, the IIUM Medical Centre remains steady with its
strong financial contribution. As the IIUM Medical Centre
matures as the medical centre of choice in the east
coast of Peninsular Malaysia, particularly in Kuantan, Concreting diaphragm in progress at EKVE
so is the need for expanding offerings and services. As
the asset owner, the Division is in constant discussion
with the operator on how best to undertake these future
expansions.
East Klang Valley Expressway

GOVERNANCE DRIVEN
Plantation Division The Division has plans in place to launch a new phase of
As narrated previously, the Plantation Division ran into residential housing at both Tiara Paka and Laman Temala
fairly significant headwinds during the 18-month period but has decided to postpone these launches to around
ended 30 June 2020. I am pleased to say that the Group mid-2021 due to the current uncertain economic climate
has addressed many of the issues and are continuing to that has impacted property development rather severely.
work hard in addressing the remaining ones. Of major
note, the Division has put in place a major cost realisation
exercise. It has consolidated both its corporate and
operational premises at its estate in Kalimantan Barat,
Indonesia. The Division has also seen a change of the
guard in terms of divisional and operational leadership.
In September 2020, we have put in place a new President
Director who is empowered to make the necessary
operational improvements and we are pleased to report
that we have already started to see quick wins on the
ground and are optimistic that things will continue to
improve in the near future.
Property Division
Laman Temala in Marang, Terengganu
For the 18-month period ended 30 June 2020, the
Division handed over vacant possession for its first
phase of residential development at Tiara Paka in With regards to the Division’s hotel property, the COVID-19
Terengganu. Comprising of 83 units, the phase has pandemic and MCO lockdown severely impacted the
recorded 94% completed sales with the remaining units operations of the hotel as the government closed the
garnering interest from prospective buyers in the area. hospitality industry during the MCO period. However, with
The Division is also currently completing its first phase the Government having relaxed the MCO and replaced
of residential development at its new township, Laman it with the Recovery MCO (“RMCO”), the hotel has seen
Temala (formerly Puncak Temala) in Marang District, a boost in bookings for the remainder of 2020 as local
Terengganu. The new township is located near the town Malaysian tourists flock to local resorts and destinations
of Ajil, Terengganu and is strategically located with the for their holidays as our international borders remain
Ajil interchange for the East Coast Expressway a mere closed to overseas travel by Malaysians. With this, the
5 kilometres away. Comprising of 102 units, the first Division expects a better performance from the hotel for
phase has seen 95% take up rate in terms of completed the financial year ending 30 June 2021.
sales with the remaining units garnering keen interest
as the development nears completion. Scheduled for
handover to house buyers in November/December 2020,
the completion of this development is slightly delayed
having been affected by the COVID-19 pandemic and MCO
lockdown in the whole country.
69
APPRECIATION
The MCO lockdown had a major impact on the Group’s

financial well-being and in particular its cash flow. With
effectively very little revenue to be recognised and earned
during the lockdown, the Group would not have been
able to pull through if it were not for the support of the
whole AZRB family. During the time of our greatest need,
every member of the AZRB family from the clerks to the
directors sacrificed some portion of their pay in a bid to
reduce the strain on the Group. For that, the Directors
and Senior Management of AZRB are greatly thankful to
everyone in the AZRB family for making that sacrifice. As
always, I would also like to express the Group’s deepest
gratitude to all in the AZRB family for their continued
efforts, dedication, commitment and personal sacrifices
for the betterment of the Group.
I would also like to thank all our bankers and financiers

who came to us with the sincerest aim of helping the
Group ride through the COVID-19 lockdown storm. These
noble financial institutions worked hand in hand with the
Group Finance team to help structure our borrowings so
as to enable the Group to ride out the worst of the storms.
Finally, we express our sincerest appreciation to the

shareholders, various Government agencies, clients,
consultants, suppliers and business partners who have
been pivotal to our success and look forward to their
continued support and confidence in the AZRB Group.
Thank you.
DATO’ SRI WAN ZAKARIAH BIN HAJI WAN MUDA

GROUP MANAGING DIRECTOR
GOVERNANCE DRIVEN
71
SUSTAINABILITY
REPORT
Sustainability Statement
GOVERNANCE DRIVEN
Outstanding
order book of
5-star
MSM 1: SHASSIC Award
Enhancing RM 1.6 billion For BBCC and
Economic
SUSTAINABILITY
(as of 30 June 2020)
UTP2 Projects
Value
PERFORMANCE ESG rating for PLCs Completion construction of

assessment by
FTSE Russell -
SLINK (Feb 2020)
Customer satisfaction score FTSE4Good Bursa
Embarked our journey for
>75% Malaysia
MSM 2:
(MRTS206, PNB, SLINK, TGLK,
3-star MS ISO 37001:2016
TBSB) Anti-Bribery
Promoting (out of 4-star)
Management Systems
Innovation
& Delivering >80%
Excellent (PNB118, TGLK, KLORR
Services average score P3, MRT S206, POC) 100%
Locally sourced
construction materials
Invested in the latest Innovation Features (Concrete, reinforcement bar,
MSM 3:
& Technology Strengthening
common clay brick, etc.)
(BIM, IBS, System Scaffolding,

Drones, Vessels’ Communication,
Our Supply
Chain
Adopted JDE
Continuous Steriliser) To optimise supply
chain management
MSM 4: Cultivating Healthy and Safe

Workplace & Reducing Environmental >1,200
Footprint participation of staff
in KSR activities
Improved MSM 5:
8,740kg worth air & water* quality by Empowering
>RM2,400 >20% Our People & 108 training session worth
Enriching Local
except UTP2 & KLORR
>RM133,000
*
of recyclable materials during Community

Sustainable Office Challenge
3 completed
projects
& Contributed almost
Reduction of >3% 4 ongoing 53% RM 150,000
projects Involvement
of electricity consumption for surrounding
for 3 consecutive years of woman in
communities
(at Menara AZRB) Zero incident management
and CSR activities
cases at TGLK
73
ABOUT THIS SUSTAINABILITY STATEMENT
Background
This is our third year of publishing Sustainability Statement that summarises AZRB’s performance from the triple
bottom-line perspective of Economic, Environmental and Social (“EES”) pillars.
During the previous financial year, the Group introduced Sustainability Policy and mapped the Material Sustainability
Matters (“MSMs”) with the United Nations Sustainability Development Goals (“UNSDG”). In this reporting period, we
made several additional enhancements to reflect our growing interest in translating sustainability within the AZRB
ecosystem:
Scope of Reporting – Oil and Gas (“O&G”) Division is now included in this reporting period, together with
Engineering and Construction (“E&C”) Division and Plantation Division.
Material Sustainability Matters – the previous 20 MSMs (as disclosed in the previous reporting year) are now
regrouped and renamed into 5 MSMs for better clarity and wider coverage of the disclosure.
Reference and Guidelines – Sustainability initiatives and disclosures are aligned with the Global Reporting
Initiative (“GRI”) Standards, as well as Bursa Malaysia Sustainability Reporting Guide. The FTSE Russell ESG
Rating indicators have also been incorporated into the Company’s EES assessment.
Sustainability Performance – Key Performance Indicators (“KPIs”) are introduced for tracking of our sustainability
performance.
Sustainability Strategy – Sustainability Compass has been incorporated into Sustainability Framework with
enhancement in the Stakeholder Engagement Mapping.
Scope of Sustainability Statement

The projects that have been discussed in AZRB’s Sustainability Statement for the 18-month financial period from 1
January 2019 to 30 June 2020 are listed below:
Division Project/Company Description Location

E&C PJHZ Two blocks of office buildings, retail spaces, external Precinct 1, Putrajaya
works, basement parking and access road
UDA Mixed development project of residential and office Kampung Baru,
tower with basement carpark Kuala Lumpur
PNB 35-storey office block and 50-storey hotel tower Jalan Sultan Ismail,
Kuala Lumpur
UTP2 Academic building for Faculty of Geoscience & Universiti Teknologi
Petroleum Engineering and TNB33kV substation Petronas,
Tronoh, Perak
POC Petronas office complex and Petronas 1 operations Kerteh, Terengganu
complex, new annex building, infrastructure and
landscaping works
SLINK Combined pedestrian and bicycle bridge across the Kampung Baru,
Klang River, joining Kampung Baru and Kuala Lumpur Kuala Lumpur
City Centre
GOVERNANCE DRIVEN
ABOUT THIS SUSTAINABILITY STATEMENT (CONT’D)
Scope of Sustainability Statement (Cont’d)
Division Project/Company Description Location

E&C BBCC Substructure and PPU works of BBCC mixed Bukit Bintang,
(Cont’d) development project Kuala Lumpur
KLORR Dual two-lane East Klang Valley Expressway (EKVE) Sungai Long, Kajang
with a total length of 39.66 kilometres to Ukay Perdana,
Ulu Klang, Selangor
PNB118 Construction of Jalan Hang Jebat, Jalan Kenanga and Jalan Hang Jebat,
Chin Woo Tunnels and associated works of PNB 118 Kuala Lumpur
MRTV202 Viaduct guideway and other associated works from Kepong,
Persiaran Dagang to Jinjang Kuala Lumpur
MRTS202 Elevated stations and other associated works at Kepong Kepong,
Sentral, Metro Prima, Kepong Baru and Jinjang Kuala Lumpur
MRTS206 Elevated stations and other associated works at Seri Kembangan,
Serdang Raya (South), Seri Kembangan and UPM Selangor
TGLK Dual two-lane bridge across Sungai Kuantan to connect Kuantan,
Kuantan City and Tanjung Lumpur Pahang
O&G TB Supply Base Integrated support services and facilities for oil and gas Tok Bali,
Sdn Bhd (“TBSB”) industry in the offshore Peninsular Malaysia and Gulf of Kelantan
Thailand
Inter-Century Sdn Supply of marine fuel products and lubricants at Kemaman,
Bhd (“ICSB”) Kemaman Supply Base on the O&G platforms operating Terengganu
in offshore East Coast of Peninsular Malaysia
Plantation PT Ichtiar Gusti Operation of palm oil plantation – estates and mill Landak, West
Pudi (“PTIGP”) Kalimantan, Indonesia
Table 1: Scope of Sustainability Statement
Statement Period
On 22 November 2020, the Company announced its financial year end change from 31 December 2019 to 30 June 2020.
Accordingly, all disclosures in this Statement are as per the Company’s new financial period i.e. 1 January 2019 to 30
June 2020 (18 months), unless otherwise stated.
Statement References and Guidelines

Bursa Malaysia Sustainability Reporting Guide
Global Reporting Initiative (“GRI”) Standards
United Nations Sustainable Development Goals (“UNSDGs”)
FTSE4Good Index Series
75
Contact Us
We welcome your feedback and encourage you to read this Sustainability Statement together with the Management
Discussion and Analysis section in this 2020 Annual Report to obtain a more comprehensive view and understanding
of our sustainability journey and value creation process during the period under review.
As we believe that sustainability is an inclusive journey, the views and insights from our stakeholders are important
in ensuring that we continue to deliver sustainable values. Should you have any comments or suggestions on our
Sustainability Statement, kindly contact us at the following email address: [email protected]
SUSTAINABILITY AT AZRB
Commitment to Sustainability
At AZRB, we define sustainability as a commitment to managing the resources, assets and values that we have now,
whilst ensuring that we are able to meet the needs of the future generation. We believe that sustainability can be
achieved by balancing the needs of Nature, Economy, Wellbeing and Social – N.E.W.S.
In ensuring sustainable returns, we believe that responsible corporate practices play a significant role, as we always
aim at doing things right the first time. Guided by our Sustainability Framework and Sustainability Policy, we continue
to embed sustainability in the manner we conduct our businesses.
Reducing Environmental
VISION Footprint
Transforming the future
through the delivery of [N] ature
sustainable solutions and
innovation today
MISSION
Operating our business in
a responsible and ethical
manner, for the best [W] ellbeing [E] conomy
interest of our customers, Cultivating a Enhancing Economic
employees, community and Healthy & Safe Value
shareholders Workplace
[S] ocial
Enhancing Local Community
Figure 1: Sustainability @ AZRB

GOVERNANCE DRIVEN
SUSTAINABILITY AT AZRB (CONT’D)
Commitment to Sustainability (Cont’d)
Proactively and continuously Set clearly defined targets

Our Sustainability Policy is assess and address significant and measuring and
based upon the following economic, environmental and monitoring sustainability
principles: social risks and the impact of performance to support
our operations, and integrate continual improvement
these considerations into
business planning, decision-
making and implementation
Explore ways to improve
processes that ensure
efficiency in all operations
sustainable outcomes
Comply with relevant Continuously maintaining

legislations, standards, communication with
policies and procedures the stakeholders on its
corporate footprint in the
economic, environmental
Conduct business activities and social realms
in an ethical and transparent
manner
Figure 2: AZRB Sustainability Policy
Sustainability Governance
Our sustainability efforts are governed through our corporate structure with ultimate responsibility coming from
our Board of Directors; which provides oversight on the Group’s sustainability performance. The Group Managing
Director (“GMD”) together with the Deputy Group Managing Directors (“DGMDs”) oversee the implementation of the
Group’s sustainability approach and ensure that key targets are being met with the support of Senior Management
and all of our employees.
77
Board of 1. Oversee the overall Group Sustainability Strategy and its performance
Directors 2. Set the direction for sustainability agenda for the Group and provide sponsorship
3. Approve the Sustainability Statement
Audit and Risk 1. Review and approve the Group Sustainability Strategy
Committee 2. Recommend to the Board of Directors on Sustainability Statement, policies, standard
operating procedures and budget for approval
Group Managing
Director & Deputy 1. Ensure the implementation of Group Sustainability Strategy are properly conducted
Group Managing 2. Ensure the Group’s compliance towards related sustainability policies and standard
Directors operating procedures are achieved
1. Implement and deliberate the Group Sustainability Strategy for managing Material
Sustainability Sustainability Matters
Working 2. Review the deliberated sustainability data and provide reports to the GMD/DGMDs on
Committee periodical basis
3. Recommend to GMD/DGMDs on sustainability policies, standard operating procedures
and budget
1. Coordinate and monitor all sustainability activities by referring to the sustainability

KPIs and targets
Sustainability 2. Prepare the Sustainability Statement in accordance with Listing Requirement by Bursa
Department
Malaysia and other references and guidelines
3. Prepare and maintain the sustainability policies, standard operating procedures and
budget
Figure 3: Sustainability Governance

GOVERNANCE DRIVEN
SUSTAINABILITY AT AZRB (CONT’D)
Sustainability Journey
Since the establishment of AZRB’s Sustainability Department in 2017, our sustainability journey is a growing and
thriving process. We are proud to announce that we have established the foundation of the sustainability governance,
strategy and action plan that have positioned AZRB at a higher level of managing our business operation in a more
responsible manner.
20 • Published inaugural
20 • Established
20 • Set Sustainability KPIs
17 18 19
Sustainability Sustainability Policy and targets across the
Statement • Adopted Bursa Group
• Established Malaysia Sustainability • Conducted
20
governance structure Reporting Guide, sustainability
and sustainability GRI Standards and engagement
framework UNSDGs programmes
20
• Adopted GRI G4 • Established materiality • Focused material
guidelines matrix and mapped to sustainability matters
• Conducted materiality UNSDGs
assesssment
Figure 4: Sustainability Journey
MATERIALITY REASSESSMENT
Reviewing Material Sustainability Matters (MSMs)

We have identified and prioritised the MSMs that are significant to both our stakeholders and to our business. Managing
the MSMs is crucial in achieving our long-term success.
In our previous Sustainability Statement, we identified 20 MSMs based on the survey conducted with the internal
stakeholders of AZRB. In this reporting period, we revisited these MSMs and some of the MSMs have been regrouped
and renamed for better clarity and wider coverage of the disclosure. The changes are as follows:
2018 MSMs 2019/2020 MSMs

Economic and Business Performance
Branding and Reputation Economic and
Corporate Governance Business Performance
Business Ethics
Customer Satisfaction
Product Quality Quality and Innovation
Green Buildings
79
2018 MSMs 2019/2020 MSMs

Supply Chain Management Supply Chain Management
Material Waste Management
Energy Conservation
Water Management
Air Quality Health, Safety and Environment
Regulatory Compliance
Protecting Biodiversity
Occupational Health and Safety
Diversity and Inclusivity
Training and Career Development
Diversity, Inclusivity and
Employee Benefits
Social Justice
Protecting Labour Rights
Community Engagement
Table 2: Revision of MSMs
Defining Material Sustainability Matters (MSMs)
MSMs Definitions Indicators

Economic Efforts to contribute in significant infrastructure · Market Presence
and Business investments and services development that improve · Economic Performance
Performance community welfare and local economies. This also · COVID-19: Protecting Our
includes revenue generated by division, secured Business
contracts or received awards and efforts to maintain · Indirect Economic Impacts
the highest standard of integrity and professionalism in · Awards, Recognition and
its business dealings Achievement
· Corporate Governance
Quality and Efforts to embrace innovation by using tools or · Integrated Management
Innovation technology in business operation that enable efficiency, System
productivity or promote cost saving. This also includes · Customer Satisfaction
initiatives conducted to meet clients’ expectations of · Quality
our products or services, and efforts to promote quality · Innovation Features and
within our stakeholders Technology
Supply Chain Efforts to identify and monitor the Group’s procurement · Procurement Practices
Management practices that have potentially caused or contributed to · Local Supplier
negative impacts in the supply chain · JD Edwards Enterprise
Resources Planning (“ERP”)
System
GOVERNANCE DRIVEN
MATERIALITY REASSESSMENT (CONT’D)
Defining Material Sustainability Matters (MSMs) (Cont’d)
MSMs Definitions Indicators

Health, Safety Efforts to create a healthy and safe working environment · HSE Policy and Certifications
and Environment for our workers and staff, together with efforts to · HSE Committee
(“HSE”) reduce negative environmental impacts in the areas in · Compliance Registry
which the organisation operates in. This also includes · HSE Training and Competency
compliance with applicable laws and regulations. · Health and Safety Matters
· Environmental Matters
· Security and Assets
Diversity, Efforts to create a positive working environment that · Employees Distribution
Inclusivity and embraces diversity and mutual respects. This also · Staff Welfare
Social Justice includes efforts to attract and retain talent by providing · Human Rights
comprehensive benefits, rewards, and capacity · Training and Career
building. Engaging our employees and communities Development
through Kelab Sukan dan Rekreasi AZRB (“KSR”) and · KSR and CSR Activities
Corporate Social Responsibility (“CSR”) activities, · Community Outreach
respectively. Programmes
Table 3: Definition and Indicators of MSMs
Summary of KPI Target and Achievement
Revisit MSMs KPI Target Achievement

MSM 1: Minimum 2 initiatives taken per 1. Secured a contract value of RM150.5 million for POC
Economic year by AZRB Group to contribute project in February 2019
and Business to local economy/community 2. Completed Saloma Link (“SLINK”) project in
Performance February 2020. This project has created better
connectivity (shorter distance) between Kampung
Baru and Kuala Lumpur City Centre (“KLCC”)
3. Submitted detailed Environmental, Social and
Governance (“ESG”) disclosures for FTSE Russell
assessment and scored 3-star rating (out of 4-star)
with overall ESG Rating of 2.1 (out of 5.0) for
FTSE4Good Bursa Malaysia as of June 2020
81
Revisit MSMs KPI Target Achievement

MSM 2: Minimum 2 initiatives taken per 1. Conducted customer satisfaction survey at all E&C
Quality and year by AZRB Group to improve projects and TBSB
Innovation quality of deliverables and 2. Conducted AZRB Internal Quality Assessment
constantly innovate to promote (“AIQA”) on quarterly basis for all E&C projects
operational efficiency 3. Applied Building Information Modelling (“BIM”),
Industrialised Building System (“IBS”) and system
scaffolding in E&C projects
4. Installed Automatic Identification System (“AIS”)
detection and buoy as barricade at TBSB
5. Use of continuous steriliser technology for mill at
PTIGP
MSM 3: Minimum 2 initiatives taken per 1. Conducted performance evaluation for sub-
Supply Chain year by AZRB Group to promote contractors, suppliers and consultants on an annual
Management sustainable procurement basis
practices 2. Adopted ERP System to optimise our supply chain
management performance
3. Concrete, reinforcement bar, common clay brick
are 100% locally sourced at all E&C projects
MSM 4: Minimum 2 activities conducted 1. Conducted a total of 365 HSE training sessions at
Health, Safety and per year by AZRB Group to Menara AZRB and E&C projects as of June 2020
Environment cultivate a health, safety and 2. Conducted emergency drill at all E&C projects
environment awareness culture except UDA
at AZRB 3. Conducted HSE campaign at MRT V202, MRT S206,
POC, TGLK, UDA and UTP2
4. Conducted ‘You See You Act Campaign’ at TBSB
5. Performed environmental monitoring at all projects
on a periodical basis
6. Conducted Sustainable Office Challenge
MSM 5: Minimum 2 engagement activities 1. Conducted weekly KSR activities at Menara AZRB
Diversity, Inclusivity or initiatives conducted per year and E&C projects
and Social Justice by AZRB Group with internal and 2. Contributed almost RM150,000 for community
external stakeholders outreach programmes
3. Contributed more than RM52,000 for zakat
contribution – aid underprivileged community
4. Sponsored more than RM12,000 for excellent
students and RM5,000 for Back to School program
5. Donated RM1,600 to orphans under Pertubuhan
Rahoma Darul Fakir Malaysia during AZRB’s Hari
Raya Open House 2019
Table 4: Summary of KPI and Target

GOVERNANCE DRIVEN
STAKEHOLDER ENGAGEMENT MAPPING
Our stakeholders have vested interests in the manner the Group addresses their respective concerns. We aim to
maintain our relationship with the stakeholders by not putting aside their concerns in our decision-making process.
Through our sustainability assessment, we are able to identify and engage our relevant stakeholders more effectively.
Different divisions and projects offer different strategies in addressing stakeholders’ concerns, as tabulated below:
Engagement Channel Stakeholders’ Company’s Relevant

Stakeholders
(Frequency) Concerns Expectation Sections
Board of · Board Meetings · Growth and strategic · Set the strategic · Financial Statements
Directors (Quarterly) direction of the Company direction of the · Corporate
· Ongoing · Group’s financial Group Governance
communications performance · Sustainability
(Periodic) · Governance, risk and Statement
· Directors’ trainings control · Performance Driven
(Throughout the year) · Economic, Environmental
· General Meeting and Social risks and
(Annually) opportunities
Shareholders · Financial results · Group’s financial · Continual · Financial Statements
and Investors announcement performance investment · Corporate
(Quarterly) · Corporate governance, Governance
· General Meeting laws and regulations, · Sustainability
(Annually) compliance, ethical Statement
· Annual Report business conduct, risk · Performance Driven
(Annually) management
· Corporate Website · Mergers and
(Periodic) acquisitions, new
· Press Release (Periodic) business opportunities
· Group’s position within
the industry
Government · Regular meetings with · Approval and permit · No stop work · Sustainability
Agency/ regulators (Periodic) · Laws and regulations order Statement:
Regulators/ · Regular consultations compliance · No compound/ (i) MSM 1: Economic
Local (Periodic) · Annual reporting penalty and Business
Authority · Site inspections/audits · Contributions to Performance
(Periodic) the economy, local (ii) MSM 4: Health,
· Reporting i.e. community Safety and
monitoring reports · Labour practices, Environment
(Periodic) environmental and (iii) MSM 5: Diversity,
health issues Inclusivity and
Social Justice
83

Stakeholders
(Frequency) Concerns Expectation Sections
Clients/ · Feedback and enquiry · Progress completion of · Project delivered · Sustainability
Customers templates (Periodic) project and accepted by Statement:
· Client satisfaction · Quality of deliverable client (i) MSM 2: Quality
survey (Annually) · Health, safety and · Payment certified and Innovation
· Regular meetings with environmental and paid (ii) MSM 4: Health,
clients (Periodic) compliance · Continuity Safety and
· Site visits (0ngoing) in business Environment
· AIQA assessments partnership
(Quarterly)
Employees · Training calendar · Career development · Deliver work on · Sustainability
(Throughout the year) · Employees training/ time Statement:
· On-site work safety knowledge and skills · Knowledge (i) MSM 4: Health,
training (Periodic) enhancement sharing among Safety and
· Kelab Sukan dan · Safety and health at employees Environment
Rekreasi (throughout workplace · Teamwork (ii) MSM 5: Diversity,
the year) · Work-life balance Inclusivity and
· Team building activities · Employees benefits and Social Justice
(as and when required) rewards
· Staff e-Portal (0ngoing) · Attractive remuneration
· Annual performance · Diversity and inclusivity
appraisal (Annually)
· Town hall sessions
(Periodic)
· Engagement and
dialogue sessions
(Ongoing)
Vendors/ · Contract negotiations · Cost of services · Continuity · Sustainability
Suppliers/ and bidding · Quality and timely in business Statement:
Sub- opportunities (as and delivery partnership (i) MSM 3:
contractors when required) · Compliance issues · Works completed Supply Chain
· Suppliers/ sub- · Contractual terms on time Management
contractors audit and · Knowledge transfer and (subcontractor)
evaluation (Annually) capacity building · Material delivered
· Vendor registration · Fair procurement as per schedule
screening (pre- process (supplier)
qualification of suppliers · Comply with
and subcontractors) quality, health,
(Periodic) safety and
· Performance environmental
reviews (Suppliers, requirements
subcontractors · Supplied
and consultants materials/products
performance evaluation) are environmental
(Annually) friendly
GOVERNANCE DRIVEN
STAKEHOLDER ENGAGEMENT MAPPING (CONT’D)

Stakeholders (Frequency) Concerns Expectation Sections
Media · Press Releases (as and · Company development · Spread the good · Sustainability
when required) · Financial and business news Statement:
· Advertisements (as and updates · Public service (i) MSM 1:
when required) · Community development announcements Economic
· Announcements (as and initiatives well delivered and Business
when required) · Communication of · The news Performance
corporate updates and is delivered (ii) MSM 4: Health,
news accurately and Safety and
· Public service timely Environment
announcements i.e. on
road closures, traffic
disruptions etc.
Communities · Corporate social · Impact of operations · No issues/ · Sustainability
responsibility activities (i.e. health, safety, complaint raised Statement:
(throughout the year) environmental and · No stop work order (i) MSM 1:
· Community engagement security) on community Economic
and outreach · Charity and giving and Business
programmes (as and donation Performance
when required) · Local community (ii) MSM 4: Health,
· Strategic partnership development Safety and
(as and when required) · Staying connected with Environment
· Town hall and dialogue the company (iii) MSM 5:
sessions (ongoing) · Access to project Diversity,
information Inclusivity and
Social Justice
Civil Society · Collaborative · Health, safety and · No issues/ · Sustainability
Organisations engagement sessions environmental issues complaint raised Statement:
(as and when required) · Security issues · No stop work order (i) MSM 4: Health,
· Human rights Safety and
· Local community support Environment
(ii) MSM 5:
Diversity,
Inclusivity and
Social Justice
Table 5: Stakeholder Engagement Mapping

85
MSM 1: ECONOMIC AND BUSINESS PERFORMANCE
8 DECENT WORK AND

ECONOMIC GROWTH 9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE 11 SUSTAINABLE CITIES
AND COMMUNITIES 16 PEACE, JUSTICE
AND STRONG
INSTITUTIONS
Market Presence
AZRB is a leading Engineering and Construction (“E&C”) group listed on the Main Market of Bursa Malaysia. The
Group has grown tremendously since its formation in 1982, into a trusted and reputable leader in the industry. With
experience in the business for more than 3 decades, our track record of achievement, as disclosed in the Awards and
Recognitions section of this Annual Report, indicates our strong market presence in the industry. Apart from E&C, the
Group is also involved in Oil and Gas (“O&G”), Property, Concession and Plantation.
Economic Performance
Since our listing on Bursa Malaysia in 1999, the Group had completed numerous construction projects nationwide and
overseas. We have a strong track record in the construction of commercial buildings, infrastructure works, educational
institutions, public buildings and amenities, and sport facilities, that brought confidence to our stakeholders. In our
journey to become a resilient group and sustain our business, we continuously endeavour to incorporate sustainable
practices into our operations and activities in our attempt to consistently create sustainable values for our stakeholders.
In February 2019, the E&C Division successfully replenished its order book balance by securing a RM150.5 million
contract to build, refurbish and upgrade Petronas Office Complex (“POC”) in Kertih, Terengganu. This has boosted
the E&C Division’s outstanding order book to RM1.6 billion as of 30 June 2020 which is expected to further sustain its
business. In February 2020, the construction of the iconic Saloma Link (“SLINK”) project was completed, which has
created better connectivity between Kampung Baru and KLCC.
SLINK during the day

and night time. The
architecture of SLINK
is inspired by the ‘sirih
junjung’ concept,
which is an integral part
of the Malay wedding
ceremony
With regards to the O&G Division, TBSB is equipped with integrated facilities which include liquid mud plant (“LMP”)
and dry bulk (“DB”) that reside in the bonded area. Therefore, TBSB is able to cater to multiple Production Sharing
Contract (“PSC”) for a safe and cost-effective operation in meeting clients’ requirements. Currently, TBSB has secured
major contracts with several PSC operators, enabling our supply base to sustain its growing business.
GOVERNANCE DRIVEN
MSM 1: ECONOMIC AND BUSINESS PERFORMANCE (CONT’D)
Economic Performance (Cont’d)
LMP and DB
facilities at
TBSB
The performance of business divisions is further discussed in the Management Discussion and Analysis section of this
Annual Report.
COVID-19: Protecting Our Business

The year 2020 has been the greatest challenge that we ever faced due to the COVID-19 pandemic. The Movement
Control Order (“MCO”) announced by the Government since 18 March 2020 has severely impacted our business
whereby all our construction projects were temporarily suspended. This has resulted in supply chain disruption and
difficulties in performing our contractual obligations or scheduled performance during the MCO period. However, as
one of the critical industries, we obtained approval from the Government to gradually resume operation since end of
April 2020, with strict adherence to COVID-19 prevention Standard Operating Procedure (“SOP”) by the authorities.
Responding to the impacts of this pandemic, the Group has established a Special Task Force (“STF”), chaired by the
Group Managing Director to identify and assess the impact of MCO amid the COVID-19 pandemic to our business
operations covering 3 main areas, namely Protect Business Continuity, Build and Secure Liquidity and Engage
Stakeholders. At the time of this report, the STF is formulating action plans to overcome and address identified
challenges and at the same time identifying potential business growth opportunities as the economy is in its recovery
phase. Detailed measures that we have taken in responding to the pandemic are further discussed in MSM 4: Health
and Safety and MSM 5: Diversity, Inclusivity and Social Justice.
Indirect Economic Impacts

We are cognisant of the social impacts arising from the construction projects’ life cycle. We define the social impacts as
the social consequences to human population at where they live, work, interact and play. Hence, instead of becoming
an economic-centric industry player, we do aim for the social benefits that can be derived from our projects as well.
For instance, upon completion of KLORR, it is expected that this project will be able to spur the surrounding economic
development as well as will divert the traffic congestion from Middle Ring Road 2 (“MRR2”). Meanwhile, Kuantan folks
will enjoy better accessibility between Tanjung Lumpur and Kuantan City Centre once our TGLK project is completed.
A new shopping mall and hospital are planned to be developed within the vicinity area which will ultimately improve
the local socioeconomic landscape and fulfil the needs of the local communities. Aside from this project, it is also
expected that the connectivity of the Greater Kuala Lumpur will be improved significantly through the completion of
MRT V202, MRT S202 and MRT S206 projects in Kepong and Seri Kembangan areas respectively, as part of the MRT
Putrajaya Line alignment.
87
Aerial view of TGLK

and MRTS206 projects,
which will enhance
the connectivity of
urban folks upon their
completion
Awards, Recognition and Achievement

We continue to prove our excellent branding and track record in the industry by receiving multiple awards and
recognitions. We are pleased to announce that we received the following awards and achievements for this reporting
period.
List of Awards, Recognition & Achievement

5-Star SHASSIC Achiever Award for BBCC and UTP projects – Awarded by CIDB Malaysia (2020)
5-Star SCORE Award for AZSB – Awarded by CIDB Malaysia in collaboration with SME Corp (2019)
Best Company for IR (Micro Cap Company Category) – Awarded by Malaysia Investor Relations Association
(“MIRA”) (2019)
Best IR Website (Micro Cap Company Category) – Awarded by MIRA (2019)
Merit Award for Most Improved CG Disclosure – Awarded by Minority Shareholders Watch Group (“MSWG”) (2019)
In June 2020, AZRB achieved a 3-star rating1 for the Environment, Social and Governance (“ESG”) of Public Listed
Companies (“PLCs”) Assessment by FTSE Russell2 in the FBM EMAS Index. The assessment was made in line with the
FTSE4Good Bursa Malaysia review cycle. This new achievement indicates strong commitment of the Group in adopting
the philosophy of ESG practices and our reporting disclosures, which will improve our capabilities and secure long-
term value.
Note:
1. 3-star rating is defined as Top 26% - 50% by ESG Ratings amongst Public Listed Companies in FBM Emas that has been assessed
by FTSE Russell. The maximum rating is 4-star, which is defined as Top 25%.
2. FTSE Russell is a leading global index provider that provides clients with sustainable investment data models, ratings, and indexes
covering thousands of companies across developed and emerging markets globally. FTSE Russell’s ESG Data Model produces
ratings that are an objective measure of ESG exposure and performance in multiple dimensions (the FTSE ESG Ratings), which are
used in certain FTSE sustainable investment indexes to determine the eligibility of index constituents.
GOVERNANCE DRIVEN
MSM 1: ECONOMIC AND BUSINESS PERFORMANCE (CONT’D)
Corporate Governance
AZRB is always committed in maintaining and promoting high standards of corporate governance practices at all levels
of operations, with the key objective of promoting greater transparency, maintaining market integrity and investor
protection. Our commitment is proven through our recent achievement of winning Merit Award for Most Improved CG
Disclosure 2018 during MSWG-ASEAN Corporate Governance Awards, held on 31 July 2019.
Pursuant to the enforcement of Section 17A of MACC Act 2009 (Amendment 2018), the Group has embarked on the
implementation of MS ISO 37001:2016 Anti-Bribery Management System (“ABMS”) to comply with the law. A series
of ABMS awareness training and workshops have been conducted to ensure the readiness of the Group with the new
law. Several new policies and procedures have been established to ensure adequate controls are in place to prevent
corruption at workplace.
ABMS: A Tool to Achieve Our Anti-Corruption Objective

16 PEACE, JUSTICE
AND STRONG
INSTITUTIONS Supports Sustainable Development Goal 16:
Peace, Justice and Strong Institutions through substantially reduced corruption and bribery
in all their forms
A series of Awareness
Briefing on MS ISO 37001
ABMS and Corporate
Liability Law to the
Board of Directors and
Senior Management
were delivered by Institut
Integriti Malaysia (“IIM”)
and Malaysian Anti-
Corruption Commission
(“MACC”) respectively
Below are the other initiatives conducted or measures taken to uphold good corporate governance culture within the
Group:
Establishment of Board Committees – Audit and Risk Committee, Nomination Committee, Remuneration
Committee, Employees’ Share Scheme Committee
Implementation of Enterprise Risk Management – quarterly Risk Management assessment, Risk Management
Policy and Risk Management Framework
Disclosure of the Statement on Risk Management and Internal Control and Corporate Governance Overview
Statement in the Company’s Annual Report and Corporate Governance Report
The Employee Handbook
89
MSM 2: QUALITY AND INNOVATION
7 AFFORDABLE AND
CLEAN ENERGY 9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE 12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
Integrated Management System

Since the certification of Integrated Management System (“IMS”) by SIRIM in 2012, E&C Division is currently moving
towards IMS Certification Scheme (“ICS”) implementation by incorporating 3 reference standards, MS ISO 9001:2015
Quality Management System Standard, MS ISO 14001:2015 Environmental Management System Standards, and
OHSAS 18001:2007 Occupational Health and Safety Management Systems. The objectives of ICS are to assess the
level of understanding and implementation of IMS in the organisation and also to identify the continual improvement
needed. The integration of these reference standards demonstrates our commitment to quality, health, safety and
environment, through established objectives and targets as follows:
Quality Management System Health, Safety and Environment Management System

(“QMS”) (“HSEMS”)
• To meet the client’s requirement • To reduce the safety and health risk to employee and
• Promote quality within AZSB’s subcontractors, public
suppliers and consultants • To fully comply to legal and other requirements
• Continuously improve our processes in order • To minimise the negative impact of environmental
to meet MS ISO 9001:2015 Quality Management aspects at project site
System • To promote HSE within AZRB/AZSB
• Doing things right first time, every time • To conduct Emergency Drill
Table 6: QMS and HSEMS Objectives
Customer Satisfaction
Meeting our customer expectation is vital for us as this would lead to improving loyalty level, reducing costs and
retaining our customers. With that in mind, the E&C Division prepares a Project Quality Plan (“PQP”) prior to the start
of any projects in order to ensure the timely delivery of projects in meeting our client expectations. The PQP sets out
the objective, description, schedule, contract information and responsibility for a project.
In an effort to track our achievement in customer satisfaction and gaining valuable feedback, we have conducted
customer satisfaction survey with the aim to achieve an overall rating of at least 75% for all projects in E&C Division
and 70% for O&G Division.
GOVERNANCE DRIVEN
MSM 2: QUALITY AND INNOVATION (CONT’D)
Customer Satisfaction (Cont’d)
Contract Management and

