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Milux Sales & Service Sdn BhdNo. 9 & 11, Jalan Haji Abdul Karim 29/KS2, Taman Perindustrian Sungai Jati,

41200 Klang, Selangor Darul EhsanTel: 1800 88 MILUX (64589) Fax: 03-3377 1388

www.milux.com.my

A n n u a l R e p o r t 2 0 1 4

Q u a l i t y , S a f e t y , R e l i a b i l i t y .

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ILUX

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Place: Green 2, Main Wing, Club House, Tropicana Golf & Country Resort Jalan Kelab Tropicana 47410 Petaling Jaya Selangor Darul Ehsan

Date : 16 June 2015

Time : 2.30pm

MILUX CORPORATIOAN BERHAD (313619-W)

Annual Report 2014

20th ANNUAL

GENERAL MEETING

2 Notice of ANNuAl GeNerAl MeetiNG

4 corporAte iNforMAtioN

5 corporAte Structure

6 MANAGeMeNt’S DiScuSSioN AND ANAlySiS

9 DirectorS’ profile

15 5-yeAr Group fiNANciAl HiGHliGHtS

16 corporAte SociAl reSpoNSiBility StAteMeNt

20 corporAte GoverNANce StAteMeNt

38 ADDitioNAl coMpliANce iNforMAtioN

40 StAteMeNt oN riSk MANAGeMeNt AND iNterNAl coNtrol

44 DirectorS’ reSpoNSiBility StAteMeNt

45 AuDit AND riSk coMMittee report

52 fiNANciAl StAteMeNtS

112 liSt of Group propertieS

113 ANAlySiS of SHAreHolDiNGS

proxy forM

coNteNtS

MILUX CORPORATION BERHAD (313619-W)

2

Notice of tWeNtietH ANNuAl GeNerAl MeetiNG

NOTICE IS HEREBY GIVEN THAT the twentieth Annual General Meeting of the company will be held at Greens 2, Main Wing, club House, tropicana Golf & country resort, Jalan kelab tropicana, 47410 petaling Jaya, Selangor Darul ehsan on tuesday, 16 June 2015 at 2:30 p.m. or at any adjournment thereof for the following purposes:-

AGENDA

As Ordinary Business

1. ToreceivetheAuditedFinancialStatementsforthefinancialyearended31December2014together with the reports of the Directors and the Auditors thereon.

2. to re-elect the following Directors who retire in accordance with Article 80 of the Articles of Association of the company:-

(a) Mr. koh pee Seng; and(b) Datuk foo ton Hin

3. to re-appoint Messrs. Sekhar & tan as Auditors of the company until the conclusion of the

next Annual General Meeting and to authorise the Board of Directors of the company to determine their remuneration.

As Special Business Toconsiderand,ifthoughtfit,withorwithoutanymodification,topassthefollowingResolutions:- 4. ORDINARY RESOLUTION NO. 1 - PAYMENT OF DIRECTORS’ FEES

“tHAt the Directors’ fees amounting to rM112,500.00 (ringgit Malaysia: one Hundred twelve ThousandandFiveHundredonly)forthefinancialyearended31December2014,beandishereby approved for payment.”

5. ORDINARY RESOLUTION NO. 2 - AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965 “tHAt pursuant to Section 132D of the companies Act, 1965, and subject to the approvals of the

relevant governmental/regulatory authorities, the Directors be and are hereby empowered to issue and allot shares in the company, at any time to such persons and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion deem fit,providedthattheaggregatenumberofsharesissuedpursuanttothisResolutiondoesnotexceed ten per centum (10%) of the issued and paid-up share capital of the company for the time being and the Directors be and are also empowered to obtain approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad; AND tHAt such authority shall commence immediately upon the passing of this resolution and continue to be in force until the conclusion of the next Annual General Meeting of the company.”

6. to transact any other business of which due notice shall have been given in accordance with

the companies Act, 1965. By order of the Board CHUA SIEW CHUAN (MAicSA 0777689)CHENG CHIA PING (MAicSA 1032514)company Secretaries

kuala lumpurDated: 21 May 2015

(refer to Note 1)

(Resolution 1) (Resolution 2) (Resolution 3)

(Resolution 4)

(Resolution 5)

AnnuAl RepoRt 2014

3

Notice of twentieth Annual General Meeting (cont’d)

Explanatory Note to Special Business:

1. payment of Directors’ fees

the resolution 4, if approved, will authorise the payment of Directors’ fees pursuant to Article 89(a) of the Articles of Association of the company.

2. Authority to issue Shares pursuant to Section 132D of the companies Act, 1965

the company wishes to renew the mandate on the authority to issue shares pursuant to Section 132D of the companies Act, 1965 at the twentieth Annual General Meeting of the company (hereinafter referred to as the “General Mandate”).

the company had been granted a general mandate by its shareholders at the Nineteenth Annual General Meeting of the company held on 17 June 2014 (hereinafter referred to as the “previous Mandate”).

the previous Mandate granted by the shareholders had not been utilised and therefore no proceed has been raised pursuant to the previous Mandate.

the purpose to seek the General Mandate is to enable the Directors of the company to issue and allot shares at any time to such persons in their absolute discretion without convening a general meeting as it would be both time and cost-consuming to organise a general meeting solely for such issuance and allotment of shares. this authority unless revoked or varied by the company in a general meeting, will expire at the next Annual GeneralMeeting.TheproceedsraisedfromtheGeneralMandatewillprovideflexibilitytotheCompanyforanypossible fund raising activities, including but not limited to further placing of shares, for purpose of funding future investment project(s), working capital and/or acquisitions.

Notes:- 1. this Agenda item is meant for discussion only, as the provision of Section 169(1) of the companies Act, 1965 does

not require a formal approval for the Audited financial Statements from the shareholders. therefore, this Agenda item is not put forward for voting.

2. in respect of deposited securities, only members whose names appear in the record of Depositors on 9 June 2015 (“General Meeting record of Depositors”) shall be eligible to attend the Meeting.

3. A member entitled to attend and vote at the Meeting is entitled to appoint more than one (1) proxy to attend and vote in his/her stead (subject always to a maximum of two (2) proxies at each meeting). Where a member appointsmorethanone(1)proxy,theappointmentsshallbeinvalidunlesshe/shespecifiestheproportionsofhis/her shareholdings to be represented by each proxy.

4. A proxy may but does not need to be a member of the company and the provisions of Section 149 (1)(b) of the companies Act, 1965 need not be complied with. Notwithstanding this, a member entitled to attend and vote at the Meeting is entitled to appoint any person as his proxy to attend and vote instead of the member at the Meeting.Thereshallbenorestrictionastothequalificationoftheproxy.Aproxyappointedtoattendandvoteat the Meeting shall have the same rights as the member to speak at the Meeting.

5. in the case of a corporate member, the instrument appointing a proxy must be either under its common seal or underthehandofitsofficerorattorneydulyauthorised.

6. Where a member of the company is an exempt authorised nominee which holds ordinary shares in the company formultiplebeneficialownersinonesecuritiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

7. the instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed ornotariallycertifiedcopyofthatpowerofauthoritymustbedepositedattheCompany’sRegisteredOfficeatlevel 7, Menara Milenium, Jalan Damanlela, pusat Bandar Damansara, Damansara Heights, 50490 kuala lumpur not less than forty-eight (48) hours before the time for holding the Meeting or any adjournment thereof.


4

corporAte iNforMAtioN

Board of Directors

Koh Pee SengGroup Managing Director

Dato’ Mohamed Salleh Bin BajuriExecutive Director

Datuk Foo Ton HinNon-Independent Non-Executive Director

Dato’ Lim Kooi TingSenior Independent Non-Executive Director

Ang Joo SengIndependent Non-Executive Director

Tan Chee HowNon-Independent Non-Executive Director

Audit and Risk Committee

Dato’ Lim Kooi Ting - chairmanSenior Independent Non-Executive Director

Datuk Foo Ton Hin Non-Independent Non-Executive Director


Nomination & Remuneration Committee

Dato’ Lim Kooi Ting - chairmanSenior Independent Non-Executive Director

Datuk Foo Ton HinNon-Independent Non-Executive Director


Company Secretaries

Chua Siew Chuan (MAicSA 0777689)

Cheng Chia Ping (MAicSA 1032514)

Registered Office

level 7, Menara Milenium,Jalan Damanlela,pusat Bandar Damansara,Damansara Heights, 50490 kuala lumpur

tel : 03 – 2084 9000fax : 03 – 2094 9940

Principal Place of Business

No. 9 & 11, Jalan Haji Abdul karim 29/kS2,taman perindustrian Sungai Jati, 41200 klang,Selangor Darul ehsan

tel : 03 – 3371 3399fax : 03 – 3371 7833

Share Registrar

Symphony Share registrars Sdn Bhdlevel 6, Symphony House,Block D13, pusat Dagangan Dana 1,Jalan pJu 1A/46,47301 petaling Jaya, Selangor Darul ehsan.

tel : 03 – 7841 8000fax : 03 – 7841 8008

Auditors

Messrs Sekhar & tan (Af : 0926)chartered Accountants Suite 16-8, level 16,Wisma uoA 11No. 21, Jalan pinang,p.o. Box 1056850718 kuala lumpur

tel : 03 – 2170 2688fax : 03 – 2171 1987

Bankers

AmBank (M) BerhadciMB Bank BerhadMalayan Banking Berhadunited overseas Bank (Malaysia) Berhad

Stock Exchange Listing

Main MarketBursa Malaysia Securities Berhad Stock Code : 7935Stock Name : Milux

Corporate Website

www.milux.com.my

AnnuAl RepoRt 2014

5

corporAte Structure

Milux Corporation Berhad

Holding company

T.H. Hin Sdn. Bhd.dealer in gas cookers, electrical household appliances and their related products

T.H. Hin Hometech Sdn. Bhd.manufacturing of gas cookers, electrical household appliances and their related products

Brightyield Sdn Bhdmanufacturing of gas cooker component parts and their related products

Brightyield Die-Casting Sdn. Bhd. in the process of striking off

Enamel Products Sdn. Bhd.manufacturing of enamel products.

