-
A N N U A L R E P O R T 2 0 1 4
annua
l rep
ort 2014
One-Stop Centerfor Pipes, Valves, Fittings
PANTECH GROUPPANTECH GROUP
PANAFLO CONTROLS PTE LTD(200413822 D)
Singapore OfficeNo 22Pioneer Crescent #02-06 West Park Biz
Central Singapore 628556 Tel: +65 6562 3048Fax: +65 6562 3148Email:
[email protected]
PANTECH INTERNATIONAL (KSA) SDN BHD(890670-K)PTD 204334Jalan
Platinum UtamaKawasan Perindustrian Pasir GudangZon 12B81700 Pasir
GudangJohor Darul Takzim, MalaysiaEmail: [email protected]
PANTECH CORPORATION SDN BHD(176321-P)
Johor Bahru Head OfficePTD 204334Jalan Platinum UtamaKawasan
Perindustrian Pasir GudangZon 12B81700 Pasir GudangJohor Darul
Takzim, MalaysiaTel: +607 259 7979 Fax: + 607 256 7588/5789Email:
[email protected]
Shah Alam OfficeNo. 3, Jalan Trompet 33/8Seksyen 33, 40400 Shah
AlamSelangor Darul Ehsan, MalaysiaTel : +603 5192 7995Fax : +603
5192 7992Email : [email protected]
Pulau Indah (Warehouse Office)Persiaran Port Klang FZ 7, Jalan
FZ 6-P1Port Klang Free Zone / KS 1242920 Pulau IndahSelangor Darul
Ehsan, MalaysiaTel : +603 3101 3767Fax : +603 3101 4767
PANTECH (KUANTAN) SDN BHD(191606 U)Lot 5, Jalan Industri Semambu
2Kawasan Perindustrian Semambu25350 KuantanPahang Darul Makmur,
MalaysiaTel: +609 568 7550Fax: +609 568 7553Email:
[email protected]
Cert. No. KLR0404021
MS ISO/IEC 17021:2011OSH 18072007 CB 02
Cert. No. MY12/00913.01
MS ISO/IEC 17021:2011EMS 12072004 CB 03
SG12/03893.01 MY12/00912.01
PANTECH STEEL INDUSTRIES SDN BHD(509731-A)
ManufacturerLot 13258 & 13259Jalan Haji Abdul MananOff Jalan
Meru42200 KaparSelangor Darul Ehsan, MalaysiaTel: +603 3393
1633Fax: +603 3392 8966Email: [email protected]
PANTECH STAINLESS & ALLOY INDUSTRIES SDN BHD(733428-W)
ManufacturerPTD 204334Jalan Platinum UtamaKawasan Perindustrian
Pasir GudangZon 12B81700 Pasir GudangJohor Darul Takzim,
MalaysiaTel: +607 251 8888Fax:+607 251 9999Email:
[email protected]
NAUTIC STEELS LIMITED,UNITED KINGDOM(02302004)
ManufacturerNautic House, Claymore,Tame Valley Industrial
Estate,Tamworth, Staffordshire,England, B77 5DQ
Cert. No. KLR0403926
Cert. No. KLR6012814
Cert. No. LRQ 0921634
PPA PP
ISO 9001 : 2008Cert No: SNG 6003354
ISO 14001 : 2004Cert No: SNG 6019422
ISO 18001 : 2007Cert No: SNG 6019422
-
Pantech Group Holdings Berhad (733607-W)2
Financial HighlightsCorporate InformationGroup
StructureDirectors’ ProfileExecutive Chairman’s StatementManagement
Review of Operations
and Financial ResultsCorporate Social Responsibility
ActivitiesCorporate EventsAudit Committee ReportStatement on Risk
Management
and Internal Control
010203040609
12141619
c o n t e n t sCorporate Governance StatementAdditional
Compliance StatementFinancial StatementsList of PropertiesNotice of
Eighth Annual General MeetingAnalysis of ShareholdingsAnalysis of
ICULS HoldingsAnalysis of Warrant HoldingsProxy Form
212832
132133137140142 FYE
28 Feb 2014
575,61096,27275,22754,63754,638
113,909426,229690,465426,229195,915
10.028.53
24,9164.400.75
Ringgit Malaysia (RM'000)
RevenueEBITDAProfit Before TaxProfit After TaxProfit
Attributable to ShareholdersPaid-Up CapitalShareholders'
EquityTotal AssetsTotal Net Tangible AssetsTotal BorrowingsBasic
Earnings Per RM0.20 Share (sen)Diluted Earnings Per RM0.20 Share
(sen)Total Net Dividend DeclaredNet Dividend Per RM0.20 Share
(sen)Net Tangible Assets Per Share (RM)
GROUP FIVE-YEAR SUMMARY
PBT margin improved to
13.06%
NTA stands at
RM426.23 milliontranslating to a
NTA/share of RM0.75
Total net dividend declared for FYE2014 is
RM24.92 million,representing
45% of our PAT
Rev
enue
RM
’000
401,578
10
335,779
11
434,604
12
635,663
13
575,610
14
Pro
fit
Aft
er T
axat
ion
RM
’000
50,871
10
28,980
11
34,223
12
56,063
13
54,637
14
Ear
ning
per
Sha
rese
n
13.60
10
6.45
11
7.60
12
11.73
13
10.02
14
Sha
reho
lder
s’ E
qui
tyR
M’0
00
232,891
10
317,268
11
337,230
12
377,019
13
426,229
14
FYE28 Feb 2010
401,57878,02366,75850,87150,87175,000
232,891390,775232,891119,560
13.60N/A
15,7164.200.62
FYE28 Feb 2011
335,77948,19137,36928,98028,99490,387
317,268522,054317,268141,657
6.456.15
13,7223.300.70
FYE29 Feb 2012
434,60462,90547,19834,22334,23290,530
337,230596,573337,230192,770
7.605.91
15,7283.500.74
FYE28 Feb 2013
635,663102,115
80,25556,06356,066
102,201377,019699,222377,019256,455
11.739.19
23,7954.600.74
-
Financial HighlightsCorporate InformationGroup
StructureDirectors’ ProfileExecutive Chairman’s StatementManagement
Review of Operations
and Financial ResultsCorporate Social Responsibility
ActivitiesCorporate EventsAudit Committee ReportStatement on Risk
Management
and Internal Control
010203040609
12141619
c o n t e n t sCorporate Governance StatementAdditional
Compliance StatementFinancial StatementsList of PropertiesNotice of
Eighth Annual General MeetingAnalysis of ShareholdingsAnalysis of
ICULS HoldingsAnalysis of Warrant HoldingsProxy Form
212832
132133137140142 FYE
28 Feb 2014
575,61096,27275,22754,63754,638
113,909426,229690,465426,229195,915
10.028.53
24,9164.400.75
Ringgit Malaysia (RM'000)
RevenueEBITDAProfit Before TaxProfit After TaxProfit
Attributable to ShareholdersPaid-Up CapitalShareholders'
EquityTotal AssetsTotal Net Tangible AssetsTotal BorrowingsBasic
Earnings Per RM0.20 Share (sen)Diluted Earnings Per RM0.20 Share
(sen)Total Net Dividend DeclaredNet Dividend Per RM0.20 Share
(sen)Net Tangible Assets Per Share (RM)
GROUP FIVE-YEAR SUMMARY
PBT margin improved to
13.06%
NTA stands at
RM426.23 milliontranslating to a
NTA/share of RM0.75
Total net dividend declared for FYE2014 is
RM24.92 million,representing
45% of our PAT
Rev
enue
RM
’000
401,578
10
335,779
11
434,604
12
635,663
13
575,610
14
Pro
fit
Aft
er T
axat
ion
RM
’000
50,871
10
28,980
11
34,223
12
56,063
13
54,637
14
Ear
ning
per
Sha
rese
n
13.60
10
6.45
11
7.60
12
11.73
13
10.02
14
Sha
reho
lder
s’ E
qui
tyR
M’0
00
232,891
10
317,268
11
337,230
12
377,019
13
426,229
14
FYE28 Feb 2010
401,57878,02366,75850,87150,87175,000
232,891390,775232,891119,560
13.60N/A
15,7164.200.62
FYE28 Feb 2011
335,77948,19137,36928,98028,99490,387
317,268522,054317,268141,657
6.456.15
13,7223.300.70
FYE29 Feb 2012
434,60462,90547,19834,22334,23290,530
337,230596,573337,230192,770
7.605.91
15,7283.500.74
FYE28 Feb 2013
635,663102,11580,25556,06356,066
102,201377,019699,222377,019256,455
11.739.19
23,7954.600.74
FINANCIAL HIGHLIGHTS
1annual report 2014
-
BOARD OF DIRECTORS
Dato’ Chew Ting LengExecutive Chairman / Group Managing
Director
Dato’ Goh Teoh KeanGroup Deputy Managing Director
Mr. Tan Ang AngExecutive Director
Mr. To Tai WaiExecutive Director
Mr. Tan Sui HinSenior Independent Non-Executive Director
Mr. Loh Wei TakIndependent Non-Executive Director
Tuan Haji Yusoff Bin MohamedIndependent Non-Executive
Director
Datuk Faizoull Bin AhmadNon-Independent Non-Executive
Director
Ms. Ng Lee LeeExecutive Director
SHARE REGISTRAR
MEGA CORPORATE SERVICES SDN. BHD. (Company No.: 187984-H)Level
15-2, Bangunan Faber Imperial CourtJalan Sultan Ismail 50250 Kuala
LumpurTel No. : 03-2692 4271Fax No. : 03-2732 5388
PRINCIPAL BANKERS
AmBank (M) BerhadAmIslamic Bank BerhadCIMB Bank BerhadCIMB
Islamic Bank BerhadCitibank BerhadHong Leong Bank BerhadHong Leong
Islamic Bank BerhadHSBC Amanah Malaysia BerhadHSBC Bank Malaysia
BerhadHSBC Bank PlcOCBC Bank (Malaysia) BerhadThe Bank of Nova
Scotia BerhadUnited Overseas Bank LimitedUnited Overseas Bank
(Malaysia) Berhad
SOLICITORS
Adi Radlan & Co.Ng Kee Chong & Co.
