- Kotra Pharma

Transcription

- Kotra Pharma

kotra industries berhad (497632-P)
kotra industries berhad
(497632-P)
No. 1, Jalan TTC 12,
Cheng Industrial Estate,
75250 Melaka.
Tel : 606-336 2222
Fax : 606-336 6122
•
w w w. a p p e t o n . c o m
Annual Report 2010
w w w. k o t r a p h a r m a . c o m
Momentum in Excellence
2010
Annual Report 2010
Vision
Humanising Healthcare – Everyone deserves a
healthier tomorrow
Mission
Core Values
We act with Integrity
We deliver on Commitment
We are Customer-Oriented
We work with Passion and Team Spirit
We are a Responsible Corporate Citizen
We believe Everything is Possible
To be the centre of excellence for pharmaceutical
industry
Contents
1
2
6
9
20
22
Corporate Information
Directors’ Profile
Chairman’s Statement
Corporate Governance Statement
Statement on Internal Control
Report of the Audit Committee
Financial Statements
28 Directors’ Report
33Statement by Directors & Statutory Declaration
34 Independent Auditors’ Report
36 Income Statements
37 Balance Sheets
38 Statements of Changes in Equity
39 41 75 76
77 Cash Flow Statements
Notes to the Financial Statements
List of Properties
eDividend
Notice of Annual General Meeting
Shareholding Statistics
81 Analysis of Shareholdings
81 Substantial Shareholders
81 Directors’ Shareholdings
82 30 Largest Shareholders
Form of Proxy
Corporate Information
Board of Directors
Remuneration Committee
Registrar
Y. Bhg. Tan Sri Datuk Dr. Omar
bin Abdul Rahman
JSM, JMN, DMSM, PSM
(Independent Non-Executive Chairman)
bin Abdul Rahman, JSM, JMN, DMSM, PSM
(Chairman)
Omar bin Md. Khir
Piong Teck Min
Piong Teck Onn
Mega Corporate Services Sdn. Bhd.
Level 15-2, Faber Imperial Court
Jalan Sultan Ismail
50250 Kuala Lumpur
Tel : 03-26924271
Fax : 03-27325399/03-27325388
Nomination Committee
Auditors
bin Abdul Rahman, JSM, JMN, DMSM, PSM
(Chairman)
Omar bin Md. Khir
Piong Teck Min
Crowe Horwath
52 Jalan Kota Laksamana 2/15
Taman Kota Laksamana, Seksyen 2
75200 Melaka
Tel : 06-2825995
Fax : 06-2836449
Piong Teck Onn
(Managing Director)
Piong Teck Min
(Non-Independent Non-Executive Director)
Y. Bhg. Datuk Piong Teck Yen
DMSM, DSM, PJK, JP
(Executive Director)
Chin Swee Chang
(Executive Director)
Omar bin Md. Khir
(Independent Non-Executive Director)
P’ng Beng Hoe
BKT, PJK, JP
Azhar bin Hussain
ESOS Committee
Legal Advisors
Azhar bin Hussain (Chairman)
P’ng Beng Hoe, BKT, PJK, JP
Piong Teck Onn
Registered Office
Taman Kota Laksamana
Seksyen 2
75200 Melaka
Tel : 06-2836620
Fax : 06-2836449
Business Office
Company Secretaries
Ow Pee Juan (MAICSA 7013304)
Mah Li Chen (MAICSA 7022751)
Audit Committee
P’ng Beng Hoe, BKT, PJK, JP (Chairman)
Azhar bin Hussain
Piong Teck Min
No. 1, Jalan TTC 12
Cheng Industrial Estate
75250 Melaka
Tel : 06-3362222
Fax : 06-3366122
Chee Siah Le Kee & Partners
Advocates & Solicitors
105, Taman Melaka Raya
75000 Melaka
Tel : 06-2833423
Fax : 06-2847251
Stock Exchange Listing
Bursa Malaysia Securities Berhad
Main Martket
Directors’ profile
y.bhg. tan sri DATUK Dr. Omar
bin Abdul Rahman
Independent Non-Executive Director &
Chairman
78, Malaysian
Date appointed: 5 June 2000
Board Committee memberships:
• Chairman, Nomination Committee
• Chairman, Remuneration Committee
2
Kotra Industries Berhad 2010 Annual Report
Academic qualification and honours:
• Bachelor of Veterinary Science (Sydney
University)
• Certificate of Pathology (University of
Queensland)
• Doctor of Philosophy (Cambridge
University)
• Honorary Doctorates (Universities of
Sterling, Melbourne, Guelph, Bristol
and Queensland, Universiti Teknologi
Malaysia, Universiti Kebangsaan Malaysia
and Universiti Putra Malaysia)
• Professor Emeritus, Universiti Putra
Malaysia
Experience and career path:
• Veterinary Research Officer of Veterinary
Research Institute, Ipoh in 1960
• Deputy Director of Veterinary Research
Institute, Ipoh in 1971
• Professor of Animal Pathology and
Founding Dean of the Faculty of Veterinary
Medicine and Animal Science of Universiti
Putra Malaysia (UPM), and Deputy ViceChancellor of Academic Affairs of UPM
from 1972 – 1987
• Science Advisor in the Prime Minister’s
Department from 1984 – 2001
• Founding Chairman of Technology Park
Malaysia Corporation
• Founding Joint Chairman of the Malaysian
Industry-Government Group for High
Technology (MIGHT)
• Founding Chairman of Composite
Technology (Research) Malaysia Sdn Bhd
(CTRM)
• Founding Chairman of the Malaysian
Technology Development Corporation
(MTDC)
• Founding and Executive Chairman of
Kumpulan Modal Perdana Sdn Bhd from
2001 – 2007
• Founding and current Chairman of Londonbased Commonwealth Partnership for
Technology Management Ltd (CPTM)
• President and CEO of Malaysia University
of Science and Technology (MUST) from
2007 – 2009
Directorships in other companies:
• OSK Ventures International Bhd
• Green Packet Bhd
• BCT Technology Bhd
• GW Plastics Holdings Bhd Group
Awards:
• JSM, JMN, DMSM, PSM
• Asean Achievement Award (Science),
1993
• Fook Ying Tung South-East Asia Prize,
1998
• Tun Abdul Razak Award (International
Category), 2000
Committees served:
• Ministry of International Trade Industry’s
(MITI) Consultative Panel on Trade and
Industry
• National Council for Scientific Research
and Development
• National Development Planning
Committee
• National Information Technology Council
• National Telecommunication Council
• Malaysian Veterinary Council
• United Nation’s Council for Science and
Technology for Development (UNCSTD)
• Organization of the Islamic Conference
(OIC)
Ministerial
Committee
on
Science and Technology Cooperation
(COMSTECH)
• Joint Convener of the Langkawi
International Smart Partnership Dialogues
(LID)
• Current Chairman of Joint-Executive
Group for the Southern Africa International
Dialogues (SAID)
• Current member of UNESCO’s World
Commission on Ethics in Scientific
Knowledge and Technology (COMEST)
• Current member of the Malaysian
Innovation Foundation
• Current member of Malaysian Toray
Science Foundation
Associations & affiliations:
• Senior Fellow and First President,
Academy of Sciences Malaysia
• Board Member, Past President, Fellow and
Advisor, Malaysian Scientific Association
• Past President, Association of Veterinary
Surgeons Malaysia
• Fellow, Academy of Sciences for the
Developing World (TWAS)
• Founding Fellow, Islamic World Academy
of Sciences
• Honorary Fellow, National Academy of
Science Republic of Kyrgyzstan
• Past President, Science Council of Asia
• Past President, Third World Network of
Scientific Organisations, Asia Region
• Immediate Past President, Federation
of Asian Scientific Academies and
Associations (FASAs)
Piong Teck Onn
Managing Director
Piong Teck Min
Non-Independent Non-Executive Director
Executive Director
52, Malaysian
58, Malaysian
43, Malaysian
• Remuneration Committee
• Employees’ Share Option
Committee
• Audit Committee
• Nomination Committee
Scheme
Academic qualification:
• Bachelor of Science in Pharmacy
(University of Wales, United Kingdom)
National & International Committees
Served:
• Chairman of the ASEAN Pharmaceutical
Industry Club (APC) (2008-2009)
• Past President (2008-2009) and Executive
Council Member (1998-2010) of the
Malaysian Organisation of Pharmaceutical
Industries (MOPI)
Relationships with other Directors/
Substantial Shareholders:
• Brother to Piong Teck Min and Y.Bhg.
Datuk Piong Teck Yen
• Married to Chin Swee Chang
• Handled the pharmaceutical wholesale
business of KOT in 1970
• Managing Director of Lonnix (M) Sdn Bhd,
specializing in broad range traditional
medicine
• Well-versed with the intricacies of the local
pharmaceutical trade
• Built a good business network
with Malaysian wholesalers in the
pharmaceutical trade
• Treasurer,
Chinese
Medicines
Manufacturers’ Association of Malaysia
• Brother of Piong Teck Onn and Y.Bhg.
• Brother-in-law of Chin Swee Chang
• Responsible for marketing and sales
activities of KOT in 1989
• Sales Manager of KPM in 1989
• Marketing Manager of KPM in 1995
and was instrumental in formulating
and implementing promotions aimed at
creating brand awareness
• Current Business Director responsible
for the development of exports and
international marketing activities of the
Group
Awards:
• DMSM, DSM, PJK, JP
• Brother of Piong Teck Min and Piong Teck
Onn
• Brother-in-law of Chin Swee Chang
3
Career path:
• Began his career in retail and wholesale
pharmaceutical business at City Chemist &
Asia Pharmacy
• Instrumental in starting and developing
the manufacturing, research and
development and marketing departments
of Kotra Pharma (M) Sdn Bhd (KPM)
• Responsible for introducing various
conventional dosage forms ranging from
tablets, capsules, creams and ointments,
wet and dry syrups and injectables, both
aseptically and terminally filled from 1985
– 1995
• Managing Director responsible for the
Group’s overall operations, business
strategic directions and driving the Group’s
initiatives towards achieving its various set
goals
• Malaysian Certificate of Education
• Lewisham College, United Kingdom
Chin Swee Chang
Executive Director
53, Malaysian
• Bachelor of Science (Hons) in Data
Processing (University of Leeds, United
Kingdom)
4
• Programmer at Systems Automation Sdn
Bhd in 1982, involved in development,
implementation,
user-training
and
maintenance of insurance software subsystems
• Analyst Programmer at Eastern Systems
Design Sdn. Bhd. in 1984, responsible
in the development and maintenance for
general accounting, insurance broking,
hire purchase/leasing software
• Head of the Electronic Data Processing
Department at Robert Bosch (South East
Asia) Pte Ltd in 1987, responsible for user
support system coordination; coordination/
liaison of system information with regional
office and headquarters in Germany.
Helped to coordinate, convert, transfer
data and system migration from Nixdorf to
IBM AS/400 system in 1991
• IT Manager of KPM in 1993. Transformed
the computerization of the entire business
from a stand-alone personal computer
(PC) environment to a local area network
PC multi-user system, with fully integrated
material requirements planning, financial
and distribution software. Coordinated
and implemented a new, fully integrated
Symix MRP (US) package on PROGRESS
database platform in 1997. Set-up an
in-house IT team to support the growing
number of users and computer systems
in 2001. Since then, Symix system has
gone through two rounds of upgrades.
Symix was renamed as Syteline where
the database was converted to MS SQL.
Was also responsible for setting up and
ensuring the smooth running of order
processing, administration and human
resources. Was instrumental its setting
up as the demand for exports increased
in the Shipping Department
• Was promoted to the current position, Chief
Information Officer responsible
for overseeing the operations and
development of Management Information
Systems,
Order
Processing
and
Administration departments
• Was the Project Manager for the SAP
Project implementation which started in
November 2008 and went live as scheduled
in July 2009. Modules of SD, MM, FICO,
and partial PP were implemented together
to replace the legacy Infor ERP Syteline
system
• Sister-in-law of Piong Teck Min and Y.Bhg.
• Married to Piong Teck Onn
Omar bin Md. Khir
Independent Non-Executive Director
73, Malaysian
• Nomination Committee
• Cambridge School Certificate
• Completed an Estate Management
Course
• Assistant Estate Manager in Socfin
Plantations in 1958, devoted attention on
various rubber and palm oil estates
• Acting Manager of Socfin Plantations in
1973
• Experience in Human Resources
Management & Public Relations from 1977
– 1981
• Upon retirement as Manager 1 (Senior
Group Manager) in 1992, was in charged
of approximately 10,000 acres of rubber
and palm oil estates in Batang Berjuntai,
Selangor
• Former Committee Member, Malaysian
Employers Federation
• Former Member, of Employers Panel
(Industrial Court)
• Former Chairman, Selangor State
Malaysian
Agriculture
Producers
Association Advisory Panel
• Former Chairman, Selangor Planters
Association
• Former Council Member, Zoo Negara
• Former Committee Member, United
Planting Association of Malaysia
P’ng Beng Hoe
Azhar bin Hussain
65, Malaysian
Date appointed: 22 August 2007
57, Malaysian
Date appointed: 12 November 2007
• Chairman, Audit Committee
• Employees’ Share Option Scheme
Committee
Professional qualification:
• Chartered Accountant
Awards:
• BKT, PJK, JP
• Member of the Institute of Chartered
Accountants in Australia
• Member of CPA Australia
• Member of the Malaysian Institute of
Accountants (MIA)
• Member of the Malaysian Institute of
Certified Public Accountants (MICPA)
• House Pharmacist, Glaxo Malaysia in
1976
• Production Executive, Glaxo Malaysia in
1977
• Assistant Manager, Glaxo Malaysia in
1981
• Production Manager, Glaxo Malaysia in
1983
• Technical Manager, Glaxo Malaysia, Glaxo
Pakistan in 1989
• Technical Director, Glaxo Malaysia in
1993
• Board of Director, Glaxo Malaysia in 1993
• Executive Director, Intercircle Holdings
Sdn Bhd in 1994
• Managing
Director,
Pharmaniaga
Manufacturing Bhd and later Executive
Director, Pharmaniaga Bhd from
1994 – 2003
• Managing Director, Pharmaniaga Bhd from
2003 – 2006
• Senior Director, UEM Group in 2007
• Business
Development
Consultant,
Technology Park Malaysia in 2008
• Head, TPM Biotech Sdn Bhd from
2008 – 2010
• Director and Senior Principal Consultant,
Neoconsult Sdn Bhd from 2010 - present
• Past President of the Malaysian
Organisation of Pharmaceutical Industries
(MOPI)
• Associate Member of the Harvard
Business School Alumni Club of Malaysia
• Member of the Malaysian Pharmaceutical
Society (MPS)
5
• Former Partner of Pricewaterhouse
Coopers
• Chartered Accountant with accumulated
and extensive experience in audit,
taxation, public listing of companies,
management consultancy, corporate
restructuring for a wide range of industrial
and commercial companies in the public
and private sectors including multinational
corporations and government corporate
bodies
• Bachelor of Pharmacy (Hons) (University
of Wales, United Kingdom)
Notes:
1. Relationship
The Directors do not have any family
relationship with any Director and/or
major shareholders of the Company
except otherwise stated in individual
profiles
2. Conflict of Interest
None of the Directors have any conflict
of interest with the Company
3. Conviction for Offences
None of the Directors have any conviction for offences (other than traffic
offences) within the past 10 years
4. Other Directorship
The Directors do not hold any other directorship of public companies except
otherwise stated in individual profiles
Dear Shareholders,
The world’s recovering economy has had a minor impact on our Group’s business activities in the last financial year. During
the challenging period, the Group continued to chart steady growth in revenue and profit; a record that has never been
tarnished since it was listed in the Bursa Malaysia.
