KOMARKCORP BERHAD (374265-A)
Lot 132, Jalan 16/1, Kawasan Perindustrian Cheras Jaya
43200 Balakong, Selangor Darul Ehsan, Malaysia.
Tel
: [603]9080 3333
Fax
: [603]9080 5233
Email : [email protected]
KOMARKCORP BERHAD (374265-A) | ANNUAL REPORT 2014
www.komark.com.my
CONTENTS
Corporate Information Corporate Structure
Chairman’s Statement
Corporate Social Responsibility
Distribution Network
Five-Years Group Financial Highlights
Notice of Annual General Meeting
Profile of Directors of Komarkcorp Berhad
Statement on Corporate Governance
Statement on Risk Management and Internal Control
Audit Committee Report
Other Information
Financial Statements
Analysis of Shareholdings
List of Properties
Proxy Form
2
3
4
6
7
8
9
11
16
27
29
33
35
98
101
CORPORATE INFORMATION
2
DIRECTORS
Tan Sri Ahmad bin Mohd Don
Koh Hong Muan @ Koh Gak Siong
Tan Kwe Hee Koh Chie Jooi
Koh Chee Mian
Lim Pei Tiam @ Liam Ahat Kiat
Datuk Ng Peng Hong @ Ng Peng Hay
Dato’ Yeow Wah Chin
Ihsan bin Ismail
MANAGEMENT TEAM
Ong Ann Boon
(Director)
General Labels & Labelling Pte. Ltd.
Chong Jiun Shyang
(Group Financial Controller)
Tan Kai Yee
(Assistant General Manager)
Yoong Chee Wah
(Operation Manager)
Michael Au Yong Wai Kong
(Export Manager)
General Label & Labelling (M) Sdn Bhd
Komark International (M) Sdn Bhd
REGISTERED OFFICE
Lot 6.05, Level 6, KPMG Tower
8 First Avenue, Bandar Utama
47800 Petaling Jaya
Selangor Darul Ehsan
Tel: 03-7720 1188
Fax: 03-7720 1111
PRINCIPAL PLACE OF BUSINESS
(Headquarters)
Lot 132, Jalan 16/1
Kawasan Perindustrian Cheras Jaya
43200 Balakong
Selangor Darul Ehsan
Tel: 03-9080 3333
Fax: 03-9080 5233
(Chairman / Independent Non-Executive Director)
(Group Chief Executive Officer / Executive Director)
(Joint Group Chief Executive Officer / Executive Director)
(Executive Director)
(Executive Director)
(Executive Director)
(Senior Independent Non-Executive Director)
(Non-Independent Non-Executive Director)
(Independent Non-Executive Director)
AUDIT COMMITTEE
Datuk Ng Peng Hong @ Ng Peng Hay
Chairman
(Senior Independent Non-Executive
Director)
Tan Sri Ahmad bin Mohd Don
Member of the Committee
(Chairman/Independent NonExecutive Director)
Dato’ Yeow Wah Chin
Member of the Committee
(Non-Independent Non-Executive
Director)
Ihsan bin Ismail
Member of the Committee
(Independent Non-Executive Director)
REMUNERATION COMMITTEE
Datuk Ng Peng Hong @ Ng Peng Hay
Chairman
(Senior Independent Non-Executive
Director)
REGISTRARS
Boardroom Corporate Services (KL)
Sdn Bhd (Company No. 3775-X)
Lot 6.05 Level 6 KPMG Tower
8 First Avenue
Bandar Utama
47800 Petaling Jaya
Selangor Darul Ehsan
Tel: 03-7720 1188
Fax : 03-7720 1111
PRINCIPAL BANKERS
Standard Chartered Malaysia Bank Bhd
(Company No. 115793-P)
Bank of Shanghai Co Ltd
Koh Hong Muan @ Koh Gak Siong
Member of the Committee
(Group Chief Executive Officer/
Executive Director)
Tan Kwe Hee
Member of the Committee
(Joint Group Chief Executive Officer/
Executive Director)
NOMINATION COMMITTEE
Datuk Ng Peng Hong @ Ng Peng Hay
Chairman
(Senior Independent Non-Executive
Director)
Tan Sri Ahmad bin Mohd Don
Member of the Committee
(Chairman/Independent NonExecutive Director)
Dato’ Yeow Wah Chin
Member of the Committee
(Non-Independent Non-Executive
Director)
Dato’ Yeow Wah Chin
Member of the Committee
(Non-Independent Non-Executive
Director)
Ihsan bin Ismail
Member of the Committee
(Independent Non-Executive Director)
Ihsan bin Ismail
Member of the Committee
(Independent Non-Executive Director)
KOM A R KCO R P B E R HAD
AUDITORS
Ong & Wong (AF0241)
Chartered Accountants
Unit C-20-5, Block C
20th Floor Megan Avenue II
12, Jalan Yap Kwan Seng
50450 Kuala Lumpur
Tel: 03-21611000
Fax: 03-21669131
Malayan Banking Berhad
(Company No. 3813-K)
Kuwait Finance House (M) Bhd
(Company No. 672174-T)
COMPANY SECRETARIES
Tai Yit Chan (MAICSA 7009143)
Chan Yoke Peng (MAICSA 7053966)
STOCK EXCHANGE LISTING
Bursa Malaysia Securities Berhad
(Company No. 635998-W)
Main Market
CORPORATE STRUCTURE
3
100%
KOMARK (THAILAND)
CO. LTD.
(1554/2358)
100%
GENERAL LABELS
& LABELLING (M) SDN. BHD.
(93225-V)
70%
GENERAL LABELS & LABELLING
(PENANG) SDN. BHD.
8.4%
GENERAL LABELS & LABELLING
PTE. LTD.
100%
GENERAL LABELS &
LABELLING (JB) SDN. BHD.
(480867-X)
(146231-W)
(198300123C)
50%
30%
GENERAL LABELS & LABELLING
(IPOH) SDN. BHD.
1%
91.6%
50%
(458045-W)
PT KOMARK LABELS AND
LABELLING INDONESIA
99%
100%
100%
100%
KOMARK INTERNATIONAL
(M) SDN. BHD.
49%
(96626-V)
KOMARK AUSTRALASIA
PTY. LTD.
(087852793)
KOMARK INVESTMENT
HOLDINGS LTD.
(440077)
KOMARK ENTERPRISE
CO. LTD.
(5053)
100%
SHANGHAI KOMARK LABELS
& LABELLING CO. LTD.
(020411)
100%
GUANGZHOU KOMARK LABELS
& LABELLING CO. LTD.
(100286)
100%
KOMARK HONG KONG
CO. LTD.
(754596)
ANNUA L R EPORT 2 0 1 4
CHAIRMAN’S STATEMENT
4
On behalf of the Board of Directors,
I am pleased to present the Annual
Report of Komarkcorp Berhad and its
subsidiary Companies (“Group”) for
the financial year ended 30 April 2014
(“FYE 2014”).
PERFORMANCE REVIEW
The FYE 2014 presented yet another challenging year for the Group. The Group recorded an increase of 4.24% in revenue
to RM141.805 million compared to RM136.037 million recorded in preceding financial year. The Multinational Customers
segment continued to contribute substantially to the Group’s turnover.
The result of the Group for FYE 2014 had been adversely affected by an exercise in writing down of the value of plant
and machinery to their economic net worth, writing off of obsolete inventories and making provision for slow moving
inventories as well as writing off of bad debts and making provision for doubtful debts, writing off of unreconciled interGroup balances and writing off of development expenditure. These adjustments total RM27.211 million. Together with
the loss from operations of RM1.493 million, the loss before taxation for the year came to RM28.704 million compared to
a loss of RM2.273 million for the preceding financial year.
The loss after taxation for the year was RM28.909 compared to a loss of RM4.831 million for the preceding financial year.
Revaluation of land & building were also made as at the end FYE 2014 and resulted in a surplus of RM12.036 million. This
amount was recognized as comprehensive income.
MARKET AND BUSINESS OUTLOOK AND OPERATIONAL STRATEGIES
The economic recovery in the developed economies is gaining momentum, but due to the expected slower growth in
China, the overall growth momentum in Asia is projected to be moderate. The Malaysia economy is expected to register
a GDP growth of 4.5 – 5.5% for 2014 compared to 4.7% achieved in 2013.
With a diversified market in the Asia Pacific region (mainly Malaysia, China, Singapore, Thailand, Indonesia, India, Sri
Lanka and Philippines), the Group is in a position to mitigate any impact of economic slowdown.
The Group has put in place a turn-round plan intended to ensure that the Group is able to generate a sustainable profit
commensurate with the capital employed. The measures include discontinuing unprofitable branches and operations,
close monitoring of expenses, reducing wastages, reorganising workforce, reevaluating market segment to focus on,
explore new market and a fund raising exercise to reduce borrowings. The Board is of the view that these efforts will bear
fruits over the next three years.
KOM A R KCO R P B E R HAD
CHAIRMAN’S STATEMENT
5
(cont’d)
DIVIDEND
The Board of Directors is not recommending any dividend payment for the financial year ended 30 April 2014.
CORPORATE DEVELOPMENT
On 1 August 2014, the Company announced that it will carry out a corporate exercise which includes, inter-alia, the
following proposals :1) Proposed par value reduction via the cancellation of RM0.75 of the par value of every existing ordinary share of
RM1.00 each in the issued and paid-up share capital of the Company pursuant to Section 64 of the Company
Act,1965;
2) Proposed renounceable right issue of up to 40,637,005 new ordinary shares of RM0.25 each in the Company at an
indicative issue price of RM0.30 per right share on the basis of one (1) rights share for every two (2) existing share
held, together with up to 40,637,005 free detachable warrants in the Company on the basis of one (1) free warrant for
every one (1) right share subscribed for, on an entitlement date to be determined later after the proposed par value
reduction; and
3) Proposed amendments to the memorandum and articles of Association of the Company
These proposals have been approved by the shareholders at the Extraordinary General Meeting held on 25 September
2014 and the Board expects the proposed corporate exercise to be completed by the end of 2014.
ACKNOWLEDGEMENTS
On behalf of the Board of Directors, I wish to express our sincere appreciation to the Management and staff of the Group
for their continued dedication, commitment and loyalty to the Group. I also wish to express our sincere appreciation to our
valued shareholders, customers, business associates, government authorities and bankers for their continued support
and cooperation. Last but not least, I regret to inform that Datuk Ng Peng Hong @ Ng Peng Hay has declined to stand for
Director Re-election in this forthcoming AGM. I would like to take this opportunity to thank him for his contributions and
services rendered to the Group since 1997 and wish him success on all his future endeavours.
Ahmad bin Mohd Don
Independent Non-Executive Chairman
ANNUA L R EPORT 2 0 1 4
CORPORATE SOCIAL RESPONSIBILITY
6
The Group acknowledges and integrates the Corporate Social Responsibility (“CSR”) into its operations and decision
making based on ethical values and respect for the environment, community, marketplace and employees’ welfare.
a)
The Environment
The Group has undertaken various measures to mitigate the adverse impact from our manufacturing operations to
the environment such as disposal of chemicals and compliance to Environment Act. The Group also encourages its
staff to reduce the paper usage and recycle the wastage materials.
b)
The Community
The Group continues to contribute to the charitable, social and welfare programs and authorities on ad hoc basis.
c)
The Marketplace
The Group engages in ethical procurement practices by adopting a standard procedure in the vendor selection and
ensures that the supplies are in accordance to the Group’s materials requirements.
The Group also continues to strive to meet the expectation of its shareholders by enhancing the value of the Group
in all possible ways.
d)
The Employees’ Welfare
The Group recognises that employees are important assets. In line with this belief, the Group has in place a Safety
Policy to provide a safe and healthy working environment to its employees with comprehensive occupational health
and safety resources.
The Group also believes in promoting employees’ morale through the proper human capital development.
KOM A R KCO R P B E R HAD
DISTRIBUTION NETWORK
7
MALAYSIA HEADQUARTERS - KUALA LUMPUR
PENANG
IPOH
JOHOR BAHRU
SHANGHAI
LANGFANG
GUANGZHOU
SINGAPORE
THAILAND
INDONESIA
ANNUA L R EPORT 2 0 1 4
FIVE -YEARS GROUP FINANCIAL HIGHLIGHTS
8
Year Ended 30 April
Year ended 30 April
2014
2013
2012
2011
2010
Operating Result (RM'000)
Turnover
141,805
123,346
112,968
111,998
Profit /(Loss) Before Tax
(28,704)
(2,273)
830
2,900
2,900
Profit /(Loss) After Tax
(28,909)
(4,831)
79
2,115
2,020
136,037
Key Balance Sheet Data (RM'000)
Total Assets
Total Interest Bearing Borrowings
Total Liabilities
204,209
220,447
214,793
217,314
221,369
72,319
69,938
66,019
75,710
82,856
105,333
103,799
94,891
99,003
104,904
81,275
81,275
81,275
81,275
116,648
119,902
118,311
116,465
150000
111,998
0.00
90000
121.65
Net Assets
Financial Ratio (%)
(6.00)
0.10
-5000
0.50
0.00
143.52
147.53
-10000
60000
2014
2011
2010
2.65
2.53
0.00
0.00
145.57
143.30
-15000
Return on Equity
(29.24)
(4.14)
0.07
1.79
1.73
(14.16)
(2.19)
-20000
0.97
0.91
73.14
59.96
55.06
63.99
71.14
(28,704)
30000
0.04
-25000
0
2014
TURNOVER
(RM’000)
2013
2012
2011
2010
-10000
-10000
-15000
-15000
-15000
-20000
-20000
-20000
-25000
-30000
-30000
(4,831)
(28,909)
2,020
2,115
2,02079
0
-25000
2,115
0
2013
-5000
-30000
79
5000
2,020
2014
-10000
5000
2011
2010
0
-5000
-25000
2,115
2,900
79
2,900
(2,273)
KOM A R KCO R P B E R HAD
2010
5000
-5000
(28,704)
2013 2014
2012 2013
2011 2012
2010 2011
830
0
0
(2,273)
2014
2014
2,900830
2,900
2010
5000
(28,704)
30000
111,998
30000
112,968
60000
0
111,998
123,346
60000
136,037112,968
90000
123,346
141,805
90000
136,037
141,805
120000
PROFIT/LOSS AFTER TAX
(RM’000)
2013 2014
2012 2013
2011 2012
2010 2011
150000
120000
-30000
PROFIT/LOSS BEFORE TAX
(RM’000)
5000
0
2012
Return on Total Assets
Gearing ratio
150000
2013
(2,273)
(35.60)
112,968
Basic EPS /(LPS)
Gross Dividend (Recommended)
0
123,346
120000
Per share (sen)
136,037
141,805
Share Information
830
5000
2,900
81,275
98,876
2,900
Paid-Up Capital
Shareholders' Equity
2012
NOTICE OF ANNUAL GENERAL MEETING
9
NOTICE IS HEREBY GIVEN THAT the Eighteenth Annual General Meeting of the Company will be convened and held at
Perdana Room, Bukit Jalil Golf & Country Resort, Jalan 3/155B, Bukit Jalil, 57000 Kuala Lumpur on Tuesday, 28 October
2014 at 10.00 a.m. to transact the following businesses:AGENDA
As Ordinary Business
1.
To receive the Audited Financial Statements for the financial year ended 30 April 2014
together with the Directors’ and Auditors’ Reports thereon.
Please refer to
Note 1 of the
Explanatory Notes
2.
To approve the Directors’ Fees for the financial year ended 30 April 2014 and the
payment thereof.
Ordinary Resolution 1
3.
To re-elect the following Directors who are retiring under Article 93.1 of the Articles of
Association of the Company:(i)
Mr Koh Hong Muan @ Koh Gak Siong
(ii)
Mr Koh Chie Jooi
Ordinary Resolution 2
Ordinary Resolution 3
Datuk Ng Peng Hong @ Ng Peng Hay who retires in accordance with Article 93.1 of the
Company’s Articles of Association has expressed his intention not to seek re-election.
Hence, he will retain office until the conclusion of the Eighteenth Annual General Meeting.
4.
To re-appoint Messrs Ong & Wong as Auditors of the Company and to authorise the
Directors to fix their remuneration.
Ordinary Resolution 4
As Special Business
To consider and, if thought fit, to pass the following resolutions:5.
Re-appointment of Director over Seventy (70) years of age
“THAT Mr Tan Kwe Hee, who retires pursuant to Section 129(6) of the Companies Act,
1965, be and is hereby re-appointed as Director of the Company to hold office until the
conclusion of the next Annual General Meeting of the Company.”
6.
Ordinary Resolution 5
Proposed Authority under Section 132D of the Companies Act, 1965 for the
Directors to issue shares
“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are
hereby authorised to issue shares in the Company at any time until the conclusion of
the next AGM 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 issued share capital of the
Company (excluding treasury shares) for the time being, subject always to the approval
of all relevant regulatory bodies being obtained for such allotment and issue.”
Ordinary Resolution 6
BY ORDER OF THE BOARD
TAI YIT CHAN (MAICSA 7009143)
CHAN YOKE PENG (MAICSA 7053966)
Secretaries
Selangor Darul Ehsan
Date: 3 October 2014
ANNUA L R EPORT 2 0 1 4
NOTICE OF ANNUAL GENERAL MEETING
10
(cont’d)
NOTES
1.
A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies
to attend and vote in his stead. A proxy may but need not be a member of the Company and the provisions of
Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to
the qualification of the proxy.
2.
A member may appoint not more than two (2) proxies to attend and vote at the same meeting. Where a member
appoints two (2) proxies, the appointments shall be invalid unless he specifies the proportions of his shareholdings
to be represented by each proxy.
3.
Where a member of the Company is an exempt authorised nominee which holds shares in the Company for
multiple beneficial owners in one securities account (“omnibus account”) as defined under the Securities Industry
(Central Depositories) Act, 1991, there is no limit to the number of proxies which the exempt authorised nominee
may appoint in respect of each omnibus account it holds.
4.
The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly
authorised in writing or, if the appointor is a corporation, either under its Common Seal or under the hand of the
attorney.
5.
The instrument appointing a proxy, with the power of attorney or other authority (if any) under which it is signed or
a notarially certified or office copy of such power or authority, must be deposited at the Registered Office of the
Company at Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, 47800 Petaling Jaya, Selangor Darul
Ehsan, Malaysia not less than 48 hours before the time set for holding the meeting or any adjournment thereof.
6. In respect of deposited securities, only members whose names appear on the Record of Depositors on 16 October
2014 (General Meeting Record of Depositors) shall be eligible to attend, speak and/or vote at the meeting or
appoint proxy(ies) to attend, speak and/or vote on his behalf.
Explanatory Notes:
(1) To receive the Audited Financial Statements
Agenda item no. 1 is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does
not require a formal approval of shareholders for the Audited Financial Statements. Hence, this item on the Agenda
is not put forward for voting.
(2)
To re-appoint the Director over Seventy (70) years of age
This proposed resolution is in accordance with Section 129(6) of the Companies Act, 1965 and if passed, Mr Tan
Kwe Hee, who is over seventy (70) years of age, will be re-appointed as Director of the Company and will hold office
until the conclusion of the next Annual General Meeting.
(3)
Proposed Authority under Section 132D of the Companies Act, 1965 for the Directors to issue shares
The Company had, during its Seventeenth Annual General Meeting (“AGM”) held on 30 October 2013, obtained its
shareholders’ approval for the general mandate for issuance of shares pursuant to Section 132D of the Companies
Act, 1965 (“the Act”). The Company did not issue any shares pursuant to this mandate obtained.
The Ordinary Resolution 6 proposed under item 6 of the Agenda is a renewal of the general mandate for issuance
of shares by the Company under Section 132D 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 issued share capital of the Company (excluding treasury shares) for purpose of
funding the working capital and future investment of the Group. This would eliminate any delay arising from and
cost involved in convening a general meeting to obtain approval of the shareholders for such issuance of shares.
This authority, unless revoked or varied by the Company at a general meeting, will expire at the next AGM.
KOM A R KCO R P B E R HAD
PROFILE OF DIRECTORS
11
of Komarkcorp Berhad
Koh Hong Muan @ Koh Gak Siong
Tan Kwe Hee
Age : 66
Nationality : Malaysian
Qualification : Malaysian Certificate of Education
Directorate : Executive Director
Designation : Group Chief Executive Officer
Other Directorships of Public Companies : None
Age : 70
Nationality : Malaysian
Qualification :
1. Masters in Business Administration (Hull, United
Kingdom)
2. Associate in Banking (Malaysia)
3. Associate of Malaysian Institute of Management
The Date He Was First Appointed to the Board :
16 June 1997
The Details of Any Board Committee to Which He
Belongs : Remuneration Committee of Komarkcorp
Berhad
Securities Holding in the Company :
Direct :
6,519,900 ordinary shares
Indirect :
10,906,889 ordinary shares
Securities Holding in the Subsidiaries :
Deemed to have interests in shares of all the subsidiaries
to the extent Komarkcorp Berhad has an interest.
Family Relationship With Any Director and / or Major
Shareholders of the Company :
Parent to Mr. Koh Chie Jooi and Mr. Koh Chee Mian.
Directorate : Executive Director
Designation : Joint Group Chief Executive Officer
Other Directorships of Public Companies :
Group Director of Bina Puri Holdings Bhd
The Date He Was First Appointed to the Board :
16 August 2013
The Details of Any Board Committee to Which He
Belongs : Remuneration Committee of Komarkcorp
Berhad
Securities Holding in the Company :
Direct:
5,112,100 ordinary shares
Indirect:
1,200,000 ordinary shares
Securities Holding in the Subsidiaries :
Deemed to have interests in shares of all the subsidiaries
to the extent Komarkcorp Berhad has an interest
Family Relationship With Any Director and / or Major
Shareholders of the Company : None
Conflict of Interest : None
Conflict of Interest : None
List of Convictions for Offences Within the Past 10
Years Other Than Traffic Offences : None
Working Experience :
Mr. Koh Hong Muan @ Koh Gak Siong is the founder of the
Komarkcorp Group of Companies and is currently the Chief
Executive Officer of Komarkcorp Group. He is responsible
for formulating the overall business development and
corporate strategies for the Group. Mr. Koh has been
engaged in the manufacturing of pressure sensitive labels
and automatic labelling systems for over 38 years during
which he gained wide experience in product development
and corporate management. He co-invented two sets
of patented feeding mechanism in hand-held labellers
and precision products feeding device with pneumatic
logistic control systems in automatic labelling machines,
respectively. Mr. Koh’s efforts were recognised by the
Malaysian Government when General Labels & Labelling
(M) Sdn Bhd and Komark International (M) Sdn Bhd, whollyowned subsidiaries of Komarkcorp Berhad, were granted
Pioneer Status for the manufacturing of automatic labelling
machines and hand-held labellers by Malaysia Industrial
Development Authority (MIDA), Malaysia in 1991 and
1997, respectively. Mr. Koh is a member of The Institute of
Printing of the United Kingdom.
The Number of Board Meetings Attended in the
Financial Year : 7 out of 7
List of Convictions for Offences Within the Past 10
Years Other Than Traffic Offences : None
Working Experience :
Mr. Tan Kwe Hee was appointed as executive director of
Komarkcorp. Berhad on 16/8/2013 and is currently the
Joint Group Chief Executive Officer of Komarkcorp Group.
He is responsible for the overall financial matters. He is also
Group Director of Bina Puri Holdings Bhd.
Mr. Tan was retired as a Senior Banker who has served in
UMBC Bank for 9 1/2 years and AFFIN Bank for 26 years.
He has vast banking experience which covers branch
banking, banking operations and loan recovery. He retired
as Senior Vice President of AFFIN Bank in 2002.
While still serving in AFFIN Bank, he was appointed by
Bank Negara Malaysia (BNM) in August 1996 as Loan
Recovery Advisor to the BNM recovery management team
on RHB-RMBB Assets (the then Rakyat Merchant Bank).
He joined Bina Puri Holdings as Group Financial Advisor in
2003 and later on appointed as Group Executive Director
in March 2013.
The Number of Board Meetings Attended in the
Financial Year : 4 out of 4
ANNUA L R EPORT 2 0 1 4
PROFILE OF DIRECTORS
12
of Komarkcorp Berhad (cont’d)
Koh Chie Jooi
Koh Chee Mian
Age : 36
Nationality : Malaysian
Qualification : Degree in Bachelor of Commerce
Directorate : Executive Director
Designation : Nil
Other Directorships of Public Companies : None
The Date He Was First Appointed to the Board :
27 June 2002
Age : 34
Nationality : Malaysian
Qualification : Degree in Bachelor of Engineering
Directorate : Executive Director
Designation : Nil
Other Directorships of Public Companies : None
The Date He Was First Appointed to the Board :
15 December 2003
The Details of Any Board Committee to Which He
Belongs : None
The Details of Any Board Committee to Which He
Belongs : None
Securities Holding in the Company :
Indirect :
17,426,789 ordinary shares
Securities Holding in the Company :
Direct :
206,100 ordinary shares
Securities Holding in the Subsidiaries :
Deemed to have interests in shares of all the subsidiaries to
the extent Komarkcorp Berhad has an interest.
Indirect:
17,426,789 ordinary shares
Family Relationship With Any Director and / or Major
Shareholders of the Company :
Child of Mr. Koh Hong Muan @ Koh Gak Siong and brother
of Mr. Koh Chee Mian.
Conflict of Interest : None
List of Convictions for Offences Within the Past 10
Years Other Than Traffic Offences : None
Working Experience :
Mr. Koh Chie Jooi was appointed to the Board of
Komarkcorp Berhad as an Executive Director on 27 June
2002. On 16 May 2011, he was appointed as Managing
Director of the Komarkcorp Group.
On 27 March 2014, he was redesignated as an Executive
Director of Komarkcorp Berhad and as Managing Director
at subsidiaries level and responsible for Asean Subsidiaries.
He graduated from the University of Sydney, Australia
with a degree in Bachelor of Commerce. Prior to joining
Komarkcorp in December 2001 as Assistant Accounts
Manager, he was attached to KPMG from February 2001
to November 2001, with his last held position as Audit
Assistant.
