Core Points - Founder Group Limited (FGL) has signed a Heads of Agreement with Planet QEOS Sdn. Bhd. for a large-scale renewable energy facility in Sarawak, Malaysia, valued at up to RM1.16 billion (USD276 million) [1] - The project includes a 310 MWp solar photovoltaic power plant and a 620 MWh Battery Energy Storage System (BESS), making it one of the largest clean energy developments in the region [2] - This facility will be Malaysia's first "firm" solar power plant, providing continuous renewable electricity comparable to conventional energy sources [3] Economic and Digital Transformation - The development of a 200 MW Tier-4 Green Data Centre Park on 350 acres in Baram is part of the initiative, expected to generate over RM1 billion in foreign direct investment [4][5] - The project supports Sarawak's vision to become the "Battery of Asean" and aims for a generation capacity of 10 GW by 2030 [6] Management Commentary - The CEO of FGL emphasized the company's commitment to large-scale infrastructure investments that focus on sustainable returns and significant economic impact [7] Company Overview - Founder Group Limited specializes in end-to-end EPCC solutions for solar PV facilities in Malaysia, focusing on large-scale solar projects and commercial and industrial solar projects [8]

Core Insights - Founder Group Limited is well-positioned to capitalize on the growth opportunities in Malaysia's renewable energy sector, particularly in solar photovoltaic systems, with an expected EPCC contract value increase to RM17.4 billion (USD 4.1 billion), representing a 40% rise [1] - The company has signed a Memorandum of Understanding (MOU) with GCL Systems Integration Technology Co. Ltd. for renewable energy projects valued at up to USD 220 million across Malaysia and other ASEAN countries [2] - The growth of the renewable energy market is supported by initiatives such as LSS Petra, LSS Petra 5+, and the Corporate Renewable Energy Supply Scheme (CRESS), which are crucial for enhancing Malaysia's data center and AI infrastructure [3][4] Company Positioning - Founder Group Limited focuses on large-scale solar projects and commercial and industrial (C&I) solar projects, aiming to provide innovative solar installation services and promote eco-friendly resources [2][8] - The company is exploring AI-powered solutions to enhance project management, engineering, design, and operation and maintenance [2] - CEO Lee Seng Chi emphasized the company's commitment to advancing Malaysia's renewable energy goals and enhancing shareholder value through innovative services [5] Market Opportunities - The anticipated completion of LSS Petra 5 and LSS Petra 5+ contracts, valued at up to RM12 billion for 6GW installed capacity, offers significant project development opportunities [7] - The resurgence of the CRESS program, following a tariff hike for data centers, is expected to generate an additional RM5 billion in EPCC works driven by 2GW of firm output demand [7] - The integration of AI capabilities in Malaysia's companies highlights a national commitment to leveraging technology, supported by sustainable and economical power from renewable energy sources [4]

Core Viewpoint - Founder Group Limited has secured a significant contract for a large-scale solar photovoltaic project in Malaysia, highlighting its role as a leading provider of EPCC solutions in the renewable energy sector [1][2]. Contract Details - The company has obtained a contract valued at RM10 million (approximately US$2.36 million) for the engineering, procurement, construction, and commissioning of a 30-megawatt solar photovoltaic plant [2]. - Responsibilities include civil and structural works, infrastructural works, installation, commissioning, testing, and interconnection of the facility [2]. Environmental Impact - The project is expected to contribute nearly 60,000 Renewable Energy Certificates (RECs) to the market, aiding corporate consumers in achieving sustainability goals and reducing carbon footprints [3]. - Upon completion, the solar farm is projected to generate around 60,000 MWh of clean energy annually, offsetting approximately 40,000 tonnes of CO2 emissions [3]. Project Timeline and Partnerships - The construction contract is anticipated to be completed by the end of 2025, with a history of similar contracts secured with solar installation companies in recent years [4]. - The CEO of Founder Group emphasized the importance of this project in reinforcing the company's reputation and commitment to sustainable growth in Malaysia's renewable energy sector [5]. Company Overview - Founder Group Limited specializes in providing end-to-end EPCC solutions for solar PV facilities, focusing on large-scale solar projects and commercial and industrial solar projects [6]. - The company's mission includes promoting eco-friendly resources and achieving carbon neutrality through innovative solar installation services [6].

