Australia United Kingdom
YTL CORPORATION BERHAD 92647-H ANNUAL REPORT 2002
YTL Corporation Berhad 92647-H advancing infrastructure since 1955 Yeoh Tiong Lay Plaza 55 Jalan Bukit Bintang 55100 Kuala Lumpur Malaysia
tel 603 2142 6633 fax 603 2141 2703 web www.ytlcommunity.com the journey continues…
REVENUE PROFIT BEFORE PROFIT AFTER TAXATION TAXATION
98 99 00 01 02 98 99 00 01 02 98 99 00 01 02
PROFIT AFTER TAXATION SHAREHOLDERS’ FUNDS EARNINGS AND MINORITY INTEREST PER SHARE (SEN)
98 99 00 01 02 98 99 00 01 02 98 99 00 01 02
DIVIDEND TOTAL ASSETS NET TANGIBLE ASSETS PER SHARE (SEN) PER SHARE (RM)
98 99 00 01 02 98 99 00 01 02 98 99 00 01 02
FINANCIAL HIGHLIGHTS
RM’ 000 1998 1999 2000 2001 2002
Revenue 2,358,500 2,119,350 2,109,698 2,326,045 2,567,941 Profit before taxation 598,500 705,382 735,214 721,959 797,553 Profit after taxation 412,474 630,184 551,140 542,158 586,483 Profit after taxation & minority interest 268,289 411,843 382,516 330,871 362,365 Shareholders’ funds 3,428,299 3,801,495 4,090,060 4,139,824 4,609,102 Earnings per share (sen) 18.26 27.71 25.69 22.49 24.99 Dividend per share (sen) 2.5 10.00 5.0 5.0 7.5 Total assets 8,553,300 9,488,378 10,107,436 10,516,834 20,534,760 Net tangible assets per share (RM) 2.76 3.04 2.70 2.73 3.00 a leading integrated infrastructure development corporation
CONTENTS
Corporate 5 Notice of Annual General Meeting 9 Notice of Book Closure 11 Statement Accompanying Notice of Nineteenth Annual General Meeting 12 Corporate Information 14 Profile of the Board of Directors 20 Statement of Directors’ Responsibilities 21 Audit Committee Report 24 Chairman’s Statement Operations Review 34 Power Generation 38 Integrated Water & Sewerage Facilities 42 Cement Manufacturing Financial Statements 46 Construction Contracting 98 Directors’ Report 50 Property Development 113 Statement by Directors 54 Hotel Development & Management 113 Statutory Declaration 58 IT & e-Commerce Initiatives 114 Auditors’ Report 62 Statement on Corporate Governance 115 Income Statements 69 Statement on Internal Control 116 Balance Sheets 74 Corporate Events 118 Consolidated Statement of Changes in Equity 78 Analysis of Share/Warrant Holdings 120 Statement of Changes in Equity 84 Statement of Directors’ Interests 121 Cash Flow Statements 88 List of Properties 129 Notes to the Financial Statements world-class products & services at third-world prices the journeycontinues… 4, 5
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT THE NINETEENTH ANNUAL GENERAL MEETING OF YTL CORPORATION BERHAD WILL BE HELD AT STARHILL 2, LEVEL 4, JW MARRIOTT HOTEL KUALA LUMPUR, 183 JALAN BUKIT BINTANG, 55100 KUALA LUMPUR ON WEDNESDAY, THE 18TH DAY OF DECEMBER , 2002 AT 3.00PM TO TRANSACT THE FOLLOWING BUSINESS:-
AS ORDINARY BUSINESS 4 To re-elect the following Directors ORDINARY RESOLUTION 2 1 To receive the Audited Financial who retire pursuant to Section 7 Proposed Authority to Allot Statements for the year ended 129(6) of the Companies Act, Shares Pursuant to Section 132D 30 June 2002 together with 1965 and to hold office until the of the Companies Act, 1965 the Reports of the Directors and next Annual General Meeting:- “THAT subject to the Companies Auditors thereon; Act, 1965 and the Articles RESOLUTION 1 i Y Bhg Tan Sri Dato’ Seri (Dr) of Association of the Company, Yeoh Tiong Lay the Directors be and are hereby 2 To sanction the declaration of RESOLUTION 6 authorised to allot and issue a First and Final Dividend of 15% ii Y Bhg Dato’ (Dr) Yahya Bin Ismail shares in the Company at any gross less Malaysian Income Tax RESOLUTION 7 time until the conclusion of the in respect of the financial year next Annual General Meeting and ended 30 June 2002; 5 To re-appoint the Auditors and upon such terms and conditions RESOLUTION 2 to authorise the Directors to fix and for such purposes as the their remuneration. Directors may, in their absolute 3 To re-elect the following RESOLUTION 8 discretion, deem fit provided Directors who retire pursuant that the aggregate number to Article 77 of the Company’s AS SPECIAL BUSINESS of shares to be issued does not Articles of Association:- To consider and, if thought fit, exceed ten per centum (10%) pass the following resolutions:- of the issued and paid-up share i Y Bhg Dato’ Yeoh Seok Hong capital of the Company for the RESOLUTION 3 ORDINARY RESOLUTION 1 time being and that the Directors ii Y Bhg Mej Jen (B) Dato’ Haron 6 Directors’ Fee be and are also empowered to Bin Mohd Taib “ THAT the payment of obtain the approval for the listing RESOLUTION 4 a Directors’ Fee amounting and quotation for the additional iii Tuan Syed Abdullah Bin Syed Abd. to RM220,000.00 for the financial shares so issued on the Kadir year ended 30 June 2002 be and Kuala Lumpur Stock Exchange.” RESOLUTION 5 is hereby approved.” RESOLUTION 10 RESOLUTION 9 NOTICE OF ANNUAL GENERAL MEETING (CONT’D)
ORDINARY RESOLUTION 3 as the Directors may deem fit 8 Proposed Issue of Annual Report and expedient in the interests In CD-ROM Format of the Company (“the Proposed “THAT subject to the compliance Share Buy-Back”) provided that:- with the requirements of Kuala Lumpur Stock Exchange a The maximum number of and any other relevant authorities, shares which may be if any, the Company be and purchased and/or held by the is hereby authorised to issue Company at any point of time its Annual Report in CD-ROM pursuant to the Proposed Format for the financial year Share Buy-Back shall not ending 30 June 2003 and that exceed ten per centum (10%) the approval given by the of the total issued and paid-up shareholders of the Company shall share capital of the Company be subject to renewal at the next for the time being quoted on Annual General Meeting.” the KLSE provided always that RESOLUTION 11 in the event that the Company ceases to hold all or any part ORDINARY RESOLUTION 4 of such shares as a result of, 9 Proposed Share Buy-Back amongst others, cancellation “THAT subject to the Company’s of shares, sale of shares on compliance with all applicable the market of the KLSE or rules, regulations, orders distribution of treasury shares and guidelines made pursuant to shareholders as dividend in to the Companies Act, 1965, respect of shares bought back the provisions of the Company’s under the previous Memorandum and Articles of shareholders’ mandate Association and the requirements for share buy-back which was of the Kuala Lumpur Stock obtained at the Annual General Exchange (“KLSE”) and the Meeting held on 28 December approvals of all relevant 2001, the Company shall be authorities, the Company be entitled to further purchase and is hereby authorised, to the and/or hold such additional fullest extent permitted by law, number of shares as shall to buy-back and/or hold from time (in aggregate with the shares to time and at any time such then still held by the Company) amount of ordinary shares of not exceed ten per centum RM0.50 each in the Company (10%) of the total issued and as may be determined by the paid-up share capital of the Directors of the Company from Company for the time being time to time through the KLSE quoted on the KLSE; upon such terms and conditions the journeycontinues… 6, 7
b The maximum amount of funds AND THAT such authority shall to be allocated by the Company commence upon the passing of this pursuant to the Proposed Share resolution, until the conclusion of the Buy-Back shall not exceed the next Annual General Meeting of the sum of retained profits and the Company or the expiry of the period share premium account of the within which the next Annual Company based on its latest General Meeting is required by law audited financial statements to be held unless revoked or varied available up to the date of a by Ordinary Resolution of the transaction pursuant to the shareholders of the Company Proposed Share Buy-Back. in general meeting but so as not to As at 30 June 2002, the prejudice the completion of audited Retained Profits and a purchase made before such expiry Share Premium Account of date; the Company were RM1,475,218,743.00 and AND THAT the Directors RM549,073,205.00 of the Company be and are respectively; and hereby authorised to take all steps as are necessary or c The shares purchased by the expedient to implement or Company pursuant to the to give effect to the Proposed Proposed Share Buy-Back may Share Buy-Back with full powers be dealt with in all or any of the to amend and/or assent to any following manner (as selected conditions, modifications, by the Company):- variations or amendments (if any) as may be imposed by the i the shares so purchased relevant governmental/regulatory may be cancelled; and/or authorities from time to time and ii the shares so purchased with full power to do all such acts may be retained in treasury and things thereafter in for distribution as dividend accordance with the Companies to the shareholders and/or Act, 1965, the provisions of the resold on the market of the Company’s Memorandum and KLSE and/or subsequently Articles of Association and the cancelled; and/or requirements of the KLSE and iii part of the shares so all other relevant governmental/ purchased may be retained regulatory authorities.” as treasury shares with the RESOLUTION 12 remainder being cancelled. NOTICE OF ANNUAL GENERAL MEETING (CONT’D)