AUDITORS
Messrs SJ Grant Thornton(Member of Grant Thornton International
Ltd)Chartered Accountants Unit 29-08, Level 29, Mailbox 227Menara
Landmark12, Jalan Ngee Heng80000 Johor Bahru
STOCK EXCHANGE LISTING
Main Market Bursa Malaysia Securities Berhad
STOCK CODE: 5125
AUDIT COMMITTEE
ChairmanMr. Tan Sui Hin
MembersMr. Loh Wei TakTuan Haji Yusoff Bin Mohamed
REMUNERATION COMMITTEE
ChairmanTuan Haji Yusoff Bin Mohamed
MembersDato’ Chew Ting LengMr. Tan Sui Hin
NOMINATION COMMITTEE
ChairmanMr. Loh Wei Tak
Members Mr. Tan Sui HinTuan Haji Yusoff Bin Mohamed
COMPANY SECRETARIES
Ms. Lim Seck Wah (MAICSA NO.: 0799845)Ms. Liang Siew Ching
(MAICSA NO.: 7000168)
REGISTERED OFFICE
Level 15-2, Bangunan Faber Imperial CourtJalan Sultan Ismail
50250 Kuala LumpurTel : 03-2692 4271Fax : 03-2732 5388
Pantech Steel Industries Sdn. Bhd.
Pantech Stainless & Alloy Industries Sdn. Bhd.
Panaflo Controls Pte. Ltd.
JC Flow Controls Pte. Ltd.
Nautic Steels Sdn. Bhd.
Pantech International (KSA) Sdn. Bhd.
Nautic Steels (Holdings) Limited
Nautic Steels Limited
Pantech Corporation Sdn. Bhd.100%
100%
100%
100%
100%
100%
90%
100%
100%
70%
100%
40%
Pantech (Kuantan) Sdn. Bhd.
Pantech Realty Sdn. Bhd. (Formerly known as Jayee Holdings Sdn.
Bhd.)
Tuah Nusa Sdn. Bhd.
Pantech Group Holdings Berhad (733607-W)2
CORPORATE INFORMATION
-
BOARD OF DIRECTORS
Dato’ Chew Ting LengExecutive Chairman / Group Managing
Director
Dato’ Goh Teoh KeanGroup Deputy Managing Director
Mr. Tan Ang AngExecutive Director
Mr. To Tai WaiExecutive Director
Mr. Tan Sui HinSenior Independent Non-Executive Director
Mr. Loh Wei TakIndependent Non-Executive Director
Tuan Haji Yusoff Bin MohamedIndependent Non-Executive
Director
Datuk Faizoull Bin AhmadNon-Independent Non-Executive
Director
Ms. Ng Lee LeeExecutive Director
SHARE REGISTRAR
MEGA CORPORATE SERVICES SDN. BHD. (Company No.: 187984-H)Level
15-2, Bangunan Faber Imperial CourtJalan Sultan Ismail 50250 Kuala
LumpurTel No. : 03-2692 4271Fax No. : 03-2732 5388
PRINCIPAL BANKERS
AmBank (M) BerhadAmIslamic Bank BerhadCIMB Bank BerhadCIMB
Islamic Bank BerhadCitibank BerhadHong Leong Bank BerhadHong Leong
Islamic Bank BerhadHSBC Amanah Malaysia BerhadHSBC Bank Malaysia
BerhadHSBC Bank PlcOCBC Bank (Malaysia) BerhadThe Bank of Nova
Scotia BerhadUnited Overseas Bank LimitedUnited Overseas Bank
(Malaysia) Berhad
SOLICITORS
Adi Radlan & Co.Ng Kee Chong & Co.
AUDITORS
Messrs SJ Grant Thornton(Member of Grant Thornton International
Ltd)Chartered Accountants Unit 29-08, Level 29, Mailbox 227Menara
Landmark12, Jalan Ngee Heng80000 Johor Bahru
STOCK EXCHANGE LISTING
Main Market Bursa Malaysia Securities Berhad
STOCK CODE: 5125
AUDIT COMMITTEE
ChairmanMr. Tan Sui Hin
MembersMr. Loh Wei TakTuan Haji Yusoff Bin Mohamed
REMUNERATION COMMITTEE
ChairmanTuan Haji Yusoff Bin Mohamed
MembersDato’ Chew Ting LengMr. Tan Sui Hin
NOMINATION COMMITTEE
ChairmanMr. Loh Wei Tak
Members Mr. Tan Sui HinTuan Haji Yusoff Bin Mohamed
COMPANY SECRETARIES
Ms. Lim Seck Wah (MAICSA NO.: 0799845)Ms. Liang Siew Ching
(MAICSA NO.: 7000168)
REGISTERED OFFICE
Level 15-2, Bangunan Faber Imperial CourtJalan Sultan Ismail
50250 Kuala LumpurTel : 03-2692 4271Fax : 03-2732 5388
Pantech Steel Industries Sdn. Bhd.
Pantech Stainless & Alloy Industries Sdn. Bhd.
Panaflo Controls Pte. Ltd.
JC Flow Controls Pte. Ltd.
Nautic Steels Sdn. Bhd.
Pantech International (KSA) Sdn. Bhd.
Nautic Steels (Holdings) Limited
Nautic Steels Limited
Pantech Corporation Sdn. Bhd.100%
100%
100%
100%
100%
100%
90%
100%
100%
70%
100%
40%
Pantech (Kuantan) Sdn. Bhd.
Pantech Realty Sdn. Bhd. (Formerly known as Jayee Holdings Sdn.
Bhd.)
Tuah Nusa Sdn. Bhd.
3annual report 2014
GROUP STRUCTURE
-
Pantech Group Holdings Berhad (733607-W)4
DATO’ CHEW TING LENGExecutive Chairman / Group Managing
Director
Dato’ Chew Ting Leng, Malaysian, aged 59, is one of the
co-founders of the Group. He has more than 30 years of experience
in the PVF solutions industries. He was appointed as Group Managing
Director and Executive Chairman of Pantech Group Holdings Berhad
(PGHB) on 11 November 2006 and 13 November 2006 respectively.
He is a member in the Remuneration Committee.
He does not hold any directorships in any other public
companies.
DATO’ GOH TEOH KEANGroup Deputy Managing Director
Dato’ Goh Teoh Kean, Malaysian, aged 58, graduated with Diploma
in Commerce (Financial Accounting) from Tunku Abdul Rahman
College.
He has more than 20 years of experience in the PVF solutions
industry. He is one of the co-founders of the Group and was
appointed as the Group Deputy Managing Director on 11 November
2006. He is responsible for the financial functions of the
Group.
He does not hold any directorships in any other public
companies.
TAN ANG ANGExecutive Director
Mr Adrian Tan, Malaysian, aged 58, was appointed as the
Executive Director on 11 November 2006. He is responsible for the
overall operation and performance of the Group’s manufacturing
business and is also the Managing Director of Pantech Steel
Industries Sdn. Bhd., Pantech Stainless & Alloy Industries Sdn.
Bhd. and Nautic Steels Limited. He obtained his professional
Diploma from the Chartered Institute of Marketing in 1989.
He does not hold any directorships in any other public
companies.
TO TAI WAIExecutive Director
Mr David To, Malaysian, aged 43, was appointed as the Executive
Director on 11 November 2006. He started his career in Pantech
Corporation Sdn. Bhd. since 1989 and has more than 20 years of
experience in the PVF solution industries. He is primarily
responsible for the domestic, international and project sales
activities of the Group’s trading division and trading operation in
Malaysia.
He does not hold any directorships in any other public
companies.
NG LEE LEEExecutive Director
Ms Ng Lee Lee, Malaysian, aged 47, was appointed as the
Executive Director on 8 May 2013. She started her career in Pantech
Corporation Sdn. Bhd., since 1990. She is primarily responsible for
the human resources, administration and project sales division.
She does not hold any directorships in any other public
companies.
TAN SUI HINSenior Independent Non-Executive Director
Mr Tan Sui Hin, Malaysian, aged 64, was appointed as an
Independent Non-Executive Director on 30 November 2006. He
graduated with a Diploma in Mechanical Engineering from Ungku Omar
Polytechnic in 1971. He has more than 35 years of experience in the
manufacturing and building engineering field.
He was appointed the Senior Independent Director with effective
from 19 June 2014.
He is the Chairman of the Audit Committee and a member of both
the Nomination and Remuneration Committees.
He does not hold any directorships in any other public
companies.
DIRECTORS’ PROFILE
-
5annual report 2014
LOH WEI TAKIndependent Non-Executive Director
Mr Loh Wei Tak, Malaysian, aged 41, was appointed as an
Independent Non-Executive Director on 30 November 2006. He is a
qualified accountant and a member of the Malaysian Institute of
Accountants. He completed his Bachelor of Business Degree (Majoring
in Accounting) from Monash University, Melbourne, Australia in 1994
and was admitted to Certified Practicing Accountant from Australia
in 1998. In 2000, he was admitted as a Chartered Accountant to the
Malaysian Institute of Accountants.
He is the Chairman of the Nomination Committee and member of the
Audit Committee.
He does not hold any directorships in any other public
companies.
TUAN HAJI YUSOFF BIN MOHAMEDIndependent Non-Executive
Director
Tuan Haji Yusoff Bin Mohamed, Malaysian, aged 63, was appointed
as an Independent Non-Executive Director on 10 August 2007. He
graduated from University Kebangsaan Malaysia with a Bachelor
Degree in Economics (Hons).