Core Viewpoint - Founder Group Limited, a leading solar photovoltaic system EPCC solutions provider in Malaysia, assures investors that it will not be affected by the proposed gradual elimination of solar tax credits in the U.S. by 2028 [1]. Company Overview - Founder Group Limited specializes in the full-process engineering design, procurement, construction, and commissioning of solar energy facilities, focusing on large-scale solar projects and commercial and industrial (C&I) solar projects [2]. - The company's mission is to provide innovative solar installation services, promote eco-friendly resources, and achieve carbon neutrality goals [2]. Market Position - The CEO of Founder Group, Lee Seng Chi, stated that the company primarily operates in Malaysia and has no business in the U.S., thus it is not impacted by the current market sentiment affecting U.S. solar stocks [1]. - The company's revenue is mainly derived from the Malaysian market, making it unaffected by proposed changes in tax incentives in the U.S. [1]. - Future expansion plans will focus on the Southeast Asian region, with no current plans to expand into the U.S. market [1].

Core Viewpoint - Founder Group Limited reassures investors that it will not be affected by the proposed wind down of solar power tax credits by the U.S. Senate panel by 2028, as its operations are primarily in Malaysia and not in the U.S. [1][2] Company Overview - Founder Group Limited is a leading engineering, procurement, construction, and commissioning (EPCC) solutions provider for solar photovoltaic systems in Malaysia, focusing on large-scale solar projects and commercial and industrial (C&I) solar projects [3]. - The company's mission includes providing innovative solar installation services, promoting eco-friendly resources, and achieving carbon neutrality [3]. Market Position - The CEO of Founder Group Limited, Lee Seng Chi, stated that the company generates most of its revenue from the Malaysian market and is not impacted by U.S. tax policy changes [2]. - The company plans to focus on regional expansion in Southeast Asia and does not have current plans to expand into the U.S. market [2].

Core Insights - Founder Group Limited (FGL) has signed a Memorandum of Understanding (MOU) with GCL Systems Integration Technology Co. Ltd. to explore renewable energy projects in Malaysia and other ASEAN countries, with an estimated value of up to $220 million [1][2][3] Group 1: Company Overview - Founder Group Limited is a leading provider of solar photovoltaic system engineering, procurement, construction, and commissioning (EPCC) solutions in Malaysia, focusing on large-scale solar projects and commercial and industrial solar projects [1][3] - GCL Systems Integration Technology Co. Ltd. is a publicly listed company in Shenzhen, established in 2003, and has become a global leader in smart photovoltaic and energy storage system integration [2][5] - Both companies aim to leverage their technical expertise and capabilities to support identified collaborative projects, ensuring a professional and responsible approach to project opportunities [2][3] Group 2: Collaboration Details - The collaboration will involve sharing information, executing specific measures, and regularly assessing the effectiveness of their partnership [2][3] - Upon securing projects, both parties will sign a final agreement detailing their respective obligations, including necessary assistance and information sharing [3] - The CEO of Founder Group Limited expressed pride in the partnership, emphasizing the importance of GCL's global reputation in solar photovoltaic components and energy storage systems for achieving renewable energy goals in the region [3]

Core Viewpoint - Founder Group Limited has signed a memorandum of understanding (MOU) with GCL Systems Integration Technology Co. Ltd. to collaborate on renewable energy projects in Malaysia and other ASEAN countries, with an estimated project value of up to USD $220 million [1]. Company Overview - Founder Group Limited is a leading provider of engineering, procurement, construction, and commissioning (EPCC) solutions for solar photovoltaic systems in Malaysia, focusing on large-scale solar projects and commercial and industrial solar projects [6]. - GCL Systems Integration Technology Co., Ltd. is a publicly traded company on the Shenzhen Stock Exchange, recognized as a world-leading integrator of smart PV and storage systems, emphasizing technological innovation and high-quality products [2][7]. Collaboration Details - The collaboration will involve exchanging information, proposing specific actions, and evaluating the effectiveness of their partnership [3]. - Both companies will utilize their technical expertise to support identified projects and will take necessary steps to identify and procure these projects [4]. Strategic Goals - The partnership aims to leverage GCL's reputation and expertise in solar PV modules and storage to enhance capabilities in supporting renewable energy goals in Malaysia and surrounding regions [5]. - The collaboration is expected to create significant revenue opportunities, driving top-line growth and expanding margins and income, ultimately enhancing shareholder value [5].

