Integrated Annual Report 2020

2020 Key Highlights


Group Managing
Director's Review

5-Year Financial

Sustainability Statement

Integrated Annual Report 2020
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2020 Key Highlights

Financial Highlights
RM 1.2 billion
RM 153 million
1.00 sen
0.24 times
RM 4.6 billion
RM 1.04
Business Highlights
RM 32 billion
323 acres
RM 21.7 billion
79% of MRCB's Total GDV
Gender Pay Gap
3.5% between male and female employees
Relief Efforts
to the
RM 1.5 million
to the
RM 1.5 million
Reduction in Health
and Safety Incidents
Average Training
Hours per Employee
CO2 Emissions
19,192 tonnes CO2e



“As global economies were paralysed by the COVID-19 pandemic, it was apparent that 2020 was a test of resilience as companies fought to simply survive. MRCB was not spared from this crisis as Malaysia underwent several phases of the Movement Control Order (MCO), which impacted our construction activities and ability to recognise revenue and profits. While we continued to monitor and address the challenges within our operating environment, the impact of COVID-19 on our business operations and the lives of our people also led us to become more perceptive of the need for people-focused solutions in navigating risks and in charting sustainable value creation.”


2020 was overshadowed by the COVID-19 pandemic that saw many countries imposing some form of lockdown or containment, leading to borders shutting down and major disruptions to the flow of goods and labour. The property development and construction sector met with many setbacks stemming from its dependence on physical labour at project sites and global supply chains. With the Movement Control Order (MCO) and stricter Standard Operating Procedures (SOPs) still being enforced in Malaysia, complete halts and slower construction progress has caused a delay in many projects. Reflecting a wider fall in GDP of -17.1%1, the residential property sector faced drastically lower activity in transaction volume and value, with construction activity also falling significantly. As we strategised how to tackle these new operating challenges, we also had to think of ways to manage the health and safety of our employees on and offsite while minimising disruptions to work, as well as our customers who were now confined by new movement orders.

RM2.1 billion
2019: RM3.2 billion
RM1,199 million
2019: RM1,319 million
RM(153) million
2019: RM53 million
1.00 sen
2019: 1.00 sen

Despite the operational setbacks that have impacted the world over, MRCB accomplished several milestones during the year. I am proud to announce that MRCB has been selected as the only Malaysian representative on the United Nations Global Compact (UNGC) CFO Taskforce which aims to mobilise corporate finance and sustainability commitments. My hope is for this membership to drive industry-wide transformation and demonstrate unparalleled leadership.

Reflecting the Group’s commitment towards responsible and ethical practices, MRCB’s mission statement has been revised with a focus on sustainability: Leading the field sustainably through innovation in property development, engineering and construction. This mission statement is further backed by MRCB’s five key sustainability focus areas, which are explained in detail in our Sustainability Statement on page 142.


At our core, we are an engineering company, and innovation underlies our achievements and continuous progress. The Transit Oriented Development (TOD) concept is still relatively new in Malaysia and few other players occupy this space in the domestic market. Being the pioneer of TOD in Malaysia, we are responsible not only for the development of TODs, but also for driving their potential to be smarter, more sustainable cities through integrated design and planning. Innovation and sustainability are therefore inherent in our business as we continuously look for ways to ensure we build responsibly and for the betterment of the communities around our developments.

A quiet revolution of faster, safer, more reliable and automated building processes is slowly but surely taking place within the industry, and modular construction will have no small part to play in it. Its implementation will transform the way the industry operates and how markets are able to consume. Research and development (R&D) serves a crucial purpose in technological innovation and process optimisation. One result of our R&D efforts is the MRCB Building System (MBS), a proprietary modular technology using our patented Candle-Loc Connection System, enabling up to 90% of construction to be undertaken offsite, away from the construction site. Building offsite from prefabricated components brings multiple benefits to the developer as well as the end consumer. MBS dramatically reduces labour requirements and construction costs and reduces construction build time by up to 50%.

With MBS, less material waste is produced while superior quality and safety standards can be achieved by constructing offsite in a more controlled environment. Cost reduction from the MBS puts homes into the reach of the public and we are optimistic this technology can also become an important enabler of the national affordable home agenda.


Equally important is that modular construction makes it possible for the construction sector to build much cleaner, greener buildings that form the landscape of sustainable cities and communities envisioned by Sustainable Development Goal (SDG) 11: Sustainable Cities and Communities. The construction industry is a carbon intensive industry. The World Economic Forum estimates that the property and construction industry globally accounts for 40% of the world’s total carbon emissions across its entire supply chain. As Malaysia and the rest of the world transition to a low-carbon future, it is imperative that the construction sector follows suit, and MBS will play a major role in our sustainability strategy and our commitment to reduce our carbon emissions.

