Investor Relations

Summary of 48th AGM

Summary of the key matters discussed at the 48th Annual General Meeting (“AGM”) of PPB Group Berhad (“PPB” or the “Company”) held at Sabah Room, B2 Level, Shangri-La Hotel Kuala Lumpur, 11 Jalan Sultan Ismail, 50250 Kuala Lumpur on Tuesday, 9 May 2017 at 10.00 am.

POLL VOTING

The Chairman informed the meeting that voting on all the resolutions set out in the notice of the 48th AGM would be carried out by poll pursuant to the Bursa Securities Listing Requirements. Voting on all the resolutions tabled at the meeting was subsequently conducted on completion of the discussion of the agenda items. Tricor Investor & Issuance House Sdn Bhd (“Tricor”) was the poll administrator to conduct the electronic voting process, and Asia Securities Sdn Bhd acted as scrutineer to validate the votes cast.
DIRECTORS’ REPORT AND AUDITED FINANCIAL STATEMENTS

PPB had received a letter dated 8 May 2017 from the Minority Shareholder Watchdog Group (“MSWG”) containing several questions on the Group’s operations, and had replied to MSWG in a letter dated 9 May 2017. The Chief Financial Officer, Ms Leong Choy Ying, read out MSWG’s questions and the Company’s replies for the benefit of shareholders present. PPB’s replies to MSWG’s questions are set out in Annexure A.

The Chairman also invited questions from the floor on the Company’s replies to MSWG, as well as on the financial statements and group’s businesses. A number of questions raised by the members were dealt with by the Chairman and management.

The audited financial statements for financial year ended (“FYE”) 31 December 2016 were tabled at the AGM pursuant to Section 340(1)(a) of the Companies Act 2016, and this agenda item was not required to be put to vote. The Chairman declared the Company’s audited financial statements for FYE 2016 properly laid before the meeting.
FINAL DIVIDEND

The Directors had recommended a final single tier dividend of 17 sen per share for FYE 31 December 2016 for shareholders’ approval. Together with the interim single tier dividend of 8 sen per share already paid, the total dividend declared/proposed for FYE 2016 would be 25 sen per share.
DIRECTORS’ FEES AND BENEFITS

4.1 Directors’ fees

Directors’ fees were last revised for FYE 2015. The Board had recommended that the fees payable to non-salaried Directors remain unchanged for FYE 2016, except for the proposed payment of a fee of RM500,000/- to the Chairman of the Board, who had ceased to receive a monthly salary and other emoluments since 2016. The total fees payable to non-salaried Directors who served on the Board and various committees in 2016 would amount to RM880,000/- compared to RM375,000/- for FYE 2015.

4.2 Directors’ benefits

The benefits payable to non-salaried Directors comprise allowances and benefits-in-kind. The estimated value for the period from 31 January 2017 to 31 May 2018 is RM242,470/-.
RE-ELECTION/ELECTION OF DIRECTORS

The following Directors sought re-election/election at the AGM :
1. Mr Lim Soon Huat and En Ahmad Riza bin Basir who retired by rotation; and
2. The Chairman, Tan Sri Datuk Oh Siew Nam, who was re-appointed at the previous AGM in 2016 and would cease to hold office at the conclusion of the 48th AGM.
RE-APPOINTMENT OF AUDITORS

Mazars PLT, the retiring auditors had indicated their willingness to be re-appointed and the Audit Committee had recommended their re-appointment.

SPECIAL BUSINESS
AUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO THE COMPANIES ACT 2016

Shareholders’ approval was sought to authorise the Directors to allot and issue shares not exceeding 10% of the Company’s issued shares to avoid any delay and cost of convening general meetings should the Company need to issue new shares during the year.
SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

Shareholders’ approval was sought for a proposed mandate for the PPB group to enter into recurrent related party transactions of a revenue or trading nature with the following entities :
1. PGEO Group Sdn Bhd (“PGEO”) and/or its connected persons; and
2. Kuok Brothers Sdn Berhad (“KBSB”) and/or its connected persons.
The above related parties and their connected persons would abstain from voting on the respective resolutions.
RENEWAL OF AUTHORITY FOR SHARE BUY-BACK

Shareholders’ approval was sought for the renewal of the authority for the Proposed Share Buy-back to enable the Company to purchase its own ordinary shares, up to a maximum of 10% of the issued shares of the Company.
OTHER BUSINESS

The Company did not receive notice of any other business of an annual general meeting.
VOTING ON RESOLUTIONS
1. Registration of shareholders/proxy holders for voting was closed at 11.20 am, and the meeting was adjourned at 11.30 am for the commencement of the voting process.
2. The Chairman called the meeting to order at 11.50 am for the declaration of the voting results provided by the poll administrator and verified by the scrutineers. Based on the results of the voting set out in Annexure B to this summary, the Chairman declared that all the resolutions tabled and put to vote at the 48th AGM of the Company were passed.

