Focus Lumber Berhad (188710-V) Mile 3, Jalan Masak, Kampung Ulu Patikang, Locked Bag 13 SM-88, 89009 Keningau, Sabah, Malaysia. Tel: 087-334761/4/6, 335457/8 Fax: 087-335459 Email: [email protected]Annual Report 2012 Growth and Beyond Boundaries Annual Report 2012 Focus Lumber Berhad (188710-V)
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Focus Lumber Berhad (188710-V)
Mile 3, Jalan Masak, Kampung Ulu Patikang,Locked Bag 13 SM-88, 89009 Keningau,Sabah, Malaysia.Tel: 087-334761/4/6, 335457/8Fax: 087-335459Email: [email protected]
Aspartof themanagementsuccessionplan, in recentyears, theGrouphasgroomedkeymanagementpersonnelwhohaveboughtinnewideastotheoperations.Theyarethechildrenofthefounders.
Overtheyearswiththevastexperienceandstrongtechnicalcapabilitiesandknowhow,theGrouphavebecome a major player in the plywood industry. The Group also emphases on environmentally friendlymanufacturinganditwasthefirstMalaysianplywoodmillcompanycertifiedasaCARBCertifiedManufactureron2October2008byProfessionalService Industries, Inc., aCARBauthorized thirdparty certifier. TheCARBstandardsregulateformaldehydeemissionsfromwoodproductssoldinCaliforniaorusedtomakefinishedgoodforsaleinCalifornia.Inaddition,itwasalsoawardedwiththeJASCertificationbytheMinistryofAgriculture,ForestryandFisheriesofJapan in2009asaprovenqualifiedplywoodmanufacturer.JASimposesstringentrequirementsonvariousaspectsofproductionprocess.TheJAScertificationsignifiesthe acknowledgement and endorsement of the high quality of the Group’s product which will enhancecustomers’confidence.
Aznam Bin MansorChairman / Independent Non-Executive Director
Lin Hao WenManaging Director
Lin Lieh MingExecutive Director
Yang SenExecutive Director
Wong Yoke NyenIndependent Non-Executive Director
Ng Tian MengIndependent Non-Executive Director
REGISTERED OFFICE AND FACTORYMile3,JalanMasak,KampungUluPatikangLockedBag13SM-88,89009Keningau,SabahTelNo:087-335457/335458/334761/334766FaxNo:087-335459Email:[email protected]
2009 Awarded the JAS certification by the Japan Plywood Inspection Corporation. JAS requires evaluation of theinternalstructureandmanagerialcompetencethatsupportstheprocessesthatoccuralongtheorganicchainandfurtherfocusesonverifyingthatsystemsare inplacefordecidingandensuringtheproductsmeettherelevantstandards(grading).
Aznam Bin MansorMalaysian,aged55Chairman/Independent Non-Executive Director
Lin Hao WenTaiwanese,aged35Managing Director
LinHaoWen,ourManagingDirector,wasappointedtoourBoardon 14 July 2009. He is also a member of the RemunerationCommittee.
He graduated from Yuan-Ze University, Taiwan with a BachelorDegree inComputerScience in2001andsubsequentlypursuedhis Master in Business Administration (Major in Supply ChainManagement)inEasternMichiganUniversity,USA.Hegraduatedin2006andstartedhiscareerwithourGroupin2007asAssistanttotheManagingDirectoroverseeingthebusinessoperationintheareaofproductionandmarketing.On1March2013,heisappointedastheManagingDirectoroftheCompanyandthereafter,heisalsoappointedasamemberoftheRemunerationCommittee.
He holds a Bachelor Degree in International Trade from MingChuangUniversity,Taiwanin1994.PriortojoiningourGroup,hewasaMarketingManagerinaveneermanufacturingcompanyinCambodiafor5years.In2000,hejoinedourGroupastheSalesandMarketingManagerandwaspromotedtothepositionofHeadofSalesandMarketingDepartmentin2009.
Lin Lieh MingTaiwanese,aged55Executive Director
Yang SenTaiwanese,aged42Executive Director
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
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DIRECTOR’SPROFILE (Cont’d)
WongYokeNyen,our IndependentNon-ExecutiveDirector,wasappointed toourBoardon24November2010.He is theAuditCommitteeChairman,memberofNominationandRemunerationCommittees.
In1981,hestartedhiscareerinBakerRooke,afirmofcharteredaccountants in London where he gained wide experience andexposureintheareasofauditing,accountancy,andmanagementconsultancy work. In 1983, he joined Aseambankers MalaysiaBerhad(nowknownasMaybankInvestmentBankBerhad).Heisaseasonedinvestmentbankerwithmorethan20yearsofdedicatedcorporatefinanceandinvestmentbankingexperience.HewastheExecutiveVicePresidentcumHeadofCorporateFinanceDivisioninAseambankersMalaysiaBerhad.
In 2004, he started WYNCORP Advisory Sdn Bhd, a privatecompany licensed to provide investment advisory services. Heis currently the Managing Director of WYNCORP Advisory SdnBhd. He is also an Independent Non-Executive Director of NewHoongFattHoldingsBerhad,XiDeLangHoldingsLimited,BenalecHoldingsBerhadandSentoriaGroupBerhad.
Ng Tian Meng, our Independent Non-Executive Director, wasappointedtoourBoardon24November2010.HeistheChairmanofRemunerationCommitteeandmemberofAuditandNominationCommittees.
Hehasapproximately29yearsofexperienceintheelectricalengineeringfield involving engineering consultancy, project management,operation,maintenance, testingandcommissioning.Hestartedhisengineering career and worked in Malayawata Steel Berhad as anElectricalEngineerbetweenMay1981andJuly1983.Subsequently,heworked in several companies involved in the steel, engineering,breweryandcameramanufacturingbusinesses.Currently,he istheManagingDirectorofJuruteraPerundingM&ENTM(S)SdnBhdandNTMEngineeringServicesSdnBhd.