Procurement Quality Management
Project Management and Safety and Health

Operation Management
Technical and Design Quality Environmental Management
Figure 5: List of Customer Satisfaction Survey Criteria
In this reporting period, we are proud to highlight that we achieved a customer satisfaction score of more than 75%
for most of our projects.
Quality
In measuring our project quality performance systematically and to standardise good practices across all projects,
we have developed AZRB Internal Quality Assessment (“AIQA”). Our existing AIQA was developed based on the
Construction Industry Standard issued by CIDB, CIS 19:2011 (QLASSIC for Road Works), CIS 7:2006 (QLASSIC for
Building Construction Works) and AZRB IMS. Three main criteria are assessed thoroughly in this assessment –
workmanship, records and non-conformance. In this reporting period 5 projects achieved an average score of 80% in
AIQA assessment.
Innovation Features and Technology

As a progressive business entity, AZRB consistently keeps up with the latest innovation features and new technology
to be integrated into our operations in order to enhance safety, quality, and project monitoring as well as to reduce
environmental impacts and to optimise cost. Below is the list of prominent innovation features being implemented at
our projects:
Building Industrialised
System Vessels’ Continuous
Information Building System Drones
Scaffolding Communication Steriliser
Modelling (BIM) (IBS)
BIM: Improving Coordination

At AZRB, we strive to provide high quality services to our clients and in pursuit of that, we have implemented BIM
across our E&C projects. With BIM, our interfacing team managed to coordinate complex construction activities with
a high degree of accuracy, thus improving quality of the end products. The MRT projects, for instance, involve intensive
coordination internally and between contractors due to the nature of the project and BIM has made the processes
become seamless.
91
IBS: Revolutionising the Industry

As Malaysia moves towards greater efficiency, productivity, quality and safety in construction, IBS holds the master
key to success. Construction Industry Development Board (“CIDB”) classifies IBS components into precast concrete
system, metal framing system, formwork system, timber framing system and blockwork system. At AZRB, we are
committed to responding to CIDB’s efforts to revolutionise Malaysia’s construction industry by integrating IBS into our
projects. For instance, formwork system is being implemented at our projects in order to reduce construction waste,
optimise manpower and improve quality of workmanship.
1. Precast Concrete System – Precast concrete is being used at certain projects such as UDA, MRT V202,
KLORR and TGLK
2. Metal Framing System – Integration of metal framing system for UTP2 project
3. Formwork System – PERI formwork system is being implemented at UDA and BBCC projects
– DOKA formwork is being implemented at PNB project
4. Blockwork System – AAC blockwork is being used at MRT S206 and UDA projects
Application of
formwork system
and blockwork
system at our
project
System Scaffolding: Promoting Efficiency

System scaffolding which is also known as modular scaffolding promotes greater efficiency through its flexibility
and adaptability. The flexible components of this type of scaffolding can be adjusted to fit the needs of various tasks
at the jobsite which makes it cost-effective. On top of that, modular scaffolding is also very easy to set up, store and
transport as they can be stacked on top of each other. At AZRB, we use Crab 60 modular scaffolding at MRT S206,
MRT V202, UTP2, BBCC and UDA projects which has proven to be functional in optimising manpower and cost as well
as accelerating progress.
Drones: Enhancing Project Monitoring

Utilisation of Unmanned Aerial Vehicles (“UAVs”) or drones helps in monitoring construction progress as well as
tracking workers, equipment and material on the jobsite. On top of that, it is also efficient and cost-effective to use
drones for inspection in remote areas where it is impossible or hazardous for humans to enter such as on top of a tall
structure, on and under bridges and along busy highways. At AZRB, we use drones to improve monitoring at our MRT
S206, MRT V202 and KLORR projects.
GOVERNANCE DRIVEN
MSM 2: QUALITY AND INNOVATION (CONT’D)
Vessels’ Communication at TBSB

At TBSB, safety of the supply base remains our top priority. The installation of Automatic Identification System (“AIS”)
detection, for instance, enables us to avoid potential vessel collision near the supply base. Additionally, in providing
accurate navigation for the vessels to the supply base, we have also installed satellite at TBSB. Considering the
location of our supply base at the mouth of Semerak River, TBSB has deployed buoy as barricade to mark shallow
areas at jetty areas. This is to avoid vessels from being stranded while approaching TBSB navigation channel.
Continuous Steriliser at PTIGP

Identified as one of the key processes in palm oil production, sterilisation process at our mill in PTIGP is conducted
by using continuous sterilisation (“CS”) technology. Compared to the conventional technology i.e. cylindrical pressure
vessels or vertical position, CS is an environmentally friendly technology since no blowdown silencer during the steam
release from boiling unit is required. CS also requires less energy usage with minimal maintenance and is able to
produce higher Oil Extraction Rate (“OER”) at an affordable cost, making our mill processing at PTIGP more cost
effective.
MSM 3: SUPPLY CHAIN MANAGEMENT
8 DECENT WORK AND

ECONOMIC GROWTH 9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE 11 SUSTAINABLE CITIES
AND COMMUNITIES 12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
Procurement Practices
As a responsible business entity with a diversified business portfolio, we are committed to ensuring that our
procurement process across our business segments conform to the Quality Management Systems (“QMS”) in
accordance with the MS ISO 9001:2015 standards. Collaboration between relevant departments has been our main
procurement practice in securing qualified subcontractors, suppliers, and vendors.
93
For E&C Division, we have developed a few internal procedures pertaining to procurement of consultancy services and
subcontractors as follows:
1. Good track record of past projects 1. Price quoted is fair and

2. Experience in similar projects reasonable
SELECTION within the specified range value SELECTION 2. Sufficient and available
CRITERIA OF CRITERIA OF resources/facilities
3. Registered with professional
CONSULTANTS bodies SUBCONTRACTORS 3. Confirmed and agreed to
4. Willing to participate on success follow our work programme
basis (no formal engagement schedule
until successful) 4. Past experience and
5. Registered with Ministry of performance with E&C
Finance 5. Others – terms of payment
6. Any other criteria required and/or and contract requirement
agreed by the Client
Figure 6: Selection Criteria of Consultants and Subcontractors
To achieve our objective in promoting quality within E&C Division, we conducted Subcontractors, Suppliers and
Consultants performance evaluation exercise on an annual basis.
Local Supplier
We seek to support local suppliers whenever possible depending on the nature of the projects and subject to clients’
requirements. This resembles our commitment to boost the local economy through creation and application of green
products and sustainable building materials among our suppliers. We also encourage the usage of regional materials
to reduce environmental impacts caused by freight transportation in our supply chain. The construction materials like
concrete, reinforcement bar and common clay brick are 100% locally-sourced.
JD Edwards ERP System

In optimising the amassed financial information in each business segment, AZRB and selected subsidiaries have
adopted e-Business Management Solution as our new Enterprise Resources Planning (“ERP”). Through JD Edwards,
this ERP System enables AZRB to share information between all components of the organisation, avoid redundancy
of records or playback operations, enhance reliability of information accuracy and improve our overall performance.
GOVERNANCE DRIVEN
MSM 4: HEALTH, SAFETY AND ENVIRONMENT
7 AFFORDABLE AND
CLEAN ENERGY
HSE Policy and Certifications

At AZRB, Health, Safety and Environment (“HSE”) is one of our most important MSMs due to the nature of our business.
For E&C Division, our HSE Policy is implemented through defined objectives and targets in achieving and sustaining:
The safe and healthy working environment;

The prevention and elimination of work-related injuries and illness;
The prevention of pollution to the environment from our activities; and
The compliance with legal and other requirements related to health, safety and environment
The Group’s strong commitment towards HSE is supported through the maintenance of our OHSAS 18001:2007 and
MS ISO 14001:2015 accredited certification by SIRIM QAS International. The Group is now upgrading from OHSAS
18001:2007 to MS ISO 45001:2015, which is targeted to be implemented by the end of 2020.
At our O&G Division, as required by the authorities, both TBSB and ICSB have established Drug & Alcohol Policy
to help maintain a safe and healthy working environment through strict prohibition of use and abuse of drugs and
alcoholic beverages. The HIV & AIDS Policy and Smoking Policy are also established at TBSB.
HSE Committee
In an effort to address our HSE concerns, at AZRB we have established our HSE management system to govern and
align our objectives towards ensuring a safe and healthy working environment. As illustrated in Figure 7, the HSE
Committee is established at Menara AZRB and replicated at all project sites. Meanwhile at O&G Division, an Emergency
Response Team (“ERT”) is also established, which comprises 4 units, namely oil spill, rescue team, first aider and
firefighting – which react and manage any incidents at our operations. For Plantation Division, HSE Department is also
established to monitor the safety aspects of the working environment and to carry out investigations in case of any
accidents occurred at our estates or mill.
95
(a) HSE Committee at Menara AZRB (b) HSE Committee at Project Sites
Chairman Chairman
(Director, Corporate (Project Director/
Services) Project Manager)
Secretariat Secretariat
Management Employer
Representatives Representatives
Employee Employee
Representatives Representatives
Subcontractor
Representatives
Consultants
Figure 7: HSE Committee at (a) Menara AZRB and (b) Project Site
Compliance Registry
Our compliance towards rules and regulations is the highest, through regular checking and monitoring by our HSE
team. At E&C Division, we periodically evaluate the conformance and performance of our projects with respect to
the IMS, QHSE objectives and targets, legal registry and other relevant requirements, including applicable permits
and licenses. Evaluation reports are generated through site investigations, site inspections, reviewing records and
conducting audits and interviews with the person working on the organisation’s behalf.
What We Adhere To?

1. Factories and Machinery Act 1967 7. Local Government Act 1976
2. Occupational Safety and Health Act 1994 8. Electricity Supply Act 1990
3. Road Transportation Act 1987 9. Customs Act 1967
4. Street, Drainage and Building Act 1974 10. Merchant Shipping Ordinance 1952
5. Uniform Building By Laws 1984 11. Solid Waste and Public Cleansing Management Act
6. Environmental Quality Act 1974 2007
Table 7: List of Compliance Registry

GOVERNANCE DRIVEN
MSM 4: HEALTH, SAFETY AND ENVIRONMENT (CONT’D)
HSE Training and Competency

Throughout the reporting period, we conducted a total of 365 HSE training for the E&C Division. These trainings
comprised a wide range of HSE training requirement, divided into several categories, as shown in Figure 8, i.e. Internal
Training, Personnel Development Training, Management System, Inspection & Awareness, Emergency Response &
Preparedness and Promotion & Awareness. For E&C Division, we sent 66.18% of staff for at least 1 training, exceeding
our target – to send 60% of employees for training, annually.
Training by Category Training by Scope
34
12
4
17
61
5
11
292
294
0 50 100 150 200 250 300 0 50 100 150 200 250 300
HSE Promotion & Awareness HSE Management System Health and Safety
Emergency Response & HSE Personnel Development Environment
Preparedness Training Others
HSE Inspection Assessment Internal Training
Figure 8: HSE Training at E&C Division
Emergency
drill and HSE
trainings
conducted at
our construction
project sites
97
The competency of our employees remains assured, for them to execute the tasks with quality in a safe working
environment. The competencies of our employees are listed as follows:
1. Green and Yellow Book Holder

2. Competent Scaffolder
3. Certified Environmental Professional in Scheduled Waste Management
4. Certified Erosion, Sediment and Storm Water Inspector
5. Certified Inspector Sediment & Erosion Control
6. Authorised Gas Tester
7. Authorised Entrant and Standby Person for Confined Space
8. Green RE Manager/Facilitator
Health and Safety Matters
Performance
In this reporting period, we are proud to announce that we achieved no Loss Time Injury (“LTI”) at most of our
construction projects.
One of the challenges that we faced in completing our construction projects

is property damage. We managed the reported incidents by taking corrective
action such as ensuring the catch net and catch platform are in good
condition, clearing all loose materials from edge building and ensuring tower
crane swing is within the construction boundaries. In the meantime, the team
also conducted close engagement with the affected property owners and
residents to reduce the impact of raised issues in the future.
Pertaining to incidents at project sites, there were a few cases recorded

during the period. Nevertheless, as a responsible company, we have
conducted several measures which include revision of Hazard Identification,
Risk Assessment and Risk Control (“HIRARC”) and relevant procedures,
inspection of machinery, revision of operator competency, re-induction of
workers and frequent toolbox briefing.
Initiatives
Among the Health and Safety initiatives practised at E&C Division include
site walks by the Management on a periodic basis; Behavioural Based Safety
(“BBS”) Programme; providing feedback or complaint box for suggestion or
complaint; and Carrot and Stick Programme – a program which motivates
staff by creating actionable goals and rewards for employees who are able to
alter their behavior and performance.
GOVERNANCE DRIVEN
Initiatives (Cont’d)
Meanwhile, in preventing and controlling the spread of dengue fever at our project sites, regular fogging exercise and
on-site inspection with Ministry of Health (“MOH”) officers are conducted at all sites. As part of our Risk Management
assessment exercise, we also conducted health and safety related risk assessment throughout our existing and
potential projects.
At O&G Division, one of the Health and Safety initiatives is the establishment of You See You Act (“UCUA”) campaign.
Through this initiative, our employees and workers report unsafe conditions and unsafe acts. This initiative is able
to resolve a lot of safety and hazardous issues, whereby the programme report is prepared to our client accordingly.
The COVID-19 pandemic has severely impacted our operation at sites, particularly in handling a safe working
environment. Adjusting to the new norm, AZRB has outlined comprehensive safety procedures as part of our
compliance towards the regulations set by the authorities. The practices include health screening prior to entering
any premises, swab test for workers at sites, usage of face mask and the practice of physical distancing at all times.
During the MCO,

physical distancing
and wearing of face
mask are practised
at Menara AZRB and
project sites
Environmental Matters
Performance
AZRB is committed to controlling and preventing environmental pollution within our operations to preserve a healthy
ecosystem. Our E&C Division has established the Environmental Management Plan to ensure that we are strictly in
compliance with the laws, standards and guidelines:
Malaysia’s Environment Quality Act 1974

New Malaysian Ambient Air Quality Standard
Guidelines for Environmental Noise Limits and Control (2019), 3rd Edition, by DOE
National Water Quality Standards for Malaysia
Standard Methods for the Examination of Water and Wastewater (2005), 21st Edition by APHA, AWWA and WEF
99
We monitor air, noise and water quality levels at project sites on a periodic basis to ensure compliance with the
Environmental Quality Act 1974. As listed in one of our HSEMS objectives, i.e. to minimise the environmental aspects
at project sites, we set the target to improve the quality of air, water and noise by 20% in comparison with the previous
year that exceed the DOE and/or baseline limits (whichever is higher). As of December 2019, we recorded air quality
improvement by 20% at all construction projects. Meanwhile, the water quality at most of our construction projects
also improved by 20%. In addition, we also prohibit open burning within our project sites to prevent emission of
hazardous gases, smoke and particles to the surrounding environment.
Initiatives
AZRB is continuously reviewing and improving our construction methods, tools and materials to perform our best in
delivering quality construction work and services with minor negative impact possible to the environment. Throughout
our projects, we adhere to the best practices of construction activities, such as implementation of Erosion and
Sedimentation Control Plan (“ESCP”), implementation of stormwater management plan, weekly inspection on site
and submission of ESCP.
Based on the incident statistic recorded, the highest incident cases arising from our construction activities are from
environment aspect. At one of our construction projects, namely KLORR, the issues that we faced are Ampang Intake
shutdown, high turbidity and overflow issues. Responding to that, we have conducted investigations on the source of
pollution and put more efforts on ESCP i.e. maintaining the clogged drain and silt fences.
Conduct Provide wash Hazardous and

environmental Installation of silt trough and water Installation of Skid tank with substances
quality control trap and silt fence bowser slope protection bund wall management
Figure 9: Environmental Initiatives at Project Site
At O&G Division, we are fully aware of the probability of chemical and oil spillage during operation, bunkering and
warehouse activities. As the chemical and oil spillage will damage the marine ecosystem, we strictly ensure that any
spillage incident is managed in accordance to the procedures. We also provide oil spill equipment (Tier 1) to mitigate
oil spillage at the jetty area. In the event of spillage, our ERT will act as the first respondent, prior to informing the
PSC.
At Plantation Division, we also strive to combat air pollution due to open burning. One of the challenges that we faced
is the open burning within the estates area, whereby additional monitoring towers are constructed at strategic points
to detect and control open burning within our estates.
GOVERNANCE DRIVEN
Green Building Projects

In meeting the demands of stakeholders who always seek for sustainable projects, we have participated in constructing
green building projects. Engaging with various clients and meeting all technical requirements, we managed to further
upscale our capabilities and expertise in green building projects. In the past decade, we have proven excellent track
records in completion and construction of green building nationwide, as follows:
No Project Green Rating Status

Menara Kementerian Kerja Raya,
1 GBI Platinum Completed 2015
Kuala Lumpur
2 IIUM Medical Centre, Kuantan, Pahang Energy Efficiency Building Completed 2016
GBI Silver – Retail
3 Residensi UTMKL, Kuala Lumpur Completed 2017
GBI Certified – Residence Tower
4 PJHZ, Precinct 1, Putrajaya GBI Certified In progress
5 PNB, Jalan Sultan Ismail, Kuala Lumpur GBI Platinum & Certified In progress
6 UDA, Kampung Baru, Kuala Lumpur GBI Gold In progress
7 POC, Kerteh, Terengganu GBI Gold In progress
Table 8: List of Green Building Projects
Sustainable Office Challenge

It is yet another exciting year for AZRB as we diversified our environmental-based initiatives. Following our successful
Waste to Wealth (“W2W”) initiative in 2017 and 2018, in 2019 we expanded W2W into a larger scope and new branding
– namely, Sustainable Office Challenge (“SOC”). Coordinated by the Sustainability Department, SOC is an initiative to
encourage our employees to practise a sustainable working lifestyle at the workplace particularly towards energy
saving, water saving and waste management.
PARTICIPATION KEY HIGHLIGHTS
7 Collection
days at HQ
4 Months
(Sept – Dec 2019)
PAPERS PLASTIC E-WASTE
7,968.40 kg 161.80 kg 610.00 kg
14 Teams 6 from
HQ
8 from
site offices
RM1,850.85 RM62.87 RM216.58
8,740.20 kg of recyclable items
720 Participating staff

– HQ & site offices
Worth RM 2,130.30
Figure 10: Summary of SOC Achievement
101
Placement of
recycle bin set
and energy
saving awareness
stickers at
Menara AZRB
During the SOC programme, we placed energy saving and water saving stickers at the common areas of Menara
AZRB. These stickers provide a quick reminder for the staff to save water and save energy. Meanwhile, to promote
the recycling lifestyle at the workplace, we have placed a set of recycle bins at Menara AZRB Café for everyone’s
convenience.
During the 18-month period under review, AZRB consumed 1,370,851 kWh amounting to RM792,835.68 of electricity.
The electricity consumption at Menara AZRB has decreased significantly over the past 3 years due to energy saving
practices observed at the workplace by turning off the air conditioners during lunch hour and 30 minutes earlier
before end of the working hours. At the common areas, the air conditioners are set at the most optimal temperature
i.e. 24° Celsius. The comparison of total and average consumption of electricity at Menara AZRB is depicted in the
following graph:
Figure 11:
Electricity Consumption 1,200 120,000
at Menara AZRB (kWh)
1,000 100,000
90,192.6
86,784.4
80,704.5
800 80,000
67,066.2
Total kWh per year/ Average monthly

600 60,000
period (’000) kWh
400 40,000
1,082,312
1,041,413
200 20,000
968,454
402,397
0 0
2017 2018 2019 2020*
Total kWh per year/period Average monthly kWh
* For 6 months ended 30 June 2020

GOVERNANCE DRIVEN
Security and Assets

Back in 2018, we established the AZRB Security Policy, which is handled by the Security Department. The Security
Department is responsible to identify, secure, prevent and investigate all security matters across AZRB Group. The
Policy covers multiple security matters such as physical security, assets security and information technology security.
This Policy shows our commitment in providing security to our employees and assets. It is also our practice to log and
report all incidents, loss and security issues to the Security Department on a monthly basis, where investigations are
conducted accordingly.
At O&G Division, we conducted a control mechanism of asset loss/damage by tagging our assets, providing assets
insurance and vehicle inspection in and out from the supply base at the main gate by our Auxiliary Police.
MSM 5: DIVERSITY, INCLUSIVITY AND SOCIAL JUSTICE
People are the backbone of the organisation. We believe that creating a conducive working environment for our people
will ultimately boost our productivity in all aspects.
Employee Distribution
The Group views our people as one of the most valuable and crucial assets. Our people have a diverse background
and experience, which play an important role in ensuring the Group’s growth. We strive to cultivate a harmonious
working environment that allows equal opportunities for all, ensuring that our people are treated with dignity and
respect regardless of culture, gender, age and ethnicity. The distribution of our employees at the head office payroll
is illustrated as follows:
Gender Age Group

Total
Designation Male Female <30 30-50 >50
Nos. % Nos. % Nos. % Nos. % Nos. % Nos.
Executive 417 58.82 226 72.20 145 46.62 422 70.45 76 67.86 643
Non-Executive 292 41.18 87 27.80 166 53.38 177 29.55 36 32.14 379
Total 709 69.37 313 30.63 311 30.43 599 58.61 112 10.96 1,022
103
Ethnicity Total
Designation Malay Chinese Indian Others
Nos. % Nos. % Nos. % Nos. % Nos.
Executive 622 62.51 12 92.31 5 55.56 4 80.00 643
Non-Executive 373 37.49 1 7.69 4 44.44 1 20.00 379
Total 995 97.36 13 1.27 9 0.88 5 0.49 1,022
Table 9: Employee Distribution
Figure 12:
100
Type of Employment by
Gender (%)
80
42.81
60
40 69.82
20
30.18 57.19
0
Male Female
Contract
Permanent
Staff Welfare
The welfare of our employees remains our top priority. Our employees enjoy various benefits which range from
medical benefits (insurance and health care), facilities for disabled employees (parking & toilets), parental leave,
library facilities and free van shuttle services for LRT commuters.
Meanwhile, at the site projects, the workers are not left behind. We provide sufficient drinking water and wash area,
adequate number of toilet and urinals, rest area and first aid equipment including Automated External Defibrillator
(“AED”).
GOVERNANCE DRIVEN
MSM 5: DIVERSITY, INCLUSIVITY AND SOCIAL JUSTICE (CONT'D)
Staff Welfare (Cont’d)
Some of the
facilities
provided at our
construction
project sites
At our Plantation Division, our staff and workers are provided with a wide range of benefits to cater to their basic living
requirement and needs such as allowances (office, transportation, meal, telephone, fuel and retirement) and health
insurance. We also coordinated multiple programmes for our staff and workers such as Career Planning Programme,
Motorcycle Ownership Program, HR Development and Training Program, Family Gathering and performance-based
awards.
Human Rights
At AZRB, we adhere to all applicable laws and regulations related to human rights. As set out in AZRB Employee
Handbook, part of the initiatives we have taken to safeguard the human rights of individuals are as listed below:
Comply with all applicable laws related to employee compensation including minimum wage and legally mandated
benefits;
Comply with laws regarding working hours;
Prohibit discrimination in hiring and employment practices including gender, race, religion, age, disabilities and
nationalities;
Prohibit physical abuse and harassment;
Prohibit forced labour and child labour; and
Prompt action on matters related to grievance and whistleblowing procedures.
It is our priority to ensure good working and living conditions for our employees including foreign workers. At our
Centralised Labour Quarters (“CLQs”) in Sungai Buloh and Dengkil, Selangor, we provide a secure accommodation for
our workers with several health and safety necessities.
We also tightened our controls by enforcing regular checks at CLQs and at project sites. We understand that non-
compliance to legislation will disrupt our work progress as the authorities will impose stop work orders. Therefore,
it is our practice to conduct regular engagement with our subcontractors through briefings and by imposing strict
penalties for non-compliance.
105
COVID-19 – Managing our Operation and Foreign Workers
1. All project sites were closed from 18 March 2020 as our compliance towards the announced Movement Control
Order (“MCO”) by the Government
2. From 29 April 2020 (MCO-3), the Ministry of International Trade and Industry (“MITI”) allowed all our 13 projects
to resume operations with all conditions, Standard Operating Procedures (“SOP”) and guidelines to be strictly
adhered to
3. A total of 3,700 screening tests for all our foreign workers have been conducted and no COVID-19 positive cases
were reported among our foreign workers
COVID-19 swab test

among the employees
and workers
COVID-19 prevention
measures at sites:
temperature checking
at entrance and
physical distancing
practice
GOVERNANCE DRIVEN
Training and Career Development

Our employees are our valuable assets. As such, we are committed to providing and equipping our employees with the
necessary skill sets in enhancing their potential to deliver their tasks. Within the reporting period, AZRB Training and
Development invested RM133,832.86 for a total of 108 capacity building and training sessions. The breakdown of the
training scope attended by our employees are depicted below:
Figure 13: Quality Training

Categories of 10.19%
Training (11 sessions)
HSE Training Technical Training

Total Training
22.22% 108 sessions 67.59%
(24 sessions) (73 sessions)
In nurturing our future talents, we offer career development programs for fresh graduates to be part of our Company.
During this reporting period, we hired 3 Professional Training & Education for Growing Entrepreneurs (“Protégé”)
and 6 GenNext. Both programs are aimed at increasing the graduates’ employability for placing themselves in this
sector. With a diversified background (i.e. civil engineering, construction management and quantity surveying), all
GenNext are on a 3-month rotation basis across multiple Divisions for 2 years period. Upon completion of the GenNext
programme, they are absorbed as permanent staff at the respective department or project.
A series of training
sessions conducted to
upscale general and
technical skills of our
employees. In 2019,
AZRB formed its own
Toastmasters Club, in
collaboration with Fusion
Inspired Toastmasters
Club
107
KSR Activities
In promoting a work-life balance among our employees, weekly activities have been conducted by Kelab Sukan dan
Rekreasi AZRB (“KSR”), which range from sports activities (futsal, badminton, zumba and tabata) and recreation
activities (hiking and white-water rafting). KSR also held annual events such as Piala Dato’ Sri Wan Zakariah Futsal
Tournament and KSR AZRB Bowling Tournament 2020.
Our employees benefiting from sports and recreation activities, organised by KSR AZRB
Aside from sport and recreational activities, KSR has also conducted a series of talks that aimed at providing knowledge
and exposure to our employees in a leisure and casual way. These talks series were conducted during lunch hour
covering various topics i.e. mental health, grooming, spiritual and finance, which were delivered by experienced
external speakers. All KSR activities have received very warm support and active participation from our employees –
at both HQ and site offices.
GOVERNANCE DRIVEN
Community Outreach Programmes

During the reporting period, we continued to engage our internal and external stakeholders that surround the vicinity
of our business and operation sites across all Divisions. Through our community projects, we strive to positively
contribute to both social and economic wellbeing of the communities. At AZRB, we divided our community projects
into three categories:
Community Enrichment – contributions for festive seasons such as ‘Hari Raya Aidilfitri’, ‘Hari Raya Aidiladha’,
and ‘gotong-royong’
Community Investment – contributions for zakat, during COVID-19 and for underprivileged groups
Education – awards for excellent students and “Back to School” programmes
Figure 14: Community

Our Contribution & Investment
Sponsorship to the 41.36%

Surrounding Community
Total
Community
Contribution &
Enrichment
Sponsorship:
Education RM148,125.30
44.62%
14.03%
Among Community
Engagement
Programmes organised
by AZRB – Best Student
Awards, Hari Raya Open
House and contributions
for zakat wakalah and
ibadah qurban
109
REPORT STATEMENTS INFORMATION Annual Report 2020
FINANCIAL
STATEMENTS
110 Directors’ Report
119 Independent Auditors Report
125 Statements of Profit or Loss and
Other Comprehensive Income
127 Statements of Financial Position
129 Statements of Changes in Equity
135 Statements of Cash Flows
141 Notes to the Financial Statements
256 Statements by Directors
257 Declaration by the officer primarily
responsible for the financial management
of the Company
110 Annual Report 2020
GOVERNANCE DRIVEN
Directors’ Report
The Directors of AHMAD ZAKI RESOURCES BERHAD have pleasure in submitting their report and the audited financial
statements of the Group and of the Company for the financial period from 1 January 2019 to 30 June 2020.
CHANGE OF FINANCIAL YEAR END
During the financial period, the Group and the Company have changed their financial year end from 31 December to
30 June. Accordingly, the financial statements of the Group and the Company for current financial period are drawn
up for a period of eighteen (18) months from 1 January 2019 to 30 June 2020 and that the subsequent financial year
shall end on 30 June annually.
PRINCIPAL ACTIVITIES
The Company is principally engaged in investment holding, providing management services and as contractor of civil
and structural works.
The information on the name, principal activities, country of incorporation and proportion of ownership interest and
voting power held by the Company in each subsidiary and associate is disclosed in Note 19 and Note 20 to the financial
statements respectively.
RESULTS OF OPERATIONS
Group Company
RM‘000 RM‘000
Loss for the period attributable to:

Owners of the Company (98,321) (3,419)
Non-controlling interests (12,907) -
(111,228) (3,419)
DIVIDENDS
No dividend has been paid, declared or proposed by the Company since the end of the previous financial year.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves and provisions during the financial period except as disclosed in
the financial statements.
111
Directors’ Report
ISSUE OF SHARES AND DEBENTURES
There were no changes in the issued and paid-up share capital of the Company during the financial period.
There were no debentures issued during the financial period.
WARRANTS
The warrants are constituted by a Deed Poll dated 18 March 2014. Each warrant entitles the registered holder to
subscribe for 1 new ordinary share in the Company at any time on or after 14 May 2014 until 13 May 2024 at an
adjusted exercise price of RM0.63 per share for every warrant held in accordance with the provisions in the Deed Poll.
Any warrants not exercised at the date of maturity will lapse and cease to be valid for any purpose.
As at 30 June 2020, the total numbers of warrants that remain unexercised were 116,201,952.
EMPLOYEES’ SHARE SCHEME
At an extraordinary general meeting (“EGM”) held on 17 March 2014, the Company’s shareholders approved the
establishment of an Employees’ Share Scheme (“ESS”) of up to 15% of the issued and paid-up share capital of the
Company (excluding treasury shares) for the eligible employees and Directors of the Company and its subsidiaries
which are not dormant at any point in time. The ESS was implemented on 18 August 2014 (“Effective Date”) for a
period of 5 years which expired on 17 August 2019. The ESS has been extended for a further period of 5 years expiring
on 17 August 2024.
The salient features of the ESS are, inter alia, as follows:
(i) Eligible employees are those full time employees whose employment with the Group have been confirmed while
eligible Directors are those Directors including non-executive and/or independent Directors of the Group. The
maximum allocation of ESS Shares Award and ESS Options (“Awards”) to the Directors has been approved by the
shareholders of the Company at the EGM.
(ii) The aggregate maximum new number of shares to be issued under the ESS shall not exceed 15% of the issued
and paid-up share capital of the Company (excluding treasury shares) at any time throughout the duration of the
ESS.
The ESS shall be valid for a period of 5 years and may be further extended for a maximum period of 5 years and
such extension shall not in aggregate exceed the duration of 10 years from the Effective Date.
(iii) Following the implementation of the Companies Act, 2016, the exercise price of each share comprised in the ESS
Options shall be at a discount (as determined by the ESS Committee) of not more than 10% to the 5 market days’
volume weighted average market price of the underlying shares preceding the award date of the ESS Options or
the par value of the Company’s shares, whichever is higher.
GOVERNANCE DRIVEN
Directors’ Report
EMPLOYEES’ SHARE SCHEME (CONT’D)
(iv) The allocation of ESS Options to any individual eligible employee or Director who either singly or collectively
through persons connected with them, holds twenty percent (20%) or more of the issued and paid-up share
capital of the Company (excluding treasury shares), shall not exceed ten percent (10%) of the new shares of the
Company to be issued pursuant to the ESS.
(v) The actual number of shares which may be awarded under the ESS Shares Award shall be at the discretion of
the ESS Committee. The ESS Committee may stipulate any terms and conditions it deems appropriate in an ESS
Shares Award and the terms and conditions may differ.
(vi) If the ESS Shares Award is not accepted in the manner as set out in the By-law, the ESS Shares Award shall
automatically lapse upon the expiry and be null and void.
(vii) The ESS Committee shall, as and when it deems practicable and necessary, reviews and determines at its
own discretion the vesting conditions in respect of an ESS Shares Award which includes, amongst others, the
following:
(a) the grantee must remain an employee as at the vesting date;
(b) the performance conditions are fully and duly satisfied; and/or
(c) any other conditions which are determined by the ESS Committee.
(viii) The new shares to be allotted and issued under the ESS shall rank pari passu in all respects with the then existing
shares of the Company except that the new shares shall not be entitled to any dividends, rights, allotments and/
or distributions that may be declared, made or paid to the shareholders, the entitlement date of which is prior to
the date of the allotment of the new shares.
The movements in ESS Options and ESS Shares Award are disclosed in Note 40 to the financial statements.
TREASURY SHARES
There was no repurchase of the Company’s shares during the financial period under review.
As at 30 June 2020, the Company held a total of 1,662,862 ordinary shares as treasury shares out of its issued and paid-
up share capital of 598,097,678 ordinary shares. Such treasury shares are held at carrying amount of RM1,025,787 and
further relevant details are disclosed in Note 31 to the financial statements.
113
Directors’ Report
OTHER STATUTORY INFORMATION
Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps:
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of
allowance for doubtful debts, and had satisfied themselves that all known bad debts had been written off and that
adequate allowance had been made for doubtful debts; and
(ii) to ensure that any current assets which were unlikely to be realised in the ordinary course of business including
the value of current assets as shown in the accounting records of the Group and of the Company had been written
down to an amount which the current assets might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
(i) which would render the amount written off as bad debts or the amount of allowance for doubtful debts in the
financial statements of the Company inadequate to any substantial extent; or
(ii) which would render the values attributed to the current assets in the financial statements of the Group and of the
Company misleading; or
(iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group
and of the Company misleading or inappropriate; or
(iv) not otherwise dealt with in this report or the financial statements that would render any amount stated in the
financial statements of the Group and of the Company misleading.
At the date of this report, there does not exist:
(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial period
which secures the liabilities of any other person; or
(ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial
period.
No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become
enforceable within the period of twelve months after the end of the financial period which, in the opinion of the
Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and
when they fall due.
In the opinion of the Directors, the financial performance of the Group and of the Company for the financial period
from 1 January 2019 to 30 June 2020 have not been substantially affected by any item, transaction or event of a
material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of
that financial period and the date of this report.
GOVERNANCE DRIVEN
Directors’ Report
DIRECTORS
The Directors of the Company in office during the financial period and during the period from the end of the financial
period to the date of this report are:
Raja Tan Sri Dato’ Seri Aman bin Raja Haji Ahmad
Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda
Dato’ Sri Wan Zakariah bin Haji Wan Muda
Dato’ W Zulkifli bin Haji W Muda
Dato’ Roslan bin Tan Sri Jaffar
Tan Sri Dato’ Lau Yin Pin @ Lau Yen Beng
Datuk (Prof.) A Rahman @ Omar bin Abdullah
Dato’ Sr. Abdull Manaf bin Hj Hashim
Datuk Wira Azhar bin Abdul Hamid (appointed on 20 October 2020)
Dato’ Haji Mustaffa bin Mohamad (resigned on 16 October 2020)
The names of the Directors of the Company’s subsidiaries in office during the financial period up to the date of this
report (not including those directors listed above) are:
K.D.Y.M.M. Sultan Abdullah Ibni Sultan Haji Ahmad Shah

Y.A.M. Tengku Baderul Zaman Ibni Sultan Mahmud
Y.B.M. Tengku Tan Sri Dato’ Haji Mohamad Rizam bin Tengku Abdul Aziz
Y.A.M. Tengku Norhana binti Sultan Mahmud
Y.B.M. Dato’ Tengku Rozanna Petri binti Tengku Mohamed Nasrun
Tan Sri Dato’ Ir Zaini bin Omar
Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob
Dato’ Sri Haji Adnan bin Wan Mamat
Dato’ Ir Dr Ashaari bin Mohamad
Dato’ Haji Bahari bin Johari
Dato’ Haji Zakaria bin Awang
Dr Hjh Wan Maimun binti Wan Abdullah
Mohammad Fauzi bin Haji Ahmad
Mohd Zaki bin Mohd Noor
Wan Shariman bin Wan Mohamed
Wan Azwan Shah bin Tan Sri Dato’ Sri Haji Wan Zaki
Wan Ramzi bin Haji Wan Muda
Hamkamarul Bahrin bin Mohamad
Azmi bin Mat Ali
Mohd Zulkifli bin Yusof
Erwannyzam bin Abdull Rahman
Hj Md Suhaimi bin Husain
Wan Razali bin W Zulkifli
Dato’ Haji Rozi bin Mamat (appointed on 13 September 2019)
Dato’ Haji Nik Dir bin Nik Wan Ku (appointed on 13 September 2019)
Dato’ Haji Din bin Adam (appointed on 13 September 2019)
Dato’ Khairul Yusni bin Md Yusof (appointed on 1 August 2020)
Annuarfaei bin Mustapa (appointed on 20 November 2019)
115
Directors’ Report
Nur Adlan Taib (appointed on 31 December 2019)