He is the Chairman of the Remuneration Committee and a member of
both the Audit and Nomination Committees.
He does not hold any directorships in any other public
companies.
DATUK FAIZOULL BIN AHMADNon-Independent Non-Executive
Director
Datuk Faizoull Bin Ahmad, Malaysian, aged 54, was appointed as a
Non-Independent Non-Executive Director on 11 June 2013. He
graduated from Virginia Commonwealth University, United States with
a Master in Public Administration.
He joined FELDA as an Administrative Officer from 1986 until
2003. Subsequently he was promoted to Assistant General Manager,
FELDA Wilayah Persekutuan in 2003 and General Manager, FELDA
Wilayah Persekutuan in 2005.
He was promoted as Director, Department of Innovation and
Development for new generation, FELDA in 2010. He relinquished
position as Deputy Director General (Community Development) and
assumed the position of Director General of FELDA since 2011 until
to date.
He currently sits on the Board of Felda Global Ventures Holdings
Berhad, MSM Malaysia Holdings Berhad and Iris Corporation Berhad,
all listed on Bursa Malaysia Securities Berhad.
OTHER INFORMATION:-
Directors Shareholdings
Details of Directors’ Shareholdings in the Company are as
disclosed on page 34 of the Annual Report 2014.
Family relationship with Directors and/or Major Shareholders
Dato’ Chew Ting Leng and his spouse, Datin Shum Kah Lin are
substantial shareholders of Pantech Group Holdings Berhad (“PGHB”)
by virtue of their substantial shareholdings in CTL Capital Holding
Sdn. Bhd. pursuant to Section 6A of the Companies Act 1965.
Dato’ Goh Teoh Kean and his spouse, Datin Lee Sock Kee are
substantial shareholders of PGHB by virtue of their substantial
shareholdings in GL Management Agency Sdn. Bhd. pursuant to Section
6A of the Companies Act 1965.
Conflict of Interest
All Directors have no family relationship with each other or
major shareholders of PGHB. They have no conflict of interest with
PGHB.
Conviction of Offences
All Directors have no convictions of offences within the past 10
years save for traffic offences, if any.
Attendance at Board Meetings
The attendance of the Directors is disclosed in the Corporate
Governance Statement on page 24 of the Annual Report 2014.
DIRECTORS’ PROFILEcont’d
-
Dear Shareholders,
It is once again my pleasant duty to report the performance of
Pantech Group Holdings Berhad. The year 2013 was a year of
hesitancy among numerous companies, where a more cautious approach
was adopted.
Pantech Group Holdings Berhad (733607-W)6
EXECUTIVE CHAIRMAN’S STATEMENT
-
7annual report 2014
EXECUTIVE CHAIRMAN’S STATEMENTcont’d
The quality of our products have proven itself as attested by
the oil and gas projects entrusted to us, the approvals by the
world’s leading oil and gas companies, and certifications we
earned. Going forward, we will continue to serve the oil and gas
sector regardless whether it is marine, onshore, offshore,
upstream, midstream or downstream. Our strategy is to be
well-placed to meet any piping needs of this industry.
Malaysia being our main base, continued to be our main revenue
contributor, accounting for 51% of Group revenue. This was lower
than the 60% recorded in FY2013 due to a sluggish oil and gas
project implementation domestically. To counter this, the Trading
Division focussed on other available projects.
Our footprint is now in 60 countries globally, in countries in
the Americas, Europe including the Scandinavian nations, Africa,
Middle East, Central Asia and Asia, to the Pacific countries.
The new head office completed ahead of schedule and the shift to
the singular address took place in September 2013. Operating from a
site where trading, manufacturing, warehousing and corporate
administration are now integrated has provided Pantech Group
improved management over overall operations. Planning ahead,
Pantech Group holds a land bank of 7 acres on this same site for
future expansion.
Pantech Group has prepared ahead for the Goods and Services Tax
(GST) implementation next year by upgrading our accounting
software, including extensive groundwork that will ready us to
comply with the GST requirements when the time comes.
Pantech Group has been building strength on our foundational
capability of being a One Stop Center for pipes, valves and
fittings to the oil and gas industry. To this end, we have enlarged
our expertise and experience to supply to onshore, offshore and
subsea requirements. From carbon steel fittings to high frequency
induction long bends, and now from stainless steel pipes to
fittings, and various Nickel Alloy fittings, Pantech Group is
consolidating on the position to supply with shortest turnaround
time as possible. Our inventory of items stood at 30,000 items, and
value-wise, comparable at RM251.20 million as at 28 February 2014
to RM259.20 million as at 28 February 2013.
For the financial year ended 28 February 2014, Pantech Group
registered a net profit of RM54.64 million on the back of RM575.61
million revenue. This revenue was RM60.05 million year-on-year
lower. However, the net profit was comparable to the RM56.06
million net profit registered in the preceding year. This
translated to an improvement in net profit margin from 8.8% in the
financial year before to 9.5% in this financial year.
This margin improvement was due to the strategy to move towards
higher value niche products and also progress in our endeavour to
achieve operational excellence; increasing productivity and
efficiency while keeping a tight reign on cost and expenses.
Our business growth is linked closely to that of the oil and gas
industry. The weaker domestic demand from the oil and gas sector
which saw slower project execution in turn reduced the demand for
piping solutions. This resulted in our Trading Division registering
lower than expected revenue. The Trading Division accounted for
53.8% of our FY2014 revenue.
The easing on the trading front was slightly offset by the
increased demands our manufactured products. The Manufacturing
Division which has 3 plants - located in Pasir Gudang and Klang in
Malaysia and Tamworth in United Kingdom - accounted for 46.2% of
FY2014 revenue. This Trading:Manufacturing revenue ratio of 54:46
in FY2014 as compared to 60:40 in FY2013, moved towards an increase
in manufacturing contribution, and is in line with Pantech Group’s
strategy of achieving 50:50 revenue ratio by 2015.
Most of Pantech Group’s customers are in the oil and gas
business. As per the years before, this economic driver sector was
our main revenue contributor, and we envision this trend to
continue for the foreseeable future. 66% of FY2014 revenue came
from the oil and gas sector.
-
Pantech Group Holdings Berhad (733607-W)8
EXECUTIVE CHAIRMAN’S STATEMENTcont’d
Our focus is to develop the core competencies of Pantech Group.
Our established brand name is an asset which we will reinforce as
we seek to make deeper inroads into our core industry and
geographical markets. With demand for fuel as the main energy
source remaining unabated, we are confident that the demand for our
pipes, valves and fittings as well as services will remain. We are
constantly strengthening ourselves to meet the evolving business
environment which exacts high standards and precision at
competitive pricing. It is by having a finger on the pulse of
development that we can meet these market demands and ensure the
Group’s continued profitability for loyal shareholders.
Rewarding shareholders for the support and loyalty has been a
belief that Pantech Group practise since our listing in 2007. For
FY2014, the total dividend payout will come up to RM24.92 million
or 45% of our total net profit for the year, should the proposed
final dividend of 1.00 sen be approved by our loyal shareholders.
Prior to this, Pantech Group has paid RM19.2 million in 3 single
tier interim dividends in October 2013, and January and April
2014.
CORPORATE GOVERNANCE
Doing business with integrity and the ethical way is a core
value that we hold close. We believe in mutual respect with our
customers and business partners, and building trust by providing
our utmost best in products and services in our dealings. We
consciously build the Pantech brand on reliability on our word,
character, ability, strength and truth of our business. These are
values that transcend any product or service we offer.
Page 21 to 27 details our corporate governance statement and
reports.
ACKNOWLEDGEMENTS
I would like to record my deepest appreciation to the
shareholders, board of directors, management, staff, customers and
business partners of Pantech Group for another year of strong
belief and unwavering support. The progress of Pantech Group is
without doubt powered by each and every one of you who have the
interest of the group at heart.
The oil and gas sector is one of the National Key Economic Areas
under the Economic Transformation Programme which has been
identified to fuel Malaysia’s growth. The awarding of production
sharing contract by the national oil and gas company, as well as
the pace pick-up in the development of RAPID are all positive
factors for Pantech Group. We will continue to work hard to grow
the group and deliver value to shareholders.
Dato’ Chew Ting Leng (Jimmy)Executive Chairman
-
9annual report 2014
MANAGEMENT REVIEW OF OPERATIONS AND FINANCIAL RESULTS
FINANCIAL
Revenue contribution from the trading and manufacturing
divisions drew closer to the targeted 50:50 by 2015 ratio. The
Trading Division recorded a revenue of RM309.96 million or 53.8% of
the total revenue for FY2014. Weaker local sales demand translated
into a 19% lower segmental revenue as compared to the last
financial year.
The Manufacturing Division, on the other hand, recorded RM265.65
million in revenue or 46.2% of the total revenue for FY2014. This
was an increase of 5.8% in segmental revenue vis-a-vis FY2013.
Overall, manufacturing experienced an increase in local and export
demand last year and an expansion in product range. Pantech Group
is pleased to report that the Manufacturing Division was able to
increase output from all our manufacturing plants to meet this
demand and translate them into sales.
The revenue contribution quantum from our manufacturing entities
in Malaysia and the United Kingdom was 80% and 20% respectively.
This is in line with expectation where the Malaysian manufacturing
operation remains the main revenue driver in the manufacturing
division. Going forward, we anticipate the Malaysian manufacturing
companies to continue to lead in Pantech Group’s manufacturing
division.
In terms of profitability, the segment profit before finance
cost and interest income for manufacturing was higher at 17.5% this
year as compared to 11.5% in FY2013 due to better product mix and
positive contribution from Pantech Stainless & Alloy Industries
Sdn. Bhd. (“PSA”). Based on our knowledge of the industry, the
Group moved the production focus towards outputting more added
value products such as niche fittings and certain types of fittings
that command higher margins due to its technicalities and
specialisation needs.