Milux Sales & Service Sdn. Bhd.dealer in gas cookers, electrical household appliances and their related products

Eurobay Industries Sdn. Bhd.manufacturing and supplying of home electrical appliances

Milux International Sdn BhdInactive with rental income

Pansprint Consolidated Sdn. Bhd. Inactive

Andersen’s of Denmark (M) Sdn. Bhd. Inactive

Milux GreenTech Resources Sdn. Bhd.(formerly known as Milux Agro Resources Sdn. Bhd.) Inactive

Milux Properties Sdn. Bhd. Inactive

Milux Home Appliances (India) Private LimitedCeased operation

Milux Industry (Zhong Shan) Co. Ltd. Ceased operation

100% 100%

100%

100%

100%

100%

100%

100%

100%

60%

100%

100%

99%

100%


6

MANAGeMeNt’S DiScuSSioN AND ANAlySiS

on behalf of the Board of Directors of Milux corporation Berhad, we are pleased to present the Annual report and Audited financial StatementsoftheGroupandoftheCompanyforthefinancialyearended 31 December 2014.

Financial Review

TheGroup recorded a net revenue of RM57.01million for financial year ended31December2014.Asthefinancialresultsfortheprecedingfinancialyearweremade up of 16 months to 31 December 2013, no comparison will therefore be made against it.

ThegroupreportedagrossprofitofRM9.46millionwhilelossbeforetaxamountedto rM3.82 million and loss after tax of rM4.05 million. the loss before tax was arrived at after accruing for gains on disposal of properties of rM1.02 million while impairment of rM0.51 million & rM 0.94 million was made for trade receivables and slow moving inventories respectively. the Group also incurred rM 0.16 million incorporateexpensesrelatedtoitsunsuccessfuldiversificationintoironoreminingduring the year.

cash and cash equivalent of the Group as at 31 December 2014 stood at rM 12.12 million compared to rM 11.14 million as at 31 December 2013. the Group shareholders’ fund stood at rM 47.73 million whilst net assets per share amounted to rM 0.88.

Review of Operations

For the financial year under review, theGroup’s Export divisionwhich primarily focuses its business as anOriginalEquipmentManufacturerremainedprofitabledespitethevolatileeconomicconditionsintheadvancedeconomiesin 2014. export revenue amounted to rM 19.65 million or 34.5% of the Group’s net revenue for the year.

the domestic gas and electrical home appliances trading division remained loss making. revenue for this division amounted to rM 37.36 million or 65.5% of the Group’s net revenue. the domestic market was largely affected by the strengthening of the uS Dollar against ringgit Malaysia and the continued stiff competition in the market place. Actions are continuously being taken to streamline the operations of the domestic trading division to turn it around.

Future Prospects

the Group is principally engaged in the manufacturing and trading of gas and electrical appliances.

the Group is expected to focus on venturing and capturing both existing and new overseas markets. Despite much uncertainty in the global economy, the export sector is expected to remain resilient with the on-going recovery in the united States economy. the weaker ringgit to the uS Dollar will provide us with an increasing competitive edge in these overseas market. the Group will continue to focus on the business as an original equipment manufacturer and will concentrateonimprovingproductivity,developcapabilitiesinleanandflexiblemanufacturing,effectiveutilizationofresources and cost control so as to remain competitive in the international arena.

the domestic market is expected to experience decreasing consumer purchasing power in 2015 with the implementation of Goods & Services tax (“GSt“). A slow down is expected due to the impact from rising cost as a result of the strengthening of uS Dollar against ringgit Malaysia. in this challenging business environment, the Group will focus onimprovingsourcingofproductsandrightsizingitshumanresourcessoastocutcostsforthedomesticsalesdivision.

While the Group will continue to focus on this current core business, it is on the look out for opportunities to diversify its sourceofrevenueandincomeafterhavingtoabortitsdiversificationprogrammeintoironoreminingin2014duetothe slump in iron ore price.

AnnuAl RepoRt 2014

7

Management’s Discussion And Analysis (cont’d)

Corporate Developments

on 25 March 2014, an announcement was made to Bursa Malaysia Securities Berhad (“Bursa Securities”) that the company proposes to undertake the following proposals :-

(i) proposed Share Split involving the subdivision of every one (1) existing ordinary share of rM1.00 each in the company into two (2) ordinary shares of rM 0.50 each (“proposed Share Split”);

(ii) proposed amendment to the company’s Memorandum of Association to facilitate the implementation of the proposed Share Split (“proposed Amendment”);

(iii) proposed renounceable rights issue of up to 87,058,070 shares together with 87,058,070 free detachable warrants issued with the rights Shares at an indicative issue price of rM 0.50 per rights Share on the basis of four (4) rights sharesforeveryfive(5)Sharestogetherwithone(1)WarrantforeveryRightsSharesubscribedaftertheProposedShare Split (“proposed rights issue With Warrants”); and

(iv) ProposeddiversificationofthebusinessoftheGroupintotheironorebusiness(“ProposedDiversification”). On24March2014, inconjunctionwith theProposedDiversification, theCompany,via itswhollyownedsubsidiary,pansprint consolidated Sdn. Bhd. (“pansprint”), was appointed by principle Mining Sdn Bhd (“pMSB”) vide an off take and Mining cooperation Agreement as the sole contractor to operate an iron ore mine located in a piece of land measuring approximately 22.76 hectares located at kampung Baru, Mukim tembeling, Jerantut, pahang (“the Mine”) and conduct mining exploration at Sg. Sepli, Mukim of Hulu cheka, Daerah Jerantut (“the exploration Area”).

on 9 April 2014, Mr. lee chee kiang was appointed as a Director of the company. He was subsequently appointed as a member of Audit and risk committee on 23 April 2014.

on 23 May 2014, an announcement was made that the additional listing application in connection with the proposals has been submitted to Bursa Securities.

Mr. Ang chin Joo, Senior independent Non-executive Director retired at the 19th Annual General Meeting held on 17 June 2014.

on 19 June 2014, an announcement was made that Bursa Securities had vide its letter dated 18 June 2014 resolved toapprovetheProposedShareSplit,admissiontotheOfficialListandthelistingandquotationforupto87,058,070warrants to be issued pursuant to the proposed rights issue With Warrants, listing of and quotation for up to 87,058,070 new ordinary shares of rM0.50 each to be issued pursuant to the proposed rights issue With Warrants and listing of and quotation for up to 87,058,070 new ordinary shares of rM0.50 each to be issued pursuant to the exercise of warrants subject to conditions stating therein.

on 4 July 2014, an announcement was made to Bursa Securities that pMSB and pansprint have mutually agreed and consented to extend the cut-off Date of the off take and Mining cooperation Agreement made on 24 March 2014 to 24 December 2014 to facilitate the compliance of the condition precedents. on the same date, an announcement was also made that the company has submitted an application for extension of time of up to 8 August 2014 to issue the circular to shareholders in relation to the proposals.

on 8 July 2014, an announcement was made to Bursa Securities that Bursa Securities has vide its letter dated 8 July 2014 approved the extension of time until 8 August 2014 to comply with paragraph 9.33 (1)(b) of the Main Market listing requirements of Bursa Securities in relation to the issuance of the circular to shareholders.

on 9 December 2014, an announcement was made to Bursa Securities that pansprint and pMSB through their authorised representatives have mutually executed an agreement to terminate the off take and Mining cooperation Agreement dated 24 March 2014 with immediate effect (“termination Agreement”). pursuant to the termination Agreement, the parties agreed that neither pansprint nor pMSB shall have any recourse to the other party for any loss and expense incurred by each of them in respect thereof. on the same day, Mr. lee chee kiang has tendered his resignation as Director and as a member of the company’s Audit and risk committee.

on 19 December 2014, Mr. lakatwu rappang Bin lakila tendered his resignation as Director of the company.

on 2 April 2015, an announcement was made to Bursa Securities that Milux Agro resources Sdn. Bhd. has changed its name to Milux Greentech resources Sdn. Bhd. on 31 March 2015.


