CONTENTS PAGE Corporate Information 2 - 3 Notice of Annual General Meeting 4 - 8 Group Corporate Structure 9 Five-Years Group Financial Highlights 10 - 11 Awards & Recognition 12 Chairman’s Statement 13 - 16 Review of Operations 17 - 23 Directors’ Profile 24 - 26 Corporate Social Responsibility 27 Board Charter 28 - 31 Corporate Governance Statement 32 - 42 Statement on Risk Management and Internal Control 43 - 45 Audit Committee Report 46 - 47 Terms of Reference of Audit Committee 48 - 51 Terms of Reference of Nomination Committee 52 - 54 Terms of Reference of Remuneration Committee 55 - 56 Terms of Reference of Risk Management Committee 57 - 58 Financial Statements 59 - 129 List of Major Properties Held by the Group 130 Analysis of Shareholdings 131 - 133 Analysis of Warrant Holdings 134 - 135 Statement in relation to Proposed Renewal of Authority to Purchase Its Own Shares by KSL Holdings Berhad 136 - 142 Form of Proxy Enclosed 1 ANNUAL REPORT 2014 CORPORATE INFORMATION BOARD OF DIRECTORS Ku Hwa Seng (Executive Chairman) Khoo Cheng Hai @ Ku Cheng Hai (Group Managing Director) Ku Tien Sek (Executive Director) Lee Chye Tee (Executive Director) Gow Kow (Independent Non-Executive Director) Goh Tyau Soon (Independent Non-Executive Director) Tey Ping Cheng (Independent Non-Executive Director) COMPANY SECRETARY Ng Yim Kong (LS 0009297) c/o Strategy Corporate Secretariat Sdn. Bhd. Unit 07-02, Level 7, Persoft Tower Tropicana Golf & Country Resort 6B Persiaran Tropicana, 47410 Petaling Jaya Selangor Darul Ehsan Tel: 03-7804 5929 / Fax: 03-7805 2559 REGISTERED OFFICE Wisma KSL, 148, Batu 1 ½, Jalan Buloh Kasap 85000 Segamat, Johor Darul Takzim Tel: 07-931 1430 / Fax: 07-932 4888 E-mail: [email protected] Website: http://www.ksl.net.my AUDITORS ECOVIS AHL PLT(LLP0003185-LCA) & (AF: 001825) Chartered Accountants No. 147-B, Jalan Sutera Tanjung 8/2 Taman Sutera Utama 81300 Skudai Johor Darul Ta’zim Tel: 07-556 7777 / Fax: 07-557 7776 PRINCIPAL BANKERS Malayan Banking Berhad (3813-K) OCBC Bank (Malaysia) Berhad (295400-W) RHB Bank Berhad (6171-M) AmBank (M) Berhad (8515-D) 2 ANNUAL REPORT 2014 SHARE REGISTRARS Symphony Share Registrars Sdn Bhd (378993-D) Level 6, Symphony House Block D13, Pusat Dagangan Dana 1 Jalan PJU 1A/46, 47301 Petaling Jaya Selangor Darul Ehsan Tel: 03-7841 8000 / Fax: 03-7841 8151 Website: http://www.symphony.com.my SOLICITORS Lee Fook Leong & Co No. 29, 31 & 33, 1st Floor, (Peti Surat 95), Jalan Kekwa 85007 Segamat, Johor Darul Takzim Tel: 07-931 3479 / Fax: 07-931 4180 YK Chin 144B Jalan Sri Pelangi, Taman Pelangi 80400 Johor Bahru, Johor Darul Takzim Tel: 07-331 9939 / Fax: 07-331 8939 STOCK EXCHANGE LISTING Main Market of Bursa Malaysia Securities Berhad (635998-W) Stock Name: KSL Stock Code: 5038 3 ANNUAL REPORT 2014 NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN THAT the Fifteenth Annual General Meeting of the Company will be held at KSL Resorts, Level G, Infusion Private Room, 33, Jalan Seladang, Taman Abad, 80250 Johor Bahru, Johor Darul Takzim on Tuesday, 23 June 2015 at 11.00 a.m. for the following purposes:- AGENDA 1) To receive the Audited Financial Statements for the fi nancial year ended 31 December Please refer to 2014 together with the Directors’ and Auditors’ Reports thereon. Note B on this Agenda 2) To approve the payment of the Directors’ Fees for the fi nancial year ended 31 December Resolution 1 2014. 3) To re-elect the following Directors who are retiring in accordance with Article 76 of the Company’s Articles of Association:- a) Mr. Khoo Cheng Hai @ Ku Cheng Hai Resolution 2 b) Mr. Goh Tyau Soon Resolution 3 4) To re-appoint Messrs. Ecovis AHL, the retiring Auditors of the Company and to Resolution 4 authorise the Board of Directors to fi x their remuneration. SPECIAL BUSINESS To consider and, if thought fi t, pass with or without modifi cations, the following Resolutions:- 5) ORDINARY RESOLUTION 1 Resolution 5 • AUTHORITY TO DIRECTORS TO ALLOT AND ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965 “THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to allot and issue shares in the Company at any time until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fi t provided that the aggregate number of shares to be issued does not exceed 10% of the issued and paid-up share capital of the Company (excluding treasury shares) for the time being, subject always to the approvals of the relevant regulatory authorities.” 