Chairman's Letter to Shareholders


The year 2017 saw a recovery in the global economy, supported by improved investment conditions, higher productivity in manufacturing activity and uptick in world merchandise trade. These improvements were backed by benign financial market conditions, accommodative policies, and rebound in commodity prices. However, uncertainty surrounding Brexit and US-China trade tensions could unnerve business confidence and investment activity.

On the other hand, ASEAN economies recorded a robust growth, mainly driven by strong external demand, healthy labour markets and accommodative monetary policies. Back home, Gross Domestic Product ("GDP") exceeded expectations and accelerated to 5.9% (2016: 4.2%), outperforming World Bank's revised forecast of 5.2% for 2017. This result is mainly driven by strong private consumption, healthy manufacturing production and firmer exports.

As the Economic Transformation Programme brings us ever closer to be a developed nation, Malaysia is setting its sights on the next plateau as it prepares for the National Transformation 2050. Following the 14th General Election, the country's forward growth will endure as we sustain our efforts to meet the demand of the underserved market.


Competing in a challenging economic scenario, the Group ended FYE 2018 commendably well, recording a higher revenue of RM245.9 million, representing an improvement of 10.1% from the previous year. The main contributor was the increase in interest and fee income in the consumer financing segment, which was supported by the expanded loan base to RM1.6 billion with 8.0% growth as compared to FYE 2017.

Correspondingly, the Group registered a double-digit growth in its profit after tax ("PAT") to RM88.7 million in FYE 2018 from RM78.9 million. This translates to a higher earnings per share of 26.03 sen and return on average equity of 18.5%.


In addition to the three awards won in the previous year, the Sukuk Murabahah AssetBacked Securitisation Programme of up to RM900.0 million ("Sukuk Programme") established via Al Dzahab Assets Berhad ("ADA") bagged another award namely, "Best Asset-Backed Securitisation Deal of the Year 2017 in Southeast Asia" by Alpha Southeast Asia Deal & Solution Awards 2017 on 13 February 2018.

The Sukuk Programme has also been fully issued through five separate tranches in June 2016, September 2016, March 2017, September 2017 and March 2018. The Group is currently establishing a new programme to continue to fund the Group's business.

"Best Asset-Backed Securitisation Deal of the Year 2017 in Southeast Asia"
award presented by Alpha Southeast Asia Deal & Solution Awards 2017.


The Group remains committed to transparency and continue to adopt good corporate governance practices across all business divisions. The investor relations team ("IR team") continues to ensure the latest announcements on business activities, financial results and corporate developments are accessible on the Group's website (

The Group also values the communication with stakeholders, investors and analysts. The IR team organises briefings with analysts and fund managers on a regular basis, while roadshows with institutional/prospective investors are held occasionally, to ensure the Group's aspirations, latest operational and financial developments are communicated in a timely manner.

The Group is presently covered by analysts from Maybank Investment Bank Research and KAF-Seagroatt & Campbell Securities Sdn Bhd since September 2016 and January 2018 respectively.


Sustainability has always been a part of the Group's business practices. This year, the Group has completed its first Sustainability Statement to report on the material sustainability issues of the Group and stakeholders, and also complying with Bursa Malaysia Securities Berhad Main Market Listing Requirements relating to Sustainability Reporting.

The full Sustainability Statement can be found on pages 20 to 24 of this Annual Report.


The Group on 30 January 2018 paid an interim dividend of 3.0 sen per share totalling RM10.3 million to reward shareholders for their unwavering support.

We continuously strive to balance the Group's funds for our business requirements, financial obligations as well as rewarding shareholders. In view of the above, on behalf of the Board of Directors, I am pleased to propose a final dividend of 4.0 sen per share for FYE 2018 with an estimated payout of RM13.7 million, to be approved by shareholders at the 64th Annual General Meeting. This translates to approximately RM23.9 million, representing a total payout ratio of 27.0% in FYE 2018.

Moving forward, as part of our initiative to promote better transparency and to provide shareholders as well as investors with more consistent returns, the Group will be guided by declaring dividends between the range of 20.0% to 40.0% of PAT from FYE 2019 onwards.


With the recovery in global and local economy in 2017, the growth momentum is expected to be sustained in 2018 and Malaysia's GDP growth is forecasted to be 5.2% in 2018 by the World Bank. However, the loans growth in the Malaysian financing sector is anticipated to be moderate due to the anticipation of hike in the Overnight Policy Rate and higher provision loan losses after the implementation of the Malaysian Financial Reporting Standards 9.

Nonetheless, the Group remains focused as a niche market player and will continue to strive in delivering sustainable returns to our shareholders. Bringing in quality loans remain as our priority as we periodically assess our products and credit scoring model in order to remain competitive and relevant in a dynamic market environment.

In addition, the Group continues to promote process simplification and technological enhancements to improve operational efficiencies, as we partake in the Fourth Industrial Revolution to embrace a digital economy. Hence, the Group welcomes responsible innovation and continues to explore the digital space to add value to the Group as a whole.


I would like to extend my gratitude to Y. Bhg. Tan Sri Mohd Zaman Khan @ Hassan bin Rahim Khan and Y. Bhg. Dato' Che Md Nawawi bin Ismail who have resigned from the Board as Independent Directors on 16 April 2018, for their invaluable service and contribution to the Group. It has been an honour to have them with us for more than 12 years.

On behalf of the Board, I wish to take this opportunity to express our appreciation and thanks to all of our stakeholders, including shareholders and customers for your continued support. I would also like to thank the management team as well as our employees for their tireless efforts and commitment in ensuring we consistently deliver good results amidst the challenges faced.

Last but not least, I also thank the regulatory authorities for their counsel and my fellow Board members for their trust and vote of confidence.

Shahman Azman