Apartfromhisextensiveworkingexperience,heobtainedhisCouncilforNationalAcademicAwardBachelorofScienceDegree(Major inElectrical and Electronic Engineering) from Robert Gordon InstituteofTechnology,Scotland in1980.He isacorporatememberof theInstitutionofEngineersMalaysia, the InstituteofEngineersAustraliaandtheInstituteofElectricalEngineersUnitedKingdom.Inaddition,heisalsoaProfessionalEngineerregisteredwiththeBoardundertheInstitutionofEngineers,AustraliaandaCharteredEngineerregisteredwiththeEngineeringCouncil,UnitedKingdom.
Wong Yoke NyenMalaysian,aged54Independent Non-Executive Director
Ng Tian MengMalaysian,aged58Independent Non-Executive Director
Notes to Directors’ Profile:1. Lin Hao Wen and Lin Hao Yu, a major shareholder are brothers and they are sons of Lin Fong Ming, a major shareholder. 2. Yang Sen, Yang Hsi Hsien and Yang Wei Szu, both the major shareholders are sibling and they are sons of Yang Chien Chih, a major shareholder.3. Lin Lieh Ming is the nephew to Lu Chin Ting, a major shareholder.
Save as disclosed, none of the Directors have:i. any family relationship with any Director and/or major shareholder of the Company; andii. any conflict of interest with the Company; andiii. any conviction for offences within past 10 years other than traffic offences.
Fortheyear2012,theglobalplywoodmarketexperiencedamarginalrecoveryindemandasthereisacontinuousgrowthinthehousingdevelopmentinUSandtheemergingmarketsacross Asia, Latin America and Europe since the last fewyears.TheGrouprecordedan increasedsaleof itsplywoodto the US market by 27.9% in year 2012 as compared tothe previous year. We anticipate more sales will be rollingto the US plywood market in the year ahead. However, theGroupwillbecautiouslyoverlookingtheoverallperformanceas there will be more challenges and uncertainties such asthe inflated costing elements and the sluggish economiesfromtheprolongedEurozoneDebtCrisis,theUSDebtCeilingCrisisetc.
Financial Performance
For the year under review, the Group recorded revenue ofRM132.80million,an increaseof8.7%against thepreviousyearperformanceofRM122.15million.Theincreaseinsaleswascontributedbyabetterproductionyield in the financialyear 2012. Profit before taxation was RM 8.38 million, adeclineof45.3%tothepreviousyearofRM15.33millionwhilethenetprofitaftertaxationofRM11.60millionrepresentedadeclineof15.4%yearonyear.Thistranslatedtoearningspershareof11.2sen.Thedecline in theprofitswasmainlyduetotheincreaseoftherawmaterialcostandthefluctuationoftheUSDcurrency.
Equity attributable to owners of the Company grew fromRM110.47 million in the previous year to RM115.88 millionin2012whilereturnonequityfortheyearunderreviewwas10.2%.
Though the Group has been under significant pressure onthe increasing cost of production and the fluctuation ofthe USD currency during the financial year 2012, however,the Group has managed to achieve growth in its earningsmainlybenefitedbytheimprovingUShousingmarketandtheincreasingplywooddemand.
Corporate Social Responsibility
TheGroupacknowledgestheimportanceofCorporateSocialResponsibility (CSR)andhaspracticed itsCSR towards thefourapproaches,i.e.theworkplace,environment,communityand the stakeholders which are also in line with BursaMalaysia’s framework. Just to name a few, the Group hastakentheinitiativestowardsthefollowing:-
1.Promotingawork-lifebalanceamongitsemployeesthroughorganising recreational activities such as sports events,LabourDayFeast,etc;
2.Maintainingasafecleanandhealthyworkingenvironmentthroughstrengtheningsafetyawarenessandfacilitiessuchas fire prevention program and improved rescue facilitiesetc;
3.Conducting cleaning events and beautifying gardens andlandscapingwithinthecompoundofthepremises;
4.Investing in building human capital through learning andcapabilitydevelopment;
7.CarryingoutaLaceyComplianceVerification(LCV)Programin affirming the legality of sourced forest products usedin the manufacture of our products which will give highconfidencetoourcustomersundertherequirementoftheLaceyActfortheUSmarket.
Due to the implementation of the Minimum Wages Systemeffective from 1 January 2013, the Group’s operatingenvironment has becoming more challenging in order toremain profitable in the year ahead. However, the GroupexpectsthatthepricesofitsproductswillremaincompetitivesincetheUSemploymentmarkethasimprovedatthestartoftheyearandthegainsinhiringisontheheelsofareboundedhousing market, a pickup in consumer spending and morecorporate investment which will help bolster stability in USeconomy,ofwhichwill result inastrongerplywooddemandandbetterpricingintheplywoodmarket.
TheGroup,havingbeencertifiedbyawoodproductstestingand certifying company from US recently, will expand itsbusinessesfurtherintotheUSregionandwillpursueabiggershareinUSplywoodmarket.
Lookingforward,theGroupwillcontinuetoworkonimprovingoperational efficiency by enhancing the productivity of itsworkforceanditsequipmentfleet,andkeepingaclosewatchon costs and expenditures.With a healthy balance sheet,strong operating fundamentals and excellent leadership ofthe Board, our CEO/MD and management, I am confidentthattheGroupwillcontinuetodelivergrowthandsustainableshareholdersreturnsintheyearahead.
Appreciation
Firstofall,onbehalfoftheBoard,Iwishtoextendmyhighestappreciation and salutation to our former Directors, MessrsLu Chin Ting, Lin Fong Ming and Chen Chun Hsiung, whohave dedicated their most valuable time, hard work andcommitment during their services with the Group in strivingfortheGroup’slegendarysuccessintheindustry.
Meantime,ourmanagementteamandemployeesalsodeserveour appreciation for their strong dedication, hard work andcommitment thatwill enable theGroup to look forward toabrightfuture.
