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FIBON
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FIBON BERHAD
ANNUAL REPORT
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CONTENTS
Corporate Information
Profile of Directors
Chairman’s Statement
Group Structure
Financial Highlights
Audit Committee Report
Statement on Corporate Governance
Statement on Internal Control
Statement on Directors’ Responsibilities
Additional Compliance Information
Financial Statements
Analysis of Shareholdings
List of Property
Notice of Annual General Meeting
Enclosed : Proxy Form
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ANNUAL REPORT 2014
Corporate Information
1
BOARD OF DIRECTORS
Pang Chee Khiong
Executive Chairman
Pang Fok Seng
Managing Director
Lim Wai Kiew
Executive Director
Pang Nyuk Yin
Executive Director
Datuk Mohamad Saleh Bin Mohd Ghazali
Independent Non-Executive Director
Chong Peng Khang
Independent Non-Executive Director
Koh Chun Kiat
Independent Non-Executive Director
COMPANY SECRETARY
Noriah Binti Md Yusof (LS No. 0009298)
AUDITORS
Crowe Horwath (AF 1018)
52, Jalan Kota Laksamana 2/15,
Taman Kota Laksamana,
Seksyen 2, 75200 Melaka.
Tel: (606) 282 5995
Fax: (606) 283 6449
SHARE REGISTRAR
Symphony Share Registrars Sdn Bhd
(378993-D)
Level 6, Symphony House,
Block D13, Pusat Dagangan Dana 1,
Jalan PJU 1A/46,
47301 Petaling Jaya, Selangor.
Tel: (603) 7841 8000
Fax: (603) 7841 8151/8152
PRINCIPAL BANKERS
OCBC Bank (M) Berhad
AmBank (M) Berhad
United Overseas Bank (M) Berhad
HSBC Amanah Malaysia Berhad
REGISTERED OFFICE
31-04, Level 31, Menara Landmark,
No. 12, Jalan Ngee Heng,
80000 Johor Bahru, Johor Darul Takzim.
Tel: (607) 278 1338
Fax: (607) 223 9330
HEAD OFFICE
12A, Jalan 20, Taman Sri Kluang,
86000 Kluang, Johor Darul Takzim
Tel: (607) 773 6918
Fax: (607) 774 2025
Website: www.fibon.com.my
E-mail: [email protected]
STOCK EXCHANGE LISTING
Main Market of Bursa Malaysia
Securities Berhad
Stock Name: Fibon
Stock Code: 0149
Profile of Directors
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Pang Chee Khiong
Executive Chairman, Non-Independent
Mr Pang Chee Khiong, a Malaysian aged 50 is a Non-Independent Executive
Chairman since 25 March 2008. He has attended all four Board meetings held
during the financial year under review. He has more than 26 years of experience in
the industries such as plumbing, timber logging, construction and housing
development. He is the brother to Pang Fok Seng and Pang Nyuk Yin. He
maintains a clean record with regard to convictions for offences, other than traffic
offences, if any and he has no conflict of interest with the group.
Pang Fok Seng
Managing Director, Non-Independent
Mr Pang Fok Seng, a Malaysian aged 48 is a Non-Independent Managing Director
since 25 March 2008. He has attended all four Board meetings held during the
financial year under review. He has more than 20 years of experience in the
advanced polymer matrix fibre composite industry. He is the brother to Pang Chee
Khiong and Pang Nyuk Yin. He is the husband to Lim Wai Kiew. He maintains a
clean record with regard to convictions for offences, other than traffic offences, if
any and he has no conflict of interest with the group.
Pang Nyuk Yin
Executive Director, Non-Independent
Ms Pang Nyuk Yin, a Malaysian aged 54 is a Non-Independent Executive Director
since 9 April 2008. She has attended all four Board meetings held during the
financial year under review. She was in charge of production processes, sales,
purchases and general administration from 1990 to 2003 in a private company. She
is sister to Pang Fok Seng and Pang Chee Khiong. She maintains a clean record
with regard to convictions for offences, other than traffic offences, if any and she
has no conflict of interest with the group.
ANNUAL REPORT 2014
Profile of Directors cont’d
3
Lim Wai Kiew
Executive Director, Non-Independent
Ms Lim Wai Kiew, a Malaysian aged 48, is a Non-Independent Executive Director
since 9 April 2008. She has attended all four Board meetings held during the
financial year under review. She was a quantity surveyor in Singapore from 1990 to
1991. She was in charge of office management and administration in a private
company from 1992 to 2003. She is wife to Pang Fok Seng she maintains a clean
record with regard to convictions for offences, other than traffic offences, if any and
she has no conflict of interest with the group.
Datuk Mohamad Saleh Bin Mohd Ghazali
Independent Non-Executive
Datuk Mohamad Saleh Bin Mohd Ghazali, a Malaysian aged 70 is an Independent
Non-Executive Director and Chairman of Audit, Remuneration and Nomination
Committee. He is appointed as Director on 20 October 2008 and has attended all
four Board meetings held during the financial year under review. He graduated from
the University of Hawaii, United States with a Bachelor of Business Administration
and went on to obtain his Masters of Business Administration from Ohio University
in Athens, United States in 1972.
Datuk Mohamad Saleh began his career by serving the Fishery Development Authority of Malaysia as an
economist in 1972 and went on to lecture in Universiti Institut Teknologi Mara in 1973. Prior to retiring in
November 1999 he was the Executive Director/ Chief Executive Officer of Bank Industri Malaysia Berhad
(presently known as Bank Perusahaan Kecil & Sederhana Malaysia Berhad ) for eighteen years. His other
working experiences encompasses being a marketing executive in Tourist Development Corporation of Malaysia,
an assistant director in the Urban Development Authority, Malaysia and an assistant general manager in the
Armed Forces Provident Fund in its investment department.
He has no conflict of interest with the Group and has no family relationship with any director and/or major
shareholder of the Group. He maintains a clean record with regard to convictions for offences, other than traffic
offences, if any.
Profile of Directors cont’d
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Chong Peng Khang
Independent Non-Executive
Mr Chong Peng Khang, a Malaysian aged 34, is an Independent Non-Executive
Director and member of the Audit and Remuneration Committee for the Group. He
is appointed as Director on 20 October 2008 and has attended three out of four
Board meetings held during the financial year under review. He holds a first class
honours Bachelor of Accounting degree from Multimedia University, Malaysia. He is
a Chartered Accountant by profession as well as a fellow of the Association of
Chartered Certified Accountants (FCCA, United Kingdom) and also member of the
Malaysian Institute of Accountants (MIA).
He began his career as an auditor with Deloitte Kassim Chan and subsequently Ernst & Young, involving in audit
and business advisory of companies from various industries. His experience covers audit and assurance
engagements, corporate reporting and compliance, taxation and wide-ranging overseas exposures. He has
previously headed the accounting and finance division of a public listed company listed on the Main Market of
Bursa Malaysia Securities Berhad and responsible for the corporate finance, accounting, tax and cash flow
functions of the company and its subsidiaries. He is currently a Director of a chartered accounting firm. He is also
an independent non-executive director of another company listed on the Main Market of Bursa Malaysia
Securities Berhad. He has no conflict of interest with the Group and has no family relationship with any director
and/or major shareholder of the Group. He maintains a clean record with regard to convictions for offences, other
than traffic offences, if any.
Koh Chun Kiat
Independent Non-Executive
Koh Chun Kiat, a Malaysian aged 30, is an Independent Non-Executive Director
and member of the Audit and Nomination Committee. He is appointed as Director
on 14 November 2012 and has attended all four Board meetings held during the
financial year under review. He graduated with a Bachelor of Business majoring in
Accounting and Financial Management from La Trobe University in Australia.
He is a Chartered Accountant by profession as well as a member of the Malaysian
Institute of Accountants, CPA Australia and Chartered Tax Institute of Malaysia. He started his career as senior
associate with PricewaterhouseCoopers (PwC) from 2006 to 2008. He joined Sam Hoe Plantations Sdn Bhd in
2008 as an accountant and was promoted to senior accountant. His principal role was to supervise the financial
accounting section of the department and liaise with auditors and tax agents. Presently, he is a partner of two
audit firms. He is the Approved GST Tax Agent under GST Act, 2014 and Approved Company Auditor under
Companies Act, 1965 as well as Approved Tax Agent under Income Tax Act, 1967. He has no conflict of interest
with the Group and has no family relationship with any director and/or major shareholder of the Group. He
maintains a clean record with regard to convictions for offences, other than traffic offences, if any.
ANNUAL REPORT 2014
Chairman’s Statement
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On behalf of the Board of Directors of FIBON
Berhad, I am pleased to present the Annual Report
and Audited Financial Statements of the Group and
of the Company for the financial year ended 31 May
2014.
FINANCIAL PERFORMANCE
For the financial year under review, the Group
registered revenue of approximately RM 15.3
million, a decrease of 8.13% compared to the
preceding year. Profit after tax decrease from RM
4.9 million to RM 4.0 million. The decrease is mainly
due to decrease in sales of manufacturing goods.
The Group continues maintaining a set of healthy
and financially sound balance sheet with cash and
cash equivalents of approximately RM 22 million.
INDUSTRY OUTLOOK AND PROSPECTS
Global economic prospect in 2015 is expected to be
even more challenging for the year ahead against a
backdrop of ongoing political, economic and
financial uncertainties surrounding the Eurozone.
The manufacturing business remains challenging
and highly competitive, exacerbated by increasing
raw material costs and the impact of the minimum
wage policy implementation.
The Board will strive to remain resilient and
cautious in this challenging environment. We are
committed to a continuous improving in our
production and operational efficiencies, provision of
quality products and meeting customer’s delivery
deadlines with an aim to increase our market share
in this industry.
DIVIDENDS
The Board is pleased to recommend a proposed
single tier final dividend of 1.10 cents per ordinary
share for FYE 31 May 2014. The proposed dividend
is subject to Shareholders’ approval at the
forthcoming Annual General Meeting.
The total dividends payable for the FYE 31 May
2014 would be approximately amounting to
RM1.078 million, being a dividend payout ratio of
approximately 26.9% of PAT of RM 4.003 million.
CORPORATE GOVERNANCE
The Board of Directors of Fibon Berhad (“the
Board”) recognises that its primary responsibility is
to safeguard and promote the interests of the
shareholders and stakeholders and to enhance the
long-term value of the Company.
The Board is fully committed to ensure a high
standard of corporate governance is practiced
throughout the organisation as the Board is mindful
of the importance of accountabilities to the
shareholders and all stakeholders in building a
sustainable business.
The Group will continue to endeavour to comply
with all the key Principles and Best Practices of the
Malaysian Code on Corporate Governance in its
effort to observe high standards of transparency,
accountability and integrity.
APPRECIATION
On behalf of the Board of Directors, we wish to
thank the management and staffs of the Group for
their diligence and dedication to the Group. To our
valued shareholders and investors, we appreciate
and thank you for your continued support and trust.
To our valued customers, suppliers, bankers,
regulatory agencies and business associates, our
sincere gratitude for your support and partnership
and looking forward to your collaboration in the
coming years. Last but not least, thanks to our
dedicated Board members for your exemplary
service and advice to guide the Group forward.
Pang Chee Khiong
Chairman
Group Structure
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FIBON BERHAD
FIBON BERHAD, incorporated on 25 March 2008, Malaysia
HEXA ANALISA SDN BHD, acquired on 20 October 2008, Malaysia
FIBON UK LIMITED, acquired on 16 April 2009, United Kingdom
FIBON AUSTRALIA PTY LTD, incorporated on 14 July 2009, Australia
FIBON ELECTRIC (M) SDN BHD, acquired on 9 November 2010, Malaysia.
FIBON CAPITAL SDN BHD, acquired on 31 July 2013, Malaysia. (Previously known as Opes Management Sdn. Bhd.)
HEXA ANALISA
SDN BHD
FIBON AUSTRALIA
PTY LTD
FIBON UK
LIMITED
FIBON ELECTRIC
(M) SDN BHD
FIBON CAPITAL
SDN BHD
100 %
100 %
100 %
100 % 100 %
ANNUAL REPORT 2014
Financial Highlights
7
Financial year ended 31 May
2010 2011 2012 2013 2014
RM’000 RM’000 RM’000 RM’000 RM’000
Revenue 12,891 14,498 16,901 16,674 15,318
Profit before taxation (“PBT”) 5,010 5,945 6,226 6,666 5,372
Profit after taxation (“PAT”) 4,014 4,389 4,499 4,905 4,003
EARNINGS PER SHARE (“EPS”)
Gross EPS (sen)* 5.11 6.07 6.35 6.80 5.48
Net EPS (sen)* 4.10 4.48 4.59 5.01 4.09
* FYE 2010-2014: Computed based on the PBT and PAT for the relevant financial years under review and
divided by the issued and paid up share capital of 98,000,000 Shares for the financial year.
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Financial Highlights cont’d
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REVENUE AND PROFIT FROM ORDINARY ACTIVITY AFTER TAXATION (RM’000)
NET EPS (SEN)
ANNUAL REPORT 2014
Audit Committee Report for the financial year ended 31 May 2014
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THE AUDIT COMMITTEE
The present Audit Committee consists entirely of
Non-Executive Directors. The Company has
complied with the Listing Requirements of Bursa
Malaysia Securities Berhad, which require all of
Audit Committee members to be non-executive,
with a majority of them being independent directors.
In addition, two of the members of the Audit
Committee are also the member of Malaysian
Institute of Accountants (“MIA”) and the Chairman
of the Audit Committee is an Independent Director.
COMPOSITION AND MEETINGS
The composition of the Audit Committee and their
attendance at the 4 meetings held during the year
are as follows:
Name of Director Designation Attendance
Datuk Mohamad
Saleh Bin Mohd
Ghazali
Independent
Non-Executive
Director
Chairman 4/4
Chong Peng Khang Independent
Non-Executive
Director;
Member of the
MIA
Member 3/4
Koh Chun Kiat Independent
Non-Executive
Director;
Member of the
MIA
Member 4/4
TERMS OF REFERENCE
Objectives
The principal objective of the Audit Committee is to
assist the Board of Directors in discharging its
statutory duties and responsibilities relating to
accounting and reporting practices of the Group. In
addition, the Committee shall:
1. Ensure the timely and accurate preparation
and publication of financial statements of our
Group;
2. Review the adequacy of provisions against
contingencies and bad and/or doubtful debts;
3. Review internal control process and
procedures, scope, internal audit findings and
recommend actions to the Board;
4. Recommend and appoint external auditors
and deal with any issues arising from their
audit findings;
5. Review related party transactions that may
arise within our Group;
6. Approve fees relating to external auditors; and
7. Address any accountability issues that may
arise from time to time within our Group.
Composition
1. The Audit Committee shall be appointed by
the Board of Directors from amongst their
members and comprising not less than three
(3) members, of whom the majority shall be
the Independent Non-Executive directors.
2. At least one of the members of the Audit
Committee must be a member of the
Malaysian Institute of Accountants, or if he is
not a member of the Malaysian Institute of
Accountants, he must have at least three (3)
years of working experience or either must
have passed the examinations specified in
Part I of the schedule of Accountants Act
1967, or must be a member of one of the
associations of accountants specified in Part II
of the 1st Schedule of the Accountant Act,
1967.
3. The members of the Audit Committee shall
elect a chairman amongst themselves who
shall be an Independent Non-Executive
director. No alternate director shall be
appointed as a member of the Audit
Committee.
Audit Committee Report for the financial year ended 31 May 2014 cont’d
10
TERMS OF REFERENCE (Cont’d)
4. If a result that the number of members is
reduced below three (3), the Board of
Directors shall, within three (3) months of the
events, appoints such number of new
members as may be required to make the
minimum number of three (3) members.
Authority
1. The Audit Committee is authorised by the
Board of Directors and have the authority to
investigate any matter within its items of
reference and shall have unlimited access to
both the internal and external auditors, as well
as the employees of the Group. All employees
are directed to co-operate with any request
made by the Committee.
2. The Committee shall have unlimited access to
all information and documents relevant to its
activities, to the internal and external auditors,
and to senior management of the Group.
3. The Committee shall have the authority to
obtain independent legal or other professional
advices as it considers necessary.
4. The Committee shall be able to convene
meetings with the external auditors, excluding
the attendance of the executive members of
the Committee, whenever deemed necessary.
5. The Audit Committee shall have the power to
establish Sub-Audit Committee(s) to carry out
certain investigation on behalf of the
Committee in such manner, as the Committee
deem fit and necessary.
Meetings
The Committee is at liberty to determine the
frequency of the meetings at least four times
annually. The quorum shall consist of two (2)
members, where the majority of members present
must be independent directors.
Attendance of the Meetings
1. The external auditors may be invited to attend
to meetings. The Committee may invite any
person to be in attendance to assist in its
deliberations. The other directors and
employees attend any particular audit
committee meeting only at the audit
committee’s invitation, specific to the relevant
meeting.
2. The Company Secretary shall be the
Secretary of the Committee and shall be
responsible for drawing up the agenda with
concurrence of the chairperson and circulating
it, supporting by explanatory documentation to
committee members prior to each meeting.