In the past, we have committed to improving our business operations via our Digitalisation & Automation Roadmap, as well as through our strategy to utilise modular construction. While these plans had been mobilised even before COVID-19 occurred, the pandemic has definitely hastened their implementation. I am proud to announce that our past investments in digitalisation and information technology, particularly cloud infrastructure, helped us mobilise the Group’s Business Continuity Plan for a seamless transition to remote work during the COVID-19 lockdowns. MRCB continues to invest in digitalisation across the Group as a strategy to improve efficiencies and its cost competitiveness.


Companies and their Boards are being held to ever higher standards of corporate conduct. The updated Section 17A of the Malaysian Anti-Corruption (MACC) Act came into effect on 1 June 2020, demanding greater vigilance within organisations to create a culture of integrity, and MRCB continues to conduct awareness exercises to all its stakeholders on the Group’s No-Gift Policy, Whistleblowing Policy and anti-bribery and corruption in general.

Throughout the year, 15 Anti-Bribery Management System workshops were conducted for the remaining 319 employees who did not attend the workshops in 2019. Workshops were also conducted for our suppliers and business partners. We also reached out to 10,734 people from our list of registered suppliers, sub-contractors and business associates in order to spread awareness on our No-Gift Policy, Section 17A of the MACC, as well as to disseminate our Anti-Bribery & Corruption e-book.

Our vendors are required to sign the Vendor Letter of Declaration and Integrity Declaration which states their acceptance of our standards of ethics and behaviours. In 2020, the Group also launched an anti- bribery training and e-learning programme.

The Board’s composition was slightly altered as Encik Jamaludin Zakaria retired on 14 July 2020 having served the Board in his capacity as the Senior Independent Director for 9 years. His retirement from the Board was in line with Practice 4.2 of the Malaysian Code on Corporate Governance (MCCG) that seeks to alleviate stakeholder concerns of long tenures by independent directors. However, on 15 April 2021 we appointed a new Independent Non-Executive Director, Dato’ Wan Kamaruzaman Wan Ahmad, thus maintaining our majority independently- controlled Board.

The annual Board Effectiveness Evaluation was carried out as part of the Directors’ Skill Sets Assessment, designed to map the competencies of Board members against the specific needs of MRCB. This assessment, conducted by a professional third-party body, meets regulatory provisions and emerging, as well as best-in-field practices.

To drive our sustainability agenda, the Sustainability Management Committee (SMC) was set up in 2020. The committee, chaired by the Chief Corporate Officer and composed of key heads of departments, is mandated to champion and embed greater sustainability within MRCB’s operations, through the implementation of a 5-year Sustainability Roadmap.

Of particular importance in 2020 were the implications of COVID-19 on existing governance systems and stakeholder relationships. The pandemic tested the capacity of governance systems to effectively manage and mitigate pandemic-related business and people risks. This has raised new questions about the role of corporate governance in anticipating unexpected and incalculable risks while delivering on shareholder value and protecting stakeholder interests.

The Board and the management team convened frequent meetings to discuss pandemic risks and offer support. As both a cost-sensitive measure and a show of solidarity, employees above a certain grade level, including Board members and Senior Management, voluntarily took a temporary 30% salary cut and reductions and suspensions of certain benefits and allowances.

As a result of our efforts to step up our corporate governance standards, in 2020 MRCB received the ASEAN Asset Class Award for the 2019 ASEAN Corporate Governance Scorecard Assessment.


Value creation at MRCB is aligned towards the “5Ps” that shape the Sustainable Development Goals (People, Planet, Partnership, Prosperity, and Peace) which benefits all our stakeholders in different ways. Innovation and TOD are the drivers of sustainable growth, improving on old ways of doing things and envisioning better ways of living. The central principle of integration within TODs is creating an ecosystem where people enjoy convenience, sprawl is minimised, partners and vendors prosper, the natural and human world coexist peacefully, and everyone benefits. No stakeholder is left behind in our value creation model.

Malaysian Code of Corporate Governance (MCCG) 2017

In 2020, we became a signatory of the United Nations Global Compact (UNGC) reaffirming our commitment to responsible business practices in the areas of human rights, labour, environment, and anti-corruption. These commitments come on the heels of intensifying Environmental, Social and Governance (ESG) demands from investors and lenders, which are giving preference to sustainable companies, and many moving to penalise those that fail to adequately practise sustainability in their operations. Financial risks to the Group are therefore undeniable and we have the responsibility of mitigating this risk.

We are proud to share that we have maintained our standing as a constituent of the FTSE4Good Index, with a 17% higher rating achieved in 2020. We continue to respond to demands from stakeholders for higher levels of transparency in sustainability by developing a 5-year Sustainability Roadmap which sets out progressive yearly baselines for key performance indicators and reduction targets. The roadmap covers pertinent areas such as climate change, eco-efficiency (energy, water, waste), gender equality, biodiversity, sustainability risk and corporate governance, all of which are aligned to the aspirations of the Sustainable Development Goals (SDGs). MRCB is committed to being carbon neutral by 2040 and we are in the process of developing and refining key strategies that will get us there.

