malaysiastock.biz...2016/08/30 · 2 corporate information 3 corporate structure 4 chairman’s...

KOMARKCORP BERHAD (374265-A)

Lot 132, Jalan 16/1, Kawasan Perindustrian Cheras Jaya43200 Balakong, Selangor Darul Ehsan, Malaysia.Tel: [603]9080 3333 Fax: [603]9080 5233Email: [email protected]

www.komark.com.my

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Label withTOMORROW’STechnology

ANNUAL REPORT

2 Corporate Information 3 Corporate Structure4 Chairman’s Statement5 Sustainability Statement6 Distribution Network7 Five-Years Group Financial Highlights8 Notice of Annual General Meeting12 Appendix A15 Directors Profiles17 Key Senior Management18 Statement on Corporate Governance28 Statement on Risk Management and Internal Control31 Audit Committee Report33 Other Information34 Financial Statements108 Analysis of Shareholdings110 Analysis of Warrant Holdings112 List of Properties

Proxy Form

FINANCIAL STATEMENTS

34 Director’s Report38 Statement by Directors38 Statutory Declaration39 Independent Auditors’ Report41 Statements of Financial Position43 Statements of Profit or Loss and Other Comprehensive

Income45 Consolidated Statement of Changes in Equity46 Statement of Changes in Equity47 Statements of Cash Flows49 Notes to the Financial Statements

CONTENTS

KOMARKCORP BERHAD | Annual Report 20162

PT KOMARK LABELS AND LABELLING INDONESIA

KOMARK ENTERPRISECO. LTD. (5053)

SHANGHAI KOMARK LABELS & LABELLING CO. LTD.** (020411)

GUANGZHOU KOMARK LABELS& LABELLING CO. LTD.** (100286)

GENERAL LABELS& LABELLING (M) SDN. BHD.(93225-V)

GENERAL LABELS & LABELLING(PENANG) SDN. BHD.*(146231-W)

GENERAL LABELS & LABELLINGPTE. LTD.(198300123C)

GENERAL LABELS & LABELLING(IPOH) SDN. BHD.*(458045-W)

KOMARK (THAILAND)CO. LTD. (1554/2358)

GENERAL LABELS &LABELLING (JB) SDN. BHD.(480867-X)

49%

100%100%

100%

100%

KOMARK INTERNATIONAL(M) SDN. BHD. (96626-V)

KOMARK INVESTMENTHOLDINGS LTD.** (440077)

50%

99%

91.6%

30%

1%

* ceased operation** in the midst of disposal

100%

100%

100%70%

8.4%

50%

CORPORATE INFORMATION

DIRECTORSKoh Hong Muan @ Koh Gak SiongExecutive Chairman

Koh Chie JooiExecutive Director

Koh Chee MianExecutive Director

Tan Lay ChingIndependent Non-Executive Director

Ihsan bin IsmailIndependent Non-Executive Director

Low Tuck MengIndependent Non-Executive Director

AUDIT COMMITTEETan Lay ChingChairpersonIndependent Non-Executive Director

Ihsan bin Ismail Member of the CommitteeIndependent Non-Executive Director

Low Tuck Meng Member of the CommitteeIndependent Non-Executive Director

REMUNERATION COMMITTEETan Lay ChingChairpersonIndependent Non-Executive Director

Ihsan bin Ismail Member of the CommitteeIndependent Non-Executive Director

Low Tuck MengMember of the CommitteeIndependent Non-Executive Director

Koh Hong Muan @ Koh Gak SiongMember of the CommitteeExecutive Chairman

NOMINATION COMMITTEETan Lay ChingChairpersonIndependent Non-Executive Director

Ihsan bin IsmailMember of the CommitteeIndependent Non-Executive Director

Low Tuck MengMember of the CommitteeIndependent Non-Executive Director

REGISTERED OFFICELot 6.05, Level 6, KPMG Tower8 First Avenue, Bandar Utama47800 Petaling JayaSelangor Darul EhsanTel: 03-7720 1188Fax: 03-7720 1111

PRINCIPAL PLACE OF BUSINESS(Headquarters)Lot 132, Jalan 16/1Kawasan Perindustrian Cheras Jaya43200 BalakongSelangor Darul EhsanTel: 03-9080 3333Fax: 03-9080 5233

AUDITORSOng & Wong(AF0241)Chartered AccountantsUnit C-20-5, Block C20th Floor Megan Avenue II12, Jalan Yap Kwan Seng50450 Kuala LumpurTel: 03-21611000Fax: 03-21669131

REGISTRARBoardroom Corporate Services (KL) Sdn Bhd(Company No. 3775-X)Lot 6.05, Level 6, KPMG Tower8 First Avenue, Bandar Utama47800 Petaling JayaSelangor Darul EhsanTel: 03-7720 1188Fax : 03-7720 1111

PRINCIPAL BANKERSStandard Chartered Bank Malaysia Berhad(Company No. 115793-P)

Malayan Banking Berhad(Company No. 3813-K)

COMPANY SECRETARIESTai Yit Chan (MAICSA 7009143)Chan Yoke Peng (MAICSA 7053966)

STOCK EXCHANGE LISTINGMain Market (Listed in 1997) ofBursa Malaysia Securities Berhad(Company No. 635998-W)

ShareStock Name: KOMARKStock Code: 7017

WarrantsStock Name: KOMARK-WBStock Code: 7017WB

KOMARKCORP BERHAD | Annual Report 2016 3

CORPORATE STRUCTURE

PT KOMARK LABELS AND LABELLING INDONESIA

KOMARK ENTERPRISECO. LTD. (5053)

SHANGHAI KOMARK LABELS & LABELLING CO. LTD.** (020411)

GUANGZHOU KOMARK LABELS& LABELLING CO. LTD.** (100286)

GENERAL LABELS& LABELLING (M) SDN. BHD.(93225-V)

GENERAL LABELS & LABELLING(PENANG) SDN. BHD.*(146231-W)

GENERAL LABELS & LABELLINGPTE. LTD.(198300123C)

GENERAL LABELS & LABELLING(IPOH) SDN. BHD.*(458045-W)

KOMARK (THAILAND)CO. LTD. (1554/2358)

GENERAL LABELS &LABELLING (JB) SDN. BHD.(480867-X)

49%

100%100%

100%

100%

KOMARK INTERNATIONAL(M) SDN. BHD. (96626-V)

KOMARK INVESTMENTHOLDINGS LTD.** (440077)

50%

99%

91.6%

30%

1%

* ceased operation** in the midst of disposal

100%

100%

100%70%

8.4%

50%


PERFORMANCE REVIEW

The FYE 2016 was yet another challenging year for the Group. The Group recorded an increase of 11.45% in revenue to RM155.401 million compared to RM139.433 million recorded in preceding financial year. The Multinational Customers segment continued to contribute substantially to the Group’s revenue.

The Group recorded a profit before taxation of RM2.661 million compared to a loss before taxation of RM11.119 million in the preceding financial year. This was mainly attributable to higher revenue achieved and the strength of the currency for the countries where our subsidiaries operate. In comparison with the preceding financial year, the provision for slow moving inventories, doubtful debts and obsolete inventories written off was considerably lower.

The profit after taxation for the year was RM1.914 million compared to a loss of RM12.781 million for the preceding financial year.

BUSINESS OUTLOOK AND OPERATIONAL STRATEGIES

Due to the expected slower growth in China and the adverse impact of Brexit, the overall growth momentum in Developing Asia is projected to be moderate. The Malaysia economy is expected to register a GDP growth of 4.0 – 4.5% for 2016 compared to 5.0% achieved in 2015.

With a diversified market in the Southeast Asia region (mainly Malaysia, Singapore, Thailand, Indonesia, Vietnam, Philippines), India and Sri Lanka, the Group is in a position to mitigate any potential economic slowdown in Malaysia.

On 28 April 2016, the Group entered into a conditional share purchase agreement (“SPA”) with Lagora HK Limited for the proposed disposal of its entire interest in Komark Investment Holdings Limited (‘KIHL”), a wholly-owned subsidiary company of Komark.

KIHL includes 2 wholly-owned subsidiary companies, namely Shanghai Komark Labels & Labelling Co., Ltd and Guangzhou Komark Labels & Labelling Co., Ltd.

An indicative disposal consideration for the SPA was RM48,000,000 to be satisfied entirely via cash.

CHAIRMAN’S STATEMENT

The shareholders of Komark have approved the SPA in the Extraordinary General Meeting that convened on 18 July 2016 and this disposal is expected to be completed in August 2016. Following the disposal, Komark intends to repay all its bank borrowings, thus be gearing free. Whilst funds will also be used to purchase three (3) new machines which are expected to increase the Group production capacity and efficiency.

The Group will continue to explore new markets for its products with investment in capital expenditure, improve technology and improve staff efficiency through staff development. The Group will continue to adapt to changes and respond positively to meet the challenges of today’s customers’ needs. We will seek continuous improvement in our internal operations to ensure consistency in quality and services. We will pursue continuous product development and innovation to enhance productivity and improve our margins. These initiatives will help us to remain competitive and sustain our business in the long term.

DIVIDEND

The Board of Directors does not recommending any dividend payment for the financial year ended 30 April 2016.

ACKNOWLEDGEMENTS

On behalf of the Board of Directors, I wish to express our sincere appreciation to the Management and staff of the Group for their continued dedication, commitment and loyalty to the Group. I also wish to express our sincere appreciation to our valued shareholders, customers, vendors, business associates, government authorities and bankers for their continued support and cooperation. Last but not least, I regret to inform that Tan Sri Ahmad bin Mohd Don, Datuk Tan Kwe Hee, Dato’ Yeow Wah Chin and Mr Lim Pei Tiam @ Liam Ahat Kiat have resigned as Directors. I would like to take this opportunity to thank them for their contributions and services rendered to the Group since August 2013 and wish them success in all their future endeavours. I also would like to welcome Ms Julie Tan Lay Ching, the Chairperson for Audit, Nomination and Remuneration Committees and Mr Low Tuck Meng to the Board.

Koh Hong Muan @ Koh Gak SiongExecutive Chairman

On behalf of the Board of Directors, I am pleased to present the Annual Report of Komarkcorp Berhad (“Komark”) and its subsidiary Companies (“Group”) for the financial year ended 30 April 2016 (“FYE 2016”).


Komarkcorp Berhad (“KB”) believes in serving the community in a sustainable manner, in all aspects of business operations which enhances the value of stakeholders. We have identified four important pillars to serve the community ethically with integrity.

SUSTAINABILITY STATEMENT

THE ENVIRONMENTThe Group has undertaken various measures to mitigate the adverse impact from our manufacturing operations to the environment such as disposal of chemicals and compliance to Environment Act. We have in place our Environment Policy for our employees to meet and comply with such requirements.

The Group also encourages its employees to reduce our energy and water consumption, reduce the paper usage and to recycle whenever possible.

THE COMMUNITYThe Group continues to contribute to the charitable, social and its employees’ welfare.

THE MARKETPLACEThe Group engages in ethical procurement practices by adopting a standard procedure in the vendor selection and ensures that the supplies are in accordance to the Group’s materials requirements.

The Group also continues to strive to meet the expectation of its shareholders by enhancing the value of the Group in all possible ways.

WORKPLACEThe Group recognises that employees are important assets. In line with this belief, the Group has in place a Safety & Health Policy to provide a safe and healthy working environment to its employees with comprehensive occupational health and safety resources and also a Training Policy to be committed to train and develop its employees to anticipate changing requirements of today working needs and latest technology in the industry. The structured on jobs trainings are provided for new and unskilled employees.

During the year, the Group had organized various trainings including teambuilding event – “Building An Excellent Team” for employees to co-operate and collaborate in the Group.

Through the proper human capital development, the Group aspires to develop its employees to be relevant in today’s working environment.


MALAYSIA HEADQUARTERS - KUALA LUMPUR

SHANGHAI

SINGAPORE

LANGFANG

THAILAND

JOHOR BAHRU GUANGZHOU

INDONESIA

DISTRIBUTION NETWORK


YEAR ENDED 30 APRIL :2016 :2015 :2014 :2013 :2012

OPERATING RESULT (RM'000)Turnover 61,574* 139,433 141,805 136,037 123,346 Profit / (Loss) Before Tax 1,343* (11,119) (28,704) (2,273) 830 Profit / (Loss) After Tax 371* (12,781) (28,909) (4,831) 79 Total Comprehensive Income/(Loss) 90* (2,036) (17,366) (4,036) 1,591

KEY BALANCE SHEET DATA (RM'000)Total Assets 187,369 194,949 204,209 220,447 214,793 Total Interest Bearing Borrowings 43,781 54,327 72,319 69,938 66,019 Total Liabilities 76,425 86,243 105,333 103,799 94,891 Paid-Up Capital 31,158 30,653 81,275 81,275 81,275 Shareholders' Equity 110,944 108,706 98,876 116,648 119,902

SHARE INFORMATIONNo of shares in issued ('000) 124,634 122,614 81,275 81,275 81,275Par value per share (RM) 0.25 0.25 1.00 1.00 1.00

Per share (sen)Basic EPS /(LPS) 0.3* (12.60) (35.60) (6.00) 0.10 Gross Dividend (Recommended) 0.00 0.00 0.00 0.50 0.00 Net Assets 89.02 88.66 121.66 143.52 147.53

FINANCIAL RATIO (%)Return on Equity 0.33* (11.76) (29.24) (4.14) 0.07 Return on Total Assets 0.20* (6.56) (14.16) (2.19) 0.04 Gearing ratio 39.46 49.98 73.14 59.96 55.06

Note: excludes discontinued operations

TURNOVER(RM’000)

PROFIT/LOSS BEFORE TAX(RM’000)

PROFIT/LOSS AFTER TAX(RM’000)

FIVE - YEARS GROUP FINANCIAL HIGHLIGHTS

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NOTICE IS HEREBY GIVEN THAT the Twentieth Annual General Meeting of the Company will be convened and held at Parameswara 1, Philea Mines Beach Resort, Jalan Dulang, Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan on Tuesday, 11 October 2016 at 10.00 a.m. to transact the following businesses:-

A G E N D AAs Ordinary Business

1. To receive the Audited Financial Statements for the financial year ended 30 April 2016 together with the Directors’ and Auditors’ Reports thereon.

Please refer toNote 1 of the

ExplanatoryNotes

2. To approve the Directors’ Fees for the financial year ended 30 April 2016 and the payment thereof.

OrdinaryResolution 1

3. To re-elect the following Director who is retiring under Article 93.1 of the Articles of Association of the Company:-

(i) Encik Ihsan bin Ismail OrdinaryResolution 2

4. To re-elect the following Directors who are retiring under Article 100 of the Articles of Association of the Company:-

(i) Mr Low Tuck Meng OrdinaryResolution 3

(ii) Ms Tan Lay Ching OrdinaryResolution 4

5. To re-appoint Messrs Ong & Wong as Auditors of the Company and to authorise the Directors to fix their remuneration.


As Special Business

To consider and, if thought fit, to pass the following resolutions:-

6. Proposed Authority under Section 132D of the Companies Act, 1965 for the Directors to issue shares


“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to issue shares in the Company at any time until the conclusion of the next Annual General Meeting (“AGM”) upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares to be issued does not exceed ten per centum (10%) of the issued share capital of the Company (excluding treasury shares) for the time being, subject always to the approval of all relevant regulatory bodies being obtained for such allotment and issue.”

NOTICE OF ANNUAL GENERAL MEETING


7. Proposed Grant of Authority to the Company to Purchase its own Ordinary Shares (“Proposed Share Buy-Back”)


“THAT subject to the Companies Act, 1965 (“Act”), rules, regulations and orders made pursuant to the Act, provisions of the Company’s Memorandum and Articles of Association, Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements and any other relevant authority or approval for the time being in force or as may be amended from time to time, the Directors of the Company be and are hereby authorised to make purchases of the Company’s shares as may be determined by the Directors of the Company from time to time through Bursa Securities upon such terms and conditions as the Directors may deem fit, necessary and expedient in the interest of the Company, provided that:

(a) the aggregate number of ordinary shares which may be purchased and/or held by the Company as treasury shares shall not exceed ten percent (10%) of the total issued and paid-up ordinary share capital of the Company at any point in time of the said purchase(s);

(b) the maximum funds to be allocated by the Company for the purpose of purchasing its ordinary shares shall not exceed the total retained earnings and share premium account of the Company at the time of purchase; and

(c) the authority conferred by this resolution shall continue to be in force until:

(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the general meeting at which such resolution was passed at which time the said authority shall lapse unless by an ordinary resolution passed at that meeting, the authority is renewed, either unconditionally or subject to conditions;

(ii) the expiration of the period within which the next AGM of the Company is required by law to be held; or

(iii) revoked or varied by ordinary resolution passed by the shareholders in general meeting,

whichever occurs first,

but not so as to prejudice the completion of the purchase(s) by the Company before the aforesaid expiry date and in any event, in accordance with the provisions of the guidelines issued by Bursa Securities and/or any other relevant governmental and/or regulatory authorities (if any).

THAT upon completion of the purchase by the Company of its own ordinary shares, the Directors of the Company be and are hereby authorised to deal with the ordinary shares purchased in their absolute discretion in the following manner:

(a) cancel all the ordinary shares so purchased; and/or

(b) retain the ordinary shares so purchased in treasury for distribution as dividend to the shareholders and/or resell on the market of Bursa Securities; and/or

(c) retain part thereof as treasury shares and cancel the remainder.

NOTICE OF ANNUAL GENERAL MEETING (CONT’D)


AND THAT the Directors of the Company be and are hereby authorised to take all such steps as are necessary (including the opening and maintaining of depository account(s) under the Securities Industry (Central Depositories) Act, 1991) and enter into any agreements, arrangements and guarantees with any party or parties to implement, finalise and give full effect to the Proposed Share Buy-Back with full powers to assent to any conditions, modifications, revaluations, variations and/or amendments (if any) as may be imposed by the relevant authorities from time to time or as the Directors may in their discretion deem necessary and to do all such acts and things as the said Directors may deem fit and expedient in the best interests of the Company.”

8. Proposed Amendments to the Articles of Association of the Company SpecialResolution

“THAT the proposed amendments to the Articles of Association of the Company as set out in Appendix A of the Notice of Annual General Meeting be and is hereby approved AND THAT the Directors of the Company be and are hereby authorised to do all things and acts necessary to effect the amendments to the Articles of Association of the Company.”

BY ORDER OF THE BOARDTAI YIT CHAN (MAICSA 7009143)CHAN YOKE PENG (MAICSA 7053966)Secretaries

Selangor Darul EhsanDate: 30 August 2016

NOTES

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to the qualification of the proxy.

2. A member may appoint not more than two (2) proxies to attend and vote at the same meeting. Where a member appoints two (2) proxies, the appointments shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.

3. Where a member of the Company is an exempt authorised nominee which holds shares in the Company for multiple beneficial owners in one securities account (“omnibus account”) as defined under the Securities Industry (Central Depositories) Act, 1991, there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

4. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its Common Seal or under the hand of the attorney.

5. The instrument appointing a proxy, with the power of attorney or other authority (if any) under which it is signed or a notarially certified or office copy of such power or authority, must be deposited at the Registered Office of the Company at Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

6. In respect of deposited securities, only members whose names appear on the Record of Depositors on 3 October 2016 (General Meeting Record of Depositors) shall be eligible to attend, speak and/or vote at the meeting or appoint proxy(ies) to attend, speak and/or vote on his behalf.



Explanatory Notes to Special Business:

(1) To receive the Audited Financial Statements

Agenda item no. 1 is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of shareholders for the Audited Financial Statements. Hence, this item on the Agenda is not put forward for voting.

(2) Proposed Authority under Section 132D of the Companies Act, 1965 for the Directors to issue shares

The Company had, during its Nineteenth Annual General Meeting (“AGM”) held on 27 October 2015, obtained its shareholders’ approval for the general mandate for issuance of shares pursuant to Section 132D of the Companies Act, 1965 (“the Act”). The Company did not issue any shares pursuant to this mandate obtained.

The Ordinary Resolution 6 proposed under item 6 of the Agenda is a renewal of the general mandate for issuance of shares by the Company under Section 132D of the Act. The mandate, if passed, will provide flexibility for the Company and empower the Directors to allot and issue new shares speedily in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company (excluding treasury shares) for purpose of funding the working capital and future investment of the Group. This would eliminate any delay arising from and cost involved in convening a general meeting to obtain approval of the shareholders for such issuance of shares. This authority, unless revoked or varied by the Company at a general meeting, will expire at the next AGM.

(3) Proposed Grant of Authority to the Company to Purchase its own Ordinary Shares

For further information on Ordinary Resolution 7, please refer to the Circular to Shareholders dated 30 August 2016 accompanying the Annual Report of the Company for the financial year ended 30 April 2016.

(4) Special Resolution on Proposed Amendments to the Articles of Association of the Company

The Special Resolution, if passed, will allow the Chairman the prerogative to promote orderly conduct of general meetings and render the Articles of Association of the Company to be in line with the Main Market Listing Requirements of Bursa Securities.

Personal data privacy:

By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the AGM and/or any adjournment thereof, a member of the Company (i) consents to the collection, use and disclosure of the member’s personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its agents) of proxies and representatives appointed for the AGM (including any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the AGM (including any adjournment thereof), and in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”), (ii) warrants that where the member discloses the personal data of the member’s proxy(ies) and/or representative(s) to the Company (or its agents), the member has obtained the prior consent of such proxy(ies) and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/or representative(s) for the Purposes, and (iii) agrees that the member will indemnify the Company in respect of any penalties, liabilities, claims, demands, losses and damages as a result of the member’s breach of warranty.



APPENDIX A

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY

The Articles of Association of the Company are proposed to be amended in the following manner:-

Article No. Existing Articles Amended ArticlesTo amend Article 72.1 At any general meeting a resolution put to the

vote of the meeting shall be determined by a show of hands of the members present in person or by proxy, unless a poll is demanded (before or upon the declaration of the result of a show of hands:-

(a) by the Chairman of the meeting;

(b) by at least 5 members present in person or by proxy or attorney;

(c) by any member or members present in person or by proxy or power of attorney representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or

(d) by a member or members holding shares in the Company conferring a right to vote at the meeting, being shares on which an aggregate sum has been paid up equal to not less than one- tenth of the total sum paid up on all the shares conferring that right.

Any poll duly demanded on the election of a Chairman of a meeting or on any question of adjournment shall be taken forthwith at the meeting and without adjournment.

