Today Sunway, Tomorrow the World
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SUNWAY BERHAD ANNUAL REPORT 2017 TODAY SUNWAY, TOMORROW THE WORLD ANNUAL REPORT 2017 1 TODAY SUNWAY, TOMORROW THE WORLD TODAY SUNWAY, TOMORROW THE WORLD Today Sunway, Tomorrow The World was inspired by the scale of foresight in the creation of Malaysia’s first ever green township – Sunway City. Established on the foundations of sustainable development, Sunway will continue to do its part for the future generations. Kirigami is a type of paper art, which uses intricate cuts that are folded and sculptured to create unique works of art. Each Kirigami centrepiece throughout the annual report was designed to represent Sunway’s diverse business divisions. Most importantly, they serve as the inception of an idea, that were the first steps in the creation of a visionary iconic city. Sunway Berhad embarks on its Integrated Reporting journey in this annual report. NAVIGATION GUIDE Connect to more information within this Connect to more information online at Connect to more information in the ANNUAL REPORT 2017 www.sunway.com.my SUSTAINABILITY REPORT 2017 2 SUNWAY BERHAD ANNUAL REPORT 2017 VISION To be Asia’s model corporation in sustainable development, innovating to enrich lives for a better tomorrow MISSION • Empowering our people to deliver enhanced value to all stakeholders • Embracing sustainability in our business processes and decisions • Attracting and nurturing a talented and progressive workforce for the digital era 3 TODAY SUNWAY, TOMORROW THE WORLD CORPORATE INFORMATION BOARD OF DIRECTORS RISK MANAGEMENT COMMITTEE Executive Chairman, Tan Sri Dato’ Dr. Lin See Yan (Chairman) Non-Independent Executive Director Wong Chin Mun Tan Sri Dato’ Seri Dr Jeffrey Cheah Fook Ling AO Datuk Seri Yam Kong Choy Lim Swe Guan Non-Executive Co-Chairman, Tan Sri Datuk Dr Rebecca Fatima Sta Maria Independent Non-Executive Director (Appointed with effect from 1 March 2018) Dato’ Sri Idris Jala (Appointed with effect from 11 August 2017) EMPLOYEES’ SHARE OPTION SCHEME COMMITTEE Wong Chin Mun (Chairman) Deputy Executive Chairman, Tan Sri Dato’ Seri Dr Jeffrey Cheah Fook Ling AO Non-Independent Executive Director Dato’ Chew Chee Kin Tan Sri Datuk Seri Razman M Hashim Sarena Cheah Yean Tih, S.M.S. Foo Shiang Wyne President, Non-Independent Executive Director Dato’ Chew Chee Kin COMPANY SECRETARIES Tan Kim Aun (MAICSA 7002988) Non-Independent Executive Director Chin Lee Chin (MAICSA 7012347) Sarena Cheah Yean Tih, S.M.S. REGISTERED OFFICE Senior Independent Non-Executive Director Level 16, Menara Sunway, Jalan Lagoon Timur Wong Chin Mun Bandar Sunway, 47500 Subang Jaya Selangor Darul Ehsan, Malaysia Independent Non-Executive Directors Tel No : (603) 5639 8889 Lim Swe Guan Fax No : (603) 5639 9507 Datuk Seri Yam Kong Choy Tan Sri Dato’ Dr. Lin See Yan SHARE REGISTRAR Tan Sri Datuk Dr Rebecca Fatima Sta Maria Sunway Management Sdn Bhd (50661-X) (Appointed with effect from 1 March 2018) Level 16, Menara Sunway, Jalan Lagoon Timur Bandar Sunway, 47500 Subang Jaya AUDIT COMMITTEE Selangor Darul Ehsan, Malaysia Wong Chin Mun (Chairman) Tel No : (603) 5639 8889 Lim Swe Guan Fax No : (603) 5639 9507 Datuk Seri Yam Kong Choy Tan Sri Dato’ Dr. Lin See Yan AUDITORS Tan Sri Datuk Dr Rebecca Fatima Sta Maria BDO (Appointed with effect from 1 March 2018) Chartered Accountants NOMINATION COMMITTEE SOLICITORS Lim Swe Guan (Chairman) David Lingam & Co. Wong Chin Mun Mah-Kamariyah & Philip Koh Datuk Seri Yam Kong Choy Tan Sri Dato’ Dr. Lin See Yan Dato’ Sri Idris Jala PRINCIPAL BANKERS (Appointed with effect from 11 August 2017) Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad Tan Sri Datuk Dr Rebecca Fatima Sta Maria DBS Bank Ltd (Appointed with effect from 1 March 2018) HSBC Bank Malaysia Berhad Malayan Banking Berhad Public Bank Berhad REMUNERATION COMMITTEE Standard Chartered Bank Malaysia Berhad Datuk Seri Yam Kong Choy (Chairman) Wong Chin Mun Lim Swe Guan STOCK EXCHANGE LISTING Tan Sri Dato’ Dr. Lin See Yan Main Market of Bursa Malaysia Securities Berhad Dato’ Sri Idris Jala (Appointed with effect from 11 August 2017) WEBSITE ADDRESS Tan Sri Datuk Dr Rebecca Fatima Sta Maria www.sunway.com.my (Appointed with effect from 1 March 2018) INVESTOR RELATIONS Email : [email protected] Tel No : (603) 5639 8674 4 SUNWAY BERHAD ANNUAL REPORT 2017 FINANCIAL CALENDAR ANNOUNCEMENT OF QUARTERLY RESULTS 29 MAY 2017 27 NOVEMBER 2017 Announcement of the unaudited consolidated results Announcement of the unaudited consolidated results for the 1st quarter ended 31 March 2017 for the 3rd quarter ended 30 September 2017 29 AUGUST 2017 28 FEBRUARY 2018 Announcement of the unaudited consolidated results Announcement of the unaudited consolidated results for the 2nd quarter ended 30 June 2017 for the 4th quarter ended 31 