Post on 29-Dec-2019
1
GUH Holdings BerhadAnnual Report 2016
2
GUH Holdings BerhadAnnual Report 2016
MISSIONFOR ITS SHAREHOLDERS• Practisegoodcorporategovernancetoenhancetransparency• Identifycorrectventuresandbusinessdevelopmenttomaximizeshareholders’value• Providegooddividendpayment
FOR ITS EMPLOYEES• Provideaconduciveworkingenvironment• Providepropertraining,developmentandopportunitiesforcareeradvancement• Recognizeandrewardexcellentemployees
FOR ITS CUSTOMERS• Respondtothechangingdemandsofthecustomers• Improveproductsqualityandtechnical innovationstofulfillcustomers’needsandsatisfactions inthemarket
place
FOR ITS COMMUNITY• Participateinenvironmentalprotection• Upholditscorporateresponsibilitiesforthebenefitsofthecommunity
VISIONTobeprofitableandwell-establishedconglomeratethatmaximizestheinterestforits
1
GUH Holdings BerhadAnnual Report 2016
CORPORATE PROFILE
GUHHoldingsBerhadisaMalaysian-basedcorporation
withbusinessesin
electronic,propertydevelopmentandutilities
Asaproudandhome-growncompany
withitsdiversifiedportfolio,
GUHiscommittedtobuilding
asustainablefutureandbringingpositivebenefits
toallitsstakeholders
www.guh.com.my
1
2
GUH Holdings BerhadAnnual Report 2016
TanSriDato’SeriH’ngBokSanExecutive Chairman
Dato’KennethH’ngBakTeeChief Executive Officer/Managing Director
Dato’HarryH’ngBakSeahNon-Executive Director
DatinJessicaH’ngHsiehLingNon-Executive Director
Mr.ChewHockLinIndependent Non-Executive Director
Dato’IsmailBinHamzahIndependent Non-Executive Director
Mr.LaiChangHunIndependent Non-Executive Director
En.WanIsmailBinWanNikIndependent Non-Executive Director
Dato’GanKongMengIndependent Non-Executive Director
Board of Directors
Company Secretaries
Dato’KennethH’ngBakTee(LS0008988)KeeGimTee(MAICSA7014866)
Share Registrar
MegaCorporateServicesSdnBhd(187984-H)Level15-2BangunanFaberImperialCourtJalanSultanIsmail50250KualaLumpurTel :0326924271Fax :0327325388Website :www.megacorp.com.my
Registered Office
PartofPlot1240&1241BayanLepasFreeIndustrialZonePhase3,BayanLepas11900PenangTel :046166333Fax :046166366Website :www.guh.com.my
Independent Auditors
CroweHorwath(AF1018)CharteredAccountantsLevel6,WismaPenangGarden42JalanSultanAhmadShah10050PenangTel :042277061Fax :042278011Website :www.crowehorwath.com.myPrincipal Bankers
PublicBankBerhadCitibankBerhadUnitedOverseasBank(Malaysia)BhdMalayanBankingBerhadCIMBBankBerhad
Stock Exchange Listing
ListedontheMainMarketofBursaMalaysiaSecuritiesBerhadunderIndustrialProductsSector
StockCode :3247StockName :GUH
CORPORATEINFORMATION
GUH Holdings BerhadAnnual Report 2016
2
3
GUH Holdings BerhadAnnual Report 2016
1 CorporateProfile
2 CorporateInformation
4 ProfileofDirectors
10 ProfileofManagementTeam
13 ExecutiveChairman’sStatement
15 Management’sDiscussionandAnalysis
23 CorporateStructure
24 FinancialHighlights
26 SustainabilityReport
30 CorporateGovernanceStatement
43 AdditionalDisclosure
44 StatementonRiskManagementand InternalControl
47 AuditCommitteeReport
51 FinancialStatements
129 AnalysisofShareholdings
132 ListofProperties
133 NoticeofAnnualGeneralMeeting
139 StatementAccompanyingNoticeof AnnualGeneralMeeting
• ProxyForm
CONTENTS
3
4
GUH Holdings BerhadAnnual Report 2016
TanSriDato’SeriH’ngBokSanisthefounderofGUHCircuitIndustry(PG)Sdn.Bhd.,theExecutiveChairmanofGUHHoldingsBerhad(“GUH”)GroupandthesubstantialshareholderofGUH.HewasappointedtotheBoardofGUHon6January1994.TanSriDato’SeriH’ngalsositsontheBoardofSarawakCableBerhad,apubliclistedcompany.Heholdsdirectorshipsinseveralotherprivatelimitedcompanies.
Anexperiencedandwell-knownentrepreneurwhocompletedhighschoolexaminationintheearlyyearswithaCertificateinBusinessAdministrationandAccountingobtainedinSingapore,TanSriDato’SeriH’ngbeganhiscareer invarious fields frommarketingmanagement,businessadministrationtothesettingupofbusinessesandmanufacturing.TanSriDato’SeriH’ngfoundedLeaderCableIndustryBerhadbackin1976andheimplementedarestructuringandmergerexercisebetweenLeaderCableIndustryBerhadandUniversalCable(M)BerhadandestablishedLeaderUniversalHoldingsBerhadastheholdingcompany,whichwasformerlylistedonBursaMalaysiaSecuritiesBerhad.Throughouthiscareer,TanSriDato’SeriH’nghasbeenverymuchinvolvedinthebusinessentrepreneurshipandhehasgainedextensiveoperationalexperienceinthemanufacturingaswellasthecorporaterestructuringandmergerexerciseandmanyotherfieldsandindustrysectors.Hehasaccumulatedin-depthknowledgeandrecognitionovertheyears.
TanSriDato’SeriH’ng’sdaughter,DatinJessicaH’ngHsiehLingandtwobrothers,Dato’HarryH’ngBakSeahandDato’KennethH’ngBakTeearealsotheDirectorsofGUH.TanSriDato’SeriH’ngisdeemedtohaveaninterestpertainingtotheproposedrenewalofshareholders’mandateforrecurrentrelatedpartytransactionsofarevenueortradingnaturewhichwillbe tabledat the forthcoming53rdAnnualGeneralMeeting.Heisalsodeemedtobeinterestedincertainrecurrentrelatedpartytransactionsortradingnaturewhicharenecessaryfordaytodayoperationsof theCompanyanditssubsidiariesasdisclosedonpage120oftheAnnualReport.
Saveasaforesaiddisclosed,therearenootherbusinessarrangementswiththeCompanyinwhichhehaspersonalinterests.TanSriDato’SeriH’nghasnotbeenconvictedofanyoffenceswithinthepast5yearsotherthantrafficoffencesandhehasnotbeenimposedwithpublicsanctionorpenaltybytherelevantregulatorybodiesduringthefinancialyear.
TanSriDato’SeriH’ngattended3outof5Boardmeetingswhichwereheldinthefinancialyearended31December2016.
Tan Sri Dato’ Seri H’ng Bok San, JP
PSM, DPPN, DGPN, DSPN, PKT, PJK
ExecutiveChairman77yearsold,Male,Malaysian
PROFILEOFDIRECTORS
5
GUH Holdings BerhadAnnual Report 2016
Dato’KennethH’ngBakTeehasbeenappointedtotheBoardastheChiefExecutiveOfficer/ManagingDirectorofGUHsince1September2004.HeisamemberoftheRemunerationCommitteeappointedbytheBoard.CurrentlyhealsoservesasaDirectorofallsubsidiariesoftheGroupandseveralotherprivatelimitedcompanies.HeisaBoardmemberofBinaryUniversityCollegeofManagementandEntrepreneurship.
Priortothat,hewaswithInternationalBusinessMachines(IBM)inKualaLumpurandIBMinAsiaSouthPacificArea(ASPA)HQinHongKong.HewasalsowithLeaderUniversalHoldingsBerhad(“Leader”) for16years.
