fibon...hsbc amanah malaysia berhad alliance bank malaysia berhad registered office 31-04, level 31,...

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 Risk Management & 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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101

ANNUAL REPORT 2015

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


Dato’ Koh Chun Kiat


Chong Chee Siong

Non-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) 7849 0777

Fax: (603) 7841 8151/8152

PRINCIPAL BANKERS

OCBC Bank (M) Berhad

AmBank (M) Berhad

United Overseas Bank (M) Berhad

HSBC Amanah Malaysia Berhad

Alliance Bank 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

2

Pang Chee Khiong

Executive Chairman, Non-Independent

Mr Pang Chee Khiong, a Malaysian aged 51 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 27 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 49 is a Non-Independent Managing Director

since 25 March 2008. He has attended all three out of four Board meetings held

during the financial year under review. He has more than 21 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 55 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 2015

Profile of Directors cont’d

3

Lim Wai Kiew

Executive Director, Non-Independent

Ms Lim Wai Kiew, a Malaysian aged 49, 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 71 is an Independent

Non-Executive Director. Among the committees established, he is the Chairman of

the Audit Committee and the Nomination Committee. He was also the Chairman of

the Remuneration Committee until 28th

February 2015 when he gave up the

Chairmanship but continue to remain a member of the Remuneration Committee.

Datuk Mohamad Saleh has withdrawn as the Chairman of Nomination Committee

effective 31st

July 2015, however he remains as a member of the Nomination

Committee.

He is appointed as Director on 20 October 2008. He 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.


4

Chong Peng Khang


Mr Chong Peng Khang, a Malaysian aged 35, is an Independent Non-Executive

Director. He was appointed as Chairman of Remuneration Committee w.e.f. 1

March 2015. He is currently member of the Audit and Nomination Committee for

the Group. He is appointed as Director on 20 October 2008 and has attended all

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.



Dato’ Koh Chun Kiat, a Malaysian aged 31, is an Independent Non-Executive

Director. He was appointed the Chairman of Nomination Committee since 1 August

2015 and currently a member of the Audit 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 also an Approved Company Auditor under the Companies Act 1965 and Approved Tax Agent

under the Income Tax Act 1967. He is the first person granted Approved GST Tax Agent under the GST Act 2014

in the Southern Region, Johor by the Ministry of Finance and served as GST panelist upon invitation by the

Inland Revenue Board of Malaysia during the National Budget Seminar 2014, a yearly event for all tax

practitioners. 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 2015


5

Chong Chee Siong

Non-Independent Non-Executive

Mr Chong Chee Siong, a Malaysian aged 40, is a Non-Independent Non-Executive

Director. He is appointed as Director on 1 August 2015. He graduated with an

Advanced Diploma in Commerce (Financial Accounting) from Tunku Abdul Rahman

College.

He started his career in mid tier audit firm and subsequently worked with Deloitte

and Crowe Horwath. He had accumulated four years of auditing experience and

four years of commercial experience before joining Fibon Berhad as General

Manager in year 2008. His experience covers audit, due diligence audit,

preparation of profit forecast, preparation of oversea reporting package, treasury management and corporate

reporting. Currently, he is a director of two private limited companies. 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.

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Chairman’s Statement

6

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

2015.

FINANCIAL PERFORMANCE

For the financial year under review, the Group

registered revenue of approximately RM 13.6

million, a decrease of 11.29% compared to the

preceding year. Profit after tax decrease from RM

4.0 million to RM 3.6 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 26 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 Euro zone.

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 1.05 cents per ordinary

share for FYE 31 May 2015. The proposed dividend

is subject to Shareholders’ approval at the

forthcoming Annual General Meeting.

The total dividends payable for the FYE 31 May

2015 would be approximately amounting to

RM1.029 million, being a dividend payout ratio of

approximately 28.2% of PAT of RM 3.651 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

ANNUAL REPORT 2015

Group Structure

7

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 %

Financial Highlights

8

Financial year ended 31 May

2011 2012 2013 2014 2015

RM’000 RM’000 RM’000 RM’000 RM’000

Revenue 14,498 16,901 16,674 15,318 13,588

Profit before taxation (“PBT”) 5,945 6,226 6,666 5,372 5,204

Profit after taxation (“PAT”) 4,389 4,499 4,905 4,003 3,651

EARNINGS PER SHARE (“EPS”)

Gross EPS (sen)* 6.07 6.35 6.80 5.48 5.31

Net EPS (sen)* 4.48 4.59 5.01 4.09 3.73

* FYE 2011-2015: 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.


ANNUAL REPORT 2015

Financial Highlights cont’d

9

REVENUE AND PROFIT FROM ORDINARY ACTIVITY AFTER TAXATION (RM’000)

NET EPS (SEN)

Audit Committee Report for the financial year ended 31 May 2015

10

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 4/4

Dato’ 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.

ANNUAL REPORT 2015

Audit Committee Report for the financial year ended 31 May 2015 cont’d

11

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


12

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;

ANNUAL REPORT 2015


13

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


for the financial year ended 31 May 2015

14

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 2015

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 2015, 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

1 Non-Independent Non-Executive Director

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

ANNUAL REPORT 2015


for the financial year ended 31 May 2015 cont’d

15

Managing Director are held by 2 separate Executive

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 2015 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 4/4

Pang Chee Khiong 4/4

Pang Fok Seng 3/4

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, Pang

Chee Khiong and Datuk Mohamad Saleh bin Mohd

Ghazali are due to retire pursuant to Article 121 and

Chong Chee Siong is due to retire pursuant to

article 126 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 2015 are

as follows:

Description Fees Salaries and

Bonus Total

Executive

Directors

195,300 1,910,277 2,105,577

Non Executive

Directors

74,400 - 74,400

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 - -

RM300,000 – RM400,000 2 -

RM400,000 – RM500,000

RM500,000 – RM600,000

RM600,000 – RM700,000

RM800,000 – RM900,000

RM900,000 – RM1,000,000

1

-

-

-

1

-

-

-

-

-



16

Directors’ Training

The Group acknowledges the importance of

continuous education and training to the Board

members.