Core Viewpoint - Founder Group Limited has secured additional contracts in the solar photovoltaic (PV) sector, enhancing its operational capabilities and revenue growth in Malaysia [1][6]. Contract Details - The company secured a contract worth RM3.4 million (approximately US$806,193) for a 29.99 megawatt (MWac) large-scale solar photovoltaic plant in Bukit Badong, Selangor, focusing on mechanical and wiring responsibilities [2]. - An additional contract valued at RM2.8 million (approximately US$662,452) was obtained from the same business partner involved in a previous solar PV project [3]. Industry Partnerships - The partnerships with prominent solar installation companies are expected to lead to further contracts in the coming years, indicating a strong collaborative relationship within the industry [4]. - Founder Group aims to build solid relationships with leading companies in the renewable energy sector, aligning with Malaysia's renewable energy goals [6]. Company Overview - Founder Group Limited specializes in end-to-end engineering, procurement, construction, and commissioning (EPCC) solutions for solar PV facilities, focusing on large-scale and commercial solar projects [7]. - The company's mission includes promoting eco-friendly resources and achieving carbon neutrality [7].

Introduction This section introduces the annual report, presenting audited financial statements for FY2022-2024 and relevant MYR to USD exchange rates[16](index=16&type=chunk) Exchange Rates Used (MYR to US$1.00) | Rate Type | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | At the end of the year | MYR4.4755 | MYR4.5915 | MYR4.4130 | | Average rate for the year | MYR4.5712 | MYR4.5653 | MYR3.2740 | Part I [Item 1. Identity of Directors, Senior Management and Advisers](index=8&type=section&id=Item%201.%20IDENTITY%20OF%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20ADVISERS) This section is not applicable as per the report [Item 2. Offer Statistics and Expected Timetable](index=8&type=section&id=Item%202.%20OFFER%20STATISTICS%20AND%20EXPECTED%20TIMETABLE) This section is not applicable as per the report [Item 3. Key Information](index=8&type=section&id=Item%203.%20KEY%20INFORMATION) This section outlines key business, operational, financial, and market risks, including internal control weaknesses and PFIC potential [Risk Factors](index=8&type=section&id=Item%203.D.%20Risk%20Factors) Significant risks include project-based revenue volatility, customer/supplier concentration, regulatory issues, and internal control weaknesses - The company's project-based business model, with large-scale solar projects accounting for **76% of total revenue in FY2024**, leads to revenue volatility, as shown by **133% growth from 2022 to 2023** followed by a **39% decline from 2023 to 2024**[26](index=26&type=chunk) Financial Performance Fluctuation (FY2022-2024) | Metric | FY2022 (RM) | FY2023 (RM) | FY2024 (RM) | Growth (22-23) | Growth (23-24) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | 63,509,466 | 148,053,973 | 90,344,588 | 133% | -39% | | **Net Income/(Loss)** | 3,943,506 | 7,147,068 | (5,150,005) | 81% | -172% | - A significant portion of revenue is derived from a small number of customers, with **JS Solar Sdn. Bhd. and Samaiden Sdn. Bhd. contributing 23.25% and 11.55% of total revenue in FY2024**, respectively[32](index=32&type=chunk) - The company faces concentration risk with its supplier, **Xiamen Solar First Energy Technology Co. Ltd.**, which accounted for **14.88% of total purchases in FY2024**, and whose exclusive distributorship agreement expired on January 1, 2025[34](index=34&type=chunk) - **Material weaknesses in internal control over financial reporting** have been identified, specifically a lack of accounting staff with appropriate IFRS and SEC reporting knowledge and deficient internal journal entry procedures, with remediation plans in place[76](index=76&type=chunk) - Share ownership is highly concentrated, with Director Lee Seng Chi, CFO See Sian Seong, and largest shareholder Reservoir Link Energy Bhd. collectively owning approximately **65.10% of total shares**, giving them significant influence over corporate matters[74](index=74&type=chunk) [Item 4. Information on the Company](index=25&type=section&id=Item%204.%20INFORMATION%20ON%20THE%20COMPANY) This section details Founder Group Limited's history, structure, IPO, core solar solutions business, competitive strengths, growth strategies, and operational aspects [History and Development of the Company](index=25&type=section&id=Item%204.A.