B O U S T E Ad H O L D in G S B Er

196001000193 (3871-H)

BOUSTEAD HOLDINGS BERHAD ANNUAL REPORT 2019

WHAT’S INSIDE

PG.40

CHAIRMAN’S STATEMENT

Annual Report 2019

Sustainability Report 2019

Cover Rationale

We remain steadfast and resilient as we face challenges in the current market landscape. With hard work, determination and the right mindset, we will continue to strengthen and

persevere in times of adversity to emerge stronger. By working

hard on improving efficiencies, building on organic growth and

unlocking opportunities for new investments, we will continue to stay the course and deliver sustainable results and value from our core business areas.

Please scan the QR code for 2019 Annual Report
Please scan the QR code for 2019 Sustainability Report

ABOUT BOUSTEAD GROUP

02 Overview of Boustead Holdings Berhad

04 What We Do

Annual

58^th

General Meeting

06 Facts at a Glance 07 Financial Calendar

08 Five-Year Financial Highlights 10 Corporate Information

Refer to pages 286 to 296 for Annual General Meeting Information

Mutiara 5, Ground Floor Royale Chulan Damansara

LEADERSHIP

WHERE

2, Jalan PJU 7/3, Mutiara Damansara 47810 Petaling Jaya, Selangor

12 Board of Directors 14 Board at a Glance

15 Profile of Directors

22 July 2020

WHEN TIME

29 Heads of Subsidiary Companies 32 Heads of Departments 34 Profile of Heads of Departments 40 Chairman’s Statement

9.30 a.m.

PG.68

MANAGEMENT
DISCUSSION AND
ANALYSIS

HEAVY
INDUSTRIES
DIVISION

46 Managing Director’s Review

52 Plantation Division

PG.72

58 Property Division

62 Pharmaceutical Division 68 Heavy Industries Division 72 Finance & Investment Division 76 Trading & Industrial Division

PG.58

FINANCE & INVESTMENT
DIVISION
PROPERTY DIVISION

PG.76

PG.62

PG.52

TRADING & INDUSTRIAL
DIVISION
PLANTATION
DIVISION
PHARMACEUTICAL
DIVISION

FINANCIAL STATEMENTS

111 Financial Statements

SHAREHOLDERS’ INFORMATION

262 Boustead Group

270 Recurrent Related Party Transactions 273 Top 30 Properties of the Group 276 Additional Disclosures 278 Group Oil Palm Agricultural Statistics 279 Plantation Area Statement 280 Location of Group Plantations 282 Shareholding Statistics

GOVERNANCE

80 Audit Committee Report
284 Statement of Directors’ Interests

285 Dividend Policy

86 Corporate Governance
Overview Statement

102 Statement on Risk Management
286 Notice of Annual General Meeting

291 Administrative Notes

and Internal Control
107 Risk Committee Report 110 Directors’ Responsibility

•

Proxy Form
Statement

01

02

OVERVIEW OF BOUSTEAD HOLDINGS BERHAD

WHO WE ARE

CORPORATE VISION

To hold strong to our tradition of delivering solid and stable growth while nurturing talent that will bring about a higher level of excellence in all endeavours that the

Boustead Holdings Berhad traces its roots back to 1828.
The Group has evolved from its modest beginnings to become a diverse Malaysian conglomerate, now operating in six core areas of the Malaysian economy, which are: plantation, property, pharmaceutical, heavy industries, ﬁnance & investment and trading & industrial.

Boustead Group undertakes.

The Group employs over 18,000 individuals across its listed and non-listed operations. As at 31 December 2019, Boustead’s total assets stood at RM17.0 billion while shareholders’ funds amounted to RM3.7 billion.

CORPORATE MISSION

To place the interest of our shareholders as the highest priority by maximising shareholder value.

To acknowledge our employees as our most valuable assets.

PHILOSOPHIES

To continue development of our human resources to retain a competitive edge in the industry.

To accept the importance of our clients by providing products and services of the highest quality.
• To constantly develop organisational policies and corporate systems to fulﬁl the needs of dynamic business environments.
To enhance our global position while proudly
• To continuously improve customer satisfaction by

enhancing human resource development strategies and managing resources efﬁciently as well as practise a positive corporate culture. representing Malaysia.

GROUP MOTTO

• To hold ﬁrm to a balanced management style of being prudent in seizing business opportunities that enhance shareholder value.

• To maintain a corporate governance culture that advocates best practices in business.

‘A TRADITION OF STRENGTH AND STABILITY, A VISION OF GROWTH
AND EXCELLENCE’.

• To embrace diversity and entrepreneurship in our daily dealings.