During the financial year, Ms Lim Wai Kiew has

attended the following sessions:

i) “Taklimat PCB Sebagai Cukai Muktamad”

organised by the LHDN Malaysia, Kluang (19

Nov 2014)

ii) “Program Hand Holding dan Kursus Cukai

Barang & Perkhidmatan” – Sektor Pengilangan

organised by Royal Malaysian Custom

Department. (3 Dec 2014)

iii) GST Challenge 2.0 organised by China Press

(8 Dec 2014)

iv) “Program Hand Holding Cukai Barangan dan

Perkhidmatan (CBP) Sektor Pengilangan

organised by Royal Malaysian Custom

Department.(26 Feb 2015)

v) “Program GST Bersama Pelangan” organised

by Royal Malaysian Custom Department (2

July 2015)

vi) “Program Hand Holding dan Kursus Cukai

Barang & Perkhidmatan Bagi Syarikat

Pengecualian 14(2) organised by Royal

Malaysian Custom Department.(10 Aug 2015)

Mr. Chong Peng Khang had attended the following

sessions:-

i) Strategies to Maximise Capital Allowance and

Reinvestment Allowance Claims (18

September 2014)

ii) FADE Training (3 November 2014)

iii) GST Hand Holding Program (3 December

2014)

iv) Economic Developments and Outlook 2015 (26

March 2015)

v) New Public Rulings for 2014 and 2015 (13 April

2015)

Dato’ Koh Chun Kiat had attended the following

sessions:

i) Industry Focused GST Workshops- GST for

Property Developers & Construction Industry

ii) Understand and applying the 24 Malaysian GST

Tax Codes

iii) GST and its impact on employee benefits

iv) Seminar Percukaian Kebangsaan 2014

iv) The 2015 Budget Seminar

v) New Public Ruling - the latest developments

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

ANNUAL REPORT 2015



17

audit on the statutory financial statements for the

year ended 31 May 2015. 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.

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.



18

Corporate Social Responsibilities

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 is a welfare home for poor underprivileged children. It was established in the year 1990

and currently has 18 underprivileged children with age ranging from 6 to 20 under its care. The community

provides a conducive and 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 assisted by 4 full time staff and 5 volunteers. All the expenses are funding from public

donations and Government annual grants.

Fibon Berhad has made regular visits and contributions to the shelter home.

ANNUAL REPORT 2015



19

MIRIAM HOME CANOSSIAN SISTERS

The Miriam Home for the aged, established in the year 1982, is located along the Kluang - Air Hitam Road, It is

operated by the Canossian Sisters assisted by workers and volunteers. It provides the much-needed shelter for

the poor and elderly of all races and religions who are either alone in the world or abandoned by kith and kin.

The residents at this home are all senior citizens in their twilight years, with the “youngest” being 65 years old and

the most senior at 101 years old. Most do not have the means to support themselves. Miriam Home provides

them with a better living environment, whether emotionally, physically or spiritually. Miriam Home is the place

where they can spend their twilight years in comfort, interaction with other people of their age and to receive

visitors as well as volunteers from non-governmental organisations who come by to cheer them up.

We at Fibon Berhad, as a part of caring community, pay regular visits and make donations to the Miriam Home.



20

CHE LUAN KHOR DIALYSIS CENTRE, KLUANG.

Che Luan Khor Dialysis Centre is a non-profitable and charitable organisation located in Kluang in the state of

Johor. It was incorporated in Malaysia in August 1998 to provide haemodialysis services to the needy. Che Luan

Khor Dialysis Centre is equipped with the latest medical equipment for haemodialysis treatment. The centre is

managed by a group of professional personnel such as Medical Doctor, Registered Nurses and Experienced

Technicians and assisted by around 200 volunteers to provide excellent treatments for some 75 haemodialysis

patients. The centre caters to around 30 patients on daily basis. Fibon had given donation with the hope to ease

their medical expenses.

ANNUAL REPORT 2015



21

KIWANIS CLUB OF KLUANG MANDARIN

Kiwanis Club of Kluang Mandarin was established in the year 2007 with the mission of providing support and

assistance to persons with physical disabilities. Their main aims are providing day care services and simple

education for the disabled people. Currently there are around 33 disabled persons ranging from 7 to 40 years

olds attached to the club. It has a team of 7 teachers, 1 administration staff and 2 volunteers helping out at the

club. Kiwanis Club has been a very active club for the last 10 years. It has held various activities for the

unfortunates and together with their families.

Fibon as part of caring community, paid a visit and donated small token of contribution.



22

HANDICAPPED AND DISABLED ASSOCIATION STATE OF JOHORE, KLUANG

Handicapped and Disable Association State of Johore (Kluang) is a charitable organisation for the physically and

mentally disabled person of all ages, races and religions in Malaysia. It was officially opened on the 16th July,

2008. The organisation aims at providing a shelter and home for the forgotten citizens of our society, providing

them with daily needs and neccessities, foods, clothings and medical attention. Currently it is taking care of 25

handicapped and disabled persons of different races and genders with age ranging from 13 to 72 years old. The

organisation has total of 8 staffs and workers including a cook, a teacher, a nurse, 2 day caretakers and 2 night

caretakers to look after the residents in this home. The center also provide teaching and training to the

handicapped and disabled persons. It depends fully on donations and contributions from governmental and non-

governmental organisations for the daily running of the home.

Fibon as part of caring community, paid a visit and donated a small token of contribution to the home.

ANNUAL REPORT 2015



23

PERTUBUHAN KEBAJIKAN ANAK-ANAK YATIM DAMO, KLUANG

Pertubuhan Kebajikan Anan-Anak Yatim Damo, Kluang is a non-profitable welfare home for orphans and single

family children. It was established about 10 years ago and currently has 18 children (single family and orphans)

of different races and faiths staying at the center. The center was established with the aim of providing a home

and education for the needy. Currently there are only 2 volunteers including Mr Damo helping at the center.

Fibon Berhad has made regular visits and contributions to the center.



24

LEE MEH YEN (IC NO. 411121-01-5396)

Madam Lee Meh Yen was diagnosed with cancer of the colon and undergone surgical operation in October 2014

to remove the tumors. During the operation, a section of the colon was removed and reconnection of the colon

was not possible. After the surgery, normal passing of body waste was not possible. Daily passing of body

wastes has to be done through an opening in the wall of the abdomen. Special adhesive and plastic bags are

required to be fitted to the abdomen to collect the waste.

