george kent (malaysia) berhad (1945-x) annual report … annual report for the financial year ended...

ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JANUARY 2018

CONNECTING ENGINEERING &METERING TO GLOBAL GROWTH

GEORGE KENT (MALAYSIA) BERHAD (1945-X)

1115 Jalan Puchong, Taman Meranti Jaya47120 Puchong, Selangor Darul EhsanTel : 603-8064 8000Fax : 603-8061 9954, 8061 3295 Email : [email protected]

w w w . g e o r g e k e n t . n e tG

EO

RG

E K

EN

T (MA

LAYSIA

) BER

HA

D (1

94

5-X

)

AN

NU

AL R

EP

OR

T FOR

THE FIN

AN

CIA

L YEA

R E

ND

ED

31

JAN

UA

RY 2

01

8

CORPORATE PROFILE

George Kent (Malaysia) Berhad was established in Penang in 1936 as the service branch of the then parent Company, George Kent Limited, United Kingdom. The Company was incorporated in 1951 as George Kent (Malaya) Ltd and on 11 July 1969, it was converted to a public company under the name of George Kent (Malaysia) Berhad. In 1974, the Company listed its shares on the Kuala Lumpur Stock Exchange (KLSE)

George Kent is an established engineering company engaged

concession in Papua New Guinea, which it is contracted to

water meters for standard household and industrial

rated, the preferred standard in Malaysia and many other

1GEORGE KENT (MALAYSIA) BERHAD (1945-X)

1 Vision Statement

3 Five-Year Group Financial Highlights

5 Share Price Performance

6 Chairman’s Statement

12 Management Discussion & Analysis

16 Event Highlights

25 Sustainability Report

37 Corporate Governance Overview Statement

53 Statement on Risk Management and Internal Control

57 Financial Statements

154 Analysis of Shareholdings

Form of Proxy

CONTENTS

VISION STATEMENT

To become the most admired engineering company

water metering products;

infrastructure and hospital projects.

2 ANNUAL REPORT 2018

BOARD OF DIRECTORS

Tan Sri Dato’ Tan Kay Hock

Dato’ Paduka (Dr.) Ir. Hj. Keizrul Bin Abdullah

Ooi Chin Khoon

AUDIT COMMITTEE

Dato’ Paduka (Dr.) Ir. Hj. Keizrul Bin Abdullah Tan Sri Dato’ Tan Kay Hock

RISK MANAGEMENT COMMITTEE

Tan Sri Dato’ Tan Kay HockOoi Chin Khoon

REMUNERATION COMMITTEE

Tan Sri Dato’ Tan Kay Hock

Dato’ Paduka (Dr.) Ir. Hj. Keizrul Bin Abdullah

NOMINATING COMMITTEE

Dato’ Paduka (Dr.) Ir. Hj. Keizrul Bin AbdullahTan Sri Dato’ Tan Kay Hock

CORPORATE INFORMATION

COMPANY SECRETARIES

Teh Yong Fah Gan Lee Mei

REGISTERED OFFICE

1115 Jalan Puchong

47120 PuchongSelangor Darul EhsanTel : 603-8064 8000

E-mail : [email protected] : www.georgekent.net

SHARE REGISTRAR

Johan Management Services Sdn. Bhd. 11th

Damansara Heights

Tel : 603-2092 1858Fax : 603-2092 2812E-mail : [email protected]

AUDITORS

Chartered Accountants

GROUP PRINCIPAL BANKERS

Malayan Banking BerhadOCBC Bank (Malaysia) Berhad

STOCK EXCHANGE LISTING

Stock Code : 3204


FINANCIAL PERFORMANCE

Revenue

Earnings per share* sen 22.1 18.0 8.9 5.0 6.4 Return on equity % 25.3 15.6 9.8 14.6 Return on assets % 13.1 11.1 7.3 4.6 7.1 Return on revenue % 16.9 9.3 8.0 7.4

DIVIDENDS

Gross dividend for the yearGross dividend per share sen 10.0 7.0 5.3 7.5 Net dividend for the yearNet dividend per share sen 10.0 7.0 5.3 7.0 Gross dividend yield % 5.0 6.6 6.5 9.7 Dividend cover 2.3 2.7 2.4 1.8 2.3

GEARING

BorrowingsGearing 0.1 0.1 0.2 0.1 Interest cover 51.1 25.2 17.9 25.6

OTHER FINANCIAL STATISTICS

Net assets per share* sen 71 57 51 44 Share price - high sen 209 118 181 88 Share price - low sen 98 71 67 53

11 12 16 12 Paid-up share capitalShareholders’/Total equityTotal assets

FIVE-YEAR GROUP FINANCIAL HIGHLIGHTS


FIVE-YEAR GROUP FINANCIAL HIGHLIGHTScont’d

REVENUE | RM617 million

26% increase from FY2014

2014 2015 2016 2017 2018

Million

491

353

536599 617

PROFIT BEFORE TAX | RM160 million


2014 2015 2016 2017 2018

Million

5140

71

134

160

TOTAL ASSETS | RM952 million


2014 2015 2016 2017 2018

Million

508606

683

910 952

SHAREHOLDERS’ EQUITY | RM476 million


2014 2015 2016 2017 2018

Million

247287

322

400

476

22.1 SEN


2014 2015 2016 2017 2018

Sen

6.45.0

8.9

18.0

22.1

DIVIDEND PAYOUT | RM53.51 million


2014 2015 2016 2017 2018

112.65 150.21 150.21 187.76 187.76

Million

Paid-upshare capital

(million)

15.77 15.9221.03

37.55

53.51

0

200

400

600

800

0

50

100

150

200

0

200

400

600

800

1,000

0

100

200

300

400

500

* EPS adjusted for share split involving the subdivision

shares during the year.