8

Management’s Discussion And Analysis (cont’d)

Corporate Social Resposibility

TheGroupacknowledgesthesignificanceofitsCorporateSocialResponsibilityandviewsitasanintegralpartoftheorganisation’s way of succeeding in business and contributing to the welfare of employees in particular and society at large.

ForfurtherdetailsontheCorporateSocialResponsibilityactivitiesundertakenduringthefinancialyearended2014,please refer to corporate Social responsibility Statement on pages 16 to 19.

Appreciation

the Management would like to take this opportunity to thank the staff of the Group for their support, dedication and commitment and to our Board of Directors for their guidance throughout the year.

Toourvaluedcustomers,financiers,businessassociates,Governmentauthoritiesandshareholders,oursincerethankstoyouallforyourcontinuedsupport,co-operationandconfidenceintheGroup.

koH pee SeNGGroup Managing Director

21 April 2015

AnnuAl RepoRt 2014

9

DirectorS’ profile

Koh Pee Seng, 64Group Managing DirectorMalaysian

Date of appointment as Director :

Length of service as director :since appointment(as at 21 May 2015)

Board Committee(s) served on :

Academic/ Professional :Qualification(s)

Present Directorship(s) in :Other Public Listed Companies

Working experience :

Time committed :

27 April 2006

9 years 0 month

Nil

• MasterinBusinessAdministration(AsianInstituteof Management)

• BachelorofSciencefromMonashUniversityinAustralia

Nil

Mr. koh was appointed as the Group Managing Director on 20 April 2012. He was initially appointed as independent Non-executive Director of the company on 27 April 2006 and was subsequently re-designated as executive Director on 30 october 2007.

He joined Heller factoring (S) ltd in 1977 where he worked for 5 years before he left his position of Manager for General Manager in Matang factoring Sdn Bhd in 1983.

He joined Arab-Malaysian Merchant Bank Berhad in December 1984 as General Manager and then moved to Arab-Malaysian finance Berhad in 1987 where he held the position of Senior General Manager. in March 1992, he ventured into stock broking industry as Deputy chief executive of JB Securities Sdn Bhd till 1994. presently, he sits on the Board of numerous private limited companies which are involved primarily in the business of property development, agrobusiness and sport and leisure activities.

Mr. koh attended all the 7 Board Meetings.


10

Directors’Profile (cont’d)

Dato’ Mohamed Salleh Bin Bajuri, 64executive DirectorMalaysian






19 May 2005

10 years 0 month

Nil

• CharteredAccountantfromIreland• MemberofMalaysianInstituteofAccountants

(MiA)

• AsianPacHoldingsBerhadGroup• EdenInc.Berhad• Harbour-LinkGroupBerhad• Sam Engineering & Equipment (M) Berhad

(formerly known as lkt industrial Berhad)


Time committed :

Dato’ Salleh was appointed as independent Non-executive Director on 19 May 2005. He was re-designated as a Non-independent Non-executive Director on 29 December 2005 and subsequently on 1 September 2006, Dato’ Salleh was re-designated as an executive Director.

He came back to Malaysia in 1979, and joined peat Marwick & co. as its Senior Auditor. He then joined Mayban finance Bhd. as a Manager and in 1982, was promoted to General Manager. He was later seconded to Malayan Banking Bhd and promoted to General Manager in 1988, a position he held until 1992. Between 1982 & 1987, Dato’ Salleh was the Alternate chairman of the Association of finance companies in Malaysia (AfcM) and was chairman of AfcM committees for education and public relations. from 1997 to 1999, he was a Director of Amanah Saham Sabah Berhad and was one of the trustees for yayasan kebajikan SDArA and also tabung Melayu pontian Sdn. Bhd. He was also the chairman of Agrobank Berhad (formerly known as Bank pertanian Malaysia Berhad) from 2008 to 2010.

In1992,Dato’SallehtookoverJBSecuritiesSdn.Bhd.,astockbrokingfirminJohor.He was the Managing Director of JB Securities from 1992 to 1995. He then, in 1995 joined crSc Group of companies which is involved in property development and he is presently the Deputy chairman of the company. He also sits on the Board of Asian pac Holdings Berhad Group, eden inc. Berhad, Harbour-link Group Berhad and Sam engineering & equipment (M) Berhad (formerly known as lkt industrial Berhad). He is the trustee and treasurer for tan Sri Muhyiddin charity Golf foundation.

Dato’ Salleh attended all the 7 Board Meetings.

AnnuAl RepoRt 2014

11

Datuk Foo Ton Hin, 59Non-independent Non-executive DirectorMalaysian


Length of service as director :since re-designation on20 April 2012 (as at 21 May 2015)





Time committed :

20 March 2006

3 years 1 month

• MemberoftheAuditandRiskCommittee• Member of Nomination and Remuneration

committee

• Advocate and Solicitor of the HighCourt ofMalaya

• B.A(Honours)DegreeinEconomics• LLB (Honours) Degree & Certificate in Legal

practise• Graduatememberof theChartered Institute

of Marketing of united kingdom

Nil

Datuk foo was appointed as independent Non-executive Director of the company on 20 March 2006 and was subsequently re-designated as Non-independent Non-executive Director on 20 April 2012.

Datuk foo has more than 30 years experiences in financial management, commercial &investment banking and the corporate sector and was instrumental in the admission and listing of the apparel manufacturers, tai Wah Garments Manufacturing Berhad and Jerasia capital Berhad [which he co-founded] on Bursa Malaysia Securities Berhad. He also previously served as a Director and/or Group Managing Director of panGlobal Berhad, econstates Berhad, Jerasia capital Berhad and panGlobal insurance Berhad.

Datuk foo currently serves as a Director/trustee of 1 Malaysia community Alliance foundation (formerly known as yayasan crSM) and chairman of Badan Amal, Wangsa Maju [NGo]. currently, he practises law under the style of t H foo & Associates.

Datuk foo was conferred the award of panglima Mahkota Wilayah [p.M.W.] by the DyMM Seri paduka Baginda yang Di-pertuan Agung in 2014 which carries the title ‘Datuk”.

Datuk foo attended all the 7 Board Meetings.



12

Ang Joo Seng, 57independent Non-executive DirectorMalaysian







Time committed :

2 August 2010

4 years 9 months

• MemberofAuditandRiskCommittee• Member of Nomination and Remuneration

committee

• SijilPelajaranMalaysia

Nil

Mr. Ang has vast experience in the business of trading of various merchandising items in Sarawak and peninsular Malaysia. currently, he is more actively involved in the business of fertilizerdistribution in Malaysia and china (mainly in the area of phosphate, which is one of three main ingredients inFertilizercompounding)viaDestinasiemas Sdn. Bhd.

He currently sits on the Board of several private limited companies.

Mr. Ang attended 6 out of the 7 Board Meetings.


AnnuAl RepoRt 2014

13


Dato’ Lim Kooi Ting, 66Senior independent Non-executive DirectorMalaysian







28 May 2012

2 years 11 months

• ChairmanoftheAuditandRiskCommittee• Chairman of the Nomination and

remuneration committee

• BachelorofCommerceDegreefromBombayuniversity, india

Nil

Dato’ Lim was first appointed to the Company’sBoard as Group Managing Director on 24 November 1995. Dato’ lim was subsequently re-designated as an executive Director on 23 September 2005. upon his retirement on 1 September 2006, Dato’ lim was re-designated as a Non-independent Non-executive Director of the company. Dato’ lim subsequently resigned from the company’s Board on 29 May 2009 and was re-appointed as independent Non-executive Director of the company on 28 May 2012.

Dato’ lim has been re-designated as the Senior independent Non-executive Director with effect from 21 April 2015.

Dato’ lim joined t.H. Hin Sdn. Bhd., a company principally involved in the import and trading of electrical gas and household appliances, as Managing Director in 1977. in 1986, he established PT Howezen Casting Industry in Indonesia tomanufacture household electrical products and gas cookers and appliances.

During his tenure with the Milux Group, Dato’ lim was deeply involved in research & development, marketing, contract arrangement and supervision of all types of products manufactured by the Group.

Dato’ lim attended 4 out of the 7 Board Meetings. Time committed :


14


Tan Chee How, 34Non-independent Non-executive DirectorMalaysian







Time committed :

30 May 2013

1 year 11 months

Nil

• Bachelor’s Degree in Marketing andManagement from curtin university, perth Australia

• CharteredInstituteofMarketingCertificate• ABEDiplomafromSunwayCollege

Nil

upon graduating in 2002, Mr. tan joined chin Huat trading Sdn Bhd as a Sales & Marketing executive and was promoted to Assistant General Manager in 2007. in february 2009, he joined t.H. Hin Sdn Bhd, a subsidiary of the company, as a Sales & Marketing executive and was promoted to General Affairs Manager, Service & logistics in January 2010. in June 2010, Mr. tan was transferred to euro uno Sales & Service Sdn Bhd, now known as Milux Sales & Service Sdn Bhd, another subsidiary of the company, as General Manager, Sales. in November 2011, he was redesignated to General Manager, operations to oversee the running of the company’s subsidiaries namely, t.H. Hin Sdn Bhd, Milux Sales & Service Sdn Bhd, Brightyield Sdn Bhd and eurobay industries Sdn Bhd.