Haida Shenny binti Hazri (appointed on 7 August 2019)
Hayati binti Tamzir (appointed on 1 November 2019)
Iskandar Sham bin Abd Rasap (appointed on 28 February 2020)
Aubrey Michael Shepherdson (appointed on 4 July 2020)
Wan Amir Hisyam bin Wan Zakariah (appointed on 28 February 2020)
Dato’ Haji Ismail bin Sulong (resigned on 30 June 2020)
Dato’ Haji Muhammad Pehimi bin Yusof (resigned on 13 September 2019)
Dato’ Ir Jamaludin bin Osman (resigned on 1 August 2020)
Dato’ Haji Basir bin Ismail (resigned on 13 September 2019)
Dato’ Haji Wan Zakaria bin Abd Rahman (resigned on 4 July 2019)
Dato’ Roszali bin Othman (resigned on 20 November 2019)
Dato’ Azman bin Marzuki (resigned on 15 October 2019)
Abdul Halim bin Ashari (resigned on 18 August 2020)
Radzillah binti Mahmood (resigned on 14 June 2019)
Mohammad Ashraf bin Md Radzi (resigned on 31 January 2020)
Abd Kadir bin Sahlan (resigned on 20 November 2019)
Shankar Ray Shi-Wan (resigned on 1 June 2019)
Zawawi bin Wahab (resigned on 3 June 2019)
Anuwar bin Mohd (resigned on 13 September 2019)
DIRECTORS’ INTERESTS
The interests and deemed interests in the ordinary shares, warrants and options of the Company and of its related
corporations (other than wholly-owned subsidiaries) of those who were Directors at financial period end (including the
interests of the spouses or children of the Directors who themselves are not Directors of the Company) as recorded
in the Register of Directors’ Shareholdings kept by the Company under Section 59 of the Companies Act, 2016 are as
follows:
Ordinary Shares
At At
1.1.2019 Bought Sold 30.6.2020
Direct interest in the Company

Raja Tan Sri Dato’ Seri Aman bin Raja Haji Ahmad - 200,000 - 200,000
Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda 4,747,471 209,900 (200,000) 4,757,371
Dato’ Sri Wan Zakariah bin Haji Wan Muda 4,966,220 300,000 - 5,266,220
Dato’ W Zulkifli bin Haji W Muda 9,003,789 - - 9,003,789
Dato’ Roslan bin Tan Sri Jaffar 891,562 169,700 - 1,061,262
Dato’ Haji Mustaffa bin Mohamad 2,812,510 - (200,000) 2,612,510
Tan Sri Dato’ Lau Yin Pin @ Lau Yen Beng - 900,000 - 900,000
Datuk (Prof.) A Rahman @ Omar bin Abdullah 3,011,249 671,800 - 3,683,049
Dato’ Sr. Abdull Manaf bin Hj Hashim 157,500 15,000 (7,500) 165,000
GOVERNANCE DRIVEN
Directors’ Report
DIRECTORS’ INTERESTS (CONT’D)
Ordinary Shares
At At
1.1.2019 Bought Sold 30.6.2020
Indirect interest in the Company

Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda* 321,927,959 169,700 (115,000) 321,982,659
Dato’ W Zulkifli bin Haji W Muda* 263,125 - - 263,125
Dato’ Roslan bin Tan Sri Jaffar* 492,187 - - 492,187
Dato’ Haji Mustaffa bin Mohamad* 1,499,512 1,000 - 1,500,512
Warrants 2014/2024
At At
1.1.2019 Bought Sold 30.6.2020
Direct interest in the Company

Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda 985,676 - - 985,676
Dato’ Sri Wan Zakariah bin Haji Wan Muda 429,368 - - 429,368
Dato’ W Zulkifli bin Haji W Muda 225,153 - - 225,153
Dato’ Roslan bin Tan Sri Jaffar 139,218 - - 139,218
Indirect interest in the Company

Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda* 63,622,038 - - 63,622,038
Dato’ Roslan bin Tan Sri Jaffar* 105,468 - - 105,468
Dato’ Haji Mustaffa bin Mohamad* 56 - - 56
Number of Options over Ordinary Shares

At At
1.1.2019 Granted Exercised 30.6.2020
Raja Tan Sri Dato’ Seri Aman bin Raja Haji Ahmad 230,000 - - 230,000
Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda 247,500 - - 247,500
Dato’ Sri Wan Zakariah bin Haji Wan Muda 180,000 - - 180,000
Dato’ W Zulkifli bin Haji W Muda 180,000 - - 180,000
Dato’ Roslan bin Tan Sri Jaffar 180,000 - - 180,000
Dato’ Haji Mustaffa bin Mohamad 180,000 - - 180,000
Tan Sri Dato’ Lau Yin Pin @ Lau Yen Beng 230,000 - - 230,000
Datuk (Prof.) A Rahman @ Omar bin Abdullah 153,334 - - 153,334
117
Directors’ Report
Ordinary Shares
At At
1.1.2019 Bought Sold 30.6.2020
Direct interest in the ultimate holding company

Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda 3,000,001 - - 3,000,001
Dato’ Sri Wan Zakariah bin Haji Wan Muda 1,250,000 - - 1,250,000
Dato’ W Zulkifli bin Haji W Muda 1,250,000 - - 1,250,000
Indirect interest in the ultimate holding company

Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda* 2,500,001 - - 2,500,001
*
Deemed interest in securities held through persons connected with the Director.
By virtue of the Directors’ interests in the shares of the ultimate holding company, the above mentioned Directors are
also deemed interested in the shares of the Company and of its subsidiaries during the financial period to the extent
that the Company has an interest.
None of the other Directors holding office at 30 June 2020 had any interest in the ordinary shares, warrants and
options of the Company and of its related corporations during the financial period.
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive
any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable
by Directors as shown in Note 9 to the financial statements of the Company or of related corporations) by reason of
a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a
member, or with a company in which the Director has a substantial financial interest other than certain Directors who
have significant financial interests in companies which traded with certain companies in the Group in the ordinary
course of business as disclosed in Note 44 to the financial statements.
There were no arrangements during and at the end of the financial period which had the object of enabling Directors
of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any
other body corporate except for the ESS Options and ESS Shares Award granted to certain Directors pursuant to the
Company’s ESS as disclosed above.
SIGNIFICANT EVENTS DURING THE PERIOD
Significant events during the period is disclosed in Note 47 to the financial statements.
GOVERNANCE DRIVEN
Directors’ Report
INDEMNITY AND INSURANCE FOR DIRECTORS, OFFICERS OR AUDITORS
The Company maintains Directors’ liability insurance for purposes of Section 289 of the Companies Act, 2016
throughout the period, which provides appropriate insurance cover for the Directors of the Company. The amount of
insurance premium paid during the period amounted to RM53,010.
There was no indemnity given to or insurance effected for the auditors of the Company in accordance with Section 289
of the Companies Act, 2016.
HOLDING COMPANY
The Directors regard Zaki Holdings (M) Sdn Bhd, a company incorporated and domiciled in Malaysia, as the ultimate
holding company of the Company.
AUDITORS
The auditors, Deloitte PLT, have indicated their willingness to continue in office.
AUDITORS’ REMUNERATION
The amount paid/payable as remuneration of the auditors for the financial period from 1 January 2019 to 30 June 2020
is as disclosed in Note 8 to the financial statements.
Signed on behalf of the Board of Directors

in accordance with a resolution of the Directors,
RAJA TAN SRI DATO’ SERI AMAN BIN

RAJA HAJI AHMAD
DATO’ SRI WAN ZAKARIAH

BIN HAJI WAN MUDA
Kuala Lumpur,
28 October 2020
119
Independent Auditors’ Report

to the Members of Ahmad Zaki Resources Berhad
(Incorporated in Malaysia)
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of AHMAD ZAKI RESOURCES BERHAD, which comprise the statements of
financial position of the Group and of the Company as at 30 June 2020, and the statements of profit or loss and other
comprehensive income, statements of changes in equity and statements of cash flows for the period from 1 January
2019 to 30 June 2020, and notes to the financial statements, including a summary of significant accounting policies
and other explanatory information, as set out on pages 125 to 255.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group
and of the Company as at 30 June 2020, and of their financial performance and their cash flows for the period from
1 January 2019 to 30 June 2020 in accordance with Malaysian Financial Reporting Standards, International Financial
Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia.
Basis for Opinion
We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards
on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for
the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Independence and Other Ethical Responsibilities
We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct
and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board
for Accountants’ International Code of Ethics for Professional Accountants (including International Independence
Standards) (“IESBA Code”), and we have fulfilled our ethical responsibilities in accordance with the By-Laws and the
IESBA Code.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the Group and of the Company of the current period. These matters were addressed in the
context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. Further, we have determined that there is no key
audit matter in respect of audit of the separate financial statements of the Company to communicate in our auditors’
report.
GOVERNANCE DRIVEN
Key Audit Matters (Cont’d)
Key Audit Matters Our audit performed and responses thereon
1) Revenue Recognition on Construction

Contracts
For the financial period from 1 January Our audit procedures included, among others, the following:
2019 to 30 June 2020, the Group
recognised revenue on construction • Obtained understanding of the revenue recognition process,
contracts of RM1,228,672,000 which including the accuracy and timing of revenue recognition towards
contributed to 84% of the Group’s total satisfaction of performance obligation, and tested the associated
revenue. relevant controls surrounding revenue recognition.
Revenue from construction contracts • Reviewed the agreements (including variation orders) for
is recognised progressively over time construction contracts. Tested the reasonableness of the
based on the percentage of completion management’s computation for the progress of construction
by using the cost-to-cost method (“input projects towards the complete satisfaction of performance
method”), based on the proportion obligation taking into account the construction costs recognised
of contract costs incurred for work during the financial period and the budgeted cost by testing a
performed to date relative to the sample of costs incurred to date to the relevant supporting
estimated total contract costs. documentation.
The revenue recognition on construction • Reviewed the management prepared budgets and discussed with
contracts is considered to be a key the project team to ascertain that project budgets are reasonable.
audit matter as significant judgement is
exercised in determining the estimated • Evaluated the reasonableness of the estimates made and
total contract revenue and budgeted assessed whether or not these estimates showed any evidence of
costs, the extent of the construction costs management bias, based on historical accuracy of management’s
incurred, variation of scope of work, estimates in prior years.
percentage of completion, as well as the
profitability of the construction contracts • Performed site-visits for individually significant on-going
in estimating foreseeable losses. projects and discussed with the site team to arrive at an overall
assessment as to whether percentage of progress towards
Refer to “critical accounting judgements” complete satisfaction of performance obligation determined on
in Note 3.25(i)(b) to the financial a cost-to-cost basis was reasonable.
statements and construction contract
revenue and construction contract cost
recognised in profit or loss in Notes
4 and 5 to the financial statements,
respectively.
121
Key Audit Matters Our audit performed and responses thereon
2) Impairment assessment of goodwill

and intangible assets
As at 30 June 2020, the Group has goodwill Our audit procedures included, among others, the following:
and intangible assets of RM35,623,000
and RM18,317,000 respectively, relating • Obtained understanding of management processes and controls
to the Malaysian supply base operation for testing impairment of goodwill related to Malaysian supply
which arose as a result of acquisition base operation.
of Matrix Reservoir Sdn Bhd and its
subsidiaries on 30 December 2016. • Reviewed the impairment assessment of goodwill and
intangible assets prepared by management, and challenged
Determining whether the goodwill the reasonableness of the key assumptions used in cash flows
and intangible assets are impaired projections.
requires management estimation of the
recoverable amount, which is determined • Involved our internal valuation specialist in reviewing the
based on an estimation of the present appropriateness of the valuation methodology and discount rate
value of future cash flows expected to adopted by management in the determination of recoverable
be generated. The key assumptions amount.
used in the estimation of the recoverable
amount involves a significant degree of • Evaluated the work of our internal valuation specialist including
management judgement. the relevance and reasonableness of that specialist’s findings or
conclusions.
Refer to key assumptions used as
disclosed in Note 18 to the financial • Assessed for impairment by comparing the recoverable amount
statements. determined from an estimation of the present value of future
cash flows expected to be generated from the Malaysian supply
base operation of the Group to its carrying amount.
• Performed sensitivity analysis on management’s key assumptions

to assess if any reasonably possible downside changes in these
assumptions can lead to impairment loss.
• Assessed the adequacy and appropriateness of the disclosures

made in the financial statements.
GOVERNANCE DRIVEN
Information Other than the Financial Statements and Auditors’ Report Thereon
The Directors of the Company are responsible for the other information. The other information comprises the
information included in the annual report but does not include the financial statements of the Group and of the
Company and our auditors’ report thereon.
Our opinion on the financial statements of the Group and of the Company do not cover the other information and we
do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read
the other information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears
to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditors’
report, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Statements
The Directors of the Company are responsible for the preparation of financial statements of the Group and of the
Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International
Financial Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia. The Directors are also
responsible for such internal control as the Directors determine is necessary to enable the preparation of financial
statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the
Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intends to liquidate the Group or
the Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the
Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on
Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial statements of the Group and of the Company.
123
Auditors’ Responsibilities for the Audit of the Financial Statements (Cont’d)
As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on
Auditing, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements of the Group and of the
Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s and of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the Directors.
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s or the Company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in
the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However,
future events or conditions may cause the Group or the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements of the Group and of the
Company, including the disclosures, and whether the financial statements of the Group and of the Company
represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial statements of the Group. We are responsible for
the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, actions taken to eliminate threats or safeguard applied.
GOVERNANCE DRIVEN
Auditors’ Responsibilities for the Audit of the Financial Statements (Cont’d)
From the matters communicated with the Directors, we determine those matters that were of most significance in the
audit of the financial statements of the Group and of the Company of the current period and are therefore the key audit
matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 2016 in Malaysia, we report that the subsidiaries of which
we have not acted as auditors, are disclosed in Note 19 to the financial statements.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies
Act, 2016 in Malaysia and for no other purpose. We do not assume responsibility towards any other person for the
contents of this report.
DELOITTE PLT (LLP0010145-LCA)

Chartered Accountants (AF 0080)
SITI HAJAR BINTI OSMAN

Partner - 03061/04/2021 J
Chartered Accountant
28 October 2020
Kuala Lumpur
125
Statements of Profit or Loss and

other Comprehensive Income
For the financial period from 1 January 2019 to 30 June 2020
(With comparative figures for the year from 1 January 2018 to 31 December 2018)
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
(18 months) (12 months) (18 months) (12 months)
RM’000 RM’000 RM’000 RM’000
Revenue 4 1,462,761 1,228,590 84,197 103,350

Cost of sales 5 (1,365,767) (1,075,269) (27,428) (44,988)
Gross profit 96,994 153,321 56,769 58,362

Other operating income 6,010 1,818 24,351 2,525
Administrative expenses (160,397) (101,784) (47,969) (29,544)
Other operating expenses (19,469) (29,379) (15,533) (1,419)
(Loss)/Profit from operating activities (76,862) 23,976 17,618 29,924
Finance income 6 87,020 62,761 730 3,094

Finance costs 7 (85,945) (61,920) (21,749) (12,758)
Net finance income/(costs) 1,075 841 (21,019) (9,664)

Share of loss of associates, net of tax 20 (3) - - -
(Loss)/Profit before tax 8 (75,790) 24,817 (3,401) 20,260

Income tax expenses 10 (35,438) (16,229) (18) (1,478)
(Loss)/Profit for the period/year (111,228) 8,588 (3,419) 18,782

GOVERNANCE DRIVEN
Statements of Profit or Loss and

other Comprehensive Income
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Other comprehensive (loss)/income, net of tax

Item that may be reclassified subsequently to
profit or loss
Foreign currency translation differences for
foreign operations (7,185) 5,622 435 484
Item that will not be reclassified subsequently

to profit or loss
Actuarial gain from employee benefits 34 407 66 - -
Total other comprehensive (loss)/income for

the period/year (6,778) 5,688 435 484
Total comprehensive (loss)/income for the

period/year (118,006) 14,276 (2,984) 19,266
(Loss)/Profit attributable to:

Owners of the Company (98,321) 14,232 (3,419) 18,782
Non-controlling interests 19 (12,907) (5,644) - -
(Loss)/Profit for the period/year (111,228) 8,588 (3,419) 18,782
Total comprehensive (loss)/income

attributable to:
Owners of the Company (105,558) 19,696 (2,984) 19,266
Non-controlling interests (12,448) (5,420) - -
Total comprehensive (loss)/income

for the period/year (118,006) 14,276 (2,984) 19,266
(Loss)/Earnings per ordinary share (sen) 11

Basic (16.48) 2.39
Diluted (16.48) 2.39
The accompanying Notes form an integral part of the financial statements.

127
Statements of Financial Position

As at 30 June 2020
Group Company
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
ASSETS
Non-Current Assets
Property, plant and equipment 12 592,750 570,113 2,253 3,065
Right-of-use assets 13 8,648 - 70,309 -
Prepaid lease payments 14 21,704 22,577 - -
Land held for development 15 57,970 56,995 - -
Intangible assets 16 18,609 20,955 - -
Concession service assets 17 1,625,946 1,238,196 - -
Goodwill 18 38,887 41,781 - -
Investment in subsidiaries 19 - - 949,042 521,245
Investments in associates 20 2,802 2,805 2,640 2,640
Interests in joint ventures 21 - 34 - 34
Investments in financial assets 22 116 116 68 68
Deferred tax assets 23 27,585 35,474 235 235
Trade and other receivables 24(a) 593,419 607,015 2,163 2,262
Total Non-Current Assets 2,988,436 2,596,061 1,026,710 529,549
Current Assets
Biological assets 25 31 77 - -
Inventories 26 17,516 19,393 - -
Property development costs 27 20,621 17,480 - -
Tax recoverable 5,727 11,339 2,693 2,965
Construction contract assets 24(b) 201,998 368,115 2,475 5,621
Trade and other receivables 24(a) 522,784 640,992 402,011 152,987
Financial assets at fair value through
profit or loss 28 323,821 164,338 - -
Cash and deposits 29 425,292 622,896 60,457 14,936
Total Current Assets 1,517,790 1,844,630 467,636 176,509
Total Assets 4,506,226 4,440,691 1,494,346 706,058

GOVERNANCE DRIVEN
Statements of Financial Position

As at 30 June 2020
Group Company
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
EQUITY AND LIABILITIES
Capital and Reserves

Share capital 30 197,536 197,536 197,536 197,536
Reserves 31 157,562 263,945 38,266 42,075
Equity attributable to owners of the Company 355,098 461,481 235,802 239,611

Non-controlling interests 19 5,438 11,521 - -
Total Equity 360,536 473,002 235,802 239,611
Non-Current and Deferred Liabilities

Loans and borrowings 32 2,612,678 2,308,904 160,523 175,609
Lease liabilities 33 5,183 - 71,082 -
Employee benefits 34 4,935 3,373 - -
Deferred tax liabilities 23 95,973 82,488 - -
Trade and other payables 35 206,957 138,339 - 2,253
Total Non-Current and Deferred Liabilities 2,925,726 2,533,104 231,605 177,862

Current Liabilities
Loans and borrowings 32 371,822 317,491 14,872 25,414
Lease liabilities 33 3,646 - 599 -
Trade and other payables 35 834,174 1,098,072 1,011,468 263,171
Tax liabilities 10,322 19,022 - -
Total Current Liabilities 1,219,964 1,434,585 1,026,939 288,585
Total Liabilities 4,145,690 3,967,689 1,258,544 466,447
Total Equity and Liabilities 4,506,226 4,440,691 1,494,346 706,058

129
Statements of Changes in Equity

Attributable to owners of the Company

Non-distributable Distributable
Foreign
exchange Employees’ Non-
Share Other Warrant translation Share Treasury Retained controlling Total
capital reserve reserve reserve Scheme shares earnings Total interests equity
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group
At 1 January
2019 197,536 872 27,889 16,123 2,331 (1,026) 217,756 461,481 11,521 473,002
Foreign currency
translation
differences
for foreign
operations - 334 - (6,827) - - (1,132) (7,625) 440 (7,185)
Actuarial gain
from employee
benefits - 388 - - - - - 388 19 407
Total other
comprehensive
income/(loss)
for the period - 722 - (6,827) - - (1,132) (7,237) 459 (6,778)
Loss for the
period - - - - - - (98,321) (98,321) (12,907) (111,228)
Total
comprehensive
income/(loss)
for the period - 722 - (6,827) - - (99,453) (105,558) (12,448) (118,006)
GOVERNANCE DRIVEN


Foreign
Adjustment of
share options
granted under
Employees’
Share Scheme
(“ESS”) - - - - (825) - - (825) - (825)
Total distribution
to owners of the
Company - - - - (825) - - (825) - (825)
Dividend paid/
payable to
non-controlling
interest - - - - - - - - (383) (383)
Changes in
ownership
interest in
subsidiary - - - - - - - - 6,748 6,748
Total
transactions
with non-
controlling
interest - - - - - - - - 6,365 6,365
At 30 June 2020 197,536 1,594 27,889 9,296 1,506 (1,026) 118,303 355,098 5,438 360,536
131


Foreign
Group
At 1 January
2018 197,478 - 27,889 11,531 1,000 (1,026) 208,826 445,698 16,941 462,639
Foreign currency
translation
differences
for foreign
operations - - - 5,395 - - - 5,395 227 5,622
Reclassification - 803 - (803) - - - - - -
Actuarial gain/
(loss) from
employee
benefits - 69 - - - - - 69 (3) 66
Total other
comprehensive
income for the
year - 872 - 4,592 - - - 5,464 224 5,688
Profit/(Loss) for
the year - - - - - - 14,232 14,232 (5,644) 8,588
Total
comprehensive
income/(loss)
for the year - 872 - 4,592 - - 14,232 19,696 (5,420) 14,276
GOVERNANCE DRIVEN


Foreign
Note capital reserve reserve reserve Scheme shares earnings Total interests equity
Dividends to
owners of the
Company 36 - - - - - - (5,302) (5,302) - (5,302)
Adjustment of
share options
granted under
Employees’
Share Scheme
(“ESS”) - - - - 1,331 - - 1,331 - 1,331
Issuance of
ordinary shares,
net of issuance
costs 30 58 - - - - - - 58 - 58
Total distribution
to owners of the
Company 58 - - - 1,331 - (5,302) (3,913) - (3,913)
At 31 December
2018 197,536 872 27,889 16,123 2,331 (1,026) 217,756 461,481 11,521 473,002
133


Foreign
exchange Employees’
Share Warrant translation Share Treasury Retained
capital reserve reserve Scheme shares earnings Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Company
At 1 January 2019 197,536 27,889 2,862 2,331 (1,026) 10,019 239,611
Foreign currency translation

differences for foreign
operations - - 435 - - - 435
Total other comprehensive

income for period - - 435 - - - 435
Loss for the period - - - - - (3,419) (3,419)
Total comprehensive income/
(loss) for the period - - 435 - - (3,419) (2,984)
Adjustment of share options

granted under Employees’
Share Scheme (“ESS”) - - - (825) - - (825)
Total distribution to owners

of the Company - - - (825) - - (825)
At 30 June 2020 197,536 27,889 3,297 1,506 (1,026) 6,600 235,802

GOVERNANCE DRIVEN


Foreign Retained
exchange Employees’ earnings/
Share Warrant translation Share Treasury (Accumulated
Note capital reserve reserve Scheme shares losses) Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Company
At 1 January 2018 197,478 27,889 2,378 1,000 (1,026) (3,461) 224,258
Foreign currency
translation differences
for foreign operations - - 484 - - - 484
Total other comprehensive

income for year - - 484 - - - 484
Profit for the year - - - - - 18,782 18,782
Total comprehensive
income
for the year - - 484 - - 18,782 19,266
Dividends to owners of the

Company 36 - - - - - (5,302) (5,302)
Adjustment of share
options granted under
Employees’ Share
Scheme (“ESS”) - - - 1,331 - - 1,331
Issuance of ordinary
shares, net of issuance
costs 30 58 - - - - - 58
Total distribution to
owners of the Company 58 - - 1,331 - (5,302) (3,913)
At 31 December 2018 197,536 27,889 2,862 2,331 (1,026) 10,019 239,611

135
Statements of Cash Flows

Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
CASH FLOWS FROM/

(USED IN) OPERATING ACTIVITIES
(Loss)/Profit before tax (75,790) 24,817 (3,401) 20,260
Adjustments for:
Accretion of fair value on non-current
receivables 6 (84,131) (59,892) - (2,721)
Interest income 6 (2,889) (2,869) (730) (373)
Interest expense 7 83,753 60,425 17,305 12,758
Finance costs on lease liabilities 7 480 - 4,444 -
Employees’ share scheme (gain)/expenses 8 (825) 1,331 (825) 1,331
Allowance for doubtful debt 8 678 - 1,519 -
Bad debt written-off 8 505 - 92 -
Loss/(Gain) on foreign exchange - unrealised 8 8,767 18,700 - (1,048)
Amortisation of transaction costs 7 1,712 1,495 - -
Loss on liquidation of interest in joint
ventures 8 16 - 16 -
Depreciation of property, plant and equipment 12 53,212 27,521 813 549
Depreciation of right-of-use assets 13 8,019 - 2,486 -
Amortisation of prepaid lease payments 14 1,589 1,024 - -
Amortisation of intangible assets 16 2,534 1,690 - -
Impairment of goodwill 18 2,894 - - -
Gain on redemption of redeemable
convertible preference shares (“RCPS”) 19 (iv) - - (21,902) -
Impairment of investments in subsidiaries 19 - - 4,000 -
Share of loss of associates 20 3 - - -
Inventories written-down 26 595 - - -
Employee retirement benefits provision 34 1,810 963 - -
GOVERNANCE DRIVEN

Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Gain on disposal of property, plant and

equipment – net 8 (360) (354) - (69)
Dividend received from subsidiary companies 4 - - (24,387) (36,000)
Fair value loss arising from biological assets 25 46 125 - -
Operating profit/(loss) before working capital
changes 2,618 74,976 (20,570) (5,313)
Changes in working capital:

Decrease in inventories 8,182 5,701 - -
Decrease/(Increase) in construction contract
assets 202,523 (96,181) 3,146 (313)
Increase/(Decrease) in property development
costs (10,477) (4,338) - -
Increase in concession service assets (298,900) (349,094) - -
Decrease/(Increase) in trade and other
receivables 299,267 (31,026) (250,536) 77,580
(Decrease)/Increase in trade and other
payables (283,608) 289,034 746,477 (25,448)
Decrease in advance billings from property
development - (1,668) - -
Cash (Used In)/Generated From Operations (80,395) (112,596) 478,517 46,506

Interest received 2,889 2,869 730 373
Retirement benefits paid (167) (153) - -
Income tax paid - net (16,641) (19,835) 254 (934)
Net Cash (Used In)/From Operating Activities (94,314) (129,715) 479,501 45,945
137

Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
CASH FLOWS FROM/(USED IN) INVESTING

ACTIVITIES
Addition of land held for development 15 (539) (8,719) - -
Purchase of leasehold land 14 - (401) - -
RCPS subscription, net of discount 19(iv) - - (344,005) -
Proceeds from redemption of RCPS 19(iv) - - 61,350 -
Increase in investments in subsidiaries 19 - - (127,240) (98,113)
Impact of changes in ownership of interest in
subsidiary 19 6,748 - - -
Increase in investments in associates 20 - (2,640) - (2,640)
(Addition)/Withdrawal of financial assets at
fair value through profit or loss (159,483) 535,172 - -
Proceeds from disposal of property, plant and
equipment 14,258 410 - 86
Purchase of property, plant and equipment (i) (60,318) (86,614) - (2,051)
Proceeds from liquidation of interest in joint
ventures 18 - 18 -
Dividend received from subsidiary companies 4 - - 24,387 36,000
Acquisition of intangible assets 16 (184) (27) - -
Net Cash (Used In)/From Investing Activities (199,500) 437,181 (385,490) (66,718)
CASH FLOWS FROM/(USED IN) FINANCING

ACTIVITIES
Decrease/(Increase) in pledged cash and
deposits 7,404 (11,641) 10,160 (5,160)
Interest paid (211,631) (144,123) (17,305) (12,758)
Dividend paid (383) (5,302) - (5,302)
Repayments of lease liabilities (7,838) - (5,558) -
Repayments of finance lease liabilities (net) (17,623) (389) (627) (274)
Proceeds from drawdown of loans and
borrowings 258,641 531,555 - 44,080
Repayments of loans and borrowings (466,537) (351,230) (25,000) (180)
GOVERNANCE DRIVEN

Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Increase in share capital, net of issuance cost - 58 - 58

Proceeds from issuance of Sukuk 535,000 - - -
Net Cash From/(Used In) Financing Activities 97,033 18,928 (38,330) 20,464
NET (DECREASE)/INCREASE IN CASH AND

CASH EQUIVALENTS (196,781) 326,394 55,681 (309)
CASH AND CASH EQUIVALENTS AT

BEGINNING OF THE PERIOD/YEAR 497,838 171,444 4,776 5,085
CASH AND CASH EQUIVALENTS AT END OF

THE PERIOD/YEAR (ii) 301,057 497,838 60,457 4,776
(i) Acquisition of property, plant and equipment
During the financial period, the Group and the Company acquired property, plant and equipment with aggregate
costs of RM75,332,000 (2018: RM102,915,000) and RMNil (2018: RM2,051,000) respectively, which were satisfied
as follows:
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Finance lease liabilities 9,059 12,714 - -

Capitalisation of finance costs 5,955 3,587 - -
Cash payments 60,318 86,614 - 2,051
75,332 102,915 - 2,051

139

(ii) Cash and cash equivalents
Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial
position amounts:
Cash and cash equivalents
Group Company
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Deposits placed with licensed banks 128,723 63,791 53,439 13,468

Cash and bank balances 296,569 559,105 7,018 1,468
29 425,292 622,896 60,457 14,936
Less: Bank overdrafts 32 (38,673) (32,092) - -

Pledged deposits 29 (85,562) (92,966) - (10,160)
301,057 497,838 60,457 4,776
(iii) Reconciliation of movement of liabilities to cash flows arising from financing activities
The movement of loan and borrowings in the statements of cash flows is as follows:
Group
Net changes Effect of At 30 June
from movements Other 2020/
At 1 January financing in foreign non-cash 31 December
2019/2018 cash flows exchange changes 2018
RM’000 RM’000 RM’000 RM’000 RM’000
2020
Lease liabilities - (7,838) - 16,667 8,829
Finance lease liabilities 34,980 (17,623) - 9,059 26,416
Loan and borrowings 2,559,323 327,104 22,505 10,479 2,919,411
Total liabilities from financing

activities 2,594,303 301,643 22,505 36,205 2,954,656
2018
Finance lease liabilities 35,369 (389) - - 34,980
Loan and borrowings 2,364,789 180,325 14,209 - 2,559,323

activities 2,400,158 179,936 14,209 - 2,594,303
GOVERNANCE DRIVEN

Company
Net changes Effect of At 30 June
from movements Other 2020/
At 1 January financing in foreign non-cash 31 December
2019/2018 cash flows exchange changes 2018
RM’000 RM’000 RM’000 RM’000 RM’000
2020
Lease liabilities - (1,114) - 72,795 71,681
Finance lease liabilities 1,023 (628) - - 395
Loan and borrowings 200,000 (25,000) - - 175,000

activities 201,023 (26,742) - 72,795 247,076
2018
Finance lease liabilities 1,297 (274) - - 1,023
Loan and borrowings 156,100 43,900 - - 200,000

activities 157,397 43,626 - - 201,023

141
Notes to the Financial Statements

1. GENERAL INFORMATION
The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the
Main Market of Bursa Malaysia Securities Berhad.
The consolidated financial statements of the Company as at and for the financial period from 1 January 2019
to 30 June 2020 comprise financial statements of the Company and its subsidiaries (together referred to as
the “Group” and individually referred to as “Group entities”) and the Group’s interests in associates and joint
ventures. The financial statements of the Company as at and for the financial period from 1 January 2019 to 30
June 2020 do not include other entities.
The Company is principally engaged in investment holding, providing management services and as contractor of
civil and structural works.
The information on the name, principal activities, country of incorporation and proportion of ownership interest
and voting power held by the Company in each subsidiary and associate is disclosed in Note 19 and Note 20
respectively.
During the financial period, the Group and the Company have changed their financial year end from 31 December
to 30 June to avoid the peak financial reporting period in December. Accordingly, the financial statements of the
Group and the Company for the current financial period are drawn up for a period of eighteen (18) months from
1 January 2019 to 30 June 2020, whereas comparative amounts are presented for a period of 12 months from 1
January 2018 to 31 December 2018. Therefore, the amounts presented in Statements of Profit or Loss and Other
Comprehensive Income, Statements of Changes in Equity and Statements of Cash Flows are not comparable with
the amounts presented for comparative year.
The Company’s registered office and principal place of business is located at Menara AZRB, No. 71, Persiaran
Gurney, 54000 Kuala Lumpur.
These financial statements were authorised for issue by the Board of Directors on 28 October 2020.
2. BASIS OF PREPARATION
2.1 Basis of Preparation of the Financial Statements
The financial statements of the Group and of the Company have been prepared in accordance with Malaysian
Financial Reporting Standards (“MFRS”), International Financial Reporting Standards and the requirements
of the Companies Act, 2016 in Malaysia.
GOVERNANCE DRIVEN

2. BASIS OF PREPARATION (CONT’D)
2.2 Adoption of New MFRSs, Amendments to MFRSs, and Issues Committee Interpretations (“IC
Interpretations”)
In the current financial period, the Group and the Company adopted all the new MFRSs, amendments to
MFRSs and IC Interpretations issued by the Malaysian Accounting Standards Board (“MASB”) that are
relevant to their operations and effective for annual financial periods commencing on or after 1 January
2019:
MFRS 16 Leases
Amendments to:
MFRS 9 Prepayment Features with Negative Compensation
MFRS 119 Plan Amendment, Curtailment or Settlement
MFRS 128 Long-term Interests in Associates and Joint Ventures
IC Interpretation 23 Uncertainty over Income Tax Payments
Annual Improvements to MFRSs 2015 - 2017 Cycle
The adoption of these new MFRSs, Amendments to MFRSs, and IC Interpretation did not result in significant
changes to the accounting policies of the Group and the Company and has no significant effect on the
financial performance or position of the Group and of the Company except for the adoption of MFRS 16 as
disclosed in Note 46.
2.3 New MFRSs and Amendments to MFRSs in issue but not yet effective
At the date of authorisation for issue of these financial statements, the new MFRSs and Amendments to
MFRSs which were in issue but not yet effective and not early adopted by the Group and the Company are as
listed below:
MFRS 17 Insurance Contracts4

Amendments to:
MFRS 3 Definition of a Business1
MFRS 3 Reference to Conceptual Framework3
MFRS 16 COVID-19 Related Rent Concessions2
MFRS 9, MFRS 139
and MFRS 7 Interest Rate Benchmark Reform1
MFRS 101 Classification of Liabilities as Current or Non-Current4
MFRS 101 and MFRS 108 Definition of Material1
MFRS 116 Property, Plant and equipment - Proceeds before Intended Use3
MFRS 10 and MFRS 128 Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture5
MFRS 137 Onerous Contracts - Cost of Fulfilling a Contract3
Annual Improvements to MFRSs 2018 - 2020 Cycle3
Amendments to References to the Conceptual Framework in MFRS Standards1
143

2. BASIS OF PREPARATION (CONT’D)
2.3 New MFRSs and Amendments to MFRSs in issue but not yet effective (Cont’d)
1 Effective for annual periods beginning on or after 1 January 2020, with earlier application permitted.
2 Effective for annual periods beginning on or after 1 June 2020, with earlier application permitted.
5 Effective date deferred to a date to be determined and announced by MASB, with earlier application still
permitted.
The Directors anticipate that the abovementioned MFRSs and Amendments to MFRSs will be adopted in
the annual financial statements of the Group and of the Company when they become effective and that
the adoption of these MFRSs and Amendments to MFRSs will have no material impact on the financial
statements of the Group and of the Company in the period of initial application, except for the Amendments
to MFRS 16 on COVID-19 related rent concessions.
The Group and the Company have not early adopted Amendments to MFRS 16 on COVID-19 related rent
concessions. The Directors anticipate that the application of Amendment to MFRS 16 on COVID-19 related
rent concession is not expected to have a material impact on the amounts reported and disclosures made in
the financial statements of the Group and the Company. However, it is not practical to provide a reasonable
estimate of the financial impact of Amendments to MFRS 16 on COVID-19 related rent concessions until the
Group and the Company complete a detailed review.
Further, during the period, the IFRS Interpretations Committee (“IFRIC”) issued an agenda decision related
to capitalisation of borrowing cost on qualifying assets. On 20 March 2019, MASB announced that an entity
shall apply the change in accounting policy as a result of the IFRIC Agenda Decision to financial statements
of annual periods beginning on or after 1 July 2020.
The Group and the Company are currently assessing the impact to the financial statements on the change in
accounting policy pursuant to the IFRIC Agenda Decision.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to the periods presented in these financial
statements, and have been applied consistently by the Group entities.
3.1 Basis of accounting
The financial statements of the Group and the Company have been prepared under the historical cost
convention, except as stated in the accounting policies explained below. Historical cost is generally based on
the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants as at the measurement date, regardless of whether that price is
directly observable or estimated using another valuation technique. In estimating the fair value of an asset
or a liability, the Group and the Company take into account the characteristics of the asset or liability if
market participants would take those characteristics into account when pricing the asset or liability at the
measurement date.
GOVERNANCE DRIVEN

