MINUTES OF THE NINETEENTH ANNUAL GENERAL MEETING OF THE COMPANY CONDUCTED FULLY VIRTUAL VIA ONLINE MEETING PLATFORM, TIIH ONLINE WEBSITE AT HTTPS://TIIH.ONLINE ON TUESDAY, 29 JUNE 2021 AT 2.30 P.M.
Tan Sri Dato’ Koon Poh Keong (Chairman and also Shareholder)Koon Poh Ming (Also Shareholder)Koon Poh Weng (Also Shareholder)Dato’ Koon Poh Tat (Also Shareholder)Loo Lean HockErnest Bong Miau Fatt (Also Shareholder)Noor Alina Binti Mohamad Faiz
Wan Shuw Yee – Financial ControllerTan Ai Ning - Company SecretaryEric Ong Beng Seng- External Auditor from KPMG PLT
The list of shareholders and proxies who attended the Nineteenth Annual General Meeting (“19th AGM”) are as set out in the Attendance Sheets and shall form an integral part of these minutes.
The Chairman of the Board of Directors (“Board”), Tan Sri Dato’ Koon Poh Keong presided as Chairman of the Meeting and welcomed all members, proxies and guests to the 19th AGM of the Company. The Meeting noted that this AGM was conducted fully virtual via online meeting platform at https://tiih.online which was in compliance with Section 327 of the Companies Act 2016 (“the Act”) and Guidance and Frequently Asked Questions of the Conduct of General Meetings for Listed Issuers issued by the Securities Commission Malaysia dated 1 June 2021. All meeting participants including the Chairman of the meeting, board members, senior management and shareholders participated virtually in this AGM.
Tan Sri Dato’ Chairman then proceeded to introduce the members of Board and the Company Secretary to the shareholders and proxies.
NOTICE OF MEETING
The Notice convening the Meeting, having been circulated in the prescribed period, was with the consent of the members present, taken as read.
QUORUM AND SUMMARY OF PROXIES RECEIVED
The Company Secretary confirmed that a quorum was present for the Meeting. With the requisite quorum being present, the Chairman called the Meeting to order at 2.30 p.m.
The Company Secretary then informed that based on the report issued by the Poll Administrator of the Company, a total 58 members comprising shareholders, proxies and corporate representatives, representing 76,042,978 ordinary shares or 36.25% of the total issued shares of the Company had registered for Remote Participation and Voting (“RPV”) facilities to participate in this AGM.
The Company Secretary further informed that a total 24 proxy forms received from shareholders for a total of 154,608,400 ordinary shares representing 73.70% of the total issued shares of the Company. Out of those, there were 16 shareholders appointed the Chairman of the Meeting as proxy to vote on their behalf and the shares so represented were 92,470,784 ordinary shares representing 44.08% of the total issued shares of the Company.
POLLING AND ADMINISTRATIVE GUIDE
Tan Sri Dato’ Chairman informed the Meeting that pursuant to the requirements of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), all resolutions set out in the Notice of the 19th AGM must be voted by poll. Accordingly, Tan Sri Dato’ Chairman directed all the resolutions set out in the Notice of the 19th AGM be conducted by way of poll.
Shareholders and proxies were informed that the questions posed by the shareholders and proxies before and during the AGM via the RPV facilities will be addressed after all the resolutions set out in the Notice of AGM had been tabled. The voting on the resolutions could be done at any time throughout the meeting until the closure of the voting session.
Tan Sri Dato’ Chairman further informed that the Company had appointed Tricor Investor & Issuing House Services Sdn Bhd to conduct the poll voting electronically and SKY Corporate Services Sdn Bhd as the Scrutineer to verify the poll results. The results of the poll voting will be announced after the Scrutineer verified the poll results upon closure of the voting session.
AS ORDINARY BUSINESS
AUDITED FINANCIAL STATEMENTS (“AFS”) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020 TOGETHER WITH THE REPORTS OF THE DIRECTORS AND AUDITORS’ THEREON
Tan Sri Dato’ Chairman informed the Meeting that the AFS for the financial year ended 31 December 2020 together with the Reports of the Directors and Auditors were meant for discussion only as the provision of Section 340(1)(a) of the Act does not require a formal approval of the shareholders.
It was recorded that the AFS for the financial year ended 31 December 2020 together with the Reports of the Directors and Auditors thereon were properly laid and had been duly received.