Duties
The duties of the Audit Committee include the
followings:
1. To consider the appointment or re-
appointment of external auditors, the audit fee
and matter relating to the resignation or
dismissal of auditors, if any;
2. To review with the external auditors the audit
plan, their evaluation of the system of internal
accounting controls, their letter to
management and the management’s
response;
3. To review the quarterly and annual financial
statements before submission to the Board of
Directors for approval, focusing particularly
on:
Changes in accounting policies and
practices;
Significant and unusual events;
Significant adjustments resulting from the
audit;
The going concern assumption; and
Compliance with accounting standard and
other legal requirements
ANNUAL REPORT 2014
Audit Committee Report for the financial year ended 31 May 2014 cont’d
11
TERMS OF REFERENCE (Cont’d)
4. To discuss problems and reservations arising
from the interim and final audits, and any
matter the auditors may wish to discuss (in the
absence of management where necessary);
5. To do the followings where an internal audit
function exists;
Review the adequacy of the scope,
function and resources of the internal
audit function and that it has the
necessary to carry out its work;
Review the internal audit programme and
results of the internal audit process and
where necessary ensure that appropriate
action is taken on the recommendations
of the internal audit function;
Review any appraisal or assessment of
the performance of members of the
internal audit function;
Approve any appointment or termination
of senior staff members of the internal
audit function;
Review the resignation of internal audit
staff members and provide the staff
member the opportunity to submit his
reasons for resigning; and
To consider major findings of internal
investigations and management’s
response.
6. To consider any related party transaction and
conflict of interest situation that may arise
within the Company or the Group including
any transaction, procedure or course of
conduct that raises questions of management
integrity; and
7. To consider other topics as defined by the
Board.
Reporting
The Audit Committee is authorised to regulate its
own procedures and in particular the calling of
meetings, the notice to be given of such meetings,
the voting and proceeding thereat, the keeping of
minutes and the custody, production and inspection
of such meetings.
The minutes of meetings shall be circulated by the
Secretary of the Committee to the Committee
members and all the other Board members.
ACTIVITIES OF THE AUDIT COMMITTEE
There were four (4) Audit Committee Meetings held
during the financial year under review.
The main activities undertaken by the Audit
Committee during the financial year included the
followings:
Reviewed and commented on the quarterly
financial result before recommending the
same for Board’s approval.
Reviewed the audit report and observations
made by external auditors on the audited
financial statements that require appropriate
management action and the management’s
response thereon and reporting them to the
Board.
Reviewed the external auditors’ scope of work
and audit plan.
Reviewed the internal audit reports, which
highlighted the audit issues and
management‘s response.
INTERNAL AUDIT FUNCTION
The Board engaged an external professional firm to
carry out internal audit function for the Group. The
internal auditors report directly to the Audit
Committee.
The primary role of the internal auditors is to inter-
alia; assist the Audit Committee on an ongoing
basis to:
Review the risk management framework;
Audit Committee Report for the financial year ended 31 May 2014 cont’d
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INTERNAL AUDIT FUNCTION (Cont’d)
Evaluate the state of compliance with the
Bursa Securities Listing Requirements,
Malaysian Code on Corporate Governance
(“the Code”) and other statutory requirements;
and
Provide such other function as requested by
the Audit Committee
ANNUAL REPORT 2014
Statement on Corporate Governance
for the financial year ended 31 May 2014 cont’d
13
INTRODUCTION
The Board of Directors (“the Board”) of Fibon
Berhad (“the Company”) is committed to exercise
good corporate governance by supporting and
applying the prescriptions of the principles and best
practices set out in Malaysian Code on Corporate
Governance 2012 (“MCCG 2012” or “the Code”).
The Board is pleased to provide the following
statement on how the Group has applied the
principles and recommendations set out in the
Code. Unless otherwise stated, the Board has
throughout the financial year ended 31 May 2014
complied with the best practices indicated in the
Code.
The Board acknowledges the importance of
achieving best practice in its standards of business
integrity and corporate accountability and is
committed to subscribe to the recommendations of
the Code.
The Board
The Group recognises the important role played by
the Board in the stewardship of the Group’s
direction and operations, and ultimately, the
enhancement of long-term shareholders’ value. To
fulfil this role, the Board is responsible for the
overall corporate governance of the Group,
including its strategic direction, establishing goals
for management and monitoring the achievement of
these goals.
In fostering commitment towards MCCG 2012, the
Board has established a Board Charter to ensure
that all Board members are aware of their fiduciary
duties and responsibilities for the proper
stewardship of the Group to provide reasonable
assurance for the success of the Group on
sustainable manner. The Board is tasked with
realisation of long term and sustainable
shareholder’s value and safeguarding the interests
of stakeholders.
Board Meeting
The Board ordinarily meets at least four (4) times a
year at quarterly intervals with additional meeting
convened when urgent and important decisions
need to be taken between the scheduled meetings.
During the financial year ended 31 May 2014, the
board met on four (4) occasions, where it
deliberated upon and considered a variety of
matters including the Group’s financial results,
major investments and strategic decisions and the
business plan and direction of the Group.
The present Board of Directors headed by the
chairman is comprised of:
4 Non-Independent Executive Directors
3 Independent Non-Executive Directors
The composition of the Board is basically in
compliance with the Bursa Securities Listing
Requirements and the Code. The Board
composition has been balanced to reflect the
interests of the major shareholders, management
and minority shareholders. Collectively, the
Directors bring a wide range of business and
financial experience relevant to the direction of the
Group.
The Board noted that one of the recommendations
of the MCCG 2012 is that the tenure of an
Independent Director should not exceed a
cumulative term of nine (9) years. In case of any
Independent Director exceeding cumulative term of
nine (9) years, he / she should be re-designated to
be Non-Executive Director or shareholders’
approvals would need to be obtained in order for he
/ she to remain as Independent Director. Amongst
the Board members, all the tenure of three (3)
Independent Non-Executive Directors have not
exceeded cumulative term of nine (9) years.
Another recommendation of the MCCG 2012 states
that the positions of Chairman and Chief Executive
Officer / Managing Director should be held by
different individuals, and the Chairman must be a
non-executive member of the Board. Otherwise, the
Board should comprise of majority independent
directors. Currently, the rules of the Chairman and
Managing Director are held by 2 separate Executive
Statement on Corporate Governance
for the financial year ended 31 May 2014 cont’d
14
Directors as the Board opines that there is sufficient
balance of Executive and Independent Non-
Executive Directors on the Board such that
decisions made are fully discussed and examined
taking into account the long-term interest of
shareholders, employees, customers and the many
communities with whom the Group conducts its
business. The board has been able to discharge its
duties professionally and effectively, uphold good
governance standards in their conduct. The board
will constantly review this recommendation and
work towards its compliance.
Details of Directors’ attendance at Board Meetings
held in the financial year ended 31 May 2014 are as
follows:
Name of Directors No. of Meetings
Attended
Datuk Mohamad Saleh Bin
Mohd Ghazali 4/4
Koh Chun Kiat 4/4
Chong Peng Khang 3/4
Pang Chee Khiong 4/4
Pang Fok Seng 4/4
Pang Nyuk Yin 4/4
Lim Wai Kiew 4/4
Appointment of Directors
The Nomination Committee task is to assist the
Board to evaluate and recommend candidates for
appointments to the Board.
In accordance with the Company’s Articles of
Association (“the Articles”), all new Directors who
are appointed by the Board during a financial year,
will retire at the following Annual General Meeting.
The Articles also provide that at least one-third (1/3)
of the Directors for the time being, or if their
numbers is not in multiple of three (3), then the
number nearest to one-third (1/3) shall retire from
office provided always that all Directors including
the Managing Director/Executive Director shall
retire from office at least once every three years but
shall be eligible for re-election.
At the forthcoming Annual General Meeting, Lim
Wai Kiew and Pang Nyuk Yin are due to retire
pursuant to Article 121 of the Company’s Articles of
Association.
The Board, through the Nomination Committee,
appraises the composition of the Board and
believes that the current composition brings the
required mix of skills and core competencies for the
Board to discharge its duties effectively. New
appointees will be considered and evaluated by the
Nomination Committee. The Nomination Committee
will then recommend the candidates to be approved
and appointed by the Board. The Company
Secretary will ensure that all appointments are
properly made and that legal and regulatory
obligations are met.
Directors’ Remuneration
The Directors’ remuneration is linked to experience,
scope of responsibility, seniority, performance and
industry information. Details of Directors’
remuneration for the year ended 31 May 2014 are
as follows:
Description Fees Salaries and
Bonus Total
Executive
Directors
187,500 1,736,180 1,923,680
Non Executive
Directors
72,000 - 72,000
The number of Directors whose remuneration falls
within the following bands is:
Description Executive
Directors
Non
Executive
Less than RM50,000 - 3
RM50,000 – RM100,000 - -
RM100,000 – RM150,000 - -
RM150,000 – RM200,000 - -
RM200,000 – RM300,000 2 -
RM300,000 – RM400,000 1 -
RM400,000 – RM500,000
RM500,000 – RM600,000
RM600,000 – RM700,000
RM800,000 – RM900,000
RM900,000 – RM1,000,000
-
-
-
1
-
-
-
-
-
-
ANNUAL REPORT 2014
Statement on Corporate Governance
for the financial year ended 31 May 2014 cont’d
15
Directors’ Training
The Group acknowledges the importance of
continuous education and training to the Board
members.
During the financial year, Mr. Pang Chee Khiong,
Mr. Pang Fok Seng, attended “Corporate
Governance Statement Reporting Workshop”. Ms.
Pang Nyuk Yin and Datuk Mohamad Saleh Bin
Mohd Ghazali attended “Advocacy Sessions on
Corporate Disclosure for Directors” organised by
the Bursa Malaysia Berhad. Ms Lim Wai Kiew has
attended “Advocacy Sessions on Corporate
Disclosure for Directors” organised by the Bursa
Malaysia Berhad and “Briefing on GST Public
Awareness Programme Series 1/2014” organised
by Royal Malaysian Custom Department.
Mr. Chong Peng Khang had attended the following sessions:-
i) MS Powerpoint 2010/2007 (Creating Effective Presentations) (27-28 June 2013)
ii) Interview for Approved Company Auditor and Liquidator (8 July 2013)
iii) Getting Ready for GST? Event! (22 November 2013)
iv) GST Technical Training (13 March 2014)
v) Preparing for GST in Malaysia (3 April 2014)
vi) GST Questionnaires, Interview & Focus Group Workshop (8, 10-11, 16-17 April 2014)
Mr. Koh Chun Kiat had attended the following sessions:
i) National Tax Conference 2013
ii) Post Budget 2013
iii) Breaking New Ground : Landmark Decisions On Reinvestment Allowance And Capital Allowance iv) Seminar PercukaianKebangsaan 2013 v) Goods & Services Tax (GST) – A Preparatory Course for GST Consultants and Accountants vi) MPERS: Private entities moving forward, the new standard for SdnBhd
vii) Overview of Goods Services Tax (GST) in Malaysia
ACCOUNTABILITY AND AUDIT
Financial Reporting
The Board takes responsibility for ensuring that the
financial statements of the Group and of the
Company give a true and fair view of the state of
affairs of the Group and of the Company as
required under Section 169 (15) of the Companies
Act, 1965. Efforts are made to ensure that the
financial statements comply with the provisions of
the Companies Act, 1965 and the applicable
approved accounting standards in Malaysia. The
Board also ensures the accurate and timely release
of the Group’s quarterly and annual financial results
to Bursa Malaysia.
External Audit Function
The Company’s independent external auditors fill an
essential role by enhancing the reliability of the
financial statements of the Group and of the
Company and giving assurance of that reliability to
users of these financial statements. The external
auditors, Messrs. Crowe Horwath had reported to
the members of the Company on their findings
which has been included as part of the Group’s and
the Company’s financial reports with respect to the
audit on the statutory financial statements for the
year ended 31 May 2014. In doing so, the Group
and the Company have established a transparent
arrangement with the auditors to meet their
professional requirements. From time to time, the
auditors highlight to the Audit Committee and the
Board on matters that require the Board’s attention.
Internal Control
The Board is fully aware of its responsibility to
safeguard and enhance the value of shareholders
in the Group. Since the listing of the Company, the
Board has continuously placed emphasis on the
need for maintaining a sound system of the internal
control.
Statement on Corporate Governance
for the financial year ended 31 May 2014 cont’d
16
RELATIONS WITH SHAREHOLDERS AND
INVESTORS
Annual General Meeting
Annual General Meeting (“AGM”) is the principal
forum for dialogue with shareholders. At the
Company’s AGM, shareholders have direct access
to the Board and are given opportunities to ask
questions. The shareholders are encouraged to
participate in the question and answer session. The
Chairman of the Board in the AGM often presents to
the shareholders, the Company’s operations in the
financial year and outlines future prospects of the
Group. Further, the Group’s Company Secretary
could provide shareholders and investors with a
channel of communication on which they can
provide feedback to the Group. Queries regarding
the Group may be conveyed to the Company
Secretary at the Company’s registered address.
Investor Relations
In line with the Main Market Listing Requirements,
shareholders, investors and member of public can
access the company’s announcements, quarterly
financial results, annual reports, circulars to
shareholders etc via the company’s website.
Corporate Disclosure Policy
The company has in place a policy stipulating the
basic principles and procedures of corporate
disclosure in order to communicate and disseminate
material information impartially to stakeholders on
timely, accurate, clear and complete manner, in
accordance with Main Market Listing Requirements
and other applicable laws and regulations.
The policy forms part of the Company’s internal
rules and regulations and applies to all Directors,
officers and employees of the Group and at the
same time clearly expresses its commitment on
transparent, quality and timely disclosure of Material
Information to all stakeholders.
ANNUAL REPORT 2014
Statement on Corporate Governance
for the financial year ended 31 May 2014 cont’d
17
Corporate Social Responsibilities
The Company recognises the importance of Corporate Social Responsibilities and is committed to conduct its
business activities in a socially, economically and environmentally sustainable manner.
The Company has taken a proactive approach wherever possible to provide monetary contributions to non-
profitable and charitable organisations. As a part of the activities, the Company accepts undergraduates from
local Universities and Colleges to perform and complete their industrial training.
AGAPE SHELTER KLUANG
Agape Shelter Kluang, established in February 1990, is a welfare home for poor underprivileged
children. The community provides a conducive homely environment for the healthy emotional,
intellectual, physical and spiritual development of the children and to reach out and to touch the lives
of the children in partnership with the public. It is managed by a Board, full time staff and volunteers.
All the expenses are funding from public donations and Government annual grants.
Fibon Berhad has paid a visit and made contribution to the shelter.
Statement on Corporate Governance
for the financial year ended 31 May 2014 cont’d
18
MIRIAM HOME CANOSSIAN SISTERS
Miriam Home Canissian Sisters is been shelter home for the elderly for the last 30 years. It’s not only
a shelter but a home of love, caring, integrity and responsibility. The home was built on a land
donated to the sisters by the late Sultan Ibrahim ibni al-Marhum Sultan Abu Bakar.
Fibon as a part of caring community donates to the Miriam Home.
ANNUAL REPORT 2014
Statement on Corporate Governance
for the financial year ended 31 May 2014 cont’d
19
CHOONG PEK HAH (670102-10-6600)
Ms. Choong Pek Hah was diagnosed with leukodystrophy in 2006 and was bed ridden since May 2007.
Leukodystrophy is group of disorders characterized by degeneration of the white matter in the brain. It causes a
progressive loss in body tone, movements, gait, speech, ability to eat, vision, hearing and behaviour.
A small token of contribution was donated by Fibon Berhad to Ms. Choong Pek Hah to lighten her financial
burden.
Statement on Corporate Governance
for the financial year ended 31 May 2014 cont’d
20
CHE LUAN KHOR DIALYSIS CENTRE, KLUANG.
Che Luan Khor Dialysis Centre, Kluang was incorporated in Malaysia in August 1998 to carry out businesses in
relation with haemodialysis services. Che Luan Khor Dialysis Centre is equipped with the latest medical
equipment for haemodialysis treatment. Furthermore, the centre is managed by a group of professional
personnel such as Medical Doctor, Registered Nurses and Experienced Technicians to provide the excellent
treatments for 69 haemodialysis patients. The centre can accommodate around 33 patients on daily basis. Fibon
had given donation with the hope to ease their medical expenses.
ANNUAL REPORT 2014
Statement on Corporate Governance
for the financial year ended 31 May 2014 cont’d
21
KIWANIS CLUB OF KLUANG MANDARIN
Kiwanis Club of Kluang Mandarin is a centre providing support and assistance to persons with disabilities. Their
main aims are providing day care services and simple education for the disabled people. There are around 37
disabled persons with 7 teachers , 1 administration staff and 2 volunteers. Kiwanis Club has been very active
club for the last 10 years with various activities held for the unfortunate with their families.
Fibon as part of caring community, paid a visit and donated small token of contribution.
Statement on Corporate Governance
for the financial year ended 31 May 2014 cont’d
22
HANDICAPPED AND DISABLED ASSOCIATION STATE OF JOHORE, KLUANG
Handicapped and Disabled Association State of Johore is a charitable centre where the unfortunate disabled
people live. There are 40 inmates comprised of Malay, Indian, Chinese and other races. 26 male and 14 female
aged from 10 to 77 years old are living in this home as residential inmates. Handicapped and Disabled
Association State of Johore helps the disabled people and provides them with shelter and daily needs.
Fibon as part of caring community, paid a visit and donated small token of contribution.
ANNUAL REPORT 2014
Statement on Corporate Governance
for the financial year ended 31 May 2014 cont’d
23
SABIRIN BIN YAHAYA (450517-01-5415)
Mr.Sabirin father of 4 children passed away due to heart attack on 7th
June 2013. Fibon Berhad had made a
small token of continuous contribution to the wife of the deceased, Pn.Hasmah Binti Dollah.
Statement on Corporate Governance
for the financial year ended 31 May 2014 cont’d
24
Apart from contributions to organisations, Fibon Berhad is giving direct donations to individuals in need of helps
and supports. These individuals include the aged, ailing, handicapped, injured, disabled, unfortunate, widowed or
orphaned.
