mtd acpi engineering berhad (258836-v) · 2020. 8. 28. · mtd acpi engineering berhad registration...

MTD ACPI ENGINEERING BERHADRegistration No. 199301004099 (258836-V)

2020ANNUAL REPORT

www.mtdacpi.com

MTD ACPI ENGINEERING BERHADRegistration No. 199301004099 (258836-V)

Menara MTD, 1, Jalan Batu Caves 68100 Batu Caves, Selangor Darul Ehsan, MalaysiaTel : 603-6195 1111 Fax : 603-6188 0101

MTD ACPI ENGINEERING BERHAD (258836-V)

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RT 2020 A Member of MTD Group

Among the IBS precast products supplied by the Group included: Universiti Sultan Zainal Abidin Hospital

(UniSZA) in Kuala Terengganu Multi-storey car park project for

UKM Medical Center Cheras in Kuala Lumpur

Mass Rapid Transit (MRT) 2 Station for Mass Rapid Transit Corporation Sdn Bhd

i-City Shopping Mall in Shah Alam, Selangor

In Singapore, the group supplied IBS products for the Sengkang and River Front Residential Apartment. It also provided precast tunnel segments for Singapore’s MRT and Deep Tunnel Sewerage systems and precast sleepers to the Singapore MRT Circle Line. It is currently supplying the precast walkway components and level crossings to the MRT Thompson Line.

Beyond the ASEAN Region, the Group had supplied tunnel linings to the Dubai Metro Rail Project and Abu Dhabi Sewerage Tunnel System Project (STEP T-01) and pre-cast segmental box girder for the Delhi Metro Rail Project.

Corporate ProfileManufacturing

The Group’s Manufacturing arm has the capability to produce a full range of precast concrete products for infrastructure such as bridge crossings, segmental box girders, tunnel segments across the ASEAN region and buildings including Industrialised Building System (IBS).

The Group’s accomplishments amongst others included: Malaysia-Singapore Second Crossing Kuala Lumpur SMART Tunnel Penang 2nd Bridge Crossing Kuantan-Kerteh Railway Project

(Package 1) Sprint Highway – Kerinchi & Duta

interchanges and One Utama Extension Phase II.

On- going projects include: Sungai Besi-Ulu Kelang Elevated

Expressway Damansara-Shah Alam Expressway Petronas Marine Jetty, Pengerang.

A member of the MTD Group, MTD

ACPI Engineering Berhad (“MTD ACPI”

or “the Group”) is one of Malaysia’s

foremost infrastructure companies

involved in privatised infrastructure

development, construction and

engineering, property development

and manufacturing activities. MTD

ACPI is listed on the Main Market

of Bursa Malaysia Securities Berhad

since 3 January 1995.

Civil Engineering & Construction

The Group’s Civil Engineering & Construction arm has extensive experience in the development of mountain roads, highways, and bridges, building geotechnical works, erosion control and highway maintenance.

The Group had successfully completed the construction of the following projects: Kuala Lumpur-Karak Highway East Coast Expressway

(Phases 1 and 2) Fourth Lane Widening project for the

Sg. Buloh to Rawang stretch of the North South Expressway; and

Klang Valley Mass Rapid Transit (KVMRT) System Package V7 of Sg. Buloh-Kajang Line

Meanwhile, the KVMRT Package V208 Sg. Buloh-Serdang-Putrajaya Line is currently undergoing construction.

The Group also recently secured a contract for the construction and completion of earthworks and infrastructure works for the Chuping Valley Industrial Area Phase 1 in Chuping, Perlis, worth a total of RM184.2 million. The contract is for two years from 1 June 2020 to 31 May 2022.

Its overseas accomplishments include the construction of the 36-km South Luzon Expressway in the Philippines; and the improvements to the six-storey Jamarat Bridge and its surrounding areas in Mina, Saudi Arabia.

VISION

MISSION

SHAREDVALUESR.I.T.E

• A high performance company delivering and achieving sustainable values

• To become a sustainable-driven business operations• To strengthen branding within industries / business

activities

• Respect - Embrace and acknowledge diverse workforce and ideas irrespective of gender, race and religion

• Integrity - Conduct honest and ethical day-to-day business and operations

• Trust - Create a reliable environment which in turn provides confidence and leads to business growth

• Excellence - Embrace innovation and constantly providing platforms for knowledge and talent enhancements

What’s

Inside02Corporate Information

03Corporate Structure

04 – 07Board of Directors’ Profile

08 – 09 Key Senior Management’s Profile

10Group 5-Year Financial Highlights

11 – 21Management Discussion & Analysis

22 – 31Sustainability Report

32 – 34IRF and GRI Content Index

35 – 44Corporate GovernanceOverview Statement

45Additional Compliance Statement

46Directors’ Responsibility Statement

47 – 52Report of the Audit Committee

53 – 55Statement on Risk Management and Internal Control

56 – 58Analysis of Shareholdings

59 – 147Financial Statements

FOR MORE INFORMATION VISIT OUR WEBSITE

www.mtdacpi.com

148 – 149List of Properties

150 – 155Notice of Annual General Meeting

155Statement AccompanyingNotice of Annual General Meeting

• Proxy Form

A Message to Our FrontlinersWE SALUTE YOU

We at MTD Group of Companies would like to dedicate this message of gratitude to our frontliners who work tirelessly in battling against the COVID-19 pandemic, both in Malaysia and across the globe.

The COVID-19 pandemic is unprecedented, changing our lives drastically and affecting us in ways that many could not have imagined. You heeded the call to fight this pandemic, courageously dedicating your blood, sweat and tears while making sacrifices so that the rest of us can stay home and flatten the curve.

Thank you for giving us the strength and inspiration to rise above this challenging times. Your courage and altruism affirm our belief that Malaysia will emerge from this soon.

You are our true heroes and we stand by you!

You will always be in our thoughts and prayers.

MTD ACPI ENGINEERING BERHADANNUAL REPORT 2020

02

Corporate Information

CHIEF EXECUTIVE OFFICER

Tee Kim Siew

AUDIT COMMITTEE

Nik Din bin Nik Sulaiman, ChairmanDato’ Ir. Kalid bin AliasNik Faeruz binti Tan Sri Nik Hussain

NOMINATION AND REMUNERATION COMMITTEE

Nik Din bin Nik Sulaiman, ChairmanDato’ Ir. Kalid bin AliasNik Faeruz binti Tan Sri Nik Hussain

RISK MANAGEMENT COMMITTEE

Dato’ Ir. Wan Razali bin Wan Muda, ChairmanDato’ Ir. Kalid bin AliasNik Din bin Nik Sulaiman

COMPANY SECRETARIES

Chan Bee Kuan (MAICSA 7003851)SSM PC No. 202008001959Cheong Wei Ling (MAICSA 7009208)SSM PC No. 202008001285

COMPANY WEBSITE

www.mtdacpi.com

REGISTERED OFFICE

Menara MTD1, Jalan Batu Caves68100 Batu CavesSelangor Darul Ehsan, MalaysiaTel : +603-6195 1111Fax : +603-6188 0101Email : [email protected]

SHARE REGISTRAR

Mega Corporate Services Sdn BhdLevel 15-2, Faber Imperial CourtJalan Sultan Ismail50250 Kuala Lumpur, MalaysiaTel : +603-2692 4271Fax : +603-2732 5388Email : [email protected]

AUDITORS

BDO PLT (LLP0018825-LCA & AF0206) Chartered AccountantsLevel 8, BDO @ Menara CenTARa360, Jalan Tuanku Abdul Rahman50100 Kuala Lumpur, Malaysia

PRINCIPAL BANKERS

CIMB Bank BerhadMalayan Banking BerhadAmBank (M) BerhadRHB Bank Berhad

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities BerhadSector : ConstructionStock Name : MTDACPIStock Code : 5924

BOARD OF DIRECTORS

Dato’ Ir. Kalid bin AliasChairman / Independent Non-Executive Director

Dato’ Ir. Wan Razali bin Wan MudaIndependent Non-Executive Director

Nik Din bin Nik Sulaiman Senior Independent Non-Executive Director

Keith George Cowling Non-Independent Executive Director

Nik Faeruz binti Tan Sri Nik HussainNon-Independent Non-Executive Director


03

Corporate StructureAs at 30 July 2020

100% MTD CONSTRUCTION SDN BHD

60% MTD CONSTRUCTION(PHILIPPINES), INC.

