2019 UEM Edgenta Annual Report

34 Chairman’s Statement Chairman’s Statement These included the productisation of existing technology platforms which we have developed over the years as well as the development of new digital solutions, for which we have made progress in 2019, as highlighted in our MD/CEO’s Statement on pages 36 and 39 of this Report. FOCUSED ON VALUE CREATION Our Edgenta of the Future vision is also anchored on maintaining the positive trajectory of our financial performance. In addition 35 UEM Edgenta Berhad MESSAGE FROM OUR LEADERSHIP STRATEGIC FOCUS OPERATIONAL REVIEW SUSTAINABILITY EFFORTS CORPORATE GOVERNANCE INTRODUCTION FINANCIAL REVIEW ADDITIONAL INFORMATION UEM EDGENTA AT A GLANCE to our commendable financial results recorded in FY2019, our shares demonstrated its value as a defensive stock and in delivering yield. On 30 September 2019, our shares reached a high of RM3.52 for the year. Over the years, we have performed and improved our performance to provide consistent shareholder returns. In FY2019, we registered basic Earnings Per Share (“EPS”) of 21.9 sen and declared a dividend of 14.0 sen for FY2019, representing a 64% dividend payout ratio. This is in line with our revised dividend policy to distribute between 50% and 80% of Profit After Tax and Non-Controlling Interests (“PATANCI”), which we announced in 2018. For FY2019, the resulting dividend yield of 5.4% based on share price as at 26 February 2020 and since FY2014, we have distributed more than RM850 million in dividends. Over the past five years (1 January 2015 to 28 February 2020), our Total Shareholder Returns have exceeded the FBM KLCI by approximately 44.0%. This value is testament to the initial underlying rationale of unlocking the value from the merger of Faber Group Berhad (“Faber”), Projek Penyelenggaraan Lebuhraya Berhad (“PROPEL”) and Opus Group Berhad (“Opus”) in 2014, which formed the basis of our existence as UEM Edgenta today. Since then, we have demonstrated our position as a trusted partner which provides value-added solutions that are fit-for-purpose and relevant to our clients’ needs, paving the way for the resilience and sustainability of our business. Earnings Per Share 21.9 sen Dividend Payout Ratio 64 % Total Shareholder Returns 44.0 % have exceeded the FBM KLCI by Our efforts and approach have also received continued acknowledgement through multiple awards. For further information on our awards and recognition for FY2019, I invite you to read the Key Highlights section on pages 16 - 17 of this Report. CORPORATE CITIZENRY As a company, we have identified three core values which will shape our identity going forward: Purpose Driven, Powered by Technology and Sustainability. Please refer to the Group Strategy section on pages 47 - 48 of this Report. As one of our core values, we have identified Sustainability as a hallmark of industry leadership. This will be fundamental in driving business practices and operations where performance will be measured on the achievement of the triple bottom-line of People, Planet and Profit. The first focus area comprises stakeholder capitalism, under which we identify as an organisation with a social purpose and a strong corporate social responsibility (“CSR”) base. This is key in reinforcing our industry leadership and corporate citizenry, as well as in moving towards our triple bottom-line targets. Second, we are committed to preventing harm to the environment. This will be achieved by putting in place our strategy on sustainability, as well as setting and measuring our targets towards being carbon neutral. Our investor relations positioning represents another focus area for sustainability. We view sustainability as a gateway which enables us to leverage on better access to capital, such as ‘green’ sukuk and exposure to a new class of investors such as Environmental, Social and Corporate Governance (“ESG”) funds. To achieve this, we will undertake measures to enhance our sustainability positioning, such as through improved reporting according to international standards, as with our continued journey into Integrated Reporting following the International Integrated Reporting Council’s (“IIRC”) framework. We will also look towards gaining admission into ESG indices such as the FTSE4Good Bursa Malaysia Index. Finally, to build our track record of sustainable businesses, we have also implemented several Energy Performance Contracts for Ministry of Health (“MoH”) Malaysia hospitals and several industrial clients to achieve energy efficiency and cost savings whilst decreasing carbon emissions. We will continue to drive sustainability and ingrain it as the way we conduct our business towards minimising climate change. COMMITTED TO GOVERNANCE As a responsible corporate citizen, we remain committed to upholding the requirements of good corporate governance. This has been underscored by our signing of the Corruption-Free Pledge with the Malaysian Anti-Corruption Commission (“MACC”) during our Integrity Day 2019. The pledge reinforces our Board and Management’s values and corruption-free