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FIBON

2013
FIBON BERHAD

ANNUAL REPORT

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CONTENTS
Corporate Information

Profile of Directors

Chairmans Statement

Group Structure

Financial Highlights

Audit Committee Report

Statement on Corporate Governance

13

Statement on Internal Control

22

Statement on Directors Responsibilities

25

Additional Compliance Information

26

Financial Statements

28

Analysis of Shareholdings

91

List of Property

94

Notice of Annual General Meeting

95

Enclosed

99

Proxy Form

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ANNUAL REPORT 2013

Corporate Information
BOARD OF DIRECTORS

SHARE REGISTRAR

Pang Chee Khiong


Executive Chairman

Lim Wai Kiew


Executive Director

Symphony Share Registrars Sdn Bhd


(378993-D)
Level 6, Symphony House,
Block D13, Pusat Dagangan Dana 1,
Jalan PJU 1A/46,
47301 Petaling Jaya, Selangor.
Tel:
(603) 7841 8000
Fax:
(603) 7841 8008

Pang Nyuk Yin


Executive Director

PRINCIPAL BANKERS

Pang Fok Seng


Managing Director

OCBC Bank (M) Berhad


AmBank (M) Berhad
United Overseas Bank (M) Berhad

Datuk Mohamad Saleh Bin Mohd Ghazali


Independent Non-Executive Director
Chong Peng Khang
Independent Non-Executive Director

REGISTERED OFFICE
Koh Chun Kiat
Independent Non-Executive Director
Appointed on 14 November 2012

31-04, Level 31, Menara Landmark,


No. 12, Jln Ngee Heng,
80000 Johor Bahru, Johor Darul Takzim.
Tel:
(607) 278 1338
Fax:
(607) 223 9330

Dr.Chen Chaw Min


Independent Non-Executive Director
Resigned on 14 November 2012

HEAD OFFICE
COMPANY SECRETARY

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: hexa@fibon.com.my

Noriah Binti Md Yusof (LS No. 0009298)

AUDITORS AND REPORTING


ACCOUNTANTS
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

STOCK EXCHANGE LISTING


Main Market of Bursa Malaysia
Securities Berhad
Stock Name: Fibon
Stock Code:
0149

ADVANCE COMPOSITES

Profile of Directors
Pang Chee Khiong
Executive Chairman, Non-Independent
Mr Pang Chee Khiong, a Malaysian aged 49 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 25 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 47 is a Non-Independent Managing Director
since 25 March 2008. He has attended all four Board meetings held during the
financial year under review. He has more than 19 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 53 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 2013

Profile of Directors

contd

Lim Wai Kiew


Executive Director, Non-Independent
Ms Lim Wai Kiew, a Malaysian aged 47, is a Non-Independent Executive Director
since 9 April 2008. She has attended three out of 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 69 is an Independent
Non-Executive Director and Chairman of Audit, Remuneration and Nomination
Committee. He is appointed as Director on 20 October 2008 and has attended three
out of 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.

ADVANCE COMPOSITES

Profile of Directors

contd

Chong Peng Khang


Independent Non-Executive
Mr Chong Peng Khang, a Malaysian aged 33, is an Independent Non-Executive
Director and member of the Audit and Remuneration Committee for the Group. He
is appointed as Director on 20 October 2008 and has attended 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 an Audit Manager of a chartered accounting firm.
He is also an independent non-executive director of another company listed on the Main Market of Bursa
Malaysia Securities Berhad. He has no conflict of interest with the Group and has no family relationship with any
director and/or major shareholder of the Group. He maintains a clean record with regard to convictions for
offences, other than traffic offences, if any.

Koh Chun Kiat


Independent Non-Executive
Koh Chun Kiat, a Malaysian aged 29, is an Independent Non-Executive Director
and member of the Audit and Nomination Committee. He is appointed as Director
on 14 November 2012 and has attended two out of 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 an audit firm. He is
the Approved Company Auditor under Companies Act, 1965 and also Licensed Tax Agent under Income Tax Act
1967. He has no conflict of interest with the Group and has no family relationship with any director and/or major
shareholder of the Group. He maintains a clean record with regard to convictions for offences, other than traffic
offences, if any.

ANNUAL REPORT 2013

Chairmans Statement
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
2013.

CORPORATE GOVERNANCE
The Group acknowledges the Malaysian Code on
Corporate Governance which set out the principles,
best practices and guidelines that may be applied in
the operations of a company, so as to enhance the
transparency and accountability of public listed
companies in Malaysia. These high standards have
enabled the Group to function and perform in the
best interests of shareholders. The Board will
ensure that the requirements of Bursa Malaysia
Securities Berhad are applied and adhered to by
the Company.

FINANCIAL PERFORMANCE
For the financial year under review, the Group
registered revenue of approximately RM 16.7
million, a decrease of 1.34% compared to the
preceding year. Profit after tax increase from RM
4.5 million to RM 4.9 million. The increase is mainly
due to increase 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 20 million.

APPRECIATION
On behalf of the Board of Directors, I would like to
convey our most sincere thanks and appreciation to
every member of the Fibon family for their
continued efforts, commitment, dedication and hard
work in every level of the organization. I would also
like to take this opportunity to extend our deepest
gratitude to all our valued customers, suppliers,
business associates, investors, bankers and
authorities for their continued support and
confidence in the Group.

INDUSTRY OUTLOOK AND PROSPECTS


The global economic outlook is expected to remain
uncertain for the next twelve months due to the
impact of the Eurozone debt crisis, sovereign credit
rating and natural disasters and any recovery in
global condition is envisaged to be gradual. Despite
the global uncertainties, we remain focused on our
strategy of sales expansion of its existing products
to new markets and continue to invest in research
and development for new products.

Last but not least, I wish to extend a personal thank


you to my fellow Directors for their invaluable
guidance, advice and support. I am confident that
with your continuing support and devotion, together
we can bring Fibon to a higher level of achievement
in the years to come.

The Directors expect the Groups operating


environment to remain challenging for the financial
year ending 31 May 2014. We remain cautiously
optimistic and believe we will be able to maintain a
favourable performance and bringing the Group to a
higher platform of growth in year 2014.

DIVIDENDS

Pang Chee Khiong


Chairman

The Board is pleased to recommend a proposed


single tier final dividend of 1.25 cents per ordinary
share for FYE 31 May 2013. The proposed dividend
is subject to Shareholders approval at the
forthcoming Annual General Meeting.
The total dividends payable for the FYE 31 May
2013 would be approximately amounting to
RM1.225 million, being a dividend payout ratio of
approximately 25.0% of PAT of RM 4.905 million.

ADVANCE COMPOSITES

Group Structure

FIBON BERHAD

100 %

100 %

HEXA ANALISA

FIBON AUSTRALIA

SDN BHD

PTY LTD

100 %

100 %

FIBON UK

FIBON ELECTRIC

FIBON CAPITAL

LIMITED

(M) SDN BHD

SDN BHD

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.)

ANNUAL REPORT 2013

Financial Highlights

Financial year ended 31 May


2011
2012

2009

2010

2013

RM000

RM000

RM000

RM000

RM000

Revenue

16,474

12,891

14,498

16,901

16,674

Profit before taxation (PBT)

8,693

5,010

5,945

6,226

6,666

Profit after taxation (PAT)

8,304

4,014

4,389

4,499

4,905

Gross EPS (sen)*

17.86

5.11

6.07

6.35

6.8

Net EPS (sen)*

17.06

4.10

4.48

4.59

5.01

EARNINGS PER SHARE (EPS)

FYE 2009: Computed based on the PBT and PAT for the relevant financial years under review and divided
by the weighted average number of shares in issue of 48,666,000 during the respective financial year.

FYE 2010-2013: Computed based on the PBT and PAT for the relevant financial years under review and
divided by the issued and paid up share capital of 98,000,000 Shares for the financial year.

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ADVANCE COMPOSITES

Financial Highlights

contd

REVENUE AND PROFIT FROM ORDINARY ACTIVITY AFTER TAXATION (RM000)

NET EPS (SEN)

ANNUAL REPORT 2013

Audit Committee Report


for the financial year ended 31 May 2013
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;

COMPOSITION AND MEETINGS

5.

The composition of the Audit Committee and their


attendance at the 4 meetings held during the year
are as follows:

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.

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.

Name of Director

Designation Attendance

Datuk Mohamad
Saleh Bin Mohd
Ghazali

Independent
Non-Executive
Director

Chairman

3/4

Chong Peng Khang

Independent
Non-Executive
Director;
Member of the
MIA

Member

4/4

Koh Chun Kiat

Independent
Non-Executive
Director;
Member of the
MIA

Member

2/4

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
st
of the 1 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.

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:

ADVANCE COMPOSITES

Audit Committee Report


for the financial year ended 31 May 2013 contd
TERMS OF REFERENCE (Contd)

Attendance of the Meetings

4.

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
committees 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.

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.

2.

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.

Duties

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.

The duties of the Audit Committee include the


followings:
1.

To consider the appointment or reappointment 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
managements
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;

Meetings

Significant and unusual events;


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.

Significant adjustments resulting from the


audit;
The going concern assumption; and
Compliance with accounting standard and
other legal requirements

10

ANNUAL REPORT 2013

Audit Committee Report


for the financial year ended 31 May 2013 contd
TERMS OF REFERENCE (Contd)
4.

5.

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.

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);

The minutes of meetings shall be circulated by the


Secretary of the Committee to the Committee
members and all the other Board members.

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;

ACTIVITIES OF THE AUDIT COMMITTEE

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;

The main activities undertaken by the Audit


Committee during the financial year included the
followings:

There were four (4) Audit Committee Meetings held


during the financial year under review.

Reviewed and commented on the quarterly


financial result before recommending the
same for Boards approval.

Review any appraisal or assessment of


the performance of members of the
internal audit function;

Reviewed the audit report and observations


made by external auditors on the audited
financial statements that require appropriate
management action and the managements
response thereon and reporting them to the
Board.

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

Reviewed the external auditors scope of work


and audit plan.
Reviewed the internal audit reports, which
highlighted
the
audit
issues
and
managements response.

To consider major findings of internal


investigations
and
managements
response.
6.

7.

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

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.

To consider other topics as defined by the


Board.

The primary role of the internal auditors is to interalia, assist the Audit Committee on an ongoing
basis to:

Reporting
Review the risk management framework;
The Audit Committee is authorised to regulate its
own procedures and in particular the calling of

11

ADVANCE COMPOSITES

Audit Committee Report


for the financial year ended 31 May 2013 contd
INTERNAL AUDIT FUNCTION (Contd)
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

12

ANNUAL REPORT 2013

Statement on Corporate Governance


for the financial year ended 31 May 2013
INTRODUCTION

Board Meeting

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 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 2013, the
board met on four (4) occasions, where it
deliberated upon and considered a variety of
matters including the Groups financial results,
major investments and strategic decisions and the
business plan and direction of the Group.

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 2013
complied with the best practices indicated in the
Code.

The present Board of Directors headed by the


chairman is comprised of:

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.

4 Non-Independent Executive Directors


3 Independent Non-Executive Directors

The composition of the Board is basically in


compliance with the Bursa Securities Listing
Requirements and the Code. The Board
composition has been balanced to reflect the
interests of the major shareholders, management
and minority shareholders. Collectively, the
Directors bring a wide range of business and
financial experience relevant to the direction of the
Group.

The Board
The Group recognises the important role played by
the Board in the stewardship of the Groups
direction and operations, and ultimately, the
enhancement of long-term shareholders value. To
fulfill 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.

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.

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
shareholders value and safeguarding the interests
of stakeholders.

