Independent Auditors' Report to the Members of Sunway City Berhad
Total Page:16
File Type:pdf, Size:1020Kb
Global Metamorphosis Sunway City Berhad (“SunCity”) is positioned to innovate across borders as symbolised by a butterfly spreading its wings and metamorphosing into global markets. WEBSITE ADDRESS www.sunwaycity.com INVESTOR RELATIONS Enquiries may be sent to: Email: [email protected] FINANCIAL CALENDAR NOVEMBER 2007 27 Announcement of the unaudited consolidated results for the 1st quarter ended 30 September 2007 FEBRUARY 2008 19 Announcement of the unaudited consolidated results for the 2nd quarter ended 31 December 2007 MAY 2008 27 Announcement of the unaudited consolidated results for the 3rd quarter ended 31 March 2008 AUGUST 2008 29 Announcement of the unaudited consolidated results for the 4th quarter ended 30 June 2008 NOVEMBER 2008 17 Announcement of the notice of entitlement and payment of 5 sen Final Dividend less 25% income tax for the financial year ended 30 June 2008 NOVEMBER 2008 18 Issuance of the notice of 25th Annual General Meeting and Annual Report for the financial year ended 30 June 2008 25 NOVEMBER 2008 Announcement of the unaudited consolidated results for the 1st quarter ended 30 September 2008 DECEMBER 2008 12 Date of 25th Annual General Meeting FEBRUARY 2009 12 Date of entitlement to 5 sen Final Dividend less 25% income tax for the financial year ended 30 June 2008 11 MARCH 2009 Date of payment of 5 sen Final Dividend less 25% income tax for the financial year ended 30 June 2008 A premier property company focusing on quality real estateVision development and investing in properties with attractive yields that augment its township development to generate excellent returns that maximise shareholders’ value. Sunway City Berhad Group of Companies shall achieve the vision through the realisation of the following goals: • Exceeding customers’ needs with superior and innovative products and services. • Building and developing a culture and environment that promote excellence and dedication in its stakeholders. • Utilising technology to enhance the Group’s competitive advantage in the marketplace. To create a conducive environment for living, working andMission leisure by transforming the existing landscape and/or landform into well-designed and visually stimulating structures that will greatly enhance its value. RESULTS HIGHLIGHT 1 Revenue (RM) Profit Before Tax (RM) 1.3 bil 1.1 bil 634 mil ANNUAL REPORT 2008 296 mil 2008 2007 2008 2007 15% 114% CITY BERHAD SUNWAY Note: Including assets revaluation surplus TABLE OF CONTENTS Chairman’s Statement 2 Financial Statements Calendar of Significant Events 8 Directors’ Report 102 Corporate Information 10 Statement by Directors 110 Corporate Philosophy 12 Statutory Declaration 110 Group Corporate Structure 14 Report of the Auditors 111 Awards and Accolades 16 Income Statements 113 Financial Highlights 20 Balance Sheets 114 Segmental Performance 21 Statements of Changes in Equity 116 Chief Financial Officer’s Review 22 Cash Flow Statements 119 Value Added Statement 26 Notes to the Financial Statements 123 Share Performance 27 List of Properties 228 Profile of Board of Directors 30 Recurrent Related Party Transactions 238 Profile of Management Team 36 Shareholdings’ Information Key Business Segments Directors’ Interests in Shares, Options over Property Development 40 Ordinary Shares and Warrants 239 Property Investment 46 Analysis of Shareholdings 240 Hospitality 50 Analysis of Warrantholdings 242 Leisure 54 25th Annual General Meeting Healthcare 56 Notice of 25th Annual General Meeting 244 Excelling in Safety is Our Priority 60 Statement Accompanying Notice of 25th Annual Quality Assurance in Our Deliverance 61 General Meeting 248 Corporate Responsibility 62 Form of Proxy Corporate Governance Corporate Governance Statement 74 Terms of Reference of Executive Committee of the Board 81 Terms of Reference of Nomination Committee 84 Terms of Reference of Remuneration Committee 85 Terms of Reference of Employees’ Share Option Scheme Committee 86 Terms of Reference of Risk Management Committee 88 Audit Committee Report 89 Statement on Internal Control 93 Enterprise Risk Management 95 Additional Compliance Information 97 Investor Relations 99 CHAIRMAN’S STATEMENT 2 ANNUAL REPORT 2008 SUNWAY CITY BERHAD SUNWAY Dear Shareholders, SunCity ended the financial year 2008 with good results across all divisions. Moving forward, financial year 2009 would be a very challenging year as the world economic environment continues to weaken amidst the deepening financial crisis in United States. As compared with the Asian Financial Crisis 10 years ago, I believe SunCity is in a better position now to weather the challenging economic conditions with the adaption of right strategies. BEST OF BOTH WORLDS SunCity has the