40% INTRAXIS ENGINEERING SDN BHD

100% ACP (TRACKS) SDN BHD

100%ASC TILES SDN BHD

100% ASSOCIATED CONCRETE PRODUCTS (MALAYSIA) SDN BHD

100%ACP MARKETING SDN BHD

100%MAKIN PERMATA SDN BHD

100%GANDAAN UNIK SDN BHD

49% MODAL EHSAN SDN BHD

- Operating companies only- Shareholding percentage

is based on ordinary share capital only

CIVIL ENGINEERING & CONSTRUCTION

MANUFACTURINGINVESTMENT/

PROPERTY DEVELOPMENT


04

Board of Directors’ Profile

KEITH GEORGE COWLING

DATO’ IR. WAN RAZALI BIN WAN MUDA

DATO’ IR. KALID BIN ALIAS (Chairman)

NIK FAERUZ BINTI TAN SRI NIK HUSSAIN

NIK DIN BIN NIK SULAIMAN


05

DATO’ IR. KALID BIN ALIAS

Chairman / Independent Non-Executive Director

Malaysian 72 Male

Date of Appointment Length of Service15 August 2006 14 years

Academic / Professional Qualifications• Bachelor in Civil Engineering from the University of

Glasgow, Scotland, United Kingdom• Master in Public Health Engineering from the University of

Strathclyde, Glasgow, Scotland, United Kingdom• Registered Professional Engineer with the Board of

Engineers Malaysia• Fellow of The Institution of Engineers, Malaysia• Life Member of the Road Engineering Association of

Malaysia


NIK DIN BIN NIK SULAIMAN

Senior Independent Non-Executive Director

Malaysian 72 Male

Date of Appointment Length of Service31 October 2008 12 years

Academic / Professional Qualifications• Member of the Malaysian Institute of Accountants (MIA),

CA(M)• Fellow member of the Association of Chartered Certified

Accountants (FCCA)

Past ExperiencesMr. Nik Din has extensive experience in accounting, auditing and finance. He served in Sime Darby Group from 1992 to 2004, where he held positions as Group Chief Internal Audit Manager and Finance Director. He also worked in Promet Berhad from 1982 to 1992 as Financial Controller and later as Finance Director.

Past ExperiencesDato’ Ir. Kalid joined the Public Works Department (PWD) in 1975 where he served for 29 years in various capacities including holding the position of Civil Engineer in the National Housing Department, Ministry of Housing (1976-1981), District Engineer, Petaling, Selangor (1983-1986) Assistant Director (Roads) PWD, Selangor (1986-1988), Deputy Director of PWD, Terengganu (1988-1991), Director of PWD, Negeri Sembilan (1991-1993), Deputy Director, Jabatan Pembangunan Persekutuan Kelantan (1993-1996) and Director, PWD, Pahang (1996-2004), which was his last posting before retiring in November 2004.

DirectorshipListed Issuer Public Company• MTD ACPI Engineering Berhad • None

Membership of Board Committees• Member of the Audit Committee• Member of the Nomination and Remuneration Committee• Member of the Risk Management Committee

Attendance at Board Meeting for financial year ended 31 March 2020• 9 of 9 meetings

Directorships Listed Issuer Public Company• MTD ACPI Engineering Berhad • MTD Capital Bhd• Reach Energy Berhad Membership of Board Committees• Chairman of the Audit Committee• Chairman of the Nomination and Remuneration

Committee• Member of the Risk Management Committee



06

KEITH GEORGE COWLING

Non-Independent Executive Director

70 Male

Date of Appointment Length of Service15 August 2006 14 years

Academic / Professional Qualifications• Bachelor of Science in Civil Engineering from Dundee

University, Scotland, United Kingdom• Member of the Institution of Civil Engineers, United

Kingdom• Fellow of The Institution of Engineers, Malaysia, where he

served on committees including being the Chairman of the Tunnelling and Underground Space Technical Division

Past ExperiencesMr. Keith Cowling’s experiences include service with the City of Dundee District Council (1972-1976) in Dundee, Scotland, Mason Pittendrigh & Partners (1976-1977) in Edinburgh, Scotland,

Auscon Consultants (1979) and Petroleum Development Oman (1980-1981), in the Sultanate of Oman and Maunsell Consultants Asia (1980-1984) in Hong Kong.

Mr. Keith Cowling joined MTD Capital Bhd (“MTD Group”) since 1984 serving in various capacities; from Engineer to Chief Engineer, General Manager, Head of Business Development, Executive Vice President, Head, Business Development & Manufacturing Division, Executive Vice President, Head, Manufacturing Division and his current position as Adviser, Business Development.

Directorship Listed Issuer Public Company• MTD ACPI Engineering Berhad • None

Membership of Board Committees• Member of the Management Committee


DATO’ IR. WAN RAZALI BIN WAN MUDA

Independent Non-Executive Director

Malaysian 66 Male

Date of Appointment Length of Service2 May 2018 2 years

Academic / Professional Qualifications• Degree in Mechanical Engineering from the University of

Technology Malaysia• Registered Professional Engineer with the Board of

Engineers Malaysia• Fellow Member with The Institution of Engineers, Malaysia• Council Member of Road Engineering Association of

Malaysia• ASEAN Chartered Professional Engineer

Past ExperiencesDato’ Ir. Wan Razali started his career in 1977 as an officer with the Royal Malaysian Air Force and was with Senior Management Team in several semi-government bodies. He joined MTD Group in 1994 and headed the fleet operation in heavy machineries and highway consultancy services. In 2008, he became Executive Vice President to oversee MTD Group’s

Tollways Division, namely Kuala Lumpur-Karak Highway, East Coast Expressway Phase 1, the East-West Link Expressway and Kuala Lumpur-Seremban Expressway for 6 years until 2014. He was also the Director of ANIH Berhad between 2011 and 2014. During his involvement with highway concessions, he was appointed as the Honorary Secretary for Persatuan Syarikat-Syarikat Konsesi Lebuh Raya Malaysia. He retired in April 2014, after having served MTD Group for 20 years in various capacities. He has vast experience in aircraft engineering, highway engineering, building maintenance and gold mining. Dato’ Ir. Wan Razali also sits as Director in several engineering companies and engineering consultancy firms.

Directorships Listed Issuer Public Company• MTD ACPI Engineering Berhad • None • Lysaght Galvanized Steel Berhad Membership of Board Committee• Chairman of the Risk Management Committee



British Citizen with Malaysian Permanent Resident Status


07

NIK FAERUZ BINTI TAN SRI NIK HUSSAIN

Non-Independent Non-Executive Director

Malaysian 55 Female

Date of Appointment Length of Service18 February 2019 1 year

Academic / Professional Qualifications• Advanced Diploma in Business Administration majoring in

Transport from MARA Institute of Technology, Shah Alam

Past ExperiencesMdm Nik Faeruz began her career in 1989 with Mayban Finance Berhad. In 1994, she was promoted as Assistant Branch Manager, Petaling Jaya Branch. At Maybank Group, she was involved in the enhancement of business processes and procedures of the bank’s various departments nationwide and prepared the blueprint of new banking concept i.e. one stop financial service that are in used in all Maybank branches throughout the country until today.

Notes:

Family relationship with Director and/or major shareholdersNik Faeruz binti Tan Sri Nik Hussain is the daughter of Tan Sri Dr. Nik Hussain bin Abdul Rahman, an indirect major shareholder of the Company.

Nik Faeruz binti Tan Sri Nik Hussain is also sibling of Dato’ Nik Faizul bin Tan Sri Nik Hussain, an indirect major shareholder of the Company.

Saved as disclosed herein, none of the other Directors have any family relationship with any Director and/or major shareholder of the Company.


Mdm Nik Faeruz joined MTD Group in November 2003 as Deputy Fixed Assets Manager and was promoted to Manager in 2006 to oversee the fixed assets matters of MTD Group. Mdm Nik Faeruz was a Director of MTD Capital Bhd from May 2017 to March 2018 and assumed the post of Chief Operating Officer II of MTD Group from March 2017 to August 2017. She sits on the board of several private limited companies within MTD Group. In March 2019, Nik Faeruz was re-appointed as Director of MTD Capital Bhd.

Directorship Listed Issuer Public Company • MTD ACPI Engineering Berhad • MTD Capital Bhd Membership of Board Committees• Member of the Audit Committee• Member of the Nomination and Remuneration

Committee


Interest in securitiesNone of the Directors have any interest in the securities of the Company.

Conflict of interestNone of the Directors have any conflict of interest with the Company.

Conviction of offencesNone of the Directors have any convictions of offences within the past five (5) years.


08

Key Senior Management’s Profile

TEE KIM SIEW

Chief Executive Officer

Malaysian 60 Male

Mr. Tee Kim Siew was appointed as Acting Chief Executive Officer of MTD ACPI Engineering Berhad (“MTD ACPI Group”) on 5 September 2017. On 2 May 2018, he was re-designated as Chief Executive Officer and appointed as Group Chief Financial Officer of MTD Capital Bhd (“MTD Group”) from 2018 to 2019.

Mr. Tee also heads the International Real Estate & Property Development Division of MTD Group. He is instrumental in shaping the development of MTD Group’s overseas’ real estate & property business in Australia and United Kingdom. He is the Chairman of the Management Committee of MTD ACPI Group.

Mr. Tee began his professional accounting career at BSG Valentine, Simlers and Casson Beckman Chartered Accountants, London. He is a Fellow Member of the Association of Chartered Certified Accountant, United Kingdom and the Malaysian Institute of Accountants.