0

5.0

10.0

15.0

20.0

25.0

0

10

20

30

40

50

60


SHARE PRICE PERFORMANCE

Feb’17

Mar’17

Apr’17

May’17

Jun’17

Jul’17

Aug’17

Sep’17

Oct’17

Nov’17

Dec’17

Jan ’18

Feb’18

Mar’18

Apr’18

2.03 2.66 2.97 2.91 2.83 3.00 3.01 3.12 3.32 3.62 3.69 4.09 4.40 4.471.89 1.96 2.58 2.57 2.57 2.69 2.64 2.73 3.03 3.07 3.32 3.47 3.59 3.86

Total Volume (Million)Low (RM)High (RM)

26.26 45.16 30.09 27.70 17.38 29.00 35.07 22.68 26.89 17.25 22.15 22.08 30.39 35.44

4.243.34

34.22

Volume (Million)Price (RM)

High (RM) Low (RM) Total Volume (Million)

SHARE PRICE PERFORMANCE IN FY2018

5.0

4.0

3.5

4.5

3.0

2.5

1.5

1.0

0.5

2.0

Source: Bloomberg, Yahoo Finance.

0

50

40

35

45

30

25

15

10

5

20

0


CHAIRMAN’S STATEMENT

Dear Shareholders,

On behalf of your Board of Directors, I am pleased to present the

ended 31 January 2018.


CHAIRMAN’S STATEMENTcont’d

GLOBAL MACROECONOMIC REVIEW

the recovery in advanced economies.

China and other parts of emerging Asia staying resilient.

countries whilst inflation persisted below target in the

(particularly fuel) under pressure on account of the

others.

RAIL GAINS GROUND ON MALAYSIA’S RESILIENCE

The Malaysian economy continued to demonstrate resilience in the face of external shocks. Real GDP growth

demand and the export sector driving growth. While

positive spillovers to the domestic economy. Headline

and a stronger ringgit compared to 2017.

This positive backdrop supports the Malaysian

of public transport infrastructure under the Urban Public

identified by the Malaysian Government as a driver of economic growth that will increase the country’s GNI and be a safe and comfortable place to live. The Economic

Commission’s integrated 20-year National Land Public Transport Master Plan envisions 40% of all commuters using land public transport by 2030. The Commission’s commitment to improving rail transport infrastructure

Jaya and Ampang Light Rail Transit (LRT) Lines and the full opening of the 51km-long Mass Rapid Transit (MRT) Sungai

Your Company is proud to be given the opportunity to serve the Malaysian Government in driving this rail network expansion agenda. We had in 2016 completed and

Prasarana Malaysia Berhad also appointed your Company

(PDP) for the LRT3 in September 2015 for targeted



LRT3 will be the first rail project in Malaysia that uses

efficiency and natural air flows. It will also incorporate

and Automatic Fare Collection. The light rail service is

like property price gains.

Work Trains System Work Package of the MRT SSP Line (MRT2) by Mass Rapid Transit Corp Sdn Bhd in August 2016.

11 of which are underground. Stretching from Sungai Buloh

remainder by July 2022.

WATER INFRASTRUCTURE

Water is one of the most basic necessities for life.

to remain on an upward trajectory for the foreseeable future.

as the Project Manager the expansion of the State of

the reservoir’s storage from 22 million cubic metres to 73.5

water treatment plant. We also completed the upgrading

Mengkuang Dam.

Your Company is appreciative of the opportunities to

to 30 key water-related infrastructure projects in over two

METERING

Water meters remain one of the core businesses of your

meters in this region and in many countries around the

valued partner to various global metering companies.



of being among the largest in Southeast Asia. This plant houses our comprehensive production line that manufactures internationally certified water meters for

control.

HOSPITAL CONSTRUCTION

Hospitals play a key role in the Malaysian Government’s agenda to provide Malaysians with accessible and quality healthcare. This is particularly pertinent as Malaysia’s

demand on a steady growth path.

M&E services and supply medical equipment.

The past year has been one of many milestones for your Company.

that won the five-star rating for Construction Industry Development Board’s (CIDB) Contractor’s Capacity and Capability Assessment Programme – Competitive Rating

and deliver water meters to the Water Supplies Department

your Company has been successful in its bid to supply

that has successfully secured large water meter contracts

Your Company’s strong order book of RM5.6 billion will continue to provide immense earnings visibility going forward while we continue to seek new opportunities locally and in the region.

Shareholders would be happy to note that your Company’s


CORPORATE GOVERNANCE

interests of our diverse stakeholder base. This principle is

The Board also works closely with our management team to

CORPORATE SOCIAL RESPONSIBILITY

Your Company continually strives to be a responsible

our stakeholders. Our Corporate Social Responsibility (CSR)

in which we operate.

established in the year under review to support Malaysians’ tertiary-education aspirations. Students who enrolled in a supported degree or diploma course and have obtained

to apply for our Scholarship.


DIVIDEND

Your Company subscribes to the philosophy of rewarding the commitment and confidence of our valued shareholders. This guiding principle has been translated

Two interim dividends have been paid for the financial

dividends of 2.5 sen per share and 2.0 sen per share

RM25.35 million were paid on 9 November 2017 and 12

The Directors have declared a third interim dividend of 5.0 sen per share on the enlarged 563.27 million shares

year ended 31 January 2018. The dividend was paid on 25 April 2018 to shareholders whose names appear in the

43%.

Your Company has recorded a dividend payout CAGR of



Lipis to sponsor the breaking of fast and Hari Raya

Quality month in September 2017. We also organised a career-readiness programme in July 2017 to expose college

GOING FORWARD

Your Company is proud to be a part of the nation’s infrastructure-expansion narrative. We plan to continue being an employer of choice that actively upskills our

that are increasingly being presented by a more cohesive and integrated ASEAN. A portion of our Scholarship Programme funds will be used to train engineers and technicians to meet the talent needs of our railway sector. This is in tandem with the Government’s drive to spur the development of skilled workers in the rail sector through

sector’s growth in the coming years.

parts and component manufacturing. We are also looking

that provide long-term recurring and sustainable income.

grow by further strengthening our technology partnership

market share in the region. We will also be commercialising our Automated Meter Reading and Smart Metering

We will continue to grow our order book and remain

in order to create and deliver distinctive value for our shareholders.

