Contents Notice of Annual General Meeting 02 Statement Accompanying Notice of Annual General Meeting 04 Corporate Information 05 Profile of the Board of Directors 08 Chairman’s Statement 10 Managing Director’s Message 17 Group Financial Performance Highlights 20 Calendar of Significant Events 2005/2006 21 Statement on Corporate Governance 25 Statement on Internal Control 32 Audit Committee Report 33 Financial Statements 38 Analysis of Shareholdings 85 List of Property 87 Letter of Nomination Annexure A Proxy Form Our Vision To be the leader of a wide and comprehensive range of quality computer systems and IT products that are internationally accepted and recognised. Our Mission The Group will continuously strive for excellence in the following key areas: • develop and produce the highest standards in products and services that cater for all communities; • to be a leader in technological advancement; • versatile and adaptability in its customization capabilities; • c reate a distinctive brand that commands loyalty; • p rovider of the best customer service and support; and • maximisation of resources in configurating its p r oducts and services to achieve price efficiencies. FTEC Resources Berhad 2 (588728-X) NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN THAT the Fourth Annual General Meeting of the FTEC RESOURCES BERHAD ("FRB" or "the Company") will be held at Ballroom 1, Tropicana Golf & Country Club, Jalan Kelab Tropicana, Persiaran Tropicana, 47410 Petaling Jaya, Selangor Darul Ehsan on Wednesday, 28th June 2006 at 10.00 a.m. to transact the following ordinary and special businesses: AGENDA 1. To receive the Audited Financial Statements for the financial year ended 31 December 2005 together with the Directors’ and Auditors’ Reports thereon. Resolution 1 2. To approve the payment of Directors’ fee for the financial year ended 31 December 2005. Resolution 2 3. To re-elect Mr. Wong Teck Wei as Director who re t i res pursuant to Article 96 of the Company’s Articles of Association. Resolution 3 4. To re-elect Gen (R) Tan Sri Yaacob bin Mat Zain as Director who re t i res pursuant to Section 129(6) of the Companies Act,1965. Resolution 4 5. To appoint Messrs Moore Stephens. as Auditors of the Company and to authorise the Board of Directors to fix their remuneration. Resolution 5 Notice of Nomination pursuant to Section 172(11) of the Companies Act. 1965 (a copy of which is annexed and marked “Annexure A” as in the Annual Report 2005) has been received by the Company for the nomination of Messrs Moore Stephens, who have given their consent to act, for appointment as Auditors of the Company.” 6. As Special Business to consider and, if thought fit, to pass the following Ordinary Resolution with or without modifications: Authority to issue shares by Company pursuant to Section 132D of the Companies Act, 1965 “THAT subject always to the Companies Act, 1965 (“Act”) and the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered, pursuant to Section 132D of the Act, to issue and to allot shares in the Company from time to time at such price, upon such terms and conditions, for such purposes and to such person or persons whomsoever as the Directors may in their absolute discretion deem fit provided that the aggregate number of shares issued by the Company pursuant to this Resolution does not exceed ten per centum (10%) of the issued share capital of the Company for the time being and that the Directors be and are further empowered to obtain the approval from Bursa Malaysia Securities Berhad for the listing of and quotation for the additional shares so issued and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.” Resolution 6 FTEC Resources Berhad (588728-X) 3 Notice of Annual General Meeting 7. To transact any other businesses of which due notice shall have been received. BY ORDER OF THE BOARD SEOW FEI SAN (MAICSA 7009732) SIEW PEI LENG (MAICSA 7018341) Company Secretaries Petaling Jaya 5 June 2006 Notes 1. A member of the Company entitled to attend and vote at the Fourth Annual General Meeting is entitled to appoint a proxy or proxies, to attend and vote instead of him/her. The proxy may but need not be a member of the Company, and the provisions of Section 149(1)(a) and (b) of the Companies Act, 1965 shall not apply to the Company. 2. A member shall be entitled to appoint not more than two (2) proxies to attend and vote at the Annual General Meeting. Where a member appoints two (2) or more proxies, the appointment shall be invalid unless the member specifies the proportion of his/her shareholdings to be represented by each proxy. 