He returned to Malaysia and joined Metacorp Berhad in May 1996 as Head of Finance. Subsequently, he was appointed as Financial Controller of Metacorp Berhad in 2001. Due to his extensive experience in finance, he was promoted to Chief Financial Officer of MTD Group in 2005, and was responsible for two other previously public listed companies namely, MTD InfraPerdana Bhd and Metacorp Berhad.

Mr. Tee was also the Director of MTD Walkers PLC, a foreign subsidiary of MTD Group listed on the Colombo Stock Exchange in the Republic of Sri Lanka. He sits on the board of several other private limited companies. He holds 8,700 ordinary shares of MTD ACPI Engineering Berhad.

TEE KIM SIEW(Chief Executive Officer)

MAHADZIR BIN HASSAN @ MD HASSAN

AHMAD TARMIZI BIN ISMAIL

VIJAYARAJ A/L GOVINDARAJOO

AZIAH BINTI MUSTAPA


09

Key Senior Management’s Profile

AHMAD TARMIZI BIN ISMAIL

General Manager, Head, Construction Division

Malaysian 60 Male

Mr. Ahmad Tarmizi bin Ismail is the General Manager, Head, Construction Division of MTD ACPI since 1 July 2015. He joined MTD Group on 15 August 1990 as Senior Civil Engineer. He is a member of the Management Committee of MTD ACPI Group. He also sits on the board of several other local and overseas private limited companies within MTD ACPI Group and MTD Group.

Mr. Ahmad Tarmizi holds a Bachelor in Civil Engineering from University of Hartford, USA. Prior to joining MTD Group, Mr. Ahmad Tarmizi served Malaysian Highway Authority from October 1989 to August 1990 as Project Engineer.

VIJAYARAJ A/L GOVINDARAJOO

General Manager, Busines Development

Malaysian 53 Male

Mr. Vijayaraj A/L Govindarajoo is the General Manager, Business Development of MTD Group. Prior to this, he was the Senior Vice President, Project Director (Indonesia) for the Business Development & Overseas Business Division of MTD Group since 1 January 2015. He is a member of the Management Committee of MTD ACPI Group. He also sits on the board of several other local and overseas private limited companies within MTD Group.

Mr. Vijayaraj holds a Bachelor in Civil Engineering from University of Newcastle, Australia. A registered Professional Engineer with the Board of

MAHADZIR BIN HASSAN @ MD HASSAN

Assistant General Manager, Head, Manufacturing Division

Malaysian 48 Male

Mr. Mahadzir bin Hassan @ Md Hassan is the Assistant General Manager, Head, Manufacturing Division of MTD ACPI. He joined the Group on 10 November 1997 as Production Engineer and was promoted to current position on 1 October 2016. He is also a member of the Management Committee of MTD ACPI Group.

He graduated with a Bachelor of Mechanical Engineering from University of Malaya in 1996. He has wide knowledge of the industry, both locally and overseas, with more than 22 years of working experience in manufacturing.

His last position before joining MTD ACPI was as a Process Engineer with Samsung Electronics, Senawang. He holds 9,000 ordinary shares of MTD ACPI Engineering Berhad.

Engineers, Malaysia and a member of the Institution of Engineers, Malaysia. Prior to joining MTD Group, he served Pengurusan Lebuhraya Bhd. in 1989 and Kumpulan Jurutera Maju Sdn Bhd in 1993, where he held position as the Highway Design Engineer. He holds 50,000 ordinary shares of MTD ACPI Engineering Berhad.

AZIAH BINTI MUSTAPA

General Manager, Head, Finance & Treasury Division

Malaysian 50 Female

Mdm Aziah binti Mustapa is the General Manager, Head, Finance & Treasury Division of MTD ACPI Group and MTD Group. She joined the Group on 12 November 2019. She holds a Bachelor Degree in Accounting (Hons) from International Islamic University, Malaysia. She is a member of CPA Australia, Malaysian Institute of Accountants (MIA) and an Associate member of Malaysian Institute of Chartered Secretaries and Administrators (MAICSA).

She has more than 27 years of working experience in treasury, financial reporting, tax and strategic financial management in various sectors including telecommunication, education, oil palm plantation, manufacturing and service sectors. She also possesses experience in crafting financial strategies and managing accounting teams.

She started her career with Telekom Malaysia Berhad in 1993 and later joined KUB Malaysia Berhad with the last position held as General Manager, Group Finance & Strategic Management. She then joined Puncak Niaga Holdings Berhad in 2017. Her last position before joining MTD ACPI Group was as a Chief Financial Officer of Taiace Engineering Sdn Bhd.

ADDITIONAL INFORMATION:

Directorship in public companiesSave as disclosed therein, none of the key senior management held any directorship in public companies and listed issuers.

Family relationship with Director and/or major shareholdersNone of the key senior management has any family relationship with Director and/or major shareholder of the Company.

Conflict of interestNone of the key senior management has any conflict of interest with the Company.

Conviction of offencesNone of the key senior management has any convictions of offences within the past five (5) years.


10

0

30

60

90

120

0.0

0.2

0.4

0.6

0.8

REVENUE (RM Million)

SHAREHOLDERS’ FUND (RM Million)

PRE-TAX PROFIT/(LOSS) (RM Million)

NET ASSETS PER SHARE (RM)

226.31 Mil (20.31) Mil

2016 2017 2018 2019 2020

2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

2016 2017 2018 2019 2020

0.4

6

0.4

3

0.4

1

0.4

0

0.3

4

(9.0) sen 0.34

65.28 Mil

91.4

0

82.

11

80

.24

78.3

4

65.

28

(LOSS)/EARNINGS PER SHARE (Sen)

Group 5-Year Financial Highlights

0

100

200

300

400

(12)

(8)

(4)

0

4

-21

-14

-7

0

7

14

249.

54

250

.79

274.

16

249.

82

226

.31

5.24

(8.5

5)

9.0

0

(1.3

8)

(20

.31)

(2.0

)

(3.0

)

3.0

(2.0

)

(9.0

)

2016 2017 2018 2019 2020


11

Management Discussion & Analysis

ABOUT THIS REPORT

MTD ACPI’s Annual Report is guided by the principles of Integrated Reporting (“”) Framework format with the enhanced reporting requirements such as Management Discussion and Analysis Reporting Guide and Sustainability Reporting Guide, 2nd Edition both issued by Bursa Malaysia Securities Berhad (“Bursa Malaysia”) in the year 2017 and in March 2018 respectively.

This report covers the Group’s financial and operating results, environmental and social aspects as well as corporate governance and statement of internal control and risk management that affect our business and stakeholders.

Subsequent to the operating results and the assessment of aspects impacting the Group, the report covers each Division of the Group, namely, Civil Engineering & Construction, and Manufacturing in the Management Discussion and Analysis.

As we continue to adopt , no reinstatement of performance and changes to the aspect boundary and reporting scope were made in this sustainability statement.

BASIS OF PREPARATION

Scope and Boundary

We first adopted the principles in the International Integrated Reporting framework issued by International Integrated Reporting Council (“IIRC”) in the annual report for Financial Year Ended (“FYE”) 2017, and this transformed our approach in reporting. supports the integrated thinking, decision making and actions that focus on value creation over the short, medium, and long term. It also acts as a force for sustainability, comprising aspects of economic, environment and social dimension. Comparative analyses are included in the Report where necessary. The Integrated Report discloses material information of our strategic objectives, our operations and covers both financial and non-financial performance during the period from 1 April 2019 to 31 March 2020.

Reporting Framework

The following reporting frameworks and guidelines were considered when preparing this report:

• Companies Act 2016;

• Listing Requirements (LR) by Bursa Malaysia;

• Management Discussion and Analysis Guide (MD&A);

• The Sustainable Reporting Guide by Bursa Malaysia;

• Malaysian Code of Corporate Governance 2017 by Securities Commission;

• International Financial Reporting Standards (IFRS);

• Malaysian Financial Reporting Standard (MFRS);

• Global Reporting Initiative (“GRI”) Guidelines 4.0; and

• International Integrated Reporting Council (IIRC) Integrated Reporting Framework.

Our targeted reader

The annual integrated report is targeted primarily at providers of investment and our shareholders. However, we endeavour to have sufficient information available for all our stakeholders – customers, employees, business associates and regulators who are interested in how we create value for them.

SUMMARY OF OPERATIONAL PERFORMANCE

We recognise that is a continuing journey and the issuance of our 2020 report allows us to be focused and transparent in reporting the Group’s business activities to achieve our strategic objective in an integrated way by considering good corporate governance practice and risks. As our Group’s performance did not rely solely on financial aspects, the report also revealed the non-financial elements such as marketplace, environment, workplace and community that have become part of contributing factors to our achievements. These factors are outlined in the report as our sustainability efforts remain attuned to the operating market.


