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Page 1: Annual Report 2019 GUH Holdings Berhad 1

GUH Holdings BerhadAnnual Report 2019 1

Page 2: Annual Report 2019 GUH Holdings Berhad 1

GUH Holdings BerhadAnnual Report 20192

FOR ITS SHAREHOLDERS• Practisegoodcorporategovernancetoenhancetransparency• Identifycorrectventuresandbusinessdevelopmenttomaximizeshareholders’value• Providegooddividendpayment

FOR ITS EMPLOYEES• Provideaconduciveworkingenvironment• Providepropertraining,developmentandopportunitiesforcareeradvancement• Recognizeandrewardexcellentemployees

FOR ITS SUPPLIERS/VENDORS• Impartialityintheapprovalofsuppliers/vendors• Effectivecommunicationtofacilitatesuppliers’/vendors’timelinessandquality

FOR ITS CUSTOMERS• Respondefficientlytothechangingdemandsofthecustomers• Improveproductqualityandtechnicalinnovationtofulfillcustomers’needsandsatisfactionin

themarketplace

FOR ITS COMMUNITY• Integrateenvironmentalprotectionintoourbusinessandtominimizeenvironmentalimpact• Upholditscorporateresponsibilitiesforthebenefitsofthecommunity

VISION

MISSION

Tobeaprofitableandwell-establishedconglomeratethatmaximizestheinterestforits

andtoachievesustainabilitythroughoutthesupplychain

SHAREHOLDERS EMPLOYEES CUSTOMERS COMMUNITYSUPPLIERS/VENDORS

Page 3: Annual Report 2019 GUH Holdings Berhad 1

GUH Holdings BerhadAnnual Report 2019 1

2 CorporateProfile

3 CorporateInformation

4 ProfileofDirectors

10 ProfileofManagementTeam

12 ExecutiveChairman’sStatement

14 Management’sDiscussionandAnalysis

23 CorporateStructure

24 FinancialHighlights

26 SustainabilityStatement

34 CorporateGovernanceOverviewStatement

45 AdditionalDisclosure

46 StatementonRiskManagementand InternalControl

49 AuditCommitteeReport

53 FinancialStatements

122 AnalysisofShareholdings

125 ListofProperties

126 NoticeofAnnualGeneralMeeting

131 StatementAccompanyingNoticeof AnnualGeneralMeeting

• ProxyForm

CONTENTS

Page 4: Annual Report 2019 GUH Holdings Berhad 1

GUH Holdings BerhadAnnual Report 20192

CORPORATE PROFILE

GUHHoldingsBerhadisaMalaysian-basedcorporation

withkeybusinessesin

electronic,propertydevelopmentandutilities

Asaproudandhome-growncompany

withdiversifiedportfolio,

GUHiscommittedtobuilding

asustainablefutureandbringingpositivebenefits

toallitsstakeholders

www.guh.com.my

CORPORATE

Page 5: Annual Report 2019 GUH Holdings Berhad 1

GUH Holdings BerhadAnnual Report 2019 3

CORPORATEINFORMATION

TanSriDato’SeriH’ngBokSanExecutive Chairman

DatukSeriKennethH’ngBakTeeChief Executive Officer/Group Managing Director

Dato’HarryH’ngBakSeahNon-Executive Director

DatinJessicaH’ngHsiehLingNon-Executive Director

Mr.ChewHockLinIndependent Non-Executive Director

Dato’IsmailBinHamzahIndependent Non-Executive Director

Dato’LaiChangHunIndependent Non-Executive Director

En.WIsmailBinWNikIndependent Non-Executive Director

Dato’Dr.GanKongMengIndependent Non-Executive Director

Board of Directors

Company Secretaries

DatukSeriKennethH’ngBakTee(LS0008988)(SSMPCNo.:201908001173)KeeGimTee(MAICSA7014866)(SSMPCNo.:201908002255)

Share Registrar

MegaCorporateServicesSdn.Bhd.(198901010682(187984-H))Level15-2BangunanFaberImperialCourtJalanSultanIsmail50250KualaLumpurTel: 03-26924271Fax: 03-27325388Website: www.megacorp.com.my

Registered Office

PartofPlot1240&1241BayanLepasFreeIndustrialZonePhase3,BayanLepas,11900PenangTel: 04-6166333Fax: 04-6166366Website: www.guh.com.my

Independent Auditors

CroweMalaysiaPLT(201906000005(LLP0018817-LCA)&AF1018)CharteredAccountantsLevel6,WismaPenangGarden42JalanSultanAhmadShah10050PenangTel: 04-2277061Fax: 04-2278011Website: www.crowe.my

Principal Bankers

UnitedOverseasBank(Malaysia)BhdCIMBBankBerhadMalayanBankingBerhadPublicBankBerhad

Stock Exchange Listing

ListedontheMainMarketofBursaMalaysiaSecuritiesBerhadunderIndustrialProductsSector

StockCode:3247StockName:GUH

GUH Holdings BerhadAnnual Report 2019 3

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GUH Holdings BerhadAnnual Report 20194

PROFILEOFDIRECTORS

TanSriDato’SeriH’ngBokSanisthefounderofGUHCircuitIndustry(PG)Sdn.Bhd.,theExecutiveChairmanofGUH

HoldingsBerhad(“GUH”)GroupandasubstantialshareholderofGUH.HewasappointedtotheBoardofGUHon6

January1994.TanSriDato’SeriH’ngalsositsontheBoardofSarawakCableBerhad,apubliclistedcompany.He

holdsdirectorshipsinseveralotherprivatelimitedcompanies.

Anexperiencedandwell-knownentrepreneurwhocompletedhighschoolexaminationintheearlyyearswithaCertificate

inBusinessAdministrationandAccountingobtainedinSingapore,TanSriDato’SeriH’ngbeganhiscareerinvarious

fieldsfrommarketingmanagement,businessadministrationtothesettingupofbusinessesandmanufacturing.Tan

SriDato’SeriH’ngfoundedLeaderCableIndustryBerhadbackin1976andimplementedarestructuringandmerger

exercisebetweenLeaderCableIndustryBerhadandUniversalCable(M)BerhadandestablishedLeaderUniversal

HoldingsBerhadastheholdingcompany,whichwasformerlylistedonBursaMalaysiaSecuritiesBerhad.Throughout

hiscareer,TanSriDato’SeriH’nghasbeenverymuchinvolvedinthebusinessentrepreneurshipandhehasgained

extensiveoperationalexperienceinthemanufacturingaswellasthecorporaterestructuringandmergerexerciseand

manyotherfieldsandindustrysectors.Hehasaccumulatedin-depthknowledgeandrecognitionovertheyears.

TanSriDato’SeriH’ng’sdaughter,DatinJessicaH’ngHsiehLingandhistwobrothers,Dato’HarryH’ngBakSeahand

DatukSeriKennethH’ngBakTeearealsotheDirectorsofGUH.TanSriDato’SeriH’ngisdeemedtohaveaninterest

pertainingtotheproposedrenewalofshareholders’mandateforrecurrentrelatedpartytransactionsofarevenueor

tradingnaturewhichwillbetabledattheforthcoming56thAnnualGeneralMeeting.Heisalsodeemedtobeinterested

incertainrecurrentrelatedpartytransactionsortradingnaturewhicharenecessaryfortheday-to-dayoperationsofthe

Companyanditssubsidiariesasdisclosedonpage115oftheAnnualReport.

Saveasaforesaiddisclosed,therearenootherbusinessarrangementswiththeCompanyinwhichhehaspersonal

interests.

TanSriDato’SeriH’ngattendedallofthe4Boardmeetingswhichwereheldinthefinancialyearended31December

2019.

Tan Sri Dato’ Seri H’ng Bok San, JP

PSM, DPPN, DGPN, DSPN, PKT, PJK

ExecutiveChairman

80yearsold,Malaysian

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GUH Holdings BerhadAnnual Report 2019 5

PROFILEOFDIRECTORS

Datuk Seri Kenneth H’ng Bak Tee

DGSM, DPNS, DSPN, PKT, PJM

ChiefExecutiveOfficer/GroupManagingDirector

60yearsold,Malaysian

DatukSeriKennethH’ngBakTeehasbeenappointedtotheBoardastheChiefExecutiveOfficer/GroupManaging

DirectorofGUHsince1September2004.HealsoservesastheDirectorofallsubsidiariesoftheGroupandseveral

otherprivatelimitedcompanies.HeisaBoardmemberofStraitsInternationalEducationGroupSdn.Bhd.

HestartedhiscareerwithInternationalBusinessMachines(IBM)inKualaLumpurandIBMinAsiaSouthPacificArea

(ASPA)HQinHongKong.HewasalsowithLeaderUniversalHoldingsBerhad(“Leader”)for16years.

DatukSeriKennethgraduatedwithaBachelorofMathematics(DoubleHonours)inComputersScienceandCombinatoric

&OptimizationandalsoholdsaMasterofAppliedScience(ManagementScience)inUniversityofWaterloo,Canada.

HeiscurrentlyaFellowMemberoftheInstituteofApprovedCompanySecretaries,anAffiliateMemberoftheMalaysian

InstituteofCharteredSecretariesandAdministratorsandaMemberoftheRegisteredFinancialPlanner.

DatukSeriKennethisthebrotheroftheGroup’sExecutiveChairman,TanSriDato’SeriH’ngBokSanandtheNon-

ExecutiveDirector,Dato’HarryH’ngBakSeah.Hisniece,DatinJessicaH’ngHsiehLingisalsoaNon-ExecutiveDirector

ofGUH.DatukSeriKennethisdeemedtohaveaninterestpertainingtotheproposedrenewalofshareholders’mandate

forrecurrentrelatedpartytransactionsofarevenueortradingnaturewhichwillbetabledattheforthcoming56thAnnual

GeneralMeeting.Heisalsodeemedtobeinterestedincertainrecurrentrelatedpartytransactionsortradingnature

whicharenecessaryfortheday-to-dayoperationsoftheCompanyanditssubsidiariesasdisclosedonpage115ofthe

AnnualReport.

Saveasaforesaiddisclosed,therearenootherbusinessarrangementswiththeCompanyinwhichhehaspersonal

interests.

DatukSeriKennethattendedallofthe4Boardmeetingswhichwereheldinthefinancialyearended31December

2019.

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GUH Holdings BerhadAnnual Report 20196

PROFILEOFDIRECTORS

DatinJessicaH’ngHsiehLingwasappointedtotheBoardasaNon-ExecutiveDirectoron20February2001.SheisamemberoftheRiskManagement&SustainabilityCommitteeandtheRemunerationCommitteeappointedbytheBoard.Sheholdsdirectorshipsinseveralotherprivatelimitedcompanies.

DatinJessicagraduatedfromSouthernIllinoisUniversityatCarbondale,USAwithaBachelorofScienceDegree,majoringinAccountingandshealsoobtainedaMasterofScienceDegree,majoringinTaxationfromDrexelUniversity,Philadelphia,USA.Uponcompletinghertertiaryeducation,DatinJessicastartedhercareerbyholdingvariousmajorkeypositionsinmultinationalcompaniesandgainedextensiveknowledgeandexperienceincorporatefinanceandbusinessmanagementpriortojoiningLeaderUniversalHoldingsBerhad.

DatinJessicaisthedaughteroftheGroup’sExecutiveChairman,TanSriDato’SeriH’ngBokSan.Bothheruncles,Dato’HarryistheNon-ExecutiveDirectorandDatukSeriKennethistheChiefExecutiveOfficer/GroupManagingDirectorofGUH.DatinJessicaisdeemedtohaveaninterestpertainingtotheproposedrenewalofshareholders’mandateforrecurrentrelatedpartytransactionsofarevenueortradingnaturewhichwillbetabledattheforthcoming56thAnnualGeneralMeeting.Sheisalsodeemedtobeinterestedincertainrecurrentrelatedpartytransactionsortradingnaturewhicharenecessaryfortheday-to-dayoperationsoftheCompanyanditssubsidiariesasdisclosedonpage115oftheAnnualReport.

Saveasaforesaiddisclosed,therearenootherbusinessarrangementswiththeCompanyinwhichshehaspersonalinterests.

DatinJessicaattendedallofthe4Boardmeetingswhichwereheldinthefinancialyearended31December2019.

Datin Jessica H’ng Hsieh LingNon-ExecutiveDirector54yearsold,Malaysian

Dato’ Harry H’ng Bak SeahDSPN, PJK

Non-ExecutiveDirector70yearsold,Malaysian

Dato’HarryH’ngBakSeahwasappointedtotheBoardasaNon-ExecutiveDirectorofGUHon13January1994.Healsoholdsdirectorshipsinseveralotherlocalandoverseasprivatelimitedcompanies.

Uponcompletinghishighschooleducation,hebeganhiscareerintheoperationsandmanufacturingofpewterandmagnetwire.Subsequently,heventuredintothetelecommunicationsandpowercablebusiness.HehasheldvariouspositionsfromtheGroupManagingDirectorofLeaderUniversalHoldingsBerhadsince1993untiltheappointmentastheExecutiveViceChairmanfrom1997to2005.Throughouthiscareer,Dato’Harrygainedextensiveexperiencewhichenhancedhisknowledgeinthemanufacturingoperationsanddiversifiedbusinessenvironmentovertheyears.

Dato’HarryisthebrotheroftheGroup’sExecutiveChairman,TanSriDato’SeriH’ngBokSanandtheChiefExecutiveOfficer/GroupManagingDirector,DatukSeriKennethH’ngBakTee.Hisniece,DatinJessicaH’ngHsiehLingisalsoaNon-ExecutiveDirectorofGUH.Dato’Harry isdeemedtohaveaninterestpertainingtotheproposedrenewalofshareholders’mandateforrecurrentrelatedpartytransactionsofarevenueortradingnaturewhichwillbetabledattheforthcoming56thAnnualGeneralMeeting.Heisalsodeemedtobeinterestedincertainrecurrentrelatedpartytransactionsortradingnaturewhicharenecessaryfortheday-to-dayoperationsoftheCompanyanditssubsidiariesasdisclosedonpage115oftheAnnualReport.

Saveasaforesaiddisclosed,therearenootherbusinessarrangementswiththeCompanyinwhichhehaspersonalinterests.

Dato’Harryattendedallofthe4Boardmeetingswhichwereheldinthefinancialyearended31December2019.

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GUH Holdings BerhadAnnual Report 2019 7

PROFILEOFDIRECTORS

Dato’IsmailBinHamzahwasappointedtotheBoardasanIndependentNon-ExecutiveDirectoron19December2001.HeservesasChairmanoftheNominationCommitteeandtheRemunerationCommitteeoftheBoard.HeisalsoamemberoftheAuditCommitteeandtheRiskManagement&SustainabilityCommittee.Dato’IsmailsitsontheBoardsofafewpubliclistedcompanies,namelySCCHoldingsBerhad,JKGLandBerhadandJasaKitaBerhad.ApartfromservingasaDirectorofpubliclistedcompanies,Dato’IsmailalsoservesasaDirectorofseveralotherprivatelimitedcompanies.

Dato’IsmailgraduatedfromtheUniversityofMalayain1970withaBachelorofEconomics(Hons)inAnalyticalEconomics.Uponcompletinghistertiaryeducation,hestartedhiscareerbyholdingmanykeypositionsinthegovernmentalagenciesandorganizations.Hegainedextensiveknowledgeandexperiencefromeconomicstofinanceacquired,throughouthiscareerandtenureofserviceinthegovernmentalauthoritiesformorethan30years.SittingontheBoardofafewpubliclistedcompanies,Dato’IsmailisveryexperiencedandcapabletoprovideindependentandobjectivejudgmenttotheBoardandheisabletoattendalltheBoardmeetingswithsufficienttimedevotedtoreadingandformulatingsolutionstoissuespresentedattheBoardmeeting.

Saveasaforesaiddisclosed,Dato’IsmaildoesnothaveanyfamilyrelationshipwithandisnotrelatedwithanyDirectorand/ormajorshareholderofGUHnorhasanypersonalinterestinanybusinessarrangementinvolvingtheCompany.

Dato’Ismailattendedallofthe4Boardmeetingswhichwereheldinthefinancialyearended31December2019.

Mr. Chew Hock LinIndependentNon-ExecutiveDirector76yearsold,Malaysian

Mr.ChewHockLinwasappointedtotheBoardasanIndependentNon-ExecutiveDirectorofGUHon20February2001.HeservesasChairmanofAuditCommitteeandtheRiskManagement&SustainabilityCommittee.HeisalsoamemberoftheNominationCommitteeandtheRemunerationCommitteeoftheBoard.HehasbeenappointedastheSeniorIndependentDirectorofGUHtowhomallconcernsmaybeconveyed.Mr.ChewalsositsontheBoardofMasterPackGroupBerhad,apubliclistedcompany.

Mr.ChewgraduatedwithaBachelorofCommerceDegreefromtheUniversityofWesternAustralia.HeisamemberoftheMalaysianInstituteofCertifiedPublicAccountantsandamemberoftheMalaysianInstituteofAccountants.HeisalsoaFellowofCharteredTaxInstituteofMalaysia.Mr.Chewisaformerpartnerofaninternationalauditfirm.Hehasmorethan40yearsofworkingexperienceinvariousareascoveringauditing,accounting,financeandtax.Hegainedextensiveexperienceandknowledgeduringhis tenureasapartnerand longyearsofservice in theaccountancyprofession.BasedonhisexperiencesittingontheBoardofafewpubliclistedcompanies,Mr.ChewisabletoplayhisroleinformulatingandreviewingtheCompany’sstrategiesandtostrikeabalanceandmaketheBoardmoreeffectiveandbeaccountabletoshareholders.

Saveasaforesaiddisclosed,Mr.ChewdoesnothaveanyfamilyrelationshipwithandisnotrelatedwithanyDirectorand/ormajorshareholderofGUHnorhasanypersonalinterestinanybusinessarrangementinvolvingtheCompany.

Mr.Chewattendedallofthe4Boardmeetingswhichwereheldinthefinancialyearended31December2019.

Dato’ Ismail Bin HamzahAMN, KMN, DIMP

IndependentNon-ExecutiveDirector73yearsold,Malaysian

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GUH Holdings BerhadAnnual Report 20198

PROFILEOFDIRECTORS

En. W Ismail Bin W Nik

IndependentNon-ExecutiveDirector

73yearsold,Malaysian

En.WIsmailBinWNikhasbeenappointedtotheBoardsince26January1994.En.WIsmailisalsoadirectorof

severalotherprivatelimitedcompanies.

En.WIsmailgraduatedfromtheUniversityofMalayain1971withaBachelorofEconomicsDegree.Healsocompleted

theexaminationsoftheInstituteofCharteredSecretariesandAdministrators,UnitedKingdomin1970andtheSecurities

InstituteofAustraliain1972.Throughouthiscareerwhichis involvedinvariousindustries,hehasgainedextensive

knowledgeanddiversifiedbusinessexperience includingcommercialbanking, investment,propertydevelopment,

manufacturingandtrading.HepreviouslyservedasaDirectorinafewpubliclistedcompaniesandheisknowledgeable,

competentandabletogive independent judgment totheBoardandtofacilitateamorefair,balancedandeffective

governanceoftheBoardandtheCompany.

Saveasaforesaiddisclosed,En.WIsmaildoesnothaveanyfamilyrelationshipwithandisnotrelatedwithanyDirector

and/ormajorshareholderofGUHnorhasanypersonalinterestinanybusinessarrangementinvolvingtheCompany.

En.WIsmailattendedallofthe4Boardmeetingswhichwereheldinthefinancialyearended31December2019.

Dato’ Lai Chang Hun

DSPN, DJN, PKT

IndependentNon-ExecutiveDirector

82yearsold,Malaysian

Dato’LaiChangHunhasbeenappointedtotheBoardsince13January1994.Dato’LaiisamemberoftheNomination

CommitteeappointedbytheBoard.Healsoholdsdirectorshipsofseveralotherprivatelimitedcompanies.

Dato’LaiwastheChairmanofPenangElectricalMerchantAssociationandheispresentlyholdingthepositionasone

oftheTrusteesintheAssociation.HeispresentlyaDirectorofHanChiangHighSchoolandUniversity/Collegeandalso

holdingthepositionasaDirectorinanumberofsocialsocieties.Dato’Laicompletedhishighschooleducationand

obtainedadiplomaintheelectricalandelectronicintheearlyyear.Hestartedhiscareerintheelectricalengineering

business.Over theyears,hehasgainedextensiveknowledgeandbusinessexperience in themanufacturingand

marketingofelectronicsandelectricalproductsandappliances.Apartfromthat,hehadbeenservingontheBoardof

otherpubliclistedcompanyandisknowledgeable,competentandabletogiveobjectivejudgmenttotheBoardandto

facilitateamorefair,balancedandeffectivegovernanceoftheBoardandtheCompany.

Saveasaforesaiddisclosed,Dato’LaidoesnothaveanyfamilyrelationshipwithandisnotrelatedwithanyDirectorand/

ormajorshareholderofGUHnorhasanypersonalinterestinanybusinessarrangementinvolvingtheCompany.

Dato’Laiattendedallofthe4Boardmeetingswhichwereheldinthefinancialyearended31December2019.

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GUH Holdings BerhadAnnual Report 2019 9

PROFILEOFDIRECTORS

Dato’ Dr. Gan Kong Meng

DSDK, PSPP, SDK, DJN, BCN, SMP, AMK, KMN, PPA, PhD

IndependentNon-ExecutiveDirector

65yearsold,Malaysian

Dato’Dr.GanKongMengwasappointedasanIndependentNon-ExecutiveDirectoron1June2015.Heisamember

oftheAuditCommitteeappointedbytheBoard.HewaspreviouslytheSeniorVicePresidentforcorporateintegrity/

surveillance&securityandChairmanforcreditreviewandriskassessment/investorrelationsofaprivatelimitedcompany

until15March2020.Keyresponsibilitiesincludeimplementinginternalcontrols,workingwithrelevantauthoritiesand

adopting importantrulessuchasthoserelatingtobusinessrelationsandthoserelatingtothepreventionofmoney

launderingandterroristfinancing.

Dato’Dr.GangraduatedfromtheUniversityScienceMalaysiawithaBachelorofScienceDegreeinPhysics&Mathematics,

aMasterofSocialScienceDegreeinAnthropology/SociologyandhealsoobtainedaPhDinDrugResearch.

Dato’Dr.GanservedintheRoyalMalaysiaPoliceformorethan30overyearsbeforeretiringinearlyJanuary2015.

HewastheOCPDofGeorgetown,Penang,OCCIofKualaLumpurCityandhealsoheldvariouspositionsinspecial

branch,managementaswellaspublicorder.Dato’Dr.Gan’svastexperiencewillbenefittheGroupinreinforcingthe

securityandriskmanagementissues.

Saveasaforesaiddisclosed,Dato’Dr.GandoesnothaveanyfamilyrelationshipwithandisnotrelatedwithanyDirector

and/ormajorshareholderofGUHnorhasanypersonalinterestinanybusinessarrangementinvolvingtheCompany.

Dato’Dr.Ganattended3outofthe4Boardmeetingswhichwereheldinthefinancialyearended31December2019.

NoneoftheDirectorsofGUHhavecommittedanyoffenceswithinthepast5yearsotherthantrafficoffencesnorbeen

imposedwithpublicsanctionorpenaltybytherelevantbodiesduringthefinancialyear.

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GUH Holdings BerhadAnnual Report 201910

MR. LEWIS H’NG CHUN LIChief Operating Officer – Corporate OfficeAged 32, Malaysian

Qualifications:• BachelorDegreeinEconomics,MonashUniversity,Australia

Working experiences:• Gainedextensiveknowledgeandexperience inbusinessmanagement fromCitigroupandKiyamasGroupofCompanies

• 2yearsworkingexperienceasDeputyGeneralManagerinGUHCircuitIndustry(Suzhou)Co.Ltd.• PersonalAssistanttoCEO/GroupManagingDirectorofGUHHoldingsBerhad• GeneralManagerofCorporateDivisionofGUHHoldingsBerhad• ChiefOperatingOfficerofCorporateDivisionofGUHHoldingsBerhad

Appointment to the current position:• 1October2017

Mr.LewisH’ngChunLiisthesonofDatukSeriKennethH’ngBakTee,CEO/GroupManagingDirector.HeisalsothenephewofTanSriDato’SeriH’ngBokSanandDato’HarryH’ngBakSeahandthecousinofDatinJessicaH’ngHsiehLing.

Mr.LewisH’ngsitsontheboardofmajorityofsubsidiariesofGUH.Heisdeemedtohaveaninterestpertainingtotheproposedrenewalofshareholders’mandateforrecurrentrelatedpartytransactionsofarevenueortradingnaturewhichwillbetabledattheforthcoming56thAnnualGeneralMeeting.

MS. YEOH SAW GAIKGeneral Manager – Corporate OfficeAged 50, Malaysian

Qualifications:• BachelorDegreeinAccounting,UniversityofMalaya• CharteredAccountantwithTheMalaysianInstituteofCertifiedPublicAccountants• MemberofMalaysianInstituteofAccountants

Working experiences:• More than22yearsofexperience in the fieldofaccounting, costing, taxation, finance,auditingand riskmanagement

• BeganhercareerwithArthurAndersen&Co

Appointment to the current position:• 1October2017

DR. BRIAN KOK SIEW FOONGGeneral Manager – Electronic Division Aged 63, Malaysian

Qualifications:• DiplomainElectronicsEngineering,ICSSchools,UK• MasterinBusinessAdministration• DoctorateofPhilosophyinBusinessAdministration,BulacanStateUniversityofPhilippines• MemberofTheInstitutionofEngineeringandTechnologyUK(MIET)

Working experiences:• TestEquipmentEngineerwithSanyoElectric• SeniorDesignEngineer/R&DProjectManagerwithGrundigR&D• ProductionManagerwithAsianDriveshaft• ApplicationEngineering&CommercialManagerwithGKNDriveline• PersonalAssistanttoGroupExecutiveDirectorwithGUHElectricalAppliancesSdn.Bhd.• PersonalAssistanttoGeneralManagerwithGUHCircuitIndustry(PG)Sdn.Bhd.• GeneralManagerofGUHCircuitIndustry(PG)Sdn.Bhd.

Appointment to the current position:• 8January2014

PROFILEOFMANAGEMENTTEAM

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GUH Holdings BerhadAnnual Report 2019 11

Additional notes on the above Management Team

Saveasaforesaiddisclosed,noneoftheManagementTeamhas:

1. Directorshipinpubliccompaniesandlistedissuers;2. Familyrelationshipwithanydirectoror/andmajorshareholderoftheCompany;3. ConflictofinterestswiththeCompany;and4. Committedanyoffenceswithinthepast5yearsotherthantrafficoffencesnorbeenimposedwithpublicsanction

orpenaltybytherelevantregulatorybodiesduringthefinancialyear.

MR. LIM CHIN WANGSenior General Manager – Utilities DivisionAged 41, Malaysian

Qualifications:• BachelorDegreeinChemicalEngineering,UniversityofTechnologyMalaysia• RegisteredEngineerofBoardofEngineerMalaysia

Working experiences:• Morethan18yearsofexperienceinplanningandimplementationoflargescalewaterandwastewaterprojects,havingworkedinamongothers,Biwater,HyfluxandMMC

• Identificationandacquisitionofwaterandwastewatertreatmentplants

Appointment to the current position:• 1January2018

MR. SUNNY LIM HIONG CHAIDeputy General Manager – Properties DivisionAged 58, Malaysian

Qualifications:• BachelorofEngineering(Civil),UniversityofTasmania,Australia

Working experiences:• Morethan32yearsofexperienceandknowledgeinthebuildingconstructionandpropertydevelopmentindustry

Appointment to the current position:• 1January2018

MR. LEOW CHEE JIANDeputy General Manager – Properties DivisionAged 54, Malaysian

Qualifications:• CertificateinArchitecture• DiplomainCivilandStructureEngineering

Working experiences:• Morethan30yearsofexperienceinconstructionandpropertydevelopmentinclusiveofdesign,planning,implementation,marketingandsaleadministration

Appointment to the current position:• 1January2018

PROFILEOFMANAGEMENTTEAM

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GUH Holdings BerhadAnnual Report 201912 GUH Holdings BerhadAnnual Report 201912

EXECUTIVECHAIRMAN’SSTATEMENT

OnbehalftheBoardofDirectorsofGUHHoldingsBerhad(“GUH”or“theCompany”),IampleasedtopresenttheAnnual

ReportandAuditedFinancialStatementsoftheCompanyandtheGroupforthefinancialyearended31December

2019.

Performance Overview

Forfinancialyearended31December2019,therevenue

for GUH Group was RM336.0 million, RM13.1 million

lowerthantherevenueforyear2018ofRM349.1million.

Nevertheless,theGrouprecordedaprofitbeforetaxof

RM7.1million,RM6.3millionhigherthantheprofitbefore

taxofRM0.8millionfortheprecedingyear.Theincrease

inprofitbeforetaxmainlyattributabletothehigherprofit

before tax of RM13.3 million recorded by Electronic

Division foryear2019comparedto theprecedingyear

mainly boosted by improved contribution from GUH

Circuit Industry (PG)Sdn.Bhd.butpartlyoffsetby the

shortfallfromGUHCircuitIndustry(Suzhou)Co.,Ltd.and

GUHInternational(HK)PrivateLimitedrespectively.

Significant Event

Furthertotheincorporationofanewsubsidiarycompany

inYancheng,ProvinceofJiangsu,People’sRepublicof

China, known asGUHElectronic (Yancheng) Co. Ltd.

(“GUHYancheng”)whichwaspartoftheGroup’sbusiness

plantofurtherexpanditsinvestmentinthemanufacturing

andsaleofprintedcircuitboards,theBoardofDirectors

(“the Board”), after due consideration announced that

theGroup did not pursuewith the investment inGUH

YanchengandhadstruckoffthecompanyinMarch2020.

ThedecisiontoaborttheinvestmentinGUHYancheng

wasmadefollowingabusinessreviewamidstthecurrent

subduedeconomicoutlook,uncertainmarketconditions

and recent changes in the business environment in

China.

Thedecisionwillnothaveanydirectimpactonanyofits

operationsandneitheranymaterialeffectonthegearing,

earningper shareandnetassetsof theGroup for the

financialyearending31December2020.

Sustainability of Business

TheBoardofGUHacknowledgesthatmaintainingagood

businessisnotonlyaboutachievingthedesiredfinancial

bottom line but also being ethical and sustainable.

Therefore, GUH Group will continue to embrace

sustainability in carrying out its business conduct and

operationswithparticularemphasisonsafeguardingthe

environmentandcontributingtosociety.

More information on GUH’s initiatives is disclosed in

the Sustainability Statement of the Company’sAnnual

Report2019.

Corporate Governance

In line with the Main Market Listing Requirements of

Bursa Malaysia Securities Berhad and the Malaysian

Code on Corporate Governance, the Board firmly

believes that good governance enables the Group to

holdthetrustofitsstakeholders.TheBoardistherefore

alwaysmindfulof itsdutiesandwillcontinue touphold

andfosterastrongcultureoncorporategovernanceas

theBoardbelievesthatistheplatformtosafeguardthe

bestinterestoftheCompanyanditsshareholderswhile

ensuringthattheinterestsofotherstakeholdersarenot

compromised.

More information in relation to corporate governance

can be found in the Corporate Governance Overview

StatementoftheCompany’sAnnualReport2019.

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GUH Holdings BerhadAnnual Report 2019 13GUH Holdings BerhadAnnual Report 2019 13

EXECUTIVECHAIRMAN’SSTATEMENT

Dividend

The Company has consistently paid dividends while

allocating funds for business growth and investment.

The Board had resolved to declare a distribution of

1 treasury share for every 80 existing ordinary shares

held(sharedividend) to itsshareholderswitha totalof

3,427,207treasurysharesbeingdistributedandcredited

into the Depositors’ SecuritiesAccounts to all entitled

shareholderson16January2019.

Related Party Transactions

The related party transactions of the Group are

disclosed in Note 32 of the Notes to the Financial

Statementswhichalsosetouttherecurrentrelatedparty

transactions conducted during the year in accordance

with the mandate obtained from the shareholders at

GUH’sAnnualGeneralMeetingheldon23May2019.

Exceptasaforesaiddisclosed,thereisnoothermaterial

contractinvolvingtheinterestoftheDirectorsandmajor

shareholdersduringtheyear.

Outlook and Prospects

Businesses globally are facing the world’s largest

economiccrisis inhistoryasmost industriesarebeing

shattered following the outbreak of COVID-19 which

has been declared and characterized by the World

HealthOrganisation(WHO)asapandemic.This isnot

justapublichealthcrisis, it isacrisisthateverysector

andeach individualmustbe involved toovercome this

troubledtimes.

ThisisfurtheraggravatedbytheMalaysianGovernment’s

implementationoftheMovementControlOrder(“MCO”)

effective 18 March 2020 with further extension until 9

June2020throughoutMalaysiaasapreventivemeasure

towards the COVID-19 pandemic. At the time of this

reporting, MCO applies to closure of all government

andprivatepremisesexceptthoseinvolvedinessential

serviceswithgradualeasingforotherbusinesses.

Despite the continuous volatile challenges and

uncertainties in market condition forecast for the year

2020,GUHGroupwillstrivethroughtheadversesituation

byadoptingacautiousapproach.TheElectronicDivision

anticipatesastabledemandforprintedcircuitboardsin

thenearfuturewhereasthePropertiesDivisionforesees

soft property market conditions and weak consumer

sentimenttocontinueinyear2020.TheUtilitiesDivision

expects market environment to remain tough in year

2020amidststiffcompetitiononopenmarkettendering.

Overall, the Group foresees a challenging operating

environmentintheyearahead.

Appreciation

TheBoard and I would like to take this opportunity to

express our sincere thanks and appreciation to the

Management and staff for their continuous valuable

contribution,loyaltyanddedicationtotheGroup.Wealso

wishtorecordourheartfeltgratitudetoourshareholders,

customers, partners, bankers, business associates

and all the respected government authorities for their

invaluablesupportandassistance,continuoustrustand

understandingduringtheyear.

Tan Sri Dato’ Seri H’ng Bok San, JPPSM, DPPN, DGPN, DSPN, PKT, PJK

ExecutiveChairman

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MANAGEMENT’SDISCUSSIONANDANALYSIS

Forthefinancialyearended31December2019,GUHGrouprecordedalowerrevenueofRM336.0millioncompared

toRM349.1millionforyear2018.

ThedecreaseinrevenuewasmainlyduetothedropfromUtilitiesDivisiontoRM16.4millionor4.9%ofGrouprevenue

(year2018:RM29.0millionor8.3%)inlinewithslowerconstructionprogressforwaterprojects.

PropertiesDivisiongeneratedalowerrevenueofRM21.9millionor6.5%ofGrouprevenue(year2018:RM26.7million

or7.6%)intandemwiththedropinsaleofresidentialpropertyunits.

Inaddition, theElectricalandPlantationDivisionsrevenuehaddroppedslightly toRM5.5millionandRM0.8million

or 1.6% or 0.3% of Group revenue respectively (year 2018: RM7.6 million and RM1.3 million or 2.2% and 0.4%

respectively).

Onapositivenote,ElectronicDivisionimproveditscontributiontoRM289.6millionor86.2%ofGrouprevenue(year

2018:RM284.0millionor81.4%)whilst InvestmentDivisionachievedahigherrevenueofRM1.8millionor0.5%of

Grouprevenue(year2018:RM0.5millionor0.1%).

Waterandwastewatertreatment

Unallocatednon-operatingsegmentsCultivationofoilpalm

SaleofelectricalappliancesManufactureofprintedcircuitboards

Propertydevelopment

GUH GROUP REVENUE BY SEGMENT

2018

81.4%

0.1%

0.5%8.3%

0.4%

2.2% 7.6%

2019

4.9%0.3%

1.6% 6.5%

86.2%

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MANAGEMENT’SDISCUSSIONANDANALYSIS

Despitethechallengingmarketconditions,GUHGroupmanagedtoregisterahigherprofitbeforetaxofRM7.1million

foryear2019comparedtoprofitbeforetaxofRM0.8millionforyear2018.The increase inprofitbeforetaxmainly

attributabletothehigherprofitbeforetaxofRM13.3millionrecordedbytheElectronicDivisionforyear2019compared

toprofitbeforetaxofRM8.4millionforyear2018mainlyboostedbyimprovedperformancefromMalaysianoperation

onhigherrevenue,favourablesalesmixandforeignexchange.

UtilitiesDivisionrecordedaprofitbeforetaxofRM0.3millionforyear2019incontrasttoalossbeforetaxofRM2.2

millionforyear2018mainlyduetoreversalofliquidatedascertaineddamagesonwaterprojects,higherinterestincome

andloweradministrativeexpenses.

PropertiesDivisiongeneratedaprofitbeforetaxofRM1.9millionforyear2019incontrasttoalossbeforetaxofRM0.4

millionforyear2018mainlyduetohighersaleofcommercialpropertyunits,liquidatedascertaineddamagesclaimfrom

contractorandlowerfinancecosts.

PlantationDivisionincurredalossbeforetaxofRM1.1millionforyear2019incontrasttoaprofitbeforetaxofRM0.2

million foryear2018mainlydue to loweroutputof fresh fruitbunchesandCPOprices,higher rentalexpenseand

unfavourablefairvaluechangesinbiologicalassets.ElectricalDivision’slossbeforetaxofRM0.1millionforyear2019

wasincontrasttoaprofitbeforetaxofRM0.1millionforyear2018mainlyduetounfavourablesalesmix.

Theshareofassociates’losshadincreasedtoRM1.4millionforyear2019comparedtoRM0.1millionforyear2018

mainlydue tohigher financecosts,administrativeand taxexpenses. Inaddition, InvestmentDivisionhadwidened

the loss before tax toRM5.8million for year 2019 compared toRM5.2million for year 2018mainly due to higher

administrativeexpenses.

Waterandwastewatertreatment

Unallocatednon-operatingsegmentsCultivationofoilpalm

SaleofelectricalappliancesManufactureofprintedcircuitboards

Propertydevelopment

GUH GROUP PROFIT/(LOSS) BEFORE TAX BY SEGMENT

20182019

SegmentsSegments

(RM’000)

(RM’000)

15,000

10,000

-10,000

-5,000

5,000

0

8,370

(449)

76 214

(2,157)

(5,257)

15,000

10,000

-10,000

-5,000

5,000

0

13,349

1,859283

(129)(1,075)

(7,191)

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MANAGEMENT’SDISCUSSIONANDANALYSIS

ELECTRONIC DIVISIONManufacturing of Printed Circuit Boards (PCBs)

GUH Circuit Industry (PG) Sdn. Bhd. (GUH PG)

Thebeginningof2010sawthePCBindustryinMalaysiadecliningasmostaudioequipmentmakersshiftedouttoChinatorideonthelowcostbandwagon.TheMalaysianPCB industry at that time was a sunset industry duetomanufacturing of low technology single-sided PCBswith itsprimitiveprocessesofprintingandetchingandredundant capacity due to the proliferation of manyTaiwan small timers. While other PCB companiesclosed or shifted base, the visionary leaders of GUHPG took a bold decision to transform GUH PG andsubsequentlynurtured it into itscurrentpositionas thePCBmanufacturerwiththeBest-In-ClasstechnologyofCCD guided photo-imaging technology,HighPrecisionDrilling Machines, Precision Polish and Etching andAutomated Inner Layer Stacking and Press Machinescapableof8-layerPCBs.

Financial Indicators

GUH PG’s revenue growth through the years iscommendable with year 2019 revenue recorded atRM194 million in comparison to year 2013 of RM82millionwhichwasa2foldincrease.Thesturdyclimbinrevenue is driven by the strategies of quality productsand purposeful niche market selections of high endaudio,communicationandofficeequipment,pianoandmusic instruments, automotive, air conditioners andhome appliances.Again, the revenue of year 2019 incomparisonofyear2018roseby13.5%resultinginyear2019profitbeforetaxofRM13.5millioncomparedtotheRM3.8millionofyear2018.

Operational Indicators and Significant Performance Changes

With the right leadership, altruistic and devotedmanagement efforts, coupled with investments in newmachines and technology, putting in place the rightpeople, people training and customer peace of mindresulted insustainable revenueandprofitabilitygrowthwhichgrewsturdilythroughtheyearsandthusitspositiveresultsareverymuchdiscerniblebyyear2019.

Asrecordedinyear2019,thesalesinm2of4-layerPCBincreased 15 fold, the sales of 6-layer PCB increased10 fold, and the sales of double-sided PCB increased4 fold comparatively to the performance of year 2013.Comparing product sales of year 2019 against 2018,therewasanincreaseofdouble-sidedPCBsalesof13%and multi-layer PCBs sales of 40%. GUH PG startedthesalesofprecision6-layerPCBsdirectlytoJapanforsomenichemarketmusical instruments albeit in smallquantities but did garner a prestige that very muchimproved its image.Also,noteworthy is that in the fouryears of 2015 to 2018,GUHPGwon seven customerawardsandalsotheSignatureBrandAwardbytheBrandLaureateBestBrands.

Notable Capital Expenditure

The renewal of GUH PG’s business capability andsustainability would not be complete without a look atthe Capital Expenditure and Investments through theyearsfrom2010to2019.GUHPGstrategicinvestmentswas based on a focused objective of renewing itsmanufacturing capabilities with the aim of being anexemplarymanufacturer of precision double-sided andmulti-layerPCBsinMalaysia.

Thus, in the years 2010 to 2011, two older factorybuildingsweredemolishedtomakewayforthePTHPCBCenterofExcellencebuilding.Fromyear2012to2015a strategic purchase and commissioning of machineswere done which included 10K cleanrooms, Auto DryFilm Laminators, CCD Guided Imaging Machines,PalladiumBasedPTHMachines,Best inClassPlatingMachinesandJapanStandardDeveloping,EtchingandStrippingLines.QualityControltookonAutomaticOpticalInspection Machines in process and Automatic VisualInspectionMachinesatOutgoingQualityInspection.

Fromyear2016to2018,acompleterevampwasdoneat the“SatelliteBuilding”annexwhencetheolddoublestorey factory was completely stripped down internallyandonthefirstflooracompleterebuiltwasdonetohousethe Inner Layer Clean Room complete with Auto DryFilm Laminator, CCD-LED ImagingMachines, VacuumChamber Etching Line,Auto Thickness CompensatingPre-TreatmentMachine,andAutomaticOpticalInspectionMachines. On the ground floor a State of the ArtAutomaticInnerLayerHotandColdPressSystemandaRailedAutomaticStacking,Recovery,PolishingSystemwasinvestedin.TwoROWaterFiltrationSystemswereadded to ensure that class of input quality benchmarkrequiredattheautomotivePCBstandard.

In year 2019, a substantial investment was done toacquiretwentysixPrecisionRouterMachinestoensurereadinessforthe0603componenttrendoftheelectronicsworld.

An investment of RM101million was made from year2010 to2019 togetGUHPG ready for thenewworldorder.

Operational Activities

Despite being a local owned PCB Plant, GUH PGsteadfastly embraces the Japanese ManufacturingSystemofOperationalManagementlargelyinfluencedbyitscustomerswhoare98%Japaneseownedcompanies

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MANAGEMENT’SDISCUSSIONANDANALYSIS

and its Japanese Consultants. The backbone of theforward planning is the “Hoshin Kanri” methodology,and thuspenscustomers’ expectationsanddevelopedkey performance indicators as weekly, monthly andannual measurements to drive improvement and tocommunicate, educate, review and reward its staffbased on the Continuous Improvement MethodologyandPerformanceMeasurementsbasedonthePlan,Do,CheckandActCycle.WiththeaboveKPIsasdrivers,itdevelopedtechnicalcapabilitiesthatincludefineline/finepitch,denseBGAarrays,multipledesign-in impedancecontrol, plugholedesigns,masking freeviaholewallstechniques and gold plating evenness capable ofmeetingprecisioncommunicationequipmentstandards.GUHPG’smain strategy is to remain relevant and ascustomers’firstchoiceandhenceitsmissionisvestedinsteadfastdedicationtolong-termsustainabilityandtop-drivencommitmenttowardscustomers’needs.