As Chairman of the Board of Kotra Industries Berhad (Kotra), I am proud to announce that our Group’s revenue for the
financial year under review has crossed the RM100 million-mark, which could have been achieved only with detailed planning,
strong teamwork, focused efforts by the Board members, management team and individual employees. In this regard, the
achievement has an immense positive psychological impact for the Group.
6
The following report will provide an overview of the Group’s performance for the year ended 30 June 2010.
FINANCIAL UPDATES
Kotra registered revenue of RM102.4 million for
the financial year ended June 2010, an increase
of 13.7% from the RM90.0 million recorded the
year before. Profit before tax stood at RM12.5
million compared to RM9.0 million in the previous
year, an increase of 38.7%. The 38.7% jump in profit before tax was
mainly due to higher sales revenue, a more
profitable product range, effective advertising
and promotional activities executed at a lower
cost. In addition, the previous investment efforts
made by the Group to build its brands globally
are beginning to generate results.
OPERATIONAL UPDATES
Domestic Operations
The Group’s domestic operations continued its
positive growth trend as the spending power of
local consumers returned. Domestic sales of the
Group has grown by 6.2%, contributing to 61%
or RM62.5 million of the Group’s revenue as
the result of a more focused marketing strategy
which have better impact on consumers.
The new products launched by the Group
during the financial year were Axcel Iridin Linctus
(for dry cough), Axcel Flemin Expectorant (for
productive cough), Axcel Erythromycin ES-400
Suspension and Appeton Essentials Activ-C
(new pack) -250mg (orange flavour), has also
contributed to the increase of the Group’s
revenue.
Kotra’s products received the Halal Certification
from JAKIM (Jabatan Kemajuan Islam Malaysia)
in December 2009. The certification, which is
recognized in many Muslim countries worldwide,
bodes well for the Group’s export strategy
especially in the Middle East countries.
The construction of the new manufacturing
plant adjacent to our current manufacturing
facility and headquarters was completed with its
production scheduled to start in the next financial
year. The building received its Certificate of
Fitness in September and is now occupied
by the Engineering Department and Quality
Assurance Department. The Group is currently
in the process of getting the cGMP (current
Good Manufacturing Practice) certification.
The Group also focused on strengthening
its manpower during this financial year. Staff
numbers increased from 530 in June 2009 to
603 in June 2010. However, due to the small
talent pool of trained and experienced personnel
available in the country, the Group continued
to face difficulty in recruiting local experts
whilst the practice of pinching staff among the
pharmaceutical companies continued to hamper
the growth of the industry. As a counter measure,
Kotra recruited personnel from overseas and
enhanced its internal training programmes for its
employees.
Y.BHG. TAN SRI DATUK Dr. Omar bin Abdul Rahman
Independent Non-Executive Director & Chairman
The Group will continue to further develop and
improve its export strategy and is constantly
looking for opportunities to penetrate the
international market by leveraging on Malaysia’s
Pharmaceutical Inspection Cooperation/
Scheme (PIC/s) status. Efforts include ensuring
that the Group’s new manufacturing plant is
accredited with the necessary certification which
complies with the international standard for
pharmaceutical manufacturing.
INDUSTRY OVERVIEW
Local
The local pharmaceutical industry remained
positive during the year under review despite
the slow global economy. The higher demand
from the Government sector, which emphasized
efforts on reducing cost, and the influenza A
(H1N1) virus outbreak were the main drivers of
the pharmaceutical industry’s performance last
financial year. The change in consumer spending,
where more affordable medicines are preferred,
also had an impact in the overall performance of
the local pharmaceutical industry.
The Malaysian Organisation of Pharmaceutical
Industries (MOPI) reported that the positive
growth was due to the changing demographics,
expectations for better healthcare and the
rise in disposable income.
Although the pharmaceutical industry remained
strong, the industry players had to face intense
competition and higher cost of imported raw
materials. This had resulted in lower profit
margins for the industry players.
Recently, the Government started the
drive to transform the nation into a highincome economy. The initiative which
is headed by PEMANDU (Performance
Management and Delivery Unit) includes
the
pharmaceutical
industry
as
a
crucial sector to achieve the goal. The
Government plans to revitalize the industry
by encouraging more private players and the
existing players to upgrade their capability
and technology. Kotra supports this initiative
and is presently at the forefront with its newly
completed state-of-the-art manufacturing
facility.
Currently, the size of the Malaysian
pharmaceutical industry is relatively small with
approximately 36 players in active business.
Most of them continue to focus on satisfying
domestic consumption with only a few which
have interest for exports.
The Government is hoping to change this and is
planning to transform the local pharmaceutical
industry. One of the New Key Economic Areas
(NKEA) aims is to turn the pharmaceutical
industry into a strategic industry for the nation.
In this initiative, the Government and the private
sectors from the pharmaceutical industry will
work together to generate an estimated USD4
billion in revenue and create 10,000 jobs by year
2020.
Export Operations
The Group’s export operations continued to
expand during the year under review. The
contribution of exports to the Group’s revenue
increased from 35% to 39% with a growth of
27.9% as we penetrated into new markets.
These were: Tanzania, Kenya, Ethiopia, Sudan,
Mongolia, Bangladesh, China, Laos and Yemen.
These markets welcomed our Appeton products
namely Appeton Weight Gain, Appeton Wellness
60+, Appeton Infant Drops and Appeton
Multivitamin with Lysine.
7
International
The global pharmaceutical market grew by 6%
in 2010 to an excess of USD825 billion due to
a higher near-term growth in the US market,
the varying combination of innovative and
mature products, greater healthcare access
and funding on market demand. Focus remains
on the Asia Pacific region where the costs are
significantly lower and where regulations are
more favourable.
8
Numerous mergers, acquisitions and joint
ventures were witnessed during the year under
review. Pharmaceutical giants acquired smaller
companies or created alliances with players in
emerging economies, especially India, in an
effort to reduce production costs and increase
efficiency as patents of their blockbuster drugs
expire. Teva Pharmaceutical Industries Ltd, the
largest pharmaceutical company in the world,
has been on a buying spree. After taking over
German’s Ratiopharm GmbH in March this year
for USD5 billion (RM16 billion), it announced in
July that it was looking for a suitable partner in
South America.
Although the mergers, accuisitions and joint
ventures are globally rife, it is not happening
in the Malaysian shores. The multi-national
companies are more inclined to set-up marketing
and sales offices in the country rather than
build manufacturing plants mainly due to cost
considerations.
Most pharmaceutical giants are interested
in India given its deep pharmaceutical
Meeting
The Board meets at least once in every quarter. During the year under review, five (5) Board meetings were held to discuss and decide on a variety
of issues pertaining to the Group’s financial results, key risk areas, business plans, proposals and announcements of financial results prior to public
release.
Below is the attendance list of individual directors during the financial year under review:
10
During the previous financial year, no new member was appointed to the Board.
Re-election
All Directors are required to go forward for re-election by shareholders at the Annual General Meeting (AGM) at intervals of no more than three years,
together with all new Directors appointed since the previous AGM, under the Company’s Articles of Association. Section 129 (6) of the Companies Act
1965 requires that all Directors over seventy (70) years of age go forward for reappointment each year. Retiring Directors may offer themselves for reelection or reappointment.
The Directors listed below are due to go forward for re-election or reappointment at this year’s AGM:
•
•
•
•
•
Y. Bhg. Tan Sri Datuk Dr. Omar bin Abdul Rahman (Chairman)
Piong Teck Onn
P’ng Beng Hoe
Azhar bin Hussain
Omar bin Md. Khir
11
The following are the list of trainings, conferences, workshops and seminars where the Directors have participated in:
Director
Y. Bhg. Tan Sri Datuk Dr.
Omar bin Abdul Rahman
Training / Seminar / Workshop
From the Trenches – Insights and Perspectives of Malaysian Industry Leaders. Perdana Leadership Foundation.
Seminar on “Capital Market Revamp and The Corporate Governance Guide”
Bursa Malaysia Evening Talk: Risk Action Planning: The Missing Elements in ERM Framework
A Framework For STI Policy And Action Plan Round Table Meeting For The Revival of The STI
System in Sudan – Khartoum.
Seminar on “The Spirit of the Code of Corporate Governance and Corporate Responsibility &
Meeting the Needs of Investors: Increasing Transparency, Accountability”
Some Thoughts On The STI Policy Considerations For The New Economic Model (NEM) ASM
Dates Attended
20 August 2009
26 August 2009
1 October 2009
3 - 4 March 2010
26 May 2010
Kotra Industries Berhad 2010 A
Training
The Board acknowledges the importance of continuous learning and training for its members. Directors are encouraged to review their own training
needs on a regular basis and participate in conferences, seminars, workshops or dialogues that can enrich and amplify their contribution and role as a
Board member.
14
3. Remuneration Committee & Directors’ Remuneration
The Remuneration Committee (RC) is entrusted with the responsibility to assist the Board in reviewing and recommending appropriate and
competitive remuneration packages, share options and other benefits applicable to the Directors, taking into TDcountthe Domman<y222 and oidinvidalT
adopted appropriate accounting policies and applied them consistently;
• made reasonable and prudent judgements and estimates;
• ensured all applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial
statements; and
• prepared the financial statements on going concern basis, unless it is inappropriate to presume that the Group and the Company will continue in
business.
The Board of Directors are also responsible to ensure that the Company and its subsidiaries keep proper accounting records which disclose with
reasonable accuracy the Group’s and Company’s financial positions at any time and which enable them to ensure that the financial statements comply
with the Companies Act, 1965. The Directors have overall accountability for taking such steps that are reasonably open to them to safeguard the assets
of the Group and the Company, in order to detect and prevent fraud and other 06begularities.
COMPLIANCE STATEMENT
As at the end of the financial year, the Board is of the opinion that the following Principles and Best Practices of the Code have not been complied with:
ADDITIONAL COMPLIANCE INFORMATION
Recurrent Related Party Transactions
The details of the Recurrent Related Party Transactions (RRPT) of a revenue and trading nature conducted pursuant to the Shareholders’ Mandate
during the financial year ended 30 June 2010 are as follows:Name of Mandated
Related Party
18
Relationship with the Group
Nature of Transactions
RM
Non-audit Fees Paid to External Auditors
During the financial year ended 30 June 2010, non-audit fees paid or payable to external auditors and affiliated firms amounted to RM110,000.
Variation in Results
There was no significant variance between the results for the financial year ended 30 June 2010 as per the audited financial statements and the unaudited
results previously announced. The Company did not make any release on profit estimate, forecast or projections for the financial year.
Profit Guarantee
There was no profit guarantee given by the Company in respect of the financial year.
Material Contracts Involving Directors’ and Major Shareholders’ Interests
Revaluation of Landed Properties
The Company did not revalue its property, plant and equipment during the financial year ended 30 June 2010, as these assets are carried in the
Company’s financial statements at historical cost less accumulated depreciation.
19
Other than RRPT of a revenue in nature as disclosed, there were no material contracts entered into by the Company and its subsidiaries involving
Directors’, Major Shareholders’ or connected persons which were still subsisting as at the end of the financial year under review or which were entered
into since the end of the previous financial year except as disclosed in the financial statements.
Statement On Internal Control
Introduction
Paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities) requires the Board of Directors
(Board) of public listed companies to include in its Annual Report a statement about the state of its internal control as a Group.
With this, the Board is pleased to issue the following statement which highlights the nature and scope of the Group’s internal control during the financial
year ended 30 June 2010.
Board responsibility
20
The Board acknowledges its responsibility for the Group’s system of internal control which includes the establishment of an appropriate control environment and framework as well as reviewing its adequacy and integrity. In view of the limitations underlying any system of internal controls which covers
financial, operational, compliance controls and risk management procedures, the system is designed mainly to manage, rather than eliminating the
risk of failure to achieve the overall Group’s corporate objectives. Accordingly, it can only provide reasonable but not absolute assurance against any
material misstatement, loss or fraud.
In accordance with the Statement on Internal Control: Guidance for Directors of Public Listed Companies published in June 2001, the Board upholds
that there is an ongoing process for identifying, evaluating and managing significant risks faced by the Group. The Board, through its Audit Committee,
regularly reviews the results of this process which has been in place for the year under review and up to the date of issuance of the annual report and
financial statements.
Risk management framework
The Board fully supports the contents of the Internal Control Guidance and with the assistance of the outsourced internal auditors, continually reviews
the adequacy and integrity of the risk management processes in place. An enterprise risk management project for the Group was carried out during the
financial year ended 30 June 2010 to assess and update the Group’s risk. Based on the results presented, an updated risk profile featuring the top 5 key
business risks in the Group was put forth to enable Management deploy action plans to better manage the risks and report on an ongoing basis.
The risk management project aims to create awareness among all employees with regards to the internal control components in identifying, evaluating,
control, monitoring and reporting of such risks.
Internal audit function
The Group’s internal audit function, which is outsourced to an adequately resourced professional firm, assists the Board and the Audit Committee in
providing independent assessment of the adequacy, efficiency and effectiveness of the Group’s internal control system. They report directly to the Audit
Committee who reviews and approves the internal audit plans to ensure adequate coverage.
Audits are carried out on a risk based approach, in cognisance with the Group’s objectives and policies in the context of its evolving business and
regulatory environment, taking into consideration input of the senior management and the Board. Opportunity for improvements to the system of internal control are identified and presented to the Audit Committee via internal audit reports. In addition, the internal audit function also followed up on
the implementation of recommendations from previous cycles of internal audit and updated the Audit Committee on the status of Management-agreed
action plan implementation.
During the financial year under review, two cycles of internal audit were being carried out for Kotra Pharma (M) Sdn Bhd. The costs incurred for the
internal audit function for the financial year ended 30 June 2010 amounted to approximately RM56,000.
Other risk and control processes
Apart from risk management and internal audit, the Board has initiated the following processes to provide assurance to the Board on the proper conduct
of the Group’s business operations:
•
•
•
•
•
•
A process of hierarchical reporting has been established to ensure appropriate segregation of duties and to provide for proper documentation and
an auditable trail of accountability.
A detailed budgeting process is in place requiring all departments to prepare budget and business plan on an annual basis. The Board of Directors
reviews and approves the annual budget and business plan in line with the policies and guidelines defined by the Board.
Regular meetings of the Board, its committees and Management are held to assess and monitor financial performance, short-term and mediumterm business plans. The Board also received regular reports that provide them with information required for decision making.