I am especially proud of the PEKA@MRCB (Peluang Kedua @MRCB) programme, which gives prisoners/offenders employable skills to enable them to reintegrate back into society and prevent them from reoffending. In its second year, the programme was extended to two new sites in 2020 – LRT3 Casting Yard in Bandar Saujana Putra and the LRT3 Depot in Johan Setia. As of 31 December 2020, a total of 156 inmates have joined PEKA@MRCB since the launch of the programme, which also serves to upskill our local workforce and ease our dependency on foreign labour, which is increasingly becoming unsustainable.

In addition to various community development programmes valued at RM1.5 million, which included providing meal assistance to underprivileged children, MRCB’s corporate social responsibility in 2020 focused on assisting frontliners in response to COVID-19 relief efforts. RM1.5 million was channelled to providing personal protective equipment, hand sanitisers, medical equipment and supplies, food packs and essential groceries to vulnerable communities.


Thank you to all our employees who embody our values every day, in our offices and on project sites, and who have remained steadfast to our vision to Setting the Standard even as we continue to adapt to the new norms of work that have been introduced as a result of COVID-19. I am grateful that you have demonstrated new meaning to our values of being courageous, accountable, driven, creative and customer-centric while we adjust to a new mode of working.

Thank you also to our shareholders, customers, and business partners who have embarked on a journey of trust with us. We will continue in our unwavering efforts to meet your expectations and deliver value.

Our former Senior Independent Director, Encik Jamaludin Zakaria, retired after serving on the Board for 9 years. I am immensely grateful to him for the wisdom he has offered during his tenure which has contributed to the growth of MRCB in the last decade. I wish him the very best in all his future endeavours. While we may have lost a strong leader, we are excited to welcome Dato’ Wan Kamaruzaman Wan Ahmad, who also brings with him a wealth of experience.

My appreciation goes to our Group Managing Director, Encik Mohd Imran Mohamad Salim, and the senior management team for being a pillar of strength in these challenging times. The business continuity measures swiftly taken instil faith in their ability to handle this as well as future crises. Thank you also to the Board of Directors for their support and guidance.

We have a long road to recovery ahead of us, as a company, a sector, and a nation. Let us work together with the Government, regulators, partners, suppliers, our customers and shareholders to create sustainable value. While the COVID-19 pandemic has interrupted growth plans for many including MRCB, rest assured that we are adopting counter-measures to deliver on our promise and purpose.


Group Managing Director


“The unprecedented impacts of the global pandemic continue to disrupt economies and societies. Since early 2020, businesses faced disproportionate risks, affecting human capital, supply chains, productivity and performance. It has been a stress-test for both organisations and leaders in terms of their resilience and ability to not just survive, but also to embark on strategies to enable them to bounce back to robust growth levels in the post-COVID-19 era. Against this backdrop, we conducted a thorough re-assessment of MRCB’s focus areas, immediate priorities and long-term strategies. Our efforts have been channelled towards managing various risks, ramping-up efforts to protect the welfare of our people and sustain the business by leveraging on existing projects and vigorous cost-reduction measures. We remain optimistic that our differentiated orientation in the market and our stakeholders will provide a strong competitive edge as the economy recovers in late 2021 and beyond.”


The year 2020 has been one of the most challenging years in modern history, causing the world economy to shrink by 5.2%1, with many ASEAN economies including Malaysia experiencing sharp contractions. Nevertheless, the current climate has also enabled leaders to reflect on better and more responsible ways of doing business as the operating environment continued to be plagued by uncertainty and delays due to the global COVID-19 pandemic.

The pandemic control measures and supply chain disruptions contributed to a slow-down of the operations and derailed business plans across most industries and sectors. In the hope of alleviating the negative impacts of COVID-19 on the economy, Bank Negara Malaysia slashed the Overnight Policy Rate (OPR) four times in 2020.

323 acres
RM32 billion
RM21.7 billion


The year 2020 has been one of the most challenging years in modern history, causing the world economy to shrink by 5.2%1, with many ASEAN economies including Malaysia experiencing sharp contractions. Nevertheless, the current climate has also enabled leaders to reflect on better and more responsible ways of doing business as the operating environment continued to be plagued by uncertainty and delays due to the global COVID-19 pandemic.

The pandemic control measures and supply chain disruptions contributed to a slowdown of the operations and derailed business plans across most industries and sectors. In the hope of alleviating the negative impacts of COVID-19 on the economy, Bank Negara Malaysia slashed the Overnight Policy Rate (OPR) four times in 2020.

However, due to the inherent labour-intensive nature and supply-chain dependence of the property development and construction industry, the business was adversely and significantly impacted. Despite regulatory measures to cushion the negative impacts, continued movement restrictions and the negative wealth effect caused by rising unemployment and affordability issues arising from the pandemic remained a key deterrent for potential property buyers as they grappled with the uncertainties of COVID-19.

