The directors hereby submit their report together with the audited financial statements of HeveaBoard Berhad (“the Company”) and its subsidiaries (“the Group”) for the financial year ended 31 December 2020.
PRINCIPAL ACTIVITIES
The principal activities of the Company are manufacturing of particleboards and investment holding. The principal activities of its subsidiaries are disclosed in Note 7 to the financial statements.
There have been no significant changes in the nature of these principal activities during the financial year.
RESULTS
Group Company RM'000 RM'000
Profit for the financial year, net of tax 16,364 13,729
Attributable to:
Owners of the Company 16,364 13,729
Non-controlling interests – –
16,364 13,729
RESERVES OR PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.
BAD AND DOUBTFUL DEBTS
Before the financial statements of the Group and of the Company were prepared, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and had satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts.
At the date of this report, the directors are not aware of any circumstances which would render the amount written off for bad debts or the amount of the allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent.
DIRECTORS’ REPORT (CONTINUED)
DIVIDENDS
The amount of dividend declared and paid by the Company since the end of the previous financial year were as follows:
RM'000
Single-tier third interim dividend of 1.00 sen per ordinary share in respect of the financial year ended 31 December 2019,
paid on 10 April 2020 5,661
Single-tier final dividend of 1.00 sen per ordinary share in respect of the financial year ended 31 December 2019,
paid on 9 July 2020 5,660
Single-tier first interim dividend of 0.50 sen per ordinary share in respect of the financial year ended 31 December 2020,
paid on 9 October 2020 2,829
Single-tier second interim dividend of 0.50 sen per ordinary share in respect of the financial year ended 31 December 2020,
paid on 8 January 2021 2,829
16,979
Subsequent to the financial year end, the Company declared a single-tier third interim dividend of 0.50 sen per ordinary share in respect of the financial year ended 31 December 2020 on 25 February 2021 and payable on 9 April 2021. The financial statements for the current financial year do not reflect this declared dividend. Such dividend, will be accounted for in shareholders’ equity as an appropriation of retained earnings in the financial year ending 31 December 2021.
At the forthcoming Annual General Meeting, a final (single-tier) dividend in respect of the financial year ended 31 December 2020, amounting 0.75 sen per ordinary share will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by shareholders, will be accounted for in shareholders’ equity as an appropriation of retained profits in the financial year ending 31 December 2021.
CURRENT ASSETS
Before the financial statements of the Group and of the Company were prepared, the directors took reasonable steps to ensure that any current assets which were unlikely to be realised in the ordinary course of business including their values as shown in the accounting records of the Group and of the Company had been written down to an amount which they might be expected so to realise.
At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading.
VALUATION METHODS
At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
DIRECTORS’ REPORT (CONTINUED)
CONTINGENT AND OTHER LIABILITIES At the date of this report, there does not exist:
(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; and
(ii) any contingent liabilities in respect of the Group or of the Company which has arisen since the end of the financial year.
In the opinion of the directors, no contingent or other liability of the Group or of the Company has become enforceable, or is likely to become enforceable, within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations as and when they fall due.
CHANGE OF CIRCUMSTANCES
At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.
ITEMS OF MATERIAL AND UNUSUAL NATURE In the opinion of the directors,
(i) the results of the operations of the Group and of the Company for the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and
(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.
2010/2020 WARRANTS (“Warrants”)
On 8 March 2010, the Company announced that 42,666,666 units of 2010/2020 Warrants issued pursuant to the corporate exercises were listed and quoted on the Main Market of Bursa Malaysia Securities Berhad. The warrants were issued at an issue price of RM0.01 per warrant. The warrants issued are constituted under a Deed Poll executed and constituted by the Company.
The salient features of the Warrants are disclosed in Note 18 to the financial statements. The movement in the warrants during the financial year are as follows:
Number of Warrants
At At
01.01.2020 Exercised Expired 31.12.2020
Warrants 3,795,979 (3,114,996) (680,983) –
The unexercised Warrants of 680,983 have since expired on 28 February 2020.
ISSUE OF SHARES AND DEBENTURES
During the financial year, the Company increased its issued and fully paid-up share capital through the issuance of 3,114,996 ordinary shares via the exercise of 3,114,996 warrants 2010/2020 at the exercise price of RM0.25 each per ordinary share.
The new ordinary shares issued during the financial year rank pari-passu in all respects with the existing ordinary shares of the Company.
During the financial year, no new issue of debentures was made by the Company.
TREASURY SHARES
Treasury shares relate to ordinary shares of the Company that are repurchased and held by the Company in accordance with the requirement of Section 127 of the Companies Act 2016 in Malaysia.
There was no resale, cancellation or distribution of treasury shares during the financial year.
As at 31 December 2020, the Company held 1,878,000 treasury shares out of its 567,745,681 issued and paid-up ordinary shares. Such treasury shares are held at a carrying amount of RM1,612,908. Further details are disclosed in Note 17 to the financial statements.
OPTIONS GRANTED OVER UNISSUED SHARES
No options were granted to any person to take up the unissued shares of the Company during the financial year.
DIRECTORS
The directors in office during the financial year and during the period from the end of the financial year to the date of the report are:
Yoong Tein Seng @ Yong Kian Seng*
(Alternate director to Yoong Hau Chun) Yoong Hau Chun*
Yoong Li Yen*
Lim Kah Poon Bailey Policarpio Loo Chin Meng Yoong Yan Pin
Sundra Moorthi A/L V.M. Krishnasamy Thye Heng Ong @ Teh Heng Ong
* Directors of the Company and certain subsidiaries.
