Transformation
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TRANSFORMATION. ACHIEVED. ANNUAL REPORT 2018 MALAYSIAN RESOURCES CORPORATION BERHAD (7994-D) IN SETTING THE STANDARD, WE DON’T SIMPLY BUILD WORLD-CLASS DEVELOPMENTS... > KL Sentral CBD WE BUILD FOR A BETTER TOMORROW. WE BUILD COMMUNITIES OF THE FUTURE, TODAY KL SENTRAL CBD 72 ACRES KL Sentral CBD is at the pinnacle of integrated transportation centres across the region and is positioned at the forefront of TODs. Designed by Dr Kisho Kurokawa – who also designed GDV Kuala Lumpur International Airport – KL Sentral CBD was conceptualised as a “city-within- a-city”, championing an integrated “Live, Work, and Play” concept, and has remained MRCB’s crowning jewel for over 15 years. RM18.0 KL Sentral CBD is an exclusive urban centre built around Malaysia’s largest transit hub, offering global connectivity, excellent investment opportunities, business convenience billion and an international lifestyle. It was granted the ‘XKL’ Global Destination Code by the International Air Travel Association (IATA) with check-in facilities, enabling quick access to the airport and various destinations around the world. At present, more than 200,000 commuters pass through Stesen Sentral every day. As the pioneer of Transit Oriented Developments (TOD), MRCB is leading the way in public transport connectivity in Malaysia. Through our TOD projects, we are contributing towards the seamless integration of public transport systems and working and living areas, enabling people to move around easily between their workplace and their home. MRCB is proud to showcase the iconic hubs of connectivity here, namely Kuala Lumpur Sentral Central Business District (KL Sentral CBD), PJ Sentral Garden City, Penang Sentral, Kwasa Sentral and Cyberjaya City Centre. PJ SENTRAL GARDEN CITY 12 ACRES This fi rst-of-its-kind TOD project in Petaling Jaya has taken off from the concept of a transit-centric development as introduced to the country by the KL Sentral CBD project, GDV and will serve as a CBD for Petaling Jaya. PJ Sentral Garden City, which is geographically located in the centre of Klang Valley, RM2.6 will be a welcome change to the ageing and decaying facade and landscape of Petaling Jaya. The project seeks to establish a new vision for the urban regeneration of PJ based on the principles of modern design excellence, social and economical well-being as billion well as environmental responsibility. The proposed development will adopt the Green Building Index (GBI) Gold for individual buildings and US Leadership in Environmental & Energy Design (LEED) Neighborhood and Township Development Gold rating for the overall development. WHAT IS TOD? A transit oriented development (TOD) is a mixed-use residential 282 RM31 and commercial area designed to acres of billion maximise access to public transport urban land Gross Development and often incorporates features to Value (GDV) encourage transit ridership. PENANG KWASA SENTRAL SENTRAL 23 ACRES 64 ACRES The success of KL Sentral CBD prompted MRCB’s Proximity to the Kwasa Sentral and Kwasa expansion into the northern region of the Peninsular, GDV Damansara stations along the MRT Line 1 culminating in the concept of Penang Sentral. Situated in (Sungai Buloh – Kajang) makes Kwasa Damansara a Butterworth, it is conceptualised as an integrated multi- prime location for integrated development projects. modal hub and it will be the economic catalyst for the RM2.9 MRCB has been entrusted with establishing Kwasa Northern Region (Penang, Kedah, Perlis, and Perak). Damansara City Centre as one of the largest and most exciting developments in Selangor. It will be the The activation of this transportation hub, which has an billion main city centre for the Kwasa Damansara township. emphasis on safety, security and convenience for all users, enhances comfort and effi ciency for commuters The project aims to provide a high quality working and tourists alike. It also offers a centralised ticketing and living environment. Other aspects like a sizeable system, and a multitude of retail and food and beverage park, jogging-friendly paths that run around the outlets, providing business opportunities for small and entire project, and recreational areas will further medium entreprise players as well as renowned local enhance this space. Kwasa Sentral will be designed and international brands. to incorporate open spaces, and is planned to be a livable commercial development. TODs make up An average of 79% 200,000 commuters of MRCB’s a day pass through KL Sentral total GDV CYBERJAYA CITY CENTRE 45 ACRES The heart of Malaysia’s Multimedia Super Corridor GDV (MSC) initiative, the Cyberjaya City Centre development, GDV comprises three zones – Vibrant, Tech & Enterprise, and Gateway. Two major expressways