INVESTING for the FUTURE Annual Report 2017 WHAT’S INSIDE
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INVESTING FOR THE FUTURE Annual Report 2017 WHAT’S INSIDE HIGHLIGHTS CORPorate GOVERNANCE 01 5-Year Group Financial Highlights 60 Corporate Governance Overview Statement 02 Economic Value for Shareholders 77 Statement of Directors’ Responsibility 78 Additional Compliance Information CORPorate INFORMation 79 Statement on Risk Management and Internal Control 03 Corporate Information 88 Board Audit Committee Report 04 Corporate Structure 05 Group Directory FINANCIAL StateMENTS 07 Profile of Directors 92 Financial Statements 17 Board Committees 18 Senior Management Team OTHER CORPorate INFORMation 20 Profile of Senior Management 211 List of Properties 214 Analysis of Shareholdings PERFORMANCE REVIEW 25 Message from the Chairman 28 The President/GMD’s Statement and Management Discussion & Analysis 40 KUB in the News 43 Sustainability Statement INVESTING FOR THE FUTURE As part of our sustainability initiatives, KUB We play a leading role in shaping our future by focusing on our core Malaysia Berhad is reducing the print run of all publication. We encourage you to businesses, inspiring vibrant ideas, nurturing potential and delivering visit our Annual Report microsite at www. excellence in everything we do. kub.com/annualreport2017. You will have the privilege to download, retrieve and view any pages of the annual report at your We shall continue to invest in our businesses and human capital in order to convenience. keep ourselves competitive; and ensure our businesses are able to survive the inevitable tough times. Under the KUB’s expansion strategy, each sector The printed copy of the Annual Report is also available upon request. Kindly please will be able to boost performance in their individual business, thereby fill in the requisition form and return it to us unlocking value for shareholders. via post or fax. ANNUAL REPORT 2017 | 1 5-Year Group Financial Highlights REVENUE PROFIT FOR THE YEAR (RM’000) (RM’000) ‘13 947,856* ‘13 4,942 ‘14 626,559* ‘14 4,475 ‘15 432,154* ‘15 9,075 ‘16 495,772* ‘16 21,542 ‘17 599,277 ‘17 30,842 NET ASSETS PER SHARE BASIC EARNINGS PER SHARE (RM) (sen) ‘13 0.49 ‘13 0.87 ‘14 0.48 ‘14 0.41 ‘15 0.50 ‘15 1.41 ‘16 0.53 ‘16 4.07 ‘17 0.58 ‘17 5.78 RM’000 2013 2014 2015 2016 2017 Revenue 947,856* 626,559* 432,154* 495,772* 599,277 Profit before taxation 5,491* 10,198* 50,303* 32,334* 40,252 Profit for the year 4,942 4,475 9,075 21,542 30,842 Profit attributable to owners of the parent 4,846 2,294 7,854 22,628 32,165 Shareholders’ fund 273,331 269,716 277,153 296,357 324,401 Basic earnings per share (sen) 0.87 0.41 1.41 4.07 5.78 Net assets per share (RM) 0.49 0.48 0.50 0.53 0.58 Dividend per share (sen) - - 0.50 1.0 1.0 Return on equity 2% 1% 3% 8% 10% Gearing ratio (times) 0.34 0.22 0.21 0.21 0.18 *Note: Continuing Operations 2 | KUB MALAYSIA BERHAD (6022-D) Economic Value for Shareholders MARKET CAPITALISATION* (RM million) 300 250.4 250 225.4 211.5 222.6 217.0 200 161.4 150 100 50 0 2013 2014 2015 2016 2017 