ACKNOWLEDGEMENT

us to create and deliver value for our shareholders. I also

TAN SRI DATO’ TAN KAY HOCKChairman

Date: 7 May 2018


MANAGEMENT DISCUSSION & ANALYSIS

The Board of Directors of your Company and Management are pleased to present the

business and operational spheres for the

our take on the prospects for the coming years.

The past year has been another record year for George

performance.

Group revenue rose 3% to RM617 million in FY2018 from

team enabled the strong results of our Engineering as well

under review.

Our Engineering Division revenue registered at RM464.6

contributing 75% to the Group’s top line. This figure excludes revenue from joint ventures and associates. The division’s strong performance was derived from the delivery

completed. We also continued to closely manage our

Our Metering Division saw a 20% rise in revenue to RM152.4 million from FY2017’s RM127.5 million. The division’s

bid to supply water meters to WSD.

The Group registered a Compounded Annual Growth Rate

over the past 10 years. This encouraging performance came on the back of record quarter-on-quarter and year-on-

balance sheet is healthy with net cash standing at RM454 million as at the end of the period.

BUSINESS REVIEW BY DIVISION

Engineering Division – Rail

Ampang Light Rail Transit Line Extension

2017.

under CBTC mode taking place in February 2018. The Group

Other ongoing additional works include the installation

is substantially completed and awaiting testing and commissioning.

Light Rapid Transit 3 (LRT3)

The Group and our partner won the LRT3 contract in

the Project Delivery Partner to Prasarana Malaysia Berhad


MANAGEMENT DISCUSSION & ANALYSIScont’d

and systems contractors. The project’s work scope covers

operational by 31 August 2020. Preliminary works and

pier cap works.

Mass Rapid Transit Sungai Buloh-Serdang-Putrajaya Line

The Group and our joint venture partner had in 2016 secured the contract for the Trackworks Package of the 56.8km Mass Rapid Transit Sungai Buloh-Serdang-Putrajaya Line (MRT2) through competitive bidding. The design-

includes the design and supply of Maintenance Vehicles to

Approvals have been received for the Trackworks &

due to begin in May 2018.

Engineering Division – Hospitals

Kuala Lipis Hospital (Phase 2)

completed in June 2017. The Group in 2014 won the bid to construct a five-storey hospital block to house a 56-

department and car parks. This block forms the second

and commissioned by the Group upon securing the Ministry of Health’s appointment through competitive bidding in 2009.

Tanjung Karang Hospital

The Group in October 2016 won through competitive tender the award to design and build a hospital in Tanjung

November 2017 as scheduled. Ground treatment is presently

Endocrine Hospital Putrajaya

The Group in December 2016 won through competitive tender the award to design and build the 220-bed Hospital

The project’s scope of works included the design and



Piling works were completed as at end-February 2018. Three hydraulic jack-in pile machines were used to complete all the piling points.

Engineering Division – Water Infrastructure

Under the 10th

approved the expansion of Penang’s Mengkuang Dam to increase the reservoir’s storage from 22 million cubic metres

Sg Dua water treatment plant.

The Group was appointed Project Manager to manage the

works for the expansion of the dam. These works were completed in April 2017. The Group also completed the

diameter mild steel pipe.

Metering Division

become synonymous with water meters. The manufacturing

the Group today.

Group exports water meters to over 40 countries around the

making the Group a valued partner to various global metering companies.

The Group’s hot brass forging plant in Puchong is renowned

Asian region. This 17-acre integrated plant is home to the

producing 2.8 million water meters per year. The Group

under review – an achievement for the integrated facility that holds ISO 9001:2015 and ISO 14001:2015 Environmental

Our plant also manufactures non-meter product supplies like

segment. These products are distributed through the Group’s extensive network of hardware agents and dealers


water meters to WSD. This also makes us the only company

concurrently.

Research and Development

devote considerable resources to research and development to ensure our offerings retain their cutting edge in the marketplace.

has been and will continue to be the philosophy that

value propositions. With digitalisation rapidly redefining

actively investing in the upskilling of our human capital

a competitive metering solutions provider in ASEAN by

outcomes.

Looking Ahead

to spur the development of skilled workers in the rail sector. Plans were announced under Budget 2018 to establish the

coordinate quality assurance as well as accreditation of

ensuring an enlarged pool of talent to support the sector’s growth in the coming years.

the Council of Trust for the People (MARA) to fund higher education scholarships and training programmes for

signalling and rail.

We will continue to leverage on our competencies in

of our Scholarship Programme funds to train engineers and technicians to meet the talent needs of our railway

development of skilled workers in the rail sector. We are

burgeoning demand for accessible healthcare and quality water supply.

be introducing smart metering technology as part of our

the era of the Internet of Things (IoT).

The Group’s strong order book as at 31 January 2018 of RM5.6 billion will provide immense earnings visibility in

strategies whilst remaining open to expanding our product

or strategic alliances. We will solidify our strong customer

value for our stakeholders.



EVENT HIGHLIGHTS

Hari Raya Open House

14 July 2017

21 August 2017

11 September 2017

2 August 2017

6 September 2017

with INTI Nilai Students

15 July 2017


GKSC Bowling Tournament

16 September 2017

14 September 2017

Fire Drill

5 October 2017

12 October 2017

3 October 2017

5 October 2017

EVENT HIGHLIGHTScont’d



George Kent Deepavali Luncheon

6 November 2017

George Kent Annual Dinner 2017

4 November 2017

16 October 2017

6 December 2017

27 November 2017



on Q4FY2017 Financial Results

Credit Suisse

Lynas Capital

RHB Research

HSR talk with CIMB

Q3FY2018 Financial Results

Bank Islam Malaysia Berhad (BIMB)


Conference Call – CLSA Investment Bank

Hong Leong Investment Bank


Conference Call with Value Partners


PROFILE OF DIRECTORS

TAN SRI DATO’ TAN KAY HOCKChairman

Age Gender

70 Male Malaysian

solicitor to the Supreme Court of Malaysia. He is a non-

listed on the Main Market of Bursa Malaysia Securities

external directorship includes:-

Listed Issuers : Johan Holdings Berhad

Public Companies : -

PUAN SRI DATIN TAN SWEE BEE

Age Gender

71 Female Permanent Resident (Malaysia)

an advocate and solicitor to the Supreme Court of Malaysia.

which is listed on the Main Market of Bursa Malaysia




PROFILE OF DIRECTORScont’d

ONG SENG PHEOW

Age Gender

69 Male Malaysian

He has over 30 years of experience as Public Accountant

of Messrs Ernst & Young from 1984 to 2003.