RATHAY @ RATHA A/L RATNAM CHONG HON MENG
(510215-23-5027) (530316-05-5365)
GOH BOON SIONG LEE WEE KONG
(670205-01-6237) (650105-01-6063)
ANNUAL REPORT 2014
Statement on Corporate Governance
for the financial year ended 31 May 2014 cont’d
25
FEY BOK JEE SIVEN A/L SUBRAMANIAM
(580407-01-5444) (860825-23-5649)
VIJAYAKUMARI A/P ARUMUGAM KHOO HAI THIONG
(680926-01-5188) (471010-01-5195)
Statement on Corporate Governance
for the financial year ended 31 May 2014 cont’d
26
KURUMPATHEVAR A/L KARUPPIAH YAP CHONG LEONG
(430418-10-5679) (690818-01-5729)
ANNUAL REPORT 2014
Statement on Corporate Governance
for the financial year ended 31 May 2014 cont’d
27
DONATIONS
We at Fibon believe that charity is a continuous journey in the betterment of the life for the disadvantaged,
forgotten, neglected or disabled. They deserve a better life with loves and caring from the society. We at Fibon
may not be able to fully relieve their pains and sufferings but we believe with our little contribution, we at least can
give them some cheers, loves and urgent financial supports to let them lead a better life.
Below is a list of communities requiring support from the public. Should anyone is interested to contribute to
these communities, we are always here to provide the necessary assistance required.
1. AGAPE SHELTER KLUANG
2. CHE LUAN KHOR DIALYSIS CENTRE, KLUANG.
3. CHONG HON MENG (530316-05-5365)
4. CHOONG PEK HAH’S (670102-10-6600) FAMILY
5. EAM DIALYSIS CENTRE, SELANGOR
6. FEY BOK JEE (580407-01-5444)
7. GOH BOON SIONG (670205-01-6237)
8. HANDICAPPED AND DISABLED ASSOCIATION STATE OF JOHORE, KLUANG
9. KHOO HAI THIONG (471010-01-5195)
10. KIWANIS CLUB OF KLUANG MANDARIN
11. KURUMPATHEVAR A/L KARUPPIAH (430418-10-5679)
12. LEE WEE KONG (650105-01-6063)
13. MIRIAM HOME CANOSSIAN SISTERS, KLUANG
14. NG CHAI HOCK’S (580626-01-5583) FAMILY
15. PDK YAQEEN DAERAH PALOH, KLUANG
16. PERTUBUHAN KEBAJIKAN ANAK-ANAK YATIM DAMO, KLUANG
17. PERTUBUHAN KEBAJIKAN ANAK-ANAK YATIM ISLAM KLUANG
18. PUSAT RAWATAN LUKA BIOTERAPI (MDT CENTRE SDN.BHD.), SELANGOR.
19. RATHAY @ RATHA A/L RATNAM (510215-23-5027)
20. S.J.K.(CINA) PING MING KLUANG
21. SABIRIN BIN YAHAYA’S (450517-01-5415) FAMILY
22. SIVEN A/L SUBRAMANIAM (860825-23-5649)
23. VIJAYAKUMARI A/P ARUMUGAM (680926-01-5188)
24. YAP CHONG LEONG (690818-01-5729)
Statement on Risk Management & Internal Control for the financial year ended 31 May 2014
28
INTRODUCTION
The Malaysian Code of Corporate Governance
(‘The Code’) prescribes that all listed issuers should
have an internal audit function and all risks areas
identified.
The Principals and Best Practises in the Malaysian
Code on Corporate Governance state that the
Board should maintain a sound system of internal
control to safeguard shareholders’ investments and
the Group’s assets.
Paragraph 15.26(b) of the Bursa Securities Main
Market Listing Requirements also echoed that the
Board is ultimately responsible for the Group’s
system of internal control and for reviewing the
effectiveness of the internal control system.
Internal control system is primarily designed to cater
for the business needs and manage the potential
business risks of the Group.
There are inherent risks in any systems of internal
control, as such systems are designed to mitigate
rather than eliminate the likelihood of fraud and
error. Accordingly, these systems can provide only
reasonable and not absolute assurance against
material misstatement or loss. The concept of
reasonable assurance also recognises that the cost
of control procedures should not exceed the
expected benefits.
The Board is committed to maintain a sound system
of internal control in the Group and is pleased to
provide the following Statement on Internal Control
(“Statement”) pursuant to paragraph 15.26(b) of the
Bursa Securities Main Market Listing.
Requirements of Bursa Malaysia Securities Berhad
(“Bursa Securities”) and the Statement on Internal
Control: Guidance for Directors of Public Listed
Companies.
BOARD RESPONSIBILITIES
The Board acknowledges its responsibility for
maintaining a sound system of internal control to
safeguard shareholders’ investments and the
Group’s assets and for reviewing the adequacy and
integrity of the system. It should be appreciated that
such a system is designed to manage the principle
business risks that may impede the Group from
achieving business objectives, and can only provide
reasonable and not absolute assurance against
material misstatement or loss. The system of
internal controls cover financial, organisational,
operational and compliance controls to safeguard
shareholders’ investment and the Group’s assets.
RISK MANAGEMENT
The Board understands that risk management plays
an important role in identify risk areas which impede
the achievement of the Group’s corporate
objectives. As such the Group strives to identify and
manage its risks faced by the Group during the year
during their monthly management meetings.
KEY ELEMENTS OF THE INTERNAL
CONTROL SYSTEM
Internal controls are embedded in the Group’s
operations as follows:
Organisation Structure
The Group has in place an organisation structure
with clearly defined lines of responsibilities and
functionality which promotes appropriate levels of
accountability for risk management, control
procedures and effectiveness of operations.
Board and Management Meetings
Strategic planning and detailed target setting for
each area of business are established. The Board
and Management holds monthly meetings to
monitor actual results, with significant variances are
being investigated and management action taken,
where necessary as well as listening to feedback on
daily operational issues.
ANNUAL REPORT 2014
Statement on Risk Management & Internal Control for the financial year ended 31 May 2014 cont’d
29
Performance Management Framework
Management reports are generated on a monthly
and quarterly basis to facilitate the Board and the
Group’s management to perform review on the
business units. The Group’s management
information system has been upgraded to provide
management with better reporting system. The
reporting and review encompass financial and non-
financial matter for compliance and daily operational
use.
Limits of Authority
Defined level of authorities and lines of
responsibilities from business divisions up to the
Board level is established to ensure accountabilities
and responsibilities for risk management and
control activities.
Operational Policies and Procedures
The Group’s policies and procedures form an
integral part of the internal control system to
safeguard the Group’s assets against material
losses and to ensure a systematic running of the
daily operation. Regular reviews are performed to
ensure that documentation remains current and
relevant.
Audit Committee
The AC reports to the Board on a quarterly basis
the activities of the internal audit function and
deliberate on the internal audit reports. The AC also
ensures that the adequacy and effectiveness of the
internal controls and procedures and that there are
continuous efforts by management to address and
resolve areas with control weakness.
Internal Audit Functions
The internal audit function provides assurance of
the effectiveness of the system of internal controls
within the Group. Internal audit efforts are directed
towards areas with significant risks as identified by
the AC and the Management.
The Group had engaged an external independent
internal auditor to assist the AC, and by extension,
the Board. The scope covers the audit of business
units and operations as agreed with management.
From time to time, the scope is reviewed by the AC
to ensure its relevancy and effectiveness.
The internal audits advise management on areas
for improvement and subsequently reviews the
extent to which its recommendations have been
implemented, and reports directly to the AC on a
quarterly basis.
The cost incurred for the external independent
internal audit services in respect of the financial
year 31 May 2014 was RM29,653.83.
In Fibon Berhad, the Managing Director is defined
as the highest ranking executive in the Group
hence, the person responsible for carrying out
corporate policies established by the Board and
whose main responsibilities include developing and
implementing high-level strategies, making major
corporate decisions, managing the overall
operations and resources of the Group, and acting
as the main point of communication between the
Board and corporate operations.
The Corporate Finance Manager is defined as the
person primarily responsible for the management of
the financial affairs of the company (such as record
keeping, financial planning and financial reporting),
by whatever name called.
On 24 July 2014, based on the letter by both the
Managing Director and the Corporate Finance
Manager provides the assurance to the Group’s
Board that the Group’s risk management and
internal control system is operating adequately and
effectively.
The monitoring, review and reporting arrangements
provides reasonable assurance that the structure of
controls and its operations are appropriate to the
Group’s operations and that risks are at an
acceptable level throughout the Group’s
businesses. Such arrangements, however, do not
Statement on Risk Management & Internal Control for the financial year ended 31 May 2014 cont’d
30
eliminate the possibility of human error, deliberate
circumvention of control procedures by employees
and others, or the occurrence of unforeseeable
circumstances. The Board is of the view that the
system of internal control in place for the year under
review is sound and sufficient to safeguard
shareholders’ investments, stakeholders’ interests
and the Group’s assets.
Weakness in Internal Controls
There were no material losses incurred during the
financial year under review as a result of
weaknesses in internal control. The Board remains
committed towards improving the system of internal
control and risk management to meet its corporate
objectives and to support all types of businesses
and operations within the Group.
The statement is made in accordance with a
resolution of the Board dated 8 September 2014.
ANNUAL REPORT 2014
Statement on Directors’ Responsibilities
In respect of the audited financial statements
31
The Board has the overall responsibility to prepare
the financial statements for each financial year as
required by the Companies Act, 1965. The financial
statements should be prepared in accordance with
the applicable Malaysian Accounting Standards
Board (“MASB’) approved accounting standards in
Malaysia, the provisions of the Companies Act,
1965, and the relevant provisions of the Bursa
Securities Listing Requirements so as to present a
true and fair view of the state of affairs of the Group
and of the Company as at the end of the financial
year and of their results and cash flows for the year
then ended.
In preparing the financial statements, the Directors
have:
Selected suitable accounting policies and applied them consistently
Ensured system of internal control exist to safeguard the assets of the Group to prevent and detect fraud and other irregularities
Ensured that the financial statements presents a balanced and understandable assessment of the financial position and prospect of the Group and of the Company; and
Ensured that the accounting estimates included in the financial statements are reasonable and prudent.
Additional Compliance Information
32
UTILISATION OF PROCEEDS
The status of utilisation of proceeds from the public offering during the financial year ended 31 May 2014 is as
follows:
Purposes
Proceeds
raised
RM’000
Actual
Utilisation
RM’000
Intended
Timeframe for
Utilisation
Extended
Timeframe for
Utilisation
Balance
Unutilised
RM’000
%
Explanation
(i) Research & development activities
1,848 1,848 18 December 2011
18 December 2012
0 - ^
(ii) Purchase of machineries 1,700 1,700 18 December 2011
18 December 2012
0 - ^
(iii)
Geographical expansion 1,180 790 18 December 2011
18 December 2012
390 33 ^
(iv) Working capital 2,409 3,469 - - (1060) - *
(v) Estimated listing expenses
2,000 1,330 - - 670 - *
Total 9,137 9,137 0
^ The initial approved time frame for utilisation is 3 years from the date of listing. The Board of Directors have decided to extend the time frame for all remaining unutilised portions for another twelve (12) months period until 18 December 2013 in accordance with announcement made on 18 January 2013.
* The underutilisation of the listing expenses will be adjusted to working capital.
SHARE BUYBACKS
During the financial year under review, there were no share buyback by the Company.
OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
During the financial year under review, the Company has not issued any options, warrants or convertible
securities.
AMERICAN DEPOSITORY RECEIPT (ADR) OR GLOBAL DEPOSITORY RECEIPT (GDR)
PROGRAMME
During the financial year under review, the Company did not sponsor any such programme.
ANNUAL REPORT 2014
Additional Compliance Information cont’d
33
IMPOSITION OF SANCTIONS AND/OR PENALTIES
There were no material sanction and/or penalties imposed on the Company and its subsidiary companies,
Directors or management by the regulatory bodies.
NON-AUDIT FEES
Non-audit fees paid to external auditors and affiliated firm amounted to RM13,870.
REVALUATION POLICY
The Company has not adopted a policy of regular revaluation of assets as permitted under the transition
provisions.
MATERIAL CONTRACT
The Company and its subsidiary do not have any material contract for the financial year.
PROFIT ESTIMATE, FORECAST OR PROJECTION
The Company and its subsidiary companies did not issue any profit forecast or profit estimate previously or for
the financial year ending 31 May 2014 in any public document hence this information is not applicable.
PROFIT GUARANTEES
There were no profit guarantees given by the Company for the financial year.
RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE NATURE
There were no recurrent related party transactions of a revenue nature entered into during the financial year
ended 31 May 2014.
34
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ANNUAL REPORT 2014
35
Financial Statements
Directors’ Report
Statement by Directors
Statutory Declaration
Independent Auditors’ Report
Statements of Financial Position
Statements of Comprehensive Income
Statements of Changes in Equity
Statements of Cash Flows
Notes to the Financial Statements
36
40
40
41
43
45
46
48
50
Directors’ Report
36
The directors hereby submit their report and the audited financial statements of the Group and of the Company
for the financial year ended 31 May 2014.
PRINCIPAL ACTIVITIES
The Company is principally engaged in the business of investment holding. The principal activities of its
subsidiaries are set out in Note 5 to the financial statements. There have been no significant changes in the
nature of these activities during the financial year.
RESULTS
The Group The Company
RM’000 RM’000
Profit after taxation for the financial year 4,003 1,327
Attributable to:-
Owners of the Company 4,003 1,327
DIVIDENDS
A first and final single tier dividend of 1.25 sen per ordinary share amounting to RM1,225,000 for the financial
year ended 31 May 2013 was approved by the shareholders at the Annual General Meeting held on 25 October
2013 and paid on 27 December 2013.
At the forthcoming Annual General Meeting, a first and final single tier dividend of 1.10 sen per ordinary share
amounting to RM1,078,000 in respect of the financial year ended 31 May 2014 will be proposed for shareholders’
approval. The financial statement for the current financial year will not reflect this proposed dividend. Such
dividend, if approved by the shareholders, will be accounted for as a liability in the financial year ending 31 May
2015.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provision during the financial year except as disclosed in
the financial statements.
ISSUES OF SHARES AND DEBENTURES
During the financial year,
(a) there were no changes in the authorised and issued and paid-up share capital of the Company; and
(b) there were no issues of debentures by the Company.
ANNUAL REPORT 2014
Directors’ Report cont’d
37
OPTIONS GRANTED OVER UNISSUED SHARES
During the financial year, no options were granted by the Company to any person to take up any unissued shares
in the Company.
BAD AND DOUBTFUL DEBTS
Before the financial statements of the Group and of the Company were made out, the directors took reasonable
steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of
allowance for impairment losses on receivables, and satisfied themselves that there are no known bad debts and
that adequate allowance had been made for impairment losses on receivables.
At the date of this report, the directors are not aware of any circumstances that would require the writing off of
bad debts, or the additional allowance for impairment losses on receivables in the financial statements of the
Group and of the Company.
CURRENT ASSETS
Before the financial statements of the Group and of the Company were made out, the directors took reasonable
steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary
course of business, including their value as shown in the accounting records of the Group and of the Company,
have been written down to an amount which they might be expected so to realise.
At the date of this report, the directors are not aware of any circumstances which would render the values
attributed to the current assets in the financial statements misleading.
VALUATION METHODS
At the date of this report, the directors are not aware of any circumstances which have arisen which render
adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company
misleading or inappropriate.
CONTINGENT AND OTHER LIABILITIES
At the date of this report, there does not exist:-
(a) any charge on the assets of the Group and of the Company that has arisen since the end of the financial
year which secures the liabilities of any other person; or
(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial
year.
No contingent or other liability of the Group and of the Company has become enforceable or is likely to become
enforceable within the period of twelve months after the end of the financial year which, in the opinion of the
directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations
when they fall due.
Directors’ Report cont’d
38
CHANGE OF CIRCUMSTANCES
At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report
or the financial statements of the Group and of the Company which would render any amount stated in the
financial statements misleading.
ITEMS OF AN UNUSUAL NATURE
The results of the operations of the Group and of the Company during the financial year were not, in the opinion
of the directors, substantially affected by any item, transaction or event of a material and unusual nature.
There has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially
the results of the operations of the Group and of the Company for the financial year.
DIRECTORS
The directors who served since the date of the last report are as follows:-
Pang Chee Khiong
Pang Fok Seng
Lim Wai Kiew
Pang Nyuk Yin
Chong Peng Khang
Datuk Mohamad Saleh Bin Mohd. Ghazali
Koh Chun Kiat
Pursuant to Article 121 of the Articles of Association of the Company, Lim Wai Kiew and Pang Nyuk Yin retire by
rotation at the forthcoming annual general meeting and being eligible, offer themselves for re-election.
DIRECTORS’ INTERESTS
According to the register of directors’ shareholdings, the interests of directors holding office at the end of the
financial year in shares in the Company and its related corporations during the financial year are as follows:-
Number Of Ordinary Shares Of RM0.10 Each At 1.6.2013 Bought Sold At 31.5.2014 Direct Interests Lim Wai Kiew 1,470,000 - - 1,470,000 Pang Chee Khiong 21,560,552 - - 21,560,552 Pang Fok Seng 16,398,788 - - 16,398,788 Pang Nyuk Yin 2,940,000 - - 2,940,000 Chong Peng Khang 322 - - 322
Deemed Interests Lim Wai Kiew 16,398,788 - - 16,398,788 Pang Fok Seng 1,470,000 - - 1,470,000
ANNUAL REPORT 2014
Directors’ Report cont’d
39
DIRECTORS’ INTERESTS (Cont’d)
By virtue of their interests in shares in the Company, Lim Wai Kiew, Pang Chee Khiong and Pang Fok Seng are
deemed to have interests in shares in its subsidiaries to the extent of the Company’s interest, in accordance with
Section 6A of the Companies Act, 1965.