The costs of these special plastic bags are huge and are a burden to Mdm. Lee Meh Yen. She needs a daily

constant supply of these plastic bags and find it difficult to afford to buy them.

Fibon has come to know of her difficulty and predicament and has come up with some funds and donated some

special plastic bags for her daily use.

ANNUAL REPORT 2015



25

CHAY YOON KOY (620324-01-5071)

Mr Chay Yong Koy, a father of three girls of age 4, 11 and 14 years old, was diagnosed with stage 4 cancer of

the lymph in April 2014. The cancer had since spread to the nose and eyes causing the right eye blinded. He had

to go through 25 rounds of electrotherapy follow with another 6 rounds of chemotherapy to treat the cancer.

The enormous medical expenses were too much for his meager income working as a laborer and fruit harvester

in an oil plant plantation. He urgently needed contributions from whoever or wherever to lighten the heavy burden

from the medical expenses.

Fibon has come to know of his predicament and has donated some contribution to help in the medical expenses.



26

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. HANDICAPPED AND DISABLED ASSOCIATION STATE OF JOHORE, KLUANG

4. KIWANIS CLUB OF KLUANG MANDARIN

5. MIRIAM HOME CANOSSIAN SISTERS, KLUANG

6. PERTUBUHAN KEBAJIKAN ANAK-ANAK YATIM DAMO, KLUANG

7. LEE MEH YEN (411121-01-5396)

8. CHAY YOON KOY (620324-01-5071)

ANNUAL REPORT 2015

Statement on Risk Management & Internal Control for the financial year ended 31 May 2015

27

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 discussed during

management meetings. The Management holds

monthly meetings to monitor actual results, and

significant variances are being investigated and

management action taken, where necessary, as

well as listening to feedback of the daily operational

issues.

Statement on Risk Management & Internal Control for the financial year ended 31 May 2015 cont’d

28

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 2015 was RM28,704.50.

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 30 July 2015, 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

ANNUAL REPORT 2015

Statement on Risk Management & Internal Control for the financial year ended 31 May 2015 cont’d

29

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 11 September 2015

Statement on Directors’ Responsibilities

In respect of the audited financial statements

30

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.

ANNUAL REPORT 2015

Additional Compliance Information

31

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.

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 RM17,032.

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 2015 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.

Additional Compliance Information cont’d

32

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 2015.


ANNUAL REPORT 2015

33

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

34

39

39

40

42

44

45

47

49

Directors’ Report

34

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 2015.

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 3,651 3,867

Attributable to:-

Owners of the Company 3,651 3,867

DIVIDENDS

A first and final single tier dividend of 1.10 sen per ordinary share amounting to RM1,078,000 for the financial

year ended 31 May 2014 was approved by the shareholders at the Annual General Meeting held on 29 October

2014 and paid on 29 December 2014.

At the forthcoming Annual General Meeting, a first and final single tier dividend of 1.05 sen per ordinary share

amounting to RM1,029,000 in respect of the financial year ended 31 May 2015 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

2016.

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 2015

Directors’ Report cont’d

35

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.


36

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


Chong Chee Siong (Appointed on 1.8.2015)

Pursuant to Article 121 of the Articles of Association of the Company, Pang Chee Khiong and Datuk Mohamad

Saleh Bin Mohd Ghazali retire by rotation at the forthcoming annual general meeting and being eligible, offer

themselves for re-election.

Pursuant to Article 126 of the Articles of Association of the Company, Chong Chee Siong, the newly appointed

director is to retire by rotation at the forthcoming annual general meeting and being eligible, offers himself for re-

election.

ANNUAL REPORT 2015


37

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 1.6.2014 Bought Sold At 31.5.2015 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

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.

AUDITORS

The auditors, Messrs. Crowe Horwath, have expressed their willingness to continue in office.


38

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS

DATED 11 SEPTEMBER 2015

Pang Chee Khiong

Lim Wai Kiew

ANNUAL REPORT 2015

Statement by Directors

39

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 42 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 2015 and of their financial performance and cash flows for the financial year ended on

that date.

The supplementary information set out in Note 31, 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 11 SEPTEMBER 2015

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

42 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 11 September 2015

Pang Chee Khiong Before me

Ong San Kee

Persuruhjaya Sumpah

(Commissioner for Oaths)

349B & 351B

Jalan Ong Kim Wee

75300 Malaka

Independent Auditors’ Report to the Members of FIBON BERHAD (Incorporated in Malaysia) Company No: 811010-H

40

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 2015 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 42 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 2015 and of their 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.

ANNUAL REPORT 2015

Independent Auditors’ Report to the Members of FIBON BERHAD cont’d (Incorporated in Malaysia) Company No: 811010-H Cont’d

41

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 31 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 Tan Lin Chun Firm No: AF 1018 Approval No: 2839/10/15(J)

Chartered Accountants Chartered Accountant

11 SEPTEMBER 2015

Melaka

Statements of Financial Position at 31 May 2015

The annexed notes form an integral part of these financial statements. 42


2015 2014 2015 2014

Note RM’000 RM’000 RM’000 RM’000

ASSETS

NON-CURRENT ASSETS Investment in subsidiaries 5 - - 10,130 8,820

Property, plant and equipment 6 5,563 5,960 * *

Intangible assets Trade receivables

7 9

1,139 229

1,187 -

- -

- -

6,931 7,147 10,130 8,820

CURRENT ASSETS

Inventories 8 1,546 989 - -

Trade receivables 9 3,927 5,450 - -

Other receivables, deposits and prepayments 10

907

937

1 1

Tax recoverable 338 314 14 16

Deposits with licensed banks 11 16,650 14,020 4,453 2,501

Cash and bank balances 9,388 8,022 379 844

32,756 29,732 4,847 3,362

TOTAL ASSETS 39,687 36,879 14,977 12,182

ANNUAL REPORT 2015

Statements of Financial Position at 31 May 2015 cont’d


* Less than RM1,000.