We would also like to express our appreciation to all ourvaluedcustomers,suppliers,businessassociates,bankersandregulatoryauthoritiesforthelong-standingsupport,confidenceand guidance to the Group. Above all, we thank you, ourshareholdersforyourcontinuoussupporttotheGroup.
The Group is managed by an effective Board which leads and controls the Group in the discharge of its stewardshipresponsibilities.
TheBoardhas theoverall responsibility for the strategicdirection; formulationof objectivesand strategies; establishmentofpoliciesandprocedures;andexecutionandmonitoringofthebusinessactivitiesoftheGroup;riskmanagement;successionplanning;developingandimplementinginvestorsrelationsandreviewinginternalcontrols.
(i) One(1)ManagingDirector (ii) Two(2)ExecutiveDirectors (iii) Three(3)IndependentNon-ExecutiveDirectors
TheBoardfulfilstherequirementtohaveatleastonethirdoftheBoardcomprisingofIndependentNon-ExecutiveDirectors.TheBoard is ledbyAznamBinMansorwho isan IndependentNon-ExecutiveChairman,andtheexecutivemanagementoftheGroup is ledbyLinHaoWenastheManagingDirectorof theGroup.Therolesandresponsibilitiesof theChairmanandtheManagingDirectorareclearlydefinedandseparatedsoastoensureabalanceofpowerandauthority.TheChairman isresponsiblefororderlyconductandworkingoftheBoard.TheManagingDirectorisresponsiblefortherunningofthebusiness,implementationofthepolicieslaiddownandmakingexecutiveandinvestmentdecisions.
The Directors are also regularly updated and advisedonnew regulations, guidelinesor directives issuedbyBursaMalaysiaSecuritiesBerhad,SecuritiesCommissionandotherregulatoryauthorities.
All Board members have access to the advice and services of the appointed Company Secretary, namely Tricor CorporateServicesSdn.Bhd.toenablethemtodischargetheirdutieseffectively.TheappointmentoftheCompanySecretary isbasedonthecapabilityandproficiencydeterminedbytheBoard.Bothof thesecretariesappointedtoprovidetheirservicesto theCompanyarequalifiedandtheyaremembersoftheMalaysianInstituteofCharteredSecretariesandAdministrators(“MAICSA”).TheCompanySecretaryisresponsibleforensuringtheproceduresfortheBoardmeetingsarefollowedandthatapplicablerulesandregulationsarecompliedwith.DirectorsmayalsoobtainindependentprofessionaladvicewheneverdeemednecessaryattheCompany’sexpense.
TheNominationCommittee(NC)wasestablishedtoassisttheBoardinidentifyingtherightcandidatewiththenecessaryskills, experience and competencies to be filled in the Board. The NCcomprises entirely Independent Non-ExecutiveDirectorsasfollows:-
TheNCisempoweredbytheBoardthroughitstermofreferencetocarryoutthefollowingfunctions:-i) To recommend to theBoardofDirectors, candidates forall directorships tobe filledby theshareholdersor the
board;
ii) To consider, in making its recommendations, candidates for directorships proposed by the Managing Director/Chief Executive Officer and within the bounds of practicability, by any other senior executive or any director orshareholder;
TheNominationCommitteemeetsatleastonceayear.Duringthefinancialyearended31December2012,theNominationCommittee held two (2) meetings to review and evaluate Directors’ resignations and appointment and to carry outassessmenton the contributionandperformanceof each individualDirector and this includesanassessmenton theindependenceoftheIndependentDirectorsaswellasnotedthetrainingsattendedbyeachindividualDirector.TheBoardissatisfiedwiththecontributionandperformanceofeachindividualDirectoraswellastheIndependentDirectorscomplieswiththecriteriaofIndependencebasedontheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad.
Determination of remuneration packages of Non-Executive Directors, including Non-Executive Chairman, shall bedeterminedbytheBoardofDirectorsasawholeandtheindividualsconcernedshouldabstainfromdiscussingtheirownremuneration.
TheremunerationpolicyandprocedureprovidesaframeworkforremunerationpaidtothemembersoftheBoardandtheManagementTeamoftheCompany.TheremunerationpolicyrecognisestheneedfortheCompanytoattract,motivateandretainqualifiedmembersoftheBoard and the Management Team as well as to align the interests of the Board with the interests of the Company’sshareholders.
Thedirectorsare reimbursedexpensesandmaybesupported in their role throughCompanysponsoredprofessionaldevelopmentactivities,Companysuppliedtechnology,insuranceandindemnitycoverandotherbenefits.
The NC also annual reviews the effectiveness of the Board as a whole, its committees and the contribution of eachindividualDirectoraswellastheManagingDirectoronanannuallybasis.TheNCwillensurethatallassessmentsandevaluationscarriedoutareproperlydocumentedandfiled.
• Re-election of DirectorsInaccordancewiththeArticlesofAssociationoftheCompany,one-third(1/3)oftheBoard,shallretirefromofficeandbeeligibleforre-electionateachAnnualGeneralMeeting.AlltheDirectors,includingtheManagingDirector,shallretirefromofficeonceatleastineverythree(3)yearsbutshallbeeligibleforre-election.
TheBoardrecognizestheimportanceofkeepingtheshareholdersandinvestorsinformedoftheGroup’sbusinessandcorporatedevelopments. Such information isdisseminatedvia theGroup’sannual reports,circulars toshareholders,quarterlyfinancialresultsandthevariousprescribedannouncementsmadetoBursaSecuritiesfromtimetotimeintheBursaSecurities’websiteatwww.bursamalaysia.com.
The Board aims to provide and present a balanced, clear and meaningful assessment of the Group’s financial position andprospects,primarilythroughtheannualfinancialstatements,quarterlyresultsannouncementstoBursaSecuritiesandtheannualreporttotheshareholders.TheAuditCommitteeassiststheBoardinscrutinizinginformationfordisclosuretoensureaccuracyandcompletenessandoverseetheGroup’sfinancialreportingprocessesandthequalityofitsfinancialreporting.
