TALIWORKS CORPORATION BERHAD

(Company No 196501000264 (6052-V))

(Incorporated in Malaysia)

INTERIM FINANCIAL REPORT ON CONSOLIDATED RESULTS

FOR THE FINANCIAL QUARTER ENDED 31 DECEMBER 2023
(UNAUDITED)

CONTENTS

KEY FINANCIAL HIGHLIGHTS 1

CONDENSED STATEMENTS OF FINANCIAL POSITION 2 -3

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME 4-5

CONDENSED STATEMENTS OF CHANGES IN EQUITY 6-7

CONDENSED STATEMENTS OF CASH FLOWS 8-9

PART A – DISCLOSURES PURSUANT TO MFRS 134: INTERIM FINANCIAL 10 – 15

REPORTING

PART B – DISCLOSURES PURSUANT TO PART A OF APPENDIX 9B OF THE 16 – 30

LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD

This Report is authorised by the Board for public release on 27 February 2024
 KEY FINANCIAL HIGHLIGHTS

12 months ended 31 Dec Variance

(in RM’000 unless specified otherwise) 2023 2022 (%)
unaudited audited #
Revenue 374,704 337,712 ↑ 11
Gross profit 124,513 136,886 ↓ 9
Profit before taxation (“PBT”) 67,066 81,874 ↓ 18
Profit for the year 49,453 66,430 ↓ 26
Earnings per share (“EPS”) (sen) 2.08 2.74 ↓ 24
Dividends per share (sen) 5.95 6.60 ↓ 10

# approximate, to the nearest digit

• The Group achieved a revenue of RM374.70 million, an 11% increase or RM36.99 million compared to the
corresponding year revenue of RM337.71 million. This notable increase was attributable to higher
contribution from all operating subsidiaries, except from the toll highway segment.

• The increase in revenue in the water treatment and supply segment was primarily attributed to the increase
in electricity rebates in the Sungai Selangor Water Treatment Plant Phase 1 (“SSP1”) operations. The higher
electricity rebate is due to an increase in the Imbalance Cost Pass-Through (“ICPT”) surcharge imposed by
Tenaga Nasional Berhad (“TNB”) from RM0.037/kWh to RM0.20/kWh effective from 1 January 2023 to 30
June 2023. As of 1 July 2023, the ICPT surcharge was reduced from RM0.20/kWh to RM0.037/kWh. As a
comparison, the ICPT for the corresponding year was RM0.037/kWh. Despite the increase in the Bulk Water
Supply Rate from RM0.41/m3 to RM0.42/m3 on 1 January 2023 (“BWSR Increase”) as provided under the
Bulk Water Supply Agreement with Pengurusan Air Selangor Sdn. Bhd. (“Air Selangor”), revenue from
metered sales was lower due to a reduction in the metered sales by 2.8% in the current financial year.

• The growth in the revenue of the Group was also contributed by construction segment in tandem with the
improving progress from ongoing projects as well as from the renewable energy segment from higher sales
of electricity generated by the solar photovoltaic plants for a period of twelve (12) months compared to about
nine (9) months in the corresponding year as the acquisition of the solar renewable energy project was only
completed in April 2022. The lower contribution from the toll segment was primarily due to a government
compensation amounting to RM11.25 million in respect of a non-increase in scheduled toll hike in 2020
received from the Government of Malaysia by Grand Saga Sdn. Bhd. (“Grand Saga”) in the previous year.

• Despite the higher revenue, the Group reported a 9% decrease in gross profit or by RM12.37 million, mainly
due to higher repair and maintenance and the recognition of the government compensation in the previous
year.

• In line with the lower gross profit, PBT was also lower at RM67.07 million compared to RM81.87 million
in the corresponding year. Contributing to this reduction include lower net returns from interest income,
dividend and net gain on redemption from investments designated at fair value through profit or loss
(“FVTPL”) and lower share of profits from a jointly controlled entity in the current year. However, the lower
PBT was mitigated by amongst others, lower share of losses of associates, a one-off gain from the disposal
of an investment property, net reversal of provision for loss allowance on receivables and amount due from
contract customers, net gain on foreign exchange and an increase in the fair value gain in the current year.

• Profit for the year experienced a drop by RM16.98 million or 26%, primarily from a higher tax expense in
the current year due to overprovision of net deferred tax asset in the prior year.

• EPS decreased by 24%, reflecting lower profit attributable to shareholders of the Company.

• The Board is pleased to declare a fourth interim single-tier dividend of 1.0 sen per share amounting to RM20.2
million in respect of the financial year ended 31 December 2023 to be payable on 29 March 2024.

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 CONDENSED STATEMENTS OF FINANCIAL POSITION
31 Dec 2023 31 Dec 2022
RM’000 RM’000
Note (Unaudited) (Audited)
ASSETS
Property, plant and equipment 121,072 132,047
Right-of-use assets 31,967 35,750
Investment properties 96 99
Intangible assets 959,439 988,040
Investment in joint venture 71,410 73,783
Investment in associates 107,668 129,343
Other investment 200 200
Goodwill on consolidation 132,503 132,503
Long-term other receivable 13,423 15,561
Deferred tax assets 6,373 6,228
Deposits, cash and bank balances B13 45,924 47,517
Total Non-Current Assets 1,490,075 1,561,071

Inventories 39,023 20,914

Trade receivables 65,905 74,758
Other receivables, deposits and prepayments 18,589 17,924
Tax recoverable 1,008 9,355
Investments designated at fair value through profit or loss B13 50,846 120,740
Deposits, cash and bank balances B13 82,478 48,854
257,849 292,545
Assets held-for-sale B12 - 694
Total Current Assets 257,849 293,239
TOTAL ASSETS 1,747,924 1,854,310

EQUITY AND LIABILITIES

Share capital 438,354 438,354
Merger deficit (71,500) (71,500)
Currency translation reserve (615) (217)
Retained earnings 329,673 420,755
Total Equity Attributable to Owners of the Company 695,912 787,392
Non-controlling interests 267,950 260,459
Total Equity 963,862 1,047,851
LIABILITIES
Long-term borrowings B7 269,215 298,907
Lease liabilities 30,548 33,391
Long-term trade payables 1,629 1,050
Provisions 39,745 34,253
Deferred income 52,401 63,278
Deferred tax liabilities 237,671 248,139
Total Non-Current Liabilities 631,209 679,018

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 CONDENSED STATEMENTS OF FINANCIAL POSITION

31 Dec 2023 31 Dec 2022

RM’000 RM’000
Note (Unaudited) (Audited)
LIABILITIES
Trade payables 28,033 23,882
Amount due to contract customers 35,923 13,772
Other payables and accruals 34,333 37,176
Provisions 8 93
Short-term borrowings B7 35,000 30,000
Lease liabilities 2,943 2,738
Deferred income 13,989 14,389
Tax liabilities 2,624 5,391
Total Current Liabilities 152,853 127,441
TOTAL LIABILITIES 784,062 806,459
TOTAL EQUITY AND LIABILITIES 1,747,924 1,854,310

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 CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