Mr. tan currently sits on the Board of the company’s subsidiaries. in addition, he also sits on the Board of several other family owned private limited companies.

Mr. tan attended all the 7 Board Meetings.

Notes:-

(1) Family relationship None of the Directors have family relationship with any Director/major shareholder of the company

(2) Conflict of Interests Other than permitted related party transactions, none of the Directors have any conflict of interests with the

company.

(3) Conviction of offences NoneoftheDirectorshavebeenconvictedofanyoffencewithinthepastten(10)yearsotherthantrafficoffences

(if any).

AnnuAl RepoRt 2014

15

5 - yeAr Group fiNANciAl HiGHliGHtS

2014 2013 2012 2011 2010 RM’000 RM‘000 RM‘000 RM‘000 RM‘000 (16 months) (As restated) revenue 57,012 79,742 61,297 79,241 87,690 Profit/(Loss)BeforeIncomeTax (3,824) (8,987) (2,707) 4,886 (9,202) Profit/(Loss)fromcontinuingoperations (4,051) (9,426) (2,909) 4,778 (9,696) Profit/(Loss)fromdiscontinuedoperations - - - (10,546) (3,483) Profit/(Loss)fortheyear (4,051) (9,426) (2,909) (5,768) (13,179) Net earnings/(loss) per Share (sen)-from (7.56) (19.24) (6.24) 10.24 (28.72) continuing operations Net earnings/(loss) per Share (sen)-from - - - (22.62) - discontinued operations Net Assets per Share (rM) 0.88 0.94 1.14 1.20 1.32 Shareholders’ funds 47,726 46,682 53,257 56,166 61,638 total Assets 56,903 58,197 82,296 86,277 110,553 total liabilities 9,177 11,514 29,038 30,111 48,914 Gross Dividend per ordinary Share (sen) - - - - -

REVENUERM’000

TOTAL ASSETSRM’000

0

20

40

60

80

100

120

0

20

40

60

80

100

120

2013 2014201220112010 2013 2014201220112010

79,2

4187,6

90

86,2

77

110,

553

61,

297 79,

742

82,2

96

57,0

12

58,

197

56,

903


16

corporAte SociAl reSpoNSiBility StAteMeNt

TheGroupacknowledgesthesignificanceofitsCorporateSocialResponsibility(“CSR”)andviewsitasanintegralpartof the organisation’s way of succeeding in business and contributing to the welfare of employees in particular and society at large.

Mindful of employees’ welfare, the Group ensures that efforts are made to provide a conducive working environment to its employees.

BursaMalaysia Berhad (“BursaMalaysia”) has definedCSRas “openand transparent business practices that arebased on ethical values and respect for the community, employees, the environment, shareholders…it is designed to deliver sustainable value to society at large.”

the Group has adopted the Bursa Malaysia’s cSr framework which was launched in 2006 as a set of guidelines for Malaysian public listed companies who wish to practice cSr. the Group’s cSr framework covers the following four (4) areas:-

Workplace

• Traininganddevelopment• Workplacediversity• Healthyandsafeworkingenvironment• Employees’wellbeing

Environment

• Environmental consideration in decision makingprocess

Community

• Contributiontoselectedbodies

Marketplace

• Corporategovernance• Dedicatedsectionatcorporatewebsite

the Group has undertaken various activities during the year which have positive impact on the wellbeing of our employees, the community, the environment and the marketplace.

(1) Workplace

With the ever-evolving electrical and electronics (“e&e”) sector in which the Group operates in, it is imperative that the Group continues to invest in our employees.

(a) Training and development training programmes, both internal and external, are organised to deliver an all-round training experience

to our employees by upgrading their skill sets, job knowledge and competency level in achieving an overall increase in productivity.

respect and considerations of our colleagues are the work culture of the Group. training programmes and job rotations are in place for employees in assisting them to work towards their goals and aspirations.

As part of the programme to get all employees familiar with GSt prior to its implementation on 1 April 2015, the Group engaged the services of an external consultant to carry out a series of in-house training for employees of all levels.

(b) Workplace Diversity the Group embraces diversity at workplace and we do not allow room for any form of discriminatory

practice against people of different gender, age, ethnicity, nationality or marital status.

By employing a diverse workforce, the Group is able to have a better understanding of today’s dynamic market demographics. it has also enable the Group to tap into a pool of people from diverse background who can provide unique market insights or generate creative solutions, thereby increasing the Group’s competitiveness in today’s globalised and challenging economy.

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Gender diversity

As at 31 March 2015, the Group already has a Male/female ratio of 75:25. Mindful of the Government’s initiatives of having 30% of women participation in the workplace, the relevant Human resource Department has been instructed to provide due consideration to gender diversity during their recruitment of new employees.

Age diversity

As at 31 March 2015, 27% of our employees belong to the age group of between 26 to 36 with the next largest age group being those aged between 36 to 45 (26%). this is in line with the demographics of the country whereby the age group of between 26 to 45 made up more than half of the population.

corporate Social responsibility Statement (cont’d)

WORKFORCE IN TERMS OF GENDER

WORKFORCE IN TERMS OF AGE

25%

75%

female

Male

27%

13%

7%

26%

6%

21%

Below 21

26 - 36

46 - 55

21 - 25

36 - 45

Above 55


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Ethnicity diversity

As at 31 March 2015, employees of other ethnicity constituted the largest workforce of the Group at 44%, with the chinese ethnicity staff being the next largest workforce at 34%. Moving forward, the relevant Human resource Department has been encouraged to ensure a well balance hiring of staff during their recruitment process.

WORKFORCE IN TERMS OF ETHNICITY

44%34%

6%

16%

Malay

chinese

indian

other

(c) Healthy and Safe working environment We continuously strive to provide a healthy and safe working environment for our employees. the Group

maintains practices that comply with acceptable standard of safety and health in the workplace. Workersatthefactoryfloorareprovidedwithsafetyshoesandalsoearmuffsfortheirpersonalwellbeing. All workers and staff are also provided personal Accident and Hospital and Surgical insurance coverage.

(d) Employees’ well being the Group have via its Human resource Department organised sporting events for its employees.

employees are encouraged to participate in the weekly badminton games organised for employees. the Group on an annual basis also organised Annual Dinner to accord due recognition and appreciation towards the employees of the Group whereby loyal employees are awarded with long service awards in recognition of their contribution to the Group.

(2) Environment

the Group takes into account environmental factors in all its decision making process and explores feasible opportunities to minimise any adverse impact from its manufacturing operations, waste disposals and product quality, design and packaging.

(3) Community

the Group recognises that the community plays an essential role in driving the success of its business.

in view thereof, the Group has made its contribution back to society a cornerstone of its cr activities. for fye 2014, as part of giving back to the community, the Group made contributions to bodies like tabung pembinaan SJkc Wangsa Maju, kuala lumpur; tabung Dermawan Dewan perniagaan cina and pertubuhan kebajikan insan penyayang pulau pinang.


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(4) Marketplace

(a) Corporate Disclosure Practices the Group recognises the importance of timely and thorough dissemination of accurate and useful

information relating to our operations to stakeholders. in this regard, Management strictly adhere to the disclosure requirements of Bursa Securities and the Malaysian Accounting Standards Board. in fact, this Annual report contains comprehensive information pertaining to the Group, while various disclosures on financialresultsprovidestakeholderswiththelatestfinancialinformationontheGroup.

(b) Dedicated sections at corporate website Apart from the mandatory public announcements through Bursa Securities, the Group’s website at www.

milux.com.myprovidesthepublicwithconvenientandtimelyaccesstobusinessupdates,andfinancialandnon-financial information.Furthermore,stakeholdersareabletodirectqueriestotheGroupviathiswebsite.

Any enquiry regarding investor relations from the shareholders may be conveyed to the following designated senior management personnel, the information of which has also been published on the company’s corporate Website:-

(i) Mr. Wong Wai Keong,ChiefFinancialOfficer email address: [email protected]

(ii) Dato’ Mohamed Salleh Bin Bajuri, executive Director email address: [email protected]



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corporAte GoverNANce StAteMeNt

the Board of Directors of Milux corporation Berhad (“Board”) recognises the importance of ensuring high standard of corporate governance practices are implemented and maintained throughout the company and its subsidiaries (“the Group”) as a fundamental part of discharging its responsibilities to safeguard the long term interest of its shareholders and other stakeholders consistent with the principles and best practices set out in the Malaysian code on corporate Governance 2012 (“MccG 2012”).

this statement also serves to comply with paragraph 15.25 of the Main Market listing requirements of Bursa Malaysia Securities Berhad (“Main lr”) (“Bursa Securities”).