Movement restriction orders had a profound impact on the construction sector in particular. Construction progress on all our projects was severely adversely affected. Productivity levels were significantly compromised due to sporadic periods of complete inactivity, mainly due to strict adherence to Standard Operating Procedures (SOPs) designed to mitigate infection risks at project sites. During Malaysia’s complete lockdown from March to April 2020, the country’s construction industry sustained losses of RM18.5 billion, leading up to an industry-wide contraction of 44.5%2.

Even after Government-issued restrictions were relaxed, we continued to take extra precautions to monitor and mitigate the risk of infection. Testing and containment measures, as well as shutdowns where necessary, are still ongoing for sites that have been affected. Each of these precautions can potentially disrupt work for as long as two weeks at a time. SOPs from the Construction Industry Development Board (CIDB) are continually being adhered to and refined and strengthened as we gain more understanding of the pandemic, and face changes in infection rates and control measures.

The uncertainties weighing on the industry were further compounded by a lack of new mega and catalytic infrastructure projects. Consequently, there were fewer construction tender opportunities. The industry’s high dependence on foreign labour, coupled with the high infection rates amongst these workers and the shutting down of borders resulted in an acute labour shortage. Nevertheless, there has been a silver lining for MRCB. Amid all the challenges, we have been able to accelerate our adoption of relevant technologies and operational strategies that will make our business more resilient in the future.

We have also been pushing forward with our sustainability agenda in the past year. We believe that like many other business challenges, COVID-19 posed both economic and social risks that have proved detrimental to both current and future growth potential. The need for Board and Senior Management interventions towards effective business continuity and recovery plans only reinforced the importance of ESG integration. At MRCB, the importance of shaping a sustainable business will continue to gain momentum in the post-COVID-19 era, where the primary motive will be to map our business outcomes to the UN Sustainable Development Goals (UN SDGs). A sustainable business will be more resilient and more successful in delivering value to all stakeholders in the future.


In the 2020 operating environment, the Group recorded RM1.2 billion in revenue and a loss before tax of RM153 million which was largely impacted by impairment provisions totalling RM177.8 million on the recoverability of contract assets, trade and other receivables from certain completed construction projects impacted by COVID-19. Excluding these provisions, the Group recorded a profit of RM24.9 million.

New launches that were initially planned for 2020 were deferred to 2021 or 2022, redirecting our focus on marketing existing completed unsold stock of RM469 million or unsold units still under construction, which totalled RM383 million as at 31 December 2020.

As expected, dropout rates for sales rose due to the economic toll from the pandemic and the ensuing negative wealth effect. This was underscored by the limited availability of financing as banks approached credit approval with greater caution, leading to many buyers being unable to secure the margin of financing they required.

Sales of our Sentral Suites and TRIA 9 Seputeh residential developments were affected by restricted viewing opportunities, while our St Regis and Sentral Residences units were also impacted by the closure of borders, preventing viewing by their target demographic of international buyers, mainly from Hong Kong and China. On the other hand, our 1060 Carnegie development in Melbourne, Australia, completed in December 2019, began to recognise revenue and profits as the purchases of the completed sold units achieved financial settlement. In 2020, 1060 Carnegie achieved sales of 71% of which 113 units out of the 173 units available for sale were financially settled. While the recognition of revenue and profits for this development contributed significantly to our performance, the speed of reaching financial settlement for the units sold was affected by multiple lengthy lockdowns in the State of Victoria, Australia in the second half of the year.

“The Group will continue to closely monitor conditions in the broader economy and property market, revising its strategies and financial targets accordingly, including reviewing its future launches if conditions dictate.”

As a counter-measure to the movement restrictions, we repurposed our marketing budget into rebates and assistance packages. Digitalisation of our sales and marketing collaterals were also implemented in full force, and featured online and new media campaigns that leveraged on live webinars and virtual viewings for an interactive and engaging experience. In 2020, there were 1,044 virtual viewings of our 1060 Carnegie project since the launch of its virtual sales gallery on 14 July 2020. We also continued to engage with our other various stakeholders, managing to reach over 13,000 stakeholders via digital platforms as well as through controlled physical meetings.

The complete halt of activities at our construction sites during the MCO and the slower pace of the resumption of work due to the strict movement SOPs impacted construction progress in our Engineering, Construction & Environment Division considerably. Completion of the Damansara-Shah Alam Elevated Expressway (DASH) and Sungai Besi- Ulu Kelang Elevated Expressway (SUKE) projects have been deferred to the second quarter of 2021 from the original target in the second quarter of 2020, while construction of the MRT2 package awarded to MRCB and the 37 km LRT3 line awarded to the 50% owned joint venture company MRCB George Kent Sdn Bhd, are on track to reach completion in 2021 and 2024 respectively. As at the end of December 2020, DASH and SUKE reached 88% and 51% completion, while the MRT2 package and the LRT3 projects were 81% and 46% complete respectively. At the beginning of 2020 our major property development projects were entering 25% construction progress levels, a period after which we would expect to recognise greater revenue and profits. Indeed, we did recognise more revenue and profit in the first quarter of 2020 in our Property Development & Investment Division, compared to the corresponding period in 2019, before lockdowns occurred and hampered construction progress, which impacted the pace of our revenue and profit recognition thereafter.