December 2017 DIVIDEND • First interim single tier dividend of 3 sen per ordinary share for the financial year ended 31 December 2017 Announcement of the notice of entitlement and payment: 11 September 2017 Date of entitlement : 17 October 2017 Date of payment : 26 October 2017 • Second interim single tier dividend of 3 sen per ordinary share for the financial year ended 31 December 2017 Announcement of the notice of entitlement and payment: 6 March 2018 Date of entitlement : 3 April 2018 Date of payment : 26 April 2018 ANNUAL REPORT & ANNUAL GENERAL MEETING 30 APRIL 2018 Date of notice of 8th Annual General Meeting and date of issuance of Annual Report 2017 21 JUNE 2018 Date of 8th Annual General Meeting 5 TODAY SUNWAY, TOMORROW THE WORLD TABLE OF CONTENTS 8 CORPORATE 82 EXEMPLARY SUNWAY LEADERSHIP 10 Corporate Profile 84 Profile of Board of Directors 12 Sunway’s Value Creation 96 Profile of Senior Management 14 Group Corporate Structure 18 Sunway in the News 20 Calendar of Significant Events 28 Awards and Accolades 36 PERFORMANCE 102 SUSTAINABILITY REVIEW 38 Chairman’s Statement 104 Sustainability at Sunway 44 Management Discussion and Analysis 76 FINANCIAL REVIEW 78 Segmental Performance 79 Financial Highlights 80 Value Added Statement 81 Share Performance 6 SUNWAY BERHAD ANNUAL REPORT 2017 110 GOVERNANCE WITH 326 SHAREHOLDINGS’ INTEGRITY INFORMATION 112 Corporate Governance Overview Statement 328 Directors’ Interests in Shares and Warrants 123 Audit Committee Report based on the Register of Directors’ 128 Statement of Risk Management Shareholdings and Internal Control 330 Analysis of Shareholdings 132 Additional Compliance Information 332 Analysis of Warrantholdings 134 Investor Relations 137 Directors’ Responsibility Statement for the Audited Financial Statements 138 FINANCIALS 334 ANNUAL GENERAL MEETING 140 Financial Statements 336 Notice of 8th Annual General Meeting 324 List of Material Properties - Proxy Form 7 TODAY SUNWAY, TOMORROW THE WORLD Sustainable COMMUNITIES As a Master Community Developer, Sunway’s Property Development division has delivered over 28,000 properties in key locations locally and overseas. Under its portfolio are the award winning integrated cities of Sunway City, Sunway Velocity, Sunway City Ipoh, Sunway Penang, and the 1,800-acre Sunway Iskandar, Sunway’s largest integrated township development yet. CORPORATE SUNWAY 10 Corporate Profile 18 Sunway in the News 12 Sunway’s Value Creation 20 Calendar of Significant Events 14 Group Corporate Structure 28 Awards and Accolades 8 SUNWAY BERHAD ANNUAL REPORT 2017 9 TODAY SUNWAY, TOMORROW THE WORLD CORPORATE PROFILE SUNWAY’s HEADQUARTERS IN SUNWAY CITY Formative PHASE Sunway Berhad (“Sunway” or “Group”) traces its modest Inevitably, there were episodes of setbacks as the company beginnings to 26 January 1978 with the establishment of grew, but it was agile in overcoming these challenges. Over Sungei Way Holdings Sdn Bhd, marking its foray into the the years, the business thrived from strength to strength, tin mining industry. It was the company’s very first of many and was successfully listed on the Main Board of Bursa business explorations. Compelled by his transformative Malaysia on 16 February 1984 as Sungei Way Holdings vision, Founder and Chairman, Tan Sri Dato’ Seri Dr Jeffrey Berhad. The company subsequently changed its name to Cheah continued to push boundaries and thrust the company Sunway Holdings Incorporated Berhad on 13 December forward to embrace diversification. The breadth of business 1999 before assuming the name of Sunway Holdings interests was expanded to include construction, trading Berhad in 2007. and manufacturing, quarrying, property development and building materials. 10 SUNWAY BERHAD ANNUAL REPORT 2017 Sunway City Berhad, or initially known as Sri Jasa Sdn Bhd, Sunway practises active management of the entire property was formed on 13 July 1982 to penetrate the burgeoning local value chain, adhering to its distinguished “Build, Own, property development scene. A sister company of Sunway Operate” business model. A project cycle typically begins with Holdings Berhad, the company spearheaded the concept landbanking and master-planning, followed by design and of integrated township through Sunway City, resurrecting construction, marketing and sales, property management what was once a barren tin mine into one of the region’s and lastly capital recycling via Sunway Real Estate most popular tourism destinations today. Aspired to elevate Investment Trust (“REIT”) upon maturity of the properties. the company to conglomerate status, the business capacity Sunway’s dynamic yet hands-on approach enables direct was further broadened to integrate property development, integration of design efficiencies and innovations into the property investment, hospitality, healthcare