The other directors holding office at the end of the financial year had no interest in shares in the Company or its
related corporations during the financial year.
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no director has received or become entitled to receive any benefit
(other than a benefit included in the aggregate amount of emoluments received or due and receivable by
directors as shown in the financial statements, or the fixed salary of a full-time employee of the Company) by
reason of a contract made by the Company or a related corporation with the director or with a firm of which the
director is a member, or with a company in which the director has a substantial financial interest except for any
benefits which may be deemed to arise from transactions entered into in the ordinary course of business with
companies in which certain directors have substantial financial interests as disclosed in Note 28 to the financial
statements.
Neither during nor at the end of the financial year was the Group or the Company a party to any arrangements
whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures
of the Company or any other body corporate.
SIGNIFICANT EVENT DURING THE FINANCIAL YEAR
The significant event during the reporting period is disclosed in Note 31 to the financial statements.
AUDITORS
The auditors, Messrs. Crowe Horwath, have expressed their willingness to continue in office.
SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS
DATED 08 SEPTEMBER 2014
Pang Chee Khiong
Lim Wai Kiew
Statement by Directors
40
We, Pang Chee Khiong and Lim Wai Kiew, being two of the directors of Fibon Berhad, state that, in the opinion of
the directors, the financial statements set out on pages 43 to 91 are drawn up in accordance with Malaysian
Financial Reporting Standards, International Financial Reporting Standards and the requirements of the
Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of
the Company at 31 May 2014 and of their financial performance and cash flows for the financial year ended on
that date.
The supplementary information set out in Note 32, which is not part of the financial statements, is prepared in all
material respects, in accordance with Guidance on Special Matter No. 1, Determination of Realised and
Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing
Requirements, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities
Berhad.
SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS DATED 08 SEPTEMBER 2014
Pang Chee Khiong Lim Wai Kiew
Statutory Declaration
I, Pang Chee Khiong, I/C No. 640329-01-5175, being the director primarily responsible for the financial
management of Fibon Berhad, do solemnly and sincerely declare that the financial statements set out on pages
43 to 91 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously
believing the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960.
Subscribed and solemnly declared by
Pang Chee Khiong, I/C No. 640329-01-5175,
in the State of Melaka
on 08 September 2014
Pang Chee Khiong Before me
Ong San Kee
Persuruhjaya Sumpah
(Commissioner for Oaths)
349B & 351B
Jalan Ong Kim Wee
75300 Malaka
ANNUAL REPORT 2014
Independent Auditors’ Report to the Members of FIBON BERHAD (Incorporated in Malaysia) Company No: 811010-H
41
REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements of Fibon Berhad, which comprise the statements of financial position as
at 31 May 2014 of the Group and of the Company, and the statements of profit or loss and other comprehensive
income, statements of changes in equity and statements of cash flows of the Group and of the Company for the
financial year then ended, and a summary of significant accounting policies and other explanatory information, as
set out on pages 43 to 91.
Directors’ Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation of financial statements so as to give a true and
fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting
Standards and the requirements of Companies Act 1965 in Malaysia. The directors are also responsible for such
internal control as the directors determine is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on our judgement, including the assessment of risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a
true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the
Company as of 31 May 2014 and of its financial performance and cash flows for the financial year then ended in
accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the
requirements of the Companies Act 1965 in Malaysia.
Independent Auditors’ Report to the Members of FIBON BERHAD (Incorporated in Malaysia) Company No: 811010-H cont’d
42
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:-
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the
Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance
with the provisions of the Act.
(b) We have considered the financial statements and the auditors’ report of the subsidiaries of which we have
not acted as auditors, which are indicated in Note 5 to the financial statements.
(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the
Company's financial statements are in form and content appropriate and proper for the purposes of the
preparation of the financial statements of the Group and we have received satisfactory information and
explanations required by us for those purposes.
(d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any
adverse comment made under Section 174(3) of the Act.
The supplementary information set out in Note 32 on page 91 is disclosed to meet the requirement of Bursa
Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the
preparation of the supplementary information in accordance with Guidance on Special Matter No. 1,
Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa
Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ("MIA
Guidance") and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information
is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia
Securities Berhad.
OTHER MATTERS
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the
Companies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person
for the content of this report.
Crowe Horwath Wong Tak Mun
Firm No: AF 1018 Approval No: 1793/09/14 (J)
Chartered Accountants Chartered Accountant
08 SEPTEMBER 2014
Melaka
ANNUAL REPORT 2014
Statements of Financial Position at 31 May 2014
The annexed notes form an integral part of these financial statements. 43
The Group The Company
2014 2013 2014 2013
Note RM’000 RM’000 RM’000 RM’000
ASSETS
NON-CURRENT ASSETS
Investment in subsidiaries 5 - - 8,820 10,094
Property, plant and equipment 6 5,960 5,541 * *
Intangible assets 7 1,187 1,144 - -
7,147 6,685 8,820 10,094
CURRENT ASSETS
Inventories 8 1 989 1,460 - -
Trade receivables 9 5,450 5,527 - -
Other receivables, deposits and prepayments 10
937
136
1
1
Tax recoverable 314 238 16 12
Deposits with licensed banks 11 14,020 14,979 2,501 1,743 2
Cash and bank balances 8,022 5,074 844 222
29,732 27,414 3,362 1,978
TOTAL ASSETS 36,879 34,099 12,182 , 12,072
Statements of Financial Position at 31 May 2014 cont’d
The annexed notes form an integral part of these financial statements. 44
* - Less than RM1,000.
The Group The Company
2014 2013 2014 2013
Note RM’000 RM’000 RM’000 RM’000
EQUITY AND LIABILITIES
EQUITY
Share capital 12 9,800 9,800 9,800 9,800
Share premium 13 707 707 707 707
Other reserves 14 (2,615) (2,629) - -
Retained profits 15 27,302 24,524 1,625 1,523
SHAREHOLDERS' EQUITY 35,194 32,402 12,132 12,030
NON-CURRENT LIABILITY
Deferred tax liabilities 16 645 713 - -
CURRENT LIABILITIES
Trade payables 17 472 554 - -
Other payables and accruals 18 529 423 50 42
Provision for taxation 39 7 - -
1,040 984 50 42
TOTAL LIABILITIES 1,685 1,697 50 42
TOTAL EQUITY AND LIABILITIES 36,879 34,099
12,182 12,072
ANNUAL REPORT 2014
Statements of Comprehensive Income for the financial year ended 31 May 2014
The annexed notes form an integral part of these financial statements. 45
The Group The Company
2014 2013 2014 2013
Note RM’000 RM’000 RM’000 RM’000
REVENUE 19 15,318 16,674 1,801 1,953
COST OF SALES (6,725) (6,744) - - GROSS PROFIT 8,593 9,930 1,801 1,953
OTHER INCOME 1,292 756 249 60 9,885 10,686 2,050 2,013
SELLING AND DISTRIBUTION
EXPENSES
(203)
(184)
-
- -
ADMINISTRATIVE EXPENSES (4,310) (3,836) (656) (635) PROFIT BEFORE TAX 20 5,372 6,666 1,394 1,378
INCOME TAX EXPENSE 23 (1,369) (1,761) (67) (77) PROFIT AFTER TAX 4,003 4,905 1,327 1,301
OTHER COMPREHENSIVE
EXPENSES
- Foreign currency translation 14 (27) - -
TOTAL COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR
4,017 4,878 1,327 1,301
PROFIT AFTER TAXATION
ATTRIBUTABLE TO:-
Owners of the Company 4,003 4,905 1,327 1,301
TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:-
Owners of the Company 4,017 4,878 1,327 1,301
EARNINGS PER SHARE
- basic (sen) 24 4.09 5.01
- diluted (sen) 24 N/A N/A
Statements of Changes in Equity for the financial year ended 31 May 2014
The annexed notes form an integral part of these financial statements. 46
The Group Attributable To Equity Holders Of The Company
Non-Distributable Distributable
Foreign
Currency
Share Share Translation Merger Retained
Capital Premium Reserve Deficit Profits Total
Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1.6.2012 9,800 707 (2) (2,600) 20,746 28,651
Profit after taxation for financial year - - - - 4,905 4,905
Other comprehensive income for the
financial year
- Foreign currency translation reserve - - (27) - - (27)
Total comprehensive income for the
financial year - - (27) - 4,905 4,878
Dividends paid 25 - - - - (1,127) (1,127) Balance at 31.5.2013/1.6.2013 9,800 707 (29) (2,600) 24,524 32,402
Profit after taxation for financial year - - - - 4,003 4,003
Other comprehensive income for the
financial year
- Foreign currency translation reserve - - 14 - - 14
Total comprehensive income for the
financial year - - 14 - 4,003 4,017
Dividends paid 25 - - - - (1,225) (1,225) Balance at 31.5.2014 9,800 707 (15) (2,600) 27,302 35,194
ANNUAL REPORT 2014
Statements of Changes in Equity for the financial year ended 31 May 2014 cont’d
The annexed notes form an integral part of these financial statements. 47
The Company
Non-
Distributable Distributable
Share Share Retained
Capital Premium Profits Total
Note RM’000 RM’000 RM’000 RM’000
Balance as at 1.6.2012 9,800 707 1,349 11,856
Total comprehensive income for
the financial year
- - 1,301 1,301
Dividends paid 25 - - (1,127) (1,127)
Balance at 31.5.2013/1.6.2013 9,800 707 1,523 12,030
Total comprehensive income for
the financial year
- - 1,327 1,327
Dividends paid 25 - - (1,225) (1,225) Balance at 31.5.2014 9,800 707 1,625 12,132
Statements of Cash Flows for the financial year ended 31 May 2014
The annexed notes form an integral part of these financial statements. 48
The Group The Company 2014 2013 2014 2013
Note RM’000 RM’000 RM’000 RM’000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax 5,372 6,666 1,394 1,378
Adjustments for:-
Amortisation of development expenditure 98 82 - - Depreciation of property, plant and equipment 391 381 * * Property, plant and equipment written off - 2 - - Loss/(Gain) on disposal of plant and equipment 12 (7) - - Goodwill written off 46 - - - Interest income (447) (482) (72) (60) Unrealised (gain)/loss on foreign exchange (122) 148 (74) 20
Operating profit before working capital changes 5,350 6,790 1,248 1,338 Decrease/(Increase) in inventories 471 (198) - - (Increase)/Decrease in trade and other
receivables
(636) (958) - 5 (Decrease)/Increase in trade and other
payables
(48) (180) 8 4
CASH FROM OPERATIONS 5,137 5,454 1,256 1,347
Tax refund 250 - 18 -
Tax paid (1,739) (2,090) (90) (96)
NET CASH FROM OPERATING ACTIVITIES 3,648 3,364 1,184 1,251 CASH FLOWS (FOR)/FROM INVESTING
ACTIVITIES
Increase in development expenditure (141) (18) - - Investment in subsidiary - - (2,030) -
Interest received 447 482 72 60
Proceeds from disposal of plant and equipment 24 19 - - -
Purchase of property, plant and equipment 6 (843) (549) - -
Repayment from subsidiaries - - - 3,379 511
NET CASH (FOR)/FROM INVESTING ACTIVITIES
(513) (66) 1,421 571
BALANCE CARRIED FORWARD 3,135 3,298 2,605 1,822
ANNUAL REPORT 2014
Statements of Cash Flows
for the financial year ended 31 May 2014 cont’d
The annexed notes form an integral part of these financial statements. 49
The Group The Company
2014 2013 2014 2013
Note RM’000 RM’000 RM’000 RM’000
BALANCE BROUGHT FORWARD 3,135 3,298 2,605 1,822
CASH FLOWS FOR FINANCING
ACTIVITY
Dividends paid (1,225) (1,127) (1,225) (1,127)
NET CASH FOR FINANCING
ACTIVITY
(1,225) (1,127) (1,225) (1,127)
EFFECT OF EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS
79 (88) - - NET INCREASE/(DECREASE) IN
CASH AND CASH EQUIVALENTS 1,989 2,083 1,380 695
CASH AND CASH EQUIVALENTS AT
BEGINNING OF THE FINANCIAL
YEAR 20,053 17,970 1,965 1,270
CASH AND CASH EQUIVALENTS AT
END OF THE FINANCIAL YEAR 26 22,042 20,053 3,345 1,965
* - Less than RM1,000.
Notes to the Financial Statements for the financial year ended 31 May 2014
50
1. GENERAL INFORMATION
The Company is incorporated as a public company limited by shares under the Companies Act 1965 in Malaysia.
The domicile of the Company is Malaysia. The registered office and principal place of business are as follows:-
Registered office : 31-04, Level 31
Menara Landmark
No.12, Jalan Ngee Heng
80000 Johor Bahru, Johor
Principal place of business : 12A, Jalan 20
Taman Sri Kluang
86000 Kluang, Johor
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of
the directors dated 08 September 2014.
2. PRINCIPAL ACTIVITIES
The Company is principally engaged in the business of investment holding. The principal activities of its
subsidiaries are set out in Note 5 to the financial statements. There have been no significant changes in the
nature of these activities during the financial year.
3. BASIS OF PREPARATION
The financial statements of the Group are prepared under the historical cost convention and modified to include
other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance
with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the
requirements of the Companies Act 1965 in Malaysia.
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ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
51
3. BASIS OF PREPARATION (Cont’d)
(a) During the current financial period, the Group has adopted the following new accounting standards and
interpretations (including the consequential amendments, if any):-
MFRSs and IC Interpretations (Including the Consequential Amendments)
MFRS 10 Consolidated Financial Statements
MFRS 11 Joint Arrangements
MFRS 12 Disclosure of Interests in Other Entities
MFRS 13 Fair Value Measurement
MFRS 119 (2011) Employee Benefits
MFRS 127 (2011) Separate Financial Statements
MFRS 128 (2011) Investments in Associates and Joint Ventures
Amendments to MFRS 7: Disclosures – Offsetting Financial Assets and Financial Liabilities
Amendments to MFRS 10, MFRS 11 and MFRS 12: Transition Guidance
IC Interpretation 20: Stripping Costs in the Production Phase of a Surface Mine
Annual Improvements to MFRS 2009 – 2011 Cycle
The adoption of the above accounting standards and interpretations (including the consequential
amendments) did not have any material impact on the Group’s financial statements except as follows:
MFRS 10 replaces the consolidation guidance in MFRS 127 and IC Interpretation 112. Under MFRS 10,
there is only one basis for consolidation, which is control. Extensive guidance has been provided in the
standard to assist in the determination of control. There will be no financial impact on the financial
statements of the Group upon its initial application.
MFRS 13 defines fair value, provides guidance on how to determine fair value and requires disclosures
about fair value measurements. The scope of MFRS 13 is broad; it applies to both financial instrument
items and non-financial instrument items for which other MFRSs require or permit fair value
measurements and disclosures about fair value measurements, except in specified circumstances.
MFRS 13 has been applied prospectively as of the beginning of the current financial year. There will be
no financial impact on the financial statements of the Company upon its initial application.
The amendments to MFRS 7 (Disclosures – Offsetting Financial Assets and Financial Liabilities) require
disclosures that will enable users of an entity’s financial statements to evaluate the effect or potential
effect of netting arrangements, including rights of set-off associated with the entity’s recognised financial
assets and recognised financial liabilities, on the entity’s financial position. There will be no financial
impact on the financial statements of the Company upon its initial application.
The Annual Improvements to MFRSs 2009 – 2011 Cycle contain amendments to MFRS 1, MFRS 101,
MFRS 116, MFRS 132 and MFRS 134. These amendments have no material impact on the financial
statements of the Company upon their initial application.
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
52
3. BASIS OF PREPARATION (Cont’d)
(b) The Group has not applied in advance the following accounting standards and interpretations (including
the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards
Board (MASB) but are not yet effective for the current financial period:-
MFRSs and IC Interpretations (Including The Consequential Amendments) Effective Date MFRS 9 (2009) Financial Instruments ) ) MFRS 9 (2010) Financial Instruments ) To be ) MFRS 9 Financial Instruments (Hedge Accounting and Amendments to MFRS 7, MFRS 9 and MFRS 139)
) announced )
) by MASB Amendments to MFRS 9 and MFRS 7: Mandatory Effective Date of MFRS 9 and Transition Disclosures
) )
MFRS 14 Regulatory Deferral Accounts 1 January 2016 Amendments to MFRS 10, MFRS 12 and MFRS 127 (2011): Investment Entities 1 January 2014 Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operations 1 January 2016 Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and Amortisation
1 January 2016
Amendments to MFRS 132: Offsetting Financial Assets and Financial Liabilities 1 January 2014 Amendments to MFRS 136: Recoverable Amount Disclosures for Non-financial Assets 1 January 2014 Amendments to MFRS 139: Novation of Derivatives and Continuation of Hedge
Accounting 1 January 2014 IC Interpretation 21 Levies 1 January 2014 Annual Improvements to MFRSs 2010 – 2012 Cycle 1 July 2014 Annual Improvements to MFRSs 2011 – 2013 Cycle 1 July 2014 Amendments to MFRS 119: Defined Benefit Plans: Employee Contribution 1 July 2014
[The rest of this page intentionally left blank]
ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
53
3. BASIS OF PREPARATION (Cont’d)
(b) The above accounting standards and interpretations (including the consequential amendments) are not
relevant to the Group’s operations except as follows:-
MFRS 9 (2009) introduces new requirements for the classification and measurement of financial assets.