Dato’KennethgraduatedwithaBachelorofMathematics(DoubleHonours)inComputersScienceandCombinatoric&OptimizationandalsoholdsaMasterofAppliedScience(ManagementScience) inUniversityofWaterloo,Canada.HeiscurrentlyaFellowMemberoftheInstituteofApprovedCompanySecretaries,anAffiliateMemberoftheMalaysianInstituteofCharteredSecretariesandAdministratorsandaMemberoftheRegisteredFinancialPlanner.
Dato’KennethisthebrotheroftheGroup’sExecutiveChairman,TanSriDato’SeriH’ngBokSanandtheNon-ExecutiveDirector,Dato’HarryH’ngBakSeah.Hisniece,DatinJessicaH’ngHsiehLingisalsoaNon-ExecutiveDirectorofGUH.Dato’Kennethisdeemedtohaveaninterestpertainingtotheproposedrenewalofshareholders’mandateforrecurrentrelatedpartytransactionsofarevenueortradingnaturewhichwillbetabledattheforthcoming53rdAnnualGeneralMeeting.HeisalsodeemedtobeinterestedincertainrecurrentrelatedpartytransactionsortradingnaturewhicharenecessaryfordaytodayoperationsoftheCompanyanditssubsidiariesasdisclosedonpage120oftheAnnualReport.
Saveasaforesaiddisclosed,therearenootherbusinessarrangementswiththeCompanyinwhichhehaspersonalinterests.Dato’Kennethhasnotbeenconvictedofanyoffenceswithinthepast5yearsotherthantrafficoffencesandhehasnotbeenimposedwithpublicsanctionorpenaltybytherelevantregulatorybodiesduringthefinancialyear.
Dato’Kennethattendedallofthe5Boardmeetingswhichwereheldinthefinancialyearended31December2016.
Dato’ Kenneth H’ng Bak TeeDPNS, DSPN, PKT, PJM
ChiefExecutiveOfficer/ManagingDirector
57yearsold,Male,Malaysian
PROFILEOFDIRECTORS
6
GUH Holdings BerhadAnnual Report 2016
Datin Jessica H’ng Hsieh LingNon-ExecutiveDirector
51yearsold,Female,Malaysian
DatinJessicaH’ngHsiehLingwasappointedtotheBoardasaNon-ExecutiveDirectoron20February2001.SheisamemberoftheAuditCommitteeandRiskManagementCommitteeappointedbytheBoard.Sheholdsdirectorshipsinseveralotherprivatelimitedcompanies.
DatinJessicagraduatedfromSouthernIllinoisUniversityatCarbondale,USAwithaBachelorofScienceDegree,majoring inAccountingandshealsoobtainedaMasterofScienceDegree,majoring inTaxationfromDrexelUniversity,Philadelphia,USA.Uponcompletinghertertiaryeducation,DatinJessicastartedhercareerbyholdingvariousmajorkeypositionsinmultinationalcompaniesandgainedextensiveknowledgeandexperienceincorporatefinanceandbusinessmanagementpriortojoiningLeaderUniversalHoldingsBerhad.DatinJessicaisthedaughteroftheGroup’sExecutiveChairman,TanSriDato’SeriH’ngBokSan.Heruncles,Dato’HarryistheNon-ExecutiveDirectorandDato’Kenneth is theChiefExecutiveOfficer/ManagingDirectorofGUH.DatinJessicaisdeemedtohaveaninterestpertainingtotheproposedrenewalofshareholders’mandateforrecurrentrelatedpartytransactionsofarevenueortradingnaturewhichwillbetabledattheforthcoming53rdAnnualGeneralMeeting.SheisalsodeemedtobeinterestedincertainrecurrentrelatedpartytransactionsortradingnaturewhicharenecessaryfordaytodayoperationsoftheCompanyanditssubsidiariesasdisclosedonpage120oftheAnnualReport.
Dato’HarryH’ngBakSeahwasappointedtotheBoardasaNon-ExecutiveDirectorofGUHon13January1994.Healsoholdsdirectorshipsinseveralotherlocalandoverseasprivatelimitedcompanies.
Uponcompletinghishighschooleducation,hebeganhiscareerwhichis involved in thefieldofpewterandmagnetwiremanufacturingandoperations.Subsequently,heventuredintothetelecommunicationsandpowercablebusiness.HehasheldvariouspositionsfromtheGroupManagingDirectorofLeaderUniversalHoldingsBerhadsince1993untiltheappointmentastheExecutiveViceChairmanfrom1997to2005.Throughouthiscareer,Dato’Harrygainedextensiveexperienceandenhancedtheknowledgeinthemanufacturingoperationsanddiversifiedbusinessenvironmentovertheyears.
Dato’HarryisthebrotheroftheGroup’sExecutiveChairman,TanSriDato’SeriH’ngBokSanandtheChiefExecutiveOfficer/ManagingDirector,Dato’KennethH’ngBakTee.Hisniece,DatinJessicaH’ngHsiehLingisalsoaNon-ExecutiveDirectorofGUH.Dato’Harryisdeemedtohaveaninterestpertainingtotheproposedrenewalofshareholders’mandateforrecurrentrelatedpartytransactionsofarevenueortradingnaturewhichwillbetabledattheforthcoming53rdAnnualGeneralMeeting.HeisalsodeemedtobeinterestedincertainrecurrentrelatedpartytransactionsortradingnaturewhicharenecessaryfordaytodayoperationsoftheCompanyanditssubsidiariesasdisclosedonpage120oftheAnnualReport.
Dato’ Harry H’ng Bak SeahDSPN, PJK
Non-ExecutiveDirector67yearsold,Male,Malaysian
Saveasaforesaiddisclosed,therearenootherbusinessarrangementswiththeCompanyinwhichshehaspersonalinterests.DatinJessicahasnotbeenconvictedofanyoffenceswithinthepast5yearsotherthantrafficoffencesandhehasnotbeenimposedwithpublicsanctionorpenaltybytherelevantregulatorybodiesduringthefinancialyear.
DatinJessicaattendedallof the5Boardmeetingswhichwereheld in thefinancialyearended31December2016.
Saveasaforesaiddisclosed,therearenootherbusinessarrangementswiththeCompanyinwhichhehaspersonalinterests.Dato’Harryhasnotbeenconvictedofanyoffenceswithinthepast5yearsotherthantrafficoffencesandhehasnotbeenimposedwithpublicsanctionorpenaltybytherelevantregulatorybodiesduringthefinancialyear.
Dato’Harryattendedallofthe5Boardmeetingswhichwereheldinthefinancialyearended31December2016.
PROFILEOFDIRECTORS
7
GUH Holdings BerhadAnnual Report 2016
Dato’ Ismail Bin HamzahAMN, KMN, DIMP
IndependentNon-ExecutiveDirector
70yearsold,Male,Malaysian
Dato’IsmailBinHamzahwasappointedtotheBoardasanIndependentNon-ExecutiveDirectoron19December2001.HeservesasChairmanoftheNominationCommitteeandtheRemunerationCommitteeoftheBoard.HeisalsoamemberoftheAuditCommitteeandRiskManagementCommittee.Dato’IsmailsitsontheBoardsofafewpubliclistedcompanies,namelyEngtexGroupBerhad,SCCHoldingsBerhad,GohBanHuatBerhadandJKGLandBerhad.ApartfromservingasaDirectorofpubliclistedcompanies,Dato’IsmailalsoservesasaDirectorofseveralotherprivatelimitedcompanies.
Dato’ Ismailgraduated fromtheUniversityofMalaya in1970withaBachelorofEconomics(Hons)inAnalyticalEconomics.Uponcompletedhistertiaryeducation,hestartedhiscareerbyholdingmanykeypositionsinthegovernmentalagenciesandorganizations.Hegainedextensiveknowledgeandexperiencefromeconomicstofinanceacquired,throughouthiscareerandtenureofserviceinthegovernmentalauthoritiesformorethan30years.SittingontheBoardofa fewpublic listedcompanies,Dato’IsmailisveryexperiencedandcapabletoprovideindependentandobjectivejudgmenttotheBoardandheisabletoattendalltheBoardmeetingswithsufficienttimedevotedtoreadingandformulatingsolutionstoissuespresentedattheBoardmeeting.