Annexure A – PPB’s replies to MSWG’s questions

Summary of key matters discussed at the 48th Annual General Meeting of PPB Group Berhad held on 9 May 2017

PPB’S REPLIES TO MSWG’S QUESTIONS

Strategic and Financial Matters

As stated in the Chairman’s statement, the global economic slowdown coupled with the weaker Ringgit and commodity prices had a significant impact on consumer sentiment and consumption generally. However, the Group’s established leading positions in various segments, especially Grains & Agribusiness, Consumer Products and Film Exhibition & Distribution, have helped to cushion the impact.

What are the prospects for the abovementioned segments in FY2017?
Answer

The prospects of the abovementioned segments in FY2017are covered under the "Group Outlook and Prospects for 2017" section in the Managing Director's Review on pages 27 and 28 of the 2016 Annual Report.
With the external environment likely to remain uncertain, what steps have been taken by the Board to mitigate any potential risks?
Answer

Grains & agribusiness

We continue to strengthen the Group’s operations with strong management and industry experience. We are expanding our flour milling capacities with the construction of two new flour mills in Johor and Vietnam which are expected to improve economies of scale, operational efficiency and increase market share of our leading brands. Livestock Farming will continue to improve farm productivity and quality of day-old-chicks and eggs, and strengthen their infectious disease surveillance and bio-security management.

Consumer products

We are committed to produce quality products, and continue to innovate and introduce new bakery products to cater to consumer demand and further expand market share. Our Consumer Products segment will also benefit from its extensive and reliable distribution network and execution capabilities.

Film exhibition & distribution

We will focus on strategic locations and under-screened markets for local expansion, and enhance our regional presence in Vietnam and Cambodia with the opening of new cinemas to provide profit growth. In addition, we will continue to invest in innovation and cinematic technology to provide a quality cinema experience.

Grains & agribusiness
1. As reported in the Managing Director’s review, the Group has a total flour milling capacity of 18,820 mt wheat/day. What is the current utilisation rate of the milling capacity and what is the targeted utilisation rate?
  Answer
  
  The capacity utilisation rate differs from mill to mill; on average, most of our flour mills achieve more than 70% capacity utilisation. The targeted utilisation rate would be 90% before any further capacity expansion is considered.
2. Please brief shareholders on the efforts taken to improve farm productivity, and quality of day-old-chicks and eggs as well as strengthening its bio-security management.
  Answer
  
  Farm productivity can be achieved by improving farm layout and design of chicken houses, as well as replacement of worn out and aged parts and equipment. To ensure good quality of day-old-chicks and eggs, feed quality is the most important factor not to be compromised at any time, besides good flock health and husbandry programme. The farms have their individual bio-security procedures in place and will continue to ensure their enforcement.
Consumer products
Despite recording a year-on-year growth in revenue, the segment showed a slight decline in bottom-line result from RM25.4 million in FY2015 to RM22 million in FY2016.

What were the reasons for the decline in the bottom-line result? Does the Board foresee any potential growth in the bottom-line result for FY2017?

Answer

The slight decline in the bottom-line result was due to higher operating expenditure on the back of heightened competition and sluggish consumer market, coupled with lower sales of higher profit margin products.

For FY2017, we expect competition to continue to be intense, and most fast-moving consumer products (FMCG) companies would continue to face a margin squeeze. We do not foresee significant growth in the bottom-line result.
Film exhibition & distribution
How much has been budgeted for the investment in new technologies, innovative services, and upgrades of facilities for Golden Screen Cinemas Sdn Bhd to meet consumers’ expectations? Please provide the breakdown of the expenditure.

Answer

About RM25 million has been budgeted for investment in new technologies and innovative services, which include DBox motion seats, Atmos surround sound, GSC Maxx and THX halls, as well as IT enhancements for ticketing services. Upgrading of facilities at existing cinemas is budgeted to cost RM12 million, which includes investment of about RM4.7 million in new cinematic technologies.
Environment engineering, waste management & utilities
The Group currently pursuing prospective projects valued at approximately RM600 million in the water and sewage industries in Malaysia. What is the progress and prospect for the Group to secure some of the projects? Who are the main competitors for these projects?