(I) ESTABLISH CLEAR ROLES AND RESPONSIBILITIES

(1) Clear Functions of the Board and Management

Board of Directors (“Board”)

the Board is responsible for the leadership, oversight and the long-term success of the Group.

the Board has made the following commitment:-

Milux’s Commitment

Milux is committed to provide top quality and innovative products which are in line with the Company’s philosophy of delivering products with “Quality, Safety and Reliability”.

in order to achieve the Milux’s commitment, the Board has established, amongst others, a formal schedule of matters reserved for the Board and those delegated to Management.

the Board has established a Board charter on 25 february 2014 to provide guidance and clarity for Directors and Management with regard to the roles of the Board, the Board committees as well as those of Management.

the formal schedule of matters reserved for the Board has been duly stipulated in the Board charter.

Management’s Function

As stipulated in the Board charter, all Board authority conferred on Management is delegated through the Group Managing Director (“Group MD”) so that the authority and accountability of the Management is considered to be the authority and accountability of the Group MD in so far as the Board is concerned.

in the normal course of events, day-to-day management of the company will be in the hands of Management and under the stewardship of the Group MD.

the Group MD is expected to keep the Board informed on all matters which may materially affect the company and its business.

(2) Clear Roles and Responsibilities of the Board

the Board assumes responsibility for stewardship of the Group and has established its terms of reference in the form of a Board charter to assist it in the discharge of this responsibility.

the role and responsibilities of the Board broadly covers the following:-

(a) Reviewing and adopting a strategic plan for the Company

TheBoardplaysanactiveroleintheestablishmentoftheCompany’sstrategicplan.Foreachfinancialyear, Management would present to the Board the proposed business plans as well as the annual budget for the year. the Board reviews and deliberates those documents at great length, as well as challenging Management’s underlying assumptions, prior to approving the same for adoption.

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corporate Governance Statement (cont’d)

the above process has been carried out prior to the company’s announcement dated 25 March 2014 inrelationtotheproposeddiversificationintoironorebusinessbyPansprintConsolidatedSdn.Bhd.,awholly-ownedsubsidiaryoftheCompany(hereinafterreferredtoas“ProposedDiversification”).

(b) Overseeing the conduct of the Company’s business

the Board monitors the performance of Management on a regular basis vide the insertion of relevant agenda item in the Board Meetings. the Group MD is required to brief the Board on the operational performanceoftheGroupwhiletheChiefFinancialOfficer(“CFO”)isrequiredtopresentaquarterlyreportonthefinancialperformanceoftheGroup.

As with any other business proposal, the Board has conducted regular reviews on the business environmentanduponrecommendationofManagement,abortedtheProposedDiversificationon9 December 2014 due to deteriorating market condition of the iron ore industry. this indicated the Board’s resilience in making the necessary business decision to adapt to changing circumstances.

(c) Identification of principal risks and implementation of appropriate internal controls and mitigation measures

the Audit and risk committee (“Arc”) has been entrusted by the Board to identify, evaluate, monitor and manage any relevant major risk faced by the Group so that the Group will achieve its business objectives. However, the Board as a whole remains responsible for all the actions of the Arc with regard to the execution of the delegated role and this includes the outcome of the review and disclosure on key risks and internal control in the company’s annual reports.

Details of the six principal residual risks identified and the relevant internal control andmitigationmeasures are set out in the Statement on risk Management and internal control on pages 40 to 43 of this Annual report.

(d) Succession Planning

the Board recognises that succession planning is an ongoing process designed to ensure that the Groupidentifiesanddevelopsatalentpoolofemployeesthroughmentoring,trainingandjobrotationfor high level management positions that become vacant due to retirement, resignation, death or disability and/or new business opportunities.

(e) Overseeing the development and implementation of a shareholder communications policy for the company

the Board is aware of Milux’s commitment to enhancing long term shareholders’ value through regular communication with all its shareholders, irregardless of individual or institutional investors (hereinafter referred to as “the Shareholders”.)

in consequence thereto, the Board has established a Shareholders’ communication policy in order to provide guidance as well as ensuring a consistent approach towards the company’s communication with the Shareholders.

(f) Reviewing the adequacy and the integrity of the Group’s internal control systems and management information systems

the Board has established key control processes to ensure there is a sound framework of reporting on internal controls and regulatory compliance. Details pertaining to the Group’s internal control system and its effectiveness are set out in the Statement on risk Management and internal control on pages 40 to 43 of this Annual report.


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(3) Code of Ethics and Conduct

the Board has adopted a code of ethics and conduct (“the code”) which sets forth the values, expectations and standards of business ethics and conduct to guide the Board, the Management and employees of the Group. the code is adopted to maintain the highest level of integrity and ethical conduct of the Board, Management and employees of Milux Group.

the code is established to promote a corporate culture which engenders ethical conduct that permeates throughout the company and Group. the guiding principles of the code are as follow:-

(i) Show respect in the workplace;-• EqualOpportunity• Anti-Harassment• HumanRights• EnsuringWorkplaceHealthandSafety• ProtectionofPrivacy• UseofCompany’sAssetswithDueCare• LeadingbyExample• ContinuousTrainingandDevelopment

(ii) Act with integrity in the marketplace:-• EnsuringProducts’Quality,SafetyandReliability• ResponsibleSalesandMarketingPractices• Milux’sCustomers• Milux’sSuppliers• CommunityInvolvement• Environmental-FriendlyPractices

(iii) ensure ethics in business relationships:-• ConflictofInterest• Anti-Corruption• Anti-MoneyLaundering• InsiderTrading

(iv) ensure effective communication:-• CorporateDisclosure• Spokesman• WhistleBlowing

Whistle Blowing

TheGroup’sWhistle Blowingpracticeshavebeenencapsulated in theCode. It isa specificmeansbywhichanemployee/officerorstakeholdercanreportordisclosethroughestablishedchannels,concernsabout any violations of the code, unethical behaviour, malpractices, illegal acts or failure to comply with regulatory requirements that is taking place / has taken place / may take place in the future.

Handling of Reported Allegation(s)

the Arc is responsible for the interpretation and supervision of the enforcement of this Whistle Blowing procedure. the action to be taken by the Group in response to a report of concern will depend on the nature of the concern. the Arc shall receive information on each report of concern and ensure that follow-up actions be taken accordingly.


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Communication and Feedback Channels

report(s) can be made in verbal or in writing in the following manners:-

• By Letter – to be forwarded in a sealed envelope to the below mentioned designated person and labelled with a legend, “to be opened by the Senior independent Non-executive Director only”; or

• By Email – to be forwarded vide secure email to the below mentioned designated person with the heading, “for the eyes of the Senior independent Non-executive Director only”.

the code will be reviewed biennially or as and when required to ensure the information remains relevant and appropriate.

A summary copy of this code is available for viewing on the company’s corporate website at www.milux.com.my.

(4) Promote Sustainability

the Board views the commitment to sustainability and environmental, Social and Governance (“eSG”) performance as part of its broader responsibility to clients, shareholders and the communities in which it operates.

the Board is aware of the importance of business sustainability with the priority being focused on restoring thefinancialhealthoftheCompany.Uponthat,theBoardwouldthenconsidertheESGaspectsofbusinesswhich underpins sustainability.

(5) Access to Information and Advice

the Board meeting is held at least quarterly, and more frequently as and when business or operational needs arise. All Board members are supplied with information on a timely manner. Board papers are circulated prior to Boardmeetingsand the reports provide, amongst others, financial andcorporate information,significant financial and corporate issues, the Group’s performance and any management proposalswhich require the approval of the Board.

All Directors have access to the advice and services of the company Secretary in furtherance of their duties. Where appropriate, the Directors may obtain independent professional advice at the company’s expenseonspecificissuestoenabletheBoardtomakewell-informeddecisionsindischargingtheirdutieson the matters being deliberated.

Formattersrelatingtofinancialreporting;unethicalorillegalconduct;employment-relatedconcerns;or of any other nature, one can report directly to the following designated person:-

Senior Independent Non-Executive Director

Dato’ Lim Kooi Ting postal Address:-

No. 9 & 11, Jalan Haji Abdul Karim 29/KS2,Taman Perindustrian Sungai Jati,41200 Klang, Selangor Darul Ehsan

email Address:[email protected]


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(6) Company Secretaries

the appointment and removal of the company Secretaries is a matter for the Board. All Directors have access to the advice and services of the company Secretaries, who are responsible for ensuring that board procedures are followed and that applicable rules and regulations are complied with. Also, the company Secretaries ensure that the deliberations at the Board meetings are well captured and minuted.

All two appointed company Secretaries are members of the Malaysian institute of chartered Secretaries andAdministrators(“MAICSA”)andarequalifiedtoactascompanysecretaryunderSection139Aofthecompanies Act, 1965.

ThebriefprofileoftheCompanySecretariesareasfollows:-

(1) Ms. Chua Siew Chuan, FCIS

Ms. chua has been elected as a fellow Member of the MAicSA since 1997. She has more than 35 years of experience in handling corporate secretarial matters, with working knowledge of many industries and government services. She is currently the president of MAicSA.

Ms. chua is a chartered Secretary by profession. She is the Managing Director (“MD”) of Securities Services (Holdings) Sdn. Bhd., a prominent corporate secretarial service provider in Malaysia. Ms. chua is also the named company secretary for a number of public listed companies, public companies, private limited companies and societies.

