BUILDING THE RIGHT THING - YTL e-Solutions

1 Annual Report 2020 Annual Report 2020 BUILDING THE RIGHT THINGThe Journey CORPORATION BERHADA nnual Report 2020 CONTENTSCORPORATE REVIEW02 Chairman s Statement04 Managing Director s Review07 Management Discussion & Analysis37 Managing Sustainability39 Corporate Events41 Notice of Annual General Meeting44 Statement Accompanying Notice of Annual General Meeting45 Corporate Information46 Profile of the Board of Directors51 Profile of Key Senior Management52 Statement of Directors Responsibilities53 Audit Committee Report56 Nominating Committee Statement61 Corporate Governance Overview Statement69 Statement on Risk Management & Internal Control73 Analysis of Shareholdings75 Statement of Directors Interests78 List of PropertiesFINANCIAL STATEMENTS81 Directors Report91 Statement by Directors91 Statutory Declaration92 Independent Auditors Report100 Income Statements101 Statements of Comprehensive Income102 Statements of Financial Position104 Statements of Changes in Equity106 Statements of Cash Flows110 Notes to the Financial Statements Form of ProxyCompany No.

2 198201012898 (92647-H)TAN SRI DATO (DR) FRANCISYEOH SOCK PINGKBE, CBE, FICEE xecutive ChairmanYTL Corporation Berhad ( YTL Corp ) and its subsidiaries ( Group ) posted a 6% increase in revenue to billion for the financial year ended 30 June 2020, contributed mainly by our construction and cement segments. After eliminating the losses arising from fair value changes, impairments and inventory write-downs of million, the Group recorded profit before tax of million for the current financial Malaysian economy registered lower gross domestic product (GDP) growth of for the 2019 calendar year compared to in 2018, impacted by weaker external demand and investment activity, as well as supply disruptions in the commodities sector. The economy contracted by in the first quarter and in the second quarter of 2020, resulting from the concurrent supply and demand shocks due to weak external conditions and the strict measures implemented to contain the COVID-19 pandemic (sources: Ministry of Finance malaysia , Bank Negara malaysia updates & reports).

3 Meanwhile, in other major economies in which the Group operates, the United Kingdom registered GDP growth of approximately during 2019, with the economy contracting by an estimated and , respectively, in the first and second quarters of the 2020 calendar year. Singapore s economy showed growth of in 2019, followed by contractions of and , respectively, in the first and second quarters of the 2020 calendar year (sources: Ministry of Finance malaysia , Singapore Ministry of Trade & Industry, UK Office for National Statistics updates & reports).02 YTL CORPORATION BERHADC hairman s StatementThe outbreak of the COVID-19 pandemic has not spared any country or industry, necessitating the closure of borders, the imposition of movement control orders and restrictions on the provision of non-essential services across the globe. The last four months of the financial year, covering the period from March to June 2020, encompassed some of the most stringent measures, hampering the operations of parts of our businesses during various , our utilities division has stood as a bulwark, continuing to operate throughout the control period as the businesses all provide essential services water, electricity and telecommunications.

4 Our cement and construction businesses also returned to operation relatively expeditiously, whilst our hotels have started to see recovery particularly from domestic travellers holidaying within the order to ensure that shareholders will continue to be rewarded with healthy dividend yields, whilst enabling our Group to conserve cash to provide increased flexibility and options to optimally manage our existing businesses and invest in future opportunities, YTL Corp declared a 1-for-30 share dividend with an entitlement date of 28 October 2020. This represents a dividend yield of about based on the average share price for the year of per share. YTL Corp has a consistent dividend track record and has declared dividends to shareholders for 36 consecutive years since listing on the Kuala Lumpur stock exchange in Group s long-term growth and development strategies, centred around geographic diversification and expansion of our revenue base, focusing on regulated utility assets providing essential services and other core businesses such as cement and construction, served us well this year, facilitating our ability to function even at restricted levels and providing the necessary protection and stability to the Group in the face of unpredictable global remain committed to the prudent financial management that has fortified our Group in times of uncertainty.

5 Our financial structure will continue to be safeguarded by our long-standing policy of maintaining cash reserves and financing acquisitions on a ring-fenced, non-recourse basis that ensures the stand-alone viability of the business. This structure is further bolstered by our regulated assets which deliver asset values that increase over time and optimise capital expenditure, in addition to flowing up dividends from operational will continue to improve on our track record and ensure that our ventures are sustainable over the long-term in order to deliver returns to our shareholders, protect the livelihoods of the employees who form the backbone of our Group, offer world class products and services at competitive prices to our customers and advance the communities where we SRI DATO (DR) FRANCIS YEOH SOCK PINGPSM, KBE, CBE, FICE, SIMP, DPMS, DPMP, JMN, JP03 ANNUAL REPORT 2020 Chairman s StatementFINANCIAL OVERVIEWB usinesses across the globe faced unprecedented operational challenges following the outbreak of the COVID-19 pandemic in early 2020.