3 Months ended 12 Months ended

31 Dec 31 Dec
Note 2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
unaudited audited unaudited audited

Revenue A4, B1 101,409 85,855 374,704 337,712

Cost of operations (70,431) (45,606) (250,191) (200,826)
Gross profit 30,978 40,249 124,513 136,886
Other operating income 3,072 6,060 11,863 13,648
Administrative and other expenses (9,519) (10,095) (36,510) (33,905)
Operating profit 24,531 36,214 99,866 116,629
Finance costs (4,394) (4,457) (17,491) (17,975)
Share of results of joint venture 460 4,462 5,502 6,182
Share of results of associates (5,966) (11,170) (20,811) (22,962)
Profit before tax B4 14,631 25,049 67,066 81,874
Income tax expense B5 (5,325) 2,124 (17,613) (15,444)
Profit for the financial
period/year 9,306 27,173 49,453 66,430

Other comprehensive income

Items that may be reclassified
subsequently to profit or
loss:
Currency translation
differences 157 157 (398) (217)

Total comprehensive income

for the financial period/year 9,463 27,330 49,055 66,213

Profit for the financial

period/year attributable to:
Owners of the Company 6,558 21,001 41,962 55,140
Non-controlling interests 2,748 6,172 7,491 11,290
9,306 27,173 49,453 66,430

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 CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

3 Months ended 12 Months ended

31 Dec 31 Dec
Note 2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
unaudited audited unaudited audited

Total comprehensive income for

the financial period/year
attributable to:
Owners of the Company 6,715 21,158 41,564 54,923
Non-controlling interests 2,748 6,172 7,491 11,290
9,463 27,330 49,055 66,213

Basic and diluted earnings per

share attributable to owners
of the Company
(sen per share) B10 0.32 1.05 2.08 2.74

The Condensed Statements of Comprehensive Income should be read in conjunction with the audited financial
statements for the year ended 31 December 2022 and the accompanying significant events and transactions
attached to these interim financial statements.

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 CONDENSED STATEMENTS OF CHANGES IN EQUITY

Attributable to Owners of the Company

Currency Non-
Share Merger translation Retained controlling Total
Note capital deficit reserve earnings Total interests Equity
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

As of 1 January 2023 438,354 (71,500) (217) 420,755 787,392 260,459 1,047,851

Profit for the year - - - 41,962 41,962 7,491 49,453

Other Comprehensive Income:
Currency translation differences - - (398) - (398) - (398)

Total comprehensive income for the year - - (398) 41,962 41,564 7,491 49,055

Transactions with Owners of the Company:

Dividends paid A7 - - - (133,044) (133,044) - (133,044)

Total transactions with Owners of the Company - - - (133,044) (133,044) - (133,044)

As of 31 Dec 2023 (unaudited) 438,354 (71,500) (615) 329,673 695,912 267,950 963,862

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 CONDENSED STATEMENTS OF CHANGES IN EQUITY

Attributable to Owners of the Company

Currency Non-
Share Merger translation Retained controlling Total
Note capital deficit reserve earnings Total interests Equity
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

As of 1 January 2022 438,354 (71,500) - 537,949 904,803 252,646 1,157,449

Profit for the year - - - 55,140 55,140 11,290 66,430

Other Comprehensive Income:
Currency translation differences - - (217) - (217) - (217)

Total comprehensive income for the year - - (217) 55,140 54,923 11,290 66,213

Transactions with owners of the Company:

Dividends paid - - - (133,044) (133,044) - (133,044)
Dividends paid by a subsidiary to non-controlling interest - - - - - (3,430) (3,430)
Non-controlling interest arising from business combination - - - - - (2,081) (2,081)
Changes in ownership interests in subsidiaries - - - (39,290) (39,290) - (39,290)
Reduction in non-controlling interest arising from
increase in stake in subsidiaries - - - - - 2,034 2,034

Total transactions with owners of the Company - - - (172,334) (172,334) (3,477) (175,811)

As of 31 Dec 2022 (audited) 438,354 (71,500) (217) 420,755 787,392 260,459 1,047,851

The Condensed Statements of Changes in Equity should be read in conjunction with the audited financial statements for the year ended 31 December 2022 and the
accompanying significant events and transactions attached to these interim financial statements.

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 CONDENSED STATEMENTS OF CASH FLOWS

12 Months 12 Months
ended ended
31 Dec 2023 31 Dec 2022
RM’000 RM’000
unaudited audited

CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES

Profit before tax 67,066 81,874
Adjustments for:
Non-cash items 46,860 42,416
Interest income (2,391) (2,258)
Finance costs 17,491 17,975
Operating Profit Before Working Capital Changes 129,026 140,007
Net decrease/(increase) in inventories, amount due from contract customers,
trade and other receivables 16,017 (23,529)
Net increase/(decrease) in trade and other payables, provisions and deferred
income 7,571 (5,877)
Cash Generated From Operations 152,614 110,601
Income tax paid (26,506) (23,948)
Income tax refunded 3,993 40
Net Cash From Operating Activities 130,101 86,693

CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES

Interest received 1,885 2,028
Property, plant and equipment:
- Proceeds from disposal 64 263
- Purchases (2,329) (3,683)
Dividend received from an associate 864 817
Dividend received from a joint venture 7,875 -
Investments designated at FVTPL:
- Purchase (35,124) (161,172)
- Proceeds from redemption 105,724 388,705
- Dividend income 2,321 2,107
Payment for acquisition of non-controlling interests - (37,256)
Net cash inflow from acquisition of subsidiaries - 32,588
Withdrawals of deposits pledged as security 1,603 989
Proceeds from assets-held-for-sale - 240
Proceeds from disposal of other investments - 34
Net Cash From Investing Activities 82,883 225,660

CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES

Interest paid (18,180) (18,471)
Drawdown of borrowings 5,000 -
Repayment of borrowings (30,075) (42,121)
Repayment of previous shareholder’ loans owing by subsidiaries - (125,614)
Repayment of lease liabilities (2,658) (3,054)
Dividends paid (Note A7) (133,044) (133,044)
Dividends paid by a subsidiary to non-controlling interests - (3,430)
Net Cash Used In Financing Activities (178,957) (325,734)

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 CONDENSED STATEMENTS OF CASH FLOWS

12 Months 12 Months
ended ended
31 Dec 2023 31 Dec 2022
RM’000 RM’000
unaudited audited

NET INCREASE IN CASH AND CASH EQUIVALENTS 34,027 (13,381)

Effect of Exchange Rate Changes (403) 7

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF

FINANCIAL YEAR 48,854 62,228
CASH AND CASH EQUIVALENTS AT THE END OF FINANCIAL
YEAR 82,478 48,854

Cash and cash equivalents comprised the following amounts in the statements
of financial position:
Deposits with licensed banks 106,511 81,823
Cash and bank balances 21,891 14,548
Total deposits, cash and bank balances 128,402 96,371
Less: Deposits pledged as security (45,924) (47,517)
82,478 48,854

The Condensed Statements of Cash Flows should be read in conjunction with the audited financial statements for
the year ended 31 December 2022 and the accompanying significant events and transactions attached to these
interim financial statements.