Subsequently, this MFRS 9 was amended in year 2010 to include requirements for the classification and
measurement of financial liabilities and for derecognition (known as MFRS 9 (2010)). Generally, MFRS 9
replaces the parts of MFRS 139 that relate to the classification and measurement of financial instruments.
MFRS 9 divides all financial assets into 2 categories – those measured at amortised cost and those
measured at fair value, based on the entity’s business model for managing its financial assets and the
contractual cash flow characteristics of the instruments. For financial liabilities, the standard retains most
of the MFRS 139 requirements. An entity choosing to measure a financial liability at fair value will present
the portion of the change in its fair value due to changes in the entity’s own credit risk in other
comprehensive income rather than within profit or loss. There will be no financial impact on the financial
statements of the Group upon its initial application but may impact its future disclosures.
The amendments to MFRS 116 and MFRS 138 prohibit revenue-based depreciation/amortization
because revenue does not, as a matter of principle, reflect the way in which an item of property, plant and
equipment/intangible assets is used or consumed. Therefore, the Group will be changing its current
depreciation/amortisation policy that based on revenue to the straight-line method, upon its initial
application of the amendments. There will be no financial impact on the financial statements of the Group
upon its initial application but may impact its future disclosures.
The amendments to MFRS 132 provide the application guidance for criteria to offset financial assets and
financial liabilities. There will be no financial impact on the financial statements of the Group upon its
initial application but may impact its future disclosures.
The amendments to MFRS 136 remove the requirement to disclose the recoverable amount when a
cash-generating unit (CGU) contains goodwill or intangible assets with indefinite useful lives but there has
been no impairment. Therefore, there will be no financial impact on the financial statements of the Group
upon its initial application but may impact its future disclosures.
The amendments to MFRS 139 allow hedge accounting to continue in a situation where a derivative,
which has been designated as a hedging instrument, is novated (i.e. parties have agreed to replace their
original counterparty with a new one) to effect clearing with a central counterparty as a result of laws or
regulations, if specific conditions are met. There will be no financial impact on the financial statements of
the Group upon its initial application but may impact its future disclosures.
IC Interpretation 21 clarifies the accounting for an obligation to pay a levy that is not income tax. The
obligation event that gives rise to a liability is the event identified by the legislation that triggers the
obligation to pay the levy. The fact that an entity is economically compelled to continue operating in a
future period, or prepares its financial statements under the going concern assumption, does not create
an obligation. The application of the interpretation to liabilities arising from emissions trading schemes is
optional.
The Annual Improvements to MFRSs 2010 – 2012 Cycle contain amendments to MFRS 2, MFRS 3,
MFRS 8, MFRS 13, MFRS 116, MFRS 124 and MFRS 138. These amendments have no material impact
on the financial statements of the Group upon their initial application but may impact its future
disclosures.
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
54
3. BASIS OF PREPARATION (Cont’d)
(b) The above accounting standards and interpretations (including the consequential amendments) are not
relevant to the Group’s operations except as follows (Cont’d):-
The Annual Improvements to MFRSs 2011 – 2013 Cycle contain amendments to MFRS 1, MFRS 3,
MFRS 13, MFRS 140. These amendments have no material impact on the financial statements of the
Group upon their initial application but may impact its future disclosures.
The amendments to MFRS 119 simplify the accounting treatment of contributions from employees and
third parties to defined benefit plans. Contributions that are independent of the number of years of service
shall be recognised as a reduction in the service cost in the period in which the related service is
rendered. For contributions that are dependent on the number of years of service, the Group is required
to attribute those contributions to periods of service using either based on the plan’s contribution formula
or on a straight-line basis, as appropriate. There will be no financial impact on the financial statements of
the Group upon its initial application but may impact its future disclosures.
4. SIGNIFICANT ACCOUNTING POLICIES
(a) Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated by the directors and management and are based on
historical experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. The estimates and judgements that affect the application of the
Group’s accounting policies and disclosures, and have a significant risk of causing a material adjustment
to the carrying amounts of assets, liabilities, income and expenses are discussed below:-
(i) Depreciation of Property, Plant and Equipment
The estimates for the residual values, useful lives and related depreciation charges for the property,
plant and equipment are based on commercial and production factors which could change
significantly as a result of technical innovations and competitors’ actions in response to the market
conditions.
The Group anticipates that the residual values of its property, plant and equipment will be
insignificant. As a result, residual values are not being taken into consideration for the computation
of the depreciable amount.
Changes in the expected level of usage and technological development could impact the economic
useful lives and the residual values of these assets, therefore future depreciation charges could be
revised.
(ii) Income Taxes
There are certain transactions and computations for which the ultimate tax determination may be
different from the initial estimate. The Group recognises tax liabilities based on its understanding of
the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of
business. Where the final outcome of these matters is different from the amounts that were initially
recognised, such difference will impact the income tax and deferred tax provisions in the year in
which such determination is made.
ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
55
4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(a) Critical Accounting Estimates and Judgements (Cont’d)
(iii) Impairment of Non-financial Assets
When the recoverable amount of an asset is determined based on the estimate of the value-in-use of
the cash-generating unit to which the asset is allocated, the management is required to make an
estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable
discount rate in order to determine the present value of those cash flows.
(iv) Amortisation of Development Costs
Changes in the expected level of usage and technological development could impact the economic
useful lives. Therefore, future amortisation charges could be revised.
(v) Write-down of Inventories
Reviews are made periodically by management on damaged, obsolete and slow-moving inventories.
These reviews require judgement and estimates. Possible changes in these estimates could result in
revisions to the valuation of inventories.
(vi) Impairment of Trade and Other Receivables
An impairment loss is recognised when there is objective evidence that a financial asset is impaired.
Management specifically reviews its loan and receivables financial assets and analyses historical
bad debts, customer concentrations, customer creditworthiness, current economic trends and
changes in the customer payment terms when making a judgement to evaluate the adequacy of the
allowance for impairment losses. Where there is objective evidence of impairment, the amount and
timing of future cash flows are estimated based on historical loss experience for assets with similar
credit risk characteristics. If the expectation is different from the estimation, such difference will
impact the carrying value of receivables.
(b) Basis of Consolidation
The consolidated financial statements include the financial statements of the Company and its
subsidiaries made up to the end of the reporting period.
Subsidiaries are entities (including structured entities) controlled by the Group. The Group controls an
entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over the entity.
Subsidiaries are consolidated from the date on which control is transferred to the Group up to the
effective date on which control ceases, as appropriate.
Intragroup transactions, balances, income and expenses are eliminated on consolidation. Where
necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of
accounting policies with those of the Group.
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
56
4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(b) Basis of Consolidation (Cont’d)
(i) Business Combinations
All subsidiaries are consolidated using the purchase method except for the subsidiary, Hexa Analisa
Sdn. Bhd., which are accounted for under the merger method.
Under the purchase method, the results of the subsidiaries acquired or disposed off are included
from the date of acquisition or up to the date of disposal. At the date of acquisition, the fair values of
the subsidiaries’ net assets are determined and these values are reflected in the consolidated
financial statements. The cost of acquisition is measured at the aggregate of the fair values, at the
date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by
the Group in exchange for control of the acquiree, plus any costs directly attributable to the business
combination.
Non-controlling interests are initially measured at their share of the fair values of the identifiable
assets and liabilities of the acquiree as at the date of acquisition.
Under the merger method of accounting, the results of subsidiaries are presented as if the merger
had been effected throughout the current and previous years. In the consolidated financial
statements, the cost of the merger is cancelled with the nominal values of the shares received. Any
resulting debit difference is shown as merger deficit.
(ii) Non-controlling Interests
Non-controlling interests are presented within equity in the consolidated statement of financial position,
separately from the equity attributable to owners of the Company. Profit or loss and each component of
other comprehensive income are attributed to the owners of the Company and to the non-controlling
interests. Total comprehensive income is attributed to non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
At the end of each reporting period, the carrying amount of non-controlling interests is the amount of
those interests at initial recognition plus the non-controlling interests’ share of subsequent changes
in equity.
(iii) Changes in Ownership Interests in Subsidiaries without Change of Control
All changes in the parent’s ownership interest in a subsidiary that do not result in a loss of control are
accounted for as equity transactions. Any difference between the amount by which the non-
controlling interest is adjusted and the fair value of consideration paid or received is recognised
directly in equity and of the Group.
ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
57
4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(b) Basis of Consolidation (Cont’d)
(iv) Loss of Control
Upon the loss of control of a subsidiary, the Group recognises any gain or loss on disposal in profit
or loss which is calculated as the difference between:-
(i) the aggregate of the fair value of the consideration received and the fair value of any retained
interest in the former subsidiary; and
(ii) the previous carrying amount of the assets (including goodwill), and liabilities of the former
subsidiary and any non-controlling interests.
Amounts previously recognised in other comprehensive income in relation to the former
subsidiary are accounted for in the same manner as would be required if the relevant assets or
liabilities were disposed off (i.e. reclassified to profit or loss or transferred directly to retained
profits). The fair value of any investments retained in the former subsidiary at the date when
control is lost is regarded as the fair value on initial recognition for subsequent accounting under
MFRS 139 or, when applicable, the cost on initial recognition of an investment in an associate
or a jointly venture.
(c) Functional and Foreign Currencies
(i) Functional and Presentation Currency
The individual financial statements of each entity in the Group are presented in the currency of the
primary economic environment in which the entity operates, which is the functional currency.
The consolidated financial statements are presented in Ringgit Malaysia (“RM”) which is the
Company’s functional and presentation currency.
(ii) Transactions and Balances
Transactions in foreign currencies are converted into the respective functional currencies on initial
recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary
assets and liabilities at the end of the reporting period are translated at the rates ruling as of that
date. Non-monetary assets and liabilities are translated using exchange rates that existed when the
values were determined. All exchange differences are recognised in profit or loss.
(iii) Foreign Operations
Assets and liabilities of foreign operations are translated to RM at the rates of exchange ruling at the
end of the reporting period. Revenues and expenses of foreign operations are translated at
exchange rates ruling at the dates of the transactions. All exchange differences arising from
translation are taken directly to other comprehensive income and accumulated in equity under
translation reserve. On disposal of a foreign operation, the cumulative amount recognised in other
comprehensive income relating to that particular foreign operation is reclassified from equity to profit
or loss.
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
58
4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(c) Functional and Foreign Currencies (Cont’d)
(iii) Foreign Operations (Cont’d)
Goodwill and fair value adjustments arising from the acquisition of foreign operations are treated
as assets and liabilities of the foreign operations and are recorded in the functional currency of the
foreign operations and translated at the closing rate at the end of the reporting period except for
those business combinations that occurred before the date of transition (1 June 2011) which are
treated as assets and liabilities of the Company and are not retranslated.
(d) Financial Instruments
Financial instruments are recognised in the statements of financial position when the Group has become
a party to the contractual provisions of the instruments.
Financial instruments are classified as liabilities or equity in accordance with the substance of the
contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified
as a liability, are reported as an expense or income. Distributions to holders of financial instruments
classified as equity are charged directly to equity.
Financial instruments are offset when the Group has a legally enforceable right to offset and intends to
settle either on a net basis or to realise the asset and settle the liability simultaneously.
A financial instrument is recognised initially at its fair value. Transaction costs that are directly attributable
to the acquisition or issue of the financial instrument (other than a financial instrument at fair value
through profit or loss) are added to/deducted from the fair value on initial recognisation, as appropriate.
Transaction costs on the financial instrument at fair value through profit or loss are recognised
immediately in profit or loss.
Financial instruments recognised in the statements of financial position are disclosed in the individual
policy statement associated with each item.
(i) Financial Assets
On initial recognition, financial assets are classified as either financial assets at fair value through
profit or loss, held-to-maturity investments, loans and receivables financial assets, or available-for-
sale financial assets, as appropriate.
Financial Assets at Fair Value Through Profit or Loss
Financial assets are classified as financial assets at fair value through profit or loss when the
financial asset is either held for trading or is designated to eliminate or significantly reduce a
measurement or recognition inconsistency that would otherwise arise. Derivatives are also
classified as held for trading unless they are designated as hedges.
Financial assets at fair value through profit or loss are stated at fair value, with any gains or
losses arising on remeasurement recognised in profit or loss. Dividend income from this
category of financial assets is recognised in profit or loss when the Group’s right to receive
payment is established.
ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
59
4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(d) Financial Instruments (Cont’d)
(i) Financial Assets (Cont’d)
Financial Assets at Fair Value Through Profit or Loss(Cont’d)
Financial assets at fair value through profit or loss could be presented as current or non-current.
Financial assets that are held primarily for trading purposes are presented as current whereas
financial assets that are not held primarily for trading purpose are presented as current or non-
current based on the settlement date.
As at the end of the reporting period, there were no financial assets classified under this
category.
Held-to-maturity Investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturities that the management has the positive intention and ability to hold
to maturity. Held-to-maturity investments are measured at amortised cost using the effective
interest method less any impairment loss, with interest income recognised in profit or loss on an
effective yield basis.
Held-to-maturity investments are classified as non-current assets, except for those having
maturity within 12 months after the reporting date which are classified as current assets.
As at the end of the reporting period, there were no financial assets classified under this
category.
Loans and Receivables Financial Assets
Trade receivables and other receivables that have fixed or determinable payments that are not
quoted in an active market are classified as loans and receivables financial assets. Loans and
receivables financial assets are measured at amortised cost using the effective interest method,
less any impairment loss. Interest income is recognised by applying the effective interest rate,
except for short-term receivables when the recognition of interest would be immaterial.
Loans and receivables financial assets are classified as current assets, except for those having
settlement dates later than 12 months after the reporting date which are classified as non-
current assets.
Available-for-sale Financial Assets
Available-for-sale financial assets are non-derivative financial assets that are designated in this
category or are not classified in any of the other categories.
After initial recognition, available-for-sale financial assets are remeasured to their fair values at
the end of each reporting period. Gains and losses arising from changes in fair value are
recognised in other comprehensive income and accumulated in the fair value reserve, with the
exception of impairment losses. On derecognition, the cumulative gain or loss previously
accumulated in the fair value reserve is reclassified from equity into profit or loss.
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
60
4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(d) Financial Instruments (Cont’d)
(i) Financial Assets (Cont’d)
Available-for-sale Financial Assets(Cont’d)
Dividends on available-for-sale equity instruments are recognised in profit or loss when the
Group’s right to receive payments is established.
Investments in equity instruments whose fair value cannot be reliably measured are measured
at cost less accumulated impairment losses, if any.
Available-for-sale financial assets are classified as non-current assets unless they are expected
to be realised within 12 months after the reporting date.
As at the end of the reporting period, there were no financial assets classified under this
category.
(ii) Financial Liabilities
All financial liabilities are initially at fair value plus directly attributable transaction costs and
subsequently measured at amortised cost using the effective interest method other than those
categorised as fair value through profit or loss.
Fair value through profit or loss category comprises financial liabilities that are either held for trading
or are designated to eliminate or significantly reduce a measurement or recognition inconsistency
that would otherwise arise. Derivatives are also classified as held for trading unless they are
designated as hedges.
Financial liabilities are classified as current liabilities unless the Group has an unconditional right to
defer settlement of the liability for at least 12 months after the reporting date.
(iii) Equity Instruments
Instruments classified as equity are measured at cost and are not remeasured subsequently.
Ordinary shares
Incremental costs directly attributable to the issue of new ordinary shares or options are shown in
equity as a deduction, net of tax, from proceeds.
Dividends on ordinary shares are recognised as liabilities when approved for appropriation.
(iv) Derecognition
A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash
flows from the financial asset expire or the financial asset is transferred to another party without
retaining control or substantially all risks and rewards of the asset. On derecognition of a financial
asset, the difference between the carrying amount and the sum of the consideration received
(including any new asset obtained less any new liability assumed) and any cumulative gain or loss
that had been recognised in equity is recognised in profit or loss.
ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
61
4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(d) Financial Instruments (Cont’d)
(iv) Derecognition (Cont’d)
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the
contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference
between the carrying amount of the financial liability extinguished or transferred to another party and
the consideration paid, including any non-cash assets transferred or liabilities assumed, is
recognised in profit or loss.
(e) Investments in Subsidiaries
Investments in subsidiaries are stated at cost in the statement of financial position of the Company, and
are reviewed for impairment at the end of the reporting period if events or changes in circumstances
indicate that the carrying values may not be recoverable. The cost of the investments includes transaction
costs.
On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds and
the carrying amount of the investments is recognised in profit or loss.
(f) Property, Plant and Equipment
Property, plant and equipment, other than freehold land, are stated at cost less accumulated depreciation
and impairment losses, if any.
Freehold land is stated at cost less impairment losses, if any and is not depreciated.
Depreciation is charged to profit or loss on the straight-line method to write off the depreciable amount of
the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset
becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates
used for this purpose are:-
Building 3% Plant and machinery 10- 20% Motor vehicles 10% Office equipment, furniture and fittings 10%
The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at the
end of each reporting period to ensure that the amounts, method and periods of depreciation are
consistent with previous estimates and the expected pattern of consumption of the future economic
benefits embodied in the items of the property, plant and equipment.