Ms. chua has been appointed as company Secretary to the Group with effect from 3 october 2011.

(2) Mr. Cheng Chia Ping, ACIS

Mr. cheng has been elected as an Associate Member of the MAicSA since 2012. He has more than 10 years of experience in handling corporate secretarial matters, with working knowledge of many industriesandnon-profitorganisations.

Mr. cheng is a chartered Secretary by profession. He is a Manager (corporate Secretarial) of Securities Services (Holdings) Sdn. Bhd., a prominent corporate secretarial service provider in Malaysia. Mr. cheng is also the named company secretary for a number of public listed companies, public companies, private limited companies and societies.

Mr. cheng has been appointed as company Secretary to the Group with effect from 29 october 2012.

(7) Board Charter

the company has adopted a Board charter which governs how the company conducts its affairs. the Board charter sets out the composition, role, responsibilities, structure and processes of the Board. the objectives of this Board charter are to ensure that all Board members acting on behalf of the company are aware of their duties and responsibilities as Board members and the various legislations and regulations affecting their conduct and that the principles and practices of good corporate governance are applied in all their dealings in respect, and on behalf of, the company.

the Board charter entails the following:-• CompanyGoals;• BoardGovernanceProcess;• Board-ManagementRelationship;• Board-Shareholders’Relationship;• Stakeholders’Relationship;• CorporateGovernance;and• ApplicationofBoardCharter.

the Board will review the Board charter biennially and/or from time to time and make any necessary amendments to ensure they remain consistent with the Board’s objectives, current law and practices.

A full copy of the Board charter is available for viewing on the company’s corporate website at www.milux.com.my


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(II) STRENGTHEN COMPOSITION

(1) Board Committee

TheBoardhasputinplacethefollowingBoardCommitteestoassistincarryingoutitsfiduciaryduties:-• AuditandRiskCommittee;and• Nomination&RemunerationCommittee.

All of these committees have written terms of reference clearly outlining their objectives, duties and powers. ThefinaldecisionsonallmattersaredeterminedbytheBoardasawhole.

(2) Audit and Risk Committee (“ARC”)

the membership and terms of reference of the Arc is stated in the Arc report of this Annual report. A summary of the activities of the Arc during the year, including an evaluation of the independent audit process, is set out in the Arc report on pages 45 to 51 of this Annual report.

(3) Nomination & Remuneration Committee (“NRC”)

the Nrc comprises exclusively of non-executive directors, a majority of whom are independent, i.e. two (2) independent Non-executive Directors and one (1) Non-independent Non-executive Director as follows:-

Number of NRC Meetings attended / held in the financial year under Name Designation Directorship review

Dato’ lim kooi ting chairman Senior independent Non-executive Director 2/3

Datuk foo ton Hin Member Non-independent Non-executive Director 3/3

Ang Joo Seng Member independent Non-executive Director 3/3

Ang chin Joo chairman Senior independent Non-executive Director 2/2(retired on 17 June 2014)

TheNRCmetthreetimesduringthefinancialyearunderreview.

Dato’ lim kooi ting, the Senior independent Non-executive Director of the company has been elected as the chairman by the Nrc with effect from 25 November 2014.

the principal objectives of the Nrc are:-

• toassisttheBoardofDirectorsintheirresponsibilitiesinnominatingandselectingnewnomineestotheBoard of Directors and to assess the Directors of the company on an on-going basis; and

• toassisttheBoardofDirectorsintheirresponsibilitiesinassessingtheremunerationpackagesoftheexecutive and non-executive directors.

(a) Activities undertaken during the financial year

Forthefinancialyearended31December2014,theNRChasundertakenthefollowingactivities:-

(i) reviewed the corporate Governance Statement before recommending for the Board’s approval and inclusion in the company’s Annual report.

(ii) reviewed the composition of the Nrc;


26

(iii) elected Dato’ lim kooi ting as the chairman of the Nrc;

(iv) conducted the peer-to-peer performance evaluation in accordance with following four (4) major criterias:-• ContributiontoBoardMeeting(s);• Qualityofinput;• Understandingofrole;and• Arisingfromthepeer-to-peerreview,reviewedthecontributionofeachDirectors.

(v) conducted the effectiveness of the Board evaluation to assess the effectiveness of the Board and Board committees in accordance with the eight (8) principles of the MccG 2012;

(vi) reviewed the independency of the independent Directors;

(vii) reviewed and recommended to the Board, the re-election of the Directors who will be retiring at the forthcoming Annual General Meeting (“AGM”) of the company;

(viii) ReviewedtheremunerationpackagesoftheGroupMDandExecutiveDirectorforthefinancialyear ending 31 December 2015;

(b) Develop, maintain and review criteria for recruitment and annual assessment of Directors

(i) Appointment of the Board and re-election of Directors Appointment of the Board

the policies and procedures for recruitment and appointment of Directors are set out in the Board charter.

pursuant to the terms of reference of Nrc, the Nrc is tasked to identify and select potential new Directors and to make recommendations to the Board for the appointment of Directors.

the Nrc reviews candidates for appointment as Directors based on the following criterias:-• qualifications;• skillsandcompetence;• functionalknowledge;• experience;• backgroundandcharacter;• integrityandprofessionalism;• timecommitment;and• in thecaseofcandidates for thepositionof INEDs,whether the testof independence

undertheMainLRofBursaSecuritiesissatisfied.

in its review of the potential candidates, the Nrc also considered the following additional criterias:-

• Prevailinggovernmentpoliciessuchasgenderdiversity;• OverallcompositionoftheBoard;• Boarddynamics;• ThecombinationofskillspossessedbyexistingDirectorstoensuretheselectedcandidate

would help close any possible gaps in the Board; and• FinancialhealthoftheGroup.

As part of its evaluation procedures, representative(s) of the Nrc will conduct an informal interview with the potential candidate(s).

upon review, the Nrc shall make its recommendations to the Board of Directors for consideration.


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Re-election of Directors

Article 80 of the Articles of Association of the company states that one-third (1/3) of the Directors shallretirefromofficeandshallbeeligibleforre-electionateachAGM.AllDirectorsshallretirefromofficeat leastonce ineach three (3)yearsbut shallbeeligible for re-election.As suchpursuant to Article 80, the following Directors are to retire at the forthcoming twentieth AGM of the company (hereinafter referred to as “the retiring Directors”):-

• Mr.KohPeeSeng;and• DatukFooTonHin.

TheNRCweresatisfiedwiththeperformanceoftheRetiringDirectors.

pursuant to Article 87 of the company’s Articles of Association, any Director who are appointed eithertofillacasualvacancyorasanadditiontotheexistingDirectors,shallholdofficeuntilthenext AGM and shall be eligible for re-election but shall not be taken into account in determining the Directors who are to retire by rotations at that meeting.

pursuant to Section 129(2) of the companies Act, 1965, Directors who are or over the age of seventy (70) years shall retire at every AGM and may offer themselves for re-appointment to holdofficeuntiltheconclusionofthenextAGM.

there is no Director subject to re-appointment under either one of the abovementioned conditions at the forthcoming twentieth AGM of the company.

(c) Annual Assessment of the Board

the Nrc conducted the following assessments annually:-

(i) Directors’ self-assessment and peer assessment survey

in conducting the Survey, the following main criterias were adopted by the Nrc:-

(i) contribution to interaction; (ii) QualityofInput;and (iii) understanding of role.

BasedontheSurveyconductedforthefinancialyearended31December2014,theNRCwassatisfiedwith the performance of the individual Directors.

(ii) evaluation on the effectiveness of the Board as a Whole

in conducting the evaluation, the following main criterias were adopted by the Nrc:-

• Establishclearrolesandresponsibilities;• Strengthencomposition;• Reinforceindependence;• Fostercommitment;• Upholdintegrityinfinancialreporting;• Recogniseandmanagerisks;• Ensuretimelyandhighqualitydisclosure;• Strengthenrelationshipbetweencompanyandshareholders.

BasedontheEvaluationconductedforthefinancialyearended31December2014,theNRCwassatisfiedwiththeperformanceoftheBoardasawhole.

(d) Gender Diversity

the Board does not have any formal gender diversity policy. Notwithstanding that, the Board through the Nrc has ensured that gender diversity be included as one of the criteria to be considered in the recruitment of new Directors.


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(e) Ethnicity Diversity

Dato’ Mohamed Salleh Bin Bajuri, an executive Director of Malay ethnicity is overseeing the Group’s humanresources,financeandadministrativematters.

(f) Age Diversity

The Boardbelieves that theDirectorswith youngerageprofilewill beable toprovideadifferentperspective and bring vibrancy to the Group’s strategy making process.

ThegeneralageprofileofthemajorityoftheDirectorswerebetweenfiftiestosixtiesyearsofage.Notwithstanding that, Mr. tan chee How, a Non-independent Non-executive Director, is 34 years of age, which underlies the Board’s commitment to introducing age diversity at the Board level appointment.