Mr Koh is currently assisting the Group Chief Executive
Officer of Komarkcorp Group to oversee the overall
operation except for China operations and in formulating
the business development and corporate strategies for the
Group.
The Number of Board Meetings Attended in the
Financial Year : 7 out of 7
KOM A R KCO R P B E R HAD
Securities Holding in the Subsidiaries :
Deemed to have interests in shares of all the subsidiaries to
the extent Komarkcorp Berhad has an interest.
Family Relationship With Any Director and / or Major
Shareholders of the Company :
Child of Mr. Koh Hong Muan @ Koh Gak Siong and brother
of Mr. Koh Chie Jooi.
Conflict of Interest : None
List of Convictions for Offences Within the Past 10
Years Other Than Traffic Offences : None
Working Experience :
Mr Koh Chee Mian was appointed to the Board of
Komarkcorp Berhad as an Executive Director on 15
December 2003. On 16 May 2011, he was appointed as
Deputy Managing Director of Komarkcorp Group.
On 27 March 2014, he was redesignated as an Executive
Director of Komarkcorp Berhad and as Managing Director
at subsidiaries level in charge for China subsidiaries.
He graduated from the King’s College London, United
Kingdom with a degree in Bachelor of Engineering.
Currently, Mr Koh is the person-in-charge of the overall
operations for China.
The Number of Board Meetings Attended in the
Financial Year : 7 out of 7
PROFILE OF DIRECTORS
13
of Komarkcorp Berhad (cont’d)
Lim Pei Tiam @ Liam Ahat Kiat
Age : 68
Nationality : Malaysian
Qualification :
1. Diploma in Banking from Institute of Bankers, London
2. Senior Associate of Institute of Bankers, Malaysia
Directorate : Executive Director
Designation : Company Director
Other Directorships of Public Companies : Poh Huat
Resources Holdings Berhad
The Date He Was First Appointed to the Board :
16 August 2013
The Details of Any Board Committee to Which He
Belongs : None
Securities Holding in the Company :
Direct :
9,938,800 ordinary shares
Securities Holding in the Subsidiaries : Deemed to have
interests in shares of all the subsidiaries to the extent
Komarkcorp Berhad has an interest.
Family Relationship With Any Director and / or Major
Shareholders of the Company : None
Conflict of Interest : None
List of Convictions for Offences Within the Past 10
Years Other Than Traffic Offences : None
Working Experience :
Mr Lim Pei has 20 years of experience in large commercial
group and position last held was Branch Manager of UMBC
Bank. In 1998, Mr Lim set up his own trading business in
both Thong Thye Siang Sdn Bhd. and Great Plus Enterprise
Sdn. Bhd.
The Number of Board Meetings Attended in the
Financial Year : 3 out of 4
Datuk Ng Peng Hong @ Ng Peng Hay
D.M.SM., D.SM., P.J.K.
Age : 62
Nationality : Malaysian
Qualification : Malaysian Certificate of Education
Directorate : Senior Independent Non-Executive Director
Designation : Company Director
Other Directorships of Public Companies :
Bonia Corporation Berhad
Farm’s Best Berhd
Wellcall Holdings Berhad
ICapital.Biz Berhad
The Date He Was First Appointed to the Board :
16 June 1997
The Details of Any Board Committee to Which He
Belongs : Audit Committee, Remuneration Committee
and Nomination Committee of Komarkcorp Berhad
Securities Holding in the Company : Nil
Securities Holding in the Subsidiaries : Nil
Family Relationship With Any Director and / or Major
Shareholders of the Company : None
Conflict of Interest : None
List of Convictions for Offences Within the Past 10
Years Other Than Traffic Offences : None
Working Experience :
Datuk Ng Peng Hong @ Ng Peng Hay was appointed to
the Board of Komarkcorp Berhad on 16 June 1997. He was
the State Assemblyman for Tengkera Constituency under
Barisan Nasional between 1982 and 1986. He then served
as a Senator in the Malaysian Parliament from 1987 to 1993.
His first involvement in social activities was upon completing
his secondary education. Datuk Ng has been appointed
as the Investment Co-ordinator of the Malacca State
Development Corporation to handle direct investments in
the State of Melaka since 1988. Together with his team of
officials and his excellent public relations, he has helped
in attracting numerous Taiwanese, Singaporean and
Chinese investors into the State of Melaka. In recognition
of his efforts and dedication, Datuk Ng was conferred the
Darjah Mulia Seri Melaka by his Excellency, the Governor
of Melaka in 1992. On 17 July 1999, the Taiwanese
Government awarded him the Economic Medal. Datuk Ng
is the Chairman of MCA, 7th Branch Melaka since 1982.
Presently, he is the Chairman of Koperasi Jayadiri Malaysia
Berhad and is a Board Member of Malaysian Investment
Development Authority (MIDA) and Director of The Tun
Hussein Onn National Eye Hospital.
The Number of Board Meetings Attended in the
Financial Year : 6 out of 7
ANNUA L R EPORT 2 0 1 4
PROFILE OF DIRECTORS
14
of Komarkcorp Berhad (cont’d)
Tan Sri Ahmad Bin Mohd Don
Dato’ Yeow Wah Chin
Age : 67
Nationality : Malaysian
Qualification :
1. Bachelor of Economics & Business (First Class Hons)
Aberystwyth University, United Kingdom
2. Fellow of the Institute of Chartered Accountants in
England and Wales (ICAEW)
3. Members of the Malaysian Institute of Certified Public
Accountants
Directorate : Independent Non-Executive Director
Designation : Chairman
Other Directorships of Public Companies :
1. MAA Group Berhad
2. United Malacca Berhad
3. Hap Seng Plantations Holdings Berhad
The Date He Was First Appointed to the Board :
16 August 2013
Age : 54
Nationality : Malaysian
Qualification :
1. Bachelor of Economics (Hons) University Kebangsaan
Malaysia
2. Bachelor of Laws (LL.B) (Hons) University of Wales,
United Kingdom
3. Certificate in Legal Practice
Directorate : Non-Independent Non-Executive Director
Designation : Company Director
Other Directorships of Public Companies :
Bina Puri Holdings Bhd
The Date He Was First Appointed to the Board :
16 August 2013
The Details of Any Board Committee to Which He
Belongs : Audit Committee and Remuneration Committee
of Komarkcorp Berhad
Securities Holding in the Company : Nil
Securities Holding in the Subsidiaries : Nil
Family Relationship With Any Director and / or Major
Shareholders of the Company : None
Conflict of Interest : None
List of Convictions for Offences Within the Past 10
Years Other Than Traffic Offences : None
Working Experience :
Tan Sri Ahmad Bin Mohd Don, is the Independent NonExecutive Chairman of Komarkcorp Berhad. He was first
appointed as an Independent Non-Executive Director on 16
August 2013 and became the Chairman on 11 September
2013.
Tan Sri Ahmad graduated summa cum laude in Economics
and Business from the Aberystwyth University, United
Kingdom. He is fellow of the Institute of Chartered
Accountants in England and Wales and a member of the
Malaysian Institute of Certified Public Accountants.
Tan Sri Ahmad has extensive experience in finance and
banking, having worked in various capacities with Pernas
Securities Sdn Bhd, Permodalan Nasional Berhad and
Malayan Banking Berhad. He was the Group Managing
Director and Chief Executive Officer of Malayan Banking
Berhad from 1991 to 1994 before assuming the position as
the Governor of Bank Negara Malaysia from May 1994 to
August 1998.
The Number of Board Meetings Attended in the
Financial Year : 3 out of 4
KOM A R KCO R P B E R HAD
The Details of Any Board Committee to Which He
Belongs : Audit Committee and Nomination Committee of
Komarkcorp Berhad
Securities Holding in the Company :
Direct:
520,000 ordinary shares
Securities Holding in the Subsidiaries : Nil
Family Relationship With Any Director and / or Major
Shareholders of the Company : None
Conflict of Interest : None
List of Convictions for Offences Within the Past 10
Years Other Than Traffic Offences : None
Working Experience :
Dato’ Yeow Wah Chin, was appointed to the Board on
16 August 13. A lawyer by profession, Dato’ Yeow holds
a Bachelor of Economics (Hons) degree from University
Kebangsaan Malaysia in 1984 and worked with Malayan
Banking Bhd. for a few years before he went for further
studies to read law at the University College of Wales,
Aberystwyth, United Kingdom in September, 1989 where
he graduated with LLB (Hons) degree in 1991. Upon his
return he continued to serve Malayan Banking Bhd. for two
years before he set up his own legal practice, Messrs Yeow
& Salleh in 1994.
He specialises in banking and commercial law. He has
been appointed as a member of Advocates and Solicitors’
Disciplinary Committee for some years and had also
served as a committee member of the Conveyancing
Practice Committee of the Bar Council. As an experienced
practising lawyer, he had also been appointed to serve as
Legal Advisor for the Society of Interpreters of the Deaf
in Selangor and Wilayah Persekutuan and Yeow See
Association in Melaka. He is a member of the Board of the
Company. He also sits as a member of the Board of Bina
Puri Holdings Berhad.
Dato’ Yeow is currently the Lions Clubs International,
Multiple District 308 Council Chairperson and also the
Chairperson of the Lions Education Foundation
The Number of Board Meetings Attended in the
Financial Year : 3 out of 4
PROFILE OF DIRECTORS
of Komarkcorp Berhad (cont’d)
15
Ihsan bin Ismail
Age : 51
Nationality : Malaysian
Qualification :
1. Master in Business Administration
California State University, School of Business
Administration,
2. Bachelor of Science in Business Administration
Oregon State University, School of Business
Administration
Directorate : Independent Non-Executive Director
Designation : Company Director
Other Directorships of Public Companies : None
The Date He Was First Appointed to the Board :
1 January 2009, resigned on 16 August 2013 and
reappointed on 23 September 2013.
The Details of Any Board Committee to Which He
Belongs : Audit Committee, Remuneration Committee
and Nomination Committee of Komarkcorp Berhad
Securities Holding in the Company : Nil
Securities Holding in the Subsidiaries : Nil
Family Relationship With Any Director and / or Major
Shareholders of the Company : None
Conflict of Interest : None
List of Convictions for Offences Within the Past 10
Years Other Than Traffic Offences : None
Working Experience :
Encik Ihsan bin Ismail was reappointed to the Board
of Komarkcorp Berhad on 23 September 2013 after
resignation from his first appointment on 16 August 2013.
He joined Lembaga Tabung Haji as an investment officer
after graduating from California State University, USA in
1987 with a Master in Business Administration.
Encik Ihsan was attached to Lembaga Tabung Haji for 9
years from 1987 to 1996 and he was a special assistant
to Deputy Director General in Investment and an assistant
director of corporate affair prior to setting up his own
business. He also represented Tabung Haji in several
companies namely Syarikat Peladang Tabung Haji Sdn
Bhd for 7 years from 1989 to 1996 and Syarikat Times
Offset Malaysia Sdn Bhd for 15 years from 1992 to 2007.
Encik Ihsan has wide experience in investment management
and project evaluations.
The Number of Board Meetings Attended in the
Financial Year : 2 out of 2
ANNUA L R EPORT 2 0 1 4
STATEMENT ON CORPORATE GOVERNANCE
16
The Board of Directors appreciates the importance of adopting high standards of corporate governance within the Group.
The Board views corporate governance as synonymous with three key concepts: namely transparency, accountability and
corporate performance. As such, the Board strives to adopt the substance behind corporate governance prescriptions
and not merely the form.
This Statement outlines the key aspects of how the Company has applied and taken into account the Principles
enumerated under the Malaysian Code of Corporate Governance 2012 (the “Code”) during the financial year ended 2013.
Where there are gaps in the Company’s observation of any of the Recommendations of the Code, these are disclosed
herein with explanations.
Principles Statement
The following statement sets out how the Group has applied and the extent of its compliance with the best practices set
out in the Code.
A.
Establish Clear Roles and responsibilities
The Group acknowledges the pivotal role of the Board of Directors in the stewardship of its direction and operations,
and ultimately the enhancement of long-term shareholder value. To fulfil this role, the Board is responsible for the
overall corporate governance of the Group, including its strategic direction, establishing goals for management
and monitoring the achievement of these goals. The role and function of the Board, as well as the differing roles of
executive directors and non-executive directors are clearly delineated and defined.
The Board has a formal schedule of matters reserved to itself for decision, which includes the overall Group
strategy and direction, acquisition and investment policy, approval of major capital expenditure, consideration of
significant financial matters and its review of the financial and operating performance of the Group. The schedule
ensures that the governance of the Group is firmly in the Board’s hands.
Board Charter and Board Committees
The Board Charter of the Company is in place which sets out how its roles, responsibilities, composition and
processes, having regard to principles of good corporate governance and requirements of Main Market Listing
Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”). The Board Charter further
defines the matters that are reserved for the Board and its committees as well as the roles and responsibilities of
the Chairman, Group Chief Executive Officer and Group Joint Chief Executive Officer.
Steps will be taken to upload the salient features of the Board Charter on the Company’s website at www.komark.
com.my.
As set out in the Board Charter, the Board is responsible for:
•
•
•
•
•
•
•
•
•
reviewing and adopting strategic plan, monitoring corporate performance and implementation of strategies
and policies and ensuring that the strategies promote sustainability;
overseeing the conduct of the Company’s business and build sustainable value for shareholders;
reviewing the procedures to identify principal risks and ensuring the implementation of appropriate
internal controls and mitigation measures;
succession planning, including appointing, assessing, training, fixing the compensation of and where
appropriate, replacing senior management;
developing and implementing a Corporate Disclosure Policy (including an investor relations programme) for
the Group;
reviewing the adequacy and the integrity of the internal control systems and management information
systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines;
ensuring that the Company’s financial statements are true and fair and conform with the accounting
standards;
monitoring and reviewing policies and procedures relating to occupational health and safety and compliance
with relevant laws and regulations; and
Ensuring that the Company adheres to high standards of ethics and corporate behaviour.
KOM A R KCO R P B E R HAD
STATEMENT ON CORPORATE GOVERNANCE
17
(cont’d)
To assist the Board in carrying out its fiduciary duties and to enhance business and operational efficiency, the
Board of Directors delegates certain duties to its committees, namely the Audit Committee, Nomination Committee
and Remuneration Committee. Each Board Committee operates in accordance with the written terms of reference
approved by the Board. The Board receives reports of their proceedings and deliberations. The Chairman of the
various committees will report to the Board the outcome of the Committee meetings which will be recorded in the
minutes of the Board meeting. The ultimate responsibility for decision making, however, lies with the Board.
Code of Conduct
The Group Code of Conduct (‘COC’) is in place that is applicable to all its Directors and employees. The Board
noted the importance of the Code of Ethics and Conduct of the Group that emphasized the Group’s commitment
to ethical practices and compliance with the applicable laws and regulations which also governs the standards of
ethics and good conduct expected from the Directors and employees of the Group.
Sustainability
The Board recognises the importance of sustainability and its increasing significance in the business. The Board is
committed to understanding and implementing sustainable practices and to exploring the benefits to the business
whilst attempting to achieve the right balance between the needs of the wider community, the requirements of
shareholders and stakeholders and economic success.
The Company has in place a Sustainability Policy which aims to endeavour to integrate the principles of sustainability
into the Company’s strategies, policies and procedures and ensure that the Board and senior management are
involved in implementation of this policy, review the sustainability performance and create a culture of sustainability
within the Company, and the community, with an emphasis on integrating the environmental, social and governance
considerations into decision making and the delivery of outcomes.
Supply and Access to Information
The Chairman ensures that all directors have full and timely access to information. Prior to the meetings of the Board
and the Board Committees, notice of agenda together with previous minutes and other relevant information were
circulated to all directors on a timely basis in order to enable the directors to be well informed and briefed before
the meetings. All directors also have full and free access to information within the Group and can as individuals or
as a full Board seek independent professional advice, in furtherance of their duties, at the expense of the Group.
Every director also has unhindered access to the advice and services of the Company Secretaries. The Board
believes that the current Company Secretaries are capable of carrying out their duties to ensure the effective
functioning of the Board. In the event that any one of the Company Secretaries fails to fulfil her functions effectively,
the terms of the appointment permits her removal and appointment of successor which is a matter for the Board to
decide.
Company Secretaries
The Company Secretaries plays an advisory role to the Board in relation to the Company’s constitution, the
Board’s policies and procedures, and compliance with the relevant regulatory requirements, codes or guidance
and legislations. The Company Secretaries are suitably qualified, competent and capable of carrying out the duties
required and has attended training and seminars conducted by The Malaysian Institute of Chartered Secretaries
and Administrators (MAICSA) to keep abreast with the relevant updates on statutory and regulatory requirements
and updates on the MMLR of Bursa Securities, Related Party Transactions and Corporate Disclosure Guide.
The Company Secretaries also serves notice to the Directors and Principal Officers to notify them of closed periods
for trading in the Company’s shares, in accordance with Chapter 14 of the MMLR of Bursa Securities. Deliberations
during the Board and Board Committees’ meetings were properly minuted and documented by the Company
Secretaries.
B.
Strengthen composition
The Board consists of nine (9) Directors, comprising an Independent Non-Executive Chairman, five (5) Executive
Directors, one (1) Non-Independent Non-Executive Director and three (3) Independent Non-Executive Directors.
One third (1/3) of the Board comprises of Independent Non-Executive Directors, in compliance with Paragraph
15.02(1) of the MMLR of Bursa Securities.
The profile of each Directors is set out on pages 11 to 15 of this Annual Report.
ANNUA L R EPORT 2 0 1 4
STATEMENT ON CORPORATE GOVERNANCE
18
(cont’d)
Nomination Committee
The Company’s Nomination Committee (“NC”) comprised of three (3) Members, all of whom are Non-Executive
Directors, with a majority being Independent. The current NC Chairman is independent and able to contribute
effectively to the NC in view of his wide and vast experience in the industry.
During the financial year ended 30 April 2014, five (5) NC meetings were held and the attendances are as follows:
Number of
meetings
attended/held
No
Name of Committee Members
1.
Datuk Wira Jalilah Binti Baba (1)
(Chairman, Independent Non-Executive Director)
4/4
2.
Datuk Ng Peng Hong @ Ng Peng Hay (2)
(Chairman, Senior Independent Non-Executive Director)
4/5
3.
Mr Chew Chee Chek (3)
(Member, Independent Non-Executive Director)
1/3
4.
Dato’ Yeow Wah Chin (4)
(Member, Non-Independent Non-Executive Director)
1/1
5.
Encik Ihsan Bin Ismail (5)
(Member, Independent Non-Executive Director)
N/A
Notes:
(1)
Appointed as Chairman of the NC on 1 April 2013. Ceased as Chairman of NC following her resignation as
Independent Non-Executive Chairman on 30 August 2013.
(2)
Resigned as Chairman of NC and remain as member of NC on 1 April 2013. Redesignated as Chairman of NC
on 23 September 2013.
(3)
Ceased as member of NC following his resignation as Independent Non-Executive Director on 16 August 2013.
(4)
Appointed as member of the NC on 30 August 2013.
(5)
Appointed as member of the NC on 23 September 2013. There was no meeting held since his appointment as
NC member during the financial year.
The NC makes recommendations to the Board on suitable candidates for appointment as Board members, member
of Board Committees and Chief Executive Officer/Executive Director of the Company based on the following
evaluation criteria:
●
skills, knowledge, expertise and experience;
●professionalism;
●
time commitment to effectively discharge his/her role as a director;
●
contribution and performance;
●
character, integrity and competence;
●
boardroom diversity including gender diversity; and
●
in the case of candidates for the position of independent non-executive directors, the NC shall also evaluate
the candidates’ ability to discharge such responsibilities/functions as are expected from independent nonexecutive directors.
The NC will arrange for the induction of any new Directors appointed to the Board to enable them to have a full
understanding of the nature of the business, current issues within the Company and corporate strategies as well as
the structure and management of the Company.
The Board has via the NC reviewed and assessed the size of Board, required mix of skills, experience, performance
and contribution of Directors; effectiveness of the Board as a whole; independence of Independent Directors and
training courses required by the Directors, and is satisfied with the current composition and performance of the
Board.
KOM A R KCO R P B E R HAD
STATEMENT ON CORPORATE GOVERNANCE
19
(cont’d)
The Board has no specific policy on setting targets on female candidates to be appointed to the Board. The
evaluation of the suitability of candidates is based on the candidates’ competency, character, time commitment,
integrity and experience in meeting the needs of the Company. With the current composition, the Board feels
that its members have the necessary knowledge, experience, requisite range of skills and competence to enable
them to discharge their duties and responsibilities effectively. All Directors on the Board have gained extensive
experience with their many years of experience on company Boards and/or also as professionals in their respective
fields of expertise. The NC will however continue to take steps to ensure suitable female candidates are sought as
part of its recruitment exercise.
Remuneration Committee
The Remuneration Committee (“RC”) comprises five (5) Members, in which majority are Non-Executive Directors.
The RC is responsible for evaluating, deliberating and recommending to the Board the compensation and benefits
that are fairly guided by market norms and industry practices for the business the company is in. The RC is
also responsible for evaluating the Executive Directors’ remuneration which is linked to the performance of the
Executive Director and performance of the Group. Individual Directors do not participate in the decisions regarding
his or her individual remuneration.
The RC recommends the Director’s fee payable to members of the Board and are deliberated at the Board before
it is presented at the Annual General Meeting (“AGM”) for shareholders’ approval.
The Board and RC strive to ensure a fair structure of compensation for an organization of this size and market
sector and business complexity. It is also aimed at attracting and retaining Directors who have the right calibre,
skills and experience to contribute meaningfully towards the success of the business.
During the financial year ended 30 April 2014, two (2) RC meetings were held and the attendance is as follows:
Number of
meetings
attended/held
No
Name of Committee Members
1.
Datuk Wira Jalilah Binti Baba (1)
(Chairman, Independent Non-Executive Director)
1/1
2.
Datuk Ng Peng Hong @ Ng Peng Hay (2)
(Chairman, Senior Independent Non-Executive Director)
2/2
3.
Mr Chew Chee Chek (3)
(Member, Independent Non-Executive Director)
0/1
4.
Mr Koh Hong Muan @ Koh Gak Siong
(Member, Executive Director)
2/2
5.
Tan Sri Ahmad Bin Mohd Don (4)
(Member, Independent Non-Executive Director)
1/1
6.
Mr Tan Kwe Hee (4)
(Member, Executive Director)
1/1
7.
Encik Ihsan Bin Ismail (5)
(Member, Independent Non-Executive Director)
N/A
Notes:
(1)
Appointed as Chairman of the RC on 1 April 2013. Ceased as Chairman of RC following her resignation as
Independent Non-Executive Chairman on 30 August 2013.
(2)
Resigned as Chairman of RC and remain as member of RC on 1 April 2013. Redesignated as Chairman of RC
on 23 September 2013.
(3)
Ceased as member of RC following his resignation as Independent Non-Executive Director on 16 August 2013.
(4)
Appointed as members of the RC on 30 August 2013.
(5)
Appointed as member of the RC on 23 September 2013. There was no meeting held since his appointment as
RC member during the financial year.
ANNUA L R EPORT 2 0 1 4
STATEMENT ON CORPORATE GOVERNANCE
20
(cont’d)
The RC has reviewed and recommended to the Board the Directors’ fees for the Non-Executive Directors. The
Directors’ fees are subject to shareholders’ approval at the Company’s forthcoming Annual General Meeting
pursuant to the Articles of Association of the Company.
Details of remuneration of Directors of the Company for the financial year ended 30 April 2014 are as follows:
Executive Non-Executive
RM’000
RM’000
Directors’ Fees
Salaries & Bonuses
Defined Contribution Plan
Other Benefits
Total
907
1,011
20
1,938
180
180
The number of directors of the Company in each remuneration band is as follows:
Band (RM)
Below 50,000
50,001 – 100,000
150,001 - 200,000
350,001 – 400,000
950,001 – 1,000,000
Total
Executive Non-Executive
1
1
2
1
5
6
6
C.
Reinforce Independence
The Board recognises the importance of independence and objectivity in its decision making process which is in
line with the Code.
The directors with their different backgrounds and specialisation, collectively bring with them a wide range of
experience and expertise in areas such as finance, corporate affairs, marketing and operations. The executive
directors are responsible for implementing the policies and decisions of the Board, overseeing the operations
as well as co-ordinating the development and implementation of business and corporate strategies. The nonexecutive directors play key supporting roles, contributing their knowledge and experience towards formulating
policies and in the decision-making process. They do not engage in day-to-day management of the Company and
do not participate in any business dealings with the Company. The independent non-executive directors bring with
them objective and independent judgement to decision-making and provide a capable check and balance for the
executive directors.
The Board is also satisfied that its composition fairly reflects the investment of minority shareholders in the
Company.
Annual Assessment of Independence
The concept of independence adopted by the Board is in tandem with the definition of an independent director in
paragraph 1.01 of the MMLR of Bursa Securities and the Practice Note 13 issued pursuant to the MMLR. The key
element for fulfilling the criteria is the appointment of an independent director who is not a member of management
and who is free of any relationship which could interfere with the exercise of independent judgement or the ability
to act in the best interest of the Company. The Board, via NC assesses Independent Director’s independence to
ensure ongoing compliance with this requirement annually.
Any Director who considers that he has or may have a conflict of interest or a material personal interest or a direct
or indirect interest or relationship that could reasonably be considered to influence in a material way the Director’s
decisions in any matter concerning to the Company is required to immediately disclose to the Board and to abstain
from participating in any discussion or voting on the respective matter.
KOM A R KCO R P B E R HAD
STATEMENT ON CORPORATE GOVERNANCE
21
(cont’d)
For the financial year ended 30 April 2014, the Board assessed the independence of its Independent Non-Executive
Directors based on the criteria set out in the MMLR of Bursa Securities. The Board is satisfied with the level of
independence demonstrated by all the Independent Directors and their ability to act in the best interest of the
Company.