At the invitation of the Tan Sri Dato’ Chairman, the representative from the Management of the Company gave a brief overview on the operational highlights of the Company particularly on its subsidiaries, i.e. PMB Silicon Sdn Bhd, PMB Façade Technology Sdn Bhd and PMB Quick Access Sdn Bhd.
After the presentation, it was recorded that the AFS of the Company for the financial year ended 31 December 2020 together with the Reports of the Directors and Auditors thereon had been duly received and adopted by the shareholders
DIRECTORS’ FEES AND BENEFITS PAYABLE TO INDEPENDENT NON-EXECUTIVE DIRECTORS
Ordinary Resolution 1 is to approve the payment of Director’s fees and benefits payable to the Independent Non-Executive Directors of the Company up to an amount of RM170,000.00 for the financial year ending 31 Decenber 2021. The interested Directors have abstained from voting on the resolution.
RE-ELECTION OF MR KOON POH MING
Ordinary Resolutions 2 is on the re-election of Mr Koon Poh Ming who retires as Director of the Company pursuant to Clause 95 of the Constitution of the Company and being eligible, has offered himself for re-election.
RE-ELECTION OF MR KOON POH WENG
Ordinary Resolutions 3 is on the re-election of Mr Koon Poh Weng who retires as Director of the Company pursuant to Clause 95 of the Constitution of the Company and being eligible, has offered himself for re-election.
RE-APPOINTMENT OF KPMG PLT AS AUDITORS OF THE COMPANY
Ordinary Resolution 4 is on the re-appointment of KPMG PLT as Auditors of the Company for the financial year ending 31 December 2021 and to authorise the Directors to fix their remuneration.AS SPECIAL BUSINESS
AUTHORITY UNDER SECTION 76 OF THE ACT FOR THE DIRECTORS TO ISSUE AND ALLOT SHARES
Ordinary Resolution 5 is under Special Business to seek shareholders’ approval for the general mandate for issuance of shares pursuant to Section 76 of the Act. The mandate, if passed, will provide flexibility for the Company and empower the Directors to allot and issue new shares speedily in the Company up to an amount not exceeding in total 10% of the total number of issued shares of the Company for the purpose of funding the working capital or strategic development of the Company and its subsidiaries (“PMBT Group”).
AUTHORITY FOR MR LOO LEAN HOCK TO CONTINUE IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTOR
Ordinary Resolution 6 is to seek shareholder’s approval on the retention of Mr Loo Lean Hock as Independent Non-Executive Director of the Company pursuant to the Malyasia Code on Corporate Governance. Mr Loo Lean Hock has served as an Independent Non-Executive Director of the Company for a cumulative term of more than 12 years. The Board is satisfied with his performance as he has effectively applied his experience and knowledge to discharge his duties and responsibilities as Director of the Company.
AUTHORITY FOR MR ERNEST BONG MIAU FATT TO CONTINUE IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTOR
Ordinary Resolution 7 is to seek shareholder’s approval on the retention of Mr Ernest Bong Miau Fatt as Independent Non-Executive Director of the Company pursuant to the Malyasia Code on Corporate Governance. Mr Ernest Bong Miau Fatt has served as an Independent Non-Executive Director of the Company for a cumulative term of more than 12 years. The Board is satisfied with his performance as he is able to exercise independent judgement and act in the best interest of the Company.
PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR EXISTING RECURRENT RELATED PARTY TRANSACTIONS AND PROPOSED NEW SHAREHOLDERS’ MANDATE FOR ADDITIONAL RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
As Tan Sri Dato’ Chairman was an interested party in this resolution, he handed the Chair over to Mr Loo Lean Hock (“Mr Loo”) for deliberation of this resolution.
Mr Loo informed that Ordinary Resoultion 8 is to seek shareholder’s approval on the proposed renewal and proposed new shareholders’ mandate for the Group to enter into recurrent transactions of a revenue or trading nature with related parties.
He also informed that the interested Directors, interested Major Shareholders and the persons connected to them have abstained from voting on the resolution.
Mr. Loo then handed the Chair back to Tan Sri Dato’ Chairman.
PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN ORDINARY SHARES
Ordinary Resolution 9 is to obtain shareholders’ approval on proposed renewal of authority for the Company to purchase its own ordinary shares not exceeding 10% of the total number of issued shares of the Company at any point in time of purchase.