ORDINARY RESOLUTION 5 avoidance of doubt, any such SPECIAL RESOLUTION 10 Proposed Shareholders’ Mandate recurrent related party 11 Proposed Amendments to The for Recurrent Related Party transactions entered into by the Articles of Association of The Transactions Company and/or its subsidiaries Company “THAT the Company and/or its with such a Director, major “THAT the deletions, alterations, subsidiaries be and is/are hereby shareholder, person connected modifications, variations and authorised to enter into recurrent with them as specified in section additions to the Articles of related party transactions from 3.1.3 of the circular to Association of the Company time to time with Related Parties shareholders dated 26 November as set out in Appendix 1 of the who may be a Director, a major 2002 prior to the date of this Circular To Shareholders dated shareholder of the Company resolution be and are hereby 26 November 2002 be and and/or its subsidiaries or a person approved and ratified. are hereby approved.” connected with such a Director RESOLUTION 14 or a major shareholder, provided THAT the mandate given by the such transactions as specified in shareholders of the Company section 3.1.3 of the Circular to shall only continue to be in force shareholders dated 26 November until the conclusion of the next 2002 are of a revenue or trading Annual General Meeting of the in nature which are necessary for Company or the expiry of the the day to day operations of the period within which the next Company and/or its subsidiaries Annual General Meeting is and are transacted on terms required to be held pursuant to consistent or comparable with section 143(1) of the Companies market or normal trade practices Act, 1965 ( the “Act”) (but shall and/or based on normal not extend to such extension as commercial terms not more may be allowed pursuant to favourable to the Related Parties section 143(2) of the Act); unless than those generally available to revoked or varied by Ordinary the public and/or will not to the Resolution of the shareholders of detriment of the minority the Company in general meeting.” shareholders and for the RESOLUTION 13 the journeycontinues… 8, 9
NOTICE OF BOOK CLOSURE
NOTICE IS HEREBY GIVEN a Shares deposited into the Notice is also hereby given that the THAT THE REGISTER OF MEMBERS Depositor’s Securities Account Dividend Payment Date of OF THE COMPANY WILL BE before 12.30 pm on the Proposed First and Final CLOSED AT 5.00 PM ON THE 18 December 2002 (in respect of Dividend of fifteen per cent (15%) 20TH DAY OF DECEMBER, 2002 shares which are exempted from gross less Malaysian Income Tax FOR ENTITLEMENT OF THE mandatory deposit); in respect of the financial year ended FOLLOWING:- 30 June 2002, if approved by the b Shares transferred into the shareholders at the forthcoming Proposed First and Final Dividend Depositor’s Securities Account Annual General Meeting, shall be of fifteen per cent (15%) gross less before 12.30 pm on on 17 January 2003. Malaysian Income Tax in respect 20 December 2002 in respect of of the financial year ended 30 June ordinary transfers; and By Order of the Board, 2002 as recommended by the Directors on 29 August 2002. c Shares bought on the Kuala Ho Say Keng Lumpur Stock Exchange on Secretary Further Notice is hereby given a cum entitlement basis that a Depositor shall qualify according to the Rules of the Kuala Lumpur for entitlement only in respect of: Kuala Lumpur Stock Exchange. 26 November 2002
NOTES
A member entitled to attend and vote at the meeting may appoint a proxy, who need not be a member to vote in his stead. Where a member appoints two proxies, the appointments shall be invalid unless he specifies the proportion of his holding to be represented by each proxy. The instrument appointing a proxy or proxies, in the case of an individual, shall be signed by the appointer or his attorney and in the case of a corporation, either under seal or under the hand of an officer or attorney duly authorised in writing. An instrument appointing a proxy shall be deposited at the Registered Office of the Company at least 48 hours before the appointed time for holding the meeting.
Resolution pursuant to Section 132D of the Companies Act, 1965 The Company is actively pursuing business opportunities in prospective areas so as to broaden the operating base and earnings potential of the Company. Such expansion plans may require the issue of new shares not exceeding ten per centum of the Company’s issued share capital. With the passing of the Resolution 10 mentioned above by the shareholders of the Company at the forthcoming Annual General Meeting, the Directors would avoid delay and cost of convening further general meetings to approve issue of such shares for such purposes.
Resolution pursuant to the Authority To Issue Company’s Annual Report in CD-ROM Format In the face of the emerging trend towards information technology, and with the objective to leverage and take advantage of the new technologies, the Company has taken a step further to issue its annual reports in Compact Disc-Read Only Memory (CD-ROM) format. The issue of annual reports in CD-ROM format would not only provide savings in printing and storage costs for the Company but also increase administrative efficiency and reduce postages involved in the despatch of the annual reports to shareholders.
The passing of Resolution 11 as set out in the notice of the Nineteenth Annual General Meeting of the Company would approve the issue of the Company’s Annual Report for the financial year ending 30 June 2003 in CD-ROM format. Shareholders approval will be sought on yearly basis if the Company decides to issue its annual report in CD-ROM format for future years.
Shareholders are however informed that printed copy of the Annual Report 2003 will be available upon request, whether verbal or written and a contact number will be designated to attend to shareholders’ requests. Shareholders who require assistance or encounters any problems with the CD-ROM can contact Mr Lee Chew Keat (Registrar) or Mr John Ho (Senior IT analyst) at telephone number (03) 2142 6633, ext 8651/8366.
Resolution pertaining to the Authority To Buy-Back Shares of the Company For Resolution 12, further information on the Share Buy-Back is set out in the Circular to Shareholders of the Company dated 26 November 2002 which is despatched together with the Company’s 2002 Annual Report.
Resolution pertaining to the Recurrent Related Party Transactions For Resolution 13, further information on the Recurrent Related Party Transactions is set out in the Circular to Shareholders of the Company dated 26 November 2002 which is despatched together with the Company’s 2002 Annual Report.
Resolution pertaining to the Amendments to the Articles of Association For Resolution 14, further information on the Amendments to the Articles of Association is set out in the Circular to Shareholders of the Company dated 26 November 2002 which is despatched together with the Company’s 2002 Annual Report. voted one of Asia’s Best Companies in 2002 the journey c o n t i nues… 10, 11
STATEMENT ACCOMPANYING NOTICE OF NINETEENTH ANNUAL GENERAL MEETING
1 The names of individuals who are standing for re-election
Directors retiring by rotation pursuant to Article 77 of the Articles of Association Y Bhg Dato’ Yeoh Seok Hong Y Bhg Mej Jen (B) Dato’ Haron Bin Mohd Taib Tuan Syed Abdullah Bin Syed Abd. Kadir
Directors retiring pursuant to Section 129(6) of the Companies Act, 1965 Y Bhg Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay Y Bhg Dato’ (Dr) Yahya Bin Ismail
2 Details of Attendance of Directors at Board Meetings
There were five (5) Board meetings held during the financial year ended 30 June 2002. Details of attendance of the Directors are set out in the Directors’ Profile appearing on pages 14 to 19 of the Annual Report.