Tenure of Independent Directors
The Board is mindful of the recommendation of the Code on limiting the tenure of Independent Directors to nine
(9) years of service. In line with the Code and to enable a balance of power and authority in the Board, the Board
Charter, which has been adopted by the Company, sets out the restriction on the tenure of an Independent
Director to a cumulative term of nine (9) years. However, an Independent Director may continue to serve the
Board upon reaching the 9-year limit subject to the Independent Director’s re-designation as a Non-Independent
Non-Executive Director. In the event the Board intends to retain the Director as Independent after the latter has
served a cumulative term of nine (9) years, the Board must justify the decision and seek shareholders’ approval at
general meeting. In justifying the decision, the NC is entrusted to assess the candidate’s suitability to continue as
an Independent Non-Executive Director based on the criteria on independence.
Shareholders’ Approval for the Re-Appointment of Non-Executive Director
Following an assessment by the NC and deliberation at its meeting held in 23 September 2013, Datuk Ng Peng
Hong @ Ng Peng Hay who served as an Independent Non-Executive Director of the Company for a cumulative
term of more than 9 years as at the end of the financial year under review had been recommended by the Board
to continue to act as Independent Non-Executive Director subject to shareholders’ approval at the forthcoming
Annual General Meeting of the Company. Key justifications for his recommended continuance as an Independent
Non-Executive Director are as follows:
•
•
•
•
he fulfils the criteria under the definition on Independent Director as stated in the MMLR of Bursa Securities
and therefore is able to bring independent and objective judgment to the Board;
his experience enables him to provide the Board and AC with a pertinent set of experience, expertise, skills
and competence;
he has been with the Company long and therefore understands the Company’s business operations which
enables him to contribute actively and effectively during deliberations or discussions at AC and Board
meetings; and
he has exercised due care during his tenure as Independent Non-Executive Director of the Company and
carried out his professional duties in the interest of the Company.
Chairman and Group Chief Executive Officer
The positions of Chairman and Group Chief Executive Officer are held by different individuals. The Chairman is
responsible for the leadership, effectiveness, conduct and governance of the Board while the Group Chief Executive
Officer is an Executive Director, who manages the business and operations of the Group and implements the
Board’s decisions. The distinct and separate roles of the Chairman and Group Chief Executive Officer, with a clear
division of responsibilities, ensure a balance of power and authority, such that no one individual has unfettered
powers of decision-making.
In view of the current composition of the Board, particularly the separation of the roles of the Chairman and Group
Chief Executive Officer, and the presence of other independent directors, the Board does not consider it necessary
to nominate a Senior Independent Non-Executive Director to whom concerns of shareholders may be conveyed.
D.
Fostering commitment
Time commitment
The Board endeavours to meet at least four (4) times a year, at quarterly intervals which are scheduled well in advance
at the commencement of the financial year to help facilitate the Directors in planning their meeting schedule for the
year. Additional meetings are convened where necessary to deal with urgent and important matters that require
attention of the Board. Where appropriate, decisions are also made by way of circular resolutions in between
scheduled meetings during the financial year.
Senior management staff and/or external advisors may be invited to attend Board meetings to advise the Board
and to furnish the Board with information and clarification needed on relevant items on the agenda to enable the
Directors to arrive at a considered decision.
ANNUA L R EPORT 2 0 1 4
STATEMENT ON CORPORATE GOVERNANCE
22
(cont’d)
All Board meetings are furnished with proper agendas with due notice issued and board papers and reports are
prepared by the Management which provides updates on financial, operational, legal and circulated prior to the
meetings to all Directors with sufficient time to review them for effective discussions and decision making during
the meetings.
The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and
responsibilities which is evidenced by the satisfactory attendance record of the Directors at Board meetings. The
Board members are required to notify the Board prior to their acceptance of new directorships in other companies
with indication of time that will be spent on the new appointment.
All pertinent issues discussed at the Board meetings in arriving at the decisions and conclusions are properly
recorded by the Company Secretaries.
The Board met seven (7) times during the financial year under review. The details of Directors’ attendance are set
out as follows:
Number of Board
meetings attended/
held during the
Director’s term in
office
No
Name of Directors
1.
Tan Sri Ahmad Bin Mohd Don
(Independent Non-Executive Chairman)
- Appointed on 16 August 2013 and redesignated as Chairman on
11 September 2013
3/4
2.
Mr Koh Hong Muan @ Koh Gak Siong
(Group Chief Executive Officer/Executive Director)
- Redesignated as Group Chief Executive Officer on 27 March 2014
7/7
3.
Mr Tan Kwe Hee
(Joint Group Chief Executive Officer/Executive Director)
- Appointed on 16 August 2013 and redesignated as Joint Chief Executive Officer
on 30 August 2013 and as Joint Group Chief Executive Officer on 27 March 2014
4/4
4.
Mr Lim Pei Tiam @ Liam Ahat Kiat
(Executive Director)
- Appointed on 16 August 2013
3/4
5.
Mr Koh Chie Jooi
(Executive Director)
- Redesignated from Managing Director to Executive Director on 27 March 2014
7/7
6.
Mr Koh Chee Mian
(Executive Director)
- Redesignated from Deputy Managing Director to Executive Director on 27 March
2014
7/7
7.
Datuk Ng Peng Hong @ Ng Peng Hay
(Senior Independent Non-Executive Director)
- Identified as Senior Independent Non-Executive Director on 27 March 2014
6/7
8.
Dato’ Yeow Wah Chin
(Non-Independent Non-Executive Director)
- Appointed on 16 August 2013
3/4
9.
Encik Ihsan bin Ismail
(Independent Non-Executive Director)
- Resigned on 16 August 2013 and re-appointed on 23 September 2013
2/2
10.
Datuk Wira Jalilah Binti Baba
(Independent Non-Executive Chairman)
- Appointed on 1 April 2013 and resigned on 30 August 2013
4/4
KOM A R KCO R P B E R HAD
STATEMENT ON CORPORATE GOVERNANCE
23
(cont’d)
Number of Board
meetings attended/
held during the
Director’s term in
office
No
Name of Directors
11.
Mr Chew Chee Chek
(Independent Non-Executive Director)
- Resigned on 16 August 2013
1/3
12.
Mr Koh Chee Kian
(Executive Director)
- Resigned on 16 August 2013
2/3
13.
Mr Koh Chee Hao
(Executive Director)
- Resigned on 16 August 2013
2/3
Directors’ Training
All Directors have completed the Mandatory Accreditation Program as prescribed by Bursa Securities. The Board
fully supports the need for its members to further enhance their skills and knowledge on relevant new laws and
regulations and changing commercial risks to keep abreast with the developments in the economy, industry,
technology and the changing business environment within which the Group operates. Throughout their period in
office, the Directors are continually updated on the Group’s business and the regulatory requirements.
The Group acknowledges the fact that continuous education is vital for the Board members to gain insight into the
state of economy, technological advances in our core business, latest regulatory developments and management
strategies. Therefore, the Directors are encouraged to evaluate their own training needs on a continuous process
and to determine the relevant programmes, seminars and briefings that would enhance their knowledge to enable
the Directors to discharge their responsibilities more effectively.
For the financial year ended 30 April 2014, the trainings attended by the Directors are as follows:Director
Course Title
Tan Sri Ahmad
Bin Mohd Don
Directors Training : ‘Economic and Capital Market Review’ organised by MAA Group
Berhad on 14 May 2013.
Sunway Managers Conference 2013 – Leading with Passion, Living it out by Sunway
Group on 23 November 2013.
Koh Hong Muan
@ Koh Gak Siong
Seminar on Governance and Enterprise Risk Management organised by Malaysian
Investor Relations Association and Boardroom Corporate Service Sendirian Berhad on
17 September 2013.
Tan Kwe Hee
Seminar on Enterprise Risk Management – What it is and implications to Boards and
Management of listed issuer organised by KPMG on 23 October 2013.
Seminar on Enhanced Understanding of Risk Management and Internal Control for
CFOs, Internal Auditors and Risk Officers organised by Bursa Malaysia Berhad on 26
November 2013.
Koh Chie Jooi
Seminar on Governance and Enterprise Risk Management organised by Malaysian
Investor Relations Association and Boardroom Corporate Service Sendirian Berhad on
17 September 2013.
Seminar on Cost Accounting Techniques for Cost Monitoring and Control organised by
Malaysian Institute of Accountants on 19 & 20 February 2014.
Datuk Ng Peng Hong One day training on Competition Law Compliance “Understaing Competition Law and
@ Ng Peng Hay
Its Implication On Business” organised by First Competition Consulting on 5 September
2013.
“Manufacturing Process of Rubber Hose” organised by Wellcall Holdings Berhad on 25
November 2013.
ANNUA L R EPORT 2 0 1 4
STATEMENT ON CORPORATE GOVERNANCE
24
(cont’d)
In addition, the Company Secretaries circulated the relevant guidelines on regulatory requirements from time to
time for the Board’s reference and briefed the Board quarterly on these updates at the Board Meetings.
E.
Uphold integrity in financial reporting
Financial Reporting
The Board upholds integrity in financial reporting by ensuring that shareholders are provided with reliable
information of the Company’s financial performance, its position and future prospects, in the Annual Audited
Financial Statements and quarterly financial reports.
The Audit Committee (“AC”) is entrusted with the responsibility of assisting the Board in meeting its responsibilities
relating to accounting and reporting practices of the Company and its subsidiary companies. One of the key
responsibilities of the AC is to ensure that the financial statements of the Group and Company comply with
applicable financial reporting standards in Malaysia. Such financial statements comprise the quarterly financial
report announced to Bursa Securities and the annual statutory financial statements. In addition, the AC shall:(a)
Oversee and appraise the quality of the audits conducted both by the Company’s internal and external
auditors;
(b)
Maintain open lines of communication between the Board of Directors, the internal auditors and external
auditors for the exchange of views and information, as well as to confirm their respective authority and
responsibilities; and
(c)
Determine the adequacy of the Group’s administrative, operating and accounting controls.
The AC comprises of four (4) members of whom all are Non-Executive Directors with majority Independent NonExecutive Directors. The composition of the AC, including its roles and responsibilities are set out on pages 29 to
32 under AC Report of this Annual Report.
The composition of the AC is as follows:
1.
2.
3.
4.
5.
6.
Tan Sri Ahmad Bin Mohd Don (Member, Independent Non-Executive Director; appointed as Chairman of the
AC on 30 August 2013 and redesignated as member of the AC on 23 September 2013).
Datuk Ng Peng Hong @ Ng Peng Hay (Chairman, Independent Non-Executive Director, redesignated from
Chairman to member of the AC on 30 August 2013 and subsequently redesignated as Chairman of the AC
on 23 September 2013).
Encik Ihsan bin Ismail (Member, Independent Non-Executive Director; ceased as member of the AC following
his resignation as Independent Non-Executive Director on 16 August 2013 and subsequently appointed as
member of the AC on 23 September 2013).
Datuk Wira Jalilah Binti Baba (Member, Independent Non-Executive Director, appointed as member of the
AC on 1 April 2013 and ceased as member of the AC following her resignation as Independent Non-Executive
Chairman on 30 August 2013).
Chew Chee Chek (Member, Independent Non-Executive Director, ceased as member of the AC following his
resignation as Independent Non-Executive Director on 16 August 2013).
Dato’ Yeow Wah Chin (Member, Non-Independent Non-Executive Director, appointed as member of the AC
on 23 September 2013).
Suitability and Independence of Internal and External Auditors
To ensure independence, the AC members have met with the External Auditors without the presence of the
Management during the financial year to discuss issues arising from any audit exercises or other matters, which
the External Auditors may wish to raise. The External Auditors have also confirmed that they are, and have been,
independent throughout the conduct of the audit engagement in accordance with the independence criteria set out
by the Malaysian Institute of Accountants.
The Board has outsourced the independent internal audit function to MAC & Associates that reports directly to the
AC. The key activities covered by the internal audit function during the financial year under review is provided in the
AC Report of the Company as set out on pages 29 to 32 of this Annual Report.
KOM A R KCO R P B E R HAD
STATEMENT ON CORPORATE GOVERNANCE
25
(cont’d)
F.
Recognise and manage risks
The Company has in place an on-going process for identifying, evaluating and managing significant risks that may
affect the achievement of the business objectives of the Group. Reviews on the key risks identified were conducted
to ensure proper management of risks and that measures are taken to mitigate any weaknesses in the control
environment.
The Board has mandated the AC with the overall responsibility of ensuring adequacy, completeness and
effectiveness of the internal control system. The AC undertakes periodic reviews and monitors the compliance to
these systems via the Internal Audit Function who carries out audit checks on such control processes and provides
feedback on its effectiveness and compliance at the operating level. Any weaknesses or variances reported by
the Internal Auditor to the AC will be turned into management actions to rectify any weaknesses in those control
processes.
The outsourced Internal Auditor acts as a unit independent of management to carry out the audit of management
processes and business transactions of the operating units and reports its findings back to the AC. This independent
mechanism provides independent feedback of the accountability, adequacy and effectiveness of the system of
internal controls in place, giving the assurance that the Board needs to fulfill its responsibility.
The key activities covered by the internal audit function during the financial year under review is provided in the AC
Report of the Company as set out on pages 29 to 32 of this Annual Report.
G.
Timely and high quality disclosure
The Board is aware of the need to establish corporate disclosure policies and procedures to enable comprehensive,
accurate and timely disclosures relating to the Group to the regulators, shareholders and stakeholders. Steps
will be taken to formalise pertinent corporate disclosure policies to comply with the disclosure requirements as
stipulated in the MMLR of Bursa Securities, and to set out the persons authorised and responsible to approve and
disclose material information to shareholders and stakeholders.
To augment the process of disclosure, the Board has established a dedicated section for corporate information
on the Company’s website where information on the Company’s announcements, financial information and the
Company’s Annual Report may be accessed.
H.
Strengthen relationship between company and shareholders
The Company aims to ensure that the shareholders and investors are kept informed of all major corporate
developments, financial performance and other relevant information by promptly disseminating such information to
shareholders and investors via announcements to Bursa Securities, which is in line with Bursa Securities’ objectives
of ensuring transparency and good corporate governance practices, through dialogue with analysts and the media.
The AGM is the principal forum for dialogue with the shareholders. Shareholders are notified of the meeting and
provided with a copy of the Company’s Annual Report before the meeting. All shareholders are encouraged to
attend the Annual General Meeting and participate in its proceedings. Every opportunity is given to the shareholders
to ask questions and seek clarification on the business and performance of the Group.
The AC is available at the AGM to answer questions and consider suggestions. The External Auditors are also
present to provide their professional and independent clarification on issues of concern raised by the shareholders,
if any.
The annual report and the quarterly announcements are the primary mode of communications to report on the
Group’s business activities and financial performance to all shareholders.
The Company also maintains an effective communication channel between the Board, shareholders and the general
public through timely dissemination of all material information.
Minority shareholders may communicate with the Company through the Company’s website (www.komark.com.
my).
ANNUA L R EPORT 2 0 1 4
STATEMENT ON CORPORATE GOVERNANCE
26
(cont’d)
The Notice of AGM will be circulated at least twenty-one (21) days before the date of the meeting to enable
shareholders sufficient time to peruse the Annual Report and papers supporting the resolutions proposed. The
Board encourages participation at general meetings and will generally carry out resolutions by show of hand,
except for Related Party Transaction if any (wherein poll will be conducted) and unless otherwise demanded by
shareholders in accordance with the Articles of Association of the Company. The Chairman of the Board will inform
the shareholders of their right to demand a poll vote at the commencement of the general meeting.
While the Company endeavours to provide as much information as possible to its shareholders and stakeholders,
the Company is mindful of the legal and regulatory framework governing the release of material and price sensitive
information.
Directors’ Responsibility Statement in Respect of the Preparation of the Audited Financial Statements
The Board is responsible for ensuring that the financial statements of the Group give a true and fair view of the state
of affairs of the Group and of the Company as at the accounting period and of their profit or loss and cashflow for
the period then ended. In preparing the financial statements, the Directors have ensured that applicable approved
accounting standards in Malaysia and the provisions of the Companies Act, 1965 have been applied.
In preparing the financial statements, the Directors have applied consistently suitable accounting policies and
made reasonable and prudent judgements and estimates.
The Directors also have a general responsibility for taking such steps as are reasonably available to them to
safeguard the assets of the Group and to prevent fraud and other irregularities.
KOM A R KCO R P B E R HAD
STATEMENT ON RISK MANAGEMENT
AND INTERNAL CONTROL
27
The Board of Directors is ultimately responsible for the Group’s risk management and internal controls system and review
its effectiveness during the year pursuant to paragraph 15.26 (b) of the Bursa Securities Main Market Listing Requirements
(“MMLR”). The risk management and internal controls system is primarily designed to cater for the business needs and
manage the potential business risks of the Group.
The Board has overall responsibility to establish a sound risk management and internal controls system to safeguard
shareholders’ investments and the Group’s assets. The Board further affirms to embed risk management in all aspects
of the Group’s activities and review the adequacy and integrity of these systems in mitigating risks within the Group’s
acceptable risk appetite.
In view of the limitations that are inherent in any systems of risk management and internal control, such systems are
designed to manage rather than eliminate the risk of failure to achieve its’ business objectives. Accordingly, these systems
can provide only reasonable and not absolute assurance against material misstatement, frauds or loss. The concept of
reasonable assurance also recognizes that the cost of control procedures should not exceed the expected benefits.
There are always opportunities to further improve the current risk management and internal control systems of the Group.
A program of actions to enhance the risk management and internal control systems was undertaken in line with corporate
governance compliance. The Company has also outsourced the internal audit function of the Group to a professional firm,
who reports directly to the Audit Committee on its findings and recommendations for improvement.
The Internal Auditor’s main role is to independently assess the adequacy and integrity of such system of risk management
and internal control established by the Management based on the audit plan approved by the Audit Committee and to
make appropriate recommendations for Management’s implementation. In financial year ended 30 April 2014, the total
cost incurred for the internal audit function was RM12,090.50.
In addition, a Risk Management Committee which comprises of Executive Directors and Senior Management of the
Group has also been set up.
In seeking to achieve the objectives of the risk management and internal control systems, the following key elements will
be considered:
Control Environment and Activities
It is imperative that the Group should operate on a sound system of internal control. In general, the overall line of
communications across the business should be defined and there is an appropriate integrity in risk management.
There is also a limit on authority that clearly defines authorisation limits to ensure proper identification of accountabilities
and segregation of duties. Operation control procedures have been established according to ISO 9001 standard. This will
ensure that the business process flow is accordingly and properly executed.
Risk Management
The Board recognises that the management of principal risks plays an important and integral part of the Group’s daily
operations and that the identification and the management of such risk will affect the achievement of the Group’s
corporate objectives.
As an ongoing process, business issues faced by the Group are identified and evaluated and consideration is given on the
potential impact of achieving the business objectives. This includes examining business issues in critical areas, assessing
the likelihood of material exposures and identifying the measures taken to mitigate the risks arising from these issues.
ANNUA L R EPORT 2 0 1 4
STATEMENT ON RISK MANAGEMENT
AND INTERNAL CONTROL
28
(cont’d)
Key Internal Control Processes
The following are the key processes that have been established as part of the Group’s internal control effort:
(a)
(b)
(c)
(d)
(e)
(f)
A clearly defined organisation and hierarchical structure outlining line of reporting and job responsibilities with
strong risk control culture at the operational level.
In ensuring that each operating unit is functioning efficiently, emphasis is placed on personnel employed where the
integrity and competence of personnel are ensured through recruitment evaluation process.
Financial reports are supplied to the Audit Committee and the Board on a quarterly basis for review and if necessary
correction action to be taken.
The Board, Audit Committee and Management meet regularly to review the internal audit reports and monitor the
status of the implementation of recommendations to address internal control weakness noted.
Regular reporting made to the Board by the Management of corporate, legal, accounting and environmental
developments.
Regular training and development programs attended by employees with the objective of enhancing their knowledge
and competency.
Conclusion
In reviewing the risk management and internal control system of the Group, the Board has, through the Audit Committee,
received reports from Internal Auditors and Risk Management Committee in relation to findings on risk and internal
audit control system. The Board has also received assurance from the Group Chief Executive Officer, Joint Group Chief
Executive Officer and Group Financial Controller that the Group’s risk management and internal control system are
operating adequately and effectively in all material aspects, based on the risk management and internal control system
of the Group.
KOM A R KCO R P B E R HAD
AUDIT COMMITTEE REPORT
29
COMPOSITION
Datuk Ng Peng Hong @ Ng Peng Hay
Tan Sri Ahmad Bin Mohd Don
Dato’ Yeow Wah Chin
Ihsan bin Ismail
Chairman/Senior Independent Non-Executive Director
Independent Non-Executive Director
Non-Independent Non-Executive Director
Independent Non-Executive Director
TERMS OF REFERENCE
1.OBJECTIVE
The objective of the Audit Committee is to assist the Board of Directors in meeting its responsibilities relating to
accounting and reporting practices of the Company and its subsidiary companies.
In addition, the Audit Committee shall:a)
Oversee and appraise the quality of the audits conducted both by the Company’s internal and external
auditors;
b)
Maintain open lines of communication between the Board of Directors, the internal auditors and the external
auditors for the exchange of views and information, as well as to confirm their respective authority and
responsibilities; and
c)
Determine the adequacy of the Group’s system of risk management and internal controls including
administrative, operating and accounting controls.
2.COMPOSITION
The Audit Committee shall be appointed by the Directors from among their number (pursuant to a resolution of the
Board of Directors) which fulfils the following requirements:a)
the audit committee must be composed of no fewer than three (3) members;
b)
a majority of the audit committee must be independent directors;
c)
all members of the Audit Committee must be non-executive directors;
d)
all members of the Audit Committee should be financially literate and at least one member of the audit
committee:i)
must be a member of the Malaysian Institute of Accountants; or
ii)
if he is not a member of the Malaysian Institute of Accountants, he must have at least thee (3) years’
working experience and:●
●
iii)
e)
he must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants
Act, 1967; or
he must be a member of one of the associations of accountants specified in Part II of the 1st
Schedule of the Accountants Act, 1967; or
fulfils the requirements as may be prescribed or approved by Bursa Malaysia Securities Berhad
(“Bursa Securities”) and/or other relevant authorities from time to time; and
no alternate Director shall be appointed as a member of Audit Committee.
The members of the Audit Committee shall elect a chairman from among their number who shall be an independent
director.
In the event of any vacancy in the Audit Committee resulting in the non-compliance of item 2 (a) to (d) above, the
vacancy must be filled within 3 months of that event.
ANNUA L R EPORT 2 0 1 4
AUDIT COMMITTEE REPORT
30
(cont’d)
The Board of Directors must review the term of office and performance of the Audit Committee and each of its
members at least once every 3 years to determine whether the Audit Committee and members have carried out
their duties in accordance with the terms of reference.
3.FUNCTIONS
The functions of the Audit Committee are as follows:a)
review the following and report the same to the Board of Directors:i)
with the external auditors, the audit plan;
ii)
with the external auditors, their evaluation of the system of internal controls;
iii)
with the external auditors, their audit report;
iv)
the assistance given by the Company’s employees to the external auditors; and
v)
any related party transaction and conflict of interest situation that may arise within the Company or
group including any transaction, procedure or course of conduct that raises questions of management
integrity.
b)
To consider the appointment of the external auditors, the audit fee and any questions of resignation or
dismissal and the letter of resignation from the external auditors, if applicable;
c)
To discuss with the external auditors before the audit commences, the nature and scope of the audit, and
ensure co-ordination where more than one audit firm is involved;
d)
To review the quarterly and year-end financial statements of the Company, focusing particularly on:●
●
●
●
Any changes in accounting policies and practices;
Significant adjustments arising from the audit;
The going concern assumption;
Compliance with accounting standards and other legal requirements;
f)
To discuss problems and reservations arising from the interim and final audits, and any matters the auditor
may wish to discuss (in the absence of management where necessary);
g)
To discuss the contracts for the provision of non-audit services which can be entered into and procedures
that must be followed by the external auditors. The contracts that cannot be entered into should include
management consulting, policy and standard operating procedures documentation, strategic decision and
internal audit.
h)
To review the adequacy and effectiveness of risk management, internal control and governance systems put
in place in the Group, including information technology security and control, and to evaluate the systems
with the internal and external auditors.
i)
To review the external auditors’ management letter and management’s response;
j)
To do the following in relation to the internal audit function:●
●
●
●
●
●
Ensure the internal audit function is independent of the activities it audits and the head of internal
audit reports directly to the Audit Committee. The head of internal audit will be responsible for the
regular review and/or appraisal of the effectiveness of the risk management, internal control and
governance processes within the Company and provide assurance to the Audit Committee that the
internal controls are operating effectively;
Review the adequacy of the scope, functions, competency and resources of the internal audit function,
and that it has the necessary authority to carry out its work;
Review the internal audit programme and results of the internal audit process and where necessary,
ensure that appropriate action is taken on the recommendations of the internal audit function;
Review any appraisal or assessment of the performance of members of the internal audit function;
Approve any appointments or termination of senior staff members of the internal audit function;
Take cognisance of resignations of internal audit staff members (for in-house internal audit function)
or the internal audit service provider (for out-sourced internal audit function) and provide the resigning
staff member or the internal audit service provider an opportunity to submit his reasons for resigning.
KOM A R KCO R P B E R HAD
AUDIT COMMITTEE REPORT
31
(cont’d)
k)
To consider any related party transaction that may arise within the Company and Group;
l)
To consider the major findings of internal investigations and management’s response;
m)
To consider other areas as defined by the Board, or as may be prescribed by Bursa Securities or any other
relevant authority from time to time; and
n)
To perform any other functions/responsibilities as may be required of them by Bursa Securities or such other
relevant authorities from time to time.
4.