The professionalism and competency of staff are being emphasized through continuous training and an annual performance evaluation.
Strong emphasis is given to ensure adherence of the manufacturing process to the health, safety and environmental regulations. Standard operating policies and procedures based on current Good Manufacturing Practice (cGMP) are set out and are updated from time to time in tandem with
changes to the business environment or regulatory guidelines.
A whistle blowing policy is in place to make it easier for members of staff to be able to report irregularities in good faith, without having to fear that
21
Report Of The Audit Committee
The Board is pleased to present the following report of the Audit Committee and its activities during the financial year ended 30 June 2010. The Audit
Committee ensures the Group continues to apply high and appropriate standards of corporate governance and complies with the revised Malaysian Code
on Corporate Governance.
1.Members of the Audit Committee
The Audit Committee consists of three (3) members, the majority of whom are Independent Non-Executive Directors. The Chairman is also an
Independent Non-Executive Director and is a member of the Malaysian Institute of Accountants (MIA) and fulfils the requirements as prescribed or
approved by Bursa Malaysia.
The members of the Audit Committee are:
P’ng Beng Hoe (Chairman) – Independent Non-Executive Director
Azhar bin Hussain
– Independent Non-Executive Director
Piong Teck Min
– Non-Independent Non-Executive Director
•
•
•
22
2.
Attendance of the Audit Committee Meetings
During the financial year under review, a total of five (5) meetings were held. The position and attendance of the members are set out as follows:
Director
1.
P’ng Beng Hoe
2.
Azhar bin Hussain
3.
Piong Teck Min
Position
Independent Non-Executive
Director & Chairman of Audit
Committee
Independent Non-Executive
Director
Non-Independent Non-Executive
Director
Total Attendance
Attendance at Audit Committee Meetings 2010
Total
Aug’09
Oct’09
Nov’09
Feb’10
May’10
√
√
√
√
√
5/5
√
√
√
√
√
5/5
√
√
√
√
3
3
3
3
4/5
2
3.Terms of Reference of the Audit Committee
A.
Composition of Audit Committee
The Audit Committee will be composed of no fewer than three (3) members all of whom are non-executive directors and majority of whom
shall be independent directors. All members of the Audit Committee should be financially literate.
At least one (1) member of the Audit Committee must be a member of the Malaysian Institute of Accountants or if he is a not a member of the
Malaysian Institute of Accountants, he must have at least three (3) years’ working experience and;
(i)
he/she must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or
(ii)
he/she must be a member of one of the associations of accountants as specified in Part II of the 1st Schedule of the Accountants Act
1967; or
fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad.
Subject to endorsement by the Board, the Audit Committee shall elect a Chairman amongst themselves who is an independent director.
B.
External Audit
The following are the tasks and functions of the Audit Committee concerning external audit:
1.
Consider the appointment of external auditors, the audit fees and any question of resignation or dismissal;
2.
Review the adequacy of external audit arrangements, with particular emphasis on the scope and quality of the audit;
3.
Review the assistance given by the Company and/or the Group’s officers to the external auditors;
4.
Review the quarterly and annual financial statements of the Company and its subsidiaries as well as the consolidated financial statements of
the Group with management (and the external auditors in respect of the annual financial statements), including the following:
5.
Review the external auditors’ audit report;
6.
Review any management letter sent by the Company’s or any of its subsidiaries’ external auditors and management’s response to such
letter;
7.
Review any letter of resignation from the external auditors of the Company or any of its subsidiaries; and
8.
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.
C.Internal Audit
The following are the roles and responsibilities of the Audit Committee concerning internal audit:
1.
Review the adequacy of the scope, functions and resources, competency of the internal audit function and that it has the authority to carry
out the work;
2.
Review the internal audit programme and results of the internal audit process and where necessary ensure that appropriate actions are taken
on the recommendations of the internal audit function;
3.
Review any appraisal or assessment of the performance of members of the internal audit function;
4.
Approve any appointment or termination of senior staff members of the internal audit function; and
5.
Take cognizance of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons
for resigning.
D.
Related Party Transaction
The Audit Committee shall review all related-party transactions and potential conflict of interests situations that may arise within the Company or
Group.
23
-
Any change in accounting policies and practices
-
Significant adjustments arising from the audit
-
The going concern assumption
-Compliance with accounting standards and other legal requirements;
E. Risk Management and Internal Control
24
The following are the responsibilities of the Audit Committee concerning risk management and internal control:
1.
Review all areas of significant business and financial risk and the arrangements in place to contain those risks to acceptable levels;
2.
Review the effectiveness of the system of internal control and management information system within the Company and the Group;
3.
Consider the major findings of internal investigations and management’s response; and
4.
Consider other topics as defined by the Board.
F.
Rights and Powers of the Audit Committee
The Audit Committee shall:
(a) Have explicit authority to investigate any matters within its terms of reference;
(b) Have the resources which it needs to perform its duties;
(c) Have full access to any information which it requires in the course of performing its duties;
(d) Have unrestricted access to the Managing Director and the chief financial officer;
(e) Have direct communication channels with the external auditors and internal auditors;
(f)
Be able to obtain independent professional or other advice in the performance of its duties at the cost of the Company;
(g) Be able to invite outsiders with relevant experience to attend its meetings, if necessary; and
(h) 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 and/or the Group, whenever deemed necessary.
G.
Cooperation from Management
The Company and every subsidiary’s management shall provide the fullest co-operation in providing information and resources to the Audit
Committee, and in implementing or carrying out all requests made by the Audit Committee.
H.Meetings
The Committee shall meet at least four (4) times in each financial year. The quorum shall be two (2) members, the majority of members present
must be independent directors.
The finance manager, the head of internal audit and the external auditors (or their representative) are to be invited to attend the committee
meetings. Other Board members may also be present upon invitation. However, the committee shall meet with the external auditors without the
presence of any executive directors, at least twice a year.
The Company Secretary shall be the Secretary for the Committee and will be responsible for co-ordination of administrative details including calling
the meeting, voting and keeping of minutes.
The Chairman shall convene a meeting of the Audit Committee if a request is made by any committee member, the Company’s Managing Director,
the internal auditors or external auditors.
The external auditors have the right to appear and to be heard at any meeting of the Audit Committee from time to time and shall appear if so
required by the Committee.
Motions put forward to the Audit Committee shall be decided on a majority of votes. Each member shall be entitled to only one vote. The Chairman
shall be entitled to a casting vote in the event of an equality in the voting except for a meeting attended by only two members in which the decision
must be unanimous in order for the motion to be put through.
I.
Review of the Audit Committee
The Board must review the terms of office and performance of the Audit Committee and each of its members at least once every three (3) years to
determine whether the Audit Committee and the members have carried out their duties with the terms of reference.
25
Activities of the Audit Committee
During the year under review, the Audit Committee has discharged its duties in accordance with the terms of reference. The following are the list of
its completed tasks:
•
Reviewed the external auditors’ scope of work, audit plans, management letters and fees for the year, for the Company and its subsidiary,
and recommended their reappointment to the Board after evaluating the performance of the external auditors;
•
Reviewed the Company’s Risk Profile and the management process for identifying, evaluating and managing the significant risks faced by
the Company;
•
Reviewed the annual report and the Company’s audited financial statements prior to submission for Board consideration and approval. The
review was to ensure that the audited financial statements were drawn up in accordance with the provisions of the Companies Act, 1965 and
the applicable accounting standards approved by the Malaysian Accounting Standard Board (MASB);
•
Reviewed the quarterly and year end financial statements to ensure the Company’s compliance with the Listing Requirements of Bursa
Malaysia, MASB and other relevant legal and regulatory requirements;
•
Reviewed the internal audit plan, scope of work and the internal auditors’ fees based on the risk management profile of the Group and final
review of all internal audit findings including recommendations made by the internal auditor;
•
Reviewed the related party transactions entered into by the Company and its subsidiary as well as the disclosure of such transactions in the
Annual Report of the Group and the Circular to Shareholders relating to Shareholders’ Mandate for Recurrent Related Party Transactions
prior to recommending it to the Board for approval; and
•
Reviewed the draft Statement on Internal Control and Corporate Governance Statement and recommended to the Board the extent of the
Group’s compliance with the provisions set out under the Code and in accordance with the Listing Requirements of Bursa Malaysia.
4. Report Of The Audit Committee
5.Internal Audit Function
26
The Company has engaged an external independent internal auditor, Messrs KPMG Business Advisory Sdn Bhd, to carry out internal audit
functions effectively and professionally.
The principal responsibility of the internal audit is to undertake independent regular and systematic reviews of the Group’s system of internal
controls to provide reasonable assurance that such systems continue to operate effectively and efficiently.
Internal audit functions are elaborated further in the Statement on Internal Control in pages 20 to 21 of this Annual Report.
6. Statement on Employees’ Share Option Scheme (ESOS)
The Listing Requirements of Bursa Malaysia Securities Berhad for the Main Market requires a statement by the Audit Committee in relation to the
allocation of the options pursuant to any share scheme for employees as required under Rule 8.17.
There was no new option granted to the eligible Executive Directors and employees of the Group during the financial year under review.
No options had been granted to the Non-Executive Directors since the ESOS took effect.
Financial Statements
28 Directors’ Report
33 Statement by Directors
& Statutory Declaration
34 Independent Auditors’ Report
36 Income Statements
37 Balance Sheets
38 Statements of Changes in Equity
39 Cash Flow Statements
41 Notes to the Financial Statements
Directors’ Report
The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 30
June 2010.
Principal activities
The Company is principally involved in investment holding and the provision of management services. The principal activities of its subsidiaries are set out in Note 16
to the financial statements. There have been no significant changes in the nature of these activities during the financial year.
Results
28
Profit/(loss) for the year
Group
Company
RM’000
RM’000
11,721
(238)
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements.
In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item,
transaction or event of a material and unusual nature.
Dividends
No dividend was paid since the end of previous financial year and the directors do not recommend any final dividend in respect of the current financial year.
Directors
The names of the directors of the Company in office since the date of the last report and at the date of this report are:
Y. Bhg. Tan Sri Datuk Dr. Omar Bin Abdul Rahman, JSM, JMN, DMSM, PSM
Piong Teck Onn
Piong Teck Min
Y.Bhg. Datok Piong Teck Yen, DMSM, DSM, PJK, JP
Chin Swee Chang
Omar Bin Md. Khir
P’ng Beng Hoe, BKT, PJK, JP
Azhar Bin Hussain
Directors’ Report
Directors’ interests
According to the register of directors’ shareholdings, the interests of directors holding office at the end of the financial year in shares and options under the ESOS in the
Company and its related corporations during the financial year were as follows:Number of ordinary shares of RM1 each
1.7.2009
Acquired
Sold
30.6.2010
Piong Teck Min
10,000
-
-
10,000
Piong Teck Onn
51,000
-
-
51,000
Y. Bhg. Datuk Piong Teck Yen, DMSM, DSM, PJK, JP
10,000
-
-
10,000
51,000
-
-
51,000
Holding company
Direct interest
Chin Swee Chang
Number of ordinary shares of RM0.50 each
Sold
30.6.2010
-
-
1,276,220
-
100,000
918,060
2,200
-
-
2,200
4,840
-
-
4,840
Piong Teck Min
64,624,362
-
-
64,624,362
Piong Teck Onn
64,624,362
-
-
64,624,362
64,624,362
-
-
64,624,362
64,624,362
-
-
64,624,362
1.7.2009
Acquired
Piong Teck Min
1,276,220
Omar Bin Md. Khir
1,018,060
Y. Bhg. Tan Sri Datuk Dr. Omar Bin Abdul Rahman, JSM, JMN, DMSM, PSM
The Company
Direct interest
Indirect interest
Deemed indirect interest
Chin Swee Chang
Deemed interest
29
Directors’ Report
Directors’ interests (Cont’d)
Number of options over ordinary shares of RM0.50 each
1.7.2009
Granted
Exercised
30.6.2010
Chin Swee Chang
1,800,000
-
-
1,800,000
Piong Teck Onn
1,800,000
-
-
1,800,000
1,800,000
-
-
1,800,000
The Company
By virtue of their interests in the holding company, namely Piong Nam Kim Holdings Sdn Bhd, Chin Swee Chang, Piong Teck Min, Piong Teck Onn and Y. Bhg. Datuk
Piong Teck Yen, DMSM, DSM, PJK, JP are deemed interested in shares of all the Company’s subsidiaries to the extent the Company has an interest.
30
None of the other directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year.
Employees’ share options scheme
An Employees’ Share Option Scheme (ESOS) was approved by the Securities Commission on 22 April 2003 and the shareholders at an Extraordinary General Meeting
held on 10 July 2003.
The principal features of the ESOS are disclosed in Note 23 to the financial statements.
The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the list of option holders holding share options of less
than 400,000 shares.
The eligible employees who have been granted share options of 400,000 or more are as follows:Number of Share Options
No.
Name of Options Holders
1.
Chin Swee Chang
1,800,000
2.
Piong Teck Onn
1,800,000
3.
1,800,000
4.
Thanasekaran Dorairajah
550,000
5.
Alan Martin Lewis
550,000
6.
Hiew Mein Foong
440,000
7.
Daniel Chua Chong Liang
440,000
Directors’ Report
Directors’ benefits
Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors
might acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, other than those arising from the share
options granted to the directors under the Employees’ Share Option Scheme.
Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount
of emoluments received or due and receivable by the directors or the fixed salary of a full-time employee of the Company as shown in Note 32(d) to the financial
statements) by reason of a contract made by the Company with any director or with a firm of which he is a member, or with a company in which he has a substantial
financial interest other than as disclosed in Note 32 to the financial statements.
Other statutory information
(b)
Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps:
31
(i)
to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied
themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and
(ii)
to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary course of business had
been written down to an amount which they might be expected so to realise.
(a)
At the date of this report, the directors are not aware of any circumstances which would render:
(i)
the amount written off for bad debts or provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any
substantial extent; and
(ii)
the values attributed to the current assets in the financial statements of the Group and of the Company misleading.
(c)
At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation
of assets or liabilities of the Group and of the Company misleading or inappropriate.
(d)
At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Group and of the
Company which would render any amount stated in the financial statements misleading.
(e)
As at the date of this report, there does not exist:
(f)
(i)
any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other
person; or
(ii)
any contingent liability of the Group or of the Company which has arisen since the end of the financial year.
In the opinion of the directors:
(i)
no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial
year which will or may affect the ability of the Group or of the Company to meet its obligations when they fall due; 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 or of the Company for the financial year in which this report is made.
Directors’ Report
Auditors
The auditors, Messrs. Crowe Horwath (formerly known as Messrs. Horwath), have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the directors dated 27 October 2010.