In year 2019, GUH PG added 6-layer PCBs to itsproduction line up, thus it now has single-sided,double-sided, 4-layer and 6-layer multi-layers. GUHPG is certified to theAutomotive QMSCertification ofIATF16949andisarecognizedknowledgecontributortothePCBIPCDesignersCounciloftheSouthEastAsiaChapter.Currently, itsProductDevelopmentEngineersareworkingonthecertifyingofthe8-layerPCBswitharenownedJapanesecompany.

Anticipated Risks

At the time of reporting, the COVID-19 pandemoniumacross the world has turnedmost industries, factoriesandsupplychainsintodisarray.GUHPGwithoutdoubtis affected in some ways due to the major Chinesebasedrawmaterialsupplychain,andmajorcustomers’headquartersbasedinJapan.GUHPGhastakenpropermeasurestoensureuninterruptedsupplyfromthemainsourcesandalsofromalternatesourcesofmaterial.Onthehomefront,allemployeesundergobodytemperaturechecks and all other healthministry advices and strictquarantine instructions on any risks.On a silver liningthereisaninfluxofnewsmallquantityhighpricedRFQsduetothesituationinChina.

Other than COVID-19, the existing conflict that hasaffected almost everyone is the US, China trade war.Undoubtedlyingeneralithasstifledgrowthontheworldperspective and Malaysia would not be spared evenif somewere to argue the spill over of industry goodsdemandtoMalaysia.WiththeexistingpandemicissueitisknownthattheUS,Chinatradewarisfarfrombeingsettled.IthasbeenmorethantwoyearssincetheUnitedStatesfirstlaunchedinvestigationsintoChina’stradeandintellectualpropertyandsincethen,fourdifferentroundsofUStariffshavebeenslappedonChinesegoods.

Notably,ifthefifthroundoftariffsisapplied,virtuallyalloftheUS$550billionimportsfromChinaintotheUSwillbesubjectedtoanaveragetaxofabout25%attheUSborder.Inretaliation,ChinamaybesettoimposeitsowntariffsonmorethanUS$185billionworthofUSgoods.As the tradeconflict rageson,battlescarsallover the

worldarebecomingincreasinglyapparent,compoundedbyabackdropofglobalgeopoliticaluncertainty.Globaltrade growth has slumped into contractionary territory,recordingtheslowestgrowthsincetheGlobalFinancialCrisis. Likewise, global industrial production hassoftened,andpolicymakersandmarketparticipantsarebecoming increasinglywary about the prospects of animpendingglobalrecessiondrivenbythetradewarandfurtheraggravatedbytheCOVID-19disaster.

Nevertheless,thebackdropofthisglobalgloomhassomebrightoutlookandsomenegativeimpacttoMalaysiaandGUHPG.

1. The global sentiment has a sweeping effect onweaker countries thus effecting the Malaysiancurrencywhichhasaveryslimchanceof recoveryin the near future. Coupled with the weakening oilpriceand theweakenedRMB,MYR in themediumterm issupposed tobe lethargic. Inshort term, theweakenedMYRgivesanartificialboosttoitspricesquotedinUSDfortheexportdomain.

2. Thespilloverandtheseekingofsafehavensandnon-quotacountrieshasbeenescalatingduetothetradewar but unfortunately forMalaysia it ranks the lastasacountryofchoiceasanalternativesitetoChinadue to its labour conditions, long and complicatedbusinessapprovalsandunfavourablepoliticalscene.Malaysiahasestablishedanewcommittee to fast-trackapprovalsforforeigninvestmentandassembleda“tradewar task force”butas typical investorsstillseethesamecounterhoppingproceduresinactualpractice. In short, investors seeking an alternativesiteoverChinawouldpreferothercountriesVietnamorThailandratherthanMalaysia.

Going Forward

Nevertheless, among the external gloom, GUH PGhasinfactimprovedbyleapsandboundscomparedtoyesteryearofahandfuloflocalcustomers.ItnowgarnersacustomerbaseofmostlyJapaneseresidentcompaniesinMalaysiaandsubstantialexportstoThailand,Indonesia,Vietnam and indirect exports to several ECCountries.In year 2019, GUH PG’s double-sided PCB productioncapacity reached50,000m2 permonth from its humblebeginning of 9,000 m2 meter square a month of year2008. Itsmulti-layer PCB production capacity reached15,000m2amonthfrom200m2amonth.Concurrently,it achieved benchmarked Best-in-Class capabilities ofMicro-BGAs, Multiple Impedance Control, Fine-LinePatternDesignsandHoleSizesof200microns.

BeforetheCOVID-19pandemicstruck,GUHPG’splansweretoraiseitsPTHproductioncapacityto60,000m2permonthby the year 2020and targetinganaveragemonthlysalesofPTHPCBsatanaverageof58,000m2permonth.Theproductionincreaseisexpectedtoreachutilisationsaturationpointofits5.56acresoflandinyear2020. If this capacity is utilisedwith a good businessfocusandbywooingatleast60%ofexports,GUHPG’sbusinessandprofitabilityshallbesustainableforseveral

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MANAGEMENT’SDISCUSSIONANDANALYSIS

years. This can be achieved should the COVID-19contagioniscontrolledorcontainedgloballyinthenearfuture.

GUH Circuit Industry (Suzhou) Co. Ltd. (GUH SZ)

Financial Indicators

Fortheyear2019,GUHSZpostedarevenueofRM98.71million,13.51%attritionfromRM114.13millionachievedinyear2018;andrecordedaprofitbeforetaxofRM2.81million in year2019ascompared toRM7.33million inyear 2018. The lower revenue wasmainly due to thedropinsalesofPCBby15.88%from773,338m2inyear2018to650,562m2inyear2019.GUHSZencountereddownturn trend in sales mainly attributed by thecustomer’snewmodelswhichwerenolongerallocatedtoGUHSZduetocompany’srelocationmatter.Despitehavinglowerrevenue,GUHSZsustainedprofitablelevelbeyond itsmanufacturing operation excellence, qualityproductsandreputablemarketimage.

Market Positioning

GUHSZ ispositionedasoneof the top5single-sidedPCB manufacturer in the eastern regional market ofChina.Inaddition,GUHSZhasareputationasthe“One-StopSolution”suppliertoitscustomerswiththevariousproduction of single-sided, double-sided, MLB as wellasLEDbacklightandlightingPCBs.Whilemaintainingcurrentproducts,GUHSZismovingtowardsnichemarketapplicationsuchastuner,powersupplyandmotorPCBs.ThesewillenableGUHSZtofurthersustaincompetitiveadvantagesinChinamarket.

GUHSZisgladtohavecustomersfromthelistofFortuneGlobal500whichplaysanimportantroleinmaintainingitssustainabilityinChinamarket.However,therelocationmatterhadleditsmajorcustomerstodistributemostoftheirorderstoothersuppliers.Inyear2020,GUHSZwillcontinuetodevelopnewpotentialcustomersandrebuildthe existing customers confidence with the stability indelivery,bestqualityproductsandcustomerservices.

Future Industry Trends

China’sPCBmarketmaintainsasteadygrowthdespitethetradewarbetweenUSandChina.Withthedevelopmentof5Gandartificialintelligenceera,themarketforsmarthome, smart hardware, smart security and automotiveelectronicsishuge.Smartsecurityisexpectedtocreatea RMB100 billion market by year 2020 as worldwideconsumers are expected to spendmore than USD9.7billion on smart home surveillance cameras by 2023.Thelargermarketisincreasingintheautomotivesectorin thefuture.AccordingtoPrismark, themarketsizeoftheAutomotive PCB production was USD7.6 billion in2018and isexpected to reachUSD10.1billion inyear2023, representing a compound growth rate of 6%.Consumer electronics PCBs worth USD24.1 billion inyear2018andisexpectedtoreachUSD28billioninyear2022,with a compoundgrowth rate of 4.2%.GUHSZwilldevelopnewpotentialbusinessinautomotivemarket

suchasheadlightandinteriorlightingLEDPCBandnewemergingsmarthomeappliancesmarketinChina.

The Way Forward

With the trade war between US and China, some ofGUHSZcompetitorsinChinahavestartedtoshifttheirmanufacturingoperationstooverseascountriessuchasThailandandVietnam.ThemanagementforeseethisasanopportunityforGUHSZtoexploretheexportmarketandfill in thegap in localmarketdemand.GUHSZ isalways ready to take up the opportunity with forwardpreparationsandimplementingstrategiestocaterfortheforeseenthreatsinthemarketenvironment.

Moving forward, GUH SZ is undertaking variousactionplans,which includecost reductionstrategies inmanufacturingoperations,suppliermanagement,logisticandstringentbudgetarycontroltoremaincompetitiveinthe market. GUH SZ will move towards niche marketapplication and continue to focus on diverse range ofproductsincludingautomotiveandhomeapplianceswhilemaintaining the existing products. This new businessexpansion will generate additional sales revenue withbetter profit margin while maximizing the utilization ofproductioncapacity.

Lastly,GUHSZwill continue to improve the quality ofitsproductsandcustomerservicestoensureitprovidesmaximum satisfaction to its valuable customers inmaintainingalong-termrelationship.

The Impact on the Outbreak of COVID-19

While the COVID-19 pandemic continues to causemassive disruption to the global economy, GUH SZperceives the beginning of recovery in China.Most ofthemanufacturing companies arenot only rampingupproduction in the country but some are even planningtoexpandcapacityoverthecomingmonths.Withmostwestern nations in lockdown situation, China-basedplants might be the only viable suppliers to globaleconomy.Taking amore detailed outlook at economicprospects forChina,GUHSZbelievesandanticipatesthatChina isstillwellpositionedtobeoneof themaindriversoftheglobaleconomyinyear2020.TheCOVID-19outbreak isexpected tohaveslight impactonGUHSZ’s performance for the coming reporting periodswithChinashowingsignsofeconomic recoveryas thedomesticcoronaviruscontagionisundercontrol.

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MANAGEMENT’SDISCUSSIONANDANALYSIS

PROPERTIES DIVISIONProperty Development

GUH Properties Sdn. Bhd. (GUH Properties)GUH Land Sdn. Bhd. (GUH Land)GUH Development Sdn. Bhd. (GUH Development)GUH Realty Sdn. Bhd. (GUH Realty)Milan Diamond Sdn. Bhd. (Milan Diamond)

Compared to the year 2018, the top line of GUHPropertiesfell18%toRM21.9millionduetouncertaintyandweakmarketsentimentintheMalaysianrealestatemarket.Despitethefact,thenetprofitbeforetaxofGUHPropertieshas improvedbyRM2.6million,an increaseof 196% from the year 2018. The improvement canbe explained by the numerous efforts taken by GUHProperties to curb costs. Operating expenses havedecreased by 11%,while other income such as rentalincome has increased by a remarkable 57% due tohigherdemandforcommercialactivitiesintheareaGUHPropertiesdevelops.

GUHProperties has consistently strived to sustain themarket share by identifying and supplying the currentmarket demand and enhancing its products despitechallengingmarketaheadpartlyduetoadversemarketsentiment affected by various factors such as weakcurrency, lack of demand in property due to supply-demandimbalance,andhencethesoftpropertymarkettrend.GUHPropertieshasincreasedtheadvertisementefforts as well as giving out attractive promotions toattract sales andmanage the propertymarket slowingdownpressure.

GUH Properties has embarked on high-end landedguardedresidentialdevelopmentsituatedonhighground

and commercial development, which is strategicallylocated right beside Labu/Seremban highway. Thesaid development, which is augmented by impressivelandscape, is situated strategically where shoppingmalls, medical centres, commercial hubs, and sportscentresarewithinashortdistance.

GUH Development has embarked on commercialdevelopment consist of drive-thru restaurants andretails shops in thecentreof the townshipatSimpangAmpat,Penangofwhichwillbesurroundedbyintegratedinfrastructures, public transport systems, residentialhousing,andcommercial hub.ApartnershipwithQSRStoresSdnBhdhasbeensignedtodevelopthefirstKFCdrive-thrurestaurantinthevicinitywhichwillfurtherboostcommercialdevelopmentvalueof thewhole integratedtownship.Launchesoftheretailshopsarescheduledinthenearfuture.

GUH Realty signed a joint venture with CentralisedDormitory Sdn Bhd to build a workers’ dormitory inapproximately7.5acresoflandatSungaiBakap,Penang,outofthe17acreslandbank.CentralisedDormitorySdnBhd has vast experience inmanaging dormitories andgreatconnectionwithpotentialclients.Layoutapprovalhas been obtained from the relevant Authority. Theprojectistargetedtobecompletedinstagesfrommiddle

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MANAGEMENT’SDISCUSSIONANDANALYSIS

toendofyear2022andcanhouseapproximately6,000foreignworkersfornearbyindustrialparks,namelyBatuKawanIndustrialPark,PenangScienceParkandBukitMinyakIndustrialPark.

Besides, Milan Diamond, a wholly-owned subsidiaryof GUH Asset Holdings Sdn Bhd, has completed theconstruction of international school buildings which islocatedatTamanSari,Rawang.ThelandandbuildingsareleasedtoStraitInternationalEducationGroup(SIEG)onalongtermlease.

Owingtothecurrentchallengingeconomicenvironmentand rising living cost, greater efforts will be requiredto boost sales. During the year, the Government hadimplemented various policies to address housingaffordabilityissuesandtoencouragethepropertymarketandincreasedpropertysalessuchasHomeOwnershipCampaign 2019 (“HOC”), offer stampduty exemptionson the Instrument of Transfer and Instrument of LoanAgreement to encourage greater homeownership andimprove sales. With the impact from the COVID-19pandemic in early 2020 amplifying existing issues inthehousingmarketintheformofreduceddemandandincreaseinloandefaults,localowner-occupiermarketsinestablishedandwell-connectedsuburbanareassuchasSimpangAmpatandSerembanareexpectedtoremainstable. There may also be some interest from foreignbuyerswhohaveexperiencedabiggerimpactfromthepandemic in theirowncountrywhowillopt to invest inMalaysia that have better-managed healthcare and toseizetheopportunityoftheweakerRinggitandforeseethe appreciation of property value once the economyrecovers. Bank Negara Malaysia’s moratorium on thepaymentof interestandprincipal forcredit facilitieswilltemporarilyrelievesomepressure,preventingimmediatefalloutinthepropertymarket.PropertyDivisionwillneedtoadoptfurthercautiousmarketingstrategiestosustainstablesalesandwithstand thecompetitionof the local

property market. Events, electronic forms of publicityandpropertytypessuitedtoconsumerslifestylewillbeorchestratedandorganisedtocapturemarketattentionand awareness towards the division and its products.Withthesecontinuousefforts,webelievethePropertiesDivisionwillachievethebusinessobjectivesfortheyearahead.

Moving forward, with consideration on the impact ofthe outbreak of COVID-19 and consumers temporarilymoving away from buying luxury and big-ticket itemsduring this tough times, the Properties Division willconcentrateonresidentialpropertieswhileplanning forfuture launches of integrated commercial project withretailoutlets, recreation,and leisure facilities, foodandbeverage outlets, shops and offices as its strategiclocationisanadvantageandwillspurgreaterdemand.

With the introduction of the above diverse range ofproperty development, different market needs anddemands will be captured. The Property Division hasstrategised itspositiontodiversify itssourceof incomeandprofitfromadiverserangeofpropertydevelopmentproducts.

ThePropertyDivisionwill continue toscout for land tofurther increase its land bank and to cater for futuregrowth.

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UTILITIES DIVISIONWater & Wastewater Solutions

Teknoserv Engineering Sdn. Bhd. (Teknoserv)

Thecompany’srevenuedroppedfromRM29.0millioninyear2018toRM19.2millioninyear2019.However,thecompanyrecordedaturnaroundfromLossBeforeTaxofRM2.1million toProfitBeforeTaxofRM0.39million inyear2019.Thisismainlyduetorecognitionofprofitfromtheongoingprojects.

In year 2019, Teknoserv made its foray into roadconstructionindustrybysecuringaRM31.0millionnewvillage road construction project in Mukah, Sarawakvia strategic partnership with local experienced roadbuilder.Withthisbreakthrough,thecompanyanticipatesto secure road projects in future which will contributepositivelytothecompany.

Asat31December2019,Teknoservhassevenongoingprojects which consist of two water treatment plantprojects, four sewerage related projects and one roadproject. The company order book stands at RM171millionwithunbilledbalanceofRM70million.

With the global outbreak of COVID-19 andMovementControl Order (MCO) implemented by the Malaysiangovernmentatthetimeofreporting,Teknoservforeseesslowprogressandcollection fromtheongoingprojectsin the coming months. It is also anticipated that theconstruction industry will remain sluggish in the nearfuture.

In its effort to cushion the impact caused by thispandemic, Teknoserv will actively participate forwater andwastewater jobs available in themarket viacompetitive tender inorder tocontinueremainrelevantintheindustry.Furthermore,thecompanyisalsoactivelyexploringotherinfrastructureandutilityprojectssuchasroad,bridgeandsolarpowerplantaspartofefforts toexpanditsportfoliointheconstructionindustry.

Whilekeepingbusyontheexecutionofexistingprojectsand outstanding order book, Teknoserv is striving tofurtherexpanditsportfolioparticularly inEastMalaysiaandSEAcountries.Thedivisionisalsoactivelyexploringand anticipating to make its foray into growing SEAcountriesviaBuild,Operate,Transfer(BOT)investmentin the countries’ water and wastewater projects. If theinvestment materialized, it is anticipated to generaterecurrentandstableincometothegroupinnearfuture.

PLANTATION DIVISIONCultivation of Oil Palm

GUH Plantations Sdn. Bhd. (GUH Plantations)

GUH Plantations commits to achieve its target incompleting 2 rounds of harvesting each month andensuringallFreshFruitsBunchesharvestedaresenttotheoilmillwithin 24hours. It is also the commitmentof the division to ensure the quality of the fresh fruitsbunches are good in order to obtain the highest OilExtractionRateofferedbyOilMill.

AsthesellingpriceisdeterminedbyMalaysianPalmOilBoard,thedivisionwillenjoymaximumsellingpriceifitmaintainsmaximumOilExtractionRate.

Anotherfactorwhichcouldaffectitsrevenueisyield.Yield

decreased by 17.3%, comparing to 2018 (2042.75mtversus 2468.89mt), yield per acre per year is 6.84mt.TheyieldisslightlyhigherthanaverageyieldinKedahwhichis6.54mtperacreperyear.

Plantationyieldisdirectlyinfluencedbyweatherandtheoverallrainfallwhichmightaffecttheyield.

Yieldinyear2020isexpectedtobegood.CrudePalmOilpriceclosedatahighofRM3,052.00permtbyendof2019butthepriceisnotsustainableduetoplungeinoilprices.

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MANAGEMENT’SDISCUSSIONANDANALYSIS

ELECTRICAL DIVISIONTrading of Electrical goods and construction materials

GUH Electrical (BW) Sdn. Bhd. (GUH BW)

GUHBWisprincipallyengagedinthetradingofelectricalgoods and buildingmaterials such as switches, wires,roofandfloortiles,paintsandsanitarywarecateringtotheconstructionindustry.

Duringtheyear,thecompanywentthroughachallengingperiodduetoweakmarketsentimentsespeciallyfortheconstructionindustry,therevenuedecreasedfromRM7.6millioninyear2018toRM5.5millioninyear2019.Thedecreasewasmainlyduetolowerrevenuefromelectricalproductsandthephasingoffofbuildingmaterialproductsfrom the company’s revenue stream. However, during

theyear thecompanyhad tried toexpand its rangeofproducts under the house-brand “LEB” to maximizemargin,inadditiontothecurrentproductrangeoffittings,ballasts, industrial fan,LED tube lights,flexiblecables,etc.TheLEBbrandhasexpandedtoincludeLEDfloodlights,LEDbulbs,VDEcables,etc.

Overall 2019 has been a very challenging year forGUHBWwithunpredictablemarketsoutlook.GUHBWforesees that the market will continue to be uncertaintherefore it is relooking on its operations to focus onothercorebusinesswithintheGroup.

FINANCIAL POSITION OF GUH GROUP

Asat31December2019,GUHGroup’stotalassetswereRM667.2million,adropof3.3%fromRM689.7millionatendofthepreviousfinancialyear.GUHGroup’stotalreceivablesdecreasedby12.1%toRM62.6millionasat31December2019fromRM71.2millionatendofthepreviousfinancialyearinlinewithlowerrevenue.GUHGroup’scashandcashequivalentsstoodatRM102.4millionasat31December2019comparedtoRM106.5millionatendofthepreviousfinancialyear.GUHGrouphadusedinternallyandexternallygeneratedfundstofinancepropertydevelopmentprojects,workingcapitalandpurchaseofmachines.

GUHGroup’stotalliabilitiesdecreasedby12.9%toRM160.2millionasat31December2019fromRM184.0millionatendofthepreviousfinancialyear.GUHGroup’stotalpayablesdroppedtoRM77.4millionasat31December2019fromRM89.5millionatendofthepreviousfinancialyearmainlyduetothedecreaseinpurchaseofrawmaterials.Inaddition,GUHGroup’sloansandborrowingsdecreasedtoRM59.3millionasat31December2019fromRM66.8millionatendofthepreviousfinancialyearandconsequently,GUHGroup’sgearingratiodecreasedto11.9%asat31December2019comparedto13.2%atendofthepreviousfinancialyear.

Despitetheslightimprovementinnetassets,GUHGroupregisteredalowernetassetpershareattributabletoownersoftheCompanyofRM1.83asat31December2019comparedtoRM1.84atendofthepreviousfinancialyearmainlyduetodistributionof3,427,000treasurysharesassharedividendsduringyear2019.

Goingforward,GUHGroupcautionsthattheeffectofCOVID-19willremainuncertain.WhilethedisruptionofbusinessactivitiesresultingfromtheglobalsupplyanddemandshocksaswellasMovementControlOrderisexpectedtohaveanegativeimpactonGUHGroup’sperformance,theGroupisunabletoquantifythemagnitudeanddurationofsuchimpactatthisjunctureastheoutbreakcontinuestoprogressandtheconditionsareunpredictable.Nevertheless,GUHGroupwillcontinuetocloselymonitorthedevelopmentofCOVID-19pandemicandemploystrategiesthatenhancereturnsandcostefficienciestoweathertheinevitableslowdownoftheeconomy.

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GUH Holdings BerhadAnnual Report 2019 23GUH Holdings BerhadAnnual Report 2019 23

CORPORATESTRUCTURE

CambodiaUtilitiesPte.Ltd.

GUHCapitalSdn.Bhd.(201501038602(1163923-H))StraitsInternationalEducationGroupSdn.Bhd.(201001032155(916080-M))

GUHInternational(HK)PrivateLimited(1545766)

100% GUHElectronicHoldingsSdn.Bhd.(198701007148(165866-A))100% GUHCircuitIndustry(PG)Sdn.Bhd.(199201000239(231743-T))

100% GUHCircuitIndustry(Suzhou)Co.,Ltd.

100% GrandUnited(BVI)Co.,Ltd.

100% GrandCircuitIndustry(Philippines)Inc.

GUHPropertiesSdn.Bhd.(197801007022(44057-D))

GUHPlantationsSdn.Bhd.(198101010261(76386-W))

GUHLandSdn.Bhd.(201401015894(1091980-T))GUHDevelopmentSdn.Bhd.(198901011135(188437-M))

GUHRealtySdn.Bhd.(197901004288(48565-M))

JeladanSdn.Bhd.(199001003699(195266-U))

GUHAssetHoldingsSdn.Bhd.(199001000030(191588-V))GUHElectrical(BW)Sdn.Bhd.(196901000747(9143-K))

GUHElectrical(KL)Sdn.Bhd.(198201005072(84822-P))

GUHConstructionSdn.Bhd.(198301008270(103524-K))

MalaysianMechanicalEngineeringIndustriesSdn.Bhd.(197901001434(45674-U))

TecnovacMarketingSdn.Bhd.(199501004396(333591-H))

MilanDiamondSdn.Bhd.(201401022658(1098744-D))

GUH HOLDINGS BERHAD(196101000062(4104-W))

ElectronicDivision Properties&PlantationDivision UtilitiesDivision

TeknoservEngineeringSdn.Bhd.(199501008150(337348-H))

GUHWaterPte.Ltd.(1624030)

GUHUtilitiesHoldingsSdn.Bhd.(201101016995(945131-T))(FormerlyknownasGUHWaterHoldingsSdn.Bhd.)

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FINANCIALHIGHLIGHTS

REVENUE (RM’000)

YEAR

360,000

340,000

320,000

300,000

280,000

260,000

240,0002019

284,664

314,841

352,868 349,124

335,990

2015 2016 2017 2018

PROFIT/ (LOSS) BEFORE TAX (RM’000)

YEAR2019

19,000

14,000

9,000

4,000

(1,000)

18,674

(59)

23,216

797

24,000

7,096

2015 2016 2017 2018

PROFIT/ (LOSS) FOR THE FINANCIAL YEAR ATTRIBUTABLE TO OWNERS OF THE COMPANY (RM’000)

YEAR2019

22,000

17,000

12,000

7,000

2,000

(8,000)

(3,000)

9,931

18,878

(7,327)

(2,681)

5,018

2015 2016 2017 2018

TOTAL ASSETS (RM’000)

YEAR2019

800,000

600,000

400,000

200,000

0

614,439663,456 677,345 689,705

667,159

2015 2016 2017 2018

YEAR2019

EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (RM’000)

550,000

500,000

517,940524,795

512,420505,714 506,975

450,0002015 2016 2017 2018

EBITDA (RM’000)

YEAR2019

60,000

40,000

20,000

0

32,882

37,379

14,569

19,465

2015 2016 2017 2018

26,695

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FINANCIALHIGHLIGHTS

^ Adjustedretrospectivelytoreflectthechangesinthenumberofsharesasaresultofthedistributionof1treasuryshareforevery80existingordinarysharesinissueinJanuary2019.

RETURN ON TOTAL EQUITY (%)

4.00

2.80

1.60

(0.80)

0.40

(2.00)

YEAR2019

1.92

0.99

3.60

(1.43)

(0.53)

2015 2016 2017 2018

BASIC EARNINGS/ (LOSS) PER SHARE (SEN)

YEAR

3.76

1.81

6.88

(2.67)

(0.97)^

8.00

4.00

0.00

(4.00) 20192015 2016 2017 2018

NET ASSETS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY (RM)

YEAR2019

2.50

2.00

1.00

0.50

1.50

0.00

1.96 1.991.87 1.84 1.83

2015 2016 2017 2018

GROSS DIVIDEND PER SHARE (SEN)

YEAR2019

6.00

4.00

2.00

0.00

5.00

3.50

0.00 0.00 0.00

2015 2016 2017 2018

LOANS AND BORROWINGS (RM’000)

YEAR2019

80,000

60,000

40,000

20,000

00

16,278

45,241

66,817

60,337

2015 2016 2017 2018

GEARING RATIO (%)

YEAR2019

0

15.00

10.00

5.00

0.00

3.10

8.83

13.21

11.90

2015 2016 2017 2018

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SUSTAINABILITYSTATEMENT

RecognizingthattheCompanyanditsbusinesscannotsustainitselfinthesocietyandenvironmentinwhichitoperates,theBoardofDirectors(“theBoard”)ofGUHHoldingsBerhad(“GUH”orthe“Company”)continuesitseffortinembracingtheenvironmental, socialandgovernancecriteria in itsbusinessoperationsanddevelopments.While theBoard isprimarilyresponsiblefortheGroup’ssustainabilitypracticesandperformance,itisassistedbytheRiskManagement&SustainabilityCommitteewhichinturn,supportedbytheExecutiveDirectorsandallotherSeniorManagement inmanagingsustainability-relatedmatters.

TheRiskManagement&SustainabilityCommitteehasbeensetup toassist theBoardon identification,evaluationandmanagementofthesignificantrisksassociatedtocurrentbusiness,anynewinvestmentsand/ordivestmentsandcontrolresponsibilitieswithappropriateactionplansandensurestheimplementationofappropriatesystemstomanagetheoverallriskexposureoftheGroup.

TheRiskManagement&SustainabilityCommitteeconsistsofthreemembers,allofwhomareNon-ExecutiveDirectors,withamajorityofthembeingIndependentDirectors.Meetingshallbeheldatleastonceayearandmayberequestedasandwhennecessary.

ThemembersoftheRiskManagement&SustainabilityCommitteeplayaleadingroleinsustainabilitymanagementwithin theCompanyand itsGroup.Agoodmixof coordinatingexecutivesandBoard level representatives canbea forcefuldrive togenuineengagementonsustainability issuesamongstsenior leadersof thebusinessaswellasmobilisingthesupportoftheworkforce.

TheRiskManagement&SustainabilityCommitteeisaccountableforthesustainabilitystrategyandperformanceoftheGroup’sbusiness.

DutiesoftheRiskManagement&SustainabilityCommitteeincludeamongothers,thefollowing:

• TooverseetheriskmanagementactivitiesoftheGroupandapproveappropriateriskmanagementproceduresandmeasurementmethodologiesacrosstheorganization;

• ToreviewreportsonoperationalrisksfromalldivisionsoftheGroup;

• Toassesstherisksinnewinvestmentand/ordivestment;

• Toreviewtheeffectivenessofoverallriskmanagementatthedivisionallevel;

• ToreviewandmakerecommendationstotheBoardinrelationtoriskmanagement;

• TomonitortheriskmanagementexposureoftheGroup;

• Torecommendoradviseonsignificantproposedchangestoriskmanagementpoliciesandstrategies;

• Toreviewtogetherwithothercommittees,themanagement,Groupinternalauditandexternalauditors,anysignificantrisksandexposurethatexistandassessthestepsthatmanagementhastakentominimizesuchrisktotheGroup;

• ToassesswhethertheGroup’sriskmanagementandsustainabilitypoliciesarecommunicatedeffectivelytoensuretheyareembeddedaspartoftheGroup’scorporateculture;

• ToaligntheGroup’ssustainabilitystrategywith itscooperatestrategyandvaluestoensurefocusedandeffectiveeffort;

• TooverseemanagementofmaterialsustainabilityissuesthatmayimpactonthesustainabilityorreputationoftheGroup;

• Tomonitor and report to the Board on theGroup’s progress on its sustainability commitments in the context ofeconomic,environmentalandsocial(“EES”);

• ToreviewtheGroup’sannualSustainabilityStatementforsubmissiontotheBoardforapproval.

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SUSTAINABILITYSTATEMENT

Risk Management

RiskmanagementisfirmlyembeddedintheGroup’smanagementsystemandtheBoardbelievesthatriskmanagementis critical in the Group’s sustainability. The Board has, through its Risk Management & Sustainability Committee,establishedasoundriskmanagementandcontrolframeworkthatwasimplementedthroughouttheGroup.TheriskmanagementprocessassiststheGrouptoachieveitsperformanceandprofitabilitytargetsbyprovidingriskinformationtoenablebetterdecisionmaking.TheBoardhastheultimateresponsibilitiesformanagingrisksandinternalcontrolsassociatedwiththeoperationsofeachdivisionintheGroup.

Governance

TheBoardisthehighestgoverningbodyofGUHandisresponsiblefordeterminingstrategicdirectionoftheGroup.TheBoardofDirectorsappointedarewithdiversifiedskillsandprofessionalismfromdifferentareastothetypeofbusinesstheGroupisinvolvedin.Currently,theBoardconsistsofninemembers,comprisingtheExecutiveChairman,theCEO/GroupManagingDirector,twoNon-ExecutiveDirectorsandfiveIndependentNon-ExecutiveDirectors.

TheBoardhastakenstepstointegratesustainabilityissuesaspartofitsstrategicformulation.TheBoardsupportedbyCEO/GroupMD,COOandGeneralManagers,enablestheBoardtoassessandensurethesustainabilitygovernanceisstructuredandfunctioningthroughthevariouslevelsofmanagement.

Sustainability

The Board considers sustainable business utmost important due to the rapid changes of external environment,customers, regulators and investor requirements. By understanding long-term trends, theGroup can respond andrealisenewopportunities.TheCompanyanditsGroupwillconsistentlyundertaketomanagefuturecustomerneeds,respondtoregulatorsfasterthancompetitors,buildingreputationsandmotivatingemployeesofwhichplaysabigpartincreatingacompellingbusinesscase.

GUH’s effort inmanaging sustainability in business by steering its companies and divisions and having taken intoaccountsocial,economicandenvironmentalimpact.Thesustainabilityinitiativesareshownasfollows:

(a) marketplace(b) workplace(c) environment(d) community

SustainabilityDimension

SustainabilityStrategy

SustainabilityInitiativesSustainabilityMeasures(ExampleofPerformance

Indicators)Benefits

Marketplace

HighStandardofSuppliers

• Encourageandinfluencesupplierstoactinasustainablemanneracrossvaluechain

• Responsibleandsustainablesourcing

• Supplychainmonitoring

• Numberofsupplieraudits

• Percentageofsuppliersmeetingenvironmentalcriteria

• Adoptsustainabilitypracticestodifferentiatefromcompetitors

• Newbusinessopportunitiesformore“green”products

• Increaseincustomerloyaltyandtrusts

• Complywithregulations

Goodcustomerrelationshipmanagement

• Encourageandinfluencecustomerstoactonasustainablemanneracrossvaluechain

• Offermoresustainableproductsandservicestocustomers

• Customersatisfactionresults

• Reductioninnumberofcustomercomplaints

• Brandmanagement

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SUSTAINABILITYSTATEMENT

SustainabilityDimension

SustainabilityStrategy

SustainabilityInitiativesSustainabilityMeasures(ExampleofPerformance

Indicators)Benefits

Corporategovernance

• Nocorruption• Ethicalmarketing• Fair-trade• Complywithgovernmentrulesandregulations

• Avoidfacilitationpayments

• Numberoffines/penaltiesfromauthorities

• Litigationrisks• Boardindependence

• Improveaccesstocapitalwherefinancialinstitutionsandinvestorsarelookingintofinancingmoreenvironmentallyandsociallyacceptableprojectsandbusinesses

Economicproductivity

• Efficientpricingandincentives

• Productionefficiency

• Budgetvsactualexpenses

• Efficientpricing• Efficientprioritizationofproductionschedule

Workplace

Safety,securityandhealth

• Minimizehealthandsafetyrisksandpromotephysicalfitness

• Numberofworkplaceinjuries/illness

• Humanexposuretoharmfulpollutions

• Safetypracticesandtargets

• Increaseemployeeengagement

• Attractandretainemployees

• Fostergreaterproductivity

Operationalefficiency

• Maximizeefficiencyinproductionofgoodsandservices

• Efficientoperationsandassetmanagementmaximizedcostefficiency

• QualityKPIs• Rejectrates• Assetusage

Standardsinrecruitmentanddevelopment

• Maintainhighstandardsofrecruitmentanddevelopment

• Talentattraction,retentionanddevelopment

• Equalopportunityemployment

• Averagetraininghoursperemployee

• Percentageoffemalesinseniormanagement

Retentionofemployees

• Goodhealthandsafety

• Performancebase• Goodworkingconditions

• Losttimeinjuries• Employeecompensation• Benefits• Employeeturnover• NumberofdismissalduetoviolationtoCompanypolicies

Environment

Pollutionreduction

• Reduceair,noiseandwaterpollutions

• Efficientwastemanagement

• Environmentalmanagementpolicy

• Managementofusedoil,leaksandwastewater

Resourceconservation

• Reduceandefficientusageofscarceresources,e.g.electricity,waterandrawmaterials

• Totalenergyconsumption

• Totalwaterconsumption• Rawmaterialconsumption

• Wasterecycled

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SUSTAINABILITYSTATEMENT

SustainabilityDimension

SustainabilityStrategy SustainabilityInitiatives

SustainabilityMeasures(ExampleofPerformance

Indicators)Benefits

Going“Green”

• 3R’s(Reduce,Reuse&Recycle)

• Preventwasteratherthantotreatorcleanupwasteafteritiscreated

• 3R’sprogramme• Recyclingpractices

• Maybeeligiblefortaxdeductions,taxexemptionsandothertaxbenefits,dependingonthequalificationcriteria

• Increasecostsavings

Energyandefficiency

• Properwastedisposal• Operationaleco-efficiency

• Minimizeenergycosts

• Totaldischargedwaterrecycled

• Totalenergysavingsmachinery/equipmentusage

Climatestability

• Reduceglobalwarmingemissions

• Mitigateclimatechangeimpact

• Emissionofglobalpollutants

• Sustainablepalmoil

Community

Communitycohesion

• Donationofmoneyandtime

• Totalcommunityinvestment(RM)

• Numberofcommunityinitiatives

• Numberofhoursspentoncommunityinitiatives • Improve

communityunderstandingofGUH

Socialintegrity

• Supporteducation

Economicdevelopment

• Enhanceemploymentandbusinessactivities

• Accesstoemploymentopportunities

Culturalheritagepreservation

• Respectandprotectculturalheritage

• Supportculturalactivities

• Organiseculturalactivities

• Responsivetotraditionalcommunities

Insummary,thesustainabilitymanagementoftheGrouphasbeendriventocontinuefocusingontheareasacrossthefoursectionsnamelythemarketplace,theworkplace,theenvironmentandthecommunity.

Care for the Marketplace

talentandtakeinterestinthecontinuedlivelihoodofitsemployees.

GUH Group implements and upholds high standarddealing with the suppliers and vendors. This is in linewiththemanagement’sphilosophytoreflect its internalvaluesandtheexpectationsofshareholders,customers,authorities and the community.GUHbelieves that it ismore productive and effective if business relationshipsarebuiltontrust,mutualrespectandcommonethics.Thequalificationsandcredentialsarecarefullyvettedbeforebeing admitted into the list of qualified suppliers andvendors. Aspart of theGroup’s contributions towardsthelocalbusinesscommunity,suppliesandservicesarefirst sourced locally including high technology supplieslikedelicatechemicalcompoundswhereavailable.

GUH Circuit Industry (PG) Sdn. Bhd. (“GUH PG”),the Penang sited manufacturing plant of GUH GroupmanufacturesandsellshighendprecisionPrintedCircuitBoards (PCBs) to renownedelectronicsmanufacturersin thedomainofautomotive infotainment systems,air-conditioners,electronicpianos,musicalinstrumentsandhigh end audio/ receivers. The factory’smainmarketsareMalaysia,Thailand,Indonesia,Japan,VietnamandEurope.GUHPGplacesthehiringofhumanresourcesfor management and engineering talent from localuniversities, colleges and vocational institutes as itspriority.Asaresponsiblelocalcompanyitaspirestodomore than its responsibilitiesandcommitmentofbeingaqualityPCBsmanufacturer. Thus, to reciprocate thesupportofthelocalfraternity,GUHendeavourstoimprovethe knowledge of the community, nurture engineering

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SUSTAINABILITYSTATEMENT

Thecontributionstowardsthelocalsupplyfraternityalsoincludecascadingdownknowledgeandtechnologythathavebeengatheredthroughouttheyearstodevelopmajorlocalsuppliersinallthedivisions.Supportandtechnologytransfer to local tieronesuppliersandvendors includeplantandprojectaudits,trainingontheimportantcriteriaofbeingpartof thechainof the IATF16949, reviewingtheir process controls, quality monitoring, analyticaltechniques,storageandhandlingprocesses.Suppliers’keypersonneltrainingprogrammesareinplacefortheElectronicDivision,wherenewlyrecruitedengineersarestationedandtrainedinthefactoryforaperiodof timeto ensure the link of supplies quality, process controlandkeymonitorsarealignedbetweenthedivisionandimportant local suppliers. The suppliers’ and vendors’performance such as compliance with specification,commercial competitiveness, timely deliveries andafter sales are carefully and periodically reviewed bythe respective divisions to ensure compliancewith theGroup’srequirementsandpolicies.

In technologycontribution to the localcommunityGUHdevelopsproductsandservices,offeringadvancedesignknowledgeandgoodvalueinpricing,qualitysafetyandenvironmenttoensurefuturesustainmentofthebusinessandtheindustrialzonewhereitoperatesin.Substantialinvestments in its PCBs manufacturing plant wasmadefrom2008to2019 inmachinery, technologyandautomationandthiscontributedsignificantlytotechnicaladvancementandcapabilitiesofthelocalmanufacturingfraternity.Asseenintheactions,oneofthecommitmentstowards society is to contribute as much as possibletowards buildingPenang as amarket place renownedfortalentandsuperiortechnologyproducts.

TheGroup’smanufacturingplantinChina,GUHCircuitIndustry(SZ)Co.,Ltd.(“GUHSZ”),isalsocommittedtoupholding theGUHcorporatemissionofbenefiting the

communityitoperates.Withover20years’experienceinthedynamicelectronicsindustry,GUHSZisreputedtobeoneofthetrustedPCBmanufacturersinthemarketwith the stability of management and operation. GUHSZ is fullyutilizing itsexistingandnewly-addedassetsto continue functioning profitability. GUH SZ aims forlong-termprofitabilitybyadoptingandimplementingthevisionarystrategy, fullyutilizing theavailable resourcesand the enormous support received from the seniorManagement team. Besides, GUH SZ is focusing onniche products, such as medical, home appliances,electroniccomponents,officeequipmentandautomotiverelatedproductswhicharecompetitiveinthemarketandbyprovidinga“One-StopSolution”businesstocustomerswith various types of PCBs. The development andapplication of 5G communication, electronic vehicles,intelligentequipment,roboticproductsandsoforthhasbecomemoreandmoreextensivewhichmayleadtotheexpandingdemandofPCBsandGUHSZisexpectedtoinvolveandgainsomemarketshare.

BothmanufacturingcompaniespledgeitsfullcommitmenttothefourimportantbusinesssustainabilityprinciplesofCustomerSatisfaction,BestProductQuality,SustainableSupplyandManufacturingandResponsibleProcurementwiththefundamentalcommitmentthatconductbusinessthrough the embrace of ensuring the environment isprotected and not harmed, that business is conductedwithoutbreachofrulesandlawsandthatthesafetyandwellbeingofthepeopleissafeguarded.

OtherDivisionsthoughsmallerinoperations,theprincipleofhiringisofthesamepracticei.e.fromlocalcommunityto support domestic workforce so that not dependentontheforeignworkers.GUHbelievessustainablelocalworkforce can bring positive contribution in humanresourcemanagementandlowerunemploymentrateinthecountry.

Care for the Workplace

Enshrined as its second mission of the Companyis “maximizing the interest for its employees”. GUHacknowledges that without the full commitment of itsemployees, it is not possible to advance further in themodernworld.GUHunderstandsthatpeoplearesocialbeingsandgoodhumanrelationshipsmatterstobringoutthebestresultsinperformances.FullheartedsupportbyManagementandits leadersisvitaldriverofemployeeengagementandwithtrainingsformanagerstoenhancetheirabilities.GUHinsistsmanagersprovidethesupportneeded to do one’s job right the first time and foremployeestotakeprideinhavingajobwelldoneasanencouragementtogotheextramile.GUHendeavourstobuildacaringworkplaceenvironmentofunderstanding,

empathy, community, teamworkandsupport tonurturepositiverelationshipsandinreturntonurtureaninternalentrepreneur and innovative spirit. In order to achievethis, GUH endeavours to provide conducive workingenvironment,provide training,developmentandcareeradvancement opportunities and to reward excellentemployees. Annual motivational programmes arestructuredintothethreedomainsof:

i. Socialandteambuildingevents,ii. Training,developmentandcareeradvancement,iii. Improvementstotheworkplacewiththeobjectiveof

creatingaconduciveenvironment.