2015 2014 2015 2014

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 (2,669) (2,615) - -

Retained profits 15 29,875 27,302 4,414 1,625

SHAREHOLDERS' EQUITY 37,713 35,194 14,921 12,132

NON-CURRENT LIABILITY

Deferred tax liabilities 16 692 645 - -

CURRENT LIABILITIES

Trade payables 17 728 472 - -

Other payables and accruals 18 499 529 56 50

Provision for taxation 55 39 - -

1,282 1,040 56 50

TOTAL LIABILITIES 1,974 1,685 56 50

TOTAL EQUITY AND LIABILITIES 39,687 36,879 14,977 12,182

Statements of Comprehensive Income for the financial year ended 31 May 2015



2015 2014 2015 2014 Note RM’000 RM’000 RM’000 RM’000

REVENUE 19 13,588 15,318 4,601 1,801

COST OF SALES (4,541) (6,725) - - GROSS PROFIT 9,047 8,593 4,601 1,801

OTHER INCOME 1,174 1,292 82 249 10,221 9,885 4,683 2,050

SELLING AND DISTRIBUTION

EXPENSES

(231) (203) -

- -

ADMINISTRATIVE EXPENSES (4,786) (4,310) (761) (656) PROFIT BEFORE TAX 20 5,204 5,372 3,922 1,394

INCOME TAX EXPENSE 23 (1,553) (1,369) (55) (67) PROFIT AFTER TAX 3,651 4,003 3,867 1,327

OTHER COMPREHENSIVE

EXPENSES

- Foreign currency translation (54) 14 - -

TOTAL COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR

3,597 4,017 3,867 1,327

PROFIT AFTER TAXATION

ATTRIBUTABLE TO:-

Owners of the Company 3,651 4,003 3,867 1,327

TOTAL COMPREHENSIVE INCOME

ATTRIBUTABLE TO:-

Owners of the Company 3,597 4,017 3,867 1,327

EARNINGS PER SHARE

- basic (sen) 24 3.73 4.09

- diluted (sen) 24 N/A N/A

ANNUAL REPORT 2015

Statements of Changes in Equity for the financial year ended 31 May 2015


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 1.6.2013 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 31.5.2014/1.6.2014 9,800 707 (15) (2,600) 27,302 35,194

Profit after taxation for financial year - - - - 3,651 3,651

Other comprehensive income for the

financial year

- Foreign currency translation reserve - - (54) - - (54)

Total comprehensive income for the

financial year - - (54) - 3,651 3,597

Dividends paid 25 - - - - (1,078) (1,078) Balance at 31.5.2015 9,800 707 (69) (2,600) 29,875 37,713

Statements of Changes in Equity for the financial year ended 31 May 2015 cont’d


The Company

Non-

Distributable Distributable

Share Share Retained

Capital Premium Profits Total

Note RM’000 RM’000 RM’000 RM’000

Balance as at 1.6.2013 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 31.5.2014/1.6.2014 9,800 707 1,625 12,132

Total comprehensive income for

the financial year - - 3,867 3,867

Dividends paid 25 - - (1,078) (1,078) Balance at 31.5.2015 9,800 707 4,414 14,921

ANNUAL REPORT 2015

Statements of Cash Flows for the financial year ended 31 May 2015


The Group The Company 2015 2014 2015 2014

Note RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax 5,204 5,372 3,922 1,394

Adjustments for:- Amortisation of development expenditure Bad debts written off

98 6

98 -

- -

- -

Depreciation of property, plant and equipment 422 391 * * Loss on disposal of plant and equipment 8 12 - - Goodwill written off - 46 - - Interest income (460) (447) (82) (72) Unrealised (gain)/loss on foreign exchange (45) (122) 30 (74)

Operating profit before working capital changes 5,233 5,350 3,870 1,248 (Increase)/Decrease in inventories (582) 471 - - Decrease/(Increase) in trade and other receivables 1,312 (636) - - Increase/(Decrease) in trade and other payables 223 (48) 7 8

CASH FROM OPERATIONS 6,186 5,137 3,877 1,256 Tax refund 292 250 23 18 Tax paid (1,803) (1,739) (77) (90)

NET CASH FROM OPERATING ACTIVITIES 4,675 3,648 3,823 1,184 CASH FLOWS FROM/(FOR) INVESTING

ACTIVITIES

Increase in Intangible assets

(50) (141) - -

Investment in subsidiary - - (4,000) (2,030) Interest received 460 447 82 72 Proceeds from disposal of plant and equipment 187 24 - - Purchase of property, plant and equipment 6 (224) (843) - - Repayment from subsidiaries - - 2,660 3,379

NET CASH FROM/(FOR) INVESTING ACTIVITIES

373 (513) (1,258) 1,421

BALANCE CARRIED FORWARD 5,048 3,135 2,565 2,605

Statements of Cash Flows for the financial year ended 31 May 2015 cont’d



2015 2014 2015 2014

Note RM’000 RM’000 RM’000 RM’000

BALANCE BROUGHT FORWARD 5,048 3,315 2,565 2,605

CASH FLOWS FOR FINANCING

ACTIVITY

Dividends paid (1,078) (1,225) (1,078) (1,225)

NET CASH FOR FINANCING

ACTIVITY

(1,078) (1,225) (1,078) (1,225)

EFFECT OF EXCHANGE RATE

CHANGES ON CASH AND CASH

EQUIVALENTS

26 79 - - NET INCREASE IN CASH AND CASH

EQUIVALENTS 3,996 1,989 1,487 1,380

CASH AND CASH EQUIVALENTS AT

BEGINNING OF THE FINANCIAL

YEAR 22,042 20,053 3,345 1,965

CASH AND CASH EQUIVALENTS AT

END OF THE FINANCIAL YEAR 26 26,038 22,042 4,832 3,345


ANNUAL REPORT 2015

Notes to the Financial Statements for the financial year ended 31 May 2015

49

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 11 September 2015.

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.