3 19th Annual General Meeting of YTL Corporation Berhad
Place : Starhill 2, Level 4 JW Marriott Hotel Kuala Lumpur 183 Jalan Bukit Bintang 55100 Kuala Lumpur
Date & Time : 18 December 2002 at 3.00pm
4 Further details of Directors who are standing for re-election
Details of Directors who are standing for re-election are set out in the Directors’ Profile appearing on pages 14 to 19 of the Annual Report. Information relating to the Directors’ securities holdings in the Company and its subsidiaries is presented on page 84 of the Annual Report. BOARD OF DIRECTORS Executive Chairman Y Bhg Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay PSM, SPMS, DPMS, KMN, PPN, PJK Hon D Eng (Heriot-Watt), DBA (Hon) (UMS), Chartered Builder FCIOB, FAIB, FFB, FBIM, FSIET, FBGAM, FMID
Managing Director Y Bhg Tan Sri Dato’ Francis Yeoh Sock Ping PSM, SIMP, DPMS, DPMP, JMN, JP B Sc (Hons) CIV ENG, FFB, F Inst D, MBIM, RIM
Deputy Managing Director CORPORATE INFORMATION Y Bhg Dato’ Yeoh Seok Kian DSSA B Sc (Hons) Bldg, MCIOB, FFB
Y Bhg Dato’ (Dr) Yahya Bin Ismail Y Bhg Dato’ Michael Yeoh Sock Siong ADVISOR TO THE BOARD DPCM, DPMJ, DPMP, KMN DIMP YABM Raja Tun Mohar Bin Raja Bachelor of Veterinary Science BE (Hons), Civil & Structural Engineer, FFB Badiozaman SSM, PMN, PSM, SPCM, SSSA, JMN Y Bhg Mej Jen (B) Dato’ Haron Bin Ms Yeoh Soo Keng BA Cantab Et Oxon Mohd Taib B Sc (Hons) Civil Engineer PSAT, DPMJ, DPMT, DPMK, JMN, PMK, SMT, ADVISOR PIS, PJK, PKB, psc Y Bhg Dato’ Mark Yeoh Seok Kah Y Bhg Datuk Dr Bernard T H Wang DSSA PJN, JMN, KMN Y Bhg Dato’ Yeoh Soo Min LLB (Hons) King’s College London BA (Economics), PhD (Building), FSCA, FCIOB, DSPN Barrister-At-Law (Gray’s Inn) FIARBA, FMIC BA (Hons) Accounting Tuan Syed Abdullah Bin Syed COMPANY SECRETARY Y Bhg Dato’ Yeoh Seok Hong Abd. Kadir Ms Ho Say Keng (MIA 3708) DSPN, JP B Sc (Engineering Production) & BE (Hons) Civil & Structural Engineer, FFB B Com (Economics) the journey c o n t i nues… 12, 13
REGISTERED OFFICE AUDITORS 11th Floor, Yeoh Tiong Lay Plaza Ler Lum & Co. (AF 0276) 55 Jalan Bukit Bintang Chartered Accountants 55100 Kuala Lumpur (Associated worldwide with Jeffreys t 03 2142 6633 Henry International) f 03 2141 2703 PRINCIPAL BANKERS OF THE GROUP BUSINESS OFFICE Affin Bank Berhad 11th Floor, Yeoh Tiong Lay Plaza Alliance Bank Malaysia Berhad 55 Jalan Bukit Bintang Alliance Merchant Bank Berhad 55100 Kuala Lumpur AmBank Berhad t 03 2142 6633 AmMerchant Bank Berhad f 03 2141 2703 Aseambankers Malaysia Berhad Bumiputra-Commerce Bank Berhad THAILAND Citibank Berhad 39th Floor, Paholyothin Place Commerce International Merchant 408 Paholyothin Road Bankers Berhad Bangkok 10400, Thailand Deutsche Bank (Malaysia) Berhad t 662 6190273/76 EON Bank Berhad f 662 6190277 Hong Leong Bank Berhad HSBC Bank Malaysia Berhad REGISTRAR Malayan Banking Berhad 11th Floor, Yeoh Tiong Lay Plaza OCBC Bank (Malaysia) Berhad 55 Jalan Bukit Bintang Pengurusan Danaharta Nasional 55100 Kuala Lumpur Berhad t 03 2142 6633 Public Bank Berhad f 03 2141 2703 RHB Bank Berhad Southern Bank Berhad SOLICITORS Standard Chartered Bank Malaysia Dorairaj, Low & Teh Berhad Lee, Perara & Tan United Overseas Bank (Malaysia) Shook Lin & Bok Berhad
AUDIT COMMITTEE STOCK EXCHANGE LISTING Y Bhg Dato’ (Dr) Yahya Bin Ismail Kuala Lumpur Stock Exchange (Chairman and Independent Non- Main Board (3.4.1985) Executive Director) Tokyo Stock Exchange Y Bhg Mej Jen (B) Foreign Section (29.2.1996) Dato’ Haron Bin Mohd Taib (Independent Non-Executive Director)
Y Bhg Tan Sri Dato’ Francis Yeoh Sock Ping (Group Managing Director) PROFILE OF THE BOARD OF DIRECTORS
Y Bhg Tan Sri Dato' Seri (Dr) Yeoh Malaysian Sabah. He is currently Tiong Lay, Malaysian, aged 72, an EXCO member of the Malaysian was appointed to the Board of the Crime Prevention Foundation Company on 24 June 1984 and is the (“MCPF”) and Vice President of the Executive Chairman since 24 January Malaysian Japanese Economic 1985. He is an entrepreneur Association (“MAJECA”). He is also of remarkable accomplishment and the Honorary Chairman of the Tung a prominent leader in the Malaysian Shin Hospital and is on the Board of construction industry as well as in the Governors for several schools. Asian and Western Pacific regions. Y Bhg Tan Sri was also appointed He is the past President and Lifetime to the Board of YTL Cement Berhad member since 1983 and March 1998, and is the Executive Chairman of the respectively of the International Company since 19 March 1992. Federation of Asian and Western On 21 October 1996 and 31 October Pacific Contractors Association 1996, he was appointed as member (“IFAWPCA”) and the Senior Vice and Executive Chairman to the Board President of the World Contractors’ of YTL Power International Berhad. body, Confederation of International Y Bhg Tan Sri also holds directorship in Contractors’ Association (“CICA”) YTL Industries Berhad, a wholly-owned since March 1998. He represented subsidiary of YTL Corporation Berhad. the IFAWPCA at the Confederation of International Contractors Association Y Bhg Tan Sri Dato’ Seri (Dr) Yeoh convention held in Washington, Tiong Lay is the father of Y Bhg Tan United States of America in 1984. Sri Dato’ Francis Yeoh Sock Ping, His contributions are well recognised Y Bhg Dato’ Yeoh Seok Kian, with the conferment of the title Y Bhg Dato’ Yeoh Soo Min, Y Bhg of Doctor of Engineering by Heriot- Dato’ Yeoh Seok Hong, Y Bhg Dato’ Watt University, Edinburgh, United Michael Yeoh Sock Siong, Ms Yeoh Kingdom in 1988 and his appointment Soo Keng and Y Bhg Dato’ Mark as an Honorary Life President of Yeoh Seok Kah. He has no conflict the Master Builders Association of of interest with the Company and Malaysia in 1988. He is the co-founder he has not been convicted of any and the first Chairman of the ASEAN offences in the past ten (10) years. Constructors’ Federation (“ACF”) and was the President of the Master Of the five Board meetings of the Builders Association of Malaysia for Company held for the financial year the period from 1980 to 1988. ended 30 June 2002, he attended On 26 October 2002, Y Bhg Tan Sri all except for one which he had was conferred the Honorary extended his apologies. Doctorate in Philosophy (Business Administration) by Universiti the journey c o n t i nues… 14, 15
Y Bhg Tan Sri Dato’ Francis Yeoh YTL Power International Berhad He graduated from Heriot-Watt Sock Ping, Malaysian, aged 48, on 18 October 1996 and has been University, Edinburgh, United was appointed to the Board of the Group Managing Director of that Kingdom in 1981 with a Bachelor of the Company on 6 April 1984 as an company since then. On 19 March Science (Hons) Degree in Building. Executive Director and has been the 1992 and 10 May 2001, he was He attended the Advance Managing Director of the Company appointed to the Board of Management Programme conducted since April 1988. Y Bhg Tan Sri Dato’ YTL Cement Berhad and YTL Land by Wharton Business School, Francis Yeoh had his secondary & Development Berhad (formerly University of Pennsylvania in 1984. education in Victoria Institution, known as Taiping Consolidated Y Bhg Dato’ Yeoh Seok Kian is Malaysia in which he was Berhad) respectively. He also serves a fellow of the Faculty of Building, the Head Boy. He obtained his on the Board of YTL Industries United Kingdom as well as a member of Bachelor of Science (Hons) Degree Berhad and YTL e-Solutions Berhad. the Chartered Institute of Building (UK). in Civil Engineering from Kingston He is the current President of the University, United Kingdom in 1978. Y Bhg Tan Sri Dato’ Francis Yeoh Council of Bukit Bintang Shopping He joined Syarikat Pembenaan is the son of Y Bhg Tan Sri Dato’ Seri Centres. He also serves on the Board of Yeoh Tiong Lay Sdn Bhd as a (Dr) Yeoh Tiong Lay and is the brother YTL Industries Berhad, a wholly-owned Director since October 1978 and of Y Bhg Dato’ Yeoh Seok Kian, subsidiary of YTL Corporation Berhad. is presently the Managing Director Y Bhg Dato’ Yeoh Soo Min, Y Bhg of that company. He currently serves Dato’ Yeoh Seok Hong, Y Bhg Dato’ Y Bhg Dato’ Yeoh Seok Kian is the as a Member of the Malaysian Michael Yeoh Sock Siong, Ms Yeoh son of Y Bhg Tan Sri Dato’ Seri (Dr) Business Council, Malaysian Capital Soo Keng and Y Bhg Dato’ Mark Yeoh Tiong Lay and is the brother Market Advisory Council, Malaysian Yeoh Seok Kah. He has no conflict of Y Bhg Tan Sri Dato’ Francis Yeoh Pacific Basin Economic Council, of interest with the Company and Sock Ping, Y Bhg Dato’ Yeoh Soo Malaysian Industry-Government he has not been convicted of any Min, Y Bhg Dato’ Yeoh Seok Hong, Group for High Technology, offences in the past ten (10) years. Y Bhg Dato’ Michael Yeoh Sock Commonwealth Partnership Siong, Ms Yeoh Soo Keng and Y Bhg for Technology Management, He has attended all the five Board Dato’ Mark Yeoh Seok Kah. the Malaysian South-South meetings of the Company held for He has no conflict of interest with Association and The Nature the financial year ended 30 June 2002. the Company and he has not been Conservancy Asia Pacific Council. convicted of any offences in the past He is the International Council Y Bhg Dato’ Yeoh Seok Kian, ten (10) years. Member of The Asia Society and Malaysian, aged 45, was appointed Board Member of SEI for Advanced to the Board on 24 June 1984 as an Of the five Board meetings of the Studies in Management – Wharton Executive Director. He is currently Company held for the financial year School and also Asian Business the Deputy Managing Director of the ended 30 June 2002, he attended Council. He was also the President Company. He is also a director of all except for two which he had of the Kuala Lumpur Symphony YTL Power International Berhad since extended his apologies. Orchestra Society, the Founder 21 October 1996. On 3 February 1987 President of the famous Eastern and 10 May 2001, he was appointed and Orient Express train and the to the Board of YTL Cement Berhad Vice President of the Federal Public and YTL Land & Development Berhad Listed Companies Association. (formerly known as Taiping He was appointed to the Board of Consolidated Berhad) respectively. PROFILE OF THE BOARD OF DIRECTORS (CONT’D)
Y Bhg Dato' (Dr) Yahya Bin Ismail, He has attended all the five Board Y Bhg Dato’ Yeoh Soo Min, Malaysian, aged 74, was appointed meetings of the Company held for the Malaysian, aged 46, was appointed to the Board of the Company financial year ended 30 June 2002. to the Board on 24 June 1984 as on 6 April 1984 as an Independent an Executive Director. She is also Non-Executive Director. He is also Y Bhg Mej Jen (B) Dato’ Haron Bin a Director of YTL Power International a Director of YTL Power International Mohd Taib, Malaysian, aged 68, Berhad since 2 June 1997 and YTL Berhad since 31 October 1996 and was appointed to the Board on Industries Berhad since 18 May YTL Industries Berhad since 3 July 1990 as an Independent 1982. She holds a Bachelor of Art 27 August 1990. He holds a Bachelor Non-Executive Director. He is also (Hons) Degree in Accounting from of Veterinary Science degree from the Director of YTL Power University of North London in 1980. University of Sydney, Australia which International Berhad since She did her Articleship at Leigh Carr he obtained in 1957 and a diploma 31 October 1996. He was enlisted and Partners, London and has gained in Tropical Veterinary Medicine from as an officer cadet at the Royal vast experience in accounting and Edinburgh University, United Military College in Sungei Besi, management. She is currently Kingdom which he obtained in 1963. Kuala Lumpur in 1957 and was responsible for the setting up of the He was formerly with the commissioned as a Second accounting systems and finance for Government and his last Lieutenant at Royal Military Academy the YTL Group. In addition to that, appointment was the Director Sandhurst, England in 1957. Some of she is also responsible for setting up General of the National Livestock his various notable appointments the Travel Division of the YTL Group Authority Malaysia. He was also include the Director of Manpower in December 1990. A Member of the with the Totalisator Board Malaysia Planning in the Ministry of Defence Malaysian Institute of Management. from 1982 to 1990 and served as in 1972, the Chief of Logistic Staff A Committee Member of the Chairman since 1986. Y Bhg Dato’ in 1986 and the Commander of Army Women for Women Association, Yahya sits on the Board of several Logistic Command in 1987. Malaysia since 1990 and the companies including Shell Refining Chairman of the Women in Travel Company (FOM) Bhd since 1978, He does not have any family Industry since 2001. She is one of Killinghall Malaysia Bhd since 15 July relationship with any directors and/or the Governors of International 1978, Southern Bank Bhd since 1983 major shareholder of the Company Students House, London since 1995. and Metroplex Berhad since 1993. and has no conflict of interest with the Company. He has not been Y Bhg Dato’ Yeoh Soo Min is He does not have any family convicted of any offences within the daughter of Y Bhg Tan Sri Dato’ relationship with any directors and/or the past ten (10) years. Seri (Dr) Yeoh Tiong Lay and is the major shareholder of the Company sister of Y Bhg Tan Sri Dato’ Francis and has no conflict of interest with Of the five Board meetings of Yeoh Sock Ping, Y Bhg Dato’ Yeoh the Company. He has not been the Company held for the financial Seok Kian, Y Bhg Dato’ Yeoh Seok convicted of any offences within the year ended 30 June 2002, Hong, Y Bhg Dato’ Michael Yeoh Sock past ten (10) years. he attended all except for two which Siong, Ms Yeoh Soo Keng and Y Bhg he had extended his apologies. Dato’ Mark Yeoh Seok Kah. She has no conflict of interest with the Company the journey c o n t i nues… 16, 17
and has not been convicted of any the construction of the two power offences in the past ten (10) years. stations owned by YTL Power Generation Sdn Bhd. He continues Of the five Board meetings of the to be actively involved in the Company held for the financial year construction activities of the ended 30 June 2002, she attended YTL Group and is also responsible all except for one which she had for developing the power and utility extended her apologies. businesses of the YTL Group. He also serves on the Board of YTL Industries Y Bhg Dato’ Yeoh Seok Hong, Berhad and YTL e-Solutions Berhad. Malaysian, aged 43, was appointed to the Board on 19 June 1985 as Y Bhg Dato’ Yeoh Seok Hong is an Executive Director. He is also the son of Y Bhg Tan Sri Dato’ Seri a Director of YTL Power International (Dr) Yeoh Tiong Lay and is the brother Berhad since 18 October 1996 and of Y Bhg Tan Sri Dato’ Francis Yeoh YTL Land & Development Berhad Sock Ping, Y Bhg Dato’ Yeoh Seok (formerly known as Taiping Kian, Y Bhg Dato’ Yeoh Soo Min, Consolidated Berhad) since 10 May Y Bhg Dato’ Michael Yeoh Sock 2001. He obtained his Bachelor of Siong, Ms Yeoh Soo Keng and Y Bhg Engineering (Hons) Degree in Civil Dato’ Mark Yeoh Seok Kah. He has Engineering from the University no conflict of interest with the Bradford, United Kingdom in 1982. Company and he has not been He is a member of the Faculty of convicted of any offences in the past Building, United Kingdom. ten (10) years. Y Bhg Dato’ Yeoh Seok Hong has vast experience in the construction Of the five Board meetings of industry, being the Executive Director the Company held for the financial responsible for the YTL Group’s year ended 30 June 2002, construction division. A few of the he attended all except for two which testimony of his work in which he he had extended his apologies. acted as the Project Director include the 12 storey Citibank N.A. Headquarters in Kuala Lumpur, the Apera-ULG building at Jalan Raja Chulan, Kuala Lumpur, the 29 storey UMBC Tower Annexe and the 15 storey Bank Negara Building at Kota Kinabalu. When YTL Group was awarded the first Independent Power Producer (“IPP”) license in the country, he was the Director principally responsible for the development of the project and PROFILE OF THE BOARD OF DIRECTORS (CONT’D)