Mr Ong Seng Pheow was appointed to the Board on 13 September 2004. He is the Chairman of the Audit

directorships include:-

Listed Issuers : 1. Daiman Development Berhad

Public Companies : 1. HELP International Corporation Berhad

DATO’ PADUKA (DR.) IR. HJ. KEIZRUL BIN ABDULLAH

Age Gender

66 Male Malaysian

Professional Engineer. He graduated from the University

(Honours) in Civil Engineering. He has been involved in the field of water and water resources engineering for

in December 2007. He oversaw the development of a Flood

Presently he is a member of the High-level Experts and

He is an alumni of the Senior Executive Programme at

Management Programme at the Harvard Business School (2002).

appointed to the Board on 8 December 2009. He is a

include:-


DATO’ AHMAD KHAIRUMMUZAMMIL BIN MOHD YUSOFF

Age Gender

76 Male Malaysian

Bachelor of Arts (Economics Honours) from the University of Malaya. He was a Deputy Chairman of the Urban

Berhad from May 1986 to December 1987. He was a Vice President and Director of HICOM Holdings Berhad from

2006. He was the Director/Chairman of Metrojaya Berhad from 1979 to 2015.

appointed to the Board on 30 June 2015. He is the Chairman of the Nominating Committee. His external directorship includes:-



PROFILE OF DIRECTORScont’d

OOI CHIN KHOON

Age Gender

56 Male Malaysian

of Accountants and has more than 26 years of experience

Finance & Control of the Company prior to his present

and does not hold any external directorships.

director and/or major shareholder of the Company.

the Company.

imposed on any of them by the relevant regulatory


PROFILE OF KEY SENIOR MANAGEMENT

OOI CHIN KHOON

Age Gender

56 Male Malaysian

in the Profile of Directors. He is assisted by key senior

HAN YEW KWONG

Age Gender

60 Male Malaysian

was the Senior General Manager – Commercial & General

water infrastructure projects.

Mr Han has over 34 years of experience in the areas

construction cost management. Among the projects he was involved in include The Weld Redevelopment in Jalan

and Carriage in Jalan Raja Laut.

He earned his Diploma in Technology (Building) from Tunku Abdul Rahman College in 1984 and a professional degree in

JONATHAN GODDARD

Age Gender

54 Male Irish

Mr Jonathan Goddard was appointed Deputy Project Director of the Ampang LRT Line Extension project in December 2012 and Project Director of the MRT2 project in September 2016. He has led a team of over 100 direct

Mr Goddard has over 31 years of experience in commercial

and project management skills were honed from his work in

delivery of projects.

Bank University.


PROFILE OF KEY SENIOR MANAGEMENTcont’d

YAP CHENG LEUNG

Age Gender

42 Male Malaysian

Mr Yap Cheng Leung was appointed General Manager

Assistant General Manager of Metering Sales since February

industrial products for both local and export markets.

Mr Yap has over 18 years of experience in the

non-metering products. He also worked as a Mechanical

treatment plant during his tenure with the Company.

He holds a Master of Science in Engineering Business Management from the University of Warwick and a Higher

CHAN KIM CHUAN

Age Gender

68 Male Malaysian

business for the Metering Division and leads the team

exports to.

Mr Chan has served the Company for over 38 years and

coverage for the Company’s meters and industrial products

ONG KUM WENG

Age Gender

55 Male Malaysian

Manager – Finance & Control in September 2011. He

Mr Ong has over 30 years of experience in external and

of Finance of another public listed company.

directorships in public companies and listed issuers.

family relationship with any director and/or major shareholder of the Company.

year.


SUSTAINABILITY REPORT

ABOUT THE REPORT

SCOPE OF THE REPORT

reference to the Global Reporting Initiative (GRI) Standards to meet Bursa Malaysia’s Main Market

31 January 2018.

AVAILABILITY AND COVERAGE

This report is available online via our website www.georgekent.net.

REPORTING PERIOD

This is our inaugural Sustainability Report and it covers the

unless otherwise stated1.

BOUNDARY

The disclosures covered in this report are within the

AUDIENCE

This report is published for our valued stakeholders that

FEEDBACK

George Kent (Malaysia) Berhad

Malaysia

Telephone : +603 8064 8000Email : [email protected] : www.georgekent.net

1


SUSTAINABILITY REPORTcont’d

KEY HIGHLIGHTS

1



EXECUTIVE DIRECTOR’S MESSAGE

our daily business processes. These include upholding product responsibility and having a clear commitment to resource

manner.

emphasis on how we handle our clients and deliver our products. Our processes are designed to uphold integrity and

environmental impact where and when possible.

OOI CHIN KHOON


STAKEHOLDER ENGAGEMENT


concerns.

The table below highlights the various stakeholders that we engage in our businesses.