RIGHTS OF THE AUDIT COMMITTEE
The Audit Committee shall, wherever necessary and reasonable for the Company to the performance of its duties,
in accordance with a procedure to be determined by the Board of Directors and at the cost of the Company:-
a)
have authority to investigate any matter within its terms of reference;
b)
have the resources which are required to perform its duties;
c)
have full and unrestricted access to any information pertaining to the Company;
d)
have direct communication channels with the external auditors and person(s) carrying out the internal audit
function or activity;
e)
be able to obtain independent professional or other advice; and
f)
be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance
of other directors and employees of the Company, whenever deemed necessary.
The Chairman of the Audit Committee shall engage on a continuous basis with senior management, such as the
chairman, the chief executive officer, the finance director, the head of internal audit and the external auditors in
order to be kept informed of matters affecting the Company.
5.MEETINGS
The Audit Committee shall meet at least four (4) times a year and such additional meetings as the Chairman shall
decide in order to fulfil its duties. However, at least twice a year the Audit Committee shall meet with the external
auditors without the presence of executive Board members.
In addition, the Chairman may call a meeting of the Audit Committee if a request is made by any committee
member, the Company’s Chief Executive, or the internal or external auditors.
The Company Secretary or other appropriate senior official shall act as secretary of the Audit Committee and
shall be responsible, in conjunction with the Chairman, for drawing up the agenda and circulating it, supported by
explanatory documentation to committee members prior to each meeting.
The Secretary shall also be responsible for keeping the minutes of meetings of the Audit Committee, and circulating
them to committee members and to the other members of the Board of Directors.
A quorum shall consist of a majority of independent directors.
By invitation of the Audit Committee, the Company must ensure that other directors and employees attend any
particular audit committee meeting specific to the relevant meeting.
ANNUA L R EPORT 2 0 1 4
AUDIT COMMITTEE REPORT
32
(cont’d)
DETAILS OF ATTENDANCE AT AUDIT COMMITTEE MEETINGS DURING THE FINANCIAL YEAR ENDED
30 APRIL 2014
Number of Audit Committee Meetings held for the financial year: Six (6)
Attendance of the Audit Committee members are shown below:Name of Audit Committee member
Number of meetings attended/held
Datuk Ng Peng Hong @ Ng Peng Hay (1)
6/6
Tan Sri Ahmad Bin Mohd Don
3/4
(2)
Dato’ Yeow Wah Chin (3)
3/3
Ihsan bin Ismail
3/3
(4)
Notes:
Redesignated from Chairman to member of the AC on 30 August 2013 and reappointed as Chairman of the AC on 23
September 2013.
(2)
Appointed as Chairman of the AC on 30 August 2013 and Redesignated from Chairman to member of the AC on 23
September 2013.
(3)
Appointed as member of the AC on 23 September 2013.
(4)
Reappointed as member of the AC on 23 September 2013 following his reappointment of Independent Non-Executive
Director on the same day.
(1)
HIGHLIGHTS OF ACTIVITIES
During the financial year, the activities of the Audit Committee included:1.
Review of the quarterly financial results prior to the release of the announcements to Bursa Securities.
2.
Assessment of the external auditors’ findings in relation to audit and accounting issues arising from the audit of the
Group’s financial statements and updates on the changes in the reporting of financial statements.
3.
Discussion of audit strategy and plan with the internal and external auditors.
4.
Examined findings made by the internal auditors and management’s response.
INTERNAL AUDIT FUNCTION AND SUMMARY OF ACTIVITIES
The internal audit function of the Company has been outsourced to an independent professional firm, which assists the
Audit Committee in discharging its duties and responsibilities. They act independently and with due professional care
and report directly to the Audit Committee.
During the financial year ended 30 April 2014, the Internal Auditors had carried out the following internal audit review:• Inventory management function of Pt Komark Labels & Labelling Indonesia
• Inventory management function of General Labels & Labelling (M) Sdn Bhd and Komark International (M) Sdn Bhd
The professional fees incurred for the internal audit function in respect of financial year ended 30 April 2014 amounted to
approximately RM12,090.50.
KOM A R KCO R P B E R HAD
OTHER INFORMATION
33
In compliance with the Bursa Malaysia Securities Berhad’s Main Market Listing Requirements, the following additional
information is provided:
1.
Share Buy-Back
There was no share buy-back during the financial year ended 30 April 2014.
2.
Depository Receipt Programme
During the financial year, the Company did not sponsor depository receipt programme.
3.
Imposition of Sanctions and/or Penalties
There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management
by the relevant regulatory bodies.
4.
Non-Audit Fees
The amount of non-audit fee paid or payable to external auditors and their affiliated company for the financial year
ended 30 April 2014 are as follows:RM
16,234
O & W Tax Consultants Sdn. Bhd.
5.
Profit Estimate, Forecast or Projection
There was no material variance between the results of the financial year and the unaudited results previously
announced.
The Company did not release any profit estimates, forecast or projections for the financial year.
6.
Profit Guarantees
During the financial year, there were no profit guarantees given or received by the Company.
7.
Material Contracts
During the financial year, there were no material contracts of the Company and its subsidiaries involving Directors’
and major shareholders’ interest.
8.
Contracts Relating to Loans
There were no material contracts relating to loans by the Company involving Directors and major shareholders.
9.
Utilisation of Proceeds
The Company did not implement any fund raising exercise during the financial year.
10.
Options or Convertible Securities
There were no options or convertible securities issued by the Company during the financial year under review.
ANNUA L R EPORT 2 0 1 4
OTHER INFORMATION
34
(cont’d)
11.
Revaluation Policy
During the financial year, the Company and its subsidiaries have revalued it’s landed properties during the financial
year ended 2014. The details of revaluation are as below:-
Brief Description of
No. Properties
Valuer
Value placed
by valuer and Revaluation
adopted by
Surplus /
Directors
(Deficit)
(RM ‘000)
RM ‘000)
1.
GM No.439, Lot 132,
Mukim of Kajang District,
Hulu Langat, Selangor
Knight Frank
Malaysia Sdn
Bhd
14-Feb-14
20,623
32,000
11,377
2.
H.S (D) KA 39335
P.T.NO 131760/23
Hala Rapat Baru 22,
Kawasan Perindustrian
Ringan Kinta Jaya, Perak
Khong & Jaafar
Sdn Bhd
16-May-14
173
350
177
3.
Lot PTD 112290,
Mukim of Plentong District
Johor Bahru.
Khong & Jaafar
Sdn Bhd
16-May-14
623
1,100
477
21,419
33,450
12,031
TOTAL
12.
Date of
Valuation
Report
Unaudited Net
Book Value as
at 30 April 2014
(RM ‘000)
Disclosure of Recurrent Related Party Transactions
The details of the Recurrent Related Party Transactions of a revenue and trading nature carried out by the Group
during the financial year ended 30 April 2014 are as follows:
Nature of
transaction
Sale of labels and
related products
to Komark
Enterprise Co.
Ltd (“Komark
Enterprise”)
KOM A R KCO R P B E R HAD
Company
General Labels
& Labelling (M)
Sdn Bhd, Komark
International Sdn
Bhd (“KISB”)
Transacting
Parties
Komark
Enterprise (a
49%-owned
associated
company of
KISB)
Nature of relationship
Koh Hong Muan @ Koh Gak Siong,
a Director and Major Shareholder of
Komarkcorp is also a director and
shareholder of Komark Enterprise and
a shareholder and director of Aimas
Enterprise. Aimas Enterprise is a Major
Shareholder of Komark Enterprise via
Komarkcorp. Koh Chie Jooi who is
a Director of Komarkcorp, is also a
shareholder of Komark Enterprise and
a director and shareholder of Aimas
Enterprise and person connected to
Koh Hong Muan @ Koh Gak Siong.
Koh Chee Mian who is a Director and
shareholder of Komarkcorp, is also
a director and shareholder of Aimas
Enterprise and person connected to
Koh Hong Muan @ Koh Gak Siong.
Apart from the above, Koh Chee Mian
and Aimas Enterprise have no direct
shareholdings in Komark Enterprise
other than via Komarkcorp. Koh Hong
Muan @ Koh Gak Siong and Koh Chie
Jooi had disposed their shares on 25
August 2014 and their directorship was
also ceased on the same day.
Amount
transacted
during the
financial year
(RM’000)
403
35
FINANCIAL
STATEMENTS
Directors’ Report 36
Statement by Directors 40
Statutory Declaration 40
Independent Auditors’ Report 41
Statements of Financial Position 43
Statements of Profit or Loss and Other
Comprehensive Income
44
Consolidated Statement of Changes in Equity 45
Statement of Changes in Equity 46
Statements of Cash Flows 47
Notes to the Financial Statements 49
ANNUA L R EPORT 2 0 1 4
DIRECTORS’ REPORT
36
for the year ended 30 April 2014
The directors present their report and the audited financial statements of the Group and of the Company for the financial
year ended 30 April 2014.
PRINCIPAL ACTIVITIES
The Company is principally engaged in investment holding and provision of management services to its subsidiaries. The
principal activities of the subsidiaries are as set out in Note 6 to the financial statements. There have been no significant
changes in these activities during the financial year.
RESULTS
Group
RM’000
Company
RM’000
(Loss)/profit before taxation
Taxation
(28,704)
(205)
1,169
-
(Loss)/profit for the year
(28,909)
1,169
DIVIDEND
Since the end of the previous financial year, the Company paid a first and final single-tier dividend of 0.50 sen per ordinary
shares of RM1 each totalling to RM406,367 in respect of the financial year ended 30 April 2013 on 13 December 2013.
The directors do not recommend any dividend payment in respect of the financial year ended 30 April 2014.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year.
ISSUE OF SHARES
During the financial year, there was no issue of shares.
TREASURY SHARES
During the financial year, the Company repurchased 1,000 ordinary shares from the open market at an average price of
approximately RM0.66 per share. The total consideration paid for the repurchase including transaction costs was RM656
and this was financed by internally generated funds.
SHARE OPTION
During the financial year, the Company did not grant any option to any person to take up the unissued shares of the
Company.
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
Details of significant events during the financial year are disclosed in Note 33 to the financial statements.
EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE
Details of events subsequent to the balance sheet date are disclosed in Note 34 to the financial statements.
KOM A R KCO R P B E R HAD
DIRECTORS’ REPORT
37
for the year ended 30 April 2014 (cont’d)
DIRECTORS
The directors who served since the date of the last report are:
Koh Hong Muan @ Koh Gak Siong
Datuk Ng Peng Hong @ Ng Peng Hay
Koh Chie Jooi
Koh Chee Mian
Ihsan Bin Ismail (appointed on 23.9.13)
Tan Sri Ahmad Bin Mohd Don
Tan Kwe Hee
Lim Pei Tiam @ Liam Ahat Kiat
Dato’ Yeow Wah Chin
DIRECTORS’ INTERESTS IN SHARES
According to the Register of Directors’ Shareholdings, the interests of directors in office at the end of the financial year in
shares in the Company during the financial year were as follows:
Number of ordinary shares of RM1 each
Balance at
Balance at
1.5.2013
Bought
Sold
30.4.2014
(Direct Interest)
Koh Hong Muan @ Koh Gak Siong
Koh Chee Mian
Lim Pei Tiam @ Liam Ahat Kiat
Tan Kwe Hee
Dato’ Yeow Wah Chin
6,010,300
206,100
9,938,800^
4,747,000^
520,000^
509,600
20,000
-
-
6,519,900
206,100
9,938,800
4,767,000
520,000
(Indirect Interest)
Koh Hong Muan @ Koh Gak Siong
Koh Chie Jooi
Koh Chee Mian
Tan Kwe Hee
10,906,889#
16,917,189*
16,917,189*
1,200,000*^
509,600
509,600
-
-
10,906,889#
17,426,789*
17,426,789*
1,200,000*
^ Shares held on date of appointment as director on 16 August 2013.
# Deemed interested in shares held by an affiliated company, Aimas Enterprise Sdn. Bhd., a company incorporated in
Malaysia, by virtue of Section 6A(4)(c) of the Companies Act, 1965.
* Deemed interested in the shares held by persons connected under Section 122A(1)(a) of the Companies Act, 1965.
By virtue of their interests in the shares of the Company, Koh Hong Muan @ Koh Gak Siong, Koh Chie Jooi, Koh Chee
Mian, Lim Pei Tiam @ Liam Ahat Kiat, Tan Kwe Hee and Dato’ Yeow Wah Chin are also deemed to have an interest in the
shares of all the subsidiaries of the Company to the extent the Company has an interest.
Other than as disclosed above, none of the other directors in office at the end of the financial year had any interest in the
shares of the Company or its related companies during the financial year.
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other
than a benefit included in the aggregate amount of emoluments received or due and receivable by the directors shown in
the financial statements or the fixed salary of a full-time employee of the Company) by reason of a contract made by the
Company or a related corporation with any director or with a firm of which the director is a member or with a company in
which the director has a substantial financial interest except as disclosed in Note 22 to the financial statements.
ANNUA L R EPORT 2 0 1 4
DIRECTORS’ REPORT
38
for the year ended 30 April 2014 (cont’d)
DIRECTORS’ BENEFITS (cont’d)
Neither during nor at the end of the financial year was the Company a party to any arrangements which object was to
enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any
other body corporate.
REMUNERATION COMMITTEE
The members of the Remuneration Committee who have served since the date of the last report are:
Datuk Ng Peng Hong @ Ng Peng Hay
Koh Hong Muan @ Koh Gak Siong
Tan Sri Ahmad Bin Mohd Don (appointed on 30.8.13)
Tan Kwe Hee (appointed on 30.8.13)
OTHER STATUTORY INFORMATION
Before the Statements of Profit or Loss and Other Comprehensive Income and Statements of Financial Position of the
Group and of the Company were made out, the directors took reasonable steps:
i)
to ascertain that proper action had been taken in relation to the writing off of bad debts and, the making of
allowance for doubtful debts, and have satisfied themselves that all known bad debts had been written off and
adequate allowance had been made for doubtful debts; and
ii)
to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business
had been written down to an amount which they might be expected so to realise.
At the date of this report, the directors are not aware of any circumstances:
i)
which would render the amount written off for bad debts or the amount of allowance for doubtful debts in the
financial statements of the Group and of the Company inadequate to any substantial extent;
ii)
which would render the value attributed to the current assets in the financial statements of the Group and of the
Company misleading;
iii)
which have arisen which render adherence to the existing methods of valuation of assets or liabilities in the financial
statements of the Group and of the Company misleading or inappropriate; and
iv)
not otherwise dealt with in this report or in the financial statements of the Group and of the Company, that would
render any amount stated in the respective financial statements misleading.
At the date of this report, there does not exist:
i)
any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which
secures the liabilities of any other person; or
ii)
any contingent liability in respect of the Group and of the Company that has arisen since the end of the financial
year.
No contingent liability or other liabilities of the Group and of the Company has become enforceable, or is likely to become
enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will
or may substantially affect the ability of the Group and of the Company to meet its obligations as and when they fall due.
KOM A R KCO R P B E R HAD
DIRECTORS’ REPORT
39
for the year ended 30 April 2014 (cont’d)
OTHER STATUTORY INFORMATION (cont’d)
In the opinion of the directors:
i)
the results of the operations of the Group and of the Company for the financial year have not been substantially
affected by any item, transaction or event of a material and unusual nature; and
ii)
no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the
financial year and the date of this report which is likely to affect substantially the results of the operations of the
Group and of the Company for the financial year in which this report is made.
AUDITORS
The Auditors, ONG & WONG, have indicated their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the directors.
KOH HONG MUAN @ KOH GAK SIONG TAN KWE HEE
DirectorDirector
Dated: 28 August 2014
Kuala Lumpur
ANNUA L R EPORT 2 0 1 4
STATEMENT BY DIRECTORS
40
(Pursuant to Section 169[15] of the Companies Act, 1965)
We, KOH HONG MUAN @ KOH GAK SIONG and TAN KWE HEE, being two of the directors of KOMARKCORP BERHAD,
state that, in the opinion of the directors, the financial statements set out on pages 43 to 97 are drawn up in accordance
with Malaysian Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view
of the state of affairs of the Group and of the Company as at 30 April 2014 and of the results and cash flows of the Group
and of the Company for the financial year ended on that date.
Further to the Statement by directors pursuant to Section 169(15) of the Companies Act, 1965, the information set out
in Note 17 to the financial statements have been prepared in accordance with the Guidance on Special Matter No.1,
Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia
Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants.
Signed on behalf of the Board in accordance with a resolution of the directors.
KOH HONG MUAN @ KOH GAK SIONG
Director
TAN KWE HEE
Director
Dated: 28 August 2014
Kuala Lumpur
STATUTORY DECLARATION
(Pursuant to Section 169[16] of the Companies Act, 1965)
I, KOH HONG MUAN @ KOH GAK SIONG, being the director primarily responsible for the financial management of
KOMARKCORP BERHAD, do solemnly and sincerely declare that the financial statements set out on pages 43 to 97 are
drawn up, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing
the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by
the abovenamed, at Kuala Lumpur
in Wilayah Persekutuan on
28 August 2014
Before me,
Commissioner for Oaths
KOM A R KCO R P B E R HAD
KOH HONG MUAN @ KOH GAK SIONG
INDEPENDENT AUDITORS’ REPORT
41
to the Members of Komarkcorp Berhad (Company No: 374265-A)
(Incorporated in Malaysia)
Report on the Financial Statements
We have audited the financial statements of Komarkcorp Berhad, which comprise the statements of financial position as
at 30 April 2014 of the Group and of the Company, and the statements of profit or loss and other comprehensive income,
statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then
ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 43 to 97.
Directors’ Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation of financial statements that give a true and fair view
in accordance with Malaysian Financial Reporting Standards and the requirements of the Companies Act, 1965 in
Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material misstatements, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement
of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control
relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the
reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company
as at 30 April 2014 and of their financial performance and cash flows for the financial year then ended in accordance with
Malaysian Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
a)
In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company
and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions
of the Act.
b)
We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not
acted as auditors, which are indicated in Note 6 to the financial statements.
c)
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s
financial statements are in form and content appropriate and proper for the purposes of the preparation of the
financial statements of the Group and we have received satisfactory information and explanations required by us
for those purposes.
d)
The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse
comment made under Section 174(3) of the Act, except as disclosed in Note 6 to the financial statements.
ANNUA L R EPORT 2 0 1 4
INDEPENDENT AUDITORS’ REPORT
42
to the Members of Komarkcorp Berhad (Company No: 374265-A)
(Incorporated in Malaysia) (cont’d)
Other Reporting Responsibilities
The supplementary information set out in Note 17 to the financial statements is disclosed to meet the requirement of
Bursa Malaysia Securities Berhad. The directors are responsible for the preparation of the supplementary information in
accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the
Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian
Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the
supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive
of Bursa Malaysia Securities Berhad.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies
Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of
this report.
ONG & WONG AF 0241
Chartered Accountants Dated: 28 August 2014
Kuala Lumpur
KOM A R KCO R P B E R HAD
ONG KOON LIANG
2909/02/15(J)
Partner of Firm
STATEMENTS OF FINANCIAL POSITION
43
as at 30 April 2014
Group
Company
Note
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
3
4
5
6
7
8
9
10
121,242
1,758
229
1,750
123,509
1,706
4
1,971
1,750
31,683
-
31,683
-
124,979
128,940
31,683
31,683
28,929
39,874
836
105
9,486
37,777
42,480
2,193
124
8,933
6
42,963
-
42
42,362
3
79,230
91,507
42,969
42,407
204,209
220,447
74,652
74,090
81,275
-#
15,634
1,967
81,275
15,634
19,739
81,275
-#
15,634
(27,074)
81,275
15,634
(27,837)
98,876
116,648
69,835
69,072
14,840
554
8,877
2,654
-
-
15,394
11,531
-
-
30,763
57,479
1,697
29,730
61,061
1,477
302
1,460
3,055
-
560
1,300
3,158
-
89,939
92,268
4,817
5,018
105,333
103,799
4,817
5,018
204,209
220,447
74,652
74,090
ASSETS
Non-current assets
Property, plant and equipment
Prepaid lease payments on land
Investment property
Investments in subsidiaries
Investment in associate
Other investment
Development expenditure
Goodwill on consolidation
Current assets
Inventories
Trade and other receivables
Amount due from related companies
Amount due from associate company
Tax recoverable
Cash and bank balances
11
12
13
13
14
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity attributable to equity
holders of the Company
Share capital
Treasury shares
Share premium
Reserves
15
16
17
Total equity
Non-current liabilities
Borrowings
Deferred tax liabilities
Current liabilities
Trade and other payables
Amount due to related company
Borrowings
Tax payable
Total liabilities
TOTAL EQUITY AND LIABILITIES
18
19
20
13
18
# Amount less than RM1,000.
The annexed notes form an integral part of these financial statements.
ANNUA L R EPORT 2 0 1 4
STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
44
for the year ended 30 April 2014
Group
Note
Revenue
Cost of sales
Gross profit
Other operating income
Depreciation and amortisation
Staff costs and employee benefits
Other operating expenses
21
(Loss)/profit from operations
Finance costs
(Loss)/profit before taxation
Taxation
22
23
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
141,805
(85,091)
136,037
(74,238)
2,865
-
2,494
-
56,714
1,112
(12,888)
(25,708)
(42,862)
61,799
1,549
(12,327)
(22,507)
(25,296)
2,865
(676)
(782)
2,494
(1,199)
(521)
(23,632)
(5,072)
3,218
(5,491)
1,407
(238)
774
(254)
(28,704)
(205)
(2,273)
(2,558)
1,169
-
520
-
(28,909)
(4,831)
1,169
520
12,031
-
-
-
(Loss)/profit after taxation
Other comprehensive income/(expenses):
Item that will not be reclassified
subsequently to profit or loss
- Surplus on revaluation
Item that is or may be reclassified
subsequently to profit or loss
- Foreign currency translation
Total comprehensive (loss)/income
for the year
(488)
795
-
-
(17,366)
(4,036)
1,169
520
(Loss)/profit for the year attributable to:
- Equity holders of the Company
(28,909)
(4,831)
1,169
520
Total comprehensive (loss)/income
for the year attributable to:
- Equity holders of the Company
(17,366)
(4,036)
1,169
520
(35.6)
(6.0)
Basic loss per share attributable to equity
holders of the Company (sen)
24
The annexed notes form an integral part of these financial statements.
KOM A R KCO R P B E R HAD
25
16
16
-
-
-#
81,275
-
-#
-
-
-
-
-
81,275
-#
437
-
-
-
(437)
81,275
Treasury
shares
RM’000
15,634
-
-
-
15,634
-
345
-
15,289
Share
Premium
RM’000
The annexed notes form an integral part of these financial statements.
# Amount less than RM1,000.
At 30 April 2014
At 30 April 2013
Appropriation of
profit
Total comprehensive
loss for the year
Treasury shares
-repurchased
Dividend
At 30 April 2012/1
May 2012
Total comprehensive
loss for the year
Disposal of treasury
shares
Treasury shares
-repurchased
-sold
Note
Share
capital
RM’000
2,589
-
-
886
1,703
-
-
-
1,703
4,037
-
(488)
-
4,525
-
-
795
3,730
12,031
-
12,031
-
-
-
-
-
-
General Translation Revaluation
reserve
reserve
reserve
RM’000
RM’000
RM’000
(16,690)
(406)
(28,909)
(886)
13,511
-
-
(4,831)
18,342
Retained
profit
RM’000
< ----------------------Attributable to Equity Holders of the Company -------------------------- >
< ----------------- Non-distributable ------------------ > Distributable
98,876
-#
(406)
(17,366)
-
116,648
-#
437
345
(4,036)
119,902
Total
RM’000
-
-
-
-
-
-
-
-
-
Noncontrolling
interest
RM’000
98,876
-#
(406)
(17,366)
-
116,648
-#
437
345
(4,036)
119,902
Total
equity
RM’000
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 April 2014
45
ANNUA L R EPORT 2 0 1 4
STATEMENT OF CHANGES IN EQUITY
46
for the year ended 30 April 2014
Note
At 1 May 2012
Total comprehensive
profit for the year
Treasury shares
-repurchased
-sold
At 30 April 2013/
1 May 2013
Total comprehensive
profit for the year
Treasury shares
-repurchased
Dividend
----Distributable---Share
Accumulated
premium
losses
RM’000
RM’000
Share
capital
RM’000
Treasury
shares
RM’000
81,275
(437)
15,289
(28,357)
67,770
-
-
-
520
520
-
-#
437
345
-
-#
782
81,275
-
15,634
(27,837)
69,072
-
-
-
1,169
1,169
-
-#
-
-
(406)
-#
(406)
81,275
-#
15,634
(27,074)
69,835
16
16
25
At 30 April 2014
# Amount less than RM1,000.
The annexed notes form an integral part of these financial statements.