One of our key focuses as outlined prior to this, is to meet the
market needs for niche products. To this end, Pantech Steel
Industries Sdn. Bhd. (“PSI”) has done well. The strategy to move to
niche products bore results as reflected in the increase in profit
contribution from this manufacturing arm.
Going forward in FY2015, the Group is looking forward to an
increased positive contribution from PSA which turned black in
FY2014. This optimism is buoyed by production focus which now
includes stainless steel fittings in addition to stainless steel
pipes. This re-balancing of stainless steel pipes with stainless
steel fittings production diminishes the recent outcome of the
anti-dumping suit by International Trade Administration of the
Department of Commerce of the United States of America where
exports of welded stainless steel pipes from Malaysia, Thailand and
Vietnam are now subjected to anti-dumping duty.
PSA which started with stainless steel pipes production in 2011
is today seeing 15% of its production dedicated to the higher value
items of stainless steel fittings. PSA’s fittings are also finding
excellent market acceptance overseas - 70% of its production are
exported. In FY2013, only 40% of its fittings are exported. These
developments are encouraging indeed after the steep learning curve
that PSA encountered in its first two years of operation.
Overall, the Group recorded a paradoxical but positive outcome
of comparable profit on a lower revenue. The Profit Before Tax
(PBT) margin improved from 12.63% in FY2013 to 13.06% in FY2014 due
to the niche product offerings by PSI and boost from more sales of
PSA’s fittings. This resulted in the Group posting a RM54.64
million net profit, which was RM1.4 million lower than FY2013 net
profit despite the 9.4% or RM60 million drop in revenue.
The financial period of 1 March 2013 to 28 February 2014 was
period of executing strategies for Pantech Group, which featured
the move to the new corporate head office in September 2013.
Pantech Group’s Manufacturing Division saw increased demand for
the diversified fittings range, while the Trading Division
experienced a slower demand on the domestic front due to tender
reviews by oil and gas players. The strategy set two years ago to
balance trading and manufacturing contributions bore fruit and
helped put the Group business on an even keel and finished the
financial year on a strong profit note. Pantech Group is looking
forward to another year of sustained profitability despite
anticipation of challenging environments of cost scrutiny and
possible delays in projects in the oil and gas industry.
-
Pantech Group Holdings Berhad (733607-W)10
MANAGEMENT REVIEW OF OPERATIONS AND FINANCIAL RESULTScont’d
The stringent cost control measures adopted at the beginning of
2012 enabled Pantech Group to reign in expenses. FY2014 experienced
the full impact of the minimum wage policy and we are pleased to
report that Pantech Group managed to keep the cost of labour within
expectations. Finance cost saw a reduction of approximately RM2.2
million while administration expenses went down by approximately
RM45,000.
We will continue to strive for Operational Excellence even more
so now that trading, manufacturing, warehousing and corporate
office are integrated onto a single address in Zone 12B in Pasir
Gudang.
The gearing level of the Group as at 28 February 2014 was 0.46
as compared to 0.68 as at the end of the last financial year. By
utilising on hand working capital cash, we were able to reduce the
working capital borrowings and this resulted in this lower
gearing.
As a Group, managing our working capital efficiently to maintain
a healthy cash flow is an important aspect of our financial
management. This effort has enabled us to improve our financial
performance such as reflected in the reduced interest cost among
others. We are cognisant of the profound need to closely monitor
our financial strength to be in the position to capitalise on
opportunities that might arise.
Sharing our wealth with shareholders has always been a mainstay
of our approach towards business. To this end, Pantech Group plans
to pay out a total of 4.40 sen per ordinary share for FY2014. Of
this, 3.40 sen has been paid out in 3 tiers throughout the
financial year:
- The first interim dividend of 1.20 sen for every RM0.20
ordinary share was announced on 24 July 2013 and paid out on 22
October 2013.
- The second interim dividend of 1.20 sen for every RM0.20
ordinary share was announced on 23 October 2013 and paid out on 16
January 2014.
- The third interim dividend of 1.00 sen for every RM0.20
ordinary share was announced on 22 January 2014 and paid out on 16
April 2014.
The final single tier dividend of 1.00 sen per ordinary share
has been proposed and is subject to shareholders’ approval at the
Eighth Annual General Meeting on 28 August 2014. Upon approval, the
total dividend payout will stand at RM24.92 million or 45% of the
Group’s net profit. Whilst Pantech Group does not have an official
dividend policy, track record shows that we have consistently
rewarded loyal shareholders who put their trust over the years with
us with a dividend payout averaging above 40%.
CAPACITIES AND MANUFACTURING
Increasing production capacity and outputting the right product
mix to meet market demands are the current priorities at our
manufacturing plants. At a total combined capacity of 36,200 metric
tonnes per annum as at 28 February 2014, Pantech Group has
increased capacity by 2,700 metric tonnes per annum. The three
manufacturing plants of PSI, PSA and Nautic Steels Limited are
running at optimised 88%, 80% and 75% output respectively.
The PSI plant in Klang which produces carbon steel fittings and
high frequency induction long bends have ramped up enhancements to
its production and productivity to record 2,500 metric tonnes
increase in capacity. PSI’s capacity now stands at 21,000 metric
tonnes per annum.
Meanwhile at PSA, the production now outputs a good mix of
3/8-inch to 16-inch stainless steel pipes and 1/2-inch to 12-inch
stainless steel fittings. Of PSA’s 14,400 metric tonnes capacity,
15% are dedicated to production of high value stainless steel
fittings.
The fittings production capability at Nautic was also
rejuvenated via the installation of cutting-edge machine with
advanced technologies. The capacity expansion at Nautic took place
as planned with operations at the second site commencing and new
machine commissioned in October 2013 to increase output from 600
metric tonnes last year to 800 metric tonnes per annum.
As we near our target of manufacturing playing an equal role
with trading in Pantech Group’s growth, we will expand our capacity
in accordance with market developments. Continuously meeting both
upstream and downstream piping solutions needs of the oil and gas
industry - be it from our manufacturing or our trading division -
is our main aim.
MARKET
Our home base, Malaysia, continues to be a key market focus.
However, with footprint in 60 countries, our approach remains to
build firm market presence in all these countries. Pantech Group is
continuously strengthening the relationship with our customers in
these countries, and growing a larger footprint within these
markets. The deeper market knowledge arising from these bonds
contributes to us reading the market product needs and potential
more accurately, and is instrumental in shaping our development to
provide solutions that meet the needs of each market.
-
11annual report 2014
MANAGEMENT REVIEW OF OPERATIONS AND FINANCIAL RESULTScont’d
Whilst Pantech products are now used in all the continents of
the world except Antartica, both North and South America are our
most active foreign markets. Our export to South America in
particular has been growing. We are confident that the Pantech
brand will continue to grow recognition of as more oil and gas
giants there become acquainted with our quality and ability to
supply solutions that meet their stringent requirements.
Upholding the effort to create a brand presence in the market
that matters, Pantech Group continued to participate in relevant
oil and gas exhibitions in Malaysia and overseas. Of these, there
were two notable exhibitions that were new to Pantech Group - an
engineering exhibition in Myanmar and a stainless steel exhibition
in The Netherlands. These marketing events serve multiple purposes.
In addition to sourcing for new leads, the exhibitions provided a
good avenue for Pantech Group to have a finger on the pulse of the
latest developments in the industry and country or region, while
building and strengthening existing relationship.
Pantech Group was present in 4 oil and gas exhibitions in the
financial year under review:
- 2nd Sabah Oil & Gas Conference (SOGCE) in Kota Kinabalu,
Sabah, Malaysia on 16 - 17 April 2013
- 14th Oil, Gas & Petrochemical Engineering Exhibition (OGA
2013) in Kuala Lumpur, Malaysia on 5 - 7 June 2013
- Global Engineering Myanmar 2013 in Yangon, Myanmar on 13 - 15
June 2013
- Stainless Steel World 2013 in Maastrict, The Netherlands on 12
- 14 November 2013
OUTLOOK AND CHALLENGES
Pantech Group is fully engaged in optimising the strategies
which are now in progress. In Malaysia, the re-energising of the
Refinery and Petrochemical Integrated Development (RAPID) project
augurs well for Pantech Group. Pantech Group is optimistic of being
one of the beneficiaries of the spillovers from the project which
is located just down the road from our integrated operations in
Pasir Gudang, Johor.
The business environment is also becoming more uncertain and
competitive. The market is watching the developing geopolitical
crisis in particular countries with oil and gas interest, with
increasing trepidation. While closer back home, the influx of
cheaper products have caused some customers to be excited. In this
aspect, our established track record as a total solutions provider
that has shored up years of technical know-how has given us the
edge in competitive pitch. With Pantech Group’s ability to provide
complete systems, we are increasingly being depended on for our
project management capability.
Pantech Group will continue to enhance our reputation as a
specialist manufacturer of niche products and grow our expertise
and name in project management in the Trading Division. Our goal is
to reinforce our One Stop Pipes, Valves and Fittings solutions
provider status as we remain resolute to increase revenue and
sustain profitability for shareholders.
-
Good governance, ethical practices and responsible citizenship
hold the key to the future of businesses today.
Pantech Group Holdings Berhad (733607-W)12
Business is powered by people. A good working relationship with
employees is critical to the success of any business. As such, our
Corporate Social Responsibility (CSR) trust is centred on the
welfare of the employees and the society.
WORKPLACE
We believe that the treatment of our staff reflects the
principles valued in the Group. In 2013, the principles valued
revolved around workplace safety and employee recognition.