STAKEHOLDERS MODE OF ENGAGEMENT

Shareholders and Investors Annually As needed As needed As needed

Media Media Events As needed As needed

Government Income Tax Filing Annually Monthly/Quarterly As needed

Customers Customer Feedback As needed As needed As needed

Employees Monthly Payroll Monthly Monthly Annually Periodically

Community Engagement Programmes As needed


MATERIALITY

The following materiality matrix presents a list of current sustainability issues that are relevant to our business. This has been derived from the materiality assessment conducted during our stakeholder engagement workshop. We ranked each

9 8

10

11

132

4

5

6 7

1 Supplier Environmental Assessment

2 Economic Performance Employment Supplier Social Assessment

3 Socioeconomic Compliance 11 Materials

Environmental Compliance Customer Privacy

CategoryGRI

Standard Topic Disclosures

Economic 201-1 Economic Performance Direct economic value generated and distributed1

Environment 307-1 Environmental Compliance

Social 403-2

404-2assistance programmes

413-1

1



ENVIRONMENT

ENVIRONMENTAL COMPLIANCE

Management Approach

Our robust environmental policy governs the management of environmental compliance initiatives as well as our

trainings and programmes such as HSEQ Month and HSEQ Conference to keep our employees updated on the latest

HSEQ trainings and programmes such as the e-waste

available for all our employees.

HSEQ Conference is a half-day event involving HSEQ


CHAIRMAN

MANAGEMENT REPRESENTATIVE

DEPUTY MANAGEMENTREPRESENTATIVE

TRAINING MANAGEMENTBUILDING MAINTENANCE


ENVIRONMENT cont’d

ZERO

non-compliance with environmental laws*

ZEROEnvironmental accidents*

intensity in 20171

intensity in 20172

1




SOCIAL

OCCUPATIONAL HEALTH AND SAFETY

Management Approach

awareness programmes such as HSEQ Month and HSEQ Conference.

Industry Development Board awarded your Company Five Stars in its Construction Safety and Health

LRT Ampang Line Extension project.

We evaluate our OHS performance through three processes: annual

Risk Assessment and Risk Control (HIRARC) guidelines established by the

legal requirements. We achieved 9.23 million accumulated man-hours

OHS PERFORMANCE IN METERING DIVISION

INJURY RATE (IR) LOST DAY RATE (LDR) ABSENTEE RATE (AR)

OCCUPATIONAL DISEASE RATE (ODR) WORK-RELATED FATALITIES


TRAINING AND EDUCATION

and future market requirements.

Management Approach

by the HODs. Trainings provided include seminars on ISO 9001 (Quality

and OHSAS 18001 (Health & Safety Management System) to improve our employees’ personal development and relevant technical skills.

employees are responsible for evaluating the effectiveness of

Six-step Succession Planning Process


SOCIAL cont’d

SAFETY

MISCELLANEOUSENVIRONMENTAL


SOCIAL cont’d


Internship Programme and for engineering students and graduates to gain real-life work experience in an engineering environment as well as to create a future talent pipeline for our business.

Training hours per

employee per year*

Month


SOCIAL cont’d


LOCAL COMMUNITIES

business.

Management Approach

programme called


Philanthropy

we operate.

and

SOCIAL cont’d

Annual Corporate Social Responsibility

Budget



CORPORATE GOVERNANCE OVERVIEW STATEMENT

Governance Report is available on the Company’s website at www.georgekent.net.

shareholders and other stakeholders.

budgets for the Group and ensuring that the strategies promote sustainability;

replacing Senior Management;

standards;


CORPORATE GOVERNANCE OVERVIEW STATEMENTcont’d

cont’d

cont’d

cont’d

within the Group. Management remains accountable to the Board for the authority being delegated.

corporate accountability. Their presence serves as a check-and-balance mechanism in the discharge of the Board’s

Company Secretaries

and when they take place.


cont’d

cont’d

Director are as follows:-

Director Held

4 4

4 4

Ong Seng Pheow 4 4

4 4

4 3

4 4

All Directors have access to the advice and services of the Company Secretaries and are updated on new statutory or

business and current issues.

Board Charter

.



cont’d

cont’d

Code of Conduct and Ethics

The Board has adopted a Code of Ethics for Company Directors. This Code of Ethics serves as a standard for the ethical behaviour of Directors based on trustworthiness and accepted values. The Code also upholds the spirit of responsibility

Both the Code of Ethics and the Code of Conduct and Ethics are available on the Company’s website at www.georgekent.net.

The Board has formalised a Whistleblower Policy that enables employees and stakeholders to report genuine concerns

The Board currently comprises six (6) members as follows:-

(iii) Ong Seng Pheow



cont’d

cont’d

cont’d

comprise Independent Directors.

Annual Assessment of Independence

Tenure of Independent Directors

the Board for more than twelve (12) years. Annual shareholders’ approval was obtained for Mr Ong Seng Pheow to

year of service on 7 December 2018.



cont’d

cont’d

Tenure of Independent Directors cont’d

Recruitment and Appointment of Directors

Chairman



cont’d

cont’d

cont’d

(i) Recommend to the Board the appointment of new Directors;

(iv) Recommend to the Board if an Independent Director who has served on the Board for more than nine (9) years is

Annual Assessment of Directors

on the criteria set out in the Corporate Governance Guide.

and reported to the Board.

Directors’ Training

enhance their skills and knowledge and to keep abreast of regulatory and corporate governance developments. During



cont’d

cont’d

Directors’ Training cont’d

follows:

Name of Director Programmes

1.

2.

3. Ong Seng Pheow

- NIOSH Safety Passport Training - Malaysian Code on Corporate Governance 2017- Bankruptcy (Amendment) Act 2017

4. Bin Abdullah

- Advocacy Session on Corporate Disclosure for Directors and

5.

6. - UOBM Global Markets Corporate Seminar- Launch of Mid & Samll Cap Research Scheme

- UOB Infrstructure and PPP Outlook 2017- Advocacy Session on Corporate Disclosure for Directors and

- SPAD LPT Symposium 2017 Conference- MIA International Accountants Conference 2017-Expanding

III.



cont’d

cont’d

cont’d

from the Companyreceived from

subsidiaries

FeesOther

Emoluments In-KindCompany

Total

Other

Emoluments Group

Total

- 25 -

250 13 16 279

150 6 - 156

Ong Seng Pheow 90 26 - 116 - 116

Bin Abdullah 90 118 17 225 - 225

90 - - 90 - 90

Total - Financial year ended 31 January 2018 670 58

Total - Financial year ended 31 January 2017 670 65



cont’d

cont’d

cont’d

Company Group

Director Directors Director Directors

- 1 - 1

- 1 - 1

- 1 - -

- 1 - 1

- 1 - -

1 - 1 -

- - - 1

- - - 1

1 5 1 5

and issuance to shareholders.