Subject to the Listing Requirements, any resolution set out in the notice of any general meeting, or in any notice of resolution which may properly be moved and is intended to be moved at any general meeting shall be voted by poll. Subject to the Act, a poll may be demanded:

(a) by the Chairman of the meeting;

(b) by at least 5 members present in person or by proxy or attorney;

(c) by any member or members present in person or by proxy or power of attorney representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or

(d) by a member or members holding shares in the Company conferring a right to vote at the meeting, being shares on which an aggregate sum has been paid up equal to not less than one- tenth of the total sum paid up on all the shares conferring that right.

Any poll duly demanded on the election of a Chairman of a meeting or on any question of adjournment shall be taken forthwith at the meeting and without adjournment.

To amend Article 75 If a poll is duly demanded it shall be taken in such manner as the Chairman may direct (including the use of a ballot or voting papers or tickets) and the result of a poll shall be deemed the resolution of the meeting at which the poll was demanded. The Chairman may (and if so directed by the meeting shall) appoint scrutineers for the purposes of a poll, and may adjourn the meeting to some place and time fixed by him for the purpose of declaring the results of the poll.

If a poll is duly demanded it shall be taken in such manner as the Chairman of the meeting may direct and at least one (1) scrutineer must be appointed to validate the votes cast at the general meeting. The appointed scrutineer must not be an officer of the Company or its related corporation, and must be independent of the person undertaking the polling process. The Chairman of the meeting may fix a time and place for declaring the result of the poll. The result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.

The poll may be conducted manually using voting slips or electronically using various forms of electronic devices. Such votes shall be counted by the poll administrator, and verified by the scrutineer, as may be appointed by the Chairman of the meeting for the purpose of determining the outcome of the resolution(s) to be decided on poll.


To amend Article 80.2 Subject to any special rights or restrictions as to voting attached to any class or classes of shares by or in accordance with these Articles, on a show of hands every person present who is a holder of ordinary shares or preference shares or a member’s representative or proxy or attorney and entitled to vote shall be entitled to one vote on any question at any general meeting and in the case of a poll every member present in person or by proxy or by attorney or other duly authorised representative shall have one vote for every share held by him. A person entitled to more than one vote need not use all his votes or cast all the votes he uses on a poll in the same way. A member may appoint not more than two proxies to attend at the same meeting. Where a member appoints two proxies, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy and only one of those proxies is entitled to vote on a show of hands. A proxy appointed to attend and vote at a meeting shall have the same rights as the member to speak at the meeting.

Subject to Article 72.1 and any special rights or restrictions as to voting attached to any class or classes of shares by or in accordance with these Articles, on a show of hands every person present who is a holder of ordinary shares or preference shares or a member’s representative or proxy or attorney and if a corporation is present by a duly authorised representative or by proxy or attorney entitled to vote shall be entitled to one vote on any question at any general meeting and in the case of a poll every member present in person or by proxy or by attorney or other duly authorised representative shall have one vote for every share held by him. A person entitled to more than one vote need not use all his votes or cast all the votes he uses on a poll in the same way. A member may appoint not more than two proxies to attend at the same meeting. Where a member appoints two proxies, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy and only one of those proxies is entitled to vote on a show of hands. A proxy appointed to attend and vote at a meeting shall have the same rights as the member to speak at the meeting.

To amend Article 82.1 Any member being of unsound mind or whose person or estate is liable to be dealt with in any way under the law relating to mental disorder may vote by his committee, receiver curator bonis, or other legal guardian or such other person as properly has the management of his estate. Any one of such person may vote either personally or by proxy or by attorney provided such evidence as the Directors may require of the authority of the person claiming to vote shall have been deposited at the Office not less than 48 hours before the time appointed for holding the meeting.

Subject to Article 72.1, any member being of unsound mind or whose person or estate is liable to be dealt with in any way under the law relating to mental disorder may vote, whether on a show of hands or on a poll, by his committee, receiver curator bonis, or other legal guardian or by such other person as properly has the management of his estate. Any one of such person may vote either personally or by proxy or by attorney provided such evidence as the Directors may require of the authority of the person claiming to vote shall have been deposited at the Office not less than 48 hours before the time appointed for holding the meeting or adjourned meeting at which the right to vote is to be exercised. If this is not done, the right to vote shall not be exercisable.

APPENDIX A (CONT’D)


To add Article 90A (New provision) Without prejudice to any other power which the Chairman may have under the provisions of these Articles or at common law and subject to the Act and the Listing Requirements, the Chairman may take such action as he thinks fit to promote the orderly conduct of the business of all general meetings as specified in the notice of such meetings and the Chairman’s decision on matters of procedure or arising incidentally from the business of such meetings shall be final, as shall be his determination as to whether any matter is of such a nature.

To amend Article 163 The Directors shall from time to time in accordance with Section 169 of the Act, cause to be prepared and laid before the Company in general meeting such financial statements and report as are referred to in the section. The interval between the close of a financial year of the Company and the issue of the annual audited financial statements, the directors’ and auditors’ reports relating to it shall not exceed 4 months. A copy of each such documents shall not less than 21 days (or such other shorter period as may be agreed by all members entitled to attend and vote at the meeting) before the date of the meeting, be sent to every member of, and to every holder of debentures of the Company under the provisions of the Act or of these Articles provided that this Article shall not require a copy of these documents to be sent to any person of whose address the Company is not aware but any member to whom a copy of these documents has not been sent shall be entitled to receive a copy free of charge on application at the Office. The requisite number of copies of each such document shall be forwarded to Bursa Malaysia Securities Berhad upon which the Company may be listed at the same time as such documents are sent to the members.

The Directors shall from time to time in accordance with Section 169 of the Act, cause to be prepared and laid before the Company in general meeting such financial statements and report as are referred to in the section. A copy of each such documents shall not less than 21 days (or such other shorter period as may be agreed by all members entitled to attend and vote at the meeting) before the date of the meeting, be sent to every member of, and to every holder of debentures of the Company under the provisions of the Act or of these Articles provided that this Article shall not require a copy of these documents to be sent to any person of whose address the Company is not aware but any member to whom a copy of these documents has not been sent shall be entitled to receive a copy free of charge on application at the Office. The requisite number of copies of each such document shall be forwarded to Bursa Malaysia Securities Berhad upon which the Company may be listed at the same time as such documents are sent to the members.

APPENDIX A (CONT’D)


KOH HONG MUAN @ KOH GAK SIONGExecutive Chairman, Malaysian, Aged 68, Male

Mr Koh Hong Muan @ Koh Gak Siong is the founder and Executive Chairman. He was appointed as the Executive Chairman cum Managing Director on 18 June 1997 and 16 June 1997 respectively and subsequently designated as Executive Chairman cum Chief Executive Officer in 2001; as Chief Executive Officer on 1 Aril 2013 and as Group Chief Executive Officer on 27 March 2014. Recently, he was redesignated as Executive Chairman on 16 June 2016. He is also a member of the Remuneration Committee.

He is responsible for formulating the overall business development and corporate strategies for the Group.

Mr Koh has been engaged in the manufacturing of pressure sensitive labels and automatic labelling systems for over 38 years during which he gained wide experience in product development and corporate management. He co-invented two sets of patented feeding mechanism in hand-held labellers and precision products feeding device with pneumatic logistic control systems in automatic labelling machines, respectively.

Mr Koh’s efforts were recognised by the Malaysian Government when General Labels & Labelling (M) Sdn Bhd and Komark International (M) Sdn Bhd, wholly-owned subsidiaries of Komarkcorp Berhad, were granted Pioneer Status for the manufacturing of automatic labelling machines and hand-held labellers by Malaysia Industrial Development Authority (MIDA), Malaysia in 1991 and 1997, respectively.

He is the father of Mr Koh Chie Jooi and Mr Koh Chee Mian.

Other than Komarkcorp Berhad, he is not a director for any public company. He is a director in several private limited companies.

He is the major shareholder of Komarkcorp Berhad. He has no material conflict of interest with Komarkcorp Berhad Group.

KOH CHIE JOOIExecutive Director, Malaysian, Aged 38, Male

Mr Koh Chie Jooi was appointed to the Board of Komarkcorp Berhad as an Executive Director on 27 June 2002. On 16 May 2011, he was appointed as Managing Director of the Komarkcorp Group. On 27 March 2014, he was redesignated as an Executive Director of Komarkcorp Berhad and Managing Director at subsidiaries level and responsible for Asean subsidiaries. He graduated from the University of Sydney, Australia with a degree in Bachelor of Commerce. He is an associate member of CPA Australia and a Chartered Accountant of Malaysian Institute of Accountat (MIA). Prior to joining Komarkcorp in December 2001 as Assistant Accounts Manager, he was attached to KPMG from February 2001 to November 2001, with his last held position as Audit Assistant.

Mr Koh is currently assisting the Executive Chairman of Komarkcorp Group to oversee the overall operation except for China operations and in formulating the business development, corporate strategies and risk management for the Group.

He is the son of Mr Koh Hong Muan @ Koh Gak Siong and brother of Mr Koh Chee Mian.


He has no material conflict of interest with Komarkcorp Berhad Group.

KOH CHEE MIANExecutive Director, Malaysian, Aged 36, Male

Mr Koh Chee Mian was appointed to the Board of Komarkcorp Berhad as an Executive Director on 15 December 2003. On 16 May 2011, he was appointed as Deputy Managing Director of Komarkcorp Group. On 27 March 2014, he was redesignated as an Executive Director of Komarkcorp Berhad and as Managing Director at subsidiaries level in charge for China subsidiaries.

He graduated from the King’s College London, United Kingdom with a degree in Bachelor of Engineering.

Currently, Mr Koh is the person-in-charge of the overall operations for China that in the midst of disposal.

He is the son of Mr Koh Hong Muan @ Koh Gak Siong and brother of Mr Koh Chie Jooi.



DIRECTORS’ PROFILES


IHSAN BIN ISMAILIndependent and Non-Executive Director, Malaysian, Aged 53, Male

Encik Ihsan bin Ismail was reappointed to the Board of Komarkcorp Berhad on 23 September 2013 after resigning from his first appointment on 16 August 2013. He is also a member of the Audit Committee, Nomination Committee and Remuneration Committee.

He joined Lembaga Tabung Haji as an investment officer after graduating from California State University, USA in 1987 with a Master in Business Administration.

Encik Ihsan was attached to Lembaga Tabung Haji for 9 years from 1987 to 1996 and he was a special assistant to Deputy Director General in Investment and an assistant director of corporate affair prior to setting up his own business. He also represented Tabung Haji in several companies namely Syarikat Peladang Tabung Haji Sdn Bhd for 7 years from 1989 to 1996 and Syarikat Times Offset Malaysia Sdn Bhd for 15 years from 1992 to 2007.

Encik Ihsan has wide experience in investment management and project evaluations.



TAN LAY CHINGIndependent and Non-Executive Director, Malaysian, Aged 57, Female

Ms Julie Tan Lay Ching was appointed to the Board of Komarkcorp Berhad on 8 June 2016. Accordingly, she was also appointed as the Chairperson of Audit Committee, Nomination Committee and Remuneration Committee.

Ms Julie Tan is a Chartered Accountant by profession. She is a Chartered Accountant of the Malaysian Institute of Accountants (MIA) and a fellow member of Institute of Chartered Accountants in Australia ( ICAA ) and Institute of Chartered Accountants in England & Wales ( ICAEW ).

She was the committee member of Institute of Chartered Accountants in Australia, representing Malaysia Branch from 2010 to 2012.

She has over 30 years of experience in the accounting profession during her career with various private and public listed companies. She had wide range of experience in taxation, auditing, accounting, internal controls, investments, and mergers and acquisitions. She was a group financial controller from 2006 to 2013 of a furniture manufacturer listed in the main board. Prior to joining Komarkcorp Berhad in June 2016, she was the Finance Director of a local hotel chain from October 2014 to April 2016.

Other than Komarkcorp Berhad, she is not a director for any public company.

She has no material conflict of interest with Komarkcorp Berhad Group.

DIRECTORS’ PROFILES (CONT’D)


LOW TUCK MENGIndependent and Non-Executive Director, Malaysian, Aged 46, Male

Mr Low Tuck Meng was appointed to the Board of Komarkcorp Berhad on 8 June 2016. Accordingly, he was also appointed as a member of Audit Committee, Nomination Committee and Remuneration Committee.

Mr Low is a Chartered Accountant by profession with Master of Business Administration (Finance) from University of Leicester, UK. He is a member of the Malaysian Institute of Accountants (MIA) and a fellow member of Association of Chartered Certified Accountants (ACCA).

Mr Low has more than 20 years of working experience in accounting, auditing, taxation, treasury management, internal control, risk management, financial analysis and change management. Of which, he has about 10 years working experience in China.

He started his professional career with a public accounting firm in 1995 and thereafter, he held various senior positions in private limited and public listed companies.

Mr Low was attached with Komarkcorp Berhad for the period from May 2002 to September 2007. He served as the Deputy Financial Controller, China operation and subsequently promoted to Group Financial Controller to head the entire group finance division.

Mr Low was appointed as Chief Financial Officer of Naim Indah Corporation Berhad (“Nicorp”) on 3rd June 2015 and appointed to the Board of Nicorp as an Executive Director on 1 July 2016.

Immediately prior to joining Nicorp, he was attached with Hunter Douglas, a European multinational company. He was the Finance Director, China Operations for the period from October 2007 to December 2014 before the promotion as Asia Shared Service Head in January 2015.

Mr Low has no material conflict of interests with Komarkcorp Berhad Group.

KEY SENIOR MANAGEMENT

The Key Senior Management consists of Executive Chairman and Executive Directors of Komarkcorp Berhad. Their profiles are listed in the Directors’ Profiles on page 15 of this Annual Report.

DIRECTORS’ PROFILES (CONT’D)


STATEMENT ON CORPORATE GOVERNANCE

The Board of Directors appreciates the importance of adopting high standards of corporate governance within the Group. The Board views corporate governance as synonymous with three key concepts: namely transparency, accountability and corporate performance. As such, the Board strives to adopt the substance behind corporate governance prescriptions and not merely the form.

This Statement outlines the key aspects of how the Company has applied and taken into account the Principles enumerated under the Malaysian Code of Corporate Governance 2012 (the “Code”) during the financial year ended 2016. Where there are gaps in the Company’s observation of any of the Recommendations of the Code, these are disclosed herein with explanations.

Principles Statement

The following statement sets out how the Group has applied and the extent of its compliance with the best practices set out in the Code.

A. Establish Clear Roles and Responsibilities

The Group acknowledges the pivotal role played by the Board in the stewardship of its direction and operations, and ultimately the enhancement of long-term shareholder value. To fulfil this role, the Board is responsible for the overall corporate governance of the Group, including its strategic direction, establishing goals for management and monitoring the achievement of these goals. The roles and functions of the Board, as well as the differing roles of executive directors and non-executive directors are clearly delineated and defined.

The Board has a formal schedule of matters reserved to itself for decision, which includes the overall Group’s strategies and directions, acquisition and investment policy, approval of major capital expenditure, consideration of significant financial matters and its review of the financial and operating performance of the Group. The schedule ensures that the governance of the Group is firmly in the Board’s hands.

The Board plays an active role in reviewing and adopting the Company’s strategic plans by reviewing, discussing at length, and approving any of the Management’s proposals such as acquisition and disposal, as well as material agreements when the same is presented by the Management.

The Board as a whole is able to bring about objective judgements and advice drawing from their respective knowledge, expertise and experience. The presence of the non-executive directors is essential to provide unbiased and independent view, advice and judgement, as well as to safeguard the interest of all stakeholders.

In June 2016, the Board have reviewed the Budget for the financial year at Board Meeting.

Board Charter and Board Committees

The Board Charter of the Company is in place which sets out how its roles, responsibilities, composition and processes, having regard to principles of good corporate governance and requirements of Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”). The Board Charter further defines the matters that are reserved for the Board and its committees as well as the roles and responsibilities of the Chairman and Group Chief Executive Officer and Group Joint Chief Executive Officer.

Steps will be taken to upload the salient features of the Board Charter on the Company’s website at www.komark.com.my. The Board had reviewed the Board Charter for the financial year at the Board Meeting.

As set out in the Board Charter, the Board is responsible for:

• reviewingandadoptingstrategicplan,monitoringcorporateperformanceand implementationofstrategiesandpolicies and ensuring that the strategies promote sustainability;

• overseeingtheconductoftheCompany’sbusinessandbuildsustainablevalueforshareholders;• reviewingtheprocedurestoidentifyprincipalrisksandensuringtheimplementationofappropriate internal controls and mitigation measures;• successionplanning,includingappointing,assessing,training,fixingthecompensationofandwhereappropriate,

replacing senior management;• developing and implementing a Corporate Disclosure Policy (including an investor relations programme) for the

Group;


STATEMENT ON CORPORATE GOVERNANCE (CONT’D)

• reviewingtheadequacyandtheintegrityoftheinternalcontrolsystemsandmanagementinformationsystems,including systems for compliance with applicable laws, regulations, rules, directives and guidelines;

• ensuringthattheCompany’sfinancialstatementsaretrueandfairandconformwiththeaccountingstandards;• monitoringandreviewingpoliciesandproceduresrelatingtooccupationalhealthandsafetyandcompliancewith

relevant laws and regulations; and• EnsuringthattheCompanyadherestohighstandardsofethicsandcorporatebehaviour.

To assist the Board in carrying out its fiduciary duties and to enhance business and operational efficiency, the Board of Directors delegates certain duties to its committees, namely the Audit Committee, Nomination Committee and Remuneration Committee. Each Board Committee operates in accordance with the written terms of reference approved by the Board. The Board receives reports of their proceedings and deliberations. The Chairman of the various committees will report to the Board the outcome of the Committee meetings which will be recorded in the minutes of the Board meetings. The ultimate responsibility for decision making, however, lies with the Board.

Code of Conduct

The Group Code of Conduct (‘COC’) is in place and is applicable to all its Directors and employees. The Board noted the importance of the Code of Ethics and Conduct of the Group that emphasized the Group’s commitment to ethical practices and compliance with the applicable laws and regulations which also governs the standards of ethics and good conduct expected from the Directors and employees of the Group. The COC also includes appropriate communication and feedback channels which facilitate whistleblowing.

Sustainability

The Board recognises the importance of sustainability and its increasing significance in the business. The Board is committed to understanding and implementing sustainable practices and to exploring the benefits to the business whilst attempting to achieve the right balance between the needs of the wider community, the requirements of shareholders and stakeholders and economic success.

The Company has in place a Sustainability Policy which aims to endeavour to integrate the principles of sustainability into the Company’s strategies, policies and procedures and ensure that the Board and senior management are involved in implementation of this policy, review the sustainability performance and create a culture of sustainability within the Company, and the community, with an emphasis on integrating the environmental, social and economic considerations into decision making and the delivery of outcomes.

Supply and Access to Information

The Chairman ensures that all Directors have full and timely access to information. Prior to the meetings of the Board and the Board Committees, notice of agenda together with previous minutes and other relevant information were circulated to all Directors on a timely basis in order to enable the Directors to be well informed and briefed before the meetings, and thereafter to escalate the decision making process. All Directors also have full and free access to information within the Group and can as individuals or as a full Board seek independent professional advice, in furtherance of their duties, at the expense of the Group.

Every Director also has unhindered access to the advice and services of the Company Secretaries. The Board believes that the current Company Secretaries are capable of carrying out their duties to ensure the effective functioning of the Board. In the event that any one of the Company Secretaries fails to fulfil her functions effectively, the terms of the appointment permits her removal and appointment of successor which is a matter for the Board to decide.

Company Secretaries

The Company Secretaries play an advisory role to the Board in relation to the Company’s constitution, the Board’s policies and procedures, and compliance with the relevant regulatory requirements, codes or guidance and legislations. The Company Secretaries are suitably qualified, competent and capable of carrying out the duties required and has attended training and seminars conducted by The Malaysian Institute of Chartered Secretaries and Administrators (MAICSA) to keep abreast with the relevant updates on statutory and regulatory requirements and updates on the MMLR of Bursa Securities, the Companies Act, 1965 Board and other relevant laws and regulations.



The Company Secretaries attend all Board and Committee meetings and ensure that meetings are properly convened, and that accurate and proper records of the proceedings and resolutions passed are taken and maintained accordingly. Deliberations during the Board and Board Committees’ meetings were properly minuted and documented by the Company Secretaries.

The Company Secretaries also serve notice to the Directors and Principal Officers to notify them of closed periods for trading in the Company’s shares, in accordance with Chapter 14 of the MMLR of Bursa Securities.

B. Strengthen Composition

For the financial year ended 30 April 2016, the Board consists of eight (8) Directors, comprising an Independent Non-Executive Chairman, five (5) Executive Directors and two (2) Independent Non-Executive Directors. One third (1/3) of the Board comprises of Independent Non-Executive Directors, in compliance with Paragraph 15.02(1) of the MMLR of Bursa Securities.

The Board believes that the interests of the shareholders and the Company are protected by the strong presence of Independent Directors in Board who neither have any family relationship with any Director and/or major shareholders of the Company and have no conflict of interest with the Company.

The Directors together bring a wide range of experience such as legal, business, financial, accounting and industrial to lead the Group in the area of business strategies, performance and utilisation of resources and standards of conduct.

The Board is of the opinion that there is no issue with regards to the balance of power and authority on the Board as the roles of Chairman, the Group Chief Executive Officer and Joint Group Chief Executive Officer (“CEOs”) are clearly set out and established while the decision making process of the Board is based on collective decisions without any individual exercising any considerable concentration of power or influence and well balanced by the presence of strong elements of independence in the Board. Nevertheless, the Board would continue to ensure that half of the Board comprises Independent Directors whenever any suitable candidates are identified.

The Chairman carries out a leadership role in the conduct of the Board and its relations with shareholders and stakeholders. CEOs are responsible for carrying out the day-to-day operational functions as well as business development of the Group, accountable to the Board for the achievement of the Company’s goals and the observance of management’s limitation. Executive Directors periodically report to the Board on operational maters.

The Non-Executive/Independent Directors play the supporting role by contributing their knowledge and experience in the business strategic plans and offering their unbiased independent view, advice and judgment in the best interest of the Group. The Board is of the view that it is not necessary to identify a Senior Independent Non-Executive Director to whom other directors may bring their concerns to, as all Directors believes that they can freely express their views at Board Meeting and always within the reach of the shareholders.

Where areas of conflict of interest arise, the Director concerned will have to declare his/her interest and abstain from participating in the decision making process.