Notes to the Financial Statements for the financial year ended 31 May 2015 cont’d

50

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)

Amendments to MFRS 10, MFRS 12 and MFRS 12 and MFRS 127(2011): Investment Entities

Amendments to MFRS 119: Defined Benefit Plans – Employee Contributions

Amendments to MFRS 132: Offsetting Financial Assets and Financial Liabilities

Amendments to MFRS 136: Recoverable Amount Disclosure for Non-financial Assets

IC Interpretations 21 Levies

Annual Improvements to MFRSs 2010 – 2012 Cycle

Annual Improvements to MFRSs 2011 – 2013 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.


ANNUAL REPORT 2015


51

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 (IFRS 9 issued by IASB in July 2014) 1 January 2018 MFRS 15 Revenue from Contract with Customers 1 January 2018 Amendments to MFRS 10 and MFRS 128(2011): Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

1 January 2016

Amendments to MFRS 11: Accounting for Acquisition on Interests in Joint Operations 1 January 2016 Amendments to MFRS 10, MFRS 12 and MFRS 128 (2011): Investment Entities – Applying the Consolidation Exception

1 January 2016

Amendments to MFRS 101: Presentation of Financial Statements – Disclosure Initiative 1 January 2016 Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and Amortisation

1 January 2016

Amendments to MFRS 116 and MFRS 141: Agriculture – Bearer Plants 1 January 2016 Amendments to MFRS 127(2011): Equity Method in Separating Financial Statements 1 January 2016 Annual Improvements to MFRSs 2012 – 2014 Cycle 1 January 2016

The above mentioned accounting standards and interpretations (including the consequential

amendments, if any) are not expected to have any material impact on the Group’s financial statements

upon their initial application.



52

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.

(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.

ANNUAL REPORT 2015


53

4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

(a) Critical Accounting Estimates and Judgements (Cont’d)

(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.



54


(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 2015


55


(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 joint 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.


56


(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 recognition, 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 2015


57


(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.


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.


58



(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.


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 2015


59



(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.


60


(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 represent costs incurred by the Group to obtain certifications for capabilities

to design, construct and develop low-voltage switchboards to meet international standards. As the

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 2015


61


(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.


62


(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 2015


63


(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 Group.

(ii) Defined Contribution Plans

The Group'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 Group 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 entity 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.


64


(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 2015


65


(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.



66

5. INVESTMENT IN SUBSIDIARIES

The Company 2015 2014 RM’000 RM’000 Unquoted shares, at cost - in Malaysia 10,129 6,129 - outside Malaysia 1 1

10,130 6,130

Quasi loan - 2,690

10,130 8,820

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

2015 2014 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% 100% Factoring, leasing, development finance and building credit activities

* Audited by auditor other than Crowe Horwath.

# Based on unaudited figures.

ANNUAL REPORT 2015


67

6. PROPERTY, PLANT AND EQUIPMENT

At Depreciation Exchange At 1.6.2014 Additions Transfer Disposal Charge Difference 31.5.2015 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 2,392 - - - (77) - 2,315 Plant and machinery 1,642 53 193 (11) (252) (4) 1,621 Motor vehicles 511 69 - (184) (68) - 328 Office equipment, furniture and fittings 156 9 - * (25) * 140 Plant and machinery under construction 159 93 (193) - - - 59 5,960 224 - (195) (422) (4) 5,563

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

* Less than RM1,000



68

6. PROPERTY, PLANT AND EQUIPMENT (Cont’d)

At Accumulated Net Book Cost Depreciation Value The Group RM’000 RM’000 RM’000 At 2015 Freehold land 1,100 - 1,100 Building 2,557 (242) 2,315 Plant and machinery 2,790 (1,169) 1,621 Motor vehicles 593 (265) 328 Office equipment, furniture and fittings 256 (116) 140 Plant and machinery under construction 59 - 59 7,355 (1,792) 5,563

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

[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK]

ANNUAL REPORT 2015


69

7. INTANGIBLE ASSETS

Intangible assets can be broken down into:- The Group 2015 2014 RM’000 RM’000

Development expenditure 212 310 Industrial operating rights 927 877

1,139 1,187

The Group 2015 2014 RM’000 RM’000

(i) Development Expenditure

Net book value at 1 June 310 408 Amortisation charge for the year (98) (98)

Carrying value at 31 May 212 310

The Group 2015 2014 RM’000 RM’000

At cost 490 490 Accumulated amortisation (278) (180)

212 310

The Group 2015 2014 RM’000 RM’000 (ii) Industrial Operating Rights

At cost 927 877



70

8. INVENTORIES

The Group

2015 2014

RM’000 RM’000

At cost:-

Raw materials 949 549

Work-in-progress 330 225

Finished goods 256 198

Trading goods 11 17

1,546 989

None of the inventories are carried at net realisable value.

The Group

2015 2014

RM’000 RM’000

Recognised in profit or loss:-

Inventories recognised as cost of sales 4,541 6,725

9. TRADE RECEIVABLES

The Group 2015 2014 RM’000 RM’000 Trade receivables, net 4,156 5,450 Amount receivables within one year (3,927) (5,450)

Non-current portion 229 -

Industrial Operating Rights

At cost 229 -

The Group’s normal trade credit terms range from 30 to 180 days (2014: 30 to 180 days). Other credit terms are

assessed and approved on a case-by-case basis.

ANNUAL REPORT 2015


71

10. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

The Group The Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Other receivables 47 61 - - Deposits 31 34 1 1 Prepayments 26 53 - - Deposit paid for purchase of freehold land 803 789 - -

907 937 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 3.58% (2014: 0.10% to 6.00%) per annum. The deposits have

maturity periods ranging from 30 to 365 days (2014: 7 to 365 days).

12. SHARE CAPITAL

The Company

2015 2014

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.


72

14. OTHER RESERVES

Foreign

Currency

Translation Merger

Reserve Deficit Total

RM’000 RM’000 RM’000

At 1.6.2013 (29) (2,600) (2,629)

Movement during the year 14 - 14

At 1.6.2014/31.5.2014 (15) (2,600) (2,615)

Movement during the year (54) - (54) At 31.5.2015 (69) (2,600) (2,669)

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.

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.

