annual report 2021
2 10 DIGITAL VERSION O F A N N U A L R E P O R T 2 0 2 1 21 Date Thursday, 30 June 2022 Time 2.00 p.m. Broadcast Venue Lot C601, Capital 3, Oasis Square, No. 2, Jalan PJU 1A/7A, Ara Damansara, 47301 Petaling Jaya, Selangor ANNUAL GENERAL MEETING PRG Values Chairman’s Statement ST The softcopy of the Annual Report 2021 is available on the company’s website at http://www.prg.com.my/ investor-relations/ Download the “QR Code Reader” on App Store or Google Play Run the QR Code Reader app and point your camera to the QR Code Get access to the soft copy of our reports and contact information
14 20 30 WHAT’S INSIDE Management Discussion and Analysis Directors’ Profile Sustainability Report 2 PRG Values 4 Corporate Information 6 Corporate Structure 8 Group Financial Highlights 10 Chairman’s Statement 14 Management Discussion and Analysis 20 Directors’ Profile 27 Management Team 30 Sustainability Report 40 Corporate Governance Overview Statement 50 Directors’ Responsibilities Statement 51 Additional Compliance Information 52 Statement on Risk Management and Internal Control 56 Report of The Audit and Risk Management Committee 61 Financial Statements 195 List of Group Properties 197 Analysis of Shareholdings 199 Notice of Twenty-First Annual General Meeting * Administrative Guide * Proxy Form
• Customer oriented • Innovative products • Creating values for customers and stakeholders PRG Values P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 2 VISION MISSION OUR AIM OUR TARGET TO BE A OF CHOICE FOR OUR BOTH LOCALLY AND INTERNATIONALLY PREMIER COMPANY STAKEHOLDERS
The name Premier Group denotes our commitment to strive to deliver the best in everything that we do, be it, our products, our concept, our service, our quality and value add to our stakeholders. To achieve such ideals, we must walk the talk by ensuring that we will always continue to innovate and place the interest of our customers as priority in developing our products. We also need to understand and cater to the needs of the customers, and create developments that are relevant and appropriate with eco-friendliness and sustainability as part of our concept. The above will set a platform for us to ensure that we consistently strive for excellence in all our business endeavours, not forgetting our commitments to the society and also placing priority to our staff and creating an environment that is conducive to excel. Integrity We act with professionalism in all our dealings and always deliver on our promise. Commitment We are fully committed to what we do, constantly challenging ourselves to serve better and to excel in every opportunity. Competency We drive efficiency by always looking for the ways to better ourselves and our team performances, effectiveness and productivity. Teamwork We value team spirit and place communication and sharing information as the key to our goals. Respect We advocate the assimilation of difference in our cultures in acknowledging differences of opinions, cultures and contributions, treating everyone with respect and create an environment for mutual respect. Innovation We promote and recognise creative thinking as key to creating the best value to our stakeholders. Customer We aspire to maximise values and satisfaction to our customer by creating quality products, excellent service, value added and concept that give our customer a better quality of life. PRG Values 3 P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 (cont’d) CORE VALUES PRG stands for PREMIER GROUP
AUDIT AND RISK MANAGEMENT COMMITTEE Lim Chee Hoong (Chairman) Ji Haitao Datin Azalina binti Adham NOMINATION COMMITTEE Datin Azalina binti Adham (Chairman) Lim Chee Hoong Ji Haitao REMUNERATION COMMITTEE Ji Haitao (Chairman) Lim Chee Hoong Datin Azalina binti Adham COMPANY SECRETARIES Yeoh Chong Keat (MIA 2736) (SSM PC No. 201908004096) Lim Fei Chia (MAICSA 7036158) (SSM PC No. 202008000515) REGISTERED OFFICE Suite 11.1A Level 11, Menara Weld 76 Jalan Raja Chulan 50200 Kuala Lumpur Tel : (603) 2031 1988 Fax : (603) 2031 9788 PRINCIPAL PLACE OF BUSINESS Corporate, Property Development & Construction, and Agriculture Divisions: Lot C601, Capital 3, Oasis Square No. 2, Jalan PJU 1A/7A, Ara Damansara 47301 Petaling Jaya Selangor Darul Ehsan Tel : (603) 7859 0877 Fax : (603) 7859 0977 Manufacturing Division: Lot 1883, Jalan KPB 9 Kg. Bharu Balakong 43300 Seri Kembangan Selangor Darul Ehsan Tel : (603) 8961 2278 Fax : (603) 8961 2340 Corporate Information BOARD OF DIRECTORS P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 4 Dato’ Dr. Awang Adek bin Hussin Independent Non-Executive Chairman Dato’ Lua Choon Hann Group Executive Vice Chairman Dato’ Wee Cheng Kwan Managing Director - Property & Construction Ng Tzee Penn Executive Director Lim Chee Hoong Independent Non-Executive Director Ji Haitao Independent Non-Executive Director Datin Azalina binti Adham Independent Non-Executive Director
PRINCIPAL BANKERS Alliance Islamic Bank Berhad Bank of Communications (Hong Kong) Limited China Construction Bank (Asia) Corporation Limited Hong Leong Bank Berhad Industrial and Commercial Bank of China Limited Malayan Banking Berhad Public Bank Berhad Public Bank Vietnam United Overseas Bank (Malaysia) Berhad Vietcombank AUDITORS BDO PLT (Firm No. LLP0018825-LCA & AF 0206) Level 8 BDO @ Menara CenTARa 360 Jalan Tuanku Abdul Rahman 50100 Kuala Lumpur SHARE REGISTRAR Bina Management (M) Sdn. Bhd. Reg. No. 197901005880 (50164-V) Lot 10, The Highway Centre Jalan 51/205 46050 Petaling Jaya Selangor Darul Ehsan Tel : (603) 7784 3922 Fax : (603) 7784 1988 STOCK EXCHANGE LISTING Main Market of Bursa Malaysia Securities Berhad Stock Code : 7168 Stock Name : PRG MAILING ADDRESS G.P.O. Box 11279 50740 Kuala Lumpur E-mail: enquiry@prg.com.my Corporate website: www.prg.com.my Corporate Information 5 P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 (cont’d)