One noteworthy area of development for the business in 2020, however, was the streamlining and refreshing of MRCB’s mid-term strategy to better plan for value creation. The updated strategy articulates four growth principles matched to seven key action plans, enabled by four critical catalysts that are underpinned by our sustainability framework. The four growth principles that will be at the front and centre of our value creation journey are: Strengthen Core for Sustainable Returns; Diversification & Operational Expansion; Technology Adoption & Innovation; and Quality Products and People. These principles are closely mapped to various capital inputs and key risks, as well as our material matters. Their interrelationships are defined in our Value Creating Business Model on page 30 of this report.

Overall, the Group believes the outlook for the economy will remain challenging for the foreseeable future and has embarked on austerity and cost cutting measures. The Group’s immediate priorities remain on enhancing cashflow by monetising its inventory of unsold completed stock and focusing on its projects in hand. The Group will continue to closely monitor conditions in the broader economy and property market, revising its strategies and financial targets accordingly, including reviewing its future launches if conditions dictate.


The challenges faced in 2020 highlighted the property development and construction industries’ vulnerability, reminding us that technological infrastructure is necessary for business resilience, and innovation is necessary for adapting to constant changes, especially given the current market conditions.

Technology Adoption & Innovation as one of our growth principles will be the driving force for breakthroughs in operational efficiency and changemaking, particularly in the current operating environment where agility is key to resilience. The ability of businesses to respond fast and bounce back faster to pre-pandemic levels will determine their future. For instance, at MRCB, the transition to remote working arrangements and programmes was seamless, mainly due to our existing systems and early investments in IT and cloud capabilities. During the year, we strengthened our digital security protocols further, which helped us to maintain head office productivity at optimum levels.

Our proprietary modular construction technology, MRCB Building System (MBS) gained new impetus during the pandemic. As at 31 December 2020, MBS had been licensed to two international companies overseas for selected projects: a 19-storey Students’ Residence Project and temporary Quarantine Facility in Hong Kong, and a 12-storey Nursing Home and Senior Care Centre in Singapore. Similarly, in Malaysia, we are currently deploying MBS solutions to rapidly build 35 classrooms for 5 schools under an agreement with the Ministry of Education. Our bespoke technology will also give rise to developments with a strong social leaning, setting the groundwork for more sustainable value creation.

I believe that more of our investments in R&D will crystallise into innovations that will maintain our market position and relevancy. Technology adoption and innovation enable us to bring our purpose to market as leaders of the field, setting the standard with cutting edge R&D outcomes that will create sustainable returns for our stakeholders.


Behind widespread technological adoption are the people that drive it. By 2025, 85 million jobs worldwide are expected to be made redundant by automation3, but even more new roles will arise. Fundamentally, a skilled workforce underlies our growth principle of Quality Products and People. Mass implementation of the MBS and other innovations at MRCB requires facilitating the transition of not only a changing operational model, but also the workforce model. Upskilling and reskilling programmes at MRCB are designed to address gaps in technological competencies, at the same time offering new learning and professional development opportunities to our employees.

During the year, technology-driven talent assessments were completed for the top 20% positions and ongoing succession planning is also being carried out. In 2020, the Group addressed gaps in leadership skills through learning and development programmes with external learning institutions. However, this initiative was disrupted due to the movement restrictions and will be a key focus in 2021.

For people-centric businesses comprising a large workforce such as our own, COVID-19 also brings new meaning to our approach to health, safety and environment (HSE) matters. Health and safety in the construction industry is very challenging, particularly due to the high dependence on foreign workers, where communication issues can arise. Despite this, we are committed to improving our onsite safety standards and will continue to provide relevant trainings and enforce policies to ensure the safety, health, and welfare of our workers and the public in general. Our people’s ability to undertake their responsibilities in a safe and secure environment continues to be a top priority, as it should be, with or without the pandemic. For instance, despite a Group-wide cost optimisation drive, our priority was to ensure our employees’ welfare. A deliberate decision was made to maintain employees’ salaries so that the financial impact from COVID-19 on working-level employees was kept to a minimum. The Senior Management across the board voluntarily took a 30% reduction in their basic salaries to demonstrate leadership in times of crisis. We also offered mental health support to employees who were negatively affected by the pandemic or have been experiencing anxiety from the isolation of remote working, through counselling sessions conducted by mental health professionals.