Other than as stated above, the names of the directors of the subsidiaries of the Company in office during the financial year and during the period from the end of the financial year to the date of the report are:
Peh Ju Chai
DIRECTORS’ REPORT (CONTINUED)
DIRECTORS’ REPORT (CONTINUED)
DIRECTORS’ INTERESTS
According to the Register of Directors’ Shareholdings required to be kept by the Company under Section 59 of the Companies Act 2016 in Malaysia, the interests of directors in office at the end of the financial year in shares and warrants in the Company and its related corporations during the financial year were as follows:
Interests in the Company
Number of ordinary shares
At At
1 January 31 December
2020 Bought Sold 2020
Direct interests
Yoong Hau Chun 1,403,850 100,000 – 1,503,850
Lim Kah Poon 200,000 – – 200,000
Bailey Policarpio 126,664 – – 126,664
Yoong Li Yen 1,672,532 – – 1,672,532
Yoong Tein Seng @ Yong Kian Seng (Alternate director to
Yoong Hau Chun) 303,000 – – 303,000
Loo Chin Meng 370,000 – – 370,000
Sundra Moorthi A/L V. M.
Krishnasamy – 4,000,000 – 4,000,000
Indirect interests
Yoong Hau Chun (1) 185,177,191 – – 185,177,191
Lim Kah Poon (2) 84,000 – – 84,000
Bailey Policarpio (3) 1,672,532 – – 1,672,532
Yoong Li Yen (4) 183,581,841 100,000 – 183,681,841
Yoong Tein Seng @ Yong Kian Seng (Alternate director to
Yoong Hau Chun) (5) 195,730,837 100,000 – 195,830,837
Loo Chin Meng (6) 4,292,000 – – 4,292,000
(1) Deemed interested by virtue of Section 8 of the Companies Act 2016 in Malaysia, shareholdings held through Tenson Holdings Sdn. Bhd., a substantial shareholder of both Firama Holdings Sdn. Bhd. and HeveaWood Industries Sdn.
Bhd., and by virtue of his family relationship with Tan Ya Ling, his spouse, Yoong Tein Seng @ Yong Kian Seng, his father and Yoong Li Yen, his sister and deemed interested by virtue of HeveaWood Industries Sdn. Bhd. being entitled to control the exercise of 100% of the votes attached to the voting shares in Gemas Ria Sdn. Bhd..
(2) Deemed interested by virtue of his relationship with Chua Sew Yin @ Chuah Chai Ean, his spouse.
(3) Deemed interested by virtue of his relationship with Yoong Li Yen, his spouse.
(4) Deemed interested by virtue of her family relationship with Bailey Policarpio, her spouse, Yoong Tein Seng @ Yong Kian Seng, her father, Yoong Hau Chun, her brother and deemed interested by virtue of HeveaWood Industries Sdn.
Bhd., being entitled to control the exercise of 100% of the votes attached to the voting shares in Gemas Ria Sdn.
Bhd..
(5) Deemed interested by virtue of his relationship with Yoong Hau Chun, his son, Yoong Li Yen, Yoong Li Mian, Yoong Li Bing and Yoong Li Xian, his daughters and deemed interested by virtue of HeveaWood Industries Sdn. Bhd. being entitled to control the exercise of 100% of the votes attached to the voting shares in Gemas Ria Sdn. Bhd.
(6) Deemed interested by virtue of his relationship with Dato’ Loo Swee Chew, his father.
DIRECTORS’ INTERESTS (CONTINUED) Interests in the Company (Continued)
By virtue of their shareholdings in the ordinary shares of the Company, Yoong Tein Seng @ Yong Kian Seng, Yoong Hau Chun and Yoong Li Yen are deemed to have interests in shares in the subsidiaries to the extent of the Company’s interest, in accordance with Section 8 of the Companies Act 2016 in Malaysia.
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable, by the directors as disclosed in Note 30 to the financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.
Neither during, nor at the end of the financial year, was the Company a party to any arrangements where the object is to enable the directors to acquire benefits by means of the acquisition of shares in, or debentures of the Company or any other body corporate, other than those arising from the 2010/2020 Warrant issued.
INDEMNITY TO DIRECTORS AND OFFICERS
During the financial year, the total amount of indemnity coverage for the directors and officers of the Company were RM5,000,000 and the insurance premium paid were RM14,320 respectively.
SUBSIDIARIES
The details of the Company’s subsidiaries are disclosed in Note 7 to the financial statements.
SIGNIFICANT EVENTS DURING AND SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
Details of significant events during and subsequent to the end of the financial year are disclosed in Note 35 to the financial statements.
DIRECTORS’ REPORT (CONTINUED)
AUDITORS
The auditors, Messrs Baker Tilly Monteiro Heng PLT, have expressed their willingness to continue in office.
The details of the auditors’ remuneration are disclosed in Note 25 to the financial statements.
The Company has agreed to indemnify the auditors of the Company as permitted under Section 289 of the Companies Act 2016 in Malaysia.
This report was approved and signed on behalf of the Board of Directors in accordance with a resolution of the directors:
_________________________
YOONG HAU CHUN Director
_________________________
YOONG LI YEN Director
Date: 14 April 2021
DIRECTORS’ REPORT (CONTINUED)