MANUFACTURING & RETAIL DIVISION 0.00025% 0.00025% 100% 100% Furniweb Safety Webbing Sdn. Bhd. (Reg. No. 199601018760 (391112-U)) 100% Syarikat Sri Kepong Sdn. Bhd. (Reg. No. 197401004098 (21161-X)) Trunet (Vietnam) Co. Ltd. (3600499883) 50% 100% Webtex Trading Sdn. Bhd. (Reg. No. 198401018731 (131288-K)) Furniweb Holdings Limited (CT-320362) 54.19% Furniweb Manufacturing Sdn. Bhd. (Reg. No. 198701006262 (164933-H)) 100% Furniweb (Vietnam) Shareholding Company (3600259680) 99.9995% Texstrip Manufacturing Sdn. Bhd. FIPB International Limited (1932619) Delightful Grace Holdings Limited (2006175) Premier Management International Limited (2456353) (Reg. No. 198801003753 (171110-T)) 100% TS Meditape Sdn. Bhd. (Reg. No. 199401043240 (328928-W)) 100% 100% Fly High Finance Limited (2817311) 100% Jiangmenshi Meinaide Technology Company Limited (91440784684482222G) Meinaide Holdings Group Limited (2006864) 100% 10% 90% Meinaide Technology Development Limited (2795595) 100% Perfect Moral Ventures Limited (2790005) 100% 100% 100% PP Retail Pte. Ltd. (201812281E) 49% Philipp Plein (Thailand) Company Limited (0105559146730) 100% PRG Land Sdn. Bhd. (Reg. No. 201801010509 (1272524-A)) Measurement & Verification Pte. Ltd. (200916469Z) 100% Measurement & Verification Sdn. Bhd. (Reg. No. 201001007494 (892115-V)) 100% 37.25% Energy Solution Global Limited (2069872) Corporate Structure P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 6 (as at 31 March 2022)
100% PRG Agro Sdn. Bhd. Premier International Marketing Sdn. Bhd. (Reg. No. 201701012715 (1226880-W)) (Reg. No. 201701017501 (1231666-P)) 100% 100% Premier Food Processing Sdn. Bhd. (Reg. No. 201701020989 (1235155-T)) 100% PRG Asset Sdn. Bhd. (Reg. No. 201701019900 (1234065-P)) AGRICULTURE DIVISION PROPERTY DEVELOPMENT & CONSTRUCTION DIVISION 100% PRG Property Sdn. Bhd. (Reg. No. 200101025808 (561566-V)) PRG Construction Sdn. Bhd. (Reg. No. 201701022717 (1236883-P)) 100% 100% Premier Mirach Sdn. Bhd. (Reg. No. 201701023800 (1237966-A)) 25% 100% Premier JPC Sdn. Bhd. (Re. No. 201701027856 (1242022-P)) Premier Aspirasi Development Sdn. Bhd. (Reg. No. 201701026686 (1240852-A)) 49% Premier Aspirasi (Batu Gajah) Sdn. Bhd. (Reg.No. 201701028284 (1242450-W)) 100% Premier Baycity Sdn. Bhd. (Reg. No. 201601018738 (1189674-D)) 51% Premier PMC Sdn. Bhd. (Reg. No. 201401015646 (1091731-D)) 100% Premier Construction Sdn. Bhd. (Reg. No. 201301031501 (1061330-H)) Premier Construction (International) Sdn. Bhd. (Reg. No. 201701014030 (1228195-V)) 100% Premier Electrify Sdn. Bhd. (Reg. No. 201601031252 (1202193-U)) 100% OTHER DIVISIONS 100% 100% PRG Healthcare Sdn. Bhd. PRG Active Sdn. Bhd. (Reg. No. 201201001488 (975012-V)) (Reg. No. 201601031248 (1202189-K)) 100% 26.21% Esther Postpartum Care Sdn. Bhd. (Reg. No. 201601028964 (1199903-M)) PRG Management Services Sdn. Bhd. (Reg. No. 201701030011 (1244180-T)) 100% PRG Asset Holdings Sdn. Bhd. (Reg. No. 201801009459 (1271473-M)) MALAYSIA VIETNAM CAYMAN ISLANDS BRITISH VIRGIN ISLANDS HONG KONG SINGAPORE THAILAND CHINA (as at 31 March 2022) (cont’d) Corporate Structure 7 P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1
Financial Year ended 31 December 2021 2020 2019 2018 2017 (restated) (restated) (restated) Operating Results Revenue RM'000 190,532 195,614 148,542 148,626 158,577 Profit/(Loss) before Tax RM'000 15,596 (26,759) (69,500) (5,260) 6,495 (Loss)/Profit attributable to RM'000 (1,853) (12,793) (49,684) (8,978) 449 Shareholders Financial Position Total Assets RM'000 365,230 396,498 588,359 433,729 432,201 Total Borrowings RM'000 57,368 61,218 32,999 46,593 28,569 Total Cash and Bank Balances RM'000 37,741 34,874 23,386 35,079 42,023 Shareholders' Equity RM'000 150,560 153,830 158,188 131,958 131,665 Financial Ratios Return On Equity % (1.23) (8.32) (31.41) (6.80) 0.34 Return On Revenue % (0.97) (6.54) (33.45) (6.04) 0.28 Debt/Equity % 38.10 39.80 20.86 35.31 21.70 Net Gearing Ratio times 0.13 0.17 0.06 0.09 Net Cash Share Information Gross Dividends Per Share sen - - - - - Basic (Loss)/Earnings Per Share sen (0.43) (3.05) (14.42) (2.93) 0.15 Net Assets Per Share sen 35.06 35.82 39.26 42.52 43.59 Group Financial Highlights P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 8
Group Financial Highlights 9 P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 (cont’d) REVENUE TOTAL ASSETS (RM’000) PROFIT/(LOSS) BEFORE TAX (RM’000) 2017 2017 6,495 158,577 (5,260) 148,626 (69,500) 148,542 (26,759) 195,614 15,596 190,532 2018 2018 2019 2019 2020 2020 2021 2017 2018 2019 2020 2021 2021 2017 2018 2019 2020 2021 432,201 433,729 588,359 396,498 365,230 449 (8,978) (49,684) (12,793) (1,853) 131,665 131,958 158,188 153,830 150,560 (RM’000) (LOSS)/PROFIT ATTRIBUTABLE TO SHAREHOLDERS (RM’000) NET ASSETS PER SHARE SHAREHOLDERS’ EQUITY (sen) 2017 43.59 42.52 39.26 35.82 35.06 2018 2019 2020 2021 2017 2018 2019 2020 2021 (RM’000)
chairman’S STATEMENT P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 10 On behalf of the Board of Directors of PRG Holdings Berhad (“the Board”), I wish to present the annual report of the PRG Holdings Berhad (“PRG” or “the Company”) for the financial year ended 31 December 2021 (“FY2021”). DEAR VALUED SHAREHOLDERS, DATO’ DR. AWANG ADEK BIN HUSSIN Independent Non-Executive Chairman
PERFORMANCE REVIEW For FY2021, PRG and its subsidiaries (“the Group”) reported revenue of RM190.5 million which is RM5.9 million lower than what was reported in the financial year ended 31 December 2020 (“FY2020”). For the same period profit before tax came in at RM15.6 million which is RM48.1 million improvement from loss before tax of RM32.5 million recorded in the preceding year. Big improvement from profit before tax was due to higher sales and profit recognition from our property project Embayu @ Damansara West (“Embayu Project”) and improved performance from manufacturing division. The one-off impairment loss on goodwill and other assets was also lower as compared to last year. Due to resurgence in infection of Novel Coronavirus Disease-2019 (“COVID-19”), the manufacturing operations in Malaysia and Vietnam were disrupted from June to October 2021. However, the rebound in sales orders for webbing and rubber tape products during the year pushed the overall sales performance of this division. For FY2021, manufacturing division recorded a revenue of RM116.2 million which was RM19.9 million higher than the RM96.3 million recorded in the preceding year. Notwithstanding the strong sales, manufacturing division was still recorded a loss before tax of RM8.7 million, mainly due to further impairment losses on goodwill and other assets of RM18.3 million (2020: RM16.3 million) was recognised for the manufacturing business in the People’s Republic of China (the “PRC”) in view of prolong pandemic and business disruption in PRC. Despite the difficult property market, our team strive forward during the year and produced very encouraging result for the property and construction division. The Embayu Project had recorded an astonishing sale of approximately 61.2% up to December 2021. Since we price it at an affordable price range all the units were almost taken up. We expect the Embayu project to contribute positively to our group in upcoming years. However, the construction segment saw delay in the work and billing caused by the outbreak of COVID-19 pandemic. This division recorded profit before tax of RM10.7 million or an improvement of RM14.9 million compared to loss before tax of RM4.2 million recorded in the preceding year. Chairman’s Statement 11 P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 (cont’d) had recorded an astonishing sale of approximately 61.2% up to December 2021 Embayu @ Damansara West 61.2% For FY2021, manufacturing division recorded a revenue of RM116.2 million which was RM19.9 million higher than the RM96.3 million recorded in the preceding year.