KOM A R KCO R P B E R HAD
Total
Equity
RM’000
STATEMENTS OF CASH FLOWS
47
for the year ended 30 April 2014
Group
Note
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss)/profit before taxation
Adjustments for:
Dividend income
Unreconciled balances written off
Allowance for impairment losses:
- Amount due from related company
- Development expenditure
- Property, plant and equipment
- Trade receivables
Amount due from related company written off
Amortisation of development expenditure
Allowance for slow-moving manufactured
inventories
Amortisation of prepaid lease payment on land
Bad debts written off
Inventories written off
Gain on disposal of property, plant and
equipment
Gain on disposal of investment property
Loss on disposal of other investment
Waiver of amount due from related company
Property, plant and equipment written off
Depreciation of property, plant and equipment
Gain on foreign exchange, unrealised
Interest expense
Interest income
Operating profit/(loss) before working capital
changes
Decrease/(increase) in inventories
Decrease/(increase) in receivables
Increase/(decrease) in payables
Cash generated from/(absorbed by) operations
Tax refund
Tax paid
Interest paid
Interest received
Net cash generated from/(used in) operating
activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and
equipment
Proceeds from disposal of investment property
Proceeds from disposal of other investment
Dividend received
Development expenditure paid
Net cash (used in)/generated from investing
activities
A
2014
RM’000
2013
RM’000
2014
RM’000
Company
2013
RM’000
(28,704)
(2,273)
1,169
520
687
794
(2,865)
160
(2,494)
-
1,071
12,512
1,012
805
518
866
8
-
53
-
816
47
1,548
-
1,608
44
1
1,805
-
-
(13)
1
(4)
12,036
(17)
5,072
(129)
(903)
(53)
28
11,417
(116)
5,491
(98)
238
-
254
-
6,740
8,032
720
1,033
19,129
(3,167)
(7,129)
3,486
(1,290)
(573)
(258)
(1,667)
(1,458)
(67)
16,525
78
(2,144)
(5,072)
129
12,319
6
(1,036)
(5,491)
98
(2,121)
(238)
-
(3,192)
(254)
-
9,516
5,896
(2,359)
(3,446)
(3,291)
(6,293)
-
-
2,894
3
(121)
4,525
243
(173)
2,865
-
2,494
-
(515)
(1,698)
2,865
2,494
ANNUA L R EPORT 2 0 1 4
STATEMENTS OF CASH FLOWS
48
for the year ended 30 April 2014 (cont’d)
Group
Note
CASH FLOWS FROM
FINANCING ACTIVITIES
Purchase of treasury shares
Decrease in deposits pledged with
licensed banks
Proceeds from term loans raised
Proceeds from disposal of treasury shares
Dividend paid
Repayment of term loans and other
borrowings
Repayment of hire purchase and lease
financing
Net change in bills payable
Net cash generated from/(used in)
financing activities
Net increase/(decrease) in cash and cash
equivalents
Effects of exchange rate changes
Cash and cash equivalents at beginning
of year
Cash and cash equivalents at end of year
B
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
-#
-#
-#
-#
575
20,388
(406)
2,110
14,480
782
-
(406)
782
-
(15,624)
(8,875)
-
-
(5,622)
3,611
(4,183)
(2,081)
-
-
2,922
2,233
(406)
782
11,923
(3,565)
6,431
(757)
100
-
(170)
-
(8,834)
(14,508)
(3,155)
(2,985)
(476)
(8,834)
(3,055)
(3,155)
# Amount less than RM1,000
NOTE
A.
ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT
During the financial year, the Group and the Company acquired the property, plant and equipment by:
Group
Cash
Hire purchase
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
3,291
5,202
6,293
4,552
-
-
8,493
10,845
-
-
B.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents included in the statements of cash flows comprise the following amounts:
Group
Cash and bank balances
Less: Deposits pledged with
licensed banks
Bank overdrafts
KOM A R KCO R P B E R HAD
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
9,486
8,933
-
3
(2,166)
(7,796)
(2,741)
(15,026)
(3,055)
(3,158)
(476)
(8,834)
(3,055)
(3,155)
NOTES TO THE FINANCIAL STATEMENTS
49
30 April 2014
1.
GENERAL INFORMATION
The Company is principally engaged in investment holding and provision of management services to its subsidiaries.
The principal activities of the subsidiaries are as set out in Note 6 to the financial statements.
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main
Market of Bursa Malaysia Securities Berhad (“Bursa Malaysia”).
The registered office is located at Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, 47800 Petaling
Jaya, Selangor Darul Ehsan.
The principal place of business of the Company is located at Lot 132, Jalan 16/1, Kawasan Perindustrian Cheras
Jaya, 43200 Balakong, Selangor Darul Ehsan
2.
SIGNIFICANT ACCOUNTING POLICIES
2.1
Changes in Accounting Policies and Effects Arising from Adoption of New and Revised Standards and
Interpretations
The financial statements for the financial year ended 30 April 2014 have been prepared in accordance with
Malaysian Financial Reporting Standards (“MFRSs”).
The accounting policies adopted by the Group and by the Company are consistent with those adopted in the
previous financial year except for the adoption of the following new, revised MFRSs and amendments which
are effective for annual period beginning on or after 1 January 2013.
Effective for annual period
beginning on or after
Description
MFRS 7
Financial Instruments: Disclosures (Amendments relating to
Disclosures - Offsetting Financial Assets and Liabilities)
1 January 2013
MFRS 10
Consolidated Financial Statements
1 January 2013
MFRS 10
Consolidated Financial Statements (Amendments relating to
Transition Guidance)
1 January 2013
MFRS 11
Joint Arrangements
1 January 2013
MFRS 11
Joint Arrangements (Amendments relating to Transition
Guidance)
1 January 2013
MFRS 12
Disclosures of Interests in Other Entities
1 January 2013
MFRS 12
Disclosures of Interests in Other Entities (Amendments relating
to Transition Guidance)
1 January 2013
MFRS 13
Fair Value Measurement
1 January 2013
MFRS 101
Presentation of Financial Statements (Amendments relating to
Presentation of Items of Other Comprehensive Income)
1 July 2012
MFRS 119
Employee Benefits (IAS 19 as amended by IASB in June 2011)
1 January 2013
MFRS 127
Separate Financial Statements (IAS 27 as amended by IASB in
May 2011)
1 January 2013
MFRS 128
Investments in Associates and Joint Ventures (IAS 28 as
amended by IASB in May 2011)
1 January 2013
Amendments to MFRSs contained in the document entitled Annual
Improvements 2009 - 2011 Cycle
1 January 2013
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
50
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.1
Changes in Accounting Policies and Effects Arising from Adoption of New and Revised Standards and
Interpretations (cont’d)
The adoption of the above Standards and Amendments has no material impact on the financial statements
of the Group and of the Company, except as discussed below:
(i)
Amendments to MFRS 7: Offsetting Financial Assets and Financial Liabilities and the related
disclosures
The Group and the Company have applied the amendments to MFRS 7: Offsetting Financial Assets and
Financial Liabilities and the related disclosures for the first time in the current year. The amendments
to MFRS 7 require entities to disclose information about rights of offset and related arrangements
(such as collateral posting requirements) for financial instruments under an enforceable master netting
agreement or similar arrangement.
The amendments have been applied retrospectively. As the Group and the Company do not have any
offsetting arrangements in place, the application of the amendments has had no material impact on
the disclosures or on the amounts recognised in these financial statements.
(ii)
New and revised Standards on consolidation, joint arrangements, associates and disclosures
In November 2011, a package of five standards on consolidation, joint arrangements, associates
and disclosures was issued comprising MFRS 10 Consolidated Financial Statements, MFRS 11 Joint
Arrangements, MFRS 12 Disclosures of Interests in Other Entities, MFRS 127 (IAS 27 as revised by
IASB in May 2011) Separate Financial Statements and MFRS 128 (IAS 28 as revised by IASB in May
2011) Investments in Associates and Joint Ventures. Subsequent to the issue of these standards,
amendments to MFRS 10, MFRS 11 and MFRS 12 were issued to clarify certain transitional guidance
on the first-time application of the standards.
In current year, the Group and the Company have adopted for the first time MFRS 10, MFRS 11,
MFRS 12, MFRS 127 (IAS 27 as revised by IASB in May 2011) and MFRS 128 (IAS 28 as revised by
IASB in May 2011) together with the amendments to MFRS 10, MFRS 11 and MFRS 12 regarding the
transitional guidance.
As the Group and the Company do not have any joint arrangement and interest in other entities, the
application of the amendments has had no impact on the disclosures or on the amounts recognised
in these financial statements.
(iii)
MFRS 13 Fair Value Measurement
The Group and the Company have applied MFRS 13 for the first time in the current year. MFRS 13
establishes a single source of guidance for fair value measurements and disclosures about fair value
measurements. The Standard defines fair value, establishes a framework for measuring fair value, and
requires disclosures about fair value measurements. The scope of MFRS 13 is broad; it applies to
both financial instrument items and non-financial instrument items for which other MFRSs require or
permit fair value measurements and disclosures about fair value measurements, except in specified
circumstances.
MFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction in the principal (or most advantageous) market at the measurement
date under current market conditions. Fair value under MFRS 13 is an exit price regardless of whether
that price is directly observable or estimated using another technique. Also MFRS 13 includes
extensive disclosure requirements.
MFRS 13 requires prospective from 1 January 2013. In addition, specific transitional provisions were
given to entities such that they need not apply the disclosure requirements set out in the Standard in
comparative information provided for periods before the initial application of the Standard. Other than
additional disclosures, the application of MFRS 13 has not had any material impact on the amounts
recognised in these financial statements.
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
51
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.1
Changes in Accounting Policies and Effects Arising from Adoption of New and Revised Standards and
Interpretations (cont’d)
(iv)
Amendments to MFRS 101: Presentation of Items of Other Comprehensive Income
The Group and the Company have applied the amendments to MFRS 101 Presentation of Items of
Other Comprehensive Income for the first time in the current year. The amendments introduce new
terminology, whose use is not mandatory, for the statement of comprehensive income and income
statement. Under the amendments to MFRS 101, the “statement of comprehensive income” is
renamed “statement of profit or loss and other comprehensive income” and the “income statement”
is renamed as the “statement of profit or loss”.
The amendments to MFRS 101 retain the option to present profit or loss and other comprehensive
income in either a single statement or in two separate but consecutive statements. However,
the amendments to MFRS 101 require items of other comprehensive income to be grouped into
two categories in the other comprehensive income section: (a) items that will not be reclassified
subsequently to profit or loss; and (b) items that will be reclassified subsequently to profit or loss
when specific conditions are met. Income tax on items of other comprehensive income is required to
be allocated on the same basis - the amendments do not change the option to present items of other
comprehensive income either before tax or net of tax.
The amendments have been applied retrospectively, and hence the presentation of items of other
comprehensive income has been modified accordingly to reflect the changes. Other than the
abovementioned presentation changes, the application of the amendments to MFRS 101 has not
resulted in any impact on profit or loss, other comprehensive income and total comprehensive income.
(v)
Amendments to MFRS 101 Presentation of Financial Statements
(as part of the Annual Improvements to MFRSs 2009 - 2011 Cycle issued in July 2012)
The Annual Improvements to MFRSs 2009 – 2011 have made a number of amendments to MFRSs.
The amendments that are relevant to the Group and the Company are the amendments to MFRS 101
regarding when a statement of financial position as at the beginning of the preceding period (third
statements of financial position) and the related notes are required to be presented. The amendments
specify that a third statements of financial position is required when (a) an entity applies an accounting
policy retrospectively, or makes a retrospective restatement or reclassification of items in its financial
statements, and (b) the retrospective application, restatement or reclassification has a material effect
on the information in the third statements of financial position. The amendments specify that related
notes are not required to accompany the third statements of financial position.
In the current year, the Group and the Company did not applies any accounting policy retrospectively,
or makes a retrospective restatement or reclassification of items in its financial statements, hence no
third statements of financial position required.
2.2
Standards and IC Interpretations in Issue But Not Yet Effective
At the date of authorisation for issue of the financial statements, the new and revised Standards and
Amendments which were in issue but not yet effective and not early adopted by the Group and the Company
are as listed below:
Effective for annual period
beginning on or after
Description
MFRS 7
Financial Instruments: Disclosures [Amendments relating to
Mandatory Effective Date of MFRS 9 and Transition Disclosures
(IFRS 9 issued by IASB in November 2009 and October 2010
respectively)]
to be announced
MFRS 9
Financial Instruments
to be announced
MFRS 119
Employee Benefits (Amendments relating to Defined Benefit
Plans: Employee Contributions)
1 July 2014
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
52
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.2
Standards and IC Interpretations in Issue But Not Yet Effective (cont’d)
Effective for annual period
beginning on or after
Description
MFRS 132
Financial Instruments: Presentation (Amendments relating to
Offsetting Financial Assets and Financial Liabilities)
1 January 2014
MFRS 136
Impairment of Assets (Amendments relating to Recoverable
Amount Disclosures for Non-Financial Assets)
1 January 2014
MFRS 139
Financial Instruments: Recognition and Measurement (Novation
of Derivatives and Continuation of Hedge Accounting)
1 January 2014
Amendments to MFRS 10, MFRS 12 and MFRS 127
1 January 2014
Amendments to MFRS 10, MFRS 12 and MFRS 127 relating to Investment
Entities
1 January 2014
Amendments to MFRSs contained in the document entitled Annual
Improvements 2010 - 2012 Cycle
1 July 2014
Amendments to MFRSs contained in the document entitled Annual
Improvements 2011 - 2013 Cycle
1 July 2014
The directors anticipate that abovementioned Standards and Amendments will be adopted in the annual
financial statements of the Group and of the Company when they become effective and that the adoption of
these Standards and Amendments will have no material impact on the financial statements of the Group and
of the Company in the period of initial application, except as discussed below:
(i)
Amendments to MFRS 132: Offsetting Financial Assets and Financial Liabilities
The amendments to MFRS 132 clarify the requirements relating to the offset of financial assets
and financial liabilities. Specifically, the amendments clarify the meaning of “currently has a legally
enforceable right of set-off” and “simultaneous realisation and settlement”.
The directors do not anticipate that the application of these amendments to MFRS 132 will have
significant impact on the Group’s consolidated financial statements as the Group does not have any
financial assets and financial liabilities that qualify for offset.
(ii)
MFRS 9 and Amendments relating to Mandatory Effective Date of MFRS 9 and Transition
Disclosures
MFRS 9 (IFRS issued by IASB in November 2009) introduces new requirements for the classification
and measurement of financial assets. MFRS 9 (IFRS issued by IASB in October 2010) includes the
requirements for the classification and measurement of financial liabilities and for derecognition.
The amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010 respectively)
(“MFRS 9”) relating to “Mandatory Effective Date of MFRS 9 and Transition Disclosures” which became
immediately effective on the issuance date of 1 March 2012 amended the mandatory effective date
of MFRS 9 to annual periods beginning on or after 1 January 2015 instead of on or after 1 January
2013, which earlier application still permitted as well as modified the relief from restating prior periods.
MFRS 7 which was also amended in tandem with the issuance of the aforementioned amendments
introduces new disclosure requirements that are either permitted or required on the basis of the
entity’s date of adoption and whether the entity chooses to restate prior periods.
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
53
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.2
Standards and IC Interpretations in Issue But Not Yet Effective (cont’d)
(ii)
MFRS 9 and Amendments relating to Mandatory Effective Date of MFRS 9 and Transition
Disclosures (cont’d)
Key requirements of MFRS 9:
•
all recognised financial assets that are within the scope of MFRS 139 Financial Instruments:
Recognition and Measurement to be subsequently measured at amortised cost or fair value.
Specifically, debt investments that are held within a business model whose objective is to collect
the contractual cash flows, and that have contractual cash flows that are solely payments of
principal and interest on the principal outstanding are generally measured at amortised cost at
the end of subsequent accounting periods. All other debt investments and equity investments
are measured at their fair values at the end of subsequent accounting periods. In addition, under
MFRS 9, entities may make an irrevocable election to present subsequent changes in the fair
value of equity instrument (that is not held for trading) in other comprehensive income, with only
dividend income generally recognised in profit or loss.
•
with regard to the measurement of financial liabilities designated as at fair value through
profit or loss, MFRS 9 requires that the amount of change in the fair value of the financial
liability that is attributable to changes in the credit risk of that liability, is presented in other
comprehensive income, unless the recognition of the effects of changes in the liability’s credit
risk in other comprehensive income would create or enlarge an accounting mismatch in profit
or loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently
reclassified to profit or loss. Previously, under FRS 139, the entire amount of the change in the
fair value of the financial liability designated as at fair value through profit or loss was presented
in profit or loss.
The directors anticipate that the application of MFRS 9 in the future may have impact on amounts
reported in respect of the Group’s financial assets and financial liabilities that classified as availablefor-sales investments (if any) as they are to be measured at fair value at the end of subsequent reporting
periods, with changes in the fair value being recognised in profit or loss.
(iii)
Amendments to MFRSs: Annual Improvements 2010 - 2012 Cycle
The Annual Improvements 2010 - 2012 Cycle include a number of amendments to various MFRSs.
The amendments to MFRSs include:
•
Amendments to MFRS 2 Share-based Payments;
•
Amendments to MFRS 3 Business Combinations;
•
Amendments to MFRS 8 Operating Segments;
•
Amendments to MFRS 116 Property, Plant and Equipment;
•
Amendments to MFRS 124 Related Party Disclosures; and
•
Amendments to MFRS 138 Intangible Assets.
Amendments to MFRS 3
The amendments to MFRS 3 clarify the treatment of changes in fair value of contingent consideration.
The directors do not anticipate that the amendments to MFRS 3 will have a significant effect on the
Group’s and on the Company’s financial statements.
Amendments to MFRS 8
The amendments to MFRS 8 require the disclosure of judgements made by management in applying
the aggregation criteria in MFRS 8. The directors anticipate that the amendments to MFRS 8 may
result in more disclosures being made with regard to operating segments.
Amendments to MFRS 116
The amendments to MFRS 116 stipulate the treatment of an asset at the date of revaluation under
revaluation model. The directors do not anticipate that the amendments to MFRS 116 will have a
significant effect on the Group’s and on the Company’s financial statements.
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
54
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.2
Standards and IC Interpretations in Issue But Not Yet Effective (cont’d)
(iii)
Amendments to MFRSs: Annual Improvements 2010 - 2012 Cycle (cont’d)
Amendments to MFRS 124
The amendments to MFRS 124 added a new condition in which an entity is related to a reporting
entity. The directors anticipate that the amendments to MFRS 124 may result in more disclosures
being made with regard to related party transactions.
Amendments to MFRS 138
The amendments to MFRS 138 clarify the treatment of the carrying amount of intangible assets upon
revaluation. The directors do not anticipate that the amendments to MFRS 138 will have a significant
effect on the Group’s and on the Company’s financial statements.
(iv)
Amendments to MFRSs: Annual Improvements 2011 - 2013 Cycle
The Annual Improvements 2011 - 2013 Cycle include a number of amendments to various MFRSs.
The amendments to MFRSs include:
•
Amendments to MFRS 3 Business Combinations;
•
Amendments to MFRS 13 Fair Value Measurement; and
•
Amendments to MFRS 140 Investment Property.
Amendments to MFRS 3
The amendments to MFRS 3 clarify that this Standard does not apply to the accounting for the formation
of a joint arrangement in the financial statements of the joint arrangement itself. The directors do not
anticipate that the amendments to MFRS 3 will have a significant effect on the Group’s and on the
Company’s financial statements.
Amendments to MFRS 13
The amendments to MFRS 13 allow other contracts within the scope of MFRS 139 Financial Instruments:
Recognition and Measurement or MFRS 9 Financial Instruments to have similar application as financial
assets and financial liabilities. The directors do not anticipate that the amendments to MFRS 13 will
have a significant effect on the Group’s and on the Company’s financial statements.
Amendments to MFRS 140
The amendments to MFRS 140 added that in applying this Standard, an entity has to exercise
judgements in determine whether the acquisition of investment property is the acquisition of an asset
or a group of assets or a business combination within the scope of MFRS 3 Business Combinations.
These amendments are to be applied prospectively.
2.3
Basis of Preparation
The financial statements of the Group and of the Company have been prepared in accordance with MFRSs
and the provisions of the Companies Act, 1965 in Malaysia. The financial statements have been prepared on
the historical cost basis except as disclosed in the accounting policies below.
The financial statements are presented in Ringgit Malaysia (“RM”).
2.4
Basis of Consolidation
Business Combinations
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries
as at the reporting date. The financial statements of the subsidiaries used in the preparation of the
consolidated financial statements are prepared for the same reporting date as the Company. Consistent
accounting policies are applied to like transactions and events in similar circumstances.
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
55
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.4
Basis of Consolidation (cont’d)
Business Combinations (cont’d)
All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group
transactions are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains
control, and continue to be consolidated until the date that such control ceases.
Acquisition of subsidiaries are accounted for by applying the acquisition method. Identifiable assets acquired
and liabilities assumed in a business combination are measured initially at their fair values at the acquisition
date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred
and the services are received.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and
pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host
contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to
be an asset or liability, will be recognised in accordance with MFRS 139 Financial Instrument: Recognition
and Measurement, either in profit or loss or as change to other comprehensive income. If the contingent
consideration is classified as equity, it is not to be remeasured until it is finally settled within equity.
In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured
to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.
The Group elects for each individual business combination, whether non-controlling interest in the acquiree
(if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate
share of the acquiree’s identifiable net assets.
Any excess of the sum of the fair value of the consideration transferred in the business combination, the
amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously
held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and
liabilities is recorded as goodwill. The accounting policy for the goodwill is set out in Note 2.7 to the financial
statements. In instances where the latter amount exceeds the former, the excess is recognised as gain on
bargain purchase in profit or loss on the acquisition date.
2.5
Foreign Currencies
(i)
Functional and Presentation Currency
The individual financial statements of each entity in the Group are measured using the currency
of the primary economic environment in which the entity operates (“the functional currency”). The
consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the Company’s
functional currency.
(ii)
Foreign Currency Transactions
Transactions in foreign currencies are measured in the respective functional currencies of the Company
and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange
rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated
in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary
items denominated in foreign currencies that are measured at historical cost are translated using the
exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign
currencies measured at fair value are translated using the exchange rates at the date when the fair
value was determined.
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
56
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.5
Foreign Currencies (cont’d)
(ii)
Foreign Currency Transactions (cont’d)
Exchange differences arising on the settlement of monetary items or on translating monetary items at
the reporting date are recognised in profit or loss except for exchange differences arising on monetary
items that form part of the Group’s net investment in foreign operations, which are recognised initially
in other comprehensive income and accumulated under foreign currency translation reserve in equity.
The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on
disposal of the foreign operation.
Exchange differences arising on the translation of non-monetary items carried at fair value are included
in profit or loss for the period except for the differences arising on the translation of non-monetary
items in respect of which gains and losses are recognised directly in equity. Exchange differences
arising from such non-monetary items are also recognised directly in equity.
The closing rates used in the translation of foreign currency monetary assets and liabilities and the
financial statements of foreign operations are as follows:
1 United States Dollar (USD)
1 Singapore Dollar (SGD)
1 Renminbi Yuan (RMB)
1 Australia Dollar (AUD)
100 Thailand Baht (THB)
100 Hong Kong Dollar (HKD)
1000 Indonesia Rupiah (INR)
2014
RM
2013
RM
3.27
2.60
0.52
3.03
10.12
42.14
0.28
3.09
2.49
0.49
3.19
10.10
39.88
0.32
(iii)
Foreign Operations
The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling
at the reporting date and income and expenses are translated at exchange rates at the dates of
the transactions. The exchange differences arising on the translation are taken directly to other
comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in
other comprehensive income and accumulated in equity under foreign currency translation reserve
relating to that particular foreign operation is recognised in the profit or loss.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as
assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign
operations and translated at the closing rate at the reporting date.
2.6
Property, Plant and Equipment and Depreciation
All items of property, plant and equipment are initially recorded at cost. The cost of an item of property,
plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the item can be measured reliably.
Subsequent to recognition, property, plant and equipment except for freehold land, are measured at cost
less accumulated depreciation and accumulated impairment losses, if any. When significant parts of
property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as
individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection
is performed, its cost is recognised in the carrying amount of the property, plant and equipment as a
replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in
profit or loss as incurred.
Certain freehold and leasehold properties are stated at revalued amount, which is the fair value at the date
of the revaluation less any accumulated impairment losses.
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
57
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.6
Property, Plant and Equipment and Depreciation (cont’d)
Freehold land has an unlimited useful life and therefore is not depreciated.
Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:
Buildings
Plant and machinery
Office equipment, furniture and fittings
Motor vehicles
Mould and die cutters
Renovation
2% and 10%
5% to 20%
5% to 25%
10% to 20%
10% to 20%
10% to 20%
The carrying values of property, plant and equipment are reviewed for impairment when events or changes
in circumstances indicate that the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each year-end, and adjusted
prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit
or loss in the year the asset is derecognised.
2.7
Intangible Assets
Goodwill
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less
accumulated impairment losses, if any.
For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of
the Group’s cash-generating units that are expected to benefit from the synergies of the combination.
The cash-generating unit to which goodwill has been allocated is tested for impairment annually and
whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying
amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the
cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying
amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are
not reversed in subsequent periods.
Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating
unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount
of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this
circumstance is measured based on the relative fair values of the operations disposed of and the portion of
the cash-generating unit retained.
Goodwill and fair value adjustments arising on the acquisition of foreign operation on or after 1 January 2006
are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of
the foreign operations and translated in accordance with the accounting policy set out in Note 2.5 to the
financial statements.
Goodwill and fair value adjustments which arose on acquisitions of foreign operation before 1 January 2006
are deemed to be assets and liabilities of the Company and are recorded in RM at the rates prevailing at the
date of acquisition.
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
58
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.8
Development Expenditure (cont’d)
Expenditure on development activities, where research findings are applied to a plan or design for the
production of new or substantially improved products and processes, is capitalised if the product or process
is technically and commercially feasible and the Group has sufficient resources to complete development.
The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of
overheads. Other development expenditure is recognised in profit or loss as incurred.
Capitalised development expenditure is stated at cost less accumulated amortisation. These expenditure are
amortised and recognised as expenses on systematic basis from the date of commencement of commercial
production so as to reflect the pattern in which the related economic benefits are recognised, which are over
three (3) to five (5) years.
2.9
Impairment of Non-Financial Assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired.
If any such indication exists, or when an annual impairment assessment for an asset is required, the Group
makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For
the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units (“CGU”)).
In assessing value in use, the estimated future cash flows expected to be generated by the asset are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds
its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised
in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill
allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the
unit or groups of units on a pro-rata basis.
Impairment losses are recognised in profit or loss except for assets that are previously revalued where the
revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other
comprehensive income up to the amount of any previous revaluation.
An assessment is made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. A previously recognised impairment loss
is reversed only if there has been a change in the estimates used to determine the asset’s recoverable
amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset
is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have
been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is
recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is
treated as a revaluation increase. Impairment loss on goodwill is not reversed in a subsequent period.
2.10Subsidiaries
A subsidiary is an entity over which the Group has the power to govern the financial and operating policies
so as to obtain benefits from its activities.