Nomination Committee

For the financial year ended 30 April 2016, the Company’s Nomination Committee (“NC”) comprised of two (2) Members, all of whom are Independent Non-Executive Directors. The Board trust that the NC Chairman is independent and able to contribute effectively to the NC in view of her wide and vast experience in the industry.



During the financial year ended 30 April 2016, one (1) NC meeting was held and the attendances are as follows:

No Name of Committee MembersNumber of meetings

attended/held 1. Dato’ Yeow Wah Chin

(Chairman, Independent Non-Executive Director) (Resigned on 8 June 2016)

1/1

2. Encik Ihsan Bin Ismail (Member, Independent Non-Executive Director)

1/1

3. Ms Tan Lay Ching (Chairperson, Independent Non-Executive Director) (Appointed on 8 June 2016)

N/A

4. Mr. Low Tuck Meng (Member, Independent Non-Executive Director) (Appointed on 8 June 2016)

N/A

The NC makes recommendations to the Board on suitable candidates for appointment as Board members, member of Board Committees and Chief Executive Officer/Executive Director of the Company based on the following evaluation criteria:

● skills, knowledge, expertise and experience;● professionalism;● time commitment to effectively discharge his/her role as a director;● contribution and performance;● character, integrity and competence; ● boardroom diversity including gender diversity; and● in the case of candidates for the position of independent non-executive directors, the NC shall also evaluate the

candidates’ ability to discharge such responsibilities/functions as are expected from independent non-executive directors.

The NC will arrange for the induction of any new Directors appointed to the Board to enable them to have a full understanding of the nature of the business, current issues within the Company and corporate strategies as well as the structure and management of the Company.

Any appointment of a new Director to the Board or Board Committee is recommended by NC for consideration and approval by the Board. In accordance with the Company’s Articles of Association, one-third of the Directors for the time being shall retire from office at each AGM. A retiring director shall be eligible for re-election. The Articles of Association also provide that all directors shall retire at least once in three years.

The NC has reviewed the results and the evaluation when considering the re-election of Directors and recommended to the Board for endorsement of the Directors, for re-election at forthcoming 20th AGM. The Directors standing for retirement by rotation and subject to re-election at the forthcoming AGM are Encik Ihsan bin Ismail, Mr Low Tuck Meng and Ms Tan Lay Ching.

The Board has via the NC reviewed and assessed the size of Board, required mix of skills, experience, performance and contribution of Directors; effectiveness of the Board as a whole; independence of Independent Directors and training courses required by the Directors, and is satisfied with the composition and performance of the Board for the financial year under review.

The Board has approved the establishment of a Diversity Policy. This policy aims to set the approach to achieve diversity on Komarkcorp’s Board and its workforce. Form time to time, the Board will review and monitor the implementation of this policy to ensure its effectiveness and if necessary, set measurable steps to achieve this objective. The Board had accordingly appointed Ms. Tan Lay Ching, as an Independent Non-Executive Director on 8 June 2016.

The Board appreciates the benefits of having gender diversity in the boardroom which would offer different viewpoints, ideas and market insights which enables better problem solving to gain competitive advantage in serving an increasingly diverse customer base.

The evaluation of the suitability of candidates is based on the candidates’ competency, character, time commitment, integrity and experience in meeting the needs of the Company. With the current composition, the Board feels that its members have the necessary knowledge, experience, requisite range of skills and competency to enable them to discharge their duties and responsibilities effectively. All Directors on the Board have gained extensive experience with their many years of experience on their boards and/or also as professionals in their respective fields of expertise.


Remuneration Committee

For the financial year ended 30 April 2016, the Remuneration Committee (“RC”) comprises five (5) Members, in which majority are Non-Executive Directors.

The RC has evaluated, deliberated and recommended to the Board the compensation and benefits that are fairly guided by market norms and industry practices for the business the Group is in. The RC is also responsible for evaluating the Executive Directors remuneration which is linked to the performance of the Executive Directors and performance of the Group. Individual Directors do not participate in the decisions regarding his or her individual remuneration.

The RC reviewed and recommended the Directors’ fee payable for the financial year to members of the Board which are deliberated at the Board before it is presented at the Annual General Meeting (“AGM”) for shareholders’ approval.

The Board and RC strive to ensure a fair structure of compensation for an organization of this size and market sector and business complexity. It is also aimed at attracting and retaining Directors who have the right calibre, skills and experience to contribute meaningfully towards the success of the business.

During the financial year ended 30 April 2016, three (3) RC meetings were held and the attendance is as follows:

No Name of Committee MembersNumber of meetings

attended/held 1. Dato’ Yeow Wah Chin

(Chairman, Independent Non-Executive Director) (Resigned on 8 June 2016)

3/3

2. Tan Sri Ahmad Bin Mohd Don(Member, Independent Non-Executive Director)(Resigned on 16 June 2016)

3/3

3. Encik Ihsan Bin Ismail (Member, Independent Non-Executive Director)

3/3

4. Mr Koh Hong Muan @ Koh Gak Siong (Member, Group Chief Executive Officer)(Re-designated to Executive Chairman on 16 June 2016)

3/3

5. Datuk Tan Kwe Hee (Member, Joint Group Chief Executive Officer/Executive Director)(Resigned on 1 June 2016)

3/3

6. Ms Tan Lay Ching (Chairperson, Independent Non-Executive Director) (Appointed on 8 June 2016)

N/A

7. Mr. Low Tuck Meng (Member, Independent Non-Executive Director) (Appointed on 8 June 2016)

N/A

The RC has reviewed and recommended to the Board the Directors’ fees for the Non-Executive Directors. The Directors’ fees are subject to shareholders’ approval at the Company’s forthcoming Annual General Meeting pursuant to the Articles of Association of the Company.

Details of remuneration of Directors of the Company paid or payable to all Directors of the Company (both the Company and the Group) and categorized into appropriate components for the financial year ended 30 April 2016 are as follows:

Company Fees Salaries Bonus Total

RM’000 RM’000 RM’000 RM’000Executive 0 240 0 240Non-executive 150 0 0 150

Group Fees Salaries Bonus Total

RM’000 RM’000 RM’000 RM’000Executive 493 881 0 1,374Non-executive 150 0 0 150



C. Reinforce Independence

The Board recognises the importance of independence and objectivity in its decision making process which is in line with the Code.

The directors with their different background and specialisation, collectively bring with them a wide range of experience and expertise in areas such as legal, finance, corporate affairs, marketing and operations. The executive directors are responsible for implementing the policies and decisions of the Board, overseeing the operations as well as co-ordinating the development and implementation of business and corporate strategies. The non-executive directors play key supporting roles, contributing their knowledge and experience towards formulating policies and in the decision-making process. They do not engage in day-to-day management of the Company and do not participate in any business dealings with the Company. The independent non-executive directors bring with them objective and independent judgement to decision-making and provide a capable check and balance for the executive directors.

The Board is also satisfied that its composition fairly reflects the investment of minority shareholders in the Company.

Annual Assessment of Independence

The concept of independence adopted by the Board is in tandem with the definition of an independent director in paragraph 1.01 of the MMLR of Bursa Securities and the Practice Note 13 issued pursuant to the MMLR. The key element for fulfilling the criteria is the appointment of an independent director who is not a member of management and who is free of any relationship which could interfere with the exercise of independent judgement or the ability to act in the best interest of the Company. The Board, via NC assesses Independent Directors’ independence to ensure ongoing compliance with this requirement annually.

Any Director who considers that he has or may have a conflict of interest or a material personal interest or a direct or indirect interest or relationship that could reasonably be considered to influence in a material way the Director’s decisions in any matter concerning the Company is required to immediately disclose to the Board and to abstain from participating in any discussion or voting on the respective matter.

For the financial year ended 30 April 2016, the Board assessed the independence of its Independent Non-Executive Directors based on the criteria set out in the MMLR of Bursa Securities. The Board is satisfied with the level of independence demonstrated by all the Independent Directors and their ability to act in the best interest of the Company.

Tenure of Independent Directors

The Board is mindful of the recommendation of the Code on limiting the tenure of Independent Directors to nine (9) years of service. In line with the Code and to enable a balance of power and authority in the Board, the Board Charter, which has been adopted by the Company, sets out the restriction on the tenure of an Independent Director to a cumulative term of nine (9) years. However, an Independent Director may continue to serve the Board upon reaching the 9-year limit subject to the Independent Director’s re-designation as a Non-Independent Non-Executive Director. In the event the Board intends to retain the Director as Independent after the latter has served a cumulative term of nine (9) years, the Board must justify the decision and seek shareholders’ approval at general meeting. In justifying the decision, the NC is entrusted to assess the candidate’s suitability to continue as an Independent Non-Executive Director based on the criteria on independence and to disclose the reasons for retaining him/her as Independent Director in the Notice of Annual General Meeting.

Chairman and Group Chief Executive Officer

The positions of Chairman and Group Chief Executive Officer are held by different individuals. The Chairman is responsible for the leadership, effectiveness, conduct and governance of the Board while the Group Chief Executive Officer is an Executive Director, who manages the business and operations of the Group and implements the Board’s decisions. The distinct and separate roles of the Chairman and Group Chief Executive Officer, with a clear division of responsibilities, ensure a balance of power and authority, such that no one individual has unfettered powers of decision-making.

D. Fostering Commitment

Time commitment

The Board endeavours to meet at least four (4) times a year, at quarterly intervals which are scheduled well in advance at the commencement of the financial year to help facilitate the Directors in planning their meeting schedule for the year. Additional meetings are convened where necessary to deal with urgent and important matters that require attention of the Board. Where appropriate, decisions are also made by way of circular resolutions in between scheduled meetings during the financial year.



Senior management staff and/or external advisors may be invited to attend Board meetings to advise the Board and to furnish the Board with information and clarification needed on relevant items on the agenda to enable the Directors to arrive at a considered decision.

All Board meetings are furnished with proper agenda with due notice issued and board papers and reports are prepared by the Management which provides updates on financial, operational, legal and circulated prior to the meetings to all Directors with 7 days’ notice to review them for effective discussions and decision making during the meetings.

The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities which is evidenced by the satisfactory attendance record of the Directors at Board meetings. The Board members are required to notify the Board prior to their acceptance of new directorships in other companies with indication of time that will be spent on the new appointment.

Each Board member is allowed to sit on the Board of five (5) listed issuers and must attend at least fifty percent (50%) of the total Board Meetings held in a financial year.

All pertinent issues discussed at the Board meetings in arriving at the decisions and conclusions are properly recorded by the Company Secretaries.

The Board met eight (8) times during the financial year under review. The details of Directors’ attendance are set out as follows:

No Name of Directors

Number of Board meetings attended/held during the Director’s term in office

1. Tan Sri Ahmad Bin Mohd Don(Chairman, Independent Non-Executive Chairman)(Resigned on 16 June 2016)

8/8

2. Mr Koh Hong Muan @ Koh Gak Siong (Executive Chairman)(Re-designated on 16 June 2016)

8/8

3. Datuk Tan Kwe Hee(Joint Group Chief Executive Officer/Executive Director)(Resigned on 1 June 2016)

8/8

4. Mr Lim Pei Tiam @ Liam Ahat Kiat(Executive Director)(Resigned on 20 May 2016)

8/8

5. Mr Koh Chie Jooi(Executive Director)

8/8

6. Mr Koh Chee Mian (Executive Director)

8/8

7. Dato’ Yeow Wah Chin (Independent Non-Executive Director)(Resigned on 8 June 2016)

7/8

8. Encik Ihsan bin Ismail (Independent Non-Executive Director)

8/8

9. Ms Tan Lay Ching (Independent Non-Executive Director) (Appointed on 8 June 2016)

N/A

10. Mr. Low Tuck Meng (Independent Non-Executive Director) (Appointed on 8 June 2016)

N/A



Directors’ Training

All Directors have completed the Mandatory Accreditation Program as prescribed by Bursa Securities. The Board fully supports the need for its members to further enhance their skills and knowledge on relevant new laws and regulations and changing commercial risks to keep abreast with the developments in the economy, industry, technology and the changing business environment within which the Group operates. Throughout their period in office, the Directors are continually updated on the Group’s business and the regulatory requirements.

The Group acknowledges the fact that continuous education is vital for the Board members to gain insight into the state of economy, technological advances in our core business, latest regulatory developments and management strategies. Therefore, the NC evaluates the training needs of Directors continuously to determine the relevant programmes, seminars and briefings which would enhance their knowledge to enable the Directors to discharge their responsibilities more effectively.

For the financial year ended 30 April 2016, the trainings attended by the Directors are as follows:-

Director Course Title

Koh Hong Muan @ Koh Gak Siong 1. Management Discussion & Analysis conducted by Bursa Securities on 30 September 2015

Koh Chie Jooi 1. Risk Management & Internal Control conducted by Bursa Securities on 8 June 2015

2. Comprehensive Financial Statements For Directors and Senior Management conducted by Bursatra Sdn Bhd (‘Bursatra’) on 17 February 2016

Koh Chee Mian 1. Creating a Better World - The Role of Corporate ASEAN in driving the Sustainable Development Goals conducted by Securities Industry Development Corporation at Securities Malaysia on 28 April 2016

Ihsan bin Ismail 1. Nominating Committee Programme - Effective Board valuations conducted by Bursa Securities on 10 September 2015

2. Creating a Better World - The Role of Corporate ASEAN in driving the

Sustainable Development Goals conducted by Securities Industry Development Corporation at Securities Malaysia on 28 April 2016

The Directors appointed on 8 June 2016 had attended the following training:-

Tan Lay Ching 1. Mandatory Accreditation Program by Bursatra on 3 – 4 August 2016

Low Tuck Meng 1. Mandatory Accreditation Program by Bursatra on 3 – 4 August 2016

The Company Secretaries also facilitate in coordinating the internal training programmes and keep Directors informed of relevant external training programmes. In addition, the Company Secretaries circulated the relevant guidelines on regulatory requirements from time to time for the Board’s reference and briefed the Board quarterly on these updates at Board Meetings. The External Auditors also briefed the Board members on any changes to the Malaysian Financial Reporting Standards that affect the Group’s financial statements during the year.

E. Uphold Integrity in Financial Reporting

Financial Reporting

The Board upholds integrity in financial reporting by ensuring that shareholders are provided with reliable information of the Company’s financial performance, its position and future prospects, in the Annual Audited Financial Statements and quarterly financial reports.



The Audit Committee (“AC”) is entrusted with the responsibility of assisting the Board in meeting its responsibilities relating to accounting and reporting practices of the Company and its subsidiary companies. One of the key responsibilities of the AC is to ensure that the financial statements of the Group and Company comply with applicable financial reporting standards in Malaysia. Such financial statements comprise the quarterly financial report announced to Bursa Securities and the annual statutory financial statements. In addition, the AC shall:-

(a) Oversee and appraise the quality of the audits conducted both by the Company’s internal and external auditors;

(b) Maintain open lines of communication between the Board of Directors, the internal auditors and external auditors for the exchange of views and information, as well as to confirm their respective authority and responsibilities; and

(c) Determine the adequacy of the Group’s administrative, operating and accounting controls.

The AC comprises of three (3) members of whom all are Non-Executive Directors with majority Independent Non-Executive Directors. The composition of the AC, including its activities during the financial year under review are set out on pages 31 to 32 under AC Report of this Annual Report.

Suitability and Independence of Internal and External Auditors

To ensure independence, the AC members have met twice with the External Auditors without the presence of the Management during the financial year to discuss issues arising from any audit exercises or other matters, which the External Auditors may wish to raise. The External Auditors had given their written have also confirmed that they are, and have been, independent throughout the conduct of the audit engagement in accordance with the independence criteria set out by the Malaysian Institute of Accountants.

The Board has outsourced the independent internal audit function to MAC & Associates which reports directly to the AC. The key activities covered by the internal audit function during the financial year under review is provided in the AC Report of the Company as set out on page 32 of this Annual Report.

F. Recognise and Manage Risks

The Company has in place an on-going process for identifying, evaluating and managing significant risks that may affect the achievement of the business objectives of the Group. Reviews on the key risks identified were conducted to ensure proper management of risks and that measures are taken to mitigate any weaknesses in the control environment.

A Risk Management Committee headed by the Executive Director and comprising key management personnel, has been entrusted with the role of identifying business risks and in ensuring the implementation of appropriate systems to manage these risks.

The Board has reviewed the risk management and internal control system of the Group and is of the view that during the financial year and up to the date of issuance of this Statement, there were no material losses, contingencies or uncertainties arising as a result of weaknesses in the internal control system which would require separate disclosures in this Annual Report.

The Board has mandated the AC with the overall responsibility of ensuring adequacy, completeness and effectiveness of the internal control system. The AC undertakes periodic reviews and monitors the compliance to these systems via the Internal Audit Function which carries out audit checks on such control processes and provides feedback on its effectiveness and compliance at the operating level. Any weaknesses or variances reported by the Internal Auditor to the AC will be turned into management actions to rectify any weaknesses in those control processes.

The outsourced Internal Auditor acts as a unit independent of management to carry out the audit of management processes and business transactions of the operating units and reports its findings back to the AC. This independent mechanism provides independent feedback on the accountability, adequacy and effectiveness of the system of internal controls in place, giving the assurance that the Board needs to fulfill its responsibility.

The key activities covered by the internal audit function during the financial year under review is provided in the AC Report of the Company as set out on page 32 of this Annual Report.



G. Timely and High Quality Disclosure

The Board is aware of the need to establish corporate disclosure policies and procedures to enable comprehensive, accurate and timely disclosures relating to the Group to the regulators, shareholders and stakeholders. Steps will be taken to formalise pertinent corporate disclosure policies to comply with the disclosure requirements as stipulated in the MMLR of Bursa Securities, and to set out the persons authorised and responsible to approve and disclose material information to shareholders and stakeholders.

To augment the process of disclosure, the Board has established a dedicated section for corporate information on the Company’s website where information on the Company’s announcements, financial information and the Company’s Annual Report may be accessed.

H. Strengthen Relationship between Company and Shareholders

The Company aims to ensure that the shareholders and investors are kept informed of all major corporate developments, financial performance and other relevant information by promptly disseminating such information to shareholders and investors via announcements to Bursa Securities, which is in line with Bursa Securities’ objectives of ensuring transparency and good corporate governance practices, through dialogue with analysts and the media.

The AGM is the principal forum for dialogue with the shareholders. Shareholders are notified of the meeting and provided with a copy of the Company’s Annual Report before the meeting. All shareholders are encouraged to attend the Annual General Meeting and participate in its proceedings. Every opportunity is given to the shareholders to ask questions and seek clarification on the business and performance of the Group.

The AC is available at the AGM to answer questions and consider suggestions. The External Auditors are also present to provide their professional and independent clarification on issues of concern raised by the shareholders, if any.

The annual report and the quarterly announcements are the primary mode of communications to report on the Group’s business activities and financial performance to all shareholders.

The Company also maintains an effective communication channel between the Board, shareholders and the general public through timely dissemination of all material information.

Minority shareholders may communicate with the Company through the Company’s website (www.komark.com.my).

The Notice of AGM will be circulated at least twenty-one (21) days before the date of the meeting to enable shareholders sufficient time to peruse the Annual Report and papers supporting the resolutions proposed. The Board encourages participation at general meetings and will generally carry out resolutions by show of hand, except for those requiring poll as prescribed under MMLR of Bursa Securities or unless otherwise demanded by shareholders in accordance with the Articles of Association of the Company. The Chairman of the Board will inform the shareholders of their right to demand a poll vote at the commencement of the general meeting.

At the Extraordinary General Meeting (“EGM”) held on 18 July 2016, the resolution was voted by way of poll and duly passed. The outcome of the EGM including the total number of votes cast on the poll together with the percentage in favour of and against the resolution was announced to Bursa Securities on the same day.

While the Company endeavours to provide as much information as possible to its shareholders and stakeholders, the Company is mindful of the legal and regulatory framework governing the release of material and price sensitive information.

Directors’ Responsibility Statement in Respect of the Preparation of the Audited Financial Statements

The Board is responsible for ensuring that the financial statements of the Group give a true and fair view of the state of affairs of the Group and of the Company as at the accounting period and of their profit or loss and cashflow for the period then ended. In preparing the financial statements, the Directors have ensured that applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 have been applied.

In preparing the financial statements, the Directors have applied consistently suitable accounting policies and made reasonable and prudent judgements and estimates.

The Directors have also taken such steps as are reasonably available to them to safeguard the assets of the Group and to prevent fraud and other irregularities.



STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

INTRODUCTION

The Board is pleased to present the Statement on Risk Management and Internal Control which outlines the nature and scope of risk management and the internal control systems of the Group for the financial year ended 30 April 2016 pursuant to paragraph 15.26 (b) of the Bursa Malaysia Securities Berhad’s (“Bursa Securities”) Main Market Listing Requirements (“MMLR”).

BOARD RESPONSIBILITY

The Board acknowledges its overall responsibility in establishing a sound risk management and internal controls system to safeguard shareholders’ investments and the Group’s assets. The Board further affirms to embed risk management in all aspects of the Group’s activities and review the adequacy and integrity of these systems in mitigating risks within the Group’s acceptable risk appetite.

In view of the limitations that are inherent in any systems of risk management and internal control, such systems are designed to manage rather than eliminate the risk of failure to achieve its’ business objectives. Accordingly, these systems can provide only reasonable and not absolute assurance against material misstatement, frauds or loss. The concept of reasonable assurance also recognizes that the benefits outweigh the cost of operating the controls.

INTERNAL CONTROL

There are always opportunities to further improve the current risk management and internal control systems of the Group. A program of actions to enhance the risk management and internal control systems was undertaken in line with corporate governance compliance. The Company has also outsourced the internal audit function of the Group to a professional firm, who reports directly to the Audit Committee on its findings and recommendations for improvement.

The Internal Auditor’s main role is to independently assess the adequacy and integrity of such system of risk management and the internal control established by the Management based on the audit plan approved by the Audit Committee and to make appropriate recommendations for Management’s implementation. This will provide reasonable assurance that such internal control system continues to operate satisfactorily and effectively within the Group.

Key Elements Of Internal Control

The following are the key elements of the Group’s internal control :-

- A clearly defined organisation and hierarchical structure outlining line of reporting and job responsibilities with strong risk control culture at the operational level.

- Limits of authority have been set within the Group to provide a functional framework of approval authority.

- A comprehensive Code of Conduct policy is developed to foster long-lasting and harmonious working relationship among the employees and set out the rules and regulations to be adhered by the employees in performing their duties. The policy is reviewed periodically.