Mr. Chew Hock LinIndependent
Non-ExecutiveDirector73yearsold,Male,Malaysian
Mr.ChewHockLinwasappointedtotheBoardasanIndependentNon-ExecutiveDirectorofGUHon20February2001.HeservesasChairmanofAuditCommitteeandRiskManagementCommitteeandisamemberoftheNominationCommitteeandtheRemunerationCommitteeoftheBoard.HeisalsotheSeniorIndependentDirectorofGUHtowhomallconcernsmaybeconveyed.Mr.ChewalsositsontheBoardofMasterPackGroupBerhad,apubliclistedcompany.
Mr.ChewgraduatedwithaBachelorofCommerceDegreefromtheUniversityofWesternAustralia.HeisamemberofCharteredAccountantsAustraliaandNewZealand.HeisamemberoftheMalaysianInstituteofCertifiedPublicAccountantsandamemberoftheMalaysianInstituteofAccountants.HeisalsoaFellowofCharteredTaxInstituteofMalaysia.Mr.Chewisaformerpartnerofaninternationalauditfirm.Hehasmorethan40yearsofworkingexperienceinvariousareascoveringauditing,accounting,financeandtax.Hegainedextensiveexperienceandknowledgeduringhistenureasapartnerandlongyearsofserviceintheaccountancyprofession.BasedonhisexperiencesittingontheBoardofafewpubliclistedcompanies,Mr.Chewisabletoplayhisrole informulatingandreviewingtheCompany’sstrategiesandtostrikeabalanceandmaketheBoardmoreeffectiveandbeaccountabletoshareholders.
Saveasaforesaiddisclosed,Mr.ChewdoesnothaveanyfamilyrelationshipwithandisnotrelatedwithanyDirectorand/ormajorshareholderofGUHnorhasanypersonalinterestinanybusinessarrangementinvolvingtheCompany.Mr.Chewhasnotbeenconvictedofanyoffenceswithinthepast5yearsotherthantrafficoffencesandhehasnotbeenimposedwithpublicsanctionorpenaltybytherelevantregulatorybodiesduringthefinancialyear.
Mr.Chewattendedallofthe5Boardmeetingswhichwereheldinthefinancialyearended31December2016.
Saveasaforesaiddisclosed,Dato’IsmaildoesnothaveanyfamilyrelationshipwithandisnotrelatedwithanyDirectorand/ormajorshareholderofGUHnorhasanypersonalinterestinanybusinessarrangementinvolvingtheCompany.Dato’Ismailhasnotbeenconvictedofanyoffenceswithinthepast5yearsotherthantrafficoffencesandhehasnotbeenimposedwithpublicsanctionorpenaltybytherelevantregulatorybodiesduringthefinancialyear.
Dato’Ismailattendedallofthe5Boardmeetingswhichwereheldinthefinancialyearended31December2016.
PROFILEOFDIRECTORS
8
GUH Holdings BerhadAnnual Report 2016
PROFILEOFDIRECTORS
En. Wan Ismail Bin Wan NikIndependent
Non-ExecutiveDirector70yearsold,Male,Malaysian
En.WanIsmailBinWanNikhasbeenappointedtotheBoardsince26January1994.En.WanIsmailisalsoadirectorofseveralotherprivatelimitedcompanies.
En.WanIsmailgraduatedfromtheUniversityofMalayain1971withaBachelorofEconomicsDegree.HealsocompletedtheexaminationsoftheInstituteofCharteredSecretariesandAdministrators,UnitedKingdomin1970andtheSecuritiesInstituteofAustraliain1972.Throughhiscareerthatinvolvedinvariousindustries,hehasgainedextensiveknowledgeanddiversifiedbusinessexperienceincludingcommercialbanking,investment,propertydevelopment,manufacturingandtrading.HepreviouslyservedasaDirectorinafewpubliclistedcompaniesandheisknowledgeable,competentandabletogiveindependentjudgmenttotheBoardandtofacilitateamorefair,balancedandeffectivegovernanceof theBoardandtheCompany.
Saveasaforesaiddisclosed,En.WanIsmaildoesnothaveanyfamilyrelationshipwithandisnotrelatedwithanyDirectorand/ormajorshareholderofGUHnorhasanypersonal interest inanybusinessarrangementinvolvingtheCompany.En.WanIsmailhasnotbeenconvictedofanyoffenceswithinthepast5yearsotherthantrafficoffencesandhehasnotbeenimposedwithpublicsanctionorpenaltybytherelevantregulatorybodiesduringthefinancialyear.
En.WanIsmailattendedallofthe5Boardmeetingswhichwereheldinthefinancialyearended31December2016.
Mr.LaiChangHunhasbeenappointedtotheBoardsince13January1994.Mr.LaiisamemberoftheNominationCommitteeappointedbytheBoard.Healsoholdsdirectorshipsofseveralotherprivate limitedcompanies.
Mr.LaiwastheChairmanofPenangElectricalMerchantAssociationandheispresentlyholdingthepositionasoneoftheTrusteesintheAssociation.HeispresentlyaDirectorofHanChiangHighSchoolandCollegeandalsoholdingthepositionasaDirectorinanumberofsocialsocieties.Mr.Laicompletedhishighschooleducationandobtainedadiplomaintheelectricalandelectronicintheearlyyear.Hestartedhiscareerintheelectricalengineeringbusiness.Overtheyears,hehasgainedextensiveknowledgeandbusinessexperienceinthemanufacturingandmarketingofelectronicsandelectricalproductsandappliances.Apart fromthat,hehadbeenservingontheBoardofotherpubliclistedcompanyandisknowledgeable,competentandabletogiveobjectivejudgmenttotheBoardandtofacilitateamorefair,balancedandeffectivegovernanceoftheBoardandtheCompany.
Saveasaforesaiddisclosed,Mr.LaidoesnothaveanyfamilyrelationshipwithandisnotrelatedwithanyDirectorand/ormajorshareholderofGUHnorhasanypersonal interest inanybusinessarrangement involvingtheCompany.Mr.Laihasnotbeenconvictedofanyoffenceswithinthepast5yearsotherthantrafficoffencesandhehasnotbeenimposedwithpublicsanctionorpenaltybytherelevantregulatorybodiesduringthefinancialyear.
Mr.Laiattendedallofthe5Boardmeetingswhichwereheldinthefinancialyearended31December2016.
Mr. Lai Chang Hun DJN, PKT
IndependentNon-ExecutiveDirector
79yearsold,Male,Malaysian
9
GUH Holdings BerhadAnnual Report 2016
PROFILEOFDIRECTORS
Dato’ Gan Kong MengDSDK, PSPP, SDK, DJN, BCN, SMP, AMK,
KMN, PPAIndependent
Non-ExecutiveDirector62yearsold,Male,Malaysian
Dato’GanKongMengwasappointedasanIndependentNon-ExecutiveDirectoron1June2015. He iscurrentlyaSeniorVicePresident forcorporateintegrityandChairmanforcreditreviewandriskassessmentofaprivatelimitedcompany.Keyresponsibilitiesincludeimplementinginternalcontrols,workingwithrelevantauthoritiesandadoptingimportantrulessuchasthoserelatingtobusinessrelationsandthoserelatingtothepreventionofmoneylaunderingandterroristfinancing.
Dato’GangraduatedfromtheUniversityScienceMalaysiawithaBachelorofScienceDegreeinPhysics&MathematicsandhealsoobtainedaMasterofSocialScienceDegreeinAnthropology/Sociology.
Dato’GanservedintheRoyalMalaysiaPoliceformorethan30overyearsbeforeretiringinearlyJanuary2015.HewastheOCPDofGeorgetown,Penang,OCCIofKualaLumpurCityandhealsoheldvariouspositionsinspecialbranch,managementaswellaspublicorder. Dato’Gan’svastexperiencewillbenefit theGroupinbriefingthesecurityandriskmanagementissues.