Y Bhg Dato’ Michael Yeoh Sock ended 30 June 2002, he attended Of the five Board meetings of the Siong, Malaysian, aged 42, all except for one which he had Company held for the financial year was appointed to the Board of the extended his apologies. ended 30 June 2002, she attended Company on 19 June 1985 as all except for one which she had an Executive Director. On 21 October Ms Yeoh Soo Keng, Malaysian, extended her apologies. 1996 and 1 September 1985, he was aged 39, was appointed to the Board appointed to the Board of YTL Power on 16 May 1996 as an Executive Y Bhg Dato’ Mark Yeoh Seok Kah, International Berhad and YTL Cement Director. She graduated with Malaysian, aged 37, was appointed Berhad respectively. He graduated a Bachelor of Science (Hons) in Civil to the Board of the Company on from the Bradford University, United Engineering from Leeds University, 22 June 1995. He graduated from Kingdom in 1983 with a Bachelor of United Kingdom in 1985. She was King’s College, University of London Engineering (Hons) Civil & Structural the project director involved in the with an LLB (Hons) and was Engineering Degree. He is primarily construction of the Yeoh Tiong Lay subsequently called to the Bar at responsible for YTL Group’s Plaza, the British High Gray’s Inn, London on 28 July 1988. Manufacturing Division which Commissioner’s residence, He chambered at Messrs Shook Lin activities involve cement Kuala Lumpur, the Design & Build & Bok and in August 1989, he joined manufacturing, ready-mixed concrete, of the National Art Gallery in Kuala YTL Group. He is presently the transportable cabins and other Lumpur, construction of the Selangor Executive Director responsible for the building material industries. He is also Medical Centre in Shah Alam, Pahang Hotels and Resorts Division of the currently sitting on the Board of YTL Cement and Slag Cement plants. YTL Group. He is also a Director of Industries Berhad, YTL e-Solutions She is currently responsible for the YTL Power International Berhad since Berhad, YTL Land & Development procurement of building materials and 21 October 1996 and represents the Berhad (formerly known as Taiping sales and marketing of cement and YTL Group on the Board of Eastern & Consolidated Berhad) and Sentul Raya related products for the YTL Group. Oriental Express Limited, a company Golf Club Berhad. She is also a Director of YTL Cement incorporated in Bermuda, which owns Berhad and YTL Power International and operates the Eastern & Oriental Y Bhg Dato’ Michael Yeoh is the son Berhad since 23 August 1995 and Express luxury train service between of Y Bhg Tan Sri Dato’ Seri (Dr) 2 June 1997 respectively. Bangkok and Singapore. He also Yeoh Tiong Lay and is the brother serves on the Board of YTL Land & of Y Bhg Tan Sri Dato’ Francis Yeoh Ms Yeoh Soo Keng is the daughter Development Berhad (formerly Sock Ping, Y Bhg Dato’ Yeoh Seok of Y Bhg Tan Sri Dato’ Seri (Dr) Yeoh known as Taiping Consolidated Kian, Y Bhg Dato’ Yeoh Soo Min, Tiong Lay and is the sister of Y Bhg Berhad) and YTL e-Solutions Berhad. Y Bhg Dato’ Yeoh Seok Hong, Tan Sri Dato’ Francis Yeoh Sock Ping, Ms Yeoh Soo Keng and Y Bhg Dato’ Y Bhg Dato’ Yeoh Seok Kian, Y Bhg Y Bhg Dato’ Mark Yeoh is the son Mark Yeoh Seok Kah. He has no Dato’ Yeoh Soo Min, Y Bhg Dato’ of Y Bhg Tan Sri Dato’ Seri (Dr) Yeoh conflict of interest with the Company Yeoh Seok Hong, Y Bhg Dato’ Michael Tiong Lay and is the brother of Y Bhg and he has not been convicted of any Yeoh Sock Siong and Y Bhg Dato’ Tan Sri Dato’ Francis Yeoh Sock Ping, offences in the past ten (10) years. Mark Yeoh Seok Kah. She has no Y Bhg Dato’ Yeoh Seok Kian, conflict of interest with the Company Y Bhg Dato’ Yeoh Soo Min, Y Bhg Of the five Board meetings of the and has not been convicted of any Dato’ Yeoh Seok Hong, Y Bhg Dato’ Company held for the financial year offences in the past ten (10) years. Michael Yeoh Sock Siong and the journey c o n t i nues… 18, 19
Ms Yeoh Soo Keng. He has no a Bachelor of Commerce (Economics) the Board of YTL Power International conflict of interest with the Company Double Degree. He has extensive Berhad, YTL e-Solutions Berhad, and he has not been convicted of any experience in banking and financial Iris Corporation Berhad, Malaysian offences in the past ten (10) years. services, having been with Bumiputra South-South Corporation Berhad and Merchant Bankers Berhad from 1984 AE Multi Holdings Berhad. Of the five Board meetings of the to 1994, holding the position of Company held for the financial year general manager immediately prior He does not have any family ended 30 June 2002, he attended to his departure from the Bank. relationship with any directors and/or all except for two which he had Prior to joining YTL Corporation major shareholder of the Company extended his apologies. Berhad Group, he was the general and has no conflict of interest with the manager of Amanah Capital Partners Company. He has not been convicted Tuan Syed Abdullah Bin Syed Abd. Berhad (formerly known as South of any offences within the past ten Kadir, Malaysian, aged 48, East Asia Development Corporation (10) years. was appointed to the Board on Berhad), a public listed company with 20 October 1999 as an Executive subsidiaries involved in, inter alia, Of the five Board meetings of the Director. He graduated from the discount, money broking, unit trusts, Company held for the financial year University of Birmingham in 1977 finance and fund management ended 30 June 2002, he attended with a Bachelor of Science operations from November 1994 all except for one which he had (Engineering Production) and to February 1996. He also serves on extended his apologies.
Details of Attendance of Directors at Board Meetings
During the financial year, a total of 5 Board Meetings were held and the details of attendance are as follows:-
Attendance
Y Bhg Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay 4 Y Bhg Tan Sri Dato’ Francis Yeoh Sock Ping 5 Y Bhg Dato’ Yeoh Seok Kian 3 Y Bhg Dato’ (Dr) Yahya Bin Ismail 5 Y Bhg Mej Jen (B) Dato’ Haron Bin Mohd Taib 3 Y Bhg Dato’ Yeoh Soo Min 4 Y Bhg Dato’ Yeoh Seok Hong 3 Y Bhg Dato’ Michael Yeoh Sock Siong 4 Ms Yeoh Soo Keng 4 Y Bhg Dato’ Mark Yeoh Seok Kah 3 Tuan Syed Abdullah Bin Syed Abd. Kadir 4 STATEMENT OF DIRECTORS’ RESPONSIBILITIES in respect of the audited financial statements
The Directors are required by law to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Group and of the Company at the end of the financial year and of the results and cash flows of the Group and of the Company for the financial year then ended.