The Group’s agriculture division saw higher revenue figures as there were higher sales of teak logs. There was destruction in the work flow due to the Movement Control Order (“MCO”) implemented throughout the year. Revenue came in at RM2.2 million which is RM1.3 million higher than the RM0.9 million recorded in the preceding year. Corporate Developments During the year, we took the initiative to consolidate our resources and divested our group’s stock broking business in March. We also decided to close our retail business in Singapore and Bangkok as the deterioration in consumer spending due to the COVID-19 pandemic affected our retail business severely and disrupted our expansion plans throughout South East Asia. In addition, our 54.19% owned subsidiary Furniweb Holdings Limited (“FHL”) has completed the acquisition of 37.25% stake in Energy Solution Global Limited (“ESGL”) group of companies in December 2021. ESGL has built up a strong reputation as a smart energy solution provider in Singapore and Malaysia, countries where climate change mitigation policies are shaping up, particularly in the area of energy efficiency. As such the Group foresee a big opportunity in this emerging green economy and has identified a company with excellent engineering expertise that can spearhead its strategy to position the Group competitively in this region. The Board has identified smart energy saving solution business as a new business segment to enable the Group to diversify its revenue sources and provide an additional stream of income. The Board believes by entering into the energy efficiency market, it shall enhance the Group’s future prospects and in line with the Group’s strategy of achieving sustainable growth. Outlook The global economy was anticipated to have a brisk recovery in year 2022 amid signs the Omicron coronavirus variant was having less of an impact, but the Russia-Ukraine crisis has rapidly emerged as a risk to supply chains and is likely to accelerate cost pressures. The sanctions against Russia in response to the invasion of Ukraine have jolted markets and boosted oil prices, adding to already high inflation and supply-chain disruptions. The property market in Malaysia remains challenging with issues such as affordability, slower economic growth, high levels of unsold units as well as the property supply-demand imbalance. Fear over the impact of the COVID-19 pandemic on the economy slowdown and oversupply situation is also delaying big-ticket item purchases as consumers take a wait-and-see approach. The Group will continue its focus on affordable property projects and believe that the affordable properties will be in demand especially in the prime areas of Selangor and Kuala Lumpur. The recent MCO also affected the logging operations. Despite the market uncertainty brought by the COVID-19 pandemic, the Group will endeavor to finalise and secure P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 12 Chairman’s Statement (cont’d)
13 P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 The dedication and commitment from our senior management team and employees has propelled our Group to new heights. demand for the teak logs business and deliver all the sales contract as soon as the operations resume full capacity. The Group is also exploring other collaboration opportunity to expedite the sale of teak logs. We are positive on the recent acquisition of ESGL as it will enhance our group’s environmental, social, and governance strategies. We believe our group can perform better if we are deliberate about our role in society and act in the interests of our employees, customers, communities and our shareholders. The Russia-Ukraine crisis has clouded global outlook. The further disruption in global supply chain, rising raw material price, economic sanctions over Russia and volatility in currency have made our operating environment extremely challenging. The Group will continue to strive to operate within the constraints as well as looking into risk mitigation measures to ensure business continuity and long term sustainability. Appreciation On behalf of the Board, I wish to express sincere appreciation to our stakeholders for your contributions and support. The dedication and commitment from our senior management team and employees has propelled our Group to new heights. In its role as steward, the Board practices high standards of corporate governance. Their independence and diversity in thought goes a long way towards determining the Group’s success. I would like to take this opportunity to welcome Datin Azalina to our PRG board. She brings with her more than 25 years of work experience in the financial and capital markets. As a former regulator she will no doubt enhance our diversity and skill sets, we look forward to her contributions to PRG group. Last but not least, thank you to our esteemed shareholders for your trust, patience, and continuous confidence in our Company. The Board remained optimistic in delivering positive financial results and I am confident that FY2022 will be another exciting year for PRG Group. May you all be safe and healthy. DATO’ DR. AWANG ADEK BIN HUSSIN Independent Non-Executive Chairman (cont’d) Chairman’s Statement