In the Company’s separate financial statements, investment in subsidiaries are accounted for at cost less
impairment losses, if any.
2.11Associate
An associated company is defined as a company, not being a subsidiary company, in which the Company
has a long term equity interest and where it exercises significant influence over the financial and operation
policies.
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
59
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.11 Associate (cont’d)
Investment in associated company is accounted for in the consolidated financial statements using the equity
method of accounting. Under the equity method, the investment in associated company is carried in the
consolidated statement of financial position at cost adjusted for post-acquisition changes in the Group’s
share of net assets of the associated company. The Group’s share of the net profit or loss of the associated
company is recognised in profit or loss. Where there has been a change recognised directly in the equity of
the associated company, the Group recognises its share of such changes.
In applying the equity method, unrealised gains and losses on transactions between the Group and the
associated company are eliminated to the extent of the Group’s interest in the associated company. After
application of the equity method, the Group determines whether it is necessary to recognise any additional
impairment loss with respect to the Group’s net investment in the associate. The associated company is
equity accounted for from the date the Group obtains significant influence until the date the Group ceases to
have significant influence over the associated company.
When the Group’s share of losses in an associated company equals or exceeds its interest in the associate,
including any long-term interests that, in substance, form part of the Group’s net investment in the associated
company, the Group does not recognise further losses, unless it has incurred obligations or made payments
on behalf of the associated company.
The most recent available audited financial statements of the associates are used by the Group in applying
the equity method. Where the dates of the audited financial statements used are not coterminous with
those of the Group, the share of results is arrived at from the last audited financial statements available
and management financial statements to the end of the accounting period. Uniform accounting policies are
adopted for like transactions and events in similar circumstances.
In the Company’s separate financial statements, investment in associated company is stated at cost less
accumulated impairment losses.
On disposal of such investments, the differences between net disposal proceeds and their carrying amounts
is included in profit or loss.
2.12 Financial Assets
Financial assets are recognised in the statements of financial position when, and only when, the Group and
the Company become a party to the contractual provisions of the financial instrument. When financial assets
are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value
through profit or loss, directly attributable transaction costs.
The Group and the Company determine the classification of their financial assets at initial recognition, and
the categories include financial assets at fair value through profit or loss, loans and receivables, held-tomaturity investments and available-for-sale financial assets.
(i)
Financial Assets at Fair Value through Profit or Loss
Financial assets are classified as financial assets at fair value through profit or loss if they are held
for trading or are designated as such upon initial recognition. Financial assets held for trading are
derivatives (including separated embedded derivatives) or financial assets acquired principally for the
purpose of selling in the near term.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at
fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net
gains or net losses on financial assets at fair value through profit or loss do not include exchange
differences, interest and dividend income. Exchange differences, interest and dividend income on
financial assets at fair value through profit or loss are recognised separately in profit or loss as part of
other losses or other income.
Financial assets at fair value through profit or loss could be presented as current or non-current.
Financial assets that are held primarily for trading purposes are presented as current whereas financial
assets that are not held primarily for trading purposes are presented as current or non-current based
on the settlement date.
The Group and the Company have not designated any financial assets as at fair value through profit
or loss.
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
60
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.12 Financial Assets (cont’d)
(ii)
Loans and Receivables
Financial assets with fixed or determinable payments that are not quoted in an active market are
classified as loans and receivables.
Subsequent to initial recognition, loans and receivables are measured at amortised cost using the
effective interest method. Gains and losses are recognised in profit or loss when the loans and
receivables are derecognised or impaired, and through the amortisation process.
Loans and receivables are classified as current assets, except for those having maturity dates later
than 12 months after the reporting date which are classified as non-current.
(iii)
Held-to-Maturity Investments
Financial assets with fixed or determinable payments and fixed maturity are classified as held-tomaturity when the Group has the positive intention and ability to hold the investment to maturity.
Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using
the effective interest method. Gains and losses are recognised in profit or loss when the held-tomaturity investments are derecognised or impaired, and through the amortisation process.
Held-to-maturity investments are classified as non-current assets, except for those having maturity
within 12 months after the reporting date which are classified as current.
The Group and the Company have not designated any financial assets as held-to-maturity investments.
(iv)
Available-for-Sale Financial Assets
Available-for-sale financial assets are financial assets that are designated as available for sale or are
not classified in any of the three preceding categories.
After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or
losses from changes in fair value of the financial assets are recognised in other comprehensive income,
except that impairment losses, foreign exchange gains and losses on monetary instruments and
interest calculated using the effective interest method are recognised in profit or loss. The cumulative
gain or loss previously recognised in other comprehensive income is reclassified from equity to profit
or loss as a reclassification adjustment when the financial asset is derecognised. Interest income
calculated using the effective interest method is recognised in profit or loss. Dividends on an availablefor-sale equity instrument are recognised in profit or loss when the Group’s and the Company’s right
to receive payment is established.
Investments in equity instruments whose fair value cannot be reliably measured are measured at cost
less impairment loss, if any.
Available-for-sale financial assets are classified as non-current assets unless they are expected to be
realised within 12 months after the reporting date.
The Group classified its quoted investments as available-for-sale financial assets.
A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired.
On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of
the consideration received and any cumulative gain or loss that had been recognised in other comprehensive
income is recognised in profit or loss.
Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets
within the period generally established by regulation or convention in the marketplace concerned. All regular
way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date
that the Group and the Company commit to purchase or sell the asset.
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
61
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.13 Impairment of Financial Assets
The Group and the Company assess at each reporting date whether there is any objective evidence that a
financial asset is impaired.
(i)
Trade and Other Receivables and Other Financial Assets Carried at Amortised Cost
To determine whether there is objective evidence that an impairment loss on financial assets has
been incurred, the Group and the Company consider factors such as the probability of insolvency or
significant financial difficulties of the debtor and default or significant delay in payments. For certain
categories of financial assets, such as trade receivables, assets that are assessed not to be impaired
individually are subsequently assessed for impairment on a collective basis based on similar risk
characteristics.
Objective evidence of impairment for a portfolio of receivables could include the Group’s and the
Company’s past experience of collecting payments, an increase in the number of delayed payments
in the portfolio past the average credit period and observable changes in national or local economic
conditions that correlate with default on receivables.
If any such evidence exists, the amount of impairment loss is measured as the difference between
the asset’s carrying amount and the present value of estimated future cash flows discounted at the
financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial
assets with the exception of trade receivables, where the carrying amount is reduced through the use
of an allowance account. When a trade receivable becomes uncollectible, it is written off against the
allowance account.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised, the previously recognised
impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its
amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.
(ii)
Available-for-Sale Financial Assets
Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or
obligor, and the disappearance of an active trading market are considerations to determine whether
there is objective evidence that investment securities classified as available-for-sale financial assets
are impaired.
If an available-for-sale financial asset is impaired, an amount comprising the difference between its
cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss
previously recognised in profit or loss, is transferred from equity to profit or loss.
Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the
subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other
comprehensive income. For available-for-sale debt investments, impairment losses are subsequently
reversed in profit or loss if an increase in the fair value of the investment can be objectively related to
an event occurring after the recognition of the impairment loss in profit or loss.
2.14 Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly
liquid investments that are readily convertible to known amount of cash and which are subject to an
insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the
Group’s cash management.
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
62
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.15 Inventories (cont’d)
Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories
to their present location and condition are accounted for as follows:
-
-
Raw materials: purchase costs on a first-in first-out basis.
Finished goods and work-in-progress: costs of direct materials and labour and a proportion of
manufacturing overheads based on normal operating capacity. These costs are assigned on a first-in
first-out basis.
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of
completion and the estimated costs necessary to make the sale.
2.16Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of economic resources will be required to settle the obligation and
the amount of the obligation can be estimated reliably.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no
longer probable that an outflow of economic resources will be required to settle the obligation, the provision
is reversed. If the effect of the time value of money is material, provisions are discounted using a current
pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the
increase in the provision due to the passage of time is recognised as a finance cost.
2.17 Financial Liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into
and the definitions of a financial liability.
Financial liabilities, within the scope of MFRS 139, are recognised in the statements of financial position
when, and only when, the Group and the Company become a party to the contractual provisions of the
financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit
or loss or other financial liabilities.
(i)
Financial Liabilities at Fair Value through Profit or Loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and
financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities held for trading include derivatives entered into by the Group and the Company that
do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and
subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net
gains or losses on derivatives include exchange differences.
The Group and the Company have not designated any financial liabilities as at fair value through profit
or loss.
(ii)
Other Financial Liabilities
The Group’s and the Company’s other financial liabilities include trade payables, other payables and
loans and borrowings.
Trade and other payables are recognised initially at fair value plus directly attributable transaction
costs and subsequently measured at amortised cost using the effective interest method.
Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and
subsequently measured at amortised cost using the effective interest method. Borrowings are
classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting date.
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
63
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.17 Financial Liabilities (cont’d)
(ii)
Other Financial Liabilities (cont’d)
For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are
derecognised, and through the amortisation process.
A financial liability is derecognised when the obligation under the liability is extinguished. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange or modification is treated as a derecognition
of the original liability and the recognition of a new liability, and the difference in the respective carrying
amounts is recognised in profit or loss.
2.18 Borrowing Costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the
acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the
activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing
costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their
intended use or sale.
All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs
consist of interest and other costs that the Group and the Company incurred in connection with the borrowing
of funds.
2.19 Employee Benefits
(i)
Short Term Benefits
Wages, salaries, bonuses and social security contributions (“Socso”) are recognised as expenses in
the year in which the associated services are rendered by employees of the Group and the Company.
Short term accumulating compensated absences such as paid annual leave are recognised when
services are rendered by employees that increase their entitlement to future compensated absences,
and short term non-accumulating compensated absences such as sick leave are recognised when the
absences occur.
(ii)
Defined Contribution Plans
The Group participates in the national pension schemes as defined by the laws of the countries in
which it has operations. The Malaysian companies in the Group make contributions to the Employee
Provident Fund in Malaysia, a defined contribution pension scheme. Contributions to defined
contribution pension schemes are recognised as an expense in the period in which the related service
is performed.
2.20Leases
As Lessee
Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of
the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower,
at the present value of the minimum lease payments. Any initial direct costs are also added to the amount
capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability
so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are
charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are
incurred.
Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonable
certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the
shorter of the estimated useful life and the lease term.
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
64
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.20 Leases (cont’d)
As Lessee (cont’d)
Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the
lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental
expense over the lease term on a straight-line basis.
2.21Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or
receivable.
(i)
Sale of Goods
Revenue from sales of goods is measured at the fair value of the receivable consideration and is
recognised upon transfer of significant risks and rewards of ownership of the goods to the customer.
Revenue is not recognised to the extent where there are significant uncertainties regarding recovery
of the consideration due, associated costs or the possible return of goods.
(ii)
Interest Income
Interest income is recognised on an accrual basis using the effective interest method.
(iii)
Dividend Income
Dividend income is recognised when the right to receive payment is established.
(iv)
Rental Income
Rental income is recognised on accrued basis.
2.22 Income Taxes
(i)
Current Tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted by the reporting date.
Current taxes are recognised in profit or loss except to the extent that the tax relates to items
recognised outside profit or loss, either in other comprehensive income or directly in equity.
(ii)
Deferred Tax
Deferred tax is provided using the liability method on temporary differences at the reporting date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
-
where the deferred tax liability arises from the initial recognition of goodwill or of an asset or
liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; and
-
in respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, where the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not reverse
in the foreseeable future.
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
65
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.22 Income Taxes (cont’d)
(ii)
Deferred Tax (cont’d)
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused
tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, and the carry forward of unused tax credits and
unused tax losses can be utilised except:
-
where the deferred tax asset relating to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is not a business combination and,
at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
-
in respect of deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, deferred tax assets are recognised only to the extent
that it is probable that the temporary differences will reverse in the foreseeable future and
taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each
reporting date and are recognised to the extent that it has become probable that future taxable profit
will allow the deferred tax assets to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates and tax laws that have been
enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or
loss. Deferred tax items are recognised in correlation to the underlying transaction either in other
comprehensive income or directly in equity and deferred tax arising from a business combination is
adjusted against goodwill on acquisition.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity
and the same taxation authority.
2.23 Segment Reporting
For management purposes, the Group is organised into operating segments based on their products
and services which are independently managed by the respective segment managers responsible for the
performance of the respective segments under their charge. The segment managers report directly to the
management of the Company who regularly review the segment results in order to allocate resources to the
segments and to assess the segment performance. Additional disclosures on each of these segments are
shown in Note 26 to the financial statements, including the factors used to identify the reportable segments
and the measurement basis of segment information.
2.24 Share Capital and Share Issuance Expenses
An equity instrument is any contract that evidences a residual interest in the assets of the Group and the
Company after deducting all of its liabilities. Ordinary shares are equity instruments.
Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction
costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the
period in which they are declared.
2.25Contingencies
A contingent liability or asset is a possible obligation or asset that arises from past events and whose
existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly
within the control of the Group.
Contingent liabilities and assets are not recognised in the statements of financial position of the Group.
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
66
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.26 Significant Accounting Judgements and Estimates
The preparation of the Group’s financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the
disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and
estimates could result in outcomes that could require a material adjustment to the carrying amount of the
asset or liability affected in the future.
(i)
Judgements Made in Applying Accounting Policies
In the process of preparing the financial statements, there were no significant judgements made in
applying the accounting policies of the Group which may have significant effects on the amounts
recognised in the financial statements.
(ii)
Key Sources of Estimation Uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the
reporting date that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
(a)
Impairment of Investment in Subsidiaries
The management determines whether the carrying amounts of its investments are impaired at
reporting date. This involves measuring the recoverable amounts which includes fair value less
costs to sell and valuation techniques. Valuation techniques include amongst others, discounted
cash flows analysis and in some cases, based on current market indicators and estimates that
provide reasonable approximations to the detailed computation or based on total shareholders’
equity of the subsidiaries.
The carrying amount of investment in subsidiaries as at 30 April 2014 were RM31,683,419
(2013: RM31,683,419). Further details are disclosed in Note 6 to the financial statements. Based
on management’s review, no further adjustment for impairment is required for the investment in
subsidiaries by the Company during the current year.
(b)
Impairment of Investment in Associate
The management determines whether the carrying amounts of its investments are impaired at
reporting date. This involves measuring the recoverable amounts which includes fair value less
costs to sell and valuation techniques. Valuation techniques include amongst others, discounted
cash flows analysis and in some cases, based on current market indicators and estimates that
provide reasonable approximations to the detailed computation or based on total shareholders’
equity of the associate.
The carrying amount of investment in associate as at 30 April 2014 was RMNil (2013: RMNil).
Further details are disclosed in Note 7 to the financial statements. Based on management
review, no further adjustment for impairment is required for the investment in associate by the
Company during the current year.
(c)
Impairment of Loans and Receivables
The Group assesses at each reporting date whether there is any objective evidence that a
financial asset is impaired. To determine whether there is objective evidence of impairment, the
Group considers factors such as the probability of insolvency or significant financial difficulties
of the debtor and default or significant delay in payments.
Where there is objective evidence of impairment, the amount and timing of future cash flows are
estimated based on historical loss experience for assets with similar credit risk characteristics.
The carrying amount of the Group’s loans and receivables’ at the reporting date is disclosed in
Note 12 to the financial statements.
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
67
30 April 2014 (cont’d)
2.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.26 Significant Accounting Judgements and Estimates (cont’d)
(ii)
Key Sources of Estimation Uncertainty (cont’d)
(d)
Useful Lives of Property, Plant and Equipment (cont’d)
The cost of property, plant and equipment is depreciated on a straight-line basis over the
assets’ estimated economic useful lives. Management estimates the useful lives of these plant
and equipment to be within 10 to 15 years. These are common life expectancies applied in the
manufacturing industry. Changes in the expected level of usage and technological developments
could impact the economic useful lives and the residual values of these assets, therefore future
depreciation charges could be revised. The carrying amount of the Group’s property, plant and
equipment at the reporting date is disclosed in Note 3 to the financial statements.
(e)
Deferred Tax Assets
Deferred tax assets are recognised for all unused tax losses, unabsorbed capital allowances,
unutilised reinvestment allowances and other deductible temporary differences to the extent
that it is probable that taxable profit will be available against which the losses, capital allowances
and provisions can be utilised. Significant management judgement is required to determine the
amount of deferred tax assets that can be recognised, based upon the likely timing and level of
future taxable profits together with future tax planning strategies.
(f)
Income Taxes
There are certain transactions and computations for which the ultimate tax determination may
be different from the initial estimate. The Group and the Company recognise tax liabilities based
on its understanding of the prevailing tax laws and estimates of whether such taxes will be due
in the ordinary course of business. Where the final outcome of these matters is different from the
amounts that were initially recognised, such difference will impact the income tax and deferred
tax provisions in the year in which such determination is made.
(g)
Write-down of Inventories
Reviews are made periodically by management on damaged, obsolete and slow-moving
inventories. These reviews require judgement and estimates. Possible changes in these
estimates could result in revisions to the valuation of inventories.
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
68
30 April 2014 (cont’d)
3.
PROPERTY, PLANT AND EQUIPMENT
As at
1.5.2013
RM’000
Addition/
Transfer
RM’000
Disposal/
Exchange
Write off Revaluation differences
RM’000
RM’000
RM’000
As at
30.4.2014
RM’000
5,437
31,536
164,686
5,868
(1,790)
12,563
(532)
-
594
3,860
18,000
31,598
172,624
10,150
2,041
17,052
5,771
412
316
1,836
61
(230)
(58)
-
-
178
70
601
98
10,510
2,369
19,489
5,930
236,673
8,493
(2,078)
12,031
5,401
260,520
As at
1.5.2013
RM'000
Charge for
the year
RM'000
Disposal/
Exchange
Exchange
Write off differences differences
RM'000
RM'000
RM'000
As at
30.4.2014
RM'000
6,738
80,375
665
8,665
(676)
-
105
1,667
7,508
90,031
8,580
1,726
11,080
4,665
343
187
1,929
247
(227)
(50)
-
-
182
49
409
107
8,878
1,912
13,418
5,019
113,164
12,036
(953)
-
2,519
126,766
As at
1.5.2013
RM'000
Impairment
loss for
the year
RM'000
Disposal/
Exchange
Write off Revaluation differences
RM'000
RM'000
RM'000
As at
30.4.2014
RM'000
-
10,997
-
-
-
10,997
-
2
1,513
-
-
-
-
2
1,513
-
-
12,512
-
-
-
12,512
Group
2014
COST
Freehold land
Buildings
Plant and machinery
Office equipment, furniture
and fittings
Motor vehicles
Mould and die cutters
Renovation
ACCUMULATED
DEPRECIATION
Freehold land
Buildings
Plant and machinery
Office equipment, furniture
and fittings
Motor vehicles
Mould and die cutters
Renovation
ACCUMULATED
IMPAIRMENT
Freehold land
Buildings
Plant and machinery
Office equipment, furniture
and fittings
Motor vehicles
Mould and die cutters
Renovation
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
69
30 April 2014 (cont’d)
3.
PROPERTY, PLANT AND EQUIPMENT (CONT’D)
As at
30.4.2014
RM’000
Net Book Value
Freehold land
Buildings
Plant and machinery
Office equipment, furniture
and fittings
Motor vehicles
Mould and die cutters
Renovation
18,000
24,090
71,596
1,630
457
4,558
911
121,242
As at
1.5.2012
RM’000
Addition/
Transfer
RM’000
Disposal/
Exchange
Write off differences
RM’000
RM’000
As at
30.4.2013
RM’000
5,437
32,599
157,455
9,757
1,777
15,674
5,811
8,886
381
428
1,098
52
(1,355)
(4,402)
(176)
(195)
(205)
292
2,747
188
31
280
113
5,437
31,536
164,686
10,150
2,041
17,052
5,771
228,510
10,845
(6,333)
3,651
236,673
As at
1.5.2012
RM’000
Charge for
the year
RM’000
Disposal/
Exchange
Write off differences
RM’000
RM’000
As at
30.4.2013
RM’000
6,520
72,971
8,243
1,719
9,184
4,460
658
8,194
367
174
1,715
309
(487)
(1,930)
(174)
(195)
(187)
47
1,140
144
28
181
83
6,738
80,375
8,580
1,726
11,080
4,665
103,097
11,417
(2,973)
1,623
113,164
2013
COST
Freehold land
Buildings
Plant and machinery
Office equipment, furniture and fittings
Motor vehicles
Mould and die cutters
Renovation
ACCUMULATED DEPRECIATION
Freehold land
Buildings
Plant and machinery
Office equipment, furniture and fittings
Motor vehicles
Mould and die cutters
Renovation
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
70
30 April 2014 (cont’d)
3.
PROPERTY, PLANT AND EQUIPMENT (CONT’D)
As at
30.4.2013
RM’000
Net Book Value
Freehold land
Buildings
Plant and machinery
Office equipment, furniture and fittings
Motor vehicles
Mould and die cutters
Renovation
5,437
24,798
84,311
1,570
315
5,972
1,106
123,509
The net book value of the building of a subsidiary, Guangzhou Komark Labels & Labelling Co., Ltd. amounting to
RM1,153,000 (2013: RM1,127,000) is built on a piece of land belonging to and leased from the authority of the
People’s Republic of China. The lease term is due to expire in the year 2044.
The net book value of plant and machinery and motor vehicles of the Group acquired under hire purchase
agreements amounted to RM13,782,000 (2013: RM14,552,000) and RM367,000 (2013: RMNil) respectively.
Freehold and leasehold land and buildings and plant and machinery of the Group amounting to RM34,603,000
(2013: RM22,982,000) and RM24,930,000 (2013: RM23,582,000) respectively are charged to licensed banks and
financial institutions as security for borrowings granted to certain subsidiaries (Note 18 to the financial statements).
4.
PREPAID LEASE PAYMENTS ON LAND
Group
2014
RM’000
2013
RM’000
Cost
At 1 May
Exchange difference
2,013
115
1,956
57
At 30 April
2,128
2,013
Accumulated depreciation
At 1 May
Charge for the year
Exchange difference
(307)
(47)
(16)
(255)
(44)
(8)
At 30 April
(370)
(307)
1,758
1,706
Net carrying amount
Leasehold land of the Group has been pledged as security to financial institution for banking facilities granted to
the Group.
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
71
30 April 2014 (cont’d)
5.
INVESTMENT PROPERTY
Group
6.
2014
RM’000
2013
RM’000
Cost
At 1 May
Disposal during the year
-
337
(337)
At 30 April
-
-
Accumulated depreciation
At 1 May
Disposal during the year
-
147
(147)
At 30 April
-
-
Net carrying amount
-
-
INVESTMENTS IN SUBSIDIARIES
Company
Unquoted shares, at cost
2014
RM’000
2013
RM’000
31,683
31,683
The list of subsidiaries, their places of incorporation, their principal activities and the effective interest of the
Company are as follows:
Name of Company
Country of
incorporation Principal activities
Effective
equity interest
2014
2013
%
%
General Labels & Labelling
(M) Sdn. Bhd.
Malaysia
Manufacturing of self adhesive labels
and stickers, and labelling machines and
trading of related products
100
100
Komark International (M)
Sdn. Bhd.
Malaysia
Manufacturing of self adhesive labels
100
100
*#± General Labels & Labelling
(Penang) Sdn. Bhd.
Malaysia
Manufacturing of self adhesive labels and
stickers
100
100
# General Labels & Labelling
(Ipoh) Sdn. Bhd.
Malaysia
Manufacturing of self adhesive labels and
stickers, and trading of related products
100
100
Investment holding
100
100
Dormant
100
100
^ Komark Investment
Holdings Ltd.
British Virgin
Island
^ Komark Australasia
Pty. Ltd.
Australia
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
72
30 April 2014 (cont’d)
6.
INVESTMENTS IN SUBSIDIARIES (cont’d)
The subsidiaries of General Labels & Labelling (M) Sdn. Bhd. are as follows:
Name of Company
General Labels & Labelling
(JB) Sdn. Bhd.
Name of Company
Country of
incorporation Principal activities
Malaysia
Manufacturing of self adhesive labels and
stickers, and trading of related products
Country of
incorporation Principal activities
* General Labels &
Labelling Pte Ltd
Singapore
* Komark (Thailand)
Company Limited
Thailand
Effective
equity interest
2014
2013
%
%
100
100
Effective
equity interest
2014
2013
%
%
Printer of labels and stickers
100
100
Manufacturing and selling of self
adhesive labels
100
100
The subsidiaries of Komark Investment Holdings Ltd. are as follows:
Name of Company
Country of
incorporation Principal activities
Effective
equity interest
2014
2013
%
%
* Shanghai Komark Labels &
Labelling Co., Ltd.
People’s
Republic of
China
Manufacturing and selling of self
adhesive labels
100
100
* Guangzhou Komark Labels
& Labelling Co., Ltd.
People’s
Republic of
China
Manufacturing and selling of self
adhesive labels
100
100
Hong Kong
Dormant
100
100
*# Komark Hong Kong
Company Limited
The subsidiary of Komark International (M) Sdn. Bhd. is as follows:
Name of Company
*@ PT Komark Labels and
Labelling Indonesia
KOM A R KCO R P B E R HAD
Country of
incorporation Principal activities
Indonesia
Manufacturing and trading of self
adhesive labels
Effective
equity interest
2014
2013
%
%
100
100
NOTES TO THE FINANCIAL STATEMENTS
73
30 April 2014 (cont’d)
6.
INVESTMENTS IN SUBSIDIARIES (CONT’D)
* Audited by another firm of auditors.
^ Consolidated based on management financial statements as at 30 April 2014 in which we have reviewed for
consolidation purposes.
# Subsidiary with auditors’ report that is not qualified which contained an emphasis of matter on its going concern,
which is dependent upon continuous financial support of its holding or ultimate holding company.
@ Subsidiary with auditors’ report that is qualified on non-adoption of certain accounting standards. The directors
are of the opinion that the effects of the adjustments, if any, on the financial statements of the subsidiary, have
no material financial impact to the Group.