3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.1 Basis of accounting (Cont’d)
Fair value for measurement and/or disclosure purposes in these consolidated financial statements is
determined on such a basis, except for share-based payment transactions that are within the scope of MFRS
2, leasing transactions that are within the scope of MFRS 16, and measurements that have some similarities
to fair value but are not fair value, such as net realisable value in MFRS 102 or value in use in MFRS 136.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3
based on the degree to which the inputs to the fair value measurements are observable and the significance
of the inputs to the fair value measurement in its entirety, which are described as follows:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date;
• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the
asset or liability, either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.
3.2 Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional
currency. All financial information is presented in RM unless otherwise stated.
3.3 Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities, including structured entities, controlled by the Company. The financial
statements of subsidiaries are included in the consolidated financial statements from the date that
control commences until the date that control ceases.
Control is defined as follows:
• Control exists when the Company is exposed, or has rights, to variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity.
• Potential voting rights are considered when assessing control only when such rights are substantive.
• The Company considers it has de facto power over an investee when, despite not having the majority
of voting rights, it has the current ability to direct the activities of the investee that significantly
affect the investee’s return.
Investments in subsidiaries are measured in the Company’s statement of financial position at cost less
any impairment losses, unless the investment is classified as held for sale or distribution. The cost of
investments includes transaction costs.
The accounting policies of subsidiaries are changed when necessary to align them with the policies
adopted by the Group.
145

3.3 Basis of consolidation (Cont’d)
(ii) Business combinations
Business combinations are accounted for using the acquisition method from the acquisition date, which
is the date on which control is transferred to the Group.
For new acquisitions, the Group measures the cost of goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus

• the recognised amount of any non-controlling interests in the acquiree; plus
• if the business combination is achieved in stages, the fair value of the existing equity interest in the
acquiree; less
• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities
assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
For each business combination, the Group elects whether it measures the non-controlling interests in
the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets at
the acquisition date.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group
incurs in connection with a business combination are expensed as incurred.
Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former
subsidiary, any non-controlling interests and the other components of equity related to the former
subsidiary from the consolidated statement of financial position. Any surplus of deficit arising on the
loss of control is recognised in profit or loss. If the Group retains any interest in the former subsidiary,
then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted
for as an equity accounted investee or as a financial asset depending on the level of influence retained.
(iii) Associates
Associates are entities, including unincorporated entities, in which the Group has significant influence,
but not control, over the financial and operating policies.
Investments in associates are accounted for in the consolidated financial statements using the equity
method less any impairment losses, unless the investment is classified as held for sale or distribution.
The cost of the investment includes transaction costs. The consolidated financial statements include the
Group’s share of the profit or loss and other comprehensive income of the associates, after adjustments,
if any, to align the accounting policies with those of the Group, from the date that significant influence
commences until the date that significant influence ceases.
GOVERNANCE DRIVEN

(iii) Associates (Cont’d)
When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that
interest including any long-term investments is reduced to zero, and the recognition of further losses is
discontinued except to the extent that the Group has an obligation or has made payments on behalf of
the associate.
When the Group ceases to have significant influence over an associate, any retained interest in the
former associate at the date when significant influence is lost is measured at fair value and this amount
is regarded as the initial carrying amount of a financial asset. The difference between the fair value
of any retained interest plus proceeds from the interest disposed of and the carrying amount of the
investment at the date when equity method is discontinued is recognised in the profit or loss.
When the Group’s interest in an associate decreases but does not result in a loss of significant influence,
any retained interest is not re-measured. Any gain or loss arising from the decrease in interest is
recognised in profit or loss. Any gains or losses previously recognised in other comprehensive income
are also reclassified proportionately to the profit or loss if that gain or loss would be required to be
reclassified to profit or loss on the disposal of the related assets or liabilities.
Investments in associates are measured in the Company’s statement of financial position at cost less
any impairment losses unless the investment is classified as held for sale or distribution. The cost of
the investments includes transaction costs.
(iv) Joint arrangements
Joint arrangements are arrangements of which the Group has joint control, established by contracts
requiring unanimous consent for decisions about the activities that significantly affect the arrangements’
returns.
Joint arrangements are classified and accounted for as follows:
• A joint arrangement is classified as “joint operation” when the Group or the Company has rights
to the assets and obligations for the liabilities relating to an arrangement. The Group and the
Company account for each of their share of the assets, liabilities and transactions, including its
share of those held or incurred jointly with the other investors, in relation to the joint operation.
• A joint arrangement is classified as “joint venture” when the Group has rights only to the net
assets of the arrangements. The Group accounts for its interest in the joint venture using the
equity method. Investments in joint venture are measured in the Company’s statement of financial
position at cost less any impairment losses, unless the investment is classified as held for sale or
distribution. The cost of investment includes transaction costs.
147

(v) Non-controlling interests
Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable
directly or indirectly to the equity holders of the Company, are presented in the consolidated statement
of financial position and statement of changes in equity within equity, separately from equity attributable
to the owners of the Company. Non-controlling interests in the results of the Group is presented in the
consolidated statement of profit or loss and other comprehensive income as an allocation of the profit
or loss and the comprehensive income for the period/year between non-controlling interests and the
owners of the Company.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling
interests even if doing so causes the non-controlling interests to have a deficit balance.
(vi) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-
group transactions, are eliminated in preparing the consolidated financial statements.
Unrealised gains arising from transactions with equity-accounted associates and joint ventures are
eliminated against the investment to the extent of the Group’s interest in the investees. Unrealised
losses are eliminated in the same way as unrealised gains, but only to the extent that there is no
evidence of impairment.
3.4 Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group
entities at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period
are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets
and liabilities denominated in foreign currencies are not retranslated at the end of the reporting period
except for those that are measured at fair value that are retranslated to the functional currency at the
exchange rate at the date that the fair value was determined.
Foreign currency differences arising on retranslation are recognised in profit or loss, except for
differences arising on the retranslation of available-for-sale equity instruments, which are recognised
in other comprehensive income.
GOVERNANCE DRIVEN

3.4 Foreign currency (Cont’d)
(i) Foreign currency transactions (Cont’d)
In the consolidated financial statements, when settlement of a monetary item receivable from or
payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange
gains and losses arising from such a monetary item are considered to form part of a net investment in a
foreign operation and are recognised in other comprehensive income, and are presented in the foreign
exchange translation reserve (“FETR”) in equity.
(ii) Operations denominated in functional currencies other than Ringgit Malaysia (“RM”)
The assets and liabilities of operations denominated in functional currencies other than RM, including
goodwill and fair value adjustments arising on acquisition, are translated to RM at exchange rates at
the end of the reporting period, except for goodwill and fair value adjustments arising from business
combinations before 1 January 2006 which are reported using the exchange rates at the dates of the
acquisitions. The income and expenses of foreign operations, are translated to RM at exchange rates at
the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income and accumulated in
the FETR in equity. However, if the operation is a non-wholly owned subsidiary, then the relevant
proportionate share of the translation difference is allocated to the non-controlling interests. When
a foreign operation is disposed of, such that control, significant influence or joint control is lost, the
cumulative amount in the FETR related to that foreign operation is reclassified to profit or loss as part
of profit or loss on disposal.
When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, the
relevant proportion of the cumulative amount is reattributed to non-controlling interests.
When the Group disposes of only part of its investment in an associate or joint venture that includes
a foreign operation while retaining significant influence or joint control, the relevant proportion of the
cumulative amount is reclassified to profit or loss.
3.5 Financial instruments
(i) Recognition and initial measurement
A financial asset or a financial liability is recognised in the statements of financial position when, and
only when, the Group or the Company becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without significant financing component) or a financial
liability is initially measured at fair value plus or minus, for an item not at fair value through profit or
loss, transaction costs that are directly attributable to its acquisition or issuance. A trade receivable
without a significant financing component is initially measured at the transaction price.
149

3.5 Financial instruments (Cont’d)
(ii) Financial instrument categories and subsequent measurement
Financial assets
Categories of financial assets are determined on initial recognition and are not reclassified subsequent
to their initial recognition unless the Group or the Company changes its business model for managing
financial assets in which case all affected financial assets are reclassified on the first day of the first
reporting period following the change of the business model.
(a) Amortised cost
Amortised cost category comprises financial assets that are held within a business model whose
objectives is to hold assets to collect contractual cash flows and its contractual terms give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding. The financial assets are not designated as fair value through profit or loss.
Subsequent to initial recognition, these financial assets are measured at amortised cost using the
effective interest method. The amortised cost is reduced by impairment losses. Interest income,
foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss
on derecognition is recognised in profit or loss.
(b) Fair value through other comprehensive income (“FVTOCI”)
This category comprises investment in equity that is not held for trading, and the Group and the
Company irrevocably elect to present subsequent changes in the investment’s fair value in other
comprehensive income. This election is made on an investment-by-investment basis. Dividends
are recognised as income in profit or loss unless the dividend clearly represents a recovery of
part of the cost of investment. Other net gains and losses are recognised in other comprehensive
income. On derecognition, gains and losses accumulated in other comprehensive income are not
reclassified to profit or loss.
(c) Fair value through profit or loss (“FVTPL”)
All financial assets not measured at amortised cost or FVTOCI as described above are measured
at FVTPL. On initial recognition, the Group or the Company may irrevocably designate a financial
asset that otherwise meets the requirements to be measured at amortised cost or at FVTOCI as at
FVTPL if doing so eliminate or significantly reduces an accounting mismatch that would otherwise
arise.
Financial assets categorised at FVTPL are subsequently measured at their fair value. Net gains or
losses, including any interest or dividend income, are recognised in the profit or loss.
All financial assets, except for those measured at FVTPL and equity investments measured at FVTOCI,
are subject to impairment assessment.
GOVERNANCE DRIVEN

(ii) Financial instrument categories and subsequent measurement (Cont’d)
Financial liabilities
Financial liabilities are classified as measured at amortised cost or FVTPL.
A financial liability is any liability with contractual obligation to deliver cash or another financial asset
to another enterprise, or to exchange financial instruments with another enterprise under conditions
that are potentially unfavourable.
(a) Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when financial liabilities are either held for trading
or it is designated as at FVTPL. Financial liabilities at FVTPL are measured at fair value at the end
of each reporting period, with any fair value gains or losses recognised in profit or loss.
For financial liabilities where it is designated as fair value through profit or loss upon initial
recognition, the Group and the Company recognise the amount of change in fair value of the
financial liability that is attributable to change in credit risk in the other comprehensive income
and remaining amount of the change in fair value in the profit or loss, unless the treatment of the
effects of changes in the liability’s credit risk would create or enlarge an accounting mismatch.
(b) Financial liabilities measured subsequently at amortised cost
Financial liabilities that are not held for trading, or designated as at FVTPL, are measured
subsequently at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash payments (including all fees and points paid or received
that form an integral part of the effective interest rate, transaction costs and other premiums
or discounts) through the expected life of the financial liability, or (where appropriate) a shorter
period, to the amortised cost of a financial liability.
The Group’s and the Company’s significant financial liabilities include trade and other payables,
loans and borrowings and lease liabilities which are initially measured at fair value and subsequently
measured at amortised cost.
151

(ii) Financial instrument categories and subsequent measurement (Cont’d)
Derecognition
A financial asset or a part of it is derecognised when, and only when the contractual rights to the
cash flows from the financial asset expire or the financial asset is transferred to another party without
retaining control or substantially all risks and rewards of the asset. On derecognition of a financial
asset, the difference between the carrying amount and the sum of the consideration received (including
any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been
recognised in equity is recognised in profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the
contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference
between the carrying amount of the financial liability extinguished or transferred to another party and
the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised
in profit or loss.
3.6 Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less any accumulated depreciation and
any accumulated impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset and any other
costs directly attributable to bringing the asset to working condition for its intended use, and the costs
of dismantling and removing the items and restoring the site on which they are located. The cost of
self-constructed assets also includes the cost of materials and direct labour. For qualifying assets,
borrowing costs are capitalised in accordance with the accounting policy on borrowing costs.
The cost of property, plant and equipment recognised as a result of a business combination is based on
fair value at acquisition date. The fair value of property is the estimated amount for which a property
could be exchanged between knowledgeable willing parties in an arm’s length transaction after proper
marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The
fair value of other items of plant and equipment is based on the quoted market prices for similar items
when available and replacement cost when appropriate.
When significant parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the
proceeds from disposal with the carrying amount of property, plant and equipment and is recognised
net within “other operating income” and “other operating expenses” respectively in profit or loss.
GOVERNANCE DRIVEN

3.6 Property, plant and equipment (Cont’d)
(ii) Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the
carrying amount of the item if it is probable that the future economic benefits embodied within the
component will flow to the Group or the Company, and its cost can be measured reliably. The carrying
amount of the replaced component is derecognised to profit or loss. The costs of the day-to-day servicing
of property, plant and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual
assets are assessed, and if a component has a useful life that is different from the remainder of that
asset, then that component are depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of
each component of an item of property, plant and equipment. Leased assets are depreciated over the
shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain
ownership by the end of the lease term.
Freehold land is not depreciated.
Property, plant and equipment under construction are not depreciated until the assets are ready for
their intended use.
Bearer plants are living plants that are used in the production or supply of agriculture produce for
more than one period and have remote likelihood of being sold as agriculture produce. The bearer
plants that are available for use are measured at cost less accumulated depreciation and accumulated
impairment losses. Cost includes plantation expenditure, which represents the total cost incurred
from land clearing to the point of harvesting such as seedling and planting costs, capitalisation of
interest expense on loans and advances utilised to finance on-going planting costs. All costs directly
related to bearer plants are capitalised until such time as the bearer plants reach maturity, at which
point all further costs and interests are expensed and depreciation commences. Upon maturity, these
expenditures are depreciated based on estimated annual yield over 25 years.
Depreciation of other property, plant and equipment is provided for on a straight-line basis to write off
the cost of each asset to its residual value over the estimated useful life, at the following annual rates:
• Buildings 2%
• Renovation 20%
• Machinery and equipment 10% - 33.3%
• Motor vehicles 20% - 33.3%
• Furniture, fittings and equipment 6.7% - 20%
Depreciation methods, useful lives and residual values are reviewed at the end of the reporting period,
and adjusted as appropriate.
153

3.7 Leased assets
Accounting policies applied from 1 January 2019
As disclosed in Note 46, the Group and the Company have applied MFRS16 using cumulative catch-up
approach as allowed under MFRS16, therefore, the Comparative information presented for 2018 have not
been restated.
(i) As Lessee
The Group and the Company assess whether a contract is or contains a lease, at inception of the
contract. The Group and the Company recognise a right-of-use asset and a corresponding lease liability
with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined
as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the
Group and the Company recognise the lease payments as an operating expense on a straight-line basis
over the term of the lease unless another systematic basis is more representative of the time pattern in
which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at
the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily
determined, the Group and the Company use the incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
• fixed lease payments (including in-substance fixed payments), less any lease incentives;
• variable lease payments that depend on an index or rate, initially measured using the index or rate
at the commencement date;
• the amount expected to be payable by the lessee under residual value guarantees;
• the exercise price of purchase options, if the lessee is reasonably certain to exercise the options;
and
• payments of penalties for terminating the lease, if the lease term reflects the exercise of an option
to terminate the lease.
The lease liability is presented as a separate line in the statements of financial position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the
lease liability by using the effective interest method and by reducing the carrying amount to reflect the
lease payments made.
GOVERNANCE DRIVEN

3.7 Leased assets (Cont’d)
Accounting policies applied from 1 January 2019 (Cont’d)
(i) As Lessee (Cont’d)
The Group and the Company remeasure the lease liability and make a corresponding adjustment to the
related right-of-use asset whenever:
• the lease term has changed or there is a significant event or change in circumstances resulting
in a change in the assessment of exercise of a purchase option, in which case the lease liability is
remeasured by discounting the revised lease payments using a revised discount rate;
• the lease payments change due to changes in an index or rate or change in expected payment
under a guaranteed residual value, in which cases the lease liability is remeasured by discounting
the revised lease payments using the initial discount rate, unless the lease payments change is
due to a change in a floating interest rate, in which case a revised discount rate is used; or
• a lease contract is modified and the lease modification is not accounted for as a separate lease,
in which case the lease liability is remeasured by discounting the revised lease payments using a
revised discount rate at the effective date of the modification.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease
payments made at or before the commencement day, less any lease incentives received and any initial
direct costs. They are subsequently measured at cost less accumulated depreciation and impairment
losses.
Whenever the Group and the Company incur an obligation for costs to dismantle and remove a leased
asset, restore the site on which it is located or restore the underlying asset to the condition required by
the terms and conditions of the lease, a provision is recognised and measured under MFRS 137, to the
extent that the costs relate to a right-of-use asset. The costs are included in the related right-of-use
asset, unless those costs are incurred to produce inventories.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the
underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use
asset reflects that the Group and the Company expect to exercise a purchase option, the related right-
of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the
commencement date of the lease.
The right-of-use assets are presented as a separate line in the statements of financial position.
The Group and the Company apply MFRS 136 to determine whether a right-of-use asset is impaired and
accounts for any identified impairment loss as described in Note 13.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease
liability and the right-of-use asset. The related payments are recognised as an expense in the period in
which the event or condition that triggers those payments occurs and are included in profit or loss.
155

Accounting policies applied from 1 January 2019 (Cont’d)
(ii) As Lessor
Leases for which the Group or the Company is a lessor are classified as finance or operating leases.
Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the
lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
When the Group or the Company is an intermediate lessor, it accounts for the head lease and the
sublease as two separate contracts. The sublease is classified as a finance or operating lease by
reference to the right-of-use asset arising from the head lease.
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant
lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the
carrying amount of the leased asset and recognised on a straight-line basis over the lease term.
Amount due from lessees under finance leases are recognised as receivables at the amount of the
Group’s or the Company’s net investment in the leases. Finance lease income is allocated to financial
period so as to reflect a constant periodic rate of return on the Group’s or the Company’s net investment
outstanding in respect of the leases.
When a contract includes lease and non-lease components, the Group and the Company apply MFRS 15
to allocate the consideration under the contract to each component.
Accounting policies applied until 31 December 2018
(i) Finance lease
As lessee
Leases in terms of which the Group and the Company assume substantially all the risks and rewards
of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at
an amount equal to the lower of its fair value and the present value of the minimum lease payments.
Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy
applicable to that asset.
Minimum lease payments made under finance leases are apportioned between the finance expense
and the reduction of the outstanding liability. The finance expense is allocated to each period during
the lease term so as to produce a constant periodic rate of interest on the remaining balance of the
liability. Contingent lease payments are accounted for by revising the minimum lease payments over
the remaining term of the lease when the lease adjustment is confirmed.
GOVERNANCE DRIVEN

Accounting policies applied until 31 December 2018 (Cont’d)
(i) Finance lease (Cont’d)
As lessor
The Group shall recognise assets held under a finance lease in its statements of financial position and
present them as a receivable at an amount equal to the net investment in the lease.
Under a finance lease, substantially all the risks and rewards incidental to legal ownership are
transferred by the Group, and thus the lease payment receivable is treated by the Group as repayment
of principal and finance income to reimburse and reward the Group for its investment and services.
Initial direct costs are often incurred by the Group and include amounts such as commissions, legal
fees and internal costs that are incremental and directly attributable to negotiating and arranging a
lease. These costs are included in the initial measurement of the finance lease receivable and reduce
the amount of income recognised over the lease term.
(ii) Operating lease
Leases, where the Group or the Company does not assume substantially all the risks and rewards of
ownership are classified as operating leases and, except for property interest held under operating
lease, the leased assets are not recognised in the statement of financial position. Property interest
held under an operating lease, which is held to earn rental income or for capital appreciation or both, is
classified as investment property and measured using fair value model.
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the
term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the
total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the
reporting period in which they are incurred.
Leasehold land which in substance is an operating lease is classified as prepaid lease payments.
3.8 Land held for development
Land held for property development consists of land on which no significant development work has been
undertaken other than earthwork, infrastructure work and professional fees incurred to put the land ready
for development or where development activities are not expected to be completed within the normal
operating cycle. Such land is classified as non-current asset and is stated at the lower of cost and net
realisable value.
Costs associated with the acquisition of land include the purchase price of the land, professional fees, stamp
duties, commissions, conversion fees and other relevant levies.
157

3.8 Land held for development (Cont’d)
Net realisable value is the estimated selling price in the ordinary course of business, less the costs of
completion and applicable variable selling expenses.
Land held for property development is transferred to property development costs (under current assets)
when development activities have commenced and where the development activities can be completed
within the Group’s normal operating cycle.
3.9 Biological assets
The biological assets of the Group comprised produce growing on bearer plants, which are fresh fruit
bunches (“FFB”) prior to harvest. Biological assets are measured on initial recognition and at the end of
each reporting period at its fair value less costs to sell.
Any gains or losses arising from changes in the fair value less costs to sell are recognised in profit or loss.
Fair value is determined based on present value of expected net cash flows from the produce growing on
bearer plants. The expected net cash flow is estimated using expected output method and the estimated
market price of the produce growing on bearer plants. Cost to sell consists of harvesting costs at the point
of harvest.
Biological assets are classified as current assets for bearer plants that are expected to be harvested on a
date not more than 12 months after the end of the reporting period.
At the time of harvest, produces are measured at fair value less costs to sell and transferred to inventories.
3.10 Intangible assets
(i) Concession asset
Concession asset comprising highway concession is stated at cost less any accumulated amortisation
and any impairment losses.
Highway concession cost include expenditure that is directly incurred in the design and construction of
the East Klang Valley Expressway. Subsequent costs are included in the asset’s carrying amount, only
when it is probable that future economic benefits associated with the item will flow to the Group and the
cost can be measured reliably. All other repair and maintenance are charged to profit or loss during the
financial period in which they are incurred.
The highway concession cost will be amortised when the highway is ready for its intended use or when
toll collection starts whichever is earlier.
At the end of each reporting period, the Group assesses whether there is any indication of impairment.
If such indications exist, the carrying amount of the highway concession is assessed and written down
immediately to its recoverable amount.
GOVERNANCE DRIVEN

3.10 Intangible assets (Cont’d)
(i) Concession asset (Cont’d)
In accordance with IC Interpretation 12 Service Concession Arrangements, revenue associated with

construction works under the Concession Agreement shall be recognised and measured in accordance
with MFRS 15 Revenue from Contracts with Customers when or as a performance obligation in the
contract is satisfied. Revenue generated by construction work rendered by the Group is measured at
fair value of the consideration received or receivable.
In order to determine the construction revenue to be recognised, the Directors have estimated and
recognised a construction margin in the construction of the infrastructure asset. The estimated margin
is based on relative comparison with general industry trend although actual margins may differ.
(ii) Other Intangible Assets
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and recognised separately from goodwill are
initially recognised at their fair value at the acquisition date (which is regarded as their cost). Subsequent
to initial recognition, intangible assets acquired in a business combination are reported at cost less
accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets
that are acquired separately.
Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated
amortisation and accumulated impairment losses. Amortisation is recognised on a straight line basis
over their estimated useful lives. The estimated useful life and amortisation method are reviewed at
the end of each reporting period, with the effect of any changes in estimate being accounted for on a
prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried
at cost less accumulated impairment losses.
Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected
from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as
the difference between the net disposal proceeds and the carrying amount of the asset, are recognised
in profit or loss when the asset is derecognised.
At each reporting date, the Group assesses whether there is any indication of impairment. If such
indications exist, the carrying amount of intangible assets is assessed and written down immediately to
its recoverable amount.
159

3.10 Intangible assets (Cont’d)
(iii) Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition
of the business less accumulated impairment losses, if any.
3.11 Inventories
(i) Marine fuels and lubricants
Inventories are measured at the lower of cost and net realisable value.
The cost of inventories is measured based on the weighted average cost formula, and includes
expenditure incurred in acquiring the inventories and other costs incurred in bringing them to their
existing location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated
costs necessary to make the sale.
(ii) Completed properties held for sale
Completed properties held for sale are stated at the lower of cost and net realisable value. Cost consists
of costs associated with the acquisition of land, direct costs and appropriate proportion of common
costs attributable to developing the properties to completion.
3.12 Contract assets and contract liabilities
Contract asset is the right to consideration in exchange for goods or services transferred to the customers.
The Group’s and the Company’s contract asset is the excess of cumulative revenue earned over the billings
to-date.
Where there is an objective evidence of impairment, the amount of impairment losses is determined by
comparing the contract asset’s carrying amount and the present value of estimated future cash flows to be
generated by the contract asset.
Contract asset is reclassified to trade receivables at the point at which invoices have been billed to customers.
Contract liability is the obligation to transfer goods or services to customers for which the Group and the
Company have received the consideration or have billed the customers. The Group’s and the Company’s
contract liability is the excess of the billings to-date over the cumulative revenue earned. Contract liabilities
are recognised as revenue when the Group and the Company perform their obligation under the contract.
GOVERNANCE DRIVEN

3.13 Property development costs
Property development costs are determined based on a specific identification basis. Property development
costs comprising costs of land, direct materials, direct labour, other direct costs, attributable overheads
and payments to subcontractors that meet the definition of inventories are recognised as an asset and
are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price
in the ordinary course of business, less the estimated costs of completion and applicable variable selling
expenses. The asset is subsequently recognised as an expense in profit or loss when or as the control of the
asset is transferred to the customer over time or at a point in time.
3.14 Statements of cash flows and cash and cash equivalents
The Group and the Company adopt the indirect method in the preparation of statements of cash flows.
Cash and cash equivalents consist of cash on hand, balances and deposits placed with licensed banks and
highly liquid investments which have an insignificant risk of changes in fair value with original maturities of
three months or less, and are used by the Group and the Company in the management of their short-term
commitments. For the purpose of the statements of cash flows, cash and cash equivalents are presented net
of bank overdrafts and pledged deposits.
3.15 Impairment
(i) Financial assets
The Group and the Company recognise a loss allowance for expected credit losses (“ECL”) on all trade
and other receivables and contract assets. The amount of expected credit losses is updated at the
end of each reporting period to reflect changes in credit risk since initial recognition of the respective
financial instrument.
The Group and the Company recognise lifetime ECL for trade receivables and construction contract
assets. The expected credit losses on these financial assets are estimated based on the Group’s and
the Company’s historical credit loss experience, adjusted for factors that are specific to the debtors,
general economic conditions and an assessment of both the current as well as the forecast direction of
conditions at the end of the reporting period, including time value of money where appropriate.
For all other financial instruments, the Group and the Company recognise lifetime ECL when there
has been a significant increase in credit risk since initial recognition. However, if the credit risk on
the financial instrument has not increased significantly since initial recognition, the Group and the
Company measure the loss allowance for that financial instrument at an amount equal to 12‑month
ECL.
Lifetime ECL represents the expected credit losses that will result from all possible default events over
the expected life of a financial instrument. In contrast, 12‑month ECL represents the portion of lifetime
ECL that is expected to result from default events on a financial instrument that are possible within 12
months after the end of the reporting period.
161

3.15 Impairment (Cont’d)
(i) Financial assets (Cont’d)
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECL, the Group and the Company consider reasonable and supportable
information that is relevant and available without undue cost or effort. This includes both quantitative
and qualitative information and analysis, based on the Group’s historical experience and informed credit
assessment and included forward-looking information, where available.
At the end of each reporting period, the Group and the Company assess whether financial assets carried
at amortised cost are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events
that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
• significant financial difficulty of the issuer or counterparty; or
• default or delinquency in interest or principal payments; or
• it becoming probable that the borrower will enter bankruptcy or financial reorganisation.
Receivables assessed not to be impaired individually are, in addition, assessed for impairment on
a collective basis. Objective evidence of impairment for a portfolio of receivables could include the
Group’s and the Company’s past experience of collecting payments, an increase in the number of
delayed payments in the portfolio past the average credit period, as well as observable changes in
national or local economic conditions that correlate with default on receivables.
In respect of receivables carried at amortised cost, the amount of the impairment loss recognised is the
difference between the asset’s carrying amount and the present value of estimated future cash flows,
discounted at the financial asset’s original effective interest rate.
(ii) Goodwill and intangible assets
Goodwill and intangible assets with indefinite useful lives and intangible assets not yet available for use
are tested for impairment and at least annually, and whenever there is an indication that the asset may
be impaired.
GOVERNANCE DRIVEN

(ii) Goodwill and intangible assets (Cont’d)
For the purpose of impairment testing, assets are grouped together into the smallest group of assets
that generates cash inflows from continuing use that are largely independent of the cash inflows of cash-
generating units. Subject to an operating segment ceiling test, for the purpose of goodwill impairment
testing, cash-generating units to which goodwill has been allocated are aggregated so that the level
at which impairment testing is performed reflects the lowest level at which goodwill is monitored for
internal reporting purposes.
The recoverable amount of a cash-generating unit is the greater of its value in use and its fair value
less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset or cash-generating unit.
An impairment loss is recognised if the carrying amount of its related cash-generating unit exceeds its
estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-
generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-
generating unit (group of cash-generating units) and then to reduce the carrying amounts of the other
assets in the cash-generating unit (groups of cash-generating units) on a pro rata basis. An impairment
loss in respect of goodwill is not reversed.
(iii) Other assets
The carrying amounts of other tangible assets are reviewed at the end of each reporting period to
determine whether there is any indication of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets
that generates cash inflows from continuing use that are largely independent of the cash inflows of
other assets or cash-generating units.
The recoverable amount of an asset is the greater of its value in use and its fair value less costs of
disposal. In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset.
An impairment loss is recognised if the carrying amount of an asset exceeds its estimated recoverable
amount.
163

(iii) Other assets (Cont’d)
Impairment losses are recognised in profit or loss. In respect of other assets, impairment losses
recognised in prior periods are assessed at the end of each reporting period for any indications that the
loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount since the last impairment loss was recognised.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortisation, if no impairment
loss had been recognised. Reversals of impairment losses are credited to profit or loss in the financial
period in which the reversals are recognised.
3.16 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the Group and the Company are recognised at
the proceeds received, net of direct issue costs. Ordinary shares and warrants are equity instruments.
(i) Ordinary Shares
Ordinary shares are recorded at the proceeds received, net of direct attributable transactions costs.
Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the
period which they are declared.
(ii) Warrants
Warrants are classified as equity instruments. The issuance of ordinary shares upon exercise of the
warrants is treated as new subscription of ordinary shares for a consideration equivalent to the exercise
price of the warrants.
(iii) Repurchase, disposal and reissue of share capital (treasury shares)
When share capital recognised as equity is repurchased, the amount of the consideration paid, including
directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased
shares that are not subsequently cancelled are classified as treasury shares in the statement of changes
in equity.
Where treasury shares are sold or reissued subsequently, the difference between the sales consideration
net of directly attributable costs and the carrying amount of the treasury shares is recognised in equity.
GOVERNANCE DRIVEN

3.17 Employee benefits
(i) Short-term employee benefits
Short-term employee benefits obligations in respect of salaries, annual bonuses, paid annual leave and
sick leave are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-
sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result
of past service provided by the employee and the obligation can be estimated reliably.
(ii) State plans
The Group’s contributions to statutory pension funds are charged to profit or loss in the financial period
to which they relate. Prepaid contributions are recognised as an asset to the extent that a cash refund
or a reduction in future payments is available.
(iii) Defined benefit plans
The Group’s net obligation in respect of defined benefit plan of a foreign subsidiary is calculated by
estimating the amount of future benefit that employees have earned in the current and prior periods
and discounting that amount.
The calculation of defined benefit obligations is performed annually by a qualified actuary using the
projected unit credit method. When the calculation results in a potential asset for the Group, the
recognised asset is limited to the present value of economic benefits available in the form of any future
refunds from the plan or reductions in future contributions to the plan. To calculate the present value of
economic benefits, consideration is given to any applicable minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses are
recognised immediately in other comprehensive income. The Group determines the net interest
expense or income on the net defined liability for the period by applying the discount rate used to
measure the defined benefit obligation at the beginning of the annual period to the then net defined
benefit liability, taking into account any changes in the net defined benefit liability during the period as
a result of contributions and benefit payments, if any.
Net interest expense and other expenses relating to defined benefit plans are recognised in profit or
loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that
relates to past service or the gain or loss on curtailment is recognised immediately in profit or loss.
The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement
occurs.
165

3.17 Employee benefits (Cont’d)
(iv) Termination benefits
Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of
those benefits and when the Group recognises costs for a restructuring. If benefits are not expected to
be settled wholly within 12 months of the end of the reporting period, then they are discounted.
(v) Share-based payment transactions of the Company
Equity-settled share-based payments to employees and others providing similar services are measured
at the fair value of the equity instruments at the grant date. Details regarding the determination of the
fair value of equity-settled share-based transactions are set out in Note 40.
The fair value determined at the grant date of the equity-settled share-based payments is expensed
on a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments
that will eventually vest, with a corresponding increase in equity. At the end of each reporting period,
the Group revises its estimate of the number of equity instruments expected to vest. The impact of the
revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense
reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits
reserve.
Equity-settled share-based payment transactions with parties other than employees are measured
at the fair value of the goods or services received, except where that fair value cannot be estimated
reliably, in which case they are measured at the fair value of the equity instruments granted, measured
at the date the entity obtains the goods or the counterparty renders the service.
3.18 Provisions
A provision is recognised if, as a result of a past event, the Group and the Company have a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits
will be required to settle the obligation.
(i) Performance guarantees and bonds
Provisions for performance guarantees and bonds are recognised when crystallisation is probable.
When crystallisation is possible, the performance guarantees and bonds are disclosed as contingent
liabilities.
(ii) Onerous contracts
A provision for onerous contracts is recognised when the expected benefits to be derived by the Group
and the Company from a contract are lower than the unavoidable cost of meeting its obligations under
the contract. The provision is measured at the present value of the lower of the expected cost of
terminating the contract and the expected net cost of continuing with the contract. Before a provision is
established, the Group and the Company recognise any impairment loss on the assets associated with
that contract.
GOVERNANCE DRIVEN

3.19 Revenue and other income recognition
Revenue is recognised when or as a performance obligation in the contract with customer is satisfied, i.e.
when the “control” of the goods or services underlying the particular performance obligation is transferred
to the customer.
A performance obligation is a promise to transfer a distinct goods or service (or a series of distinct goods or
services that are substantially the same and that have the same pattern of transfer) to the customer that is
explicitly stated in the contract and implied in the Group’s and the Company’s customary business practices.
Revenue is measured at the amount of consideration to which the Group and the Company expect to be entitled
in exchange for transferring the promised goods or services to the customers, excluding amounts collected
on behalf of third parties such as sales taxes or goods and services taxes. If the amount of consideration
varies due to discounts, rebates, refunds, credits, incentives, penalties or other similar items, the Group and
the Company estimate the amount of consideration to which it will be entitled based on the expected value
or the most likely outcome. If the contract with customer contains more than one performance obligation,
the amount of consideration is allocated to each performance obligation based on the relative stand-alone
selling prices of the goods or services promised in the contract.
The revenue is recognised to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration
is subsequently resolved.
The control of the promised goods or services may be transferred over time or at a point in time. The control
over the goods or services is transferred over time and revenue is recognised over time if:
• the customer simultaneously receives and consumes the benefits provided by the Group’s and the
Company’s performance as the Group performs;
• the Group’s and the Company’s performance creates or enhances an asset that the customer controls
as the asset is created or enhanced; or
• the Group’s and the Company’s performance does not create an asset with an alternative use and the
Group has an enforceable right to payment for performance completed to date.
Revenue for performance obligation that is not satisfied over time is recognised at the point in time at which
the customer obtains control of the promised goods or services.
(i) Construction contracts
Contract revenue includes the initial amount agreed in the contract plus any variations in contract
work, claims and incentive payments. Under the terms of the contracts, the Group and the Company
has an enforceable right to payment for performance completed to date and that the customer controls
the assets during the course of construction by the Group and the Company and that the construction
services performed does not create an asset with an alternative use to the Group and the Company.
167

3.19 Revenue and other income recognition
(i) Construction contracts (Cont’d)
Revenue from construction contracts is recognised progressively over time based on the percentage
of completion by using the cost-to-cost method (“input method”), based on the proportion of contract
costs incurred for work performed to date relative to the estimated total contract costs. The Directors
consider that this input method is an appropriate measure of the progress towards complete satisfaction
of these performance obligations under MFRS 15. Full provision is made for any foreseeable losses
which is offset against revenue. There is no significant financing component in construction contracts
with customers as the period between the recognition of revenue under the percentage of completion
and the milestone payment is generally less than one year.
(ii) Property development
The Group recognises revenue from property development over time if it creates an asset with no
alternative use to the Group and the Group has an enforceable right to payment for performance
completed to date. Revenue is recognised over the period of the contract by reference to the progress
towards complete satisfaction of that performance obligation.
The progress towards complete satisfaction of the performance obligation is measured based on the
Group’s efforts or inputs to the satisfaction of the performance obligation (e.g. by reference to the
property development costs incurred to date as a percentage of the estimated total costs of development
of the contract).
(iii) Sales of completed properties
Revenue from sales of completed properties is recognised upon delivery of properties where the control
of the properties has been passed to the buyers.
(iv) Goods sold and services rendered
Revenue from sales of goods in the course of ordinary activities is recognised upon delivery of goods
where the control of the goods has been passed to the customers, net of sales and goods and service
taxes and discounts.
Revenue from services is recognised when services are rendered. The Group recognises revenue from
logistic management services and vessel related services over time, using an input method to measure
the progress towards complete satisfaction of the service, because the customer simultaneously
receives and consumes the benefits provided by the Group.
GOVERNANCE DRIVEN

3.19 Revenue and other income recognition (Cont’d)
(v) Other income
Revenue from other sources are recognised as follows:
(a) interest income is recognised on an accrual basis using the effective interest method;
(b) dividend income is recognised when the right to receive payment is established;
(c) management fee income is recognised on an accrual basis, by reference to the agreements entered
into; and
(d) rental income is recognised on a straight-line basis over the tenure of the lease.
3.20 Borrowing costs
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying
asset are recognised in profit or loss using the effective interest method.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their intended use or
sale, are capitalised as part of the cost of those assets.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure
for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to
prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended
or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use
or sale are interrupted or completed.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
3.21 Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in
profit or loss except to the extent that it relates to a business combination or items recognised directly in
equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax
rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable
in respect of previous financial years.
169