Piong Teck Onn
32
Y. Bhg. Datuk Piong Teck Yen,
DMSM, DSM, PJK, JP
Statement by Directors
Pursuant to Section 169 (15) of the Companies Act, 1965
We, Piong Teck Onn and Y. Bhg. Datuk Piong Teck Yen, DMSM, DSM, PJK, JP, being two of the directors of Kotra Industries Berhad, do hereby state that, in the opinion
of the directors, the accompanying financial statements set out on pages 36 to 74 are drawn up in accordance with Financial Reporting Standards and the Companies
Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 30 June 2010 and of the results and the cash
flows of the Group and of the Company for the year then ended.
Signed on behalf of the Board in accordance with a resolution of the directors dated 27 October 2010.
Piong Teck OnnY. Bhg. Datuk Piong Teck Yen,
DMSM, DSM, PJK, JP
33
Pursuant to Section 169 (16) of the Companies Act, 1965
I, Daniel Chua Chong Liang, being the officer primarily responsible for the financial management of Kotra Industries Berhad, do solemnly and sincerely declare that the
accompanying financial statements set out on pages 36 to 74 are in my opinion 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 Daniel Chua Chong Liang,
at Melaka in the State of Melaka
on 27 October 2010
Before me,
Daniel Chua Chong Liang
Statutory Declaration
Independent Auditors’ Report
to the members of KOTRA INDUSTRIES BERHAD (Incorporated in Malaysia) Company No: 497632-P
Report on the financial statements
We have audited the financial statements of Kotra Industries Berhad, which comprise the balance sheets as at 30 June 2010 of the Group and of the Company, and the
income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the financial year then ended, and a summary of
significant accounting policies and other explanatory notes, as set out on pages 36 to 74.
Directors’ Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Standards
and the Companies Act, 1965 in Malaysia. This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and
making accounting estimates that are reasonable in the circumstances.
Auditors’ Responsibility
34
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 judgment, 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 controls relevant to the Company’s preparation and fair presentation of the financial statements 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 Company’s internal controls. An audit also includes
evaluating the appropriateness of 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 have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as
to give a true and fair view of the financial position of the Group and the Company as of 30 June 2010 and of their financial performance and cash flows for the financial
year then ended.
Independent Auditors’ Report
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 have been properly kept in
accordance with the provisions of the Act;
(b)
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; and
(c)
Our 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.
Other matters
Crowe HorwathOnn Kien Hoe
Firm No.: AF 1018
Approval No :1772/11/10(J/PH)
Chartered Accountants
Chartered Accountant
Melaka
27 October 2010
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.
35
Income Statements
for the financial year ended 30 June 2010
Group
Note
2009
2010
2009
RM’000
RM’000
RM’000
RM’000
Revenue
5
102,357
89,994
300
300
Other operating income
6
2,506
3,552
21
5
(36,492)
(34,413)
-
-
3,081
2,558
-
-
(23,648)
(20,715)
(21,554)
(22,401)
-
-
Depreciation and amortisation
(2,952)
(2,585)
-
-
Other operating expenses
(9,985)
(6,400)
(332)
(322)
(847)
(605)
(1)
(5)
(238)
(310)
Raw materials and consumables used
Changes in inventories of finished goods and work in progress
36
Company
2010
Employee benefits expenses
7
Selling and distribution expenses
Finance costs
8
Profit/(loss) before tax
9
Income tax (expense)/credit
10
Profit/(loss) for the year
12,466
(745)
8,985
139
11,721
9,124
Earnings per share attributable to equity holders of the
Company (sen):
- Basic
11
9.5
7.4
- Diluted
11
9.5
7.4
The accompanying notes form an integral part of the financial statements.
(226)
(238)
(288)
4
(306)
Balance Sheets
as at 30 June 2010
Group
Note
Company
2010
2009
2010
2009
RM’000
RM’000
RM’000
RM’000
Assets
Non-current assets
Property, plant and equipment
12
159,379
120,493
-
-
Investment properties
13
1,649
1,675
-
-
Prepaid land lease payments
14
4,397
4,449
-
-
Development expenditure
15
906
671
-
-
Investment in subsidiaries
16
-
-
90,443
78,482
Deferred tax assets
17
-
750
-
-
166,331
128,038
90,443
78,482
Current assets
18
28,227
21,111
-
-
Trade receivables
19
37,629
30,464
-
-
Other receivables
20
2,053
8,266
1
1
Amounts due from subsidiaries
21
-
-
12,445
12,576
225
119
14
11
Tax recoverable
Cash and bank balances
22
Total assets
8,132
8,562
28
69
76,266
68,522
12,488
12,657
242,597
196,560
102,931
91,139
61,903
61,903
61,903
61,903
314
317
36,796
24,838
40,610
28,886
4,130
4,365
102,827
91,106
102,829
91,106
Equity and liabilities
Equity attributable to equity holder of the Company
Share capital
23
Reserves
Retained earnings
27
Total equity
Non-current liabilities
Deferred income
28
20
46
-
-
Borrowings
29
85,194
63,045
-
-
85,214
63,091
-
-
-
Current liabilities
Borrowings
29
29,561
13,289
-
Trade payables
30
15,852
18,868
-
-
Other payables
31
9,143
10,206
102
33
33
54,556
42,363
102
Total liabilities
139,770
105,454
102
33
Total equity and liabilities
242,597
196,560
102,931
91,139
Inventories
37
Statements of Changes in Equity
Share
capital
(Note 23)
RM’000
Non-distributable
Share
Share option
premium
reserve
(Note 24)
(Note 25)
RM’000
RM’000
Distributable
Retained
earnings
RM’000
Total
equity
RM’000
Group
At 1 July 2008
61,903
3
241
19,762
81,909
Profit for the year
-
-
-
9,124
9,124
Share options granted under ESOS
-
-
73
-
73
61,903
3
314
28,886
91,106
Profit for the year
-
-
-
11,721
11,721
Share options lapsed
-
-
(3)
3
-
61,903
3
311
40,610
102,827
Other
reserve
(Note 26)
RM’000
Distributable
Retained
earnings
(Note 27)
RM’000
Total
equity
RM’000
At 30 June 2009
38
At 30 June 2010
Non-distributable
Share option
reserve
(Note 25)
RM’000
Share
capital
(Note 23)
RM’000
Share
premium
(Note 24)
RM’000
61,903
3
241
15,091
4,671
81,909
Net gain arising from fair value of the investment
in subsidiary recognised directly in equity
-
-
-
9,430
-
9,430
Loss for the year
-
-
-
-
Share options granted under ESOS
-
-
73
-
-
73
61,903
3
314
24,521
4,365
91,106
Net gain arising from fair value of the investment
in subsidiary recognised directly in equity
-
-
-
11,961
-
11,961
Loss for the year
-
-
-
-
-
-
(3)
-
3
-
61,903
3
36,482
4,130
102,829
Company
At 1 July 2008
At 30 June 2009
At 30 June 2010
311
(306)
(238)
(306)
(238)
Cash Flow Statements
Group
Company
2010
2009
2010
2009
RM’000
RM’000
RM’000
RM’000
12,466
8,985
1
148
-
-
(17)
-
-
Cash flows from/(for) operating activities
(238)
(310)
Adjustments for :
Bad debts written off
Bad and doubtful debts recovered
(213)
Depreciation and amortisation:
- property, plant and equipment
2,509
-
-
- investment properties
26
26
-
-
- prepaid land lease payments
52
51
-
-
- deferred income
(26)
(26)
-
-
- development expenditure
17
15
-
-
Gain on disposal of property, plant and equipment
(33)
(15)
-
-
Interest expense
781
526
-
-
Interest income
(47)
(97)
-
-
Inventories written down
933
657
-
-
Provision for doubtful debts
294
584
-
-
Rental income
(33)
(62)
-
-
73
-
73
(986)
-
Share-based payment under ESOS
Unrealised loss/(gain) on foreign exchange
1,031
(238)
-
Operating profit/(loss) before working capital changes
18,124
12,371
(237)
Increase in inventories
(8,049)
(4,725)
-
-
Increase in receivables
(1,950)
(2,567)
-
17
(Decrease)/increase in payables
(4,079)
8,133
69
Cash generated from/(used in) operations
4,046
13,212
(169)
(6)
(226)
Interest paid
(781)
(526)
-
-
Tax paid
(101)
(103)
(3)
(1)
(172)
(227)
Net cash generated from/(used in) operating activities
3,164
12,583
39
2,875
Cash Flow Statements
Group
Company
2010
2009
2010
2009
RM’000
RM’000
RM’000
RM’000
Interest received
47
97
-
-
Proceeds from disposal of property, plant and equipment
36
15
-
-
Cash flows for investing activities
Rental received
33
62
-
(252)
(258)
-
-
Purchase of property, plant and equipment
(37,490)
(85,555)
-
-
Net cash used in investing activities
(37,626)
(85,639)
-
-
26,388
59,929
-
-
Development expenditure paid
40
Cash flows from financing activities
Drawdown of term loans
Proceeds from other short term borrowings
7,422
5,435
-
-
Interest paid
(4,274)
(1,050)
-
-
(15)
(16)
-
-
Repayment of hire purchase payable
-
-
131
253
Net cash generated from financing activities
29,521
64,298
131
253
Net (decrease)/increase in cash and cash equivalents
(4,941)
(8,758)
(41)
26
261
-
-
13,267
69
43
4,770
28
69
Repayment from a subsidiary
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at beginning of the financial year
Cash and cash equivalents at end of the financial year (Note 22)
(115)
4,770
(286)
30 June 2010
1.Corporate information
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.
The principal place of business is located at No. 1, Jalan TTC 12, Cheng Industrial Estate, 75250 Melaka.
The Company is principally involved in investment holding and the provision of management services. The principal activities of its subsidiaries
are set out in Note 16 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.
The holding company is Piong Nam Kim Holdings Sdn Bhd, a company incorporated in Malaysia, which the directors also regard as the ultimate holding
company.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 27 October 2010.
2.Financial risk management policies
The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s business whilst
managing its market, credit, liquidity and cash flow risks. The policies in respect of the major areas of treasury activity are as follows:(a)
Market risk
(i)Foreign currency risk
The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than Ringgit Malaysia.
Foreign currency risk is closely monitored and kept at an acceptable level.
As at balance sheet date, the Group has entered into forward foreign exchange contracts with the following notional amounts and maturities:
Notional Amount
2010
2009
RM’000
RM’000
Foreign Exchange Contract to sell USD
4,844
2,966
Foreign Exchange Contract to buy Euro
5,232
-
10,076
2,966
Maturities less than 1 year:
(ii)Interest rate risk
The Group obtains financing through bank borrowings. Its policy is to obtain the most favourable interest rates available.
Information relating to the Group’s borrowings are disclosed in their respective notes.
41
2.Financial risk management policies (Cont’d)
(b)Credit risk
Credit risks, or the risk of counterparties defaulting, are controlled by the application of credit approvals, limits and monitoring procedures. Credit risks are
minimised by monitoring receivables regularly and by mostly trading with creditworthy customers.
The carrying amounts of cash and cash equivalents, trade receivables and other receivables represent the Group’s maximum exposure to credit risk in
relation to financial assets. No other financial assets carry a significant exposure to credit risk.
(c)
Liquidity and cash flow risks
The Group manages its liquidity risk by maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities
to meet estimated commitments arising from operational expenditure and financial liabilities. The Group also has an effective control of cash management
to ensure that the Group can pay its operating expenses and targeted dividends to shareholders at appropriate times.
42
3.Basis of preparation
The financial statements of the Group are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other
sections under significant accounting policies, and in compliance with Financial Reporting Standards (FRSs) and the Companies Act, 1965 in Malaysia.
During the current financial year, the Group has adopted FRS 8, Operating Segments, being the Financial Reporting Standard effective for financial periods
beginning on or after 1 July 2009. FRS 8 replaces FRS 1142004 Segment Reporting and requires a “management approach”, under which segment information is
presented on the same basis as that used for internal reporting purposes. The adoption of this new Standard only impacts the form and content of disclosures
presented in the financial statements.
At the date of authorisation of these financial statements, the following new FRSs and Interpretations, and amendments to certain Standards and Interpretations
were issued but not yet effective and have not been applied by the Group:
Effective for financial periods beginning on or after 1 January 2010
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
FRS 4: Insurance Contracts
FRS 7: Financial Instruments: Disclosures
Revised FRS 101 (2009): Presentation of Financial Statements
Revised FRS 139 (2010): Financial Instruments: Recognition and Measurement
Amendments to FRS 1: First-time Adoption of Financial Reporting Standards and FRS 127: Consolidated and Separate Financial Statements: Cost of an
Investment in a Subsidiary, Jointly Controlled Entity or Associate
Amendments to FRS 2: Share-based Payment - Vesting Conditions and Cancellations
Amendments to FRS 132: Financial Instruments: Presentation and FRS 101: Presentation of Financial Statements - Puttable Financial Instruments and
Obligations Arising on Liquidation
Amendments to FRS 139: Financial Instruments: Recognition and Measurement, FRS 7: Financial Instruments: Disclosures and IC Interpretation 9:
Reassessment of Embedded Derivatives
Improvements to FRSs (2009)
IC Interpretation 9: Reassessment of Embedded Derivatives
IC Interpretation 10: Interim Financial Reporting and Impairment
IC Interpretation 11: FRS 2 - Group and Treasury Share Transactions
IC Interpretation 13: Customer Loyalty Programmes
IC Interpretation 14: FRS 119 - The Limit on a Defined Benefits Asset, Minimum Funding Requirements and their Interaction
TR i - 3: Presentation of Financial Statement of Islamic Financial Institutions
3.Basis of preparation (Cont’d)
Effective for financial periods beginning on or after 1 March 2010
•
Effective for financial periods beginning on or after 1 July 2010
Revised FRS 1 (2010): First-time Adoption of Financial Reporting Standards
Revised FRS 3 (2010): Business Combinations
Revised FRS 127 (2010): Consolidated and Separate Financial Statements
Amendments to FRS 2: Share-based Payment
Amendments to FRS 5: Non-current Assets Held for Sale and Discontinued Operations - Plan to Sell the Controlling Interest in a Subsidiary
Amendments to FRS 138: Intangible Assets
IC Interpretation 12: Service Concession Arrangement
IC Interpretation 16: Hedges of Net Investment in a Foreign Operation
IC Interpretation 17: Distributions of Non-cash Assets to Owners
Amendment to IC Interpretation 9: Reassessment of Embedded Derivatives
Effective for financial periods beginning on or after 1 January 2011
•
•
•
•
•
•
•
Amendments to FRS 1: First-time Adoption of Financial Reporting Standards - Limited Exemption from Comparative FRS 7 Disclosures for First-time
Adopters - Additional Exemptions for First-time Adopters
Amendments to FRS 2: Share-based Payment - Group Cash-settled Share-based Payment Transactions
Amendments to FRS 7: Financial Instruments: Disclosures - Improving Disclosures about Financial Instruments
IC Interpretation 4: Determining Whether An Arrangement Contains a Lease
IC Interpretation 18: Transfer of Assets from Customers
TR 3: Guidance on Disclosures of Transition to IFRSs
TR i - 4: Shariah Compliant Sale Contracts
The Group plan to adopt the above pronouncements when they become effective in the respective financial period. The adoption of these pronouncements are
expected to have no material impact on the financial statements of the Group and of the Company upon their initial application except for the following:
FRS 7: Financial Instruments: Disclosures, FRS 139: Financial Instruments: Recognition and Measurement and subsequent Amendments to FRS 7
and FRS 139
FRS 7: Financial Instruments: Disclosures is a new Standard that requires new disclosures in relation to financial instruments. The Standard is considered to
result in increased disclosures, both quantitative and qualitative of the Group’s exposure to risks, enhanced disclosure regarding components of the Group and
of the Company’s financial position and performance, and possible changes to the way of presenting certain items in the financial statements.