CORE VALUES

RESPECT

DIGNITY. TRUST. FAIR. OPEN. HONOUR

What it means to us;

We believe in the inherent worth of people and will honour relationships with our fellow employees, our customers, our shareholders, our stakeholders and our community.

We measure respect for people by the way we treat each other, by the contributions that ﬂow from our diversity, by the productivity of our relationships, and by a job well done, no matter what the job is.

INTEGRITY

HONEST. TRUTHFUL. CONSCIENCE. SINCERE. ACCOUNTABILITY

We adopt open and honest attitudes in all aspects.
We adhere to all sets of rules, regulations and guidelines.
We perform to our best ability at a very high standard whilst continuously improving the quality of our products and services.

TEAMWORK

UNITY. HARMONY. CO-OPERATION. COMMITMENT. COLLABORATION

We collaborate and work co-operatively across cultures and organisational boundaries to achieve shared goals and work towards solutions which generally beneﬁt all parties involved.

We share our beliefs and agree to a common cause to show our commitment to each other’s well being.

EXCELLENCE

PROFESSIONAL. COURAGE. PRIDE. PROACTIVE. COMPETITIVE

We uphold our commitment to operate competitively, strive to acquire the relevant knowledge and skills and benchmark ourselves against world-class leaders in our efforts towards continuous improvement.

We demonstrate ﬂexibility as well as courage, highlighting our ability to keep ourselves aligned with a world in motion.

03

04

WHAT WE DO

BUSINESS UNITS & HIGHLIGHTS

Plantation Division
Property Division
Pharmaceutical
Division

Boustead Holdings Berhad’s Plantation Division possesses decades of experience in managing plantations across Peninsular Malaysia, as well as Sabah and Sarawak. As one of the key players within Malaysia’s palm oil industry, the Division fully supports
The Property Division is involved in four key activities within the property to the pharmaceutical and healthcare
The Pharmaceutical Division caters industry, which are property development, property investment, hotel operations and project management. The Division has built a formidable portfolio of key assets including a hotel chain, awardwinning townships, retail industries with its range of offerings that include manufacturing of generic pharmaceuticals and medical devices, logistics and distribution, sales and marketing, distribution of medical products and hospital equipment in addition to retail pharmacy. sustainable practices as part of its

operations.

establishments as well as

commercial and residential developments.

Heavy Industries
Division
Finance & Investment
Division
Trading & Industrial
Division

The Heavy Industries Division’s participation in the maritime and aerospace sectors involves the provision of various products and services including naval shipbuilding, maintenance, repair and overhaul services, fabrication for the oil and gas industry as well as aviation support services.
The Finance & Investment Division is involved in financial services, education, travel and tourism. The Division’s financial services business is driven by AFFIN Bank which provides financial solutions encompassing investment banking, consumer banking, Islamic banking, finance as well as insurance.
The Trading & Industrial Division’s key business venture is owning and operating Malaysia’s only other home-grown retail petroleum network. The Division also participates in the distribution of building materials and provision of project management expertise for the construction industry.

05

06

FACTS AT A GLANCE

REVENUE

RM10.3 billion

EBITDA

RM455 million

LOSS BEFORE

LOSS AFTER

TAXATION & ZAKAT

RM1.3 billion
RM1.4 billion

CAPEX &
ACQUISITION
NET ASSETS PER SHARE

RM598 million
184 sen

SHAREHOLDERS’
EQUITY
TOTAL ASSETS

RM3.7 billion
RM17.0 billion

FINANCIAL CALENDAR

FINANCIALYEAR

1 January to 31 December 2019

RESULTS

1^stquarter

Announced 30 May 2019

2^ndquarter

Announced 28 August 2019

3^rdquarter

Announced 29 November 2019

4^thquarter

Announced 28 February 2020

ANNUAL REPORT

Issued 24 June 2020

ANNUAL GENERAL MEETING

To be held 22 July 2020

07

08

FIVE-YEAR FINANCIAL HIGHLIGHTS

2019

2018

2017

2016

2015

FINANCIAL PERFORMANCE

Revenue

10,322 (1,336) (1,386) (1,279)
(63.1) (29.3)
(5.6)

10,186
(479) (554) (535)
(26.4)
(9.9)
10,238
1,073
875 436
21.5
7.2
8,371
740 589 369
20.0
7.0
8,663
269 139
13
0.8 0.3
(Loss)/profit before taxation and zakat (Loss)/profit after taxation and zakat (Loss)/profit attributable to shareholders (Loss)/earnings per share Return on equity sen
%

%

Return on assets

(1.3)

7.0

5.8

3.3

Return on revenue

%

1.7

(0.3)

12.1

7.0

4.3

DIVIDENDS

Dividend for the year Net dividend per share Dividend yield

––––

101
5.0 3.5
223
11.0
2.9
305
17.5
6.6
207
20.0
4.7
–sen
%

times

Dividend cover

(5.3)