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SUSTAINABILITYSTATEMENT

i. Social and Team Building Events:

In order to get its people to embrace the vision andmission, theGrouporganisessocialand teambuildingevents to “soft sell” the spirit of belonging.TheGrouporganised indoor and outdoor activities such asbowling, yoga classes, futsal, badminton, fun ride andteam building to reinforce team spirit in the company.Promoting teamwork and adding festive cheers in theoffice,seasonalfestivelunchgatheringsarealsobeingorganized. TheManagement, Executive andTechnicalTeam look forward to theNewYeargatheringwith theCEO/Group Managing Director as a highlight of thesocialevents.

ii. Training, Development and Career Advancement:

GUH Group aims to recruit people from diversebackgrounds as well as to build a gender balancedorganization in the quest of equal opportunities. TheGroup isconstantlyon the lookout forpotentialpeopletobepromoted internallyandwithasystematic reviewprocedure that recognises people performances andrewards accordingly. Nevertheless, GUH regardstraining as a priority of growth and knowledge driverto the Group and its continuous training programmesapply to forall itsemployeeswithin theGroup.ProperandplannedscheduledtrainingsarecarriedoutacrossbothManagementandOperationalleveltokeepupwiththe latest technologyandmanagementadvancements.Trainingprogrammesarestructuredsuchthatitincludestechnical as well as leadership development aspectsfromtheGAPanalysisandtailoredwiththeconceptofnurturingtalentforthecompany’ssustainability.

TrainingprogrammesresultsofGUHPG:

External Training (inclusive of in-house training conducted by External Trainers):

Training participants covered the scope of Managers,Executives, Engineers, Supervisors, Technicians andSupportStaff.Actual traininghoursrecordedwas2888hours against theTrainingNeedsAnalysis (TNA) planof3000hourswithaneffectiveattendanceachievementof 96.2%. The training sessions conducted coveredManagement Excellence Practice, Leadership Skills,EfficientEnergyManagement,PlantSafetyImperatives,Environment Protection Imperatives, Purchasing andSupplierManagementTowardsWin-Win,ManufacturingBest Practices, Poka-Yokes, Total ProductiveMaintenance(TPM)MeasurementandCalibration,IATFinternalAuditorsTraining,ProactiveQualityImprovementandTotalQualityManagement.

Internal Training (conducted by Engineers and Managers):

Trainingparticipantscoveredthefactory’soperationsandproductionemployees.Theactualtraininghoursrecordedwas 5520 hours against the Training Needs Analysis(TNA)planof5800hourswithaneffectiveattendanceachievement of 95.2%. The training sessions coveredPCB Process Knowledge, Understanding StandardOperationProcedures,HowtoReadWeight,Pressure,Length,LightSpectrum,Temperature,Humidity,ControlPlansandCriticalParameters,AndonsandPoka-yokes,SimpleCalculations,QualityImperatives,DisciplineandHealth.

Training Conducted by Consultant from Japan:

TrainingparticipantscoveredallEngineersandTechnicalemployees.Theactualtraininghoursrecordedwas2000hours against theTrainingNeedsAnalysis (TNA) planof 2000 hours with an effective attendance recordedas 100%. The training covered critical PCB ProcessAreas,CorrectHandlingMethods,DustControl,ProcessParametersControl andAnalysisMethodology, FailureMode and Effect Analysis, Material Characteristics,Chemical Characteristics, Electro-Plating Inter-

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SUSTAINABILITYSTATEMENT

by the newly upgraded waste water systems beforebeing discharged. The reports from external certifiedbodymonitoringthedischargesshowedgoodandstableperformance in2019.Bothof theplants’performanceson environment management is reviewed daily bytop management and also ensures a professionalenvironment management team is in place to ensurestrict compliance to the environment regulations.Allemployees in themanufacturing plant are educated toparticipate in the environment monitoring process byreporting any unusual sight to their superior.GUHPGis certified to ISO14001 since year 2004 which is theplatformforenvironmentalprotection,managementandreview.

GUHSZwasgrantedwiththeCertificateforEnvironmentManagement System (ISO14001:2004) on 18 March2019 by Certification and Accreditation Administrativeas ithas inplaceasoundenvironmentalmanagementsystem.Thedivisionwasfurtherawardedwithpollutantsdischarge permit on 20November 2019 issuedby theEnvironmentalProtectionBureauofSuzhouNewDistrictandmonitoredbyMinistryofEnvironmentalProtection,China.GUHSZwillcontinuouslyprovidetheappropriatetrainingandinformationtoitsemployeestoaidthemincomplying with the various legal requirements. Otherthan in-house training provided, the employees are

Care for the Environment

Correlations, Quality Control, Ishikawa Methodology,PrecisionandDensePCBRequirementsandMulti-LayerPCBDesignTrends.

iii. Conducive Working Environment:

TheGroupunderstandsthatitsemployeesspendmostoftheirtimeatworkandhencecreatesafeelingofhomeforthemisimportantforbusinesssustainabilitywhichisinlinewiththetopdrivenphilosophythat“EmployeesAretheBestAssets”.Effortstowardscreatingthisambienceincludeasubsidizedcanteenandacomfortablepantryin the office equipped with essential facilities. Otheramenities include air-conditioned prayer rooms forMuslims,propernursingroom,restareawithcoffeeandcanneddrinksvendingmachineswithsubsidizedprices,contractwith a bank to place anATM in the premisesandashelteredandsecuredmotorcycleparkingbay.Asapriorityproject in2020,GUHwill furtherupgrade thecanteentoarestaurantclassenvironment.Chinaplantemployees enjoy fully subsidized canteen, free mealsandlodgingsincompanyhostels.EveryeffortisplacedbyGUHSZinschedulingproductionruntimetoensureworkers can return home for long holidays during theChineseNewYearseason.TheGroup iscommitted tobuilding an environment of happiness, understanding

and a community feeling that supports and nurturespositiverelationships.

Genderequalityintheworkplaceisoftenpracticedandthere is no racial bias in employment or recruitmentwithin the group. All Divisions have fair and equaltreatmentpoliciesfortheemployeesirrespectiveofraceand gender. Opportunity is given to all employees astrainingprogrammesareprovidedforthemtolearnanddevelopnewandvaluableskills.AllDivisionsprovidefair,inclusiveandsafeworkplacetosupport theemployeesfor theenhancementofworkingperformance.Besides,exceptionalrewardsincludingcompetitivesalary,careeradvancementandcontinuous learningaregiven to theentireworkforceoftheGroup.

In order to have a proper system and task orientedapproachtoenergyefficiency,afulltimeEnergyManagercertified by Suruhanjaya Tenaga to implement energysavingprojectsaspartofitseffortsandresponsibilityinreducing carbon footprint is recruited in the ElectronicDivision of Penang. Noteworthy projects recordedinclude formal training operation employees to detectairleaksandreduceaircompressorruntimereduction,redesign constant runningmachines to detect work inprogressandprogrammesrun-stopsystems,modifyinganalogcontrolledaircompressorstoinvertertechnology,control office air conditioners to a comfortable 24oClevel,commissioningthenewERPsystemforaccurateschedulingandproductionefficiencytoeliminatewasteand idle time. GUH PG reported significant electricityand water usage savings against its output in metersquares.

BothGUHPG andGUHSZ are certified to the latestenvironmental management system and all airdischarges are cleansed with gas scrubbers equippedwithwatersprayscontainingneutralizerchemicalsbeforedischarging. The air scrubbers are in turn monitoredby an external certified body.Air scrubbers performedwell in accordance to the CleanAir Regulations 1978with recorded results thatarebetter than thespecifiedpassingstandard.Waterdischargeswhicharecleansed

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Care for the Community

GUHbelievesthatcaringforthecommunityisaprinciplethateveryresponsibleorganisationshouldhaveandthatcontinualeducationofitspeopleinallaspectsisstillthebestwaytospreadthecultureofcaring.GUHupholdsthecommitment thateverystaff ithirescontributesnotonlysustenancetotheirimmediatefamilybutalsocarrieshometherightcultureofdiligenceanddeterminationtosucceedandthatthisgoodmindsetisbeingproliferatedintosociety.TheGroup’strainingprogrammesistailoredon technical and knowledge aspect as well as themotivationaspect.GUHGroupproudlyacclaims in theloyaltyindexthatmanyofitsstaffhasbeenworkingwiththeGroupformorethan20yearsandthusisevidentialtotheprinciplethat“PeoplearetheBestAssets”.GUH

Grouptakesprideonbeingabletoidentify,train,motivateand create leaders from the high performance groupand also able to motivate and transform people fromlackadaisical tobeingexcellentperformers.TheGroupmaintainsanexemplarytrackrecordofpayingincentivesand bonus based on company, team and individualperformances. GUH continues to hire fresh graduatesaspart of its commitment towards society and to trainand grow local talent.The Group practices a properperformancereviewsystemforitsstaffinordertorewardpeoplewhohavecontributed tocompanyperformanceandforwardbusinesssustainability.

GUH is committed to continue its contributions andsponsorships towards community through financialassistance to various organizations, schools, NGOs,religious organizations, dialysis centers, associationsand individuals invariousstatesofMalaysia.GUHwillunceasingly do its part to contribute to society as itbelievesgivingbackisamongstthemostimportantandvaluableactanorganizationcando.

SUSTAINABILITYSTATEMENT

activelyattendingthetrainingprogrammesorganizedbytheEnvironmentalProtectionBureauonaregularbasis.

Beyondthat,themanagementteamofGUHSZhasputineffort to reduce theusageofelectricityandwater inorder tominimize the release ofwaste carbon dioxideinto theairandsafeguard thenatural resourcesof theearth. Various action plans are being implemented tofurther control the usage of utilities such as shuttingdownunnecessarymachinesduringoff-peakproduction,controltheusageofair-conditionerduringthespringandautumnseasonandwaterconsumptionondailybasis.All water valves, piping and relevant water equipmentarecheckedonaweeklybasistoensuregoodrunningconditionandnoleakageoccurs.

Occupational health and safety is another priorityaspect of the Group. Both manufacturing plants havemandatory Personal Protective Equipment regulationsandcompulsorytrainingofusagetoprotecttheworkers.TheassuranceofpeopleadheringtothePPEandSafetyRulesisdrivenbyinternalroadshows,trainingandstrictdisciplinarymeasurestaken.GUHPGhasapermanentERTTeamconsistingofvolunteersfromeachandeverydepartment who undergo training and retraining byBomba and Penyelamat department periodically. The

ElectronicDivisionofPenangstagesplantwideinternalevacuation and fire drill twice a year togetherwith thesame government body. The other divisions, namelyProperties and Plantations are provided and equippedwith safety tools and equipment. Apart from the 3Rpracticeof reduce, reuseand recycle, openburning isprohibitedintheGroupandallDivisionscomplystrictlywith this policy. On 11 February 2020, GUH SZ wasgranted with “Work Safety Standardization” certificateissued by the StateAdministration of Work Safety asthe division passed the health and safety examinationfromtherelevantauthorities.Thisdivisionwillcontinueto enhance the health and safety in the workplace inorder to safeguard thewelfare of its stakeholders andimplementing further preventive measures which arebeyondtherequirementsstatedbylaw.

TheGroupstrivestoachievezerorateoflost-worktimeinjuries and has established “zero serious accident”targetforthefinancialyearunderreview.TheGroupispleasedtorecordzerofatalityandzeroseriousaccidentsfrom its business operations as well as Zero burningpolicy being practiced at project site and at plantationfarming in order to achieve zero emissions.Corporatepoliciesarereviewedandchangedifrequiredtobenefittheenvironment.

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CORPORATEGOVERNANCEOVERVIEWSTATEMENT

TheBoardofDirectors (“theBoard”)ofGUHHoldingsBerhad (“GUH”or “theCompany”) iscommitted toembraceandpursueastrategyofbestpracticeofcorporategovernance inorder toexcelandcreatesharedvalue forall itsstakeholders. The Board firmly believes that excellence in corporate governance remains the commitment of theCompanyanditssubsidiaries(“Group”).ItisimportantfortheGrouptostrictlycomplyandadheretogoodcorporategovernancesuchasintegrity,transparency;accountabilityandresponsiblebusinessconduct,asthebasisofhowtodobusinesssoastobuildasustainablefuturethatbringinpositivebenefitsforvaluecreation.

The Board is pleased to present this Corporate GovernanceOverview Statement for the financial year ended 31December2019thatsummarizedtheoverviewapplicationandcorporategovernancepracticeswithreferencetothethree(3)principlesassetoutintheMalaysianCodeonCorporateGovernance(MCCG)underthestewardshipoftheBoard:

(1)PrincipleA:BoardLeadershipandEffectiveness;(2)PrincipleB:EffectiveAuditandRiskManagement;(3)PrincipleC:IntegrityinCorporateReportingandMeaningfulRelationshipwithStakeholders. TheCorporateGovernanceOverviewStatementshouldberead in tandemwith theotherStatements in theAnnualReport2019,i.e.theSustainabilityStatement,StatementonRiskManagementandInternalControlandAuditCommitteeReport.ItisalsoaugmentedwithaCorporateGovernanceReportoftheCompanywhichispublishedontheCompany’swebsiteatwww.guh.com.my;basedonaprescribed formatasspecified inParagraph15.25(2)of theMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(ListingRequirements)soastoprovidedetailedinformationontheapplicationoftheGroup’scorporategovernancepracticeswithregardtoMCCG.

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS

BOARD’S ROLES AND RESPONSIBILITIES

TheCompanyisheadedbyaBoard,whichassumesresponsibility for theCompany’s leadershipandiscollectivelyresponsibleformeetingtheobjectivesandgoalsoftheCompanyandtheGroup.TheBoardconsistsofnine(9)membersofwhomaretheExecutiveChairman,theChiefExecutiveOfficer/GroupManagingDirector(“CEO/GroupMD”),two(2)Non-ExecutiveDirectorsandfive(5)IndependentNon-ExecutiveDirectors.

TheBoardensuresthatalltheDirectorsareawareoftheirrolesandresponsibilitiesasoutlinedbytheBoardCharterwhichalsoservesasasourceofreferencetoallstakeholders.

TheBoardCharterformsanintegralpartoftheDirectorsdutiesandresponsibilitiesandalsoservesasasourceofreferencefortheBoardmemberstoactonbehalfoftheCompanytoensurethattheDirectorsconductinthemannerthattheprinciplesandpracticesofgoodcorporategovernanceareapplied.

TheBoardCharterisreviewedannuallywithitslatestupdatebeingmadeinNovember2019.

ThedetailsoftheBoardCharterareavailableforreferenceatwww.guh.com.my.

BoardCharterclearlydefinestheresponsibilitiesanddutiesoftheBoard.

TheBoard not only sets the strategic direction but also oversees the business conduct to ensure theGroup is incompliancewithrulesandregulations,lawsandrequirementsandupholdingofethicalvalues.

OverviewoftheRolesontheBoardisasfollows:

Role Key ResponsibilitiesExecutive ChairmanTanSriDato’SeriH’ngBokSan

TheExecutiveChairmanoftheBoardistoprovideleadershipsothattheBoardcanperformitsresponsibilitiesefficientlyandtopresideovermeetingsofDirectorsandensuretheBoardacceptsfullshareofresponsibilitiesofgovernance.

CEO/Group MDDatukSeriKennethH’ngBakTee

The CEO/Group MD assumes overall responsibilities for the execution ofthe Group’s strategies in line with the Board’s direction, oversees day to dayoperations of the Group and drives the Group’s businesses and performancetowardsachievingthevisionandgoalssetbytheBoard.

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CORPORATEGOVERNANCEOVERVIEWSTATEMENT

Senior Independent Non-Executive DirectorMr.ChewHockLin

TheSenior IndependentNon-ExecutiveDirector acts as a point of contact forshareholdersandotherstakeholderstowhomqueriesorconcernsrelatingtotheGroupmaybeconveyed,healsoactsasasoundingBoardfortheChairmanandanintermediaryforotherDirectorswhennecessary.

Non-Executive Directors Non-ExecutiveDirectors(bothIndependentandNon-Independent)neitherinvolveindaytodayoperationsnorparticipatedirectlyinthebusinessdealings.Instead,theymonitorandsuperviseManagement’sconductinrunningthebusinesswhilebringing theirexternalperspectiveandwisdomtobearon thedecisionmakingprocess.

AllDirectorsshouldobjectivelydischargetheirdutiesandresponsibilitiesatalltimestoupholdthebestinterestoftheCompany.EveryDirectorismindfulofitsownresponsibilityasaDirectorandoftheconduct,businessactivitiesanddevelopmentoftheCompany.Indischargingitsresponsibilities,theBoardisalwaysmindfultoactingoodfaithandtransparentandexercisetheirbasicdutiesofgoodmanagementtoensuretheGroupiscommittedtoacultureofhighcorporatecomplianceandhighethicalbehavior.Asthehigheststandardofintegrityisexpectedfromallofitsemployees,includingtheManagementuptotheBoardlevel,theGrouptakesaseriousviewonanymisconductbyitsemployees,ManagementandDirectors,inparticularwithrespecttotheirobligationstotheGroup’sinterests.IncontinuepursuingexcellenceincorporategovernancewithintheGroup,theCompanyhasinternaldocumentssuchasCodeofEthicsandCodeofConducttobemadeavailableandhavebeenpublishedontheCompany’swebsiteatwww.guh.com.my.ThecodeservesasadocumentationwhichismeanttobeareferencepointfortheDirectors,ManagementandemployeesoftheGrouptoenhancethestandardofcorporategovernanceandindividualbehaviorindoingbusinessinamannerthatisefficient,ethicalandfair.

TheBoard iscognizantof the importanceofwhistleblowingsystem.Therefore,whistleblowingchannelshavebeenestablishedtohelpstakeholdersraiseconcerns,withoutfearofretaliation,onanywrongdoingthattheymayobserveintheCompany.TheWhistleblowingPolicyandProceduresoftheCompanyhavebeensetupandshallbeapplicabletoallemployeesofGUH,whichincludeitslocalandoverseaswholly-ownedsubsidiariesandsub-subsidiaries.TheBoardfirmlyacknowledgesthatawhistleblowingsystemmaystrengthenandsupportgoodmanagementandinthemeantimedemonstratesaccountability,providesgoodriskmanagementaswellassoundcorporategovernancepractices.

TheBoardcomprisesamajorityof IndependentDirectors.Though theChairman isnotaNon-ExecutiveDirector, itisof theBoard’sopinion that theExecutiveChairman is thesingle largest shareholderand there is theadvantageofshareholder leadershipandanaturalalignmentof interest. Inaddition, theExecutiveChairman is the founderoftheGroupwithextensiveknowledgeandexperienceandhe iscompetent to lead theGroup towardsachieving thehighestlevelofinteresttotheCompanyandallitsstakeholders.Inrespectofpotentialconflictsofinterest,theBoardiscomfortablethatthereisnoundueriskinvolvedasallrelatedpartytransactionsaredisclosedandstrictlydealtwithinaccordancewiththeListingRequirements.TheBoardisalwaysmindfulofthepotentialconflictofinterestthatmayariseineachtransaction,inwhichcase,interestedDirectorsareabstainedfromdecisionmaking.

TheBoard is responsible for thecorporategovernancepracticesgoverns theaffairsof theGrouponbehalf of theshareholdersandretainsfullandeffectivecontrolovertheGroup.

Inexecutionofitsdutiesandresponsibilities,theBoardisassistedbyvariousCommittees.Four(4)BoardCommitteeshavebeenestablishedtoassisttheBoardinthedischargeofitsstatutoryandfiduciaryresponsibilities.EachCommitteehasitsownfunctionsandtermsofreferencewhichhavebeenclearlydefinedbytheBoard.ThetermsofreferenceofalltheBoardCommitteesarereviewedandupdatedregularlytoensurethelatestrequirementsoftheMCCGandListingRequirementsareincorporated.EachCommitteereportsitsrecommendationsanddecisionstotheBoardforapproval.

OverviewoftheroleofeachCommitteeisasfollows:

Board Committee RoleAudit Committee OverseestheCompany’sfinancialreportingprocessandpracticeandreviewsthe

resultsofinternalandexternalauditactivitiesandtoensurecompliancewithallapplicableaccountingstandardsandanyotherrelevantregulatoryauthorities.

Refer Audit Committee Report on pages 49 to 52 for more details on key activities.

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Risk Management & Sustainability Committee

Identifies, evaluates and manages the significant risks associated to currentbusiness,anynewinvestmentand/ordivestmentandcontrolresponsibilitieswithappropriateactionplanandensurestheimplementationofappropriatesystemstomanagetheoverallriskexposureoftheGroup.

Fromtheperspectiveofsustainability,identifyandmanagenon-financialissues,greaterattentionwillbegiventohowbusinessesimpacttheeconomy,environmentandsocialrisksandopportunitiesalongsidefinancialimplication.

Refer Statement on Risk Management and Internal Control on pages 46 to 48 for more details.

Nomination Committee Reviews annually the required mix of skills, experience and other qualitiesincludingcorecompetenciesofindividualDirector,evaluatestheassessmentofeffectivenessoftheBoardasawhole,andalsoallotherCommitteesappointedbytheBoard.

Remuneration Committee ReviewsremunerationofExecutiveDirectors.

TheCompanyhastwo(2)suitablyqualifiedCompanySecretariestodischargetheirdutiesandresponsibilitiesandassisttheBoardindrawingupandcirculatingtheagendaandnoticeofmeetingstogetherwiththesupportingdocumentationtotheCommitteemembers.TheCompanySecretaryshallalsoberesponsibletorecord,maintainandcirculatetheminutesofthemeetingsoftheBoardCommitteestoallothermembersoftheBoard.TheCompanySecretarieshadandwillcontinuetoconstantlykeepthemselvesabreastonmattersconcerningcompanylaw,thecapitalmarket,corporategovernanceandotherrelevantmatters;andwithchangesintheregulatoryenvironmentthroughcontinuoustrainingandindustryupdates.

ThereisacleardivisionofresponsibilitiesbetweentheExecutiveChairmanandtheCEO/GroupMD.ThedistinctionofthetwopositionsintheCompanypromotesaccountabilityandfacilitatesdivisionofresponsibilitiessothatManagementdecisionsaremadeinordertoensureindependence.ThedivisionofresponsibilitiesissetoutintheCompany’sBoardCharter.

TanSriDato’SeriH’ngBokSan,theExecutiveChairmanisprimarilyresponsibleforrunningtheBoardandensuresthattheBoardacceptsfullshareofresponsibilitiesofgovernance.Heisalsoresponsiblefortheintegrityandeffectivenessof the relationshipbetween the Independentand theNon-IndependentDirectors.BoardCharterclearlydefines theresponsibilitiesoftheExecutiveChairman.

Duringthefinancialyearended2019,TanSriDato’SeriH’ngBokSanhad:

• Provided leadership to the Boardwithout limiting the principle of collective responsibility formaking the Board’sdecision;

• ChairedandledalltheBoardmeetingsandencouragedactiveparticipationinthediscussions;• ReviewedtheminutesoftheBoardmeetings.

DatukSeriKennethH’ngBakTee,theCEO/GroupMDisresponsibleforthedaytodayoperationsoftheGroup.Inaddition,hisresponsibilitiesincludeamongothers,reporting,clarifyingandcommunicatingmattersrelatingtothedailyoperationstotheBoardandtoensurethebusiness;policiesandstrategiesformulatedbytheBoardareimplementedeffectivelywith theassistance from theManagement team.BoardCharterclearlydefines the responsibilitiesof theCEO/GroupMD.

Thepresenceof IndependentDirectorswhich comprisemajority of theBoardmembers is sufficient to provide thenecessarychecksandbalancesonthedecisionmakingprocessoftheBoard.TheydonotparticipateinthedaytodaymanagementoftheGroupanddonotengageinanybusinessdealingsorotherrelationshipwithintheGroup.TheypossessintegrityandextensiveexperiencetoprovideindependentandunbiasedviewsatBoard’sdeliberationsandfair judgment tosafeguardthe interestof theCompany,shareholdersandthestakeholders.TheBoardhasspecificfunctionsreservedfortheBoardandthosedelegatedtotheManagementoftheCompanytoensureaccountabilityisenhanced.

ThecompositionandsizeoftheBoardisreviewedfromtimetotimeandassessedannuallytoensureitsappropriatenessandeffectiveness.ThoughtheBoardbelievesthattenureshouldnotformpartoftheindependenceassessmentcriteria,theBoardpracticesandundertakesannualassessmentof its IndependentDirectorsbasedon theexperienceandpersonalqualitiesmoreparticularlyintegrityandobjectivityofeachindividualDirectortoensurethecurrentIndependentDirectorsareabletoexerciseindependentjudgmentsandactinthebestinterestoftheCompany.

CORPORATEGOVERNANCEOVERVIEWSTATEMENT

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InappreciatingthespiritofMCCGinordertoembraceandsupportastrongcorporategovernanceculturethroughouttheCompany,theBoardwillcontinuetoprovidejustificationandseekannualshareholders’approvalthroughatwo-tiervotingprocessforalltheIndependentDirectorswhohavecontinuedtoretainasIndependentDirectorsformorethantwelve(12)years.

NotwithstandingthelongtenureoftheIndependentDirectors,theBoardbelievesthatthelongtenuremaynoterodetheBoard’sobjectivesincealltheIndependentDirectorsareabletoexpresstheirviewsandquestiontheBoard’sdecision,debateconstructively,challengerigorouslyanddecidedispassionately.

Currently,theBoarddoesnothaveanyformalizedBoardDiversityPolicyorGenderDiversityPolicyintheselectionofnewBoardcandidates.Nevertheless, theBoard isawarethatwomen’sparticipation indecisionmakingpositionsshouldnot be focusedonBoardpositionsalone, but alsobebroadened to includewomen inSeniorManagementas the same benefits apply. Equal opportunity is given and does not practice discrimination of any form, whetherbasedonage,gender,raceandreligionthroughouttheGroup.TheBoardbelievesthatdiversity,whenextendedtoSeniorManagement,willalsoserveasatalentpipelineforBoardcandidacy.Therefore,womenrepresentationontheBoardandSeniorManagementwillbetakenintoconsiderationwhenvacanciesarise.TheBoardhasagoodmixofcommercial,technicalandgovernmentalexperiencerelevanttotheoperationsoftheGroup.Theseinclude,interalia,entrepreneurship, economics, finance, taxmanagement, accountancy,marketing, public administration and humanresourcemanagement.TheBoardwillevaluateandmatchthecriteriaofthepotentialcandidateaswellasconsideringtheBoardroomdiversityforanynewproposedappointmentofDirectorsoftheCompanyinthefuture.

Duringthefinancialyearended2019,theBoardhadconvenedatotaloffour(4)BoardmeetingsforthepurposeofdeliberatingontheCompany’squarterlyfinancialresultsanddiscussingotherstrategicandpertinentmatters.RelevantSeniorManagementwereinvitedtoattendtheBoardmeetingstoprovidetheBoardwiththeirviewsandclarificationsonissuesraisedontheoperationsandperformanceoftheGroupandotherstrategicissuesthatmayaffectitsbusiness.

MinutesofeachBoardmeetingarecirculatedtoeachDirectorpriortoconfirmationoftheminutesbytheExecutiveChairmaninthenextBoardmeeting.MinutesandresolutionspassedateachmeetingarekeptinthestatutoryregisterattheregisteredofficeoftheCompany.Thedailyoperationalmattersthatrequire immediateBoarddecisionwillbesoughtviaDirectors’circularresolutions,supportedbyfulldetailedinformation.TheBoardnormallyratifiesthecircularresolutionsatthesubsequentBoardmeeting.

AllDirectorsof theCompanyhave full access to informationconcerning theCompanyand theGroup.Prior to theBoardandBoardCommitteemeetings,aformalagendaasapprovedbyrespectiveChairmanof theBoardandtheCommittees togetherwith thepapers containing relevant information to theBoard/Committeesaredelivered to themembersfortheDirectorstobepreparedanddealwith ifanymatterarisingfromsuchmeetingsandtoenabletheBoardandtheBoardCommitteestomakedecisions.Theynormallyreceivetheinformationandmeetingpapersoneweekbeforethescheduledmeetings.TheDirectorswouldalsoseektheadviceandservicesoftheSeniorManagementorengageotherexternalconsultants/independentprofessionalsinthedischargeoftheirdutiesandtoclearanydoubtorconcern,ifdeemednecessary.

TheBoardhadcarriedoutthefollowingactivities:

• ReviewedtheCompany’sperformancein2019andthebusinessoutlookfor2020;• SupervisedandassessedManagement’sperformance;• Receivedreportsonanyrelatedpartytransaction(s)anddeclarationofinterestbyDirectors;• ApprovedtheDirectors’ReportandAuditedFinancialStatementforthefinancialyearended31December2018;• ApprovedAnnualReport2018;• ApprovedtheStatementinrelationtoProposedRenewalofShareBuyBack;• ApprovedthedraftCirculartoShareholdersinrelationtoProposedRenewalofRecurrentRelatedPartyTransactionsofrevenueortradingnature;

• Reviewedandapprovedquarterlyresultsfor2019andannouncements;• ReviewedthequarterlyreportsfromtheCEO/GroupMDontheprogressofallbusinessdivisionsandanysignificantchangeinthebusinessandtheexternalenvironment,whichaffectedtheoperations;

• Approvedtheannualbudgetandcapitalexpenditurebudget;• ReviewedtheCompany’sstrategiesandplans;• Proposedthere-appointmentofGroup’sExternalAuditorsandensuredthattheExternalAuditorsmeetthecriteriaprovidedbytheListingRequirements;

• ApprovedthereportsoftheAuditCommittee,NominationCommittee,RemunerationCommitteeandRiskManagement&SustainabilityCommittee;

• ReviewedtheriskmanagementframeworkofGUH;• ReviewedthesuccessionplanningfortheGroup’scontinuityinleadershipforallkeypositions;and• NotedtheupdatesandanyamendmentsmadetotheListingRequirements,lawsandregulations.

CORPORATEGOVERNANCEOVERVIEWSTATEMENT

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TheattendancerecordofeachmemberoftheBoardduringthefinancialyearended2019issetoutbelow:Board of Directors Feb May Aug Nov TotalTanSriDato’SeriH’ngBokSanExecutiveChairman • • • • 4/4

DatukSeriKennethH’ngBakTeeCEO/GroupManagingDirector • • • • 4/4

Dato’HarryH’ngBakSeahNon-ExecutiveDirector • • • • 4/4

DatinJessicaH’ngHsiehLingNon-ExecutiveDirector • • • • 4/4

Mr.ChewHockLinSeniorIndependentNon-ExecutiveDirector • • • • 4/4

Dato’IsmailBinHamzahIndependentNon-ExecutiveDirector • • • • 4/4

Dato’LaiChangHunIndependentNon-ExecutiveDirector • • • • 4/4

En.WIsmailBinWNikIndependentNon-ExecutiveDirector • • • • 4/4

Dato’Dr.GanKongMengIndependentNon-ExecutiveDirector • • x • 3/4

InorderfortheGrouptoremaincompetitive,theBoardensuresthatalltheDirectorscontinuouslyenhancetheirskillsandknowledgetokeepabreastwiththedevelopmentofnewregulationsandcompliance.TheCompanySecretaryalsoreceivesregularupdatesontrainingprogrammesfromvariousorganizations.ThesearecirculatedtotheDirectorsfortheirconsiderationtoattend.DirectorswillbeinformedandupdatedonkeycorporategovernancedevelopmentsandsalientchangestotheListingRequirements,lawsandregulations.TheExternalAuditorsalsobrieftheAuditCommitteeonanychangestotheMalaysianFinancialReportingStandardsthataffecttheGroup’sfinancialstatements.

ThesummaryofcoursesandtrainingattendedbyrespectiveDirectorsoftheCompanyduringthefinancialyearended31December2019aresetoutasfollows:Tan Sri Dato’ Seri H’ng Bok San • AllowedfinancialassistanceandbenefitstoDirectorsandraisingthestandardsonDisclosure• CorporateLiabilityUpdatesDatuk Seri Kenneth H’ng Bak Tee• FinancialPlanningasEffectiveMarketingTools• MyMoney&Me(FinancialLiteracyWorkshop)• CorporateRescue:CorporateVoluntaryArrangements&JudicialManagement• CompaniesAct2016• PreparingforCorporateLiabilityinMalaysiaandhowethicsmakesbusinesssustainable• CorporateLiabilityUpdatesDato’ Harry H’ng Bak Seah• AllowedfinancialassistanceandbenefitstoDirectorsandraisingthestandardsonDisclosure• CorporateLiabilityUpdatesDatin Jessica H’ng Hsieh Ling• AllowedfinancialassistanceandbenefitstoDirectorsandraisingthestandardsonDisclosure• CorporateLiabilityUpdatesMr. Chew Hock Lin • FreshPerspectives:EngineeringthefutureoftheMalaysianBond&Sukukmarket• PreparationforCorporateLiabilityonCorruptionunderMACCActSection17A• CorporateLiabilityUpdatesDato’ Ismail Bin Hamzah• PowerofDirectors• CorporateLiabilityUpdatesDato’ Lai Chang Hun • AllowedfinancialassistanceandbenefitstoDirectorsandraisingthestandardsonDisclosure• CorporateLiabilityUpdatesEn. W Ismail Bin W Nik• CorporateLiabilityProvisionundertheMACCAct:MitigatinganewriskforyourCompany• CorporateLiabilityUpdatesDato’ Dr. Gan Kong Meng• AdaptiveLeadership• TheRoleofAuditCommitteeinensuringorganizationalintegrity,riskandgovernance• CorporateLiabilityProvision–MalaysianAnti-CorruptionCommissionAmendment• NavigatingCorporateLiability• CorporateLiabilityUpdates

CORPORATEGOVERNANCEOVERVIEWSTATEMENT

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NOMINATION COMMITTEE

AsrecommendedbyMCCG,theNominationCommitteeofGUHcurrentlyconsistsexclusivelyofIndependentNon-ExecutiveDirectors,withtheresponsibilitiesofassessingthebalancecompositionoftheBoardmembers,nominateanyproposedBoardmember(s)bylookingintohisskillsandexpertiseforthecontributiontotheCompany.

ThepresentmembersoftheCommitteeare:

Dato’IsmailBinHamzah–Chairman Independent Non-Executive DirectorMr.ChewHockLin–Member Independent Non-Executive DirectorDato’LaiChangHun–Member Independent Non-Executive Director

PursuanttoMCCG,theChairoftheNominationCommitteeshouldbetheseniorindependentdirectoridentifiedbytheBoard.TheBoardisoftheviewthatDato’IsmailBinHamzahhasconsiderableexperienceviahiskeypositionheldinhisprofessioninthepastandhehasbeenholdingthepositionofdirectorinmanyotherpubliclistedcompaniesandheisthereforeconsideredseniorandcompetenttobetheChairmanoftheNominationCommitteeoftheCompany.

The Board has stipulated theTerms of Reference for theNominationCommittee and the details are available forreferenceatwww.guh.com.my.

Summary of activities undertaken by the Nomination Committee

ThesummaryofactivitiesundertakenbytheNominationCommitteeduringthefinancialyearended31December2019includedthefollowing:

• ReviewedandconfirmedtheminutesoftheNominationCommitteemeetingheld;• AssessedtheeffectivenessoftheBoardasawhole;• ReviewedtheeffectivenessoftheBoardCommittees;• ReviewedthecontributionandperformanceofindividualDirector;• ReviewedthelevelofindependenceoftheIndependentDirectorsandassessedtheirabilitytobringindependentandobjectivejudgmenttoBoard’sdeliberation;

• RecommendedontheretentionofIndependentDirectorswhohaveservedtheCompanyformorethannineyears,andrecommendedthetwo-tiervotingprocessfortheIndependentDirectorswhohaveservedformorethantwelveyears;

• Recommendedonthere-electionoftheDirectorspursuanttotheConstitutionoftheCompany;and• ReviewedandrecommendedtheTermsofReferenceoftheNominationCommitteetotheBoardforapproval.

Evaluation for Board, Board Committees and individual Director

The Nomination Committee conducted annual assessment of the performance of the Board as a whole, BoardCommitteesandindividualDirectorsbasedontheDirectorspeerevaluationapproach.Thecriteriausedinevaluatingtheperformanceofindividual,includingtheircontributiontointeraction,integrity,competencyandtimecommitmentofthemembersoftheBoardaswellastheBoardCommitteesindischargingtheirduties,areinasetofquestionnaires.

Forthefinancialyearended31December2019,theNominationCommitteecarriedoutapeerevaluation,thenameoftheDirectorcompletingthequestionnaireshasbeenleftanonymousasitisbelievedthattheanonymitywouldachieveanhonestgeneralconsensus.Basedon theassessmentconducted, theBoardand theNominationCommitteearesatisfiedwiththecurrentsize,compositionaswellasthemixofqualifications,skillsandexpertiseamongtheBoardandtheBoardCommitteemembers.Fromtheresultsoftheevaluation,includingthemixofskillsandexperiencepossessedbytheDirectors,nonewmemberhasbeenproposedandtheBoardwillrecommendthere-electionandre-appointmentoftheexistingDirectorsattheforthcomingAnnualGeneralMeeting.

CORPORATEGOVERNANCEOVERVIEWSTATEMENT

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Process of nomination and election/re-election

Theprocess for thenominationandelection/re-electionof theNon-ExecutiveDirector (both IndependentandNon-Independent)isasfollows:

CompanySecretarygivesNominationCommitteeacopyofthemembershiplist,descriptionofdutiesand

responsibilitiesetc.

NominationCommitteerecommendstothe

Boardforappointment/re-appointment

CompanySecretarycompilesalltheevaluation

formswhichareleftanonymousandsubmittotheNominationCommittee(Each individual Director

will abstain from evaluating his/her own performance)

NominationCommitteeevaluatesandmatchesthecriteriaofeachnominee(ifany)/

existingmembersandwillconsiderdiversity,includinggender,where

applicable

NominationCommitteereviewsandoverseestheconductofannualassessmentsand

evaluation

NominationCommittee

determinestherequiredskillsand

quality

Re-election of Directors

TheConstitutionoftheCompanyprovidesthatanelectionofDirectorsshalltakeplaceeachyear.AllDirectorsshallretirefromofficeonceatleastineachthreeyears.AretiringDirectorshallbeeligibleforre-election.

UpontherecommendationoftheNominationCommitteeandtheBoard,noelectionofnewDirectorhasbeenproposed.TheDirectorswhoshallretireonceatleastineachthreeyearsandarestandingforre-electionandre-appointmentattheforthcomingAnnualGeneralMeetingoftheCompanytobeheldin2020areasstatedintheNoticeofAnnualGeneralMeeting.

Annual Assessment of Independence

ThepolicyonthetenureofIndependentDirectorisnineyearsunlessre-designatedasNon-IndependentDirector.TheretentionofIndependentDirectorwhoservesmorethannineyearsshallbeconfirmedannuallybytheshareholdersandthoseservedmorethantwelveyearsshallbeapprovedbytheshareholdersannuallyattheAnnualGeneralMeetingviaatwo-tiervotingprocess.

Basedontheassessmentcarriedoutduringthefinancialyearended31December2019andupontherecommendationoftheNominationCommittee,theBoardissatisfiedwiththelevelofindependencedemonstratedbyalltheIndependentDirectorsandtheirabilitytoactinthebestinterestoftheCompany.TheBoardattherecommendationoftheNominationCommitteeresolvedthatalltheIndependentDirectorswhohaveservedforacumulativetermofmorethantwelveyearsshallbesubjecttoshareholders’approvalattheforthcomingAnnualGeneralMeetingtobeheldin2020throughatwo-tiervotingprocess.

Attendance of Nomination Committee

TheattendancerecordofeachmemberoftheNominationCommitteeduringthefinancialyearended2019issetoutbelow:

Nomination Committee Nov TotalDato’IsmailBinHamzah,Chairman • 1/1Mr.ChewHockLin,Member • 1/1Dato’LaiChangHun,Member • 1/1

CORPORATEGOVERNANCEOVERVIEWSTATEMENT

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REMUNERATION

TheRemunerationCommitteeofGUHcurrentlycomprisesthefollowingDirectors,allofwhomareNon-Executive,withthemajorityofIndependent.

Dato’IsmailBinHamzah–Chairman Independent Non-Executive DirectorMr.ChewHockLin–Member Independent Non-Executive DirectorDatinJessicaH’ngHsiehLing–Member Non-Independent Non-Executive Director

TheBoardhasinplacePoliciesandProcedurestodeterminetheRemunerationofDirectorsandSeniorManagement.TheobjectiveoftheCompany’spolicyonDirectors’remunerationistoattractandretainDirectorsofthecaliberneededtodirecttheGroupsuccessfully.

TheRemunerationCommitteeconvenesmeetingatleastonceayearandmayberequestedasandwhennecessary.TheRemunerationCommittee is responsible forensuring that the compensationandotherbenefitswill encourageExecutiveDirectorstoact inwaysthatenhancetheCompany’s long-termprofitabilityandvalue.TheRemunerationCommitteeandtheBoardaremindfulthattheremunerationfortheExecutiveDirectorsshouldbeattractiveandfairlycompensatedtomaintainhighquality individuals in theBoardtoruntheGroupsuccessfully.Noneof theExecutiveDirectorsparticipatesinanywayindeterminingtheirindividualremuneration.InreviewingtheremunerationpackageoftheExecutiveDirectors,theCommitteeshallnormallyconsiderthelevelofresponsibilitiesofitsDirectors,andisguidedby the framework thatcovers the termsandconditions for theExecutiveDirectorsand theManagement team.Theremunerationpackagecontainsbothfixedandperformance-linkedelementsandtheirremunerationsarebenchmarkedagainsttheremunerationofothercompanieswithinthesameindustry.TheExecutiveDirectorsarepaidfixedsalaries,allowances,bonusesandotherbenefitsinaccordancewiththetermsandconditionsasagreedupon.Thetermsandconditionsarenormallyreviewedannuallytoensuretheperformanceandcontributionsarejustified.

Duringthefinancialyearended31December2019,theRemunerationCommitteehadtwomeetingstodiscussandrecommendtotheBoardforapprovaltheremunerationpackageoftheExecutiveDirectors.ThedeterminationoftheremunerationoftheNon-ExecutiveDirectorsisamatteroftheBoardasawhole.PaymentofDirectors’feesisoneofthesalientelements.TheDirector’sfeeisproposedatRM66,000perDirectorandtheshareholdersapprovalhadbeensoughtatthelastAnnualGeneralMeetingheldinyear2019.Duringtheyear,theRemunerationCommitteealsorecommendedtheDirectors’feefortheperiodfromyear2020tothenextAnnualGeneralMeetinginyear2021,subjecttotheshareholders’approvalattheforthcomingAnnualGeneralMeeting.TheCompanyreimbursesexpensesincurredbytheDirectorsforattendingtheBoardandCommitteemeetings.Allmeetingminutes,includingmeetingpapersthathadbeendeliberatedbytheRemunerationCommitteearereportedtotheBoardbytheChairmanoftheRemunerationCommitteefortheBoard’sconsiderationandapproval.

TheattendancerecordofeachmemberoftheRemunerationCommitteeduringthefinancialyearended2019issetoutbelow:

Remuneration Committee Feb Nov TotalDato’IsmailBinHamzah,Chairman • • 2/2Mr.ChewHockLin,Member • • 2/2DatinJessicaH’ngHsiehLing,Member • • 2/2

ThebreakdownoftheremunerationofeachindividualDirectorforthefinancialyearended2019fortheGroup/Companylevelisasfollows:

Name of Director Directors’ feesRM

Salaries & EPF

RMBonus

RM

Meeting allowance

RM

Ex-gratia benefits

receivablesRM

Benefits-in-kind

RMExecutive DirectorsTanSriDato’SeriH’ngBokSan 73,000 966,000 448,000 - 479,000 28,000DatukSeriKennethH’ngBakTee 97,000 1,912,000 939,000 - 1,075,000 15,500Total 170,000 2,878,000 1,387,000 - 1,554,000 43,500

CORPORATEGOVERNANCEOVERVIEWSTATEMENT

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Name of Director Directors’ feesRM

Salaries & EPF

RMBonus

RM

Meeting allowance

RM

Ex-gratia benefits

receivablesRM

Benefits-in-kind

RMNon-Executive DirectorsDato’HarryH’ngBakSeah 66,000 - - 4,000 - -DatinJessicaH’ngHsiehLing 66,000 - - 6,000 - -Mr.ChewHockLin 66,000 - - 9,000 - -Dato’IsmailBinHamzah 66,000 - - 9,000 - -Dato’LaiChangHun 66,000 - - 4,500 - -En.WIsmailBinWNik 66,000 - - 4,000 - -Dato’Dr.GanKongMeng 66,000 - - 5,000 - -Total 462,000 - - 41,500 - -

TheBoardhasoptednottodiscloseonanamedbasisfortheSeniorManagement’sdetailedremunerationandtheremunerationinthebandsofRM50,000aftertakingintoconsiderationthesensitivity,security,issueofstaffmoraleandalsotheconfidentialitypurposes.

