MANAGING DIRECTOR / GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT
The overall review of financial year 2015 saw the Company’s performance is improving as compared to the previous financial year. The management has taken proactive steps by diversifying into several businesses with the objective of taking the Group into brighter future.
Below are the significant events during the financial year and prospects of the Group:
Significant Events and Prospects
The Company has been awarded the role of project management consultant (“PMC”) for the Gateway Klang Project, a mixed commercial development consisting of duplex shop office, hotel tower, anchor lot, cineplex and related external works from Lagenda Erajuta Sdn. Bhd. The value for the PMC award is estimated to be RM18 million over a period of three (3) years. The award has been approved by the shareholders at the Extraordinary General Meeting held on 17 April 2015.
Additionally, the Company also has been awarded the PMC role for the Likas Boulevard Project, a 30 storey mixed commercial development consisting of basement carpark, lower ground shop, duplex shop office, hotel tower, condominium, anchor lot, cineplex and related external works at Teluk Likas, Sabah from GE Properties Sdn. Bhd. The value for the PMC award is estimated to be RM24 million over a period of five (5) years.
Both awards are expected to provide the Group with additional sources of income for the next five (5) financial years and the income generated from the PMC is in turn expected to contribute positively to the future earnings of the Group.
Refurbishment of Shopping Mall
The Gateway Centerpoint Seremban Shopping Mall is currently undergoing an asset enhancement initiatives to upgrade the Shopping Mall for better branding and to generate better and stable rental income to the Group. The Company is targeting to re-open the Shopping Mall in second half of 2016.
The Board believes that the proposed asset enhancement initiatives would contribute positively to the Group’s profitability and returns on shareholders’ fund.
Proposed Joint Venture Development Project in Myanmar
The Company had signed a ‘Memorandum of Understanding’ with United Pacific Development Co. Ltd. (a company that incorporated in Myanmar) on 13 June 2015 to set up a joint venture company in Myanmar to develop a 32 storey office tower at Pyay Road, Yangon. The property is located within the inner city area of Yangon, next to the downtown area, within Kamayut Township. Pyay Road is one of the longest and most prominent roads in Yangon and runs along the west of Inya Lake. It is the main thoroughfare connecting Yangon’s airport and Central Business District.
The joint venture agreement is being finalised at the moment and is pending approval from Myanmar Investment Commission before signing the agreement.
The Board is of the opinion that the proposed joint venture project would contribute positively to its future earnings and will improve the financial position of the Group in a longer term.
Shares Issuance Scheme (“SIS”)
The proposed SIS options has been approved by the Bursa Securities and subsequently approved by the shareholders during the EGM. The allocation of SIS options to the eligible directors and employees has been completed during the same financial year.
The SIS is intended to achieve the following objectives:
- to recognise and reward the contributions and services of the Eligible Person that are considered vital to the operation and continued growth of the Group;
- to align the interests of the Eligible Person through the Proposed SIS to focus on long-term financial performance and the shareholders’ value enhancement via equity participation;
- to create a sense of belonging and ownership amongst the Eligible Person as they will be able to participate directly in the future growth of the Group;
- to serve as an alternative form of employee remuneration which does not result in cash outflow for the Group but instead allows for fund-raising upon exercise of the SIS Options by the Eligible Person; and
- to attract and retain high calibre Eligible Person, hence ensuring that the loss of key personnel is kept to a minimum level.
Looking forward, ongoing economic and fiscal uncertainties, in the markets both at Malaysia and overseas, are expected to make for more challenging operating conditions but we will continue to deliver and sustain long-term growth as we remain committed to all our stakeholders.
On behalf of the Management, I would also like to thank the Board of Directors, our shareholders, stakeholders and business associates for their continued support and belief in our strategies and plans to bring the Group to greater heights.