- A quality management system has been established, in accordance with the requirement of ISO 9001 : 2008 standard and committed on continuous compliance, which will pave to continuous self-improvement. The internal quality audit is conducted to ensure that the company system procedures and standard operating procedures had been implemented and documented.

- A Health and Safety Policy is developed to assist in maintaining a safe working environment for all employees and others on its premise.

- Training Policy is established to train and develop the staff towards the creation of a highly productive innovative and discipline workforce.

- Financial reports are supplied to the Audit Committee and the Board on a quarterly basis for review and if necessary correction action could be taken.


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONT’D)

Risk Management

A Risk Management Committee (“RMC”) which comprises of Executive Directors and Senior Management of the Group has been set up.

The Board recognises that the management of principal risks plays an important and integral part of the Group’s daily operations and that the identification and the management of such risk will affect the achievement of the Group’s corporate objectives.

As an ongoing process, business issues faced by the Group are identified and evaluated by the RMC and consideration is given on the potential impact towards achieving the business objectives. This includes examining business issues in critical areas, assessing the likelihood of material exposures and identifying the measures taken to mitigate the risks arising from these issues.

During the financial year, the Group had identified major risk areas of concern and mitigating actions were taken. The major risks are outlined below:-

1. Loss of key customers risk

We had recently lost a major oil & lubricant customer in China. This was severely affected our profitability.

To mitigate such risks, the Group has various measures in place including the below:• DisposeoffourChinaoperationunits• Maintainagoodrelationshipwithexistingcustomers• Alwaysdevelopnewkeycustomers• Deliverontime• Producequalityproducts• Improveproductionefficiency

2. Catastrophic events

There is always a threat of fire, flood, riot, information system and major equipment failures that affects the continuity of business operations.

The Group has in place adequate and regularly reviewed the insurance coverage where it is available on economically acceptable terms to minimize its financial impacts. The Group’s operation is fully back-up by other branches that can temporarily support the affected operations.

3. Gearing

The Group gearing had been improved significantly after the issuance of right issue in early 2015 and currently stand at 39.46%. It is due to a potential threat of banking facility being recalled that will affect the continuity of business operations.

To mitigate such risks, the Group has various measures in place including the below:• DisposeoffourChinaoperationunits• Maintainagoodrelationshipwithexistingbankers• Scrutinisethenewexpansionorinvestmentprojects• Lookfordisposalofidleassets

4. Competition and Cost

The Group has been facing stiff competition from other market players over the years, in particular from large multinational corporations which have long established presence globally. In addition, publishing and commercial printers have also entered the labels market, which has further intensified the competition. Amidst the stiff competition which pushes prices lower, player in the labels industry are required to comply with the minimum wage requirements which reduces profit margin.

To mitigate such risks, the Group has various measures in place including the below:• Maintainagoodrelationshipwithexistingcustomers• Alwaysdevelopnewkeycustomers• Cutcostorcostsavingsarealwaysinherentinthemind• Investinnewmachineriestooffercompetitivepricingandhigherqualityproducts• Adoptmorecustomerfocusapproach


Review Of The Statement By External Auditors

As required by paragraph 15.23 of the Bursa Securities MMLR, the external auditors have reviewed this Statement on Risks Management and Internal Control.

Conclusion

In reviewing the risk management and internal control system of the Group, the Board has, through the Audit Committee, received reports from Internal Auditors and Risk Management Committee in relation to findings on risk and internal audit control system. The Board has also received assurance from the Group Chairman and Group Chief Financial Officer that the Group’s risk management and internal control system are operating adequately and effectively in all material aspects, based on the risk management and internal control system of the Group.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONT’D)


AUDIT COMMITTEE REPORT

COMPOSITION

Tan Lay Ching (Appointed on 8 June 2016) Chairperson/Independent Non-Executive Director

Ihsan bin IsmailIndependent Non-Executive Director

Low Tuck Meng (Appointed on 8 June 2016) Independent Non-Executive Director

Dato’ Yeow Wah Chin (Resigned on 8 June 2016)Chairman/Independent Non-Executive Director

Tan Sri Ahmad Bin Mohd Don (Resigned on 16 June 2016)Independent Non-Executive Director

DETAILS OF ATTENDANCE AT AUDIT COMMITTEE MEETINGS DURING THE FINANCIAL YEAR ENDED 30 APRIL 2016

Number of Audit Committee Meetings held for the financial year: Seven (7)

Attendance of the Audit Committee members are shown below:-

Name of Audit Committee member Number of meetings attended/held Dato’ Yeow Wah Chin(Resigned on 8 June 2016)

6/7

Tan Sri Ahmad Bin Mohd Don(Resigned on 16 June 2016)

7/7

Ihsan bin Ismail 7/7Tan Lay Ching(Appointed on 8 June 2016)

N/A

Low Tuck Meng(Appointed on 8 June 2016)

N/A

SUMMARY OF WORKS

During the financial year, the Audit Committee (AC) had carried out its duties and responsibilities in accordance with its terms of reference. The works of the AC were summarized as per below:-

1. Review of draft quarterly financial statements and made recommendations to the Board of Directors (“Board”) for approval prior to release to Bursa Malaysia Securities Berhad (“Bursa Securities”). The reviews served to ensure the Group’s financial reporting and disclosures present a true and fair view of the Group’s financial position and performance.

2. Assessment of the external auditors’ findings in relation to audit and accounting issues arising from the audit of the Group’s financial statements and updates on the changes in the reporting of financial statements as at 30 April 2016.

3. Discussion of audit strategy and plan with the internal and external auditors.

4. Conducting two private sessions each with the external auditors and internal auditors in the absence of the Executive Directors and Management to ensure there were no restrictions and the scope of their audit is in line with the Malaysia Code of Corporate Governance 2012.

5. Examining the findings of the internal auditors and management’s response.

6. Review of the report of the external auditors, Ong & Wong.

7. Overseeing the Group’s system of internal control and the risk management. AC continues to monitor and review the effectiveness of the system of control and risk management with the support of the internal auditor and risk management committee.


8. Review of the Group Budget for the financial year ended 30 April 2016 to the Board for approval.

9. Review of the Corporate Governance Statement, AC Report Statement on Risk Management and Internal Control prior to submission to the Board for consideration and approval for inclusion in the Annual Report 2016.

10. Reporting to the Board on significant issues and concerns discussed during the AC meetings together with applicable recommendations. Minutes of the AC meetings were tabled and noted by the Board.

11. Furnished to Bursa Securities a report in respect of internal audit function after tabling the same to the Board.

INTERNAL AUDIT FUNCTION AND SUMMARY OF WORKS

The internal audit function of the Company has been outsourced to MAC & ASSOCIATES PLT an independent professional firm, which assists the AC in discharging its duties and responsibilities. They act independent with due professional care and report directly to the AC.

During the financial year ended 30 April 2016, the Internal Auditors had carried out the following works:-

• FixedassetverificationofKomarkThailandCoLtd,PtKomarkLabels&LabellingIndonesia,ShanghaiKomarkLabels&Labelling Co Ltd and Guanzhou Komark Labels & Labelling Co Ltd.

• PreparedareportforsubmissiontoBursaSecuritiesontheinternalauditfunction,includingtheadequacyofthescope,functions, competency and resources of the internal audit functions to confirm and that it has the necessary authority to carry out its works and the internal audit program, processes, the results of the internal audit program, processes or investigation undertaken.

The professional fees incurred for the internal audit function in respect of financial year ended 30 April 2016 amounted to approximately RM21,000.00.

AUDIT COMMITTEE REPORT (CONT’D)


OTHER INFORMATION

In compliance with the Bursa Malaysia Securities Berhad’s Main Market Listing Requirements, the following additional information is provided:

1. Non-Audit Fees The amount of non-audit fee incurred for services rendered to the Group for the financial year ended 30 April 2016 was

RM37,195.

2. Material Contracts During the financial year, there were no material contracts of the Company and its subsidiaries involving Directors’ and

major shareholders’ interest.

3. Utilisation of Proceeds The Company did not implement any fund raising exercise during the financial year.


The directors present their report and the audited financial statements of the Group and of the Company for the financial year ended 30 April 2016.

PRINCIPAL ACTIVITIES

The Company is principally engaged in investment holding and provision of management services to its subsidiaries. The principal activities of the subsidiaries are as set out in Note 5 to the financial statements. There have been no significant changes in these activities during the financial year.

RESULTS

Group CompanyRM’000 RM’000

Profit after taxation from continuing operations 371 257 Profit after taxation from discontinued operations 1,542 - Profit for the year 1,913 257

DIVIDEND

No dividend was paid nor declared since the end of the previous financial year and the directors do not recommend any dividend to be paid for the financial year.

RESERVES AND PROVISIONS

All material transfers to or from reserves or provisions during the financial year are disclosed in the financial statements.

ISSUE OF SHARES

During the financial year, the Company increased its issued and paid-up ordinary share capital from RM30,653,462 to RM31,158,462 by way of the issuance of 2,020,000 new ordinary shares of RM0.25 each pursuant to the exercise of warrants at an exercise price of RM0.30 per ordinary share for cash.

The new ordinary shares issued during the financial year rank pari passu in all respects with the existing ordinary shares of the Company.

SHARE OPTION

During the financial year, the Company did not grant any option to any person to take up the unissued shares of the Company.

RIGHTS ISSUE AND WARRANTS

On 22 January 2015, the Company issued a renounceable rights issue of 40,637,005 new ordinary shares of RM0.25 each with 40,637,005 free detachable new warrants on the basis of one (1) rights share and one (1) warrant for every two (2) existing ordinary shares of RM0.25 each held in the Company at an issue price of RM0.30 per rights share. These rights shares and warrants were listed on the Bursa Malaysia on 29 January 2015. The issuance resulted in a proceed of RM11,655,132 (net of costs of issuance of rights shares with warrants of RM535,970) to the Company.

The warrants have a term of 5 years to exercise from the date of issuance. Warrants that are not exercised during the exercise period will thereafter lapse and cease to be valid. During the financial year, 2,020,000 warrants were exercised.

The terms of the warrants are detailed in Note 18 to the financial statements.

DIRECTORS’ REPORTFOR THE YEAR ENDED 30 APRIL 2016


DIRECTORS’ REPORT (CONT’D)FOR THE YEAR ENDED 30 APRIL 2016

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

Details of significant events during the financial year are disclosed in Note 34 to the financial statements.

SUBSEQUENT EVENT

Details of event subsequent to the balance sheet date is disclosed in Note 35 to the financial statements.

DIRECTORS

The directors who served since the date of the last report are:

Tan Sri Ahmad Bin Mohd Don (resigned on 16.6.16)Koh Hong Muan @ Koh Gak Siong Datuk Tan Kwe Hee (resigned on 1.6.16)Koh Chie JooiKoh Chee MianLim Pei Tiam @ Liam Ahat Kiat (resigned on 20.5.16)Dato’ Yeow Wah Chin (resigned on 8.6.16)Ihsan Bin Ismail Tan Lay Ching (f) (appointed on 8.6.16)Low Tuck Meng (appointed on 8.6.16)

DIRECTORS’ INTERESTS IN SHARES

According to the Register of Directors’ Shareholdings, the interests of directors in office at the end of the financial year in shares in the Company during the financial year were as follows:

Number of ordinary shares of RM0.25 eachBalance at Balance at

1.5.2015 Bought Sold 30.4.2016

(Direct Interest)Koh Hong Muan @ Koh Gak Siong 10,260,000 - - 10,260,000Datuk Tan Kwe Hee 8,739,800 800,000 - 9,539,800Koh Chee Mian 309,150 - - 309,150Lim Pei Tiam @ Liam Ahat Kiat 15,622,500 - - 15,622,500Dato’ Yeow Wah Chin 819,800 - - 819,800

(Indirect Interest)Koh Hong Muan @ Koh Gak Siong 16,360,333# - - 16,360,333#Datuk Tan Kwe Hee 1,800,000* - - 1,800,000*Koh Chie Jooi 26,620,333* - - 26,620,333*Koh Chee Mian 26,620,333* - - 26,620,333*

# Deemed interested in shares held by an affiliated company, Aimas Enterprise Sdn. Bhd., a company incorporated in Malaysia, by virtue of Section 6A(4)(c) of the Companies Act, 1965.

* Deemed interested in the shares held by persons connected under Section 122A(1)(a) of the Companies Act, 1965.

By virtue of their interests in the shares of the Company, Koh Hong Muan @ Koh Gak Siong, Datuk Tan Kwe Hee, Koh Chie Jooi, Koh Chee Mian, Lim Pei Tiam @ Liam Ahat Kiat and Dato’ Yeow Wah Chin are also deemed to have an interest in the shares of all the subsidiaries of the Company to the extent the Company has an interest.

Other than as disclosed above, none of the other directors in office at the end of the financial year had any interest in the shares of the Company or its related companies during the financial year.


DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the directors shown in the financial statements or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with any director or with a firm of which the director is a member or with a company in which the director has a substantial financial interest except as disclosed in Note 23 to the financial statements.

Neither during nor at the end of the financial year was the Company a party to any arrangements which object was to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

REMUNERATION COMMITTEE

The members of the Remuneration Committee who have served since the date of the last report are:

Dato’ Yeow Wah Chin (ceased as chairman on 8.6.16)Tan Sri Ahmad Bin Mohd Don (ceased as member on 16.6.16)Koh Hong Muan @ Koh Gak Siong Datuk Tan Kwe Hee (ceased as member on 1.6.16)Ihsan Bin Ismail Tan Lay Ching (f) (appointed as chairperson on 8.6.16)Low Tuck Meng (appointed on 8.6.16)

OTHER STATUTORY INFORMATION

Before the Statements of Profit or Loss and Other Comprehensive Income and Statements of Financial Position of the Group and of the Company were made out, the directors took reasonable steps:

i) to ascertain that proper action had been taken in relation to the writing off of bad debts and, the making of allowance for doubtful debts, and have satisfied themselves that all known bad debts had been written off and adequate allowance had been made for doubtful debts; and

ii) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business had been written down to an amount which they might be expected so to realise.

At the date of this report, the directors are not aware of any circumstances:

i) which would render the amount written off for bad debts or the amount of allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent;

ii) which would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading;

iii) which have arisen which render adherence to the existing methods of valuation of assets or liabilities in the financial statements of the Group and of the Company misleading or inappropriate; and

iv) not otherwise dealt with in this report or in the financial statements of the Group and of the Company, that would render any amount stated in the respective financial statements misleading.

At the date of this report, there does not exist:

i) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures the liabilities of any other person; or

ii) any contingent liability in respect of the Group and of the Company that has arisen since the end of the financial year.




No contingent liability or other liabilities of the Group and of the Company has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet its obligations as and when they fall due.

In the opinion of the directors:

i) the results of the operations of the Group and of the Company for the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature; and

ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.

AUDITORS

The Auditors, ONG & WONG, have indicated their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors.

KOH HONG MUAN @ KOH GAK SIONGDirector

KOH CHIE JOOIDirector

Dated: 22 August 2016Kuala Lumpur


We, KOH HONG MUAN @ KOH GAK SIONG and KOH CHIE JOOI, being two of the directors of KOMARKCORP BERHAD, do hereby state that, in the opinion of the directors, the financial statements set out on pages 41 to 107 are drawn up in accordance with Malaysian Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 April 2016 and of the results and cash flows of the Group and of the Company for the financial year ended on that date.

Further to the Statement by directors pursuant to Section 169(15) of the Companies Act, 1965, the information set out in Note 19 to the financial statements have been prepared in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants.

Signed on behalf of the Board in accordance with a resolution of the directors.

KOH HONG MUAN @ KOH GAK SIONGDirector

KOH CHIE JOOIDirector


STATUTORY DECLARATION(Pursuant to Section 169[16] of the Companies Act, 1965)

I, CHONG JIUN SHYANG, being the officer primarily responsible for the financial management of KOMARKCORP BERHAD, do solemnly and sincerely declare that the financial statements set out on pages 41 to 107 are drawn up, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared bythe abovenamed, at Kuala Lumpur in Wilayah Persekutuan on 22 August 2016 CHONG JIUN SHYANG

Before me,

Commissioner for Oaths

STATEMENT BY DIRECTORS(Pursuant to Section 169[15] of the Companies Act, 1965)


INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF KOMARKCORP BERHAD (Company No: 374265-A)

(Incorporated in Malaysia)

Report on the Financial Statements

We have audited the financial statements of Komarkcorp Berhad, which comprise the statements of financial position as at 30 April 2016 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 41 to 107.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Malaysian Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as at 30 April 2016 and of their financial performance and cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 5 to the financial statements.

c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.


Other Reporting Responsibilities

The supplementary information set out in Note 19 to the financial statements is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

ONG & WONG ONG KONG LAIAF 0241 494/06/18(J/PH)Chartered Accountants Partner of Firm


INDEPENDENT AUDITORS’ REPORT (CONT’D)TO THE MEMBERS OF KOMARKCORP BERHAD (Company No: 374265-A)(Incorporated in Malaysia)


STATEMENTS OF FINANCIAL POSITIONAS AT 30 APRIL 2016

Group Company Note 2016 2015 2016 2015

RM’000 RM’000 RM’000 RM’000

ASSETS

Non-current assetsProperty, plant and equipment 3 62,265 125,432 - - Prepaid lease payments on land 4 - 5,650 - - Investments in subsidiaries 5 - - 31,683 31,683 Investment in associate 6 - - - - Development expenditure 7 - 251 - - Deferred tax assets 8 50 42 - - Goodwill on consolidation 9 1,750 1,750 - -

64,065 133,125 31,683 31,683

Current assetsInventories 10 7,763 16,559 - - Trade and other receivables 11 12,348 34,579 3 1 Amount due from related companies 12 - - 58,583 56,782 Amount due from associate company 12 793 765 - - Cash and bank balances 13 3,374 9,921 8 19

24,278 61,824 58,594 56,802 Assets classified as held for sale 14 99,026 - -# -

123,304 61,824 58,594 56,802

TOTAL ASSETS 187,369 194,949 90,277 88,485

EQUITY AND LIABILITIES

Equity attributable to equity holders of the Company

Share capital 15 31,158 30,653 31,158 30,653 Treasury shares 16 - - - - Share premium 17 17,266 17,165 17,266 17,165 Warrant reserve 18 6,017 6,337 6,017 6,337 Reserves 19 56,503 54,551 29,513 28,936 Total equity 110,944 108,706 83,954 83,091

Non-current liabilitiesPost-employment benefit 199 165 - - Borrowings 20 6,936 10,953 - - Deferred tax liabilities 8 664 685 - -

7,799 11,803 - -



RM’000 RM’000 RM’000 RM’000

Current liabilitiesTrade and other payables 21 10,337 30,700 1,905 875 Amount due to related company 12 - - 1,513 1,513 Borrowings 20 11,382 43,374 2,905 3,006 Tax payable 483 366 - -

22,202 74,440 6,323 5,394 Liabilities directly associated with assets

classified as held for sale 14 46,424 - - - 68,626 74,440 6,323 5,394

Total liabilities 76,425 86,243 6,323 5,394

TOTAL EQUITY AND LIABILITIES 187,369 194,949 90,277 88,485

# Amount less than RM1,000.

STATEMENTS OF FINANCIAL POSITION (CONT’D)AS AT 30 APRIL 2016

The annexed notes form an integral part of these financial statements.


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 APRIL 2016


RM’000 RM’000 RM’000 RM’000 (Restated)

Continuing operationsRevenue 61,574 56,490 1,020 988 Cost of sales (48,936) (52,107) - - Gross profit 12,638 4,383 1,020 988 Other operating income 22 3,598 7,570 2,253 1,753 Depreciation and amortisation (489) (351) - - Staff costs and employee benefits (8,598) (7,059) (2,407) (713)Other operating expenses (4,331) (4,732) (363) (440)Profit/(loss) from operations 2,818 (189) 503 1,588 Finance costs (1,475) (2,401) (246) (198)Profit/(loss) before taxation 23 1,343 (2,590) 257 1,390 Taxation 24 (972) (766) -# - Profit/(loss) after taxation

from continuing operations 371 (3,356) 257 1,390

Discontinued operationsProfit/(loss) after taxation from

discontinued operations 25 1,542 (9,425) - - Profit/(loss) after taxation 1,913 (12,781) 257 1,390 Other comprehensive income/(expenses):Items that will not be reclassified

subsequently to profit or loss- Surplus on revaluation - 9,531 - - - Re-measurement gain on defined benefit

plan 35 - - - - Deferred tax relating to re-measurement

gain on defined benefit plan (9) - - - Item that is or may be reclassified

subsequently to profit or loss- Foreign currency translation (307) 1,214 - - Total comprehensive income/(loss)

for the year 1,632 (2,036) 257 1,390

Profit/(loss) for the year attributable to:Equity holders of the Company- Continuing operations 371 (3,356) 257 1,390 - Discontinued operations 1,542 (9,425) - - 1,913 (12,781) 257 1,390

Total comprehensive income/(loss) for the year attributable to:

Equity holders of the Company- Continuing operations 90 (2,142) 257 1,390 - Discontinued operations 1,542 106 - - 1,632 (2,036) 257 1,390


Group Note 2016 2015

RM’000 RM’000

Basic earnings/(loss) per share attributable to equity holders of the Company (sen) 26

- Continuing operations 0.3 (3.3)- Discontinued operations 1.2 (9.3) 1.5 (12.6)

Diluted earnings/(loss) per share attributable to equity holders of the Company (sen) 26

- Continuing operations 0.2 (3.2)- Discontinued operations 0.9 (8.8) 1.1 (12.0)


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONT’D)FOR THE YEAR ENDED 30 APRIL 2016

The annexed notes form an integral part of these financial statements.


