contents Notice of Annual General Meeting Corporate Information Audit Committee Corporate Structure Chairman s Statement CEO s Review FINANCIAL STATEMENTS Directors Report Consolidated Balance Sheet Consolidated Profit and Loss Account Consolidated Cash Flow Statement Balance Sheet Profit and Loss Account Notes to the Account Statement by Directors Statutory Declaration Auditors Report to the Members ANNEXURE Group Properties Analysis of Shareholdings List of Top Twenty Largest Shareholders Substantial Shareholders Directors Interest in Shares Proxy Form Pages 2-3 4 5-6 7 8 9-10 1-5 6 7 8-9 10 11 12-28 29 29 30-31 1 2 3 4 5
notice of annual general meeting notice of annual general meeting NOTICE IS HEREBY GIVEN THAT the Sixth Annual General Meeting of Hexagon Holdings Berhad will be held at Nilai Springs Golf & Country Club, PT 4770, Bandar Baru Nilai, 71801 Nilai, Negeri Sembilan Darul Khusus on Friday, 29th September 2000 at 9.30a.m. to transact the following: 1. RESOLUTION 1 To receive and adopt the Audited Accounts for the financial year ended 31st March 2000 together with the Reports of the Directors and Auditors thereon. 2. RESOLUTION 2 To declare a final dividend of 1% less income tax at 28% for the financial year ended 31st March 2000. 3. RESOLUTION 3 To approve the increase of Directors fees to RM 180,000.00 for the financial year ended 31st March 2000. 4. RESOLUTION 4 To re-elect Encik Bahrin bin Kasri who retires as a Director of the Company pursuant to Article 80 of the Company s Articles of Association. 5. RESOLUTION 5 To re-elect Y.B. Tuan Hj Mokatar Rudin bin Yusof who retires as a Director of the Company pursuant to Article 80 of the Company s Articles of Association. 6. RESOLUTION 6 To re-elect Mr Tong Yun Mong who retires as a Director of the Company pursuant to Article 87 of the Company s Articles of Association. 7. RESOLUTION 7 To re-appoint Messrs HALS & Associates as Auditors of the company and to authorise the Directors to fix their remuneration. 8. RESOLUTION 8 9. As Special Business, to consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:- Authority For Issue Of Shares That pursuant to Section 132D of the Companies Act, 1965, and subject to the approval of the relevant governmental/regulatory authorities (if any shall be required), the Directors be and are hereby empowered to issue shares (other than bonus or rights issues) in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares issued in any one financial year of the Company (other than by way of bonus or rights issues) does not exceed ten percent (10%) of the issued capital of the Company for the time being and that the Directors be and are also empowered to obtain approval from the Kuala Lumpur Stock Exchange, the listing of and quotation for the additional shares so issued and that such authority shall continue in force until conclusion of the next annual general meeting of the Company. To transact any other ordinary business of the Company for which due notice shall have been given. BY ORDER OF THE BOARD 2
notice of annual general meeting TEOH KOK JONG ANG AINA Company Secretaries Seremban Date: 13th September 2000. EXPLANATORY NOTE ON SPECIAL BUSINESS - Ordinary Resolution The Ordinary Resolution proposed under item 8 if passed, will give powers to the Directors to issue up to a maximum of ten percent (10%) of the issued share capital of the Company for the time being such purposes as the Directors consider would be in the interest of the Company. This authority unless revoked or varied by the Company at a general meeting will expire at the conclusion of the next Annual General Meeting or the expiration of the period within the Annual General Meeting is required by law to be held, whichever is the earlier. Notes: A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies, to attend and vote in his stead. Where a member appoints two or more proxies, the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy. If a proxy is granted to a nonmember of the Company, he must under the provisions of Section 149(1)(b) of the Companies Act, 1965, an advocate, an approved company auditor or a person approved by the Registrar of Companies. The instrument appointing a proxy must reach the Registered Office of the Company at 1st Floor, 275 Jalan Haruan 1, Oakland Industrial Park, 70200 Seremban, Negeri Sembilan Darul Khusus not less than 48 hours before the time set for the meeting or any adjournment thereof. Shareholders are reminded that pursuant to the Securities