Safety
Under Workplace Safety focus, fire drill exercises were held in
Pantech Steel Industries Sdn. Bhd. (“PSI”), Pantech Corporation
Sdn. Bhd. (“PCSB”) and Pantech Stainless & Alloy Industries
Sdn. Bhd. (“PSA”). These activities served as a refresher to train
the staff on how to react to emergencies. A demonstration on the
correct technique of using fire extinguisher was held and the staff
were given the opportunity for hands-on practice.
The fire drill exercises were coupled with elements of first aid
course. This included training in the following: CPR, abdominal
thrust for choking and Automated External Defibrillator (AED) for
sudden cardiac arrest. Learning a systematic approach to dealing
with conditions such as bleeding, burn, shock, fracture, spinal
injuries and other common injuries also formed part of the training
course.
Back-to-school Programme
Support and appreciation were the two concerns of Pantech’s
Workplace Recognition activities. The Back-to-school programme aims
to tackle the financial burden associated with school education. In
Malaysia, every school-going child of Pantech’s staff received a
new school bag and basic stationeries for primary and secondary
school. Pantech Group gave RM100 Tesco vouchers for every primary
school-going child and RM120 for every secondary school-going child
respectively.
CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES
-
Good governance, ethical practices and responsible citizenship
hold the key to the future of businesses today.
13annual report 2014
Establishing healthy relationships
An Annual Dinner where all the staff of PCSB, PSA and Panaflo
Controls Pte. Ltd. (“PNF”) could come together is both
relationship-building and appreciation in nature. Such a night was
held in Johor, where staff located down south gathered and long
service staff of 5 years, 10 years and 15 years received tokens of
appreciation. Likewise, a similar evening in Shah Alam was held for
staff of PSI.
According to the Roman poet Virgil, “the greatest wealth is
health”. To encourage staff to exercise and stay healthy, two
badminton courts and unlimited supply of shuttlecocks were provided
every week for PCSB and PSA employees. This helps to build
teamwork, which leads to good relationship among the staff. As
Pantech Group comprises many different departments, this activity
encourages interactions among people from all departments.
Care for the elderly
The civilization of society is evident in the way we treat our
aged and less privileged. We are pleased that our staff joined
forces with the management to visit and deliver basic food items to
41 folks at Sunrise Care Centre Sdn Bhd in Johor, which is also
better known as Rebina House. After spending time with occupants of
the home, the employees had the pleasure of seeing faces lit up
when RM10 red packets were handed to each of the old folks.
Care for the less fortunate
We believe that everyone is entitled to basic needs. Hence, our
company supports the less fortunate by providing provision to the
underprivileged families and sick children. For instance, PSI aided
the family of a boy born with congenital epilepsy by providing them
with milk powder. In addition, PSI also extended housekeeping
training and basic needs to an underprivileged family with 7
children in Ijok. Pantech Group hopes that our little contributions
can help alleviate their financial burden.
Our aspiration is to foster an environment where employees are
deeply committed and highly motivated as we operate in a society
that cares for the living.
CORPORATE SOCIAL RESPONSIBILITY ACTIVITIEScont’d
-
Stainless Steel World 201312 - 14 November 2013
Maastrict, The Netherlands
Global Engineering Myanmar 201313 - 15 June 2013
Tatmadaw Exhibition Center, Yangon
OTC Asia 2014 (Offshore Technology Conference Asia)
25 - 28 March 2014
Kuala Lumpur Convention Centre, Malaysia
Tube and Wire 2014 7 - 11 April 2014
Fairground Dusseldorf, Germany
Pantech Group Holdings Berhad (733607-W)14
CORPORATE EVENTS
-
Stainless Steel World 201312 - 14 November 2013
Maastrict, The Netherlands
Global Engineering Myanmar 201313 - 15 June 2013
Tatmadaw Exhibition Center, Yangon
OTC Asia 2014 (Offshore Technology Conference Asia)
25 - 28 March 2014
Kuala Lumpur Convention Centre, Malaysia
Tube and Wire 2014 7 - 11 April 2014
Fairground Dusseldorf, Germany
15annual report 2014
CORPORATE EVENTScont’d
-
Pantech Group Holdings Berhad (733607-W)16
The primary objective of the Audit Committee is to assist the
Board in the effective discharge of its fiduciary responsibilities
for corporate governance, financial reporting process and system of
internal control.
The Audit Committee have adopted practices aimed at maintaining
appropriate standards of responsibility, integrity and
accountability to all the Company’s shareholders.
MEMBERSHIP
The Audit Committee is appointed by the Board and comprises
exclusively of Independent Non-Executive Directors:-
Chairman
Mr. Tan Sui Hin : Senior Independent Non-Executive Director
Members
Haji Yusoff Bin Mohamed : Independent Non-Executive DirectorMr.
Loh Wei Tak : Independent Non-Executive Director
AUTHORITY
The Committee shall, in accordance with a procedure to be
determined by the Board and at the cost of the Company:-
a) have authority to investigate any matter within its terms of
reference;
b) have adequate resources and unrestricted access to any
information from both internal and external auditors and all
employees of the Group in performing its duties;
c) have direct communication channels with the external auditors
and person(s) carrying out the internal audit function or
activity;
d) be able to obtain external legal or other independent
professional advice and to invite outsiders with relevant
experience to attend, if necessary; and
e) be able to convene meetings with the external auditors, the
internal auditors or both, excluding the attendance of other
directors and employees of the Company, whenever deemed
necessary.
MEETINGS
The Chairman shall call a meeting of the Audit Committee if a
request is made by any committee member, any Executive Director, or
the external auditors.
A minimum of two members present shall form a quorum provided
both of whom present are independent directors. The Committee shall
meet with the external auditors and/or internal auditors without
the presence of the executive board members at least once a year.
The Company Secretary shall act as Secretary of the Audit Committee
or in her/his absence, another person authorized by the Chairman of
the Audit Committee.
There were five (5) Audit Committee meetings held during the
financial year 2014. The details of attendance of Committee members
are as follows:-
Name of Committee Members Designation Attendance
Mr. Tan Sui Hin Chairman 5/5
Haji Yusoff Bin Mohamed Member 5/5
Mr. Loh Wei Tak Member 4/5
AUDIT COMMITTEE REPORT
-
17annual report 2014
RESPONSIBILITIES AND DUTIES OF THE AUDIT COMMITTEE
The duties and responsibilities of the Committee shall
include:-
a) To review and recommend the appointment of external auditors,
the audit fee and any questions of resignation or dismissal
including the nomination of person or persons as external
auditors;
b) To review with the external auditors, the audit plan and
audit report;
c) To review with the external auditors, their evaluation on the
effectiveness of the system of internal controls;
d) To review the assistance and cooperation given by the
employees of the Company to the external auditors;
e) To review the adequacy of the scope, functions, competency
and adequacy of resources of the internal audit functions and
authority to carry out its work;
f) To review the internal audit programme, processes and
findings of the internal audit processes or investigation
undertaken and whether or not appropriate corrective actions are
taken on the recommendations of the internal audit function;
g) To review the quarterly results and annual financial
statements, prior to their submission for consideration and
approval by the Board of Directors, focusing particularly on:-
(i) changes in or implementation of major new or revised
accounting policies;
(ii) significant and unusual events; and
(iii) compliance with accounting standards and other legal and
regulatory requirements;
h) To review any related party transaction and conflict of
interests situation that may arise within the company or group
including any transaction, procedure or course of conduct that
raises questions of management integrity;
i) To review the competency, professionalism and independency of
the external auditors; and
j) To verify the allocation of options pursuant to a share
scheme for employees at the end of each financial year.
SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE
In line with the Terms of Reference of the Audit Committee, the
following activities were carried out by the Audit Committee during
the financial year ended 28 February 2014 in discharging its
functions and duties:-
a) Reviewed the External Auditors’ scope of work and audit plans
for the financial year under review;
b) Reviewed the results of audit and the audit report;
c) Reviewed and approved the Internal Audit Plan and the
Internal Audit Report;
d) Reviewed the quarterly and annual financial statements of the
Group prior to submission to the Directors for their perusal and
approval. This was to ensure compliance of the financial statements
with the provisions of the Companies Act, 1965, Malaysian Financial
Reporting Standards, International Financial Reporting Standards
and applicable Listing Requirements of Bursa Malaysia Securities
Berhad;
e) Reviewed the unaudited quarterly financial results
announcements and made recommendations to the Board of Directors
for approval; and
f) Considered and recommended to the Board the re-appointment of
External Auditors and their fees.
AUDIT COMMITTEE REPORTcont’d
-
Pantech Group Holdings Berhad (733607-W)18
INTERNAL AUDIT FUNCTION
The Group has outsourced its internal audit function to an
independent professional consulting firm to assist the Audit
Committee in discharging their responsibilities and duties. The
role of the internal audit function is to undertake independent,
regular and systematic reviews of the system of internal controls
so as to provide reasonable assurance that such systems continue to
operate satisfactory and effectively.
The professional fee incurred in respect of the internal audit
function for the financial year ended 28 February 2014 was
RM96,000.00.
The detail of internal audit functions during the period under
review is stated in the Statement on Risk Management and Internal
Control of this Annual Report. During the period under review, the
Internal Auditors carried out the following activities:-
a) Presented and obtained approval from the Audit Committee the
annual internal audit plan, its audit strategy and scope of audit
work;
b) Performed audits according to the annual internal audit plan,
to review the adequacy and effectiveness of the internal control
system, compliance with policies and procedures and reported
ineffective and inadequate controls and made recommendations to
improve their effectiveness; and
c) Performed follow-up reviews in assessing the progress of the
agreed management’s action plans and report to the management and
Audit Committee.
EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”)
The allocations of options were reviewed and verified by the
Audit Committee to ensure compliance with the allocation criteria
determined by the Option Committee and in accordance with the
By-Laws of the ESOS.
