MITRAJAYA HOLDINGS BERHAD - Malaysiastock.biz day 2018 and appreciation day for 1.5 million manhours without loss time injury, awarded by mrcb 2017 • health, safety & environment

MITRAJAYA HOLDINGS BERHAD (Company No. 268257-T)

No. 9, Blok D, Pusat Perdagangan Puchong Prima,Persiaran Prima Utama, Taman Puchong Prima,47150 Puchong, Selangor Darul Ehsan.

Tel : (603) 8060 9999Fax : (603) 8060 9998E-mail : [email protected]

w w w . m i t r a j a y a . c o m . m y

MITRAJAYAHOLDINGS BERHAD

(Company No. 268257-T)

A N N U A L R E P O R T

2018

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02 Achievements and Awards

03 Corporate Information

04 Corporate Structure

05 Board of Directors

06 Directors’ Profile

08 5 Years Financial Highlights

10 Chairman’s Statement

13 Management’s Discussion And Analysis

24 Sustainability Report

47 Corporate Governance Statement

55 Audit Committee Report

58 Nomination And Remuneration Committee Report

60 Statement On Risk Management And Internal Control

63 Other Information

64 Reports And Financial Statements

185 Shareholding Analysis

192 List Of Properties

197 Notice Of Annual General Meeting

Form Of ProxyCO

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ACHIEVEMENTSAND AWARDS

2018

• BESTENVIRONMENT,SAFETY&HEALTHPRACTICESUBCONTRACTORONWORLDOCCUPATIONALSAFETY&HEALTHDAY2018ANDAPPRECIATIONDAYFOR1.5MILLIONMANHOURSWITHOUTLOSSTIMEINJURY,AWARDEDBYMRCB

2017

• HEALTH,SAFETY&ENVIRONMENTCERTIFICATEOFRECOGNITIONGOLDAWARD,CATEGORY:HIGHRISEBUILDINGLOT7G1-GOVERNMENTBUILDING(SPRM)FOROUTSTANDINGACHIEVEMENTOF5MILLIONMANHOURSWITHOUTLOSTTIMEINJURY(LTI)FROM01APRIL2014-11MAY2017,AWARDEDBYPUTRAJAYAHOLDINGS

• HEALTH,SAFETY&ENVIRONMENTCERTIFICATEOFRECOGNITIONGOLDAWARD,LOT7G1 (SPRM)FOREXCELLENTACHIEVEMENTOF4MILLIONMANHOURSWITHOUTLOSTTIMEINJURY(LTI)FROM01APRIL2014TO03JANUARY2017,AWARDEDBYPUTRAJAYAHOLDINGS

• HEALTH,SAFETY&ENVIRONMENTCERTIFICATEOFRECOGNITIONSILVERAWARD,CATEGORY:HIGHRISEBUILDINGPLOT 5R5 - PERUMAHAN PENJAWAT AWAM 1 MALAYSIA [PPA1M] FOR EXECELLENT ACHIEVEMENT OF 2 MILLIONMANHOURSWITHOUTLOSTTIMEINJURY(LTI)FROM09FEBRUARY2015-30APRIL2017,AWARDEDBYPUTRAJAYAHOLDINGS

2016

• HEALTH,SAFETY&ENVIRONMENTCERTIFICATEOFRECOGNITIONBRONZEAWARDAWARDEDTOPLOT5R5(PPA1M)FOREXCELLENTACHIEVEMENTOF1MILLIONMANHOURSWITHOUTLOSTTIMEINJURY(LTI)FROM09FEBRUARY2015-23NOVEMBER2016,AWARDEDBYPUTRAJAYAHOLDINGS

• HEALTH,SAFETY&ENVIRONMENTCERTIFICATEOFRECOGNITIONFORACHIEVEMENTOFHIGHESTMERITPOINTFORTHEYEAR2016,CATEGORY:HIGHRISKPROJECTSURUHANJAYAPENCEGAHANRASUAHMALAYSIA(7G1)

CLIENT APPRECIATION AWARD

2018

• HIGH QLASSIC ACHIEVEMENT AWARDS 2018 FOR IBU PEJABAT SPRM (7G1), PRECINT 7 PUTRAJAYA,AWARDEDBYCIDB

• QLASSIC EXCELLENCE AWARDS 2018 - SPECIAL APPRECIATION HIGHEST SCORE OF QLASSIC(GOVERNMENT)FORIBUPEJABATSPRM(7G1)PRECINTPUTRAJAYA,AWARDEDBYCIDB

• SPECIAL MENTION FOR MALAYSIAN ANTI-CORRUPTION COMMISSION (MACC) HEADQUARTERS,PUTRAJAYA UNDER THE BEST PROJECT AWARD (BUILDING PROJECT - MAJOR CATEGORY) IN THEMALAYSIANCONSTRUCTIONINDUSTRYEXCELENCEAWARDS2018,AWARDEDBYCIDB

• PAMAWARDS2018FOREXCELLENCEINARCHITECTURE-PAMAWARDGOLD,CATEGORYB,COMMERCIALHIGH RISE MACC HEADQUARTERS - MALAYSIAN ANTI-CORRUPTION COMMISSION, AWARDED BYPERTUBUHANAKITEKMAALYSIA

2017

• ACHIEVEMENTOFEXCELLENCEFORSURUHANJAYAPENCEGAHANRASUAHMAALYSIA,HEADQUARTERSUNDERSAFETYANDHEALTHAWARDINMALAYSIANCONSTRUCTIONINDUSTRYEXCELLENCEAWARDS2017,AWARDEDBYCIDB

GOVERNMENT APPROVED AWARD

2018

• IFAWPCAGOLDMEDALFORDESIGNCONSTRUCTION&COMPLETIONOFOFFICEBUILDING& TOWER FOR THE MALAYSIAN ANTI-CORRUPTION COMMISSION (MACC), AWARDEDBY INTERNATIONAL FEDERATION OF ASIAN AND WESTERN PACIFIC CONTRACTORS’ASSOCIATION

2017

• HRASIABESTCOMPANIESTOWORKFORINASIA2017,AWARDEDBYHRASIA

INTERNATIONAL AWARD

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02

Board of DIRECTORs

GENERAL TAN sRI IsMAIL BIN HAssAN (R)Independent Non-Executive Chairman

TAN ENG PIOWGroup Managing Director

FOO CHEK LEEExecutive Director

CHO WAI LINGExecutive Director

TAN sRI DATO’ sERI MOHAMAD NOOR BIN ABDUL RAHIMIndependent Non-Executive Director

IR ZAKARIA BIN NANYANIndependent Non-Executive Director

ROLAND KENNETH sELVANAYAGAMIndependent Non-Executive Director

sECRETARY

LeongOiWah (MAICSANo.7023802)

REGIsTERED OFFICE

No.9,BlokD,Pusat Perdagangan Puchong Prima,

PersiaranPrimaUtama,TamanPuchongPrima,47150Puchong,SelangorDarulEhsan.

Tel :(603)80609999 Fax :(603)80609998 E-mail:[email protected] Web :www.mitrajaya.com.my

AUDITORs

BakerTillyMonteiroHengPLT (LLP0019411-LCA&AF0117)

BakerTillyMHTower, Level10,Tower1,Avenue5, BangsarSouthCity, 59200KualaLumpur.

PRINCIPAL BANKERs

ABSABankLimited(SouthAfrica)AlRajhiBanking&InvestmentCorporation(Malaysia)Bhd

AmBank Islamic BerhadAmBank(M)BerhadCIMB Islamic Bank BerhadHong Leong Bank BerhadHong Leong Islamic Bank BerhadHSBC Amanah Malaysia BerhadMalayan Banking BerhadMaybank Islamic BerhadOCBC Al-Amin Bank BerhadOCBCBank(Malaysia)BerhadRHB Islamic Bank BerhadUnitedOverseasBank(Malaysia)

Berhad

sHARE REGIsTRAR

TricorInvestor&IssuingHouseServices Sdn Bhd

Unit32-01,Level32,TowerA, VerticalBusinessSuite,Avenue3,BangsarSouth, No.8,JalanKerinchi, 59200KualaLumpur WilayahPersekutuan.

Tel :(603)27839299 Fax :(603)27839222 E-mail:[email protected]

sOLICITORs

Joseph Ting & Co.

Suite12,13&14,6thFloor,IOIBusinessPark,No.1,PersiaranPuchongJaya Selatan,BandarPuchongJaya,47170Puchong,SelangorDarulEhsan.

Lio & Partners

B-9-4,SetiaWalk, PersiaranWawasan, PusatBandarPuchong, 47160Puchong, SelangorDarulEhsan.

Tee Bee Kim & Partners

No.21-4,JalanPJU1/42, DataranPrima, 47301PetalingJaya, SelangorDarulEhsan.

Van Der Merwe Du Toit

BrooklynPlace, CnrBronkhorsandDeyStreets, Brooklyn,Docex110Pretoria, RepublicofSouthAfrica.

sTOCK EXCHANGE LIsTING

Main Market of Bursa Malaysia Securities Berhad StockName :MITRA StockCode :9571

CORPORATE INFORMATION

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CORPORATE STRUCTURE

MITRAJAYA HOLDINGS BERHADCompany No. 268257-T

Construction

Others

Property Development

Mitrajaya Development Sdn Bhd100% Dutawani Sdn Bhd 100%

Mitrajaya Warisan Sdn Bhd 60%

Kemajuan Sekim Baru Sdn Bhd 100%

Kina-Bijak Sdn Bhd 100%

Leo Vista Sdn Bhd 100%

Centennial March Sdn Bhd 60%

Awana Prisma Sdn Bhd 100%

Primaharta Development Sdn Bhd 100%

Eminent Earnings Sdn Bhd 60%

Pembinaan Mitrajaya Sdn Bhd100%

Mitrajaya Homes Sdn Bhd100%

Skyway Development Sdn Bhd72%

Daya Asfalt Sdn Bhd100%

Mitrajaya SA (Pty) Ltd100%

Mitrajaya Development SA (Pty) Ltd100%

Maha-Mayang Sdn Bhd100%

Blue Valley Golf & Country Club (Pty) Ltd100%

Kyalami & Mitrajaya CivilEngineering (Pty) Ltd100%

Kyalami & MitrajayaBuilders (Pty) Ltd100%

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04

BOARD OF DIRECTORS

Sitting (from left to right):

TAN ENG PIOW

(Group Managing Director)

GENERAL TAN sRI IsMAIL BIN HAssAN (R)

(Independent Non-Executive Chairman)

FOO CHEK LEE

(Executive Director)

Standing (from left to right):

IR ZAKARIA BIN NANYAN

(Independent Non-Executive Director)

ROLAND KENNETH sELVANAYAGAM


TAN sRI DATO’ sERI MOHAMAD NOOR BIN ABDUL RAHIM


CHO WAI LING

(Executive Director)

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DIRECTORS’ PROFILE


General Tan Sri Ismail Bin Hassan (R), aged 76,was appointed as an Independent Non-ExecutiveDirectorofMitrajayaHoldingsBerhad(“MHB”)on9August2000.HewasappointedtheChairmanoftheCompany on 26November 2009. He is amemberof the Audit Committee and the Nomination and Remuneration Committee. He is also a Director ofPembinaanMitrajayaSdnBhd.