-9-
 PART A – DISCLOSURES PURSUANT TO MFRS 134: INTERIM FINANCIAL REPORTING
A1 – Basis of Preparation
These interim financial statements are unaudited and have been prepared in accordance with the
requirements of MFRS134: Interim Financial Reporting issued by the Malaysian Accounting Standards
Board, Paragraph 9.22 of the Main Board Listing Requirements of Bursa Malaysia Securities Berhad
(“Bursa Securities”) and guidance communication notes issued by Bursa Securities.
These interim financial statements should be read in conjunction with the latest audited financial
statements of the Company and its subsidiaries (“Group”) for the financial year ended 31 December
2022 (“Audited Financial Statements”). The selected explanatory notes attached to these interim
financial statements provide an explanation of events and transactions that are significant to an
understanding of the changes in the financial position and performance of the Group since the previous
financial year.
The significant accounting policies and methods of computation adopted by the Group in these interim
financial statements are consistent with those adopted in the Audited Financial Statements, except for
the following: -

(i) Adoption of amendments to Malaysian Financial Reporting Standards (“MFRSs”)

In the current financial year, the Group adopted all the amendments to MFRSs issued by the Malaysian
Accounting Standards Board that are effective for annual financial years beginning on or after 1 January
2023.

MFRS 17 Insurance Contracts

Amendments to MFRS 17 Insurance Contracts
Amendments to MFRS 17 Initial Application of MFRS 17 and MFRS 9-Comparative
Information
Amendments to MFRS 108 Definition of Accounting Estimates
Amendments to MFRS 101 Disclosure of Accounting Policies
Amendments to MFRS 101 Classification of Liabilities as Current or Non-Current
Amendments to MFRS 112 Deferred Tax related to Assets and Liabilities arising from a Single
Transaction
Amendments to MFRS 112 International Tax Reform-Pillar Two Model Rules - Application of
the exception and disclosure of that fact
Amendments to MFRS 112 International Tax Reform-Pillar Two Model Rules - other disclosure
requirements

The adoption of these amendments to MFRSs did not result in significant changes in the accounting
policies of the Group and had no significant effect on the financial performance or position of the Group.
New MFRSs and Amendments to MFRSs in issue but not yet effective
As at the date of authorisation of these interim financial statements, the new MFRSs and amendments
to MFRSs which were in issue but not yet effective an d not early adopted by the Group are as listed
below: -
Amendments to MFRS 16 Lease Liability in a Sale and Leaseback
Amendments to MFRS 101 Non-current Liabilities with Covenants
Amendments to MFRS 10 Sale or Contribution of Assets between an Investor and its Associate
and MFRS 128 or Joint Venture
Amendments to MFRS 107 Supplier Finance Arrangements
and MFRS 7
Amendments to MFRS 121 Lack of Exchangeability

The Board anticipates that the abovementioned MFRSs and amendments to MFRSs will be adopted in
the annual financial statements of the Group when they become effective and that the adoption of these
standards will have no material impact on the financial statements of the Group in the period of initial
application.
- 10 -
A1 – Basis of Preparation (continued)

(ii) The principal closing rate used in translation of foreign currency amounts were as follows:

Foreign currency 31 Dec 2023 30 Sep 2023 31 Dec 2022

RM RM RM
1 US Dollar (USD) 4.59 4.69 4.39

A2 – Comments about the Seasonal or Cyclicality of Interim Operations

There are no significant seasonal or cyclical factors affecting the operations of the Group.

A3 – Unusual Nature and Amount of Items Affecting Assets, Liabilities, Equity, Net Income or Cash
Flows

There are no other items affecting the assets, liabilities, equity, net income or cash flows of the Group that were
unusual because of their nature, size or incidence during the current quarter and financial year.

A4 – Disaggregation of Revenue

The disaggregation of revenue was as follows:

3 Months ended 12 Months ended
31 Dec 31 Dec
2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
unaudited audited unaudited audited
Revenue from contracts with customers:
Management, operations and
maintenance of water treatment plants 45,759 46,751 195,981 184,924
Toll revenue and operator fee 19,027 18,740 75,309 71,451
Revenue from construction contracts 26,435 (1,484) 59,760 32,984
Management fees 1,083 1,250 4,332 5,001
Sales of electricity 5,479 5,601 24,933 17,238
97,783 70,858 360,315 311,598

Revenue from other sources:

Deferred income 3,626 3,747 14,389 14,864
Government compensation - 11,250 - 11,250
Revenue as per Condensed Statement
of Comprehensive Income 101,409 85,855 374,704 337,712

Timing of revenue recognition for

revenue from contracts with
customers:
At a point in time 70,265 71,092 296,223 273,613
Over time 27,518 (234) 64,092 37,985
97,783 70,858 360,315 311,598

A5 – Accounting Estimates

There were no changes in estimates of amounts reported in prior financial years of the Group that have had a
material effect in the current quarter and financial year.

- 11 -
A6 – Issuance, Repurchases and Repayments of Debt and Equity Securities

During the current quarter and financial year, there was no issuance, repurchase and repayment of debt and
equity securities by the Company.

A7 – Dividends Paid

The total dividends paid to shareholders during the financial year amounted to RM133,044,000 (2022:
RM133,044,000) as follows: -

(a) On 16 February 2023, the Board declared a fourth interim single-tier dividend of 1.65 sen per share on
2,015,817,574 ordinary shares amounting to RM33,261,000 in respect of the financial year ended 31
December 2022 which was paid on 31 March 2023.

(b) On 22 May 2023, the Board declared a first interim single-tier dividend of 1.65 sen per share on
2,015,817,574 ordinary shares amounting to RM33,261,000 in respect of the financial year ended 31
December 2023 which was paid on 30 June 2023.

(c) On 22 August 2023, the Board declared a second interim single-tier dividend of 1.65 sen per share on
2,015,817,574 ordinary shares amounting to RM33,261,000 in respect of the financial year ended 31
December 2023 which was paid on 29 September 2023.

(d) On 22 November 2023, the Board declared a third interim single-tier dividend of 1.65 sen per share on
2,015,817,574 ordinary shares amounting to RM33,261,000 in respect of the financial year ended 31
December 2023 which was paid on 22 December 2023.

A8 – Material Subsequent Events

There were no material events subsequent to the end of the financial report that have not been reflected in these
interim financial statements.

A9 - Contingent Liabilities

There are no material contingent liabilities as at the end of the current financial year and up to 20 February 2024
(being a date not earlier than 7 days from the date of these interim financial statements).

A10 – Changes in Composition of the Group

There were no changes to the composition of the Group during the financial year, including business
combination, acquisition or disposal of subsidiaries and long-term investments, restructuring and discontinued
operations.

A11 – Other Significant Events and Transactions

There are no other transactions and events that are significant to the understanding of the changes in the financial
position and performance of the Group since the Audited Financial Statements.

- 12 -
A12 – Operating Segments

Segmental information is presented in respect of the Group’s business segments, which reflect the Group’s management structure and the way financial information is
internally reviewed by the Group’s chief operating decision makers.

13
A12 – Operating Segments (continued)

Segmental information is presented in respect of the Group’s business segments, which reflect the Group’s management structure and the way financial information is
internally reviewed by the Group’s chief operating decision makers.

14
 A12 – Operating Segments (continued)

(i) EBITDA is defined as earnings before finance costs, taxation, depreciation and amortisation (and excludes share of results of associates and joint venture).
(ii) EBDA is defined as earnings before depreciation and amortisation.
(iii) CAPEX is defined as capital expenditure based on the Group’s proportionate share on capital expenditure incurred for the financial year.