Saveasaforesaiddisclosed,Dato’GandoesnothaveanyfamilyrelationshipwithandisnotrelatedwithanyDirectorand/ormajorshareholderofGUHnorhasanypersonalinterestinanybusinessarrangementinvolvingtheCompany.Dato’Ganhasnotbeenconvictedofanyoffenceswiththepast5yearsotherthantrafficoffencesandhehasnotbeenimposedwithpublicsanctionorpenaltybytherelevantregulatorybodiesduringthefinancialyear.
Dato’Ganattendedallofthe5Boardmeetingswhichwereheldinthefinancialyearended31December2016.
10
GUH Holdings BerhadAnnual Report 2016
PROFILEOFMANAGEMENTTEAM
Qualifications:
• BachelorDegreeinChemicalEngineering,UniversityofTechnologyMalaysia• RegisteredEngineerofBoardofEngineerMalaysia
Working experiences:
• Morethan15yearsofexperienceinplanningandimplementationoflargescalewaterandwastewaterprojects,havingworkedinamongothers,Biwater,HyfluxandMMC.
• Identificationandacquisitionofwaterandwastewatertreatmentplants
Appointment to the current position:
• 1July2015
Qualifications:
• DiplomainElectronicsEngineering,ICSSchools,UK• MasterinBusinessAdministration• DoctorateofPhilosophyinBusinessAdministration,BulacanStateUniversityofPhilippines• MemberofTheInstitutionofEngineeringandTechnologyUK(MIET)
Working experiences:
• TestEquipmentEngineerwithSanyoElectric• SeniorDesignEngineer/R&DProjectManagerwithGrundigR&D• ProductionManagerwithAsianDriveshaft• ApplicationEngineering&CommercialManagerwithGKNDriveline• PersonalAssistanttoGroupExecutiveDirectorwithGUHElectricalAppliancesSdn.Bhd.• PersonalAssistanttoGeneralManagerwithGUHCircuitIndustry(PG)Sdn.Bhd.• GeneralManagerofGUHCircuitIndustry(PG)Sdn.Bhd.
Appointment to the current position:
• 8January2014
DR. BRIAN KOK SIEW FOONGGeneral Manager – Electronic Division (GUH PG)60 years old, Male, Malaysian
MR. LIM CHIN WANGGeneral Manager – Utility Division38 years old, Male, Malaysian
Qualifications:
• Graduatedfromhighschooleducation
Working experiences:
• Morethan30yearsofexperienceinrigidPCBsmanufacturingindustry• AssistantSupervisorwithMCIndustrySdn.Bhd.• SeniorDivisionManagerwithZyconCorporation(Kuching)Sarawak• DeputyGeneralManagerwithGUHCircuitIndustry(Suzhou)Co.Ltd.• GeneralManagerofGUHCircuitIndustry(Suzhou)Co.Ltd.
Appointment to current position
• 1January2008
MR. YEW KIM CHONGGeneral Manager – Electronic Division (GUH SZ)52 years old, Male, Malaysian
11
GUH Holdings BerhadAnnual Report 2016
PROFILEOFMANAGEMENTTEAM
Qualifications:
• BachelorofEngineering(Civil),UniversityofTasmania,Australia
Working experiences:
• Morethan30yearsofexperienceandknowledgeinthebuildingconstructionandpropertydevelopmentindustry.
Appointment to the current position:
• 16August2006
MR. SUNNY LIM HIONG CHAISenior Project Manager – Property Division55 years old, Male, Malaysian
Qualifications:
• CertificateinArchitecture• DiplomainCivilandStructureEngineering
Working experiences:
• Morethan27yearsofexperienceinconstructionandpropertydevelopmentinclusiveofdesign,planning,implementation,marketingandsaleadministration.
Appointment to the current position:
• 1August2006
MR. LEOW CHEE JIANSenior Project Manager – Property Division51 years old, Male, Malaysian
Qualifications:
• BachelorDegreeinAccounting,UniversityofMalaya• CharteredAccountantwithTheMalaysianInstituteofCertifiedPublicAccountants• MemberofMalaysianInstituteofAccountants
Working experiences:
• Morethan20yearsofexperienceinthefieldofaccounting,costing,taxation,finance,auditingandriskmanagement.
• BeganhercareerwithArthurAndersen&Co
Appointment to the current position:
• 1January2015
MS. YEOH SAW GAIKDeputy General Manger – Corporate Office47 years old, Female, Malaysian
12
GUH Holdings BerhadAnnual Report 2016
Qualifications:
• BachelorDegreeinEconomics,MonashUniversity,Australia
Working experiences:
• GainedextensiveknowledgeandexperienceinbusinessmanagementfromCitigroupandKiyamasGroupofcompanies.
• 2yearsworkingexperienceasDeputyGeneralManagerinGUHCircuitIndustry(Suzhou)Co.Ltd.,China
• PersonalAssistanttoCEO/ManagingDirectorofGUHHoldingsBerhad• GeneralManagerofCorporateDivisionofGUHHoldingsBerhad
Appointment to the current position:
• 12January2015
Mr.LewisH’ngChunLiisthesonofDato’KennethH’ngBakTee,CEO/ManagingDirector.HeisalsothenephewofTanSriDato’SeriH’ngBokSanandDato’HarryH’ngBakSeahandthecousinofDatinJessicaH’ngHsiehLing.
Mr.LewisH’ngsitsontheboardofmajorityofsubsidiariesofGUH.Heisdeemedtohaveaninterestpertainingtotheproposedrenewalofshareholders’mandateforrecurrentrelatedpartytransactionsofarevenueortradingnaturewhichwillbetabledattheforthcoming53rdAnnualGeneralMeeting.
MR. LEWIS H’NG CHUN LIGeneral Manager – Corporate Office29 years old, Male, Malaysian
PROFILEOFMANAGEMENTTEAM
Additional notes on the above Management Team
Saveasaforesaiddisclosed,noneoftheManagementTeamhasany:-
1. Directorshipinpubliccompaniesandlistedissuers;
2. Familyrelationshipwithanydirectoror/andmajorshareholderoftheCompany;
3. ConflictofinterestswiththeCompany,and
4. Convictionofofffences,otherthantrafficoffenceswithinthepast5years,andpublicsanctionorpenaltyimposedbytherelevantregulatorybodiesonhimorherduringthefinancialyear.
13
GUH Holdings BerhadAnnual Report 2016
OnbehalfoftheBoardofDirectorsofGUHHoldingsBerhad(“GUH”or“theCompany”),IampleasedtopresenttheAnnualReportandAuditedFinancialStatementsof theCompanyandtheGroupforthefinancialyearended31December2016.
Tan Sri Dato’ Seri H’ng Bok San, JP
PSM, DPPN, DGPN, DSPN, PKT, PJK
ExecutiveChairman
EXECUTIVECHAIRMAN’SSTATEMENT
14
GUH Holdings BerhadAnnual Report 2016
Performance Overview
Despitetheadverseenvironment,forthefinancialyearended31December2016,theGroup’srevenueincreasedtoRM315.1millionfromRM285.4millionrecordedintheprecedingyear.TheGrouprecordedahigherprofitbeforetaxofRM23.2millioncomparedtoRM18.7millionfortheprecedingyearmainlyduetoimprovementandcontributionfromitsElectronicDivision.