2.0

1.2

GEARING

Borrowings Gearing Interest cover

7,910
1.4
(2.8)

7,533
1.0
(1.0)
6,184
0.7 6.0
7,317
0.9 3.5
8,034
1.1 1.9 times times

OTHER FINANCIAL STATISTICS

Net assets per share Share price – high Share price – low Price earning ratio times Paid up share capital Shareholders’ equity Total equity sen sen sen

184 160
93

246 292 136
305 307 241
295 271 186
439 475 380
–
517

(2)

(5)

13

2,736 3,729 5,688
16,975

2,736 4,995 7,804
18,417
2,736 6,182 9,243
18,263
1,014 5,985 8,875
18,530
4,543 7,358

17,620

Total assets

Notes:

– All figures are in RM million unless otherwise stated. – The financial information relating to 2019, 2018 and 2017 are in accordance with the Malaysian Financial Reporting Standard (MFRS) Framework. – The financial information relating to 2016 and 2015 are in accordance with the Financial Reporting Standard (FRS) Framework.

PROFIT/(LOSS) BEFORE TAXATION
AND ZAKAT

SHAREHOLDERS’ EQUITY

REVENUE

(RM Million)

8,663 8,371 10,238 10,186 10,322

269

740

1,073 (479) (1,336)

4,543 5,985 6,182 4,995 3,729

2015

2015 2016 2017 2018 2019

EARNINGS/(LOSS) PER SHARE

DIVIDEND PER SHARE

NET ASSETS PER SHARE

(Sen)

0.8

20.0

21.5

(26.4) (63.1)

20.0

17.5

11.0

5.0

–

439

295

305

246

184

2015 2016 2017 2018 2019

09

10

CORPORATE INFORMATION

DIRECTORS

Dato’ Seri Mohamed Khaled Nordin

Chairman Non-Independent Non-Executive Director

Appointed with effect from (w.e.f.) 1 May 2020

Dato’ Nonee Ashirin Dato’ Mohd Radzi

Independent Non-Executive Director

Appointed w.e.f. 15 July 2019

Dato’ Wira (Dr.) Megat Abdul Rahman Megat Ahmad

Senior Independent Non-Executive Director

(until 24 April 2019)

Abraham Verghese a/l TV Abraham

Datuk Zainun Aishah Ahmad

Senior Independent Non-Executive Director

Datuk Azzat Kamaludin

Non-Independent Non-Executive Director

(until 31 July 2019)
Appointed w.e.f. 1 December 2017

Datuk Francis Tan Leh Kiah

Loong Caesar

Dato’ Sri Amrin Awaluddin

Managing Director/Chief Executive Officer

Appointed w.e.f. 6 May 2019

Dato’ Sri Ghazali Mohd Ali

Non-Independent Executive Director

Izaddeen Daud

Appointed w.e.f. 18 May 2020

Nik Amlizan Mohamed

Non-Independent Non-Executive Director

Appointed w.e.f. 1 November 2018

Gen. Tan Sri Dato’ Seri Panglima Mohd Ghazali Hj. Che Mat (R)

Chairman Non-Independent Non-Executive Director

Lieutenant General Dato’ Fadzil Mokhtar (R)

Nucleus Tower at Mutiara Damansara

Mutiara Rini Phase 6B houses in Skudai, Johor

REGISTERED OFFICE

SECRETARIES

AUDITORS

28th Floor, Menara Boustead 69 Jalan Raja Chulan
Affendi Mohd Yob Juniza Azizan
Ernst & Young PLT
50200 Kuala Lumpur, Malaysia Tel : (03) 2141 9044 Fax : (03) 2141 9750 www.boustead.com.my

STOCK EXCHANGE LISTING
PRINCIPAL BANKERS

Bursa Malaysia Securities Berhad

Stock name: BSTEAD

Affin Bank Berhad

Affin Hwang Investment Bank Berhad

Alliance Bank Malaysia Berhad Ambank (M) Berhad
Stock code: 2771

REGISTRAR

Tricor Investor & Issuing House Services Sdn Bhd Unit 32-01, Level 32, Tower A Vertical Business Suite Avenue 3, Bangsar South No. 8 Jalan Kerinchi
CIMB Bank Berhad Malayan Banking Berhad OCBC Bank (Malaysia) Berhad RHB Bank Berhad

HOLDING CORPORATION

Lembaga Tabung Angkatan Tentera
United Overseas Bank Berhad
59200 Kuala Lumpur, Malaysia Tel : (03) 2783 9299 Fax : (03) 2783 9222

Research and development of pharmaceutical products

11