He graduated from the Universiti Sains MalaysiawithaBachelorofSocialSciencesDegree(HonsinPolitics). In theMilitaryProfessionalEducation,TanSri Ismail graduated from Command and General Staff College, Fort Leavenworth, Kansas, USA (onCommandant’s List) in 1975, from Joint ServicesStaffCollegeCanberra,Australia, in1982andheisalsoagraduateof theNationalDefenseUniversity,Washington,DC,USAin1987.Laterhewasinductedinto theNDU InternationalFellowsHallofFame, inrecognition of outstanding achievement accorded to thegraduatesoftheUniversitywhohadachievedthehighestrank/appointmentintheirrespectiveService.

Prior to joiningMHB, Tan Sri Ismail has served asaCommissionOfficer in theMalaysianArmyfor36years and he held many key appointments at Field Command, Training Command and the Ministry ofDefence levels before retiring as Chief of Army in December1997.

Currently, he also holds directorships in SimbiotikVenturesSdnBhdandAlfaVentureSdnBhd.


TanEngPiow,aged65,wasappointedasManagingDirectorofMHBon9September1994.HeisoneofthefoundingmembersofPembinaanMitrajayaSdnBhd.

HeholdsaBachelorofCivilEngineering (Honours)degreefromUniversityofMalaya,whichwasobtainedin 1977. He is also aMember of the Institution ofEngineersMalaysia.

HebeganhiscareerasWorksEngineerwithJabatanKerja Raya – JKR (PublicWorks Department) from1977to1979.From1980till1985,hewasaProjectManager with Perkuat Kuari Sdn Bhd (QuarryOperation).

He has over 40 years of extensive technical andmanagement experience in the construction industry and has been actively involved in the management andoperationsoftheMHBGroup.HealsooverseestheGroup’sdevelopment,growthandexpansion.

FOO CHEK LEEExecutive Director

FooChekLee,aged64,wasappointedaDirectorofMHBon1August1995.Currently,heisanExecutiveDirectorofMHB.HeisalsotheManagingDirectorofPembinaanMitrajayaSdnBhd.

HegraduatedfromUniversityTechnologyMalaysiain1978withaBachelorofCivilEngineering(Honours)degree.

Prior to joiningMHB,heservedwithJabatanKerjaRaya (PublicWorksDepartment) foraperiodof14years.HelastservedasAssistantDirectorofRoads,JKRKelantanDarulNaim from1989 to1991, afterwhich he joined PembinaanMitrajaya Sdn Bhd asGeneralManager.Hehasover39yearsofextensivetechnical and management experience which includes all aspects of civil engineering construction andprojectmanagement.

He is a board member of Construction Industry DevelopmentBoard(CIDB)andNIOSHCertificationSdnBhd.

He also serves as President of Master Builders Association Malaysia and Council Member for both InternationalFederationofAsianandWesternPacificContractors’ Associations (IFAWPCA) and AseanConstructorsFederation(ACF).

CHO WAI LINGExecutive Director

Cho Wai Ling, aged 46, was appointed as anExecutive Director of MHB on 1 September 2014.She graduated from University of Malaya in 1998with a Bachelor of Accountancy (Honours) degreeand has been a member of the Malaysian Institute of Accountantssince2001.

She started her career with MHB in 1999 as anExecutiveintheFinance&AccountsDepartmentandrose from rank and file to managerial position and in 2005waspromoted toGroupFinanceManager.SheheadstheFinance&AccountsDepartmentandhandles all corporatematters of the Group. In herpositionasExecutiveDirector,herrolewasexpandedto cover investor relations function and to assist the Group Managing Director on strategic management responsibilities.

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DIRECTOR’S PROFILE

(cont’d)

ROLAND KENNETH sELVANAYAGAMIndependent Non-Executive Director

Roland Kenneth Selvanayagam, aged 62, wasappointed an Executive Director on 23 April 1998.From 1 July 2008, he was redesignated as Non-Executive Director as he left full time employmenttostarthisownbusiness.On28March2011wherehaving met the Listing Requirements criteria forIndependent Director, the Board re-designatedhim to be an Independent Non-Executive Directorof theCompany.He isalsoamemberof theAuditCommittee.

Heisaprofessionallyqualifiedaccountantwithover35 years post qualifying commercial experience.Prior to his involvement with the MHB Group, hewas employed variously within the British American TobaccoGroup,SearsRoebuckGroupand thePTMayora Indah Group – where he was the pioneerGeneralManagerfortheirMalaysianoperations.

He was President of the Malaysian Division of the Chartered Institute of Management Accountants fromJune1996-May1998.HeisarecipientoftheInstitute’sBronzemedal–awardedinrecognitionofservices rendered to the Institute and the profession atlarge.

Atvarioustimes,hehashelddirectorships(listed&unlisted companies) in various countries includingSouth Africa, Sri Lanka, Singapore, Thailand andAustralia.

Notes:

- All Directors of MHB are Malaysian and do not have any conflictofinterestwithMHB.

- Theyhavenotbeenconvictedforoffenceswithinthepastfive(5)yearsotherthantrafficoffences,ifany.

- ThereisnofamilyrelationshipamongsttheDirectorsandmajorshareholdersofMHB.

- TheExecutiveDirectorsformtheSeniorManagementandtheirprofilearenotpresentedseparately.

TAN sRI DATO’ sERI MOHAMAD NOOR BIN ABDUL RAHIMIndependent Non-Executive Director

TanSriDato’SeriMohamadNoorBinAbdulRahim,aged 74, was appointed as Independent Non-Executive Director of MHB on 26 February 2002.He is the Chairman of the Audit Committee and the NominationandRemunerationCommittee.

He graduated with a Bachelor of Arts (Honours)fromUniversityofMalayaand joinedtheMalaysiancivil service in 1968. He has held positions in theGovernment including State Secretary of Pulau Pinang, Kelantan Federal Development Director(PrimeMinister’sDepartment),PerakStateFinancialOfficer,DirectorGeneralofKualaLumpurCityHall,UnderSecretaryforMinistryofDefenceandMinistryof Finance and Secretary General of Ministry of DomesticTradeandConsumerAffairs.Hislastpostin the civil service was as the Secretary General of theMinistryofHomeAffairsfrom1998-2000.

Currently,he isChairmanofPrinsiptekCorporationBhd and TSR Capital Berhad. He is currently thePresidentoftheAsianPetanqueConfederationandCommitteememberoftheMalaysiaGolfAssociation.

IR ZAKARIA BIN NANYANIndependent Non-Executive Director

Ir ZakariaBinNanyan, aged 76,was appointed asIndependentNon-ExecutiveDirectorofMHBon26February 2002. He is also a member of the AuditCommittee and the Nomination and Remuneration Committee.

HegraduatedwithB.Sc inMechanicalEngineeringfrom the University of Strathclyde U.K. in 1972and later obtained Masters of Science in Industrial Hygiene from theUniversity ofPittsburghUSA.Heis a Professional Engineer and a Member of TheInstitutionofEngineersMalaysia.

Prior to his appointment to the MHB Board, hewas the Director General of the Department of OccupationalSafetyandHealthMalaysia,apositionheld from 1992 to 1998. He holds directorships inPressureCareSdnBhd.

He is currently serving as Chairman of the Board of Examiners for the Site Safety Supervisors Courseconducted by The Master Builders AssociationMalaysia.

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5 YEARS FINANCIAL HIGHLIGHTS

As per respective years’ audited financial statements

Financial Year Ended 31 December

2018 2017 2016 2015 2014

Revenue RM’000 838,407 1,164,202 966,171 890,731 520,205

- Construction RM’000 698,817 994,208 845,573 767,225 370,674

- Property Development RM’000 130,810 144,899 89,641 55,186 98,718

- South Africa Investment RM’000 8,382 24,696 30,957 39,283 22,438

- Others RM’000 398 399 - - -

- Healthcare RM’000 - - - 29,037 27,317

-ManufacturingandTrading RM’000 - - - - 1,058

ProfitBeforeTaxation RM’000 60,478 101,930 160,132 124,876 72,482

ProfitAfterTaxation RM’000 42,426 72,849 121,266 86,969 53,285

Profit Attributable to Owners of the Company RM’000 44,878 80,350 118,683 86,575 53,769

Share Capital RM’000 464,573 381,213 334,862 321,085 198,766

TotalAssets RM’000 1,547,633 1,394,193 1,236,873 1,020,952 639,857

Shareholders’ Funds RM’000 787,163 687,672 618,558 500,500 394,418

TotalBorrowings RM’000 347,625 323,529 254,937 162,480 102,011

Cash and Bank Balances RM’000 14,409 25,760 58,180 39,831 23,919

Gearing Ratio % 44.16 47.05 41.21 32.46 25.86

Net Gearing Ratio % 42.33 43.30 31.81 24.51 19.80

BasicEarningsPerShare sen 5.22 11.85 18.10 13.85 13.64

Net Assets Per Share sen 95 109 92 78 99

Net Dividend Per Share sen 1.50 2.00 5.00 5.00 5.00

share Performance

Year High RM 0.98 1.46 1.47 2.08 1.17

Year Low RM 0.23 0.74 1.02 0.80 0.47

Year Close RM 0.28 0.97 1.26 1.20 0.98

TradingVolume Shares(’000)

252,937 375,061 358,233 593,906 771,360

Market Capitalisation RM’000 250,922 668,797 843,850 770,603 389,581

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REVENUE (RM’000)

PROFIT BEFORE TAXATION (RM’000)

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

TOTAL ASSETS (RM’000)

SHAREHOLDERS’ FUNDS (RM’000)

BASIC EARNINGS PER SHARE (SEN)

’18 ’17 ’16 ’15 ’14

838,

407

1,16

4,20

2

966,

171

890,

731

520,

205

’18 ’17 ’16 ’15 ’14

60,4

78

101,

930

160,

132

124,

876

72,4

82

’18 ’17 ’16 ’15 ’14

44,8

78

80,3

50

118,

683

86,5

75

53,7

69

’18 ’17 ’16 ’15 ’14

1,54

7,63

3

1,39

4,19

3

1,23

6,87

3

1,02

0,95

2

639,

857

’18 ’17 ’16 ’15 ’14

787,

163

687,

672

618,

558

500,

500

394,

418

’18 ’17 ’16 ’15 ’14

5.22

11,8

5

18.1

0

13.8

5

13.6

4

5 YEARS FINANCIAL HIGHLIGHTS

(cont’d)

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On behalf of the Board of Directors, I am pleased to present the Annual Report and Financial Statements of Mitrajaya Holdings Berhad (“MHB” or “the Company”) and its subsidiary companies (“Mitrajaya Group” or “the Group”) for the financial year ended 31 December 2018 (“FYE 2018”).


CHAIRMAN’S STATEMENT

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CONGRATULATORY MEssAGE

First and foremost, I would like to congratulate our wholly-owned subsidiary, Pembinaan Mitrajaya Sdn Bhd (“PMSB”) forhaving won the International Federation of Asian and WesternPacificContractors’Association (“IFAWPCA”)GoldMedalAwardunder theBuildingConstructioncategory for theDesign&Buildof theOfficeBuilding&Tower for theMalaysianAnti-CorruptionCommission (“MACC”) during the 44th IFAWPCA Convention2018.Theaward recognisesamongothers,keyachievements ininnovation, technical advancement in construction and humancapitaldevelopmentforthesuccessfulcompletionoftheuniquelydesignedMACCOfficeBuilding.