(c) Career Advancement: All decisions associated with career advancement, including promotions, transfers, and otherassignments,willmeettheCompany’sneedsandbedeterminedonskillandmerit.
However,theCompanywillnotrush into identifyingwomentobe includedin itsBoardandseniormanagementasthepersonselectedmustbeable tocontributepositively to theCompany.TheNominationCommitteehasbeen taskedby theBoard tocontinuouslylookforpeoplewithdiverseskillsandtalentthatcancontributetotheCompany.
4. Work environment
The Company will ensure that all officers, employees and contractors have access to a work environment that is free fromharassment.TheCompanywillnotpermitunwantedconductbasedonanofficer,employeeorcontractor’spersonalcircumstancesorcharacteristics.
It istheresponsibilityofalldirectors,officersandemployeestocomplywiththeCompany’sGenderDiversityPolicyandreportviolationsorsuspectedviolationsinaccordancewiththisGenderDiversityPolicy.
TheBoardhasadoptedaDiversityPolicywhichdescribestheCompany’scommitmenttoensuringadiversemixofskillsandtalentexistsamongst itsdirectors,officersandemployees, toenhanceCompanyperformance.TheDiversityPolicyaddressesequalopportunities in thehiring, trainingandcareeradvancementofdirectors,officersandemployees.TheBoard is responsible formonitoringCompanyperformanceinmeetingtheDiversityPolicyrequirements.
1. The WorkplaceTheGrouphastheresponsibilitytoprovideandmaintainasafeandhealthyworkingenvironmentforall itsemployees.Regularinspectionsandupgradeswerecarriedouttoensurecanteencleanliness,kitchenandseweragefacilitieswerewellmaintained.Foodhygienicstandardsareappliedtoensuresafetyandhealth intheworkplace.Recreationactivitiesareorganized,suchasfootballandbadminton tournamentsand festivecelebrations foremployeesandmanagementstaff toparticipateand interact.TheestablishmentofaSafetyandHealthCommittee for itsmanufacturing facilities is toensureasafeandconduciveworkingenvironmentforitsemployees.
2. The EnvironmentTheGroupiscommittedtoreduceenvironmentalimpactofitsoperationandfirmlybelievesinadoptingwastemanagementandrecyclingprogramssuchas thewoodwasteofwhichgenerated fromthemanufacturingprocessareusedasmaterial for thebiomasspowerplantforregenerationofelectricitysupplyforitsoperation.Wearealsocommittedtobeincompliancewiththerelevantlawsrelatingtosustainableforestry,emissionstandardsandplanteffluentmanagement.
3. The CommunityTheGrouphasbeencontributingtothecommunitybydonatingtotheneedyandcontributingtocharitableeventsorganizedbygovernmentalandprivateorganization.
4. The StakeholdersTheGroupwillcontinuewith its focus toenhanceandmaximize itsshareholders’value.TheGroupbelieves inenhancing therelationshipwithallstakeholdersincludingshareholders,regulatoryauthorities,businessassociates,bankersandsuppliers.
(c) reviewanyappraisalorassessmentoftheperformanceofmembersoftheinternalauditfunction;(d) approveanyappointmentorterminationofseniorstaffmembersoftheinternalauditfunction;and(e) take cognizance of resignations of internal audit staff members and provide the resigning staff member an
(8) provideanopinionor viewon theeffectivenessof the related systemof riskmanagement and internal control inmanagingthesignificantrisks, includingexceptionreportingonsignificantriskmanagementandcontrol failuresorweaknesses,whichhaveamaterialimpactontheCompany’sfinancialposition;
a. Reviewed the quarterly unaudited financial results of the Company and Group before recommending to the Board forconsiderationandapproval;
b. Reviewedtheexternalauditors’scopeofworkandauditplanforthefinancialyearended31December2012;
c. ReviewedwiththeInternalAuditor,theinternalauditplans,theinternalauditreports,theirevaluationoftheinternalcontrolsystemandthefollow-upontheauditfindings;
d. Reviewed relatedparty transactions entered intoby theGroupand theCompany to ensure that such transactionswereundertaken in line with the Group’s normal commercial terms and the internal control procedures with regards to suchtransactionaresufficient;
e. ReviewoftheauditedfinancialstatementsbeforerecommendingfortheBoardofDirectors’approval.
f. RecommendedtotheBoardonthememberstobeappointedforRiskManagementCommittee.
• Developingtheinternalauditplanforyear2012• PerformedinternalauditreviewontheProduction,InventoryandHumanResourcefunctionoftheGroup.• Issued reports on the results of the internal audit review, identifying weaknesses with suggested recommendations for
improvementstoManagementforfurtheractiontoimprovethesystemofinternalcontrol.• Conducted followup reviews toensure that actionplansareproperly andappropriately implementedbyManagement in
TheMalaysianCodeonCorporateGovernancepromulgates,inter-alia,theneedforlistedcompaniestomaintainasoundriskmanagementframeworkandinternalcontrolsystemtosafeguardshareholders’investmentandGroup’sassets.TheBoardofDirectors(“Board”)ofFocusLumberBerhad ispleased topresent theStatementonRiskManagementand InternalControl (the “Statement”)which is incompliancewithparagraph15.26(b)ofBursaMalaysiaSecuritiesBerhad’sMainMarketListingRequirementsandhastakenintoaccounttheguidelinesmentionedintheStatementonRiskmanagementandInternalControl(GuidelinesforDirectorsofListedIssuers).
Board’s Responsibility
TheBoardacknowledgesitsresponsibilityforensuringtheadequacyandeffectivenessoftheGroup’sRiskManagementandInternalControlSystem.This includes theestablishmentofanappropriatecontrolenvironmentand riskmanagement framework,processesandstructuresandcontinuallyreviewingtheadequacyandintegrityofthesaidsystemstosafeguardshareholders’investmentandtheGroup’sassets.
