Annual Report 2013
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Annual Report 2013 Malaysia | Vietnam | Australia | Singapore | China | Indonesia | United Kingdom S P SETIA BERHAD GROUP Annual Report 2013 S P SETIA IS AN AWARD-WINNING PUBLIC LISTED COMPANY AND A MARKET LEADER IN PROPERTY DEVELOPMENT. OVER THE YEARS, WE HAVE BUILT HOMES FOR MALAYSIANS FROM ALL WALKS OF LIFE. OUR PRODUCTS RANGE FROM RESIDENTIAL HOUSES TO HIGH-RISE CONDOMINIUMS AS WELL AS COMMERCIAL CENTRES AND BUSINESS PARKS S P SETIA Annual Report 2013 S P SETIA BERHAD GROUP 1 Contents PERFORMANCE REVIEW FINANCIAL STATEMENTS 6 Corporate Profile 82 Corporate Information 8 Global Presence 83 Directors’ Report 10 Group Financial Summary 88 Independent Auditors’ Report 90 Statements of Financial Position CORPORATE INFORMATION 92 Statements of Comprehensive Income 14 Corporate Information 93 Consolidated Statement of Changes in Equity 16 Corporate Structure 94 Statement of Changes in Equity 18 Our Awards 95 Statements of Cash Flows 98 Notes to the Financial Statements BUSINESS REVIEW 181 Statement by Directors 20 Board of Directors 181 Statutory Declaration 22 Profile of Board of Directors 36 Chairman’s Statement OTHER INFORMATION 42 President’s Report 182 Analysis of Shareholdings 46 Review of Operations 184 List of Material Properties held by the Group 54 Corporate Responsibility 185 Notice of Annual General Meeting 62 Corporate Calendar 188 Group Directory Proxy Form CORPORATE GOVERNANCE 66 Corporate Governance Statement 76 Audit Committee Report 79 Statement on Risk Management and Internal Control 2 S P SETIA BERHAD GROUP Annual Report 2013 VISION MISSION VALUEOURS VALUES ARE THE ANCHOR THAT KEEPS US STEADY AS WE REACH FOR THE STARS Annual Report 2013 S P SETIA BERHAD GROUP 3 OUR VISION OUR MISSION OUR VALUES To be the BEST in all we do We aim to provide superior customer service • We uphold quality as our first priority and satisfy customer needs through a culture • We are customer-focused of excellence to enhance shareholders’ value. At • We are effective and efficient at our tasks the same time, to be a caring and responsible • We practise continuous improvement employer mindful of our social responsibility • We provide reliable and timely service • We embrace Information and Communication Technology (ICT) • We are also profit-orientated 4 S P SETIA BERHAD GROUP Annual Report 2013 RICHLY Annual Report 2013 S P SETIA BERHAD GROUP 5 RICHLY 6 | Performance Review S P SETIA BERHAD GROUP Annual Report 2013 CORPORATE PROFILE MADE IN MALAYSIA THE S P SETIA story BEGAN IN 1974, WHEN THE company was incorporated AS A CONSTRUCTION company. IT was LISTED ON THE KUALA LUMPUR Stock EXCHANGE (NOW BURSA Malaysia) IN 1993. IN 1996, IT REFOCUSED ITS CORE BUSINESS TO PROPERTY DEVELOPMENT WITH supporting BUSINESSES IN CONSTRUCTION, INFRASTRUCTURE AND WOOD-BASED MANUFACTURING. Today, S P Setia is recognised as Malaysia’s Starting with its first project, Pusat Bandar S P Setia’s product and service quality is leading listed real estate player with a Puchong, the Group has grown from strength recognised by the industry and attested by proven track record of innovation-driven to strength, setting industry benchmarks its No.1 ranking in The Edge Malaysia Top and standard-setting developments. The through innovative and high quality lifestyle Property Developers Awards which it won for Group’s strength lies in its prowess in offerings that has won it awards and the 8th time in 2013. No other developer has creating meaningful environments based on accolades both locally and internationally. achieved this feat since the inception of the its development philosophy of Live Learn awards, which is given by The Edge Malaysia, Work Play. Its extensive portfolio includes S P Setia is the only Malaysian developer to the country’s leading business weekly paper. townships, eco sanctuaries, luxury residences, be recognised five times by the International business parks, as well as commercial and Real Estate Federation (FIABCI). Locally, the The Group has made it the Aon Hewitt Best retail developments. Group has garnered nine FIABCI Malaysia Employers list five times since 2003. In 2011, Property Awards, the latest being Best Retail the Group also emerged as the Overall Best In Malaysia, the Group boasts a strong Development for Setia City Mall in 2013. Employer in Malaysia and among one of the presence in the key urban centres of the Best Employers in Asia Pacific. In 2013, the Klang Valley, Johor Bahru/Iskandar Malaysia Group was recognised as Malaysia’s Best of and Penang. It also has a growing presence the Best Employer in the same study. in Sabah. Annual Report 2013 S P SETIA BERHAD GROUP Performance Review | 7 AN INTERNATIONAL BRAND In 2007, S P Setia made its maiden foray overseas when In April 2012, S P Setia was invited by the