I would also like to extend my congratulations to our Group Executive Director and PMSB’s Managing Director, Mr. FooChekLeeforwinningthe2018CEOoftheYearattheMalaysianConstructionIndustryExcellenceAwardsceremonyorganisedbythe Construction Industry Development Board Malaysia (CIDB)torecognisetheindustryplayers’achievements.PMSBwasalsohonouredatthesameeventwithTheBestProjectAward(BuildingProject–MajorCategory)fortheMACCproject.

OVERVIEW

The Group has reported a revenue ofRM838.41 million for the financial yearended 31 December 2018 (“FYE 2018”),a reduction of RM325.80 million (28.0%)compared to our record high of RM1.16billionintheprecedingfinancialyear(“FYE2017”).Therevenuereductionwasmainlyattributed to the Construction division.Construction division’s revenue has reducedsubstantiallybyRM295.39millionin FYE 2018. Revenue contribution fromboth local & the South African PropertyDevelopment division had reduced by RM30.41million.

Consequent to the decline in Group’srevenue, the Group’s profit before tax(“PBT”)reducedby40.7%fromRM101.93million that was achieved during the previousfinancial year toRM60.48millionin FYE 2018. The Construction divisioncontributed PBT of RM12.02 million,representing 19.9% of Group’s PBT inFYE 2018 as compared to its previousyear’scontributionof41.8%.InFYE2018,

CHAIRMAN’S STATEMENT

(cont’d)

PPA1M project at Precinct 5, Putrajaya

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theProperty divisionmaintained its PBT contributionof RM47.38 million, a marginal reduction of RM1.04million compared to PBT of RM48.42 million in FYE2017.Hence,thePropertydivisionhasovertakentheConstruction division in FYE 2018 and contributed78.3%ofGroup’sPBT.

Our property projects in South Africa also made alowercontributiontotheGroup’searningsinFYE2018.ThisdivisioncontributedRM8.38million,representing1.0% (FYE 2017:2.1%) of Group’s revenue and PBTofRM0.13million,0.2%(FYE2017:8.7%)ofGroup’sPBTinFYE2018.

Further details of the Group’s financial performance are contained in the Management’s Discussion and AnalysissectionwithinthisAnnualReport.

DIVIDEND

TheBoard is pleased to recommend a first and finalsingletierdividendof1.5senperordinarysharefortheFYE2018 tobeapprovedby theshareholdersat theforthcomingAnnualGeneralMeeting.

TheestimateddividendpaymentamountstoRM13.35millionascomparedtoRM17.91milliondistributedinthepreviousyear.

CORPORATE DEVELOPMENT

On25April2018,theCompanysuccessfullycompletedtheRightsIssuefollowingthelistingofandquotationof137,778,282RightsShares,68,889,075BonusShares,68,889,075 Warrants E and 11,516,438 AdditionalWarrantsDontheMainMarketofBursaSecurities.TheRights Issue proceeds of RM81.29 million has beenfully utilised for repayment of bank borrowings for the Constructiondivision.

The total number of issued shares of the Companyhas been enlarged from 689,481,413 to 896,148,770ordinaryshares.

MARKET OUTLOOK AND PROsPECTs

The growth of the construction sector is expectedto slow down owing to the soon-to-be completed mega projects, deferment of new mega projects bythe Government coupled with the property overhang situationinthenon-residentialsegment. In2019,theconstruction sector is expected to improve marginally following an increase in new planned supply in the affordablehomesandindustrialsegments.Theforecastgrowthoftheconstructionsectorin2019is4.9%.

Mitrajaya Group reckons that 2019 will be anotherchallenging year in view of its increasingly tough operating environment for construction and infrastructure players due to margin compression exacerbated by intense competition and potential cost escalation.

The Malaysian property market outlook in 2019 willcontinue to be soft in view of the mismatch between the demand and supply of residential units as well as office space in the country. As such, the Boardand Management will be cautious when planning future upcoming property projects. We will focuson undertaking affordable and mid-range housing developmentstomeetcurrentmarketdemand.

Barringunforeseencircumstances,theBoardenvisagethat the Group will consolidate but continue growing strength from strength in this highly competitive industrylandscape.

ACKNOWLEDGEMENT

On behalf of the Board, I would like to express ourappreciation to the management team and employees for their dedication and contribution to the Group.Also our appreciation to our shareholders, businessassociates, clients, bankers and various governmentagencies for their continued support to the Group.My appreciation is also extended to my fellow Board membersfortheirguidanceandcounsel.

GENERAL TAN sRI IsMAIL BIN HAssAN (R)IndependentNon-ExecutiveChairman

CHAIRMAN’S STATEMENT (cont’d)

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OVERVIEW

The followingcommentaryandanalysisof theconsolidated resultsof theoperationsandfinancial informationofMitrajayaHoldingsBerhad(“Mitrajaya”or“theCompany”)shouldbereadinconjunctionwiththeCompany’sfinancialyearended31December2018(“FYE2018”)consolidatedfinancialstatementsandnotes.

MitrajayaGroup’srevenuedecreasedbyRM325.80million(28.0%)toRM838.41millionforFYE2018comparedtoRM1.16billioninthepreviousfinancialyear.ThedecreasewasmainlyduetolowerrevenuerecognitionintheConstructiondivisionbyRM295.39million.Correspondingly, theGroup’sprofitbefore tax (“PBT”)declinedbyRM41.45million(40.7%)fromRM101.93milliontoRM60.48millioninFYE2018.TheConstructiondivisionalsocontributedasignificantlylowerPBTofRM12.02millioncomparedtoRM42.56millionachievedinfinancialyearended31December2017(“FYE2017”).TheGroup’sprofitaftertax(“PAT”)wasreportedatRM42.43million,areductionofRM30.42million(41.8%)fromRM72.85millioninFYE2017.

FortheFYE2018,theGroup’srevenueincludedanadditionalcompensationsumofRM10.97million(FYE2017:RM15.95million)receivedfromthecompulsorylandacquisitionofourprojectlandlocatedatMukimPengerang,Johor.Thiscompulsory landacquisitioncontributedaPBTofRM10.66milliontotheGroup inFYE2018(FYE2017:RM13.96million).Ifthisone-offitemwasexcluded,theGroup’sPBTwouldhavebeenatRM49.82million,RM38.15million(43.3%)lowercomparedtothepreviousyear’sPBTofRM87.97million.

InFYE2018,theGroup’scapitalexpenditure(“CAPEX”)reducedtoRM17.50millionfromRM25.36millionduringFYE 2017 asmost of theCAPEX requirements had been fulfilled in the previous year. Presently, our CAPEXrequirementwillbeincurredonaneed-tobasisfornewlysecuredconstructionprojects.Basedonthe2-yearhirepurchasetenure,theoutstandinghirepurchasefinancinghasfurtherreducedfromRM33.01milliontoRM12.43millionasat31December2018.

Asattheendof2018,theGroup’sborrowingsstoodatRM347.63million,aslightincreaseofRM24.10million(7.45%)fromRM323.53millionasat31December2017.Thenetgearingratioreducedmarginallyfrom0.43timesto0.41timesasat31December2018.Theincreaseinborrowingwasmainlyduetohigheramountsofshorttermborrowingsdrawndowntofinanceon-goingprojects

Thecurrentratioasat31December2018hasincreasedfrom1.61timesto1.75times.NetassetpersharehasreducedfromRM1.09toRM0.95asat31December2018.ThedecreasewasmainlyduetotheenlargedsharecapitalafterthecompletionoftheRightsIssueinApril2018.


MANAGEMENT’S DISCUSSION AND ANALYSIS

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FORWARD-LOOKING INFORMATION The information in this Management’s Discussion and Analysis (“MD&A”) includes certain forward-lookingstatements.Althoughtheseforward-lookingstatementsarebasedoncurrentlyavailablecompetitive,financialandeconomicdataandoperatingplans,theyaresubjecttorisksanduncertainties.InadditiontogeneraleconomiceventsoutsideMitrajaya’scontrol,therearefactorswhichcouldcauseactualresults,performanceorachievementsto vary from those expressed or inferred herein including risks associated with an investment in the shares of MitrajayaandtherisksrelatedtoMitrajaya’sbusiness.Riskfactorsarediscussedingreaterdetailinthesectionon “RiskFactors”laterinthisMD&A.ForwardlookingstatementsincludeinformationconcerningpossibleorassumedfutureresultsofMitrajaya’soperationsandfinancialposition,aswellasstatementsprecededby,followedby,orthatincludethewords“believes”,“expects”,“anticipates”,“estimates”,“projects”,“intends”,“should”orsimilarexpressions.Other important factors, in addition to thosediscussed in thisdocument, couldaffect the futureresultsofMitrajayaandcouldcauseitsresultstodiffermateriallyfromthoseexpressedinanyforward-lookingstatements.Mitrajayaassumesnoobligationtopubliclyupdateorreviseanyforward-lookingstatementswhetherasaresultofnewinformation,futureeventsorotherwise.

OPERATIONs REVIEW

Construction Division

The Group’s core business, Constructiondivision contributed a lower revenue of RM698.82million inFYE2018,RM295.39million (29.7%) lower from RM994.21reported in the previous financial year.The lower revenue was mainly due tothe reduction in the number of on-going projects during FYE 2018. Consequently,gross profit reduced substantially by RM 25.90million(32.2%)fromRM80.50millionin previous financial year to RM54.60millioninFYE2018.Grossmarginreducedslightly from 8.1% to 7.8% in FYE 2018.Nevertheless,withtheincreaseinoperatingexpenses and finance cost of RM4.64millionfromRM37.94milliontoRM42.58millioninFYE2018,thisdivisioncontributedasignificantlylowerPBTofRM12.02millioninFYE2018,atotalreductionofRM30.54million(71.8%)ascomparedtoRM42.56millionrecognisedinFYE2017.

ThisdivisioncompletedandhandedoveramixeddevelopmentcomplexbuildingatSection13PetalingJayatoPJMidtownDevelopmentSdnBhdduringFYE2018.

PembinaanMitrajayaSdnBhd(“PMSB”)securedthefollowing2projectsforRM203millionduringFYE2018:

a) constructionof404unitsofpublicapartments forPerumahanPenjawatAwam1 Malaysia (“PPA1M”)atPrecinct17,PutrajayaforPutrajayaHomesSdnBhd;and

b) constructionofa7-storeyprivatehospitalwith1 levelbasementanda6-storeypodiumcarpark for IMUEducationSdnBhd.

TheConstructiondivisionwillcontinuetocontributesignificantrevenuetotheGrouponthebackofitsoutstandingorderbookofRM1.06billion as at 31March2019.Given theuncertainty surrounding the local economy,weanticipate that the business environment in which the Group operates will be challenging for the current financial year.Nevertheless,theGroupwillcontinuetointensifyeffortstoreplenishitsorderbookbysecuringnewprojects.