Answer

We have secured two projects in 1Q2017 with a total contract sum of about RM50 million. On other prospective projects, we expect the tendering process to take place in the remaining months of 2017 and will endeavour to secure a sizable portion. Our main competitors are mainly players in the water and sewage industries in Malaysia.
Property investment & development
1. Amidst the weak property market, please share the Group’s plans for property investment and development in the next few years.
  Answer
  
  Property investment
  
  There are various ongoing marketing events at Cheras Leisure Mall, the Whiteaways Arcade as well as New World Park to promote them as landmark destinations for retail and food & beverage venues to attract customers and increase patronage. Various incentive programmes have also been instituted to retain existing tenants and secure new ones.
  
  Property development
  
  In 2017 and 2018, the group will focus on the development of the Southern Marina Development project in Puteri Harbour in which the group has equity interest of 28%, and the provision of management services.
  
  Whilst management has decided to defer the proposed redevelopment of New World Park in view of present market conditions in Penang, we are planning an affordable housing project in the state. We also look forward to the launch of a new mixed development in Taman Megah, Petaling Jaya which is centrally located in a well-established neighbourhood.
  
  The Group is looking for opportunities to secure additional land bank for future development.
2. What is the latest occupancy rate for Cheras Plaza and Whiteaways Arcade, and when would the renovation work of New World Park expect to be completed?
  Answer
  
  As at 31 March 2017, the occupancy rate of Cheras Plaza was 82% while the Whiteaways Arcade was 57% tenant-occupied, with 23% of the lettable area being managed as an art space. The New World Park renovation is expected to be completed by October 2017.
3. When would the link bridge connecting the mall to the MRT be completed? What measures have been taken to improve the business activities at the mall and with the completion of the link what would be the impact to the business activities?
  Answer
  
  The link bridge connecting Cheras Leisure Mall to the MRT station is expected to be opened by the 1st quarter of 2018. There are ongoing promotional events to create awareness of our refurbishment and link construction. With the completion of the link bridge, footfall to our mall is expected to increase.
Corporate Governance Matters

Under the Resolution 3, the Group is seeking shareholders’ approval for the payment of Directors’ benefits for the period from 31 January 2017 to 31 May 2018. The benefits comprise allowances and benefits-in-kind payable to the non-salaried Directors, of which the estimated value for the period from 31 January 2017 to 31 May 2018 is RM242,470.

Please provide the breakdown of the benefits payable the non-salaried Directors.

Answer

The breakdown of the estimated amount/value of benefits payable to non-salaried directors for the 17-month period from 31 January 2017 to 31 May 2018 is as follows :

RM

1. Meeting allowances 177,450

2. Car and driver, telephone and internet services (for chairman) 43,706

3. Insurance premiums 21,314

Total estimated amound/value 242,470

9 May 2017

	RM
1. Meeting allowances	177,450
2. Car and driver, telephone and internet services (for chairman)	43,706
3. Insurance premiums	21,314
Total estimated amound/value	242,470

Annexure B – Results of poll voting

Summary of key matters discussed at the 48th Annual General Meeting of PPB Group Berhad held on 9 May 2017

Resolution No.	Subject	Votes for		Votes against		Total votes
Resolution No.	Subject	No. of shares	%	No. of shares	%	No.of shares	%
1	To approve the payment of a final single tier dividend.	882,950,464	100,0000	0	0.0000	882,950,464	100.0000
2	To approve an increase in Directors' fees.	882,829,298	99.9999	500	0.0001	882,829,798	100.0000
3	To approve the payment of benefits to Directors.	882,829,298	99.9999	500	0.0001	882,829,798	100.0000
4	To re-elect Mr Lim Soon Huat as a Director.	873,404,657	99.2530	6,573,707	0.7470	879,978,364	100.0000
5	To re-elect Encik Ahmad Riza bin Basir as a Director.	873,502,370	99.2641	6,475,994	0.7359	879,978,364	100.0000
6	To elect Tan Sri Datuk Oh Siew Nam as a Director.	757,620,589	97.7279	17,614,114	2.2721	775,234,703	100.0000
7	To re-appoint Mazars PLT as Auditors of the Company.	882,892,864	99.9935	57,600	0.0065	882,950,464	100.0000
8	To authorise the Directors to allot and issue shares.	878,616,763	99.5092	4,333,601	0.4908	882,950,364	100.0000
9	To approve a shareholders’ mandate for recurrent related party transactions of a revenue or trading nature (“RRPT”) with persons connected with PGEO Group Sdn Bhd.	882,950,464	100.0000	0	0.0000	882,950,464	100.0000
10	To approve a shareholders’ mandate for RRPTs with persons connected with Kuok Brothers Sdn Berhad.	281,151,514	100.0000	0	0.0000	281,151,514	100.0000
11	To approve the Proposed Share Buy-back.	881,920,032	100.0000	0	0.0000	881,920,032	100.0000

9 May 2017

Summary of 48th AGM

Annexure A – PPB’s replies to MSWG’s questions

Annexure B – Results of poll voting

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