%20History%20and%20Development%20of%20the%20Company) Founder Group Limited became the ultimate holding company in June 2023 and completed its Nasdaq IPO in October 2024, raising $4.875 million gross proceeds - The company undertook a corporate reorganization in June 2023, where **Founder Group Limited (BVI) acquired 100% of Founder Energy (Malaysia)** to become the ultimate holding company[109](index=109&type=chunk) - On October 24, 2024, the company closed its IPO of **1,218,750 Ordinary Shares at $4.00 per share**, raising **gross proceeds of $4.875 million** and receiving **net proceeds of approximately $1.539 million**[111](index=111&type=chunk) [Business Overview](index=28&type=section&id=Item%204.B.%20Business%20Overview) The company is a Malaysian solar solutions provider specializing in large-scale and C&I EPCC services, with growth strategies focused on regional expansion and diversification Revenue by Segment (FY2022-2024) | Segment | FY2022 (RM) | FY2023 (RM) | FY2024 (RM) | % of Total Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | | Large-scale Solar Projects | 51,761,466 | 131,988,574 | 68,864,991 | 76% | | C&I Projects | 11,748,000 | 16,065,399 | 21,479,597 | 24% | - The company has successfully delivered over **400 MWp of solar power plants in Malaysia** since 2021[122](index=122&type=chunk) - Growth strategies include expanding into other Southeast Asian countries like **Vietnam and the Philippines**, diversifying EPCC services to include **hydropower and biogas** (both planned for Q2 2025), and investing in renewable energy assets to generate recurring income[131](index=131&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) - As of December 31, 2024, the company had **82 full-time employees**, a significant increase from 45 in 2023 and 29 in 2022[196](index=196&type=chunk) [Item 5. Operating and Financial Review and Prospects](index=54&type=section&id=Item%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes the company's financial performance, liquidity, and capital resources, highlighting a 39% revenue decrease and net loss in FY2024 due to project delays [Operating Results](index=54&type=section&id=Item%205.A.%20Operating%20Results) Operating results show significant volatility, with a 39% revenue decrease and net loss in FY2024 due to project delays, contrasting with strong growth in FY2023 FY2024 vs. FY2023 Performance (in RM) | Metric | FY2023 | FY2024 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | 148,053,973 | 90,344,588 | (57,709,385) | (39)% | | *Large-scale solar* | 131,988,574 | 68,864,991 | (63,123,583) | (48)% | | *C&I projects* | 16,065,399 | 21,479,597 | 5,414,198 | 34% | | **Cost of Sales** | 130,201,026 | 84,102,118 | (46,098,908) | (35)% | | **Gross Profit** | 17,852,947 | 6,242,470 | (11,610,477) | (65)% | | **Selling & Admin Expenses** | 6,698,647 | 11,850,201 | 5,151,554 | 77% | | **Net (Loss)/Income** | 7,147,068 | (5,150,005) | (12,297,073) | (172)% | - The **39% revenue decrease in FY2024** was mainly due to the completion of several large-scale projects from the previous year and delays in the commencement of newly secured large-scale contracts[251](index=251&type=chunk)[252](index=252&type=chunk) - Selling and administrative expenses surged by **77% in FY2024**, driven by a **RM2.37 million impairment loss on contract assets**, a **RM0.55 million impairment loss on trade receivables**, and increased foreign exchange losses[263](index=263&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk) FY2023 vs. FY2022 Performance (in RM) | Metric | FY2022 | FY2023 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | 63,509,466 | 148,053,973 | 84,544,507 | 133% | | **Gross Profit** | 8,684,366 | 17,852,947 | 9,168,581 | 106% | | **Net Income** | 3,943,506 | 7,147,068 | 3,203,562 | 81% | [Liquidity and Capital Resources](index=74&type=section&id=Item%205.B.%20Liquidity%20and%20Capital%20Resources) The company funds operations through cash flow, borrowings, and equity, with RM13.9 million cash, RM65.4 million credit facilities, and significant capital expenditures for solar assets in FY2024 Cash Flow Summary (FY2023 vs. FY2024 in RM) | Cash Flow Activity | FY2023 | FY2024 | | :--- | :--- | :--- | | Net cash used in operating activities | (17,184,339) | (6,127,677) | | Net cash used in investing activities | (4,286,759) | (5,378,735) | | Net cash provided by financing activities | 15,959,960 | 13,918,726 | - As of December 31, 2024, the company had revolving credit facilities totaling **RM65.4 million** from various financial institutions[349](index=349&type=chunk) - Capital expenditures in FY2024 amounted to **RM25.5 million**, with **RM23.9 million dedicated to the acquisition of solar assets** to expand the company's ownership portfolio and strengthen recurring income streams[368](index=368&type=chunk)[369](index=369&type=chunk) [Critical Accounting Estimates](index=77&type=section&id=Item%205.E.