Subsequent costs are included in the assets’ carrying amount or recognised as a separate asset, as
appropriate, only when the cost is incurred and it is probable that the future economic benefits associated
with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying
amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant
and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of
dismantling and removing the asset and restoring the site on which it is located for which the Group is
obligated to incur when the asset is acquired, if applicable.
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
62
4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(f) Property, Plant and Equipment (Cont’d)
Plant and machinery under construction represents assets which are not ready for commercial use at the
end of the reporting period. Plant and machinery under construction are stated at cost, and are
depreciated accordingly when the assets are completed and ready for commercial use.
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use. Any gain or loss arising from derecognition of the asset is recognised
in the profit or loss.
(g) Intangible Assets
(i) Research and Development Expenditure
Research expenditure is recognised as an expense when it is incurred.
Development expenditure is recognised as an expense except that expenditure incurred on
development projects are capitalised as non-current assets to the extent that such expenditure is
expected to generate future economic benefits. Development expenditure is capitalised if, and only if
an entity can demonstrate all of the following:-
(i) its ability to measure reliably the expenditure attributable to the asset under development;
(ii) the product or process is technically and commercially feasible;
(iii) its future economic benefits are probable;
(iv) its intention to complete and the ability to use or sell the developed asset; and
(v) the availability of adequate technical, financial and other resources to complete the asset under
development.
Capitalised development expenditure is measured at cost less accumulated amortisation and
impairment losses, if any. Development expenditure initially recognised as an expense is not
recognised as assets in the subsequent period.
The development expenditure is amortised on a straight-line method over a period of 5 years when
the products are ready for sale or use. In the event that the expected future economic benefits are
no longer probable of being recovered, the development expenditure is written down to its
recoverable amount.
(ii) Industrial Operating Right
Industrial operating right represents costs incurred by the Group to obtain Association of Short
Circuit Testing Authority (“ASCTA”) certifications for capabilities to design, construct and develop
low-voltage switchboards to meet international standards. As the ASCTA certifications do not have
any expiry date, the Group does not amortise these costs. Instead, impairment is tested annually or
more frequently if events or changes in circumstances indicate that the industrial operating right
might be impaired.
ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
63
4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(h) Impairment
(i) Impairment of Financial Assets
All financial assets (other than those categorised at fair value through profit or loss), are assessed at
the end of each reporting period whether there is any objective evidence of impairment as a result of
one or more events having an impact on the estimated future cash flows of the asset. For an equity
instrument, a significant or prolonged decline in the fair value below its cost is considered to be
objective evidence of impairment.
An impairment loss in respect of held-to-maturity investments and loans and receivables financial
assets is recognised in profit or loss and is measured as the difference between the asset ’s carrying
amount and the present value of estimated future cash flows, discounted at the financial asset’s
original effective interest rate.
An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and
is measured as the difference between its cost (net of any principal payment and amortisation) and
its current fair value, less any impairment loss previously recognised in the fair value reserve. In
addition, the cumulative loss recognised in other comprehensive income and accumulated in equity
under fair value reserve, is reclassified from equity to profit or loss.
With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of
the impairment loss decreases and the decrease can be related objectively to an event occurring
after the impairment was recognised, the previously recognised impairment loss is reversed through
profit or loss to the extent that the carrying amount of the financial asset at the date the impairment is
reversed does not exceed what the amortised cost would have been had the impairment not been
recognised. In respect of available-for-sale equity instruments, impairment losses previously
recognised in profit or loss are not reversed through profit or loss. Any increase in fair value
subsequent to an impairment loss made is recognised in other comprehensive income.
(ii) Impairment of Non-Financial Assets
The carrying values of assets, other than those to which MFRS 136 - Impairment of Assets does not
apply, are reviewed at the end of each reporting period for impairment when there is an indication
that the assets might be impaired. Impairment is measured by comparing the carrying values of the
assets with their recoverable amounts. The recoverable amount of the assets is the higher of the
assets’ fair value less costs to sell and their value-in-use, which is measured by reference to
discounted future cash flow.
An impairment loss is recognised in profit or loss immediately.
In respect of assets other than goodwill, and when there is a change in the estimates used to
determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is
treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying
amount of the asset that would have been determined (net of amortisation and depreciation) had no
impairment loss been recognised. The reversal is recognised in profit or loss immediately.
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
64
4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(i) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost of raw materials is determined on
the first-in-first-out basis and comprises the cost of materials and incidentals incurred in bringing the
inventories to their present location and condition. Cost of finished goods and work-in-progress includes
the cost of materials, labour and an appropriate proportion of production overheads.
Net realisable value represents the estimated selling price less the estimated costs of completion and the
estimated costs necessary to make the sale.
(j) Income Taxes
Income taxes for the year comprise current and deferred tax.
Current tax is the expected amount of income taxes payable in respect of the taxable profit for the
reporting period and is measured using the tax rates that have been enacted or substantively enacted at
the end of the reporting period.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and
unused tax credits to the extent that it is probable that future taxable profit will be available against which
the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The
carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to
the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or
part of the deferred tax assets to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period
when the asset is realised or the liability is settled, based on the tax rates that have been enacted or
substantively enacted at the end of the reporting period.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax
assets against current tax liabilities and when the deferred income taxes relate to the same taxation
authority.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss.
Deferred tax items are recognised in correlation to the underlying transactions either in other
comprehensive income or directly in equity and deferred tax arising from a business combination is
included in the resulting goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s
identifiable assets, liabilities and contingent liabilities over the business combination costs
ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
65
4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(k) Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand, bank balances and demand deposits that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value
with original maturity periods of three months or less.
(l) Employee Benefits
(i) Short-term Benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are
measured on an undiscounted basis and are recognised in profit or loss in the period in which the
associated services are rendered by employees of the Company.
(ii) Defined Contribution Plans
The Company's contributions to defined contribution plans are recognised in profit or loss in the
period to which they relate. Once the contributions have been paid, the Company has no further
liability in respect of the defined contribution plans.
(m) Related Parties
A party is related to an entity (referred to as the “reporting entity”) if:-
(a) A person or a close member of that person’s family is related to a reporting entity if that person:-
(i) has control or joint control over the reporting entity;
(ii) has significant influence over the reporting entity; or
(iii) is a member of the key management personnel of the reporting entity or of a parent of the
reporting entity.
(b) An entity is related to a reporting entity if any of the following conditions applies:-
(i) The entity and the reporting entity are members of the same group (which means that each
parent, subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of
a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third party and the other entity is an associate of the third entity.
(v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting
entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the
sponsoring employers are also related to the reporting entity.
(vi) The entity is controlled or jointly controlled by a person identified in (a) above.
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
66
4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(m) Related Parties (Cont’d)
(b) An entity is related to a reporting entity if any of the following conditions applies: - (Cont’d)
(vii) A person identified in (a)(i) above has significant influence over the entity or is a member of the
key management personnel of the entity (or of a parent of the entity).
Close members of the family of an individual are those family members who may be expected to
influence, or be influenced by, that individual in their dealings with the entity.
(n) Contingent Liabilities
A contingent liability is a possible obligation that arises from past events and whose existence will only be
confirmed by the occurrence of one or more uncertain future events not wholly within the control of the
Group. It can also be a present obligation arising from past events that is not recognised because it is not
probable that outflow of economic resources will be required or the amount of obligation cannot be
measured reliably.
A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a
change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as
a provision.
(o) Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is
directly observable or estimated using a valuation technique. The measurement assumes that the
transaction takes place either in the principal market or in the absence of a principal market, in the most
advantageous market. For non-financial asset, the fair value measurement takes into account a market’s
participant’s ability to generate economic benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset in its highest and best use.
For financial reporting purposes, the fair value measurements are analysed into level 1 to level 3 as
follows:-
Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liability that
the entity can access at the measurement date;
Level 2: Inputs are inputs, other that quoted prices included within level 1, that are observable for
the asset or liability, either directly or indirectly; and
Level 3: Inputs are unobservable inputs for the asset or liability.
The transfer of fair value between levels is determined as of the date of the event or change in
circumstances that caused the transfer.
ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
67
4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(p) Revenue and Other Income
(i) Sale of Goods
Revenue is recognised upon delivery of goods and customers’ acceptance and where applicable,
net of sales tax returns and trade discounts.
(ii) Dividend Income
Dividend income from investment is recognised when the right to receive dividend payment is
established.
(iii) Interest Income
Interest income is recognised on an accrual basis using the effective interest method.
(q) Operating Segments
An operating segment is a component of the Group that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any
of the Group’s other components. An operating segment’s operating results are reviewed regularly by the
directors to make decisions about resources to be allocated to the segment and assess its performance,
and for which discrete financial information is available.
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Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
68
5. INVESTMENT IN SUBSIDIARIES
THE COMPANY 2014 2013 RM’000 RM’000 Unquoted shares, at cost - in Malaysia 6,129 4,099 - outside Malaysia 1 1
6,130 4,100
Quasi loan 2,690 5,994
8,820
10,094
Quasi loans represent advances to the subsidiaries of which the settlement is neither planned nor likely to occur in the foreseeable future. These amounts are, in substance, a part of the Company’s net investment in the subsidiaries. The quasi loans are stated at cost less accumulated impairment losses, if any.
The details of the subsidiaries are as follows:-
Name of Companies
Country of Incorporation
Effective Equity Interest
Principal Activities
2014 2013 Direct subsidiaries:
Hexa Analisa Sdn. Bhd. Malaysia 100% 100% Formulation of advanced polymer matrix fibre composites, manufacturing and sales of electrical insulators, electrical enclosures and meter boards
Fibon UK Limited # UK 100% 100% Trading of electrical insulators and other relevant industry products
Fibon Australia Pty Ltd * Australia 100% 100% Manufacturing and sales of electrical insulators and trading of relevant industry products
Fibon Electric (M) Sdn. Bhd. Malaysia 100% 100% Manufacturing, supplying and selling of switchboard equipment parts
Fibon Capital Sdn. Bhd. (Formerly known as OPES Management Sdn. Bhd.)
Malaysia 100% - Factoring, leasing, development finance and building credit activities
* Audited by auditor other than Crowe Horwath.
# Based on unaudited figures.
ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
69
6. PROPERTY, PLANT AND EQUIPMENT
At Depreciation Exchange At 1.6.2013 Additions Transfer Disposal Charge Difference 31.5.2014 The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Net Book Value Freehold land 1,100 - - - - - 1,100 Building 2,171 292 - - (71) - 2,392 Plant and machinery 1,426 194 287 (36) (231) 2 1,642 Motor vehicles 398 178 - - (65) - 511 Office equipment, furniture and fittings 137 42 - - (24) 1 156 Plant and machinery under construction 309 137 (287) - - - 159 5,541 843 - (36) (391) 3 5,960
At Written Depreciation Exchange At 1.6.2012 Additions Transfer Disposal Off Charge Difference 31.5.2013 The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Net Book Value Freehold land 1,100 - - - - - - 1,100 Building 2,158 60 - - - (47) - 2,171 Plant and machinery 1,461 90 137 (1) - (259) (2) 1,426 Motor vehicles 366 86 - - - (55) 1 398 Office equipment, furniture and fittings 132 27 - * (2) (20) - 137 Plant and machinery under
construction 135 322
(137)
(11) - - - 309
5,352 585 - (12) (2) (381) (1) 5,541
* Less than RM1,000
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Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
70
6. PROPERTY, PLANT AND EQUIPMENT (Cont’d)
At Accumulated Net Book Cost Depreciation Value The Group RM’000 RM’000 RM’000 At 2014 Freehold land 1,100 - 1,100 Building 2,558 (166) 2,392 Plant and machinery 2,575 (933) 1,642 Motor vehicles 757 (246) 511 Office equipment, furniture and fittings 251 (95) 156 Plant and machinery under construction 159 - 159
7,400 (1,440) 5,960
At Accumulated Net Book Cost Depreciation Value The Group RM’000 RM’000 RM’000 At 2013 Freehold land 1,100 - 1,100 Building 2,266 (95) 2,171 Plant and machinery 2,152 (726) 1,426 Motor vehicles 579 (181) 398 Office equipment, furniture and fittings 209 (72) 137 Plant and machinery under construction 309 - 309
6,615 (1,074) 5,541
The Group 2014 2013 RM’000 RM’000 Cost of property, plant and equipment purchased 843 585 Transferred from development expenditure - (36)
Cash disbursed for purchase of property, plant and equipment
843 549
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ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
71
7. INTANGIBLE ASSETS
Intangible assets can be broken down into:- The Group 2014 2013 RM’000 RM’000
Development expenditure 310 408 Industrial operating rights 877 736
1,187 1,144
The Group 2014 2013 RM’000 RM’000
(i) Development Expenditure
Net book value at 1 June 408 508 Capitalised - 18 Transferred to machinery - (36) Amortisation charge for the year (98) (82)
Carrying value at 31 May 310 408
The Group 2014 2013 RM’000 RM’000
At cost 490 490 Accumulated amortisation (180) (82)
310 408
The Group 2014 2013 RM’000 RM’000 (ii) Industrial Operating Rights
At cost 877 736
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Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
72
8. INVENTORIES
The Group
2014 2013
RM’000 RM’000
At cost:-
Raw materials 549 1,014
Work-in-progress 225 228
Finished goods 198 181
Trading goods 17 37
989 1,460
None of the inventories are carried at net realisable value.
9. TRADE RECEIVABLES
The Group’s normal trade credit terms range from 30 to 180 days (2013: 30 to 180 days). Other credit terms are
assessed and approved on a case-by-case basis.
10. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
The Group The Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Other receivables 61 59 - - Deposits 34 37 1 1 Prepayments 53 40 - - Deposit paid for purchase of freehold land 789 - - -
937 136
1 1
11. DEPOSITS WITH LICENSED BANKS
The deposits with licensed banks of the Group and of the Company at the end of the reporting period bore
effective interest rates ranging from 0.10% to 6.00% (2013: 0.10% to 6.00%) per annum. The deposits have
maturity periods ranging from 7 to 365 days (2013: 7 to 365 days).
ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
73
12. SHARE CAPITAL
The Company
2014 2013
Number Number
Par Of Share Par Of Share
Value Shares Capital Value Shares Capital
RM '000 RM’000 RM '000 RM’000
Ordinary Shares
Authorised 0.10 250,000 25,000 0.10 250,000 25,000
Issued and Fully Paid -Up 0.10 98,000 9,800 0.10 98,000 9,800
13. SHARE PREMIUM
The share premium is not distributable by way of cash dividends and may be utilised in the manner set out in
Section 60 (3) of the Companies Act 1965.
14. OTHER RESERVES
Foreign
Currency
Translation Merger
Reserve Deficit Total
RM’000 RM’000 RM’000
At 1.6.2012 (2) (2,600) (2,602)
Movement during the year (27) - (27)
At 1.6.2013/31.5.2013 (29) (2,600) (2,629)
Movement during the year 14 - 14 At 31.5.2014 (15) (2,600) (2,615)
The nature and purpose of the reserve are as follow:-
Foreign Currency Translation Reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of
the financial statements of foreign operation whose functional currencies are different from that of the Group’s
presentation currency. It is also used to record the exchange differences arising from monetary items which form
part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the
functional currency of the reporting entity or the foreign operation.
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
74
14. OTHER RESERVES (Cont’d)
Merger Deficit
The merger deficit in the financial year was related to the subsidiary which was consolidated under the merger
method of accounting.
The merger deficit arose from the difference between the carrying value of the investment and the nominal value
of the shares of the subsidiary upon consolidation using merger accounting principles.
15. RETAINED PROFITS
At the end of the reporting period, the Company will be able to distribute dividends out of its entire retained
profits under the single tier tax system.
16. DEFERRED TAX LIABILITIES
The Group 2014 2013 RM’000 RM’000 At 1 June As previously stated 540 633 Revaluation of land and building 173 173
As restated 713 806
Recognised in profit or loss (Note 23) (68) (93) Exchange difference * * At 31 May 645 713
The deferred taxation arises as a result of:-
The Group 2014 2013 RM’000 RM’000 Deferred tax liabilities An excess of carrying value over tax base 340 350 Development expenditure capitalised 141 102 Industrial operating rights capitalised 184 184 Revaluation of land and building 173 173
Gross deferred tax liabilities 838 809
Deferred tax assets Unabsorbed tax losses 141 63 Unutilised capital allowances 52 33 Gross deferred tax assets
193 96
Net deferred tax liabilities 645 713
* Less than RM1,000.
ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
75
16. DEFERRED TAX LIABILITIES (Cont’d)
At the end of the reporting period, the Group has tax losses and capital allowances of approximately RM588,000 and RM217,000 (2013: RM252,000 and RM49,000) respectively that are available for offset against future taxable profits of the subsidiary in which the losses and capital allowances arose. No deferred tax assets are recognised in respect of these items as it is not probable that taxable profits of the subsidiary will be available against which the deductible temporary differences can be utilised.
17. TRADE PAYABLES
The normal trade credit terms granted to the Group ranging from 30 to 90 days (2013: 30 to 90 days).
18. OTHER PAYABLES AND ACCRUALS
The Group The Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Other payables 192 122 - - Accrued expenses 105 109 50 42 Payroll liabilities 232 192 - -
529 423
50 42
19. REVENUE
The Group The Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Dividend income - - 1,200 1,350 Management fee received - - 601 603 Sale of goods 15,318 16,674 - -
15,318 16,674 1,801 1,953
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Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
76
20. PROFIT BEFORE TAX
The Group The Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000
Profit before tax is arrived at after charging/(crediting):-
Audit fee 68 64 18 18 Amortisation of development expenditure 98 82 - - Depreciation of property, plant and equipment 391 381 * * Directors’ fee 260 246 260 246 Directors’ non-fee emoluments 1,256 861 6 8 Goodwill written off 46 - - - Loss on disposal of plant and equipment 12 - - - Property, plant and equipment written off - 2 - - Rental of premises 60 68 - - Research and development expenditure 628 591 - - (Gain)/Loss on foreign exchange - realised (714) (56) (103) 51 - unrealised (122) 148 (74) 20
Gain on disposal of plant and equipment - (7) - - Interest income - loans and receivables financial assets (447) (482) (72) (60)
* - Less than RM1,000.
