DESTINI Annual Report 2019

DEAR VALUED SHAREHOLDERS, First and foremost, we would like to take this opportunity to express our utmost sincere appreciation towards our shareholderswho have continued to remainwith us through a challenging year. The Board is filled with gratitude that its shareholders have stood in confidence in Destini as it strives towards sustainable growth. As all our shareholders are aware, Destini has been on a continuous path to increase its shareholders value, which also coincides in the Groups efforts in strengthening its foundation to ensure its income stream remains stable. That being said, on behalf of the Group and its Board of Directors, it brings us great pleasure to present Destini’s Annual Report for the financial year ended 31 December 2019 (“FYE2019”). The year 2019, has been a challenging year for Destini despite seeing tangible progress in its strategic initiatives for sustainable long-term growth. The Group was operating through a volatile business climate globally and domestically which saw softer economic growth that was in tandem with rising interest rates and the trade war between USA and China. This was further exacerbated by the violent swings in commodity prices which caused market uncertainties. Theglobal economywas recordedat itsweakest growthsince the global financial crisis about a decade ago. The year saw volatility in equity markets, escalation of trade disputes and dampened consumer confidence in major economies which continued to weigh down on global business sentiment and confidence. These factors did not only threaten economic growth of countries but also impacted global business sentiment. Destini was not spared from these economic factors and volatile market conditions and saw a lukewarm performance in FYE2019 from an uncertain business outlook and subdued corporate performance. CHAIRMAN AND PRESIDENT & GROUP CHIEF EXECUTIVE OFFICER STATEMENT 03 PERFORMANCE These uncertainties were heightened from an unpredictable turn in domestic political events where Malaysia saw a change in Government for the first time in its history. This change had created uncertainties where changes in administrative legislatives created various ambiguities in the continuation of various projects. This in turn saw slower progress in many projects that Destini currently holds which effected the Group’s topline growth. During the year in review, the Government took several measures to reduce Government debt and expenditure by suspending large scale infrastructure projects across the country and placing a halt in acquiring new assets for Government agencies. This created less opportunities for Destini to bid for new projects to increase its order book. Much effort was built towards solidifying the Group’s foundation, developing capabilities and enhancingoperations to ensure that Destini keeps on moving forward. Despite its efforts, the Group’s order book halved to RM536.55 million as at 31 March 2020 from RM1.34 billion year-on-year (YoY). The decrease is mainly attributable to project completions and less contract awards in FYE2019. Amongst many other companies, Destini saw several stalls in many of its Government related contracts. For instance, its MD530 supply contract was not able to proceed as the transition in administrative legislatives stalled the progress of this project. However, in December 2019, the Government gave the nod for Destini to continue executing its contract obligations. DESTINI BERHAD 034