ESOS granted to Non-Executive Directors
A breakdown of the options offered to the Non-Executive
Directors pursuant to the ESOS in respect of the financial year
under review are as follows:-
No. of options
No. NamesGranted on 03.03.2010 Exercised
Expired/ Forfeited
Unexercised as at
28.02.2014
1. Tan Sui Hin 250,000 (200,000) - 50,000
2. Haji Yusoff Bin Mohamed 250,000 - - 250,000
3. Loh Wei Tak 250,000 (200,000) - 50,000
ESOS granted to Directors and Senior Management
Pursuant to the Company’s ESOS By-Laws, not more than 50% of the
Company’s shares available under the scheme shall be allocated to
Directors and Senior Management. At the commencement of the scheme
on 3 March 2010, the Company has granted 44.88% of ESOS to its
Directors and senior management staffs.
There is no new option been granted during the financial
year.
AUDIT COMMITTEE REPORTcont’d
-
19annual report 2014
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
The Malaysian Code on Corporate Governance stipulates that the
Board of Directors of a listed company should maintain a sound
system of internal control to safeguard shareholders’ investment
and the Company’s assets. The system of risk management and
internal control covers not only financial controls but operational
and compliance controls as well. This Statement on Risk Management
and Internal Control is made pursuant to paragraph 15.26(b) of the
Main Market Listing Requirements of Bursa Malaysia Securities
Berhad.
Pursuant to Paragraph 15.23 of the Main Market Listing
Requirements of Bursa Malaysia Securities Berhad, the Group has
requested that the external auditors to review this Statement on
Risk Management and Internal Control in accordance with Recommended
Practice Guide (“RPG”) 5 issued by the Malaysian Institute of
Accountants. The Board is pleased to note that external auditors
find this Statement to be consistent with their understanding of
the risk management and internal control processes implemented by
the Group during their review.
BOARD RESPONSIBILITY
The Board acknowledges its overall responsibility for the
Group’s system of risk management and internal control and has in
place an on-going process for identifying, evaluating and
monitoring the significant risks affecting the achievement of its
business objectives and strategies during the financial year and up
to the date of approval of this statement for inclusion in the
annual report. The system is designed to manage rather than
eliminate the risk of failure to achieve business objectives and
strategies, and can only provide reasonable but not absolute
assurance against material misstatement, loss and fraud.
The Board also takes into consideration the need to balance the
business risks and the potential returns to stakeholders in its
daily operations, with the dynamic business climate it operates in.
The Board recognises the need for a concerted effort from the
management, head of department and senior staff members in ensuring
that the integrity, effectiveness and adequacy of the control
mechanism are monitored and maintained throughout the financial
period.
ENTERPRISE RISK MANAGEMENT FRAMEWORK
During the financial year, the Group monitored significant risks
and implement risk mitigation strategies on an ongoing basis
through its Executive Directors, management and Risk Management
Committee (“RMC”) within its risk appetite.
The Board has set up a Risk Management Committee (“RMC”) which
comprises of Executive Directors and Senior Management of the
Group. Executive Directors, senior management personnel and
Departmental Heads are responsible for managing the risks of their
respective business units, operational units and departments.
Significant issues and risks are discussed during Executive Group
Directors Meeting and management meetings which are attended by
Executive Directors and senior management personnel. This process
has been in place during the year under review and up to the date
of approval of this statement for inclusion in the annual
report.
INTERNAL AUDIT FUNCTION
The internal audit function has been outsourced by the Group to
a professional firm, who reports directly to the Audit Committee on
its findings and recommendations for improvements. An internal
audit charter and internal audit plan has been submitted and
approved by the Audit Committee.
For the financial year under review, the internal auditors have
carried out their review according to the approved internal audit
plan. The review covered the assessment on the adequacy and
effectiveness of the Group’s risk management and internal control
system. Upon completion, the internal audit observations,
recommendations and management comments were reported to the Audit
Committee. The Audit Committee reviews internal control matters and
updates the Board on significant issues for the Board’s attention
and action.
Total cost incurred for the internal audit function in respect
of the financial year ended 28 February 2014 was RM96,000.
-
Pantech Group Holdings Berhad (733607-W)20
KEY ELEMENTS OF THE GROUP’S INTERNAL CONTROL SYSTEM
The key elements of the Group’s internal control system comprise
the following:
l Responsibilities of the Board and management are defined to
ensure effective discharge of roles and responsibilities;
l The Board and the Audit Committee meet every quarter to
discuss matter raised by Management and/or Internal Audit on
business and operational matters including potential risks and
control issues;
l The Board has established and documented a Schedule of Matters
Reserved for the Board to facilitate the effective reporting and
operation of the Board at regular Board meeting. Major capital
investment, acquisition, disposals or any other transaction not in
the ordinary course of business exceeding a certain threshold must
be referred to the Board for approval;
l Management reports to the Board on material findings and/or
variances, if any, and the Board will review their implications to
the Group and advise accordingly;
l Annual budgeting process is in place and performance is
monitored on an ongoing basis;
l Senior Management attends Management meetings on a regular
basis to address budgets, operational and financial performance,
business planning, control environment and other key issues;
l Key personnel from respective subsidiaries provide monthly
reports to the corporate office on the subsidiaries’
performance.
l Communication line has been established between subsidiaries,
business units, divisions and employees through internal
memorandums, staff briefings and operational meetings to achieve
the Group’s overall business objectives;
l Close and active involvement of the Executive Directors in the
day-to-day business operations of the Group; and
l Health, Safety and Environmental Committee has been
established in order to review and ensure compliance with
occupational safety and health policies and procedures on a
continuous basis.
CONCLUSION
In reviewing the risk management and internal control system of
the Group, the Board has, through the Audit Committee, received
reports from External Auditors and Internal Auditors in relation to
findings on risk and internal audit control system. The Board has
also received reasonable assurance from the Group Managing Director
and Group Deputy Managing Director that the Group’s risk management
and internal control system is operating adequately and
effectively, in all material respects.
No major weaknesses in internal control were noted that may have
resulted in any material losses, contingencies or uncertainties
that would require disclosure in the Group’s annual report.
The Board is of the opinion that the internal control system in
place is adequate and effective at its current level of operations
and will continuously strive to enhance the Group’s system of risk
management and internal control in safeguarding stakeholders’
interest, shareholders’ investment and Group’s assets.
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROLcont’d
-
21annual report 2014
CORPORATE GOVERNANCE STATEMENT
The Board of Directors (“the Board”) of Pantech Group Holdings
Berhad (“Pantech” or “the Company”) recognises and subscribes to
the importance of the principles and recommendations set out in the
Malaysian Code on Corporate Governance 2012 (“the Code”) as a key
factor towards achieving an optimal governance framework and
process in managing the business and operational activities of the
Company and its subsidiaries (“the Group”).
The Board believes that good corporate governance practices are
pivotal towards enhancing business prosperity and corporate
accountability with the ultimate objective of realizing long-term
shareholder value, whilst taking into account the interests of
other stakeholders. Hence, the Board is fully dedicated to
continuously appraise the Group’s corporate governance practices
and procedures to ensure that the principles and recommendations in
corporate governance are applied and adhered to in the best
interests of the stakeholders.
The Statement below sets out the manner in which the Group has
applied the principles of the Code and the extent of compliance
with recommendations advocated therein.
PRINCIPLE 1 - ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE
BOARD AND MANAGEMENT
The Board recognises the key role it plays in charting the
strategic direction of the Company and has assumed the following
principal responsibilities in discharging its fiduciary and
leadership functions:
• reviewing and adopting a strategic plan for the Company,
addressing the sustainability of the Group’s business;
• overseeing the conduct of the Group’s business and evaluating
whether or not its businesses are being properly managed;
• identify principal business risks faced by the Group and
ensuring the implementation of appropriate internal controls and
mitigating measures to address such risks;
• ensuring that all candidates appointed to senior management
positions are of sufficient calibre, including the orderly
succession of senior management personnel;
• overseeing the development and implementation of a shareholder
communications policy, including an investor relations programme
for the Company; and
• reviewing the adequacy and integrity of the Group’s internal
control and management information systems.
To assist in the discharge of its stewardship role, the Board
has established Board Committees, namely the Audit Committee,
Nomination Committee, Remuneration Committee and Risk Management
Committee, to examine specific issues within their respective terms
of reference as approved by the Board and report to the Board with
their recommendations. The ultimate responsibility for decision
making, however, lies with the Board.
Board Charter
The Board had formalized and approved the Board Charter. The
Board Charter will be reviewed as and when to ensure that it
remains consistent with the Board’s objectives and best practices.
The Board Charter can be accessed at the Company’s website at
www.pantech-group.com.
Code of Conduct and Whistle-Blower Policy
The Company does not adopt the Code of Conduct and
Whistle-Blower policy. The Board has always conducted themselves in
an ethical manner while executing their duties and function. The
Board believes in open management that any issues of concern can be
channeled to Senior Independent Director or Executive Directors for
appropriate action.
Sustainability of Business
The Board is mindful of the importance of business
sustainability and, in conducting the Group’s business, the impact
on the environmental, social and governance aspects is taken into
consideration. The Board takes heed of go green save energy by
implement several internal guidelines on sustainability.
-
Pantech Group Holdings Berhad (733607-W)22
CORPORATE GOVERNANCE STATEMENTcont’d
PRINCIPLE 1 - ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE
BOARD AND MANAGEMENT cont’d
Supply of, and Access to, Information
The Board is supplied with relevant information and reports on
financial, operational, corporate, regulatory, business development
and audit matters, by way of Board reports or upon specific
requests, for decisions to be made on an informed basis and
effective discharge of Board’s responsibilities.