Included in research and development expenditure are employee benefits which comprised:-
- Director’s remuneration - EPF contribution of RM77,520 (2013: RM67,640)
- Director’s remuneration - emoluments of RM408,620 (2013: RM356,620)
- Staff costs of RM137,255 (2013: RM164,844)
21. DIRECTORS’ REMUNERATION
The aggregate amount of emoluments received and receivable by directors of the Group and of the Company
during the financial year are as follows:-
The breakdown of the directors’ remuneration:-
The Group The Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Non-executive directors:- - Fees 72 72 72 72 - Other emoluments 6 8 6 8
78 80 78 80
Executive directors:-
- Fees 188 174 188 174 -Salaries, bonus and other emoluments 1,462 1,078 - - - Employees provident fund 274 200 - -
1,924 1,452 188 174
2,002 1,532 266 254
ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
77
21. DIRECTORS’ REMUNERATION (Cont’d)
The breakdown of the categories charged out to:-
The Group The Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000
Profit or loss 2,002 1,532 266 254
22. EMPLOYEE BENEFITS
The Group The Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Short-term employee benefits 3,263 2,639 194 130 Contribution to a defined contribution
plan 421 337 1 23 16
3,684 2,976 217 146
Included in employee benefits is key management personnel compensation as disclosed in Note 28 to the
financial statements.
23. INCOME TAX EXPENSE
The Group The Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Current tax expense:- - for the current financial year 1,363 1,714 74 78 - (over)/ under provision in previous financial years (19)
65
(7)
(1)
- foreign tax 93 75 - -
1,437 1,854 67 77
Deferred tax (Note 16):-
- Relating to origination or reversal of temporary differences 44 (56) - -
- Effect of changes in corporate tax rate from 25% to 24% on deferred tax (78) - - -
- Over provision in previous financial years (34) (37) - -
(68) (93) - -
Total tax expense 1,369 1,761 67 77
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
78
A reconciliation of income tax expense applicable to the profit before taxation at the statutory tax rate to income
tax expense at the effective tax rate of the Group and the Company is as follows:-
23. INCOME TAX EXPENSE (Cont’d)
The Group The Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000
Profit before tax 5,372 6,666 1,394 1,378
Tax at the statutory tax rate of 25% 1,343 1,666 349 345
Tax effects of:- - controlled transfer of assets - (42) - - - non-deductible expenses 63 72 25 71 - non-taxable income - - (300) (338) Deferred tax assets not recognised during
the financial year 78 25 - - (Over)/Under provision in previous
financial year:- - income tax (19) 65 (7) (1) - deferred taxation (34) (37) - - Effect of changes in corporate tax rate
from 25% to 24% on deferred tax (78) - - - Effect of different tax rates in foreign
jurisdiction 16 12 - -
Tax expense for the financial year 1,369 1,761 67 77
24. EARNINGS PER SHARE
The basic earnings per share (“EPS”) is arrived at by dividing the Group’s profit attributable to the equity holders of
the Company of RM4,003,000 (2013: RM4,905,000) by the weighted average number of ordinary shares in issue
during the financial year of 98,000,000 (2013: 98,000,000).
The fully diluted earnings per share for the Group are not presented as there were no potential dilutive ordinary
shares outstanding at the end for the reporting period.
25. DIVIDENDS
The Group/
The Company
2014 2013
RM’000 RM’000
Recognised during the financial year:-
- first and final single tier dividend of 1.25 sen per ordinary share in respect of financial year ended 31 May 2013 1,225 -
- first and final single tier dividend of 1.15 sen per ordinary share in respect of financial year ended 31 May 2012 - 1,127
1,225 1,127
ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
79
25. DIVIDENDS (Cont’d)
At the forthcoming Annual General Meeting, a first and final single tier dividend of 1.10 sen per ordinary share amounting to RM1,078,000 in respect of the financial year ended 31 May 2014 will be proposed for shareholders’ approval. The financial statements for the current financial year will not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for as a liability in the financial year ending 31 May 2015.
26. CASH AND CASH EQUIVALENTS
For the purpose of the statements of cash flows, cash and cash equivalents comprise the followings:-
The Group The Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000 Fixed deposits with licensed banks 14,020 14,979 2,501 1,743 Cash and bank balances 8,022 5,074 844 222 22,042 20,053 3,345 1,965
27. OPERATING SEGMENTS
The Group 2014 2013 (a) By Geographical Segment:- RM’000 RM’000
Sales revenue by geographical market:- - Malaysia 4,991 5,310 - Singapore 5,040 4,818 - Australia 2,025 2,110 - Indonesia 669 2,362 - Europe 170 72 - Others 2,423 2,002
15,318 16,674
No other segmental information such as segment assets, liabilities and results are presented as the
Group’s sales are predominantly generated from Malaysia operation.
(b) Major Customers
The following are major customers with revenue equal to or more than 10% of Group revenue:-
Revenue Segment 2014 2013 RM’000 RM’000
Customer 1 1,671 - Malaysia Customer 2 2,182 2,309 Malaysia
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
80
28. SIGNIFICANT RELATED PARTY DISCLOSURES
(a) Identities of related parties
The Group has related party relationships with:-
(i) its subsidiaries as disclosed in Note 5 to the financial statements; and
(ii) its directors and other key management personnel.
(b) In addition to the information detailed elsewhere in the financial statements, the Group and the Company
carried out the following transactions with its related parties during the financial year:-
The Group The Company 2014 2013 2014 2013 RM’000 RM’000 RM’000 RM’000
(i) Subsidiaries Dividend received/ receivable from a
subsidiary
-
-
1,200
1,350
Management fee received/ receivable from subsidiaries
-
-
601
603
(ii) Persons connected to the directors
Personnel compensation 257 185 191 119
(iii) Key management personnel
compensation
Short-term employee benefits 1,964 1,503 437 360 Post employment benefits - Defined contribution plan 295 212 20 13
2,259 1,715 457 373
Information regarding outstanding balances arising from related party transactions as at 31 May 2014 is
disclosed in Note 5 to the financial statements.
29. CAPITAL COMMITMENT
The Group
2014 2013
RM’000 RM’000
Purchase of property, plant and equipment:-
Approved but not contracted for 280 131
Approved and contracted for 7,101 -
ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
81
30. FINANCIAL INSTRUMENTS
The Group’s activities are exposed to a variety of market risks (including foreign currency risk, interest rate risk
and equity price risk), credit risk and liquidity risk. The Group’s overall financial risk management policy focuses
on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s
financial performance.
(a) Financial Risk Management Policies
The Group’s policies in respect of the major areas of treasury activity are as follows:-
(i) Market Risk
(i) Foreign Currency Risk
The Group is exposed to foreign currency risk on transactions and balances that are
denominated in currencies other than Ringgit Malaysia. The currencies giving rise to this risk
are primarily Singapore Dollar, Australian Dollar, United States Dollar and Pound Sterling.
Foreign currency risk is monitored closely on an ongoing basis to ensure that the net exposure
is at an acceptable level.
The Group’s exposure to foreign currency is as follows:-
Singapore
Australian
United States
Pound
Dollar Dollar Dollar Sterling Others Total
The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2014
Financial assets
Trade receivables 2,121 406 453 - 65 3,045
Other receivables, deposits and prepayments
- 4 - 1 - 5
Fixed deposits with licensed banks
-
1,481
-
446
-
1,927
Cash and bank balances 3,008 2,544 1,715 350 257 7,874
5,129 4,435 2,168 797 322 12,851
Financial liabilities
Trade payables (59) - (141) - - (200)
Other payables and accruals - (70) - (3) - (73)
(59) (70) (141) (3) - (273)
Currency exposure 5,070 4,365 2,027 794 322 12,578
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
82
30. FINANCIAL INSTRUMENTS (Cont’d)
(a) Financial Risk Management Policies (Cont’d)
(i) Market Risk (Cont’d)
(i) Foreign Currency Risk (Cont’d)
Singapore
Australian
United States
Pound
Dollar Dollar Dollar Sterling Others Total
The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2013
Financial assets
Trade receivables 2,054 424 647 - 41 3,166
Other receivables, deposits and prepayments
-
4
-
1
-
5
Fixed deposits with licensed banks - 1,977 309 382
- 2,668
Cash and bank balances 1,423 759 1,043 - 86 3,311
3,477 3,164 1,999 383 127 9,150
Financial liabilities Trade payables (1) - (348) - - (349)
Other payables and accruals - (48) - (2) - (50)
(1) (48) (348) (2) - (399)
Currency exposure 3,476 3,116 1,651 381 127 8,751
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ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
83
30. FINANCIAL INSTRUMENTS (Cont’d)
(a) Financial Risk Management Policies (Cont’d)
(i) Market Risk (Cont’d)
(i) Foreign Currency Risk (Cont’d)
The Company’s exposure to foreign currency is as follows:-
Australian
Dollar
The Company RM’000
2014
Financial assets Fixed deposit with licensed banks 743 Cash and banks balances 101
Currency exposure 844
Australian
Dollar The Company RM’000
2013
Financial assets
Fixed deposits with licensed banks 610 Cash and bank balances 161
Currency exposure 771
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Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
84
30. FINANCIAL INSTRUMENTS (Cont’d)
(a) Financial Risk Management Policies (Cont’d)
(i) Market Risk (Cont’d)
(i) Foreign Currency Risk (Cont’d)
Foreign currency risk sensitivity analysis
The following table details the sensitivity analysis to a reasonably possible change in the foreign
currencies as at the end of the reporting period, with all other variables held constant:-
The Group The Company 2014 2013 2014 2013 Increase/
(Decrease) Increase/
(Decrease) Increase/
(Decrease) Increase/
(Decrease)
RM’000 RM’000 RM’000 RM’000 Effects on profit after taxation Australian Dollar: - strengthened by 2% (2013: 4%) 51 87 10 21
- weakened by 2% (2013: 4%) (51) (87) (10) (21)
Singapore Dollar:
- strengthened by 2% (2013: 1%) 85 20 - -
- weakened by 2% (2013: 1%) (85) (20) - -
United States Dollar:
- strengthened by 4% (2013: 3%) 61 34 - -
- weakened by 4% (2013: 3%) (61) (34) - -
Pound Sterling:
- strengthened by 3% (2013: 4%) 16 12 - -
- weakened by 3% (2013: 4%) (16) (12) - -
ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
85
30. FINANCIAL INSTRUMENTS (Cont’d)
(a) Financial Risk Management Policies (Cont’d)
(i) Market Risk (Cont’d)
(ii) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. The Group’s exposure to interest rate risk
arises mainly from interest-bearing financial assets. The Group’s policy is to obtain the most
favourable interest rates available. Any surplus funds of the Group will be placed with licensed
financial institutions to generate interest income.
Interest rate risk sensitivity analysis
The following table details the sensitivity analysis to a reasonably possible change in the
interest rates as at the end of the reporting period, with all other variables held constant:-
The Group The Company
2014 2013 2014 2013
Increase/ (Decrease)
Increase/ (Decrease)
Increase/ (Decrease)
Increase/ (Decrease)
RM’000 RM’000 RM’000 RM’000
Effects on profit after taxation Increase of 100 basis points (bp)
(2013:100) 105
112 - -
Decrease of 100 bp (2013: 100) (102) (110) - -
(iii) Equity Price Risk
The Group does not have any quoted investments and hence is not exposed to equity price
risks.
(ii) Credit Risk
The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade
and other receivables. The Group manages its exposure to credit risk by the application of credit
approvals, credit limits and monitoring procedures on an ongoing basis. For other financial assets,
the Group minimises credit risk by dealing exclusively with high credit rating counterparties.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in
respect of the trade and other receivables as appropriate. Impairment is estimated by management
based on prior experience and the current economic environment.
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
86
30. FINANCIAL INSTRUMENTS (Cont’d)
(a) Financial Risk Management Policies (Cont’d)
(ii) Credit Risk (Cont’d)
Credit risk concentration profile
The Group’s major concentration of credit risk relates to the amounts owing by one (1) (2013: one
(1)) groups of customer which constituted approximately 22% (2013: 24%) of its trade receivables as
at the end of the reporting period.
Exposure to credit risk
As the Group does not hold any collateral, the maximum exposure to credit risk is represented by the
carrying amount of the financial assets as at the end of the reporting period.
The exposure of credit risk for trade receivables by geographical region is as follows:-
The Group 2014 2013 RM’000 RM’000 Asia 4,996 5,066
Australia and Oceania 406 424 Others 48 37
5,450 5,527
Ageing analysis
The ageing analysis of the Group’s trade receivables as at 31 May 2014 is as follows:-
Carrying Value
2014 2013
The Group RM’000 RM’000
Not past due 2,911 2,370
Past due:-
- less than 3 months 1,246 1,538
- 3 to 6 months 1,293 1,619
5,450 5,527
Trade receivables that are past due but not impaired
The Group believes that no impairment allowance is necessary in respect of these trade receivables.
They are substantially companies with good collection track record and no recent history of default.
ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
87
30. FINANCIAL INSTRUMENTS (Cont’d)
(a) Financial Risk Management Policies (Cont’d)
(ii) Credit Risk (Cont’d)
Trade receivables that are neither past due nor impaired
A significant portion of trade receivables that are neither past due nor impaired are regular
customers that have been transacting with the Group. The Group uses ageing analysis to monitor
the credit quality of the trade receivables. Any receivables having significant balances past due or
more than 180 days, which are deemed to have higher credit risk, are monitored individually.
(iii) Liquidity Risk
Liquidity risk arises mainly from general funding and business activities. The Group practises
prudent risk management by maintaining sufficient cash balances and the availability of funding
through certain committed credit facilities.
The following table sets out the maturity profile of the financial liabilities as at the end of the reporting
period based on contractual undiscounted cash flows (based on the rate at the end of the reporting
period):-
Contractual Carrying Undiscounted Within Amount Cash Flows 1 Year The Group RM’000 RM’000 RM’000 2014 Trade payables 472 472 472
Other payables and accruals 529 529 529
1,001 1,001 1,001
Contractual Carrying Undiscounted Within Amount Cash Flows 1 Year The Group RM’000 RM’000 RM’000 2013 Trade payables 554 554 554 Other payables and accruals 423 423 423
977 977 977
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
88
30. FINANCIAL INSTRUMENTS (Cont’d)
(a) Financial Risk Management Policies (Cont’d)
(iii) Liquidity Risk (Cont’d)
Contractual Carrying Undiscounted Within Amount Cash Flows 1 Year The Company RM’000 RM’000 RM’000 2014
Other payables and accruals 50 50 50
Contractual Carrying Undiscounted Within Amount Cash Flows 1 Year The Company RM’000 RM’000 RM’000 2013
Other payables and accruals 42 42 42
(b) Capital Risk Management
The Group manages its capital to ensure that entities within the Group will be able to maintain an optimal
capital structure so as to support their businesses and maximise shareholders’ value. To achieve this
objective, the Group may make adjustments to the capital structure in view of changes in economic
conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or
issuing new shares.
The Group manages its capital based on debt-to-equity ratio. As the Group has significant cash and cash
equivalents but a relatively small debt, the debt-to-equity ratio may not provide a meaningful indicator of
the risk of borrowings.
Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to
maintain a consolidated shareholders’ equity (total equity attributable to owners of the Company) equal to
or not less than the 25% of the issued and paid-up share capital. The Company has complied with this
requirement.
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ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
89
30. FINANCIAL INSTRUMENTS (Cont’d)
(c) Classification Of Financial Instruments
The Group
2014 2013
RM’000 RM’000
Financial Assets
Loans and receivables financial assets
Trade receivables 5,450 5,527
Other receivables and deposits 884 96
Deposits with licensed banks 14,020 14,979
Cash and bank balances 8,022 5,074
28,376
25,676
Financial Liabilities
Other financial liabilities
Trade payables 472 554
Other payables and accruals 529 423
1,001 977
The Company
2014 2013
RM’000 RM’000
Financial Assets
Loans and receivables financial assets
Other receivables and deposits 1 1
Deposits with licensed banks 2,501 1,743
Cash and bank balances 844 1 222
3,346
1,966
Financial Liabilities
Other financial liabilities
Other payables and accruals 50 42
50 42
(d) Fair Values Information
At the end of the reporting period, there were no financial instruments carried at fair values.
The fair values of the financial assets and financial liabilities maturing within the next 12 months
approximated their carrying amounts due to the relatively short-term maturity of the financial instruments.
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
90
31. SIGNIFICANT EVENT DURING THE FINANCIAL YEAR
On 9 July 2013 entered into a Sale and Purchase Agreement with the shareholders of OPES Management Sdn Bhd (“OPES”) for the acquisition of one hundred percent (100%) equity interest in OPES comprising 10,000 ordinary shares of RM1.00 each for a total cash consideration of RM40,000.
The principal activities of OPES are to carry on business of factoring, leasing, investment, development finance, building credit or financiers.
OPES subsequently changed its name to Fibon Capital Sdn Bhd.