COVID-19 primarily is a people risk, and we took all the necessary precautions to safeguard ourselves against this risk by protecting the welfare of our employees. The silver lining is, these precautions involved an unprecedented change in our people processes which served to strengthen our approach to ESG management.


By 2050, 68% of human populations will be living in cities4. The future cityscape will inevitably evolve to be denser with diverse segments of society requiring different needs in the same crowded space. Competition for space will create a demand for creative solutions such as aged care and co-living options. Concepts like transit hubs optimised for pedestrian traffic, and ease of access to mass public transportation, such as those offered by our existing TODs, are putting sustainable development on the agenda.

The confluence of these demands will open up new markets and revenue potentials for MRCB’s Diversification & Operational Expansion strategy, one of our Group’s four growth principles. Wary of concentration risk, our strategy is to expand further in the Australasian market where we have gained early success, and diversify away from the Malaysian market. Within Malaysia, we are exploring the industrial, SOHO, and co-living niches as well.

In line with our commitment to sustainable development, we have also partnered with a leading European technology partner to penetrate the high-potential waste-to-energy market. Valued at US$35.1 billion globally, the waste-to-energy market is expected to grow at a rate of 4.6% from 2020 to reach US$50.1 billion in 20275. The problem of waste is a persistent environmental issue whose challenges and opportunities are only growing in number with the speed of consumption. Our waste-to-energy foray is in the advanced stage of negotiations at the Government level. Meanwhile, we are also actively pursuing a venture into the logistics/industrial property segment with Fortune 500 multinational corporations.


As at the end of 2020, we had RM1.0 billion in property unbilled sales, with an external client construction order book of RM21.7 billion. Revenue was recorded at RM1.2 billion compared to RM1.3 billion in 2019, while loss before tax was recorded at RM153 million, a decline from RM53 million profit before tax recorded in 2019. The decline was largely due to impairments of RM177.8 million provided in the second quarter of 2020 on the recoverability of contract assets, trade and other receivables mostly from certain completed construction projects impacted by the pandemic. The decline was further amplified by the gain before tax of RM58.8 million from the disposal of the Group’s entire 30% equity interest in One IFC Sdn Bhd recorded in the second quarter of 2019. However, excluding these impairments in 2020 and the disposal gains in 2019, core profit before tax in 2020 was higher at RM24.9 million.

A notable highlight of the year was our RM5 billion Sukuk Murabahah programme, of which the first tranche totalling RM600 million was issued on 14 August 2020, to be channelled towards general working capital, capital expenditure, and other general corporate purposes. Proceeds will also be used to retire the Group’s most expensive borrowings and improve cashflow. This Sukuk programme was a result of our earlier decision to refinance debt, to reduce our reliance on banks for capital, and to take advantage of a low interest rate environment.

Our balance sheet remains strong with a net gearing of 0.24 times. In light of the revenue uncertainties in 2020, we examined our cashflow and stress tested the business, simulating the financial impact to the business based on various revenue outcomes and identifying areas where non- essential costs could be reduced, including downsizing office space and capitalising from the efficiencies derived from our investment in automation.

In prior years we have discussed our plans to optimise our business, and 2020 was already earmarked for an organisational right-sizing exercise, well before the world was struck by the pandemic. Our Digitalisation & Automation strategy that we embarked on in previous years resulted in increased automation of processes. In total, we managed to implement annualised cost-savings across the Group from various initiatives totalling almost RM30 million. The pandemic has provided additional catalysts for further cost restructuring efforts and our journey of automation will continue into 2021, with the roll-out of our Enterprise Resource Planning (ERP) system that will allow for increased collaboration and more streamlined, coherent workflows and processes.


Our role as an urban developer places us at an important nexus between development and sustainability. In late 2020, we assumed an important position whereby MRCB became the only Malaysian company and the first in ASEAN to join 34 other global companies in the UNGC CFO Taskforce for the Sustainability Development Goals. This means that our Chief Corporate Officer will actively participate in the various working groups, comprising members from global companies. The objective is to support the two-year programme to implement the CFO Principles on Integrated SDG Investments and Finance, and to leverage experience and learnings of its members to achieve MRCB’s sustainability milestones.

In 2020, we also conducted a benchmarking exercise to determine the sustainability areas that were growing in importance in the property and construction industry. As issues concerning climate change, human rights and biodiversity were becoming more prevalent, we have added these three issues to our material matters.

Direct and indirect climate risks have potentially large impacts on our business and operations. Events such as droughts and water security will affect where we build and how we build. The property and construction industry is a significant source of carbon emissions, contributing nearly 40% of world emissions6. Cognisant of our own contribution, we are taking steps to measure our carbon footprint and set reduction targets.

Biodiversity is critical to ensure a continuous supply of natural capital from which we draw raw materials. With a 323 acre of strategic urban land bank under our management, we are tasked to responsibly earmark these areas for economic development, while striking a balance with the existing biodiversity and sociocultural identity of the surrounding communities. During the year, in addition to developing a statement on climate change and biodiversity, MRCB has also re-articulated its position on human rights for our business.

