Chairman's Letter to Shareholders
Chairman's Letter To Shareholders


The Group recorded profit after tax of RM4.5 million, with contributions primarily from Malaysia Properties and Renewable Energy and Contracting divisions. During the year, the Group sold two pieces of contiguous lands in Sepang which contributed RM16.3 million to our profit before tax. The lower profit as compared to the preceding year was due to a one-off deferred tax asset recognised in financial year ended 31 March 2019 on Investment Tax Allowance granted for our 20MW Sungai Liang Mini-Hydro Power Plant of RM25.7 million. Contribution from Overseas Properties was considerably lower as the two major projects in London have been completed and substantially sold with only minimal unsold units left.

The start of the Group’s financial year saw the emergence of COVID-19 pandemic. Along with the debilitating virus, there was a slowdown in economic activities, an escalation of trade disputes, commodity fluctuations and political uncertainties. The widespread imposition of travel restrictions, lockdown measures and temporary suspension of business operations to curb the spread of the virus has led to a cautious investor and consumer sentiment amidst an outlook of a global recession.

On a more positive note, all countries are united in fighting this and will implement pump priming measures to kick-start their economies, supported by both fiscal stimulus and accommodative monetary policies. Governments across the globe have announced various multi-billion dollar economic incentive schemes like job or wage support, rental assistance, payment moratoriums, tax relief, waivers and subsidies. Central Banks too have intervened timely with interest rate reductions and increased bond buying programmes. All these measures will definitely help to counter the economic disruptions brought about by the COVID-19 pandemic.

In the meantime, the Group’s financial position remains strong with shareholders’ funds of RM1.4 billion and RM334.0 million in deposits, cash and bank balances. Its net debt to equity ratio stands at a conservative 11.5% of the Group’s borrowings of RM492 million, 40% is matched against income generating assets such as our renewable energy power plants and investment properties. Most of the borrowings at the joint venture level are taken on non-recourse basis and with conservative loan-to-value ratios. The Group has available funding to meet its remaining commitment for all its projects.
The Group invested in 15 projects spread over 6 prime cities across the world. This path of diversification during the past several years ensures mitigation against any significant concentration risk in any particular market. Projects selected are within prime central districts of the respective renowned cities. Historical data has shown that they are normally the quickest to rebound. The partnership model that we employ with reputable local incumbents naturally provides effective project execution on the ground whilst optimising cost. Further, our partners are financially sound, internationally diversified and committed to the delivery of every project.

The Group’s two upcoming development projects in Bankside Yards and Kilmuir House situated in Southbank and Belgravia respectively are currently undergoing a comprehensive replanning phase to enhance their potential value. Towards this, the ongoing replanning exercise for Bankside Yards whilst aimed at enhancing the master plan and product configuration also incorporates a multiple phased approach for a more flexible launch of the projects’ various components in accordance to market demand.


Garcia de Paredes 4, Madrid

In Madrid where we have invested in five prime central residential projects, four of them are scheduled for completion in the coming financial year. The remaining one is held for recurring rental income until year 2021. Our efforts for the year will thus be focused on resuming sales activities which had achieved good momentum prior to the COVID-19 disruption.

In the past financial year, we continued to rebalance our investments to include Asia given the higher economic growth in this part of the world. Our Asia portfolio now makes up 38% of our overseas investment from 28% in the previous year as we added the financial hubs of Singapore and Shanghai into our list of prime cities invested after Tokyo and Hong Kong.

In May 2019, the Group expanded its footprint into Singapore via a joint venture agreement to acquire a 20% effective interest in two blocks of 8-storey Grade A office towers located at Tampines Grande, on the eastern side of the island towards Changi airport. In November 2019, the Group successfully added two new commercial properties located within Jing’an District, Shanghai. Our joint venture with Chelsfield Asia completed the acquisition of five floors of strata office properties in Llland Tower, located on West Nanjing Road, Shanghai followed with the acquisition of four blocks of office buildings in Daning International Commercial Plaza located along Gonghexin Road, Shanghai. We have a 35% and 20% equity interest in these two projects respectively.

In this respect, all these three joint ventures are investments in existing completed commercial office buildings with asset enhancement programmes in place to competitively reposition the acquired assets. The extensive refurbishment in Llland Tower have successfully brought in new tenants at higher rental rates. We hope to continue improving the occupancy rate this financial year as Shanghai is one of the first few global cities that has re-opened and recorded strong viewings for business premises.

In Malaysia, Renewable Energy and Contracting division and Sibu Jaya township development provide a sustainable and recurring earnings base. Further, Renewable Energy is unaffected by the pandemic as the electricity uptake is guaranteed via the 21-years Feed-in-Tariff contracts. During the financial year, the division saw an improvement in its bottom line resulting from the first full year operations of the 20MW Sungai Liang Mini-Hydro Power Plant, favourable weather conditions as well as lower interest rates. Efforts are ongoing to continuously improve plant efficiency and to reduce downtime contingencies. The Group received the Merit Award (Category 2 – National Grid) at the National Energy Awards (NEA) 2019 for its 6MW Mini-Hydro Power Plant located at Perting River. The NEA is an initiative by the Minister of Energy, Science, Technology, Environment and Climate Change (MESTECC) to recognise outstanding achievements and best practices in both conventional and renewable energy.

Merit Award (Category 2 – National Grid) for 6MW Mini-Hydro Power Plant, Sungai Perting
  Despite the lower financial results, the Company strives to maintain a consistent dividend payout to shareholders and has paid on 30 July 2020 an interim dividend in respect of financial year ended 31 March 2020 of 3 sen per ordinary share amounting to approximately RM21.4 million. This replaces the usual final dividend recommendation which is subject to shareholders’ approval given the uncertainty over the timing of our AGM in light of the COVID-19 pandemic at the time of declaration. We continue to be a socially responsible organisation with our efforts detailed out in our Sustainability Statement set out on page 19.

Last but not least, many sincere thanks to all our teams who continue to maintain the projects in a good state of operational readiness and momentum during this difficult COVID-19 period. Stay Safe.


Arbor (BY3), Bankside Yards, London

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