ANNUAL REPORT 2015


73

16. DEFERRED TAX LIABILITIES

The Group 2015 2014 RM’000 RM’000 At 1 June As previously stated 472 540 Revaluation of land and building 173 173

As restated 645 713

Recognised in profit or loss (Note 23) 47 (68) Exchange difference * * At 31 May 692 645

The deferred taxation arises as a result of:-

The Group 2015 2014 RM’000 RM’000 Deferred tax liabilities An excess of carrying value over tax base 499 340 Intangible assets capitalised 228 325 Revaluation of land and building 151 173

Gross deferred tax liabilities 878 838

Deferred tax assets Unabsorbed tax losses 116 141 Unutilised capital allowances 70 52 Gross deferred tax assets

186 193

Net deferred tax liabilities 692 645


At the end of the reporting period, the Group has tax losses and capital allowances of approximately RM483,000 and RM291,000 (2014: RM588,000 and RM217,000) 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 (2014: 30 to 90 days).


74

18. OTHER PAYABLES AND ACCRUALS

The Group The Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Other payables 103 192 - - Accrued expenses 142 105 56 50 Payroll liabilities 254 232 - -

499 529 56 50

19. REVENUE

The Group The Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Dividend income - - 4,000 1,200 Management fee received - - 601 601 Sale of goods 13,588 15,318 - -

13,588 15,318 4,601 1,801


ANNUAL REPORT 2015


75

20. PROFIT BEFORE TAX The Group The Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

Profit before tax is arrived at after charging/(crediting):-

Audit fee 74 68 19 18 Amortisation of development expenditure Bad debts written off

98 6

98 -

- -

- -

Depreciation of property, plant and equipment 422 391 * * Directors’ fee 270 260 270 260 Directors’ non-fee emoluments 1,390 1,256 6 6 Goodwill written off - 46 - - Loss on disposal of plant and equipment 8 12 - - Rental of premises 61 60 - - Research and development expenditure 666 628 - - (Gain)/Loss on foreign exchange - realised (589) (714) 14 (103) - unrealised (45) (122) 30 (74)

Interest Income - loans and receivables financial assets (460) (447) (82)

(72)


Included in research and development expenditure are employee benefits which comprised:-

- Director’s remuneration - EPF contribution of RM83,904 (2014: RM77,520)

- Director’s remuneration - emoluments of RM442,220 (2014: RM408,620)

- Staff costs of RM139,385 (2014: RM137,255)

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 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Non-executive directors:- - Fees 75 72 75 72 - Other emoluments 6 6 6 6

81 78 81 78

Executive directors:-

- Fees 195 188 195 188 -Salaries, bonus and other emoluments 1,607 1,462 - - - Employees provident fund 303 274 - -

2,105 1,924 195 188

2,186 2,002 276 266


76

21. DIRECTORS’ REMUNERATION (Cont’d)

The breakdown of the categories charged out to:-

The Group The Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Directors’fee Directors’ non-fee emoluments Directors’ remuneration in research and

development expenditure

270 1,390

526

260 1,256

486

270 6

-

260 6

-

2,186 2,002 276 266

22. EMPLOYEE BENEFITS

The Group The Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Short-term employee benefits 3,432 3,263 227 194 Contribution to a defined contribution

plan 446 421 28 23

3,878 3,684 255 217

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 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Current tax expense:- - for the current financial year 1,345 1,363 62 74 - under/(over) provision in previous financial years 34 (19) (7)

(7)

- foreign tax 127 93 - -

1,506 1,437 55 67

Deferred tax (Note 16):-

- Relating to origination or reversal of temporary differences (4) 44 - -

- Effect of changes in corporate tax rate from 25% to 24% on deferred tax - (78) - -

- Under/(Over) provision in previous financial years 51 (34) - -

47 (68) - -

Total tax expense 1,553 1,369 55 67

ANNUAL REPORT 2015


77

23. INCOME TAX EXPENSE (Cont’d)

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:-

The Group The Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

Profit before tax 5,204 5,372 3,922 1,394

Tax at the statutory tax rate of 25% 1,301 1,343 981 349

Tax effects of:- - non-deductible expenses 123 63 81 25 - non-taxable income - - (1,000) (300) Deferred tax assets not recognised during

the financial year (Over)/under provision in previous

financial year:-

24

78

-

-

- income tax 34 (19) (7) (7) - deferred taxation 51 (34) - - Effect of changes in corporate tax rate

from 25% to 24% on deferred tax - (78) - - Effect of different tax rates in foreign

jurisdiction 20 16 - -

Tax expense for the financial year

1,553

1,369

55

67

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 RM3,651,000 (2014: RM4,003,000) by the weighted average number of ordinary shares in issue

during the financial year of 98,000,000 (2014: 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

2015 2014

RM’000 RM’000

Recognised during the financial year:-

- first and final single tier dividend of 1.10 sen per ordinary share in respect of financial year ended 31 May 2014 1,078 -

- first and final single tier dividend of 1.25 sen per ordinary share in respect of financial year ended 31 May 2013 - 1,225

1,078 1,225


78

25. DIVIDENDS (Cont’d)

At the forthcoming Annual General Meeting, a first and final single tier dividend of 1.05 sen per ordinary share amounting to RM1,029,000 in respect of the financial year ended 31 May 2015 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 2016.

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 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Fixed deposits with licensed banks 16,650 14,020 4,453 2,501 Cash and bank balances 9,388 8,022 379 844 26,038 22,042 4,832 3,345


ANNUAL REPORT 2015


79

27. OPERATING SEGMENTS

Segment information is presented based on the Group’s management and internal reporting structure.

The Group comprises the following main business segments:

(i) Sales of goods - manufacturing and trading of electrical insulators, electrical enclosures, switchboard equipment parts and meter boards.

(ii) Financing income – engaging in financial business of leasing factoring activities.

The management assesses the performance of the operating segments based on operating profit or loss which is measured differently from those disclosed in the consolidated financial statements.

Group income taxes are managed on a group basis and are not allocated to operating segments.

(a)

There were no comparative information required due to the Group derived its financing income starting from this financial year.

