Key Matters Discussed at AGM

FCW Holdings Berhad

(Company No. 3116-K)

SUMMARY OF KEY MATTERS DISCUSSED AT THE 63RD ANNUAL GENERAL MEETING HELD AT DEWAN PERDANA ROOM, BUKIT KIARA EQUESTRIAN AND COUNTRY RESORT ON 7 DECEMBER 2018

OPENING

Meeting started at 10:30am with a welcome address by the Chairman.

AGENDA ITEM 1

AUDITED FINANCIAL STATEMENTS OF THE GROUP AND THE COMPANY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2018 AND THE DIRECTORS’ AND AUDITORS’ REPORTS THEREON

This Agenda item was meant for discussion only, and was not a business which required a resolution to be put for voting by the shareholders.

 

The audited financial statements of the Group and the Company for the financial year ended 30 June 2018, together with the Reports of the Directors and Auditors thereon were received and noted by the shareholders.

 

Pursuant to a questions-and-answers session between the shareholders and the Director(s) and/or Management on the financial statements, the following were main points discussed and noted:-

1. To the clarification sought by a shareholder on the issue of taxation in respect of paragraph 5 of the Management Discussion and Analysis (page 10 of the Company’s Annual Report), which worded as “Profit After Tax of Coscolab increased to RM1.223 million in FY2018 (FY2017: RM917,000), in spite of an increase in taxation to RM919,000 in FY2018 (FY2017: RM349,000). This is attributable to the higher total revenue achieved during the financial year, despite slight increases in total costs as well as taxation”, the Chairman explained that the higher taxation incurred for FY2018 was due to additional tax liability and penalty imposed on Coscolab by the Inland Revenue Board after carrying out a tax audit on Coscolab in August 2018, whose findings revealed that some of the expenses claimed as deductions against revenue in prior years were not allowable.

 

2. On questions raised about future prospect of the Group and any plan towards the loss making cable manufacturing business, the Chairman replied that the Group was focusing on growing the existing businesses of its wholly owned subsidiary and 50%-owned joint-venture company, namely Contract Manufacturing (OEM) and Property Development. As for the Cables Manufacturing business which the Group has no management control, the Group will exert greater pressure on the Management to work harder to improve financial performance of the business.

 

On the Contract Manufacturing business which is carried out by our wholly-owned subsidiary Coscolab Sdn Bhd (“Coscolab”), noted that given the slowing growth of the local economy coupled with uncertainties arising from changes in tax regime from GST to SST, and trade uncertainties in overseas market which had adversely affected sales, Coscolab was making comprehensive efforts to counteract the changes with the hope to improve market share and profitability. Coscolab has during the financial year, implemented factory expansion plan to increase production capacity, and implemented a management system that fully complies with ISO 9001:2015 requirements with the objective of achieving ISO 9001:2015 accreditation for quality assurance. Coscolab was also focusing on R&D and innovation of high value products for customers as part of its business expansion plan for both local and export markets, which involves inter-alia, recruiting suitable R&D personnel, provision of training and participation in related international fairs.

 

The Group was optimistic about the future prospect of the Property Development Segment business which is carried out by 368 Segambut Sdn Bhd, the Group’s 50%-owned joint venture company with IJM Land Berhad. This Segment is viewed to be a major contributor to the Group’s profit in the coming years. Its mixed development project known as “Riana Dutamas” (“Project”) has an estimated GDV of RM1.6 billion to RM2.0 billion. The entire Project covering approximately 15 acres of freehold land is divided into 3 phases of development comprising serviced apartments, retail lots and some SOVO (small office/virtual office) units, and is estimated to take about 7-10 years to complete. The Project, with affordable pricing, is conveniently accessible via Duke Highway, KTM Komuter and other public infrastructure and amenities. As at to-date, 75% of the total units launched in December 2017 (Savio – Phase One) has been sold. Currently, the progress billings for Savio is at 20% of sales, the Group expects more profit contribution in the next financial year when progress billing reaches a more advanced stage.

 

The Cables Manufacturing Segment business is carried out by our associate company, Fujikura Federal Cables Sdn Bhd (“Fujikura”), in which FCW has a 42.5% equity stake. Fujikura is managed by its holding company, Fujikura Japan Limited which is one of the largest cable manufacturers in the world. The business of this segment had been challenging especially in recent years due to fluctuation in copper prices and depreciation of the Malaysian Ringgit. Fujikura was experiencing loss in sales during the financial year due to the slowing down of infrastructure projects within Malaysia and also overseas. In order to improve its financial performance, Fujikura has undertaken various cost rationalization programs and also a voluntary separation scheme for its employees with the view to optimize operational resources with minimized operating cost and expenses. Besides, the Management of Fujikura was also working on strategies to increase export sales to ASEAN countries.

AGENDA ITEM 2

RE ELECTION OF DIRECTORS RETIRING IN ACCORDANCE WITH 

THE COMPANY’S CONSTITUTION

Ordinary Resolutions 1 and 2 on the re-election of Tan Sri Dato’ Tan Hua Choon and Dato’ Teo Ker-Wei respectively.

 

No question was raised by shareholders on this item.

AGENDA ITEM 3

RE-APPOINTMENT OF MESSRS BAKER TILLY MONTEIRO HENG AS AUDITORS OF THE COMPANY

Ordinary Resolution 3 on the re-appointment of Messrs Baker Tilly Monteiro Heng as Auditors of the Company and to hold office until the conclusion of the next Annual General Meeting at a remuneration to be fixed by the Board of Directors.

 

No question was raised by shareholders on this item.

AGENDA ITEM 4

DIRECTORS’ FEES FOR THE FINANCIAL YEAR ENDED 30 JUNE 2018

Ordinary Resolution 4 on the payment of Directors’ fees in respect of the financial year ended 30 June 2018.

 

No question was raised by shareholders on this item.

POLL RESULTS

Based on the poll results, all resolutions tabled at the Meeting were carried.