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. Pertaining to this recommendation, the
Board is currently exploring and considering various

13

ADVANCE COMPOSITES

Statement on Corporate Governance


for the financial year ended 31 May 2013 contd
possible alternatives prior to adoption of the best
practise moving forward.

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.

Details of Directors attendance at Board Meetings


held in the financial year ended 31 May 2013 are as
follows:
Name of Directors

No. of Meetings
Attended

Datuk Mohamad Saleh Bin


Mohd Ghazali

3/4

Dr.Chen Chaw Min

2/4

Koh Chun Kiat

2/4

Chong Peng Khang

4/4

Directors Remuneration

Pang Chee Khiong

4/4

Pang Fok Seng

4/4

Pang Nyuk Yin

4/4

Lim Wai Kiew

3/4

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 2013 are
as follows:

174,000

Salaries and
Bonus
815,224

989,224

72,000

72,000

Description

Appointment of Directors

Executive
Directors
Non Executive
Directors

The Nomination Committee task is to assist the


Board to evaluate and recommend candidates for
appointments to the Board.

Fees

Total

The number of Directors whose remuneration falls


within the following bands is:

In accordance with the Companys 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.

Description
Less than RM50,000
RM50,000 RM100,000
RM100,000 RM150,000
RM150,000 RM200,000
RM200,000 RM300,000
RM300,000 RM400,000

Executive
Directors
1
1
1
1
-

Non
Executive
3
-

Directors Training
The Group acknowledges the importance of
continuous education and training to the Board
members.

At the forthcoming Annual General Meeting, Pang


Fok Seng and Chong Peng Khang are due to retire
pursuant to Article 121 whereas Koh Chun Kiat, the
newly appointed director is to retire pursuant to
Article 126 of the Companys Articles of Association
respectively.

During the financial year, Mr. Pang Chee Khiong,


Mr. Pang Fok Seng, Ms. Pang Nyuk Yin and Ms.
Lim Wai Kiew attended Advocacy Sessions on
Corporate Disclosure for Directors organised by
the Bursa Malaysia Securities Berhad.

14

ANNUAL REPORT 2013

Statement on Corporate Governance


for the financial year ended 31 May 2013 contd
which has been included as part of the Groups and
the Companys financial reports with respect to the
audit on the statutory financial statements for the
year ended 31 May 2013. 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 Boards attention.

Mr. Chong Peng Khang had attended the following


sessions:i)

Duties of the Audit Committee

ii)

2013 Budget Seminar

iii) 2013 Budget Seminar Highlights on Tax


Changes & Its Implications on Business
iv) Dialogue Session on
Screening Methodology
v)

Revised

Shariah

Internal Control

Public Practise Programme

Mr. Koh Chun Kiat had attended the following


sessions:i)

Mandatory Accreditation Programme Training


for Directors of PLCs

ii)

Workshop On Criminal Tax Investigations &


Anti-Money Laundering

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.

iii) Seminar on XBRL

RELATIONS WITH SHAREHOLDERS AND


INVESTORS

ACCOUNTABILITY AND AUDIT

Annual General Meeting

Financial Reporting

Annual General Meeting (AGM) is the principal


forum for dialogue with shareholders. At the
Companys 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 Companys operations in the
financial year and outlines future prospects of the
Group. Further, the Groups 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 Companys registered address.

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 Groups quarterly and annual financial results
to Bursa Malaysia.

External Audit Function


Investor Relations

The Companys 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

In line with the Main Market Listing Requirements,


shareholders, investors and member of public can
access the companys announcements, quarterly
financial results, annual reports, circulars to
shareholders etc via the companys website.

15

ADVANCE COMPOSITES

Statement on Corporate Governance


for the financial year ended 31 May 2013 contd
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 Companys 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.

16

ANNUAL REPORT 2013

Statement on Corporate Governance


for the financial year ended 31 May 2013
Corporate Social Responsibilities
The Company recognises the importance of Corporate Social Responsibilities and is committed to conduct its
business activities in a socially, economically and environmentally sustainable manner.
The Company has taken a proactive approach wherever possible to provide monetary contributions to nonprofitable 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.

CHE LUAN KHOR DIALYSIS CENTRE, KLUANG.

Che Luan Khor Dialysis Centre,


Kluang
was
incorporated
in
Malaysia in August 1998 to carry
out businesses in relation with
haemodialysis services. Che Luan
Khor Dialysis Centre is equipped
with the latest medical equipment
for haemodialysis treatment. Furthermore, the centre is managed several professional personnel such as
Medical Doctor, Registered Nurses and Experienced Technicians to provide the excellent treatments for 74
haemodialysis patients. The centre can accommodate around 33 patients on daily basis.
Fibon had given donation with the hope to ease their medical expenses.

17

ADVANCE COMPOSITES

Statement on Corporate Governance


for the financial year ended 31 May 2013 contd
KIWANIS CLUB OF KLUANG MANDARIN

Kiwanis Club of Kluang Mandarin is a centre providing support and assistance to persons with disabilities. Their
main aims are providing day care services and simple education for the disabled people. There are around 30
disabled persons with 9 teachers and 1 administration staff. Kiwanis Club has been very active club for the last 9
years with various activities held for the unfortunate with their families.
Fibon as part of caring community, paid a visit and donated small token of contribution.

18

ANNUAL REPORT 2013

Statement on Corporate Governance


for the financial year ended 31 May 2013 contd
HANDICAPPED AND DISABLED ASSOCIATION STATE OF JOHORE, KLUANG
Handicapped and Disabled Association State of Johore is a charitable
centre where the unfortunate disabled people live. There are 33 inmates
comprised of Malay, Indian, Chinese and other races. 18 male and 15
female aged from 14 to 86 years old are living in this home as
residential inmates. Handicapped and Disabled Association State of
Johore helps the disabled people and provides them with shelter and
daily needs. Fibon had a great time together with them and made a
small donation to them.

19

ADVANCE COMPOSITES

Statement on Corporate Governance


for the financial year ended 31 May 2013 contd
NG CHAI HOCK (580626-01-5583)
Mr.Ng was diagnosed with stage 4 kidney cancer on April 2012. After 1 year battle with cancer, father of 3
passed away in August 2013.
A small token of contribution was donated by Fibon Berhad to the deceased family.

SABIRIN BIN YAHAYA (450517-01-5415)


th

Mr.Sabirin father of 4 children passed away due heart attack on 7 June 2013. Fibon Berhad had donated a
small token of contribution to wife of the deceased, Pn.Hasmah Binti Dollah.

20

ANNUAL REPORT 2013

Statement on Corporate Governance


for the financial year ended 31 May 2013 contd
DONATIONS
We at Fibon believe that it is a continuous journey in charity. We also believe that we might not able to take away
the pain however we can wipe their tears and give them support.
Below are the list of donations made.

1.

PDK YAQEEN DAERAH PALOH, KLUANG

2.

PERTUBUHAN KEBAJIKAN ANAK-ANAK YATIM ISLAM KLUANG

3.

MIRIAM HOME CANOSSIAN SISTERS, KLUANG

4.

PERTUBUHAN KEBAJIKAN ANAK-ANAK YATIM DAMO, KLUANG

5.

S.J.K.(CINA) PING MING KLUANG.

6.

HANDICAPPED AND DISABLED ASSOCIATION STATE OF JOHORE, KLUANG

7.

AGAPE SHELTER KLUANG

8.

PUSAT RAWATAN LUKA BIOTERAPI (MDT CENTRE SDN.BHD.), SELANGOR.

9.

EAM DIALYSIS CENTRE, SELANGOR

10. CHE LUAN KHOR DIALYSIS CENTRE, KLUANG.


11. KIWANIS CLUB OF KLUANG MANDARIN
12. NG CHAI HOCKS (580626-01-5583) FAMILY
13. SABIRIN BIN YAHAYAS (450517-01-5415) FAMILY

21

ADVANCE COMPOSITES

Statement on Risk Management & Internal Control


for the financial year ended 31 May 2013
Groups 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 Groups assets.

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 Groups assets.

RISK MANAGEMENT

Paragraph 15.26(b) of the Bursa Securities Main


Market Listing Requirements also echoed that the
Board is ultimately responsible for the Groups
system of internal control and for reviewing the
effectiveness of the internal control system.

The Board understands that risk management plays


an important role in identify risk areas which impede
the achievement of the Groups 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.

Internal control system is primarily designed to cater


for the business needs and manage the potential
business risks of the Group.

KEY ELEMENTS OF THE INTERNAL


CONTROL SYSTEM

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.

Internal controls are embedded in the Groups


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.

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 and Management Meetings


Strategic planning and detailed target setting for
each area of business are established. The Board
and Management holds monthly meetings to
monitor actual results, with significant variances are
being investigated and management action taken,
where necessary as well as listening to feedback on
daily operational issues.

BOARD RESPONSIBILITIES
The Board acknowledges its responsibility for
maintaining a sound system of internal control to
safeguard shareholders investments and the

22

ANNUAL REPORT 2013

Statement on Risk Management & Internal Control


for the financial year ended 31 May 2013 contd
towards areas with significant risks as identified by
the AC and the Management.

Performance Management Framework


Management reports are generated on a monthly
and quarterly basis to facilitate the Board and the
Groups management to perform review on the
business units. The Groups management
information system has been upgraded to provide
management with better reporting system. The
reporting and review encompass financial and nonfinancial matter for compliance and daily operational
use.

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 audit function advises 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.

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.

The cost incurred for the external independent


internal audit services in respect of the financial
year 31 May 2013 was RM19,214.40.
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.

Operational Policies and Procedures


The Groups policies and procedures form an
integral part of the internal control system to
safeguard the Groups 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.

The Financial Controller 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.

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.

On 22 July 2013, based on the letter by both the


Managing Director and the Financial Controller
provides the assurance to the Groups Board that
the Groups 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
Groups operations and that risks are at an
acceptable
level
throughout
the
Groups
businesses. Such arrangements, however, do not
eliminate the possibility of human error, deliberate

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

23

ADVANCE COMPOSITES

Statement on Risk Management & Internal Control


for the financial year ended 31 May 2013 contd
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 Groups 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 06 September 2013.

24

ANNUAL REPORT 2013

Statement on Directors Responsibilities


In respect of the audited financial statements
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.

25

ADVANCE COMPOSITES

Additional Compliance Information

UTILISATION OF PROCEEDS
The status of utilisation of proceeds from the public offering during the financial year ended 31 May 2013 is as
follows:

Purposes

(i)

Proceeds
Actual
Intended
Extended
Balance
raised
Utilisation Timeframe for Timeframe for Unutilised
RM000
RM000
Utilisation
Utilisation
RM000

1,848

1,848

(ii)

Research &
development activities
Purchase of machineries

1,700

1,700

(iii)

Geographical expansion

1,180

790

2,409

Estimated listing
expenses
Total

(iv) Working capital


(v)

3,079

18 December
2011
18 December
2011
18 December
2011
-

18 December
2012
18 December
2013
18 December
2013
-

2,000

1,330

9,137

8,747

%
Explanation

390

33

(670)

670

390

^
The initial approved time frame for utilisation is 3 years from the date of listing. The Board of Directors
have decided to extend the time frame for all remaining unutilised portions for another twelve (12) months period
until 18 December 2013 in accordance with announcement made on 18 January 2013.
*

The underutilisation of the listing expenses will be adjusted to working capital.

SHARE BUYBACKS
During the financial year under review, there were no share buyback by the Company.

OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES


During the financial year under review, the Company has not issued any options, warrants or convertible
securities.