Good practices have been observed for timely dissemination of
meeting agenda, including the relevant Board and Board Committee
papers to all Directors prior to the Board and Board Committee
meetings, to give effect to Board decisions and to deal with
matters arising from such meetings. The Executive Directors and/or
other relevant Board members furnish comprehensive explanation on
pertinent issues and recommendations by Management. The issues are
then deliberated and discussed thoroughly by the Board prior to
decision making.
In addition, the Board members are updated on the Company’s
activities and its operations on a regular basis. All Directors
have access to all information of the Company on a timely basis in
an appropriate manner and quality necessary to enable them to
discharge their duties and responsibilities.
Senior Management of the Group and external advisers are invited
to attend Board meetings to provide additional insights and
professional views, advice and explanations on specific items on
the meeting agenda. Besides direct access to Management, Directors
may obtain independent professional advice at the Company’s
expense, if considered necessary, in furtherance of their
duties.
Directors have unrestricted access to the advice and services of
the Company Secretary to enable them to discharge their duties
effectively. The Board is regularly updated and advised by the
Company Secretary who is qualified, experienced and competent on
statutory and regulatory requirements, and the resultant
implications of any changes therein to the Company and Directors in
relation to their duties and responsibilities. The Company
Secretary, who oversees adherence with board policies and
procedures, briefs the Board on the proposed contents and timing of
material announcements to be made to regulators. The Company
Secretary attends all Board and Board Committees meetings and
ensures that meetings are properly convened, and that accurate and
proper records of the proceedings and resolutions passed are taken
and maintained accordingly. The removal of Company Secretary, if
any, is a matter for the Board, as a whole, to decide.
PRINCIPLE 2 - STRENGTHEN COMPOSITION OF THE BOARD
As at the date of this report, the Board consists of nine (9)
members, comprising of an Executive Chairman who is also the Group
Managing Director, one (1) Group Deputy Managing Director, three
(3) Executive Directors, three (3) Independent Non-Executive
Directors and one (1) Non-Independent and Non-Executive Director.
This composition fulfills the requirements as set out under the
Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa”),
which stipulate that at least two (2) Directors or one-third of the
Board, whichever is higher, must be Independent. The profile of
each Director is set out in this Annual Report. The Directors, with
their differing backgrounds and specializations, collectively bring
with them a wide range of experience and expertise in areas such as
finance; accounting and audit; corporate affairs; and marketing and
operations.
Nomination Committee – Selection and Assessment of Directors
A Nomination Committee has been established, with specific terms
of reference, by the Board, comprising exclusively Independent
Non-Executive Directors as follows:
Chairman Mr. Loh Wei Tak Independent Non-Executive Director
Members Mr. Tan Sui Hin Senior Independent Non-Executive
Director Haji Yusoff Bin Mohamed Independent Non-Executive
Director
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23annual report 2014
CORPORATE GOVERNANCE STATEMENTcont’d
PRINCIPLE 2 - STRENGTHEN COMPOSITION OF THE BOARD cont’d
Nomination Committee – Selection and Assessment of Directors
cont’d
The Nomination Committee is primarily responsible for
recommending suitable appointments to the Board, taking into
consideration the Board structure, size, composition and the
required mix of expertise and experience which the Director should
bring to the Board. It assesses the effectiveness of the Board as a
whole, the Board Committees and the contribution of each Director,
including Non-Executive Directors.
The final decision on the appointment of a candidate recommended
by Nomination Committee rests with the whole Board. The Board is
entitled to the services of the Company Secretary who would ensure
that all appointments are properly made upon obtaining all
necessary information from the Directors.
During the financial year, the Nomination Committee met once,
attended by all members, to assess the balance composition of Board
members based on merits, Directors’ contribution and Board
effectiveness. The Company has no policy on gender diversity or
target set but believes in merits and commitment of its Board
members. The Nomination Committee assesses the Board members on an
objective basis for both genders.
Directors’ Remuneration
A Remuneration Committee has been established by the Board,
comprising a majority of Non-Executive Directors as follows:
Chairman Haji Yusoff Bin Mohamed Independent Non-Executive
Director
Members Dato’ Chew Ting Leng Executive Chairman/Group Managing
Director Mr. Tan Sui Hin Senior Independent Non-Executive
Director
The Remuneration Committee has been entrusted by the Board to
determine that the levels of remuneration are sufficient to attract
and retain Directors of quality required to manage the business of
the Group. The Remuneration Committee is entrusted under its terms
of reference to assist the Board, amongst others, to recommend to
the Board the remuneration of the Executive Directors. In the case
of Non-Executive Directors, the level of remuneration shall reflect
the experience and level of responsibilities undertaken by the
Non-Executive Directors concerned. In all instances, the
deliberations are conducted, with the Directors concerned
abstaining from discussions on their individual remuneration.
During the financial year under review, the Committee met once
attended by all members.
Details of Directors’ remuneration for the financial year ended
28 February 2014 are as follows:
Remuneration (RM)
Executive Directors 6,556,425
Non-Executive Directors 158,000
Total 6,714,425
The remuneration paid to the Directors, analysed in the
following bands, is as below:-
Range of Remuneration (RM) Executive Non-Executive
50,000 and below - 4
600,000 – 650,000 1 -
950,000 - 1,000,000 1 -
1,400,000 - 1,450,000 1 -
1,700,000 - 1,750,000 1 -
1,800,000 - 1,850,000 1 -
There is no service contract made between any Director and the
Company or its subsidiary companies.
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Pantech Group Holdings Berhad (733607-W)24
CORPORATE GOVERNANCE STATEMENTcont’d
PRINCIPLE 3 – REINFORCE INDEPENDENCE OF THE BOARD
The roles of the Chairman and Group Managing Director are held
by the same Director. This departs from the Recommendation 3.4 of
the Code which stipulates that the positions of Chairman and Chief
Executive Officer should be held by different individuals and that
the Chairman must be a Non-Executive member of the Board. However,
the Board believes that for its current size, it is more expedient
for the two roles to be held by the same person as long as there
are pertinent checks and balance to ensure no one person in the
Board has unfettered powers to make major decisions for the Company
unilaterally. As such, the Board is of the view that the
significant composition of Non-Executive Directors, which is close
to the current Board’s size, provides for the relevant check and
balance.
The Executive Chairman is responsible for ensuring the adequacy
and effectiveness of the Board’s governance process and acts as a
facilitator at Board meetings to ensure all Directors participate
and deliberated at all Board meetings and that no Board member
dominates discussion. As the Group Managing Director, supported by
fellow Executive Directors, he implements the Group’s strategies,
policies and decision adopted by the Board and oversees the
operations and business development of the Group.
The Independent Non-Executive Directors bring objective and
independent views, advice and judgment on interests, not only of
the Group, but also of shareholders and stakeholders. Independent
Non-Executive Directors are essential for protecting the interests
of shareholders and can make significant contributions to the
Company’s decision by giving rationale and fair view and to decide
impartially.
The Board recognizes the importance of establishing criteria on
independence to be used in the annual assessment of its Independent
Non-Executive Directors. Although the definition on independence
according to the Listing Requirements of Bursa is used, the Board
review and assess the independence of its Independent Directors
annually based on their conduct, argue on the matters objectively
and make decision rationally and other independence criteria to,
inter-alia, include the nine (9)-year tenure for Independent
Non-Executive Directors in its Board Charter.
PRINCIPLE 4 – FOSTER COMMITMENT OF DIRECTORS
The Board ordinarily meets at least six (6) times a year,
scheduled well in advance before the end of the preceding financial
year to facilitate the Directors in planning their meeting schedule
for the year. Additional meetings are convened when urgent and
important decisions need to be made between scheduled meetings.
Board and Board Committee papers which are prepared by the
Management, provide the relevant facts and analysis for the
convenience of Directors. The meeting agenda, the relevant reports
and Board papers are furnished to Directors and Board Committee
members well before the meeting to allow the Directors sufficient
time to peruse for effective discussion and decision making during
meetings. At the quarterly Board meetings, the Board reviews the
business performance of the Group and discusses major operational
and financial issues. The Chairman of the Audit Committee informs
the Directors at each Board meetings of any salient matters noted
by the Audit Committee and which require the Board’s attention or
direction. All pertinent issues discussed at Board meetings in
arriving at the decisions and conclusions are properly recorded by
the Company Secretary by way of minutes of meetings.
Board Meetings
There were Six (6) Board meetings held during the financial year
ended 28 February 2014, with details of Directors’ attendance set
out below:
Meetings Attended(out of 6 held)
Dato’ Chew Ting Leng Executive Chairman/Group Managing Director
6/6Dato’ Goh Teoh Kean Group Deputy Managing Director 6/6Mr. Tan
Ang Ang Executive Director 6/6Mr. To Tai Wai Executive Director
6/6Ms. Ng Lee Lee Executive Director 4/4Mr. Tan Sui Hin Senior
Independent Non-Executive Director 6/6Mr. Loh Wei Tak Independent
Non-Executive Director 6/6Haji Yusoff Bin Mohamed Independent
Non-Executive Director 6/6Datuk Faizoull Bin Ahmad Non-Independent
Non-Executive Director 2/4
-
25annual report 2014
CORPORATE GOVERNANCE STATEMENTcont’d
PRINCIPLE 4 – FOSTER COMMITMENT OF DIRECTORS cont’d
Board Meetings cont’d
It is the practice of the Company for Directors to devote
sufficient time and efforts to carry out their responsibilities.
All Board members are required to notify the Chairman before
accepting any new directorships notwithstanding that the Listing
Requirements of Bursa allow a Director to sit on the boards of 5
listed issuers. Such notification is expected to include an
indication of time that will be spent on the new appointment.
Directors’ Training – Continuing Education Programmes
The Board is mindful of the importance for its members to
undergo continuous training to keep abreast with changes to
regulatory requirements and the impact such regulatory requirements
have on the Group.