%20Critical%20Accounting%20Estimates) Critical accounting estimates involve the impairment of trade receivables and contract assets using an ECL model, and revenue recognition for construction services based on estimated total costs - The company uses a simplified approach to estimate **lifetime expected credit losses (ECL)** for trade receivables and contract assets[371](index=371&type=chunk) - In FY2024, the company recorded an expected credit loss allowance of **RM552,876 for trade receivables** and **RM2,372,132 for contract assets**[372](index=372&type=chunk) - Revenue from construction services is recognized over time using an input method, based on the proportion of costs incurred to date relative to estimated total costs, which requires significant management judgment[373](index=373&type=chunk) [Item 6. Directors, Senior Management and Employees](index=78&type=section&id=Item%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section introduces the company's leadership team, board structure, compensation practices, and highly concentrated share ownership [Compensation](index=80&type=section&id=Item%206.B.%20Compensation) For FY2024, aggregate compensation for executive officers and directors was RM1,051,266, with no pension or retirement benefits set aside - Aggregate compensation for executive officers and directors in FY2024 was **RM1,051,266**[382](index=382&type=chunk) [Board Practices](index=80&type=section&id=Item%206.C.%20Board%20Practices) The Board of Directors consists of five members, including three independent directors who comprise the Audit, Compensation, and Nominating committees, with Marco Baccanello as the audit committee financial expert - The board has **three independent directors** who comprise the entirety of the Audit, Compensation, and Nominating and Corporate Governance committees[384](index=384&type=chunk)[397](index=397&type=chunk) - **Marco Baccanello** serves as the chairperson of the audit committee and qualifies as an audit committee financial expert[398](index=398&type=chunk) [Share Ownership](index=83&type=section&id=Item%206.E.%20Share%20Ownership) Share ownership is significantly concentrated, with CEO Lee Seng Chi and largest shareholder Reservoir Link Energy Bhd. controlling a substantial portion of the company's shares Beneficial Ownership of Major Shareholders and Management | Shareholder | Number of Shares | Percentage | | :--- | :--- | :--- | | **Directors and Executive Officers** | | | | Lee Seng Chi (CEO) | 4,832,954 | 24.89% | | See Sian Seong (CFO) | 157,000 | 0.81% | | All directors and executive officers as a group | 4,989,954 | 25.70% | | **5% Shareholders** | | | | Reservoir Link Energy Bhd. | 7,650,000 | 39.40% | | Avondale Capital, LLC | 1,750,000 | 9.01% | [Item 7. Major Shareholders and Related Party Transactions](index=86&type=section&id=Item%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details major shareholders and significant related party transactions, primarily involving sales of renewable energy products/services, advances, and management fees Significant Related Party Transactions (FY2024) | Related Party | Relationship | Nature of Transaction | Amount (RM) | | :--- | :--- | :--- | :--- | | RL Sunseap Energy Sdn. Bhd. | Related to largest shareholder | Sales of renewable energy products/services | (2,629,089) | | Reservoir Link Renewable Sdn Bhd. | Controlled by largest shareholder | Sales of renewable energy products/services | (3,053,327) | | Reservoir Link Energy Bhd. | Largest shareholder | Advances | 2,000,000 | | Lee Seng Chi | CEO & Director | Rental expense | 217,500 | [Item 8. Financial Information](index=88&type=section&id=Item%208.%20FINANCIAL%20INFORMATION) This section confirms the consolidated financial statements are appended, notes no material legal proceedings, and outlines the company's dividend policy of retaining earnings for growth - The company is not currently a party to any material legal proceedings[418](index=418&type=chunk) - The company has not declared or paid dividends and does not expect to in the foreseeable future, intending to retain earnings for operational funding and expansion[419](index=419&type=chunk) [Item 9. The Offer and Listing](index=89&type=section&id=Item%209.%20THE%20OFFER%20AND%20LISTING) The company's Ordinary Shares have been listed on the Nasdaq Capital Market under the ticker symbol 'FGL' since October 23, 2024[426](index=426&type=chunk) [Item 10. Additional Information](index=90&type=section&id=Item%2010.