Chairman of the Board.



cont’d

cont’d

External Auditors

The Board acknowledges its overall responsibility for ensuring that a sound system of risk management and internal

whilst providing some assurance that the assets of the Company and of the Group are safeguarded against material

(i) Ong Seng Pheow – Chairman



cont’d

cont’d

the Statement on Risk Management and Internal Control on pages 53 to 55 of this Annual Report.

The Board acknowledges the need for shareholders and other stakeholders to be informed of all material business

of the public upon request.

by investors.

and vote on their behalf.



DIRECTORS’ RESPONSIBILITY IN FINANCIAL REPORTING


AUDIT COMMITTEE REPORT

A. MEMBERS

majority of Independent Directors:-

Mr Ong Seng Pheow

B. MEETINGS

member were as follows:-

Held

Mr Ong Seng Pheow 4 4

4 4

4 4


C. ACTIVITIES

ii) Reviewed the results and reported issues arising from the annual statutory audit with the External Auditors and

legal requirements;

v) Met with the External Auditors twice without the presence of Management during the year under review;

vi) Reviewed and approved the internal audit plan to ensure adequate scope and comprehensive coverage of the

weaknesses are being properly addressed;

audit team; and

AUDIT COMMITTEE REPORTcont’d


D. INTERNAL AUDIT FUNCTION

accountability for the Group’s internal control. The Internal Audit Department was established in the year 2006 to

overseas.

AUDIT COMMITTEE REPORTcont’d


The Malaysian Code on Corporate Governance 2017 requires listed companies to maintain a sound system of risk management and internal control to safeguard shareholders’ interest and the Company’s assets. This Statement is prepared

BOARD RESPONSIBILITY

RISK MANAGEMENT FRAMEWORK

making process with accountability at all relevant levels.

RISK POLICY

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL


RISK POLICY cont’d

INTERNAL CONTROL

Other key elements of the Group’s internal control system are described below:-

Documented Internal Policies and Procedures

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROLcont’d


INTERNAL CONTROL cont’d

Capital Expenditure Approval Process

Key Performance Indicators

REVIEW OF EFFECTIVENESS

under review. There were no adverse compliance events or material control failures that could cause material losses to the

internal control system.

CONCLUSION

the system of risk management and internal control.

Board of Directors dated 21 May 2018.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROLcont’d


ADDITIONAL INFORMATION

UTILISATION OF PROCEEDS RAISED FROM ANY CORPORATE PROPOSAL

Group Company

Audit fees 235 115

Non-audit fees 47 34

MATERIAL CONTRACTS AND CONTRACTS

involving Directors’ and major shareholders’ interests.

57GEORGE KENT (MALAYSIA) BERHAD (1945-X) 57GEORGE KENT (MALAYSIA) BERHAD (1945-X)

58 Report of the Directors

63 Independent Auditors’ Report

Comprehensive Income

70 Statements of Changes in Equity

72 Statements of Cash Flows

75 Notes to the Financial Statements

153 Statement by Directors

Responsible for the Financial Management of the Company

FINANCIAL STATEMENTS


The directors of GEORGE KENT (MALAYSIA) BERHAD

PRINCIPAL ACTIVITIES

RESULTS OF OPERATIONS

The Group The Company

RM’000 RM’000

DIVIDENDS

RM’000

REPORT OF THE DIRECTORS


DIVIDENDS cont’d

RESERVES AND PROVISIONS

ISSUE OF SHARES AND DEBENTURES

OTHER STATUTORY INFORMATION

REPORT OF THE DIRECTORScont’d


OTHER STATUTORY INFORMATION cont’d

DIRECTORS



DIRECTORS’ INTERESTS

201731 January

2018

DIRECTORS’ BENEFITS



INDEMNITY AND INSURANCE FOR DIRECTORS AND OFFICERS

AUDITORS

AUDITORS’ REMUNERATION

TAN SRI DATO’ TAN KAY HOCK OOI CHIN KHOON



Opinion

GEORGE KENT (MALAYSIA) BERHAD

Basis for Opinion

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF GEORGE KENT (MALAYSIA) BERHAD

(INCORPORATED IN MALAYSIA)


cont’d

cont’d

Our audit response


(INCORPORATED IN MALAYSIA)cont’d


cont’d

DELOITTE PLT (LLP0010145-LCA) LAI CAN YEW




The Group The Company2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000

RevenueCost of sales

Interest income

Finance costsShare of results of associate

STATEMENTS OF PROFIT OR LOSS ANDOTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 JANUARY 2018



RM’000 RM’000 RM’000 RM’000

ASSETS

Investment in subsidiaries

Investment in associate

Inventories

Trade and other receivables

STATEMENTS OF FINANCIAL POSITIONAS OF 31 JANUARY 2018



RM’000 RM’000 RM’000 RM’000

EQUITY AND LIABILITIES

Share capital

Reserves

Trade and other payables


STATEMENTS OF FINANCIAL POSITIONAS OF 31 JANUARY 2018

cont’d


The GroupShare

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Other comprehensive income for the year