MANAGEMENT’S DISCUSSION AND ANALYSIS (cont’d)

Overview of Package 14 of RAPID, Pengerang

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OPERATIONs REVIEW (CONTINUED)

Local Property Development Division

ThePropertyDevelopmentdivisionalsocontributedalowerrevenueofRM130.81millionforFYE2018.ItrepresentsadecreaseofRM14.09million(9.7%)comparedtoRM144.90millioninFYE2017.Nevertheless,PBTonlydippedbyRM1.04million(2.1%)toRM47.38millionfromRM48.42millioninFYE2017.Revenuerecognition from the Wangsa 9 Residency project and sales of completed units at the Kiara 9 Residency project had contributedpositively to the current financial year. Besides this, the division also recognised an additional compensationsumofRM10.97million(FYE2017:RM15.95million)forthecompulsoryacquisitionofourproject landheldinPengerang,Johor.Thisone-offtransactioncontributedaPBTofRM10.66millioninFYE2018(FYE2017:RM13.96million).

Adjusted financial results excluding the one-off transaction

Ifthisone-offtransactionwasexcludedfrombothfinancialyears,thisdivisionwouldhavereportedrevenueofRM119.84millionforFYE2018,RM9.11million(7.1%)lowerthanthepreviousyear’srevenueofRM128.95million.However,asa resultof improvedprofitmargin fromtheon-goingdevelopmentprojects inFYE2018, thePBTincreasedslightlybyRM2.27million(6.6%)fromRM34.45milliontoRM36.72millioninFYE2018.

Wangsa 9 Residency

TheWangsa 9 Residency project comprises 3 tower blocks of 565 units of high-rise condominiumswith anestimatedGrossDevelopmentValue (“GDV”) ofRM744.61million. Thedevelopment is situated at a strategiclocationinKualaLumpur,rightoppositetheWangsaWalkMallandwithincloseproximitytotheSriRampaiLRTStation.TheprojecthasbeensuccessfullycompletedandtheCertificateofCompletionandComplianceforphase1wasobtainedon20March2019.Phase1consistsof2blocks,BlockB&C(338units)withatakeuprateof75.1%.Phase2consistingofBlockA(227units)waslaunchedinearly2018.However,thetakeuprateislowat9.3%duetothecurrentsoftlocalpropertymarketcondition.Thecurrentunbilledsalesasof10April2019standsatRM91.70million.WearehopefulthatwiththecompletionofPhase1aswellastheoutdoorfacilitiessuchastheminiwaterthemeparkandthechildren’splaygroundsituatedatthepodiumlevel,ourprojectwillbemoreattractivetothepotentialpurchasers.

Affordable Homes “Rumah Selangorku” – Pangsapuri Akasia

InlinewiththeSelangorStateGovernment’scommitmenttobuildmoreaffordablehomesinSelangor,MitrajayaGrouphaslaunchedanaffordablehomedevelopmentunderthe“RumahSelangorKu”programmeatPuchongPrima.Thisdevelopment,comprises408unitsofapartmentswiththesellingpricefixedbytheLembagaPerumahandanHartanahSelangor(LPHS)atRM180,000forabasicunitwithabuiltupareaof900sqft.Alltheunitshavebeentakenupandthecurrentunbilledsalesasof10April2019ofRM41.59millionisexpectedtoberecognisedin2019astheexpectedcompletiondateforthisprojectwillbeend2019.

Kiara 9 Residency (Completed in July 2011)

During thefinancialyear2018, thiscompletedprojectconsistingofhigh-endcondominiumsandgardenvillashadsold9unitsandcontributedarevenueofRM22.77million(FYE2017:RM13.13million–7units).Theunsoldunitshavereducedto14unitsto-date.Thecurrentsoftlocalpropertymarkethasseriouslyaffectedthesalesofthebalanceofthecompletedunits.Nevertheless,wehaveintroducedvariouspromotionpackageswithhigherrebatestoboostsalesandmanagedtoconcludesomeunitssaleinlastquarterof2018.


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280 Park Homes (Completed in April 2016)

Thisprojectconsistsof11blocksof280unitsof6-storeyduplexapartmentswith lifts,within a gatedandguardedcomplexwithclubhousefacilities.Duringtheyear,thisprojectsoldanother10unitsandrecognisedrevenueofRM8.74millioninFYE2018.Thetotalsalesasof10April2019was130unitsequivalenttoa46.4%takeuprate.Thelowtake-uprateismainlyduetotheremainingunitsbeingof largersizes, ranging from2,529sq ft to4,370sqftperunit.ThishasresultedinahighabsolutesellingpriceofatleastRM800,000perunit.Aggressivemarketingstrategiessuchas attractive promotion packages and higher rebates are in place toboostsales.

Compulsory Land Acquisition – Pengerang, Johor

InrelationtotheRapidProjectandthemassivedevelopmentcomingupinPengerang,Johor,theJohoreStateGovernmentimposedacompulsorylandacquisitiononadditional2lotsofourlandmeasuring1,327.06sqmforRM1.77millioninFYE2017.Thishasmadethetotalnumberoflotsacquiredtobe124lots(outofatotal198lots).ThecompensationsumofferedwasRM33.22millionandfullpaymentwasreceivedinFYE2017.Besidesthis,theHighCourthasawardedadditionalcompensationfor123lotsamountingtoRM13.29million.Paymentfortheadditionalcompensationwasreceivedduringthefirstquarterof2019.ThecurrentoutstandingpaymentisthelateinterestpaymentamountingtoapproximatelyRM1.07million.

Proposed Mixed Development Project – Puchong Prima

Weare reviewing thisproposedmixeddevelopment located inTamanPuchongPrima,Selangor to alignwiththecurrenteconomicsentiments formoreaffordablepricedhousing. Weare increasing theplot ratio from5to7 (maximumallowableforaTAD–TransitAdjacentDevelopment).ThisTransitAdjacentDevelopment (TAD)willbedirectlyconnected toanexistingLRTstationviaa fullycoveredpedestrian linkbridge. Theproposeddevelopmentcomprisesofaretailmall,offices,serviceapartments(unitsizeofaround1,000sqft)andaffordableserviceapartments(550sqft)ona14.5acrefreehold,commercialland.TheestimatedGDVforthisprojectisinexcessofRM1billion.ThedivisionputonholdtheDevelopmentOrdersubmissionsduring2018.Nevertheless,the Management is reviewing to kick start the finalisation of layout for Development Order approval submission in 2019.

Proposed Mixed Development Project – Kota Warisan, Sepang

Inearly2017,theGroupenteredintoajointventurewithGemaPaduSdnBhdfortheacquisitionoflandcomprising335.53acresforRM185.42millionstrategicallylocatedintheprimelocationofKualaLumpur’ssoutherncorridordevelopment.Mitrajaya’scommitmentisfor60%ofthetotallandvalueforanamountofRM111.25million.

Inearly2019,theGroupcommencedthemixeddevelopmentplanningon22.2acrescomprisingof2adjacentlandparcelslocatedatKotaWarisan.Theproposedmixeddevelopmentconsistsofserviceapartments(unitsizeof845to1,000sqft)andaffordableserviceapartments(unitsizeof550sqft).TheestimatedGDVforthisprojectisapproximatelyRM1.0billion.

Proposed Residential Development – Kampung Seri Aman, Puchong

A project under the early stages of planning is a residential development in Kampung Seri Aman, Puchong,Selangor.Thisdevelopmentisahighriseresidentialtowersittingona2acreland,withunitsizesfrom900-1,000sqft.Thesellingpricewillbekept intherangeofRM300,000toRM400,000perunit tocater for thegrowingdemandofmoremid-rangehousing,makingitanidealchoiceforfirsttimehomebuyersandsmallfamilies.ThedevelopmentislocatedclosetoTamanPuchongPrimaandTamanPuchongTekali,bothmaturetownshipsinthePuchongarea.


280 Park Homes

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Property Development in south Africa

OuroverseaspropertyprojectinSouthAfrica,BlueValleyGolf&CountryEstate(“BVGCE”),contributedlowerrevenueandprofitsfortheFYE2018.ThisDivisionreportedarevenueofRM8.38million, a substantial reduction of RM16.32million(66.0%) as compared to RM24.70 million reported in thepreviousfinancialyear.Correspondingly,PBTalsodecreasedby RM8.75million (99.0%) fromRM8.88million to RM0.13million for FYE 2018. This Division has been reducing itscontributiontotheGroup’searningsinceFYE2016aslimitedvacantbungalowlotswereavailableforsalesince2016.Allthevacantbungalowlotshavebeenfullysold inFYE2017.The revenue recognised in 2018 were mainly derived fromrentalincomeofBlueValleyShoppingMall,7unitsofvacantbungalowlotssoldin2017and3unitsofbungalowhousescompletedinNovember2018.

WeexpectthisDivisionwillcontinuetohavealowercontributiontotheGroup’searningsfor2019asthemainsourceofincomewillonlybefromthesalesofthe16unitsofbungalowhousescompleted in November 2018. Nevertheless, this Divisionhascommencedconstructionof3-storeywalkuphigh-endapartments in August 2018 which is expected to complete in early2020.EstimatedGDVisapproximatelyRM15millionforatotalof42unitsofapartment.

Additionally,thisDivisionhasobtainedtheconsolidationandrezoning approval to increase the density on the remaining lots inBVGCEwhereby theallowablenumberofapartmentunitswillincreasefrom93to260units.Themanagementalsohas the intention to convert the status of the land use from originally office development to an apartment development and further increase the planned number of apartment unitsbyanother300units.ThisproposeddevelopmentwillcontributepositivelytothefutureearningoftheGroup.

Forthe215acresoflandacquiredin2015,wearecurrentlyworkingontheinitialplanningstageofadevelopmentofanEcoParkResidentialEstate,withatleast3,000unitsofmediumtohighdensitycluster/apartmenthomes.ThiswillfurtherstrengthenourpositionandensuringcontinuityofouroperationsinSouthAfrica.

RIsK FACTORs

(a) Risk relating to Construction division

(i) Competition from other construction players

TheMalaysianconstructionindustryishighlycompetitive,andourGroupfacesintensecompetitionfromvariousconstructioncompaniesduetothelowernumberofavailableprojectsfollowingthecancellationand deferment of some mega infrastructure projects by the Government. Competitive position willbedependentonvariousfactorssuchaspricing,financialpositionandstrength,theabilitytoobtainadequatefinancing,reputationforsafety,qualityandtrackrecordfortimelycompletionofproject.Due


(cont’d)

Blue Valley Shopping Mall competed in April 2018

Spring Carnival held in Blue Valley Shopping Mall

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RIsK FACTORs (CONTINUED)

tosuchcompetitivepressures,ourGroup’sfinancialperformancemaybeaffectedbyhighlycompetitivepricingintheprocessofsecuringaconstructioncontract.Thismay,inturnleadtolowerprojectprofitmarginandhence,lowerprofitabilitytoourGroup.

