CAHYA MATA SARAWAK ANNUAL REPORT 2016

A N N U A L R E P O R T 2 0 1 6 Section 03 P E R F O RMA N C E 2 0 1 6 31 Cahya Mata Sarawak Berhad KKB’s associate, OceanMight Sdn Bhd (OMSB) has been licensed by PETRONAS as anApproved Service Provider to undertake major onshore fabrication for offshore facilities and related works. In 2016, OMSB secured another project from Repsol Oil & Gas Malaysia Limited for Engineering, Procurement and Construction (EPC) works on the Bunga Pakma Wellhead Riser following a major project awarded in 2015 for EPC works relating to the wellhead platforms for the Kinabalu Redevelopment Project. Both projects are scheduled for completion by mid-2017. The slump in crude oil prices globally has inevitably affected oil and gas producing countries, including Malaysia. The capital expenditure cut and deferment of most field developments by PETRONAS has resulted in the slowdown on both the upstream and downstream fronts. OMSB is undertaking several measures, including strengthening its operational efficiencies, to remain resilient amidst this challenging period. In FY 2016, KKB recorded a net loss of RM5.74 million (FY 2015: PAT of RM29.10 million) on the back of lower consolidated revenue of RM103.11 million (FY 2015: RM127.91 million). Notwithstanding this, the sound track record of the KKB Group, its experienced and prudent management team, coupled with its strong cash position, will enable the Group to steady itself and pursue new business opportunities. Moving forward, the KKB Group of Companies will focus their efforts on increasing their order book amidst a highly competitive market environment. Even as KKB continues to win oil and gas fabrication orders despite the industry slowdown, we remain confident and supportive of KKB’s future long-term potential. CMS OPUS CURRENT FUNDS UNDER MANAGEMENT (FUM) OF RM 291.00 million CMS EDUCATION SDN BHD The Group continues to be involved in the development of our nation’s future leaders through our subsidiary CMS Education Sdn Bhd which owns and operates the Tunku Putra School situated on an 18.51-acre campus in Kuching’s Petra Jaya. The Tunku Putra School first opened its doors to students in January 1997 and today provides kindergarten, primary and secondary-level classes for national and international streams. Classes at the School are purposefully kept small, ensuring students have the assurance of quality attention. At the same time, a high standard of teaching by specialist expatriate and Malaysian teachers coupled with a wide range of sporting and extracurricular activities, ensure students reap the benefits of a holistic education. Students who would benefit from additional English tuition are offered English as a Second Language. The School’s National Public Examination results (UPSR and SPM) match the best Malaysia has to offer and its Cambridge IGCSE results are in the top echelon worldwide. TunkuPutraSchool continues toplay a key roleas a strategic asset that is contributing towards the State’s development by ensuring employees of overseas investors working in Sarawak, as well as local parents, have access to a high standard of international schooling for their children. In FY 2016, Tunku Putra generated gross revenue of RM9.59 million with 632 students enrolled at the end of the academic year. During the year, there were 133 new applications, comparable to the number of the previous year. CMS OPUS PRIVATE EQUITY SDN BHD CMS Opus Private Equity Sdn Bhd (CMS Opus) is a private equity firm whose main objective is to achieve long-term capital gains through investments in unlisted emerging growth companies in Malaysia and the ASEAN region. Since its inception in 2006, CMS Opus has grown and established a name for itself in Malaysia’s private equity industry. The Company, with its current Funds under Management (FUM) of RM291.00 million, is one of a few private equity firms that have adopted Shariah-compliant investment principles for some of its funds. For FY 2016, CMS Opus successfully closed two transactions involving companies in the consumer segment. It also entered into an exit agreement with one of its investee companies in the logistics sector that will see a return of 14.1% IRR representing a money multiple return of 1.51 times. From these proceeds, the funds under management by CMS Opus declared returns on capital and a gain amounting to RM30,000,010.00 to its investors. In addition, one of its investee companies successfully received approval for an Initial Public Offering (IPO) listing by the Securities Commission. The IPO took place in the first quarter of 2017 and was one of the largest Malaysian IPOs over the past 18 months. STRATEGIC INVESTMENTS – OTHERS MANAGement DISCUSSION AND ANALYSIS