The new Standard on FRS 139: Financial Instruments: Recognition and Measurement establishes principles for recognising and measuring financial assets,
financial liabilities and some contracts to buy and sell non-financial items. Requirements for presenting information about financial instruments are in FRS
132: Financial Instruments: Presentation and the requirements for disclosing information about financial instruments are in FRS 7: Financial Instruments:
Disclosures.
The possible impact of FRS 139 and FRS 7 on the financial statements upon their initial application are not disclosed by virtue of the exemptions given in these
respective FRSs.
43
•
•
•
•
•
•
•
•
•
•
Amendments to FRS 132 Financial Instruments: Presentation - Classification of Rights Issues
3.Basis of preparation (Cont’d)
Revised FRS 101 (2009): Presentation of Financial Statements
The revised FRS 101 (2009) introduces the statement of comprehensive income: presenting all items of income and expense recognised in the income statement,
together with all other items of recognised income and expense, either in one single statement, or in two linked statements. In addition, a statement of financial
position is required at the beginning of the earliest comparative period following a change in accounting policy, the correction of an error or the reclassification of
items in the financial statements. The adoption of this revised FRS will only impact the form and content of the presentation of the Group and of the Company’s
financial statements in the next financial year.
Improvements to FRSs (2009)
44
Improvements to FRSs (2009) contain amendments to 21 accounting standards that result in accounting changes for presentation, recognition or measurement
purposes and terminology or editorial amendments. These amendments are expected to have no material impact on the financial statements of the Group and
of the Company upon their initial application except for leasehold land where in substance a finance lease will be reclassified from ‘prepaid land lease payments’
to ‘property, plant and equipment’ and measured as such retrospectively.
4.Significant accounting policies
(a)Critical accounting estimates and judgements
Estimates and judgements are continually evaluated by the directors and management and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of
the Group’s accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities,
income and expenses are discussed below.
(i)
Depreciation of property, plant and equipment
The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment are based on commercial
and production factors which could change significantly as a result of technical innovations and competitors’ actions in response to the market
conditions.
The Group anticipates that the residual values of its property, plant and equipment will be insignificant. As a result, residual values are not being
taken into consideration for the computation of the depreciable amount.
Changes in the expected level of usage and technological development could impact the economic useful lives and/or the residual values of these
assets, therefore future depreciation charges could be revised.
(ii)
Income taxes
There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Group
recognises 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 period in which such determination is made.
4.Significant accounting policies (Cont’d)
(a)Critical accounting estimates and judgements (Cont’d)
Impairment of assets
When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the cash-generating unit to which the asset
is allocated, the Group is required to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable
discount rate in order to determine the present value of those cash flows.
(iv)
Amortisation of development costs
Changes in the expected level of usage and technological development could impact the economic useful lives. Therefore future amortisation
charges could be revised.
(v)
The Group makes provision for doubtful debts based on an assessment of the recoverability of receivables. Provisions are applied to receivables
where events or changes in circumstances indicate that the carrying amounts may not be recoverable. Management specifically analyses historical
bad debt, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment terms when making a
judgement to evaluate the adequacy of the provision for doubtful debts of receivables. Where the expectation is different from the original estimate,
such difference will impact the carrying value of receivables.
(vi)
Allowance for 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.
(vii) Fair values estimates for certain financial assets and liabilities
The Group carries certain financial assets and liabilities at fair value, which require extensive use of accounting estimates and judgement. While
significant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would
differ if the Group uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect profit and equity.
(b)Functional and foreign currency
(i)
Functional and presentation currency
The functional currency of each entity in the Group is the currency of the primary economic environment in which the entity operates.
The financial statements are presented in Ringgit Malaysia (RM) which is the Group’s functional and presentation currency.
(ii)
Transactions and balances
Transactions in foreign currency are converted into RM at the approximate rates of exchange ruling at the transaction dates. Transactions in foreign
currency are measured in the respective functional currencies of the Group and are recorded on initial recognition in the functional currencies at
exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the balance sheet date are translated at the
rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined.
All exchange differences are taken to the income statement.
45
(iii)
(c)Financial instruments
46
Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the instruments.
Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and
losses relating to a financial instrument classified as a liability, are reported as an expense or income. Distributions to holders of financial instruments
classified as equity are charged directly to equity.
Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset
and settle the liability simultaneously.
Financial instruments recognised in the balance sheet are disclosed in the individual policy statement associated with each item.
(d)Basis of consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to 30 June 2010.
A subsidiary is defined as a company in which the parent company has the power, directly or indirectly, to exercise control over its financial and operating
policies so as to obtain benefits from its activities.
All the subsidiaries are consolidated using the purchase method. Under the purchase method, the results of subsidiaries acquired or disposed off are
included from the date of acquisition or up to the date of disposal. At the date of acquisition, the fair values of the subsidiaries’ net assets are determined
and these values are reflected in the consolidated financial statements. The cost of acquisition is measured at the aggregate of the fair values, at the date
of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any
costs directly attributable to the business combination.
Intragroup transactions, balances and unrealised gains on transactions are eliminated; unrealised losses are also eliminated unless cost cannot be
recovered. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of
the Group.
(e)Investment in subsidiaries
Investment in subsidiaries are stated at fair value in the balance sheet of the Company, and is reviewed for impairment at the end of the financial year if
events or changes in circumstances indicate that the carrying value may not be recoverable.
On the disposal of such investments, the difference between the net disposal proceeds and the carrying amount of the investments is taken to the income
statement.
(f)
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.
Property, plant and equipment (Cont’d)
Depreciation is calculated under the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation
of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used
for this purpose are:-
Industrial buildings and installations
Machinery and equipment
Motor vehicles
Office equipment
Computer equipment
Furniture and fittings
Renovation
The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at each balance sheet date to ensure that the amount,
method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits
embodied in the items of the property, plant and equipment.
Building and machinery under construction represents assets which are not ready for commercial use at the balance sheet date. Building and machinery
under construction are stated at cost, and are depreciated accordingly when the assets are completed and ready for commercial use.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss
arising from derecognition of the asset is included in the income statement in the year the asset is derecognised.
2% - 10%
10%
10%
10%
20%
10%
10%
(g)Borrowing costs
Borrowing costs incurred on the construction of property, plant and equipment which require a period of time to get them ready for their intended use are
capitalised and included as part of the cost of the related assets.
For borrowing associated with a specific asset, the actual rate on that borrowing is used. Otherwise, a weighted average cost of borrowings is used.
All other borrowing costs are charged to the income statement as expenses in the period in which they are incurred.
(h)Investment properties
Investment properties are property held either to earn rental income or for capital appreciation or for both. Investment properties are stated at cost less
accumulated depreciation and impairment losses, if any, consistent with the accounting policy for property, plant and equipment as stated in Note 4 (f) to
the financial statement.
Investment properties are derecognised when they have either been disposed off or when the investment property is permanently withdrawn from use and
no future benefit is expected from its disposal.
On the derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount is charged to the income
statement.
47
(f)
(i)Impairment of assets
The carrying values of assets, other than financial assets, inventories and deferred tax assets, are reviewed at each balance sheet date for impairment
when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable
amounts. The recoverable amount of the assets is the higher of the assets’ net selling price and its value-in-use, which is measured by reference to
discounted future cash flow.
An impairment loss is charged to the income statement immediately.
In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase
in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the
asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the
income statement immediately.
(j)
The prepaid land lease payments comprise the up-front payments made for the leasehold interest in land and are amortised on a straight line basis over
the lease terms.
48
(k)Research and development expenditure
Research expenditure is recognised as an expense when it is incurred.
Development expenditure is recognised as an expense except that expenditure incurred on development projects are capitalised as long-term assets to
the extent that such expenditure is expected to generate future economic benefits. Development expenditure is capitalised if, and only if an entity can
demonstrate all of the following:(i)
its ability to measure reliably the expenditure attributable to the asset under development;
(ii)
the product or process is technically and commercially feasible;
(iii)
its future economic benefits are probable;
(iv)
its ability to use or sell the developed asset; and
(v)
the availability of adequate technical, financial and other resources to complete the asset under development.
Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses, if any. Development expenditure initially
recognised as an expense are not recognised as assets in the subsequent period.
The development expenditure is amortised on a straight-line method over a period of not exceeding 5 years when the products are ready for sale or use.
In the event that the expected future economic benefits are no longer probable of being recovered, the development expenditure is written down to its
recoverable amount.
(l)Assets acquired under hire purchase
Plant and equipment acquired under hire purchase are capitalised in the financial statements. Each hire purchase payment is allocated between the liability
and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding outstanding obligations due under the hire
purchase after deducting finance charges are included as liabilities in the financial statements.
Finance charges are allocated to the income statement over the period of the respective hire purchase agreements.
Plant and equipment acquired under hire purchase are depreciated over the useful lives of the assets.
(m) Provisions
(n)Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average basis, and comprises the purchase price
and incidentals incurred in bringing the inventories to their present location and condition. Cost of finished goods and work-in-progress includes the cost
of materials, labour and an appropriate proportion of production overheads.
Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale.
Where necessary, due allowance is made for all damaged, obsolete and slow-moving items.
(o)Receivables
Receivables are carried at anticipated realisable value. Bad debts are written off in the period in which they are identified. An estimate is made for doubtful
debts based on a review of all outstanding amounts at the balance sheet date.
(p)
Payables
Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received.
(q)Income taxes
Income taxes for the year comprise current and deferred tax.
Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been
enacted or substantively enacted at the balance sheet date.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts in the financial statements.
49
Provisions are recognised when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each balance
sheet date and adjusted to reflect the current best estimate. Where 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. Where discounting is used, the increase in the provision due to the
passage of time is recognised as finance cost.
(q)Income taxes (Cont’d)
50
Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the acquirer’s interest in
the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs or from the initial recognition
of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable
profit.
Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that
future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled,
based on the tax rates that have been enacted or substantively enacted at the balance sheet date.
Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the
deferred tax is also charged or credited directly to equity, or when it arises from a business combination that is an acquisition, in which case the deferred
tax is included in the resulting goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent
liabilities over the business combination costs. The carrying amounts of deferred tax assets are reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised.
(r)
Government grants
Government grants are recognised at fair value when there is reasonable assurance that the Group will comply with the conditions attaching to them and
the grants will be received. Grants related to purchase of assets are treated as deferred income and allocated to income statement over the useful lives of
the related assets while grants related to expenses are treated as other income in the income statement.
(s)Equity Instruments
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from proceeds.
Dividends on ordinary shares are recognised as liabilities when approved for appropriation.
(t)Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, bank overdrafts and short-term highly liquid investments that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(u)Segmental Information
Segment revenues and expenses are those directly attributable to the segments and include any joint revenue and expenses where a reasonable basis
of allocation exists. Segment assets include all assets used by a segment and consist principally of property, plant and equipment (net of accumulated
depreciation, where applicable), other investments, inventories, receivables, and cash and bank balances.
Most segment assets can be directly attributed to the segments on a reasonable basis. Segment assets do not include income tax assets, whilst segment
liabilities do not include income tax liabilities and borrowings from financial institutions.
Segment revenue, expenses and results include transfers between segments. The prices charged on intersegment transactions are based on normal
commercial terms. These transfers are eliminated on consolidation.
(v)
Employee benefits
(i)
Short-term benefits
Wages, salaries, paid annual leave, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by
employees of the Group.
(ii)
Defined contribution plans
The Group’s contributions to defined contribution plans are charged to the income statement in the period to which they relate. Once the contributions
have been paid, the Group has no further liability in respect of the defined contribution plans.
(iii)
Share-based payment transactions
51
At grant date, the fair value of options granted to employees is recognised as an employee expense, with a corresponding increase in equity, over
the period in which the employees become unconditionally entitled to the options. The amount recognised as an expense is adjusted to reflect the
actual number of share options that are expected to vest.
(w)Related parties
A party is related to an entity if:(i)
directly, or indirectly through one or more intermediaries, the party:•
controls, is controlled by, or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries);
•
has an interest in the entity that gives it significant influence over the entity; or
•
has joint control over the entity;
(ii)
the party is an associate of the entity;
(iii)
the party is a joint venture in which the entity is venturer;
(iv)
the party is a member of the key management personnel of the entity or its parent;
(v)
the party is a close member of the family of any individual referred to in (i) or (iv);
(vi)
the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with,
directly or indirectly, any individual referred to in (iv) or (v); or
(vii) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity that is related party of the entity.
(x)Contingent liabilities and contingent assets
52
A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more
uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because
it is not probable that outflow of economic resources will be required or the amount of obligation cannot be measured reliably.
A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so
that the outflow is probable, it will then be recognised as a provision.
A contingent asset is a probable asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of
one or more uncertain events not wholly within the control of the Group.
(y)Revenue recognition
(i)
Sale of goods
Sales are recognised upon the transfer of risks and rewards of ownership of goods and net of returns and trade discounts.
(ii)
Interest income
Interest income is recognised on an accrual basis.
(iii)
Management fee
Management fee is recognised on an accrual basis.
(iv)
Rental income
Rental income is recognised on an accrual basis.
5.Revenue
Group
Sale of goods
Management fees
Company
2010
2009
2010
2009
RM’000
RM’000
RM’000
RM’000
102,357
89,994
-
-
-
-
300
300
102,357
89,994
300
300
6.Other operating income
Group
Amortisation of deferred income
Company
2010
2009
2010
2009
RM’000
RM’000
RM’000
RM’000
26
26
-
-
213
17
-
-
2,032
2,080
-
-
-
986
-
-
Gain on disposal of property, plant and equipment
33
15
-
-
Interest income
47
97
-
-
Rental income
33
62
-
-
Miscellaneous
122
269
21
5
2,506
3,552
21
5
Bad and doubtful debts recovered
Gain on foreign currency exchange:
- realised
- unrealised
Group
Short-term employee benefits
Contributions to defined contribution plan
Share options granted under ESOS (Note 25)
Other personnel expenses
Company
2010
2009
2010
2009
RM’000
RM’000
RM’000
RM’000
20,760
18,016
221
211
1,873
1,649
5
4
-
73
-
73
1,015
977
-
-
23,648
20,715
226
288
Included in employee benefits expenses are key management personnel compensation as disclosed in Note 32(d) to the financial statements.
8.Finance costs
Group
Company
2010
2009
2010
2009
RM’000
RM’000
RM’000
RM’000
4,311
1,082
-
-
810
573
1
5
Interest expense on:
- Term loan
- Other bank borrowings
Less: Interest expense capitalised in property, plant and equipment
Interest expense recognised in the income statement
5,121
1,655
1
5
(4,274)
(1,050)
-
-
847
605
1
5
7.Employee benefits expenses
53
9.
