MEMS TECHNOLOGY BERHAD (“COMPANY”)
(Company No. 531948-K)
(Incorporated in Malaysia)
Part A – Explanatory Notes Pursuant to MASB 26
1. Basis of Preparation
The interim financial report is unaudited and is prepared in accordance with
Malaysian Accounting Standards Board Standard No. 26 “Interim Financial
Reporting” and Appendix 7A of the Listing Requirements of Bursa Malaysia
Securities Berhad (“Bursa Securities”) for the MESDAQ Market and should be
read in conjunction with the audited consolidated financial statements of Mems
Technology Berhad and its subsidiaries (“the Group”) for the year ended 31st July
2003.
The accounting policies and presentation adopted for this interim financial report
are consistent with those adopted for the annual financial statements for the year
ended 31st July 2003.
2. Auditors’ Report on Preceding Annual Financial Statements
The audit report of the preceding annual financial statements was not subject to
any qualification.
3. Comments About Seasonal or Cyclical Factors
The micro electro-mechanical systems (“MEMS”) industry is still in its early
stages of growth and hence it is not expected to be materially influenced by any
seasonal or cyclical factors.
4. Unusual Items Due to Their Nature, Size or Incidence
There were no unusual items during the quarter under review.
5. Changes in Estimates
There were no changes in estimates during the quarter under review.
6. Debt and Equity Securities
There were no issuance and repayment of debt and equity securities, share buyback, share cancellations, shares held as treasury shares and resale of treasury
shares during the quarter under review other than the issue of 80,370,400 ordinary
shares of RM0.10 each at an issue price of RM0.62 per share in conjunction with
the Company’s Initial Public offering exercise.
7. Dividends Paid
There were no dividends paid during the quarter under review.
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8. Segmental Information
12 MONTHS ENDED 31ST JULY 2004
The revenue and results below are presented net of inter-segment elimination.
Analysis by
Geographical Location
Revenue
Results
Finance Costs
Taxation
Malaysia
RM ‘000
Singapore
RM ‘000
Group
RM ‘000
1,420
(233)
32,349
8,607
33,769
8,374
(164)
(18)
Profit after taxation
8,192
9. Carrying Amount of Revalued Assets
The Company did not revalue any of its property, plant and equipment during the
quarter under review.
10. Subsequent Events
There were no material events between 1st August 2004 and 24th September 2004
(the latest practicable date not earlier than seven (7) days from the date of issue of
this report) that have not been reflected in the interim financial statements.
11. Changes in the Composition of the Group
There were no changes in the composition of the Group during the period under
review.
12. Contingent Liabilities and Contingent Assets
There were no contingent liabilities as at 24th September, 2004 (the latest
practicable date not earlier than seven (7) days from the date of issue of this
report).
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Part B – Explanatory Notes Pursuant to Appendix 7A of the Listing
Requirements of Bursa Securities for the MESDAQ Market
13. Performance review
The Group generated revenue of RM10.7 million, an increase of 32% from the
previous quarter of RM8.1 million, attributable to higher sales of pressure sensors
and service income from its design, engineering and services work. Resulting
from the higher revenue, the profit before tax of the Group for this reporting
quarter has also increased in tandem from RM2.0 million in the previous quarter
to RM2.3 million in this reporting quarter.
For the year ended 30th July 2004, the Group generated revenue of RM33.8 million as
compared to RM20.4 million generated in the pervious year. The increase in revenue
was largely attributed to higher sales of pressure sensors and service income from
design, engineering and service work. As a result of higher revenue, the group
generated a profit before tax of RM8.2 million for the year ended 31st July 2004
against a loss of RM0.9 million in the previous year.
14. Comment on Material changes in Profit before Taxation
There were no material changes in profit before taxation for the quarter under
review other than those as disclosed in Note 13 above.
15. Commentary on Prospects
The Group has successfully developed the 2g dual axis accelerometers, integrated
pressure sensors and silicon microphone for consumer electronic applications
where commercial production is expected to commence in the second quarter of
the current financial year. In addition, the Group has also successfully developed
pressure sensors for the automotive industry and is expecting to commence
commercial production in the final quarter of the current financial year.
Based on the above, barring any unforeseen circumstances, the Group is expected
to achieve a better performance in the current financial year.
16. Profit Forecast and Profit Guarantee
The Company did not issue any profit forecast or profit guarantee in any public
document during the quarter under review.