SALES OF FINANCING By Business Segment:- GOODS INCOME ELIMINATIONS CONSOLIDATED RM’000 RM’000 RM’000 RM’000 2015 Revenue External revenue 13,503 85 - 13,588 Inter-segment revenue 1,614 - (1,614) -

Total segment revenue 15,117 85 (1,614) 13,588

Results Segment results 5,344 (140) 5,204 Income tax expense - - (1,553)

Profit after tax 3,651

Segment assets 37,748 1,798 (197) 39,349 Unallocated asset - - - 338

Total assets 37,748 1,798 (197) 39,687

Segment liabilities 1,326 98 (197) 1,227 Unallocated liabilities - - - 747

Total liabilities 1,326 98 (197) 1,974

Other information Capital expenditure 224 - - 224 Depreciation and amortisation 520 - - 520 Interest Income (460) - - (460)


80

27. OPERATING SEGMENTS (Cont’d)

The Group 2015 2014 (b) By Geographical Segment:- RM’000 RM’000

Sales revenue by geographical market:- - Malaysia 3,694 4,991 - Singapore 4,851 5,040 - Australia 2,375 2,025 - Indonesia 800 669 - United Kingdom - 170 - Others 1,868 2,423

13,588 15,318

(c) Major Customers

The following are major customers with revenue equal to or more than 10% of Group revenue:-

Revenue Segment 2015 2014 RM’000 RM’000

Customer 1 1,616 1,671 Malaysia Customer 2 - 2,182 Malaysia


ANNUAL REPORT 2015


81

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 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 (i) Subsidiaries Dividend received/ receivable from a

subsidiary

-

-

4,000

1,200

Management fee received/ receivable from subsidiaries

-

-

601

601

(ii) Persons connected to the directors

Personnel compensation 273 257 207 191

(iii) Key management personnel

compensation

Short-term employee benefits 2,134 1,964 460 437 Post employment benefits - Defined contribution plan 325 295 22 20

2,459 2,259 482 457

Information regarding outstanding balances arising from related party transactions as at 31 May 2015 is

disclosed in Note 5 to the financial statements.

29. CAPITAL COMMITMENT

The Group

2015 2014

RM’000 RM’000

Purchase of property, plant and equipment:-

Approved but not contracted for - 280

Approved and contracted for 7,101 7,101


82

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 2015 Financial assets Trade receivables 1,504 24 489 - - 2,017 Fixed deposits with licensed

banks

-

2,606

-

452

-

3,058 Cash and bank balances 2,943 2,278 2,073 305 233 7,832

4,447 4,908 2,562 757 233 12,907

Financial liabilities

Trade payables (15) - (409) - - (424)

(15) - (409) - - (424)

Currency exposure 4,432 4,908 2,153 757 233 12,483

ANNUAL REPORT 2015


83

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 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



84





The Company’s exposure to foreign currency is as follows:-

AUSTRALIAN POUND DOLLAR STERLING TOTAL THE COMPANY RM’000 RM’000 RM’000 2015 Financial assets Fixed deposits with licensed banks 803 - 803

Cash and bank balances 57 305 362

Currency exposure 860 305 1,165

AUSTRALIAN POUND DOLLAR STERLING TOTAL The Company RM’000 RM’000 RM’000

2014

Financial assets Fixed deposits with licensed banks 743 - 743 Cash and bank balances 101 - 101

Currency exposure

844

-

844

ANNUAL REPORT 2015


85





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 2015 2014 2015 2014 Increase/

(Decrease) Increase/



(Decrease)

RM’000 RM’000 RM’000 RM’000 Effects on profit after taxation Australian Dollar: - strengthened by 7% (2014: 2%) 274 51 48 10

- weakened by 7% (2014: 2%) (274) (51) (48) (10)

Singapore Dollar:

- strengthened by 6% (2014: 2%) 190 85 - -

- weakened by 6% (2014: 2%) (190) (85) - -

United States Dollar:

- strengthened by 2% (2014: 4%) 28 61 - -

- weakened by 2% (2014: 4%) (28) (61) - -

Pound Sterling:

- strengthened by 4% (2014: 3%) 23 16 9 -

- weakened by 4% (2014: 3%) (23) (16) (9) -


86




(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:-


2015 2014 2015 2014

Increase/ (Decrease)




RM’000 RM’000 RM’000 RM’000

Effects on profit after taxation Increase of 100 basis points (bp)

(2014:100) 118 105 33 19

Decrease of 100 bp (2014: 100) (115) (102) (33) (19)

(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.

ANNUAL REPORT 2015


87



(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) (2014: one

(1)) groups of customer which constituted approximately 14% (2014: 22%) 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 2015 2014 RM’000 RM’000 Asia 3,607 4,996

Australia and Oceania 497 406 Others 52 48

4,156 5,450

Ageing analysis

The ageing analysis of the Group’s trade receivables as at 31 May 2015 is as follows:-

Carrying Value

2015 2014

The Group RM’000 RM’000

Not past due 3,104 2,911

Past due:-

- less than 3 months 683 1,246 - 3 to 6 months 263 1,293 -6 to 9 months 29 - -9 to 12 months 77 -

4,156 5,450

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.


88



(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 2015 Trade payables 728 728 728

Other payables and accruals 499 499 499

1,227 1,227 1,227

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

ANNUAL REPORT 2015


89



(iii) Liquidity Risk (Cont’d)

Contractual Carrying Undiscounted Within Amount Cash Flows 1 Year The Company RM’000 RM’000 RM’000 2015


Contractual Carrying Undiscounted Within Amount Cash Flows 1 Year The Company RM’000 RM’000 RM’000 2014


(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.



90


(c) Classification Of Financial Instruments

The Group

2015 2014

RM’000 RM’000

Financial Assets

Loans and receivables financial assets

Trade receivables 4,156 5,450

Other receivables and deposits 881 884

Deposits with licensed banks 16,650 14,020

Cash and bank balances 9,388 8,022

31,075 28,376

Financial Liabilities

Other financial liabilities

Trade payables 728 472

Other payables and accruals 499 529

1,227 1,001

The Company

2015 2014

RM’000 RM’000

Financial Assets

Loans and receivables financial assets

Other receivables and deposits 1 1

Deposits with licensed banks 4,453 2,501

Cash and bank balances 379 844

4,833 3,346

Financial Liabilities

Other financial liabilities

Other payables and accruals 56 50

56 50

(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.