AMERICAN DEPOSITORY RECEIPT (ADR) OR GLOBAL DEPOSITORY RECEIPT (GDR)


PROGRAMME
During the financial year under review, the Company did not sponsor any such programme.

26

ANNUAL REPORT 2013

Additional Compliance Information

contd

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 RM14,452.

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 2013 in any public document hence this information is not applicable.

PROFIT GUARANTEES
There were no profit guarantees given by the Company for the financial year.

RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE NATURE


There were no recurrent related party transactions of a revenue nature entered into during the financial year
ended 31 May 2013.

27

ADVANCE COMPOSITES

Financial Statements
Directors Report

30

Statement by Directors

35

Statutory Declaration

35

Independent Auditors Report

36

Statements of Financial Position

39

Statements of Comprehensive Income

41

Statements of Changes in Equity

42

Statements of Cash Flows

44

Notes to the Financial Statements

45

28

ANNUAL REPORT 2013

[This page intentionally left blank]

29

ADVANCE COMPOSITES

Directors Report

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 2013.

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
RM000
Profit after taxation for the financial year

4,905

Attributable to:Owners of the Company

4,905

The Company
RM000
1,301

1,301

DIVIDENDS
A first and final single tier dividend of 1.15 sen per ordinary share amounting to RM1,127,000 for the financial
year ended 31 May 2012 was approved by the shareholders at the Annual General Meeting held on 14
November 2012 and paid on 28 December 2012.
At the forthcoming Annual General Meeting, a first and final single tier dividend of 1.25 sen per ordinary share
amounting to RM1,225,000 in respect of the financial year ended 31 May 2013 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
2014.

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.

30

ANNUAL REPORT 2013

Directors Report

contd

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 no allowance for impairment losses on receivables is required.
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 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


The contingent liabilities are disclosed in Note 31 to the financial statements. 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.

31

ADVANCE COMPOSITES

Directors Report

contd

CHANGE OF CIRCUMSTANCES
At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report
or the financial statements of the Group and of the Company which would render any amount stated in the
financial statements misleading.

ITEMS OF AN UNUSUAL NATURE


The results of the operations of the Group and of the Company during the financial year were not, in the opinion
of the directors, substantially affected by any item, transaction or event of a material and unusual nature.
There has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially
the results of the operations of the Group and of the Company for the financial year.

DIRECTORS
The directors who served since the date of the last report are as follows:Pang Chee Khiong
Pang Fok Seng
Lim Wai Kiew
Pang Nyuk Yin
Chong Peng Khang
Datuk Mohamad Saleh Bin Mohd. Ghazali
Koh Chun Kiat (Appointed on 14.11.2012)
Dr. Chen Chaw Min (Resigned on 14.11.2012)

Pursuant to Article 121 of the Articles of Association of the Company, Pang Fok Seng and Chong Peng Khang
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, Koh Chun Kiat, the newly appointed
director is to retire by rotation at the forthcoming annual general meeting and being eligible, offers himself for reelection.

32

ANNUAL REPORT 2013

Directors Report

contd

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:-

At 1.6.2012

Number Of Ordinary Shares Of RM0.10 Each


Bought
Sold
At 31.5.2013

Direct Interests
Lim Wai Kiew
Pang Chee Khiong
Pang Fok Seng
Pang Nyuk Yin
Chong Peng Khang

1,470,000
21,560,552
16,398,788
2,940,000
322

1,470,000
21,560,552
16,398,788
2,940,000
322

Deemed Interests
Lim Wai Kiew
Pang Fok Seng

16,398,788
1,470,000

16,398,788
1,470,000

By virtue of their interests in shares in the Company, Lim Wai Kiew, Pang Chee Khiong, Pang Fok Seng and
Pang Nyuk Yin are deemed to have interests in shares in its subsidiaries to the extent of the Companys 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 29 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.

33

ADVANCE COMPOSITES

Directors Report

contd

SIGNIFICANT EVENT OCCURRING AFTER THE REPORTING PERIOD


The significant event occurring after the reporting period is disclosed in Note 33 to the financial statements.

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

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS


DATED 6 SEPTEMBER 2013

Pang Chee Khiong

Lim Wai Kiew

34

ANNUAL REPORT 2013

Statement by Directors

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 39 to 89 are drawn up in accordance with Malaysian
Financial Reporting Standards, International Financial Reporting Standards and the Companies Act 1965 in
Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company at 31 May
2013 and of their results and cash flows for the financial year ended on that date.
The supplementary information set out in Note 35, 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 6 SEPTEMBER 2013

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
39 to 89 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 6 September 2013

Pang Chee Khiong


Before me
Ong San Kee
Persuruhjaya Sumpah
(Commissioner for Oaths)
349B & 351B
Jalan Ong Kim Wee
75300 Malaka

35

ADVANCE COMPOSITES

Independent Auditors Report


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

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 2013 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 39 to 89.

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 Malaysia Financial Reporting Standards, International Financial Reporting Standards
and the 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 entitys 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 entitys 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 2013 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.

36

ANNUAL REPORT 2013

Independent Auditors Report


to the Members of FIBON BERHAD
(Incorporated in Malaysia) Company No: 811010-H Contd

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 35 on page 90 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.

37

ADVANCE COMPOSITES

Independent Auditors Report


to the Members of FIBON BERHAD

contd

(Incorporated in Malaysia) Company No: 811010-H

OTHER MATTERS
1.

2.

As stated in Note 3 to the financial statements, Fibon Berhad adopted Malaysian Financial Reporting
Standards on 1 June 2012 with a transition date of 1 June 2011. These standards were applied
retrospectively by director to the comparative information in these financial statements, including the
statement of financial position as at 31 May 2012 and 1 June 2011, and the statement of profit or loss
and other comprehensive income, statement of changes in equity and statement of cash flows for the
financial year ended 31 May 2012 and related disclosures. We were not engaged to report on the
restated comparative information and it is unaudited. Our responsibilities as part of our audit of the
financial statements of the Group and of the Company for the financial year ended 31 May 2013 have, in
these circumstances, included obtaining sufficient appropriate audit evidence that the opening balances
as at 1 June 2012 do not contain misstatements that materially affect the financial position as of 31 May
2013 and financial performance and cash flows for the financial year then ended.
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
Firm No: AF 1018
Chartered Accountants

Wong Tak Mun


Approval No: 1793/09/14 (J)
Chartered Accountant

6 SEPTEMBER 2013
Melaka

38

ANNUAL REPORT 2013

Statements of Financial Position


at 31 May 2013
The Group
Note

31.5.2013

31.5.2012

RM000

RM000

5,541
1,144

The Company
1.6.2011

31.5.2013

31.5.2012

1.6.2011

RM000

RM000

RM000

RM000

5,352
1,244

4,966
1,182

4,100
*
-

4,100
*
-

3,701
*
-

5,994

5,898

6,685

6,596

6,148

10,094

9,998

3,701

1,460
5,527

1,275
4,675

1,862
4,774

136

121

180

14

238
14,979
5,074

63
13,503
4,467

297
10,964
2,857

12
1,743
222

628
1,094
176

5,953
2,243
53

27,414

24,104

20,934

1,978

1,903

8,263

34,099

30,700

27,082

12,072

, 11,901

11,964

ASSETS
NON-CURRENT ASSETS
Investment in subsidiaries
Property, plant and equipment
Intangible assets
Amount owing by related
companies

CURRENT ASSETS
Inventories
Trade receivables
Other receivables, deposits and
prepayments
Amount owing by related
companies
Tax recoverable
Deposits with licensed banks
Cash and bank balances

TOTAL ASSETS

5
6
7
11

8
9
10
11
12

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


39

ADVANCE COMPOSITES

Statements of Financial Position


at 31 May 2013 contd
The Group
Note

The Company

31.5.2013

31.5.2012

1.6.2011

31.5.2013

31.5.2012

1.6.2011

RM000

RM000

RM000

RM000

RM000

RM000

EQUITY AND LIABILITIES


EQUITY
Share capital

13

9,800

9,800

9,800

9,800

9,800

9,800

Share premium

14

707

707

707

707

707

707

Other reserve

15

(2,629)

(2,602)

(2,586)

Retained profits

16

24,524

20,746

17,345

1,523

1,349

1,364

32,402

28,651

25,266

12,030

11,856

11,871

17

713

806

668

18

554

551

618

SHAREHOLDERS' EQUITY
NON-CURRENT LIABILITY
Deferred tax liabilities

CURRENT LIABILITIES
Trade payables
Other payables and accruals
Provision for taxation

TOTAL LIABILITIES
TOTAL EQUITY AND
LIABILITIES

19

423

622

459

42

38

91

70

71

984

1,243

1,148

42

45

93

1,697

2,049

1,816

42

45

93

34,099

30,700

27,082

12,072

11,901

11,964

* - Less than RM1,000.

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


40

ANNUAL REPORT 2013

Statements of Comprehensive Income


for the financial year ended 31 May 2013

Note
REVENUE

20

The Group
2013
2012
RM000
RM000
16,674

16,901

COST OF SALES

(6,744)

(7,861)

GROSS PROFIT

9,930

OTHER INCOME

SELLING AND DISTRIBUTION


EXPENSES

The Company
2013
2012
RM000
RM000
1,953

1,599

9,040

1,953

1,599

756

1,142

60

63

10,686

10,182

2,013

1,662

(184)

(553)

ADMINISTRATIVE EXPENSES

(3,836)

(3,403)

PROFIT BEFORE TAX

21

6,666

6,226

INCOME TAX EXPENSE

24

(1,761)

(1,727)

4,905

4,499

PROFIT AFTER TAX


OTHER COMPREHENSIVE
EXPENSES
- Foreign currency translation

(27)

(16)

(635)
1,378
(77)

(513)
1,149
(66)

1,301

1,083

TOTAL COMPREHENSIVE INCOME


FOR THE FINANCIAL YEAR

4,878

4,483

1,301

1,083

PROFIT AFTER TAXATION


ATTRIBUTABLE TO:Owners of the Company

4,905

4,499

1,301

1,083

TOTAL COMPREHENSIVE INCOME


ATTRIBUTABLE TO:Owners of the Company

4,878

4,483

1,301

1,083

5.01
N/A

4.59
N/A

EARNINGS PER SHARE


- basic (sen)
- diluted (sen)

25
25

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


41

ADVANCE COMPOSITES

Statements of Changes in Equity


for the financial year ended 31 May 2013
The Group

Note

Attributable To Equity Holders Of The Company


Non-Distributable
Distributable
Foreign
Currency
Share
Share Translation Merger
Retained
Capital Premium Reserve
Deficit
Profits
RM000 RM000
RM000
RM000
RM000

Total
RM000

At 1.6.2011
As previously stated
Effect of adopting MFRS 1

34

As restated
Total comprehensive income for
the financial year
Dividends paid

26

Balance at 31.5.2012/1.6.2012
Total comprehensive income for
the financial year
Dividends paid

26

Balance at 31.5.2013

9,800

707

14

9,800

707

14

9,800

707

(2)

(27)

9,800

707

(16)
-

(29)

(2,600)

16,775

24,696

570

570

17,345

25,266

4,499

4,483

(1,098)

(1,098)

20,746

28,651

4,905

4,878

(1,127)

(1,127)

24,524

32,402

(2,600)

(2,600)

(2,600)

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


42

ANNUAL REPORT 2013

Statements of Changes in Equity


for the financial year ended 31 May 2013 contd

The Company

Note
Balance as at 1.6.2011
Total comprehensive income for
the financial year
Dividends paid

26

Balance at 31.5.2012/1.6.2012
Total comprehensive income for
the financial year
Dividends paid