12


SUMMARY OF OPERATIONAL PERFORMANCE (CONT’D)

Civil Engineering & Construction Division

The Malaysia economy is expected to see a contraction of 2% or at best, growth of 0.5% in 2020. Unprecedented events from the last quarter 2019 up to first half of 2020 ranging from implementation of Movement Control Order (“MCO”), COVID-19 pandemic to US-China trade war and the sudden collapse of oil prices, exacerbated the delays to revive mega infrastructure projects announced in Budget 2020. In the financial year under review, the Civil Engineering & Construction business generated a revenue of RM172.4 million, representing 8% lower than the previous year revenue of RM187.3 million.

The Group’s Civil Engineering & Construction Division is expediting all delayed projects and actively pursuing any opportunities and project tenders to achieve our long-term sustainable earnings. While exploring for business opportunities, the Division will also closely monitor the progress of existing projects to meet our stakeholder’s requirement.

Manufacturing Division

The Manufacturing Division principal activities include manufacture and supply of precast concrete products for the construction industry for use in earthwork, civil, underground, structural, infrastructure, railway, environmental work appliances and other non-custom designs. The Division also specialised in Industrialised Building System (“IBS”) methodology. The Manufacturing Division factories are strategically located in Peninsular Malaysia, covering the Central, Eastern and Southern regions, to cater to various clients.

The Manufacturing Division recorded a revenue of RM53.9 million in FYE 2020, lower by 14% compared to RM62.5 million reported in the previous year due to slow customer demand.

In response, the Division reviewed its strategic plan refocusing its efforts on management activities, marketing strategy, resource allocation, cost optimisation, and business opportunity to ensure that all planned initiatives will be achieved successfully and ensuring all parties work towards achieving the desired common goals.

Staying Relevant

MTD ACPI recognises good corporate practices within its local and overseas operations will create greater value for our stakeholders. The relevance and quality of our products and services will always be part of our commitment by incorporating work ethics into the work culture.

Nurturing our People

We continue to strive to cultivate an environment that is conducive for professional growth, as realising the potential of our employees will enhance productivity, which in turn, will drive our business objectives. We focus on promoting equality and diversity at work, offering ample of opportunities for our employees to learn and grow professionally.

Committed towards the Stakeholders

MTD ACPI continues to play its role to attend to all stakeholders’ concerns while delivering value created through its business operations. This supports the Group in developing the right approach to value creation in improving its business development and prospect.

While our emphasis and drive are to achieve the Group’s aim in increasing revenue streams, we will always strive to perform our duty as responsible corporate citizen to our people, community, and environment. The Group will continue to build long-term relationships and gain trust with its stakeholders through various initiatives and approaches to align with the Group’s vision, mission and values.

Strategic Workshop (Business Transformation)

MTD ACPI, through its holding entity, MTD Group had organised a series of Strategic Workshop Sessions for our Managers together with the Senior Management team.

The objectives of these workshops were to study the effectiveness of current organisation processes by reviewing current Vision, Mission and Shared Values as well as the roles of each respective business unit and support services towards the attainment of MTD ACPI’s long-term strategic objectives.

The collective review consequently led to the realignment of individual objectives to the organisational goals, through the development of high level KPIs and standards of measurements. The outcomes of these strategic workshops include enhancement to our strategic focus and the respective business units’ action plans.


13


Future Outlook

The business outlook remains challenging globally. While the world is still grappling to contain the spread of COVID-19, global economies are also facing increasing risk of a US-China trade war. Coupled with political changes in Malaysia, the country is facing one of the toughest moments in time. As a result, we expect both the construction and manufacturing sectors to be impacted to a certain degree. To buffer the potential downside risks, we have established appropriate action plans to ensure continuity of our business operation in a sustainable way.

MTD ACPI will continue its efforts in managing the factors contributing to the operating challenges by reinforcing resources that boost production efficiency and innovation capabilities, while optimising overall costs and improving cash flow generation. In the medium term, our segmental strategies will enable us to provide value to our stakeholder in the respective operating markets in order to achieve future growth.

STRATEGIC BUSINESS MODEL

Our strategic business model is derived from our strategies, vision, mission and shared values that are focused on construction, civil engineering and manufacturing of its precast concrete products for infrastructure and buildings. The Group draws on the expertise of its people, with vast technical knowledge and experience in local and overseas projects and form the building blocks of our reputation within the construction and infrastructure industry.

The Group’s Civil Engineering & Construction Division’s principal activities are in construction of mountain roads, highways, bridges, building geotechnical works, erosion control and highway maintenance. The remarkable accomplishments to date include completion of the 36-km South Luzon Expressway (“SLEX”) in the Philippines, Kuala Lumpur – Karak Highway (“KLK”), East Coast Expressway, the improvement of the Jamarat Bridge and its surrounding areas in Mina, Saudi Arabia; the Penang Second Bridge, and the recent completion of the Klang Valley Mass Rapid Transit (“KVMRT”) Line Package V7 (“MRT V7”) in year 2017.

Meanwhile, our Manufacturing Division offers a full range of precast concrete products for various infrastructure and building projects by using the IBS methodology. We have completed 31 projects nationwide during the financial year under review.

Value Creation

Nurture - cultivate skilled workforce and develop innovative work culture

Human capital strategy “Attract, Develop, Retain” - embedding the “right talent” with the “right attitude” will do the “right things” at the “right time”.

Work as one - promote equal opportunities as well as encourage diversified workforces (different ethnicity, gender and age).

Innovate - on-going transformational and research initiatives

Industrial Collaboration Programme (“ICP”) - participate in ICP and benefiting the local industries’ development i.e. subcontracting, capability development programme, green technology adoption program and the IBS.

Innovative partnership - Our innovative partnership programme is dedicated to generate new business model and approach, sharing knowledge for improving work methods and systems.

Conserve - reduce resource consumption, waste generation and create a recycling-oriented society

Waste Management Policy and Hazardouse Waste Management Policy - implementation of 3Rs initiative “Reduce, Reuse, Recycle” and disposal of waste materials.

Digitalising Internal Processes - digitalising administration and human resources internal processes to drive operational efficiency beginning 2017.

Build - strong reputation and relationship

Civil Engineering & Construction - drawing on its extensive experience building complex infrastructure and civil engineering solutions

Manufacturing - The brand is well-known and trusted by customers as it provides quality assurance through certifications by regulators and accredited bodies.


14

STAKEHOLDER ENGAGEMENT

We continue to review IIRC’s and GRI frameworks as part of our continuous improvements initiatives in our reporting, and we constantly engage our stakeholders based on commitment to adhere to the underlying principles of accountability, inclusivity, materiality, responsiveness and completeness.

We are aware that our business decisions impact the concerns, needs and objectives of multiple stakeholder groups. Thus, we focus on sharing key information, improving new and existing relationships; and creating understanding of any impact to our projects and activities relevant to our stakeholders. Our form of engagement initiatives vary from providing conventional documents, electronic documents, web-based media platforms to face-to-face communications, as outlined below:

Stakeholders Value Added Engagement

Investor Provide greater transparency of business information for analysis when making investment decision.

· Annual General Meeting· CEO Briefing· Circular / Notice· Annual Report· Website

Client / Customer (Purchaser)

Provide excellent customer experience with upmost quality products and services and strengthen relationship with clientele.

· After-sales service· Monthly Progress Report· Exhibitions and Roadshows· Gallery displays

Industry Peers including Supplier and Business Partner

Create business opportunity, workforce upskilling and development of technologies via joint venture initiatives.

· Networking session· Contract negotiation· Site visits· Supplier evaluation

Employee • Career development and training opportunities while providing a safe working environment within the organisation.

• Promote work-life balance.

· Events and activities· Management and employee meetings· Circulation of policy· Internship programme· Training and development programmes

Regulator Embrace transparency within the daily operation and compliance with the industry’s regulatory standard to attain corporate sustainability.

· Inspection by local authority· Annual licences renewals

Government Participate and support Government’s plan for nation development.

· Consultation on regulatory matters· Compliance reporting· Site inspections and visits

Community / General Public

Continuous support and fund Corporate Social Responsibility activities.

· Community development programme· Corporate social events

Non-Governmental Organisation

Continuous support to Non-Governmental Organisation’s activities.

· Events and activities

Media Keep pace with Company’s events and prospect.

· Update on corporate development and key events on Group’s social media platform

· Develop relationship with press agencies



15

CIVIL ENGINEERING & CONSTRUCTION DIVISION

Introduction

The Civil Engineering and Construction Division is undertaken by MTD Construction Sdn Bhd, a subsidiary of MTD ACPI. It has over 30 years of experience and track record in the construction of mountain roads, highways, bridges, building geotechnical works, erosion control and highway maintenance.