Malaysian Government to lead the Vietnam’s top state-owned conglomerate, Becamex Malaysian consortium formed to jointly develop the China-Malaysia Qinzhou IDC Corp, chose S P Setia as its joint-venture partner to Industrial Park (QIP). launch its 558-acre, USD880 million township project. Known as EcoLakes, this ground-breaking eco sanctuary located 40km outside Ho Chi Minh City, was named First IN SEPTEMBER OF THE SAME YEAR, Runner-up in the FIABCI Prix d’Excellence Award for Best S P SETIA ENTERED THE UNITED Development Master Plan in 2010. Following this success, the Group launched a mixed development project called KINGDOM, ACQUIRING LONDON’S ICONIC EcoXuan Lai Thieu in Tuan An District, Binh Doung Battersea POWER Station THROUGH Province. A JOINT-VENTURE consortium WITH In 2009, S P Setia established an office in Singapore and SIME DARBY AND THE EMPLOYEES two years later, acquired a 29,440 sq ft site to develop a high-rise condominium called 18 Woodsville. The PROVIDENT FUND. THE PROJECT HAS successful launch of this project spurred the developer to BEEN A TREMENDOUS SUCCESS WITH acquire another parcel of land on Chestnut Avenue for the luxury high-rise project of Eco Sanctuary. PRODUCTS BEING BROUGHT to MARKET IN A RECORD-BREAKING FOUR MONTHS In November 2011, the Group launched its first project in Australia, Fulton Lane in Melbourne, to great acclaim. AND AN UNPRECEDENTED 95% SOLD This high-rise condominium with distinctive architecture WITHIN THREE WEEKS. provided by the acclaimed Karl Fender of Fender Katsalidis Architects will enhance the northern end of the CBD by In 2013, the Group launched its second project in Melbourne, this time on the offering quality dwellings as well as contributing to the upmarket St Kilda Road, for an exclusive luxury apartment development named city’s unique laneway culture. Parque. 8 | Performance Review S P SETIA BERHAD GROUP Annual Report 2013 NORTHERN REGION • Setia Pearl Island • Setia Vista • Setia Greens • Setia V Residences • 11 Brook Residences • Setia Raintrees Residences • Setia Sky Vista • Setia Sky Hill • Setia Sky Cube GLOBAL • Setia Eco Forest PRESENCE Annual Report 2013 S P SETIA BERHAD GROUP Performance Review | 9 CENTRAL REGION SOUTHERN REGION VIETNAM LONDON • Setia Alam • Bukit Indah Johor • EcoLakes • Battersea Power Station • Setia Eco Park • Setia Indah • EcoXuan • Setia City • Setia Tropika MELBOURNE • Setia Sky Residences • Setia Eco Gardens SINGAPORE • Fulton Lane • Dwiputra Residences • Setia Eco Cascadia • 18 Woodsville • Parque • SetiaWalk • Setia Business Park I & II • Eco Sanctuary • KL Eco City • Setia Sky 88 • Setia EcoHill JAKARTA • Setia Eco Glades EASTERN REGION • Representative Office • Kenny Hills Grande • Aeropod • Setia Federal Hill CHINA • Duta Nusantara • Qinzhou Industrial Park • Duta Tropika • Setiahills • Setia Eco Templer • Setia Sky Seputeh 10 | Performance Review S P SETIA BERHAD GROUP Annual Report 2013 Net Profit Increased by from8% Previous Year GROUP FINANCIAL SUMMARY GROUP FIVE-YEAR SUMMARY Year Ended 31 October (RM’000) 2013 2012 2011 2010 2009 Revenue 3,060,528 2,526,595 2,232,473 1,745,870 1,408,415 Profit Before Tax 570,343 567,505 430,594 330,967 231,112 Profit Attributable to Shareholders 417,858 393,816 327,973 251,813 171,233 Paid-Up Capital 1,844,034 1,504,250 1,374,554 762,606 762,604 Shareholders’ Equity 5,525,543 4,043,874 3,446,442 2,189,273 2,037,221 Total Assets Employed 12,441,762 9,353,304 5,585,657 4,386,062 3,952,251 Total Net Tangible Assets 5,472,568 4,027,412 3,439,486 2,189,352# 2,037,578# Earnings Per Share (sen) 17.9 20.5 19.2 16.5^ 11.2^ Dividend Per Share (sen) - Tax dividend 1.6 14.0 14.0 20.0 14.0 - Single Tier dividend 9.4 - - - - Net Tangible Assets Per Share (RM) 2.25 2.01 1.88 1.43^ 1.33^ Return on equity (%) 7.56 9.74 9.52 11.50 8.41 Net gearing ratio (times) 0.41 0.58 N/A 0.26 0.27 Dividend payout ratio (%) 62.4 61.2 59.8 60.7 62.4 Share Price - High (RM) 3.99 4.10 4.62 5.27 4.62 Low (RM) 2.98 3.49 2.97 3.51 2.39 GROUP QUARTERLY SUMMARY QUARTER ENDED (RM’000) 31 OCTOBER 31 JULY 30 APRIL 31 JANUARY 2013 2013 2013 2013 Revenue 900,168 761,506 711,304 687,550 Profit Before Tax 179,594 144,450 130,130 116,169 Profit Attributable to Shareholders 127,293 101,882 95,770 92,913 Paid-Up Capital 1,844,034 1,844,034 1,844,034 1,603,509 Shareholders’ Equity 5,525,543 5,464,777 5,499,458 4,529,681 Total Assets Employed 12,441,762 12,272,740 11,634,487 9,725,486 Total Net Tangible Assets 5,472,568 5,421,210 5,465,923 4,505,751 Earnings Per Share (sen) 5.2 4.1 4.0 4.6 Dividend Per Share (sen) - Tax dividend - - 1.6 - - Single Tier dividend 7.0 - 2.4 - Net Tangible Assets Per Share (RM) 2.25 2.22 2.24 2.12 ^ The comparative figures for earnings per share have been adjusted to take into account the issuance of bonus shares in the financial year ended 31 October 2011.