Significant Event
On1March2016, theCompanyannouncedthat theproposedacquisitionof two (2)contiguouspiecesof freeholdvacant landheldunderLot1377andLot1699,Mukim12atTempatLadangValdor,SeberangPeraiSelatan,Penang,measuringapproximately12.06acres,onefromarelatedpartyandanotheronefromathirdpartybyGUHRealtySdn.Bhd.,awholly-ownedsubsidiaryoftheCompanyhadbeencompleted.Duringthefinancialyear,theCompanyproposedandsubscribed1,166,667newordinarysharesofRM1.00each(25%equityinterest)inStraitsInternationalEducationGroupSdn.Bhd. fora totalcashconsiderationofRM11.0million;andacquired2ordinarysharesofRM1.00each(100%equityinterest)inMilanDiamondSdn.Bhd.foracashconsiderationofRM2.00andthesettlementofliabilitiesofapproximatelyRM6.77million,ofwhichRM3.5millionhasbeensettledinyear2016.Thetransactionscompletedon30March2016.Uponthecompletion,Straits InternationalEducationGroupSdn.Bhd.hasbecomeanassociateofGUHCapitalSdn.Bhd.,whichisawholly-ownedsubsidiaryofGUHwhereasMilanDiamondSdn.Bhd.hasbecomeawholly-ownedsubsidiaryofGUHAssetHoldingsSdn.Bhd.,whichinturnawholly-ownedsubsidiaryofGUH.
Sustainability of Business
TheBoardofDirectorsofGUH(“theBoard”)alwaysacknowledgesthatmaintainingagoodbusinessisnotjustaboutachievingthedesiredfinancialbottomline,butalsobeingethicalandsustainable.Therefore,GUHGroupwillcontinuetoembracesustainabilityincarryingoutitsbusinessconductandoperations,impactontheenvironmentandsocietyitoperates.
More informationonGUH’s initiatives isdisclosed intheSustainabilityReportof theCompany’sAnnualReport2016.
Corporate Governance
In linewith theMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhadandtheMalaysianCodeonCorporateGovernance2012,theBoardfirmlybelievesthatgoodgovernanceenablestheGrouptoholdthetrustofitsstakeholders.Therefore,theBoardisalwaysmindfulofitsdutiesandwillcontinuetoupholdandfosterastrongcultureoncorporategovernanceastheBoardbelievesthatitistheplatformtosafeguardthebestinterestoftheCompanyanditsshareholders
whileensuringthattheinterestsofotherstakeholdersarenotcompromised.
More information inrelationtocorporategovernancecanbefoundintheCorporateGovernanceStatementoftheCompany’sAnnualReport2016.
Dividend
TheBoard iscommitted todelivering thebestvaluetotheshareholdersviaconsistentdividendpayments.In linewith this, theBoardhascontinuouslybeendeclaringdividendtoitsshareholdersovertheyearsinitscommitmenttoenhanceshareholders’returns.Forthefinancialyearended31December2016,theBoarddeclaredaninterimsingletierdividendof3.5senpershare.Thiswaspaidon28September2016 to theshareholderswhosenamesappearedintheRecordofDepositorsoftheCompanyatthecloseofbusinesson8September2016.
Related Party Transactions
TherelatedpartytransactionsoftheGrouparedisclosedinNote29oftheNotestotheFinancialStatementswhichalsosetout therecurrent relatedparty transactionsconductedduringtheyearinaccordancewiththemandateobtainedfromtheshareholdersatGUH’sAnnualGeneralMeetingheldon24May2016.Exceptasaforesaiddisclosed,thereisnoothermaterialcontractinvolvingthe interestof thedirectorsandmajorshareholdersduringtheperiod.
Outlook and Prospects
Moving intoyear2017, theCompanyhasadoptedacautiousapproachgiventhatmarketconditionsremainvolatile.Nevertheless,ElectronicDivisionoftheGroupanticipatesbetterresultsonpredictedsurgeinglobalmarketformajordomesticappliances,favorableproductmixand implementationofoperational improvementstrategies.Inaddition,PropertyDivisionforeseesnewpropertylaunches,flatgrowthindemandforelectricalproductsandbuildingmaterialscoupledwithhigherFFByieldinyear2017.UtilityDivisionexpectstoreturntotheblackonhigherrevenuerecognitioncoupledwithaggressivetenderingofnewandsizeablewaterprojectsinyear2017.Overall, theGroupexpects to remainpositiveandperformbetterintheyearahead.
Appreciation
TheBoardwouldliketotakethisopportunitytoexpressitsheartfeltthanksandappreciationtotheManagementteamandstafffortheirloyalty,hardworkandcommitmentindrivingtheCompanyforward.TheBoardalsorecordsthankstotheshareholders,customers,partners,bankers,businessassociatesandalltherespectedgovernmentauthoritiesfortheirinvaluablesupportandassistance,continuoustrustandunderstandingduringtheyear.
EXECUTIVECHAIRMAN’SSTATEMENT
GUH Holdings BerhadAnnual Report 2016
14
15
GUH Holdings BerhadAnnual Report 2016
MANAGEMENT’SDISCUSSIONANDANALYSIS
OnbehalfoftheBoardofDirectorsofGUHHoldingsBerhad(“GUH”or“theCompany”),Iampleased topresent theresultsandperformanceofGUHand itsGroupofCompaniesforthefinancialyearended31December2016.
Dato’ Kenneth H’ng Bak Tee DPNS, DSPN, PKT, PJM
CEO/ManagingDirector
16
GUH Holdings BerhadAnnual Report 2016
2015
83.8%
0.3%
7.1%
0.6%
2.9%5.3%
MANAGEMENT’SDISCUSSIONANDANALYSIS
Forthefinancialyearended31December2016,therewasanincreaseofRM29.7million inGrouprevenueofRM315.1millioncomparedtoRM285.4millionforyear2015.
ElectronicDivisionhadahighercontributionofRM264.7millionor84.0%ofGrouprevenue(year2015:RM239.3millionor83.8%).UtilityDivisionbroughtinRM25.7millionor8.2%ofGrouprevenue(year2015:RM20.3millionor7.1%)mainlycontributedbythewaterprojectsofitssubsidiaryknownasTeknoservEngineeringSdn.Bhd.
DespiteimprovedperformancebyElectronicandUtilityDivisionsoftheGroup,PropertyDivisionhaddroppedslightlyinrevenuetoRM14.8millionor4.7%ofGrouprevenue(year2015:RM15.0millionor5.3%).Thiswasaffectedbytheadverseeconomicenvironmentwhichcontinuedtopressurethedecreaseinthenumberofpropertyunitssold.Meanwhile,ElectricalDivisionmadeRM8.0millionor2.5%ofGrouprevenue(year2015:RM8.3millionor2.9%)mainlyduetolowersalesofelectricalproducts.
PlantationandInvestmentDivisionsrecordedRM1.4millionandRM0.5millionor0.4%and0.2%ofGrouprevenuerespectively.(year2015:RM1.7millionandRM0.8millionor0.6%and0.3%).
GUH Holdings BerhadAnnual Report 2016
GUH Group Revenue By Segment
2016
84.0%
0.2%
8.2%
0.4%
2.5% 4.7%
Waterandwastewatertreatment
Unallocatednon-operatingsegmentsCultivationofoilpalm
SaleofelectricalappliancesManufactureofprintedcircuitboards
Propertydevelopment
17
GUH Holdings BerhadAnnual Report 2016
Despitetoughbusinessenvironmentthroughoutyear2016,GUHGroupmanagedtomakeprofitbeforetaxofRM23.2millionwhichwasRM4.5millionhigherthanprofitbeforetaxofRM18.7millionrecordedinyear2015.TherewasanimprovementofRM8.8millioninprofitbeforetaxforElectronicDivisionmainlycontributedfromitstwosubsidiariesnamelyGUHCircuit Industry(PG)Sdn.Bhd.andGUHCircuit Industry(Suzhou)Co.,Ltd.ofRM7.2millionandRM1.4millionrespectively.ProfitbeforetaxforElectricalDivisionincreasedbyRM0.7millioncomparedtoyear2015mainlyduetohighergainonfairvalueadjustmentofinvestmentpropertiesofRM0.6millionandgainondisposalofinvestmentpropertiesofRM0.1millionforitssubsidiaryknownasGUHRealtySdn.Bhd.