%20ADDITIONAL%20INFORMATION) This section covers exchange controls, material contracts, and an extensive overview of Malaysian, BVI, and U.S. taxation, including PFIC rules [Taxation](index=90&type=section&id=Item%2010.E.%20Taxation) This sub-section details Malaysian, BVI, and U.S. tax regimes, including the 24% Malaysian corporate tax rate, BVI tax exemption, and PFIC implications for U.S. Holders - The company's Malaysian subsidiaries are subject to a standard corporate income tax rate of **24%**[434](index=434&type=chunk) - The holding company, incorporated in the BVI, is not subject to income or capital gains tax under current BVI law[446](index=446&type=chunk) - The company does not believe it was a **Passive Foreign Investment Company (PFIC)** for the 2024 taxable year; however, its status is determined annually and could change, potentially subjecting U.S. Holders to adverse tax rules[459](index=459&type=chunk) - If the company were a PFIC, U.S. Holders could make a **mark-to-market election** as the shares are traded on the Nasdaq Capital Market, but the company does not intend to provide information for a qualified electing fund (QEF) election[465](index=465&type=chunk)[466](index=466&type=chunk) [Item 11. Quantitative and Qualitative Disclosures About Market Risk](index=99&type=section&id=Item%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is exposed to foreign currency, interest rate, and liquidity risks, with sensitivity analyses showing impacts on profit and an increased debt-to-equity ratio in FY2024 Foreign Currency Risk Sensitivity (Impact on Profit) | Currency (10% change) | FY2023 (RM) | FY2024 (RM) | | :--- | :--- | :--- | | United States Dollar | (276,362) | 86,376 | | Chinese Renminbi | (1,074,491) | (537,591) | - A **50 basis point (0.50%) change in interest rates** would impact the company's profit for fiscal year 2024 by approximately **RM93,895**[486](index=486&type=chunk) Debt-to-Equity Ratio | Metric | FY2023 | FY2024 | | :--- | :--- | :--- | | Total Debts (RM) | 24,709,116 | 35,039,857 | | Total Equity (RM) | 14,789,662 | 17,121,478 | | **Debt-to-Equity Ratio** | **1.67** | **2.05** | [Item 12. Description of Securities Other Than Equity Securities](index=101&type=section&id=Item%2012.%20DESCRIPTION%20OF%20SECURITIES%20OTHER%20THAN%20EQUITY%20SECURITIES) This section is not applicable as per the report Part II [Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds](index=102&type=section&id=Item%2014.%20MATERIAL%20MODIFICATIONS%20TO%20THE%20RIGHTS%20OF%20SECURITY%20HOLDERS%20AND%20USE%20OF%20PROCEEDS) This section details the use of IPO proceeds from October 2024, with approximately $1.55 million net proceeds received and a portion used for Southeast Asia expansion - The company completed its IPO in October 2024, receiving **net proceeds of approximately $1.549 million** after total expenses of approximately $3.337 million[497](index=497&type=chunk)[499](index=499&type=chunk) - As of the date of the annual report, the company has used **$30,983 of the IPO proceeds** for its planned expansion into other Southeast Asian countries[499](index=499&type=chunk) [Item 15. Controls and Procedures](index=102&type=section&id=Item%2015.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were ineffective as of December 31, 2024, due to insufficient accounting staff knowledge and deficient journal entry procedures, with remediation efforts underway - Management concluded that as of December 31, 2024, the company's disclosure controls and procedures were **ineffective**[500](index=500&type=chunk) - The ineffectiveness was attributed to a lack of accounting staff with appropriate IFRS/SEC knowledge and deficient internal journal entry procedures, with remediation efforts including training and hiring external consultants[501](index=501&type=chunk) [Item 16. Other Information](index=103&type=section&id=Item%2016.%20Other%20Information) This section covers governance and compliance, including the audit committee financial expert, principal accountant fees, home country governance practices, and cybersecurity risk management - **Mr. Marco Baccanello** is designated as the 'audit committee financial expert'[505](index=505&type=chunk) Principal Accountant Fees (FY2024) | Fee Category | Amount (USD) | | :--- | :--- | | Audit fees | 136,000 | | Audit-related fees | 0 | | Tax fees | 0 | | All other fees | 0 | | **Total** | **136,000** | - As a foreign private issuer, the company follows its home country (BVI) practices, exempting it from certain Nasdaq shareholder approval rules for issuances related to acquisitions, changes of control, and equity compensation plans[514](index=514&type=chunk)[515](index=515&type=chunk) Item 