CAHYA MATA SARAWAK BERHAD - Fundamental - AR - 31-12-2008.pdf¢  CAHYA MATA SARAWAK BERHAD 21076-T Annual

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  • A nnual Report 2008

    CA H


    R AW

    A K BER

    H A

    D 21076-T

    Annual Repor t 2008

    CAHYA MATA SARAWAK BERHAD 21076-T Wisma Mahmud, Jalan Sungai Sarawak 93100 Kuching, Sarawak, Malaysia

    T +60 82 238 888 F +60 82 333 828

  • Cover Rationale

    The cover of CMS' Annual Report this year features CMS Cement's newest product, Cemplast masonry cement, being loaded on a truck at the Bintulu plant. Such is a daily scene at CMS Cement's Kuching and Bintulu plants where trucks are loaded early in the morning with bags of Ordinary Portland Cement (OPC) and Cemplast ready to be transported to building materials dealers and on to customers at construction sites.

    CMS Cement celebrated its 30th anniversary of production in 2008 as Sarawak's Partner of Progress.

    It has been a long journey to get to this milestone; in meeting our obligation to consistently supply quality cement to customers throughout Sarawak both in urban centres and remote towns and villages. Starting as a cement grinding operation in Kuching with an annual production capacity of 500,000 tonnes in 1978, Cement Manufacturers Sarawak (as it was known then) has worked hard. Thirty years later, a name change (to CMS Cement), the addition of a second grinding plant in Bintulu, the securing of our raw materials supply, the building of a strong and wide distribution network across Sarawak, hundreds of projects and thousands of customers later, CMS Cement is proud to cement Sarawak's dreams for development to become a reality.

    Sales in 1978 registered 71,000 tonnes. Today, CMS Cement’s sales exceed a million tonnes each year.

    Going forward, CMS Cement endeavours to do its best to continue cementing its reputation as Sarawak's Partner of Progress, to become a better cement producer, and to always be our customer's choice.

    The same values apply for the entire CMS group as it aspires to fulfill its Vision to be the Pride of Sarawak.

  • Welcome 2008 was a good year for your company, Cahya Mata Sarawak. Through the combined efforts of its 1,400 employees, CMS group reported a pre-tax profit of RM150.57 million for the twelve months ended 31 December 2008 and a profit after tax and minority interests of RM95.77 million. Our continuing operations did well and reported total revenues of RM893.03 million and a pre-tax profit of RM139.49 million, a four-fold improvement from the previous year. The Group also made positive strides in improving internal processes, in enhancing corporate governance, in building a strong corporate culture and in helping the community around us.

    Shareholders, here is how your company did in 2008.

  • Contents

    002 Performance in 2008

    003 CMS Group Financial Highlights

    004 CMS at a Glance

    006 Corporate Information

    007 Group Corporate Structure

    008 Letter to Shareholders

    010 Looking Back at 2008

    016 Operations Review

    027 Sarawak Corridor of Renewable Energy (SCORE)

    028 Further Insight into CMS by

    Group Managing Director

    030 Human Capital

    032 Corporate Responsibility – CMS Doing Good

    036 Board of Directors

    039 Senior Management

    040 Financial Calendar 2008

    041 Statement of Corporate Governance

    048 Statement on Internal Control

    050 Group Audit Committee Report

    053 Additional Compliance Information

    054 Statement of Directors' Responsibility

    056 Financial Statements

    136 Analysis of Shareholdings

    139 List of Properties

    142 Group Directory

    144 Notice of Annual General Meeting

    146 Statement Accompanying Notice of

    Annual General Meeting

    Form of Proxy

    Per formance in 2008 • Revenue

    RM893.03 million • Profit before taxation from continuing operations

    RM139.49 million • Net profit attributable to equity holders

    RM95.77 million • Basic earning per share

    29.07 sen • Equity attributable to ordinary equity holders of the Company

    RM1,248.83 million

  • CMS Group Financial Highlights

    Restated 2004 2005* 2006* 2007 2008

    Revenue (RM'000) 1,020,344 5,196,614 6,210,644 2,552,466 893,033

    Profit before taxation (RM'000) 130,955 469,853 517,807 887,441 150,570

    Profit /(loss) attributable to equity holders 28,749 -117,987 6,865 388,166 95,770

    of the Company (RM'000)