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ANNUAL REPORT 2014
Notes to the Financial Statements for the financial year ended 31 May 2014 cont’d
91
32. SUPPLEMENTARY INFORMATION – DISCLOSURE OF REALISED AND UNREALISED PROFITS
The breakdown of the retained profits of the Group and of the Company as at the end of the reporting period into
realised and unrealised profits are presented in accordance with the directive issued by Bursa Malaysia
Securities Berhad and prepared in accordance with Guidance on Special Matter No. 1, Determination of
Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities
Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants, as follows:-
The Group
2014 2013 RM’000 RM’000 Total retained profits: - realised 27,825 25,385 - unrealised (523) (861)
At 31 May 27,302 24,524
The Company
2014 2013 RM’000 RM’000 Total retained profits: - realised 1,699 1,543 - unrealised (74) (20)
At 31 May
1,625 1,523
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ANNUAL REPORT 2014
Analysis of Shareholdings as at 3 September 2014
92
Issued and Paid-Up Share Capital : RM9,800,000
Class of Shares : Ordinary Shares of RM0.10 each
Voting Rights : One vote per share
DISTRIBUTION OF SHAREHOLDINGS
Size of Shareholdings
No. of
Shareholders /
Depositors
% of
Shareholders /
Depositors
No. of Shares
held
% of Issued
Capital
Less than 100 57 3.85 1,398 0.00
100 to 1,000 957 64.62 322,133 0.33
1,001 to 10,000 242 16.34 1,361,375 1.39
10,001 to 100,000 194 13.10 6,084,560 6.21
100,001 to less than 5% of
issued shares
27 1.82 38,350,096 39.13
5% and above of issued shares 4 0.27 51,880,438 52.94
Total 1,481 100.00 98,000,000 100.00
DIRECTOR’S SHAREHOLDINGS
Direct Indirect
Name No. of
Shares Held
% of Issued
Capital
No. of Shares
Held
% of Issued
Capital
Lim Wai Kiew 1,470,000 1.50 *16,398,788 16.73
Pang Chee Khiong 21,560,552 22.00 - -
Pang Fok Seng 16,398,788 16.73 *1,470,000 1.50
Pang Nyuk Yin 2,940,000 3.00 - -
Chong Peng Khang 322 # - -
# less than 1%
* Indirect interest held through spouse
ANNUAL REPORT 2014
Analysis of Shareholdings as at 3 September 2014 cont’d
93
THIRTY LARGEST SHAREHOLDERS
Direct
Name No. of
Shares Held
% of Issued
Capital
1. Pang Chee Khiong 21,560,552 22.00
2. CIMSEC Nominees (Tempatan) Sdn. Bhd. CIMB For Pang Fok
Seng (PB)
16,312,618 16.65
3. Malaysia Venture Capital Management Berhad 7,031,949 7.18
4. Expedient Equity Ventures Sdn. Bhd. 6,975,319 7.12
5. Kenanga Nominees (Tempatan) Sdn. Bhd. Pledged Securities
Account For Koh Kin Lip
4,888,800 4.99
6. Kumpulan Modal Perdana Sdn. Bhd. 4,874,004 4.97
7. Kenanga Nominees (Tempatan) Sdn. Bhd. Pledged Securities
Account For Koh Siew Kong
4,700,500 4.80
8. Kenanga Nominees (Tempatan) Sdn. Bhd. Pledged Securities
Account For Junior Koh Siew Hui
4,413,800 4.50
9. Pang Yoke Wah 3,887,122 3.97
10. Pang Nyuk Yin 2,940,000 3.00
11. Pang Yoke Lian 2,940,000 3.00
12. Maybank Nominees (Asing) Sdn. Bhd. DBS Bank For Taib-Jaic
Asian Balanced Private Equity Fund (290582)
2,228,700 2.27
13. CIMSEC Nominees (Asing) Sdn. Bhd. CIMB For Frigate Equities
Ltd. (PB)
2,139,548 2.18
14. Lim Wai Kiew 1,470,000 1.50
15. Kenanga Nominees (Tempatan) Sdn. Bhd. Pledged Securities
Account For Lim Pay Chuan
576,800 0.59
16. Lim Ah Pe 463,000 0.47
17. AMSEC Nominees (Tempatan) Sdn. Bhd. Pledged Securities
Account For Ng Siew Yann
367,200 0.37
18. CIMSEC Nominees (Tempatan) Sdn. Bhd. CIMB For Yeo Ann
Seck (MY0696)
300,000 0.31
19. Tiu Ka Han 263,000 0.27
20. Koh Kian Chun 229,300 0.23
21. Wong Seau Han @ Stella Wan Seau Han 220,100 0.22
22. Yeo Khee Aik 200,000 0.20
23. Leong Yong Mee 181,300 0.19
24. Hee Yau Sing 169,300 0.17
25. Alliance Group Nominees (Tempatan) Sdn. Bhd. Pledged
Securities Account for Tan Eng Hock (100100)
152,000 0.16
26. Tan Kin Choo 150,322 0.15
27. Chan Siew Kuen 130,000 0.13
28. Lawrence Yeo Eng Chien 130,000 0.13
29. Public Nominees (Tempatan) Sdn. Bhd. Pledged Securities
Account For Song Siew Kheng (E-PPG)
121,000 0.12
30. RHB Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account
for Ng Eng Yong
110,000 0.11
Analysis of Shareholdings as at 3 September 2014 cont’d
94
SUBSTANTIAL SHAREHOLDERS
As Per Register of Substantial Shareholders
Direct Indirect
Name No. of
Shares Held
% of Issued
Capital
No. of Shares
Held
% of Issued
Capital
Pang Chee Khiong 21,560,552 22.00 - -
CIMSEC Nominees
(Tempatan) Sdn. Bhd.
CIMB For Pang Fok Seng
(PB)
16,312,618 16.65 1,470,000 (1)
1.50
Malaysia Venture Capital
Management Berhad
7,031,949 7.18 6,975,319 (2)
7.12
Expedient Equity Ventures
Sdn. Bhd.
6,975,319 7.12 - -
(1) Deemed interest by virtue of Lim Wai Kiew being his spouse
(2) Deemed interest by virtue of its substantial shareholding in expedient equity
List of Property as at 31 May 2014
95
Location
Tenure/
Expiry
Date
Area
(Sq.
Ft.)
Build-
up Area
(Sq. Ft.)
Description
Approximate
Age of
building
(years)
Date of
Acquisition
Net Book
Value as at
31 May
2014
(RM’000)
No.12A, Jalan 20,
Taman Sri Kluang,
86000 Kluang,
Johor.
Freehold 50,870 35,979 Factory and
office
building
15 6.12.2010 3,203
No. 18, Jalan 1,
Taman Sri Kluang,
86000 Kluang,
Johor.
Freehold 3,080 1,540 Double
storey shop
house
8 11.1.2014 289
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ANNUAL REPORT 2014
Notice of Seventh Annual General Meeting
96
NOTICE IS HEREBY GIVEN THAT the Seventh Annual General Meeting of FIBON BERHAD will be held at Tiara
Melaka Golf & Country Club, Jalan Gapam, Bukit Katil, PO. Box 473, 75760 Melaka on Wednesday, 29 October
2014 at 10.00 am to transact the following businesses:
AGENDA
ORDINARY BUSINESSES:
1. To receive and adopt the Audited Financial Report for the financial year
ended 31 May 2014 together with the Reports of the Directors and the
Auditors thereon.
(Please refer to
Note 1)
2. To declare a single tier final dividend of 1.10 sen for the year ended
31 May 2014.
(Resolution 1)
3. To re-elect the following Directors who are retiring in accordance to the
Company’s Articles of Association and being eligible offer themselves for re-
election:
i. Lim Wai Kiew (f) (Article 121) (Resolution 2)
ii. Pang Nyuk Yin (f) (Article 121) (Resolution 3)
4. To approve the payment of Directors’ fees of RM259,500.00 for the financial
year ended 31 May 2014.
(Resolution 4)
5. To appoint Messrs. Crowe Horwath as Auditors of the Company for the
ensuing year and to authorise the Directors to fix their remuneration.
(Resolution 5)
SPECIAL BUSINESS:
To consider and, if thought fit, pass the following Ordinary Resolutions:-
6. Proposed Renewal of the Authority To Issue Shares Pursuant To
Section 132D of the Companies Act, 1965
“THAT pursuant to Section 132D of the Companies Act, 1965 and subject
always to the approval of the relevant authorities, the Directors be and are
hereby empowered to issue shares in the capital of the Company from time to
time and upon such terms and conditions and for such purposes as the
Directors may deem fit provided that the aggregate number of shares issued
pursuant to this resolution does not exceed 10% of the issued share capital of
the Company for the time being and that the Directors be and are also
empowered to obtain the approval for the listing of and quotation for the
additional shares so issued on the Bursa Malaysia Securities Berhad and that
such authority shall continued in force until the conclusion of the next Annual
General Meeting (“AGM”) of the Company.”
(Resolution 6)
ANNUAL REPORT 2014
Notice of Seventh Annual General Meeting cont’d
97
7. Special Resolution – Proposed Renewal Share Buy-Back by the Company
“THAT subject to the rules, regulations and orders made pursuant to the Companies Act, 1965 (“the Act”), provisions of the Memorandum and Articles of Association of the Company and the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and any other relevant authorities, the Board be and is hereby authorised to purchase the Company’s issued and paid-up ordinary shares of RM0.10 each (“Fibon Shares”) through Bursa Securities (“Proposed Share Buy-Back”) subject to the following:- (i) the maximum number of Fibon Shares which may be purchased and/or held
as treasury shares by the Company at any point in time pursuant to the Proposed Share Buy-Back shall not exceed ten percent (10%) of the total issued and paid-up share capital of the Company;
(ii) the maximum fund to be allocated by the Company for the purpose of
purchasing the Fibon Shares shall not exceed the aggregate of the retained profits and/or the share premium account of the Company;
(iii) the authority conferred by this resolution will be effective immediately upon the
passing of this Resolution and will expire at the conclusion of the next Annual General Meeting of the Company, unless earlier revoked or varied by an ordinary resolution of the shareholders of the Company at a general meeting or the expiration of the period within which the next Annual General Meeting is required by law to be held, whichever is the earlier, but not so as to prejudice the completion of purchase(s) by the Company before the aforesaid expiry date and in accordance with the provisions of the Listing Requirements of Bursa Securities or any other relevant authorities; and
(iv) upon completion of the purchase(s) of the Fibon Shares by the Company, the
Board be and is hereby authorised to retain the Fibon Shares so purchased as treasury shares, of which may be distributed as dividends to shareholders and/or re-sold on Bursa Securities and/or subsequently cancelled and in any other manner as prescribed by the Act, rules, regulations and orders made pursuant to the Act and the requirements of Bursa Securities and any other relevant authorities for the time being in force.
AND that the Board be and is hereby authorised to take all such steps as are necessary or expedient to implement or to effect the purchase(s) of the Fibon Shares with full power to assent to any condition, modification, variation and/or amendment as may be imposed by the relevant authorities and to take all such steps as they may deem necessary or expedient in order to implement, finalise and give full effect in relation thereto”.
(Resolution 7)
8. To transact any other business for which due notice shall have been given in accordance with the Companies Act, 1965.
(Resolution 8)
Notice of Seventh Annual General Meeting cont’d
98
NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT
NOTICE IS ALSO HEREBY GIVEN that a Single Tier Final Dividend of 1.10 sen per share in respect of financial
year ended 31 May 2014 will be payable on 29 December 2014 to depositors registered in the Record of
Depositors at the close of business on 3 December 2014, if approved by shareholders at the forthcoming
Seventh Annual General Meeting on Wednesday, 29 October 2014.
A Depositor shall qualify for entitlement to the dividend only in respect of:
a. Shares transferred into the Depositor’s Securities Account before 5.00 p.m. on 3 December 2014 in
respect of ordinary transfer; and
b. Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the
Rules of Bursa Malaysia Securities Berhad.
BY ORDER OF THE BOARD
NORIAH BINTI MD YUSOF (LS 0009298)
Secretary
Johor Bahru
Date : 30 September 2014
ANNUAL REPORT 2014
Notice of Seventh Annual General Meeting cont’d
99
Notes:
1. This Agenda Item is not put forward for voting as the provisions of Section 169 of the Companies Act, 1965 do not require the
Audited Financial Statements to be approved by shareholders. 2. GENERAL MEETING RECORD OF DEPOSITORS
Only depositors whose name appears in the Record of Depositors as at 21 October 2014 shall be regarded as Member of the Company entitled to attend, speak and vote at this Meeting or appoint proxy(ies) to attend, speak and vote in his stead.
3. PROXY
i. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy may but need not be a member of the Company.
ii. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting. iii. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his
holdings to be represented by each proxy. iv. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may
appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.
v. Where the Proxy Form is executed by a corporation, it must be either under its Common Seal or under the hand of an officer or attorney duly authorised.
vi. The Proxy Form must be deposited at the Registered Office of the Company, located at 31-04, Level 31, Menara Landmark, 12 Jalan Ngee Heng, 80000 Johor Bahru, not less than forty-eight (48) hours before the time set for the meeting or any adjournment thereof.
4. EXPLANATORY NOTES ON SPECIAL BUSINESS:
i) Ordinary Resolution – Mandate to issue shares pursuant to Section 132D of the Companies Act, 1965:
The Company wishes to renew the mandate on the authority to issue shares pursuant to Section 132D of the Companies Act, 1965 at the Seventh Annual General Meeting (“AGM”) of the Company (hereinafter referred to as the “General Mandate”). The Company has been granted a general mandate by its shareholders at the Sixth AGM of the Company held on 25 October 2013 (hereinafter referred to as the “Previous Mandate”). The Previous Mandate granted by the shareholders had not been utilised and hence no proceeds were raised therefrom. The purpose to seek the General Mandate is to enable the Directors of the Company to issue and allot shares at any time to such persons in their absolute discretion without convening a general meeting as it would be both time and cost-consuming to organise a general meeting. This authority unless revoked or varied by the Company in the general meeting, will expire at the next Annual General Meeting. The proceeds raised from the General Mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for purpose of funding future investment project(s), working capital and/or acquisitions.
ii) Ordinary Resolution – Proposed Renewal Share Buy Back by the Company
The Proposed Ordinary Resolution No. 8 is passed, will authorise the Company to purchase up to ten per cent (10%) of the issue and paid-up share capital of the Company through Bursa Malaysia Securities Berhad. All other information remains unchanged.
100
FIBON BERHAD (Company No: 811010-H)
(Incorporated In Malaysia)
PROXY FORM Number of Ordinary Shares Held
I/We, (FULL NAME AND NRIC/PASSPORT NO)
of (FULL ADDRESS)
being a member of FIBON BERHAD hereby appoint
(FULL NAME AND NRIC/PASSPORT NO)
of (FULL ADDRESS)
or failing him/her, the Chairman of the Meeting as *my/our proxy to attend and vote for *me/us and on *my/ our
behalf at the Seventh Annual General Meeting of the Company to be held at Tiara Melaka Golf & Country Club,
Jalan Gapam, Bukit Katil, PO. Box 473, 75760 Melaka on Wednesday, 29 October 2014 at 10.00 am or any
adjournment thereof.
Mark either box if you wish to direct the proxy how to vote. If no mark is made the proxy may vote on the resolution or abstain from voting as the proxy thinks fit. If you appoint two proxies and wish them to vote differently this should be specified.
My/our proxy/proxies is/are to vote as indicated below
No. RESOLUTIONS FOR AGAINST 1. Declaration of a single tier final dividend of 1.10 sen for the year ended 31 May 2014. 2. Re-election of Ms. Lim Wai Kiew as Director. 3. Re-election of Ms. Pang Nyuk Yin as Director. 4. Approval of the payment of Directors’ fees of RM259,500.00 for the financial year ended
31 May 2014.
5. Reappointment of Messrs Crowe Horwath as Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration.
6. Proposed Renewal of the Authority to Issue Shares Pursuant to Section 132D of the Companies act, 1965.
7 Proposed Renewal Share Buy-Back by the Company
* Strike out whichever not applicable (Please indicate with an “x” in the spaces provided how you wish your vote to be cast. If you do not do so, the proxy will vote or abstain from voting at his discretion)
…………………………………………………….…. Signature of Member/Common Seal
Date: ………………………………………………. [Please refer to the next page for the “Notes on Appointment of Proxy”)
For appointment of two proxies, percentage of shareholdings to be represented by the proxies:
Percentage Proxy 1 % Proxy 2 _________% Total 100 %
101
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Then Fold here
1st Fold here
Notes on Appointment of Proxy:
1. Only depositors whose name appears in the Record of Depositors as at 21 October 2014 shall be regarded as Member of the Company entitled to attend, speak and vote at this
Meeting or appoint proxy(ies) to attend, speak and vote in his stead. 2. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy may but need not be a member of the Company. 3. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting. 4. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy. 5. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each
securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. 6. Where the Proxy Form is executed by a corporation, it must be either under its Common Seal or under the hand of an officer or attorney duly authorised. 7. The Proxy Form must be deposited at the Registered Office of the Company, located at 31-04, Level 31, Menara Landmark, 12 Jalan Ngee Heng, 80000 Johor Bahru, not less
than forty-eight (48) hours before the time set for the meeting or any adjournment thereof.
Affix Stamp
The Company Secretary
FIBON BERHAD (811011-H) 31-04 Level 31 Menara Landmark,
No 12 Jalan Ngee Heng,
80000 Johor Bahru
FIBON BERHAD
12A, JALAN 20,
TAMAN SRI KLUANG,
86000 KLUANG, JOHOR,
MALAYSIA
TEL : ( 607 ) 773 6918
FAX : ( 607 ) 774 2025
E-MAIL : [email protected]