Overview on Business

In year 2019, Malaysia’s construction sector grew at a significantly slower pace as its newly established government continues implementing several measures to trim down government debt and expenditures by suspending large-scale infrastructure projects across the country. Despite slow pace of growth in construction sector, the civil engineering business remains key revenue driver and contributing 45.4% of value of construction works. Contributions were largely from Pan Borneo Highway in Sabah and Sarawak; Central Spine Road in the East Coast as well as KVMRT Sungai Buloh-Serdang Putrajaya (SSP) Line and Light Rail Transit Line 3 (“LRT3”) in Klang Valley.

The current civil engineering works worth RM687.4 million consist of KVMRT Line 2 Package V208 from Taman Pinggiran to Persiaran Alpina and construction of two MRT stations for Equine Park (“EQP”) and Taman Putra Permai (“TPP”), plus a multi-storey car park. In addition, the Division was awarded the contract of Pavement Rehabilitation and Associated Works at East Coast Expressway from Lebuhraya Pantai Timur 2 Sdn Bhd, which commenced in November 2019.

For building works, the Division is constructing residential properties at Taman Sutera Kajang and Taman Tasik Utama, Ayer Keroh, worth RM122.7 million.

The Division’s Quality Management System has been certified by Lloyd’s Register Quality Assurance and in compliance with ISO 9001:2015 Quality Management System. The scope of this certification covers design, management and implementation of civil engineering and building works including turnkey projects. The Group has a dedicated team to progressively improve its product quality to maintain the accreditation of ISO 9001:2015 Quality Management System and regularly review its Quality Management System to ensure its relevance. This is in line with our Group’s vision of delivering the best product quality to our clients.

In recognition of the Civil Engineering & Construction Division’s abilities and capabilities, the Construction Industry Development Board (“CIDB”) has awarded the Division a 5-star rating up to year 2020.

Operational Financial Performance

The Civil Engineering & Construction Division remains the key contributor to the Group, achieving 76% of the Group’s total revenue or RM172.4 million for FYE 31 March 2020. The revenue was derived mainly from civil and building works, representing 72% and 28% respectively.


Civil Engineering & Construction Division’s Revenue and Profit/(Loss) in RM Million

Civil Engineering & Construction Division’s Revenue by Segment for FYE 31 March 2020

(50)

0

50

100

150

200

2016 2017 2018 2019 2020

158

.5

182.

4

186.

4

187.

3

172.

4

(2.7

)

11.8

19.9

15.4 6.4

Revenue Profit/(Loss)

28%Building works

72%Civil works


16

CIVIL ENGINEERING & CONSTRUCTION DIVISION (CONT’D)

Review of Operating Activities and Initiatives

The core businesses of Civil Engineering & Construction Division mainly are civil engineering and infrastructure construction and building construction.

The current outstanding order book is valued at RM406.7 million, comprising civil & infrastructure works (85%) and building works (15%). The on-going projects are KVMRT Package V208, Pavement Rehabilitation and Associated Works for East Coast Expressway, residential construction for Taman Sutera Kajang, Selangor and Taman Tasik Utama in Ayer Keroh, Melaka.

For civil and infrastructure works, KVMRT Package V208 is expected to complete in year 2021. In FYE 2020, MTD Construction Sdn Bhd was successfully awarded the contract of Pavement Rehabilitation and Associated Works for East Coast Expressway valued at RM8.7 million. The project commenced in November 2019 and is expected to complete by July 2020.

On building works, our two projects are in Taman Sutera, Kajang and Taman Tasik Utama, Ayer Keroh, Melaka. The Taman Sutera Kajang project is expected to complete by December 2020. The Division completed the construction of Phase 19C & 19D of Taman Tasik Utama, Melaka, comprising 93 units of single storey terrace house in March 2019. The Phase 20A for the construction of 54 units of single storey semi-detached house project commenced in November 2018 and is expected to complete by July 2020.

In the coming financial year, the Division strives to replenish its order book through bidding new projects in both civil & infrastructure works and building works; keep on-going project compliance to specifications and clients’ requirement and operational efficiency for timely completion. Our strategic focus initiatives include:


Monitor closely on-going projects progress to meet timeline and optimise interim claims for cashflow management

Participate and secure new projects by forming strategic partnership with trustworthy business partners

Optimise operating cost for better profit margin


17

Risk and Measures

MTD ACPI has a robust risk management framework in place to guide us in responding to any potential risks and to effectively manage those risks. All the key risks identified, and measures taken by the Division in mitigating these risks are summarised below:

Key Risk Description Mitigation Measures

Delay in project completion

• Certain projects that are unable to meet the agreed delivery timeline as stated in the contract.

• Liquidated Ascertained Delivery (LAD) may turn the project from profit to loss making and tarnish the reputation of the Group.

• Project progress is monitored closely by project teams with status of projects reported to management on a periodic basis.

• Continuous effort in addressing non-conformance cases and project deliverables.

• Regular quality checks to meet project quality specification.• Organise frequent awareness sessions and trainings to upskill

project management, maintain motivation and leadership.

Inability to secure project/order/ business

Inability to secure projects due to intense competition, shortage of projects to tender in the market and unfavourable economy environment may affect the business growth and sustainability of the Civil Engineering & Construction Division.

• Maintain good public relationship with the Government, existing and potential clients to secure new contracts.

• Joint ventures with other companies to actively participate in overseas construction works.

• Participate in tender advertisement and invitation to explore business opportunities.

Non-performing contractor/ sub-contractor

The Civil Engineering & Construction Division operates as Project Manager for certain projects. Non-performing sub-contractor may have direct adverse impact on the Group’s reputation and profit margin.

• Establish sub-contractor selection and evaluation processes.• Implement due diligence verification on sub-contractors.• Conduct sub-contractor performance evaluation.• Regular meetings with sub-contractors for project progress

and work quality monitoring.• Establish detailed project recovery plan and distribute work

packages to sub-contractors.

Worker without permit

Workers without permit would result in stop work order by regulators and criminal prosecution against the Directors in the worst case scenario.

• Issuance of letter of acceptance for sub-contractors includes compliance with the regulatory requirement clauses i.e. work permits.

• Sub-contractor is required to submit a list of foreign workers employed with supporting work permit details to headquarters.

• Random inspection / audit on workers permits at sites.

Safety, Health & Environment (SHE) risk

SHE hazard could lead to penalty by authorities and stop work order in the worst case scenario may have a significant impact on project timeline.

• Engage experienced environmental consultant to monitor and advise on the overall environmental aspect.

• Establish SHE policy and procedures, and conduct safety trainings to promote a safe working environment.

• Regular inspections and reports on unsafe practices by Safety Officer for rectification.

Shortage of construction material

Shortage of raw materials would affect the production schedule and product delivery.

• Establish minimum stock level for raw materials.• Establish Material Requisition Planning for projects and carry

out regular updates.• Identification of pool of suppliers.

Increase in construction material cost

Prices of raw materials, such as sand, cement and steel, on an uptrend basis will increase project cost and affect the profitability of the project.

• Review pricing from suppliers through quarterly forecast and pricing comparison.

• Sign fixed rate contracts with construction material suppliers.



18

CIVIL ENGINEERING & CONSTRUCTION DIVISION (CONT’D)

Outlook

Malaysia’s economy is forecasted to experience a contraction of 2% to growth of 0.5% in 2020 versus a growth of 4.3% in 2019, from the impact of temporary halt of economic and social activities during the MCO, coupled with on-going trade tensions between the US and China; and the sharp decline in oil prices.

Despite that, the Economic Outlook issued by Ministry of Finance, expects construction sector to grow at 3.7% from the on-going and revival of large-scale infrastructure projects which include East Coast Rail Link (ECRL), Mass Rapid Transit Line 2 (MRT 2), Light Rail Transit Line 3 (LRT 3), electrified double track Gemas-Johor Bahru, Klang Valley Double Track (KVDT2) rehabilitation project, Central Spine Road, Pan Borneo Highway and Coastal Highway in Sarawak. Although the revival of mega projects outlined in Economic Outlook may provide growth to the construction industry, given the substantial uncertainties ahead and that global economies are not yet showing sustained signs of recovery, it would be prudent for MTD ACPI to conservatively manage its costs and earnings during this period.

MTD ACPI has hastened its efforts to mitigate the impact by putting more emphasis on ensuring our on-going projects meet respective timelines, while deferring any capital expenditure investments and major expenditures to ensure the Group has sufficient and sustainable liquidity to weather the current situation.

MTD ACPI will continue to pursue opportunities arising from the country’s infrastructure development plan and is confident that the Group can achieve a sustainable growth in FYE 2021. The Civil Engineering & Construction Division has identified several potential infrastructure projects and in-house property pipeline to replenish its order book. The Division will remain selective and plans to form strategic partnership with reputable partners during tender participation and project execution to augment its book replenishment efforts.

MANUFACTURING DIVISION

Introduction

MTD ACPI’s Manufacturing Division consists of Associated Concrete Products (Malaysia) Sdn. Bhd. (ACPM) and ASC Tiles Sdn. Bhd. (ASC Tiles). Their principal activities include manufacturing and supply of precast concrete products to the construction industry for use in earthwork, civil, underground, structural, infrastructure, railway, environmental work appliances and other non-custom designs.