± Subsidiary with auditors’ report that contained disclaimer of opinion due to insufficient appropriate audit
evidence obtainable on certain receivables and payables. The directors are of the opinion that the effects of
the adjustments, if any, on the financial statements of the subsidiary, have no material financial impact to the
Group.
7.
INVESTMENT IN ASSOCIATE
Group
Unquoted shares, at cost
Share of post acquisition results
Represented by:
Group’s share of net assets
2014
RM’000
2013
RM’000
2
(2)
2
(2)
-
-
-
-
The shares of the associate are held directly by one of the subsidiaries, namely Komark International (M) Sdn. Bhd.
Details of the associate are as follows:
Name of Company
Country of
incorporation
* Komark Enterprise Co. Ltd. Thailand
Effective
equity interest
2014
2013
%
%
Principal activities
49
Trading of self adhesive labels and
related tools and equipment
49
* Audited by another firm of auditors.
8.
OTHER INVESTMENT
Group
2014
RM’000
2013
RM’000
Quoted shares in Malaysia, at cost
-
4
Quoted shares in Malaysia, at market value
-
3
Available-for-sale financial assets:
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
74
30 April 2014 (cont’d)
9.
DEVELOPMENT EXPENDITURE
Group
2014
RM’000
2013
RM’000
Cost
At 1 May
Addition during the year
5,747
121
5,574
173
At 30 April
5,868
5,747
Accumulated amortisation
At 1 May
Charge for the year
3,992
805
3,178
814
At 30 April
4,797
3,992
Accumulated impairment
At 1 May
Impairment loss for the year
1,071
-
At 30 April
1,071
-
-
1,755
Automatic labelling machineries
Net carrying amount
Group
2014
RM’000
2013
RM’000
Cost
At 1 May
Exchange difference
3,779
216
3,673
106
At 30 April
3,995
3,779
Accumulated amortisation
At 1 May
Charge for the year
Exchange difference
3,563
203
3,411
52
100
At 30 April
3,766
3,563
Net carrying amount
229
216
Total net carrying amount
229
1,971
Roto-gravure/offset combination labels press project
The roto-gravure/offset combination labels press commenced its commercial production in December 2002. The
amortisation represents the amount charged from the date of commercial production.
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
75
30 April 2014 (cont’d)
10.
GOODWILL ON CONSOLIDATION
Group
2014
RM’000
2013
RM’000
Amount recognised on acquisitions
Accumulated amortisation
2,413
(663)
2,413
(663)
Net book value
1,750
1,750
Goodwill on consolidation
Negative goodwill amounting to RM7,195,813 has been fully amortised and recognised in the statement of profit
or loss and other comprehensive income in the previous financial year. Goodwill on consolidation is no longer
amortised since financial year 2007, instead it is subject to impairment. There is no impairment as at the end of
current financial year.
11.INVENTORIES
Group
12.
2014
RM’000
2013
RM’000
Raw materials
Work-in-progress
Manufactured inventories
Others
6,010
2,258
20,979
3,601
10,100
3,587
23,458
3,735
Less: Allowance for slow-moving manufactured inventories
32,848
(3,919)
40,880
(3,103)
28,929
37,777
TRADE AND OTHER RECEIVABLES
Group
2013
RM’000
2014
RM’000
2013
RM’000
Trade receivables
- Third parties
- Associated company
36,534
1,573
38,636
-
-
-
Less: Allowance for impairment
38,107
(3,050)
38,636
(2,002)
-
-
Trade receivables, net
35,057
36,634
-
-
4,817
5,846
6
42
39,874
42,480
6
42
Other receivables, deposits and
prepayments
Company
2014
RM’000
Trade receivables are non-interest bearing and are generally on 1 to 120 (2013: 1 to 120) days term. They are
recognised at their original invoice amounts which represent their fair values on initial recognition.
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
76
30 April 2014 (cont’d)
12.
TRADE AND OTHER RECEIVABLES (cont’d)
Ageing analysis of trade receivables
The ageing analysis of the Group’s trade receivables is as follows:
Group
1 - 90 days
91 - 180 days
181 days and above
Impaired
2014
RM ‘000
2013
RM ‘000
33,026
1,063
968
35,057
3,050
32,483
1,668
2,483
36,634
2,002
38,107
38,636
Receivables that are not impaired
Trade receivables that are not impaired are creditworthy debtors with good payment records with the Group. None
of the Group’s trade receivables that are not impaired have been renegotiated during the year.
Receivables that are impaired
The Group’s trade receivables that are impaired at the reporting date and the movement of the allowance accounts
used to record the impairment are as follows:
Group
Trade receivables - nominal amounts
Less: Allowance for impairment losses
2014
RM ‘000
2013
RM ‘000
3,050
(3,050)
2,002
(2,002)
-
-
Movements in allowance accounts:
Group
2014
RM ‘000
2013
RM ‘000
At 1 May
Charge for the year
Write-off against allowance accounts
Exchange difference
2,002
1,012
(4)
40
1,484
518
-
At 30 April
3,050
2,002
Trade receivables that are collectively and individually determined to be impaired at the reporting date mainly relate
to balances which have been significantly long outstanding. These receivables are not secured by any collateral or
credit enhancements.
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
77
30 April 2014 (cont’d)
13.
AMOUNT DUE FROM/(TO) RELATED COMPANIES/ASSOCIATE COMPANY
Company
Amount due from related companies
Less: Allowance for impairment
2014
RM’000
2013
RM’000
42,971
(8)
42,362
-
42,963
42,362
These balances are non-trade in nature, unsecured, non-interest bearing and are repayable on demand.
14.
CASH AND BANK BALANCES
Group
Deposits with licensed banks
Cash in hand and at banks
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
2,843
6,643
2,741
6,192
-
3
9,486
8,933
-
3
Included in deposits placed with licensed banks of the Group is RM2,165,657 (2013: RM2,740,738) pledged as
security for borrowings granted to subsidiaries (Note 18 to the financial statements).
During the financial year, the fixed deposits earned interest rates ranging from 0.70% - 3.20% per annum and have
average maturities of 7 days - 36 months.
15.
SHARE CAPITAL
Group and Company
Number of ordinary
shares
Amount
2014
2013
2014
2013
RM’000
RM’000
Ordinary shares of RM1 each
Authorised
At 1 May/30 April
500,000,000
500,000,000
500,000
500,000
Issued and fully paid
At 1 May/30 April
81,275,010
81,275,010
81,275
81,275
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one
vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual
assets.
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
78
30 April 2014 (cont’d)
16. TREASURY SHARES
Group and Company
2014
2013
Number of ordinary shares of RM1 each
At 1 May
Repurchased during the year
Sold during the year
At 30 April
Ordinary shares of RM1 each
At 1 May
Repurchased during the year
Sold during the year
At 30 April
1,000
-
1,538,000
2,000
(1,540,000)
1,000
-
2014
RM’000
2013
RM’000
-#
-
437
-#
(437)
-#
-
# Amount less than RM1,000.
During the financial year, the Company repurchased 1,000 (2013: 2,000) ordinary shares from the open market at
an average price of RM0.66 (2013: RM0.33) per share. The total consideration paid for the repurchase was RM656
(2013: RM657). The repurchased transactions were financed by internally generated funds.
17.RESERVES
Group
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
General reserve
At 1 May
Appropriation of profit
1,703
886
1,703
-
-
-
At 30 April
2,589
1,703
-
-
Translation reserve
At 1 May
Foreign currency translation
4,525
(488)
3,730
795
-
-
At 30 April
4,037
4,525
-
-
Revaluation reserve
At 1 May
Surplus on revaluation
12,031
-
-
-
At 30 April
12,031
-
-
-
Total non-distributable reserves
18,657
6,228
-
-
Non-distributable
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
79
30 April 2014 (cont’d)
17.
RESERVES (cont’d)
Group
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
(Accumulated loss)/Retained profit
At 1 May
(Loss)/profit for the year
Appropriation of profit
Dividend
13,511
(28,909)
(886)
(406)
18,342
(4,831)
-
(27,837)
1,169
(406)
(28,357)
520
-
At 30 April
(16,690)
13,511
(27,074)
(27,837)
1,967
19,739
(27,074)
(27,837)
Distributable
Total Reserves
a.
General Reserve
Subsidiaries in the People’s Republic of China (“PRC”) are required to appropriate 10% of their after-tax
profit (after offsetting prior year losses), based on the respective PRC statutory financial statements, to
a general reserve fund until the balance of the fund reaches 50% of the Company’s registered capital.
Thereafter, any further appropriation can be made at the Directors’ discretion.
The general reserve fund can be utilised to offset prior year losses, or be utilised for the issuance of bonus
shares on the condition that the general reserve fund shall be maintained at a minimum of 25% of the
registered capital after such issuance.
In accordance with the relevant rules and regulations in the PRC, the subsidiaries may also appropriate
a portion of its after-tax profit (after offsetting prior year losses), based on the PRC statutory financial
statements, to an enterprise expansion fund and a staff and workers’ bonus and welfare fund at the Director’s
discretion.
b.
Translation Reserve
This represents foreign currency exchange differences arising from the translation of the financial statements
of subsidiaries which are denominated in currency other than the presentation currency of the Company,
Ringgit Malaysia.
c.
Revaluation Reserve
This represents surplus on revaluation arising from the revaluation of certain freehold and leasehold land and
buildings of the Group by an independent valuer on 28 January 2014 and 16 May 2014.
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
80
30 April 2014 (cont’d)
17.
RESERVES (cont’d)
d.
Additional Disclosure Of Realised And Unrealised Profits Or Losses
Group
Total (accumulated loss)/retained
profit of the Company and its
subsidiary companies
- Realised
- Unrealised
Total share of accumulated loss
from associated company
- Realised
- Unrealised
Less: Consolidation adjustments
Total Group/Company (accumulated
loss)/retained profit as per
consolidated accounts
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
(14,230)
(546)
22,740
(2,774)
(27,074)
-
(27,837)
-
(14,776)
19,966
(27,074)
(27,837)
(2)
-
(2)
-
-
-
(14,778)
(1,912)
19,964
(6,453)
(27,074)
-
(27,837)
-
(16,690)
13,511
(27,074)
(27,837)
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
7,764
32
13,891
5,221
1,427
1,565
22,233
5,346
12,628
2,398
14,188
1,317
3,506
22,956
4,068
3,055
-
3,158
-
57,479
61,061
3,055
3,158
10,691
4,149
2,148
1,100
5,629
-
-
14,840
8,877
-
-
72,319
69,938
3,055
3,158
18.BORROWINGS
Group
Current
Bank overdrafts
Bankers’ acceptance
Term loans
Short-term loans
-
secured
unsecured
secured
unsecured
secured
secured
unsecured
Hire purchase liabilities
Non-current
Term loans
Hire purchase liabilities
KOM A R KCO R P B E R HAD
- secured
- unsecured
Company
NOTES TO THE FINANCIAL STATEMENTS
81
30 April 2014 (cont’d)
18.
BORROWINGS (cont’d)
a.
Term loans and repayment schedule
(i)
Secured term loans
Secured term loans consist of 7 (2013: 3) term loans. Their repayment schedule is as follows:
Secured term loan of RM3,506,000 (2013: RM4,606,000) is repayable by 48 consecutive installments
commencing February 2011. This term loan is obtained by a local subsidiary from a foreign bank.
Rescheduled on April 2012 and repayable by 71 consecutive installments commencing from April
2012.
Secured term loan of RM1,053,233 [equivalent to RMB2,019,000] (2013: RM1,491,896 [equivalent to
RMB 3,028,000]) is repayable by quarterly installments over a period of four (4) years commencing
February 2012. This term loan is obtained by a foreign subsidiary from a foreign bank.
Secured term loan of RM501,700 [equivalent to USD153,600] (2013: RM653,439 [equivalent to
USD211,250]) is repayable by quarterly installments over a period of three (3) years commencing April
2013. This term loan is obtained by a foreign subsidiary from a foreign bank.
Additional secured term loan of RM7,000,000 is repayable by monthly installments over a period of
twenty (20) years commencing September 2013. This term loan is obtained by a local subsidiary from
a local bank.
Secured short-term loans of RM1,565,100 [equivalent to RMB3,000,000], RM313,000 [equivalent to
RMB600,000] and RM11,477,400 [equivalent to RMB22,000,000] respectively are repayable by one
bullet payment after one (1) year from the date of first drawdown. These term loans are obtained by
two foreign subsidiaries from three foreign banks.
(ii)
Unsecured term loans
Unsecured term loans consist of 2 (2013: 3) term loans. Their repayment schedule is as follows:
Unsecured short-term loan of RM6,651,450 [equivalent to RMB13,500,000] as at the end of the
previous financial year has been fully settled during the current financial year.
Unsecured short-term loan of RM2,608,500 [equivalent to RMB5,000,000] is rollovered and repayable
within one (1) year commencing June 2013. This short-term loan is obtained by a foreign subsidiary
from a foreign bank.
Additional unsecured short-term loan of RM7,825,500 [equivalent to RMB15,000,000] is repayable
within one (1) year commencing February 2014. This short-term loan is obtained by a foreign subsidiary
from a local bank.
b.
Significant covenants for term loans granted to foreign subsidiaries
In connection with the borrowing facilities agreements and their supplemental agreements, foreign
subsidiaries have agreed on the following significant covenants with the lender:
i)
the ratio of the subsidiary’s total liabilities to net worth shall not exceed 200% at 30 April 2014 and at
any time thereafter without prior consent of the lenders;
ii)
not to make any advances, loans or grant any credit (save in the ordinary course of business) to or for
the benefit of any other persons (including any related company) or give any guarantee or indemnity
to or for the benefit of any other person or otherwise voluntarily assume any liability, whether actual or
contingent, in respect of any obligation of any other person without prior consent of the lenders. The
foreign subsidiary shall notify the lenders on the ratio of said guarantees, if any over its net tangible
assets; and
iii)
not to raise any additional financing from other financial institutions without prior consent from the
lenders and such consent shall not be unreasonably withheld.
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
82
30 April 2014 (cont’d)
18.
BORROWINGS (cont’d)
c.
Other borrowings
The Company’s bank overdrafts facilities are secured by legal charges over certain land and building of the
Group.
The Group’s other borrowings are secured by way of fixed charges over the freehold and leasehold land
and buildings of the respective subsidiaries, certain machinery of a subsidiary, corporate guarantees from
the Company, fixed deposits of the respective subsidiaries and jointly and severally guaranteed by certain
directors of the Company.
d.
Hire purchase liabilities
Group
2014
RM’000
2013
RM’000
5,967
4,515
4,807
5,973
Future finance charges on hire purchase
10,482
(987)
10,780
(1,083)
Present value of hire purchase payables
9,495
9,697
Current
Non-current
5,346
4,149
4,068
5,629
9,495
9,697
5,346
4,149
4,068
5,629
9,495
9,697
Minimum payment
- not later than one year
- later than one year and not later than five years
Present value of hire purchase payables
- not later than one year
- later than one year and not later than five years
19.
Hire purchase liabilities are subject to effective interest rates of 2.19% to 6.30% (2013: 2.19% to 6.30%).
DEFERRED TAX
Group
Deferred tax liabilities
At 1 May
Transferred (to)/from statement of profit or loss and
other comprehensive income (Note 23)
At 30 April
2014
RM’000
2013
RM’000
2,654
1,406
(2,100)
1,248
554
2,654
Deferred tax liabilities and assets are offset where there is a legally enforceable right to set off current tax assets
against current tax liabilities and where the deferred taxes relate to the same taxation authority and same entity.
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
83
30 April 2014 (cont’d)
19.
DEFERRED TAX (cont’d)
The net deferred tax liabilities/(assets) are in respect of the followings:
Group
Taxable temporary differences
Allowances and provisions
Unabsorbed capital allowances
Unutilised tax losses
Unutilised reinvestment allowances
Others
2014
RM’000
2013
RM’000
1,610
(524)
(281)
(251)
-
8,624
(1,459)
(1,777)
(535)
(2,584)
385
554
2,654
As at 30 April 2014, the amount of estimated net deferred tax assets of the Group measured at current tax rate
which are not recognised in the financial statements, are as follows:
Group
Temporary differences
Unabsorbed capital allowances
Unutilised tax losses
Unutilised reinvestment allowances
Allowance and provision
20.
2014
RM’000
2013
RM’000
(3,806)
2,962
3,288
8,865
(150)
(108)
144
220
-
11,159
256
TRADE AND OTHER PAYABLES
Group
Trade payables
Other payables, accrued expenses
and deposit received
Amount due to directors
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
23,091
19,307
-
-
5,776
1,896
8,172
2,251
277
25
485
75
30,763
29,730
302
560
(a)
Trade Payables
Trade payables are non-interest bearing and are normally settled on 1 to 120 (2013: 1 to 120) days term.
(b)
Other Payables
These amounts are non-interest bearing. Other payables are normally settled on an average term of 90
(2013: 90) days term.
(c)
Amount due to directors
These balances are unsecured, non-interest bearing and are repayable on demand.
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
84
30 April 2014 (cont’d)
21.
OTHER OPERATING INCOME
Group
Gain on disposal of investment property
Gain on disposal of property,
plant and equipment
Gain on foreign exchange
-Realised
-Unrealised
Government grant
Interest income
Rental income
Rental of equipment
Waiver of amount due from
related company
Write-back of allowance for
impairment of receivables
Others
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
-
53
-
-
13
903
309
17
72
129
(6)
3
201
116
98
17
-
-
-
4
-
-
-
425
146
161
-
-
1,112
1,549
-
-
22.
(LOSS)/PROFIT BEFORE TAXATION
The following items have been charged in arriving at (loss)/profit before tax:
Group
Allowance for impairment losses:
- Amount due from related company
- Development expenditure
- Property, plant and equipment
- Trade receivables
Allowance for slow-moving
manufactured inventories
Amount due from related company
written off
Amortisation of development expenditure
Amortisation of prepaid lease payments
on land
Auditors’ remuneration
- Current year’s provision
- Underprovision in prior years
Bad debts written off
Depreciation of property, plant
and equipment
Directors’ remuneration
- Fees - Directors of the Company
- Other emoluments
- Directors of the Company
- Other directors of subsidiary
Factory rental
Finance costs
- Bank overdrafts
- Hire purchase and finance lease
- Short term borrowings
- Term loans
- Others
KOM A R KCO R P B E R HAD
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
1,071
12,512
1,437
518
8
-
-
816
1,608
-
-
805
866
-
53
-
47
44
-
-
155
6
1,548
134
1
14
1
-
14
-
12,036
11,417
-
-
1,087
1,180
180
112
1,031
333
821
993
320
605
170
-
576
-
700
930
1,064
2,374
4
1,018
800
894
2,070
709
238
-
254
-
NOTES TO THE FINANCIAL STATEMENTS
85
30 April 2014 (cont’d)
22.
(LOSS)/PROFIT BEFORE TAXATION (CONT’D)
Group
Inventories written off
Loss on disposal of other investment
Loss on foreign exchange
- Realised
Property, plant and equipment written off
Rental of equipment
Rental of premises
Staff costs
- Salaries, allowances and others
- Retirement benefits
Unreconciled balances written off
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
1
1,805
-
-
-
506
4
299
321
28
504
-
-
21,282
1,154
687
17,429
1,232
794
289
35
160
355
103
-
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
23.TAXATION
Group
Malaysian income tax
- Current year
- Underprovision in prior year
Overseas income tax
- Current year
- Under/(over)provision in prior year
- Withholding tax
7
14
30
7
-
-
1,948
23
313
1,274
(1)
-
-
-
Deferred taxation (Note 19)
2,305
(2,100)
1,310
1,248
-
-
205
2,558
-
-
Income tax expense recognised in
statement of profit or loss and other
comprehensive income
Company
The reconciliation between tax expense and the product of accounting (loss)/profit multiplied by the applicable
corporate tax rate for the years ended 30 April is as follows:
Group
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
(28,704)
(2,273)
1,169
520
(7,176)
(568)
292
130
(8)
3,015
4,024
313
758
1,113
(455)
1,704
-
(292)
(130)
-
-
Underprovision of income tax in prior year
168
37
2,552
6
-
-
Tax expense
205
2,558
-
-
(Loss)/profit before taxation
Taxation at Malaysian statutory
tax rate of 25% (2013: 25%)
Effect of different tax rates in foreign
jurisdictions
Non-deductible expenses
Income not subject to tax
Deferred tax assets not recognised
Withholding tax
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
86
30 April 2014 (cont’d)
23.
TAXATION (CONT’D)
Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2013: 25%) of the estimated
assessable profit for the year.
Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
24.
LOSS PER SHARE
The basic loss per share is calculated by dividing loss for the year net of tax attributable to equity holders of the
Company by the weighted average number of ordinary shares of RM1 each in issue during the financial year
excluding the weighted average treasury shares held by the Company.
Group
2014
RM’000
2013
RM’000
Loss for the year attributable to equity holders of the Company
(28,909)
(4,831)
Number of ordinary shares in issue at 1 May
Effect of shares bought back and held as treasury shares
81,275
(1)
79,737
127
81,274
79,864
(35.6)
(6.0)
Basic loss per share (sen)
There was no dilution of earnings per share during the financial year.
25.DIVIDEND
Group and Company
Net per share
Amount
RM
RM’000
2014
First and final single-tier dividend in respect of:
- financial year ended 30 April 2013
0.005
406
26.
SEGMENT INFORMATION
Segmental information is presented in respect of the Group’s business and geographical segments based on the
Group’s management and internal reporting structure.
Inter-segment pricing is determined based on negotiated basis in the normal course of business.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated items mainly comprise of expenses and assets of the Company and
its dormant subsidiaries.
Business Segment
The Group comprises the following main business segments:
i)
Manufacturing of self adhesive labels and stickers and trading of related products; and
ii)
Manufacturing of automatic labelling machineries.
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
87
30 April 2014 (cont’d)
26.
SEGMENT INFORMATION (CONT’D)
Geographical segments
Manufacturing of automatic labelling machineries is principally operated in Malaysia. Other geographical areas are
involved in the manufacturing of self adhesive labels and stickers and trading of related products.
In presenting information on the basis of geographical segments, segment revenue and segment assets are based
on the geographical location of assets.
a.
Business Segment
Manufacturing
of self
adhesive
labels and Manufacturing
stickers and
of automatic
trading of
labelling
related product
machineries
RM’000
RM’000
Elimination
RM’000
Consolidation
RM’000
2014
Revenue
External sales
Inter-segment sales
141,056
-
749
945
(945)
141,805
-
Total revenue
141,056
1,694
(945)
141,805
(11,992)
(10,311)
-
(22,303)
(1,458)
129
Results
Segment results
Unallocated expenses
Interest income
Loss from operations
Finance costs
(23,632)
(5,072)
Loss before taxation
Taxation
(28,704)
(205)
Loss for the year
Minority interest
Loss attributable to equity holders
of the Company
(28,909)
-
Assets
Segment assets
Unallocated assets
(28,909)
176,754
27,350
-
204,209
Total Assets
Liabilities
Segment liabilities
Unallocated liabilities
101,929
1,153
-
103,082
2,251
105,333
Total Liabilities
Other Information
Capital expenditure
Depreciation and amortisation
204,104
105
(11,117)
(11,846)
(121)
(1,042)
2,624
(8,614)
(12,888)
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
88
30 April 2014 (cont’d)
26.
SEGMENT INFORMATION (CONT’D)
a.
Business Segment (cont’d)
Manufacturing
of self
adhesive
labels and Manufacturing
stickers and
of automatic
trading of
labelling
related product
machineries
RM’000
RM’000
Elimination
RM’000
Consolidation
RM’000
2013
Revenue
External sales
Inter-segment sales
135,497
-
540
1,433
(1,433)
136,037
-
Total revenue
135,497
1,973
(1,433)
136,037
4,520
306
-
4,826
(1,706)
98
Results
Segment results
Unallocated expenses
Interest income
Profit from operations
Finance costs
3,218
(5,491)
Loss before taxation
Taxation
(2,273)
(2,558)
Loss for the year
Minority interest
Loss attributable to equity holders
of the Company
(4,831)
-
Assets
Segment assets
Unallocated assets
(4,831)
193,616
26,707
-
220,447
Total Assets
Liabilities
Segment liabilities
Unallocated liabilities
97,973
1,695
KOM A R KCO R P B E R HAD
-
99,668
4,131
103,799
Total Liabilities
Other Information
Capital expenditure
Depreciation and amortisation
220,323
124
(10,595)
(11,274)
(423)
(1,053)
(11,018)
(12,327)
26.
b.
Capital expenditure
Segment assets by location
of assets
Revenue from external customers
by location of customers
2013
Capital expenditure
Segment assets by location
of assets
Revenue from external customers
by location of customers
2014
Geographical Segment
SEGMENT INFORMATION (CONT’D)
China
RM’000
Malaysia
RM’000
108,090
(6,296)
203,727
(4,237)
69,718
(6,774)
(1,745)
45,589
113,149
82,610
China
RM’000
186,480
33,780
Malaysia
RM’000
(251)
4,170
8,517
Singapore
RM’000
(304)
4,554
8,605
Singapore
RM’000
(234)
20,971
19,131
Thailand
RM’000
(2,095)
22,525
21,251
Thailand
RM’000
-
29,969
2,351
Others
RM’000
(320)
30,696
3,746
Others
RM’000
-
(146,480)
(9,269)
Elimination
RM’000
2,624
(153,195)
(8,187)
Elimination
RM’000
(11,018)
220,447
136,037
Consolidation
RM’000
(8,614)
204,209
141,805
Consolidation
RM’000
NOTES TO THE FINANCIAL STATEMENTS
30 April 2014 (cont’d)
89
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
90
30 April 2014 (cont’d)
27.
CONTINGENT LIABILITIES
Company
Corporate guarantees in respect of credit facilities granted to subsidiaries
28.
SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Controlling related party relationships are as follows:
i)
ii)
2014
RM’000
2013
RM’000
57,441
75,000
Its subsidiaries as disclosed in Note 6 to the financial statements.