26

Balance at 31.5.2013

Share
Capital
RM000

NonDistributable
Share
Premium
RM000

Distributable
Retained
Profits
RM000

Total
RM000

9,800

707

1,364

11,871

1,083

1,083

(1,098)

(1,098)

9,800

707

1,349

11,856

1,301

1,301

(1,127)

(1,127)

9,800

707

1,523

12,030

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


43

ADVANCE COMPOSITES

Statements of Cash Flows


for the financial year ended 31 May 2013

Note
CASH FLOWS FROM OPERATING
ACTIVITIES
Profit before tax

6,666

Adjustments for:Amortisation of development expenditure


Depreciation of property, plant and equipment
Property, plant and equipment written off
Gain on disposal of plant and equipment
Interest income
Unrealised loss on foreign exchange

CASH FROM OPERATIONS


Tax paid
NET CASH FROM OPERATING ACTIVITIES

BALANCE CARRIED FORWARD

295
32
(8)
(407)
168

6,790

(Increase)/Decrease in inventories
(Increase)/Decrease in trade and other
receivables
(Decrease)/Increase in trade and other
payables

NET CASH (FOR)/FROM INVESTING


ACTIVITIES

6,226

82
381
2
(7)
(482)
148

Operating profit before working capital


changes

CASH FLOWS (FOR)/FROM INVESTING


ACTIVITIES
Increase in development expenditure
Investment in subsidiary
Interest received
Proceeds from disposal of plant and
equipment
Purchase of property, plant and equipment
Repayment from subsidiaries

The Group
2013
2012
RM000
RM000

The Company
2013
2012
RM000
RM000

1,378

1,149

*
(60)
20

*
(54)
13

6,306

1,338

1,108

(198)

562

(958)

(43)

(180)

75

(53)

5,454

6,900

1,347

(2,090)

(1,354)

3,364

5,546

(96)

(62)
407
32

60
-

(549)
-

(741)
-

511

(364)

571

(66)
3,298

5,182

(60)

1,251

(18)
482
19

1,063

1,822

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


44

1,003

(6,275)
54
5,290

(931)
72

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd

Note
BALANCE BROUGHT FORWARD

The Group
2013
2012
RM000
RM000

The Company
2013
2012
RM000
RM000

3,298

5,182

1,822

CASH FLOWS FOR FINANCING


ACTIVITY
Dividends paid

(1,127)

(1,098)

(1,127)

(1,098)

NET CASH FOR FINANCING


ACTIVITY

(1,127)

(1,098)

(1,127)

(1,098)

EFFECT OF EXCHANGE RATE


CHANGES ON CASH AND CASH
EQUIVALENTS

(88)

65

72

NET INCREASE/(DECREASE) IN
CASH AND CASH EQUIVALENTS

2,083

4,149

695

CASH AND CASH EQUIVALENTS AT


BEGINNING OF THE FINANCIAL
YEAR

17,970

13,821

1,270

2,296

20,053

17,970

1,965

1,270

CASH AND CASH EQUIVALENTS AT


END OF THE FINANCIAL YEAR

27

* - Less than RM1,000.

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


45

(1,026)

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013
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 06 September 2013.

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 Company 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) and the requirements of the
Companies Act 1965 in Malaysia.

[The rest of this page intentionally left blank]

46

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
3.

BASIS OF PREPARATION (Contd)


3.1

These are the Companys first set of financial statements prepared in accordance with MFRSs,
which are also in line with International Financial Reporting Standards as issued by the International
Accounting Standards Board.
In the previous financial year, the financial statements of the Company were prepared in
accordance with Financial Reporting Standards (FRSs). The financial impacts on the transition
from FRSs to MFRSs are disclosed in Noted 34 to the financial statements.

3.2

The Company 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 year:MFRSs and IC Interpretations (including the Consequential Amendments)

Effective Date

MFRS 9 Financial Instruments

1 January 2015

MFRS 11 Joint Arrangements

1 January 2013

MFRS 12 Disclosure of Interests in Other Entities

1 January 2013

MFRS 13 Fair Value Measurement

1 January 2013

MFRS 119 Employee Benefits

1 January 2013

MFRS 127 Separate Financial Statements

1 January 2013

MFRS 128 Investments in Associates and Joint Ventures

1 January 2013

Amendments to MFRS 7 : Disclosures Offsetting Financial Assets and Financial


Liabilities

1 January 2013

Amendments to MFRS 9 and MFRS 7 : Mandatory Effective Date of MFRS 9 and


Transition Disclosures

1 January 2015

Amendments to MFRS 10, MFRS 11 and MFRS 12: Transition Guidance

1 January 2013

Amendments to MFRS 10, MFRS 12 and MFRS 127: Investment Entities

1 January 2014

Amendments to MFRS 101 Presentation of Items of Other Comprehensive Income

1 July 2012

Amendments to MFRS 132: Offsetting Financial Assets and Financial Liabilities

1 January 2014

IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine

1 January 2013

Annual Improvements to MFRSs 2009 2011 Cycle

1 January 2013

47

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
3.

BASIS OF PREPARATION (Contd)


3.2

(Contd)
The above accounting standards and interpretations (including the consequential amendments) are
not relevant to the Companys operations except as following:MFRS 9 & Amendments to MFRS 9 : Mandatory Effective Date of MFRS 9 and Transition
Disclosures
MFRS 9 replaces the parts of MFRS 139 that relate to the classification and measurement of
financial instruments. MFRS 9 divides all financial assets into 2 categories those measure at
amortised cost and those measured at fair value, based on the entitys business model for
managing its financial assets and the contractual cash flow characteristics of the instruments, For
financial liabilities, the standard retains most of the MFRS 139 requirements, An entity choosing to
measure a financial liability at fair value will present the portion of the change in its fair value due to
changes in the entitys own credit risk in other comprehensive income rather than within profit or
loss. There will be no financial impact on the financial statements of the Company upon its initial
application but may impact its future disclosures.
MFRS 13
MFRS 13 defines fair value, provides guidance on how to determine fair value and require
disclosures about fair value measurements. The scope of MFRS 13 is board; it applies to both
financial instruments items and non-financial instrument items for which other MFRSs require of
permit fair value measurements and disclosures about fair value measurements, except in specified
circumstances. In general, the disclosure requirements in MFRS 13 are more extensive than those
in the current standards and therefore there will be no financial impact on the financial statements
of the Company upon its initial application but may impact its future disclosures.
Amendments to MFRS 7 : Disclosures Offsetting Financial Assets and Financial Liabilities
The Amendments to MFRS 7 (Disclosures Offsetting Financial Assets and Financial Liabilities)
require disclosure that will enable users of an entitys financial statements to evaluate the effect or
potential effect of netting arrangements, including rights of set-off associated with the entitys
recognised financial assets and recognised financial liabilities, on the entitys financial position.
There will be no financial impact on the financial statements of the Company upon its initial
application but may its future disclosures.

Amendments to MFRS 101 : Presentation of items of Other Comprehensive Income


The amendments to MFRS 101 retain the option to present profit or loss and other comprehensive
income in either a single statement or in two separate but consecutive statements. In addition,
items presented in other comprehensive income section are to be group based on whether they are
potentially re-classifiable to profit or loss subsequently i.e. those that might be reclassified and
those that will not be reclassified. Income tax on items of other comprehensive income is requires to
be allocated on the same basis. There will be no financial impact on the financial statements of the
Company upon its initial application other than the presentation format of the statements of profit or
loss and other comprehensive income.

48

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
3.

BASIS OF PREPARATION (Contd)


3.2

(Contd)
Amendments to MFRS 132 : Offsetting Financial Assets and Financial Liabilities
The amendments to MFRS 132 provide the application guidance for criteria to offset financial
assets and financial liabilities. Accordingly, there will be no financial impact on the financial
statements of the Company upon its initial application but may impact its future disclosures.
Annual Improvements to MFRSs 2009-2011 cycle
The Annual Improvements to MFRSs 2009 2011 Cycle contain amendments to MFRS 1, MFRS
101, MFRS 116, MFRS 132 and MFRS 134. These amendments are expected to have no material
impact on the financial statements of the Company upon their initial application .

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 Groups 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.

49

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
4.

SIGNIFICANT ACCOUNTING POLICIES (Contd)


(a)

Critical Accounting Estimates and Judgements (Contd)


(iii) Impairment of Non-financial Assets
When the recoverable amount of an asset is determined based on the estimate of the value-inuse of the cash-generating unit to which the asset is allocated, the management is required to
make an estimate of the expected future cash flows from the cash-generating unit and also to
apply a suitable discount rate in order to determine the present value of those cash flows.
(iv) Amortisation of Development Costs
Changes in the expected level of usage and technological development could impact the
economic useful lives. Therefore, future amortisation charges could be revised.
(v) Write-down of Inventories
Reviews are made periodically by management on damaged, obsolete and slow-moving
inventories. These reviews require judgement and estimates. Possible changes in these
estimates could result in revisions to the valuation of inventories.
(vi) Impairment of Trade and Other Receivables
An impairment loss is recognised when there is objective evidence that a financial asset is
impaired. Management specifically reviews its loan and receivables financial assets and
analyses historical bad debts, customer concentrations, customer creditworthiness, current
economic trends and changes in the customer payment terms when making a judgement to
evaluate the adequacy of the allowance for impairment losses. When 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 31 May 2013.
A subsidiary is defined as a company in which the parent company has the power, directly or
indirectly, to exercise control over its financial and operating policies so as to obtain benefits from
its activities.
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 and unrealised gains on transactions are eliminated on
consolidation; unrealised losses are also eliminated on consolidation unless cost cannot be
recovered. Where necessary, adjustments are made to the financial statements of the subsidiaries
to ensure consistency of accounting policies with those of the Group.

50

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
4.

SIGNIFICANT ACCOUNTING POLICIES (Contd)


(b)

Basis of Consolidation (Contd)


(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. Transactions with noncontrolling interests are accounted for as transactions with owners and are recognised directly in
equity. Profit or loss and each component of other comprehensive income are attributed to the
owners of the parent 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) Acquisitions of Non-controlling Interests
All changes in the parents 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 attributed to owners of the parent.

51

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
4.

SIGNIFICANT ACCOUNTING POLICIES (Contd)


(b) Basis of Consolidation (Contd)
(iv) Loss of Control
Upon loss of control of a subsidiary, the profit or loss on disposal 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 (i.e. reclassified to profit or loss or transferred directly to
retained profits) in the same manner as would be required if the relevant assets or
liabilities were disposed off. The fair value of any investments retained in the former
subsidiary at the date when control is lost is regarded as the fair value on initial recognition
for subsequent accounting under MFRS 139 or, when applicable, the cost on initial
recognition of an investment in an associate or a jointly controlled entity.
(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
Companys 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.

52

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
4.

SIGNIFICANT ACCOUNTING POLICIES (Contd)


(iii)

Foreign Operations (Contd)


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 plus, in the case of a financial
instrument not at fair value through profit or loss, transaction costs that are directly attributable to
the acquisition or issue of the financial instrument.
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 Groups right to receive
payment is established.
As at the end of the reporting period, there were no financial assets classified under this
category.

53

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
4.

SIGNIFICANT ACCOUNTING POLICIES (Contd)


(d)

Financial Instruments (Contd)


(i) Financial Assets (Contd)
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 revenue recognised on an
effective yield basis.
As at the end of the reporting period, there were no financial assets classified under this
category.
Loans and Receivables Financial Assets
Trade receivables and other receivables that have fixed or determinable payments that are
not quoted in an active market are classified as loans and receivables financial assets.
Loans and receivables financial assets are measured at amortised cost using the effective
interest method, less any impairment loss. Interest income is recognised by applying the
effective interest rate, except for short-term receivables when the recognition of interest
would be immaterial.
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.
Dividends on available-for-sale equity instruments are recognised in profit or loss when the
Groups 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.
As at the end of the reporting period, there were no financial assets classified under this
category.