The Directors consider that, in preparing the financial statements for the financial year ended 30 June 2002, the Group has used appropriate accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent. The Directors also consider that all applicable approved accounting standards have been followed and confirm that the financial statements have been prepared on a going concern basis.
The Directors are responsible for ensuring that the Group and the Company keep accounting records which disclose with reasonable accuracy at any time the financial position of the Group and of the Company and which enable them to ensure that the financial statements comply with the provisions of the Companies Act, 1965 and the applicable approved accounting standards in Malaysia. the journey c o n t i nues… 20, 21
AUDIT COMMITTEE REPORT
MEMBERS Primary Purposes Y Bhg Dato’ (Dr) Yahya Bin Ismail (Chairman/Independent Non-Executive The Committee shall: Director) 1 Provide assistance to the Board Y Bhg Mej Jen (B) Dato’ Haron Bin in fulfiling its fiduciary Mohd Taib (Member/Independent responsibilities relating to the Non-Executive Director) corporate accounting and practices of YTL Corporation Berhad and all Y Bhg Tan Sri Dato’ Francis Yeoh Sock its wholly and majority owned Ping (Member/Executive Director) subsidiaries (“Group”).
TERMS OF REFERENCE 2 Maintain through regularly Composition scheduled meetings, a direct line of communication between the The Board shall elect an Audit Board and the external auditors as Committee, comprising at least three well as internal auditors. directors, the majority of whom shall be independent of senior 3 Avail to the external and internal management and operating auditors a private confidential executives of the holding company audience at any time when the or any of its subsidiaries and desire and request is made unencumbered by any relationships through the committee chairman, that might, in the opinion of the Board with or without the prior of Directors be considered to be knowledge of the Management. a conflict of interest. 4 Act upon the Board of Directors’ One of the members, who is not an request to investigate and report executive director or employee of the on any issues or concerns in regard Company or its related corporations, to the management of the Group. shall be appointed Chairman by the Board of Directors. In the absence of 5 Review existing practices and such an appointment, one of the recommend to Management to members shall be elected Chairman formalise an ethics code for all by the committee members. executives and members of the staff of the Group. AUDIT COMMITTEE REPORT (CONT’D)
Functions 7 The firm of external auditors retained by the Group, and the The Committee shall review, appraise committee’s recommendation and report to the Board on:- to retain or replace such firm in the ensuing year. 1 The quality and effectiveness of the entire accounting and internal Meetings control system. The Audit Committee shall hold at 2 The adequacy of the audit effort least two (2) meetings per year, and by both the external and internal such additional meetings as the auditors. Chairman shall, in his discretion, deem necessary. 3 The propriety of accounting policies adopted by Management The Audit Committee may invite any and accepted by external auditors, person(s) to be in attendance to assist where alternatives are also in its deliberation. acceptable. Upon request by the auditors, 4 Any significant difficulties the Chairman shall convene a meeting encountered or material of the committee to consider any discoveries made by the external matters the auditors believe should be auditors or internal auditors. brought to the attention of the directors or shareholders. 5 The adequacy of the disclosure of information essential to a fair The Audit Committee may regulate its and full presentation of the own procedure and in particular the financial affairs of the Group. calling of meetings, the notice to be given of such meetings, the voting and 6 The effects of any changes proceedings thereat, the keeping of in accounting principles or of any minutes and the custody, production developments emanating from and inspection of such minutes. the accounting profession or any statutory authority. A quorum shall be two (2) members.
The Secretary to the Audit Committee shall be the Company Secretary. the journey c o n t i nues… 22, 23
ACTIVITIES In line with the terms of reference 4 Review of the quarterly unaudited of the Committee, the following financial results announcements activities were carried by the and recommending for the Board Committee during the year ended of Directors’ approval. 30 June 2002 in discharging its functions:- 5 Reviewing the audited financial statements before recommending 1 Review of the external auditors’ for the Board of Directors’ scope of work and their audit plan. approval.
2 Reviewing with the external 6 Reviewing the Company’s auditors on the results of their compliance with the Listing audit, the audit report and internal Requirements of the Kuala Lumpur control recommendations in Stock Exchange and the applicable respect of control weaknesses approved accounting standards noted in the course of their audit. issued by the Malaysian Accounting Standards Board. 3 Review of internal control procedures.
Number of Meetings Held and Details of Attendance
During the financial year, a total of 5 Audit Committee Meetings were held and the details of attendance are as follows:-
Attendance
Y Bhg Dato’ (Dr) Yahya Bin Ismail 5 Y Bhg Mej Jen (B) Dato’ Haron Bin Mohd Taib 3 Y Bhg Tan Sri Dato’ Francis Yeoh Sock Ping 5 CHAIRMAN’S STATEMENT for the Year Ended 30 June 2002
ON BEHALF OF THE BOARD OF DIRECTORS OF YTL CORPORATION BERHAD, I HAVE THE PLEASURE OF PRESENTING TO YOU THE ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS OF THE GROUP AND THE COMPANY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2002.
Y Bhg Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay
Executive Chairman the journey c o n t i nues… 24, 25
OVERVIEW a 40% interest in the 60-year concession for the 57-kilometre The financial performance for the year ended 30 June 2002 Express Rail Link operating between Kuala Lumpur International reflects the prudence of the Group’s strategy of developing Airport and Kuala Lumpur Sentral, which was completed and acquiring regulated assets operating under long term during the year under review. In addition, the Group currently concessions both in Malaysia and overseas, in countries such owns a 33.5% stake in ElectraNet Pty Limited (“ElectraNet”), as Australia and the United Kingdom. the 200-year concession to operate the South Australian electricity transmission grid. The Group’s acquisition of the British water utility, Wessex Water Limited (“Wessex Water”), during the year under In May this year, the Group successfully completed its review marks the next stage in developing our global utilities acquisition of a 100% stake in Wessex Water, a £1.24 billion business. This is the Group’s second major investment utility, providing water and sewerage facilities within an area abroad in the utilities industry and one of the largest foreign of 10,000 square kilometres in the south west of England and investments ever undertaken by a Malaysian company. operating under a license granted by the UK Government. The acquisition of Wessex Water signifies the financial and management capability of Malaysian companies to invest Wessex Water in developed countries. Wessex Water is the regional water and sewerage company serving an area in the south west of England covering Regulated Businesses, Long-Term Concessions 10,000 square kilometres. This area includes Bristol, Dorset, The Group’s growth policy is centred around the rationale Somerset, most of Wiltshire and parts of Gloucestershire, that regulated businesses operating under long-term Hampshire and Devon. concessions offer unrivalled economic benefits and investment opportunities. This acquisition strategy ensures Wessex Water supplies 1.2 million customers with up to that the financial performance of the assets acquired 385 million litres of water every day. The water is distributed is enhanced by a solid business profile, stable cash flows, to 500,000 properties in the region through a distribution a supportive regulatory regime, and the company’s virtual network that includes 135 water sources, 95 treatment monopoly position in its area of operation. These assets also plants, 320 service reservoirs and more than 11,000 yield highly predictable operating costs and revenue streams, kilometres of water mains. which in turn produce predictable cashflows and profits. The company also takes away sewage from 2.5 million people As a result of this strategy, the Group holds 21-year in the Wessex Water region. The sewage together with concessions to supply electricity to Tenaga Nasional Berhad industrial waste water is treated by 392 treatment plants, from its power stations in Pasir Gudang and Paka and utilising a network of 1,314 pumping stations, over 15,000 kilometres of sewers and 1,090 combined sewer outflows. CHAIRMAN’S STATEMENT (CONT’D)
World Class Products and Services at Third World Prices As the Group forges ahead in the enhancement of its core competency of technology-based integrated infrastructure development, our underlying philosophy is always to provide world class products and services at third world prices. This credo has seen the Group’s customer base continue to grow by leaps and bounds.