Apartfromthat,therewasadeclineofRM0.2millioninlossbeforetaxforInvestmentDivisioncomparedtoyear2015mainlyduetofavorableforeignexchangeofRM0.7millionoffsetbyfairvaluelossoncontingentconsiderationfortheacquisitionofassociates,i.e.StraitsInternationalEducationGroupSdn.Bhd.(“SIEG”)ofRM0.4millionduringyear2016.
ThenegativevarianceofRM2.6millionincontributionsfromassociateswasduetoshareoflossfromCambodiaUtilitiesPte.Ltd.upontheexpirationofPowerPurchaseAgreementinMay2015andshareoflossfromSIEGofRM0.4million.Inaddition,UtilityDivisionsufferedafurtherlossofRM2.0millioncomparedtoyear2015mainlyduetoslowconstructionprogressfornewwaterprojectscoupledwithhigheradministrativeexpenses.Inthemeantime,PropertyDivisionrecordedalossbeforetaxofRM0.1millionagainstprofitbeforetaxofRM0.9millionforyear2015withlowerpropertyunitssold.ProfitbeforetaxforPlantationDivisionplungedbyRM0.2millioncomparedtoyear2015intandemwiththedropinrevenue.
MANAGEMENT’SDISCUSSIONANDANALYSIS
GUH Holdings BerhadAnnual Report 2016
GUH Group Profit Before Tax By Segment
2016 2015
22,000
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
(2,000)
Segments
19,619
875 68483
(1,317) (1,270)
(RM’000)
Segments
30,500
25,500
20,500
15,500
10,500
5,500
500
(4,500)
28,397
1,575482207
(3,274) (4,171)
(RM’000)
Waterandwastewatertreatment
Unallocatednon-operatingsegmentsCultivationofoilpalm
SaleofelectricalappliancesManufactureofprintedcircuitboards
Propertydevelopment
18
GUH Holdings BerhadAnnual Report 2016
MANAGEMENT’SDISCUSSIONANDANALYSIS
Electronic Division
Manufacturing of Printed Circuit Boards (PCBs)
GUH Circuit Industry (PG) Sdn. Bhd. (GUH PG)
TherevenueofGUHPGforyearended2016improvedsignificantlyoveryear2015,anindicativetrendthatthestrategiesoflongtermbusinesssustainabilitybyimprovingcapability,capacityandcustomerconfidenceborefruit.Strategiesweremappedandcarriedintoactionplansbycarefulanalysisofthemarketsituation,predictingfuturetrendsofendproductsandtomakefocusedinvestmentsincapitalassetsandknowledgedevelopmentof theemployeesintheidentifiedPCBdomain.Asaresult,therewere improvements indouble-sidedandmulti-layeredboardstechnicalcapabilitiesandsales.GUHPGrecordedasignificantimprovementinprofitbeforetaxfortheyearended2016comparedtoyear2015.
AsexternalkeyindicatorsofcontinuousimprovementsworthyofhighlightingwerereceivingtheToshibaBestServiceAwardandtheYamahaBestPerformanceAwardbothinMay2016.
GUHPG’sproductquality improvedsignificantly,customerauditspassedwithdistinctionandallQualityManagementSystemandEnvironmentalSystemauditspassedeffortlessly.CustomersvisitingGUHPGincreasedsignificantlyduetoitsmottoof“sellingasolution”ratherthanjustPCBs.
The financial performanceofGUHPG improvedsignificantly inboth revenueandprofitbefore taxcontributedbyManagement’s focuson improvingmanufacturingefficiency,customersconfidenceandwithcarefulanalysisofendproducts tounderstandcustomerstechnicalexpectationsbetter.In2016GUHPGmadeastrategicandsignificantCAPEXinvestmenttoupgradeitsmanufacturingcapability.GUHPGfurtherbudgetedforsubstantialCAPEXinvestment foryear2017tofurtherimproveonmanufacturingcapabilityaswellasstrategicsemi-automationinvestmentinsomekeyidentifiedprocesses.
TheconsumerpreferencetrendofmovingfromfamilyloungeTV,hometheater,Hi-Fisetstowardsindividualisedcarry-alongsmartphonesremainunabatedandthusGUHPGexpectsacontinueddeclineinPCBsforAudioandVisualproducts.Theproductsofair-conditioners,car-audio,homeappliancesandmusical instrumentswillcontinuetogrow.GUHPGisredirectingeffortsandstrategiesinitsmarketingaswellasthemanufacturingcapabilitiestowardsthisdomain.
Thepricesofrawmaterial,coppercladlaminates(“CCL”),oneofthemajormaterialusedformakingPCBshavebeenmovingupwards in2016due to thesupplyofcopperfoilbeingdivertedtomakingbatteriesforelectric
vehiclesandotherbatteryoperatedproducts.GUHPGcontinuouslynegotiateiswithcustomersforreasonablepriceincreaseinlinewithCCLpricehike.
AvailabilityofworkersandlabourcostincreasedhavebecomeanormandproblemsthateverymanufacturerfaceinMalaysia.TheMalaysiangovernmenthasfurtherincreasedtheminimumwagerulingtoRM1000inJuly2016fromtheRM900mandatedinJanuary2013,whichaddontheburdenofdirectlabourcost.Inthisdomain,GUHPGisembarkingonaprojectofsemi-automationof identifiedareastoreducerelianceonworkers forrepetitivetasks.
InDecember2016,BankNegaraMalaysiaimplementedtheFOREXruleof;
• 75%immediateconversionofUSDtoMYRduringpaymentbyoverseascustomers
• AllpaymentbetweenresidentcompaniesinMalaysiamustbeinMYR
ThisnewrulehasanimpactonUSDpricestoresidentcompanies.Nevertheless,GUHPGmanagedtonegotiateawin-winpaymentagreementwithitscustomers.
Despitethepresenceofunavoidablerisksfactorssuchashighlighted,theprospectsofGUHPGfor2017remainstableandsustainableanditexpectsimprovementsin2017over2016byimplementingactionstoenactthefollowingstrategies:
• Continue toenhancecustomersconfidence inquality,deliverylead-time,productivity,capabilityin lowvolumehighmixbusiness,by improvinginternaloperationalperformance.
• InthemarketingandsalesdomainGUHPGwillpursuenewcustomerswithproductsinhomeappliances,air-conditioners,car-audio,air-conditionersandmusicalinstruments.
19
GUH Holdings BerhadAnnual Report 2016
• Anexpansionofexistingcustomerandnewcustomergroupsbypromotingcustomersconfidenceinthecapabilityinfinepitchandlinedesign,BGAdesign,impedancecontrol,carbonprinting,goldplatingandplugged-holedesigns.
• Concentrationofhighersalesmarginproductssuchasdouble-sidedandmulti-layeredPCBsandexpansionintheexportmarkettoreplacebusinesslostinthelocalMalaysianmarket.
• In2016,GUHPG’sinvestmentsinmachinerywilltakeontheapproachtosemi-automatewhereverpossible toposition itself into less relianceondirect labouraswellassecuringconsistency inmanufacturingefficiency.
GUH Circuit Industry (Suzhou) Co., Ltd. (GUH SZ)
aggressivepricestrategy,extensionoflongerpaymentterms,cheaper toolingcostandengineeringcost tocapturenewbusinessshareallocations.
AlthoughGUHSZ’s totalsales revenuedecreasedslightlyinyear2016itisconfidentthatthecompanywillbeabletosustainandbeprofitablein2017andbeyondtoitsmanufacturingoperationexcellence,goodqualityproductsandreputablemarketimage.
Goingforward,GUHSZwillcontinuouslydevelopproductsforcustomersinthenichemarketandselectionofmoreprofitablePCBapplications in thehomeappliancesandfanmotormarket.Thisnewbusinessexpansionwillgenerateadditionalsalesrevenuewithbetterprofitmarginwhilemaximizingtheutilisationofproductioncapacity.GUHSZwillcontinuetoupgradeitsproductioncapabilityanditsoperationexcellencetogaincustomersconfidenceandfuturebusinesssustainability.