For the financial yearunder review, theBoardhas receivedassurance from theManagingDirector andFinancialController that theGroup’sriskmanagementandinternalcontrolsystemisoperatingadequatelyandeffectively,inallmaterialaspects,basedontheriskmanagementandinternalcontrolsystemoftheGroup.
• ConductriskawarenesssessiontocreateacultureofriskawarenessamongManagementandStaff• Establish the risk management structure to be adopted based on the organisation structure and operations of respective
The Board is responsible towards the overall effectiveness of the Group’s risk management and internal control systems throughestablishing,directingandsupervisingtheoperationofariskframeworkthatadequatelymanagesthevariousrisksfacedbytheGroupwhilst theAuditCommittee isoverall responsible forprovidingassuranceto theBoardofDirectors,asan independentparty,on theeffectivenessoftheinternalcontrolsystemsandriskmanagementintheGroup.
The daily running of business is entrusted to the Managing Director, Executive Director and the management team. This close-to-operationsmanagementstyleenablestimelyidentificationandreportingofsignificantmatters.
Theimprovementofthesystemofinternalcontrolsisanon-goingprocessandtheBoardmaintainson-goingcommitmenttostrengthentheGroup’scontrolenvironmentandprocesses.Review of the Statement by External Auditors
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financialstatements.
In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were notsubstantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnature.
c) Atthedateofthisreport,thedirectorsarenotawareofanycircumstanceswhichhavearisenwhichwouldrenderadherencetotheexistingmethodofvaluationofassetsorliabilitiesoftheGroupandoftheCompanymisleadingorinappropriate.
d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financialstatementsoftheGroupandoftheCompanywhichwouldrenderanyamountstatedinthefinancialstatementsmisleading.
Pursuant to Section 169(16) of the Companies Act, 1965
I,LinHaoWen,beingtheDirectorprimarilyresponsibleforthefinancialmanagementofFocusLumberBerhad,dosolemnlyandsincerelydeclare that the accompanying financial statements set out on pages 37 to 92 are in my opinion correct, and I make this solemndeclarationconscientiouslybelievingthesametobetrueandbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,1960.
Directors’ responsibility for the financial statements
ThedirectorsoftheCompanyareresponsibleforthepreparationoffinancialstatementssoastogiveatrueandfairviewinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct,1965 inMalaysia.Thedirectorsarealso responsible for such internal control as thedirectorsdetermine isnecessary toenable thepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.
Inouropinion, thefinancialstatementsgivea trueand fairviewof thefinancialpositionof theGroupandof theCompanyasat31December2012andof their financial performanceandcash flows for the year then ended in accordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct,1965inMalaysia.
a) Inouropinion,theaccountingandotherrecordsandtheregistersrequiredbytheActtobekeptbytheCompanyanditssubsidiaryhavebeenproperlykeptinaccordancewiththeprovisionsoftheAct.
b) WearesatisfiedthatthefinancialstatementsofthesubsidiarythathavebeenconsolidatedwiththefinancialstatementsoftheCompanyareinformandcontentappropriateandproperforthepurposesofthepreparationoftheconsolidatedfinancialstatementsandwehavereceivedsatisfactoryinformationandexplanationsrequiredbyusforthosepurposes.
c) Theauditors’ reporton the financial statementsof thesubsidiarywasnot subject toanyqualificationanddidnot includeanycommentrequiredtobemadeunderSection174(3)oftheAct.
1. Asstated inNote2 to thefinancialstatements,FocusLumberBerhadadoptedMalaysianFinancialReportingStandardson1January2012withatransitiondateof1January2011.Thesestandardswereappliedretrospectivelybydirectorstothecomparativeinformationinthesefinancialstatements,includingthestatementsoffinancialpositionasat31December2011and1January2011,andthestatementsofcomprehensiveincome,statementsofchangesinequityandstatementsofcashflowsfortheyearended31December2011andrelateddisclosures.Wewerenotengagedtoreportonthecomparativeinformationanditisunaudited.OurresponsibilitiesaspartofourauditofthefinancialstatementsoftheGroupandoftheCompanyfortheyearended31December2012have, in thesecircumstances, includedobtainingsufficientappropriateauditevidence that theopeningbalancesasat1January2012donotcontainmisstatements thatmateriallyaffect the financialpositionasof31December2012andfinancialperformanceandcashflowsfortheyearthenended.
Profit net of tax 11,600,226 13,719,930 10,462,367 13,388,115 Other comprehensive income - - - - Total comprehensive income for the year 11,600,226 13,719,930 10,462,367 13,388,115 Profit attributable to: OwnersoftheCompany 11,600,226 13,719,930 10,462,367 13,388,115 Earnings per ordinary share attributable to owners of the Company (sen per share): Basic 12 11.24 13.81 Diluted 12 11.24 13.81
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
The financial statements of the Group and Company have been prepared in accordance with Malaysian FinancialReportingStandards (“MFRS”), InternationalFinancialReportingStandardsandtherequirementsof theCompaniesAct,1965inMalaysia.
Thesefinancialstatements, for thefinancialyearended31December2012are theGroup’sfirstMFRSannualfinancialstatements.MFRS1FirsttimeAdoptionofMalaysianFinancialReportingStandards(“MFRS1”)hasbeenapplied.ThedateoftransitiontoMFRSis1January2011.
Asaconsequenceof thenewMFRS10andMFRS12,MFRS127 is limited toaccounting for subsidiaries, jointlycontrolledentitiesandassociatesinseparatefinancialstatements.
NOTES TO THEFINANCIAL STATEMENTS (Cont’d)
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
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FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012
2. Summary of significant accounting policies (continued)
2.4 Standards issued but not yet effective (continued) MFRS9FinancialInstruments:ClassificationandMeasurement
The consolidated financial statements comprise the financial statements of the Company and its subsidiary as atthe reportingdate. The financial statementsof the subsidiary used in thepreparationof the consolidated financialstatementsarepreparedforthesamereportingdateastheCompany.Consistentaccountingpoliciesareappliedtoliketransactionsandeventsinsimilarcircumstances.
