Annual Report 2020

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Annual Report 2020 (A member of LTAT Group) BOUSTEAD HOLDINGS BERHAD ANNUAL REPORT 2020 RE NVENTING 196001000193 (3871-H) BOUSTEAD www.boustead.com.my ANNUAL REPORT 2020 REPORT ANNUAL BOUSTEAD HOLDINGS BERHAD 196001000193 (3871-H) 28th Floor, Menara Boustead 69, Jalan Raja Chulan 50200 Kuala Lumpur Malaysia Tel : +603–2141 9044 Fax : +603–2141 9750 REINVENTING BOUSTEAD This year’s cover visual is distinctly focused on our Reinventing Boustead strategy, reflecting our vision to renew and revitalise the Group towards achieving long-term sustainable growth and unlocking value for shareholders by strengthening opportunities for our core businesses in this evolving digital age. The visual depicts our new iconic 3D Boustead logo, with the DNA symbol showcasing our focus on embedding this strategy within the Group’s foundation. Annual Report Sustainability ONLINE VERSION Report The soft copies of Boustead Holdings Berhad Annual Report 2020 and Sustainability Report 2020 are available on our website. www.boustead.com.my WHAT’S INSIDE ABOUT BOUSTEAD GROUP SHAREHOLDERS’ INFORMATION 2 Overview of Boustead Holdings Berhad 258 Recurrent Related Party Transactions 3 Corporate Information 261 Top 30 Properties of the Group 4 What We Do 264 Additional Disclosures 6 Financial Calendar 266 Group Oil Palm Agricultural Statistics 7 Facts at a Glance 267 Plantation Area Statement 8 Five-Year Financial Highlights 268 Location of Group Plantations 270 Shareholding Statistics LEADERSHIP 272 Statement of Directors’ Interests 10 Board of Directors 273 Dividend Policy 12 Profile of Directors 274 Notice of Annual General Meeting 20 Our Appreciation to Former Directors 280 Administrative Notes 22 Executive Committee Members • Proxy Form 23 Profile of Executive Committee Members 26 Boustead Group Management Council Members 28 Profile of Boustead Group Management Council Members 33 Heads of Operating Companies MANAGEMENT DISCUSSION AND ANALYSIS 34 Chairman’s Statement 38 Group Managing Director’s Review th 44 Plantation Division 52 Property & Industrial Division 59 58 Pharmaceutical Division ANNUAL GENERAL 66 Heavy Industries Division 72 Trading, Finance & Investment Division MEETING GOVERNANCE 78 Audit Committee Report 84 Corporate Governance Overview Statement Thursday, 24 June 2021 96 Statement on Risk Management and Internal Control 9.30 a.m. 102 Risk Committee Report 105 Directors’ Responsibility Statement FINANCIAL STATEMENTS Royale Chulan Kuala Lumpur 106 Financial Statements 5 Jalan Conlay 250 Boustead Group 50450 Kuala Lumpur 2 BOUSTEAD HOLDINGS BERHAD OVERVIEW OF BOUSTEAD HOLDINGS BERHAD REINVENTING BOUSTEAD ACCELERATING VALUE CREATION WITH PERFORMANCE IMPROVEMENT PROGRAMMES, NEW & SUSTAINABLE INITIATIVES TO MAXIMISE REVENUE GROWTH FOR SHAREHOLDERS VISION MISSION • To place the interest of all our shareholders as • To embrace a strong value of creativity and innovation in all our the highest priority by maximising shareholder initiatives without compromising integrity. value, especially Lembaga Tabung Angkatan • To implement the identified high-impact initiatives under the Tentera as our majority shareholder and enhance Reinventing Boustead strategy. the lives of the Malaysian Armed Forces service members, veterans and their family members. • To improve corporate discipline in adherence to the highest standard of governance. • To realign and strengthen Boustead Holdings Berhad’s fundamental priority under the • To optimise the utilisation of our capital and cash as well as Reinventing Boustead strategy which includes embrace minimalist mentality by implementing Smart Spend and performance improvement programmes, and cost-saving initiatives. new value creation within the Groups existing • To eliminate old processes that are not aligned with the core businesses, adapting business models to Reinventing Boustead strategy in order to expedite execution, tap into new revenue sources, rationalising non- maximise and drive value across the Group. strategic assets as well as venturing into the technology sector and digital services. • To create and nurture a strong ecosystem of partnership and collaboration with identified partners to support our initiatives. • To identify and nurture 300 leadership talents Group-wide in support of the Reinvention Strategy Execution and Succession Planning plans. WHO WE ARE • Boustead Holdings Berhad was established in 1828 and is today a diversified conglomerate with a portfolio spanning across five divisions, namely Plantation, Property & Industrial, Pharmaceutical, Heavy Industries as well as Trading, Finance & Investment. • The Group employs over 17,000 individuals across all listed and non-listed business units that join hands to propel the Group’s progress and drive the Reinventing Boustead