NTPM HOLDINGS BERHAD
Registration No. 199601012313 (384662-U)
(Incorporated in Malaysia)
Summary of key matters discussed at the Twenty-fourth Annual General Meeting ("24th AGM") of the Company held at Bukit Jawi Golf Resort, 691, Main Road, Sungai Bakap, 14200 Seberang Perai Selatan, Pulau Pinang on Friday, 25 September 2020 at 9.30 a.m..
Attendees:
- All members of the Board of Directors
- Company Secretary
- Representatives from Messrs. Ernst & Young, the external auditors
- Shareholders / Proxies / Authorised Representative / Invitees and others as per attendance list
AGENDA 1
AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 APRIL 2020 TOGETHER WITH THE REPORTS OF THE DIRECTORS AND AUDITORS THEREON
The Company's Audited Financial Statements for the financial year ended 30 April 2020 together with the Reports of Directors and Auditors ("AFS 2020") were tabled to the meeting.
It was noted that the Company had on 21 September 2020 received a letter from the Minority Shareholder Watch Group ("MSWG"), who had raised some questions on the Company's Strategic and Financial matters and Corporate Governance. The Meeting noted the reply from the Company to MSWG's queries, which are summarised as follows: -
Questions raised by the MSWG and Company's reply
Strategic and Financial Matters
- The Company launched its baby diaper products in Vietnam in June 2020 and this line of business is expected to contribute positively to the Company for FYE 2021? (Page 4 of AR 2020)
-
What are the projected sales for this business for FYE 2021?
Company's reply
The projected sales for baby diapers products launched in Vietnam market is in the range of RM1 million to RM3 million for the financial year ending 30 April 2021 ("FYE 2021"). - What are the expected margins for this business?
Company's reply
The Company targets to achieve 30% of profit margin from the sales of baby diapers products in Vietnam.
-
What are the projected sales for this business for FYE 2021?
- Loans and Borrowings of the Company had risen sharply from RM279.2 million in FYE 2019 to RM369.5 million in FYE 2020 representing an increase of 32.3% (Page 65 of AR 2020. What were the reasons for this increase?
Company's reply
The increase in the total borrowings of the Group was mainly due to the investment in recycled facility, wrapping and core board machines, other related equipment and also to increase the inventory of pulp and waste paper given the drop in its price.
NTPM HOLDINGS BERHAD
Registration No. 199601012313 (384662-U)
(Incorporated in Malaysia)
Summary of key matters discussed at 24th AGM
- The company had made an impairment charge of RM275,568 for receivables in FYE 2020 (Page 68 of AR 2020).
-
What were the reasons for the impairment?
Company's reply
The impairment of trade receivable for the financial year ended 30 April 2020 was mainly due to the estimation of the amount of doubtful debt that might be unable to pay off and decelerate of cash collections since the onslaught of COVID- 19 pandemic. - What are the chances of collecting the impaired amounts?
Company's reply
The Company estimates there is 50% probability that the amount due will be collected and will continue to monitor the collection closely for the recovery of receivables. - How much of the impaired amounts have been collected to-date?
Company's reply
As at to-date, 20% of the impaired amounts have been collected by the Company. - With the weakening economy, does the company foresee Impairments rising sharply in FYE 2021?
Company's reply
Based on Asian Development Bank (ADB) report, the economy will continue to be affected by the adverse effects of the pandemic, especially for travel, tourism and hospitality industries caused by travel restrictions. However, the Group will continue to strengthen its internal control on credit risk management and closely monitor on the collection to minimise the exposure.
-
What were the reasons for the impairment?
Corporate Governance Matters
-
The Company's Chairman and Managing Director for FYE 2020 were Mr. Lee
See Jin.
This is not in line with Practice 1.3 of the MCCG 2017 which stipulates that the
CEO and the Chairman's position should be held by different people.
Does the Company intend to adopt Practice 1.3? If so, by when.
Company's reply
Mr. Lee See Jin who has joined the Group since 1996, has considerable experience in the Group's businesses and provides leadership for the Board in considering and setting the overall strategies and objectives of the Company has been re-designated as the Chairman cum the Group Managing Director in March 2019.
2
NTPM HOLDINGS BERHAD
Registration No. 199601012313 (384662-U)
(Incorporated in Malaysia)
Summary of key matters discussed at 24th AGM
The Board is of the view that it is in the interest of the Company to maintain the above arrangement so that the Board could have the benefit of a Chairman who is knowledgeable about the businesses of the Group, the territories globally in which the Group operates in, sets the overall strategies, conceptualizes plans and leads the execution of all major projects and investments, capable of guiding discussions at Board meetings and who is able to brief the Board in a timely manner on key issues and developments that may directly or indirectly affect any of the businesses of the Group.
Even though the dual roles of Chairman and Managing Director is held by Mr. Lee See Jin but the role of Group CEO is held by Mr. Lee Chong Choon and there is a substantial difference in both of their roles in the daily operations of the Group.