Notes

1. The Group monitors the performance of its business by five main business segments namely water treatment and supply, construction, toll highway, waste management
and renewable energy. Others refer to investment holding and other non-core businesses.

2. The revenue and profit performance represent the Group’s proportionate share of interest in each of the subsidiaries (instead of full consolidation) and includes a
proportionate share of the interest of joint ventures or associates (instead of being equity accounted). The total is then reconciled to the revenue and profit performance
in the Condensed Statements of Comprehensive Income. This is the measure reported to the chief operating decision makers for the purposes of resource allocation
and assessment of segment performance.

3. The income statement in the waste management segment excluded the fair value measurement adjustments made at the Group level. This is to better assess the
operational performance of the segment. The segmental results (including the calculation of EBITDA and EBDA), are solely from the concession business, after the
proportionate deduction of dividends on cumulative preferences shares held by parties other than the Group.

Water treatment and

supply Waste management Construction Toll highway Renewable energy Others Total
As at 31 Dec 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
unaudited audited unaudited audited unaudited audited unaudited audited unaudited audited unaudited audited unaudited audited

Segment assets 99,994 151,691 94,176 116,524 74,662 62,197 1,247,504 1,274,891 169,413 178,037 62,175 70,970 1,747,924 1,854,310
Segment liabilities (22,954) (27,896) - - (60,439) (53,211) (625,778) (670,579) (38,328) (39,913) (36,563) (14,860) (784,062) (806,459)

Net segment assets 77,040 123,795 94,176 116,524 14,223 8,986 621,726 604,312 131,085 138,124 25,612 56,110 963,862 1,047,851

15
 PART B – DISCLOSURES PURSUANT TO PART A OF APPENDIX 9B OF THE LISTING
REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD

B1 – Overall Review of Group’s Financial Performance

Part A – Review of Statement of Financial Position

As at As at
31 Dec 2023 31 Dec 2022 Variance
(unaudited) (audited) (%)
RM’000 RM’000 #
Total assets 1,747,924 1,854,310 ↓ 6
Total liabilities 784,062 806,459 ↓ 3
Total shareholders’ equity 963,862 1,047,851 ↓ 8
Return on equity (%)* 4.9 6.0 ↓ 18
Net assets per share (sen) 34.52 39.06 ↓ 12

* Return on Equity is calculated by dividing the profit for the financial year with the average of the opening and closing
total shareholders’ equity

# approximate, to the nearest digit

(a) The Group’s total assets declined by 6% or RM106.39 million as compared to the Audited Financial
Statements mainly due to a reduction in the following carrying amounts: -

(i) investments designated at FVTPL, cash and bank balances of RM37.86 million. The decrease in
the cash reserves of the Group was principally due to dividend payments to shareholders,
repayments of the Islamic Medium-Term Notes (“IMTN”) under a IMTN (Sukuk) Programme
issued by Cerah Sama Sdn Bhd (“Cerah Sama”) and interest payments during the financial year.
However, the decline in cash reserves was mitigated by receipt of government compensation by
Grand Saga totalling RM11.25 million, dividends received from an associate and a joint venture
amounting to RM8.74 million and receipt of a tax refund of RM3.99 million by the Group during
the financial year;

(ii) intangible assets by RM28.60 million due to amortisation charges; and

(iii) investments in associates by RM21.68 million mainly due to share of losses of SWM
Environment Holdings Sdn Bhd (“SWMEH”) during the financial year.

Nonetheless, the decrease in total assets was mitigated by the increase in inventories by RM18.11
million, mainly from materials purchased and delivered on-site but yet to be installed or consumed in
the Group’s construction activities.

(b) Total liabilities saw a decrease of 3% or RM22.40 million mainly due to reduction of borrowings from
the redemption of the third tranche of the IMTN of RM30.00 million as well as lower deferred income
and deferred tax liabilities by RM11.28 million and RM10.47 million respectively. However, the
reduction was mitigated by the RM5 million loan drawdown as well as increase in trade payables and
amount due to contract customers by RM4.73 million and RM22.15 million respectively.

(c) Total shareholders’ equity was lower by 8% or about RM83.99 million on account of total dividends
paid to shareholders of the Company. Consequently, the net assets per share also declined to 34.52 sen
compared to 39.06 sen as of 31 December 2022.

- 16 -
B1 – Overall Review of Group’s Financial Performance (continued)

Part B – Review of Income Statement

The breakdown of the revenue by business segment below should be read in conjunction with Note A4 –
Disaggregation of Revenue above.
3 Months 3 Months 12 Months 12 Months
ended ended ended ended
31 Dec 2023 31 Dec 2022 31 Dec 2023 31 Dec 2022
RM’000 RM’000 RM’000 RM’000
unaudited audited unaudited audited
Revenue
Water treatment and supply 45,759 46,751 195,981 184,924
Construction 26,435 (1,484) 59,760 32,984
Toll highway 22,653 33,737 89,698 97,565
Renewable energy 5,479 5,601 24,933 17,238
Others 1,083 1,250 4,332 5,001
Revenue as per Condensed Statement
of Comprehensive Income 101,409 85,855 374,704 337,712

Profit Before Tax

3 Months 3 Months 12 Months 12 Months
ended ended ended ended
31 Dec 2023 31 Dec 2022 31 Dec 2023 31 Dec 2022
RM’000 RM’000 RM’000 RM’000
unaudited audited unaudited audited

Water treatment and supply 12,336 12,723 58,365 60,927

Construction 1,485 (609) 4,555 742
Toll highway 11,784 20,365 38,063 51,147
Renewable energy 1,250 2,659 9,920 8,089
Others (2,324) 1,076 (11,037) (4,276)
Operating profit 24,531 36,214 99,866 116,629
Finance cost (4,394) (4,457) (17,491) (17,975)
Share of results of joint venture 460 4,462 5,502 6,182
Share of results of associates (5,966) (11,170) (20,811) (22,962)
Profit before tax for the financial
period/year 14,631 25,049 67,066 81,874

(a) Current Quarter vs. Preceding Year’s Corresponding Quarter

Overall Summary
For the current quarter, the Group posted a revenue of RM101.41 million, a notable increase compared
to the corresponding quarter, primarily attributable to the construction segment. Revenue from the toll
highway segment was lower due to government compensation recognised in the corresponding quarter,
whereas the revenue from other segments were also lower in comparison to the corresponding quarter.

- 17 -
B1 – Overall Review of Group’s Financial Performance (continued)

Part B – Review of Income Statement (continued)

(a) Current Quarter vs. Preceding Year’s Corresponding Quarter (continued)

Despite the higher revenue, the Group reported a lower PBT of RM14.63 million, as compared to
RM25.05 million in the corresponding quarter. The decrease in PBT was mainly attributable to the
following: -

(a) the government compensation recognised by Grand Saga in the corresponding quarter;

(b) lower share of results from a jointly controlled entity, Grand Sepadu (NK) Sdn Bhd (“Grand
Sepadu”) due to government compensation of RM21.90 million recognised in the corresponding
quarter; and

(c) gain on Modification on Leases recognised in the corresponding quarter amounting to RM3.54
million arising from the Company renewing its office premises rental agreement with the landlord;
and

However, the decrease in PBT was mitigated by a lower share of losses of an associate, SWM of
RM6.16 million (Q4FY22: RM11.40 million) in the current quarter, net reversal of loss allowance on
trade and other receivables and amount due from contract customers of RM0.84 million (Q4FY22: net
provision of loss allowance of RM0.23 million) million), as well as lower depreciation and amortisation
expenses of RM9.18 million (Q4FY22: RM12.11 million) in the current quarter.