While the economic and regulatory environment are beyond our control, we can work within our operational boundaries to scale positive impact. Our industry has the opportunity to make a significant sustainable impact on communities and the environment through sustainable construction and procurement. Mitigation of sustainability material matters such as climate change and human rights can be achieved by adopting green building efficiencies and responsible supply chain practices. Towards this end, we are working with the Ministry of Environment and Water on the Plastic Disclosure Project and the United Nations Global Compact Malaysia’s sustainable procurement initiative.

SDG 17: Partnership for the Goals, is important for holistic value creation. Stakeholder engagement with a cross-section of society – Government and regulators, investors, industry players, NGOs – help us understand and collaborate on a common purpose towards the SDGs. In addition to educating our employees on their role in the wider sustainability agenda at MRCB, we will eventually educate external stakeholders on our sustainability goals to ensure our entire value chain acts in-step with our goals. This involves the development of an environmental and social criteria checklist for vendors as well as supply audits, starting with the biggest suppliers covering the majority of our procurement and supply chain.

COVID-19 has led many leaders to rethink their business models and their relationships with stakeholders. MRCB’s TOD model sustains the business commercially. In reducing sprawl and travel distances, TOD also creates value for our social and relationship capital as well as natural capital. It remains the central positioning that we will actively pursue in favour of our growth principle to Strengthen Core for Sustainable Returns.


COVID-19 has been an eye-opener to the many risks that were otherwise uncharted and unexpected. For the property development and construction industries, the pandemic has offered businesses a glimpse into a future of opportunities that are ripe for the taking when we emerge from this crisis.

The need for integrated living will become increasingly in-demand – where work and play take place within range of each other, where long-distance travel is not required, where public health considerations inform design elements and green architecture is preferred. Within this broad concept of integrated living will be many niche markets with unmet needs – aged care, micro housing, multi-use design, among others. I am confident that beyond this storm awaits a healthier, more wholesome future and MRCB is uniquely positioned to lead it with our longstanding expertise in TOD.

On this journey forward, I am grateful to our Chairman and the Board of Directors for their ever-present guidance. To Encik Jamaludin Zakaria, our former Senior Independent Director who has left MRCB after a long and illustrious tenure, your valued insights will be missed, and I wish you many successes in the future. I would also like to take this opportunity to welcome our new Independent Non-Executive Director, Dato’ Wan Kamaruzaman Wan Ahmad. I look forward to working with you.

As always, my appreciation goes to all my colleagues at MRCB for their support and commitment to our values. Let us welcome 2021 with renewed faith and vigour.

Group Managing Director

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5-Year Financial Highlights

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(RM million)

Menara Shell is one of MRCB’s premier green building projects awarded with the US LEED Platinum and Singapore’s BCA Green Mark Gold certifications
The Alstonia Hilltop Homes development designed according to the natural contours of an exclusive enclave of Bukit Rahman Putra in Selangor

Sustainability Statement


As one of Malaysia’s leading urban property and infrastructure developers, Malaysian Resources Corporation Berhad (MRCB or the Group) recognises its responsibility in building the nation’s economy, delivering added value to society by practising and promoting sustainable business practices. MRCB has progressively translated its vision for sustainable growth into initiatives that are embedded in the business’ strategy.

During this reporting period, we have had the opportunity to assess our performance and re- focus our efforts on achieving business growth and success using the lens of sustainability. We strive to strengthen our position and reputation in the industry through these efforts, and continue to adapt to the changing social, environmental, and economic conditions.

By incorporating sustainability throughout our value chain and executing our business strategy, we believe we can make a positive impact on our community and the environment.


This statement comprises the domestic operations of MRCB Group including its Property Development & Investment (MRCB Land), Engineering, Construction & Environment (MRCB Builders) and Facilities Management & Parking divisions, which consist of subsidiaries that MRCB has direct control of and in which the Group holds a majority stake.


The reporting cycle is on an annual basis, and the period covered in this report is from 1 January to 31 December 2020. Where possible, information from previous years has been included to provide comparative data. The report also provides additional disclosures to comply with the specific requirements of the Global Reporting Initiative (GRI) Sustainability Standards: Core option. Our most recent report is MRCB Sustainability Report 2019 published in May 2020.


This statement has been prepared in accordance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities) and with reference to the Sustainability Reporting Guide issued by Bursa Securities. The framework of the statement, on the other hand, is in line with the reporting standards of the Global Reporting Initiative (GRI).

Integrated Annual Report 2020
Download full PDF report here:

Strategic Review

Operating Context


The Economy

The world economy faced its greatest setback in 2020 since the Great Depression. Many economies were in a lockdown to contain the COVID-19 pandemic. This plunged a majority of countries into a recession – the broadest economic collapse in modern history1. Overall, the world economy experienced a sharp contraction of 5.2%2.