Industries (Central Depositories) (Amendments No 2) Act, 1998 which came into force on 1 November 1998, all shares not deposited with the Malaysian Central Depository Sdn Bhd by 12.30p.m. on 1 December 1998 and not exempted from mandatory deposit, have been transferred to the Minister of Finance ( MOF ). Accordingly, the eligibility to attend this meeting for such undeposited shares will be the MOF. NOTICE OF DIVIDEND ENTITLEMENT NOTICE IS ALSO HEREBY GIVEN THAT that subject to the approval of the shareholders at the Sixth Annual General Meeting on 29th September 2000, a final dividend of 1% less income tax of 28% for the financial year ended 31st March 2000 will be payable on 21st December 2000 to shareholders appearing on the Register of Members or Record of Depositors as at the close of business on 30th November 2000. A Depositor shall qualify for entitlement only in respect of:- 1. Shares deposited into the depositor s securities account before 12.30p.m. on 28th November 2000 (in respect of shares which are exempted from mandatory deposit); 2. Shares transferred into the depositor s securities account before 12.30p.m. on 30th November 2000 in respect of ordinary transfer; and 3. Shares bought on the Kuala Lumpur Stock Exchange on a cum entitlement basis according to the Rules of Kuala Lumpur Stock Exchange. notice of annual general meeting 3
corporate information corporate information EXECUTIVE CHAIRMAN Dato Hamzah bin Zainudin, JP GROUP MANAGING DIRECTOR Tan Beng Wan EXECUTIVE DIRECTORS Ir. Ng Choong Hon Low Kwee Beng Tan Hock Siang Tan Kwang Wah Hew Yuen Foh INDEPENDENT DIRECTORS Bahrin bin Kasri YB Tuan Haji Mokatar Rudin bin Wan Yusof Tong Yun Mong SECRETARIES Teoh Kok Jong Ang Aina SOLICITORS Messrs Ranjit Ooi & Robert Low REGISTERED OFFICE 1st Floor, 275, Jalan Haruan 1 Oakland Industrial Park 70200 Seremban Negeri Sembilan Darul Khusus Tel : 06-7625463 Fax: 06-7629693 REGISTRAR Bina Management Services (M) Sdn Bhd Lot 10, The Highway Centre Jalan 51/205, 46050 Petaling Jaya Selangor Darul Ehsan Tel : 03-77843992 Fax: 03-77841988 MAIN BANKERS Malayan Banking Bhd Public Bank Bhd Multi-Purpose Bank Bhd AUDITORS Messrs HALS & Associates Public Accountants STOCK EXCHANGE LISTING Kuala Lumpur Stock Exchange Second Board (13/9/96) 4
audit committee AUDIT COMMITTEE MEMBERS Bahrin bin Kasri (Chairman) Independent Non-Executive Director Tan Beng Wan Managing Director Y.B. Tuan Haji Mokatar Rudin bin Wan Yusof Independent Non-Executive Director Tong Yun Mong Independent Non-Executive Director ROLE OF THE AUDIT COMMITTEE 1. Assisting the Board of Directors in the discharge of their statutory duties and responsibilities in the following areas: - preparation of financial statements that give a true and fair view of the Group s affairs and results - manage the Group s affairs in compliance with laws and regulations and proper standards of conduct - establishment and maintenance of internal controls for areas of risks to provide reasonable and reliable financial information 2. Provide, by way of regular meetings, a line of communication between the Board and the external auditors. 3. Enhance the perceptions held by other interested parties (shareholders, regulators and creditors, etc) of the credibility and objectivity of financial reports. TERM OF REFERENCE 1. Membership The Committee shall be appointed by the Board from amongst the Directors of the Company and shall consist of not less than 3 members with a majority of non-executive directors. A member shall not have family relationships with any executive director of the Company or of any related company or relationship which would interfere with independent judgement. The Chairman of the Committee shall be elected by the members of the Committee and shall be a nonexecutive director. 2. Attendance At Meetings The head of finance and internal audit and a representative of the external auditors shall normally attend meetings. The Company Secretary shall be the secretary of the Committee. The quorum necessary for the transaction of business of the Audit Committee Meeting may be fixed by the members and unless so fixed shall be two (2) which shall comprise of at least one non-executive director. 3. Frequency Of Meetings The Committee shall meet at least four times during each financial year and hold such additional meetings as the Chairman shall deem necessary in order to fulfil its duties. audit committee 5