FINANCIAL REVIEW The Group's revenue for the FY2021 was RM190.5 million, representing RM5.9 million decrease as compared to revenue of RM196.4 million recorded in preceding year. The decrease of revenue of RM5.9 million for FY2021 was due to one-off realisation of previously unrealised intercompany construction revenue of RM80.5 million in FY2020. Excluding the one-off impact, our property development and construction division recorded an improved revenue of RM39.0 million, resulted from higher sales and progress from Embayu Project. On top of it, revenue from manufacturing division also shown a rebound in revenue of RM19.9 million, higher by 21% due to reopening of economy and recovery of sales from impact of COVID-19 pandemic. A total of RM15.0 million revenue was contributed by the underwriting fees, brokerage fees and financial advisor fees from security brokerage business which the Group acquired in the fourth quarter of 2020 and was subsequently disposed off in March 2021. The Board believes the disposal allows the Group to focus on its existing core business and conserve the funds and resources amid the economic uncertainties. P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 14 Management Discussion AND Analysis DEAR VALUED SHAREHOLDERS, I would like to personally thank each and every one of our shareholders, customers, business partners, business associates, bankers and other stakeholders for your continued support and faith in PRG throughout FY2021. It has been an extremely challenging year caused by the worldwide unprecedented crisis and pandemic. revenue from property development and construction division RM55 million DATO’ LUA CHOON HANN Group Executive Vice Chairman
Profit before tax for the FY2021 was RM15.6 million, representing improvement of RM48.1 million as compared to loss before tax of RM32.5 million recorded in preceding year. This improvement was mainly due to improved performance by manufacturing and property development divisions during the current financial year. Other than improvement of operating results, the Group recognised a lower impairment losses on goodwill and other assets of RM21.6 million in current year as compared the preceding year of RM44.0 million. Our retail division recorded a one-off recognition of reversal of lease liabilities and provision for restoration costs of RM11.9 million arising from early termination of lease and decrease in operational expenses during the financial year 2021. This was partially offset by the loss on disposal of the security brokerage business during 2021 of RM5.2 million. FINANCIAL REVIEW & REVIEW OF STRATEGIES BY SEGMENT Property Development and Construction Property development and construction division recorded revenue of RM55.0 million, which is RM41.5 million lower than RM96.5 million recorded in FY2020. The lower revenue is mainly due one-off realisation of previously unrealised construction revenue of RM80.5 million for Picasso Residence in the preceding year. The property development and construction division recorded profit before tax for FY2021 of RM10.7 million was an improvement by RM14.9 million as compared to loss before tax of RM4.2 million recorded in the preceding year. Our Embayu Project progress was affected by the Movement Control Order (“MCO”) implemented during June to August 2021. Our project team has been working hard to catch up the progress with the expectation to deliver the project on time to purchasers by 2023. During the year, the Tower C of Embayu Project was launched and received overwhelming responses. Our Embayu Project achieved encouraging sales of 61.2% as at year end. Agriculture The revenue for agriculture division for FY2021of RM2.2 million is higher than FY2020 by RM1.3 million, mainly due to higher sales volume of 1,282 ton during the period (2020: 612 ton). The loss before tax of RM1.9 million from agriculture division for FY2021 is improved by RM0.4 million as compared to FY2020 mainly contributed by higher sales of teak wood in FY2021. Harvesting activities were at standstill during the implementation of MCO most part of the year and affected the sales in FY2021. Management Discussion and Analysis 15 P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 (cont’d) higher than financial year ended 2020 by RM1.3 million RM2.2 million revenue for agriculture division
P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 16 (cont’d) We are confidence that as the country move on the recovery track from the COVID-19 pandemic to endemic phase, this division will contribute positively to our Group. Furthermore, we have engaged with local sawmills to develop various value-added teak wood products. Manufacturing The Group is a long-established elastic textile and webbing manufacturer in Malaysia and Vietnam. The products are manufactured and sold in Malaysia and Vietnam, and also exported to over 30 countries including the United States, United Kingdom, India, Indonesia, Australia, Sri Lanka and Pakistan. The Group ventured into manufacture and sale of PVC related products in 2019 by acquiring the entire issued share capital of a company whose subsidiaries in Hong Kong and PRC are mainly engaged in the manufacture and sale of PVC related products. The revenue from the manufacturing division for FY2021 was approximately RM116.2 million (2020: RM96.3 million), increased by approximately RM19.9 million or 20.6% as compared to FY2020. During FY2021, domestic sales and export sales accounted for approximately 46.3% and 53.7% (2020: 50.9% and 49.1%) of the total revenue from the manufacturing division, respectively. Asia Pacific region, Europe and North America continued to be the major export countries of the Group during both years. Revenue generated from the sale of elastic textile, webbing and other manufacturing products accounted for approximately 24.2%, 40.3% and 35.5% (2020: 28.9%, 38.5% and 32.6%) of the total revenue from the manufacturing division respectively during FY2021. Due to resurgence in infection of COVID-19, the operations in Malaysia and Vietnam were disrupted from June to October 2021. Despite all these challenges, the overall sales performance of the manufacturing division has shown a strong improvement as compared to 2020, mainly due to reopening of economy and recovery from the impact of COVID-19 pandemic during the year. The performance by products is stated as below: (i) Elastic textile During the year, the revenue of elastic textile was approximately RM28.3 million (2020: RM27.6 million), increased by approximately RM0.7 million or 2.5% as compared to 2020, mainly due to an increase in sales volume from customers in Europe during the year. The Group is a long-established elastic textile and webbing manufacturer in Malaysia and Vietnam. Management Discussion and Analysis