3.21 Income tax (Cont’d)
Deferred tax is recognised using the liability method, providing for temporary differences between the
carrying amounts of assets and liabilities in the statements of financial position and their tax bases.
Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the
initial recognition of assets or liabilities in a transaction that is not a business combination and that affects
neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected
to be applied to the temporary differences when they reverse, based on the laws that have been enacted or
substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and when they relate to income taxes levied by the same tax authority on the same
taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net
basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available
against which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each
reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will
be realised.
3.22 Earnings per ordinary share
The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares.
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company
by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares
held.
Diluted EPS, if any, is determined by adjusting the profit or loss attributable to ordinary shareholders and
the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects
of all dilutive potential ordinary shares, which comprise of warrants and options.
3.23 Operating segments
An operating segment is a component of the Group that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any
of the Group’s other components. All operating segments’ operating results are reviewed regularly by the
chief operating decision maker, which in this case is the Group Managing Director, to make decisions about
resources to be allocated to the segment and to assess its performance, and for which discrete financial
information is available.
GOVERNANCE DRIVEN

3.24 Contingent liabilities
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of
economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence
or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the
probability of outflow of economic benefits is remote.
3.25 Critical accounting judgements and key sources of estimation uncertainty
(i) Critical judgements in applying the Group’s and the Company’s accounting policies
The management is of the opinion that there are no instances of application of critical judgement in
applying the Group’s and the Company’s accounting policies which are expected to have a significant
effect on the amounts recognised in the financial statements other than as follows:
(a) Revenue from service concession arrangement
The Group recognises revenue and costs in profit or loss by reference to the stage of completion
of the contract activity at the end of the reporting period, measured based on proportion of the
contract costs incurred for work performed to date relative to the estimated total contract costs.
Judgements are required in determining the construction margin in the construction of the
infrastructure asset. The estimated margin is based on relative comparison with general industry
trend although actual margins may differ.
(b) Revenue recognition on construction contracts
As revenue from on-going construction contracts are recognised over time, the amount of revenue
recognised at the end of the reporting period depends on the extent to which the performance
obligation has been satisfied. This is done by determining the stage of completion. The stage of
completion is determined by the proportion that contract costs incurred for work performed to
date bear to the estimated total contract costs.
Significant judgement is required in determining the stage of completion, the extent of the contract
costs incurred, the estimated total revenue and total costs and the recoverability of the construction
project and contract cost. In making these judgements, management relies on past experience
and, if necessary, the work of specialists.
171

3.25 Critical accounting judgements and key sources of estimation uncertainty (Cont’d)
(ii) Key sources of estimation uncertainty
Management believes that there are no key assumptions made concerning the future, and other key
sources of estimation uncertainty at the end of the reporting period, that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
period, except as discussed below:
(a) Impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis. This requires
an estimation of the value-in-use of the subsidiaries to which goodwill is allocated. Estimating a
value-in-use amount requires management to make an estimate of the expected future cash flows
from the subsidiaries and also to choose a suitable discount rate in order to calculate the present
value of those cash flows.
(b) Recognition of deferred tax assets
Deferred tax assets are recognised for the tax effects of deductible temporary differences to the
extent that it is probable that sufficient future taxable profits will be available against which the
deductible temporary differences can be utilised. Significant management judgement is required
in determining the amount of deferred tax assets that can be recognised, based upon the likely
timing and level of future taxable profits together with future tax planning strategies.
(c) Impairment for expected credit losses (“ECLs”) of trade receivables and construction contract
assets
Significant estimate is required in determining the impairment of trade receivables and construction
contract assets. Impairment loss measured based on expected credit loss model is based on
assumptions on risk of default and expected loss rates. The Group use judgement in making these
assumptions and selecting the inputs to the impairment calculation based on the Group’s past
collection records, existing market conditions as well as forward looking estimates as at the end of
the reporting period.
GOVERNANCE DRIVEN

3.25 Critical accounting judgements and key sources of estimation uncertainty (Cont’d)
(ii) Key sources of estimation uncertainty (Cont’d)
(d) Defined benefit plans
The Group’s net obligation in respect of defined benefit plan of a foreign subsidiary is calculated
by estimating the amount of future benefit that employees have earned in the current and prior
periods and discounting that amount.
The calculation of defined benefit obligations is performed annually by a qualified actuary using
the projected unit credit method. When the calculation results in a potential asset for the Group,
the recognised asset is limited to the present value of economic benefits available in the form of
any future refunds from the plan or reductions in future contributions to the plan. To calculate
the present value of economic benefits, consideration is given to any applicable minimum funding
requirements.
(e) Fair value of biological assets
As per MFRS 141 Agriculture, a biological asset shall be measured on initial recognition and at the
end of each reporting period at its fair value less costs to sell. The Group determines the fair value
of unharvested FFB based on the present value of the expected sale to be generated from the FFB
which requires estimation on the quantity. The value of biological assets was estimated to be the
estimated market price of the produce growing on bearer plants.
173

4. REVENUE
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Dividend income - - 24,387 36,000

Attributable contract revenue 1,228,672 1,019,869 28,872 47,358
Sale of fresh fruit bunches, crude palm oil and
kernel 46,827 106,507 - -
Sale of goods/Rendering of services 162,424 88,006 - -
Income from hotel operation, and food and
beverages 4,853 5,147 - -
Property development revenue 5,808 4,290 - -
Sale of completed properties 14,177 4,771 - -
Management fees - - 30,938 19,992
1,462,761 1,228,590 84,197 103,350
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Timing of revenue recognition:

At a point in time 133,071 153,068 55,325 55,992
Over time 1,329,690 1,075,522 28,872 47,358
1,462,761 1,228,590 84,197 103,350

GOVERNANCE DRIVEN

4. REVENUE (CONT’D)
The following table shows the aggregate amount of the transaction price allocated to performance obligations
that are unsatisfied (or partially unsatisfied) as at the end of the reporting period.
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Revenue from:
Engineering and constructions 1,645,699 3,026,601 19,251 48,123
Property 10,573 15,280 - -
1,656,272 3,041,881 19,251 48,123
The Group and the Company expects revenue from unsatisfied performance obligations to be recognised in the
following years as follows:
1.1.2019 to 30.6.2020
(18 months)
Group Company
RM’000 RM’000
Financial years ending 30 June:

2021 1,459,651 19,251
2022 196,621 -
1,656,272 19,251
1.1.2018 to 31.12.2018
(12 months)
Group Company
RM’000 RM’000
Financial years ending 31 December:

2019 910,154 48,123
2020 921,293 -
2021 1,134,123 -
2022 76,311 -
3,041,881 48,123
175

5. COST OF SALES
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Attributable contract costs 1,234,840 946,003 27,428 44,988

Direct operating costs of plantation 47,993 89,683 - -
Cost of goods sold/services 69,541 35,094 - -
Costs of developed properties 4,681 3,053 - -
Cost of sales of completed property units 7,423 - - -
Cost of operating hotel, and food and beverages 1,289 1,436 - -
1,365,767 1,075,269 27,428 44,988
6. FINANCE INCOME
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Accretion of fair value on non-current receivables 84,131 59,892 - 2,721

Interest income 2,889 2,869 730 373
87,020 62,761 730 3,094
Accretion of fair value on non-current receivables represents fair value impact on concession receivables from
Government of Malaysia as explained in Note 24(a).
GOVERNANCE DRIVEN

7. FINANCE COSTS
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Interest expense of financial liabilities

that are not at fair value through profit
or loss:
- Sukuk 103,005 59,229 - -
- Term loans 94,707 72,419 15,794 11,328
- Bank overdrafts 4,771 2,431 - -
- Finance lease 2,681 2,340 47 52
- Lease liabilities 480 - 4,444 -
- Revolving credits and bankers’
acceptance 9,800 7,704 1,464 1,378
215,444 144,123 21,749 12,758
Less: Capitalisation of interest

- Term loans 12, 24(b) (42,361) (24,469) - -
- Sukuk 17 (88,850) (59,229) - -
(131,211) (83,698) - -
84,233 60,425 21,749 12,758

Amortisation of transaction costs 1,712 1,495 - -
85,945 61,920 21,749 12,758

177

8. (LOSS)/PROFIT BEFORE TAX
(Loss)/Profit before tax is arrived at after charging/(crediting):
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Auditors’ remuneration:
Audit fees:
- Auditors of the Company 585 564 165 165
- Other auditors 85 34 - -
Non-audit fees:
- Auditors of the Company 19 12 5 12
Depreciation of property, plant and
equipment 12 53,212 27,521 813 549
Gain on disposal of property, plant and
equipment - net (360) (354) - (69)
Depreciation of right-of-use assets 13 8,019 - 2,486 -
Amortisation of prepaid lease payments 14 1,589 1,024 - -
Amortisation of intangible assets 16 2,534 1,690 - -
Impairment of goodwill 18 2,894 - - -
Impairment of investments in subsidiaries 19 - - 4,000 -
Expenses relating to short-term and low
value asset leases:
Rental of motor vehicles 167 94 - 1
Rental of land and premises 469 4,948 - 3,648
Rental of machinery and equipment 186 75 3 5
822 5,117 3 3,654

GOVERNANCE DRIVEN

8. (LOSS)/PROFIT BEFORE TAX (CONT’D)
(Loss)/Profit before tax is arrived at after charging/(crediting): (Cont’d)
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Loss on liquidation of interest in joint

ventures 8 16 - 16 -
Gain on redemption of redeemable
convertible preference shares 19 - - (21,902) -
Allowance for doubtful debt 24(a) 678 - 1,519 -
Bad debts written-off 505 - 92 -
Fair value loss arising from biological
assets 25 46 125 - -
Inventories written-down 26 595 - - -
Employee benefits expense 59,606 58,504 23,755 20,518
Loss/(Gain) on foreign exchange:
Realised 1,825 300 1,550 12
Unrealised 8,767 18,700 - (1,048)
Included in employee benefits expense is:
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Contributions to defined contribution plan 6,903 6,713 1,996 2,443

Employees’ share scheme (gain)/expense
- net (825) 1,331 (825) 1,331
Retirement benefits 34 1,810 963 - -
7,888 9,007 1,171 3,774
Included in employee benefits expense of the Group and of the Company are Executive Directors’ remuneration
amounting to RM9,690,000 (2018: RM7,795,000) and RM6,081,000 (2018: RM4,934,000) respectively as further
disclosed in Note 9.
179

9. KEY MANAGEMENT PERSONNEL COMPENSATION
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Executive Directors
- fees 122 85 - -
- emoluments 9,568 7,710 6,081 4,934
Total remuneration (excluding benefit-in-kind) 9,690 7,795 6,081 4,934

Estimated monetary value of benefit-in-kind 350 465 186 220
10,040 8,260 6,267 5,154
Non-Executive Directors
- fees 1,317 900 938 630
- emoluments 388 354 64 109
Total remuneration (excluding benefit-in-kind) 1,705 1,254 1,002 739

Estimated monetary value of benefit-in-kind 291 182 106 98
1,996 1,436 1,108 837
Total remuneration (executive and non-executive) 12,036 9,696 7,375 5,991

GOVERNANCE DRIVEN

10. INCOME TAX EXPENSE
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Estimated tax payable:

- current period/year 14,767 19,913 - 61
- (over)/underprovision in prior years (1,214) (559) 18 -
13,553 19,354 18 61
Deferred tax: 23
- origination and reversal of temporary
differences 16,659 (3,797) - 379
- underprovision in prior years 5,226 672 - 1,038
21,885 (3,125) - 1,417
Total income tax expense 35,438 16,229 18 1,478
A reconciliation of income tax expense applicable to (loss)/profit before tax at the statutory income tax rate to
income tax expense at the effective income tax rate of the Group and of the Company are as follows:
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
(Loss)/Profit before tax (75,790) 24,817 (3,401) 20,260
Income tax (credit)/expense calculated using

Malaysian tax rate of 24% (2018: 24%) (18,190) 5,956 (816) 4,862
Tax effects of:
Non-deductible expenses 126,825 96,246 7,871 4,871
Non-taxable income (95,533) (86,082) (7,563) (9,293)
(Over)/underprovision of tax payable in prior years (1,214) (559) 18 -
Under provision of deferred tax in prior years 5,226 672 - 1,038
Impact of change in tax rate in other tax jurisdiction (746) (294) - -
Deferred tax assets not recognised 19,070 290 508 -
Total income tax expense 35,438 16,229 18 1,478

181

11. EARNINGS PER ORDINARY SHARE
Basic earnings per ordinary share
The calculation of basic earnings per ordinary share at 30 June 2020 was based on the profit attributable to
ordinary shareholders and weighted average number of ordinary shares outstanding during the period.
Group
1.1.2019 to 1.1.2018 to
30.6.2020 31.12.2018
Basic (loss)/earnings per ordinary share

Net (loss)/profit attributable to owners of the Company (RM’000) (98,321) 14,232
Group
30.6.2020 31.12.2018
Number of shares in issue as at beginning of the financial period (‘000) 596,435 530,070
Effect of issuance of shares (‘000) - 74
Effect of Bonus Issue (‘000) - 66,270
Weighted average number of ordinary shares in issue (‘000) 596,435 596,414
Basic (loss)/earnings per ordinary share (sen) (16.48) 2.39
Group
1.1.2019 to 1.1.2018 to
30.6.2020 31.12.2018
Diluted (loss)/earnings per ordinary share

Net (loss)/profit attributable to owners of the Company (RM’000) (98,321) 14,232
Group
30.6.2020 31.12.2018
Weighted average number of ordinary shares in issue (‘000) 596,435 596,414

Effects of warrants (‘000) -* -*
Effects of dilution of ESS (‘000) -* -*
Adjusted weighted average number of ordinary shares for calculating diluted

earnings per ordinary share (‘000) 596,435 596,414
Diluted (loss)/earnings per ordinary share (sen) (16.48) 2.39
* The effect of potential ordinary shares ongoing from the exercise of warrants and dilution of ESS was anti-
dilutive and accordingly was excluded from the diluted earnings per share computation above.
GOVERNANCE DRIVEN

12. PROPERTY, PLANT AND EQUIPMENT
Buildings Machinery Furniture, Asset

Freehold Bearer and and Motor fittings and under
land plants renovation equipment vehicles equipment construction Total
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Cost
At 1 January 2018 23,002 237,079 159,283 116,342 46,746 8,075 48,939 639,466
Additions 1,961 45,721 1,048 7,335 3,590 5,969 37,291 102,915
Disposals - - - (340) (2,550) - - (2,890)
Reclassifications - - 723 - - - (723) -
Writen off - - - - (77) - - (77)
Effects of movements
in exchange rates - (8,523) (1,134) (1,729) (226) (51) - (11,663)
At 31 December 2018/
1 January 2019 24,963 274,277 159,920 121,608 47,483 13,993 85,507 727,751
Additions - 39,685 11,984 9,347 820 877 12,619 75,332
Disposals - - (11,947) (1,311) (3,239) (72) (1,566) (18,135)
Reclassifications - - 94,426 73 - (73) (94,426) -
in exchange rates - 13,290 1,376 2,073 260 66 - 17,065
At 30 June 2020 24,963 327,252 255,759 131,790 45,324 14,791 2,134 802,013
Included in the asset under construction is the finance cost capitalised during the period/year amounting to
RM5,955,000 (31.12.2018: RM3,587,000).
183

12. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
Buildings Machinery Furniture, Asset

Freehold Bearer and and Motor fittings and under
land plants renovation equipment vehicles equipment construction Total
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Accumulated
Depreciation
At 1 January 2018 - 38,414 12,844 50,297 27,946 4,976 - 134,477
Depreciation for
the year - 5,641 5,643 8,789 6,139 1,309 - 27,521
Disposals - - - (340) (2,494) - - (2,834)
Written off - - - - (77) - - (77)
in exchange rates - (986) (144) (152) (134) (33) - (1,449)
At 31 December 2018/
1 January 2019 - 43,069 18,343 58,594 31,380 6,252 - 157,638
Depreciation for the
period - 12,839 14,201 14,530 8,793 2,849 - 53,212
Disposals - - - (1,311) (2,854) (72) - (4,237)
in exchange rates - 1,781 298 330 194 47 - 2,650
At 30 June 2020 - 57,689 32,842 72,143 37,513 9,076 - 209,263
Carrying Amounts
At 31 December 2018 24,963 231,208 141,577 63,014 16,103 7,741 85,507 570,113
At 30 June 2020 24,963 269,563 222,917 59,647 7,811 5,715 2,134 592,750
GOVERNANCE DRIVEN

Machinery Furniture,
Freehold and Motor fittings and
land equipment vehicles equipment Total
Company RM’000 RM’000 RM’000 RM’000 RM’000
Cost
At 1 January 2018 - 53 4,903 367 5,323
Additions 1,750 - 301 - 2,051
Disposals - - (396) - (396)
Effects of movements in exchange rates - (5) - (4) (9)
At 31 December 2018/1 January 2019 1,750 48 4,808 363 6,969
At 30 June 2020 1,750 46 4,808 362 6,966
Accumulated Depreciation
At 1 January 2018 - 52 3,324 367 3,743
Depreciation for the year - 1 548 - 549
Disposals - - (378) - (378)
At 31 December 2018/1 January 2019 - 47 3,494 363 3,904

Depreciation for the period - - 813 - 813
At 30 June 2020 - 44 4,307 362 4,713
Carrying Amounts
At 31 December 2018 1,750 1 1,314 - 3,065
At 30 June 2020 1,750 2 501 - 2,253
In previous financial year, the Group and the Company entered into a sales and purchase agreement with its
ultimate holding company for an acquisition of a piece of freehold land with cost of RM1,750,000. The acquisition
is disclosed as a related party transaction in Note 44. As at 30 June 2020 the land title of this freehold land has
yet to be transferred to the Group and the Company.
185

Included in property, plant and equipment are:
(i) the cost and the net carrying amount of property, plant and equipment under finance lease arrangements
as follows:
Machinery
and Motor
equipment vehicles Total
Group RM’000 RM’000 RM’000
30 June 2020
Cost 54,429 17,282 71,711
Carrying amounts 9,126 8,084 17,210
31 December 2018
Cost 45,370 19,064 64,434
Carrying amounts 18,722 11,738 30,460
Company
30 June 2020
Cost 46 4,808 4,854
Carrying amounts 2 501 503
31 December 2018
Cost 48 4,808 4,856
Carrying amounts 1 1,314 1,315
(ii) Freehold land and buildings of the Group with total net carrying amounts of RM50,412,000 (31.12.2018:
RM51,171,000) are charged to financial institutions as securities for banking facilities granted to its
subsidiaries as disclosed in Note 32(a)(vii) and Note 32(d).
GOVERNANCE DRIVEN

13. RIGHT-OF-USE ASSETS
The Group and the Company lease several properties, machinery and equipment, bunkering facilities and office
equipment. The lease terms are ranging from 2 years to 33 years averaging approximately 17 years and 12 years
respectively.
Machinery
Leasehold and Bunkering Office
Note land Buildings equipment facilities equipment Total
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Cost
At 1 January 2019 - - - - - -
Effect on adoption of
MFRS 16 46 2,798 2,769 3,093 7,565 139 16,364
Additions 33 - 303 - - - 303
At 30 June 2020 2,798 3,072 3,093 7,565 139 16,667
Accumulated depreciation
At 1 January 2019 - - - - - -
Depreciation for the period 8 1,222 1,989 2,543 2,225 40 8,019
At 30 June 2020 1,222 1,989 2,543 2,225 40 8,019
Carrying amounts
At 30 June 2020 1,576 1,083 550 5,340 99 8,648
Note Buildings Total

Company RM’000 RM’000
Cost
At 1 January 2019 - -
Effect on adoption of MFRS 16* 46 72,795 72,795
At 30 June 2020 72,795 72,795
Accumulated depreciation
Depreciation for the period 8 2,486 2,486
At 30 June 2020 2,486 2,486
Carrying amounts
At 30 June 2020 70,309 70,309
187

13. RIGHT-OF-USE ASSETS (CONT’D)
The additions to right-of-use assets of RM303,000 and RMNil for the Group and the Company respectively during
the financial period were made to replace expired contracts either by new leases for identical underlying assets
or extended through exercising the extension options.
* This represents lease of building from the subsidiary which have been eliminated at the group level.
In the current financial period, amounts recognised in profit and loss are as below:
Note Group Company

RM’000 RM’000
Amounts recognised in profit and loss

Depreciation of right-of-use assets 8 8,109 2,486
Interest expense on lease liabilities 7 480 4,444
Expenses relating to short-term leases and low-value assets 8 822 3
During the period, the total cash outflow for leases for the Group and the Company amounted to RM8,318,000 and
RM5,558,000 respectively (Note 33).
14. PREPAID LEASE PAYMENTS
Group
Note 30.6.2020 31.12.2018
RM’000 RM’000
Cost
At 1 January 2019/1 January 2018 30,182 30,532
Additions - 401
Effect of movements in exchange rates 921 (751)
At 30 June 2020/31 December 2018 31,103 30,182

GOVERNANCE DRIVEN

14. PREPAID LEASE PAYMENTS (CONT’D)
Group
Note 30.6.2020 31.12.2018
RM’000 RM’000
Accumulated Amortisation
Amortisation during the period/year 8 1,589 1,024
Effect of movements in exchange rates 205 (82)
At 30 June 2020/31 December 2018 9,399 7,605
Carrying Amount
At 30 June 2020/31 December 2018 21,704 22,577
The leasehold land of the Group has an unexpired lease period of less than 50 years.
15. LAND HELD FOR DEVELOPMENT
Group
Note 30.6.2020 31.12.2018
RM’000 RM’000
Cost
Additions 539 8,719
Transfer from property development costs 27 436 14,867
Transfer to property development costs 27 - (3,221)
Transfer from deposits paid - 500
At 30 June 2020/31 December 2018 57,970 56,995
Freehold land 53,691 52,716

Leasehold land 4,279 4,279
57,970 56,995
The land held for development represents land that are earmarked for future commercial development. Freehold
land with carrying amount of RM8,958,000 (31.12.2018: RM8,958,000) is pledged to a bank for the term loan
facility granted to the Group as disclosed in Note 32(a)(v).
189

16. INTANGIBLE ASSETS
Contractual
customer Lease
Note relationship agreement Software Total
Group RM’000 RM’000 RM’000 RM’000
Costs
At 1 January 2018 8,209 16,022 79 24,310
Additions - - 27 27
Effects of movements in exchange rates - - (2) (2)
At 31 December 2018/1 January 2019 8,209 16,022 104 24,335

Additions - - 184 184
Effects of movements in exchange rates - - 4 4
At 30 June 2020 8,209 16,022 292 24,523
Accumulated Amortisation
At 1 January 2018 1,173 517 - 1,690
Amortisation for the year 8 1,173 517 - 1,690
At 31 December 2018/1 January 2019 2,346 1,034 - 3,380

Amortisation for the period 8 1,759 775 - 2,534
At 30 June 2020 4,105 1,809 - 5,914
Carrying Amounts
31 December 2018 5,863 14,988 104 20,955
30 June 2020 4,104 14,213 292 18,609

GOVERNANCE DRIVEN

17. CONCESSION SERVICE ASSETS
Group
30.6.2020 31.12.2018
RM’000 RM’000
Highway Concession:
At 1 January 2019/1 January 2018 1,238,196 829,873
Additions 387,750 408,323
At 30 June 2020/31 December 2018 1,625,946 1,238,196
Concession service assets represent the project costs incurred on the construction of a highway undertaken by
the Group pursuant to a concession agreement with the Government of Malaysia signed on 13 February 2013.
The concession agreement gives right to the Group for collection of toll over a concession period of 50 years from
the Government of Malaysia in exchange for services to be rendered in connection with the design, construction,
completion, operation, management and maintenance of the East Klang Valley Expressway (“EKVE”).
Net interest cost capitalised in concession service assets during the financial period is RM88,850,000 (31.12.2018:
RM59,229,000) (Note 7).
18. GOODWILL
Group
Note 30.6.2020 31.12.2018
RM’000 RM’000

Impairment of goodwill during the period/year 18(ii) (2,894) -
At 30 June 2020/31 December 2018 38,887 41,781
For the purpose of impairment testing, goodwill is allocated to the cash-generating units, which represent the
lowest level within the Group at which the goodwill is monitored for internal management purposes.
191

18. GOODWILL (CONT’D)
The aggregate carrying amounts of goodwill allocated to each cash-generating unit are as follows:
Group
Note 30.6.2020 31.12.2018
RM’000 RM’000
Malaysian supply base operation (i) 35,623 35,623

Malaysian quarry business unit (ii) - 2,894
Malaysian hotel operator unit (iii) 2,410 2,410
Multiple business units without significant goodwill 854 854
38,887 41,781
(i) Malaysian supply base operation
The recoverable amount is determined based on value-in-use calculation which uses cash flow projections
based on financial budgets approved by the Directors covering a 5 year period with terminal value computation
with a pre-tax discount rate of 10% (31.12.2018: 10.5%) per annum. The key assumptions for the value-in-
use calculation include management’s expectation on the growth in the number of vessels berthed per day.
The terminal value was estimated using the perpetuity growth model, with a growth rate to perpetuity of
2.5% (31.12.2018: 5.2%) applied to steady-state estimate earnings at the end of the projected period.
(ii) Malaysian quarry business unit
During the period, the Group has fully impaired the goodwill related to Malaysian quarry business unit. The
impairment of goodwill arose as the quarry business unit had not started operations to-date, amidst the
uncertainty surrounding this particular sector.
(iii) Malaysian hotel operator unit
The recoverable amount is determined based on value-in-use calculation which uses cash flow projections
based on financial budgets approved by the Directors covering a 5 year period with terminal value computation
with a pre-tax discount rate of 5.0% (31.12.2018: 7.0%) per annum. The key assumptions for the value-in-use
calculation include management’s expectation of the rooms’ occupancy. The terminal value was estimated
using the perpetuity growth model, with a growth rate to perpetuity of 1.5% (31.12.2018: 3.0%) applied to
steady-state estimate earnings at the end of the projected period.
The Directors believe that any reasonable possible change in the key assumptions would not cause the carrying
values of the goodwill to materially exceed their recoverable amounts.
GOVERNANCE DRIVEN

19. INVESTMENTS IN SUBSIDIARIES
Company
30.6.2020 31.12.2018
RM’000 RM’000
Unquoted shares, at cost

Additions of equity in subsidiaries 471,245 98,113
At 30 June 2020/31 December 2018, at cost 1,004,525 533,280
Less:
Redemption of redeemable convertible preference shares (39,448) -
Allowance for impairment loss (16,035) (12,035)
(55,483) (12,035)
Net 949,042 521,245
The additions of equity in subsidiaries are as follows:
30.6.2020 31.12.2018
RM’000 RM’000
Ordinary shares in:

EKVE Sdn Bhd 5,188 98,113
Ahmad Zaki Sdn Bhd 114,500 -
Matrix Reservoir Sdn Bhd 7,552 -
AZRB Capital Sdn Bhd# - -
Preference shares in Peninsular Medical Sdn Bhd 344,005 -
471,245 98,113
Additional investment in an existing subsidiary companies:
(i) Ahmad Zaki Sdn Bhd (“AZSB”)
On 31 March 2020, the Company acquired 114,499,988 ordinary shares of AZSB, for a total consideration of
RM114,499,988. The effective equity interest remains at 100%.
(ii) EKVE Sdn Bhd (“EKVE”)
On 27 August 2019, the Company acquired 5,188,507 ordinary shares of EKVE, for a total consideration of
RM5,188,507. The effective equity interest remains at 100%. In the previous financial year, the Company
acquired additional 98,113,000 ordinary shares of EKVE, for a total consideration of RM98,113,000. The
effective equity interest remains at 100%.
193

19. INVESTMENTS IN SUBSIDIARIES (CONT’D)
Additional investment in an existing subsidiary companies: (Cont’d)
(iii) Matrix Reservoir Sdn Bhd (“MRSB”)
On 23 April 2019, the Company acquired 7,293,000 ordinary shares of MRSB, for a total consideration
of RM7,293,000. On 4 July 2019, the Company acquired another 259,035 ordinary shares of MRSB, for a
total consideration of RM259,035. The effective equity interest increased by 2% to 53% as at the end of the
reporting period.
(iv) Peninsular Medical Sdn Bhd (“PMSB”)
On 26 December 2019, the Company acquired 535,000,000 redeemable convertible preference shares of
PMSB, at RM0.643 per share for a total consideration of RM344,005,000. The effective equity interest remains
at 100%. During current financial period, the Company has redeemed 61,350,342 redeemable convertible
preference shares for a total redemption price of RM61,350,342 resulting in a gain of RM21,902,000 on
redemption.
Additional investment in a new subsidiary company:
#
AZRB Capital Sdn Bhd (“ACSB”)
On 8 July 2019, the Company subscribed for 100% of the issued and paid-up share capital of ACSB, a company
incorporated in Malaysia, for a total consideration of RM1.
Impairment losses
The Directors have reviewed the Company’s investments in subsidiaries for indications of impairment and
concluded that the allowance for impairment loss amounting to RM16,035,000 (31.12.2018: RM12,035,000) as
at the end of the reporting period is deemed adequate in respect of investments in subsidiaries. Impairment
of investments in subsidiaries of the Company arose from a subsidiary incorporated in Malaysia which had not
started operations, which resulted in the carrying amount being impaired by RM4,000,000 during the financial
period.
Movements in the accumulated impairment losses of investment in subsidiaries are as follows:
1.1.2019 to 1.1.2018 to
30.6.2020 31.12.2018
RM’000 RM’000
At beginning of period/year 12,035 12,035

Impairment loss recognised during the period/year 4,000 -
At the end of period/year 16,035 12,035

GOVERNANCE DRIVEN

The details of the subsidiaries are as follows:
Proportion of ownership
interest and voting power
Country of held by the Group
Name of subsidiary Principal activities incorporation 30.6.2020 31.12.2018
% %
Ahmad Zaki Sdn Bhd Contractors of civil and Malaysia 100 100
structural construction works
Inter-Century Sdn Bhd Dealer of marine fuels Malaysia 100 100
Tadok Granite Manufacturing Dormant Malaysia 100 100

Sdn Bhd
AZRB International Ventures Investment holding Malaysia 100 100

Sdn Bhd
Trend Vista Development Real property and housing Malaysia 100 100
Sdn Bhd development
P.T. Ichtiar Gusti Pudi* Oil palm cultivation and Republic of 95 95

processing of palm oil Indonesia
Ahmad Zaki Saudi Arabia Co. Contractors of civil and Kingdom of 95 95

Ltd.#@ structural works Saudi Arabia
Peninsular Medical Sdn Bhd Carry out maintenance services Malaysia 100 100
of a teaching hospital via
concession and assets
management agreements
AZ Land & Properties Sdn Bhd Property development Malaysia 100 100
EKVE Sdn Bhd Engaged in the business of Malaysia 100 100

construction, establishment,
operation, maintenance and
management of a highway
Unggul Energy & Construction Dormant Malaysia 100 100

Sdn Bhd
195

The details of the subsidiaries are as follows: (Cont’d)
% %
Temala Development Sdn Bhd Property development Malaysia 70 70
Betanaz Properties Sdn Bhd Property development Malaysia 51 51
Peninsular Prokonsult Project management services Malaysia 100 100

Sdn Bhd
Residence Inn & Motels Hotel operators and hotel Malaysia 100 100
Sdn Bhd project consultants
Betanaz Mills Sdn Bhd Operation of palm oil mill Malaysia 67 67
Sambungan Lebuhraya Timur Dormant Malaysia 60 60

Sdn Bhd#
Matrix Reservoir Sdn Bhd Investment holding Malaysia 53 51
AZRB Capital Sdn Bhd A special purpose vehicle Malaysia 100 -

established solely for the
purpose of issuance of sukuk,
in compliance with shariah
principles
Held through Betanaz Mills Sdn Bhd
Peak Crops Sdn Bhd Dormant Malaysia 40 40
Held through Ahmad Zaki Sdn Bhd
Peninsular Precast Sdn Bhd Fabricating and marketing of Malaysia 100 100
Industrial Building Products
and System (“IBS”)
AZSB Machineries Sdn Bhd Rental of machineries and Malaysia 100 100
equipment and to carry on
all or any of the business of
transport operators
GOVERNANCE DRIVEN

The details of the subsidiaries are as follows: (Cont’d)
% %
Held through Ahmad Zaki Sdn Bhd (Cont’d)
Kemaman Technology & Property development Malaysia 60 60

Industrial Park Sdn Bhd
Held through AZRB International Ventures Sdn Bhd
Ahmad Zaki Saudi Arabia Contractors of civil and Kingdom of 5 5

Co. Ltd.#@ structural works Saudi Arabia
Held through Matrix Reservoir Sdn Bhd
TB Realty Sdn Bhd Leasing of land and building Malaysia 53 51
TB Supply Base Sdn Bhd Logistic management services Malaysia 53 51

and vessel related services
TB Terminals Sdn Bhd Dormant Malaysia 53 51
Astral Far East Sdn Bhd Dealer of lubricants, Malaysia 53 51

petroleum-based products
and selling of potable water
* Audited by other firm of auditors

@ Wholly-owned subsidiary of the Group
#
The financial statements are audited for the purpose of consolidation
197

Non-controlling interests
Details of non-wholly owned subsidiaries that have non-controlling interests (“NCI”):
NCI (Loss)/Profit
percentage of allocated Accumulated
ownership to non- non-
interest and controlling controlling
Name of subsidiaries voting power interests interests
% RM’000 RM’000
30 June 2020
Matrix Reservoir Sdn Bhd and its subsidiaries (“MRSB Group”) 47 (8,544) 11,910 *
Kemaman Technology & Industrial Park Sdn Bhd (“KTIP”) 40 135 8,285 **
P.T. Ichtiar Gusti Pudi (“PTIGP”) 5 (2,840) (10,608) ***
Other individually immaterial subsidiaries (1,658) (4,149)
(12,907) 5,438
* This include impact of RM6,748,000 of change in ownership interest in the subsidiary during the financial
period.
** This include dividend of RM383,000 paid/payable to non-controlling interest during the financial period.
*** This include impact of foreign currency translation reserves of RM440,000.
NCI (Loss)/Profit
percentage of allocated Accumulated
ownership to non- non-
interest and controlling controlling
Name of subsidiaries voting power interests interests
% RM’000 RM’000
31 December 2018
MRSB Group 49 (3,904) 13,706
KTIP 40 53 8,533
PTIGP 5 (1,184) (8,208)
Other individually immaterial subsidiaries (609) (2,510)
(5,644) 11,521
GOVERNANCE DRIVEN

Summarised financial information in respect of the Group’s subsidiaries that have material non-controlling
interests (in terms of percentage) are set out below. The summarised financial information below represents
amounts before intragroup eliminations.
30.6.2020 31.12.2018
MRSB Group KTIP MRSB Group KTIP
RM’000 RM’000 RM’000 RM’000
Statements of financial position

Non-current assets 180,079 7,371 172,375 6,571
Current assets 25,560 18,500 21,276 22,916
Total assets 205,639 25,871 193,651 29,487
Non-current liabilities 72,625 - 100,493 -

Current liabilities 127,540 8,503 83,805 12,455
Total liabilities 200,165 8,503 184,298 12,455
Total equity 5,474 17,368 9,353 17,032
Statements of profit or loss and other

comprehensive income
Revenue 34,358 15,002 9,894 3,946
(Loss)/Profit before tax (18,156) 583 (9,645) (809)
(Loss)/Profit after tax (18,179) 336 (8,320) (797)
Other comprehensive income - - - -
199

20. INVESTMENTS IN ASSOCIATES
Group Company
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Unquoted shares, at cost:

At 1 January 2019/1 January 2018 2,750 110 2,640 -
Acquisition of shares - 2,640 - 2,640
At 30 June 2020/31 December 2018 2,750 2,750 2,640 2,640
Share of post-acquisition reserves

At 1 January 2019/1 January 2018 55 55 - -
Share of loss of associates, net of tax (3) - - -
At 30 June 2020/ 31 December 2018 52 55 - -
Total 2,802 2,805 2,640 2,640
In the previous financial year, the Company entered into a Share Sale Agreement on 21 December 2018 to acquire
50% equity interest in Palmacorp Sdn Bhd from its ultimate holding company and a director of the Company
for a total purchase consideration of RM2,640,000. Following the acquisition, Palmacorp Sdn Bhd became an
associate of the Company.
Goodwill included within the Group’s carrying amount of investments in associates is as follows:
Group
30.6.2020 31.12.2018
RM’000 RM’000
Goodwill on acquisition 2,058 2,058

GOVERNANCE DRIVEN

20. INVESTMENTS IN ASSOCIATES (CONT’D)
The details of the associate, which is incorporated in Malaysia, are as follows:
Principal held by the Group
Name of associate activities 30.6.2020 31.12.2018
% %
Palmacorp Sdn Bhd* Dormant 50 50
Held through Ahmad Zaki Sdn Bhd
Fasatimur Sdn Bhd* Dormant 50 50
Summarised financial information of associates, not adjusted for the percentage ownership held by the Group:
Effective Profit/ Total Total

ownership Revenue (Loss) assets liabilities
interest (100%) (100%) (100%) (100%)
RM’000 RM’000 RM’000 RM’000
30 June 2020
Palmacorp Sdn Bhd 50% - (6) 1,477 (304)
Fasatimur Sdn Bhd 50% - - 589 (296)
31 December 2018
Palmacorp Sdn Bhd 50% - - 1,473 (294)
Fasatimur Sdn Bhd 50% - - 589 (296)
201