PROPOSED AMENDMENTS TO THE EXISTING CONSTITUTION OF THE COMPANY
The last item, a Special Resolution is to obtain shareholders’ approval for the proposed amendments to the existing Constitution of the Company. The proposed amendments were mainly made to provide greater clarity, enhance administrative efficiency and ensure compliance with the relevant statutory and regulatory requirements so as to update in accordance with the latest development of governance.
QUESTION AND ANSWER (“Q&A”) SESSION
The Company received some questions from shareholders prior to and during the AGM via query box. The Company Secretary and Mr Koon Poh Ming, the Chief Executive Officer (“CEO”) of the Company were invited to present and/or respond to the questions received prior to and during the AGM respectively, details as set out in Appendix I attached to this Minutes. The shareholders and proxies were informed that any question not addressed during the allocated time, responses will be reverted via email or made available on the Company’s website.
After having addressed the questions raised, Tan Sri Dato’ Chairman informed the Meeting that the voting session will be closed in 10 minutes and that the verification of the votes would take approximately 30 minutes. Tan Sri Dato’ Chairman placed on record that several shareholders have appointed him to be their proxy and will vote according to their instructions.
Tan Sri Dato’ Chairman further informed that the outcome of the poll would be announced after the short break as it would take some time for the Scrutineers to tabulate the results of the poll. The Meeting was then adjourned at 3.51 p.m.
Tan Sri Dato’ Chairman called the Meeting to order at 4.35 p.m. and the results are as follows:-
Ordinary Resolution 1
Votes in favour
No. of shares
Approval of Directors’ fees and benefits payable to the Independent Non-Executive Directors up to an aggregate amount of RM170,000 for the financial year ending 31 December 2021
It was RESOLVED:-
THAT the payment of Directors’ fees and benefits payable to the Independent Non-Executive Directors up to an aggregate amount of RM170,000 for the financial year ending 31 December 2021 be and is hereby approved.
Ordinary Resolution 2
Re-election of Mr Koon Poh Ming as Director
THAT Mr Koon Poh Ming who retired pursuant to Clause 95 of the Constitution of the Company be and is hereby re-elected as Director of the Company.
Ordinary Resolution 3
Re-election of Mr Koon Poh Weng as Director
THAT Mr Koon Poh Weng who retired pursuant to Clause 95 of the Constitution of the Company be and is hereby re-elected as Director of the Company.
Ordinary Resolution 4
Re-appointment of KPMG PLT as Auditors of the Company
THAT KPMG PLT having indicated their willingness to accept re-appointment, be and are hereby re-appointed as Auditors of the Company at a fee to be determined by the Directors.
Ordinary Resolution 5
Authority under Section 76 of the Companies Act 2016 for the Directors to allot and issue shares
THAT pursuant to Section 76 of the Act, the Directors be and are hereby authorised to allot and issue shares in the Company at any time until the conclusion of the next AGM and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares to be issued does not exceed ten per centum (10%) of the total number of issued shares of the Company for the time being, subject always to the approval of all relevant regulatory bodies being obtained for such allotment and issuance.
Ordinary Resolution 6
Authority for Mr Loo Lean Hock to continue in office as Independent Non-Executive Director
THAT authority be and is hereby given to Mr Loo Lean Hock who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than twelve (12) years, to continue to act as an Independent Non-Executive Director of the Company until the conclusion of the next AGM in accordance with the Malaysian Code on Corporate Governance.
Ordinary Resolution 7
Authority for Mr Ernest Bong Miau Fatt to continue in office as Independent Non-Executive Director
THAT authority be and is hereby given to Mr Ernest Bong Miau Fatt who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than twelve (12) years, to continue to act as an Independent Non-Executive Director of the Company until the conclusion of the next AGM in accordance with the Malaysian Code on Corporate Governance.
Ordinary Resolution 8
Proposed Renewal of Shareholders’ Mandate for Existing Recurrent Related Party Transactions and Proposed New Shareholders’ Mandate for Additional Recurrent Related Party Transactions of a Revenue or Trading Nature for PMB Technology Berhad and its subsidiaries (“Proposed Shareholders’ Mandate”)
THAT approval be and is hereby given to PMBT Group to enter into recurrent related party transactions of a revenue or trading nature as set out in Section 2.3 of the Circular to Shareholders dated 28 May 2021 which are necessary for the PMBT Group’s day-to-day operations subject to the following:
THAT the authority conferred shall continue to be in force until:
whichever is the earlier.
AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the Proposed Shareholders’ Mandate.
Ordinary Resolution 9
Proposed Renewal of Authority for the Company to Purchase its own Ordinary Shares (“Proposed Renewal of Share Buy-Back Authority”)
THAT subject to the Act, the Constitution of the Company, the Main Market Listing Requirements of Bursa Securities and the approvals of all relevant governmental and/or regulatory authorities (if any), the Company be and is hereby authorised to utilise an amount not exceeding the Company’s aggregate retained profits as at 31 December 2020 to purchase such amount of ordinary shares in the Company as may be determined by the Directors of the Company from time to time through Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient in the interest of the Company provided that the aggregate number of shares purchased and/or held pursuant to this resolution does not exceed ten per centum (10%) of the total number of issued shares of the Company.
THAT an amount not exceeding the Company’s retained profits be allocated by the Company for the Proposed Renewal of Share Buy-Back Authority.
THAT authority be and is hereby given to the Directors of the Company to decide at their absolute discretion to either retain the shares so purchased as treasury shares (as defined in Section 127 of the Act) and/or to cancel the shares so purchased and if retained as treasury shares, may resell the treasury shares and/or to distribute them as share dividend and/or subsequently cancel them.
THAT the authority conferred by this resolution will be effective immediately upon the passing of this resolution and will expire at:-
whichever occurs first.
THAT upon completion of the purchase by the Company of its own ordinary shares, the Directors of the Company be authorised to deal with the ordinary shares purchased in their absolute discretion in the following manner:
AND THAT the Directors of the Company be authorised to take all steps necessary to implement, complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the Proposed Renewal of Share Buy-Back Authority as may be agreed or allowed by any relevant governmental and/or regulatory authority.
Proposed Amendments to the existing Constitution of the Company (“Proposed Amendments”)
THAT the proposed amendments to the existing Constitution of the Company, as set out in Part C of the Circular to Shareholders dated 28 May 2021, be and are hereby approved and adopted, with immediate effect.
AND THAT the Directors of the Company be and are hereby authorised to do all acts, deeds and things as are necessary and/or expedient in order to give full effect to the Proposed Amendments with full powers to assent to any conditions, modifications and/or amendments in any manner as the Directors may deem fit.
There being no other matters, the Meeting concluded at 4.36 p.m. with a vote of thanks to the Chair.
SIGNED AS A CORRECT RECORD
TAN SRI DATO’ KOON POH KEONG
The Company Secretary presented the following responses which were prepared by Management of the Company to address the pre-AGM questions submitted by shareholdders/proxies of the Company:-
How does the Company ensure it can continue to expand besides ensuring it will remain a going concern in 5 to 10 years' time, seeing that both the local and world economic bubbles have burst during this pandemic, with the first economic casualty being the burst of the travel bubble which has, unfortunately, burst everyone's bubble?
To remain a going concern for the next 5 to 10 years, it is important that the Company is cost efficient. One way is through expansion whereby we can bring down the cost using economies of scale as well as achieving consistent operation efficiency.We believe that this would be our best approach in the long term.
With the rise of other developing countries and China especially, how good are we in terms of efficiency and technology advancement?
As a large portion of our products are exported worldwide, we have to be prepared for international competition whether they are coming from developing countries or China. We do not deny that China will be a force to reckon with moving forward, however, we believe that with greater global emphasis on the environment and social impact, the cost of production in China will escalate.
In terms of efficiency, we are on par with some of the best Chinese and European producers, however the company is constantly on the lookout on ways and means to improve efficiency as well as long term sustainability.
What are the barriers to entry for both Aluminium-related products and metallic silicon, other than large initial investment amount?
The barrier to entry for metallic silicon smelting plant has always been the availability of a long term reliable source of power supply and key raw materials.
How does the 3 waste produced during operation protect casting base?Can total waste be fully recycled for this purpose?
The necessity to control and manage our waste produced is important and are always in compliance with the standards imposed by the Department of Environment.
Almost all of our waste produced from the operation can be recycled or converted into byproducts.
Cost of sales increased at a higher rate than revenue. Is this due to the price increase in metals? Can this cost be passed on to customers? What is the proportion?
Part of the revenue was derived from fixed price contracts or long term sale contracts whereby the Group was unable to pass on the cost fully to the customers.