Water treatment and supply

The operating revenue for the water treatment and supply segment comprised of metered sales of
RM37.00 million (Q4FY22: RM37.51 million) and electricity and chemical rebates of RM8.76 million
(Q4FY22: RM9.24 million) respectively. Despite the BWSR Increase, the segment’s operating revenue
showed a slight decrease from RM46.75 million to RM45.76 million due to the lower metered sales,
electricity and chemical rebates.

The metered sales and the average million litres per day (“MLD”) of metered sales recorded in SSP1
were as follows: -
Variance
Q4 2023 Q4 2022
SSP1 (%)
Metered Sales (million m3) 88.11 91.50 ↓ 3.7
Number of billing days 92 92
Average MLD 957.48 994.54 ↓ 3.7

The segment’s operating profit declined from RM12.72 million to RM12.34 million in the current
quarter due to increase in maintenance and rehabilitation expenditure of RM7.41 million (Q4FY22:
RM5.81 million), which is then partially offset by sundry income and net reversal of provision for loss
allowance on receivables.

Construction

The construction revenue was higher by RM27.92 million mainly due to the progress of the Package 2
and 3 of Phase 1 of the Sungai Rasau Water Treatment Plant and Water Supply Scheme (“Rasau
Projects”) in the current quarter. Additionally, an adjustment for over-recognition of revenue for the
Rasau Projects in the corresponding quarter also contributed to the increase.

- 18 -
B1 – Overall Review of Group’s Financial Performance (continued)

Part B – Review of Income Statement (continued)

(a) Current Quarter vs. Preceding Year’s Corresponding Quarter (continued)

In line with the higher revenue, operating profit was higher at RM1.49 million as compared to RM0.61
million of operating loss in the corresponding quarter. This was also due to higher percentage of upward
revision in the contract sum and margin for the Proposed Construction and Completion of 76ML RC
Reservoir R4 and Related Ancillary Works at Cyberjaya Flagship Zone, Mukim Dengkil, Daerah
Sepang, Selangor Darul Ehsan (“CRJ4 Project”) compared to corresponding quarter. The revision in
the current quarter arose from the finalisation of sub-contracts accounts following the completion of the
said project in the previous quarter. The higher operating profit was also due to net reversal of loss
allowance on trade and other receivables and amount due from contract customers in the current quarter
of RM0.42 million (Q4FY22: provision of loss allowance of RM0.08 million).

Toll highway – Subsidiary

ADT Variance (%)

Q4 2023 Q4 2022

Grand Saga Highway 161,380 154,991 ↑ 4.1

Due to the higher traffic flow, the Average Daily Traffic (“ADT”) in the Grand Saga Highway saw an
increase of 4.1%. Nonetheless, revenue was significantly lower by RM11.08 million due to recognition
of government compensation in the corresponding quarter.

In line with the lower revenue, the operating profit showed a significant decline in comparison to the
corresponding quarter. The drop was however mitigated by lower amortisation of intangible assets
amounting to RM5.01 million (Q4FY22: RM6.55 million) as well as lower repair and maintenance
expenses in the current quarter amounting to RM1.66 million (Q4FY22: RM2.42 million).

Renewable energy

The total energy output (measured in megawatt-hour (“MWh”) recorded in the four (4) solar plants
were as follows: -

Variance (%)
Q4 2023 Q4 2022

Total energy output (MWh) 4,813 4,690 ↑ 2.6

Despite slightly higher energy output, revenue for the current quarter was marginally lower by RM0.12
million attributable to a portion of energy output produced by TR SaTerm Sdn. Bhd.’s (“TR SaTerm”)
solar facilities being billed at a rate lower than the feed-in tariff rate as it has exceeded the declared
annual availability.

The operating profit was lower at RM1.25 million as compared to RM2.66 million in the corresponding
quarter attributed to lower sundry income and higher repair and maintenance expenses amounting to
RM0.60 million in the current quarter (Q4FY22: an reversal of overprovision of repair and maintenance
of RM0.79 million). The higher sundry income in the corresponding quarter was due to disposal of the
old panels following the completion of panels replacement in TR SaTerm.

- 19 -
B1 – Overall Review of Group’s Financial Performance (continued)
Part B – Review of Income Statement (continued)

(a) Current Quarter vs. Preceding Year’s Corresponding Quarter (continued)

Toll highway – Share of results of joint venture

Variance (%)
ADT Q4 2023 Q4 2022

Grand Sepadu Highway 88,941 85,973 ↑ 3.5

Grand Sepadu’s ADT increased by 3.5% as a results of increased traffic brought on by the opening of
a new flyover at Bandar Bukit Raja. Nonetheless, the Group’s share of results was lower due to
government compensation of RM21.90 million in the corresponding quarter. The drop was mitigated
by lower repair and maintenance expenses of RM1.52 million (Q4FY22: RM3.11 million), depreciation
and amortisation expenses of RM4.01 million (Q4FY22: RM7.58 million) and tax expenses of RM1.69
million (Q4FY22: RM 6.52 million).

Waste management – Associate

The Group’s share of results of associates is mainly contributed by SWMEH. The Group’s share of
losses from SWMEH was lower at RM6.16 million as compared to RM11.40 million in the
corresponding quarter due to higher PAT recorded in SWMEH’s group level.

Revenue from both solid waste collection and public cleansing services was higher by 2.4% in the
current quarter mainly attributable to the handing over of new areas. In line with the increase in revenue,
SWMEH recorded a higher PAT of RM44.24 million compared to RM27.29 million in the
corresponding quarter. SWMEH also recorded lower provision for loss allowance on receivables,
subcontractor costs, and higher other income during the current quarter. However, the company incurred
higher repair and maintenance expenses, depreciation, finance costs and taxes in the current quarter.

(b) Current Year-to-date vs. Preceding Year-to-date

Overall Summary

The Group’s revenue increased significantly by RM36.99 million to RM374.70 million from RM337.71
million recorded in the preceding year. The substantial growth was primarily driven by increased
contribution from all operating subsidiaries, except from the toll highway segment.
Despite significant increase in revenue, the Group PBT was lower at RM67.07 million, compared to
RM81.87 million in the preceding year. The lower PBT was mainly attributable by the following: -

(a) the government compensation recognised by Grand Saga in the preceding year;

(b) higher of repair and maintenance expenses amounting to RM29.37 million (YTD Q4FY22:
RM21.60 million); and
(c) a write-back of over-provision for heavy repairs recognised in prior years of RM2.89 million, as
well as a Gain on Modification on Leases of RM3.54 million in the preceding year.