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT

AUDIT COMMITTEE

TheAuditCommitteecomprisessolelyIndependentNon-ExecutiveDirectorsandischairedbyMr.ChewHockLin,amemberoftheMalaysianInstituteofCertifiedPublicAccountants(MICPA)andtheMalaysianInstituteofAccountants(MIA)who isalso theSenior IndependentNon-ExecutiveDirectorwhile theChairmanof theBoard isTanSriDato’SeriH’ngBokSan.ThisistoensurethattheobjectivityoftheBoard’sreviewoftheAuditCommittee’sfindingsandrecommendationsisnotimpaired.

TheAuditCommitteehaspoliciesandproceduresinplacetoassessthesuitability,objectivityandindependenceoftheExternalAuditors.TheAuditCommitteehasundertakenanassessmenttoassessthesuitabilityandindependenceofExternalAuditorsduringthefinancialyear.Thecriteriafortheassessmentincludeamongothers,qualityofservices,sufficiencyofresources,communication,independenceandinteraction.Inaddition,theExternalAuditorshavegivenassurancetotheAuditCommitteeconfirmingtheirindependenceandtheAuditCommitteeissatisfiedwiththeresultoftheassessmentandhenceforthrecommendedtotheBoardforthere-appointmentofMessrs.CroweMalaysiaPLTforshareholdersapprovalattheforthcoming56thAnnualGeneralMeeting.

TheAuditCommitteewillalsoensurethatauditpartnerwillrotateeveryfive(5)yearsaftertheclosureofstatutoryauditandnoneoftheformerkeyauditpartnerswillbeappointedtheAuditCommitteememberinordertoupholdtheutmostindependence.

TheBoardensuredthatallmembersoftheAuditCommitteearefinanciallyliterateandhavesufficientunderstandingoftheGroup’sbusinessandmattersunderthepurviewoftheAuditCommitteeincludingthefinancialreportingprocess.TheAuditCommitteehasreviewedandprovidedadviceonthefinancialstatementswhichprovideatrueandfairviewoftheCompany’sfinancialpositionandperformance.

RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK

TheBoard,throughitsRiskManagement&SustainabilityCommitteemonitorsrisksandinternalcontroloftheGroup.TheRiskManagement&SustainabilityCommitteecomprisesthree(3)members,allofwhomareNon-ExecutivewithamajorityofIndependentDirectors.

The Board acknowledges the responsibilities for maintaining a sound system of internal control to safeguard theshareholders’ investment and the Group’s assets. The internal control system is designed to provide reasonableassuranceagainstmaterialmisstatementandlosses.TheBoardreviewedtheeffectivenessofthesystemofinternalcontrolsthroughtheAuditCommitteewhichhadsupervisedtheworkoftheInternalAuditFunctionoftheGroupandthecommentsmadebytheCompany’sExternalAuditors.

TheStatementonRiskManagementandInternalControlwhichprovidesanoverviewoftheriskmanagementframeworkandthestateofinternalcontrolwithintheGroupisdisclosedonpages46to48.

TheGroup’sinternalauditfunctionisperformedin-housebytheGroupInternalAuditdepartmentwhichisindependentfromtheoperationsandactivitiesoftheGroupinordertomaintainimpartiality.InternalAuditDepartmentreportsdirectlytotheAuditCommittee.Theinternalauditsinvolvethereviewofoperationalcontrols,adequacyofriskmanagement,managementefficiency,andcompliancewiththeGrouppolicies,procedures,lawsandregulations,amongothers.Inaddition,areassuchasefficientuseofresources,safeguardingassets,responsetoassertionsoffraudandreliabilityandintegrityoffinancialinformationarealsoaudited.

CORPORATEGOVERNANCEOVERVIEWSTATEMENT

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Thus,theInternalAudithasaddedvaluebyimprovingtheGroup’soperationsthroughprovisionofconsultingservicesandindependentandobjectiveevaluationofthecontrolprocessesintheGroup.

DetailsoftheGroup’sInternalAuditFunctionandresponsibilitiesaresetoutinthestatementofInternalAuditFunctionoftheAuditCommitteeReportonpages49to52.

C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

COMMUNICATION WITH STAKEHOLDERS

TheCompanyvaluesdialogueswithshareholdersandinvestors.InordertoensurethatshareholdersandinvestorsarewellinformedoftheGroup’sbusinessoperations,financialperformanceandcorporatedevelopmentsareaccurateandfactual, timelyandinformative, informationisdisseminatedviatheCompany’sannualreports,circulars,variousannouncementsandpressreleasesmadefromtimetotime.

TheshareholdersandinvestorsarealsoencouragedtovisittheGroup’swebsiteatwww.guh.com.myforinformationandmay also raise any queries through thewebsite. Theymay also obtain theGroup’s latest information via thewebsite ofBursaMalaysiaSecuritiesBerhadatwww.bursamalaysia.com.As the company is not categorized as a“LargeCompany”andhence,hasnotadoptedintegratedreportingbasedonagloballyrecognizedframework.

TheCompany’sAnnualGeneralMeetingnormallyscheduledinMayeachyear,istheprimaryplatformforcommunicationswiththeshareholders.TheCompanyacknowledgestheimportanceofstrengtheningcorporategovernancepracticesbyproposingresolutionstobevotedbypoll.Pollingprocesseswillbeexplainedduringthegeneralmeetingandpollresultsareverifiedbyappointedscrutinizers.TheshareholdersareatlibertytoraisequestionswhiletheDirectorswillprovideanswersandclarificationsduringtheCompany’sAnnualGeneralMeeting.NoticeofAnnualGeneralMeetingandrelatedcircularandstatementtoshareholdersarenormallysentoutatleast21daysbeforethemeetinginordertofacilitatefullunderstandingoftheissuesinvolved.SpecialbusinessitemsassetoutintheNoticeofAnnualGeneralMeetingalsogivefullexplanationontheeffectoftheproposedresolutionarisingfromsuchitems.TheoutcomeoftheAnnualGeneralMeetingisannouncedtoBursaMalaysiaSecuritiesBerhadonthesamemeetingday.

TheManagementoftheCompanyalsohasconferencesandmeetingswiththeresearchanalystsandfundmanagerstoprovideupdatesonthelatestdevelopmentswithintheGroupandtogivethebestinformationpossiblesothattheycanaccuratelyapplyittoevaluatetheCompany.TheBoard isawareof theneed toestablishadisclosurepolicy thatwillprovideconstructivecommunication to theshareholdersandinvestorsatapromptlymannerinorderforthesestakeholderstobeabletomakeinformedinvestmentdecisions.TheBoardapprovedandreleasedthequarterlyfinancialresults(includingfullyearresults)forthefinancialyearended31December2019onthefollowingdates:2019 Quarterly Results Date of Release Listing Requirements Deadline1stQuarter 23May2019 31May20192ndQuarter 19August2019 30August20193rdQuarter 27November2019 29November20194thQuarter 25February2020 28February2020

STATEMENT OF DIRECTORS’ RESPONSIBILITIES TheBoard indischarging itsfiduciaryduties isaccountabletoshareholders inensuringtheannualauditedfinancialstatementsarepreparedandpresentedinclearandmeaningfulassessmentoftheGroup’sfinancialperformanceandprospect.TheBoardisrequiredunderParagraph15.26(a)oftheListingRequirementstomakeastatementexplainingitsresponsibilityforpreparingtheannualauditedfinancialstatements.

InpreparingtheGroup’sconsolidatedannualauditedfinancialstatementsforthefinancialyearended31December2019,theDirectorshaveprovidedassurancethatthefinancialstatementsaredrawnupinaccordancewiththeapplicableapprovedaccountingstandardsinMalaysiaandtheCompaniesAct2016togiveatrueandfairviewofthestateofaffairsoftheCompanyandtheGroupinatransparentmanner.TheStatementbyDirectorspursuanttoSection251(2)oftheCompaniesAct2016issetoutinthesectiontitled“StatementbyDirectorsoftheDirectors’Report”enclosedwiththeGroup’sconsolidatedannualauditedfinancialstatementsforthefinancialyearended31December2019.TheDirectors’ReportfortheauditedfinancialstatementsoftheCompanyandtheGrouparesetoutonpages54to57ofthisAnnualReport2019.

CORPORATEGOVERNANCEOVERVIEWSTATEMENT

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GUH Holdings BerhadAnnual Report 201944

TheBoardhastakenthefollowingmeasuresinordertoensurethefinancialstatementsareproperlydrawnup:

• Adoptionofappropriate,adequateandapplicableaccountingstandardsandpoliciesandappliedthemconsistently;• Applicableapprovedaccountingstandardshavebeenfollowed;• Judgementsandestimatesaremadeonareasonableandprudentbasis;and• DueinquiryintothestateofaffairsoftheCompany,therearenomaterialmattersthatmayaffecttheabilityoftheCompanytocontinueinbusinessonagoingconcernbasis.

COMPLIANCE INFORMATION AS AT 31 DECEMBER 2019

Audit and Non-Audit Fees

Ingeneral,theCompanyengagestheExternalAuditorsforauditpurposesonly.Nevertheless,asandwhennecessary,theGroupalsoengagestheExternalAuditorsfortheirnon-auditexpertisetocarryoutnon-auditservicesandactivities.

Forthefinancialyearended31December2019,theamountofauditandnon-auditfeespaidorpayablebytheCompanyandtheGrouptotheExternalAuditorsandtheiraffiliatedcompaniesareasfollows:

CompanyRM

GroupRM

Auditfees 50,000 183,500Non-auditfees 7,900 68,858

Related Party Transactions

TheGrouphasaninternalcomplianceframeworkinconnectionwithrelatedpartytransactions,toensureitmeetstheobligationsundertheListingRequirements.TheBoard,throughitsAuditCommittee,reviewsallrelatedpartytransactions involved. Any Director who has an interest in the related party transaction(s) must abstain fromdeliberationsandvotingontherelevantresolution,inrespectofsuchtransaction(s)attheBoardmeetingandanygeneralmeetingconvenedtoconsiderthematter.

Thereareproceduresestablishedby theCompany toensure that all relatedparty transactionsareundertakenonanarm’slengthbasisandonnormalcommercialterms,consistentwiththecompany’susualbusinesspracticesandpolicies,whicharegenerallynotmorefavorablethanthosegenerallyavailabletothepublicandarenotdetrimentaltotheminorityshareholders.

Significant related party transactions of theGroup for the financial year are disclosed in Note 32 to the FinancialStatementsandtheAdditionalDisclosureonpage45.Forallother transactionswithanyrelatedpartieswhichdonot fallwithin theambitof theabovedisclosure,willbesubjecttootherapplicableprovisionsoftheListingRequirementsand/oranyotherapplicablelaw.

Material Contract Involving Directors’ and Major Shareholders’ Interests

The Company and/or its subsidiaries have not entered into any material contract involving Directors’ and MajorShareholders’ interestsduring thefinancialyearended31December2019except for thoseexplained in theabovementioned.

Additional Information

Saveasaforesaiddisclosed,noneofthefollowingtransactionshavebeenenteredbytheCompanyduringthefinancialyearended31December2019:

• IssuanceofanyOptions,warrantsorconvertiblesecurities;• SponsorshipofanyAmericanDepositoryReceiptorGlobalDepositoryReceiptprogrammes;• Sanctionsand/orpenaltiesimposedontheCompanyanditssubsidiaries,DirectorsorManagementbytherelevantregulatorybodies;and

• ProfitguaranteegivenbytheCompany.

Asthereisno‘onesizefitsall’approachtocorporategovernancewhilemaintainingthebestapproachtoadoptingtheprinciples,theBoardwilluseitsbestendeavourstomaintainingthecomplianceoftherelevantprinciplesassetoutinMCCGandtopromotehighstandardsofcorporategovernance.InlinewiththelatitudeaccordedintheapplicationmechanismofMCCG,theCompanyhasprovidedexplanationsforthedeparturesfromthesaidpractices.FurtherdetailsontheapplicationofeachindividualPracticeofMCCGareavailableintheCorporateGovernanceReport2019.

CORPORATEGOVERNANCEOVERVIEWSTATEMENT

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ADDITIONALDISCLOSURE

RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

(Disclosed in accordance with Paragraph 3.1.5 of Practice Note 12 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)

Atthelast55thAnnualGeneralMeetingheldon23May2019,theCompanyhasobtaineditsshareholders’renewalmandatetoallowtheCompanyanditssubsidiariestoenterintorecurrentrelatedpartytransactionsofarevenueortradingnatureasdisclosedintheCirculartoShareholdersdated24April2019.

Detailsoftherecurrentrelatedpartytransactionstransactedduringthefinancialyearended31December2019pursuanttoshareholders’renewalmandatearedisclosedasfollows:

Transacting Party of the Group Transacting Party Nature of Relationship Nature of

Transactions

Actual Value Transacted from

23 May 2019 to31 December 2019

GUHCircuitIndustry(PG)Sdn.Bhd.

(Recipient & Provider)

KiyamasChemicalSdn.Bhd.[“KCSB”]

(Provider & Recipient)

LizhengHoldingsSdn.Bhd.(“Lizheng”)hasadirectshareholdingofapproximately28.3%in*KiyamasHoldingsSdn.

Bhd.

GanChernNeehasadirectshareholdingofapproximately8.3%in

Kiyamas

H’ngChunLiisaDirectorofLizheng,Kiyamasand

KCSB

Transactionsofraw

materials,goodsandservices

RM8,499,017.38(ApprovedLimit:

RM13,000,000.00)

GUHCircuitIndustry(PG)Sdn.Bhd.(Recipient)

KyoshaPrecisionEngineeringSdn.Bhd.[“Kyosha’]

(Provider)

H’ngChunLiisaDirectorofKyosha

Provisionofprecision

engineeringandfabricationofparts

RM1,265,295.06(ApprovedLimit:RM1,500,000.00)

Notes:

* KiyamasHoldingsSdn.Bhd.(“Kiyamas”)istheHoldingCompanyofKiyamasChemicalSdn.Bhd.

(1)DatukSeriKennethH’ngBakTee,theCEO/GroupMDoftheGroup,isalsoadirectorandshareholderofLizhengHoldingsSdn.Bhd.andthefatherofH’ngChunLi.

(2)Dato’HarryH’ngBakSeah,theNon-ExecutiveDirectorandashareholderofGUH,isthespouseofGanChernNee.

(3)TanSriDato’SeriH’ngBokSan,theExecutiveChairmanandthemajorshareholderofGUH,isthebrotherofDato’HarryH’ngBakSeahandDatukSeriKennethH’ngBakTee.

(4)DatinJessicaH’ngHsiehLing,theNon-ExecutiveDirectorandthemajorshareholderofGUH,isthedaughterofTanSriDato’SeriH’ngBokSanandthenieceofDato’HarryH’ngBakSeahandDatukSeriKennethH’ngBakTee.

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STATEMENTONRISKMANAGEMENTANDINTERNALCONTROL

Introduction

TheBoard iscommittedtouphold throughout theGroupasoundsystemofriskmanagement, internalcontrolsandgoodcorporategovernancepracticesassetoutintheStatementonRiskManagementandInternalControl,preparedincompliancewithParagraph15.26(b)oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad,theMalaysianCodeonCorporateGovernance2017andguidedbytheStatementonRiskManagementandInternalControl:GuidelinesforDirectorsofListedIssuers.

Board’s Responsibility

InaccordancewithPrincipleB(II)oftheMalaysianCodeofCorporateGovernance,theBoardisresponsiblefortheGroup’s riskmanagement and internal control systemwhich includes the establishment of appropriate policies oninternalcontrolandensurethesystemsarefunctioningeffectivelyandmanagerisksthat formpartof thecorporateculture.

TheAuditCommitteeandRiskManagement&SustainabilityCommitteeassisttheBoardtoreviewtheadequacyandeffectivenessoftheGroup’sriskmanagementandinternalcontrolsystemandtoensurethatmeasuresarecarriedoutbyManagementtoobtainthelevelofassurancerequiredbytheBoard.

The riskmanagement and internal control system is designed tomanage any inadequacies that are identified, tominimiseoreliminatetheriskoffailuretoachievetheGroup’sbusinessandcorporateobjectives.Accordingly,suchsystemscanonlyprovideareasonablebutnotabsoluteassuranceagainstmaterialmisstatement,lossorfraud.

Risk Management and Internal Control

InaccordancewithPractice9.1of theMalaysianCodeonCorporateGovernance, theBoardhas, through itsRiskManagement & Sustainability Committee, established a sound risk management and control framework that wasimplementedthroughouttheGroup.

TheGrouphasanin-housestructuredriskmanagementframeworkforanongoingprocessinidentifying,evaluating,monitoringandreportingthesignificantrisksfacedbytheGrouptoensureitssystemofinternalcontroliscarriedoutefficientlyexceptforassociates.Suchprocessisregularlyreviewedandexaminedasandwhentherearesignificantnewissueswhichrequirechangestobemadetothecurrentsystemandpolicies.

The Risk Management & Sustainability Committee comprises one (1) Non-Independent and two (2) IndependentDirectorsofwhomareallNon-ExecutiveandsupportedbySeniorManagementfromtheGroup’sbusinessdivisions,meetingsareconvenedforthepurposeofidentifying,evaluatingandmanagingthesignificantrisks.

Risksrecords,whichidentifykeyrisks,potentialfinancialimpact,thelikelihoodofthoserisksoccurring,aswellasthecontrolstrategiestomanagethoserisksassociatedwiththeGroup’sactivitiesarepresentedtotheRiskManagement&SustainabilityCommitteeforreview.TheRiskManagement&SustainabilityCommitteereviewsanddeliberatestheperformanceofthebusinessdivisionsoftheGroupandreportstotheBoard.ThisriskmanagementprocesswillhelpGUHtoachieveitsperformanceandprofitabilitytargetsbyprovidingriskinformationtoenablebetterdecision-making.TheBoardwillhaveultimateresponsibilityformanagingrisksandinternalcontrolsassociatedwiththeoperationsofeachDivision.

TheBoardiscommittedtoarticulate,implementandreviewtheGroup’sinternalcontrolsystem.Theinternalcontrolsystem isdesigned to facilitateachievementof theGroup’sbusinessobjectivesandassist theBoard tomaintainapropercontrolenvironment.Internalcontrolsalsopromoteefficiency,reduceriskofassetloss,andhelptoensurethereliabilityoffinancialstatementswhichareincompliancewithlawsandregulations.

Review of Risk Management and Internal Control System

ReviewingtheeffectivenessofriskmanagementandinternalcontrolthroughongoingassessmentsisanessentialpartoftheBoard’sresponsibilities.

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STATEMENTONRISKMANAGEMENTANDINTERNALCONTROL

TheGrouphasanongoingprocessof identifying,evaluatingandmanaging thesignificant risks inorder toachieveits objectives.On a quarterly basis, the Board receivesmanagement reports fromSeniorManagement in respectofbusinessrisksthathaveimpactedorthelikelihoodtoimpacttheGroupanditsachievementof itsobjectivesandstrategies and actions taken in response to the risks reported. TheRiskManagement & Sustainability Committeeconveneswiththedivisionalmanagersonceayearforanannualassessmentofanysignificantaspectsofrisksandinternalcontrolmatters.

TheBoardreviewstheriskmanagementandinternalcontrolsystemtoidentify,evaluateandmanagethesignificantrisks facedby theGroup in itsachievementofobjectivesandstrategize thenecessaryactions tobecarriedout toremedyanysignificantweaknessesidentifiedfromthereview.

TheGrouphasanin-houseInternalAuditFunction,whichisindependentoftheactivitiesoroperationsofthesubsidiaries,departments,andsections itaudits. Itsprincipalresponsibility is toundertakeregularandsystematicreviewsof theriskmanagementandsystemofinternalcontrolinordertoprovidereasonableassurancethatsuchsystemoperatessatisfactorilyandeffectivelyandreportdirectlytotheAuditCommittee.

TheInternalAuditFunctionadoptsarisk-basedapproachinpreparationofitsyearlyinternalauditplanandstrategywhichisreviewedandapprovedbytheAuditCommittee.

InternalAuditreviewsontheadequacyandeffectivenessoftheriskmanagement,internalcontrolsystemandreportsitsfindingsonmajorweaknessesandriskcontrolprocedures,makesrecommendationsforimprovementsandperformsfollowupauditstoassessthestatusofimplementationthereofbyManagement.

InternalAuditalsoinvestigatescomplaintsofmisuseandabuseoftheGroup’ssystemsandprocesses,mismanagementoftheGroup’sassetsandotherinstancesoffraudandmalpractice,ifany.

A whistleblowing policy has been established to provide appropriate channels that facilitate whistleblowing in atransparentandconfidentialmannerforstakeholderstoraiseconcerns,withoutfearofretaliationonanywrongdoingthattheymayobservewithintheGroup.

Key Features of Risk Management and Internal Control Processes

TheGroup’skeyfeaturesonRiskManagementandInternalControlaresummarisedasfollows:-

1. Cleardefinitionofthetermsofreference,functions,authoritiesandresponsibilitiesofthevariousCommitteesoftheBoard.

2. Well definedorganisational structurewithclear linesofaccountabilityand responsibility toenable theGroup’svision,mission,strategiesandoperationalobjectivestobeachieved.

3. DocumentedinternalpoliciesandproceduresaresetoutintheGroupPoliciestogovernthefinancialandoperationalfunctions;whicharesubjecttoregularreviewandimprovement.

4. Whereappropriate,certainsubsidiarieshaveISO9001:2015,ISO14001:2015andIATF16949:2016accreditationsfortheiroperationalprocesses.

5. Cleardefinitionsofauthorisationproceduresanddelegatedauthoritylevelsforalloperationaltransactions.

6. ReviewofallmajorproposalsforinvestmentanddivestmentbytheRiskManagement&SustainabilityCommitteebeforebeingdeliberatedandapprovedbytheBoard.

7. TheCEO/GroupManagingDirectorholdsweeklyandmonthlymanagementmeetingswiththeDivisionalheads.Atthesemeetings,allkeyperformanceindicesarediscussedandmonitored,includingdiscussionsofsignificantissues.Accordingly,theBoardisupdatedbytheCEO/GroupManagingDirectorandisabletoassesssignificantoperationalandfinancialrisksofthebusinessunitsconcerned.

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STATEMENTONRISKMANAGEMENTANDINTERNALCONTROL

8. PerformanceReports, benchmarkedagainst budgetsandobjectivesareprovided to theBoardat eachBoardmeeting.

9. DetailedbudgetingprocesswherecompaniesundertheGroupprepareannualbudgets,whichareapprovedatcompanylevelandreviewedbytheCEO/GroupManagingDirector.

10. Progressreports,financialsummaryandcurrentissueswhichmaysignificantlyaffectthecompany’sbusinessforalldivisionsarediscussedateachBoardmeeting.

11. TheRiskManagementframeworkoftheGroupisinplacetoassistintheriskmanagementprocessoftheGroup.

12. TheGroup’sInternalAuditFunctionperformregularreviews,monitorcompliancewithpoliciesandproceduresandrecommendactionplanstoimproveonareaswherecontroldeficienciesareidentifiedduringfieldaudits.Thus,providinganindependentassuranceontheadequacyandeffectivenessoftheGroup’ssystemofinternalcontrol.

13. TheAuditCommittee,onbehalfoftheBoard,reviewsreportfromtheGroupInternalAuditorsandExternalAuditorsandreportsitsconclusiontotheBoard.

TheassociateshavenotbeendealtwithaspartoftheGroupforthepurposeofthisStatement.

Conclusion

Forthefinancialyearunderreviewanduptothedateofissuanceofthisstatement,theBoardispleasedtostatethattheGroup’ssystemofriskmanagementandinternalcontrolisadequateandeffectivetosafeguardtheshareholders’investment,theinterestsofcustomers,regulatorsandemployees,aswellastheGroup’sassets.Therehavebeennomateriallosses,contingenciesoruncertaintiesarisingfromthereviews.

AsrecommendedbytheStatementonRiskManagementandInternalControl–GuidelinesforDirectorsofListedIssuers,theBoardhasreceivedassurancefromtheCEO/GroupManagingDirector,COO,GeneralManagerofCorporateOfficeandalltheDivisionalheadsthattheGroup’sriskmanagementandinternalcontrolsystemisoperatingadequatelyandeffectivelyinallmaterialaspects,duringthefinancialyearunderreviewanduptothedateofthisStatement.

TheGroupwillcontinuetomonitorallmajorrisksaffectingtheGroupandwilltakethenecessarymeasurestomitigatethemandenhancetheadequacyandeffectivenessoftheriskmanagementandinternalcontrolsystemoftheGroup.

TheExternalAuditorshavereviewedthisStatementonRiskManagementandInternalControlasrequiredbyParagraph15.23oftheBursaMalaysiaSecuritiesBerhadMainMarketListingRequirements.Basedontheirreview,nothinghascometotheirattentionthatcausesthemtobelievethatthisStatementonRiskManagementandInternalControlsetoutaboveisnotprepared,inallmaterialrespects,inaccordancewiththedisclosuresrequiredbyparagraphs41and42oftheStatementonRiskManagementandInternalControl:GuidelinesforDirectorsofListedissuersandPractices9.1and9.2oftheMalaysianCodeonCorporateGovernance2017tobesetout,norisfactuallyinaccurate.

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AUDITCOMMITTEEREPORT

TheAuditCommitteeofGUHHoldingsBerhad(“GUH”or“theCompany”)hasbeenestablishedtoassisttheBoardofDirectors (‘theBoard”) in fulfilling itsstatutoryandfiduciary responsibilitiesby reviewing theCompanyandall itssubsidiaries (‘theGroup”) business processes andmonitoringmanagement of financial risk process alongwith itsaccountingandfinancialreportingpracticesandensuringtheGroup’ssystemofinternalcontrolismaintained.TheAuditCommitteecarriedoutitsdutiesandfunctionstoensuretheintegrityoffinancialreportingandthatthefinancialstatementsoftheCompanygiveatrueandfairviewofthefinancialpositionandresults,incompliancewithallapplicablelegalandregulatoryfinancialreportingrequirements,accountingstandardsandtheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“ListingRequirements’)andtoact independentlytoensuretheinterestofshareholdersisproperlyprotected.TheAuditCommittee isof theviewthatnomaterialmisstatementsor loses,contingenciesoruncertaintieshavearisen,basedontheirreviewsmadeanddiscussionsheld.

MEMBERS

ThepresentmembersoftheAuditCommitteeare:

Mr. Chew Hock Lin,Chairman IndependentNon-ExecutiveDirector

Dato’ Ismail Bin Hamzah, Member IndependentNon-ExecutiveDirector

Dato’ Dr. Gan Kong Meng, Member IndependentNon-ExecutiveDirectorOBJECTIVES

The primary objective of the Audit Committee is to assist the Board in the effective discharge of its fiduciaryresponsibilities:

• Toreviewtheresultsofinternalandexternalauditactivitiestoensuretheauditfindingsarebroughtuptothehighestlevelforconsideration;

• TocomplywithalltheapplicableaccountingstandardsandrequireddisclosurepoliciesoftheListingRequirements;

• Toensurethecomplianceandconsistencyofthecorporategovernanceframeworkassetoutbytherelevantregulatoryauthorities.

COMPOSITION OF AUDIT COMMITTEE

The Audit Committee comprises three (3) members, all of whom are Independent Non-Executive Directors. TheChairmanof theAuditCommittee,Mr.ChewHockLinwho isalso theSenior IndependentNon-ExecutiveDirectorof theCompany isamemberof theMalaysian InstituteofCertifiedPublicAccountants (MICPA)and theMalaysianInstituteofAccountants(MIA).TheAuditCommitteeoftheCompanymeetstherequirementsofParagraph15.09(1)(c)oftheListingRequirementswhichstipulatesthatatleastone(1)memberoftheAuditCommitteemustbeaqualifiedaccountant.TheothermembersoftheAuditCommitteeareDato’IsmailBinHamzahandDato’Dr.GanKongMeng.AllmembersoftheAuditCommitteearefinanciallyliterateandequippedwiththerequiredbusinessskillsindischargingtheirdutiesasAuditCommitteemembers.TheAuditCommittee’sfinancialliteracyandunderstandingofthefinancialreportingprocesshavecontributedtotheAuditCommittee’sdiscussionsinthepreparationoffinancialstatementsoftheCompany.NoalternatedirectorshallbeappointedasamemberoftheAuditCommittee.NominationCommitteecarriedouttheevaluationandassessmenttoreviewtheperformanceoftheAuditCommitteeannually.Duringtheassessment,theNominationCommitteeevaluatedtheperformanceandeffectivenessoftheAuditCommitteebasedonafewareas,thequalityofjudgmentandthecommitment/timeattendatthemeetingaswellasthetimedevotedoutsidethemeetingbytheAuditCommitteemembers.TheBoardissatisfiedthattheAuditCommitteeand itsmembershaveefficientlydischarged itsduties inaccordancewith the termsof referenceaswellashavingappropriatelevelofknowledgeandexperiencetocontributetotheeffectivefunctioningoftheAuditCommittee.TheBoardisoftheviewthattheAuditCommitteehasprovidedrecommendationstoassisttheBoardinmakinginformeddecisionsintheBoardmeetings.

TheBoardisalwaysmindfulthataneffectiveAuditCommitteecanbringtransparency,focusandindependentjudgmentneededtooverseethefinancialreportingprocess.Theappropriatelevelofknowledge,skills,experienceandcommitmentofitsmembersiscriticaltotheAuditCommittee’sabilitytodischargeitsresponsibilitieseffectivelyandstrengthenthequalityofAuditCommitteedeliberations.

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THE PROCESS OF THE AUDIT COMMITTEE

TheChairman of theAudit Committee is responsible for ensuring theAudit Committeemeetings of theCompanyrunefficiently.He isalso responsible for theManagement, thedevelopmentandeffectiveperformanceof theAuditCommittee;planningandorganizingalloftheactivitiesoftheAuditCommittee.

TheAuditCommitteewillmeetasfrequentlyastheChairmanshalldecideinordertodischargeitsdutiesbutnolessthanfour(4)timesayear.Aquorumconsistsoftwo(2)memberspresentandamajorityofwhommustbeIndependentDirectorshavealwaysbeenmetforthemeetingsoftheAuditCommittee.

During the financial year, theAuditCommitteemet onaquarterly basis to carry out their dutieswhich include thediscussionofproposeddisclosures in thequarterlyannouncementandmatters fallingwithin theAuditCommittee’stermsofreferenceandrecommendedtotheBoardforpublicrelease.AuditCommitteealsometandheldameetingtodiscusstheannualreportbeforerecommendationtotheBoardforcirculatingtoBursaMalaysiaSecuritiesBerhadandalltheshareholders.TheCEO/GroupMD,theSeniorManagementandtheInternalAuditorhaveattendedthemeetings.UponinvitationbytheAuditCommittee,representativesoftheExternalAuditorshaveattendedtwo(2)meetingsheldinFebruaryandNovember2019.TheExternalAuditorsmay requesta specialmeeting if theyconsideranddeemnecessary.Wherecircumstancesarise,theAuditCommitteemembersshallmeetwiththeExternalAuditorswithoutanyManagementand/orexecutiveofficeroftheGroupbeingpresent.

TheCompanySecretaryshallbethesecretaryoftheAuditCommitteeorinherabsence,anotherpersonauthorizedbytheChairmanoftheAuditCommittee.Thesecretaryshallberesponsiblefordrawingupandcirculatingtheagendaandnoticeofmeetings togetherwith thesupportingexplanatorydocumentation toeachAuditCommitteememberspriortomeeting.Thesecretaryshallalsoberesponsibletorecord,maintainandcirculatetheminutesofeachmeetingtoallmembersandtheBoard,andtheChairmanoftheAuditCommitteeshallreportonkeyissuesdiscussedateachmeetingtotheBoard.

During thefinancialyear,five (5)meetingswereheldanddetailsof theAuditCommitteemembers’attendancearetabledbelow:

Audit Committee Feb Mar May Aug Nov TotalMr.ChewHockLin,Chairman • • • • • 5/5Dato’IsmailBinHamzah,Member • • • • • 5/5Dato’Dr.GanKongMeng,Member • • • x • 4/5

SUMMARY OF WORK DURING THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

1. Financial Reporting

• Reviewedtheunauditedquarterlyfinancialresultsandyear-endfinancialstatementsoftheCompanyandtheGroupwhichincludediscussionamongothers,anychangeofimplementationofmajoraccountingpolicies;thegoingconcernsassumptionandsignificantmatters;

• ReviewedtheGroup’squarterlyandyear-endfinancialstatementsandensuredthatallareincompliancewiththe Listing Requirements, Malaysian Accounting Standards Board and other relevant legal and regulatoryrequirements;

• Reviewed the unaudited financial results announcements before recommending the same to the Board forapproval;

• ReviewedthesignificantmattershighlightedbytheAuditorsinthefinancialstatementsandsignificantjudgmentsmadebyManagement.

2. External Audit

• ReviewedandapprovedtheExternalAuditorsauditplanandscopeofworkfortheyearandtheevaluationofthesystemofinternalcontrolfortablingtotheBoard;

• ReviewedthefindingsoftheExternalAuditorsreports,particularlytheissuesraisedinthemanagementletterandensuredwhereappropriate,thatthenecessarycorrectiveactionshadbeentakenbytheManagement;

• DeliberatedandreportedtheresultsoftheannualaudittotheBoard;

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AUDITCOMMITTEEREPORT

• MetanddiscussedwiththeExternalAuditorsifanyimportantandmajorissueneedtobehighlightedwithoutthepresenceofManagementoftheCompany.DuringtheprivatesessionheldwiththeExternalAuditors,theyconfirmedthattherewasnomajorconcerntobehighlightedandtheyhadbeenreceivingfullco-operationfromtheManagementandthestaffoftheGroupwhencarryingouttheirauditwork;

• Reviewedandapprovedtheprovisionofnon-auditservicescarriedoutbytheExternalAuditors.Theamountofexternalauditfeesandnon-auditfeesincurredforthefinancialyearended31December2019areasfollows:

2019 Fees incurred Company GroupAudit services 50,000 183,500Non-Audit services 7,900 68,858

• Carried out the assessment of the objectivity, independence, performance and the quality of service of theExternalAuditorstoensuretheyarecompetentandindependentthroughouttheconductoftheauditengagementwithintheGroupandtoensuretheExternalAuditorsmetthecriteriaprovidedbytheListingRequirements;

Inconsideringtheirsuitabilityandindependence,theAuditCommitteeassessedtheadequacyoftheirexperienceandresources,theirauditengagements,theexperienceoftheirengagementpartnersandalsothesupervisorystaffassignedtotheGroup.

ThecurrentExternalAuditorsoftheCompanyisMessrs.CroweMalaysiaPLT.TheMIAregulatedthatmandatoryrotationofthekeyauditpartnerfortheauditoflistedcompaniesafteraperiodofnotmorethanfive(5)years.TheAuditCommitteeensuresthatauditpartnerwillrotateeveryfive(5)yearsaftertheclosureofstatutoryaudit.

Following the review by the Audit Committee on the External Auditors’ effectiveness and independence,recommendationwasmadetotheBoardbytheAuditCommitteetore-appointtheExternalAuditors.Accordingly,theBoardapprovedthere-appointmentofMessrs.CroweMalaysiaPLTastheExternalAuditorsoftheCompanyandproposedtheirauditfees.Aresolutionforthere-appointmentwillbetabledfortheshareholders’approvalattheforthcomingAnnualGeneralMeeting.

3. Internal Audit

• Reviewedandapprovedtheannualrisk-basedinternalauditplans,monitoredtheeffectivenessofitsworkandtabledtotheBoard;

• Reviewedtheinternalauditreports,processesandresultsofinternalaudittoensureappropriateactionsweretakenontherecommendationsoftheInternalAuditfunctionandtabledtotheBoard;

• Assessed the performance of the Group’s InternalAudit function and advised whether the appointment ofadditionalinternalauditstaffisnecessary;

• Monitoredandassessedtheroleandeffectivenessof theInternalAudit function in theoverallcontextof theCompany’sriskmanagementsystem;

• Deliberatedtheresultsofad-hocinvestigationsandreportsperformedbytheInternalAuditfunctionandtabledtotheBoard.

4. Risk Management

• ReviewedtheRiskManagement&SustainabilityCommittee’sreportsandriskrecordsfromallbusinessdivisionsoftheGroupandreportedtotheBoard;

• Assessedtheadequacyandeffectivenessoftheriskmanagementframework,internalcontrolsystemsandtheappropriatenessofManagement’sresponsestokeyriskareasandhighlightedtotheBoard;

• ReviewedandrecommendedtotheBoardthedisclosureincludedintheAnnualReportwithregardstotheriskmanagementandinternalcontrolsystem.

5. Related Party Transactions

• ReviewedtheproceduresandprocessesestablishedbytheCompanywithregardstorelatedpartytransactions/

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recurrentrelatedpartytransactionsandtoensurethatanyrelatedprojectsareappropriatelyidentifiedandthattherelatedpartytransactionsaredeclared,approvedandreportedappropriatelyonaquarterlybasis;

• ReviewedtherelatedpartytransactionsthatwerearisingwithintheGrouptoensurethatthetransactionsarefair,reasonableandnotdetrimentaltotheminorityshareholders;

• ReviewedtheCirculartoShareholdersinrelationtotheproposedrenewalofshareholders’mandateforexistingrecurrentrelatedpartytransactionsofarevenueortradingnatureandrecommendedtotheBoardforapproval;

• ReviewedsubmissionofdisclosuresonthechangesinshareholdingsheldbyDirectors,anyconflictofinterestsituationthatmayarisewithintheCompanyortheGrouponaquarterlybasis;

• ReviewedanyothertransactionsthatdonotfallwithinthedefinitionofarelatedpartytransactionasstatedinChapter10oftheListingRequirementsbutinvolveacertainlevelofconflictofinterestduetothecloseproximityofthetransactingpartiessothattosafeguardthebestinterestoftheCompany.

6. Annual Reporting

• ReviewedtheconsolidatedauditedfinancialstatementsoftheCompanyandtheGroupandconfirmedwiththeManagementandtheExternalAuditorsthatthestatementshavebeenpreparedincompliancewithapplicableFinancialReportingStandardsandrecommendedtotheBoardforapproval;

• Reviewed the Audit Committee Report, reports on related party transactions and recurrent related partytransactions,CorporateGovernanceOverviewStatement,StatementonRiskManagementandInternalControl,Sustainability Statement, record on Share Buy-Back and any other statements of the Annual Report andrecommendedtotheBoardforapproval.

INTERNAL AUDIT FUNCTION

TheGrouphasanin-houseInternalAuditDepartmentthatisindependentoftheactivitiesandoperationsitaudits.TheheadofInternalAuditreportsdirectlytotheAuditCommitteewhoreviewsandapprovestheInternalAuditDepartment’sannualrisk-basedauditplan.

TheInternalAuditDepartmentisconsideredanintegralpartoftheassuranceframeworkanditsprimarymissionistoprovideassuranceontheadequacyandeffectivenessoftherisk,controlandgovernanceoftheGroup.

Duringtheyear,variousinternalauditassignmentshavebeenundertakencoveringvariousareas,departmentsandsubsidiarieswithintheGroup.

InternalauditreportsincorporatingauditrecommendationsandManagementresponseswerepresentedtotheAuditCommitteefordeliberationsandforwardedtoManagementtocarryoutnecessarypreventiveandcorrectiveactions.

SUMMARY OF ACTIVITIES UNDERTAKEN BY THE INTERNAL AUDIT DEPARTMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

• Preparedannualrisk-basedauditplanforAuditCommittee’sdeliberations;• Performedriskassessmenttoevaluateriskwithintheorganisationforauditplanningpurposes;• Implemented theannualauditplan,performedfinancial,operationalandcomplianceauditsonvariousareasandcompaniesintheGrouptoascertaintheadequacyandintegrityoftheirsystemofinternalcontrols;

• ReviewedquarterlyrelatedpartytransactionstoassesscompliancewithListingRequirements;• Carriedoutad-hocappraisalsandreviewsasrequestedbytheAuditCommitteeorManagement;• PerformedfollowupreviewstoensurethatagreedManagementactionshavebeeneffectivelyimplemented;• Providedconsultingservices,i.e.provideadviceandassistancetoManagementandstaffonprocedures,systems,internalcontrolmattersetc.throughouttheyeartoassistManagementinmeetingitsobjectives.

ThetotalcostsincurredbytheInternalAuditFunctionoftheGroupforyear2019isRM204,995(2018:RM180,540).

AUDITCOMMITTEEREPORT

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54 Directors’Report

58 StatementbyDirectors

58 StatutoryDeclaration

59 IndependentAuditors’Report

63 ConsolidatedStatementofFinancialPosition

64 ConsolidatedStatementofProfitorLoss

65 ConsolidatedStatementofComprehensiveIncome

66 ConsolidatedStatementofChangesinEquity

67 ConsolidatedStatementofCashFlows

69 StatementofFinancialPosition

70 StatementofProfitorLoss

71 StatementofComprehensiveIncome

72 StatementofChangesinEquity

73 StatementofCashFlows

74 NotestotheFinancialStatements

StatementsFinancial

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DIRECTORS’REPORT

ThedirectorsherebysubmittheirreportandtheauditedfinancialstatementsoftheGroupandtheCompanyforthefinancialyearended31December2019.Allvaluesshowninthisreportareroundedtothenearestthousand(“RM’000”)unlessotherwiseindicated.

Principal activities

The principal activities of theCompany are those of investment holding and provision ofmanagement services toitssubsidiaries.Theprincipalactivitiesandotherdetailsof thesubsidiariesaredisclosed inNote7 to thefinancialstatements.

ResultsGroup Company

RM’000 RM’000

Profit/(Loss)forthefinancialyearattributableto:--OwnersoftheCompany 5,018 3,626-Non-controllinginterests (8) 0

5,010 3,626

Dividends

During thefinancialyear, theCompanydistributed3,427,000 treasurysharesassharedividendson thebasisof1treasuryshareforevery80existingordinarysharesinissue.

Nocashdividendswererecommended,declaredorpaidbytheCompanysincetheendofthepreviousfinancialyear.

Reserves and provisions

Allmaterial transferstoorfromreservesorprovisionsduringthefinancialyearhavebeendisclosedinthefinancialstatements.

Issue of shares or debentures

TheCompanydidnotissueanysharesordebenturesduringthefinancialyear.

Share options

TheCompanydidnotgrantanyshareoptionsduringthefinancialyear.

Bad and doubtful debts

Beforethefinancialstatementswereprepared,thedirectorstookreasonablestepstoascertainthatactionhadbeentakeninrelationtothewritingoffofbaddebtsandthemakingofprovisionfordoubtfuldebts,andsatisfiedthemselvesthatallknownbaddebtshadbeenwrittenoffandthatadequateprovisionhadbeenmadefordoubtfuldebts.

Atthedateofthisreport,thedirectorsarenotawareofanycircumstanceswhichwouldrendertheamountwrittenoffforbaddebtsortheamountoftheprovisionfordoubtfuldebtsinadequatetoanysubstantialextent.

Current assets

Beforethefinancialstatementswereprepared,thedirectorstookreasonablestepstoensurethatanycurrentassetswhichwereunlikelytoberealisedintheordinarycourseofbusinessincludingthevalueofcurrentassetsasshownin theaccounting recordshavebeenwrittendown toanamountwhich thecurrentassetsmightbeexpectedso torealise.

Atthedateofthisreport,thedirectorsarenotawareofanycircumstanceswhichwouldrenderthevaluesattributedtocurrentassetsinthefinancialstatementsmisleading.

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DIRECTORS’REPORT

Valuation methods

At thedateof this report, thedirectorsarenotawareofanycircumstanceswhichhavearisenwhichwould renderadherence to the existingmethods of valuation of assets or liabilities of theGroup or theCompanymisleading orinappropriate.