The Manufacturing Division of MTD ACPI is one of the pioneers in the manufacturing precast concrete products and adoption of IBS methodology. With more than 30 years of experience, the Division is well-known in the market for its high-quality products and services, and recognised as the most dominant manufacturing specialists in roads and highway products and services in Malaysia. In FYE 2020, the Division completed the Projek Penswastaan Lebuhraya Bertingkat Damansara – Shah Alam (DASH CB3), Hospital Balik Pulau, Pulau Pinang, Pusat Perubatan Universiti Kebangsaan Malaysia (PPUKM) Car Park, Pengerang Deepwater Jetty Terminal Phase 3, Ilaj Home, Kuala Lumpur and Bangunan Commercial Manjalara, Kuala Lumpur with a total value of RM22 million.

Overview on Business

Over the last several years, Manufacturing Division has been utilising IBS or known as Pre-fabricated / Pre-fab Construction for its projects. This methodology is a technique of construction whereby components are manufactured in a controlled environment, either at site or off site, placed and assembled at the construction sites. This is in line with Construction Industry Development Board (CIDB) plan to increase the adoption of IBS in driving the industry towards efficiency.

To acquire competitive advantage over other market players, the Manufacturing Division will continue to utilise IBS methodology for its projects. With increasing interest in IBS products in Malaysia, the strong demand for IBS product will be key to growth for the Division.

The Division has three (3) active operating factories located at strategic locations throughout Peninsular Malaysia covering central, southern and eastern regions, namely ACPM Seremban, ACPM Pontian and ACPM Kuala Terengganu, to meet customer’s requirements. Most of the plants are equipped with the latest automated machinery and technologies. The Manufacturing Division is capable of producing 500,000 metrics tonne of concrete products annually.



19

There are five (5) categories of products manufactured under Manufacturing Division namely, standard products; special / customised products; IBS products; licensed products and block & tiles.

ACPM is a listed service provider of Suruhanjaya Perkhidmatan Air Negara (“SPAN”) for Precast Concrete Water Tank for water storage system. The listing enables the Company to secure more jobs in the water services industry in Peninsular Malaysia, including the Federal Territory of Putrajaya and Labuan.

Operational Financial Performance


Standard Products

Special/ Customized

Products

IBS Products

Licensed Products

ASC Blocks & Tiles

Prestressed Sheet Piles Prestressed Beams Pipes & Manholes Box Culvert & U-Drain RC Piles L- Shape Retaining Wall

Jetty Components - Pilecaps, Trenches, Slabs & Walls

Railway Components - Plinth, Walkway Components, Level Crossings & Cable Troughs

Tunnel Segment Bleachers Parapets

Hollowcore Slab Half-Slab Columns & Beams Staircase Fast Wall

Matiere Acontank Railway Sleepers

Paver Blocks Roof Tiles

The Division adopts a stringent quality control and regular performance tests are carried out on all precast concrete products in conformance to the relevant standards. The Division was certified by IQ Net and SIRIM QAS International that complies with ISO 9001:2015 Quality Management System.

The Group has a dedicated team to improve its product quality and maintain the ISO 9001:2015 Quality Management System accreditation. Delivering best product quality to our clients is our upmost priority and aligned to MTD ACPI’s vision.

Manufacturing Division’s Revenue and Profit/(Loss) in RM Million

(40)

(20)

0

20

40

60

80

100

120

105.

0

71.2

87.

8

62.5

53.9

15.0

(16.

0)

8.5

(26.

9)

(6.9

)

2016 2017 2018 2019 2020

Revenue Profit/(Loss)

In FYE 2020, the Manufacturing Division achieved a revenue of RM53.9 million, lower by 14% from RM62.5 million in FYE 2019. The Division’s loss narrowed to RM6.9 million in FYE 2020, an improvement of 74% from a loss of RM26.9 million in FYE 2019, due to better cost containment and cost control.

Review of Operating Activities and Initiatives

The current on-going projects include SUKE CBS, Privatisation of Lebuhraya Persisiran Pantai Barat (Taiping – Banting) for West Coast Expressway Sdn Bhd, Trackworks for Thomson Line – East Coast, Projek Tebatan Banjir Baroh Tok Jiring / Batu Rakit, Terengganu and others. Our balance order book totalling RM108.4 million are expected to contribute to our revenue in the next 3 years.


20

MANUFACTURING DIVISION (CONT’D)

During the financial year, Manufacturing Division, both ACPM and ASC Tiles, recorded a revenue of RM53.9 million mainly contributed by the following contracts:

i) SUKE Package CB5, CA2 and CA1 (prestressed beam and parapet)ii) DASH Package CA1, CB1, CB2, CB3, and CB4 (prestressed beam, parapet and matiere)iii) West Coast Expresswayiv) Thompson Line Package T250 Singapore (walkway components/cable trough)v) IBS Singapore (Sengkang, Riverfront)vi) Pengerang Jetty (prestressed beam)vii) Sg Tok Jiring, Terengganu (Sheet piles and prestressed beam). The Division has established action plans for the year 2021 with the strategy to primarily focus on improving operational activities and efficiencies. These initiatives include identifying new construction technologies and manufacturing processes to further improve and manage our operational costs.

Action Planfor financial year

ending 2021

• To embark on Prefabricated Prefinished Volumetric Construction (PPVC) using modular system and replacing conventional system

• To embark supply and install basis for IBS project especially in East Coast Region

• To implement strategy in cost saving and time reduction

• To invest on capital expenditure for higher production capacity and efficiency

Risk and Measures The following are the key risks faced by the Manufacturing Division and the measures we take to mitigate them.

Key Risk Description Initiative Measure

Inability to secure project/order/business

Intense competition, and volatile changes to global economy would have an impact to the sustainability of the Division leading to under-utilisation of plant capacity and efficiency rate.

• Develop business plan and review business strategy for new business opportunities.

• Engage and maintain close relationship with existing and potential customers.

• Diversify product portfolio.

Untimely delivery to customer

In the competitive business environment, timeliness in product delivery is the key driver to customer satisfaction and confidence.

• Monitor production planning, manufacturing processes and delivery schedule.

• Identification, evaluation and appointment of alternative suppliers and sub-contractors / fabricators.

• Customers engagements on new delivery schedule for any potential delays.

Shortage of raw material

Availability of raw materials is key to meet production schedule and delivery of products to customers.

• Maintain minimum stock level for raw materials.• Advance production forecast and procurement planning.• Continuous effort to identify pools of suppliers.

Safety, Health & Environmental (SHE) risk

SHE hazards such as dust and noise exposure and work place incidents could result in penalties by authorities and production delays.

• Personal protective equipment is provided to workers.• Periodic environmental monitoring and audit on safety and

health are carried out by Department of Occupational Safety and Health (“DOSH”), and internally by SHE Officer of MTD Group.

• Disciplinary actions are taken on staff and/or sub-contractors who do not adhere to safety procedures.



21

Key Risk Description Initiative Measure

Non-performing contractor/ sub-contractor

Delay in production schedule and quality issues from low quality labour sub-contractor at factory and site.

• Monitor sub-contractors’ performance.• Conduct project and site meeting to monitor project

management’s shortcoming and issues.

Increase in labour cost

Increasing labour cost may affect the Division’s profit margin and ability to offer competitive pricing to customers.

• Review workers’ basic pay and commission structure.

Risk of theft (stock/ asset pilferage)

Stock pilferage, including stealing of Division assets i.e. scrap metals and stock, for personal gain.

• Establish security measures such as security guards and perimeter fencing.

• Periodic physical verification and reconciliation.

Increase in raw material cost

Profitability of the Manufacturing Division can be affected arising from price hike of construction materials such as sand, cement and steel.

• Sign a fixed rate contract with material supplier for a period of time.

• Establish procurement planning and review on a periodic basis.

Worker without permit

Illegal workers would result in stop work order by authorities.

• Inclusion of compulsory foreign workers’ permit clauses in Letter of Acceptance.

Operating without Certificate of Fitness(“CF”)

Operating without CF could result in penalties or ceased operations in the worst-case scenario.

• Monitor application progress required to obtain CF.

Quality of product Quality of product can impact reputation of the Division leading to possible loss of key customers.

• Stringent monitoring on product quality. • Regular quality briefings and conduct trainings on

Performance Management System.• Adopt rigorous quality assurance and quality control

procedures.

Outlook

For the year 2020, Malaysian economy is expected to see a contraction of 2% to a low growth of 0.5% on the back of a highly challenging global economic outlook from COVID-19 pandemic, low oil prices and US-China trade wars.

Amidst the slow economic recovery expected in 2020/2021, MTD ACPI’s Manufacturing Division projected revenue will come from its balance order book. For ACPM, 68% of its revenue is expected to derive from its core products namely, prestressed beams, sheet pile, RC and RC piles and spun pipes whilst the remaining 32% is expected from its IBS products.

