ANNUAL REPORT 2017 ANNUAL ANNUAL REPORT 2017 GENTING BERHAD (7916-A) B The late Tan Sri Dato’ Seri (Dr) Lim Goh Tong, the Founder of the Genting Group, was born on 28 February 1918 in Anxi, in the Fujian province of China. He was a visionary entrepreneur, a savvy businessman, a hands-on leader and a responsible and hardworking employer – who never gave up and worked with passion and determination to realise his dreams. His principles and the values that he had espoused throughout his lifetime, were simple yet profound. These values – namely Hard Work, Honesty, Harmony, Loyalty and Compassion, which have always been embedded in our work culture and business practices, are known collectively as the Genting Core Values. The Genting Group honours the legacy and accomplishments of the late Tan Sri Dato’ Seri (Dr) Lim Goh Tong by celebrating Genting Founder’s Day every 28 February. The inaugural Founder’s Day on 28 February 2018 would have been Tan Sri Dato’ Seri (Dr) Lim Goh Tong’s 100th birthday anniversary and 10 years since his passing. “The company would not be where it is today, if not for our Founder and his vision,” said Tan Sri Lim Kok Thay, Chairman and Chief Executive of the Genting Group. GENTING BERHAD | ANNUAL REPORT 2017 “By instilling these core values, the Genting Group will emulate our Founder’s determination and dedication to achieve the company’s goals and bring the organisation to greater heights.” Tan Sri Lim Kok Thay - Chairman and Chief Executive, Genting Group Our culture of hard work, diligence and Success is only complete with an equal measure commitment enables us to combine long-term of compassion. We at the Genting Group thinking with a mindset of taking quick action have a responsibility to give back to society. We to solve important and urgent operational have a deep interest to improve education and problems. We are not afraid of change. health care. We give generously to make lives better for others. Our Founder believed in the importance of being diligent and committed. He was eager to learn and be Our Founder gave unconditionally and contributed in the know, setting precedents for others to follow. generously. He was empathetic, put the needs of He was a hands-on person who was always on site others before his and was ever ready to lend a helping to supervise projects and to ensure that matters hand. Fondly remembered as highly considerate, were dealt with promptly. He worked hard; he rose he cared deeply for his employees and was there in early and retired late. A notebook was always by his their times of trouble. Such consideration is inherent bedside, should he need to pen down any ideas that in his employees and evident in the way they perform came to mind. their duties. HARD WORK COMPASSION CORE LOYALTY VALUES HARMONY Through loyalty, we have a sense of belonging and a sense of allegiance Harmony in the workplace is key to to our commitments. And it is just as success and a high-performance culture. important to be loyal to the company HONESTY Teamwork leads to efficiency and and people as it is to one’s family. encourages constructive feedback. We work well together and support one Our Founder was loyal to his family, another. Similarly, we must strive for organisation and his people. He believed harmony in our families and homes. in looking after the well-being and growth of his employees. He valued his Leadership in honesty and integrity Our Founder encouraged teamwork towards employees for their commitment and is important. We must deal with our achieving goals. He communicated effectively loyalty and rewarded them justly for their customers, partners and employees and provided prompt solutions to achieve long service. As a result, his employees in an honest, fair and moral manner. success. He was very involved in his remained loyal to him and the company. businesses. Every morning over breakfast This can be seen in the many long serving Our Founder was known and admired with his staff, he would discuss operations. people who are committed to the success for his dynamic leadership based on He valued people, especially his employees of the Genting Group. integrity and moral principles, which and their ideas. He also believed in formed the basis of his success. effective communications and teamwork. He practised exemplary leadership and Together with a strong team, he built an management ethics – traits that are empire. emulated by the senior management and staff, which have resulted in Genting Group companies being ranked among Asia’s best managed companies. about GENTING BERHAD OUR VISION We are a leading multinational corporation committed to enhancing shareholder value and maintaining long-term sustainable growth in our core businesses. OUR MISSION We will: • Be responsive to the changing demands of our customers and excel in providing quality products and services • Be committed to innovation and the adoption of new technology to achieve competitive advantage. • Pursue personnel policies which recognise and reward performance and contributions of employees and provide proper