(ii) Delay in the completion of projects

Timely completion of construction projects is dependent onmany external factors, some of whichmaybebeyondthecontrolofourGroupsuchasobtainingvariousregulatoryapprovalsasscheduled,sourcingandsecuringqualityconstructionmaterials,weatherconditionsandsatisfactoryperformanceofoursub-contractorswhoareappointedtocompletetheconstructionordevelopmentprojects.AnyfailureordelayincompletingtheprojectswithinthetimeframeagreedwithourcustomersmayexposeourGrouptoadditionalcostandpotentialclaimswhichmayimpactourprofitability.SuchclaimsmayalsoaffectourGroup’sreputationandfinancialperformance.

(iii) Cost overrun

OurGroupcarriesoutinternalcostandbudgetingestimatesofrawmaterial,labourcosts,sub-contractingcostsandoverheadsbasedontheindicativepricingsgivenbyoursuppliersandsubcontractors,aswellasourownestimatesofcostsfortenderforconstructionprojects.

Asourconstructioncontractsusually takeup to3years tocomplete,wearesubject tounforeseencircumstancesduringthecontractperiodwhichmaycauseprojectcoststooverrunsuchasfluctuationin prices of raw materials, increase in minimum wages of foreign workers, increase in prices ofsubcontractor service, unfavourableweather conditions, unexpected construction constraints at theworksiteor,additionalcostswhicharenotpreviouslyfactoredintothecosting.

(iv) Defect liability

Our construction contracts commonly stipulate a defects liability period for work done of up to 24monthsfromthedateofofficialhand-overofthecompletedprojects,dependingonthenatureofthecontract.Thismakesthecontractorliablefortheworkcarriedoutandforanyrepairs,reconstructionorrectificationofanyfaultsordefectswhichmaysurfaceorbeidentifiedduringthedefectsliabilityperiod.Nevertheless,byworkingcloselywithourcustomerstoensuretheworkspecificationsaremet,coupledwiththeexperienceandexpertiseofourGroup,weaimtoreduceasmuchaspossiblethedefectsofourworks.

(b) Risk related to Property Development division

(i) Performance of the property market

Our property development business is largely dependent on the performance of the property market in Malaysia.Anymaterialdevelopmentsaffectingthepropertymarketssuchaschangesindemographictrends,employmentandincomelevel,economicuncertainties,thevagariesinpropertydemandandthepropertyrentalmarketmayhaveanimpactonourbusinessoperationsandfinancialperformance.

Furthermore,theperformanceofthepropertymarketisalsoaffectedbytheregulatoryenvironment.TheGovernment has introduced several cooling measures to curb speculation in the property market in its efforttopromoteamorestableandsustainablepropertymarketsuchas:-

(1) Real PropertyGains Tax (“RPGT”)was reinstated in 2010. The effectivemaximumRPGT rateswereraised5%in2010to30%in2014.Further,effectiveJanuary1st,2019,theRPGThasbeenincreasedby5%fordisposalofapropertyfromthesixthyearonwards;

(2) ProhibitionofacquisitionbyforeignersofpropertiesvaluedlessthanRM500,000perunit,whichthresholdwasrevisedupwardstoRM1,000,000undertheGuidelineontheAcquisitionofPropertiesissuedbytheEconomicPlanningUnitofthePrimeMinister’sDepartment(whichwaseffective1March2014);


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(3) In 2010,BNMannounced amaximum loan-to-value ratio of 70% for third homepurchasesbyconsumers;and

(4) Bankscannolongerprovidefinancingforprojectswithdeveloperinterestbearingscheme,whereininterest payments on the loan obtained by the buyers are borne by the property developers until the propertyhasbeencompletelyconstructed.

Any further introduction of cooling measures by the Government as well as tightening of lending criteria bythebanksmayleadtoanimbalanceofsupplyof,anddemandforpropertiesinMalaysiawhichcancausepropertyoverhang.Assuch,theabovemeasuresmayaffectthedemandforourpropertieswhichinturnmaynegativelyimpactourpropertydevelopmentbusiness.

ii) scarcity of commercially viable land banks for development

Werelytoalargeextentonourexistinglandbanks,aswellasonourabilitytoidentifyandacquiresuitablelandbankswithdevelopmentpotentialtodeliversustainablegrowthandprofitability.However,wealsofacecompetitionfromotherpropertydevelopersinidentifyingandacquiringstrategicallylocatedlandbanksatcommerciallyviableprices.Thecompetitionamongindustryplayershastoacertainextent,createdscarcityforstrategicallylocatedland.Thismayresultinhigherlandacquisitioncost,whichmaypotentiallyaffectourprofitabilityandprospects.

Therecanbenoassurancethatwewillbeabletocontinuetoidentifynewlandbanksoncommerciallyviablepricesandonsuitable terms. In the faceofcompetition, itwouldalsobemorechallengingtosecureopportunities to jointlydevelop landswith landownersoncommercially viableprofit sharingtermsandwithgooddevelopmentpotentialtospurourgrowth.

(iii) Competition risk OurGroupexperiencescompetitionfromotherpropertydevelopersinMalaysia.Competitivepressures

mayariseinareaslikesupplyofrawmaterialsandlabour,pricingofthepropertyaswellasthesaleandmarketingoftheproperty.FuturesuccesswilldependsignificantlyontheabilityofourGrouptorespondtotheeverchangingeconomicconditionsandmarketdemands,thelaunchofthepropertydevelopmentprojectsofourGroupandmarketingstrategiesthatwillbeabletofulfiltheneedsandrequirementsofthetargetmarketsofourGroup.Weexpecttoremaincompetitivedespitetheincreasedcompetitionduetoourestablishedbrandname,trackrecordandpromotionalcampaigns.OurGroupwillcontinuetotakemeasures to mitigate competition risks such as conducting market intelligence surveys to understand home buyers’ needs, monitoring and adjusting development products and implementing innovativemarketingstrategiesinresponsetochangingeconomicconditionsandmarketdemands.

Whileweseektoremaincompetitiveintermsofpricing,design,qualityandstrategicmarketing,thereis no assurance that such measures can effectively mitigate the potential adverse effects of competition onourfuturefinancialperformanceandposition.

(iv) Project completion risk

Timely completion andhand-overof ourprojects is critical in ensuringcosts are containedandourGroup’s reputation is safeguarded. However, delays in completion could result from unforeseencircumstancessuchasshortageofconstructionmaterials,adverseweatherconditions,major labourdisputes,unfavourablecreditterms,delaysinobtainingthenecessaryapprovalsfromlocalauthorities,majorchangesinlocalauthorities’approvalpoliciesand/orotherunforeseencircumstances.

Ifanyoftheabovementionedcircumstancesoccurforaprolongedperiod,ourGroupmayincursubstantialadditionalcostssuchasliquidatedandascertaineddamagespayabletopurchasers,rectificationcoststorepairdefectsorhighermaterial/labourcostsandthesemayresultinourfinancialperformancebeingmateriallyimpacted.


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(v) Compulsory land acquisition by the Government

ThereisaninherentriskthatourGroup’slandheldfordevelopmentmaybecompulsorilyacquiredbytheGovernmentforpublicuseorduetopublicinterest.

IfalloranyportionofourdevelopmentorprojectlandsarecompulsorilyacquiredbytheGovernmentatanypointintime,theamountofcompensationpaidtoourGroupmaybelessthanthemarketvalueofthelandsand/orthepurchaseconsiderationthatwehavepaidinacquiringsuchlands.Accordingly,ourGroup’sbusiness,financialcondition,resultsofoperationsandprospectscouldbeadverselyaffected.

(c) Risks relating to the Group as a whole

(i) Political, economic, market and regulatory risk

OurpropertydevelopmentbusinessinMalaysiaandSouthAfricaissubjecttothejurisdictionofvariousgovernmentalagenciesand/orministries inMalaysiaandSouthAfrica.Anyadversedevelopments inpolitical, economic, regulatory and social conditions inMalaysia andSouthAfricawhere ourGroupoperatescouldmateriallyaffectthefinancialandbusinessprospectsofourGroup.Suchuncertaintiesthat could unfavourably affect our Group include changes in political leadership, war, economicdownturn,changesinmonetaryandfiscalpolicy,changesinforeigncurrencyregulationsorintroductionofnewrulesorregulations,financialcrisis,expropriation,nationalisation,re-negotiationornullificationofexistingcontracts,changesininterestrates,exchangeratesandmethodsoftaxation.

Whilewestrivetocontinuetotakeprecautionarymeasuressuchas implementingprudentbusiness,financialandriskmanagementpolicies,muchof theabovechangesarebeyondourGroup’scontroland there can be no assurance that any adverse developments will not materially affect the operational conditionsandperformanceofourGroup.

MARKET OUTLOOK AND PROsPECTs


Theglobaleconomyisexpectedtoexpand3.7%in2019,lowerthantheearlierforecastof3.9%(IMF,2018).Thedownward revision reflects elevating policy uncertainties with several risks stemming to growth from escalating tradetensionandoutflowsofcapital fromemergingeconomies.At thesametime,globalgrowthhasbecomelesssynchronisedwithmixeddevelopmentsinadvancedeconomicswhileprojectionforemergingeconomies,inparticular,developingAsiaremainsfavourable.

The outlook for theMalaysian economy remains resilient in the near term despite considerable external anddomestic headwinds. Real gross domestic product (“GDP”) is projected to expand 4.9% in 2019, supportedmainly by domestic demand. Private sector expenditure, in particular, household spendingwill remain as theanchorofgrowthfollowingacontinuousincreaseinemploymentandwageamidbenigninflation.

(Source: chapter 1, Economic Management and Prospect, 2019 Economic Report, Ministry of Finance Malaysia)

Thecountry’sconstructionindustryisexpectedtorecordslowergrowthin2019amidrevisionofmegaprojects.Nevertheless,theGrouphastakenstepstoreviewandimprovetheworkprocessesandefficiencyoftheoperationswithin the Construction division in order to remain competitive in these challenging times of the overall slowdown intheconstructionindustry.


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MARKET OUTLOOK AND PROsPECTs (CONT’D)

TheConstructiondivisionwillcontinuetoplaceemphasisonHealth&SafetyandQualityinallofourprojects.Ourgoalistobethepreferredcontractorandourportfolioofrepeatclientsareastrongtestamenttothis.

Local Property Development Division

UnderBudget2019,theFederalGovernmenthaspledgedtospendRM1.5billiononsuchhomesviathe1MalaysiaPeople’sHousing(PR1MA)schemeandSyarikatPerumahanNegaraBhd(SPNB).Inearly2019,theHousingandLocal Government Ministry announced intention to build one million units of affordable homes within the next 10 years toenablemorepeople,especially the low incomeearners, tobehouseowners.Assuch, theaffordablehomesegmentwillcontinuetobeinstrongdemandforthisyear.

Inthisregard,thePropertydivisionisnowmorecautiousonnewpropertyprojectplanningandlaunching.Ourupcomingpropertyprojectswillfocusmoreonproposeddevelopmentforaffordableandmid-rangehousinginbothPuchongPrimaandSepangarea.