- 20 -
B1 – Overall Review of Group’s Financial Performance (continued)

Part B – Review of Income Statement (continued)

(b) Current Year-to-date vs. Preceding Year-to-date (continued)

Nonetheless, the abovementioned were mitigated by: -

(a) lower share of losses from SWMEH of RM22.35 million (YTD Q4FY22: RM24.37 million);

(b) a net reversal of loss allowance on trade and other receivables and amount due from contract
customers of RM0.73 million (YTD Q4FY22: net provision of loss allowance of RM0.22
million); and
(c) a gain on disposal of investment property, higher net gain on foreign exchange and fair value
gains in the current financial year as disclosed in Note B4.

Water treatment and supply

At the operating level, the water treatment and supply segment reported a revenue of RM195.98 million,
exceeding the RM184.92 million recorded in preceding year due to higher electricity rebates in the
SSP1 operations. Variations in the electricity and chemical rebates have no impact on the SSP1
operations as it is a pass-through mechanism by which the variations are then passed on to Air Selangor
in the form of rebates. Despite the BWSR Increase, revenue from metered sales was lower as compared
to the corresponding quarter, due to a reduction in metered sales by 2.8% in the current financial year.

The metered sales and the average MLD of metered sales recorded in SSP1 were as follows: -
YTD YTD Variance
SSP1 Dec 2023 Dec 2022 (%)
Metered Sales (million m3) 353.65 363.80 ↓ 2.8
Number of billing days 365 365
Average MLD 968.92 996.72 ↓ 2.8

Despite the higher revenue, the operating profit decreased to RM58.37 million, down from RM60.93
million a year ago. The decrease was mainly due to higher rehabilitation and maintenance expenses of
RM21.63 million (YTD Q4FY22: RM15.54 million). However, the decrease was partially mitigated
by, amongst others, a gain on disposal of investment property, net reversal of loss allowance on trade
and other receivables, as well as higher net returns from interest income, dividend and net gain on
redemption from investments designated at FVTPL in the current financial year.

Construction
The segment experienced a substantial increase in revenue as compared to the previous year, with the
Rasau Projects and CRJ4 Project contributing RM52.71 million (YTD Q4FY22: RM25.47 million)
and RM5.23 million (YTD Q4FY22: RM7.49 million) respectively.

Furthermore, the issuance of the final account for the completed L2P7 Project resulted in an upward
revision of the contract sum and margin, and these have further increased the revenue and operating
profit compared to the preceding year. The profit was also boosted by recognition of net reversal of
loss allowance on trade and other receivables and amount due from contract customers of RM0.31
million (YTD Q4FY22: net provision of loss allowance of RM0.12 million).

- 21 -
B1 – Overall Review of Group’s Financial Performance (continued)

Part B – Review of Income Statement (continued)

(b) Current Year-to-date vs. Preceding Year-to-date (continued)

Toll operations - Subsidiary

Variance (%)
ADT YTD Dec 2023 YTD Dec 2022

Grand Saga Highway 158,223 147,504 ↑ 7.3

With the opening of the SUKE Expressway in September 2022, ADT recorded a significant increase by
7.3%. Nonetheless, revenue declined to RM89.70 million from RM97.57 million due to government
compensation recognised in the preceding year. Due to the lower revenue, operating profit was
significantly lower at RM38.06 million (YTD Q4FY22: RM51.15 million). The reduction was primarily
due to write-back of overprovision of heavy repairs of RM2.89 million in the corresponding year, as
well as higher repair and maintenance expenses of RM5.58 million (YTD Q4FY22: RM4.20 million)
in the current financial year.

Renewable energy

The total energy output (measured in MWh) recorded in the four (4) solar plants were as follows: -

Variance (%)
YTD Dec 2023 YTD Dec 2022

Total energy output (MWh) 21,184 17,494* ↑ 21.1

* the total energy output was twelve months for comparison purposes

Revenue contribution showed a substantial increase by RM7.70 million, primarily attributable to

revenue recognised for a period of twelve (12) months in the current financial year compared to about
nine (9) months in the corresponding year as the acquisition of the solar renewable energy project was
only completed in April 2022. Furthermore, the higher revenue was also attributed to the completion
of panel replacement at TR SaTerm’s solar facility in the fourth quarter of 2022, resulting in a notable
increase in total energy output by 21.1%.

Consistent with the higher revenue, the segment’s operating profit was also higher at RM9.92 million
compared to RM8.09 million in the preceding year.

Toll operations - Share of results of joint venture

YTD YTD
ADT Variance (%)
Dec 2023 Dec 2022
Grand Sepadu Highway 88,505 86,059 ↑ 2.8

Grand Sepadu recorded a higher ADT by 2.8% compared to the previous year. However, the share of
results to the Group was lower due to lower government compensation and higher repair and
maintenance expenses incurred in the current financial year. The drop was mitigated by lower
depreciation and amortisation of RM15.96 million (YTD Q4FY22: RM18.76 million), finance cost of
RM3.89 million (YTD Q4FY22: RM5.41 million) and tax expenses of RM10.19 million (YTD
Q4FY22: RM11.93 million).

- 22 -
B1 – Overall Review of Group’s Financial Performance (continued)

Part B – Review of Income Statement (continued)

(b) Current Year-to-date vs. Preceding Year-to-date (continued)
Waste management - Share of results of associate

The Group’s share of losses from SWMEH was lower compared to preceding year due to higher PAT
recorded in SWMEH amounting to RM182.34 million as compared to RM168.75 million attributable
to higher revenue and lower expenses, amongst others, provision for loss allowance on receivables,
sub-contractor costs and taxes. However, the increase was partially impacted by higher payroll related
costs and depreciation expenses.

(c) Material Change in Financial Performance for the Current Quarter Compared with Preceding
Quarter
3 Months 3 Months
ended ended
31 Dec 2023 30 Sep 2023
RM’000 RM’000
unaudited unaudited
Revenue
Water treatment and supply 45,759 46,066
Construction 26,435 14,213
Toll highway 22,653 23,289
Renewable energy 5,479 6,229
Others 1,083 938
Total revenue as per Condensed Statement of
Comprehensive Income 101,409 90,735
Profit Before Tax
Water treatment and supply 12,336 13,984
Construction 1,485 2,779
Toll highway 11,784 7,974
Renewable energy 1,250 2,187
Others (2,324) (3,203)
Operating profit 24,531 23,721
Finance cost (4,394) (4,368)
Share of results of joint venture 460 4,303
Share of results of associates (5,966) (5,513)
Profit before tax for the financial period 14,631 18,143

In the current quarter, the Group revenue increased significantly by RM10.67 million, from RM90.74
million to RM101.41 million attributable to higher contribution from the construction segment, driven
by the progress of the Rasau projects and upward revision in the margin for the CRJ4 Project. On the
other hand, all other segments recorded lower revenue.

Despite the higher revenue, the Group PBT decreased by RM3.51 million to RM14.63 million from
RM18.14 million in the previous quarter. This was attributable to higher repair and maintenance
expenses and employee related expenses in the current quarter. Nonetheless, the dip in the PBT was
mitigated by lower amortisation of intangible assets, higher sundry income as well as net reversal of
provision for loss allowance on receivables made in the current quarter. An upward revision in the
contract sum and margin for the L2P7 Project as well as government compensation received by a jointly
controlled entity contributed to a higher PBT in the previous quarter.