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STATEMENTS OF CASH FLOWSFOR THE YEAR ENDED 30 APRIL 2016


RM’000 RM’000 RM’000 RM’000(Restated)

CASH FLOWS FROM OPERATING ACTIVITIESProfit/(loss) before taxation- Continuing operations 1,343 (2,590) 257 1,390 - Discontinued operations 1,318 (8,529) - -

2,661 (11,119) 257 1,390 Adjustments for:

Allowance for slow-moving manufactured inventories (280) (2,999) - -

Amortisation of prepaid lease payments on land 125 48 - -

Bad debts written off 166 1,919 - 6 Deposit written off 5 - - - Depreciation of property, plant and

equipment 11,216 10,490 - - Dividend income - - (1,020) (988)Gain on foreign exchange, unrealised (2,304) (2,284) (2,253) (1,753)Interest expense 3,640 4,799 246 198 Interest income (67) (93) -# -#

Inventories written off 69 10,899 - - Investment in subsidiary companies

written off - - -# - Loss/(gain) on disposal of property, plant

and equipment 17 (117) - - Prepayment written off 27 - - - Property, plant and equipment written off - 52 - - (Reversal)/allowance for impairment

losses:- Development expenditure 279 - - - - Trade receivables (77) (1,045) - - Unreconciled balances written off - 66 - 110 Waiver of amount due to a director (53) - - - Waiver of other payables -# (3,579) - - Waiver of trade payables - (2,422) - -

Operating profit/(loss) before working capital changes 15,424 (6,504) (2,770) 353

(Increase)/decrease in inventories (942) 4,470 - - Decrease/(increase) in receivables 4,028 6,745 450 (12,177)Increase in payables 652 4,430 1,030 626 Cash generated from/(absorbed by)

operations 19,162 9,141 (1,290) (11,198)Tax refund 47 644 - - Tax paid (1,007) (1,723) -# - Interest paid (3,640) (4,799) (246) (198)Interest received 67 93 -# -#

Net cash generated from/(used in) operating activities 14,629 3,356 (1,536) (11,396)

CASH FLOWS FROM INVESTING ACTIVITIESAcquisition of property, plant and equipment A (2,828) (6,022) - - Proceeds from disposal of property, plant

and equipment 87 3,185 - - Dividend received - - 1,020 988 Net cash (used in)/generated from investing

activities (2,741) (2,837) 1,020 988


Group CompanyNote 2016 2015 2016 2015

RM’000 RM’000 RM’000 RM’000(Restated)

CASH FLOWS FROM FINANCING ACTIVITIESDecrease/(increase) in deposits pledged with

licensed banks 1,554 (199) - - Proceeds from term loans raised 5,098 4,646 - - Proceeds from issue of shares, net of

transaction costs 606 11,866 606 11,866 Repayment of term loans and other

borrowings (11,921) (7,693) - - Repayment of hire purchase and lease

financing (1,237) (4,126) - - Net change in bills payable (3,748) (12,134) - - Net cash (used in)/generated from financing

activities (9,648) (7,640) 606 11,866

Net increase in cash and cash equivalents 2,240 3,998 90 68 Effects of exchange rate changes (3,722) (1,747) - - Cash and cash equivalents at beginning of

year 1,775 (476) (2,987) (3,055)Cash and cash equivalents at end of year B 293 1,775 (2,897) (2,987)

# Amount less than RM1,000

NOTE

A. ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT

During the financial year, the Group and the Company acquired the property, plant and equipment by:

Group Company2016 2015 2016 2015

RM’000 RM’000 RM’000 RM’000

Cash 2,828 6,022 - - Hire purchase - 202 - - 2,828 6,224 - -

B. CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the statements of cash flows comprise the following amounts:

Group Company2016 2015 2016 2015

RM’000 RM’000 RM’000 RM’000

Cash and bank balances 6,902 9,921 8 19 Less: Deposits pledged with licensed banks (811) (2,365) - - Bank overdrafts (5,798) (5,781) (2,905) (3,006)

293 1,775 (2,897) (2,987)

STATEMENTS OF CASH FLOWS (CONT’D)FOR THE YEAR ENDED 30 APRIL 2016


NOTES TO THE FINANCIAL STATEMENTS30 APRIL 2016

1. GENERAL INFORMATION

The Company is principally engaged in investment holding and provision of management services to its subsidiaries. The principal activities of the subsidiaries are as set out in Note 5 to the financial statements.

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Malaysia”).

The registered office is located at Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan.

The principal place of business of the Company is located at Lot 132, Jalan 16/1, Kawasan Perindustrian Cheras Jaya, 43200 Balakong, Selangor Darul Ehsan.

2. SIGNIFICANT ACCOUNTING POLICIES

The financial statements for the financial year ended 30 April 2016 have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRSs”) and the requirements of the Companies Act, 1965 in Malaysia.

(a) Changes in Accounting Policies and Effects Arising from Adoption of New and Revised Standards and Interpretations

The accounting policies adopted by the Group and by the Company are consistent with those adopted in the previous financial year except for the adoption of the following new, revised MFRSs and amendments.

DescriptionEffective for annual period

beginning on or after

Amendments to MFRS 119, Employee Benefits –Defined Benefit Plans: Employee Contributions

1 July 2014

Amendments to MFRSs contained in the documententitled Annual Improvements 2010 – 2012 Cycle

1 July 2014

Amendments to MFRSs contained in the documententitled Annual Improvements 2011 – 2013 Cycle

1 July 2014

The adoption of the above Standards and Amendments has no material impact to the financial statements of the Group and of the Company.

(b) Standards and IC Interpretations Issued But Not Yet Effective

At the date of authorisation for issue of the financial statements, the new and revised Standards and Amendments issued but not yet effective and not early adopted by the Group and by the Company are as listed below:



MFRS 14, Regulatory Deferral Accounts 1 January 2016

Amendments to MFRS 10, Consolidated Financial Statements, MFRS 12, Disclosure of Interests in Other Entities and MFRS 128, Investments in Associates and Joint Ventures – Investment Entities: Applying the Consolidation Exception

1 January 2016

Amendments to MFRS 11, Joint Arrangements – Accounting for Acquisitions of Interests in Joint Operation

1 January 2016

Amendments to MFRS 101, Presentation of Financial Statements – Disclosure Initiative

1 January 2016

Amendments to MFRS 116, Property, Plant and Equipment and MFRS 138, Intangible Assets – Clarification of Acceptable Methods of Depreciation and Amortisation

1 January 2016


NOTES TO THE FINANCIAL STATEMENTS (CONT’D)30 APRIL 2016

2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(b) Standards and IC Interpretations Issued But Not Yet Effective (cont’d)



Amendments to MFRS 116, Property, Plant and Equipment and MFRS 141, Agriculture – Agriculture: Bearer Plants

1 January 2016

Amendments to MFRS 127, Separate Financial Statements – Equity Method in Separate Financial Statements

1 January 2016

Amendments to MFRSs contained in the document entitled Annual Improvements 2012 – 2014 Cycle

1 January 2016

Amendments to MFRS 107, Statement of Cash Flows – Disclosure Initiative 1 January 2017

Amendments to MFRS 112, Income Taxes – Recognition of Deferred Tax Assets for Unrealised Losses

1 January 2017

MFRS 9, Financial Instruments 1 January 2018

MFRS 15, Revenue from Contracts with Customers 1 January 2018

Amendments to MFRS 7, Financial Instruments: Disclosures – Mandatory Effective Date of MFRS 9 and Transition Disclosure

1 January 2018

MFRS 16, Leases 1 January 2019

Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates and Joint Ventures – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

to be announced

The Group and the Company will adopt the above pronouncements when they become effective in the respective financial year. The Group and the Company do not expect any material impact to the financial statements of the above pronouncements other than the Standards described below, for which the effects of adoption are still being assessed.

(i) MFRS 15, Revenue from Contracts with Customers

MFRS 15, Revenue from Contracts with Customers was issued in September 2014 and established a five-step model that will apply to recognition of revenue arising from contracts with customers. Under this Standard, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The principle of this Standard is to provide a more structured approach to measuring and recognising revenue.

This Standard is applicable to all entities and will supersede all current revenue recognition requirements under MFRS. Either a full or modified retrospective application is required for annual periods beginning on or after 1 January 2018 with early adoption permitted.

(ii) MFRS 9, Financial Instruments

MFRS 9, Financial Instruments, will replace MFRS 139, Financial Instruments: Recognition and Measurement.

MFRS 9 retains but simplifies the mixed measurement model in MFRS 139 and establishes three primary measurement categories for financial assets: amortised cost, fair value through profit or loss and fair value through other comprehensive income (“OCI”). The basis of classification depends on the entity’s business model and the cash flow characteristics of the financial asset. Investments in equity instruments are always measured at fair value in OCI (provided the instrument is not held for trading). A debt instrument is measured at amortised cost only if the entity is holding it to collect contractual cash flow and the cash flow represent principal and interest.




(b) Standards and IC Interpretations Issued But Not Yet Effective (cont’d)

(ii) MFRS 9, Financial Instruments (cont’d)

For liabilities, the standard retains most of the MFRS 139 requirements. These include amortised cost accounting for most financial liabilities, with bifurcation of embedded derivatives. The main change is that in case where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than to profit or loss, unless this creates an accounting mismatch.

MFRS 9 introduces an expected credit loss model on impairment for all financial assets that replaces the incurred loss impairment model used in MFRS 139. The expected credit loss model is forward-looking and eliminates the need for a trigger event to have occurred before credit losses are recognised.

This Standard will come into effect on or after 1 January 2018 with early adoption permitted. Retrospective application is required, but comparative information is not compulsory.

(iii) MFRS 16, Leases

MFRS 16 specifies how an MFRS reporter will recognise, measure, present and disclose leases. The Standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with MFRS 16’s approach to lessor accounting substantially unchanged from its predecessor, MFRS 117.

At lease commencement, a lessee will recognise a right-of-use asset and a lease liability. The right-of-use asset is treated similarly to other non-financial assets and depreciated accordingly and the liability accrues interest. The lease liability is initially measured at the present value of the lease payments payable over the lease term, discounted at the rate implicit in the lease if that can be readily determined. If that rate cannot be readily determined, the lessees shall use their incremental borrowing rate.

Either a full or modified retrospective application is required for annual periods beginning on or after 1 January 2019 with early adoption permitted.

(iv) Amendments to MFRS 101, Presentation of Financial Statements – Disclosure Initiative

The amendments to MFRS 101 provide further guidance on the presentation and disclosure of the financial statements. When applying this amendments, an entity shall decide, taking into consideration all relevant facts and circumstances, how it aggregates information in its financial statements, which include notes. An entity shall not reduce the understandability of its financial statements by obscuring material information with immaterial information or by aggregating material items that have different natures and functions. The directors anticipate that the amendments may result in more substantial disclosures being made in the financial statements.

(v) Amendments to MFRS 107, Statement of Cash Flows – Disclosure Initiative

The amendments to MFRS 107 require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including changes from both cash flows and non-cash changes.

The amendments should be applied prospectively and comparative information is not required for earlier periods presented.

The impact of MFRS 9, MFRS 15 and MFRS 16 are still being assessed. Aside from MFRS 9, MFRS 15 and MFRS 16, the adoption of amendments to published standards are not expected to have a material impact to the financial statements of the Group and of the Company.




2.1 Basis of Preparation

The financial statements of the Group and of the Company have been prepared in accordance with MFRSs and the provisions of the Companies Act, 1965 in Malaysia. The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.

The financial statements are presented in Ringgit Malaysia (“RM”).

2.2 Basis of Consolidation

Business Combinations

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Acquisition of subsidiaries are accounted for by applying the acquisition method. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in accordance with MFRS 139 Financial Instrument: Recognition and Measurement, either in profit or loss or as change to other comprehensive income. If the contingent consideration is classified as equity, it is not to be remeasured until it is finally settled within equity.

In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.

The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.

Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill. The accounting policy for the goodwill is set out in Note 2.5 to the financial statements. In instances where the latter amount exceeds the former, the excess is recognised as gain on bargain purchase in profit or loss on the acquisition date.

2.3 Foreign Currencies

(i) Functional and Presentation Currency

The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the Company’s functional currency.




2.3 Foreign Currencies (cont’d)

(ii) Foreign Currency Transactions

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

The closing rates used in the translation of foreign currency monetary assets and liabilities and the financial statements of foreign operations are as follows:

2016 2015RM RM

1 United States Dollar (USD) 3.90 3.561 Singapore Dollar (SGD) 2.91 2.691 Renminbi Yuan (RMB) 0.60 0.571 Australia Dollar (AUD) 2.98 2.831 Euro Dollar (EUR) 4.44 3.991 Pound Sterling (GBP) 5.69 -100 Thailand Baht (THB) 11.18 10.80100 Hong Kong Dollar (HKD) 50.32 45.951000 Indonesian Rupiah (IDR) 0.30 0.28

(iii) Foreign Operations

The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the reporting date and income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in the profit or loss.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the reporting date.




2.4 Property, Plant and Equipment and Depreciation

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, property, plant and equipment except for freehold land, are measured at cost less accumulated depreciation and accumulated impairment losses, if any. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the property, plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

Certain freehold and leasehold properties are stated at revalued amount, which is the fair value at the date of the revaluation less any accumulated impairment losses.

Freehold land has an unlimited useful life and therefore is not depreciated.

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:

Buildings 2% and 10%Plant and machinery 5% to 25%Office equipment, furniture and fittings 5% to 25%Motor vehicles 10% to 20%Mould and die cutters 10% to 20%Renovation 10% to 20%

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each year-end, and adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.

2.5 Intangible Assets

Goodwill

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated impairment losses, if any.

For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group’s cash-generating units that are expected to benefit from the synergies of the combination.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.




2.5 Intangible Assets (cont’d)

Goodwill (cont’d)

Goodwill and fair value adjustments arising on the acquisition of foreign operation on or after 1 January 2006 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated in accordance with the accounting policy set out in Note 2.3 to the financial statements.

Goodwill and fair value adjustments which arose on acquisitions of foreign operation before 1 January 2006 are deemed to be assets and liabilities of the Company and are recorded in RM at the rates prevailing at the date of acquisition.

2.6 Development Expenditure

Expenditure on development activities, where research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalised if the product or process is technically and commercially feasible and the Group has sufficient resources to complete development. The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of overheads. Other development expenditure is recognised in profit or loss as incurred.

Capitalised development expenditure is stated at cost less accumulated amortisation. These expenditure are amortised and recognised as expenses on systematic basis from the date of commencement of commercial production so as to reflect the pattern in which the related economic benefits are recognised, which are over three (3) to five (5) years.

2.7 Impairment of Non-Financial Assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units (“CGU”)).

In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

Impairment losses are recognised in profit or loss except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment loss on goodwill is not reversed in a subsequent period.




2.8 Subsidiaries

A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities.

In the Company’s separate financial statements, investment in subsidiaries are accounted for at cost less impairment losses, if any.

2.9 Associate

An associated company is defined as a company, not being a subsidiary company, in which the Company has a long term equity interest and where it exercises significant influence over the financial and operation policies.

Investment in associated company is accounted for in the consolidated financial statements using the equity method of accounting. Under the equity method, the investment in associated company is carried in the consolidated statement of financial position at cost adjusted for post-acquisition changes in the Group’s share of net assets of the associated company. The Group’s share of the net profit or loss of the associated company is recognised in profit or loss. Where there has been a change recognised directly in the equity of the associated company, the Group recognises its share of such changes.

In applying the equity method, unrealised gains and losses on transactions between the Group and the associated company are eliminated to the extent of the Group’s interest in the associated company. After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group’s net investment in the associate. The associated company is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associated company.

When the Group’s share of losses in an associated company equals or exceeds its interest in the associate, including any long-term interests that, in substance, form part of the Group’s net investment in the associated company, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associated company.

The most recent available audited financial statements of the associates are used by the Group in applying the equity method. Where the dates of the audited financial statements used are not coterminous with those of the Group, the share of results is arrived at from the last audited financial statements available and management financial statements to the end of the accounting period. Uniform accounting policies are adopted for like transactions and events in similar circumstances.

In the Company’s separate financial statements, investment in associated company is stated at cost less accumulated impairment losses.

On disposal of such investments, the differences between net disposal proceeds and their carrying amounts is included in profit or loss.

2.10 Financial Assets

Financial assets are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets.




2.10 Financial Assets (cont’d)

(i) Financial Assets at Fair Value through Profit or Loss

Financial assets are classified as financial assets at fair value through profit or loss if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised separately in profit or loss as part of other losses or other income.

Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assets that are held primarily for trading purposes are presented as current whereas financial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

The Group and the Company have not designated any financial assets as at fair value through profit or loss.

(ii) Loans and Receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current.

(iii) Held-to-Maturity Investments

Financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold the investment to maturity.

Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the held-to-maturity investments are derecognised or impaired, and through the amortisation process.

Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12 months after the reporting date which are classified as current.

The Group and the Company have not designated any financial assets as held-to-maturity investments.

(iv) Available-for-Sale Financial Assets

Available-for-sale financial assets are financial assets that are designated as available for sale or are not classified in any of the three preceding categories.

After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in profit or loss when the Group’s and the Company’s right to receive payment is established.




2.10 Financial Assets (cont’d)

(iv) Available-for-Sale Financial Assets (cont’d)

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss, if any.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.

The Group and the Company have not designated any financial assets as available-for-sale.

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date that the Group and the Company commit to purchase or sell the asset.

2.11 Impairment of Financial Assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.

(i) Trade and Other Receivables and Other Financial Assets Carried at Amortised Cost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics.

Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

(ii) Available-for-Sale Financial Assets

Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market are considerations to determine whether there is objective evidence that investment securities classified as available-for-sale financial assets are impaired.




2.11 Impairment of Financial Assets (cont’d)

(ii) Available-for-Sale Financial Assets (cont’d)

If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss.

Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income. For available-for-sale debt investments, impairment losses are subsequently reversed in profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss in profit or loss.

2.12 Cash and Cash Equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the Group’s cash management.

2.13 Inventories

Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their present location and condition are accounted for as follows:

- Raw materials: purchase costs on a first-in first-out basis.- Finished goods and work-in-progress: costs of direct materials and labour and a proportion of manufacturing

overheads based on normal operating capacity. These costs are assigned on a first-in first-out basis.

Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.

2.14 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

2.15 Financial Liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities, within the scope of MFRS 139, are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.




2.15 Financial Liabilities (cont’d)

(i) Financial Liabilities at Fair Value through Profit or Loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities held for trading include derivatives entered into by the Group and the Company that do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net gains or losses on derivatives include exchange differences.

The Group and the Company have not designated any financial liabilities as at fair value through profit or loss.

(ii) Other Financial Liabilities

The Group’s and the Company’s other financial liabilities include trade payables, other payables and loans and borrowings.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

2.16 Borrowing Costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs consist of interest and other costs that the Group and the Company incurred in connection with the borrowing of funds.

2.17 Employee Benefits

(i) Short Term Benefits

Wages, salaries, bonuses and social security contributions (“Socso”) are recognised as expenses in the year in which the associated services are rendered by employees of the Group and the Company. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.




2.17 Employee Benefits (cont’d)

(ii) Defined Contribution Plans

The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. The Malaysian companies in the Group make contributions to the Employee Provident Fund in Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

(iii) Defined Benefit Plan and Other Long-term Employee Benefits

Post-employment benefits and other long-term employee benefits such as long service leave and awards are accrued and recognised as expense when services have been rendered by qualified employees.

The post-employment benefits and other long-term employee benefits are actuarially determined using the Projected Unit Credit Method. The estimated benefit liability at statements of financial position date represents the present value of the defined benefits obligation at statement of financial position date, less the fair value of plan assets, and adjusted for unrecognised actuarial gains, non-vested past service costs, termination costs and curtailment gain or loss.

The post-employment benefits expense recognised during the current year consists of current service cost, interest on obligation, actuarial gains or losses and past service costs and reduced by employees’ contributions and expected return on plan assets.

Provisions made pertaining to past service costs are deferred and amortised over the expected average remaining service years of the qualified employees. Furthermore, provisions for current service costs are directly charged to operations of the current year/period. Actuarial gains or losses arising from adjustments and changes in actuarial assumptions are recognised as income or expense when the net cumulative unrecognised actuarial gains or losses at the end of the previous reporting period exceed 10% of the present value of the defined benefit obligations or 10% of the fair value of plan assets, at that date. The actuarial gains or losses in excess of the aforementioned 10% threshold are recognised on a straightline method over the expected average remaining service years of the qualified employees.

Actuarial gains or losses and past service costs from other long-term employee benefits are recognised directly in the statement of comprehensive income of the current period.

2.18 Leases

As Lessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.

Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life and the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

2.19 Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.




2.19 Revenue (cont’d)

(i) Sale of Goods

Revenue from sales of goods is measured at the fair value of the receivable consideration and is recognised upon transfer of significant risks and rewards of ownership of the goods to the customer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(ii) Interest Income

Interest income is recognised on an accrual basis using the effective interest method.

(iii) Dividend Income

Dividend income is recognised when the right to receive payment is established.

(iv) Rental Income

Rental income is recognised on accrued basis.

2.20 Government Grants

Government grants are recognised when there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. Where the grant relates to an asset, the fair value is recognised as deferred capital grant on the statement of financial position and is amortised to profit or loss over the expected useful life of the relevant asset by equal annual installments.

Where loans or similar assistance are provided by governments or related institutions with an interest rate below the current applicable market rate, the effect of this favourable interest is regarded as additional government grant.

2.21 Non-Current Assets Held for Sale and Discontinued Operations

Non-current assets that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. Upon classification as held for sale, non-current assets or components of a disposal group are not depreciated and are measured at the lower of their carrying amount and fair value less cost to sell. Any differences are recognised in profit or loss.

A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of comprehensive income is restated as if the operation had been discontinued from the start of the comparative period.

2.22 Income Taxes

(i) Current Tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity.




2.22 Income Taxes (cont’d)

(ii) Deferred Tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

- where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:

- where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

2.23 Segment Reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 27 to the financial statements, including the factors used to identify the reportable segments and the measurement basis of segment information.




2.24 Share Capital and Share Issuance Expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

2.25 Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group.

Contingent liabilities and assets are not recognised in the statements of financial position of the Group.

2.26 Significant Accounting Judgements and Estimates

The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.

(i) Judgements Made in Applying Accounting Policies

In the process of preparing the financial statements, there were no significant judgements made in applying the accounting policies of the Group which may have significant effects on the amounts recognised in the financial statements.

(ii) Key Sources of Estimation Uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Impairment of Investment in Subsidiaries

The management determines whether the carrying amounts of its investments are impaired at reporting date. This involves measuring the recoverable amounts which includes fair value less costs to sell and valuation techniques. Valuation techniques include amongst others, discounted cash flows analysis and in some cases, based on current market indicators and estimates that provide reasonable approximations to the detailed computation or based on total shareholders’ equity of the subsidiaries.

The carrying amount of investment in subsidiaries as at 30 April 2016 were RM31,683,417 (2015: RM31,683,419). Further details are disclosed in Note 5 to the financial statements. Based on management’s review, no further adjustment for impairment is required for the investment in subsidiaries by the Company during the current year.