54

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
4.

SIGNIFICANT ACCOUNTING POLICIES (Contd)


(d)

Financial Instruments (Contd)

(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.
(iii) Equity Instruments
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
new 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.
(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.
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 calculated under 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
Plant and machinery
Motor vehicles
Office equipment, furniture and fittings

3%
10- 20%
10%
10%

55

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
4.

SIGNIFICANT ACCOUNTING POLICIES (Contd)


(f) Property, Plant and Equipment (contd)
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.
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 long-term 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 ability to use or sell the developed asset;
(v) the availability of adequate technical, financial and other resources to complete the asset
under development; and
(vi) its intention to complete the intangible asset and use or sell.
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.

56

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
4.

SIGNIFICANT ACCOUNTING POLICIES (Contd)


(g)

Intangible Assets (Contd)


(i)

Research and Development Expenditure (Contd)


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 Association of Short
Circuit Testing Authority (ASCTA) certifications for capabilities to design, construct and
develop low-voltage switchboards to meet international standards. As the ASCTA certifications
do not have any expiry date, the Group does not amortise these costs. Instead, impairment is
tested annually or more frequently if events or changes in circumstances indicate that the
industrial operating right might be impaired.
(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
assets carrying amount and the present value of estimated future cash flows, discounted at the
financial assets 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 investment
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.

57

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
4.

SIGNIFICANT ACCOUNTING POLICIES (Contd)


(h)

Impairment
(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.
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.

(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.
Where necessary, write down or write off is made for all damaged, obsolete and slow-moving items.

(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
year 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.

58

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
4.

SIGNIFICANT ACCOUNTING POLICIES (Contd)


(j)

Income Taxes (Contd)


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.

(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.

(l)

Employee Benefits
(i)

Short-term Benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are
recognised in profit or loss and included in the development costs, where appropriate, in the
period 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 the profit or loss and
included in the development costs, where appropriate, 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.

59

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd

4.

SIGNIFICANT ACCOUNTING POLICIES (Contd)


(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 persons family is related to a reporting entity if
that person:(i)

has control or joint over the reporting entity;

(ii) has significant influence over the reporting entity; or


(iii) is a member of the key management personnel of the reporting entity or of a parent of the
reporting entity.
(b) An entity is related to a reporting entity if any of the following conditions applies:(i)

The entity and the reporting entity are members of the same group (which means that
each parent, subsidiary and fellow subsidiary is related to the others).

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint
venture of a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third party and the other entity is an associate of the third
party.
(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 joint controlled by a person identified in (a) above.
(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.

60

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
4.

SIGNIFICANT ACCOUNTING POLICIES (Contd)


(o)

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.

(p)

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 Groups other components. An operating segments 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.

61

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
5.

INVESTMENT IN SUBSIDIARIES
31.5.2013
RM000
Unquoted shares, at cost
- in Malaysia
- outside Malaysia

(a)

The Company
31.5.2012
RM000

1.6.2011
RM000

4,099
1

4,099
1

3,700
1

4,100

4,100

3,701

Subsidiaries
The details of the subsidiaries are as follows:Name of Companies

Country of
Incorporation

Effective Equity Interest


31.5.2013 31.5.2012 1.6.2011

Principal Activities

Direct subsidiaries:Hexa Analisa Sdn.


Bhd.

Malaysia

100%

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%

100%

Trading of electrical insulators


and other relevant industry
products

Fibon Australia Pty


Ltd *

Australia

100%

100%

100%

Manufacturing and sales of


electrical insulators and
trading of relevant industry
products

Fibon Electric (M)


Sdn. Bhd.

Malaysia

100%

100%

100%

Manufacturing, supplying and


selling of switchboard
equipment parts

* Audited by auditor other than Crowe Horwath.


# Based on unaudited figures.

62

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
6.

PROPERTY, PLANT AND EQUIPMENT

The Group

At
1.6.2012
RM000

Written
Additions Transfer Disposal
Off
RM000 RM000 RM000 RM000

Depreciation
Charge
RM000

Exchange
At
Difference 31.5.2013
RM000
RM000

Net Book Value


Freehold land
Building
Plant and machinery
Motor vehicles
Office equipment,
furniture and fittings
Plant and machinery
under construction

1,100
2,158
1,461
366

60
90
86

137
-

132

27

135

322

5,352

(137)

585

(1)
-

(47)
(259)
(55)

(2)
1

1,100
2,171
1,426
398

(2)

(20)

137

309

(1)

5,541

(11)
-

(12)

(2)

(381)

* Less than RM1,000

The Group

At
Revaluation
Written Depreciation Exchange
At
1.6.2011
Surplus Additions Transfer Disposal
Off
Charge
Difference 31.5.2012
RM000
RM000
RM000 RM000 RM000 RM000
RM000
RM000
RM000

Net Book Value


Freehold land
Building
Plant and machinery
Motor vehicles
Office equipment,
furniture and fittings
Plant and machinery
under construction

1,049
1,508
895
415

51
692
-

6
529
-

277
-

112

38

244

168

743

741

4,223

(24)
-

(277)
-

At
Cost
RM000

The Group

(32)
-

(24)

(32)

Accumulated
Depreciation
RM000

(48)
(182)
(48)
(17)

63

1,100
2,158
1,461
366

(1)

132

135

(295)

(4)

5,352

Net Book
Value
RM000

At 31.5.2013
Freehold land
Building
Plant and machinery
Motor vehicles
Office equipment, furniture and fittings
Plant and machinery under construction

(2)
(1)

1,100
2,266
2,152
579
209
309

(95)
(726)
(181)
(72)
-

1,100
2,171
1,426
398
137
309

6,615

(1,074)

5,541

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
6.

PROPERTY, PLANT AND EQUIPMENT (Contd)


At
Cost
RM000

The Group

Accumulated
Depreciation
RM000

Net Book
Value
RM000

At 31.5.2012
Freehold land
Building
Plant and machinery
Motor vehicles
Office equipment, furniture and fittings
Plant and machinery under construction

1,100
2,206
1,928
492
184
135

(48)
(467)
(126)
(52)
-

1,100
2,158
1,461
366
132
135

6,045

(693)

5,352

At
Cost
RM000

The Group

Accumulated
Depreciation
RM000

Net Book
Value
RM000

At 1.6.2011
Freehold land
Building
Plant and machinery
Motor vehicles
Office equipment, furniture and fittings
Plant and machinery under construction

1,100
2,200
1,280
493
147
244

(385)
(78)
(35)
-

1,100
2,200
895
415
112
244

5,464

(498)

4,966

31.5.2013
RM000

The Group
31.5.2012
RM000

Cost of property, plant and equipment purchased


Transferred from development expenditure

585
(36)

741
-

3,337
-

Cash disbursed for purchase of property, plant


and equipment

549

741

3,337

64

1.6.2011
RM000

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
7.

INTANGIBLE ASSETS
Intangible assets can be broken down into:31.5.2013
RM000

The Group
31.5.2012
RM000

1.6.2011
RM000

408
736

508
736

446
736

1,144

1,244

1,182

31.5.2013
RM000

The Group
31.5.2012
RM000

1.6.2011
RM000

Net book value at 1 June


Capitalised
Transferred to machinery
Amortisation charge for the year

508
18
(36)
(82)

446
62
-

372
83
(9)

Carrying value at 31 May

408

508

446

31.5.2013
RM000

The Group
31.5.2012
RM000

1.6.2011
RM000

490
(82)

508
-

455
(9)

408

508

446

31.5.2013
RM000

The Group
31.5.2012
RM000

1.6.2011
RM000

31

37

35

Development expenditure
Industrial operating rights

(i)

Development Expenditure

At cost
Accumulated amortisation

The development expenditure included the following expenses:-

Staff costs

31.5.2013
RM000

The Group
31.5.2012
RM000

1.6.2011
RM000

(ii) Industrial Operating Rights


At cost

736

65

736

736

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
8.

INVENTORIES
The Group
31.5.2013
31.5.2012
RM000
RM000
At cost:Raw materials
Work-in-progress
Finished goods
Trading goods

1.6.2011
RM000

1,014
228
181
37

917
167
151
40

1,113
511
201
37

1,460

1,275

1,862

None of the inventories are carried at net realisable value.

9.

TRADE RECEIVABLES
The Groups normal trade credit terms range from 30 to 180 days (31.5.2012: 30 to 180 days; 1.6.2011 :
30 to 180 days). Other credit terms are assessed and approved on a case-by-case basis.

10.

OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS


31.5.2013
RM000
Other receivables
Deposits
Prepayments

The Group
31.5.2012
RM000

1.6.2011
RM000

31.5.2013
RM000

The Company
31.5.2012
1.6.2011
RM000
RM000

59
37
40

26
27
68

17
34
129

1
-

1
4

1
13

136

121

180

14

66

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
11.

AMOUNT OWING BY RELATED COMPANIES

Non-current:Quasi Loans
Subsidiaries

31.5.2013
RM000

The Company
31.5.2012
RM000

1.6.2011
RM000

5,994

5,898

628

5,918

Current:Non-trade related balances


Subsidiaries

Trade related balances


Subsidiary

35

628

5,953

5,994

6,526

5,953

(a) Quasi loans represent advances of which the settlement is neither planned nor likely to occur in the
foreseeable future. These amounts are, in substance, a part of the Companys net investment in the
subsidiaries. The quasi loans are stated at cost less accumulated impairment losses, if any.
(b) In the previous financial year, the amount owing by subsidiaries are unsecured, interest-free and
repayable on demand. The amount owing is to be settled in cash.

12.

DEPOSITS WITH LICENSED BANKS


The deposits with licensed banks of the Group and of the Company at the end of the reporting period bore
effective interest rates ranging from 0.10% to 6.00% (31.5.2012: 0.09% to 4.10%; 1.6.2011 : 2.50% to
3.20%) per annum. The deposits have maturity periods ranging from 7 to 365 days (31.5.2012: 30 to 365
days; 1.6.2011 : 6 to 30 days).

67

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
13.

SHARE CAPITAL

Par
Value
RM

31.5.2013
Number
Of
Share
Shares
Capital
'000
RM000

The Company
31.5.2012
Number
Par
Of
Share
Value Shares
Capital
RM
'000
RM000

1.6.2011
Number
Par
Of
Share
Value Shares
Capital
RM
'000
RM000

Ordinary Shares
Authorised
At 31 May

0.10

250,000

25,000

31.5.2013
Number
Par
Of
Share
Value Shares
Capital
RM
'000
RM000

0.10

250,000

25,000

The Company
31.5.2012
Number
Par
Of
Share
Value Shares
Capital
RM
'000
RM000

0.10

250,000

25,000

1.6.2011
Number
Share
Par
Of
Value Shares
Capital
RM
'000
RM000

Ordinary Shares
Issued and Fully Paid
-Up
At 31 May

14.

0.10

98,000

9,800

0.10

98,000

9,800

0.10

98,000

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.

15.

OTHER RESERVES
Foreign
Currency
Translation
Reserve
RM000

Merger
Deficit
RM000

Total
RM000

At 1.6.2011
Movement during the year

14
(16)

(2,600)
-

(2,586)
(16)

At 1.6.2012/31.5.2012
Movement during the year

(2)
(27)

(2,600)
-

(2,602)
(27)

At 31.5.2013

(29)

(2,600)

(2,629)

68

9,800

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
15.