The selling price for silicon metal is guided by certain published indexes such as PLATTS and CRU and may not change in proportion with the cost increased.
Given the large number of foreign workers and our exports to the western countries, what is our status on the 11 standards set by the International Labour Organisation?
As Malaysia is also a member of the International Labour Organisation, our engagement of foreign labours are also subjected to the compliance of Malaysian Labour Laws.The Group is aware of the developments on the International Labour Laws and is making every effort to comply accordingly.
What is the basis to enter into property development in Malaysia when other property development companies are not showing good results due to high competition and some proportion of reliance on government projects? What is your expected prospects and risk impacts from that industry?
The acquisition of the property development land has been identified as the Group’s upward integration into property development to complement its existing business of aluminium system formwork and building façade system provider.
ProspectsThe amendment to the existing Development Order with higher gross development value, the competitive land cost, strategic location and appropriate marketing strategy, we believe the Group will benefit from this property development project.RisksApart from the competition risk, it will subject to the risks inherent to the property development industry such as changes in the demand and supply of property and delay in completion of the development. The timely completion of the development may depend on certain external factors such as obtaining the relevant regulatory approvals on time, securing adequate supply of construction materials and satisfactory performance of construction works. The Group seeks to limit these risks by implementing prudent business strategies, continuous review of its marketing and technical capabilities and efficient human resource management to improve efficiency.
Is the silicon facility fully utilised? Any prospects to expand in metallic silicon?
The silicon facilities are fully utilised and subject to market conditions, the expansion can be considered when the opportunity arises. In the mean time, the Company will concentrate to improve production efficiency and to reduce cost.
What is the variance between the silicon market today and your expectations previously? Do you expect the market to improve over time?
Prior to the onset of Covid-19 pandemic, the silicon market has been quite soft but today, the market situation has changed quite drastically and there is a high demand for silicon metal presently.Depending on the momentum of the economic upturn post pandemic, we are of the opinion that the metal would remain high in demand in the foreseeable future.
Management’s initial strategic rationale behind the silicon business venture? Expectation met? Illustrate the company’s cost curve position and its changes during the year.
The initial strategic rationale behind the silicon business venture was to support the supply of silicon metal to its major shareholder, Press Metal Aluminium Holdings Berhad and also able to supply local market requirement of silicon metal.
We believe that the Company’s cost curve position is in the healthy position but can be improved further
How does China’s decarbonisation policy affects our business?What strategic moves we took in response to the said development?When and how much is our next expansion?
In our opinion, China’s decarbonisation policy will increase the cost of the silicon metal manufacturers in China. We see this as an opportunity for us to have a bigger share of market and we are taking every effort to ensure our prices remain as competitive. We are also planning to improve our marketing strategy to take advantage of the opportunity.
Our next expansion will depend very much on the market demand and subsequently the additional capacity to be installed.
Subject to market conditions, the expansion can be considered when the opportunity arises.
Please explain “strategic plant engineering” found in third paragraph of page 22 of Annual Report (“AR”).
Please explain “Silicon successfully secured long term contracts" found in second paragraph of page 22 of AR.
Strategic plant engineering is the incorporation of strategic design and automation of the plant and equipment to improve efficiency of the production as well as to reduce dependence on manpower.
“Silicon successfully secured long term contracts" refer to the long term contracts with customers, for example, Press Metal.
Any bonus issue since the share price quite high or propose higher dividend?
There is no bonus shares issue in place yet. The Board will consider to propose higher dividend, when appropriate, to reward our shareholders.
Is solar energy projects like LSS4 in Malaysia and oversea will benefit PMBT?
Solar energy uses solar cells which are primarily made from silicon metal. The demand for silicon metal has been on the rise due to the high demand of solar cells. PMBT supplies silicon metal to polysilicon industries which produces solar cells. The high demand on solar cells will indirectly benefits the silicon metal producers such as PMBT Group.
Will the third generation chips use in automobile industry like silicon carbide will benefit PMBT?
A higher demand of silicon carbide will cause the price to increase accordingly. Silicon carbide is one of our byproducts which does not contribute significantly to our revenue at the present moment.
What is the latest status of the Memorandum of Understanding (“MOU”) with Perbadanan Pembangunan Ekonomi Sarawak (“PPES”)?