Property Development in south Africa

In its recent2019Budget, theSouthAfricanGovernmentaddressed the immediate risks to theeconomyandthepublicfinances,andoutlinedmeasurestobuildthecapacityofthestateandreneweconomicgrowth.SouthAfrica continues to confront a challenging economic environment in which global growth is slowing and trade tensions are mounting. The medium-term economic outlook has been revised down and tax revenues havesignificantlyunderperformed.TheSouthAfricanGovernmentremainscommittedtomanagingthebudgetdeficitandcontainingpublicdebtatsustainablelevels.Changestothemedium-termexpenditureframeworkresult inthemainbudgetdeficitwideningto4.7percentofGDPin2019/20andthennarrowingto4.3percentofGDPby2021/22.Economicgrowthisprojectedtoimprovemoderatelyfrom1.5percentin2019to2.1percentin2021.Inthelongerterm,thecountryrequireshigherandmoreinclusivegrowthtoaddressunemploymentandpoverty.Government has begun implementing growth-enhancing reforms in line with the economic stimulus and recovery plan.Additional steps to strengthenpolicy certainty, improve the effectivenessof infrastructure spending andrebuildpublicinstitutionswillencourageprivate-sectorinvestmentandbolsterconfidence.

(Source : Budget Review 2019, National Treasury, Republic of South Africa)

SouthAfricaisembarkingonarecoverypathinwhichwillpromoteconfidenceandinvestment.Thiswillcreatespin-offsfortheeconomyandimprovethehousingmarket.Areductionintransferdutyacrossallsectorsofthemarket,notjustthelowerend,wouldservetostimulatepropertytransactionsacrosstheboard,withthepotentialtoincreasevolumes. Ourresidentialgolfestate-BlueValleyGolfandCountryEstate(“BVGCE”)ishighlyrankedinSouthAfrica.WeareconfidentthatourinvestmentinSouthAfricatodevelopmoreresidentialapartmentunitswithinBVGCEwillcontinuetomakeapositivecontributiontotheGroup.

ACKNOWLEDGEMENT

On behalf of the management team, I would like to express my gratitude and sincere appreciation to ourshareholders, various government departments, regulatory authorities, customers, bankers, consultants andbusinessassociatesfortheircontinuedtrustandsupporttotheGroup.IwouldliketothankourBoardmembersandemployeesfortheirstrongcommitmentanddedicationtowardsthecontinuedsuccessoftheGroup.



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Block CBlock B

Phase 1 completed and handed over in March 2019

Block A

Mini water theme park

Sky garden

Children playground

Courtyard Sales event

GROUP MANAGING DIRECTOR’s MEssAGE

DearShareholders,

ThisisoursecondannualSustainabilityReportandfollowingourinauguralReportlastyear,Iampleasedtoinformthatweareontrackinachievingourshort-termgoals,whicharetomeetallregulatoryandstandardscomplianceaswellasmeetingourshareholder’sexpectations.Wecontinuetostrivetoimproveourintegratedmanagementsystemsthatdriveourquality,environmental,healthandsafety,strategiesandactionplans.

Among the significant events of the year were the successful completion and handover of the Raffles American School in Johor and themain infrastructureworks for thePahangTechnologyPark inGambang,Pahang.Astestimonytoourcommitmenttoquality,environmental,healthandsafety,ourwholly-ownedsubsidiary,PembinaanMitrajayaSdnBhd(“PMSB”)achievednumerousawardsandrecognitionfromourclientsin2018,namelyforouron-goingprojects17RM2and5R5,bothPPA1MprojectsinPutrajayaandthePJSentralproject.Wehavereceivedtwo(2)5-starratingsintheSafetyandHealthAssessmentSysteminConstruction(“SHASSIC”)conductedbyConstructionIndustryDevelopmentBoard(“CIDB”)Malaysiaforthe17RM2andPJSentralprojects,withanearperfectscoreof99%forthe17RM2project,thehighestscorethatwehaveeverachievedto-date.

Inaddition, IamproudthatPMSBwonthe InternationalFederationofAsianandWesternPacificContractor’sAssociation(“IFAWPCA”)GoldMedalAwardundertheBuildingConstructioncategoryfortheDesign&BuildoftheOfficeBuilding&TowerfortheMalaysianAnti-CorruptionCommission(“MACC”).

Fortheseandtheotherawardsandrecognitionswehavereceivedtoday,wearegratefulfortheeffortsofourdedicatedmanagementteamandstaff.

In the medium term, Mitrajaya Holdings Berhad (“Mitrajaya” and “the Company”) will aim to strengthen ourCorporateSocialResponsibility(“CSR”)initiativesinordertofulfillourroleasaresponsiblecorporatecitizen.Forthelongterm,westrivetobetheclients’contractorofchoice,thepropertydeveloperofchoiceandtheemployerofchoice.

In this regard, our business strategies take into account the sustainability policies that govern the propertydevelopmentandconstructionindustry.Forinstance,thereistheGovernmentpolicythatrequirestheestablishmentofIndustrialisedBuildingSystem(“IBS”)forconstructionwork.Thiswouldproducelessconstructionwaste,withlesslabourrequired.WealsonoteandtakeintoaccounttheGreenBuildinginitiativesonpropertydevelopmentmootedbytheauthorities.

Theproperty andconstruction industry inMalaysia facesmanyother challengesand issues suchasgrowingscarcity of prime land for development, rising costs of land andbuildingmaterials,more stringent control onproperty loansandborrowings.Thefluctuationsof internationalpoliciesand foreignexchangealsoaffect theavailabilityandcostsofimportedbuildingmaterials.

Notwithstandingthesechallenges,Mitrajayamovesforwardintooursustainablefuturewithconfidence.Havingoursustainablebusinessstrategiesinplace,withthecontinuedenergeticanddedicatedeffortsofourBoardofDirectors(“Board”),ourManagementTeamandourstaff,wecanassureourshareholdersandinvestorsthatwewillcontinuetodeliveronsustainableopportunitiesforMitrajayaanditssubsidiaries(“MitrajayaGroup”)andourstakeholders.

Group Managing Director

OUR sUsTAINABILITY PHILOsOPHY

Webelievethatabusinessorganisation,whileinpursuitofprofit,shouldfulfilitsroleasanagentofprogressanddischargeitsmoralandcorporateresponsibilityforsustainabilitytosociety,employeesandtheenvironment.

Westrivetoharmoniseourprecioushumanresourcesandtheoperatingenvironmentwherebyprofessionalism,teamwork,totalcommitmentandloyaltycouldbecultivatedandnurturedtobecomeourcorporatecultureandethics.

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SUSTAINABILITY REPORT

Weareabletocombineourresourcesandtechnologytocreatethesynergyforthegrowthandsustainabilityovertheyears.Ourtrackrecordhasprovenourabilitytoprovidesuperiorservicetomeetalltheneedsofourclientsfrominitialplanningtomanagementofthecompletedproject.

sCOPE OF REPORT

In this Sustainability Report our sustainability performance, including achievements and challenges, over theperiod1January2018to31December2018,arereported,togetherwithhighlightsofrelatedperformancesintherecentyearsthathavebroughtustowhereweareinoursustainabilityjourneyandstatus.Unlessotherwisestated,theinformationwithinthisreportreferstoMitrajayaGroupanditssubsidiaries.

ThisSustainabilityReport2018ispreparedaccordingtotherequirementsofBursaMalaysiaSecuritiesBerhad(“Bursa Malaysia”), with incorporation of some core principles of the Global Reporting Initiative (“GRI”) G4Guidelines.

CORPORATE GOVERNANCE

AtMitrajaya,wecontinuouslyendeavourforgoodgovernance.ThiswillsteerustowardsmanagingourbusinessandoperationsmoresustainablyandenableustofulfilourCSRandthecommitteesthereunder.

Our Board and respective committees thereunder constantly review our strategic objectives in line with ourcommitment towards sustainability for improving performance and better results for the Company and our shareholders. Increasingly, more sustainable practices are being implemented company wide, especially foroperationsatourprojectsites.

Wearecommittedtoresponsiblegovernance,applyingethicsandcodeofconductatalllevels.Inthismannerwestrivefortransparency,accountabilityandlong-termstabilitytoensurecomplianceatalltimestoallregulatorycorporategovernancerequirements.

Throughourgovernancestructure,Mitrajayaisdevelopingitssustainabilitystrategyacrossthetopmanagementtill everyoperational level from theeconomic, environmental andsocialperspectives. In this regard thedriverforthesustainabilitystrategydevelopmentandimplementationisourSustainabilityCommittee.MembersoftheSustainabilityCommitteeinclude:

Chairman:DirectorSecretary:IntegratedManagementSystem(IMS)RepresentativeCommitteeMembers,comprisingSeniorRepresentativesfor

• Corporate Affairs• Finance and Accounts• Human Resources and Administration• Projects• Quality,EnvironmentSafety&Health

ThereportingstructurefortheSustainabilityCommitteeisasbelow.

Board of Directors

Group ManagingDirector

SustainabilityCommittee


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OUR ACHIEVEMENTs

HIGHLIGHT 1: THE ACHIEVEMENTs IN MACC HEADQUARTERs PROJECT

ThenewMACCheadquarterslocatedinPresint7,Putrajaya,wasplannedtobethenewheadquartersforMACCtobeginoperations in2017.PMSBwasawardedthedesignandbuiltcontract for thenewheadquarters.Thebuildingwascompletelyfinishedandhandedoveron21July2017.

Thethree-towerbuildingwasspecificallydesignedtoaccommodateMACCoperationalneedsandadministrationsystem.Sittingona2.07-hectresite,thecomplexconsistsofblockA,BandCwith14,18and22levelsrespectively.

The MACC Headquarters building project has earned PMSB various recognitions and awards locally andinternationally.

INTERNATIONAL RECOGNITION

ThebuildingprojectofMACCHeadquartersearnedPMSBtheIFAWPCAGoldMedalAwardundertheBuildingConstructioncategoryduringthe44thIFAWPCAConvention2018.

CIDB AWARDs

PMSB was awarded The BestProject Award (Building Project –Major Category) in the MalaysianConstruction Industry ExcellenceAward (“MCIEA”) 2018 for theMACCHeadquarters.

SUSTAINABILITY REPORT (cont’d)

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Quality Assessment system in Construction (“QLAssIC”) ACHIEVEMENTs

PMSB also received High QLASSIC Achievement Awards2018 and a Special Appreciation for Achieving Highest Score ofQLASSIC inGovernmentBuildingCategory for theMACCHeadquartersbuildingprojectduringQLASSICDay2018.

sAFETY AND HEALTH RECOGNITIONs

PMSBreceivedTheSafetyandHealthAwardinMCIEA2017forMACCHeadquartersbuildingproject.

Inadditional,PMSBalsorecognisedbyPutrajayaHoldingsSdnBhdforthedesignandbuildprojectofMACCHeadquarterswithtwosafetyandhealthawards,whichwere–GoldAwardsforOutstandingAchievementof5millionman-hourswithoutLostTimeInjury(LTI)andAchievementofHighestMeritPointforYear2016inHighRiskProjectCategory.

Pertubuhan Arkitek Malaysia (“PAM”) AWARD GOLD 2018

At thePAMAwardsandAnnualDinner2018,ArqhitectNIA and PMSB were presentedwith PAM Award Gold in the Category 8 - Commercial High Rise for the MACC Headquartersbuilding.


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HIGHLIGHT 2: CEO OF THE YEAR 2018

PMSB’sManagingDirector–Mr.FooChekLeewaspresentedwithCEOoftheYearAwardatMCIEA2018asarecognitionofhiscontributionandroleinenhancingimage,performanceandimprovementoftheconstructionindustry.