OTHER RESERVES (Contd)


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 Groups presentation currency. It is also used to record the exchange differences arising from
monetary items which form part of the Groups 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.

16.

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.

17.

DEFERRED TAX LIABILITIES


31.5.2013
RM000

The Group
31.5.2012
RM000

1.6.2011
RM000

At 1 June
As previously stated
Revaluation of land and building
As restated
Recognised in profit or loss (Note 24)
Exchange difference

633
173
806
(93)
*

495
173
668
138
*

340
173
513
154
1

At 31 May

713

806

668

69

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
17.

DEFERRED TAX LIABILITIES (CONTD)


The deferred tax liabilities arise as a result of:31.5.2013
RM000

The Group
31.5.2012
RM000

1.6.2011
RM000

Deferred tax liabilities


An excess of carrying value over tax base
Development expenditure capitalised
Industrial operating rights capitalised
Revaluation of land and building
Others
Exchange difference

350
102
184
173
*

298
119
184
173
97
*

193
103
184
173
14
1

Gross deferred tax liabilities

809

871

668

Deferred tax assets


Unabsorbed tax losses
Unutilised capital allowances

63
33

49
16

Gross deferred tax assets

96

65

Net deferred tax liabilities

713

806

668

* - Less than RM1,000.


At the end of the reporting period, the Group has tax losses and capital allowances of approximately
RM252,000 and RM49,000 (31.5.2012: RM197,000 and RM6,000; 1.6.2011: RM230,000 and RM6,000)
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.

18.

TRADE PAYABLES
The normal trade credit terms granted to the Group ranging from 30 to 90 days (31.5.2012: 30 to 90 days;
1.6.2011: 30 to 90 days).

19.

OTHER PAYABLES AND ACCRUALS


31.5.2013
RM000
Other payables
Accrued expenses
Payroll liabilities

The Group
31.5.2012
RM000

1.6.2011
RM000

31.5.2013
RM000

The Company
31.5.2012
RM000

1.6.2011
RM000

122
109
192

340
92
190

105
120
234

42
-

24
14

17
74

423

622

459

42

38

91

70

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
20.

REVENUE
The Group
2013
2012
RM000
RM000
Dividend income
Management fee received
Sale of goods

21.

16,674

16,901

16,674

16,901

The Company
2013
2012
RM000
RM000
1,350
603
-

1,000
599
-

1,953

1,599

PROFIT BEFORE TAX


The Group
2013
2012
RM000
RM000

The Company
2013
2012
RM000
RM000

Profit before tax is arrived at after charging:Audit fee


Amortisation of development expenditure
Depreciation of property, plant and equipment
Directors fee
Directors non-fee emoluments
Loss on foreign exchange
Property, plant and equipment written off
Rental of premises
Research and development expenditure

64
82
381
246
861
359
2
68
591

55
295
246
594
174
32
72
576

(267)
(7)

(704)
(8)

(482)

(407)

18
*
246
8
71
-

18
*
246
6
14
-

and crediting:Gain on foreign exchange


Gain on disposal of plant and equipment
Interest income:- loans and receivables financial assets

(60)

* - Less than RM1,000.


Included in research and development expenditure are employee benefits which comprised:- Directors remuneration - EPF contribution of RM67,640 (2012 : RM61,180)
- Directors remuneration - emoluments of RM356,620 (2012 : RM322,620)
- Staff costs of RM164,844 (2012 : RM147,376)

71

(9)
(54)

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
22.

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
2013
2012
RM000
RM000
Non-executive directors:- Fees
- Other emoluments

Executive directors:- Fees


-Salaries, bonus and other
emoluments
- Employees provident fund

The Company
2013
2012
RM000
RM000

72
8

72
6

72
8

72
6

80

78

80

78

174

174

174

174

1,078
200

820
152

1,452

1,146

174

174

1,532

1,224

254

252

The breakdown of the categories charged out to:The Group


2013
2012
RM000
RM000
Profit or loss

23.

1,532

The Company
2013
2012
RM000
RM000

1,224

254

252

EMPLOYEE BENEFITS
The Group
2013
2012
RM000
RM000
Short-term employee benefits
Contribution to a defined contribution
plan

2,639

2,358

337

287

2,976

2,645

The Company
2013
2012
RM000
RM000

130

113

16

14

146

127

Included in employee benefits is key management personnel compensation as disclosed in Note 29 to the
financial statements.

72

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
24.

INCOME TAX EXPENSE


The Group
2013
2012
RM000
RM000
Current tax expense:- for the current financial year
- under/(over) provision in
previous financial years
- foreign tax

Deferred tax (Note 17):- Relating to origination or reversal of


temporary differences
- (Over)/Under provision in
previous financial years

Total tax expense1`

The Company
2013
2012
RM000
RM000

1,714

1,513

78

87

65
75
1,854

(43)
119
1,589

(1)
77

(21)
66

(56)

83

(37)

55

(93)

138

1,727

77

66

1,761

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
2013
2012
RM000
RM000
Profit before tax
Tax at the statutory tax rate of 25%
Tax effects of:Controlled transfer of assets
Non-deductible expenses
Non-taxable income
Deferred tax assets not recognised
during the financial year
(Over)/Under provision in previous
financial year:- income tax
- deferred taxation
Utilisation of incentive
Effect of different tax rates in foreign
jurisdiction
Tax expense for the financial year

The Company
2013
2012
RM000
RM000

6,666

6,226

1,378

1,149

1,666

1,557

345

287

71
(338)

50
(250)

(42)
72
-

131
(5)

25

59

65
(37)
-

(43)
55
(47)

(1)
-

(21)
-

12

20

1,761

1,727

77

66

73

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
25.

EARNINGS PER SHARE


The basic earnings per share (EPS) is arrived at by dividing the Groups profit attributable to the equity
holders of the Company of RM4,905,000 (2012: RM4,499,000) by the weighted average number of ordinary
shares in issue during the financial year of 98,000,000 (2012 : 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.

26.

DIVIDENDS
The Group/
The Company
2013
2012
RM000
RM000
Recognised during the financial year:- first and final single tier dividend of 1.15 sen per ordinary share in respect of
financial year ended 31 May 2012

1,127

- first and final single tier dividend of 1.12 sen per ordinary share in respect of
financial year ended 31 May 2011

1,098

1,127

1,098

At the forthcoming Annual General Meeting, a first and final single tier dividend of 1.25 sen per ordinary
share amounting to RM1,225,000 in respect of the financial year ended 31 May 2013 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 2014.

27.

CASH AND CASH EQUIVALENTS


For the purpose of the statements of cash flows, cash and cash equivalents comprise the followings:-

31.5.2013
RM000
Fixed deposits
with licensed banks
Cash and bank
balances

The Group
31.5.2012
RM000

1.6.2011
RM000

The Company
31.5.2013
31.5.2012
RM000
RM000

1.6.2011
RM000

14,979

13,503

10,964

1,743

1,094

2,243

5,074

4,467

2,857

222

176

53

20,053

17,970

13,821

1,965

1,270

2,296

74

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
28.

OPERATING SEGMENTS

(a)

The Group
2013
2012
RM000
RM000

By Geographical Segment:Sales revenue by geographical market:- Malaysia


- Singapore
- Australia
- Indonesia
- Europe
- Others

5,310
4,818
2,110
2,362
72
2,002

5,242
5,793
2,157
863
1,536
1,310

16,674

16,901

No other segmental information such as segment assets, liabilities and results are presented as the
Groups sales is predominantly generated from Malaysia operation.
(b)

Major Customers:Revenue from three (3) (2012 : two (2)) groups of customers amounted to RM4,945,903 (2012:
RM4,688,184) contributed to approximately 30% (2012 : 28%) of the Groups revenue.

29.

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
2013
2012
RM000
RM000
(i) Subsidiaries
Dividend received/ receivable from
a subsidiary
Management fee
received/ receivable from
subsidiaries

75

The Company
2013
2012
RM000
RM000

1,350

1,000

603

599

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
29.

SIGNIFICANT RELATED PARTY DISCLOSURES (Contd)


(b)

(Contd):The Group
2013
2012
RM000
RM000
(ii)

Persons connected to the directors


Personnel compensation

185

219

The Company
2013
2012
RM000
RM000
119

87

Information regarding outstanding balances arising from related party transactions as at 31 May
2013 is disclosed in Note 11 to the financial statements.
The Group
2013
2012
RM000
RM000
(iv) Key management personnel
compensation
Short-term employee benefits
Post employment benefits
- Defined contribution plan

30.

1,503

1,281

360

329

212

162

13

10

1,715

1,443

373

339

CAPITAL COMMITMENT

Purchase of plant and equipment:Approved but not contracted for


Approved and contracted for

31.

The Company
2013
2012
RM000
RM000

31.5.2013
RM000

The Group
31.5.2012
RM000

1.6.2011
RM000

131

42

31.5.2013
RM000

The Company
31.5.2012
RM000

1.6.2011
RM000

CONTINGENT LIABILITIES

Corporate guarantee given to licensed banks


for credit facilities granted to subsidiaries

76

5,300

5,300

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
32.

FINANCIAL INSTRUMENTS
The Groups 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 Groups overall financial risk management
policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects
on the Groups financial performance.
(a) Financial Risk Management Policies
The Groups 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 Groups exposure to foreign currency is as follows:-

The Group
31 May 2013
Financial assets
Trade receivables
Other receivables, deposits
and prepayments
Fixed deposits with licensed
banks
Cash and bank balances

Singapore Australian
Dollar
Dollar
RM000
RM000

2,054

424

647

41

3,166

1,423

1,977
759

309
1,043

382
-

86

2,668
3,311

3,477

3,164

1,999

383

127

9,150

(348)

(349)

(2)

(50)
(399)
8,751

Financial liabilities
Trade payables
Other payables and
accruals
Currency exposure

United
States Pound
Dollar Sterling Others
Total
RM000 RM000 RM000 RM000

(1)
-

(48)

(1)

(48)

(348)

(2)

3,116

1,651

381

127

3,476

77

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
32.

FINANCIAL INSTRUMENTS (Contd)


(a)

Financial Risk Management Policies (Contd)


(i)

Market Risk (Contd)


(i)

Foreign Currency Risk (Contd)

The Group
31 May 2012
Financial assets
Trade receivables
Other receivables,
deposits and
prepayments
Fixed deposits with
licensed banks
Cash and bank balances

Singapore
Dollar
RM000

The Group
31 May 2011
Financial assets
Trade receivables
Other receivables,
deposits and
prepayments
Cash and bank balances

United
States
Dollar
RM000

Pound
Sterling
RM000

Total
RM000

1,575

433

179

405

2,592

12

18

1,073
2,660

1,434
436
2,309

645
824

400
885
1,690

1,834
3,039
7,483

(209)

(209)

Financial liabilities
Trade payables
Other payables and
accruals
Currency exposure

Australian
Dollar
RM000

(41)

(154)

(195)

(41)

(363)

(404)

2,660

Singapore
Dollar
RM000

2,268

Australian
Dollar
RM000

461

1,690

7,079

United
States
Dollar
RM000

Other
RM000

Total
RM000

1,607

705

269

43

2,624

12
443

7
497

54
1,090

1
255

74
2,285

2,062

1,209

1,413

299

4,983

Financial liabilities
Trade payables

Currency exposure

2,062

1,209

78

(188)
1,225

(2)
297

(190)
4,793

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
32.