All the Directors of the Company have attended the Mandatory
Accreditation Programme conducted by Bursatra Sdn Bhd within the
stipulated timeframe required in the Listing Requirements during
the financial year ended 2014.
During the year, all Board Members have attended pertinent
training as below:-
Name of Director Date Training attended
(a) Dato’ Chew Ting Leng 28 August 2013 Business Performance
Management
(b) Dato’ Goh Teoh Kean 28 August 2013 Business Performance
Management29 October 2013 Economic & Market Update – QE Taper
Off (Emerging Asia
in for a Rough Ride)7 November 2013 Budget 2014 Highlights19
February 2014 Corporate Seminar 2014 and Global Market Outlook
(c) Mr. Tan Ang Ang 21 August 2013 Advocacy Sessions on
Corporate Disclosure for Directors of Listed Issuers
28 August 2013 Business Performance Management
(d) Mr. To Tai Wai 28 August 2013 Business Performance
Management
(e) Ms. Ng Lee Lee 3-4 July 2013 Mandatory Accreditation Program
(MAP)28 August 2013 Business Performance Management
(f) Mr. Tan Sui Hin 28 August 2013 Business Performance
Management
(g) Mr. Loh Wei Tak 28 August 2013 Business Performance
Management25 November 2013 2014 Budget Seminar – Key Budget Changes
and their
Implications10 December 2013 Competency-based Performance
Appraisal & Coaching for
High Performance
(h) Haji Yusoff Bin Mohamed 28 August 2013 Business Performance
Management
(i) Datuk Faizoull Bin Ahmad 2-3 September 2013 RSPO Certified
Sustainable Palm Oil Meeting and Seminar
Throughout the year, the Directors also received updates and
briefings, particularly on regulatory, industry and legal
developments, including information on significant changes in
business and procedures instituted to mitigate such risks.
The External Auditors also briefed the Board members on any
changes to the Malaysian Financial Reporting Standards that would
affect the Group’s financial statements during the financial year
under review. The Directors continue to undergo relevant training
programmes to further enhance their skills and knowledge in the
discharge of their stewardship role.
The Company Secretaries also update the Board Members on the
relevant guidelines on statutory and regulatory requirements from
time to time.
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Pantech Group Holdings Berhad (733607-W)26
CORPORATE GOVERNANCE STATEMENTcont’d
PRINCIPLE 5 – UPHOLD INTEGRITY IN FINANCIAL REPORTING BY
COMPANY
It is the Board’s commitment to present a balanced and
meaningful assessment of the Group’s financial performance and
prospects at the end of each reporting period and financial year,
primarily through the quarterly announcement of Group’s results to
Bursa, the annual financial statements of the Group and Company as
well as the Chairman’s statement and review of the Group’s
operations in the Annual Report, where relevant. A statement by the
Directors of their responsibilities in the preparation of financial
statements is set out in the ensuing paragraph.
Statement of Directors’ Responsibility for Preparing Financial
Statements
The Board is responsible to ensure that the financial statements
are properly drawn up in accordance with the provisions of the
Companies Act, 1965, Malaysian Financial Reporting Standards and
International Financial Reporting Standards so as to give a true
and fair view of the financial position of the Group as at the end
of the financial year and of the financial performance and cash
flows of the Group for the financial year then ended.
The Directors are satisfied that in preparing the financial
statements of the Group for the year ended 28 February 2014, the
Group has adopted suitable accounting policies and applied them
consistently, prudently and reasonably. The Directors also consider
that all applicable approved accounting standards have been
followed in the preparation of the financial statements, subject to
any material departures being disclosed and explained in the notes
to the financial statements. The financial statements have been
prepared on the going concern basis.
The Directors are responsible for ensuring that the Group keeps
sufficient accounting records to disclose with reasonable accuracy,
the financial position of the Group and which enable them to ensure
that the financial statements comply with the Companies Act,
1965.
Audit Committee
In assisting the Board to discharge its duties on financial
reporting, the Board has established an Audit Committee, comprising
wholly Independent Non-Executive Directors, with Mr Tan Sui Hin as
the Committee Chairman. The composition of the Audit Committee,
including its roles and responsibilities, are set out in the Audit
Committee Report of this Annual Report. One of the key
responsibilities of the Audit Committee in its specific terms of
reference is to ensure that the financial statements of the Group
and Company comply with applicable financial reporting standards in
Malaysia. Such financial statements comprise the quarterly
financial report announced to Bursa and the annual statutory
financial statements.
As the Board understands its role in upholding the integrity of
financial reporting by the Company, it will take steps to revise
the Audit Committee’s terms of reference by formalizing a policy on
the types of non-audit services permitted to be provided by the
external auditors of the Company so as not to compromise their
independence and objectivity, including the need for the Audit
Committee’s approval in writing before such services can be
provided by the external auditors.
In assessing the independence of external auditors, the Audit
Committee will in future require written assurance by the external
auditors, confirming that they are, and have been, independent
throughout the conduct of the audit engagement with the Company in
accordance with the independence criteria set out by the
International Federation of Accountants and the Malaysian Institute
of Accountants.
PRINCIPLE 6 – RECOGNISE AND MANAGE RISKS OF THE GROUP
The Company has established a Risk Management Committee (“RMC”)
and is headed by the Executive Director and members of key
management team of the respective division. The Board delegates to
the RMC the responsibility for evaluating, reviewing and monitoring
the vital enterprise risks that affecting the business and
operations as an on-going basis. The Board is committed to the
development and implementation of an effective Enterprise Risk
Management framework (“ERM”) to assist the Group to manage all key
businesses risk with the intent to strengthening the risk
management and internal control system as a whole.
Continuous efforts will be made to monitor and re-assess the
existing ERM framework in regards to maintaining a proper system of
managing risks as well as the related control activities.
-
27annual report 2014
CORPORATE GOVERNANCE STATEMENTcont’d
PRINCIPLE 6 – RECOGNISE AND MANAGE RISKS OF THE GROUP cont’d
The internal audit function of the Group is outsourced to an
independent professional firm, whose work is performed with
impartiality, proficiency and due professional care, and in
accordance with the International Professional Practices Framework
of the Institute of Internal Auditors, which sets out professional
standards on internal audit. It undertakes regular reviews of the
adequacy and effectiveness of the Group’s system of internal
controls and risk management process, as well as appropriateness
and effectiveness of the corporate governance practices. The
Internal Audit Function reports directly to the Audit Committee.
Further details on the internal audit function can be seen in the
Audit Committee Report and the Statement on Risk Management and
Internal Control in this Annual Report.
PRINCIPLE 7 – ENSURE TIMELY AND HIGH qUALITY DISCLOSURE
The Board is aware of the need to establish corporate disclosure
policies and procedures to enable comprehensive, accurate and
timely disclosures relating to the Company and its subsidiaries to
be made to the regulators, shareholders and stakeholders. On this
basis, the Board has formalized pertinent policies and procedures
not only to comply with the disclosure requirements as stipulated
in the Listing Requirements of Bursa, but also setting out the
persons authorised and responsible to approve and disclose material
information to regulators, shareholders and stakeholders.
To augment the process of disclosure, the Board has earmarked a
dedicated section for corporate governance on the Company’s website
where information on the Company’s announcements to the regulators,
the Board Charter, rights of shareholders and the Company’s Annual
Report may be accessed.
PRINCIPLE 8 – STRENGTHEN RELATIONSHIP BETWEEN THE COMPANY AND
ITS SHAREHOLDERS
Shareholder participation at general meeting
The Annual General Meeting (“AGM”), which is the principal forum
for shareholder dialogue, allows shareholders to review the Group’s
performance via the Company’s Annual Report and pose questions to
the Board for clarification. At the AGM, shareholders participate
in deliberating resolutions being proposed or on the Group’s
operations in general. At the last AGM, a question & answer
session was held where the Chairman invited shareholders to raise
questions with responses from the Board.
The Notice of AGM is circulated at least twenty one (21) days
before the date of the meeting to enable shareholders to go through
the Annual Report and papers supporting the resolutions proposed.
Shareholders are invited to ask questions both about the
resolutions being proposed before putting a resolution to vote as
well as matters relating to the Group’s operations in general. All
the resolutions set out in the Notice of the last AGM were put to
vote by show of hands and duly passed. The outcome of the AGM was
announced to Bursa on the same meeting day.
Communication and engagement with shareholders
The Board recognises the importance of being transparent and
accountable to the Company’s investors and, as such, has various
channels to maintain communication with them. The various channels
of communications are through the quarterly announcements on
financial results to Bursa, relevant announcements and circulars,
when necessary, the Annual and Extraordinary General Meetings and
through the Group’s website at where shareholders can access
pertinent information concerning the Group.
This Statement is issued in accordance with a resolution of the
Board dated 19 June 2014.
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Pantech Group Holdings Berhad (733607-W)28
ADDITIONAL COMPLIANCE STATEMENT
1. SHARE BUY-BACKS
Details of the share bought-back by the Company during the
financial year are set out below:-
MonthNo. of Shares
purchased
Price per share (RM) Total Consideration
(RM)Lowest Highest Average
June - 2013 50,000 0.910 0.910 0.910 45,832.65
January - 2014 100,000 0.900 0.900 0.900 90,657.00 At the end of
the financial year, a total of 3,452,300 ordinary shares at RM0.20
each were retained as treasury
shares. There was no sale or cancellation of treasury shares
during the financial year.
2. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES ISSUED AND
EXERCISED
Employees’ Shares Options Scheme (“ESOS”) The Company does not
offer any options to the eligible employees of the Company under
ESOS during the
financial year.
The ESOS will be expired by 2 March 2015.
Irredeemable Convertible Unsecured Loan Stocks 2010/2017
(“ICULS”)
During the financial year, a