17 P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 (cont’d) (ii) Webbing The revenue of webbing was approximately RM47.1 million in year 2021 (2020: RM36.9 million), increased by approximately RM10.2 million or 27.6% as compared to 2020. This was mainly attributable to an increase in sales volume for both furniture webbing and seat belt webbing from customers in Asia Pacific region and North America during the year. (iii) Other manufacturing products During the year, the revenue of other manufacturing products was approximately RM40.5 million (2020: RM31.2 million), increased by approximately RM9.3 million or 29.8% as compared to 2020, mainly due to an increase in revenue contributed by PVC related products by RM6.1 million and rubber tape products by RM3.2 million as compared to 2020. Retail Division The Group had opened a retail store in Singapore and a 49%-owned store in Thailand in year 2019. After few months of operations, the retail business was severely impacted by the COVID-19 since the beginning of year 2020. The borders of countries were closed which led to a decrease in tourists’ arrival and resulted in deterioration of overall consumers’ spending. During the pandemic, the Group had put in effort in sales promotion, exploring digital retailing and social media platform as well as implementing cost rationalisation to overcome this difficult time. Due to the prolonged COVID-19 pandemic and closure of borders, the retail business had experienced unprecedented difficulties in their operations and is unlikely to have major recovery in the short run. Therefore, the Board has decided to close the retail store in Singapore in the second quarter of 2021. The Group has reached an agreement with landlord of the retail store in Singapore on early termination and to waive the contractual liabilities on remaining lease payments and reinstatement of store. As a result, the corresponding lease liabilities and provision for restoration costs were reversed during the financial year. The Board believes this decision allows the Group to conserve management and financial resources during the pandemic and to reallocate the resources to those businesses that have a better long term demand trajectory. Management Discussion and Analysis
The Board believes this decision allows the Group to conserve management and financial resources during the pandemic and to reallocate the resources to those businesses that have a better long term demand trajectory. For FY2021, the revenue of the retail division was approximately RM2.2 million (2020: RM2.7 million), decreased by RM0.5 million as compared to FY2020, mainly due to closure of retail store in Singapore in the second quarter of 2021. CORPORATE DEVELOPMENT (a) Disposal of Rich Day Global Limited (“Rich Day”) On 23 March 2021, our 54.19% owned subsidiary Furniweb Holdings Limited (FHL) disposed our stockbroking business Rich Day to two independent third party purchasers for a total consideration of HKD8.5 million (equivalent to approximately RM4.4 million). The Board believes the disposal allows the Group to focus on its existing businesses and conserve the funds and resources amid the economic uncertainties. (b) Acquisition of ESGL On 13 December 2021, FHL completed the acquisition of 37.25% of issued share capital of ESGL, whose two wholly-owned operating subsidiaries are principally engaging in provision of smart energy solution business, at the total consideration of HKD9.6 million (equivalent to approximately RM5.2 million). The results of operation and financial position of ESGL and its subsidiaries will be accounted for in the financial statements of the Group on an equity basis. RISK MANAGEMENT & APPROACHES All of our group’s operating assets are spread across Malaysia, Vietnam, Hong Kong and PRC. As such, our business, financial conditions and operations relies on the political and regulatory developments of local governments and authorities. On the external front although the Omicron coronavirus variant is now having less impact but the Russia-Ukraine crisis can easily derail the recovery engine as it jolted market with high oil prices, disrupted supply-chain and inflated raw material prices across the industries. The sanctions over Russia also caused volatility in the currency market and made our operating environment challenging. Internally, we continue our business rationalisation of our unsustainable business by closing our retail and disposedoff the stock broking business and efforts have been made on cost-optimisation and process efficiency enhancement. The Group constantly reassesses its risk exposure and seeks to optimise the balance between opportunities and risks both in operations and strategic direction. FUTURE PROSPECTS The pandemic has changed our life profoundly, reshaped the economy and changed the way we conduct our business. In this post lockdown transition period, we remain cautious on the near term prospects as the road to recovery in 2022 still has its uncertainties. We believe 2022 should be on the recovery track with the resumption of full economic activities, lifting of interstate and international travel bans and the high vaccination rate of Malaysians. In addition, the rolling out of the national recovery plan will further pave the road to recovery for the Malaysian economy. With the recent Government announcing the endemic phase in April 2022, every economic sector should be boosted by a stronger consumer spending. Finally, the fear over the impact of the COVID-19 pandemic on the economy and oversupply situation should subside. However, our manufacturing division remains cautious on the geopolitical risks resulted to supply chain disruptions as well as rising commodity and energy prices to ensure business continuity and long-term sustainability. P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 18 (cont’d) FHL completed the acquisition of smart energy solution business On 13 December 2021 37.25% Management Discussion and Analysis