FINANCIAL INSTRUMENTS (Contd)


(a)

Financial Risk Management Policies (Contd)


(i)

Market Risk (Contd)


(i)

Foreign Currency Risk (Contd)


The Companys exposure to foreign currency is as follows:Australian
Dollar
RM000

The Company
31 May 2013

Pound
Sterling
RM000

Total
RM000

Financial assets
Fixed deposit with licensed banks
Cash and banks balances

610
161

610
161

Currency exposure

771

771

Australian
Dollar
RM000

The Company
31 May 2012

Pound
Sterling
RM000

Total
RM000

Financial assets
Amount owing by related companies
Fixed deposits with licensed banks
Cash and bank balances

628
61
37

847
-

1,475
61
37

Currency exposure

726

847

1,573

Australian
Dollar
RM000

The Company
1 June 2011

Pound
Sterling
RM000

Total
RM000

Financial assets
Amount owing by related companies

691

175

866

Currency exposure

691

175

866

79

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd

32.

FINANCIAL INSTRUMENTS (Contd)


(a)

Financial Risk Management Policies (Contd)


(i)

Market Risk (Contd)


(i)

Foreign Currency Risk (Contd)


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
2013
2012
Increase/
Increase/
(Decrease)
(Decrease)
RM000
RM000

The Company
2013
2012
Increase/
Increase/
(Decrease)
(Decrease)
RM000
RM000

Effects on profit after taxation


Australian Dollar:- strengthened by 4% (2012: 4%)
- weakened by 4% (2012: 4%)

87
(87)

74
(74)

Singapore Dollar:- strengthened by 1% (2012: 1%)


- weakened by 1% (2012: 1%)

20
(20)

22
(22)

United States Dollar:


- strengthened by 3% (2012: 6%)
- weakened by 3% (2012: 6%)

34
(34)

20
(20)

Pound Sterling:
- strengthened by 4% (2012: 1%)
- weakened by 4% (2012: 1%)

12
(12)

15
(15)

7
(7)

80

21
(21)

24
(24)

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd

32.

FINANCIAL INSTRUMENTS (Contd)


(a)

Financial Risk Management Policies (Contd)


(i)

Market Risk (Contd)


(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 Groups exposure to
interest rate risk arises mainly from interest-bearing financial assets. The Groups policy is
to obtain the most favourable interest rates available. Any surplus funds of the Group will
be placed with licensed financial institutions to generate interest income.
Interest rate risk sensitivity analysis
The following table details the sensitivity analysis to a reasonably possible change in the
interest rates as at the end of the reporting period, with all other variables held constant:The Group
2013
2012
Increase/
Increase/
(Decrease)
(Decrease)
RM000
RM000

The Company
2013
2012
Increase/
Increase/
(Decrease)
(Decrease)
RM000
RM000

Effects on profit after taxation


Increase of 100 basis points (bp)
(2012:100)
Decrease of 100 bp (2012: 100)

10

32

(10)

(32)

(2)

(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 Groups 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.

81

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
32.

FINANCIAL INSTRUMENTS (Contd)


(a)

Financial Risk Management Policies (Contd)


(ii) Credit Risk (Contd)
Credit risk concentration profile
The Groups major concentration of credit risk relates to the amounts owing by five (5)
(31.5.2012 : five (5); 1.6.2011: two (2)) groups of customer which constituted approximately
57% (31.5.2012: 53%; 1.6.2011 : 53%) 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:-

31.5.2013
RM000
Asia
Australia and Oceania
Others

The Group
31.5.2012
RM000

1.6.2011
RM000

5,066
424
37

3,797
433
445

4,021
740
13

5,527

4,675

4,774

Ageing analysis
The ageing analysis of the Groups trade receivables as at 31 May 2013 is as follows:-

31.5.2013
RM000

The Group

Carrying Value
31.5.2012
RM000

1.6.2011
RM000

Not past due

2,370

4,603

4,774

Past due:- less than 3 months


- 3 to 6 months

1,538
1,619

72

5,527

4,675

4,774

less than RM1,000.

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.

82

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
32.

FINANCIAL INSTRUMENTS (Contd)


(a)

Financial Risk Management Policies (Contd)


(ii) Credit Risk (Contd)
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):-

Carrying
Amount
RM000

The Group

Contractual
Undiscounted
Cash Flows
RM000

Within
1 Year
RM000

31 May 2013
Trade payables
Other payables and accruals

554
423

554
423

554
423

977

977

977

Carrying
Amount
RM000

The Group

Contractual
Undiscounted
Cash Flows
RM000

Within
1 Year
RM000

31 May 2012
Trade payables
Other payables and accruals

83

551
622

551
622

551
622

1,173

1,173

1,173

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
32.

FINANCIAL INSTRUMENTS (Contd)


(a)

Financial Risk Management Policies (Contd)


(iii) Liquidity Risk (Contd)

Carrying
Amount
RM000

The Group

Contractual
Undiscounted
Cash Flows
RM000

Within
1 Year
RM000

1 June 2011
Trade payables
Other payables and accruals

618
459

618
459

618
459

1,077

1,077

1,077

Contractual
Undiscounted
Cash Flows
RM000

Within
1 Year
RM000

Carrying
Amount
RM000

The Company
31 May 2013
Other payables and accruals

42

Carrying
Amount
RM000

The Company

42
Contractual
Undiscounted
Cash Flows
RM000

42

Within
1 Year
RM000

31 May 2012
Other payables and accruals

38

Carrying
Amount
RM000

The Company

38
Contractual
Undiscounted
Cash Flows
RM000

38

Within
1 Year
RM000

1 June 2011
Other payables and accruals

91

84

91

91

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
32.

FINANCIAL INSTRUMENTS (Contd)


(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.

(c)

Classification Of Financial Instruments

31.5.2013
RM000

The Group
31.5.2012
RM000

1.6.2011
RM000

5,527
96
14,979
5,074

4,675
53
13,503
4,467

4,774
51
10,964
2,857

25,676

22,698

18,646

554
423

551
622

618
459

977

1,173

1,077

Financial Assets
Loans and receivables financial assets
Trade receivables
Other receivables and deposits
Deposits with licensed banks
Cash and bank balances

Financial Liabilities
Other financial liabilities
Trade payables
Other payables and accruals

85

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
32.

FINANCIAL INSTRUMENTS (Contd)


(c)

Classification Of Financial Instruments (Contd)

31.5.2013
RM000

The Company
31.5.2012
RM000

1.6.2011
RM000

Financial Assets
Loans and receivables financial assets
Other receivables and deposits
Amount owing by related companies
Deposits with licensed banks
Cash and bank balances

1
1,743
222

1
628
1,094
176

1
5,953
2,243
53

1,966

1,899

8,250

42

38

91

42

38

91

Financial Liabilities
Other financial liabilities
Other payables and accruals

(d)

Fair Values Of Financial Instruments


The carrying amounts of the financial assets and financial liabilities reported in the financial
statements approximated their fair values.
The following summarises the methods used to determine the fair values of the financial
instruments:(i)

(e)

The financial assets and financial liabilities maturing within the next 12 months approximated
their fair values due to the relatively short-term maturity of the financial instruments.

Fair Value Hierarchy


As at 31 May 2013, there were no financial instruments carried at fair value in the statements of
financial position.

86

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
33.

SIGNIFICANT EVENT OCCURRING AFTER THE REPORTING PERIOD


The Company had on 9 July 2013 entered into a Sale and Purchase Agreement with the shareholders of
OPES Management Sdn Bhd (OPES) for the acquisition of one hundred percent (100%) equity interest
in OPES comprising 10,000 ordinary shares of RM1.00 each for a total cash consideration of RM40,000.
The principal activities of OPES are to carry on business of factoring, leasing, investment, development
finance, building credit or financiers.
OPES subsequently changed its name to Fibon Capital Sdn Bhd.

34.

TRANSITION TO THE MFRS FRAMEWORK


As stated in Note 3.1 to the financial statements, these are the first financial statements of the Group and
the Company prepared in accordance with MFRSs. The accounting policies in Note 3.2 to the financial
statements have been applied to all financial information covered under this set of financial statements.
In preparing the opening MFRS statements of financial position at 1 June 2011 (date of transition), the
Group has adjusted amounts reported previously in financial statements prepared in accordance with
FRSs. The financial impacts on the transition are as below:RECONCILIATION OF CONSOLIDATED FINANCIAL POSITION

Note

< ------------ 1.6.2011 ------------ >


Transition
FRSs
Effects
MFRSs
RM000
RM000
RM000

< ------------ 31.5.2012 ------------ >


Transition
FRSs
Effects
MFRSs
RM000
RM000
RM000

ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets

4,223
1,182

743
-

4,966
1,182

4,609
1,244

743
-

5,352
1,244

5,405

743

6,148

5,853

743

6,596

1,862
4,774

1,862
4,774

1,275
4,675

1,275
4,675

180
297
10,964
2,857

180
297
10,964
2,857

121
63
13,503
4,467

121
63
13,503
4,467

20,934

20,934

24,104

24,104

26,339

743

27,082

29,957

743

30,700

CURRENT ASSETS
Inventories
Trade receivable
Other receivables, deposit
and prepayments
Tax recoverable
Deposits with licensed bank
Cash and bank balances

TOTAL ASSETS

87

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
34.

TRANSITION TO THE MFRS FRAMEWORK (CONTD)


RECONCILIATION OF CONSOLIDATED FINANCIAL POSITION (CONTD)

Note

< ------------ 1.6.2011 ------------ >


Transition
FRSs
Effects
MFRSs
RM000
RM000
RM000

< ------------ 31.5.2012 ------------ >


Transition
FRSs
Effects
MFRSs
RM000
RM000
RM000

EQUITY AND LIABILITIES


EQUITY
Share capital
Share premium
Other reserves
Retained profits

9,800
707
(2,586)
16,775

570

9,800
707
(2,586)
17,345

9,800
707
(2,602)
20,176

570

9,800
707
(2,602)
20,746

SHAREHOLDERS EQUITY

24,696

570

25,266

28,081

570

28,651

495

173

668

633

173

806

618
459
71

618
459
71

551
622
70

551
622
70

1,148

1,148

1,243

1,243

TOTAL LIABILITIES

1,643

173

1,816

1,876

173

2,049

TOTAL EQUITY AND


LIABILITEIS

26,339

743

27,082

29,957

743

30,700

NON-CURRENT LIABILITY
Deferred tax liabilities

CURRENT LIABILITIES
Tax payables
Other payables and accruals
Provision for taxation

88

ANNUAL REPORT 2013

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
34.

TRANSITION TO THE MFRS FRAMEWORK (CONTD)


RECONCILIATION OF CONSOLIDATED
PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
There are no material differences between the consolidated statements of profit or loss and other
comprehensive income presented under FRSs and MFRSs.
RECONCILIATION OF CONSOLIDATED CASH FLOWS
There are no material differences between the consolidated statements of cash flows presented under
FRSs and MFRSs.
NOTES TO RECONCILIATIONS
(a) Property, plant and Equipment Deemed Cost Exemption
Under FRSs, the Group measured its land and building at cost. Upon transition to MFRSs, the Group
elected to measure these assets at fair value at the date of transition to MFRSs and use that fair
value as deemed cost under MFRSs.
The financial impacts arising from the change are summarised as follows:(i)

An increase in land and building at 1 June 2011 and 31 May 2012 of RM743,095;

(ii)

An increase in deferred tax liabilities at 1 June 2011 and 31 May 2012 of RM173,073 that
related to the fair value adjustment above; and

(iii)

The resulting adjustments on items (i) and (ii) above were adjusted against retained profits at 1
June 2011 and 31 May 2012.