21. INTERESTS IN JOINT VENTURES
Group Company
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Investment cost:
At 1 January 2019/1 January 2018 64 64 34 34
Liquidation of interest in joint venture @ (34) - (34) -
At 30 June 2020/31 December 2018 30 64 - 34
Share of post-acquisition results in joint ventures (30) (30) - -
Total - 34 - 34
The details of the joint ventures, all incorporated in Malaysia, are as follows:
Project or held by the Group
Name Principal activities 30.6.2020 31.12.2018
% %
(i) BumiHiway - Ahmad Zaki Joint Realignment of the route from 50 50

Venture* Putrajaya to Cyberjaya, Selangor
(ii) Ahmad Zaki - JasaBakti Joint Design and building of “Sekolah 70 70

Venture* Menengah Sains Hulu Terengganu”
in Terengganu
(iii) Peninsular IFM Sdn Bhd@ Integrated facilities management 34 34

services

@
Struck off pursuant to Section 550 of the Companies Act, 2016 on 22 May 2020
GOVERNANCE DRIVEN

22. INVESTMENTS IN FINANCIAL ASSETS
Group Company
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
At fair value through profit or loss:

Unquoted shares in Malaysia 48 48 - -
Club membership 68 68 68 68
Total 116 116 68 68
The club membership is in respect of a transferable golf club corporate membership. Included in the fair value
through profit or loss investments of the Group is the investment in Salcon MMCB AZSB JV Sdn Bhd with equity
interest of 30%.
The Directors are of the opinion that the carrying amounts of these financial assets approximate its fair value.
23. DEFERRED TAX LIABILITIES/(ASSETS)
Group Company
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Deferred tax liabilities 95,973 82,488 - -

Deferred tax assets (27,585) (35,474) (235) (235)
68,388 47,014 (235) (235)
Movement on the deferred tax is as follows:
Group Company
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
At 1 January 2019/1 January 2018 47,014 49,820 (235) (1,652)

Recognised in profit or loss: 10
Origination and reversal of temporary
differences 16,659 (3,797) - 379
Underprovision in prior years 5,226 672 - 1,038
21,885 (3,125) - 1,417
Effect of movements in exchange rates (511) 319 - -
At 30 June 2020/31 December 2018 68,388 47,014 (235) (235)

203

23. DEFERRED TAX LIABILITIES/(ASSETS) (CONT’D)
Recognised deferred tax liabilities/(assets)
Assets Liabilities Net

30.6.2020 31.12.2018 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group
Unused tax losses (29,109) (17,030) - - (29,109) (17,030)
Taxable temporary differences - - 96,382 90,475 96,382 90,475
Property, plant and equipment (5,062) (27,847) 6,495 3,338 1,433 (24,509)
Employee benefits - - 6 843 6 843
Other items (324) (2,765) - - (324) (2,765)
Deferred tax (assets)/

liabilities (34,495) (47,642) 102,883 94,656 68,388 47,014
Set off of deferred tax 6,910 12,168 (6,910) (12,168) - -
Net deferred tax (assets)/

liabilities (27,585) (35,474) 95,973 82,488 68,388 47,014
Company
Property, plant and equipment - - 28 28 28 28

Unused tax losses (263) (263) - - (263) (263)
Deferred tax (assets)/

liabilities (263) (263) 28 28 (235) (235)
Set off of deferred tax 28 28 (28) (28) - -
Net deferred tax (assets)/

liabilities (235) (235) - - (235) (235)

GOVERNANCE DRIVEN

23. DEFERRED TAX LIABILITIES/(ASSETS) (CONT’D)
Unrecognised deferred tax assets
Deferred tax assets were not recognised in respect of the following items:
Group Company
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Unused tax losses 83,748 5,269 2,117 -

Unutilised capital allowances 3,986 3,007 - -
87,734 8,276 2,117 2,117
Deferred tax assets were not recognised in respect of those items because it was not probable that sufficient
future taxable profit would be available against which certain subsidiaries could utilise the benefits there from.
The unused tax losses and unutilised capital allowances are subject to agreement with the tax authorities.
The availability of unused tax losses and unutilised capital allowances will expire latest by year 2027 or when
there is substantial change in shareholders (of 50% or more), whichever earlier, under current tax legislation.
The unutilised capital allowances do not expire under the current tax legislation. If there is substantial change
in shareholders, unused tax losses and unutilised capital allowances as stated above will not be available to the
Group.
24(a). TRADE AND OTHER RECEIVABLES
Group Company
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Non-current
Other receivables f 16,313 9,040 2,163 2,262
Concession service receivable b 577,106 597,975 - -
593,419 607,015 2,163 2,262

205

24(a). TRADE AND OTHER RECEIVABLES (CONT’D)
Group Company
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Current
Trade
External parties a 347,374 362,538 - -
Concession service receivable b 70,000 68,333 - -
Amount due from a joint venture c 47 47 - -
417,421 430,918 - -
Non-trade
Amount due from:
Ultimate holding company d 1,968 1,376 301 295
Subsidiaries d - - 394,009 79,391
Associate d 20 20 - -
Affiliates e 3,393 - 165 84
Less: Allowance for doubtful debt 8 - - (1,519) -
5,381 1,396 392,956 79,770
Other receivables g 90,469 180,115 8,390 55,817

Less: Allowance for doubtful debt 8 (678) - - -
89,791 180,115 8,390 55,817
Deposits 6,780 9,953 243 48

Prepayments 3,411 18,610 422 17,352
105,363 210,074 402,011 152,987
522,784 640,992 402,011 152,987

GOVERNANCE DRIVEN

Movements in the allowance for doubtful debt of non-trade receivables are as follows:
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
At beginning of period/year - - - -
Impairment loss recognised during
the period/year 8 678 - 1,519 -
At the end of period/year 678 - 1,519 -
Note a
The Group’s and the Company’s normal credit term granted to customers’ ranges from 60 to 90 days (31.12.2018:
60 to 90 days).
Included in trade receivables from external parties at 30 June 2020 are retention sums of the Group amounting
to RM146,446,000 (31.12.2018: RM98,859,000) relating to construction work-in-progress.
Retention sums are unsecured, interest-free and are expected to be collected within the normal operating
cycle of the Group as analysed below:
Group
30.6.2020 31.12.2018
RM’000 RM’000
Within 1 year 42,349 48,373

1 - 2 years 97,904 21,496
2 - 3 years 6,193 17,519
3 - 4 years - 7,060
More than 5 years - 4,411
146,446 98,859
Note b
Concession service receivable of the Group represents fair value of long term receivable from the Government
of Malaysia over a concession period of 21.5 years upon completion of the International Islamic University
Malaysia Medical Centre in 2016 under the Private Financing Initiative which granted the Group to undertake
the design, build, lease and maintenance of the teaching hospital.
207

Note c
The amount is trade in nature, unsecured, interest-free and repayable on demand.
Note d
The amount is non-trade in nature, unsecured, interest-free and repayable on demand.
Note e
Affiliates are companies, which have common directors and shareholders as that of the Company. The amount
is unsecured, interest-free and repayable on demand.
Note f
The amount is trade in nature, unsecured, interest-free and repayable on demand.
Note g
Included in other receivables of the Group and of the Company as at 31 December 2018 were an amount of
RM93,427,000 and RM49,295,000 respectively, which was classified as current receivables, in view of these
amounts were expected to be recovered within the next twelve months from the end of the reporting period.
These amounts consisted of the award issued by the sole arbitrator of the International Court of Arbitration
under the International Chamber of Commerce (“ICC”) in 2013 pertaining to the arbitration initiated by the
Group in year 2011 against a particular contract customer in respect of the development of a university campus
in Saudi Arabia. The Group and the Company, through their external legal counsels in Saudi Arabia, had filed
the arbitrator award with the local Saudi court on 2 February 2014 in order to obtain an enforcement order. The
external legal counsels on 5 September 2018 further confirmed that the 22nd Circuit of the Riyadh Enforcement
Court already ordered the Saudi Arabian Monetary Agency, which acts as the central bank for the Kingdom of
Saudi Arabia to transfer the amount corresponding to the aforesaid final judgment and award from the account
of the King Faisal Foundation to the account of the 22nd Circuit of the Riyadh Enforcement Court.
On 10 June 2019, AZRB was informed that the Appeal Judge (8th Appeal Circuit) has ordered for the case to be
transferred from the 21st Circuit to the 11th Circuit of the Riyadh Enforcement Court. The 21st Circuit of the
Riyadh Enforcement Court has then transferred the enforcement petition file to the President of the Riyadh
Enforcement Court. The said President has assigned the enforcement petition to the Riyadh Enforcement
Court. To-date, the ICC Award has been fully enforced by the Riyadh Enforcement Court and therefore, there
will be no further action to be taken by both parties. The financial impact of the ICC Award has been taken into
account and reflected in the financial results of the Group for the period from 1 January 2019 to 30 June 2020.
GOVERNANCE DRIVEN

24(b). CONSTRUCTION CONTRACT ASSETS
Group Company
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Contract assets 201,998 368,115 2,475 5,621

Contract liabilities - - - -
Net 201,998 368,115 2,475 5,621
At beginning of the period/year 368,115 251,052 5,621 5,308

Revenue recognised during the period/year 1,233,141 1,029,599 28,872 47,358
Progress billing during the period/year (1,399,258) (912,536) (32,018) (47,045)
At the end of the period/year 201,998 368,115 2,475 5,621
Amount relating to construction contracts are balances due from customers under construction contracts that
arise when the Group and the Company receive payments from customers via progress billings. The Group or
the Company will previously have recognised amount due from contract customers for any work performed. Any
amount previously recognised as an amount due from contract customers is reclassified to trade receivables at
the point at which it is invoiced to the customer.
The Group and the Company apply an ECL rate, which is computed based on the historical time value loss rate
from the timing of repayment of trade receivables, adjusted by forward-looking information that is available
without undue cost or effort, to calculate the loss allowances for amount due from contract customers. At
the end of each reporting period, the Group and the Company review the ECL rate and re-measure the loss
allowance amount.
Included in additions to aggregate costs incurred to-date are the following amounts charged during the period:
Group Company
1.1.2019 to 1.1.2018 to 1.1.2019 to 1.1.2018 to
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Interest/finance costs capitalised 7 36,406 20,882 - -

Staff costs 69,384 47,286 19,188 16,649
Rental of premises and land 5,933 5,393 3,648 3,648
Running cost of machinery 1,004 912 - -
Rental of motor vehicles 7 4 - -
209

25. BIOLOGICAL ASSETS
Group
Note 30.6.2020 31.12.2018
RM’000 RM’000
At 1 January 2019/1 January 2018 77 202

Loss from changes in fair value 8 (46) (125)
At 30 June 2020/31 December 2018 31 77
As at 30 June 2020, the unharvested fresh fruit bunches (“FFB”) used in estimating fair value were 1,381 MT
(31.12.2018: 2,459 MT).
Management has considered FFB less than 15 days before harvesting in the valuation of fair value. FFB more
than 15 days before harvesting are excluded from the valuation as their fair values are considered negligible.
Costs to sell include harvesting costs at the point of harvest.
The Group’s biological assets were fair valued within Level 3 of the fair value hierarchy. A reasonable change in
the key assumptions would not result in a material impact to the financial statements.
26. INVENTORIES
Group
30.6.2020 31.12.2018
RM’000 RM’000
At cost:
Completed properties 11,704 11,371
Marine fuels and lubricants 3,704 4,586
Consumable goods 2,108 3,436
17,516 19,393
In current financial period, inventories recognised as cost of sales in profit or loss amounted to RM31,340,000
(31.12.2018: RM24,004,000). The cost of inventories recognised includes RM595,000 (31.12.2018: RMNil) in
respect of write-downs of inventory to net realisable value.
GOVERNANCE DRIVEN

27. PROPERTY DEVELOPMENT COSTS
Group
Note 30.6.2020 31.12.2018
RM’000 RM’000
Additions during the period/year 15,158 7,391
Cumulative costs recognised as an expense in profit or loss:

Previous years (3,098) (13,154)
Current period/year (4,681) (3,053)
Closed out due to completion of projects 6,957 13,109
(822) (3,098)
Costs closed out during the period/year due to completion of projects (6,957) (13,109)
Transfer from land held for property development 15 - 3,221
Transfer to land held for property development 15 (436) (14,867)
Transfer from other receivables - 13,131
Transfer to inventories (6,900) (5,854)
At 30 June 2020/31 December 2018 20,621 17,480
28. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Group
30.6.2020 31.12.2018
RM’000 RM’000
Current
Financial assets at fair value through profit or loss
- Unquoted unit trusts in Malaysia 323,821 164,338
Unit trusts are funds invested mainly in money market and fixed income instruments and are managed by
investment management companies. During the financial period, the Group has capitalised into the concession
service assets the fair value gain and dividend income from these financial assets amounting to RM22,013,000
(31.12.2018: RM231,000) and RM20,804,000 (31.12.2018: RM19,358,000) respectively.
211

29. CASH AND DEPOSITS
Group Company
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Deposits placed with licensed banks 128,723 63,791 53,439 13,468

Cash and bank balances 296,569 559,105 7,018 1,468
425,292 622,896 60,457 14,936
Included in deposits placed with licensed banks of the Group are deposits of RM49,364,000 (31.12.2018:
RM55,469,000) which have been pledged to financial institutions as security for bank guarantee and credit
facilities granted to the Group as disclosed in Note 32 and deposits of RM36,198,000 (31.12.2018: RM37,497,000)
which represent the sinking fund created pursuant to Concession Agreement for purposes of future assets
replacement at the teaching hospital.
Also included in deposits placed with licensed banks of the Company are deposits of RMNil (31.12.2018:
RM10,160,000) which have been pledged to financial institutions as securities for the overdraft facility granted to
its subsidiary as disclosed in Note 32(d).
The deposits placed with licensed banks of the Group and of the Company bear interest at effective interest rates
ranging from 1.55% to 4.24% (31.12.2018: 2.55% to 4.15%) and 1.55% to 2.50% (31.12.2018: 2.55% to 3.20%) per
annum, respectively.
30. SHARE CAPITAL
Number Number
Amount of shares Amount of shares
30.6.2020 30.6.2020 31.12.2018 31.12.2018
RM’000 RM’000 RM’000 RM’000
Issued and fully paid up:

Ordinary shares:
At 1 January 2019/1 January 2018 197,536 598,098 197,478 531,548
New ordinary shares, net of issuance costs - - 58 95
Effect of Bonus Issue - - - 66,455
At 30 June 2020/31 December 2018 197,536 598,098 197,536 598,098

GOVERNANCE DRIVEN

30. SHARE CAPITAL (CONT’D)
During the previous financial year, the issued and paid-up share capital of the Company was increased by
RM57,688 from RM197,478,058 to RM197,535,746 by way of issuance of 94,571 ordinary shares pursuant to the
exercise of options under the Employees’ Share Scheme at an exercise price of RM0.61 per ordinary share for
cash.
On 30 August 2018, the Company proposed to undertake a bonus issue of up to 79,840,322 ordinary shares to be
credited as fully paid-up on the basis of 1 new ordinary shares for every 8 existing shares of the Company (“Bonus
Issue”). The Bonus Issue has been completed following the listing of 66,454,852 new Bonus Shares (including
184,762 treasury shares) pursuant to the Bonus Issue.
31. RESERVES
Group Company
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Non-distributable:
Warrant reserve 27,889 27,889 27,889 27,889
Foreign exchange translation reserve 9,296 16,123 3,297 2,862
Employees’ share scheme (“ESS”) 1,506 2,331 1,506 2,331
Other reserve 1,594 872 - -
40,285 47,215 32,692 33,082

Treasury shares (1,026) (1,026) (1,026) (1,026)
Distributable:
Retained earnings 118,303 217,756 6,600 10,019
157,562 263,945 38,266 42,075
The movements in each category of the reserves are disclosed in the statements of changes in equity.
Warrant reserve
Warrant reserve relates to the fair value of warrants in relation to the right shares issued in 2014. In financial
year 2014, the Company issued 103,299,033 new detachable warrants (“Warrants”) pursuant to the rights shares
issued in 2014.
As at 30 June 2020, the total numbers of Warrants that remain unexercised were 116,201,952.
The fair value of the Warrants have been determined based on its quoted price at the issuance date.
213

31. RESERVES (CONT’D)
Foreign exchange translation reserve
The foreign exchange translation reserve comprises all foreign currency differences arising from the translation
of the financial statements of foreign operations.
Employees’ Share Scheme (“ESS”)
The ESS reserve represents the equity settled share options granted to eligible directors and employees. This
reserve is made up of the cumulative value of services received from eligible directors and employees recorded
on the grant date of share options. Details of ESS granted to eligible directors and employees are disclosed in
Note 40.
Other reserve
Other reserve mainly represents the statutory reserve in accordance with Saudi Arabian Companies Law &
Company’s Article of Association, which 10% of the annual net income is required to be transferred to statutory
reserve until this reserve equals to 50% of the capital. This reserve is not available for dividend distribution.
Treasury shares
Treasury shares relate to ordinary shares of the Company that are held by the Company. The amount consists of
the acquisition costs of treasury shares net of the proceeds received on their subsequent sale or issuance.
There was no repurchase of the Company’s shares during the financial period.
Of the total 598,097,678 (31.12.2018: 598,097,678) issued and fully paid-up ordinary shares as at 30 June 2020,
1,662,862 (31.12.2018: 1,662,862) shares are held as treasury shares by the Company. As at 30 June 2020, the
number of outstanding ordinary shares in issue after the set off is therefore 596,434,816 (31.12.2018: 596,434,816)
ordinary shares.
Retained earnings
Distributable reserves are those available for distribution as cash dividends.
The retained earnings of the Group and of the Company are available for appropriation as dividends to the
shareholders of the Group and of the Company under the single tier tax system.
GOVERNANCE DRIVEN

32. LOANS AND BORROWINGS
Group Company
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Non-current
Term loans a 1,047,635 1,281,809 160,400 175,000
Finance lease liabilities b 15,833 27,095 123 609
Sukuk c 1,549,210 1,000,000 - -
2,612,678 2,308,904 160,523 175,609
Current
Term loans a 89,560 78,556 14,600 -
Finance lease liabilities b 10,583 7,885 272 414
Sukuk c - 17,053 - -
Bank overdrafts d 38,673 32,092 - -
Trust receipts e 6,403 7,050 - -
Revolving credit and Murabahah facilities f 214,799 138,078 - 25,000
Bankers’ acceptance g 8,944 36,777 - -
Invoice financing h 2,860 - - -
371,822 317,491 14,872 25,414
2,984,500 2,626,395 175,395 201,023

215

32. LOANS AND BORROWINGS (CONT’D)
Note a
Group Company
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Term loan - I (i) 304,649 341,321 - -

Term loan - II (ii) - 15,206 - -
Term loan - III (iii) - 326,493 - -
Term loan - IV (iv) - 39,500 - -
Term loan - V (v) 7,794 8,900 - -
Term loan - VI (vi) - 148 - -
Term loan - VII (vii) 19,024 30,354 - -
Term loan - VIII (viii) 483,248 291,172 - -
Term loan - IX (ix) 175,000 175,000 175,000 175,000
Term loan - X (x) 3,999 8,499 - -
Term loan - XI (xi) 5,855 7,686 - -
Term loan - XII (xii) 85,000 91,467 - -
Term loan - XIII (xiii) 12,958 4,619 - -
Term loan – XIV (xiv) 14,668 20,000 - -
Term loan - XV (xv) 25,000 - - -
1,137,195 1,360,365 175,000 175,000
The term loans of the Group comprise the followings:
(i) Term loan I is denominated in IDR and USD and bears interest at 11.25% and 5.78% (31.12.2018: 11.25%
and 5.78%) per annum respectively. The term loan is repayable within a period of 108 months upon full
disbursement and is secured by a corporate guarantee from the Company. In June 2020, the bank has
approved 6 months moratorium for principal payment which will continue to recommence in December
2020. The existing profit payment shall continue to be paid during the moratorium period.
(ii) Term loan II bears interest at rates ranging from 5.11% to 5.17% (31.12.2018: 5.11% to 5.17%) per annum.
The term loan was repayable in equal quarterly instalments over 9 years which commenced from September
2011 and was secured and supported by:
(a) a corporate guarantee from the Company; and

(b) a memorandum of charge on the shares of a subsidiary.
The term loan has been fully settled during the period.
GOVERNANCE DRIVEN

Note a (Cont’d)
The term loans of the Group comprise the followings: (Cont’d)
(iii) Term loan III bears interest at rates ranging from 5.80% to 6.30% (31.12.2018: 5.80% to 6.30%) per annum
and was repayable on quarterly basis by 44 instalments commencing on the 51st month from the first date
of loan disbursement in July 2012. The term loan has been fully settled during the period.
(iv) Term loan IV bears interest at rates ranging from 5.77% to 6.06% (31.12.2018: 5.77% to 6.06%) per annum
and was repayable on lump sum basis either on the 60th month from the first date of loan disbursement in
July 2012 or upon receipt of reimbursable cost from a contract customer, whichever is earlier. The tenure for
term loan Tranche 2 was 5 years. The term loan has been fully settled during the period.
(v) Term loan V bears interest at 5.11% (31.12.2018: 5.54%) per annum. The term loan is repayable on monthly
basis by up to 85 instalments commencing from June 2015.
The above term loan is secured by way of:
(a) a first party legal charge over the land held for development as disclosed in Note 15;
(b) a legal assignment of rights in rental proceeds to be derived from the future commercial development
on the land; and
(c) a corporate guarantee from the Company.
In May 2020, the Bank has approved 6 months moratorium for principal payments which will continue
to recommence in November 2020. The existing interest payment shall continue to be paid during the
moratorium period.
(vi) Term loan VI was interest free and repayable by 60 monthly instalments commencing from July 2016.
The above term loan was secured by way of:
(a) a debenture on a subsidiary’s current and future fixed and floating assets;
(b) deposit placed with a financial institution of a subsidiary; and
(c) personal guarantee from the directors of a subsidiary.
The term loan has been fully settled during the period.
(vii) Term loan VII bears interest at rates ranging from 3.32% to 5.94% (31.12.2018: 4.54% to 6.04%) per annum
and repayable over 45 months instalments commencing April 2016. The term loan is secured and supported
by freehold land and building as disclosed in Note 12 and corporate guarantee by the Company. In May 2020,
the bank agreed to restructure and reschedule the loan to 82 months from the instalment commencement
date with a lower monthly repayment.
In May 2020, the bank has approved 6 months moratorium for principal payment which will continue to
recommence in November 2020. The existing profit payment shall continue to be paid during the moratorium
period.
217

Note a (Cont’d)
(viii) Term loan VIII is a Government Support Loan which bears fixed interest at 4% (31.12.2018: 4%) per annum.
The term loan is repayable over 35 years commencing in March 2021 and is secured and supported by a
corporate guarantee by the Company. It is not applicable for moratorium as it is currently under the grace
period.
(ix) Term loan IX bears interest at rates ranging from 6.39% to 9.14% (31.12.2018: 6.41% to 6.66%) per annum.
The term loan is repayable over 6 years commencing August 2020 and secured by the shares held by the
Company over its subsidiary. In May 2020, the bank has approved 6 months moratorium for both profit and
principal payment which will continue to recommence in November 2020 and February 2021 respectively.
(x) Term loan X bears interest at 5.39% (31.12.2018: 5.79%) per annum. The term loan is repayable over 7 years
commencing January 2020 and is secured and supported by a corporate guarantee by the Company. In
April 2020, the bank has approved 6 months moratorium for both interest and principal payment which will
continue to recommence in October 2020.
(xi) Term loan XI bears interest at 5.20% (31.12.2018: 5.14%) per annum. The term loan is secured and supported
by a corporate guarantee by the Company. The term loan is repayable over 8 years commencing January
2018. In September 2020, the bank agreed to restructure and reschedule the loan by extending the loan
tenure by 11 months. The principal payment will recommence in July 2021 whilst the existing interest
payment shall continue to be paid during the extension period.
In September 2020, the bank has approved moratorium for principal payment which will continue to
recommence in July 2021. The existing profit payment shall continue to be paid during the moratorium
period.
(xii) Term loan XII bears interest at rates ranging from 6.65% to 6.75% (31.12.2018: 2.25% to 6.35%) per annum.
The term loan is repayable in half-yearly instalments over 7 years commencing from August 2018 and is
secured by a corporate guarantee by the Company.
In August 2020, the bank agreed to restructure and reschedule the loan by extending the loan tenure by 4
years with lower monthly principal and interest payments. The principal payment will recommence in July
2022 whilst the existing interest payment shall continue to be paid during the extension period.
(xiii) Term loan XIII bears interest at rates ranging from 2.5% to 6.8% (31.12.2018: 2.5% to 6.8%) per annum.
The term loan is repayable in instalments over 2.5 years commencing from March 2018 and is secured
by a corporate guarantee by the Company. In April 2020, the bank has approved 6 months moratorium for
principal payment which will continue to recommence in October 2020. The existing profit payment shall
continue to be paid during the moratorium period.
(xiv) Term loan XIV bears interest at rates ranging from 5.35% to 5.74% (31.12.2018: 5.65% to 5.94%) per annum
and was repayable on monthly basis over 30 monthly instalments commencing on the 31st month from the
first disbursement. It has been fully settled in August 2020.
GOVERNANCE DRIVEN

Note a (Cont’d)
(xv) Term loan XV represents bankers’ acceptance and invoice financing being converted into a short-term loan
to be repaid over a period of 8 months. It bears an interest rate of 6.70% per annum and is secured by a
corporate guarantee from the Company.
Note b
Finance lease liabilities are payable as follows:
Present Present
Future value of Future value of
minimum minimum minimum minimum
lease Interest in lease lease Interest in lease
payments suspense payments payments suspense payments
30.6.2020 30.6.2020 30.6.2020 31.12.2018 31.12.2018 31.12.2018
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group
Less than one year 11,707 (1,124) 10,583 9,120 (1,235) 7,885
Between one and five
years 16,784 (951) 15,833 29,126 (2,031) 27,095
28,491 (2,075) 26,416 38,246 (3,266) 34,980
Company
Less than one year 280 (8) 272 450 (36) 414
Between one and five
years 126 (3) 123 631 (22) 609
406 (11) 395 1,081 (58) 1,023
Note c
The effective profit rate for Sukuk is 5.15% (31.12.2018: 5.90%) per annum. The facility is guaranteed by financial
guarantors and supported by a corporate guarantee by the Company and is repayable over 11 years commencing
year 2025. It is secured by proceeds of toll collection, income and other revenue arising from the Concession
Agreement with the Government of Malaysia. As disclosed in Note 47(d), during the financial period, the Group
issued RM535,000,000 Sukuk Murabahah under the Sukuk Murabahah Programme in nominal value based on the
Shariah principle of Murabahah. The Sukuk Murabahah has a tenure ranging from 3 to 12 years, at a profit rate
of between 4.70% to 5.35% per annum, payable semi-annually and guaranteed by the Company. Proceeds raised
from the issuance was advanced to the Company for its Shariah-compliant general working capital requirements
and corporate purposes.
219

Note d
The bank overdraft facilities are repayable on demand and bear interest at rates ranging from 6.67% to 8.17%
(31.12.2018: 7.81% to 8.06%) per annum. Bank overdraft facilities are secured by deposits placed with licensed
banks; freehold land and building as disclosed in Note 12; and a corporate guarantee from the Company.
Note e
The trust receipts are repayable within 120 to 180 days and bear interest at 6.44% to 8.82% (31.12.2018: 7.71%
to 9.07%) per annum. These facilities are secured and supported by deposits placed with licensed banks of the
Company and corporate guarantee from the Company.
Note f
The revolving credits and Murabahah facilities are repayable on demand and bear profit at rates ranging from
5.06% to 6.75% (31.12.2018: 5.65% to 6.64%) per annum. These facilities are secured by corporate guarantee
from the Company and assignment of projects proceeds of a subsidiary.
Note g
Bankers’ acceptance facilities are repayable within 120 days and bear rates ranging from 4.40% to 5.38%
(31.12.2018: 5.36%) per annum. These facilities are supported by corporate guarantee from the Company.
Note h
Invoice financing facilities are repayable within 120 days and bear interest at 4.55% to 5.87% per annum. These
facilities are supported by corporate guarantee from the Company.
33. LEASE LIABILITIES
Group Company
30.6.2020 30.6.2020
RM’000 RM’000
Present value of lease liabilities analysed as:

Current 3,646 599
Non-current 5,183 71,082
8,829 71,681
GOVERNANCE DRIVEN

33. LEASE LIABILITIES (CONT’D)
Set out below are the carrying amount of lease liability and the movements during the financial period:

Group Company
Note 30.6.2020 30.6.2020
RM’000 RM’000
Effect of adoption of MFRS 16 46 16,364 72,795
Addition 13 303 -
Finance cost on lease liabilities 7 480 4,444
Repayment of lease liabilities (8,318) (5,558)
At 30 June 2020 8,829 71,681
Maturity analysis of the lease liabilities is as follows:
Future Present value

minimum of minimum
lease Interest in lease
payments suspense payments
30.6.2020 30.6.2020 30.6.2020
RM’000 RM’000 RM’000
Group
Less than one year 4,017 (371) 3,646
Between one and five years 3,657 (445) 3,212
More than five years 3,074 (1,103) 1,971
10,748 (1,919) 8,829
Company
Less than one year 3,705 (3,106) 599
Between one and five years 14,822 (12,147) 2,675
More than five years 138,651 (70,244) 68,407
157,178 (85,497) 71,681

The Group and the Company applied the incremental borrowing rates to the lease liabilities recognised ranging
from 3.00% to 5.05% per annum.
221

34. EMPLOYEE BENEFITS
Retirement benefits
Group
30.6.2020 31.12.2018
RM’000 RM’000
Net defined benefit liability 4,935 3,373
The Group’s subsidiary in Indonesia makes provision for non-contributory defined benefit plan that provides
pension benefits for employees upon retirement, death, disability and voluntary resignation as required under
Labour Law No. 13/2003 of the Republic of Indonesia. The plan entitles an employee to receive payment according
to the years of service.
The defined benefit plan exposes the Group to actuarial risks, such as longevity risk, currency risk and interest
rate risk.
Movement in net defined benefit obligations
Group
Note 30.6.2020 31.12.2018
RM’000 RM’000
Included in profit or loss 8

Current service cost 1,172 761
Interest service cost 638 202
1,810 963
Included in other comprehensive income
Remeasurement gain:
Actuarial gain arising from experience adjustments (407) (66)
Effect of movements in exchange rate 326 (400)
Less: Benefit paid (167) (153)
At 30 June 2020/31 December 2018 4,935 3,373
Post-employee benefits obligations are calculated by an independent actuary using the Projected Unit Credit
method.
GOVERNANCE DRIVEN

34. EMPLOYEE BENEFITS (CONT’D)
The key assumptions used are as follows:
30.6.2020 31.12.2018
Discount rate 7.50% per annum 8.25% per annum

Future salary/wage 5.00% per annum 5.00% per annum
increment
Mortality rate 100% of TMI3 100% of TMI3
Morbidity rate 5% of TMI3 5% of TMI3
Executive 5% per year until age 34 then decrease 5% per year until age 34 then decrease
linearly and become 0% at age 55 linearly and become 0% at age 55
Non-Executive 10% per year until age 34 then decrease 10% per year until age 34 then decrease
linearly and become 0% at age 55 linearly and become 0% at age 55
30.6.2020 31.12.2018
Proportion of early retirement take-up N/A N/A

Proportion of normal retirement take-up 100% 100%
Normal retirement age 55 years 55 years
35. TRADE AND OTHER PAYABLES
Group Company
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Non-current
Deferred income e 206,942 136,086 - -
Advance payments received b 15 2,253 - 2,253
206,957 138,339 - 2,253
Current
Trade
External parties a 659,489 810,920 3,265 11,767
Advance payments received b 12,680 23,436 11,661 16,331
672,169 834,356 14,926 28,098

223

35. TRADE AND OTHER PAYABLES (CONT’D)
Group Company
Note 30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Current
Non-trade
Amount due to:
Director c 60 86 - -
Ultimate holding company c 358 - - -
Affiliates c 23,952 6,561 - -
Subsidiaries c - - 989,011 222,213
24,370 6,647 989,011 222,213

Deferred income e 36,199 37,497 - -
Accruals and other payables d 101,436 219,572 7,531 12,860
162,005 263,716 996,542 235,073
834,174 1,098,072 1,011,468 263,171
Note a
The normal credit term granted by suppliers of the Group and of the Company ranges from 30 to 90 days
(31.12.2018: 30 to 90 days).
Included in trade payables of the Group are:
(i) retention sums of RM187,407,000 (31.12.2018: RM143,378,000).
(ii) amount due to affiliates as follows:
Group
30.6.2020 31.12.2018
RM’000 RM’000
Amount due to subsidiaries of Chuan Huat Resources Berhad, a company in

which Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda has a substantial
financial interest and is also a director:
- Chuan Huat Industrial Marketing Sdn Bhd 18,909 7,643
- Chuan Huat Steel Sdn Bhd 922 332
Affiliates are companies, which have common directors and shareholders of the Company and its subsidiaries.
The amount is unsecured, interest-free and subject to normal credit terms.
GOVERNANCE DRIVEN

35. TRADE AND OTHER PAYABLES (CONT’D)
Note b
Advance payments received are in respect of the Group and the Company’s construction contracts. These
advances are to be set off against the progress billings on the related contracts.
Note c
These amounts are unsecured, interest-free and repayable on demand.
Note d
Included in accruals and other payables of the Group is interest on borrowings amounting to RM33,008,000
(31.12.2018: RM29,195,000).
Note e
The Group received a loan from the Malaysian Government as per Note 32(a)(viii) at an interest rate lower than
the prevailing market rate. Using the prevailing market rate, the loan amount is adjusted to its fair value and the
difference is treated as deferred income.
36. DIVIDENDS
Dividends recognised and paid by the Company during the financial period was:
Sen per Amount Date of

share RM’000 Payment
30 June 2020
Interim dividend - - -
31 December 2018
Interim dividend 1.00 5,302 26 October 2018
No final dividend was declared or proposed during the financial period and the Directors do not recommend any
final dividend to be paid for the financial period under review.
225

37. OPERATING SEGMENTS
The Group has five reportable segments, as described below, which are the Group’s strategic business units.
The strategic business units offer different products and services, and are managed separately because they
require different business strategies. For each of the strategic business units, the Group Managing Director (the
chief operating decision maker) reviews internal management reports at least on a quarterly basis. The following
summary describes the operations in each of the Group’s reportable segments:
(i) Engineering and Construction - civil and structural works

(ii) Concession - concession and assets managements
(iii) Oil and Gas - dealing in marine fuels, lubricants and petroleum based products
(iv) Plantation - production of crude palm oil and kernel
(v) Property - property development, hotel operation and facilities management
Other non-reportable segments comprise investment holding and provision of management services.
Inter-segment transactions, if any, are entered in the ordinary course of business based on terms mutually
agreed upon by the parties concerned.
Performance is measured based on segment profit before tax, interest, depreciation and amortisation as included
in the internal management reports that are reviewed by the Group Managing Director (the chief operating
decision maker). Segment profit before tax is used to measure performance as management believes that such
information is the most relevant in evaluating the results of certain segments relative to other entities that
operate within these industries.
Segment assets
The total of segment assets is measured based on all assets (including goodwill and intangible assets) of a
segment, as included in the internal management reports that are reviewed by the Group Managing Director.
Segment total asset is used to measure the return on assets of each segment.
Segment liabilities
The total of segment liabilities is measured based on all liabilities of a segment, as included in the internal
management reports that are reviewed by the Group Managing Director. Segment total liability is used to measure
the gearing ratio of each segment.
Segment capital expenditure
Segment capital expenditure is the total cost incurred during the financial period to acquire property, plant and
equipment, prepaid land lease, land held for development and intangible assets other than goodwill.
GOVERNANCE DRIVEN

37. OPERATING SEGMENTS (CONT’D)
Geographical segments
The Group operates in four principal geographical areas of the world:
(i) Malaysia - civil and structural works, concession assets management, dealing
in marine fuels, lubricants and petroleum-based products, property
development, investment holding and provision of management services
(ii) Republic of Indonesia - oil palm cultivation
(iii) India (Branch office) - civil and structural works
(iv) Kingdom of Saudi Arabia - civil and structural works
Engineering
and Oil Other
Note Construction Concession and Gas Plantation Property Operations Eliminations Consolidated
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
30 June 2020
Revenue
External revenue 1,233,141 76,045 86,244 46,827 20,504 - - 1,462,761
Inter-segment
revenue 515 - 6,637 - - 30,843 (37,995) -
Total revenue 1,233,656 76,045 92,881 46,827 20,504 30,843 (37,995) 1,462,761
Results
Operating results 7,697 99,139 (4,002) (45,237) (926) (49,405) - 7,266
Interest income 1,578 493 11 - 77 730 - 2,889
Interest expense (17,681) (18,728) (1,794) (14,188) (2,094) (31,460) - (85,945)
(Loss)/Profit
before tax (8,406) 80,904 (5,785) (59,425) (2,943) (80,135) (75,790)
Income tax
expense (35,438)
Loss for the

financial
period (111,228)
227

Engineering
and Oil Other
Construction Concession and Gas Plantation Property Operations Eliminations Consolidated
Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
30 June 2020
(Cont’d)
Other segment
information
Additions to non-
current assets (i) 3,685 - 24,999 40,025 7,346 - - 76,055
Other non-
cash income/
(expense) (ii) 360 84,131 - (10,525) - 825 - 74,791
Depreciation and
amortisation
of non-current
assets 24,402 4 15,940 23,027 1,157 824 - 65,354
Engineering
and Oil Other
30 June 2020
Assets
Segment assets 2,587,091 719,700 198,853 389,029 106,613 144,889 - 4,146,175
Investments 322,614 - - - - 4,125 - 326,739
Deferred tax
assets 14,631 - 5,435 7,284 - 235 - 27,585
Tax recoverable - 2,115 810 1 104 2,696 - 5,727
Total assets 2,924,336 721,815 205,098 396,314 106,717 151,946 - 4,506,226
Liabilities
Segment
liabilities 846,089 51,882 25,831 50,824 15,402 64,867 - 1,054,895
Loans and
borrowings 1,750,485 - 106,023 394,979 26,594 706,419 - 2,984,500
Deferred tax
liabilities - 87,636 223 - - 8,114 - 95,973
Tax liabilities 9,447 587 - - 288 - - 10,322
Total liabilities 2,606,021 140,105 132,077 445,803 42,284 779,400 - 4,145,690