6 Countries where YTL Corporation Berhad ( YTL Corp or Company ) and its subsidiaries ( Group or YTL Corp Group ) operate implemented various movement control orders and limited the operation of non-essential , the Group s businesses have been cushioned by its Utilities segment which provides essential services that have continued to operate throughout the control period. The construction and cement segments re-commenced in stages as permitted and operations have normalised, whilst the Group s property and hotels segments have faced slower recovery in light of the effects of pandemic restrictions on the hospitality, retail and property Group recorded revenue of billion for the financial year ended 30 June 2020 compared to billion for the financial year ended 30 June 2019, and profit before taxation of million for the financial year under review, compared to RM1, million last Corp declared a share dividend in respect of the financial year under review comprising a distribution of 1 treasury share for every 30 ordinary shares in the Company held as at the entitlement date of 28 October the Group s key Utilities division, higher revenue in the water and sewerage sub-segment in the United Kingdom (UK)

7 Was primarily due to differing weather conditions leading to changes in supply volumes and partially offset by a price decrease determined by the industry regulator. Lower profit before tax resulted mainly from a higher allowance for impairment of receivables due to the potential impact of the pandemic on customers, as well as the price decrease. However, once such impairments are realised, the UK regulatory regime allows for recovery of these amounts against future merchant multi-utilities sub-segment in Singapore registered lower revenue due to the decrease in fuel oil prices and lower units sold, partially offset by higher sales of fuel oil, whilst the loss before tax narrowed due mainly to the absence of a one-off charge for impairment of receivables recognised last year, as well as lower finance costs and higher retail and tank leasing margins this YEOH SEOK KIANM anaging Director04 YTL CORPORATION BERHADM anaging Director s ReviewIn malaysia , performance of the contracted power generation division remained stable due to supply from Paka Power Station under the current power purchase agreement.

8 Meanwhile, the telecommunications business recorded lower revenue and a higher loss before tax due to lower project revenues Utility division s minority investments, comprising a stake in ElectraNet Pty Ltd, which owns and operates South Australia s electricity transmission network, and an effective interest of 20% in PT Jawa Power, the owner of a 1,220 megawatt coal-fired power station in Indonesia, also continued to perform well for the year under Cement Manufacturing & Trading segment saw an increase in revenue resulting primarily from consolidation of Malayan Cement Berhad, which the Group acquired in mid-2019, whilst the loss before tax was mainly due to a higher allowance for impairment of receivables and higher finance costs related to the Malayan Cement , the Group s Construction segment achieved increases in revenue and profit before tax for the financial year under review on the back of significant progress in construction works, centred mainly on the ongoing Gemas-Johor Bahru electrified rail the Property Investment & Development division, revenue declined due mainly to the deconsolidation of Starhill Global REIT, as well as lower sales recorded in completed projects.

9 The division saw a higher loss before tax due to losses on sales of completed units and qualifying certificate extension fees relating to 3 Orchard By-The-Park, as well as its share of fair value losses on investment properties under Starhill Global financial performance of the Hotel Operations segment was significantly impacted amid the challenging conditions and disruptions caused by the COVID-19 pandemic. Countries where the Group s hospitality businesses are situated instituted varying measures including closure of international borders and restrictions on the size of gatherings which heavily dampened MICE (meetings, incentives, conferences, exhibitions) the Group s Management Services & Others division, revenue decreased mainly as a result of lower investment and interest income caused by declining interest rates in most jurisdictions where the Group operates. Profit before tax increased primarily due to a one-off gain on deconsolidation of Starhill Global Information Technology & e-Commerce Related Business segment saw a decrease in revenue from lower revenue in the content and digital media sub-segment impacted by the ongoing REPORT 2020 Managing Director s ReviewNEW DEVELOPMENTS & GROWTH OPPORTUNITIESThe Group entered into an agreement in March 2020 to acquire the power plant and associated assets of Tuaspring Pte Ltd in Singapore for a total purchase consideration of million.

10 Upon completion, the plant will be integrated into the existing businesses, enabling the Group to consolidate its power generation capacity in Jordan, Attarat Power Company PSC ( APCO ), in which the Group has a 45% stake, continued to progress with construction of its 554 megawatt oil shale-fired power generation project. However, travel and movement restrictions imposed by the Government of Jordan following the outbreak of the pandemic have delayed the project and APCO has invoked force majeure provisions under its power purchase agreement, which remain in effect at the present Group also continued to work towards financial close of its 80%-owned 2x660 megawatt coal-fired power project in Indonesia, which has a 30-year power purchase agreement with Indonesia s state-owned electricity the UK, the Group broke ground on the first development of 278 homes in Brabazon, Bristol, during the year.