Acquisitions of subsidiaries are accounted for by applying the acquisition method. Identifiable assets acquiredand liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.Acquisition-relatedcostsarerecognisedasexpensesintheperiodsinwhichthecostsareincurredandtheservicesarereceived.
ChangesintheCompanyowners’ownershipinterestinasubsidiarythatdonotresultinalossofcontrolareaccountedforasequitytransactions.Insuchcircumstances,thecarryingamountsofthecontrollingandnon-controllinginterestsareadjustedtoreflectthechangesintheirrelativeinterestsinthesubsidiary.Anydifferencebetweentheamountbywhich thenon-controlling interest isadjustedand the fairvalueof theconsiderationpaidor received is recogniseddirectlyinequityandattributedtoownersoftheparent.
2.7 Foreign currency
a) Functional and presentation currency
The individual financial statements of each entity in the Group are measured using the currency of the primaryeconomicenvironmentinwhichtheentityoperates(“thefunctionalcurrency”).TheconsolidatedfinancialstatementsarepresentedinRinggitMalaysia(RM),whichisalsotheCompany’sfunctionalcurrency.
b) Foreign currency transactions
Transactions in foreign currencies are measured in the respective functional currencies of the Company and itssubsidiaryandarerecordedoninitialrecognitioninthefunctionalcurrenciesatexchangeratesapproximatingthoserulingat the transactiondates.Monetaryassetsand liabilitiesdenominated in foreigncurrenciesare translatedatthe rateofexchange rulingat the reportingdate.Non-monetary itemsdenominated in foreigncurrencies thataremeasuredathistoricalcostaretranslatedusingtheexchangeratesasatthedatesoftheinitialtransactions.Non-monetaryitemsdenominatedinforeigncurrenciesmeasuredatfairvaluearetranslatedusingtheexchangeratesatthedatewhenthefairvaluewasdetermined.
2. Summary of significant accounting policies (continued)
2.8 Property, plant and equipment
All itemsofproperty,plantandequipmentare initially recordedatcost.Thecostofan itemofproperty,plantandequipmentisrecognisedasanassetif,andonlyif,itisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes incircumstancesindicatethatthecarryingvaluemaynotberecoverable.
The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjustedprospectively,ifappropriate.
An itemofproperty,plantandequipment isderecognisedupondisposalorwhenno futureeconomicbenefitsareexpectedfromitsuseordisposal.Anygainorlossonderecognitionoftheassetisincludedintheprofitorlossintheyeartheassetisderecognised.
2.9 Investment properties
Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition,investmentpropertiesaremeasuredatcostlessaccumulateddepreciationandaccumulatedimpairmentlosses.Thedepreciationpolicyforinvestmentpropertiesisinaccordancewiththatfordepreciableproperty,plantandequipmentasdescribedinNote2.8.
NOTES TO THEFINANCIAL STATEMENTS (Cont’d)
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
��
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012
2. Summary of significant accounting policies (continued)
Transfers are made to or from investment property only when there is a change in use. For a transfer frominvestmentpropertytoowner-occupiedproperty,thedeemedcostforsubsequentaccountingisthefairvalueatthedateofchange inuse.Fora transfer fromowner-occupiedproperty to investmentproperty, theproperty isaccountedforinaccordancewiththeaccountingpolicyforproperty,plantandequipmentsetoutinNote2.8uptothedateofchangeinuse.
Anasset’s recoverableamount is thehigherof anasset’s fair value lesscosts to sell and its value inuse.Forthe purpose of assessing impairment, assets are grouped at the lowest levels for which there are separatelyidentifiablecashflows(cash-generatingunits(“CGU”)).
In assessing value in use, the estimated future cash flows expected to be generated by the asset arediscountedto theirpresentvalueusingapre-taxdiscount rate that reflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.Wherethecarryingamountofanassetexceedsits recoverableamount, theasset iswrittendownto its recoverableamount. Impairment lossesrecognisedinrespectofaCGUorgroupsofCGUsareallocatedtoreducethecarryingamountoftheassetsintheunitorgroupsofunitsonapro-ratabasis.
Impairmentlossesarerecognisedinprofitorloss.
NOTES TO THEFINANCIAL STATEMENTS (Cont’d)
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
�0
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012
2. Summary of significant accounting policies (continued)
2.10 Impairment of non-financial assets (continued)
An assessment is made at each reporting date as to whether there is any indication that previously recognisedimpairmentlossesmaynolongerexistormayhavedecreased.Apreviouslyrecognisedimpairmentlossisreversedonly if therehasbeenachange in theestimatesused todetermine theasset’s recoverable amount since the lastimpairmentlosswasrecognised.Ifthatisthecase,thecarryingamountoftheassetisincreasedtoitsrecoverableamount.Thatincreasecannotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciation,hadnoimpairmentlossbeenrecognisedpreviously.Suchreversalisrecognisedinprofitorloss.
When financialassetsare recognised initially, theyaremeasuredat fair value,plus, in thecaseof financialassetsnotatfairvaluethroughprofitorloss,directlyattributabletransactioncosts.
TheGroupandCompanydetermine theclassificationof their financialassetsat initial recognition,and thecategoriesincludefinancialassetsatfairvaluethroughprofitorloss,loansandreceivables,held-to-maturityinvestmentsandavailable-for-salefinancialassets.
a) Financial assets at fair value through profit or loss
Financialassetsareclassifiedasfinancialassetsatfairvaluethroughprofitorlossiftheyareheldfortradingoraredesignated as such upon initial recognition. Financial assets held for trading are derivatives (including separatedembeddedderivatives)orfinancialassetsacquiredprincipallyforthepurposeofsellinginthenearterm.