30/3/2018 * As at 31 December (closing price) SHARE PRICE MOVEMENT# (RM) 0.7 0.6 0.5 0.4 0.3 APR ‘17 may ‘17 JUN ‘17 JUL ‘17 AUG ‘17 SEP ‘17 OCT ‘17 NOV ‘17 DEC ‘17 JAN ’18 FEB ’18 MAR ’18 # Closing Price MONTHLY TRADING VOLUME & SHARE PRICE STATISTICS MONTH Apr ‘17 May ‘17 Jun ‘17 Jul ‘17 Aug ‘17 Sep ‘17 Oct ‘17 Nov ‘17 Dec ‘17 Jan ’18 Feb ’18 Mar ’18 Volume (‘000) 52.04 89.23 49.99 39.84 56.50 31.12 27.50 14.17 13.66 95.94 41.49 90.67 High (RM) 0.625 0.625 0.575 0.530 0.560 0.530 0.500 0.485 0.415 0.545 0.500 0.555 Low (RM) 0.550 0.525 0.480 0.475 0.505 0.475 0.460 0.410 0.370 0.385 0.410 0.425 Closing Price (RM) 0.580 0.555 0.490 0.520 0.520 0.485 0.475 0.420 0.390 0.465 0.485 0.450 ANNUAL REPORT 2017 | 3 Corporate Information Board of Directors Dato’ Ahmad Ibnihajar Dato’ Jamelah A.Bakar Datuk Haji Mohd Haniff Haji Koslan (Chairman (Independent (Independent Independent Non-Executive Director) Non-Executive Director) Non-Executive Director) Datuk Abdul Rahim Mohd Zin Tunku Alizan Raja Muhammad Datuk Wira Mohd Hafarizam Harun (President/Group Managing Director) Alias (Independent (Non-Independent Non-Executive Director) Dato’ Ab Rahim Abu Bakar Non-Executive Director) (Retired w.e.f. 23 May 2017) (Senior Independent Non-Executive Director) Tengku Zahaimi Tuan Hashim (Non-Independent Datuk Hj Faisyal Non-Executive Director) Datuk Yusof Hamdain Diego (Non-Independent Mohammad Farish Nizar Othman Non-Executive Director) (Independent Non-Executive Director) Company Secretaries External Auditors Share Registrar Sharina Saidon Messrs. Deloitte PLT Symphony Share Registrars Sdn Bhd (LS 0006127) (LLP0010145-LCA) (378993-D) Chartered Accountants (AF 0080) Level 6, Symphony House Mohd Afendy Md Yazim Level 16, Menara LGB Pusat Dagangan Dana 1 (MAICSA 7056481) 1, Jalan Wan Kadir Jalan PJU 1A/46 Taman Tun Dr. Ismail 47301 Petaling Jaya Nani Suryani Ahmad Tajudin 60000 Kuala Lumpur Selangor Darul Ehsan (MAICSA 7045699) Tel : +(603) 7610 8888 Tel : +(603) 7849 0777 Fax : +(603) 7726 8986 Fax : +(603) 7841 8151/8152 Registered Office KUB Malaysia Berhad (6022-D) Stock Exchange Listing Principal Bankers Level 8-11, Unit 1, Capital 3 Oasis Square, Ara Damansara Bursa Malaysia Securities Berhad Malayan Banking Berhad Jalan PJU 1A/7A (635998-W) Bank Pertanian Malaysia Berhad 47301 Petaling Jaya Exchange Square (Agrobank) Selangor Darul Ehsan Bukit Kewangan Bank Islam Malaysia Berhad 50200 Kuala Lumpur Affin Bank Berhad Tel : +(603) 7680 9600 (General) Fax : +(603) 7680 9793 Market : Main Market (Group Secretarial Division) Stock name : KUB Fax : +(603) 7680 9610 (General) Stock Code : 6874 Sector : Trading/Services Website : www.kub.com 4 | KUB MALAYSIA BERHAD (6022-D) Corporate Structure Agro Energy 100% 100% KUB Agro Holdings Sdn Bhd KUB Gaz Sdn Bhd (9189-U) (47135-V) 60% KUB Sepadu Sdn Bhd (392172-H) Food Business 66% 100% KUB Maju Mill Sdn Bhd (307838-U) Restoran Kualiti Sdn Bhd (477993-A) 100% 100% KUB Malua Plantation Sdn Bhd A&W (Malaysia) Sdn Bhd (62716-K) (5168-X) Power Property 100% 100% KUB Power Sdn Bhd Peraharta Sdn Bhd (236338-P) (19250-X) 