(b) Impairment of Investment in Associate

The management determines whether the carrying amounts of its investments are impaired at reporting date. This involves measuring the recoverable amounts which includes fair value less costs to sell and valuation techniques. Valuation techniques include amongst others, discounted cash flows analysis and in some cases, based on current market indicators and estimates that provide reasonable approximations to the detailed computation or based on total shareholders’ equity of the associate.




2.26 Significant Accounting Judgements and Estimates (cont’d)

(ii) Key Sources of Estimation Uncertainty (cont’d)

(b) Impairment of Investment in Associate (cont’d)

The carrying amount of investment in associate as at 30 April 2016 was RMNil (2015: RMNil). Further details are disclosed in Note 6 to the financial statements. Based on management review, no further adjustment for impairment is required for the investment in associate by the Company during the current year.

(c) Impairment of Loans and Receivables

The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s loans and receivables at the reporting date is disclosed in Note 11 to the financial statements.

(d) Useful Lives of Property, Plant and Equipment

The cost of property, plant and equipment is depreciated on a straight-line basis over the assets’ estimated economic useful lives. Management estimates the useful lives of these plant and equipment to be within 4 to 20 years. These are common life expectancies applied in the manufacturing industry. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. The carrying amount of the Group’s property, plant and equipment at the reporting date is disclosed in Note 3 to the financial statements.

(e) Deferred Tax Assets

Deferred tax assets are recognised for all unused tax losses, unabsorbed capital allowances, unutilised reinvestment allowances and other deductible temporary differences to the extent that it is probable that taxable profit will be available against which the losses, capital allowances and provisions can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

(f) Income Taxes

There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Group and the Company recognise tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the year in which such determination is made.

(g) Write-down of Inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories.



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3. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

The net book value of the building of a subsidiary, Guangzhou Komark Labels & Labelling Co., Ltd. amounting to RMNil (2015: RM3,115,000) is built on a piece of land belonging to and leased from the authority of the People’s Republic of China. The lease term is due to expire in the year 2044.

The net book value of plant and machinery and motor vehicles of the Group acquired under hire purchase agreements amounted to RM5,899,000 (2015: RM14,280,000) and RM156,000 (2015: RM402,000) respectively.

Freehold land and buildings and plant and machinery of the Group amounting to RM32,367,000 (2015: RM35,913,000) and RM3,452,000 (2015: RM3,494,000) respectively are charged to licensed banks and financial institutions as security for borrowings granted to the Company and certain subsidiaries (Note 20 to the financial statements).

4. PREPAID LEASE PAYMENTS ON LAND

Group2016 2015

RM’000 RM’000

CostAt 1 May 6,108 2,128 Revaluation - 3,766 Exchange difference 296 214 Transfer to assets classified as held for sale (6,404) - At 30 April - 6,108

Accumulated depreciationAt 1 May (458) (370)Charge for the year (125) (48)Exchange difference (16) (40)Transfer to assets classified as held for sale 599 - At 30 April - (458)

Net carrying amount - 5,650

Leasehold land of the Group has been pledged as security to financial institution for banking facilities granted to the Group.

5. INVESTMENTS IN SUBSIDIARIES

Company2016 2015

RM’000 RM’000

Unquoted shares, at cost 31,683 31,683



5. INVESTMENTS IN SUBSIDIARIES (CONT’D)

The list of subsidiaries, their places of incorporation, their principal activities and the effective interest of the Company are as follows:

Name of CompanyCountry of

incorporation Principal activitiesEffective equity

interest2016 2015

% %

General Labels & Labelling(M) Sdn. Bhd.

Malaysia Manufacturing of self adhesive labels and stickers, and labelling machines and trading of related products

100 100

Komark International (M) Sdn. Bhd. Malaysia Manufacturing of self adhesive labels 100 100

General Labels & Labelling (Penang) Sdn. Bhd.

Malaysia Ceased operation 100 100

General Labels & Labelling (Ipoh)Sdn. Bhd.

Malaysia Ceased operation 100 100

^ Komark Investment Holdings Ltd. British VirginIsland

Investment holding 100 100

Komark Australasia Pty. Ltd. Australia Deregistered - 100

The subsidiaries of General Labels & Labelling (M) Sdn. Bhd. are as follows:



interest2016 2015

% %

General Labels & Labelling (JB) Sdn. Bhd.

Malaysia Manufacturing of self adhesive labels and stickers, and trading of related products

100 100

* General Labels & Labelling Pte Ltd Singapore Printer of labels and stickers 100 100

* Komark (Thailand) Company Limited Thailand Manufacturing and selling of self adhesive labels

100 100

The subsidiaries of Komark Investment Holdings Ltd. are as follows:



interest2016 2015

% %

* Shanghai Komark Labels &Labelling Co., Ltd.

People’s Republicof China

Manufacturing and selling of self adhesive labels

100 100

* Guangzhou Komark Labels & Labelling Co., Ltd.

People’s Republicof China

Manufacturing and selling of self adhesive labels

100 100

Komark Hong Kong Company Limited Hong Kong Deregistered - 100



5. INVESTMENTS IN SUBSIDIARIES (CONT’D) The subsidiary of Komark International (M) Sdn. Bhd. is as follows:



interest2016 2015

% %

* PT Komark Labels and Labelling Indonesia

Indonesia Manufacturing and trading of self adhesive labels

100 100

* Audited by another firm of auditors.^ Consolidated based on management financial statements as at 30 April 2016 in which we have reviewed for

consolidation purposes.

6. INVESTMENT IN ASSOCIATE

Group2016 2015

RM’000 RM’000

Unquoted shares, at cost 2 2 Share of post acquisition results (2) (2)

- -

Represented by:Group’s share of net assets - -

The shares of the associate are held directly by one of the subsidiaries, namely Komark International (M) Sdn. Bhd. Details of the associate are as follows:



interest2016 2015

% %

* Komark Enterprise Co. Ltd. Thailand Trading of self adhesive labels and related tools and equipment

49 49

* Audited by another firm of auditors.



7. DEVELOPMENT EXPENDITURE

Group2016 2015

RM’000 RM’000

Automatic labelling machineries

CostAt 1 May 1,409 5,868 Reclassification - (4,459)At 30 April 1,409 1,409

Accumulated amortisationAt 1 May 1,409 4,797 Reclassification - (3,388)At 30 April 1,409 1,409

Accumulated impairmentAt 1 May - 1,071 Reclassification - (1,071)At 30 April - -

Net carrying amount - -

Group2016 2015

RM’000 RM’000

Roto-gravure/offset combination labels press project

CostAt 1 May 4,397 3,995 Exchange difference 213 402 Transfer to assets classified as held for sale (4,610) - At 30 April - 4,397

Accumulated amortisationAt 1 May 4,146 3,766 Exchange difference 200 380 Transfer to assets classified as held for sale (4,346) - At 30 April - 4,146

Accumulated impairmentAt 1 May - - Impairment loss for the year 279 - Exchange difference (15) - Transfer to assets as classified held for sale (264) - At 30 April - -

Net carrying amount - 251

Total net carrying amount - 251

The roto-gravure/offset combination labels press commenced its commercial production in December 2002. The amortisation represents the amount charged from the date of commercial production.



8. DEFERRED TAX ASSETS/(LIABILITIES)

Group2016 2015

RM’000 RM’000

Deferred tax assets/(liabilities)At 1 May (643) (554)Effect of adoption of amendments to MFRS 119 (9) - Transferred to/(from) statement of profit or loss and other

comprehensive income (Note 24) 34 (89)Effect of exchange difference 4 - At 30 April (614) (643)

Recognised deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:

Assets (Liabilities) Net2016 2015 2016 2015 2016 2015

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group

Taxable temporary differences - - (1,661) (1,670) (1,661) (1,670)Unabsorbed capital

allowances - - 58 575 58 575 Unutilised tax losses - - 191 199 191 199 Unutilised reinvestment

allowances - - 748 151 748 151 Others - - - 60 - 60 Post-employment benefits 50 42 - - 50 42 Net tax assets/(liabilities) 50 42 (664) (685) (614) (643)

Deferred tax assets and liabilities are offset where there is a legally enforceable right to set off current tax assets against current tax liabilities and where the deferred taxes relate to the same taxation authority and same entity.

As at 30 April 2016, the amount of estimated net deferred tax assets of the Group measured at current tax rate which are not recognised in the financial statements, are as follows:

Group2016 2015

RM’000 RM’000 (Restated)

Temporary differences (3,466) (3,569)Unabsorbed capital allowances 3,409 3,071 Unutilised tax losses 5,049 5,038 Unutilised reinvestment allowances 7,835 8,161 At 30 April 12,827 12,701



9. GOODWILL ON CONSOLIDATION

Group2016 2015

RM’000 RM’000

Goodwill on consolidation

Amount recognised on acquisitions 2,413 2,413 Accumulated amortisation (663) (663)Net book value 1,750 1,750

Negative goodwill amounting to RM7,195,813 has been fully amortised and recognised in the statement of profit or loss and other comprehensive income in the previous financial year. Goodwill on consolidation is no longer amortised since financial year 2007, instead it is subject to impairment. There is no impairment as at the end of current financial year.

10. INVENTORIES

Group2016 2015

RM’000 RM’000

Raw materials 3,267 5,304 Work-in-progress 433 438 Manufactured inventories 4,522 11,219 Others - 518

8,222 17,479 Less : Allowance for slow-moving manufactured inventories (459) (920)

7,763 16,559

11. TRADE AND OTHER RECEIVABLES

Group Company2016 2015 2016 2015

RM’000 RM’000 RM’000 RM’000

Trade receivables - Third parties 11,866 32,147 - - - Associated company 1,240 1,261 - - 13,106 33,408 - - Less: Allowance for impairment (1,499) (1,541) - - Trade receivables, net 11,607 31,867 - -

Other receivables, deposits and prepayments 741 2,712 3 1 12,348 34,579 3 1

Trade receivables are non-interest bearing and are generally on 1 to 120 (2015: 1 to 120) days term. They are recognised at their original invoice amounts which represent their fair values on initial recognition.



11. TRADE AND OTHER RECEIVABLES (CONT’D)

Ageing analysis of trade receivables

The ageing analysis of the Group’s trade receivables is as follows:

Group2016 2015

RM ‘000 RM ‘000

1 - 90 days 5,335 30,302 91 - 180 days 1,497 1,516 181 days and above 4,775 49

11,607 31,867 Impaired 1,499 1,541 13,106 33,408

Receivables that are not impaired

Trade receivables that are not impaired are creditworthy debtors with good payment records with the Group. None of the Group’s trade receivables that are not impaired have been renegotiated during the year.

Receivables that are impaired

The Group’s trade receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:

Group2016 2015

RM ‘000 RM ‘000

Trade receivables - nominal amounts 1,499 1,541 Less: Allowance for impairment losses (1,499) (1,541)

- -

Movements in allowance accounts:

Group2016 2015

RM ‘000 RM ‘000

At 1 May 1,541 3,050 Reversal for the year (77) (1,045)Write-off against allowance accounts - (504)Exchange difference 35 40 At 30 April 1,499 1,541

Trade receivables that are collectively and individually determined to be impaired at the reporting date mainly relate to balances which have been significantly long outstanding. These receivables are not secured by any collateral or credit enhancements.



12. AMOUNT DUE FROM/(TO) RELATED COMPANIES/ASSOCIATE COMPANY

Company2016 2015

RM’000 RM’000

Amount due from related companies 58,583 56,782 Less: Allowance for impairment - - 58,583 56,782

Movement in allowance accounts:

At 1 May - 8 Write-off against allowance accounts - (8) - -

These balances are non-trade in nature, unsecured, non-interest bearing and are repayable on demand.

13. CASH AND BANK BALANCES

Group Company2016 2015 2016 2015

RM’000 RM’000 RM’000 RM’000

Deposits with licensed banks 889 2,895 - - Cash in hand and at banks 2,485 7,026 8 19 3,374 9,921 8 19

Included in deposits placed with licensed banks of the Group is RM811,431 (2015: RM2,364,865) pledged as security for borrowings granted to subsidiaries (Note 20 to the financial statements).

During the financial year, the fixed deposits earned interest rates ranging from 0.65% - 3.45% per annum and have average maturities of 7 days - 36 months.

14. ASSETS CLASSIFIED AS HELD FOR SALE

On 28 April 2016, the Board of Directors of the Company announced that the Company had entered into a conditional share purchase agreement with Lagora HK Limited (“Lagora HK”) for the proposed disposal of its entire interest in Komark Investment Holdings Ltd., including its wholly-owned subsidiary companies, namely Shanghai Komark Labels & Labelling Co., Ltd. and Guangzhou Komark Labels & Labelling Co., Ltd., (“KIH and its subsidiaries”) to Lagora HK for an indicative disposal consideration of RM48,000,000. (“Proposed Disposal”). KIH and its subsidiaries will cease to be a subsidiary of the Company upon the completion of the Proposed Disposal.

The resolution in relation to the Proposed Disposal was duly passed by way of poll at the Extraordinary General Meeting of the Company held on 18 July 2016.



14. ASSETS CLASSIFIED AS HELD FOR SALE (CONT’D)

As at 30 April 2016, the assets and liabilities of the disposal group are as follows:

GroupNote 2016

RM’000

Assets classified as held for sale:Property, plant and equipment a 58,778 Prepaid lease payments on land b 5,805 Inventories c 9,858 Trade and other receivables 20,357 Tax recoverable 700 Cash and bank balances 3,528 99,026

Liabilities directly associated with assets classified as held for sale:Trade and other payables (20,961)Borrowings d (25,463) (46,424)

(a) Property, plant and equipment held for sale comprise the following:

Group2016

RM’000

Cost 130,293 Accumulated depreciation (71,515) 58,778

The net book value of plant and machinery acquired under hire purchase agreement amounted to RM13,986,000.

Leasehold buildings and plant and machinery amounting to RM3,201,000 and RM3,452,000 respectively are charged to licensed banks and financial institutions as security for borrowings granted to certain subsidiaries.

(b) Prepaid lease payments on land held for sale comprise the following:

Group2016

RM’000

Cost 6,404 Accumulated depreciation (599) 5,805

The leasehold land has been pledged as security to financial institution for banking facilities granted to the subsidiary.



14. ASSETS CLASSIFIED AS HELD FOR SALE (CONT’D)

(c) Inventories held for sale were carried at cost and comprise the following:

Group2016

RM’000

Raw materials 1,358 Work-in-progress 143 Manufactured inventories 8,538

10,039 Less : Allowance for slow-moving manufactured inventories (181) 9,858

(d) Borrowings held for sale comprise the following:

Group2016

RM’000

CurrentShort-term loans - secured 2,408

- unsecured 20,654 Hire purchase liabilities 1,649

24,711

Non-currentHire purchase liabilities 752

25,463

Hire purchase liabilitiesGroup2016

RM’000

Minimum payment- not later than one year 1,789 - later than one year and not later than five years 794

2,583 Future finance charges on hire purchase (182)Present value of hire purchase payables 2,401

Current 1,649 Non-current 752

2,401

Present value of hire purchase payables- not later than one year 1,649 - later than one year and not later than five years 752 2,401



14. ASSETS CLASSIFIED AS HELD FOR SALE (CONTD)

(d) Borrowings held for sale comprise the following (cont’d):

Additional secured short-term loans of RM2,089,000 [equivalent to RMB3,470,000] and RM11,342,000 [equivalent to RMB18,840,000] respectively are repayable by one bullet payment after one (1) year from the date of first drawdown. These term loans are obtained by two foreign subsidiaries from two foreign banks.

Additional unsecured short-term loan of RM2,408,000 [equivalent to RMB4,000,000] is rollovered and repayable within one (1) year commencing September 2015. This short-term loan is obtained by a foreign subsidiary from a foreign bank.

Additional unsecured short-term loan of RM7,224,000 [equivalent to RMB12,000,000] is repayable within one (1) year commencing July 2015. This short-term loan is obtained by a foreign subsidiary from a local bank.

The non-current asset classified as held for sale in the Company’s statement of financial position as at 30 April 2016 is as follows:

Company2016

RM’000AssetInvestment in subsidiary -#


15. SHARE CAPITAL

Group and CompanyOrdinary share Number of ordinary shares Amount

each at 2016 2015 2016 2015RM’000 RM’000

Authorised At 1 May RM0.25 2,000,000,000 500,000,000 500,000 500,000 Capital reduction in par value - - 1,500,000,000 - - At 30 April RM0.25 2,000,000,000 2,000,000,000 500,000 500,000

Issued and fully paid At 1 May RM0.25 122,613,848 81,275,010 30,653 81,275 Cancellation of treasury shares - - (1,000) - (1) Capital reduction in par value - - - - (60,956) New shares issued under: - rights issue RM0.25 - 40,637,005 - 10,159 - warrants exercised RM0.25 2,020,000 702,833 505 176 At 30 April RM0.25 124,633,848 122,613,848 31,158 30,653

During the financial year, the Company increased its issued and paid-up ordinary share capital from RM30,653,462 to RM31,158,462 by way of the issuance of 2,020,000 new ordinary shares of RM0.25 each pursuant to the exercise of warrants at an exercise price of RM0.30 per ordinary share for cash.

The new ordinary shares issued during the financial year rank pari passu in all respects with the existing ordinary shares of the Company.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.



16. TREASURY SHARES

Group and Company2016 2015

Number of ordinary shares of RM1 each At 1 May - 1,000 Cancelled during the year - (1,000) At 30 April - -

2016 2015RM’000 RM’000

Ordinary shares of RM1 each At 1 May - -# Cancelled during the year - -# At 30 April - -


17. SHARE PREMIUM

Group and Company2016 2015

RM’000 RM’000

At 1 May 17,165 15,634 Cancellation of treasury shares - -# New shares issued under:- rights issue - 2,032 - warrants exercised 101 35 Cost of issuance not recognised in profit or loss - (536)At 30 April 17,266 17,165


The share premium is not distributable by way of dividends and may be utilised in the manner set out in Section 60(3) of the Companies Act, 1965.

18. WARRANT RESERVE

On 22 January 2015, the Company issued a renounceable rights issue of 40,637,005 new ordinary shares of RM0.25 each with 40,637,005 free detachable new warrants on the basis of one (1) rights share and one (1) warrant for every two (2) existing ordinary shares of RM0.25 each held in the Company at an issue price of RM0.30 per rights share. These rights shares and warrants were listed on the Bursa Malaysia on 29 January 2015. The issuance resulted in a net proceed of RM11,655,132 to the Company.

Arising from the issue of 40,637,005 warrants with the rights share in previous year, the amount of RM6,449,093 was allocated as warrant reserve based on the theoretical fair value of RM0.1587 per warrant with a corresponding debit amount taken to ‘Accumulated Loss’ account. The warrant reserve will be transferred to the ‘Accumulated Loss’ account upon the exercise of warrant and the warrant reserve in relation to the unexercised warrants, on expiry of the exercise period, shall remain in equity.



18. WARRANT RESERVE (CONT’D)

Principal terms of the warrants are as follows:

(a) The exercise period commenced on the date of issue of the warrants and will expire five years from the date of issuance. Warrants that are not exercised during the exercise period will thereafter lapse and cease to be valid.

(b) The warrants are issued in registered form and constituted by a Deed Poll dated 15 December 2014.

(c) The exercise price is RM0.30 payable in full in respect of each new share of the Company issued upon the exercise of the warrant. Each warrant carries the entitlement to subscribe for one (1) new ordinary share of the Company.

The movements of the warrants are as follows:

Group and CompanyNumber of ordinary shares Amount

2016 2015 2016 2015RM’000 RM’000

At 1 May 39,934,172 - 6,337 - Issue of warrants - 40,637,005 - 6,449 Exercised during the financial year (2,020,000) (702,833) (320) (112)At 30 April 37,914,172 39,934,172 6,017 6,337

19. RESERVES

Group Company2016 2015 2016 2015

RM’000 RM’000 RM’000 RM’000

Non-distributable

General reserveAt 1 May 3,538 2,589 - - Appropriation of profit - 949 - - At 30 April 3,538 3,538 - -

Translation reserveAt 1 May 5,251 4,037 - - Foreign currency translation (307) 1,214 - - At 30 April 4,944 5,251 - -

Revaluation reserveAt 1 May 21,385 12,031 - - Surplus on revaluation - 9,531 - - Realisation of revaluation reserve

on disposal - (177) - - At 30 April 21,385 21,385 - -

Capital redemption reserveAt 1 May 1 - 1 - Cancellation of treasury shares - 1 - 1 At 30 April 1 1 1 1

Capital reserveAt 1 May 33,882 - 33,882 - Capital reduction - 33,882 - 33,882 At 30 April 33,882 33,882 33,882 33,882

Total non-distributable reserves 63,750 64,057 33,883 33,883



19. RESERVES (CONT’D)

Group Company2016 2015 2016 2015

RM’000 RM’000 RM’000 RM’000

Distributable

Accumulated lossAt 1 May (9,506) (16,690) (4,947) (27,074)Profit/(loss) for the year 1,939 (12,781) 257 1,390 Capital reduction - 27,074 - 27,074 Appropriation of profit - (949) - - Issue of warrants - (6,449) - (6,449)Warrants exercised 320 112 320 112 Realisation of revaluation reserve on disposal - 177 - - At 30 April (7,247) (9,506) (4,370) (4,947)

Total Reserves 56,503 54,551 29,513 28,936

a. General Reserve

Subsidiaries in the People’s Republic of China (“PRC”) are required to appropriate 10% of their after-tax profit (after offsetting prior year losses), based on the respective PRC statutory financial statements, to a general reserve fund until the balance of the fund reaches 50% of the Company’s registered capital. Thereafter, any further appropriation can be made at the Directors’ discretion.

The general reserve fund can be utilised to offset prior year losses, or be utilised for the issuance of bonus shares on the condition that the general reserve fund shall be maintained at a minimum of 25% of the registered capital after such issuance.

In accordance with the relevant rules and regulations in the PRC, the subsidiaries may also appropriate a portion of its after-tax profit (after offsetting prior year losses), based on the PRC statutory financial statements, to an enterprise expansion fund and a staff and workers’ bonus and welfare fund at the Director’s discretion.

Subsidiary in Thailand is required to set aside as a statutory reserve at least 5% of net income each time a dividend is declared until the reserve reaches 10% of the registered share capital.

b. Translation Reserve

This represents foreign currency exchange differences arising from the translation of the financial statements of subsidiaries which are denominated in currency other than the presentation currency of the Company, Ringgit Malaysia.

c. Revaluation Reserve

This represents surplus on revaluation arising from the revaluation of certain freehold and leasehold land and buildings of the Group by firms of independent valuer on 28 January 2014, 28 April 2014, 16 May 2014 and 12 June 2014.

d. Capital Redemption Reserve

This arose from the cancellation of treasury shares in previous financial year.

e. Capital Reserve

This represents the excess credit arising from par value reduction in previous financial year.