NOTES TO THEFINANCIAL STATEMENTS (Cont’d)
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
�1
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012
2. Summary of significant accounting policies (continued)
2.12 Financial assets (continued)
a) Financial assets at fair value through profit or loss (continued)
Subsequent to initial recognition,held-to-maturity investmentsaremeasuredatamortisedcostusing theeffectiveinterest method. Gains and losses are recognised in profit or loss when the held-to-maturity investments arederecognisedorimpaired,andthroughtheamortisationprocess.
Regularwaypurchasesorsalesarepurchasesorsalesoffinancialassetsthatrequiredeliveryofassetswithintheperiodgenerallyestablishedbyregulationorconvention in themarketplaceconcerned.All regularwaypurchasesandsalesoffinancialassetsarerecognisedorderecognisedonthetradedatei.e.,thedatethattheGroupandtheCompanycommittopurchaseorselltheasset.
NOTES TO THEFINANCIAL STATEMENTS (Cont’d)
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
��
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012
2. Summary of significant accounting policies (continued)
2.13 Impairment of financial assets
The Group and the Company assess at each reporting date whether there is any objective evidence that afinancialassetisimpaired.
Trade and other receivables and other financial assets carried at amortised cost
Todeterminewhetherthereisobjectiveevidencethatanimpairmentlossonfinancialassetshasbeenincurred,theGroupandtheCompanyconsiderfactorssuchastheprobabilityofinsolvencyorsignificantfinancialdifficultiesofthedebtoranddefaultorsignificantdelayinpayments.Forcertaincategoriesoffinancialassets,suchastradereceivables,assetsthatareassessednottobe impaired individuallyaresubsequentlyassessedfor impairmenton a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio ofreceivablescould include theGroup’sand theCompany’spastexperienceofcollectingpayments,an increasein the number of delayed payments in the portfolio past the average credit period and observable changes innationalorlocaleconomicconditionsthatcorrelatewithdefaultonreceivables.
If anysuchevidenceexists, theamountof impairment loss ismeasuredas thedifferencebetween theasset’scarryingamountandthepresentvalueofestimatedfuturecashflowsdiscountedatthefinancialasset’soriginaleffectiveinterestrate.Theimpairmentlossisrecognisedinprofitorloss.
Provisionsarereviewedateachreportingdateandadjustedtoreflectthecurrentbestestimate.Ifitisnolongerprobablethatanoutflowofeconomicresourceswillberequiredtosettletheobligation,theprovisionisreversed.If the effect of the time value of money is material, provisions are discounted using a current pretax rate thatreflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in theprovisionduetothepassageoftimeisrecognisedasfinancecost.
Financial liabilities, are recognised in the statement of financial position when, and only when, the Group andthe Company become a party to the contractual provisions of the financial instrument. Financial liabilities are
Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.BorrowingsareclassifiedascurrentliabilitiesunlesstheGroupandtheCompanyhaveanunconditionalrighttodefersettlementoftheliabilityforatleast12monthsafterthereportingdate.
2. Summary of significant accounting policies (continued)
2.22 Income taxes
a) Current tax
Currenttaxassetsandliabilitiesaremeasuredattheamountexpectedtoberecoveredfromorpaidtothetaxationauthorities. The tax rates and tax lawsused to compute theamount are those that are enactedor substantivelyenactedbythereportingdate.
Deferred tax isprovidedusing the liabilitymethodon temporarydifferencesat the reportingdatebetweenthe taxbasesofassetsandliabilitiesandtheircarryingamountsforfinancialreportingpurposes.
Formanagementpurposes,theGroupisorganisedintooperatingsegmentsbasedontheirproductsandserviceswhichareindependentlymanagedbytherespectivesegmentmanagersresponsiblefortheperformanceoftherespectivesegmentsunder their charge. The segment managers report directly to the management of the Company who regularly reviewthesegmentresults inordertoallocateresourcestothesegmentsandtoassessthesegmentperformance.AdditionaldisclosuresoneachofthesesegmentsareshowninNote30,includingthefactorsusedtoidentifythereportablesegmentsandthemeasurementbasisofsegmentinformation.
Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs.Ordinarysharesareclassifiedasequity.Dividendsonordinarysharesarerecognisedinequityintheperiodinwhichtheyaredeclared.
NOTES TO THEFINANCIAL STATEMENTS (Cont’d)
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
�0
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012
2. Summary of significant accounting policies (continued)
2.25 Contingencies
Acontingent liabilityorasset isapossibleobligationorassetthatarisesfrompasteventsandwhoseexistencewillbeconfirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of theGroup.
Thekeyassumptionsconcerning the futureandother key sourcesof estimationuncertaintyat the reportingdate thathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow.
The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired.Todeterminewhether there isobjectiveevidenceof impairment, theGroupconsiders factorssuchas theprobabilityofinsolvencyorsignificantfinancialdifficultiesofthedebtoranddefaultorsignificantdelayinpayments.
Included in employee benefits expense of the Group and the Company are executive directors’ remuneration amounting toRM772,360(2011:RM888,120)asfurtherdisclosedinNote10.