100% Information and KUB Tower Sdn Bhd Communications (233906-D) Technology 40% 100% KUB Berjaya Enviro Sdn Bhd (614497-H) KUB Telekomunikasi Sdn Bhd (230021-D) 100% KFT International (Malaysia) Sdn Bhd (245501-X) 100% Empirical Systems (M) Sdn Bhd (584218-A) Note: The chart above represents active companies within the Group ANNUAL REPORT 2017 | 5 Group Directory Corporate Office: Operations Office: ENERGY SECTOR Level 3, Unit 1, Capital 3 (Westport Branch) Oasis Square, Ara Damansara Lot 55710, Lorong Kenanga 8 KUB Gaz Sdn Bhd (9189-U) Jalan PJU 1A/7A Liquid Bulk Terminal 47301 Petaling Jaya Westport, Pulau Indah Selangor Darul Ehsan 42009 Port Klang Tel : +(603) 7610 0018 Selangor Darul Ehsan Fax : +(603) 7610 0017 Tel : +(603) 3101 1799 Fax : +(603) 3101 1791 (Johor Bahru Branch) 16, Jalan Kangkar Tebrau 81100 Johor Bahru Johor Darul Takzim Tel : +(607) 333 1351 Fax : +(607) 332 6527 Corporate Office: INFORMation AND Unit G30, Level G-Unit 430 COMMunications Level 4, Block 4 TECHNOLOGY SECTOR Laman Seri Business Park Persiaran Sukan KUB Telekomunikasi Sdn Bhd (230021-D) Seksyen 13 KFT International (Malaysia) Sdn Bhd 40100 Shah Alam (245501-X) Selangor Darul Ehsan Tel : +(603) 5514 3800 Empirical Systems (M) Sdn Bhd (584218-A) Fax : +(603) 5510 0242 Corporate Office: FOOD SECTOR No.66, Jalan Sungai Burung A&W (Malaysia) Sdn Bhd (5168-X) AA 32/AA, Bukit Rimau, Section 32 40460 Shah Alam Selangor Darul Ehsan Tel : +(603) 5131 6600 Fax : +(603) 5131 3777/5131 3737 6 | KUB MALAYSIA BERHAD (6022-D) Group Directory Corporate Office: AGRO SECTOR Level 3, Unit 1, Capital 3 KUB Agro Holdings Sdn Bhd (47135-V) Oasis Square, Ara Damansara KUB Sepadu Sdn Bhd (392172-H) Jalan PJU 1A/7A KUB Maju Mill Sdn Bhd (307838-U) 47301 Petaling Jaya KUB Malua Plantation Sdn Bhd (62716-K) Selangor Darul Ehsan Tel : +(603) 7610 9490 Fax : +(603) 7610 9496 Corporate Office: POWER SECTOR Level 3, Unit 1, Capital 3 KUB Power Sdn Bhd (236338-P) Oasis Square, Ara Damansara Jalan PJU 1A/7A 47301 Petaling Jaya Selangor Darul Ehsan Tel : +(603) 7610 0018 Fax : +(603) 7610 0017 Corporate Office: PROPerty SECTOR Level 8-11, Unit 1, Capital 3 Peraharta Sdn Bhd (19250-X) Oasis Square, Ara Damansara KUB Tower Sdn Bhd (233906-D) Jalan PJU 1A/7A 47301 Petaling Jaya Selangor Darul Ehsan Tel : +(603) 7680 9600 Fax : +(603) 7680 9610 Note : Registered Office of all Companies located at : KUB Malaysia Berhad (6022-D) Level 8-11, Unit 1, Capital 3, Oasis Square, Ara Damansara, Jalan PJU 1A/7A, 47301 Petaling Jaya, Selangor Darul Ehsan Tel : +(603) 7680 9600 (General) Fax : +(603) 7680 9793 (Group Secretarial Division) / +(603) 7680 9610 (General) website : www.kub.com ANNUAL REPORT 2017 | 7 Profile of Directors ACADEMIC/PROFESSIONAL QUALIFICATION(S) • Bachelor of Economics (Business Administration), University of Malaya • Fellow of the Chartered Institute of Logistics and Transport, Malaysia WORKING EXPERIENCE(S) Dato’ Ahmad Ibnihajar was a Forex Dealer and Portfolio Manager of Malayan Banking Berhad, London from 1976 to 1979 and Branch Manager with Malayan Banking Berhad from 1980 to 1984.