A director of the Company, Koh Hong Muan @ Koh Gak Siong.
In addition to the related party information disclosed elsewhere in the financial statements, the following significant
transactions between the Group and related parties took place at terms agreed between the parties during the
financial year:
Group
Holding company
Komarkcorp Berhad
- Dividend income
Subsidiaries
Komark International (M) Sdn. Bhd.
- Sales
General Labels & Labelling (M)
Sdn. Bhd.
- Sales
- Rental income, premises
General Labels & Labelling (JB)
Sdn. Bhd.
- Sales
General Labels & Labelling (Penang)
Sdn. Bhd.
- Sales
Guangzhou Komark Labels & Labelling
Co., Ltd.
- Sales
Shanghai Komark Labels & Labelling
Co., Ltd.
- Sales
General Labels & Labelling Pte Ltd
- Sales
General Labels & Labelling
(Ipoh) Sdn. Bhd.
- Sales
Komark (Thailand) Company Limited
- Sales
Komark Investment Holdings Ltd.
- Dividend income
KOM A R KCO R P B E R HAD
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
2,865
2,094
2,865
2,094
159
274
-
-
2,157
-
2,663
60
-
-
3,924
3,959
-
-
-
931
-
-
1,184
1,544
-
-
540
520
-
-
28
35
-
-
51
159
-
-
145
12
-
-
3,139
1,212
-
-
NOTES TO THE FINANCIAL STATEMENTS
91
30 April 2014 (cont’d)
29.
OPERATING LEASE COMMITMENTS
The future aggregate minimum lease payments under non-cancellable operating leases contracted for at the
reporting date but not recognised as liabilities are as follows:
Group
Not later than 1 year
Later than 1 year but not later than 5 years
2014
RM’000
2013
RM’000
159
212
53
-
371
53
30.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Determination of Fair Value
Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation
of fair value
The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are
reasonable approximation of fair value:
Note
Trade and other receivables
Deposits with licensed banks
Trade and other payables
Borrowings (current)
12
14
20
18
The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due
to their short-term nature or that they are re-priced to market interest rates on or near the reporting date.
The carrying amount of the current portion of borrowings is reasonable approximation of fair value due to the
insignificant impact of discounting.
Finance lease obligations
The fair values of these financial instruments are estimated by discounting expected future cash flows at market
incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.
Quoted equity instruments
The fair value of these financial assets is determined by reference to the quoted closing bid price at the reporting
date.
31.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group and the Company are exposed to financial risks arising from their operations and the use of financial
instruments. The key financial risks include credit risk, liquidity risk, interest rate risk and foreign currency risk.
The Board of Directors reviews and agrees policies and procedures for the management of these risks. The Audit
Committee provides independent oversight to the effectiveness of the risk management process.
It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall
be undertaken.
The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned
financial risks and the objectives, policies and processes for the management of these risks.
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
92
30 April 2014 (cont’d)
31.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)
(a)
Credit Risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default
on its obligations. The Group’s exposure to credit risk arises primarily from trade and other receivables.
For other financial assets (including cash and bank balances), the Group minimise credit risk by dealing
exclusively with high credit rating counterparties.
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased
credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s
policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In
addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure
to bad debts is not significant.
Exposure to credit risk
At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by
the carrying amount of each class of financial assets recognised in the statements of financial position.
Information regarding credit enhancements for trade and other receivables is disclosed in Note 12 to the
financial statements.
Credit risk concentration profile
The Group determines concentration of credit risk by monitoring the business segment of its trade receivables
on an ongoing basis.
At the reporting date, there was no significant concentration of credit risk for the Group and the Company
other than those receivables as analysed in Note 12 to the financial statements.
Financial assets that are not impaired
Information regarding trade and other receivables that are not impaired is disclosed in Note 12 to the financial
statements.
Financial assets that are impaired
Information regarding financial assets that are impaired is disclosed in Note 12 to the financial statements.
(b)
Liquidity Risk
Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations
due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from
mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective
is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit
facilities.
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
93
30 April 2014 (cont’d)
31.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)
(b)
Liquidity Risk (cont’d)
Analysis of Financial Instruments by Remaining Contractual Maturities
The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting
date based on contractual undiscounted repayment obligations.
<---------------------------------30.4.2014----------------------------->
On demand or
One to
Over
within one year
five years
five years
Total
RM’000
RM’000
RM’000
RM’000
Group
Financial Liabilities
Trade and other payables
Borrowings
30,763
57,479
14,840
-
30,763
72,319
<---------------------------------30.4.2014----------------------------->
On demand or
One to
Over
within one year
five years
five years
Total
RM’000
RM’000
RM’000
RM’000
Company
Financial Liabilities
Trade and other payables
Borrowings
302
3,055
-
-
302
3,055
<---------------------------------30.4.2013----------------------------->
On demand or
One to
Over
within one year
five years
five years
Total
RM’000
RM’000
RM’000
RM’000
Group
Financial Liabilities
Trade and other payables
Borrowings
29,730
61,061
8,877
-
29,730
69,938
<---------------------------------30.4.2013----------------------------->
On demand or
One to
Over
within one year
five years
five years
Total
RM’000
RM’000
RM’000
RM’000
Company
Financial Liabilities
Trade and other payables
Borrowings
560
3,158
-
-
560
3,158
(c)
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial
instruments will fluctuate because of changes in market interest rates.
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
94
30 April 2014 (cont’d)
31.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)
(c)
Interest Rate Risk (cont’d)
As the Group has no significant interest-bearing financial assets, the Group’s income and operating cash
flows are substantially independent of changes in market interest rates. The Group’s interest-bearing financial
assets are mainly short term in nature.
The Group’s interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates
expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to fair
value interest rate risk. The Group manages its interest rate exposure by maintaining a mix of fix and floating
rate of borrowings.
The following tables set out the carrying amounts, effective interest rates as at the reporting date and the
remaining maturities of the Group’s and the Company’s financial instruments that are exposed to interest
rate risk:
Effective
interest rate
%
Total
RM’000
Within 1 year
RM’000
Financial assets
Deposits with licensed banks
0.70 - 3.20
2,843
2,843
Financial liabilities
Bank overdrafts
Bankers’ acceptance
Term loans
Short-term loans
7.85 - 8.60
4.73 - 5.44
4.05 - 8.31
4.05 - 8.31
7,796
19,112
12,118
23,798
7,796
19,112
1,427
23,798
Financial assets
Deposits with licensed banks
2.25 - 3.25
2,741
2,741
Financial liabilities
Bank overdrafts
Bankers’ acceptance
Term loans
Short-term loans
7.85 - 8.60
4.50 - 5.50
4.05 - 8.60
4.05 - 8.31
15,026
15,505
6,754
22,956
15,026
15,505
3,506
22,956
7.85 - 8.60
3,055
3,055
8.60
3,158
3,158
Group
2014
2013
Company
2014
Financial liabilities
Bank overdrafts
2013
Financial liabilities
Bank overdrafts
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
95
30 April 2014 (cont’d)
31.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)
(d)
Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates.
The Group is exposed to transactional currency risk primarily through sales and purchases and borrowings
that are denominated in currencies other than the functional currency of the operations to which they relate.
The currencies giving rise to this risk are primarily United States Dollar, Renminbi Yuan and Singapore
Dollar and a small percentage in other foreign currencies. Foreign exchange exposures in these transactional
currencies other than functional currencies of the operating entities are kept to an acceptable level.
The net unhedged financial assets and liabilities of the Group that are not denominated in the functional
currency is as follows:
Group
2014
RM
2013
RM
984,872
(19,377,615)
1,467,061
(1,933,314)
836,329
3,412,476
(13,269,886)
1,593,635
(496,457)
579,405
(18,022,667)
(8,180,827)
Net unhedged financial (liabilities)/assets:
United States Dollar (“USD”)
Renminbi Yuan (“RMB”)
Singapore Dollar (“SGD”)
Thailand Baht (“THB”)
Indonesia Rupiah (“INR”)
Sensitivity Analysis for Foreign Currency Risk
The following table demonstrates the sensitivity of the Group’s profit to a reasonably possible change in the
USD, RMB, SGD, THB and INR exchange rates against the respective functional currencies of the Group
entities, with all other variables held constant.
Gain/(loss) in profit or loss
2014
2013
RM
RM
USD/RM
RMB/RM
SGD/RM
THB/RM
INR/RM
-
strengthened 10%
weakened 10%
strengthened 10%
weakened 10%
strengthened 10%
weakened 10%
strengthened 2%
weakened 2%
strengthened 2%
weakened 2%
98,487
(98,487)
1,937,762
(1,937,762)
146,706
(146,706)
38,666
(38,666)
16,727
(16,727)
341,248
(341,248)
1,326,989
(1,326,989)
159,364
(159,364)
9,929
(9,929)
11,588
(11,588)
(e)
Market Price Risk
Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will
fluctuate because of changes in market prices. The Group is exposed to market price risk arising from its
investment in quoted shares listed on the Bursa Malaysia Securities Berhad. These instruments are classified
as available-for-sale financial assets. The Group does not have exposure to commodity price risk.
The Group holds low volume of investments in equity instruments for the current and previous financial year.
Accordingly, performance of sensitivity analysis for market price risk is not meaningful to the Company.
ANNUA L R EPORT 2 0 1 4
NOTES TO THE FINANCIAL STATEMENTS
96
30 April 2014 (cont’d)
32.
CAPITAL MANAGEMENT
The primary objective of the Group’s capital management is to ensure that entities of the Group would be able to
continue as going concerns while maximising the return to shareholders through the optimisation of the debt and
equity ratios. The overall strategy of the Group remains unchanged from that in the previous financial year.
The Group monitors capital using gearing ratio, which is the amount of borrowings (Note 18 to the financial
statements) divided by equity attributable to owners of the Company. The Group’s policy is to keep the gearing
ratio within manageable levels. Capital represents equity attributable to the owners of the parent less the fair value
adjustment reserve.
Group
Borrowings
Total equity
Gearing ratio (times)
33.
34.
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
72,319
98,876
0.73
69,938
116,648
0.60
3,055
69,835
0.04
3,158
69,072
0.05
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
(a)
On 24 June 2013, the Company announced that it proposes to undertake a private placement of up to
10% of the issued and paid-up share capital of the Company to third party investors to be identified later
(“Proposed Private Placement”).
On 26 June 2013, the Company announced that the application pursuant to the Proposed Private Placement
has been submitted to Bursa Malaysia.
On 28 June 2013, the Company announced that Bursa Malaysia had resolved to approve the listing and
quotation for up to 8,127,501 new ordinary shares of RM1 each in the Company to be issued to the Private
Placement subject to certain conditions.
However, the Proposed Private Placement has lapsed upon 6 months expiry from approval on 27 December
2013.
(b)
On 25 April 2014, the Company announced that it proposes to undertake a renounceable two-call rights
issue of up to 27,091,670 Rights Shares at an indicative issue price of RM1 per Rights Share on the basis of
one (1) Rights Share for every three (3) existing shares held in the Company, together with up to 27,091,670
free detachable Warrants on the basis of one (1) free Warrant for every one (1) Rights Share subscribed for,
on an entitlement date to be determined later.
(c)
On 27 August 2013, a subsidiary company subscribed an additional 234,000 ordinary shares of THB100
each in Komark (Thailand) Company Limited for a total consideration of RM1,805,538. The equity interest of
the subsidiary company in Komark (Thailand) Company Limited remains at 100%.
EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE
(a)
On 24 June 2014, the Company announced that it proposes to undertake the following:
(i)
A par value reduction via the cancellation of RM0.75 of the par value of every existing ordinary share
of RM1 each in the issued and paid-up share capital of the Company pursuant to Section 64 of the Act
(“Proposed Par Value Reduction”); and
(ii)
A renounceable rights issue of up to 40,637,005 Rights Shares at an indicative issue price of RM0.30
per Rights Share on the basis of one (1) Rights Share for every two (2) existing shares held in the
Company, together with up to 40,637,005 free Warrants on the basis of one (1) free Warrant for every
one (1) Rights Share subscribed for, on an entitlement date to be determined later after the Proposed
Par Value Reduction (“Proposed Rights Issue with Warrants”).
On 1 August 2014, the Company announced that the listing application pursuant to the Proposed Rights
Issue with Warrants has been submitted to Bursa Malaysia on even date.
KOM A R KCO R P B E R HAD
NOTES TO THE FINANCIAL STATEMENTS
97
30 April 2014 (cont’d)
34.
EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE (cont’d)
On 15 August 2014, the Company announced that Bursa Malaysia had resolved to approve the following:
(i)
Admission to the Official List and the listing and quotation of up to 40,637,005 Warrants to be issued
pursuant to the Proposed Rights Issue with Warrants;
(ii)
Listing and quotation of up to 40,637,005 new shares of the Company to be issued pursuant to the
Proposed Rights Issue with Warrants; and
(iii)
Listing and quotation of up to 40,637,005 new shares of the Company to be issued pursuant to the
exercise of Warrants.
The above are subject to certain conditions.
(b)
On 1 July 2014, the Company announced that a valuation has been conducted on the Group’s investment
properties in Malaysia to reflect the fair value of the freehold land and buildings.
35.COMPARATIVES
Certain comparative figures have been restated to conform with current year’s presentation.
36.
AUTHORISATION FOR ISSUE
The financial statements of the Company for the financial year ended 30 April 2014 were authorised for issue in
accordance with a resolution of the Board of Directors on 28 August 2014.
ANNUA L R EPORT 2 0 1 4
ANALYSIS OF SHAREHOLDINGS
98
as at 29 August 2014
Authorised share capital
Issued and paid-up share capital
Class of shares
Voting rights
:
:
:
:
RM500,000,000.00
RM 81,275,010.00
Ordinary Shares of RM1.00 each
One vote per share
No. of
Shareholders/
Depositors
% of
Shareholders/
Depositors
No. of
Shares held*
% of
Issued Capital
1 - 99
100 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - 4,063,699
4,063,700 (5% of Issued Capital*) and above
442
520
1,813
480
47
3
13.37
15.73
54.86
14.52
1.42
0.09
15,930
431,020
8,241,999
14,247,421
32,379,851
25,957,789
0.02
0.53
10.14
17.53
39.84
31.94
TOTAL
3,305
100.00
81,274,010
100.00
Size of Holdings
Note:
* Excluding a total of 1,000 Ordinary Shares of RM1.00 each bought back by the Company and retained as treasury
shares.
SUBSTANTIAL SHAREHOLDERS AS AT 29 AUGUST 2014
Direct
No. of Shares
Capital (1)
% of Issued
Indirect
No. of Shares
Capital (1)
% of Issued
10,906,889
13.42
-
-
Koh Hong Muan @ Koh Gak Siong
6,519,900
8.02
10,906,889 (2)
13.42
Lim Pei Tiam @ Lim Ahat Kiat
9,938,800
12.23
-
-
Tan Kwe Hee
5,112,100
6.29
1,200,000 (3)
1.48
Aimas Enterprise Sdn Bhd
Notes:
Based on the issued and paid-up share capital less 1,000 Ordinary Shares of RM1.00 each bought back by the
Company and retained as treasury shares.
(2)
Deemed interested in the shares by virtue of Section 6A(4)(c) of the Companies Act, 1965 held through Aimas
Enterprise Sdn Bhd.
(3)
Deemed interested in the shares by virtue of Section 6A of the Companies Act, 1965, held by his spouse, Ho Say Lan
@ Hor Yoke Lan.
(1)
KOM A R KCO R P B E R HAD
ANALYSIS OF SHAREHOLDINGS (cont’d)
99
THIRTY LARGEST SHAREHOLDERS/DEPOSITORS AS AT 29 AUGUST 2014
Name of Shareholders/Depositors
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
EB Nominees (Tempatan) Sendirian Berhad
Pledged Securities Account for Aimas Enterprise Sdn Bhd (Jln Hang Lekiu)
Lim Pei Tiam @ Liam Ahat Kiat
Tan Kwe Hee
EB Nominees (Tempatan) Sendirian Berhad
Pledged Securities Account for Koh Hong Muan @ Koh Gak Siong (Jln Hang
Lekiu)
Lim Pay Kaon
Ang Jwee Tong
RHB Nominees (Tempatan) Sdn Bhd
OSK Capital Sdn Bhd for Koh Hong Muan @ Koh Gak Siong
Tan Chuan Ann
Razali Bin Daud
Myra Phung Pei Ling
Globalised Market Traders Pte Ltd
Ho Say Lan @ Hor Yoke Lan
CIMSEC Nominees (Tempatan) Sdn Bhd
CIMB Bank For Teh Swee Heng (MM1118)
George Lee Sang Kian
Ambank (M) Berhad
Pledged Securities Account for Wong Ah Yong (SMART)
Lim Ah Waa
Yeow Wah Chin
SJ Sec Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Lim Boon Hong (SMT)
Ang Kiam Chai
Lim Jia Chean
Wong Ah Yong
Hsu, Yao-Jih
Mayban Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Tan Swee Ung
Tan Kok Chiew
CIMSEC Nominees (Tempatan) Sdn Bhd
CIMB Bank for Wong Ah Yong (MY1278)
Tan Kuan Kae
Lim Kok Wah & Company Sdn Berhad
Gina Gan
Lee Yen Wei
Maybank Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Chiah Tho Wak
TOTAL
No. of
Shares
% of Issued
Capital *
10,906,889
13.42
9,938,800
5,112,100
3,680,000
12.23
6.29
4.53
3,309,000
3,293,500
2,839,900
4.07
4.05
3.49
1,980,800
1,700,800
1,665,600
1,590,400
1,200,000
1,100,100
2.44
2.09
2.05
1.96
1.48
1.35
820,700
553,333
1.01
0.68
550,000
520,000
500,033
0.68
0.64
0.62
500,000
500,000
463,866
400,000
344,000
0.62
0.62
0.57
0.49
0.42
309,100
300,000
0.38
0.37
288,000
280,000
251,600
250,000
235,000
0.35
0.34
0.31
0.31
0.29
55,383,521
68.14
Note:
* Based on the issued and paid-up share capital less 1,000 Ordinary Shares of RM1.00 each bought back by the
Company and retained as treasury shares.
ANNUA L R EPORT 2 0 1 4
ANALYSIS OF SHAREHOLDINGS (cont’d)
100
DIRECTORS’ INTERESTS AS AT 29 AUGUST 2014
No. of Shares
Director’s Name
Koh Hong Muan @ Koh Gak Siong (2)
Lim Pei Tiam @ Liam Ahat Kiat
Tan Kwe Hee
Dato’ Yeow Wah Chin
Koh Chee Mian (2)
Koh Chie Jooi (2)
Tan Sri Ahmad Bin Mohd Don
Datuk Ng Peng Hong @ Ng Peng Hay
Ihsan bin Ismail
Direct
Interest
% (1)
Indirect
Interest
% (1)
6,519,900
9,938,800
5,112,100
520,000
206,100
-
8.02
12.23
6.29
0.64
0.25
-
10,906,889 (3)
1,200,000 (4)
17,426,789 (5)
17,426,789 (5)
-
13.42
1.48
21.44
21.44
-
Notes:
(1)
Based on the issued and paid-up share capital less of 1,000 Ordinary Shares of RM1.00 each bought back by the
Company and retained as treasury shares.
By virtue of their interests in shares of the Company, the Directors are also deemed to have an interest in the shares
of all the subsidiaries of the Company to the extent the Company has an interest.
(2)
Deemed interested in the shares by virtue of Section 6A(4)(c) of the Companies Act, 1965, held through Aimas
Enterprise Sdn Bhd.
(3)
Deemed interested in the shares by virtue of Section 6A of the Companies Act, 1965, held by his spouse, Ho Say Lan
@ Hor Yoke Lan.
(4)
Deemed interested in the shares by virtue of Section 122A(1)(a) of the Companies Act, 1965, held through his parent,
namely Koh Hong Muan @ Koh Gak Siong.
(5)
KOM A R KCO R P B E R HAD
LIST OF PROPERTIES
101
Land Area/
Build Up
Area Sq. Ft
Age Of
Building
(Year)
Tenure
Net book
Date of last Value as at
revaluation/ 30.04.2014
acquisition RM (‘000)
Existing
usage
Expiry
Date
Factory Cum
Office
(HQ)
-
L-147,756
B-150,000
12
Freehold
14/2/2014
32,000
9/3/2094
L-3,640
B-2,640
18
Leasehold
16/5/2014
350
Factory Cum
Office
-
L-10,200
B-5,394
18
Freehold
16/5/2014
1,100
Title No: 229030
Second Floor,
Building 2,
Chunf Yie Road,
Scientech Park
Economic &
Technological
Development Zone,
Guongzhou
Factory Cum
Office
9/11/2044
L-16,501
B-17,416
16
Leasehold
8/5/1998
1,153
Title No: 026381
No.1, Baosheng Road,
Songjiang Industrial
Zone,
Songjiang, Shanghai
201600, China.
Factory Cum
Office
16/8/2052
L-89,222
B-76,751
8
Leasehold
19/4/2006
9,370
Owner
Title No/Location
Komark International
(M) Sdn. Bhd
GM No. 439, Lot 132,
Mukim of Kajang
District, Hulu Langat,
Selangor.
General Labels &
Labelling (M) Sdn. Bhd
H.S (D) KA 39335
Factory Cum
P.T.NO 131760/23
Office
Hala Rapat Baru 22,
Kawasan Perindustrian,
Ringan Kinta Jaya,
Perak
General Labels &
Labelling (M) Sdn. Bhd
Lot PTD 112290,
Mukin of Plentong
District, Johor Bahru.
Guongzhou Komark
Labels & Labelling
Co. Ltd.
Shanghai Komark
Labels & Labelling
Co. Ltd.
ANNUA L R EPORT 2 0 1 4
This page has been left blank intentionally
PROXY FORM
CDS account no. of authorised nominee
I/We
(name of shareholder, in capital letters)
(new)
NRIC No./Passport No./ID No./Company No.
(old)
(full address)
of
being a member of KOMARKCORP BERHAD, hereby appoint
(new)
(name of proxy as per NRIC/Passport, in capital letters) NRIC No./Passport No.
(old) of
(full address)
and/or failing him/her
(name of proxy as per NRIC/Passport, in capital letters)
NRIC No./Passport No.
(new)
(old)
(full address) and/or failing him/her *the
of
Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Eighteenth Annual General Meeting of the
Company to be held at Perdana Room, Bukit Jalil Golf & Country Resort, Jalan 3/155B, Bukit Jalil, 57000 Kuala Lumpur on
Tuesday, 28 October 2014 at 10.00 a.m. and at each and every adjournment thereof.
* Please delete the words “the Chairman of the Meeting” if you wish to appoint some other person to be your proxy.
My/our proxy is to vote as indicated below:
RESOLUTIONS
FOR
1.
Approval of Directors’ Fees and the payment thereof
Ordinary Resolution 1
2.
Re-election of Mr Koh Hong Muan @ Koh Gak Siong as Director
Ordinary Resolution 2
3.
Re-election of Mr Koh Chie Jooi as Director
Ordinary Resolution 3
4.
Re-appointment of Auditors
Ordinary Resolution 4
5.
Re-appointment of Mr Tan Kwe Hee as Director
Ordinary Resolution 5
6.
Proposed authority under Section 132D of the Companies Act, 1965
for the Directors to issue shares
Ordinary Resolution 6
AGAINST
(Please indicate with an “X” in the spaces provided how you wish your vote to be cast. If you do not do so, the proxy will vote
or abstain from voting at his discretion.)
Signature/Common Seal
For appointment of two proxies, percentage of
shareholdings to be represented by the proxies:
No. of shares
Number of shares held:
Date:
Proxy 1
Proxy 2
Total
Percentage
%
%
100%
Notes:
1.
A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead.
A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply
to the Company. There shall be no restriction as to the qualification of the proxy.
2.
A member may appoint not more than two (2) proxies to attend and vote at the same meeting. Where a member appoints two (2) proxies,
the appointments shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.
3.
Where a member of the Company is an exempt authorised nominee which holds shares in the Company for multiple beneficial owners in
one securities account (“omnibus account”) as defined under the Securities Industry (Central Depositories) Act, 1991, there is no limit to the
number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.
4.
The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the
appointor is a corporation, either under its Common Seal or under the hand of the attorney.
5.
The instrument appointing a proxy, with the power of attorney or other authority (if any) under which it is signed or a notarially certified or
office copy of such power or authority, must be deposited at the Registered Office of the Company at Lot 6.05, Level 6, KPMG Tower, 8
First Avenue, Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less than 48 hours before the time set for holding the
meeting or any adjournment thereof.
6. In respect of deposited securities, only members whose names appear on the Record of Depositors on 16 October 2014 (General Meeting
Record of Depositors) shall be eligible to attend, speak and/or vote at the meeting or appoint proxy(ies) to attend, speak and/or vote on his
behalf.
Then fold here
AFFIX
STAMP
HERE
The Company Secretaries
KOMARKCORP BERHAD (374265-A)
Lot 6.05, Level 6, KPMG Tower
8 First Avenue, Bandar Utama
47800 Petaling Jaya
Selangor Darul Ehsan
Malaysia
1st fold here
KOMARKCORP BERHAD (374265-A)
Lot 132, Jalan 16/1, Kawasan Perindustrian Cheras Jaya
43200 Balakong, Selangor Darul Ehsan, Malaysia.
Tel
: [603]9080 3333
Fax
: [603]9080 5233
Email : [email protected]
KOMARKCORP BERHAD (374265-A) | ANNUAL REPORT 2014
www.komark.com.my

Board Charter

AGM Agenda 29th July 2014

Notice Under Sec 178 (4) of CO, 1984

BOARD OF TRUSTEES - Monroe County Community College

Dr. William Stanley Jones

Visio-4.30.14 Mfld Clinic.vsd

Appointment Account Inspectors, Substitute Account

YFG BERHAD (499758-W)

For personal use only

Board Meeting Agenda - September 2014 - The Windsor