The YTL Group’s Expanding Customer Base – 10 Million & Growing • Wessex Water provides water services for 1.2 million customers and sewerage facilities for 2.5 million customers within an area of 10,000 square kilometres;
• The ERL has the capacity to serve 3-5 million passengers per annum, and carried 500,000 passengers in the first 6 months of commercial operations;
• ElectraNet provides the electricity transmission grid for Adelaide and the State of South Australia, an area the size of Western Europe, serving 1.2 million customers;
• The Group’s estimated 17,500 residential properties, completed or currently under construction, house a population of more than 88,000 customers.
• Bintang Walk & Hotels – YTL hotels, shopping complexes and restaurants cater to an estimated 6 million customers annually. the journey c o n t i nues… 26, 27
New Urban Living Concepts In December 2001, the Group was credited for Overall In line with the Group’s reputation for developing innovative Leadership by Far Eastern Economic Review when the concepts in property development, the fifth phase of the Pantai magazine released the results of its annual Review Hillpark condominiums, Andalucia, was launched in March this 200: Asia’s Leading Companies. This was followed in March year. Andalucia comprises low rise condovillas and features 2002 by Finance Asia’s assessment of Asia’s Best unique Mediterranean-style landscaping and architecture. Companies 2002 in which the Group won recognition in The first four phases of the Pantai Hillpark project have been the categories of Best Managed Company, Company Most successfully completed and handed over since the first launch Committed to Corporate Governance, Best at Investor in 1991, with continuously strong take-up rates due to the Relations, Strongest Commitment to Enhancing Shareholder quality and aesthetic appeal of the concept. Value and Best Financial Management.
The Group also unveiled the much-anticipated new In June 2002, Group subsidiary,YTL Cement Berhad, Masterplan for the Sentul Raya urban renewal project in April (‘YTL Cement”) was awarded the inaugural Smart 2002. Under the brand name of Sentul, the Masterplan Investor–KPMG Malaysia Annual Shareholders’ Value Award. focuses on two separate and distinct living concepts based Winners were selected on the basis of share price on luxury condominiums in Sentul West with an exclusive performance, dividends, earnings growth, value management gated park akin to those in London, and in Sentul East, and exemplary shareholder value, coupled with a clear high-ceilinged lofts and courtyard tenements similar to those management vision to bring measurable worth and benefits in New York. to shareholders. YTL Cement was selected as the Overall Winner of this award, in addition to winning in its category Exemplary Shareholder Value of Industry Markets. YTL Cement was also selected as one of Dedication to shareholder value has been fundamental to the the Forbes Global 200 Best Under a Billion companies, which Group’s achievements to date. During the year under review, is an assessment of the best small companies in all markets the Group was selected by various international organisations around the globe. in their independent assessments of the governance standards of companies in this region. These awards augur well with the Group’s commitment to enhancing shareholder value and rewarding shareholders for their faith and investment in the YTL brand. CHAIRMAN’S STATEMENT (CONT’D)
YTL e-Solutions Berhad Listing Debut Asian Global Leadership Forum In July 2002, YTL e-Solutions Berhad (“YTL e-Solutions”) The Group was honoured this year to play host to the Asian became the newest listed company of the Group when it Global Leadership Forum, in conjunction with CNBC Asia was listed on the Malaysian Exchange of Securities Dealing Pacific, Forbes Inc., and the Asian Strategy & Leadership and Automated Quotation (Mesdaq), which was specifically Institute (ASLI), which took place in September this year. developed to promote technology intensive companies. YTL e-Solutions is the first technology incubator to be listed Aimed at seeking new solutions for the restoration of peace on the Mesdaq, and with a paid-up capital of RM135 million, following the events of September 11th, the Forum saw one of the largest as well. 200 industry leaders and CEOs from the most successful companies around the world congregate at Pangkor Laut The Group proceeded cautiously in the listing of YTL Resort for the inaugural forum. Co-chaired by Mr. Steve e-Solutions and as a result, was able to avoid the fallout from Forbes, President and CEO of Forbes Inc. and Editor-in-Chief the bursting of the dotcom bubble in the international markets. of Forbes Magazine, Mr. Mirzan Mahathir, President of ASLI, and Tan Sri Dato’ Francis Yeoh Sock Ping, Managing Director September 11th of YTL Corporation, the forum was privileged to have as its The September 11th World Trade Centre tragedy impacted guest-of-honour YAB Dato’ Seri Dr Mahathir Mohamad, directly on our Hotels division, particularly in respect of Prime Minister of Malaysia. customer travel origins. Cancellation of travel plans for customers originating in Europe and the US immediately The Concert of Peace held in conjunction with the Asian following the attacks was widespread and took the longest Global Leadership Forum, saw a stunning performance by period to recover. Travellers originating from other areas Luciano Pavarotti, soprano Cynthia Lawrence and flautist cancelled their plans at a much lower initial frequency and Andrea Griminelli, which enthralled the audience and returned to normal business levels much sooner. reinforced the Forum’s theme of peace and friendship.
That the impact of September 11th could resonate so FINANCIAL PERFORMANCE strongly even here in Malaysia emphasises the inescapable YTL Corporation recorded profit before taxation of RM797.6 reality of globalisation, and it was with this in mind that the million for the year ended 30 June 2002, representing Group proposed its Pangkor Laut Resort as the venue for this an increase of 10.5% over the previous financial year. year’s Asian Global Leadership Forum. The Group registered revenue of RM2,567.9 million for the current financial year to date, an increase of 10.4% over the the journey c o n t i nues… 28, 29
year ended 30 June 2001. The improvement in revenue is attributed substantially to growing demand for cement as the construction industry recovers and the acquisition of the Wessex Water Group.
The financial performance for the year under review reflects the success of the Group’s strategy of developing and acquiring regulated assets operating under long-term concessions in Malaysia, Australia and the United Kingdom.
DIVIDEND The Board of Directors of YTL Corporation is pleased to recommend for approval of the shareholders, a First and Final Dividend of 15% less 28% tax for the year ended 30 June 2002.
This 50% increase in dividends from 10% to 15% is recommended in light of the Group’s performance for the year under review. This is in line with the Group’s policy of rewarding shareholders and enhancing shareholder value, in order to attain a dividend policy akin to those of leading international companies. This policy has also enabled the Group to sustain dividend yields which are much higher than prevailing interest rates, thereby further rewarding shareholders by increasing the value of their investment.
CORPORATE GOVERNANCE & INTERNAL CONTROLS On this note we have included statements on Corporate Governance and Internal Controls in our Annual Report, which serve to articulate the Group’s long-standing commitment to corporate governance, risk management and preserving the value of shareholders’ investment in the Group. CHAIRMAN’S STATEMENT (CONT’D)
FINANCIAL REPORTING In presenting the annual financial statements and quarterly announcements to shareholders, the Board of Directors seeks to provide a balanced and objective assessment of the company's current development and future prospects. The statement by the Directors in accordance with s169 of the Companies Act 1965 is set out in this report.
CORPORATE DEVELOPMENTS • The Group entered into a Sale & Purchase Agreement with Taiheiyo Cement Corporation and Taiheiyo Singapore Pte Ltd to acquire a 9.91% equity interest in C.I. Readymix Sdn Bhd (“C.I. Readymix”) on 4 July 2001. The completion of this transaction on 12 September 2001 increased the Group’s shareholding in C.I. Readymix to 100% following its earlier acquisition of a 90.09% equity interest in the company from C.I. Building Industries Berhad, completed on 2 April 2001.
• On 16 July 2001, YTL Power International Berhad (“YTL Power”) announced the signing of Heads of Agreement in relation to the 1400 MW power plant to be located in Mukim Jimah, Negri Sembilan, between Jimah Power Generation Sdn Bhd (“Jimah Power”), the development company owned as to 51% by Jimah Power Holdings Sdn Bhd (“Jimah Holdings”) and 49% by YTL Power, and Tenaga Nasional Berhad (“Tenaga”).