ANNUAL REPORT 2015


91

31. 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

2015 2014 RM’000 RM’000 Total retained profits: - realised 30,522 27,825 - unrealised (647) (523)

At 31 May 29,875 27,302

The Company

2015 2014 RM’000 RM’000 Total retained profits: - realised 4,384 1,699 - unrealised 30 (74)

At 31 May 4,414 1,625


Analysis of Shareholdings as at 28 August 2015

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 56 3.85 1,313 0.00

100 to 1,000 946 65.02 318,540 0.32

1,001 to 10,000 224 15.40 1,280,431 1.31

10,001 to 100,000 193 13.26 6,211,798 6.34

100,001 to less than 5% of

issued shares

32 2.20 38,307,480 39.09

5% and above of issued shares 4 0.27 51,880,438 52.94

Total 1,455 100.00 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 # - -

Chong Chee Siong 14,826 # - -

# Less than 1%

* Indirect interest held through spouse

ANNUAL REPORT 2015

Analysis of Shareholdings as at 28 August 2015 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


Account For Koh Siew Kong

4,700,500 4.80


Account For Junior Koh Siew Hui

4,413,800 4.50

9. Pang Yoke Wah 3,852,484 3.93

10. Pang Nyuk Yin 2,940,000 3.00

11. Pang Yoke Lian 2,940,000 3.00

12. CIMSEC Nominees (Asing) Sdn. Bhd. CIMB For Frigate Equities

Ltd. (PB)

2,139,548 2.18

13. Lim Wai Kiew

14. UOB Kay Hian Nominees (Asing) Sdn Bhd Exempt An For UOB

Kay Hian Pte Ltd (A/C Clients)

1,470,000

1,131,700

1.50

1.15


Account For Lim Pay Chuan

576,800 0.59

16. Lim Ah Pe

17. Wong Zi Yan

463,000

400,422

0.47

0.41

18. AMSEC Nominees (Tempatan) Sdn. Bhd. Pledged Securities

Account For Ng Siew Yann

367,200 0.37

19. Yap Booi Lek 300,000 0.31

20. Tiu Ka Han 263,000 0.27

21. Koh Kian Chun 252,300 0.26

22. Wong Seau Han @ Stella Wan Seau Han 220,100 0.22

23. Yeo Khee Aik

24. Pang Yoke Wah

200,000

197,600

0.20

0.20

25. Leong Yong Mee 181,300 0.19

26. Alliance Group Nominees (Tempatan) Sdn. Bhd. Pledged

Securities Account for Tan Eng Hock (100100)

27. Hee Yau Sing

28. Tee Bryan

179,000

169,300

155,000

0.18

0.17

0.16

29. Tan Kin Choo 150,322 0.15

30. Ong Beng Chew 150,000 0.15

Analysis of Shareholdings as at 28 August 2015 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

ANNUAL REPORT 2015

List of Property as at 31 May 2015

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

2015

(RM’000)

No.12A, Jalan 20,

Taman Sri Kluang,

86000 Kluang,

Johor.

Freehold 50,870 35,979 Factory and

office

building

16 6.12.2010 3,136

No. 18, Jalan 1,

Taman Sri Kluang,

86000 Kluang,

Johor.

Freehold 3,080 1,540 Double

storey shop

house

9 11.1.2014 279


Notice of Eighth Annual General Meeting

96

NOTICE IS HEREBY GIVEN THAT the Eighth 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 Friday, 30 October 2015

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 2015 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 1.05 sen for the year ended

31 May 2015.

(Resolution 1)

3. To re-elect Mr. Pang Chee Khiong who is retiring under Article 121 of the

Company’s Articles of Association of the Company.

(Resolution 2)

4. To re-elect Mr. Chong Chee Siong who is retiring under Article 126 of the

Company’s Articles of Association of the Company.

(Resolution 3)

5. To consider and, if thought fit, pass the following resolution pursuant to

Section 129(6) of the Companies Act, 1965:

“That pursuant to Section 129(6) of the Companies Act, 1965, Datuk

Mohamad Saleh bin Mohd Ghazali be re-appointed as Director to hold office

until the conclusion of the next Annual General Meeting of the Company.”

(Resolution 4)

6. To approve the payment of Directors’ fees of RM269,700.00 for the financial

year ended 31 May 2015.

(Resolution 5)

7. To appoint Messrs. Crowe Horwath as Auditors of the Company for the

ensuing year and to authorise the Directors to fix their remuneration.

(Resolution 6)

SPECIAL BUSINESS:

To consider and, if thought fit, pass the following Ordinary Resolutions:-

8. 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 7)

ANNUAL REPORT 2015

Notice of Eighth Annual General Meeting cont’d

97

9. 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 8)

10. To transact any other business for which due notice shall have been given in accordance with the Companies Act, 1965.

(Resolution 9)


98

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS ALSO HEREBY GIVEN that a Single Tier Final Dividend of 1.05 sen per share in respect of financial

year ended 31 May 2015 will be payable on 29 December 2015 to depositors registered in the Record of

Depositors at the close of business on 3 December 2015, if approved by shareholders at the forthcoming Eighth

Annual General Meeting on Friday, 30 October 2015.

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 2015 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 : 7 October 2015

ANNUAL REPORT 2015


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 2015 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 Eighth 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 Seventh AGM of the Company held on 29 October 2014 (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


101

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 Eighth 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 Friday, 30 October 2015 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 1.05 sen for the year ended 31 May 2015. 2. Re-election of Mr. Pang Chee Khiong as Director. 3. Re-election of Mr. Chong Chee Siong as Director. 4. Re-election of Datuk Mohamad Saleh bin Mohd Ghazali as Director. 5. Approval of the payment of Directors’ fees of RM269,700.00 for the financial year ended

31 May 2015.

6. Reappointment of Messrs Crowe Horwath as Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration.

7. Proposed Renewal of the Authority to Issue Shares Pursuant to Section 132D of the Companies act, 1965.

8 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 %

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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 2015 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

105


FIBON BERHAD

12A, JALAN 20,

TAMAN SRI KLUANG,

86000 KLUANG, JOHOR,

MALAYSIA

TEL : ( 607 ) 773 6918

FAX : ( 607 ) 774 2025

E-MAIL : [email protected]

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