stand, setting a clear leadership tone that we will not compromise on corruption. Furthermore, we have put in place the adequate procedures in preparation of the Guidelines on Adequate Procedures pursuant to subsection (5) of Section 17A of the Malaysian Anti-Corruption Commission Act 2009, which will take effect from 1 June 2020. We have firmly adopted the principles of the Guidelines to minimise the occurrence of corrupt practices relating to the Group’s business activities. For further information on our governance activities, please refer to our Corporate Governance Overview Statement and Statement on Risk Management and Internal Control on pages 102 - 117 and 119 – 129 of this Report. ENGAGING OUR STAKEHOLDERS Stakeholder engagement forms one component of our strategy and during the year, we hosted several engagements with the Government through Ministerial visits by the Ministers of Works and Energy, Science, Technology, Environment and Climate Change, as well as Deputy Ministers of Finance and Health to our headquarters and / or site operations, as well as visits held in conjunction with our sponsorship of local and international conferences and exhibitions. Three key events were the 26 th World Road Congress in Abu Dhabi, United Arab Emirates, the 10 th International Greentech & Eco Products Exhibition and Conference Malaysia (“IGEM 2019”) and the ASEAN Health Summit in Kuala Lumpur. Additionally, we continued to play our part in giving back to society through CSR programmes in collaboration with Pusat GENIUS@Pintar Negara, Universiti Kebangsaan Malaysia and various charities and schools. At the 2019/2020 CFA Institute Malaysia Research Challenge, an annual competition for university students to compete in the global arena, our Company participated as the subject company of research where members of our management addressed queries and guided students to assist with their preparation for the competition. Further details on our stakeholder engagement activities are available in our Key Relationships on pages 30 - 32 of this Report. MOVING FORWARD As an organisation with a strong focus on Health, Safety, Security and Environment (“HSSE”), we will march forth to champion our enhanced 2019 HSSE theme of “Comply” with “Comply with Quality” in 2020. Additionally, in the year ahead we will place emphasis on growing our presence as a technology-driven company anchored on the Edgenta Way, which sets the standards of how we approach our work towards achieving organisational and operational excellence. ACKNOWLEDGEMENTS On behalf of the Board of Directors, allow me to take this opportunity to express our sadness over the passing of Dr. Saman @ Saimy Ismail, an Independent Non-Executive Director and Chairman of Edgenta Mediserve Sdn Bhd, on 29 April 2019. Appointed on 9 May 2013, Allahyarham Dr. Saimy had been a key figure on our Board leading our Company with his expertise in the healthcare industry for the past six years. We mourn his loss and are indebted to him for his contributions. The Board would like to convey our special thanks to Dato’ Seri Amir Hamzah Azizan, who served as Non-Independent Non- Executive Chairman for three years until his retirement on 15 May 2019. As his successor, I am especially grateful for his role in steering UEM Edgenta to its position today. We would also like to welcome Dato’ Mohd Izani Ghani who was appointed on 22 October 2019 as Non -Independent Non-Executive Director. I am confident that his appointment will bring significant contributions to our Board’s effectiveness. Effective 21 April 2020, we will see the departure of Dato’ Azmir Merican from his role as our Managing Director/Chief Executive Officer. Dato’ Azmir has been a key figurehead in the growth of UEM Edgenta since the merger of Faber, PROPEL and Opus, paving the way for our Edgenta of the Future. He leaves behind a strong management team which is well-placed to execute strategies and plans towards realising our vision for the Company, and we thank him for his valuable contributions and wish him the best in his future endeavours. I wish to thank my colleagues on the Board of Directors, as well as our major shareholders, UEM Group Berhad and Khazanah Nasional Berhad, for their cooperation and guidance during the start of my tenure of Chairman. I am also grateful to our clients, investors, regulatory authorities and Government agencies, members of the media and our supply chain partners for their continued support. Last but not least, I would like to extend my appreciation to all employees of UEM Edgenta who are instrumental in driving our business and operations. Finally, I would like to express my gratitude to you, our valued shareholders, for your continued trust and belief in us. I am confident that with your support and the plans we have put in place, UEM Edgenta will continue to harness and deliver value for all our stakeholders. TAN SRI DR. AZMIL KHALID Independent Non-Executive Chairman In the year ahead, we will place emphasis on growing our presence as a technology-driven company anchored on the Edgenta Way. Annual Report 2019