19. RESERVES (CONT’D)

f. Additional Disclosure Of Realised And Unrealised Profits Or Losses

Group Company2016 2015 2016 2015


Total (accumulated loss)/ retained profit of the Company and its subsidiary companies

- Realised (5,077) (3,651) 1,647 1,390 - Unrealised (906) (3,982) (6,017) (6,337)

(5,983) (7,633) (4,370) (4,947)

Total share of accumulated loss from associatedcompany- Realised (2) (2) - - - Unrealised - - - - (5,985) (7,635) (4,370) (4,947)Less: Consolidation adjustments (1,262) (1,871) - - Total Group/Company accumulated

loss as per consolidated accounts (7,247) (9,506) (4,370) (4,947)

20. BORROWINGS

Group Company2016 2015 2016 2015


CurrentBank overdrafts - secured - - 2,905 3,006

- unsecured 5,798 5,781 - - Bankers’ acceptance - secured 2,991 4,680 - -

- unsecured 618 2,324 - - Term loans - secured 807 1,551 - - Short-term loans - unsecured - 25,460 - - Hire purchase liabilities 1,168 3,578 - -

11,382 43,374 2,905 3,006

Non-currentTerm loans - secured 6,216 8,348 - - Hire purchase liabilities 720 2,605 - -

6,936 10,953 - -

18,318 54,327 2,905 3,006



20. BORROWINGS (CONT’D)

a. Term loans and repayment schedule

(i) Secured term loans

Secured term loans consist of 2 (2015: 6) term loans. Their repayment schedule is as follows:

Secured term loan of RM586,000 (2015: RM2,286,000) is repayable by 48 consecutive installments commencing February 2011. This term loan is obtained by a local subsidiary from a foreign bank. Rescheduled on April 2012 and repayable by 71 consecutive installments commencing from April 2012.

Secured term loan of RM6,437,000 (2014: RM6,655,000) is repayable by monthly installments over a period of twenty (20) years commencing September 2013. This term loan is obtained by a local subsidiary from a local bank.

Secured term loans of RM551,519 [equivalent to RMB1,009,000] and RM260,300 [equivalent to USD76,900] respectively as at the end of the previous financial year have been fully settled during the current financial year.

Secured short-term loans of RM1,913,000 [equivalent to RMB3,500,000] and RM11,391,200 [equivalent to RMB20,840,000] respectively as at the end of the previous financial year have been fully settled during the current financial year.

(ii) Unsecured term loans

Unsecured term loans consist of Nil (2015: 2) term loans. Their repayment schedule is as follows:

Unsecured short-term loans of RM2,733,000 [equivalent to RMB5,000,000] and RM8,199,000 [equivalent to RMB15,000,000] respectively as at the end of the previous financial year have been fully settled during the current financial year.

b. Significant covenants for term loans granted to foreign subsidiaries

In connection with the borrowing facilities agreements and their supplemental agreements, foreign subsidiaries have agreed on the significant covenants with the lender not to raise any additional financing from other financial institutions without prior consent from the lenders and such consent shall not be unreasonably withheld.

c. Other borrowings

The Company’s bank overdrafts facility are secured by legal charges over certain land and building of the Group.

The Group’s other borrowings are secured by way of fixed charges over the freehold and leasehold land and buildings of the respective subsidiaries, certain machinery of a subsidiary, corporate guarantees from the Company and fixed deposits of the respective subsidiaries.



20. BORROWINGS (CONT’D)

d. Hire purchase liabilities

Group2016 2015

RM’000 RM’000

Minimum payment - not later than one year 1,260 3,909 - later than one year and not later than five years 794 2,794

2,054 6,703 Future finance charges on hire purchase (166) (520)Present value of hire purchase payables 1,888 6,183 Current 1,168 3,578 Non-current 720 2,605

1,888 6,183

Present value of hire purchase payables- not later than one year 1,168 3,578 - later than one year and not later then five years 720 2,605 1,888 6,183

Hire purchase liabilities are subject to effective interest rates of 3.30% to 5.39% (2015: 3.30% to 6.30%).

21. TRADE AND OTHER PAYABLES

Group Company2016 2015 2016 2015

RM’000 RM’000 RM’000 RM’000

Trade payables 3,750 23,339 - - Other payables, accrued expenses and

deposit received 3,172 3,864 1,885 855 Amount due to directors 3,415 3,497 20 20 10,337 30,700 1,905 875

(a) Trade Payables

Trade payables are non-interest bearing and are normally settled on 1 to 120 (2015: 1 to 120) days term.

(b) Other Payables

These amounts are non-interest bearing. Other payables are normally settled on an average term of 90 (2015: 90) days term.

(c) Amount due to directors

These balances are unsecured, non-interest bearing and are repayable on demand.



22. OTHER OPERATING INCOME

Group Company2016 2015 2016 2015


Gain on disposal of property, plant and equipment -# 116 - -

Gain on foreign exchange - - - Realised 535 513 - - - Unrealised 2,304 2,506 2,253 1,753 Government grant 28 11 - - Interest income 46 82 -# -# Rebate 452 243 - - Reversal of impairment losses on trade

receivables 90 249 - - Others 87 381 - - Sale of scrap 3 1 - - Waiver of amount due to a director 53 - - - Waiver of other payables -# 3,467 - - Waiver of trade payables - 1 - - 3,598 7,570 2,253 1,753




23. PROFIT/(LOSS) BEFORE TAXATION

The following items have been charged in arriving at profit/(loss) before taxation:

Group Company2016 2015 2016 2015


Allowance for impairment losses:- Trade receivables 37 19 - -Allowance for slow-moving manufactured

inventories 116 (3,441) - -Auditors’ remuneration- Current year’s provision 110 115 14 14- Underprovision in prior years 2 12 1 1Bad debts written off 53 182 - 6Deposit written off 5 - - -Depreciation of property, plant and

equipment - Cost of sales 4,549 4,441 - -- Administration expenses 489 351 - -Directors’ remuneration- Fees - Directors of the Company 643 584 150 146- Other emoluments - Directors of the Company 480 438 240 241 - Other directors of subsidiary 382 343 - -- Gratuity - Director of the Company 1,702 - 1,702 -Finance costs- Bank overdrafts 581 421 246 198- Hire purchase and finance lease 20 309 - -- Short term borrowings 222 1,096 - -- Term loans 453 566 - -- Others 199 9 - -Inventories written off 69 141 - -Investment in subsidiary companies

written off - - -# -Loss on foreign exchange- Realised - 128 - -- Unrealised - 315 - -Management fee 148 - - -Prepayment written off 27 - - -Property, plant and equipment written off - 52 - -Rental of equipment - 2 - -Rental of premises 980 920 - -Staff costs- Salaries, allowances and others 11,757 11,236 284 292- Retirement benefits 53 934 31 31Unreconciled balances written off - 66 - 110




24. TAXATION

Group Company2016 2015 2016 2015


Malaysian income tax- Current year 45 48 - - - (Over)/underprovision in prior year (6) - -# - - Real Property Gains Tax 1 8 - - Overseas income tax- Current year 699 385 - - - Withholding tax 267 236 - - 1,006 677 -# - Deferred taxation (Note 8) 40 89 - -Deferred tax income resulting from

reduction in tax rate (Note 8) (74) - - - Income tax expense attributable to

continuing operations 972 766 -# - Income tax expense attributable to

discontinued operations (Note 25) (224) 896 - - Income tax expense recognised in statement

of profit or loss and other comprehensive income 748 1,662 -# -


The reconciliation between tax expense and the product of accounting profit/(loss) multiplied by the applicable corporate tax rate for the years ended 30 April is as follows:

Group Company 2016 2015 2016 2015

RM’000 RM’000 RM’000 RM’000 (Restated) (Restated)

Profit/(loss) before taxation from continuing operations 1,343 (2,590) 257 1,390

Profit/(loss) before taxation from discontinued operations (Note 25) 1,318 (8,529) - -

Profit/(loss) before taxation 2,661 (11,119) 257 1,390

Taxation at Malaysian statutory tax rate of 24% (2015: 25%) 639 (2,780) 62 348

Effect of different tax rates in foreign jurisdictions (83) 14 - -

Non-deductible expenses 845 3,812 724 337 Income not subject to tax (506) (1,713) (786) (685)Deferred tax assets not recognised 72 1,818 - - Real Property Gains Tax 1 8 - - Withholding tax 267 454 - - Effect of reduction in tax rate (74) - - - 1,161 1,613 - - (Over)/underprovision of income tax in prior

year (413) 49 - # - Tax expense 748 1,662 - # -




24. TAXATION (CONT’D)

Domestic income tax is calculated at the Malaysian statutory tax rate of 24% (2015: 25%) of the estimated assessable profit for the year.

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

25. DISCONTINUED OPERATIONS

On 28 April 2016, the Group sold its entire equity interest in Komark Investment Holdings Ltd., including its wholly-owned subsidiary companies, namely Shanghai Komark Labels & Labelling Co., Ltd. and Guangzhou Komark Labels & Labelling Co., Ltd. for an indicative disposal consideration of RM48,000,000. The disposal of the subsidiary was accounted for as discontinued operations and classified as held for sale as at 30 April 2016 and the comparative statements of profit or loss and other comprehensive income have been re-presented to show the discontinued operations separately from the continuing operations.

Statements of profit or loss and other comprehensive income disclosures

The results of the discontinued operations for the years ended 30 April are as follows:

Group2016 2015

RM’000 RM’000

Revenue 93,827 82,943 Cost of sales (76,054) (80,911)Gross profit 17,773 2,032 Other operating income 661 3,585 Depreciation and amortisation (246) (335)Staff costs and employee benefits (8,158) (5,266)Other operating expenses (6,547) (6,147)Profit/(loss) from operations 3,483 (6,131)Finance costs (2,165) (2,398)Profit/(loss) before taxation from discontinued operations (Note 24) 1,318 (8,529)Taxation related to profit/(loss) from ordinary activities of the

discontinued operations (Note 24) 224 (896)Profit/(loss) after taxation from discontinued operations 1,542 (9,425)



25. DISCONTINUED OPERATIONS (CONT’D)

Statements of profit or loss and other comprehensive income disclosures (cont’d)

The following items have been charged in arriving at profit/(loss) before taxation from discontinued operations:

Group2016 2015

RM’000 RM’000

Allowance for impairment losses :- Development expenditure 279 - - Trade receivables - 21 Allowance for slow-moving manufactured inventories (396) 442 Amortisation of prepaid lease payments on land 125 48 Auditors’ remuneration 29 40 Bad debts written off 113 1,737 Depreciation of property, plant and equipment- Cost of sales 6,057 5,411 - Administration expenses 121 287 Directors’ remuneration- Other emoluments - Directors of the Company 401 330 Finance costs- Hire purchase and finance lease 270 269 - Term loans 1,895 2,129 Inventories written off - 10,758 Loss on disposal of property, plant and equipment 17 - Rental of premises 342 262 Staff costs- Salaries, allowances and others 14,210 15,981

and crediting:

Gain on disposal of property, plant and equipment - 1 Gain on foreign exchange- Realised 127 8 - Unrealised - 93 Government grant - 22 Insurance claim 11 - Interest income 21 11 Others 467 81 Reversal of impairment losses on trade receivables 24 836 Sale of scrap 11 - Waiver of other payables - 112 Waiver of trade payables - 2,421



25. DISCONTINUED OPERATIONS (CONT’D)

Major components of income tax expense related to profit from discontinued operations

The major components of income tax expense related to profit/(loss) from discontinued operations for the financial years ended 30 April are as follows:

Group2016 2015

RM’000 RM’000

Overseas income tax- Current year 183 629 - (Over)/underprovison in prior year (407) 49 Withholding tax - 218 Income tax expense attributable to discontinued operations (224) 896

Statement of cash flows disclosures

The cash flows attributable to the discontinued operations are as follows:

Group2016 2015

RM’000 RM’000

Operating activities 15,110 9,700 Investing activities (11,752) (2,060)Financing activities (5,387) (6,714)

Net cash (outflow)/inflow (2,029) 926

26. EARNINGS/(LOSS) PER SHARE

(a) Continuing operations

The basic earnings/(loss) per share is calculated by dividing profit/(loss) for the year net of tax from continuing operations attributable to equity holders of the Company by the weighted average number of ordinary shares of RM0.25 each in issue during the financial year.

The following reflect the profit/(loss) and share data used in computation of basic earnings/(loss) per share and diluted earnings/(loss) per share for the years ended 30 April:

Group2016 2015

RM’000 RM’000

Profit/(loss) for the year from continuing operations attributable to equity holders of the Company 371 (3,356)

Profit/(loss) for the year from discontinued operations attributable to equity holders of the Company 1,542 (9,425)

Profit/(loss) for the year attributable to equity holders of the Company 1,913 (12,781)



26. EARNINGS/(LOSS) PER SHARE (CONT’D)

(a) Continuing operations (cont’d)

Group2016 2015

Number Numberof shares of shares

‘000 ‘000

Number of ordinary shares in issue at 1 May 122,614 81,275 Effect of shares bought back and held as treasury shares - -# Rights issue - 20,554 Warrants exercised 2,020 8 Weighted average number of ordinary shares in issue

for basic earnings/(loss) per share 124,634 101,837

Effects of dilution :- Unexercised warrants 37,914 4,675 Weighted average number of ordinary shares in issue

for diluted earnings/(loss) per share computation 162,548 106,512

Basic earnings/(loss) per share (sen) 0.3 (3.3)

Diluted earnings/(loss) per share (sen) 0.2 (3.2)


(b) Discontinued operations

The basic earnings/(loss) per share from discontinued operations is calculated by dividing profit/(loss) for the year net of tax from discontinued operations attributable to equity holders of the Company by the weighted average number of ordinary shares of RM0.25 each in issue during the financial year. The profit/(loss) and share data are presented in the tables in Note 26(a).

Group2016 2015

RM RM

Basic earnings/(loss) per share (sen) 1.2 (9.3)

Diluted earnings/(loss) per share (sen) 0.9 (8.8)

27. SEGMENT INFORMATION

Segmental information is presented in respect of the Group’s business and geographical segments based on the Group’s management and internal reporting structure.

Inter-segment pricing is determined based on negotiated basis in the normal course of business.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise of expenses and assets of the Company and its dormant subsidiaries.



27. SEGMENT INFORMATION (CONT’D)

Business Segment

The Group comprises the following main business segments:

i) Manufacturing of self adhesive labels and stickers and trading of related products; and

ii) Manufacturing of automatic labelling machineries.

Geographical segments

Manufacturing of automatic labelling machineries is principally operated in Malaysia. Other geographical areas are involved in the manufacturing of self adhesive labels and stickers and trading of related products.

In presenting information on the basis of geographical segments, segment revenue and segment assets are based on the geographical location of assets.



27.

SEGM

ENT

INFO

RMAT

ION

(CON

T’D)

a.

Busi

ness

Seg

men

ts

<---

----

----

----

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tinui

ng O

pera

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----

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----

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cont

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----

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anuf

actu

ring

of s

elf

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sive

labe

ls a

nd

stic

kers

and

trad

ing

ofre

late

d pr

oduc

ts

Man

ufac

turin

gof

aut

omat

icla

belli

ngm

achi

nerie

sEl

imin

atio

nCo

nsol

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ufac

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gof

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RM’0

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nue

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1,57

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t sal

es 5

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l rev

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67,

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5,5

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371

1

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27.

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RMAT

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(CON

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a.

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ness

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men

ts (

cont

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27.

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(CON

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65

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0 8

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39,4

33

Inte

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3

64

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61,

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139

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27.

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a.

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ness

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men

ts (

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(121

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(4,7

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(10,

538)



27.

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ENT

INFO

RMAT

ION

(CON

T’D)

b.

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raph

ical

Seg

men

t <---

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27,

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8,6

52

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72

(5,5

05)

61,

574

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049

(2,2

22)

93,

827

155

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175

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148

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87,3

69

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tal e

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(31)

(256

) (3

5) 1

00

(983

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(1,8

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29,

585

7,8

18

21,

451

2,9

96

(5,3

60)

56,

490

84,

296

(1,3

53)

82,

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139

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184

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(2,0

61)

(6,2

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28. CONTINGENT LIABILITIES

Company2016 2015

RM’000 RM’000

Corporate guarantees in respect of credit facilities granted to subsidiaries 27,533 42,394

29. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES

Controlling related party relationships are as follows:

i) Its subsidiaries as disclosed in Note 5 to the financial statements.ii) A director of the Company, Koh Hong Muan @ Koh Gak Siong.

In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place at terms agreed between the parties during the financial year:

Group Company2016 2015 2016 2015

RM’000 RM’000 RM’000 RM’000Holding company Komarkcorp Berhad - Dividend income 1,020 988 1,020 988

Subsidiaries Komark International (M) Sdn. Bhd. - Sales 154 106 - - General Labels & Labelling (M) Sdn. Bhd. - Sales 1,395 1,067 - - General Labels & Labelling (JB) Sdn. Bhd. - Sales 3,914 3,594 - - General Labels & Labelling (Penang) Sdn. Bhd. - Sales - (10) - - Guangzhou Komark Labels & Labelling Co., Ltd. - Sales 399 260 - - Shanghai Komark Labels & Labelling Co., Ltd. - Sales 1,823 1,092 - - General Labels & Labelling Pte Ltd - Sales 27 26 - - General Labels & Labelling (Ipoh) Sdn. Bhd. - Sales - 10 - - Komark (Thailand) Company Limited - Sales 44 28 - - Komark Investment Holdings Ltd. - Dividend income - 2,139 - -



30. OPERATING LEASE COMMITMENTS

The future aggregate minimum lease payments under non-cancellable operating leases contracted for at the reporting date but not recognised as liabilities are as follows:

Group2016 2015

RM’000 RM’000

Not later than 1 year 56 160 Later than 1 year but not later than 5 years - 53

56 213

31. FAIR VALUE OF FINANCIAL INSTRUMENTS

Determination of Fair Value

Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value:

Note

Trade and other receivables 11Deposits with licensed banks 13Trade and other payables 21Borrowings (current) 20

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they are re-priced to market interest rates on or near the reporting date.

The carrying amount of the current portion of borrowings is reasonable approximation of fair value due to the insignificant impact of discounting.

Finance lease obligations

The fair values of these financial instruments are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk and foreign currency risk.

The Board of Directors reviews and agrees policies and procedures for the management of these risks. The Audit Committee provides independent oversight to the effectiveness of the risk management process.

It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall be undertaken.

The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.



32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)

(a) Credit Risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including cash and bank balances), the Group minimise credit risk by dealing exclusively with high credit rating counterparties.

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

Exposure to credit risk

At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statements of financial position.

Information regarding credit enhancements for trade and other receivables is disclosed in Note 11 to the financial statements.

Credit risk concentration profile

The Group determines concentration of credit risk by monitoring the business segment of its trade receivables on an ongoing basis.

At the reporting date, there was no significant concentration of credit risk for the Group and the Company other than those receivables as analysed in Note 11 to the financial statements.

Financial assets that are not impaired

Information regarding trade and other receivables that are not impaired is disclosed in Note 11 to the financial statements.

Financial assets that are impaired

Information regarding financial assets that are impaired is disclosed in Note 11 to the financial statements.

(b) Liquidity Risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.




(b) Liquidity Risk (cont’d)

Analysis of Financial Instruments by Remaining Contractual Maturities

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

<--------------------------------- 30.4.2016 ----------------------------->On demand or

within one year One to five yearsOver

five years TotalRM’000 RM’000 RM’000 RM’000

Group

Financial Liabilities

Trade and other payables 31,298 - - 31,298Borrowings 36,093 7,688 - 43,781

<--------------------------------- 30.4.2016 ----------------------------->On demand or

within one yearOne to

five yearsOver


Company


Trade and other payables 1,905 - - 1,905Borrowings 2,905 - - 2,905

<--------------------------------- 30.4.2015 ----------------------------->On demand or


five yearsOver


Group


Trade and other payables 30,700 - - 30,700Borrowings 43,374 10,953 - 54,327

<--------------------------------- 30.4.2015 ----------------------------->On demand or


five yearsOver


Company


Trade and other payables 875 - - 875Borrowings 3,006 - - 3,006




(c) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

As the Group has no significant interest-bearing financial assets, the Group’s income and operating cash flows are substantially independent of changes in market interest rates. The Group’s interest-bearing financial assets are mainly short term in nature.

The Group’s interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk. The Group manages its interest rate exposure by maintaining a mix of fix and floating rate of borrowings.

The following tables set out the carrying amounts, effective interest rates as at the reporting date and the remaining maturities of the Group’s and the Company’s financial instruments that are exposed to interest rate risk:

Effectiveinterest rate Total Within 1 year

% RM’000 RM’000

Group

2016

Financial assetsDeposits with licensed banks 0.65 - 3.45 889 889

Financial liabilitiesBank overdrafts 8.35 - 8.45 5,798 5,798Bankers’ acceptance 5.20 - 6.85 3,609 3,609Term loans 5.35 - 8.35 7,023 807Short-term loans 5.44 - 7.35 23,062 23,062

2015

Financial assetsDeposits with licensed banks 0.70 - 9.49 2,895 2,895

Financial liabilitiesBank overdrafts 8.10 - 8.35 5,781 5,781Bankers’ acceptance 5.00 - 5.59 7,004 7,004Term loans 5.35 - 7.90 9,899 1,551Short-term loans 6.12 - 7.35 25,460 25,460

Company

2016

Financial liabilitiesBank overdraft 8.10 2,905 2,905

2015

Financial liabilitiesBank overdraft 7.85 - 8.10 3,006 3,006




(d) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group is exposed to transactional currency risk primarily through sales and purchases and borrowings that are denominated in currencies other than the functional currency of the operations to which they relate. The currencies giving rise to this risk are primarily United States Dollar, Renminbi Yuan and Singapore Dollar and a small percentage in other foreign currencies. Foreign exchange exposures in these transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.