Apart from securing revenue from its on-going projects, the Division is eyeing potential new projects with estimated contract value amounting to RM120 million.

In addition, the Division is also looking to bid for major projects, namely, the tunnel segment for Changi Airport, the Cross-Island line in Singapore, ECRL project (beam) and local projects for its IBS product totalling RM444 million.

Barring any unforeseen circumstances, the Division anticipates it will be able to secure more jobs and replenish its order book. The Division has intensified its cost optimisation efforts through reducing wastages, adoption of new manufacturing technologies, encouraging innovations and improving the quality of precast concrete products. In addition, the Division continues to invest in improving its manufacturing efficiency while maintaining high safety, health and environmental requirements at its plants.



22

Sustainability Report

OUR COMMITMENT TO BUSINESS SUSTAINABILITY

We are pleased to share our FYE 2020 MTD ACPI Sustainability Report, describing our sustainability efforts as we strive towards meeting our economic, environmental and social goals.

Whistle Blowing Policy

We established the whistle blowing policy with the aim to provide a mechanism for all employees and other stakeholders to report any concerns on any suspected or wrongful activities or wrongdoings. These refer to any potential violations or concerns relating to any laws, rules, regulations, acts, ethics, integrity and business conducts, including any violation or concerns relating to malpractice, illegal, immoral, embezzlement and fraudulent activities that will affect the business and image of the Group. This policy safeguards the safety of the whistle blowers’ identity and protects them from harassment or victimisation for reporting in good faith.

Kindly refer to the Corporate Governance Report for an overview on the policy and procedures on Whistle Blowing which is available in the Corporate Governance Section on MTD ACPI’s website at http://www.mtdacpi.com/.

Code of Conduct and Business Ethics / Anti-Bribery and Corruption (“ABC”) policy

Section 17A (1) of the MACC (Amendment) Act 2018 addresses corporate liability for corruption where directors and senior management will be held personally liable for acts of corruption committed by the organisation, either by personnel or parties acting on behalf of the organisation. Penalties include fines up to RM1 million and/or prison sentences of up to 20 years for those in charge of the company. Additionally, Section 17A allows a defence for the organisation, by proving it had in place “adequate procedures” designed to prevent person(s) associated with it from undertaking such a conduct. A Ministerial Guidelines on Adequate Procedures issued laid out five (5) key principles on how Adequate Procedures may be developed as lines of defence for commercial organisations as well as those in charge with governance and management of the organisation.

In view of this new act, the Group enhances its Anti-Bribery and Corruption policies to include adequate procedures and implemented several programmes based on the ministerial guidelines.

The ABC policy is available on MTD ACPI’s website at http://www.mtdacpi.com.

The Group acknowledges that the principles of responsible business and sustainability are key business drivers that will secure MTD ACPI Group’s future and create long-term value for our shareholders. Sustainability initiatives are not new, as they have been part and parcel of the business for years, even before we presented our first report on Group Corporate Social Responsibility (“CSR”) in 2014. In the report, we outlined our commitment and responsibility towards serving the community, enhancing workplace practices, guarding our environment and building our sustainability reputation in the marketplace.

In support of Bursa Malaysia Securities Berhad’s effort to improve sustainability disclosure, this Sustainability Report has been prepared with reference to International Reporting Frameworks including the Global Reporting Initiative (“GRI”) Guidelines 4.0. This Report describes our governance, environment and social performance for the financial year ended 31 March 2020. Our performance in these areas is reported throughout the four (4) sections of this Statement: Marketplace, Environment, Workplace and Community.

SUSTAINABILITY GOVERNANCE

MTD ACPI continues to uphold our commitment to sustainability, ensuring we create economic value and operate in an environmentally responsible business conduct as a responsible corporate citizen. Our sustainability efforts are governed by our corporate structure with ultimate responsibility from our Board who oversees the Group’s corporate sustainability performance. The Chief Executive Officer (“CEO”) oversees the implementation of the organisation’s sustainability approach and ensures that key targets are being met with support of the Senior Management.


23


Customer Privacy

A Personal Data Protection Policy (“PDPP”) was established by the Group with the aim to provide and ensure internal guidance is applied to all business units, divisions, departments and personnel within the Group. PDPP describes the process for clarifying and assessing any data protection or confidentiality issues to ensure that necessary data protection steps have been taken and appropriately assessed in line with the Personal Data Protection Act 2010 (“PDPA”).

Due to the wide-ranging nature of the Group’s business, the Group processes significant quantities of personal and sensitive data. Therefore, we ensure that all employees under the Group are required to adhere to and comply with guidelines, policies, directives and standard operating procedures issued by the Group from time to time. Failure to abide by and comply with the PDPA is subjected to disciplinary action, including termination.

The PDPP policy is available on MTD ACPI website at http://www.mtdacpi.com/.

MARKET PLACE

Industrial Collaboration Programme (ICP)

The Civil Engineering & Construction Division remains as a package contractor in the Industrial Collaboration Programme (“ICP”) of the MRT project namely KVMRT SSP Line (Sungai Buloh-Serdang-Putrajaya), involving exercises that value-add to any procurement made using the funds contributed by the Government of Malaysia.

The Civil Engineering & Construction Division executes a subcontracting project on an ICP Credit Value (“ICV”) under the direct offset of the Economic Enhancement Programme (“EEP”). The projects include activities such as pilling works, RC structural works and installation of segmental box girders, which are expected to generate a total of RM152.1 million worth of ICV. In FYE 2020, the Division has conducted various trainings, estimated to be valued at RM4.2 million, including the Safety, Health and Environmental Training, Concrete Quality Training and BIM trainings.

The Civil Engineering & Construction Division signed a memorandum of understanding on Industrial Collaboration Programme with Technology Depository Agency. Upholding the Group’s commitment to the Government to benefit the industry and enhance the country’s socio economic development, this collaboration aims to give back to higher learning institution namely, University Kuala Lumpur (“UniKL”) to carry out industrial research. The ceremony was witnessed by Yang Berhormat Maszlee Malik, Minister of Education.

This project is recognised as a CSR initiative although the funding came under the contract package.

International Organization for Standardisation (“ISO”)

The Civil Engineering & Construction and Manufacturing Divisions are both certified with ISO 9001:2015 as of the date of this report. The Group recognises that good customer relationship is key to the success and sustainability of the Group and it has established, implemented and maintained the Quality Management System (“QMS”) to ensure that the quality of its products and services meet international standards and efficiency.

Corporate Briefing to Shareholders

Chief Executive Officer, Mr. Tee Kim Siew held a corporate briefing to shareholders at the 26th Annual General Meeting as an initiative to keep the shareholders abreast on the Group’s financial performance and activities.

Product Exhibition

The Group participated in CIDB’s IBS Component Gallery to showcase the Group’s IBS modules. The gallery aims to provide avenue for organizations to make visible their products to the stakeholders namely industry players, contractors and government agencies.


24

ENVIRONMENTAL

Environmental Commitments

The Group recognises the potential impact of our business operation on the natural environment and is committed to minimising the environmental impact and impact on the communities in which we operate, by adopting sustainable practices. We actively upskill our employees to increase awareness and understanding on environmental issues, regulations and control measures, by providing trainings and awareness programmes on matters related to waste management, emergency response plan and evacuation, cranes and gears lifting.

Our Facilities

The Group promotes green culture and responsible use of resources. We strive to achieve these goals throughout our operations. Initiatives such as water efficiency, energy efficiency and circular economy through Reduce, Reuse and Recycle (“3R”) programmes are being implemented across our facilities to improve our waste management, air quality, and environmental protection. Policies included Waste Management Policy and Hazardous Waste Management Policy were established to ensure our environment and facilities are kept clean and safe and in compliance with the legal requirements from the authorities. In response to COVID-19 pandemic, we initiated strict safety and health policies and procedures in line with the Standard Operating Procedures (“SOP”) from the National Security Council of Malaysia. These SOPs include visitor’s registration, temperature taking, as well as implementing strict social distancing measures. We monitor these SOPs from time to time and will enhance as and when new SOPs are introduced.

Waste Disposal

Licensed external contractors were engaged to collect wastes such as scrap iron, scheduled waste, metals from our construction sites, and disposed at approved facilities under the supervision of our respective representatives from factories and headquarters. As part of our efforts to protect the environment, reusable waste such as bitumen emulsion is recycled to reduce waste, while non-reusable chemical waste are collected by authorised parties and disposed in accordance with the legal requirements by the Department of Environmental.

