2018 UEM Edgenta Annual Report

As part of UEM Edgenta’s ongoing transformation strategy, numerous initiatives were introduced in FY2018. We embraced Khazanah’s Trending, Innovation, Disruption, Entrepreneurship (“TIDE”) programme by setting up our own effort called Innovation Garage, which provided the thrust for our employees to identify new solutions to spur operational excellence and improve safety for our employees. Several initiatives which stemmed from the Innovation Garage have already been operationalised and produced results, with others in the pipeline for FY2019. During the year under review, approximately RM12 million was invested in Research & Development, Technology and Innovation. Noteworthy introductions include the commencement of the Pavement Research Centre (“PRC”) to develop new and better products for road pavements, while the introduction of the MULAG Grass Cutter for grass cutting in our highway maintenance operations will positively impact operational efficiency and the safety of our people at the frontline. As part of the development and adoption of technology solutions to simplify and automate processes throughout our operations, we have also rolled out the Road Asset Management Systems (“RAMS”) for our personnel in the Infrastructure Services division. RAMS allows for crucial decision making and prioritising stretches of the highways or roads which require repairs and maintenance; in a nutshell, doing the right maintenance works at the right locations. The technology is also used to create budgets and maximise economic returns of the investments made for the highway and road network. Improving our business is not limited to just our operations but also extends to the development of our workforce. We intend to create a vibrant and open HR ecosystem by continuously building the right capabilities, mindset and culture to support organisational objectives. In FY2018, we invested RM6.7 million in the training and development of our people, for the enhancement of their functional, technical and leadership competencies. The abovementioned initiatives were established to streamline our operations and create innovative and smart solutions for our customers. Additionally, they provide a boost to our credentials and a demonstration of our capabilities in our quest to grow the Company. STAKEHOLDER ENGAGEMENT In the course of our business, we deal with various stakeholders which include our vast network of supply chain partners, regulatory authorities and Government agencies and members of the media. Engaging with them at the highest level is important as the need to understand their expectations is a critical component of our growth strategy. Our approach also creates a good working mechanism, enabling us to improve the overall stakeholders’ environment by design. SOLID RETURNS TO SHAREHOLDERS 17.8 sen Basic EPS 14 sen FY2018 Dividend representing 79% payout ratio * Based on share price of RM2.72 as at 31 December 2018 Total Shareholder Returns 24.1% (2 January 2018 – 31 December 2018) Dividend yield 5.1% * 50% - 80% of PATANCI Revised dividend policy payout ratio Our strategic business model is heavily reliant on operational efficiency and calls for innovative solutions to sustain our growth. We look for ways to integrate technology into our operations and innovate the way we work to ensure continuous improvement in the six (6) strategic focus areas. Financial Review Stakeholder Information AGM Information 65 Governance Review of Sustainability Activities