strategy. • Boustead’s total assets for the reporting period ended 31 December 2020 was RM16.0 billion while shareholders’ funds stood at RM3.1 billion. ABOUT BOUSTEAD GROUP ANNUAL REPORT 2020 3 CORPORATE INFORMATION DIRECTORS Dato’ Seri Mohamed Khaled Nordin Lieutenant General Dato’ Fadzil Mokhtar (R) Non-Independent Non-Executive Chairman Independent Non-Executive Director Dato’ Sri Mohammed Shazalli Ramly Dato’ Nonee Ashirin Dato’ Mohd Radzi Group Managing Director Independent Non-Executive Director Izaddeen Daud Tan Sri Abu Bakar Haji Abdullah Deputy Group Managing Director Independent Non-Executive Director Datuk Zainun Aishah Ahmad Datuk Seri Hajjah Zurainah Musa Senior Independent Non-Executive Director Non-Independent Non-Executive Director REGISTERED OFFICE PRINCIPAL BANKERS 28th Floor, Menara Boustead Affin Bank Berhad 69 Jalan Raja Chulan Affin Hwang Investment Bank Berhad 50200 Kuala Lumpur, Malaysia Alliance Bank Malaysia Berhad Tel : (03) 2141 9044 Ambank (M) Berhad Fax : (03) 2141 9750 CIMB Bank Berhad www.boustead.com.my Malayan Banking Berhad OCBC Bank (Malaysia) Berhad REGISTRAR RHB Bank Berhad Tricor Investor & Issuing House United Overseas Bank Berhad Services Sdn Bhd Unit 32-01, Level 32, Tower A AUDITORS Vertical Business Suite Ernst & Young PLT Avenue 3, Bangsar South No. 8 Jalan Kerinchi STOCK EXCHANGE LISTING 59200 Kuala Lumpur, Malaysia Bursa Malaysia Securities Berhad Tel : (03) 2783 9299 Stock name: BSTEAD Fax : (03) 2783 9222 Stock code: 2771 COMPANY SECRETARIES HOLDING CORPORATION Affendi Mohd Yob Lembaga Tabung Angkatan Tentera Juniza Azizan 4 BOUSTEAD HOLDINGS BERHAD WHAT WE DO DIVISIONAL HIGHLIGHTS We are one of Malaysia’s established conglomerates, anchored by several lines of businesses. Today, the Boustead Group has grown more than 80 companies which comprised of listed and non-listed subsidiaries and associate companies, with a presence in key sectors of the Malaysian economy via our five Divisions. With a renewed mission through our purpose-driven Reinventing Boustead strategy, we aim to revitalise the Group’s core businesses in this digital age and achieve sustainable long-term growth. PLANTATION PROPERTY & DIVISION INDUSTRIAL DIVISION The Plantation Division is recognised The Property & Industrial for its decades of expertise and proven Division primarily engages in record of excellence in plantation property development, property management. With estates and mills investment, hotel operations, spanning Peninsular Malaysia as well project management as well as the as Sabah and Sarawak, the Division manufacturing and distribution of advocates sustainable agricultural building materials. The Division has practices across all its operations. established a strong presence and an extensive portfolio of assets including a hotel chain, award-winning townships, retail establishments as well as commercial and residential developments. ABOUT BOUSTEAD GROUP ANNUAL REPORT 2020 5 PHARMACEUTICAL HEAVY INDUSTRIES TRADING, FINANCE & DIVISION DIVISION INVESTMENT DIVISION The Pharmaceutical Division is an The Heavy Industries Division The Trading, Finance & Investment established pharmaceutical Group, caters to the defence, security Division’s portfolio extends across servicing the pharmaceutical and and marine sectors, servicing various sectors within the Malaysian healthcare sectors. The Division is Government and commercial economy. The Division is primarily involved in logistics and distribution, clients through the provision of involved in the operations of manufacturing of generic shipbuilding and maintenance, Malaysia’s only other home-grown pharmaceuticals and medical repair and services, among retail petroleum network as well as devices, sales and marketing, others. the supply of financial products and distribution of medical products and solutions, quality education services hospital equipment as well as retail as well as travel and tourism related pharmacy. services. 6 BOUSTEAD HOLDINGS BERHAD FINANCIAL CALENDAR FINANCIAL YEAR 1 January 2020 to 31 December 2020 ANNUAL REPORT RESULTS Issued 31 May 2021 st rd 1 quarter 3 quarter Announced Announced 19 June 2020 30 November 2020 ANNUAL GENERAL MEETING To be held 24 June 2021 nd th 2 quarter 4 quarter Announced Announced 27 August 2020 31 March 2021 ABOUT BOUSTEAD GROUP ANNUAL REPORT 2020 7 WHATFACTS AT WE A GLANCE DO RM EBITDA REVENUE RM 7.9 BILLION 585 LOSS RM MILLION BEFORE TAXATION & 420 ZAKAT CAPEX & MILLION ACQUISITION RM LOSS RM AFTER TAXATION & 501 115 ZAKAT MILLION MILLION TOTAL SHAREHOLDERS’ NET ASSETS ASSETS EQUITY PER SHARE RM RM 16.0 3.1 154 BILLION BILLION SEN 8 BOUSTEAD HOLDINGS BERHAD FIVE-YEAR FINANCIAL HIGHLIGHTS 2020 2019 2018 2017 2016 FINANCIAL PERFORMANCE Revenue 7,881 10,322 10,186 10,238 8,371 (Loss)/profit before taxation and zakat (420)
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