6) ORDINARY RESOLUTION 2 Resolution 6 • PROPOSED RENEWAL OF AUTHORITY FOR THE PURCHASE OF ITS OWN SHARES BY THE COMPANY “THAT subject to the Companies Act, 1965, the Memorandum and Articles of Association of the Company, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“BMSB”) and all other prevailing laws, rules, regulations and orders issued and/or amended from time to time by the relevant governmental and/or regulatory authorities, the Company be and is hereby authorised to purchase such amount of ordinary shares in the Company of not exceeding 10% of the total and issued paid-up ordinary shares of RM0.50 each in the Company (“Proposed Share Buy-Back”) as may be determined by the Directors of the Company from time to time through BMSB upon such terms and conditions as the Directors may deem fi t and expedient in the interest of the Company provided that:- a) the aggregate number of shares purchased does not exceed 10% of the total issued and paid-up share capital of the Company for the time being quoted on BMSB; 4 ANNUAL REPORT 2014 NOTICE OF ANNUAL GENERAL MEETING (Cont’d) b) the maximum funds to be allocated by the Company for the purpose of purchasing its shares shall not exceed the retained profi ts and share premium account of the Company as at 31 December 2014 of RM114,764,186 and RM41,573,202 respectively at the time of the purchase(s); and c) at the discretion of the Directors of the Company, the shares of the Company to be purchased are proposed to be cancelled and/or retained as treasury shares and may be distributed as dividends or resold on BMSB or subsequently cancelled. AND THAT the Directors be and are hereby authorised to carry out the Proposed Share Buy-Back immediately upon the passing of this resolution until:- a) the conclusion of the next Annual General Meeting (“AGM”) of the Company, unless by ordinary resolution passed at the meeting, the authority is renewed, either unconditionally or subject to conditions; b) the expiration of the period within which the next AGM is required by law to be held; or c) revoked or varied by ordinary resolution passed by the members of the Company in a general meeting, whichever occur fi rst but not so as to prejudice the completion of purchase(s) by the Company before the aforesaid expiry date and to take all steps as are necessary and/ or to do all such acts and things as the Directors may deem fi t and expedient in the interest of the Company to give full effect to the Proposed Share Buy-Back with full powers to assent to any conditions, modifi cations, amendments and/or variations as may be imposed by the relevant authorities.” 7) ORDINARY RESOLUTION 3 Resolution 7 • AUTHORITY FOR MR. GOW KOW TO CONTINUE IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTOR “THAT Mr. Gow Kow who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, be and is hereby authorised to continue to act as Independent Non-Executive Director of the Company until the conclusion of the next Annual General Meeting in accordance with the Malaysian Code on Corporate Governance 2012.” 8) ORDINARY RESOLUTION 4 Resolution 8 • AUTHORITY FOR MR. GOH TYAU SOON TO CONTINUE IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTOR “THAT Mr. Goh Tyau Soon who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, be and is hereby authorised to continue to act as Independent Non-Executive Director of the Company until the conclusion of the next Annual General Meeting in accordance with the Malaysian Code on Corporate Governance 2012.” 5 ANNUAL REPORT 2014 NOTICE OF ANNUAL GENERAL MEETING (Cont’d) 9) ORDINARY RESOLUTION 5 Resolution 9 • AUTHORITY FOR MR. TEY PING CHENG TO CONTINUE IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTOR “THAT Mr. Tey Ping Cheng who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, be and is hereby authorised to continue to act as Independent Non-Executive Director of the Company until the conclusion of the next Annual General Meeting in accordance with the Malaysian Code on Corporate Governance 2012.” 10) ORDINARY RESOLUTION 6 Resolution 10 • PROPOSED RENEWAL OF AUTHORITY FOR DIRECTORS TO ALLOT AND ISSUE NEW ORDINARY SHARES OF RM0.50 EACH IN THE COMPANY (KSL SHARES) IN RELATION TO THE DIVIDEND REINVESTMENT PLAN THAT PROVIDES SHAREHOLDERS OF THE COMPANY WITH AN OPTION TO REINVEST THEIR CASH DIVIDEND IN NEW KSL SHARES (DIVIDEND REINVESTMENT PLAN) “THAT pursuant to the Dividend Reinvestment Plan (DRP) as approved by the Shareholders at the Extraordinary General Meeting held on 28 November 2014, approval be and is hereby given to the Directors to allot and issue such number of new KSL Shares, from time to time as may be required to be allotted and issued pursuant to the DRP until the conclusion of the next Annual General Meeting, upon such terms and conditions and