The aggregate fair value of the land and building at 1 June 2011 was determined to be RM3,300,000
compared to the then carrying amount of RM2,556,905 under FRSs.
(b) Reserves
There were no adjustments to the reserves other than the following:-

Note

The Group
1.6.2011
31.5.2012
RM000
RM000

Revaluation surplus
Land and building

Total adjustment to retained profits

89

570

570

570

570

ADVANCE COMPOSITES

Notes to the Financial Statements


for the financial year ended 31 May 2013 contd
35.

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:-

31.5.2013
RM000

The Group
31.5.2012
RM000

1.6.2011
RM000

Total retained profits:- realised


- unrealised

25,385
(861)

21,720
(974)

17,771
(426)

At 31 May

24,524

20,746

17,435

31.5.2013
RM000

The Company
31.5.2012
RM000

1.6.2011
RM000

Total retained profits:- realised


- unrealised

1,543
(20)

1,362
(13)

1,333
31

At 31 May

1,523

1,349

1,364

[The rest of this page intentionally left blank]

90

ANNUAL REPORT 2013

Analysis of Shareholdings
as at 17 September 2013
Issued and Paid-Up Share Capital
Class of Shares
Voting Rights

: RM9,800,000
: Ordinary Shares of RM0.10 each
: One vote per share

DISTRIBUTION OF SHAREHOLDINGS
No. of
Size of Shareholdings

% of

Shareholders / Shareholders /
Depositors

Less than 100

Depositors

No. of Shares

% of Issued

held

Capital

57

4.16

1,406

0.00

100 to 1,000

967

70.58

326,476

0.33

1,001 to 10,000

161

11.75

827,733

0.85

10,001 to 100,000

152

11.09

5,057,895

5.16

29

2.12

38,571,052

39.36

0.30

53,215,438

54.30

1,370

100.00

98,000,000

100.00

100,001 to less than 5% of


issued shares
5% and above of issued shares
Total

DIRECTORS SHAREHOLDINGS
Direct

Indirect

No. of

% of Issued

No. of Shares

% of Issued

Shares Held

Capital

Held

Capital

1,470,000

1.50

*16,398,788

16.65

Pang Chee Khiong

21,560,552

22.00

Pang Fok Seng

16,398,788

16.74

*1,470,000

1.50

Pang Nyuk Yin

2,940,000

3.00

322

Name
Lim Wai Kiew

Chong Peng Khang


# less than 1%
* Indirect interest held through spouse

91

ADVANCE COMPOSITES

Analysis of Shareholdings
as at 17 September 2013 contd
THIRTY LARGEST SHAREHOLDERS
Name

No. of
Shares Held

Direct
% of Issued
Capital

1. Pang Chee Khiong

21,560,552

22.00

2. CIMSEC Nominees (Tempatan) Sdn. Bhd. CIMB For Pang Fok


Seng (PB)
3. Malaysia Venture Capital Management Berhad

16,312,618

16.65

8,366,949

8.54

4. Expedient Equity Ventures Sdn. Bhd.

6,975,319

7.12

5. Kenanga Nominees (Tempatan) Sdn. Bhd. Pledged Securities


Account For Koh Kin Lip
6. Kumpulan Modal Perdana Sdn. Bhd.

4,888,800

4.99

4,874,004

4.97

7. Kenanga Nominees (Tempatan) Sdn. Bhd. Pledged Securities


Account For Koh Siew Kong
8. Kenanga Nominees (Tempatan) Sdn. Bhd. Pledged Securities
Account For Junior Koh Siew Hui
9. Pang Yoke Wah

4,700,500

4.80

4,413,800

4.50

3,128,122

3.19

10. Pang Nyuk Yin

2,940,000

3.00

11. Pang Yoke Lian

2,940,000

3.00

12. Maybank Nominees (Asing) Sdn. Bhd. DBS Bank For Taib-Jaic
Asian Balanced Private Equity Fund (290582)
13. CIMSEC Nominees (Asing) Sdn. Bhd. CIMB For Frigate Equities
Ltd. (PB)
14. Lim Wai Kiew

2,228,700

2.27

2,139,548

2.18

1,470,000

1.50

15. PFM Capital Holdings Sdn. Bhd.

778,349

0.79

16. Wong Siow May

561,628

0.57

17.Chai Min Foh

500,000

0.51

18. Lim Ah Pe

300,000

0.31

19. Malacca Equity Nominees (Tempatan) Sdn. Bhd. Pledged


Securities Account for Quek Soon Tiang
20. Tiu Ka Han

270,200

0.28

263,000

0.27

21. UOB Kay Hian Nominees (Tempatan) Sdn. Bhd. Exempt An For
UOB Kay Hian Pte Ltd (A/C Clients)
22. Wong Seau Han @ Stella Wan Seau Han

258,200

0.26

220,100

0.22

23. Yap Poh Sing

215,000

0.22

24. Ho Si Keiw

205,601

0.21

25. Lee Teck Hao

180,000

0.18

26. Hee Yau Sing

169,300

0.17

27. Koh Kian Chun

159,500

0.16

28. Lim Ghim Soon

152,000

0.16

29. Gan Kho & Gan Hong Leong

151,400

0.15

30. AllianceGroup Nominees (Tempatan) Sdn. Bhd. Pledged Securities


Account for Tan Eng Hock (100100)

140,000

0.14

92

ANNUAL REPORT 2013

Analysis of Shareholdings
as at 17 September 2013 contd
SUBSTANTIAL SHAREHOLDERS
As Per Register of Substantial Shareholders
Direct

Indirect

No. of

% of Issued

No. of Shares

% of Issued

Shares Held

Capital

Held

Capital

Pang Chee Khiong

21,560,552

22.00

CIMSEC Nominees

16,312,618

16.65

8,366,949

8.54

6,975,319

6,975,319

7.12

Name

1,470,000

(1)

1.50

(Tempatan) Sdn. Bhd.


CIMB For Pang Fok Seng
(PB)
Malaysia Venture Capital

(2)

7.12

Management Berhad
Expedient Equity Ventures
Sdn. Bhd.

(1)
(2)

Deemed interest by virtue of Lim Wai Kiew being his spouse


Deemed interest by virtue of its substantial shareholding in expedient equity

93

ADVANCE COMPOSITES

List of Property
as at 31 May 2013

Tenure/ Area
Location

No.12A, Jalan 20,

Net Book

Approximate

Build-

Expiry

(Sq.

up Area Description

Date

Ft.)

(Sq. Ft.)

Age of

Date of

building

Acquisition

(years)

Freehold 50,870 35,979 Factory and

Taman Sri

office

Kluang,86000

building

14

Kluang, Johor.

[The rest of this page intentionally left blank]

94

Value as at
31 May
2013
(RM000)

6.12.2010

3,271

ANNUAL REPORT 2013

Notice of Sixth Annual General Meeting


NOTICE IS HEREBY GIVEN THAT the Sixth Annual General Meeting of FIBON BERHAD will be held at
ORNARESORT BERHAD, Batu 16, Jalan Gapam, Ladang Gapam, Bemban, 77200 Jasin, Melaka, Malaysia on
Friday, 25 October 2013 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 2013 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 1.25 sen less tax for the year ended
31 May 2013.

(Resolution 1)

3.

To re-elect the following Directors who are retiring in accordance to the


Companys Articles of Association and being eligible offer themselves for reelection:
(Article 121)
(Article 121)
(Article 126)

i. Pang Fok Seng


ii. Chong Peng Khang
iii. Koh Chun Kiat

(Resolution 2)
(Resolution 3)
(Resolution 4)

4.

To approve the payment of Directors fees of RM246,000.00 for the financial


year ended 31 May 2013.

(Resolution 5)

5.

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


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

(Resolution 6)

SPECIAL BUSINESS:
To consider and, if thought fit, pass the following Ordinary Resolutions:6.

Ordinary Resolution - Authority To Directors to Allot and Issue Shares


THAT subject to the provisions of Section 132D of the Companies Act, 1965
and approvals from the Bursa Malaysia Securities Berhad (Bursa Securities)
and other relevant governmental/regulatory authorities where such approvals
shall be necessary, authority be and is hereby given to the Directors of the
Company to allot and issue shares in 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 such authority shall remain in force until the next
Annual General Meeting (AGM) of the Company.

95

(Resolution 7)

ADVANCE COMPOSITES

Notice of Sixth Annual General Meeting


7.

contd

Special Resolution
Proposed Renewal Share Buy-Back by the Company

(Resolution 8)

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 Companys issued and paid-up ordinary shares of
RM0.10 each (Fibon Shares) through Bursa Securities (Proposed Share BuyBack) 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.
8.

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

96

(Resolution 9)

ANNUAL REPORT 2013

Notice of Sixth Annual General Meeting

contd

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT


NOTICE IS ALSO HEREBY GIVEN that a Single Tier Final Dividend of 1.25 sen per share in respect of financial
year ended 31 May 2013 will be payable on 28 December 2013 to depositors registered in the Record of
Depositors at the close of business on 2 December 2013, if approved by shareholders at the forthcoming Sixth
Annual General Meeting on Friday, 25 October 2013.
A Depositor shall qualify for entitlement to the dividend only in respect of:
a.

Shares transferred into the Depositors Securities


2 December 2013 in respect of ordinary transfer; and

b.

Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the
Rules of Bursa Malaysia Securities Berhad.

BY ORDER OF THE BOARD


NORIAH BINTI MD YUSOF (LS 0009298)
Secretary
Johor Bahru
Date : 30 September 2013

97

Account

before

5.00

p.m.

on

ADVANCE COMPOSITES

Notice of Sixth Annual General Meeting

contd

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 30 September 2013 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 Sixth 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 Fifth AGM of the Company held on 14
November 2012 (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.

98

FIBON BERHAD
(Company No: 811010-H)
(Incorporated In Malaysia)

Number of Ordinary Shares Held

PROXY FORM
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 Sixth Annual General Meeting of the Company to be held at ORNARESORT BERHAD, Batu 16, Jalan
Gapam, Ladang Gapam, Bemban, 77200 Jasin, Melaka, Malaysia on Friday, 25 October 2013 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.
1.
2.
3.
4.
5.
6.
7.
8.

RESOLUTIONS
Declaration of a single tier final dividend of 1.25 sen for the year ended 31 May 2013.
Re-election of Mr. Pang Fok Seng as Director.
Re-election of Mr. Chong Peng Khang as Director.
Re-election of Mr. Koh Chun Kiat as Director.
Approval of the payment of Directors fees of RM246,000.00 for the financial year ended
31 May 2013.
Reappointment of Messrs Crowe Horwath as Auditors of the Company for the ensuing year
and to authorise the Directors to fix their remuneration.
Authority to Issue Shares Pursuant to Section 132D of the Companies act, 1965.
Proposed Renewal Share Buy Back by the Company

FOR

AGAINST

* 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)

For appointment of two proxies, percentage of


shareholdings to be represented by the proxies:
Percentage
Proxy 1
%
Proxy 2
_________%
Total
100 %

..
Signature of Member/Common Seal
Date: .

[Please refer to the next page for the Notes on Appointment of Proxy)

99

Fold This Flap For Sealing

Then Fold here

Affix Stamp

The Company Secretary

FIBON BERHAD (811011-H)


31-04 Level 31 Menara Landmark,
No 12 Jalan Ngee Heng,
80000 Johor Bahru

1st Fold here


Notes on Appointment of Proxy:

1.
2.
3.
4.
5.
6.
7.

Only depositors whose name appears in the Record of Depositors as at 30 September 2013 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.
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.
A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting.
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.
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.
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.
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.

100

FIBON BERHAD
12A, JALAN 20,
TAMAN SRI KLUANG,
86000 KLUANG, JOHOR,
MALAYSIA
TEL : ( 607 ) 773 6918
FAX : ( 607 ) 774 2025
E-MAIL : corp@fibon.com.my