- 23 -
B1 – Overall Review of Group’s Financial Performance (continued)

Part B – Review of Income Statement (continued)

(c) Material Change in Financial Performance for the Current Quarter Compared with Preceding
Quarter (continued)

Due to the decrease in metered sales and with the electricity and chemical rebates remaining almost
similar between the two quarters, revenue from the water treatment and supply segment was marginally
lower as compared to the preceding quarter. The following are the metered sales and the average MLD
of metered sales recorded in the SSP1 operations: -

SSP1 Q4 2023 Q3 2023 Variance (%)

Metered Sales (million m3) 88.1 89.0 ↓1.0%
Number of billing days 92 92
Average MLD 957 967 ↓1.0%

The segment’s operating profit saw a decrease by RM1.65 million due to the reduction in revenue and
higher maintenance and rehabilitation expenses in the current quarter. However, this impact was
partially mitigated by higher sundry income and net reversal of provision for loss allowance on
receivables.

The construction segment’s revenue is much higher than it was in the preceding quarter due to
contribution from CRJ4 and Rasau projects. Nonetheless, there was a reduction in the operating profit
attributable to an upward revision in the contract sum and margin for the L2P7 Project, following the
issuance of final account in the preceding quarter.

ADT in Grand Saga showed a slight increase by 1.4% as compared to preceding quarter. However,
revenue contribution in Grand Saga was marginally lower as compared to the preceding quarter due to
4 days of toll exemption in the current quarter in conjunction with Deepavali and Christmas festivities.
The increase in operating profit was attributable to lower of amortisation of intangible assets of RM5.01
million (Q3FY23: RM8.22 million) and lower repair and maintenance expenses of RM1.66 million
(Q3FY23: RM2.96 million).

The ADT recorded in the Grand Saga Highway was as follows: -

ADT Q4 2023 Q3 2023 Variance (%)

Grand Saga Highway 161,380 159,224 ↑1.4

For the renewable energy segment, revenue was slightly lower by RM0.75 million due to the reduction
in the total energy output by 8.4%, and this was also reflected in the drop in the operating profit.
However, the drop in the operating profit was higher at RM1.25 million partly attributable to net loss
on foreign exchange of RM0.15 million (Q3FY23: net gain of foreign exchange of RM0.05 million).
The total energy output (measured in MWh) recorded in the four (4) solar plants were as follows: -

Variance (%)
Q4 2023 Q3 2023

Total energy output (MWh) 4,813 5,254 ↓ 8.4

As for Grand Sepadu, the company recorded an almost similar ADT as compared to preceding quarter.
Nonetheless, the Group's share of results in Grand Sepadu was significantly lower at RM0.46 million
(Q3FY23: RM4.30 million) and this was attributed to the government compensation of RM13.83
million in the preceding quarter. The lower share of results was then mitigated by lower repair and
maintenance expenses and taxes.
- 24 -
B1 – Overall Review of Group’s Financial Performance (continued)

Part B – Review of Income Statement (continued)

(c) Material Change in Financial Performance for the Current Quarter Compared with
Preceding Quarter (continued)

The ADT recorded in the Grand Sepadu Highway was as follows: -

ADT Q4 2023 Q3 2023 Variance (%)

Grand Sepadu Highway 88,941 88,925 -

The Group’s share of losses of SWMEH is higher at RM6.16 million as compared to RM5.94 million
in the preceding quarter due to lower PAT recorded in SWMEH. Revenue from both solid waste
collection and public cleansing services was higher mainly attributable to handing over of new areas
during the current quarter. However, the higher revenue was offset by higher depreciation, vehicle-
related costs attributable to repairs and maintenance and purchase of new vehicles during the current
quarter, as well as higher provision for loss allowance on receivables. Nevertheless, these effects were
partially mitigated by lower taxes during the current quarter.

Part C – Review of Statement of Cash Flow

12 Months ended 12 Months ended Variance

31 Dec 2023 31 Dec 2022 (%)
RM’000 RM’000
unaudited audited
Net cash from operating activities 130,101 86,693 ↑50
Net cash from investing activities 82,883 225,660 ↓63
Net cash used in financing activities (178,957) (325,734) ↓45

Net cash from operating activities was higher by RM43.41 million primarily attributable to the receipt of
government compensation of RM11.25 million by Grand Saga during the financial year as well as timely
payments from trade receivables and contract customers. The Group also received tax refunds totalling RM3.99
million in the current financial year, further contributing to the overall increase in net cash from operating
activities.

Net cash from investing activities was lower by RM142.78 million primarily due to the lower net proceeds from
redemption of investments designated at FVTPL as compared to previous year. However, the decrease in net
cash from investing activities was partially offset by dividend received from a joint venture in the current
financial year. The acquisition of subsidiaries and non-controlling interest in the previous year had an impact on
the net cash from investing activities in that year.

Net cash outflow from financing activities was lower by RM146.78 million mainly due to repayment of previous
shareholder’s loans and external borrowing owing by subsidiaries arising from the acquisition of solar power
projects in the previous year. Additionally, the reduction was contributed by higher loan repayment in the
previous year and a loan drawdown of RM5 million in the current quarter.

- 25 -
B2 – Prospects

The profitability of the Group is predominantly driven by the performance of the water treatment and supply;
and the toll highway segments as they contribute the bulk of the profits and cash flows to the Group. Throughout
the year, there was a consistent and sustained demand for treated raw water in the Klang Valley. Additionally,
the toll highway segment has shown vast improvement in the traffic volume, particularly for the Grand Saga
Highway, following the opening of the SUKE Expressway. Aside from that, contribution from the renewable
energy and construction segments to the Group's profit has improved considerably compared to a year ago
following the replacement of solar panels at one of the project sites and receipt of approval from authority to
commence construction work for the Rasau Projects respectively.

During the year, Packages 2 and 3 of the Rasau Projects were granted an extension of time to complete by 29
November 2025 and 19 December 2025 respectively. Both the projects are currently on track and is expected to
contribute positively to the Group’s financial performance in 2024 and 2025. The successful completion of the
Rasau Projects remains as one of the top priorities considering that it is a sizeable project to the Group.

For the waste management segment, SWMEH remains profitable and continues to register higher revenue from
both solid waste collection and public cleansing services mainly from increasing areas to be serviced. However,
the protracted delay in securing a tariff revision remains one of the key concerns. As a result, the Group is expected
to record share of losses until the tariff revision is resolved. Discussions are on-going between SWMEH and the
Ministry of Housing and Local Government for a second cycle tariff review under the terms of the SWMEH
concession agreement.

In the renewable energy segment, the improved financial results for the year is attributed to the improved solar
panel efficiency at TR SaTerm’s solar facility, pursuant to the successful completion of the solar panel
replacement project in the fourth quarter of 2022. For 2024, the Group intends to undertake solar panels
replacement in the two other facilities. The replacement exercise, which involves an estimated capital expenditure
of approximately RM15 million is anticipated to be completed by third quarter of this year.

Over the past years, the Group has been able to maintain a consistent payout of dividends to shareholders,
facilitated by the timely receipt from the water treatment and supply segment along with receipt of toll
collections. From time to time, the Group assesses its financial position to ensure that there are sufficient cash
reserves to fulfil its operating and capital expenditure requirements, banking and Sukuk covenants as well as for
potential business opportunities. The Group will continue with its strategy to focus on mature operational cash-
generating utilities/infrastructure businesses with a view of generating new income stream.