Number of Number of shares sharesWeightedaveragenumberofordinarysharesforbasicearningspersharecomputation 103,200,000 99,322,740 Basicearningsperordinaryshare(sen) 11.24 13.81
13. Property, plant and equipment
Leasehold Factory and Motor vehicles Furniture, land office heavy fittings, buildings equipment equipment, Plant and and machinery renovation Total RM RM RM RM RM
Group
Cost: At 1 January 2011 700,080 11,629,291 116,963,530 1,371,178 130,664,079Additions - 3,600 1,700,058 17,926 1,721,584Disposals - - (2,352,918) - (2,352,918) At 31 December 2011 and 1 January 2012 700,080 11,632,891 116,310,670 1,389,104 130,032,745Additions - 107,595 997,896 326,791 1,432,282Transfer(Note14) - (1,639,950) - (370,086) (2,010,036)Disposals - - (40,519) - (40,519)Scrapped - - (121,500) - (121,500) At 31 December 2012 700,080 10,100,536 117,146,547 1,345,809 129,292,972
NOTES TO THEFINANCIAL STATEMENTS (Cont’d)
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
��
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012
13. Property, plant and equipment (continued) Leasehold Factory and Motor vehicles Furniture, land office heavy fittings, buildings equipment equipment, Plant and and machinery renovation Total RM RM RM RM RM
At 31 December 2012 700,080 10,100,536 89,094,365 1,314,697 101,209,678
NOTES TO THEFINANCIAL STATEMENTS (Cont’d)
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
FOCUS LUMBER BERHAD (188710-V)ANNUAL REPORT 2012
��
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012
13. Property, plant and equipment (continued) Leasehold Factory and Motor vehicles Furniture, land office heavy fittings, buildings equipment equipment, Plant and and machinery renovation Total RM RM RM RM RM
Company (continued)
Accumulated depreciation:
At 1 January 2011 28,382 7,687,978 66,016,335 1,238,028 74,970,723Depreciationchargefortheyear 9,460 465,777 2,621,682 47,192 3,144,111Disposals - - (2,314,657) - (2,314,657)
Presented after appropriate offsetting as follows: Deferredtaxassets 2,916,968 3,302,402 3,417,853Deferredtaxliabilities (2,362,222) (2,939,070) (2,880,341)
554,746 363,332 537,512
Company Presented after appropriate offsetting as follows: Deferredtaxassets - - -Deferredtaxliabilities (2,362,222) (2,939,070) (2,880,341)
(2,362,222) (2,939,070) (2,880,341)
Unabsorbedcapitalallowances
At reporting date, the subsidiary has unabsorbed capital allowances that are available for offset against future taxable profits,subjecttonosubstantialchangeinshareholdingsofthesubsidiaryundertheIncomeTaxAct,1967andguidelinesissuedbythetaxauthority.
18. Inventories
Group and Company 31.12.2012 31.12.2011 1.1.2011 RM RM RM
TheCompanyhas elected for the irrevocable option under FinanceAct 2007 todisregard the108balance.Hence, theCompanywillbeabletodistributedividendsoutofitsentireretainedearningsasat31December2012and2011underthesingletiersystem.
A. Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value.
Group and Company 2012 2011 Note Carrying Fair Carrying Fair amount Value amount Value RM RM RM RM
TheBoardofDirectors reviewsandagreespoliciesandprocedures for themanagementof these risks.Theauditcommitteeprovidesindependentoversighttotheeffectivenessoftheriskmanagementprocess.
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit riskexposure.TheGrouptradesonlywithrecognisedandcreditworthythirdparties.ItistheGroup’spolicythatallcustomerswhowishtotradeoncredittermsaresubjecttocreditverificationprocedures.Inaddition,receivablebalancesaremonitoredonanongoingbasiswiththeresultthattheGroup’sexposuretobaddebtsisnotsignificant.
TheGrouphastransactionalcurrencyexposuresarisingfromsalesorpurchaseofplantandmachinerythataredenominateda currency other than in RM. The foreign currency in which these transactions are denominated is mainly US Dollars(“USD”).
For management purposes, the Group is organised into business units based on their products and services, and has tworeportableoperatingsegmentsasfollows:
i. Themanufacturingsegmentisbusinessofmanufacturingandsaleofplywood,veneerandlaminatedveneerlumber.ii. Theelectricitysegmentisthebusinessofgeneration,transmission,distributionandsaleofelectricity.
Managementmonitorstheoperatingresultsofitsbusinessunitsseparatelyforthepurposeofmakingdecisionsaboutresourceallocationandperformanceassessment.Segmentperformanceisevaluatedbasedonoperatingprofitorlosswhich,incertainrespects as explained in the table below, is measured differently from operating profit or loss in the consolidated financialstatements.
33. Breakdown of retained earnings into realised and unrealised
ThebreakdownoftheretainedearningsoftheGroupandoftheCompanyasat31December2012intorealisedandunrealisedprofits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 andpreparedinaccordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountants.
(d) WhereamemberoftheCompany isanauthorisednomineeasdefined intheSecurities Industry (CentralDepositories)Act,1991(“SICDA”),itmayappointnotmorethantwo(2)proxiesinrespectofeachsecuritiesaccountitholdsinordinarysharesoftheCompanystandingtothecreditofthesaidsecuritiesaccount.
(e) Where amemberof theCompany is an exempt authorisednomineewhichholdsordinary shares in theCompany formultiplebeneficialowners inone (1)securitiesaccount (“omnibusaccount”), there isno limit to thenumberofproxieswhichtheexemptauthorisednomineemayappointinrespectofeachomnibusaccountitholds.
(g) The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or anotarially certifiedcopyof that poweror authority shall bedepositedat theShareRegistrar of theCompanyat TricorInvestorServicesSdn.Bhd.(118401-V),Level17,TheGardensNorthTower,MidValleyCity,LingkaranSyedPutra,59200KualaLumpur,notlessthanforty-eight(48)hoursbeforethetimeforholdingthemeetingoranyadjournmentthereof.
The proposed Resolution No. 5 is proposed for the purpose of granting a renewed general mandate (“General Mandate”) andempoweringtheDirectorstoissuesharesintheCompanyuptoanamountnotexceedingintotaltenpercentum(10%)oftheIssuedShareCapitaloftheCompanyforsuchpurposeastheDirectorsconsiderwouldbeintheinterestoftheCompany.
Asatthedateofthisnotice,theCompanydidnotissueanysharespursuanttothemandategrantedtotheDirectorsattheTwenty-Second Annual General Meeting because there were no investment(s), acquisition(s) or working capital that require fund raisingactivity.
Please indicate with an “x” in the spaces provided whether you wish your votes to be cast for or against the resolutions. In the absence of specific directions, your proxy will vote or abstain as he thinks fit.
Dated this __________ day of _________________ 2013