HIGHLIGHT 3: sHAssIC ACHIEVEMENT

Toshowcommitmentindeliveringaprojectwiththebestsafetyperformance,PMSBhasconductedSHASSICassessmentoneveryproject.In2018,two(2)projectsachieveda5-starrating,whichwerethePJSentralprojectandthePPA1M,17RM2buildingproject.17RM2scored99%inaSHASSICassessment,highestscore in thehistoryofPMSB.


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RIsK MANAGEMENT

The construction and property development industrytypically consume large amounts of resources and energy. This is due to impact from upstream anddownstreamactivities,namelyfrommaterialextraction,product manufacturing and assembly, buildingstructure,systemmaintenance,renovationsandwastedisposal.

Themainimpactontheenvironmentbytheindustry’sactivities is its contribution to carbon dioxide (CO2)emissions, energy requirements, water usage, solidwaste, raw materials consumption and electricityconsumption. In addition, the industry generatespollutants that include noise, dust and gaseousemissions,solidwastesandwastewater.

Such impacts would affect the local economic,environmental and social dimensions of Mitrajaya’sproducts and services, and the local climaticconditionsandvariations.For instance,projectshavebeenaffectedbyfloods, landslides,water shortages,polluted water sources, as well as safety and health

incidences.Theresultcouldbeprojectcost increase,project delays, health and safety issues, communityissues,andintheworst-casescenario,fatalities.

In the light of such risks as mentioned above,Mitrajaya is therefore making every effort to ensurethatmitigatingmeasuresareinplaceforeveryprojectinorder tominimise itseconomic,environmentalandsocial impacts. This is applied through its integratedmanagementsystem(IMS)andoperationalprocedures.

sTAKEHOLDER ENGAGEMENT

In a stakeholder exercise with management, wewere able to identify our significant stakeholders and prioritise their issues as shown in the following matrices.Thesesignificantstakeholdersarethosewhohave most interdependence and most influence on our operationsandactivities.TheyincludeourCustomers,our Employees, our Board, Major Shareholders,Minor Shareholders, Assessors, Financiers and theGovernment agencies, as shown in the prioritisationmatrixbelow.

B - Board Of Directors

C - Customers

E - Employees

G - Government

MS - Majority Shareholders

MiS - Minority Shareholders

S - Suppliers

N - NGOs

F - Financiers

M - Media

X - Communities

Y - Industry peers

A - Assessors

Legend

Low

Dep

end

ence X, MiS

NoInfluence

LowInfluence

Stakeholder Influence on the organization

Stakeholder’s Prioritisation Matrix

SomeInfluence

HighInfluence

M, Y, N

S, F, A

G

C, E, B, MS

Hig

h D

epen

den

ce

Sta

keho

lder

Dep

end

ence

on

the

org

anis

atio

n


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sTAKEHOLDER ENGAGEMENT METHODs

Havingidentifiedourstakeholders,wehaveengagedwiththeminthefollowingwaysoutlinedbelow.

Internal stakeholders Engagement Methods

Employees *Daily operations*e-mail system

*Trainingsessions*Performance review*Festival gatherings

*Staff survey*Sportsclubactivities–ongoing

Shareholders *Annual General Meeting*Media announcements

*Annual Reports

External stakeholders Engagement Methods

Government AgenciesLocal Authorities

*Complianceandlicensing,statutoryrequirements-ongoing

Customers *Contractual engagement- ongoing*Dailyoperations,quotations,proposals-

ongoing*Festival gathering

*Client Survey

FinancialInstitutions/Financialanalysts *Regular meetings - ongoing*Annual Reviews

• Industry Peers&IndustryAssociations

*StandardsCompliance,committees-ongoing*Training

*Seminars&Conferences*Participation in industry related association

Students Scholarship RecipientsLocal Communities

*CSR initiatives

Suppliers *Contractual engagement - ongoing*Dailyoperations,quotations,proposals-

ongoing*Supplier evaluation

Media *Product launch advertisement*Ad hoc interviews

Assessors *Yearly audit*Projectcompletionaudit

• Note: Among its industry peers, Mitrajaya actively participates as a member of the building industry community. In

this respect, PMSB’s Managing Director, Mr. Foo Chek Lee, is current serving the second term as President of Master Builders Association of Malaysia 2018/2020.


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MATERIALITY

Mitrajayaholdstheviewsofourstakeholderstobeimportanttooursustainabilityimprovementefforts.Hence,wehavereviewedthematerialityissuesinconjunctionwithourstakeholders’identification.Inanalysingourmaterialityissues,wehavetakenintoaccounttheconcernsofourstakeholdersaswellasthatoftheOrganisation’svisionandmissionandstrategicobjectives,andtheseareoutlinedinthefigurebelow.WehavealsoreferredtotheGRIG4Guidelinesduringthereview.OuremphasisisthusonOccupationalSafety&Health,LegalCompliance,QualityControl, Project Risk Management, Business Performance, Customer Satisfaction, Employee Development,EnergyConservation&EfficiencyImprovement,Innovation,PollutionPrevention&ManagementofConstructionWaste.AsfaraspossibletheseissuesareaddressedwithinthisSustainabilityReport.

• Diversity & Equal Employment Opportunity

• Human Rights• Customer Privacy

Imp

ort

ance

• Occupational Safety & Health• Legal Compliance• Quality Control• Project Risk Management• Business Performance• Customer Satisfaction• Employee Development • Energy Conservation &

Efficiency Improvement• Innovation• Pollution Prevention &

Management of Construction Waste

• Green Building• Local Hiring• CSR Initiatives• Water Management

Influence

MATERIALITY MATRIX

ECONOMY

MARKET PREsENCE


Throughitsprincipalsubsidiary,PMSB,Mitrajayahascreatedasignificanttrackrecordofsuccessfulprojectsintheconstructionandcivilengineering-relatedarena.

PMSBisnotonlyanInfrastructurecontractor,butoverthepast30yearshasdevelopedintoabuildingcontractor.Itsmajorprojectshaveincludedbuildingconstruction,suchashigh-riseandlow-riseResidentialandCommercialbuildings,Industrialbuildings,aswellasInstitutionalbuildingsforEducationandHealthcare.Noteworthybuildingprojects include theMACC Headquarters in Putrajaya. PMSB has played a significant role in major nationalinfrastructureprojects,includingtheKualaLumpurInternationalAirport(KLIA),theCyberJayaFlagshipZone,thePutrajayaFederalAdministrativeCentre,theEastCoastEconomicRegion,theIskandarSouthernDevelopmentCorridor, Refinery and Petrochemical Integrated Development (RAPID) in Pengerang Johor, and many otherprojects.


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Construction Division (Continued)

Over the years, PMSB has amassed assets of modern construction machineries and technologies, and hascontinuedtobuildcapabilityincuttingedgeconstructionmethodologiesandthepioneeringfieldof3DBuildingInformationModelling.

“Webelieveindeliveringourclient’severydreamwithpassion,andthatisourpride.”

Property Development Division

Under our Property Development Division, in striving for greater heights, Mitrajaya ventured into propertydevelopmentin1999.Itsfirstandflagshipdevelopmentwasthe250-acreintegratedtownshipofPuchongPrima.ThisisagreatexampleofacomprehensivemasterplanundertakenbyMitrajaya.Thiswasacarefullyplannedtownship that strongly shows our strong commitment to developing amulti-faceted community and not justconstructingbuildings.

MitrajayahasalsoachievedQuality&ArchitecturalExcellencethroughventuringintoluxuryresidentialdevelopmentintheupmarketMont’Kiaraarea.Thusfar,Kiara9ResidencyhasbecomeabenchmarkforluxurylifestyleinKualaLumpur.Itshowcasesa41-storeyiconiccondominiumtowerand16unitsof3½storeyGardenVillas.Overtheyears,MitrajayahasbuiltasolidreputationasapropertydeveloperthroughthebrandnameMitrajayaHomesthatpridesitselfinprovidingqualityproductsandvaluetoitscustomers.

CurrentprojectsincludeWangsa9ResidencyinWangsaMaju,comprisingofthreetowerblocksof565luxurycondominiumunitsandPangsapuriSeriAkasiainPuchongPrima,Selangor,anaffordablehomesdevelopmentundertheRumahSelangorkuinitiative.

International Division

BlueValleyGolf&CountryEstatehasbeenthefirst internationalventureofMitrajaya. It is locatedcentrally toJohannesburg,thecountry’sBusinessHubandCapitalCity,PretoriaandSandtoninSouthAfrica.

This successful development has a mixed development of Tuscan Themed Homes, Office Parks and RetailDevelopment,withaWorldClass18HoleGolfCourse,designedbyGaryPlayer.ItembodiestheSouthAfricanaffluentlifestyleestateliving.

INDIRECT ECONOMIC IMPACTs

Oneofthepillarsofsustainabledevelopment iseconomy.Whileachievingoureconomicperformancetargets,Mitrajaya is committed towards the creation of sustainable indirect value and benefits through our economicactivities.

Inourconstructionanddevelopmentprojects,weuselocalrawmaterialsasmuchaspossible,includingrecycledconstructionmaterials.Thishelpstoreduceourcarbonfootprintalongourvaluechain.Atthesametime,italsobrings more cost-effective economic benefits to our operations and contributes to the nation’s economic welfare andgrowth.

Wethusstrengthenthelocaleconomyinthefollowingways:

• Ouroperationsandassociatedactivitiesprovidefornewemploymentandjobopportunitiesforpeoplewithinthecommunity.

• Moneyistransactedandcirculateswithinthelocaleconomytoincreasewealthforlocalbusinesses.

In hiring from the local talent pool this signals to our customers and stakeholders that we value our local citizenship inthelocationsofouroperations.Thus,weareinvestedinthegrowthandthewell-beingofourcitizens,aswellasthehealthofthelocaleconomy.In2018,ourtotalworkforcestoodat594staff.


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Ourrecyclingandwastereductionprogramseffectivelyimpactourcompany’scoststructureinapositivemanner.Wastereductionandreusecanalsoreducebusinesscostsfordisposal,providenewsourcesofmaterialsfortheconstruction,andcreatelocaljobs.

ThusMitrajayaisabletocontributebothdirectlyandindirectlytothecountry’seconomicgrowthtowardsVision2020andbeyond.

ENVIRONMENT

Mitrajaya iscommittedtoexercisingduecare to theenvironment. Inourcommitmentwehave incorporatedanumberof initiativessuchasmonitoringourusageofenergyandwateratourHeadquarters (HQ) inPuchongPrima,Selangor.Wemonitorforourenvironmentalimpactsintermsofairemissions,noise,andeffluentdischarge.We also set our objective to reduce wastage and complying to the Environmental Quality Act and all otherrequirements.

Energy

WemonitortheelectricityusageatourHQclosely.From2017to2018,theelectricityusage has increased. The increase wasdue to the office expansion, namely theopening of our new training centre in early 2018. However, in December 2018, wehad consolidated on some staff seating arrangement and standardised and increased the air conditioning temperature as part of our efforts to increase the energy efficiency.