training, development and opportunities for career development. • Generate a fair return to our shareholders. • Be a responsible corporate citizen, committed to enhancing corporate governance and transparency, including undertaking social responsibility for the enhancement of the standard of living of the country. CORPORATE PROFILE Genting Berhad is principally an investment holding and management company. While the Company was incorporated in 1968 and listed in 1971, the Genting Group was founded in 1965 when its Founder, the late Tan Sri Lim Goh Tong started the journey to realise his vision of building a mountaintop resort in Malaysia. Today, the Genting Group comprises Genting Berhad and its listed subsidiaries; Genting Malaysia Berhad (“Genting Malaysia”), Genting Plantations Berhad (“Genting Plantations”) and Genting Singapore PLC (“Genting Singapore”), as well as its wholly owned unlisted subsidiary Genting Energy Limited (“Genting Energy”). Led by Tan Sri Lim Kok Thay, the Group is involved in leisure and hospitality, oil palm plantations, power generation, oil and gas, property development, life sciences and biotechnology activities, with operations spanning across the globe, including in Malaysia (the Group’s country of origin), Singapore, Indonesia, India, China, the United States of America, Bahamas, the United Kingdom and Egypt. In the core leisure and hospitality business, the Genting Group and its brand affiliates similarly controlled by Tan Sri Lim Kok Thay (namely Genting Hong Kong Limited [“Genting Hong Kong”] and Empire Resorts, Inc.), market and offer a suite of products under a number of premier brands including Genting, Resorts World, Genting Grand, Genting Club, Crockfords, Maxims, Crystal Cruises, Dream Cruises and Star Cruises. The Genting Group of companies also have tie ups with established names such as Universal Studios®, Twentieth Century Fox, Premium Outlets®, Hard Rock Hotel, Zouk and other renowned international brand partners. For more information, please visit the following websites: www.genting.com www.gentingmalaysia.com www.gentingsingapore.com www.gentingplantations.com www.gentinghk.com CONTENTS FINANCIAL StatEMENTS: Chairman’s Statement / 02 89 Income Statements Penyata Pengerusi / 主席文告 90 Statements of Comprehensive Income 12 Board of Directors 91 Statements of Financial Position 14 Directors’ Profile 92 Statements of Changes in Equity 22 Management & Corporate Information 95 Statements of Cash Flows 24 Group Corporate Structure 98 Notes to the Financial Statements 25 Corporate Diary 195 Statement on Directors’ Responsibility 27 Financial Highlights 195 Statutory Declaration 28 Five-Year Summary 196 Independent Auditors’ Report 29 Management’s Discussion and Analysis of Business Operations and 202 List of Properties Held Financial Performance 207 Analysis of Shareholdings/Warrantholdings 33 2017 Highlights 211 Requirements of Nevada Gaming Regulations 52 Awards and Accolades on Genting Berhad and its Shareholders 53 Sustainability Statement 212 Notice of Annual General Meeting 55 Corporate Governance 216 Statement Accompanying Notice of Overview Statement Annual General Meeting 75 Audit and Risk Management Form of Proxy Committee Report Group Offices 78 Statement on Risk Management and Internal Control Genting Premier Brands 81 Directors’ Report and Statement by Directors 2 CHAIRMAN’S STATEMENT Dear Shareholders, On behalf of the Board of Directors (“Board”), I am pleased to present to you the Annual Report and Audited Financial Statements of Genting Berhad (“Company”) and its group of companies (“Group”) for the 12 months period ended 31 December 2017. FINANCIAL OVERVIEW It has been a resilient year despite the challenges faced by financial markets and the global economy. All major concerns that were thought to pose risks to the financial markets or the major global economies in 2017, thankfully, did not materialise. Nevertheless, we remain vigilant of economic and geopolitical developments around the world that could impact our future performance. The Malaysian economy grew positively in 2017, registering year-on-year Gross Domestic Product (“GDP”) growth of 5.9%1 despite weaker consumer sentiment. Internationally, the United States achieved GDP growth of 2.5%2, China 6.8%3, Indonesia 5.2%4, the United Kingdom 1.5%5 and Singapore 3.6%6 in 2017, all of which provided firm platforms for growth of the Group’s businesses across the world. The Asian gaming and tourism industry showed signs of rebound in 2017, as a result of good economic growth in the Group’s main geographic markets. I am pleased to report that the Group performed well in the year under review. Group revenue rose by 9% to RM20.0 billion and Group adjusted earnings before interest, tax, depreciation and amortisation (“adjusted EBITDA”) rose by 15% to register RM7.1 billion in 2017. ENHANCING SHAREHOLDER VALUE Genting Berhad has consistently paid dividends while allocating funds for investment and business growth. An interim single-tier dividend of 8.5 sen per ordinary share was declared and paid on 6 October 2017.