Contingent and other liabilities

Atthedateofthisreport,theredoesnotexist:-

(i) anychargeontheassetsoftheGrouportheCompanywhichhasarisensincetheendofthefinancialyearwhichsecurestheliabilitiesofanyotherperson;or

(ii) anycontingentliabilitywhichhasarisensincetheendofthefinancialyear.

Nocontingentorotherliabilityhasbecomeenforceable,orislikelytobecomeenforceable,withintheperiodoftwelvemonthsaftertheendofthefinancialyearwhich,intheopinionofthedirectors,willormayaffecttheabilityoftheGrouportheCompanytomeettheirobligationswhentheyfalldue.

Change of circumstances

Atthedateofthisreport,thedirectorsarenotawareofanycircumstancesnototherwisedealtwithinthisreportorthefinancialstatementswhichwouldrenderanyamountstatedinthefinancialstatementsmisleading.

Items of an unusual nature

TheresultsoftheoperationsoftheGroupandtheCompanyduringthefinancialyearwerenot,intheopinionofthedirectors,substantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnature.

Therehasnotarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportanyitem,transactionoreventofamaterialandunusualnaturelikely,intheopinionofthedirectors,toaffectsubstantiallytheresultsoftheoperationsoftheGrouportheCompanyforthefinancialyearinwhichthisreportismade.

Directors

Thedirectorsinofficesincethebeginningofthefinancialyearare:-

DirectorsoftheCompany

TanSriDato’SeriH’ngBokSan,JP,PSM,DPPN,DGPN,DSPN,PKT,PJKDatukSeriKennethH’ngBakTee,DGSM,DPNS,DSPN,PKT,PJMDato’HarryH’ngBakSeah,DSPN,PJKDatinJessicaH’ngHsiehLingChewHockLinDato’IsmailBinHamzah,AMN,KMN,DIMPDato’LaiChangHun,DSPN,DJN,PKTWIsmailBinWNikDato’Dr.GanKongMeng,DSDK,PSPP,SDK,DJN,BCN,SMP,AMK,KMN,PPA,PhD

Directorsofsubsidiaries(otherthandirectorsoftheCompany)

H’ngChunLiKokSiewFoongYewKimChongYamChongSong

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Directors’ interests

Accordingtotheregisterofdirectors’shareholdings,theinterestsinsharesintheCompanyofthedirectorsinofficeattheendofthefinancialyearareasfollows:-

NumberofordinarysharesShare

Nameofdirector At1.1.2019 dividends (Sold) At31.12.2019

TanSriDato’SeriH’ngBokSan-Indirect(a) 32,034,938 400,437 0 32,435,375-Indirect(b) 17,406,080 217,575 (71,800) 17,551,855

DatukSeriKennethH’ngBakTee-Indirect(b) 1,387,308 17,341 0 1,404,649

Dato’HarryH’ngBakSeah-Direct 2,664,405 33,305 0 2,697,710

DatinJessicaH’ngHsiehLing-Direct 3,554,040 44,425 0 3,598,465-Indirect(c) 32,034,938 400,437 0 32,435,375

Dato’LaiChangHun-Direct 2,847,449 35,593 0 2,883,042-Indirect(b) 117,037 1,462 0 118,499-Indirect(c) 3,602,918 45,036 0 3,647,954

WIsmailBinWNik-Direct 2,359,156 29,489 0 2,388,645

(a) Deemed interest by virtue of shares held by company controlled by family members(b) Deemed interest by virtue of shares held by family members (who are not directors of the Company)(c) Deemed interest by virtue of shares held by company in which the director has interest

Directors’ benefits

Sincetheendofthepreviousfinancialyear,nodirectorhasreceivedorbecomeentitledtoreceiveanybenefit(otherthanthedirectors’remunerationasdisclosedinNote28tothefinancialstatements)byreasonofacontractmadebytheCompanyorarelatedcorporationwiththedirectororwithafirmofwhichthedirectorisamember,orwithacompanyinwhichthedirectorhasasubstantialfinancialinterestexceptforanybenefitswhichmaybedeemedtohavearisenbyvirtueofcertainrelatedpartytransactionsasdisclosedinNote32tothefinancialstatements.

Neitherduringnorattheendofthefinancialyear,wastheCompanyapartytoanyarrangementwhoseobjectistoenablethedirectorstoacquirebenefitsbymeansoftheacquisitionofsharesin,ordebenturesof,theCompanyoranyotherbodycorporate.

Indemnity and insurance for directors and officers

Therewasno indemnitygiventoanydirectororofficerof theGroupor theCompanyduringthefinancialyear.TheGroupmaintains a liability insurance for certain directors and officers and the insurance costs incurred during thefinancialyearamountedtoRM9,000.

DIRECTORS’REPORT

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Auditors

Theauditors,CroweMalaysiaPLT,haveexpressedtheirwillingnesstocontinueinoffice.Theauditors’remunerationisdisclosedinNote27tothefinancialstatements.Therewasnoindemnitygiventoorliabilityinsuranceeffectedfortheauditorsduringthefinancialyear.

Signed in accordance with a resolution of the directors dated 13 May 2020

Tan Sri Dato’ Seri H’ng Bok San, JPPSM, DPPN, DGPN, DSPN, PKT, PJK

Datuk Seri Kenneth H’ng Bak TeeDGSM, DPNS, DSPN, PKT, PJM

DIRECTORS’REPORT

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In theopinionof thedirectors, thefinancialstatementssetoutonpages63 to121givea trueand fairviewof thefinancialpositionoftheGroupandtheCompanyasat31December2019andoftheirfinancialperformanceandcashflows for the financial year then ended in accordancewithMalaysian Financial Reporting Standards, InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.

Signed in accordance with a resolution of the directors dated 13 May 2020

Tan Sri Dato’ Seri H’ng Bok San, JPPSM, DPPN, DGPN, DSPN, PKT, PJK

Datuk Seri Kenneth H’ng Bak TeeDGSM, DPNS, DSPN, PKT, PJM

STATUTORYDECLARATION

I,YeohSawGaik(MIAmembershipno.:13104),beingtheofficerprimarilyresponsibleforthefinancialmanagementofGUHHoldingsBerhad,dosolemnlyandsincerelydeclarethatthefinancialstatementssetoutonpages63to121are,tothebestofmyknowledgeandbelief,correctandImakethissolemndeclarationconscientiouslybelievingthedeclarationtobetrue,andbyvirtueoftheStatutoryDeclarationsAct1960.

SubscribedandsolemnlydeclaredbytheabovenamedYeohSawGaikatGeorgeTownintheStateofPenangonthis13May2020

Yeoh Saw Gaik

BeforemeShaminiA/PMShanmugamNo.P157CommissionerforOaths

STATEMENTBYDIRECTORS

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Report on the audit of the financial statements

Opinion

We have audited the financial statements of GUH Holdings Berhad, which comprise the statements of financialpositionasat31December2019oftheGroupandtheCompany,andthestatementsofprofitorloss,statementsofcomprehensiveincome,statementsofchangesinequityandstatementsofcashflowsoftheGroupandtheCompanyforthefinancialyearthenended,andnotestothefinancialstatements,includingasummaryofsignificantaccountingpolicies,assetoutonpages63to121.

Inouropinion,theaccompanyingfinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheGroupandtheCompanyasat31December2019,andoftheirfinancialperformanceandcashflowsforthefinancialyearthenendedinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.

Basis for opinion

WeconductedourauditinaccordancewithapprovedstandardsonauditinginMalaysiaandInternationalStandardsonAuditing.OurresponsibilitiesunderthosestandardsarefurtherdescribedintheAuditors’ responsibilities for the audit of the financial statementssectionofourreport.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.

Independence and other ethical responsibilities

WeareindependentoftheGroupandtheCompanyinaccordancewiththeBy-Laws (on Professional Ethics, Conduct and Practice)oftheMalaysianInstituteofAccountants(“By-Laws”)andtheInternationalEthicsStandardsBoardforAccountants’Code of Ethics for Professional Accountants (“IESBACode”), and we have fulfilled our other ethicalresponsibilitiesinaccordancewiththeBy-LawsandtheIESBACode.

Key audit matters

Keyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsignificanceinourauditofthefinancialstatementsoftheGroupandtheCompanyofthecurrentperiod.ThesematterswereaddressedinthecontextofourauditofthefinancialstatementsoftheGroupandtheCompanyasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.

Key audit matter How our audit addressed the key audit matter

Valuationofinventories(RefertoNotes3and10tothefinancialstatements)

TheGroupcarriessignificantinventories.Theassessmentof inventorywrite-downsdue toexcessquantities,obsolescenceanddeclinein net realisable value below cost involvesjudgements and estimation uncertainty informingexpectationsabout futuresalesanddemands.

Ourauditproceduresincluded,amongothers:-• Obtaininganunderstandingof:-• theGroup’sinventorymanagementprocess;• how theGroup identifies and assesses inventorywrite-downs;and

• how the Group makes the accounting estimates for inventorywrite-downs.

• Reviewing the ageing analysis of inventories and testing thereliabilitythereof.

• Examiningtheperpetualrecordsfor inventorymovementsandtoidentifyslowmovingageditems.

• Makinginquiriesofmanagementregardingtheactionplanstoclearslowmovingagedandobsoleteinventories.

• Reviewingthenetrealisablevalueofmajorinventories.• Evaluatingthereasonablenessandadequacyoftheallowanceforinventoriesrecognisedforidentifiedexposures.

INDEPENDENTAUDITORS’REPORTTOTHEMEMBERSOFGUH HOLDINGS BERHAD

196101000062(4104-W)(IncorporatedinMalaysia)

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INDEPENDENTAUDITORS’REPORTTOTHEMEMBERSOFGUH HOLDINGS BERHAD196101000062(4104-W)(IncorporatedinMalaysia)

Key audit matter How our audit addressed the key audit matter

Impairmentof receivables (Refer toNotes3and11tothefinancialstatements)

TheGroupcarriessignificantreceivablesandissubject tomajorcredit riskexposure.TheGrouprecogniseslossallowanceforexpectedcredit losses on receivables based on anassessmentofcredit risk.Suchassessmentinvolves judgements and estimationuncertainty in analysing information aboutpastevents,currentconditionsandforecastsoffutureeconomicconditions.

Ourauditproceduresincluded,amongothers:-• Obtaininganunderstandingof:-• theGroup’scontroloverthereceivablecollectionprocess;• how the Group identifies and assesses the impairment ofreceivables;and

• howtheGroupmakestheaccountingestimatesforimpairment.• Reviewingtheageinganalysisandpastduestatusofreceivablesandtestingthereliabilitythereof.

• Reviewing thesubsequentcashcollections formajor receivablesandoverdueamounts.

• Making inquiries of management regarding the action plans torecoveroverdueamounts.

• Comparingandchallengingmanagement’sviewontherecoverabilityofoverdueamountstohistoricalpatternsofcollections.

• Reviewing the computation of historical observed default ratesandadjustmentforforward-lookingestimatesusedtodeveloptheprovisionmatrix.

• Evaluatingthereasonablenessandadequacyoftheresultinglossallowancerecognised.

Wehavedeterminedthat therearenokeyauditmatterstocommunicate inourreport inrespectof theauditof thefinancialstatementsoftheCompany.

Information other than the financial statements and auditors’ report thereon

ThedirectorsoftheCompanyareresponsiblefortheotherinformation.Theotherinformationcomprisestheinformationincludedintheannualreport,butdoesnot includethefinancialstatementsoftheGroupandtheCompanyandourauditors’reportthereon.

OuropiniononthefinancialstatementsoftheGroupandtheCompanydoesnotcovertheotherinformationandwedonotexpressanyformofassuranceconclusionthereon.

InconnectionwithourauditofthefinancialstatementsoftheGroupandtheCompany,ourresponsibilityistoreadtheotherinformationand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwiththefinancialstatementsoftheGroupandtheCompanyorourknowledgeobtainedintheaudit,orotherwiseappearstobemateriallymisstated.

If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementofthisotherinformation,wearerequiredtoreportthatfact.Wehavenothingtoreportinthisregard.

Responsibilities of the directors for the financial statements

ThedirectorsoftheCompanyareresponsibleforthepreparationoffinancialstatementsoftheGroupandtheCompanythat give a true and fair view in accordancewithMalaysian Financial Reporting Standards, International FinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.ThedirectorsarealsoresponsibleforsuchinternalcontrolasthedirectorsdetermineisnecessarytoenablethepreparationoffinancialstatementsoftheGroupandtheCompanythatarefreefrommaterialmisstatement,whetherduetofraudorerror.

InpreparingthefinancialstatementsoftheGroupandtheCompany,thedirectorsareresponsibleforassessingtheGroup’sandtheCompany’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlessthedirectorseitherintendtoliquidatetheGrouportheCompanyortoceaseoperations,orhavenorealisticalternativebuttodoso.

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GUH Holdings BerhadAnnual Report 2019 61

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and theCompanyasawholeare free frommaterialmisstatement,whetherdue to fraudorerror,and to issueanauditors’reportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithapprovedstandardsonauditinginMalaysiaandInternationalStandardsonAuditingwillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.

Aspartofanaudit inaccordancewithapprovedstandardsonauditing inMalaysiaand InternationalStandardsonAuditing,weexerciseprofessionaljudgementandmaintainprofessionalscepticismthroughouttheaudit.Wealso:-

• IdentifyandassesstherisksofmaterialmisstatementofthefinancialstatementsoftheGroupandtheCompany,whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that issufficientandappropriate toprovideabasis forouropinion.The riskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.

• Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheGroup’sandtheCompany’sinternalcontrol.

• Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelateddisclosuresmadebythedirectors.

• Concludeontheappropriatenessofthedirectors’useofthegoingconcernbasisofaccountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheGroup’sortheCompany’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,wearerequiredtodrawattentioninourauditors’reporttotherelateddisclosuresinthefinancialstatementsoftheGroupandtheCompanyor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditors’report.However,futureeventsorconditionsmaycausetheGrouportheCompanytoceasetocontinueasagoingconcern.

• Evaluatetheoverallpresentation,structureandcontentofthefinancialstatementsoftheGroupandtheCompany,includingthedisclosures,andwhetherthefinancialstatementsoftheGroupandtheCompanyrepresenttheunderlyingtransactionsandeventsinamannerthatachievesfairpresentation.

• ObtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithintheGrouptoexpressanopiniononthefinancialstatementsoftheGroup.Weareresponsibleforthedirection,supervisionandperformanceofthegroupaudit.Weremainsolelyresponsibleforourauditopinion.

Wecommunicatewith thedirectorsregarding,amongothermatters, theplannedscopeandtimingof theauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.

Wealsoprovide thedirectorswithastatement thatwehavecompliedwith relevantethical requirements regardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.

Fromthematterscommunicatedwiththedirectors,wedeterminethosemattersthatwereofmostsignificanceintheauditofthefinancialstatementsoftheGroupandtheCompanyofthecurrentperiodandarethereforethekeyauditmatters.Wedescribethesemattersinourauditors’reportunlesslaworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.

INDEPENDENTAUDITORS’REPORTTOTHEMEMBERSOFGUH HOLDINGS BERHAD

196101000062(4104-W)(IncorporatedinMalaysia)

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GUH Holdings BerhadAnnual Report 201962

Report on other legal and regulatory requirements

InaccordancewiththerequirementsoftheCompaniesAct2016inMalaysia,wereportthatthesubsidiariesofwhichwehavenotactedasauditorsaredisclosedinNote7tothefinancialstatements.

Other matters

ThisreportismadesolelytothemembersoftheCompany,asabody,inaccordancewithSection266oftheCompaniesAct2016inMalaysiaandfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport.

Crowe Malaysia PLT 201906000005(LLP0018817-LCA)&AF1018CharteredAccountants

Eddy Chan Wai Hun02182/10/2021JCharteredAccountant

Date:13May2020

Penang

INDEPENDENTAUDITORS’REPORTTOTHEMEMBERSOFGUH HOLDINGS BERHAD196101000062(4104-W)(IncorporatedinMalaysia)

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GUH Holdings BerhadAnnual Report 2019 63

CONSOLIDATEDSTATEMENTOFFINANCIALPOSITIONASAT31DECEMBER2019

Theannexednotesformanintegralpartofthesefinancialstatements.

2019 2018Note RM’000 RM’000

Non-current assetsProperty,plantandequipment 4 117,515 152,326Investmentproperties 5 37,886 36,091Right-of-useassets 6 27,407 0Investmentsinassociates 8 15,963 17,463Otherinvestments 9 1 1Inventories 10 169,678 167,332Prepayments 750 0Deferredtaxassets 12 802 1,069

370,002 374,282

Current assetsInventories 10 120,525 124,246Biologicalassets 13 118 346Contractcosts 14 116 60Contractassets 15 7,920 8,130Receivables 11 62,593 71,228Prepayments 3,041 2,188Currenttaxassets 478 2,711Cashandcashequivalents 16 102,366 106,514

297,157 315,423

Current liabilitiesContractliabilities 15 2,393 8,353Payables 17 77,352 89,527Loansandborrowings 18 23,772 22,508Leaseliabilities 19 505 0Derivatives 20 0 37Provisionforonerouscontract 21 0 144Currenttaxliabilities 1,687 1,943

105,709 122,512Net current assets 191,448 192,911

Non-current liabilitiesLoansandborrowings 18 35,562 44,309Leaseliabilities 19 498 0Retirementbenefits 22 6,544 4,705Deferredtaxliabilities 12 11,882 12,468

54,486 61,482

Net assets 506,964 505,711

EquitySharecapital 23 277,992 277,992Treasuryshares 23 (148) (4,546)Reserves 229,131 232,268EquityattributabletoownersoftheCompany 506,975 505,714Non-controllinginterests 24 (11) (3)Total equity 506,964 505,711

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GUH Holdings BerhadAnnual Report 201964

Theannexednotesformanintegralpartofthesefinancialstatements.

CONSOLIDATEDSTATEMENTOFPROFITORLOSSFORTHEFINANCIALYEARENDED31DECEMBER2019

2019 2018Note RM’000 RM’000

Revenue 25 335,990 349,124

Costofrevenue (300,914) (321,252)

Grossprofit 35,076 27,872

Impairmentgains/(losses)onfinancialassets 26 7 (76)

Interestincome 2,249 2,393

Otherincome 2,094 1,558

Administrativeexpenses (20,069) (19,898)

Distributionexpenses (5,869) (6,000)

Financecosts (3,305) (3,098)

Otherexpenses (1,663) (1,903)

Shareofassociates’loss (1,424) (51)

Profitbeforetax 27 7,096 797

Taxexpense 29 (2,086) (3,483)

Profit/(Loss)forthefinancialyear 5,010 (2,686)

Profit/(Loss)forthefinancialyearattributableto:--OwnersoftheCompany 5,018 (2,681)-Non-controllinginterests 24 (8) (5)

5,010 (2,686)

Earnings/(Loss)pershare:- 30-Basic(sen) 1.81 (0.97)-Diluted(sen) 1.81 (0.97)

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CONSOLIDATEDSTATEMENTOFCOMPREHENSIVEINCOMEFORTHEFINANCIALYEARENDED31DECEMBER2019

Theannexednotesformanintegralpartofthesefinancialstatements.

2019 2018RM’000 RM’000

Profit/(Loss)forthefinancialyear 5,010 (2,686)

Othercomprehensiveincome:-

Item that will not be reclassified to profit or loss:--Remeasurementofdefinedbenefitliability (285) 0Item that may be reclassified subsequently to profit or loss:--Currencytranslationdifferencesforforeignoperations (3,472) (4,025)

Totalothercomprehensiveincomeforthefinancialyear (3,757) (4,025)

Comprehensiveincomeforthefinancialyear 1,253 (6,711)

Comprehensiveincomeforthefinancialyearattributableto:--OwnersoftheCompany 1,261 (6,706)-Non-controllinginterests (8) (5)

1,253 (6,711)

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GUH Holdings BerhadAnnual Report 201966

Theannexednotesformanintegralpartofthesefinancialstatements.

Non-distributable

Distributable

Equity

Currency

attributable

Non-

Share

Treasury

Capital

translation

Retained

toownersof

controlling

Total

capital

shares

reserve*

reserve

profits

theCom

pany

interests

equity

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

At1January2018

277,992

(4,546)

12,807

37,937

188,230

512,420

2512,422

Currencytranslationdifferencesforforeignoperations

(representingothercom

prehensiveincomeforthe

financialyear)

00

0(4,025)

0(4,025)

0(4,025)

Lossforthefinancialyear

00

00

(2,681)

(2,681)

(5)

(2,686)

Com

prehensiveincomeforthefinancialyear

00

0(4,025)

(2,681)

(6,706)

(5)

(6,711)

Transfertocapitalreserve

00

930

0(930)

00

0

At31Decem

ber2018

277,992

(4,546)

13,737

33,912

184,619

505,714

(3)

505,711

Rem

easurementofdefinedbenefitliability

00

00

(285)

(285)

0(285)

Currencytranslationdifferencesforforeignoperations

00

0(3,472)

0(3,472)

0(3,472)

Totalothercom

prehensiveincomeforthefinancialyear

00

0(3,472)

(285)

(3,757)

0(3,757)

Profit/(Loss)forthefinancialyear

00

00

5,018

5,018

(8)

5,010

Com

prehensiveincomeforthefinancialyear

00

0(3,472)

4,733

1,261

(8)

1,253

Distributionoftreasurysharesassharedividends

(representingtotaltransactionswithowners)

04,398

00

(4,398)

00

0

Transfertocapitalreserve

00

254

0(254)

00

0

At31Decem

ber2019

277,992

(148)

13,991

30,440

184,700

506,975

(11)

506,964

* Th

is re

pres

ents

the

cum

ulat

ive

amou

nt tr

ansf

erre

d fro

m th

e re

tain

ed p

rofit

s of

a s

ubsi

diar

y un

der t

he s

tatu

tory

requ

irem

ents

of t

he P

eopl

e’s

Rep

ublic

of C

hina

.

CONSOLIDAT

EDSTATE

MENTOFCHANGESIN

EQUITY

FORTHEFINANCIALYEARENDED31DECEMBER2019

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GUH Holdings BerhadAnnual Report 2019 67

Theannexednotesformanintegralpartofthesefinancialstatements.

CONSOLIDATEDSTATEMENTOFCASHFLOWSFORTHEFINANCIALYEARENDED31DECEMBER2019

2019 2018Note RM’000 RM’000

Cash flows from operating activitiesProfitbeforetax 7,096 797Adjustmentsfor:-Depreciation 16,294 15,570Fairvaluechangesinbiologicalassets 228 51Fairvaluelossesonfinancialinstruments 5 286Gainondisposalofproperty,plantandequipment (21) (24)Impairment(gains)/lossesonfinancialassets (7) 76Interestexpense 3,305 3,098Interestincome (2,249) (2,393)Inventorieswrittendown 565 273Property,plantandequipmentwrittenoff 34 9Provisionforretirementbenefits 1,554 542Reversalofinventorieswrittendown (448) (309)Shareofassociates’loss 1,424 51Unrealisedlossonforeignexchange 192 304Operatingprofitbeforeworkingcapitalchanges 27,972 18,331Changesin:-Inventories 971 2,169Contractcosts (56) (60)Contractassets 210 4,290Receivables 8,217 9,242Prepayments (1,603) (505)Contractliabilities (5,960) 4,982Payables (11,976) (6,067)Derivatives (37) 0Provisionforonerouscontract (144) (860)Cashgeneratedfromoperations 17,594 31,522Taxpaid (3,303) (6,402)Taxrefunded 2,926 39Netcashfromoperatingactivities 17,217 25,159

Cash flows from investing activitiesAcquisitionofproperty,plantandequipment (12,271) (13,181)Acquisitionofright-of-useassets 31 (41) 0Additionsofinvestmentproperties (292) (19,927)Costofinvestmentpropertiesrefunded 1,955 0Interestreceived 2,249 2,393Proceedsfromdisposalofotherinvestments 0 407Proceedsfromdisposalofproperty,plantandequipment 87 69Netcashusedininvestingactivities (8,313) (30,239)

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GUH Holdings BerhadAnnual Report 201968

2019 2018Note RM’000 RM’000

Cash flows from financing activitiesChangesintermdepositspledgedassecurity 3,177 (713)Decreaseinshort-termloansandborrowings(net) 31 (1,635) (4,832)Drawdownoftermloans 31 6,214 36,874Interestpaid (3,271) (3,242)Paymentofleaseliabilities 31 (468) 0Repaymentofhirepurchaseobligations 31 0 (253)Repaymentoftermloans 31 (12,160) (9,671)Netcash(usedin)/fromfinancingactivities (8,143) 18,163

Currencytranslationdifferences (2,397) (2,941)

Net(decrease)/increaseincashandcashequivalents (1,636) 10,142

Cashandcashequivalentsbroughtforward 102,930 92,788

Cashandcashequivalentscarriedforward 16 101,294 102,930

CONSOLIDATEDSTATEMENTOFCASHFLOWSFORTHEFINANCIALYEARENDED31DECEMBER2019(cont’d)

Theannexednotesformanintegralpartofthesefinancialstatements.

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GUH Holdings BerhadAnnual Report 2019 69

STATEMENTOFFINANCIALPOSITIONASAT31DECEMBER2019

Theannexednotesformanintegralpartofthesefinancialstatements.

2019 2018Note RM’000 RM’000

Non-current assetsProperty,plantandequipment 4 153 713Investmentproperties 5 23,125 23,125Right-of-useassets 6 500 0Investmentsinsubsidiaries 7 213,415 212,836Investmentinassociate 8 3,023 3,023Otherinvestments 9 1 1Receivables 11 197,521 195,883

437,738 435,581

Current assetsReceivables 11 8,317 3,155Prepayments 37 5Currenttaxassets 1 1Cashandcashequivalents 16 3,516 5,399

11,871 8,560

Current liabilitiesPayables 17 22,126 21,915Loansandborrowings 18 0 116Leaseliabilities 19 124 0

22,250 22,031Net current liabilities (10,379) (13,471)

Non-current liabilitiesLoansandborrowings 18 0 204Leaseliabilities 19 273 0Retirementliabilities 22 6,544 4,705Deferredtaxliabilities 12 1,099 1,099

7,916 6,008

Net assets 419,443 416,102

EquitySharecapital 23 277,992 277,992Treasuryshares 23 (148) (4,546)Retainedprofits 141,599 142,656Total equity 419,443 416,102

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GUH Holdings BerhadAnnual Report 201970

Theannexednotesformanintegralpartofthesefinancialstatements.

STATEMENTOFPROFITORLOSSFORTHEFINANCIALYEARENDED31DECEMBER2019

2019 2018Note RM’000 RM’000

Revenue 25 18,528 18,722

Costofservicesrendered (8,437) (6,791)

Grossprofit 10,091 11,931

Interestincome 88 245

Otherincome 714 7,372

Administrativeexpenses (2,327) (2,102)

Impairmentlossesonfinancialassets 26 (4,216) (4,803)

Financecosts (20) (19)

Otherexpenses (704) (1,093)

Profitbeforetax 27 3,626 11,531

Taxexpense 29 0 (549)

Profitforthefinancialyear 3,626 10,982

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Theannexednotesformanintegralpartofthesefinancialstatements.

STATEMENTOFCOMPREHENSIVEINCOMEFORTHEFINANCIALYEARENDED31DECEMBER2019

2019 2018RM’000 RM’000

Profitforthefinancialyear 3,626 10,982

Othercomprehensiveincome:-

Item that will not be reclassified to profit or loss:--Remeasurementofdefinedbenefitliability (285) 0

Othercomprehensiveincomeforthefinancialyear (285) 0

Comprehensiveincomeforthefinancialyear 3,341 10,982

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GUH Holdings BerhadAnnual Report 201972

Theannexednotesformanintegralpartofthesefinancialstatements.

STATEMENTOFCHANGESINEQUITYFORTHEFINANCIALYEARENDED31DECEMBER2019

Share Treasury Retained Totalcapital shares profits equityRM’000 RM’000 RM’000 RM’000

At1January2018 277,992 (4,546) 131,674 405,120

Profit(representingcomprehensiveincome)forthefinancialyear 0 0 10,982 10,982

At31December2018 277,992 (4,546) 142,656 416,102

Remeasurementofdefinedbenefitliability(representingothercomprehensiveincomeforthefinancialyear) 0 0 (285) (285)Profitforthefinancialyear 0 0 3,626 3,626Comprehensiveincomeforthefinancialyear 0 0 3,341 3,341

Distributionoftreasurysharesassharedividends(representingtotaltransactionswithowners) 0 4,398 (4,398) 0

At31December2019 277,992 (148) 141,599 419,443

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Theannexednotesformanintegralpartofthesefinancialstatements.

STATEMENTOFCASHFLOWSFORTHEFINANCIALYEARENDED31DECEMBER2019

2019 2018Note RM’000 RM’000

Cash flows from operating activitiesProfitbeforetax 3,626 11,531Adjustmentsfor:-Depreciation 333 353Dividendincome (12,400) (13,468)Fairvaluelossesonfinancialinstruments 0 233Gainondisposalofproperty,plantandequipment (60) 0Impairmentlossesonfinancialassets 4,216 4,803Interestexpense 20 19Interestincome (88) (245)Property,plantandequipmentwrittenoff 1 0Provisionforretirementbenefits 1,554 542Reversalofimpairmentlossoninvestmentsinsubsidiaries (579) (7,368)Unrealised(gain)/lossonforeignexchange (75) 154Operatinglossbeforeworkingcapitalchanges (3,452) (3,446)Changesin:-Receivables (3,088) (3,582)Prepayments (32) 2Payables 286 (13,003)Netcashusedinoperatingactivities (6,286) (20,029)

Cash flows from investing activitiesAcquisitionofproperty,plantandequipment (21) (8)Acquisitionofright-of-useassets 31 (26) 0Dividendsreceived 4,472 13,468Interestreceived 88 245Proceedsfromdisposalofotherinvestments 0 407Proceedsfromdisposalofproperty,plantandequipment 60 0Netcashfrominvestingactivities 4,573 14,112

Cash flows from financing activitiesInterestpaid (20) (19)Paymentofleaseliabilities 31 (150) 0Repaymentofhirepurchaseobligations 31 0 (148)Netcashusedinfinancingactivities (170) (167)

Netdecreaseincashandcashequivalents (1,883) (6,084)

Cashandcashequivalentsbroughtforward 5,399 11,483

Cashandcashequivalentscarriedforward 16 3,516 5,399

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GUH Holdings BerhadAnnual Report 201974

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

1. General information

TheCompanyisapubliccompanylimitedbyshares,incorporatedanddomiciledinMalaysiaandlistedontheMainMarketofBursaMalaysiaSecuritiesBerhad.

TheprincipalactivitiesoftheCompanyarethoseofinvestmentholdingandprovisionofmanagementservicestoitssubsidiaries.TheprincipalactivitiesofthesubsidiariesaredisclosedinNote7.

Theregisteredofficeandprincipalplaceofbusinessof theCompanyare locatedatPartofPlot1240&1241,BayanLepasFreeIndustrialZone,Phase3,BayanLepas,11900Penang,Malaysia.

Theconsolidatedfinancialstatementssetoutonpages63to68togetherwiththenotestheretocovertheCompanyanditssubsidiaries(“Group”)andtheGroup’s interests inassociates.Theseparatefinancialstatementsof theCompanysetoutonpages69to73togetherwiththenotestheretocovertheCompanysolely.

ThepresentationcurrencyofthefinancialstatementsisRinggitMalaysia(“RM”)andallvaluesareroundedtothenearestthousand(“RM’000”)unlessotherwiseindicated.

Thefinancialstatementswereauthorisedforissueinaccordancewitharesolutionofthedirectorsdated13May2020.

2. Significant accounting policies

2.1 Basis of preparation of financial statements

ThefinancialstatementsoftheGroupandtheCompanyarepreparedunderthehistoricalcostconvention,modifiedtoincludeotherbasesofmeasurementasdisclosedinothersectionsofthesignificantaccountingpolicies,andinaccordancewithMalaysianFinancialReportingStandards(“MFRSs”),InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.

ThefollowingMFRSsbecameeffectiveforthefinancialyearunderreview:-

MFRS

Effectiveforannualperiodsbeginningonor

after

MFRS16Leases 1January2019ICInterpretation23Uncertainty over Income Tax Treatments 1January2019AmendmentstoMFRS9Prepayment Features with Negative Compensation 1January2019AmendmentstoMFRS119Plan Amendment, Curtailment or Settlement 1January2019AmendmentstoMFRS128Long-term Interests in Associates and Joint Ventures 1January2019AnnualImprovementstoMFRSStandards2015-2017Cycle 1January2019TheinitialapplicationoftheaboveMFRSsdidnothaveanysignificantimpactsonthefinancialstatementsexceptasdisclosedinNote2.2.

TheGroupandtheCompanyhavenotappliedthefollowingMFRSswhichhavebeenissuedasattheendofthereportingperiodbutarenotyeteffective:-

MFRS(issuedasattheendofthereportingperiod)

Effectiveforannualperiodsbeginningonor

after

MFRS17Insurance Contracts 1January2021AmendmentstoMFRS3Definition of a Business 1January2020AmendmentstoMFRS9,MFRS139andMFRS7Interest Rate Benchmark Reform 1January2020AmendmentstoMFRS10andMFRS128Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Deferred

AmendmentstoMFRS101andMFRS108Definition of Material 1January2020AmendmentstoReferencestotheConceptualFrameworkinMFRSStandards 1January2020ManagementforeseesthattheinitialapplicationoftheaboveMFRSswillnothaveanysignificantimpactsonthefinancialstatements.

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NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

2. Significant accounting policies (cont’d)

2.2 Changes in accounting policies

TheinitialapplicationofMFRS16Leases,whichreplacesMFRS117Leasesandotherrelatedinterpretations,has resulted in certain changes in accounting policies for lessees.MFRS 16 eliminates the distinctionbetweenfinanceandoperatingleasesforlesseesandintroducesasinglelesseeaccountingmodelwhichrequiresa lesseetorecogniseassetsand liabilities forall leaseswithcertainrecognitionexemptions.Alessee is required to recognisea right-of-useasset (representing its right to use theunderlying leasedasset)andaleaseliability(representingitsobligationtomakeleasepayments).

TheGroupand theCompanyhaveelected toapply thenewrequirementsofMFRS16 from1January2019withthefollowingcumulativeeffectsofinitialapplicationrecognisedatthatdatewithoutrestatingthecomparativeinformation:-

Note

Broughtforwardfrom

precedingyear

RM’000

EffectofadoptingMFRS16RM’000

AdjustedRM’000

Consolidated statement of financial position as at 1 January 2019 (extract)

Property,plantandequipment (i) 152,326 (28,467) 123,859

Right-of-useassets (i)(ii) 0 28,756 28,756

Loansandborrowings (i) 66,817 (601) 66,216

Leaseliabilities (i)(ii) 0 890 890

Totalequity 505,711 0 505,711

Statement of financial positionas at 1 January 2019 (extract)

Property,plantandequipment (i) 713 (411) 302

Right-of-useassets (i) 0 411 411

Loansandborrowings (i) 320 (320) 0

Leaseliabilities (i) 0 320 320

Totalequity 416,102 0 416,102

(i) ForleasesthatwerepreviouslyclassifiedasfinanceleasesinaccordancewithMFRS117,thecarryingamountsoftheright-of-useassetsandleaseliabilitiesat1January2019werethosebroughtforwardfrom31December2018measuredapplyingMFRS117.Theunderlyingassetsand liabilitieswerereclassifiedfromproperty,plantandequipmentandloansandborrowingsrespectively,andwouldbeaccountedforinaccordancewithMFRS16from1January2019.

(ii) For leases thatwere previously classified as operating leases in accordancewithMFRS117, theGrouprecognisedandmeasuredtheright-of-useassetsandleaseliabilitiesat1January2019atthepresentvalueof the remaining leasepayments,discountedusingaweightedaverage incrementalborrowingrateof5.00%perannum.Asapracticalexpedient,theGrouphaselectednottoapplythetransitionrequirementstoleasesforwhichtheleasetermwouldendwithin12monthsof1January2019.

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GUH Holdings BerhadAnnual Report 201976

2. Significant accounting policies (cont’d)

2.3 Business combinations

Abusinesscombinationisatransactionorothereventinwhichanacquirerobtainscontrolofoneormorebusinesses.

Business combinations are accounted for using the acquisitionmethod.Under the acquisitionmethod,theconsiderationtransferred,theidentifiableassetsacquiredandtheliabilitiesassumedaremeasuredattheiracquisition-datefairvalues.Thecomponentsofnon-controllingintereststhatarepresentownershipinterestsaremeasuredatthepresentownershipinstruments’proportionateshareintherecognisedamountsof the identifiable net assets acquired.All other components of non-controlling interests aremeasuredat their acquisition-date fair values. In a business combination achieved in stages, the previously heldequity interest in theacquiree is remeasuredat itsacquisition-date fair valueandany resultinggainorlossisrecognisedinprofitorloss.Allacquisition-relatedcosts,otherthanthecoststoissuedebtorequitysecurities,arerecognisedinprofitorlossasincurred.

Goodwillattheacquisitiondateismeasuredastheexcessof(a)over(b)below:-

(a) theaggregateof:-(i) theacquisition-datefairvalueoftheconsiderationtransferred;(ii) theamountofanynon-controllinginterests;and(iii) inabusinesscombinationachieved instages, theacquisition-date fairvalueof thepreviously

heldequityinterestintheacquiree.

(b) the net of the acquisition-date fair values of the identifiable assets acquired and the liabilitiesassumed.

Goodwillisrecognisedasanassetattheaforementionedamountlessaccumulatedimpairmentlosses,ifany.TheimpairmentpolicyisdisclosedinNote2.10.Whentheabove(b)exceeds(a),theexcessrepresentsabargainpurchasegainand,afterreassessment,isrecognisedinprofitorloss.

2.4 Basis of consolidation

Asubsidiary isanentity that iscontrolledbyanotherentity.An investorcontrolsan investeewhen it isexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeinvesteeandhastheabilitytoaffectthosereturnsthroughitspowerovertheinvestee.

The consolidated financial statements incorporate the financial statements of the Company and itssubsidiariesmadeup to the endof the reporting period using the acquisitionmethod, except forGUHDevelopment Sdn. Bhd., the acquisition of which did not constitute a business combination and wasaccountedforasanassetacquisition.Asubsidiaryisconsolidatedfromtheacquisitiondate,beingthedateonwhichcontrolisobtained,andcontinuestobeconsolidateduntilthedatewhencontrolislost.Intragroupbalances,transactions,incomeandexpensesareeliminatedinfullonconsolidation.Totalcomprehensiveincomeisattributedtotheownersoftheparentandtothenon-controllinginterestsevenifthisresultsinthenon-controlling interestshavingadeficitbalance.Allchanges intheparent’sownership interest inasubsidiarythatdonotresultinalossofcontrolareaccountedforasequitytransactions.

Upon lossof controlofasubsidiary, theassets (includinganygoodwill) and liabilitiesof,andanynon-controlling interests in thesubsidiaryarederecognised.Allamountsrecognised inothercomprehensiveincomeinrelationtothesubsidiaryareaccountedforonthesamebasisaswouldberequirediftherelatedassetsorliabilitieshadbeendirectlydisposedof.Anyconsiderationreceivedandanyinvestmentretainedintheformersubsidiaryarerecognisedattheirfairvalues.Theresultingdifferenceisthenrecognisedasagainorlossinprofitorloss.

2.5 Property, plant and equipment

Property,plantandequipmentarestatedatcostlessaccumulateddepreciationandaccumulatedimpairmentlosses,ifany.TheimpairmentpolicyisdisclosedinNote2.10.

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2. Significant accounting policies (cont’d)

2.5 Property, plant and equipment (cont’d)

Freehold land and capitalwork-in-progress are not depreciated. Leasehold landwas depreciated on astraight-linebasisovertheleasetermsof48to60years.Bearerplants,whichrepresentthecapitalisedcostsonnewplantingandreplantingofoilpalm,aredepreciatedonastraight-linebasisovertheestimatedusefullifeoftheoilpalmof20years.Otherproperty,plantandequipmentaredepreciatedonastraight-linebasisovertheestimatedusefullivesoftheassetsusingthefollowingannualrates:-

Buildings 2-5%Plantandmachinery 10-20%Furniture,fittingsandofficeequipment 5-50%Motorvehicles 20-25%

Theresidualvalue,usefullifeanddepreciationmethodofanassetarereviewedatleastattheendofeachreportingperiodandanychangesinexpectationsfrompreviousestimatesareaccountedforprospectivelyaschangesinaccountingestimates.

2.6 Investment properties

Investmentpropertyispropertyheld(bytheownerorthelesseeasaright-of-useasset)toearnrentalsorforcapitalappreciationorboth.Investmentpropertyisstatedatcost lessaccumulateddepreciationandaccumulatedimpairmentlosses,ifany.TheimpairmentpolicyisdisclosedinNote2.10.

Freehold land isnotdepreciated.Buildingsaredepreciatedonastraight-linebasisover theirestimatedusefullivesof33to50years.

2.7 Leases

Aleaseisacontract,orpartofacontract,thatconveystherighttouseanassetforaperiodoftimeinexchangeforconsideration.

Lessor accounting

WhentheGrouportheCompanyactsasalessor,itclassifieseachleaseaseitheranoperatingleaseorafinancelease.Afinanceleasetransferssubstantiallyalltherisksandrewardsincidentaltoownershipofanunderlyingassettothelessee,whereasanoperatingleasedoesnot.

Leasepaymentsfromoperatingleasesarerecognisedasincomeonastraight-linebasisovertheleaseterm.TheGroupandtheCompanyhavenotenteredintoanyfinancelease.

Lessee accounting

Initialrecognitionandmeasurement

WhentheGrouportheCompanyactsasalessee,itrecognisesaright-of-useasset(representingitsrighttousetheunderlyingleasedasset)andaleaseliability(representingitsobligationtomakeleasepayments)at the commencement date.TheGroup and theCompany have elected not to apply such recognitionprinciple to short-term leases (whichhavea lease termof 12monthsor less) and leasesof low-valueassets.Theleasepaymentsassociatedwiththoseleasesarerecognisedasanexpenseonastraight-linebasisovertheleaseterm.

Aright-of-useassetisinitiallyrecognisedatcost,whichcomprisestheinitialamountofleaseliability,anyleasepaymentsmadeatorbeforethecommencementdate(lessanyleaseincentives),anyinitialdirectcostsandanyestimateddismantling,removingandrestoringcosts.

Aleaseliabilityisinitiallyrecognisedatthepresentvalueoftheunpaidleasepayments,discountedusingtheinterestrateimplicitintheleaseor,ifthatratecannotbereadilydetermined,thelessee’sincrementalborrowingrate.Theunpaidleasepaymentsincludedinthemeasurementofleaseliabilitycomprisefixedpayments (less any lease incentives), variable lease payments linked to an index or a rate, expectedamounts payable under residual valueguarantees, the exercise price of a purchaseoption reasonablycertaintobeexercisedandthepenaltiesofaterminationoptionreasonablycertaintobeexercised.

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2. Significant accounting policies (cont’d)

2.7 Leases (cont’d)

Lessee accounting (cont’d)

Subsequentmeasurement

A right-of-useasset is subsequentlymeasuredat cost lessaccumulateddepreciationandaccumulatedimpairmentlosses,ifany,andadjustedforanyremeasurementofleaseliability.TheimpairmentpolicyisdisclosedinNote2.10.

Iftheleasetransfersownershipoftheunderlyingassettothelesseebytheendoftheleasetermorifthecostof the right-of-useasset reflects thatapurchaseoptionwill beexercised, the right-of-useasset isdepreciatedonastraight-linebasisfromthecommencementdatetotheendofitsusefullife.Otherwise,theright-of-useassetisdepreciatedfromthecommencementdatetotheearlieroftheendofitsusefullifeortheendoftheleaseterm.

Aleaseliabilityissubsequentlymeasuredatamortisedcost,andremeasuredtoreflectanyreassessment(arisingfromchangestotheleasepayments)orleasemodifications.

Previousfinancialyears

Priorto1January2019,theGroupandtheCompanyclassifiedeachleaseaseitheranoperatingleaseorafinancelease.