    Weighted average no. of shares 329,306 329,446 329,446 329,446 329,446

    Basic earnings /(loss) per share (sen) 8.73 -35.81 2.08 117.82 29.07

    Gross dividends per share (sen) 5 5 5 15 5

    Total shareholders' funds (RM'000) 991,970 853,451 851,478 1,238,248 1,248,825

    Total assets (RM'000) 2,710,384 90,197,381 103,410,293 2,790,777 2,327,136

    Net tangible assets /(liabilities) per share (RM) 2.42 -0.63 -0.59 3.54 3.56

    Net assets per share (RM) 3.01 2.59 2.58 3.76 3.79

    Return on average shareholders' equity (%) 2.93 -13.85 0.81 37.15 7.70

    Return on total assets (after tax) (%) 1.06 -0.13 0.01 13.91 4.12

    Total borrowings (RM'000) 782,218 4,260,237 4,574,719 678,303 649,767

    Gearings (times) 0.79 4.99 5.37 0.55 0.52

    Current assets (RM'000) 751,601 71,479,903 81,459,806 2,021,426 890,595

    Current liabilities (RM'000) 772,065 84,661,323 98,049,742 664,731 509,145

    Current ratio (times) 0.97 0.84 0.83 3.04 1.75

    CMS share price Information (RM)

    • Low 1.44 0.88 0.88 1.44 1.02

    • High 2.38 1.63 1.58 3.20 2.48

    • Closing 1.50 0.93 1.46 2.29 1.14

    * RHB was deemed a subsidiary of UBG following the adoption of FRS 127 with effect from 1 January 2006 after taking into consideration the potential voting rights arising from the RHB ICULS that UBG held. The comparative figures for 2005 were restated accordingly.

  • Premix

    1 Cement CMS Cement, Sarawak's sole cement manufacturer, produces high quality Ordinary Portland Cement (OPC) at grinding plants in Kuching and Bintulu. With an annual production capacity of 1.75 million metric tonnes (MT), the Company meets customer demand from throughout Sarawak with an established distribution network. CMS Cement also produces masonry cement.

    2 Clinker Clinker, the main raw material of cement, is manufactured by CMS Clinker. Production capacity of CMS Clinker, East Malaysia's sole clinker producer, stands at 800,000 MT per annum.

    3 Concrete Products Pre-formed concrete products (square piles, bridge beams, culverts, cement sand bricks, kerbs) and pre-fabricated Industrialised Building System (IBS) concrete products are manufactured by CMS Concrete Products in Kuching.

    4 Stone Aggregates (granite, microtonalite, limestone) CMS Quarries and CMS Penkuari together are the largest aggregate producers in Sarawak, supplying 30% of the market.

    5 Premix CMS Premix and CMS Premix (Miri) are Sarawak's leading premix producers supplying high quality asphaltic concrete (premix) and bitumen emulsion for the construction of highways, flyovers and airport runways. The Group owns and operates its own bitumen emulsion plants.

    6 Steel Wires Drawn steel wires and wire mesh are produced by CMS Wires in Kuching.

    7 Steel Engineering & Fabrication CMS holds a 20% equity stake in Main Board-listed KKB Engineering Berhad which is principally involved in steel fabrication works, hot-dip galvanising, civil construction and the manufacture of LP gas cylinders, steel pipes and uPVC roofing / cladding sheets.

    8 Trading CMS Infra Trading is a leading supplier of water treatment chemicals, pipes and fittings, vehicle and equipment spare parts, construction materials, petroleum products and safety equipment for roads.

    Cahya Mata Sarawak (CMS) is a leading conglomerate listed on the Main Board of the Malaysian stock exchange, Bursa Malaysia. With most of its operations based in Sarawak, CMS is the biggest private sector player in the largest state in Malaysia. From humble beginnings in 1974 as a manufacturer of a single product, CMS' portfolio today spans construction materials, trading, construction, road maintenance, property development, financial services, technology and education.

    CMS at a Glance

    Key Products & Services Cement

    Stone Aggregates Concrete Products

    Steel Wires

    004 • Cahya Mata Sarawak Berhad • Annual Report 2008 •

  • 9 Construction PPES Works (Sarawak) undertakes civil engineering, building and utilities work, road construction and maintenance, bridges and water-related projects. PPES Works is 51% owned by CMS and 49% owned by Government agency, Sarawak Economic Development Corporation (SEDC). Other construction outfits within the Group are Putrajaya Perdana Berhad and water infrastructure specialist Loh & Loh Corporation Berhad. Both are member companies of UBG Berhad.

    10 Property Development Projek Bandar Samariang, a joint-venture between CMS and the Employees Provident Fund Board (EPF), is owner and developer of Bandar Baru Samariang, a 5,200 acre new riverine township in Kuching. The Kuching Isthmus, located to the east of Kuching city centre, is another 240 acre land bank being developed by CMS.

    11 Road Maintenance CMS Roads (a member company of UBG Berhad) maintains over 4,000 km of roads throughout Sarawak using an internationally recognised road management and maintenance system. Another 600 km of Federal roads in southern Sarawak are maintained by PPES Works.

    12 Unit Trust Funds CMS Trust Management's unit trust funds cater to the various risk appetites of investors. The Company also prov