B3 – Profit Estimates, Forecasts, Projections, Internal Targets or Profit Guarantees

Not applicable as none were announced or disclosed in a public document.

B4 – Profit before tax

3 Months ended 31 Dec 12 Months ended 31 Dec
2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
unaudited audited unaudited audited
Other operating income:
Interest income on fixed deposits with licensed banks 849 708 2,391 2,258
Dividend from investments designated at FVTPL 453 617 2,321 2,107
Rental income 64 78 351 373
Gain on redemption of investments designated at
FVTPL 110 114 368 1,984
Gain on foreign exchange (realised) - - 1 -
Gain on foreign exchange (unrealised) (115) (246) 808 182
Fair value changes (31) 85 339 166

- 26 -
 3 Months ended 31 Dec 12 Months ended 31 Dec
2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
unaudited audited unaudited audited
Reversal of loss allowance on trade and other
receivables and amount due from contract customers 770 (42) 770 1
Gain on disposal of property, plant and equipment and
sundry income 956 957 2,692 2,787
Gain on disposal of investment property (Note B12) - 130 1,806 130
Gain on modification of leases - 3,537 - 3,537
Interest income imputed on retention sum 17 - 17 -

Cost of operations, administrative and other expenses:

Depreciation and amortisation (9,176) (12,111) (45,551) (42,872)
Imputed interest on borrowing (78) (92) (308) (367)
Loss on redemption of investments designated at
FVTPL - (25) - (126)
Loss on fair value changes - (21) - (199)
Loss allowance on trade and other receivables and
amount due from contract customers 72 (190) (43) (227)
Loss on foreign exchange (unrealised) (35) 4 (386) (2)
Loss on foreign exchange (realised) - (6) (6) (17)
Reversal of interest income imputed on retention sum 24 15 - (10)

Save as disclosed above, the other items required under Chapter 9, Appendix 9B, Part A (16) of the Listing
Requirements of Bursa Securities are not applicable.

B5 – Income Tax Expense

The income tax expense is in respect of the estimated Malaysian income tax charges and deferred tax expenses.
The effective tax rate of the Group varied from the statutory tax rate principally due to non-deductibility of
certain expenses and/or non-taxability of certain income, as the case maybe, tax effect of share of profits/loss
of joint venture and associates and losses incurred by certain subsidiaries which were not available to be set-
off against taxable profits in other companies within the Group.

3 Months ended 31 Dec 12 Months ended 31 Dec

2023 2022 2023 2022
RM’000 RM’000 RM’000 RM’000
unaudited audited unaudited audited

Malaysian income tax 8,053 8,008 28,227 30,910

Deferred tax expense (2,728) (10,132) (10,614) (15,466)
Total income tax expense 5,325 (2,124)^ 17,613 15,444

Effective tax rate 36.4% (8.5) % 26.3% 18.9%

^ The negative effective tax rate in the corresponding quarter arose from the recognition of deferred tax assets
as the Group anticipates that sufficient taxable profits from the Rasau Projects would be available to offset
the unused tax losses.

- 27 -
B6 – Status of Corporate Proposals Announced but not Completed

There was no corporate proposal announced but not completed as of 20 February 2024, being a date not earlier
than 7 days from the date of these interim financial statements.

B7 – Group Borrowings and Debt Securities

Included in the borrowings of the Group are borrowings denominated in Ringgit Malaysia as follows: -

Long term Short term Total

RM’000 RM’000 RM’000
31 Dec 2023 (unaudited)
Secured- IMTN 269,215 30,000 299,215
Unsecured – Revolving credit - 5,000 5,000
269,215 35,000 304,215

31 Dec 2022 (audited)

Secured- IMTN 298,907 30,000 328,907

The RM420 million in nominal value IMTN Programme issued by Cerah Sama is repayable over eleven (11)
annual instalments commencing 2020. During the financial year, the fourth tranche of the IMTN amounting to
RM30 million in nominal value was redeemed in full at maturity in January 2023. As at the end of the financial
year, the remaining balance of the IMTN tranches is RM300 million, which are repayable between 2024 and
2030.

During the current quarter, the Company drawdown RM5 million from a revolving credit facility. As at the date
of this report, this amount has been fully repaid.

B8 – Changes in Material Litigations

The Group does not have any material litigation as at the last annual statement of financial position.

B9 – Dividends

The Board is pleased to declare a fourth interim single-tier dividend of 1.0 sen per share on 2,015,817,574 shares
amounting to RM20,158,000 in respect of the financial year ended 31 December 2023, to be payable on 29
March 2024.

To-date, the Board has declared a total single-tier dividend of 5.95 sen to shareholders for the financial year
ended 31 December 2023, amounting to RM119,941,000 (2022: 6.60 sen per share amounting to
RM133,044,000).

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B10 – Earnings Per Share (“EPS”)

Basic and diluted earnings per share attributable to owners of the Company are computed by dividing the profit
for the financial year attributable to owners of the Company by the weighted average number of ordinary shares
in issue during the financial year.

There are no potential dilutive ordinary shares attributable to the Company as at the end of the financial year.

3 Months ended 31 Dec 12 Months ended 31 Dec

2023 2022 2023 2022
unaudited audited unaudited audited
Profit for the financial period/year
attributable to owners of the Company 6,558 21,001 41,962 55,140
(RM’000)
Weighted average number of ordinary
shares in issue (’000) 2,015,817 2,015,817 2,015,817 2,015,817

Earnings per share (sen) 0.32 1.05 2.08 2.74

B11 – Auditors’ Reports

The audit report on the annual financial statements of the Group and the Company for the preceding financial
year does not contain a modified opinion or material uncertainty related to going concern.

B12 – Assets Held-for-Sale

On 22 June 2022, the Group executed the Sales and Purchase Agreement with a third-party buyer for the disposal
of a parcel of land and building located in Kuah, Langkawi for a cash consideration of RM2.5 million. These
properties were classified as assets held-for-sale. This transaction has been completed in the second quarter, and
the Group recognised a gain on disposal of RM1.806 million as disclosed in Note B4.

B13 – Investment Designated at FVTPL, Deposits, Bank and Cash Balances

As at the end of the financial year, included in the investment designated at FVTPL, deposits, bank and cash
balances totalling RM179.25 million are: -

(a) RM45.92 million held as securities for banking facilities secured by the Group, of which RM38.43
million is maintained in a debt service reserve account for the fifth tranche of the IMTN and its
corresponding interest due on 31 January 2024;

(b) RM20.2 million is allocated for the payment of the fourth interim single-tier dividend as recommended
by the Board in Note B9 above; and

(c) RM27.60 million for budgeted capital expenditure for 2024, a significant portion of which is for solar
panel replacement and other improvement works.

B14 – Restatement of Comparatives

Certain comparatives may differ from the unaudited financial results announced for the fourth quarter of 2022
as they have been adjusted to take into account the audited results of the Group for the financial year ended 31
December 2022.

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B15 – Authorisation for Release

These interim financial statements have been reviewed by the Audit and Risk Management Committee and
approved by the Board for public release.

By Order of the Board

Tai Yuen Ling (LS0008513)
Tai Yit Chan (MAICSA 7009143)
Company Secretaries
27 February 2024

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