GUHSZcontinueditsbrandingimageofmaintainingover75%ofJapanesebasedcustomersofyear2016totalsales revenue.Thiswillcontinue tocontributesignificantlyinthesustainabilityofcompany’sprofitabilityduetobetterpricingscenarioandbusinessstabilitytrendofitscustomerprofile.
TherevenueofGUHSZforyear2016wasslightlylowerthanyear2015andprofitbefore taxalsodecreasedslightlyinyear2016.Benchmarkingwithsimilarindustries,GUHSZremainsstrongandprofitable.
ThecontinuousincrementinproductioncostsattributedtoexternalfactorscoupledwithlabourshortageandthestringentChinagovernment’senvironmentregulationsweresomeoftheconstraintsthatcausedlessefficientandweakerPCBmanufacturerstosustainlossesandtoclosedowntheirmanufacturingoperationsormoveout fromChina toASEANregionssuchasThailandandVietnam.
However,GUHSZhasbeenabletoweatherthesituationwellbyundertakingvariousactionplanswhichincludecostreductionstrategiesinmanufacturingoperations,suppliermanagement,logisticandstringentbudgetarycontroltoremaincompetitive.
GUHSZexpectsthreats like increment inproductioncostscoupledwith labourcost, labourshortage, thestringentChinagovernment’senvironmentregulationstoworsenovertime.GUHSZwithforwardpreparationsandsustainabilityplanswillbravethroughanychallenges.
OtherchallengesincludestiffcompetitionfromsimilarwellmanagedlocalChinesePCBmanufacturerswiththeimprovementoftheirproductsqualitycoupledwiththeir
20
GUH Holdings BerhadAnnual Report 2016
MANAGEMENT’SDISCUSSIONANDANALYSIS
Property Division
GUH Properties Sdn. Bhd. (GUH Properties)GUH Land Sdn. Bhd. (GUH Land)GUH Development Sdn. Bhd. (GUH Development)GUH Realty Sdn. Bhd. (GUH Realty)Milan Diamond Sdn. Bhd. (Milan Diamond)
RevenueofGUHPropertiesinyear2016waslowerthanthepreviousyear.Slumpintheoilprice,depreciationofMalaysianRinggit,andtighteningofcreditrulesforhousingloanwereamongthemajorfactorstowardtheweakpropertymarket.Asaresult,theprofitbeforetaxwasaffectedaccordingly.
Fortheyearunderreview,GUHPropertiesembarkedonhigh-end landedguardedresidentialdevelopmentsituatedonhighgroundwithsurroundingshoppingmalls,healthcarecentresandcommercialhubs.Theconstructionoftheentrancestatementandshowvillaareonthevergeofcompletion.
GUHDevelopmentiscurrentlyplanningtheoverallmasterdevelopmentplanforthe46acresdevelopmentlandatSimpangAmpat,PulauPinang.Itwillbeanintegrateddevelopmentwithlifestyleshops,housingprojectsandcommercialhub.Launcheswillbescheduled in thenearfuture.
Inyear2016,GUHRealtycompletedthepurchaseof2piecesoflandatSungaiBakap,PulauPinang.Withcombined landareaofapproximately17acres, thedevelopmentisatthestageofobtainingapprovalsfromtherelevantauthoritiestodevelop into light industrialarea.
BesidelandacquisitionatSungaiBakap,MilanDiamond,thewhollyownedsubsidiaryofGUHAssetHoldingsSdn.Bhd.,hasatthesameyearenteredintoalandacquisitionagreementtoacquire3acresoflandatRawang,SelangortoerectinternationalschooltogetherwithbuildingandthelanditwillbeleasedtoStraitsInternationalEducationGroup(SIEG)onlongtermbasis.
Basedonthecurrentchallengingeconomicenvironmentandrisingcostofliving,itisanticipatedthatsaleswillcontinuetoslowdown.PropertyDivisionhasintensivelydevelopedmoreaggressivemarketingstrategytomarketitsproductsandtocaterforstiffercompetitionamongpropertyplayers.
Movingforward,PropertyDivisionwillembarkonintegratedcommercialprojectwithretailoutlets, recreationandleisurefacilities,foodandbeverageoutlets,shopsandoffices.DuetolackofintegratedcommercialprojectsintheareaofTamanBukitKepayang,Serembananditsstrategiclocation,thedevelopmentwillbeingreatdemand.
PropertyDivisionwilllaunchthelightindustrialprojectinSungaiBakap,PulauPinangandtoconstruct theinternationalschoolbuildingsinRawang,Selangoroncetherelevantauthorityapprovalhavebeenobtained.
With the introductionof theabovediversityrangeofpropertydevelopment,differentmarketneedsanddemandshavebeencaptured.PropertyDivisionhasstrategiseditspositiontodiversifyitssourceofincomeandprofitfromdifferentrangeofpropertydevelopmentproducts.
ThePropertyDivisionwillcontinuetoscoutforlandtofurther increase its landbankandtocater for futuregrowth.
20
21
GUH Holdings BerhadAnnual Report 2016
MANAGEMENT’SDISCUSSIONANDANALYSIS
Electrical Division
GUH Electrical (BW) Sdn. Bhd. (GUH BW)
GUHBWisprincipallyengagedinthetradingofvariouselectricalgoodsandconstructionmaterialssuchastiles,paintsandsanitaryware.
GUHBWclosedadifficultyearonagoodnote.Despiteachallengingmarketenvironmentdue todifficultmacroeconomicconditions,GUHBWgrewnetprofitbymorethan50%,fromRM0.1milliontoRM0.2million.Thegrowthcamefrombothexistingproductsandnewproductsrangewhichcontributedstronglytoitsprofitmargin.Duringtheyear,thecompanywideneditsrangeofproductsunderthehouse-brand“LEB”,tomaximizemargin,inadditiontothecurrentproductrangeoffittings,ballastsandindustrialfan.TheLEBbrandhasexpandedtoincludeLEDtubeandflexiblecables.
2016wasachallengingyearwithdepreciationoftheMalaysianRinggitandweakerprivateconsumption,whichledtoayearofreduceddemandandunpredictability.However,GUHBWisnowbetterpositionedforprofitgrowthinyear2017asmarketconditionsstabilize.
Asanestablishedtradinghouse,havingbeen in thebusinessformorethan45years,thedivisionconstantlystrivestoserveitsexistingcustomersbetterbymaintainingreliableandexcellentservice,andat thesametime,attractingthebestpossiblenewcustomerswithitsfairmarketprices.
GUHBWcontinuestobeoneofthetopdistributorsofestablishedbrandsofelectrical installationmaterialssuchasSchneiderandwillcontinue tosourceandengageforneworotherestablishedproductsthatwillcontributetoitsrevenue.
GUHBWmaintainsanoptimistic outlook for thedivision.2016wasayearofmacroeconomicdifficultyandchallengingwithunpredictablemarkets.GUHBWenters2017withengagedandcommittedteamtofocusonrealizingoperationalefficienciestodriveprofitabilitygrowth.
Plantation Division
GUH Plantations Sdn. Bhd. (GUH Plantations)
Prolongeddryweatherinsecondhalfofyear2015andfirsthalfofyear2016causedtheoutputoffreshfruitsbunchestodeclinewhichaffectedanddampenedthecrudepalmoilproduction.Productionofcrudepalmoildroppedfrom19.96milliontonnesinyear2015to17.31million tonnes inyear2016.Thedeclinewasapproximately13.28%.
Palmoilstocksclosedat1.77milliontonnesinDecember2016,lowerby23.38%comparedto2.31milliontonnesrecordedinDecember2015.Oneofthereasonsforthedeclineinstockswasduetolowerproduction.Inyear2016,thepriceofalloilpalmproductswashigherduetolowfreshfruitsbunchesproductionfurtherimprovedpalmoilpricesandweakerMalaysianRinggitagainstUSDollar.CrudePlamOilwastradedatRM2,652.00per
tonneinyear2016comparedtoRM2,153.50pertonneinyear2015.CrudePalmOilpricereachedRM3,200.00pertonneinDecember2016.