best of both worlds – a good mix of high growth property development and high yield investment assets; 2 crucial elements in building and sustaining a healthy business momentum in the property market. Our property development segment enters new growth frontiers as we increasingly diversify into regional markets like China and India. On the investment end, we continue to leverage SunCity’s professional property management skills coupled with its unique portfolio of high quality assets to achieve a sustainable income base. 3 FINANCIAL PERFORMANCE SunCity has achieved a commendable performance in the financial year 2008 with an increase of 68% in profit after tax and minority interest (“PATMI”), from RM156 million to RM262 million. Excluding the revaluation surplus, core PATMI increased by 10% compared to the corresponding period last year, from RM126 million to RM138 million. In terms of ANNUAL REPORT 2008 shareholders’ value, earnings per share for the year also increased by 59% to 55.87 sen from 35.19 sen in the financial year 2007. This strong performance could not have been achieved without the successful implementation of our business CITY BERHAD SUNWAY strategies. During the year under review, we saw the completion of the expansion of Sunway Pyramid Mall which doubled its net lettable space, the opening of Sunway Carnival Mall in Penang and securing of 2 en-bloc sales of our condominiums in the Klang Valley with a total gross development value (“GDV”) of RM440 million. INVESTMENT ENHANCEMENT 29 September 2007 was a historical day for SunCity as it recorded another milestone with the property investment division opening its second phase of Sunway Pyramid Mall. This new experiential, multi-themed mall not only raises the bar in customer-oriented service in our country but more importantly, the Malaysian retail icon also redefines the proposition of the Sunway experience for residents and visitors alike. BayRocks Garden Waterfront Villa @ Sunway South Quay With the expansion, Sunway Pyramid now has an impressive built-up area of 4 million square feet with net lettable area of 1.7 million square feet and it has successfully attracted up to 2.5 million visitors per month. CHAIRMAN’S STATEMENT 4 The presence of educational institutions is an important part of turning Bandar Sunway into a fully integrated resort city. Further raising the standards of tertiary education in our country is the recently established Monash University Sunway Campus. This brand new overseas branch campus of the internationally acclaimed university comes complete ANNUAL REPORT 2008 with a medical school that boasts state-of-the-art facilities and top-notch academicians and researchers. Along with Sunway University College, this new campus increases Bandar Sunway’s total higher education student capacity from 10,000 to 20,000 students. Furthermore, the presence of Sunway International School within Bandar Sunway also SUNWAY CITY BERHAD SUNWAY places the township as the only one in Malaysia with 2 full- fledged universities and an international school within its boundaries. Following the phenomenal success of the Group’s venture into healthcare, SunCity has mandated the expansion of Sunway Medical Centre (“SunMed”). The availability and provision of world-class healthcare is an important deliverable for any urban township. This enhanced offering not only adds to Bandar Sunway’s attraction as an integrated full-service township for its residents, but it will also play an important role in internationalising our nation’s medical sector, which is in line with the current global trend for health- tourism services. Monash University Sunway Campus With the completion of SunMed’s expansion in early 2009, SunMed would have 5 wings with a built-up area of 654,000 square feet. The total number of beds would also increase from 207 to 350. 5 GLOBAL METAMORPHOSIS From Local Brand to International Brand During the year under review, SunCity was rated as one of Malaysia’s Most Valuable Brands and awarded The Brand Laureate – Corporate Award in 2008. SunCity also chalked up yet another accolade by winning The Edge’s Top Property ANNUAL REPORT 2008 Developers Award, for 6 consecutive years in a row. In India, SunCity inked its second joint venture, securing the rights to develop a high rise residential development Undoubtedly, SunCity has come a long way and over the with a total GDV of RM380 million. With this joint venture, years has become a beloved Malaysian brand name. Years SunCity expects a total GDV of RM1.88 billion from India, a of experience, a proven track record and a strong consumer commendable undertaking for a relatively new player on the following have proven the strength and consistency of horizon. CITY BERHAD SUNWAY SunCity’s delivery to its Malaysian market. Such maturity on our homeground