Afinancelease,includinghirepurchase,wasinitiallyrecognisedasanassetandliabilityatthefairvalueof the leasedassetor, if lower, thepresentvalueof theminimum leasepayments.Theminimum leasepaymentsweresubsequentlyapportionedbetweenthefinancechargeandthereductionoftheoutstandingliabilitysoastoproduceaconstantperiodicrateofinterestontheremainingbalanceoftheliability.Thedepreciationpolicyfordepreciableleasedassetswasconsistentwiththatforequivalentownedassets.

Leasepaymentsunderanoperatingleasewererecognisedasanexpenseonastraight-linebasisovertheleaseterm.

2.8 Investments in subsidiaries

AsrequiredbytheCompaniesAct2016,theCompanypreparesseparatefinancialstatementsinadditiontotheconsolidatedfinancialstatements.IntheseparatefinancialstatementsoftheCompany,investmentsinsubsidiariesarestatedatcostlessimpairmentlosses,ifany.TheimpairmentpolicyisdisclosedinNote2.10.

2.9 Investments in associates

Anassociateisanentityoverwhichaninvestorhassignificantinfluence.Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsoftheinvesteebutisnotcontrolorjointcontrolofthosepolicies.

In the consolidated financial statements, investments in associates are accounted for using the equitymethod.Undertheequitymethod,theinvestmentisinitiallyrecognisedatcostandadjustedthereafterforthepost-acquisitionchanges in the investor’sshareof the investee’snetassets.Afterapplicationof theequitymethod,theinvestmentisassessedforanyobjectiveevidenceofimpairment.Ifanysuchevidenceexists,thecarryingamountoftheinvestmentistestedforimpairmentinaccordancewithNote2.10.

In theseparatefinancial statementsof theCompany, investments inassociatesarestatedat cost lessimpairmentlosses,ifany.TheimpairmentpolicyisdisclosedinNote2.10.

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2. Significant accounting policies (cont’d)

2.10 Impairment of non-financial assets

Attheendofeachreportingperiod,theGroupandtheCompanyassesswhetherthereisanyindicationthatanon-financialasset,otherthandeferredtaxassets,biologicalassetsstatedatfairvaluelesscostsofdisposal,inventories,contractcostsandcontractassets,maybeimpaired.Ifanysuchindicationexists,therecoverableamountoftheasset,beingthehigherofitsfairvaluelesscostsofdisposalanditsvalueinuse, isestimated. Irrespectiveofwhether there isany indicationof impairment,goodwill is tested forimpairmentannually.Anyexcessofthecarryingamountoftheassetoveritsrecoverableamountrepresentsanimpairmentlossandisrecognisedinprofitorloss.

Animpairmentlossonanasset,otherthangoodwill,isreversediftherehasbeenachangeintheestimatesusedtodeterminetherecoverableamountanditisreversedonlytotheextentthattheincreasedcarryingamountdoesnotexceed thecarryingamount thatwouldhavebeendetermined,netofdepreciationoramortisation, hadno impairment loss been recognised.The reversal is recognised in profit or loss.Animpairmentlossongoodwillisnotreversed.

2.11 Biological assets

Biological assets (excluding bearer plants but including the produce growing thereon) and agriculturalproduceharvestedtherefromaremeasuredatfairvaluelesscostsofdisposal.Anygainorlossarisingfrominitialrecognitionatorachangeinthefairvaluelesscostsofdisposalisrecognisedinprofitorloss.

2.12 Inventories

Property development

Inventoriesarevaluedatthelowerofcost(determinedprincipallyonthespecificidentificationbasis)andnetrealisablevalue.Costconsistsofcostsassociatedwiththeacquisitionofland,coststhatrelatedirectlyto a specific development project and other costs attributable to development activities in general andcanbeallocatedtotheproject.Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostsofcompletionandcostsnecessarytomakethesale.

Land held for property development is classified as non-current assets. It is transferred to propertydevelopmentcostsundercurrentassetswhendevelopmentactivitieshavecommencedandareexpectedtobecompletedwithinthenormaloperatingcycle.PropertydevelopmentcostsattributabletodevelopmentunitssoldarerecognisedinprofitorlossonasystematicbasisthatisconsistentwiththerecognitionofrelatedrevenueasdisclosedinNote2.21.Uponcompletionofdevelopmentproject,costsattributabletounsoldunitsaretransferredtocompleteddevelopmentunits.

Materials and goods

Inventoriesarevaluedatthelowerofcost(determinedprincipallyontheweightedaveragebasis)andnetrealisablevalue.Costconsistsofallcostsofpurchase,costsofconversionandothercosts incurred inbringingtheinventoriestotheirpresentlocationandcondition.Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostsofcompletionandcostsnecessarytomakethesale.

2.13 Contract costs

The incremental costs of obtaining a contract and costs incurred in fulfilling the contract (other thaninventories)arerecognisedasanassetifthosecostsareexpectedtoberecovered.TheassetisamortisedonasystematicbasisthatisconsistentwiththerecognitionofrelatedrevenueasdisclosedinNote2.21.When thecarryingamountof theassetexceeds theremainingamountofconsiderationexpected tobereceivedinexchangeforthegoodsorserviceslesstherelatedcoststhathavenotbeenrecognisedasexpenses, theexcess represents an impairment lossand is recognised in profit or loss.Asa practicalexpedient,theincrementalcostsofobtainingashort-termcontractofwhichtheamortisationperiodisoneyearorlessarerecognisedasanexpensewhenincurred.

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2. Significant accounting policies (cont’d)

2.14 Contract assets and contract liabilities

A contract is presented in the statement of financial position as a contract asset or a contract liability,dependingontherelationshipbetweentheentity’sperformanceandthecustomer’spayment.Acontractassetisanentity’srighttoconsiderationinexchangeforgoodsorservicestransferredtoacustomerwhenthatrightisconditionedonsomethingotherthanthepassageoftime.Theassetissubjecttoimpairmentassessmenton thesamebasisas trade receivablesasdisclosed inNote2.15.Acontract liability isanentity’sobligationtotransfergoodsorservicestoacustomerforwhichtheentityhasreceivedconsideration(ortheamountisdue)fromthecustomer.

2.15 Financial assets

FinancialassetsoftheGroupandtheCompanyconsistofinvestmentsinequityinstruments,receivables,derivativesandcashandcashequivalents.

Initial recognition and measurement

Afinancialasset isrecognisedinthestatementoffinancialpositionwhen,andonlywhen,theGrouportheCompany becomes a party to the contractual provisions of the financial instrument.A regularwaypurchaseorsaleoffinancialassetsisrecognisedorderecognisedusingsettlementdateaccounting.Tradereceivablesthatdonotcontainasignificantfinancingcomponentareinitiallyrecognisedattheirtransactionprice(asdefinedinNote2.21).Otherfinancialassetsareinitiallyrecognisedatfairvalueplus,inthecaseofafinancialassetnotatfairvaluethroughprofitorloss,transactioncosts.

Subsequent measurement

Financialassetsaresubsequentlymeasuredatamortisedcost, fairvalue throughothercomprehensiveincomeorfairvaluethroughprofitorlossinaccordancewiththeirclassificationonthebasisofboththebusinessmodelwithinwhichtheyareheldandtheircontractualcashflowcharacteristics.

(i) Amortised cost

Afinancialassetismeasuredatamortisedcostifitisheldwithinabusinessmodelwhoseobjectiveis to hold financial assets to collect contractual cash flowsand the contractual termsgive rise onspecifieddatestocashflowsthataresolelypaymentsofprincipalandinterestontheprincipalamountoutstanding.Allreceivablesandcashandcashequivalentsareclassifiedunderthiscategory.Anygainorlossisrecognisedinprofitorlosswhenthefinancialassetisderecognised,reclassified,throughtheamortisationprocessorinordertorecogniseimpairmentgainsorlosses.

(ii) Fair value through other comprehensive income

Afinancialassetismeasuredatfairvaluethroughothercomprehensiveincomeifitisheldwithinabusinessmodelwhoseobjectiveistobothcollectcontractualcashflowsandsellfinancialassetsandthecontractualtermsgiveriseonspecifieddatestocashflowsthataresolelypaymentsofprincipalandinterestontheprincipalamountoutstanding.TheGroupandtheCompanydonothaveanyfinancialassetsclassifiedunderthiscategory.

(iii) Fair value through profit or loss

Afinancialassetismeasuredatfairvaluethroughprofitorlossifitdoesnotmeetthecriteriatobemeasuredat amortised cost or fair value throughother comprehensive income.All investments inequityinstrumentsandderivativesareclassifiedunderthiscategory.Anygainorlossisrecognisedinprofitorloss.

Impairment

Ateachreportingdate,theGroupandtheCompanyrecognisealossallowanceforexpectedcreditlossesonafinancialassetmeasuredatamortisedcost.Thelossallowanceismeasuredatanamountequaltothelifetimeexpectedcreditlossesifthecreditriskonthefinancialassethasincreasedsignificantlysinceinitialrecognition.Ifthecreditriskhasnotincreasedsignificantlysinceinitialrecognition,thelossallowanceismeasuredatanamountequalto12-monthexpectedcreditlosses.Anyadjustmenttothelossallowanceisrecognisedinprofitorlossasanimpairmentgainorloss.

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2. Significant accounting policies (cont’d)

2.15 Financial assets (cont’d)

Impairment (cont’d)

Irrespective of whether there is any significant increase in credit risk since initial recognition, the lossallowancefortradereceivablesisalwaysmeasuredatanamountequaltolifetimeexpectedcreditlossesusingthesimplifiedapproachinaccordancewithMFRS9Financial Instruments.Suchlifetimeexpectedcreditlossesarecalculatedusingaprovisionmatrixbasedonhistoricalcreditlossexperienceandadjustedforreasonableandsupportableforward-lookinginformationthatisavailablewithoutunduecostoreffort.

Theexpectedcreditlossesforacredit-impairedfinancialassetaremeasuredasthedifferencebetweentheasset’sgrosscarryingamountandthepresentvalueofestimatedfuturecashflowsdiscountedattheasset’s original effective interest rate.Thegross carryingamount of a credit-impaired financial asset isdirectlywrittenoffwhenthereisnoreasonableexpectationofrecovery.

Derecognition

Afinancialassetisderecognisedwhen,andonlywhen,thecontractualrightstothecashflowsfromthefinancialassetexpireoralltherisksandrewardsofownershiparesubstantiallytransferred.Adirectwrite-offofgrosscarryingamountwhenthereisnoreasonableexpectationofrecoveringafinancialassetconstitutesaderecognitionevent.

2.16 Financial liabilities

FinancialliabilitiesoftheGroupandtheCompanyconsistofpayables,loansandborrowings,contingentconsideration,derivativesandfinancialguaranteecontracts.

Initial recognition and measurement

Afinancialliabilityisrecognisedinthestatementoffinancialpositionwhen,andonlywhen,theGrouportheCompanybecomesapartytothecontractualprovisionsofthefinancialinstrument.Afinancialliabilityisinitiallyrecognisedatfairvalueminus,inthecaseofafinancialliabilitynotatfairvaluethroughprofitorloss,transactioncosts.

Subsequent measurement

Allpayablesand loansandborrowingsaresubsequentlymeasuredatamortisedcost.Anygainor lossis recognised in profit or losswhen the financial liability is derecognised and through the amortisationprocess.

Contingentconsiderationandderivativesaresubsequentlymeasuredatfairvaluethroughprofitor loss.Anygainorlossisrecognisedinprofitorloss.

Financialguaranteecontractsaresubsequentlymeasuredatthehigheroftheamountoflossallowanceandtheamountinitiallyrecognisedlessanycumulativeincomerecognised.

Derecognition

Afinancialliabilityisderecognisedwhen,andonlywhen,theobligationspecifiedinthecontractisdischargedorcancelledorexpires.

2.17 Provision for onerous contract

Anonerous contract is a contract inwhich the unavoidable costs ofmeeting the obligations under thecontractexceedtheeconomicbenefitsexpectedtobereceivedunderit.Theunavoidablecostsunderacontractreflecttheleastnetcostofexitingfromthecontract,whichisthelowerofthecostoffulfillingitandanycompensationorpenaltiesarisingfromfailuretofulfilit.Whenacontractisonerous,thepresentobligationunderthecontractisrecognisedandmeasuredasaprovision.

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2. Significant accounting policies (cont’d)

2.18 Foreign currency transactions and translation

Theconsolidatedfinancialstatementsandseparatefinancialstatementsof theCompanyarepresentedinRinggitMalaysia,which isalso theCompany’s functionalcurrency,being thecurrencyof theprimaryeconomic environment inwhich the entity operates. Items included in the financial statements of eachindividualentitywithintheGrouparemeasuredusingtheindividualentity’sownfunctionalcurrency.

Aforeigncurrencytransactionisrecordedinthefunctionalcurrencyusingtheexchangerateattransactiondate.Attheendofthereportingperiod,foreigncurrencymonetaryitemsaretranslatedintothefunctionalcurrency using the closing rate. Foreign currency non-monetary itemsmeasuredat cost are translatedusingtheexchangerateat transactiondate,whereasthosemeasuredat fairvaluearetranslatedusingtheexchange rateat valuationdate.Exchangedifferencesarising from the settlement or translationofmonetary itemsarerecognised inprofitor loss.Anyexchangecomponentof thegainor lossonanon-monetaryitemisrecognisedonthesamebasisasthatofthegainorloss,i.e.inprofitorlossorinothercomprehensiveincome.

In translating the financial position and results of a foreign operationwhose functional currency is notthepresentationcurrency,i.e.RinggitMalaysia,assetsandliabilitiesaretranslatedintothepresentationcurrencyusingtheclosingrate,whereasincomeandexpensesaretranslatedusingtheexchangeratesat transaction dates.All resulting exchangedifferencesare recognised in other comprehensive incomeandaccumulated inequityas currency translation reserveuntil the foreignoperation isdisposedof, atwhichtimethecumulativeexchangedifferencespreviouslyrecognisedinothercomprehensiveincomearereclassifiedfromequitytoprofitorlossasareclassificationadjustment.

Anygoodwillandfairvalueadjustmentsarisingfromtheacquisitionofaforeignoperationaretreatedasassetsandliabilitiesoftheforeignoperationtobeexpressedinitsfunctionalcurrencyandtranslatedintothepresentationcurrencyusingtheclosingrate.

2.19 Share capital

Ordinary shares are classified as equity. Transaction costs that relate to the issue of new shares areaccountedforasadeductionfromequity.

OwnsharespurchasedareheldastreasurysharesinaccordancewiththerequirementsofSection127of theCompaniesAct2016.Thetotalamountofconsiderationpaid, includingdirectlyattributablecosts,isrecogniseddirectlyinequity.Whentreasurysharesaredistributedassharedividends,thecostofthesharesdistributedisappliedinthereductionofdistributablereserves.Whentreasurysharesareresoldintheopenmarket,thedifferencebetweenthesaleconsiderationandthecostofthesharesresoldisadjustedtosharecapital.Whentreasurysharesarecancelled, thecostof thesharescancelled isapplied in thereductionofdistributablereservesandtheissuedsharecapitalisdiminishedbythesharessocancelled.

Dividendsonsharesdeclaredandunpaidattheendofthereportingperiodarerecognisedasaliability,whereasdividendsproposedordeclaredafterthereportingperiodaredisclosedinthenotestothefinancialstatements.

2.20 Fair value measurement

Fairvalue is theprice thatwouldbereceived tosellanassetorpaid to transfera liability inanorderlytransactionbetweenmarketparticipantsatthemeasurementdate.

TheGroupandtheCompanyusevaluationtechniquesthatareappropriateinthecircumstancesandforwhichsufficientdataareavailabletomeasurefairvalue,maximisingtheuseofrelevantobservableinputsandminimisingtheuseofunobservableinputs.Thevaluationtechniquesusedincludethefollowingoracombinationthereof:-

(i) Marketapproach-whichusespricesandotherrelevantinformationgeneratedbymarkettransactionsinvolvingidenticalorcomparable(i.e.similar)assets,liabilitiesoragroupofassetsandliabilities.

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2. Significant accounting policies (cont’d)

2.20 Fair value measurement (cont’d)

(ii) Costapproach -which reflects theamount thatwouldbe requiredcurrently to replace theservicecapacityofanasset.

(iii) Incomeapproach -whichconverts futureamounts (e.g. cashflowsor incomeandexpenses) toasinglecurrent(i.e.discounted)amount.

Theinputstovaluationtechniquesusedtomeasurefairvaluearecategorisedintothefollowinglevelsoffairvaluehierarchy:-

(i) Level1-quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilitiesthattheentitycanaccessatthemeasurementdate.

(ii) Level2-inputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,eitherdirectlyorindirectly.

(iii) Level3-unobservableinputsfortheassetorliability.

Anytransfersbetweenthe levelsof fairvaluehierarchyaredeemedtohaveoccurredat theendof thereportingperiod.

Non-financial assets

The fairvaluesof landandbuildingsaremeasuredusing themarketcomparisonapproach.Under thisapproach, the fair values are derived from observablemarket data such as prices per square foot forcomparablepropertiesinsimilarlocations(i.e.Level2).

Thefairvaluesoffreshfruitbunches(“FFBs”)growingonoilpalmtreesaremeasuredbymultiplyingtheestimatedquantitiesofFFBsofdifferentageattributesbytheobservablecurrentmarketpricesofharvestedFFBsproratedusingalinearinterpolation(i.e.Level2).

Financial assets and financial liabilities

Thecarryingamountsofreceivables,cashandcashequivalents,payablesandloansandborrowingswhichareshort-terminnatureorrepayableondemandarereasonableapproximationsof fairvalues.Thefairvaluesoflong-termloansandborrowingsaremeasuredusingpresentvaluetechniquebydiscountingtheexpectedfuturecashflowsusingobservablecurrentmarket interestratesforsimilar liabilities(i.e.Level2).

Thefairvaluesofquotedinvestmentsaredirectlymeasuredusingtheirunadjustedclosingpricesinactivemarkets(i.e.Level1).

Thefairvaluesofforwardexchangecontractsaremeasuredusingpresentvaluetechniquebydiscountingthedifferencesbetweencontractual forwardpricesandobservablecurrentmarket forwardpricesusingrisk-freeinterestrate(i.e.Level2).

Thefairvalueofcontingentconsiderationismeasuredusingprobability-weightedpresentvaluetechniquebydiscounting theexpected future cashflowsusing theGroup’sobservable costof capital dictatedbyexternalmarket(i.e.Level2).

2.21 Revenue from contracts with customersTheGroupandtheCompanyrecogniserevenue(byapplyingthefollowingsteps)todepictthetransferofpromisedgoodsorservicestocustomersatthetransactionprice.

(i) Step 1: Identify contract -A contract is an agreement between two or more parties that createsenforceablerightsandobligations.

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2. Significant accounting policies (cont’d)

2.21 Revenue from contracts with customers (cont’d)

(ii) Step 2: Identify performance obligations - Each promise to transfer distinct goods or services isidentifiedasaperformanceobligationandaccountedforseparately.

(iii) Step3:Determinetransactionprice-Thetransactionpriceistheamountofconsiderationtowhichanentityexpectstobeentitledinexchangefortransferringpromisedgoodsorservicestoacustomer.Itisadjustedfortheeffectsofvariableconsideration(e.g.discounts,rebates,incentivesorpenalties),significantfinancingcomponent,non-cashconsiderationandconsiderationpayabletocustomer.

(iv) Step4:Allocate transactionprice toperformanceobligations-The transactionprice isallocated toeachperformanceobligationonthebasisoftherelative(estimated)stand-alonesellingpricesofeachdistinctgoodorservicepromisedinthecontract.

(v) Step5:Recogniserevenue-Revenueisrecognisedwhen(oras)theentitysatisfiesaperformanceobligation by transferring a promised good or service to a customer (which iswhen the customerobtainscontrolofthatgoodorservice).Revenueisrecognisedeitherovertimeoratapointintimedependingonthetimingoftransferofcontrol.

Sale of goods

TheGroupdeterminesthatthetransferofcontrolofpromisedgoodsgenerallycoincideswiththetransferofrisksandrewardsofownership.Accordingly,revenuefromthesaleofgoodsisrecognisedatapointintimewhenthesignificantrisksandrewardsofownershiphavebeentransferredtothecustomerupondelivery.

Sale of agricultural produce

TheGroupdeterminesthatthetransferofcontrolofpromisedagriculturalproducegenerallycoincideswiththetransferofrisksandrewardsofownership.Accordingly,revenuefromthesaleofagriculturalproduceisrecognisedatapointintimewhenthesignificantrisksandrewardsofownershiphavebeentransferredtothecustomerupondelivery.

Rendering of services

TheCompanydetermines that the transferof controlofpromisedservicesgenerally coincideswith theCompany’s performance as the customer simultaneously receives and consumes the benefits of theperformanceastheCompanyperforms.Accordingly,revenuefromtherenderingofservicesisrecognisedover time when the services are performed. The Company measures the progress towards completesatisfactionoftheperformanceobligationusinganoutputmethod,i.e.timeelapsed.

Property development

For sale of properties under development, theGroup determines that the transfer of control generallycoincideswiththeGroup’sperformanceastheperformancedoesnotcreateanassetwithanalternativeusetotheGroupandtheGrouphasanenforceablerighttopaymentforperformancecompletedtodate.Accordingly, revenue is recognisedover timeduring thedevelopmentperiod.TheGroupmeasures theprogress towards complete satisfactionof theperformanceobligationusingan inputmethod, i.e. costsincurredrelativetothetotalexpectedcosts.TheeffectsofanycostsincurredthatdonotdepicttheGroup’sperformanceareexcludedfromthecalculation.

Sale of completed development units

For sale of completed development units, the Group determines that the transfer of control generallycoincideswiththedeliveryofvacantpossession.Accordingly,revenueisrecognisedatapointintimewhenthevacantpossessionhasbeendeliveredtothecustomer.

Construction contracts

TheGroupdeterminesthatthetransferofcontrolofpromisedservicesgenerallycoincideswiththeGroup’sperformanceastheperformancecreatesorenhancesanassetthatthecustomercontrolsastheassetiscreatedorenhanced.Accordingly,revenuefromconstructioncontractsisrecognisedovertimeduringtheconstructionperiod.TheGroupmeasurestheprogresstowardscompletesatisfactionoftheperformanceobligationusinganinputmethod,i.e.costsincurredrelativetothetotalexpectedcosts.TheeffectsofanycostsincurredthatdonotdepicttheGroup’sperformanceareexcludedfromthecalculation.

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2. Significant accounting policies (cont’d)

2.22 Other income

Dividendincomeisrecognisedinprofitorlossonlywhentheentity’srighttoreceivepaymentofthedividendisestablished,itisprobablethattheeconomicbenefitsassociatedwiththedividendwillflowtotheentityandtheamountofthedividendcanbemeasuredreliably.

Interestincomeisrecognisedinprofitorlossusingtheeffectiveinterestmethod.

Operatingleaseincomeisrecognisedinprofitorlossonastraight-linebasisovertheleaseterm.

2.23 Employee benefits

Short-term employee benefits

Short-term employee benefits such as wages, salaries, bonuses and social security contributions arerecognisedinprofitorlossorincludedinthecostofanasset,whereappropriate,intheperiodinwhichtheassociatedservicesarerenderedbytheemployee.

Defined contribution plans

Asrequiredbylaw,employersinMalaysiamakecontributionstothestatutorypensionscheme,EmployeesProvidentFund(“EPF”).TheGroup’sforeignsubsidiariesmakecontributionstotheirrespectivecountries’statutory pension schemes. Contributions to defined contribution plans are recognised in profit or lossorincludedinthecostofanasset,whereappropriate,intheperiodinwhichtheassociatedservicesarerenderedbytheemployee.

Defined benefit plans

The Group and the Company operate an unfunded final salary defined benefit plan for certain keymanagementpersonnel.Theliabilityinrespectofthedefinedbenefitplanisthepresentvalueofthefuturebenefitsthatkeymanagementpersonnelhaveearnedinreturnfortheirservicesrenderedinthecurrentandpriorperiods.Thecalculationisperformedusingtheprojectedunitcreditmethod,withactuarialvaluationsbeingcarriedoutwithsufficientregularityatanintervalofnotmorethanthreeyearssuchthattheamountsrecognisedinthefinancialstatementsdonotdiffermateriallyfromtheamountsthatwouldbedeterminedattheendofthereportingperiod.Allcomponentsofdefinedbenefitcostsarerecognisedinprofitorlossintheperiodinwhichtheyareincurred,exceptforremeasurementofthedefinedbenefitliabilitywhichisrecognisedinothercomprehensiveincome.

2.24 Borrowing costs

Borrowingcoststhataredirectlyattributabletotheacquisition,constructionorproductionofaqualifyingasset,whichisanassetthatnecessarilytakesasubstantialperiodoftimetogetreadyforitsintendeduseorsale,arecapitalisedaspartofthecostoftheasset,untilsuchtimeastheassetissubstantiallyreadyforitsintendeduseorsale.Allotherborrowingcostsarerecognisedinprofitorlossintheperiodinwhichtheyareincurred.

2.25 Income taxes

Incometaxesfortheyearcomprisecurrenttaxanddeferredtax.

Currenttaxrepresentstheexpectedamountofincometaxespayableinrespectofthetaxableprofitfortheyearandismeasuredusingthetaxratesthathavebeenenactedorsubstantivelyenactedbytheendofthereportingperiod.

Deferredtaxisprovidedforundertheliabilitymethodinrespectofalltemporarydifferencesbetweenthecarryingamountofanassetorliabilityanditstaxbaseexceptforthosetemporarydifferencesassociatedwithgoodwillortheinitialrecognitionofanassetorliabilityinatransactionwhichisnotabusinesscombinationandaffectsneitheraccountingnortaxableresultsatthetimeofthetransaction.

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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2. Significant accounting policies (cont’d)

2.25 Income taxes (cont’d)

Adeferred tax liability is recognised forall taxable temporarydifferences,whereasadeferred taxassetis recognised foralldeductible temporarydifferences,unused tax lossesandunused taxcredits to theextentthatitisprobablethatfuturetaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditscanbeutilised.Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheperiodwhentheassetisrealisedortheliabilityissettled,basedonthetaxratesthathavebeenenactedorsubstantivelyenactedbytheendofthereportingperiod.

2.26 Cash and cash equivalents

Cashandcashequivalentscomprisecashonhand,demanddeposits,termdepositsthatarewithdrawableondemandandshort-term,highlyliquidinvestmentsthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.Forthepurposeofstatementofcashflows,cashandcashequivalentsarepresentednetofbankoverdraftsandpledgeddeposits,ifany.

3. Judgements and estimation uncertaintyJudgements made in applying accounting policies

IntheprocessofapplyingtheaccountingpoliciesoftheGroupandtheCompany,managementisnotawareofanyjudgements,apartfromthoseinvolvingestimations,thatcansignificantlyaffecttheamountsrecognisedinthefinancialstatements.

Sources of estimation uncertainty

Thekeyassumptionsaboutthefuture,andothermajorsourcesofestimationuncertaintyattheendofthereportingperiod, thathaveasignificant riskof resulting inamaterialadjustment to thecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow:-

Impairmentofinvestmentsinassociates

When there isobjectiveevidence thatan investment inassociate is impaired, theGroupperforms impairmenttestbycomparingtherecoverableamountoftheinvestment(higheroffairvaluelesscostsofdisposalandvalueinuse)withitscarryingamount.Indeterminingthevalueinuseoftheinvestment,theGroupestimatesitsshareofthepresentvalueoftheestimatedfuturecashflowsexpectedtobegeneratedbytheassociate,includingthecashflowsfromitsoperationsandtheproceedsfromtheultimatedisposaloftheinvestment.Suchdeterminationofthevalueinuseinvolvessignificantjudgementsandestimationuncertaintyinmakingkeyassumptionsaboutfuturemarketandeconomicconditions,growthrates,profitmargins,discountrate,etc.ThecarryingamountsofinvestmentsinassociatesaredisclosedinNote8.

Valuationofinventories

Reviewsaremadeperiodicallybymanagementoninventoriesforexcessinventories,obsolescenceanddeclinein net realisable value below cost. These reviews involve judgements and estimation uncertainty in formingexpectationsaboutfuturesalesanddemands.Anychangesintheseaccountingestimateswillresultinrevisionstothevaluationofinventories(Note10).

Propertydevelopment

TheGroup recognisespropertydevelopment revenueover timebymeasuring theprogress towardscompletesatisfactionof theperformanceobligation.Property development costsand incremental costsof obtaining thecontractarealsorecognisedinprofitorlossonasystematicbasisthatisconsistentwiththerecognitionofrelatedrevenue. These procedures involve judgements and estimation uncertainty in predicting the outcome of theperformanceobligationbasedonpastexperience,workofexpertsandcontinuousmonitoringmechanism.Anychanges in theseaccountingestimateswillaffect thecarryingamountsof inventories(Note10),contractcosts(Note14),contractassetsandcontractliabilities(Note15).

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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3. Judgements and estimation uncertainty (cont’d)

Sources of estimation uncertainty (cont’d)

Impairmentofcontractassetsandreceivables

TheGroupandtheCompanyrecogniselossallowanceforexpectedcreditlossesoncontractassetsandreceivablesbased on an assessment of credit risk. Such assessment involves judgements and estimation uncertainty inanalysing information about past events, current conditions and forecasts of future economic conditions.Anychangesintheseaccountingestimateswillaffectthecarryingamountsofcontractassets(Note15)andreceivables(Note11).

Constructioncontracts

TheGroupconsiderstheeffectsofvariableconsiderationindeterminingthetransactionpriceofaperformanceobligationsatisfiedovertime,andrecognisesrevenueaccordinglybymeasuringtheprogresstowardscompletesatisfactionof theperformanceobligation.Theseprocedures involve judgementsandestimationuncertainty inpredictingtheoutcomeoftheperformanceobligationbasedonpastexperience,workofexpertsandcontinuousmonitoringmechanism.Anychanges in theseaccountingestimateswillaffect thecarryingamountsofcontractassetsandcontractliabilities(Note15).

4. Property, plant and equipment

Group

Furniture,fittings Capital

Landand Plantand andoffice Motor Bearer work-in-buildings machinery equipment vehicles plants progress TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

CostAt1January2018 120,809 205,499 8,694 6,558 792 226 342,578Additions 807 5,619 342 68 0 6,345 13,181Disposals/Write-offs 0 (7,334) (63) (321) 0 0 (7,718)Reclassifications 0 6,058 0 0 0 (6,058) 0Currencytranslationdifferences (1,839) (2,971) (114) (23) 0 0 (4,947)At31December2018 119,777 206,871 8,859 6,282 792 513 343,094

At1January2019-Broughtforwardfromprecedingyear 119,777 206,871 8,859 6,282 792 513 343,094-EffectofadoptingMFRS16 (33,029) 0 0 (1,247) 0 0 (34,276)-Adjusted 86,748 206,871 8,859 5,035 792 513 308,818Additions 897 5,445 187 252 0 5,490 12,271Disposals/Write-offs (45) (3,218) (55) (271) 0 0 (3,589)Transfertoinvestmentproperties (3,979) 0 0 0 0 0 (3,979)Reclassifications 0 5,468 0 0 0 (5,468) 0Currencytranslationdifferences (769) (1,996) (76) (16) 0 0 (2,857)At31December2019 82,852 212,570 8,915 5,000 792 535 310,664

Depreciation and impairment lossesAt1January2018Accumulateddepreciation 22,107 153,743 5,841 3,978 440 0 186,109Accumulatedimpairmentlosses 379 7 26 0 0 0 412

22,486 153,750 5,867 3,978 440 0 186,521Depreciation 5,546 7,919 780 832 35 0 15,112Disposals/Write-offs 0 (7,283) (60) (321) 0 0 (7,664)Currencytranslationdifferences (534) (2,550) (96) (21) 0 0 (3,201)At31December2018Accumulateddepreciation 27,119 151,829 6,465 4,468 475 0 190,356Accumulatedimpairmentlosses 379 7 26 0 0 0 412

27,498 151,836 6,491 4,468 475 0 190,768

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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4. Property, plant and equipment (cont’d)

Group

Furniture,fittings Capital

Landand Plantand andoffice Motor Bearer work-in-buildings machinery equipment vehicles plants progress TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Depreciation and impairment losses (cont'd)At1January2019-Accumulateddepreciation-Broughtforwardfrompreceding

year 27,119 151,829 6,465 4,468 475 0 190,356-EffectofadoptingMFRS16 (5,307) 0 0 (502) 0 0 (5,809)-Adjusted 21,812 151,829 6,465 3,966 475 0 184,547-Accumulatedimpairmentlosses 379 7 26 0 0 0 412

22,191 151,836 6,491 3,966 475 0 184,959Depreciation 4,265 8,574 526 488 34 0 13,887Disposals/Write-offs (12) (3,161) (53) (263) 0 0 (3,489)Currencytranslationdifferences (394) (1,733) (68) (13) 0 0 (2,208)At31December2019-Accumulateddepreciation 25,671 155,509 6,870 4,178 509 0 192,737-Accumulatedimpairmentlosses 379 7 26 0 0 0 412

26,050 155,516 6,896 4,178 509 0 193,149

Carrying amountAt1January2018 98,323 51,749 2,827 2,580 352 226 156,057

At31December2018 92,279 55,035 2,368 1,814 317 513 152,326

At31December2019 56,802 57,054 2,019 822 283 535 117,515

Thedetailsoflandandbuildingsareasfollows:-

Group

Freehold Leasehold

land land Buildings Total

RM’000 RM’000 RM’000 RM’000

CostAt1January2018 24,650 33,712 62,447 120,809

Additions 0 0 807 807

Currencytranslationdifferences 0 (683) (1,156) (1,839)

At31December2018 24,650 33,029 62,098 119,777

At1January2019

-Broughtforwardfromprecedingyear 24,650 33,029 62,098 119,777

-EffectofadoptingMFRS16 0 (33,029) 0 (33,029)

-Adjusted 24,650 0 62,098 86,748

Additions 522 0 375 897

Disposals/Write-offs 0 0 (45) (45)

Transfertoinvestmentproperties (3,979) 0 0 (3,979)

Currencytranslationdifferences 0 0 (769) (769)

At31December2019 21,193 0 61,659 82,852

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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4. Property, plant and equipment (cont’d)

Group

Freehold Leaseholdland land Buildings Total

RM’000 RM’000 RM’000 RM’000

Depreciation and impairment lossesAt1January2018Accumulateddepreciation 0 4,331 17,776 22,107Accumulatedimpairmentlosses 0 0 379 379

0 4,331 18,155 22,486Depreciation 0 1,069 4,477 5,546Currencytranslationdifferences 0 (93) (441) (534)At31December2018Accumulateddepreciation 0 5,307 21,812 27,119Accumulatedimpairmentlosses 0 0 379 379

0 5,307 22,191 27,498

At1January2019-Accumulateddepreciation-Broughtforwardfromprecedingyear 0 5,307 21,812 27,119-EffectofadoptingMFRS16 0 (5,307) 0 (5,307)-Adjusted 0 0 21,812 21,812-Accumulatedimpairmentlosses 0 0 379 379

0 0 22,191 22,191Depreciation 0 0 4,265 4,265Disposals/Write-offs 0 0 (12) (12)Currencytranslationdifferences 0 0 (394) (394)At31December2019-Accumulateddepreciation 0 0 25,671 25,671-Accumulatedimpairmentlosses 0 0 379 379

0 0 26,050 26,050

Carrying amountAt1January2018 24,650 29,381 44,292 98,323

At31December2018 24,650 27,722 39,907 92,279

At31December2019 21,193 0 35,609 56,802

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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4. Property, plant and equipment (cont’d)

Company

Furniture,fittingsand

office Motorequipment vehicles Total

RM’000 RM’000 RM’000

CostAt1January2018 223 1,615 1,838Additions 8 0 8At31December2018 231 1,615 1,846

At1January2019-Broughtforwardfromprecedingyear 231 1,615 1,846-EffectofadoptingMFRS16 0 (601) (601)-Adjusted 231 1,014 1,245Additions 21 0 21Disposals/Write-offs (14) (111) (125)At31December2019 238 903 1,141

Accumulated depreciationAt1January2018 141 639 780Depreciation 30 323 353At31December2018 171 962 1,133

At1January2019-Broughtforwardfromprecedingyear 171 962 1,133-EffectofadoptingMFRS16 0 (190) (190)-Adjusted 171 772 943Depreciation 28 141 169Disposals/Write-offs (13) (111) (124)At31December2019 186 802 988

Carrying amountAt1January2018 82 976 1,058

At31December2018 60 653 713

At31December2019 52 101 153

Thecarryingamountsofproperty,plantandequipmentunderhirepurchasefinancingareasfollows:-

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Motorvehicles 0 745 0 411

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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5. Investment properties

Group

Freehold Buildingunderland Buildings construction Total

RM’000 RM’000 RM’000 RM’000

CostAt1January2018 7,285 912 8,294 16,491Additions 0 0 19,927 19,927Borrowingcostscapitalised 0 0 163 163Reclassifications 0 28,384 (28,384) 0At31December2018 7,285 29,296 0 36,581Additions 0 292 0 292Costrefunded 0 (1,955) 0 (1,955)Transferfrominventories 287 0 0 287Transferfromproperty,plantandequipment 3,979 0 0 3,979At31December2019 11,551 27,633 0 39,184

Accumulated depreciationAt1January2018 0 32 0 32Depreciation 0 458 0 458At31December2018 0 490 0 490Depreciation 0 808 0 808At31December2019 0 1,298 0 1,298

Carrying amountAt1January2018 7,285 880 8,294 16,459

At31December2018 7,285 28,806 0 36,091

At31December2019 11,551 26,335 0 37,886

Fair valueEstimatedfairvalueat31December2018 9,500 29,440 0 38,940

Estimatedfairvalueat31December2019 15,597 29,440 0 45,037

Company

Freeholdland

RM’000

CostAt1January2018/31December2018/31December2019 23,125

Fair valueEstimatedfairvalueat31December2018/31December2019 25,310

Thefairvaluesofinvestmentpropertiesweremeasuredbasedonappraisalsperformedbyindependentprofessionalvaluersusingthemarketcomparisonapproach.Theappraisedvalueswerederivedfromobservablepricespersquarefootforcomparablepropertiesinsimilarlocations(i.e.Level2).

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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5. Investment properties (cont’d)

ThecarryingamountsofinvestmentpropertiespledgedassecurityforcreditfacilitiesgrantedtotheGroupareasfollows:-

2019 2018RM’000 RM’000

Freeholdland 6,749 6,749Buildings 25,519 27,958

32,268 34,707

TheGroupandtheCompanyleasesomeofitsfreeholdlandandbuildingstoanassociateandotherrelatedpartyfor20to23years.Theundiscountedleasepaymentstobereceivedareasfollows:-

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Within1year 1,759 n/a 172 n/a1to2years 1,821 n/a 172 n/a2to3years 2,515 n/a 181 n/a3to4years 2,585 n/a 181 n/a4to5years 2,585 n/a 181 n/aAfter5years 36,318 n/a 3,630 n/a

47,583 n/a 4,517 n/a

6. Right-of-use assets

Group

Leasehold Motorland Buildings vehicles Total

RM’000 RM’000 RM’000 RM’000

CostAt1January2019-Broughtforwardfromprecedingyear 0 0 0 0-EffectofadoptingMFRS16 33,029 289 1,247 34,565-Adjusted 33,029 289 1,247 34,565Additions 0 295 327 622Currencytranslationdifferences (455) 0 0 (455)At31December2019 32,574 584 1,574 34,732

Accumulated depreciationAt1January2019-Broughtforwardfromprecedingyear 0 0 0 0-EffectofadoptingMFRS16 5,307 0 502 5,809-Adjusted 5,307 0 502 5,809Depreciation 1,061 231 307 1,599Currencytranslationdifferences (83) 0 0 (83)At31December2019 6,285 231 809 7,325

Carrying amountAt1January2019-Adjusted 27,722 289 745 28,756

At31December2019 26,289 353 765 27,407

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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6. Right-of-use assets (cont’d)

Company

MotorvehiclesRM’000

CostAt1January2019-Broughtforwardfromprecedingyear 0-EffectofadoptingMFRS16 601-Adjusted 601Additions 253At31December2019 854

Accumulated depreciationAt1January2019-Broughtforwardfromprecedingyear 0-EffectofadoptingMFRS16 190-Adjusted 190Depreciation 164At31December2019 354

Carrying amountAt1January2019-Adjusted 411

At31December2019 500

TheGroupacquiredtherightstousetheleaseholdlandasitsprincipalplacesofbusinessfor48to60years.Italsoleasessomebranchofficesandstaffhostelsfor2to5years.Therightstousethemotorvehicleswereacquiredunderhirepurchasefinancingwherebyownershipwillbetransferredbytheendoftheleasetermof5years.

7. Investments in subsidiaries

Company

2019 2018RM’000 RM’000

Unquotedshares-atcost 217,476 217,476Impairmentlosses (4,061) (4,640)

213,415 212,836

Thedetailsofthesubsidiariesareasfollows:-

Nameofsubsidiary

Principalplaceof

business/Countryof

incorporation

Effectiveownershipinterest

Principalactivity2019 2018

GUHElectronicHoldingsSdn.Bhd. Malaysia 100.00% 100.00% Investmentholding

GUHAssetHoldingsSdn.Bhd. Malaysia 100.00% 100.00% Investmentholding

GUHPropertiesSdn.Bhd. Malaysia 100.00% 100.00% Propertydevelopment

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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7. Investments in subsidiaries (cont’d)

Nameofsubsidiary

Principalplaceof

business/Countryof

incorporation

Effectiveownershipinterest

Principalactivity2019 2018

GUHPlantationsSdn.Bhd. Malaysia 100.00% 100.00% Cultivationofoilpalm

GUHUtilitiesHoldingsSdn.Bhd.(formerlyknownasGUHWaterHoldingsSdn.Bhd.)

Malaysia 100.00% 100.00% Investmentholding

GUHLandSdn.Bhd. Malaysia 100.00% 100.00% Investmentholding

GUHCapitalSdn.Bhd. Malaysia 100.00% 100.00% Investmentholding

GUHInternational(HK)PrivateLimited(a)(b) HongKong 100.00% 100.00% Investmentholding

SubsidiariesofGUHElectronicHoldingsSdn.Bhd.

GUHCircuitIndustry(PG)Sdn.Bhd. Malaysia 100.00% 100.00% Manufactureandsaleofhybridprintedcircuitboards

GUHCircuitIndustry(Suzhou)Co.,Ltd. People’sRepublicof

China

100.00% 100.00% Manufactureandsaleofhybridprintedcircuitboards

GrandUnited(BVI)Co.,Ltd.(a)(b) BritishVirginIslands

100.00% 100.00% Dormant

GrandCircuitIndustry(Philippines)Inc.(a) Philippines 100.00% 100.00% Dormant

SubsidiariesofGUHAssetHoldingsSdn.Bhd.

GUHConstructionSdn.Bhd. Malaysia 100.00% 100.00% Dormant

GUHElectrical(BW)Sdn.Bhd. Malaysia 100.00% 100.00% Tradinginelectricalgoodsandappliances

GUHRealtySdn.Bhd. Malaysia 100.00% 100.00% Investmentinrealestateandpropertydevelopment

GUHElectrical(KL)Sdn.Bhd. Malaysia 100.00% 100.00% Dormant

MalaysianMechanicalEngineeringIndustriesSdn.Bhd.

Malaysia 100.00% 100.00% Dormant

TecnovacMarketingSdn.Bhd. Malaysia 100.00% 100.00% Dormant

MilanDiamondSdn.Bhd. Malaysia 100.00% 100.00% Propertyletting

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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7. Investments in subsidiaries (cont’d)

Nameofsubsidiary

Principalplaceof

business/Countryof

incorporation

Effectiveownershipinterest

Principalactivity2019 2018

SubsidiariesofGUHUtilitiesHoldingsSdn.Bhd.(formerlyknownasGUHWaterHoldingsSdn.Bhd.)