The property market in Malaysia in the financial year 2022 remains challenging with recurring issues such as affordability, slower economic growth, high levels of unsold units as well as the property supply-demand imbalance. However, the Group sees the financial year 2022 onward an opportunity to continue our effort in providing affordable type of real estate products. We strongly believe that the property market will slowly recover with the renewed consumer confidence and gradual improvement in sentiment. The Group will continue its focus on affordable property projects and believe that this segment of the market will be in demand especially in the prime areas of Selangor and Kuala Lumpur. We strongly believe that Malaysian with its young population will continue spur the demand for property despite the prolonged pandemic since year 2020. Our property division has performed satisfactorily by locking in high sales number for our Embayu Project despite the difficult operating environment. Our construction division continue to push forward despite many disruption in work flow caused by the MCO. With the workforce finally back to normal we believe our agriculture division should perform better than last year. For future growth, the Group will continue to seek opportunities by leveraging on its inherent business strengths and will look into opportunities in the low cost property segment of the market. The Group will remain cautious in planning and looking at potential new businesses via strategic alliances or mergers and acquisitions. With the recent acquisition of ESGL to venture into emerging green economy, we believe it will enhance our group’s environment, sustainable and governance policy and will create value to our shareholders in the long run. We continue to build our brand to deliver quality products to solidify strong customer focus and deliver sustainable value to our stakeholders. Dato’ Lua Choon Hann Group Executive Vice Chairman 19 P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 (cont’d) The Group will continue to seek opportunities by leveraging on its inherent business strengths and will look into opportunities in the low cost property segment of the market. Management Discussion and Analysis
Directors’ Profile P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 20 DATO’ DR. AWANG ADEK BIN HUSSIN INDEPENDENT NON-EXECUTIVE CHAIRMAN Nationality Malaysian Gender Male Age 67 Date of Appointment: 18 August 2017 Academic / Professional Qualification / Membership(s): • PhD in Economics, University of Pennsylvania, USA (1984) • Master of Arts in Economics, University of Pennsylvania, USA (1981) • Bachelor of Arts, Drew University, USA (1977) Board Committee(s): Nil Present Directorship(s): Listed entity: Nil Other public company: Nil Present Appointment(s): • Chairman, Universiti Sains Malaysia Past Appointment(s): • Director, Permodalan Nasional Berhad • Chairman, PNB Research Institute • Chairman, Majlis Amanah Rakyat (MARA) • Malaysian Ambassador to the USA (2014 - 2016) • Deputy Minister of Finance (2006 - 2013) • Deputy Minister of Rural Development (2004 - 2006) • Chairman of Tenaga Nasional Berhad (2003 - 2004) • Assistant Governor of Bank Negara Malaysia (1998 - 2001) • Director General of Labuan Financial Services Authority (1996 - 1998) • Various Positions in Bank Negara Malaysia (1985 - 1996) • Lecturer, University Sains Malaysia (1983 - 1985) Number of Board Meetings attended during financial year 2021: 5/5 1
Directors’ Profile 21 P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 DATO’ LUA CHOON HANN GROUP EXECUTIVE VICE CHAIRMAN Nationality Malaysian Gender Male Age 45 Date of Appointment: 1 November 2013 Academic / Professional Qualification / Membership(s): • Bachelor of Law, University of Cardiff Board Committee(s): Nil Present Directorship(s): Listed entity: Nil Other public company: Nil Present Appointment(s): • Executive Director, Furniweb Holdings Limited (April 2017 - Present) Past Appointment(s): • Independent Director & Chairman of Audit Committee, Pelikan International Corporate Berhad (April 2013 - September 2019) • Director, Malaysian Investment Development Authority (2017 - 2018) • Prosecutor, Attorney General’s Chambers in Singapore (2000 - 2002) • With his professional legal experience, business acumen and commercial know-how, Dato’ Lua became an entrepreneur in 2003 through various business ventures in Malaysia, China, Singapore and Hong Kong, involving various sectors, including the provision of corporate consultancy and solution services, property development and other related businesses. Number of Board Meetings attended during financial year 2021: 5/5 2 (cont’d)
P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 22 DATO’ WEE CHENG KWAN MANAGING DIRECTOR - PROPERTY & CONSTRUCTION Nationality Malaysian Gender Male Age 45 Date of Appointment: 5 August 2013 Academic / Professional Qualification / Membership(s): • Bachelor of Civil Engineering, University of Portsmouth (1997 - 1999) Board Committee(s): Nil Present Directorship(s): Listed entity: Nil Other public company: Nil Present Appointment(s): • Director, Widuri Capital Management Sdn. Bhd. Past Appointment(s): • Structural Engineer, Chiu Teng Construction Pte. Ltd. (Singapore) • Engineer, L&M Foundation Specialist Pte. Ltd. (Singapore) Number of Board Meetings attended during financial year 2021: 5/5 3 Directors’ Profile (cont’d)
23 P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 NG TZEE PENN EXECUTIVE DIRECTOR Nationality Singaporean Gender Male Age 45 Date of Appointment: 8 May 2020 Academic / Professional Qualification / Membership(s): • Bachelor of Engineering, National University of Singapore Board Committee(s): Nil Present Directorship(s): Listed entity: Nil Other public company: Nil Present Appointment(s): • EVP, Chief Technical Officer of Tessa Therapeutics Ltd. (January 2016 - present) Past Appointment(s): • Director - Global Business Unit (Asia) and Marketing of Spectrum Brands (January 2015 - December 2015) • Director - Global Program Management and China Sales (August 2006 - December 2014) Number of Board Meetings attended during financial year 2021: 3/5 Others: Son of Ng Yan Cheng, the major shareholder of PRG. 4 Directors’ Profile (cont’d)
P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 24 LIM CHEE HOONG INDEPENDENT NON-EXECUTIVE DIRECTOR Nationality Malaysian Gender Male Age 61 Date of Appointment: 21 July 2003 Academic / Professional Qualification / Membership(s): • Malaysian Institute of Certified Public Accountants • Malaysian Institute of Accountants • Chartered Tax Institute of Malaysia Board Committee(s): • Audit and Risk Management Committee (Chairman) • Nomination Committee • Remuneration Committee Present Directorship(s): Listed entity: Choo Bee Metal Industries Berhad Pelikan International Corporation Berhad Other public company: Nil Present Appointment(s): • Certified Public Accountant, Messrs CHI-LLTC • Independent Non-Executive Director, Choo Bee Metal Industries Berhad • Director, Lim Tang Tax Services Sdn. Bhd. • Independent Non-Executive Director, Pelikan International Corporation Berhad • Partner, TNL Partners PLT Past Appointment(s): • Partner, Lee Teik Swee & Co. • Audit Senior, Kassim Chan & Co. (1990 - 1993) • Articled Clerk, Coopers & Lybrand (1981 - 1987) • Group Accountants and Group Financial Controller in commercial sectors from 1993 till 1997 Number of Board Meetings attended during financial year 2021: 5/5 5 Directors’ Profile (cont’d)