audit committee Of Meetings In the absence of the Chairman, the Committee shall appoint one of the non-executive members present to chair that meeting. Questions arising at any meeting shall be decided by a majority of votes of the members present. Save that where two (2) members form a quorum or that which only two (2) members are competent to vote on the question in issue, the vote of the non-executive director shall be the decision of the Committee. 5. Authority The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are directed to cooperate with any request made by the Committee. The Committee is authorised by the Board to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary. 6. Duties The duties of the Committee shall be: - to recommend the appointment of the external auditors, the audit fee, and any other terms of engagement. - to discuss with the external auditors on the audit plan before the commencement of the annual audit and ensure coordination where more than one audit firm is involved. - to review the quarterly and year end financial statements before submission to the Board. - to discuss with the external auditors the problems and reservations arising from the annual audits. - to review the internal audit programme, consider major findings of internal audit investigations and management s response, and review the level of coordination between the internal and external auditors. - to keep under review the effectiveness of internal control systems, and in particular review the external auditors management letter and management s response. - to consider other related matters, as defined by the Board. - to review related party transactions that may arise within the Company or Group and any other major transactions outside of the normal course of business of the Company and Group. 7. Reporting Programme The Secretary shall circulate the minutes of the Committee to all members of the Board. audit committee4. Proceedings 6
corporate structure as at 31 july 2000 HOLDINGS BERHAD POLYMER COMPOSITE ASIA TOWER PCA ENVIRONMENTAL ENGINEERING 99.99% TECHNOLOGIES RESOURCES (M) OVERSEAS INCORPORATION HT SERUMPUN QA ENVIROLITE (MALAYSIA) SHOP SYSTEM DISTRIBUTORS 80% TOWER PHILIPPINES, INC. 99.99% TOWER (THAILAND) LTD 49% HT TENAGA 49% corporate structure 7
chairman s statement chairman s statement On behalf of the Board of Directors, I wish to present the Annual Report and Audited Accounts of the Group and of the Company for the year ended 31 March 2000. REVIEW & PROSPECTS The financial year ended 31 March 2000 has indeed been a challenging year for the Group. The pessimistic direction that took place in the past year had witnessed an improvement in this financial year due to the improvement in the economic fortunes of Malaysia and other countries within Asia. The up-trend of the economic situation has done much to revive the level of optimism and energy in most of the industrial sectors, hence contributing to the Group's performance. FINANCIAL PERFORMANCE The Group's turnover for year ended 31 March 2000 increased by 26% from previous year's RM 88 Million to RM 111 Million. The Group has also registered a lower pre-tax loss of RM 4.2 Million, an improvement of 27% compared to the pre-tax loss of RM 5.7 Million recorded in year ended March 1999. DIVIDENDS After taking into account the overall result and position of the Group for the year ended 31 March 2000, the Board of Directors is recommending a first and final dividend of 1% less tax in the forthcoming Sixth Annual General Meeting for the financial year ended 31 March 2000. DIRECTORS We are pleased to welcome Mr. Tong Yun Mong, who joined our Board during the year, and with no doubt, would bring a wealth of experience to our Board. Also, our appreciation goes to Dato Kamarudin bin Jaffar and En. Kamal bin Mohamad Noor, who had resigned as directors, for their contribution whilst serving on the Board. APPRECIATION Finally, on behalf of the Board, I am indeed very pleased to take this opportunity to express our appreciation to the shareholders, bankers, customers, suppliers, advisors, and business partners for their continuous support and assistance extended to the Group. I would also like to thank the management and the staff who have given their full dedication and commitment to the Group throughout this difficult period. Dato' Hamzah bin Zainudin, JP Executive Chairman 8