Mitigating Pollution

As part of the Group’s commitment to mitigate environmental pollution, our Civil Engineering & Construction Division has formulated the Environmental Management Plan (“EMP”) to ensure all of our projects comply with the standards and guidelines required by the Department of Environment (“DOE”) including:

• Malaysia’s Environment Quality Act 1974• The Planning Guidelines for Environmental Noise Limits

and Controls, Second Edition, 2007• The Planning Guidelines for Vibration Limits and Control in

the Environment, 2nd Edition, August 2007• Standard Method for the Examination of Water and

Wastewater (2005), 23rd Edition by APHA, AWWA and

WEF

Periodic monitoring for water quality, air quality, and noise level at projects sites are carried out by our Civil Engineering & Construction Division to ensure that the activities conducted comply with the DOE’s requirements. Apart from monitoring efforts, we also strictly prohibit open burning within our project sites to prevent emission of hazardous gases, smoke and particles.

Water Quality

We strictly monitor and keep track of the water quality within our operation areas throughout our project period to prevent our precious water resource from being polluted. We performed the Ammoniacal Nitrogen (AN) reading to ensure the water quality does not exceed the safety level required by the DOE.

The water quality may exceed the permissible limit occasionally, mainly due to non-construction activities, such as decomposition by organic and inorganic matter as well as sullage from the nearby residential areas and other waste such as soil particulate from soil runoff, accompanied by rainwater flowing to the surrounding area. With the exception of the above, the water quality is kept within limits.

Noise Level

The noise in our construction activities mainly originates from structure works, piling work activities, and other on-going construction activities. Measures taken by MTD ACPI to minimize noise levels during our operations include strict adherence to allowable operating time, installation of noise barriers and noise level monitoring. We strictly arrange the operating time in accordance with the legal requirements. Temporary noise and sound barriers were installed at some construction areas to prevent noise disturbance to nearby neighbourhoods. Noise level readings are carried out regularly at our construction sites during the day, evening and night-time. The average environmental noise level from our construction sites does not exceed 80 decibels as required by the DOE.



25

WORKPLACE

Our People

The Group recognises that our employees are our important asset and the main driving force in contributing and making the company successful, and ensuring the business is on a sustainable growth path.

We recognise that a harmonious and inspiring working environment enable our employees to realise their potential. We provide equal employment, promotion and development opportunities for all our candidates and employees regardless of gender, age, ethnicity, cultural background, skills and experience in the workplace.

Communication is one of the core values of the group. We actively communicate with employees to understand their needs and ensure that their goals are aligned with the Group’s clear direction.

Workforce

As at 31 March 2020, we have a total of 383 employees (2019: 437); illustrated as below:


Gender & Age

In today’s workplace, women are equally capable and successful, and yet the gender gap is still a widespread problem. We recognise the importance of gender equality and we encourage gender and age diversity across our workplace. Due to the nature of the industry, the proportion of male employees is still higher than female employees, and we will strive to achieve gender balance. As mentioned earlier, we do not discriminate between age and gender, and we employ candidates based on their capabilities.

The gender and age balance of the workforce is tabulated in the infographic below:

0

20

40

60

80

100

Male

Female

2019 2020 2019 2020

No. of employees by gender Employees leaving employment by gender

77% 76%

24%23%

82% 82%

18%18%

Male

Female

76%

24%

Male

Female

77%

23%

by Gender

< 26

26 - 35

36 - 45

46 - 55

> 55

6%

28%

19%

31%

16%

by Age


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Ethnic Diversity

We believe that a diverse workforce and an open and caring organisational culture are the principal factors for our business success. We welcome talented people with different perspectives and different social and cultural backgrounds, and promise to actively recruit and retain talents to ensure the continued success of the Group.

TALENT DEVELOPMENT

Performance Driven Culture

Creating a performance driven culture requires a systematic approach to managing the performance of MTD ACPI Group, both the teams and individuals. We offer various programmes that support our employees’ skills development and knowledge enhancement. These programmes range from on-boarding sessions to technical specific trainings such as health, safety, and environment. We encourage our leaders to discuss and formulate top down strategy for continuous people and business development.

Employee Turnover Rate

The Group recorded an employee turnover rate of 16% for the FYE 2020 (2019: 12%). Higher employee turnover rate was mainly contributed by resignations, expiration and termination of employment contracts.

Attracting Talents

We believe the right recruitment will induce stable and sustainable growth for the company and our employees’ career. We actively recruit the right talents through the Group’s website, recruitment agencies, media advertisements, career fairs and internal employee recommendations.

We aim to attract and retain our talent through attractive remuneration, enhancing employees’ welfare, and providing career development opportunities. We understand that employees’ wellbeing and career development opportunities are the main factors that attract and retain the best talents. In addition, we also provide various types of training and education support for our employees to learn and expand their knowledge. We will expand our compensation and benefits to ensure consistency with the market and to maintain our employees’ positive experience.

by Ethnic Composition

Malay

Chinese

Indian

Others

77%

7%

3%

13%

Ethnicity (%)

New Hire Breakdown by Age Group and Gender Campositions

< 26

26 - 35

36 - 45

46 - 55

> 55

46%

18%

7%

7%

22%

Male

Female

89%

11%

Age (%)

Gender (%)


In FYE 2020, we recruited a total of 28 employees. We believe that the employees we hired have extensive knowledge and professional skills to perform their duties.


27

Succession Planning

We design our succession planning within the Group with the main objective of ensuring the Group is prepared with a plan to support operational and service continuity in the event that Senior Management team, key business leaders, Heads of Division or critical position holders leave their positions. We completed our succession planning framework in 2019 and the activities are being implemented in stages.


Training & Development

We continue to promote a learning culture with the aim towards operational excellence for the Group and for employees’ continuous development. Leadership development will unlock better leadership skills, decision making and focus through a series of strategic programmes in line with Group’s corporate initiatives.

We conducted in-house trainings, maximising our conducive learning facilities and environment, organised induction programme for newcomers, safety and health courses for our employees at head office and sites, as well as performance enhancement courses to improve communication skills. All our internal training programmes are delivered by our in-house trainers or appointed training providers.

External programmes allow exposure to new technologies and enhance technical knowledge for our people and the business. These external training programmes help to ensure that every employee has the right skills to support our operational and strategic objectives, while furthering their own professional development.

We develop a diverse pipeline of talents and provide our employees the opportunities to learn and grow, overcome challenges, take on new roles and adopt greater responsibilities. Capable employees possessing the right skills with the right culture building, drive the Group to achieve its performance driven aspiration.

As a Group, we have organised a total of 103 training sessions (2019: 122 sessions) including internal, external and on-the-job trainings, from April 2019 to March 2020. These training sessions covered a wide range of topics from technical skills, safety awareness, training programmes for MTD Security Officers, ISO 9001:2015 Quality Management System trainings, new employee induction trainings, strategic planning workshops to corporate liability trainings.

In-House

External

84%

16%

Types of Training (%)

MTD ACPI Group Training Programs April 2019 - March 2020

Internship Programme

The Group established an Internship Programme providing opportunity to candidates with real life experience in construction and manufacturing industries. We accept candidates from various higher educational institutions, ranging from universities to technical colleges, irrespective of their gender and background. In FYE 2020, 9 students (2019: 6 students) successfully joined our internship programme.


28

Internship Breakdown by Gender Composition and Division

Male

Female

33%

67%

Gender (%)

33%

33%

22%

11%

Manufacturing

Group Finance &Treasury

Contract &Procurement

Technical &Operations

Division (%)


EMPLOYEE WELFARE

Employee Benefits

We offer attractive benefits in addition to basic salary to enhance employee wellness and retain the best talent possible. These benefits cover medical, group personal accident, dental, fleet card and mobile subsidy.

Parental Leave

The Group promotes a work-life balance culture that caters to employees’ physical and emotional needs, as we believe that a work-life balance culture leads to greater recruitment and retention of qualified employees and ultimately, enhance employees’ morale and productivity.

To empower and support our employees’ work-life balance needs and preferences, the Group provides all male and female employees two (2) days of paternity leave and sixty (60) days of maternity leave respectively.

Lifestyle Care

We place great importance on the health of our employees and we constantly promote a healthy lifestyle. Free fitness facilities are provided at our headquarters such as the gym and various fitness programmes like monthly Zumba class. In addition, up to RM500 is also provided for dental care to our employees across the Group.

Kelab MTD

We recognise healthy work-life balance is crucial to our employees and recreation helps to build a healthy and happy workforce. We have organised recreational outdoor activities such as water rafting and pool competition, to stimulate employees’ motivation and build their confidence, while strengthening teamwork among each other. In addition, such activities help connect our people and strengthen mutual cohesion.

Kelab MTD (previously known as “Kelab Kita”) was established in 2015 as a platform for greater communication and strengthening of ties amongst employees, through sports, recreation, and welfare activities.

We conducted 24 employee engagement activities (2019: 18) during the financial year. These activities vary and are based on the responses and feedbacks from our valued employees.


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Activities Objective of Activities

Pool Competition New talent scouting.

Grand Finale Gempak Superstar Karaoke

To enable talented members a platform to demonstrate their singing skills.

Kembara LPT 2019 Expl

mtd acpi engineering berhad (258836-v) · 2020. 8. 28. · mtd acpi engineering berhad registration...

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