GUHWaterPte.Ltd.(a)(b) HongKong 100.00% 100.00% Dormant

TeknoservEngineeringSdn.Bhd. Malaysia 100.00% 100.00% Projectmanagersandcontractorsforinstallationofwaterandwastewatertreatmentplantandconstructionofroad

SubsidiaryofGUHLandSdn.Bhd.

GUHDevelopmentSdn.Bhd. Malaysia 99.46% 99.46% Propertydevelopment

SubsidiaryofGUHInternational(HK)PrivateLimited

GUHElectronic(Yancheng)Co.,Ltd.(a)(b)(c) People’sRepublicof

China

100.00% 100.00% Dormant

SubsidiaryofGUHRealtySdn.Bhd.

JeladanSdn.Bhd. Malaysia 100.00% 100.00% Dormant

(a) Not audited by Crowe Malaysia PLT(b) Not required to be audited, and consolidated using unaudited financial statements(c) Struck off in March 2020

8. Investments in associates

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Unquotedshares-atcost 13,360 13,360 3,023 3,023Shareofpost-acquisitionchangesinnetassets 2,603 4,103 0 0

15,963 17,463 3,023 3,023

Attributableto:-CambodiaUtilitiesPte.Ltd. 7,248 7,323 3,023 3,023StraitsInternationalEducationGroupSdn.Bhd. 8,715 10,140 0 0

15,963 17,463 3,023 3,023

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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8. Investments in associates (cont’d)

Thedetailsoftheassociatesareasfollows:-

Nameofassociate

Principalplaceof

business/Countryof

incorporation

Effectiveownershipinterest

Principalactivity2019 2018

CambodiaUtilitiesPte.Ltd.(“CUPL”) Cambodia 20.00% 20.00% Dormant

StraitsInternationalEducationGroupSdn.Bhd.(“SIEG”)

Malaysia 25.00% 25.00% Investmentholding

SubsidiariesofSIEG

KIMStraitsInternationalEducationSdn.Bhd. Malaysia 25.00% 25.00% Dormant

KKStraitsInternationalEducationSdn.Bhd. Malaysia 25.00% 25.00% Provisionofeducationservices

SGStraitsInternationalEducationSdn.Bhd. Malaysia 25.00% 25.00% Provisionofeducationservices

On21March2016,theGroup,throughGUHCapitalSdn.Bhd.,enteredintoasubscriptionagreementtosubscribefor1,166,667newordinarysharesinSIEG,representing25%oftheenlargedsharecapitalofSIEG,foratotalsubscriptionconsiderationofRM11,000,000payableasfollows:-

(i) MinimumconsiderationofRM5,000,000payableuponexecutionofshareholders’agreement.

(ii) ContingentconsiderationofRM6,000,000payablewhen,andonlywhen,thespecifiedfutureeventsoccur.

Thesummarisedfinancialinformationoftheassociatesisasfollows:-

CUPL SIEGanditssubsidiaries2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Non-currentassets 0 0 57,136 13,434Currentassets 36,585 36,965 7,418 5,675Currentliabilities (345) (350) (15,674) (13,363)Non-currentliabilities 0 0 (48,904) (71)Netassets/(liabilities) 36,240 36,615 (24) 5,675Revenue 0 0 17,017 12,887Profit/(Loss)(representingcomprehensiveincome)forthefinancialyear 5 (1) (5,699) (203)

Thereconciliationof theabovesummarisedfinancial informationtothecarryingamountsof the investments inassociatesisasfollows:-

CUPL SIEG2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Netassets/(liabilities) 36,240 36,615 (24) 5,675Contingentconsideration 0 0 3,000 3,000

36,240 36,615 2,976 8,675Effectiveownershipinterest 20% 20% 25% 25%Shareofnetassets 7,248 7,323 744 2,169Goodwill 0 0 7,971 7,971Carryingamount 7,248 7,323 8,715 10,140

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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9. Other investments

GroupandCompany

2019 2018

RM’000 RM’000

Quotedshares-atfairvalue 1 1

The fair values of quoted investments were directlymeasured using their unadjusted closing prices in activemarkets(i.e.Level1).

10. Inventories

Group

2019 2018

RM’000 RM’000

Non-current assets

Landheldforpropertydevelopment 169,678 167,332

Current assets

Propertydevelopmentcosts 8,118 42,467

Completeddevelopmentunits 76,690 38,751

Rawmaterials 14,300 22,069

Work-in-progress 7,887 7,759

Finishedgoods 9,027 6,796

Consumables 3,185 3,721

Goods-in-transit 1,318 2,683

120,525 124,246

Totalinventories 290,203 291,578

ThecarryingamountsofinventoriespledgedassecurityforcreditfacilitiesgrantedtotheGroupareasfollows:-

2019 2018

RM’000 RM’000

Landheldforpropertydevelopment 24,460 24,460

Propertydevelopmentcosts 0 1,012

24,460 25,472

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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11. Receivables

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Non-current assetsAmountsduefromsubsidiaries 0 0 218,489 212,542Lossallowance 0 0 (20,968) (16,659)

0 0 197,521 195,883

Current assetsTradereceivables:--Relatedparty(a) 55 121 0 0-Unrelatedparties 61,493 69,214 0 0

61,548 69,335 0 0-Lossallowance (2,456) (2,597) 0 0

59,092 66,738 0 0Otherreceivables 3,501 4,490 5 12Dividendreceivable 0 0 7,928 0Amountsduefromsubsidiaries 0 0 397 3,249Lossallowance 0 0 (13) (106)

0 0 384 3,14362,593 71,228 8,317 3,155

Totalreceivables 62,593 71,228 205,838 199,038

(a) Being a company in which a director has substantial financial interest

Trade receivables

TheGroup determines credit risk concentrations in terms of counterparties and geographical areas.As at 31December2019,therewas1(2018:2)majorgroupofcustomersthataccountedfor10%ormoreoftheGroup’stradereceivablesandthetotaloutstandingbalancesduefromthismajorgroupamountedtoRM9,357,000(2018:RM19,514,000).Thecreditriskconcentrationprofilebygeographicalareasoftradereceivablesisasfollows:-

Group2019 2018

RM’000 RM’000

Malaysia 23,843 27,739China 18,371 24,112Indonesia 10,223 12,315Others 9,111 5,169

61,548 69,335

Thecredittermsoftradereceivablesrangefrom15to135days.TheGroupusespastdueinformationtoassessthecreditriskoftradereceivables.Theanalysisbypastduestatusisasfollows:-

Group2019 2018

RM’000 RM’000

Notpastdue 58,130 57,9111to30dayspastdue 508 6,70231to90dayspastdue 283 2,209Morethan90dayspastdue 2,627 2,513

61,548 69,335

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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11. Receivables (cont’d)

Trade receivables (cont’d)

TheGroupdetermines thata trade receivable iscredit-impairedwhen thecustomer isexperiencingsignificantfinancialdifficultyandhasdefaultedinpayments.Unlessotherwisedemonstrated,theGroupgenerallyconsidersadefaulttohaveoccurredwhenthetradereceivableismorethan90dayspastdue.Thegrosscarryingamountofacredit-impairedtradereceivableisdirectlywrittenoffwhenthereisnoreasonableexpectationofrecovery.Thisnormallyoccurswhenthereisreasonableproofofcustomerinsolvency.

TheGroupmeasuresthelossallowancefortradereceivablesatanamountequaltolifetimeexpectedcreditlossesusingthesimplifiedapproachinaccordancewithMFRS9.Thechangesinthelossallowanceareasfollows:-

Group2019 2018

RM’000 RM’000

At1January 2,597 2,980Impairment(gains)/losses (7) 76Write-offs (81) (380)Currencytranslationdifferences (53) (79)At31December 2,456 2,597

Theabovelossallowanceisinrespectofindividuallyassessedcredit-impairedtradereceivables.Basedonthelowhistoricalobserveddefaultrates(adjustedforforward-lookingestimates),theexpectedcreditlossesontradereceivablesthatarenotcredit-impairedarenotconsideredtobematerialandhence,havenotbeenrecognised.

Amounts due from subsidiaries

Theamountsduefromsubsidiariesareunsecured,interestfreeandrepayableondemand.

TheCompanymeasures the lossallowanceat anamountequal to lifetimeexpectedcredit losses.Thegrosscarryingamountsandtherelatedlossallowancechangesareasfollows:-

Company

Notcredit- Credit-impaired impaired TotalRM’000 RM’000 RM’000

2019Grosscarryingamount 107,487 111,399 218,886Lossallowance:--At1January 106 16,659 16,765-Impairmentlosses 1 4,215 4,216-At31December 107 20,874 20,981

107,380 90,525 197,905

Disclosedas:--Non-currentassets 106,997 90,525 197,522-Currentassets 383 0 383

107,380 90,525 197,905

2018Grosscarryingamount 105,274 110,517 215,791Lossallowance:--At1January 111 11,851 11,962-Impairment(gains)/losses (5) 4,808 4,803-At31December 106 16,659 16,765

105,168 93,858 199,026

Disclosedas:--Non-currentassets 102,515 93,368 195,883-Currentassets 2,653 490 3,143

105,168 93,858 199,026

TheCompanydeterminesthatanamountduefromsubsidiaryiscredit-impairedwhenthesubsidiaryisinnegativeequityposition.

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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12. Deferred tax assets and deferred tax liabilities

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

At1January (11,399) (12,094) (1,099) (550)Deferredtax(expense)/incomerelatingtooriginationandreversaloftemporarydifferences (171) 1,308 0 0Deferredtaxexpenserelatingtochangeintaxrate 0 (549) 0 (549)Deferredtaxliabilitiesover/(under)providedinprioryear 400 (201) 0 0Currencytranslationdifferences 90 137 0 0At31December (11,080) (11,399) (1,099) (1,099)

Disclosedas:--Deferredtaxassets 802 1,069 0 0-Deferredtaxliabilities (11,882) (12,468) (1,099) (1,099)

(11,080) (11,399) (1,099) (1,099)

Inrespectof(taxable)/deductibletemporarydifferencesof:--Property,plantandequipment (10,394) (12,610) 0 0-Investmentproperties (293) (126) (1,099) (1,099)-Right-of-useassets (1,738) 0 0 0-Investmentsinassociates (607) (613) 0 0-Biologicalassets 0 (83) 0 0-Inventories 398 276 0 0-Financialinstruments 1,480 1,757 0 0-Leaseliabilities 74 0 0 0

(11,080) (11,399) (1,099) (1,099)

Saveasdisclosedabove,asat 31December2019,deferred tax liabilitiesanddeferred taxassetshavealsoeffectively been recognised and offset against each other by the Group and the Company to the extent ofRM212,000andRM45,000(2018:RM71,000andRM17,000)respectively.Nofurtherdeferredtaxassetshavebeenrecognisedforthefollowingexcessofdeductibletemporarydifferences,unusedcapitalallowancesandtaxlossesovertaxabletemporarydifferences:-

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Deductibletemporarydifferencesof:--Property,plantandequipment 9 0 9 0-Inventories 1,733 1,772 0 0-Contractassetsandcontractliabilities 0 2,129 0 0-Leaseliabilities 253 0 140 0-Provisionforonerouscontract 0 144 0 0-Retirementbenefits 6,544 4,705 6,544 4,705Unusedcapitalallowances 2,556 2,397 1,070 1,060Unusedtaxlosses:--Expiringinyearofassessment2025 41,128 41,732 19,069 19,069-Expiringinyearofassessment2026 5,030 0 2,575 0Taxabletemporarydifferencesof:--Property,plantandequipment (470) (294) 0 (69)-Right-of-useassets (294) 0 (189) 0-Biologicalassets (118) 0 0 0

56,371 52,585 29,218 24,765

Thedeductibletemporarydifferencesandunusedcapitalallowanceshavenoexpirydate.

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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13. Biological assets

Group

2019 2018RM’000 RM’000

At1January 346 397Fairvaluegains 590 1,202Harvestandsales (818) (1,253)At31December 118 346

Estimatedquantities:--Harvestedduringtheyear(metrictonnes) 2,043 2,739-Unharvestedat31December(metrictonnes) 360 1,050

Biologicalassetsrepresentfreshfruitbunches(“FFBs”)growingonoilpalmtreesandaremeasuredatfairvaluelesscostsofdisposal.ThefairvaluesweremeasuredbymultiplyingtheestimatedquantitiesofFFBsofdifferentageattributesbytheobservablecurrentmarketpricesofharvestedFFBsproratedusingalinearinterpolation(i.e.Level2).

14. Contract costs

Group

2019 2018RM’000 RM’000

Costsofobtainingcontracts 116 60

15. Contract assets and contract liabilities

Group

Contract assets

2019 2018RM’000 RM’000

Saleofgoods(Note(i)) 4,007 4,106Propertydevelopment(Note(ii)) 2,074 4,024Constructioncontracts(Note(iii)) 1,839 0

7,920 8,130

Contract liabilities

2019 2018RM’000 RM’000

Constructioncontracts(Note(iii)) 2,393 8,353

(i) Contractassetsfromsaleofgoods

2019 2018RM’000 RM’000

At1January 4,106 4,423Reclassificationtoreceivables (4,106) (4,423)Excessofrevenuerecognisedoverreceivables 4,007 4,106At31December 4,007 4,106

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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15. Contract assets and contract liabilities (cont’d)

(i) Contractassetsfromsaleofgoods(cont’d)

As disclosed inNote 2.21, theGroup generally satisfies its performance obligations at a point in timeupondeliveryofgoods.Anyconditionalrighttoconsiderationafteraperformanceobligationissatisfiedispresentedascontractasset.

TheGroupmeasuresthelossallowanceforcontractassetsatanamountequaltolifetimeexpectedcreditlossesusing thesimplifiedapproach inaccordancewithMFRS9.Basedonthe lowhistoricalobserveddefaultrates(adjustedforforward-lookingestimates),theexpectedcreditlossesoncontractassetsarenotconsideredtobematerialandhence,havenotbeenrecognised.

(ii) Contractassetsfrompropertydevelopment

2019 2018RM’000 RM’000

At1January 4,024 7,761Revenuerecognisedduringtheyear 9,985 16,879Progressbillingsduringtheyear (11,935) (20,616)At31December 2,074 4,024

AsdisclosedinNote2.21,theGroupgenerallysatisfiesitsperformanceobligationsovertimeduringthedevelopmentperiod.Anyexcessof revenue recognisedoverprogressbillings ispresentedas contractasset.

TheGroupmeasuresthelossallowanceforcontractassetsatanamountequaltolifetimeexpectedcreditlossesusing thesimplifiedapproach inaccordancewithMFRS9.Basedonthe lowhistoricalobserveddefaultrates(adjustedforforward-lookingestimates),theexpectedcreditlossesoncontractassetsarenotconsideredtobematerialandhence,havenotbeenrecognised.

Remainingperformanceobligations

Asat31December2019,theaggregatetransactionpriceallocatedtotheremainingperformanceobligationsamountedtoRM4,300,000(2018:RM2,900,000)andtheGroupexpectstorecognisethisrevenuewhentheprojectsarecompletedoverthenext1to2(2018:1to2)years.

(iii) Contractassetsandcontractliabilitiesfromconstructioncontracts

2019 2018RM’000 RM’000

At1January (8,353) (3,135)Revenuerecognisedduringtheyear 16,430 29,041Progressbillingsduringtheyear (6,979) (34,259)Considerationreceivedinadvance (1,652) 0At31December (554) (8,353)

Disclosedas:--Contractassets 1,839 0-Contractliabilities (2,393) (8,353)

(554) (8,353)

AsdisclosedinNote2.21,theGroupgenerallysatisfiesitsperformanceobligationsovertimeduringtheconstruction period.Any excess of revenue recognised over progress billings is presented as contractasset,whereasanydeficitispresentedascontractliability.

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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15. Contract assets and contract liabilities (cont’d)

(iii) Contractassetsandcontractliabilitiesfromconstructioncontracts(cont’d)

TheGroupmeasuresthelossallowanceforcontractassetsatanamountequaltolifetimeexpectedcreditlossesusing thesimplifiedapproach inaccordancewithMFRS9.Basedonthe lowhistoricalobserveddefaultrates(adjustedforforward-lookingestimates),theexpectedcreditlossesoncontractassetsarenotconsideredtobematerialandhence,havenotbeenrecognised.

Remainingperformanceobligations

Asat31December2019,theaggregatetransactionpriceallocatedtotheremainingperformanceobligationsamountedtoRM62,945,000(2018:RM44,216,000)andtheGroupexpectstorecognisethisrevenuewhentheprojectsarecompletedoverthenext1to2(2018:1to2)years.

16. Cash and cash equivalents

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Highlyliquidinvestmentsinmoneymarketfunds 858 1,827 858 1,827Termdeposits 78,613 71,604 2,263 3,324Cashandbankbalances 22,895 33,083 395 248

102,366 106,514 3,516 5,399

Cashandcashequivalentsareplacedwithreputablefinancial institutionswithlowcreditrisk.Accordingly,theirexpectedcreditlossesarenotconsideredtobematerialandhence,havenotbeenrecognised.

CertaintermdepositsoftheGrouptotallingRM407,000(2018:RM3,584,000)havebeenpledgedassecurityforbankingfacilitiesgrantedtotheGroup.Accordingly,thesetermdepositsarenotfreelyavailableforuse.

Theeffectiveinterestratesoftermdepositsasat31December2019rangedfrom1.00%to3.80%(2018:0.05%to4.85%)perannum.

Forthepurposeofstatementofcashflows,cashandcashequivalentsarepresentednetofbankoverdraftandpledgeddepositsasfollows:-

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Cashandcashequivalents 102,366 106,514 3,516 5,399Bankoverdraft (665) 0 0 0Termdepositspledgedassecurity (407) (3,584) 0 0

101,294 102,930 3,516 5,399

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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17. Payables

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Tradepayables:--Relatedparty(a) 1,660 1,595 0 0-Relatedparty(b) 636 636 0 0-Unrelatedparties 45,127 56,372 0 0

47,423 58,603 0 0Otherpayables:--Relatedparty(b) 600 241 0 0-Unrelatedparties 19,201 20,485 1,932 1,634

19,801 20,726 1,932 1,634Amountsduetosubsidiaries 0 0 13,028 13,040Amountduetoassociate 7,166 7,241 7,166 7,241

74,390 86,570 22,126 21,915Contingentconsideration-atfairvalue 2,962 2,957 0 0

77,352 89,527 22,126 21,915

(a) Being a company in which a director has substantial financial interest(b) Being companies in which close family members of certain directors have substantial financial interests

Payablesaregenerallyshort-terminnatureorrepayableondemandandtheircarryingamountswillapproximatetotheremainingcontractualundiscountedcashflows.

Trade and other payables

Thecredittermsoftradeandotherpayablesrangefrom30to120days.

Amounts due to subsidiaries and associate

Theamountsduetosubsidiariesandassociateareunsecured,interestfreeandrepayableondemand.

Contingent considerationThisrepresentsthebalancecontingentconsiderationpayabletoSIEGpursuanttothesubscriptionagreementasdisclosedinNote8.

18. Loans and borrowings

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

SecuredHirepurchasepayables 0 601 0 320Bankoverdraft 665 0 0 0Termloans 37,201 40,522 0 0UnsecuredBankeracceptances 1,365 0 0 0Revolvingcredit 7,000 10,000 0 0Termloans 13,103 15,694 0 0

59,334 66,817 0 320

Disclosedas:--Currentliabilities 23,772 22,508 0 116-Non-currentliabilities 35,562 44,309 0 204

59,334 66,817 0 320

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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18. Loans and borrowings (cont’d)

Hirepurchasepayablesweresecuredagainsttheassetsacquiredthereunder(Note4).Othersecuredloansandborrowingsaresecuredagainstcertaininvestmentproperties(Note5)andinventories(Note10).

Theeffectiveinterestratesofloansandborrowingsasat31December2019rangedfrom4.32%to5.82%(2018:4.61%to6.16%)perannum.

Except forhirepurchasepayablesand term loans, loansandborrowingsaregenerallyshort-term innatureorrepayableondemandandtheircarryingamountswillapproximatetotheremainingcontractualundiscountedcashflows.

Hire purchase payables

Hirepurchasepayableswererepayableover5years.Therepaymentanalysisisasfollows:-

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Minimumhirepurchasepayments:--Within1year 0 241 0 128-1to5years 0 403 0 217Totalcontractualundiscountedcashflows 0 644 0 345Futurefinancecharges 0 (43) 0 (25)Presentvalueofhirepurchasepayables:--Within1year 0 217 0 116-1to5years 0 384 0 204

0 601 0 320

The fair values of hire purchase payables weremeasured using present value technique by discounting theexpectedfuturecashflowsusingobservablecurrenttmarketinterestratesforsimilarliabilities(i.e.Level2).Thefairvaluesmeasuredwereconsideredtobereasonablyclosetothecarryingamountsreportedastheobservablecurrentmarketinterestratesalsoapproximatedtotheeffectiveinterestratesofhirepurchasepayables.

Term loans

Termloansarerepayableover1to15years.Therepaymentanalysisisasfollows:-

Group2019 2018

RM’000 RM’000

Grossloaninstalments:--Within1year 16,931 14,436-1to5years 22,189 30,171-After5years 22,222 24,762Totalcontractualundiscountedcashflows 61,342 69,369Futurefinancecharges (11,038) (13,153)Presentvalueoftermloans 50,304 56,216

Thefairvaluesoftermloansweremeasuredusingpresentvaluetechniquebydiscountingtheexpectedfuturecashflowsusingobservablecurrentmarketinterestratesforsimilarliabilities(i.e.Level2).Thefairvaluesmeasuredwereconsideredtobereasonablyclosetothecarryingamountsreportedastheobservablecurrentmarketinterestratesalsoapproximatedtotheeffectiveinterestratesoftermloans.

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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19. Lease liabilities

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Grossleaseliabilities:--Within1year 532 0 140 0-1to5years 533 0 288 0Totalcontractualundiscountedcashflows 1,065 0 428 0Futurefinancecharges (62) 0 (31) 0Presentvalueofleaseliabilities 1,003 0 397 0

Disclosedas:--Currentliabilities 505 0 124 0-Non-currentliabilities 498 0 273 0

1,003 0 397 0

Theincrementalborrowingratesappliedtoleaseliabilitiesasat31December2019rangedfrom4.39%to5.00%perannum.

20. Derivatives

Group

2019 2018RM’000 RM’000

Forwardexchangecontracts-atfairvalue 0 37

Forwardexchangecontractsareusedtohedgetheexposuretocurrencyrisk.TheGroupdoesnotapplyhedgeaccounting.Asat31December2018,theGrouphadcontractswithafinancialinstitutionduewithin1yeartobuyUSD600,000andsellRM2,521,000atcontractualforwardrates.

Thefairvaluesofforwardexchangecontractswerequotedbythefinancialinstitution,whichnormallymeasuredthefairvaluesusingpresentvaluetechniquebydiscountingthedifferencesbetweencontractualforwardpricesandobservablecurrentmarketforwardpricesusingrisk-freeinterestrate(i.e.Level2).

21. Provision for onerous contract

Group

2019 2018RM’000 RM’000

At1January 144 1,004Provisionreversedduringtheyear (144) (860)At31December 0 144

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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22. Retirement benefits

GroupandCompany

2019 2018RM’000 RM’000

At1January 4,705 4,163Definedbenefitcosts 1,839 542At31December 6,544 4,705

Beingpresentvalueofdefinedbenefitobligationsdisclosedas:--Currentliabilities 0 0-Non-currentliabilities 6,544 4,705

6,544 4,705

Thecomponentsofdefinedbenefitcostsareasfollows:-

2019 2018RM’000 RM’000

Currentservicecost 29 542Interestexpense 228 0Pastservicecost 1,297 0Remeasurementofdefinedbenefitliability:--Actuariallossesarisingfromchangesinfinancialassumptions 285 0

1,839 542

Theprincipalactuarialassumptionsusedtodeterminethepresentvalueofthedefinedbenefitobligationsareasfollows:-

2019 2018% %

Discountrate 4.10 4.94Futuresalarygrowth 4.00 4.00

The following tabledemonstrates thesensitivityof thedefinedbenefitobligations tochanges ineachprincipalactuarialassumptionthatwerereasonablypossibleattheendofthereportingperiod,withallothervariablesheldconstant:-

Increase/(Decrease)indefinedbenefitobligations

2019 2018RM’000 RM’000

Increaseindiscountrateby1% (419) n/aDecreaseindiscountrateby1% 461 n/aIncreaseinfuturesalarygrowthby1% 457 n/aDecreaseinfuturesalarygrowthby1% (423) n/a

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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23. Share capital

2019 2018RM’000 RM’000

Issued and fully paid277,905,000ordinaryshareswithnoparvalue 277,992 277,992

Treasury shares

TheshareholdersoftheCompany,byaresolutionpassedattheannualgeneralmeetingheldon19May2010,approved theCompany’splan topurchase itsownshares.Thedetailsof thesharespurchased fromtheopenmarketusinginternallygeneratedfundsandheldastreasurysharesduringthefinancialyearareasfollows:-

2019 2018No.ofordinary

shares’000

CostRM’000

No.ofordinaryshares’000

CostRM’000

At1January 3,543 4,546 3,543 4,546Sharesdistributedassharedividends (3,427) (4,398) 0 0At31December 116 148 3,543 4,546

Duringthefinancialyear,theCompanydistributed3,427,000treasurysharesassharedividendsonthebasisof1treasuryshareforevery80existingordinarysharesinissue.

Thenumberofoutstandingsharesinissueafterexcludingthetreasurysharesisasfollows:-

2019 2018No.ofordinary

shares’000

No.ofordinaryshares’000

At1January 274,362 274,362Sharesdistributedassharedividends 3,427 0At31December 277,789 274,362

24. Non-controlling interests (“NCI”)

Group

AccumulatedNCI LossallocatedtoNCI2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

GUHDevelopmentSdn.Bhd. (11) (3) (8) (5)

ThedetailsofthesubsidiarythathasNCIareasfollows:-

Nameofsubsidiary

Principalplaceof

business/Countryof

incorporation

EffectiveownershipinterestheldbyNCI

Principalactivity2019 2018

GUHDevelopmentSdn.Bhd. Malaysia 0.54% 0.54% Propertydevelopment

ThesummarisedfinancialinformationoftheabovesubsidiaryhasnotbeendisclosedasitsNCIarenotmaterialtotheGroup.

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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25. Revenue

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Revenuefromcontractswithcustomers:--Saleofgoods 295,114 291,649 0 0-Saleofagriculturalproduce 818 1,253 0 0-Renderingofservices 0 0 5,210 5,210-Propertydevelopment 9,985 16,879 0 0-Saleofcompleteddevelopmentunits 11,884 9,768 0 0-Constructioncontracts 16,430 29,041 0 0

334,231 348,590 5,210 5,210Othersourcesofrevenue:--Dividendincome 0 0 12,400 13,468-Operatingleaseincome 1,759 534 918 44

1,759 534 13,318 13,512335,990 349,124 18,528 18,722

Disaggregation of revenue from contracts with customers

Group

Operatingsegments(Note33)Manufacture

ofprinted Property Saleof Waterandcircuit develop- electrical Cultivation wastewaterboards ment appliances ofoilpalm treatment TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2019

Majorproducts/services:--Printedcircuitboards 289,637 0 0 0 0 289,637-Propertiesunderdevelopment 0 9,985 0 0 0 9,985-Completeddevelopmentunits 0 11,884 0 0 0 11,884-Electricalappliances 0 0 5,477 0 0 5,477-Freshfruitbunches 0 0 0 818 0 818-Managementandconstructionofwaterandwastewatertreatmentplant 0 0 0 0 16,430 16,430

289,637 21,869 5,477 818 16,430 334,231

Geographicalareas:--Malaysia 92,057 21,869 5,477 818 16,430 136,651-China 92,103 0 0 0 0 92,103-Indonesia 41,909 0 0 0 0 41,909-Singapore 42,020 0 0 0 0 42,020-Others 21,548 0 0 0 0 21,548

289,637 21,869 5,477 818 16,430 334,231

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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25. Revenue (cont’d)

Disaggregation of revenue from contracts with customers (cont’d)

Group

Operatingsegments(Note33)Manufacture

ofprinted Property Saleof Waterandcircuit develop- electrical Cultivation wastewaterboards ment appliances ofoilpalm treatment TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2019

Timingofrevenuerecognition:--Overtime 0 9,985 0 0 16,430 26,415-Atapointintime 289,637 11,884 5,477 818 0 307,816

289,637 21,869 5,477 818 16,430 334,231

2018

Majorproducts/services:--Printedcircuitboards 284,030 0 0 0 0 284,030-Propertiesunderdevelopment 0 16,879 0 0 0 16,879-Completeddevelopmentunits 0 9,768 0 0 0 9,768-Electricalappliances 0 0 7,619 0 0 7,619-Freshfruitbunches 0 0 0 1,253 0 1,253-Managementandconstructionofwaterandwastewatertreatmentplant 0 0 0 0 29,041 29,041

284,030 26,647 7,619 1,253 29,041 348,590

Geographicalareas:--Malaysia 98,871 26,647 7,619 1,253 29,041 163,431-China 111,117 0 0 0 0 111,117-Indonesia 39,086 0 0 0 0 39,086-Singapore 25,861 0 0 0 0 25,861-Others 9,095 0 0 0 0 9,095

284,030 26,647 7,619 1,253 29,041 348,590

Timingofrevenuerecognition:--Overtime 0 16,879 0 0 29,041 45,920-Atapointintime 284,030 9,768 7,619 1,253 0 302,670

284,030 26,647 7,619 1,253 29,041 348,590

Company

InformationaboutdisaggregationofrevenuehasnotbeendisclosedastheCompanyderivesrevenuemainlyfromrenderingmanagementservicestosubsidiaries.

26. Impairment gains/(losses) on financial assets

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Tradereceivablesfromcontractswithcustomers 7 (76) 0 0Amountsduefromsubsidiaries 0 0 (4,216) (4,803)

7 (76) (4,216) (4,803)

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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27. Profit before tax

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Profitbeforetaxisarrivedataftercharging:-

Amortisationofcontractcosts 382 703 0 0Auditors’remuneration:--Currentyear 254 245 53 50-Prioryear 23 0 0 0Depreciationofinvestmentproperties 808 458 0 0Depreciationofproperty,plantandequipment 13,887 15,112 169 353Depreciationofright-of-useassets 1,599 0 164 0Directoperatingexpenditureforinvestmentpropertiesgeneratingrentalincome 43 41 28 28Employeebenefitsexpense(Note28) 74,552 72,381 9,073 7,425Fairvaluechangesinbiologicalassets(net) 228 51 0 0Fairvaluelossesonfinancialinstrumentsmandatorilymeasuredatfairvaluethroughprofitorloss 41 259 0 233Feeexpenseforfinancialinstrumentsnotmeasuredatfairvaluethroughprofitorloss 387 325 1 2Interestexpenseforfinancialliabilitiesnotmeasuredatfairvaluethroughprofitorloss 3,252 3,098 0 19Interestexpenseforleaseliabilities 53 0 20 0Inventorieswrittendown 565 273 0 0Leaseexpenserelatingto:--Short-termleases 323 0 108 0-Leasesoflow-valueassets(otherthanshort-termleases) 6 0 0 0-Others 0 417 0 108Property,plantandequipmentwrittenoff 34 9 1 0Unrealisedlossonforeignexchange 192 304 0 154

andcrediting:-

Gainondisposalofproperty,plantandequipment 21 24 60 0

Gainonforeignexchange:--Realised 534 804 0 0-Unrealised 0 0 75 0Interestincomeforfinancialassetsmeasuredatamortisedcost 2,249 2,393 88 245Operatingleaseincomefrom:--Investmentproperties 1,759 529 918 44-Others 0 5 0 0Reversalofimpairmentlossoninvestmentsinsubsidiaries(a) 0 0 579 7,368Reversalofinventorieswrittendown 448 309 0 0

(a) Included in other income

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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28. Employee benefits expense (including directors’ remuneration)

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

DirectorsoftheCompany:--Fees 632 627 594 594-Othershort-termemployeebenefits 3,655 3,359 3,655 3,359-Definedcontributionplans 652 613 652 613-Definedbenefitplans 1,554 542 1,554 542

6,493 5,141 6,455 5,108Directorsofsubsidiaries:--Fees 49 42 0 0-Othershort-termemployeebenefits 1,141 885 399 262-Definedcontributionplans 99 75 46 31

1,289 1,002 445 293Otheremployees:--Short-termemployeebenefits 61,598 60,970 1,950 1,813-Definedcontributionplans 5,172 5,268 223 211

66,770 66,238 2,173 2,02474,552 72,381 9,073 7,425

Theestimatedmoneyvalueofbenefitsreceivedorreceivablebycertaindirectorsotherwisethanincashisasfollows:-

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

DirectorsoftheCompany 44 56 44 56Directorsofsubsidiaries 22 22 17 17

66 78 61 73

Thedirectors’remunerationrepresentstheentirekeymanagementpersonnelcompensationoftheGroupandtheCompanyastherewerenootherkeymanagementpersonnelapartfromallthedirectorswhohavetheauthorityandresponsibility,directlyorindirectly,forplanning,directingandcontrollingtheactivitiesoftheGroupandtheCompany.

29. Tax expense

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Taxbasedonresultsfortheyear:--Currenttax 2,517 4,173 0 0-Deferredtax 171 (759) 0 549

2,688 3,414 0 549Tax(over)/underprovidedinprioryear:--Currenttax (202) (132) 0 0-Deferredtax (400) 201 0 0

2,086 3,483 0 549

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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29. Tax expense (cont’d)

Thenumericalreconciliationbetweentheproductofprofitbeforetaxmultipliedbytheapplicabletaxrate,whichisthestatutoryincometaxrate,andthetaxexpenseisasfollows:-

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Profitbeforetax 7,096 797 3,626 11,531

Taxatapplicabletaxrateof24% 1,703 191 870 2,767Non-deductibleexpenses 2,232 1,464 1,203 1,440Non-taxableincome (79) (56) (3,142) (5,017)Reinvestmentallowancesclaimed (2,122) (432) 0 0Effectofdifferentialtaxrates 45 640 0 549Increaseinunrecogniseddeferredtaxassets 909 1,607 1,069 810Tax(over)/underprovidedinprioryear (602) 69 0 0Taxexpense 2,086 3,483 0 549

30. Earnings/(Loss) per share

Group

Thebasicearnings/(loss)pershareiscalculatedbydividingtheGroup’sprofit/(loss)forthefinancialyearattributabletoownersoftheCompanybytheweightedaveragenumberofordinarysharesinissueduringthefinancialyearasfollows:-

2019 2018(Restated)

Profit/(Loss)forthefinancialyearattributabletoownersoftheCompany(RM’000) 5,018 (2,681)

Numberofsharesinissueat1January(’000) 274,362 274,362Effectofsharedividends(a)(’000) 3,427 3,427Weightedaveragenumberofsharesinissue(’000) 277,789 277,789

Basicearnings/(loss)pershare(sen) 1.81 (0.97)

(a) The calculation of basic loss per share for the previous financial year has been adjusted retrospectively to reflect the changes in the number of shares as a result of the share dividends.

Thedilutedearnings/(loss)pershareequalsthebasicearnings/(loss)pershareastheCompanydidnothaveanydilutivepotentialordinarysharesduringthefinancialyear.

31. Notes to statements of cash flows

Acquisition of right-of-use assets

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Costofright-of-useassetsacquired 622 0 253 0Acquisitionbymeansofleases (581) 0 (227) 0Netcashdisbursed 41 0 26 0

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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31. Notes to statements of cash flows (cont’d)

Short-term loans and borrowings

Group2019 2018

RM’000 RM’000

At1January 10,000 14,832Netcashflowchanges (1,635) (4,832)At31December 8,365 10,000

Representedby:--Bankeracceptances(Note18) 1,365 0-Revolvingcredit(Note18) 7,000 10,000

8,365 10,000

Term loans

Group2019 2018

RM’000 RM’000

At1January 56,216 28,994Drawdowns 6,214 36,874Repayments (12,160) (9,671)Otherchanges 34 19At31December(Note18) 50,304 56,216

Lease liabilities

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

At1January-Broughtforwardfromprecedingyear 0 0 0 0-EffectofadoptingMFRS16 890 0 320 0-Adjusted 890 0 320 0Additions 581 0 227 0Payments (468) 0 (150) 0At31December(Note19) 1,003 0 397 0

Thetotalcashoutflowforleasesisasfollows:-

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Operating activitiesLeaseexpenserecognisedinprofitorloss(Note27) 329 n/a 108 n/a

Investing activitiesAcquisitionofright-of-useassets 41 n/a 26 n/aFinancing activitiesInterestportionofleaseliabilities(Note27) 53 n/a 20 n/aPrincipalportionofleaseliabilities 468 n/a 150 n/a

891 n/a 304 n/a

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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31. Notes to statements of cash flows (cont’d)

Hire purchase payables

Group Company

2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

At1January

-Broughtforwardfromprecedingyear 601 854 320 468

-EffectofadoptingMFRS16 (601) 0 (320) 0

-Adjusted 0 854 0 468

Repayments 0 (253) 0 (148)

At31December(Note18) 0 601 0 320

32. Related party disclosures

Otherthanthedirectors’remunerationasdisclosedinNote28,transactionswithrelatedpartiesduringthefinancialyearareasfollows:-

Group Company

2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Dividendsdeclaredfromsubsidiaries 0 0 12,400 13,468

Renderingofmanagementservicestosubsidiaries 0 0 5,210 5,210

Rentalchargedbysubsidiary 0 0 108 108

Rentalchargedtosubsidiary 0 0 746 39

Purchaseofgoodsfromotherrelatedparty(a) 11,328 9,873 0 0

Purchaseofgoodsfromotherrelatedparty(b) 0 18 0 0

Acquisitionofproperty,plantandequipmentfromotherrelatedparty(a) 12 40 0 0

Acquisitionofproperty,plantandequipmentfromotherrelatedparty(b) 186 30 0 0

Receivingofservicesfromotherrelatedparty(b) 1,570 976 0 0

Rentalchargedbyotherrelatedparty(a) 114 126 0 0

Rentalchargedtootherrelatedparty(a) 172 5 172 5

Rentalchargedtoassociate 1,587 529 0 0

Saleofgoodstootherrelatedparty(a) 2,435 1,858 0 0

(a) Being companies in which certain directors have substantial financial interests(b) Being companies in which close family members of certain directors have substantial financial interests

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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33. Segment reporting

Group

Operating segments

Formanagementpurposes,theGroupisorganisedintobusinessunitsbasedontheirproductsandservicesandhasthefollowingreportableoperatingsegments:-

(i) Manufactureofprintedcircuitboards(ii) Propertydevelopment(iii) Saleofelectricalappliances(iv) Cultivationofoilpalm(v) Waterandwastewatertreatment

Nooperatingsegmentshavebeenaggregatedtoformtheabovereportablesegments.

TheaccountingpoliciesandmeasurementbasesofthesegmentitemsreportedarethesameasthosedisclosedinNote2.Transferpricesbetweenoperatingsegmentsareonanarm’slengthbasisinamannersimilartotransactionswithexternalparties.

Manufacture Unallocatedofprinted Property Saleof Waterand non-

circuit develop- electrical Cultivation wastewater operatingboards ment appliances ofoilpalm treatment segments TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2019

Segmentassets 301,780 266,338 3,855 18,241 16,139 43,563 649,916Investmentsinassociates 0 0 0 0 0 15,963 15,963Incometaxassets 0 1,199 3 60 18 0 1,280Totalassets 301,780 267,537 3,858 18,301 16,157 59,526 667,159

Additionstonon-currentassets(net) 11,710 27 522 0 7 (1,617) 10,649

Segmentliabilities 40,408 15,970 618 40 9,514 19,739 86,289Loansandborrowings 20,103 12,745 0 0 1,365 25,121 59,334Leaseliabilities 148 458 0 0 0 397 1,003Incometaxliabilities 11,828 114 7 0 0 1,620 13,569Totalliabilities 72,487 29,287 625 40 10,879 46,877 160,195

Externalrevenue 289,637 21,869 5,477 818 16,430 1,759 335,990Intersegmentrevenue 0 103 20 0 2,864 18,356 21,343Totalrevenue 289,637 21,972 5,497 818 19,294 20,115 357,333

Segmentprofit/(loss) 12,745 2,445 (141) (1,075) 124 (4,522) 9,576Interestincome 1,784 152 12 0 213 88 2,249Interestexpense (1,180) (738) 0 0 (54) (1,333) (3,305)Shareofassociates’loss 0 0 0 0 0 (1,424) (1,424)Profit/(Loss)beforetax 13,349 1,859 (129) (1,075) 283 (7,191) 7,096Tax(expense)/income (1,512) (755) (3) 168 (14) 30 (2,086)Profit/(Loss)forthefinancialyear 11,837 1,104 (132) (907) 269 (7,161) 5,010

Non-cashincome 436 0 12 0 0 0 448Depreciation 14,296 477 35 66 311 1,109 16,294Othernon-cashexpenses 863 0 0 228 2 1,485 2,578

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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33. Segment reporting (cont’d)

Operating segments (cont’d)

Manufacture Unallocatedofprinted Property Saleof Waterand non-

circuit develop- electrical Cultivation wastewater operatingboards ment appliances ofoilpalm treatment segments TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2018

Segmentassets 312,600 266,539 3,942 23,138 18,783 43,460 668,462Investmentsinassociates 0 0 0 0 0 17,463 17,463Incometaxassets 414 2,871 15 54 426 0 3,780Totalassets 313,014 269,410 3,957 23,192 19,209 60,923 689,705

Additionstonon-currentassets 13,099 68 0 0 6 19,935 33,108

Segmentliabilities 49,097 19,208 1,157 85 14,677 18,542 102,766Loansandborrowings 25,694 16,173 0 0 0 24,950 66,817Incometaxliabilities 12,459 116 8 168 0 1,660 14,411Totalliabilities 87,250 35,497 1,165 253 14,677 45,152 183,994

Externalrevenue 284,030 26,647 7,619 1,253 29,041 534 349,124Intersegmentrevenue 0 110 8 0 181 18,717 19,016Totalrevenue 284,030 26,757 7,627 1,253 29,222 19,251 368,140

Segmentprofit/(loss) 7,621 594 70 214 (2,215) (4,731) 1,553Interestincome 1,917 134 6 0 58 278 2,393Interestexpense (1,168) (1,177) 0 0 0 (753) (3,098)Shareofassociates'loss 0 0 0 0 0 (51) (51)Profit/(Loss)beforetax 8,370 (449) 76 214 (2,157) (5,257) 797Taxexpense (2,249) (529) (1) (36) 0 (668) (3,483)Profit/(Loss)forthefinancialyear 6,121 (978) 75 178 (2,157) (5,925) (2,686)

Non-cashincome 280 0 29 0 0 0 309Depreciation 13,977 335 36 68 375 779 15,570Othernon-cashexpenses 569 0 0 51 (51) 945 1,514

Geographical information

Inpresenting informationaboutgeographicalareas,segmentrevenueisbasedonthegeographical locationofcustomerswhereassegmentassetsarebasedonthegeographicallocationofassets.

Externalrevenue Non-currentassets2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Malaysia 138,410 163,965 309,035 307,040China 92,103 111,117 44,201 48,709Indonesia 41,909 39,086 0 0Singapore 42,020 25,861 0 0Othercountries 21,548 9,095 0 0

335,990 349,124 353,236 355,749

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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33. Segment reporting (cont’d)

Major customers

For the financial year ended 31December 2019, therewere 2 (2018 : nil)major groups of customers of themanufactureofprintedcircuitboardssegmentthatcontributed10%ormoreoftheGroup’stotalrevenueandthetotalrevenuegeneratedfromthesemajorgroupsamountedtoRM74,316,000(2018:nil).

34. Contractual commitments

Group

2019 2018RM’000 RM’000

Acquisitionofproperty,plantandequipment 3,422 1,747

35. Guarantee contracts

Company

Financial guarantee contracts

TheCompanyhasenteredintofinancialguaranteecontractstoprovidefinancialguaranteestofinancialinstitutionsandtradesuppliersforcreditfacilitiesgrantedtocertainsubsidiariesuptoatotallimitofRM149,748,000(2018:RM162,148,000).Thetotalutilisationofthesecreditfacilitiesasat31December2019amountedtoRM89,607,000(2018:RM92,341,000).Nomaturityanalysisispresentedforthefinancialguaranteecontractsastheentireamountcouldbecalledatanytimeintheeventofdefaultbythesubsidiaries.