Due to the Covid-19 pandemic and the Movement Control Order (“MCO”) imposed by the Government, there are no significant progress on the MOU with PPES.
LIVE AGM QUESTIONS:
The following live AGM questions being raised by shareholdders/proxies and attended by the CEO:-
How much does the Company spend on this virtual AGM? Would the Board kindly consider giving e-voucher as a token of appreciation for attending today’s RPV?
Thank you. I would like to request a printed hardcopy of the company’s AR.
The estimated cost for this virtual AGM is approximately RM35,000. We believe that our shareholders should be rewarded fairly and meaningfully. Available funds will be distributed to shareholders by way of dividends. We will be sending over a copy of the Company’s AR.
How does the Full MCO affect the Group's businesses? What is the Board's strategies towards it?
Part of our operations were not allowed to operate in full capacity during MCO. However, we hope that with the rollout of the Covid-19 vaccines, the operations will pick up for the remaining of the year. In view that we are unable to operate at optimum capacity for now, we are taking the opportunity to bring forward the scheduled maintenance in order for the production to operate in full efficiency once the MCO is lifted.
Does the Company supply its products to Press Metal? If yes, how many percent? How is the status of the joint venture with state government, any positive development?
Yes, we supply metallic silicon production to Press Metal. There is no material development on the joint venture with the state government. We will make the necessary announcement in due course, in accordance with the Listing Requirements of Bursa Securities.
i. Please comment on the recent US ban of Xinjiang silicon, and its accompanying effect on our business.
ii. Please comment on OM Holding Limited’s operation in Sarawak and coming expansion into the silicon metal arena. How does it affect our business?
iii. How sustainable is our cost position? What are the potential factors that could weaken our advantage in next 5 years?
iv. Where do we export our silicon? How does the logistic cost increase - should it continues, hamper our competitive advantage?
i. We are aware of the US ban on Xinjiang silicon. We see this as an opportunity to supply to the US market.
ii. OM Holdings Limited is specialized in the ferrosilicon market. We are aware of its expansion plan into metallic silicon. We will concentrate our efforts on cost reduction and operational efficiency to maintain competitiveness in the market.
iii. The Company has been importing and exporting products in USD which serves as a natural hedge to sustain our cost position. The Company considers human resources and maintenance of effective workforce as key factors for operations in Sarawak. The Company will continue to focus on the aforesaid factors while leveraging on automation.
iv. We supply silicon to the local market and throughout the world such as India, Japan, Korea, Taiwan, Europe, Middle East and the US. Logistics cost can be shared with the customers in some circumstances by having upfront arrangement with the customers. The logistics cost is expected to stabilise in the long run.
i. What is the nature of ‘other expenses’ in profit & loss statement?
ii. Please help us understand note 17.3, pages 135-136 of AR.
iii. Who are the major customer A & B? Latest utilisation rate? Please elaborate further on first quarter 2021 result, how come the ramp-up momentum is not as visible as fourth quarter 2020?
i. Depreciation of plant and machinery is mainly accounted for other expenses.
ii. Note 17.3 of AR refers to the construction contract with unrecognised amount of contract in hand.
iii. Major Customers A & B are our overseas customers who buy our silicon metal. The latest utilisation rate refers to the metallic silicon production. The results in first quarter 2021 was not as visible compared to the fourth quarter 2020 mainly due to the higher operating expenses such as logistics and raw material costs.
i. Please comment on the impact of US tax duties on Malaysian silicon imports?
ii. Why metallic silicon is growing at 4% thus far when the other application industries are growing a lot faster?
iii. What is the strategy behind the RM30 million land acquisition? Should shareholders expect more resources to be allocated into property related investments?
iv. Please elaborate further on note 2 of page 57 of AR.
v. How would the Management describe the company’s foreign worker welfare?
i. The imposition of duty by the US Department of Commerce will not have any significant financial impact to the Group.
ii. The growth of metallic silicon was not strong as compared to other industries in 2020 due to challenges exacerbated by the pandemic and MCO. Having said that, the Company will focus on improving efficiency and productivity by strengthening its processes and investing in technology.
iii. The Company is cautious on property related investments and is selective in looking for opportunities. The Group’s involvement in construction and fabrication is part of the property development business segment, hence resources will be allocated in the normal course of business into property development.
iv. Note 2 of page 57 of AR refers to the decrease in quality specification and delivery accuracy due to the inability of certain suppliers to meet the requirements and/or expectation.
v. The Company has and will continuously ensure the welfare of foreign workers are fully taken care of and adhere to the requirements of the Malaysian Labour Law. The Company is always concern about their living environment and wages. Relevant trainings are also provided to them to improve their capabilities and efficiency.