25 P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 Directors’ Profile JI HAITAO INDEPENDENT NON-EXECUTIVE DIRECTOR Nationality Australian Gender Male Age 45 Date of Appointment: 8 May 2020 Academic / Professional Qualification / Membership(s): • Bachelor of Commerce, University of Sydney Board Committee(s): • Remuneration Committee (Chairman) • Audit and Risk Management Committee • Nomination Committee Present Directorship(s): Listed entity: Nil Other public company: Nil Present Appointment(s): • Managing Director of Net Venture Properties (Australia) Pty Ltd (May 2013 - present) Past Appointment(s): • Managing Director of D W Link Pty Ltd (February 2007 - July 2011) Number of Board Meetings attended during financial year 2021: 5/5 6 (cont’d)
P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 26 Directors’ Profile DATIN AZALINA BINTI ADHAM INDEPENDENT NON-EXECUTIVE DIRECTOR Nationality Malaysian Gender Female Age 53 Date of Appointment: 27 August 2021 Academic / Professional Qualification / Membership(s): • Advanced Management Programme, Harvard Business School, Boston, Massachusetts, USA • B.Sc. Management/Finance Minor in Marketing, Purdue University, West Lafayette, Indiana, USA Board Committee(s): • Nomination Committee (Chairman) • Audit and Risk Management Committee • Remuneration Committee Present Directorship(s): Listed entity: Media Prima Berhad (June 2021 - present) OSK Holdings Berhad (July 2021 - present) Other public company: Nil Present Appointment(s): • Independent Non-Executive Director, Media Prima Berhad • Independent Non-Executive Director, OSK Holdings Berhad • Independent Director, MyCreative Ventures Sdn Bhd (wholly owned by MOF Inc.) • Executive Advisory Panel, Cultural Economy Development Agency (CENDANA) Past Appointment(s): • Chief Operating Officer, Bursa Malaysia Berhad (February 2017 - 2020) • Director, Strategy & Transformation, Bursa Malaysia Berhad (January 2012 - February 2017) • Various roles within Bursa Malaysia (June 2001-Dec 2011) including - Head, Investor Development, Securities Market (January 2010 - December 2011) - Head, Marketing Strategy & Planning (January 2008 - December 2009) - Head, Equities Marketing (January 2005 - December 2007) - Manager, Policy & Development (June 2001 - September 2003) • Manager, Corporate Finance, Amanah Merchant Bank Berhad (July 1996 - June 2000) • Manager, Investment Banking, Aseambankers Malaysia Berhad (July 1992 - June 1996) Number of Board Meetings attended during financial year 2021: 1/1 7 Save as disclosed above, none of the Directors has any family relationship with any other Directors and/or other major shareholders of the Company, any conflict of interests with the Company nor any personal interest in any business arrangement involving the Company. The above Directors have no convictions for offences within the past five (5) years (other than traffic offences, if any) nor any public sanction or penalty imposed by the relevant regulatory bodies during the financial year 2021. All the Independent Non-Executive Directors satisfied the criteria required of an independent director as defined under Bursa Malaysia Securities Berhad’s Main Market Listing Requirements, which include being independent of management, free from any business or other relationship which could interfere with the exercise of independent judgement, objectivity or the ability to act in the best interests of the Company, and also being independent of its major shareholders. (cont’d)
27 P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 Management Team Date of Appointment: 1 February 2016 Academic / Professional Qualification / Membership(s): Bachelor of Science degree in Accounting and Finance, Purdue University (1995) Present Directorship(s): Listed entity: G Neptune Berhad XL Holdings Berhad (formerly known as Xian Leng Holdings Berhad) Other public company: Nil Working Experience: • Independent Non-Executive Director, XL Holdings Berhad (formerly known as Xian Leng Holdings Berhad) (Jan 2021 - present) • Independent Non-Executive Director, G Neptune Berhad (April 2018 - present) • Independent Non-Executive Director, Minetech Resources Berhad (January 2020 - June 2020) • Director of Corporate Finance, Amanie Corporate Advisors (2012 - 2016) • Associate Director of Institutional Sales, Ambank Securities Sdn. Bhd. (2008 - 2009) • Assistant General Manager of Equity Sales, RHB Securities (2004 - 2008) • Associate Director of Equity Sales, UOB Kay Hian Securities Singapore (1999 - 2004) 1 Nationality Malaysian Gender Male Age 50 CHEAH HANNON DIRECTOR OF CORPORATE AFFAIRS & EXECUTIVE DIRECTOR OF FURNIWEB HOLDINGS LIMITED Date of Appointment: 21 July 2003 Academic / Professional Qualification / Membership(s): Completed his secondary school education in Malaysia. Present Directorship(s): Listed entity: Nil Other public company: Nil Working Experience: • Vice President, Malaysian Textile Manufacturers Association (2011 - 2019) • Rubberflex Sdn. Bhd. (1986 - 1987) • Heveafil Sdn. Bhd. (1980 - 1986) • Oriental Elastic Industries Co. (1974 - 1980) • Malaysian Army (1965 - 1974) Others: Founder member of Furniweb Manufacturing Sdn. Bhd., Webtex Trading Sdn. Bhd. and Texstrip Manufacturing Sdn. Bhd. 2 Nationality Malaysian Gender Male Age 75 CHEAH ENG CHUAN CHIEF EXECUTIVE OFFICER & EXECUTIVE DIRECTOR OF FURNIWEB HOLDINGS LIMITED