The aforementioned financial guarantee contracts should have been recognised in the statement of financialpositioninaccordancewiththerecognitionandmeasurementpoliciesasstatedinNote2.16.Afterconsideringthattheprobabilityofthesubsidiariesdefaultingonthecreditlinesisremote,thefinancialguaranteecontractshavenotbeenrecognisedasthefairvaluesoninitialrecognitionarenotexpectedtobematerial.

Performance guarantee contract

TheCompanyhasalsoentered intoaperformanceguaranteecontractup toa limitofRM35,736,000 (2018 :RM35,736,000)toguaranteethedueperformanceofallthecontractworksbyasubsidiaryinawatertreatmentproject.

36. Financial risk management

TheactivitiesoftheGroupexposeittocertainfinancialrisks,includingcreditrisk,liquidityrisk,currencyriskandinterestraterisk.TheoverallfinancialriskmanagementobjectiveoftheGroupistoensurethatadequatefinancialresourcesareavailableforbusinessdevelopmentwhilstminimisingthepotentialadverseimpactsoffinancialrisksonitsfinancialposition,performanceandcashflows.

Theaforementionedfinancialriskmanagementobjectiveanditsrelatedpoliciesandprocessesexplainedbelowhaveremainedunchangedfromthepreviousfinancialyear.

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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36. Financial risk management (cont’d)

Credit risk

TheGroup’sexposuretocreditriskarisesmainlyfromreceivables,derivativecontractsanddepositsplacedwithfinancial institutions.Themaximum credit risk exposure of these financial assets is best represented by theirrespectivecarryingamountsinthestatementoffinancialposition.TheCompanyisalsoexposedtocreditriskinrespectofitsfinancialguaranteesprovidedforcreditfacilitiesgrantedtocertainsubsidiaries.ThemaximumcreditriskexposureofthesefinancialguaranteesisthetotalutilisationofthecreditfacilitiesgrantedasdisclosedinNote35.

TheGroupmanagesitscreditriskexposureofreceivablesbyassessingcounterparties’financialstandingsonanongoingbasis,settingandmonitoringcounterparties’ limitsandcreditterms.ThequantitativeinformationaboutsuchcreditriskexposureisdisclosedinNote11.AstheGrouponlydealswithreputablefinancialinstitutions,thecreditriskassociatedwithderivativecontractsanddepositsplacedwiththemislow.

Liquidity risk

TheGroup’sexposuretoliquidityriskrelatestoitsabilitytomeetobligationsassociatedwithfinancialliabilitiesasandwhentheyfalldue.Theremainingcontractualmaturitiesoffinancialliabilitiesaredisclosedintheirrespectivenotes.

TheGrouppractisesprudentliquidityriskmanagementtominimisethemismatchoffinancialassetsandliabilitieswhilstmaintainingsufficientcashandtheavailabilityoffundingthroughstandbycreditfacilities.

Currency risk

TheGroup’sexposuretocurrencyriskarisesmainly fromtransactionsentered intoby individualentitieswithintheGroupincurrenciesotherthantheirfunctionalcurrencies.ThemajorfunctionalcurrencieswithintheGroupareRinggitMalaysia(“RM”)andRenminbi(“RMB”),whereasthemajorforeigncurrencytransactedisUSDollar(“USD”).Thegrosscarryingamountsofforeigncurrencydenominatedmonetaryitemsattheendofthereportingperiodareasfollows:-

Group CompanyDenominatedinUSD DenominatedinUSD

2019 2018 2019 2018RM’000 RM’000 RM’000 RM’000

Receivables 33,521 31,787 0 0Cashandcashequivalents 36,039 15,849 4 4Payables (23,509) (29,691) (7,166) (7,241)

46,051 17,945 (7,162) (7,237)

TheGroupobservesthemovementsinexchangeratesandactsaccordinglytominimiseitsexposuretocurrencyrisk.Wherenecessary,theGroupentersintoderivativecontractstohedgetheexposure.Suchexposureisalsopartlymitigatedinthefollowingways:-

(i) TheGroup’sforeigncurrencysalesandpurchasesprovideanaturalhedgeagainstfluctuationsinforeigncurrencies.

(ii) TheGroupmaintainspartof itscashandcashequivalents in foreigncurrencyaccounts tomeet futureobligationsinforeigncurrencies.

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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36. Financial risk management (cont’d)

Currency risk (cont’d)

Based on a symmetric basis which uses the foreign currency as a stable denominator, the following tabledemonstrates the sensitivity of profit or loss (and equity) to changes in exchange rates thatwere reasonablypossibleattheendofthereportingperiod,withallothervariablesheldconstant:-

Group CompanyIncrease/ (Increase)/ Increase/ (Increase)/

(Decrease) Decrease (Decrease) Decreaseinprofit inloss inprofit inprofit

2019 2018 2019 2018RM’000 RM’000 RM’000 RM’000

AppreciationofUSDagainstRMby10%(2018:10%) 900 452 (716) (724)DepreciationofUSDagainstRMby10%(2018:10%) (900) (452) 716 724AppreciationofUSDagainstRMBby10%(2018:10%) 2,445 778 0 0DepreciationofUSDagainstRMBby10%(2018:10%) (2,445) (778) 0 0

Interest rate risk

TheGroup’sexposuretointerestrateriskarisesmainlyfrominterest-bearingfinancialinstruments,namelytermdeposits,loansandborrowingsandleaseliabilities.

TheGroup observes themovements in interest rates and always strives to obtain themost favourable ratesavailablefornewfinancingorduringrepricing.ItisalsotheGroup’spolicytomaintainamixoffixedandfloatingratefinancialinstrumentsasfollows:-

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Fixed rate instrumentsFinancialassets 78,613 71,604 2,263 3,324Financialliabilities (9,368) (10,601) (397) (320)Floating rate instrumentsFinancialliabilities (50,969) (56,216) 0 0

AstheGroupdoesnotaccountforitsfixedratefinancialinstrumentsatfairvaluethroughprofitorloss,anychangeininterestratesattheendofthereportingperiodwouldnotaffectitsprofitorloss(andequity).Forfloatingratefinancialinstrumentsmeasuredatamortisedcost,thefollowingtabledemonstratesthesensitivityofprofitorloss(andequity)tochangesininterestratesthatwerereasonablypossibleattheendofthereportingperiod,withallothervariablesheldconstant:-

GroupIncrease/ (Increase)/

(Decrease) Decreaseinprofit inloss

2019 2018RM’000 RM’000

Increaseininterestratesby50basispoints (194) (214)Decreaseininterestratesby50basispoints 194 214

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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37. Capital management

TheoverallcapitalmanagementobjectiveoftheGroupistosafeguarditsabilitytocontinueasagoingconcernsoas toprovide fair returns toownersandbenefits tootherstakeholders. Inorder tomeet thisobjective, theGroupalwaysstrivestomaintainanoptimalcapitalstructuretoreducethecostofcapitalandsustainitsbusinessdevelopment.

TheGroupconsidersitstotalequityandtotalinterest-bearingdebtstobethekeycomponentsofitscapitalstructureandmay,fromtimetotime,adjustthedividendpayouts,purchaseownshares,issuenewshares,sellassets,raiseorredeemdebts,wherenecessary,tomaintainanoptimalcapitalstructure.TheGroupmonitorscapitalusingadebt-to-equityratio,whichiscalculatedastotalinterest-bearingdebtsdividedbytotalequityasfollows:-

Group Company2019 2018 2019 2018

RM’000 RM’000 RM’000 RM’000

Loansandborrowings 59,334 66,817 0 320Leaseliabilities 1,003 0 397 0Totalinterest-bearingdebts 60,337 66,817 397 320Totalequity 506,964 505,711 419,443 416,102Totalcapital 567,301 572,528 419,840 416,422

Debt-to-equityratio 11.90% 13.21% 0.09% 0.08%

Theaforementionedcapitalmanagementobjective,policiesandprocesseshaveremainedunchangedfromthepreviousfinancialyear.

38. Comparative figures

Thefollowingcomparativefigureshavebeenreclassifiedtoconformwiththecurrentyear’spresentation:-

Aspreviouslyreported

Reclassifica-tions Asrestated

RM’000 RM’000 RM’000

Consolidated statement of financial position as at 31 December 2018 (extract)Payables 94,232 (4,705) 89,527Retirementbenefits 0 4,705 4,705

Statement of financial position as at 31 December 2018 (extract)Payables 26,620 (4,705) 21,915Retirementbenefits 0 4,705 4,705

Thereclassificationsofcomparativefiguresdidnothaveanysignificantimpactsonthereportedtotalcomprehensiveincomeandcashflows.

39. Significant events after the reporting period

The impact of theCOVID-19outbreakonpublic life and the industry inMalaysia and thebroader regionhassignificantlydisrupted theGroup’sbusinessactivities.While this isexpected tohaveanegative impacton theGroup’sperformanceforthecomingreportingperiods,theGroupisunabletoquantifythemagnitudeanddurationofsuchimpactatthisjunctureastheoutbreakcontinuestoprogressandtheconditionsareunpredictable.

NOTESTOTHEFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDED31DECEMBER2019

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ANALYSISOFSHAREHOLDINGS

Totalnumberofissuedshares : 277,904,539ordinaryshares

ClassofShares : OrdinaryShares

VotingRights : Onevoteperordinaryshare

Distribution Schedule of Shares

Asat30April2020

Holdings No. of Holders Total Holdings %

Lessthan100 1,081 57,138 0.02

100-1,000 2,392 1,030,271 0.37

1,001–10,000 6,697 23,211,191 8.36

10,001–100,000 1,662 42,108,527 15.16

100,001–lessthan5%ofissuedshares 174 131,206,701 47.23

5%andaboveofissuedshares 2 80,175,447 28.86

Total 12,008 277,789,275 100.00

Note:Excluding115,264treasuryshares

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ANALYSISOFSHAREHOLDINGS

Substantial Shareholders

Asat30April2020

Direct Interest Deemed InterestNo. of No. of

No. Name of Substantial Shareholders Shares % Shares %

1 HSBCNominees(Asing)SdnBhdHBAP For Gold Connection Assets Limited

47,740,072 17.19 - -

2 ZunHoldingsSdnBhd 32,435,375 11.68 - -3 PuanSriDatinSeriAngGaikNga 12,103,708 4.36 32,435,375a 11.684 DatinJessicaH’ngHsiehLing 3,598,465 1.30 32,435,375a 11.685 Dato’H’ngChunHsiang 2,438,748 0.88 32,435,375a 11.686 H’ngChunChing 2,115,200 0.76 32,435,375a 11.687 H’ngHsiehFern 894,199 0.32 32,435,375a 11.688 TanSriDato’SeriH’ngBokSan - - 53,585,695b 19.29

Directors’ Shareholding

Asat30April2020

Direct Interest Deemed InterestNo. of No. of

No. Name of Directors Shares % Shares %

1. TanSriDato’SeriH’ngBokSan - - 53,585,695b 19.292. DatukSeriKennethH’ngBakTee - - 1,404,649c 0.513. Dato’HarryH’ngBakSeah 2,697,710 0.97 - -4. DatinJessicaH’ngHsiehLing 3,598,465 1.30 32,435,375a 11.685. Dato’LaiChangHun 2,883,042 1.04 3,766,453d 1.366. WIsmailBinWNik 2,418,645e 0.87 - -7. ChewHockLin - - - -8. Dato’IsmailBinHamzah - - - -9. Dato’Dr.GanKongMeng - - - -

Notes:

a Deemed interestedbyvirtueofshareholdingsheld throughZunHoldingsSdn.Bhd.pursuant toSection8of the

CompaniesAct2016b Deemedinterestedbyvirtueofhisspouse’sandchildren’sshareholdingsintheCompany,aswellashisshareholdings

heldthroughZunHoldingsSdn.Bhd.,pursuanttoSections8and59(11)(c)oftheCompaniesAct2016c Deemed interestedby virtueof his spouse’s shareholdings in theCompanypursuant toSection59(11)(c) of the

CompaniesAct2016d Deemedinterestedbyvirtueofhischildren’sshareholdings,aswellashisshareholdingsheldthroughLaicoJaya

Sdn.Bhd.,pursuanttoSections8and59(11)(c)oftheCompaniesAct2016e 2,388,645sharesareheldviaHLBNominees(Tempatan)Sdn.Bhd.

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Thirty (30) Largest ShareholdersAsat30April2020

No. Name of Securities Account Holders No. of Shares %

1 HSBCNominees(Asing)SdnBhdHBAP for Gold Connection Assets Limited (PB-SGDIV501999)

47,740,072 17.19

2 ZunHoldingsSdnBhd 32,435,375 11.68

3 PuanSriDatinSeriAngGaikNga 12,103,708 4.36

4 SongSiewGnoh 10,162,258 3.66

5 DB(Malaysia)Nominee(Asing)SdnBhdDeutsche Bank AG Singapore for YEOMAN 3-Rights Value Asia Fund (PTSL)

9,250,487 3.33

6 CIMBGroupNominees(Asing)SdnBhdExempt An for DBS Bank Ltd (SFS)

7,653,656 2.76

7 TeoKweeHock 5,447,707 1.96

8 TayTeckHo 4,800,000 1.73

9 KanYuOiLing 4,507,445 1.62

10 SiawPoonKeong 4,193,678 1.51

11 LaicoJayaSdnBhd 3,647,954 1.31

12 DatinJessicaH’ngHsiehLing 3,598,465 1.30

13 CGS-CIMBNominees(Asing)SdnBhdExempt An for CGS-CIMB Securities (Singapore) Pte Ltd (Retail Clients)

3,383,675 1.22

14 Dato’LaiChangHun 2,883,042 1.04

15 ShoptraJaya(M)SdnBhd 2,622,128 0.94

16 Dato’H’ngChunHsiang 2,438,748 0.88

17 HLBNominees(Tempatan)SdnBhdPledged Securities Account for W Ismail Bin W Nik

2,388,645 0.86

18 Dato’HarryH’ngBakSeah 2,360,329 0.85

19 H’ngChunChing 2,115,200 0.76

20 KenangaNominees(Asing)SdnBhdExempt An for Phillip Securities Pte Ltd (Client Account)

2,054,741 0.74

21 AffinHwangNominees(Asing)SdnBhdDBS Vickers Secs (S) Pte Ltd for Lim Mee Hwa

1,894,996 0.68

22 HLBNominees(Tempatan)SdnBhdPledged Securities Account for Chee Sai Mun

1,765,750 0.64

23 Inter-PacificEquityNominees(Tempatan)SdnBhdDatin Seri Tham Hooi Loon (0151)

1,404,649 0.51

24 UOBKayHianNominees(Tempatan)SdnBhdExempt An for UOB Kay Hian Pte Ltd (A/C Clients)

1,356,348 0.49

25 YeoKheeHuat 933,484 0.34

26 OngWanChin 915,000 0.33

27 H’ngHsiehFern 894,199 0.32

28 LeeSaiKim 861,520 0.31

29 TanPakNang 821,340 0.30

30 NyiewTengSia@YangTingChern 810,834 0.29

ANALYSISOFSHAREHOLDINGS

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LISTOFPROPERTIESAsat31December2019

No. Address/ Location Tenure Description Area Approximate Age Net Book Value Date of (square of properties/ (RM’000) Acquisition/metre) buildings Re-Valuation

1 Plot1240&1241, Leasehold Office/ 16,339 33years 20,585 31/12/2013BayanLepasFreeIndustrialZone, 60years FactorybuildingPhase3,BayanLepas Expiringon11900Penang 27/8/2041

2 Plot208ABayanLepasFree Leasehold Office/ 6,167 33years 7,296 31/12/2013IndustrialZone,Phase3, 60years FactorybuildingBayanLepas,11900Penang Expiringon

20/10/2049

3 160-4-3AnsonRoad, Freehold Apartment 153 38years 565 31/12/201610400Penang

4 588ChangjiangRoad, Leasehold Office/ 53,325 22years 31,061 31/12/2013NewDistrictSuzhou, 50years FactorybuildingJiangsu,China Expiringon

17/8/2047

5 Unit16,RoseGarden Leasehold Bungalow 232 21years 1,092 31/12/2013XiangXieMountainVillaResort 70yearsNo.289JinSanRoad,MuduTown, ExpiringonWuzhongDistrict,215101Suzhou 17/5/2068JiangsuProvince,China

6 AlongKualaLumpur/Seremban Freehold Ongoingmixed 430,122 - 22,925 30/09/2004Highway,PekanBukitKepayang, developmentschemeDistrictofSeremban knownasTamanNegeriSembilan BukitKepayang

7 AlongoffJalanSimpangAmpat Freehold Ongoingmixed 186,246 - 59,324 27/03/2014Mukim14&15DistrictofSeberang developmentschemePeraiTengah,PulauPinang knownasSimpang

Ampat

8 LotNo.1377Mukim12,Province Freehold IndustrialLand 26,100 - 13,008 09/09/2015WellesleySouth,Penang

9 LotNo.1690,Mukim12,Province Freehold IndustrialLand 22,720 - 10,373 09/09/2015WellesleySouth,Penang

10 LotNo.1692,Mukim12 Freehold Industrialland 21,250 - 8,000 31/12/2016ProvinceWellesleySouth,Penang

11 LotNo.1693,Mukim12 Freehold Industrialland 1,998 - 520 31/12/2016ProvinceWellesleySouth,Penang

12 27JalanSerendah26/40 Freehold 3-StoreySemi-D 819 6years 4,519 27/12/2013KawasanPerindustrianHicom factorySeksyen26,40400ShahAlamSelangor

13 LotNo.5MukimTeluiKiri, Freehold Agriculturalland 1,551,773 - 21,200 31/12/2013DaerahKualaMuda,Kedah

14 PTNo.47843MukimofRawang Freehold Commericalland 13,901 - 32,284 04/06/2015DistrictofGombakSelangorDarulEhsan

15 4935JalanSiram, Freehold 3-storeyterrace 511 28years 746 31/12/201312100Butterworth,Penang shophouse

16 FlatNo.27-C,Unit75,3rdFloor, Freehold 3rdfloorofa 86 32years 48 31/12/2013JalanTembikai,TamanMutiara, 3-storeyshophouse14000BukitMertajam,Penang

17 1-1-05No.1, Freehold Shoplot 86 25years 251 31/12/2016PersiaranBukitJambul1,ComplexRelau,11900Penang

18 UnitNo.24,25,27,91,100,101 Freehold 7unitsofdouble 1,169 21years - 31/12/2009&103LembahBeringin, storeyterracehousesSector26-2,Selangor

19 PT666,PekanBukitSelambau, Freehold IndustrialLand 3,971 - 522 12/09/2019DaerahKualaMuda,NegeriKedah

20 PartofLot6485,Mukim14 Freehold Commercialland 2,787 - 287 27/03/2014DistrictofSeberangPeraiSelatanPulauPinang

Revaluation Policy ThelandandbuildingsoftheGroupwererevaluedbyfirmsofindependentprofessionalvaluersusingopenmarketvaluebasis.

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NOTICEOFANNUALGENERALMEETING

NOTICE IS HEREBY GIVEN THAT the 56th Annual General Meeting (“AGM”) of GUH Holdings Berhad (“theCompany”)willbeheldattheAuditoriumoftheCompanyat2ndFloor,Plot1240&1241,BayanLepasFreeIndustrialZone,Phase3,BayanLepas,11900PenangviaremoteparticipationandelectronicvotingfacilitiesonTuesday,30June2020at10:30a.m.totransactthefollowingbusinesses:

AGENDA

As Ordinary Business

1. TolaybeforethemeetingtheAuditedFinancialStatementsforthefinancialyearended31December2019togetherwiththeReportsoftheDirectorsandtheAuditorsthereon.

2. ToapprovethepaymentofDirectors’feesandbenefitsofuptoanamountofRM1,100,000witheffectfrom1January2020untilthenextAGMoftheCompanytobeheldin2021.

Resolution 1

3. To re-elect the following Directors who retire pursuant to Article 95 of the Company’sConstitutionandbeingeligible,offerthemselvesforre-election:

(i) TanSriDato’SeriH’ngBokSan(ii) DatukSeriKennethH’ngBakTee(iii) Dato’HarryH’ngBakSeah(iv) Mr.ChewHockLin(v) Dato’IsmailBinHamzah(vi) Dato’LaiChangHun

Resolution 2Resolution 3Resolution 4Resolution 5Resolution 6Resolution 7

4. Tore-appointMessrs.CroweMalaysiaPLTasAuditorsoftheCompanyforthefinancialyearending31December2020andtoauthorizetheDirectorstofixtheirremuneration.

Resolution 8

As Special Business

Toconsiderandifthoughtfit,topasswithorwithoutanymodifications,thefollowingresolutions:

5. ORDINARY RESOLUTION –CONTINUE IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTORS

(i) “THATapprovalbeandisherebygiventoEn.WIsmailBinWNikwhohasservedasIndependentNon-ExecutiveDirectorforacumulativetermofmorethantwelveyears,tocontinuetoserveasanIndependentNon-ExecutiveDirectoroftheCompany.”

Resolution 9

(ii) SubjecttotheapprovalofResolution5above,“THATapprovalbeandisherebygiventoMr.ChewHockLinwhohasservedas IndependentNon-ExecutiveDirector foracumulative termofmore than twelveyears, tocontinue toserveasan IndependentNon-ExecutiveDirectoroftheCompany.”

Resolution 10

(iii) SubjecttotheapprovalofResolution6above,“THATapprovalbeandisherebygiventoDato’IsmailBinHamzahwhohasservedasIndependentNon-ExecutiveDirectorforacumulativetermofmorethantwelveyears,tocontinuetoserveasanIndependentNon-ExecutiveDirectoroftheCompany.”

Resolution 11

(iv) SubjecttotheapprovalofResolution7above,“THATapprovalbeandisherebygiventoDato’LaiChangHunwhohasservedas IndependentNon-ExecutiveDirector foracumulativetermofmorethantwelveyears,tocontinuetoserveasanIndependentNon-ExecutiveDirectoroftheCompany.”

Resolution 12

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NOTICEOFANNUALGENERALMEETING

6. ORDINARY RESOLUTION –AUTHORITY TO ISSUE SHARES PURSUANT TO SECTIONS 75 AND 76 OF THE COMPANIES ACT 2016

Resolution 13

“THATpursuant toSections75and76of theCompaniesAct2016, theDirectorsbeandareherebyauthorizedtoissuesharesintheCompanyatanytimeuntil theconclusionofthenextAGManduponsuchtermsandconditionsandforsuchpurposesastheDirectorsmayintheirabsolutediscretiondeemfit,providedthattheaggregatenumberofsharestobeissued,pursuanttothisresolutiondoesnotexceed20%ofthetotalnumberof issuedsharesoftheCompany(excludingtreasuryshares),uponandsubjecttothemandategivenby Bursa Malaysia Securities Berhad under paragraph 6.03 of the Main Market ListingRequirements,definedinthedirective/clarificationdated16April2020andthattheDirectorsbeandarealsoempoweredtoobtaintheapprovalfromBursaMalaysiaSecuritiesBerhadforthelistingandquotationoftheadditionalsharessoissued,subjectalwaystotheapprovalofallrelevantregulatorybodiesbeingobtainedforsuchissues.”

7. ORDINARY RESOLUTION –PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY

Resolution 14

“THAT subject to the Company’s compliance with all applicable rules, regulations andordersmadepursuanttotheCompaniesAct2016(“Act”),theprovisionsoftheCompany’sConstitutionandtheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“ListingRequirements”) and the approval of all other relevant authorities, theCompanybeand isherebyauthorized toutilizeanamountnotexceeding the total retainedprofitsoftheCompanytopurchasesuchamountofordinarysharesintheCompanyasmaybedeterminedbytheDirectorsoftheCompanyfromtimetotimeuponsuchtermsandconditionsastheDirectorsmaydeemfitandexpedientintheinterestoftheCompanyprovidedthattheaggregatenumberofsharestobepurchasedpursuanttothisresolutiondoesnotexceed10%of the totalnumberof issuedsharesof theCompanyasquotedonBursaMalaysiaSecuritiesBerhadatanygivenpointintime(“ProposedShareBuy-Back”).

ANDTHAT theDirectorsof theCompanybeandareherebyauthorized todealwith theshares sopurchasedby theCompanypursuant to theProposedShareBuy-Back in thefollowingmanner:

(i) toretainthesharesastreasuryshares;and/or(ii) tocanceltheshares;and/or(iii) toreselltheshares;and/or(iv) todistributeassharedividends;and/or(v) totransferthesharesforthepurposesofanemployees’sharesscheme;and/or(vi) totransferthesharesaspurchaseconsideration;and/or(vii) anycombinationoftheabove;and/or

inanyothermannerasprescribedbytheAct,ListingRequirementsand/oranyotherrelevantauthorityforthetimebeinginforce;

ANDTHATsuchauthority for theProposedShareBuy-Backconferredby this resolutionshallcommenceuponthepassingofthisresolutionandshallcontinuetobeinforceuntil:

(a) theconclusionofthenextAGMoftheCompanyfollowingthisAGM,atwhichtimethesaidauthorityshalllapse,unlessbyanordinaryresolutionpassedatthatmeeting,theauthorityisrenewed,eitherunconditionallyorsubjecttoconditions;or

(b) theexpirationoftheperiodwithinwhichthenextAGMoftheCompanyisrequiredbylawtobeheld;or

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(c) revokedorvariedbyresolutionpassedbytheshareholdersoftheCompanyinageneralmeeting,

whicheveroccursfirst;

ANDTHAT,theDirectorsoftheCompanyoranyofthembeandareherebyauthorizedtotakeallsuchstepsasarenecessaryorexpedienttoimplement,finalizeandtogivefulleffecttotheProposedShareBuy-Backwithfullpowerstoassenttoanyconditions,modifications,variations,and/oramendmentsasmayberequiredorimposedbytherelevantauthoritiesandtodoallsuchactsandthings(includingexecutingalldocuments)astheDirectorsmaydeemfitandexpedientinthebestinterestoftheCompany.”

8. ORDINARY RESOLUTION –PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

Resolution 15

“THATsubjectalwaystotheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhadandallotherapplicablelaws,approvalbeandisherebygiventotheCompanyand/oritssubsidiariestoenterintotherecurrentrelatedpartytransactionsofarevenueortradingnaturewiththerelatedparties,whicharenecessaryfortheday-to-dayoperations, intheordinarycourseofbusiness,madeatarm’slengthbasisandonnormalcommercialtermswhicharenotmore favourable to therelatedparties than thosenormallyavailable to thepublicandarenottothedetrimentoftheminorityshareholders,detailsaresetoutinPartBoftheCirculartoShareholdersdated29May2020;ANDTHATtheauthorityconferredbythismandateshallcommenceimmediatelyuponthepassingofthisresolutionandissubjecttoannualrenewal.Inthisrespecttheauthorityshallonlycontinuetobeinforceuntil:

(i) theconclusionofthenextAGMoftheCompanyatwhichtimetheauthoritywilllapse,unlesstheauthorityisrenewedbyaresolutionpassedatthatAGM;

(ii) theexpirationoftheperiodwithinwhichthenextAGMisrequiredtobeheldpursuanttoSection340(2)oftheCompaniesAct2016(butnotextendingtosuchextensionsasmaybeallowedpursuanttoSection340(4)oftheCompaniesAct2016);or

(iii) revokedorvariedbyresolutionpassedbytheshareholdersoftheCompanyinageneralmeeting,

whicheverisearlier.

ANDTHATauthoritybeandisherebygiventotheDirectorsoftheCompanytocompleteanddoallsuchactsandthings(includingexecutingsuchdocumentsasmayberequired)astheymayconsiderexpedientornecessarytogiveeffecttothetransactioncontemplatedand/orauthorizedbythisOrdinaryResolution.”

9. TotransactanyotherbusinessoftheCompanyforwhichduenoticeshallhavebeengiven.

ByOrderoftheBoard,

Datuk Seri Kenneth H’ng Bak Tee(LS0008988)(SSMPCNo.:201908001173)Kee Gim Tee(MAICSA7014866)(SSMPCNo.:201908002255)

CompanySecretariesPenangDatedthis29May2020

NOTICEOFANNUALGENERALMEETING

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Notes:

1. InlightoftheCOVID-19pandemicandinconsiderationoftheshareholders’healthandsafety,themeetingwillbeconductedfullyvirtuallyandbroadcastedfromtheregisteredofficeoftheCompany.

2. AmemberoftheCompanyentitledtoattendandvoteatthismeeting,shallbeentitledtoappointanypersonashisproxy.Aproxyneednotalsobeamember.Amemberwhoappointsmorethan1proxymustspecifytheproportionofhisholdingstoberepresentedbyeachproxy.

3. Amembershallnotbeentitledtoappointmorethan2proxiestoattendandvoteatthismeeting.WhereamemberisanExemptAuthorizedNomineewhichholdsordinaryshares intheCompanyformultiplebeneficialowners inonesecuritiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxieswhichtheExemptAuthorisedNomineemayappointinrespectofeachomnibusaccountitholds.

4. Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointororhisattorneydulyauthorizedinwritingor, if theappointor isacorporation,eitherundersealorunder thehandofanofficerorattorneydulyauthorized.

5. Theinstrumentappointingaproxyandthepowerofattorneyorotherauthority,ifany,underwhichitissignedoranotariallycertifiedcopyofthatpowerorauthorityshallbedepositedattheRegisteredOfficeatPartofPlot1240&1241,BayanLepasFreeIndustrialZone,Phase3,BayanLepas,11900Penangnotlessthan48hoursbeforethetimeappointedforholdingthemeeting.Forshareholders’onlineregistrations,kindlyrefertotheannexureoftheAdministrativeNotespublishedontheCompany’swebsiteandannouncement.

6. PursuanttoParagraph8.29(1)oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad,allresolutionswillbeputtovotebywayofpoll.OnlyaDepositorwhosenameisregisteredintheRecordofDepositorsasat22June2020shallberegardedasmembertoattend,speakandvoteatthismeeting.

7. Toattendandvoteonanyoralloftheresolutionsatthismeeting,youmayparticipateviaremoteparticipationandelectronicvotingfacilitiesinaccordancewiththeproceduresassetoutintheAdministrativeNotes,whichismadeavailable at theCompany’swebsite at http://www.guh.com.my, or send in your votes in advance by appointingtheChairmanoftheMeetingasyourproxy.IfyouhaveanyquestionsinrelationtoanyitemoftheAgendaoftheMeeting,youmaysendtheminviarealtimesubmissionoftypedtextsduringtheMeetinginaccordancewiththeproceduresassetoutintheAdministrativeNotes.

Explanatory Notes:

Audited Financial Statements for the financial year ended 31 December 2019

ThisAudited Financial Statements are laid in accordance with Section 340(1)(a) of the CompaniesAct 2016 fordiscussiononlyunderAgenda1.Shareholders’approvalisnotrequired.Hence,thisAgendaitemwillnotbeputforwardforvoting.

Resolution 1 - Payment of Directors’ fees and benefits in respect of the current year 2020 until the next AGM

PursuanttoSection230(1)oftheCompaniesAct,2016,feesandbenefitspayabletotheDirectorsofalistedcompanyanditssubsidiariesshallbeapprovedbytheshareholdersatageneralmeeting.Inthisrespect,theBoardagreedwiththerecommendationfromtheRemunerationCommitteethatshareholders’approvalshallbesoughtattheCompany’s56thAGMforthepaymentofDirectors’feesandbenefitsinrespectofthecurrentyear2020uptillthenextAGMoftheCompanytobeheldin2021.

ThepaymentoffixedfeestotheDirectorsistocommensurateandcompensatethemfortheirtimeandeffortonanon-goingbasisfortheirservicetotheCompany.

ThefulldetailsoftheDirectors’feesandotherbenefitspaidduringthefinancialyearended31December2019aredisclosedinNote28tothefinancialstatementsonpage112oftheCompany’sAnnualReport2019.

Resolution 2, 3, 4, 5, 6 & 7 – Re-election of retiring Directors

Article95oftheCompany’sConstitution–AnelectionofDirectorsshalltakeplaceeachyear.AllDirectorsshallretirefromofficeonceatleastineachthree(3)years.AretiringDirectorshallbeeligibleforre-election.TheretiringDirectors,TanSriDato’SeriH’ngBokSan,DatukSeriKennethH’ngBakTee,Dato’HarryH’ngBakSeah,Mr.ChewHockLin,Dato’IsmailBinHamzahandDato’LaiChangHunbeingeligible,haveofferedthemselvesforre-election.

Resolution 8 – Re-appointment of Auditors

Pursuant toSection 273(b) of theCompaniesAct 2016, the termof office of the presentAuditors,Messrs.CroweMalaysiaPLT,shalllapseattheconclusionofthisAGMunlesstheyarere-appointedbytheshareholderstocontinue

NOTICEOFANNUALGENERALMEETING

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inoffice. CroweMalaysiaPLThave indicated theirwillingness tobere-appointedasAuditors for thefinancialyearending31December2020.TheProposedResolution8,ifpassed,willalsogivetheDirectors,authoritytodeterminetheremunerationoftheAuditors.

Resolution 9, 10, 11 & 12 – Continuing in office as Independent Non-Executive Directors

TheproposedResolution9,10,11and12aretoenableEn.WIsmailBinWNik,Mr.ChewHockLin,Dato’IsmailBinHamzahandDato’LaiChangHun,tocontinueservingasIndependentDirectorsoftheCompany.

TheBoardofDirectorshadviatheNominationCommitteeconductedtheannualperformanceevaluationandassessmentof independenceof theDirectors.The justificationsof theBoardofDirectors for recommendingandsupporting theresolutionsfortheircontinuinginofficeasIndependentDirectorsaresetoutbelow:

Justifications:

(a)FulfilsthecriteriaofanIndependentDirectorpursuanttotheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad;

(b)ProvidetheBoardwithdiversesetofexperience,skillsandexpertiseintherelevantfield/businessindustry;

(c)Sufficienttimeandattentiontotheirprofessionalobligationsforinformedandbalanceddecisionmaking;and

(d)AbletobringindependentandobjectivejudgmenttotheBoarddeliberationsandtheirpositionintheBoardhasnotbeencompromisedbytheirfamiliarityandlongrelationshipwithotherBoardmembers.

The Board will seek shareholders’ approval through a two-tier voting process in line with recommendation of theMalaysianCodeonCorporateGovernance.

Resolution 13 – Authority to issue shares pursuant to Sections 75 and 76 of the Companies Act 2016

TheproposedResolution13isarenewalofthegeneralauthoritygiventotheDirectorsoftheCompanytoallotandissuesharesasapprovedbytheshareholdersatthe55thAGMheldon23May2019.AsatthedateofthisNotice,theCompanyhasnotissuedanynewsharesandtheauthoritywilllapseattheconclusionofthe56thAGMtobeheldon30June2020.

TheproposedResolution13,ifpassed,willgiveauthoritytotheDirectorsoftheCompanytoissueandallotsharesuptoandnotexceeding20%ofthetotalnumberofissuedsharesoftheCompany(excludingtreasuryshares)whichisdefinedunderthegeneralmandatelimitgivenbyBursaMalaysiaSecuritiesBerhadinthedirective/clarificationdated16April2020aspartofthereliefmeasurestoaidandfacilitatelistedissuersinsustainingtheirbusinessoreasingtheircompliancewiththerules,amidtheunprecedenteduncertaintysurroundingtherecoveryoftheCOVID-19outbreakandimplementationofMovementControlOrder.Inthemeantime,theCompanywillbeabletoraisefundbyhavinggeneralmandatefromtheshareholderstoauthorizetheDirectorstoissueandallotshareswithoutconveningageneralmeetinginthenearfuturewhichwillbebothtimeandcostconsuming,ifneedsarise.

TheBoardofDirectorsof theCompany isof theview that the increased ingeneralmandate limit fornew issueofsecuritiesupto20%isinthebestinterestoftheCompanyanditsshareholdersduetotheimpactoftheCOVID-19outbreakhassignificantlydisruptedtheGroup’sbusinessactivitiesanditisexpectedtohaveanegativeimpactontheGroup’sperformanceforthenearfutureastheoutbreakcontinuestoprogressandtheconditionsareunpredictable.Therefore,thisauthoritywillhelpandeasetheCompanywithadditionalfundraisingflexibilitytomeetthefundraisingactivities,includingbutnotlimitedtofurtherplacingupshares,forpurposeoffundingfutureinvestments,acquisition,workingcapitalandoperationalexpenditure,expeditiouslyandefficiently.

Resolution 14 – Proposed renewal of Share Buy-Back authority

TheproposedResolution14, if passed,wouldempower theDirectorsof theCompany topurchase itsownsharesthroughBursaMalaysiaSecuritiesBerhadupto10%ofthetotalnumberof issuedsharesoftheCompany.FurtherinformationissetoutinPartAoftheShareBuy-BackStatementdated29May2020.

Resolution 15 – Proposed renewal of shareholders’ mandate for recurrent related party transactions of a revenue or trading nature

TheproposedResolution15, ifpassed,wouldallow theCompanyand/or itssubsidiariesandrelatedcompanies toenterintotherecurrentrelatedpartytransactionsofarevenueortradingnaturewhicharenecessaryfortheday-to-dayoperationswiththerelatedparties.

Thisauthority,unlessrevokedorvariedbytheCompanyingeneralmeeting,willexpireattheconclusionofthenextAGM,ortheexpirationoftheperiodwithinwhichthenextAGMisrequiredbylawtobeheld,orrevokedorvariedbyanordinaryresolutionpassedbytheshareholdersoftheCompanyingeneralmeeting,whichever isearlier.FurtherinformationissetoutinPartBoftheCirculartoShareholdersdated29May2020.

NOTICEOFANNUALGENERALMEETING

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STATEMENTACCOMPANYINGNOTICEOFANNUALGENERALMEETING(PursuanttoParagraph8.27(2)oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad)

1. DetailsofindividualswhoarestandingforelectionasDirectors(excludingDirectorsstandingforre-election)

No individual is seeking election as Director at the forthcoming 56th Annual General Meeting (AGM) of theCompany.

2. GeneralmandateforissueofsecuritiesinaccordancewithParagraph6.03(3)oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad.

ThedetailsoftheproposedauthorityforDirectorstoissuesharesintheCompanypursuanttoSections75and76oftheCompaniesAct2016aresetoutintheExplanatoryNoteofResolution13oftheNoticeofAGM.

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PROXY FORMGUH HOLDINGS BERHAD

Please indicate with an “X” as to how you wish to cast your vote. If no instruction as to voting is given, the proxy will vote or abstain from voting at his discretion.

Ordinary Business For Against

ToapprovethepaymentofDirectors’ feesandbenefitsup toRM1,100,000witheffectfrom1January2020untilthenextAGMoftheCompany Resolution1

Tore-electTanSriDato’SeriH’ngBokSanwhoisretiringpursuanttoArticle95oftheCompany’sConstitution Resolution2

Tore-electDatukSeriKennethH’ngBakTeewhoisretiringpursuanttoArticle95oftheCompany’sConstitution Resolution3

Tore-electDato’HarryH’ngBakSeahwhoisretiringpursuanttoArticle95oftheCompany’sConstitution Resolution4

Tore-electMr.ChewHockLinwhoisretiringpursuanttoArticle95oftheCompany’sConstitution Resolution5

Tore-electDato’IsmailBinHamzahwhoisretiringpursuanttoArticle95oftheCompany’sConstitution Resolution6

Tore-electDato’LaiChangHunwhoisretiringpursuanttoArticle95oftheCompany’sConstitution Resolution7

Tore-appointMessrs.CroweMalaysiaPLTasAuditorsoftheCompanyandtoauthorizetheDirectorstofixtheirremuneration Resolution8

Special Business For Against

ToapproveEn.W IsmailBinWNik tocontinue inofficeasIndependentNon-ExecutiveDirector Resolution9

ToapproveMr.ChewHockLintocontinueinofficeasIndependentNon-ExecutiveDirector Resolution10

ToapproveDato’ IsmailBinHamzah tocontinue inofficeasIndependentNon-ExecutiveDirector Resolution11

ToapproveDato’LaiChangHuntocontinueinofficeasIndependentNon-ExecutiveDirector Resolution12

AuthoritytoissuesharespursuanttoSections75and76oftheCompaniesAct2016 Resolution13

ProposedrenewalofShareBuy-BackAuthority Resolution14

Proposedrenewalofshareholders’mandateforrecurrentrelatedpartytransactionsofarevenueortradingnature Resolution15

.........................................................SignatureofMember/CommonSeal

Datedthis.................... dayof..............................,20............

No.ofSharesHeldCDSAccountNo.

orfailinghim,theChairmanoftheMeetingasmy/ourproxy(ies)tovoteforme/usandonmy/ourbehalfatthe56thAnnualGeneralMeeting(“AGM”)oftheCompanytobeheldattheAuditoriumoftheCompanyat2ndFloor,Plot1240&1241BayanLepasFreeIndustrialZone,Phase3,BayanLepas,11900PenangviaremoteparticipationandelectronicvotingfacilitiesonTuesday,30June2020at10:30a.m.andatanyadjournmentthereof.

Shareholder Proxy1 Proxy2NameNRICNo.PhoneNo.EmailAddress

%

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Affixstamphere

TheCompanySecretary

GUH HOLDINGS BERHADPartofPlot1240&1241,

BayanLepasFreeIndustrialZone,Phase3,BayanLepas,

11900Penang,Malaysia

1stfoldhere

2ndfoldhere

Foldthisflagsealing

Notes:

1. InlightoftheCOVID-19pandemicandinconsiderationoftheshareholders’healthandsafety,themeetingwillbeconductedfullyvirtuallyandbroadcastedfromtheregisteredofficeoftheCompany.

2. AmemberoftheCompanyentitledtoattendandvoteatthismeeting,shallbeentitledtoappointanypersonashisproxy.Aproxyneednotalsobeamember.Amemberwhoappointsmorethan1proxymustspecifytheproportionofhisholdingstoberepresentedbyeachproxy.

3. Amembershallnotbeentitledtoappointmorethan2proxiestoattendandvoteatthismeeting.WhereamemberisanExemptAuthorizedNomineewhichholdsordinarysharesintheCompanyformultiplebeneficialownersinonesecuritiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxieswhichtheExemptAuthorisedNomineemayappointinrespectofeachomnibusaccountitholds.

4. Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointororhisattorneydulyauthorizedinwritingor,iftheappointorisacorporation,eitherundersealorunderthehandofanofficerorattorneydulyauthorized.

5. The instrument appointing a proxy and the power of attorney or other authority, if any, underwhich it is signed or a notariallycertifiedcopyofthatpowerorauthorityshallbedepositedattheRegisteredOfficeatPartofPlot1240&1241,BayanLepasFreeIndustrialZone,Phase3,BayanLepas,11900Penangnotlessthan48hoursbeforethetimeappointedforholdingthemeeting.Forshareholders’onlineregistrations,kindlyrefertotheannexureoftheAdministrativeNotespublishedontheCompany’swebsiteandannouncement.

6. PursuanttoParagraph8.29(1)oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad,allresolutionswillbeputtovotebywayofpoll.OnlyaDepositorwhosenameisregisteredintheRecordofDepositorsasat22June2020shallberegardedasmembertoattend,speakandvoteatthismeeting.

7. Toattendandvoteonanyoralloftheresolutionsatthismeeting,youmayparticipateviaremoteparticipationandelectronicvotingfacilitiesinaccordancewiththeproceduresassetoutintheAdministrativeNotes,whichismadeavailableattheCompany’swebsiteathttp://www.guh.com.my,orsendinyourvotesinadvancebyappointingtheChairmanoftheMeetingasyourproxy.IfyouhaveanyquestionsinrelationtoanyitemoftheAgendaoftheMeeting,youmaysendtheminviarealtimesubmissionoftypedtextsduringtheMeetinginaccordancewiththeproceduresassetoutintheAdministrativeNotes.

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website: www.guh.com.my