(g) Directors’ Remuneration

the objectives of the Group’s policy on Directors’ remuneration are to attract and retain Directors of the calibre needed to manage the Group successfully. in the case of the Group MD and executive Director, the component parts of their remuneration are structured to link rewards to corporate and individual performances. For Non-Executive Directors, their level of remuneration reflects theexperience, expertise and level of responsibilities undertaken by the particular Non-executive Director concerned.

the amount of remuneration paid to Directors were disclosed in the Notes to the Audited financial Statements.

ThedetailsoftheremunerationpaidtoDirectorsduringthefinancialyearended31December2014are as follows:

Non- Executive Executive Directors Directors Total RM RM RM

Salary & allowances 600,000 - 600,000 Directors’ fees - 172,500 172,500 total 600,000 172,500 772,500

ThenumberofDirectorswhosetotalremunerationsderivedfromtheGroupduringthefinancialyear

under review that fall within the following bands is as follows:

Number of Directors Range of remuneration Executive Non-Executive

Below rM50,000 - 5* rM50,001 – rM200,000 1 - rM200,001 – rM500,000 1 -

Note: *inclusiveofDirectorswhohaveresigned/retiredduringthefinancialyear.

Directors Fees

only the Non-executive Directors are entitled to Directors’ fees. the Directors fees are at rM30,000/- per Director per annum. in view of the onerous duties assumed, the chairman of the Arc is accorded an additional rM5,000/- per annum while the chairman of the Nrc is entitled to an additional rM2,500/- per annum.


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For the financial year ended31December 2014,Directors’ Fees totallingRM112,500/- havebeenrecommended to the shareholders for approval at the forthcoming twentieth Annual General Meeting of the company.

(III) REINFORCE INDEPENDENCE

(1) Annual Assessment of Independence of Directors

TheBoardadoptstheconceptofindependenceintandemwiththedefinitionofIndependentDirectorinSection 1.01 of the Main lr of Bursa Securities through the assistance of the Nrc.

the Board noted that letters of Declaration has been executed by the following independent Non-ExecutiveDirectorsoftheCompany,confirmingtheirindependencepursuanttorelevantMainLRofBursaSecurities as well as the MccG 2012 and that they have undertaken to inform the company immediately should there be any change which could interfere with the exercise of their independent judgement or ability to act in the best interest of the company:-• Dato’LimKooiTing;and• Mr.AngJooSeng

Based on the outcome of the Directors’ self-assessment and peer assessment survey; the evaluation on the effectiveness of the Board as a whole, as well as the additional assessment on the independence of the IndependentDirectors, the Board is satisfiedwith the level of independencedemonstratedby theindependent Non-executive Directors and their ability to act in the best interest of the company.

the Board considers that its independent Directors provide objective and independent views on various issues dealt with at the Board and Board committee level. All Non-executive Directors are independent of management and free from any relationship. the Board is of the view that the current composition of independentdirectorsfairlyreflectstheinterestofminorityshareholdersintheCompanythroughtheBoardrepresentation.

(2) Tenure of Independent Directors

the MccG 2012 recommended that the tenure of an independent Director should not exceed a cumulative term of nine (9) years. upon completion of the nine (9) years’ term, an independent Director may continue to serve on the Board subject to the director’s re-designation as a non-independent director.

the Board believes that the length of tenure of independent Directors on the Board does not interfere with their objective and independent judgement or their ability to act in the best interest of the company.

Inviewthereof,theBoardshallprovidejustificationsandseekshareholders’approvalintheeventitproposesto retain an independent director who has served the Board in that capacity for more than nine (9) years.

the Board noted there were no independent Directors whose tenure exceeds a cumulative term of nine (9) years in the company thus far.

(3) Separation of Position of the Chairman and Group Managing Director

Notwithstanding the current vacant position of the Chairman of the Board, the Board re-affirmedits commitment of having a clearly accepted division of power and responsibilities at the head of the company to ensure a balance of power and authority. Such commitment have been incorporated into the Board charter which clearly outlines the role of the chairman as well as the role of the Group MD.

(4) Board Composition and Balance

the Board consists of six (6) members comprising two (2) executive Directors and four (4) Non-executive Directors. of the four (4) Non-executive Directors, two (2) are independent and therefore the prescribed requirementforonethirdofthemembershipoftheBoardtobeindependentBoardmembersisfulfilled.Thisindependent element brings an objective and independent judgement to the decision-making process of theBoard.ThebiographicaldetailsoftheBoardmembersaresetoutintheDirectors’Profileonpages9to14.


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the Board structure ensures that no individual or group of individuals dominates the Board’s decision-making process. the composition of the Board provides an effective blend of entrepreneurship, business andprofessionalexpertiseingeneralmanagement,finance,corporateaffairs,legalandtechnicalareasof the industry in which the Group operates. the individuality and vast experience of the Directors in arriving at collective decisions at board level will ensure impartiality.

(5) Senior Independent Non-Executive Director (“SINED”)

the Board has designated an independent Non-executive Director as SiNeD to whom concerns from shareholders/ stakeholders may be conveyed.

the responsibilities of SiNeD, as outlined in the Board charter, are as follow:-

• toserveasadesignatedcontactpersonforconsultationanddirectcommunicationwithshareholderson areas that cannot be resolved through the normal channels of contact with the company, at the expense of the company.

• to seekassistance from theGroupMD/EDand/orany seniorManagementof theCompany, if so

required, to resolve the issues raised by the shareholders to him.

• to seek advice from external professionals on a specific subject matter raised to him by theShareholders, at the expense of the company, if so required.

• toreporttotheBoardonanypertinent issuesraisedbytheShareholdersthatwarrantstheBoard’sattention and/or further action.

• to ensure all Independent Non-Executive Directors have an opportunity to provide input on theagenda and advise the chairman on the quality, quantity and timeliness of the information submitted by Management that is necessary or appropriate for the independent Non-executive Directors to perform their duties effectively;

• toserveasChairoftheNRCpursuanttoRecommendation2.1ofMCCG2012.

Mr. AngChin Joo,who served as the SINED during the financial year under review, has retired at theNineteenth AGM of the company held on 17 June 2014.

on 21 April 2015, the Board has re-designated Dato’ lim kooi ting as the new SiNeD, replacing the vacant officeleftbyMr.AngChinJoo.

Shareholders/ Stakeholders may address their concerns to the SiNeD in the following manners:-

• By Letter – to be forwarded in a sealed envelope and labelled with a legend “to be opened by the Senior independent Non-executive Director only”; or

• By Email – to be forwarded vide secure email with the heading “for the eyes of the Senior independent Non-executive Director only”.


Senior Independent Non-Executive Director

Dato’ Lim Kooi Ting postal Address:-

No. 9 & 11, Jalan Haji Abdul Karim 29/KS2,Taman Perindustrian Sungai Jati,41200 Klang, Selangor Darul Ehsan

email Address:[email protected]

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(IV) FOSTER COMMITMENT

(1) Time Commitment

TheBoardrequiresitsmemberstodevotesufficienttimetotheworkingsoftheBoard,toeffectivelydischargetheir duties as Directors of the company, and to use their best endeavours to attend meetings.

For the financial year ended 31December 2014, the Board hadconveneda total of seven (7) BoardMeetingsforthepurposesofdeliberatingontheCompany’squarterlyfinancialresultsattheendofeveryquarter and discussing important matters which demanded immediate attention and decision-making. During the Board Meetings, the Board reviewed the operation and performance of the company and other strategic issues that may affect the company’s business. relevant staff were invited to attend some of theBoardMeetingstoprovidetheBoardwiththeirviewsandclarificationsonissuesraisedbytheDirectors.

TheattendancerecordofeachDirectoratBoardofDirectors’Meetingsduringthelastfinancialyearisasfollows:-

Directors Attendance % of Attendance

koh pee Seng 7 out of 7 100Dato’ Mohamed Salleh Bin Bajuri 7 out of 7 100Datuk foo ton Hin 7 out of 7 100Ang Joo Seng 6 out of 7 86Dato’ lim kooi ting* 4 out of 7 57tan chee How 7 out of 7 100Ang chin Joo 4 out of 5 80(retired on 17 June 2014) lakatwu rappang Bin lakila 6 out of 7 86(resigned on 19 December 2014) lee chee kiang# 1 out of 4 25(resigned on 9 December 2014)

* Dato’ lim kooi ting, who is based in penang, has extended his apologies for absence at three of the Board of Directors’ Meeting which were called at short notice due to urgent nature of agenda business while he was overseas.

# Mr. lee chee kiang, who is based in Sabah, has extended his apologies for absence at three of the Board of Directors’ Meeting which were called at short notice due to urgent nature of agenda business while he has prior business commitments. Mindful that he would not be able to commit time for the company due to his other business commitments, Mr. lee chee kiang has tendered his resignation as Director of the company with effect from 9 December 2014.

the Board will also meet on an ad-hoc basis to deliberate urgent issues and matters that require expeditious Board direction or approval. in the intervals between Board meetings, any matters requiring urgent Board decisions and/or approval can be sought via circular resolutions which are supported with all the relevant information and explanations required for an informed decision to be made.