The net unhedged financial assets and liabilities of the Group that are not denominated in the functional currency is as follows:

Group2016 2015

RM RM

Net unhedged financial (liabilities)/assets:

United States Dollar (“USD”) 2,410,435 3,075,133 Renminbi Yuan (“RMB”) (16,657,792) (20,605,663)Singapore Dollar (“SGD”) 2,658,489 1,199,024 Thailand Baht (“THB”) 1,696,171 (17,183)Euro Dollar (“EUR”) (5,260) (50,506)Indonesian Rupiah (“IDR”) 446,206 284,559 Pound sterling (“GBP”) (1,355) -

(9,453,106) (16,114,636)

Sensitivity Analysis for Foreign Currency Risk

The following table demonstrates the sensitivity of the Group’s profit to a reasonably possible change in the USD, RMB, SGD, THB, EUR, IDR and GBP exchange rates against the respective functional currencies of the Group entities, with all other variables held constant.

Gain/(loss) in profit or loss2016 2015

RM RM

USD/RM - strengthened 10% 241,044 307,513 - weakened 10% (241,044) (307,513)RMB/RM - strengthened 10% 1,665,779 2,060,566 - weakened 10% (1,665,779) (2,060,566)SGD/RM - strengthened 10% 265,849 119,902 - weakened 10% (265,849) (119,902)THB/RM - strengthened 2% 33,923 344 - weakened 2% (33,923) (344)EUR/RM - strengthened 2% 105 1,010 - weakened 2% (105) (1,010)IDR/RM - strengthened 2% 8,924 5,691 - weakened 2% (8,924) (5,691)GBP/RM - strengthened 2% 27 -

- weakened 2% (27) -



33. CAPITAL MANAGEMENT

The primary objective of the Group’s capital management is to ensure that entities of the Group would be able to continue as going concerns while maximising the return to shareholders through the optimisation of the debt and equity ratios. The overall strategy of the Group remains unchanged from that in the previous financial year.

The Group monitors capital using gearing ratio, which is the amount of borrowings (Note 20 to the financial statements) divided by equity attributable to owners of the Company. The Group’s policy is to keep the gearing ratio within manageable levels. Capital represents equity attributable to the owners of the parent less the fair value adjustment reserve.

Group Company2016 2015 2016 2015

RM’000 RM’000 RM’000 RM’000

Borrowings 43,781 54,327 2,905 3,006 Total equity 110,944 108,706 83,954 83,091 Gearing ratio (times) 0.39 0.50 0.03 0.04

34. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

On 13 October 2015, the Company announced that Komarkcorp Berhad (“Komark”) had received a non-binding indication of interest from Autajon (“Autajon”) dated 13 October 2015 to explore a potential transaction involving the possible acquisition of the equity interest of the operating subsidiary companies of Komark by Autajon, namely:1. General Labels & Labelling (M) Sdn. Bhd. and its subsidiary companies, namely General Labels & Labelling (JB) Sdn.

Bhd. and Komark (Thailand) Company Limited;2. General Labels & Labelling Pte Ltd;3. Komark International (M) Sdn. Bhd. and its subsidiary company, namely PT Komark Labels and Labelling Indonesia;

and4. Komark Investment Holdings Ltd. and its subsidiary companies, namely Shanghai Komark Labels & Labelling Co.,

Ltd. and Guangzhou Komark Labels & Labelling Co., Ltd.

Autajon requires, among others, a due diligence to be satisfactorily completed before it can proceed to the stage of making a definitive offer involving the above operating subsidiary companies of Komark, if applicable.

The Board of Directors (“Board”) wishes to inform that the above interest from Autajon is at an exploratory stage. There is no assurance that a definite offer from Autajon will materialise.

The Company announced that the Board has on 15 October 2015 deliberated on the Letter of Intent and has agreed for Autajon to undertake a due diligence exercise pursuant to the Letter of Intent.

On 16 October 2015, the Company announced that barring any unforeseen circumstances, Autajon anticipates that the due diligence review will be completed within three (3) weeks from commencement for Autajon to be able to submit a definitive offer and term sheet two (2) weeks after the due diligence review process, with a view to executing a conditional share purchase agreement by 30 November 2015. The above timeline is tentative at this juncture and subject to changes depending on the progress of the due diligence exercise.

On 30 November 2015, the Company announced that the due diligence exercise by Autajon is still on-going at this juncture. Barring any unforeseen circumstances, the tentative date of executing a conditional sale and purchase agreement has been revised to mid-January 2016. The above timeline is tentative at this juncture and is subject to changes depending on the progress of the due diligence exercise.

On 15 January 2016, the Company announced that the due diligence exercise by Autajon (“the Buyer”) is still on-going at this juncture, The Buyer requires additional time for its due diligence assessment on some of the subsidiary companies of Komark, namely PT Komark Labels and Labelling Indonesia and General Labels & Labelling Pte Ltd, in order to adequately evaluate the commercial position of the said subsidiary companies. In addition, the Company and the Buyer are still in the midst of negotiating certain terms of the conditional sale and purchase agreement (“SPA”) which has yet to be finalised at this juncture. In this regard, the tentative date of executing a conditional SPA has been further extended until the SPA has been finalised.



34. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (CONT’D)

On 21 January 2016, the Company announced that as at the date of this announcement, Komark and Autajon (the “Parties”) are still deliberating certain terms of the SPA. Depending on the progress of negotiation between both Parties, the SPA is expected to be finalised by end of February 2016.

On 29 February 2016, the Company announced that as at the date of this announcement, the Parties are still deliberating certain terms of the SPA. The finalisation of the SPA is highly depending on the progress of negotiation between both Parties.

On 3 March 2016, the Company announced that the finalisation of the SPA is expected to complete on/before 26 May 2016.

The Company announced that Komark had, on 28 April 2016 entered into a conditional share purchase agreement with Lagora HK Limited (“Lagora HK”) for the proposed disposal by Komark of two (2) ordinary shares of USD1.00 each in Komark Investment Holdings Ltd., a wholly-owned subsidiary company of Komark, including its wholly-owned subsidiary companies, namely Shanghai Komark Labels & Labelling Co., Ltd. and Guangzhou Komark Labels & Labelling Co., Ltd., to Lagora HK for an indicative disposal consideration of RM48,000,000 to be satisfied entirely via cash. (“Proposed Disposal”)

The Company announced that the Board had on 16 May 2016 resolved to vary the proposed utilisation of proceeds arising from the Proposed Disposal to include a proposed special interim dividend to the shareholders of Komark.

On 18 July 2016, the Company announced that the resolution in relation to the Proposed Disposal was duly passed by way of poll at the Extraordinary General Meeting (“EGM”) of the Company held on 18 July 2016.

35. EVENT SUBSEQUENT TO THE BALANCE SHEET DATE

On 23 May 2016, the Company subscribed an additional 8,308,724 ordinary shares of USD1 each in Komark Investment Holdings Ltd. for a total consideration of RM32,433,104. The equity interest of the Company in Komark Investment Holdings Ltd. remains at 100%.

36. COMPARATIVES

Certain comparative figures have been restated to conform with current year’s presentation.

37. AUTHORISATION FOR ISSUE

The financial statements of the Company for the financial year ended 30 April 2016 were authorised for issue in accordance with a resolution of the Board of Directors on 22 August 2016.


ANALYSIS OF SHAREHOLDINGSAS AT 29 JULY 2016

Authorised share capital : 2,000,000,000Issued and paid-up share capital : 124,633,848Class of shares : Ordinary Shares of RM0.25 eachVoting rights : One vote per share

Size of Holdings

No. ofShareholders/

Depositors

% ofShareholders/

DepositorsNo. of

Shares held*% of Issued

Capital1 - 99 439 11.29 15,705 0.01100 - 1,000 488 12.55 369,896 0.301,001 - 10,000 1877 48.26 9,212,699 7.3910,001 - 100,000 978 25.15 30,789,816 24.70100,001 - 6,231,691(1) 104 2.67 29,843,299 23.946,231,692 and above (2) 3 0.08 54,402,433 43.65

TOTAL 3,889 100.00 124,633,848 100.00

Note:(1) Less than 5% of issued shares(2) 5% and above of issued shares

SUBSTANTIAL SHAREHOLDERS AS AT 29 JULY 2016

Direct IndirectNo. of Shares % of Issued No. of Shares % of Issued

Capital Capital Aimas Enterprise Sdn Bhd 16,360,333 13.13 - -Koh Hong Muan @ Koh Gak Siong 22,419,600 17.99 16,360,333 (1) 13.13King Regal Investments Limited 15,622,500 12.53 - -Koh Chee Mian 309,150 0.25 38,779,933(2) 31.12Koh Chie Jooi - - 38,779,933(2) 31.12

Notes:(1) Deemed interested in the shares by virtue of Section 6A(4)(c) of the Companies Act, 1965 held through Aimas Enterprise Sdn

Bhd.(2) Deemed interested in the shares by virtue of Section 122A(1)(a) and Section 6A(4)(c) of the Companies Act, 1965, held through

his parent, namely Koh Hong Muan @ Koh Gak Siong and Aimas Enterprise Sdn Bhd respectively.

DIRECTORS’ INTERESTS AS AT 29 JULY 2016

Director’s Name No. of SharesDirect Interest % Indirect Interest %

Koh Hong Muan @ Koh Gak Siong (1) 22,419,600 17.99 16,360,333 (2) 13.13Koh Chee Mian (1) 309,150 0.25 38,779,933 (3) 31.12Koh Chie Jooi (1) - - 38,779,933 (3) 31.12Tan Lay Ching - - - -Low Tuck Meng - - - -Ihsan bin Ismail - - - -

Notes:

(1) By virtue of their interests in shares of the Company, the Directors are also deemed to have an interest in the shares of all the subsidiaries of the Company to the extent the Company has an interest.

(2) Deemed interested in the shares by virtue of Section 6A(4)(c) of the Companies Act, 1965, held through Aimas Enterprise Sdn Bhd.

(3) Deemed interested in the shares by virtue of Section 122A(1)(a) and Section 6A(4)(c) of the Companies Act, 1965, held through his parent, namely Koh Hong Muan @ Koh Gak Siong and Aimas Enterprise Sdn Bhd respectively.


ANALYSIS OF SHAREHOLDINGS (CONT’D)AS AT 29 JULY 2016

THIRTY LARGEST SHAREHOLDERS/DEPOSITORS AS AT 29 JULY 2016

Name of Shareholders/DepositorsNo. of

Shares% of Issued

Capital

1. RHB NOMINEES (TEMPATAN) SDN BHDOSK CAPITAL SDN BHD FOR KOH HONG MUAN @ KOH GAK SIONG 22,419,600 17.99

2. RHB NOMINEES (TEMPATAN) SDN BHDOSK CAPITAL SDN BHD FOR AIMAS ENTERPRISE SDN. BHD. 16,360,333 13.13

3. RHB NOMINEES (ASING) SDN BHDEXEMPT AN (BP) FOR RHB SECURITIES HONG KONG LIMITED A/C CLIENTS (RETAIL) 15,622,500 12.53

4. PUBLIC NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR TEE KIM HEW (E-KLG/BTG) 1,664,900 1.34

5. PUBLIC NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR YEOH JOEY KENG (E-TSA) 1,081,800 0.87

6. AMBANK (M) BERHADPLEDGED SECURITIES ACCOUNT FOR WONG AH YONG (SMART) 888,800 0.71

7. WONG AH YONG 888,800 0.718. PUBLIC NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR TAN CHEN PANG (E-KLG/BTG) 822,700 0.669. CIMSEC NOMINEES (TEMPATAN) SDN BHD

CIMB BANK FOR TEH SWEE HENG (MM1118) 768,900 0.6210. GEORGE LEE SANG KIAN 700,200 0.5611. SJ SEC NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR LIM BOON HONG (SMT) 669,349 0.5412. CITIGROUP NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR WONG WAI KONG (473303) 660,000 0.5313. LEE YEN WEI 580,000 0.4714. PUBLIC NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR CHEW THIAN HOCK (E-JPR) 550,000 0.4415. SIOW YEOW HEW 550,000 0.4416. SIAH SUE WIN 533,700 0.4317. TAN LEE KIEW 524,900 0.4218. NG YOKE HIN 510,900 0.4119. PUBLIC NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR TAN TIAN SANG @ TAN TIAN SONG(E-PPG) 510,000 0.4120. SJ SEC NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR SOON FOO MUN (SMT) 500,000 0.4021. ANG KIAM CHAI 430,000 0.3522. SOW KIM CHYE 388,000 0.3123. LOH CHEU LING 354,000 0.2824. LAI KOK THYE 350,000 0.2825. MAYBANK NOMINEES (TEMPATAN) SDN BHD

LEE PENG SOON 350,000 0.2826. PUBLIC NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR CHONG CHUI FUN (E-IMO) 350,000 0.2827. RHB NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR SEE TIAU KIONG 348,000 0.2828. ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR TAN CHIA YI (6000065) 342,200 0.2729. NG HAI TENG 327,100 0.2630. KOH CHEE MIAN 309,150 0.25

TOTAL 70,355,832 56.45


Total number of Outstanding Warrants : 37,914,172Exercise price per Warrant : RM0.30Expiry date of the Warrants : 21 January 2020Voting Rights : Every Warrant holder present in person or by proxy at any Warrant holders’ meeting shall be entitled on a show of hands to one (1) vote or on a poll, one (1) vote for each Warrant held

ANALYSIS OF WARRANT HOLDINGS

Size of HoldingsNo. of

Holders% of

HoldersNo. of

Warrants% of Issued

Warrants1 - 99 25 2.56 1,689 0.00100 – 1,000 126 12.91 82,474 0.221,001 – 10,000 419 42.93 1,903,662 5.0210,001 – 100,000 346 35.45 12,740,370 33.60100,001 – 1,895,707 [1] 57 5.84 13,032,233 34.371,895,708 and above [2] 3 0.31 10,153,744 26.78TOTAL 976 100.00 37,914,172 100.00

Notes:-

[1] Less than 5% of issued warrants[2] 5% and above of issued warrants

THIRTY LARGEST WARRANT HOLDERS

No. Name of Warrant HoldersNo. of

Warrants %

1 RHB NOMINEES (TEMPATAN) SDN BHDOSK CAPITAL SDN BHD FOR AIMAS ENTERPRISE SDN BHD 5,453,444 14.38

2 RHB NOMINEES (TEMPATAN) SDN BHDOSK CAPITAL SDN BHD FOR KOH HONG MUAN @ KOH GAK SIONG 2,740,100 7.23

3 PUBLIC NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR TEE KIM HEW (E-KLG/BTG) 1,960,200 5.17

4 GEORGE LEE SANG KIAN 824,400 2.17 5 WONG WAI PING 815,800 2.156 TAN CHUAN ANN 800,000 2.11 7 TAN KWE HEE 600,200 1.58 8. CIMSEC NOMINEES (TEMPATAN) SDN BHD

CIMB BANK FOR YEONG CHOON HONG (MM0434) 600,000 1.589 RAZALI BIN DAUD 400,000 1.0610 AMBANK (M) BERHAD

PLEDGED SECURITIES ACCOUNT FOR WONG AH YONG (SMART) 319,367 0.8411 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR TIE MING CHUNG (CEB) 315,400 0.8312 HLIB NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR LIU CHUN FONG (CCTS) 300,200 0.7913 YEOW WAH CHIN 299,800 0.7914 CIMSEC NOMINEES (TEMPATAN) SDN BHD

CIMB BANK FOR CHOW KOK PIN (M12013) 280,000 0.7415 SJ SEC NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR LIM BOON HONG (SMT) 250,016 0.6616 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD

ANALYSIS OF WARRANT HOLDINGSAS AT 29 JULY 2016


ANALYSIS OF WARRANT HOLDINGS (CONT’D)AS AT 29 JULY 2016

No. Name of Warrant HoldersNo. of

Warrants %

PLEDGED SECURITIES ACCOUNT FOR LIM CHIN CHUEA @ LIM CHOON PENG 250,000 0.6617 CHOONG KEAN LEANG 239,000 0.6318 KOH KAH SOON 235,000 0.6219 LEE FOH THAI 230,000 0.6120 PUBLIC NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR GUI LAM GEOK (E-KUG) 205,000 0.5421 KOO ZAO CHEONG 200,300 0.5322 HLB NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR FRANCIS FOO KA YEE 200,000 0.53 23 KU SWEE MENG 200,000 0.5324 LEOW KUAN SHU 200,000 0.5325 LIM CHEE HOCK 200,000 0.5326 NG SAU KOON 200,000 0.5327 NG SIE KEE 200,000 0.5328 PUBLIC NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR LAI JEE SHIAN (E-SJA) 200,000 0.5329 TAN KEE SEONG 200,000 0.5330 TEH SWEE LIP 200,000 0.53

TOTAL 19,118,227 50.43

DIRECTORS’ WARRANT HOLDINGS AS AT 29 JULY 2016

Director’s Name No. of SharesDirect Interest % Indirect Interest %

Koh Hong Muan @ Koh Gak Siong (1) 2,740,100 7.23 5,453,444 (2) 14.38Koh Chee Mian (1) 103,050 0.27 8,193,544 (3) 21.60Koh Chie Jooi (1) - - 8,193,544 (3) 21.60Tan Lay Ching - - - -Low Tuck Meng - - - -Ihsan bin Ismail - - - -

Notes:

(1) By virtue of their interests in warrant of the Company, the Directors are also deemed to have an interest in the shares of all the subsidiaries of the Company to the extent the Company has an interest.

(2) Deemed interested in the warrant by virtue of Section 6A(4)(c) of the Companies Act, 1965, held through Aimas Enterprise Sdn Bhd.

(3) Deemed interested in the warrant by virtue of Section 122A(1)(a) and Section 6A(4)(c) of the Companies Act, 1965, held through his parent, namely Koh Hong Muan @ Koh Gak Siong and Aimas Enterprise Sdn Bhd respectively.


OwnerTitle No/Location Existing Expiry Land Area/ Age Of Tenure Date of last Net book

usage Date Build Up Building revaluation/ Value as at Area Sq. Ft (Year) acquisition 30.04.2016

RM (‘000)

Komark International(M) Sdn. Bhd

GM No. 439,Lot 132,Mukim of Kajang District,Hulu Langat, Selangor.

Factory CumOffice (HQ)

- L-147,756B-150,000

14 Freehold 2/14/2014 31,440

GeneralLabels & Labelling (M) Sdn. Bhd

Lot PTD 112290,Mukim of PlentongDistrict, Johor Bahru.

Factory CumOffice

- L-10,200B-5,394

20 Freehold 5/16/2014 1,056

Guangzhou KomarkLabels & LabellingCo. Ltd. *

Title No: 229030First Floor, Building 2,Chung Yie Road, Scientech Park Economic &Technological DevelopmentZone, Guangzhou

Factory CumOffice

11/9/2044 L-16,501B-17,416

18 Leasehold 6/12/2014 3,201

Shanghai KomarkLabels & LabellingCo. Ltd. *

Title No: 026381No.1, Baosheng Road,Songjiang Industrial Zone,Songjiang, Shanghai 201600, China.

Factory CumOffice

8/16/2052 L-89,222B-76,751

10 Leasehold 4/28/2014 22,009

Note:-* in the midst of disposal

LIST OF PROPERTIES

I/We (name of shareholder, in capital letters)

NRIC No./Passport No./ID No./Company No. (new) (old)

of (full address)

being a member of KOMARKCORP BERHAD, hereby appoint

(name of proxy as per NRIC/Passport, in capital letters) NRIC No./Passport No. (new)

(old) of (full address)

and/or failing him/her (name of proxy as per NRIC/Passport, in capital letters)

NRIC No./Passport No. (new) (old)

of (full address) and/or failing him/her *the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Twentieth Annual General Meeting of the Company to be held at Parameswara 1, Philea Mines Beach Resort, Jalan Dulang, Mines Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan on Tuesday, 11 October 2016 at 10.00 a.m. and at each and every adjournment thereof.

* Please delete the words “the Chairman of the Meeting” if you wish to appoint some other person to be your proxy.My/our proxy is to vote as indicated below:

RESOLUTIONS FOR AGAINST1. Approval of Directors’ Fees and the payment thereof Ordinary Resolution 12. Re- election of Encik Ihsan bin Ismail as Director Ordinary Resolution 23. Re-election of Mr Low Tuck Meng as Director Ordinary Resolution 34. Re-election of Ms Tan Lay Ching as Director Ordinary Resolution 45. Re-appointment of Messrs Ong & Wong as Auditors of the Company Ordinary Resolution 56. Proposed authority under Section 132D of the Companies Act, 1965 for the

Directors to issue sharesOrdinary Resolution 6

7. Proposed Grant of Authority to the Company to Purchase its own Ordinary Shares

Ordinary Resolution 7

8. Proposed Amendments to the Articles of Association of the Company Special Resolution

(Please indicate with an “X” in the spaces provided how you wish your vote to be cast. If you do not do so, the proxy will vote or abstain from voting at his discretion.)

Signature/Common Seal

Number of shares held:

Date:

PROXY FORMCDS account no. of authorised nominee

For appointment of two proxies, percentage of shareholdings to be represented by the proxies:

No. of shares PercentageProxy 1 %Proxy 2 %Total 100%

Then fold here

1st fold here

The Company SecretariesKOMARKCORP BERHAD (374265-A)Lot 6.05, Level 6, KPMG Tower8 First Avenue, Bandar Utama47800 Petaling JayaSelangor Darul EhsanMalaysia

AFFIXSTAMPHERE

Notes:

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to the qualification of the proxy.

2. A member may appoint not more than two (2) proxies to attend and vote at the same meeting. Where a member appoints two (2) proxies, the appointments shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.

3. Where a member of the Company is an exempt authorised nominee which holds shares in the Company for multiple beneficial owners in one securities account (“omnibus account”) as defined under the Securities Industry (Central Depositories) Act, 1991, there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

4. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its Common Seal or under the hand of the attorney.

5. The instrument appointing a proxy, with the power of attorney or other authority (if any) under which it is signed or a notarially certified or office copy of such power or authority, must be deposited at the Registered Office of the Company at Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

6. In respect of deposited securities, only members whose names appear on the Record of Depositors on 3 October 2016 (General Meeting Record of Depositors) shall be eligible to attend, speak and/or vote at the meeting or appoint proxy(ies) to attend, speak and/or vote on his behalf.

Personal Data Privacy:By submitting an instrument appointing a proxy(ies) and /or representative(s), the member accepts and agrees to the personal data privacy terms set out in the Notice of Annual General Meeting dated 30 August 2016.

KOMARKCORP BERHAD (374265-A)

Lot 132, Jalan 16/1, Kawasan Perindustrian Cheras Jaya43200 Balakong, Selangor Darul Ehsan, Malaysia.Tel: [603]9080 3333 Fax: [603]9080 5233Email: [email protected]

www.komark.com.my

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