Total comprehensive income for the year



STATEMENTS OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 JANUARY 2018


The CompanyShare

RM’000 RM’000 RM’000 RM’000 RM’000





STATEMENTS OF CHANGES IN EQUITYAS OF 31 JANUARY 2018

cont’d



RM’000 RM’000 RM’000 RM’000

Finance costs

Interest income

Share of results of associate

Inventories

Receivables

Payables

Interest paid

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 JANUARY 2018



RM’000 RM’000 RM’000 RM’000

ACTIVITIES

Investment in subsidiary

Interest income received

investment

ACTIVITIES

Repayment of term loans

NET INCREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS AT END OF YEAR

STATEMENTS OF CASH FLOWSAS OF 31 JANUARY 2018

cont’d



RM’000 RM’000 RM’000 RM’000

The Group

1.2.2017 31.1.2018

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

The Company

1.2.2017 31.1.2018

RM’000 RM’000 RM’000 RM’000

STATEMENTS OF CASH FLOWSAS OF 31 JANUARY 2018

cont’d


1. GENERAL INFORMATION

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JANUARY 2018


cont’d


2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS cont’d

Financial Instruments

Transfers of Investment Property

Insurance Contracts


cont’d



cont’d


cont’d



cont’d

cont’d

3. SIGNIFICANT ACCOUNTING POLICIES


cont’d


3. SIGNIFICANT ACCOUNTING POLICIES cont’d

cont’d

The consolidated financial statements incorporate the financial statements of the Company and entities


cont’d



cont’d

Subsidiaries


cont’d



cont’d


cont’d



as


cont’d



cont’d


cont’d



cont’d

are applied to determine


cont’d



cont’d


cont’d



Sale of Goods

Interest Income


cont’d



cont’d


cont’d



cont’d

3.14


cont’d




cont’d



cont’d


cont’d




cont’d



cont’d

3.22


cont’d



cont’d

3.25


cont’d



cont’d


cont’d



cont’d

cont’d


cont’d



cont’d


cont’d



cont’d

cont’d


cont’d



cont’d


cont’d



cont’d

cont’d


cont’d


4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY


cont’d


4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY cont’d

cont’d


cont’d


5. REVENUE


RM’000 RM’000 RM’000 RM’000

Contract revenue


RM’000 RM’000 RM’000 RM’000

Contract costs

Cost of inventories sold

Cost of services rendered


RM’000 RM’000 RM’000 RM’000

Interest income from


cont’d


cont’d


RM’000 RM’000 RM’000 RM’000

8. FINANCE COSTS


RM’000 RM’000 RM’000 RM’000


cont’d



RM’000 RM’000 RM’000 RM’000

Unrealised

Realised

Rental of premises

Research costs

Current year

Underprovision in prior years

Unrealised

Realised

Subsidiaries


cont’d



RM’000 RM’000 RM’000 RM’000

11. DIRECTORS’ REMUNERATION


RM’000 RM’000 RM’000 RM’000

Salaries and other emoluments

FeesOther emoluments

Total


cont’d



RM’000 RM’000 RM’000 RM’000

Overprovision in prior years

Current year

(Over)/Underprovision in prior years

Current year


RM’000 RM’000 RM’000 RM’000


cont’d


cont’d


RM’000 RM’000 RM’000 RM’000

Share of results of associate


cont’d


cont’d

%

13. EARNINGS PER SHARE

The Group

2018 2017

’000 ’000


cont’d


14. DIVIDENDS

2018 2017 2018 2017RM’000 RM’000 RM’000 RM’000

ordinary shares

ordinary shares

ordinary shares


cont’d


The Group

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Transfer from other


cont’d


cont’d

The Group

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000


cont’d


cont’d

The CompanyRM’000 RM’000 RM’000 RM’000 RM’000


cont’d


cont’d

The Group 31.1.2018

RM’000 RM’000 RM’000 RM’000

The Group 31.1.2017

RM’000 RM’000 RM’000 RM’000


cont’d


cont’d

cont’d

The Company 31.1.2018

RM’000 RM’000 RM’000 RM’000

The Company 31.1.2017

RM’000 RM’000 RM’000 RM’000


RM’000 RM’000 RM’000 RM’000


cont’d


cont’d

cont’d

Type

Sale price of comparable land


RM’000 RM’000 RM’000 RM’000

Freehold land


cont’d


cont’d


RM’000 RM’000 RM’000 RM’000

Total

The Group2018 2017

RM’000 RM’000


cont’d


17. OTHER INTANGIBLE ASSETS

RM’000 RM’000 RM’000 RM’000


cont’d


17. OTHER INTANGIBLE ASSETS cont’d

cont’d

2018 2017

RM’000 RM’000

18. INVESTMENT IN SUBSIDIARIES

The Company

2018 2017

RM’000 RM’000


cont’d


18. INVESTMENT IN SUBSIDIARIES cont’d

2018 2017

% %

Islands

Guinea treatment plant


cont’d


The Group

2018 2017

RM’000 RM’000

The Group

2018 2017

RM’000 RM’000

Total assets

Revenue

2018 2017% %

GuineaWater concession


cont’d


20. INVESTMENT IN JOINT VENTURE

The Group

2018 2017

RM’000 RM’000

The Group

2018 2017

RM’000 RM’000

Total assets

Revenue

2018 2017

% %


cont’d



RM’000 RM’000 RM’000 RM’000




RM’000 RM’000 RM’000 RM’000

Inventories

Trade and other receivables Trade and other payables


cont’d


cont’d


RM’000 RM’000 RM’000 RM’000


The Group2018 2017

RM’000 RM’000


cont’d


22. INVENTORIES


RM’000 RM’000 RM’000 RM’000

23. TRADE AND OTHER RECEIVABLES


RM’000 RM’000 RM’000 RM’000

Trade

Subsidiaries


cont’d


23. TRADE AND OTHER RECEIVABLES cont’d


RM’000 RM’000 RM’000 RM’000

Subsidiaries

Other receivables

Club membership

Refundable deposits

Gross amount due from customers from contract

Total trade and other receivables


cont’d




RM’000 RM’000 RM’000 RM’000

Impaired

Receivables that are neither past due nor impaired

Receivables that are past due but not impaired

Receivables that are impaired


RM’000 RM’000 RM’000 RM’000


cont’d



Receivables that are impaired cont’d

The Group2018 2017

RM’000 RM’000

2018 2017

RM’000 RM’000

2018 2017

RM’000 RM’000


cont’d


25. INVESTMENT SECURITIES

The Group

2018 2017

RM’000 RM’000 RM’000 RM’000

The Group

2018 2017

RM’000 RM’000 RM’000 RM’000

The Company

2018 2017

RM’000 RM’000 RM’000 RM’000


cont’d



RM’000 RM’000 RM’000 RM’000

2018 2017

(%) (%)