• On 27 December 2001, YTL Cement completed its Bonus Issue of 69,626,320 shares of RM1.00 each on the basis the journey c o n t i nues… 30, 31
of one (1) new ordinary share for every one (1) existing • On 2 July 2002, YTL e-Solutions Berhad was listed on the ordinary share held in YTL Cement as at the book closure Mesdaq Market of the KLSE following its completion of date of 13 December 2002. Pursuant to the adjustments the issue of 34,000,000 new YTL e-Solutions ordinary arising from the Bonus Issue, 28,761,869 additional shares of RM1.00 each, by way of a non-renounceable Warrants (1994/2004) were also issued. restricted issue to entitled shareholders of YTL Corporation on the basis of one (1) Restricted Issue Share • On 29 January 2002, the Group announced that YTL for every five (5) existing YTL Corporation ordinary shares, Cayman Limited (“YTL Cayman”), a wholly-owned and to eligible employees and directors of YTL e-Solutions. subsidiary of YTL Corporation, acquired on 14 January 2002, 102,000 ordinary shares of RM1.00 each in YTL • On 29 July 2002, the Group announced a reorganisation Power Services Sdn Bhd (“YTLPS”), representing 51% involving the acquisition by YTL Corporation of 500,000 of the entire shareholding of YTLPS from Siemens ordinary shares of RM1.00 each, representing the entire Aktiengesellschaft (“Siemens AG”) for a total equity interest in Satria Sewira Sdn Bhd, and 42 million consideration of RM4.8 million. The acquisition resulted in ordinary shares of RM1.00 each, representing a 70% YTLPS becoming a wholly-owned subsidiary of YTL equity interest in Emerald Hectares Sdn Bhd, and the Corporation, with 49% of the shares of YTLPS held transfer of 200,000 ordinary shares of RM1.00 each, by YTL Corporation and 51% held by YTL Cayman. representing the entire equity interest of Star Hill Hotel Sdn Bhd from YTL Land Sdn Bhd to YTL Hotels • On 21 May 2002, YTL Power announced the completion & Properties Sdn Bhd, both wholly-owned subsidiaries of its acquisition of the entire issued and paid up share of YTL Corporation. capital of Wessex Water from Azurix Europe Limited (“Azurix”), a subsidiary of Enron Corp., for an enterprise • On 2 October 2001 and 13 December 2001, the Group value of £1,239.2 million (RM6,890 million translated at the announced an injection of its property development then prevailing exchange rate of £1:RM5.56). The Sale and companies, worth an estimated RM282 million, into Purchase Agreement between Azurix and YTL Power was YTL Land & Development Berhad (“YTL Land & signed on 25 March 2002 and received shareholder Development”). The proposals received approval from the approval at an Extraordinary General Meeting held on Securities Commission (SC) on 26 September 2002, and 10 May 2002. Merger clearance was given by the UK are now pending approval from the shareholders of YTL Office of Fair Trading for the acquisition on 17 May 2002. Corporation and YTL Land & Development. The proposals entail the following transactions: CHAIRMAN’S STATEMENT (CONT’D)
i Proposed acquisition of 1,350,000 ordinary shares of settlement of RM40.7 million owing by Pakatan to RM1.00 each, representing 45% equity interest in Construction Lease (M) Sdn Bhd, a wholly-owned Syarikat Kemajuan Perumahan Negara Sdn Bhd subsidiary of YTL Corporation, to be settled through (“SKPN”) from Syarikat Pembenaan Yeoh Tiong Lay the issue of 40.7 million new YTL Land & (“SPYTL”) for a purchase consideration of RM46.9 Development ICPS; million to be satisfied through the issue of 46.9 million new Irredeemable Convertible Preference Shares v Proposed acquisition of 12,588,204 ordinary shares of (ICPS) of RM1.00 each in YTL Land & Development; RM1.00 each, representing 30% equity interest in Udapakat Bina Sdn Bhd, a 70%-owned subsidiary of ii Proposed acquisition of 150,000 ordinary shares of Pakatan, from Uda Holdings Berhad for a purchase RM1.00 each, representing 5% equity interest in consideration of RM20.9 million to be satisfied SKPN from Pemasaran Simen Negara Sdn Bhd (PSN) through the issue of 7.1 million new YTL Land & for a purchase consideration of RM5.2 million to be Development shares, and 13.8 million new YTL Land satisfied through the issue of 5.2 million new ordinary & Development ICPS; shares of RM1.00 each in YTL Land & Development; vi Proposed acquisition of 12,500 ordinary shares of iii Proposed acquisition of 500,000 ordinary shares of RM1.00 each, representing 5% equity interest in PYP RM1.00 each, representing 100% equity interest in Sendirian Berhad, a 95%-owned subsidiary of Pakatan, Bayumaju Development Sdn Bhd, a wholly-owned from YM Raja Dato’ Wahid Bin Raja Kamaralzaman for subsidiary of YTL Corporation, for a purchase a purchase consideration of RM1.9 million to be consideration of RM38.5 million to be satisfied satisfied through the issue of 1.9 million new YTL through the issue of 38.5 million new YTL Land & Land & Development shares; Development ICPS; vii Proposed issue of 100,000 new YTL Land & iv) Proposed acquisition of 4,250,000 ordinary shares of Development ICPS to Commerce International RM1.00 each representing 100% equity interest in Merchant Bankers Berhad. Pakatan Perakbina Sdn Bhd (“Pakatan”) from SPYTL and Dato’ Hj. Mohd. Zainal Abidin Hj. Abdul Kadir for • On 7 October 2002, YTL Power announced its proposal to a purchase consideration of RM147.6 million to be amend the bye-laws of its Employee Share Option satisfied through the issue of 7.1 million new YTL Scheme (“Scheme”) established on 16 October 2001, Land & Development shares and 140.5 million new and to extend the Scheme to employees of newly- YTL Land & Development ICPS, and proposed debt acquired subsidiaries in the United Kingdom. the journey c o n t i nues… 32, 33
• On 14 November 2002, YTL Corporation announced that Since its listing on the Kuala Lumpur Stock Exchange in 1986, YTL Land Sdn Bhd had entered into a Sale & Purchase the Group has consistently declared dividends of not less Agreement with C.K. Tang Properties (M) Sdn Bhd, than 5% for 17 consecutive years. In addition, the Group has a subsidiary of C.K. Tang Ltd, to purchase recorded compounded earnings growth of 42% over the 158,531 square feet of space in Star Hill Shopping Centre same period. With the successful launch of the Express Rail for RM77.0 million. YTL Corporation completed its Link in Malaysia, and the acquisitions of ElectraNet and acquisition of Star Hill Centre in February 1999. Wessex Water, the Group is confident that it will be able to sustain this level of performance for the foreseeable future. FUTURE CHALLENGES The Group remains committed to its underlying philosophy APPRECIATION of supplying world class products and services at third world The Board of Directors of YTL Corporation would like to take prices, as well as its strategy of acquiring regulated assets this opportunity to extend our appreciation to our customers, operating under long-term concessions, such as ElectraNet business associates, the regulatory authorities and in Australia and Wessex Water in the United Kingdom. shareholders for their continuing strong support, without which the Group would not have been able to achieve its The addition of Wessex Water has elevated the Group’s success this year. presence as a global utilities player, whilst at the same time providing a welcome diversification in the Group’s income I would also like to thank the Management and Staff for their stream and adding an estimated 3.7 million new customers full dedication and commitment to the ideals of the Group. to the YTL Community. This acquisition has given the Group Our achievements are a result of the concerted effort and a firm foothold in the industry, from which to expand where contribution of the entire team. viable investments arise in the future.
The Group’s cautious approach in proceeding with the listing of YTL e-Solutions on the Mesdaq enabled it to avoid the Y Bhg Tan Sri Dato’ Seri (Dr) Yeoh Tiong Lay fallout from the bursting of the dotcom bubble, which has, PSM, SPMS, KMN, PPN, PJK concomitantly, increased the opportunities to acquire new Executive Chairman technologies at lower cost. The stringent selection processes used in identifying and cultivating new incubatees is not expected to vary greatly.