18. Financial Statements [Report of Independent Registered Public Accounting Firm](index=109&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor issued a fair opinion but included a 'Going Concern' paragraph due to net loss and negative working capital, identifying revenue recognition and financial asset impairment as Critical Audit Matters - The auditor's report includes a **'Going Concern' paragraph**, citing the company's **FY2024 net loss of $1,150,711** and its current liabilities exceeding current assets by **$2,275,216** as of December 31, 2024[532](index=532&type=chunk) - Critical Audit Matters identified were: **Revenue and cost recognition**, due to significant judgment in estimating total project costs, and **Recoverability and impairment of financial assets**, due to estimation uncertainty in assessing expected credit losses[537](index=537&type=chunk)[541](index=541&type=chunk) [Consolidated Financial Statements](index=112&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present the company's financial position, performance, and cash flows, showing a net loss of RM5.15 million in FY2024 and increased total assets and liabilities Consolidated Statement of Financial Position (Abridged) | Metric (in RM) | Dec 31, 2023 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | 83,873,519 | 114,292,130 | | *Current Assets* | 79,258,322 | 84,417,152 | | **Total Liabilities** | 69,083,857 | 97,170,652 | | *Current Liabilities* | 68,198,790 | 94,599,881 | | **Total Equity** | 14,789,662 | 17,121,478 | Consolidated Statement of Profit or Loss (Abridged) | Metric (in RM) | FY2022 | FY2023 | FY2024 | | :--- | :--- | :--- | :--- | | **Total Revenue** | 63,509,466 | 148,053,973 | 90,344,588 | | **Gross Profit** | 8,684,366 | 17,852,947 | 6,242,470 | | **Net Profit/(Loss)** | 3,943,506 | 7,147,068 | (5,150,005) | [Notes to Consolidated Financial Statements](index=117&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of accounting policies and figures, including the 'Going Concern' issue, increased borrowings, revenue breakdown, and significant customer/vendor concentration - Note 2 (Going Concern): Despite a **net loss of RM5.15 million** and current liabilities exceeding current assets by **RM10.18 million in FY2024**, management believes the company can continue as a going concern due to cost reduction efforts and continued financial support from lenders[567](index=567&type=chunk)[568](index=568&type=chunk) - Note 13 (Borrowings): Total bank borrowings increased to **RM35.0 million as of Dec 31, 2024**, up from RM24.7 million in 2023, primarily to finance working capital and solar asset investments[672](index=672&type=chunk) - Note 21 (Concentration of Risk): In FY2024, **two customers accounted for 23.25% and 11.55% of total revenue**, respectively, and **one vendor accounted for 14.80% of the total cost of sales**[719](index=719&type=chunk)[721](index=721&type=chunk)[724](index=724&type=chunk) Segment Gross Profit (in RM) | Segment | FY2022 | FY2023 | FY2024 | | :--- | :--- | :--- | :--- | | Large Scale Solar | 6,385,519 | 15,823,226 | 3,455,338 | | Commercial & Industrial | 2,298,847 | 2,029,721 | 2,787,132 |

Company Overview - Founder Group Limited is a leading engineering, procurement, construction, and commissioning (EPCC) solutions provider for solar photovoltaic (PV) systems in Malaysia [1][7] - The company focuses on large-scale solar projects and commercial and industrial (C&I) solar projects, aiming to promote eco-friendly resources and achieve carbon-neutrality [7] Recent Contract Announcement - The company has secured a contract worth RM11.6 million (approximately US$2.6 million) with a prominent solar installation company in Malaysia [1][2] - Founder Group will be responsible for the design, engineering, procurement, supply, delivery, construction, and commissioning of a rooftop solar PV generating facility [3] Project Details - The construction contract is expected to be completed in 2 years, followed by an Operations and Maintenance agreement that will provide benefits over the next 15 to 21 years [4] - The project is anticipated to be profitable with a double-digit profit margin [4] Industry Context - The Malaysian government has increased its renewable energy targets to achieve 40% (23GW) capacity by 2035, up from the current 27% (12GW) [6] - Solar energy is expected to contribute over 80% of the 11GW growth required by 2035, with the government initiating a new wave of large-scale solar (LSS) projects [6] - The total value of EPCC contracts in the market has risen to RM12.4 billion, up from RM7.4 billion, indicating sustained sector activity through the end of 2027 [6]