ceo s review Dear Shareholders, ceo s review The past year has been a challenge for Hexagon in meeting the consequences of the economic crisis that beset Corporate Malaysia. Although the regional economic turbulence has, to a certain degree, stabilised during this second year of recession, the recovery had not been fully translated to Corporate earnings. With resilience, Hexagon has managed to survive throughout this crucial period, and is now better geared towards the future. FINANCIAL REVIEW The Group's financial performance has improved in tandem with the recovery of the Malaysian economy. Turnover increased by 26% from RM 88 million in YE 1999 to RM 111 million in YE 2000. Profits improved with a reduction in Loss before taxation and minority interests of 27% from RM 5.7 million to RM4.2 million. With the improving economy and the Group's concerted thrust on sales and services, the Group was able to secure more businesses from existing and new customers, thereby sustaining our operations. However, faced with stiff competition from both domestic and foreign competitors, prices had to be very competitive to ensure that the Group retained its market share. YE 2000 was of key importance to the Group, marking Hexagon's involvement in the high technology st projects namely, 1 Silicon ( Malaysia ) Sdn Bhd in Kuching, Sarawak, and Wafer Technology Malaysia Sdn Bhd in Kulim, Kedah. Hexagon, recognized for its EPC ( "Engineering, Procurement and Construction") expertise is one of the few Malaysian companies to have qualified to compete with international players, and won direct contracts for the plant engineering works in these two projects. It is certainly an achievement for Hexagon as well as the country to be given this level of recognition. These two wafer fabrication plants with investment costs of approximately USD 1 billion each will be providing Hexagon with a steady revenue stream over the next couple of years. STRATEGIC PLANNING Strategies employed by the Group will emphasize on the importance of positioning the organization in relation to its environment and competitors to achieve its objectives. Efforts will be made to link the environmental forces, internal organizational design & processes, and the organizational strategies together. The 3 key strategies significant to the Group are :- Business Strategy in high technology industry of Wafer Fabrication Plants that will spearhead the Group's efforts into providing specialized EPC services to these plants. Corporate Strategy to form synergistic alliances with internationally renowned business partners with leading edge know-how and resources, thereby providing the impetus to be a successful regional company. 9
ceo s review ceo s review Market Strategy via its offices located throughout Malaysia & ASEAN, supported by more than 600 staff strength, to better position itself and extend its market influence in this fast changing business environment. THE WAY FORWARD The anticipated improvement of the regional economies is expected to reinforce the business confidence in the coming future. This will, in turn, spur a healthier business environment for many industries, including the engineering sector, and in the process, create more business opportunities for the Group. As business opportunities continue to develop, we would expect greater competition in the market place where more local and international players enter the industry to gain from these opportunities. It is therefore, crucial for the Group to strengthen its current position for the challenges ahead. The Group would strive to preserve the integrity of the Group as well as to protect the long-term interest of our shareholders. Prudent management practice, continuous operational efficiency and, development of information technology skills within the Group will ensure that the Group is sustained by the competencies required by any business to succeed in this new millennium. Hexagon's new strategic direction will result in a more focused business group with its strategic business units synergistically grouped to share and enhance its knowledge, expertise and resources more effectively. ACKNOWLEDGEMENTS The management and staff must be commended for their dedication and professionalism throughout these trying circumstances. And not forgetting the support from the various regulatory authorities, financial institutions, customers, business partners and associates, and suppliers. Special mention must be made to our creditors and shareholders, who have been most understanding and patient under these challenging times. To the fellow members on the Board for their wise counsel and guidance, thank you. Jason B.W. Tan Group Managing Director 10