Annual Meeting Timetable

in facilitating the schedule of the Directors, the company Secretaries will prepare and circulate in advance an annual meeting timetable, which includes all the proposed meeting dates for Board and Board committee Meetings, as well as the AGM. upon the concurrence by all the Board members, the annual meetingtimetablewillbeadoptedfortheapplicablefinancialyear.


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(2) Trainings

the Board acknowledges the importance of continuous education and training to equip themselves for the effective discharge of its duties. New appointees to the Board undergo a familiarisation programme, which includes visits to the Group’s business operations and meetings with key management to facilitate their understanding of the Group’s operations and businesses.

All members of the Board have attended the Mandatory Accreditation programme prescribed by Bursa Securities.

Duringthefinancialyearunderreview,theDirectorshadparticipatedinfollowingtraining/briefings:-


Name of Directors

koh pee Seng

Dato’ Mohamed Salleh Bin Bajuri

Datuk foo ton Hin

Description of Trainings Attended • SeminarontheMalaysianPrivateEquityForumorganisedbyEkuiti

National Berhad.

• UpdatesbyMessrs.Sekhar&TanonthechangestotheMalaysianfinancial reporting Standards.

• InternalTechnicalBriefingonWasteTyrePyrolysisRecycling.

• Internal Industry Briefing on Waste Tyre Recycling in Malaysia –prospects and potentials.

• BriefingbytheCompanySecretaryontheAmendmentstoMainLRof Bursa Securities.


• InternalbriefingontheprocessofPyrolysisWasteTyreRecycling.


• SeminarontheMalaysianPrivateEquityForumorganisedbyEkuitiNational Berhad.





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Description of Trainings Attended










• InternalTechnicalBriefingonWasteTyrePyrolysisRecycling

• Internal Industry Briefing on Waste Tyre Recycling in Malaysia –prospects and potentials


Name of Directors

Ang Joo Seng

Dato’ lim kooi ting

tan chee How

in addition, the company Secretaries and the external auditors update the Board on a regular basis the respective changes and amendments to regulatory requirements and laws and accounting standards to help Directors keep abreast of such developments.

(V) UPHOLD INTEGRITY IN FINANCIAL REPORTING

(1) Compliance with Applicable Financial Reporting Standards

TheCompany’sauditedfinancial statementsareprepared inaccordancewiththerequirementsof theapplicable approved accounting standards in Malaysia and the provisions of the companies Act, 1965 (“Act”).

TheARCassisttheBoardtooverseethefinancialreportingprocessandthequalityofitsfinancialreportingby reviewing the information to be disclosed, to ensure completeness, accuracy and adequacy prior to endorsing the same to the Board for release to Bursa Securities and Securities commission Malaysia.

the Board ensures that shareholders are presented with a clear, balanced, meaningful assessment of the Company’sfinancialperformanceandprospectsthroughtheissuanceoftheauditedfinancialstatementsandquarterlyannouncementsoffinancialresultsonatimelybasisandincompliancewiththeapplicablefinancialreportingstandards.



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(2) Assessment of Sustainability and Independence of External Auditors

For the financial yearended31December 2014, theARChas formalised theprocedures toassess thesuitability and independence of external auditors vide an annual assessment of the suitability and independence of the external auditors.

in its assessment, the Arc considered, inter alia, the following factors:-

• The External Auditors have theadequate resources, skills, knowledgeandexperience to performtheir duties with professional competence and due care in accordance with approved professional auditing standards and applicable regulatory and legal requirements;

• TotheknowledgeoftheARC,theExternalAuditorsdonothaveanyrecordofdisciplinaryactionstaken against them for unprofessional conduct by the Malaysian institute of Accountants (“MiA”) which has not been reversed by the Disciplinary Board of MiA;

• Theengagementpartnerhasnotservedforacontinuousperiodofmorethanfive(5)yearswiththecompany;

• TheexternalauditfirmhasthegeographicalcoveragerequiredtoaudittheCompany;• TheexternalauditfirmadvisestheARConsignificantissuesandnewdevelopmentspertainingtorisk

management,corporategovernance,financialreportingstandardsandinternalcontrolsonatimelybasis;

• TheexternalauditfirmconsistentlymeetsthedeadlinessetbytheCompany;• Thelevelofqualitycontrolproceduresintheexternalauditfirm,includingtheauditreviewprocedures;• TheARCreceiveswrittenassurancefromtheexternalauditorsconfirmingthattheyare,andhave

been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements; and

• TheexternalauditscopeisadequatetocoverthekeyfinancialandoperationalrisksoftheCompany.

Uponcompletionofitsassessment,theARCwassatisfiedwithMessrs.Sekhar&Tan’stechnicalcompetencyandauditindependenceduringthefinancialyearunderreviewandrecommendedtotheBoardthere-appointmentofMessrs.Sekhar&TanasExternalAuditorsforthefinancialyearending31December2015.the Board has in turn recommended the same for shareholders’ approval at the forthcoming twentieth AGM of the company.

(VI) RECOGNISE AND MANAGE RISKS

(1) Sound Framework to Manage Risks

TheBoardaffirmstheimportanceofmaintainingasoundsystemofinternalcontrolsandriskmanagementpractices to good corporate governance. the Arc has been entrusted by the Board to ensure effectiveness of the Group’s internal control systems. the activities of the outsourced internal Auditors are reported regularly to the Arc which provides the Board with the required assurance in relation to the adequacy and integrity of the Group’s internal control systems. it acknowledges its overall responsibility in this area and also the need to review its effectiveness regularly.

the Statement on risk Management and internal control of the Group as set out on pages 40 to 43 of the

Annual report provides an overview of the state of risk management and internal controls within the Group.

(2) Internal Audit Function

the outsourced internal Auditors communicate regularly with and report directly to the Arc. the outsourced InternalAuditors’representativemetupfive(5)timeswiththeARCforthefinancialyearended31December2014.

the internal Audit review of the company’s operations encompasses an independent assessment of the company’s compliance with its internal controls and makes recommendations for improvement.


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For the financial yearended31December 2014, theARChas formalised theprocedures toassess theperformance of internal auditors vide an annual assessment of the suitability and independence of the internal auditors.

in its assessment, the Arc considered, inter alia, the following factors:-

• Understanding;• Charterandstructure;• Skillsandexperiences;• Communication;and• Performance;

Uponcompletionofitsassessment,theARCwassatisfiedwiththeoutsourcedInternalAuditor,PKFAdvisorySdn.Bhd.’stechnicalcompetencyandauditindependenceduringthefinancialyearunderreview.

(VII) ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

(1) Corporate Disclosure Policy

the company is committed to ensure that communications to the investing public regarding the business, operations and financial performance of the Company are accurate, timely, factual, informative,consistent,broadlydisseminatedandwherenecessary,informationfiledwithregulatorsisinaccordancewith applicable legal and regulatory requirements.

in line with that, the Board has adopted a corporate Disclosure policy to develop and maintain an established framework for making corporate disclosures.

the Directors of the company, the company Secretary, all employees of the company and its subsidiaries are obliged to observe the provisions of corporate Disclosure policy. Nonetheless, this policy does not cover the following:-

(i) material information that is already in the public domain;(ii) material information that is not generated or owned by the company;(iii) material information that summarises, realigns or is computed from material information that already

in the public domain.

this policy will be reviewed biennially or as and when it is required to ensure the information remains current and updated.

(2) Leverage on Information Technology for Effective Dissemination of Information

the company’s corporate website provides all relevant information on the company and is accessible by the public. it includes the announcements made by the company and annual reports. the Board discloses to the public all material information necessary for informed investment and takes reasonable steps to ensure that all shareholders enjoy equal access to such information.

the company’s corporate website is accessible at www.milux.com.my.

(VIII) STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS

(1) Shareholders’ Participation at General Meetings

the company communicates regularly with shareholders and investors through annual reports, quarterly financial reports and various announcements made via Bursa LINK as the Board acknowledges theimportance of accurate and timely dissemination of information to its shareholders, potential investors and the public in general.


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the AGM provides an opportunity for the shareholders to seek and clarify any issues pertaining to the Group and to have a better understanding of the Group’s activities and performance. Both individuals and institutional shareholders are encouraged to meet and communicate with the Board at the AGM and to vote on all resolutions. the Board is always available to meet members of the press after the AGM. All the Directors were present at the Nineteenth AGM of the company held on 17 June 2014 to engage with the shareholders personally and proactively.

the notice of Annual General Meeting together with the Annual report is dispatched to shareholders at

least twenty-one (21) days prior to the meeting date.

(2) Poll Voting

the Board noted recommendation 8.2 of MccG 2012 which states that the Board should encourage poll voting. in line with this recommendation, the chairman will inform the shareholders of their right to demand a poll vote at the commencement of the general meeting.

WherefeasibleandwithinthefinancialmeansoftheCompany,theBoardwillconsiderandexplorethesuitability and feasibility of adopting electronic voting in coming years to facilitate greater shareholders participation at general meeting(s).

(3) Shareholders

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