HighCrudePalmOilpricehasnarrowedpalm’sdiscounttotherivaledibleoil,promptingprice-sensitivebuyerstoswitchtosoyinstead.
ThePlantation IndustriesandCommodities (MPIC)Ministryisoptimisticofachievinghigherpalmoilexportrevenueinyear2017onthebackofbetterpricesseeninthecurrentcommodity.
GUHPlantationsexpectstoachievehigheroutput inyear2017comparedtoyear2016duetobetterrainfallinthepast.Nonetheless,theincreaseisnotsignificantaspalmsrequirelongerrecoveryperiod.
21
22
GUH Holdings BerhadAnnual Report 2016
MANAGEMENT’SDISCUSSIONANDANALYSIS
Utility Division
Water & Wastewater Solutions
Teknoserv Engineering Sdn. Bhd. (Teknoserv)
TherevenueincreasedtoRM25.7millioninyear2016fromRM20.3millioninyear2015.Thegrowthinrevenuewasdue to recognitionofsales frommaturationofongoingprojects.
Inadditiontotheabove,Teknoservdemonstrateditselfasanexperiencedandestablishedplayerinthewaterandsewerageindustrybysuccessfullysecuringa50MLDwatertreatmentplantprojectinPerakinJanuary2016andthreenewseweragetreatmentplantprojectsinNegeriSembilanandPenangrespectively in thesecondhalfofyear2016.
Teknoservhadalsosuccessfullycommissionedandhandedovera25MGDwatertreatmentplantinMarch2016whichwasanintegralpartoftheprestigiousMudaRiverSchemePhase4APackage12ProjectinPenangandontracktocompleteanothertwowatertreatmentplantprojectsbyendofyear2017.
Inviewoftheintensecompetitionamongserviceproviders,playersapttooutbideachotherinordertosecuremarketshare.Followingthisandtheneedtoremainviable,Teknoservoffersattractivepackagestosecurecontract
especiallyduringthiseconomicdownturn.Inordertoremaincompetitive,thecompanyhasestablishedstrongnetworkingwithsupplychainandsub-contractorsinordertoachievecompetitivepricing.Themanagementstaffalwaysmaintaingoodrapportwithconsultants,clientsandrelevantauthoritiestoensurethesecuredprojectsareexecutedsmoothly.
Priceescalationinconstructionmaterialandequipment,andweakeningofMalaysianRinggitduringprocurementstageforimportedequipmentsaresomeofthemajorthreatstothecompany.Inordertomitigatethis,theteamconsistenlychecksformaterialsandequipmentpricesandvalidityonaregularbasis.Theteamwillsecurelongerpricevalidityperiodfromthesuppliersbeforetakingupanynewcontract.
Teknoserviswellplacedtoparticipateandclinchmoreprojects in thewaterandseweragemarkets, locallyandoverseasbyconsistentlyreviewing itsbusinessdevelopmentstrategiesandeffortsinlinewithmarketopportunitiesanddevelopments inorder to furtherenhanceitsorderbookandsecureitsbusinessportfoliointheregion.
Financial Position of GUH Group
GUHGroup’stotalassetsasat31December2016wasRM663.5millionagainstRM614.4millioninyear2015whileequityattributabletoownersoftheCompanygrewtoRM524.8millionfromRM517.9million.NetassetspershareattributabletoownersoftheCompanyincreasedtoRM1.99persharefromRM1.96persharelastyear.TotalcashoftheGroupwasRM110.6millionasat31December2016comparedtoRM136.0millionasat31December2015.
GUH Holdings BerhadAnnual Report 2016
23
GUH Holdings BerhadAnnual Report 2016
GUHPropertiesSdn.Bhd.(44057-D)
GUHPlantationsSdn.Bhd.(76386-W)
GUHAssetHoldingsSdn.Bhd.(191588-V)
GUHInternational(HK)Pte.Ltd.
GUHWaterHoldingsSdn.Bhd.(945131-T)
GUHCapitalSdn.Bhd.(1163923-H)
CambodiaUtilitiesPte.Ltd.
GUHElectrical(BW)Sdn.Bhd.(9143-K)
TeknoservEngineeringSdn.Bhd.(337348-H)
StraitsInternationalEducationGroupSdn.Bhd.(916080-M)
GUHElectrical(KL)Sdn.Bhd.(84822-P)
GUHWater(Jiangsu)Pte.Ltd.
GUHElectricalAppliancesSdn.Bhd.(103524-K)
MalaysianMechanicalEngineeringIndustriesSdn.Bhd.(45674-U)
TecnovacMarketingSdn.Bhd.(333591-H)
GUHRealtySdn.Bhd.(48565-M)
MilanDiamondSdn.Bhd.(1098744-D)
JeladanSdn.Bhd.(195266-U)
GUHLandSdn.Bhd.(1091980-T)GUHDevelopmentSdn.Bhd.(188437-M)
100% GUHElectronicHoldingsSdn.Bhd.(165866-A)100% GUHCircuitIndustry(PG)Sdn.Bhd.(231743-T)
100% GUHCircuitIndustry(Suzhou)Co.,Ltd.
100% GrandUnited(BVI)Co.Ltd.
100% GrandCircuitIndustry(Philippines)Inc.
GUH HOLDINGS BERHAD(4104-W)
ElectronicDivision Property&PlantationDivision UtilityDivision
CORPORATESTRUCTURE
24
GUH Holdings BerhadAnnual Report 2016
FINANCIALHIGHLIGHTS
PROFIT BEFORE TAX (RM’000) PROFIT FOR THE FINANCIAL YEAR ATTRIBUTABLE TO OWNERS OF
THE COMPANY (RM’000)
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (RM’000)
TOTAL ASSETS (RM’000)
REVENUE (RM’000) EBITDA (RM’000)320,000 80,000
300,000 60,000
280,000 40,000
260,000 20,000
240,000 02012 2013 2014 2015 2016
YEAR2012 2013 2014 2015 2016
YEAR
50,000 40,000
40,00035,000
30,000
30,000
20,000 20,000
25,000
10,00015,000
10,000
0 50002012 2013 2014 2015 2016
YEAR2012 2013 2014 2015 2016
YEAR
2012 2013 2014 2015 2016
YEAR2012 2013 2014 2015 2016
YEAR
600,000 600,000
400,000 400,000
200,000 200,000
0 0
280,386
46,897
286,569
38,606
299,379
33,637
285,373
18,674
315,120
23,216
59,308
36,111
52,066
29,987
49,687
20,513
32,882
9,931
37,379
18,878
491,225
563,698 569,159
614,439
663,456
422,708
490,079 494,272517,940 524,795
25
GUH Holdings BerhadAnnual Report 2016
FINANCIALHIGHLIGHTS
RETURN ON TOTAL EQUITY (%) BASIC EARNINGS PER SHARE (SEN)
NET ASSETS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY (RM)
LOANS AND BORROWINGS (RM’000)
GROSS DIVIDEND PER SHARE (SEN)
GEARING RATIO (%)
# Adjustedretrospectivelytoreflectthechangesinthenumberofsharesasaresultof1for2BonusIssueinNovember2013.
14.00
3.00
14.00
12.00
2.00
12.00
6.00
10.00
1.00
10.00
5.00
8.00
0.00
8.00
4.00
6.00 6.00
3.00
4.00 4.00
2.00
2.00 2.00
1.00
0.00 0.00
0.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
2016
2016
YEAR
YEAR
YEAR
2012 2013 2014 2015 2016
YEAR
2012 2013 2014 2015 2016
YEAR
2012 2013 2014 2015 2016
YEAR
20,000
15,000
10,000
5,000
0
8.52
6.24
4.15
1.92
3.60
13.23#
11.34
7.75
3.76
7.16
2.40
1.82 1.87 1.96 1.99
6.00 6.00
5.00 5.00
3.50
117 136 0 0
16,278
0.03 0.03 0 0
3.10