GOVERNANCE DRIVEN

Engineering
and Oil Other
Note Construction Concession and Gas Plantation Property Operations Eliminations Consolidated
31 December
2018
Revenue
External
revenue 1,029,599 36,003 46,561 106,507 9,920 - - 1,228,590
Inter-segment
revenue 1,104 - 3,140 - - 55,992 (60,236) -
Total revenue 1,030,703 36,003 49,701 106,507 9,920 55,992 (60,236) 1,228,590
Results
Operating
results 65,137 66,441 (3,597) (19,681) (826) (23,606) - 83,868
Interest income 2,219 197 23 22 35 373 - 2,869
Interest expense (13,131) (22,880) (2,265) (9,894) (991) (12,759) - (61,920)
Profit/(Loss)
before tax 54,225 43,758 (5,839) (29,553) (1,782) (35,992) - 24,817
Income tax
expense (16,229)
Profit for the

financial year 8,588
Other segment
information
Additions to
non-current
assets (i) 15,024 - 38,443 47,618 8,925 2,052 - 112,062
Other non-
cash income/
(expense) (ii) 257 57,171 5 (20,297) - 1,459 - 38,595
Depreciation
and
amortisation
of non-current
assets 12,710 4 3,909 10,821 545 2,246 - 30,235
229

Engineering
and Oil Other
31 December
2018
Assets
Segment assets 2,667,103 759,470 164,288 358,214 96,650 180,860 - 4,226,585
Investments 163,131 - - - - 4,162 - 167,293
Deferred tax
assets 11,795 - 6,653 16,323 469 234 - 35,474
Tax recoverable 156 2,517 3,930 1,618 152 2,966 - 11,339
Total assets 2,842,185 761,987 174,871 376,155 97,271 188,222 - 4,440,691
Liabilities
Segment
liabilities 1,022,656 70,266 23,267 60,143 13,484 49,968 - 1,239,784
Loans and
borrowings 1,571,935 365,925 123,390 342,900 21,221 201,024 - 2,626,395
Deferred tax
liabilities 1,283 72,852 230 - 10 8,113 - 82,488
Tax liabilities 17,995 187 - - - 840 - 19,022
Total liabilities 2,613,869 509,230 146,887 403,043 34,715 259,945 - 3,967,689

GOVERNANCE DRIVEN

Major segment by geographical area
Republic of Kingdom of
Malaysia Indonesia India Saudi Arabia Eliminations Consolidated
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
30 June 2020
Total revenue from external
customers 1,415,934 46,827 - - - 1,462,761
Total assets 4,026,579 396,314 11,061 72,272 - 4,506,226

Total liabilities 3,682,809 445,803 5,721 11,357 - 4,145,690
Net additions to non-current

assets 36,030 40,025 - - - 76,055
31 December 2018
Total revenue from external
customers 1,122,083 106,507 - - - 1,228,590
Total assets 3,983,573 376,153 11,163 69,802 - 4,440,691

Total liabilities 3,537,792 403,043 15,885 10,969 - 3,967,689
Net additions to non-current

assets 64,444 47,618 - - - 112,062
(i) Additions to non-current assets consist of the following items:
Group
Note 30.6.2020 31.12.2018
RM’000 RM’000
Property, plant and equipment 12 75,332 102,915

Prepaid lease payments - 401
Land held for development 539 8,719
Intangible assets 184 27
76,055 112,062
231

(ii) Other non-cash expenses/(income) consist of the following items as presented in the respective notes to the
financial statements:
Group
30.6.2020 31.12.2018
RM’000 RM’000
Fair value loss arising from biological assets 46 125

Employees’ share scheme expenses (825) 1,331
Amortisation of transaction costs 1,712 1,495
Loss on foreign exchange - unrealised 8,767 18,700
Accretion of fair value on non-current receivables (84,131) (59,892)
Gain on disposal of property, plant and equipment (360) (354)
(74,791) (38,595)
38. FINANCIAL INSTRUMENTS
38.1 Classes and categories of financial instruments
The table below provides an analysis of financial instruments as at end of the reporting period categorised
as follows:
(a) Financial assets measured at amortised cost;

(b) Financial assets designated at fair value through profit or loss (“FVTPL”);
(c) Financial assets designated at fair value through other comprehensive income (“FVTOCI”); and
(d) Other financial liabilities measured at amortised cost.
GOVERNANCE DRIVEN

38. FINANCIAL INSTRUMENTS (CONT’D)
38.1 Classes and categories of financial instruments (Cont’d)
Group Company
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Financial assets
Financial assets at amortised cost:

Trade and other receivables, excluding
prepayments 1,112,792 1,229,397 403,752 137,897
Cash and deposits 425,292 622,896 60,457 14,936
Financial assets at FVTPL:

Club membership and unquoted shares 116 116 68 68
Unquoted unit trusts 323,821 164,338 - -
Other financial liabilities at amortised cost:

Loans and borrowings 2,984,500 2,626,395 175,395 201,023
Lease liabilities 8,829 - 71,681 -
Trade and other payables, excluding
deferred income 797,990 1,062,828 1,011,468 265,424
38.2 Financial risk management
The Group has exposure to the following risks from its use of financial instruments:
• Credit risk
• Liquidity risk
• Market risk
233

38.3 Credit risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its
trade and other receivables, bank balances and deposits placed with licensed banks, concession service
receivable, amount due from joint venture and advances to ultimate holding company, associate and
affiliates. The Company’s exposure to credit risk arises principally from trade and other receivables, bank
balances and deposits placed with licensed banks and advances to ultimate holding company, subsidiaries
and affiliates.
Receivables
Risk management objectives, policies and processes for managing the risk
Management has a credit policy in place and the exposure to credit risk is monitored on an on-going basis.
Exposure to credit risk, credit quality and collateral
Generally, trade and other receivables are written off if the Directors deem them uncollectable. As at the
end of the reporting period, the Group’s and the Company’s maximum exposure to credit risk arising from
trade and other receivables is represented by the carrying amounts in the statements of financial position.
Management has taken reasonable steps to ensure that trade receivables that are neither past due nor
impaired are stated at their realisable values. A significant portion of these trade receivables are regular
customers that have been transacting with the Group. On-going credit evaluation is performed on the
financial condition of the trade receivables. The Group uses ageing analysis to monitor the credit quality of
the trade receivables.
Impairment losses
The Group applies a simplified approach in calculating loss allowances for trade receivables and
construction contract assets at an amount equal to lifetime ECL. The Group estimates the loss allowance
on trade receivables and construction contract assets by applying an ECL rate at the end of each reporting
period. The calculation of ECL rates were segmented according to potential exposures based on common
credit risk characteristics such as nature of business, type of projects undertaking and selection of similar
type of customers.
The Group assessed the ECL on trade receivables and construction contract assets individually. The Group
writes off a trade receivable and construction contract assets when there is information indicating that the
debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has
been placed under liquidation or has entered into bankruptcy proceedings, or when the trade receivables
and construction contract assets are over three years past due, whichever occurs earlier. None of the trade
receivables and construction contract assets that have been written off is subject to enforcement activities.
GOVERNANCE DRIVEN

38.3 Credit risk (Cont’d)
In addition, the Group has determined that, based on the assessments undertaken to date on the past
default experience and reputation of the debtors, the Group regards the trade receivables and construction
contract assets to have low credit risk.
The Group maintains an ageing analysis in respect of trade receivables only. The ageing of trade receivables
(current and non-current) as at the end of the reporting period was:
Group
Individual
Gross impairment Net
RM’000 RM’000 RM’000
30 June 2020
Not past due 310,958 - 310,958
Past due 0 - 30 days 1,107 - 1,107
Past due 31 - 120 days 8,040 - 8,040
Past due more than 120 days 27,269 - 27,269
347,374 - 347,374
31 December 2018
Not past due 331,732 - 331,732
Past due 0 - 30 days 10,508 - 10,508
Past due 31 - 120 days 5,964 - 5,964
Past due more than 120 days 14,334 - 14,334
362,538 - 362,538
Receivables that are individually determined to be credit impaired at the end of the reporting period relate
to debtors who are in significant financial difficulties and had defaulted on payments. As at the end of the
reporting period, there is no allowance made for impairment losses of trade receivables and construction
contract assets for the Group.
Financial guarantees
The Company provides unsecured financial guarantees to banks in respect of banking facilities granted
to certain subsidiaries. The Company monitors on an ongoing basis the results of the subsidiaries and
repayments made by the subsidiaries.
235

38.3 Credit risk (Cont’d)
Financial guarantees (Cont’d)
The maximum exposure to credit risk amounts to RM2,809,105,000 (31.12.2018: RM2,425,372,000),

represented by the outstanding banking facilities of the subsidiaries as at the end of the reporting period.
As at the end of the reporting period, there was no indication that any subsidiary would default on repayment.
Inter-company balances
Amounts due from ultimate holding company, associate and affiliates are classified as amortised cost in the
Group’s and the Company’s financial statements because the Group’s and the Company’s business model
is to hold and collect the contractual cash flows and those cash flows are ‘solely payments of principal and
interest’ (“SPPI”).
The Company makes payment on behalf of and/or provides advances to its ultimate holding company,
subsidiaries, associate, joint ventures and affiliates. The Company monitors the results of the subsidiaries
regularly except for the amounts due from ultimate holding company, associate, joint ventures and affiliates
which are not material.
As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying
amounts in the statement of financial position as shown in Note 24.
Impairment losses
As at the end of the reporting period, there was no indication that the amounts due from ultimate holding
company, subsidiaries, associate, joint venture and affiliates are not recoverable.
Other receivables
As at the end of each reporting period, the Group measure ECLs through loss allowance at amount equal to
12 month-ECL if credit risk on a financial asset or a group of financial assets has not increased significantly
since initial recognition. For all other financial assets, a loss allowance at an amount equal to lifetime ECL
is required.
GOVERNANCE DRIVEN

38.4 Liquidity risk
Liquidity risk is the risk that the Group or the Company will not be able to meet their financial obligations
as they fall due. The Group and the Company’s exposure to liquidity risk arises principally from its various
payables, loans and borrowings.
The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the
management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when
they fall due.
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or
at significantly different amounts.
Maturity analysis
The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as
at the end of the reporting period based on undiscounted contractual payments:
Contractual More
Carrying interest Contractual Under 1 to 2 2 to 5 than
amount rate/ cash flows 1 year years years 5 years
Group RM’000 coupon RM’000 RM’000 RM’000 RM’000 RM’000
30 June 2020
Trade and other
payables 797,990 - 797,990 797,975 15 - -
Bank overdrafts 38,673 6.67% - 8.17% 38,673 38,673 - - -
Trust receipts,
bankers’ acceptance
and invoice financing 18,207 4.40% - 8.82% 19,338 19,338 - - -
Lease liabilities 8,829 3.00% - 5.05% 10,748 4,017 2,647 1,010 3,074
Finance lease
liabilities 26,416 1.52% - 10.32% 28,491 11,707 6,498 10,286 -
Revolving credit and
Murabahah facilities 214,799 5.06% - 6.75% 214,799 214,799 - - -
Term loans and Sukuk 2,686,405 4.20% - 7.35% 5,204,329 240,164 234,145 848,046 3,881,974
3,791,319 6,314,368 1,326,673 243,305 859,342 3,885,048

237

38.4 Liquidity risk (Cont’d)
Maturity analysis (Cont’d)
Contractual More
Carrying interest Contractual Under 1 to 2 2 to 5 than
amount rate/ cash flows 1 year years years 5 years
Group RM’000 coupon RM’000 RM’000 RM’000 RM’000 RM’000
31 December 2018
Trade and other
payables 1,062,828 - 1,062,828 1,060,575 2,253 - -
Bank overdrafts 32,092 7.81% - 8.06% 32,092 32,092 - - -
Trust receipts and
bankers’ acceptance 43,827 5.36% - 9.07% 43,827 43,827 - - -
Finance lease
liabilities 34,980 1.52% - 10.38% 38,246 9,120 8,605 20,521 -
Revolving credit and
Murabahah facilities 138,078 5.65% - 6.64% 138,078 138,078 - - -
Term loans and Sukuk 2,377,418 2.25% - 11.25% 6,105,737 174,664 241,946 888,424 4,800,703
3,689,223 7,420,808 1,458,356 252,804 908,945 4,800,703
Company
30 June 2020
Trade and other
payables 1,011,468 - 1,011,468 1,011,468 - - -
Lease liabilities 71,681 4.35% 157,178 3,705 3,705 11,117 138,651
Finance lease
liabilities 395 1.52% - 2.65% 406 280 126 - -
Term loan 175,000 6.90% 222,312 26,823 42,837 106,880 45,772
1,258,544 1,391,364 1,042,276 46,668 117,997 184,423
31 December 2018
Trade and other
payables 265,424 - 265,424 263,171 2,253 - -
Finance lease
liabilities 1,023 1.52% - 2.65% 1,081 450 435 196 -
Term loan 175,000 6.90% 223,720 12,075 40,346 108,944 62,355
Revolving credit 25,000 5.52% 25,000 25,000 - - -
466,447 515,225 300,696 43,034 109,140 62,355

GOVERNANCE DRIVEN

38.5 Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
other prices will affect the Group’s financial position or cash flows.
38.5.1 Currency risk
The Group is exposed to foreign currency risk on sales, purchases and borrowings that are denominated
in a currency other than the respective functional currencies of Group entities. The currency giving rise to
this risk are primarily US Dollar (“USD”) and Saudi Riyal (“SAR”).
The Group presently does not hedge its foreign currency exposures. Nevertheless, the management
regularly monitors its exposure and keep this policy under review.
Exposure to foreign currency risk
The Group’s exposure to foreign currency (a currency other than the functional currency of Group entities)
risk, based on carrying amounts as at the end of the reporting period was:
Group
30.6.2020 31.12.2018
RM’000 RM’000
Saudi Riyal - other receivables - 98,860

US Dollar - loans and borrowings (304,649) (341,321)
Exposure in the statements of financial position (304,649) (242,461)
Currency risk sensitivity analysis
A 10% (31.12.2018: 10%) strengthening of RM against the following currency at the end of the reporting
period would have increased/(decreased) equity and profit or loss by the amounts shown below. This
analysis is based on foreign currency exchange rate variances that the Group considered reasonably
possible at the end of the reporting period. This analysis assumes that all other variables, in particular
interest rates, remained constant and ignores any impact of forecasted sales and purchases.
239

38.5.1 Currency risk (Cont’d)
Currency risk sensitivity analysis (Cont’d)
Group
30.6.2020
Equity Profit or loss
RM’000 RM’000
SAR - (98,886)
USD 30,465 34,132
A 10% (31.12.2018: 10%) weakening of RM against the above currency at the end of the reporting period
would have had equal but opposite effect on the above currency to the amounts shown above, on the basis
that all other variables remained constant.
38.5.2 Interest rate risk
The Group’s fixed-rate borrowings are exposed to a risk of change in their fair value due to changes in
interest rates. The Group’s variable rate borrowings are exposed to a risk of change in cash flows due to
changes in interest rates. Short-term receivables and payables are not significantly exposed to interest
rate risk.
The Group’s excess cash is invested in fixed deposits and other investments with tenure of less than
12 months, hence exposure to risk of change in their fair values due to changes in interest rates is not
significant.
The Company does not have a formal policy for managing interest rate risk. The exposure to interest rate
risk is monitored closely by the management.
GOVERNANCE DRIVEN

38.5.2 Interest rate risk (Cont’d)
Exposure to interest rate risk
The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instrument,
based on carrying amounts as at the end of the reporting period was:
Group Company
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Fixed rate instruments

Financial assets 128,723 63,791 53,439 13,468
Financial liabilities (2,061,734) (1,343,353) (395) (1,023)
(1,933,011) (1,279,562) 53,044 12,445
Floating rate instruments

Financial liabilities (922,766) (1,283,042) (175,000) (200,000)
Interest rate risk sensitivity analysis
(a) Fair value sensitivity analysis for fixed rate instruments
The Group and the Company only has fixed rate deposits placed with licensed banks with tenure of
less than 12 months for financial assets. The Group and the Company do not account for fixed rate
financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest
rates at the end of the reporting period would not affect profit or loss.
(b) Cash flow sensitivity analysis for variable rate instruments
A change of 1% in interest rates at the end of the reporting period would have increased/(decreased)
profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular
foreign currency rates, remained constant.
241

38.5.2 Interest rate risk (Cont’d)
Interest rate risk sensitivity analysis (Cont’d)
Group
Group Company
1% 1% 1% 1%
increase decrease increase decrease
RM’000 RM’000 RM’000 RM’000
30 June 2020
Term loans (6,539) 6,539 (1,750) 1,750
Bank overdrafts (387) 387 - -
Trust receipts (64) 64 - -
Revolving credits and Murabahah
facilities (2,148) 2,148 - -
Bankers’ acceptance (89) 89 - -
Cash flow sensitivity (net) (9,227) 9,227 (1,750) 1,750
31 December 2018
Term loans (10,690) 10,690 (1,750) 1,750
Bank overdrafts (321) 321 - -
Trust receipts (71) 71 - -
Revolving credits and Murabahah
facilities (1,381) 1,381 (250) 250
Bankers’ acceptance (368) 368 - -
Cash flow sensitivity (net) (12,831) 12,831 (2,000) 2,000

GOVERNANCE DRIVEN

38.6 Fair value information
The methods and assumptions used to estimate the fair value of the following classes of financial assets
and liabilities are as follows:
(i) Club membership and unquoted shares
It is not practical to determine the fair value of these unquoted shares and memberships due to the
lack of quoted market prices and the inability to estimate fair value without incurring excessive costs.
(ii) Unquoted unit trusts
Fair value of the investments in unit trust are determined based on the net asset value of the unit
trust at the end of the reporting period.
(iii) Cash and cash equivalents, trade and other receivables and payables
The carrying amounts approximate their fair values due to the relatively short-term maturities of
these financial assets and liabilities.
(iv) Long-term receivables and payables
The fair values of long-term receivables and payables are estimated using discounted cash flow
analysis based on the weighted average cost of capital of the Group. The Group classifies this at Level
3 in fair value hierarchy.
(v) Loans and borrowings
The carrying amounts of bank overdrafts, trust receipts, revolving credit and Murabahah facilities,
bankers’ acceptance and short-term loans are approximate fair values due to the relatively short-
term maturity of these financial liabilities.
The carrying amounts of long-term floating rate loans approximate their fair value as the loans will
be re-priced to market interest rate on or near to the end of the reporting period.
The fair value of finance lease liabilities and Sukuk are estimated using discounted cash flow analysis
based on current borrowing rates for similar types of borrowing arrangements.
243

38.6 Fair value information (Cont’d)
(v) Loans and borrowings (Cont’d)
Group
30.6.2020 31.12.2018
Carrying Fair Carrying Fair
amount value amount value
RM’000 RM’000 RM’000 RM’000
Lease liabilities 8,829 8,963 - -

Finance lease liabilities 26,416 29,920 34,980 38,346
Term loan 483,248 491,705 291,172 429,538
Sukuk 1,549,210 1,607,213 1,017,053 1,049,025
38.7 Fair value hierarchy
Policy on transfer between levels
The fair value of an asset to be transferred between levels is determined as at the date of the event or
change in circumstances that caused the transfer.
Level 1 fair value
Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical financial assets
or liabilities that the entity can access at the measurement date.
Level 2 fair value
Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are
observable for the financial assets or liabilities, either directly or indirectly.
Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future
principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period.
For loans and borrowings, the market rate of interest is determined by reference to similar borrowing
arrangements.
Transfers between Level 1 and Level 2 fair values
There has been no transfer between Level 1 and 2 fair values during the financial period (2018: no transfer
in either direction).
GOVERNANCE DRIVEN

38.7 Fair value hierarchy (Cont’d)
Level 3 fair value
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the
asset or liability that are not based on observable market data (unobservable inputs).
39. CAPITAL MANAGEMENT
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and
healthy capital ratio in order to support its business and maximise shareholders’ value.
The Group and the Company manage their capital structure and makes adjustments to it, in light of changes in
economic conditions. To maintain or adjust capital structure, the Group and the Company may adjust the dividend
payment to shareholders, return capital to shareholders or issue new shares. There were no changes in the
Group’s and the Company’s approach to capital management during the period.
The Group and the Company monitor capital using a gearing ratio, which is computed by using total loans and
borrowings net of cash and cash equivalents and other investments over shareholder’s equity attributable to
owners of the Company.
Net Gearing Ratio
The net gearing ratio at the end of the reporting period is as follows:
Group Company
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Total loans and borrowings 2,984,500 2,626,395 175,395 201,013

Less: Cash and cash equivalents (301,057) (497,838) (60,457) (4,776)
Less: Financial assets at fair value through
profit or loss (323,821) (164,338) - -
Net debts 2,359,622 1,964,219 114,938 196,237
Total equity 355,098 461,481 235,802 239,611
Net debt-to-equity ratio (times) 6.64 4.26 0.49 0.82

245

40. SHARE-BASED PAYMENTS
The Company has an Employee Share Scheme (“ESS”) intended to provide an opportunity for all eligible persons
within the Group determined by the ESS Committee to participate in the equity of the Company. The ESS comprises
of the following awards:
(i) options which entitle the eligible persons, upon exercise, to obtain the Company’s shares at specified future
date a pre-determined price (“ESS Options”); and
(ii) the right to have a number of the Company’s shares vested at the future date as the ESS Committee may
decide (“ESS Share Awards”) provided that relevant performance conditions/targets of AZRB Group which
has been pre-determined at the point of the offer of the ESS Share Awards are duly fulfilled.
During the year 2017, the Company made the first offer of 4,597,453 options under the ESS Options and 5,614,943
shares under that ESS Shares Award to eligible employees and Directors of the Company and/or its eligible
subsidiaries.
The movements in number of shares pursuant to the issuance of ESS during the financial period are as follows:
Number of ordinary shares

Exercise
price per Balance
share Balance as as at
Grant date Expiry date RM at 1.1.2019 Granted Exercised Forfeited 30.6.2020
Share Awards
31.03.2017 01.03.2020* N/A 4,494,918 - - (4,494,918) -
Share Options
31.03.2017 17.08.2024** 0.61 3,670,760 - - (485,285) 3,185,475
8,165,678 - - (4,980,203) 3,185,475
* The Share Awards are given for free to the Eligible Persons at the vesting date of 1 March 2020. Hence the
date of expiry is deemed to be as at that date.
** The ESS was implemented on 18 August 2014 (“Effective Date”) and shall be in force for a period of 5 years
and expires on 17 August 2019. The ESS has been extended for a further period of 5 years expiring on 17
August 2024.
GOVERNANCE DRIVEN

40. SHARE-BASED PAYMENTS (CONT’D)
The fair value of ESS is determined based on the following assumptions:
Share Share
Awards Options
Binomial
Valuation model Black-Scholes Option Pricing
Offer date 01.03.2017 01.03.2017
Grant date 31.03.2017 31.03.2017
Fair value of share options at grant dates
- At vesting date on 28.02.2018 (RM) - 0.4472
- At vesting date on 01.03.2020 (RM) 0.943 -
Grant date share price (RM) 1.00 1.00
Exercise price (RM) Nil 0.61
Expected volatility (%) 34.28 35.28
Expected life (years) 3 7
Risk free rate (%) 3.65 4.07
Expected dividend yield (%) 2.00 2.00
The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which
may also not necessarily be the actual outcome. No other features were incorporated into the measurement of
fair value.
41. OPERATING LEASES
Non-cancellable operating lease rentals are payable as follows:
Group
30.6.2020 31.12.2018
RM’000 RM’000
Less than one year 313 259

Between one and five years 191 446
504 705
This is in respect of lease rental payable for leasing of office equipment with lease tenure of 5 years. These are
considered as low value assets leases in accordance with MFRS 16.
247

42. CAPITAL COMMITMENTS

Group
30.6.2020 31.12.2018
RM’000 RM’000
Capital expenditure commitments

Property, plant and equipment
Contracted but not provided for 165 19,289
Authorised but not contracted for 27,407 44,811
43. CONTINGENT LIABILITIES
(i) Corporate Guarantees
The Directors are of the opinion that provisions are not required as at period end in respect of these matters,
as it is not probable that a future sacrifice of economic benefits will be required or the amount is not capable
of reliable measurement.
Company
30.6.2020 31.12.2018
RM’000 RM’000
Unsecured
Corporate guarantees given to financial institutions and suppliers in
respect of credit facilities granted to subsidiaries 231,619 275,877
Secured
Corporate guarantee given to financial institutions in respect of credit
facilities granted to subsidiaries 3,089,427 2,831,313
3,321,046 3,107,190
The financial guarantees have not been recognised in the financial statements since the fair value on
initial recognition was not material as the financial guarantees provided by the Company did not contribute
towards credit enhancement of the subsidiary companies’ borrowings in view of the securities pledged by
the subsidiary companies.
(ii) Tax Review
Ahmad Zaki Saudi Arabia Co. Ltd., a subsidiary of the Company is currently undergoing a tax review with
the General Authority of Zakat & Tax of Saudi Arabia (“DZIT”) for additional back taxes. Upon consulting its
appointed solicitors, the Directors are of the view that there are strong grounds to disagree with the DZIT
and have submitted the necessary supporting documents, and are confident of a favourable outcome.
GOVERNANCE DRIVEN

44. RELATED PARTIES
Identity of related parties
For the purposes of these financial statements, parties are considered to be related to the Group if the Group
or the Company has the ability, directly or indirectly, to control the party or exercise significant influence over
the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the
party are subject to common control or common significant influence. Related parties may be individuals or other
entities.
Related parties also include key management personnel defined as those persons having authority and
responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. The
key management personnel include all the Directors of the Group.
The Group has related party relationship with its holding companies, significant investors, subsidiaries, associates,
joint ventures, affiliates, Directors and key management personnel.
Significant related party transactions
The significant related party transactions of the Group and of the Company, other than key management personnel
compensation (see Note 9), are as follows:
Group Company
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Trade
Dividend income received/receivable from
subsidiaries - - (24,387) (36,000)
Management fees received/receivable from
subsidiaries - - (30,938) (19,992)
Corporate guarantee fees receivable from
subsidiaries - - (2,299) (1,420)
Purchases from subsidiaries of Chuan Huat
Resources Berhad, of which a director has
substantial financial interests:
- Chuan Huat Industrial Marketing Sdn Bhd 39,621 43,010 - -
- Chuan Huat Hardware Sdn Bhd 1,530 1,255 - -
249

44. RELATED PARTIES (CONT’D)
Significant related party transactions (Cont’d)
Group Company
30.6.2020 31.12.2018 30.6.2020 31.12.2018
RM’000 RM’000 RM’000 RM’000
Purchases from following companies in which a

director has substantial financial interests, and
is also a director:
- QMC Sdn Bhd 89 1,127 - -
- Kemaman Quary Sdn Bhd - 1 - -
- MIM Waste Services Sdn Bhd - 94 - -
Sales to the following companies of which a
director has substantial financial interests, and
is also a director
- Kemaman Quary Sdn Bhd (24) (129) - -
- MIM Waste Services Sdn Bhd (630) (395) - -
Non-trade
Rental of office payable to subsidiaries - - - 3,648
Administrative services payable to ultimate
holding company 191 127 - -
Insurance premium paid or payable to ultimate
holding company 1,058 503 - -
Purchase of property, plant and equipment from
ultimate holding company - 1,750 - 1,750
Rental of land paid to a director of the Company 579 478 - -
Rental payable to ultimate holding company - 120 - -
Charges paid to MIM Protection Sdn Bhd, of
which certain directors has substantial financial
interests and are also the directors
- Security charges 10,208 4,859 - -
The outstanding balances arising from the above transactions have been disclosed in Notes 24 and 35.
GOVERNANCE DRIVEN

45. RECLASSIFICATIONS OF COMPARATIVE FIGURES
The following comparatives have been reclassified to conform with current period’s presentation in the financial
statements:
31.12.2018 31.12.2018
RM’000 RM’000 RM’000
As previously Reclassification As
stated reclassified
Statement of profit or loss and other comprehensive income

for the year ended 31 December 2018
Group
Other operating expenses (25,249) (4,130) (29,379)
Finance costs (66,050) 4,130 (61,920)
Company
Other operating expenses (264) (1,155) (1,419)
Finance costs (13,913) 1,155 (12,758)
Statements of financial position as at 31 December 2018
Group
Construction contract assets 367,713 402 368,115
Accrued billings from property development 402 (402) -
46. EFFECT ON ADOPTION OF MFRS 16 : LEASES
MFRS 16 introduces new or amended requirements with respect to lease accounting. It introduces significant
changes to lessee accounting by removing the distinction between operating and finance lease and requiring
the recognition of a right-of-use asset and a lease liability at commencement for all leases, except for short-
term leases and leases of low value assets when such recognition exemptions are adopted. In contrast to lessee
accounting, the requirements for lessor accounting have remain largely unchanged. The impact of the adoption
of MFRS 16 on the Group’s and the Company’s financial statements is described below.
The date of initial application of MFRS 16 for the Group and the Company is 1 January 2019.
251

46. EFFECT ON ADOPTION OF MFRS 16 : LEASES (CONT’D)
The Group and the Company have applied MFRS 16 using the cumulative catch-up approach which:
• requires the Group and the Company to recognise the cumulative effect of initially applying MFRS 16 as an
adjustment to the opening balance of retained earnings at the date of initial application; and
• does not permit restatement of comparatives, which continue to be presented under MFRS 117.
(a) Impact of the new definition of a lease
The Group and the Company have made use of the practical expedient available on transition to MFRS 16
not to reassess whether a contract is or contains a lease. Accordingly, the definition of a lease in accordance
with MFRS 117 will continue to be applied to those leases entered or changed before 1 January 2019.
The change in definition of a lease mainly relates to the concept of control. MFRS 16 determines whether a
contract contains a lease on the basis of whether the lessee has the right to control the use of an identified
asset for a period of time in exchange for consideration. This is in contrast to the focus on ‘risk and rewards’
in MFRS 117.
The Group and the Company apply the definition of a lease and related guidance set out in MFRS 16 to all
lease contracts entered into or modified on or after 1 January 2019, whether they are a lessor or a lessee in
the lease contract. The new definition in MFRS 16 does not significantly change the scope of contracts that
meet the definition of a lease for the Group and the Company.
(b) Impact on lessee accounting
Operating leases
MFRS 16 changes how the Group and the Company account for leases previously classified as operating
leases under MFRS 117, which were off-balance-sheet.
Applying MFRS 16, for all leases, the Group and the Company:
• recognise right-of-use assets and lease liabilities in the statement of financial position, initially
measured at the present value of the remaining lease payments, with the right-of-use asset adjusted
by the amount of any prepaid or accrued lease payments in accordance with MFRS 16;
• recognise depreciation of right-of-use asset and interest on lease liabilities in the statements of profit
or loss and other comprehensive income; and
• separate the total amount of cash paid into a principal portion and interest on lease liabilities, presented
within financing activities in the statements of cash flows.
Lease incentives are recognised as part of the measurement of the right-of-use assets and lease liabilities
whereas under MFRS 117 they resulted in the recognition of a lease incentive liability, amortised as a
reduction of rental expense on a straight-line basis.
GOVERNANCE DRIVEN

(b) Impact on lessee accounting (Cont’d)
Operating leases (Cont’d)
Under MFRS 16, right-of-use assets are tested for impairment in accordance with MFRS 136.
For short term lease (lease term of 12 months or less) and leases of low-value assets (those assets valued
at less than RM25,000), the Group and the Company have opted to recognise a lease expense on a straight-
line basis as permitted by MFRS 16. The lease expense is presented in the statements of profit or loss and
other comprehensive income.
The Group and the Company have used the following practical expedients when applying the cumulative
catch-up approach to leases previously classified as operating leases applying MFRS 117:
• the Group and the Company have applied a single discount rate to a portfolio of leases with reasonably
similar characteristics;
• the Group and the Company have elected not to recognise right-of-use assets and lease liabilities to
leases for which the lease term ends within 12 months of the date of initial application;
• the Group and the Company have excluded initial direct costs from the measurement of the right-of-use
assets at the date of initial application; and
• the Group and the Company have used hindsight when determining the lease term when the contract
contains options to extend or terminate the lease.
Finance leases
For leases that were classified as finance leases applying MFRS 117, the carrying amount of the leased
assets and obligations under finance leases measured applying MFRS 117 immediately before the date
of initial application is reclassified to right-of-use assets and lease liabilities respectively without any
adjustments, except in cases where the Group and the Company have elected to apply the low-value lease
recognition exemption.
The right-of-use assets and the lease liabilities are accounted for applying MFRS 16 from 1 January 2019.
(c) Impact on lessor accounting
MFRS 16 does not change substantially how a lessor accounts for leases. Under MFRS 16, a lessor continues
to classify leases as either finance leases or operating leases and account for those two types of leases
differently.
However, MFRS 16 has changed and expanded the disclosures required, in particular regarding how a lessor
manages the risks arising from its residual interest in leased assets.
253

(d) Financial impact of initial application of MFRS 16
The lessee’s incremental borrowing rates applied to the lease liabilities recognised in the statements of
financial position are ranging from 3.00% to 5.05% per annum.
The following shows the operating lease commitments disclosed applying MFRS 117 as at 31 December
2018, discounted using the incremental borrowing rate at the date of initial application and the lease
liabilities recognised in the statements of financial position at the date of initial application.
The The
Group Company
RM’000 RM’000
Operating lease commitments as at 31 December 2018 705 -

Effects from discounting at the incremental borrowing rate between
3.00% to 5.05% - -
Add:
Lease liabilities additionally recognised based on the initial application
of MFRS 16 16,163 72,795
Less:
Leases of low value assets recognised on a straight-line basis as expense (504) -
Lease liabilities recognised as at 1 January 2019 16,364 72,795
Right-of-use assets were measured at the amount equal to the lease liabilities, adjusted by the amount of
any prepaid or accrued lease payments relating to all the leases recognised in the statements of financial
position immediately before the date of initial application. Consequently, right-of-use assets of RM16,364,000
and RM72,795,000 were recognised on 1 January 2019 for the Group and the Company respectively. The
initial application of MFRS 16 had no impact on the Group’s and the Company’s retained earnings as at 1
January 2019.
GOVERNANCE DRIVEN

47. SIGNIFICANT EVENTS DURING THE PERIOD
(a) On 3 January 2019, Inter-Century Sdn Bhd (“ICSB”), a wholly-owned subsidiary of the Company entered into
a new agreement for ICSB to continue providing marine high speed diesel bunkering services to all vessels
of Petronas Dagangan Berhad’s customers at the Kemaman Supply Base in Terengganu Darul Iman (“the
Agreement”). The Agreement will be effective for a period of 5 years which commenced from 1 January 2019
until 31 December 2023.
(b) On 20 February 2019, Ahmad Zaki Sdn Bhd, a wholly-owned subsidiary of the Company received and accepted
a Letter of Award from Rantau Properties Sdn Bhd (“the Award”) for a project known as “The Proposed
Refurbishment and Upgrading Works to the existing Petronas Office Complex (Block A) and Kompleks
Operasi Petronas 1 (Block B), Proposed Construction and Completion of new Annex Building (Block C),
Infrastructure and Landscaping Works on part of Lot 52271 and 52272, Mukim Kertih, Daerah Kemaman,
Terengganu Darul Iman” (“the Contract Works”). The Award for the Contract Works amounted to a total value
of RM150,500,000.
(c) The Company, at the recommendation of the Employee Share Scheme (“ESS”) Committee extended its ESS
which expired on 17 August 2019 for a further period of 5 years from 18 August 2019 to 17 August 2024 in
accordance with the ESS By-Laws.
(d) On 26 December 2019, AZRB Capital Sdn Bhd, a wholly-owned subsidiary of the Company had issued
RM535,000,000 Sukuk Murabahah under the Sukuk Murabahah Programme in nominal value based on
the Shariah principle of Murabahah. The Sukuk Murabahah has a tenure ranging from 3 to 12 years, at a
profit rate of between 4.70% to 5.35% per annum, payable semi-annually and guaranteed by the Company.
Proceeds raised from the issuance was advanced to the Company for its Shariah-compliant general working
capital requirements and corporate purposes.
(e) Following on from the development of the COVID-19 outbreak which was declared by the World Health
Organisation as a global pandemic in March 2020, the Malaysian Government imposed the mandatory
Movement Control Order (“MCO”) from 18 March 2020 and subsequently implemented the Conditional
Movement Control Order (“CMCO”) from 4 May 2020 to 9 June 2020 to curb the spread of the virus in
Malaysia. This was followed by the Recovery MCO (“RMCO”) which lasted until 31 August 2020, and has
now been further extended until 31 December 2020. These unprecedented COVID-19 measures undertaken
by the authorities resulted in stringent travel restrictions, nationwide lockdown, and drastic reduction in
business activities which has brought significant economic uncertainties in Malaysia and within the industry
and markets that the Group operates in.
The imposition of the MCO had resulted in disruptions especially to the Group’s Engineering and Construction,
and Property Divisions. However, this was considered as a temporary set-back, as the Management has
been diligent in ensuring that operationally, levels were brought up to normal after the end of the CMCO on
9 June 2020.
255