P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 28 (cont’d) Date of Appointment: 2 January 2014 Academic / Professional Qualification / Membership(s): Bachelor of Science in Business Administration (Major in Finance Option), California State University of Fresno Present Directorship(s): Listed entity: Naim Holdings Berhad Other public company: Nil Working Experience: • Independent Non-Executive Director, Naim Holdings Berhad • Head of Equity Syndication of Group Investment Banking, Kenanga Investment Bank Berhad • Head, Equity Capital Markets, RHB Investment Bank Berhad • Senior Vice President, Institutional Sales, CIMB & Affin Securities • Portfolio manager officer, AMMB Asset Management Sdn. Bhd. 3 Nationality Malaysian Gender Male Age 50 TAN CHUAN DYI CHIEF OPERATING OFFICER, MANUFACTURING – VIETNAM & MALAYSIA OF FURNIWEB HOLDINGS LIMITED Date of Appointment: 2 May 2014 Academic / Professional Qualification / Membership(s): • Bachelor of Accounting from University of Malaya • Certified Public Accountant of Malaysian Institute of Accountants (MIA) • A member of the Malaysian Institute of Certified Public Accountants (MICPA) Present Directorship(s): Listed entity: Nil Other public company: Nil Working Experience: • Senior Manager of Corporate Finance, Encorp Berhad (2012-2014) • Business Analyst of Hewlett Packard Malaysia (20112012) • Audit Manager of KPMG China (2008-2010) • Audit Manager of Ernst & Young Malaysia (2002-2008) 4 Nationality Malaysian Gender Female Age 42 HO PHEI SUAN CHIEF FINANCIAL OFFICER OF FURNIWEB HOLDINGS LIMITED Management Team
Management Team 29 P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 (cont’d) Date of Appointment: 4 September 2017 Academic / Professional Qualification / Membership(s): Bachelor of Science (Land Administration & Development), University of Technology, Malaysia Present Directorship(s): Listed entity: Nil Other public company: Mirame Land Berhad Working Experience: • General Manager, PRG Property Sdn. Bhd. (2014 - 2017) • Senior Vice President, Villamas Sdn. Bhd. (2007 - 2014) • Assistant Project Manager, Saujana Heights Sdn. Bhd. (2005 - 2007) 5 Nationality Malaysian Gender Male Age 43 TAN CHOONG WEI CHIEF OPERATING OFFICER, PROPERTY DEVELOPMENT DIVISION Date of Appointment: 1 November 2019 Academic / Professional Qualification / Membership(s): Master in Business Administration Present Directorship(s): Listed entity: Nil Other public company: Nil Working Experience: • Publicity Officer in Villaraya Holdings Sdn. Bhd. • Public Relation Manager, Villaraya Holdings Sdn. Bhd. • Trainer, US Training & Research Sdn. Bhd. • Advisor for Managing Director, Seri Mutiara Sdn. Bhd. • Executive Director, Trans Inn Sdn. Bhd. • Business Development Director, Petrol One Berhad • Advisor, Smart Crest Sdn. Bhd. • Co-owner cum Marketing Director, Nature Goodness Food Industry Sdn. Bhd. • Business Development Director, Oil Hub Sdn. Bhd. 6 Nationality Malaysian Gender Male Age 49 DATUK YOO WEI HOW MANAGING DIRECTOR, AGRICULTURE None of the above Key Senior Management members has any family relationship with any Directors and/or major shareholders of the Company, any conflict of interests with the Company nor any personal interest in any business arrangement involving the Company. The above Key Senior Management members have no convictions for offences within the past five (5) years (other than traffic offences, if any) nor any public sanction or penalty imposed by the relevant regulatory bodies during the financial year.
This report discloses the material sustainability matters and impacts arising from the activities of the Group during FY2021. For each sustainability matter, the Group has described the measures and performance in the process of managing the matter, guided by the Group’s business strategies and policies. The preparation of this report is also guided by the Sustainability Reporting Guide issued by Bursa Malaysia Securities Berhad (“Bursa Securities”). The Group recognises that the business decisions may have potential impact to the surrounding communities and environment that the Group operates within. Therefore, the material sustainability matters disclosed in this report was identified and strategic measurement and actions were taken to manage the subject matter. The Group focus on driving sustainable growth in pursuit of its objectives and is committed to engage the stakeholders and operate with the highest degree of integrity and transparency. With this spirit, the Group strive to meet the expectations and achieve the vision for sustainability. The Group will continue to integrate elements of sustainability into daily operations and communicate its initiatives at all levels within the organisation as the knowledge on sustainability issues and their impacts the business deepens. GOVERNANCE STRUCTURE At PRG, the sustainability leadership is led by the Board who is responsible to oversee the integration of sustainability initiatives across the Group and its business strategy, and that adequate resources, systems and processes are in place for managing the sustainability matters. In order to assist the Board in driving and reporting the Group’s sustainability practices, the Group Executive Vice Chairman with the assistance of the Executive Directors of each division and the key members of senior management team are responsible for the management and oversight of sustainability matters which are aligned with the Group’s business strategy, direction and operation; the implementation of appropriate measures and actions as well as monitoring of key performance indicators, if applicable. SCOPE OF SUSTAINABILITY STATEMENT AND BASIS Unless otherwise stated, this Sustainability Report covers the overall EES performance of all the operating divisions of PRG Group, namely the Manufacturing Division, Property Development & Construction Division, Agriculture Division and Retail Division with operations in Malaysia, Vietnam, China, Singapore and Thailand. Furniweb Holdings Limited (“FHL”), a 54.19%-owned subsidiary of the Company, is the holding company of the subsidiaries operating in the Manufacturing Division. FHL is listed on the GEM of The Stock Exchange of Hong Kong Limited and is subject to the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited (the “GEM Listing Rules”). FHL had published its Environmental, Social and Governance Report in accordance to Environmental, Social and Governance Reporting Guide set out in the GEM Listing Rules. MATERIALITY ASSESSMENT Identification The Group conducts materiality review every year to identify the sustainability matters that are important and relevant to the Group and its stakeholders. The result would help the Group to address and manage the material sustainability matters. P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 30 OVERVIEW The Group is pleased to present the Sustainability Report which outlines the commitment of the Group towards being a sustainable organisation and endeavours to continuously improve across the three aspects of sustainability in economic, environmental and social (“EES”) considerations, risks and opportunities. Sustainability Report
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