Water

AtMitrajaya’sHQ,waterconsumptionmonitoringhasbeeninitiatedsince2015.Watermonitoringisimportantinconsiderationofwatersupplyandavailability,andpossiblefuturerecyclability.Thewaterconsumptionforyear2017and2018recordedwereanaverageofaround11.65m3to11.68m3/headcount.

Thisdatashowsthetrendofusageperheadcount.Wewillconsidertoreviewandlookforifthereisapossiblewaytoreducewaterconsumption.

526,069 424,354 495,762

3,416

2,3322,801

-500

1,0001,5002,0002,5003,0003,5004,000

2016 2017 2018

-

100,000

200,000

300,000

400,000

500,000

600,000

kWh/

head

coun

t

Year

Tota

l usa

ge,

kWh

Electricity Usage at Mitrajaya HQ

5.86

11.65 11.68

-

500

1,000

1,500

2,000

2,500

2016 2017 2018

-1.00

4.00

9.00

14.00

Tota

l usa

ge, m

3

Year

m3/

head

coun

t

Water Consumption at Mitrajaya HQ

902 2120 2,068

Water Monitoring at ASBR


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Air Emissions

At theprojectsites,weareconcernedabout thedustgeneratedduring thesitepreparationandconstructionperiod,asthiscanbeanuisancetoouremployeesandcontractorsatsite,aswellastothecommunitiesinthevicinityoftheprojectsite.InthisregardwearerequiredtomonitortheTotalSuspendedParticulates(“TSP”)levels,asrequiredaccordingtoprojectsitejobscope,whichvariesfromsitetosite.

In2018,monthlymonitoringresultsforTSPatthoseprojectssitesrequiredtoconductTSPmeasurementshowedlevels ranging from32 to88µg/m3 fromJanuaryuntilDecember. These resultswerewellwithin theambientairqualitystandardof260µg/m3forTSP,andwerethusincompliancewiththestandard.MeasurementswereundertakenusingHighVolumesamplers.

Noise

Noisemonitoringwasalsocarriedoutatsiteasperspecificclient’srequirementsovertheperiodsofdayandnightforselectedprojectsites.Theresultsforthoseprojectsitesthatconductednoisemonitoringrangedonaveragefrom51.6dB(A)to64.3dB(A)fordayand43.9dB(A)to55.0dB(A)fornight.Thelimitsfornoiseare65dB(A)fordayand55.0dB(A)fornight.Hencethesiteswereincompliancewiththeambientnoisestandards.

Monitoring for TSP at site Air Monitoring at WCE2

The noise monitoring station at 17RM2 project site Noise monitoring at ASBA


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Effluent

At the project sites where the project specificationsinclude effluent streams, the discharge of effluentis subject to the Effluent Regulations under theEnvironmental Quality Act of Malaysia and has tomeet thedischargestandards.Monitoring isnormallyconducted three (3) times over a project cycle, i.e.at thestartof aproject,midway through theproject,and on project completion. Effluent discharges aremonitoredforTotalSuspendedSolids(TSS),DissolvedOxygen (DO), Oil & Grease (O&G), pH, BiochemicalOxygen Demand (BOD5), Chemical Oxygen Demand(COD),E-Coli,andAmmoniacalNitrogen(NH3-N).

Dischargesofeffluentatsiteareoftenerratic,dependingontheworkcycleandworkprogressoftheproject,aswellassizeofprojecttoaccommodatelivingquartersforworkersatsite.Effluentdischargesmayalsoincreaseduringtherainydays,ortheremaybenodischargesduringhotdrydays,orwhentheworkcycledoesnotusewater.In2018samplesweretakenfordischargesfromJanuarytoDecemberatvariousprojectsites.

Attheseprojectsites,thedischargequalitywasincompliancewithStandardBEffluentDischargeStandardsoftheFourthScheduleoftheEnvironmentalQuality(IndustrialEffluents)Regulations2009,aswellastheSecondScheduleoftheEnvironmentalQuality(Sewage)Regulations2009.

Waste Management

Wastemanagementistoprotecttheenvironment,safetyandhealthforthepopulation.OneoftheobjectivessetbyMitrajayaistoreducewastageofconstructionmaterialsintheprojects.ThewastageofconstructionmaterialsisreviewedintheyearlyManagementReviewMeeting.

Werecognisethefollowingaswaste:

i) wastegeneratedfromtheprojectconsumptionandbusinessoperations;

ii) unsuitablesoilremovedfromsitetolandfills;and

iii) scheduledwasteandthewasteimpactontheenvironmental.

Weminimisewasteatallprojectsitesbyencouraginguseofsystemformworkwhichallowsreusingofmaterials,orderingofcuttosizerebarandmonitoringtheusageofthematerialsregularly.Theamountofwastegeneratedisdependentofthesizeofprojectandthestageofconstructionofprojects.

Mitrajaya’s construction waste target

Construction material % of waste

Steel bars ≤ 5%

Ready mix concrete ≤3%

Crusher-run ≤3%

Bituminous mix ≤3%


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Effluent monitoring in progress at site

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scheduled Waste Disposed in 2018

scheduled Waste Code Waste Type Amount (MT)

SW305 Lubricating Oil 0.066

SW408 Contaminatedsoil,debrisormatterresulting from cleaning-up of a spill ofchemical,mineraloilorscheduledwastes

0.044

SW409 Disposed containers, bags orequipment contaminated withchemicals,pesticides,mineraloilorscheduled wastes

0.025

SW410 Rags, plastics, papers or filterscontaminated with scheduled wastes

0.068

PEOPLE

sustainability Performance

TheGroup’sphilosophyisbasedonthebeliefthatabusinessorganisation,whileinpursuitofprofit,shouldfulfillitsroleasanagentofprogressanddischargeitsmoralresponsibilitytosocietyandemployees.Weareabletocombineourresourcesandtechnologytocreatethesynergyforthegrowthovertheyears.

With theMitrajaya’s vision is tobe thepreferredproduct and serviceprovider in all our corebusinesses, theemployeesalwayspracticecompany’scorevaluesof“Change,Commitment,Accountability,andDeliverqualityworkontime”.

Mitrajayademonstrates itscommitment to itshuman resources,andseeks tomaintainahealthyenvironmentwhichshowsrespectforeachemployee,providesopportunityforeachemployeetocontributefully,andfosterspersonalgrowth.Humanresourcesareourvaluableassets.Assuch,wedonotdiscriminateagainstrace,gender,etc.WehirebasedonwhoisthebestsuitedforthejobfromacrossthevariousethnicgroupsfoundinMalaysia.ThebulkofouremployeesareconstructionworkersbelongingtoPMSBasPMSBisinahard-labourintensiveindustry,wehavenochoicebuttolooktowardshiringforeignworkersduetoalackoflocalswillingtoworkinthissector.

Workplace

(A) Employees

Year 2018 2017 2016

Total Number of Employees 1,467 1,767 1,380

Note: The number shown for a total number of employees are inclusive of foreign-skilled & semi-skilled labors

Executives 21% 20% 23%

Non-Executives 19% 19% 21%

Foreign-Skilled&Semi-SkilledLabors 60% 61% 56%


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(A) Employees

Year 2018 2017 2016

staff Category

Permanent Staff 83% 75% 78%

Non-Permanent Staff 17% 25% 22%

Note: The percentage shown are not inclusive foreign-skilled & semi-skilled labors

Gender

Female 32% 30% 28%

Male 68% 70% 72%


Age Group

<30 40% 45% 45%

30-39 35% 34% 33%

40-45 15% 13% 13%

46-49 4% 4% 4%

>50 6% 4% 5%

Percentageofemployeesemployedforagelessthan30hasdecreasedinyear2018.Althoughtherewasafallin2018workforcecomparedtoyear2017,yetMitrajaya’sworkforcewasstilldominatedbytheyoungpeergroupofpeople.Bycontrast,thenumberofemployeesbetweentheageof40andabovehasincreasedslightlyinyear2018.Overall,whilewesourceforskilledhires,wearealsofocusingonrecruiting,traininganddevelopingyoung talents for the company


(B) Diversity

Year 2018 2017 2016

Malay 63% 63% 63%

Chinese 28% 28% 26%

Indian 7% 7% 9%

Others 2% 2% 2%

TheRacedemographicsremainedstableoverthepastthree(3)years.



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(C) Employee Turnover Rates

Year 2018 2017 2016

Employee Turnover 32% 23% 25%

Ina rapidlyevolvingenvironmentandcompetitiveworld,weconstantly facemanychallengesparticularly inretainingourtalentsbecauseeventhoughwemightmanagetohirethebestemployees,keepingthemaroundbecomesoneofthegreatesthumanresourcechallenges.Asdisplayedabove,therewasasignificantincreaseof9%ofstaffturnoverinyear2018comparedtopreviousyears.


By Gender

Female (23%)8% (23%)5% (25%)6%

Male (77%)24% (77%)18% (75%)19%

It showed that the male construction workforce continues to dominate the highest population turnover rates in Mitrajaya.However,whenweexplorethesmallpopulationoffemaleemployees,italsoshowsanincreaseof3%inturnoverrate.

Note: The percentage shown are not inclusive foreign-skilled & semi-skilled labors. The figures shown in ( ) represents the percentage from the total turnover rates.

By Age Group

<30 (46%)15% (54%)12% (42%)11%

30-39 (34%)11% (25%)6% (31%)8%

40-45 (9%)3% (7%)1% (14%)3%

46-49 (5%)1% (4%)1% (4%)1%

>50 (6%)2% (10%)3% (9%)2%

Since the largestpartsofouremployeesarebelow theagegroupof40anddominatedby theyoungpeergroup,itisnotsurprisingtofindahigherturnoverinthisgroup.Accordingtothestudy,itshowedanincreaseinturnoverforagegroupbelow40.Thisgroupofjobswitchershasconsistentlyexperiencedthestrongestwagegrowthintheiragegroup.Ontopofthat,statistically,wefoundthattheutmostreasonisduetojobhoppingtrendwithintheindustry.

Note: The percentage shown are not inclusive foreign-skilled & semi-skilled labors. The figures shown in ( ) represents the percentage from the total turnover rates.


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Employee Engagement & staff Benefits

Weengagewithourstaffthroughformalandinformalchannelsinordertomaximiseourorganisationalperformance.Formalchannelsincludetwiceyearlyperformanceappraisals,team-buildingevents,townhallsessionsandcompanydinner.

Recognisingtheimportanceofhealthandfitness,in2017,thecompanyprovidedafullyequippedGymnasiumandFitnessCentrefortheexclusiveusageofMitrajayaemployees.Thecompanyorganisesweeklyyoga,HIITandZumbaclassesheldatthefitnesscentre.Inaddition,in2018,MitrajayacompletedthenewTrainingCentreinordertoholdmorein-housetrainingsessionsforthestaff.

Festival Celebrations – Chinese New Year Festival Celebrations – Hari Raya


(cont’d)

Town Hall Session with Staff Led by Our Group Managing Director, Mr. Tan Eng Piow

Gym & Fitness Centre for Staff New Training Centre

Company Annual Dinner 2018 – Gasby Night

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Documents

MITRAJAYA HOLDINGS BERHAD - Malaysiastock.biz day 2018 and appreciation day for 1.5 million manhours without loss time injury, awarded by mrcb 2017 • health, safety & environment