47. SIGNIFICANT EVENTS DURING THE PERIOD (CONT’D)
(e) The other Divisions within the Group; namely the Concession, Oil and Gas, and Plantation were not materially
affected by the COVID-19 outbreak, mainly due to the nature of their services and sectors that they are
operating in.
Despite having the ability to achieve pre-COVID-19 operational levels, the Group as a whole continues to
rigorously review its resources as well as undertaking prudent financial management to ensure that that
Group will continue to remain sustainable going forward operating in the new normal environment.
The Directors of the Group have assessed the overall impact of this situation towards the Group’s operations
and financial performance, including the recoverability of the net carrying amount of its assets and the
subsequent measurement of its assets and liabilities. The Directors are of the view that there is no material
adverse effect on the Group’s financial statements for the financial period from 1 January 2019 to 30
June 2020. Nevertheless, the Directors will closely monitor the current developments of COVID-19 and
continuously assess the impact on the Group’s operations and would take appropriate and timely measures
to minimise the said impact.
GOVERNANCE DRIVEN
Statements by Directors
The Directors of AHMAD ZAKI RESOURCES BERHAD state that, in their opinion, the accompanying financial statements
are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards
and the requirements of the Companies Act, 2016 in Malaysia so as to give a true and fair view of the financial position
of the Group and of the Company as at 30 June 2020 and of their financial performance and the cash flows of the Group
and of the Company for the financial period ended on that date.
Signed on behalf of the Board

in accordance with a resolution of the Directors,
RAJA TAN SRI DATO’ SERI AMAN BIN RAJA HAJI AHMAD
DATO’ SRI WAN ZAKARIAH BIN HAJI WAN MUDA
Kuala Lumpur,
28 October 2020
257
Declaration by the Officer Primarily Responsible

for the Financial Management of the Company
I, ISKANDAR SHAM BIN ABD RASAP, the officer primarily responsible for the financial management of AHMAD ZAKI
RESOURCES BERHAD, do solemnly and sincerely declare that the accompanying financial statements are, in my
opinion, correct and I make this solemn declaration conscientiously believing the declaration to be true, and by virtue
of the Statutory Declarations Act, 1960.
ISKANDAR SHAM BIN ABD RASAP

(MIA Membership No. 14948)
Subscribed and solemnly declared by the abovenamed

ISKANDAR SHAM BIN ABD RASAP at KUALA LUMPUR
this 28th day of October 2020.
Before me,
COMMISSIONER FOR OATHS

GOVERNANCE DRIVEN
Directors’ Interest in Shares and Warrants

As at 30 September 2020
Issued and Fully Paid-up Share Capital : 598,097,678

Class of Shares : Ordinary Share
Voting Rights : One vote per share
#
inclusive of 1,662,862 ordinary shares held as treasury shares as at 30 September 2020
Ordinary Shares
Direct % Deemed %
Interest Interest
The Company
Ahmad Zaki Resources Berhad
Raja Tan Sri Dato’ Seri Aman bin Raja Haji Ahmad 200,000 0.04 0 0
Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda 4,757,371 0.80 321,982,659 * 53.98 *
Dato’ Sri Wan Zakariah bin Haji Wan Muda 5,266,220 0.88 8,000 * 0 #*
Dato’ W Zulkifli bin Haji W Muda 10,003,789 1.67 263,125 * 0.04 *
Dato’ Roslan bin Tan Sri Jaffar 1,061,262 0.18 492,187 * 0.08 *
Dato’ Haji Mustaffa bin Mohamad 2,612,510 0.44 1,500,512 * 0.25 *
(resigned on 16 October 2020)
Tan Sri Dato’ Lau Yin Pin @ Lau Yen Beng 900,000 0.15 0 0
Datuk (Prof.) A Rahman @ Omar bin Abdullah 3,683,049 0.62 0 0
Dato’ Sr. Abdull Manaf bin Hj Hashim 165,000 0.03 0 0
Ultimate Holding Company

Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda 3,000,001 30.00 2,500,001 * 25.00 *
Dato’ Sri Wan Zakariah bin Haji Wan Muda 1,250,000 12.50 0 0
Dato’ W Zulkifli bin Haji W Muda 1,250,000 12.50 0 0
259
Directors’ Interest in Shares and Warrants

Warrants 2014/2024
Direct % Deemed %
Interest Interest
The Company
Ahmad Zaki Resources Berhad
Raja Tan Sri Dato’ Seri Aman bin Raja Haji Ahmad 0 0 0 0
Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda 985,676 0.85 63,622,038 * 54.75 *
Dato’ Sri Wan Zakariah bin Haji Wan Muda 429,368 0.37 0 0
Dato’ W Zulkifli bin Haji W Muda 225,153 0.19 0 0
Dato’ Roslan bin Tan Sri Jaffar 139,218 0.12 105,468 * 0.09 *
Dato’ Haji Mustaffa bin Mohamad 0 0 56 * 0 #*
(resigned on 16 October 2020)
Tan Sri Dato’ Lau Yin Pin @ Lau Yen Beng 0 0 0 0
Datuk (Prof.) A Rahman @ Omar bin Abdullah 0 0 0 0
Dato’ Sr. Abdull Manaf bin Hj Hashim 0 0 0 0
* securities held through person(s) connected with the Director

#
negligible

By virtue of Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda having an interest of more than 20% of the shares in
Ahmad Zaki Resources Berhad, he is deemed interested in the shares of its subsidiaries to the extent the Company
has an interest.

Other than as disclosed above, none of the Directors held any shares or have any interest in the Company and its
related companies as at 30 September 2020.
GOVERNANCE DRIVEN
Analysis of Shareholdings
DISTRIBUTION OF SHAREHOLDINGS
Category No. of Shareholders No. of Shareholdings % of Shareholdings

Malaysian Foreign Malaysian Foreign Malaysian Foreign
Less than 100 shares 596 9 22,671 377 0.00 0.00

100 to 1,000 shares 503 3 211,402 1,924 0.04 0.00
1,001 to 10,000 shares 2,205 17 12,049,402 104,482 2.02 0.02
10,001 to 100,000 shares 2,366 40 76,860,440 1,653,675 12.85 0.28
100,001 to less than 5% of
issued shares 388 11 182,746,437 5,002,032 30.55 0.83
5% and above of issued shares 3 0 319,444,836 0 53.41 0.00
Total 6,061 80 591,335,188 6,762,490 98.87 1.13
LIST OF SUBSTANTIAL SHAREHOLDERS (5% AND ABOVE EXCLUDING BARE TRUSTEES)
Ordinary Shares
Direct Deemed
Interest % Interest %
1. Zaki Holdings (M) Sdn Bhd 247,982,336 41.46 0 0
2. AmSec Nominees (Tempatan) Sdn Bhd 71,462,500 11.95 0 0

- Pledged securities account - AmBank (M) Berhad
for Zaki Holdings (M) Sdn Bhd
3. Tan Sri Dato’ Sri Haji Wan Zaki bin Haji Wan Muda 4,757,371 0.80 321,982,659 * 53.98 *
* Shares held through persons connected with the Director

261
LIST OF 30 LARGEST SHAREHOLDERS AS PER RECORD OF DEPOSITORS
No. Shareholder Shares held %
1 ZAKI HOLDINGS (M) SDN BHD 205,030,880 34.28
2 AMSEC NOMINEES (TEMPATAN) SDN BHD 71,462,500 11.95

- PLEDGED SECURITIES ACCOUNT- AMBANK (M) BERHAD FOR ZAKI HOLDINGS
(M) SDN. BHD.
4 DATO’ SRI NG TECK LONG 7,808,600 1.31
5 NEOH CHOO EE & COMPANY, SDN. BERHAD 6,687,900 1.12
6 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 6,018,750 1.01

- PLEDGED SECURITIES ACCOUNT FOR DATO’ W ZULKIFLI BIN HAJI W MUDA
(006111262)
7 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD 4,909,970 0.82

- PLEDGED SECURITIES ACCOUNT FOR DATO’ SRI WAN ZAKARIAH BIN HAJI WAN
MUDA (7005790)
8 TAN SRI DATO’ SRI HAJI WAN ZAKI BIN HAJI WAN MUDA 4,757,371 0.80
9 LIM BOON LIAT 4,500,062 0.75
10 ROSNITA BINTI YUNUS 4,220,150 0.71
11 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 4,029,975 0.67

- KUMPULAN WANG PERSARAAN (DIPERBADANKAN) (AHAM EQUITY FUND)
12 DATUK PROF. A RAHMAN @ OMAR BIN ABDULLAH 3,683,049 0.62
13 MULTIGLOW RESOURCES SDN. BHD. 3,393,000 0.57

- PLEDGED SECURITIES ACCOUNT FOR CHONG YIEW ON (6000006)
15 MOHD NASRI BIN ABDUL RAHIM 3,195,000 0.53
16 MAYBANK NOMINEES (TEMPATAN) SDN BHD 2,868,750 0.48

- PLEDGED SECURITIES ACCOUNT FOR DATO’ W ZULKIFLI BIN HAJI W MUDA
GOVERNANCE DRIVEN
LIST OF 30 LARGEST SHAREHOLDERS AS PER RECORD OF DEPOSITORS (CONT’D)
No. Shareholder Shares held %
17 PUBLIC NOMINEES (TEMPATAN) SDN BHD 2,680,500 0.45

- PLEDGED SECURITIES ACCOUNT FOR LIM KHEK KENG (E-TAI)
18 AL WAKALAH NOMINEES (TEMPATAN) SDN BHD 2,362,500 0.40

- PLEDGED SECURITIES ACCOUNT FOR DATO’ HAJI MUSTAFFA BIN MOHAMAD

- PLEDGED SECURITIES ACCOUNT FOR SU TIING UH
20 FUNG LEE YIN 1,868,350 0.31
21 MAYBANK NOMINEES (ASING) SDN BHD 1,670,000 0.28

- PLEDGED SECURITIES ACCOUNT FOR SAN TUAN SAM
22 AHMAD ZAKI RESOURCES BERHAD 1,662,862 0.28

- SHARE BUY BACK ACCOUNT
23 TAN LEONG YEOK 1,660,000 0.28

- WAIKO INTERNATIONAL SDN BHD
25 RHB CAPITAL NOMINEES (ASING) SDN BHD 1,562,500 0.26

- PLEDGED SECURITIES ACCOUNT FOR IOANNIS KOROMILAS
26 LIM GAIK BWAY @ LIM CHIEW AH 1,534,612 0.26
27 NAIMAH BINTI HASHIM 1,500,512 0.25
28 CHAN WENG WAI 1,500,000 0.25
29 JF APEX NOMINEES (TEMPATAN) SDN BHD 1,500,000 0.25

- PLEDGED SECURITIES ACCOUNT FOR LEE CHEE KEONG (STA 5)
30 AFFIN HWANG NOMINEES (TEMPATAN) SDN. BHD. 1,409,300 0.24

- PLEDGED SECURITIES ACCOUNT FOR TEH POO SENG (M02)
263
Analysis of Warrantholdings
DISTRIBUTION OF WARRANTHOLDINGS
Category No. of Warrantholders No. of Warrantholdings % of Warrantholdings

Malaysian Foreign Malaysian Foreign Malaysian Foreign
Less than 100 warrants 249 4 11,722 152 0.01 0.00

100 to 1,000 warrants 200 1 117,431 956 0.10 0.00
1,001 to 10,000 warrants 637 8 2,600,525 44,870 2.24 0.04
10,001 to 100,000 warrants 366 6 12,049,313 203,741 10.37 0.17
100,001 to less than 5% of
issued warrants 88 5 26,423,045 3,625,881 22.74 3.12
5% and above of issued warrants 2 0 71,124,316 0 61.21 0.00
Total 1,542 24 112,326,352 3,875,600 96.67 3.33
LIST OF 30 LARGEST WARRANTHOLDERS AS PER RECORD OF DEPOSITORS
No. Warrantholder Warrants %

held
2 DATO’ SRI NG TECK LONG 7,957,900 6.85
3 KENANGA NOMINEES (TEMPATAN) SDN BHD 2,812,500 2.42

- PLEDGED SECURITIES ACCOUNT FOR VINCENT WONG SOON CHOY
4 CHAI HUEY YNG 2,410,200 2.07
5 MD.SHAH BIN ABU HASAN 1,072,500 0.92
6 ER SOON PUAY 1,000,000 0.86

- PLEDGED SECURITIES ACCOUNT FOR SI THO YOKE MENG (6000156)
8 LEONG PAI NYOK 991,312 0.85
9 TAN SRI DATO’ SRI HAJI WAN ZAKI BIN HAJI WAN MUDA 985,676 0.85
10 KOH SOK HONG 802,500 0.69
11 LIM BOON LIAT 800,675 0.69
12 ALLIANCEGROUP NOMINEES (ASING) SDN BHD 649,056 0.56

- TAN KONG HENG (8102918)
GOVERNANCE DRIVEN
Analysis of Warrantholdings
LIST OF 30 LARGEST WARRANTHOLDERS AS PER RECORD OF DEPOSITORS (CONT’D)
No. Warrantholder Warrants %

held
13 MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHD 607,450 0.52

- PLEDGED ACCOUNT FOR CHEN NGAU (REM 636)
14 MOHAMAD HAZIQ BIN MOHD HAFIDZUDDIN RAJA 576,000 0.50
15 DATO’ SRI NG TECK LONG 562,556 0.48
16 LAM AH CHOI 500,000 0.43
17 LEE BOON HENG 484,087 0.42
18 WONG LAI YOKE 450,000 0.39
19 MAYBANK NOMINEES (TEMPATAN) SDN BHD 440,550 0.38

- PLEDGED SECURITIES ACCOUNT SU TIING UH
20 MAYBANK NOMINEES (TEMPATAN) SDN BHD 440,000 0.38

- YAP KIAM MING
21 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD 429,368 0.37

- PLEDGED SECURITIES ACCOUNT FOR DATO’ SRI WAN ZAKARIAH BIN HAJI WAN
MUDA
22 MD. SALLEH BIN MASHROM 330,000 0.28
23 KAM SIONG CHEE 310,991 0.27
24 LEE CHENG YEN 310,000 0.27
25 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD 309,375 0.27

- PLEDGED SECURITIES ACCOUNT FOR TEH TEONG SENG (7003751)
26 LIM KIAN KOON 298,737 0.26
27 PUBLIC NOMINEES (TEMPATAN) SDN BHD 288,393 0.25

- PLEDGED SECURITIES ACCOUNT FOR YOONG CHEE HON (E-SS2)
28 ROWE INCORPORATED SDN BHD 281,250 0.24
29 KHAW KENG HONG 250,650 0.22
30 CHOO POH TIN 250,000 0.22

265
List of Properties
NBV /
Prepaid
Description Tenure Total Lease
Date of of Property (Age of Land Area / Payment
No. Title & Location of Property Acquisition (existing use) Building) (built-up area) (RM’000)
1 EMR 873, Lot 826 30.10.1993 Land and Hotel Freehold 202,815 sq. ft./ 15,993
Mukim Sungai Karang building (23 years) 64,670 sq. ft.
Kuantan, Pahang Darul Makmur
2 GM372 Lot 981 and GRN37357 Lot 985 20.01.1994 Menara AZRB Freehold 55,017 sq. ft. 51,337
Mukim Setapak, Daerah Kuala Lumpur & (5 years)
Wilayah Persekutuan Kuala Lumpur 16.02.1994
3 Lot PT2100, HSD 722 15.07.2003 Vacant land Leasehold 20 ha. 49

Mukim Kuala Telemong, for quarry expiring in year
Daerah Hulu Terengganu operation 2025
Terengganu Darul Iman
4 HGU No. 5, Desa Amboyo Selatan 31.05.2005 Land for Leasehold 6,763.89 ha. 18,353
Kecamatan Ngabang cultivation expiring in year
Kabuputen Pontianak 2033
Kalimantan Barat
Republik Indonesia
5 GM 1012 Lot 22050 03.08.2007 Menara AZRB Freehold 12,066.34 sq. ft. 1,448
Mukim Setapak, Daerah Kuala Lumpur car park
Wilayah Persekutuan Kuala Lumpur
6 GM 1754 Lot 167 08.10.2010 Vacant land Freehold 4.578 ha. 960
Mukim Sabai, Daerah Bentong
Pahang Darul Makmur
7 HS (D) 29915, Lot PT 91677 18.07.2012 Land held for Freehold 12.141 ha. 8,959
Mukim Kuala Kuantan, Daerah Kuantan development
Pahang Darul Makmur
8 GRN 11795, Lot 41184 20.01.2015 Land held for Freehold 2.529 ha. 4,640
Mukim Kuala Kuantan development
Daerah Kuantan, Pahang Darul Makmur
9 GM 2413-GM2451 08.01.2015 Land held for Freehold 18,152 sq. m. 3,129

Lot 60011-Lot 60021, development
Lot 60023-Lot 60050
Mukim Kemasik,
Tempat Kampung Semayor
Daerah Kemaman,
Terengganu Darul Iman
GOVERNANCE DRIVEN
List of Properties
NBV /
Prepaid
Description Tenure Total Lease
Date of of Property (Age of Land Area / Payment
No. Title & Location of Property Acquisition (existing use) Building) (built-up area) (RM’000)
10 Lot 8316, PT18854 - PT19458 10.09.2015 Land held for Leasehold 66.96 acres 7,500
Mukim Bukit Payung, Daerah Marang development expiring in year
Terengganu Darul Iman 2115
11 Geran 25668, Lot 4806 28.07.2016 Land held for Freehold land 642.4 sq. m. 2,078
Mukim Setapak, Daerah Kuala Lumpur development
16 GM 1011, Lot 22049 28.07.2016 Land held for Freehold land 278.0 sq. m. 928
267
Notice of 23rd Annual General Meeting
NOTICE IS HEREBY GIVEN THAT the 23rd Annual General Meeting of the Company will be held at the Banquet Hall, 1st
Level, Main Lobby, TPC Kuala Lumpur, 10 Jalan 1/170D, Off Jalan Bukit Kiara, 60000 Kuala Lumpur on Thursday, 19
November 2020 at 10.00 a.m. for the following purposes:
AGENDA
Ordinary Business
1. To receive the Audited Financial Statements of the Company for the financial period ended 30 Please refer to
June 2020 together with the Reports of the Directors and Auditors thereon. Note A
2. To approve the payment of Directors’ fees and benefits for the financial period ended 30 June Resolution 1
2020.
3. To approve the payment of Directors’ fees and benefits of up to RM1,050,000 for the period Resolution 2
from the conclusion of the 23rd Annual General Meeting to the next Annual General Meeting
of the Company.
4. To re-elect the following Director who retires pursuant to Clause 95 of the Company’s
Constitution:
(i) Tan Sri Dato’ Lau Yin Pin @ Lau Yen Beng Resolution 3
Datuk (Prof.) A Rahman @ Omar bin Abdullah and Dato’ Sr. Abdull Manaf bin Hj Hashim who
retire in accordance with Clause 95 of the Company’s Constitution, have expressed their
intention not to seek re-election. Accordingly, they will retain office until the close of the 23rd
Annual General Meeting.
5. To re-elect Datuk Wira Azhar bin Abdul Hamid who retires in accordance with Clause 102 of Resolution 4
the Company’s Constitution.
6. To re-appoint Deloitte PLT as auditors of the Company for the ensuing year and to authorise Resolution 5
the Directors to fix their remuneration.
Special Business
To consider and if thought fit, to pass with or without modifications, the following ordinary
resolutions:
GOVERNANCE DRIVEN
7. AUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO SECTIONS 75 AND 76 OF THE

COMPANIES ACT, 2016
“THAT pursuant to Sections 75 and 76 of the Companies Act, 2016 and subject to the approvals Resolution 6
of the relevant authorities, the Directors be and are hereby empowered to issue new shares
in the Company from time to time upon such terms and conditions and for such purposes as
the Directors may deem fit provided that the aggregate number of shares issued pursuant to
this resolution does not exceed 10% of the issued share capital of the Company for the time
being AND THAT such authority shall continue in force until the conclusion of the next Annual
General Meeting of the Company AND THAT the Directors be and are hereby also authorised
to obtain the approval from Bursa Malaysia Securities Berhad for the listing and quotation of
the additional shares so allotted.”
8. PROPOSED RENEWAL OF EXISTING SHAREHOLDERS’ MANDATE FOR RECURRENT

RELATED PARTY TRANSACTION OF A REVENUE OR TRADING NATURE
“THAT, subject to the Companies Act, 2016 (“Act”), the Company’s Constitution and the Main Resolution 7
Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad,
approval be and is hereby given to the Company, its subsidiaries or any of them to enter into
any of the transactions falling within the types of the Recurrent Related Party Transactions,
particularly of which are set out in the Circular to Shareholders dated 28 October 2020
with the Related Parties as described in the said Circular, provided that such transactions
are of revenue or trading nature, which are necessary for the day-to-day operations of the
Company and/or its subsidiaries, in the ordinary course of business and are on terms not
more favourable to the related parties than those generally available to the public and not to
the detriment of the minority shareholders and that such transactions are made on the arm’s
length basis and on normal commercial terms.
THAT such approval shall continue to be in force until:
(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company (being
the 24th AGM of the Company), at which time the said authority will lapse, unless by a
resolution passed at a general meeting whereby the authority is renewed;
(ii) the expiration of the period within which the next AGM of the Company (being the 24th
AGM of the Company) is required to be held pursuant to Section 340(2) of the Act (but
shall not extend to such extension as may be allowed pursuant to Section 340(4) of the
Act); or
(iii) revoked or varied by resolution passed by the shareholders in a general meeting,
whichever is the earliest,
AND THAT the Directors of the Company be authorised to complete and do all such acts
and things as they may consider expedient or necessary to give effect to the transactions
contemplated and/or authorised by this Ordinary Resolution.”
269
9. PROPOSED SHARE BUY-BACK OF UP TO 10% OF THE TOTAL NUMBER OF ISSUED SHARES

OF THE COMPANY AT ANY GIVEN POINT IN TIME (“PROPOSED SHARE BUY-BACK”)
“THAT, subject to the Companies Act, 2016 (“Act”), rules, regulations and orders made Resolution 8
pursuant to the Act, the Company’s Constitution, the Main Market Listing Requirements
(“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) and any
other relevant authorities, the Company be and is hereby authorised to purchase such number
of ordinary shares in the Company as may be determined by the Directors of the Company
from time to time through Bursa Malaysia and/or hold from upon such terms and conditions
as the Directors may deem fit and expedient in the interest of the Company, provided that:
(i) the aggregate number of ordinary shares in the Company purchased (“Purchased
Share(s)”) and/or held as treasury shares pursuant to this ordinary resolution shall not
exceed 10% of the total number of issued shares of the Company at any point in time;
and
(ii) the maximum funds to be allocated by the Company for the Proposed Share Buy-Back
shall not exceed the total retained earnings of the Company at the time of the purchase.
THAT upon purchase by the Company, the Directors of the Company shall have the absolute
discretion to decide whether such Purchased Shares of the Company are to be cancelled and/
or retained as treasury shares, or dealt with in such manner as provided under the Act, rules,
regulations and orders made pursuant to the Act and the Listing Requirements of Bursa
Malaysia;
THAT the authority conferred by this resolution will commence immediately upon passing of
this ordinary resolution and will continue to be in force until:
(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company at which
time the authority shall lapse unless by an ordinary resolution passed at the AGM, the
authority is renewed, either unconditionally or subject to conditions;
(ii) the expiration of the period within which the AGM of the Company is required by law to
be held; or
(iii) revoked or varied by ordinary resolution passed by the shareholders of the Company in
general meeting,
whichever occurs first, but not so as to prejudice the completion of the purchase(s) by the
Company of its shares before the aforesaid expiry date and made in any event, in accordance
with the provisions of the Act, rules and regulations made pursuant to the Act, the Listing
Requirements of Bursa Malaysia, and any requirements issued by any other relevant
government and/or regulatory authorities.
GOVERNANCE DRIVEN
AND THAT the Directors of the Company be and are hereby authorised to take all such steps as
are necessary or expedient to implement, finalise, complete or to give effect to the Proposed
Share Buy-Back with full powers to assent to any conditions, modifications, variations and/
or amendments in any manner as may be required by the relevant authorities and to deal
with all matters relating thereto and to take all such steps and do all acts and things in any
manner as they may deem necessary or expedient to implement, finalise and give full effect
to the Proposed Share Buy-Back.”
10. AUTHORITY TO CONTINUE IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTORS
(i) “THAT Raja Tan Sri Dato’ Seri Aman bin Raja Haji Ahmad who has served as an Resolution 9
Independent Non-Executive Director of the Company for a cumulative term of more
than nine (9) years, to continue to act as Independent Non-Executive Director of the
Company.”
(ii) “THAT Tan Sri Dato’ Lau Yin Pin @ Lau Yen Beng who has served as an Independent Non- Resolution 10
Executive Director of the Company for a cumulative term of more than nine (9) years, to
continue to act as Independent Non-Executive Director of the Company.”
BY ORDER OF THE BOARD
DATO’ HAJI BAHARI BIN JOHARI (LS 0008773/SSM PC No. 201908002206)

SEUHAILEY BINTI SHAMSUDIN (MAICSA 7046575/SSM PC No. 202008001650)
WONG MAW CHUAN (MIA 7413/SSM PC No. 202008003554)
Company Secretaries
Kuala Lumpur
28 October 2020
Notes:
A. This Agenda item is meant for discussion only as the provision of Sections 248(2) and 340(1) of the Companies Act, 2016
does not require a formal approval of the members and hence, is not put forward for voting.
1. A member of the Company shall not be entitled to appoint more than two (2) proxies to attend, participate, speak and
vote at the same meeting and where the member appoints two (2) proxies to attend, participate, speak and vote at the
same meeting, such appointment shall be invalid unless the member specifies the proportion of his/her holdings to be
represented by each proxy.
2. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for
multiple beneficial owners in one securities account (“omnibus account”) as defined under the Securities Industry
(Central Depositories) Act 1991, there is no limit to the number of proxies which the exempt authorised nominee may
appoint in respect of each omnibus account it holds.
271
3. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a
notarially certified copy of that power or authority shall be deposited at the office of the Share Registrar, Mega Corporate
Services Sdn Bhd at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur of the
Company, or at such other place within Malaysia is specified for that purpose in the notice convening the meeting, not
less than forty-eight hours before the time for holding the meeting or adjourned meeting at which the person named in
the instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid. If the appointer is
a corporation, either under its Common Seal (if any) or under the hand of an officer or attorney duly authorised.
4. Pursuant to Paragraph 8.29A(1) of the Listing Requirements of Bursa Malaysia, all the resolutions as set out in this
Notice will be put to vote by way of poll.
5. In respect of deposited securities, only members whose names appear on the Record of Depositors as at 12 November
2020 shall be eligible to attend, participate, speak and vote at the 23rd AGM or appoint proxy(ies) to attend and/or vote
on his/her behalf.
Explanatory Notes to Special Business:
6. Resolution 6
The proposed resolution is to seek a renewal of general mandate for authority to issue shares pursuant to Sections 75
and 76 of the Act. If the resolution is passed, it will empower the Directors of the Company to issue and allot shares up
to an amount not exceeding in total 10% of the issued share capital of the Company, for such purposes as the Directors
would consider in the best interest of the Company. The approval is sought to avoid any delay and cost involved in
convening a general meeting for such issuance of shares. This authority will, unless revoked or varied by the Company
in a general meeting, expire at the next AGM of the Company.
The general mandate for issue of shares will provide flexibility to the Company for any possible fund raising activities,
including but not limited to further placement of shares for the purpose of repayment of bank borrowings, funding
future investment and working capital.
7. Resolution 7
The proposed resolution, if passed will enable the Company and its subsidiaries to enter into recurrent related party
transactions of a revenue or trading nature pursuant to Paragraph 10.09 of the Listing Requirements of Bursa Malaysia.
8. Resolution 8
The proposed resolution, if passed, will allow the Company to purchase its own shares up to 10% of the total number
of issued shares of the Company by utilising the funds allocated which shall not exceed the retained profits of the
Company.
GOVERNANCE DRIVEN
9. Resolutions 9 and 10
The Nomination Committee has assessed the independence of Raja Tan Sri Dato’ Seri Aman bin Raja Haji Ahmad and
Tan Sri Dato’ Lau Yin Pin @ Lau Yen Beng, who have served as Independent Non-Executive Directors of the Company for
a cumulative term of more than nine (9) years and the Board has recommended them to continue to act as Independent
Non-Executive Directors of the Company based on the following justifications:
(i) They had fulfilled the criteria under the definition of Independent Directors as stated in the Listing Requirements
of Bursa Malaysia, and hence, they would be able to provide an element of objectivity, independent judgement and
balance to the Board;
(ii) Their length of services on the Board of more than nine (9) years does not in any way interfere with their exercise
of objective judgement or their ability to act in the best interests of the Company and Group. In fact, all of them,
having been with the Company for more than nine (9) years, are familiar with the Group’s business operations
and have devoted sufficient time and commitment to their role and responsibilities as Independent Directors for
informed and balance decision making; and
(iii) They have exercised due care during their tenures as Independent Directors of the Company and have discharged
their duties with reasonable skill and competence, bringing independent judgement and depth into the Board’s
decision making in the interest of the Company and its shareholders.
10. Statement Accompanying the Notice of AGM
Pursuant to paragraph 8.27(2) of the Listing Requirements of Bursa Malaysia, the Notice convening an AGM is to be
accompanied by a statement furnishing details of individuals who are standing for election as directors. This requirement
excludes directors who are standing for re-election.
No individual is standing for election as a Director at the 23rd AGM of the Company.
IMPORTANT NOTICE:
In view of the outbreak of COVID-19 which is now a global pandemic, the Company has in place rules and control for the 23rd
AGM in order to safeguard the health of attendees. You are requested to read and adhere to the Administrative Guide issued
which is sent together with this Notice of 23rd AGM. Members are also reminded to monitor the Company’s website and
announcements from time to time for any changes to the 23rd AGM’s arrangements.
Form of Proxy
Number of Shares Held Shareholder’s Contact No.
*I/We, NRIC/Company No.

(Full name as per NRIC/Certificate of Incorporation)
of
(Full address)
being a member of AHMAD ZAKI RESOURCES BERHAD, hereby appoint:
NRIC No.
*and/or failing him/her NRIC No.
or failing *him/her/both, the Chairman of the Meeting as *my/our proxy to vote for *me/us and on *my/our behalf at the 23rd Annual
General Meeting (“AGM”) of the Company to be held at the Banquet Hall, 1st Level, Main Lobby, TPC Kuala Lumpur, 10 Jalan 1/170D, Off
Jalan Bukit Kiara, 60000 Kuala Lumpur on Thursday, 19 November 2020 at 10.00 a.m. and at every adjournment thereof, on the following
resolutions referred to in the Notice of AGM.
The proportion of *my/our holding to be represented by *my/our proxies are as follows:-

(The Table below should be completed only when two proxies are appointed)
No. of shares Percentage (%)

Proxy 1
Proxy 2
Total:
*My/our proxy is to vote as indicated below:
No. RESOLUTIONS FOR AGAINST Please indicate with an “X” in the appropriate
spaces provided above how you wish your vote to
1. RESOLUTION 1 be cast. If you do not do so, the proxy will vote or
2. RESOLUTION 2 abstain from voting at *his/her discretion.
3. RESOLUTION 3
4. RESOLUTION 4 Date:
5. RESOLUTION 5
6. RESOLUTION 6
7. RESOLUTION 7
8. RESOLUTION 8 Signature(s) / Common Seal of Member
9. RESOLUTION 9 (if applicable)
10. RESOLUTION 10 * Delete where inapplicable.
Notes: Mega Corporate Services Sdn Bhd at Level 15-2, Bangunan Faber Imperial
Court, Jalan Sultan Ismail, 50250 Kuala Lumpur of the Company, or at
1. A member of the Company shall not be entitled to appoint more than two (2) such other place within Malaysia is specified for that purpose in the notice
proxies to attend, participate, speak and vote at the same meeting and where convening the meeting, not less than forty-eight hours before the time for
the member appoints two (2) proxies to attend, participate, speak and vote holding the meeting or adjourned meeting at which the person named in the
at the same meeting, such appointment shall be invalid unless the member instrument proposes to vote, and in default the instrument of proxy shall not
specifies the proportion of his/her holdings to be represented by each proxy. be treated as valid. If the appointer is a corporation, either under its Common
2. Where a member of the Company is an exempt authorised nominee which Seal (if any) or under the hand of an officer or attorney duly authorised.
holds ordinary shares in the Company for multiple beneficial owners in one 4. Pursuant to Paragraph 8.29A(1) of the Listing Requirements of Bursa
securities account (“omnibus account”) as defined under the Securities Malaysia, all the resolutions as set out in the Notice of AGM will be put to
Industry (Central Depositories) Act 1991, there is no limit to the number of vote by way of poll.
proxies which the exempt authorised nominee may appoint in respect of each
omnibus account it holds. 5. In respect of deposited securities, only members whose names appear on
the Record of Depositors as at 12 November 2020 shall be eligible to attend,
3. The instrument appointing a proxy and the power of attorney or other participate, speak and vote at the AGM or appoint proxy(ies) to attend and/or
authority, if any, under which it is signed or a notarially certified copy of that vote on his/her behalf.
power or authority shall be deposited at the office of the Share Registrar,
Fold here
STAMP
MEGA CORPORATE SERVICES SDN BHD

Level 15-2, Bangunan Faber Imperial Court
Jalan Sultan Ismail
50250 Kuala Lumpur
Fold here
Menara AZRB
No. 71, Persiaran Gurney,
54000 Kuala Lumpur, Malaysia
Tel: +603-2698 7171
Fax: +603-2694 8181
Email: [email protected]
www.azrb.com

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2020 Annual Report

CORPORATE GOVERNANCE FINANCIAL STATEMENTS

Audit and Risk Committee Registered Office • CIMB Bank Berhad

ENGINEERING AND CONSTRUCTION PROPERTY

4. TADOK GRANITE MANUFACTURING 3. RESIDENCE INN & MOTELS

5. UNGGUL ENERGY & CONSTRUCTION 4. TREND VISTA DEVELOPMENT

6. AZRB INTERNATIONAL VENTURES 5. TEMALA DEVELOPMENT SDN BHD 70%

8. FASATIMUR SDN BHD 50% 7. TB REALTY SDN BHD 53%

OIL & GAS

4. ASTRAL FAR EAST SDN BHD 53% 3. SAMBUNGAN LEBUHRAYA TIMUR

5-Year Financial Highlights

Group Five-Year Summary 2015 2016 2017 2018 2020

Revenue (RM‘000) 714,972 1,201,273 960,620 1,228,590 1,462,761

Profit/(Loss) before taxation (RM‘000) 32,082 50,462 61,916 24,817 (75,790)

Paid-up Capital (RM‘000) 120,885 120,885 197,478 197,536 197,536

Shareholders’ Funds (RM‘000) 338,785 364,916 445,698 461,481 355,098

Net tangible assets per share (sen) 69 64 75 69 51

PROFIT/(LOSS) NET TANGIBLE

Sesi Pertemuan Bersama Majlis Berbuka Puasa AZRB 2019

Best Student Awards 2019 Investor Townhall

Agile Corporate Governance In KSR Bowling Tournament AZRB JUMP

Sumbangan CSR Serta Bertemu Wira-Wirawati Negara Sempena Musim COVID-19

Awards And Recognitions

Awards And Recognitions

RAJA TAN SRI DATO’ SERI AMAN

TAN SRI DATO’ SRI HAJI WAN ZAKI

Executive Vice Chairman

DATO’ SRI WAN ZAKARIAH

Group Managing Director

Dato’ Sri Wan Zakariah obtained a Bachelor of Science

Deputy Group Managing Director (1)

Dato’ W Zulkifli holds a Bachelor of Science (Civil

Deputy Group Managing Director (2)

Dato’ Roslan joined the Company in 2010 as Chief

TAN SRI DATO’ LAU YIN PIN

Independent Non-Executive Director

DATUK (PROF.) A RAHMAN

Independent Non-Executive Director

DATO’ SR. ABDULL MANAF

Independent Non-Executive Director

DATUK WIRA AZHAR

Independent Non-Executive Director

Save as disclosed in the related party transactions on

None of the Directors have been convicted of any offences

Profiles of Senior Management

MOHAMMAD FAUZI BIN HAJI AHMAD

Date Joined Working Experience(s)

WAN SHARIMAN WAN MOHAMED

Date Joined Working Experience(s)

Date Joined Working Experience(s)

Profiles of Senior Management

ISKANDAR SHAM BIN ABD RASAP

Date Joined Master of Science in Professional Accountancy

DATO’ KHAIRUL YUSNI MD YUSOF

Date Joined Working Experience(s)

Profiles of Senior Management

KHAIRUDIN BIN HAJI MOHD ALI

Date Joined BA (Hons) Accounting and Finance, De Montfort

Date of Appointment to Current Position Working Experience(s)