The following amounts have been included in arriving at profit/(loss) before tax:
Group
Company
2010
2009
2010
2009
RM’000
RM’000
RM’000
RM’000
- statutory audit
43
42
12
12
- other services
110
40
66
13
1
148
-
-
Auditors’ remuneration:
Bad debts written off
Depreciation and amortisation:
54
2,875
2,509
-
-
- investment properties
- property, plant and equipment
26
26
-
-
- prepaid land lease payments
52
51
-
-
- development expenditure
17
15
-
-
Directors’ remuneration:
- fees
182
173
182
173
1,408
1,582
-
-
- other short term employee benefits
162
150
-
-
Inventories written down
933
657
-
-
- realised
1,084
-
-
-
- unrealised
1,031
-
-
-
294
584
-
-
- emoluments
Loss on foreign exchange:
Rental of equipment
39
28
-
-
Rental of premises
231
204
-
-
Research and development expenses
425
191
-
-
10.Income tax expense/(credit)
Group
Company
2010
2009
2010
2009
RM’000
RM’000
RM’000
RM’000
Current income tax:
Tax expense for the year
Over provision in prior years
6
33
-
-
(11)
(35)
-
(4)
(5)
(2)
-
(4)
-
(8)
-
-
-
(129)
-
-
Deferred tax (Note 17):
Relating to origination and reversal of temporary differences
Under provision of deferred tax credit in prior years
Reversal of deferred tax asset
-
-
-
750
(137)
-
-
745
(139)
-
(4)
The deferred tax asset has been reversed during the financial year as the Group does not expect it to be realised in the foreseeable future due to the expected
availability of additional tax incentives.
A reconciliation of income tax expense applicable to profit/(loss) before tax at the statutory income tax rate to income tax expense at the effective income tax rate
of the Group and of the Company is as follows:
2010
2009
RM’000
RM’000
12,466
8,985
3,117
2,247
Group
Profit before tax
Taxation at Malaysian statutory tax rate of 25%
Effect of income not subject to tax
Effect of expenses not deductible for tax purposes
Effect of double deduction tax incentives
Over provision of income tax in prior years
Under provision of deferred tax credit in prior years
-
(246)
192
285
(3,303)
(2,261)
(11)
(35)
-
(129)
Reversal of deferred tax assets
750
Income tax expense/(credit)
745
(139)
55
Total income tax expense/(credit)
750
10.Income tax expense/(credit) (Cont’d)
2010
2009
RM’000
RM’000
Company
(238)
(310)
Taxation at Malaysian statutory tax rate of 25%
(60)
(77)
Effect of expenses not deductible for tax purposes
60
77
Loss before tax
56
Over provision of income tax in prior years
-
(4)
Income tax expense/(credit)
-
(4)
11.Earnings per share
The basic earnings per share for the financial year is arrived at by dividing the Group’s profit after tax of RM11,721,000 (2009: RM9,124,000) by the weighted
average number of ordinary shares of RM0.50 each in issue during the financial year of 123,806,000 (2009: 123,806,000).
The effect on the diluted earnings per share for the current financial year arising from the assumed conversion of the existing ESOS is anti-dilutive. Accordingly,
the diluted earnings per share for the current financial year is presented as equal to basic earnings per share.
12.
Cost
Accumulated
depreciation
Carrying
amount
RM’000
RM’000
RM’000
At 30 June 2010
14,455
(3,598)
10,857
21,216
(13,737)
7,479
2,089
(1,357)
732
Motor vehicles
Office equipment
625
(438)
187
Computer equipment
3,883
(2,025)
1,858
969
(702)
267
130
(35)
Renovation
Building and machinery under construction
137,904
Total at 30 June 2010
181,271
(21,892)
95
137,904
159,379
12.
Accumulated
Carrying
Cost
depreciation
amount
RM’000
RM’000
RM’000
At 30 June 2009
14,455
(3,261)
11,194
20,378
(12,012)
8,366
2,091
(1,374)
717
596
(402)
194
Computer equipment
3,433
(1,455)
1,978
967
(641)
326
Renovation
119
(22)
97
Motor vehicles
Office equipment
97,621
139,660
(19,167)
Carrying
97,621
120,493
Carrying
amount as at
Depreciation
amount as at
1.7.2009
Additions
Disposals
charges
30.6.2010
RM’000
RM’000
RM’000
RM’000
RM’000
11,194
-
-
(337)
10,857
8,366
838
-
(1,725)
7,479
Motor vehicles
717
143
-
(128)
732
Office equipment
194
29
-
(36)
187
Computer equipment
1,978
458
(3)
(575)
1,858
326
2
-
(61)
267
97
11
-
(13)
97,621
40,283
-
-
120,493
41,764
(3)
Renovation
Total
(2,875)
95
137,904
159,379
Total at 30 June 2009
57
12.
Carrying
Carrying
amount as at
58
Depreciation
amount as at
1.7.2008
Additions
charges
30.6.2009
RM’000
RM’000
RM’000
RM’000
11,532
-
(338)
11,194
9,468
569
(1,671)
8,366
717
Motor vehicles
767
72
(122)
Office equipment
212
16
(34)
194
Computer equipment
791
1,458
(271)
1,978
364
23
(61)
326
Renovation
102
7
(12)
13,161
84,460
Total
36,397
86,605
97
97,621
-
120,493
(2,509)
(a)
The carrying amount of a motor vehicle held under hire purchase arrangement in prior year was RM311,000.
(b)
The Group’s property, plant and equipment include borrowing costs arising from bank loans borrowed specifically for the purpose of the construction of
the building and machinery. During the financial year, the borrowing costs capitalised as property, plant and equipment amounted to RM4,274,000 (2009:
RM1,050,000).
(c)
The carrying amount of property, plant and equipment pledged to secure borrowings as referred to in Note 29(i) are as follows:Group
2010
2009
RM’000
RM’000
10,857
11,194
137,904
97,621
148,761
108,815
13.Investment properties
Group
2010
2009
RM’000
RM’000
2,105
2,105
430
404
26
26
456
430
1,649
1,675
Cost
At 1 July/30 June
Accumulated depreciation
At 1 July
Depreciation charge for the year
At 30 June
59
Net carrying amount
The investment properties comprise freehold land and buildings, which are charged as securities for borrowings granted to the Group as referred to in Note
29(i).
Fair value has been determined based on valuations at the balance sheet date. Valuations are performed by accredited independent valuers based on comparison
method. The fair value of the investment properties as at balance sheet date was RM2,540,000 (2009: RM2,235,000).
14.
Group
At 1 July
Amortisation for the year
At 30 June
2010
2009
RM’000
RM’000
4,449
4,500
(52)
(51)
4,397
4,449
4,397
4,449
Analysed as:
Long term leasehold land
Prepaid land lease payments are charged as securities for borrowings granted to the Group as referred to in Note 29(i).
15.
Development expenditure
Group
Cost
60
2010
2009
RM’000
RM’000
1,664
1,412
Accumulated amortisation
(758)
(741)
Net carrying amount
906
671
At 1 July
671
428
Additional development expenditure capitalised
252
258
Amortisation for the year
(17)
(15)
At 30 June
906
671
16.Investment in subsidiaries
Company
Unquoted shares, at valuation
Subsidiaries
Details of the subsidiaries are as follows:
Name of subsidiaries
Country of
incorporation
Effective equity
interest
2010
2009
%
%
2010
2009
RM’000
RM’000
90,443
78,482
Principal activities
Kotra Pharma (M) Sdn Bhd
Malaysia
100
100
Development, manufacture and trading of pharmaceutical and
healthcare products
Appeton Healthcare Sdn Bhd
Malaysia
100
100
Dormant
17.
Deferred tax assets
Group
2010
2009
RM’000
RM’000
At 1 July
750
613
Recognised in the income statement (Note 10)
(750)
137
At 30 June
-
750
Presented after appropriate offsetting as follows:
Deferred tax liabilities
(3,765)
(2,811)
Deferred tax assets
3,765
3,561
-
750
The component and movement of deferred tax liabilities and assets during the financial year are as follows:
Deferred tax liabilities:Development
At 1 July 2008
Recognised in the income statement
At 30 June 2009
Recognised in the income statement
At 30 June 2010
Accelerated
expenditure
capital
capitalised
allowance
Total
RM’000
RM’000
RM’000
(72)
(2,481)
(2,553)
(96)
(162)
(258)
(168)
(2,643)
(2,811)
(58)
(896)
(954)
(226)
(3,539)
(3,765)
61
17.
Deferred tax assets (Cont’d)
Deferred tax assets:-
At 1 July 2008
Recognised in the income
statement
62
At 30 June 2009
Recognised in the income
statement
At 30 June 2010
Unabsorbed
tax losses
Unutilised
capital and
industrial
building
allowances
Provision
Payables
Others
Total
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
1,190
-
281
1,646
49
3,166
-
231
-
164
-
395
1,190
231
281
1,810
49
3,561
791
204
840
3,765
373
1,563
(231)
-
281
(729)
1,081
At the balance sheet date, the Group has unutilised tax losses and other unused tax credits of approximately RM349,000 and RM3,194,000 respectively that are
available for offset against future taxable profits of the Group, for which no deferred tax asset is recognised due to uncertainty of its recoverability in view of the
expected availability of additional tax incentives.
18.Inventories
Group
2010
2009
RM’000
RM’000
11,627
7,592
At cost:
Raw materials
Work-in-progress
Finished goods
98
55
15,381
13,464
27,106
21,111
1,121
-
28,227
21,111
At net realisable value:
Finished goods
19.Trade receivables
Group
Trade receivables
Less: Provision for doubtful debts
2010
2009
RM’000
RM’000
38,397
31,180
(716)
(768)
30,464
37,629
The Group’s normal trade credit terms range from 60 to 120 days. Other credit terms are assessed and approved on a case-by-case basis.
Included in trade receivables are amounts due from related parties as disclosed in Note 32(c) to the financial statements. The Group has no significant
concentration of credit risk that may arise from exposure to a single debtor or to groups of debtors.
The foreign currency exposure profile of trade receivables at the balance sheet date are as follows:Group
United States Dollar
Singapore Dollar
2010
2009
RM’000
RM’000
20,851
11,332
263
302
21,114
11,634
20.Other receivables
Group
Company
2010
2009
2010
2009
RM’000
RM’000
RM’000
RM’000
Deposits
140
184
1
1
Other receivables
936
1,311
-
-
Advances to suppliers of property, plant and equipment
890
6,649
-
-
87
122
-
-
2,053
8,266
1
1
Prepayments
63
20.Other receivables (Cont’d)
The foreign currency exposure profile of other receivables at the balance sheet date are as follows:Group
2010
2009
RM’000
RM’000
Euro
247
2,229
628
1,047
Philippine Peso
64
28
492
903
3,768
21.Amounts due from subsidiaries
The amounts due from subsidiaries are non-trade in nature, unsecured, interest-free and repayable on demand.
22.Cash and cash equivalents
Group
Cash on hand and at banks
Deposits with a licensed bank
Company
2010
2009
2010
2009
RM’000
RM’000
RM’000
RM’000
8,132
6,962
28
69
-
1,600
-
-
28
69
Cash and bank balances
8,132
8,562
Less: Bank overdrafts (Note 29)
(8,418)
(3,792)
Cash and cash equivalents
(286)
4,770
-
-
28
69
The weighted average effective interest rate and the average maturity of deposits in prior year was 1.15% per annum and 1 day respectively.
The foreign currency exposure of cash and bank balances at the balance sheet date are as follows:Group
Euro
Singapore Dollar
2010
2009
RM’000
RM’000
31
1
2,715
3,666
126
298
2,872
3,965
23.Share capital
Number of ordinary
shares of RM0.50 each
Amount
2010
2009
2010
2009
‘000
‘000
RM’000
RM’000
Authorised
200,000
200,000
100,000
100,000
Issued and fully paid
123,806
123,806
61,903
61,903
An Employees’ Share Option Scheme (ESOS) was approved by the Securities Commission on 22 April 2003 and the shareholders at an Extraordinary General
Meeting held on 10 July 2003.
The principal features of the ESOS are as follows:The maximum number of new ordinary shares of RM0.50 each to be offered shall not exceed 15% of the issued and paid-up share capital of the Company
at any point of time during the existence of the ESOS.
(b)
Eligible directors or employees of the Group are directors or employees of the Group who have been confirmed in the service of the Group prior to the offer
or, if the employee is employed under contract basis, the contract should be for a duration of at least one (1) year.
(c)
The option price may be subjected to a discount of not more than 10% of the average of the market quotation of the shares as shown in the daily official list
issued by Bursa Malaysia Securities Berhad for the five trading days immediately preceding the offer date, or at par value of the shares of the Company,
whichever is higher.
(d)
An Option is personal to the grantee. Save and except as provided in Clause 20.1 of the Bye-Laws, an Option shall be non-assignable and nontransferable.
(e)
The ESOS is in force for a period of 10 years from 24 July 2003 and expires on 23 July 2013.
(a)
65
23.Share capital (Cont’d)
The movements in the share options during the financial year were as follows:
Date of offer
Exercise
period
Exercise price per
ordinary share
During the year
Balance at
1.7.2009
Granted
Lapsed
Balance at
30.6.2010
RM
66
24.7.2003
24.7.2004
0.58
1,909,920
-
(376,280)
1,533,640
24.7.2003
24.7.2006
0.58
3,820,280
-
(752,560)
3,067,720
24.7.2003
24.7.2009
0.58
3,833,920
-
(752,560)
3,081,360
15.6.2004
15.6.2005
0.51
220,000
-
(1,320)
218,680
15.6.2004
15.6.2007
0.51
440,000
-
(2,640)
437,360
15.6.2004
15.6.2010
0.51
440,000
-
(2,640)
437,360
12.7.2005
12.7.2006
0.53
188,200
-
(21,200)
167,000
12.7.2005
12.7.2008
0.53
462,000
-
(42,400)
419,600
12.7.2005
12.7.2011
0.53
462,000
-
(42,400)
419,600
21.7.2006
21.7.2007
0.53
214,400
-
(35,200)
179,200
21.7.2006
21.7.2009
0.53
448,800
-
(70,400)
378,400
21.7.2006
21.7.2012
0.53
448,800
-
(70,400)
378,400
2.7.2007
2.7.2008
0.78
143,000
-
(30,800)
112,200
2.7.2007
2.7.2010
0.78
286,000
-
(61,600)
224,400
2.7.2007
2.7.2012
0.78
286,000
-
(61,600)
224,400
13,603,320
-
(2,324,000)
11,279,320
Options exercisable in a particular year but not exercised can be carried forward to the subsequent years provided they are exercised prior to the expiry date of
the ESOS on 23 July 2013.
24.Share premium reserve
The share premium reserve arose from the issue of shares by way of private placement and public offer less amounts incurred for listing expenses and utilised
for bonus share issue.