Furthermore, with the appointment of Mr. Tan Choon Thye as an Independent and Non- Executive Director of the Company on 20 March 2020, there are additional experienced Independent Directors on the Board to provide check and balance so that no one individual has unfettered powers of decision making. The Board is mindful to ensure the appropriateness of the dual roles of the Chairman and Managing Director performed by the same individual and ensures that the arrangement will continue to be in the interests of the Company and its shareholders as a whole.
Apart from the above questions, the representative from MSWG, Mr. Khoo Choon Keat has further raised the following questions during the Meeting and the replied by the Group CEO, Mr. Lee Chong Choon ("Mr. Lee") and the Finance Manager, Ms. Lee Ai Chen were as follows:
-
Questions raised by the MSWG | Company's reply |
1. The projected sales and investment cost to | There is no investment in the machineries |
be incurred by baby diapers business of | for baby diapers business in Vietnam for |
NTPM (Vietnam) Co. Ltd ("NVCL") for the | the financial year ended 30 April 2021 |
financial year ending 30 April 2022 | ("FY2021") and FY2022 and the supply |
("FY2022") and whether the sales/profits | are solely from the production in Malaysia. |
generated would be able to cover the | |
finance cost to be incurred NVCL for its | The projected sales for baby diapers |
borrowings. | business in Vietnam for FY2022 is |
expected to be at least doubled as | |
compared to FY2021. Due to the value of | |
baby diapers is higher than tissue papers, | |
the launching of baby diapers has brought | |
the saving in operating cost due to sharing | |
of sales cost and delivery cost, hence this | |
enhanced the profit of the Company. | |
With the new machine starting its | |
operation by end of last year, the | |
Management believes NVCL will pay back | |
its loan starting from next financial year. |
2. The total capital work-in-progress on the All the investment for tissue paper
plant and machinery committed during the | machines has been completed last year. |
financial year 2020 was amounted to | With the added 3 paper machines (one |
RM147 million. What is the amount of this | machine in Penang and two machines in |
Vietnam) when running at full capacity, | |
3 |
NTPM HOLDINGS BERHAD
Registration No. 199601012313 (384662-U)
(Incorporated in Malaysia)
Summary of key matters discussed at 24th AGM
plant and machinery will contribute to the will generate a total revenue of
Group's total revenue?approximately RM300 million to the Group.
3. The reason of increase in indirect tax The increase in indirect tax recoverable
recoverable from RM16 million in financial | was due to Value-Added Tax ("VAT") for |
year 2019 to RM19 million in financial year | NVCL. NVCL will only allowed to recover |
2020. | this VAT when it is in profitable position. |
In addition to the above, the shareholders also raised further questions during the Meeting and the replied by Mr. Lee were as below: -
Key matters raised | Response from the Company |
by the shareholders | |
1. The dropped in raw material (pulp) price The global pulp price remained strong for and the demand of the tissue paper should the 1st and 2nd quarter of FY2020 and have be increased during the lock-down in started to drop from 3rd quarter of FY2020
many countries due to COVID-19onward. Due to the stock holdings, we pandemic, the Group should have benefited were still operating in high pulp price for from this as a tissue papers manufacturer. 1st and 2nd quarters of FY2020 and only enjoyed the low pulp price in operation
The Group's debts has increased to RM380 from 3rd quarter of FY2020 onward. million which was 80% of the shareholders'
funds and the dividend declared to Other factors resulted the Group's low shareholders has also been reduced from profit such as: -
RM2.90 sen in year 2011 to RM1.60 in year 2020.
What is the plan to be implemented by the Company to improve the performance of the Group back to same as past years?
4
NTPM HOLDINGS BERHAD
Registration No. 199601012313 (384662-U)
(Incorporated in Malaysia)
Summary of key matters discussed at 24th AGM
Key matters raised | Response from the Company |
by the shareholders | |
2. The strategy of Group on e-commerceThe online sales of the Group have been
going forward.increased from RM100,000 to RM400,000
per month during the Movement Control Order ("MCO") period. The Company has expanded its online team to cater for the online sales.
The Group enjoyed 50% of total market in Malaysia for the consumers from traditional trade and modern trade.
During MCO period, the sales from away from home segment (hotel, airline, shopping mall, food & beverage, hospital and offices) has dropped drastically due to restriction of movement and travelling by the government. The panic buying of toilet rolls in Malaysia during the MCO period was not so serious as happened in other countries.
The Group has developed its traditional trade facilities in terms of sales forces, delivery and merchandising. During the MCO period, the sales from traditional trade increase by 10% and was more than the sales from modern trade (from shopping mall) due to time constraints on shopping.
For the online sales, the entries barrier is very low. The Company need to be mindful in growing its online sales, as the fixed cost incurred for the traditional trade and modern trade is much higher than the cost for online sales. The price for the Company's products is almost same for both online sales and offline sales.
The Group choose to growth its online sales in its own way due to it have other benefit to take care. The Group decided to grow the business of selling recycle tissue papers on online and planning to launch brown colour recycle tissue paper to target online sales.
5
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NTPM Holdings Bhd published this content on 26 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 August 2021 03:40:01 UTC.