Any plan for further expansion for metallic silicon production? If yes, roughly when? Is the current pandemic affects the Company’s production? Is the logistic and supply chain affects the Company’s performance?
Expansion on metallic silicon production will depend on global demand. The Company will consider possible expansion to achieve larger economies of scale and enhance the efficiency in production.
The Company’s cost of sales has increased due to higher logistics cost. The Company strives to operate more efficiently to reduce production cost.
Can you share with us more about your silicon metal:
i. What is the range of its usage?
ii. Who are your main clients?
iii. Is it a raw material used for solar cells and electric vehicle?
i. Silicon metal has been widely used in the aluminium industry, chemical as well as electronic industries.
ii. Our clients include both local and overseas including Japan, India, America and Europe.
iii. Yes, our silicon metal can be used as raw material in solar cells and semiconductor.
It seems that the Group is very much dependent on few customers. Does the Board has any plan to diversify and/or mitigate this risk? If yes, what're those strategies?
Our Group has successfully secured long term sale contracts with international customers from Europe, Middle East, India, Japan and Korea and believe this will increase in the ensuing years.
We notice the share has very low volume of transaction in the market, is there any reason for this?
The traded volume in the Company’s shares is dependent on investors perception of the Company which is beyond its control.
How does the contract pricing work on the 'long term contracts'?
The Company has fixed the pricing for long term contracts to hedge against material price fluctuation.
Press Metal is trading at ~11x P/B, will PMBT one day trades at similar territory?
The Company will do its best to perform better to maximise shareholders’ value.
Does the company plan to set up another plant in India, since China is undergoing an economic downturn? Major manufacturers like Foxconn have done so & PMBT is a world-class company.
The Company has no plans to set up a plant in India at the moment as the cost and stability of resources in India are of concern.
Which industry is your client mostly come from? Solar? Construction? Automotive?
Most of our silicon metal is supplied to the aluminium industries. Silicon is added with aluminium to make alloys that are mainly used in the construction as well as automotive industries. We also supply to polysilicon manufacturers which produce solar cells.
What is PMBT cost composition? And where are we in the cost quartile vs our peers?
The Company is on par with some European and Chinese silicon producers and the major cost comprises electricity and raw material.
How big is your market share as a producer of sillicon metal globally? Who are the top 3 producers?
Silicon metal production is approximately 7 million tonnes per year globally with the Group contributing 70,000 tonnes. The top producers in the market are Ferroglobe PLC, Elkem ASA and Hoshine Silicon Industry Co. Ltd.
Why are we not proceeding with third phase expansion? Any idea when?
The Company would consider next phase of expansion at appropriate times when a reasonable cost structure has been put in place for the expansion.
Are you part of the semiconductor's supply chain?
Yes, we are processing silicone of more than 99% purity which can be further purified for use in the semiconductor industries.
Please share specific growth driver in the coming 24 months?
Expansion will be considered at the appropriate time, after taking into consideration all relevant factors particularly cost.
Can you give us some guidance for your earnings in the next few years? What are your internal earnings growth target year on year?
The earnings will depend on the market and production cost. Please refer to our financial performance which would be available in Bursa Securities from time to time.
Is the returns on invested capital (ROIC) from property development as good as that from the silicon metal business? If not as high, why not focus on silicon metal instead of venturing into property development?
The Group is focused on its core businesses. However, it will consider good opportunities as they come.
The following live AGM questions being raised by shareholdders/proxies were attended via email:-
How was next year’s forecast in pandemic?
The Group is hopeful that the pandemic will reach herd immunity by the year end with the speedy roll-out of the Covid-19 vaccine. With less restrictions on movement and travel, the Company is cautiously optimistic of a better performance, barring any unforeseen circumstances.
The aluminium pricing volatile affected much on PMBT?
The Company do not foresee much volatility of aluminium prices in the near term. Moreover, the Company will consider to sell more silicon metal to other industries such as the polysilicon and chemical industries.
May I know how many live participants in the meeting?
A total of 50 participants comprising shareholders and/or proxies have participated in the 19th AGM.