25.Share options reserve
Group and Company
2010
2009
RM’000
RM’000
314
241
-
73
Share options granted under ESOS:
At 1 July
Addition during the year (Note 7)
At 30 June
(3)
311
314
The share option reserve represents the equity-settled share options granted to employees. This reserve is made up of the cumulative value of services received
from employees recorded on grant of share options.
Other reserve of the Company represents the changes in the fair value of the investment in subsidiary less amount utilised for bonus share issue.
27.Retained earnings
Subject to the agreement of the tax authorities, at the balance sheet date, the Company has:(a)
tax-exempt income of approximately RM5,296,000 (2009: RM5,296,000) available for the purpose of paying tax-exempt dividends; and
(b)
tax credits under Section 108 of the Income Tax Act, 1967 to frank the payment of dividends of approximately RM942,000 (2009: RM942,000) out of its
retained earnings.
The balance of the retained earnings, if distributed as dividends, will be taxed at the statutory tax rate.
At the balance sheet date, the Company has not elected for the single tier tax system. When the tax credit balance is fully utilised, or by 31 December 2013 at the
latest, the Company will automatically move to the single tier tax system. Under the single tier tax system, tax on the Company’s profit is a final tax, and dividends
distributed to the shareholders will be exempted from tax.
26.Other reserve
67
28.
Deferred income
Group
68
2010
2009
RM’000
RM’000
Cost
261
261
Less: Deferred income recognised to date
(241)
(215)
20
46
At 1 July
46
72
Recognised as income during the financial year
(26)
(26)
At 30 June
20
46
Deferred income relates to government grant received by the Group in respect of purchase of plant and equipment.
29.Borrowings
Group
2010
2009
RM’000
RM’000
8,418
3,792
Short-term borrowings
Unsecured:
Bank overdraft
Bankers’ acceptances
8,286
1,895
16,704
5,687
8,301
7,270
-
15
Secured:
Finance lease payables
Term loans
4,556
317
29,561
13,289
29.Borrowings (Cont’d)
Group
2010
2009
RM’000
RM’000
85,194
63,045
8,418
3,792
16,587
9,165
Long-term borrowings
Secured:
Term loans
Total borrowings
Bank overdraft (Note 22)
Finance lease payables
Term loans
15
89,750
63,362
114,755
76,334
Maturity of borrowings (excluding finance lease payables)
Within one year
29,561
13,274
More than 1 year and less than 2 years
8,442
7,000
More than 2 years and less than 5 years
16,955
21,000
Five years or more
59,797
35,045
114,755
76,319
The finance lease payables in prior year bear interest rate of 2.74% per annum.
The weighted average effective interest rates per annum at the balance sheet date of borrowings, excluding finance lease payables, were as follows:
Group
2010
2009
%
%
Bank overdrafts
6.24
5.55
2.89
3.77
Term loans
5.59
4.83
The unsecured short term borrowings of the Group are guaranteed by the Company.
69
-
29.Borrowings (Cont’d)
The secured short-term borrowings and term loans are secured by:
(i)
fixed charges over certain assets of the Group as disclosed in Note 12, Note 13 and Note 14 to the financial statements;
(ii)
specific debenture for RM25,000,000 over a subsidiary’s machinery under construction;
(iii)
debentures over a subsidiary’s all fixed and floating assets both present and future; and
(iv)
corporate guarantee from the Company.
The foreign currency exposure of borrowings at the balance sheet date are as follows:-
70
Group
2010
2009
RM’000
RM’000
5,314
-
Euro
1,347
2,796
6,661
2,796
30.Trade payables
The normal trade credit terms granted to the Group range from 60 to 90 days. Included in trade payables is an amount due to a related party as disclosed in Note
32(c) to the financial statements.
The foreign currency exposure profile of trade payables at the balance sheet date are as follows:Group
2010
2009
RM’000
RM’000
-
559
Euro
1,525
5,743
1,029
460
110
-
Australian Dollar
Philippine Peso
Singapore Dollar
6
12
2,670
6,774
31.Other payables
Group
Company
2010
2009
2010
2009
RM’000
RM’000
RM’000
RM’000
Accruals
2,334
2,120
102
33
Payroll liabilities
3,427
3,260
-
-
Due to suppliers of property, plant and equipment
2,139
3,762
-
-
Other payables
1,243
1,064
-
-
9,143
10,206
102
33
32.Related party disclosures
(b)
For the purpose of the financial statements, the Group and the Company have related party relationships with:(i)
its subsidiaries and directors;
(ii)
the directors who are key management personnel;
(iii)
companies in which key management personnel have significant financial interests; and
(iv)
a company in which a close member of the family of certain key management personnel has significant financial interests.
(a)
71
In addition to the information disclosed elsewhere in the financial statements, the Group and the Company carried out the following transactions with its
related parties during the financial year:2010
2009
RM’000
RM’000
-
64
- rental of premises paid/payable
95
92
- royalty paid/payable
32
38
590
305
300
300
Group
Companies in which key management personnel have significant financial interests:
- contract manufacturing cost paid/payable
A company in which a close member of the family of certain key management personnel has significant
financial interests:
- sale of goods
Company
A subsidiary
- management fee received/receivable
32.Related party disclosures (Cont’d)
(c)
The outstanding balances at the balance sheet date are as follows:
Group
2010
2009
RM’000
RM’000
Companies in which key management personnel have significant financial interests:
- trade receivables
- trade payables
16
67
100
163
188
148
32
17
A company in which close members of the family of certain key management personnel have significant
financial interests:
72
- trade receivables
- trade payables
(d)
Compensation of key management personnel
Group
Company
2010
2009
2010
2009
RM’000
RM’000
RM’000
RM’000
Directors’ remuneration
- fees
- emoluments
- other short-term employee benefits (including estimated
monetary value of benefits-in-kind)
182
173
182
173
1,408
1,582
-
-
167
154
4
4
1,757
1,909
186
177
Executive directors of the Group and Company have been granted the following number of options under the ESOS:
Group and Company
At 1 July
Rescindment
2010
2009
‘000
‘000
7,200
8,800
-
Lapsed
(1,800)
At 30 June
5,400
(1,600)
7,200
The share options were granted on the same terms and conditions as those offered to other employees of the Group. In prior year, certain key management
personnel voluntarily accepted a rescindment of 1,600,000 of the above ESOS granted to them pursuant to an amendment of the Company’s ESOS Bye-Laws
to ensure compliance with the Listing Requirements of Bursa Malaysia Securities Berhad for Main Market.
33.Capital commitments
Group
2010
2009
RM’000
RM’000
For property, plant and equipment:
- approved and contracted for
18,710
37,915
- approved but not contracted for
11,272
13,964
29,982
51,879
34.Segmental reporting
Export
Total
2010
2009
2010
2009
2010
2009
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
External revenue
62,539
58,856
39,818
31,138
102,357
89,994
Profit from operations
15,045
13,318
8,349
900
23,394
14,218
A reconciliation of total profit from operations to total consolidated profit before tax is provided as follows:Total
2010
2009
RM’000
RM’000
Profit from operations for reportable segments
23,394
14,218
Expenses managed on a central basis
(12,587)
(8,180)
2,506
3,552
13,313
9,590
Other operating income
Consolidated profit from operations
Finance cost
Consolidated profit before tax
(847)
12,466
(605)
8,985
Local
73
The segment information in respect of the Group’s operating segments for the year ended 30 June 2010 are as follows:-
35.Fair values of financial assets and liabilities
The carrying amounts of term loans approximate fair values as the interest rates charged are close to market interest rates for loans of similar risk profile as at
balance sheet date.
The carrying amounts of the other financial assets and financial liabilities approximate their fair values due to their relatively short maturity periods.
The nominal amount and net fair value of financial instruments not recognised in the balance sheets of the Company are as follows:
2010
74
Corporate guarantees
*
2009
Nominal
amount
Net fair
value
Nominal
amount
Net fair
value
RM’000
RM’000
RM’000
RM’000
114,755
*
76,334
*
The fair value of contingent liabilities is expected to be minimal as the subsidiary is expected to be able to repay the banking facilities.
List of Properties
Description & Usage
Land area /
Existing Use
Tenure
H.S.(D) 35311 & H.S. (D) 35312.
Lot Nos. PT4239 & PT4240,
Mukim of Cheng, District of Melaka
Tengah, Malacca
Two joined plots of
land with a single
storey factory and
two storey office block
17,611 sq.m./
pharmaceutical
manufacturing plant
Leasehold
expiring on
14.8.2096
Warehouse and
production area
Warehouse and
production area
Two plots of land with
a 2 ½ storey office
building, a store and
a warehouse
2,252.10 sq.m./office,
store & warehouse
Geran 4612, Lot No. 42,
Town Area III (3), District of Melaka
Tengah, Malacca
Commercial site
erected with a double
storey shophouse cum
storehouse
636.2 sq.m./ Double
storey shophouse
Freehold
Lot 9262
Mukim of Cheng, District of Melaka
Tengah, Malacca
One plot of land with
a factory under
construction
23,614 sq.m.
Leasehold
expiring on
15.8.2096
GPP 7972 & GPP 5156,
Lot Nos. 43 & 45, Town Area III (3),
District of Melaka Tengah, Malacca
Freehold
Built-Up Area
(sq. m.)
Approximate
Age of
Building
Net Book Value
as at
30 Jun 2010
RM
5,120.04
13 years
12,564,420
6,613.00
10 years
1,539.31
Office & Store
- 18 years
1,308,002
Warehouse
-14 years
488.9
35 to 39 years
341,000
22,808
-
82,238,965
96,452,387
75
Title / Location
eDividend
29 November 2010
Dear Shareholder,
IMPLEMENTATION OF ELECTRONIC DIVIDEND PAYMENT (“eDIVIDEND”)
What is eDividend?
Electronic Dividend Payment or eDividend refers to the payment of cash dividends by a listed issuer to its shareholders by directly crediting the shareholders’ cash
dividend entitlements into their respective bank accounts. All listed companies are required to pay dividends to shareholders (who have provided their bank account
information) via eDividend for dividends entitlements on or after 1 September 2010.
eDividend Benefits
➢ No More Delays
➢ Assurance of Certainty
➢ Convenience and Simplicity
76
➢ eNotification upon Payment
➢ No Cost to Shareholders
From 3-14 days via cheques to 0/1 day via eDividend to receive dividend payment.
Dividends credited into bank accounts on a timely basis whether Kuala Lumpur or outstation. No more missing cheques/
expired cheques. No unclaimed moneys.
No more visits to banks to deposit cheques. Can opt for one (1) bank account for all CDS accounts. Same bank account applies
for future new CDS accounts.
For shareholders who provide email and mobile details.
No bank charges on dividend amount.
No depository administration fee for registration within grace period.
Registration of eDividend
Shareholders are given a one-year grace period from 19 April 2010 until 18 April 2011 to provide their bank account information to Bursa Malaysia Depository Sdn
Bhd.
How do I provide my bank account information for eDividend?
You must complete the relevant prescribed form and submit it together with the required supporting documents to your stock broker’s office where your CDS account
is maintained.
What supporting documents are required?
Individual CDS Depositor
Corporate CDS Depositor
• NRIC or Passport or Authority Card or other acceptable identification documents.
• Bank Statement or Bank Saving Book or details of your bank account obtained from your bank’s website that has been certified by
your bank or copy of the letter from your bank confirming your bank account details.
• Certified true copy of Certificate of Incorporation/Certificate of Registration.
• Certified true copy of Bank Statement or Bank Saving Book or details of your bank account obtained from your bank’s website that
has been certified by your bank or copy of the letter from your bank confirming your bank account details.
You are encouraged to update your bank account information through your stock broker firm soonest. There will be a fee charged after the grace period.
Contact Details
For more information, kindly refer to the eDividend page at www.bursamalaysia.com
For queries, please contact Bursa Malaysia Customer Care Centre or our Share Registrar, Mega Corporate Services Sdn Bhd as follows:
Bursa Malaysia Customer Care Centre
Tel: (603) 27320067
Email: edividend@bursamalaysia.com
Thank you.
Yours faithfully
Ow Pee Juan (MAICSA 7013304)
Secretary
Mega Corporate Services Sdn Bhd
Tel: 03-26924271
Fax : 03-27325388
NOTICE IS HEREBY GIVEN that the Eleventh Annual General Meeting of the Company will be held at Bunga Melati Room, Level 7, Renaissance Hotel Melaka, Jalan
Bendahara, 75100 Melaka on Wednesday, 22 December 2010 at 10.00 a.m. to transact the following business: AGENDA
ORDINARY BUSINESS
1)
To receive and adopt the Audited Financial Statements for the financial year ended 30 June 2010 together with the reports of the Directors and Auditors
thereon.
RESOLUTION 1
2)
To approve the payment of Directors’ fees amounting to RM182,000 for the year ended 30 June 2010.
3)
To re-elect the following Directors who retire by rotation in accordance with Article 97 of the Company’s Articles of Association and being eligible offer themselves
for re-election:-
4)
5)
Piong Teck Onn
P’ng Beng Hoe
Azhar bin Hussain
RESOLUTION 3
RESOLUTION 4
RESOLUTION 5
To consider and, if thought fit, to pass the following Resolutions pursuant to Section 129 (6) of the Companies Act, 1965:i)
“That Y. Bhg. Tan Sri Datuk Dr. Omar bin Abdul Rahman, a Director who retires in accordance with Section 129 (2) of the Companies Act, 1965, be and is
hereby re-appointed as a Director of the Company to hold office until the conclusion of the next Annual General Meeting.”
RESOLUTION 6
ii)
“That Omar bin Md. Khir, a Director who retires in accordance with Section 129 (2) of the Companies Act, 1965, be and is hereby re-appointed as a Director
of the Company to hold office until the conclusion of the next Annual General Meeting.”
RESOLUTION 7
To re-appoint Messrs Crowe Horwath as auditors of the Company and to authorise the Directors to fix their remuneration.
RESOLUTION 8
SPECIAL BUSINESS
6)
To consider and if thought fit, to pass the following Resolutions with or without modifications: a.Ordinary Resolution – Authority pursuant to 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 new shares in the Company at any time
until the conclusion of the next Annual General Meeting upon such terms and conditions, for such purposes and to such person or persons whomsoever
as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares to be issued does not exceed 10% of the issued
share capital of the Company for the time being, subject always to the approval of all the relevant authorities being obtained for such allotment and
issue.”
RESOLUTION 9
77
i)
ii)
iii)
RESOLUTION 2
b.Ordinary Resolutions – Proposed renewal of the existing shareholders’ mandate for recurrent related party transactions of a revenue or trading
nature and proposed new shareholders’ mandate for new recurrent related party transactions of a revenue or trading nature
That approval be and is hereby given for the Company and/or its subsidiaries to enter into the categories of recurrent related party transactions of a
revenue or trading nature with the following related parties as specified in Section 2.3.2 (a) of the Circular to Shareholders dated 29 November 2010 (“the
Circular”):•
•
•
•
•
•
•
Kwong Onn Tong Sdn. Bhd.