and the MRT Line 2 RM10.6 route (Sungai Buloh – Serdang – Putrajaya), which are RM5.4 currently in the pipeline, will further attract commercial billion and residential interests to the Cyberjaya City Centre. billion Each of the three zones cater to a different target market – the Vibrant zone hosts lifestyle amenities such as shopping malls and hotels; Tech & Enterprise will attract technology start-ups and other ICT operations; the Gateway zone incorporates mixed-used commercial blocks and luxury apartments. TRANSFORMATION. ACHIEVED. When we fi rst embarked on our Corporate Driven by our dedicated people, MRCB managed Transformation Journey in 2014, the road ahead to end each year successfully, marking each seemed daunting. It was. milestone with a new landmark achievement – be it being awarded the prestigious World Prix Change is never easy, and the journey was d’Excellence for Platinum Sentral in 2014, or indeed a tough one. Once known as a “one reducing our net gearing from 1.73 times at the project” company, MRCB developed a end of 2013 to just 0.19 times in 2018. Year after comprehensive strategy to ensure its sustainability year throughout our Corporate Transformation by strengthening its balance sheet and securing Journey, we fulfi lled our promise and delivered high-profi le projects with long-term visibility. The results. ever-changing business landscape also forced MRCB to become more agile as we had to The theme “Transformation. Achieved.” is the continuously adapt these strategies to address culmination that marks the end of our journey that emerging issues and risks. seemed so impossible at the start. Five years ago, we charted our strategies and forged ahead, with the hope to achieve all the targets we set in a bid to become a stronger MRCB. We did. INSIDE THIS REPORT MRCB AT A GLANCE OUR STRATEGIC PERFORMANCE 2 2018 At A Glance 16 Chairman’s Statement 4 Our Transformation Journey 20 Group Managing Director’s Management Discussion & Analysis 6 Our Vision, Mission and Values 21 Strategic Thrusts 7 About This Report 29 Land Bank 38 External Client Construction Order Book 42 Looking Ahead WHO WE ARE AND 44 Five-Year Group Financial Highlights WHAT WE DO 46 Group Quarterly Performance 46 Group Segmental Performance 8 Corporate Profi le 10 Awards and Accolades in the SUSTAINABILITY STATEMENT Last Five Years 12 Corporate Information 47 Our Commitment to Sustainability 13 Corporate Structure 48 Our Sustainability Goals, Governance & Framework 14 How We Create and Preserve Value 53 Materiality 56 Economic Impact 60 Social Responsibility 77 Environmental Stewardship FIND OUT HOW WE DID PROPERTY DEVELOPMENT & ENGINEERING, INVESTMENT CONSTRUCTION & PG.26 ENVIRONMENT PG.34 WHO GOVERNS US ADDITIONAL INFORMATION 86 Directors’ Profi les 126 Additional Compliance Information 93 Senior Management Profi les 128 Material Contracts 129 Analysis of Shareholdings HOW WE ARE GOVERNED 130 Top 30 Largest Shareholders 132 Analysis of Warrant B Holdings 95 Corporate Governance Overview Statement 133 Top 30 Largest Warrant B Holders 96 Corporate Governance Framework 135 Properties of the Group 100 Board Committees 140 Notice of Annual General Meeting 106 Disclosure of Directors’ and Senior Managements’ Remuneration * Proxy Form 112 Audit & Risk Management Committee Report 115 Executive Committee Report 116 Nomination & Remuneration Committee Report 118 Long-Term Incentive Plan Committee Report 119 Statement on Risk Management and Internal Control 120 Risk Management Principles, Framework and Processes 121 Key Risks and Mitigations Scan this QR code for a direct link to our The Annual Report is also on our App. Annual Report online. Download the MRCB Investor App on Google Play. Or log on to https://www.mrcb.com.my/investor- relations/financial-reports/#annual-reports 2018 AT A GLANCE THE FINANCIAL YEAR 2018 SAW US SOLIDIFY OUR BALANCE SHEET, COMPLETE MAJOR PROJECTS AND SECURE CONTRACTS FOR FUTURE GROWTH. WE SUCCESSFULLY CONCLUDED OUR FIVE-YEAR CORPORATE TRANSFORMATION JOURNEY, READY TO TAKE ADVANTAGE OF THE OPPORTUNITIES AHEAD. GROUP REVENUE SHAREHOLDERS’ FUNDS RM1.9 BILLION (RM’ MILLION) 1,985 2,260 2,925 4,817 4,832 56% 41% PROPERTY ENGINEERING, DEVELOPMENT & CONSTRUCTION & INVESTMENT ENVIRONMENT 3% OTHERS* * Includes Facilities Management & Parking and Others PROPERTY ENGINEERING, DEVELOPMENT & CONSTRUCTION & INVESTMENT ENVIRONMENT RM1,043 RM759 MILLION MILLION OTHERS* RM69 MILLION * Includes Facilities Management & Parking and Others 2014 2015 2016 2017 2018 2 MALAYSIAN RESOURCES CORPORATION BERHAD PROFIT BEFORE TAX EARNINGS PER DIVIDEND RM123 SHARE 1.75 MILLION 2.30 SEN SEN NET GEARING NET ASSETS MARKET 0.19 PER SHARE CAPITALISATION TIMES RM1.10 RM2,703 MILLION ACRES GROSS EXTERNAL CLIENT OF PRIME DEVELOPMENT CONSTRUCTION URBAN LAND VALUE ORDER BOOK