3. The instrument appointing a proxy shall be in writing under the hand of the appointer or his/her attorney duly authorised in writing or, if the appointer is a corporation, either under its Common Seal or under the hand of its officer or attorney duly authorised. 4. The instrument appointing a proxy must be deposited at 312, 3rd Floor, Block C, Kelana Square, 17 Jalan SS7/26, 47301 Petaling Jaya, Selangor Darul Ehsan, not less than forty-eight (48) hours before the time set for holding the Annual General Meeting or any adjournment thereof. EXPLANATORY NOTES ON SPECIAL BUSINESS Ordinary Resolution No. 6 The proposed Ordinary Resolution 6, if passed, will empower the Directors of the Company to issue and allot not more than ten per centum (10%) of the issued share capital of the Company subject to the approvals of all the relevant governmental/regulatory bodies and for such purposes as the Directors consider would be in the interest of the Company. This authorisation will, unless revoked or varied by the Company in a general meeting, expire at the next Annual General Meeting of the Company. FTEC Resources Berhad 4 (588728-X) STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING Technology in advance century 1. Details of Directors standing for re-election and re-appointment at the Fourth Annual General Meeting of the Company:- Name of Directors Director’s Profile Wong Teck Wei As set out in the Profile of the Board of Directors on page 9 of the Annual Report Gen (R) Tan Sri Yaacob bin Mat Zain As set out in the Profile of the Board of Directors on page 8 of the Annual Report 2. Details of Director’s attendance at Board Meetings:- Name of Directors Meetings attended Gen (R) Tan Sri Yaacob bin Mat Zain 4 of 4 Kenneth Vun @ Vun Yun Liun 4 of 4 Ameezan Bin Jamal 4 of 4 Wong Teck Wei 4 of 4 Ang Chai Kok (resigned on 4.5.2006) 4 of 4 Pow Kim Guan 4 of 4 Chieng Siong Kuong 4 of 4 3 Details of place, date and time of the Fourth Annual General Meeting of the Company:- Place Date of Time of meeting meeting Ballroom 1, Tropicana Golf & Country Club, Jalan Kelab 28th June 2006 10.00 a.m. Tropicana, Persiaran Tropicana, 47410 Petaling Jaya, Selangor Darul Ehsan FTEC Resources Berhad (588728-X) 5 CORPORATE INFORMATION BOARD OF DIRECTORS SENIOR MANAGEMENT AUDITORS Gen (R) Tan Sri Yaacob Bin Mat Zain Grace Vun Siaw Nei H. Law & Co Independent Non-Executive Chairman Vice President nd 2 Floor, Lot 29, Block C, Kenneth Vun @ Vun Yun Liun Lee Jyh Kiong Damai Plaza, Phase IV, Luyang, Managing Director Chief Financial Officer 88769 Kota Kinabalu, Sabah. Ameezan Bin Jamal Law Chor Soon Tel : (088) 233 384 Executive Director Marketing Director Fax : (088) 234 463 Wong Teck Wei COMPANY SECRETARIES Executive Director SOLICITOR Seow Fei San Jeff Leong, Poon & Wong Ang Chai Kok (MAICSA 7009732) Executive Director A-11-3A, Level 11, Megan Avenue II, Jalan Yap Kwan Seng, (Resigned on 4.5.2006) Siew Pei Leng (MAICSA 7018341) 50450 Kuala Lumpur. Chieng Siong Kuong Independent Non-Executive Director Tel : (603) 2166 3225 REGISTERED OFFICE AND Fax : (603) 2166 3227 Pow Kim Guan PRINCIPAL PLACE OF BUSINESS Independent Non-Executive Dire c t o r G.02, Ground Floor, Lot 4A, Wisma Academy, Jalan 19/1, PRINCIPAL BANKERS AUDIT COMMITTEE 46300 Petaling Jaya, OCBC Bank Berhad Malayan Banking Berhad Gen (R) Tan Sri Yaacob Bin Mat Zain Selangor Darul Ehsan. Chairman Public Bank Berhad Tel : (603) 7625 1138 Kenneth Vun @ Vun Yun Liun Fax : (603) 7625 1136 Member Email : [email protected] SPONSOR Website : www.ftec.com.my Public Merchant Bank Berhad Chieng Siong Kuong th Member 25 Floor, Menara Public Bank, 146, Jalan Ampang, SHARE REGISTRAR 50450 Kuala Lumpur. NOMINATION COMMITTEE Epsilon Registration Services Sdn Bhd 312, 3rd Floor, Block C, Gen (R) Tan Sri Yaacob Bin Mat Zain Tel : (603) 2166 9382 Kelana Square, 17 Jalan SS7/26, Chairman Fax : (603) 2166 9386 47301 Petaling Jaya, Chieng Siong Kuong Selangor Darul Ehsan. Member STOCK EXCHANGE LISTING Tel : (603) 7806 2116 MESDAQ Market of the Bursa Malaysia Fax : (603) 7806 1261 Securities Berhad REMUNERATION COMMITTEE Gen (R) Tan Sri Yaacob Bin Mat Zain Chairman Kenneth Vun @ Vun Yun Liun Member Chieng Siong Kuong Member FTEC Resources Berhad 6 (588728-X) Corporate Information The Corporate Structure of the FRB Group is as follows: FSSB 100% BEIJING FDSB FOVIX FOVIX 100% 51.0% 100% FNSB 100% FESB 100% F R B FVSB WARNET 100% 100% FST 99.0% FIL FVT 100% 49.0% CZT 99.0% TECASIA 100% FCSB 80% FTEC Resources Berhad (588728-X) 7 Corporate Information FRB Group of Companies Principal activities FTEC System Sdn. Bhd. (“FSSB”) Production and manufacturing of computer hardware and IT systems.