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17. Taxation
Current year’s taxation
Current Quarter
31st July 2004
RM ‘000
Year to Date
31st July 2004
RM ‘000
18
18
The taxation charge for the current year is in respect of interest income earned by
the Company. The subsidiaries are not subject to taxation as SensFab Pte Ltd was
accorded Pioneer Status by the Singapore Government, whereby it will enjoy tax
relief during the pioneer period, whereas, SenzPak Pte Ltd has available tax losses
brought forward from previous years. SenzPak (M) Sdn Bhd is currently dormant.
18. Sale of Unquoted Investments and Properties
There were no sale of unquoted investments and properties during the quarter
under review.
19. Quoted Securities
The Company did not have any investment in quoted securities as at the date of
this report.
20. Corporate Proposals
(a)
Public Issue and Listing
The Company issued its prospectus on 8th July 2004 for the issue of
80,370,400 new ordinary shares of RM0.10 each at an issue price of
RM0.62 per ordinary share under a public issue exercise in connection
with the proposed listing of the Company’s shares on the MESDAQ
Market of Bursa Securities. All the new shares have been fully subscribed
and were allotted on 28th July 2004. The Company’s shares were listed on
the MESDAQ Market on 11th August 2004.
(b)
Employees’ Share Option Scheme (“ESOS”)
The Company implemented an ESOS on 6 July 2004 in conjunction with
its public issue and listing exercise mentioned in (a) above. Further details
of the ESOS, including the Bye-Laws are set out in the prospectus of the
Company dated 8th July 2004.
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(c)_
Proposed bonus issue of up to 325,721,500 new ordinary shares of
RM0.10 each in MEMSTECH (“MEMSTECH Shares”), to be
credited as fully paid-up on the basis of one (1) MEMSTECH Share
for every one (1) existing MEMSTECH Share (“Proposed Bonus
Issue”)
On 28 September 2004, the Company announced the intention to
implement the Proposed Bonus Issue. In conjunction with the Proposed
Bonus Issue, MEMSTECH will also increase its authorised share capital
from RM50 million, comprising 500,000,000 MEMSTECH Shares to
RM100 million, comprising 1,000,000,000 MEMSTECH Shares. The
Proposed Bonus Issue is subject to the approval of Bursa Securities and the
shareholders of MEMSTECH.
21. Status of Utilisation of Listing Proceeds
The Company raised RM49.830 million during its Initial Public Offering exercise
in August 2004 and the details of the utilisation of proceeds up to 31st July 04 are
as follows:
Description
(i)
(ii)
(iii)
(iv)
(v)
Proposed
Actual
Utilisation Utilisation
RM’000
RM’000
Balance
RM’000
Capital Expenditure
Working Capital
Relocation Expenses
R&D expenditure
Estimated listing expenses
29,685
10,997
1,770
4,678
2,700
2,737**
29,685
10,997*
1,770
4,678
(37)*
Total
49,830
2,737
47,093
Notes:
*
The excess expense is adjusted against working capital.
** Being accrued listing expenses prior the listing of the Company on 11 August 2004.
22. Group Borrowings and Debt Securities
The Group’s interest-bearing borrowings as at 31st July 2004 are as follows:
RM 000
Current
Term loans (secured)
Overdrafts
Non-Current
Term loans (secured)
1,115
1,115
3,905
The term loans are denominated in United States Dollars (“USD”) while the short
term bank overdraft is denominated in Singapore Dollars (“SGD”). The above
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balances have been computed based on exchange rates of USD1 : SGD1.7237 and
SGD1 : RM2.23 as at 31st July 2004.
23. Off Balance Sheet Financial Instruments
There were no off balance sheet financial instruments as at the date of this report.
24. Changes in Material Litigation
As at 24th September 2004 (being the latest practicable date not earlier than seven
(7) days from the date of issue of this report), neither the Company nor its
subsidiaries are engaged in any material litigation either as plaintiff or defendant
and the Directors do not have any knowledge of any proceedings pending or
threatened against the Group which might materially and adversely affect the
financial position or business of the Group.
25. Dividend Payable
No interim dividend has been declared or paid.
26. Earnings per Share
The earnings per share were calculated by dividing the Company’s profit after
taxation and minority interest by the weighted average number of ordinary shares
in the respective period as follows:
Current Year Quarter
Profit after tax (RM’000)
Weighted average number
of ordinary shares
Basic earnings per share
(sen)
Current Year To Date
2,348
8,192
237,212,000
237,212,000
0.99
3.45
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