28. SHARE CAPITAL

2018 2017 2018 2017

’000 ’000 RM’000 RM’000

Share split


cont’d



RM’000 RM’000 RM’000 RM’000


RM’000 RM’000 RM’000 RM’000


RM’000 RM’000 RM’000 RM’000

30. RETAINED EARNINGS


cont’d


31. LOANS AND BORROWINGS


RM’000 RM’000 RM’000 RM’000

(e)

(f)

(f)


RM’000 RM’000 RM’000 RM’000


cont’d


31. LOANS AND BORROWINGS cont’d

32. HIRE-PURCHASE PAYABLES


RM’000 RM’000 RM’000 RM’000


cont’d


32. HIRE-PURCHASE PAYABLES cont’d


2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000

33. TRADE AND OTHER PAYABLES


RM’000 RM’000 RM’000 RM’000

Trade

Subsidiary


cont’d


33. TRADE AND OTHER PAYABLES cont’d


RM’000 RM’000 RM’000 RM’000

Subsidiaries

Other payables


cont’d


33. TRADE AND OTHER PAYABLES cont’d

2018 2017

RM’000 RM’000

2018 2017

RM’000 RM’000

34. RELATED PARTY TRANSACTIONS


RM’000 RM’000 RM’000 RM’000

Sales

Purchases


cont’d


34. RELATED PARTY TRANSACTIONS cont’d


RM’000 RM’000 RM’000 RM’000

directors have

Rental income for motor vehicle

2018 2017

RM’000 RM’000

Salaries and other emoluments


cont’d


35. JOINT OPERATION

2018 2017

RM’000 RM’000

37. CAPITAL COMMITMENTS

2018 2017

RM’000 RM’000


cont’d


38. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT


RM’000 RM’000 RM’000 RM’000



RM’000 RM’000 RM’000 RM’000

Capital and net debt


cont’d


38. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT cont’d


RM’000 RM’000 RM’000 RM’000




cont’d



The Group

2018 2017

RM’000 % RM’000 %

Spain

Others


cont’d



The Group per annum 1 year1 - 2

% RM’000 RM’000 RM’000 RM’000

31 January 2018

Trade payablesOther payables and

31 January 2017

Trade payablesOther payables and


cont’d



cont’d

cont’d

The Company per annum 1 year1 - 2

% RM’000 RM’000 RM’000 RM’000

31 January 2018

Trade payables

Other payables and

31 January 2017

Trade payables

Other payables and


cont’d




cont’d



cont’d

(i)


RM’000 RM’000 RM’000 RM’000

(ii)


cont’d



Fair values


2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000


cont’d



cont’d

Fair values cont’d

RM’000 RM’000

The Group

2018

2017


cont’d



cont’d

cont’d

RM’000 RM’000

The Company

2018

2017


cont’d


(iii) Others

Infrastructure

2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue

Interest income

4 C


cont’d


cont’d

2018 2017RM’000 RM’000

2018 2017RM’000 RM’000

2018 2017RM’000 RM’000

Investment in associate

Unallocated


cont’d


cont’d

2018 2017

RM’000 RM’000

Unallocated

Revenue

2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000

Overseas

2018 2017

RM’000 RM’000


The directors of GEORGE KENT (MALAYSIA) BERHAD

TAN SRI DATO’ TAN KAY HOCK OOI CHIN KHOON

STATEMENT BY DIRECTORS

DECLARATION BY THE DIRECTORPRIMARILY RESPONSIBLE FOR THE FINANCIAL MANAGEMENT OF THE COMPANY

OOI CHIN KHOON GEORGE KENT (MALAYSIA) BERHAD

OOI CHIN KHOON

Subscribed and solemnly declared by the abovenamed OOI CHIN KHOON at


ANALYSIS OF SHAREHOLDINGSAS AT 30 APRIL 2018

DISTRIBUTION OF SHAREHOLDINGS

% %

Total

LIST OF THIRTY LARGEST REGISTERED SHAREHOLDERS

No. %


LIST OF THIRTY LARGEST REGISTERED SHAREHOLDERS cont’d

No. %


cont’d



cont’d

% %

DIRECTORS’ INTEREST IN SHARES AS AT 30 APRIL 2018

% %


PROPERTY DETAILS Area

(m2) Tenure (RM’000)

stores and Freehold

storey

unit

leasehold

LIST OF PROPERTIES HELDAS AT 31 JANUARY 2018


ORDINARY BUSINESS

SPECIAL BUSINESS

NOTICE OF ANNUAL GENERAL MEETING


NOTICE OF ANNUAL GENERAL MEETINGcont’d

Teh Yong Fah (MACS 00400)(MAICSA 7057081)

Company Secretaries

th


NOTICE OF ANNUAL GENERAL MEETINGcont’d


ADMINISTRATIVE DETAILSFOR THE SIXTY-SEVENTH ANNUAL GENERAL MEETING

REGISTRATION

ENTITLEMENT TO ATTEND AND VOTE


ADMINISTRATIVE DETAILSFOR THE SIXTY-SEVENTH ANNUAL GENERAL MEETING

cont’d

th

th

CORPORATE MEMBER

th

I/We )

of


Name

and/or (delete as appropriate)

Name

RESOLUTIONS For

day of

FORM OF PROXY


st


th

ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JANUARY 2018

CONNECTING ENGINEERING &METERING TO GLOBAL GROWTH


1115 Jalan Puchong, Taman Meranti Jaya47120 Puchong, Selangor Darul EhsanTel : 603-8064 8000Fax : 603-8061 9954, 8061 3295 Email : [email protected]

w w w . g e o r g e k e n t . n e t

GEO

RG

E K

EN

T (MA

LAYSIA

) BER

HA

D (1

94

5-X

)

AN

NU

AL R

EP

OR

T FOR

THE FIN

AN

CIA

L YEA

R E

ND

ED

31

JAN

UA

RY 2

01

8

george kent (malaysia) berhad (1945-x) annual report … annual report for the financial year ended...

Documents