Lonnix (M) Sdn. Bhd.
Appeton Laboratory Sdn. Bhd.
Estate of Piong Nam Kim @ Piong Pak Kim
Thames Bioscience (M) Sdn. Bhd.
Piong Teck Onn
RESOLUTION 10
78
That a mandate is hereby given to the Company and/or its subsidiaries to enter into a new category of recurrent related party transactions of a revenue or
trading nature with the following related party as specified in Section 2.3.2 (b) of the Circular:•
N’Care International Sdn. Bhd.
RESOLUTION 11
Provided always that:i)
the recurrent related party transactions are carried out in the ordinary course of business and on terms not more favourable to the related parties
than those generally available to the public and not detrimental to the minority shareholders of the Company; and
ii)
disclosure is made in the annual report of the aggregate value of all the recurrent related party transactions conducted pursuant to the shareholders’
mandate during the financial year in the manner required under the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa
Securities”);
That the Shareholders’ Mandate shall continue to be in force until:
a)
the conclusion of the next Annual General Meeting of the Company following this Annual General Meeting at which the ordinary resolution for the
shareholders’ mandate is passed, at which time it will lapse, unless a resolution passed at the next Annual General Meeting, whereby the authority
is renewed;
b)
the expiration of the period within which the next Annual General Meeting after the date it is required to be held pursuant to Section 143 (1) of the
Companies Act, 1965 (but shall not extend to such extensions as may be allowed pursuant to Section 143 (2) of the Companies Act, 1965); or
c)
revoked or varied by resolutions passed by the shareholders in a general meeting;
whichever is earliest;
And that the Directors be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required)
to give effect to the transactions contemplated and/or authorised by the Shareholders’ Mandate. Notice of Annual General Meeting
c.Special Resolution – proposed Amendment to the Articles of Association
“That the existing Article 153 of the Company’s Articles of Association be deleted in its entirety and be substituted thereof with the following new Article
153:
Any dividend, interest or other money payable in cash in respect of shares may be paid by cheque or warrant and sent through the post directed to the
address of the holder or paid via electronic transfer of remittance to the account provided by the holder or to such person and to such address as the holder
may in writing direct or, if several persons are entitled thereto in consequence of the death or bankruptcy of the holder, to any one of such persons or to
such person and to such address as such persons may by writing direct. Every such cheque or warrant or electronic transfer of remittance shall be made
payable to the holder of the person to whom it is sent or to such person as the holder or person or persons entitled to the share in consequence of the
death or bankruptcy of the holder may direct and the payment of any such cheque or warrant or electronic transfer of remittance shall operate as a good
discharge to the Company in respect of the dividend represented thereby. Every such cheque or warrant or electronic transfer of remittance shall be sent
at the risk of the person entitled to the money thereby represented.”
RESOLUTION 12
79
OW PEE JUAN
(MAICSA 7013304)
Company Secretary
MAH LI CHEN
(MAICSA 7022751)
Company Secretary
MELAKA
29 November 2010
Notes:1.
A member entitled to attend and vote at the general meeting is entitled to appoint a
proxy/proxies who may but need not be a member of the Company to vote in his/her
stead. If the proxy is not a member, he need not be an advocate, an approved company
auditor or a person approved by the Registrar of Companies.
2.
Where a member appoints more than one (1) proxy, the appointment shall be invalid
unless he/she specifies the proportion of his/her holdings to be represented by each
proxy.
3.
The instrument appointing a proxy shall be in writing under the hand of the appointer
or his/her attorney duly authorised in writing or, if the appointer is a corporation, either
under its common seal or under the hand of an officer or attorney duly authorised.
4.
The instrument appointing a proxy must be deposited at the registered office of the
Company at 48 Jalan Kota Laksamana 2/15, Taman Kota Laksamana, Seksyen
2, 75200 Melaka, not less than forty-eight (48) hours before the time for holding the
meeting or any adjournment thereof.
EXPLANATION NOTES
Resolution 9
The proposed Ordinary Resolution No. 9 under Special Business, if passed, will give the
Directors of the Company authority to issue shares of the Company up to an amount not
exceeding in total 10% of the issued share capital of the Company for such purposes as the
Directors consider would be in the interest of the Company. This would avoid any delay and
cost involved in convening a general meeting to specifically approve such an issue of shares.
This authority, unless revoked or varied at a general meeting, will expire at the next Annual
General Meeting of the Company.
The general mandate sought to grant authority to Directors to allot and issue new shares is a
renewal of the mandate that was approved by the shareholders at the Tenth Annual General
Meeting held on 25 November 2009. The renewal of the general mandate is to provide
flexibility to the Company to issue new shares without the need to convene a separate
general meeting to obtain shareholders’ approval so as to avoid incurring additional cost and
time. The purpose of this general mandate is for possible fund raising exercises including
but not limited to further placement of shares for purpose of funding current and/or future
investment projects, working capital and/or acquisitions.
Up to the date of this Notice, the Company has not issued any new shares pursuant to the
mandate granted to the Directors at the Tenth Annual General Meeting because there was
no need for any fund raising activity for the purpose of investment, acquisition or working
capital.
Resolutions 10 & 11
Please refer to the Circular to the shareholders of the Company dated 29 November 2010
which is despatched together with the Annual Report.
Resolution 12
The proposed Special Resolution for the amendment to Article 153 of the Company’s Articles
of Association is to allow the Company to pay cash dividend electronically by crediting the
dividend into each shareholders’ bank account in line with the eDividend implemented by
Bursa Securities. Please refer to the attached letter to shareholders dated 29 November
2010 on page 76 of this Annual Report in respect of eDividend for further information.
By order of the Board
Statement Accompanying
Pursuant to Rule 8.27(2) of The Main Market Listing Requirements of Bursa Malaysia Securities Berhad
The Director who is standing for re-election at the Eleventh Annual General Meeting is as follows:
1.
2.
3.
4.
5.
Piong Teck Onn
P’ng Beng Hoe
Azhar bin Hussain
Y. Bhg. Tan Sri Datuk Dr. Omar bin Abdul Rahman
Omar bin Md. Khir
The details of the above Directors are set out in the Profile of Directors on pages 2 to 5 of this Annual Report. Their securities holdings in the Company is set out on
page 81 of this Annual Report.
80
As 10 November 2010
Authorised Share Capital Issued and Fully Paid-up Share Capital
Class of Shares
Voting Rights
:
:
:
:
RM100,000,000.00
RM61,902,781.50
Ordinary shares of RM0.50 each
1 vote per ordinary share
ANALYSIS OF SHAREHOLDINGS
Size of Shareholdings
Less than 100 shares
100 to 1,000 shares
1,001 to 10,000 shares
10,001 to 100,000 shares
100,001 to less than 5% of issued shares
5% and above of issued shares
Total
No. of Shareholders
37
130
702
274
63
1
1,207
% of Shareholders
3.0655
10.7705
58.1607
22.7009
5.2196
0.0829
100.0000
No. of Shares held
1,194
57,652
3,098,650
6,995,781
49,027,924
64,624,362
123,805,563
% of Shares held
0.0010
0.0466
2.5028
5.6506
39.6007
52.1983
100.0000
No.
Shareholder
1.
2.
3.
4.
5.
6.
7.
8.
Piong Nam Kim Holdings Sdn. Bhd.
Piong Nam Kim @ Piong Pak Kim*
Piong Teck Onn*
Piong Teck Min*
Piong Teck They*
Y. Bhg. Datuk Piong Teck Yen*
Yong Soon Moi*
Chin Swee Chang**
Direct
64,624,362
1,276,220
1,113,186
2,200
4,514,364
-
No. of Shares Held
%
Indirect
52.20
0.00
64,624,362
0.00
64,624,362
1.03
64,624,362
0.90
64,624,362
+
64,624,362
3.65
64,624,362
0.00
64,624,362
%
0.00
52.20
52.20
52.20
52.20
52.20
52.20
52.20
Notes:
+
Less than 0.01%
*
Deemed interested by virtue of his/her interests in Piong Nam Kim Holdings Sdn. Bhd. pursuant to Section 6A (4) of the Companies Act, 1965.
**
Deemed interested by virtue of her husband’s (Piong Teck Onn) interests in Piong Nam Kim Holdings Sdn. Bhd.
DIRECTORS’ SHAREHOLDINGS
(as per the register of directors’ shareholdings)
No.
Directors
1.
2.
3.
4.
5.
6.
7.
8.
Y. Bhg. Tan Sri Datuk Dr. Omar bin Abdul Rahman
Piong Teck Onn*
Piong Teck Min*
Y. Bhg. Datuk Piong Teck Yen*
Chin Swee Chang**
Omar bin Md. Khir
P’ng Beng Hoe
Azhar bin Hussain
Direct
4,840
1,276,220
2,200
868,060
-
No. of Shares Held
%
Indirect
+
0.00
64,624,362
1.03
64,624,362
+
64,624,362
0.00
64,624,362
0.70
0.00
0.00
-
Notes:
+
Less than 0.01%
*
Deemed interested by virtue of his/her interests in Piong Nam Kim Holdings Sdn. Bhd. pursuant to Section 6A (4) of the Companies Act, 1965.
**
Deemed interested by virtue of her husband’s (Piong Teck Onn) interests in Piong Nam Kim Holdings Sdn. Bhd.
%
0.00
52.20
52.20
52.20
52.20
0.00
0.00
0.00
SUBSTANTIAL SHAREHOLDERS
81
30 LARGEST SHAREHOLDERS
(As per the Register of members)
No.
82
Shareholder
No. of Shares
%
64,624,362
52.1983
Amsec Nominees (Asing) Sdn. Bhd.
Amtrustee Berhad For Galleon Asset Limited (CS-GALLEON)
6,125,402
4.9476
3.
Yong Soon Moi
4,514,364
3.6463
4.
Malaysian Technology Development Corporation Sdn. Bhd.
3,631,423
2.9332
5.
Chin Ai Mei
2,819,801
2.2776
6.
JF Apex Nominees (Tempatan) Sdn. Bhd.
Pledged Securities Account For Teo Kwee Hock (MARGIN)
2,757,500
2.2273
7.
Malaysia Nominees (Tempatan) Sendirian Berhad
Great Eastern Life Assurance (Malaysia) Berhad (LGF)
2,694,120
2.1761
8.
Platinum Essence Sdn. Bhd.
1,870,940
1.5112
1.
Piong Nam Kim Holdings Sdn. Bhd.
2.
9.
Lin Ah Lan
1,825,360
1.4744
10.
Seah Tin Kim
1,675,320
1.3532
11.
Cresdel Holdings Sdn. Bhd.
1,529,160
1.2351
12.
Lok Suet Leng
1,456,000
1.1760
13.
Piong Teck Min
1,276,220
1.0308
14.
Ho Jonathan Lep Kee
1,210,000
0.9773
1,029,300
0.8314
15
Vijay Kanchan
16.
Omar Bin Md. Khir
868,060
0.7011
17.
Piong Teck They
808,280
0.6529
18.
JF Apex Nominees (Tempatan) Sdn. Bhd.
Pledged Securities Account For Teo Siew Lai (MARGIN)
661,300
0.5341
19.
Piong Teck Wah
627,220
0.5066
20.
TA Nominees (Tempatan) Sdn. Bhd.
Pledged Securities Account For Vanitha A/P Kaneson
562,560
0.4544
21.
Yew Lai Mae
540,000
0.4362
22.
Chin Kee Kwong
514,800
0.4158
23.
Chin Chee Keong
512,600
0.4140
24.
Chin Chee Min
512,600
0.4140
25.
Pledged Securities Account For Ting Leong Hua
503,900
0.4070
26.
Kok Hon Seng
487,560
0.3938
27.
Piong Teck Fong
461,560
0.3728
28.
Lembaga Tabung Amanah Warisan Negeri Terengganu
460,164
0.3717
29.
Koay Hooi Lian
458,260
0.3701
30.
Pledged Securities Account For Sellammah A/P Palani Samy
439,000
0.3546
Form Of Proxy
(Before completing this form, please refer to the notes below)
No. of ordinary shares held
NRIC/Company no.
I/We
(FULL NAME IN BLOCK CAPITAL)
of
(FULL ADDRESS)
being a member(s) of KOTRA INDUSTRIES BERHAD hereby appoint the following person(s):-
No.
Name of proxy, NRIC no., & address
No. of ordinary shares represented by proxy
1.
2.
or failing whom, the Chairman of the meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the Eleventh Annual General Meeting of the Company which
will be held at Bunga Melati Room, Level 7, Renaissance Hotel Melaka, Jalan Bendahara, 75100 Melaka, on Wednesday, 22 December 2010 at 10.00 a.m. for the following
purposes:No.
Resolution
For
Against
ORDINARY BUSINESS
1.
To receive and adopt the Audited Financial Statements for the financial year ended 30 June 2010 together with
the reports of the Directors and Auditors thereon.
2.
To approve the payment of Directors’ fees amounting to RM182,000 for the year ended 30 June 2010.
3.
To re-elect Piong Teck Onn as Director.
4.
To re-elect P’ng Beng Hoe as Director.
5.
To re-elect Azhar bin Hussain as Director.
6.
To re-appoint Y. Bhg. Tan Sri Datuk Dr. Omar Bin Abdul Rahman.
7.
To re-appoint Omar Bin Md. Khir.
8.
To re-appoint Messrs Crowe Horwath as auditors of the Company and to authorise the Directors to fix their remuneration.
SPECIAL BUSINESS
9.
Authority pursuant to Section 132D of the Companies Act, 1965 for the Directors to issue shares.
10.
Proposed renewal of the existing shareholders’ mandate for recurrent related party transactions of a revenue or
trading nature.
11.
Proposed new shareholders’ mandate for new recurrent related party transactions of a revenue or trading nature.
12.
Proposed Amendment to the Articles of Association
(Please indicate with an “X” in the appropriate spaces provided above how you wish your votes to be cast on the resolutions specified in the Notice of Eleventh Annual General
Meeting. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/her/their discretion.)
Signed this day
of
Notes:A member entitled to attend and vote at the general meeting is entitled to appoint a proxy/proxies who
may but need not be a member of the Company to vote in his/her stead. If the proxy is not a member,
he need not be an advocate, an approved company auditor or a person approved by the Registrar of
Companies.
Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he/she
specifies the proportion of his/her holdings to be represented by each proxy.
Signature(s) / Common Seal of Shareholder(s)
The instrument appointing a proxy shall be in writing under the hand of the appointer or his/her attorney
duly authorised in writing or, if the appointer is a corporation, either under its common seal or under the
hand of an officer or attorney duly authorised.
The instrument appointing a proxy must be deposited at the registered office of the Company at 48 Jalan
Kota Laksamana 2/15, Taman Kota Laksamana, Seksyen 2, 75200 Melaka, not less than forty-eight
(48) hours before the time for holding the meeting or any adjournment thereof.
please fold here
affix
stamp
KOTRA INDUSTRIES BERHAD
(497632-P)
Taman Kota Laksamana
Seksyen 2
75200 Melaka
please fold here

- Kotra Pharma

Transcription

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