Malaysia was not spared from the economic downturn. In 2020, the Malaysian economy dropped by 5.6% year-on-year3, reflecting the stringent measures taken to contain the outbreak. The nationwide Movement Control Order (MCO) restricted production and consumption activities. This created a shock in supply and demand that rippled across many economic sectors. Malaysia’s main growth driver, private consumption, fell by 3.4% in 2020. Likewise, public investment dropped 19.8% and private investment declined by 7.0%3.

The second quarter of 2020 experienced the sharpest decline in GDP by -17.1%4. This is lower than the contraction experienced during the throes of the 1997-1999 Asian financial crisis. As a response, the Government announced monetary and fiscal policies that aimed to rejuvenate the national economy. Bank Negara Malaysia (BNM) cut the OPR to 1.75% – the lowest level on record. Stimulus packages such as PRIHATIN and PENJANA were also provided to ease the financial burden of Malaysians.

Alleviated by these measures, the economic contraction eased to -2.7% in the third quarter, although overall stagnation remained until the end of 2020, registering an overall 5.6% decline for the entire year.

Property Sector

The property market was greatly impacted by the economic downturn. During the MCO, real estate activities were halted alongside property viewings. This resulted in stiff competition from new launches due to a high number of unsold units and low buyer interest. There was a rise in the number of active properties on the market, with reserve prices falling 30% below the last traded price for similar properties5. Additionally, the secondary residential market experienced soft asking prices and rental rates, more so for newly developed units. There has been a decline in property asking prices across Malaysia’s major residential markets:

Our priority has always been business sustainability and creating meaningful value for our shareholders and stakeholders. MRCB’s Growth Strategy (our Strategy) was developed with this in mind, and will guide us in becoming a responsible leader in the industries we operate in. Our Strategy outlines four (4) Growth Principles, which are driven by seven (7) Key Action Plans.

These principles and action plans will be carried out by our talented workforce, who are guided by strong core values and good corporate governance, in order to conduct our operations in an ethical and professional manner. We also believe that leveraging on technology will push MRCB to become a cost-efficient and future-proof business. Our Digitalisation & Automation Roadmap drives this initiative.

Sustainability permeates through our entire organisation and underpins all our actions, going beyond ensuring sustained returns to capture the responsible use of natural resources. We believe that our Strategy, underpinned by our robust Sustainability Framework, will not only widen the gap between MRCB and its competitors to gain sustainable returns, but also create solutions to meet the market’s existing and future needs.

We have mapped our Growth Principles to the related Capitals and Material Matters. More context on the objectives of our Key Action Plans are included below. Key Indicators are used to measure the value created and outcomes for each Growth Principle and Key Action Plan, alongside the key initiatives implemented to achieve the outcomes. Lastly, our priorities in 2021 are based on our Strategy and performance in the current business environment.

Key Action Plan
To secure and develop urban land, and tender for construction projects with relatively higher pre-qualification requirements and barriers to entry, with a focus on infrastructure
Key Indicators
  • Revenue
  • PBT
  • Finance cost
2020 Key Initiatives
  • Continued to tender for infrastructure projects
  • Continued to monetise RM2.7 billion GDV of ongoing property development projects and RM6.8 billion worth of ongoing infrastructure projects
  • Increased digital marketing of property development projects to counter the negative impact of COVID-19
2020 Achievements
  • Submitted tenders worth RM734.8 million
  • External client construction order book of RM21.7 billion, which will provide revenues beyond 2030
  • Achieved RM201.2 million property sales
  • Held 1,044 virtual viewings of 1060 Carnegie since the launch of the virtual sales gallery on 14 July 2020
  • Launched 80 landed units at the Amaryllis development in Bandar Seri Iskandar with a GDV of RM15.3 million on 18 August 2020
  • Net Gearing remains within healthy levels at 0.24 times
  • Reduced the Group’s overall borrowing costs and improved cash flow through the issuance of a RM600 million perpetual Sukuk Murabahah

2021 Priorities

MRCB will continue to aggressively market its completed stock, which is valued at RM468.8 million, as well as continue to tender for engineering projects with relatively higher pre-qualification requirements and barriers to entry, such as infrastructure projects and building structures with higher mechanical and electrical content. We will also continue to focus on completing our existing projects to make up for the revenue shortfall experienced in 2020 as a result of the COVID-19 pandemic.

Link to:

Material Matters:

Financial Review

5-Year Group Financial Highlights

Simplified Statement Of Financial Position

Group Segmental Financial Performance

Group Quarterly Financial Performance

Statement of Value Added

This Statement of Value Added illustrates how MRCB’s performance supports its ability to deliver financial value to its stakeholders.

It shows the total wealth we created and how it was distributed, taking into account how much was retained and reinvested in the Group for future growth.