UEM EDGENTA BERHAD ANNUAL REPORT 2021 1 2 3 4 5 6 7 307 306 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 43. SIGNIFICANT EVENT COVID-19 pandemic The COVID-19 pandemic outbreak in early 2020 has impacted economic activities worldwide including Malaysia, the spill over effect has adversely impacted the financial performance of the Group in 2021 also. In the first half of 2021, the domestic operating environment continued to be challenging, amidst a prolonged MCO from January to May and re-introduction of Full MCO in June, as a preventive measure by the Government of Malaysia in response to the Covid-19 pandemic. Riding on the ramp up of the National Covid-19 Immunisation Programme under the National Recovery Plan (“NRP”), some movement restrictions were lifted, and some economic activities were allowed progressively as the vaccination rates in certain states hit the threshold targets. Most states have gradually transitioned into subsequent Phases of the NRP towards end of Q3 2021. As a result, the Group and the Company’s performance continued to be adversely affected by the Covid-19 pandemic in 2021. The Group’s Infrastructure Solutions segment continues to be affected by the variation of MCO during the first half of 2021. With restricted interstate travel and low traffic volume, deferment of award of work for major expressways are still seen in the first half of the year. Consequently, the revenue and profit of this segment were still below the prepandemic level. The Group’s Asset Management segment continues to be affected by higher operating costs, arose from the compliance to various standard operating procedures of the ‘new normal’ operating environment (such as personal protective equipment and sanitisation cost). Despite higher revenue for the segment, the profit was eroded by the higher operating costs. The full impact of Covid-19 pandemic on the Group’s and the Company’s performance for the next financial year could not be reasonably ascertained at the date of this report. This is due to the fact that the financial performance is highly dependent on the degree to which Malaysia is able to fully transition into an endemic phase of Covid-19 and whether there is any resurgence of any new Covid variant. The Group and the Company are taking great effort to mitigate the effects of the ongoing pandemic in order to best manage the effects on its businesses. Notwithstanding the challenging outlook, the Group and the Company will continue to closely monitor the related risks and impact on all business segments to ensure that long term business prospects remain stable. As border re-opens and Malaysia transition into the endemic phase, the Group and the Company expect a gradual recovery in the operating environment and the business performance in the next financial year. The Company will continue to remain agile and adaptable as it pursues its growth strategy focusing on new products and solutions, expanding into new geographical market and forging regional partnerships. 44. SUBSEQUENT EVENT On 10 March 2022, Opus International (M) Berhad, a wholly-owned subsidiary of Opus Group Berhad which in turn is a wholly-owned subsidiary of UEM Edgenta Berhad entered into a Shareholders Agreement with PPES Consults Sdn. Bhd. and Opus Consultants (Sarawak) Sdn. Bhd. to jointly provide project management services and construction projects. 45. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES Details of subsidiaries, joint ventures and associates are as follows: Name of Companies Country of incorporation Issued and paid-up share capital RM Effective proportion of ownership interest Principal activities 2021 % 2020 % Subsidiary of the Company: Edgenta FIRST Sdn. Bhd. Malaysia 1 100 - Provision of management services Faber Hotels Holdings Sdn. Bhd. Malaysia 95,279,551 - 100 Dissolved Faber Development Holdings Sdn. Bhd. Malaysia 56,520,010 100 100 Investment holding Edgenta Facilities Sdn. Bhd. Malaysia 200,000 100 100 Investment holding and provision of integrated facilities management services Edgenta Healthcare Management Sdn. Bhd. Malaysia 2 100 100 Provision of hospital support services Edgenta PROPEL Berhad Malaysia 78,962,615 100 100 Maintenance and repair of civil, mechanical and electrical works on roads, infrastructure and expressways and industrial cleaning services Opus Group Berhad Malaysia 156,497,958 100 100 Investment holding Faber L.L.C. (b) Emirates of Dubai AED600,000 - 75 Dissolved Edgenta NXT Sdn. Bhd. (Formerly known as General Field Sdn. Bhd.) (e) Malaysia 500,002 100 100 Provision of digital technology services Sate Yaki Sdn. Bhd. Malaysia 5,000,000 60 60 In liquidation Edgenta Environmental & Material Testing Sdn. Bhd. Malaysia 1,000,000 100 100 Geotechnical investigation, instrumentation and pavement condition assessment works; maintenance and repair of civil, mechanical and electrical works on roads, infrastructure and expressways, and industrial cleaning services Edgenta Energy Services Sdn. Bhd. Malaysia 1,000,000 70 70 Energy performance management services
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